TCR_Public/050118.mbx       T R O U B L E D   C O M P A N Y   R E P O R T E R

          Tuesday, January 18, 2005, Vol. 9, No. 14

                          Headlines

ADELPHIA COMMS: Discloses Asset Sales Totaling $274,000
AIRGAS INC: Refinances Credit Facility with $450 Million Loan
AMERICAN SUMMIT: S&P Raises Credit Rating to BBBpi from BBpi
AMERICAN TOWER: S&P Places Ratings on CreditWatch Positive
AMR HOLDCO: Moody's Assigns B2 Rating to Proposed Debt

ATA AIRLINES: Wants to Hire Ernst & Young as Auditor
ATA AIRLINES: Committee Wants to Retain Compass as Advisor
ATA HOLDINGS: Promotes Gilbert F. Viets to CFO Post
BANK OF AMERICA: S&P Affirms Low-B Ratings on Pass-Thru Certs.
BCP CRYSTAL: S&P Puts B+ Rating on $2.8 Billion Senior Debt

BEARINGPOINT INC: Names Joseph Corbett Chief Financial Officer
BIOCAPITAL BIOTECH: Fund Terminated Following Complete Liquidation
BREESE REAL ESTATE: Case Summary & Largest Unsecured Creditor
CABLE SATISFACTION: Court Extends Stay Termination to June 20
CATHOLIC CHURCH: Bates Butler Wants to Retain McEvoy Daniels

CESAR COLOR INC: Voluntary Chapter 11 Case Summary
CHAMPIONSWORLD LLC: Case Summary & 20 Largest Unsecured Creditors
COVENTRY HEALTH: Offering $250-Million Notes via Private Placement
CROWN CASTLE: S&P Raises Corporate Credit Rating to 'B' from 'B-'
DIAMETRICS MEDICAL: Subsidiary Buys U.K. Assets from Liquidator

EARL BRICE: Robert F. Craig Approved as Bankruptcy Counsel
EARL BRICE: Section 341(a) Meeting Slated for Jan. 28
EARTHMOVERS INC: Disclosure Statement Hearing Set for Feb. 22
EDGEN CORP: Moody's Assigns B3 Rating to Senior Secured Notes
FEDERAL-MOGUL: Court Okays Jefferies' Amended Services as Advisor

FRIEDMAN'S INC: Case Summary & 30 Largest Unsecured Creditors
G-FORCE: S&P Puts 'B-' Rating on $5 Million Class N Certificates
GMAC COMMERCIAL: Fitch Puts 'B' & Junk Ratings on Individual Debts
GOSHAWK RIDGE: Disclosure Statement Hearing Set for Jan. 25
GRAFTECH INTL: Files Required Supplement to Registration Statement

GREENWICH CAPITAL: S&P Puts 'B-' Rating on $13.5-Mil Class O Cert.
GREGG APPLIANCES: S&P Puts B Rating on $165 Million Senior Notes
GREGG APPLIANCES: Moody's Places B2 Rating on Senior Secured Notes
HEADLINE MEDIA: Nov. 30 Balance Sheet Upside-Down by $7.6 Million
HI-RISE RECYCLING: Judge Kendig Approves Disclosure Statement

HOLLINGER INC: To Escrow Some Funds from Telegraph Sale Proceeds
ICON HEALTH: S&P Lowers Corporate Credit Rating to 'B' from 'B+'
INTELSAT LTD: Zeus Evaluates Acquisition Following IS-804 Failure
INTELSAT LTD: Moody's Lowers Sr. Implied Ratings to B1 From Ba3
INTERACTIVE BRAND: Receives Delisting Notice from Amex

INTERSTATE BAKERIES: Hires KPMG as Internal Control Advisors
KAISER ALUMINUM: Inks Pact to Access $200 Million in New DIP Loan
KARGO CORPORATION: Section 341(a) Meeting Slated for Feb. 7
KARGO CORPORATION: Creditors Must File Proofs of Claim by May 9
LAIDLAW: Lenders Consent to Laidlaw's Sale of Healthcare Group

LB PACIFIC: Moody's Assigns B1 Rating to $170-Mil Sr. Term Loan B
LNR PROPERTY: Executes Supplemental Indentures
LONG BEACH: S&P Hacks Two Cert. Classes to B from BBB
MEDXLINK CORP: Completes Merger with Particle Drilling
NATIONAL ENERGY: Tara Energy Agrees to Pay $750,000 Settlement

NATIONAL ENERGY: Inks National Grid Companies Settlement Pact
NORTEL NETWORKS: Gets New Waiver from Export Development Canada
OWENS CORNING: Asbestos Claims Estimation Trial Begins
P&H CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors
PARMALAT USA: Asks Court to Extend Exclusive Periods

PIONEER ENERGY: Case Summary & 20 Largest Unsecured Creditors
PORTOLA PACKAGING: Extends Stock Purchase Offer Until Jan. 31
PRINTS PLUS: Taps Gadsby Hannah as Bankruptcy Counsel
PRINTS PLUS: Turns to Clear Thinking for Financial Advice
PRINTS PLUS: Look for Bankruptcy Schedules by February 25

RAYOVAC CORP: S&P Puts 'B+' Rating on $1.2 Billion Bank Facility
RCN CORP: Inks Various Pacts Pursuant to Chapter 11 Plan
SANKATY HIGH: Fitch Upgrades $22.5-Mil Sub. Debt Rating to 'BB+'
SELECT MEDICAL: Moody's Puts B1 Rating on Senior Secured Notes
SI INT'L: Moody's Assigns B1 Rating to Revolving Credit Facility

SI INTERNATIONAL: S&P Puts 'B+' Rating on $150 Million Sr. Loan
TECO ENERGY: Discloses Final Settlement Rate for Equity Units
TRANSTECHNOLOGY: To Trade on OTCBB After NYSE Delisting Reaffirmed
UAL CORPORATION: Court Issues TRO Enjoining U.S. Bank, RAIC & LA
UAL CORP: Retired Pilots Want Sec. 1113 Representative Appointed

UNITED REFINING: Earns $4.2 Million of Net Income in First Quarter
UNO RESTAURANT: S&P Puts 'B-' Rating on $140 Million Senior Notes
US AIRWAYS: Court Approves IAM Collective Bargaining Pact
VECTOR GROUP: SEC Declares Resale Registration Statement Effective
VENTAS REALTY: Moody's Affirms Ba3 Senior Debt Rating

VULCAN ENERGY: Moody's Lifts Sr. Implied Ratings from B1 to Ba2
WEIRTON STEEL: Inks Pact to Settle Shiloh Landfill Issues
WORLDCOM INC: Bondholders Suit Against Underwriters Going to Trial

* King & Spalding Increases New York Office Space by 30 Percent
* Sandler O'Neill Names Six New Principals

* Large Companies with Insolvent Balance Sheets

                          *********

ADELPHIA COMMS: Discloses Asset Sales Totaling $274,000
-------------------------------------------------------
Pursuant to the Excess Assets Sale Procedures approved by the U.S.
Bankruptcy Court for the Southern District of New York, Adelphia
Communications Corporation and its debtor-affiliates inform Judge
Gerber that they will sell these properties for at least $274,000
plus $6,900 worth of future services:

1. Property:          The former Lewis estate located at Mill
                      Street, in Coudersport, Pennsylvania

   Purchaser:         Warren B. Cederholm, Jr. and Donald R.
                      Caskey

   Agent:             Trails End Realty

   Amount:            $182,500

   Deposit:           $1,000

   Appraised Value:   $148,000

2. Property:          104 vehicles

   Purchaser:         Old Forge Auto Exchange

   Agent:             None

   Amount:            $46,500

   Deposit:           None

   Appraised Value:   No appraisal on the property was conducted

3. Property:          Unit P3-25 deeded parking spot located at
                      Villa Montane Parking Garage, at
                      63 Avondale Lane, in Beaver Creek, Colorado

   Purchaser:         Richard Agett

   Agent:             Remax Vail Valley, Inc.

   Amount:            $45,000

   Deposit:           $1,000

   Appraised Value:   $50,000

4. Property:          Cable equipment

   Purchaser:         Quality Cable and Electronics, Inc.

   Agent:             None

   Consideration:     $6,900 worth of future services:

                         * Storage of the Debtors' equipment for
                           two months at $10 per pallet, totaling
                           $1,700;

                         * Payment of freight charges to move 15
                           pallets of the Debtors' materials, a
                           service worth around $400; and

                         * Labor services valued at $4,800

   Deposit:           None

   Appraised Value:   No appraisal on the property was conducted

Headquartered in Coudersport, Pennsylvania, Adelphia
Communications Corporation (OTC: ADELQ) is the fifth-largest cable
television company in the country.  Adelphia serves customers in
30 states and Puerto Rico, and offers analog and digital video
services, high-speed Internet access and other advanced services
over its broadband networks.  The Company and its more than
200 affiliates filed for Chapter 11 protection in the Southern
District of New York on June 25, 2002.  Those cases are jointly
administered under case number 02-41729.  Willkie Farr
& Gallagher represents the ACOM Debtors.  (Adelphia Bankruptcy
News, Issue No. 77; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


AIRGAS INC: Refinances Credit Facility with $450 Million Loan
-------------------------------------------------------------
Airgas, Inc. (NYSE:ARG) has amended and restated its senior credit
facility with a syndicate of banks.  The five-year $450 million
senior unsecured credit facility, consists of a US$308 million and
C$50 million (the US dollar equivalent of $42 million) revolving
credit line and a $100 million term loan.  The Credit Agreement
supersedes the credit agreement dated July 30, 2001, as amended,
which would have matured in July 2006 and permitted the company to
borrow up to the equivalent of $463 million.  The company's
initial borrowings under the Credit Agreement total $299 million.

The current borrowing rate is LIBOR plus 95 basis points, down
from LIBOR plus 200 basis points under the 2001 Agreement.
Additionally, the covenants under the new Credit Agreement provide
the Company with more flexibility to complete acquisitions and
make restricted payments.  The Company expects to file the Credit
Agreement as an Exhibit to its Form 10-Q for the period ended
Dec. 31, 2004.

"Last November, we said we were looking to refinance our credit
facility and the savings have come in as expected," said Roger
Millay, senior vice president and chief financial officer.
"Additionally, we have increased our flexibility to take actions
that maximize shareholder value.  Our lending group's recognition
of the sustainability of our cash flows and the Company's strong
performance since closing the 2001 Agreement contributed to this
successful transaction."

                        About Airgas, Inc.

Airgas, Inc. (NYSE:ARG) -- http://www.airgas.com/-- is the
largest U.S. distributor of industrial, medical and specialty
gases, welding, safety and related products.  Its integrated
network of about 900 locations includes branches, retail stores,
gas fill plants, specialty gas labs, production facilities and
distribution centers.  Airgas also distributes its products and
services through eBusiness, catalog and telesales channels.  Its
national scale and strong local presence offer a competitive edge
to its diversified customer base.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 8, 2004,
Standard & Poor's Ratings Services raised its ratings on Airgas
Inc.  The corporate credit rating was raised to 'BB+' from 'BB'.
The outlook is stable on this Radnor, Pennsylvania-based
industrial gas distributor.

The upgrade reflects the likelihood that credit quality will be
sustained at improved levels, despite periodic moderate-size
acquisitions.


AMERICAN SUMMIT: S&P Raises Credit Rating to BBBpi from BBpi
------------------------------------------------------------
Standard & Poor's raised its counterparty credit and financial
strength ratings on American Summit Insurance Co. to 'BBBpi' from
'BBpi'.

"The ratings on American Summit were raised to reflect its
position within the group in addition to its extremely strong
capitalization and earnings on a stand-alone basis," said Standard
& Poor's credit analyst Terence Tan.

Ratings with a 'pi' subscript are based on an analysis of an
insurer's published financial information and additional
information in the public domain.  They do not reflect in-depth
meetings with an insurer's management and are therefore based on
less comprehensive information than ratings without a 'pi'
subscript.

Ratings with a 'pi' subscript are reviewed annually based on a new
year's financial statements, but may be reviewed on an interim
basis if a major event that may affect the insurer's financial
security occurs.  Ratings with a 'pi' subscript are not subject to
potential CreditWatch listings.


AMERICAN TOWER: S&P Places Ratings on CreditWatch Positive
----------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Boston,
Massachusetts-based wireless tower operator American Tower
Corporation, including the 'B-' corporate credit rating, and
related subsidiaries on CreditWatch with positive implications.
At Sept. 30, 2004, the company had $3.2 billion of total debt
outstanding.

"The CreditWatch listing reflects the expectation that the company
will continue to grow its tower co-locations and associated tower
operating cash flows over the next several years," explained
Standard & Poor's credit analyst Catherine Cosentino.  "While such
growth provides the potential for meaningful debt reduction, a key
rating determinant will be the company's financial policy.

Accordingly, Standard & Poor's will discuss with management their
acquisition plans, as well as possible stock repurchases in order
to resolve the CreditWatch listing."

American Tower benefits from the good fundamentals of the tower
leasing business.  U.S. wireless penetration of around 60% trails
that of a number of European and Asian countries and, combined
with an aggressive wireless pricing environment, suggests further
wireless growth, which should translate into solid demand for
tower space.

The tower industry also has significant competitive barriers, such
as:

   -- real estate zoning,

   -- high customer switching costs, and

   -- long-term leasing contracts with provisions for 3%-5% annual
      rental rate increases.

Towers are also relatively immune to technology risk.  With good
operating leverage accruing from a high fixed-cost component,
American Tower should be able to improve its consolidated EBITDA
margin to better than 60%, from about 56% (adjusted for net
interest income from TV Azteca) in third-quarter 2004. With only
modest capital-spending needs, a financial policy that limits both
debt-financed acquisition activity and potential share repurchases
would be supportive of a rating upgrade.


AMR HOLDCO: Moody's Assigns B2 Rating to Proposed Debt
------------------------------------------------------
Moody's Investors Service assigned first time ratings to the
proposed debt of AMR HoldCo. Inc. and EmCare HoldCo. Inc.  AMR
Holdco., which is the larger of the two intermediate holding
companies, and EmCare are co-borrowers and co-issuers of all
outstanding debt.  The proceeds from the proposed transactions,
along with $220 million cash equity from Onex Partners LP will be
used to effect the purchase of the two companies being sold by
Laidlaw Inc. (B1 senior implied rating) for approximately
$840 million including the assumption of approximately $13 million
of capital leases.

Concurrently, Moody's assigned a first time Speculative Grade
Liquidity rating of SGL-2 reflecting the expectation of good near
term liquidity.  The ratings outlook is stable.

A list of the new ratings assigned:

   -- $100 million Senior Secured Revolver, due 2011, rated B2

   -- $350 million Senior Secured Term Loan B, due 2012, rated B2

   -- $250 million Senior Subordinated Notes, due 2015, rated Caa1

   -- Senior Implied Rating, rated B2

   -- Senior Unsecured Issuer Rating, rated B3 (non-guaranteed
      exposure)

   -- Speculative Grade Liquidity Rating, SGL-2

The rating outlook is stable.

The ratings are subject to the closing of the proposed
acquisitions and the review of executed documentation.

The ratings reflect the risks associated with operating as a
stand-alone entity proforma for the separation from Laidlaw Inc.
The ratings also reflect modest proforma free cash flow relative
to sizable debt, high financial leverage, increasing costs for
providing professional liability and other insurance coverage for
its employees and contracted physicians, and high union
representation for its ambulance service workforce.

AMR HoldCo., has a significant amount of uncollectible revenue as
a result of providing charity care or unreimbursed care.  While
charity care is inherent in the mandatory provision of ambulance
transport and emergency department care to all patients, including
the uninsured, this care constrains the absolute level of
operating cash flow from operations.

Factors mitigating these concerns include strong demand for the
companies' services, leading market share in both the ambulance
transport and physician staffing for emergency departments, a
stable customer base, strong customer and geographic
diversification, an improving reimbursement environment, solid
technology investments and risk management.  Additional factors
supporting the rating include long-term relationships with key
customers, a customer retention rate of over 90% in both of
businesses, a solid base of recurring revenue related to a high
percentage of revenue being under a contract, and a shift in
strategy away from acquisitions to internal growth and cost
management.

In spite of the listed credit strengths, Moody's is concerned with
the high level of capital expenditures needed to support the
ambulance business and the low margins for both the ambulance
business and emergency department business.  Somewhat offsetting
this risk is the fact that the emergency department requires very
little incremental capital to support future growth.  Further,
management, over the past few years, has rationalized the
company's cost structure and expanded operating margins and
increased revenues at both divisions.

The stable ratings outlook anticipates that AMR HoldCo., will
continue to expand operating margins through controlling costs,
increasing volume from existing customers, and adding new
contracts in both businesses.  Continued revenue growth and
increased margins should translate into higher free cash flow
generation and debt reduction over time, improving debt coverage
statistics.  There is a risk, however, that pricing pressure from
third party payers and an increase in bad debt expense related to
higher uncompensated care could inhibit the company's recent
progress and prevent an improvement in the company's credit
metrics.

Proforma for the transaction, credit statistics are modest.
During the intermediate term, adjusted free cash flow as a
percentage of adjusted debt is expected to range in the mid to
upper single digits.  Financial leverage, as measured by the ratio
of Debt/EBITDA, is expected to decline from close to 5 times to
slightly over 3.5 times over the next two years.  Similarly, the
level of interest coverage (EBIT to interest) is expected to
increase to 2 times (EBITDA to proforma interest is expected to
hover around 3 to 3.5 times).

The assignment of a B2 rating for the proposed secured credit
facility reflects the priority position in the capital structure
and the expectation of asset coverage in a distressed scenario.
In Moody's opinion, excess collateral coverage in a distress
scenario would not likely be ample enough to support notching
above the B2 senior implied rating.  Further supporting the rating
is the fact that total committed bank facilities account for
approximately 65% of total pro-forma debt.

The credit facilities are secured by a first lien on the capital
stock of the co-borrowers and its subsidiaries, 60% of the capital
stock of controlled foreign operations, all inter-company debt of
the borrowers and each guarantor, and all property and assets of
the co-borrowers and each guarantor.  There is a downstream
guarantee from the companies' ultimate parent holding company,
EMSC, Inc., as well as an upstream guarantee from the co-
borrowers, AMR HoldCo./EmCare HoldCo., and their subsidiaries.

The assignment of a Caa1 rating for the proposed senior
subordinated notes considers the contractual subordination to any
existing and future senior debt as well as the absence of any
security supporting this class of debt.  The notes benefit from
the same guarantee package as the credit facility.

The assignment of the SGL-2 speculative grade liquidity rating
reflects good liquidity as it is expected that internally
generated cash flow will be sufficient to fund working capital,
capital expenditures and debt service over the next twelve months
ending November 30, 2005.  This rating also considers the modest
amount of external committed funding the company is anticipated to
have upon the close of the $100 million revolving credit facility.

Given the Company's historical performance, Moody's expects the
company to be in compliance with financial covenants under the
proposed credit facility, and thus to maintain access to this
committed source.  Moody's anticipates that the company will have
a comfortable cushion relative to its projected performance.

The liquidity rating, however, is limited partly due to the modest
level of free cash flow relative to required capital expenditures,
and limited cash on hand.  Any additional unexpected capital
expenditures, particularly in the ambulance business, could
pressure free cash flow.  Additionally, the SGL rating recognizes
the absence of an alternate source of liquidity, since all assets
will be encumbered under the credit agreement.

AMR HoldCo. and EmCare HoldCo., are leading providers of emergency
medical services.  American Medical Response provides ambulance
transport services, including 911 transports, on a national basis.
EmCare provides emergency department staffing and management
services under 315 hospital contracts.  For the twelve months
ended November 30, 2004, the pro-forma combined company generated
$1.6 billion in revenue and $133.4 million in EBITDA.


ATA AIRLINES: Wants to Hire Ernst & Young as Auditor
----------------------------------------------------
ATA Airlines and its debtor-affiliates seek the United States
Bankruptcy Court for the Southern District of Indiana's authority
to employ Ernst & Young, LLP, as their independent auditor, nunc
pro tunc to Oct. 26, 2004.

Ernst & Young has a vast amount of experience in providing
accounting, tax and financial advisory services in restructurings
and reorganizations, and enjoys an excellent reputation for
services it has rendered in other Chapter 11 cases on behalf of
debtors and creditors throughout the United States.

Terry E. Hall, Esq., at Baker & Daniels, in Indianapolis,
Indiana, asserts that the services of Ernst & Young are necessary
to enable the Debtors to maximize the value of their estates and
reorganize successfully.  Furthermore, Ernst & Young is well
qualified and able to represent the Debtors in a cost-effective,
efficient and timely manner.

Ernst & Young will primarily audit the Debtors' consolidated
financial statements for the year ending December 31, 2004.

Ms. Hall tells the Bankruptcy Court that Ernst & Young performed
certain auditing services for the Debtors at the time of the
Petition Date.  The fees for the services -- $337,500 -- were
agreed prior to Petition Date.  The Debtors have paid Ernst &
Young the first installment of $50,000, leaving a balance of
$287,500.  The remaining balance will be paid for these services:

   Description of Services                               Fees
   -----------------------                               ----
   A. Audit of the consolidated financial
      statements of ATA Holdings Corp.,
      included its Annual Report on Form 10-K,
      as of and for the year ending December 31, 2004

      Participate in all scheduled meetings of
      the audit committee of ATA Holdings

      Attendance at ATA's Annual Meeting of
      Shareholders

      Preparation of management letter                  $255,500

   B. Annual audit of the ATA Airlines, Inc.,
      Schedules of Passenger Facility Charges
      Collected, Withheld, Refunded/Exchanged, and
      Remitted for the year and each quarter during
      the year ending December 31, 2004 and related
      control report for the year ending
      December 31, 2004                                   13,500

   C. Agreed-upon procedures related to INS User
      Fees for the year ending December 31, 2004           8,500

   D. Attestation report on grant agreements with
      the Illinois Department of Commerce and
      Economic Opportunity                                10,000

The fees will be paid on this schedule:

     Progress
    Bill Number       Due Date                Amount
    -----------       --------                ------
       #2             January 7, 2005       $250,000
       #3             March 18, 2005          27,500
       #4             June 28, 2005           10,000
                                            --------
                            Total           $287,500

The fees for the services will be based the customary hourly
rates of Ernst & Young professionals:

   Partners and Principals               $575 - $695
   Senior Managers                       $470 - $555
   Managers                              $380 - $425
   Seniors                               $265 - $310
   Staff                                 $185 - $220

James A. Pease, a partner at Ernst & Young, assures Judge Lorch
that the firm does not represent any interest materially adverse
to the Debtors' estate.  Ernst & Young is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code.

However, Mr. Pease discloses that Ernst & Young may have in the
past or in the present transacted with certain entities, in
matters totally unrelated to the Debtors:

   (1) Ernst & Young has sought the services of professional
       service firms involved in the Debtors' Chapter 11 cases,
       including:

       * Baker & Daniels;
       * Paul, Hastings, Janofsky & Walker LLP;
       * Huron Consulting Group;
       * Vedder Price Kaufman & Kammholz PC;
       * Barnes & Thornburg, LLP; and
       * Katten Muchin Zavis Rosenman and Perkins Cole, LLP;

   (2) Ernst & Young is involved in a Revolving Credit Program
       with Citigroup, Wachovia/First Union and Bank of America;

   (3) Ernst & Young has borrowed a long term debt from General
       Electric;

   (4) Ernst & Young provides audit and tax services to AirTran
       Airways, Inc., and Southwest Airlines, possible purchasers
       of the Debtors' assets; and

   (5) Ernst & Young is currently facing a suit from Gilbert F.
       Viets, an officer of the Debtors.

Ernst & Young will conduct an ongoing review of its files to
ensure that no conflicts or other disqualifying circumstances
exist or arise.  If any new facts or circumstances are
discovered, Ernst & Young will supplement its disclosure to the
Bankruptcy Court.

                   Dispute Resolution Provisions

The Debtors and Ernst & Young have further agreed that:

   (a) any controversy or claim with respect to, in connection
       with, arising out of, or in any way related to the
       Application or the services to be provided will be brought
       in the Bankruptcy Court or the District Court, if the
       District Court withdraws the reference;

   (b) Ernst & Young and the Debtors, and any and all successors
       and assigns, consent to the jurisdiction and venue of the
       court as the sole and exclusive forum for the resolution
       of the claims, causes of actions or lawsuits;

   (c) Ernst & Young and the Debtors and any and all successors
       and assigns waive trial by jury, the waiver being informed
       and freely made;

   (d) if the Bankruptcy Court or the District Court upon
       withdrawal of the reference does not have or retain
       jurisdiction over the claims or controversies, Ernst &
       Young and the Debtors, and any and all successors and
       assigns, agree to submit first to non-binding mediation,
       and if mediation is not successful, then to binding
       arbitration, in accordance with dispute resolution
       procedures; and

   (e) judgment on any arbitration award may be entered into any
       court having proper jurisdiction.

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


ATA AIRLINES: Committee Wants to Retain Compass as Advisor
----------------------------------------------------------
The Official Committee of Unsecured Creditors of ATA Holdings
Corp., et al., seeks the United States Bankruptcy Court for the
Southern District of Indiana's authority to retain Compass
Advisers, LLP, as its financial advisor and investment banker,
effective as of November 4, 2004.

Lee P. Crockett, Co-Chairman of the Committee, relates that the
Committee selected Compass and its professionals due to the firm's
extensive experience and expertise in bankruptcy and
reorganization proceedings, particularly with respect to advising
committees of creditors, as well as extensive experience in the
airline and transportation sectors.

                         Scope of Services

As the financial advisor and investment banker to the Committee,
Compass will:

   (a) review and analyze ATA Airlines and its debtor-affiliates'
       business operations including historical financial results
       and future projections and assist the Committee in
       assessing the Debtors' business, operating and financial
       strategies;

   (b) provide a financial valuation of the ongoing operations
       and assets of the Debtors;

   (c) review and analyze the financial and economic rights and
       interests of the Debtors' various security holders and
       claimants;

   (d) advise the Committee with respect to the strategic options
       available for achieving a plan of reorganization, a sale
       of the Debtors' assets, a sale or sales of the Debtors'
       businesses or any of the Debtors' operations;

   (e) analyze and value securities and other assets proposed to
       be distributed to unsecured creditors or other classes of
       creditors or claimants under a plan of reorganization or
       various plans of reorganization proposals;

   (f) assist the Committee in negotiating the terms of a plan of
       reorganization, including developing, evaluating,
       proposing and negotiating financial settlement proposals;

   (g) in cooperation with the Committee's other professional
       advisors, assist and represent the Committee in
       negotiating a final plan of reorganization with the
       Debtors and other parties-in-interest;

   (h) as may be necessary, act as the Committee's expert witness
       in the Bankruptcy Court with respect to the value of the
       Debtors' going concern or enterprise values, the value of
       securities or other assets to be distributed to creditors
       and others in connection with a plan of reorganization or
       a sales or sales, and other issues relating to a proposed
       plan or plans of reorganization or a sale or sales of the
       Debtors' assets; and

   (i) render other financial advisory or investment banking
       services as may be agreed upon by Compass and the
       Committee.

                           Compensation

Pursuant to an Engagement Letter, Compass will be entitled to
receive, as administrative expenses from the general funds of the
Debtors' estates, compensation for the services it will provide to
the Committee:

   -- $125,000 for the period November 4 to 30, 2004; and

   -- $125,000 for each full or partial calendar month commencing
      December 1, 2004.

Upon consummation of any Transaction, Compass will entitled to
receive an Incentive Fee based on these ranges of percentage
recoveries of the unsecured creditors' Total Consideration:

                   Range of
             Percentage Recoveries     Total Incentives
             ---------------------     ----------------
                     Below 10%           0.75 of 1%
                    10% to 15%           0.80 of 1%
                    15% to 20%           0.85 of 1%
                    20% to 30%           0.90 of 1%
                    30% to 40%           0.95 of 1%
                40% or greater                   1%

Compass will be indemnified and held harmless against any losses,
claims, damages, or liabilities in connection with the engagement,
except to the extent they arise as a result of any gross
negligence, intentional misconduct, or bad faith on the part of
Compass in the performance of its services.

Harvey L. Tepner, a partner at Compass, assures the Court that
Compass does not represent any of the Debtors' creditors, other
parties-in-interest, or their attorneys or accountants, in any
matter that is adverse to the interests of any of the Debtors.
The firm is a "disinterested person" as defined in Section 101(14)
of the Bankruptcy Code.

Mr. Tepner discloses that Compass currently advises John Hancock
Mutual Funds, Well Fargo and Wilmington Trust Company in matters
unrelated to the Debtors.  Mr. Tepner adds that Compass and its
professionals may have, in the past or present, engaged with
certain entities in matters totally unrelated to the Debtors'
Chapter 11 cases, including:

   -- Akin Gump Strauss Hauer & Feld, LLP,
   -- Air Lines Pilots Association,
   -- Bank of America,
   -- Citigroup,
   -- General Electric Corporation,
   -- Loeb Partners Corporation, and
   -- Seabury Group,
   -- Spirit Airlines,
   -- United Airlines, and
   -- Wells Fargo Bank

Mr. Tepner relates that it is Compass' policy and intent to update
and expand its ongoing relationship search for additional
potential parties-in-interest in an expedient manner.  If any new
relevant facts or relationships are discovered or arise, Compass
will promptly file a supplemental affidavit pursuant to Rule
2014(a) of the Federal Rules of Bankruptcy Procedure.

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


ATA HOLDINGS: Promotes Gilbert F. Viets to CFO Post
---------------------------------------------------
ATA Holdings Corp. (ATAHQ) has named Gilbert F. Viets to the
position of Executive Vice President and Chief Financial Office.
Mr. Viets had served as ATA's Chief Restructuring Officer and
replaces David Wing, who left ATA to pursue other opportunities.
Mr. Viets led the preparations for ATA's Chapter 11 filing, and
has since coordinated the Company's reorganization efforts.  Mr.
Viets' responsibilities will include ATA's restructuring, finance,
accounting, treasury, internal audit, strategic planning and
information services areas.

Mr. Viets first served as Executive Vice President and CFO of the
Company from June 2004 to October 2004 until he was appointed
Chief Restructuring Officer from October 2004 to January 2005.  He
is a director of the Company and served as Chairman of the Audit
Committee from May 2003 to June 2004.  He was also a clinical
professor in the Systems and Accounting Program of the Kelley
School of Business at Indiana University, Bloomington, Indiana.
Mr. Viets, a Certified Public Accountant, was with Arthur Andersen
LLP for 35 years before retiring in 2000.  He graduated from
Washburn University of Topeka in Kansas.  He has been active in
numerous civic organizations and presently serves on the finance
committees of St. Vincent Hospital and Healthcare Center, Inc..
and St. Vincent Health, both located in Indianapolis.

                    Other Management Changes

Sean G. Frick, named Vice President of Strategic Planning in 2004,
will add duties as ATA's Chief Restructuring Officer and will
continue to report to Viets.  Mr. Frick, who joined ATA in 1997,
had been Director of Strategic Planning.

Richard W. Meyer, Jr., has been promoted to Senior Vice President
of Employee Relations.  Mr. Meyer, who joined ATA in 1989, had
been Vice President of Labor Relations.  Mr. Meyer's new position
combines the functions of human resources and labor relations for
all of ATA's work groups.

Brian T. Hunt, Vice President and General Counsel, has been
promoted to Senior Vice President and General Counsel.  Mr. Hunt,
who joined ATA in 1990, is also ATA's Corporate Secretary.

Wisty B. Malone, named Vice President and Controller in 2003, will
now assume additional responsibility as ATA's Treasurer.  Mr.
Malone, who joined ATA in 1995, had previously been Director of
Financial Reporting.

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


BANK OF AMERICA: S&P Affirms Low-B Ratings on Pass-Thru Certs.
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on 20
classes of various RMBS pass-through certificates issued by Bank
of America Mortgage Securities Inc., and Bank of America Mortgage
Trust.  At the same time, ratings are affirmed on 163 classes
from 11 RMBS transactions from both issuers.

The raised ratings reflect a significant increase in credit
support percentages to the mezzanine and subordinate classes due
to the paydown of the transactions, combined with the shifting
interest feature of the transactions and very low losses.  Credit
support for these transactions is provided by subordination.

The affirmations on the remaining classes reflect stable credit
support percentages, no losses, and rapid prepayments.

As of January 2004, the pools have total delinquencies ranging
from 0.00% (Bank of America Mortgage 2001-4 Trust group 2, Bank of
America Mortgage 2002-10 Trust group 2, and Bank of America
Mortgage Securities Inc.  Series 2004-3 groups 3 and 4) to 23.84%
(Bank of America Mortgage Securities Inc. Series 2002-G).  Serious
delinquencies have ranged from 0.00% to 10.53% (Bank of America
Mortgage Securities Inc. series 2002-G).  Cumulative losses for
all of the pools have been nonexistent due to the nature of the
collateral.  The lack of realized cumulative losses, combined with
the shifting-interest feature of the transactions, have caused
current credit support percentages to increase as a percentage of
the pool balances.

The pools initially consisted of 15- and 30-year fixed- and
adjustable-rate prime mortgage loans secured by first liens on
owner-occupied, one- to four-family dwellings.

Bank of America N.A., a Select Servicer in Standard & Poor's
Servicer Evaluations program, is the servicer of the mortgage
loans.

                         Ratings Raised

            Bank of America Mortgage Securities Inc.
                 Mortgage pass-thru certificates

                                     Rating
                                     ------
               Series    Class   To           From
               ------    -----   --           ----
               2002-G    2-B-1   AAA          AA
               2002-G    2-B-2   AAA          A
               2002-G    2-B-3   A+           BBB

                 Bank of America Mortgage Trust
                 Mortgage pass-thru certificates

                                     Rating
                                     ------
               Series    Class   To           From
               ------    -----   --           ----
               2002-10   1-B-1   AAA          AA
               2002-10   1-B-2   AA+          A-
               2002-10   1-B-3   AA-          BBB
               2002-10   2-B-1   AAA          AA+
               2002-10   2-B-2   AAA          AA
               2002-10   2-B-3   AA           A-
               2002-9    CB-2    AAA          AA+
               2002-9    CB-3    AA+          A
               2002-E    B-1     AAA          AA+
               2002-E    B-2     AAA          A+
               2002-E    B-3     A            BBB
               2002-J    B-1     AAA          AA
               2002-J    B-2     AA           A
               2002-J    B-3     A-           BBB
               2002-K    B-1     AAA          AA+
               2002-K    B-2     AA+          A+
               2002-K    B-3     A+           BBB+

                        Ratings Affirmed

            Bank of America Mortgage Securities Inc.
                 Mortgage pass-thru certificates

     Series    Class                                  Rating
     ------    -----                                  ------
     2002-G    1-A-1, 1-A-2, 1-A-3, 1-A-4, 1-A-5      AAA
     2002-G    1-A-R, A-PT, 2-A-1                     AAA
     2004-3    1-A-1, 1-A-2, 1-A-3, 1-A-4, 1-A-5      AAA
     2004-3    1-A-6, 1-A-7, 1-A-8, 1-A-9, 1-A-10     AAA
     2004-3    1-A-11, 1-A-12, 1-A-13, 1-A-14         AAA
     2004-3    1-A-15, 1-A-16, 1-A-17, 1-A-18         AAA
     2004-3    1-A-20, 1-A-21, 1-A-22, 1-A-23         AAA
     2004-3    1-A-24, 1-A-25, 1-A-26, 1-A-27         AAA
     2004-3    1-A-R, 1-A-MR, 1-A-LR, 2-A-1, 2-A-2    AAA
     2004-3    2-A-3, 2-A-4, 2-A-5, 2-A-6, 2-A-8      AAA
     2004-3    2-A-9, 2-A-10, 2-A-11, 2-A-12          AAA
     2004-3    2-A-14, 2-A-15, 2-A-16, 3-A-1, 3-A-2   AAA
     2004-3    3-A-3, 4-A-1, A-PO, 15-IO, 30-IO       AAA
     2004-3    1-B-1, X-B-1                           AA
     2004-3    1-B-2, X-B-2, 3-B-2                    A
     2004-3    1-B-3, X-B-3, 3-B-3                    BBB
     2004-3    1-B-4, X-B-4, 3-B-4                    BB
     2004-3    1-B-5, X-B-5, 3-B-5                    B
     2004-A    1-A-1, 1-A-R, 1-A-LR, 2-A-1, 2-A-2     AAA
     2004-A    2-A-3, 2-A-4, 3-A-1                    AAA
     2004-A    B-1                                    AA
     2004-A    B-2                                    A
     2004-A    B-3                                    BBB
     2004-A    B-4                                    BB
     2004-A    B-5                                    B
     2004-C    1-A-1, 1-A-R, 1-A-LR, 2-A-1, 2-A-2     AAA
     2004-C    3-A-1                                  AAA
     2004-C    B-1                                    AA
     2004-C    B-2                                    A
     2004-C    B-3                                    BBB
     2004-C    B-4                                    BB
     2004-C    B-5                                    B

                 Bank of America Mortgage Trust
                 Mortgage pass-thru certificates

     Series    Class                                  Rating
     ------    -----                                  ------
     2001-4    1-A-15, 1-A-16, 1-A-R, 2-A-3, A-WIO    AAA
     2002-10   1-A-6, 1-A-7, 1-A-8, 1-A-9, 1-A-10     AAA
     2002-10   1-A-11, 1-A-12, 1-A-26, 1-A-31         AAA
     2002-10   1-A-32, 1-A-33, 1-A-34, 1-A-35         AAA
     2002-10   1-A-WIO, 2-A-1, 2-A-3, 2-A-4, 2-A-5    AAA
     2002-10   2-A-6, 2-A-7, 2-A-WIO, A-PO            AAA
     2002-5    A-6, A-WIO, A-PO                       AAA
     2002-9    1-A-6, 1-A-8, 1-A-9, 1-A-15, 1-A-16    AAA
     2002-9    1-A-WIO, 2-A-1, 2-A-WIO, 3-A-1         AAA
     2002-9    3-A-WIO, A-PO, CB-1                    AAA
     2002-E    A-1, A-R                               AAA
     2002-J    A-1, A-2, A-3, A-4, A-P, A-R           AAA
     2002-K    1-A-1, 1-A-2, 1-A-3, 1-A-4, 1-A-5      AAA
     2002-K    1-A-6, 1-A-7, 1-A-IO, 1-A-R, 1-A-MR    AAA
     2002-K    1-A-LR, 2-A-1, 2-A-2, 3-A-1, 4-A-1     AAA
     2002-K    4-A-IO, B-1-IO                         AAA


BCP CRYSTAL: S&P Puts B+ Rating on $2.8 Billion Senior Debt
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating and
its recovery rating of '3' to $2.8 billion of senior secured
credit facilities of Dallas, Texas-based chemical producer BCP
Crystal US Holdings Corporation, a subsidiary of Celanese
Corporation.  The outlook is revised to positive from negative.

Standard & Poor's also affirmed its 'B+' corporate credit ratings
on BCP Crystal US Holdings and its Germany-based subsidiary,
Celanese AG.  In addition, Standard & Poor's affirmed its 'B+'
corporate credit and senior unsecured debt ratings on Acetex
Corporation, which is being acquired by Celanese Corporation, and
revised the outlook to positive from negative.

The outlook revision reflects the potential that improving
earnings, debt reduction, and Celanese Corporation's financial
policies would enable debt leverage measures to gradually
strengthen to more-than-satisfactory levels within the next few
years.  The 'B+' and the '3' recovery rating indicate that lenders
of the senior secured credit facilities can expect a meaningful
(50%-80%) recovery of principal in the event of default.

"The ratings incorporate the planned $1 billion IPO of Celanese
Corporation (parent company of BCP), the $1.6 billion incremental
increase in the senior credit facilities, as well as the pending
acquisitions of Acetex Corporation for $492 million and an
emulsion polymer business for $208 million," said Standard &
Poor's credit analyst Wesley E. Chinn.  "The acquisitions will
result in a modest rise in the already aggressive debt load, so
the continuation of the earnings uptrend is essential to improve
overall credit quality," added Mr. Chinn.

BCP Crystal's credit quality already incorporates considerable
debt that resulted from borrowings in 2004 to fund the Blackstone
Group's tender offer for the shares of Celanese--a transaction
valued at about $3.4 billion; and aggressive financial policies of
the equity sponsors, as underscored by the two pending debt-
financed acquisitions and dividend payouts.  These weaknesses
are only partially offset by the company's solid business profile
as an integrated producer of diverse commodity and industrial
chemicals, improving earnings, and the financial flexibility
resulting from its global asset base.

Significant product market shares and competitive cost structures
support good positions in its major products, and a product
portfolio that includes a balance of commodity, intermediate, and
more specialized industrial chemical products serving a wide range
of end markets.

With annual pro forma revenues of about $6.0 billion, Celanese
ranks among the larger and more diversified global chemical
businesses.


BEARINGPOINT INC: Names Joseph Corbett Chief Financial Officer
--------------------------------------------------------------
BearingPoint, Inc. (NYSE: BE), one of the world's largest business
consulting and systems integration firms, named Joseph Corbett,
former Executive Vice President and Chief Financial Officer of
Intelsat, Ltd., as its new Chief Financial Officer.  Mr. Corbett
joins the company effective immediately and will be located at the
Company's global headquarters in Virginia.

Mr. Corbett, 45, will be responsible for BearingPoint's corporate
finance and accounting globally.  He will also be a member of
BearingPoint's executive leadership team, which is responsible for
the strategic direction of the company.

"Joe Corbett brings a wealth of knowledge and sophistication to
the job of CFO," said Rod McGeary, Chairman and Chief Executive
Officer of BearingPoint.  "Joe's depth of experience in
strengthening global financial reporting capabilities and his
talents for negotiating favorable access to credit markets -- two
of BearingPoint's top priorities -- made him a natural choice for
the job."

Mr. Corbett comes to BearingPoint after nine years in a number of
leadership roles at Intelsat, where he served as Chief Financial
Officer since 1998 and led all financial operations at the global
satellite company, including its transition in 2001 to a private
company with customers in more than 200 countries.  Mr. Corbett
was instrumental in helping improve the international satellite
operator's financial position, including managing its initial
access to U.S. debt capital markets and refinancing $2 billion of
Intelsat's bank and public debt.

A certified public accountant and longtime resident of the
Washington, D.C., area, Mr. Corbett also previously held senior
positions at McLean, Va.- based home builder NVR, Inc., and the
Washington, D.C., offices of KPMG LLP, a global audit and
accounting firm.  A 1982 graduate of George Washington University,
Mr. Corbett is a member of the AICPA and the Greater Washington
Society of CPAs.

                        About the Company

BearingPoint, Inc. (NYSE: BE) -- http://www.BearingPoint.com/--  
is one of the world's largest business consulting, systems
integration and managed services firms serving Global 2000
companies, medium-sized businesses, government agencies and other
organizations.  We provide business and technology strategy,
systems design, architecture, applications implementation, network
infrastructure, systems integration and managed services.  Our
service offerings are designed to help our clients generate
revenue, reduce costs and access the information necessary to
operate their business on a timely basis. Based in McLean, Va.,
BearingPoint has been named by Fortune as one of America's Most
Admired Companies in the computer and data services sector.

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 17, 2004,
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured ratings on McLean, Virginia-based
BearingPoint, Inc., to `BB+' from `BBB-'.

At the same time, Standard & Poor's assigned a 'BB-' rating to the
company's $325 million in Series A and Series B convertible
subordinated notes due Dec. 14, 2024.

"The downgrade reflects currently weak profitability and cash flow
measures in a very competitive operating environment," said
Standard & Poor's credit analyst Philip Schrank. The ratings
reflect a currently high-cost structure, improving but low margins
in relation to historical levels, and weakened cash flow
protection measures. Offsetting these factors, the company
maintains a good competitive position specifically in the Public
Services sector (representing more than half of revenues), strong
client relationships, and increased global scale.


BIOCAPITAL BIOTECH: Fund Terminated Following Complete Liquidation
------------------------------------------------------------------
BioCapital Investment Advisors Inc., the trustee of BioCapital
Biotechnology and Healthcare Fund, an open-end mutual fund trust,
has completed the previously announced liquidation of the Fund.
As part of the liquidation of the Fund, all managed assets of the
Fund were subject to an orderly liquidation and the net proceeds
of this liquidation were distributed to the unitholders in
proportion to the number of units they held in the Fund upon the
date of liquidation.  The cash distribution took place on Dec. 13,
2004.  The closing financial statements of the Fund are being
prepared and will be transmitted to the unitholders of record
within the prescribed time period.

BioCapital Investment Advisors Inc. also disclosed that, following
the liquidation of the Fund, the Custodian Agreement with Royal
Trust Company in respect of the Fund and the Management Agreement
with BioCapital Investment Advisors Inc. in respect of the Fund,
were terminated.  Upon transmission of its closing financial
statements, the Fund's existence will be formally terminated.


BREESE REAL ESTATE: Case Summary & Largest Unsecured Creditor
-------------------------------------------------------------
Debtor: Breese Real Estate Trust
        PO Box 5140
        Santa Maria, California 93456-5140

Bankruptcy Case No.: 05-10079

Type of Business: The Debtor is a real estate trust.

Chapter 11 Petition Date: January 13, 2005

Court: Central District of California (Northern Division)

Judge:  R. Riblet

Debtor's Counsel: Jerry Namba, Esq.
                  Law Office of Jerry Namba
                  625 East Chapel Street
                  Santa Maria, California 93454
                  Tel: (805) 347-9848

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $500,000 to $1 Million

Debtor's Largest Unsecured Creditor:

    Entity                    Nature of Claim       Claim Amount
    ------                    ---------------       ------------
Nipomo Old Town Nursery       Trade Debt                  $3,900
Nipomo, California 93444


CABLE SATISFACTION: Court Extends Stay Termination to June 20
-------------------------------------------------------------
RSM Richer Inc. (formerly known as Richter & Associes Inc.), in
its capacity as Monitor and Interim Receiver of Cable Satisfaction
International Inc. (TSX:CSQ.A), disclosed that on Friday, Jan. 14,
2005, the Quebec Superior Court rendered an order extending the
Stay Termination Date from Jan. 20, 2005, to June 20, 2005.

This extension of the Stay Termination Date was necessary due to
further delays in the implementation of CSII's Amended Plan.  The
delays are principally the result of the difficulties encountered
in connection with the refinancing of the existing credit
facilities of CSII's subsidiary Cabovisao-Televisao por Cabo, S.A,
which refinancing is a condition precedent to the implementation
of the Amended Plan.

The Monitor and the Amended Plan Sponsor, Catalyst Fund Limited
Partnership I are continuing their efforts to complete the
refinancing in order to allow for the timely implementation of the
Amended Plan.

However, there can be no assurance that this condition precedent
will be satisfied and, accordingly, no assurance can be given that
the Amended Plan will be successfully implemented or implemented
on the terms and conditions of the Amended Plan.

As previously announced, the Amended Plan provides, among other
things, for no distribution to be made to the existing
shareholders.  As a result, the currently outstanding shares of
CSII have no value under the Amended Plan.

The orders rendered under the CCAA in respect of CSII, the
Monitor's reports and related materials at:

   http://www.richter.ca/InsolvencyDetails.aspx?InsolvencyID=1

Cable Satisfaction International Inc. (TSX:CSQ.A) through its
subsidiary Cabovisao, provides cable television services, high-
speed Internet access, telephony and high-speed data transmission
services to homes and businesses in Portugal through a single
network connection.


CATHOLIC CHURCH: Bates Butler Wants to Retain McEvoy Daniels
------------------------------------------------------------
A. Bates Butler, III, the Unknown Claims Representative in the
Diocese of Tucson's Chapter 11 case, needs the assistance of
counsel to properly perform his responsibilities.  By this
application, Mr. Butler asks Judge Marlar for authority to retain
McEvoy, Daniels & Darcy, P.C., to assist him.

McEvoy Daniels' services will include:

   * filing pleadings in the case and on appeal;

   * taking appropriate discovery;

   * working with other professionals and experts;

   * advising Mr. Butler on the various legal issues which may
     arise; and

   * appearing in Court on Mr. Butler's behalf.

Mr. Butler selected McEvoy Daniels because it has considerable
experience and is qualified to represent him in the Tucson
Diocese's case.

McEvoy Daniels will be paid at its standard hourly rates and
reimbursed for necessary costs and expenses.  The professionals
within the firm presently contemplated to primarily represent Mr.
Butler and their hourly rates are:

            Professional        Hourly Rate    Position
            ------------        -----------    --------
            Sally M. Darcy         $210        Attorney
            Constance Carter        $70        Paralegal

Other attorneys, paralegals and clerks in the firm may provide
services from time to time.

Mr. Butler assures the Court that McEvoy Daniels is a
"disinterested" entity and represents no interest adverse to the
Unknown Claims Representative in the matters upon which it is to
be engaged.

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.  (Catholic Church Bankruptcy News, Issue No. 14;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


CESAR COLOR INC: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Lead Debtor: Cesar Color, Inc.
             3433 East Wood Street
             Phoenix, Arizona 85040

Bankruptcy Case No.: 05-00600

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      Cesar Glass, Inc.                          05-00601
      Claudio Cesar                              05-00613

Type of Business: The Debtor manufactures architectural graphic
                  glass.  The Debtor's primary products are
                  ChromaFusion, GlassFresco and ImpressiveGlass.
                  ChromaFusion can reproduce any color, graphic or
                  photographic halftone, in laminated glass.
                  GlassFresco, a new and proprietary digital
                  imaging process, allows designers to create
                  permanent full color photographic quality images
                  in glass.  ImpressiveGlass is a newly released
                  textured laminated safety glass.
                  See http://www.cesarcolor.com/

Chapter 11 Petition Date: January 13, 2005

Court: District of Arizona (Phoenix)

Judge:  Randolph J. Haines

Debtors' Counsel: James F Kahn, Esq.
                  James F. Kahn, P.C.
                  301 East Bethany Home Road, #C-195
                  Phoenix, Arizona 85012
                  Tel: (602) 266-1717
                  Fax: (602) 266-2484

                        -- and --

                  Maureen P. Henry, Esq.
                  Collins, May, Potenza, Baran & Gillespie
                  2210 Bank One Center
                  201 North Central Avenue
                  Phoenix, Arizona 85073-0022
                  Tel: (602) 261-7102
                  Fax: (602) 252-1114

                       Estimated Assets      Estimated Debts
                       ----------------      ---------------
Cesar Color, Inc.   $1 Mil. to $10 Mil.   $1 Mil. to $10 Mil.
Cesar Glass, Inc.   $50,000 to $100,000   $1 Mil. to $10 Mil.
Claudio Cesar       $1 Mil. to $10 Mil.   $1 Mil. to $10 Mil.

The Debtors did not file a list of their 20 Largest Unsecured
Creditors.


CHAMPIONSWORLD LLC: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: ChampionsWorld, LLC
        250 Moonachie Road, 2nd Floor
        Moonachie, New Jersey 07074

Bankruptcy Case No.: 05-11194

Type of Business: The Debtor is a marketer and promoter aiming
                  to boost the country's interest in soccer.  The
                  company has brought numerous European teams to
                  play in the U.S.
                  See http://www.championsworld.com/

Chapter 11 Petition Date: January 13, 2005

Court: District of New Jersey (Newark)

Judge:  Morris Stern

Debtor's Counsel: Daniel M. Eliades, Esq.
                  Kim R. Lynch, Esq.
                  Forman, Holt & Eliades LLC
                  218 Route 17 North
                  Rochelle Park, New Jersey 07662
                  Tel: (201) 845-1000

Estimated Assets: $0 to $50,000

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

    Entity                                Claim Amount
    ------                                ------------
US Soccer Federation                          $724,124
1801 South Prairie Avenue
Chicago, Illinois 60616

CSA                                           $195,928
237 Metcalf Street
Ottawa, Ontario, Canada K2P 1R2

Drew & Rogers, Inc.                           $142,841
30 Plymouth Street
Fairfield, New Jersey 07004

Executive Jet                                 $107,595
4556 Airport Road
Cincinnati, Ohio 45226

Four Seasons Hotel                             $89,861
1 Logan Square
Philadelphia, Pennsylvania 19103

Iris Promotional Marketing, Ltd.               $81,000
1st Floor, Bankside Central
76-80 Southwark Street
London, England SE1 0PN

Hilton Shorthills                              $68,370

Celtic                                         $67,981

Hilton Pittsburgh                              $64,043

Traphagen & Traphagen                          $62,120

Hilton E. Brunswick                            $59,475

The Westin Philadelphia                        $56,922

Haymarket Publishing                           $51,890

ESPN Radio                                     $50,000

ProExcel                                       $44,459

The Ardian Group, Inc.                         $41,062

The Westin Harbour Castle                      $41,028

The Fairmount Chicago                          $39,296

James Champan & Company                        $37,666

Viacom-Outdoor                                 $35,699


COVENTRY HEALTH: Offering $250-Million Notes via Private Placement
------------------------------------------------------------------
Coventry Health Care, Inc. (NYSE:CVH) intends to offer, through a
private placement, subject to market and other conditions:

   -- $250 million original principal amount of its senior notes
      due 2012 and

   -- $250 million original principal amount of its senior notes
      due 2015.

The senior notes will be offered to qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as
amended, and outside the United States pursuant to Regulation S.
The senior notes will rank equal in right of payment to all of
Coventry's existing and future senior debt, including its existing
8.125% senior notes due 2012 and new credit facilities.  The
senior notes will be general unsecured obligations of Coventry.
Coventry plans to use the net proceeds of the senior notes
offering, together with cash on hand and borrowings under its new
credit facilities, to fund the acquisition of First Health Group
Corp., including the repayment of First Health's existing
outstanding indebtedness.  The closing of the offering is
conditioned on the substantially concurrent closing of the First
Health acquisition.

The securities will not be registered under the Securities Act or
any state securities laws and, unless so registered, may not be
offered or sold in the United States except pursuant to an
exemption from the registration requirements of the Securities Act
and applicable state laws.

First Health -- http://www.firsthealth.com/-- the premier
national health-benefits services company, specializes in
providing large payors with integrated managed care solutions.
First Health is a unique national managed care company serving the
group health, workers' compensation and state agency markets.
Using technology to enable service and managed care innovations,
First Health sets the bar for industry performance.

This communication is not a solicitation of a proxy from any
security holder of First Health.  Coventry and First Health filed
a registration statement on Form S-4 with the SEC in connection
with the merger.  The Form S-4 contains a prospectus, a proxy
statement and other documents for the stockholders' meeting of
First Health at which time the proposed transaction will be
considered.  The Form S-4, proxy statement and prospectus contain
important information about Coventry, First Health, the merger and
related matters.  Investors and stockholders should read the Form
S-4, the proxy statement and prospectus and the other documents
filed with the SEC in connection with the merger carefully before
they make any decision with respect to the merger.  The Form S-4,
proxy statement and prospectus, and all other documents filed with
the SEC in connection with the merger are available free of charge
at the SEC's web site, http://www.sec.gov/

All documents filed with the SEC by Coventry in connection with
the merger are available to investors free of charge by writing
to:

         Coventry Health Care, Inc.
         6705 Rockledge Drive
         Suite 900
         Bethesda, Maryland 20817
         Attn: Investor Relations

All documents filed with the SEC by First Health in connection
with the merger and the option tender offer are available to
investors free of charge by writing to:

         First Health Group Corp.
         Highland Avenue
         Downers Grove, Illinois 60515
         Attn: Investor Relations

                        About the Company

Coventry Health Care -- http://www.coventryhealth.com/-- is a
managed health care company based in Bethesda, Maryland operating
health plans and insurance companies under the names Coventry
Health Care, Coventry Health and Life, Altius Health Plans,
Carelink Health Plans, Group Health Plan, HealthAmerica,
HealthAssurance, HealthCare USA, OmniCare, PersonalCare,
SouthCare, Southern Health and WellPath.  Coventry provides a full
range of managed care products and services, including HMO, PPO,
POS, Medicare+Choice, Medicaid, and Network Rental to 3.1 million
members in a broad cross section of employer and government-funded
groups in 15 markets throughout the Midwest, Mid-Atlantic and
Southeast United States.

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 9, 2004,
Moody's Investors Service confirmed Coventry Health Care, Inc.'s
ratings (senior unsecured rating at Ba1) in conjunction with the
company's planned acquisition of First Health Group Corp.  While
the increased debt that Coventry is expected to issue with this
transaction is larger than what had been assumed in the ratings,
the rating agency noted that Coventry has a credible plan to bring
its financial leverage to a level consistent with the rating
within a short period.  In addition, Moody's views the strategic
opportunities presented by the acquisition as positive.  However,
Moody's noted that the acquisition poses both operational and
integration issues and as a result the outlook on the ratings has
been changed to negative.

The rating action concludes the review for possible downgrade that
was initiated on October 18, 2004.  The review was prompted by the
announced planned acquisition of First Health which raised
questions with respect to management's tolerance for financial
leverage, its appetite for future acquisitions and the company's
near term financial plans for de-leveraging.


CROWN CASTLE: S&P Raises Corporate Credit Rating to 'B' from 'B-'
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on Houston,
Texas-based wireless tower operator Crown Castle International
Corporation.  The corporate credit rating was raised to 'B' from
'B-'.  All ratings were removed CreditWatch, where they were
placed with positive implications June 28, 2004.

The outlook is stable.  As of Sept. 30, 2004, the company had
about $1.9 billion of debt and $508 million of redeemable
preferred stock outstanding.

The previous CreditWatch listing cited the potential credit
improvement if substantially all after-tax proceeds of the $2
billion sale of Crown Castle's U.K. operation were used to pay
down debt.  "The upgrade reflects the fact that Crown Castle did
indeed apply the bulk of the U.K. sale proceeds to debt
reduction," said Standard & Poor's credit analyst Catherine
Cosentino.  "As a result, debt to EBITDA (including preferred
stock and on a lease-adjusted basis) is expected to be in the high
7x area for 2005, substantially down from 10.1x for 2003."

Despite the material improvement in leverage, Crown Castle's
credit profile continues to be constrained by a still fairly
aggressive financial profile, which overshadows the favorable
characteristics of its tower business.  The company's tower
portfolio has good growth prospects, limited competitive risk, and
strong operating leverage.  Tower-related spending by wireless
carriers is expected to remain robust in the next few years due to
continued growth in subscribers and minutes of use, and increasing
emphasis by carriers on network quality.

Competitive risk is limited by such factors as long-term lease
contracts with carriers, real estate zoning, and lack of a
technology substitute.  With mostly fixed costs and limited
maintenance capital expenditures, the tower business has strong
operating leverage, as revenues from the combination of
contractual rent escalation and additional lease-ups stream
directly to EBITDA and free cash flow. All these factors enabled
Crown Castle to grow revenues by about 8% year over year and
maintain strong EBITDA margins of 49% during the third quarter of
2004.


DIAMETRICS MEDICAL: Subsidiary Buys U.K. Assets from Liquidator
---------------------------------------------------------------
Diametrics Medical, Inc.'s (OTCBB:DMED) wholly owned United
Kingdom subsidiary, TGC Research Limited, has acquired certain
assets from the liquidator of Diametrics Medical Limited.  DML,
formerly a wholly owned subsidiary of Diametrics Medical, Inc.,
was placed into liquidation on Nov. 22, 2004.

The assets acquired by TGC included certain equipment,
intellectual property and trademarks of DML.  These assets are
expected to form the core of a new product R&D program which TGC
will begin implementing in early February 2005.  This program
initially will be focused on a line of products aimed at
monitoring and controlling glucose on a continuous basis in
critically ill patients in a hospital setting at the point-of-
patient care. Initial product introduction is expected within 18-
24 months, followed by continued improvements, enhancements and
expansion of the product line.

A significant research study on controlling glucose within tight
parameters was published in November of 2001.  As a result of this
and other studies, tight glycemic control protocols have changed
practice patterns in virtually all ICU settings around the world.
At a recent lecture on this topic, at the Society of Critical Care
Medicine Congress in February 2004, 80% of all attendees indicated
that their hospital had instituted some form of tight glycemic
control.  As one physician put it: "Glucose is the 12th vital
sign."

"Published clinical evidence, we believe, has conclusively
demonstrated that maintaining patients within strict glycemic
limits (a clinical practice known as tight glycemic control, or
TGC) can dramatically reduce mortality, risk of infection and
other complications," said David B. Kaysen, President and CEO of
Diametrics.  Mr. Kaysen went on to say, "We believe the most cost-
effective way to achieve optimal glycemic control is by the
continuous monitoring of glucose, a measurement modality that is
not currently available in intensive care units."

Mr. Kaysen also stated, "Our new focus as a company will be to
develop a product system that will effectively and accurately
measure glucose, on a continuous basis, in critically ill
hospitalized patients.  We believe our product offering, when
introduced to the market, will allow clinicians around the world
to maintain tight glycemic control in this patient population,
which we believe represents a significant opportunity for our
company."

                        About the Company

Diametrics Medical makes blood- and tissue-analysis systems that
provide immediate or continuous diagnostic results.  Other product
applications are based on fiber-optic technology and include the
Neurotrend, Paratrend 7, and Neotrend continuous-monitoring
products that measure blood gases and temperature in neurosurgery
patients, critically ill adults, and newborn babies.  Diametrics
Medical markets its products to hospitals through distributors
such as Codman & Shurtleff.

                          *     *     *

On June 9, 2004, KPMG LLP provided written notice to Diametrics
Medical, Inc., that the Firm declines to stand for reappointment
and have resigned as auditors and principal accountants for the
year ended December 31, 2004.  KPMG informed the Company that the
client-auditor relationship would cease upon completion of the
auditor's review of the Company's consolidated financial
statements as of, and for, the three and six-month periods ended
June 30, 2004.

KPMG's audit reports on the consolidated financial statements of
Diametrics Medical, Inc. as of, and for, the years ended Dec. 31,
2003, and 2002, note that the Company has suffered from recurring
losses and negative cash flows, raising substantial doubt about
its ability to continue as a going concern.

Other than such qualification as to uncertainty as a going
concern, the audit reports of KPMG LLP did not contain any adverse
opinion or disclaimer of opinion, nor were they qualified or
modified as to audit scope or accounting principles.

The Company has conducted initial interviews with potential
successors to KPMG LLP and expects to appoint new principal
accountants during the third quarter.


EARL BRICE: Robert F. Craig Approved as Bankruptcy Counsel
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Nebraska gave Earl
Brice Equipment, LLC, permission to employ Robert F. Craig, P.C.
as its general bankruptcy counsel.

Robert F Craig will:

   a) prepare pleadings and applications for the Debtor and
      conduct examinations incidental to its bankruptcy
      proceedings and the administration of its chapter 11 case;

   b) advise the Debtor of its rights, duties and obligations as a
      debtor in possession in its chapter 11 case;

   c) take all necessary actions in the preservation and
      administration of the Debtor's estate;

   d) assist the Debtor in the analysis and pursuit of litigation
      related to its chapter 11 case; and

   e) advise and assist the Debtor in the formulation of a plan of
      reorganization and disclosure statement and all related
      documents to the plan and disclosure statement.

Jenna B. Taub, Esq., a Member at Robert F. Craig, is the lead
attorney for the Debtor's restructuring.  Ms. Taub discloses that
the Firm received a $15,000 retainer.

Robert F. Craig did not submit the hourly compensation rates of
its professionals performing services to Earl Brice when the
Debtor filed its application to employ the Firm.

Robert F. Craig assures the Court that it does not represent any
interest adverse to the Debtor or its estate.

Headquartered in Omaha, Nebraska, Earl Brice Equipment, LLC, filed
for chapter 11 protection on December 21, 2004 (Bankr. D. Nebr.
Case No. 04-84283).  When the Debtor filed for protection from its
creditors, it reported estimated assets and debts of $10 million
to $50 million.


EARL BRICE: Section 341(a) Meeting Slated for Jan. 28
-----------------------------------------------------
The U.S. Trustee for Region 13 will convene a meeting of Earl
Brice Equipment, LLC's creditors at 9:30 a.m., on Jan. 28, 2005,
at Roman L. Hruska Courthouse, 111 South 18th Plaza, U.S. Trustee
Meeting Room in Omaha, Nebraska 68102.  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 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.

Headquartered in Omaha, Nebraska, Earl Brice Equipment, LLC, filed
for chapter 11 protection on December 21, 2004 (Bankr. D. Nebr.
Case No. 04-84283).  Jenna B. Taub, Esq., at Robert F. Craig,
P.C., represents the Debtor in its restructuring efforts.  When
the Debtor filed for protection from its creditors, it reported
estimated assets and debts of $10 million to $50 million.


EARTHMOVERS INC: Disclosure Statement Hearing Set for Feb. 22
-------------------------------------------------------------
The Honorable Janice Miller Karlin of the U.S. Bankruptcy Court
for the District of Kansas will convene a hearing at 9:00 a.m., on
February 22, 2005, to consider the adequacy of the Disclosure
Statement explaining the Plan of Reorganization filed by
Earthmovers, Inc.

The Debtor filed its Disclosure Statement and Plan on January 4,
2005.

The Plan provides for the sale of substantially all of the
Debtor's assets.  Pursuant to the Plan:

   a) the Debtor's major secured creditor, Citizens State Bank
      will be paid the amount of its cash collateral from the
      proceeds of the net sale of the asset sale;

   b) all debts incurred during its chapter 11 proceeding will be
      paid, including administration and liquidation costs; and

   c) all priority creditors will be paid in full on a Pro Rata
      basis.

The Plan groups claims and interests into seven classes and
provides for these recoveries:

   a) Class 1 impaired claims consisting of Administrative Claims
      will be paid in full upon the Plan's confirmation;

   b) Class 2 impaired claims consisting of the Internal Revenue
      Services Priority Claims will be paid in full with a 5%
      interest rate on the first anniversary of the Plan's
      confirmation;

   c) Class 3 impaired claims consisting of the Secured Claims of
      Robbie Oelschlager will be paid in full on or before the
      first anniversary of the Plan's confirmation;

   d) Class 4 impaired claims consisting of the Secured Claims of
      Citizens State Bank of Maryville, Kansas will be paid in
      annual payments with an interest rate of 5% commencing on
      the first anniversary of the Plan's confirmation;

   e) Class 5 impaired claims consisting of Unsecured Creditors'
      Claims will be paid in full in six annual installments in
      the amount of $18,439.10 each, beginning on the first
      anniversary of the Plan's confirmation;

   f) Class 6 impaired claims of the Dell Computers Claims will be
      paid with the Debtor's assumption of the leases of several
      computers from Dell Computers as cure for any and all
      arrearages with Dell; and

   g) Class 7 impaired claims consisting of the claims of Richard
      Terry Bailey and Ruth Bailey will not be paid under the Plan
      until all the claims of all other creditors are paid.

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 on or before February 16, 2005.

Headquartered in Washington, Kansas, Earthmovers, Inc., --
http://www.earthtrucks.com/-- specializes in the sales and
service of medium to heavy trucks.  The Company filed for chapter
11 protection on September 2, 2004 (Bankr. D. Kan. Case No.
04-42477).  Charles T. Engel, Esq., and John T. Houston, Esq., at
Cosgrove Webb & Oman represent the Debtor in its restructuring
efforts.  When the Debtor filed for bankruptcy protection, it
estimated assets of up to $10 million and debts of up to $10
million.


EDGEN CORP: Moody's Assigns B3 Rating to Senior Secured Notes
-------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Edgen
Corporation's proposed $105 million senior secured notes due 2011.
Moody's also assigned a B3 senior implied rating, Caa2 issuer
rating, and SGL-3 speculative grade liquidity rating to Edgen.
The outlook is stable.

The proceeds of the note offering along with contributed equity of
approximately $21.6 million from Jeffries Capital Partners and
$2.4 million from Edgen Corporation management will be used to
finance the acquisition of Edgen.  Jeffries Capital and Edgen
management will contribute the $24 million investment to Edgen
Acquisition Corporation, which will also be the original issuer of
the secured notes.  Immediately following the closing of the
acquisition, Edgen Acquisition Corp. will be merged into Edgen.
Post the transaction, Edgen will be owned 81% by Jeffries Capital
and 19% by Edgen management.

The B3 senior implied rating reflects the modest scale of Edgen
Corp's operations, the uncertain long-term impact of its recent
restructuring and integration efforts, the inherent cyclicality of
the energy and industrial markets that use Edgen's specialized
carbon and alloy pipe, and the potential for margin compression
given volatile steel prices and relatively slow-moving inventory.
The rating also incorporates the increased leverage associated
with the proposed transaction, relatively weak liquidity, minimal
tangible asset coverage, and the likelihood of acquisitions.

The ratings are supported by the recent improvement in Edgen
Corp's operating performance, which has been helped by steadily
increasing prices, a shift to a higher value product mix, and
reduced labor costs as well as the integration of its various
business segments and the implementation of a new ERP/MIS
platform.

Edgen Corp. is a distributor of third party manufactured pipe and
pipe fittings and flanges to a variety of end users in the oil and
gas, power generation, and process industries.  From 1996 to 2002,
Edgen completed seven acquisitions.  None of the acquired
companies were integrated and each operated as a standalone entity
with its own CEO.

In March 2003, Edgen Corp. began a strategic restructuring to
integrate seven business segments into two, increase the sales mix
toward specialty products, install a new management ERP/MIS
platform, and reduce its labor force by one-third, to 200
employees from 300.

In 2004, Edgen Corp. began to realize substantial margin
improvement related to significantly higher commodity prices,
improved product mix, and one-time benefits from lower cost
inventory reductions.  Going forward, management believes its new
business model will result in gross margin improvement of 3% to 5%
over historic levels on a sustainable basis.  However, given the
very limited operating history under the new business model it is
uncertain as to what is a true sustainable margin over the longer
term.

Management also installed a new ERP/MIS platform that should help
to better manage inventory levels and maintain consistent pricing
through out the organization going forward.  Prior to installing
this system there were significant selling price variances that
existed between individual operating entities.

However, to help expedite the migration of four legacy systems
into a new single ERP platform, management used a hard start date
and did not integrate the old system.  As a result, access to
historic information prior to the start date will remain
difficult.

The scale of Edgen Corp.'s operation is modest compared to some
its competitors.  Edgen had revenue of $150 million in 2003,
significantly below 2002 levels of $229 million, which was the
highest level in the past several years.  Edgen competes against
several much larger distributors as well as manufacturers and
fabricators in various product segments.

Acquisitions will also remain a meaningful part of Edgen Corp.'s
growth strategy going forward.  Over the next four years,
management forecasts a significant amount of EBITDA growth to
occur from international and MRO expansion.  Moody's ratings could
be jeopardized by a large debt financed acquisition or integration
issues.

The proposed transaction will also result in significantly higher
interest expense, which is forecast to increase to approximately
$10 million after the transaction versus $3.4 million for full
year 2003.  Asset coverage will also be weak with net tangible
book value of total assets forecasted at about $100 million,
although the market value of various assets could be considerably
less.

In regards to liquidity, Moody's views the new $20 million bank
revolver as modest.  A continuation of rising prices and demand
could require working capital investment in excess of the revolver
commitment.  We are also skeptical about the company's ability to
reduce working capital, in terms of days of sales, as outlined in
its forecast.

Access to the revolver will be limited by a borrowing base
calculation of eligible account receivables and inventory.
However, as of November 30, 2004, the borrowing base of eligible
receivables and inventory was well in excess of the revolver
amount.

The stable outlook reflects Moody's view that Edgen's operating
performance will continue to improve, margins will remain at least
at current levels, liquidity will remain adequate, and any
increase in costs will be passed through to the end user.  Factors
that could negatively impact the ratings and outlook are a steady
decline in operating performance, tightening margins,
deterioration in liquidity, or weakening credit statistics.
Whereas, a sustainable improvement in sales and operating margins
that result in stronger credit metrics, greater liquidity, and
increased market presence would reflect positively on the ratings.

The B3 rating on the senior secured notes reflect its position as
the predominant debt security in the capital structure, resulting
in the risk to a senior secured noteholder being no different than
that of the senior implied rating.  The rating also incorporates
the benefit derived by a first lien security interest in all
domestic tangible and intangible assets of Edgen Corp. with the
exception of inventory and receivables, in which the notes will
have a second lien security interest after the bank facility.  The
notes are also unconditionally guaranteed on a senior secured
basis by all restricted domestic subsidiaries.

Assignment of the SGL-3 speculative liquidity rating reflects
Moody's view that the company possesses adequate liquidity and
will likely rely on external sources of committed financing.
There are no financial covenants under the proposed $20 million
bank agreement and availability is governed by a borrowing base
formula.  Moody's believes cash on the balance sheet will remain
modest over the next twelve months and the company does not
currently own any assets, outside of what is secured by the two
pieces of debt, which can be monetized in the near term to satisfy
liquidity needs.

Edgen Corporation, headquartered in Baton Rouge, Louisiana is a
global distributor of specialty steel pipe, fittings, and flanges
for use in niche markets, primarily in the oil, gas, processing
and power generation industries.


FEDERAL-MOGUL: Court Okays Jefferies' Amended Services as Advisor
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Federal-Mogul
Corporation seeks the United States Bankruptcy Court for the
District of Delaware's authority to restate and replace the terms
of Jefferies & Company, Inc.'s continued retention as financial
advisor to include valuation and syndication advisory services.
The additional services to be performed by Jefferies relate to and
are needed in order to confirm and consummate the Third Amended
Joint Plan of Reorganization, Eric M. Sutty, Esq., at The Bayard
Firm, in Wilmington, Delaware, explains.

                        Additional Services

The Plan provides that the Asbestos Personal Injury Trust is to
subscribe for certain shares of Reorganized Federal-Mogul Class B
Common Stock.  Jefferies will serve as the lead financial advisor
in connection with the completion of a "qualified appraisal"
within the meaning of Treasury Regulations Section 1.468 B-3(b) of
the Class B Shares to be allocated to the Trust under the terms of
the proposed Plan, taking into account the transfer restrictions
placed on the Class B Shares.  The valuation is needed for the
purpose of supporting a tax deduction for the allocation to the
Trust of the Class B Shares.

Jefferies will serve as Syndication Advisor with respect to the
exit financing for the Federal-Mogul Corporation and its debtor-
affiliates' cases.  The exit financing consists of a $500 million
senior secured asset-based revolving credit facility and a $933
million senior secured term facility.

For the Additional Services, Jefferies will be paid, in the
aggregate:

    (a) $350,000 for the Valuation Services

        The $350,000 cash fee will be paid after delivery of the
        "Class B Shares Valuation Report" to the Plan Proponents
        containing the results of the Valuation Services with
        respect to the Class B Shares; and

    (b) $1 million for the Syndication Advisory Services

        A $250,000 fee will be paid to Jefferies as soon as
        commitments for any revolving credit portion of the exit
        financing facility are obtained.  A $750,000 fee will be
        paid to Jefferies when the exit financing facility has
        been funded.

Furthermore, the indemnification and contribution obligations to
Jefferies and other Indemnified Parties will remain the same,
except that the obligations will also extend to liabilities and
expenses incurred, related to or arising out of or in connection
with any of the Additional Services or the Class B Shares
Valuation Report.

Judge Lyons approves Jefferies' continued retention.

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)


FRIEDMAN'S INC: Case Summary & 30 Largest Unsecured Creditors
-------------------------------------------------------------
Lead Debtor: Friedman's Inc.
             171 Crossroads Parkway
             Savannah, GA 31422

Bankruptcy Case No.: 05-40129

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      FI Stores Limited Partnership              05-40130
      Friedman's Florida Partnership             05-40131
      FCJV Holding Corp.                         05-40132
      Friedman's Beneficiary Inc.                05-40133
      Friedman's Holding Corp.                   05-40134
      Friedman's Investments LLC                 05-40135
      Friedman's Management Corp.                05-40136
      Cougar Reinsurance Company Ltd.            05-40137

Type of Business: The Debtor is the parent company of a group of
                  companies that operate fine jewelry stores
                  located in strip centers and regional malls in
                  the southeastern United States.
                  See http://www.friedmans.com/

Chapter 11 Petition Date: January 14, 2005

Court: Southern District of Georgia

Judge: Lamar W. Davis

Debtors' Counsel: John Wm. Butler, Jr., Esq.
                  George N. Panagakis, Esq.
                  Timothy P. Olson, Esq.
                  Alexa N. Paliwal, Esq.
                  Skadden, Arps, Slate, Meagher & Flom LLP
                  333 West Wacker Drive, Suite 2100
                  Chicago, IL 60606
                  Tel: 312-407-0700
                  Fax: 312-407-0411

Total Assets: $395,897,000

Total Debts:  $215,751,000

Debtor's Consolidated List of 30 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
M. Fabrikant & Sons           Trade                  $17,017,395
One Rockefeller Center
28th Floor
New York, NY 10020

Rosy Blue Inc.                Trade                  $10,697,225
529 5th Avenue, 5th Fl.
New York, NY 10017

Design Works                  Trade                   $7,068,908
44-40 11th St.
Long Island City, NY 11101

C. Mahendra Jewels            Trade                   $6,165,597
7500 Bellaire Blvd. Ste. 524
Houston, TX 77036

Media solutions               Trade                   $4,967,781
3715 Northside Parkway
100 Northcreek, Ste. 250
Atlanta, GA 30327

Sumit Diamond Corp.           Trade                   $4,299,419
592 Fifth Avenue, 4th Fl.
New York, NY 10036

Alston & Bird LLP             Professional Services   $2,548,832
One Atlantic Center
1201 West Peachtree St.
Atlanta, GA 30309

Bulova Corp.                  Trade                   $2,130,989
P.O. Box 1213
Dept. 14787
Newark, NJ 07101

Goldstar Jewelry LLC          Trade                   $2,038,820
45 West 4th St.
New York, NY 10036

Samuel Aaron Inc.             Trade                   $2,014,363
31-00 47th Ave.
Long Island City, NY 11101

Prime Art & Jewel             Trade                   $1,900,867
2930 N. Stemmons Fwy.
Dallas, TX 75247

Frederick Goldvan             Trade                   $1,801,584
P.O. Box 2572
Grand Central Station
New York, NY 10183

Combine International         Trade                   $1,682,672
354 Indusco Court
Troy, MI 48083

KIP                           Trade                   $1,273,915
Div. of OTC Int'l Ltd.
P.O. Box 847443
Boston, MA 02284

JB-DM Jewelry                 Trade                   $1,254,118
c/o Wells Fargo Bank
Dept. 9366
Los Angeles, CA 90084

CLAAR                         Trade                   $1,239,469
35 West 45th Street
New York, NY 10038

A&A Jewelers                  Trade                   $1,057,960
P.O. Box 2107
Buffalo, NY 14240

Ultimo, Inc.                  Trade                     $845,101
608 Fifth Ave., Ste. 410
New York, NY 10022

Seiko Time                    Trade                     $840,525
1111 MacArthur Blvd.
Mahwah, NJ 07430

Star Diamond                  Trade                     $786,191
1285 Ave. of the Americas
New York, NY 10019

Sun Diamond USA               Trade                     $757,418
25 W. 45th St., #707
New York, NY 10036

Dana Augustine Inc.           Trade                     $735,000
300 Chastain Blvd., Ste. 315
Kennesaw, GA 30144

KMG Jewelry                   Trade                     $688,875
G23 Gem & Jewelry Complex
III
Seepz, Andheri (East)
Mumbai, India 40096

Citizen Watch Co.             Trade                     $685,208
1000 West 190th St.
Torrance, CA 90502

Tara Jewels Export Ltd.       Trade                     $641,883
G 44 Gems and Jewellry
Seepz, Andheri (East)
Mumbai, India 40096

Gold Lance                    Trade                     $637,562
148 E. Broadway
Owatonna, MN 55060

Imperial World Inc.           Trade                     $603,645
d/b/a/ World Pacific Jewelry
135 S. La Salle St.
Dept. 2214
Chicago, IL 60674

Dinurje                       Trade                     $597,290
GJ-11 SDF VII
Seepz, Andheri (East)
Mumbai, India 40096

Saunay Jewels Pvt. LT         Trade                     $543,129
GJ-11 SDF VII
Seepz, Andheri (East)
Mumbai, India 40096

Coloron                       Trade                     $535,404
c/o Fleet Bank
P.O. Box 70155
Los Angeles, VA 90074


G-FORCE: S&P Puts 'B-' Rating on $5 Million Class N Certificates
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to G-FORCE 2005-RR LLC's $502.9 million CMBS pass-through
certificates series 2005-RR.

The preliminary ratings are based on information as of
Jan. 14, 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 securities and the geographic and property
type diversity of the mortgaged properties securing the underlying
CMBS collateral.  The collateral pool consists of 42 classes of
pass-through certificates from 16 CMBS transactions.

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
                       G-FORCE 2005-RR LLC

            Class         Rating             Amount
            -----         ------             ------
            A-1           AAA            $100,000,000
            A-2           AAA             219,954,000
            X*            AAA             502,875,853**
            B             AA               40,230,000
            C             A                25,144,000
            D             A-                5,029,000
            E             BBB+             16,972,000
            F             BBB               8,172,000
            G             BBB-             10,686,000
            H             BB+              14,457,000
            J             BB                6,286,000
            K             BB-               5,658,000
            L             B+                7,543,000
            M             B                 4,400,000
            N             B-                5,029,000

                         *Interest only
                        **Notional amount


GMAC COMMERCIAL: Fitch Puts 'B' & Junk Ratings on Individual Debts
------------------------------------------------------------------
Fitch Ratings has assigned these ratings to GMAC Commercial
Mortgage Bank -- CMB, a wholly owned subsidiary of GMAC Commercial
Holding Corp. -- CMH, which, in turn, is a wholly owned subsidiary
of General Motors Acceptance Corporation -- GMAC:

     -- Long-term deposits 'BBB+';
     -- Long-term debt 'BBB';
     -- Short-term deposits 'F2';
     -- Short-term 'F2';
     -- Individual 'B/C';
     -- Support '2'.

The Rating Outlook is Negative.

Fitch's individual rating for CMB, which reflects the bank's
stand-alone business and financial profile, recognizes the
experienced management of the bank, majority of outside directors
as required by Utah law, well defined and modest-risk business
plan, and maintenance of conservative capital levels.  The bank
also benefits from the competitive position of CMH, which, through
its subsidiaries, is a large originator and servicer of commercial
mortgages, primarily in the U.S. but growing internationally.
These strengths are tempered by the de novo nature of the
institution, niche focus on commercial mortgages, and lack of a
broader funding profile.  The individual rating will be influenced
by CMB's ability to sustain acceptable levels of profitability and
credit quality while further developing its funding sources.

While CMB's commercial mortgage finance business is unrelated to
its ultimate parent, General Motors -- GM, the long-term and
short-term ratings primarily reflect CMB's ownership by GM.  The
long-term rating for GM is currently 'BBB' with a Negative Rating
Outlook and reflects GM's structural and competitive pressures in
the automotive industry.  The Rating Outlook for CMB is a function
of GM's Rating Outlook.  The '2' support rating reflects Fitch's
view that there would be a high probability of financial support
from its parent organization and indicates that the source of
support is rated at least 'BBB-'.

CMB commenced operations in April 2003 as a Utah-based industrial
bank.  The bank was primarily established to enhance funding
alternatives for CMH, and at Sept. 30, 2004, CMB reported $1.7
billion of assets and $468 million in equity capital.


GOSHAWK RIDGE: Disclosure Statement Hearing Set for Jan. 25
-----------------------------------------------------------
The Honorable Gregg W. Zive of the U.S. Bankruptcy Court for the
District of Nevada will convene a hearing at 2:00 p.m., on
Jan. 25, 2005, to consider the adequacy of the Disclosure
Statement explaining the Chapter 11 Plan of Reorganization filed
by Goshawk Ridge Development, Ltd.

The Debtor filed its Disclosure Statement and Chapter 11 Plan on
Dec. 9, 2005.

As reported in the Troubled Company Reporter on Dec. 28, 2004, the
Plan contemplates the full payment of these two claims, plus
interest, over two years:

   * $3,063,978.20 claim of the Richard H. Welze Trust
   * $274,000 claim of the L and C Lusvardi Trust

The Debtor plans to pay holders of general allowed unsecured
claims in full with 4% interest, over two years.

Equity claims are unimpaired under the Plan.

The Debtor expects to generate $5,000,000 to $6,000,000 of net
revenues over the next two years, which will be sufficient to
cover its obligations to its creditors under the Plan.

The Debtor owns real property located on U.S. Highway 50 in
Douglas County Nevada.  A forced sale liquidation of the Debtor's
assets will fetch $4,000,000, according to the Plan.

Goshawk's total liabilities are $3,427,310.37.

A copy of the Debtor's Chapter 11 Plan of Reorganization and
Disclosure Statement is available for free at:

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

Headquartered in Incline Village, Nevada, Goshawk Ridge
Development, Ltd., filed for Chapter 11 protection on
Sept. 10, 2004 (Bankr. D. Nev. Case No. 04-52701).  Stephen R.
Harris, Esq., at Belding, Harris, & Petroni, Ltd., represents the
Debtor in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it estimated up to $10 million
in assets and debts.


GRAFTECH INTL: Files Required Supplement to Registration Statement
------------------------------------------------------------------
GrafTech International Ltd. (NYSE:GTI) has filed with the
Securities and Exchange Commission a customarily required
prospectus supplement to its previously filed registration
statement covering resales by holders of its outstanding
convertible senior debentures.  Under the registration rights
agreement relating to the debentures sold in a private offering in
January 2004, GTI is required to file a prospectus supplement to
include or update information about those holders within 45
business days after it receives a proper request to do so. GTI may
file prospectus supplements on a monthly or other periodic basis
to accommodate those requests.  GTI's obligation to supplement the
registration statement expires no later than Jan. 22, 2006.

The debentures are convertible into GTI common stock at an initial
conversion price of approximately $16.58 per share if the price of
GTI's common stock exceeds 125% of the conversion price, or
approximately $20.73 per share, for specified periods or the
debentures are called for redemption by GTI and upon other
customary events.

The debentures and shares of common stock issuable upon conversion
thereof have not been and may not be offered or sold in the United
States absent registration under the Securities Act of 1933 or an
applicable exemption from the registration requirements of the
Securities Act of 1933.

This press release is not an offer to sell or the solicitation of
an offer to buy, nor shall there be any sale of, these securities
in any state or jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification
under the securities laws of any such state or jurisdiction.

                        About the Company

GrafTech International Ltd. is one of the world's largest
manufacturers and providers of high quality synthetic and natural
graphite and carbon based products and technical and research and
development services, with customers in about 60 countries engaged
in the manufacture of steel, aluminum, silicon metal, automotive
products and electronics.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 12, 2004,
Standard & Poor's Rating Services affirmed its ratings on GrafTech
International Ltd. and removed them from CreditWatch where they
were placed with negative implications on October 11, 2004.  The
outlook is negative.  The corporate credit rating on GrafTech is
affirmed at 'B+', the senior unsecured debt rating at 'B', and
convertible debt rating at 'B-'.

"Despite the affirmation and improved fundamentals for graphite
electrodes, the negative outlook reflects concerns about the
company's ability to improve in a timely manner a financial
performance that is still weak for the rating," said Standard &
Poor's credit analyst Dominick D'Ascoli.  This is in light of
continual cost pressures, uncertainties about the needle coke
market for 2006 and beyond, and limited free cash flow generation
at GrafTech.


GREENWICH CAPITAL: S&P Puts 'B-' Rating on $13.5-Mil Class O Cert.
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Greenwich Capital Commercial Funding Corporation's
$3.6 billion commercial mortgage pass-through certificates series
2005-GG3.

The preliminary ratings are based on information as of
Jan. 14, 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
fiscal agent, the economics of the underlying loans, and the
geographic and property type diversity of the loans.  Standard &
Poor's analysis determined that, on a weighted average basis, the
pool has a debt service coverage of 1.50x, a beginning LTV of
90.6%, and an ending LTV of 82.5%.

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
        Greenwich Capital Commercial Funding Corporation

            Class         Rating            Amount
            -----         ------            ------
            A-1           AAA            $120,775,000
            A-2           AAA           1,197,229,000
            A-3           AAA             100,464,000
            A-4           AAA             545,363,000
            A-5           AAA             103,193,000
            A-6           AAA             816,897,000
            A-J           AAA             229,813,000
            B             AA              112,653,000
            C             AA-              40,555,000
            D             A                58,580,000
            E             A-               36,049,000
            F             BBB+             45,061,000
            G             BBB              36,049,000
            H             BBB-             40,555,000
            J             BB+               9,013,000
            K             BB               13,518,000
            L             BB-              18,025,000
            M             B+               13,518,000
            N             B                 9,012,000
            O             B-               13,519,000
            P             N.R.             45,061,433
            XP*           AAA                    N.A.
            XC*           AAA           3,604,902,432**

                      *Interest-only class
                        **Notional amount
                        N.R. - Not rated
                      N.A. - Not available


GREGG APPLIANCES: S&P Puts B Rating on $165 Million Senior Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Gregg Appliances Inc.  The outlook is stable.

Also, a 'B' rating was assigned to the company's proposed
$165 million senior unsecured notes due 2013.  These notes will be
issued pursuant to Rule 144A.  Proceeds from the note issuance
will be used to pay for the acquisition of Gregg Appliances Inc.
and cover fees and expenses.

"The ratings reflect Gregg's high debt leverage, relatively small
store base, participation in a highly competitive industry, and
the inherent risks associated with the company's geographic
expansion plans," said Standard & Poor's credit analyst Stella
Kapur.

Pro forma for this transaction, Gregg will have $183 million of
debt, or $268 million of lease-adjusted debt. EBITDA for the
trailing 12 months will be $37 million.  Total lease-adjusted debt
to EBITDA will be high, at 5.9x.

Assuming an annual interest expense of roughly $22 million per
year, EBITDA interest coverage will be in the mid 1x area.  While
these credit measures are consistent with current rating levels,
Standard & Poor's believes that Gregg has no flexibility to do a
sizable debt-financed acquisition for the next two to three years.
In addition, ratings for the senior unsecured notes assume that
drawings under the company's unrated bank facility will not be
material.

Indianapolis, Indiana-based Gregg is a specialty retailer of
appliances, televisions, home theater systems, and audio products.
It operates 58 stores located throughout the Midwestern and
Southeastern U.S. under the HH Gregg brand, averaging 30,000
square feet in size.  A large percentage of the company's revenues
are generated from the sales of video products (49% of
revenues) and appliances (41% of revenues).


GREGG APPLIANCES: Moody's Places B2 Rating on Senior Secured Notes
------------------------------------------------------------------
Moody's Investors Service assigned the ratings to Gregg
Appliances, Inc.:

   -- Senior Implied of B2,

   -- $165 million of senior unsecured guaranteed notes of B2,

   -- Issuer rating of B2,

   -- Speculative Grade Liquidity Rating of SGL-2.

The outlook is stable.  This is the first time that Gregg
Appliances, Inc. has been rated.  The proceeds of the proposed
senior notes will be used to finance a portion of the purchase by
Freeman Spogli of a majority interest in Gregg Appliances through
a leveraged recapitalization.  The total transaction value is
$307.2 million.

Freeman Spogli will invest $111.2 million for approximately 80% of
the common equity and existing management will invest $27.8
million. In addition, existing shareholders will hold $25
million(face amount) of junior subordinated seller notes.

The ratings reflect the company's small size ($753 million revenue
base), regional geographic concentration (primarily Midwestern
U.S.), and its operation in a very competitive space against much
larger and better-capitalized industry players, including the
major big box merchandisers.  The ratings also reflect the
company's high funded leverage.

In addition, the ratings encompass the risks and benefits
associated with its new store growth strategy, which is being
stepped up from historical levels.  While the company's growth
strategy is based on a systematic approach which includes ensuring
the distribution system is in place prior to entering new markets
and a focus on markets that lack an existing strong regional
competitor, the pace of planned new store additions is high
relative to the existing store base and is targeted at new markets
to expand the company's geographic coverage.

The ratings also consider solid free cash flow generation for the
rating level, though a significant portion of free cash flow stems
from tax benefits associated with the 338(h)(10) tax election made
as part of the purchase by Freeman Spogli.

The ratings gain support from the longer-term capital structure
with little required amortization over the next few years.  In
addition, the company's business strategy, which focuses on
superior customer service, product knowledge, and premium product
selection at competitive prices, has effectively positioned it in
the marketplace.

The stable outlook reflects the expectation that the company will
be able to self-fund its new store growth strategy-both capital
expenditures and working capital investment-as well as its working
capital needs for its existing store base.  The ratings are not
likely to be upgraded over the near term, given the company's
growth plans, size and regional concentration, but could gain
support over time as the footprint expands and if financial
metrics are improved and are expected to be sustained at better
levels, such that funded debt to EBITDA falls below 3.0x, free
cash flow to total debt rises above 10%, and total coverage rise
increases to above 2.0x.

The ratings could move downward should the company lose its 338(h)
tax election, causing a drain on free cash flow, or should
adjusted debt to EBITDAR rise above 6.0x or interest coverage
should fall below 1.25x.

The senior notes are rated at the senior implied level given their
preponderance in the capital structure relative to the expected
minimal usage of the company's $75 million asset based facility.
The issuer rating is at the same level as the senior implied since
Gregg Appliances is predominantly an operating company.

For the fiscal year ended March 31, 2005, Moody's expects total
sales to be approximately $800 million.  Proforma for the leverage
recapitalization transaction, Moody's expects FY 2005 adjusted
debt/EBITDAR to be 5.8x, free cash flow to total debt to be 6.7%,
and total coverage to be 1.2x.

Gregg Appliances' SGL-2 liquidity rating reflects Moody's
expectation that the company will maintain good liquidity, and
that internally generated cash flow and cash on hand will be
sufficient to fund its working capital, capital expenditure and
debt amortization requirements for the next 12 months.  The
Company's $75 million revolving credit facility is expected to
have only minimal usage, providing it with a good external source
of liquidity.  Availability under the credit agreement is subject
to one financial covenant, fixed charge coverage, and it is to be
measured only if excess availability falls below $8.5 million at
any time.

Gregg Appliances is not expected to be in a position to trigger
that covenant and is expected to have ample cushion over this
covenant, if triggered.  The Company has limited alternative
sources of liquidity since its assets are fully encumbered and the
company will have difficulty accessing the capital markets
following the acquisition of a majority interest by Freeman Spogli
& Co.

Gregg Appliances, Inc., headquartered in Indianapolis, Indiana, is
a specialty retailer of consumer electronics, home appliances and
related services operating under the name HH Gregg.  The Company
operates 58 stores in 6 midwestern and southeastern states with
revenues of approximately $753 million for the fiscal year ended
March 31, 2004.


HEADLINE MEDIA: Nov. 30 Balance Sheet Upside-Down by $7.6 Million
-----------------------------------------------------------------
Headline Media Group, Inc., is a media company focused on the
specialty television sector through its main asset, The Score
Television Network.  The Score is a national specialty television
service providing sports, news, information, highlights and live
event programming, available across Canada in over 5.5 million
homes.

The Company focuses its analysis on "Net income (loss) before
interest, income taxes, depreciation and amortization" and Net
income (loss).  Net income (loss) before interest, income taxes,
depreciation and amortization and Net income (loss) are reconciled
in the table below.  Net income (loss) before interest, income
taxes, depreciation and amortization is calculated as earnings
(loss) from continuing operations before interest, income taxes,
depreciation and amortization.

Net income (loss) before interest, income taxes, depreciation and
amortization is not a measure of performance under Canadian GAAP.
Net income (loss) before interest, income taxes, depreciation and
amortization should not be considered in isolation or as a
substitute for Net income (loss) prepared in accordance with
Canadian GAAP or as a measure of operating performance or
profitability.  Net income (loss) before interest, income taxes,
depreciation and amortization does not have a standardized meaning
prescribed by GAAP and is not necessarily comparable to similar
measures presented by other companies.

The Company uses Net income (loss) before interest, income taxes,
depreciation and amortization to remove acquisition and investment
related charges (such as depreciation and amortization),
discontinued operations, and income taxes which in the Company's
view do not adequately reflect its core operating results and is a
standard measure that is commonly reported and widely used in the
industry to assist understanding and comparing operating results.

                       Consolidated Results

Revenue for the first quarter increased by $0.9 million to
$6.1 million compared to 5.2 million in the prior year.  This
increase was due to an increase in subscriber fee revenue
amounting to $0.8 million and an increase in advertising revenue
of $0.1 million.

Operating expenses excluding rights fees increased by $0.5 million
during the quarter to $4.8 million compared to $4.3 million in the
prior year.  The increase was primarily due to increased
programming and production expenses at The Score due to the launch
of several new shows, as well as some increased administrative
expenses associated with expanded production facilities.

Program rights expenses were $0.3 million during the quarter,
compared to $1.3 million in the prior year.  The reduction in
program rights at The Score reflects lower program rights fees on
World Wrestling Entertainment properties as well as lower program
rights costs for other programs.

Net income from continuing operations before interest, income
taxes, depreciation and amortization for the Company for the three
months ended November 30, 2004, was $1.0 million, an increase of
$1.4 million from a loss of $0.4 million in the same period last
year.  This arose due to its increase in revenues and decrease in
program rights, offset in part by an increase in operating
expenses.

Interest expense for the first quarter was approximately $0.2
million compared to approximately $0.3 million in the prior year.
The decrease of approximately $0.1 million reflects lower bank
borrowings as well as lower borrowings on a credit facility
provided by a related party.  The reductions in both credit
facilities resulted from improved cash flows from operations
during fiscal 2004 as well as the proceeds received on the sale of
a discontinued operation.

Depreciation and amortization expense of $0.3 million in the first
quarter was comparable to the prior year.  For the three months
ended November 30, 2004, and 2003, fixed asset additions amounted
to $0.5 million and $0.7 million respectively.

Net income from discontinued operations for the Company for the
three months ended November 30, 2004, was nil, an increase of
$77,000 from a loss of $77,000 in the same period last year.  The
latter amount reflects the financial results of PrideVision TV and
St. Clair Group Investments Inc.  On November 28, 2003, the Board
of Directors of PrideVision Inc. approved an agreement to sell
the Canadian operations of PrideVision TV, a Category 1 digital
specialty television service, focused on the gay, lesbian,
bisexual and transgender communities.  On July 29, 2004,
PrideVision Inc. completed the previously approved transaction for
total cash proceeds of $1.350 million and the assumption of $0.9
million in liabilities.  The transaction resulted in a gain of
$1.6M.  In addition, during fiscal 2004, the operations of St.
Clair were substantially restructured, and ultimately discontinued
in October 2004 as a result of certain sports marketing contracts
which were not renewed.

Net income for the three months ended November 30, 2004 was $0.5
million or $0.01 per share based on a weighted average 82.8
million Class A Subordinate Voting Shares and Special Voting
Shares outstanding compared to a loss of $1.1 million in the prior
year or ($0.01) per share based on a weighted average 82.6 million
Class A Subordinate Voting Shares and Special Voting Shares
outstanding.

                 Liquidity and Capital Resources

Cash flows used in continuing operations for the three months
ended November 30, 2004, were $0.7 million compared cash flows
provided by continuing operations of $0.2 million in the prior
year reflecting significantly improved income from continuing
operations in the current year offset by working capital
movements.  Cash flows provided by discontinued operations were
$0.3 million compared to cash flows used by discontinued
operations of $0.2 million in the prior year.

For fiscal 2005, the Company anticipates that cash flows provided
by operations will increase compared to fiscal 2004 based on
anticipated increases in both advertising and subscriber revenues
with more moderate increases in operating expenses.  The Company
has sufficient working capital lines of credit to support its
operations and anticipates that these lines of credit will be
successfully refinanced on the maturity dates.

Cash flow provided by financing activities for the three months
ended November 30, 2004, was $0.5 million compared to nil in the
prior year as a result of a drawdown by the Company on its line of
credit provided by a related party.  At November 30, 2004, total
short-term loans were $12.4 million compared to $14.3 million as
at November 30, 2003.

As discussed below, the Company has a bank credit facility and a
secured standby credit facility currently authorized in the amount
of $16.3 million.   Both facilities, which are classified as
current liabilities, mature on August 31, 2005.  The Company
anticipates that it will be able to refinance both of these
facilities on or before their respective maturity dates.

Cash flows used in investment activities for the three months
ended November 30, 2004, was $0.5 million compared to cash flow
used in investment activities of $0.7 million in the prior year.

These amounts relate to capital expenditures to expand and improve
programming and production facilities at The Score Television
Network.

For the entire fiscal 2005 year, the Company anticipates that
expenditures on new and replacement fixed assets will be
approximately $1.8 million, which can be financed by cash flows
from operations.

Other than the credit facilities described below, the Company has
no other financial instruments and thus believes that there are no
price, credit or liquidity risks that it could be subject to from
such instruments.

The following is a summary of the significant financing activities
undertaken by the Company during the years ended August 31, 2004,
and 2003 to secure financing for its ongoing business operations:

  * The Score

    In April 2004, the Company's subsidiary, The Score, amended
    its bank credit facility, which was initially established
    December 2001.  The amended bank credit facility allows The
    Score to borrow up to $15.0 million reducing to $14.5 million
    on August 31, 2004, and $14.0 million on February 28, 2005, by
    way of prime rate loans, bankers' acceptances or letters of
    guarantee.  The bank credit facility matures August 31, 2005.
    Prime rate loans bear interest at the prime rate plus 3.25%.
    Bankers' acceptances bear interest at bankers' acceptances
    rates plus 4.25%.  Loans under the bank credit facility are
    secured by a pledge of substantially all of the assets of The
    Score, including the pledge of The Score shares and the
    subordination and pledge of shareholder loans and inter-
    company debt from the Company to The Score.  The loans are
    secured and are pledged and subordinated to the credit
    facility.  The provisions of the amended bank credit facility
    impose restrictions on The Score, the most significant of
    which are debt incurrence and debt maintenance costs,
    restrictions on additional investments, sales of assets,
    payment of management fees or other distributions to
    shareholders, restrictions on entering into new or renewed
    programming rights agreements, and the maintenance of certain
    financial covenants.  Financial covenants include meeting
    minimum earnings before interest, taxes, depreciation and
    amortization (EBITDA), maximum capital expenditure amounts and
    minimum aggregate free cash flow.  In addition, the agreement
    has a number of events of default, including solvency tests
    for the Company and The Score.  The Score maintained
    compliance with all of its financial covenants and other
    restrictions during fiscal 2004 and the first quarter of
    fiscal 2005.  As at November 30, 2004, $11.9 million of the
    bank credit facility had been drawn.  The Score is prohibited
    under the bank credit facility from advancing funds to the
    Company other than for services provided in the ordinary
    Course of business.  The Score and the Company have sufficient
    financial resources to finance their respective operations for
    fiscal 2005.  With the financing arrangements currently in
    place and the refinancing of The Score's bank credit
    facility that matures on August 31, 2005, to be available to
    finance the consolidated operations, the Company believes that
    there are sufficient resources to fund operations.
    In August 2002, The Score entered into a credit facility
    agreement for a $2.0 million operating loan with Levfam
    Finance Inc., a company related by virtue of common control.
    In August 2003, the Company advanced approximately $2.4
    million of the proceeds of a $4.9 million private placement of
    Class A Subordinate Voting Shares to The Score to fund the
    repayment of the operating loan plus accrued interest.  The
    credit facility was repaid in full in August 2003.

  * Headline Media Group Inc.

    In April 2002, the Company entered into a secured standby
    credit facility of up to $2.3 million with Levfam Finance
    Inc., a company related by virtue of common control.  The
    credit facility was subsequently amended in November 2002
    and August 2003 and now matures on August 31, 2005.  The
    credit facility bears interest at 12% per annum.  The standby
    credit facility is secured by a first charge over all of the
    Company's assets, with the exception of its shares in The
    Score and St. Clair Group Investments Inc.  As at August 31,
    2004, $0.2 million of accrued interest on this facility was
    outstanding.  In January 2003, the Company secured $0.5
    million from a non-brokered private placement of 1,428,571
    Class A Subordinate Voting shares with Levfam Holdings Inc.,
    the Company's controlling shareholder, at a price of $0.35 per
    share.  In August 2003, the Company issued 16,333,333 Class A
    Subordinate Voting Shares by way of a non-brokered private
    placement at a price of $.30 per share, for gross proceeds of
    $4.9 million.  The Company's successful execution of its
    business plan is dependant upon a number of factors that
    involve risks and uncertainty.  In particular, revenues in the
    specialty television industry, including subscription and
    advertising revenues are dependant upon audience acceptance,
    which cannot be accurately predicted.

  * Related Party Transactions

    The Company and Levfam Finance Inc. are related by virtue of
    Common control.  Levfam Finance Inc. has provided credit
    facilities to both The Score and Headline Media Group, its
    parent company.  Interest on the Levfam Finance Inc. credit
    facility to Headline Media Group amounted to approximately
    $10,000 during the three months ended November 30, 2004,
    compared to approximately $ 37,000 in the corresponding
    quarter of the prior year.  During the three months ended
    November 30, 2004, the Company retained legal services from a
    firm, one of whose partners is a director of the Company.
    These services were provided in the ordinary course of
    business and the fees for services rendered amounted to
    $21,640 in the first quarter of fiscal 2005.  A second
    director provided consulting services for the Company
    during the three months ended November 30, 2004, and received
    approximately $12,000 for such services.  All related party
    transactions have been recorded at their fair values.

                     Contractual Obligations

The Company has no debt guarantees, capital leases or long-
term obligations other than loans which are disclosed on the
Consolidated Balance Sheets as at November 30, 2004, and
August 31, 2004.

In 2003, the CICA amended Handbook Section 3870, "Stock-based
Compensation and Other Stock-based Payments", to require the
recording of compensation expense on the granting of all
stock-based compensation awards, including stock options to
employees, calculated using the fair value method.  The
Company adopted this standard on September 1, 2004.

                  About Headline Media Group Inc.

Headline Media Group Inc. (TSX: HMG) is a media company focused on
the specialty television sector through its main asset, The Score
Television Network.  The Score is a national specialty television
service providing sports, news, information, highlights and live
event programming, available across Canada in over 5.5 million
homes.

At Nov. 30, 2004, Headline Media's balance sheet showed a
$7,559,000 stockholders' deficit, compared to a $8,094,000 deficit
at Aug. 31, 2004.


HI-RISE RECYCLING: Judge Kendig Approves Disclosure Statement
-------------------------------------------------------------
The Honorable Russ Kendig of the U.S. Bankruptcy Court for the
Northern District of Ohio approved the Disclosure Statement
explaining the Amended Liquidating Plan of Reorganization filed by
Hi-Rise Recycling Companies, Inc., on January 12, 2005.

Judge Kendig also approved the Solicitation and Voting Procedures
for the acceptance or rejection of the proposed Amended Plan.

The Debtor filed its Disclosure Statement and Amended Plan on
January 5, 2005.

The Plan groups claims and interests into four classes and
provides for these recoveries:

   a) Class 1 impaired claims consisting of the General Electric
      Capital Corp. Secured Bank Loan Claims will be paid in full
      on or after the Effective Date after the payment of all
      Administrative Claims, Priority Tax Claims and distributions
      to the General Unsecured Creditor Class;

   b) Class 2 impaired claims consisting of General Unsecured
      Claims will receive a Pro Rata share of the value of the
      title vehicles sold in the Wastequip asset sale and a Pro
      Rate portion of pf all recoveries from all Avoidance
      Actions;

   c) Class 3impaired claims consisting of Equity Interests will
      not receive and retain any property or distributions under
      the Plan; and

   d) Class 4 unimpaired claims consisting of Priority Claims will
      be paid in full on the Effective Date.

The Plan also identifies three unclassified claims and provides
for these recoveries:

   a) Allowed Administrative Claims will be paid in full on the
      Effective Date;

   b) Allowed Priority Tax Claims will be paid in full on the
      Effective Date; and

   c) Professional Fees will be paid in amounts that are allowed
      upon the Court's order.

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

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

All ballots for acceptance or rejection of the Plan must be
completed and delivered to Hahn, Loeser Parks LLP, the Debtor's
claims and noticing agent on or before February 18, 2005.

Confirmation objections to the Plan, if any, must be filed and
served by February 25, 2005.

Headquartered in Wooster, Ohio, Hi-Rise Recycling Companies, Inc.,
manufactures and distributes industrial recycling and waste
handling equipment in North America.  The company filed for
chapter 11 protection on August 16, 2004 (Bankr. N.D. Oh. Case No.
04-64352).  Lawrence E. Oscar, Esq., at Hahn Loeser & Parks LLP,
represent the Debtor in its restructuring.  When the Debtor filed
for protection from its creditors, it listed estimated assets of
$1 million to $10 million and debts of $10 million to $50 million.


HOLLINGER INC: To Escrow Some Funds from Telegraph Sale Proceeds
----------------------------------------------------------------
Hollinger, Inc.'s (TSX:HLG.C)(TSX:HLG.PR.B) Board of Directors has
determined that it is in the best interest of Hollinger's
shareholders that certain of the funds Hollinger will receive from
Hollinger International, Inc., relating to the sale of The
Telegraph Group be placed in escrow.

As part of its settlement discussions with staff of the U.S.
Securities and Exchange Commission relating to the action
commenced by the SEC against Hollinger and its former directors
and senior executives, Conrad M. Black and F. David Radler in the
U.S. District Court, Northern District of Illinois, Hollinger has
voluntarily agreed that it will enter into an arrangement whereby
it will deposit:

        (i) the net amount to be received by it directly and
            indirectly from the special dividend declared on
            Dec. 16, 2004 by the Board of Directors of HII on its
            Class A Common Stock and its Class B Common Stock that
            is payable on Jan. 18, 2005, and

       (ii) subject to any overriding rights of the holders of
            Hollinger's outstanding Senior Secured Notes, the net
            amount of any subsequent distribution made by HII of
            The Telegraph Group sale proceeds, if any, into an
            escrow account with a licensed trust company.

The escrow will terminate upon the conclusion of the SEC Action as
to all parties.

The escrow arrangements will provide that Hollinger will have
access to the escrowed funds for ordinary business and certain
other purposes, including:

   -- Payment of principal, interest, premium and fees, if any, on
      or relating to Hollinger's indebtedness for borrowed money.

   -- Payment of dividends on the preferred shares of Hollinger.

   -- Buy-back of non-Ravelston shares of Hollinger.

   -- Acquisition of assets other than from Ravelston and certain
      of its affiliates.

The escrow is subject to Hollinger and the SEC agreeing to a
mutually acceptable termination date for the escrow should the
parties be unable to reach an overall settlement of the SEC Action
as against Hollinger in the near future.  If termination of the
arrangement occurs, Hollinger has agreed to provide staff of the
SEC a reasonable opportunity to assert any rights it may have with
respect to the escrowed funds.

Hollinger's principal asset is its interest in Hollinger
International Inc. which is a newspaper publisher the assets of
which include the Chicago Sun-Times, a large number of community
newspapers in the Chicago area, a portfolio of news media
investments and a variety of other assets.

                          *     *     *

As reported in the Troubled Company Reporter on August 31, 2004,
as a result of the delay in the filing of Hollinger's 2003 Form
20-F (which would include its 2003 audited annual financial
statements) with the United States Securities and Exchange
Commission by June 30, 2004, Hollinger is not in compliance with
its obligation to deliver to relevant parties its filings under
the indenture governing its senior secured notes due 2011.
Approximately $78 million principal amount of Notes is outstanding
under the Indenture. On August 19, 2004, Hollinger received a
Notice of Event of Default from the trustee under the Indenture
notifying Hollinger that an event of default has occurred under
the Indenture. As a result, pursuant to the terms of the
Indenture, the trustee under the Indenture or the holders of at
least 25 percent of the outstanding principal amount of the Notes
will have the right to accelerate the maturity of the Notes.

Approximately $5 million in interest on the Notes was due on
September 1, 2004.  Hollinger has deposited the full amount of the
interest payment with the trustee under the Indenture and
noteholders will receive their interest payment in a timely
manner.

There was in excess of $267.4 million aggregate collateral
securing the $78 million principal amount of the Notes
outstanding.

Hollinger also received notice from the staff of the Midwest
Regional Office of the U.S. Securities and Exchange Commission
that they intend to recommend to the Commission that it authorize
civil injunctive proceedings against Hollinger for certain alleged
violations of the U.S. Securities Exchange Act of 1934 and the
Rules thereunder. The notice includes an offer to Hollinger to
make a "Wells Submission", which Hollinger will be making, setting
forth the reasons why it believes the injunctive action should not
be brought. A similar notice has been sent to some of Hollinger's
directors and officers.


ICON HEALTH: S&P Lowers Corporate Credit Rating to 'B' from 'B+'
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on ICON
Health & Fitness Inc., including its corporate credit rating to
'B' from 'B+', based on continuing sales and margin pressures.
The ratings remain on CreditWatch with negative implications.

At Nov. 27, 2004, the Logan, Utah-based manufacturer and marketer
of home health and fitness equipment had total debt outstanding of
$401.1 million.

The sales of ICON's cardiovascular and strength-training equipment
remain weak.  For the quarter ended Nov. 27, 2004, cardiovascular
equipment sales decreased 8.1% year-over-year, and strength
training equipment sales fell 22.7% (off a significantly smaller
base than the cardiovascular business) year-over-year.

In addition to manufacturing inefficiencies from lower sales
volume, margin deterioration was exacerbated by higher commodity
prices (steel, plastics, wood, and paper products) and increased
transportation costs.  While sales in the month of December 2004
were up by mid-single digits year-over-year and the company has
plans to raise prices to its customers, these steps are unlikely
to materially improve margins.

"In resolving the CreditWatch, we will meet with ICON's management
to assess the company's intermediate-term outlook, including
direction of consumer tastes in this volatile business, prospects
for improving liquidity, and other operating issues," said
Standard & Poor's credit analyst Andy Liou.


INTELSAT LTD: Zeus Evaluates Acquisition Following IS-804 Failure
-----------------------------------------------------------------
Intelsat, Ltd., said its IS-804 satellite experienced a sudden and
unexpected electrical power system anomaly on Jan. 14, 2005, at
approximately 5:32 p.m. EST that caused the total loss of the
spacecraft.  In accordance with existing satellite anomaly
contingency plans, Intelsat is in the process of making
alternative capacity available to its IS-804 customers.  The
satellite, launched in 1997, furnished telecommunications and
media delivery services to customers in the South Pacific.
Intelsat and Lockheed Martin Corporation, the manufacturer of the
satellite, are working together to identify the cause of the
problem.  Intelsat currently believes that there is no connection
between this event and the recent IA-7 satellite anomaly as the
two satellites were manufactured by two different companies and
their designs are different.

A number of Intelsat-operated satellites in the region are being
utilized to restore service to affected customers, and many end
users of IS-804 capacity are already operating normally using
replacement capacity.  Intelsat has also begun working with other
fleet operators where necessary to ensure the quickest possible
restoration of service for customers.

"The loss of a satellite is an extremely rare event for us, and
our first priority must be restoration of service to our
customers," said Conny Kullman, CEO of Intelsat, Ltd.  "Intelsat
remains firmly committed to the region that was covered by IS-804,
and all necessary effort and assets will be allocated to ensure
Intelsat satellite coverage throughout the Asia-Pacific region."

Intelsat expects to record a non-cash impairment charge of
approximately $73 million to write off the value of the IS-804
satellite.  The IS-804 was not insured, in accordance with
Intelsat's practice of insuring only those satellites with a net
book value greater than $150 million.

Under the terms of the Transaction Agreement and Plan of
Amalgamation for the sale of Intelsat dated Aug. 16, 2004, among
Intelsat, Ltd., Intelsat (Bermuda), Ltd., Zeus Holdings Limited
(Zeus Holdings), Zeus Merger One Limited and Zeus Merger Two
Limited, the total loss of the IS-804 satellite gives Zeus
Holdings the right to not consummate the acquisition of Intelsat.
Zeus Holdings has advised Intelsat that it is evaluating the
impact of the IS-804 failure.

In Late December 2004, Intelsat received the necessary approval
from the U.S. Federal Communications Commission to proceed with
the proposed purchase of Intelsat, Ltd., by Zeus Holdings Ltd.

Shareholder approval of the proposed acquisition was received in
early 2004.

               Zeus Appoints New CEO for Intelsat

As previously disclosed, Zeus Holdings Limited said Dave McGlade
-- the CEO of cellular operator O2 UK, a subsidiary of mmO2 plc --
has agreed to become CEO of Intelsat, Ltd., following the closing
of the proposed Zeus Holdings/Intelsat transaction, which is
expected to occur in the first quarter of this year.  After the
transaction closes, Mr. McGlade will join Intelsat upon
termination of his current commitments at mmO2 plc on 31st March
2005, at which point, Conny Kullman, Intelsat's current CEO, will
become Chairman of the board of directors of Intelsat, Ltd.

Mr. McGlade has extensive senior executive experience in the
telecommunications industry, and has for the last four years led
the turnaround of O2 UK, mmO2 plc's UK cellular operation.  During
these four years, and in a highly competitive environment, Mr.
McGlade has grown O2 UK's customer base to over 14 million with
service revenues and operating profits of 1.8 billion pounds and
341 million pounds respectively in the six months to 30 September
2004.  This represents year-on-year service revenue and operating
profit growth of 20 per cent and 40 per cent respectively and as a
result of this performance, since the beginning of this financial
year, mmO2 has increased its O2 UK full year service revenue
growth guidance to the financial markets from 5 to 8 per cent to
12 to 15 percent.  To complement these organic activities, Mr.
McGlade led the creation of a joint venture with Tesco, the UK's
largest retail group, positioning O2 uniquely to address
underserved market segments.

Prior to joining mmO2, Mr. McGlade worked in the US cellular
industry as West Region President for Sprint PCS, and in the cable
industry where he was President of Cable AdNet, the then largest
local and regional cable advertising network and subsequently as
Vice President of TCI Telephony Services.

Commenting on the appointment, Conny Kullman said, "Dave is an
accomplished telecom executive and has considerable experience in
a number of adjacent markets.  He has demonstrated on a number of
occasions his ability to transition seamlessly across different
parts of the telecoms landscape.  Dave has a strong and very
complementary skill set and, assuming the transaction closes as
expected, I look forward to the opportunity to work with him in
the future."

A spokesperson for Zeus Holdings said, "We are delighted that Dave
has agreed to accept this position following completion of our
acquisition.  Dave has an exceptional track record of delivering
strong operational performance in highly competitive markets and
has been instrumental to the success of businesses operating
across the telecommunications and media industries."

The spokesperson added, "Under Conny's leadership, the Intelsat
team has made tremendous progress since Intelsat's privatization.
We are very pleased that Conny will continue as Chairman of the
board following the transaction, and believe that Conny's deep
knowledge of the business and Dave's enormous drive, combined,
provide a great springboard as Intelsat faces the exciting
prospects ahead."

                   About Zeus Holdings Limited

Zeus Holdings is a company formed by a consortium of funds advised
by Apax Partners, Apollo Management, Madison Dearborn Partners and
Permira to consummate the acquisition of Intelsat.

                          About Intelsat

As a global communications leader with 40 years of experience,
Intelsat helps service providers, broadcasters, corporations and
governments deliver information and entertainment anywhere in the
world, instantly, securely and reliably.  Intelsat's global reach
and expanding solutions portfolio enable customers to enhance
their communications networks, venture into new markets and grow
their businesses with confidence.  For further information,
contact media.relations@intelsat.com or at +1 202-944-7500.


INTELSAT LTD: Moody's Lowers Sr. Implied Ratings to B1 From Ba3
---------------------------------------------------------------
Moody's Investors Service downgraded Intelsat, Ltd.'s existing
ratings and assigned new ratings to its intermediate holding
company, Intelsat (Bermuda) Ltd. as a result of the expected
closing and funding of Zeus Holdings Ltd.'s LBO of Intelsat.  This
rating action concludes Moody's review for downgrade initiated on
August 17, 2004.

The outlook on all Intelsat ratings is stable.

The rating actions taken:

At Intelsat Ltd.,

   The ratings downgraded:

   -- Senior Implied to B1 from Ba3

   -- Unsecured Issuer Rating to B3 from Ba3

   -- $400 Million 5.25% Global notes due in 2008 to B3 from Ba3

   -- $600 Million 7.625% Sr. Notes due in 2012 to B3 from Ba3

   -- $700 Million 6.5% Global Notes due in 2013 to B3 from Ba3

   The ratings confirmed:

   -- $200 Million 8.125% Eurobonds due in 2005 at Ba3 (Upon the
      close of the transaction, these notes share ratable in the
      same security as the senior secured bank credit facility at
      Intelsat (Bermuda) and benefit from the same senior secured
      operating company guarantees).

   -- The speculative grade liquidity rating is at SGL-2

   The ratings withdrawn:

   -- Short-term rating will be withdrawn

At Intelsat Bermuda,

   The ratings assigned:

   -- $300 Million Sr. Secured Revolver due in 2011 - Ba3

   -- $350 Million Sr. Secured T/L B due in 2011 - Ba3

   -- Sr. Floating Rate Notes due in 2012 - B1

   -- Sr. Fixed Rate Notes due in 2013 - B1

   -- Sr. Fixed Rate Notes due in 2015- B1

The senior implied rating downgrade broadly reflects the
significant leveraging of Intelsat Ltd.'s capital structure as a
result of the Zeus LBO.  The rating also reflects Intelsat's
operational challenges, which are mostly a function of a shifting
business focus to higher growth corporate and government as well
as video fixed satellite services from declining telecom FSS
business.

The rating is supported by Intelsat Ltd.'s significant revenue
backlog, which totals more than three years of the company's
current revenue levels (with approximately 99% non-cancelable
contracts or contracts cancelable with substantial penalties), and
leading market share in the carrier, corporate, Internet and
government FSS.  The ratings also benefit from Intelsat's high
EBITDA margins and predictable capital spending needs, and strong
geographic coverage.

The downgrade of the existing Intelsat Ltd. senior unsecured notes
reflects not only the increased leverage of the company as a
whole, but also significant structural subordination resulting
from the new financing.

The stable rating outlook is based on Moody's view that Intelsat
Ltd.'s revenue decline will moderate during the outlook period and
that EBITDA margins, capital spending, and free cash flow
generation will remain steady.  The stable outlook also
incorporates Moody's expectation that Intelsat will begin
deleveraging from free cash flow generation in 2005 and 2006.

Since Moody's expects that Intelsat Ltd.'s capital spending will
be between $85 million and $100 million per year in the near to
intermediate term, and EBITDA margins will remain relatively flat,
accelerated government or video segment revenue growth, coupled
with flattening carrier revenue, would positively impact ratings.
Overall, total revenue growth in excess of 5% per annum, coupled
with declining net debt to EBITDA ("leverage") of less than 5.0x,
or EBITDA less CAPEX to interest ("fixed charge coverage') of
greater than 2.5x, would likely result in a positive rating
change.

Likewise, prolonged revenue declines, a sharp decline in revenue
backlog of more than 10%, or a prolonged reduction in EBITDA
margins of greater than 300 basis points would likely result in a
negative rating action. Any combination of events wherein leverage
exceeds 6.25x, fixed charge coverage falls below 1.5 times, or the
company introduces an aggressive dividend would also likely result
in a negative rating action.

In August 2004, Intelsat Ltd. agreed to be acquired by Zeus, a
company owned by a consortium of funds advised by Apax Partners,
Apollo Management, Madison Dearborn Partners, and Permira
Advisors, for approximately $3 billion, or $18.75 per share.
Initially, the obligor of the senior secured bank facilities and
the $2.5 billion senior unsecured notes will be an indirect
subsidiary of Zeus who will amalgamate with Intelsat Bermuda
concurrently with the funding of the transaction.  At that time,
Intelsat Bermuda will become the obligor for the bank facilities
and the notes.

Moody's notches the rating of the senior secured bank facility one
notch higher than Intelsat Ltd.'s B1 senior implied rating since
it ranks ahead of close to 90% of the company's total debt,
therefore, enjoying superior asset coverage.  The bank facilities
are secured by virtually all of the assets of Intelsat Bermuda and
its subsidiaries and are guaranteed by these same subsidiaries as
well as Intelsat.  Intelsat Bermuda's senior unsecured notes are
similarly guaranteed but on a senior unsecured basis and comprise
approximately 55% of the company's total outstanding debt. The
notes are not notched off the senior implied rating.

Intelsat Ltd.'s existing senior unsecured notes, which total $1.7
billion, are rated B3, two notches below the senior implied rating
to reflect their structural subordination to Intelsat Bermuda's
debt and other general unsecured liabilities.  Until it matures in
February 2005, Moody's will rate Intelsat's $200 million 8.125%
Eurobonds at Ba3 since this issue will benefit from the same
security package and guarantees as Intelsat Bermuda's bank
facilities.  The Eurobond will be repaid with proceeds from a term
loan drawdown.

Moody's believes that moderate growth in government, corporate
network and video service revenues will generally offset declining
carrier revenues, which currently comprise approximately 28% of
Intelsat's total pro forma revenues.  Moody's believes that
growing video revenues will be most challenging as Intelsat's
North American market position in this sector is still developing
with the Loral satellites ("Intelsat Americas") acquired in March
of 2004.  As a result, Moody's believes Intelsat's revenue growth
during the outlook period will be relatively flat and that EBITDA
margins will remain steady in the mid 60% range.

With the exception of the IA-8 satellite expected to launch in
June of 2005, Intelsat does not intend to launch any satellites
until 2010, therefore, Moody's believes Intelsat will consistently
generate solid free cash flow.  While Intelsat has responded well
to minimize the financial loss caused by the failure of its IA-7
satellite, satellite failure or malfunction is an inherent
business risk for a satellite company.

This risk is factored into Intelsat Ltd.'s rating and is not a
significant driver due to the company's solid operating track
record and operational flexibility provided by excess capacity in
its current fleet and overlapping coverage areas.  Satellite
failures, beyond Moody's expectations, could have a negative
impact on the company's ratings.

Intelsat's SGL-2 speculative grade liquidity rating reflects the
company's good liquidity position and Moody's belief that Intelsat
can comfortably meet its near-term operating, investment and
financial obligations through both internal sources of funds and
external committed financing.  Moody's, however, expects
Intelsat's liquidity to weaken, on a proforma basis.  Moody's
expects Intelsat's cash balances to decline from approximately
$400 million at 9/30/04, to less than $100 million on a proforma
basis, adjusting for the $200 million October 2004 repayment of
the 8.374% notes, the $92 million Comsat General purchase, and $22
million in cash required to fund the Zeus transaction.

The commitment availability under its revolving credit facility
will drop by $100 million to $300 million, and free cash flow
generating capacity is likely to decline almost $170 million a
year due to higher interest expense.  Despite these
deteriorations, the company's liquidity remains sufficient, given
Intelsat limited near term financial obligations, beyond an
estimated $106 million in contractual satellite commitments and
deferred satellite performance incentives.  Moody's believes,
therefore, that Intelsat Ltd.'s liquidity is still "Good" though
weaker post Zeus LBO.


INTERACTIVE BRAND: Receives Delisting Notice from Amex
------------------------------------------------------
Interactive Brand Development, Inc. (AMEX:IBD) ((f/k/a Care
Concepts I, Inc.) received written notice from the Staff of the
American Stock Exchange that the Amex intends to proceed with the
filing of an application with the Securities and Exchange
Commission under Rule 12d2-2 of the Securities Exchange Act of
1934, as amended, and pursuant to Section 1009(a) of the Amex
Company Guide, to delist the Company's common stock from the Amex.

The Staff's decision to file an application to delist the
Company's common stock is based upon the Staff's position that the
Company failed to satisfy certain specified listing standards.
The Staff's written notice informed the Company that trading of
the Company's common stock will not be suspended immediately;
however, delisting procedures will be commenced and such
suspension will result unless the Company successfully appeals the
Staff's determination.  In accordance with Amex Company Guide
procedures, the Company intends to file an appeal within 7 days of
the above notice appealing the Staff's determination and
requesting a hearing before the Amex Listing Qualifications Panel,
in accordance with the Amex Company Guide.

On January 13, 2005, the Company and its counsel met with the
Staff to discuss the delisting notice.  During the meeting, the
Company discussed certain violations of the Amex listing standards
set forth in their notice, but communicated to the Staff why it
disagreed with the Staff's interpretation and understanding of
certain transactions and attempted to clarify certain issues.  The
Company, through its President, advised the Staff that, to the
extent possible, it would attempt to address, clarify and correct
the matters and actions that give rise to the delisting notice.
The Company has yet to determine whether any or all corrective
measures would have a material adverse effect on the Company's
business.  The Company recognizes that the Amex Staff has provided
no assurances and made no representations concerning what effect,
if any, such corrective measures may have on the potential outcome
of the appeal.  Additionally, even if the Company corrects all
matters and actions, there is no assurance that the appeal will be
successful.  If the Company's common stock is delisted from Amex,
the Company will review its options for listing on another
exchange or on an automated inter-dealer quotation system (e.g.,
Nasdaq), but no assurance can be made that the Company would be
able to qualify for relisting its common stock on another exchange
or on an inter-dealer quotation system.

The Amex's January 10, 2005 written notice to the Company provides
in substance that the Company is not in compliance with Amex
listing standards, as follows:

   1. In the Staff's opinion, the Company's acquisition of a 39.9%
      minority interest in Penthouse Media Group, Inc., and the
      financing obtained to complete that acquisition, resulted in
      the Company being acquired by an unlisted company which
      triggered the application of the initial listing standards
      in Sections 101 and 102 of the Company Guide, and the
      Company does not satisfy such initial listing standards
      based upon publicly available information;

   2. In the Staff's opinion, the Company does not comply with its
      listing agreement as required by Section 1003(d) of the
      Company Guide, including the Staff's position that

         (i) the Company has issued or authorized its transfer
             agent to issue additional shares of its common stock
             without the Amex's approval,

        (ii) the Company issued 20% or more of its currently
             outstanding shares of common stock without obtaining
             prior approval of its shareholders,

       (iii) the Company issued shares to consultants without
             obtaining prior approval of its shareholders,

        (iv) the Company did not obtain appropriate review by its
             audit committee of related party transactions, and

         (v) the Company did not file complete information in
             response to the Staff's request for additional
             information;

   3. In the Staff's opinion, the Company has engaged in
      operations contrary to the public interest including the
      Company's apparent:

         (i) selective disclosure of material non-public
             information in July 2004,

        (ii) trading in its securities by insiders while in
             possession of non-public information in July 2004,
             and

       (iii) engaging in transactions that are not in the economic
             interest of its shareholders or where there does not
             appear to have been adequate scrutiny to the terms of
             its attempted acquisition and termination of Media
             Billing Company, LLC;
   4. The Company is financially impaired, as defined in Section
      1003(a)(iv) of the Company Guide, citing, among other
      things, a working capital deficit of $37,000 as of Sept. 30,
      2004; and

   5. The Company has made inaccurate representations in SEC
      filings relating to the number of shares of its common stock
      outstanding.  In the Staff's view, there was a discrepancy
      in the number of shares outstanding when comparing the
      Company's reported shares on the Company's Schedule 14A
      filed on November 1, 2004, and the Company's Form 10-Q for
      the quarter ending September 30, 2004 and the Transfer
      Activity Report maintained by the Company's transfer agent.

The Company believes that the Amex Staff may have based certain
conclusions addressed in the January 10th notice on incomplete or
unclear information and, as a result, may have initiated the
delisting procedures without the benefit of certain facts.
However, following the meeting, the Staff advised the Company that
the only relief available to the Company would be the appeal
process.  As noted above, the Company intends to appeal the
Staff's determination and request a hearing before the Amex
Listing Qualifications Panel.

For other information concerning the transaction terms please see
disclosures in IBD's Form 8-K filed with the US Securities and
Exchange Commission on January 14, 2005.

             About Interactive Brand Development, Inc.

Interactive Brand Development, Inc. (AMEX:IBD) (f/k/a Care
Concepts I, Inc.) is a media and marketing holding company with
significant consumer brand investments.  The company owns
interests in animation brands; adult entertainment brands; and in
online auctions.  The Company's brand investments include
Penthouse Media Group (PMG), publisher of Penthouse Magazine, a
brand-driven global entertainment business founded in 1965 by
Robert C. Guccione.  PMG's flagship PENTHOUSE(TM) brand is one of
the most recognized consumer brands in the world and is widely
identified with premium entertainment for adult audiences.  PMG is
operated by affiliates of Marc Bell Capital Partners, LLC, as a
global multimedia company encompassing Internet distribution
through multiple websites, video production, broadcast, clubs and
product licensing.

                      Auditors Express Doubt

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


INTERSTATE BAKERIES: Hires KPMG as Internal Control Advisors
------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Missouri
gave Interstate Bakeries Corporation and its debtor-affiliates
permission to employ KPMG, LLP, as their internal control
advisors, nunc pro tunc to November 24, 2004.

The firm has diverse experience and extensive knowledge in the
fields of internal controls over financial reporting.

KPMG, a United States professional member firm of KPMG
International, a Swiss cooperative, will render advisory services
to the Debtors, including assisting the Debtors in:

    (1) documenting their internal control over financial
        reporting in accordance with their responsibilities under
        Section 404 of the Sarbanes-Oxley Act, including planning
        and scoping assistance, internal control framework gap
        analysis, gap analysis comparisons to control reference
        sources, and remediation assistance;

    (2) the design of controls based on the results of
        documentation and gap analysis; and

    (3) performing tests of the design and operating
        effectiveness of the Debtors' ICOFR in accordance with its
        responsibilities under Section 404 of SOX.

According to Ronald B. Hutchison, the Debtors' Chief Financial
Officer, KPMG will be compensated for its advisory services at
its normal and customary hourly rates, subject to a "normal-
course-of-business" revision every October 1 of each year.  The
firm's current hourly rates are:

           Partners                            $700
           Senior Managers                     $600
           Managers                            $500
           Senior Associates                   $380
           Associates                          $225

KPMG, however, has agreed to apply a 50% discount to its fees,
with respect to this engagement.

Mr. Hutchison says that KPMG will also seek reimbursement for
necessary expenses incurred in providing professional services.

Patrick A. Noack, a Certified Public Accountant and a partner at
KPMG, assures the Court that the firm:

    (a) does not have any connection with the Debtors, their
        creditors, or any other party in interest, or their
        attorneys, or accountants;

    (b) is a "disinterested person," as that term is defined in
        Section 101(14) of the Bankruptcy Code, as modified by
        Section 1107(b); and

    (c) does not hold or represent an interest adverse to the
        Debtors, their estates, creditors or other
        parties-in-interest.

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)


KAISER ALUMINUM: Inks Pact to Access $200 Million in New DIP Loan
-----------------------------------------------------------------
Kaiser Aluminum has signed a commitment letter and filed a motion
with the U.S. Bankruptcy Court for the District of Delaware
seeking approval to enter into an agreement with JPMorgan Chase
Bank, National Association, J.P. Morgan Securities Inc., and The
CIT Group/Business Credit, Inc., under which Kaiser would be
provided with a replacement for the company's existing Debtor-in-
Possession (DIP) Credit Facility and a commitment for a multi-year
exit financing arrangement upon Kaiser's emergence from Chapter
11.

J.P. Morgan Securities Inc., would act as the lead arranger, sole
bookrunner, and syndication agent for the new facility.  JPMorgan
Chase Bank would be administrative agent.  CIT Group would act as
co-arranger.

As described in the motion and the corresponding commitment
letter, and subject to the completion of definitive documentation,
the new facility would:

   -- replace the existing $200 million DIP credit facility, which
      expires Feb. 13, 2005, with a new $200 million credit
      facility intended to remain in place until the company's
      emergence from Chapter 11;

   -- include a commitment, upon Kaiser's emergence from Chapter
      11, for exit financing in the form of a $200 million
      revolving credit facility and a fully drawn term loan of up
      to $50 million; and

   -- provide a maturity on the exit financing's revolving credit
      facility of five-years from the date of the closing of the
      replacement DIP (which is expected to occur in February
      2005) and a maturity on the term loan of six years from such
      closing date.

Kaiser has asked the Court to schedule a hearing on the motion on
Feb. 2, 2005.

"The new facility has been designed to provide us with the size,
terms, and flexibility that we expect to need as we complete our
reorganization and look ahead to our future as a highly
competitive fabricated products company.  The exit financing, in
particular, is expected to enable Kaiser to emerge from Chapter 11
with a sound financial profile and the liquidity necessary to
support continued growth," said Jack A. Hockema, Kaiser's
President and Chief Executive Officer.

Headquartered in Houston, Texas, Kaiser Aluminum Corporation --
http://www.kaiseral.com/-- operates in all principal aspects of
the aluminum industry, including mining bauxite; refining bauxite
into alumina; production of primary aluminum from alumina; and
manufacturing fabricated and semi-fabricated aluminum products.
The Company filed for chapter 11 protection on February 12, 2002
(Bankr. Del. Case No. 02-10429).  Corinne Ball, Esq., at Jones
Day, represents the Debtors in their restructuring efforts.  On
June 30, 2004, the Debtors listed $1.619 billion in assets and
$3.396 billion in debts.


KARGO CORPORATION: Section 341(a) Meeting Slated for Feb. 7
-----------------------------------------------------------
The Bankruptcy Administrator for the Eastern District of North
Carolina will convene a meeting of Kargo Corporation's creditors
on Feb. 7, 2005, at 10:00 a.m. at the U.S. Bankruptcy
Administrator's Creditors Meeting Room located at Two Hannover
Square, Room 610, Fayetteville Street Mall in Raleigh, North
Carolina.  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.

Headquartered in Raleigh, North Carolina, Kargo Corporation filed
for chapter 11 protection on Jan. 11, 2005 (Bankr. E.D. N.C. Case
No. 05-00101).  James B. Angell, Esq., at Howard, Stallings, From
& Hutson, PA, represents the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it
estimated assets not more than $50,000 and estimated debts between
$10 million and $50 million.


KARGO CORPORATION: Creditors Must File Proofs of Claim by May 9
---------------------------------------------------------------
The United States Bankruptcy Court for the Eastern District of
North Carolina set May 9, 2005, as the deadline for all creditors
owed money by Kargo Corporation on account of claims arising prior
to Jan. 11, 2005, to file their proofs of claim.

Creditors must file written proofs of claim on or before the May 9
Claims Bar Date and those forms must be delivered to:

              Peggy B. Deans
              Clerk of the Bankruptcy Court
              Room 209, 300 Lafayette Street Mall
              P.O. Drawer 1441
              Raleigh, North Carolina 27602-1441

The Claims Bar Date applies to all claimants except governmental
units.

For governmental units, the Claims Bar Date is July 11, 2005.

Headquartered in Raleigh, North Carolina, Kargo Corporation filed
for chapter 11 protection on Jan. 11, 2005 (Bankr. E.D. N.C. Case
No. 05-00101).  James B. Angell, Esq., at Howard, Stallings, From
& Hutson, PA, represents the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it
estimated assets not more than $50,000 and estimated debts between
$10 million and $50 million.


LAIDLAW: Lenders Consent to Laidlaw's Sale of Healthcare Group
--------------------------------------------------------------
The lenders under the Laidlaw International, Inc., Credit
Agreement dated June 19, 2003, among borrowers Laidlaw
International, Laidlaw Transit Ltd., and Greyhound Canada
Transportation Corp., administrative agent Citicorp North
America, Inc., and the other lenders party to the credit
agreement, consent to Laidlaw's disposition of its healthcare
group, comprised of American Medical Response, Inc., EmCare
Holdings, Inc., and each of their direct and indirect
subsidiaries.

Laidlaw will use a portion of the proceeds from the Sale
Transaction to repay in full the outstanding principal amount of
the Term B Revolver and any accrued and unpaid interest.

Laidlaw Senior Vice-President and Chief Financial Officer Douglas
A. Carty informs the Securities and Exchange Commission that the
lenders have further agreed, in accordance with the terms of a
bank consent letter, to release:

   (a) the guarantees granted by AMR, EmCare and their
       subsidiaries; and

   (b) all liens on all of the assets of AMR, EmCare and their
       subsidiaries, upon consummation of the Sale Transaction.

A copy of the Bank Consent Letter by and among the Borrowers,
Citicorp and the other lenders under the Credit Agreement, is
available for free at:

   http://sec.gov/Archives/edgar/data/737874/000129993304002343/exhibit1.htm

As reported in the Troubled Company Reporter on Dec. 8, 2004,
Laidlaw International, Inc., entered into definitive
agreements to sell both of its healthcare companies, American
Medical Response and EmCare, to Onex Partners LP, an affiliate
of Onex Corporation, for $820 million.  Net cash proceeds to
Laidlaw are expected to be approximately $775 million after debt
assumed by the buyer and payment of transaction costs.  While
Laidlaw will realize a substantial gain on sale, there will be
no cash tax obligation as a result of the transactions.

Proceeds from the transactions will be used in part to retire
approximately $579 million of outstanding borrowings under the
company's Term B senior secured term facility.

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.


LB PACIFIC: Moody's Assigns B1 Rating to $170-Mil Sr. Term Loan B
-----------------------------------------------------------------
Moody's assigned a B1 rating to LB Pacific, LP's -- LBP --
$170 million Term Loan B, to be secured by 34.6% of the
subordinated equity units of Pacific Energy Partners, LP's (PPX)
and by the equity of Pacific Energy GP, LLC (PEGP) which holds the
2% general partner interest in PPX.  Moody's affirms PPX's Ba2
senior unsecured note and Ba1 senior implied ratings and stable
outlook.  PPX is a midstream oil master limited partnership and
PEGP is its general partner.

Upon regulatory approval, LBP will acquire PEGP from The Anschutz
Corporation for $340 million plus deal costs, funded with TLB
proceeds and $182 million of cash common equity.  Through PEGP,
LBP will indirectly own the 2% PPX general partner equity interest
and manage and control PPX while LBP will directly own 10.465
million of PPX's subordinated limited partner units (a combined
36.6% PPX equity interest).

Lehman Brothers Merchant Banking Associates III L.L.C. will
provide all equity funding. While retaining the majority interest,
it may later sell a portion of the equity to other investors,
including possibly NuCoastal L.L.C. which is owned by Oscar Wyatt.
At least initially, PEGP (which manages PPX) will continue to be
run by existing management, and two NuCoastal executives will
resign from NuCoastal to join PEGP.

At PPX's expected 2005 PPX distribution rate, LBP is acquiring a
roughly $22 million revenue stream, it hopes to grow in concert
with PPX's limited partner distribution growth and PEGP's rising
general partner cut (now a low 2% split) of that growth.
Borrowing at Libor plus 300 bp, LBP will swap 50% of TLB proceeds
to a fixed rate. LBP's Cash Flow/Interest would be in the range of
2x.

Other core statistics include:

    (i) approximately $340 million of total PPX debt, $170 million
        of LBP debt, and $510 million of combined debt;

   (ii) $415 million of PPX equity, $182 million of LBP equity,
        and $597 million of combined equity;

  (iii) roughly $90 million of expected PPX 2005 EBITDA and $10
        million of PPX maintenance and transitional capital
        spending; and

   (iv) roughly $31 million of LBP/PPX interest expense.

PPX is reasonably positioned to benefit from rising U.S. imports
of Canadian syncrude and of foreign crude oil imported through Los
Angeles harbor, with the latter enhanced if it sanctions its Pier
400 project.

PPX is a master limited partnership engaged in midstream
gathering, blending, pipeline transportation, marketing,
terminaling, and storage of crude oil delivered from central and
southern California, the Rocky Mountains, Canada, and imported
through the Los Angeles and Long Beach Harbors, and destined for
refineries in Southern California, Salt Lake City, and the greater
Rocky Mountain region.

TLB will be first secured by the subordinated equity units but
will not by the PPX general partner interest that would have given
it a direct claim on the general partner interest and operating
control of PPX in the event of LBP bankruptcy.  However, TLB will
be first secured by LBP's equity in PEGP which owns the general
partner interest.

LBP-specific ratings restraints include:

    (i) LBP's near total dependence on cash flow from a
        subordinated equity security;

   (ii) resulting structural subordination of LBP cash flow within
        LBP/PPX, exacerbated by the subordinated units' junior
        position relative to common units;

  (iii) the lack of security in the 2% general partner interest;
        and

   (iv) the fact that private market valuations of subordinated
        units relative to common units is evolving.

Subordinated units had tended to sell close to common unit values
but have moved to greater discounting of subordinated units to
reflect their weaker position.

PPX's ratings are restrained by:

    (i) the constant distribution of cash flow after interest
        expense and maintenance capital spending;

   (ii) intense competition for imported Canadian and California
        domestic and imported crude oil volume;

  (iii) changing refining sector appetites for California heavy
        and medium sour crude oil due to ever-tougher low sulfur
        gasoline and diesel specifications;

   (iv) declining California crude oil pipeline throughput volume
        due to falling indigenous crude oil production;

    (v) expected more aggressive PPX growth strategies
        and acquisition risk in an increasingly expensive
        competitive midstream acquisition market;

   (vi) full PPX leverage relative to its ratings and scale and
        the uncertain impact of the change in PEGP ownership; and

  (vii) how the ownership mix evolves as Lehman sells down its
       holding and how the LBP/PEGP/PPX management mix evolves.

LBP rating support includes:

    (i) a reasonably effective cash sweep and covenant package;

   (ii) a significant $182 million equity cushion;

  (iii) strategic and operating control of PPX;

   (iv) the resulting ability to direct PPX cash distribution
        policy;

    (v) comparatively durable PPX cash flow in support of
        distributions to the subordinated and general partner
        units; and

   (vi) TLB's first secured collateral position in the
        subordinated units.

PPX's and LBP's ratings are also supported by:

    (i) PPX's regionally diversified operations and strategic
        exposure to secularly rising imported crude oil volumes at
        Pacific Terminals and the Rocky Mountain and Canadian
        pipelines;

   (ii) expected rising 2004 and 2005 throughput for Pacific
        Terminals and the Rocky Mountain and Canadian pipelines;

  (iii) PPX's ability to-date to mitigate the cash flow impact of
        falling California pipeline volume with increased pipeline
        tariffs; and

   (iv) PPX's regional diversification of the risk of reduced
        pipeline volumes due to individual refinery downtimes.

TLB is effectively a bullet loan, with 1% mandatory annual
amortization and 94% due at maturity.  Partial prepayment may come
with a cash flow sweep and possible sale of roughly 25% of the
subordinated units that are scheduled to convert to common units
in June 2005.  Significant PPX distribution growth is needed to
repay TLB before maturity, even assuming pre-payment with the
subordinated unit sale proceeds.

Principal financial covenants at LBP include: maximum quarterly
consolidated debt to consolidated cash flow starting at 8.75x and
quarterly consolidated cash flow to consolidated cash interest
expense starting at 1.75x.

In addition, PPX operating company leverage would trigger an event
of default at the LBP level according to the formula: PPX debt to
EBITDA may not exceed 4.75:1.0; provided, however, that if, and
for so long as that ratio for LPB itself is 6:00:1.0 or less, the
maximum leverage test for PPX would increase to 5.25:1 consistent
with its current credit facilities.

Pro-forma 2005 LBP Debt/Cash Flow, at PPX's current cash
distribution per unit and after interest and LBP expenses, is
roughly 15.5x.  This risk is reduced if LBP executes its plan to
sell up to 25% of its subordinated units to pre-pay debt.  Its
share of distributions would also then fall by just under 25%,
after which, LBP Debt/Cash Flow (after LBP interest and expenses)
would be in the range of 9x to 10x.  Regarding the cash flow and
valuation risk of the subordinated units, this may mitigate over
time as scheduled conversion of the subordinated units to common
units progresses.

The leveraged acquisition of PEGP adds to PPX's effective
leverage.  Leveraged LBP and its owners have great incentive to
guide PPX distribution, growth, and funding strategies in a manner
ensuring LBP debt coverage, rising PPX distributions, and a rising
PPX split on those distributions to support return goals.  PEGP
has less latitude than prior un-leveraged PEGP (held by deeply
capitalized Anschutz) to cut distributions at PPX in the face of
weaker cash flow or capital needs.  LBP seeks to accelerate PPX
growth (in an increasingly expensive midstream acquisition market)
to more quickly boost its split (from a current 2% to a maximum of
50%) of PPX distribution increases.

Combined LBP/PPX leverage on PPX EBITDA will be high.  Combined
EBITDA leverage will start at roughly 5.8x, or 8.2x after
deducting PPX maintenance capital spending and interest from PPX
EBITDA, and in the range of 10x after deducting PPX interest,
maintenance capital spending, and LBP interest expense.  At the
expected initial PPX cash distribution of $0.50/unit per quarter
to common and subordinated units, and the expected payout on the
GP interest, LBP would generate in the range of $21.5 million in
EBITDA. After expected interest expense in the range of $11
million to $12 million, initial interest coverage approximates
1.8x to 2x.

TLB is in a very junior position relative to PPX debt and cash
flow. LBP's cash flow is generated by PPX cash distributions to
subordinated and general partner units.  It is structurally
subordinated to all PPX obligations, further effectively
subordinated to PPX secured bank debt, and virtually all TLB cash
flow is subordinated in rank to the common unit holders' claim to
PPX distributions.  If facing reduced or stressed cash flow, PPX
can cut distributions to subordinated units yet maintain full
minimum quarterly distribution to common units to support their
market value.

Offshore California oil production declines some 7% to 8% per year
while onshore production from the San Joaquin Valley declines
roughly 3% per year, restraining PPX cash flow. To organically
sustain or grow cash flow, PPX must offset the impact of the
resulting throughput declines in its California gathering and
pipeline systems.

However, three offsets to that decline include:

   (i) pricing power to raise tariffs on remaining throughput;

  (ii) rising throughput and utilization of the Pacific Terminal
       segment (utilization up to 86% in 2004 from 78% in 2003);
       and

(iii) PPX's rising Rocky Mountain system throughput.

California declines could also slow if the firms operating the
offshore California Rocky Point play can add significantly to an
initial Rocky Point drilling success.  Still, that well is now
producing at roughly one-half its 2004 initial production rate,
indicating steep production declines on any future successes.

While Moody's anticipates progressively rising Rocky Mountain
throughput over the intermediate term, ultimate growth in
southbound Canadian synthetic crude oil flows relies on very
substantial capital investment before most U.S. refiners can run
substantially higher proportions of synthetic crude oil.

PPX's strategy includes the acquisition of regional crude oil
gathering and pipeline systems that, ideally, had been run as cost
centers within larger marketing, supply, and trading divisions of
major oil companies.  PPX seeks to then boost throughput by more
aggressively marketing for regional volumes, promoting
rationalization of regional flows through its midstream
infrastructure, and, internally expanding capacity.

With a stable rating outlook, and subject to at least $182 million
of cash common equity funding, Moody's assigned the ratings for
LBP:

   -- B1 for a pending $170 million senior secured 7-year Term
      Loan B.

   -- B1 senior implied rating.

   -- B2 senior unsecured issuer rating (notional unsecured non-
      guaranteed issuer debt).

Pacific Energy Partners is headquartered in Long Beach,
California. LB Pacific will be headquartered in New York, New
York. PPX will continue to pursue growth in the Rocky Mountains
and California as well as in other regions and asset classes.


LNR PROPERTY: Executes Supplemental Indentures
----------------------------------------------
LNR Property Corporation (NYSE:LNR) has executed Supplemental
Indentures amending the Indentures relating to its 7.625% Senior
Subordinated Notes due 2013 and its 7.25% Senior Subordinated
Notes due 2013.  The execution of the Supplemental Indentures was
accomplished as a result of the receipt of tenders and related
consents from the holders of a majority in principal amount of
each issue of Notes in response to LNR's previously announced
tender offer and consent solicitation.

The Supplemental Indentures amend the Indentures to which they
relate to eliminate substantially all of the covenants contained
in the Indentures other than the covenants to pay principal and
interest when the Notes are due and to offer to holders of the
Notes the right to tender their Notes to LNR at 101% of their
principal amount after a change of control of LNR (including the
previously announced merger with a subsidiary of Riley Property
Holdings LLC), as well as to eliminate certain events of default.

Each of the Supplemental Indentures became effective when it was
executed.  However, the amendments to an Indenture will not become
operative until LNR pays for the Notes which are the subject of
the Indenture that are properly tendered in response to a tender
offer and consent solicitation LNR has made and not validly
withdrawn.  The tender offer is conditioned on, among other
things, completion of the merger with a subsidiary of Riley
Property Holdings.  If the amendments to an Indenture become
operative, they will be effective from the date the related
Supplemental Indenture was executed.

Because the Supplemental Indentures relating to the two issues of
Senior Subordinated Notes have been executed, Notes of each issue
tendered in response to LNR's tender offer can no longer be
withdrawn.

At 5:00 p.m., New York City time, on Jan. 14, 2005, $325 million
principal amount of the 7.625% Senior Subordinated Notes (out of a
total of $350 million principal amount) and $390 million principal
amount of the 7.25% Senior Subordinated Notes (out of a total of
$400 million principal amount) had been properly tendered and not
validly withdrawn.  Tenders of Notes of an issue include consents
to the amendments effected by the Supplemental Indenture related
to that issue of Notes.

Holders who properly tendered Notes prior to 5:00 p.m., New York
City time, on Jan. 14, 2005, and did not validly withdraw them are
entitled to receive, in addition to the price being paid for their
Notes, a payment of $30.00 per $1,000 principal amount for the
consents.  Notes can still be tendered until the tender offer
expires at 5:00 p.m., New York City time, on Jan. 28, 2005, or any
later date to which it may be extended.  However, holders who
tender Notes after 5:00 p.m., New York City time, on Jan. 14,
2005, will no longer receive payments for consents.

This is not an offer to purchase Notes or a solicitation of
consents.  The offer to purchase and consent solicitation is made
solely by the Offer to Purchase and Consent Solicitation, dated
Dec. 30, 2004, as modified by an Amendment to Offer to Purchase
and Consent Solicitation, dated Jan. 12, 2005, and a form of
Consent and Letter of Transmittal that accompanied the Offer to
Purchase and Consent Solicitation.

                        About the Company

LNR Property Corporation [NYSE: LNR] is a real estate investment
and management company headquartered in Miami Beach, Florida, USA,
with assets of $3.1 billion and equity of $1.1 billion at
May 31, 2004.

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 20, 2004,
despite the downgrade by Fitch Ratings of LNR Property
Corporation, Fitch anticipates affirming Lennar Partners, Inc.'s
special servicer rating of 'CSS1' pending an annual review in
first-quarter 2005. The proposed capital structure after the
acquisition of Lennar's parent company, LNR Property Corp., by
Riley Property Holdings LLC, majority owned by affiliates of
Cerberus Capital Management, LP, precipitated Fitch's rating
action.

The expectation to affirm the servicer rating is based on Fitch's
continuing discussions with Lennar senior management and their
assertion that the CMBS servicing business will continue to
operate as it currently does.  Fitch will continue to monitor the
acquisition and its impact on the servicing business.


LONG BEACH: S&P Hacks Two Cert. Classes to B from BBB
-----------------------------------------------------
Standard & Poor's Ratings Services raised its rating on class II-
M1 from Long Beach Mortgage Loan Trust 2002-1.  At the same time,
ratings on two other classes from two separate deals are lowered,
and ratings are affirmed on 120 classes from 17 other
transactions.

The raised rating is based on pool performance that, along with
the shifting interest structure of the transaction, has caused the
credit support percentage to increase sufficiently enough to
protect the class at the new rating level.  The projected credit
support percentage for class IIM-1 from series 2002-1 is 3.30x the
loss coverage levels associated with the new rating.  Cumulative
losses are 0.72% of the original pool balance, while 90-plus day
delinquencies (including foreclosures and REOs) are 14.83% of the
current pool balance.

The lowered ratings are based on pool performance that has led to
losses that have outpaced excess interest for the past six months.
Cumulative losses are 4.24% and 4.26% of the original pool balance
for series 2000-1 and 2001-1, respectively.  Ninety-plus day
delinquencies (including foreclosures and REOs) are 24.42% and
23.11%, respectively, of the current pool balance for series
2000-1 and 2001-1.  In addition, and despite the poor performance,
the step-down triggers on these transactions allowed both
overcollateralization and subordination to step down and further
erode credit enhancement.

The rating affirmations are based on credit support percentages
that are sufficient to maintain the securities their current
rating levels.

The pools in this shelf use a combination of subordination, excess
interest, and overcollateralization as credit support.  In
addition, series 2002-3 and 2002-4 have bond-insurance policies
provided by XL Capital Assurance Inc. (financial strength rating
'AAA').

Long Beach Mortgage Company either originated or acquired all of
the mortgage loans used as collateral in these pools in accordance
with its underwriting standards.  The underlying collateral for
these transactions are mostly fixed- and adjustable-rate, first
lien, 30-year mortgage loans on single-family homes.

                         Raised Ratings

                 Long Beach Mortgage Loan Trust
                    Asset-backed certificates

                                     Rating
                                     ------
                Series   Class   To          From
                ------   -----   --          ----
                2002-1   II-M1   AAA         AA

                         Lowered Ratings

                 Long Beach Mortgage Loan Trust
                    Asset-backed certificates

                                    Rating
                                    ------
                Series   Class   To         From
                ------   -----   --         ----
                2000-1   M-3     B          BBB
                2001-1   M-3     B          BBB

                        Affirmed Ratings

                 Long Beach Mortgage Loan Trust
                    Asset-backed certificates

           Series   Class                       Rating
           ------   -----                       ------
           2000-1   AF-3, AF-4, AV-1            AAA
           2000-1   M-1                         AAA
           2000-1   M-2                         A
           2001-1   A-1, S                      AAA
           2001-1   M-1                         AA+
           2001-1   M-2                         A
           2001-3   A-2, S-2                    AAA
           2001-4   II-A1, II-A3, II-S          AAA
           2002-1   II-A1, II-A4, II-S          AAA
           2002-1   M2                          A
           2002-1   M3                          BBB-
           2002-1   II-M4                       BBB-
           2002-2   II-A, II-S1                 AAA
           2002-2   II-M1                       AA
           2002-2   M2                          A
           2002-2   M3                          BBB
           2002-2   M4A, M4B                    BBB-
           2002-3   II-A, II-S1                 AAA
           2002-4   II-A, II-S1                 AAA
           2002-5   A-2, S-2                    AAA
           2002-5   M-1                         AA
           2002-5   M-2                         A
           2002-5   M-3                         BBB
           2002-5   M-4A, M-4B                  BBB-
           2003-1   A-2, S-2                    AAA
           2003-1   M-1                         AA
           2003-1   M-2                         A
           2003-1   M-3                         BBB
           2003-1   M-4                         BBB-
           2003-2   AF, S-1, AV, S-2            AAA
           2003-2   M-1                         AA
           2003-2   M-2                         A
           2003-2   M-3                         A-
           2003-2   M-4                         BBB+
           2003-2   M-5                         BBB
           2003-3   A                           AAA
           2003-3   M-1                         AA
           2003-3   M-2                         A
           2003-3   M-3                         BBB
           2003-3   M-4                         BBB-
           2003-4   AV-1, AV-3                  AAA
           2003-4   M-1                         AA
           2003-4   M-2                         A
           2003-4   M-3                         A-
           2003-4   M-4A, M4-F                  BBB+
           2003-4   M-5A, M-5F                  BBB
           2003-4   M-6                         BBB-
           2004-1   A-1, A-2, A-3, A-4, A-5     AAA
           2004-1   M-1                         AA
           2004-1   M-2                         A+
           2004-1   M-3                         A
           2004-1   M-4                         A-
           2004-1   M-5                         A
           2004-1   M-6                         A-
           2004-1   M-7                         BBB+
           2004-1   M-8                         BBB
           2004-1   M-9                         BBB-
           2004-1   B                           BB+
           2004-2   A-1, A-2, A-3, A-4          AAA
           2004-2   M-1                         AA
           2004-2   M-2                         A+
           2004-2   M-3                         A
           2004-2   M-4                         A-
           2004-2   M-5                         BBB+
           2004-2   M-6                         BBB
           2004-2   M-7                         BBB-
           2004-2   B                           BB+
           2004-3   A-1, A-2, A-3, A-4, S-1     AAA
           2004-3   S-2                         AAA
           2004-3   M-1                         AA+
           2004-3   M-2                         AA
           2004-3   M-3                         AA-
           2004-3   M-4                         A+
           2004-3   M-5                         A
           2004-3   M-6                         A-
           2004-3   M-7                         BBB+
           2004-3   M-8                         BBB
           2004-3   M-9                         BBB-
           2004-A   A, S                        AAA
           2004-A   M-1                         AA
           2004-A   M-2                         AA-
           2004-A   M-3                         A+
           2004-A   M-4                         A
           2004-A   M-5                         A-
           2004-A   M-6                         BBB+
           2004-A   M-7                         BBB
           2004-A   M-8                         BBB-
           2004-A   B                           BB+

MEDXLINK CORP: Completes Merger with Particle Drilling
------------------------------------------------------
Particle Drilling Technologies, Inc., a developer of a patented
particle impact drilling technology for use in oil and gas
exploration, and MedXLink Corp., (OTC Bulletin Board:MXLK), have
completed the previously announced acquisition of PDTI by MedXLink
in a stock-for-stock transaction.  The combined company will have
approximately 22 million fully diluted shares outstanding.
MedXLink intends to change its name to Particle Drilling
Technologies Inc. and its stock ticker in the near future.

John D. Schiller, Jr., the chief executive officer of PDTI,
stated: "This merger continues to advance the Particle Drilling
business plan as we remain focused on final development and
commercialization of our technology.  The Particle Drilling
technology has the potential to reduce the cost of drilling for
oil and gas by decreasing the cost and time required to drill
through difficult formations."

PDTI's patented Particle Impact Drilling system utilizes a
specially designed drill bit fitted with jetting nozzles that
serve to accelerate spherical steel particles ("shot") entrained
with drilling mud into the path of the drill bit.  Each particle
is driven into the rock formation at a high velocity and through
momentum change, delivers forces many times greater than the
compressional strength of the rock, even in formations that exist
in the subsurface at elevated hardness and stress.  The number of
steel shot strikes on the formation varies with the amount of shot
entrained into the mud system.  The Particle Impact Drilling
system is expected to entrain, circulate, and recover steel shot
in the mud system without allowing the shot to circulate through a
rig's pumps.  The system is designed as a mobile service that is
expected to be provided to the oil and gas operator as part of the
normal drilling process.  The system is expected to result in
increased bit life, longer footage runs and much higher rates of
penetration, thereby significantly reducing drilling costs and
improving overall economics in the oil and gas drilling industry.
PDTI believes its Particle Impact Drilling system has broad market
application that will significantly reduce drilling costs in the
drilling market.

Pursuant to the Agreement and Plan of Reorganization, many of the
officers and directors of PDTI will become officers and directors
of MedXLink.

                      Officers & Directors

   -- John D. Schiller, Jr.
      President and CEO

Mr. Schiller was previously with Devon Energy where he was vice
president, Exploration & Production with responsibility for
Devon's Domestic & International activities.  Before joining Devon
Energy he was executive vice president, Exploration & Production
for Ocean Energy Inc.  He was responsible for Oceans' worldwide
exploration, production and drilling activities.

Mr. Schiller joined Ocean Energy from Seagull Energy, where he
served as senior vice president of Operations before the two
companies merged in March of 1999.  He joined Seagull Energy from
Burlington Resources, where he served in a variety of operational
and management positions over a period of 14 years, including
Production and Engineering Manager for the Gulf Coast Division.
Prior to this assignment, he managed the corporate acquisition
group for Burlington Resources.

Mr. Schiller graduated with honors from Texas A&M University with
a Bachelor of Science in petroleum engineering and now serves as
chairman of the Texas A&M Petroleum Engineering Industry Board.
He is a member of the Society of Petroleum Engineers, American
Petroleum Institute, American Association of Drilling Engineers
and Board member of the Houston Producers Forum.

   -- Ken R. LeSuer
      Chairman and Independent Director

Ken R. LeSuer retired in 1999 as vice chairman of Halliburton
Company.  Prior to becoming the vice chairman, Mr. LeSuer served
as both the president and CEO of Halliburton Energy Services and
as president and chairman of Halliburton Energy Group.  He also
served as president and CEO of three Halliburton units during his
tenure.  Mr. LeSuer began his career with Halliburton as an
engineer-in-training in 1959.  From 1965 through 1982, he served
in managerial positions in Asia Pacific and Europe/Africa and was
serving as vice president of Europe/Africa before returning to
Duncan, Okla., to assume the position of vice president of
International Operations in 1982.

Mr. LeSuer was a member of the Texas A&M University Petroleum
Engineering Industry Board, as well as the TAMU Dwight Look
College of Engineering External Advisory and Development Council.
He has served as vice president Services Division of the
International Association of Drilling Contractors, and is a member
of numerous petroleum and geological engineering societies,
including Society of Petroleum Engineers, the American Petroleum
Institute, the National Ocean Industries Association, and the
Petroleum Equipment Suppliers Association.  Mr. LeSuer received
his bachelor's degree in petroleum engineering from Texas A&M
University in 1959.

   -- J. Chris Boswell, Senior Vice President
      CFO and Director

Mr. Boswell has over 19 years of experience in financial
management focused in the energy industry and began his career at
Arthur Anderson & Co. and later served in management positions
with Price Waterhouse in Houston.  He served as senior vice
president and chief financial officer of Petroleum Geo-Services
ASA from December 1995 until October 2002.  PGS grew from a small
enterprise in 1994 when Mr. Boswell joined the company to a $1
billion annual revenue enterprise with a peak enterprise value of
$6 billion.  Subsequent to Mr. Boswell's departure and following a
change of control within PGS, the new management of PGS filed for
bankruptcy protection in July 2003 in order to restructure PGS's
debt portfolio.  The restructuring was successfully completed and
PGS emerged from bankruptcy in October 2003.  In all, during his
tenure as CFO at PGS, Mr. Boswell financed over $3 billion of
capital expenditures to fund the Company's growth.  Additionally
during 1995, Mr. Boswell and other senior executives at PGS
developed the concept to create a unique oil and gas company using
a non-exclusive license in PGS' seismic data library as seed
capital.  This company became Spinnaker Exploration Company
(NYSE:SKE) and now has a market capitalization in excess of
$1 billion.  Mr. Boswell is a 1984 graduate of the University of
Texas at Austin.

   -- Thomas E. Hardisty, Senior Vice President, Corporate
      Development and Director

Mr. Hardisty has over 20 years of experience in the oil and gas
industry, primarily in the area of land management, contracts and
corporate development, and is co-founder of the Company.  From
January 2001 until June 2003, Mr. Hardisty was vice president,
Land of Shoreline Partners LLC, an independent exploration company
and from January 2000 until January 2001, vice president, Land of
Benz Resources LLC, a consulting firm charged with managing
certain exploration properties acquired by Harken Energy
Corporation.  From May 1999 until January 2000, Mr. Hardisty was a
land manager for Texstar Energy Inc. responsible for divesting
certain of the company's exploration projects in the Texas Gulf
Coast and Mississippi areas.  From 1994 until May 1999, Mr.
Hardisty was division landman for PetroCorp Inc. responsible for
company land positions, contract negotiations and partner
relations in exploration and development projects in PetroCorp's
Gulf Coast, Rockies and Canada Division.  From 1984 until 1994,
Mr. Hardisty was a land consultant and later senior project
manager for Roger A. Soape Inc. in Houston.  Mr. Hardisty
graduated from the University of Texas at Austin in 1984 with a
BBA in petroleum land management.  He is a member of the American
Association of Drilling Engineers (AADE), the American Association
of Professional Landmen (AAPL) and the Houston Association of
Professional Landmen (HAPL).  Mr. Hardisty recently served as a
director of HAPL and is past chairman of the HAPL Ethics Committee
and past Chairman of HAPL Membership Committee.

   -- Gordon Tibbitts
      Vice President of Technology

Mr. Tibbitts has over 30 years of experience in the upstream oil
and gas industry and has 17 years of experience in engineering,
research, and development management.  Mr. Tibbitts is former
director of Research and Development for Hughes Christensen
Company, one of the largest makers of oil and gas drilling bits.
At Hughes Christensen, Mr. Tibbitts was responsible for managing
and directing world-wide research, development and technical
support through research groups in Houston, Salt Lake City, and
Tulsa, Okla.  He directed and managed the building of a world-
class drilling research laboratory in Houston and a drilling
operation in Oklahoma dedicated to field-testing and development
of downhole tools.  Mr. Tibbitts holds over 70 patents related to
drilling, coring, and diamond cutting tools.  His work has been
published by the Society of Petroleum Engineers, International
Association of Drilling Contractors, Society of Core Analysts, and
the Journal of Petroleum Technology.  He graduated from the
University of Utah with a Bachelors degree in mechanical
engineering.

   -- Prentis B. Tomlinson, Jr.
      Director

Mr. Tomlinson has over 30 years of experience in the energy
industry, and is a second-generation oil and gas man who traces
his roots back to Tomlinson Geophysical Service, founded in 1937
by P.B. Tomlinson, Sr. Mr. Tomlinson has founded a number of
companies in the energy sector, including exploration and
production companies, a crude trading company and another oilfield
service company, TGS Geophysical Inc., which merged with Nopec in
1997 to form TGS Nopec (www.tgsnopec.com) (OSE:TGS). From January
1998 until December 1999, Mr. Tomlinson was chairman, president
and chief executive officer of Benz Energy Inc. and its wholly-
owned U.S. subsidiary, Texstar Petroleum Inc. Benz Energy and
Texstar Petroleum were exploration and production companies active
in Texas and Mississippi. From January 2001 until June 2003, Mr.
Tomlinson was president of Shoreline Partners LLC, an independent
exploration company and from January 2000 until January 2002,
president and director of Benz Resources, L.L.C., a special
purpose entity established to manage certain exploration assets
owned by Harken Energy Corporation.  Subsequent to Mr. Tomlinson's
departure, Benz Energy and Texstar Petroleum filed for bankruptcy
protection in late 2000 as a result of a substantial write-down of
reserves at the North Oakvale Dome field in Mississippi in June
2000.  Mr. Tomlinson received a B.S. and M.S. in geology from
Louisiana Polytechnic Institute, a MTS and MA in religious studies
from Harvard University, and he is currently a candidate for a
Ph.D. in religious studies from Harvard University.

   -- Michael S. Mathews
      Independent Director

Michael Mathews is managing director of Westgate Capital Co., a
firm he founded in 1993 to identify and structure investment
opportunities on behalf of private investors.  Mr. Mathews served
on the Board of Petroleum Geo-Services (PGS) from 1993 until
September 2002.  From 1998 to 2002, he served as vice chairman of
PGS and held the position as chairman of the Compensation
Committee and was a member of the Audit Committee.  From 1989 to
1992, Mr. Mathews served as managing director of Bradford Ventures
Ltd., a private investment firm involved in equity investments,
including acquisitions.  Prior to 1989, he was president of DNC
Capital Corporation and senior vice president and director of its
parent, DNC America Banking Corp., the U.S. subsidiary of Den
Norske Credit Bank Group, where he directed merchant banking and
investment activity in North America and founded and acted as
senior advisor to Nordic Investors Limited, N.V., a private
venture capital fund.  Previously, Mr. Mathews was a vice
president in Corporate Finance at Smith Barney and prior to that
he was an associate with the New York law firm of White & Case.
Mr. Mathews received an A.B. from Princeton University in 1962 and
received a J.D. from the University of Michigan Law School in
1965.

   -- Hugh A. Menown
      Independent Director

Mr. Menown has over 23 years experience in mergers & acquisitions,
auditing and managerial finance.  Mr. Menown has worked with
Quanta Services Inc. (NYSE:PWR) as a consultant or employee in
various capacities since July 1999.  Mr. Menown performed due
diligence on a number of Quanta's acquisitions and has served as
chief financial officer for two of their operating companies, most
recently North Houston Pole Line, L.P. located in Houston.  Prior
to working with Quanta, Mr. Menown was a partner in the Houston
office of PricewaterhouseCoopers, LLP where he led the Transaction
Services Practice providing due diligence, mergers & acquisition
advisory and strategic consulting to numerous clients in various
industries.  Mr. Menown also worked in the Business Assurance
Practice providing audit and related services to clients.  Mr.
Menown is a Certified Public Accountant.

            About Particle Drilling Technologies Inc.

PDTI is a development stage oilfield service and technology
company owning certain patents and pending patents related to the
Particle Impact Drilling technology.  The company's technology is
expected to significantly enhance the rate-of-penetration function
in the drilling process, particularly in hard rock drilling
environments.  PDTI intends to develop and exploit this technology
by commercializing the Particle Impact Drilling system and through
a unique contracting strategy.  PDTI is headquartered in Houston.

At Dec. 31, 2004, MedXlink Corp.'s balance sheet showed a $117,523
deficit, compared to a $115,396 stockholders' deficit at Sept. 30,
2004.


NATIONAL ENERGY: Tara Energy Agrees to Pay $750,000 Settlement
--------------------------------------------------------------
In accordance with the Procedures for Settlement of Trade
Contracts approved by the U.S. Bankruptcy Court for the District
of Maryland, NEGT Energy Trading Holdings Corporation and
NEGT Energy Trading - Power, LP, entered into a settlement
agreement and mutual release with Tara Energy.

Pursuant to the Settlement Agreement, Tara Energy will pay
$750,000 to the ET Debtors in full and final satisfaction of all
claims arising out a master power purchase and sale agreement
between ET Power and Tara Energy, dated August 30, 2002.  Each
party will release the other from any liabilities arising out of
the August 30 Sale Agreement.

Martin T. Fletcher, Esq., at Whiteford, Taylor & Preston, LLP, in
Baltimore, Maryland, notes that the Settlement Agreement is
advantageous for the ET Debtors.  The Agreement approximates the
maximum recovery that the ET Debtors 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)


NATIONAL ENERGY: Inks National Grid Companies Settlement Pact
-------------------------------------------------------------
USGen New England, Inc., asks the U.S. Bankruptcy Court for the
District of Maryland to approve its global settlement agreement
with the National Grid Companies:

    * New England Power Company,
    * the Narragansett Electric Company,
    * the Massachusetts Electric Company,
    * the Nantucket Electric Company,
    * Granite State Electric Company,
    * National Grid USA Service Company, Inc., and
    * National Grid USA

The Settlement Agreement removes a major obstacle to approval of
USGen's proposed sales of its fossil and hydroelectric generating
assets, and eliminates what could be protracted litigation in the
Court and before the Federal Energy Regulatory Commission with
respect to the Asset Sales.

John Lucian, Esq., at Blank Rome, LLP, in Baltimore, Maryland,
relates that in 1997, USGen Acquisition Corporation, now known as
USGen New England, Inc.; Narragansett Electric Company; and New
England Power Company were parties to an asset purchase agreement
wherein USGen will purchase, inter alia, substantially all of
NEP's non-nuclear generating assets -- fossil and hydroelectric
generating stations -- including:

    (a) certain related liabilities and obligations;

    (b) a portfolio of power contracts with independent power
        producers; and

    (c) supply obligations.

In September 2003, USGen sought to reject its Quebec
Interconnection Transfer Agreement with NEP.  The parties
thereafter entered into a Stipulation and Consent Order, which
provided, inter alia, for the rejection of the QITA.  The
stipulation also provided for the reservation of NEP's rights to
file a claim arising as a result of the rejection.

In September 2004, USGen filed motions to enter into asset sale
agreements with:

    (1) USG Services Company, LLC, First Massachusetts Land
        Company, LLC, and Dominion Energy New England, Inc.,
        relating to USGen's fossil fuel facilities.

    (2) USG Services Company, LLC, and TransCanada Hydro
        Northeast, Inc., for the sale of its hydroelectric
        generating facilities and related assets.

The National Grid Companies objected to the Asset Sales, stating
that:

    (a) the motions were improper sub rosa plans;

    (b) the motions were not the functional substitute for the
        adequate information that an approved disclosure statement
        would contain;

    (c) USGen's proposed assumption and assignment of certain
        executory contracts was improper; and

    (d) the motions made no provision for a determination by the
        FERC -- or another adjudicatory body with jurisdiction --
        that USGen's cessation of performance under its Asset
        Purchase Agreement and other related agreements was in the
        public interest.

In connection with the Fossil Sale Motion, USGen and Dominion
Energy New England, Inc., and certain affiliated companies filed
a joint application with the FERC pursuant to Section 203 of the
Federal Power Act for authorization to sell FERC jurisdictional
facilities associated with the fossil generating assets and the
transfer of the Proposed Assigned Fossil Agreements.

Dominion filed applications with the FERC for a determination
that certain Dominion affiliates are Exempt Wholesale Generators.
National Grid USA responded by filing motions to intervene in the
proceeding.

In October 2004, USGen and TransCanada Hydro Northeast, Inc.,
filed a joint application with the FERC under Section 203 of the
FPA to sell FERC jurisdictional facilities associated with the
hydroelectric generating assets.

TransCanada filed applications with the FERC for a determination
that TransCanada is an Exempt Wholesale Generator.  Additionally,
TransCanada and USGen filed a joint application for authorization
to transfer the licenses for the hydroelectric generating
facilities.

In October 2004, USGen filed a motion to extend its exclusive
right to file and solicit a plan of reorganization.  The National
Grid Companies also objected to that request.

                        National Grid Claims

NEP filed a proof of claim in USGen's Chapter 11 case seeking
$10,899,983 in damages, plus contingent and unliquidated
indemnity and other claims.  Additionally, Narragansett,
Massachusetts Electric, Nantucket Electric, Granite State
Electric, and National Grid USA Service each filed proofs of
claim against USGen.

According to Mr. Lucian, while USGen disputes the National Grid
Claims, the total amount of the claims could be as large as
$400,000,000.

                     Proposed Global Settlement

Rather than further litigate the issues in the Court and before
the FERC, as well as the merits of the National Grid Claims,
USGen and the National Grid Companies negotiated a global
settlement.

The salient terms of the Settlement Agreement and Release are:

    (a) The National Grid Companies will have:

        * an allowed prepetition unsecured claim equal to or not
          greater than $195,000,000 -- the National Grid Allowed
          Claim; and

        * an allowed administrative claim for $10,000,000 --
          the National Grid Administrative Claim;

        * any and all administrative claims, subject to certain
          exceptions -- the Preserved Claims;

    (b) Resolution of Certain Proceedings

        National Grid USA and USGen will jointly file with the
        FERC a conditional notice of withdrawal of their protests
        and answers filed in FERC Docket Nos. EC05-4-000,
        EG05-4-000, EG05-5-000, EG05-6-000 and EG05-7-000,
        pursuant to which final withdrawal will be effective as of
        approval date of the Settlement Agreement, only after and
        not later than two business days after each has occurred:

        * the Settlement Agreement has been executed;

        * a representative of the Official Committee of Unsecured
          Creditors indicates in writing that the Committee
          approves or will not oppose the Settlement Agreement;
          and

        * a representative of National Energy & Gas Transmission,
          Inc., the indirect, ultimate equity holder in USGen,
          indicates in writing that NEGT approves or will not
          oppose the Settlement Agreement;

    (c) The parties will work cooperatively and in good faith with
        each other and each of the buyers to facilitate an orderly
        and timely closing of the Asset Sales; and

    (d) Release of Claims

        The parties agree to a mutual release of claims and
        liabilities arising out of any claims the parties have or
        may have against each other arising before the date a
        confirmed reorganization plan in USGen's Chapter 11 case
        becomes effective, except for the Preserved Claims.

A full-text copy of the Global Settlement Agreement and Release
is available at no charge at:

    http://bankrupt.com/misc/USGen_Global_Settlement_Agreement_&_Release.pdf

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)


NORTEL NETWORKS: Gets New Waiver from Export Development Canada
---------------------------------------------------------------
Nortel Networks Corporation's (NYSE:NT)(TSX:NT) principal
operating subsidiary, Nortel Networks Limited, has obtained a new
waiver from Export Development Canada under the EDC performance-
related support facility of certain defaults related to the delay
by the Company and NNL in filing their respective 2003 Annual
Reports on Form 10-K and Q1, Q2 and Q3 2004 Quarterly Reports on
Form 10-Q, in each case with the U.S. Securities and Exchange
Commission, the trustees under the Company's and NNL's public debt
indentures and EDC.  The waiver also applies to certain additional
breaches under the EDC Support Facility relating to the delayed
filings and the planned restatements and revisions to NNL's prior
financial results.

The new waiver from EDC will remain in effect until the earlier of
certain events including:

   -- the date on which all of the Reports have been filed with
      the SEC; or

   -- February 15, 2005.

NNL's prior waiver from EDC, previously announced on Dec. 10,
2004, was set to expire on Jan. 15, 2005.

As previously announced, the Company has filed its 2003 Annual
Report on Form 10-K with the SEC and expects that NNL will shortly
file its 2003 Annual Report on Form 10-K with the SEC.  Further,
the Company expects that it and NNL will file their respective Q1
and Q2 2004 Quarterly Reports on Form 10-Q with the SEC before the
end of January 2005, and follow, as soon as practicable
thereafter, with the filing of their respective Q3 2004 Quarterly
Reports on Form 10-Q.  If the Company and NNL fail to file all of
the Reports by February 15, 2005, EDC will have the right, on such
date (absent a further waiver in relation to the delayed filings
and the Related Breaches), to terminate the EDC Support Facility,
exercise certain rights against collateral or require NNL to cash
collateralize all existing support.  If the Company and NNL fail
to file all of the Reports by Feb. 15, 2005, there can be no
assurance that NNL would receive any further waivers or any
extensions of the waiver beyond its scheduled expiry date.

In addition, the Related Breaches will continue beyond the filing
of the Reports.  Accordingly, EDC will have the right (absent a
further waiver of the Related Breaches) beginning on the earlier
of the date upon which the Reports are filed and February 15, 2005
to terminate or suspend the EDC Support Facility notwithstanding
the filing of the Reports.  While NNL intends to seek a permanent
waiver from EDC in connection with the Related Breaches, there can
be no assurance that NNL will receive a permanent waiver, or any
waiver or as to the terms of any such waiver.

The EDC Support Facility provides up to US$750 million in support,
all presently on an uncommitted basis.  The US$300 million
revolving small bond sub-facility of the EDC Support Facility will
not become committed support until all of the Reports are filed
with the SEC and NNL obtains a permanent waiver of the Related
Breaches.  As of January 13, 2005, there was approximately
US$291 million of outstanding support utilized under the EDC
Support Facility, approximately US$207 million of which was
outstanding under the small bond sub-facility.

                        About the Company

Nortel is a recognized leader in delivering communications
capabilities that enhance the human experience, ignite and power
global commerce, and secure and protect the world's most critical
information.  Serving both service provider and enterprise
customers, Nortel delivers innovative technology solutions
encompassing end-to-end broadband, Voice over IP, multimedia
services and applications, and wireless broadband designed to help
people solve the world's greatest challenges.  Nortel does
business in more than 150 countries.  For more information, visit
Nortel on the Web at http://www.nortel.com/

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 10, 2004,
Standard & Poor's Ratings Services placed its B-/Watch Developing
credit rating on Nortel Networks Lease Pass-Through Trust
certificates series 2001-1 on CreditWatch with negative
implications.

The rating on the pass-through trust certificates is dependent
upon the ratings assigned to Nortel Networks, Ltd., and ZC
Specialty Insurance, Co.  This CreditWatch revision follows the
Dec. 3, 2004, withdrawal of the ratings assigned to ZC Specialty
Insurance, Co. Previously, the rating had a CreditWatch developing
status due to the CreditWatch developing status on the rating
assigned to Nortel.

The pass-through trust certificates are collateralized by two
notes that are secured by five single-tenant, office/R&D buildings
that are leased to Nortel ('B-').  Nortel guarantees the payment
and performance of all obligations of the tenant under the leases.
The lease payments do not fully amortize the notes.  A surety bond
from ZC Specialty Insurance Co. insures the balloon amount.

The notes mature in August 2016, at which time a final principal
payment of $74.7 million is due.  If this amount is not repaid,
the indenture trustee can obtain payment from the surety, provides
certain conditions are met.

The notes will remain on CreditWatch while Standard & Poor's
examines the impact of the withdrawal of the ratings on ZC
Specialty Insurance Co.


OWENS CORNING: Asbestos Claims Estimation Trial Begins
------------------------------------------------------
Before hearing a word from the parties about their views on the
aggregate value of Owens Corning's asbestos-related personal
injury liabilities, District Court Judge Fullam ruled that all
pre-trial Motions In Limine and other motions asking the court to
restrict or limit testimony or evidence are denied.  Judge Fullam
makes it clear that his ruling is without prejudice to proper
objections being raised during the trial.

                          TRIAL BEGINS

About 100 showed up on Jan. 13, 2005, the first day of the Owens
Corning Estimation Proceeding.

                       OPENING STATEMENTS

             The Asbestos Constituencies Take the Lead

"The concept of estimation is not arcane and is expressly provided
for in the Bankruptcy Code and used by the bankruptcy courts to
address many different types of contingent and unliquidated
claims," the Official Committee of Asbestos Claimants and the
Legal Representative for Future Claimants told Judge Fullam.  And
just as bank, bond and trade debt is governed by applicable
contract law, personal injury and death claims are governed by the
applicable law of torts.

Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered,
representing the Official Committee of Asbestos Claimants,
promises to lay out a realistic and scientifically based estimate,
pursuant to methodologies adopted and approved in numerous other
bankruptcy proceedings, of the present value (as of October 5,
2000) of the Debtors' liabilities for present and future claims
for personal injury or death resulting from exposure to asbestos
and asbestos products for which the Debtors have responsibility.

Mr. Inselbuch started to describe the Banks' position in this
proceeding.  Judge Fullam asked him to stop.  Judge Fullam asked
everyone to please state their own position about an issue rather
than attempt to characterize or categorize their opponent's view.

The purpose of making this estimation is to figure out what
percentage of the value of reorganized Owens Corning must be
delivered to the asbestos constituencies, Mr. Inselbuch explained.
To do that, the asbestos constituencies intend to present the
Court with evidence about:

    * What the long-standing and well-developed historic
      resolution values have been for similar asbestos personal
      injury claims against the Debtors, which will include:

      -- what trends existed in these resolutions when Owens
         Corning filed for chapter 11 protection in 2000;

      -- a count of unresolved asbestos personal injury claims
         on hand at the Petition Date; and

      -- an epidemiological and statistical forecast of asbestos
         personal injury claims that will arise in the future.

   * The history of Owens Corning and Fibreboard in the tort
     system, showing that it defended itself vigorously and
     settled only cases that its counsel believed involved
     significant risk -- and did so at values that attempted to
     minimize costs.  The Plan Proponents will offer the
     testimony of the Debtors' former counsel:

         -- Clyde M. Leff,
         -- Stephen M. Snyder,
         -- Bruce G. Tucker, and
         -- Maura Abeln Smith.

   * The basic medical facts related to identification,
     diagnosis, and effects of asbestos related-diseases.  The
     asbestos constituencies will present:

         -- Dr. Laura Welch

   * The number and value, by disease distribution, of asbestos
     personal injury claims pending at the Petition Date and the
     estimated number of future asbestos personal injury claims
     that will be filed in the future, measured in accordance
     with the standards of the tort system and calculated by
     established and recognized methodologies that have been used
     in prior bankruptcies, as well as in other contexts.  The
     asbestos constituencies will present:

          -- Dr. Mark Peterson and
          -- Dr. Francine Rabinovitz

   * That the net present value of the estimated total future
     payments to resolve asbestos personal injury liabilities
     should be based on applying a risk-free rate of return, and
     the appropriate rates to use for that purpose, as well as
     for making inflation adjustments.  The asbestos
     constituencies' financial witnesses are:

          -- Loretto Tersigni and
          -- James Hass.

The asbestos constituencies offer this evidence in this legal
framework:

     I. Estimation: The Governing Legal Standard

        A. State law governs the validity and amount of a claim.

        B. Asbestos estimation must be based on tort system
           values.

        C. Estimation cannot properly be based on the recovery to
           which creditors might be limited out of insufficient
           assets in bankruptcy.

        D. Owens Corning's asbestos personal injury liabilities
           must be discounted using a risk free rate of return.

    II. The Bank Debt Holders' Bases for Reducing Owens Corning's
        Projected Asbestos Liabilities are Legally Invalid

        A. Estimation cannot properly be based on a Bank-created
           "Reformed" Tort System.

        B. Evidentiary requirements for product identification
           can be met by many methods other than the plaintiff's
           own testimony.

        C. Claims for asbestos-related injuries that the bank
           debt holders regard as "unimpaired" cannot properly be
           ignored in estimation.

        D. If "valid" asbestos personal injury claims were
           limited to those with virtually uncontestable evidence
           of medical impairment and exposure to Owens Corning
           products, the values assigned to claims could not be
           those applied to a far broader range of claims in the
           past.

Judge Fullam asked Mr. Inselbuch about his client's position
concerning punitive damage claims.  The Banks argue that punitive
damage claim amounts aren't recoverable in bankruptcy.  The Tort
Claimants argue that punitive damage awards are an integral part
of a claim's settlement value.

There is "no reason a claimants can't recover punitive damages in
a bankruptcy," Mr. Inselbuch responded.  First Sec. 726, which
subordinates those awards, doesn't apply in a chapter 11 case.
While the best interests test under Sec. 1129(a)(7) might be
impacted, that doesn't happen in Owens Corning's case.  The
parties generally agree that Owens Corning's assets could only be
sold at fire sale prices in the event of a chapter 7 liquidation
and nobody knows who'd buy them.

Judge Fullam expressed skepticism on this point.

A purchaser of Owens Corning's assets from a chapter 7 trustee,
Mr. Inselbuch continued, would obtain none of the benefits of a
524(g) trust and would be exposed to successor liability.  That is
the position all of the parties in every asbestos-related
bankruptcy case since Johns-Manville have taken.

Judge Fullam engaged Mr. Inselbuch in a discussion about all the
press concerning payments to unimpaired claimants.

"Impaired means the claimant can't climb the stairs or something?"
Judge Fullam queried.

"No," Mr. Inselbuch responded, "that's injury."  Impairment is a
1/0 ILO reading or lung capacity of 80% or less.  Many healthy
construction workers, Mr. Insulbuch related, used to have perfect
chest x-rays and lung capacity in excess of 100%.  They breathed
in asbestos fibers.  Their ILO readings are now 1/0 and their lung
capacity is less than 80%.  They continue to work; they are
unimpaired; they've been injured; they're entitled to compensation
for that injury.

Mr. Inselbuch commented about the large dollar amounts in Owens
Corning's cases.  Yes, Mr. Inselbuch says, the numbers are big --
because Owens Corning did a lot of damage when it manufactured,
sold and distributed its asbestos-containing Kaylo product.  Owens
Corning's liability is multiples of the liability faced by
Armstrong, Babcock & Wilcox, Eagle-Picher and other asbestos
defendants.

               The Debtors Take a Supporting Role

Roger E. Podesta, Esq., at Debevoise & Plimpton LLP, told Judge
Fullam that the Debtors are generally in accord with the factual
recitations and much of the argument advanced by the asbestos
constituencies.  Owens Corning thinks there's sufficient evidence
available to the Court at this juncture to permit a reasonable
estimate of present and future liability under Sec. 502(c) of the
Bankruptcy Code.

Mr. Podesta reminded Judge Fullam that the Debtors asked the Court
to estimate the present value of their asbestos liability on July
30, 2004.  This estimate is necessary to ultimately meet the
asbestos trust fund requirements under Sec. 524(g) of the
Bankruptcy Code and get their plan of reorganization approved
under Sec. 1129 of the Bankruptcy Code.

The Debtors intend to call three witnesses:

     (1) Clyde Leff -- an in-house lawyer at Owens Corning who
         served as Lead Counsel-Asbestos Litigation between 1996
         and 1998. During that time, he oversaw Owens Corning's
         defense of asbestos claims and participated in the
         development of the first National Settlement Program
         agreements;

     (2) Bruce Tucker -- served as one of Owens Corning's
         principal outside lawyers between 1979 and 1998, during
         which time he personally tried dozens of asbestos cases
         to verdicts and negotiated the settlement of many
         thousands of cases; and

     (3) Stephen Snyder -- represented Fibreboard as its National
         Counsel from 1979 through 2000, and represented Owens
         Coming from 1985 to 1988 as part of the Asbestos Claims
         Facility and then again after Fibreboard was acquired by
         Owens Corning in 1997 through 2000.

Together these individuals have approximately 50 years of
experience representing Owens Corning and Fibreboard in the tort
system and are fully conversant with all major strategy decisions
in defense of Owens Corning and Fibreboard over the last two
decades.

Owens Corning also intends to offer the deposition testimony of
Maura Smith, who served as Owens Corning' General Counsel between
1998 and 2003 and played a leading role in the development of the
National Settlement Program.

The Debtors intend to put evidence before the Court to make these
points:

     I. Owens Corning's Experience in the Tort System

        A. Owens Corning has an extensive settlement history.

        B. Owens Corning tried more cases to verdict than any
           other defendant.

        C. Following the bankruptcy of Johns Manville, Owens
           Corning became the No. 1 target defendant.

    II. Owens Corning's Pre-Petition Litigation Strategy

   III. Product Identification and Medical Standards in the
        Tort System

    IV. GAAP Financial Reserves and Bankruptcy Code Estimations
        are Very Different

Mr. Podesta made it clear that the Debtors are not advocating any
specific valuation.  The Debtors have a deal with a number of
parties.  The Debtors need a $16 billion minimum valuation to keep
that deal glued together.

Judge Fullam asked Mr. Podesta if there is any information
available about new claims against Owens Corning in the four years
it's been in bankruptcy.

"No," Mr. Podesta responded, reminding Judge Fullam that the
automatic stay under 11 U.S.C. Sec. 362 has prohibited the filing
of any new claims against the Debtors.

Judge Fullam asked Mr. Podesta if there is any information
available about what the Debtors were proposing to pay claimants
in the Georgine 23(b)(1)(B) Class Action Settlement rejected by
the U.S. Supreme Court.

"No," Mr. Podesta indicated; the parties never got to the point of
negotiating recoveries.

Judge Fullam asked Mr. Podesta if there is any information
available about what the Debtors thought they'd pay under the
National Settlement Program if they'd obtained near-100%
acceptance from the plaintiff's bar.

"No," Mr. Podesta responded.

                           The Banks

Richard A. Rothman, Esq. at Weil, Gotshal & Manges LLP, told Judge
Fullam that he is presiding over a landmark case in which the
Court's decision will set an important precedent regarding the
legal standard that governs estimation of any asbestos defendant-
debtor's asbestos-related liability.  The Banks tell Judge Fullam
that he will have to decide between moving forward or backward on
the road already taken by other federal courts, including the
Third Circuit, as well as state courts and legislatures, to
correct the problems in the history of asbestos litigation that
have driven over 70 companies into bankruptcy, shortchanged the
small fraction of asbestos claimants who have actually suffered
serious injury due to asbestos exposure, and constituted a massive
assault on our legal system.

The Banks tell Judge Fullam that the largest dispute in value
centers on all of the "nonmalignant claims" in which claimants
have no impairment -- 85% of all Tort Claimants.  The Plan
Proponents say that, as a matter of law, Judge Fullam is required
to give value to those claims by applying substantive state tort
law as has been done in every other asbestos-related bankruptcy
cases.  The Banks tells Judge Fullam that the asbestos
constituencies are wrong and he should see their case for what it
is: vituperative rhetoric, statistical jargon and charts, but no
supporting law.

The Banks outline the case they'll present to Judge Fullam this
way:

     I. THE FACTS

        A. Owens Corning's pre-petition asbestos history

           1. Owens Corning's litigation history

              a. Mass consolidations

              b. Forum selection

              c. Weak medical evidence and punitive damages

              d. Screening enterprises

           2. The National Settlement Program

              a. The Friedman Audits

           3. Significant post-petition developments

              a. The Friedman Report

              b. The Manville Trust

        B. The real world as it exists today: federal pleural
           registries, and state legislative and judicial
           reforms

    II. THE ASBESTOS CLAIMANTS' ESTIMATION IS CONTRARY TO
        WELL-ESTABLISHED PRINCIPLES OF FEDERAL LAW

        A. Overview of the Federal Bankruptcy Law Governing This
           Proceeding

           1. Federal Procedural Law Governs

           2. A federal bankruptcy court need not apply state law
              if doing so would result in the payment of
              illegitimate claims or frustrate the purposes of
              the bankruptcy

           3. The Court must take steps to ensure that only
              legitimate claims are allowed and paid

        B. The Plan Proponents' Position Is Contrary To The
           Governing Federal Law

   III. THE BANKS EXPERT MAKES APPROPRIATE ADJUSTMENTS, WHILE THE
        ACC'S AND FUTURES REPRESENTATIVE'S EXPERTS DO NOT

        A. The Parties' Estimation Techniques and Estimates

        B. Claiming Rates -- Propensity to Sue Must Be Adjusted
           For Unsustainable Claiming Rates During the NSP Years

           1. Epidemiological Models

           2. Use of NSP Base Period -- 1999-2000 Surge

           3. Projections of Nonmalignant Disease Claims

        C. Dismissal Rates

           1. Product Identification

           2. Medical Criteria for Future Claims Projections
              Must Be Applied Accurately

        D. Claim Values Must Be Adjusted

           1. Punitive Damages Are Not Allowable

           2. Unimpaired Claims Should be Valued at Zero.

        E. The Court Should Adopt CSFB'S Discount Rate, Which
           Reflects the Real World of Asbestos Trusts and Sound
           Economic Theory, And Reject the Plan Proponents'
           Attempt to Obtain a Windfall Through An Artificially
           Low Discount Rate

     V. THE PLAN PROPONENTS' PROPOSED ESTIMATION AND DISTRIBUTION
        PROCEDURES IGNORE THE PROCEDURAL SAFEGUARDS NECESSARY TO
        PROTECT AGAINST ILLEGITIMATE CLAIMS

        A. The Manville Trust and the NSP Are Case Studies For
           the Need for Screening Mechanisms

        B. Effective Screening Mechanisms Can Be Implemented

           1. The Distribution Process Should Establish and
              Enforce Adequate Medical Criteria

              a. Establishing Adequate Medical Criteria for
                 Impairment

              b. Minimum Threshold Standards for Proof of
                 Impairment

              c. The Need for an Adequate Review and Screening
                 Process

        C. Any Distribution Scheme Should Establish Minimum
           Criteria for Proof Of Exposure to Owens Corning's
           Products

The Banks believe it should already be clear to the Court that the
Asbestos Claimants have not attempted to meet the task set out by
the Court.  They have not provided the Court with an estimate of
the value of the legitimate present and future asbestos personal
injury claims -- and particularly the nonmalignant claims -- in
the real world in which those claims will now be resolved.
Instead, they have estimated only what Owens Corning would have
paid in a make believe world in which the company had never sought
protection in the federal bankruptcy system and nothing had
changed between then and now.

The Banks tell Judge Fullam they will demonstrate over the next
seven days that the world has changed dramatically since the
1990's, and is continuing to change by the day, as federal and
state courts, as well as legislatures and bankruptcy trusts, take
action to eliminate or curb the litigation tactics and state court
procedural practices that grossly inflated the value of
nonmalignant claims in the pre-bankruptcy era.  In the face of
these changes, the Banks contend there can be no serious question
that, while the pre-bankruptcy claims history may be used as
starting point to estimate the value of future claims, it must be
adjusted to take account of the changes that have occurred --
including the important fact that these claims will now be
resolved in the federal bankruptcy system under the direction of a
federal court.  There is also no question that, like other federal
courts, Judge Fullam can put in place procedures that will ensure
that only legitimate claims are paid -- and thereby deter the
filing of a flood of illegitimate claims in the process.

Why are asbestos claimants not determined or valued like
commercial creditors' claims, Judge Fullam queried?  Claims are
determined for commercial creditors as if no bankruptcy filing had
occurred and their treatment in the bankruptcy flows from what the
plan provides.  Why are tort claims determined or valued
differently?

Mr. Rothman responded by stressing that the Banks want to see a
"fair valuation of legitimate claims."

Mr. Rothman told Judge Fullam that the pivotal claims in Owens
Corning's cases are not the 10% layer of cancer claims.  The Banks
agree that these sick and dying people must be compensated.  The
pivotal claims are the 90% layer of specious claims that shouldn't
recover a dime.

Mr. Rothman gave Judge Fullam a preview of what the Banks'
witnesses are prepared to say about how the asbestos litigation
landscape has changed.  The most notable change occurred when the
Manville Trust altered its Trust Distribution Procedures and put
requirements for medical and product identification evidence in
place.  The number of new claim filings fell from 88,000 per year
to 11,000 per year.  The ratio of nonmalignant to malignant claims
fell from 8:1 to 3:1.  Recoveries by truly sick claimants rose
from 35% to 80%.

"When will I get to hear from the witnesses?" Judge Fullam asked.

Mr. Rothman wrapped up his opening statement.

Martin J. Bienenstock, Esq., at Weil, Gotshal & Manges LLP,
cautioned Judge Fullam to avoid being distracted by the asbestos
constituencies' threats that they won't support a plan valuing the
asbestos-related liability at anything less than $16 billion.  Mr.
Bienenstock doesn't believe the asbestos constituencies' scare
tactics.

                      The Five Bondholders

Kenneth Pasquale, Esq., at Stroock & Stroock & Lavan LLP,
representing the Five Bondholders holding more than 1/3 of Owens
Corning's bond debt, intend to convince the Court that the
Debtors' settlement history alone does not tell the true story of
Owens Corning's asbestos liabilities, and that additional
information is needed to make a credible estimation.  When
consideration is given to "claims" against Owens Corning that (i)
lack sufficient product identification and (ii) lack evidence of
any medically-cognizable injury caused by exposure to asbestos
(let alone caused by exposure to asbestos from an Owens Corning
product), the only reasonable result is that such claims should be
valued at zero, the Bondholders say.

                    Debtors' First Witness
                         Clyde Leff

Mr. Podesta called Clyde Leff to the witness stand.

Clyde Leff served as Owens Corning's Lead Counsel for Asbestos
Litigation between 1996 and 1998.  During that time, he oversaw
Owens Corning's defense of asbestos claims and participated in the
development of the first National Settlement Program agreements.

Virtually all of Owens Corning's asbestos liabilities arise from
its manufacture and sale of asbestos-containing Kaylo insulation,
Mr. Leff explained.  Owens Corning began distributing Kaylo
insulation manufactured by Owens Illinois in 1953.  Owens Corning
then purchased the Kaylo manufacturing business from Owens
Illinois in 1958.  Owens Corning continued manufacturing asbestos
containing Kaylo until late 1972, and sold it into 1973.

While most defendants in the asbestos litigation rarely took cases
to trial, Mr. Leff relates, Owens Corning was an active trial
defendant.  Between 1990 and 1997, Owens Corning went to verdict
in more than 1,800 cases, and incurred more than $633 million in
compensatory and punitive damage awards.

Mr. Leff provided a summary of the results of the trials in which
Owens Corning was a defendant between 1990 and 1997:

                                %age of      Average     Average
              Plaintiff Defense Defense    Plaintiff      of All
   Disease         Wins   Wins     Wins      Verdict    Verdicts
   -------    --------- ------- -------   ----------  ----------
Mesothelioma        204     68      25%   $1,976,856  $1,482,642
Lung Cancer          98    136      58%     $391,324    $163,888
Other Cancer         13     25      66%     $528,539    $180,816
All
Non-malignancies    575    689      55%     $320,278    $145,696
  -- Asbestosis     475    461      49%     $339,933    $172,509
  -- Pleural        100    228      70%     $226,915     $69,181

Thus, Owens Corning took some 1,264 non-malignancy cases to
verdict, including 328 pleural plaque cases which generally
involved unimpaired plaintiffs, and won 55% of the non-malignancy
cases (including 70% of the pleural cases).  But the average
verdict (including defense wins) in non-malignancy cases was
$145,696, and the average verdict for pleural cases alone
(including defense wins) was $69,181.

Mr. Leff indicates that Owens Corning's aggressive litigation
strategy ended when the company figured out that it would never be
able to pay the number of adverse verdicts that were piling up.
By 1998, Owens Corning was spending $250,000,000 annually
processing new claims, settling claims, and paying verdicts.

Owens Corning also tried other strategies to reduce its liability.
For example, in the course of negotiating certain Mississippi
settlements, Owens Corning discovered that pulmonary function
tests designed to provide proof of impairment appeared to have
been fraudulently prepared. After an investigation, Owens Corning
filed RICO lawsuits against the testing laboratories that had
generated the fraudulent test results in nearly 40,000 cases filed
in the mid-1990s.  At the same time, Owens Corning commissioned
its counsel to investigate whether other mass screeners were
fraudulently preparing pulmonary function tests, but was unable to
identify any comparable operations.

When it ultimately settled the underlying lawsuits, Owens Corning
refused to accept invalid pulmonary function tests but paid $1,000
per case anyway to settle the claims and obtain the releases.
Yes, Mr. Leff admitted, Owens Corning paid $1,000 per claim to
settle claims based on fraudulent PFTs.

Before making settlement payments in individual trial set cases or
in group settlements, Mr. Leff relates, Owens Corning required at
a minimum that a plaintiff provide:

     (i) proof of exposure to asbestos containing Kaylo, and

    (ii) a medical diagnosis of an asbestos-related disease
         (in each case sufficient to survive summary judgment
         in the particular jurisdiction), and

   (iii) a satisfactory release.

Mr. Leff was also personally involved in many large settlements.
In substantially all large group settlements, the agreement set
forth in detail the required proof of medical and product
identification evidence.

Mr. Leff shared examples of a number of pre- and post-NSP
settlement agreements demonstrating the type of product
identification and medical evidence required in Owens Corning's
settlements.

In terms of the value of cases that were settled, the single most
important factor was the severity of the claimed disease.
Mesothelioma cases were the most valuable not only because it is a
very painful and inevitably fatal disease, but also because
asbestos is the only known cause of mesothelioma.  Lung cancer
cases were settled for significantly less because of the existence
of other causes, particularly smoking.  Cases involving other
types of cancer were valued even less than lung cancer cases
because there was a much weaker epidemiological link between
asbestos exposure and other cancers.

The value of nonmalignant disease claims varied significantly
depending on the severity of the disease, depending on whether a
plaintiff was functionally impaired as a result of the disease.
Impairment, particularly for settlement purposes, was typically
measured based on the results of pulmonary function tests.
Impaired individuals typically received higher payments than those
who could not demonstrate impairment. But no jurisdiction requires
proof of a particular level of performance on pulmonary function
tests to recover for an asbestos claim.

Owens Corning attempted to negotiate a global class action to
resolve its liabilities.  Those negotiations collapsed when the
Third Circuit, and then the Supreme Court, rejected CCR's class
action settlement as inconsistent with the requirements of
Fed.R.Civ.P. 23.

By the late 1990s, Owens Corning recognized that it could no
longer maintain its aggressive trial strategy.  It faced a
substantial, growing backlog of claims, a massive backlog of
unpaid verdicts, which were approaching the limits of Owens
Corning's bonding capacity, and numerous trial settings around the
country every month of the year. Owens Corning needed a way to get
off the trial calendars. These conditions led to the development
of the National Settlement Program.

The NSP, which began in 1998, was an effort to settle, without
litigation, and to better manage Owens Corning and Fibreboard's
asbestos liabilities.  The NSP eventually involved over 100
agreements with 120 plaintiffs' firms across the country, which
resolved not only approximately 90% of all pending cases against
Owens Corning and Fibreboard, but established administrative
procedures for resolving future claims represented by these firms.

Under these NSP agreements, the plaintiff firm agreed to strongly
recommend the proposed settlement to their present and future
clients, but each client retained the individual right to accept
the settlement offer.

This provision where a plaintiff's lawyer agreed to steer future
claimants into the NSP captured Judge Fullam's attention.

Each agreement included detailed requirements setting forth the
type of medical and product exposure information required before
Owens Corning or Fibreboard would approve a particular claim for
payment, Mr. Leff explained, getting Judge Fullam back on track.
An important feature of the NSP agreements, Mr. Leff continued, is
that they included medical impairment criteria largely derived
from the Georgine-CCR settlement to differentiate between impaired
and unimpaired nonmalignant cases.  Typically, the NSP agreements
included provisions that future nonmalignant claims would only be
paid if they met the impairment criteria set forth in the
agreement, and approximately two dozen of them drew sharp
distinctions in settlement values between impaired and unimpaired
nonmalignancies even for pending cases.

The NSP also served to get Owens Corning off the trial dockets,
and into the case processing side of a critical mass of
plaintiffs' law firms.

How did Owens Corning's settlement programs and procedures compare
to state tort law requirements under which a plaintiff could
obtain a jury trial Mr. Podesta asked Mr. Leff?

Owens Corning's criteria were more rigid, Mr. Leff responded.
Plaintiffs in every state were allowed to present their claims to
a jury even if they fall short of meeting Owens Corning's NSP and
other impairment criteria.

In the tort system, Owens Corning (and other asbestos defendants)
tried to address the problem of unimpaired cases by taking the
medical weakness of the claims into account during settlement
negotiations.

Judge Fullam asked Mr. Leff if he knew what the Debtors were
proposing to pay claimants in the Georgine 23(b)(1)(B) Class
Action Settlement rejected by the U.S. Supreme Court.

"No," Mr. Leff indicated; the parties never got to the point of
negotiating recoveries.

Judge Fullam asked Mr. Leff if he knew what the Debtors thought
they'd pay under the National Settlement Program if they'd
obtained near-100% acceptance from the plaintiff's bar.

"No," Mr. Leff indicated.

Ralph I. Miller, Esq., at Weil, Gotshal & Manges LLP, asked Mr.
Leff on cross-examination if consolidation of cases tended to push
settlement values upward.

Mr. Leff gave a yes-and-no response.  Sharing his experience
settling the Kanawha claims in West Virginia, Mr. Leff relates
that Owens Corning faced a significant cash-flow challenge as a
result of that settlement but that the average per-claim
settlement amount was lower than average.

                   Debtors' Second Witness
                         Bruce Tucker

Mr. Podesta called Bruce Tucker to the witness stand.

Mr. Tucker served as one of Owens Corning's principal outside
lawyers between 1979 and 1998, during which time he personally
tried dozens of asbestos cases to verdicts and negotiated the
settlement of many thousands of cases.

Mr. Tucker testified that he dealt with scores of plaintiffs' law
firms during the 1990s, and every single one of them regarded
Owens Corning as their principal target.  This resulted from the
combination of four factors:

     (1) Kaylo was a ubiquitous product. High temperature
         insulation was used virtually everywhere there were
         steam or hot water pipes. As shown by thousands of
         deposition transcripts over a 25 year period, Kaylo was
         widely used in such facilities as shipyards, paper
         mills, refineries, glass factories, power plants, steel
         mills, and auto plants. Moreover, Kaylo had a large
         share of the high temperature insulation market, second
         only to Johns Manville. For example, throughout the
         1960s, Owens Corning's market share varied between 20%
         and 40% of the total sales of high temperature
         insulation each year.

     (2) Kaylo, like other pipe and block insulation products,
         but unlike many other asbestos products such as floor
         tiles or gaskets, was friable and very dusty.
         Plaintiffs' experts routinely testified that the cutting
         and handling of Kaylo generated fiber emissions that
         regularly exceeded even the pre-OSHA ACGIH threshold
         limit values of 5 million particles per cubic foot of
         air.  Workers also testified that working with Kaylo
         generated a snow storm of fibers.

     (3) Owens Corning had a damaging set of corporate documents.
         Owens Corning was perceived by plaintiffs' attorneys as
         having one of the worst sets of corporate conduct
         documents, perhaps second only to the infamous Johns
         Manville and Raymark documents. These corporate
         documents, in the hands of skilled plaintiffs' counsel,
         often convinced juries that Owens Corning was aware of
         the health hazards of asbestos as far back as the early
         1940s and took no effective measures to warn workers.
         Not until 1966 or later, plaintiffs argued, did Owens
         Corning belatedly place an inadequate label on the
         packaging of Kaylo. As to other defendants, plaintiffs
         typically called experts to testify that based on the
         medical literature at the time of the plaintiffs'
         exposure, the defendant should have known of the dangers
         of asbestos. But in Owens Corning's case, because the
         corporate conduct documents were thought to be so
         damaging, plaintiffs' counsel often dispensed with
         expert testimony about the state of the art (which often
         resulted in concessions on cross-examination) and
         instead simply tried to prove Owens Corning had actual
         knowledge of the risks from its own documents and
         deposition testimony.

     (4) Owens Corning was a deep pocket. Plaintiffs viewed Owens
         Coming as a large and financially successful company
         that could afford to continue paying substantial sums
         for asbestos cases. In addition, Owens Corning for many
         years had substantial insurance resources (now nearly
         exhausted) to cover asbestos cases.

As a result of these factors, Owens Corning was the prime target
in the asbestos litigation.

On the second day of trial, Mr. Tucker related that Owens Corning
took many asbestos claims to trial and, if a claim survived
summary judgment, the company generally tried to settle.
Typically, Owens Corning required the claimants to provide the
Company with some type of proof of exposure to an Owens Corning
product over an extended period of time.  This proof came from a
variety of sources:

     * the Claimants' testimony and recollections;
     * co-workers' testimony, depositions and affidavits;
     * other workers' testimony and recollections;
     * sales records; and
     * job specifications, contracts and work orders.

Mr. Tucker indicated that Owens Corning created an elaborate
deposition database which it used to cross-reference statements
like "I remember Bob standing next to me when he was cutting Kaylo
and there were clouds of dust everywhere."

Mr. Tucker related that he spearheaded Owens Corning's so-called
Co-Defendant Project.  That project gathered together as much
product information and data as the company could find about other
asbestos defendants.  That information was used in attempts to
push Owens Corning's percentage liability on any particular claim
as low as possible.

"I assume you shared that information with the plaintiffs' bar?"
Judge Fullam asked.

"Yes," Mr. Tucker answered, explaining that the goal was to
persuade claimants that Owens Corning wasn't a significant player.

Mr. Podesta asked Mr. Tucker whether he was involved in
negotiating settlements of mass consolidations.

Mr. Tucker confirmed that he was.  Mr. Tucker believes that mass
consolidation settlements tended to lower per-claim settlement
amounts, but they presented the company with cash flow challenges.

"How did Owens Corning deal with punitive damage claims in those
mass consolidation settlement negotiations?" Mr. Podesta asked.

"We ignored punitive damage claims in settlement talks," Mr.
Tucker answered.  Plaintiffs' lawyers wanted to talk about them
and Owens Corning wouldn't.  The Company pointed to Judge Moss'
administrative ordered entered in Pennsylvania cases that severed
and deferred consideration of punitive damage claims.  Most
plaintiffs' lawyers were willing to agree to focus solely on
compensatory damages.

Mr. Podesta asked Mr. Tucker about Owens Corning's participation
in the Asbestos Claims Facility and its market share liability in
the facility.

Mr. Tucker related Owens Corning was a founding member of the ACF.
Owens Corning's liability was around 20%.  Armstrong's liability,
by contrast, was 5%.

Mr. Tucker related that he recalled Babcock & Wilcox as another
asbestos defendant.  Babcock, Mr. Tucker explained, was a non-
manufacturer and one of Owens Corning's customers.  Babcock's
asbestos-related exposure was lower than Owens Corning's by orders
of magnitude.  Mr. Tucker recalls that Babcock paid a flat $300
per claim, regardless of the claim's validity.  Mr. Tucker recalls
that Babcock tried one case to a verdict -- a $2 million verdict
against the company.

Mr. Tucker remembers that Dresser was another non-manufacturer
asbestos defendant.  Dresser's sin was buying Harbison-Walker.
Mr. Tucker recalls that Dresser had very limited exposure in the
Southwest region of the United States and that Dresser wasn't a
prime litigation target.

On cross-examination, Ralph I. Miller, Esq., at Weil, Gotshal &
Manges LLP, asked Mr. Tucker if he is familiar with Evidence Rule
408.

"I am," Mr. Tucker said.  "Typically, one party offers a document
into evidence during a trial.  The other objects saying that the
prejudice of whatever the document says outweighs its probative
value.  The offeror says if the content weren't prejudicial, it
wouldn't be offered."

The courtroom erupted in laughter.

"Did Owens Corning ever succeed in having the corporate conduct
documents excluded from a trial under Rule 408?" Mr. Miller asked.

"If that ever happened, the judge should be impeached," Judge
Fullam interjected.

Nobody laughed.  Mr. Tucker didn't answer.  Mr. Miller moved on.

Did the number of "true asbestosis" or "true asbestotic" claims
decrease over time, Mr. Miller asked?

"Yes," Mr. Tucker responded.

"What's the situation now?" Judge Fullam asked Mr. Tucker.

Mr. Tucker indicated he can only speak about the period from 1970
to 1989.  During that period, Mr. Tucker said, Owens Corning saw
fewer and fewer x-rays over time with 3/3, 3/2, 2/2 and 2/1
readings, while more 1/0 ILO readings appeared.

                    Debtors' Third Witness
                       Steven M. Snyder

Mary Beth Hogan, Esq., at Debevoise & Plimpton LLP, representing
the Debtors, called Steven M. Snyder to the witness stand.

Mr. Snyder represented Fibreboard as its National Counsel from
1979 through 2000, and represented Owens Corning from 1985 to 1988
as part of the Asbestos Claims Facility and then again after
Fibreboard was acquired by Owens Corning in 1997 through 2000.

Fibreboard was an initial founding member of the ACF.
Fibreboard's initially paid about 12% of ACF settlements.  That
decreased to about 10% over time.

Mr. Snyder explains that Fibreboard and Owens Corning were termed
"high-dose defendants," meaning that their products and workplaces
provided people with the full range of opportunities for exposure
and a broad range of disease claims.  Fibreboard and Owens Corning
even face liability on account of bystander claims, Mr. Snyder
related.

To settle a claim, Fibreboard required every claimant to allege
some asbestos-related disease and demonstrate exposure to a
Fibreboard product in a sufficient amount over a sufficient amount
of time to cause an injury.  The threshold was very low.
Fibreboard's PAPCO product (almost identical to Kaylo) was a very
bad, very dusty product.

Mr. Snyder stepped Judge Fullam through the history of the Ahern
Rule 23(b)(1)(B) class action settlement which fell apart in 1999
when the U.S. Supreme Court rejected the Georgine settlement.

"Do you recall any per-case figures from that settlement?" Judge
Fullam asked Mr. Tucker.

"I had intimate knowledge of it in 1993," Mr. Snyder quipped.
Pressured by Judge Fullam to relate anything he remembers, Mr.
Snyder indicated that he thinks he recalls an $11,000 to $12,000
average claim settlement amount.  He distinctly remembers a
$500,000 cap on non-malignant claims, because that was the limit
of available insurance proceeds.

Elihu Inselbuch, Esq., representing the Asbestos Claimants'
Committee asked Mr. Snyder who was principally involved in the
Ahern class action settlement talks.  Mr. Snyder confirmed that
the negotiations were primarily among representatives of
Fibreboard's insurers and the plaintiffs' lawyers.

Mr. Snyder stepped Judge Fullam through the origins and operations
of the NSP.  "For Fibreboard, the NSP was a backup plan if the
class action settlement failed," Mr. Snyder said, "and for Owens
Corning, the NSP was a necessity because its litigation strategy
had backfired."  The NSP offered plaintiffs "one stop shopping,"
Mr. Snyder quipped.  Through Integrex, the NSP started in 1999,
made a few payments, entered into some settlements, detected and
investigated some suspected fraud, and stopped work when the
Debtors filed for chapter 11 protection.

Ralph I. Miller, Esq., at Weil, Gotshal & Manges LLP, asked Mr.
Snyder who the asbestos liability experts were in the 23(b)(1)(B)
Proceeding.

"Drs. Thomas Vasquez and Mark Peterson," Mr. Snyder replied.

                Asbestos Claimants' First Witness
                           Maura Smith

Nathan D. Finch, Esq., at Caplin & Drysdale, Chartered,
representing the Official Committee of Asbestos Claimants, offered
designations of the deposition of Maura Smith, who served as Owens
Corning' General Counsel between 1998 and 2003 and played a
leading role in the development of the National Settlement
Program, into evidence.

Ralph I. Miller, Esq., at Weil, Gotshal & Manges LLP, representing
the Banks, indicated that his clients have a small number of
counter-designations, and don't think many of the Committee's
designations are necessary.

"I'll probably read the entire transcript," Judge Fullam said.

                Asbestos Claimants' Medical Witness
                       Dr. Laura Stewart Welch

Nathan D. Finch, Esq., at Caplin & Drysdale, Chartered,
representing the Official Committee of Asbestos Claimants, called
Dr. Laura Stewart Welch to the stand.

Dr. Welch is a physician, board certified in internal medicine and
occupational medicine, licensed to practice in the District of
Columbia and in Maryland.  For many years she's had an active
medical practice and treated many workers with asbestos-related
disorders.  Dr. Welch is currently medical director for The Center
To Protect Workers Rights, a research institute affiliated with
the Building and Construction Trades department of the AFL-CIO.
She is the author of over 50 peer-reviewed publications and
technical reports in the field of occupational and environmental
medicine, and is currently an investigator on six research
projects in the field.  She's served as a consultant to many
federal agencies, including OSHA, NIOSH, CDC and the NIH.  Dr.
Welch has a special interest and experience in health and safety
in the construction industry.

Dr. Welch has worked with several union-management committees on
health and safety issues, including Boeing-United Auto Workers,
and Rail Management and Rail Labor for the US railroad industry.
Since 1987 she's worked with the Sheet Metal Occupational Health
Institute (SMOHIT), a labor-management trust for the unionized
segment of the sheet metal industry.  SMOHIT has sponsored a
medical examination program for sheet metal workers in the United
States and Canada, to detect occupational lung disease and
asbestos-related disease in particular.  She's published several
papers describing the findings of asbestos-related disease in this
group of construction workers, and is now looking at changes in
patterns of disease over time in order to project disease rates
into the future.

Dr. Welch is intimately involved in the current FAIR Act
negotiations.

Dr. Welch is convinced that exposure to asbestos is the only cause
of mesothelioma.  There is no other way to contract that deadly
form of lung cancer.

There are several medical diseases that occur as a result of
asbestos exposure, Dr. Welch explained.  The ones of greatest
concern and importance are pleural plaques and thickening;
asbestosis; lung cancer; colon, laryngeal, pharyngeal cancer; and
mesothelioma.  For many workers, these diseases are disabling or
fatal.  For each disease there is a standard set of tests, and
generally accepted criteria, for diagnosis.

   * Pleural Plaques and Thickening

Pleural plaques are also called pleural fibrosis, pleural
thickening, and pleural asbestosis.  Most people with heavy
exposure to asbestos develop pleural abnormalities.  The pleura is
a thin lining that surrounds the lung.  Asbestos fibers breathed
into the lung are transported to the outside of the lung and cause
a scar to form in the pleural lining.  When these scars reach a
certain size they are visible on chest x-ray as a plaque.

Most of these plaques alone do not cause disability, but they do
tell us that significant exposure has occurred, and that other
asbestos related diseases may be present.  However, some types of
plaques can cause loss of lung function.  Scars that involve the
costophrenic angle, the angle between the base of the lung and the
diaphragm, can cause loss of lung function, as can extensive
plaques on both sides of the lung.

   * Pulmonary Asbestosis

Parenchymal asbestosis is a scar formation in the substance of the
lung itself.  These scars can interfere with lung function, for
they block the transport of oxygen from the air in the lungs into
the blood vessels that travel through the lungs.  Oxygen can only
cross the membranes of the lung if they are thin; asbestosis
causes them to thicken.  As a general rule the greater the
exposure the more the disease, i.e., there is a dose-response
relationship between exposure and disease.  However, some people
seem to form scars more readily and so we see a variety of disease
from the same level of exposure.

These scars are visible on x-ray in most cases but certainly not
all cases.  High resolution CT scan of the chest can find disease
not seen on a plain chest x-ray, and is becoming an important
component of the standard practice for the diagnosis of
asbestosis.

The International Labor Organization developed a way of grading
chest x-rays for dust diseases of the lung.  The most recent
version is the 1980 Classification of the Radiographic Appearance
of Pneumoconioses (dust diseases of the lung).  This system is
accepted around the world.  It provides a standard notation, so
that if one reader calls a film a "1/1" another reader will know
what the first reader is referring to.  The classification uses a
12-point scale to define the degree, or severity, of increased
lung markings.  Classification of pleural changes (involvement of
the membrane lining the chest wall and the lung) uses a separate
scale, with specific notations made for side of the chest, whether
or not the plaques contain calcium deposits, and the specific
type, length, and width of the thickening of the pleura.

This 12-point scale runs from 0/- to 3/+; a "0" film is normal and
a "3" film is the most severe scarring.  Each reading on the scale
is characterized by a number between 0 and 3, and a second number,
separated by "/".  The first number, preceding the "/", is the
final number assigned to that film by that reader.  The second
number, following the "/", is a qualifier.  The numbers 0, 1, 2,
and 3 are the main categories.  An x-ray read as a category 1 film
might be described as 1/0, 1/1, or 1/ 2.  When the reader uses
1/1, he is rating the film as a 1, and only considered it as a 1
film.  If he uses 1/0, he is saying is rating the film as a "1",
but considered calling it a "0" film before deciding it was
category 1.  Finally, when the reader uses 1/2, he is saying he is
rating the film as a "1", but did consider calling it a "2" film.
In clinical practice, any category "1" film is abnormal; therefore
a 1/0 film is consistent with asbestosis.

Even though the ILO system was designed to standardize reading x-
rays for asbestosis, studies using the classification in asbestos
exposed workers have found readers often disagree about
classification of the same x-rays.  Using the classification is
somewhat of an art.  Body size, weight, position of the person
during the x-ray, and x-ray technique affect the amount of
scarring that is visible on an x-ray.  If an x-ray is less than
perfect, one reader may think he can be sure scarring is present,
while another cannot be sure and grades the film with a lower
score for scarring.

The "best" readers agree 80% of the time with each other; 20% of
the time they assign a different score to the same x-ray.  If the
scarring is extensive, a difference of one grade on the scale is
not important.  But if the x-ray shows less extensive scarring, a
difference of one grade can be the difference between making
diagnosis of asbestosis or deciding asbestosis is not present. For
this reason experts agree that the x-ray alone should not be used
to make a diagnosis of asbestosis; the examining physician should
use the occupational and medical history, results of pulmonary
function testing, and other medical data to reach a diagnosis.
Experts also agree that asbestosis can be present in the lung even
though the x-ray is normal using the ILO classification system.

Dr. Welch related that she attempted at one point to obtain
certification as a so-called B-reader.  She failed the NIOSH-
administered test.

Dr. Welch relates that high resolution computed tomography is now
widely accepted as a diagnostic tool for asbestosis and asbestos-
related pleural scarring.  HRCT is an excellent technique for
diagnosis of asbestosis and asbestos-related plaque.  Recent
studies show that readers using a scoring index were more accurate
and reliable in the diagnosis of asbestosis that when using plain
chest x-rays.  This study concluded that "the examined HRCT
scoring method proved to be a simple, reliable, and reproducible
method for classifying lung fibrosis and diagnosing asbestosis
also in large populations with occupational disease, and it would
be possible to use it as a part of an international
classification".  Expert consensus supports this conclusion.

Disease from asbestos is also detected on pulmonary function
testing, and PFTs are used to quantity the level of lung
impairment due to asbestosis.  Asbestosis makes the lung stiffer
and smaller, so the volume of air in the lungs is decreased.
Oxygen transport as measured by the diffusion capacity is also
decreased.  Abnormalities are measured using spirometry, lung
volumes, and gas exchange testing.  Spirometry is reliable and
reproducible when performed according to the specifications set by
the American Thoracic Society.  Determination of lung volumes can
be done by the gas dilution method or by body plethysmography;
both are standard measures and also are reliable and reproducible.
The ATS also sets standards for diffusion capacity, which ensure
uniformity among laboratories and reproducibility.

The downside to HRCT is that it's costly, Dr. Welch explains.

Asbestosis can affect each of these tests without necessarily
showing an abnormality in the other two.  Spirometry and total
lung capacity both measure lung volume, but one may be abnormal
while the second remains normal.  The diffusion capacity measures
a decrease in oxygen exchange in the lung, and so is measuring a
different function of the lung than lung volumes.  Asbestosis can
just as easily be manifest with a decreased lung volume or a
decrease in gas exchange; neither is a better, more sensitive or
more accurate test, and both types of tests must be used in any
set of diagnostic criteria.  The diffusion capacity has been shown
to correlate with the severity of fibrosis found on pathologic
examination of the lung, and a reduction in diffusion capacity can
precede x-ray changes.

The changes in pulmonary function at times can be subtle, and test
results should be interpreted by someone with experience in
asbestos related diseases.  Pulmonary exercise testing can be used
to clarify subtle abnormalities, and any compensation system must
allow the examining physician to submit a medical report and
rationale based on accepted medical tests.  Because the diagnosis
of asbestosis or any other asbestos-related disease can be made
with a range of medical tests, it is essential that any
compensation system include a medical panel to review cases that
do not meet the most common diagnostic criteria.  As just one
example of a study that supports the need for a medical panel,
Kipen reported that 18% of insulators who had asbestosis found on
pathological examination the lung had a normal chest x-ray.  If we
were to require a 1/0 film in all cases of asbestosis, these
workers would be excluded. Pathological examination is not
required in the absence of x-ray abnormalities; a combination of
CT scan and exercise testing can reasonably approximate the
specificity as tissue examination.

Once this scar formation takes place it is irreversible.  It gets
worse in some cases, even after exposure stops.  Factors that are
associated with worsening scarring include the severity of disease
(the more the scarring, the more likely it is to get worse), and
the amount and intensity of exposure to asbestos. Because of the
damage to the lungs a person with asbestosis is at increased risk
of lung infections and so should get regular medical care and
influenza vaccines.

   * Determination of Impairment

Lung function can be measured accurately and reliably with
pulmonary function testing.  The American Medical Association has
developed guidelines for the evaluation of impairment from many
diseases including lung disease.  The AMA Guidelines have been
incorporated into compensation systems in states, and are widely
used by physicians.  The diagnosis of asbestosis depends in part
on characteristic findings on pathology, chest x-ray or CT scan,
but impairment must be measured with pulmonary function testing.

The AMA Guide states that each worker should undergo spirometry
and DLCO as part of the evaluation of impairment, and exercise
testing can add additional information if needed.  Using a
combination of forced vital capacity (FVC), forced expiratory
volume in one second (FEV1), DLCO, and oxygen consumption on
exercise testing (VO2max) the patient is placed into one of four
levels:

    (1) the first level under the AMA has no impairment,

    (2) the second level is between the lower limits of normal
        lung function and 60% of normal;

    (3) the third level is less than 60% and more than 50% of
        normal lung function;

    (4) the most severe level is a loss of more than 50% loss of
        lung function.

The illustration in the AMA Guide for the second level is a good
example to use here:

     Fifty four-year-old retired power plant mechanic with a
     history of asbestos exposure from age 18-37.  He is short of
     breath when walking on level ground with other people his
     own age.  His chest x-ray shows asbestos-related pleural
     changes, but no parenchymal asbestosis.  His FVC is 64% of
     predicted, his FEV1/FVC ratio is 81%, and his DLCO is 78%.

This man has asbestos related disease.  He has lung impairment
significant enough to make him short of breath with normal
walking; in my experience, this degree of impairment would make
him unable to continue in a physically demanding job.

At the highest level using the AMA Guides, where the worker has
lost more than 50% of lung function, the worker would be unable to
perform activities of daily living, such getting dressed, taking a
shower, cooking dinner, or any minimal work around the house.

Not all workers with asbestosis will fit the specific criteria set
by legislation; there must be a panel of physicians to review
medical exceptions.  All claimants with significant illness due to
asbestos exposure will not be able to meet the eligibility
criteria for the compensation categories in any program.  Some may
have died before the required testing could be completed. Others
may have medical conditions that obscure or complicate the
interpretation of the required testing.  Rather than try to
establish diagnostic criteria for each possible set of findings, a
more efficient approach would be to establish a medical panel to
review and reach determinations on these cases.

One example of a case that should be reviewed in this way is a
worker who has demonstrable impairment but still has test results
that are in the normal population range.  Comparing an
individual's results on spirometry, lung volumes and diffusion to
the normal range for the population is how we generally determine
impairment.  In some cases we know the person's pre-disease lung
function, and so can compare current testing to his own normal
tests from the past.  This comparison allows much better precision
in estimating impairment.  The AMA Guides explicitly state that
"in individuals where the pre-injury or pre-disease values differ
from the population listed values, the examiner may depart from
the population listed normal values for determining an impairment
rating. . . ."

   * Determining That Impairment on PFTs Is Caused By Asbestos

Asbestos scarring of the lung primarily causes a reduction in lung
volume, leading to a reduction in FVC and total lung capacity on
pulmonary testing (restrictive disease).  Asbestosis also causes
reduction in diffusion capacity.  Smoking causes a reduction in
air flow out of the lung (obstructive disease), and causes an
increase in lung volume.  Since the pattern of injury is
different, Dr. Welch explains that medical criteria that
differentiate asbestos-related diseases from smoking-related
diseases.  The ratio referred to as the FEV1/FVC ratio serves as a
measure of the amount of obstructive lung disease present, and is
an objective test that can be incorporated into compensation
criteria.  Workers can have both diseases, and those workers
should be compensated for the asbestos-related disease they do
have.

   * Lung Cancer and Respiratory Cancers

All major types of lung cancer are caused by asbestos.  Lung
cancer is incurable in 90% of cases at the time of diagnosis, and
these people usually die within a year.  Numerous studies show
that there is a dose-response relationship between exposure to
asbestos and the risk of lung cancer, with increasing exposure
leading to increasing risk of disease.  Workers with asbestosis
have a higher risk than other exposed workers, but the asbestosis
may simply be a surrogate measure of exposure, for significant
asbestos exposure is required to cause asbestosis. Asbestosis is
not a necessary intermediary for development of asbestos related
lung cancer.  Workers with pleural plaque do not appear to be at
higher risk for lung cancer than their co-workers with similar
exposure who did not develop plaque.  Pleural plaque is a
convenient marker of prior exposure to asbestos, and so has been
used as a surrogate for significant occupational exposure in
bankruptcy settlement agreements, but the risk of lung cancer is
not restricted to workers with pleural plaques.

The Helsinki Criteria establish an exposure level of 25 fiber-
years, or the equivalent exposure using an occupational history,
as a level of exposure that significantly increases the risk of
lung cancer.  Several European countries have established this or
a similar level of exposure as the criterion to be used for
compensation of a lung cancer in an asbestos-exposed worker.

Smoking and asbestos act in concert to cause lung cancer, each
multiplying the risk conferred by the other.  In a large study of
asbestos insulation workers in North America, non-smoking asbestos
workers were five times more likely to die from lung cancer,
smokers not exposed to asbestos were approximately 10 times more
likely to die from lung cancer, and asbestos workers who smoked
were more than fifty times more likely to die from lung cancer.
Asbestos workers who stopped smoking demonstrated a sharp decrease
in lung cancer mortality

Although smoking does increase the risk of lung cancer, this
effect does not detract from the risk of lung cancer attributable
to asbestos exposures.  Any compensation system must affirm that
when a worker has significant exposure to asbestos he is eligible
for compensation for lung cancer.

The risk of cancer of the pharynx and larynx is also increased by
asbestos exposure.  Smoking also contributes to the development of
these diseases, and the risk from asbestos is thought to multiply
the risk from smoking as it does for lung cancer.

   * Colon Cancer and Gastrointestinal Cancer

There is also a higher incidence of cancers of the
gastrointestinal tract among asbestos workers.  In people exposed
to asbestos for more than 20 years, the rate of colon cancer is
increased by a factor of 2.  It is important for all asbestos-
exposed workers to have regular check ups with their doctors, to
look for early signs of colon cancer.

   * Mesothelioma

Mesothelioma is a rare cancer of the pleura, the lining of the
lung, and the peritoneum, the lining of the abdomen, that occurs
in persons exposed to asbestos.  Mesothelioma can result from a
limited exposure to asbestos.  All of mesotheliomas in this
country are caused by past exposure to asbestos.  This cancer is
almost impossible to treat and is usually fatal within 18 months
of diagnosis.

"Is asbestos a vanished disease?" Mr. Finch asked Dr. Welch.

"No," Dr. Welch responded.

Dr. Welch explained that Drs. Nicholson, Perkel and Selikoff set
the standard on this subject two decades ago at the Mt. Sinai
School of Medicine.  Their analysis estimated that from 1940 to
1979, 27.5 million workers were occupationally exposed to
asbestos, with 18.8 million of these having high levels of
exposure.  Groups at highest risk were insulators, shipyard
workers (many who worked during World War II) and workers engaged
in the manufacture of asbestos products.  Other high-risk
industries and occupations included other construction trades,
railroad engine repair, utility services, stationary engineers,
chemical plant and refinery maintenance, automobile maintenance
and marine engine room personnel.

Many of these workers were in the group sometimes referred to as
the "first wave" of asbestos exposed workers - those directly
involved in the manufacture or installation of asbestos insulation
or products before there were any control measures or standards in
place.  Exposures for some of these workers regularly exceeded 20
- 40 f/cc, levels that are 200 - 400 times the current OSHA
standard of 0.1 f/cc, with exposures of several months resulting
in an increased risk of mesothelioma and lung cancer.

The 1982 Nicholson analysis projected that the occupational
exposures that occurred between 1940 and 1979 would result in
8,200 - 9,700 asbestos related cancer deaths annually, peaking in
2000, and then declining but remaining substantial for another 3
decades.  Overall, the Nicholson study projected that nearly
500,000 workers would die from asbestos related cancers between
1967 and 2030.

Dr. Welch points out that these projections did not include
mortality or morbidity from non-malignant asbestos diseases, which
have or will affect even greater numbers of workers.  Nor do these
projections reflect the full risk of disease among populations who
were exposed in the 1950's and 1960's, but didn't have sufficient
latency for asbestos related diseases to be manifested at the time
the Nicholson study was conducted.  This includes many of the
building trades and construction workers who not only installed
asbestos products, but also were exposed during removal,
demolition and renovation.  This group is often referred to as the
"second wave" of asbestos exposed workers, who account for much of
the disease that is being manifested today. Similarly, the
Nicholson study did not address the risk of exposures that
occurred after 1979. While, OSHA and EPA regulations reduced
asbestos exposures in the 1970s, strict regulation of asbestos did
not occur until 1986.  Moreover, non-compliance by some employers
means, even today, that some workers are exposed to levels of
asbestos that place them at increased risk of disease.

Due to the long latency of most asbestos related diseases (30 - 40
years or longer), many of the cases of disease that are being
manifested today are among workers who were first exposed in the
1940s, 1950s and 1960s, before asbestos was regulated and
controlled.  It is worth noting that a major portion of the
asbestos-related disease that is occurring is among workers who
were exposed while in the military or employed in shipyards doing
work for the government.  In fact, review of Manville claims data
for the period of 1995 - 2001 shows that more than 16 percent all
lung cancer claims and more than 30 percent of all mesothelioma
claims came from military personnel and shipyard workers.  The
federal government clearly played a major role in contributing to
the asbestos disease crisis and should bear some responsibility in
any asbestos disease compensation program.

Dr. Welch says that Dr. Nicholson's work provides a good
foundation for estimating the future cases of asbestos disease,
and has been utilized in many of the models to develop future
asbestos disease claims projections, including claims projections
made by the ARPC for the Manville Trust.  However, it is important
to recognize that there is a good deal of uncertainty associated
with these projections.  That uncertainty is reflected in the wide
range of future disease projected by Manville and others (ranging
from a low of 750,000 future claims to a high of 2.6 million
future claims) and the fact that past projections have generally
proved to be too low.

"Are there new exposures today?" Judge Fullam queried.

"Yes," Dr. Welch said, but those should be very limited an in very
rare circumstances, like when an asbestos-remediation protocol
fails or safe handling procedures are not followed.

"Have Dr. Nicholson's projections proved to be correct over time?"
Judge Fullam asked.

"It's amazing how accurate his projections have been and continue
to be," Dr. Welch responded.

"Can other projections of non-cancer claims be validated over
time?" Mr. Finch asked.

"No," Dr. Welch said, because we don't have a national register
system in place.  Cancer deaths are tabulated nationally.  Other
diseases aren't.

Mr. Finch asked Dr. Welch to comment about a recent paper by Dr.
Gitlin appearing in Academic Radiology that suggests, based on
reviews of x-rays that 95% of claims for asbestos-related disease
are bogus.

Dr. Welch does not agree with the conclusion and has many
questions about Dr. Gitlin's study.

"It is not unrealistic to predict that more readers who work for
claimants will find abnormalities and more readers who work for
asbestos defendants will find no abnormalities," Dr. Welch said.

"Because consultants try to please clients?" Judge Fullam posited.

"I'm not as cynical as Your Honor," Dr. Welch responded.  "I think
it may be the other way around.  Litigants hire experts they
expect to deliver a certain result."

Adam Strochak, Esq., at Weil, Gotshal & Manges LLP, representing
the Banks, continued to explore Dr. Welch's views about Dr.
Gitline's study.

"Dr. Gitlin's findings don't lead to the conclusion of fraud," Dr.
Welch said.  A big open question is where did the x-rays come from
that Dr. Gitlin's B-readers reviewed?  She wonders if the sample
Dr. Gitlin used was drawn from a group of over-readers and wonders
if Dr. Gitlin's readers were classic under-readers.  That would
easily explain the divergent readings.

                Asbestos Claimants' Financial Witness
                         Loreto T. Tersigni

Mr. Finch called Loreto T. Tersigni from L Tersigni Consulting
P.C. to the witness stand.

Mr. Tersigni is a certified public accountant and certified fraud
examiner with more than 30 years of experience in the practice of
public accountancy and financial consulting.  During his career,
he's been the partner-in-charge of providing audit, tax and
management advisory services to a diversified client base
including numerous publicly owned manufacturing companies.  He was
also a member of the Technical Standards subcommittee of the
Professional Ethics Division of the American Institute of
Certified Public Accountants.  That committee was responsible for
reviewing and analyzing practitioners' compliance with generally
accepted accounting principles and other professional standards.
In 2001, he formed and became the principal of L Tersigni
Consulting P.C., a firm providing financial advisory services in
bankruptcy proceedings and complex litigation.

The Official Committee of Asbestos Personal Injury Claimants
retained Mr. Tersigni to provide financial and investment banking
advisory services.  His firm is also currently the financial
advisor to various other asbestos committees involving companies
that have filed for reorganization under Chapter 11 of the Federal
Bankruptcy Code.

Mr. Tersigni was asked by counsel to the Committee to render an
opinion regarding the appropriate discount rate to calculate the
present value of Owens Corning's asbestos liability as of
October 4, 2000, and October 1, 2004.

He was also asked by counsel to provide an overview of Statement
of Financial Accounting Standards No. 5, Accounting for
Contingencies, and related interpretations, and to render an
opinion as to whether contingent asbestos liabilities reported in
audited financial statements prepared in conformity with FAS 5 and
related authoritative accounting pronouncements means that a
company has determined an accurate estimate of its contingent
liability from an economic perspective.

Mr. Tersigni believes a risk-free discount rate should be used to
calculate the present value of Owens Corning's asbestos liability.

As a starting point, Mr. Tersigni explains that he believes it is
important to draw a distinction between asbestos liabilities and
liabilities of a company for borrowed funds.  In the case of a
bank loan or a public bond issuance, for example, a company and a
creditor negotiate the terms of the debt instrument, including the
interest rate, the timing of interest and principal payments,
covenants and warranties, events of default and remedies upon an
event of default In short, it is a negotiated, arm's-length
transaction between two willing parties.  To determine the present
value of this type of liability at any point in time, one would
discount the contractual cash flows (principal and interest) at a
market interest rate (commonly referred to as the market yield)
that reflects current market conditions as well as the
creditworthiness of the issuer.  This process provides a
prospective lender with a rate of return on capital invested.
Accordingly, the lender would receive the principal invested plus
a rate of return on that principal.

By contrast, asbestos liabilities are involuntary obligations. An
asbestos liability arises not as a result of an arm's-length
agreement between two willing parties, but rather as a result of
an involuntary illness contracted from exposure to a company's
asbestos-containing products.  If the payment of liabilities to
involuntary asbestos creditors is projected to occur in the
future, it is necessary to determine an appropriate rate to
discount this obligation to determine its present value to take
into account the time value of money.

"In my opinion," Mr. Tersigni testified, "the appropriate discount
rate is a risk-free rate, i.e., the rate of return on a United
States Treasury obligation with a maturity equal to the number of
years in the future that the asbestos obligation is assumed to be
incurred.  Furthermore, in my opinion, the risk-free rate is the
appropriate discount rate, whether viewed from the perspective of
the asbestos claimant or the company that is liable for the
asbestos claim."

From the perspective of an asbestos claimant, Mr. Tersigni
explained, an investment in the company was not made.  Instead,
the asbestos claimant became an involuntary creditor by virtue of
having been injured through exposure to the company's asbestos
products.  The asbestos claimant did not receive the protections
afforded a bank lender or bondholder through a loan agreement or
bond indenture.  The asbestos claim does not provide any prospect
of an economic upside for the claimant as would be the case for a
stockholder.  Nor did the asbestos claimant have the opportunity
to assess the risk of entering into a contractual relationship
with the company.  In short, there was no negotiated investment as
exists in the typical lender-borrower or stockholder context.
Under these circumstances, the reasonable expectation of the
asbestos claimant is to be made whole through the damages awarded.
In order to make the claimant whole, the claimant could either be
paid the nominal amount in the future or accept a discounted
amount currently which could then be invested in a security that,
upon maturity, would yield an amount equal to the nominal amount
of the asbestos claim.  Obviously, it would be prudent to make
such an investment in a risk-free security to ensure that upon
maturity the nominal amount of the claim would be fully satisfied.
This is equivalent to stating that a risk-free rate should be used
to discount the asbestos obligation to its present value.

Mr. Tersigni reaches the same conclusion when viewing the discount
rate issue from the perspective of the company.  In analyzing the
issue as it relates to Owens Corning, Mr. Tersigni first reviewed
the Peterson Report to understand the assumptions and methodology
utilized by Dr. Peterson in projecting the nominal dollar asbestos
liabilities of Owens Corning through the year 2041.  Dr. Peterson
used epidemiological studies and "propensity to sue" analyses to
estimate the number and types of future claims to be filed against
Owens Corning.  He then assumed that the average settlement
amounts that Owens Corning paid with respect to each type of claim
during a base period would continue into the future and provide a
basis for calculating nominal asbestos liabilities in future
years; by doing so, he also incorporated a 2.5% annual inflation
factor beginning in the first year following the base period.  The
average base period settlement amounts reflect the results of
negotiations between Owens Corning (or representatives acting on
behalf of Owens Corning) and asbestos claimants.  Therefore, the
future asbestos claims projected by Dr. Peterson implicitly
include the impact of future settlement negotiations.  The only
further justifiable discounting of these obligations would be to
take into account the time value of money.  The risk-free rate, as
measured by the yield on United States Treasury obligations, is
the discount rate that appropriately accounts for the time value
of money, and is therefore the discount rate that should be used
to determine the present value of Owens Corning's future asbestos
liabilities.

Mr. Tersigni says the appropriate risk-free rates are:

     -- 6.07% as of the date Owens Corning filed for bankruptcy;
     -- 4.41% as of October 15, 2004; and
     -- somewhat lower as of today.

Judge Fullam expressed considerable confusion and skepticism at
this juncture, pressing Mr. Tersigni to explain why it makes any
difference whether the claimants are voluntary or involuntary
creditors.

"Isn't the question how much money needs to be set aside today to
pay a claim that is quantified years from now?" Judge Fullam asked
Mr. Tersigni.

Mr. Tersigni rehashed an abbreviated version of his earlier
testimony.

Mr. Finch asked Mr. Tersigni to talk about estimates and reporting
of contingent asbestos liabilities in accordance with GAAP versus
estimations of liability in a formal court proceeding.

Mr. Tersigni indicates the two are as different as night and day
and pointed to two recent examples:

                                   GAAP             Court-
                                  Reported         Estimated
   Debtor                        Liability         Liability
   ------                        ---------         ---------
   Armstrong World Industries  $1.3 billion  $7.1 to $9.0 billion
   Babcock & Wilcox            $750 million  $4.7 to $6.5 billion

GAAP reporting follows the standards set forth in SEC Staff
Accounting Bulletin No. 92 -- Accounting and Disclosure related to
Loss Contingencies; the AICPA's Statement of Position 96-1
Environmental Liabilities, FASB 5 and FIN-14 issued by the
Financial Accounting Standards Board.

"Asbestos liabilities reported in conformity with GAAP are not
necessarily an accurate estimate of a contingent liability from an
economic perspective," Mr. Tersigni said.

David A. Hickerson, Esq., at Weil, Gotshal & Manges LLP,
representing the Banks, asked Mr. Tersigni for what period of time
GAAP projections made by Armstrong and Babcock covered.

"A short period of time . . . a handful of years," Mr. Tersigni
said.

Mr. Hickerson pointed out that Owens Corning's latest Form 10-Q
indicates that Owens Corning's estimate is based on a 50-year
projection from Dr. Vasquez, and suggesting that Owens Corning's
GAAP reporting may be far closer to reality than what other
companies' disclose in their financial reports.

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)


P&H CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: P&H Construction Corporation
        80 Saint Michael Street, Suite 203
        Mobile, Alabama 36602

Bankruptcy Case No.: 05-10243

Type of Business: The Debtor is a construction company.

Chapter 11 Petition Date: January 14, 2005

Court: Southern District of Alabama (Mobile)

Debtor's Counsel: Irvin Grodsky, Esq.
                  Irvin Grodsky, P.C.
                  PO Box 3123
                  Mobile, Alabama 36652-3123
                  Tel: (251) 433-3657

Total Assets: $3,215,999

Total Debts:  $3,544,091

Debtor's 20 Largest Unsecured Creditors:

    Entity                                Claim Amount
    ------                                ------------
Willis C. Darby, Jr.                          $383,428
PO Box 2565
Mobile, Alabama 36652

Canal Barge Company, Inc.                     $230,254
PO Box 62666
New Orleans, Louisiana 70162

Internal Revenue Service                      $121,070
Ogden, Utah 84201-0039

Skyline Steel Corporation                      $81,446
PO Box 8500-9055
Philadelphia, Pennsylvania 19178-9055

Adams & Reese, LLP                             $81,169
4500 One Shell Squire
New Orleans, Louisiana 70139

Internal Revenue Service                       $74,960
Ogden, Utah 84201-0039

American Longshore Mutual Association          $66,731

American Express                               $43,172

American Pile Driving Equipment                $42,933

Pearson Management Group, Inc.                 $41,472

AI Credit, Inc.                                $37,390

Morris Concrete, LLC                           $34,130

Texaco                                         $28,330

Alabama Department of Revenue                  $27,931
Withholding Tax Returns

Cassidey Lumber Company                        $25,333

Alabama Department of Revenue                  $22,972
Sales, Use & Business Tax Division

Ladd Supply Company                            $22,342

Cowin Equipment Company, Inc.                  $21,514

Beyel Brothers, Inc.                           $21,015

Pile Equipment, Inc.                           $19,796


PARMALAT USA: Asks Court to Extend Exclusive Periods
----------------------------------------------------
Parmalat USA Corporation and its debtor-affiliates ask the United
States Bankruptcy Court for the Southern District of New York to
extend the period during which they have the exclusive right to
propose and file Chapter 11 plans to and including March 25, 2005,
and the period during which they may solicit acceptances of any
plans filed to and including May 24, 2005.

General Electric Capital Corporation and Citicorp, N.A., support
the proposed extension.  GE Capital Public Finance, Inc., the
lessor under certain prepetition Master Lease Finance Agreement
with Farmland Dairies, LLC, which agreement governs the plant
equipment at Farmland's Northeast and Michigan facilities, also
supports the Debtors' request.

Marcia L. Goldstein, Esq., at Weil, Gotshal & Manges, LLP, in New
York, relates that the U.S. Debtors have made significant progress
towards emergence from Chapter 11.  Most significantly, the
Debtors filed a Plan and accompanying Disclosure Statement with
the support of key creditor constituencies and the Official
Committee of Unsecured Creditors.  The Court approved the U.S.
Debtors' Disclosure Statement on January 14, 2005.

Moreover, the Exclusive Periods have permitted the U.S. Debtors to
negotiate and reach a reasonable agreement with GE Capital Public
Finance, key creditor constituencies, and the Creditors Committee
without the threat of entertaining competing plans of
reorganization.  If the Debtors cannot preserve the exclusive
right to present and file a plan of reorganization, the balance
that has permitted the parties-in-interest to forge reasonable
terms for the Debtors' emergence will be lost.

According to Ms. Goldstein, Farmland has been working diligently
to ensure that it exits Chapter 11 quickly.  A key component of
and condition precedent to Farmland's ability to emerge from
Chapter 11 under the Plan is obtaining a working capital credit
facility or facilities totaling approximately $100,000,000.  To
ensure that Farmland will have the required Exit Financing in
place, Farmland sought and obtained the Court's authority to pay
certain deposits and fees and expenses for up to three potential
lenders.

Farmland also has taken steps to obtain additional credit to
continue operating its business through the Effective Date.  To
this end, Farmland sought and obtained the Court's permission to
obtain up to $15,000,000 in supplemental postpetition financing.

Farmland continues to maximize the value of its estate through the
sale of certain non-core, non-operating properties, and surplus
assets.  Farmland has already sold three non-operating properties
and conducted three auctions of surplus assets.  Most recently,
Farmland entered into a stalking-horse contract, and on
December 16, 2004, conducted an auction for the sale of a non-
operating property in West Caldwell, New Jersey.  Farmland
anticipates closing the sale of the West Caldwell Property before
the end of the year and recovering approximately $2,100,000 for
its estate as a result of the sale.

In addition, Farmland has entered into a contract for the sale of
a non-operating property in Atlanta, Georgia, and is finalizing a
contract for the sale of a smaller property in Washington,
Georgia.  Farmland anticipates selling approximately eight other
non-operating properties and conducting at least one additional
auction of surplus assets within the next three months.

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)


PIONEER ENERGY: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Pioneer Energy Corporation
        4144 North Central Expressway, Suite 600
        Dallas, Texas 75204

Bankruptcy Case No.: 05-30548

Chapter 11 Petition Date: January 11, 2005

Court: Northern District of Texas (Dallas)

Judge:  Barbara J. Houser

Debtor's Counsel: G. Michael Curran, Esq.
                  Merrill Lane Kaliser, Esq.
                  McManemin & Smith, P.C.
                  Plaza of the Americas, South Tower
                  600 North Pearl Street, Suite 1600, LB 175
                  Dallas, Texas 75201
                  Tel: (214) 953-1321

Estimated Assets: $500,000 to $1 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

    Entity                                Claim Amount
    ------                                ------------
Dominion Exploration                           $92,819
1450 Poydras Street
New Orleans, Louisiana 70112-6000
Attn: Legal Department

Cochran Chemical Company, Inc.                 $52,915
c/o Harold E. Heath
PO Box 472
Holdenville, Oklahoma 74848

WD Well Service                                $12,561
PO Box 635
Ballinger, Texas 76821-0635

Max-Line, Inc.                                  $6,934

Fleet Capital Leasing-GVF Troy                  $4,682

ARSI                                            $3,966

AT&T                                            $3,966

Office Depot                                    $3,713

Mike Byrd Casing Crews, Ltd.                    $3,224

Dynamic Recovery Systems                        $3,190

CIT Technology Fin Service, Inc.                $2,424

D&B RMS                                         $1,506

Alison Davis                                    $1,400

E.C. Tool & Supply Company                      $1,400

Diamond Tank Rental, Inc.                         $983

Joe T. Smith, Inc.                                $934

Boley-Featherston Insurance                       $750

Jay Roberts                                       $658

Diamond Rotating Heads, Inc.                      $567

The Stewart Corporation                           $561


PORTOLA PACKAGING: Extends Stock Purchase Offer Until Jan. 31
-------------------------------------------------------------
Portola Packaging, Inc., has extended its tender offer to purchase
its common stock from the present expiration date of Jan. 15,
2005, to Jan. 31, 2005.  This will defer acceptance of tenders
through that date.  Also, Portola is reducing the number of shares
it is offering to purchase in the tender offer from a maximum of
1,319,663 shares to a maximum of 172,413 shares.

                   About Portola Packaging, Inc.

Portola Packaging is a leading designer, manufacturer and marketer
of tamper evident plastic closures used in dairy, fruit juice,
bottled water, sports drinks, institutional food products and
other non-carbonated beverage products.  The Company also produces
a wide variety of plastic bottles for use in the dairy, water and
juice industries, including various high density bottles, as well
as five-gallon polycarbonate water bottles.  In addition, the
Company designs, manufactures and markets capping equipment for
use in high speed bottling, filling and packaging production
lines.  The Company is also engaged in the manufacture and sale of
tooling and molds used in the blow molding industry.  For more
information about Portola Packaging, visit the Company's web site
at http://www.portpack.com/

At Nov. 30, 2004, Portola Packaging's balance sheet showed a
$47.1 million stockholders' deficit, compared to a $46.4 million
deficit at Nov. 30, 2003.


PRINTS PLUS: Taps Gadsby Hannah as Bankruptcy Counsel
-----------------------------------------------------
Prints Plus, Inc., asks the U.S. Bankruptcy Court for the District
of Massachusetts for permission to employ Gadsby Hannah LLP as its
counsel in its bankruptcy proceeding.

The Debtor has selected Gadsby Hannah because of the Firm's
knowledge of the retail industry and its extensive experience in
business reorganizations under chapter 11.

In particular, Gadsby Hannah will:

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

     b) prepare and file all necessary motions, notices, and other
        pleadings necessary to sell some or substantially all of
        the Debtor's assets;

     c) assist the Debtor in reviewing and maintaining its
        executory contracts and unexpired leases, and negotiate
        with parties thereto;

     d) prepare and pursue approval of a disclosure statement and
        confirmation of a plan of reorganization;

     e) prepare on the Debtor's behalf all necessary applications,
        motions, answers, orders, reports and other legal papers;

     f) appear in Court to protect the interests of the Debtor;
        and

     g) perform all other legal services for the Debtor which may
        be necessary and proper in the bankruptcy proceeding.

John G. Loughnane, Esq., will be the lead attorney in the Debtor's
restructuring.  The Firm's professionals and their current hourly
rates are:

             Designation            Rate
             -----------            ----
             Partners            $330 - $500
             Associates          $195 - $300
             Paraprofessionals   $100 - $150

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

Headquartered in Cambridge, Massachusetts, Prints Plus, Inc.,
provides printing services.  The Company filed for chapter 11
protection on Jan. 11, 2005 (Bankr. D. Mass. Case No. 05-10220).
When the Debtor filed for protection from its creditors, it
estimated assets between $10 million to $50 million and estimated
debts from $1 million to $10 million.


PRINTS PLUS: Turns to Clear Thinking for Financial Advice
---------------------------------------------------------
Prints Plus, Inc., asks the U.S. Bankruptcy Court for the District
of Massachusetts for permission to hire Clear Thinking Group, LLC,
as its financial advisor during its chapter 11 case.

The Debtor believes that Clear Thinking can offer a unique
perspective on business opportunities and can take an active role
in implementing plans that are well-suited to Prints Plus' needs
while restructuring its business.

In particular, Clear Thinking will:

     a) lead and manage the bankruptcy process on a full-time
        basis;

     b) assist the Debtor in the preparation of its schedules and
        budgets;

     c) assist in the process of seeking to obtain DIP financing;

     d) assist the Debtor in every step of the bankruptcy
        reorganization process, with the goal of obtaining Court
        approval of a plan of reorganization; and

     e) assist the Debtor in any and all other areas as required.

Clear Thinking's professionals will bill the Debtor based on their
current hourly rates:

             Designation               Rate
             -----------               ----
             Managers/Principals    $250 - $350
             Analysts/Consultants   $125 - $175
             Administrative Staff    $75

Clear Thinking will also receive a $75,000 "success fee" upon the
Debtor's consummation of a plan of reorganization.

Lee A. Diercks, at Clear Thinking, assures the Court of the Firm's
"disinterestedness" as that term is defined in Section 101(14) of
the Bankruptcy Code.

Headquartered in Cambridge, Massachusetts, Prints Plus, Inc.,
provides printing services.  The Company filed for chapter 11
protection on Jan. 11, 2005 (Bankr. D. Mass. Case No. 05-10220).
Alex F. Mattera, Esq., and John G. Loughnane, Esq., at Gadsby
Hannah LLP, represent the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it
estimated assets from $10 million to $50 million and estimated
debts between $1 million to $10 million.


PRINTS PLUS: Look for Bankruptcy Schedules by February 25
---------------------------------------------------------
Prints Plus, Inc., sought and obtained an extension of time until
Feb. 25, 2005, to file its Schedules of Assets and Liabilities,
Schedules of Executory Contracts and Unexpired Leases, and
Statement of Financial Affairs pursuant to Bankruptcy Rule
1007(c).

The U.S. Bankruptcy Court for the District of Massachusetts
understands that due to the complexity of the Debtor's business,
it will need substantial time to collect the necessary information
to accurately and comprehensively complete its Schedules and
Statement.

Headquartered in Cambridge, Massachusetts, Prints Plus, Inc.,
provides printing services.  The Company filed for chapter 11
protection on Jan. 11, 2005 (Bankr. D. Mass. Case No. 05-10220).
Alex F. Mattera, Esq., and John G. Loughnane, Esq., at Gadsby
Hannah LLP, represent the Debtor in its restructuring efforts.
When the Debtor filed for protection from its creditors, it
estimated assets from $10 million to $50 million and estimated
debts between $1 million to $10 million.


RAYOVAC CORP: S&P Puts 'B+' Rating on $1.2 Billion Bank Facility
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on Rayovac
Corporation and United Industries Corporation, including both 'B+'
corporate credit ratings, which were removed from CreditWatch
where they had been placed on Jan. 4, 2005.

In addition, Standard & Poor's assigned a 'B+' rating and '3'
recovery rating to Rayovac's planned $1.2 billion bank facility,
indicating Standard & Poor's expectation of meaningful recovery of
principal (50% to 80%) in the event of a default.  Standard &
Poor's also assigned a 'B-' rating to Rayovac's planned $500
million senior subordinated note offering due 2015.

The outlooks on both Rayovac and United Industries are stable.
Upon completion of the transaction, ratings on United Industries
will be withdrawn.

"The affirmation is based on Rayovac's improved business profile
due to the planned acquisition, which would result in a more
diverse and less seasonal product portfolio, and greater scale
with key retailers," said Standard & Poor's credit analyst Patrick
Jeffery.  The acquisition is also expected to significantly
enhance the company's cash flow.  "However, the successful
integration of United Industries into Rayovac's operations will be
critical to the company's ability to realize these benefits."  The
company is also expected to be highly leveraged as a result of the
planned transaction.

Furthermore, the affirmed rating and outlook do not anticipate any
other significant near-term acquisitions that could affect
Rayovac's ability to integrate United Industries into its
operations.


RCN CORP: Inks Various Pacts Pursuant to Chapter 11 Plan
--------------------------------------------------------
On December 21, 2004, RCN Corporation and certain of its
subsidiaries filed with the Secretary of State of the State of
Delaware the Company's Amended and Restated Certificate of
Incorporation and By-Laws.

In accordance with the Plan, the Company:

    (i) is issuing new Common Stock, par value $0.01 per share,
        and new warrants, which will be distributed as soon as
        practicable subject to certain reserves;

   (ii) issued $125,000,000 aggregate principal amount of its
        7.375% Convertible Second-Lien Notes due 2012;

  (iii) entered into a First-Lien Credit Agreement, dated as of
        December 21, 2004, with the Administrative Agent and
        certain financial institutions parties thereto, as lenders
        for a new $355,000,000 senior secured credit facility with
        Deutsche Bank Securities, Inc.; and

   (iv) entered into an Amended and Restated Term Loan and
        Credit Agreement with HSBC Bank USA, National Association,
        as agent and collateral agent and certain financial
        institutions parties thereto, as lenders.

The Notes mature on June 21, 2012, subject, in certain instances,
to earlier repayment in whole or in part.

On the Effective Date, in connection with the issuance and sale
of the Notes, the Company entered into seven agreements:

    (i) a Note Purchase Agreement relating to the purchase of
        the Notes, dated as of December 21 2004, by and among the
        Company, the Guarantors, and the Purchasers;

   (ii) an Indenture governing the Notes, dated as of December 21,
        2004, by and among the Company and HSBC Bank USA, National
        Association, as indenture trustee;

  (iii) a Registration Rights Agreement with respect to the Notes,
        dated as of December 21, 2004, by and among the Company
        and the Purchasers;

   (iv) a Security Agreement, dated as of December 21, 2004, by
        and among the Company, each Subsidiary Guarantor, and the
        Second-Lien Collateral Agent;

    (v) a Pledge Agreement, dated as of December 21, 2004, by and
        between the Company and each Subsidiary Guarantor;

   (vi) a Subsidiary Guaranty, dated as of December 21, 2004, made
        by each of the Guarantors; and

  (vii) an Intercreditor Agreement, dated as of December 21, 2004,
        by and between Deutsche Bank Cayman Islands Branch, as
        administrative agent, and HSBC Bank USA, National
        Association, as second-lien collateral agent and third-
        lien collateral agent.

On the Effective Date, in connection with the Credit Facility,
RCN entered into four agreements:

    (i) the First-Lien Credit Agreement;

   (ii) a Security Agreement, dated as of December 21, 2004, with
        each Subsidiary Guarantor;

  (iii) a Pledge Agreement, dated as of December 21, 2004 with
        each Subsidiary Guarantor; and

   (iv) a Subsidiary Guaranty, dated as of December 21, 2004, made
        by each of the Guarantors in favor of HSBC Bank USA,
        National Association, as second-lien collateral agent for
        the benefit of the Secured Creditors.

The First-Lien Credit Agreement provides, among other things, for
a seven-year, $330,000,000 term loan credit facility and a five-
year $25,000,000 letter of credit facility, subject, in certain
instances, to early repayment in whole or in part.

In connection with the Amended and Restated Evergreen Facility,
the Company entered into three agreements:

    (i) an Amended and Restated Term Loan and Credit Agreement
        with HSBC Bank USA, National Association, as agent and
        collateral agent and certain financial institutions
        parties thereto, as lenders -- Third-Lien Credit
        Agreement;

   (ii) a Security Agreement, dated as of December 21, 2004, with
        each Subsidiary Guarantor; and

  (iii) a Pledge Agreement, dated as of December 21, 2004, with
        each Subsidiary Guarantor.

The Third-Lien Credit Agreement provides, among other things, for
a seven and three quarter year, approximately $34,430,883 term
loan credit facility, subject, in certain instances, to early
repayment in whole or in part.  There were no proceeds from this
credit facility because, pursuant to the Plan, it amends
indebtedness that was already outstanding.

A full-text copy of RCN Corp.'s Form 8-K containing the various
agreements is available for free at:

    http://sec.gov/Archives/edgar/data/1041858/000095017204003122/0000950172-04-003122.txt

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)


SANKATY HIGH: Fitch Upgrades $22.5-Mil Sub. Debt Rating to 'BB+'
----------------------------------------------------------------
Fitch Ratings upgrades all of the rated notes issued by Sankaty
High Yield Asset Partners, L.P.  These rating actions are
effective immediately:

     -- $30,000,000 senior secured revolving credit facility to
        'A+' from 'A';

     -- $85,000,000 senior secured notes to 'A+' from 'A';

     -- $67,500,000 senior subordinated secured notes to 'BBB+'
        from 'BBB';

     -- $22,500,000 subordinated secured notes to 'BB+' from 'BB'.

Sankaty, a market value collateralized debt obligation -- CDO --
that closed on Jan. 15, 1998, is managed by Sankaty Advisors,
L.L.C.  The fund was established to invest in a portfolio of
senior secured bank loans, high yield bonds, and mezzanine and
special situation investments.

Since the last rating action on Sept. 5, 2003, the fund has showed
significant improvement.  The overcollateralization -- OC -- tests
for the senior, senior subordinated, and subordinated notes have
increased to 213.5%, 151%, and 140.3% as of the Dec. 16, 2004,
valuation report, from 178.7%, 124.9%, and 115.8% as of the
July 24, 2003, valuation report.  Additionally, the total illiquid
assets as a percentage of the market value of the assets has
decreased from 26.6% to 15%.  Several of the illiquid positions
have call options prior to the legal final maturity of Sankaty.

Fitch performed discounted market value analysis at varying
advance rate stresses and determined that the notes were well
covered under various discounted collateral scenarios.  After
discussing the current state of the portfolio with Sankaty
Advisors, Fitch believes the asset manager is managing toward its
Dec. 30, 2005, and Jan. 31, 2006, maturity dates.  Fitch will
continue to monitor Sankaty closely to ensure accurate ratings.

Based on the cushion of the OC tests, the credit quality of the
portfolio and the track record and experience of Sankaty Advisors
in the high yield loan, mezzanine and special situation asset
classes, Fitch has determined that the ratings assigned to the
senior secured revolving credit facility, the senior secured
notes, the senior subordinated secured notes, and the subordinated
secured notes no longer reflect the current risk to noteholders
and have subsequently improved.

Additional deal information and historical data are available on
the Fitch Ratings Web site at http://www.fitchratings.com/


SELECT MEDICAL: Moody's Puts B1 Rating on Senior Secured Notes
--------------------------------------------------------------
Moody's Investors Service assigned new ratings (senior implied at
B1) to Select Medical Corporation (New) in connection with the
proposed leveraged buyout of the company by an investor group.
The new ratings primarily reflect the company's heightened
financial risk following the proposed transaction.

Simultaneously, Moody's lowered the existing ratings of Select
Medical Corporation, which primarily reflects the risks associated
with the transition to new Medicare reimbursement guidelines and
the company's increased appetite for financial leverage.

This rating action concludes the review of Select Medical
initiated on May 12, 2004, and extended on October 20, 2004.
Moody's placed the ratings of Select Medical on review after the
announcement by the Centers for Medicare & Medicaid Services (CMS)
regarding changes to reimbursement for long term acute care
hospitals operating as hospitals within a hospital.  The review
was extended in October 2004 after the announcement of the
proposed leveraged buyout.  At the completion of the transaction,
Moody's will withdraw the existing ratings of Select Medical.

Moody's assigned the ratings to Select Medical (New):

   Proposed senior secured revolving credit facility, rated B1

   Proposed senior secured term loan due 2012, rated B1

   Proposed senior implied rating, rated B1

   Proposed senior unsecured issuer rating, rated B2

   Proposed senior subordinated notes, rated B3

The ratings of Select Medical were downgraded and will be
withdrawn upon completion of the refinancing:

   Senior implied rating to B1 from Ba3;

   Senior unsecured issuer rating to B2 from B1;

   $175 million 9.5% senior subordinated notes due 2009 to B3
    from B2

   $175 million 7.5% senior subordinated notes due 2013 to B3
    from B2

The outlook for the ratings of Select Medical and Select Medical
(New) are stable.

The downgrade of the existing ratings primarily reflect the
potential negative impact to cash flow:

    (i) as the company transitions to the new Medicare
        reimbursement guidelines for hospital within a hospital
        long term acute care hospital long term acute care
        hospitals services;

   (ii) the significant leverage the company is incurring in the
        transaction coupled with the company's already high level
        of adjusted leverage when operating leases are capitalized
        to the balance sheet;

  (iii) the higher level of capital expenditures projected by
        Moody's to be used by Select Medical (New) in its long
        term acute care hospitals transition plan that will reduce
        free cash flows; and

   (iv) the Company's increased acquisition appetite, completing
        two acquisitions in the last year and a half after several
        years of no acquisitions.

The ratings also:

  (i) reflect the Company's track record of debt reduction and
      deleveraging, and its commitment to further debt
      reduction after the transaction;

(ii) Select Medical's history of growing revenues and cash
      flow from its core LTACH business on a de-novo basis;

(iii) senior management's tenure with Select and their
      considerable equity participation in the transaction;

(iv) Moody's belief that senior management and new equity
      sponsor have the track record and experience to guide
      Select Medical through its transition phase;

  (v) strong free cash flows characterized by good operating
      margins with limited capital expenditure needs and the
      effects of a positive NOL cash tax shield; and

(vi) the extension of debt maturities from new bank facilities
      and subordinated notes.

The stable outlook assumes Moody's belief that the company will
continue to use its free cash flow to reduce debt.  Moody's
believes that Select Medical needs to deleverage its balance sheet
in the near term to provide more financial flexibility as the
company enters into the LTACH transition period.  Further, Moody's
assumes the company will complete no acquisitions in the near to
intermediate term.  If the company is unsuccessful in deleveraging
its balance sheet in the near to intermediate term (12-24 months),
Moody's would likely revise the outlook to negative or downgrade
the ratings.

If the Company is successful in profitably transitioning its HIH
long term acute care hospitals, resulting in improved free cash
flow and the reduction of debt, the ratings would likely be
upgraded.

Moody's would look to upgrade the ratings if Select Medical were
to sustain free cash flow coverage of debt in the 10-15% range and
the company demonstrated material debt reduction.

Pro forma for the transaction for the twelve-month period ended
September 30, 2004, the company would have had cash flow coverage
of debt that is weak to moderate for the B1 category.  Adjusted
cash flow from operations to adjusted debt would have been 9% and
adjusted free cash flow to adjusted debt would have been 7%.
Interest coverage of debt, defined as EBIT to interest, would have
been weak at 1.7 times.

Leverage would have been high at 6.2 times adjusted debt to
EBITDAR. For purposes of calculating adjusted debt, Moody's has
capitalized operating leases 8 times for long term acute care
hospitals related leases and 3 times for equipment related leases.
This leverage multiple assumes all operating leases are
capitalized at an 8 times multiple.

Moody's believes that the use of EBITDA and related EBITDA ratios
as a single measure of cash flow without consideration of other
factors can be misleading.  Moody's believes that liquidity should
be good following the transaction.  Select Medical (New) is
expected to rely heavily on its new revolving credit facility and
is expected to have sufficient availability for working capital
and general corporate purposes, prior to any repayment on the
revolver.

Moody's anticipates that Select Medical (New) should generate free
cash flow that will allow it to repay a portion of its revolving
credit facility, thus generating excess liquidity through the next
twelve months.  Moreover, we anticipate Select Medical (New) will
generate cash flow that will cover all capital expenditure needs
other than extraordinary capital requirements.  These capital
expenditure requirements include amounts Moody's believes Select
Medical (New) will need to spend to meet the goals of the
company's transition plans.  In addition, Moody's expects the
company will remain in compliance with proposed financial
covenants for the next twelve months.

The B1 ratings for the proposed senior secured credit facilities
are rated at the senior implied level to reflect the fact that the
credit facilities will likely represent more than half of the pro
forma debt capital structure.

The B3 rating for the proposed senior subordinated bonds are rated
two notches below the senior implied rating because of their
contractual subordination to the significant level of senior
secured debt.  Moody's expects the subordinated notes will be
unsecured, but guaranteed by operating subsidiaries.  The ratings
are subject to Moody's final review of documentation for the
transaction.

Select Medical is a leading operator of specialty hospitals in the
United States.  Including the SemperCare acquisition completed on
January 1, 2005, Select Medical operates 99 long-term acute care
hospitals in 26 states.  It operates four acute care medical
rehabilitation hospitals in New Jersey and is a leading operator
of outpatient rehabilitation clinics in the United States and
Canada, with approximately 750 locations.  Select Medical also
provides medical rehabilitation services on a contracted basis at
nursing homes, hospitals, assisted living and senior care centers,
schools, and worksites.  For the nine months ended September 30,
2004, Select Medical reported total revenues of $1.24 billion.


SI INT'L: Moody's Assigns B1 Rating to Revolving Credit Facility
----------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to the proposed
$100 million revolving credit facility and $50 million term loan
facility of SI International, Inc.  In addition, Moody's assigned
a senior implied rating of B1 and an SGL rating of SGL-2.
Proceeds from the $100 million term loan are expected to be used
to acquire Shenandoah Electronic Intelligence, Inc. for
approximately $75 million in cash, refinance existing indebtedness
and pay fees and expenses.  The revolver is expected to be unused
at closing.

The first time ratings assigned by Moody's:

   -- $50 million Senior Secured Revolving Credit Facility, rated
      B1;

   -- $100 million Senior Secured Term Loan Facility, rated B1;

   -- Senior Implied, rated B1;

   -- Senior Unsecured Issuer Rating, rated B2;

   -- Speculative Grade Liquidity Rating, rated SGL-2.

The ratings outlook is stable.  The ratings are subject to the
review of the final executed documents.

The ratings reflect:

    (i) risks related to the Company's rapid growth through
        acquisitions in 2004 and 2005;

   (ii) the Company's exposure to potential changes in government
        spending policies;

  (iii) significant contract re-competes in the next two years;

   (iv) the Company's small revenue base (pro forma revenues of
        about $320 million for the nine month period ended
        September 30, 2004) and limited financial resources
        compared to its larger industry competitors; and

    (v) strong competition in the Company's markets which may
        intensify due to the entrance of new or larger
        competitors, including those formed through consolidation,
        who have greater financial resources, larger client bases,
        and greater name recognition.

The ratings also reflect:

    (i) the Company's history of solid organic revenue growth and
        stable margins; strong credit metrics;

   (ii) long term contracts with a broad group of government
        agencies;

  (iii) track record of high percentage win rates on re-competes;

   (iv) significant contract backlog in relation to revenues
        (total backlog at September 30, 2004 was $884 million of
        which $142 million was funded); and

    (v) the continuing trend toward outsourcing of work by
        government agencies and good liquidity.

Although the total backlog amounts are significant, there is no
guarantee that these revenues will materialize.

In addition to the prospective acquisition of Shenandoah
Electronic, SI International purchased Bridge Technology
Corporation for $30 million in December 2004 and MATCOM
International Corporation for about $66 million in January 2004.
These acquired businesses represent a large portion of the
earnings and cash flow of SI International and will have a short
operating history under company management.  Potential risks
include the loss of key employees, changes in business
relationships with key customers and potential costs and
disruptions due to the integration of operations.

The assignment of the SGL-2 speculative grade liquidity rating
reflects the company's good liquidity profile and Moody's
expectation of stable free cash flows from operations, significant
projected availability under the $50 million revolving credit
facility and adequate cushion under bank covenants.  Cash on hand
and cash flow from operations are expected to cover ongoing cash
needs for the next twelve months, which primarily consist of
capital expenditures, required term loan amortization and an
excess cash flow sweep pursuant to the terms of the proposed
secured credit facility.

SI International is expected to have about $3 million of cash upon
completion of the Shenandoah Electronic acquisition and Moody's
expects SI International to generate about $9 million in free cash
flow from operations in 2005.  Absent an acquisition, Moody's
expects limited, if any, borrowings under the revolving credit
facility. Although financial covenant levels under the proposed
revolving credit facility have not been finalized, Moody's expects
SI International to have adequate cushion against the covenants
over the next twelve months.

The stable ratings outlook reflects the expected growth in the
government information technology budget and the belief that SI
International is competitively positioned to benefit from this
growth.  Moody's expects SI International to grow its revenues,
improve operating margins and utilize free cash flows to reduce
borrowings under its secured credit facility.  The ratings or
outlook could be pressured if the government's spending priorities
shift and cause the termination of any large contracts, if the
company is unable to win a significant portion of re-competes for
its large contracts or SI International is unable to win
sufficient new business to grow its revenue base.

The ratings or outlook could also be pressured by a significant
increase in leverage due to another large acquisition. The ratings
or outlook could be positively impacted if the company improves
free cash flow through stronger than expected revenue growth or
improved margins.

The $150 million in senior credit facilities will be secured by
substantially all the assets of SI International including a
first-priority pledge on 100% of the capital stock of domestic
subsidiaries.  An unconditional guarantee from all material
subsidiaries supports the credit facility.

SI International's credit metrics are strong within its rating
category.  Debt to total book capitalization is expected to be
about 41% upon the closing of the transaction.  Pro forma for the
acquisition of Bridge and Shenandoah, free cash flow to total debt
is expected to be about 9% in 2005.  Pro forma debt to EBITDA is
expected to be about 2.7 times in 2004 and 2.4 times in 2005.  Pro
forma EBITDA to interest is expected to be about 4.3 times in 2004
and 5.3 times in 2005.

Headquartered in Reston, Virginia, SI International, Inc. is a
provider of information technology and network solutions with the
Federal Government as a major client.  SI International's revenues
for 2003 and the first nine months of 2004, on a pro forma basis
for the acquisitions of Matcom, Bridge and Shenandoah, were about
$323 million and $320 million, respectively.


SI INTERNATIONAL: S&P Puts 'B+' Rating on $150 Million Sr. Loan
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to Reston, Virginia-based SI International Inc.

At the same time, Standard & Poor's assigned its 'B+' senior
secured debt rating, with a recovery rating of '3', to SI's
proposed $150 million senior secured bank facility, which will
consist of a $50 million revolving credit facility -- due 2010 --
and a $100 million term loan -- due 2011.

The senior secured bank loan rating, which is the same as the
corporate credit rating, along with the recovery rating, reflect
Standard & Poor's expectation of meaningful (50% to 80%) recovery
of principal by lenders in the event of a default or bankruptcy.
The proceeds from this facility, along with cash from the balance
sheet, will be used to finance the acquisition of Shenandoah
Electronic Intelligence Inc. -- SEI -- and to refinance existing
debt.

The outlook is positive.

"The ratings reflect SI's relatively modest position in the highly
competitive and consolidating government IT services market,
dependence on the federal government's spending initiatives, and
acquisitive growth strategy," said Standard & Poor's credit
analyst Ben Bubeck.  A predictable revenue stream, based upon
long-term contracts and the expectation that government-related
services business will remain solid over the intermediate
term, are partial offsets to these factors.

SI provides IT services and communications solutions almost
exclusively to the federal government.  The Department of Defense
is the company's largest customer, accounting for more than 50% of
SI's revenue during the nine months ended September 2004.  Pro
forma for the proposed credit facility, SI had approximately
$148 million in operating lease-adjusted debt as of December 2004.


TECO ENERGY: Discloses Final Settlement Rate for Equity Units
-------------------------------------------------------------
TECO Energy, Inc. (NYSE: TE) disclosed the final settlement rate
for its remaining outstanding 7,208,927 equity security units
(NYSE: TE-PRU) that were not tendered in the early settlement
offer completed in August 2004.  Each unit holder will receive
0.9509 shares of TECO Energy common stock per unit and cash in
lieu of fractional shares.  The rate is based on the average
trading price of TECO Energy common stock for the 20 consecutive
trading days ending Jan. 12, 2005, as required under the terms of
the units.  The average price for the period was $15.21.

As a result, on Jan. 18, 2005, each holder of the TECO Energy
units will purchase from TECO Energy 0.9509 shares of TECO Energy
common stock per unit for $25.00 per share, although not required
to make any additional cash payment.  The cash for the unit
holders' purchase obligation will be satisfied from the proceeds
received upon the maturity of a portfolio of U.S. Treasury
securities acquired in connection with the October 2004
remarketing of the trust preferred securities of TECO Capital
Trust II that formerly were part of the units.  This will result
in TECO Energy issuing approximately 6.85 million shares of common
stock and receiving approximately $180 million of proceeds from
the settlement.

As a result of the final settlement of the purchase contract
component of the units, the units will cease to be traded on the
New York Stock Exchange before the opening of the market today,
Jan. 18, 2005.

On Jan. 18, 2005, unit holders of record as of Jan. 14, 2005, will
receive the final regular quarterly cash distribution of
approximately $0.59 per unit.

The Bank of New York is acting as purchase contract agent for the
final settlement.  Questions regarding the exchange should be
directed to Barbara Bevelaqua at (212) 815-5091.

                        About the Company

TECO Energy, Inc. (NYSE: TE) -- http://www.teconergy.com/-- is an
integrated energy-related holding company with core businesses in
the utility sector, complemented by a family of unregulated
businesses.  Its principal subsidiary, Tampa Electric Company, is
a regulated utility with both electric and gas divisions (Tampa
Electric and Peoples Gas System).  Other subsidiaries are engaged
in waterborne transportation, coal and synthetic fuel production
and independent power.

                          *     *     *

As reported in the Troubled Company Reporter on Jan. 10, 2005,
Fitch Ratings does not expect any changes to the current ratings
or Outlook for TECO Energy following their announcement earlier
today that they plan to record impairment charges of $480 million
(after-tax) in the fourth quarter of 2004 related to the Dell,
McAdams, and Commonwealth Chesapeake power plants, as well as some
remaining unused steam turbines. The charges come as a result of
annual reviews of the carrying values of the assets and will
affect both net income and the balance sheet. Fitch rates TECO:

   -- Senior unsecured debt 'BB+';
   -- Preferred stock 'BB';
   -- Rating Outlook Stable.


TRANSTECHNOLOGY: To Trade on OTCBB After NYSE Delisting Reaffirmed
------------------------------------------------------------------
TransTechnology Corporation (NYSE: TT) has received notification
from the New York Stock Exchange that an NYSE Board Committee has
reaffirmed the previously announced staff decision to delist the
company's shares of common stock at an appeal hearing held on
January 5, 2005.  The company has taken steps to ensure that its
shares will trade on the Over-the-Counter Bulletin Board and will
make a follow-up announcement regarding the Company's new symbol
once determined by the OTCBB.

Robert White, the company's president and CEO stated, "While we
are disappointed by the decision of the NYSE, we have already
identified a market maker to facilitate the trading of our shares
on the OTCBB.  We believe that trading of our shares on the OTCBB
will provide an efficient mechanism for our shareholders.
Further, we will continue to complete all required SEC filings and
disclosures, and we will continue to communicate with our
investors as a public company."

The OTCBB -- http://www.otcbb.com/-- is a regulated quotation
service that displays real-time quotes, last sale prices and
volume information in over-the-counter securities.  An OTC equity
security is generally one not listed on the NYSE or any other
national securities exchange.  Quotations and trading information
for securities quoted through the OTCBB can be accessed via
business news and financial websites and through securities
brokers.

Trading in the company's shares on the NYSE will be suspended at
the close of the trading day on January 20, 2005.  The NYSE has
indicated that it may, at any time, suspend a security if it
believes that continued dealings in the security on the NYSE are
not advisable.

                        About the Company

TransTechnology Corporation -- http://www.transtechnology.com/--
operating as Breeze-Eastern -- http://www.breeze-eastern.com/--  
is the world's leading designer and manufacturer of sophisticated
lifting devices for military and civilian aircraft, including
rescue hoists, cargo hooks, and weapons-lifting systems.  The
company, which employs approximately 180 people at its facility in
Union, New Jersey, reported sales from continuing operations of
$64.6 million in the fiscal year ended March 31, 2004.

At Sept. 26, 2004, TransTechnology Corp.'s balance sheet showed a
$4,790,000 stockholders' deficit, compared to a $3,787,000 deficit
at March 31, 2004.


UAL CORPORATION: Court Issues TRO Enjoining U.S. Bank, RAIC & LA
----------------------------------------------------------------
As reported in the Troubled Company Reporter on Dec. 22, 2004, UAL
Corporation and its debtor-affiliates asked the U.S. Bankruptcy
Court for the Northern District of Illinois for a temporary
restraining order or preliminary injunction enjoining U.S. Bank,
the City of Los Angeles and the Regional Airports Improvement
Corporation from enforcing any remedies under the Lease Agreements
and Bond Agreements.

                 Debtors Ask for Summary Judgment

Pursuant to Rule 7056 of the Federal Rules of Bankruptcy
Procedure, the Debtors ask for summary judgment that:

  a) the Bond Agreements constitute "disguised financing"
     arrangements rather than true leases, and are not subject to
     Section 365 of the Bankruptcy Code; and

  b) the Bond Agreements are independent from the Lease Agreement
     that governs the Debtors' use and occupancy of terminal
     facilities at LAX.

James H.M. Sprayregen, Esq., at Kirkland & Ellis, says that when
deciding whether an agreement represents a "true lease," the
Court should apply five factors:

  1) Whether the rent was calculated to compensate for use of the
     land or for another purpose, such as ensuring a rate of
     return on an investment;

  2) Whether the purchase price was related to fair market value
     of the land;

  3) Whether the property was purchased by the lessor for the
     lessee's use;

  4) Whether the transactions was called a lease to gain certain
     advantages, like tax treatment; and

  5) Whether the lessee assumed many of the obligations normally
     reserved for the lessor.

Based on the this criteria, Mr. Sprayregen asserts that the Bond
Agreements are clearly "disguised" financing arrangements, to
which Section 365 does not apply.  The Debtors' rent was
calculated to ensure interest and principal payments on the
Bonds, not for use of the LAX facilities.  The LAX Sublease
rental payments were calculated based on the amount necessary to
finance LAX projects, not fair market value of the land.  The
Bonds were issued to finance the LAX Projects for the Debtors'
sole benefit, with no benefit to the Bonds' Trustees.  The Bonds
were stylized as "leases" to avoid certain constitutional debt
limitations to obtain tax-exempt municipal bond financial rates.
Unlike a true lessee, the Debtors have taken on many of the
burdens that are usually borne by the lessor, namely paying cost
overruns, assuming liability for construction contracts, paying
taxes, providing insurance and making repairs and maintenance.

Mr. Sprayregen assures the Court that the Agreements cannot be
integrated with the true leases at LAX.  The nature and purpose
of the Bond Agreements are distinct from that of the LAX Terminal
Lease.  The consideration paid under the Agreements is allocable
between the debt service on the Bonds and the rental payments for
leased premises.  Last, the Agreements are not interrelated in
any way.

                          *     *     *

Judge Wedoff issues a temporary restraining order enjoining U.S.
Bank, the City of Los Angeles and the Regional Airports
Improvement Corporation from enforcing any remedies under the
Lease Agreements and Bond Agreements.

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


UAL CORP: Retired Pilots Want Sec. 1113 Representative Appointed
----------------------------------------------------------------
The Air Line Pilots Association refused to represent its retirees
in the Section 1113 process in UAL Corporation and its debtor-
affiliates' bankruptcy cases.  In response, the United Retired
Pilots Benefit Protection Association, an Illinois not-for-profit
corporation representing 3,089 retired United Air Lines Pilots,
asked the U.S. Bankruptcy Court for the Northern District of
Illinois to appoint an authorized Section 1113 representative to
defend its members' rights to receive vested pension benefits.
The URPBPA also wanted to participate in the Section 1113(c)
hearing.  Judge Wedoff, however, denied the URPBPA's requests.

Consequently, the URPBPA advises the Bankruptcy Court that it
will appeal Judge Wedoff's Order to the United States District
Court for the Northern District of Illinois.  In the appeal, the
URPBPA wants:

  a) the Bankruptcy Court's Order denying its request reversed;

  b) its request for appointment of a Section 1113 representative
     granted;

  c) the bargaining process between the Debtors and the URPBPA's
     authorized representative to commence; and

  d) any agreement that impacts the retired pilots between the
     Debtors and Air Line Pilots Association to be declared null
     and void.

Frank Cummings, Esq., at LeBoeuf, Lamb, Greene & MacRae, in
Washington, D.C., explains that the appointment of a Section 1113
representative would allow the retired pilots to bargain with the
Debtors on their rights to receive their pension benefits.

Mr. Cummings points out that Section 1113 requires a debtor to
make a proposal to an authorized representative before rejecting
a collective bargaining agreement.  The Debtors must comply with
this provision before modifying the retired pilots' right to
receive their pension benefits.  Since the retired pilots have no
Section 1113 representative, they are being denied their right to
bargain with the Debtors.

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)


UNITED REFINING: Earns $4.2 Million of Net Income in First Quarter
------------------------------------------------------------------
United Refining Company, a leading regional refiner and marketer
of petroleum products, reports that net sales for the three months
ended November 30, 2004, were $426.1 million, an increase of $95.3
million, or 28.8% over the November 30, 2003, net sales of $330.8
million.  The increase in net sales for the first quarter of
fiscal year 2005 resulted from a 19.5% increase in retail sales
and a 40.2% increase in wholesale sales.  Operating income for the
three months ended November 30, 2004 was $13.1 million, matching
the $13.1 million operating income over the three months ended
November 30, 2003.  Net Income for the first quarter of fiscal
2005 was $4.2 million, $.2 million less than first quarter 2004,
due mainly to increased interest expense.

Earnings before interest, taxes, depreciation and amortization
(EBITDA) for the three months ended November 30, 2004, was
$17.1 million compared to $16.8 million as of November 30, 2003.
United Refining Company uses the term EBITDA or Earnings Before
Interest, Income Taxes, Depreciation and Amortization, which is a
term not defined under United States Generally Accepted Accounting
Principles.  The Company uses this term because it is a widely
accepted financial indicator utilized to analyze and compare
companies on the basis of operating performance and is used to
calculate certain debt covenant ratios included in several of the
Company's debt agreements.

United Refining Company -- http://www.urc.com/-- is an
independent refiner and marketer of petroleum products.  It fuels
cars, trucks, airplanes and farm and construction equipment, as
well as the homes and industries in one of America's largest
concentrations of people and commerce.  Their market includes
Pennsylvania and portions of New York and Ohio.

                          *     *     *

As reported in the Troubled Company Reporter on July 27, 2004,
Standard & Poor's Ratings Services assigned its 'B-' rating to
United Refining Company's $200 million senior notes due 2014.


UNO RESTAURANT: S&P Puts 'B-' Rating on $140 Million Senior Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Boston, Massachusetts-based Uno Restaurant
Holdings Corporation, the parent company of casual dining operator
Uno Chicago Grill.

The rating outlook is stable.  At the same time, Standard &
Poor's assigned its 'B-' rating to the company's proposed
$140 million senior secured second-lien notes due 2011.

The notes are rated one notch lower than the corporate credit
rating due to the amount of priority debt in the capital
structure.  Proceeds from the notes and a credit facility will be
used to partly fund the acquisition of Uno Chicago Grill by Centre
Partners, a private equity firm.  Pro forma for the transaction,
the company will have about $158 million of funded debt
outstanding.  The ratings are based on preliminary terms and
conditions, and are subject to review once final documentation is
received.

"The ratings reflect Uno's leveraged capital structure, regional
concentration in the Northeastern U.S., participation in the
highly competitive casual dining restaurant industry, and
relatively small cash flow base," said Standard & Poor's credit
analyst Kristi Broderick.

Beginning in 1994, Uno has taken steps to reposition itself as a
suburban casual dining restaurant from an urban pizzeria, but has
retained its signature deep-dish pizza, which is its point of
differentiation among other casual dining concepts.  Over the last
few years, the company retrofitted its kitchens and broadened the
menu by introducing non-pizza items, which have increased as a
percentage of total sales, resulting in a more balanced mix of
gross profit dollars and margins.

However, Uno remains a small player in the casual dining
restaurant industry and is regionally concentrated, with about 50%
of company-owned restaurants located in either Massachusetts or
New York.  Other core markets include the suburban shopping
centers and regional mall areas of the Baltimore/Washington D.C.
area and Chicago.


US AIRWAYS: Court Approves IAM Collective Bargaining Pact
---------------------------------------------------------
On November 2 and 3, 2004, US Airways and its debtor-affiliates
delivered their Section 1114 Proposals for the Fleet Service
Employees, Mechanics and Maintenance Training Specialists
represented by the International Association of Machinists and
Aerospace Workers.  The IAM has elected to represent its own
current retirees as their "authorized representative" pursuant to
Section 1114(c) of the Bankruptcy Code.  Thus, the IAM retirees'
interests are not represented by the Retiree Committee appointed
by the United States Bankruptcy Court for Eastern the District of
Virginia.

The Debtors sought approximately $20,000,000 in annual cost
savings, by reducing certain retiree benefits related mostly to
health care.  Thereafter, the Debtors frequently met with the IAM
to reach a resolution.  On January 5, 2005, the Debtors and the
IAM reached mutually satisfactory modifications to the IAM
collective bargaining agreement, which are similar to the
modifications agreed to by the Retiree Committee.

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.
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.

Brian P. Leitch, Esq., at Arnold & Porter, in Denver, Colorado,
tells Judge Mitchell that the Agreement reflects a compromise
resulting from good faith, extensive arm's-length negotiations.
The negotiations involved trade-offs.  The resulting Agreement
addresses the Debtors' financial and transformational imperatives
in a manner that will best serve the Debtors, their bankruptcy
estates' and the interests of the IAM's current retirees.

The cost reductions for the IAM retirees were not available under
the Section 1114 Proposal.  For the Debtors, the Agreement
requires only a modest reduction in the Section 1114 cost
reductions and brings an important constituency into the growing
consensus of stakeholders supporting their reorganization efforts.
Modification of the Debtors' cost structure is a critical aspect
of the Debtors' Transformation Plan.

At the Debtors' request, Judge Mitchell approves 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)


VECTOR GROUP: SEC Declares Resale Registration Statement Effective
------------------------------------------------------------------
The Securities and Exchange Commission has declared effective
Vector Group Ltd.'s (NYSE: VGR) registration statement on Form
S-3.  The registration statement relates to resales by the holders
of up to $81.875 million principal amount of Vector Group's 5%
Variable Interest Senior Convertible Notes due 2011 and the common
stock issuable upon conversion of the notes.

The initial $65.5 million of notes and rights to purchase $16.375
million of additional notes were originally sold on Nov. 18, 2004,
in a private placement to qualified institutional buyers.  The
filing of this registration statement was required by the
registration rights agreement entered into by Vector Group in
connection with the sale of such notes and rights to purchase.

This press release shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of
these securities in any state in which such offer, solicitation or
sale would be unlawful prior to registration or qualification
under the securities laws of any such state.

A written prospectus meeting the requirements of Section 10 of the
Securities Act of 1933 may be obtained from:

         Vector Group Ltd.
         100 S.E. Second Street
         Miami, Florida 33131
         Attn: Investor Relations

                        About the Company

Vector Group -- http://www.vectorgroupltd.com/-- is a holding
company that indirectly owns Liggett Group Inc., Vector Tobacco
and a controlling interest in New Valley Corporation.

At Sept. 30, 2004, Vector Group's balance sheet showed a
$93,721,000 stockholders' deficit, compared to a $46,475,000
deficit at Dec. 31, 2003.


VENTAS REALTY: Moody's Affirms Ba3 Senior Debt Rating
-----------------------------------------------------
Moody's Investors Service has affirmed its Ba3 senior unsecured
debt rating of Ventas Realty Limited Partnership, the operating
partnership of Ventas, Inc.  The outlook for Ventas' ratings
remains positive. According to Moody's, the rating affirmation
reflects continued improvement in Ventas' fixed charge coverage,
progress in diversifying its tenant base, and the improvement in
overall quality of the property portfolio displayed by healthy
rent coverage.

The rating agency said that Ventas continues to strengthen its
financial profile.  Fixed charge coverage for the first nine
months of 2004 improved to 3.0x, from 2.3x for 2003.  Debt/EBITDA
was 3.9x at 9/30/04, compared to 3.5x at 12/31/03 and 4.5x at
12/31/02.  The REIT's liquidity is good, earmarked by a $300
million bank credit facility, of which $264 million is available,
and modest near-term debt maturities.  Ventas' floating-rate debt
exposure is attenuated through swaps.

Moody's notes that Ventas' ratings continue to be constrained by
the REIT's very high exposure to a single tenant, Kindred
Healthcare, asset concentration (approximately 83% of trailing
twelve month REIT revenues and notably lower than 2003 at 95%) in
skilled nursing facilities (SNFs) and long-term acute care
hospitals (LTACs) and secured debt at 26% of undepreciated book
assets.  The ratings also incorporate the firm's focus on highly
regulated health care segments, and the vulnerabilities these
assets have to shifts in government healthcare funding.

Although the REIT's continued efforts to reduce its tenant
concentration are encouraging, Moody's remains concerned about the
firm's potential earnings volatility due to its reliance on a
single operator to generate its earnings and operating in a highly
regulated industry subject to legislative shifts.  Should Ventas
need to replace Kindred as the operator of its properties, the
REIT may find it difficult to find replacement tenants in a timely
manner and at similar or higher rents.  This could lead to
disruptions in Ventas' cash flow and weakened performance. Moody's
notes, however, that Ventas' property portfolio consists of assets
that are generally highly productive, which should enhance its
ability to secure new operators.

Moody's stated that the positive rating outlook reflects the
strengthening fixed charge coverage and the expectation that
Ventas will continue to make meaningful progress to diversify its
revenue stream, and to reduce secured debt and overall leverage.
The rating agency assumes that any growth -- which is necessary to
address the Kindred concentration challenge -- will not come at
the expense of the REIT's balance sheet.

Material deterioration in Kindred's financial or operating
performance, or an inability by Ventas to diversify its asset
composition and tenant concentration, will result in at least a
change in rating outlook to stable.  A rating upgrade for Ventas
would depend on the ability of the REIT to reduce Kindred's
concentration closer to 60% of revenues, increase its property
diversity by reducing SNF and LTAC composition to below 75%,
reduce secured debt to below 20% of undepreciated book assets, and
maintain laddered debt and low floating-rate exposure.

Most of these goals would need to be achieved to warrant an
upgrade, with material progress on remaining ones.  Continued
building of Ventas management breadth is needed, too, as well as
decision-making and asset/tenant monitoring capacity, to secure
scalability of its business.  Any further rating upgrades would
necessitate much more material progress in tenant diversification
in particular, which may be difficult without a large acquisition.

The ratings affirmed with stable outlooks:

   -- Ventas Realty Limited Partnership -- Senior debt at Ba3;
      senior debt shelf at (P)Ba3; subordinated debt shelf at
      (P)B2

   -- Ventas, Inc. -- Preferred shelf at (P)B2

   -- Ventas Capital Corporation -- Senior debt shelf at (P)Ba3;
      subordinated debt shelf at (P)B2

Ventas, Inc. [NYSE: VTR] is a healthcare real estate investment
trust (REIT) that owns 42 long-term acute care hospitals, 201
nursing facilities, 29 assisted and independent living facilities,
8 medical office buildings, and 8 other healthcare assets, in 39
states.


VULCAN ENERGY: Moody's Lifts Sr. Implied Ratings from B1 to Ba2
---------------------------------------------------------------
Moody's Investors Service upgraded Vulcan Energy Corporation's
senior implied rating and $175 million 6-year senior secured Term
Loan B rating to Ba2 from B1, ending Vulcan's review for upgrade.
The rating outlook is stable.  Vulcan's principal assets of value
and source of cash flow are its unit equity interests in Plains
All-American Pipeline, L.P. (Baa3 senior unsecured note rating), a
master limited partnership engaged in the midstream crude oil
activities of field-level gathering, transporting, terminaling and
storage, marketing, and trading of crude oil.

Vulcan Energy's upgrade follows our earlier upgrade of Plains All-
American's senior ratings to Baa3 from Ba1, and moves Term Loan
B's rating from the original three rating notches below Plains
All-American's senior unsecured rating to the new two notch
differential.  Vulcan's ratings were assigned in March 2004 while
Plains All-American (then Ba1) was on review for upgrade to
investment grade.  Vulcan's ratings were assigned and
simultaneously placed on review for upgrade.

Plains All-American's upgrade reflected several years of
substantial value-adding growth, rising scale, regional
diversification across many oil producing basins and operating
functions, adequately equity funded growth, and comparatively
durable cash flow.  Furthermore, the MLP market has proceeded to
mature to the point where it can more readily absorb the ever-
larger new units offerings master limited partnership's such as
Plains All-American need to pro-actively launch in order to fund
acquisitions while remaining comfortably in the investment grade
zone.

Coupled with Plains All-American's financial profile, three key
factors restrain Plains All-American's ratings.  First, Plains
All-American serves the depleting North American crude oil
production sector, requiring Plains All-American to engage in
ongoing acquisitions and significant capital spending to achieve
growth.

As a master limited partnership, it also must deliver on
significant growth promises.  This dependence on acquisitions for
growth is only partly mitigated by Plains All-American's rising
exposure to rising imported crude oil volumes, including its
Cushing crude oil storage assets, its Canadian pipeline assets,
and its new part ownership in the Capline.

Second, Plains All-American runs a very large crude oil marketing
business that opportunistically conducts hedged trading to capture
crude oil regional or quality basis differentials, opportunities
when the forward curve changes shape, or when it moves from
backwardation to contango.  That business is fairly opaque and
must be conducted under tight risk management policies and
procedures.

Third, as a master limited partnership, Plains All-American must
pay out all free cash flow, well in excess of net income, to its
equity unit holders after interest expense and maintenance capital
spending.  If that outflow is not offset periodically with new
units offerings, not only is organic credit accretion not
possible, but leverage would rise automatically.

Combined Vulcan Energy and Plains All-American debt divided by
Plains All-American EBITDA, pro-forma for all acquisitions, yields
pro-forma Debt/EBITDA in the range of 4.4x.  This excludes debt at
Plains All-American's wholly-owned Plains Marketing, L.P., which
now has a $425 million self-liquidating secured revolver dedicated
to funding physical oil purchases for storage and related letters
of credit.

Moody's estimates year-end 2004 Plains All-American debt in the
range of $940 million, 2004 EBITDA of approximately $250 million
(approximately $270 million pro-forma for all acquisitions), 2005
interest expense in the range of $54 million to $58 million, and
annual maintenance capital spending in the range of $20 million.
Plains All-American's equity market capitalization is $2.5
billion.

Vulcan Energy holds:

   (i) a 44% interest in Plains All-American GP, LLC, which owns
       the 2% general partner interest in PAA, and

  (ii) 12.4 million units (22%) of Plain All-American's common
       limited partner units.

The limited partner interests are pledged as Term Loan B
collateral. Plains All-American's cash distributions to those
interests are Vulcan Energy's dominant source of cash flow.  Other
assets include 16 mmboe of high cost, low value, and
environmentally intensive South Florida oil reserves needing
extraordinarily strong prices to cover all costs.

Vulcan Energy's CEO and director, plus its former chairman and
still director, separately hold a combined 20% of Plains All-
American's 2% general partner interest, giving VEC effective
control over certain aspects of general partner activities and
decisions.  Independent private equity, long involved with Plains
All-American, holds the remaining 36% of the general partner.

Vulcan Energy's debt totals $240 million.  At Plains All-
American's expected 2005 average quarterly distribution of
approximately $0.625/unit, Vulcan Energy's limited partner units
would yield $31 million of cash flow.  At that implied level of
PAA payout, Vulcan Energy's 44% interest in the general partner
would generate another $7 million of cash flow.  Moody's expects
roughly $2 million of Vulcan Energy operating expense, excluding
the Florida oil production segment, and $10 million to $11 million
of 2005 VEC interest expense.

Term Loan B partially funded Vulcan Energy's $456 million
acquisition of Plains Resources, Inc., on July 23, 2004 ($411
million for Plain Resources equity, $30 million for its debt, and
$15 million for transaction costs).  The balance was funded by a
$75 million 5-year senior unsecured loan guaranteed by Paul G.
Allen, a bit over $200 million of cash common equity from Vulcan
Capital, and $25 million of rollover equity from previous Plain
Resources top management.  Key Plain Resources assets of value
were its 44% interest in Plains All-American's general partner and
the Plains All-American limited partner units.

Though Vulcan Energy's small medium sour crude oil reserves and
production segment is currently cash flow positive during
historically high prices, we would expect it to turn flat to
negative at more moderate but still historically high oil prices.
Furthermore, Vulcan Energy's production is in decline and faces
additional future plugging, abandonment, and environmental
liabilities.

The reduction from the original three-notch differential to the
current two notches between the Plains All-American and Vulcan
Energy ratings reflects:

   i) Plains All-American 's Baa3 investment grade rating, larger
      scaler, diversification, and durable cash flow;

  ii) that material Vulcan Energy debt reduction has begun and
      that a cash  sweep is progressively reducing Vulcan Energy
      debt;

(iii) that TLB is secured by common limited partner units rather
      than subordinated limited partner units; and

(iv) that Vulcan Energy and its board members together have
      sufficient general partner interests to have considerable
      influence on PAA cash distribution policy.

The need for notching between the Plains All-American and Vulcan
Energy ratings is driven by several factors.  Term Loan B is
structurally subordinated to all debt and other liabilities at
Plains All-American.  Plains All-American can reduce cash
distributions if faced with reduced cash flow, cutting VEC cash
flow and hurting Term Loan B collateral values.  Term Loan B is
also exposed to repeated Plains All-American acquisition event and
releveraging risk and Plains All-American performance volatility
could arise from its very large low margin crude oil marketing and
trading business.

Once Vulcan Energy meets the stipulated Term Loan B debt service
coverage tests, the Paul Allen guaranteed $75 million loan can be
refinanced pari-passu with Term Loan B and/or Term Loan B 's cash
sweep proceeds can be allocated fully to prepay the $75 million
loan rather than Term Loan B.  Roughly $10 million of Term Loan B
has been repaid since initial drawdown.

It is possible that the Term Loan B cash flow coverage test
(4.75:1) will be met sometime this year.  If that occurs and is
sustained, Vulcan Energy would then need only to make minimum 50%
TLB annual debt repayments.  At 4.25:1 coverage, the cash flow
sweep falls to zero. Thus, depending on how much of Term Loan B is
paid off this year before the cash sweep switches to repay the $75
million loan, a Term Loan B bullet in the range of $100 million to
$130 million could remain at Term Loan B maturity.

Plains All-American's midstream activities move roughly 2.5
million to 2.6 million barrels of crude oil per day at an average
EBITDA margin approximating $0.28/barrel to $0.30/barrel.  A
minority of that volume is driven by the natural flow of regional
crude oil volume from producing regions to consuming region.
Volumes are split between: general pipeline tariff throughput;
All-American Pipeline in California; crude oil gathering;
opportunistic and crude oil bulk purchases; crude oil terminal
throughput; and third party storage volumes.

Core to the Plains All-American and Vulcan Energy upgrades is
Moody's assumption that Plains All-American will continue to
pursue the equity funding strategy for acquisitions it has
communicated to Moody's and to the markets.  MLP's do not tend to
organically credit accrete since they are required to essentially
distribute all free cash flow after interest expense and
maintenance capital to their unit holders.

It is therefore important to the ratings that Plains All-
American's growth and funding objectives not be overly aggressive
and that acquisitions and growth capital spending continue to be
at least roughly 50% funded by new equity issuance.  It is also
important to the ratings that Plains All-American's risk
management policies and practices continue protect it from
material hedging losses.

Plains All-American has built an increasingly integrated, large,
geographically diversified, profitable business of midstream crude
oil assets and services.  It has done this with a patient series
of amply equity-funded acquisitions of mid-stream assets,
subsequent integration, and a modest degree of organic growth.
Its hard asset portfolio consists of crude oil gathering,
pipeline, storage, and terminaling assets that move crude oil from
the producing regions along the Gulf Coast, the Southwest, Mid-
continent, West and East Texas, California, and Canada to key
refining centers along the Gulf Coast and in the Rocky Mountains,
Midwest, and California.

Plains All-American has boosted its proportion of fee-based versus
trading and marketing cash flow and has reduced the proportional
impact on cash flow of declining Point Arguello and Santa Ynez
offshore California production, with resulting throughput decline
through its All-American Pipeline.  PAA has also boosted its Basin
pipeline volumes, captured by its planned shutdown of its Rancho
line when it acquired Basin.

While the All-American Pipeline, which is in secular decline,
remains Plains All-American 's second most profitable asset, and
by far its highest margin significant asset, it now generates less
than 20% of EBITDA.  Furthermore, now-unaffiliated Plains
Exploration & Production's success in finally winning drilling
permits for offshore California, and its initial Rocky Point
success, may slow All-American throughput decline.

Vulcan Energy's/Plains All-American's ratings are further
supported by:

  (i) Plains All-American's strategically important crude oil
      storage assets at Cushing, Oklahoma;

(ii) Plains All-American's proven access to the units market and
      generally prudent leverage policy;

(iii) TLB's more than roughly 250% perfected collateral coverage
      by the Plains All-American limited and general partner
      units, providing significant cushion for value collapse if
      PAA ever needed to cut its units distributions.

The ratings actions include:

   i) Upgrade to Ba2 from B1 VEC's 6 year $175 million senior
      secured Term Loan B;

  ii) Upgrade to Ba2 from B1 VEC's senior implied rating; and

iii) Upgrade to Ba3 from B2 VEC's notional senior unsecured
      issuer rating.

Vulcan Energy Corporation and Plains Resources, Inc., are
headquartered in Houston, Texas.


WEIRTON STEEL: Inks Pact to Settle Shiloh Landfill Issues
---------------------------------------------------------
Pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure, the Weirton Steel Corporation Liquidating Trustee asks
the U.S. Bankruptcy Court for the Northern District of West
Virginia to approve a compromise and settlement reached among
the Weirton Steel Corporation Liquidating Trust, the West
Virginia Department of Environmental Protection and Shiloh River
Corporation.

Mark E. Freedlander, Esq., at McGuireWoods, LLP, in Pittsburgh,
Pennsylvania, relates that prior to Petition Date, Weirton
disposed of certain non-hazardous waste materials from its
operations at an off-site location known as the Shiloh Landfill,
which is owned by Shiloh and operated by Shiloh and Weirton.

On September 29, 1997, Weirton, Shiloh and the West Virginia DEP
entered into a Consent Order and Agreement to address the
treatment of the Shiloh Landfill with the West Virginia
Environmental Quality Board.  In 1999, Weirton and Shiloh closed
the Shiloh Landfill.  On April 15, 1999, the West Virginia DEP
issued Solid Waste/NPDES Permit No. WV 0079081, and Shiloh and
Weirton became co-permittees for the Shiloh Landfill.

Shiloh and the West Virginia DEP objected to the sale of
Weirton's assets to International Steel Group.  They allege that
the ISG Sale and the Sale Order would permit Weirton to discharge
its otherwise non-dischargeable environmental obligations and
responsibilities relating to the Shiloh Landfill.  The West
Virginia DEP filed an appeal of the ISG Sale Order in the United
States District Court for the Northern District of West Virginia.

On April 15, 2004, the Permit for the Shiloh Landfill was about
to expire by its term.  The West Virginia DEP issued
Administrative Order No. 5565, which extended the Permit and
required Weirton, as co-permittee with Shiloh, to file an
application to reissue the Permit to the West Virginia Quality
Board.  Weirton appealed the Administrative Order.

After the Closing of the ISG Sale and pending the outcome of the
Sale Appeal and the Board Appeal, Weirton is funding amounts
minimally necessary to maintain the environmental status quo at
the Shiloh Landfill in accordance with a May 24, 2004, Order
entered by the Quality Board authorizing Weirton, Shiloh and the
West Virginia DEP to intervene, and granting stay.

The West Virginia DEP filed Administrative Priority Claim No.
20406 for $299,750 in Weirton's case, which included:

   -- a claim for $187,500 in postpetition civil penalties;

   -- a contingent amount of $60,000 to $70,000 per year in
      injunctive relief for the 30-year post-closure period
      related to the Shiloh Landfill pending the outcome of the
      Sale Appeal; and

   -- $112,250 in postpetition stipulated penalties related to a
      Consent Decree entered in Civil Action 5:96-CV-171.

The West Virginia also filed Claim No. 2742 in a contingent and
unliquidated amount.  Shiloh did not file a proof of claim in
Weirton's bankruptcy proceedings.

The West Virginia DEP alleges, in addition to the claims it
asserts against Weirton, that certain individuals formerly
employed by Weirton and the current authorized agent of Weirton
may have personal liability to the Department under certain
circumstances.

The Weirton Trustee does not agree with the West Virginia DEP's
assertion.  The Weirton Trustee disputes the amount, validity and
priority of the claims the West Virginia DEP assert.

The Liquidating Trust, the West Virginia DEP and Shiloh want to
resolve the Claims and the Appeal Dispute, without any admission
of liability, to avoid the costs, risks, delay and uncertainty
associated with litigation and claims disputes.

The primary terms of the parties' Settlement Agreement are:

   (a) In full and final payment and satisfaction of all West
       Virginia DEP claims related to the Shiloh Landfill,
       Weirton will pay the Department $250,000 as an allowed
       administrative priority claim.  The amount will be placed
       in an interest bearing trust by the West Virginia DEP and
       will be used with respect to the regulatory compliance,
       maintenance and reclamation of the Shiloh Landfill;

   (b) In full payment and satisfaction of all claims of the West
       Virginia DEP may have or have had in Weirton's case,
       except as not otherwise waived or released in the
       Compromise and Settlement, and specifically, in full
       payment and satisfaction of those postpetition stipulated
       penalty claims related to the Consent Decree in Civil
       Action 5:96-CV-171, the Weirton Trust will pay the West
       Virginia DEP $65,000 as an allowed administrative priority
       claim.  Notwithstanding the ultimate status of the
       administrative solvency of the Weirton bankruptcy estate,
       no portion of the Settlement Amounts will be subject to
       recovery or disgorgement once paid;

   (c) Upon payment of the Settlement Amounts, any and all claims
       against Weirton or the Weirton Trustee that the West
       Virginia DEP has filed or could file in the future will be
       disallowed and expunged;

   (d) The West Virginia DEP will take all necessary action to
       dismiss the Sale Appeal, with each party bearing its own
       costs;

   (e) Prior to the execution of the Compromise and Settlement,
       the parties entered into a Consent Judgment, which
       dismissed the Board Appeal, with each party to bear its
       own costs;

   (f) Neither the West Virginia DEP nor Shiloh will seek other
       or further payment from the Weirton Trustee for any claim
       of any kind or nature arising from or relating to the
       Shiloh River Landfill, except for any liabilities arising
       from the illegal disposal of waste by Weirton at the
       Shiloh River Landfill;

   (g) The West Virginia DEP will forever release and discharge
       Weirton from and all claims arising from the illegal
       disposal of waste by Weirton at the Shiloh River Landfill;

   (h) Shiloh, its successors and assigns, will forever release
       and discharge Weirton from any and all claims relating in
       any way to matters involving the Shiloh River Landfill,
       excepting any liabilities arising from the illegal
       disposal of waste by Weirton at the Shiloh River Landfill;
       and

   (i) The Weirton Trustee will forever release and waive any and
       all claims of Weirton or the Weirton Trustee against the
       West Virginia DEP or Shiloh related to the Shiloh
       Landfill.

Mr. Freedlander points out that without the settlement, the
parties' dispute could:

   -- substantially delay the distribution process;

   -- increase costs associated with litigating the Claims and
      Appeal Dispute; and

   -- result in a substantial dilution of the distributions to
      creditors holding allowed claims, if the West Virginia DEP
      or Shiloh were to prevail.

Headquartered in Weirton, West Virginia, Weirton Steel Corporation
was a major integrated producer of flat rolled carbon steel with
principal product lines consisting of tin mill products and sheet
products.  The company was the second largest domestic producer of
tin mill products with approximately 25% of the domestic market
share.  The Company filed for chapter 11 protection on May 19,
2003 (Bankr. N.D. W. Va. Case No. 03-01802).  Judge L. Edward
Friend, II, administers the Debtors cases.  Robert G. Sable, Esq.,
Mark E. Freedlander, Esq., David I. Swan, Esq., James H. Joseph,
Esq., at McGuireWoods LLP, represent the Debtors in their
liquidation efforts.  Weirton sold substantially all of its assets
to Wilbur Ross' International Steel Group.  Weirton's confirmed
Plan of Liquidation became effective on Sept. 8, 2004. (Weirton
Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


WORLDCOM INC: Bondholders Suit Against Underwriters Going to Trial
-----------------------------------------------------------------
Following fact discovery, the Lead Plaintiffs in a consolidated
securities class action arising from the collapse of WorldCom,
Inc., asked the U.S. District Court for the Southern District of
New York to find that certain of WorldCom's financials
incorporated in the 2000 and 2001 registration statements for two
WorldCom bond offerings contained material misstatements.

The allegedly false statements on which the Lead Plaintiffs'
request is based relate to the reporting of WorldCom's line costs,
capital expenditures, depreciation and amortization, assets, and
goodwill.

The Lead Plaintiffs allege that the investment banks that
underwrote the 2000 and 2001 Offerings violated Sections 11 and
12(a)(2) of the Securities Act of 1933, 15 U.S.C. Sections 77k and
77l.

The Plaintiffs assert that the Underwriters did almost no
investigation of WorldCom in connection with their underwriting of
the bond offerings for the company, and because they did
essentially no investigation, will be unable to succeed with their
defense that they were diligent.  The Lead Plaintiff argue that
there were "red flags" that should have led the Underwriters to
question even the audited financials filed by WorldCom.

The Lead Plaintiffs in the Securities Litigation are:

   -- HGK Asset Management;

   -- Alan G. Hevesi, Comptroller of the State of New York, as
      Administrative Head of the New York State and Local
      Retirement Systems and as Trustee of the New York State
      Common Retirement Fund; and

   -- New York State Common Retirement Fund.

For their part, the Underwriter Defendants moved for summary
judgment on the Sections 11 and 12(a)(2) claims.  The
Underwriters sought a declaration that they have no liability for
any false statements in the WorldCom financials that accompanied
the registration statements or for the alleged omissions from
those registration statements.

The Underwriter Defendants allege that WorldCom management
concealed the fraud from almost everyone within WorldCom, from
WorldCom's outside auditor, and from the Underwriters themselves.
The Underwriters assert that they were entitled to rely on
WorldCom's audited financial statements as accurately describing
the company's financial condition, and also on the comfort letters
that WorldCom's outside auditor provided for the unaudited
financial statements.

The Underwriter Defendants also argue that their due diligence
efforts should not be measured solely by the work that they
undertook in connection with the bond offerings themselves, but
should be assessed against a background of their long term
familiarity and work with the company.  The Underwriters point out
that much of the information that was allegedly omitted from the
bond registration statements was already known to the public.

The Underwriter Defendants believe that they are entitled to
further discovery of the Lead Plaintiffs' experts and the
witnesses in Bernard Ebbers' criminal trial.  The Underwriters
contend that the witness will agree that no amount of due
diligence would have uncovered the accounting fraud.

The Underwriter Defendants are:

   -- Salomon Smith Barney, Inc., now doing business as Citigroup
      Global Markets Inc., and Salomon Brothers International
      Limited;

   -- J.P. Morgan Chase & Co., J.P. Morgan Securities, Ltd., &
      J.P. Morgan Securities, Inc.;

   -- Banc of America Securities LLC;

   -- Chase Securities Inc.;

   -- Lehman Brothers Inc., Blaylock & Partners, L.P.;

   -- Credit Suisse First Boston Corp.;

   -- Deutsche Bank Alex. Brown, Inc., now known as Deutsche Bank
      Securities, Inc.;

   -- Goldman, Sachs & Co.;

   -- UBS Warburg, LLC;

   -- ABN AMRO, Inc.;

   -- Utendahl Capital;

   -- Tokyo-Mitsubishi International plc;

   -- Westdeutsche Landesbank Girozentrale;

   -- BNP Paribas Securities Corp.;

   -- Caboto Holding SIM S.p.A.;

   -- Fleet Securities Inc.; and

   -- Mizuho International plc

In a 159-page Opinion and Order dated December 15, 2004, District
Court Judge Denise Cote notes that it is undisputed that at least
as of early 2001, WorldCom executives engaged in a secretive
scheme to manipulate WorldCom's public filings concerning
WorldCom's financial condition.  The District Court finds no
disputed issue of material fact regarding the falsity of
WorldCom's first quarter financial statement for 2001 insofar as
it reported WorldCom's line costs or the materiality of the
allegedly false statement to investors purchasing notes in the
2001 offering.

Accordingly, Judge Cote rules that the Lead Plaintiffs are
entitled to summary judgment on the issue of whether the
Registration Statement for the 2001 Offering was false and
misleading.  The Lead Plaintiff's request for summary judgment on
the 2000 Offering and on any other purported false statement made
in connection with the 2001 Offering is denied.

Judge Cote holds that, because those public filings were
incorporated into the registration statements for the two bond
offerings, the Underwriters are liable for those false statements
unless they can show that they were sufficiently diligent in their
investigation of WorldCom in connection with the bond offerings.

Judge Cote explains that underwriters can rely on an accountant's
audit opinion incorporated into a registration statement in
presenting a defense under Section 11(b)(3)(C) of the Securities
Act.  Underwriters may not rely on an accountant's comfort letters
for interim financial statements in presenting such a defense.
Comfort letters do not "expertise any portion of the registration
statement that is otherwise non-expertised," Judge Cote says,
citing William F. Alderman, Potential Liabilities in Initial
Public Offerings, in How To Prepare an Initial Public Offering
2004 405-06 (2004).

Judge Cote also points out that the Committee on Federal
Regulation of Securities in its Report of Task Force on Sellers'
Due Diligence and Similar Defenses Under the Federal Securities
Laws, 48 Bus. Law. 1185, 1210 (1993), held that underwriters
"remain responsible" for unaudited interim financial information
as in the case of other non-expertised information.

Judge Cote holds that underwriters perform a different function
from auditors.  They have special access to information about an
issuer at a critical time in the issuer's corporate life, at a
time it is seeking to raise capital.  The public relies on the
underwriter to obtain and verify relevant information and then
make sure that essential facts are disclosed.

"Underwriters should ask those questions and seek those answers
that are appropriate in the circumstances.  They are not being
asked to duplicate the work of auditors, but to conduct a
reasonable investigation," Judge Cote says.

A copy of Judge Cote's Opinion is available for free at:

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

Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532).  On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts.  The Bankruptcy Court confirmed WorldCom's Plan on October
31, 2003, and on April 20, 2004, the company formally emerged from
U.S. Chapter 11 protection as MCI, Inc. (Worldcom Bankruptcy News,
Issue No. 69; Bankruptcy Creditors' Service, Inc., 215/945-7000)


* King & Spalding Increases New York Office Space by 30 Percent
---------------------------------------------------------------
King & Spalding LLP, a leading international law firm, reports the
expansion of its midtown Manhattan office with the leasing of two
additional floors at its location at 1185 Avenue of the Americas
and the extension of its lease to the year 2025.  Michael O'Brien,
managing partner of the firm's New York office, said King &
Spalding's strength in the region continues to grow, especially in
the areas of securities litigation, mergers and acquisitions and
intellectual property litigation.  The expansion will allow the
firm to handle increasing client demand here.

"Our rapid growth in this office-especially in the past two years-
means that our 185 lawyers and 175 staff are currently working
nearly shoulder-to- shoulder," O'Brien said.  "The new space will
allow us not only to spread out, but also to continue to grow to
meet client demand.  Importantly, it will ensure our continued
strong presence in this major money center and permit us to
provide superior service to our clients without disruption."

The New York office of King & Spalding was opened in 1990 with 3
lawyers.  In the past four years, the office has doubled in size.
An influx of 20 new lawyers last year in the intellectual property
practice, as well as the arrival of new partners in M&A, financial
transactions and private equity, put a strain on the firm's
existing 151,000 square feet of space.

King & Spalding occupies space on floors 30 through 35 of 1185
Avenue of the Americas and is the building's largest tenant.  The
firm is taking over the 36th and 37th floors, for an additional
52,000 square feet.  Christopher B. Price, a partner in firm's New
York Real Estate practice, negotiated the deal on behalf of King &
Spalding.

The New York office of King & Spalding provides a wide range of
services to clients the world over.  Chief among its practices are
those specializing in business litigation, corporate finance,
energy, financial restructuring, private equity, mergers and
acquisitions, tax and real estate.  Its clients include numerous
banks and financial institutions and leading corporations, such as
Sprint Corporation, Lehman Brothers, The Coca-Cola Company and
Credit Suisse First Boston LLC.  Earlier this month, King &
Spalding represented Sprint Corporation in its $35 billion merger
with Nextel Corporation.

                   About King & Spalding LLP

King & Spalding LLP -- http://www.kslaw.com/-- is an
international law firm with more than 800 lawyers in Atlanta,
Houston, London, New York and Washington, D.C.  The firm
represents more than half of the Fortune 100, and in a Corporate
Counsel survey in October 2004 was ranked one of the top ten firms
representing Fortune 250 companies overall.


* Sandler O'Neill Names Six New Principals
------------------------------------------
Sandler O'Neill & Partners, L.P., a full-service investment
banking firm specializing in financial services companies, had
named six individuals to Principal.  The new Principals include
senior professionals in investment banking, equity research and
capital markets, and were selected based on their significant
contributions to the firm and commitment to its continued growth
and success.

The recently named Principals are:

   -- Mary Anne Callahan.  Ms. Callahan joined the firm's New York
      office as a Managing Director in the Investment Banking
      Group in October 2002.  She advises clients on a wide
      variety of investment banking issues with a special focus on
      community banks.

   -- Peter Finnerty. Mr. Finnerty joined the firm's Atlanta
      office as a Managing Director in the Investment Banking
      Group in June 2002.  He specializes in advising banks,
      thrifts and other financial institutions on mergers,
      acquisitions, financing alternatives and other strategic
      matters.

   -- Richard Repetto.  Mr. Repetto joined the firm's New York
      office as an Associate Director in the Equity Research Group
      in November 2003.  He covers companies in the eBrokerage,
      Execution Services and eSpecialty Finance sectors.

   -- Alan Roth.  Mr. Roth joined the firm's New York office as a
      trader in October, 2001.  He has more than 15 years
      experience in the mortgage-backed securities business,
      primarily trading whole loans and agency collateralized
      mortgage obligations (CMO's).

   -- John Sparacio.  Mr. Sparacio joined the firm's New York
      office as a Vice President in the Accounting Group in April
      1996. He was promoted to Associate Director in 1998 and
      Managing Director in 2000.  He oversees the preparation of
      the firm's financial statements and its regulatory reporting
      requirements.

   -- Ed Stein.  Mr. Stein joined the firm's New York office as an
      Associate in the Fixed Income Group in October 1992.  He was
      promoted to Associate Director in 1995 and Managing Director
      in 1997.  He works with commercial banks and thrift clients
      advising on asset liability management, strategic business
      planning and balance sheet restructuring.

"It is with great enthusiasm that I announce the promotions of
these six outstanding professionals," said Jimmy Dunne, Senior
Managing Principal.  "Their commitment to ensuring excellent
client service and their performance in their specific areas of
expertise have been and will continue to be invaluable assets to
Sandler O'Neill."

The promotions took effect on January 1, 2005.

              About Sandler O'Neill & Partners, L.P.

Founded in 1988, Sandler O'Neill & Partners --
http://www.sandleroneill.com/-- is a full-service investment
banking firm dedicated to providing comprehensive, innovative
advisory, and transaction execution services to the financial
industry.  The firm specializes in strategic business planning,
mergers and acquisitions, capital markets, mutual-to-stock
conversions, investment portfolio and interest rate risk
management, fixed income securities transactions, and mortgage
finance restructurings.  Sandler O'Neill is also a market maker in
hundreds of financial stocks and publishes equity and fixed income
research focused on selected banks, thrifts and insurance
companies, credit card companies, investment banks, asset managers
and specialty finance companies.


* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
                                Total
                                Shareholders  Total     Working
                                Equity        Assets    Capital
Company                 Ticker  ($MM)          ($MM)     ($MM)
-------                 ------  ------------  -------  --------
Airgate PCS Inc.        CSA         (80)         267       24
Akamai Tech.            AKAM       (144)         189       63
Alaska Comm. Syst.      ALSK        (29)         642       73
Alliance Imaging        AIQ         (41)         654       36
Amazon.com              AMZN       (721)       2,109      642
Ampex Corp.             AEXCA      (140)          32       12
AMR Corp.               AMR        (314)      29,261   (1,824)
Amylin Pharm. Inc.      AMLN        (42)         402      325
Arbinet-Thexchan.       ARBX         (1)          70       11
Atherogenics Inc.       AGIX        (19)          93       77
Blount International    BLT        (283)         423      103
CableVision System      CVC      (1,669)      11,795      223
CCC Information         CCCG       (131)          80       (8)
Cell Therapeutic        CTIC        (52)         174       87
Centennial Comm         CYCL       (516)       1,608      169
Choice Hotels           CHH        (175)         271      (16)
Cincinnati Bell         CBB        (600)       1,987      (20)
Compass Minerals        CMP        (109)         642       99
Conjuchem Inc.          CJC         (16)          24       19
Cotherix Inc.           CTRX        (44)          25       20
Cubist Pharmacy         CBST        (75)         155       (6)
Delta Air Lines         DAL      (3,297)      23,526   (2,614)
Deluxe Corp             DLX        (214)       1,561     (344)
Denny's Corporation     DNYY       (246)         730      (80)
Domino Pizza            DPZ        (575)         421      (16)
Eagle Hospitality       EHP         (26)         177      N.A.
Empire Resorts          NYNY        (13)          61        7
Foster Wheeler          FWHLF      (441)       2,268     (212)
Foxhollow Tech.         FOXH        (60)          28       16
Graftech International  GTI         (44)       1,036      284
Hawaiian Holding        HA         (160)         236      (60)
Hercules Inc.           HPC         (40)       2,658      362
IMAX Corp               IMX         (49)         222        9
Immersion Corp.         IMMR         (5)          26        9
Indevus Pharm.          IDEV        (63)         174      131
Int'l Wire Group        ITWG        (80)         410       97
Isis Pharm.             ISIS        (18)         255      116
Kinetic Concepts        KCI         (29)         638      214
Lodgenet Entertainment  LNET        (68)         301       20
Lucent Tech. Inc.       LU       (1,379)      16,963    3,765
Majesco Holdings        MJES        (41)          26        9
Maxxam Inc.             MXM        (649)       1,017       72
McDermott Int'l         MDR        (338)       1,245      (33)
McMoran Exploration     MMR         (85)         156       29
Northwest Airline       NWAC     (2,166)      14,450     (431)
Northwestern Corp.      NWEC       (603)       2,445     (692)
ON Semiconductor        ONNN       (298)       1,221      270
Owens Corning           OWENQ    (4,132)       7,567    1,118
Per-se Tech. Inc.       PSTI        (25)         169       31
Phosphate Res.          PLP        (484)         280        6
Pinnacle Airline        PNCL        (18)         147       26
Primedia Inc.           PRM      (1,163)       1,577     (203)
Quality Distribution    QLTY        (26)         377        9
Qwest Communication     Q        (2,477)      24,926     (509)
Riviera Holdings        RIV         (31)         224        1
SBA Comm. Corp.         SBAC        (27)         915       11
Sepracor Inc.           SEPR       (380)         974      600
St. John Knits Inc.     SJKI        (57)         206       77
Syntroleum Corp.        SYNM         (8)          48       11
Triton PCS Holding A    TPC        (254)       1,443       62
US Unwired Inc.         UNWR       (234)         709     (280)
U-Store-It Trust        YSI         (34)         536      N.A.
Valence Tech.           VLNC        (48)          16        2
Vector Group Ltd.       VGR         (48)         528      110
Vertrue Inc.            VTRU        (44)         445        0
WR Grace & Co.          GRA        (118)       3,087      774
Young Broadcasting      YBTVA       (12)         798       85

                          *********

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 ***