TCR_Public/050121.mbx       T R O U B L E D   C O M P A N Y   R E P O R T E R

          Friday, January 21, 2005, Vol. 9, No. 17

                          Headlines

ACCURIDE CORP: S&P Rates Proposed $965M Senior Debts at Single-B
ADELPHIA COMMS: Gov't. Seeks Forfeiture Ruling v. Two Rigases
ANECO ELECTRICAL: Look for Bankruptcy Schedules by Jan. 28
ANOKA AVIATION SERVICES: Involuntary Case Summary
ATA AIRLINES: Wants to Renew AIG Workers' Insurance Program

ATA AIRLINES: Wants to Reject Pacers Suite License Agreement
ATLANTIS PLASTICS: S&P Junks Proposed $125M Senior Sub. Notes
AVAYA INC: Debt Reduction Prompts Moody's to Upgrade Ratings
BALDWIN PIANO: Court Approves Settlement with QRS Music
BELL CANADA: Converting 14,085,782 Series 15 Preferred Shares

CAESARS ENTERTAINMENT: Complies with FTC Requirements on Merger
CAPITAL ONE: Reports 28% Earnings Per Share Growth for 2004
COMMANDER AIRCRAFT: Court Converts Chapter 11 Case to Chapter 7
CONTIFINANCIAL: Trustee Terminates Soundview Equity Loan Trust
COVANTA ENERGY: Reorganized Debtors' 4th Post-Confirmation Report

COVANTA ENERGY: Warren Wants Service Deadline Extended to July 23
CRYOPAK INDUSTRIES: Inks Pact Amending Convertible Loan Agreement
DUKE FUNDING: Moody's Places Ba3 Rating on Preference Shares
DYNCORP INTL: Moody's Junks Proposed $320M Senior Sub. Notes
E*TRADE FINANCIAL: S&P Alters Outlook on Low-B Ratings to Positive

ENRON CORP: Court Approves Termination of Cuiaba Financing Pacts
EYE CARE: S&P Junks Proposed $150 Million Subordinated Notes
FEDERAL-MOGUL: Says Proposed Asbestos Trust is Fatally Flawed
FIB BUSINESS: Fitch Junks Six Adjustable-Rate Note Classes
FIBERMARK INC: Chapter 11 Plan Voting Deadline Moved to Jan. 24

FIRST VIRTUAL: Case Summary & 30 Largest Unsecured Creditors
FREEDOM MEDICAL: Turns to Penn Hudson for Financial Advice
GENERAL NUTRITION: Restructuring Prompts S&P to Lift Rating to B+
GITTO GLOBAL: U.S. Trustee Asks Court to Convert Case to Chapter 7
HAWAIIAN AIRLINES: Wants to Modify Pilots Contract

HEALTHCARE PARTNERS: S&P Rates Planned $145M Sr. Sec. Debt at BB
INTELSAT LTD: Fitch May Put Low-B Ratings on Unsecured Sr. Notes
INTREPID USA: Has Until February 28 to File a Chapter 11 Plan
KAISER ALUMINUM: Wants Removal Period Extended Until May 10
KEY ENERGY: Has Until March 25 to File Financial Reports

LESLIE'S POOLMART: Prices 10-3/8% Senior Debt Offering
MAYTAG CORP: Will Stop Selling Major Appliances at Best Buy Stores
MEDCOMSOFT: Selling Equity under Private Placement for $1.5 Mil.
MEDIA SERVICES: Annual Stockholders' Meeting Set for February 7
MESA GLOBAL: S&P Holds Low-B Ratings on Three Certificate Classes

MIRANT CORP: Court Allows Expansion of Charles River's Services
NEP SUPERSHOOTERS: S&P Rates Proposed $75.7 Million Loan at B
NORTH AMERICAN: S&P Places Low-B Ratings on CreditWatch Negative
NORTHWEST AIRLINES: Dec. 31 Balance Sheet Upside-Down by $3.1 Bil.
NOVELIS INC: S&P Assigns B Rating to $1.4B Senior Unsecured Notes

OWENS CORNING: Banks Present Medical, Legal & Valuation Experts
OWENS CORNING: CSFB Wants to Sue Doctors for False X-Ray Readings
OWENS CORNING: Third Circuit to Hear Banks' Appeal on Feb. 7
PACKAGING CORP: Earns $38 Million Net Income in Fourth Quarter
PARMALAT USA: Will Reject Derle Supply Agreement After Transition

PCA INTL: Poor Third Qtr. Performance Spurs Moody's to Junk Debts
PEGASUS SATELLITE: Wants Lease Decision Deadline Extended to May
PRESIDENT CASINOS: Broadwater Wins Bid for Biloxi Operations
QUALITY DISTRIBUTION: Senior Floating Rate Notes to Prepay Debts
QUALITY DISTRIBUTION: Moody's Junks Proposed Senior Unsec. Notes

QUANTEGY INC: Employs Kurtzman Carson As Claims & Noticing Agent
QUANTEGY INC: Taps Equity Partners as Marketing Agent
REAL MEX: Extends Senior Debt Exchange Offering Until March 31
RED LINE RESTORATIONS: Case Summary & Largest Unsecured Creditors
REMOTE DYNAMICS: Needs to Raise $6 Mil. More to Fund Operations

SGD HOLDINGS: Files for Bankruptcy Protection in Delaware
SGD HOLDINGS LTD: Case Summary & 17 Largest Unsecured Creditors
SPIEGEL INC: BofA Wants Court to Lift Stay to Effect Set-Off
SR TELECOM: Inks Letter of Intent for $50M Sr. Sec. Facility
SR TELECOM: Revises Guidance for 2004 Fourth Quarter

SR TELECOM: Fidelity Management Sells 1,725,400 Common Shares
STRATUS TECH: Reducing 20% of Workforce to Save $15 Mil. in 2006
TANGO INC: Approves Plan to Retain Turnaround Specialist
TODD MCFARLANE: U.S. Trustee Picks 4-Member Creditors Committee
TODD MCFARLANE: Files Schedules of Assets and Liabilities

ULTIMATE ELECTRONICS: Taps FTI Consulting as Financial Advisors
ULTIMATE ELECTRONICS: Wants to Hire Ordinary Course Professionals
UNITEDGLOBALCOM: S&P Places B Rating on CreditWatch Positive
USGEN: Court Okays Sale of Two Hydroelectric Systems for $505 Mil.
VALOR COMMS: S&P Puts BB- Rating on Planned $965M Sr. Sec. Debt

VISTA GOLD: Luzon Exercises Option to Purchase Bolivia Project
VITAL LIVING: Deficit & Funding Concerns Spur Going Concern Doubt
W.R. GRACE: Gets Court Nod to Advance Payments for Legal Expenses
WISTON XIV: Wants to Hire Brashear & Ginn as Bankruptcy Counsel
WISTON XIV: Look for Bankruptcy Schedules by February 21

WORLDCOM INC: 10 Directors Settle Class Action for $54 Million
WORLDCOM INC: Supreme Court Denies Certiorari to Calpers, et al.
ZALE LIPSHY: Moody's Withdraws Ba3 Bond Rating After Full Funding

* Goodwin Procter Adds 24 Partners to Boston Office
* K&R Law Group Names C. Faber & R. Kessler Los Angeles Partners

* BOOK REVIEW: Debtors and Creditors in America

                          *********


ACCURIDE CORP: S&P Rates Proposed $965M Senior Debts at Single-B
----------------------------------------------------------------
Standard & Poor's Ratings Services reported that its 'B' corporate
credit rating on Accuride Corp., which remains on CreditWatch with
positive implications, where it was placed on Dec. 28, 2004, will
be raised to 'B+' when Accuride completes its planned acquisition
of Transportation Technologies Industries, Inc. -- TTI --
(B/Watch Pos/--), expected within the next few weeks.  The ratings
of TTI will be withdrawn following the acquisition.  The outlook
will be stable.

In addition, Standard & Poor's assigned a 'B+' bank loan rating
and a '3' recovery rating to Accuride's proposed $740 million
senior secured credit facility, indicating the expectation that
lenders will realize a meaningful recovery of principal (50%-80%)
in the event of a default.  Standard & Poor's also assigned a 'B-'
rating to Accuride's proposed $225 million senior subordinated
notes due 2015, to be issued under rule 144A with registration
rights.

Pro forma for the acquisition of TTI, Evansville, Ind.-based
Accuride will have total debt of about $850 million.

"The upgrade will reflect the improved operating performance of
Accuride and TTI during the past year, as both companies have
benefited from robust demand of the heavy-duty truck industry,"
said Standard & Poor's credit analyst Martin King.  "We expect
continued expansion of heavy-duty truck production during the next
year, which should permit the company to generate free cash flow
and reduce debt leverage to a level consistent with the rating.
We expect Accuride to finance future acquisitions and other
investments in a way that preserves credit quality."

Accuride manufactures steel and aluminum wheels used for
heavy- and medium-duty trucks, trailers, and light vehicles,
primarily sport utility vehicles and light trucks.  TTI
manufactures various components, including wheel end components
and assemblies, truck body and chassis parts, and seating
assemblies used in heavy-duty trucks and industrial equipment.

With the addition of TTI, Accuride will have a slightly stronger,
but still-below-average, business profile, as revenue and customer
diversity improves.

Accuride may complete an initial public offering during the next
few months.  If the offering is successful, Standard & Poor's
expects proceeds to be used to accelerate debt reduction.


ADELPHIA COMMS: Gov't. Seeks Forfeiture Ruling v. Two Rigases
-------------------------------------------------------------
The U.S. Government asks the U.S. District Court for the Southern
District of New York to enter a preliminary order of forfeiture
finding John J. Rigas and Timothy J. Rigas jointly and severally
liable for personal money judgments totaling $2,533,000,000.

The Government asks District Court Judge Leonard B. Sand to find
that John and Timothy Rigas will forfeit the $2,533,000,000 to the
Government.

A July 30, 2003 Superseding Indictment returned against John and
Timothy Rigas contained a "forfeiture allegation" which obligated
the Defendants to forfeit all real property "that constitutes or
is derived from proceeds traceable to the commission of"
securities fraud, wire fraud and bank fraud offenses and the
conspiracy to commit the offenses.

U.S. Attorney David N. Kelley asserts that the Indictment
contained a "substitute assets" provision which permitted the
Government to enforce a forfeiture judgment on assets other than
those actually derived from or traceable to the charged offenses.

According to Mr. Kelley, the Government has proven at trial -- and
a federal jury has found -- that John and Timothy Rigas defrauded
Adelphia shareholders, bondholders, and lenders to enrich
themselves and other members of the Rigas family.  Evidence at
trial also demonstrates that the Rigas family obtained several
cable companies using the proceeds of the frauds committed on
Adelphia and its lenders.  John and Timothy Rigas also received
hundreds of millions of dollars in the form of securities that
were not paid for -- or through the refunding of cash that was
paid by the Rigas family to Adelphia.

In July 2004, the jury found John and Timothy Rigas guilty of
conspiracy, securities fraud, and bank fraud.

A full-text copy of the Government's request is available for free
at:

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

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)


ANECO ELECTRICAL: Look for Bankruptcy Schedules by Jan. 28
----------------------------------------------------------
Aneco Electrical Construction, Inc., sought and obtained an
extension until Jan. 28, 2005, from the U.S. Bankruptcy Court for
the Middle District of Florida, Tampa Division, to file its
Schedules of Assets and Liabilities and Statement of Financial
Affairs.

The Debtor assures the Court that it will do its best to complete
its Schedules and Statement before the Section 341(a) meeting of
the creditors scheduled for Feb. 4.

Headquartered in Clearwater, Florida, Aneco Electrical
Construction, Inc. -- http://www.anecoinc.com/-- is an electrical
and telecommunications company serving the commercial,
entertainment, industrial, medical, government and institutional
building markets in the southeastern United States.  The Company
filed for chapter 11 protection on Dec. 30, 2004 (Bankr. M.D. Fla.
Case No. 04-24883).  Scott A. Stichter, Esq., at Stichter, Riedel,
Blain & Prosser, represents the Debtor in its restructuring
efforts.  When the Debtor filed for protection from its creditors,
it listed $51 million in estimated assets and $41 million in
estimated debts.


ANOKA AVIATION SERVICES: Involuntary Case Summary
-------------------------------------------------
Alleged Debtors: Anoka Aviation Services, Inc.
                 8891 Airport Road
                 PO Box 49337
                 Blaine, Minnesota 55449

Involuntary Petition Date: January 18, 2005

Case Number: 05-30283

Chapter: 11

Court: District of Minnesota (St. Paul)

Judge: Dennis D. O'Brien

Petitioners' Counsel: William I. Kampf, Esq.
                      Henson & Efron PA
                      220 South 6th Street, Suite 1800
                      Minneapolis, Minnesota 55402
                      Tel: (612) 339-2500

      Petitioners                             Amount
      -----------                             ------
      Roger K. Ness                         $320,000
      3140 Utah Avenue North
      Crystal, Minnesotan 55427

      Aircraft Maintenance Services, Inc.     $6,061
      Bill Ahman
      607 Eagle Ridge Road
      Woodbury, Minnesota 55125

      RC Avionics Inc.                        $4,519
      Russ Callendar
      1419 East Oake Trail
      Houlton, Wisconsin 54082

      Twin Cities Aviation, Inc.                $516
      Bill Ahman
      607 Eagle Ridge Road
      Woodbury, Minnesota 55125


ATA AIRLINES: Wants to Renew AIG Workers' Insurance Program
-----------------------------------------------------------
ATA Airlines, its debtor-affiliates and American International
Group, Inc., were parties to an agreement whereby AIG obtained
workers' compensation insurance on the Debtors' behalf.  The
Existing Insurance Program expired on December 13, 2004.  Under
the Existing Insurance Program, the Debtors caused National City
Bank of Indiana to issue a $7,000,000 letter of credit on AIG's
behalf.

On December 14, 2004, the Debtors renewed their workers'
compensation insurance program with AIG.  To obtain the workers'
compensation coverage under the Renewal Insurance Program, the
Debtors were required to post a new, additional letter of credit
for $4,500,000 on AIG's behalf.  The Debtors were further required
to:

    -- seek the United States Bankruptcy Court for the Southern
       District of Indiana's authority to assume the Existing
       Insurance Program and enter into the Renewal Insurance
       Program;

    -- enter into future renewals of their workers' compensation
       insurance programs without the need for further Court
       approval; and

    -- cure any defaults and pay future obligations without
       further Court approval.

In the event of a default by the Debtors under the Insurance
Programs and upon five days' written notice by AIG, AIG will be
allowed to:

   (i) cancel the Insurance Programs;

  (ii) foreclose on any collateral, in part or in full, which AIG
       has a security interest and which may be subject to the
       automatic stay; and

(iii) receive and apply the unearned or returned premiums to the
       Debtors' outstanding obligations under the Insurance
       Programs.

If the default is not cured within the appropriate period, the
automatic stay will be lifted as to AIG without the need for
further Court approval.

The Renewal Insurance Program provides that the Debtors'
reimbursement obligations and any other obligations under the
Insurance Programs will be accorded administrative priority under
Section 503(b) of the Bankruptcy Code.  AIG is not required to
file additional proof of claim or request for payment of
administrative expenses.  In addition, AIG is exempted from any
deadline for filing prepetition or administrative claims.

The Renewal Insurance Program also requires the Debtors to obtain
Court approval of these conditions:

   (1) All collateral or security held at this time by AIG and
       all prior payments to AIG under the Insurance Programs are
       approved, and AIG is authorized to retain and use the
       collateral or security in accordance with its terms;

   (2) AIG is allowed to adjust, settle and pay insured claims,
       utilize funds provided for that purpose, and otherwise
       carry out the terms and conditions of the Insurance
       Programs, without the need for any further Court approval.
       However, nothing will be deemed to grant relief from the
       stay to a non-workers' compensation claimant to pursue any
       claim in a non-bankruptcy court;

   (3) The Insurance Programs will not be materially altered by
       any plan of reorganization filed in the Debtors' cases,
       and survive any plan of reorganization filed by the
       Debtors.  Furthermore, nothing in any confirmed plan of
       reorganization in the Debtors' cases will impair AIG's
       interests in the collateral that it holds or is receiving;

   (4) The Debtors' rights against all collateral held by AIG are
       governed by the terms of the Insurance Program and related
       security documentation and the Debtors be prohibited from
       taking any action against AIG in the Court that is
       inconsistent with the terms of the documentation,
       including actions for turnover or estimation.  During the
       pendency of these cases, AIG is not required, except as
       provided in the Insurance Programs documents, to return
       any part of the security it now holds for the Insurance
       Programs without adequate protection for its interest in
       the security to be returned pursuant to Section 361(1);
       and

   (5) The Debtors are authorized to reimburse AIG for its
       reasonable and necessary legal fees and expenses incurred
       in connection with the Insurance Program.

Michael P. O'Neil, Esq., at Sommer Barnard Attorneys, PC, in
Indianapolis, Indiana, tells Judge Lorch that the Debtors have
complied with all of AIG's requirements for the Insurance
Programs other than obtaining a Court Order approving the
Insurance Programs and the remaining Program Conditions.

Mr. O'Neil asserts that maintaining the workers' compensation
insurance is mandated by state law and necessary to the Debtors'
reorganizational efforts.

Accordingly, the Debtors seek the Court's authority to:

   (a) assume the Existing Workers' Compensation Insurance
       Program; and

   (b) enter into a renewal of their Workers' Compensation
       Insurance Program with AIG.

The Debtors also ask Judge Lorch to approve the Program
Requirements.

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


ATA AIRLINES: Wants to Reject Pacers Suite License Agreement
------------------------------------------------------------
Pursuant to Section 365 of the Bankruptcy Code, ATA Airlines and
its debtor-affiliates seek permission from the United States
Bankruptcy Court for the Southern District of Indiana to reject a
Conseco Fieldhouse Executive Suite License Agreement between ATA
Holdings Corp., and the Pacers Basketball Corporation.

The Contract grants ATA Holdings a license to use a suite at the
Conseco Fieldhouse, in Indianapolis, Indiana, for events like the
Indiana Pacers basketball games, concerts, family shows, and other
sporting events.

Jeffrey C. Nelson, Esq., at Baker & Daniels, in Indianapolis,
Indiana, asserts that the benefits provided by the Contract to the
Debtors are outweighed by the costs.  The Contract is an
unnecessary burden on the Debtors and their estate.

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


ATLANTIS PLASTICS: S&P Junks Proposed $125M Senior Sub. Notes
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Atlanta, Georgia-based Atlantis Plastics, Inc.

At the same time, Standard & Poor's assigned its 'B' rating and
its recovery rating of '2' to the company's proposed $25 million
senior secured revolving credit facility due 2010 and $80 million
senior secured term loan B due 2011, based on preliminary terms
and conditions.  The rating on the credit facility is the same as
the corporate credit rating; this and the '2' recovery rating
indicate the expectation of a substantial (80% to 100%) recovery
of principal in the event of a default.

Standard & Poor's also assigned its 'CCC+' rating to the company's
proposed $125 million senior subordinated notes due 2012 to be
issued under Rule 144A with registration rights.

Proceeds from the transaction will be used to refinance the
company's existing credit facilities, to fund a $118 million
dividend to shareholders, and for fees and expenses.  The outlook
is stable.  Pro forma for the transaction, total debt will be
about $205 million.

"Atlantis Plastics' very aggressive financial profile overshadows
its well-below-average business risk profile in highly
competitive, cyclical polyethylene film and injection-molded
plastic products, which serve mainly industrial customers," said
Standard & Poor's credit analyst Liley Mehta.

With annual revenues of about $334 million, Atlantis Plastics
enjoys a competitive position in plastic films (including stretch
films and custom films and representing about 65% of revenues),
stemming from a decent cost structure and effective distribution
capabilities.  Injection-molded products (about 28% of sales)
include components sold to original equipment manufacturers mainly
in the home appliance industry, and siding panels for the home
building industry and residential replacement market.  Profile
extruded products account for 7% of sales and are used in
recreational vehicles, mobile homes, and other consumer and
commercial products.



AVAYA INC: Debt Reduction Prompts Moody's to Upgrade Ratings
------------------------------------------------------------
Moody's Investors Service upgraded the senior implied rating of
Avaya, Inc., to Ba3 from B1.  Moody's simultaneously withdrew the
ratings of the 11-1/8% senior secured notes that have been
substantially redeemed.  The ratings outlook is positive.

Ratings upgraded include:

   * Senior implied rating to Ba3 from B1

   * Issuer rating to B1 from B2

   * Shelf registration for senior unsecured debt and preferred
     stock to (P)B1 and (P)B3 from (P)B2 and (P)Caa1,
     respectively.

Ratings withdrawn include:

   * Senior secured notes at B1.

The rating action is based on:

   (1) the substantial de-leveraging of Avaya's balance sheet,

   (2) solid liquidity profile and continued improvement in
       operating performance, and

   (3) cash flow generation from recovering enterprise
       communications spending.

The company has made substantial progress to reduce debt through
the recent equity conversion of $298 million accreted value of
outstanding LYONs and repurchase of outstanding senior secured
notes due 2009 in December 2004.

Pro forma for the extinguishment of existing notes and assumption
of incremental debt from its Tenovis acquisition, debt has
decreased to $342 million from $729 million at March 31, 2004.
Pro forma cash balances stand at $969 million compared to
$1.6 billion at fiscal year end September 30, 2004.  Offsetting
the lower leverage levels is $1.3 billion of benefit obligations
related to pensions and post retirement benefit obligations.  The
company does not expect to make material contributions to its
pensions through 2007.

The rating is moderated by Moody's concern over the decline in the
company's traditional voice telephony product, estimated to be
falling at 20% per annum, and the degree to which sales of next
generation voice-over-IP product offsets such product revenue
loss.  The rating is further constrained by supplier concentration
and the weakening operating performance of its primary supplier of
outsourced manufacturing.  Avaya outsources a majority of its
manufacturing to a single supplier, which exposes Avaya to
potential supply disruption.

The rating is supported by Avaya's leading market position in VoIP
product and deeply entrenched base of enterprise customers.  Avaya
currently holds the number one market share in the U.S. and
worldwide for IP telephony lines.  The company estimates that over
90% of Fortune 500 companies use Avaya product.  The current
rating also considers the company's aggressive acquisition profile
and the potential integration challenges it faces in the near term
from the acquisitions of five companies over the past twelve
months.  The largest acquisition, Tenovis, a major European
provider of enterprise communications systems and services,
positions Avaya for expansion of its product lines into Europe,
and is expected to add approximately $1 billion of revenue on an
annual basis (nearly one quarter of Avaya's current revenue).

In fiscal 2004, Avaya reversed a trend of declining revenue by
growing its top line across all three segments by a total of 7%
over fiscal 2003.  As a result of restructuring and cost reduction
efforts taken through fiscal 2002, consolidated operating margin
has reached its highest level since Avaya's spin-off from Lucent
in fiscal 2000, at nearly 8%.  Avaya's ratio of LTM EBITDA to
interest expense stands at 7.1 times while debt to EBITDA is at
1.3 times.  The company generated $269 million of free cash flow
(cash flow from operations less capital expenditures and cash
acquisitions) in fiscal 2004.

The positive ratings outlook considers Moody's expectations for
sustained improvement in operating income and cash flow through
continued revenue growth, both organically and through
acquisition.  The ratings could be favorably impacted to the
extent Avaya demonstrates sustained growth of VoIP-based revenue
faster than the decline in its traditional PBX product without
negative impact to profitability.  Alternatively, the ratings
could be negatively impacted to the extent that revenue
experiences material decline, improvements in operating
performance and cash generation fall below expectations or future
acquisitions materially reduce the company's liquidity or debt
capacity.

Avaya faces continuing exposure to indemnify or share certain
liabilities with its former parent, Lucent Technologies, Inc., in
connection with its spin-off from Lucent in September 2000.  Under
a contribution and distribution agreement, Avaya will indemnify
Lucent for certain liabilities related to Avaya's businesses and
all contingent liabilities primarily relating to its businesses or
otherwise assigned to Avaya.  Contingent liabilities over
$50 million that are primarily related to Lucent's businesses
shall be borne 90% by Lucent and 10% by Avaya, and contingent
liabilities over $50 million that are primarily related to Avaya's
businesses shall be borne equally by both Lucent and Avaya.

Avaya, Inc., based in Basking Ridge, New Jersey, is a leading
worldwide supplier of communications systems and software for
enterprise customers.


BALDWIN PIANO: Court Approves Settlement with QRS Music
-------------------------------------------------------
The United States Bankruptcy Court for the Southern District of
Ohio, Western Division, recently approved a negotiated settlement
agreement between Dwight's Piano Co. (formerly known as Baldwin
Piano & Organ Co.) and QRS Music Technologies, Inc., (OTCBB: QRSM)
concerning preferential transfers made during the 90-day period
prior to Baldwin's bankruptcy filing on May 31, 2001.

Last year, the Court granted a default judgment for $477,601 plus
interest.  The negotiated settlement agreement reduced that amount
to $61,395.  QRS Music had previously recorded a $477,601
liability in relating to the default judgment.  As a result of the
negotiated settlement, for the quarter ending March 31, 2005, QRS
Music will recognize a gain of approximately $259,000 (net of
income taxes), or $.03 per share.

QRS Music Technologies, Inc.'s stock is traded Over-The-Counter on
the OTCBB: QRSM.

Baldwin Piano & Organ Company is the largest U.S. manufacturer of
keyboard instruments.  Founded in 1862, the company is best known
for making concert and upright pianos under the Baldwin,
Chickering, and Wurlitzer names.  It also makes ConcertMaster
computerized player pianos and Baldwin Pianovelle digital
keyboards.  Baldwin has manufacturing facilities in Arkansas and
Juarez, Mexico.  It has sold 11 of its retail stores and plans to
sell the rest.  It also sold its retail finance business and plans
to file for Chapter 11 bankruptcy protection.  Seven different
investment groups, led by Heartland Advisors, own about 65% of the
company.


BELL CANADA: Converting 14,085,782 Series 15 Preferred Shares
-------------------------------------------------------------
Bell Canada reported that 14,085,782 of its 16,000,000 Cumulative
Redeemable Class A Preferred Shares, Series 15 have been tendered
for conversion, on a one-for-one basis, into Cumulative Redeemable
Class A Preferred Shares, Series 16.  Consequently, Bell Canada
will issue 14,085,782 new Series 16 Preferred Shares on
February 1, 2005.  The balance of the Series 15 Preferred Shares
that have not been converted will remain outstanding.

The remaining 1,914,218 Series 15 Preferred Shares will continue
to be listed on The Toronto Stock Exchange under the symbol
BC.PR.A.  The holders of the Series 15 Preferred Shares will,
starting February 1, 2005, be entitled to receive monthly floating
adjustable cash dividends, if declared by the board of directors
of Bell Canada, computed in accordance with the terms and
conditions attached to such shares.

The Series 16 Preferred Shares will be listed on The Toronto Stock
Exchange under the symbol BC.PR.D and should start trading on a
"When Issued" basis at the opening of the market on January 24,
2005.  The annual fixed dividend rate applicable to the Series 16
Preferred Shares for the period of five years beginning on
February 1, 2005 will be 4.40%.

Bell Canada, Canada's national leader in communications, provides
connectivity to residential and business customers through wired
and wireless voice and data communications, local and long
distance phone services, high speed and wireless Internet access,
IP-broadband services, e-business solutions and satellite
television services.  Bell Canada is wholly owned by
BCE Inc.  For more information please visit http://www.bell.ca/

BCI is operating under a court-supervised Plan of Arrangement,
pursuant to which BCI intends to monetize its assets in an orderly
fashion and resolve outstanding claims against it in an
expeditious manner with the ultimate objective of distributing the
net proceeds to its shareholder and dissolving the company.


CAESARS ENTERTAINMENT: Complies with FTC Requirements on Merger
---------------------------------------------------------------
Harrah's Entertainment, Inc. (NYSE:HET) and Caesars Entertainment,
Inc., are in "substantial compliance" with requests from the
Federal Trade Commission for information concerning the planned
merger of the two companies.

Last July, Harrah's and Caesars announced a $9.4 billion merger
agreement that will create the world's largest distributor of
casino entertainment.  The FTC subsequently issued a "second
request" for information from each company concerning the merger.

The two companies each certified they have provided substantially
all the information still being requested by the FTC.  The
transaction is expected to be completed in the second quarter,
pending receipt of necessary regulatory approvals.

                    About the Company

Founded 67 years ago, Harrah's Entertainment, Inc. --
http://www.harrahs.com/-- owns or manages through various
subsidiaries 28 casinos in the United States, primarily under the
Harrah's and Horseshoe brand names.  Harrah's Entertainment is
focused on building loyalty and value with its valued customers
through a unique combination of great service, excellent products,
unsurpassed distribution, operational excellence and technology
leadership.

Caesars Entertainment, Inc., is one of the world's leading gaming
companies.

With 25 properties on four continents, 25,000 hotel rooms, two
million square feet of casino space and 52,000 employees, the
Caesars portfolio is among the strongest in the industry. Caesars
casino resorts operate under the Caesars, Bally's, Flamingo, Grand
Casinos, Hilton and Paris brand names. The company has its
corporate headquarters in Las Vegas.

                         *     *     *

As reported in the Troubled Company Reporter on July 19, 2004,
Fitch Ratings has affirmed the following long-term debt ratings of
Harrah's Entertainment and placed the long-term ratings of Caesars
Entertainment on Rating Watch Positive.

HET

   -- Senior secured debt 'BBB-';
   -- Senior subordinated debt 'BB+'.

CZR

   -- Senior unsecured debt 'BB+';
   -- Senior subordinated debt 'BB-'.


CAPITAL ONE: Reports 28% Earnings Per Share Growth for 2004
-----------------------------------------------------------
Capital One Financial Corporation (NYSE: COF) reported 28 percent
earnings per share growth for 2004.  The company reaffirmed its
earnings per share guidance for 2005 to be between $6.60 and $7.00
per share (fully diluted).

Earnings were $1.5 billion for the year, compared with
$1.1 billion in 2003.  Earnings for the fourth quarter of 2004
were $195.1 million, compared with $265.7 million for the fourth
quarter of 2003, and $490.2 million in the previous quarter.
Higher marketing and provision expenses in the fourth quarter
accounted for the lower earnings compared to the previous quarter
and fourth quarter of 2003.

"Capital One generated strong earnings and loan growth again in
2004, as it has each year since its initial public offering ten
years ago," said Richard D. Fairbank, Capital One's Chairman and
Chief Executive Officer.  "The company is well positioned for
continued success in 2005 in both our US credit card and our
growing and profitable diversification businesses."

During the fourth quarter, managed loans grew $4.4 billion from
$75.5 billion to $79.9 billion.  Annual growth in managed loans
was $8.6 billion, or 12 percent, from December 31, 2003.  The
company continues to expect that managed loans will grow at a rate
of between 12 and 15 percent during 2005.

The managed charge-off rate increased to 4.37 percent in the
fourth quarter of 2004 from 4.05 percent in the previous quarter,
but decreased from 5.32 percent in the fourth quarter of 2003.
The increase in the managed charge-off rate in the fourth quarter
of 2004 included a one-time 10 basis point effect from a change in
our charge-off recognition policy for auto loans in bankruptcy.
The company continues to expect its quarterly managed charge- off
rate to stay between 4.0 and 4.5 percent in 2005, with seasonal
variations.  Additionally, the company increased its allowance for
loan losses by $110 million in the fourth quarter of 2004, largely
driven by the growth in reported loans.  The company expects a
seasonal reduction in its allowance for loan losses in the first
quarter of 2005, and a likely increase for full year 2005.

The managed delinquency rate (30+ days) decreased to 3.82 percent
as of December 31, 2004 from 3.90 percent as of the end of the
previous quarter.  The managed delinquency rate as of December 31,
2003 was 4.46 percent.  Capital One's managed revenue margin
decreased to 12.66 percent in the fourth quarter of 2004 from
13.03 percent in the previous quarter.  The company's managed
revenue margin was 13.89 percent in the fourth quarter of 2003.

"Return on managed assets for 2004 increased to 1.73 percent from
1.52 percent in 2003," said Gary L. Perlin, Capital One's Chief
Financial Officer.  "Although we expect to see a modest decline in
our revenue margin in 2005 from our ongoing diversification and
bias towards lower loss assets, we expect to continue to improve
our operating efficiency and thus maintain a return on managed
assets of between 1.7 and 1.8 percent in 2005, with some quarterly
variability."

Fourth quarter marketing expenses increased $193.4 million to
$511.1 million from $317.7 million in the previous quarter,
largely due to the launch of several new programs.  Marketing
expenses were $290.1 million in the fourth quarter of 2003.
Marketing expenses for 2004 were $1.3 billion, a 20 percent
increase over the $1.1 billion in 2003.  The company expects
annual marketing spend for 2005 to be similar to 2004.

Annualized operating expenses as a percentage of average managed
loans increased to 5.44 percent in the fourth quarter of 2004,
from 5.35 percent in the previous quarter and decreased from 5.82
percent in the fourth quarter of 2003.  Included in fourth quarter
2004 operating expenses were charges totaling $42.1 million for a
combination of employee termination benefits and continued
facility consolidations.  The company expects about $50 million in
additional restructuring charges in 2005 related to programs
initiated in 2004.

In the fourth quarter of 2004, the company completed the sale of
its French loan portfolio and recorded a gain of $41.1 million,
which is included in non-interest income.  As announced during the
second half of 2004, the company signed definitive agreements to
acquire HFS Group, Onyx Acceptance Corporation, and eSmartloan.
During the first quarter of 2005, Capital One completed the HFS
and Onyx transactions, as well as the acquisition of InsLogic, a
small insurance brokerage firm.  The company expects to close the
eSmartloan acquisition later in the first quarter of 2005.

                          *     *     *

As reported in the Troubled Company Reporter on Sept. 10, 2004,
Standard & Poor's Ratings Services raised its long-term
counterparty credit rating on Capital One Financial Corp. to
'BBB-' from 'BB+' and the long-term counterparty credit rating on
its bank subsidiaries, Capital One Bank, Falls Church, VA and
Capital One FSB, to 'BBB' from 'BBB-'.  The short-term
counterparty credit ratings are affirmed at 'A-3'.  At the same
time, Standard & Poor's revised the outlook to stable from
positive.

"The ratings action considers Capital One's successful navigation
through a challenging operating environment, the company's success
to-date in diversifying its business lines, the moderation of its
managed loan growth, and management's adoption of a long-term
strategy that considers further diversification," said Standard &
Poor's credit analyst John K. Bartko, C.P.A. Despite some
weakening of asset quality metrics due in large part to
opportunistic forays into subprime lending in late 2002 and into
early 2003, Capital One nevertheless navigated its way through a
challenging operating environment that, though not a deep
recession, saw sector competitors marginalized, credit quality
compromised, and regulatory scrutiny intensified.


COMMANDER AIRCRAFT: Court Converts Chapter 11 Case to Chapter 7
---------------------------------------------------------------
The Honorable Peter J. Walsh of the United States Bankruptcy Court
for the District of Delaware entered an order converting Commander
Aircraft Company's chapter 11 case to a chapter 7 proceeding on
Jan. 14, 2005.

The United States Trustee complained that Debtor failed to pay its
quarterly fees since Dec. 1, 2003.  The company currently owes
$12,750 in quarterly fees based on reported disbursements.

The payment of quarterly fees is required by law until the case is
closed, converted or dismissed.

Headquartered in Bethany, Oklahoma, Commander Aircraft Company, a
wholly owned subsidiary of publicly traded Aviation General,
Incorporated, filed for chapter 11 protection on Dec. 27, 2002
(Bankr. D. Del. Case No. 02-13804).  David Lee Finger, Esq., in
Wilmington, Delaware, represents the Debtor in its liquidation
efforts.  When the Debtor filed for chapter 11 protection, it
estimated between $1 million to $10 million in assets and debts.


CONTIFINANCIAL: Trustee Terminates Soundview Equity Loan Trust
--------------------------------------------------------------
The trustee of the CFN Liquidating Trust, Jeffrey H. Beck,
disclosed the termination of the Soundview Home Equity Loan Trust
1999-1 securitization.  CFN Liquidating Trust is successor to
ContiFinancial Corporation, ContiMortgage Corporation, and
affiliates pursuant to the companies' confirmed Chapter 11 plan.
CFN Liquidating Trust, its asset manager, Boston Portfolio
Advisors, Inc., and its business and tax counsel, Miller Nash LLP,
handled this unique, complex transaction over a three-month
period, closing the transaction on Dec. 17, 2004.

The termination, completed more than a year prior to the
anticipated early redemption date for the Soundview Trust asset-
backed notes, was accomplished through the acquisition and tender
of notes having an outstanding principal balance of approximately
$109 million.  The termination was concluded in connection with
the sale by auction of the portfolio of real estate and promissory
notes secured by residential mortgages owned by the Soundview
Trust.

According to Mr. Beck, the sale of the portfolio was a highly
unique transaction, which CFN Trust was able to accomplish because
of the outstanding performance of its advisors: "Michelle Slater
of Miller Nash and Gene Wetzold of Boston Portfolio Advisors were
able to discover the approach, skillfully design the structure
within the operative documents, and successfully negotiate that
legal structure with the counter-parties to the Soundview Trust,
the Soundview bondholders and the auction purchaser," said Mr.
Beck.  "I am grateful for the hard work and cooperation of all the
parties involved in the success of this transaction."

CFN Trust -- http://www.cfntrust.com/-- owned the residual
interest in the Soundview Trust, which (together with related
distributions held in reserve) was encumbered by claims of
Greenwich Capital Markets, Inc., Greenwich Capital Financial
Products, Inc., and MBIA Insurance Corporation.  By its
termination of the Soundview Trust and portfolio sale, CFN Trust
was able to settle those claims, liquidate its assets, and realize
a recovery of approximately $34 million.

Jeffrey H. Beck of J Beck & Associates, Inc., in Boca Raton,
Florida has served as a trustee, examiner and receiver since 1984
and has brought successful resolution to a substantial number of
complex corporate reorganizations and liquidations in the
financial sector and, as well, in a broad range of other
industries.

Boston Portfolio Advisors is headquartered in Fort Lauderdale,
Florida, and was founded in 1979.  Serving the financial services
industry, Boston Portfolio Advisors provides a broad range of
integrated solutions designed to help financial services
organizations better manage their assets and operations.

As one of the largest multi-specialty law firms in the Pacific
Northwest, Miller Nash LLP serves clients locally and worldwide
from its offices in Portland, Oregon, and Seattle and Vancouver,
Washington.


COVANTA ENERGY: Reorganized Debtors' 4th Post-Confirmation Report
-----------------------------------------------------------------
The Reorganized Debtors under the Covanta Energy Corporation
Second Joint Reorganization Plan and the Covanta Tampa Amended
Joint Plan of Reorganization filed their fourth status report on
January 14, 2005.

The Reorganized Debtors have taken these steps, among others, in
connection with consummation of the Second Reorganization Plan and
the Tampa Plan:

   (a) The Reorganized Debtors assumed or rejected their
       executory contracts and unexpired leases and continued
       the process of paying Cure Amounts with respect to those
       executory contracts and unexpired leases that they
       assumed.  The Reorganized Debtors are continuing to
       resolve disputes concerning the Cure Amounts;

   (b) The Reorganized Debtors continue to engage in the claims
       reconciliation process with respect to Disputed Claims
       against the Reorganized Debtors and the Remaining
       Debtors, including the prosecution of claims objections
       pursuant to the Second Reorganization Plan and Tampa
       Plan.  All claim objections for the Second Plan Debtors
       have been filed;

   (c) Distributions were made or are in the process of being
       made by the Reorganized Debtors in accordance with the
       Second Reorganization Plan on account of all currently
       allowed Claims in Class 1, Class 3A, Class 3C, Class 4,
       Class 7 and Class 8.  The Reorganized Debtors continue to
       make substantial progress toward making distributions to
       holders of Allowed Claims in Classes 4 and 8, and the
       second quarterly distribution for both classes was
       completed.  The Reorganized Debtors will not make
       distributions to individual holders of Claims in Class 6
       until all the claims are actually allowed or disallowed;

   (d) Distributions were made by the Reorganized Debtors in
       accordance with the Tampa Plan on account of all Allowed
       Claims in Class 1, Class 2, and Subclass 3A under the
       Tampa Plan;

   (e) In October 2004, Covanta Lake II's Disclosure Statement
       was approved.  Covanta Lake II's Plan and Disclosure
       Statement were sent to its creditors for solicitation on
       October 22, 2004.  On December 1, 2004, the United States
       Bankruptcy Court for the Southern District of New York held
       a confirmation hearing for the Covanta Lake Plan.  The
       Court entered an order confirming the Covanta Lake Plan on
       December 2.  The Covanta Lake Plan became effective on
       December 14; and

   (f) On December 7, 2004, the U.S. Bankruptcy Court for the
       Southern District of New York entered a Final Decree
       closing 22 of the Reorganized Debtors' cases after finding
       that the estates of the 22 Reorganized Debtors had been
       fully administered.  Only six Reorganized Debtors' cases
       remain open.

Headquartered in Fairfield, New Jersey, Covanta Energy Corporation
-- http://www.covantaenergy.com/-- is a publicly traded holding
company whose subsidiaries develop, own or operate power
generation facilities and water and wastewater facilities in the
United States and abroad.  The Company filed for Chapter 11
protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826).
Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary,
Gottlieb, Steen & Hamilton, represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed $3,280,378,000 in assets and
$3,031,462,000 in liabilities.  On March 10, 2004, Covanta Energy
Corporation and its core subsidiaries emerged from chapter 11 as a
wholly owned subsidiary of Danielson Holding Corporation.  Some of
Covanta's non-core subsidiaries have liquidated under separate
chapter 11 plans. (Covanta Bankruptcy News, Issue No. 73;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


COVANTA ENERGY: Warren Wants Service Deadline Extended to July 23
-----------------------------------------------------------------
Covanta Warren Energy Resources Co., LP, asks the United States
Bankruptcy Court for the Southern District of New York to extend
its deadline to serve summonses and preference complaints until
July 23, 2005, on:

   (1) Professional Health Services, Inc. -- for Adversary
       Proceeding Case No. 04-02910; and

   (2) Technion, Inc. -- for Adversary Proceeding Case No.
       04-02911.

Its current service deadline will expire January 24, 2005.

Vincent E. Lazar, Esq., at Jenner & Block, LLP, in Chicago,
Illinois, explains that without the 180-day extension, Covanta
Warren and its creditors could incur unnecessary costs related to
effecting service of, and pursuing, the Preference Complaints "at
a time when it is not yet clear that it is in the best interests
of Covanta Warren or its creditors to pursue such claims."

Covanta Warren is continuing to review its options with respect to
filing a plan of reorganization.  In accordance with its duties to
its creditors, Covanta Warren filed the Preference Complaints as
"placeholder" lawsuits to avoid the impact of the expiration of
the statute of limitations to bring preference actions upon their
estates.

Mr. Lazar acknowledges that it is possible under Covanta Warren's
proposed plan of reorganization that Covanta Warren will not
pursue preference actions.

Headquartered in Fairfield, New Jersey, Covanta Energy Corporation
-- http://www.covantaenergy.com/-- is a publicly traded holding
company whose subsidiaries develop, own or operate power
generation facilities and water and wastewater facilities in the
United States and abroad.  The Company filed for Chapter 11
protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826).
Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary,
Gottlieb, Steen & Hamilton, represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed $3,280,378,000 in assets and
$3,031,462,000 in liabilities.  On March 10, 2004, Covanta Energy
Corporation and its core subsidiaries emerged from chapter 11 as a
wholly owned subsidiary of Danielson Holding Corporation.  Some of
Covanta's non-core subsidiaries have liquidated under separate
chapter 11 plans. (Covanta Bankruptcy News, Issue No. 73;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


CRYOPAK INDUSTRIES: Inks Pact Amending Convertible Loan Agreement
-----------------------------------------------------------------
Cryopak Industries, Inc., (TSX VENTURE:CII) reached an agreement
with the holders of 40% of the Company's outstanding $3.6 million
convertible loan agreement -- CLA -- to amend and restate the CLA.

Under the terms of the amended CLA, interest, which had been
accumulating at 10% per annum, has been forgiven, and 2.53%
interest added to the outstanding principal.  The principal will
be repayable in equal installments every six months beginning
December 31, 2006.  A reduced interest rate of LIBOR plus 25 basis
points will be paid on the outstanding principal during this
period.  The amended CLA is no longer convertible into common
shares of the Company.

This offer has also been made to the remaining holders with an
interest in the CLA and the Company is in discussions with
representatives for certain of those parties at this time.

With facilities in Vancouver and Montreal, Cryopak provides
temperature-controlling products and solutions.  The Company's
clients include some of North America's leading retailers and
consumer goods companies, as well as global pharmaceutical
companies.  In its retail business, the Company develops,
manufactures and sells reusable ice substitutes, flexible hot and
cold compresses, reusable gel ice and instant hot and cold packs.
These products are marketed under such popular brand names as
Ice-Pak(TM), Flexible Ice(TM) Blanket, Simply Cozy(R), and Flex
Pak(TM).  In its pharmaceutical business, the Company engineers
solutions and supply products that help our customers safely
transport their temperature sensitive pharmaceuticals.  Over the
past few years the Company has evolved into a recognized player in
this growing segment as we assist customers in optimizing their
cold chain processes.  The Company's shares are listed on the TSX
Venture Exchange under the symbol CII.  For more information about
the Company, visit http://www.cryopak.com/or call
1-800-667-2532.

                          *     *     *

                       Going Concern Doubt

During the six months ended September 30, 2004, Cryopak Industries
incurred a loss of $516,819.  During the years ended March 31,
2004, 2003 and 2002, the Company incurred losses of $2,747,895,
$2,420,842 and $273,759 respectively, and during the year ended
March 31, 2004, the Company experienced negative cash flows from
operations of $297,883.  As at September 30, 2004, the deficit is
$7,009,847 and the working capital deficiency is $4,541,266.  The
Company continues to be in default on the repayment of the
principal and accrued interest of the convertible loan, which was
due on June 7, 2003.

These conditions raise substantial doubt on Company's ability to
continue as a going concern.


DUKE FUNDING: Moody's Places Ba3 Rating on Preference Shares
------------------------------------------------------------
Moody's Investors Service downgraded its ratings of these Classes
of Notes and Preference Shares issued by Duke Funding II, Ltd., a
collateralized debt obligation issuance:

   (1) $6,000,000 Class C-1 Mezzanine Secured Floating Rate Notes
       due 2036 from Baa2 on watch for possible downgrade to Ba1
       no longer on watch for possible downgrade;

   (2) $8,000,000 Class C-2 Mezzanine Secured Fixed Rate Notes due
       2036 from Baa2 on watch for possible downgrade to Ba1 no
       longer on watch for possible downgrade;

   (3) $4,000,000 Class D Subordinate Secured Fixed Rate Notes due
       2036 from Ba3 on watch for possible downgrade to B2 no
       longer on watch for possible downgrade;

   (4) $5,000,000 Class 1 Pass-Through Notes due 2036 from Ba3 (as
       to the ultimate receipt of payments on the Class 1 Rated
       Balance calculated using a discount factor of 5 per cent
       per annum) on watch for possible downgrade to B1 (as to the
       ultimate receipt of payments on the Class 1 Rated Balance,
       which has amortized over time, calculated using a discount
       factor of 5 per cent per annum) no longer on watch for
       possible downgrade;

   (5) 9,600 Preference Shares (U.S. $9,600,000 Aggregate
       Liquidation Preference) from Ba3 (as to the payment of the
       liquidation preference) on watch for possible downgrade to
       B2 (as to the payment of the liquidation preference) no
       longer on watch for possible downgrade.  The Preference
       Shares are rated as to the repayment of principal only.

Moody's noted that the transaction, which closed in October of
2001, is currently failing the Moody's Maximum Rating Distribution
Test.  The ratings of the Class C-1, the Class C-2 Notes, the
Class D Notes, the Pass-Through Notes and the Preference Shares
were placed on the Moody's watchlist for possible downgrade on
December 2, 2004.

Moody's stated that the ratings assigned to the Class C-1 Notes,
to the Class C-2 Notes, to the Class D Notes, to the Pass-Through
Notes and to the Preference Shares, prior to the rating action
taken today, are no longer consistent with the credit risk posed
to investors.


DYNCORP INTL: Moody's Junks Proposed $320M Senior Sub. Notes
------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to the proposed
$420 million senior secured credit facility of DynCorp
International LLC and a Caa1 rating to its proposed issuance of
$320 million of senior subordinated notes.

In addition, Moody's assigned a senior implied rating of B2 and a
speculative grade liquidity rating of SGL-3 to DynCorp.  The
senior secured credit facility will include a $345 million term
loan facility and a $75 million revolving credit facility.  DIV
Capital Corporation, a wholly owned subsidiary of DynCorp with
nominal assets, will be a co-issuer of the senior subordinated
notes.  The Notes are expected to be issued pursuant to Rule 144A
under the Securities Act.

Veritas Capital has entered into a definitive agreement to acquire
DynCorp from Computer Sciences Corporation -- CSC -- for total
consideration of $850 million.  The purchase price and related
fees and expenses will be financed with the proceeds from the term
loan, the Notes and $225 million of preferred and common equity.
The revolver is expected to be unused at closing.

Moody's assigned these ratings to DynCorp:

   * $75 million Senior Secured Revolving Credit Facility, rated
     B2;

   * $345 million Senior Secured Term Loan Facility, rated B2;

   * $320 million Senior Subordinated Notes, rated Caa1;

   * Senior Implied, rated B2;

   * Senior Unsecured Issuer Rating, rated B3;

   * Speculative Grade Liquidity Rating, rated SGL-3.

The ratings outlook is stable.

The ratings are subject to the review of the final executed
documents and audited financial statements.

The ratings reflect:

   (1) substantial leverage;

   (2) revenue concentration with three contracts expected to
       comprise about 60% of revenues for the fiscal year ended
       April 1, 2005;

   (3) significant revenue generation from politically unstable
       regions of the world that may make it difficult to complete
       contract performance and deploy qualified personnel;

   (4) the company's exposure to potential changes in government
       spending policies;

   (5) relatively low EBITDA margins; limited free cash flow
       generation in the last few years because of the growth in
       accounts receivable balances; and

   (6) significant contract re-competes in the next year.

The ratings also reflect:

   (1) the company's position as a leading provider of government
       technical services and outsourced solutions;

   (2) long term contracts and long-standing relationships with
       key government agencies including the Department of State
       and Department of Defense;

   (3) global presence and infrastructure;

   (4) high percentage win rates on re-competes;

   (5) significant contract backlog in relation to revenues (total
       backlog at November 26, 2004 was about $2.3 billion of
       which $1.1 billion was funded);

   (6) the continuing trend toward outsourcing of work by
       government agencies; and

   (7) adequate liquidity.

Although the total backlog amounts are significant, there is no
guarantee that these revenues will materialize.

The stable ratings outlook reflects the expected continued growth
in demand for outsourced services by the federal government and
the belief that DynCorp is competitively positioned to benefit
from this growth.

Moody's expects DynCorp 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:

   (1) insurgency activities in politically unstable regions of
       the world cause the government to halt the company's
       operations in a particular region or make it difficult to
       deploy personnel to perform services;

   (2) the government's spending priorities shift and cause the
       termination of any large contracts; the company is unable
       to win a significant portion of re-competes for its large
       contracts;

   (3) the company is unable to win sufficient new business to
       grow its revenue base;

   (4) the company increases leverage due to another large
       acquisition; or

   (5) the company incurs substantial costs in connection with
       certain outstanding legal proceedings.

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 assignment of the SGL-3 speculative grade liquidity rating
reflects the company's adequate liquidity profile and Moody's
expectation of quarterly cash flow volatility, which may require
significant utilization of the revolver.  Moody's expects cash
flows from operations to fluctuate during the next four quarters
due to the company's rapid revenue expansion and uncertainty as to
the timing of collection of billed and unbilled accounts
receivables.  The company's recurring cash needs in the next
twelve months will also include a minimal amount of capital
expenditures and term loan amortization and an excess cash flow
sweep pursuant to the terms of the proposed secured credit
facility.  Although Moody's expects the company to generate
significant free cash flow from operations in the next twelve
months, the timing of such cash flows is uncertain and the company
may need to rely heavily on its revolver.  Although financial
covenant levels under the proposed credit facility have not been
finalized, Moody's expects the company to have adequate cushion
against the covenants over the next twelve months.

The $420 million in senior credit facilities will be secured by
substantially all the assets of DynCorp including a first-priority
pledge of 100% of the capital stock of domestic subsidiaries.  An
unconditional guarantee from all material subsidiaries supports
the credit facility.

The $320 million of Notes will be subordinated to existing and
future senior debt of DynCorp and will rank equally with future
senior subordinated debt.  The Notes will be guaranteed on a
senior subordinated basis by existing and future domestic
subsidiaries of the company.

DynCorp will be highly leveraged at the closing of the acquisition
with debt to total book capitalization of about 75%.  Pro forma
free cash flow to total debt is expected to be in the range of
5%-7% in the fiscal year ending April 1, 2005.  Pro forma debt to
EBITDA is expected to be about 5.5 times for the fiscal year 2005
and pro forma EBITDA to interest is expected to be over 2 times.

Headquartered in Irving, Texas, DynCorp provides defense technical
services and government outsourced solutions primarily to U.S.
government customers throughout the United States and
internationally.  DynCorp's revenues for the twelve-month period
ended October 1, 2004 was about $1.6 billion.


E*TRADE FINANCIAL: S&P Alters Outlook on Low-B Ratings to Positive
------------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' long-term
counterparty rating on E*TRADE Financial Corp. E*TRADE Bank's
counterparty ratings were affirmed at 'BB/B.'  At the same time,
the outlook for E*TRADE Financial was revised to positive from
stable.  The outlook for E*TRADE Bank remains stable.

"The outlook revision at E*TRADE Financial Corp reflects continued
improvements in fundamental performance as it benefits from its
strategic and operational restructuring program, operating
leverage at the brokerage segment, and reduced balance sheet
leverage at the holding company," said Standard & Poor's credit
analyst Helene De Luca.  "Also, higher core earnings at the Bank,
driven primarily by its lower cost of funds, continue to enhance
the holding company's income diversification."

Should the brokerage segment expand its market share and revenue
of its core business, the Bank continue to generate consistent and
improving core earnings, and the holding company continue its
lower balance sheet leverage, E*TRADE Financial Corp.'s ratings
could be raised.


ENRON CORP: Court Approves Termination of Cuiaba Financing Pacts
----------------------------------------------------------------
Prior to their bankruptcy filing, Enron Corp. and certain of its
affiliates became involved with certain affiliates of Shell Gas
B.V. in the construction of a power plant in Cuiaba, Brazil, and
related natural gas pipeline spurs in Brazil and Bolivia.  The
Cuiaba Project is now completely built and operational.

Martin A. Sosland, Esq., at Weil Gotshal & Manges LLP, in New
York, relates that the Cuiaba Project consists of four companies
that on an integrated basis:

   -- operate around 480 MW gas-fired, combined-cycle power plant
      in Cuiaba, Mato Grosso, Brazil;

   -- purchase natural gas in Bolivia or Argentina; and

   -- transport the gas to Brazil for use as fuel in the
      generation of electrical energy at the Power Plant.

Empresa Produtora de Energia Ltda., a power generation company,
operates the Power Plant.  Gasoriente Boliviano Ltda., a gas
transportation company, operates a 226-mile, 18-inch gas pipeline
in Bolivia to transport natural gas to the Bolivia-Brazil border.
Gasocidente do Mato Grosso Ltda., another gas transportation
company, operates a 175-mile, 18-inch gas pipeline in Brazil,
which connects to the GasBol pipeline at the Bolivia-Brazil
border and transports natural gas from the border to the Power
Plant.  Transborder Gas Services Ltd., a gas supply company,
purchases natural gas from Bolivian or Argentinean sources,
arranges for transportation of the gas, including through GasBol
and GasMat, and sells the gas to EPE.

The Cuiaba Project sells all of the capacity of, and energy
produced by, EPE to Furnas Centrais Eletricas SA, one of Brazil's
federally owned electricity generation companies.

                    Shell Settlement Agreement

With the U.S. Bankruptcy Court for the Southern District of New
York's approval, the Debtors, Shell Gas B.V., Shell Overseas
Trading Limited, Shell Cuiaba Holdings Limited and Shell Gas Latin
America B.V., entered into a settlement agreement dated June 3,
2003, to resolve disputes regarding the obligation to fund
proposed budget increases during the development of the Cuiaba
Project.  Pursuant to the Settlement Agreement, the parties agreed
to use commercially reasonable efforts to obtain the release of
any liens relating to the Cuiaba Financing.

                    Cuiaba Financing Agreements

In September 1999, Reorganized Debtors Enron Corp., Enron South
America, LLC, Enron do Brazil Holdings, Ltd., and Enron Brazil
Power Holdings I, Ltd. entered into financing arrangements with
respect to the Cuiaba Project:

   1.  Enron International Bolivia Holdings Ltd.;

   2.  the Shell Companies -- SOTL, Shell Gas B.V., Shell Austria
       Gesellschaft m.b.H., Shell International Investments
       Limited, Shell Cuiaba, Shell Treasury Dollar Company
       Limited;

   3.  the CIB Companies -- EPE, EPE Holdings Ltd., EPE
       Investments Ltd., GasBol, GasMat, GasMat Holdings Ltd.,
       GasMat Investments Ltd., Transborder Gas, EPE Generation
       Holdings Ltd.;

   4.  Interjuris S/C Ltda., as Escrow Agent;

   5.  KfW, formerly Kreditanstalt Fur Wiederaufbau;

   6.  Overseas Private Investment Corporation;

   7.  Transredes - Transporte de Hidrocarburos S.A.; and

   8.  Banco Citibank S.A., Citibank, N.A., Bolivia, and
       Citibank, N.A., as agents

Pursuant to the financing arrangements, OPIC and KfW agreed to
provide limited recourse project financing with respect to the
development and construction of the GasBol and GasMat pipelines
and the Power Plant:

   (a) OPIC, EPE, GasMat and GasBol, entered into a Finance
       Agreement dated September 30, 1999, as amended from time
       to time;

   (b) EPE, GasMat, GasBol and KfW entered into a KfW ECA Loan
       Facility Agreement dated September 30, 1999, as amended
       from time to time -- the KfW Covered Loan Agreement;

   (c) EPE, GasBol, GasMat and KfW entered into a KfW Commercial
       Loan Facility Agreement dated September 30, 1999, as
       amended from time to time -- the KfW Uncovered Loan
       Agreement;

   (d) EPE, GasMat, GasBol, OPIC, KfW, Banco Citibank, Citibank
       Bolivia, and Citibank N.A., and certain other parties
       entered into a Common Terms Agreement, dated September 30,
       1999, as amended from time to time;

   (e) EPE, Enron, SOTL and Transredes entered into a Liquidity
       Facility Agreement dated September 30, 1999, as amended
       from time to time;

   (f) OPIC, KfW, Transredes, Enron, Shell and certain other
       parties, entered into an Intercreditor Agreement dated
       September 30, 1999, as amended from time to time; and

   (g) GasBol, EPE, and GasMat and the Agents entered into a
       letter agreement dated June 10, 1999, as amended on
       June 14, 1999, as amended from time to time -- the Agency
       Fee Letter.

As contemplated under the Financing Agreements, OPIC and KfW were
granted a security interest in certain of the assets of EPE,
GasMat, GasBol and certain other CIB Companies to secure the
obligations under the Financing Agreements.

Mr. Sosland reports that certain condition precedents were never
satisfied under the Financing Agreements.  As a result, the
parties to the Cuiaba Financing Agreements desire to:

     * terminate each of the Financing Agreements and related
       documents; and

     * release the security interests and any potential claim
       established under the Agreements.

Pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure, the Debtors sought and obtained the Court's authority
to enter into the Termination Agreement.

The Debtors believe that the settlement contemplated by the
Termination Agreement is a very favorable development for their
Chapter 11 cases.  The Termination Agreement resolves numerous
complicated legal and factual issues relating to the Financing
Agreements.  Additionally, the Termination Agreement facilitates
the removal of liens on a substantial number of assets as
required pursuant to the terms of the Settlement Agreement.

                      Termination Agreement

The salient terms of the Termination Agreement are:

A. Termination of Financing Agreements

   These agreements will be terminated:

      -- OPIC Finance Agreement;
      -- KfW Covered Loan Agreement;
      -- KfW Uncovered Loan Agreement;
      -- Common Terms Agreement;
      -- Intercreditor Agreement;
      -- Liquidity Facility Agreement; and
      -- Agency Fee Letter

B. Termination of Security Agreements

   29 Security Agreements related to the financing arrangements
   will be terminated

C. Termination of Performance Security

   In connection with the termination of each Financing and
   Security Agreements, any performance or retention bond, parent
   guaranty, letter of credit or other security provided by any
   party to another will, as of the Effective Date of the
   Termination Agreement, be terminated and cancelled, and will
   thereafter be null, void and of no further binding effect.

D. Termination of Escrow Account

   The escrow agreement dated October 10, 2000, entered into by
   Freshfields Bruckhaus Deringer, LLP, EPE, GasBol, GasMat,
   OPIC, KfW and certain other parties, pursuant to which certain
   of the agreements related to the Financing were escrowed, will
   be terminated and cancelled and will thereafter be null, void
   and of no further binding effect.  OPIC and KfW will provide
   written instructions directing the escrow agent under the
   Freshfields Escrow Agreement to destroy the escrowed documents
   and to notify the parties that the documents have been
   destroyed.

E. Revocation of POA

   The Borrowers and Lenders will revoke each of the powers of
   attorney executed in connection with the Financing Agreements.
   No party will be entitled to receive any payments or
   indemnities as a result of the revocation of the POA.

F. Release

   Each party will release any encumbrance granted to it under
   the Security Agreements.

   To formalize in Brazil the termination and the release of the
   securities created in Brazil, the Brazilian Governmental
   Authorities may require the presentation of a separate release
   term of each Security Agreement executed in Brazil.  The
   parties will agree promptly after the written request of the
   Borrowers to execute the release terms, as they become
   reasonably necessary.

   The parties will take all measures that may be necessary or
   desirable for the registration in Brazil of the Termination
   Agreement, together with its sworn translation into
   Portuguese, and the release terms.

   Each party will take further action, as may be necessary or
   reasonably desirable, to terminate or release any encumbrance
   on any asset of any CIB Company.

G. Release of Claims

   Each Lender, on behalf of itself and its affiliates will, on
   the Effective Date, fully and forever release and discharge
   each Borrower and its related parties from all claims that
   could be asserted by any Lender against any Borrower or any of
   their related parties.  Each of the Lenders will not seek to
   bring any action of any kind against any Borrower Released
   Party for any claim, and each of the Borrowers will not seek
   to bring any action of any kind against any of the Lender
   Released Parties for any claim.

H. Release of Claims by the Borrowers

   Each Borrower, on behalf of itself and its affiliates, will on
   the Effective Date, release and discharge each Lender and its
   related parties of and from all claims that could be asserted
   after the Effective Date, by any Borrower against any Lender.

A copy of the Termination Agreement is available for free at:

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

Headquartered in Houston, Texas, Enron Corporation is in the midst
of restructuring various businesses for distribution as ongoing
companies to its creditors and liquidating its remaining
operations.  Before the company agreed to be acquired, controversy
over accounting procedures had caused Enron's stock price and
credit rating to drop sharply.

Enron filed for chapter 11 protection on December 2, 2001 (Bankr.
S.D.N.Y. Case No. 01-16033).  Judge Gonzalez confirmed the
Company's Modified Fifth Amended Plan on July 15, 2004, and
numerous appeals followed.  The Confirmed Plan took effect on
Nov. 17, 2004.  Martin J. Bienenstock, Esq., and Brian S. Rosen,
Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in
their restructuring efforts.


EYE CARE: S&P Junks Proposed $150 Million Subordinated Notes
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on Eye
Care Centers of America, Inc., including the 'B' corporate credit
rating.  All ratings were removed from CreditWatch, where they
were placed with developing implications on Dec. 7, 2004.  The
outlook is stable.

At the same time, Standard & Poor's assigned its 'B' bank loan
rating to Eye Care Centers' proposed $190 million secured credit
facility.  A recovery rating of '3' also was assigned to the loan,
indicating that lenders can expect a meaningful recovery of
principal (50%-80%) in the event of a default.

In addition, a 'CCC+' rating was assigned to Eye Care's proposed
$150 million subordinated note issuance.

Proceeds from the credit facility and subordinated notes, along
with $163 million in equity contribution, will be used to fund the
buyout of Eye Care Centers by Moulin International and Golden Gate
Capital.  Moulin International (unrated), a Hong Kong based
optical frames manufacturer and distributor, will own a
controlling equity interest in the company.  Pro forma for the
transaction, Eye Care will have about $315 million in funded debt.

"Ratings on the San Antonio-based specialty optical retail chain
reflect Eye Care Centers' participation in the increasingly
competitive and promotional optical retail industry, its small
size relative to key competitors, and high debt leverage," said
Standard & Poor's credit analyst Ana Lai.

The company, which is the third-largest optical retail chain in
the U.S., benefits from its satisfactory market position in the
relatively stable, but highly competitive and fragmented, U.S.
optical retail market.  Eye Care faces strong competition from
industry leader Luxottica S.p.A., owner of Lenscrafters and Cole
Vision, which has much larger chains in terms of sales and store
locations, and thus benefits from greater economies of scale.

Still, industry fundamentals remain positive, supported by
favorable demographics, product innovations, and the growing role
of managed care in this industry.  Eye Care Centers operates
377 stores, primarily in the superstore format, under nine
different brands.  The company's strategy to cluster stores in its
target markets to maximize operating efficiencies has enabled it
to attain the No. 1 or No. 2 share position in most of its largest
regional markets.


FEDERAL-MOGUL: Says Proposed Asbestos Trust is Fatally Flawed
-------------------------------------------------------------
Federal-Mogul Corporation (OTC Bulletin Board: FDMLQ) and the
Official Committee of Unsecured Creditors of Federal-Mogul
submitted a joint letter to the U.S. Senate strongly opposing the
creation of a national asbestos trust fund, citing the extremely
inequitable and adverse impact such a proposal would have on
Federal-Mogul and its future viability.

While Federal-Mogul and the Creditors Committee support efforts to
reform the asbestos litigation crisis through passage of a medical
criteria bill and also support enactment of meaningful tort reform
measures, the Company and Creditors cannot support a national
trust that imposes a grossly disproportionate payment obligation
on Federal-Mogul while providing a bailout to a small number of
companies that are responsible for the lion's share of the most
serious asbestos claims in the tort system.

In a process strikingly reminiscent of the "taxation without
representation" that the American Revolution was fought over, the
trust fund would compel mandatory annual payments for a period of
nearly 30 years from companies, a number of whom have joined a new
coalition of defendant companies opposing the legislation.  These
payments threaten the viability of countless companies, bear no
relevance to their asbestos exposure or costs, and have been
developed in the absence of consultation with or input from the
companies.  Compounding the devastating effect of the payments,
the trust fund would strip companies of their insurance coverage
for asbestos claims -- coverage on which premiums have been paid
and that would be forfeited, perhaps unconstitutionally.

Through this manifestly unfair and undemocratic process, the
legislation would make Federal-Mogul the largest proposed
contributor to the national asbestos trust, requiring the Company
to pay a far greater amount to the trust fund than it would under
its reorganization plan, while simultaneously eliminating the
company's ability to access its insurance assets to compensate
foreign asbestos claimants.

In their letter, the Company and Creditors Committee again
outlined the dire business consequences that passage of
legislation creating a national asbestos trust would have on the
Company, and urged Senators to consider alternative legislation
establishing medical criteria as a more equitable solution to the
asbestos litigation crisis.

This joint Company and Creditors Committee letter follows a
Jan. 3, 2005, business coalition letter to Senate Judiciary
Committee Chairman Arlen Specter (R-PA) signed by Exxon Mobil,
DuPont, Federal-Mogul and the Creditors Committee, and other U.S.
businesses opposing the national trust.  As in the case of the
other companies signing the coalition letter, Federal-Mogul can
demonstrate that it fares far worse under the legislation than
under the existing tort system or if allowed to confirm its
reorganization plan.

                         *     *     *

Federal-Mogul Corporation and the Official Committee of Unsecured
Creditors assert that the concept of a national no-fault asbestos
claims trust, as incorporated in the Federal Activities Inventory
Reform Act, is fatally flawed, despite the best efforts of the
U.S. Senate and business, insurance and organized labor
stakeholders.

A full-text copy of Federal-Mogul and the Committee's joint letter
is available for free at:

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

Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's larges
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)


FIB BUSINESS: Fitch Junks Six Adjustable-Rate Note Classes
----------------------------------------------------------
Fitch Ratings takes rating actions on these classes of securities:

FNBNE Business Loan Notes, series 1998-A:

     -- Class A notes affirmed at 'AA';
     -- Class M-1 affirmed at 'BBB';
     -- Class M-2 notes affirmed at 'BB'.

FIB Business Loan Notes, series 1999-A:

     -- Class A notes downgraded to 'A+' from 'AA';
     -- Class M-1 notes affirmed at 'BBB';
     -- Class M-2 notes affirmed at 'BB'.

FIB Business Loan Notes, series 2000-A:

     -- Class A notes downgraded to 'B' from 'BBB-';
     -- Class M-1 notes downgraded to 'CCC' from 'B';
     -- Class M-2 notes downgraded to 'CC' from 'CCC'';
     -- Class B notes affirmed at 'CC'.

FIB SBA Loan-Backed Adjustable-Rate Certificates, series 1999-1:

     -- Class A notes downgraded to 'BB-' from 'BBB';
     -- Class M notes downgraded to 'CCC' from 'B-'.
     -- Class B notes downgraded to 'CC' from 'CCC'.

FIB SBA Loan-Backed Adjustable-Rate Certificates, series 2000-1:

     -- Class A notes downgraded to 'B' from 'BBB-';
     -- Class M notes downgraded to 'CC' from 'CCC'.

FIB SBA Loan-Backed Adjustable-Rate Certificates, series 2000-2:

     -- Class A notes downgraded to 'BB+' from 'BBB';
     -- Class M notes downgraded to 'B-' from 'B'.

For the affirmed classes, the transactions are performing within
Fitch's expectations.  The downgraded classes reflect
deterioration in credit quality and adverse collateral performance
within the securitizations, and the resulting decline in credit
enhancement available in each transaction.  Fitch's performance
expectations incorporated several stress scenarios, which included
stressed recovery rates on both defaulted contracts and expected
defaults on delinquent contract balances.  As a result of current
performance and the assumed scenarios, ratings have been lowered
or affirmed.

Since Fitch's last rating action on Aug. 1, 2003, delinquencies
within the FIB securitizations have remained at historically high
levels.  Specifically, loans to borrowers in the manufacturing,
metals/steel mill, and millwork/textile industries have
contributed to the transactions' high delinquency and loss levels,
which have exceeded Fitch's initial base case assumptions.

              Credit Enhancement and Excess Spread

Structurally, the FIB securitizations contain a mechanism that
traps additional excess spread equal to the full amount of all
delinquent loans 180-720 days past due.  However, the significant
portfolio delinquency experience, in some cases greater than 20%-
30% of the outstanding collateral loan balance prevents the
trapping mechanism to adequately fund up the reserve account to
the required levels and have hindered the transactions' abilities
to absorb losses.  Consequently, the transactions have experienced
a significant reduction in available excess spread, which has in
turn, negatively impacted credit enhancement.

Of particular concern is the continued increasing under-
collateralized position for several transactions.  Although
delinquencies have remained relatively stable, albeit higher than
Fitch's original expectations and historical levels, the pace of
recoveries has not increased enough to help collateralize the
transactions.  As of Nov. 30, 2004, the 1998-A, 1999-A, 2000-A,
2000-1, and 2000-2 are currently under-collateralized by -2.03%, -
8.90%, -23.66%, -22.65%, and -3.05%, respectively.

                      Methodology Employed

In its analysis, Fitch reviewed each securitization at the
individual loan level.  For all loans greater than 90 days past
due, Fitch modeled expected losses and recoveries for each loan
based on the collateral supporting that loan.  During its
collateral review, Fitch assessed expected recoveries on each
piece of collateral.

Essential to Fitch's analysis were:

     * the specific collateral type supporting the loans (i.e.
       machinery and equipment, real estate and/or accounts
       receivable),

* appraised values,

* FIB's lien position;

* historical recovery rates and

* FIB's own expected recovery rates.

After estimating future recoveries and subsequent losses on each
loan, Fitch defaulted all loans over 90 days past due in each
transaction in order to estimate future enhancement levels.  This
practice enabled Fitch to estimate the amount of future
enhancement that would be able to cover losses for each class of
notes.

Fitch's review also took into consideration certain top borrower
concentrations within the securitizations relative to current and
expected credit enhancement levels.

Securitization-specific performance statistics as of
Nov. 30, 2004:

FNBNE Business Loan Notes, series 1998-A:

     -- pool factor of 16% and cumulative net losses of 7.56%;

     -- the 90-720 day delinquency rate is 7.54% and the 180-720
        day delinquency rate is 7.54%.

FIB Business Loan Notes, series 1999-A:

     -- pool factor of 22% and cumulative net losses of 15.52%;

     -- the 90-720 day delinquency rate is 13.09% and the 180-
        720-day delinquency rate is 7.96%.

FIB Business Loan Notes, series 2000-A:

     -- pool factor of 29% and cumulative net losses of 21.88%;

     -- the 90-720 day delinquency rate is 13.38% and the 180-
        720-day delinquency rate is 8.30%.

FIB SBA Loan-Backed Adjustable-Rate Certificates, series 1999-1:

     -- pool factor of 30% and cumulative net losses of 12.97%;

     -- the 90-720 day delinquency rate is 19.62% and the 180-
        720-day delinquency rate is 12.06%.

FIB SBA Loan-Backed Adjustable-Rate Certificates, series 2000-1:

     -- pool factor of 44% and cumulative net losses of 21.90%;

     -- the 90-720 day delinquency rate is 25.17% and the 180-
        720-day delinquency rate is 16.53%.

FIB SBA Loan-Backed Adjustable-Rate Certificates, series 2000-2:

     -- pool factor of 41%; cumulative net losses of 15.57%;

     -- the 90-720 day delinquency rate is 8.43% and the 180-720
        day delinquency rate is 6.32%.

Fitch will continue to closely monitor these transactions and may
take additional rating action in the event of further
deterioration.

FIB, formerly First National Bank of New England, is a Connecticut
Bank and Trust Company organized in 1955 and headquartered in
Hartford, Connecticut.  Prior to August 2001, FIB was a wholly
owned subsidiary of First International Bancorp, Inc., a Delaware
Corporation.  United Parcel Service, headquartered in Atlanta,
Georgia, purchased FIB in August 2001.


FIBERMARK INC: Chapter 11 Plan Voting Deadline Moved to Jan. 24
---------------------------------------------------------------
FiberMark, Inc., (OTC Bulletin Board: FMKIQ) filed a notice
extending the voting deadline on its Plan of Reorganization to
January 24.  Originally set for January 20, the deadline was
extended to provide additional time to resolve certain issues.

As reported in the Troubled Company Reporter on Jan. 19, 2005,
FiberMark advised the U.S. Bankruptcy Court for the District of
Vermont that disagreements among bondholder members of the
company's Creditors Committee as to a number of corporate
governance issues could result in a rejection of the Plan by the
company's bondholders.  Although the Creditors Committee had
agreed to support the Plan of Reorganization filed on Dec. 17, its
bondholder members have been unable to reach a consensus regarding
certain implementation documents, primarily related to corporate
governance, which must be filed in advance of the confirmation
hearing and must be approved prior to the Plan's effective date.

The company said it would withdraw the Plan of Reorganization on
January 21 if agreement among the creditors cannot be reached on
the implementation issues prior to that date.  In that event, the
company intends to file a new Plan of Reorganization that would
include typical governance provisions.  The company anticipates no
other material changes to its Plan.  Any new Plan, if filed, may
require a second voting process, which would likely result in a
delay in the company's emergence from chapter 11 of approximately
30 to 60 days, or until late March or April.

Although the company was not a party to the discussions that
occurred among several of its major bondholders, it understands
that the discussions centered on issues related to post-emergence
corporate governance matters, including corporate charter and
by-law provisions related to shareholder rights.  Since the
reorganized company is to be incorporated under Delaware law,
matters of corporate governance would be determined with reference
to such law.  While an extensive array of shareholder protections
exist under Delaware law, such protections may vary by agreement
of the shareholders.  Any variation may impact positively or
negatively the rights of a particular shareholder, depending on
the size of its holdings.  The company believes that its major
future shareholders were unable to agree unanimously on the degree
to which the company's future corporate governance provisions
should be changed from the standard provisions of Delaware law,
with the result that the company's Plan as filed on December 17
may not receive the votes required for Bankruptcy Court approval.
These rights relate to the new shareholders of FiberMark,
including current bondholders and trade creditors.  The rights at
issue do not pertain to current shareholders, whose shares are
expected to be cancelled as specified in FiberMark's Plan of
Reorganization, with no recovery expected for such current
shareholders.

The company does not anticipate publicly reporting fourth-quarter
and year-end 2004 results if it emerges from chapter 11 as a
private company prior to year-end SEC filing deadlines.  However,
should emergence from chapter 11 be delayed beyond March 30, the
company would anticipate publicly reporting these results and
filing an Annual Report on Form 10-K with the SEC.

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


FIRST VIRTUAL: Case Summary & 30 Largest Unsecured Creditors
------------------------------------------------------------
Lead Debtor: First Virtual Communications, Inc.
             3200 Bridge Parkway, Suite 202
             Redwood City, California 94065

Bankruptcy Case No.: 05-30145

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      CUseeMe Networks, Inc.                     05-30146

Type of Business: The Debtor delivers integrated software
                  technologies for rich media web conferencing
                  and collaboration solutions.
                  See http://www.fvc.com/

Chapter 11 Petition Date: January 20, 2005

Court: Northern District of California (San Francisco)

Judge: Thomas E. Carlson

Debtors' Counsel: Kurt E. Ramlo, Esq.
                  Skadden, Arps, Slate, Meagher & Flom
                  300 South Grand Avenue #3400
                  Los Angeles, CA 90071
                  Tel: 213-687-5628

Total Assets: $7,485,867

Total Debts:  $13,567,985

Debtor's 30 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Cornell Research Foundation   Technology Sale           $300,000
Attn: Lewis Goodwin           Agreement
20 Thornwood Drive, Ste. 105
Ithaca, NY 14850

Baker & McKenzie, Attorneys   Trade                     $298,518
at Law
Attn: Cynthia Jackson
660 Hansen Way
Palo Alto, CA 94304

France Telecom                Trade                     $112,500
Attn: Tania L'Hermite
38 Rue du General Leclerc
92794 Issy les Moulineaux
Cedex 9
Paris, France

Westport Joint Venture        Lease                      $95,961

American Express              Trade                      $35,889

Kompass Integrated Solutions  Trade                      $27,286

American Inform Technology    Trade                      $23,800
Corp.

Cooley Godward LLP            Trade                      $18,528

Ilima Partners, LLC           Trade                      $17,050

Wilson Sonsini Goodrich       Trade                      $16,353
& Rosati

McVey Defense Initiatives     Trade                      $15,088
Group Inc.

Market-Vantage Internet       Trade                      $14,745
Performance Marketing LLC

Mark Laita Photography        Trade                      $14,650

AT&T                          Trade                      $14,402

Gung-Ho Company               Trade                      $14,286

ArchiText, Inc.               Trade                      $13,735

BroadPR, Inc.                 Trade                      $12,490

Delaware Secretary of State   Annual Incorporation       $11,873
Division of Corporations      Fees

CDW Corporation               Trade                      $10,849

8020 Group                    Trade                      $10,600

PricewaterhouseCoopers, LLP   Trade                      $10,512

Okeeffe & Company             Trade                      $10,000

KPMG LLP                      Trade                      $10,000

Productivity Card Services    Trade                       $9,801

Overture Partners, LLC        Trade                       $7,910

E*Trade                       Trade                       $7,624

Immix Group Inc.              Trade                       $7,500

Bowne of Los Angeles, Inc.    Trade                       $6,987

Agere Systems                 Trade                       $6,824

Spherion Corporation          Trade                       $6,544


FREEDOM MEDICAL: Turns to Penn Hudson for Financial Advice
----------------------------------------------------------
Freedom Medical, Inc., seeks authority from the U.S. Bankruptcy
Court for the Eastern District of Pennsylvania to retain Penn
Hudson Financial Group, Inc., as its financial advisor during its
bankruptcy proceeding.

Penn Hudson is expected to:

     a) evaluate the Debtor's business;

     b) render advice to the Debtor and its management with
        respect to various strategic alternatives;

     c) assist the Debtor with the preparation and presentation
        of a plan of reorganization and assist in its
        implementation;

     d) identify prospective lenders and purchasers and exploit
        alternatives of restructuring the Debtor's indebtedness
        to Wachovia Bank, N.A. and assist in the sale of the
        Debtor's assets;

     e) prepare and disseminate information required by
        prospective lenders and purchasers;

     f) provide expert testimony, to the extent necessary, with
        respect to its analysis and advice; and

     g) provide any additional financial advice and assistance
        to the Debtor as may be required and agreed upon.

Robert M. Starr, a managing director at Penn Hudson, discloses
that the Debtor will pay his Firm a success fee of $1.75% for any
aggregate debt refinanced and placed, and $1.75% for any assets
sold.  For their professional services, the Debtor agrees to pay
the hourly rate of $300 to managing directors and $195 to vice
presidents and associates of the Firm.

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

Headquartered in Exton, Pennsylvania, Freedom Medical, Inc., --
http://www.freedommedical.com/-- sells electronic medical
equipment and related services to hospitals, alternate site
healthcare providers, and EMS transport organizations.  The
Company filed for chapter 11 protection on December 29, 2004
(Bankr. E.D. Pa. Case No. 04-37092).  When the Debtor filed for
protection from its creditors, it listed estimated assets and
debts of more than $50 million.


GENERAL NUTRITION: Restructuring Prompts S&P to Lift Rating to B+
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its bank loan rating on
General Nutrition Centers, Inc., to 'B+' from 'B'.  The company
recently used the proceeds from a senior unsecured note offering
to repay a significant portion of its term loan, thereby reducing
the overall level of its senior secured debt.  As a result, the
value of the company, in a distressed scenario, will more than
fully cover the smaller bank loan.  A recovery rating of '1' was
also assigned to the loan, indicating the expectation for full
recovery of principal in the event of a default.

All other ratings on GNC were affirmed, including the 'B'
corporate credit rating.  The outlook is stable.

"Ratings on GNC, a leading specialty retailer of nutritional
supplements, reflect the company's recent weak operating
performance, expectations of continued operational challenges, its
product liability risk, and high debt leverage," said Standard &
Poor's credit analyst Kristi Broderick.

GNC's recent weak operating performance is due to softness in the
diet category, a drop-off in sales of low-carb products, and poor
execution of operations, which has resulted in a loss of market
share.  The company's merchandise assortment has not been managed
well.  A healthy first quarter of 2004 was more than offset by a
soft second quarter and an even weaker third quarter.  This
deteriorating trend is revealed in GNC's comparable-store sales
figures for its company-owned domestic stores, which increased
6.7% in the first quarter, but fell 3.2% in the second quarter and
then 10.7% in the third quarter.  While other players in the
nutritional supplements industry are feeling the softness in the
diet category, they have not experienced the magnitude of GNC's
recent weakness in comparable-store sales.


GITTO GLOBAL: U.S. Trustee Asks Court to Convert Case to Chapter 7
------------------------------------------------------------------
Phoebe Morse, the United States Trustee for Region 1, asks the
U.S. Bankruptcy Court for the District of Massachusetts to convert
the Chapter 11 case filed by Gitto Global Corporation to a Chapter
7 liquidation proceeding.

Ms. Morse gives the Court three reasons militating in favor of her
request:

   a) the Debtor has failed to file its monthly operating reports
      since the period ending October 31, 2004, and those reports
      are necessary for the office of Ms. Morse to monitor the
      Debtor's chapter 11 case;

   b) since the Court authorized the sale of substantially all of
      the Debtor's assets on December 10, 2004, and closed on
      December 17, 2004, there has been a continuing loss or
      diminution of the Debtor's estate; and

   c) with practically all of its assets sold, the Debtor is
      unable to conduct ongoing business, it has no reasonable
      likelihood of rehabilitation and is therefore unable to
      effectuate a plan of reorganization.

The Court will convene a hearing at 2:00 p.m., on Feb. 9, 2005, to
consider Ms. Morse's conversion motion.

Headquartered in Lunenburg, Massachusetts, Gitto Global
Corporation -- http://www.gitto-global.com/-- manufactures
polyvinyl chloride, polyethylene, polypropylene and thermoplastic
olefinic compounds.  The Company filed for chapter 11 protection
on September 24, 2004 (Bankr. D. Mass. Case No. 04-45386).  Andrew
G. Lizotte, Esq., at Hanify & King P.C., represents the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed estimated assets of $10 million to
$50 million and estimated debts of $50 million to $100 million.


HAWAIIAN AIRLINES: Wants to Modify Pilots Contract
--------------------------------------------------
Having reached a deadlock with its pilots union despite months of
negotiations, Hawaiian Airlines requested bankruptcy court
approval to extend and modify its labor contract with the Air Line
Pilots Association -- ALPA.  The company said it would continue to
try to reach a negotiated agreement.

Trustee Joshua Gotbaum said, "We would much rather negotiate an
agreement -- as we've done with every other union -- than have the
court impose one.  We have proposed a contract that would preserve
the 40-plus percent wage increases the pilots have enjoyed over
the past four years, plus additional wage increases, plus a
pension plan as generous as any in the industry, plus profit
sharing.  Unlike every other airline, we've proposed no wage cuts
and no cost cuts.  From the onset of negotiations we have sought
to keep costs from rising more, by moving to industry standard
productivity and benefits.  We think that's what Hawaiian needs to
do at a time when every one of our competitors is cutting costs
and lowering fares."

In its filing with the bankruptcy court, Hawaiian noted that over
the past four years the airline's labor costs had risen to the
point that they were now higher than those of its major
competitors.  Since airlines are now competing primarily on the
basis of low fares, Hawaiian believes that to compete its costs,
including labor costs, cannot be out of line.  Nonetheless, the
airline pointed out that it has not proposed to cut wages or
overall labor costs, but instead only to keep them from rising
even more.

Hawaiian has already negotiated agreements that meet this test
with the Association of Flight Attendants, the International
Association of Machinists, the Network Engineers, and the
Transport Workers Union.  Taken together, the contracts already
negotiated cover 89 percent of the union employees.  All of these
contracts were recommended by these unions for ratification by
their members; some have already been ratified, and others are now
in process.  However, Hawaiian cannot exit bankruptcy until new
contracts are in place for all unions.  Gotbaum said the court
process would provide a deadline and help speed Hawaiian's exit
from bankruptcy, and that was the reason for the company's action.

In its other labor agreements, Hawaiian has negotiated wage
increases, combined with improvements in productivity and changes
in benefits so that overall costs would neither rise nor fall.
The airline would not discuss the details of any of the
agreements, but said that it had made similar proposals to the
pilots.

The company noted that it had negotiated cost cuts from many of
its suppliers, including its aircraft lessors, that in 2005 alone
these would save Hawaiian some $66 million.  Nonetheless, Gotbaum
said, Hawaiian could not succeed if its labor contracts or costs
were uncompetitive.

Gotbaum also noted that everyone recognizes the contribution of
the pilots and other employees to the airline's recovery.
"Hawaiian's success is due in large part to the people who are
Hawaiian Airlines.  Our goal is contracts that are fair and
recognize the extraordinary contributions of our employees, while
meeting Hawaiian's competitive needs.  If Hawaiian is to get out
of bankruptcy and survive, we need both."

After consulting with ALPA, Hawaiian requested a hearing on its
motion by the bankruptcy court on February 14 and 15, 2005.  In
the interim, the company will continue to attempt to reach an
agreement.

Headquartered in Honolulu, Hawaii, Hawaiian Airlines, Inc., --
http://hawaiianair.com/-- is a subsidiary of Hawaiian Holdings,
Inc. Amex and PCX: HA).  The Company provides primarily scheduled
transportation of passengers, cargo and mail.  Flights operate
within the South Pacific and to points on the west coast as well s
Las Vegas.  Since the appointment of a bankruptcy trustee in
May 2003, Hawaiian Holdings has had no involvement in the
management of Hawaiian Airlines and has had limited access to
information concerning the airline.  The Company filed for chapter
11 protection on March 21, 2003 (Bankr. D. Hawaii Case No.
03-00817).  Joshua Gotbaum serves as the chapter 11 trustee for
Hawaiian Airlines, Inc. Mr. Gotbaum is represented by Tom E.
Roesser, Esq., and Katherine G. Leonard, Esq., at Carlsmith Ball
LLP, and Bruce Bennett, Esq., Sidney P. Levinson, Esq., Joshua D.
Morse, Esq., and John L. Jones, II, Esq., at Hennigan, Bennett &
Dorman LLP.  When the Debtors filed for protection from their
creditors, they listed $100 million in assets and $100 million in
debts.


HEALTHCARE PARTNERS: S&P Rates Planned $145M Sr. Sec. Debt at BB
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' corporate
credit rating to Torrance, California-based integrated medical
provider HealthCare Partners Ltd. -- HCP.  Standard & Poor's has
also assigned its 'BB' senior secured debt rating and '3' recovery
rating to HCP's proposed $10 million senior secured revolving
credit facility maturing in 2010 and a $135 million senior secured
term loan B maturing in 2011.  Also, a financial sponsor purchased
a minority interest in the company through preferred equity.
Management and physician partners will continue to hold a majority
stake.

The company is expected to use the proceeds from the $135 million
term loan, sponsor preferred equity, and a portion of cash on hand
for a distribution to HCP's partners.  Pro forma for the
transaction, HCP will have $135 million of total debt outstanding.

The outlook on HCP is stable.

"The speculative-grade ratings reflect HCP's exposure to
capitation risk, its payor and regional concentration, and its
increased debt obligation following the transaction," said
Standard & Poor's credit analyst Jesse Juliano.  "These concerns
are partially offset by the company's strong position in the Los
Angeles County market, its long-standing relationships with its
largest payors, and its successful record of managing costs."

HCP, the largest privately owned medical group in California, is
an integrated health care services provider focused on the Los
Angeles County market.  HCP generally contracts with managed care
health plans to provide care for a capitated (per member per
month) rate.  HCP provides its services through a network of more
than 700 primary care physicians, 1,800 specialists, and
21 hospitals.

HCP's success will depend on its ability to negotiate for fixed
capitation rates that are higher than the variable and increasing
costs of providing care.  While HCP has successfully managed this
risk in the past, the company will have less financial flexibility
to absorb unexpected operating shortfalls after the
recapitalization transaction.  In addition, the company's four
largest clients (PacifiCare, Blue Cross of California, HealthNet,
and Blue Shield of California) account for 85% of HCP's total
membership, a concentration that reflects the dominance of these
insurance providers in the Los Angeles County market.  The loss of
one of these providers or significant changes to related contracts
could hurt HCP's operating performance.  Also, HCP is exposed to
potential (though currently unforeseen) regulatory changes related
to providing care in the state of California.  Finally, 37% of
HCP's revenues come from senior capitation.  If Medicare
reimbursement and Medicare Advantage, a program that outsources
Medicare coverage to private insurance companies, are less
favorable businesses than anticipated, HCP could also be adversely
affected.


INTELSAT LTD: Fitch May Put Low-B Ratings on Unsecured Sr. Notes
----------------------------------------------------------------
Fitch Ratings has initiated coverage of Intelsat, Ltd., and its
wholly owned subsidiary, Intelsat (Bermuda), Ltd., and expects to
assign a 'B-' rating to Intelsat's unsecured senior notes, a 'B+'
rating on the proposed offering of Intelsat Bermuda unsecured
senior notes, and a 'BB' rating to the proposed new Intelsat
Bermuda senior secured credit facilities upon finalization of
buyout terms from Zeus Holdings.  The Rating Outlook would be
Stable.

Fitch's rating action would affect an estimated $4.6 billion of
existing and proposed pro forma total debt as of the end of the
third quarter 2004.  Fitch's expected ratings are based on the
assumption that contributed equity will be at least
$515 million, total consolidated debt is in the range of
$4.6 billion, and the ratio of total debt to EBITDA is
approximately 6 times.  If the terms of the Zeus buyout deviate
from these expectations, the ratings will be reviewed and could be
revised.

Fitch's expected ratings reflect Intelsat's size and scale as the
second largest global provider of wholesale fixed satellite
services, its high prospective leverage of about 6x (as measured
by total pro forma debt to pro forma EBITDA), its adequate
liquidity position, and Fitch's expectation for modest free cash
flow generation even after its planned $5.1 billion acquisition by
Zeus Holdings.  Fitch's expected ratings also consider the intense
competition for lease contracts in the face of industry
overcapacity and difficult telecommunications industry conditions.
Although Intelsat is the largest provider of commercial satellite
capacity to the U.S. government and military, its largest customer
segment remains traditional telephone carriage.  This segment has
been experiencing a decline in revenue due to both the
overcapacity in the satellite industry and to a loss of customers
to lower cost terrestrial fiber optic cable.  The expected ratings
also consider the growing competition from the company's largest
rival, SES Global.

The expected ratings are based on Intelsat's pro forma capital
structure after an expected $5.1 billion acquisition by financial
buyers investing about 10% ($515 million) of the purchase price in
equity.  Based on the estimated purchase price, this amount of
equity leaves only thin asset coverage of the consolidated pro
forma total debt.  Although free cash flow should be sufficient to
support modest capital spending and debt reduction, liquidity
could be constrained if new satellite construction ramps up again.
Unexpected satellite failures, such as the IS-804 failure on Jan.
14, 2005, may lead to earlier than planned capital spending
requirements.  Key to Fitch's expectation of stable EBITDA and
free cash will be maintaining low capital expenditure levels after
its recent rapid deployment and acquisition of new satellite
capacity.

Over the long term, satellites will need to be replaced as useful
lives end.  The cost of these satellite replacements could be
substantial as demonstrated by the nearly $300 million per
satellite that Intelsat spent on its new satellite additions over
the past several years.  The expected ratings also reflect
possible sensitivity to the telecommunications sector specifically
and to overall economic activity in general.  Credit support is
derived from a backlog of customer contracts of approximately $3.9
billion, which should provide stability in revenue generation.
Even under the increased debt burden, pro forma total debt at
Sept. 30, 2004, will be increasing from
$2.2 billion to an estimated $4.6 billion, Intelsat should still
produce free cash flow annually.

Intelsat's liquidity position is supported by pro forma cash in
excess of $80 million and an expected $300 million initially
undrawn revolver.  Fitch expects that a significant portion of
expected free cash flow will be utilized to reduce leverage and
increase its financial capacity for future satellite additions.
The initiation of a common stock cash dividend over the
foreseeable future, without a material improvement in industry
conditions and Intelsat's financial performance could have a
significant detrimental impact on the company's credit profile.
During 2005, Fitch anticipates that the company will generate free
cash flow levels of more than $200 million, representing a modest
4% of total debt.  Fitch expects total consolidated leverage, as
measured by the ratio of total debt to EBITDA, to remain over 5x
over the next couple of years.

Other than a $200 million February 2005 debt maturity, for which
Intelsat Bermuda has arranged replacement financing in the form of
a new secured term loan, Intelsat has nominal amounts of scheduled
debt maturities from 2005-2007; however, $400 million of its 5.25%
senior notes mature in 2008, presenting refinancing risk.  Fitch
believes that this refinancing risk is magnified, given the
company's possible need to ramp up its capital spending in that
time frame.

Fitch's expected 'B-' rating for Intelsat Ltd.'s pro forma
$1.7 billion of senior notes versus the expected 'B+' rating for
Intelsat Bermuda's estimated pro forma $2.45 billion of senior
notes reflects the structural subordination of the parent company
notes to the proposed subsidiary senior notes to be issued by
Intelsat Bermuda and the diminished recovery prospects of the
parent company notes relative to the subsidiary notes. Fitch's
expected 'BB' rating for the proposed new Intelsat Bermuda senior
secured credit facilities (the expected draw will be $350 million
with $300 million unused on a revolver) reflects the substantial
value of the assets securing the facilities.

Fitch's expected Stable Rating Outlook reflects the prospects for
stable revenues from its lease backlog and the expected resulting
free cash flow balanced with the very competitive operating
environment, ownership by an investment group, and possible steep
future increases in capital spending requirements.

These expected ratings are based on existing public information
and are provided as a service to investors.


INTREPID USA: Has Until February 28 to File a Chapter 11 Plan
-------------------------------------------------------------
The Honorable Nancy C. Dreher of the U.S. Bankruptcy Court for the
District of Minnesota extended the period within which Intrepid
U.S.A., Inc., and its debtor-affiliates have the exclusive right
to file a chapter 11 plan through and including February 28, 2005.
The Debtors have until April 29, 2005, to solicit acceptances of
that plan from their creditors.

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

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

   a) the Debtors' chapter 11 cases are huge and complex, with
      operations in 31 U.S. states out of over 100 locations,
      having approximately 5,700 employees, a payroll of
      approximately $94 million and hundreds of creditors;

   b) the Debtors need additional time to gather and prepare all
      the information necessary for a proposed disclosure
      statement and to negotiate with their creditors and other
      parties-in-interest for a consensual joint plan of
      reorganization;

   c) the Debtors have to resolved certain contingencies related
      to their reorganization efforts, including a possible sale
      process of their businesses, obtaining debtor-in-possession
      financing and loan agreements and working on claims
      resolutions; and

   d) the Debtors will not use the extension to pressure their
      creditors and other parties-in-interest into acceding to a
      joint plan that is not confirmable.

Headquartered in Edina, Minnesota, Intrepid U.S.A., Inc., provides
nursing and home care services to approximately 100,000 clients
annually through 195 offices in 30 states.  The Company and its
debtor-affiliates filed for chapter 11 protection on January 29,
2004 (Bankr. D. Minn. Case No. 04-40416).  Cass S. Weil, Esq., and
James A. Rubenstein, Esq., at Moss & Barnett, represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed estimated assets
of $10 million to $50 million and estimated debts of $50 million
to $100 million.


KAISER ALUMINUM: Wants Removal Period Extended Until May 10
-----------------------------------------------------------
Kaiser Aluminum Corporation and its debtor-affiliates seek an
additional 120 days extension of the period within they may remove
numerous asbestos-related and civil actions pending in multiple
courts and tribunals pursuant to Section 1452 of the Judiciary
Procedures Code and Rule 9027 of the Federal Rules of Bankruptcy
Procedure.

The Debtors ask the United States Bankruptcy Court for the
District of Delaware to extend their Removal Period until the
later of:

   (a) May 10, 2005; or

   (b) 30 days after the entry of the order terminating the
       automatic stay with respect to the particular Action
       sought to be removed.

Due to several factors, including the number of Actions involved
and the complex nature of the Actions, the Debtors have not yet
determined which, if any, of the Actions should be removed and, if
appropriate, transferred to the District of Delaware.  The Removal
Period Extension serves to protect the Debtors' valuable right to
economically adjudicate lawsuits under Section 1452 if
circumstances warrant removal.

Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, notes that absent Removal Period Extension,
the potential consolidation of the Debtors' affairs into one court
may be frustrated and the Debtors may be forced to address claims
and proceedings in a piecemeal fashion to the detriment of their
creditors.

Ms. Newmarch maintains that the Removal Period Extension will not
prejudice the plaintiffs in the various stayed Actions because
those parties may not prosecute the Actions absent relief from the
automatic stay.

Judge Fitzgerald will convene a hearing on February 28, 2005, at
1:30 p.m. to consider the Debtors' request.  By application of
Del.Bankr.LR 9006-2, the Removal Period is automatically extended
through the conclusion of that hearing.

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.  (Kaiser Bankruptcy News, Issue No. 57;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


KEY ENERGY: Has Until March 25 to File Financial Reports
--------------------------------------------------------
Key Energy Services, Inc., (NYSE: KEG) disclosed that all of the
conditions to the Consent Solicitation it commenced on
Jan. 7, 2005, relating to the Company's outstanding 6-3/8% Senior
Notes due 2013 and 8-3/8% Senior Notes due 2008 have been
satisfied with respect to the 6-3/8% Notes.  The Company, the
Company's subsidiary guarantors of the 6-3/8% Notes and the
trustee all have executed and delivered the Supplemental Indenture
with respect to the 6-3/8% Notes pursuant to which certain
covenants have been amended to provide the Company until
March 31, 2005, to comply with the financial reporting covenants
in that indenture.  In consideration of the consent, the Company
will pay to consenting holders of the 6-3/8% Notes an amount equal
to $2.50 for each $1,000 in principal amount of the Notes on the
1st day of each month for which the reporting covenants have not
been satisfied.

As a result of these actions, the effective time with respect to
the Consent Solicitation for the 6-3/8% Notes has occurred.
Consents from the holders of the 6-3/8% Notes that were accepted
before the effective time may not be revoked; however, any holders
of 6-3/8% Notes who tender consents to the amendment before
5:00 p.m. (EST) on Jan. 21, 2005, the expiration date for the
Consent Solicitation, will receive the consent payment.  Holders
of 6-3/8% Notes who do not consent by the expiration date will not
receive the consent payment.

The Company has not yet received the requisite consent of the
holders of the 8-3/8% Notes to similarly amend the indenture
governing that series of Notes.  Holders of the 8-3/8% Notes have
until the expiration date to consent to the amendments to the
indenture of that series of notes.

A comprehensive description of the Consent Solicitation and its
conditions can be found in the Consent Solicitation Statement.

The Company has retained Lehman Brothers to serve as the
Solicitation Agent and D.F. King & Co., Inc. to serve as the
Information Agent and Tabulation Agent for the Offer.  Requests
for documents may be directed to:

               D.F. King & Co., Inc.
               48 Wall Street, 22nd Floor
               New York, N.Y. 10005
               Toll-free: (800) 848-2998
                          (212) 269-5550

Questions regarding the solicitation of consents may be directed
to Lehman Brothers, at (800) 438-3242 (toll-free) or
(212) 528-7581, Attention: Liability Management.

This announcement is not an offer to purchase or sell, a
solicitation of an offer to purchase or sell or a solicitation of
consents with respect to any securities.  The solicitation is
being made solely pursuant to the Consent Solicitation Statement
dated Jan. 7, 2005.

                       About the Company

Key Energy Services, Inc., is the world's largest rig-based well
service company.  The Company provides oilfield services including
well servicing, contract drilling, pressure pumping, fishing and
rental tools and other oilfield services.  The Company has
operations in all major onshore oil and gas producing regions of
the continental United States and internationally in Argentina and
Egypt.

                          *     *     *

As reported in the Troubled Company Reporter on August 19, 2004,
Standard & Poor's Ratings Services' 'B' corporate credit rating on
Key Energy Services, Inc., remains on CreditWatch with developing
implications.

Midland, Texas-based Key Energy had about $485 million of total
debt outstanding as of June 30, 2004.


LESLIE'S POOLMART: Prices 10-3/8% Senior Debt Offering
------------------------------------------------------
Leslie's Poolmart, Inc., disclosed the pricing terms of its
previously announced cash tender offer and consent solicitation
for its 10-3/8% Senior Notes due 2008.

The total consideration for the Notes, which will be payable in
respect of Notes accepted for payment that were validly tendered
with consents and not withdrawn on or prior to 5:00 p.m., New York
City time, on Jan. 7, 2005, will be $1,059.30 for each $1,000
principal amount of Notes, which includes the consent payment of
$30.00 per $1,000 principal amount of Notes.  Notes accepted for
payment that are validly tendered subsequent to 5:00 p.m., New
York City time, on Jan. 7, 2005, but on or prior to 5:00 p.m., New
York City time, on Feb. 2, 2005, will receive the tender offer
consideration of $1,029.30 for each $1,000 principal amount of
Notes, which is equal to the total consideration minus the consent
payment of $30.00 per $1,000 principal amount of Notes.

The total consideration for the Notes was determined as of
2:00 p.m., New York City time, on Jan. 19, 2005, and is equal to
the present value on the initial payment date (which is expected
to be on Jan. 25, 2005) of $1,025.94 (i.e., the redemption price
of the Notes on July 15, 2005, which is the earliest redemption
date of the Notes), determined based on a fixed spread of 50 basis
points over the yield today of the 1-1/8% U.S. Treasury due
June 30, 2005.  The Reference Treasury yield and the tender offer
yield to calculate the total consideration are 2.616% and 3.116%,
respectively.

The Offer is scheduled to expire at 5:00 p.m., New York City time,
on Feb. 2, 2005, unless extended or earlier terminated.  The Offer
remains subject to the satisfaction of certain conditions
including the financing condition to consummate the Offer.

The terms and conditions of the Offer are described in the Offer
to Purchase and Consent Solicitation Statement dated Dec. 23,
2004, copies of which may be obtained from the information agent
for the Offer:

         Global Bondholder Services Corporation
         U.S. Toll-free: (866) 794-2200
         Collect:        (212) 430-3774

Banc of America Securities LLC is acting as the exclusive dealer
manager and solicitation agent in connection with the Offer.
Questions regarding the Offer may be directed to Banc of America
Securities LLC, High Yield Special Products, at (888) 292-0070
(U.S. toll-free) or (704) 388-9217 (collect).

This announcement is for information purposes only and is not an
offer to purchase, a solicitation of an offer to purchase or a
solicitation of consents with respect to any securities.  The
Offer is being made solely by the Offer to Purchase and Consent
Solicitation Statement dated Dec. 23, 2004.

                       About the Company

Founded in 1963, Leslie's Poolmart, Inc., is the country's leading
specialty retailer of swimming pool supplies and related products.
The Company markets its products through 470 retail stores in 36
states; a nationwide mail-order catalog; and an internet E-
commerce site http://www.lesliespool.com/

                         *     *     *

As reported in the Troubled Company Reporter on Jan. 13, 2005,
Standard & Poor's Ratings Services assigned its 'B-' rating to
Phoenix, Arizona-based Leslie's Poolmart Inc.'s proposed
$170 million senior unsecured notes, to be issued under Rule 144A
with registration rights.  The existing ratings on the company,
including the 'B' corporate credit rating, were affirmed.  The
outlook was revised to stable from positive.

The rating on the proposed senior unsecured notes is one notch
lower than the corporate credit rating in accordance with Standard
& Poor's policy of notching down senior unsecured debt when there
is significant senior secured debt that has a priority claim to
the company's assets.  Note proceeds will be used to partly fund
the recapitalization of the company.  Leslie's $59.5 million
10.375% senior unsecured notes will be refinanced as part of the
transaction, and the 'B-' rating on them will be withdrawn.  A
five-year, $75 million revolving credit facility is also part of
the financing associated with the recapitalization.  Standard &
Poor's does not rate this revolver.  This facility will refinance
the company's existing $75 million revolver.  The 'B+' rating on
the existing facility will be withdrawn when the transaction is
completed.

"The ratings reflect the highly seasonal nature of Leslie's
business, which can be affected by unfavorable weather, the
company's participation in the relatively small pool supply
market, and weak financial ratios," said Standard & Poor's credit
analyst Kristi Broderick.  While Leslie's 474 stores in 36 states
make it the largest U.S. pool-supply chain, the company competes
with many local stores, regional chains, home improvement centers,
and discounters in a highly fragmented industry.  Although it is a
national chain, Leslie's does have some geographic concentration:
about 41% of its store base is in California and Texas.  The
company's business exhibits substantial seasonality. Sales are
significantly higher in the quarters ending June and September --
the peak months of swimming pool use. Hot weather and extended
warm seasons (summers that start early and end late) usually
result in favorable trends for the business, while cold, rainy,
and shortened warm seasons (summers that start late and end early)
generally result in unfavorable trends.


MAYTAG CORP: Will Stop Selling Major Appliances at Best Buy Stores
------------------------------------------------------------------
Maytag Corporation (NYSE: MYG) will no longer sell Maytag-branded
major appliances at the specialty retailer, Best Buy.

Maytag will continue to sell its Hoover floor care products at
Best Buy, which remains an important floor care customer.

"We have a good business relationship with Best Buy. However, our
white goods business with the specialty retailer has significantly
declined over the years," said Ralph F. Hake, Maytag chairman and
CEO.  "At this time, it does not make sense to continue selling
our major appliances at Best Buy."

Hake said that our sales of major appliances at Best Buy have
significantly declined over several years.  In 2004, they
represented about 1 percent of Maytag's consolidated revenue.

The discontinuation will become effective later in the first
quarter 2005.  Maytag and Hoover branded products continue to be
available at thousands of department, retail and home improvement
stores across the country, including Maytag Stores.

Maytag Corporation is a $4.8 billion home and commercial appliance
company focused in North America and in targeted international
markets.  The corporation's primary brands are Maytag(R),
Hoover(R), Jenn-Air(R), Amana(R), Dixie-Narco(R) and Jade(R).

                          *     *     *

As reported in the Troubled Company Reporter on Oct. 27, 2004,
Fitch Ratings has downgraded the senior unsecured rating on Maytag
Corp. to 'BB+' from 'BBB-' and the short-term debt rating to 'B'
form 'F3'.  The Rating Outlook is Stable.


MEDCOMSOFT: Selling Equity under Private Placement for $1.5 Mil.
----------------------------------------------------------------
MedcomSoft, Inc., (TSX - MSF) entered into an agreement with
Loewen, Ondaatje, McCutcheon Limited who has agreed to act as
exclusive agent, on a best efforts basis, in connection with a
proposed private placement of units.

Three million units shall be issued on a private placement basis
at a price of $0.50 per unit for gross proceeds of $1.5 million.
Each Unit will consist of one common share and one quarter common
share purchase warrant.  One full warrant will entitle the holder
to purchase one common share at an exercise price of $0.65 for a
period of 24 months from the closing date which is expected to be
on or before January 31, 2005.

The private placement is subject to certain conditions, including,
but not limited to, satisfactory due diligence, the execution of
an agency agreement, the execution of subscription agreements with
the subscribers and the receipt of all necessary regulatory
approvals.

The private placement is in addition to the Company's previously
announced Rights Offering.  The net proceeds of this financing
would be used for working capital purposes.

MedcomSoft, Inc., designs, develops and markets cutting-edge
software solutions to the healthcare industry.  MedcomSoft has
pioneered the use of codified point of care medical terminologies
and intelligent pen-based data capture systems to create a new
generation of electronic medical records -- EMR.  As a result of
MedcomSoft innovations, physicians and managed care organizations
can now securely build and exchange complete, structured and
homogeneous electronic patient records.  MedcomSoft applications
are written with the latest Microsoft tools to run on the Windows
platform (Windows 2000 & XP), operate with MS SQL Server 2000(TM),
support MS Terminal Server and fully integrate with MS Office
2003, Exchange and Outlook(R).  MedcomSoft applications are fully
compatible with Tablet PCs and wireless technology.

As of September 30, 2004, the Company's stockholders' deficit
narrowed to $1,372,508 compared to a $1,436,072 deficit at
June 30, 2004.


MEDIA SERVICES: Annual Stockholders' Meeting Set for February 7
---------------------------------------------------------------
The Annual Meeting of Stockholders of Media Services Group, Inc.,
a Nevada corporation, will be held at the offices of Greenberg
Traurig, LLP, 200 Park Avenue, 15th Floor in New York, New York
10166 on February 7, 2005, at 10:00 a.m., in order to:

    (1) approve a management proposal to amend the Amended and
        Restated Articles of Incorporation to change the name of
        the Company from 'Media Services Group, Inc.' to 'MSGI
        Security Solutions, Inc.';

    (2) elect one Class I director for a three-year term or
        until its successor is duly qualified and elected;

    (3) consider a proposal to ratify and approve an amendment
        to the Company's 1999 Stock Option Plan to increase the
        number of shares authorized to be issued from 62,560 to
        562,560 shares;

    (4) consider a proposal to ratify and approve the issuance
        of two stock option grants to acquire an aggregate of
        20,000 shares to persons who became directors of the
        Company during the last fiscal year; and

    (5) transact other business as may properly come before the
        meeting or any adjournments thereof.

The Board of Directors has fixed the close of business on
December 31, 2004, as the record date for the determination of
stockholders entitled to notice of, and to vote at, the Annual
Meeting or any adjournments thereof.

Media Services Group, Inc. (Nasdaq: MSGI) is a proprietary
solutions provider developing a global combination of innovative
emerging businesses that leverage information and technology.
MSGI is currently comprised of two operating companies; Future
Developments America and Innalogic.  The company is principally
focused on the homeland security, public safety and surveillance
industry.  Their corporate headquarters is located in New York,
with regional offices in Washington, DC, and Calgary. The
corporate telephone is: 917-339-7134.  Additional information is
available on the company's Web site: http://www.mediaservices.com/

                          *     *     *

                       Going Concern Doubt

In its Form 10-Q for the quarterly period ended June 30, 2004,
filed with the Securities & Exchange Commission, Media Services'
independent accountants, Amper, Politziner & Mattia P.C., raised
substantial doubt on the company's ability to continue as a going
concern due to its recurring losses from operations and negative
cash flows from operations, in addition to certain contingencies
that may require significant resources.

Effective December 29, 2003, the Company changed its legal name
from MKTG Services, Inc. to Media Services Group, Inc.


MESA GLOBAL: S&P Holds Low-B Ratings on Three Certificate Classes
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on
16 classes from four MESA Global Issuance Co. transactions.

On Dec. 30, 2004, ratings were raised on six classes as shown
below.  The actual and projected credit support percentages
adequately supported the ratings at the time of the upgrades.  The
higher credit support percentages resulted from principal
prepayments and the shifting interest structure of the
transactions.  In addition, total delinquencies and cumulative
realized losses have been relatively moderate, compared to similar
mortgage pools.  As of the December 2004 remittance date, total
delinquencies ranged from 12.4% (series 2002-2) to 36.1%
(series 2002-3).  Additionally, cumulative realized losses were
less than 17% for the different series, ranging from 3.07%
(series 2002-3) to 16.7% (series 2001-4).

Credit support consists of net monthly excess cash flow,
overcollateralization, and subordination.  Additionally, the
senior classes from all of the MESA Global Issuance Co.
transactions benefit from monoline insurance policies from Ambac
Assurance Corp. ('AAA'), except for series 2002-3, which is
covered by MBIA Insurance Corp.  These policies guarantee timely
payments of interest and ultimate payment of principal to the
notes.

The unpaid pool principal balance as a percentage of the original
balance is approximately 20% for series 2001-4, 28.1% for series
2002-1, 28.9% for series 2002-2, and 43.51% for series 2002-3.

The other affirmations (ratings not raised Dec. 30, 2004) reflect
actual and projected credit support percentages that adequately
support the current ratings.  In addition, total delinquencies and
cumulative realized losses were low to moderate.

The certificates and notes evidence interest in a trust fund
consisting primarily of a pool of one- to four-family, fixed- and
adjustable-rate, first- and second-lien mortgage loans, with terms
to maturity of not more than 30 years.  Substantially all of the
mortgage loans have certain deficiencies (document and other) and
have delinquency histories that exceed the scope of the
originator's usual underlying guidelines.  The mortgage loans are
known as scratch-and-dent, document deficient, reperforming loans.

                        Ratings Affirmed

                    MESA Global Issuance Co.
                   Asset-backed Certificates

                               Current     Previous
              Series   Class    Rating      Rating
                                       (as of Dec. 29, 2004)
              ------   -----   -------     --------
              2001-4   M-1      AAA         AA-
              2001-4   M-2      A+          A
              2002-1   M-1      AAA         AA
              2002-2   M-1      AAA         AA
              2002-2   M-2      AA          A
              2002-3   M-1      AA+         AA

                        Ratings Affirmed

                    MESA Global Issuance Co.
                   Asset-backed Certificates

                    Series   Class    Rating
                    ------   -----    ------
                    2001-4   B        BBB
                    2002-1   M-2      A+
                    2002-1   B-1      BBB
                    2002-1   B-2      BB
                    2002-2   B-1      BBB
                    2002-2   B-2      BB
                    2002-3   A, A-IO  AAA
                    2002-3   M-2      A
                    2002-3   B-1      BBB
                    2002-3   B-2      BB


MIRANT CORP: Court Allows Expansion of Charles River's Services
---------------------------------------------------------------
Beginning in July 2003, Charles River Associates rendered services
to Mirant Corporation and its debtor-affiliates as Energy
Consultants.  Charles River provided:

   (a) assistance in the evaluation of the Debtors' business
       prospects;

   (b) assistance in the development of the Debtors' long-term
       business plan;

   (c) analysis of the Debtors' projects and business plan and
       evaluate alternatives;

   (d) strategic advice with regard to energy industry specific
       issues;

   (e) professional opinion in negotiations among the Debtors and
       their suppliers and other interested parties with respect
       to energy-related transactions;

   (f) testimony in the Debtors' Chapter 11 cases concerning any
       of the subjects encompassed by Charles River's energy
       consulting services, if appropriate, and as required;

   (g) assistance and advise to the Debtors concerning the terms,
       conditions and impact of any transaction proposed by
       Charles River; and

   (h) other advisory services as are customarily provided in
       connection with the analysis and negotiation of energy-
       related transactions.

In October 2004, the Debtors asked Charles River to provide
additional services:

   (a) analysis of whether the Debtors' generation assets located
       in the control areas operated by the New York Independent
       System Operator, Inc., ISO New England, Inc., PJM
       Interconnection, LLC, and California Independent System
       Operator Corporation meet the Federal Energy Regulatory
       Commission's standards for charging market-based rates;

   (b) preparation of an affidavit or other testimony to
       accompany the Debtors' Triennial update to the FERC.

The Debtors anticipate that Charles River's fees for the
Additional Services will not exceed $20,000.

At the Debtors' request, Judge Lynn of the U.S. Bankruptcy Court
for the Northern District of Texas expands the scope of Charles
River's representation to include the Additional Services.

The Court authorizes Charles River to draw down on the currently
held retainer as payment of amounts previously approved by the
Mirant Fee Committee.

Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- together with its direct and indirect
subsidiaries, generate, sell and deliver electricity in North
America, the Philippines and the Caribbean.  Mirant Corporation
filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex.
03-46590).  Thomas E. Lauria, Esq., at White & Case LLP,
represents the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
$20,574,000,000 in assets and $11,401,000,000 in debts.  (Mirant
Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


NEP SUPERSHOOTERS: S&P Rates Proposed $75.7 Million Loan at B
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating, with a
recovery rating of '4', to NEP Supershooters LP's proposed
$75.7 million first-lien term loan C, indicating expectations of a
marginal recovery of principal (25%-50%) in the event of default.

At the same time, Standard & Poor's affirmed its 'B' and 'CCC+'
debt ratings on NEP Supershooters and its 'B' corporate credit
rating on parent company NEP, Inc.  These companies are analyzed
on a consolidated basis.  The outlook is stable.

Loan proceeds and a $4.3 million preferred stock investment will
be used to fund the purchase of certain mobile production assets
and contracts from rival National Mobile Television -- NMT -- and
the Outside Broadcast Division (Visions) of The Television
Corporation PLC of the U.K. On a Dec. 31, 2004, pro forma basis,
NEP, a Pittsburgh, Pennsylvania-based provider of outsourced media
services for live and broadcast sports and entertainment events,
had $247.6 million of debt.

"The acquisitions enhance NEP's business lead in mobile TV
production for premium U.S. events and provide a solid competitive
position in the U.K. market," said Standard & Poor's credit
analyst Steve Wilkinson.  However, financial risk is high, with
pro forma debt to EBITDA of 4.5x, up from 4.2x at rating inception
in July 2004.

The corporate credit rating on the parent company reflects its
cash flow concentration in the mobile TV production business, high
tolerance for financial risk, potential volatility stemming from
contract gains and losses, weak results in its more unpredictable
and cyclical Screenworks and Studios units, limited track record
of operating performance as a consolidated entity, and small cash
flow base.  These factors are minimally offset by NEP's
businesses' good competitive positions and decent margins.

The stable outlook incorporates the expectation that the NMT and
Visions asset acquisitions will increase NEP's pro forma EBITDA at
least 40%, that leverage will gradually decline, and that
discretionary cash flow will remain at least break-even.
Shortfalls from these expectations, or a narrowing of NEP's thin
margin of covenant compliance, could lead to a revision in the
outlook to negative.  Long-term potential for a positive outlook
or upgrade would depend on NEP improving profitability,
consistently generating positive discretionary cash flow, and
reducing leverage, while maintaining a strong competitive
position.


NORTH AMERICAN: S&P Places Low-B Ratings on CreditWatch Negative
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on construction services provider North American
Energy Partners Inc. -- NAEP -- to 'B' from 'B+'.  The secured
bank facility rating was lowered to 'B+' from 'BB-' and the senior
unsecured rating to 'B-' from 'B'.  At the same time, the ratings
were placed on CreditWatch with negative implications.  The
company announced that it will need to restate its financial
results for the past two quarters, which will likely result in
breaches to its financial covenants under its secured credit
facility.

"The ratings action reflects our concerns about the company's weak
profitability and its ability to execute in an increasingly
competitive environment, said Standard & Poor's credit analyst
Daniel Parker.  "The ratings will remain on CreditWatch until the
company is able to resolve its bank financing arrangements, and
shore up its liquidity and long-term financing needs," Mr. Parker
added.

The earnings restatement appears to be the result of a delay in
accruing costs related to an unprofitable steam-assisted gravity
drainage site project.  This is the second large project that the
company appears to have underbid.  The ability to properly bid and
win contracts is critical to profitability and Standard & Poor's
expects the competitive environment to become more difficult, as
NAEP's customers (generally, major oil sands producers) are
determined to lower construction costs.  These customers have
increasingly demanded more fixed price- or unit priced-based
contracts, which create margin pressure for construction services
providers such as NAEP, if they are not bid on properly.

The ratings on NAEP reflect the company's very aggressive
financial profile and below-average business profile, which are
partially offset by its leading market position in servicing oil
sands projects.  NAEP provides construction services such as site
preparation, ore removal, piling, and pipeline installation to oil
and gas and natural resource companies.  The business profile
reflects the major risks the company faces, which include delays
or cancellations of oil sands projects, additional competition,
margin pressures as oil sands producers try to lower costs, and
customer concentration risk.  These risks are partially offset by
the company's leading position in providing these services in its
core market in Alberta.


NORTHWEST AIRLINES: Dec. 31 Balance Sheet Upside-Down by $3.1 Bil.
------------------------------------------------------------------
Northwest Airlines Corporation (Nasdaq: NWAC), the parent of
Northwest Airlines, realized a net loss of $420 million or
$4.84 per common share for its fourth quarter, including unusual
items.  This compares to the fourth quarter of 2003 when Northwest
reported net income of $363 million or $3.60 per diluted share,
including unusual items.

Excluding unusual items, Northwest reported a fourth quarter 2004
net loss of $359 million or $4.14 per common share versus the
fourth quarter of 2003 when the airline reported a net loss of
$129 million or $1.49 per common share.

Northwest reported a full-year net loss of $878 million or
$10.16 per common share, including unusual items.  This compares
to net income of $236 million or $2.62 per diluted share,
including unusual items, reported for 2003.  Excluding unusual
items, Northwest reported a full-year net loss of $713 million or
$8.25 per common share.  In 2003, Northwest reported a full-year
net loss of $565 million or $6.57 per common share, excluding
unusual items.

Unusual items in this year's fourth quarter included a
$115 million gain from the sale of Northwest's remaining shares of
Orbitz, $99 million in aircraft impairments associated with the
earlier retirement of certain aircraft and a $77 million increase
in frequent flyer liability, principally associated with revised
estimates relating to the future pattern of mileage redemptions.

In the fourth quarter of 2003, Northwest realized $492 million of
unusual items resulting from the completion of an initial public
offering of Pinnacle Airlines Corp., the sale of Northwest's
holdings in Hotwire, the partial sale of its stock holdings in
Orbitz, the completion of a debt exchange and a transaction
pertaining to Northwest debt secured by foreign real property.

Commenting on the quarter, Doug Steenland, president and chief
executive officer, said, "This was a difficult quarter for
Northwest Airlines.  Stubbornly high fuel costs, revenue pressures
from competitors' pricing actions and labor cost savings realized
by some of our major competitors make it imperative that Northwest
achieve labor restructuring quickly in order to return to
profitability."

"In the fourth quarter, we made noteworthy progress with our labor
cost restructuring by completing pilot and salaried worker wage
and benefit reductions.  In addition, we maintained our revenue
premium and sustained a strong liquidity position, enhanced during
the quarter by the refinancing of our bank credit facility."

Steenland continued, "Once we achieve labor cost restructuring, we
believe Northwest has a strong business strategy for success:
operating excellence, first-class facilities, a truly global
network, and employees who strive to put our customers first."

He added, "We now are in contract mediation with ground workers
represented by the International Association of Machinists and
Aerospace Workers (IAM) and with the Aircraft Mechanics Fraternal
Association (AMFA).  In addition, we are continuing contract
negotiations with representatives of our other unions."

                       Financial Results

Operating revenues in the fourth quarter increased by 6.4% versus
the fourth quarter of 2003 to $2.75 billion.  This included an
increase in passenger revenue of $80 million and an increase in
cargo revenue of $35 million.  Passenger revenue per available
seat mile decreased by 3.0% on 7.4% additional available seat
miles -- ASMs.  The unit revenue decrease was due in part to a
year-over-year decline in unused non-refundable tickets resulting
from a change in re-ticketing rules in 2003.

Operating expenses in the quarter increased 15.4% versus a year
ago to $3.0 billion, excluding unusual items.  Unit costs
excluding fuel and unusual items decreased by 6.1% on 7.4% more
ASMs. During the quarter, fuel averaged 139 cents per gallon, up
68.9% versus the fourth quarter of last year.

Had the fuel prices of fourth quarter 2003 been in place during
the fourth quarter of 2004, Northwest's fuel costs would have been
$252 million lower.  Similarly, had the fuel prices of full-year
2003 been in place during 2004, Northwest's full-year fuel costs
would have been $662 million lower.

Northwest's quarter-ending cash balance was $2.61 billion of which
$2.46 billion was unrestricted.  This compares to $2.68 billion at
the end of the third quarter of which $2.54 billion was
unrestricted.

"During the quarter, we strengthened our liquidity position by
restructuring a $975 million bank credit facility to be repaid
over six years.  Our efforts to maintain one of the industry's
strongest cash balances remains a key element of Northwest's
long-term business strategy," said Bernie Han, executive vice
president and chief financial officer.

                        About the Company

Northwest Airlines is the world's fourth largest airline with hubs
at Detroit, Minneapolis/St. Paul, Memphis, Tokyo, and Amsterdam,
and approximately 1,500 daily departures.  Northwest and its
travel partners serve more than 900 cities in more than 160
countries on six continents.

At Dec. 31, 2004, Northwest Airlines' balance sheet showed a
$3.1 billion stockholders' deficit, compared to a $2 billion
deficit at Dec. 31, 2003.


NOVELIS INC: S&P Assigns B Rating to $1.4B Senior Unsecured Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating to
Novelis Inc.'s US$1.4 billion senior unsecured notes due 2015.  At
the same time, Standard & Poor's withdrew its CP ratings on Alcan
Aluminum Corp., as this entity was transferred to Novelis on
Jan. 6, 2005.  The outlook on Novelis Inc. is stable.

"This notes issue completes the initial debt markets activity
stemming from the spin-off of Novelis from Alcan Inc.," said
Standard & Poor's credit analyst Don Marleau.  "Novelis' leading
position in the global aluminum rolled products market and
extensive geographic and product diversity are constrained by the
company's high debt leverage," Mr. Marleau added.  Standard &
Poor's estimates total debt to EBITDA of 5.0x, based on
US$2.9 billion of total debt and trailing 12-month financial
results at Sept. 30, 2004.

Novelis uses:

   * primary and recycled aluminum to produce can sheet for sale
     to beverage producers and can fabricators;

   * various rolled products for construction, industrial, and
     transportation uses; and

   * foil for packaging.

Novelis' management will be completely independent of Alcan after
the spin-off, although the companies will maintain transition
services agreements for up to 12 months, and will have in place
multiyear metals sales agreements.

The company has a strong competitive position, benefiting from an
unrivaled top-two position in each of the world's major aluminum
consuming regions and product segments. Further offsetting the
risks of an aggressive capital structure are the company's broad
geographic diversity, its position as the world's largest
purchaser of primary aluminum, and the industry's high barriers to
entry.

The outlook is stable.

Novelis' diversity and strong market position, coupled with
generally good demand in its key markets, should ensure that the
company generates financial performance that is consistent for the
ratings in next several years.  The prospect, however, for some
debt reduction appears good, thereby potentially boosting the
company's credit metrics in the medium term.


OWENS CORNING: Banks Present Medical, Legal & Valuation Experts
---------------------------------------------------------------
David A. Hickerson, Esq., at Weil, Gotshal & Manges LLP,
representing Credit Suisse First Boston, as agent for Owens
Corning's prepetition institutional lenders, introduced video
excerpts from Dr. Gary Friedman's deposition into evidence with
Judge Fullam's permission and indulgence.

Dr. Friedman is a medical doctor and has 21 years of experience
with asbestos-related disease research and litigation.  Dr.
Friedman has published a number of peer-reviewed articles and has
reviewed medical records from thousands of patients alleging
exposure to asbestos -- some whose claims are speculative and some
who've died from mesothelioma.  Dr. Friedman is also a certified
B-reader.

Dr. Friedman examined medical records submitted to Owens Corning
from Drs. Raymond A. Harron, Jay T. Segarra, Philip H. Lucas, and
James W. Ballard, in support of asbestos-related personal injury
claims.  Dr. Friedman says he wouldn't rely on those doctors'
x-ray interpretations for any reason and certainly not for the
purpose of paying or settling a personal injury claim.

Dr. Friedman says Dr. Harron finds diffuse interstitial fibrosis
in 95% of the chest x-ray's he reads and he has this remarkable
ability to find that irregularity in all six regions of patients'
lungs.  That leads Dr. Harron to diagnose asbestosis for those
patients.  Dr. Friedman says Dr. Harron's findings are bogus.

Dr. Friedman says that Dr. Ballard appears to confuse fat tissue,
breast tissue and muscle images with diffuse interstitial
fibrosis, leading to false conclusions that most of his patients
suffer from asbestosis.

Dr. Friedman's reviews of the other suspect doctors' x-rays show
similar irregularities.

Dr. Friedman examined a sample of medical records supplied to
document claims against Owens Corning in connection with Dr.
Vasquez's estimation of Owens Corning's asbestos-related future
liability for SEC reporting purposes.  Dr. Friedman explains that
these four doctors' patients' records were flagged because of the
sheer number of cases they handled.

Dr. Friedman reviewed medical records underpinning a number of NSP
Settlement Agreements and found evidence of pulmonary functional
impairment in only 13% of the cases.

Dr. Friedman has studied the literature about asbestos-related
diseases for decades.  Dr. Friedman is convinced that exposures to
asbestos are declining.

Dr. Friedman explains that Owens Corning hired him a number of
years prior to filing for bankruptcy for medical advice.  Dr.
Friedman was involved in establishing the NSP settlement
procedures and training claims processors.  Owens Corning turned
to Dr. Friedman after filing for chapter 11 protection for
guidance about whether to and how to challenge claims in
bankruptcy.  Dr. Friedman says he told Owens Corning he wasn't
sure he was the right person to talk about dealing with claims in
bankruptcy.  A question arose, Dr. Friedman says, about whether
the company needed to separate meritorious from specious claims in
its bankruptcy proceedings because to the extent the company paid
claims of people who weren't sick, that would take money away from
legitimate creditors.

Dr. Friedman believes that 2/3 of the non-malignant claims pending
against Owens Corning do not meet the criteria for payment under
the NSP.  This is based on his:

    (1) actual experience in a clinical setting;

    (2) experience working with other asbestos defendants; and

    (3) extensive reviews of claimants' medical records.

Dr. Friedman admits that he focused on problem cases and those
falling outside the range of what's normal.  He does not purport
to express any opinion on each of the 250,000 claims pending
against Owens Corning.

Dr. Friedman agrees that the medical criteria for impairment under
the NSP is stricter than what's required under guidelines
established by the American Thoracic Society and American Medical
Association.  The NSP criteria disqualifies many cigarette smokers
that might otherwise be compensated in the tort system.  The NSP
required functional impairment, which is not required in the tort
system.

"How do you distinguish between impairment and injury?" Mary Beth
Hogan, Esq., at Debevoise & Plimpton, asked  Dr. Friedman.

Injury, Dr. Friedman explained, is alteration of a body part or
function.  Impairment is the loss of that body part or function.
Disability, Dr. Friedman continued, describes how that loss of use
affects someone's lifestyle.

"Are 1/0 and 0/1 ILO readings frequently confused?" a lawyer asked
Dr. Friedman.

"Yes."

"Are you aware of any other defendant who went to similar lengths
to challenge medical evidence?" another lawyer asked.

"No."

"Are you aware of any other defendant who went to similar lengths
to weed out non-malignant claims?"

"No."

Dr. Friedman says that while he doesn't know the total economic
impact, he does know that his work supplied Owens Corning with the
facts and ammunition necessary to renegotiate some settlement
agreements for lower dollar amounts.

Ms. Hogan asked Dr. Friedman if he knew why Owens Corning sent
certain medical records to him.

"No," Dr. Friedman said, adding that he suspected it was because
something caused the company to doubt the veracity of the
underlying claim.

Ms. Hogan asked Dr. Friedman if he knew how many claims were in
the NSP system.

Dr. Friedman said that he recalls a number like 215,000, because
he remembers thinking during initial discussions that he thought
the number was overwhelming.

Ms. Hogan asked Dr. Friedman if he knows how unimpaired claimants
fared in the tort system.

"No," Dr. Friedman said, but recalled hearing about some large
multi-million dollar settlements that grouped impaired and
unimpaired claimants.

"Do you know what an unimpaired claimant was paid under the NSP?"
Ms. Hogan asked.

"$1,000," Dr. Friedman responded.

                     Banks' Legal Expert
                    Prof. Lester Brickman

Mr. Hickerson called Professor Lester Brickman to the witness
stand.

Prof. Brickman testified that he's had a long-standing research
interest in asbestos litigation.  In 1991, on the basis of
knowledge and expertise that he'd acquired on the subject, he was
requested by the Administrative Conference of the United States,
an executive branch agency of the federal government, to draft a
proposed administrative alternative to asbestos litigation and to
organize a colloquy to consider and debate that proposal.  The
Chairman of the Administrative Conference said:

     [W]e asked Professor Lester Brickman to prepare a paper
     proposing an administrative claims solution for comment and
     criticism by the panel, and we look forward to comments by
     the audience.  Let me introduce Professor Brickman, who
     teaches law at Cardozo Law School, Yeshiva University.  He is
     a leading authority in the area of attorney's fees and has
     written numerous articles on the subject.  Professor Brickman
     became interested in the subject of asbestos litigation some
     years ago when he was hired as a consultant by one of the
     defendants in the asbestos litigation to review contingent
     fee issues.  He has since had the opportunity to extensively
     review empirical data, case files, and other materials on
     the subject.  Because of his work in this area, we asked
     Professor Brickman to draft a proposed administrative
     solution which our panelists have been invited to criticize.

Over the past fourteen years, Prof. Brickman has devoted a
substantial amount of time to research on asbestos litigation and
has published four articles on the subject:

     (1) The Asbestos Litigation Crisis: Is There A Need For An
         Administrative Alternative?, 13 Cardozo L. Rev. 1819
         (1992);

     (2) The Asbestos Claims Management Act of 1991: A Proposal
         To The United States Congress, 13 Cardozo L. Rev. 1891
         (1992);

     (3) Lawyers' Ethics And Fiduciary Obligation In The Brave
         New World Of Aggregative Litigation, 26 Wm. & Mary
         Envtl. L. & Pol'y Rev. 243, 272-98 (2001); and

     (4) On The Theory Class's Theories of Asbestos Litigation:
         The Disconnect Between Scholarship and Reality, 31 Pepp.
         L. Rev. 33 (2004).

"In these articles," Prof. Brickman explains, "I discuss the
nature of asbestos-related disease; the history of asbestos
litigation, including the phenomenon of the unimpaired claimant;
the role of attorney-sponsored screenings; the effective hourly
rates generated by contingent fee-financing of the litigation and
the effect of those fees on the litigation; the use and effects of
forum selection; the impact of mass consolidations; and the
culmination of the litigation in the bankruptcy of many former
producers and sellers of asbestos-containing products and the
administration of that bankruptcy process."

Prof. Brickman says he has a fifth paper in the works, examining
ethical issues in asbestos litigation.

"Finally, Prof. Brickman says, "my qualifications as an expert on
asbestos litigation, attorney-sponsored screenings, the formation
and structure of asbestos bankruptcy trusts and the 'trust
distribution procedures' adopted by extant trusts as well as those
proposed in pending bankruptcies, were confirmed after being
challenged in a recent asbestos bankruptcy proceeding," referring
to In re Western Asbestos Co. et al., Debtors, 2003 Bankr. LEXIS
1894 at *3 (Oct. 31, 2003).

Mr. Hickerson proffered Prof. Brickman as an expert witness on
American law, tort reform and other matters.

Michael Lynn, Esq., at Kaye Scholer LLP, representing the Future
Claimants' Representative, objected.  The Court is the only expert
on American law, Mr. Lynn argued.  Additionally, in Nov. 2003, a
bankruptcy court ruled that Prof. Brickman could not testify as an
expert.

Judge Fullam agreed that only the Court is an expert on American
law but overruled Mr. Lynn's other objections.

Prof. Brickman is critical of the asbestos litigation industry.

"As the cost of the litigation to business and insurers has
galloped to new heights," Prof. Brickman says, "the disconnect
between medical science and our tort and bankruptcy systems
becomes more extreme."  The press has widely reported that many of
the claimants have no lung impairment.  This is true but
misleading.  In fact, 80-90% of asbestos claimants have no
asbestos-related illness recognized by medical science.

To understand the massive disconnect between medical science and
tort litigation, Prof. Brickman undertook an extensive empirical
study of asbestos litigation.  On the basis of that study --
available at http://www.ssrn.com/asbstract=490682-- Prof.
Brickman reached these conclusions:

   -- Approximately 90% of asbestos claims today largely consists
      of former industrial and construction workers and others:

      (a) recruited by an extensive network of entrepreneurial
          companies which are employed by lawyers to "screen"
          hundreds of thousands of potential litigants each year
          at local union halls, hotel and motel rooms, shopping
          center parking lots, and other locations throughout the
          country to assemble the "inventory" that fuels the
          litigation;

      (b) asserting claims of injury though they have no
          medically cognizable asbestos -related injury and
          cannot demonstrate any statistically significant
          increased likelihood of contracting an asbestos-related
          disease in the future;

      (c) these claims are being asserted in a civil justice
          system that has been drastically altered to accommodate
          the interests of these litigants and their lawyers by
          dispensing with many evidentiary requirements and proof
          of proximate cause, giving rise to what he terms
          "special asbestos law";

      (d) mostly in so-called "magic jurisdictions" where judges
          and juries not only appear aligned with the interests
          of plaintiff lawyers but where the outcomes of such
          litigations are known before the cases are filed;

      (e) these claims are often supported by specious medical
          evidence, including:

             * evidence generated by the entrepreneurial
               screening enterprises and B-readers-specially
               certified x-ray readers that the plaintiff lawyers
               select, who receive millions of dollars a year in
               income for producing bogus medical evidence which
               is not a product of good faith medical judgment,
               and

             * pulmonary functions tests which are often
               administered in knowing violation of standards
               established by the American Thoracic Society and
               result in findings of impairment which would not
               be found if the tests were properly administered;
               and

      (f) these claimants frequently testify according to scripts
          prepared by their lawyers which are replete with
          misstatements with regard to:

             * identification and relative quantities of
               asbestos-containing products that they came in
               contact with at work sites,

             * the information printed on the containers in which
               the products were sold, and

             * their own physical impairments.

          As former targets of the litigation enter bankruptcy
          and replacement deep pockets are cultivated, witness
          testimony about products in workplaces 30-40 years ago
          simply shifts to accommodate such changes-compelling
          circumstantial confirmation that the testimony is
          orchestrated by plaintiff lawyers.

   -- It is beyond cavil that asbestos litigation thus represents
      a massive civil justice system failure.  Prof. Brickman
      refers to the litigation as a "malignant enterprise."

   -- An increasing amount of asbestos claiming is now being
      channeled through the bankruptcy process where the
      proceedings are largely insulated from public view.  The
      issues are complex and newspaper coverage fails to inform
      the public of what is occurring which, in plainest terms,
      amounts to a perversion of legal process.  The leading
      plaintiff law firms, a baker's dozen or so, completely
      control the bankruptcy proceedings.  Laden with boundless
      conflicts of interest which are ignored by the courts,
      they create the bankruptcy plans, establish the criteria
      for the payment of the very claims which they are asserting,
      select the trustees to operate the trusts that will be
      created to actually pay the claims (with the approval of the
      bankruptcy court which virtually always is forthcoming) and
      constitute the Trust Advisory Committees which have veto
      power over changes in the Trusts' structure.  The TDPs
      (Trust Distribution Procedures) they create allow these
      lawyers to treat the trusts' funds as "piggy banks,"
      accessible at will irrespective of whether a claimant is
      actually injured or had actual exposure to defendants'
      products, let alone whether the exposure was a substantial
      factor causing injury.  In fact, in some cases, all that is
      required to "prove" the requisite exposure is for the
      claimant to sign a form saying he was exposed.

   -- The bankruptcy trusts are being created as a result of the
      enactment by Congress in 1994 of a special set of bankruptcy
      provisions designed to facilitate the reorganization of
      firms with asbestos liabilities (11 U.S.C. Sec. 524 (g)).
      Under these provisions, the asbestos claims against an
      insolvent debtor are channeled to a "trust" which is funded
      by equity provided by the debtor and increasingly, by the
      debtor's insurance coverage.  For the trust to be
      established and thus insulate the debtor from future
      liability, 75% of claimants must vote to approve the plan.
      Because this vote is on the basis of "one man, one vote," it
      gives plaintiff attorneys an additional incentive to troll
      for more "un-sick" claimants to add to their inventories;
      doing so gives them control over the bankruptcy process,
      including assuring substantial cash flows to them at the
      expense of the 5-10% of claimants who have actually suffered
      injury.  This control has led to the "pre-packaged
      bankruptcy" -- which, in its current form, is a further
      perversion of legal process.

Prof. Brickman believes that mass consolidation of cases increases
the settlement values of non-malignant claims at the expense of
the malignant claimants.

Judge Fullam cut Prof. Brickman and Mr. Hickerson off saying that
all of this testimony is already in the record.

Nobody cross-examined Prof. Brickman.

          Banks' Asbestos Liability Valuation Expert
                     Dr. Frederick Dunbar

Ralph I. Miller, Esq., at Weil, Gotshal & Manges LLP, representing
the Banks, called Dr. Fredrick C. Dunbar, Senior Vice President
for National Economic Research Associates, to the witness stand to
provide valuation testimony.

Dr. Dunbar's expert opinion is that Owens Corning's liability on
account of allowable present and future claims (including contract
claims) is $2.046 billion.  Dr. Dunbar uses Dr. Vasquez's data set
as his starting point, uses a 2.17% inflation factor (based on the
yield of CPI-index TIPS issued by the Treasury Department) and
applies an 8.12% discount rate (which assumes Owens Corning was a
good single-A credit prior to its chapter 11 filing).

Focusing on Owens Corning's asbestos-related liability, Dr. Dunbar
stepped Judge Fullam through a reconciliation of his estimate to
Dr. Peterson's estimate to pinpoint the differences in their
assumptions and methodologies:

Start with Dr. Dunbar's Forecast                  $2,046,000,000
                                                  --------------
Step 1: Government Statistics

Step 1.1: Substitute KPMG mesothelioma
          incidence                                  142,000,000

Step 1.2: Substitute Nicholson incidence
          for all cancers                            129,000,000

Step 2: Latency

Step 2.1: Estimate non-malignant claims as
          ratio of cancer claims                      24,000,000

Step 3: Propensity to Sue

Step 3.1: Remove age adjustment in propensity
          to sue                                     151,000,000

Step 3.2: Eliminate surge adjustment in
          claims data                                904,000,000

Step 4: Dismissal Rates

Step 4.1: Take Maritime Asbestos Legal Clinic
          and Taylor & Cire (administratively
          dismissed) claims out of dismissal
          rates                                      301,000,000

Step 4.2: No dismissal rate adjustment               626,000,000

Step 5: Proof of Injury

Step 5.1: Remove audit adjustment to lung and
          other cancer claims                         97,000,000

Step 5.2: Remove audit adjustment to
          non-malignant claims                       739,000,000

Step 6: Average Values

Step 6.1: Include punitive component of
          settlement values                        1,088,000,000

Step 6.2: Remove age adjustment to settlement
          values                                     396,000,000

Step 6.3: Include verdicts in average claim
          values                                     203,000,000

Step 6.4: Pay claims with Forced Vital Capacity
          greater than or equal to 80%             1,862,000,000

Step 7: Inflation and Discounting

Step 7.1: Use risk-free discount rate and
          2.5% inflation rate                      2,232,000,000

Step 7.2: Adopt Dr. Peterson's pending claim
          count                                      127,000,000
                                                 ---------------
End with Dr. Peterson's Forecast                 $11,068,000,000
                                                 ===============

Again, focusing only on Owens Corning's asbestos-related
liability, Dr. Dunbar stepped Judge Fullam through a
reconciliation of his estimate to Dr. Vasquez's estimate to
pinpoint the differences in their assumptions and methodologies:

Start with Dr. Dunbar's Forecast                  $2,046,000,000
                                                  --------------
Step 1: Government Statistics

Step 1.1: Substitute KPMG cancer incidence           126,000,000

Step 2: Latency

Step 2.1: Estimate non-malignant claims as
          ratio of cancer claims                      65,000,000

Step 3: Propensity to Sue

Step 3.1: Substitute Vasquez age and surge
          adjusted propensity to sue                 212,000,000

Step 4: Dismissal Rates

Step 4.1: Substitute Vasquez dismissal rates
          from NSP Period                            695,000,000

Step 5: Proof of Injury

Step 5.1: Remove audit adjustment to lung and
          other cancer claims                         74,000,000

Step 5.2: Remove audit adjustment to
          non-malignant claims                       346,000,000

Step 6: Average Values

Step 6,1: Substitute Vasquez punitive adjustment     220,000,000

Step 6.2: Adopt other Vasquez value adjustments,
          including for age                         (417,000,000)

Step 6.3: Pay claims with Forced Vital Capacity
          greater than or equal to 80%               922,000,000

Step 7: Inflation and Discounting

Step 7.1: Use risk-free discount rate and
          2.0% inflation rate                        483,000,000

Step 7.2: Adopt Dr. Mayer's pending claim count       64,000,000
                                                  --------------
End with Dr. Vasquez's Forecast                   $4,624,000,000
                                                  ==============

Dr. Dunbar did not attempt to reconcile his forecast to Dr.
Rabinovitz's forecast.  The main differences are that she predicts
a surge in the propensity to sue by using the two-year 1999-2000
period rather than a longer five-year period and by starting with
Dr. Vasquez's data set.

"Reasonable people can differ," Dr. Dunbar said, telling Judge
Fullam that after receiving and reading his colleagues' reports,
he made some adjustments to his forecast to account for the
reasonable differences.  Dr. Dunbar stressed that this alternative
forecast is not what he's convinced is right, but what he believes
could be considered reasonable.

Start with Dr. Dunbar's Forecast                  $2,046,000,000
                                                  --------------
Step 1: Government Statistics

Step 1.1: Substitute KPMG cancer incidence           155,000,000

Step 2: Latency

Step 2.1: Estimate non-malignant claims as
          ratio of cancer claims                      39,000,000

Step 3: Propensity to Sue -- No change                         0

Step 4: Dismissal Rates

Step 4.1: Substitute Dr. Vasquez's Maritime
          Asbestos Legal Center dismissal rates      176,000,000

Step 5: Proof of Injury

Step 5.1: Remove audit adjustment to lung and
          other cancer claims                         57,000,000

Step 6: Average Values

Step 6.1: Substitute Dr. Vasquez's punitive
          damage adjustment                          230,000,000

Step 6.2: Pay claims with Forced Vital Capacity
          greater than or equal to 80% $1,000         68,000,000

Step 7: Inflation and Discounting

Step 7.1: Use risk-free rate of 6%                   380,000,000
                                                  --------------
Dr. Dunbar's Alternative Forecast                 $3,151,000,000
                                                  ==============

Dr. Dunbar assumes that any claimant with a Forced Vital Capacity
greater than 80% is unimpaired, does not hold an allowable claim,
and is entitled to no compensation.

"Do you know of any state, Dr. Dunbar, that permits recovery by a
plaintiff that has no proof?" Mr. Miller asked.

"We will stipulate that a claimant with no proof is not entitled
to compensation," Roger Podesta, Esq., at Debevoise & Plimpton,
representing the Debtors, interjected.

"I'll accept that stipulation," Judge Fullam said.

Dr. Dunbar believes that asbestos claims have peaked because the
epidemiological data shows exposure incidence has declined.  Dr.
Dunbar has seen that SEC-reported reserves for asbestos-related
liability are declining relative to 2001 and 2002.

"You're confident SEC filings never underestimate liability?"
Judge Fullam asked.

"The liability may be understated, but numbers of claims are
probably correct," Dr. Dunbar responded.

Mr. Miller asked Dr. Dunbar if he relied on the estimates of
Armstrong's and Babcock & Wilcox's asbestos liability referred to
in those company's confirmation orders.

"I didn't," Dr. Dunbar said, "because there were no competing
valuations in those two bankruptcy cases."

"The Court only heard from one side?" Judge Fullam asked.

"There were objectors, but nobody presented the court with
valuations of those debtors' asbestos liabilities that competed
with Dr. Peterson's valuations."

"Your estimates of Armstrong's and Babcock & Wilcox's asbestos
liability would have been smaller?" Judge Fullam queried.

"Yes," Dr. Dunbar replied.

On cross-examination, Mr. Podesta asked Dr. Dunbar for
clarification about his dismissal rates.  "There are 128,000 open
claims in Owens Corning's database today, correct?"

"Yes."

"And you propose to eliminate 114,000 of those?"

"Yes."

"You propose to make 90% of the present claims disappear?"

"Have you ever thought of becoming a defense attorney?" Mr.
Podesta said before Dr. Dunbar could answer.

"And Dr. Vasquez's estimate of the number of future claims is 10
times your estimate?"

"Yes," Dr. Dunbar confirmed.

"Has your claims estimation model been published in a peer-
reviewed journal?"

"No."

"Has it been applied in any other bankruptcy case?"

"No."

"Your unpublished, unreviewed model is being testing in litigation
for the first time in this case?"

"Yes."

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


OWENS CORNING: CSFB Wants to Sue Doctors for False X-Ray Readings
-----------------------------------------------------------------
Credit Suisse First Boston, as Agent for the prepetition
institutional lenders to Owens Corning and certain of its
affiliates, asserts claims for fraud and negligent
misrepresentation against physicians who falsely reported chest
radiograph (x-ray) readings as positive for asbestos-related
disease when, in fact, the readings showed no compensable injury.
These physicians, include:

   (1) Raymond A. Harron;

   (2) Jay T. Segarra;

   (3) Philip H. Lucas;

   (4) James W. Ballard; and

   (5) 100 John Doe physicians.

Rebecca S. Butcher, Esq., at Landis Rath & Cobb, LLP, in
Wilmington, Delaware, relates that the false reports resulted in
Owens Corning paying $2.5 billion to "settle" asbestos-related
personal injury claims against the company that had no medical
basis and should never have been filed.  Recent scientific studies
of Drs. Guy K. Friedman and Joseph N. Gitlin indicate that the
individual physicians have accounted for a dramatically
disproportionate number of asbestos personal injury claims filed
against the Debtors and have routinely and systematically over
diagnosed non-malignant asbestos-related physical impairment in
support of the claims.

According to Ms. Butcher, medical research has described
asbestosis as a disappearing disease, and many pulmonology
practices see no cases of the disease.  The phenomenon is
generally believed to arise from the fact that asbestos exposure
has decreased dramatically since the passage of the Occupational
Safety and Health Act (OSHA) in 1970.  Notwithstanding the
decrease, the number of non-malignant asbestos-related personal
injury claims grew exponentially in the 1990s.  It is estimated
that up to 90% of new asbestos claims are filed by individuals
with little or no impairment, and that payments for non-malignant
claims account for 64% of the compensation paid to asbestos
plaintiffs.  Consistent with these broader trends, the vast
majority of the asbestos personal injury claims filed against
Owens Corning prior to its Chapter 11 filing was from claimants
with alleged asbestos-related impairment that was non-malignant.

Pulmonary x-rays are the principal medical diagnostic tool for
identifying and documenting non-malignant asbestos-related disease
for purposes of substantiating the existence of an asbestos
personal injury claim and determining the amount for which a claim
is settled, whether under the National Settlement Program, or
independently of the NSP.  A "positive" classification of an x-ray
sufficient for compensation by an asbestos defendant usually means
noting a parenchymal abnormality and indicating a small opacity
profusion category of 1/0 or higher, according to standards
promulgated by the International Labour Organization for reading
and scoring x-rays for asbestos-related injury.

               "You May Have Million Dollar Lungs"

Ms. Butcher tells the U.S. Bankruptcy Court for the District of
Delaware that "Screening" companies encourage workers to have free
chest x-rays performed, even if they have no symptoms of any
pulmonary impairment.  These companies actively solicit
asymptomatic workers, who may have been occupationally exposed to
asbestos, touting: "You May Have Million Dollar Lungs."

"The screenings are usually done in mobile vans parked near union
halls or in hotel parking lots.  These screening companies were
set up by individuals generally lacking medical experience to
create a mechanism for screening hundreds of thousands of workers
who could claim to have been exposed to asbestos in the workplace.
Screening companies have reportedly processed over one million
workers, and account for the overwhelming majority of
non-malignant claims filed to date," Ms. Butcher says.

                      Who Are the B-readers?

"B-readers" are so-called because they must pass part "B" of a
test on x-ray interpretation.  They are physicians specially
trained and certified to read and score pulmonary x-rays taken of
workers alleged to have been exposed to asbestos.  To obtain the
B-reader credential, physicians must undergo certification by the
National Institute of Occupational Safety and Health, a division
of the Centers for Disease Control.

Between 1994 and 1999, there were 600 certified "B-readers" in the
United States.  Of this pool of B-readers, however, only a handful
were routinely consulted and asked by plaintiffs' lawyers to read
and score pulmonary x-rays for purposes of providing medical
documentation of asbestos-related disease.  These B-readers
developed reputations for systematically interpreting chest x-rays
of asbestos claimants as positive for asbestos-related disease in
90-100% of all cases.

According to Ms. Butcher, the B-readers examine the x-rays after
the fact, away from the patient and the testing site, and may not
even be licensed to practice medicine in the state where the
x-rays were taken.  Some x-ray readers spend only minutes in
making their findings and are paid hundreds of thousands of
dollars in the aggregate for reading mass quantities of chest x-
rays.  CSFB believes that some claimants' x-rays are "shopped
around" to a number of B-readers until one is found who will
report a positive reading for asbestos-related injury sufficient
to sustain a claim for compensation.

Rates of "positive" findings by these doctors have been as high as
90% according to some studies, Ms. Butcher says.  An audit of
non-malignancy claims conducted by the Manville Personal Injury
Trust, one of the largest asbestos claims processors, has shown
that certain B-readers whose findings served as the basis for
thousands of claims failed independent review more than 50% of the
time.  Given these findings, the Manville Trust now refuses to pay
claims based on medical evidence from certain laboratories and by
physicians whose diagnostic record appeared medically unsound.

When B-readers interpret x-rays for asbestos-related disease, they
know they are doing so for purposes of providing "independent" and
professional medical documentation necessary to substantiate an
asbestos personal injury claim that will be filed against an
asbestos defendant, they know the cut off of 1/0 in the ILO system
that generally qualifies for compensation from an asbestos
defendant, and they frequently receive payment for their services
depending on the results of the reading they provide, with greater
compensation if they report that an x-ray exhibits positive
indications of asbestos-related injury than if they report it does
not.

The Friedman and Gitlin reports independently audited samples of
B-reader x-ray reports and revealed that the incidence of
asbestos-related nonmalignant impairment reported by the
physicians is totally inconsistent with available peer review
literature and is medically and scientifically incredible.

                     No Fuss for the Debtors

On December 20, 2004, CSFB wrote to Owens Corning explaining the
apparent wrongdoing by the B-readers and demanded that the Debtors
initiate their own suit.  The letter informed Owens Corning of
CSFB's intention to file a motion to sue the B-readers, if it did
not receive a response by January 3, 2005.  Owens Corning,
according to Ms. Butcher, has proven unwilling to prosecute the
proposed suit, prompting CSFB to file its request.

Ms. Butcher asserts that CSFB has derivative standing to commence
an adversary proceeding against the B-readers because:

   (a) there is a colorable claim in favor of the estate, which
       is not being pursued; and

   (b) in respect of which, CSFB is willing to take the risk of
       funding the proceeding.

Since there is no cognizable rationale for not allowing the
potential benefit to the estate to be prosecuted, CSFB seeks the
Bankruptcy Court's authority to initiate an adversary proceeding
against the B-readers to pursue the estates' claims and causes of
action.

At the same time, CSFB asks Judge Fullam to withdraw the reference
to the Bankruptcy Court and have this matter dealt with by the
District Court.  In accordance with the requirements of Rule 5011-
1 of the Local Rules of Bankruptcy Practice and Procedure of the
United States Bankruptcy Court for the District of Delaware, CSFB
asks Judge Fitzgerald to determine that the proceeding to be
withdrawn involves both "core" and "non-core" issues.

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


OWENS CORNING: Third Circuit to Hear Banks' Appeal on Feb. 7
------------------------------------------------------------
As reported in the Troubled Company Reporter on Oct. 19, 2004,
Credit Suisse First Boston, as Agent for a consortium of
prepetition bank lenders to Owens Corning and certain of its
affiliates, delivered Notices of Appeal to the U.S. Bankruptcy
Court and U.S. District Court for the District of Delaware
indicating its intent to take an appeal from Senior U.S. District
Judge John P. Fullam's Order dated Oct. 5, 2004, directing
substantive consolidation of Owens Corning's estates, to the
United States Court of Appeals for the Third Circuit.

Credit Suisse wants the Third Circuit to overturn Judge Fullam's
order authorizing substantive consolidation now.  The Plan
Proponents want the Third Circuit to defer any ruling until a
confirmation order for a plan of reorganization providing for
substantive consolidation is entered.  If, however, the Appellate
Court is inclined to review Judge Fullam's interlocutory ruling,
the Plan Proponents ask the Court to uphold the ruling.

                        Hearing Schedule

The Third Circuit will hear oral argument in this matter on
February 7, 2005.

As previously reported in the Troubled Company Reporter, Judge
Fullam delivered a non-fatal blow to the holders of Owens
Corning's bank debt when he released his decision that the
Debtors' estates should be substantively consolidated, meaning all
rolled into one.  The effect of that substantive consolidation
would be to effectively eliminate any structural priority the
banks obtained when they lent money to Owens Corning subsidiaries
and obtained guarantees from other Owens Corning entities.  The
Banks say that treating them pari passu with Owens Corning's other
unsecured creditors deprives them of nearly $1 billion in value.

A copy of Judge Fullam's 8-page ruling is available at no charge
at:

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

Judge Fullam found a substantial identity between Owens Corning
entities.  Judge Fullam said it was impossible for the Banks to
have relied on the separate creditworthiness of any one borrower.
The cross-guarantees, Judge Fullam reasoned, also militated in
favor of substantive consolidation.

Judge Fullam made it clear that though substantive consolidation
is justified, this does not mean that the Banks must be treated
pari passu with all other unsecured claims.  Judge Fullam suggests
there may be a middle-of-the-road approach to treating the Banks
claims in the context of a consensual chapter 11 plan.

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


PACKAGING CORP: Earns $38 Million Net Income in Fourth Quarter
--------------------------------------------------------------
Packaging Corporation of America (NYSE:PKG) reported fourth
quarter earnings of $38 million, compared to breakeven fourth
quarter 2003 earnings.  Fourth quarter 2004 earnings include
income of $17 million from a dividend paid to PCA by Southern
Timber Venture, a timberlands joint venture in which PCA's holds a
31% ownership interest.  Fourth quarter 2003 earnings included a
one-time after tax charge of $10 million, to settle certain
benefits-related matters with Pactiv Corporation dating back to
April 12, 1999.  Net sales for the fourth quarter were
$493 million compared to $431 million in 2003.

PCA intends to increase its quarterly cash dividend on its common
stock from $0.15 per share to $0.25 per share, or $1.00 per share
annually.  The first quarterly dividend of $0.25 per share will be
paid to shareholders of record as of March 15, 2005 with a payment
date of April 15, 2005.

Full year net income for 2004 was $69 million, or $0.64 per share,
compared to a loss of $14 million, or $0.14 per share, in 2003.
Full year 2004 earnings include a decrease of $2 million, or
$0.02 per share, to PCA's previously reported results for the nine
months ended September 30, 2004, as a result of an understatement
of the intercompany profit reserve for products held in inventory.
As shown in the attached table, adjusted net income, which
excludes special items, was $52 million, or $0.48 per share, in
2004 compared to $42 million, or $0.40 per share, in 2003.  Full
year sales were $1.9 billion compared to $1.7 billion in 2003.

Higher prices and volume for both containerboard and corrugated
products improved earnings by $0.25 per share compared to the
fourth quarter of 2003.  This increase was partially offset by
higher wood, recycled fiber, energy, transportation, labor and
benefits costs, which together totaled about $0.13 per share.
Higher earnings for the full year, compared to 2003, were driven
by higher prices and volume and lower interest expense, which were
partially offset by the same costs that affected the 2004 fourth
quarter.

The large dividend from Southern Timber Venture was the result of
the sale of a portion of its timberlands in Mississippi and
Alabama.  In the fourth quarter, PCA increased cash-on-hand by
$94 million.  At year-end, cash-on-hand and long-term debt were
$213 million and $695 million, respectively.

Paul T. Stecko, Chairman and CEO of PCA, said, "We had a very
strong fourth quarter, with our corrugated products volume per
workday up 6.7% over last year's record fourth quarter volume.
Our mills continued to run extremely well, which was important in
light of our very strong corrugated products demand.  Pricing
continued to improve over the third quarter but was offset by
higher wood, energy and transportation costs."

Commenting on the dividend increase, Mr. Stecko said, "Since
initiating dividend payments in January 2004, PCA has continued to
improve its business and financial strength.  The increase in our
annual dividend rate from $0.60 per share to $1.00 per share
reflects PCA's strong commitment to provide value to our
shareholders."

"As is normally our practice," Mr. Stecko continued, "we will be
taking our annual mill maintenance outages at our Counce and
Valdosta linerboard mills during the first quarter.  These outages
will result in higher operating costs and less production,
negatively impacting earnings.  We also expect to see seasonally
higher energy and wood costs.  Considering all of these items, we
currently expect first quarter earnings of about $0.12 per share."

                        About the Company

Packaging Corporation of America (NYSE:PKG) is the sixth largest
producer of containerboard and corrugated packaging products in
the United States with sales of $1.9 billion in 2004.  PCA
operates four paper mills and 66 corrugated product plants in 26
states across the country.

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 20, 2004,
Moody's Investors Service affirmed Packaging Corporation of
America's senior implied, issuer and senior unsecured ratings at
Ba1.  The outlook remains unchanged and is stable.

Ratings Affirmed:

   * Outlook: Stable
   * Senior Implied: Ba1
   * Senior Unsecured Bank Facility: Ba1
   * Senior Unsecured: Ba1
   * Issuer Rating: Ba1

Packaging Corporation's Ba1 senior implied rating is supported by
its good track record of profitability, debt reduction and
historically strong credit protection metrics.  Packaging
Corporation has consistently been one of North America's lowest
cost containerboard produces.  This results from a good energy
supply mix with relatively moderate exposure to fossil fuels, good
fiber mix with little exposure to recycled inputs, good forward
integration into converting operations and good backwards
integration into pulp.  The ratings also reflect, however,
Packaging Corporation's high concentration in containerboard, a
commodity with relatively volatile pricing.  Accordingly, small
changes in pricing result in large changes in earnings, cash
generation, and debt protection measurements.  Expectations are
for relatively strong commodity pricing over the next several
quarters.  However, the over-hang of excess capacity together with
macroeconomic risks to the U.S. economy may limit the magnitude
and duration of commodity price appreciation and margin expansion.
This concern is exacerbated by the ongoing displacement of North
American manufacturing activity by Asian and other foreign
competitors that potentially reduces the size of Packaging
Corporation's effective market. Along with systemic supply/demand
issues, Packaging Corporation and other containerboard
manufacturers are vulnerable to continued margin pressure from
input costs from increasing fiber, chemicals and energy prices.
Owing to these factors and, as well, increased benefits expenses,
Packaging Corporation's cost advantage relative to other
containerboard manufacturers has been significantly eroded in
recent quarters.  As a relatively modest company that has already
monetized the majority of its timberland assets, Packaging
Corporation does not have the same degree of operational and
financial flexibility to further reconfigure its operations that a
more substantial company would have.  The ratings are also
constrained by the significant (40%) ownership position of Madison
Dearborn Partners -- MDP.


PARMALAT USA: Will Reject Derle Supply Agreement After Transition
-----------------------------------------------------------------
Derle Farms, Inc., and its wholly owned subsidiary Kingsland
Dairies, Inc., asked the U.S. Bankruptcy Court for the Southern
District of New York to compel Farmland Dairies, LLC, and Parmalat
USA Corporation to assume or reject immediately a supply agreement
dated January 1, 1999, as amended on June 2, 2003.

Mark N. Parry, Esq., at Moses & Singer, LLP, in New York, informs
the Court that Derle distributes, sells and markets milk and dairy
products to customers principally situated in New York City.
Derle must deliver fresh products to its customers on a continuous
basis.

             Farmland Will Reject Derle Supply Agreement

Farmland Dairies, L.L.C., states that the Supply Agreement with
Derle Farms, Inc., includes a number of provisions that render it
burdensome to Farmland.  Accordingly, Farmland will reject the
Supply Agreement.

                        Transition Period

After Farmland Dairies, LLC, and Parmalat USA Corp. consented to
the immediate rejection of the Supply Agreement, Derle Farms,
Inc., sought a 60-day transition period.

The parties stipulate that:

   (a) Parmalat USA will reject the Supply Agreement.

   (b) From December 17, 2004, through and including the Rejection
       Date -- the Transition Period -- Farmland will continue to
       provide Co-Packing Services and otherwise perform in
       accordance with the terms and conditions of the Supply
       Agreement, except as otherwise expressly modified:

          (i) Purchase and Sale of Products

              Farmland may provide Derle with products out of its
              facility in Wallington, New Jersey, provided that
              Farmland will continue to load all those products
              onto Derle's or its designees' trucks at Farmland's
              Sunnydale plant in Brooklyn, New York.  Should
              Farmland determine to load all products from its
              Wallington Facility, Derle will have the right to
              discontinue taking product from Farmland on five-
              days' notice via facsimile, and the Supply
              Agreement will be deemed to have been rejected by
              Farmland as of that date -- the Termination Date.

         (ii) Labeling

              Farmland agrees to provide products under Derle's
              private label, provided, however, that on the
              Rejection Date, Derle will purchase any and all
              outstanding Derle labels in Farmland's possession
              at Farmland's actual out-of-pocket expense.

   (c) Derle will pay the current outstanding receivable due and
       owing to Farmland for $2,707,087 by the dates and in the
       amounts set forth on the schedule of payments.  In
       addition to the scheduled payments, Derle will pay
       Farmland for all Co-Packing Services provided during the
       Transition Period in the ordinary course of business as
       set forth in the Supply Agreement.

   (d) To secure its obligations under the Supply Agreement,
       Derle will grant Farmland a continuing first priority
       security interest in its present and future accounts
       receivable and all obligations for the payment of money
       arising out of its sale of goods or rendition of
       services, subject, however, to any validly existing
       perfected liens.  Upon full payment of all payments other
       than that pertaining to certain disputed charges totaling
       $87,506, which the parties will make a good faith effort
       to resolve, at Derle's request and expense, Farmland will
       deliver a termination statement on Form UCC-3 to evidence
       the release and termination of Farmland's liens.

   (e) In the event that Derle defaults in any of the Scheduled
       Payments or unreasonably withholds payment in connection
       with any of the Ordinary Course Payments, and that default
       continues for a period of five days after notifying Derle,
       in addition to all rights and remedies Farmland may have
       as a secured party pursuant to applicable law, including
       the possession or disposition of the collateral, the full
       outstanding amount of all payments, including payment for
       all Derle labels in Farmland's possession, will be
       accelerated without any further Court order or notice to
       Derle, and Farmland will no longer have further obligation
       to adhere to the terms of the Supply Agreement and the
       Supply Agreement will be deemed rejected.

   (f) Derle or its designee will relinquish to Farmland the
       Provided Facilities and remove from the Sunnydale Facility
       any personal property belonging to Derle or its designee
       presently located on the Provided Facilities, on the
       Rejection Date.

   (g) Derle fully and finally releases and discharges Farmland
       from any and all claims, including any rejection damage
       claim pursuant to Section 365 of the Bankruptcy Code,
       relating to the Supply Agreement.

   (h) Farmland fully and finally releases and discharges Derle
       from any and all claims relating to the Supply Agreement,
       including any claim related to amounts paid to Derle.

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.  When the U.S. Debtors filed for bankruptcy
protection, they reported more than $200 million in assets and
debts. (Parmalat Bankruptcy News, Issue Nos. 35, 36 & 41;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


PCA INTL: Poor Third Qtr. Performance Spurs Moody's to Junk Debts
-----------------------------------------------------------------
Moody's Investors Service has downgraded PCA International Inc.'s
senior implied rating to Caa1 from B2 and downgraded PCA
International LLC's senior unsecured notes to Caa2 from B3.
Outlook has been changed to negative.

These ratings have been downgraded:

   * for PCA International LLC -- Issuer:

     -- $165 million senior unsecured notes due 2009 to Caa2 from
        B3;

   * for PCA International, Inc. -- Parent:

     -- Senior implied rating to Caa1 from B2;
     -- Senior unsecured issuer rating to Caa3 from Caa1;

The downgrades reflect PCA International's poor third quarter
performance, which resulted in deteriorating credit metrics and
caused the company to violate its LTM EBITDA covenant.  Although
the company is in process of amending its credit facility and
revising its covenants, its existing $50 million senior secured
credit facility was fully drawn as of October 31, 2004.  The
company expects to have modest interest coverage for the next two
years.

Moody's expects PCA's fiscal 2005 leverage (Debt/EBITDA) to
significantly exceed its fiscal 2004 leverage of 4.9x; fiscal 2006
leverage is expected to range between 5.0x and 6.0x.  Operating
margins (EBIT/revenue) have been decreasing since fiscal 2003
(to roughly 7% in LTM ended October 2004) and are only expected to
marginally improve in fiscal 2006.

The weakening credit metrics were caused in part by the abnormally
active hurricane season in the South East (where 22% of the
company's studios are located), which contributed to negative same
store sales comparisons in the second and third quarter.

The increased business and financial risks are somewhat mitigated
by the licensing arrangement PCA has with Wal-Mart through 2012.
PCA is the predominant portrait vendor to Wal-Mart with roughly
95% of PCA's revenue coming from Wal-Mart.  PCA's relationship
with Wal-Mart, combined with Wal-Mart's growth strategy of
consistently opening new stores every year, has resulted in
revenue of about $325 million for the LTM ended October 2004,
which is about the same as fiscal 2004 revenue, despite same store
sale compression in the second and third quarter of fiscal 2005.

The Caa2 rating on PCA International's senior notes reflects their
senior position to the unrated senior subordinated notes but
effective subordination to the unrated $50 million secured
revolving credit facility.  The rating also recognizes the fact
that total recovery under a distressed scenario is expected to be
less than 1%.  The senior notes are guaranteed by PCA
International, Inc., (parent) and the company's domestic
subsidiaries.  The company believes it will meet its semi-annual
interest payment on February 1st from its increasing cash position
and current availability under the revolver.

The negative ratings outlook reflects Moody's belief that PCA's
credit metrics could further deteriorate and that the company may
have to revamp its capital structure if it is unable to service
its debt.

Moody's will consider stabilizing the ratings if PCA successfully
renegotiates its credit facility to provide additional liquidity
and PCA achieves greater profitability from the stabilization of
same store sales, which should allow it to service its debt.
Negative ratings actions could be considered if profitability
continues to deteriorate, the company is unable renegotiate it
credit facility or if the company changes its relationship with
Wal-Mart.

PCA is a nationwide provider of professional color portraits of
adults, children and families with $325 million in revenues for
the last twelve months ended October 2004.  The company operates
over 2,200 permanent studios in U.S, Canadian, and Mexican
Wal-Mart stores, as well as Meijer, Inc., stores and military
bases.  PCA also operates a traveling business providing portrait
photography services to additional retail locations and
institutions.


PEGASUS SATELLITE: Wants Lease Decision Deadline Extended to May
----------------------------------------------------------------
Pegasus Satellite Communications, Inc., and its debtor-affiliates
ask the United States Bankruptcy Court for the District of Maine
to further extend their deadline to assume, assume and assign, or
reject non-residential real property leases through May 1, 2005.

Robert J. Keach, Esq., at Bernstein, Shur, Sawyer & Nelson, in
Portland, Maine, tells the Court that the current Lease Decision
Deadline has not provided a sufficient amount of time for the
Debtors to determine whether to assume, assume and assign, or
reject their Real Property Leases.

The Debtors have begun, but not yet completed, the process of
selling their broadcast television assets.  Included among the
assets that are the subject of the sale process are some or all of
the Real Property Leases.

Pending the Debtors' decision to assume or reject the Real
Property Leases, the Debtors will perform all of their undisputed
obligations arising from and after the Petition Date under the
leases in a timely fashion, including the payment of postpetition
rent due, as required by Section 365(d)(3) of the Bankruptcy
Code.  As a result, although the lessors under the Real Property
Leases have not expressly consented to the extension, there should
be no prejudice to the lessors.

Mr. Keach relates that the Debtors want to preserve maximum
flexibility in restructuring their business.  Flexibility is
particularly needed in light of the upcoming auction with respect
to the Debtors' broadcast television assets and the importance of
that auction to the Debtors' ability to consummate a
reorganization plan.

Headquartered in Bala Cynwyd, Pennsylvania, Pegasus Satellite
Communications, Inc. -- http://www.pgtv.com/-- is a leading
independent provider of direct broadcast satellite (DBS)
television.  The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. D. Maine Case No. 04-20889) on
June 2, 2004.  Larry J. Nyhan, Esq., James F. Conlan, Esq., and
Paul S. Caruso, Esq., at Sidley Austin Brown & Wood, LLP, and
Leonard M. Gulino, Esq., and Robert J. Keach, Esq., at Bernstein,
Shur, Sawyer & Nelson, represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed $1,762,883,000 in assets and
$1,878,195,000 in liabilities. (Pegasus Bankruptcy News, Issue
No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000)


PRESIDENT CASINOS: Broadwater Wins Bid for Biloxi Operations
------------------------------------------------------------
President Casinos, Inc., (OTC:PREZQ.OB) reported that Broadwater
Development, LLP, was the winning bidder for the Company's Biloxi
casino and hotel operations under the terms of Section 363 of the
United States Bankruptcy Code.  The agreement is for a purchase
price of $82.0 million, subject to certain closing adjustments.
Broadwater Development, LLP is comprised of Roy Anderson and W.C.
Fore of Gulfport, Mississippi, and Dezer Development Group from
Miami, Florida.  A hearing to approve the auction results and sale
to the winning bidder is scheduled before the United States
Bankruptcy Court for the Eastern District of Missouri on
January 26, 2005.  The closing is anticipated to occur in the
Spring of 2005.  It is anticipated that the operation will
continue in Biloxi with the new owners. In the interim, casino and
hotel operations and management will remain business as usual.

Innovation Capital Holding, LLC and Harbour Financial, LLC
assisted President Casinos, Inc., with this sales transaction.

President Casinos, Inc., owns and operates dockside gaming
facilities in Biloxi, Mississippi and downtown St. Louis,
Missouri, north of the Gateway Arch.   The Company filed for
bankruptcy protection on June 20, 2002.

At Nov. 30, 2004, President Casinos' balance sheet showed a
$54,412,000 stockholders' deficit, compared to a $52,349,000
deficit at Feb. 29, 2004.


QUALITY DISTRIBUTION: Senior Floating Rate Notes to Prepay Debts
----------------------------------------------------------------
Quality Distribution, LLC, the wholly owned subsidiary of Quality
Distribution, Inc. (Nasdaq: QLTY), and its wholly owned
subsidiary, QD Capital Corporation, plan to offer, through a
private placement, Senior Floating Rate Notes due 2012, subject to
market and other conditions.

Quality Distribution, LLC and QD Capital Corporation intend to use
the gross proceeds of the offering, which are expected to be
approximately $85 million:

     (i) to prepay approximately $70.0 million of term loan
         indebtedness outstanding under their credit agreement,

    (ii) to make a distribution to their parent, Quality
         Distribution, Inc., to be used to redeem all $7.5 million
         principal amount of Quality Distribution, Inc.'s Series B
         Floating Interest Rate Subordinated Term Securities due
         2006, and

   (iii) for general corporate purposes.

The proposed offering of the Notes is conditioned upon receipt of
an amendment of the credit agreement.  The amendment will, among
other things, permit the issuance of the Notes and the application
of the proceeds therefrom.  In addition, upon completion of
offering of the Notes, the amendment will eliminate the
consolidated interest coverage covenant and the consolidated total
leverage covenant, and replace them with a consolidated senior
secured leverage covenant.

The Notes will be offered within the United States only to
qualified institutional buyers pursuant to rule 144A under the
Securities Act of 1933, as amended, and outside the United States,
only to non- U.S. investors in reliance on Regulation S.

The Notes to be offered will not be registered under the
Securities Act or any state securities laws, and may not be
offered or sold in the United States absent registration or an
applicable exemption from registration requirements.  This press
release shall not constitute an offer to sell or a solicitation of
an offer to buy the Notes.

                       About the Company

Headquartered in Tampa, Florida, Quality Distribution, Inc.,
through its subsidiary, Quality Carriers, Inc., and TransPlastics,
a division of Quality Carriers, and through its affiliates and
owners-operators, manages approximately 3,500 tractors and 8,000
trailers.  Quality Distribution also provides other bulk
transportation and related services, including tank cleaning and
freight brokerage.  Quality Distribution is an American Chemistry
Council Responsible Care(R) Partner and is a core carrier for many
of the Fortune 500 companies that are engaged in chemical
production and processing.

                         *     *     *

As reported in the Troubled Company Reporter on Oct. 15, 2004,
Moody's Investors Service lowered all ratings of Quality
Distribution, LLC.  Specifically, these ratings are affected:

   * Senior Implied rating to Caa1 from B2

   * $215 million senior secured credit facilities, consisting of
     a $75 million revolving credit due 2008 and a $140 million
     term loan B due 2009, to Caa1 from B2

   * $125 million senior subordinated notes due 2010, to Caa3 from
     Caa1

   * Senior Unsecured Issuer rating to Caa2 from B3.

The ratings have a stable outlook.  This completes a review for
possible downgrade that was initiated in February 2004.

The rating downgrade considers the substantial deterioration in
Quality Distribution's operating profits and cash flow generation
from both 2003 levels as well as expected 2004 levels, despite a
generally favorable market for transportation services.  Although
the company has demonstrated continued revenue growth, the
deterioration in operating profits stems from costs associated
with problems in and disposal of the PPI insurance unit, increases
in environmental and insurance claims reserves, and generally
weaker results experienced in the company's operations.  In light
of this, Moody's believes that Quality Distribution's financial
metrics, including fixed charge coverage and cash flow to debt,
will be significantly weaker than previously estimated.

In addition, the rating downgrade considers the potential ongoing
implications of reported irregularities at Quality Distribution's
insurance subsidiary, PPI, on the company's credit fundamentals.
Although the company sold certain assets of PPI in July 2004,
Moody's remains concerned about residual legal ramifications that
may still ensue from incidents involving this enterprise.

The ratings have a stable outlook, reflecting Moody's expectations
that the company will take actions to remedy recent difficulties
its trucking businesses have experienced, particularly where
improvements in driver turn-over are concerned, as well as the
financial flexibility provided by current liquidity available to
the company.  Nevertheless, Moody's believes that absent an
improvement in operating performance the company could face
difficulty in maintaining compliance with existing financial
covenants in its bank credit facility.  The ratings or their
outlook could be downgraded if Quality Distribution's business
model were to further suffer due to softer revenue growth, or if
the trend to higher-than-anticipated operating expenses were to
continue, resulting in operating margins of below 5%, which would
further impede the company's cash flow and liquidity.  Conversely,
ratings or their outlook may be revised upward if the company
demonstrates sustained improvement in transportation revenue
growth to over 10% annually and operating margins of over 7%,
resulting in robust interest coverage levels and cash flow
generation adequate to substantially repay debt.


QUALITY DISTRIBUTION: Moody's Junks Proposed Senior Unsec. Notes
----------------------------------------------------------------
Moody's Investors Service has assigned a Caa2 rating to Quality
Distribution, LLC's proposed senior unsecured notes, due 2012.
The purpose of the proposed 144A notes offering is to repay about
$82 million of existing debt, including a prepayment of about
$70 million of the company's $138 million term loan B, due 2009.
In conjunction with this offering, the company has proposed
amendments to its senior secured bank credit facility to provide
the company with additional room under its financial covenant
restrictions.

In addition, Moody's has affirmed these ratings:

   * $143 million amended revolving credit facility, rated Caa1,
   * $125 million senior subordinated notes due 2010, rated Caa3,
   * Senior Implied rating of Caa1, and
   * Senior Unsecured Issuer rating of Caa2.

The ratings have a stable outlook.

The ratings continue to reflect Quality Distribution's weak
operating profits and cash flow experienced in FY 2004, resulting
in weak financial metrics, including fixed charge coverage and
cash flow to debt, despite a generally favorable market for
transportation services.  Although the company has demonstrated
continued revenue growth, the deterioration in operating profits
stems from costs associated with problems in and disposal of the
PPI insurance unit, increases in environmental and insurance
claims reserves, and generally weaker results experienced in the
company's operations.

In addition, the ratings continue to consider the potential
implications of reported irregularities at Quality Distribution's
insurance subsidiary, PPI, on the company's credit fundamentals.
Although the company has recently settled all shareholder lawsuits
relating to the PPI incident, addressing a major hurdle in
resolving litigation relating to PPI, Moody's remains concerned
about residual legal ramifications that may still ensue from
incidents involving this enterprise.

However, the ratings also positively consider the incremental
liquidity benefit provided to the company through the amendment of
certain bank facility terms, which decreases the likelihood of
default under those facilities owing to possible financial
covenant violation.

The ratings have a stable outlook, reflecting Moody's expectations
that the company will take actions to remedy recent difficulties
its trucking businesses have experienced, particularly where
improvements in driver turn-over are concerned, and that the
company has a substantially improved ability to maintain
compliance with its amended financial covenants in its bank credit
facility.

The ratings or their outlook could be downgraded if Quality
Distribution's business model were to further suffer due to softer
revenue growth, or if the trend to higher-than-anticipated
operating expenses were to continue, resulting in operating
margins persistently below 5%, which would further impede the
company's cash flow and liquidity.

Conversely, ratings or their outlook may be revised upward if the
company demonstrates sustained improvement in transportation
revenue growth of over 10% annually and operating margins of over
7%, resulting in robust interest coverage levels and cash flow
generation adequate to substantially repay debt.

Upon close of the proposed notes offering, in which the company's
total debt will remain essentially unchanged, Quality Distribution
will remain heavily-leveraged as it emerges from a difficult
operating period.  As the result of consequences from the PPI
incident as well as other market-driven factors, Quality
Distribution's operating performance in 2004 has been well below
expected levels.  For the first nine months of 2004, while
transportation revenues grew 10% from the same period in 2003 to
$467 million, operating margins declined to about 3% of revenue
(versus almost 6% for the same period in 2003).

The company encountered increased expenses associated with
insurance costs and environmental liabilities, lost income that
had previously been derived from the PPI insurance business, and
bore additional SG&A costs.  On pro forma debt of about
$280 million upon close, this represents about 6.8x nine months
September 2004 EBITDA, annualized (4.2x adjusted EBITDA per bank
credit facility covenant calculations).  While much of this
reduction in earnings is non-cash in nature, cash flow generation
has been negatively impacted, and Moody's believes that cash flow
will continue to be constrained in the near future.  Operating
cash flow for the first nine months of 2004 was about $12 million,
compared to almost $21 million in the same period in 2003.  On
capital expenditures of $8 million, the company has only generated
about $4 million of free cash flow through September 2004,
representing, on an annualized basis, about 2% of pro forma debt.
Moody's expects that even if operating trends improve the company
will be only marginally free cash flow positive in 2005,
suggesting limited capacity for debt repayment.

However, with the amendment of the company's senior secured credit
facilities, the company does have some headroom in liquidity to
provide a small amount of cushion against a further decline in
operating cash flows.  Upon close of the proposed transaction,
none of the company's $75 million revolving credit facility is
expected to be drawn, with about $17 million used for letters of
credit.  Moody's expects the full remaining $58 million to be
available under the revolver upon close, which, the rating agency
believes, should be adequate to provide for coverage of fixed cost
and planned CAPEX requirements over the near term in the event of
a modest set back in operating performance.

The Caa2 rating on the senior unsecured notes, one notch below
both the senior implied and the senior secured credit facility
ratings, reflects the severity of loss that could be borne by
holders of these notes in the event of default.  These notes are
effectively subordinated to all existing and future secured debt
of the company, but senior in priority to QD's $125 million senior
subordinated notes due 2010, rated Caa3.  Moody's assesses the
asset coverage of all debt to be weak, particularly so for the two
classes of unsecured notes.  Since the company operates under an
"asset light" business model, Quality Distribution has only a
limited amount of fixed assets available to cover existing debt
levels.  On total assets of $382 million (as of September 2004),
only $125 million of this amount was represented by fixed assets,
while $131 million comprised goodwill.  Accounts receivable is the
only other asset reported of significance, at about $99 million.
In a liquidation scenario, Moody's believes that realizable asset
values could be significantly below total debt outstanding
($280 million, pro forma this transaction), and that coverage
available to unsecured debt holders would imply substantial loss
of principal.

Quality Distribution, LLC, and its holding company Quality
Distribution, Inc., are headquartered in Tampa, Florida.  Through
its subsidiaries and affiliates, the company is a leading
transporter of bulk liquid and dry bulk chemical products.  The
company is 55% owned by Apollo Investment Fund III, LP, and 45%
owned by management and other investors.


QUANTEGY INC: Employs Kurtzman Carson As Claims & Noticing Agent
----------------------------------------------------------------
Quantegy, Inc., and its debtor-affiliates sought and obtained
permission from the U.S. Bankruptcy Court for the Middle District
of Alabama to retain Kurtzman Carson Consultants LLC as their
claims and noticing agent.

The Debtors estimate they have over 3,000 potential creditors and
they believe that Kurtzman Carson will be able to help them
effectively and efficiently serve notices to these creditors.

Kurtzman Carson's will:

     a) prepare and serve required notices in these cases;

     b) file with the Clerk's Office a certificate or affidavit
        of service that includes an alphabetical list of persons
        on whom the notice was served and the date and manner of
        service;

     c) maintain copies of all proofs of claim and proofs of
        interest;

     d) docket all proofs of claim and proofs of interest;

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

     f) transmit to the Clerk's Office a copy of the claims
        registers on a periodic basis;

     g) maintain an up-to-date mailing list for all entities
        that have filed proofs of claim or proofs of interest
        and make the list available upon request to the Clerk's
        Office or any party in interest;

     h) provide access to the public for examination of copies
        of the proofs of claim or proofs of interest filed in
        these cases without charge during regular business
        hours;

     i) record all transfers of claims pursuant to Bankruptcy
   Rule 3001(e);

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

     k) provide temporary employees to process claims as
        necessary;

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

     m) provide other claims processing, noticing,
        balloting and related administrative services as may be
        requested from time to time by the Debtor; and

     n) act as balloting agent.

Christopher R. Schepper, Chief Operating Officer at Kurtzman
Carson, discloses that the Debtors paid his Firm a $75,000
retainer.  Professionals at Kurtzman Carson and their current
billing rates per hour:

          Designation              Billing Rate
          -----------              ------------
     Senior Bankruptcy Consultant  $225 - $295
     Bankruptcy Consultant          125 -  210
     Technology/Programming         115 -  195
     Case Manager                    75 -  115
     Clerk                           40 -   65

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

Headquartered in Opelika, Alabama, Quantegy, Inc. --
http://www.quantegy.com/-- provides a full line of audio, video,
data, storage, logging and instrumentation recording media
products.  The Company along with its debtor-affiliates filed for
chapter 11 protection on Jan. 10, 2005 (Bankr. M.D. Ala. Case No.
05-80042).  Cameron-RRL A. Metcalf, Esq., at Espy, Metcalf &
Poston, PC, represents the Debtors in their restructuring efforts.
When Quantegy, Inc., filed for protection from its creditors, it
estimated assets between $1 million and $10 million and debts
between $10 million to $50 million.


QUANTEGY INC: Taps Equity Partners as Marketing Agent
-----------------------------------------------------
Quantegy, Inc., and its debtor-affiliates sought and obtained
permission from the U.S. Bankruptcy Court for the Middle District
of Alabama to hire Equity Partners, Inc., of Maryland as their
marketing, advertising, financing and real-estate agent during
their chapter 11 cases.

Kenneth W. Mann, a member of Equity Partners, discloses that the
Debtors gave his Firm $18,000 in advance for advertising,
marketing, travel or any other out-of-pocket expense.  For any
asset sale, the Debtors agreed to pay Equity Partners a percentage
of the proceeds.

To the best of the Debtors' knowledge, Equity Partners does not
hold any interest materially adverse to the Debtors or their
estates.

Headquartered in Opelika, Alabama, Quantegy, Inc. --
http://www.quantegy.com/-- provides a full line of audio, video,
data, storage, logging and instrumentation recording media
products.  The Company along with its debtor-affiliates filed for
chapter 11 protection on Jan. 10, 2005 (Bankr. M.D. Ala. Case No.
05-80042).  Cameron-RRL A. Metcalf, Esq., at Esq., Metcalf &
Poston, PC, represents the Debtors in their restructuring efforts.
When Quantegy, Inc., filed for protection from its creditors, it
estimated assets between $1 million and $10 million and debts
between $10 million to $50 million.


REAL MEX: Extends Senior Debt Exchange Offering Until March 31
--------------------------------------------------------------
Real Mex Restaurants, Inc., has extended the expiration date for
its previously announced exchange offer relating to its
outstanding 10% Senior Secured Notes Due 2010 which commenced on
Sept. 28, 2004.

The exchange offer, which was initially scheduled to expire on
Oct. 27, 2004, has been extended until 5:00 p.m., E.S.T. on
March 31, 2005.  Holders of Notes previously tendered for exchange
shall have the right to withdraw tenders of Notes at any time
prior to the expiration of the exchange offer.  As of this date,
holders of $103,259,000 or approximately 98%, of the outstanding
principal amount of Notes have tendered their Notes for exchange.
As previously announced, the Company has temporarily suspended the
use of its exchange offer prospectus.  Such suspension shall
continue to be in effect until further notice from the Company.

                       About the Company

Headquartered in Long Beach, California, Real Mex Restaurants --
http://www.eltorito.com/-- is the largest full-service, casual
dining Mexican restaurant chain operators in the United States,
with 164 restaurants in California and an additional 35 company-
owned restaurants in twelve other states.  These include 69 El
Torito Restaurants, 69 company-owned Chevys Fresh Mex Restaurants,
39 Acapulco Mexican Restaurants, 6 El Torito Grill Restaurants, 5
company-owned Fuzio Universal Pasta Restaurants, the Las Brisas
Restaurant in Laguna Beach, and several regional restaurant
concepts such as Who-Song & Larry's, Casa Gallardo, El Paso
Cantina, Keystone Grill and GuadalaHARRY'S.  Real Mex Restaurants
is committed to the highest standards and is dedicated to serving
the freshest Mexican food with excellent service in a clean,
comfortable, and friendly environment.

                          *     *     *

As reported in the Troubled Company Reporter on Jan. 14, 2005,
Standard & Poor's Ratings Services affirmed its ratings, including
the 'B' corporate credit rating, on casual-dining restaurant
operator Real Mex Restaurants, Inc.  All ratings were removed from
CreditWatch.  The outlook is stable.

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

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

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

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


RED LINE RESTORATIONS: Case Summary & Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Red Line Restorations, LLC
        914 East Main Street
        Stamford, Connecticut 06902

Bankruptcy Case No.: 05-50053

Chapter 11 Petition Date: January 18, 2005

Court:  District of Connecticut (Bridgeport)

Judge:  Alan H.W. Shiff

Debtor's Counsel: Hale C. Sargent, Esq.
                  Sargent and Sargent, LLC
                  830 Post Road East
                  PO Box 454
                  Westport, Connecticut 06881
                  Tel: (203) 226-3331

Estimated Assets: $0 to $50,000

Estimated Debts:  $1 Million to $10 Million

Debtor's 8 Largest Unsecured Creditors:

    Entity                       Nature of Claim    Claim Amount
    ------                       ---------------    ------------
John P. Kendall                  Alleged Fraudulent   $5,600,000
Faneuil Hall Associates
175 Federal Street
Boston, Massachusetts 02110

Royal Publications                                       $20,000
790 West Tennessee Avenue
Denver, Colorado 80223

James Patterson                  Labor                   $17,500
10,000 Shelbyville Road
Louiseville, Kentucky

New Hope Realty Trust            Rebt in Arrears         $13,200
914 East Main Street
Stamford, Connecticut 06902

ABCO Welding Supply              Welding Machines &       $4,980
                                 Supplies

New Hope Welding/Fabrication    Fabrication &             $2,356
                                Supplies

SBC                             Telephone Services          $521

Federal Express                 Shipping                    $350


REMOTE DYNAMICS: Needs to Raise $6 Mil. More to Fund Operations
---------------------------------------------------------------
Remote Dynamics, Inc., began beta tests of its new product
offering, REDIview during November 2004 with a full-scale
commercial launch scheduled for the first calendar quarter of
2005.  REDIview is an Internet and service bureau-based software
application that provides an extensive array of real-time and
accurate mapping, trip replay, and vehicle activity reports.  In
addition, REDIview includes a series of exception-based reports
designed to highlight inefficiencies in the operations of a
vehicle fleet.  Utilizing Remote Dynamics proven, high-capacity
network service center, customers may access their information
securely through the Internet from any personal computer or
certain other devices.

REDIview incorporates technologies that allow for fast and
effective integration into legacy applications operated by
companies with vehicle fleets and mobile workers.  This design
allows companies to easily extend their existing supply chain
management systems to the mobile workforce for transaction
processing and customer fulfillment.  REDIview was also designed
to be hardware and network agnostic to provide the maximum
flexibility in designing solutions that best fit the customer's
specific needs.

                   Sales Decline Expectations

Historically, much of Remote Dynamics Inc.'s revenues have been
derived from products and services sold to the long-haul trucking
industry, small to medium-sized companies through its VMI product
line and to member companies of SBC Communications, Inc.  The
Company expects revenues from these legacy customers to decline
substantially during 2005, and for the Company to sustain ongoing
business operations and ultimately achieve profitability, it must
substantially increase its sales and penetration into the
marketplace with competitive products and services such as
REDIview.

                   Profitability Expectations

Management currently does not expect to achieve profitability
during its current fiscal year since the Company will be expanding
its sales force and building a base of customers that purchase
information and data services from the Company on a monthly
recurring basis.  Key to achieving profitability is to obtain a
REDIview customer base that provides monthly recurring revenues
and corresponding gross margins that exceed operating costs and
expenses to support the REDIview customer base. Management
currently estimates that for the Company to achieve profitability,
it will need to have approximately 38,000 to 40,000 units of its
REDIview products in service.  However, there can be no assurance
that the Company can achieve the required sales of REDIview to
meet its profitability goals.

The Company believes that the potential market opportunity for
automatic vehicle location products in the United States, such as
its GPRS-based REDIview product to be launched in the first
calendar quarter of 2005, is significant.  The Company currently
believes that it will be positioned with its telematics product
lines and proven operations support to take advantage of the
significant market potential.  In addition, the Company has
renewed its service vehicle contract with SBC for an additional
term that ends on December 31, 2005.

                    Critical Success Factors

Critical success factors in management's plans to achieve positive
cash flow from operations include:

   (1) ability to raise a minimum of $6 million in additional
       capital resources to fund the Company's operations until
       revenues from REDIview are sufficient to fund ongoing
       operations;

   (2) significant market acceptance of REDIview in the United
       States;

   (3) maintaining and expanding the Company's direct sales
       channel and expanding into new markets not currently served
       by the Company;

       New salespersons will require training and time to become
       productive.  In addition, there is significant competition
       for qualified salespersons, and the Company must continue
       to offer attractive compensation plans and opportunities to
       attract qualified salespersons.

   (4) maintaining and expanding indirect distribution channels;

       Securing and maintaining adequate third party leasing
       sources for customers who purchase the Company's products.

There can be no assurances that any of these success factors will
be realized or maintained.

Although the Company, which filed voluntary petitions for relief
under Chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court for the Northern District of Texas
Dallas Division, believes that it has exited the Chapter 11
process as a stronger and more financially viable entity, at this
time it is not possible to accurately predict the effect of the
bankruptcy filing on its business.  It is possible that because of
operating performance or other factors, the Company may not be
able to continue as a going concern.  Accordingly, the Company
urges that extreme caution be exercised with respect to existing
and future investments in any of the Company's securities. Should
the Company not continue as a going concern, it may be unable to
realize its assets and discharge its liabilities in the normal
course of business.

The Company has incurred significant operating losses since
inception and has limited financial resources to support itself
until the time that it is able to generate positive cash flow from
operations.  The Company had cash and cash equivalents of
$3.3 million as of November 30, 2004.


Based in Richardson, Texas, Minorplanet Systems USA, Inc. (nka
Remote Dynamics, Inc. -- http://www.minorplanetusa.com/--
develops and implements mobile communications solutions for
service vehicle fleets, long-haul truck fleets and other mobile-
asset fleets, including integrated voice, data and position
location services.  Minorplanet, along with two affiliates, filed
for chapter 11 protection (Bankr. N.D. Texas, Case No. 04-31200)
on February 2, 2004.  Omar J. Alaniz, Esq., and Patrick J.
Neligan, Jr., Esq., at Neligan Tarpley Andrews and Foley LLP,
represent the Debtors in their restructuring efforts.  When
Minorplanet filed for bankruptcy, it estimated assets and debts at
$10 million to $50 million.

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 6, 2004,
Remote Dynamics, Inc., in compliance with Nasdaq Marketplace Rule
4350(b)(1)(b), reported that BDO Seidman LLP, the company's
independent registered accounting firm, issued an audit report for
the fiscal year ended Aug. 31, 2004, which expressed an
unqualified opinion but included an explanatory paragraph
concerning Remote Dynamics' ability to continue as a going concern
based upon its history of recurring losses from operations and
negative cash flows from operating activities.


SGD HOLDINGS: Files for Bankruptcy Protection in Delaware
---------------------------------------------------------
SGD Holdings, Ltd. (OTC Bulletin Board: SGDD), filed a voluntary
petition for reorganization under Chapter 11 of the U.S.
Bankruptcy Code in the United States Bankruptcy Court for the
District of Delaware.  Chapter 11 allows a company to continue
operating in the ordinary course of business and to maximize
recovery for the company's stakeholders.  The filing will enable
the company to continue to conduct business as usual while it
develops a reorganization plan.

Headquartered in Addison, Texas, SGD Holdings, Ltd., through its
subsidiary, is a wholesaler of fine jewelry, offering both gold
and silver jewelry to retailers throughout the United States.  The
Company filed for chapter 11 protection on January 20, 2005
(Bankr. D. Del. Case No.: 05-10182).  Donna L. Harris, Esq., at
Cross & Simon, LLC, represent the Debtor in its restructuring
efforts.  When the Debtor filed for bankruptcy, it reported an
estimated assets amounting to $1 million to $10 million and
estimated debts amounting to $10 million to $50 million.


SGD HOLDINGS LTD: Case Summary & 17 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: SGD Holdings, Ltd.
        aka Goldonline International, Inc.
        aka Benton Ventures, Inc.
        4385 Sunbelt Drive
        Addison, Texas 75001

Bankruptcy Case No.: 05-10182

Type of Business: The Debtor is a holding company engaged in
                  acquiring and developing jewelry businesses.
                  Its principal operating subsidiary, HMS Jewelry
                  Company, Inc., is a national jewelry wholesaler,
                  specializing in 18K, 14K and 10K gold and
                  platinum jewelry.   HMS markets its products to
                  a network of over 30,000 retail jewelers through
                  the distribution of a catalog and through its
                  B2B online catalog at http://www.HMSgold.com/
                  See http://www.sgdholdings.com/

Chapter 11 Petition Date: January 20, 2005

Court:  District of Delaware

Judge:  Mary F. Walrath

Debtor's Counsel: Donna L. Harris, Esq.
                  Cross & Simon, LLC
                  913 North Market Street, Suite 1001
                  Wilmington, Delaware 19801
                  Tel: (302) 777-4200
                  Fax: (302) 777-4224

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $10 Million to $50 Million

Debtor's 17 Largest Unsecured Creditors:

    Entity                       Nature of Claim    Claim Amount
    ------                       ---------------    ------------
Lakewood Development             Litigation           $7,200,000
Corporation
c/o Phillip W. Offill, Jr., Esq.
Godwin Gruber LLP
1201 Elm Street, Suite 1700
Dallas, Texas 75270

Houston REIT Operating           Trade                  $110,160
Partnership
c/o Hartman Management, Inc.
1450 Sam Houston
Parkway North, Suite 100
Houston, Texas 77043

G. David Gordon                  Trade                   $87,832
7633 East 63rd Place, Suite 210
Tulsa, Oklahoma 74133

BJB Services, Inc.               Trade                   $62,785
7633 East 63rd Place, Suite 210
Tulsa, Oklahoma 74133

Guest & Company                  Trade                   $59,450

Cooper & Scully                  Trade                   $51,614

Michael Maness                   Trade                   $21,000

Jules P. Sem, Esq.               Professional Fees       $18,330

Gaunt & Kruppstadt, LLP          Professional Fees       $14,173

Eurovest                         Trade                    $6,132

Stewart & Stewart Attorneys      Professional Fees        $2,857

Bradley, Andrew,                 Professional Fees        $2,590
Christopher & Kaye

Olde Monmouth Stock Transfer     Trade                    $2,530

M&R Resource Services, Inc.      Trade                    $2,153

PublicEase, Inc.                 Trade                    $1,660

Legget & Clemons                 Trade                      $515

James G. Gordon &                Litigation              Unknown
Lisa K. Gordon


SPIEGEL INC: BofA Wants Court to Lift Stay to Effect Set-Off
------------------------------------------------------------
Eddie Bauer, Inc., deposited with Bank of America, N.A.,
$2,500,000 as cash collateral pursuant to the terms of a cash
collateral account agreement dated December 19, 2002.  Eddie Bauer
pledged the Prepetition Cash Collateral in line with certain
automatic clearinghouse services or facilities to be provided by
BofA.  As of the Petition Date, the Prepetition Cash Collateral
continues to be held by BofA in the deposit account, in Eddie
Bauer's name, for BofA's benefit.

As of its bankruptcy petition date, Spiegel, Inc., owed
$22,986,825 to BofA pursuant to the terms of an amended and
restated term loan agreement on March 27, 1996.  Eddie Bauer, in
accordance with the terms of an unconditional subsidiary guaranty
of payment dated March 7, 1997, unconditionally guaranteed the
payment of Spiegel's obligations arising under or in connection
with, inter alia, the Term Loan Agreement.  Under the Guaranty's
terms, Eddie Bauer granted to BofA, in addition to BofA's common
law set-off right, an express contractual right of set-off with
respect to all Eddie Bauer balances, credits or deposits from time
to time held by BofA or any BofA agent or bailee.

On September 30, 2003, BofA filed Claim No. 2845 and supporting
documentation evidencing the $22,986,825 Prepetition Debt.  In its
Proof of Claim, BofA noted that the Prepetition Debt is partially
secured by the Prepetition Cash Collateral.

Under applicable non-bankruptcy law, Daniel F. Flores, Esq., at
Pitney Hardin, LLP, in New York, tells the U.S. Bankruptcy Court
for the Southern District of New York that BofA is entitled to set
off the Prepetition Cash Collateral against the Prepetition Debt,
which are mutual, prepetition debts owed by and to the same
parties under Section 553 of the Bankruptcy Code, subject to a
modification of the automatic stay.

Mr. Flores contends that BofA is "not adequately protected," thus
cause exists to modify the stay to permit it to effect a set-off
against the Prepetition Cash Collateral pursuant to Section 553.

Accordingly, BofA asks the Court to lift the stay to permit it and
its assigns to effect a set-off of the Prepetition Cash Collateral
against the Prepetition Debt.

Headquartered in Downers Grove, Illinois, Spiegel, Inc. --
http://www.spiegel.com/-- is a leading international general
merchandise and specialty retailer that offers apparel, home
furnishings and other merchandise through catalogs, e-commerce
sites and approximately 560 retail stores.  The Company filed for
Chapter 11 protection on March 17, 2003 (Bankr. S.D.N.Y. Case No.
03-11540).  James L. Garrity, Jr., Esq., and Marc B. Hankin, Esq.,
at Shearman & Sterling, represent the Debtors in their
restructuring efforts.  When the Company filed for protection from
its creditors, it listed $1,737,474,862 in assets and
$1,706,761,176 in debts. (Spiegel Bankruptcy News, Issue No. 37;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


SR TELECOM: Inks Letter of Intent for $50M Sr. Sec. Facility
------------------------------------------------------------
SR Telecom(TM), Inc., (TSX: SRX; Nasdaq: SRXA) entered into a non-
binding Letter of Intent from a major U.S. lender, for a
five-year revolving Senior Secured Credit Facility in an amount of
up to US$50 million.  The amount that may be drawn under the
facility is limited to a borrowing base defined by percentages of
qualifying receivables, inventory and the fair market value of the
land and building owned by SR Telecom in Montreal. The facility
will bear interest at floating rates related to LIBOR.

Completion of the Senior Secured Credit Facility is subject to a
number of conditions, including satisfactory completion of due
diligence, a concurrent issuance of equity and subordinated debt
of no less than US$30 million, execution of satisfactory
inter-creditor and subordination agreements with the lenders of
our subsidiary, CTR, negotiation of satisfactory documentation and
other conditions and covenants customary for a facility of this
nature.

The Senior Secured Credit Facility is part of a broader
comprehensive refinancing package, details of which will be
announced in the coming weeks.

                        About SR Telecom

SR Telecom (TSX: SRX, Nasdaq: SRXA) designs, manufactures and
deploys versatile Broadband Fixed Wireless Access solutions. For
over two decades, carriers have used SR Telecom's products to
provide field-proven data and carrier-class voice services to end-
users in both urban and remote areas around the globe.  SR
Telecom's products have helped to connect millions of people
throughout the world.

A pioneer in the industry, SR Telecom works closely with carriers
to ensure that its broadband wireless access solutions directly
respond to evolving customer needs.  Its turnkey solutions include
equipment, network planning, project management, installation and
maintenance.

SR Telecom is an active member of WiMAX Forum, a cooperative
industry initiative, which promotes the deployment of broadband
wireless access networks by using a global standard and certifying
interoperability of products and technologies.

                          *     *     *

As reported in the Troubled Company Reporter on May 5, 2004,
Standard & Poor's Ratings Services lowered its long-term corporate
credit and senior unsecured debt ratings on SR Telecom, Inc., to
'CCC' from 'CCC+'.  The outlook is negative.

"The ratings action reflects continued poor operating performance
and material negative free operating cash flow in 2003, and
follows the company's announcement that it plans to undertake
additional restructuring of its operations," said Standard &
Poor's credit analyst Michelle Aubin.

The negative outlook reflects the possibility that the ratings on
SR Telecom could be lowered further if the company's operating
performance and liquidity position do not improve.


SR TELECOM: Revises Guidance for 2004 Fourth Quarter
----------------------------------------------------
SR Telecom(TM), Inc., (TSX: SRX; Nasdaq: SRXA) is revising its
previously announced guidance for the fourth quarter of fiscal
2004 because of unanticipated delays in receiving major purchase
orders under existing frame contracts and the deferral of certain
shipments of other orders into the first quarter of 2005,

The Company now expects that its consolidated revenues in the
fourth quarter of fiscal 2004 will be in the range of $22 to
$25 million.  Moreover, the Company will not achieve break-even
results in its core wireless business in the fourth quarter of
2004, and will generate a significant loss.  Consolidated cash
balances at year-end were approximately $6.9 million, of which
approximately $1.9 million was restricted.

Due to anticipated demand under existing frame contracts and bids
in progress and the deferral of certain contracts from 2004 into
2005, the Company is confident that the Company will achieve
consolidated revenues in the range of $170 million to $200 million
in 2005.  However, the Company has also been adversely impacted by
a reduction in the availability of supplier credit, which in turn
has slowed raw material purchases and production.  This production
slowdown will have the effect of producing a significant EBITDA
loss during the first quarter of 2005.  Despite this loss, and
contingent on the anticipated refinancing of the Company's
existing indebtedness in the near future, the Company expects to
be in a position to increase production by the second quarter of
2005 and to realize consolidated EBITDA in the range of $15
million for fiscal 2005.

             New Purchase Orders from Latin America

SR Telecom received purchase orders valued at approximately
CDN$10 million from a major telecommunications operator in Latin
America.  These orders are part of the previously announced frame
contract under which the operator selected the SR500(TM) family of
fixed wireless access systems. Deliveries are scheduled to
commence immediately.

The operator will deploy the networks throughout the country to
provide urban-quality services to rural and remote communities.
These include first-time residential services to some areas, an
expanded payphone network and the introduction of broadband
Internet services to the rural communities.  Further deployment
and expansion for this universal access program is expected to
take place in 2005.

            Additional Airstar orders from Indonesia

SR Telecom received new orders valued at approximately CDN$1
million from PT Aplikanusa Lintasarta, the largest data and
corporate network communications provider in Indonesia.  These
add-on orders are for a project that was initiated in September
2003.  Lintasarta has selected the airstar(TM) wireless broadband
solution to provide ATM, frame relay and clear channel services to
its customers in the Java, Kalimantan and Sulawesi regions of
Indonesia.

With these orders, Lintasarta will add airstar base stations and
Customer Premises Equipment to its growing network of airstar
systems.  Deliveries are scheduled to commence immediately.

                           About SR500

The SR500 family of fixed wireless access systems enables
operators to extend their reach and deliver a full range of
tailor-made voice and data applications to end-users.  The systems
provide bandwidth-on-demand and allow service providers to offer
bundled service packages to meet the various needs of their
customers.  The SR500 system can be deployed as a standalone
wireless access technology or as an overlay network that
complements narrowband wireless local loop networks.

                         About Airstar

With product availability at 3.5, 10.5, 26 and 28 GHz, the
advanced and adaptive airstar platform addresses the needs of
service providers and carriers who offer metropolitan broadband
connectivity services.  Airstar's intelligent ATM-based technology
optimizes spectrum use through packet-based dynamic bandwidth
allocation, enabling it to handle a wide variety of services and
provide on-demand bandwidth quickly, reliably and economically.
airstar is also used for cellular transmission infrastructure
applications and has been deployed in Europe, Asia, Latin America,
the Middle East and North America.

                        About SR Telecom

SR Telecom (TSX: SRX, Nasdaq: SRXA) designs, manufactures and
deploys versatile Broadband Fixed Wireless Access solutions. For
over two decades, carriers have used SR Telecom's products to
provide field-proven data and carrier-class voice services to end-
users in both urban and remote areas around the globe.  SR
Telecom's products have helped to connect millions of people
throughout the world.

A pioneer in the industry, SR Telecom works closely with carriers
to ensure that its broadband wireless access solutions directly
respond to evolving customer needs.  Its turnkey solutions include
equipment, network planning, project management, installation and
maintenance.

SR Telecom is an active member of WiMAX Forum, a cooperative
industry initiative, which promotes the deployment of broadband
wireless access networks by using a global standard and certifying
interoperability of products and technologies.

                          *     *     *

As reported in the Troubled Company Reporter on May 5, 2004,
Standard & Poor's Ratings Services lowered its long-term corporate
credit and senior unsecured debt ratings on SR Telecom, Inc., to
'CCC' from 'CCC+'.  The outlook is negative.

"The ratings action reflects continued poor operating performance
and material negative free operating cash flow in 2003, and
follows the company's announcement that it plans to undertake
additional restructuring of its operations," said Standard &
Poor's credit analyst Michelle Aubin.

The negative outlook reflects the possibility that the ratings on
SR Telecom could be lowered further if the company's operating
performance and liquidity position do not improve.


SR TELECOM: Fidelity Management Sells 1,725,400 Common Shares
-------------------------------------------------------------
Fidelity Management & Research Company and Fidelity Management
Trust Company reported that certain fund accounts for which
Fidelity serves as investment adviser have sold 1,725,400 shares
(or 9.69%) of SR Telecom Inc.'s outstanding common stock and
warrants convertible to common stock.  Fidelity had control but
not ownership of those shares.  As a result of the sale, Fidelity
holds 0 shares (or 0%) of SR Telecom Inc.'s outstanding common
stock and warrants convertible to common stock.  Fidelity's sale
of SR Telecom Inc.'s outstanding common stock was executed on the
Toronto Stock Exchange.

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

SR Telecom is an active member of WiMAX Forum, a cooperative
industry initiative, which promotes the deployment of broadband
wireless access networks by using a global standard and certifying
interoperability of products and technologies.

                         *     *     *

As reported in the Troubled Company Reporter on May 5, 2004,
Standard & Poor's Ratings Services lowered its long-term corporate
credit and senior unsecured debt ratings on SR Telecom, Inc., to
'CCC' from 'CCC+'.  The outlook is negative.

"The ratings action reflects continued poor operating performance
and material negative free operating cash flow in 2003, and
follows the company's announcement that it plans to undertake
additional restructuring of its operations," said Standard &
Poor's credit analyst Michelle Aubin.

The negative outlook reflects the possibility that the ratings on
SR Telecom could be lowered further if the company's operating
performance and liquidity position do not improve.


STRATUS TECH: Reducing 20% of Workforce to Save $15 Mil. in 2006
----------------------------------------------------------------
Stratus Technologies International, S.a r.l. will reduce its
current worldwide workforce of 903 people by approximately
20 percent.  The company's management estimates the downsizing
will result in savings of approximately $15 million in fiscal year
2006, beginning Feb. 28, 2005.  This reduction will also make
financial resources available for strategic business investment,
and will better align operational costs and expenses with business
growth.

The workforce reduction begins Jan. 19 and will be carried out
over a period of approximately two months.  The action will result
in a charge against earnings of approximately $11 million in the
fourth quarter of fiscal year 2005, ending Feb. 27, 2005.

"While difficult to make, we believe this decision is necessary
for us to successfully execute our business plans, strengthen our
ability to compete in our chosen markets, and attain our financial
and strategic goals," said David Laurello, president and CEO of
Stratus Technologies.  "Reducing costs, while ensuring our ability
to invest in key strategic initiatives, is consistent with prudent
management.  Further, our commitment to serving customers with
superior products and services remains undiminished.  We believe
the restructuring will improve our financial standing and solidly
position the company for increased growth and profitability in the
future."

                   About Stratus Technologies

Stratus Technologies is a global provider of fault-tolerant
computer servers, technologies and services, with more than 20
years of experience focused in the fault-tolerant server market.
Stratus(R) servers provide high levels of reliability relative to
the server industry, delivering 99.999% uptime or better.  Stratus
servers and support services are used by customers for their
critical computer-based operations that are required to be
continuously available for the proper functioning of their
businesses.  For more information, visit http://www.stratus.com/

At Aug. 29, 2004, Stratus Technologies' balance sheet showed a
$76,749,000 stockholders' deficit, compared to a $70,909,000
restated deficit at Feb. 29, 2004.


TANGO INC: Approves Plan to Retain Turnaround Specialist
--------------------------------------------------------
The management of Tango Incorporated (PINK SHEETS:TNGO) has
approved a plan to begin soliciting bids from certain turnaround
specialists over the next two weeks.  Tango will be looking for
assistance in three main areas:

   1.) assisting Tango to be able to achieve a true market
       evaluation.

   2.) hiring the right management group to maintain compliance
       with listing requirements.

   3.) presenting an Acquisition and Banking strategy to ensure
       the Company's growth.

"Over the past several months Tango's stock has been named on the
Rules SHO list from the NASDAQ, was unknowingly listed on the
Berlin Stock Exchange and then encountered some operational
shortcomings.  Tango's team is committed to building out a
successful company.  In order to achieve that objective, we are
commencing the process of recruiting a team of people with the
expertise to help guide the Company and build a strong, growth
orientated company over the next twelve months. Tango's term for
hire calls for potential bidders to assist in the prevention of a
reverse split, while still enabling the Company to acquire the
necessary assets to move the business forward. It also
necessitates recruiting and retaining a management team with
control structures necessary to maintain the Company's compliance
in meeting OTC BB requirements. Tango will also be changing its
corporate focus," said Sameer Hirji, CEO.

                       About the Company

Tango Incorporated is a holding company that will purchase
interests in emerging growth orientated companies that demonstrate
a strong ability to grow rapidly.  Tango's management will look
for unique opportunities that demonstrate ability to provide a
consistent revenue stream.

                         *     *     *

                       Going Concern Doubt

In its Form 10-QSB for the quarterly period ended April 30, 2004,
filed with the Securities and Exchange Commission, Tango, Inc.,
reported that, as of April 31, 2003 and 2004, its auditors
expressed substantial doubt about the company's ability to
continue as a going concern in light of continued net losses and
working capital deficits.


TODD MCFARLANE: U.S. Trustee Picks 4-Member Creditors Committee
---------------------------------------------------------------
The United States Trustee for Region 14 appointed four creditors
to serve on an Official Committee of Unsecured Creditors in Todd
McFarlane Productions, Inc.'s chapter 11 case:

        1. Greg Capullo
           5017 Colonial Drive
           Schenectady, New York 12303
           Tel: (518) 357-9265, Fax: (518) 357-9270

        2. Neil Gaiman
           c/o Kenneth F. Levin
           20 N. Wacker Drive, #4200
           Chicago, Illinois 60606
           Tel: (312) 827-9000, Fax: (312) 827-9001

        3. Haberlin Studios Inc.
           Attn: Brian Haberlin
           28411 Rancho De Linda
           Laguna Niguel, California 92677
           Tel: (949) 425-9622, Fax: (949) 425-9623

        4. Comicraft
           Attn: Richard Starkings
           8910 Rayford Drive
           Los Angeles, California 90045
           Tel: (310) 215-0362, Fax: (775) 890-5787

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

Headquartered in Tempe, Arizona, Todd McFarlane Productions, Inc.
-- http://www.spawn.com-- publishes comic books including Spawn,
Hellspawn, & Sam and Twitch.  The Company filed for chapter 11
protection on Dec. 17, 2004 (Bankr. D. Ariz. Case No. 04-21755).
Kelly Singer, Esq., at Squire Sanders & Dempsey, LLP, represents
the Debtor in its restructuring efforts.  When the Company filed
for protection from its creditors it listed more than $10 million
in assets and more than $50 million in debts.


TODD MCFARLANE: Files Schedules of Assets and Liabilities
---------------------------------------------------------
Todd McFarlane Productions, Inc., filed with the U.S. Bankruptcy
Court for the District of Arizona its Schedules of Assets and
Liabilities disclosing:

   Name of Schedule           Assets       Liabilities
   ----------------           ------       -----------
A. Real Property
B. Personal Property         $1,565,199
C. Property Claimed as Exempt
D. Creditors Holding
   Unsecured Priority Claims               $   500,000
E. Creditors Holding Unsecured
   Priority Claims
F. Creditors Holding Unsecured
   Nonpriority Claims                      $15,775,507
                             ----------    -----------
   Total                     $1,565,199    $16,275,507

Headquartered in Tempe, Arizona, Todd McFarlane Productions, Inc.
-- http://www.spawn.com-- publishes comic books including Spawn,
Hellspawn, & Sam and Twitch.  The Company filed for chapter 11
protection on Dec. 17, 2004 (Bankr. D. Ariz. Case No. 04-21755).
Kelly Singer, Esq., at Squire Sanders & Dempsey, LLP, represents
the Debtor in its restructuring efforts.  When the Company filed
for protection from its creditors, it listed more than $10 million
in assets and more than $50 million in debts.


ULTIMATE ELECTRONICS: Taps FTI Consulting as Financial Advisors
---------------------------------------------------------------
Ultimate Electronics, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware for permission to
employ FTI Consulting, Inc., as their financial advisors.

FTI Consulting is expected to:

   a) assess the Debtors' short-term and long-term cash flow
      forecasts and liquidity projections;

   b) analyze the Debtors' business plan in order to evaluate
      restructuring alternatives;

   c) assist the Debtors' management and the Board of Directors in
      contingency planning and analyze current trade support and
      assist management in addressing vendor-related issues;

   d) assess the impact of proposed store closings on the
      Debtors' cash flow projections;

   e) advise the Debtors' management on cash conservation measures
      and assistance with implementation and assist in the
      development and implementation of a store closing process;

   f) assist the Debtors in their discussions and negotiations
      with their lenders including analyzing any proposed
      modifications to existing credit agreements; and

   g) provide other financial advisory services as requested by
      the Debtors' management or the Board of Directors.

Robert J. Duffy, a Senior Managing Director at FTI Consulting,
discloses that the Firm received a $250,000 retainer.

Mr. Duffy reports FTI Consulting's professionals bill:

    Designation                         Hourly Rate
    -----------                         -----------
    Senior Managing Directors           $560 - 625
    Directors/Managing Directors         395 - 560
    Associates/Consultants               195 - 385
    Administration/Paraprofessionals      95 - 168

FTI Consulting assures the Court that it does not represent any
interest adverse to the Debtors or their estates.

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


ULTIMATE ELECTRONICS: Wants to Hire Ordinary Course Professionals
-----------------------------------------------------------------
Ultimate Electronics, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware for permission to
continue to employ, retain and pay professionals they turn to in
the ordinary course of their businesses without bringing formal
employment applications to the Court.

In the day-to-day operation of their businesses, the Debtors
regularly call on various professionals to provide them with
services related to matters arising in the ordinary course of
business.  These services include tax advice and preparation,
legal advice pertaining to commercial, corporate and securities,
regulatory matters and real estate matters, real estate brokerage
and consulting, and information technology consulting.

Because their businesses are huge and complex, the Debtors tell
the Court that it would be costly and inefficient to require them
to file individual employment and compensation applications with
the Court for every Ordinary Course Professional due to the
relatively small fees and few numbers of Professionals they will
retain.

The Debtors assure the Court that:

   a) no Ordinary Course Professional will be paid in excess of
      $30,000 per month and all the Professionals' total fees will
      not exceed in the aggregate of $350,000 during the pendency
      of the Debtor's chapter 11 cases; and

   b) the Debtors will file with the Court every 120 days after
      the Court's order approving the retention of the Ordinary
      Course Professionals a statement containing:

        (i) the name of each Ordinary Course Professional,

       (ii) the aggregate amounts paid as compensation for
            services rendered and reimbursement of expenses
            incurred by the Professionals, and

      (iii) a general description of the services rendered by the
            Professionals.

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

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


UNITEDGLOBALCOM: S&P Places B Rating on CreditWatch Positive
------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on European
cable TV operator UnitedGlobalCom, Inc. -- UGC, including the 'B'
corporate credit rating, and related entities on CreditWatch with
positive implications.  This action follows the announced merger
agreement between UGC and its approximate 53% economic owner
Liberty Media International, Inc. -- LMI.

"If the merger is consummated, ratings on UGC will reflect the
ratings of its new parent, which will incorporate the assets of
LMI," explained Standard & Poor's credit analyst Catherine
Cosentino.  "The rating on the parent entity may be higher than
the current 'B' corporate credit rating on UGC, given its 45%
interest in Japanese cable TV operator Jupiter Telecommunications
Co. Ltd. -- JCOM.  JCOM generates substantial EBITDA and has good
growth prospects relative to that of UGC's European cable
operations, which have been viewed by Standard & Poor's as being
fairly weak."

Standard & Poor's will meet with management to review JCOM's
business strategy, as well as the potential for an initial public
offering at this entity at some point and accompanying prospects
for the post-merger combined company to exert control of JCOM
under terms of the joint venture agreement.  We will also evaluate
the combined company's plans for the significant cash and noncore
monetizable investment balances that are expected to exist
subsequent to the merger, especially in light of management's
indications about prospective share buybacks.


USGEN: Court Okays Sale of Two Hydroelectric Systems for $505 Mil.
------------------------------------------------------------------
Judge Mannes of the U.S. Bankruptcy Court for the District of
Maryland authorizes USGen New England, Inc., to consummate
the sale of two hydroelectric systems spanning the Connecticut
River and the Deerfield River to TransCanada Hydro Northeast,
Inc., for $505,000,000, subject to adjustment.  TransCanada will
also assume certain contracts, leases, and liabilities in
connection with the sale.  The Asset Purchase and Sale Agreement,
as amended, among USGen, USG Services Company, LLC, a non-debtor
affiliate, and TransCanada is approved.

As reported in the Troubled Company Reporter on Dec. 27, 2004,
USGen New England, Inc., and an affiliate of TransCanada
Corporation announced that TransCanada will purchase hydroelectric
generation assets with a total generating capacity of
567 megawatts -- MW -- for $505 million US in cash, subject to
adjustment.  No qualified competing bids were received by the
court-ordered deadline so the auction did not take place.

The purchase is subject to the sale of the 49 MW Bellows Falls
hydroelectric facility to the Vermont Hydroelectric Power
Authority, which will result in a $72 million US reduction in
purchase price.

Headquartered in Bethesda, Maryland, USGen New England, Inc., an
affiliate of PG&E Generating Energy Group, LLC, owns and operates
several electric generating facilities in New England and
purchases and sells electricity and other energy-related products
at wholesale.  The Debtor filed for Chapter 11 protection on
July 8, 2003 (Bankr. D. Md. Case No. 03-30465).  John E. Lucian,
Esq., Marc E. Richards, Esq., Edward J. LoBello, Esq., and Craig
A. Damast, Esq., at Blank Rome, LLP, represent the Debtor in its
restructuring efforts.  When it sought chapter 11 protection, the
Debtor reported assets amounting to $2,337,446,332 and debts
amounting to $1,249,960,731.


VALOR COMMS: S&P Puts BB- Rating on Planned $965M Sr. Sec. Debt
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' corporate
credit rating to Valor Communications Group, Inc., which will
become the new parent company of Valor Telecommunications LLC upon
the successful completion its initial public offering.  The
outlook is negative.

Simultaneously, Standard & Poor's assigned its 'BB-' rating to
Valor Telecommunications Enterprises LLC's -- VTE -- proposed
$965 million senior secured bank facility.  A recovery rating of
'3' also was assigned to the bank loan, indicating the expectation
for a meaningful recovery of principal (50%-80%) in the event of a
default or bankruptcy.  VTE is an indirect subsidiary of Valor.
Closing of the IPO is contingent upon completion of the new credit
facility.

In addition, Standard & Poor's assigned its 'B' rating to the
$280 million senior unsecured notes due 2015, to be issued under
Rule 144A with registration rights by VTE and Valor
Telecommunications Enterprises Finance Corp. -- co-issuers.  The
IPO is not contingent upon the issuance of these notes.

Cash proceeds of about $500 million from the IPO will be used to
pay down the company's second-lien loan and senior subordinated
loan.  Proceeds from the new bank facility and senior unsecured
notes will be used to repay the existing term loan.  Ratings on
the existing second-lien loan, senior subordinated loan, and
senior secured term loan will be withdrawn upon completion of the
proposed transactions.  In addition, the corporate credit rating
on Valor Telecommunications Enterprises LLC and Valor
Telecommunications Enterprises LLC II will be withdrawn due to the
guarantees provided by the new parent company of these
subsidiaries' debt.  If the proposed transactions are not
completed, existing ratings will remain at their current levels;
therefore, these ratings were removed from CreditWatch.

"The new ratings reflect the deleveraging impact of the proposed
IPO," said Standard & Poor's credit analyst Rosemarie Kalinowski.
"However, the negative outlook assigned to Valor addresses the
potential longer-term impact of cable telephony on the company's
competitive position."  Pro forma for the transactions, total debt
outstanding was about $1.2 billion as of Sept. 30, 2004.  Valor
plans to pay a significant annual dividend of about 75% of free
cash flow.


VISTA GOLD: Luzon Exercises Option to Purchase Bolivia Project
--------------------------------------------------------------
Luzon Minerals Ltd. has informed Vista Gold Corp. (AMEX: VGZ; TSX:
VGZ) that it wishes to exercise its option to purchase Vista's
Amayapampa gold project in Bolivia.

Mike Richings, Vista President and CEO, stated, "We are very
pleased that Luzon has decided to proceed, although the bankable
project feasibility study is still in the final stages of
completion.  We also wish to congratulate Luzon on achieving a
major milestone in the development of this excellent project by
reaching a socio-economic agreement with the local communities
affected by the proposed development."

Also, the companies have agreed, subject to regulatory approval,
to further amend the terms of the original purchase option
agreement with respect to the payments previously due on
Jan. 15, 2005, and Jan. 1, 2006.  The amended agreement calls for
Vista to receive from Luzon, within 5 business days of receiving
TSX Venture Exchange approval, a payment consisting of US$100,000
and 2,000,000 Luzon common shares.  This will be followed, on the
earlier of June 15, 2005, or the date of the next financing
completed by Luzon after Jan. 19, 2005, by a payment of US$850,000
in cash or, at Luzon's option, US$425,000 in cash and US$425,000
in units consisting of Luzon common shares and warrants to
purchase common shares.

The final payment will be made at the earlier of the start of
construction or June 15, 2006.  This payment remains unchanged
from the original agreement, as reported in December 2003, in that
Luzon will pay Vista US$4,000,000 in cash, or at Vista's option, a
combination of Luzon common shares and cash based on Luzon's share
price.  If Luzon completes the purchase, and when production
commences, Vista will also receive a 3% net smelter type royalty
on gold production at gold prices of US$450 per ounce or below and
4% at gold prices above US$450 per ounce.  Other terms of the
agreement remain unchanged.

                       About the Company

Vista Gold Corp., based in Littleton, Colorado, evaluates and
acquires gold projects with defined gold resources.  Additional
exploration and technical studies are undertaken to maximize the
value of the projects for eventual development.  The Corporation's
holdings include the Maverick Springs, Mountain View, Hasbrouck,
Three Hills, Wildcat projects and Hycroft mine, all in Nevada, the
Long Valley project in California, the Yellow Pine project in
Idaho, the Paredones Amarillos and Guadalupe de Los Reyes projects
in Mexico, and the Awak Mas project in Sulawesi in Indonesia.

                          *     *     *

As reported in the Troubled Company Reporter on April 1, 2004,
Vista Gold's independent auditors expressed doubt about the
company's ability to continue as a going concern after reviewing
its financial statements for the year ending Dec. 31, 2003.

In its Form 10-Q for the quarterly period ended Sept. 30, 2004,
filed with the Securities and Exchange Commission, Vista Gold
reported a $1,047,000 net loss for the three months ended
September 2004, compared to a $531,000 net loss from the same
period in September 2003.


VITAL LIVING: Deficit & Funding Concerns Spur Going Concern Doubt
-----------------------------------------------------------------
Vital Living, Inc., has suffered recurring losses from operations,
has a working capital deficit, and is dependent on funding from
sources other than operations.  Since inception, the Company has
been required to raise additional capital by the issuance of both
equity and debt instruments.  There are no commitments from
funding sources, debt or equity, should cash flows be insufficient
to fund ongoing operations or other cash commitments as they come
due.  These factors raise substantial doubt about the Company's
ability to continue as a going concern.

At September 30, 2004, the Company had cash of $210,326, including
approximately $275,000 of cash in escrow, that was to be used to
make the remaining 2004 interest payments on its December 2003
Senior Secured Convertible Notes.  In October 2004, approximately
$275,000 of cash held in escrow was released to the Company as a
result of an agreement reached with the holders of its senior
secured convertible notes to reduce the conversion price of the
notes and exercise prices of certain warrants held by these
holders.

As of September 30, 2004, the Company's subsidiaries' total asset
and liabilities were $57,378 and $2,873,214, respectively.  As of
December 31, 2003, those total assets and liabilities were
$1,212,813 and $3,262,417, respectively.  For the three and nine
months ended September 30, 2004, total revenues for the
subsidiaries were $52,809 and $1,502,788, respectively.  For the
comparative three and nine-month period of 2003, subsidiaries'
total revenues were $821,049 and $1,588,232, respectively. The
Company's net loss for the quarters ended September 30, 2004, and
2003 was $2,719,949 and $11,437,637, respectively, for a decrease
of $9,137,485.  A majority of the reduction relates the net
effects of downward repricing adjustments.

Management will be required to raise additional capital in the
near term through offerings of securities to fund operations.  No
assurance can be given that the financing will be available or, if
available, that it will be on commercially favorable terms.
Moreover, available financing may be dilutive to current
investors.

The Company is in the process of improving, acquiring, or
developing products for sale that would generate revenue to
sustain its operations, as well as consolidating its operations in
order to gain cost synergies and efficiencies.  If successful,
these actions will serve to mitigate the factors that have raised
doubt about the Company's ability to continue as a going concern
and increase the availability of resources for funding of the
Company's current operations and future market development.  In
addition, the Company has been reliant on additional sales of its
securities to raise capital in order to sustain operations during
the nine months ended September 30, 2004.  The Company expects to
continue relying on additional sales of its securities in order to
fund future operations.

Through its operating subsidiaries, Vital Living Inc. develops or
licenses nutraceuticals and proprietary drug delivery systems that
can be applied to its nutraceuticals, marketing them for
distribution through physicians, medical groups, chiropractic
offices, and retail outlets.  In addition, the Company formulates,
markets, and distributes vitamins, herbs, high quality dietary
supplements, and therapeutic and functional food products through
similar distribution channels.  Nutraceuticals are products that
are isolated or purified from foods and generally sold in
medicinal forms not usually associated with foods, including
tablets, capsules, or drops.  These nutraceuticals may have
physiological benefits or have the ability to reduce the risk of
chronic disease beyond basic nutritional products. Vital Living
develops and tests its nutraceuticals in collaboration with
leading medical experts in the nutraceuticals field.  The Company
has designed them to be incorporated by physicians into a standard
physician-patient program in which patients supplement
doctor-prescribed pharmaceuticals with Vital Living
nutraceuticals.


W.R. GRACE: Gets Court Nod to Advance Payments for Legal Expenses
-----------------------------------------------------------------
W.R. Grace & Co., and its debtor-affiliates and seven of their
current and former officers, directors and employees have received
letters from the United States Department of Justice, District of
Montana, advising them that they are the target of a pending
federal grand jury investigation.  The Investigation is looking
into whether W.R. Grace & Co. was involved in obstructing agency
proceedings, violating federal environmental laws, and conspiring
with others to violate federal law.  The Target Letter apparently
concerns alleged conduct that was taken by the Debtors with
respect to their operations in Libby, Montana.

The Target Letter does not state the date of the alleged conduct
that is being investigated by the Federal Grand Jury.  However,
the Debtors believe that most of the alleged conduct under
investigation occurred before the Petition Date.

In response to the Target Letter, the Debtors' counsel asked for
additional time for the Debtors and the Individual Targets to
respond.  However, the federal government was concerned that, if
the Named Parties were afforded additional time to respond, then
applicable statutes of limitation could lapse.  Accordingly, the
federal government requested that each Named Party execute a
tolling agreement.  The Tolling Agreement tolls any applicable
statutes of limitation until December 2, 2004.  The Debtors
understand that each of the other Named Parties is considering
executing the Tolling Agreement, but they are each seeking to
retain counsel to advise them on the matter.

Accordingly, the Debtors sought and obtained the U.S. Bankruptcy
Court for the District of Delaware's authority to advance payments
for any reasonable legal expenses for legal services provided to
their current or former officers, directors and employees involved
with the Investigation and any action that may arise from, or is
related to, the Investigation.

The advance payments are necessary because:

    (a) Pursuant to its Certificate of Incorporation and By-laws,
        W.R. Grace has an obligation to indemnify its officers,
        directors and employees to the fullest extent allowed
        under Delaware law.  This indemnification is permitted by
        the Delaware General Corporation Law;

    (b) The Debtors have a direct interest in seeing that the
        Individual Targets receive adequate protection because the
        Investigation concerns actions that the Individuals took
        while serving as officers, directors and employees of the
        Debtors.  W.R. Grace & Co., itself, has also received a
        target letter.  Thus, the Debtors' defense in the
        Investigation is inextricably tied with the defense of
        each individual, and any adverse factual findings made
        during the Investigation could adversely affect their
        estates.

    (c) The Investigation has targeted persons in key management
        positions.  It is in the Debtors' best interest to see
        that these parties receive adequate legal representation
        because this treatment will maintain employee moral.
        This, in turn, will allow the Debtors to attract and
        maintain well-qualified individuals for these positions.
        A successful reorganization of the Debtors is dependent on
        attracting and retaining these individuals.

    (d) The advance payment is consistent with the first-day
        relief that was granted in the Debtors' Chapter 11 cases,
        by which the Bankruptcy Court authorized the Debtors to
        pay certain prepetition claims for, among other items,
        wages, salaries, commissions, bonuses and other
        compensation.

    (e) The individuals that have received target letters may not
        possess the funds to pay for their legal defenses, and, in
        any event, the risk of non-payment will make it difficult
        for them to retain adequate legal representation during
        the Investigation.

The advance amounts will be paid, subject to potential undertaking
that would be held by the Debtors, at the conclusion of the
Investigation, in the event that any of the Individuals are found
to have acted in a manner that would not permit the Debtors to
indemnify them under Delaware law.

Headquartered in Columbia, Maryland, W.R. Grace & Co., --
http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally.  The Company and its
debtor-affiliates filed for chapter 11 protection on April 2, 2001
(Bankr. Del. Case No. 01-01139).  James H.M. Sprayregen, Esq., at
Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, represent the Debtors in
their restructuring efforts.  (W.R. Grace Bankruptcy News, Issue
No. 77; Bankruptcy Creditors' Service, Inc., 215/945-7000)


WISTON XIV: Wants to Hire Brashear & Ginn as Bankruptcy Counsel
---------------------------------------------------------------
Wiston XIV Limited Partnership asks the U.S. Bankruptcy Court for
the District of Nebraska for permission to retain Brashear & Ginn
as its bankruptcy counsel.

Brashear & Ginn is expected to:

     a) give the Debtor legal advice with respect to its powers
        and duties, as debtor-in-possession in the continued
        operation of its business and in the management and
        liquidation of its property;

     b) prepare on the Debtor's behalf all the necessary legal
        documents;

     c) prepare and file a plan of reorganization and
        accompanying disclosure statement; and

     d) perform all other legal services for the Debtor as may
        be reasonably requested by the Debtor.

Robert V. Ginn, Esq., at Brashear & Ginn, discloses that the
Debtor will pay him at his current hourly billing rate of $130 to
$235.

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

Headquartered in Stilwell, Kansas, Wiston XIV Limited Partnership
filed for chapter 11 protection on Jan. 5, 2005 (Bankr. D. Nebr.
Case No. 05-80037).  When the Debtor filed for protection from its
creditors, it estimated assets between $10 million and $50 million
and estimated debts from $10 million to $50 million.


WISTON XIV: Look for Bankruptcy Schedules by February 21
--------------------------------------------------------
The Honorable Timothy J. Mahoney of the U.S. Bankruptcy Court for
the District of Nebraska gave Wiston XIV Limited Partnership until
February 21, 2005, to file its Schedules of Assets and Liabilities
and Statement of Financial Affairs.

The Debtor needs more time to assemble all the necessary data to
accurately prepare its Schedules and Statement.

Headquartered in Stilwell, Kansas, Wiston XIV Limited Partnership
filed for chapter 11 protection on Jan. 5, 2005 (Bankr. D. Nebr.
Case No. 05-80037).  Robert V. Ginn, Esq., at Brashear & Ginn,
represents the Debtor in its restructuring efforts.  When the
Debtor filed for protection from its creditors, it estimated
assets between $10 million and $50 million and estimated debts
from $10 million to $50 million.


WORLDCOM INC: 10 Directors Settle Class Action for $54 Million
--------------------------------------------------------------
David Rovella at Bloomberg News reports that 10 former WorldCom
directors will settle their alleged liabilities in a class action
lawsuit led by the New York State Common Retirement Fund, for $54
million.

The directors are among the defendants being sued for an alleged
$11 billion accounting fraud.  The 10 directors are:

   (1) James C. Allen,
   (2) Judith Areen,
   (3) Carl J. Aycock,
   (4) Max E. Bobbit,
   (5) Clifford L. Alexander,
   (6) Stiles A. Kellett, Jr.,
   (7) Gordon S. Macklin,
   (8) John A. Porter,
   (9) Lawrence C. Tucker, and
  (10) the estate of John W. Sidgmore

Bloomberg reports that at New York Comptroller Alan Hevesi's
insistence, 20% of the settlement amount, totaling $18 million,
will be taken out of the ex-WorldCom directors' pockets.  The
remaining $36 million will be credited to the directors' liability
insurance.

"We insisted, despite some legal cautions, that there be personal
liability," Mr. Hevesi said in a news conference in New York.
"We felt it would be unfair and not a deterrent to future failure
on the part of directors."

The NY Retirement Fund is the second largest pension fund in the
U.S., and Mr. Hevesi is the sole trustee under the Fund.

Judge Denise Cote has set a hearing on February 28, 2005, at the
U.S. District Court for the Southern District of New York to
consider approval of the settlement.

Two former WorldCom directors remain in the lawsuit, Bert Roberts
and Francesco Galesi.

                    Banks Criticize Settlement

JP Morgan Chase & Co., Bank of America Corp. and 14 other bank
defendants insist that the $54 million settlement with the
directors is flawed, David Gloving at Bloomberg News says.  The
banks want the directors to be included in the February 28 trial.

                         Other Reactions

In an interview with Bloomberg, securities lawyer Robert Mintz
said the $54 million settlement would put pressure on the bank
defendants, like JPMorgan and Bank of America, to also settle with
the WorldCom investors before the February 28 trial.

Michael Klausner, a law professor at Stanford University, told
The New York Times that the settlement could discourage people
from serving on boards.

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)


WORLDCOM INC: Supreme Court Denies Certiorari to Calpers, et al.
---------------------------------------------------------------
The United States Supreme Court affirms a ruling by the Court of
Appeals for the Second Circuit that the U.S. District Court for
the Southern District of New York holds jurisdiction over
individual claims filed by WorldCom bondholders pursuant to
Section 22(a) of the Securities Exchange Act of 1933.

The Supreme Court denies certiorari to California Public
Employees' Retirement System and other pension funds that
purchased WorldCom bonds and brought individual actions in state
courts, rather than joining a consolidated class action suit
pending before the District Court.

The funds, Greg Stohr at Bloomberg News says, now must choose
between joining the Consolidated Class Action and waiting
potentially years for that case to be resolved before they can
press their claims separately in federal court.

The Supreme Court's decision was issued without comment.

The funds are represented by Milberg Weiss Bershad Hynes &
Lerach.

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)


ZALE LIPSHY: Moody's Withdraws Ba3 Bond Rating After Full Funding
-----------------------------------------------------------------
Moody's Investors Service has withdrawn the Ba3 rating assigned to
Zale Lipshy University Hospital's Series 1997 Bonds (approximately
$45.3 million outstanding) issued through the North Central Texas
Health Facilities Authority.  This action follows the receipt of
the final defeasance verification report, which evidences the
fully funded escrow account for the Series 1997 bonds.  Zale
Lipshy University Hospital has no other outstanding debt rated by
Moody's.  The hospital is now wholly owned by University of Texas
Southwestern Medical School.


* Goodwin Procter Adds 24 Partners to Boston Office
---------------------------------------------------
Goodwin Procter LLP, one of the nation's leading law firms with
575 attorneys, added 24 partners to its Boston office.  Nineteen
of the partners join the firm from Testa, Hurwitz & Thibeault, and
five of the partners join the firm from McDermott, Will & Emery.

The majority of the partners joining the firm specialize in
serving clients in the technology industry, with 10 of the new
partners focusing exclusively in this space.

  * Technology Companies   William J. Schnoor, Jr., Mark J.
    Practice               Macenka, Jocelyn M. Arel, John M.
                           Mutkoski, Kenneth J. Gordon and Mark T.
                           Bettencourt (from Testa Hurwitz)

                           John J. Egan III, Jack B. Steele,
                           Robert E. Bishop and Christopher E.
                           Brown (from McDermott, Will & Emery)

  * Buyouts and Mergers &  Mark H. Burnett and Kathy A. Fields
    Acquisitions           (from Testa Hurwitz) David J. Powers
                           (from McDermott, Will & Emery)

  * Life Sciences          Lawrence S. Wittenberg and Mitchell S.
                           Bloom (from Testa Hurwitz)

  * Intellectual Property  Douglas J. Kline, Steven J. Frank,
                           Christopher W. Stamos, Duncan A.
                           Greenhalgh, Ph.D. and Richard Myrus
                           (from Testa Hurwitz)

  * Securities Litigation  Brian E. Pastuszenski and Deborah S.
                           Birnbach (from Testa Hurwitz)

  * White Collar Crime &   Joseph F. Savage, Jr. and John J.
    Government             Falvey, Jr. (from Testa Hurwitz)
    Investigations

"These are some of the finest attorneys serving clients in the
technology industry today," said Regina M. Pisa, chairman and
managing partner of Goodwin Procter.  "Goodwin Procter's long-term
strategy is built upon a framework of strategic investment in key
practices, such as technology companies, a balanced practice mix,
and geographic growth.  The addition of these 24 partners to our
firm is a dynamic combination which creates a powerful platform
from which to better serve our clients and clearly supports our
overall strategic objectives."

The new partners include former chairs and co-chairs of Testa's
Mergers & Acquisitions, Corporate Finance, Life Sciences,
Securities Litigation and White Collar Crime practice groups.  All
of the partners from McDermott, Will & Emery are returning to
Goodwin Procter - four of the five began their careers at the
firm, including John Egan, global head of McDermott's Private
Equity/Emerging Companies Group.

"In addition to technology, we are committed to growing our life
sciences practice in Boston," said Mr. Pisa.  "The backgrounds of
our new life sciences and intellectual property partners,
including many with chemistry, biochemistry and mechanical
engineering degrees, is consistent with the requirements of this
market."

Eighteen partners are joining Goodwin Procter's Business Law
Department and six partners are joining its Litigation Department.
The firm expects to hire a number of associates as well.

The new Litigation partners bring significant expertise in
securities litigation, white collar crime, and intellectual
property, which will further advance Goodwin Procter's existing
practices in these areas.

"We are honored to welcome attorneys of this caliber and national
reputation to the firm," said Mr. Pisa.  "The extraordinary amount
of experience these partners bring to Goodwin Procter will
transform our firm into a literal powerhouse in many of our
strategic focus areas."

Goodwin Procter developed a long-term strategic plan which it has
been executing against since 2001 which focuses primarily on four
overall goals: (1) expand in its key geographic markets - Boston,
New York and Washington, DC - and explore new ones, primarily on
the West Coast; (2) establish dominance within its areas of
strategic practice focus - private equity & technology companies,
intellectual property, financial services, real estate capital
markets, and products liability - allowing the firm to move
quickly when opportunities arise and creating critical mass to
bring a depth of resources to its clients; (3) foster innovation
within the firm and encourage and support the development of new
practices, technologies and services; and (4) maintain a balanced
practice mix that ensures the firm's ability to weather economic
cycles and market shifts.

As part of this growth initiative, the firm recently announced its
combination on October 1, 2004, with Shea & Gardner, a premiere
litigation firm, in Washington, DC.  As a result of this
combination, Goodwin Procter's Washington office stands at 85
attorneys today. In addition, the firm has grown its New York
office from 10 attorneys in 1999 to more than 100 currently.

"We are not a firm that is interested in expanding for expansion's
sake, nor are we interested in being the largest, or having the
most offices," said Pisa. "Our goal is to remain rigorously
focused on those things which matter to our clients and impact our
ability to serve those clients and to provide our people with
continued opportunity for challenging work and career
advancement."

                          New Partners

Technology Companies Practice:
(from Testa, Hurwitz & Thibeault)

   -- Jocelyn M. Arel expertise lies in corporate and securities
      law matters, with an emphasis on securities offerings and
      merger and acquisition transactions.  She was co-chair of
      Testa, Hurwitz & Thibeault's Corporate Finance and
      Securities Group.

   -- Mark T. Bettencourt concentrates in general corporate and
      securities law with extensive experience in mergers and
      acquisitions, public offerings, private placements of debt
      and equity securities, securities law compliance, and
      technology transfer and licensing.  He was co-chair of
      Testa, Hurwitz & Thibeault's Corporate Finance and
      Securities Group.

   -- Kenneth J. Gordon has more than 13 years of experience
      representing privately held and publicly traded companies,
      investment banks and venture capital firms.  He focuses his
      practice on the representation of emerging and public growth
      companies.

   -- Mark J. Macenka has more than 20 years of experience in the
      areas of business and securities law, mergers and
      acquisitions and venture capital and corporate finance.  He
      represents public and private growth oriented companies in
      emerging and high technology industries, as well as venture
      capital firms and investment banks.

   -- John M. Mutkoski concentrates his practice in general
      corporate and securities law with significant experience in
      public offerings, private placements of securities, mergers
      and acquisitions, SEC compliance, and technology licensing
      and joint ventures.

   -- William J. Schnoor Jr. focuses his practice in the area of
      business and securities law, private equity and
      acquisitions.  He has 20 years' experience in representing
      start-up, private and public companies in a wide range of
      industries.  He has worked with numerous companies from
      their initial financing through successful initial public
      offerings or acquisitions.

(from McDermott, Will & Emery)

   -- Robert E. Bishop advises clients on a wide variety of
      corporate and securities transactions, including private
      placements, public and private mergers and acquisitions and
      registered offerings of securities, as well as technology
      licensing and general business matters.

   -- Christopher E. Brown represents private equity firms and
      venture capital funds in early and later stage investments,
      leveraged buyouts, recapitalizations and venture capital
      fund formation and capital raising.  He also represents
      emerging and established private and public companies in a
      wide variety of corporate and securities law matters
      including private and public securities offerings and
      mergers and acquisitions.

   -- John J. Egan III focuses on corporate securities, private
      equity and technology enterprises.  His practice involves
      early and late-stage venture financings, IPOs, mergers and
      acquisitions, joint ventures, strategic licensing and the
      general representation of public and private technology
      companies.  While at McDermott, Will & Emery, Egan was
      global head of the firm's Private Equity/Emerging Companies
      Group.

   -- Jack B. Steele works on a wide variety of corporate and
      securities law matters, including public offerings and
      private placements of securities, mergers and acquisitions,
      venture capital investments and general business
      representation.

Buyouts and Mergers & Acquisitions:
(from Testa, Hurwitz & Thibeault)

   -- Mark H. Burnett focuses primarily on business, corporate and
      securities law matters, mergers and acquisitions, and
      corporate finance and venture capital transactions.  He was
      co-chair of Testa, Hurwitz & Thibeault's Mergers and
      Acquisitions Core Competency Group.

   -- Kathy A. Fields' practice concentrates on acquisitions and
      corporate and securities law. She has represented numerous
      public and private companies and venture capital firms in
      mergers and acquisitions, including acquisitions in advance
      of Chapter 11 filings, cross-border transactions, tender
      offers and going private transactions.  While at Testa,
      Hurwitz & Thibeault, she was co-chair of its Mergers and
      Acquisitions Group.

(from McDermott, Will & Emery)

   -- David J. Powers represents private equity firms, venture
      capital funds and emerging and established private and
      public companies on a wide variety of corporate and
      securities law matters.  His practice includes
      representation in connection with public offerings and
      private placements of securities, mergers and acquisitions,
      buyouts and leveraged recapitalizations.

Life Sciences:
(from Testa, Hurwitz & Thibeault)

   -- Mitchell S. Bloom concentrates in general corporate and
      securities law with extensive experience in representing
      public and private life science companies, public offerings,
      venture capital investments, mergers and acquisitions, and
      technology licensing and collaborations.  He was co-chair of
      Testa, Hurwitz & Thibeault's Life Sciences Practice.

   -- Lawrence S. Wittenberg has been an active participant in the
      life sciences industry since the mid-1980s, and his practice
      focuses exclusively on biotechnology and other life sciences
      companies.  His clients range in size from start-ups to
      public companies.  He was chairman of the Life Sciences
      Practice at Testa, Hurwitz & Thibeault.

Intellectual Property:
(from Testa, Hurwitz & Thibeault)

   -- Steven J. Frank focuses on advising clients in all areas of
      intellectual property law, with emphasis on patent
      prosecution, analysis of infringement and related issues,
      copyright questions, and the drafting and negotiation of
      agreements relating to the transfer or license of
      intellectual property.

   -- Duncan A. Greenhalgh, Ph.D. specializes in the protection
      and enforcement of intellectual property rights primarily in
      the field of life sciences, and represents private and
      publicly traded companies, and medical and academic
      institutions.

   -- Douglas J. Kline concentrates his practice on all aspects of
      intellectual property litigation, particularly patent
      infringement matters and other disputes related to the
      enforcement of intellectual property rights.  While at
      Testa, Hurwitz and Thibeault, he chaired the firm's Patent
      and Intellectual Property Practice and Intellectual Property
      Litigation Groups.

   -- Richard Myrus focuses his practice on litigation matters.
      Prior to entering law school, he served as a helicopter
      pilot in the United States Navy.

   -- Christopher W. Stamos has experience in patent and trade
      secret matters, patent portfolio development, licensing,
      preparation of novelty assessments, preparation and
      prosecution of U.S. and foreign patent and trademark
      applications, and preparation of validity and infringement
      opinions.

Securities Litigation:
(from Testa, Hurwitz & Thibeault)

   -- Deborah S. Birnbach concentrates her practice in the areas
      of securities litigation, including class action defense,
      stockholder disputes, fiduciary duty claims and private
      equity litigation, and represents clients in unfair
      competition disputes, license agreement disputes, M&A-
      related litigation, intellectual property and trade secret
      litigation.

   -- Brian E. Pastuszenski has achieved national prominence in
      the defense of securities class action and shareholder
      litigation matters and proceedings brought by the SEC and
      other regulatory organizations and the related corporate
      governance, insurance and indemnification issues that such
      matters involve.  While at Testa, Hurwitz & Thibeault, he
      was chair of the firm's Securities and Shareholder
      Litigation Group and co-chair of its Corporate Finance and
      Securities Group.

White Collar Crime & Government Investigations:
(from Testa, Hurwitz & Thibeault)

   -- John J. Falvey Jr.'s practice specializes in white collar
      criminal defense, governmental investigations, and complex
      civil litigation.  His criminal and regulatory practice
      includes the representation of individuals and companies in
      SEC and criminal fraud investigations, conducting internal
      investigations and establishing compliance programs.

   -- Joseph F. Savage Jr. concentrates his practice on complex
      civil litigation, white collar criminal defense and
      governmental investigations.  His practice involves
      representing individuals and companies in a wide variety of
      fraud, tax, public corruption, health care, securities,
      environmental and other investigations by federal, state and
      local law enforcement and government regulators.

                    About Goodwin Procter LLP

Goodwin Procter LLP is one of the nation's leading law firms.  The
firm's core areas of practice are corporate, litigation and real
estate, with specialized areas of focus that include private
equity & technology companies, intellectual property, financial
services, real estate capital markets, and products liability.
Goodwin Procter is headquartered in Boston, with offices in New
York, New Jersey and Washington, DC.


* K&R Law Group Names C. Faber & R. Kessler Los Angeles Partners
----------------------------------------------------------------
K&R Law Group LLP, a Los Angeles-based law firm that has one of
the nation's largest groups of experienced attorneys fully
dedicated to serving the health care industry, named two attorneys
partners in its Los Angeles office.

The new partners are: Cameron H. Faber, a health care and
insurance coverage litigator; and Robert M. Kessler, a health care
regulatory and business transactions attorney.

"We're delighted to promote these two outstanding attorneys to the
partnership of the firm because their hard work, legal skills and
sound judgment exemplify the kind of valuable legal counsel our
firm provides to clients," said Michael C. Foster, managing
partner of K&R Law Group.  "We look forward to Cameron and
Robert's ongoing contributions to the growth and success of the
firm."

Mr. Faber has performed all aspects of commercial litigation in
state and federal courts, including jury trials, bench trials and
arbitrations. He has handled health care, insurance coverage,
environmental, real property, trademark, contract and bankruptcy
litigation for a wide range of clients.  Mr. Faber earned his law
degree from Loyola Law School in Los Angeles and his undergraduate
degree from the University of California at Los Angeles.

Mr. Kessler practices health care law, representing a number of
venture-backed and publicly traded emerging health care technology
companies, managed care organizations, health care systems and
health care providers.  He advises clients on business and
regulatory matters, with an emphasis on state and federal laws
relating to operational issues, including structuring health care
businesses, regulatory and corporate compliance programs,
licensure and certification, and risk-sharing arrangements.  Mr.
Kessler earned his law degree from Chicago-Kent College of Law and
his undergraduate degree from the University of Southern
California.

Founded in 1977, K&R Law Group LLP -- http://www.knrlaw.com/-- is
a key advisor to the health care industry.  K&R specializes in
representing quality health care organizations, such as health
plans and other managed care organizations, insurance companies,
physician groups and pharmacy benefit managers.


* BOOK REVIEW: Debtors and Creditors in America
-----------------------------------------------
Author:     Peter J. Coleman
Publisher:  Beard Books
Softcover:  303 pages
List Price: $34.95

Order your personal copy at:
http://amazon.com/exec/obidos/ASIN/189312214x/internetbankrupt

Review by Susan Pannell

Suppose that, three hundred or so years ago, you were in urgent
need of a pig.  But you couldn't afford the pig, so you purchased
it on credit. (Yes, there was credit in the woodsy days of this
country; it wasn't strictly a cash and barter economy.) Sometime
later, the pig having served the purpose for which it was intended
and hence being no longer recoverable, and you not being the
winner of the lottery you'd relied upon to pay your debt, the
creditor seeks satisfaction.

He could proceed against you in a couple of different ways, but
either way, assuming you still hadn't won the lottery, you went to
jail.  And there you rotted, unless you had the means to buy your
way out, in which case you wouldn't be there in the first place.
In a notorious perversion of logic, a debtor, like any other
prisoner, was expected to feed and clothe himself while
incarcerated.  A pauper's grave--the so-called potter's field--
awaited the debtor who died in prison. It could have been worse:
under ancient Roman law, creditors were entitled to chunks of your
actual body and--sorry, Will Shakespeare--there was no penalty for
hacking off a disproportionate slice.

What changed this nefarious system? Not sentiment (at least not
primarily), but hard economic facts.  For one thing, it was an
ineffective arrangement.  The creditor derived malicious
satisfaction from watching his debtor fade away in prison, but
they didn't satisfy the debt.  For another thing, the colonies
suffered a chronic people shortage.  They needed laborers and
militiamen.  Society couldn't afford to lose the prisoner's labor,
or his ability to shoulder a musket and defend against Indian
attacks. Nor could society afford to support the innocent wife and
children "perishing with hunger & Cold" (here's where sentiments
entered into the equation).

The system began to be modified in various ways.  For some
categories of debtors, commonly single men who owed little, some
colonies substituted indentured service for imprisonment.  Another
modification, applicable to petty debts, provided a release from
prison and immunity from rearrest if the debtors swore he was
impoverished--presumably a more effective deterrent centuries ago
when there was true shame associated with being a deadbeat.  A
third modification put clothing, furniture, eating utensils, and
tools beyond the reach of agreement.

None of this was of any help to the larger defaulters, the
businessmen, and it was for their benefit (economic necessity,
again) that colonial bankruptcy laws began to evolve.
Interestingly, the colonies preferred voluntary proceedings,
giving the right of action to the insolvent, in contrast to
English bankruptcy practice, which sided with the creditor.
Development of bankruptcy relief was by no means smooth as
predictably many stern and rockbound colonists took a moral stance
against it.  Complicating matters was the requirement that, until
the Revolution, a debtor relief law, like any colonial
legislation, had to be approved by the Crown, in this case the
Board of Trade.

The author provides a painstaking region-by-region analysis of the
development of bankruptcy law, and sums up all the history in the
concluding chapter.


                          *********

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.


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