TCR_Public/050128.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 28, 2005, Vol. 9, No. 23

                          Headlines

ABITIBI-CONSOLIDATED: Incurs $108 Million Net Loss for 4th Quarter
ADESA INC: Subsidiary Expands Salvage Auction Business
AIRGAS INC: Earns $23 Million of Net Income in Third Quarter
AIRGATE PCS: 97% of Noteholders Agree to Amend 9.375% Indenture
ALASKA COMMS: Gets Requisite Consents to Amend Sr. Note Indentures

ALISON GEM: Wants to Hire Klestadt & Winters as Bankruptcy Counsel
AMERICAN BUSINESS: Nasdaq Delists Common Shares
AMERICAN BUSINESS: Wants to Maintain Cash Management System
AMERICAN COMMERCIAL: Judge Lorch Confirms Amended Chapter 11 Plan
AMERICAN COMMERCIAL: Moody's Rates Planned $200M Sr. Notes at B3

AMERICREDIT CORP: Prices $900 Million Asset-Backed Securitization
ARGOSY GAMING: Hosting 2004 Results Conference Call on Feb. 9
ARMSTRONG WORLD: Creditors Transfer 18 Trade Claims
ATA HOLDINGS: Reduces Indianapolis Operations Due to Tight Market
BJ SERVICES: Files Form 10-K Annual Report with SEC

BOWATER INC: Declares $0.20 per Common Share Quarterly Dividend
BURLINGTON INDUSTRIES: BII Trust Files 2004 Status Report
CATHOLIC CHURCH: Spokane Tort Committee Wants to Retain Riddell
CATHOLIC CHURCH: Spokane Claimants Wants to Conduct Examination
CONEXANT SYSTEMS: Records $120.7 Million First Quarter Net Loss

COMPUTER ASSOCIATES: Updates Full Fiscal Year 2005 Guidance
COPYTELE INC: Auditors Raises Going Concern Doubt
DEL MONTE: Fitch Rates $250MM 6-3/4% Sr. Subordinated Notes at BB-
DEL MONTE: S&P Rates Proposed $950M Senior Sec. Facility at BB
DESA HOLDINGS: Files First Amended Joint Liquidating Plan

DOMTAR INC: Canadian Dollar Appreciation Lowers Profit by $175M
E*TRADE FINANCIAL: Posts $98.4M Net Income for 2004 4th Quarter
EASTMAN HILL: Moody's Junks Class B-1 Notes & Securities
FAIRFAX FINANCIAL: Will Webcast Year-End Results on February 11
FEDERAL-MOGUL: Dr. Peterson Says T&N Asbestos Liability is $11BB

FIBERMARK INC: Confirmation Hearing Continued to February 28
FIDELITY NATIONAL: Fitch Assigns BB- Rating to Sr. Sec. Facility
GMAC COMMERCIAL: Moody's Pares Rating on Class F Certs. to B1
HAWK CORP: Begins AMEX Trading of 8-3/4% Sr. Notes Under HWK.Z
HAWKEYE RENEWABLES: Moody's Puts B2 Rating on $185M Sr. Sec. Loan

HEALTH & NUTRITION: Transfers Name to New Owner After Asset Sale
HELIOS SERIES: Moody's Pares Rating on $24M Class C Notes to B1
HEXCEL CORP: Issuing $200 Million Sr. Notes to Refinance Debts
HEXCEL CORP: Moody's Junks Proposed $200 Million Senior Sub. Notes
HIGHWOODS REALTY: Moody's Holds Ba1 Rating on Senior Unsec. Debt

ICON HEALTH: Moody's Junks $155M Senior Subordinated Notes
INTEGRATED ELECTRICAL: Completes Internal Investigation
INTERSTATE BAKERIES: JPMorgan Replaces Harris Letters of Credit
JOSEPH G. ROCHE: Files Schedules of Assets & Liabilities
JOY GLOBAL: Performance Improvement Cues Moody's to Lift Ratings

LB-UBS COMMERCIAL: S&P Places Low-B Ratings on Six Cert. Classes
LSI LOGIC: Posts $197 Million GAAP Net Loss in Fourth Quarter
MAGNUM HUNTER: S&P Places Low-B Ratings on CreditWatch Developing
MAYTAG CORP: Names P.J. Bognar as Senior Vice President for Sales
MID-STATE RACEWAY: Majority Stakeholder Wants Directors Kicked-Out

MID-STATE RACEWAY: J. Gural & TrackPower Acquiring Vernon Downs
MIRANT CORP: Financial Projections Underpinning Chapter 11 Plan
MORGAN STANLEY: Moody's Junks Classes G & H Certificates
MORGAN STANLEY: Interest Shortfalls Prompt S&P to Watch Ratings
NATIONAL CENTURY: Trust Files Mega Lawsuit Against 19 Entities

NATIONAL ENERGY: Asks Court to Approve Plan Voting Procedures
NEIGHBORCARE INC: Earns $9.7 Million of Net Income in 1st Quarter
NOVA CHEMICALS: Posts $162 Million Net Income for 2004 4th Quarter
OMNOVA SOLUTIONS: Posts $14.7 Million Net Loss in Fourth Quarter
PACIFIC LUMBER: S&P Places Junk Rating on CreditWatch Negative

PERKINELMER INC: Fourth Qtr. Revenues Up 11% to $478.6 Million
PIPEMASTERS INC: Voluntary Chapter 11 Case Summary
POGO PRODUCING: S&P Revises Outlook on BB+ Ratings to Stable
PQ CORP: Moody's Puts B1 Rating on $410M Sr. Sec. Bank Facility
RELIANCE GROUP: RIC Will Pay $990K to Settle Sandenhill D&O Claims

RESIDENTIAL ASSET: Moody's Reviewing Ratings & May Downgrade
RITE AID: Prices 2.3 Mil. Mandatory Convertible Preferred Shares
ROGERS & SON CONSTRUCTION: Case Summary & 22 Unsecured Creditors
RSI HOLDINGS: Capital Deficits Trigger Going Concern Doubt
RYERSON TULL: Declares Cash Dividends & Sets Annual Meeting

SECOND CHANCE: BDO Seidman Approved as Financial Consultants
SEMCO ENERGY: Moody's Revises Outlook on Low-B Ratings to Stable
SOLUTIA INC: Wants to Assume Huntsman Agreements
STELCO INC: Steelworkers Director Wants Members' Pensions Secured
STEVENOT WINERY: Wants to Hire Wilke Fleury as Bankruptcy Counsel

TATER TIME: Taps Southwell & O'Rourke as Bankruptcy Counsel
TATER TIME: Section 341(a) Meeting Slated for March 22
TECO AFFILIATES: File Chapter 11 Petitions in D. Arizona
TECO AFFILIATES: Case Summary & 36 Largest Unsecured Creditors
TECO ENERGY: To Host Fourth Quarter Webcast on Feb. 1

TRITON CDO: Moody's Junks $12.5M Class C-1 & $5M Class C-2 Notes
TXU CORP: Board Elects Stan Szlauderbach as SVP & Controller
UAL CORP: Wants Court to Approve Master Pact with Gate Gourmet
ULTIMATE ELECTRONICS: Nasdaq Issues Delisting Notice
W.R. GRACE: Wants to Refund Defense Costs & Settle Claims

W.R. GRACE: Asks Court to Approve Continental Settlement Pact
W.R. GRACE: Wants Removal Period Extended to Plan Effective Date
WESTPOINT STEVENS: Court Approves Marianna & Columbia Leases
WILLAMETTE VALLEY: Voluntary Chapter 11 Case Summary
XEROX CORP: S&P Revises Ratings on BB- Rating to Stable

* Fitch: Balanced Rating Changes Signal Stronger U.S. Bond Market

* BOOK REVIEW: Full Faith and Credit: The Great S & L Debacle

                          *********

ABITIBI-CONSOLIDATED: Incurs $108 Million Net Loss for 4th Quarter
------------------------------------------------------------------
Abitibi Consolidated, Inc., reported a fourth quarter loss of
$108 million, or 24 cents a share, after recording a write down of
$235 million after-tax, for the permanent closure of both its
Sheldon, Texas and Port-Alfred, Quebec newsprint mills as an
initial step of its in-depth operations review.  This compares to
a loss of $81 million, or 18 cents a share, in the fourth quarter
of 2003.  Also included in the quarter's results were the
following after-tax items: A gain of $169 million on the
translation of foreign currencies, namely the Company's US
dollar-denominated debt, a lumber duty credit of $39 million, a
negative income tax adjustment of $4 million and mill closure
elements of $21 million.

Although not a GAAP-measure, the loss would have been $56 million,
or 13 cents per share, before the impact of foreign currency
translation and other specific items in the fourth quarter.  This
compares to a loss of $91 million, or 21 cents a share, in the
fourth quarter of 2003, also before specific items.

The operating loss in the fourth quarter was $335 million compared
with an operating loss of $211 million in the same quarter of
2003.  The major difference year-over-year is higher mill-related
closure costs, a stronger Canadian dollar and higher distribution
costs.  Offsetting these are higher prices for all of the
Company's paper and wood products, lower costs in both paper
segments as well as a $57 million credit related to the revised
U.S. lumber duty rates handed down in the fourth quarter.

For all of 2004, the Company lost $36 million, or 8 cents a share,
compared with net earnings of $175 million, or 40 cents a share
for 2003.  On an operating basis, the Company reported a loss of
$219 million in 2004, compared with a loss of $326 million in
2003.

Although not a GAAP-measure, the loss would have been
$153 million, or 35 cents per share in 2004, before the impact of
foreign currency translation and other specific items.  This
compares to a loss of $373 million, or 85 cents a share, in 2003,
also before specific items.

"We will be making strategic moves over the coming months to
return our Company to appropriate levels of profitability," added
Weaver.  "It won't be easy, but we are dealing with a new reality
in the North American newsprint market".

                            Currency

Compared to both the fourth quarter of 2003 and for all of 2004,
the Canadian dollar has appreciated by 8% against the US dollar.
The Company estimates the unfavourable impact of this appreciation
on its operating results to be approximately $67 million in the
fourth quarter and $188 million for the whole of 2004.

                             Capex

Capital expenditures during the quarter came in at $140 million,
with PanAsia's Hebei project to construct a 330,000 tonnes
newsprint mill outside of Beijing, China representing $61 million
of that amount.  This US$300 million project, which is being fully
funded by the joint venture, is on budget and on schedule.

The Hebei project, combined with the completion of the Alma
project in the third quarter, the hydro modernization project at
Iroquois Falls, Ontario as well as asset maintenance account for
most of the 2004 total spend of $385 million ($106 million related
to Hebei).

                       Banking Covenants

At the end of the fourth quarter, and following the asset write
down, the Company's net funded debt to capitalization ratio was
65.8% compared to its 70% covenant and its EBITDA-to-interest
coverage was 2.1x compared to the 1.25x threshold.  These
covenants only apply to the Company's revolving credit facility,
which was un-drawn at year-end.

                   In-Depth Operations Review

"We are forging ahead in 2005 with a strategic plan designed to
make Abitibi-Consolidated a more nimble competitor in the global
marketplace," said President and Chief Executive Officer, John
Weaver.  "This plan will be implemented over the next several
quarters and see investment at our strongest mills, while other
facilities will be reviewed to maximize value.  Improvements in
cash flow as well as the cash generated from the execution of this
plan are intended for debt reduction."

Measurable steps will be implemented to improve annualized EBITDA
by $250 million by the end of 2006, including:

   -- Achieving $175 million in cost, productivity and sales mix
      improvements.  The Company's goal is to have newsprint mills
      only in the first or second cost quartiles, and to reduce
      North American newsprint cash costs by $25 per tonne.

   -- As part of the plan, the Company will focus its review on
      its higher cost mills in Newfoundland (Grand Falls and
      Stephenville) as well as on two Ontario mills (Kenora and
      Fort William).

   -- The remaining $75 million in profit improvements to come
      from other initiatives, among which will be:

      * The next AO/EO conversion;

      * The re-launch of the Lufkin, Texas mill into a new product
        or the sale of the mill

Abitibi-Consolidated is a global leader in newsprint and uncoated
groundwood (value-added groundwood) papers as well as a major
producer of wood products, generating sales of $5.8 billion in
2004.  The Company owns or is a partner in 26 paper mills, 22
sawmills, 4 remanufacturing facilities and 1 engineered wood
facility in Canada, the U.S., the UK, South Korea, China and
Thailand.  With approximately 14,000 employees, excluding its
PanAsia joint venture, Abitibi-Consolidated does business in
approximately 70 countries.  Responsible for the forest management
of approximately 18 million hectares of woodlands, the Company is
committed to the sustainability of the natural resources in its
care.  Abitibi-Consolidated is also the world's largest recycler
of newspapers and magazines, serving 16 metropolitan areas in
Canada and the United States and 130 local authorities in the
United Kingdom, with 14 recycling centres and approaching 20,000
Paper Retriever(R) and paper bank containers.

                         *     *     *

As reported in the Troubled Company Reporter on Dec. 22, 2004,
Standard & Poor's Ratings Services lowered its long-term corporate
credit rating on Montreal, Quebec-based newsprint producer
Abitibi-Consolidated Inc. to 'BB-' from 'BB'.  At the same time,
all ratings outstanding, including those on subsidiary
Abitibi-Consolidated Co. of Canada, were lowered to 'BB-' from
'BB'.  The outlook is negative.


ADESA INC: Subsidiary Expands Salvage Auction Business
------------------------------------------------------
ADESA Inc.'s (NYSE: KAR) total loss vehicle auction business,
ADESA Impact, opened its 29th North American auction facility in
Connecticut.  The new 20-acre greenfield facility is located in
Middletown, southeast of Hartford, adjacent to Interstate 91.
With eight New England facilities, Impact is the only salvage
auction company with locations in all six New England states.

Cheryl Munce, president of Impact, stated "As important as
technology is in our industry, strategic locations with adequate
storage are critical in our ability to service our insurance
customers and salvage buyers."  Munce added, "We are committed to
helping our customers reduce the high cost of services in this
region by expanding our footprint."

ADESA Impact is the 3rd largest salvage remarketing company in
North America with 29 auction facilities in the United States and
Canada.  ADESA, Inc., also includes:

   * ADESA Corp., a network of 52 wholesale vehicle auctions;

   * AFC, a dealer floorplan finance company;

   * PAR, a vehicle remarketing company;

   * AutoVIN, which provides vehicle inspection services to the
     automotive industry and its lenders; and

   * ComSearch, which provides Internet-based parts location and
     insurance claim audit services nationwide.

Headquartered in Carmel, Indiana, ADESA, Inc. --
http://www.adesainc.com/-- is North America's largest publicly
traded provider of wholesale vehicle auctions and used vehicle
dealer floorplan financing.  The Company's operations span North
America with 53 ADESA used vehicle auction sites, 28 Impact
salvage vehicle auction sites and 83 AFC loan production offices.

                         *     *     *

As reported in the Troubled Company Reporter on June 4, 2004,
Standard & Poor's Rating Services assigned its 'B+' rating to
ADESA Inc.'s proposed $125 million senior subordinated notes due
2012, and affirmed its 'BB' corporate credit and senior secured
ratings on the Carmel, Indiana-based operator of wholesale
used-vehicle auctions and provider of used-vehicle floorplan
financing.  The outlook is stable.


AIRGAS INC: Earns $23 Million of Net Income in Third Quarter
------------------------------------------------------------
Airgas, Inc., (NYSE:ARG) reported strong growth in sales,
operating income and net earnings for its third quarter ended
Dec. 31, 2004.  Net earnings for the quarter grew 10% to
$23 million, compared to $20.9 million in the same period a year
ago.  The current quarter includes integration expenses of $0.01
per diluted share related to the acquisition of the U.S. packaged
gas business from The BOC Group.  Results for the quarter ended
December 31, 2003, include an insurance-related gain of $0.02 per
diluted share.

Third quarter sales increased 35% to $612 million reflecting
continued same-store sales growth, the consolidation of National
Welders Supply Company (a joint venture affiliate), as well as
acquisitions.  National Welders contributed sales of $43 million;
excluding this amount, sales grew 26%.  Total same-store sales
were up 9% compared to the same quarter a year ago, with gas and
rent up 5% and hardgoods up 14%.  These results reflect continued
improvement in manufacturing and other industrial market segments.

"Our EPS grew by 19%, excluding the current quarter's integration
expenses and the prior period's insurance gain, reflecting
continued sales momentum," said Airgas Chairman and Chief
Executive Officer Peter McCausland.  "However, earnings were a
little softer than we hoped.  Operating expenses, including fuel
cost and cylinder maintenance, increased at a faster pace as
volumes continued to grow, and we have experienced some product
cost increases.  We are planning comprehensive pricing actions to
be implemented in the next 30 to 60 days.  Given that most of the
cost pressures we are experiencing directly relate to our cost to
purchase and deliver product to our customers and the significant
investment we have made over the last few years to enhance our
customers' value experience, I am confident we will achieve
appropriate revenue enhancement."

Year to date, adjusted debt increased by $181 million as a result
of the July 30 closing of the BOC acquisition.  After-tax cash
flow for the nine months ended December 31, 2004 was $160 million
compared to $137 million in the comparable prior year period.
Free cash flow for the comparable periods was negative $7 million
versus positive $65 million.  The decline in free cash is
attributed to increased inventories and accounts receivable in
connection with overall sales growth and the BOC acquisition, as
well as capital expenditures to support the growth in strategic
products like medical gas and bulk.  The definition of after-tax
cash flow and free cash flow, a reconciliation of each to the
attached Consolidated Statement of Cash Flows, the definition of
adjusted debt and a reconciliation to the balance sheet are
attached.

Mr. McCausland continued, "Our growth platforms of bulk, medical
and specialty gases as well as safety products and strategic
accounts all performed well in the third quarter and our January
same-store sales remain strong."

The Company will conduct an earnings teleconference on Thursday,
Jan. 27, 2005, beginning at 11:00 a.m. Eastern Time.  Access the
teleconference by calling (888) 202-2422.  This press release,
slides to be presented during the Company's teleconference and
information about how to access a live and on-demand webcast of
the teleconference are available in the 'Investor Info' section on
the Company's Internet site http://www.airgas.com/The telephone
replay will be accessible for one week starting January 27 at 1
p.m. Eastern Time by calling (888) 203-1112 and entering passcode
155503.

                        About Airgas, Inc.

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

                         *     *     *

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


AIRGATE PCS: 97% of Noteholders Agree to Amend 9.375% Indenture
---------------------------------------------------------------
AirGate PCS, Inc., (Nasdaq: PCSA) disclosed that, as of 5:00 p.m.,
New York City time on Jan. 25, 2005, the consent solicitation
relating to its 9.375% Senior Subordinated Secured Notes due 2009
and its First Priority Senior Secured Floating Rate Notes due 2011
expired.  As of such time, AirGate had received consents from
holders of approximately 97% and 92% of the outstanding principal
amount of 9.375% Notes and Floating Rate Notes, respectively,
pursuant to the Consent Solicitation Statement, dated
Jan. 11, 2005.  As a result, AirGate has received the necessary
approval of the holders of each series of Notes to the proposed
amendments to each of the indentures under which the Notes were
issued.

As previously announced, AirGate entered into an Agreement and
Plan of Merger with Alamosa Holdings, Inc., pursuant to which
AirGate will merge with and into a direct wholly-owned subsidiary
of Alamosa.  The purpose of the consent solicitation was to obtain
the requisite consents to amend the indentures governing the Notes
so that neither AirGate nor Alamosa would be required to make a
repurchase offer for the Notes upon completion of the merger.

Upon completion of the merger, Holders of Notes as of
Jan. 10, 2005, that validly delivered their consents before the
Expiration Time will receive a consent payment equal to 0.25% of
the principal amount of Notes represented by such consents.

In connection with the consent solicitation, AirGate intends to
promptly execute a supplemental indenture providing for the
proposed amendment to each indenture under which each series of
Notes was issued, to be operative upon completion of AirGate's
previously announced merger with Alamosa Holdings, Inc.  On or
about Feb. 15, 2005, AirGate will hold a special meeting of
AirGate stockholders to vote on the adoption of the merger
agreement and Alamosa will hold a special meeting of Alamosa
stockholders to vote on the issuance of shares of Alamosa common
stock in the merger.  If the parties obtain the requisite
shareholder approvals, they expect to close the merger promptly
thereafter.

UBS Securities LLC is acting as the Solicitation Agent.  Holders
with questions about the consent solicitation can contact UBS'
Liability Management Group at (203) 719-4210 (call collect) or
(888) 722-9555 x4210 (toll-free).

For additional information, contact MacKenzie Partners, Inc., the
Information Agent for the consent solicitation, at (800) 322-2885
(toll free) or (212) 929-5500 (collect).

This press release does not constitute a solicitation of consents
of holders of the Notes and shall not be deemed a solicitation of
consents with respect to any other securities of AirGate.

                        About the Company

AirGate PCS, Inc., is the PCS Affiliate of Sprint with the right
to sell wireless mobility communications network products and
services under the Sprint brand in territories within three states
located in the Southeastern United States. The territories include
over 7.4 million residents in key markets such as Charleston,
Columbia, and Greenville-Spartanburg, South Carolina; Augusta and
Savannah, Georgia; and Asheville, Wilmington and the Outer Banks
of North Carolina.

                         *     *     *

As reported in the Troubled Company Reporter on Oct. 6, 2004,
Moody's Investors Service assigned a B2 rating to the proposed
$175 million of senior secured floating rate notes due 2011 of
AirGate PCS, Inc., and affirmed the company's other ratings.  The
rating outlook is positive.

The affected ratings are:

   * Senior implied rating B3 (affirmed)

   * Issuer rating Caa1 (affirmed)

   * $175 million senior secured floating rate notes due 2011
     -- B2 (assigned)

   * $159 million 9.375% senior subordinated secured notes due
     2009 -- Caa1 (affirmed)

   * $141 million senior secured credit facility due 2007/08 --
     WR (withdrawn)


ALASKA COMMS: Gets Requisite Consents to Amend Sr. Note Indentures
------------------------------------------------------------------
Alaska Communications Systems Group Inc.'s (Nasdaq:ALSK)
subsidiary, Alaska Communications Systems Holdings, Inc., has
received the requisite consents and has successfully completed its
previously announced solicitations of consents in respect of
ACSH's 9-3/8% Senior Subordinated Notes due 2009 and 9-7/8% Senior
Notes due 2011.  The consent solicitations are being made in
connection with ACSH's previously announced tender offers, which
are scheduled to expire at 9:00 a.m., New York City time, on
Feb. 10, 2005, unless extended or earlier terminated.

Liane Pelletier, ACS president and chief executive officer,
stated, "This transaction is effectively the first step in our
strategy to recapitalize the company and lower our overall cost of
capital."

The solicitations of consents expired at 5:00 p.m., New York City
time, on Jan. 25, 2005.  After the expiration of the solicitations
of consents, ACS, its subsidiaries and the trustees entered into
supplemental indentures, which amended the indentures under which
the senior subordinated notes and the senior notes were issued.
If they become operative, the amendments to the senior
subordinated notes indenture would, among other things, eliminate
substantially all of the restrictive covenants and eliminate most
events of default (other than for failure to make payments of
interest or principal).  If they become operative, the proposed
amendments to the senior notes indenture would, among other
things, increase the amount of senior secured bank indebtedness
that ACSH and its subsidiaries may incur.

If the tender offers are consummated, holders who tendered their
notes prior to the expiration of the consent solicitations will be
entitled to receive the consent payments in accordance with the
solicitations of consents.

Subject to certain conditions, holders of senior subordinated
notes who did not tender their notes prior to the expiration of
the solicitation of consents but who validly tender and do not
withdraw their senior subordinated notes by 9:00 a.m., New York
City time, on Feb. 10, 2005, will receive total consideration for
their senior subordinated notes of $1,036.88 per $1,000 principal
amount of notes tendered by such time, but will not receive a
consent payment.  Subject to certain conditions, holders of senior
notes who did not tender their notes prior to the expiration of
the solicitation of consents but who validly tender and do not
withdraw their senior notes by 9:00 a.m., New York City time, on
Feb. 10, 2005, will receive total consideration for their senior
notes of $1,088.75 per $1,000 principal amount of notes tendered
by such time, but will not receive a consent payment.

Tenders of senior notes will be subject to pro ration in the event
that tenders for more than $59,350,000 aggregate principal amount
of senior notes are received.

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

At the expiration time of the solicitations of consents,
$139.9 million aggregate principal amount of senior subordinated
notes had been validly tendered and not withdrawn and
$170.8 million aggregate principal amount of senior notes had been
validly tendered and not withdrawn.

J.P. Morgan Securities, Inc., and CIBC World Markets Corp. are
acting as the dealer managers and solicitation agents, and Global
Bondholder Services Corp. is acting as depositary, in connection
with the tender offers and consent solicitations.  Copies of the
Offers to Purchase and Consent Solicitation Statements, Letters of
Transmittal and Consent, and other related documents may be
obtained from the depositary at 866-470-3900.  Additional
information concerning the terms of each tender offer and consent
solicitation may be obtained by contacting J.P. Morgan Securities
Inc. toll-free at 866-834-4666 (toll free) or 212-834-3424 or CIBC
World Markets Corp. at 212-885-4489.

This press release shall not constitute an offer to purchase or
the solicitation of an offer to sell or a solicitation of consents
with respect to the senior subordinated notes or the senior notes.
The tender offers and consent solicitations may only be made in
accordance with the terms of and subject to the conditions
specified in the Offers to Purchase and Consent Solicitation
Statements, dated January 12, 2005, and the related Letters of
Transmittal and Consent, which more fully set forth the terms and
conditions of the tender offers and consent solicitations.

                        About the Company

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

                         *     *     *

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

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


ALISON GEM: Wants to Hire Klestadt & Winters as Bankruptcy Counsel
------------------------------------------------------------------
Alison Gem Corporation asks the U.S. Bankruptcy Court for the
Southern District of New York for permission to employ Klestadt &
Winters, LLP as its general bankruptcy counsel.

Klestadt & Winters is expected to:

   a. advise the Debtor with regards to its rights and obligations
      as a debtor-in-possession and assist the Debtor in
      preparing all necessary documents for its chapter 11 case;

   b. take all necessary actions to protect and preserve the
      Debtor's estate during the pendency of its chapter 11 case,
      including:

        (i) the prosecution of actions by the Debtor and the
            defense of any actions commenced against the
            Debtor;

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

      (iii) object to claims filed against the Debtor's estate;

   c. prepare on behalf of the Debtor, all necessary motions,
      applications, answers, orders, reports and papers in
      connection with the administration of its chapter 11 case;
      and

   e. perform all other necessary legal services in the Debtor's
      chapter 11 case.

Ian R. Winters, Esq., a Partner at Klestadt & Winters, is the lead
attorney for the Debtor.  Mr. Winters discloses that the Firm
received a $49,817.30 retainer.  Mr. Winters will bill the Debtor
$375 per hour for his services.

Mr. Winters reports Klestadt & Winters' professionals bill:

            Designation     Hourly Rates
            -----------     ------------
            Partners        $300 - $450
            Associates      $125 - $250
            Paralegals         $125

Klestadt & Winters assures the Court that it does not represent
any interest adverse to the Debtor or its estate.

Headquartered in New York, New York, Alison Gem Corp., is a
manufacturer and wholesaler of jewelry goods selling both diamond
and colored stone jewelry to a variety of major retailers, small
local retail chains, and single family owned retail stores.  The
Company filed for chapter 11 protection on January 25, 2005
(Bankr. S.D.N.Y. Case No. 05-10404).  When the Debtor filed for
protection from its creditors, it reported total assets of
$20,600,000 and total debts of $43,000,000.


AMERICAN BUSINESS: Nasdaq Delists Common Shares
-----------------------------------------------
American Business Financial Services, Inc., (Nasdaq: ABFIQ)
reported that, on January 24, 2005, it received a letter from The
Nasdaq Stock Market stating that ABFS' common stock would be
delisted from The Nasdaq Stock Market at the opening of business
on February 2, 2005, in accordance with Marketplace Rules 4300 and
4450(f).  The Nasdaq Stock Market also indicated that, prior to
delisting, ABFS' trading symbol would be "ABFIQ" starting from the
opening of business on January 26, 2005.

On January 21, 2005, ABFS and certain of its subsidiaries filed
voluntary petitions for relief under Chapter 11 of the United
States Bankruptcy Code.  A separate subsidiary filed its petition
on January 24, 2005.  As a result of these proceedings, ABFS
elected not to appeal the decision of The Nasdaq Stock Market.

Headquartered in Philadelphia, Pennsylvania, American Business
Financial Services, Inc., together with its subsidiaries, is a
financial services organization operating mainly in the eastern
and central portions of the United States and California.  The
Company originates, sells and services home mortgage loans through
its principal direct and indirect subsidiaries.  The Company,
along with four of its subsidiaries, filed for chapter 11
protection on Jan. 21, 2005 (Bankr. D. Del. Case No. 05-10203).
Bonnie Glantz Fatell, Esq., at Blank Rome LLP represents the
Debtors in their restructuring efforts.  When the Company filed
for protection from its creditors, it listed $1,083,396,000 in
total assets and $1,071,537,000 in total debts.


AMERICAN BUSINESS: Wants to Maintain Cash Management System
-----------------------------------------------------------
Bonnie Glantz Fatell, Esq., at Blank Rome, LLP, in Wilmington,
Delaware, informs the Honorable Mary F. Walrath of the U.S.
Bankruptcy Court for the District of Delaware that American
Business Financial Services, Inc., and its debtor-affiliates
maintain numerous bank accounts at several banks as part
of a centralized cash management system that provides for a
comprehensive set of internal controls governing the receipt and
disbursement of funds.  From time to time, one or more of the
Bank Accounts may contain funds in an amount not completely
insured or guaranteed as contemplated in Section 345 of the
Bankruptcy Code.

The Cash Management System includes a master Sweep Account at JP
Morgan Chase Bank, N.A.  Inflows to the Sweep Account include,
among other sources, net proceeds from Whole Loan Sales and
amounts automatically swept or manually transferred from nine
zero balance accounts.  Disbursements are made from the Sweep
Account to fund ZB Accounts and pay the operating expenses of the
Company.  No checks are drawn on the Sweep Account.

Ms. Fatell explains that nine ZB Accounts at Chase are funded
from time to time by the Sweep Account, with balances swept into
the Sweep Account on a daily basis.  The ZB Accounts include a
core ABFS operating account, from which substantially all vendor
payments are made, and four ABC operating accounts used to pay,
among other things, certain accounts payable, payroll, employee
benefits, recording fees and other expenses.  The ZB Accounts
also include Home American Credit, Inc., and American Business
Mortgage Services, Inc., operating accounts utilized in the Loan
origination process.  The remaining two ZB Accounts are no longer
active and may be scheduled for closing.

The Debtors utilize three Bank Accounts in the loan collection
process.  Generally, depending on whether the loan is securitized
or owned, borrowers are directed to make regular monthly payments
and loan payoffs to one of two lock-box accounts at Firstrust
Savings Bank.  Funds are swept daily from the Lock-Box Accounts
and transferred to a mortgage collection account at Chase.
Automated Loan payments are remitted directly to the Chase
Mortgage Collection Account.

In certain instances, borrower payments and payoffs are remitted
to two non-Debtor bank accounts.  Borrower payments and payoffs
for certain Warehouse Loans serviced by Wachovia Bank, N.A., and
Wachovia Capital Markets, LLC, are remitted to a lock-box account
maintained at Wachovia.  In addition, at the request of AMBAC
Assurance Corporation, a Securitization Insurer, borrower
payments and payoffs relating to Loans in five Securitizations
are in the process of being redirected to a non-Debtor owned
lockbox account at Firstrust.

Several Bank Accounts, as well as several non-Debtor bank
accounts, are involved in processing Loan payments and payoffs.
Loan processing begins after Loan payments and payoffs are
deposited in the Chase Mortgage Collection Account.  Thereafter,
the Company's computerized servicing system directs the
apportionment of each payment or payoff into its constituent
parts:

    -- principal and interest,

    -- amounts designated as taxes or insurance, and

    -- certain advance reimbursements and fees related to Loan
       servicing.

P&I for serviced Loans is manually transferred to a non-Debtor
owned Securitization trust account.  P&I for owned Loans is
manually transferred to one of the Originators' operating
accounts at Chase.  Amounts designated as T&I are transferred to
a segregated ABMS Bank Account at Chase.  Advances and Fees are
segregated and manually transferred to an ABC Bank Account at
Chase.  Advances and Fees are transferred from the Servicer
Advance Account to the Sweep Account on a daily basis.

The Debtors have various other Bank Accounts, including:

    (a) a Tiger Bank Account at Chase for receipt of payments and
        recoveries related to REO;

    (b) several cash collateral accounts to secure certain
        obligations;

    (c) several miscellaneous deposit, escrow and other Bank
        Accounts at Chase;

    (d) an ABC Bank Account at Beneficial Savings Bank established
        in connection with a prior sale of Loans;

    (e) numerous Bank Accounts at Wilmington Trust Company opened
        to facilitate prior Securitizations or other transactions;
        and

    (f) a money market account with B1ackRock, Inc.

"Many of these Bank Accounts carry minimum balances and may be
closed as part of the Debtors' continuing review and
consolidation of its Cash Management System," Mr. Fatell says.

Accordingly, the Debtors ask the Court for permission to use
their existing Bank Accounts and Cash Management System.

The Debtors further ask Judge Walrath to authorize the Banks to
process, honor and pay all prepetition checks or other transfers
related to taxes and insurance.

Headquartered in Philadelphia, Pennsylvania, American Business
Financial Services, Inc., together with its subsidiaries, is a
financial services organization operating mainly in the eastern
and central portions of the United States and California.  The
Company originates, sells and services home mortgage loans through
its principal direct and indirect subsidiaries.  The Company,
along with four of its subsidiaries, filed for chapter 11
protection on Jan. 21, 2005 (Bankr. D. Del. Case No. 05-10203).
Bonnie Glantz Fatell, Esq., at Blank Rome LLP represents the
Debtors in their restructuring efforts.  When the Company filed
for protection from its creditors, it listed $1,083,396,000 in
total assets and $1,071,537,000 in total debts. (American Business
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


AMERICAN COMMERCIAL: Judge Lorch Confirms Amended Chapter 11 Plan
-----------------------------------------------------------------
The Honorable Basil H. Lorch of the U.S. Bankruptcy Court for the
Southern District of Indiana, New Albany division, confirmed the
Amended Plan of Reorganization filed by American Commercial Lines
LLC and its debtor-affiliates.  The Debtors filed their amended
plan on October 19, 2004.

Judge Lorch determined that the Plan satisfies the requisite
provisions in Section 1129 of the Bankruptcy Code, that it should:

     * properly classifies the claims,

     * specifies the unimpaired classes of claims,

     * specifies the treatment of unimpaired classes of claims,

     * provides for the same treatment of each claim in each
       class,

     * provides adequate and proper means for its
       implementation,

     * is not inconsistent with applicable provisions of the
       Bankruptcy Code,

     * complies with applicable provisions of the Bankruptcy
       Code,

     * was proposed in good-faith,

     * provides for the payment for services or costs and
       expenses in connection with the Debtors Chapter 11 cases,

     * provides for the proper treatment of administrative and
       tax claims pursuant to the requirements of Section
       1129((a)(9) of the Bankruptcy Code,

     * is feasible,

     * calls for the payment of fees payable under Section 1930
       of the Judiciary Procedures Code,

     * does not alter retiree benefits,

     * is fair and equitable, and

     * does not call for the avoidance of taxes or the
       application of Section 5 of the Securities Act of 1933.

                           About the Plan
                  New Organizational Structure

Under the Plan, Debtors ACL Capital Corp. and ACBL Riverside
Terminals will be dissolved.  The resulting Reorganized Debtors
are:

     * A New Holding Company, which will indirectly own 100% of
       Reorganized American Commercial Lines LLC.  The Reorganized
       American Commercial Lines will own equity interests in
       eight affiliated entities:

                (a) 100% of Reorganized Debtor Louisiana Dock
                    Company LLC;

                (b) 100% of Reorganized Debtor Jeffboat LLC;

                (c) 100% of Reorganized Debtor American Commercial
                    Terminals LLC;

                (d) 100% of Reorganized Debtor American Commercial
                    Barge Line LLC;

                (e) 100% of Reorganized Debtor American Commercial
                    Logistics LLC;

                (f) 100% of Reorganized Debtor ACBL Liquid Sales
                    LLC;

                (g) 100% of Reorganized Debtor American Commercial
                    Lines International LLC; and

                (h) 50% of Vessel Leasing LLC.

     * Reorganized American Commercial Terminals LLC will own 100%
       of Reorganized American Commercial Terminals Memphis LLC;

     * Reorganized Louisiana Dock Company LLC will own equity
       interests in three affiliated entities:

                (a) 35% of T.T. Barge Services Mile 237 LLC;
                (b) 100% of Reorganized Debtor Houston Fleet LLC;
                    and
                (c) 50% of Bolivar Terminal Company.

     * Reorganized American Commercial Lines International LLC
       will own equity interests in four affiliated entities:

                (a) 100% of Reorganized Debtor Orinoco TASA LLC;
                (b) 100% of Reorganized Debtor Orinoco TASV LLC;
                (c) 100% of ACBL Venezuela Ltd.; and
                (d) 71% of ACBL Dominicana S.A.

     * Reorganized American Commercial Barge Line LLC will own
       33.33% of Barge Net.

     * Reorganized American Commercial Logistics LLC will own 50%
       of Barge Link LLC.

The Plan does not include any substantive consolidation of the
Debtors for any purpose.

               Recoveries Under the Proposed Plan

These claims will be paid in full:

     * Administrative Claims,

     * Allowed DIP Claims,

     * Allowed Priority Claims,

     * Tax Claims (over six-year period with interest),

     * Senior Secured Claims based on the June 30, 1998 Credit
       Agreement estimated to be $363,924,000, and

     * Other Secured Claims other than Senior Secured Claims,
       Maritime Liens Claims and Tort Lien Claims.

Holders of claims against one or more vessels owned by one or more
Debtors will receive half of what they're owed if they want their
Maritime Lien Claims paid in cash.  Alternatively, holders of
Maritime Lien Claims can elect to receive a 5-year note for 100%
of their claims.  Maritime Lien Claims are estimated to total
$12,000,000 to $17,000,000.

Holders of Allowed Secured Claims against property of one or more
Debtors arising under:

      (a) General Maritime Law for maritime torts, including
          personal injury, death, property damage and cargo
          damage, or

      (b) Section 506 of the Bankruptcy Code.

will be paid in full either in cash or with Tort Lien Holder
Notes.  Tort Lien Claims are estimated to be less than $1 million.

                    General Unsecured Claims

Common shares of the New Holding Company will be distributed to
holders of General Unsecured Claims on a pro rata basis:

                                   Projected
                                   Estimated    Percentage
     Debtor                        Claims       Recovery
     ------                        ---------    ----------
     American Commercial Barge  $327M to $340M   8% to 9%
     Line LLC

     American Commercial Lines  $278M to $279M   2% to 3%
     International LLC

     Jeffboat LLC               $279M to $280M   8% to 9%

     Louisiana Dock Company LLC $280M to $281M   3% to 4%

Holders of General Unsecured Claims against these Debtors will get
nothing:

     * American Commercial Lines Holdings LLC less than $1M;
     * American Commercial Lines LLC $306M to $313M;
     * American Commercial Logistics LLC $278M to $279M;
     * Houston Fleet LLC $278M to $279M;
     * Lemont Harbor & Fleeting Services LLC $278M to $279M;
     * ACL Capital Corp. $278M to $279M;
     * ACBL Liquid Sales LLC $278M to $279M;
     * Orinoco TASV LLC $278M to $279M;
     * Orinoco TASA LLC $278M to $279M;
     * American Commercial Terminals LLC $278M to $279M; and
     * American Commercial Terminals-Memphis LLC $278M to $279M.

Holders of Convenience Class Claims, totaling $1,500,000, will be
paid 8% of their allowed claims, in cash, 45 days after the
effective date of the Plan

Holders of the:

      (1) 10-1/4% Senior Notes due June 30, 2003 that were not
          exchanged pursuant to the April 15, 2002 exchange offer,
          owed an estimated $6,893,000; and

      (2) 12% Pay-in-Kind Senior Subordinated Notes due
          July 1, 2008, owed an estimated $124,354,000;

take nothing under the Plan.

Equity Holders will not get anything either.

A full-text copy of the Plan and the Disclosure Statement is
available for a fee at:

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

Headquartered in Jeffersonville, Indiana, American Commercial
Lines LLC, an integrated marine transportation and service company
transporting more than 70 million tons of freight annually using
5,000 barges and 200 towboats in North and South American inland
waterways, filed for chapter 11 protection on January 31, 2003
(Bankr. S.D. Ind. Case No. 03-90305).  American Commercial is a
wholly owned subsidiary of Danielson Holding Corporation (Amex:
DHC).  Suzette E. Bewley, Esq., at Baker & Daniels represents the
Debtors in their restructuring efforts.  As of September 27, 2002,
the Debtors listed total assets of $838,878,000 and total debts of
$770,217,000.


AMERICAN COMMERCIAL: Moody's Rates Planned $200M Sr. Notes at B3
----------------------------------------------------------------
Moody's Investors Service has assigned a B3 rating to American
Commercial Lines LLC's proposed $200 million senior notes, due
2015.  The proposed notes, along with usage of about $162 million,
estimated, as of January 26, 2005, of the Company's proposed $225
million senior secured revolving credit facility will represent
the majority of the Company's debt financing and will refinance
much of the debt the company has under its interim capital
structure following its emergence from bankruptcy protection on
January 11, 2005.

On close of the transaction, American Commercial will have about
$92 million of equity in its capital structure, 18% of total
capital.  Also, Moody's has assigned a B2 senior implied and a B3
senior unsecured issuer rating to American Commercial, as well as
a Speculative Grade Liquidity Rating of SGL-2.  The ratings
outlook is stable.

The stable outlook reflects Moody's expectations of stable
operating margins and cash flows, despite anticipated decreases in
the company's revenue base over the near term owing to on-going
fleet rationalization.  Proceeds from fleet retirements will also
provide a modest amount of funds, which can be used for debt
reduction over the next 12 months.

Ratings could be subject to downward revision if unexpectedly
severe or prolonged operating difficulties cause operating margins
to fall below 5%, result in persistently thin or negative free
cash flow generation, or EBIT coverage below 1.0x interest
expense.  Conversely, the rating outlook could improve if the
company were to demonstrate improvement in operating results and
debt reduction such that free cash flow were to approximate 10% of
debt, EBIT were greater than 1.5x interest expense, and lease-
adjusted debt/EBITDAR were to fall below 5.5x for a sustained
period.

Upon close of the proposed transaction and restructuring of the
company as a result of its exit from bankruptcy, American
Commercial will remain a heavily-levered company operating in a
traditionally volatile business sector.  Although the Company's
operating performance has improved during the course of its re-
organization, reflecting reduction in American Commercial's
operating fleet, focus on operating efficiencies, and general
market improvements since the January 2003 bankruptcy filing,
recent operating results suggest thin cash flows and earnings
relative to re-financed, post-emergence debt levels.

Total debt of $408 million, represents about 5x pro forma
estimated LTM October 2004 EBITDA (about 6x EBITDAR on a lease-
adjusted basis).  Interest coverage of the refinanced debt is also
weak based on pro forma operating earnings for the same period,
with an estimated EBIT/interest of about 1.0x.  Similarly, Moody's
estimates pro forma free cash flow for this period to be thin, at
about 3% of the closing debt balance.

Moody's expects American Commercial's operating margin to improve
in FY 2005, owing to continued improvements in the Company's cost
structure, including vessel expenses and overhead, stability in
barge revenues in a continued strong rate environment, as well as
expectations for strong operating results from the Company's
Jeffboat shipbuilding subsidiary.  This should allow the Company
to generate sufficient free cash to repay a modest amount of debt
over the near term, while remaining adequately in compliance with
leverage limits defined by the proposed senior secured credit
facility and increasing the availability of the revolving credit
facility.

However, Moody's notes the volatile nature of the barge markets in
which the company operates, and the potential impact that
externalities, such as weather conditions on the river systems,
can have on the company's operating performance.  Moody's remains
cautious that, despite a positive near term economic outlook, the
company may encounter unexpected and uncontrollable adverse
operating conditions.

Such operating set-backs may put significant strain on the
company's ability to generate adequate cash flows, possibly
resulting in increased borrowings under its revolving credit
facility over the short-term.  Over the longer term, if such
conditions persist, American Commercial could face difficulty in
meeting covenant levels or debt service requirements.  Moody's
believes, however, that the company's substantial contract
coverage of revenue through FY 2005 mitigates the effects that
unexpected adverse conditions may have on the company's financial
condition over the next 12 months.

The ratings are supported by American Commercial's leading market
position in the U.S. inland barge sector, the Company's long term
contracts and relationships with a wide range of key shipping
customers, as well as the relative diversity in the barge
operator's cargo mix.  The Company operates over 3,000 barges and
136 towboats, making American Commercial the largest provider of
covered hopper dry cargo barges and one of the largest liquid
barge operators on the U.S. Inland Waterways.

Moody's believes that American Commercial 's fleet size is
important in gaining long-term contracts and renewing shorter-term
contracts with important customers.  A majority of the Company's
expected FY 2005 barge revenue is based on fixed contracts,
typically one to three years in length.  American Commercial has a
large and fairly diversified base of customers; the top 10
shipping customers comprise about 35% of the company's FY 2004
revenue, with no single customer accounting for more than 15% of
total revenue.

Similarly, despite the Company's concentration in grain cargoes,
American Commercial has been successful in adding other dry bulk
commodities, including coal and steel, as well as a growing
contribution from liquid bulk shipping.  This reduces the
Company's historical exposure to the highly cyclical and seasonal
grain cargo markets, improving revenue stability.

The B3 rating on the senior unsecured notes, one notch below the
senior implied rating, 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 borrowings under the
company's proposed senior secured credit facilities.  Moody's
assesses the asset coverage of all debt to be modest, despite the
substantial level of fixed assets on the American Commercial's
balance sheet.

On total assets of $645 million, pro forma, as of October 1 2004,
about $428 million of this amount was represented by fixed assets.
In a liquidation scenario, Moody's believes that realizable asset
values may possibly cover potential senior secured credit
facilities outstanding, $225 million committed as of close of
transactions, but that coverage available to unsecured debt
holders may imply substantial loss of principal.

The Speculative Grade Liquidity Rating of SGL-2 reflects Moody's
assessment of a good liquidity profile.  Upon close of the
proposed transaction, American Commercial will have an estimated
cash balance of about $24 million.  The Company plans to have
about $63 million of its $225 million senior secured revolving
credit facility available at that time.

Although the facility will be heavily drawn, in Moody's opinion,
the remaining availability gives m American Commercial moderate
latitude to cover potential cash short-falls over the next 12
months.  Free cash flow is projected to be modest in FY 2005, but
improving over 2004 levels, approximately $13 million, pro forma
for the transactions, reflecting the Company's reduced cost
structure for leased-in vessels and moderate capital expenditure
levels during a period of anticipated stability of freight revenue
and operating margins.

This should reduce the likelihood that the company will have to
draw further on its senior secured credit facility.  Also, Moody's
notes that financial covenant levels associated with this facility
allow for ample cushion against unexpected downward operating
results, minimizing the possibility of covenant violation over the
near term.  However, with essentially all assets on the Company's
balance sheet encumbered by debt, either through the revolving
credit facility or MARAD debt, Moody's believes that the company's
ability to raise funds through additional indebtedness to be quite
limited.

American Commercial Lines LLC, headquartered in Jeffersonville,
Indiana, is one of the largest integrated marine transportation
and services companies in the United States, providing barge
transportation and related services, and barge, towboat and other
vessel construction.  As of December 31, 2004, the Company
operated 3,240 barges in the U.S., consisting of 2,513 covered
hoppers, 348 open hoppers and 379 tank barges.  The Company had
pro forma LTM October 1, 2004 revenues of $617 million.


AMERICREDIT CORP: Prices $900 Million Asset-Backed Securitization
-----------------------------------------------------------------
AmeriCredit Corp. (NYSE:ACF) disclosed the pricing of a
$900 million offering of automobile receivables-backed securities
through lead managers Wachovia Securities and JPMorgan.
Co-managers are Credit Suisse First Boston, Deutsche Bank
Securities and Lehman Brothers.  AmeriCredit uses net proceeds
from securitization transactions to provide long-term financing of
its receivables.

The securities will be issued via an owner trust, AmeriCredit
Automobile Receivables Trust 2005-A-X, in four classes of Notes:


Note Class   Amount      Average Life      Price    Interest Rate
---------- ------------  --------------  ---------- -------------
   A-1     $164,000,000      0.25 years   100.00000      2.73%
   A-2     $258,000,000      0.90 years    99.99968      3.22%
   A-3     $277,000,000      2.10 years    99.98118      3.63%
   A-4     $201,000,000      3.42 years    99.98207      3.93%
           ------------
           $900,000,000
           ============

The weighted average coupon is 3.7%.

The Note Classes are rated by Standard & Poor's, Moody's Investors
Service and Fitch Inc. The ratings by Note Class are:

Note Class      Standard & Poor's    Moody's     Fitch
----------      -----------------    -------     ------
   A-1                 A-1+           Prime-1       F1+
   A-2                 AAA              Aaa         AAA
   A-3                 AAA              Aaa         AAA
   A-4                 AAA              Aaa         AAA

XL Capital Assurance will provide bond insurance for this
transaction.  Initial credit enhancement will total 9.5% of the
original receivable pool balance building to the total required
enhancement level of 17.0% of the then outstanding receivable pool
balance.  The initial 9.5% enhancement will consist of 2.0% cash
and 7.5% overcollateralization.

This transaction represents AmeriCredit's 47th securitization of
automobile receivables in which a total of more than $36 billion
of automobile receivables-backed securities has been issued.

Copies of the prospectus relating to this offering of
receivables-backed securities may be obtained from the managers
and co-managers.  This press release shall not constitute an offer
to sell or the solicitation of an offer to buy the securities
described in this press release, nor shall there be any sale of
these securities in any State in which such offer, solicitation or
sale would be unlawful prior to the registration or qualification
under the securities laws of any such State.

                        About the Company

AmeriCredit Corp. -- http://www.americredit.com/-- is a leading
independent auto finance company.  Using its branch network and
strategic alliances with auto groups and banks, the Company
purchases retail installment contracts entered into by auto
dealers with consumers who are typically unable to obtain
financing from traditional sources.  AmeriCredit has approximately
one million customers and $11 billion in managed auto receivables.
The Company was founded in 1992 and is headquartered in Fort
Worth, Texas.

                         *     *     *

As reported in the Troubled Company Reporter on Sept. 20, 2004,
Fitch Ratings upgraded AmeriCredit Corp.'s senior unsecured debt
rating to 'BB-' from 'B' and said the Rating Outlook is Stable.
Approximately $166 million of debt was affected by this action.


ARGOSY GAMING: Hosting 2004 Results Conference Call on Feb. 9
-------------------------------------------------------------
Argosy Gaming Company (NYSE: AGY) will host an investor/analyst
conference call on Feb. 9, 2005, at 10:00 a.m. EST to review its
fourth quarter and year-end operating results for the periods
ended Dec. 31, 2004.  The call will be broadcast live via the
Internet and may be accessed through its website at
http://www.argosy.con/For those interested in participating in
the call, dial (706) 634-1306 and reference conference ID #3657889
ten to fifteen minutes prior to the call start time.  A replay of
the call will be available at our website through Feb. 23, 2005.

                        About the Company

Argosy Gaming Company -- http://www.argosy.con/-- is a leading
owner and operator of casinos and related entertainment and hotel
facilities in the midwestern and southern United States.  Argosy
owns and operates the Alton Belle Casino in Alton, Illinois,
serving the St. Louis metropolitan market; the Argosy Casino-
Riverside in Missouri, serving the greater Kansas City
metropolitan market; the Argosy Casino-Baton Rouge in Louisiana;
the Argosy Casino-Sioux City in Iowa; the Argosy Casino-
Lawrenceburg in Indiana, serving the Cincinnati and Dayton
metropolitan markets; and the Empress Casino Joliet in Illinois
serving the greater Chicagoland market.

                         *     *     *

Moody's Rating Services and Standard & Poor's assigned their
single-B ratings to Argosy Gaming's 7% Senior Subordinated
Notes in July 2004.


ARMSTRONG WORLD: Creditors Transfer 18 Trade Claims
---------------------------------------------------
The Clerk of the U.S. Bankruptcy Court for the District of
Delaware recorded 18 claim transfers from October 21, 2004, to
January 6, 2005.

Amroc Investments, Inc., purchased 10 claims from nine trade
creditors:

   * Hunzicker Brothers Inc.,
   * Penn State University,
   * Duquesne Light Co.,
   * Southern Electric Supply,
   * Rexel Pyramid Division,
   * Gulf Coast Air & Hydraulics,
   * Seven Maples Systems & Controls Inc.,
   * Nordson Corporation, and
   * York Container Company.

OZ Master Fund and OZF Credit Opportunities Master Fund sold two
claims each to Bear Stearns & Co., Inc., aggregating $21 million
and $13 million.

Contrarian Funds, LLC, acquired two claims from Bearing and Drive,
Inc., totaling $138,500.

North Pole Capital Master Fund acquired Bear Stearns' claim for
$6,000,000.  Bear Stearns assigned its claim for $567,071 to Loews
Corp.

Headquartered in Lancaster, Pennsylvania, Armstrong World
Industries, Inc. -- http://www.armstrong.com/-- the major
operating subsidiary of Armstrong Holdings, Inc., designs,
manufactures and sells interior finishings, most notably floor
coverings and ceiling systems, around the world.  The Company and
its debtor-affiliates filed for chapter 11 protection on
December 6, 2000 (Bankr. Del. Case No. 00-04469).  Stephen
Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C.
Silberglied, Esq., at Richards, Layton & Finger, P.A., represent
the Debtors in their restructuring efforts.  When the Debtors
filed for protection from their creditors, they listed
$4,032,200,000 in total assets and $3,296,900,000 in liabilities.
(Armstrong Bankruptcy News, Issue No. 71; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


ATA HOLDINGS: Reduces Indianapolis Operations Due to Tight Market
-----------------------------------------------------------------
ATA Holdings Corp. (ATAHQ) discloses plans to reduce its schedule
in Indianapolis as a result of fierce competition in the Indiana
market.  As part of its overall reorganization, the changes will
entail significant adjustments to ATA's flight service through
Indianapolis.

George Mikelsons, ATA's Chairman, President and CEO said, "I want
to thank the people of Indianapolis for all their support of ATA
in our three decades of service in what I believe is the best city
for a corporation to be based.  I am saddened by the necessary
changes to our service in our hometown, but ATA hopes to return to
these routes when the market adjusts to reasonable levels."

Beginning in April, ATA will provide daily flights from
Indianapolis to Orlando, Ft. Myers, Las Vegas and Los Angeles.
Effective February 28, ATA will end service from Indianapolis to
San Francisco, Dallas and New York.  Effective April 10, ATA will
end service from Indianapolis to Cancun, Ft. Lauderdale, Sarasota,
St. Petersburg and Phoenix.

Effective March 28, ATA will end Chicago Express service from
Chicago to Flint, South Bend and Grand Rapids, as well as
recently-announced service from Indianapolis to Evansville,
Milwaukee, South Bend, Fort Wayne and Flint.  Service from
Indianapolis to Gary, IN, previously scheduled to start February
1, will not be initiated.

"We have taken aggressive actions to ensure the long-term
competitiveness of ATA now and in the future," said Gil Viets,
ATA's Executive Vice President and CFO.  "By making these moves
now, we can adapt our business to the industry's difficult market
dynamics and continue on our path of transformation."

The adjustments in Indianapolis are necessary steps in ATA's
reorganization, which include the airline's announcement in
December that it accepted a bid of Southwest Airlines for
acquisition of certain of ATA's Midway Airport lease rights,
providing ATA a continuous presence in Chicago- Midway.  As part
of the deal, ATA and Southwest Airlines entered into a codesharing
agreement for Chicago-Midway routes, representing the first
significant codeshare for both airlines.

"We will be offering our customers who are impacted by this change
a variety of options.  They will be contacted by one of our
Reservations Associates in the near future to discuss their
options," said Doug Yakola, Senior Vice President, Customers and
Ground Operations.

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.


BJ SERVICES: Files Form 10-K Annual Report with SEC
---------------------------------------------------
BJ Services Company (NYSE: BJS; CBOE; PCX) filed its Annual Report
on Form 10-K for the fiscal year ended September 30, 2004.

The Company has conducted a comprehensive review of the Asia
Pacific Region's balance sheet and we have determined that excess
liabilities had accumulated over a period of years, which still
existed at September 30, 2004, in the amount of $12.2 million.
The net effect of these adjustments has been reported in Other
Income in the Consolidated Statement of Operations for the year
ended September 30, 2004.   The following table provides a summary
of consolidated results of operations for the three and twelve
months ended September 30, 2004, as adjusted compared with the
consolidated results of operations for the three and twelve months
ended September 30, 2004 as reported by the Company on
November 2, 2004:

                                 Three Months Ended      Twelve Months Ended
                                    As        As           As          As
                                Reported   Adjusted     Reported    Adjusted
                                9/30/04    9/30/04      9/30/704     9/30/04
                                     (In thousands except per share data)
                                --------   --------     --------    --------
     Revenue                    $694,465   $694,465    $2,600,986
$2,600,986
     Total operating expenses    570,491    567,721(A)  2,165,371
2,162,601
     Operating income            123,974    126,744       435,615
438,385
     Interest expense             (4,068)    (4,068)      (16,389)
(16,389)
     Interest income               3,076      3,076         6,073
6,073
     Other income/(expense), net     224      9,660(A)     83,232
92,668
     Income before income taxes  123,206    135,412       508,531
520,737
     Income tax expense           37,604     38,434       158,866
159,696
     Net income                  $85,602    $96,978      $349,665
$361,041
     Earnings Per Share:
       Basic                       $0.53      $0.60         $2.18
$2.25
       Diluted                     $0.52      $0.59         $2.14
$2.21

     (A)  Includes a $2.8 million income statement reclassification, which
had
          no impact on net income and is unrelated to the Asia Pacific
Region
          adjustments.

BJ Services Company is a leading provider of pressure pumping and
other oilfield services to the petroleum industry.

                         *     *     *

As reported in the Troubled Company Reporter on Jan. 3, 2005, the
Company received a report from a whistleblower alleging that its
Asia Pacific Region Controller had misappropriated Company funds
in fiscal 2001.  The Company began an internal investigation into
the misappropriation and whether other inappropriate actions
occurred in the Region.

The Region Controller admitted to multiple misappropriations
during a 30-month period ended April 2002.  The misappropriations
identified to date total approximately $9.0 million and have been
repaid to the Company.  The misappropriated funds were recorded as
an expense in the Consolidated Statement of Operations in prior
periods and, therefore, no restatement is required.

As a result, the Company expects to record $9.0 million as Other
Income in the Consolidated Condensed Statement of Operations for
the quarter ending December 31, 2004.  The Company is conducting a
review of accrued liabilities and certain other balance sheet
accounts for the Asia Pacific Region and a review of certain tax
records in the region before filing its Form 10-K.  As the Company
continues its investigation, further adjustments may be recorded
in the Consolidated Statement of Operations.

The Company also received whistleblower allegations that illegal
payments to foreign officials were made in the Asia Pacific
Region.  The Audit Committee of the Board of Directors engaged
independent counsel to conduct a separate investigation to
determine whether any such illegal payments were made.  That
investigation, which is also continuing, has found information
indicating that illegal payments to government officials in the
Asia Pacific Region aggregating in excess of $1.5 million may have
been made over several years.

Earlier this month, the Company said it would give a notice of
default to the lenders under its $400 million revolving credit
facility for failing to comply with its covenants to timely
provide audited financial statements.  The delivery of the
company's annual report to the SEC solves this problem.  The
Company also indicated it has no borrowings under its $400 million
Revolving Credit Facility and has cash and cash equivalents and
short-term investments in excess of its other indebtedness.


BOWATER INC: Declares $0.20 per Common Share Quarterly Dividend
---------------------------------------------------------------
The Board of Directors of Bowater Incorporated (NYSE: BOW)
declared a quarterly cash dividend of $0.20 per common share
payable on April 1, 2005, to holders of record at the close of
business on March 10, 2005.  Simultaneously, Bowater's subsidiary,
Bowater Canada Inc., declared a quarterly cash dividend to holders
of its exchangeable shares (TSE: BWX) in the same amount with the
same record and payable dates.

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

                         *     *     *

As reported in the Troubled Company Reporter on Oct. 21, 2004,
Moody's Investors Service downgraded Bowater Incorporated's senior
implied, senior unsecured and issuer ratings to Ba3 from Ba2 due
to systemic newsprint market issues and their potential impact.
The same factors cause the outlook to remain negative.

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


BURLINGTON INDUSTRIES: BII Trust Files 2004 Status Report
---------------------------------------------------------
Rebecca L. Booth, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, informs the U.S. Bankruptcy Court for the
District of Delaware that since the Effective Date, the BII
Distribution Trust -- successor-in-interest to Burlington
Industries, Inc., and its debtor-affiliates -- has worked
diligently to fulfill its obligation under the Plan and the BII
Distribution Trust Agreement.  To recall, the Plan empowers the
Trust to:

   (a) market, liquidate, sell, transfer or otherwise dispose of
       the Distribution Trust Assets;

   (b) make Distributions contemplated by the Plan;

   (c) establish and administer any reserves with respect to
       Disputed Claims;

   (d) object to Claims and resolve these objections;

   (e) pursue any Recovery Actions; and

   (f) liquidate the remaining Claims and make Distributions
       under the Plan.

                         Recovery Actions

On November 12, 2003, the Trust filed 84 Recovery Actions seeking
to avoid and recover alleged preferential transfers made to
various entities before the Petition Date.  The Trust, Ms. Booth
says, is still pursuing 14 of those adversary proceedings and has
dismissed or agreed to dismiss 71 adversary proceedings.  Of the
14 continuing adversary proceedings, 11 defendants have filed
responsive pleadings.  The Trust is currently working to settle
or prosecute these claims.

                   Administrative Claims Issues

The Trust has completed analysis of the Administrative Claims in
the Debtors' reorganization cases.  Ms. Booth relates that:

   -- 18 parties sought payment of Administrative Claims before
      the November 25, 2003 Administrative Claims Bar Date;

   -- 20 parties asserted entitlement to Administrative Claim
      Priority in their proofs of claim; and

   -- 47 parties asserted Reclamation Claims against the Debtors'
      Estates, which were not assigned Claim numbers by the
      the claims agent but which assert entitlement to
      Administrative Claim Priority.

To protect the interests of the Debtors' Estates and ensure a
fair Distribution to all creditors, the Trust had sought and
obtained an extension of the Administrative Claim Objection Bar
Date to October 31, 2004.  The Trust has now reviewed all of the
asserted Administrative Claims asserted in the Debtors'
reorganization cases and filed objections to these Claims.  Five
Administrative Claims, however, remain unresolved.

                         Claims Objection

As of the Effective Date, majority of the work that remained in
the Debtors' Chapter 11 cases relate to resolving the 4,005
Claims that were filed against or scheduled by the Debtors.  Of
these 4,005 Claims, 789 Claims were withdrawn or expunged as of
the Effective Date.  The Trust has 3,216 Claims pending against
the Estates that needed to be analyzed.

Ms. Booth explains that the Plan initially set March 9, 2004, as
the objection bar date for these Claims.  However, to ensure that
the Trust had sufficient time to review, and if necessary object
to these Disputed Claims, the Trust sought and obtained approval
of two extensions of the Claims Objection Bar Date.  Currently,
the Claims Objection Bar Date is set for March 31, 2005.  The
Trust has also sought and obtained relief from certain
requirements of the Local Rules of Bankruptcy Practice and
Procedure of the United States Bankruptcy Court for the District
of Delaware to allow for the most efficient and cost-effective
administration of Claims.

Since the Effective Date, the Trust has diligently reviewed all
pending Claims to ensure that each creditor receives only its
appropriate recovery under the Plan.  During these period, the
Trust has filed a total of 19 Omnibus Objections to Claims,
including two Amendments to certain of the Debtors' Schedules and
Statements of Assets and Liabilities.  As a result, nearly 3,184
Claims have been resolved.  This includes 667 Claims that have
been withdrawn or disallowed and expunged and 2,517 that have
been allowed.  An additional three Claims have been settled since
December 31, 2004.  Currently, 29 Disputed Claims remain
unresolved.

               Sale of Certain Real Property Assets

Ms. Booth reports that the Trust has been working to finalize
asset sales that were in process on the Effective Date.  The
Trust has sold parcels of real property since the Effective Date
and is diligently working to sell or otherwise dispose several
others, for which it has yet to reach agreement on the terms of a
sale agreement with a prospective purchaser or purchasers.

                  WLR Purchase Agreement Matters

Since the closing of substantially all of the Debtors' assets to
WLR Recovery Fund II, LP, in cooperation with Mohawk Industries,
Inc., on November 10, 2003, the Trust has worked with the Buyer
to resolve various issues related to the sale of the Debtors'
assets and business operations to the Buyer.  Moreover, the Trust
has finalized the working capital adjustment calculation required
by the WLR Purchase Agreement and has obtained the release of
restricted cash collateral from a lender following the Buyer's
issuance of a replacement letter of credit related to certain
obligations assumed by the Buyer under the Plan and the WLR
Purchase Agreement.  The Trust, Ms. Booth says, is continuing to
work diligently to resolve certain remaining issues between the
Trust and the Buyer regarding matters relating to the WLR
Purchase Agreement.

                             Reserves

As of December 31, 2004, the Trust has approximately $8,000,000
of reserves for Administrative, Priority, Other Secured, and
Multiple Classification Claims.

Ms. Booth reports that the aggregate amount of Allowed Class 4
Unsecured Claims as of December 31, 2004, is $373,000,000,
including $305,000,000 related to the 7.25% Senior Notes due in
2005 and 2027 and approximately $68,000,000 related to Allowed
Class 4 Unsecured Claims.  Moreover, $10,900,000 remains held in
the Class 4 Unsecured Claim Reserve primarily as undistributed
cash pending resolution of approximately $30,000,000 of disputed
Class 4 claims.  The Reserve includes:

     (i) certain obligations related to the former operations of
         the Burlington Companies to the extent not assumed by
         the Buyer;

    (ii) contingent liabilities, including the liabilities, cost
         and expense related to certain properties owned by BII
         Real Estate;

   (iii) the dissolution of certain Mexico subsidiaries; and

    (iv) other expenses in connection with the administration and
         liquidation of the Trust.

Ms. Booth, however, can give no assurance that the reserves will
be adequate to pay all contingent liabilities since the amounts
of the liabilities are not determinable.

                           Distributions

Ms. Booth informs the Court that the Trust has made Distributions
on account of certain Class 2 "Other Secured" Claims and all
Class 3 "Prepetition Bank" Claims totaling about $385,500,000 on
the Effective Date.  In addition, the Trust has made periodic
distributions to holders of:

   * Allowed Administrative Claims,
   * Allowed Class 1 Claims (Unsecured Priority Claims),
   * Allowed Class C4 Claims (General Unsecured Claims),
   * Allowed Class C5 Claims (Convenience Class Claims), and
   * Priority Tax Claims.

The Trust has also made payments to Professionals on account of
Fee Claims totaling approximately $5,400,000.  The Trust will
continue to make the appropriate Distributions under the Plan, as
Claims are determined to be Allowed Claims.

                       Other Estate Matters

Ms. Booth tells the Court that the Trust is responsible for
administering and resolving certain Estate obligations relating
to the former operations of the Burlington Companies to the
extent that the Buyer did not assume these obligations.  These
obligations include certain prepetition insurance policies
covering worker's compensation and environmental liabilities with
respect to certain real estate formerly owned by the Burlington
Companies.

"The Trust also is working diligently to liquidate and/or
dissolve certain non-Debtor entities located in Mexico," Ms.
Booth adds.  "The Trust likely will need to sell certain assets,
pay certain liabilities and incur certain costs in order to
complete the liquidation and dissolution of these non-Debtor
entities."

Ms. Booth concludes that "[b]ecause the Plan is for the most part
a liquidating plan and the Effective Date has already occurred,
the majority of the matters going forward in these reorganization
cases will relate to the liquidation of the Estate's assets, the
claims administration process and Distributions to creditors."
The Distribution Trust Representative has worked diligently to
assume the administration of the Estates from the Debtors without
interruption and to keep these reorganization cases moving
forward on the right track."

Headquartered in Greensboro, North Carolina, Burlington
Industries, Inc. -- http://www.burlington-ind.com/-- was one of
the world's largest and most diversified manufacturers of soft
goods for apparel and interior furnishings.  The Company filed for
chapter 11 protection in November 15, 2001 (Bankr. Del. Case No.
01-11282).  Daniel J. DeFranceschi, Esq., at Richards, Layton
& Finger, and David G. Heiman, Esq., at Jones Day, represent the
Debtors.  WL Ross & Co. LLC purchased Burlington Industries and
then sold the Lees Carpets business to Mohawk Industries, Inc.
Combining Burlington with Cone Mills, WL Ross created
International Textile Group. Burlington's chapter 11 Plan
confirmed on October 30, 2003, was declared effective on
Nov. 10, 2003. (Burlington Bankruptcy News, Issue No. 58;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


CATHOLIC CHURCH: Spokane Tort Committee Wants to Retain Riddell
---------------------------------------------------------------
Due to the size and complexity of the Catholic Diocese of
Spokane's Chapter 11 case, Spokane's Official Committee of Tort
Claimants seeks Judge William's approval to retain Riddell
Williams P.S. as its legal counsel.

The Tort Committee selected Riddell Williams because of the firm's
experience in bankruptcy and insurance coverage matters, and
because of the other practice specialties available at the firm
that may be required in representing the Tort Committee.

Riddell Williams will:

   (a) Provide legal advice with respect to the duties and
       powers of the Tort Committee in the case, including
       preparation of bylaws;

   (b) Assist the Tort Committee in investigation of the acts,
       conduct, assets, liabilities, and Spokane's financial
       condition and business operation;

   (c) Analyze Spokane's financial condition and to render advice
       to the Tort Committee in determining the course of action
       necessary to reorganize effectively;

   (d) Prepare and file pleadings and documents which may be
       required;

   (e) Represent the Tort Committee at meetings and hearings;

   (f) Represent the Tort Committee in adversary proceedings and
       contested matters and other court proceedings;

   (g) Negotiate with Spokane and other parties-in-interest;

   (h) Participate in Spokane's Chapter 11 case to the extent
       it involves the rights and interest of the constituents of
       the Tort Committee, including, without limitation, the
       formulation of a Chapter 11 plan of reorganization and its
       confirmation;

   (i) Prepare, if necessary, a request for the appointment of
       a trustee or an examiner;

   (j) Prepare, file and contest, if necessary, a motion to
       convert Spokane's Chapter 11 case to Chapter 7;

   (k) Perform any and all other services that are in the
       interest of the Tort Committee relevant to the case; and

   (l) Provide other representation as is appropriate and
       necessary for the Tort Committee's benefit.

Riddell Williams will be compensated for its services in
accordance with the firm's hourly rates.  The firm's attorneys and
paralegals and their billing rates are:

   Robert Amkraut                  $250
   Bruce Borrus                    $315
   David Brenner                   $295
   Mona McPhee                     $190
   Maria Milano                    $250
   Matt Pile                       $190
   Jayson Sowers                   $230
   Sheila Rowden  (paralegal)      $110
   Chris Collison (paralegal)      $110

Joseph E. Shickich, Jr., a Principal at Riddell Williams, has
agreed to reduce his hourly rate from $340 to $330.  George E.
Frasier, also a Principal at Riddell Williams, agrees to cut his
hourly rate from $370 to $350.

Brynne Malone, Chairman of the Tort Committee, assures Judge
Williams, that Riddell Williams is "disinterested" as that term is
defined in Section 101(14) of the Bankruptcy Code as modified by
Section 1107, and does not hold any interest adverse to Spokane's
case.

The Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004.  Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Archdiocese
in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed $11,162,938 in total
assets and $81,364,055 in total debts.  (Catholic Church
Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


CATHOLIC CHURCH: Spokane Claimants Wants to Conduct Examination
---------------------------------------------------------------
Numerous tort claimants of the Diocese of Spokane want to inquire
into the acts, conduct, property, and liabilities of the Diocese,
and matters that may affect the administration of Spokane's
estate.

The Tort Claimants ask Judge Williams for permission to conduct an
examination pursuant to Rule 2004 of the Federal Rules of
Bankruptcy Procedure on:

   (a) Marcia Galluci, an employee of Lutheran Family Services
       and member of one or more Boards of the Diocese; and

   (b) Brynne Malone, Steve Denny, and Marjorie Garza, who are
       alleged holders of claims against Spokane, and are
       presently members of the Official Committee of Tort
       Claimants in Spokane's case.

According to Dillon E. Jackson, Esq., at Foster Pepper &
Shefelman, PLLC, in Seattle, Washington, arrangements for the
examinations will be made by agreement of the counsel, or if
unrepresented, the individual named as required by the rules of
the Court at the offices of Foster Pepper & Shefelman, PLLC, at
the US Bank Building, West 422 Riverside Avenue, Suite 1310, in
Spokane.

Additionally, the Tort Claimants want to examine Joseph Shickich,
Esq., at Riddell Williams P.S., the proposed counsel to the Tort
Committee, to inquire further into the conflicts of interest,
offices and interests held by Mr. Shickich and members of Riddell
Williams.

Mr. Shickich's examination will be conducted at the offices of
Foster Pepper in Seattle.

The Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004.  Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Archdiocese
in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed $11,162,938 in total
assets and $81,364,055 in total debts. (Catholic Church Bankruptcy
News, Issue No. 15; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


CONEXANT SYSTEMS: Records $120.7 Million First Quarter Net Loss
---------------------------------------------------------------
Conexant Systems, Inc. (NASDAQ:CNXT) reported revenues of
$140.6 million for the first quarter of fiscal 2005, which ended
Dec. 31, 2004, in line with its revised outlook provided on
Dec. 13, 2004.  During the quarter, the company reduced inventory
at its distributors by $40 million and at its direct customers by
approximately $10 million, indicating an end-customer demand level
of approximately $190 million.  In addition, the company achieved
its revised expectations for gross margins, pro forma operating
expenses, and pro forma earnings per share -- EPS.

First fiscal quarter 2005 revenues of $140.6 million decreased
34 percent from fourth fiscal quarter 2004 revenues of
$213.1 million, and decreased 21 percent compared to first fiscal
quarter 2004 revenues of $177.3 million.  The first fiscal quarter
2005 pro forma operating loss was $85.9 million, compared to a pro
forma operating loss of $9.6 million in the fourth quarter of
fiscal 2004, and a pro forma operating profit of $17.2 million in
the year-ago quarter.  On a pro forma basis, net loss for the
first fiscal quarter of 2005 was $0.20 per diluted share, compared
to a net loss of $0.04 in the fourth fiscal quarter, and a net
profit of $0.04 per diluted share in the first fiscal quarter of
2004.

Based on generally accepted accounting principles -- GAAP, the net
loss for the first quarter of fiscal 2005 was $120.7 million, or
$0.26 per diluted share, compared to a net loss of $370.5 million,
or $0.79 per diluted share, in the fourth quarter of fiscal 2004,
and net income of $40.6 million, or $0.13 per diluted share, in
the first quarter of fiscal 2004.

Conexant provides pro forma results as a supplement to financial
statements based on GAAP. The company uses pro forma information
to evaluate its operating performance and believes this
presentation provides investors with additional insight into its
underlying operating results.  A full reconciliation between pro
forma and GAAP results is included in the accompanying financial
data.

"Our decision to aggressively reduce channel inventory to match
revenues with end-customer demand as quickly as possible resulted
in a reduction of approximately $50 million in total channel
inventory during the first fiscal quarter," said Dwight W. Decker,
Conexant's chairman and chief executive officer.  "Our significant
progress in reducing inventory and the achievement of our revised
revenue target of $140 million reinforces our belief that
end-customer demand for the quarter was approximately $190
million.

"We maintained gross margins of 40 percent of revenues, excluding
the impact of previously announced inventory charges of
$53 million," Mr. Decker said.  "Through a sharp focus on
collecting receivables and reducing our internal inventory levels,
we significantly improved our working capital metrics and
delivered a modest positive net cash flow from operations."

As expected, pro forma operating expenses for the quarter were
$93 million, compared to pro forma operating expenses of
$95 million for the fourth fiscal quarter of 2004.  Pro forma cash
flow from operations was approximately $4 million.  This was
offset by one-time and non-operating items; a $16 million decline
in the value of the company's holdings in Skyworks Solutions, Inc.
(NASDAQ:SWKS) and SiRF Technology (NASDAQ:SIRF); the $15 million
acquisition of Paxonet Communications in India; $12 million in
restructuring charges and other payments; an $8 million settlement
of intellectual property litigation; and $2 million in capital
expenditures. As a result, Conexant's cash, cash equivalents and
investments declined by $49 million sequentially, from
$440 million in the immediate prior quarter to $391 million at the
end of the first fiscal quarter.

                Second Fiscal Quarter 2005 Outlook

"Historically, the first calendar quarter is a period of reduced
demand for our PC and set-top box related product lines," Mr.
Decker said. "We expect this seasonal dynamic to result in an
overall decline this quarter of approximately 5 percent in
end-customer demand, to about $180 million.  We also plan to drive
the completion of our current inventory reduction initiative,
which should result in the further consumption during the quarter
of approximately $20 million in channel inventory.  Subtracting
inventory consumption from our demand estimate, we expect to
deliver second fiscal quarter revenues of approximately
$160 million, up approximately 15 percent sequentially from the
$141 million in revenue we recorded in the just finished quarter.

"We expect to deliver gross margins between 38 percent and
40 percent of revenues for the second fiscal quarter," Decker
continued.  "We further anticipate that the previously announced
cost-reduction actions will result in a decline in operating
expenses from $93 million in the December-ending quarter to
approximately $89 million in the current quarter.  Given our
outlook for revenue, gross margin, and operating expenses, we
anticipate that our second fiscal quarter pro forma net loss per
share will be $0.07 to $0.08, based on approximately 470 million
fully diluted shares."

                        About the Company

Conexant Systems, Inc. -- http://www.conexant.com/-- is a
fabless semiconductor company that recorded more than $900 million
in revenues in fiscal year 2004.  The company has approximately
2,400 employees worldwide, and is headquartered in Newport Beach,
California.

                         *     *     *

As reported in the Troubled Company Reporter on Dec. 20, 2004,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Newport Beach, California-based Conexant Systems, Inc.,
to 'B-' from 'B' on sharply reduced sales and profitability over
the next few quarters.  The outlook is negative.


COMPUTER ASSOCIATES: Updates Full Fiscal Year 2005 Guidance
-----------------------------------------------------------
Computer Associates International, Inc. (NYSE: CA) reported
financial results for its third fiscal 2005 quarter ended
Dec. 31, 2004 that exceeded previous guidance for revenue and met
expectations for operating earnings.  Also, the Company updated
guidance for the full fiscal year 2005.

"We had another quarter of solid results based on strong execution
of our business strategy," said CA's Interim Chief Executive
Officer Kenneth Cron.  "CA is now in a position to succeed and
move forward to grow the Company; our financials are sound and we
are solidifying a strong management team for the future."

"We are putting the pieces in place to position CA for long-term,
sustainable growth," said CA's President and CEO-elect John
Swainson.  "Today's enterprise IT customers are looking for a more
holistic approach to tackling the challenges of IT systems
management and security.  By redefining our go-to-market strategy,
focusing on our core competencies and aligning our product
portfolio to customer needs, we will grow the business and become
a true partner to our customers."

         Financial Overview: Third Quarter Fiscal Year 2005

Total revenue for the third quarter of fiscal year 2005 was
$911 million, a 9 percent increase over the third quarter of
fiscal year 2004, and $46 million greater than the high end of the
range of the Company's previous guidance.

On a constant currency basis and excluding $15 million in revenue
related to Netegrity products, total revenue for the third quarter
would have increased approximately 3 percent compared to the
similar period last year.

"We are starting to see real traction from our growth
initiatives," said CA Chief Operating Officer Jeff Clarke.  "Our
channel business performed well this quarter, up 17 percent, and
security continues to be a strong segment of our business, with
more than 94 percent bookings growth. CA's cost-cutting efforts
are on track and the Netegrity integration is going extremely
well."

Revenue from CA's Technology Services unit was $64 million for the
quarter, up approximately 8 percent when compared to the similar
quarter last year, due to strong performance in North America and
Asia, particularly related to CA's Identity and Access Management
solutions.

New deferred subscription revenue was $898 million for the
quarter, which includes $845 million in direct bookings and $53
million in indirect bookings. Total indirect bookings for the
quarter were $84 million, a 17 percent year-over-year increase.

CA's total deferred subscription revenue balance as of Dec. 31,
2004, was approximately $4.8 billion.

The Company reported GAAP earnings from continuing operations for
the third quarter of $36 million, compared to GAAP earnings from
continuing operations of $17 million,  reported in the comparable
period last year. GAAP results for the current quarter include an
$18 million, related to the fiscal 2004 shareholder litigation
settlement.

                        Capital Structure

CA generated approximately $366 million in cash from continuing
operations in the third quarter, compared to the $339 million
reported in the similar period last year.

The balance of cash and marketable securities at Dec. 31, 2004,
was approximately $3.33 billion, up from $2.25 billion on Sept.
30, 2004.  With approximately $3.30 billion in total debt
outstanding, the Company has a net cash position of $28 million.
This is the first time in more than nine years that the Company's
cash and marketable securities balance exceeds its total debt.

                Developments During the Quarter

During the quarter, CA made a number of important advances,
including:

    * Naming 26-year industry veteran John Swainson president and
      CEO-elect;

    * Enhancing its capital structure with a successful private
      placement of $1 billion senior unsecured notes and a
      four-year $1 billion revolving credit facility;

    * Selecting SAP for its enterprise resource planning system
      and Accenture to assist with the implementation, which is
      already underway;

    * Outlining its EMEA growth strategy with a strong focus on
      small and medium businesses and expanded OEM partnerships;

    * Completing its acquisition of Netegrity ahead of schedule;

    * Offering CA Wireless Site Management 4.0 to bolster and
      streamline Wi-Fi security management; and

    * Following its successful acquisition of PestPatrol,
      announcing eTrust PestPatrol Anti-Spyware r5.

       Outlook for the Remainder of Fiscal Year 2005

The following updated guidance is based on current expectations
and represents "forward-looking statements":

    For the fourth quarter ending March 31, 2005:

    * Revenue in the range of $900 million to $920 million;
    * GAAP earnings per share in the range of $0.07 to $0.08; and
    * Diluted operating (non-GAAP) earnings per share in the range
      of $0.19 to $0.20.

    For the full year, ending March 31, 2005:

    * Revenue in the range of $3.526 billion to $3.546 billion;
    * GAAP earnings per share in the range of $0.06 to $0.07; and
    * Diluted operating (non-GAAP) earnings per share in the range
      of $0.81 to $0.82.

"With solid execution and upside from our recent acquisitions, we
are raising the midpoint of both our revenue and earnings
guidance," said Clarke.  "Cash flow continues to remain on track
for modest growth this year."

                       About the Company

Computer Associates International, Inc. (NYSE:CA) --
http://ca.com/-- delivers software and services across
operations, security, storage, life cycle and service management
to optimize the performance, reliability and efficiency of
enterprise IT environments.  Founded in 1976, CA is headquartered
in Islandia, N.Y., and serves customers in more than 140
countries.

                         *     *     *

As reported in the Troubled Company Reporter on Nov. 17, 2004,
Moody's Investors Service assigned a Ba1 to Computer Associates
International's proposed $750 million senior unsecured notes.
Proceeds of the current offering will be used to refinance
$825 million senior notes due in April 2005.  Concurrently,
Moody's assigned a senior implied rating of Ba1.  The rating
outlook is stable.

The Ba1 rating and stable outlook reflect Moody's expectation for
sustained growth in client billings and bookings, strengthened
corporate governance structure, conservative acquisition strategy
and share repurchase policy, and improved liquidity.


COPYTELE INC: Auditors Raises Going Concern Doubt
-------------------------------------------------
Copytele, Inc., has had net losses and negative cash flows from
operations in each year since inception, and it may continue to
incur substantial losses and experience substantial negative cash
flows from operations.  Although payments from Futaba Corporation
of Japan, under an agreement with Futaba, provided substantial
cash from operations during the year ended October 31, 2002, since
the agreement with Futaba terminated in June 2002, Copytele will
not receive any further payments under this agreement.

The Company has incurred substantial costs and expenses in
developing its encryption and flat panel display technologies and
in its efforts to produce commercially marketable products
incorporating its technology.  Copytele has had limited sales of
products to support its operations from inception through October
31, 2004.  Set forth below are the Company's net losses, research
and development expenses and net cash used in operations for the
three fiscal years ended October 31, 2004:

                                            Fiscal Year Ended
                                            October 31, 2004

   Net loss.................................. $ 3,360,655
   Research and development expenses.........   2,164,427
   Net cash used in operations...............   1,025,122

                                            Fiscal Year Ended
                                            October 31, 2003

   Net loss.................................. $ 3,114,411
   Research and development expenses.........   1,807,742
   Net cash used in operations...............   958,501

                                            Fiscal Year Ended
                                            October 31, 2002

   Net loss.................................. $ 3,285,240
   Research and development expenses.........   1,625,974
   Net cash used in operations...............   431,471

                      Going Concern Doubt

Copytele may need additional funding in the future, which may not
be available on acceptable terms and, if available, may result in
dilution to its stockholders.

Management anticipates that, if cash generated from operations is
insufficient to satisfy the Company's requirements, it will
require additional funding to continue research and development
activities and market its products.  The auditor's report on
Copytele's financial statements as of October 31, 2004, states
that the net loss incurred during the year ended October 31, 2004,
the accumulated deficit as of that date, and other factors raise
substantial doubt about the Company's ability to continue as a
going concern.  The auditor's report on the Company's financial
statements for the years ended October 31, 2003 and 2002 contained
a similar statement.

Copytele Inc.'s principal operations are the development,
production and marketing of multi-functional encryption products
that provide information security for domestic and international
users over virtually every communications media and the
development, production and marketing of thin, high-brightness,
flat panel video displays.


DEL MONTE: Fitch Rates $250MM 6-3/4% Sr. Subordinated Notes at BB-
------------------------------------------------------------------
Fitch Ratings assigns a 'BB-' rating to Del Monte Foods Company's
new $250 million 6 3/4% privately placed senior subordinated notes
due Feb. 15, 2015.  Fitch also expects to rate Del Monte's new
secured credit facility, projected to close in early February
2005.  Fitch currently rates Del Monte's debt:

     -- Senior secured bank facility 'BB+';
     -- Senior subordinated notes 'BB-'.
     -- Rating Outlook Stable.

Del Monte's total debt as of October 31, 2004 was $1.5 billion.

Proceeds from Del Monte's $250 million senior subordinated debt
issuance will be used to partially fund the repurchase of its 9
1/4% senior subordinated notes due 2011.  The newly issued
unsecured notes will rank equally with all of Del Monte
Corporation's - DMC -- other unsecured senior subordinated
indebtedness and junior to DMC's senior indebtedness.  The notes
will be guaranteed on a subordinated basis by DMC's parent, Del
Monte Foods Company -- DMFC, and on a senior subordinated basis by
certain of DMC's direct and indirect U.S. subsidiaries.

Fitch expects the reduction in Del Monte's average total debt over
time and more favorable pricing on the newly issued senior
subordinated notes and pending secured credit facility to render
material annual interest cost savings.  Terms of Del Monte's
pending new credit facility are anticipated to be less restrictive
than the company's existing credit facility.  The new credit
facility is expected to include a six-year revolver of
$350 million, a six-year term A loan of $200 million, and a
seven-year term B loan of $400 million.  Initial borrowings of the
facility are anticipated to be used to fund a portion of the
repurchase of Del Monte's 9 1/4% senior subordinated notes
tendered on Jan. 24, 2005.

The ratings reflect Del Monte's commitment to continue debt
reduction in the near term and the expectation that credit metrics
will continue to improve.  The Stable outlook encompasses Fitch's
expectation that integration-related synergies and selective
pricing action will help lessen the effect of the current
difficult commodity cost environment.  For more information, see
Fitch's Nov. 12, 2004, press release upgrading Del Monte's senior
secured bank facilities and senior subordinated notes ratings
('Fitch Ratings Upgrades Del Monte; Rating Outlook Stable') and
Fitch's Jan. 21, 2005, credit analysis on Del Monte Foods Company,
both of which are available on the Fitch Ratings web site at
http://www.fitchratings.com/

Del Monte produces, distributes and markets shelf-stable branded
and private label food and pet products in the U.S. retail market.
Its market shares in:

     * private-label soup 70%,
     * canned fruit 42%,
     * canned seafood 42%,
     * canned vegetables 23%,
     * solid tomatoes 21%, and
     * infant food 12%.

Del Monte's consumer brands include:

     * Del Monte,
     * StarKist,
     * S&W,
     * Contadina,
     * College Inn, and
     * Nature's Goodness.

Del Monte also has a competitive position in dry and wet dog and
cat food and snacks with such brands as 9Lives, Kibbles 'n Bits,
Pup-Peroni, and Pounce.  On a GAAP-reported basis, Del Monte's
Consumer and Pet Products business segments represented 75% and
25% of fiscal 2004 sales and 61% and 39% of fiscal 2004 operating
income (excluding corporate expenses), respectively.


DEL MONTE: S&P Rates Proposed $950M Senior Sec. Facility at BB
--------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on food
processor Del Monte Corp. to positive from stable.

At the same time, Standard & Poor's assigned its 'BB' rating and
'1' recovery rating to Del Monte's proposed $950 million senior
secured credit facility, indicating Standard & Poor's high
expectation of full recovery of principal (100%) in the event of a
payment default.  n addition, Standard & Poor's assigned a 'B'
rating to Del Monte's proposed $250 million senior subordinated
notes due in 2015.

Standard & Poor's also affirmed its existing ratings on Del Monte
and parent company, Del Monte Foods Co., including its 'BB-'
corporate credit ratings.  San Francisco, California-based Del
Monte will have $1.4 billion in lease-adjusted total debt
outstanding at closing.

The outlook revision reflects the company's successful integration
of H.J. Heinz Co.'s North American pet food, seafood, private
label soup, and infant feeding operations that were acquired in
2002.  In addition, Del Monte has made progress in de-leveraging
the balance sheet following the acquisition during a period of
rising commodity costs and increased competition.  "Both operating
margins and credit measures at Del Monte have strengthened, and we
believe Del Monte will continue to improve credit measure over the
medium term through steady cash flow generation and debt
reduction," said Standard & Poor's credit analyst Ronald Neysmith.

Proceeds from the proposed note issue, in combination with the
credit facility, will be used to refinance certain existing
indebtedness, including the company's existing senior secured
credit facility and for general corporate purposes.  Ratings on
Del Monte's existing $1.2 billion of senior secured credit
facilities will be withdrawn upon closing of the new facilities.


DESA HOLDINGS: Files First Amended Joint Liquidating Plan
---------------------------------------------------------
DESA Holdings Corp. and its debtor-affiliate filed their First
Amended Joint Plan of Reorganization with the U.S. Bankruptcy
Court for the District of Delaware on Jan. 21, 2004.  A full-text
copy of the Plan and the Disclosure Statement is available for a
fee at:

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

The Plan will consolidate and monetize all of the Debtors'
estates.  A Post Confirmation Trust will be established where the
Debtors will assign and transfer all of their rights, titles, and
interests.  It will not be deemed as a successor-in-interest to
the Debtors but is intended to qualify as a "grantor trust" for
income tax purposes.

Prepetition lenders owed $154,886 are expected to recover 16% of
their allowed claims.  General unsecured creditors will see about
5% of the $31.6 million owed to them.

These claims will be paid in full:

    * administrative claims totaling $1,962,819;
    * priority tax claims totaling $270,349
    * other secured claims totaling $922,524
    * other priority claims totaling $11,192.

Holders of:

    * intercompany claims;
    * equity interests; and
    * subordinated notes amounting to $136,200,000

will not receive anything.

The Debtors and the Official Committee of Unsecured creditors
agreed to set up a liquidation reserve between $750,000 to
$1,000,000 to adequately fund the administration of the Plan.

Headquartered in Bowling Green, Kentucky, DESA International, Inc.
manufactured and marketed high-quality zone heating products,
hearth products, security lighting and specialty tools for use in
homes and commercial buildings.  The Company and its affiliate
filed for chapter 11 protection (Bankr. Del. Case No. 02-11672) on
June 8, 2002.  James H.M. Sprayregen, Esq., James W. Kapp, III,
Esq., and Scott R. Zemnick, Esq., at MKirkland & Ellis, LLP, and
Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl Young Jones &
Weintraub, P.C., represent the Company.  When the Company filed
for protection from its creditors, it listed $50 million in assets
and $100 million in debts.


DOMTAR INC: Canadian Dollar Appreciation Lowers Profit by $175M
---------------------------------------------------------------
Domtar, Inc., reported a net loss of $42 million ($0.19 per common
share) in 2004 compared to a net loss of $193 million ($0.86 per
common share) in 2003.  When excluding specified items, net loss
in 2004 was $33 million ($0.15 per common share) compared to a net
loss of $10 million ($0.05 per common share) in 2003.

    Summary of results
    (In millions of Canadian dollars,
     unless otherwise noted)
                                                            2004        2003
    ------------------------------------------------------------------------
-
    Sales                                                 $5,115      $5,167
    Operating profit (loss)(1)                               $49
($95)
    Net loss                                                ($42)
($193)
    Net loss per common share                             ($0.19)
($0.86)

    Excluding specified items(1)
    Operating profit                                         $66        $126
    Net loss                                                ($33)
($10)
    Net loss per common share                             ($0.15)
($0.05)
    ------------------------------------------------------------------------
-

"These are trying times for companies with a large manufacturing
base in Canada whose products are sold in US dollars.  Although
Domtar has grown its U.S. presence to approximately 50% of its
asset base over the last five years, the Company has nonetheless
suffered from the sharp increase in the value of the Canadian
dollar, leading it to post a loss for 2004.  Domtar has also faced
unprecedented cost increases for purchased wood and freight, as
well as more duties on softwood lumber exports to the U.S. The
combined effect of all these factors represents a reduction of
$262 million in operating profit when compared to 2003.  In fact,
these headwinds were so strong that they more than offset benefits
from improved market conditions and restructuring initiatives,
including an announced reduction of 8% of our workforce," stated
Raymond Royer, President and Chief Executive Officer of Domtar.

The $131 million decrease in operating profit excluding specified
items in the Papers segment was mainly attributable to the
negative impact of a weaker US dollar and higher costs,
particularly for purchased wood and freight.  These factors were
partially offset by higher shipments for both paper and pulp,
higher average selling prices for pulp, the realization of savings
from restructuring activities and lower depreciation expense.

The $1 million increase in operating profit excluding specified
items in the Paper Merchants segment was primarily due to higher
shipments, partially offset by the negative impact of a weaker
U.S. dollar.

The $53 million improvement in operating profit excluding
specified items in the Wood segment was mainly attributable to
significantly higher selling prices for lumber.  Partially
mitigating the rise in operating profit were the negative impact
of a weaker US dollar, higher countervailing and antidumping
duties imposed on our softwood lumber exports to the U.S. (at a
stable rate of 27%), higher road construction and maintenance
costs, as well as higher depreciation expense.  Since
May 22, 2002, Domtar has made and expensed cash deposits of
$145 million for export duties.

The $4 million increase in operating profit excluding specified
items in the Packaging segment (our 50% share of Norampac, Inc.)
was attributable to higher average selling prices for both
containerboard and corrugated boxes as well as lower chemical and
energy costs, partially offset by the negative impact of a weaker
US dollar and higher freight costs.

                     Liquidity and Capital
                     2004 Compared to 2003

Cash flows provided from operating activities in 2004 amounted to
$122 million compared to $348 million in 2003.  Additions to
property, plant and equipment amounted to $204 million in 2004
compared to $236 million in 2003. Free cash flow in 2004 was
negative $41 million compared to positive $123 million in 2003.

Domtar's total long-term debt decreased by $25 million, largely
due to the $127 million positive impact of a weaker US dollar on
its US dollar denominated debt, partially offset by additional net
borrowings of $102 million.  Domtar's net debt-to-total
capitalization ratio as at December 31, 2004, stood at 49.5%
compared to 48.4% as at December 31, 2003.

                            Outlook

"The year 2005 may be just as challenging as 2004, especially
given that no cost cutting program can compensate for the rapid
rise seen in the value of the Canadian dollar.  That being said,
Domtar will focus on delivering targeted savings of $100 million
stemming from announced restructuring initiatives and will
continue to review the viability of each of its Canadian
operations as well as investment plans for each of its mills.
Finally, Domtar will continue to optimize the use of its assets
with initiatives aimed at improving its value proposition to
customers such as the development of a full line of papers for
environmentally sensitive companies and the deployment of an
integrated supply chain, which will allow Domtar to develop
customer specific supply programs," added Domtar's President and
CEO.

Based in Montreal, Quebec, Domtar, Inc., is a major North American
producer of fine papers, pulp, and lumber.  More than 60% of the
company's sales come from its paper segment, which churns out a
variety of communication and specialty papers, including offset
printing paper, photocopying paper, fine paper, and technical
papers.

                         *     *     *

As reported in the Troubled Company Reporter on Oct. 28, 2004,
Standard & Poor's Ratings Services revised its outlook on Domtar
Inc. to negative from stable.  At the same time, the 'BBB-' long-
term corporate credit, the 'BBB-' senior unsecured debt, and the
'BB' global scale preferred stock ratings were affirmed.

"The outlook revision reflects concerns that profitability and
cash flow generation will be weaker-than-expected as a result of
the appreciation of the Canadian dollar," said Standard & Poor's
credit analyst Daniel Parker.


E*TRADE FINANCIAL: Posts $98.4M Net Income for 2004 4th Quarter
---------------------------------------------------------------
E*TRADE Financial Corporation (NYSE: ET) reported results for its
fourth quarter ended December 31, 2004, reporting net income of
$98.4 million, or $0.26 per diluted share, compared to net income
of $107.5 million, or $0.27 per share, in the same quarter a year
ago.  The reported fourth quarter earnings per share include a
$0.02 benefit from a lower corporate tax rate.  Net revenue for
the fourth quarter totaled $409.5 million, a 21 percent increase
over the prior quarter and a 10 percent increase over the year ago
period.

For the year ending December 31, 2004, E*TRADE FINANCIAL reported
earnings of $1.01 per share on net income of $389.1 million
compared to $0.55 per share and net income of $203.0 million in
2003.  Total assets/deposits in customer accounts reached a record
level of $100.4 billion at year-end -- an increase of 20 percent
sequentially and 21 percent year over year.

"In 2004, we proved that you can increase profitability and
earnings, while sharing the rewards of financial success with
customers," said Mitchell H. Caplan, Chief Executive Officer,
E*TRADE FINANCIAL Corporation.  "Our record-breaking year
continues to validate the strength of our model and underscores
our commitment to passing on unique advantages to customers.  In
2005, we intend to deliver continued value to our customers and
shareholders by enhancing our customer segmentation and increasing
integration."

Other selected highlights from the fourth quarter of 2004:

     -- added 61,000 net new brokerage accounts;

     -- generated a record-setting consolidated operating
        margin(1) of 31 percent;

     -- expanded E*TRADE FINANCIAL Center locations to include
        Palo Alto, California, and Washington, D.C.

     -- repurchased approximately 4 million outstanding shares for
        $56 million at a weighted average price of $13.86 per
        share; and

     -- announced an additional $200 million repurchase program in
        December.

Historical monthly metric data from January 2003 to December 2004
can be found on the E*TRADE FINANCIAL investor relations site at
http://www.etrade.com/

The E*TRADE FINANCIAL family of companies provide financial
services including brokerage, banking and lending for retail,
corporate and institutional customers.  Securities products and
services are offered by E*TRADE Securities LLC (Member NASD/SIPC).
Bank and lending products and services are offered by E*TRADE
Bank, a Federal savings bank, Member FDIC, or its subsidiaries.

                         *     *     *

As reported in the Troubled Company Reporter on Jan 21, 2005,
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.


EASTMAN HILL: Moody's Junks Class B-1 Notes & Securities
--------------------------------------------------------
Moody's Investors Service announced that it has downgraded its
ratings of the Classes of Notes issued by Eastman Hill Funding I,
Ltd., a collateralized debt obligation issuance:

   1. $10,000,000 Class A-3 Floating Rate Notes Due 2031:
      from Aa3 on watch for downgrade to A2 no longer on watch for
      downgrade.

   2. $24,000,000 Class B-1 Fixed Rate Notes Due 2031:
      from Caa2 on watch for downgrade to Ca no longer on watch
      for downgrade.

   3. $25,000,000 Combination Securities Due 2031:
      from Caa2 on watch for downgrage to Caa3 no longer on watch
      for downgrade.

Moody's stated that these rating downgrades were prompted
primarily by deterioration in the credit quality of the underlying
collateral pool.  Moody's also noted that the transaction, which
closed in July 2001, is currently failing its Default Probability
Factor Tests.

Moody's also announced that it has removed the Classes of Notes
issued by Eastman Hill Funding I, Ltd. from the Moody's Watchlist
for possible downgrade and has confirmed the current ratings:

   1. $512,000,000 Class A-1 Floating Rate Notes Notes Due 2031:
      Rating confirmed at Aaa.

   2. $10,000,000 Class A-1 Fixed Rate Notes Due 2031:
      Rating confirmed at Aaa.

   3. $522,000,000 Class A-2 Interest Only Notes Due 2031:
      Rating confrmed at Aaa.


FAIRFAX FINANCIAL: Will Webcast Year-End Results on February 11
---------------------------------------------------------------
Fairfax Financial Holdings Limited (TSX:FFH.SV) (NYSE:FFH) will
hold a conference call at 8:30 a.m. Eastern Time on Friday,
February 11, 2005, to discuss its 2004 year-end results which will
be announced after the close of markets on Thursday, February 10
and will be available at that time on its website at:
http://www.fairfax.ca/ The call, consisting of a presentation by
the company followed by a question period, may be accessed at
(888) 769-8514 (Canada and U.S.) or 1 (712) 257-2114
(International) with the passcode "Fairfax".

A replay of the call will be available from shortly after the
termination of the call until 5:00 p.m. Eastern Time on Friday,
February 25, 2005.  The replay may be accessed at (866) 453-2339
(Canada and U.S.) or 1 (203) 369-1228 (International).

Fairfax Financial Holdings Limited is a financial services holding
company, which, through its subsidiaries, is engaged in property
and casualty insurance and reinsurance, investment management and
insurance claims management.

                         *     *     *

As reported in the Troubled Company Reporter on Nov. 12, 2004,
Fitch Ratings commented that Fairfax Financial Holdings Limited's
ratings and Rating Watch Negative status are unaffected by its
recent disclosures via its third-quarter 2004 financial filings
and investor conference held on November 8, 2004.

These ratings remain on Rating Watch Negative by Fitch:

   * Fairfax Financial Holdings Limited

     -- No action on long-term issuer rated 'B+';
     -- No action on senior debt rated 'B+'.

   * Crum & Forster Holdings Corp.

     -- No action on senior debt rated 'B'.

   * TIG Holdings, Inc.

     -- No action on senior debt rated 'B';
     -- No action on trust preferred rated 'CCC+'.

   * Members of the Fairfax Primary Insurance Group

     -- No action on insurer financial strength rated 'BBB-'.

   * Members of the Odyssey Re Group

     -- No action on insurer financial strength rated 'BBB+'.

   * Members of the Northbridge Financial Insurance Group

     -- No action on insurer financial strength rated 'BBB-'.

   * Members of the TIG Insurance Group

     -- No action on insurer financial strength rated 'BB+'.

   * Ranger Insurance Co.

     -- No action on insurer financial strength rated 'BBB-'.

The members of the Fairfax Primary Insurance Group include:

   * Crum & Forster Insurance Co.
   * Crum & Forster Underwriters of Ohio
   * Crum & Forster Indemnity Co.
   * Industrial County Mutual Insurance Co.
   * The North River Insurance Co.
   * United States Fire Insurance Co.
   * Zenith Insurance Co. (Canada)

The members of the Odyssey Re Group are:

   * Odyssey America Reinsurance Corp.
   * Odyssey Reinsurance Corp.

Members of the Northbridge Financial Insurance Group include:

   * Commonwealth Insurance Co.
   * Commonwealth Insurance Co. of America
   * Federated Insurance Co. of Canada
   * Lombard General Insurance Co. of Canada
   * Lombard Insurance Co.
   * Markel Insurance Co. of Canada

The members of the TIG Insurance Group are:

   * Fairmont Insurance Company
   * TIG American Specialty Ins. Company
   * TIG Indemnity Company
   * TIG Insurance Company
   * TIG Insurance Company of Colorado
   * TIG Insurance Company of New York
   * TIG Insurance Company of Texas
   * TIG Insurance Corporation of America
   * TIG Lloyds Insurance Company
   * TIG Specialty Insurance Company


FEDERAL-MOGUL: Dr. Peterson Says T&N Asbestos Liability is $11BB
----------------------------------------------------------------
AS reported in the Troubled Company Reporter on Nov. 17, 2004,
Federal-Mogul Corporation and its debtor-affiliates, the Official
Committee of Unsecured Creditors, the Official Committee of
Asbestos Claimants, the Official Committee of Equity Security
Holders, the Legal Representative of Future Asbestos Claimants,
and JPMorgan Chase Bank, as Administrative Agent for the Debtors'
prepetition lenders, ask the U.S. Bankruptcy Court for the
District of Delaware to estimate the claims of T&N Pension Trustee
Limited and Alexander Forbes Trustee Services Limited relating to
the T&N Pension Scheme for the purpose of:

   -- voting on the Plan; and

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

               U.K. Administrators Won't Participate
                      in the Estimation Hearing

Christopher S. Sontchi, Esq., at Ashby & Geddes, in Wilmington,
Delaware, tells the Bankruptcy Court that the Joint Administrators
of the U.K. Debtors will be present at the estimation hearing, but
will not participate substantively in the estimation process
itself.

If the Plan is confirmed in its current form, the Administrators
assert that they would not propose parallel Schemes or Company
Voluntary Arrangements, which are stated to be a condition to the
effectiveness of the Plan.  Even if that condition were waived,
the Plan would not be effective in the United Kingdom.  Rather, a
process of controlled realization, in which businesses and assets
are sold in the manner judged by the Administrators likely to
achieve the best realization, would better serve their
constituents.

The Administrators are not challenging the Estimation, but believe
it necessary to make their position clear that the Bankruptcy
Court's rulings concerning the estimation could not be accepted as
binding on:

    -- the Administrators acting under U.K. insolvency laws in
       reaching their best judgments concerning distributions or
       reserves; or

    -- the U.K. Court should it ever be called upon to review the
       Administrators' actions.

Mr. Sontchi relates that in the United Kingdom, the responsibility
of determining the likely level of asbestos liabilities affecting
the U.K. Debtors, whether regarding distributions or in analyzing
the fairness of a Scheme or CVA, falls in the first instance to
the Administrators.  Any estimation of the Bankruptcy Court will
not, and cannot, relieve the Administrators of their
responsibility under U.K. law.

Furthermore, in the event that a dispute arose that required the
U.K. Court to take a view on the likely extent of asbestos
liabilities, the U.K. Court would be required to exercise its
jurisdiction de novo and could not simply accept and apply a
pre- existing decision without further inquiry.

Accordingly, the Administrators believe their active participation
in the estimation hearing would be unwarranted and inappropriate.

               PI Claims against T&N is $2.4 Billion,
                          PD Committee Says

The Official Committee of Property Damage Claimants will
demonstrate at the estimation hearing that the Asbestos Claimants
Committee's $11 billion estimate is by far out of the line among a
range of estimates previously done by other parties-in-interest:

                         Range of Estimates
                   Asbestos Personal Injury Claims
                           (In Billions)

    Debtors' Most Recent 10-Q                           $1.4
    Debtors' Disclosure Statement (NERA)(Prepetition)    1.6
    Property Damage Committee (Nov. 2004)                2.4
    T&N Pension Trustees*                                3.8
    U.K. Administrators**                                5.3
    Asbestos Claimants Committee (Feb. 2004)             5.7
    Asbestos Claimants Committee (Oct. 2004)             6.6
    Asbestos Claimants Committee (Nov. 2004)            11.0

     * The U.K. Pension Trustees' estimate ranges from $2.1 to
       $5.5 billion.  The $3.8 figure is the average.

    ** The U.K. Administrators' estimate is an effort to replicate
       Mark Peterson's methodology, and thus the actual estimate
       may be lower.

                  Eagle-Picher Method of Estimation

The decision of the bankruptcy court in In re Eagle-Picher
Industries, Inc. 189 B.R. 681 (Bankr. S.D. Ohio 1995), aff'd,
1996 U.S. Dist. LEXIS 22742 (S.D. Ohio 1996), provides a
comprehensive framework for the estimation of pending asbestos
personal injury claims and future demands.  The basic methodology
for estimating asbestos personal injury claims is not complicated.
The exercise requires:

    (1) determination of the value of claims for each type of
        disease;

    (2) determination of the numbers of pending claims, and
        anticipated future demands of each disease type that
        likely will be entitled to compensation;

    (3) multiplication of the value for each disease by the number
        of projected compensable claims; and

    (4) adjustment upward for inflation to the date of anticipated
        payment, and then a discounting of the inflated amount
        back to present value.

In Eagle-Picher case, the asbestos personal injury claims "are to
be valued as of the filing date of the petition."  Thus, any
estimation methodology used in the Debtors' case must value
pending claims and future demands as of the October 1, 2001, the
Petition Date.  The Eagle-Picher court explicitly rejected the
suggestion that claims could be estimated based upon the value
they might receive through some bankruptcy mechanism, like the
Section 524(g) trust.

Eagle-Picher also established a basic principle for determining
claim values for pending claims, finding that claim value should
be based on the closed prepetition claims in the Debtor's claims
database.

As to future claims, the Eagle-Picher court identifies [seven]
considerations that should inform the estimate:

    (1) The estimate should be based primarily on the history of
        the company, particularly where there is no definitive
        showing that any other company had a product line
        identical to that of the debtor.  However, this
        consideration does not rule out the desirability of
        considering trends general to the industry, particularly
        regarding the rate of filing of claims;

    (2) The total number of claims should be estimated;

    (3) The estimation of claims should categorize them by disease
        and occupation, as well as other factors;

    (4) Valuation of claims should be based upon settlement values
        for claims close to the filing date of the bankruptcy
        case;

    (5) A reasonable rate for indemnity increase with time must be
        determined so that a future value of filing date indemnity
        values can be comparable;

    (6) A lag time gleaned from the tort system must be determined
        in order that there be accuracy in projecting future
        values; and

    (7) A discount rate must then be applied to bring the future
        nominal value of claims back to the filing date.

                    Peterson v. Cantor Estimates

Robin Cantor, the Property Damage Committee's expert, has a Ph.D.
in economics and has been a teacher, economist, and consultant for
more than 20 years, specializing in liability claims analysis,
environmental and energy economics, statistical modeling, and risk
management.  She has served previously as the Program Director for
Decision, Risk, and Management Sciences, a research program of the
National Science Foundation.  She currently serves as the Director
of the Insurance and Financial Services practice of Navigant
Consulting, Inc., a publicly traded consulting firm.

Theodore J. Tacconelli, Esq., at Ferry, Joseph & Pearce, P.A., in
Wilmington, Delaware, relates that Dr. Cantor analyzed and found
108,240 pending claims and 275,550 closed claims.  Dr. Cantor
found that the Debtors' historic claim values in the years prior
to the bankruptcy were increasing for mesothelioma, but
essentially were flat or declining for lung cancer, other cancers,
asbestosis and pleural disease.  Accordingly, she assumed a 14%
annual increase in claim value for mesothelioma for the first five
years of her forecast, starting from the weighted average value
for 1998-2001, and no increase thereafter.  Claims values for
other diseases were hold at the 1998-2001 weighted average for the
entire forecast period.  The logic of Dr. Cantor's methodology is
compelling and is completely consistent with the framework set
forth in Eagle-Picher, Mr. Tacconelli remarks.

                     Dr. Cantor's Claim Values
        (First Five Years of Forecast Compared to 1998-2001)

                            Lung    Other                Pleural
       Year   Mesothelioma  Cancer  Cancers  Asbestosis  Disease
       ----   ------------  ------  -------  ----------  -------
    1998-2001    $68,886   $13,011  $5,664     $2,600     $915
         2002     81,502    13,011   5,664      2,600      915
         2003     96,456    13,011   5,664      2,600      915
         2004    114,153    13,011   5,664      2,600      915
         2005    135,098    13,011   5,664      2,600      915
         2006    159,886    13,011   5,664      2,600      915

In contrast, Mark Peterson is trained as a lawyer and social
psychologist.  He is retained regularly as an expert on claims
estimation by asbestos claimants committees and has reliably
produced the highest estimates among all parties, in case after
case.  In the Debtors' case, Dr. Peterson has rung up over
$800,000 in fees, and this was before the preparation of his
report for estimation hearing.

Mr. Tacconelli notes that contrary to the instruction of
Eagle- Picher, the ACC's estimate ignores the Debtors' claims
history and derives claim values instead from the scheduled values
established in the trust distribution procedures.  The TDPs,
however, are nothing more than a set of values agreed by the ACC
and the Futures Representative, based on Dr. Peterson's own
recommendations.

The potential for manipulation is self-evident in Federal-Mogul's
case, Mr. Tacconelli contends.  Representatives of claimants who
will recover from the trust set the TDP schedule values.  These
representatives have a self-interest in setting claim values as
high as possible to drive down the distribution ratios for other
creditors under the Plan, thereby increasing the value of the
stock that the trust will receive.

Dr. Peterson makes two fundamental errors in his estimate --
overstating the claim value for mesothelioma and the claiming rate
or the propensity to sue for that disease.  Then, because Dr.
Peterson links the values for other diseases to the skewed
mesothelioma forecast, Mr. Tacconelli says, Dr. Peterson's errors
cascade through the entire forecast resulting in his preposterous
estimate of more than $11 billion.

                       Peterson Claim Values
                     (Forecast v. 2001 Actual)

                             Lung      Other      Non-
    Year     Mesothelioma    Cancer    Cancers    malignant
    ----     ------------    ------    -------    ---------
    2001       $102,361     $13,065     $3,937     $1,021
   (actual)

    2002        163,711      27,630     13,170      6,604
   (forecast)
             ------------    ------    -------    ---------
    DIFFERENCE      +59%       +211%      +334%      +647%

Dr. Peterson's estimate is premised on the speculative and
unproveable allegation that plaintiffs' lawyers would have
successfully "racheted up" the litigation pressure on T&N due to
the disclosure of certain company documents in 1995 and the
publication of a muckraking book in England in 2000, alleging that
T&N failed to acknowledge in a timely manner the health risks to
its U.K. employees caused by asbestos exposure.

"This is not science or anything remotely admissible as expert
testimony under Rule 702; it is creative advocacy by a
lawyer-turned-expert witness in an effort to provide post hoc
justification for massive increases in liability not supported by
the company's own claims history," Mr. Tacconelli remarks.

Mr. Tacconelli asserts that Dr. Cantor's estimates are far more
reasonable than that of Dr. Peterson's.  For these reasons, the PD
Committee contends, the Court should conclude that asbestos
personal injury claims by U.S. claimants against T&N Limited be
valued at $2.4 billion.

             Adopt Dr. Peterson's $11 Billion Estimate,
                  Asbestos Claimants Committee and
                    Futures Representative Insist

The only challenge to Dr. Peterson's estimate comes in the
proposed expert testimony of Dr. Cantor.  Maribeth L. Minella,
Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington,
Delaware, asserts that Dr. Cantor is inexperienced in calculating
asbestos liabilities.  Dr. Cantor employed an untested and
non- standard methodology to support her opinion that T&N's
asbestos liabilities in the United States are not likely to exceed
$2.4 billion.

"Dr. Cantor has brought little more to her task than her
background in mathematics, and even those skills have failed her
at some points.  Her analysis is devoid of any statistical or
epidemiological method, and her background and work history are
devoid of any experience or knowledge that would support the very
aggressive assumptions she makes to support her calculations.  The
result is an expert report that strays from accepted methodology
and generates an absurd result," Ms. Minella remarks.

Ms. Minella explains that an estimation of T&N's asbestos personal
injury liability is not intended to fix the amount of specific
claims, but is merely a "best estimate" for the purpose of
permitting the Debtors' cases to go forward.  Unlike Dr. Cantor's
opinion, Ms. Minella says, Dr. Peterson's opinion is based on
sound statistical methodologies that capture T&N's empirical data
and forecasts an accurate estimate of T&N's future asbestos
personal injury liability.

Accordingly, the Official Committee of Asbestos Claimants and the
Legal Representative for Future Asbestos Claimants ask the Court
to adopt Dr. Peterson's estimate of T&N's asbestos personal injury
liability.

Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's largest
automotive parts companies with worldwide revenue of some
$6 billion.  The Company filed for chapter 11 protection on
October 1, 2001 (Bankr. Del. Case No. 01-10582).  Lawrence J.
Nyhan, Esq., James F. Conlan, Esq., and Kevin T. Lantry, Esq., at
Sidley Austin Brown & Wood, and Laura Davis Jones, Esq., at
Pachulski, Stang, Ziehl, Young, Jones & Weintraub, represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed $10.15 billion in
assets and $8.86 billion in liabilities. (Federal-Mogul
Bankruptcy News, Issue No. 71; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


FIBERMARK INC: Confirmation Hearing Continued to February 28
------------------------------------------------------------
FiberMark, Inc. (OTC Bulletin Board: FMKIQ) reported that the
confirmation hearing was scheduled to continue on February 28 at
the U.S. Bankruptcy Court for the District of Vermont.  In advance
of that hearing, the company intends to file Plan implementation
documents that reflect the previously announced agreement in
principle reached by several members of the Creditors Committee.
Once a company's plan of reorganization is confirmed, emergence
from chapter 11 typically occurs within a month.

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.


FIDELITY NATIONAL: Fitch Assigns BB- Rating to Sr. Sec. Facility
----------------------------------------------------------------
Fitch Ratings has affirmed and removed from Rating Watch Negative
the 'A-' insurer financial strength ratings of the title insurance
underwriting subsidiaries of Fidelity National Financial, Inc. -
FNF -- and the 'BBB-' long-term issuer rating of FNF.  In
addition, Fitch has assigned a 'BB-' rating to the senior secured
credit facility entered into by FNF's subsidiary, Fidelity
National Information Services -- FIS.  The Rating Outlook is
Stable for all ratings.

These rating actions coincide with the finalization of
recapitalization plans for FIS.  Under the recapitalization plan,
FNF is selling a 25% interest in FIS to Thomas H. Lee Partners and
Texas Pacific Group, which is expected to result in a gain of
approximately $375 million for FNF.  In addition, FIS is borrowing
$2.8 billion on a secured basis from a consortium of lenders and
distributing nearly all the proceeds to FNF as payment for prior
acquisitions to build FIS' business.

FNF will use the approximately $2.7 billion in proceeds from FIS
to declare a special dividend to stockholders, amounting to
roughly $1.8 billion, pay down existing bank debt, and potentially
repurchase FNF stock.

Upon announcement of the recapitalization plan, Fitch downgraded
FNF and placed its ratings on Rating Watch Negative.  The
rationale was FNF's willingness to leverage its consolidated
balance sheet to approximately a 50% debt-to-total capital ratio,
which is beyond what Fitch considered appropriate for the rating
category.

The senior secured credit facility at FIS is not guaranteed by FNF
and consequently was rated based primarily on its own strengths
and weaknesses.  The recapitalization plan will leave FIS highly
leveraged with modest fixed-charge coverage.  Specifically, debt-
to-total capital at FIS will be approximately 85% with pretax
earnings expected to cover interest expense by 2.5 times.
Additional concerns include the highly acquisitive nature of the
company, potential customer erosion through industry
consolidation, and the need to maintain a technological advantage
in the processing business.

Favorable considerations in the FIS rating included the company's
leading market share in core processing systems to large banks,
good retention over a diversified base of customers, and
expectations for strong cash flow generation.

Fitch removed FNF's ratings from Rating Watch Negative after
analyzing the title operations segregated from information
services and determining FNF-only leverage and coverage would be
supportive of the current ratings.  It is expected that a partial
spin-off of FIS will occur in the near future and that FNF will
maintain a controlling interest.

  Fidelity National Title Insurance Co.
  Fidelity National Title Insurance Co. of NY
  Alamo Title Insurance Co. of TX
  Nations Title Insurance of NY
  Chicago Title Insurance Co.
  Chicago Title Insurance Co. of OR
  Security Union Title Insurance Co.

  Ticor Title Insurance Co.:

     -- Insurer financial strength affirmed at 'A-'/removed from
        Rating Watch Negative/Stable Outlook.

  Fidelity National Financial Inc.:

     -- Long-term issuer affirmed at 'BBB-'/removed from Rating
        Watch Negative/Stable Outlook.

  Fidelity National Information Services, Inc.:

     -- Senior Secured Credit Facility assigned 'BB-'/Stable
        Outlook.


GMAC COMMERCIAL: Moody's Pares Rating on Class F Certs. to B1
-------------------------------------------------------------
Moody's Investors Service upgraded the ratings of three classes,
downgraded the ratings of one class and affirmed the ratings of
three classes of GMAC Commercial Mortgage Securities, Inc.,
Mortgage Pass-Through Certificates, Series 2003-FL1 as follows:

   * Class A, $30,473,795, Floating, affirmed at Aaa
   * Class X, Notional, affirmed at Aaa
   * Class B, $21,552,477, Floating, upgraded to Aaa from Aa2
   * Class C, $19,975,429, Floating, upgraded to Aa3 from A2
   * Class D, 22,603,842, Floating, upgraded to Baa1 from Baa2
   * Class E, $9,199,191, Floating, affirmed at Baa3
   * Class F, $10,250,556, Floating, downgraded to B1 from Ba2

As of the January 11, 2005 distribution date, the transaction's
aggregate balance has decreased by approximately 72.3% to
$114.1 million from $411.4 million at closing.  The Certificates
are collateralized by eight senior participation interests in
whole mortgage loans secured by commercial properties.  The junior
participation interests of all the loans are held outside the
trust.  The aggregate outstanding principal balance of the whole
loans is $174.4 million.  The senior participations range in size
from 1.0% to 28.1% of the pool.  There have been no losses to the
pool since securitization and there are no loans in special
servicing.  Three loans, representing 40.9% of the pool balance,
are on the master servicer's watchlist.

Moody's was provided with full year 2003 borrower financials for
100.0% of the pool and partial year 2004 borrower financials for
91.6% of the pool.  Moody's loan to value ratio -- LTV -- for the
senior participations and whole loans is 60.7% and 90.9%,
respectively, compared to 59.6% and 89.5% at securitization.  All
of the loans except one are performing in line with Moody's
expectations.  The upgrade of Classes B, C, and D is due to
increased subordination levels and overall stable pool
performance.  The downgrade of Class F is due to the poorer
performance of the Upstate New York Portfolio Loan ($13.0 million
-- 11.4%).

The top four loans represent 72.9% of the outstanding pool
balance.  The largest loan is the Hartman Portfolio Loan
($32.1 million -- 28.1%), which is secured by 18 commercial
properties located in Houston, Texas.  The portfolio consists of
eight industrial properties, eight retail properties and two
office buildings totaling 1.3 million square feet.  Although the
overall occupancy of the portfolio has declined since
securitization from 96.0% to 88.2%, financial performance has been
stable due to increased rents.  The current whole loan balance is
$34.4 million.  The loan is on the master servicer's watchlist due
to a tax delinquency on one of the properties.  Moody's LTV of the
senior participation and whole loan are 64.7% and 69.4%
respectively, the same as at securitization.

The second largest loan is the Grand Rapids Industrial Portfolio
Loan ($20.4 million -- 17.9%), which is secured by 12 industrial
properties totaling 1.7 million square feet.  All of the
properties are located in Grand Rapids, Michigan.  The loan was
originally secured by 14 properties, but two were released in
May 2003.  The loan's performance has been stable since
securitization.  The overall occupancy of the portfolio is 80.8%,
compared to 76.0% at securitization.  The current whole loan
balance is $34.5 million.  Moody's LTV of the senior participation
and whole loan are 58.4% and 98.6% respectively, compared to 59.9%
and 101.2% at securitization.

The third largest loan is the Commerce Office Park Loan
($17.6 million -- 15.5%), which is secured by eight office
properties located in Commerce, California.  The loan was
originally secured by 10 properties but two properties have been
released from the loan.  The overall occupancy of the portfolio is
97.0%, essentially the same as at securitization.  The current
whole loan balance is $30.0 million.  Moody's LTV of the senior
participation and total loan are 47.0% and 80.0% respectively,
compared to 61.1% and 104.0% at securitization.

The fourth largest loan is the Upstate New York Portfolio Loan
($13.0 million -- 11.4%), which is secured by eight office
properties located in upstate New York.  The portfolio's
performance has declined since securitization largely due to lease
rollover.  The property is currently 71.0% occupied, compared to
77.0% at securitization. The current whole loan balance is
$22.5 million.  Moody's LTV of the senior participation and whole
loan are 81.7% and approximately 140.0% respectively, compared to
59.2% and 102.5% at securitization.

The pool collateral consists of a mix of:

               * office (53.2%),
               * industrial (41.0%), and
               * retail (5.8%).

The collateral properties are located in:

               * Texas (34.5%),
               * California (24.3%),
               * Michigan (19.8%),
               * New York (12.8%), and
               * New Jersey (8.6%).

All of the loans are floating rate indexed off one month LIBOR.
Three loans, representing 27.0% of the pool, mature by the end of
2005.  The remaining five loans mature by the end of 2006.


HAWK CORP: Begins AMEX Trading of 8-3/4% Sr. Notes Under HWK.Z
--------------------------------------------------------------
The American Stock Exchange -- AMEX -- listed 8-3/4% senior notes
issued by Hawk Corporation (Amex: HWK).  These notes trade under
the symbol HWK.Z.

The notes are priced at $1000 per unit based on an initial
offering of $110 million and mature on Nov. 1, 2014.  Interest on
the new notes is payable semi-annually in cash, in arrears, on
January 1 and July 1 of each year, beginning on January 1, 2005.

The specialist in HWK.Z is AGS Specialist Partners.

                         About Hawk Corp.

Hawk Corporation is a leading worldwide supplier of highly
engineered products.  Its friction products group is a leading
supplier of friction materials for brakes, clutches and
transmissions used in airplanes, trucks, construction equipment,
farm equipment and recreational and performance automotive
vehicles.  Through its precision components group, Hawk is a
leading supplier of powder metal and metal injected molded
components used in industrial, consumer and other applications,
such as pumps, motors and transmissions, lawn and garden
equipment, appliances, small hand tools, trucks and
telecommunications equipment.  Hawk's performance racing group
manufactures clutches and gearboxes for motorsport applications
and performance automotive markets.  Headquartered in Cleveland,
Ohio, Hawk has approximately 1,600 employees and 17 manufacturing,
research and administrative sites in 5 countries at its continuing
operations.

The American Stock Exchange -- http://www.amex.com/-- is the only
primary exchange that offers trading across a full range of
equities, options and exchange traded funds (ETFs), including
structured products and HOLDRS(SM).  In addition to its role as a
national equities market, the Amex is the pioneer of the ETF,
responsible for bringing the first domestic product to market in
1993.  Leading the industry in ETF listings, the Amex lists 144
ETFs.  The Amex is also one of the largest options exchanges in
the U.S., trading options on broad-based and sector indexes as
well as domestic and foreign stocks.

                         *     *     *

As reported in the Troubled Company Reporter on Oct. 15, 2004,
Standard & Poor's Ratings Services raised its corporate credit
rating on Cleveland, Ohio-based Hawk Corp. to 'B+' from 'B'.  The
outlook is stable.

At the same time, Standard & Poor's assigned its 'B' rating to
Hawk's proposed $100 million senior unsecured notes due 2014.  The
proceeds from the offering and the new unrated $30 million,
five-year bank facility are being used to refinance the 12% senior
unsecured notes due 2006 and repay the existing $53 million credit
facility. Pro forma for the transaction, total debt (including the
present value of operating leases) for the specialty components
manufacturer is expected to be approximately $111 million.


HAWKEYE RENEWABLES: Moody's Puts B2 Rating on $185M Sr. Sec. Loan
-----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to the $185 million
senior secured term loan of Hawkeye Renewables, LLC, which has a
maturity of 2012.  The rating outlook is stable.

The B2 rating for the credit facility reflects the areas of credit
concern:

   1. Uncertainty relating to the long-term demand for ethanol for
      fuel, which is substantially dependent upon federally
      mandated programs and tax incentives;

   2. The possibility that industry expansion could result in
      excess capacity to produce ethanol or that technological
      developments could result in lower cost biomass fuels being
      developed over the longer term;

   3. Exposure to fluctuation in commodity prices. Hawkeye does
      not have contractually fixed pricing and there is not a
      natural hedge between the prices of its inputs and outputs;

   4. The risk that construction could cost more than projected or
      take longer than expected to be completed;

   5. The risk that the plants might not operate as efficiently as
      expected;

   6. A financial structure that has high leverage, with 75% debt
      to equity at closing;

   7. Additional leverage at the parent holding company; and

   8. Potential for a working capital facility, which would have a
      first lien on working capital.

The B2 rating is supported by:

   1. The current high prices for oil and ethanol and the low
      price of corn are quite favorable for ethanol production
      from efficient plants;

   2. Continuing strong governmental support for ethanol as a
      renewable fuel source that uses farm products, as evidenced
      by the recent extension of the federal tax credit to 2010;

   3. The scale and technological advantages of Hawkeye's new
      facilities, which will be among the largest in the industry
      when completed;

   4. The experience of the construction contractor, which is also
      lending to Hawkeye's parent company;

   5. The use of relatively simple proven technology;

   6. Strong projected cash flow coverage in the base case and
      most sensitivity cases;

   7. A cash flow sweep mechanism that is projected to amortize
      the term loan prior to maturity in the base case; and

   8. A one-year cash funded debt service reserve.

The rating outlook is stable.  The factors that could lead to a
downward revision of the rating:

   * significant delays in construction or increased construction
     costs,

   * the inability to operate the project in a manner consistent
     with the base case projections, and

   * prolonged dislocations of commodity prices, a significant
     reduction in federal mandates or incentives for ethanol,
     replacement of the cash funded debt service reserve with a
     letter of credit that results in weaker support for the term
     loan, and financial stress at the parent company.

The factors that could lead to an upward revision of the rating:

    * more rapid amortization of the term loan,

    * elimination of the debt at Hawkeye Holdings,

    * prolonged favorable commodity price trends that result in
      rapid reduction of the term loan through the cash sweep
      mechanism, and

    * contracts that could provide a more predictable stream of
      cash flow over the term of the loan.

Proceeds of the term loan will be used to finance the expansion of
an existing 40 million gallon per year (MGPY) ethanol plant in
Iowa Falls, Iowa to 80 MGPY; construct a new 100 MGPY ethanol
plant at Fairbank, Iowa; repay bank debt used by Hawkeye
Renewable's parent for the construction of the Iowa Falls plant;
fund a one-year debt service reserve; and pay fees and expenses.

Hawkeye Renewables is 100% owned by Hawkeye Holdings, LLC, which
is owned 58% by Whitney & Co., LLC, 17% by Hawkeye management and
25% by other individuals.  Upon closing of the transaction
Hawkeye's capitalization structure will consist of the term loan
plus approximately $57 million of equity capital.

The equity has been contributed by Hawkeye Holdings, and is
comprised of a $40 million mezzanine loan from Whitney & Co., and
approximately $17 million of other equity, including a loan from
the construction contractor.

The term loan will be secured by all of the assets of the
borrower, including real property, contracts, all project accounts
and accounts receivable, to the extent not otherwise pledged for a
working capital facility, including a pledge of Hawkeye Holdings'
ownership interest.  Covenants include maintenance of minimum
1.20x debt service coverage ratio in the preceding and succeeding
four quarters, and limitations on additional indebtedness and
liens.

The terms include amortization of 1% of the original principal
amount per annum; in addition, a minimum of 40% of excess cash
flow will also be allocated to make quarterly repayments of the
term loan.

Ethanol sales have grown rapidly in the past few years.  However,
the primary driver of industry growth has been federal programs
that require the oxygenation of gasoline so that it will burn more
cleanly and a provision that reduces gasoline excise taxes by 5.1
cents per gallon when the content is at least 10% ethanol.  The
federal tax incentive has been in place since 1978 and has been
extended several times.  It was most recently extended in October
2004 to a new expiry date of December 31, 2010.

Between 2002 and 2004 demand for ethanol increased by about 50%,
to over 3 BGPY, after several key states banned the use of methyl
tertiary butyl ether (MTBE), the principal alternative oxygen
additive.  Industry output capacity is expected to increase
sharply over the next several years, when a number of new
facilities and expansion projects are expected to come on line,
which could result in excess capacity.  However, the additional
capacity could be absorbed by the market if additional states
enact bans on the use of MTBE or if the federal government enacts
proposed legislation that mandates usage of renewable fuels.

The prices of inputs and outputs of the ethanol production process
are not well correlated.  Ethanol is priced based upon gasoline
prices.  In contrast, the prices of corn and Dried Distillers
Grains with Solubles (DDGS) are dependent on agriculture market
factors that include weather conditions and crop yields.  Ethanol
production is most profitable when oil and gasoline prices are
high and corn prices are low.  There are no natural hedges and all
of the project's contracts are market based.

The Hawkeye facilities are expected to benefit from efficient
processes due to their scale and state of the art technology.  The
facilities will also benefit from an ability to sell DDGS as a bi-
product of the ethanol process.

Analysis of the economics of the project included a back testing
scenario that used historic commodities prices back to 1992.  The
back testing scenario indicates that in 1996, when corn prices
were extremely high, the project would have needed to utilize the
debt service reserve to cover expenses and scheduled debt service.

However, results of this case also suggest that revenues from
ethanol and DGGS would be sufficient to cover debt service in all
other years.  Moody's notes that historic price trends are often
not indicative of future trends, and that the level of pending
ethanol capacity additions could cause margins between the prices
of ethanol and gasoline to be lower than the historical pattern.

The Iowa Falls facility will be expanded to twice its current
size, and new construction will occur at Fairbank.  Interest on
the full amount of the loan is to be paid via cash from operations
of the existing 40MGPY Iowa Falls facility while the expansion and
second project are being completed.  There is a risk the
construction could take longer, cost more than anticipated, or
that operating difficulties could occur with the existing
operations.

The independent engineer believes the construction schedule is
reasonable based on the past work of the contractor, Fagen, Inc,
which recently completed the 40 MGPY Iowa Falls facility on time
and within budget.  The construction contracts are fixed price
turnkey with performance guarantees and liquidated damage
provisions. Performance bonds for the full amount of the contracts
will be posted.

Hawkeye has contracted with United Bio Energy Management, LLC for
the oversight of operations. United Bio is a joint venture between
the contractor, Fagen, Inc. and the equipment and process
technology provider ICM.

The B2 rating considers that Hawkeye's parent holding company
Hawkeye Holdings LLC will also be highly leveraged.  Hawkeye
Holdings will rely entirely on cash distributions from Hawkeye to
service its debt obligations.  Holdings debt will consist of a $40
million mezzanine loan from sponsor Whitney & Co. LLC with a 10%
coupon and a 6% pay-in-kind obligation; and a note from Fagen Inc.

The Fagen note must be repaid prior to any distributions to the
equity holders of Holdings.  The Whitney note matures in 2008. At
closing, approximately $10 million will be held in escrow at
Holdings for the payment of interest on the Whitney notes during
construction.  Under some adverse scenarios, the underlying
project may not provide sufficient cash to service the Holdings
notes, and insolvency of Holdings could have an impact on Hawkeye.

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

Hawkeye Renewables, LLC, is a limited liability company formed to
develop, own and operate ethanol facilities.  Headquartered in
Iowa Falls, Iowa, Hawkeye is 100% owned by Iowa Falls Ethanol
Plant, LLC, (to be renamed Hawkeye Holdings, LLC (Holdings)).
Hawkeye Holdings is owned 58% by Whitney & Co., LLC, 17% by
Hawkeye management and 25% by other individuals.


HEALTH & NUTRITION: Transfers Name to New Owner After Asset Sale
----------------------------------------------------------------
Ashlin Development Corporation, a Florida corporation f/k/a Health
& Nutrition Systems International, Inc. (OTC Bulletin Board:
HNNSQ), reported that on January 25, 2005, the sale of
substantially all of its assets to TeeZee, Inc., a Florida
corporation, was completed pursuant to the Asset Purchase
Agreement dated October 15, 2004, between the Company and
Purchaser.  The Asset Purchase Agreement was entered into as part
of the Company's Amended Plan of Reorganization, which was
approved on January 10, 2005, by the U.S. Bankruptcy Court,
Southern District of Florida, in Fort Lauderdale, Florida.  The
closing of the sale is a condition precedent to the effectiveness
of the Plan.

The purchase price for the Assets was $2,191,160.23, which
consisted of the assumption by the Purchaser of $1,841,160.23 of
liabilities of the Company, a cash payment from the Purchaser to
the Company of $250,000, and the release to the Company of
$100,000 in cash that had been funded by the Purchaser into escrow
in accordance with the terms of the Asset Purchase Agreement.

The Company intends to use approximately $25,000 of the cash
proceeds received in the transaction to repay amounts owed to
Garden State Nutritionals, a division of Vitaquest International,
Inc., and to utilize the remaining cash proceeds to fund future
operating expenses of the Company as well as the costs, fees, and
expenses of the Company that were incurred in connection with the
Plan.

In connection with the sale, the Company changed its name to
"Ashlin Development Corporation" and assigned its rights to the
name "Health & Nutrition Systems International, Inc." to the
Purchaser.

From and after the effective date of the Plan, the Company intends
to engage in the business of seeking suitable commercial
activities or a strategic alliance with an operating entity.

Headquartered in West Palm Beach, Florida, Health & Nutrition
Systems International, Inc. -- http://www.hnsglobal.com/--
develops and markets weight management products in over 25,000
health, food and drug store locations.  The Company's products can
be found in CVS, GNC, Rite Aid, Vitamin Shoppe, Vitamin World,
Walgreens, Eckerd and Wal-Mart.  The Company's HNS Direct division
distributes to independent health food stores, gyms and
pharmacies.  The Company filed for chapter 11 protection on
Oct. 15, 2004 (Bankr. S.D. Fla. Case No. 04-34761).  Arthur J.
Spector, Esq., at Berger Singerman, represents the Debtor in its
restructuring efforts.  When the Company filed for protection from
its creditors, it listed $1,182,382 in total assets and $2,196,129
in total Debts as of June 30, 2004.


HELIOS SERIES: Moody's Pares Rating on $24M Class C Notes to B1
---------------------------------------------------------------
Moody's Investors Service has taken rating action on the following
tranches of Notes issued by the static pool CDO, Helios Series I
Multi Asset CBO, Ltd.:

   * the U.S.$443,000,000 Class A Floating Rate Notes due
     December 13, 2036, formerly rated Aaa are now rated Aaa on
     watch for possible downgrade;

   * the U.S.27,000,000 Class B Floating Rate Notes due
     December 13, 2036, formerly rated Aa2 are now rated Aa2 on
     watch for possible downgrade; and

   * the U.S.$24,000,000 Class C Floating Rate Notes due
     December 13, 2036, formerly rated Ba1, have been downgraded
     to B1 and placed on watch for possible downgrade.

Moody's explained that since its last rating action in late 2002,
the combination of deteriorating credit quality (as reflected in
the increase of the reported weighted average rating factor from
330 to 570) and realized losses of the issuer's underlying
portfolio (as shown in the reduction in the reported junior
overcollateralization ratio from 100.16% to 99.76%) has
outstripped the positive benefits from the amortizations of the
Class A Notes and Class C Notes using principal proceeds and
excess interest proceeds, respectively.

Rating Actions: Downgrade/On Watch for Possible Downgrade

Affected Tranches:

   (1) U.S.$443,000,000 Class A Floating Rate Notes due
       December 13, 2036,

Previous rating: Aaa
New rating:      Aaa on watch for possible downgrade

   (2) U.S.27,000,000 Class B Floating Rate Notes due
       December 13, 2036

Previous rating: Aa2
New rating:      Aa2 on watch for possible downgrade

   (3) U.S.$24,000,000 Class C Floating Rate Notes due
       December 13, 2036,

Previous rating: Ba1
New rating:      B1 on watch for possible downgrade


HEXCEL CORP: Issuing $200 Million Sr. Notes to Refinance Debts
--------------------------------------------------------------
Hexcel Corporation (NYSE/PCX: HXL) intends to issue $200 million
of senior subordinated notes that will mature in 2015.

The net proceeds of the offering will be used to partially redeem
Hexcel's existing 9.75% Senior Subordinated Notes due 2009 in
accordance with their terms.

The offering of the senior subordinated notes will not be
registered under the Securities Act of 1933, as amended, and the
notes may not be offered or sold in the United States absent
registration or an applicable exemption from registration
requirements.

This press release is neither an offer to sell nor the
solicitation of an offer to buy securities, and shall not
constitute an offer, solicitation or sale in any jurisdiction in
which such an offer, solicitation or sale is unlawful.

                        About the Company

Hexcel Corporation is a leading advanced structural materials
company.  It develops, manufactures and markets lightweight, high-
performance reinforcement products, composite materials and
composite structures for use in commercial aerospace, space and
defense, electronics, and industrial applications.

At Dec. 31, 2004, Hexcel Corp.'s balance sheet showed a
$24.4 million stockholders' deficit, compared to a $93.4 million
deficit at Dec. 31, 2003.


HEXCEL CORP: Moody's Junks Proposed $200 Million Senior Sub. Notes
------------------------------------------------------------------
Moody's Investors Service has upgraded certain ratings of Hexcel
Corporation, from senior implied to B2 from B3, and has affirmed
the B3 rating on Hexcel's 9-7/8% senior secured notes due 2008.
In a related action, Moody's has assigned a Caa1 rating to the
Company's proposed $200 million senior subordinated notes, due
2015.  The ratings outlook is stable.

The ratings upgrades reflect the Hexcel Corp.'s outlook for
continued improved financial performance in FY 2005 due to
strengthening demand in key market sectors in which the Company
operates, particularly the commercial aerospace sector.  These
expectations are supported by substantial recent improvement in
the company's operating performance, which Moody's views as
illustrative of a trend towards a stronger credit profile for
Hexcel.

The stable outlook reflects Moody's expectations that Hexcel Corp.
will modestly grow its revenue base and operating profits over the
near term, owing primarily to improved prospects in the commercial
aerospace sector, in which the company is a major supplier to
aircraft OEM's.  Ratings or their outlook may improve if, as a
result of continued improvement in key business segments, lease-
adjusted debt were to fall below 3.0x EBITDAR, EBIT coverage of
interest were to exceed 2.5x, and free cash flow were to exceed
10% of debt over a sustained period.

Conversely, ratings or their outlook could be subject to downward
revision if the company suffers deteriorating operating
performance in key business segments, possibly from an unexpected
drop in OEM commercial or military aircraft production, such that
free cash generation were to be negative over a prolonged period,
if adjusted debt/EBITDAR were to exceed 5.0x, or if EBIT/interest
were to fall below 2.0x.

The purpose of the proposed notes is to repay, by way of call,
about $185 million of the Hexcel Corp's existing 9.75% senior
subordinated notes due 2009.  The new notes will be pari passu in
claim to 9.75% notes remaining after the call.  Upon close of the
proposed notes offering and subsequent call of these notes,
Hexcel's debt levels will remain essentially unchanged, while the
company operates in an improving business environment with a good
liquidity profile.

Total pro forma debt of $447 million represents about 3.0x FY
(December) 2004 EBITDA (about 3.2x EBITDAR on a lease-adjusted
basis).  EBIT over this period covered pro forma interest expense
by approximately 2.4x, while estimated free cash flow represented
about 10% of pro-forma debt.  These metrics are strong for this
ratings category.  However, Hexcel Corp.'s free cash flow in 2004
incorporated a CAPEX level, which is $38 million, or about 73% of
depreciation that, Moody's believes, understates future business
reinvestment requirements.

Moody's believes CAPEX levels going forward will be somewhat
higher.  In addition, it is considered likely that working capital
requirements will increase in line with anticipated revenue
growth.  The rating agency estimates that free cash flow
generation, although positive, will be relatively thin over the
near term.

If the anticipated levels of revenue growth are not realized in
2005, or if operating margins were to deteriorate unexpectedly,
the ensuing reduction in free cash flow could result in
additional, short-term borrowings under its revolving credit
facilities, which are anticipated to be undrawn upon close.

With about $26 million currently used for letters-of-credit
purposes, Hexcel Corp. estimates total availability of about $88
million, including foreign facilities, in addition to a cash
balance of about $57 million.  Should drawings under the bank line
be necessary, the Company's liquidity and financial flexibility
could become reduced.

The ratings upgrade is further supported by improvement in the
Hexcel Corp.'s operating results due to a trend towards overall
improvement in the commercial aerospace segment (43% of its FY
2004 revenue), continued strength in the space and defense segment
(18% of revenue) and growth in the company's industrial revenue
segment (33%).  Since 2002, which represents the historical low-
point in Hexcel's operating results, coinciding with a severely
distressed commercial aerospace sector, the Company's revenue has
grown 26%, to $1.074 billion in FY 2004.

EBITDA has increased more dramatically, up 39%, to about $150
million in FY 2004.  This improvement reflects both growth in
business volume as well as stronger operating margins, as the
company has undertaken a restructuring program involving a
reduction in fixed costs and consolidation of manufacturing
facilities.  Over this period, Hexcel Corp. was able to reduce
debt by about 31%, from $622 million to $431 million, through the
March 2003 issuance of convertible preferred stock as well as
through substantial free cash flow generation.

As a result, the Company's credit fundamentals improved
significantly, with leverage (lease-adjusted debt/EBITDAR) of
about 3.1x and EBIT/interest coverage of about 2.9x as of December
2004.  Going forward, Moody's believes that near-term growth in
demand from major commercial aircraft OEM's, augmented by possible
growth that could be experienced in certain of the industrial
segments that the Company serves, should support revenue growth
and margin stability.  Such stability will be important to
retaining or improving the company's credit profile.

The ratings on the Hexcel Corp.'s $125 million 9-7/8% senior
secured notes due 2008 was affirmed at B3.  This affirmation
considers Hexcel's recent announcement that it is exploring
refinancing some or all of its debt, and that one of the options
being considered is the repurchase of the senior secured notes by
way of tender offer.  Because of uncertainty as to the magnitude
of any stub portion of untendered notes that might remain
outstanding following the tender or the relative priority of claim
that such a stub portion might have in the company's capital
structure, the rating on these notes has been affirmed at B3.

The Caa1 rating assigned to Hexcel Corp.'s proposed $200 million
notes, two notches below the senior implied rating, reflects the
structural subordination of these notes to all existing and future
senior indebtedness of the Company.  These notes will be pari
passu in right of payment with Hexcel's existing 9.75% senior
subordinated notes due 2009, also rated Caa1.

The Caa2 rating on the 7% convertible subordinated notes, one
notch below the senior subordinated debt rating, reflects the
structural subordination of these notes to both the new and
existing senior subordinated notes, as well as lack of guarantees
from any of the company's subsidiaries.

The ratings upgraded are:

   * 9.75% senior subordinated notes due 2009, to Caa1 from Caa2,

   * 7% convertible subordinated debentures due 2011, to Caa2 from
     Caa3

   * Senior implied rating, to B2 from B3, and

   * Senior unsecured issuer rating, to B3 from Caa1

The ratings affirmed are:

   * 9-7/8% senior secured notes due 2008, at B3

The ratings assigned are:

   * $200 million senior subordinated notes, due 2015, Caa1

Hexcel Corporation, headquartered in Stamford, Connecticut, is a
leading advanced structural materials company.  It develops,
manufactures and markets lightweight, high-performance
reinforcement products, composite materials and composite
structures for use in commercial aerospace, space and defense,
electronics, and industrial applications.  The Company had FY 2004
revenues of $1.074 billion.


HIGHWOODS REALTY: Moody's Holds Ba1 Rating on Senior Unsec. Debt
----------------------------------------------------------------
Moody's Investors Service confirmed the ratings of Highwoods
Realty Limited Partnership's senior unsecured debt at Ba1 with a
stable outlook, concluding its review.  Highwoods' ratings were
placed on review for possible downgrade on August 5, 2004,
following the REIT's announcement that it would be restating its
financial results for 1999 through 2003, as well as for the first
quarter 2004.

The restated adjustments related to the accounting for prior real
estate sales transactions, the accounting for debt retirement, the
accounting for minority interest in the operating partnership and
reclassifications related to discontinued operations.  Moody's
does not expect these adjustments to have a material impact on
future cash flows.

According to the rating agency, the rating confirmation and stable
outlook reflect the REIT's diversified revenue base, moderate
leverage, sizable pool of unencumbered assets and the slowly
improving operating fundamentals.  Highwoods' occupancy has
increased to 83.2% at September 30, 2004, from 81.5% at year-end
2003, and Moody's notes that Highwoods' wholly-owned development
pipeline is 100% pre-leased.

The REIT's fixed charge coverage has improved to 1.8X at the end
of the third quarter, from approximately 1.6X at year end 2003;
however, Moody's expects the recovery in Highwoods' core markets
to be slow and uneven, which may leave little cushion in the
company's bank line financial covenants at times during 2005.
Moody's also views the REIT's high dividend payout as a distinct
credit negative, but anticipates Highwoods will begin covering its
dividend by 2006.

As a result of the need for financial restatements, there is a
high likelihood, Moody's believes, that the REIT could very well
report a material weakness in internal control in its Sarbanes-
Oxley 404 implementation and certification processes. Should
Highwoods report a material weakness, Moody's believes it would
not impact the Company's rating.

Highwoods has taken actions to mitigate the control weaknesses
that led to the recent restatements.  In specific, Highwoods has
expanded its accounting department, implemented a sub-
certification processes, and enhanced internal controls over
property sales and joint venture transactions. Moody's will re-
evaluate its opinion upon Highwoods' filing the appropriate
documentation.

By year-end 2005, should Highwoods make meaningful progress in its
operating performance and reduce its overall leverage, as well as
resolve any issues that may arise from Sarbanes-Oxley 404
implementation and certification, Moody's would consider a
positive outlook.  A rating upgrade then would depend on the
REIT's ability to improve its coverage measures to at least 2.25X,
while over time reducing its secured debt levels below 20%, and
implementing its growth strategy.  Barring further steep declines
in operating performance, or a significant shift in funding
strategy, Moody's would not anticipate further downward pressure
on the REIT's ratings.

The securities were confirmed, with stable outlooks:

   * Highwoods Realty Limited Partnership:

     -- Senior debt at Ba1, Senior debt shelf at (P)Ba1

   * Highwoods Properties, Inc.:

     -- Cumulative preferred stock at Ba2, Cumulative preferred
        stock shelf at (P)Ba2

Highwoods Properties, Inc. [NYSE: HIW], headquartered in Raleigh,
North Carolina, USA, is a Real Estate Investment Trust (REIT) and
one of the largest developers and owners of Class A suburban
office and industrial properties in the Southeastern USA.  As of
September 30, 2004, the REIT owned or had an interest in 525
in-service office, industrial and retail properties encompassing
41.4 million square feet, and had total assets of $3.3 billion.


ICON HEALTH: Moody's Junks $155M Senior Subordinated Notes
----------------------------------------------------------
Moody's Investors Service downgraded all the credit ratings of
ICON Health & Fitness, Inc., concluding a review of the Company's
ratings for possible downgrade initiated on October 22, 2004.  The
outlook has been changed to stable.

The ratings downgrade reflects continued weak sales, a sharp
deterioration in gross and operating margins, continued pressure
from commodity price increases and increasing competition.  The
stable outlook reflects the ICON Health's recent actions to
discontinue under performing businesses and reduce its cost
structure and improve manufacturing efficiency.

The ratings downgraded are:

   * $155 million 11.25% Senior Subordinated Notes due 2012,
     downgraded to Caa2 from B3;

   * Senior Implied Rating, downgraded to B3 from B1;

   * Senior Unsecured Issuer Rating, downgraded to Caa1 from B2.

ICON Health's financial performance has been weak for the last
year with a particularly sharp deterioration in the company's two
most recently reported fiscal quarters.  Sales and gross profit
for the six months ended November 27, 2004 were down 14% and 36%,
respectively, from the comparable period in the prior year.

Sales of both cardiovascular and strength training equipment were
down, with particularly weak sales in the direct to consumer
business.  Due to the weak operating performance and seasonal
increases in inventory and accounts receivable levels, cash flow
used in operations was $131 million and revolver borrowings
increased sharply to about $248 million.

The ratings downgrade reflects the difficult business climate and
challenges facing ICON Health including sharply increased
commodity prices and transportation costs; weak consumer demand;
need for constant, rapid, new product introductions that present
an ongoing design and manufacturing challenge; limited pricing
power; increased competition and industry manufacturing capacity;
sales concentration with a few large retailers; and significant
capital expenditure requirements.

Moody's expects that conditions in the fitness products industry
will continue to be challenging and ICON Health will have
difficulty increasing its operating margins back to historical
levels.  However, the stable ratings outlook reflects Moody's
belief that the Company's performance has bottomed out and
positive actions taken by the company will stabilize its
performance over the next year and lead to a gradual improvement
in sales, operating margins and cash flow.

ICON Health recently announced that it is discontinuing the
manufacture and sale of all outdoor recreational equipment, which
have historically generated an operating loss and required a large
investment in working capital.  Moody's understands the reason for
this action is to improve financial performance.  The Company has
also re-designed portions of its product line to minimize the
utilization of certain commodities; moved up product development
cycles to increase manufacturing efficiency; and increased its
focus on working capital management.

ICON Health's joint venture in China is expected to be operational
during the early part of 2005 and should help improve operating
margins as well.  ICON indicated that sales for the month of
December 2004 increased over the comparable month of 2003 and that
demand for products from certain major retailers is increasing.

Moody's expects revolver borrowings to decrease significantly in
the company's third and fourth fiscal quarters of 2005 reflecting
the seasonality of ICON Health's business and cash flow benefits
from the discontinuation of the sale of outdoor recreational
products.

Moody's expects ICON Health to have negative free cash flow in its
fiscal year ended May 2005 and a modest level of free cash flow in
its 2006 fiscal year.  EBITDA less capital expenditures to
interest expense is expected to be less than 1 time in fiscal year
2005 and improve to over 1.5 times in fiscal year 2006.

The Caa2 rating assigned to the senior subordinated notes reflects
the contractual subordination to senior debt and the magnitude of
secured debt in the capital structure.  On October 11, 2004, ICON
amended its credit agreement to increase the amount of
availability under its revolver to $275 million from $210 million.

Availability under the revolver was about $27 million as of
November 27, 2004.  The revolver, which is not rated by Moody's,
matures in 2007 and contains a material adverse change clause that
provides that lenders having more than 66.67% of the commitment or
borrowing have the right to block the company's requests for
future borrowings.

ICON Health & Fitness, Inc., based in Logan, Utah, is one of the
largest manufacturers and marketers of home fitness equipment in
the United States.  Revenue for the fiscal year ended
May 31, 2004, was approximately $1 billion.


INTEGRATED ELECTRICAL: Completes Internal Investigation
-------------------------------------------------------
As Integrated Electrical Services, Inc. (NYSE: IES) previously
announced on Nov. 10, 2004, the Staff of the United States
Securities and Exchange Commission had been conducting an informal
inquiry relating to the company's internal investigation, the
investigation conducted by counsel to the Audit Committee of the
company's Board of Directors, and the material weaknesses
identified by IES' auditors in August 2004.

Earlier this week IES received notice of a formal order of a
nonpublic investigation issued by the SEC concerning these and
related matters.  The company's internal investigation and the
investigation conducted by counsel have been completed, and the
company has filed its fiscal 2004 Form 10-K with the SEC.  IES
will continue to fully cooperate with the Staff's investigation.

                        About the Company

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

                         *     *     *

As reported in the Troubled Company Reporter on Jan. 12, 2005,
Standard & Poor's Ratings Services assigned its 'B-' corporate
credit rating and 'CCC' subordinated debt rating to Integrated
Electrical Services Inc. -- IES. The outlook is developing.


INTERSTATE BAKERIES: JPMorgan Replaces Harris Letters of Credit
---------------------------------------------------------------
Harris Trust and Savings Bank was a lender party to Interstate
Bakeries Corporation and its debtor-affiliates' Amended and
Restated Credit Agreement, dated as of April 25, 2002, but has
recently sold its position in the prepetition facility.  Harris
Bank is also the issuing bank for 17 letters of credit issued on
behalf of the Debtors for $78,284,350.  The Letters of Credit were
for the benefit of various insurance companies and state agencies
as collateral support for the Debtors' workers' compensation
programs.  The Debtors currently pay Harris Bank a fronting fee of
0.125% per annum for issuing the Letters of Credit.

J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom, LLP,
in Chicago, Illinois, relates that the Letters of Credit contain
an "evergreen" renewal provision, which provides for the
automatic renewal of the Letter of Credit on an annual basis,
provided that a written notice of non-renewal has not been issued
by Harris Bank.  Under ordinary circumstances, the Letters of
Credit would begin to renew automatically in February 2005.

The 17 Letters of Credit issued by Harris Bank are:

   Beneficiary             LC Amount   LC Number    Renewal Date
   -----------             ---------   ---------    ------------
   Director of Rhode        $500,000   SPL90009981    02/12/05
   Island Workers'
   Compensation, Dept.
   of Labor & Training

   Kansas Dept. of Human   4,032,000   SPL35713       02/25/05
   Resources, Div. of
   Workers Compensation

   Louisiana Dept. of      1,150,000   SPL35748       02/25/05
   Labor, Officer of
   Workers' Compensation

   Oklahoma Workers'         850,000   SPL35602       02/25/05
   Compensation Court

   Travelers/Aetna         1,460,000   SPL34742       02/25/05
   Insurance Company

   Self Insurance Div.,   10,600,000   SPL35183       04/01/05
   Bureau of Workers'
   Compensation

   State of Connecticut,   1,000,000   SPL35247       05/15/05
   Workers' Compensation
   Commission

   Lumbermens Mutual       3,926,250   SPL35502       06/30/05
   Casualty Companies

   Lumbermens Mutual       3,926,250   SPL35619       06/30/05
   Casualty Companies

   Lumbermens Mutual       2,259,163   SPL90002854    06/30/05
   Casualty Companies

   Lumbermens Mutual      36,574,043   SPL35206       07/19/05
   Casualty Companies

   Lumbermens Mutual       3,950,000   SPL35353       07/19/05
   Casualty Companies

   Lumbermens Mutual         279,155   SPL35795       07/19/05
   Casualty Companies

   Lumbermens Mutual       2,259,163   SPL37243       07/19/05
   Casualty Companies

   Lumbermens Mutual       2,259,163   SPL37351       07/19/05
   Casualty Companies

   Lumbermens Mutual       2,259,163   SPL37126       07/19/05
   Casualty Companies

   State of Michigan,      1,000,000   SPL35054       07/19/05
   Dept. of Labor

According to Mr. Ivester, since Harris Bank is no longer a lender
to the Prepetition Credit Agreement, it feels exposed under the
Letters of Credit it has issued and wishes to discontinue
fronting the Letters of Credit.  Therefore, to ameliorate its
exposure, Harris Bank distributed notices of non-renewal to all
beneficiaries of the Letters of Credit on November 23, 2004.

Because the Letters of Credit contain provisions that allow
beneficiaries to draw on them in the event of non-renewal unless
substitute letters of credit acceptable to the beneficiaries are
provided, the Debtors need to make arrangements to provide
substitute collateral to the beneficiaries or risk the
beneficiaries drawing on the Letters of Credit.

                     Agreement with JPMorgan

The Debtors contacted with beneficiaries regarding the status of
the Letters of Credit and the Debtors' intent to provide
substitute collateral.  The Debtors also negotiated with JPMorgan
Chase Bank, N.A., to issue substitute letters of credit in
replacement of the Letters of Credit.  JPMorgan agreed to issue
replacement letters of credit pursuant to a Consent Agreement,
dated as of December 17, 2004.

Under the Consent Agreement, the Replacement Letters of Credit
will remain prepetition obligations of the Debtors and will
simply take the place of the existing Letters of Credit.  The
Consent Agreement will not amend or alter the Prepetition Credit
Agreement, which will continue to be in full force and effect,
subject to the effects of the Debtors' Chapter 11 cases.

The fronting fee charged by JPMorgan for issuing any Letters of
Credit would be 0.50% per annum of the face amount of the Letters
of Credit issued.  In addition, the Debtors will be responsible
for the payment or reimbursement of JPMorgan's reasonable out of
pocket costs and expenses incurred in connection with the Consent
Agreement.

"The issuance of the Replacement Letters of Credit by JPMorgan
presents a greater benefit to the Debtors and their estates than
the non-renewal of the Letters of Credit by Harris Bank," Mr.
Ivester states.  "If the Letters of Credit are not renewed or
replaced the beneficiaries will draw on the Letters of Credit
prior to their expiration."

Mr. Ivester says a draw on a Letter of Credit will ultimately
result in a draw on the Debtors' prepetition credit facility, and
therefore, increase the amount of the Debtors' funded prepetition
secured debt and the amount of interest the Debtors are paying on
the amounts owed under the Prepetition Credit Agreement.

The existing Letters of Credit generally support many of the
Debtors' self-insured workers' compensation programs or the high
deductible insured workers' compensation insurance policies. If
the Letters of Credit are not replaced, these programs may be
jeopardized.

At the Debtors' request, Judge Venters approves the Consent
Agreement to replace the Letters of Credit issued by Harris Bank.
The Debtors are permitted to pay JPMorgan the fronting fee
associated with the issuance of the Replacement Letters of
Credit.

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

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


JOSEPH G. ROCHE: Files Schedules of Assets & Liabilities
--------------------------------------------------------
Joseph G. Roche and Genevieve M. Roche filed with the U.S.
Bankruptcy Court for the Northern District of California its
Schedules of Assets and Liabilities, disclosing:

       Name of Schedule        Assets       Liabilities
       ----------------        ------       -----------
     A. Real Property       $50,250,000
     B. Personal Property     1,832,652
     C. Property Claimed
        As Exempt
     D. Creditors Holding
        Secured Claims                      $12,005,466
     E. Creditors Holding
        Unsecured Priority
        Claims                                  426,564
     F. Creditors Holding
        Unsecured Nonpriority
        Claims                                  507,103
                            -----------     -----------
        Total               $52,082,652     $12,939,134

Headquartered in Sonoma, California, Joseph G. Roche and Genevieve
M. Roche -- http://www.rochewinery.com/-- operate a winery.  The
Debtor filed for chapter 11 protection on Jan. 18, 2005 (Bankr.
N.D. Calif. Case No. 05-10082).  Christopher G. Costin, Esq., at
Beyers, Costin and Case represents the Debtor in its restructuring
efforts.  When the Debtor filed for protection from its creditors,
it listed $52,082,652 in total assets and $12,939,135 in total
debts.


JOY GLOBAL: Performance Improvement Cues Moody's to Lift Ratings
----------------------------------------------------------------
Moody's Investors Service upgraded its ratings for Joy Global,
Inc.  The upgrades reflect improvements in the Company's financial
performance and credit metrics over the last several years and
Moody's expectation that mining equipment sales and service will
continue to expand given favorable near-term fundamentals for
metals and commodities.

Joy Global has demonstrated its commitment to a prudent capital
structure and its ability to generate cash and manage costs
through a severe downcycle.  Joy Global's rating outlook remains
stable.

The ratings upgraded are:

   -- 8.75% senior subordinated notes due 2012 -- to Ba2 from B1,

   -- senior implied rating -- to Ba1 from Ba2, and

   -- senior unsecured issuer rating -- to Ba1 from Ba3.

Joy Global's financial performance has steadily improved over the
last three years.  Its favorable results, combined with its modest
leverage and strong market position, support Moody's upgrade.  Joy
Global has had positive cash flow in each of the last three years,
its fiscal year ends around the end of October.

Joy Global has used cash to repay debt and fund its US defined
benefit pension plans, but its cash balance has continued to
expand and, as of October 30, 2004, reached $232 million, which is
greater than debt of $206 million.  While it has instituted a
common stock dividend and may make acquisitions in the future,
there is no apparent reason for large-scale changes to net debt in
the foreseeable future.

Joy Global's aftermarket sales provide a stable base of recurring
sales at attractive margins and should adequately support its
conservative leverage, even after recognizing the potential cash
needs of its underfunded pension plans.  In addition, improving
fundamentals for commodities such as coal, copper and iron ore
have increased original equipment as well as aftermarket sales and
Joy Global's order rate is running well-ahead of sales.

As a result, net sales, operating margins, and all financial
measures have continued to expand, producing very solid credit
metrics.  For example, for the year ended October 30, 2004, debt
to EBITDA was 1.3 times and retained cash flow to gross debt was
23%, retained cash flow was calculated as cash from operating
activities, inclusive of pension contributions, less dividends.

In addition to its strong credit metrics, Joy Global also exhibits
characteristics of an investment grade company in terms of market
position, competitive profile, and geographic reach. With respect
to its surface mining equipment business, it is one of two
international manufacturers of electric power shovels and
draglines.

Joy Global has a large share of the worldwide installed equipment
base and lately has been winning a majority of the orders for new
electric mining shovels.  While there are more competitors within
the underground mining machinery business, the Company's second
segment, the Joy brand is highly regarded and offers the broadest
range of products.

For these reasons, Joy Global could be upgraded again, thus
attaining an investment grade senior unsecured rating.  Factors
that could lead to a further upgrade include a continuation of
solid operating and financial performance, as evidenced by steady
growth in aftermarket sales and service and an increase in
operating margins and the Company's goal is to achieve a minimum
10% EBIT margin throughout the cycle and it reached 7.5% in 2004,
maintenance of a prudent capital structure, and discipline with
respect to acquisitions and shareholder dividends.

Two factors that constrain the ratings are the underfunded pension
plans, approximately $290 million, and the large proportion of net
sales and assets represented by the company's foreign
subsidiaries, which are non-guarantors of the debt.  Factors that
could cause a lowering of Moody's ratings or outlook include a
decline in market share, increased debt or pension liabilities,
and large special dividends, stock buybacks, or debt-financed
acquisitions unless accompanied by a commensurate increase in cash
flow.

Joy Global's rating outlook is stable.  Moody's expects the
Company's original equipment sales to continue to improve, while
aftermarket sales and life cycle management contracts provide a
stable underlying base of business.  Moody's noted that increased
sales are likely to require higher working capital, which was an
important source of cash over the last several years.  The mix of
Joy Global's business, which includes surface mining equipment and
underground coal mining machinery sales, adds stability to its
long-term performance.

Joy Global, Inc., headquartered in Milwaukee, Wisconsin is a world
leader in the manufacture and service of surface and underground
mining equipment.  It had net sales of $1.4 billion in the fiscal
year ended October 30, 2004.


LB-UBS COMMERCIAL: S&P Places Low-B Ratings on Six Cert. Classes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to LB-UBS Commercial Mortgage Trust 2005-C1's
$1.58 billion commercial mortgage pass-through certificates
series 2005-C1.

The preliminary ratings are based on information as of
Jan. 26, 2005.  Subsequent information may result in the
assignment of final ratings that differ from the preliminary
ratings.

The preliminary ratings reflect:

   (1) the credit support provided by the subordinate classes of
       certificates,

   (2) the liquidity provided by the trustee,

   (3) the economics of the underlying mortgage loans, and

   (4) the geographic and property type diversity of the loans.

Standard & Poor's analysis determined that, on a weighted average
basis, the pool has a debt service coverage of 1.52x, a beginning
LTV of 92.2%, and an ending LTV of 84.1%. Classes A-1, A-2, A-3,
A-AB, A-4, and A-1A receive interest and principal before class
A-J.

Losses are borne by the A-J class before classes A-1, A-2, A-3,
A-AB, A-4, and A-1A, which will be applied pari passu.

A copy of Standard & Poor's complete presale report for this
transaction can be found on RatingsDirect, Standard & Poor's Web-
based credit analysis system, at http://www.ratingsdirect.com/
The presale can also be found on the Standard & Poor's Web site at
http://www.standardandpoors.com/ Select Credit Ratings, and then
find the article under Presale Credit Reports.

                  Preliminary Ratings Assigned
            LB-UBS Commercial Mortgage Trust 2005-C1

             Class       Rating          Amount ($)
             -----       ------          ----------
             A-1         AAA             55,000,000
             A-2         AAA            234,000,000
             A-3         AAA            162,000,000
             A-AB        AAA             58,000,000
             A-4         AAA            566,962,000
             A-1A        AAA            186,798,000
             A-J         AAA            106,546,000
             B           AA+             13,811,000
             C           AA              27,623,000
             D           AA-             19,731,000
             E           A               25,650,000
             F           A-              15,784,000
             G           BBB+            17,758,000
             H           BBB             17,757,000
             J           BBB-            21,704,000
             K           BB+              7,892,000
             L           BB               7,893,000
             M           BB-              1,973,000
             N           B+               5,919,000
             P           B                3,946,000
             Q           B-               3,946,000
             S           N.R.            17,758,178
             X-CL*       AAA          1,578,451,178**
             X-CP*       AAA          1,469,894,000**

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


LSI LOGIC: Posts $197 Million GAAP Net Loss in Fourth Quarter
-------------------------------------------------------------
LSI Logic Corporation (NYSE: LSI) reported fourth quarter 2004
revenues of $420 million, a sequential increase of 10 percent
compared to the $380 million reported in the third quarter of
2004, and a 9 percent decrease compared to the $463 million
reported in the fourth quarter of 2003.

Cash and short-term investments grew to $815 million at the end of
the fourth quarter of 2004.  LSI Logic generated positive
operating cash flow for the 11th consecutive quarter.

Fourth quarter 2004 GAAP net loss was $197 million or 51 cents per
diluted share, including a $178 million non-cash charge associated
with the company's Gresham manufacturing facility.  The fourth
quarter GAAP result compares to third quarter GAAP net loss of
$282 million including a $206 million non-cash charge associated
with the company's Gresham manufacturing facility.  Fourth quarter
2003 GAAP net income was $8 million.

Fourth quarter 2004 net income, excluding special items, was
$15 million, excluding special items. Excluding special items,
fourth quarter 2003 net income was $25 million.

"In Q4, we saw sequential growth in Storage Systems, Storage
Components and Consumer Products," said Wilfred J. Corrigan, LSI
Logic chairman and chief executive officer.  "The adjustment in
our customers' supply chain inventory that began in Q2 appears to
be substantially over in Storage Systems, Storage Components and
Consumer Products.  We are anticipating a small seasonal decline
in the first quarter with revenues in the range of $400 million to
$415 million.

"In semiconductors, LSI Logic has technology and market share
leadership positions in several high-growth sectors, including DVD
recorders, Ultra320 SCSI controllers, SAS (Serial Attached SCSI),
Fibre Channel, RAID adapters and our RapidChip(R) Platform ASICs.
Our Engenio storage systems subsidiary demonstrated strong growth
in the fourth quarter and expanded its OEM base with its range of
leading modular, scalable storage systems.  All of these products
are expected to drive company revenue growth in 2005."

LSI Logic recorded 2004 revenues of $1.70 billion, compared to
$1.69 billion in 2003.

GAAP 2004 net loss was $464 million or $1.21 per diluted share,
which includes the $384 million non-cash charge associated with
the Gresham manufacturing facility. The 2003 GAAP net loss was
$309 million or 82 cents per diluted share.

LSI Logic reported 2004 net income, excluding special items, of
$43 million or 11 cents per diluted share compared to a 2003 net
loss, excluding special items, of $16 million or 4 cents per
diluted share.

The company's 2004 gross margin was 43.3 percent, a 330-basis
point improvement over 2003. The company generated $91 million in
cash from operations in 2004. LSI Logic reduced its convertible
debt in 2004 by $69 million through open market purchases.

"In the fourth quarter, we generated revenue growth above
expectations and our gross margin improved over the prior
quarter," said Bryon Look, LSI Logic chief financial officer.  "We
continued to improve our cost structure and align our resources to
the highest value opportunities.  We maintained our strong focus
on cash flows, continuing to generate positive cash flow as we
grew revenues.  LSI Logic was profitable, excluding special items,
in both our semiconductor and our storage systems segments."

                      About the Company

LSI Logic Corporation --http://www.lsilogic.com/--headquartered
at 1621 Barber Lane, Milpitas, CA 95035.  Focuses on the design
and production of high- performance semiconductors for Consumer,
Communications and Storage applications that access, interconnect
and store data, voice and video. LSI Logic engineers incorporate
reusable, industry-standard intellectual property building blocks
that serve as the heart of leading-edge systems.  LSI Logic serves
its global OEM, channel and distribution customers with Platform
ASICs, standard-cell ASICs, standard products, host bus adapters,
RAID controllers and software.  In addition, the company supplies
storage network solutions for the enterprise.

                         *     *     *

As reported in the Troubled Company Reporter on Nov. 1, 2004,
Standard & Poor's Ratings Services revised its outlook on
Milpitas, California-based semiconductor manufacturer LSI Logic
Corp. to negative from stable.

In addition, Standard & Poor's affirmed its 'BB-' corporate credit
rating and other ratings on the company.  The company had
$1.0 billion of debt and capitalized operating leases at
Sept. 30, 2004.


MAGNUM HUNTER: S&P Places Low-B Ratings on CreditWatch Developing
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB-' corporate
credit and 'B+' senior unsecured ratings on oil and gas company
Magnum Hunter Resources, Inc., on CreditWatch with developing
implications following the company's announcement that it would be
acquired by Denver-based Cimarex Energy Co.

The CreditWatch developing listing indicates that ratings may be
raised, lowered, or affirmed following Standard & Poor's review of
the business and financial policies of the combined entity.

The stock-for-stock transaction, which includes the assumption of
about $645 million of debt, is expected to have a total value of
about $2.1 billion.

As of Sept. 30, 2004, Irving, Texas-based Magnum Hunter had about
$666 million in total debt outstanding, including capital leases
and convertible debt.

"Following a comprehensive review of the combined entity's
business strategy and financial profile, we will determine the
ratings impact of the transaction, if any, on Magnum Hunter's
debt," said Standard & Poor's credit analyst Kimberly Stokes.

As of Sept. 30, 2004, Irving, Texas-based Magnum Hunter had about
$666 million in total debt outstanding, including capital leases
and convertible debt.

Ratings reflect Magnum Hunter's midsize reserve base and its
participation in the volatile, cyclical, and capital-intensive
exploration and production segment of the petroleum industry, and
aggressive financial leverage.


MAYTAG CORP: Names P.J. Bognar as Senior Vice President for Sales
-----------------------------------------------------------------
Maytag Corporation (NYSE: MYG) reported that Paul J. Bognar will
assume a new role as senior vice president, sales, effective
Feb. 1, 2005.

Mr. Bognar, currently vice president and general manager, Canada,
for Maytag International, will replace Christopher D. Wignall, who
will assume a new role working on special projects focused on
Maytag's growth initiatives.  Both will report directly to Ralph
F. Hake, Maytag chairman and CEO.

In his new assignment, Bognar will be responsible for leading
Maytag's field sales organization in developing and executing
strategies to achieve profitable sales growth through the
organization's various customer channels.

"Paul is a very talented member of our senior leadership team, and
I am very pleased to announce his new appointment," said Hake.
"Paul's demonstrated leadership in his current role with Maytag
International, as well as his tremendous customer-focused
discipline, will provide our sales organization with new energy
and urgency for driving business results."

Mr. Bognar, 45, joined Maytag in 2002 as general manager, Canada,
for Maytag International.  He was named vice president and general
manager in 2004.  He brings more than 20 years of sales and
general management experiences to his new assignment with Maytag,
including previous positions at Whirlpool, Panasonic and Kohler.

Mr. Wignall, 44, began his career with Admiral in 1983 and served
in various executive positions with Maytag Corporation and Maytag
Appliances, prior to becoming senior vice president, sales and
marketing for Maytag Appliances in 2003.  He was named senior vice
president, sales, in 2004.

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.


MID-STATE RACEWAY: Majority Stakeholder Wants Directors Kicked-Out
------------------------------------------------------------------
All Vernon Acquisition, LLC, owner of 52% of the issued and
outstanding shares of Mid-State Raceway, Inc., asks the U.S.
Bankruptcy Court for the Northern District of New York to remove
the Debtors' directors.

All Vernon Acquisition alleges "repeated, persistent, and
inexplicable gross mismanagement and breaches of fiduciary duty"
by the Debtors' directors.

Deborah Deitsch-Perez, Esq., at Lackey Hershman, L.L.P., in
Dallas, Texas, tells the Court that even after Mid-State was
clearly insolvent, the directors drove away bona-fide financiers
and investors, paid tens of thousands of dollars to cronies, and
squandered corporate assets pledged as collateral to its largest
creditor.

The Debtor owes $28 million to Vestin Mortgage, Inc., which makes
Vestin its largest creditor.  Shawn Scott, the owner of All Vernon
Acquisition, guaranteed the Vestin loan.

To protect their interests, Mr. Scott and Vestin offered
$9 million to fund the Debtor's reorganization.  In connection
with the Scott/Vestin offer, Vestin also agreed to reduce its
claim, and its interest rate, providing for a significant benefit
to the Debtor, and satisfying Vestin, Mid-State's largest
creditor.

The Debtor, nonetheless, accepted the offer of New York real
estate developer, Jeffrey Gural, for $8.5 million.

Ms. Perez contends that the Debtors' Board directors' current
actions are the last in a long series of actions demonstrating
their complete inability to exercise reasonable business judgment.

A copy of All Vernon's motion stating its specific allegations is
available for a fee at:

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

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


MID-STATE RACEWAY: J. Gural & TrackPower Acquiring Vernon Downs
---------------------------------------------------------------
TrackPower, Inc., (OTCBB:TPWR) will be entering into a Joint
Venture with Jeffrey Gural, Chairman of Newmark & Company Real
Estate, Inc. of New York City in an attempt to purchase Vernon
Downs Raceway, a harness track located in Vernon, New York.  On
January 14, 2005, the Board of Directors of Mid-State accepted the
offer of Jeffrey Gural to contribute $5.4 Million on an interim
basis, for the continuation of operations of Vernon Downs and
funding of capital improvements.  On confirmation of Vernon Downs
Chapter 11 Plan, the loans will be converted to 80% of the issued
publicly traded common stock of the reorganized debtor.

The offer is subject to approval by the United States Bankruptcy
Court and in the event of Chapter 11 Plan confirmation, obligates
Mr. Gural to loan an additional $3 Million needed to fund video
lottery operations.

Vernon Downs Raceway is the oldest harness track in the State of
New York.

Mr. Gural is a major owner and breeder of Standardbred racehorses
and has a breeding farm in Stanfordville, New York.

If approved by the Bankruptcy Court, TrackPower and Gural will
each hold one-half of the 80% interest acquired on confirmation
and each will contribute one-half of the funding required.

As part of the funding agreement between Mid-State Raceway and
Mr. Gural, emergency financing in the amount of $75,000 has been
advanced against final lending approval, with an equal advance by
a competing lender on the same terms and conditions.  The decision
of the Bankruptcy Court approval of this lending is expected
following the evidentiary hearings scheduled to reconvene on
February 2, 2005.

TrackPower has already partnered with Mr. Gural in the acquisition
of Tioga Downs Racetrack located in Nichols, New York.
Renovations of the track and buildings at Tioga Downs are underway
and the developers expect to engage in a late season harness
racing meet in 2005.  Tioga Downs currently has a Track and a
Simulcast License application pending before the New York State
Racing and Wagering Board.

John Simmonds, CEO of TrackPower, and Jeffrey Gural expressed
enthusiasm for the concept of operating two tracks in Central New
York.  The two tracks are approximately 140 miles apart and serve
different markets.  Yet, these tracks are close enough to share
resources of management, horses and horsemen, resulting in
significant savings for all parties.

It is anticipated that the tracks will develop complimentary
schedules, which will allow the horsemen a greater number of
racing days without traveling to other parts of the country.

As part of the development of these two tracks, Mr. Gural has been
leading a coalition of track owners, horseman, and breeders in
working with Governor George Pataki and the New York State
Legislature to craft legislation to replace the prior New York
State VLT legislation which was found unconstitutional last fall.
The proposed legislation was introduced on December 7, 2004.  The
proposed legislation will provide for a greater participation of
the Tracks in the takeout share of VLT proceeds and should allow
for greater promotional activities, which, in turn, will increase
revenue for the State of New York.

Mr. Gural, on behalf of virtually all tracks, horsemen's'
associations and breeders involved in New York Thoroughbred and
Harness Racing submitted the joint request to the Governor and the
Legislature requesting consideration of the legislation increasing
the tracks' takeout share of VLT proceeds necessary to assure the
economic viability of racing in New York.

The Governor and the State Legislature are expected to address
this problem head on this legislative season to avoid a shut down
of one or more operating Racinos in New York.

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


MIRANT CORP: Financial Projections Underpinning Chapter 11 Plan
---------------------------------------------------------------
The value of the securities to be issued pursuant to the Debtors'
Joint Chapter 11 Plan, and the estimated recoveries by holders of
Allowed Claims who receive those securities, depend in part on the
Debtors' ability to achieve the financial results projected on the
basis of its assumptions," M. Michele Burns, Executive Vice
President, Chief Financial Officer and Chief Restructuring Officer
of Mirant Corporation, notes.

To maximize creditor recoveries, the Debtors must seek to maximize
the value of their businesses.  Additionally, for the Plan to meet
the feasibility test of Section 1129(a)(11) of the Bankruptcy
Code, the Bankruptcy Court must conclude that confirmation of the
Plan is not reasonably likely to lead to the liquidation or
further reorganization of the Debtors.

With these considerations in mind, Ms. Burns says, the Debtors
formulated their projections and assumptions, which in turn served
as the basis for the Plan.  The Debtors believe that the
assumptions that serve as the basis for the projections are
reasonable under the circumstances and that achieving the
projections will maximize the value of their businesses.

The Debtors have prepared the projected operating and financial
results for New Mirant, Mirant Americas Generation LLC, New MAG
Holdco, Mirant Americas MidAtlantic Marketing, Inc., and West
Georgia Generating Company, LLC, for the period ending
December 31, 2011.

A full-text copy of the Debtors' Projections is available for free
at:

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

The Debtors have prepared consolidated pro forma statements of
financial position of Mirant, MAG, New MAG Holdco, MIRMA and West
Georgia at June 30, 2005.  The Pro Forma Statements reflect the
Projections with respect to the consolidated financial position of
the Reorganized Debtors assuming the effects of certain
transactions that will occur in connection with and upon
consummation of the Plan.  The Pro Forma Statements assume the
effectiveness of the Plan and the intercompany transactions will
occur on June 30, 2005.  The Pro Forma Statements also assume that
the Debtors meet the Projections with respect to the balance sheet
for the period from June 30, 2004, to the date of consummation of
the Plan.

For the purposes of the Consolidated Pro Forma Statements of
Financial Position, the Consolidated MAG Debtors intend to
distribute cash at emergence.  The Pro Forma adjustments assume
cash at MIRMA will be available for such distributions.  To the
extent that MIRMA's cash would not be available as a result of a
distribution block, MAG would be required to access its exit
financing to make those payments.

A full-text copy of the Debtors' Pro Forma Statements is available
for free at:

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

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


MORGAN STANLEY: Moody's Junks Classes G & H Certificates
--------------------------------------------------------
Moody's Investors Service downgraded the ratings of two classes of
Morgan Stanley Capital I, Inc., Series 1997-XL1 and placed one
class on review for possible downgrade:

   * Class E, $45,271,000 currently rated A2; on review for
     possible downgrade

   * Class G, $26,408,000 downgraded to Caa2 from B3

   * Class H, $22,638,157 downgraded to C from Caa2

As of the January 5, 2004, distribution date, the transaction's
aggregate certificate balance has decreased by approximately 29.3%
to $533.8 million from $754.5 million at closing as a result of
the payoff of three loans initially in the pool and loan
amortization.  Three of the nine remaining loans, which comprise
49.0% of the aggregate certificate balance, have been defeased in
their entirety - 605 Third Avenue, Edens & Avant, Pool and FGS
Pool (Ashford Financial).

Moody's downgraded Classes G and H based upon anticipated losses
on the two specially serviced loans.  Class E has been placed on
review for possible downgrade pending the anticipated losses and a
full review of the remaining loans in the pool.

Currently there are two specially serviced loans representing
10.7% of the pool balance.  The Westgate Mall Loan (7.1%) is
secured by an enclosed three-anchor mall located in the city of
Fairview Park, Ohio, approximately eight miles from downtown
Cleveland.  This loan was transferred to special servicing in
January 2003.

A six-month forbearance period began in April 2004 whereby the
interest rate on the loan was reduced to 3.5% with an accrual
feature as the borrower was attempting to redevelop the mall with
several big box users as replacements for Dillard's and a portion
of the in-line space.  The loan sponsor is Jacobs Group of
Cleveland, Ohio.  The special servicer has accepted the borrower's
discounted payoff offer of $25.5, resulting in a loss of
approximately $12.3 million on a current loan balance of
$37.8 million.

The Westshore Mall Loan represents 3.6% of the pool.  The loan is
secured by an enclosed four-anchor regional mall located in
Holland, Michigan, approximately 35 minutes south of Grand Rapids.
The mall is anchored by Younkers, J.C. Penney and Dunham's.  Sears
vacated in September 2004 and Target, a shadow anchor, has also
vacated its space and relocated.

The loan sponsors are Wilmorite, Inc., and Ivanhoe (Caisse de
Depot et Placement du Quebec).  The special servicer is pursuing a
deed in lieu of foreclosure.  A broker's opinion of value is
$15.5 million, resulting in a loss of approximately $3.7 million
on a current loan balance of $19.2 million.


MORGAN STANLEY: Interest Shortfalls Prompt S&P to Watch Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on seven
classes of Morgan Stanley Dean Witter Capital I Trust 2001-PPM's
commercial mortgage pass-through certificates on CreditWatch with
negative implications due to interest shortfalls on the
January 2005 remittance.

The aggregate amount of shortfalls for this period was $212,000.
As a result, the classes with ratings placed on CreditWatch
did not receive their full interest payments.  The shortfalls
are due to a loan modification on three loans that are
cross-collateralized and cross-defaulted and have an aggregate
balance of $28.7 million. One of these loans represents the 10th
largest exposure in the pool, while another loan represents the
12th largest loan balance.

Standard & Poor's will resolve the CreditWatch upon performing a
review of the transaction.  An analysis of the liquidity impact of
the modification upon the trust will be conducted at this time.

             Ratings Placed on Creditwatch Negative

      Morgan Stanley Dean Witter Capital I Trust 2001-PPM
         Commercial Mortgage Pass-Through Certificates

                                Rating
                 Class   To                From
                 -----   --                ----
                 G       BBB-/Watch Neg    BBB-
                 H       BB+/Watch Neg     BB+
                 J       BB/Watch Neg      BB
                 K       BB-/Watch Neg     BB-
                 L       B+/Watch Neg      B+
                 M       B/Watch Neg       B
                 N       B-/Watch Neg      B-


NATIONAL CENTURY: Trust Files Mega Lawsuit Against 19 Entities
--------------------------------------------------------------
The Unencumbered Assets Trust -- successor-in-interest to National
Century Financial Enterprises, Inc., and its debtor-affiliates --
and its Trustee, Erwin I. Katz, Ltd., filed a multi-billion dollar
lawsuit in the U.S. District Court for the Southern District of
Ohio on November 17, 2004, against:

   * J.P. Morgan Chase Bank,
   * Bank One, N.A.,
   * Credit Suisse First Boston Corp.,
   * Credit Suisse First Boston (USA), Inc.,
   * Credit Suisse First Boston, LLC,
   * Deloitte & Touche, LLP,
   * PricewaterhouseCoopers, LLP,
   * The Beacon Group III-Focus Value Fund, L.P.,
   * Intercontinental Investment Associates,
   * Healthcare Capital, L.L.C.,
   * Flohaz Partners, L.L.C.,
   * South Atlantic Investments, L.L.C.,
   * Thor Capital Holdings, L.L.C.,
   * Kachina, Inc.,
   * Lance K. Poulsen,
   * Barbara I. Poulsen,
   * Donald H. Ayers,
   * Rebecca S. Parrett, and
   * Task Holdings Ltd.

A full-text copy of the 362-page, 1,074-paragraph Complaint is
available at no charge at:

             http://bankrupt.com/misc/C2-04-1090.pdf

Leon Friedberg, Esq., at Carlile Patchen & Murphy, LLP, in
Columbus, Ohio, relates that NPF VI, Inc., and NPF XII, Inc., were
formed for the limited purpose of purchasing well-defined, high
quality health care accounts receivable and funding those
purchases with the proceeds of the issuances of notes to
investors.

The NPF VI and NPF XII Health Care Securitization Programs were
governed by their Master Indentures.  JPMorgan acted as the
Indenture Trustee for the NPF VI Program, while Bank One served as
the Indenture Trustee for the NPF XII Program.  National Premier
Financial Services was the Servicer for both the NPF VI and NPF
XII Programs.  NCFE Founders Mr. Poulsen, Mr. Ayers and Ms.
Parrett ran the Servicer in their roles as officers and directors.
The Founders managed and operated NPF VI and NPF XII, on behalf of
the Servicer.

The Trust alleged that the Defendants were involved in financial
irregularities, fraudulent activities and schemes, which led to
the downfall of NPF VI and NPF XII.

The Trust asserts Federal RICO Claims, violations of Sections
1962(c) and (d) of the Crimes and Criminal Procedures Code; and
claims under the Ohio Corrupt Practices Act (Ohio Revised Code
Section 2923) against JPMorgan, Bank One, Mr. and Mrs. Poulsen,
Mr. Ayers and Ms. Parrett.  The Trust accuses JPMorgan and the
Founders of engaging in numerous check kiting and looting schemes
and wrongfully transferring tens of millions of dollars from the
Securitization facilities.  The Trustee has identified thousands
of bogus transfers totaling billions of dollars between bank
accounts at JPMorgan and Bank One causing "catastrophic financial
injury" to creditors.  The Trust says that at one point, one
particular bank account was supposed to have a $145 million
balance; the real balance was $8.6 million.

The Trust additionally asserts Breach of Contract, Common Law
Conversions, Negligence and Gross Negligence claims against the
Banks; Common Law Fraud claims against the Founders and the Banks;
and Civil Conspiracy, Concert of Action, Aiding and Abetting, and
Breach of Fiduciary Duty claims against the Defendants.

The Trustee wants to recover all amounts transferred to the
Founders.  The Trustee discovered more than $18 million of
improper cash transfers.  The Trust wants to be compensated for
the improper transfer of stock in E-Medsoft.com and Med
Diversified valued at around $100 million.  Mr. Friedberg asserts
that these funds are recoverable under federal and state
fraudulent transfer statutes -- Sections 544 and 550 of the
Bankruptcy Code and Section 1336 of the Ohio Revised Code.

The Trust wants approximately $5 million from Ms. Parrett and Mr.
Ayers on account of Promissory Notes they delivered to NCFE and
have not paid.

The Trust says NCFE paid illegal dividends to the Founders, The
Beacon Group, and Task Holdings in violation of Section 1701 of
the Ohio Revised Code, and those funds must be returned.  The
Trustee maintains that the Founders were unjustly enriched in
these transactions to the detriment of NPF VI and NPF XII.

The Trustee charges that CSFB was NCFE's principal investment
banker, knew about the fraud, ignored it, and helped the Debtors
raise money from public noteholders "so that the looting . . .
could continue and CSFB's role as an investment banker could be
further entrenched."  The Trustee suggests that CSFB was facing
intense competition and this was the investment banker's
motivation to bribe Messrs. Ayers and Poulsen "to direct
investment banking business to CSFB."  The Trustee says that the
bribes were paid to buy the Founders' loyalty and keep them from
hiring a "real" investment banker that would disclose the fraud.

The bribes, the Trustee says, weren't cash.  Rather, they were
shares of stock issued in dot.com and hot IPOs, parked in accounts
established for the Founders for a couple of days and "flipped"
out at prices that generated $141,000 of profits for Messrs. Ayers
and Poulsen.  The Trust asserts additional claims against CSFB for
RICO violations, Breach of Agency, Breach of Fiduciary Duty,
Fraud, Negligent Misrepresentation, Concert of Action, Civil
Conspiracy, Professional Negligence, and Deepening Insolvency.

The Trustee says the Auditors knew about the financial
irregularities at NCFE, watched the frauds happen and did nothing
-- except issue false and misleading financial statements that
allowed the fraud to continue.  The Trustee charges the Auditors
with Deepening Insolvency claims, Common Law Fraud, Aiding and
Abetting, Concert of Action, Professional Negligence, Negligent
Misrepresentation, and Civil Conspiracy.

Headquartered in Dublin, Ohio, National Century Financial
Enterprises, Inc. -- http://www.ncfe.com/-- through the CSFB
Claims Trust, the Litigation Trust, the VI/XII Collateral Trust,
and the Unencumbered Assets Trust, is in the midst of liquidating
estate assets.  The Company filed for Chapter 11 protection on
November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235).  The Court
confirmed the Debtors' Fourth Amended Plan of Liquidation on
April 16, 2004.  Paul E. Harner, Esq., at Jones Day, represents
the Debtors.  (National Century Bankruptcy News, Issue No. 51;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


NATIONAL ENERGY: Asks Court to Approve Plan Voting Procedures
-------------------------------------------------------------
NEGT Energy Trading Holdings Corporation and its debtor-affiliates
ask Judge Mannes for the United States Bankruptcy Court for the
District of Maryland to:

    -- establish a voting record date and voting procedures;

    -- approve the proposed solicitation procedures; and

    -- establish the date and place for the Confirmation Hearing,
       and deadline for filing objections to confirmation.

                         Voting Record Date

The ET Debtors propose that the record date -- for purposes of
determining which creditors are entitled to vote on the Plan and
for the purpose of determining creditors entitled to receive
required notices -- be March 3, 2005.

                      Solicitation Procedures

Pursuant to the ET Debtors' Plan of Liquidation, these holders
of Claims and Interests are not entitled to vote:

    (a) holders of Claims in Class 2 (Priority Claims) because
        they are unimpaired and conclusively presumed to accept
        the Plan;

    (b) the holder of Interests in Class 10 (Interests in ET Gas)
        and Class 11 (Interests in ET Investments) because ET
        Holdings, a Liquidating Debtor and proponent of the Plan,
        is the holder of all Interests in ET Gas and ET
        Investments and, accordingly, is conclusively presumed to
        accept the Plan; and

    (c) holders of Claims and Interests in Class 8 (General
        Unsecured Claims against Quantum), Class 9 (Subordinated
        Claims) and Class 12 (Other Interests) because they are
        impaired, not eligible to receive a distribution and are
        deemed to reject the Plan.

Holders of Claims in:

    -- Class 1 (Secured Claims),
    -- Class 3 (General Unsecured Claims against ET Gas),
    -- Class 4 (General Unsecured Claims against ET Investments),
    -- Class 5 (General Unsecured Claims against ET Holdings),
    -- Class 6 (General Unsecured Claims against ET Power), and
    -- Class 7 (General Unsecured Claims against ESV),

are entitled to vote because they are impaired and eligible to
receive a distribution.

Only these holders of Claims in the Voting Classes will be
entitled to vote:

    (a) the holders of filed proofs of claim, as reflected on the
        official claims register maintained by Bankruptcy
        Services, LLC, as of the close of business on the Record
        Date, whose Claims have not been withdrawn, disallowed or
        expunged;

    (b) the holders of Disputed Claims, if at all, only to the
        extent that the Liquidating Debtors' objection to that
        Claim concedes that a portion of that Claim should be
        allowed; and

    (c) the holders of scheduled Claims.

The Liquidating Debtors will mail solicitation packages to the
Eligible Voters, which will include:

    a. notice of the Confirmation Hearing,
    b. a copy of the Court-approved Disclosure Statement; and
    c. a ballot.

The Liquidating Debtors will not send Solicitation Packages to
the Unimpaired Class and the Deemed Rejected Classes.  Instead,
they will a notice, which identifies:

    (a) the Unimpaired Class or the classes designated as the
        Deemed Rejected Classes, as applicable;

    (b) the date and time of the Confirmation Hearing; and

    (c) the deadline and procedures for filing confirmation
        objections.

Holders of Claims in the Unimpaired Class and the Deemed Rejected
Classes may receive a copy of the Plan and Disclosure Statement
upon written request to the Balloting Agent.

The Liquidating Debtors propose to publish the Confirmation
Hearing notice in the national edition of The Wall Street Journal
and The Washington Post, at least 20 days prior to the
Confirmation Hearing.

                         Voting Procedures

The Liquidating Debtors ask the Court to establish April 4, 2005,
at 4:00 p.m. (Eastern Daylight Time) as the deadline by which all
ballots accepting or rejecting the Plan must be received at the
ballot tabulation center.

If the Liquidating Debtors file an objection to a Claim at
least 20 days before the Voting Deadline, the Liquidating Debtors
propose that the Claim be temporarily disallowed for voting
purposes only.

Any holder of a Claim who seeks to have its Claim allowed for
voting purposes in an amount different from what is established,
or who seeks to respond to a Voting Objection, must file a motion
setting forth the amount that it believes its Claim should be
allowed and supporting evidence.

The Liquidating Debtors assert that ballots must be properly
completed, filed timely, and signed by the claimant.  Claimants
may not split their votes.  Ballots sent by fax, e-mail or other
electronic communication will not be counted.

             Confirmation Hearing and Objection Deadline

The Liquidating Debtors ask Judge Mannes to schedule the hearing
on confirmation of the plan on April 13, 2005.  Confirmation
objections must be filed by April 4, 2005, at 4:00 p.m. (Eastern
Daylight Time).

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


NEIGHBORCARE INC: Earns $9.7 Million of Net Income in 1st Quarter
-----------------------------------------------------------------
NeighborCare, Inc., disclosed its results for the first quarter of
fiscal 2005 ended December 31, 2004.  Net revenues in the quarter
totaled $392.0 million compared with $338.4 million last year.  In
accordance with generally accepted accounting principles, first
quarter of fiscal 2004 revenue numbers exclude inter-segment
revenues with Genesis HealthCare Corporation -- GHC -- for the
period prior to its spin-off on December 1, 2003.  Net revenues,
as adjusted for inter-segment transactions with GHC, totaled
$351.4 million in the year ago quarter for a year over year
increase of 11.6%.

For the quarter, income from continuing operations was
$9.7 million, or $0.22 per diluted share.  In the same quarter of
the prior year, loss from continuing operations was ($14.1)
million, or ($0.35) per diluted share.  Income from continuing
operations for the quarter ended December 31, 2004, includes the
effect of expenses incurred in connection with our competitor's
unsolicited tender offer to purchase all of our outstanding common
stock, as well as certain strategic planning, severance and other
operating items together aggregating $1.3 million.  Income from
continuing operations for the quarter ended December 31, 2003,
includes certain strategic planning, severance and other operating
items aggregating $40.7 million.

NeighborCare's income from continuing operations, excluding the
effect of expenses incurred in connection with our competitor's
unsolicited tender offer to purchase all of our outstanding stock,
as well as certain strategic planning, severance and other
operating items and including an adjustment to a 40% effective tax
rate, was $10.5 million, or $0.24 per diluted share for the
current quarter. In the same quarter of the prior year, income
from continuing operations adjusted for these charges as well as
inter-segment gross profit on sales to GHC was $9.2 million, or
$0.21 per diluted share.

Adjusted EBITDA for the quarter ended December 31, 2004 was
$30.3 million compared with adjusted EBITDA of $25.6 million for
the same period last year.  Adjusted EBITDA for the first quarter
of 2004 may not be considered comparable because it excludes gross
profit on intersegment revenues from GHC of $2.7 million.
Adjusted EBITDA also excludes the results of discontinued
operations.

John J. Arlotta, NeighborCare's Chairman, President and CEO, said
"I am very pleased with our continued progress executing our
business plan this quarter. We remain on track with our growth
plans, recording good organic net bed growth for the quarter.  In
addition, our December acquisition of Belville Pharmacy Services,
an institutional pharmacy in San Diego, added approximately 17,000
beds and filled in an important market for us."

Mr. Arlotta further noted, "Despite continued Medicaid
reimbursement changes and a difficult competitive price
environment, we were also able to increase our gross profit margin
on a sequential basis for the first time in several quarters.
This is a positive sign that our strategy to take cost out of the
system is working."

At December 31, 2004, NeighborCare served 287,249 beds.  Organic
net bed growth for the quarter totaled 2,161 beds.  Bed counts
ending December 31, 2003 and September 30, 2004 were 250,003 and
262,755, respectively.  Average revenue per bed per month for the
quarter ended December 31, 2004 was $425 compared to $410 for the
same quarter of the prior year (adjusted for inter- segment
revenue).

                    Quarterly Results Review

Net revenues and cost of revenues do not include intersegment
revenues and related cost of revenues with GHC for periods prior
to the spin-off (October 1, 2003 through December 1, 2003).  GAAP
requires that intersegment revenues from GHC for periods prior to
the spin-off be eliminated in consolidation and that the
associated gross profit be included in NeighborCare's discontinued
operations. For comparison purposes, the presentation of adjusted
net revenues, cost of revenues and gross margin reflects the
adjustment to include the intersegment transactions as these
transactions with GHC are and will continue to be reflected in
continuing operations in all periods subsequent to Dec. 1, 2003.
NeighborCare accounts for discontinued operations, including
assets distributed, under the provisions of Statement of Financial
Accounting Standards, No. 144 "Accounting for the Impairment or
Disposal of Long-Lived Assets".  Under SFAS 144, discontinued
businesses including assets distributed are removed from the
results of continuing operations and presented as a separate line
on the statement of operations.

                            Revenues

Net revenue growth for the quarter over the year ago period was
principally driven by growth in revenue of the Company's
institutional pharmacy segment of approximately $56.1 million or
19.9% over the prior year.  On an as adjusted basis this growth
was $43.1 million, or 14.6% over the same period in the prior
year. This growth was driven by an increase in bed census, as well
as increased drug trend partially offset by certain state Medicaid
reimbursement reductions and competitive price reductions.

                        Cost of Revenues

Cost of revenues in the quarter increased by $47.8 million, or
18.2%, to $309.7 million from $262.0 million in the year ago
quarter.  Cost of revenues in the quarter compared with the as
adjusted level last year increased $37.4 million, or 13.7% to
$309.7 million from the as adjusted year ago level of $272.3
million.

                          Gross Margin

Gross margin in the quarter declined to 21.0% from 22.6% last
year. On an as adjusted basis, gross margin declined to 21.0% from
22.5% last year, or 150 basis points. Reduction in the gross
margin is primarily attributable to state Medicaid reimbursement
reductions and changes in product mix and contract pricing.

              Selling, General and Administrative

SG&A in the current quarter increased $1.1 million to
$51.9 million from the year ago level of $50.8 million.  As a
percentage of net revenues, SG&A declined to 13.3% compared to
15.0% for the same period of the prior year.

                Liquidity and Capital Resources

NeighborCare ended the quarter with $21.1 million of cash and
$262.0 million of working capital.

                       Regulatory Update

On Friday, January 21, 2005, the Centers for Medicare & Medicaid
Services (CMS) published the final rules for the new voluntary
prescription drug benefit program that was enacted into law on
December 8, 2003 in section 101 of Title I of the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003
(MMA).  While these final rules layout a framework, there will be
additional information provided through sub-regulatory guidance
from CMS. Additionally, a study on pharmacy services in nursing
homes is expected to be issued mid year 2005 by CMS.

Mr. Arlotta commented, "Although we are studying the regulations
closely, so far we do not see any major surprises.  I have pointed
out many times in the past 18 months that we have been planning
for a competitive environment in 2006 and we will be well
positioned in the marketplace when the Part D program is
implemented in January of 2006."

                        About the Company

NeighborCare, Inc. (Nasdaq: NCRX) -- http://www.neighborcare.com/
-- is one of the nation's leading institutional pharmacy providers
serving long term care and skilled nursing facilities, specialty
hospitals, assisted and independent living communities, and other
assorted group settings.  NeighborCare also provides infusion
therapy services, home medical equipment, respiratory therapy
services, community-based retail pharmacies and group purchasing.
In total, NeighborCare's operations span the nation, providing
pharmaceutical services in 32 states and the District of Columbia.

                          *     *     *

Moody's Rating Services and Standard & Poor's assigned their
single-B ratings to NeighborCare's 6-7/8% Senior Subordinated
Notes last year.


NOVA CHEMICALS: Posts $162 Million Net Income for 2004 4th Quarter
------------------------------------------------------------------
NOVA Chemicals Corporation (NYSE:NCX)(TSX:NCX) reported net income
to common shareholders of $162 million ($1.78 per share diluted)
for the fourth quarter of 2004.  This compares to net income to
common shareholders of $56 million ($0.60 per share diluted) in
the third quarter of 2004.

In the fourth quarter of 2003, NOVA Chemicals reported a net loss
to common shareholders of $15 million ($0.18 per share loss
diluted).

For the full year 2004, net income to common shareholders was
$252 million ($2.71 per share diluted) compared with a net loss of
$1 million ($0.02 per share loss diluted) for 2003.

"I am very pleased with our operating results in a quarter that
was impacted by a normal seasonal downturn in demand and highly
volatile feedstock costs.  In addition, our balance sheet
strengthened considerably from an asset sale and a tax-related
settlement," said Jeff Lipton, NOVA Chemicals' President and Chief
Executive Officer.

The Olefins/Polyolefins business reported net income of $83
million in the fourth quarter, $5 million higher than the third
quarter.  Prices increased and contributions from ethylene co-
products remained strong.  Polyethylene sales volumes were down 2%
versus the third quarter but were the second highest in our
history.

The Styrenics business reported a net loss of $16 million in the
fourth quarter, versus a third quarter net loss of $10 million.
Overall, polymer prices were able to keep pace with increased
feedstock costs.  Styrene monomer margins fell as spot prices
followed a rapid decline in spot benzene prices.  Polymer volumes
decreased 12% versus the third quarter on seasonally lower demand.

Corporate items increased net income by $97 million in the fourth
quarter.  These items included a $91 million (after-tax) gain from
a tax-related settlement, and a $40 million (after-tax) gain on
the sale of our interest in the Alberta Ethane Gathering System.
These were offset by $29 million (after-tax) in mark-to-market
charges related to our stock-based compensation and profit sharing
programs and a $5 million (after-tax) restructuring charge related
to the SCLAIR(TM) A-Line closure in the second quarter of 2004.

                Liquidity and Capital Resources

NOVA Chemicals' net debt to total capitalization ratio was 42.9%
at Dec. 31, 2004.  Cash on hand at the end of the fourth quarter
was $245 million, up from $233 million at the end of the third
quarter of 2004.  During the fourth quarter, $116 million of cash
was used to repurchase 2.7 million common shares.

NOVA Chemicals' funds from operations were $78 million for the
fourth quarter of 2004, down from $129 million in the third
quarter of 2004 due to higher operating losses in the Styrenics
business, higher current tax expense, as well as higher accruals
for corporate expenses and restructuring charges.

Operating working capital decreased by $81 million in the fourth
quarter of 2004, related primarily to reductions in accounts
receivable and increases in payables.  Accounts receivable on
December 31, 2004, net of the $110 million tax receivable,
decreased due to lower sales in December versus September 2004.
Receivables were further reduced by the $24 million increase in
the usage of our securitization program at the end of Q4 versus
the end of Q3.  Quarter over quarter inventory increases were more
than offset by increases in accounts payable over the same
timeframe.

NOVA Chemicals assesses its working capital management
effectiveness through a Cash Flow Cycle Time -- CFCT -- measure.
CFCT measures working capital from operations in terms of the
number of days sales (calculated as working capital from
operations divided by average daily sales).  This metric helps to
determine which portion of changes in working capital results from
factors other than price movements.  CFCT was 35 days as of
Dec. 31, 2004, versus our target range of 25 to 30 days, and up
from 33 days as of Sept. 30, 2004, due to building of inventories
for maintenance turnarounds and a temporary fall off of sales in
December.

During the fourth quarter, NOVA Chemicals sold its interest in the
Alberta Ethane Gathering System (AEGS) for proceeds of $78 million
and an after-tax gain of approximately $40 million. Capital
expenditures were $94 million (after third-party project advances)
in the fourth quarter of 2004, compared to $57 million in the
third quarter of 2004 and $49 million in the fourth quarter of
2003.

NOVA Chemicals continued its share repurchase program during the
fourth quarter.  In addition, the Company paid stock option
exercise values of $17 million in cash in lieu of issuing stock in
the fourth quarter.

Selling, general and administrative expenses (SG&A) increased by
$2 million from the third quarter of 2004.  SG&A was also up
$23 million from the fourth quarter of 2003, and $83 million for
fiscal 2004 versus fiscal 2003.  The increase for the year was
primarily due to the $76 million pre-tax impact of NOVA Chemicals'
stock appreciation on the mark-to-market liability of our
stock-based compensation plans, as well as a $9 million impact
from a higher Canadian dollar and a higher euro.

A restructuring charge of $8 million ($5 million after-tax) was
recorded in the fourth quarter of 2004 due to additional
environmental and severance obligations related to the permanent
2004 shutdown of one of our linear low-density polyethylene
production lines at our St. Clair River polyethylene plant site.

                           Financing

NOVA Chemicals has a $300 million revolving credit facility,
expiring April 1, 2007.  NOVA Chemicals continues to comply with
all financial covenants under the facility.  As of Jan. 25, 2005,
NOVA Chemicals has utilized $55 million of the revolving credit
facility in the form of operating letters of credit.

In Sept. 2005, $100 million of debt will mature.

As of Dec. 31, 2004, the amount of receivables sold under the
accounts receivable securitization program was $250 million,
compared to $226 million as of Sept. 30, 2004.

                    Normal Course Issuer Bid

On July 21, 2004, NOVA Chemicals announced a share repurchase
program for up to approximately 7.5 million common shares. As of
Jan. 21, 2005, 5.1 million common shares have been repurchased at
an average price of $48.02 Cdn.

                          FIFO Impact

NOVA Chemicals uses the first-in, first-out -- FIFO -- method of
valuing inventory.  Most of NOVA Chemicals' competitors use the
last-in, first-out -- LIFO -- method.  Because we use FIFO, a
portion of the third quarter feedstock purchases flowed through
the income statement in the fourth quarter.  Fourth quarter
average NYMEX natural gas pricing was higher than the third
quarter average price by $1.03 per mmBTU and WTI crude was higher
by $4.40 per bbl.  Benchmark benzene prices fell during the
quarter, starting the quarter at $3.95 per gallon and ending the
quarter at $3.25 per gallon. We estimate that net income would
have been about $14 million higher in the fourth quarter had NOVA
Chemicals used the LIFO method of accounting.

                 Feedstock Derivative Positions

NOVA Chemicals maintains a derivatives program to manage its
feedstock costs.  The gain from natural gas and crude oil
positions realized in the fourth quarter of 2004 was $6 million
after-tax ($5 million gain after-tax for fiscal year 2004).

In addition, NOVA Chemicals is required to record on its balance
sheet the market value of any outstanding feedstock positions that
do not qualify for hedge accounting treatment. The gain or loss
resulting from changes in the market value of positions is
recorded through earnings each period.  NOVA Chemicals has
recorded $6 million of after-tax mark-to-market losses on
outstanding feedstock derivative positions in the fourth quarter
($5 million gain after-tax for fiscal year 2004.)

There was no impact to NOVA Chemicals' income statement as the
gain from the derivatives program in the fourth quarter of 2004
was entirely offset by the mark-to-market loss during the same
time period.

NOVA Chemicals' share price on the New York Stock Exchange
increased to U.S. $47.30 at Dec. 31, 2004 from U.S. $38.70 at
Sept. 30, 2004.  NOVA Chemicals' share value increased 22% for the
quarter ending Dec. 31, 2004 on the NYSE and 16% on the Toronto
Stock Exchange -- TSX, while peer chemical companies' share values
increased 18% on average and the S&P Chemicals Index increased
13%.  The S&P/TSX Composite Index was up 7% and the S&P 500 was up
9% in the fourth quarter.  As of Jan. 25, 2005, NOVA Chemicals'
share price was U.S. $46.90, down 0.8% from Dec. 31, 2004.  The
S&P Chemicals Index was down 3.8% in the same period.

In the fourth quarter, approximately 59% of trading in NOVA
Chemicals' shares took place on the TSX and 41% of trading took
place in the U.S. For 2004, approximately 65% of trading in NOVA
Chemicals' shares took place on the TSX and 35% of trading took
place in the U.S.

NOVA Chemicals -- http://www.novachemicals.com/-- produces
ethylene, polyethylene, styrene monomer and styrenic polymers,
which are used in a wide range of consumer and industrial goods.
NOVA Chemicals manufactures its products at 18 operating
facilities located in the United States, Canada, France, the
Netherlands and the United Kingdom.  The company also has five
technology centers that support research and development
initiatives.  NOVA Chemicals Corporation shares trade on the
Toronto and New York stock exchanges under the trading symbol NCX.

As reported in the Troubled Company Reporter on Jan. 27, 2005,
Moody's Investors Service affirmed the Ba2 senior unsecured
ratings of NOVA Chemicals Corporation, and revised its ratings
outlook to stable from negative.

Moody's also changed the company's speculative grade liquidity
rating to SGL-1 from SGL-2.  The outlook revision was prompted by
NOVA's announcement that it expects to receive a cash payment of
approximately $110 million stemming from its resolution of a tax
dispute with U.S. Internal Revenue Service.  This is in addition
to the $80 million received in the fourth quarter of 2004 from the
sale of its ethane gathering system.  The ratings affirmations
reflects Moody's view that the combination of the cyclical upturn
in petrochemicals, and these one-time cash inflows, will enable
the company to maintain a robust cash balance despite anticipated
share repurchases and the pending maturity of $100 million of
debentures in September 2005.

As reported in the Troubled Company Reporter on Dec. 23, 2004,
Standard & Poor's Ratings Services revised its outlook on
petrochemicals producer Nova Chemicals Corp. to stable from
negative.  At the same time, Standard & Poor's affirmed the 'BB+'
long-term corporate credit and senior unsecured debt ratings on
Nova.


OMNOVA SOLUTIONS: Posts $14.7 Million Net Loss in Fourth Quarter
----------------------------------------------------------------
OMNOVA Solutions Inc. (NYSE: OMN) reported a loss of
$14.7 million for the fourth quarter of 2004, compared to a loss
of $61.3 million during the fourth quarter of 2003.

Included in the fourth quarter of 2004 was a non-cash impairment
write-down of $3.9 million for a trademark resulting from the
Company's annual evaluation under SFAS 142, "Goodwill and Other
Intangible Assets."  Excluding this write-down, the Company
reported a loss of $0.27 per diluted share for the fourth quarter
of 2004.  Included in the fourth quarter of 2003 were non-cash
charges of $49.6 million related to SFAS 142, "Goodwill and Other
Intangible Assets," $5.7 million for the write-off of idle fixed
assets, obsolete inventories and intangible assets, and a
provision of $1.7 million associated with the restructuring and
severance resulting primarily from the Company's exit of its heat
transfer product line.  Excluding these items, the Company
reported a net loss of $4.3 million, or $0.11 per diluted share,
for the fourth quarter of 2003.

Sales increased 10.4%, or $18.2 million, to $194.0 million for the
fourth quarter of 2004 as compared to $175.8 million during the
same period a year ago.  Contributing to the sales increase were
pricing improvements of $18.0 million.  Cost of goods sold for the
fourth quarter of 2004 increased $22.6 million to $156.1 million
versus the same quarter last year, driven primarily by $21.4
million of higher raw material costs.  Gross profit declined to
$37.9 million in the fourth quarter of 2004 as compared to $42.3
million in 2003 due to higher raw material and warranty costs.
Selling, general and administrative costs increased $4.3 million
to $37.5 million, or 19.3% of sales, in the fourth quarter of 2004
versus $33.2 million, or 18.9% of sales, in the fourth quarter of
2003 due to higher sales taxes, information technology and
Sarbanes-Oxley 404 compliance related spending.  Interest expense
increased slightly to $5.2 million for the fourth quarter of 2004
as compared to $5.1 million for the same period a year ago, due to
higher average borrowing rates.  The Company's total debt at the
end of the fourth quarter of 2004 was $181.7 million, a decrease
of $3.7 million from the third quarter of 2004, and $10.5 million
lower than last year.

"Additional pricing actions, a strong focus on cash flow, and good
top line growth were the highlights of the quarter, but they were
not enough to offset record raw material costs," said Kevin
McMullen, OMNOVA Solutions' Chairman and Chief Executive Officer.
"Our operating profit was impacted by oil prices at $55 per barrel
during the quarter. However, we made significant progress in the
fourth quarter in implementing price increases, with more on the
way in early 2005. In addition to pricing initiatives, we are
taking actions to help offset future raw material risk including
leveraging new volume opportunities created by innovative new
products and improving markets, restructuring our cost base, and
using LEAN SixSigma programs to eliminate waste and improve
customer satisfaction. As a result of our strong focus on cash
flow actions, average debt declined almost $9 million to $201
million."

                     Performance Chemicals

Net sales during the fourth quarter of 2004 increased 20.4% to
$100.9 million versus $83.8 million in the fourth quarter of 2003,
led by higher average unit selling price.  Segment operating
profit was $4.0 million in the fourth quarter of 2004 as compared
to $2.5 million in the fourth quarter of 2003.  Excluding
restructuring and severance charges of $0.2 million and a $2.7
million intangible asset write-off, segment operating profit in
the fourth quarter of 2003 was $5.4 million.  As compared to last
year, raw material costs were up $19.7 million during the quarter
as a result of higher styrene, butadiene and acrylic costs driven
by high oil and natural gas based feedstock costs, especially
benzene, ethylene and propylene. Increased pricing to customers
totaled $16.9 million versus the same period a year ago. During
the Company's first quarter of 2005, raw material prices are
expected to escalate in butadiene and acrylic monomers, while
styrene is expected to moderate. In response to the continuing raw
material inflation, Performance Chemicals achieved price increases
totaling almost $30 million in fiscal 2004 and has announced
additional price increases across all product lines in early 2005.

During the quarter, the Company's RohmNova paper chemicals joint
venture captured business with its new High Performance GenCryl(R)
Platinum Pt(TM) coating products and continues trialing activity
at several potential accounts.  The North American coated paper
market continues to improve, driven by higher print ad spending
and lower imports due to a weaker U.S. currency.  The carpet
product line is developing new opportunities in carpet latex and
expects increased trialing activity in the first quarter of 2005.
Sales in nonwovens, tire cord, and adhesive/tape applications
generated double digit sales gains for the year.

                      Decorative Products

Net sales were $61.1 million during the fourth quarter of 2004, a
decrease of $1.9 million, or 3.0%, versus 2003.  Last year's sales
included $0.3 million related to the heat transfer product line
that the Company exited in late 2003, while favorable foreign
exchange conversion benefited fourth quarter 2004 sales by
$1.1 million.  During the fourth quarter of 2004, coated fabrics
sales increased versus last year with higher volume due to new
product introductions and increased customer penetration in the
marine and automotive aftermarket areas.  Wallcovering sales
declined due to continued weakness in the commercial office
market, partially offset by a recovery in the hospitality market.
Decorative laminates sales, excluding the exited heat transfer
business, declined modestly versus last year.

Decorative Products' operating loss totaled $8.9 million for the
fourth quarter of 2004, versus a loss of $58.2 million in the same
period a year ago.  Included in the fourth quarter of 2004 results
are non-cash charges totaling $3.9 million for the write-off of a
trademark, restructuring and severance provision of $0.1 million,
and higher costs related to quality claims and labor contract
negotiations, and higher raw material costs of $1.1 million as
compared to last year.  Included in the fourth quarter of 2003
results were LIFO income of $2.0 million and charges totaling
$54.0 million, comprised of a restructuring and severance
provision of $1.4 million, a provision of $49.6 million for the
write-off of goodwill and trademarks and $3.0 million for the
write-off of idle fixed assets, obsolete inventory and intangible
assets.

For the full year, sales increased modestly after four consecutive
years of decline, and revenues for the Company's unconsolidated
Asian joint ventures improved 27.8% versus last year as the
operations gained market share while serving an increasingly
global customer base.  In the middle of the first fiscal quarter
of 2005, employees represented by United Steelworkers of America
Local 22R at OMNOVA's Jeannette, Pennsylvania facility voted to
ratify a new contract with the Company.  This ended a lockout at
the facility that had been in place since December 4, 2004.
During the lockout, OMNOVA continued to operate the plant and
fully serve customers.

                       Building Products

Net sales of the Company's single-ply commercial roofing membrane
products were $32.0 million during the fourth quarter of 2004, an
increase of 10.3% compared to $29.0 million in the fourth quarter
of 2003, led by strong sales of EPDM membrane and accessories.
Refurbishment sales continued to be strong as many building owners
increased their spending on maintenance requirements and the
single-ply roofing market took market share from asphalt-based
systems.  The segment generated an operating loss of $1.1 million
for the fourth quarter of 2004, which was a decrease of $2.6
million versus last year.  Higher sales volumes were offset by
increased warranty and higher raw material costs.  Price increases
of approximately 5% were implemented in the single-ply membrane
market, effective October 2004, with additional increases
announced for January, March and April 2005 to offset the rising
costs of raw materials, including EPDM membrane, resins,
plasticizer, textile fabrics and steel-based accessories.

                        About the Company

OMNOVA Solutions Inc. is a technology-based company with 2004
sales of $746 million and 2,000 employees worldwide. OMNOVA is an
innovator of emulsion polymers and specialty chemicals, decorative
and functional surfaces, and single-ply roofing systems for a
variety of commercial, industrial and residential end uses.

                         *     *     *

As reported in the Troubled Company Reporter on Oct. 20, 2004,
Standard & Poor's Ratings Services lowered its ratings on OMNOVA
Solutions Inc., including the corporate credit rating to 'B+' from
'BB-'.  The downgrade reflects continued weak profitability as a
result of elevated raw material costs and the company's subpar
financial profile relative to ratings expectations.  The outlook
is stable.


PACIFIC LUMBER: S&P Places Junk Rating on CreditWatch Negative
--------------------------------------------------------------
Standard & Poor's Rating Services placed its CCC+ corporate credit
rating on Scotia, California-based Pacific Lumber Co. on
CreditWatch with negative implications.

The company's wholly owned subsidiary and primary log supplier,
Scotia Pacific Co. LLC, is having difficulty obtaining approval
from the North Coast Regional Water Quality Board to harvest
timber on about a dozen tracts of land it owns.  This is causing a
raw-material shortage at Pacific Lumber, whose production volume,
revenues, and cash flow are therefore lower than expected.

It is critical that the approvals be received soon because logging
is subject to seasonal restrictions later in the year.

"If additional approvals are not received by the end of February,
it could have serious consequences for Pacific Lumber, including
the possibility that it could file for bankruptcy," said Standard
& Poor's credit analyst Dominick D'Ascoli.

In the interim, reduced log supply will continue to erode an
already precarious liquidity position. Current liquidity is below
$10 million.

In resolving the CreditWatch action, Standard & Poor's will assess
the impact on Pacific Lumber's financial profile of the approval,
partial approval, or failure to obtain approval of pending logging
permits.  Standard & Poor's expects to resolve its CreditWatch
action by the beginning of March at the latest.


PERKINELMER INC: Fourth Qtr. Revenues Up 11% to $478.6 Million
--------------------------------------------------------------
PerkinElmer, Inc. (NYSE: PKI), reported GAAP earnings from
continuing operations on revenue of $478.6 million for the fourth
quarter ended Jan. 2, 2005.  The fourth quarter 2004 results
include intangibles amortization of $7.2 million, or approximately
$.04 per share.  The Company reported earnings per share from
continuing operations excluding intangibles amortization of $.33,
which exceeded the Thomson First Call(TM) consensus earnings per
share estimate of $.31 for the fourth quarter of 2004 and also the
Company's forecasted range.  The Company reported full year 2004
GAAP earnings per share from continuing operations of $.76, an
increase of 69% over 2003.

Fourth quarter 2004 revenue of $478.6 million increased 11% over
the fourth quarter of 2003.  Revenue growth excluding the impact
of foreign exchange was 8% over the fourth quarter of the prior
year.  Fourth quarter 2004 revenue in Health Sciences increased
8.5% over the same period of 2003 driven by double digit growth in
genetic screening, medical imaging, environmental and service.
Industrial Technologies revenue in the fourth quarter of 2004
increased 17.3% over the fourth quarter of 2003 due to strength in
nearly all applications, including the Company's aerospace, safety
and security, and semiconductor businesses.  Full year 2004
revenue of $1.69 billion increased 10% over 2003, with Health
Sciences revenue growth of 7.1% and Industrial Technologies
revenues up 17.7%.

"We delivered a strong quarter to complete an excellent year in
2004, with significant revenue and earnings growth and very good
cash flow," said Gregory L. Summe, Chairman and CEO of the
Company.  "During 2004, a number of businesses achieved
double-digit growth, and we enter 2005 with good momentum," added
Mr. Summe.

The Company generated operating cash flow of $71.0 million in the
fourth quarter of 2004 and $200.8 million for the full year of
2004.  Free cash flow, defined as operating cash flow of
$71.0 million less capital expenditures of $6.4 million, was
$64.6 million for the fourth quarter of 2004.  Free cash flow for
fiscal 2004 was $181.8 million, or approximately $1.40 per share,
and was comprised of operating cash flow of $200.8 million less
capital expenditures of $19.0 million.  During the fourth quarter
and full year of 2004, the Company reduced debt by $100 million
and $175 million, respectively.  Cash and cash equivalents were
$197.5 million at the end of the fourth quarter of 2004.

            Financial Overview by Reporting Segment

Life and Analytical Sciences reported revenue of $311.9 million
for the fourth quarter of 2004, up 7% from revenue of $290.4
million in the fourth quarter of 2003.  The increase in revenue
was driven by double digit revenue growth in the Company's genetic
screening, service and environmental businesses.

The segment's GAAP operating profit for the fourth quarter of 2004
was $46.6 million versus $41.1 million for the same period of
2003.  As a percentage of sales, operating profit for the fourth
quarters of 2004 and 2003 was 14.9% and 14.2%, respectively.  The
operating profit for the fourth quarters of 2004 and 2003 included
intangibles amortization of $6.6 million.  Operating profit
excluding intangibles amortization for the fourth quarter of 2004
was $53.2 million, or 17.1% as a percentage of revenue, increasing
70 basis points over the same period of 2003.

Optoelectronics reported revenue of $101.5 million for the fourth
quarter of 2004, an increase of 12% from revenue of $90.3 million
for the fourth quarter of 2003, with the increase in revenue
driven by continued strength in the Company's medical imaging and
sensors businesses.

The segment's GAAP operating profit was $15.6 million for the
fourth quarter of 2004, versus $12.9 million for the comparable
period of 2003.  As a percentage of sales, operating profit for
the fourth quarter of 2004 was 15.4%, up 110 basis points over the
fourth quarter of 2003.

Fluid Sciences reported revenue of $65.2 million for the fourth
quarter of 2004, up 27% from revenue of $51.1 million in the
fourth quarter of 2003.  This increase in revenue was driven by
strong growth in the segment's aerospace and semiconductor
businesses.

The segment's GAAP operating profit for the fourth quarter of 2004
was $10.4 million, versus $6.8 million for the same period last
year.  As a percentage of sales, operating profit for the fourth
quarters of 2004 and 2003 was 15.9% and 13.3%, respectively.

"In 2004, we made significant operational improvements and
strengthened our organization and market positions," added
Mr. Summe.  "For 2005, we anticipate significantly higher R&D
investments to accelerate innovation. Combined with our
significant cash flow, this provides fuel for our growth
investments in key health sciences and industrial technology
opportunities," continued Mr. Summe.

For the first quarter of 2005, the Company projects GAAP earnings
per share from continuing operations of between $.13 and $.14.
Excluding the impact of intangibles amortization, the Company
projects earnings per share from continuing operations of between
$.17 and $.18 for the first quarter of 2005.  For the full year
2005, the Company reaffirmed its guidance for GAAP earnings per
share of between $.90 and $.95, and excluding intangibles
amortization, the Company is forecasting a range of $1.05 and
$1.10 earnings per share.

                       About the Company

PerkinElmer, Inc. -- http://www.perkinelmer.com/--  is a global
technology leader focused in the following businesses - Life and
Analytical Sciences, Optoelectronics and Fluid Sciences.
Combining operational excellence and technology expertise with an
intimate understanding of our customers' needs, PerkinElmer
provides products and services in health sciences and other
advanced technology markets that require innovation, precision and
reliability. The Company serves customers in more than 125
countries, and is a component of the S&P 500 Index.

                         *     *     *

As reported in the Troubled Company Reporter on Oct 13, 2004,
Moody's Investors Service affirmed PerkinElmer, Inc.'s debt
ratings, adjusted the issuer rating to Ba3 from Ba2, and changed
the rating outlook to positive from stable.


PIPEMASTERS INC: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Pipemasters, Inc.
        3400 Teays Valley Road
        P.O. Box 1088
        Hurricane, West Virginia 25526

Bankruptcy Case No.: 05-20153

Type of Business: The Debtor provides residential and commercial
                  plumbing repair services.

Chapter 11 Petition Date: January 25, 2005

Court: Southern District of West Virginia (Charleston)

Judge: Ronald G. Pearson

Debtor's Counsel: Susan Cannon-Ryan, Esq.
                  P.O. Box 3973
                  Charleston, WV 25339
                  Tel: 304-344-8716
                  Fax: 304-344-1481

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $500,000 to $1 Million

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


POGO PRODUCING: S&P Revises Outlook on BB+ Ratings to Stable
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' corporate
credit rating on Pogo Producing Co.  At the same time, Standard &
Poor's revised its outlook on Pogo to stable from positive,
following Pogo's announcement of its 2005 budget plans which will
consist of sizable share repurchases, rapid exploration, potential
acquisitions, postponed development drilling, and a potential
asset sale of its international assets in 2005.

Houston, Texas-based Pogo had $755 million of debt as of
Dec. 31, 2004.

"The revised outlook on Pogo reflects the company's more
aggressive financial policies, specifically, its share-repurchase
program of between $275 million to $375 million, and an
accelerated exploration and seismic expenditures of about
$132 million in 2005.  Standard & Poor's notes the possibility
that Pogo will continue to pursue debt-financed acquisitions and
the potential sale of its international assets (which represented
about 30% of total production in 2004), comes at a time when Pogo
faces increased finding and development costs and declining
production," said Standard & Poor's credit analyst Brian Janiak.
"Pogo's solid financial measures for the current ratings and
expected near-term cash flow generation provide some financial
cushion for Pogo to prudently implement its more aggressive
initiatives in 2005," added Mr. Janiak.

Nevertheless, Standard & Poor's will closely monitor Pogo's more
aggressive initiatives in 2005, declining production levels, and
increasing costs with the company's ability to maintain
appropriate financial metrics and adequate liquidity for the
current ratings.

The stable outlook on Pogo reflects Standard & Poor's expectations
that Pogo will prudently manage its more aggressive financial
policies and 2005 budget initiatives, while maintaining its sound
financial profile and adequate liquidity for the current ratings.
Conversely, significant increases in debt leverage to meet the
company's sizable share-repurchase program, exploration
expenditures, and failure to reverse its increasing operational
costs could lead to an adverse ratings action on the outlook or
lower ratings.


PQ CORP: Moody's Puts B1 Rating on $410M Sr. Sec. Bank Facility
---------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to the $410 million
of senior secured credit facilities of PQ Corporation, a
Pennsylvania-based corporation.  The senior credit facilities
consist of a $310 million seven-year secured, term-loan and
$100 million six-year, secured revolver.

A proposed $300 million eight-year senior subordinated note has
been assigned a B3 rating.  The credit facilities are guaranteed
by PQ Corp.'s parent, Niagara Holdings, Inc.  The credit
facilities and the notes are guaranteed by all domestic
subsidiaries.  The senior implied rating of PQ Corp. is B1.  The
credit facilities, the notes and the equity from JPMorgan Partners
and management are being used to fund Holdco's acquisition of PQ
Corp.  The Company was an unrated private Pennsylvania-based
corporation.

This is the first time that Moody's has rated the debt of PQ
Corp., a leading provider of inorganic specialty chemicals,
including sodium silicate and high performance silicate-
derivatives, and engineered glass materials.  A speculative grade
liquidity rating was also assigned at SGL-2. The outlook is
stable.

The ratings assigned are:

   * Senior Implied -- B1

   * Senior Unsecured Issuer Rating -- B2

   * $100 million six-year, guaranteed, secured, revolver -- B1

   * $310 million seven-year, guaranteed, secured, term-loan -- B1

   * $300 million eight-year, guaranteed, senior subordinated note
     -- B3

Moody's views PQ Corp.'s strong stable geographically diverse
inorganic specialty chemicals and engineered glass materials
businesses as its primary credit strength.  In addition, the B1
rating recognizes PQ Corp.'s leading market positions and its
stable source of revenues and operating cash flow and ability to
generate meaningful free cash flow.  We believe PQ Corp. operates
in a steady field that exhibits constant but modest growth
potential.

The B1 senior implied rating also reflects the relatively small
size of PQ Corp.'s revenue base.  Total debt is likely to
initially exceed total revenues.  The rating also anticipates that
PQ may pursue modest bolt-on acquisitions, as it has been a
consolidator in its industries.  Finally, the rating reflects the
risks associated with PQ's debt and equity financed purchase from
its former parent and its initially weak credit metrics.

Moody's notes that the credit agreement for the credit facility
contains many standard covenants.  However, the possible level of
additional indebtedness and restricted payments allowed under the
credit agreement raises concern given PQ Corp.'s already
substantial leverage.  The credit agreement may allow for
substantial additional indebtedness that could further subordinate
the notes and a material initial basket for restricted payments
and investments that could reduce cash flow available for debt
reduction.

This concern is somewhat offset by management's credibility and
their intent to focus on debt reduction rather than the pursuit of
material acquisitions or other transactions. The ratings do
anticipate the possibility of a modest level of small bolt-on
acquisitions.

PQ Corp.'s stable outlook considers the strength of its franchise
in terms of its market positions and long-lived customer
relationships, offset by the leveraged nature of its balance
sheet.  More than 85% of sales reflect products in which PQ has a
meaningful number one position.

If material special dividends to owners occur before substantial
debt reduction is achieved, the outlook or rating could turn
negative.  To the extent that PQ reduces debt faster than expected
such that debt/EBITDA metrics improve to 4 times or less on a
permanent basis a positive change in outlook or rating could
occur.

Moody's believes that the purchase price, including debt
refinancing and fees of over $770 million represents a multiple of
roughly 7 times PQ's normalized EBITDA of $108 million for the
twelve months ending September 30, 2004.  After the transaction,
Moody's estimates projected total debt to EBITDA will slightly
exceed 5 times for the year ending December 31, 2005.

In addition, interest coverage at PQ is considered modest with
Moody's projecting EBITDA covering interest expense in excess of
2.5 times for the year ending December 31, 2005.  Moody's expects
PQ to generate approximately $630 million in total revenues in
2005.  We would expect debt leverage, Total Debt/EBITDA, on a
consolidated basis, to drop to about 5 times as of Dec. 31, 2006.

Structurally, the B1 assigned to the credit facilities reflects
their senior secured position in the capital structure although
asset coverage in a distressed scenario does not provide the
support necessary to move the B1 rating higher even with its
secured position.  Moody's views the level of asset coverage in a
distressed scenario as marginal.

The credit facilities will be secured by perfected first priority
pledges of all the equity interests of PQ Corp. and each of the
Company's direct and indirect US subsidiaries and 65% of the
equity interests of the first tier Foreign Subsidiaries, except
Unrestricted Subsidiaries and perfected first priority security
interests in and mortgages on all material tangible and intangible
assets of PQ Corp. and the guarantors.

The credit facilities are fully and unconditionally guaranteed on
a joint and several basis by Holdings.  The credit facilities and
the notes are fully and unconditionally guaranteed on a joint and
several basis by all of the existing and future direct and
indirect US subsidiaries of PQ Corp.  The equity contribution of
$164 million will come in the form of cash that will be
down-streamed from Holdco.

The SGL-2 rating indicates good liquidity.  PQ Corp.'s liquidity
is supported by its ability to generate positive pro-forma free
cash flow, and the anticipated availability under its $100 million
committed bank facility, modest near-term debt maturities, and the
expectation that it will be well in compliance with its financial
covenants with sufficient EBITDA cushion over the next five
quarters.

Asset sales are not expected to be a significant source of
liquidity in the near term.  Moody's notes however that a decline
in anticipated annual free cash flow to less than $20 million, or
a modest reduction in either cash balances or availability on the
revolving credit facility could result in a lower liquidity
rating.

PQ Corporation headquartered in Berwyn, Pennsylvania, is a leading
provider of inorganic specialty chemicals, including sodium
silicate and high performance silicate-derivatives, and engineered
glass materials.  Sales for the last twelve months ending
September 30, 2004 were $587 million.


RELIANCE GROUP: RIC Will Pay $990K to Settle Sandenhill D&O Claims
------------------------------------------------------------------
In 1999, Frank J. Dalicandro commenced a civil action in the
United States District Court for the Eastern District of
Pennsylvania against Defendants Dennis Costello, Edward Charlton,
Lawrence Kwasny and Howard Steinberg.  The District Court Action
was captioned Dalicandro v. Legalgard, Inc., et al., Civil Action
No. 2:99 CV-03778-WY.  Mr. Dalicandro alleged violations of
Section 10(b) of the Securities and Exchange Act of 1934.
Reliance Insurance Company was originally named as a Defendant,
but the matter was stayed as to RIC due to the stay provisions of
the Liquidation Order issued by the Commonwealth Court of
Pennsylvania in 2001.

On November 5, 2003, Mr. Dalicandro, on behalf of the Sandenhill
Inc. Estate, commenced an adversary proceeding in the Chapter 7
bankruptcy proceedings of Sandenhill, Case No. 02-11232-KJC.  The
Adversary Action, which was before the United States Bankruptcy
Court for the Eastern District of Pennsylvania, was captioned
Sandenhill, Inc., v. Reliance Insurance Company, Inc., et al.,
Adversary No. 03-1162.  The Adversary Action was filed against
RIC, Albert Benchimol, Dennis O'Leary and Howard Steinberg.  The
Adversary Action sought the return of $10,900,000 that Sandenhill
transferred to RIC as an avoidable transfer, pursuant to Section
548 of the Bankruptcy Code.

RIC and the Defendants assert that they are beneficiaries under
Insurance Policy Nos. FD9701593, FD9804211, FD9701594, FD9798178
and FD9900896 issued by Underwriters at Lloyd's, London and
Companies.  The parties dispute whether the Insurance Policies
may be used, and to what extent, to satisfy any potential
judgment in the District Court Action or the Adversary Action.

Proceedings in both Actions have been stayed while Mr.
Dalicandro, the Defendants, M. Diane Koken, the Insurance
Commissioner of the Commonwealth of Pennsylvania, as Liquidator
of RIC, and the Underwriters conducted settlement discussions.

In connection with these negotiations, each party independently
assessed the substantial risks and costs of litigation relating
to the District Court Action and the Adversary Action.  Each
party subsequently determined to settle the claims asserted in
the District Court Action and the Adversary Action in accordance
with the terms of a Final Agreement.

The Final Agreement provides that the Underwriters, on behalf of
the Defendants, will pay Mr. Dalicandro $990,000 in consideration
for the dismissal of the District Court Action and the Adversary
Action, with no admission of liability by the Defendants.

To effectuate the settlement, the Defendants ask Judge Gonzalez
to approve the payment of the Settlement Amount from the proceeds
of the Insurance Policies.  To the extent the Insurance Policies
constitute property of the Debtors' estate, the Defendants ask
Judge Gonzalez to lift the automatic stay to allow payment of the
Settlement Amount.

The Defendants also seek an injunction permanently barring
creditors of the Debtors' estate from directly or indirectly
taking actions inconsistent with the Final Agreement.

The payment of the Settlement Amount is also subject to approval
by the Commonwealth Court.  Stephen B. Selbst, Esq., at
McDermott, Will & Emery, in New York City, tells Judge Gonzalez
that the Liquidator is seeking approval of the Agreement from the
Commonwealth Court.

After the Bankruptcy Court and the Commonwealth Court approves
the Agreement, Mr. Dalicandro will move to dismiss the Adversary
Action with prejudice.

Mr. Selbst contends that the Final Agreement is reasonable in
light of the allegations raised in the District Court Action and
the Adversary Action, the complexity of the litigation, and the
anticipated costs in time and money of prosecuting and defending
the litigation.  The payment to Mr. Dalicandro will prevent undue
erosion of the remaining coverage limits of the Insurance
Policies, which are capped at $125,000,000 for the Defendants.

Headquartered in New York, New York, Reliance Group Holdings, Inc.
-- http://www.rgh.com/-- is a holding company that owns 100% of
Reliance Financial Services Corporation.  Reliance Financial, in
turn, owns 100% of Reliance Insurance Company.  The holding and
intermediate finance companies filed for chapter 11 protection on
June 12, 2001 (Bankr. S.D.N.Y. Case No. 01-13403) listing
$12,598,054,000 in assets and $12,877,472,000 in debts.  The
insurance unit is being liquidated by the Insurance Commissioner
of the Commonwealth of Pennsylvania. (Reliance Bankruptcy News,
Issue No. 68; Bankruptcy Creditors' Service, Inc., 215/945-7000)


RESIDENTIAL ASSET: Moody's Reviewing Ratings & May Downgrade
------------------------------------------------------------
Moody's Investors Service has placed on watch for downgrade five
certificates, from Residential Asset Mortgage Products, Inc. Trust
asset-backed securitization deals from Series 2002-RS1, Series
2002-RS2 and Series 2002-RS3.  The transactions, consists of a
fixed rate pool and adjustable rate pool.

These pools are made up of mortgages that are not eligible for
inclusion in Residential Funding Corporation's (RFC) specific loan
program securitization because they do not satisfy the underlying
guidelines for those programs.  The mortgage loans were originated
by a variety of different sellers and serviced by HomeComings
Financial Network, Inc., a wholly owned subsidiary of RFC.

The most subordinate fixed rate and adjustable rate certificates
from the Series 2002-RS1 and 2002-RS2 and the most subordinate
adjustable rate certificates from Series 2002-RS3 deal have been
placed on watch for downgrade because existing credit enhancement
levels may be low given the current projected losses on the
underlying pools.  The transaction has taken losses and pipeline
loss could cause eventual erosion of the over collateralization.

The complete rating actions are:

   -- Issuer: Residential Asset Mortgage Products, Inc.

      Review for Downgrade:

      * Series 2002-RS1; Class M-I-3, current rating Baa2, under
        review for possible downgrade

      * Series 2002-RS1: Class M-II-3, current rating Baa2, under
        review for possible downgrade

      * Series 2002-RS2; Class M-I-3, current rating Ba2, under
        review for possible downgrade

      * Series 2002-RS2: Class M-II-3, current rating Ba3, under
        review for possible downgrade

      * Series 2002-RS3: Class M-II-3, current rating Baa2, under
        review for possible downgrade


RITE AID: Prices 2.3 Mil. Mandatory Convertible Preferred Shares
----------------------------------------------------------------
Rite Aid Corporation (NYSE, PCX:RAD) has priced its previously
announced offering of 2.3 million shares of mandatory convertible
preferred stock.  The HiMEDS(SM) will be issued pursuant to an
effective shelf registration statement previously filed with the
Securities and Exchange Commission.  In connection with the
offering, Rite Aid has granted the underwriters an over-allotment
option to purchase up to an additional 200,000 shares of
HiMEDS(SM).

Shares of HiMEDS(SM) have an annual dividend yield of 7.0% and a
threshold appreciation price of $5.36, which is 50% above the
closing price of the common stock on January 25, 2005.  Each share
of HiMEDS(SM) will automatically convert on February 1, 2008,
subject to certain adjustments, into no fewer than 9.3371 shares
of Rite Aid's common stock, depending on the then-prevailing
market price of Rite Aid's common stock.  At any time prior to
February 1, 2008, the HiMEDS(SM) may be converted at the option of
the holders or, under certain circumstances, by Rite Aid.

Net proceeds from the offering will total approximately
$110.3 million.  Rite Aid intends to use the net proceeds from the
offering to redeem, at a purchase price of 105% plus any accrued
dividends, at least $103 million aggregate liquidation preference
(1,030,000 shares) of its Series D Cumulative Convertible Pay-in-
Kind Preferred Stock.  Any remaining additional net proceeds will
be used for working capital and general corporate purposes.

The offering is being lead managed by J.P.Morgan and Citigroup
will act as a co-manager.  Copies of the prospectus and prospectus
supplement related to the public offering may be obtained from:

         J.P. Morgan Securities Inc.
         Prospectus Department
         One Chase Manhattan Plaza
         New York, N.Y. 10081
         Telephone Number: 212-552-5164

                        About the Company

Rite Aid Corporation is one of the nation's leading drugstore
chains with annual revenues of $16.6 billion and approximately
3,400 stores in 28 states and the District of Columbia.

                          *     *     *

As reported in the Troubled Company Reporter on Jan 7, 2005
Fitch Ratings assigned a 'B' rating to Rite Aid Corporation's 7.5%
$200 million senior secured notes due 2015.  The proceeds from the
issue will be used to repay the $170.5 million 7.625% senior
unsecured notes due April 2005 and the $38.1 million 6% senior
notes due December 2005.  These notes rank pari passu with the
company's outstanding secured notes.  Fitch rates Rite Aid:

   -- $1.7 billion senior unsecured notes 'B-';
   -- $800 million senior secured notes 'B';
   -- $1.4 billion bank facility 'B+.'

The Rating Outlook is Stable.


ROGERS & SON CONSTRUCTION: Case Summary & 22 Unsecured Creditors
----------------------------------------------------------------
Debtor: Rogers & Son Construction, Inc.
        204 Shady Lane
        Summerville, South Carolina 29485

Bankruptcy Case No.: 05-00901

Type of Business: The Debtor provides construction services.

Chapter 11 Petition Date: January 26, 2005

Court: District of South Carolina (Charleston)

Judge: Wm. Thurmond Bishop

Debtor's Counsel: Charles S. Bernstein, Esq.
                  Bernstein & Bernstein, P.A.
                  5418-B Rivers Avenue
                  North Charleston, SC 29406
                  Tel: 843-529-1111
                  Fax: 843-529-0035

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 22 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Sanders Bros Const Co.        Trade debt                $435,492
P.O. Box 60969
North Charleston, SC 29419

Martin Marietta Aggr.         Trade debt                $422,020
P O Box 75328
Charlotte, NC 28275

Prime Rate Premium Finance    Insurance                 $309,330
P O Box 100507
Florence, SC 29501

National Waterworks Inc.      Trade debt                $298,934
P O Box 100467
Atlanta, GA 30384

Briggs Equipment- Rental ACC  Equipment rental          $214,843

Hanson Pipe & Products Inc.   Trade debt                $197,738

Kuhn Equipment Sales Company  Equipment rental          $173,233

Hughes Supply Inc.            Trade debt                $168,150

Blanchard Machinery Co.       Equipment rental          $159,708

Wando Concrete LLC            Trade debt                $142,526

C.F.P. Inc.                   Trade debt                $119,440

Thompson Pump                 Trade debt                $115,020

McDirt                        Trade debt                $100,944

W.F. Whitfield                Loan                      $100,000

T&T Contracting and Hauling   Trade debt                 $97,512

W. Frazier Construction       Trade debt                 $94,319

Youmans Gas & Oil Co.         Trade debt                 $66,703

Ferguson Ent. Inc. #23        Trade debt                 $58,741

L B Smith Inc.                Trade debt                 $50,000

Low Country Concrete & Mat    Trade debt                 $47,085

Internal Revenue Service      Taxes                      Unknown

SC Dept. of Revenue           Taxes                      Unknown


RSI HOLDINGS: Capital Deficits Trigger Going Concern Doubt
----------------------------------------------------------
RSI Holdings, Inc., during the three months ended Nov. 30, 2004,
incurred a loss of $27,401.  At November 30, 2004, the Company's
liabilities exceeded its assets by $359,080 and it had a working
capital deficit of $236,904.  These conditions raise substantial
doubt about the Company's ability to continue as a going concern.

In the Offer to Purchase filed with the SEC by the Mickel siblings
-- Buck A. Mickel, President and Chief Executive Officer and a
Director of the Company; Charles C. Mickel, Vice President and
Director of the Company,; and Minor H. Mickel --.  The Mickel
siblings indicated that they do not intend to continue to support
the Company financially, including advancing any future funds or
extending their deferral of interest payments beyond July 2005,
unless the Company becomes a private company through a
going-private transaction.  The Mickel siblings expect the Company
to become a private company before July 2005; however, if the
Company does not become a private company and the Mickel siblings
demand payment of the unpaid accrued interest the Company would in
all likelihood not be able to pay the previously deferred interest
and be able to continue operations.

Management of the Company believes that it is highly likely that
the Company will be a private company prior to July 2005 and that
the Mickel siblings will not demand payment with respect to the
Company notes they hold.  There are no assurances that the Company
will be a private company prior to July 2005 or that the Mickel
siblings will not demand payment with respect to the Company notes
they hold.

At November 30, 2004, the Company's total liabilities exceeded its
assets by $359,080 as compared to $331,679 at August 31, 2004.
Buck A. Mickel, Charles C. Mickel and Minor M. Shaw (and, before
March 25, 2004, Minor H. Mickel), the creditors of notes payable
aggregating $1,200,000, have permitted the deferral of payment of
interest since the notes' issuance. Buck A. Mickel is the
President and Chief Executive Officer and a Director of the
Company.  Charles C. Mickel is a Vice President and Director of
the Company. Buck A. Mickel, Charles C. Mickel and Minor M.
Shaw are siblings.  Since November 2003, these creditors also have
permitted the deferral of payment of interest under the other
notes payable held by them in the aggregate principal amount of
$310,000.

Subject to the continued deferral of payment of interest on the
$1,510,000 in aggregate principal amount of notes payable to the
Mickel siblings, the Company expects that its existing cash
balances and cash generated by the operations of Employment
Solutions will be sufficient to fund its cash requirements during
the next twelve months.

RSI Holdings Inc., operates through its wholly owned subsidiary,
Employment Solutions, and is in the business of locating and
providing labor to industrial companies from its facility in
Greenwood, South Carolina.  The Company makes arrangements with
its client companies to provide the client companies with manual
labor.  The Company's client companies request workers according
to their needs and the Company fills the vacancies from a pool of
available labor.  The client companies pay the Company for the
hours worked at a negotiated hourly rate and the Company is
responsible for paying the workers for the hours worked plus the
related payroll taxes, insurance and other payroll costs. The
workers work at the client company's job site under the direction
of the client company's personnel.


RYERSON TULL: Declares Cash Dividends & Sets Annual Meeting
-----------------------------------------------------------
The Board of Directors of Ryerson Tull, Inc., (NYSE: RT) declared
cash dividends of 5 cents per share on the company's common stock
and 60 cents per share on its Series A $2.40 Cumulative
Convertible Preferred Stock.  The dividends will be payable
May 1, 2005, to stockholders of record at the close of business on
April 7, 2005.

The Board of Directors of Ryerson Tull, Inc. (NYSE: RT) has set
Wednesday, Apr. 20, 2005, as the date for its annual meeting of
stockholders.  The meeting will be at 9:00 a.m. Central Time, at
the Northern Trust Company, 50 South LaSalle Street, Chicago,
Illinois.  The brief agenda will be limited to review of the proxy
voting items.  Stockholders of record at the close of business on
March 2, 2005, will be entitled to receive notice of, and vote at,
the annual meeting of stockholders.

                        About the Company

Ryerson Tull, Inc., is North America's leading distributor and
processor of metals, with 2003 revenues of $2.1 billion.  The
company services customers through a network of service centers
across the United States and in Canada, Mexico and India.

                         *     *     *

As reported in the Troubled Company Reporter on Dec. 1, 2004,
Moody's Investors Service lowered its ratings for Ryerson Tull,
Inc. (senior implied to B1) and assigned a B2 rating to the
company's proposed $150 million of senior unsecured notes due
2011.  The company has a stable rating outlook.  This concludes
Moody's review of Ryerson, which was placed under review for
possible downgrade on November 1, 2004, following the company's
announcement of its agreement to acquire Integris Metals, Inc.
from Alcoa and BHP Billiton for approximately $660 million.

These ratings were lowered:

   * Senior implied rating, to B1 from Ba3

   * Senior unsecured issuer rating, to B2 from B1

   * $100 million of 9.125% senior unsecured notes due 2006, to B2
     from B1

Also, Moody's assigned a B2 rating to Ryerson's proposed
$150 million of senior unsecured notes due 2011.  Moody's has not
rated Ryerson's 3.5% convertible senior notes due 2024 or its new
senior secured revolving credit facility.


SECOND CHANCE: BDO Seidman Approved as Financial Consultants
------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Michigan
gave Second Chance Body Armor, Inc., permission to employ BDO
Seidman, LLP as its accountants and business and financial
consultants.

BDO Seidman will:

   a. prepare operating and cash flow statements and forecasts,
      which the Debtor may file in its chapter 11 case and assist
      the Debtor in the management of its cash receipts and
      disbursements;

   b. review and analyze equity interests and claims filed against
      the Debtor;

   c. assist the Debtor in various operational improvement
      initiatives and in preparing and negotiating a plan of
      reorganization with a likelihood of confirmation;

   d. attend meetings and conferences with the Debtor, the
      Creditors' Committee, other creditors, equity interest
      holders, the U.S. Trustee and their respective counsels;

   e. provide testimony for the Debtor in its chapter 11 case and
      in related proceedings; and

   f. assist the Debtor in any other matters as may be appropriate
      and necessary in its chapter 11 case.

William K. Lenhart, a Partner at BDO Seidman, discloses that the
Firm received a $220,000 retainer.

Mr. Lenhart reports BDO Seidman's professionals bill:

    Designation         Hourly Rate
    -----------         -----------
    Partners            $355 - $700
    Senior Managers     $230 - $510
    Managers            $210 - $345
    Senior Staff        $150 - $255
    Staff                $95 - $195

BDO Seidman assures the Court that it does not represent any
interest adverse to the Debtor or its estate.

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


SEMCO ENERGY: Moody's Revises Outlook on Low-B Ratings to Stable
----------------------------------------------------------------
Moody's Investors Service changed the rating outlooks on SEMCO
Energy, Inc.'s and its supported debt (Ba2 senior unsecured) from
negative to stable.  The change follows SEMCO's announcement that
it had settled a dispute with Atlas Pipeline Partners, L.P. for a
cash payment of $5.5 million, a much smaller amount than the
$94 million in damages Atlas had sought.  The stabilization of
SEMCO's rating outlook reflects the elimination of this large
contingent liability with no material impact to its credit profile
or liquidity.

The stable outlook also acknowledges SEMCO's efforts to improve
its credit quality by reducing debt (6% reduction in long-term
debt during 2004) and suspending its common dividend.  The company
has reduced its business risk by eliminating its unprofitable
construction business and narrowing its strategic focus to its
stable regulated gas distribution business.  The conclusion of its
two-year divestiture program should also help to make its
financial performance more predictable going forward.  Moody's
incorporates in the stable outlook benign outcomes in its pending
Michigan and Battle Creek rate filings, the chief event risks on
the horizon.  The stable outlook also is based on the expectation
that SEMCO will maintain adequate liquidity, including continued
compliance with its bank covenants (in particular, with the
minimum interest coverage test which has the least cushion),
renewing its $114 million of credit facilities that terminate in
June 2005.

Nevertheless, with its senior unsecured debt rated Ba2, SEMCO is
the lowest rated local gas distribution company within Moody's
peer group, reflecting its very high leverage (as of
Sept. 30, 2004), 75% adjusted to include leases and convertible
preference stock as debt), poor profitability, a string of losses,
and weak coverages (as of 9/04, FFO/fixed charges of under 2x,
retained cash flow/debt including the convertible preference stock
as debt of 7%).  SEMCO did demonstrate a capacity to generate
positive post-capex free cash flow in 2004 (roughly $20 million,
excluding asset sale proceeds).  However, an upgrade is unlikely
in the foreseeable future.  Given SEMCO's substantial debt load,
it will take some years of debt reduction before the company
achieves meaningful credit accretion from purely organic means.
Credit metrics that would cause us to consider an upgrade include:
a sustained return to profitability and more substantial earnings,
retained cash flow/debt exceeding 10%, FFO/fixed charges of about
3x, and adjusted leverage in the 60% range.

The stabilizing factors for SEMCO's credit make a rating downgrade
unlikely in the foreseeable near future.  However, a downgrade is
possible if the mentioned expectations underlying our stable
outlook do not hold, or if SEMCO becomes more aggressively
capitalized as a result of, among other factors, M&A activity or a
change in ownership (an affiliate of K-1 Ventures Limited, a
private equity firm, currently owns preference stock that is
convertible to common stocks equal to about a fifth of SEMCO's
outstanding common stock after giving effect to the conversion).

SEMCO Energy, Inc., is a natural gas distribution company,
headquartered in Port Huron, Michigan.


SOLUTIA INC: Wants to Assume Huntsman Agreements
------------------------------------------------
Solutia, Inc., and debtor-affiliates seek the authority of the
U.S. Bankruptcy Court for the Southern District of New York to
assume certain Propylene and Cyclohexane Supply Agreements, as
amended, with Huntsman Petrochemical Corporation.  The agreements
will provide for a continuing supply of raw materials at certain
of the Debtors' facilities in Texas and Florida related to its
nylon business.

Solutia, Inc., utilizes a variety of raw components in its nylon
manufacturing business including propylene and cyclohexane.  With
respect to its nylon manufacturing operations in Texas, Solutia
and its predecessor-in-interest, Monsanto Company, entered into
agreements with Huntsman to provide it with propylene and
cyclohexane delivered to specified locations in Texas and Florida.
Huntsman is a large chemical supplier that produces, among other
things, over 2 billion pounds of propylene and maintains the
capacity to produce 90 million gallons of cyclohexane annually.
Solutia also has other contractual relationships with Huntsman
including other supply agreements and operating agreements
pursuant to which Huntsman is a guest operator at certain of
Solutia's manufacturing sites.

                        Propylene Agreement

Pursuant to the Chemical Grade Propylene Sales and Purchase
Agreement dated July 1, 1994, as amended on October 8, 1999,
Huntsman will deliver 260 to 300 million pounds of propylene
annually to Solutia.  The Propylene Agreement had an initial term
of three and one-half years and renewed automatically thereafter
unless either party gave 24 months' written notice of termination.
The Propylene Agreement also provided that Huntsman was to forward
its invoice at the end of each calendar month for all propylene
delivered during that month and then for credit terms of net 30
days from the date of invoice.

M. Natasha Labovitz, Esq., at Gibson, Dunn & Crutcher LLP, in New
York, relates that the parties operated under the Propylene
Agreement without incident until 2003.  Beginning in June 2003,
Huntsman was insecure of Solutia's declining financial condition.
Huntsman made demands for "adequate assurances" of economic
performance from Solutia with respect to both the Propylene
Agreement and Cyclohexane Supply Agreement.  Solutia disputed
Huntsman's claims or that Huntsman was entitled to adequate
assurance.  However, to ensure uninterrupted supply of these
critical raw materials and to avoid business disruption, Solutia
had no alternative but to agree with Huntsman that it would, as a
temporary and voluntary allowance, limit its purchases of
propylene on credit to $1.5 million, with orders in excess of that
voluntary credit limit to be paid "cash in advance."  This
voluntary limit on credit purchases maintained propylene supply,
but nevertheless impeded Solutia's cash flow and strained its
nylon business operations.

As of the bankruptcy petition date, Solutia owed Huntsman
$1,098,403 for delivered propylene.  Since then, Huntsman has
continued to sell, and Solutia has continued to purchase,
propylene under the Propylene Agreement and the voluntary credit
limit.

In February 2004, Solutia reduced its need for propylene due to
changing market conditions and its termination of a purchase and
sale agreement with DuPont, under which Solutia previously
supplied to DuPont much of the propylene purchased from Huntsman.
Despite the reduced need, at then current market conditions,
Solutia believed it could still sell any excess propylene
delivered by Huntsman at a small profit.  However, a return to
normal credit arrangements was more valuable to Solutia than the
resale of excess propylene.  For this and other reasons, Solutia
and Huntsman entered into negotiations to amend the Propylene
Agreement that would reduce the maximum and minimum quantities of
propylene to be delivered by Huntsman and revise the credit terms
for propylene sales to be more favorable to Solutia.  These
negotiations were tied to negotiations regarding similar issues
with respect to the Cyclohexane Agreement.

Ms. Labovitz relates that during the course of the negotiations, a
dispute arose among the parties regarding Huntsman's asserted
right to reduce the quantity of propylene delivered even in the
absence of a signed amendment.  For a time, negotiations regarding
that dispute reached an impasse and the parties anticipated
potential litigation, as well as an interruption in supply of the
full volume of propylene nominated by Solutia.  However, the
parties have now reached an agreement to modify and assume the
Propylene Agreement under Section 365 of the Bankruptcy Code,
thereby achieving many of Solutia's business objectives while
avoiding costly litigation and business disruption.

                        Propylene Amendment

The essential terms of the proposed amendment to the Propylene
Agreement are:

    a. The term will be extended from July 1, 1994, to
       December 31, 2007;

    b. The amount of propylene to be delivered under the contract
       will be decreased from between 260 to 300 million pounds
       annually to between 50 and 60 million pounds annually,
       effective as of April 1, 2004;

    c. Huntsman will not be obligated to deliver to Solutia during
       any calendar month a quantity of propylene in excess of
       1/11 of the annual maximum quantity of the agreement;

    d. The parties will waive all prepetition claims under the
       Propylene Agreement against the other, except for amounts
       that Solutia owes Huntsman for propylene invoices totaling
       $1,098,403 delivered to Solutia prior to December 17, 2003;

    e. Huntsman will remove the credit limit cap on propylene
       deliveries and return to payment terms of "net 30 days"
       from the date of Huntsman's invoice;

    f. The governing law for the Propylene Agreement will be
       changed from New York to Delaware; and

    g. Solutia will move to assume the Propylene Agreement as
       modified, with the Propylene Cure Amount due to be "paid"
       by effectuating an offset of mutual prepetition
       obligations.

                       Cyclohexane Agreement

Solutia and Huntsman are also parties to a Cyclohexane Supply
Agreement, dated November 27, 2000, and amended on June 17, 2002,
pursuant to which Huntsman agreed to sell to Solutia up to a
maximum of 42,000,000 gallons of cyclohexane annually, through an
initial term of December 31, 2004.  The Cyclohexane Agreement
contains an "evergreen clause," whereby the Agreement
automatically renews on a calendar year basis unless one party
delivers written notice of termination to the other party at least
one year in advance of the contemplated termination date.

As with the Propylene Agreement, beginning in June 2003, Huntsman
demanded adequate assurances of performance as to the Cyclohexane
Agreement.  As it did with respect to propylene, to avoid business
disruption, Solutia agreed to a series of prepetition voluntary
credit limits with Huntsman during this period.  Ultimately,
Solutia agreed to a $1.5 million maximum line of credit toward its
cyclohexane purchases from Huntsman, with "net 30-day" payment
terms for these purchases.

As of the Petition Date, Solutia owed Huntsman $1,700,810 for
cyclohexane delivered and invoiced.  Since the Petition Date,
Huntsman has continued to sell, and Solutia has continued to
purchase, cyclohexane under the Cyclohexane Agreement.

In connection with negotiations regarding the Propylene Agreement,
Solutia and Huntsman have been actively negotiating an amendment
to the Cyclohexane Agreement for many months.  Among other things,
Solutia's willingness to reduce its contractual right to propylene
supply was contingent on a return to more favorable credit terms
on cyclohexane purchases and an extension of the termination date
of the Cyclohexane Agreement.

On November 23, 2004, Huntsman filed a motion to terminate the
Cyclohexane Agreement.  Solutia did not oppose that motion, as it
essentially preserved Huntsman's right to terminate the
Cyclohexane Agreement on December 31, 2005, pursuant to the
"evergreen clause."  The Court granted Huntsman's request on
December 7, 2004.

According to Ms. Labovitz, Solutia and Huntsman have now resolved
their differences and reached agreement as to a proposed second
amendment to the Cyclohexane Agreement, which provides for the
modification and assumption of the Cyclohexane Agreement under
Section 365.  The termination date of December 31, 2005, remains
and the parties still intend to negotiate a new contract beyond
that period based on different terms and conditions.  However, for
the remainder of the term of the existing Cyclohexane Agreement,
and pending these negotiations, the parties have reached important
agreements as to credit and other terms.

                       Cyclohexane Amendment

The essential terms of the proposed amendment to the Cyclohexane
Agreement are:

    a. Huntsman will extend Solutia's credit limit to $9 million
       on cyclohexane purchases;

    b. Payment terms will effectively be "net 30 days" from the
       date of shipment;

    c. Both Huntsman and Solutia will waive all claims under the
       Cyclohexane Agreement arising before December 17, 2003,
       except for amounts owed Huntsman by Solutia for cyclohexane
       invoices totaling $1,700,810 delivered to Solutia prior to
       that date;

    d. The credit language in the Cyclohexane Agreement, which
       previously gave Huntsman the right to require cash payment
       or satisfactory security if in its judgment Solutia's
       financial condition became "less than creditworthy," will
       be deleted;

    e. Solutia will move to assume the Cyclohexane Agreement as
       modified, with the Cyclohexane Cure Amount due to be "paid"
       by effectuating an offset of mutual prepetition
       obligations; and

    f. Although the current notice of termination of the
       Cyclohexane Agreement remains in effect, the parties are
       continuing to negotiate an extension of the Cyclohexane
       Agreement beyond December 31, 2005, when it is set to
       expire.

Ms. Labovitz points out that Solutia and Huntsman have reaffirmed
their solid working relationship and Solutia is assured of
continuity in two of its most important chemical supply contracts,
with the Propylene Agreement effective through 2007 and the
Cyclohexane Agreement in place currently through 2005.  With the
modified agreements in place and with the parties on good terms,
Solutia can focus on negotiating an extension to the Cyclohexane
Agreement with Huntsman without fear that its supply of propylene
and cyclohexane will be disrupted in the meantime, with favorable
credit terms in place and without the hindrances associated with
simultaneous negotiations of multiple agreements.

Solutia's liquidity also improves dramatically with the modified
agreements, Ms. Labovitz says.  Previously, tight credit limits of
$1.5 million each for propylene and cyclohexane purchases were
imposed on Solutia.  These limitations negatively impacted
Solutia's nylon business operations and limited Solutia's
available cash on hand.  With the previous credit limitations
eliminated, Solutia now has "net 30 day" terms on propylene and an
increase in its credit limit for cyclohexane purchases to
$9 million with effectively net 30-day terms.  As a result,
Solutia has been infused with a $10 million increase in liquidity
because of the modified agreements -- liquidity that Solutia
previously did not have because it was reserved for propylene and
cyclohexane purchases under the previous reduced credit limits.

                              Set-off

As of the Petition Date, among their many contractual
relationships, Solutia and Huntsman were parties to three guest
Operating Agreements concerning Huntsman's operations at Solutia's
John F. Queeny, Chocolate Bayou, and Pensacola facilities.
Pursuant to the Operating Agreements, Solutia provides among other
things services and utilities to Huntsman in connection with
Huntsman's operations at those facilities in exchange for a fee
payable by Huntsman to Solutia.  The parties dispute certain
invoices issued under the Operating Agreements, and certain issues
and disputes remain to be resolved as to those invoices.  However,
the parties have agreed that prepetition invoices from Solutia to
Huntsman totaling at least $4,223,940 are undisputed.

As a result of prepetition amounts owed to Huntsman by Solutia
under the Propylene, Cyclohexane and other existing contracts,
Huntsman has reserved the right to assert a set-off against the
Undisputed Operating Agreement Funds.  Solutia now seeks to use
the Undisputed Operating Agreement Funds as a non-cash source of
payment of the Propylene Cure Amount and the Cyclohexane Cure
Amount, by effectuating a set-off of the parties' mutual
prepetition obligations.

The cure payments will be accomplished through offset:

               Amounts Solutia owes Huntsman for
                    prepetition deliveries

           Propylene Cure Amount        $1,098,403
           Cyclohexane Cure Amount       1,700,810
                                        ----------
           Total                        $2,799,213

This amount will be applied against the invoices relating to
services provided by Solutia to Huntsman in connection with the
Operating Agreements:

               Amounts Huntsman owes Solutia under
                   the Operating Agreements

    Nov. 2003 JFQ Operating Agreement Invoice:        $237,037
    Nov. 2003 Bayou Operating Agreement Invoice:     1,745,242
    Nov. 2003 Pensacola Operating Agreement Invoice:   561,661
    Dec. 2003 Partial Pre-Filing Amount Pensacola:     255,273
                                                    ----------
    Total                                           $2,799,213

Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications.  The Company
filed for chapter 11 protection on December 17, 2003 (Bankr.
S.D.N.Y. Case No. 03-17949).  When the Debtors filed for
protection from their creditors, they listed $2,854,000,000 in
assets and $3,223,000,000 in debts.  (Solutia Bankruptcy News,
Issue No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000)


STELCO INC: Steelworkers Director Wants Members' Pensions Secured
-----------------------------------------------------------------
As reported in the Troubled Company Reporter on Jan. 17, 2005,
United Steelworkers National Director Ken Neumann has challenged
Stelco CEO Courtney Pratt to either admit that filing for
bankruptcy protection was a sham or else disassociate the company
from the Deutsche Bank Proposal, which does not address pension
plan deficiencies.

The challenge comes in response to statements made by Mr. Pratt in
December that pension plan deficiencies are not part of the
restructuring under the Companies Creditors Arrangement Act
-- CCAA.

Mr. Neumann said that inaccuracies in a letter from Stelco CEO
Courtney Pratt "would best be described as farcical if they did
not involve an issue of such extraordinary importance to the lives
of thousands of Canadians."

In a follow-up letter to Mr. Pratt, Mr. Neumann challenged the
Stelco boss's memory after reading his assertion that the
company's sole concern in the area of pensions was the going-
concern pension costs.

"Do you deny that Hap Stephen and William Vaughn identified the
wind-up deficiency as liabilities, which rendered Stelco
insolvent?" Mr. Neumann asked, pointing out specifics of a
Jan. 29, 2003, affidavit of Mr. Vaughn filed in support of
Stelco's request for the initial court order.  In it, Mr. Vaughn
said he expected that the Stelco restructuring would include "the
restructuring of the pension plans and post-employment and other
benefit obligations. . . ."

Mr. Neumann repeated the question he asked in the first letter to
Mr. Pratt, whether given his statement that the restructuring
process will not address the pension deficiency, he also takes the
position that Stelco will remain insolvent upon its exit from
protection under the Companies Creditors Arrangement Act.

He challenged Mr. Pratt's earlier statement that "the company has
acknowledged throughout this process that the solvency deficiency
is a significant concern to be addressed over time. . . ."

"As I previously stated, the Deutsche Bank deal which you and the
rest of Stelco's entrenched management support, does absolutely
nothing to address the wind-up deficiency of the pension, said Mr.
Neumann.  "Perhaps you could point out how that deal addresses the
solvency deficiency "over time".

"Is it through highly leveraging the Company, rendering it hostage
to lenders with no concern for its future? Perhaps it is by
selling off profitable subsidiaries at fire-sale prices?  Or, is
it through seeking concessions at those subsidiaries and claiming
otherwise?  Or, maybe it is by leaving in place the entrenched
management team that put the company into the trouble it is in?"

Mr. Neumann reminded Mr. Pratt that Stelco's pensioners have been
forced, against their will, to lend the company hundreds of
millions of dollars.

"Let me assure you that the United Steelworkers will never rest
until those pensions are secure.  After a lifetime of difficult
and dangerous service, Stelco's pensioners certainly deserve no
less."

                           About Stelco

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


STEVENOT WINERY: Wants to Hire Wilke Fleury as Bankruptcy Counsel
-----------------------------------------------------------------
Stevenot Winery and Imports, Inc., asks the U.S. Bankruptcy Court
for the Eastern District of California for permission to employ
Wilke, Fleury, Hoffelt, Gould & Birney, LLP, as its counsel in
this bankruptcy proceeding.

Wilke Fleury is expected to:

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

     b) prepare all necessary applications, answers, orders,
        reports and other legal papers, including the plan of
        reorganization and disclosure statement;

     c) represent the Debtor in all necessary litigation,
        including, but not limited to, collection of accounts
        receivable and preferential transfers; and

     d) perform all other legal services for the Debtor.

The Firm will bill the Debtor based on its professionals' current
hourly rates:

             Professional             Rate
             ------------             ----
             Alan G. Perkins          $285
             Daniel L. Egan           $280
             Megan A. Lewis           $160
             Erin Weber               $160

Megan A. Lewis, Esq., a member at Wilke Fleury, discloses that her
Firm received a $49,990 retainer from the Debtor.

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

Headquartered in Murphys, California, Stevenot Winery and Imports,
Inc. -- http://www.stevenotwinery.com/-- operates a winery.  The
Company filed for chapter 11 protection on Jan. 24, 2005 (Bankr.
E.D. Calif. Case No. 05-90138).  Daniel L. Egan, Esq., at Wilke,
Fleury, Hoffelt, Gould & Birney, LLP represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed total assets of $7,663,000 and debts of
$6,425,281.


TATER TIME: Taps Southwell & O'Rourke as Bankruptcy Counsel
-----------------------------------------------------------
Tater Time Potato Company, LLC, and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Eastern District of Washington for
permission to employ Southwell & O'Rourke, P.S., as its general
bankruptcy counsel.

Southwell & O'Rourke is expected to:

   a) advise the Debtors with regards to their powers and duties
      as debtors-in-possession in the continued operation of their
      businesses;

   b) assist the Debtors in formulating a proposed disclosure
      statement and plan of reorganization and represent the
      Debtors in obtaining approval of the disclosure statement
      and confirmation of the plan; and

   c) provide all other legal services to the Debtors that are
      necessary and appropriate in their chapter 11 cases.

Dan O'Rourke, Esq., and Kevin O'Rourke, Esq., are the lead
attorneys for the Debtors.  Mr. Dan O'Rourke discloses that
Southwell & O'Rourke received a $7,500 retainer.

For their professional services, Mr. Dan O'Rourke will bill the
Debtors $275 per hour, while Mr. Kevin O'Rourke will charge at
$185 per hour.

Southwell & O'Rourke assures the Court that it does not represent
any interest adverse to the Debtors or their estates.

Headquartered in Warden, Washington, Tater Time Potato Company,
LLC, packs and ships potatoes.  The Company and its debtor-
affiliates filed for chapter 11 protection on January 24, 2005
(Bankr. E.D. Wash. Case No. 05-00509).  When the Debtor filed for
protection from its creditors, it reported total assets of
$11,312,000 and total debts of $7,639,184.


TATER TIME: Section 341(a) Meeting Slated for March 22
------------------------------------------------------
The U.S. Trustee for Region 18 will convene a meeting of Tater
Time Potato Company, LLC and its debtor-affiliate's creditors at
10:30 a.m., on March 22, 2005, at 1475 Nelson Road NE, Bldg. B
Room 4, Moses Lake, Washington.  This is the first meeting of
creditors required under U.S.C. Sec. 341(a) in all bankruptcy
cases.

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

Headquartered in Warden, Washington, Tater Time Potato Company,
LLC, packs and ships potatoes.  The Company and its
debtor-affiliates filed for chapter 11 protection on
January 24, 2005 (Bankr. E.D. Wash. Case No. 05-00509).  Dan
O'Rourke, Esq., at Southwell & O'Rourke, P.S., represents the
Debtors in their restructuring efforts.  When the Debtor filed for
protection from its creditors, it reported total assets of
$11,312,000 and total debts of $7,639,184.


TECO AFFILIATES: File Chapter 11 Petitions in D. Arizona
--------------------------------------------------------
Teco Energy, Inc.'s indirect subsidiaries -- Panda Gila River,
L.P., Union Power Partners, L.P., Trans-Union Pipeline, L.P., and
UPP Finance Co., LLC -- filed voluntary chapter 11 petitions with
the United States Bankruptcy Court for the District of Arizona,
Phoenix Division, on Jan. 26, 2005, due to their inability to pay
existing debts.

The Debtors are currently in negotiations with Citibank, N.A., and
certain other bank lenders for a $200 million debtor-in-possession
credit facility.  The Debtors believe that the DIP financing will
permit them to maintain stability in its ordinary course of
business throughout the bankruptcy process and to engage in
meaningful hedging activities.

Along with its first day motions, the Debtors also filed their
prepackaged Joint Plan of Reorganization and the disclosure
statement explaining the Plan.

Under the Master Settlement Agreement contained in the Plan, the
bank lenders and Teco agree, subject to bankruptcy court approval
of the Disclosure Statement, to vote their respective claims in
favor of the Plan.  On Jan. 24, 2005, the bank lenders holding:

     (i) 90% in number of the obligations under the credit
         agreements; and

    (ii) 90% of the aggregate principal amount of such
         obligations,

executed and delivered the Master Settlement Agreement.
Accordingly, the Debtors believe that confirmation of the Plan has
substantial support from an overwhelming majority of their
creditors.

The Debtors said they need to emerge from bankruptcy well before
the significant increase in demand for power in the summer months,
in order to maximize more revenues.

Panda Gila River, L.P., Union Power Partners, L.P., Trans-Union
Pipeline, L.P., and UPP Finance Co., LLC --
http://www.tecoenergy.com/-- own and operate the two largest
combined-cycle natural gas generation facilities in the United
States.  The Debtors filed for bankruptcy protection on Jan. 26,
2005 (Bank. D. Ariz. Case No. 05-01143, and 05-01149 through
05-01151).  Craig D. Hansen, Esq., Thomas J. Salerno, Esq., and
Sean T. Cork, Esq., at Squire, Sanders & Dempsey L.L.P., represent
the Debtors in their restructuring efforts.  When the Debtors
filed for protection from their creditors, they listed
$2,196,000,000 in total assets and $2,268,800,000 in total debts.


TECO AFFILIATES: Case Summary & 36 Largest Unsecured Creditors
--------------------------------------------------------------
Lead Debtor: Panda Gila River, L.P.
             702 North Franklin Street
             Tampa, Florida 33602

Bankruptcy Case No.: 05-01143

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      Union Power Partners, L.P.                 05-01149
      Trans-Union Interstate Pipeline, L.P.      05-01150
      UPP Finance Company, LLC                   05-01151

Type of Business: The Debtors are indirect subsidiaries of TECO
                  Energy, Inc.  The Debtors own and operate the
                  two largest combined-cycle natural gas
                  generation facilities in the United States.
                  Panda Gila River, L.P., owns and operates a
                  facility located in Gila Bend, Arizona, which
                  has 2,146 megawatts of generating capacity.
                  Union Power Partners, L.P., owns and operates
                  a facility located in El Dorado, Arkansas, which
                  has 2,152 megawatts of generating capacity.
                  See http://www.tecoenergy.com/

Chapter 11 Petition Date: January 26, 2005

Court:  District of Arizona (Phoenix)

Judge:  Charles G. Case II

Debtors' Counsel: Craig D. Hansen, Esq.
                  Thomas J. Salerno, Esq.
                  Sean T. Cork, Esq.
                  Squire, Sanders & Dempsey L.L.P.
                  40 North Central, Suite 2700
                  Phoenix, Arizona 85004
                  Tel: (602) 528-4085
                  Fax: (602) 253-8129

Special
Corporate
Counsel:          Dewey Ballantine LLP

Claims, Noticing
and Solicitation
Agent:            Kurtzman Carson Consultants LLC

Financial
Advisor:          Houlihan Lokey Howard & Zukin
                  Financial Advisors, Inc.

Financial Condition as of September 30, 2004:

      Total Assets: $2,196,000,000

      Total Debts:  $2,268,800,000

Consolidated List of the Debtors' 36 Largest Unsecured Creditors:

    Entity                       Nature of Claim    Claim Amount
    ------                       ---------------    ------------
TECO Energy, Inc.                Bank Loan          $190,000,000
702 North Franklin Street
Tampa, Florida 33602

General Electric                 Potential           $48,000,000
International, Inc.              Rejection Claim
Attn: Mike Kalmes
Atlanta, Georgia 30339

Franklin Mutual Series           Bank Loan           $24,673,621
51 JFK Parkway
Short Hills, New Jersey 07078

Quadrangle Master Funding Ltd.   Bank Loan           $21,544,250
375 Park Avenue, 14th Floor
New York, New York 10152

Citibank GRB                     Bank Loan           $19,971,476
Citigroup
388 Greenwich Street
New York, New York 10013

Societe Generale                 Bank Loan           $19,830,675
1221 Avenue of the Americas
New York, New York 10020

Aretex/Ichan Associates          Bank Loan          $18,9029,331
Corporation                                                [sic]
767 Fifth Avenue, 47th Floor
New York, New York 10153

Cargill, Incorporated            Bank Loan           $17,584,205
Cargill Financial Services
International
12700 Whitewater Drive
Minnetonka, Minnesota 55343

Norddeutsche Landedbank          Bank Loan           $16,268,196
Girozentrale
1114 Avenue of the Americas
37th Floor
New York, New York 10036

Royal Bank of Canada             Bank Loan           $16,186,088
1 Liberty Plaza
165 Broadway, 5th Floor
New York, New York 10178

Royal Bank of Scotland           Bank Loan           $15,496,522
101 Park Avenue
New York, New York 10178

Barclays Bank PLC                Bank Loan           $14,526,273
200 Park Avenue
New York, New York 10166

Bayerische Hypo-Und              Bank Loan           $14,526,273
Vereinsbank AG
Hypovereinsbank
150 East 42nd Street
New York, New York 10017

BNP Paribas                      Bank Loan           $14,526,273
787 Seventh Avenue
New York, New York 10019

Dexia Bank                       Bank Loan           $14,526,273
445 Park Avenue
New York, New York 10022

ScotiaBanc Inc.                  Bank Loan           $14,526,273
One Liberty Plaza
New York, New York 10020

Toronto Dominion (Texas) Inc.    Bank Loan           $14,526,273
31 West 52nd Street
New York, New York 10019

CoBank, ACB                      Bank Loan           $13,834,546
5500 South Quebec Street
Greenwood Village, Colorado 80111

Merrill Lynch, Pierce            Bank Loan           $13,657,211
Fenner & Smith Inc.
4 World Financial Center
New York, New York 10080

Stonehill Capital                Bank Loan           $13,018,527
Management LLC
885 Third Avenue, 30th Floor
New York, New York 10022

Satellite Senior Income          Bank Loan           $11,893,867
Fund, LLC
623 Fifth Avenue, 20th Floor
New York, New York 10022

Bank of Montreal                 Bank Loan            $9,799,470
700 Louisiana Street
Houston, Texas 77002

CDC Finance - DCD IXIS           Bank Loan            $9,799,470
254 Boulevard Saint Germain
Paris, France 75007-0000

DZ Bank Deutsche                 Bank Loan            $9,799,470
Genossenschaftsbank AG
609 Fifth Avenue
New York, New York 10017

KBC Bank N.V.                    Bank Loan            $9,799,470
125 West 55th Street
New York, New York 10019

Credit Suisse First Boston       Bank Loan            $8,314,757
11 Madison Avenue
New York, New York 10010

Credit Lyonnais (Calyon)         Bank Loan            $8,070,152
1301 Avenue of the Americas
New York, New York 10019

HSH Nordbank AG                  Bank Loan            $8,070,152
Martensdamm 6
Kiel, Germany 24103-0000

Natexis Banque Populaires        Bank Loan            $8,070,152
1251 Avenue of the Americas
New York, New York 10020

Bear, Stearns & Company, Inc.    Bank Loan            $6,719,248
383 Madison Avenue
New York, New York 10179

ING (US) Capital LLC             Bank Loan            $4,611,515
1325 Avenue of the Americas
New York, New York 10020

Landesbank Rheinland-Pfalz       Bank Loan            $4,611,515
Girozentrale
Department 3-121
Grosse Bleiche 54-56
Mainz, Germany D-55098

Citigroup Financial              Bank Loan            $2,766,909
Products Inc.
390 Greenwich Street, 1st Floor
New York, New York 10013

Lehman Brothers                  Bank Loan            $2,443,005
745 7th Avenue
New York, New York 10019

JPMorgan Chase Bank              Bank Loan            $2,182,111
270 Park Avenue, 17th Floor
New York, New York 10017

Aquila Energy Marketing          Litigation           $1,500,000
Corporation                      Claim
Attn: Contract Administration
1100 Walnut Suite 3300
Kansas City, Missouri 64106


TECO ENERGY: To Host Fourth Quarter Webcast on Feb. 1
-----------------------------------------------------
TECO Energy (NYSE: TE) will host a webcast concurrent with a
conference call with the financial community on Tuesday,
Feb. 1, 2005 at 9:00 AM EST.

Chairman and CEO Sherrill Hudson, President and COO John Ramil,
and Executive Vice President and CFO Gordon L. Gillette will
discuss the company's fourth quarter results and its 2005 outlook.

The company's fourth quarter and year-to-date results, including
unaudited income statement, balance sheet and statement of cash
flow, will be released Feb. 1, 2005, prior to the call and before
the market opens.

Investors, shareholders, media and the public can access the
webcast through a link on TECO Energy's Web site at:
http://www.tecoenergy.com/

The audio portion of the webcast and the accompanying slides will
be available for replay through a link on the Web site starting
two hours after the conclusion of the live event; the replay will
be archived on the website for 30 days.

Additional information regarding TECO Energy is available at the
Investor Relations section of TECO Energy's Web site at
http://www.tecoenergy.com/

                        About the Company

TECO Energy, Inc. (NYSE: TE) is an integrated energy-related
holding company with core businesses in the utility sector,
complemented by a family of unregulated businesses.  Its principal
subsidiary, Tampa Electric Company, is a regulated utility with
both electric and gas divisions (Tampa Electric and Peoples Gas
System). Other subsidiaries are engaged in waterborne
transportation, coal and synthetic fuel production and independent
power.

                          *     *     *

As reported in the Troubled Company Reporter on Jan. 10, 2005,
Fitch Ratings does not expect any changes to the current ratings
or Outlook for TECO Energy following their announcement earlier
today that they plan to record impairment charges of $480 million
(after-tax) in the fourth quarter of 2004 related to the Dell,
McAdams, and Commonwealth Chesapeake power plants, as well as some
remaining unused steam turbines.  The charges come as a result of
annual reviews of the carrying values of the assets and will
affect both net income and the balance sheet.  Fitch rates TECO:

      -- Senior unsecured debt 'BB+';
      -- Preferred stock 'BB';
      -- Rating Outlook Stable.


TRITON CDO: Moody's Junks $12.5M Class C-1 & $5M Class C-2 Notes
----------------------------------------------------------------
Moody's Investors Service confirmed the rating of one class and
lowered the rating of two classes of notes issued by Triton CDO
IV, Limited, the Issuer, which were under review for possible
downgrade.

Moody's confirmed the A1 rating of the Issuer's U.S. $169,000,000
Class A First Priority Senior Floating Rate Notes Due 2010 and
lowered the rating of:

   1. the U.S. $26,750,000 Class B Second Priority Senior Floating
      Rate Notes Due 2010 to B1 (from Ba1); and

   2. the U.S. $12,500,000 Class C-1 Mezzanine Floating Rate Notes
      Due 2010 and U.S. $5,000,000 Class C-2 Mezzanine Fixed Rate
      Notes Due 2010 to Ca (from Caa3).

The transaction closed on December 15, 1999.

According to Moody's, its action results from significant
deterioration in collateral quality and coverage.  Moody's noted
that, excluding defaulted securities, the weighted average rating
factor of the collateral pool has deteriorated to 4413 (2755
limit) and more than 39% of the collateral pool has a Moody's
rating of Caa1 or lower.  In addition, Moody's indicated that all
three over collateralization (OC) tests are out of compliance in
the last report, the Class A/B OC ratio is 105.0% (121% required),
the Class C OC ratio is 84.3% (111.5% required) and the Class D OC
ratio is 74.4% (105.5% required).  Moody's noted that the Class A
Notes had paid down by more than U.S. $149,345,860.

   -- Issuer: Triton CDO IV, Limited

      * Rating Action: Confirmation And Downgrade

   -- Class Description: U.S. $169,000,000 Class A First Priority
      Senior Floating Rate Notes Due 2010

      * Prior Rating: A1 (under review for downgrade)

      * Current Rating: A1

   -- Class Description: U.S. $26,750,000 Class B Second Priority
      Senior Floating Rate Notes Due 2010

      * Prior Rating: Ba1 (under review for downgrade)

      * Current Rating: B1

   -- Class Description: U.S. $12,500,000 Class C-1 Mezzanine
      Floating Rate Notes Due 2010

      * U.S. $5,000,000 Class C-2 Mezzanine Fixed Rate Notes Due
        2010

      * Prior Rating: Caa3 (under review for downgrade)

      * Current Rating: Ca


TXU CORP: Board Elects Stan Szlauderbach as SVP & Controller
------------------------------------------------------------
TXU Corp.'s (NYSE: TXU) Board of Directors has elected Stan
Szlauderbach senior vice president and controller.  Mr.
Szlauderbach was formerly assistant controller of the company and
has been interim controller since Sept. 30, 2004.

Mr. Szlauderbach is a Certified Public Accountant who joined the
company in 2001.  His previous experience includes 14 years with
PepsiCo, Inc., in various accounting and financial reporting
management roles.

                        About the Company

TXU Corp., a Dallas-based energy company, manages a portfolio of
competitive and regulated energy businesses in North America,
primarily in Texas.  In TXU Corp.'s unregulated business, TXU
Energy Retail provides electricity and related services to more
than 2.5 million competitive electricity customers in Texas, more
customers than any other retail electric provider in the state.
TXU Power has over 18,300 megawatts of generation in Texas,
including 2,300 MW of nuclear-fired and 5,837 MW of lignite/
coal-fired generation capacity.  TXU Corp. is also the largest
purchaser of wind- generated electricity in Texas and among the
top five purchasers in North America.  TXU Corp.'s regulated
electric distribution and transmission business, TXU Electric
Delivery Company, complements the competitive operations, using
asset management skills developed over more than one hundred
years, to provide reliable electricity delivery to consumers.  TXU
Electric Delivery operates the largest distribution and
transmission system in Texas, providing power to 2.9 million
electric delivery points over more than 98,000 miles of
distribution and 14,000 miles of transmission lines.  Visit
http://www.txucorp.com/for more information about TXU Corp.

                         *     *     *

As reported in the Troubled Company Reporter on Nov. 12, 2004,
Fitch Ratings affirmed the senior unsecured and preferred stock
ratings of TXU Corp. at 'BBB-' and 'BB+', respectively.  The
Ratings Outlook for TXU Corp. is Stable.


UAL CORP: Wants Court to Approve Master Pact with Gate Gourmet
--------------------------------------------------------------
UAL Corporation and its debtor-affiliates are currently parties to
three catering services agreements with Gate Gourmet, Inc.
Pursuant to these agreements, Gate Gourmet provides catering
services to the Debtors for in-flight meals at airports including
Denver, San Francisco and Honolulu.  At the Denver International
Airport, the Debtors will replace Gate Gourmet and must provide
access to the premises to another vendor.  At the San Francisco
and Honolulu Airports, Gate Gourmet is a party to a sublease with
the Debtors, using the property for the operation of a flight
kitchen and the provision of catering services.  Gate Gourmet
filed Claim No. 38913 for $19,139,981.

Since the bankruptcy petition date, the Debtors and Gate Gourmet
have conducted extensive negotiations.  Having reached a
consensus, the Debtors seek the Court's permission to enter into a
Master Domestic Services Agreement with Gate Gourmet, which will
supersede the prior agreements.

The material terms of the Master Agreement are:

  a) Mutual termination of the prior agreements, with both
     parties mutually releasing one another;

  b) Under the new terms, the Debtors will receive average
     monthly cost savings of about $500,000;

  c) The Debtors will have the opportunity to increase the
     monthly savings;

  d) If the Master Domestic Services Agreement becomes effective
     before January 31, 2005, the cost discounts will be
     retroactively effective to October 2004;

  e) Gate Gourmet will have a general unsecured claim with the
     amount under negotiation, but not less than $17,704,495 and
     not more than $19,139,081;

  f) The Debtors will assume the San Francisco Airport sublease;

  g) Gate Gourmet will no longer provide services to the Debtors
     at Denver Airport, and the parties will terminate the
     sublease;

  h) The Debtors and Gate Gourmet will enter into a new sublease
     at the Honolulu Airport;

  i) If the Agreement is terminated prior to confirmation or the
     Debtors convert the proceedings to a Chapter 7, Gate Gourmet
     will waive its right to damages.  Instead, Gate Gourmet will
     have an allowed administrative expense claim measured by the
     benefit provided to the Debtors under the Agreement; and

  j) The Debtors will prepay Gate Gourmet for its services;

James H.M. Sprayregen, Esq., at Kirkland & Ellis, tells the Court
that entry into the Master Agreement will provide numerous
benefits to the Debtors' estate.  The Debtors will receive
necessary catering services on better economic terms than under
the prior agreements.  The superior economic terms are valued at
in excess of $15,000,000 over the life of the Agreement.  This
consists primarily of price reductions on goods and services.
The Agreement may create administrative liability, but Gate
Gourmet has agreed to limit its administrative claims.

Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the
holding company for United Airlines -- the world's second largest
air carrier.  The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191).  James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts.  (United Airlines
Bankruptcy News, Issue No. 73; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


ULTIMATE ELECTRONICS: Nasdaq Issues Delisting Notice
----------------------------------------------------
On January 19, 2005, Ultimate Electronics, Inc., (Nasdaq: ULTEQ)
received a notification from the Listing Qualifications Department
at The Nasdaq Stock Market, Inc., that it is in material
noncompliance with Marketplace Rules for continued listing on
Nasdaq.

The notification does not by itself result in immediate delisting
of the Company's securities.  As discussed in the Company's
Current Report on Form 8-K filed Dec. 28, 2004, the Company
previously requested a hearing with the Nasdaq Listing
Qualifications Panel in connection with a notice of violation of
Marketplace Rule 4310(c)(14).  An oral hearing is scheduled for
Jan. 27, 2005, at which the additional deficiencies listed above
will be considered.  There can be no assurance that the Panel will
grant the Company's request for continued listing.

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.


W.R. GRACE: Wants to Refund Defense Costs & Settle Claims
---------------------------------------------------------
Before the bankruptcy petition date of W.R. Grace & Co., and
debtor-affiliates, National Union Fire Insurance Company of
Pittsburgh, Pennsylvania, issued National Union's Employee Benefit
Plan Fiduciary Liability Insurance Policy to W.R. Grace & Co.  The
Policy provides for the payment, reimbursement or advancement of
reasonable and necessary fees, costs and expenses incurred in the
defense of "claims," as defined in the Policy.  The Policy has a
limit of liability for all covered "loss," as defined in the
Policy, including defense costs.  Settlements of "claims" are
included in the Policy's definition of "loss."

A lawsuit entitled "Evans v. Akers et al." has been filed in the
United States District Court for the District of Massachusetts
against members of the Debtors' Board of Directors and certain key
employees.  A lawsuit entitled "Bunch, et al. v. W.R. Grace & Co.,
at al." has also been filed in the U.S. District Court for the
Eastern District of Kentucky against certain of the Debtors,
members of the Debtors' Board of Directors, and certain key
employees.

Subsequent to the Petition Date, notwithstanding the automatic
stay imposed by Section 362 of the Bankruptcy Code, the Defendants
have incurred, and likely will continue to incur, significant
defense costs in connection with the pending civil actions.

National Union has agreed to reimburse the Defendants' Defense
Costs and advance funds to settle the Actions.  National Union,
however, reserves its rights, privileges and defenses under the
Policy, at law and in equity with respect to the Actions.

Payments, reimbursement or advancement of Defense Costs under the
Policy will be limited to the reasonable and necessary fees, costs
and expense charges by one "lead" law firm, any reasonable and
necessary local or other special counsel, and various other
service providers in support of the defense of the Actions for
each subset of the Defendants who reasonably require separate
counsel.

The Debtors ask the U.S. Bankruptcy Court for the District of
Delaware to authorize National Union to:

   (i) pay, reimburse, and advance Defense Costs, subject to a
       full reservation of rights, to or for the benefit of the
       Defendants under the Policy, for one lead law firm, any
       reasonable and necessary local or other special counsel
       and various other service providers; and

  (ii) make Settlement Payments under the Policy.

The Debtors also ask Judge Fitzgerald to lift the automatic stay
for the limited purpose of allowing the payments, reimbursement
and advancement of Defense Costs and Settlement Payments.

The Debtors assure the Court that the payments, reimbursement and
advancements would not prejudice the interests of their creditors.
National Union will pay, reimburse or advance Defense Costs and
make Settlement Payments from its own funds, not the Debtors'
funds, in accordance with the Policy.

Granting the Debtors' request also would inure to the benefit of
their estates because they are likely to face substantial claims
for indemnification from the non-Debtor Defendants for Defense
Costs incurred in defense of and amounts paid to settle the
Actions.  To the extent the non-Debtor Defendants are entitled to
indemnification, the Debtors' estates may ultimately be liable to
those Defendants if the amounts are not paid by National Union.

To the extent that National Union pays, reimburses, or advances
the Defense Costs of the non-Debtor Defendants and makes
Settlement Payments, the Debtors' estates would be relieved for
their indemnification obligations to pay those amounts.
Moreover, if National Union does not pay the Defense Costs of the
non-Debtor Defendants, the likelihood that the non-Debtor
Defendants would be properly represented in the Actions would
decrease, and the risk of increased indemnity claims against the
Debtors would increase.  Any increase in indemnity claims would
place a burden on the Debtors' estates and prejudice their
creditors.

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)


W.R. GRACE: Asks Court to Approve Continental Settlement Pact
-------------------------------------------------------------
W.R. Grace & Co., and debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware to approve a Confidential
Settlement Agreement and Release entered into among W.R. Grace &
Co.-Conn., W.R. Grace & Co, W.R. Grace & Co.-N.Y. -- now known as
Fresenius Medical Care Holdings, Inc. -- and Continental Casualty
Company.

Pursuant to the Settlement Agreement, Continental will pay the two
Grace entities $9 million, and Grace and Fresenius will provide
Continental certain releases from potential liability stemming
from certain insurance policies.  Laura Davis Jones, Esq., at
Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., in
Wilmington, Delaware, relates that the Settlement Agreement will
relieve the Debtors from prospective legal costs and litigation
risks associated with the underlying dispute.

Previously, Continental issued Grace certain primary policies of
insurance that have stated limits for "gradual pollution."

In 1988, Maryland Casualty Co. commenced an action in the U.S.
District Court for the Southern District of New York to resolve
coverage disputes arising out of numerous environmental claims
asserted by Grace, in response to which Grace asserted a
cross-claim against Continental for coverage of environmental
claims under the policies, including claims under the Gradual
Pollution Limits.  In 2000, Continental filed a complaint against
Grace in the same court, which seeks a declaration of no coverage
for additional claims tendered.

In connection with an action against Hatco Corp. in the U.S.
District for the District of New Jersey, the Parties entered into
a settlement agreement dated May 30, 1997, pursuant to which the
Gradual Pollution Limits stated in the Policies were exhausted and
all claims for indemnity and defense costs for claims which come
under the Gradual Pollution Limits were extinguished and released,
except for Grace's claims for defense costs relating to claims
under the Gradual Pollution Limits incurred prior to the date of
the Hatco Settlement.

After the Hatco Settlement was executed, the Parties continued to
litigate Continental's obligations, including the obligation to
pay or reimburse Grace for Pre-Hatco Defense costs for claims in
connection with the sites at issue in the NY Coverage Actions.  In
2001, judgment was entered in the NY Environmental Litigation
declaring, among other things, that Continental had no obligation
to pay or reimburse Grace for gradual pollution claims.  In 2003,
the U.S. Court of Appeals for the Second Circuit affirmed the
judgment for the 1973-83 policies, and remanded the case for
further proceedings regarding Continental's obligations under
certain of the Policies.

The Parties entered into the Settlement Agreement to resolve the
NY Coverage Actions, with the exception of assertion of coverage
for personal injury claims arising from Grace-related business
operation in Libby, Montana.  The Settlement Agreement provides
that in consideration of receipt of the Payment, Grace and
Fresenius release Continental from all liabilities for:

    * Pre-Hatco Defense Costs;

    * Property Damage Pollution Claims and Personal Injury
      Pollution Claims; and

    * any alleged wrongdoing by Continental.

The Payment is being held in escrow by Pitney Hardin, LLP, pending
the Court's approval of the Settlement Agreement.  If the
Settlement Agreement is not approved on or before March 15, 2005,
then the Payment and accrued interest will be returned to
Continental, provided, however, that the Parties may agree in
writing to extend the time to obtain the Court's approval of the
Settlement Agreement.

If the Court denies the Settlement Agreement, then it will be
void, and the Payment and accrued interest will be returned to
Continental.  Pitney Hardin may release the Payment and accrued
interest to Grace only after either 30 days after the Court's
approval, or if an appeal and the Payment is not otherwise
returned to Continental, 30 days after the final order approving
the Agreement.

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)


W.R. GRACE: Wants Removal Period Extended to Plan Effective Date
----------------------------------------------------------------
W.R. Grace & Co., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to further extend
the period within which they may remove actions pursuant to
Section 1452 of the Judicial Procedures Code and Rule 9027 of the
Federal Rules of Bankruptcy Procedure through the effective date
of their Plan of Reorganization.

Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub, P.C., in Wilmington, Delaware, states that given that
the Debtors are currently working towards confirmation of their
Plan which will necessarily deal with many of the actions that
could be removed, it would be most efficient for the decisions
with respect to removal to be addressed on the Plan confirmation
date.

The Debtors are named defendants in thousands of asbestos-related
lawsuits in various state and federal courts involving different
individual claims, in asbestos-related fraudulent conveyance
actions, and in numerous environmental lawsuits.  The Debtors'
Plan of Reorganization propose procedures for estimating and
resolving their liability on accounts of their asbestos claims.
The Plan provides for, among other things, the creation of an
asbestos trust, to which all allowed asbestos property damage
claims and asbestos personal injury claims would be channeled for
recovery.

Ms. Jones explains that the litigation procedures outlined by the
Debtors streamline the claims adjudication process.  While this
litigation will not completely eliminate the Debtors' need to
preserve the option to remove Actions to the Bankruptcy Court, it
should minimize the need to do so.  Nonetheless, until the claims
arising from the Actions have been resolved, whether through these
litigation protocols or otherwise, the Debtors must preserve the
option of removing Actions to the Court.

The extension, Ms. Jones says, will afford the Debtors an
opportunity to make fully informed decisions concerning removal of
all Actions and assure that they do not forfeit valuable rights
under Section 1452.

The Debtors remind the Court that their Plan is not a consensual
plan.  However, the Debtors, the Asbestos Parties, the Official
Committee of Equity Holders, and the Official Committee of
Unsecured Creditors continue to discuss the potential for a
consensual plan.  During the December 20, 2004, omnibus hearing,
the Debtors announced that they have come to terms with the Equity
Committee and the Creditors Committee concerning the structure for
a joint plan, which they expect to file shortly.

The Debtors' request is without prejudice to (i) any position they
may take regarding whether Section 362(b) of the Bankruptcy Code
applies to stay any Action, (ii) their right to seek further
extensions of time to remove any and all Actions, or (iii) the
rights of interested third parties to request that the Removal
Period be shortened as to a particular Action.

The Court will convene a hearing on February 28, 2005, to consider
the Debtors' request.  By application of Del.Bankr.LR 9006-2, the
deadline is automatically extended through the conclusion of that
hearing.

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)


WESTPOINT STEVENS: Court Approves Marianna & Columbia Leases
------------------------------------------------------------
As previously reported, WestPoint Stevens, Inc. and its
debtor-affiliates seek the United States Bankruptcy Court for the
Southern District of New York's authority to enter into
nonresidential real property leases with:

    (a) Arquette Development Corp. for the lease of a property in
        Marianna, Florida; and

    (b) HouseCalls International for the lease of a property in
        Columbia, Alabama.

The Debtors believe that the Marianna Lease and the Columbia
Lease will offer them substantial flexibility as they continue to
pursue restructuring alternatives.

At the Debtor's behest, the Court approves the motion.

Headquartered in West Point, Georgia, WestPoint Stevens, Inc., --
http://www.westpointstevens.com/-- is the #1 US maker of bed
linens and bath towels and also makes comforters, blankets,
pillows, table covers, and window trimmings.  It makes the Martex,
Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux
brands, as well as the Martha Stewart bed and bath lines; other
licensed brands include Ralph Lauren, Disney, and Joe Boxer.
Department stores, mass retailers, and bed and bath stores are its
main customers.  (Federated, J.C. Penney, Kmart, Sears, and Target
account for more than half of sales.) It also has nearly 60 outlet
stores.  Chairman and CEO Holcombe Green controls 8% of WestPoint
Stevens.  The Company filed for chapter 11 protection on
June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532).  John J.
Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents the
Debtors in their restructuring efforts. (WestPoint Bankruptcy
News, Issue No. 37; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


WILLAMETTE VALLEY: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Willamette Valley Distributing, L.L.C.
        P.O. Box 1444
        Oregon City, Oregon 97045

Bankruptcy Case No.: 05-30712

Type of Business: The Debtor is a tobacco distributor.

Chapter 11 Petition Date: January 25, 2005

Court: District of Oregon (Portland)

Judge: Randall L. Dunn

Debtor's Counsel: Stephen T. Boyke, Esq.
                  Greene & Markley, P.C.
                  1515 South West 5th Avenue, #600
                  Portland, OR 97201
                  Tel: 503-295-2668

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

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


XEROX CORP: S&P Revises Ratings on BB- Rating to Stable
-------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' corporate
credit rating on Stamford, Connecticut-based Xerox Corp., and
revised its outlook to stable from negative.  The outlook revision
reflects improvements in Xerox's nonfinancing operating
performance and leverage profile.

As of Dec. 31, 2004, Xerox had total outstanding debt of about
$10.1 billion.

"The ratings on Xerox Corp. and related entities reflect mature
and highly competitive industry conditions, continued revenue
weakness, and a leveraged financial profile," said Standard &
Poor's credit analyst Martha Toll-Reed.  These factors partly are
offset by the company's good position in its core document
processing business, and improving financial flexibility.

Xerox reported revenues of $4.3 billion and net income of
$240 million in the quarter ended Dec. 31, 2004.  Total revenue
was up 1% compared with the same period last year (including a 3%
currency benefit); however, equipment sales have posted modest,
annual constant-currency improvement over the past two years,
which is expected to provide the foundation for future revenue
growth.  Xerox's nonfinancing EBITDA margin stabilized at about
10% in fiscal 2004, bolstered by strength in Xerox's seasonally
important fourth quarter.

Although we do not expect material improvement in nonfinancing
profitability in the absence of revenue growth, results for
the December 2004 quarter reversed a two-year trend of
flat-to-declining non-financing operating earnings.  Annual
nonfinancing EBITDA levels are expected to be sustained, based
on an ongoing focus on cost controls and operating efficiency.


* Fitch: Balanced Rating Changes Signal Stronger U.S. Bond Market
-----------------------------------------------------------------
The ratio of par downgrades to upgrades for the U.S. bond market
contracted to 1.3 to 1 in 2004, compared with ratios of 4.9 to 1
in 2003 and 10.3 to 1 in 2002, according to Fitch Ratings.  The
par value of bonds affected by upgrades, totaling $115 billion for
the year, was up considerably year over year, rising 143%, while
the par value of bonds affected by downgrades, totaling $147.4
billion in 2004, contracted 37%.

For the U.S. bond market as a whole, downgrades affected 5.6% of
market volume in 2004 while upgrades affected 4.4%, compared with
9.2% and 1.8%, respectively, for downgrades and upgrades, in 2003.

'When examining the mix of rating changes specific to the
investment-grade and speculative-grade portions of the market, the
smaller speculative-grade sector clearly enjoyed the bulk of the
year's rating gains,' said Paul Mancuso, Senior Director, Fitch
Credit Market Research.  'More than two thirds of 2004's total par
upgrades were due to positive rating drift within the speculative-
grade sector.'

In fact, for the year, the ratio of par downgrades to upgrades
stood at 0.7 to 1 for the speculative-grade sector, compared with
2.5 to 1 for the pool of bonds rated investment grade.

New issuance for the U.S. bond market was up again in 2004, rising
from 2003's $665 billion to $714 billion.  Issuance once again
exceeded scheduled bond maturities for the year by a ratio of 2 to
1.  However, in contrast to previous years, the market's size grew
considerably in 2004, from $2.8 trillion at the end of 2003 to
$3.1 trillion at the end of 2004.

'While refinancing dominated use of proceeds within the industrial
sectors, the financial sectors borrowed heavily to finance loan
growth and this contributed to the bond market's expansion year
over year,' said Mariarosa Verde, Managing Director, Fitch Credit
Market Research.

Overall, issuance growth in 2004 was driven almost exclusively by
a stunning 55% year-over-year increase in floating-rate issuance
among the financial sectors.

Investor demand for floating-rate notes, awakened by the fear of
rising rates, ran high in 2004, and companies clearly tried to
satisfy the demand.  Floating issuance among the industrials was
also up in 2004, albeit on a small base, from $12.3 billion in
2003 to $29.2 billion in 2004, a year-over-year increase of 136%.
The marked increase among the industrials was broad based.  Even
speculative-grade companies sold more floating-rate bonds in 2004.
Floating issuance totaled 7% of non-investment grade bond sales
for the year, up from practically non-existent levels in prior
years.

Overall, floating-rate issuance totaled $299 billion in 2004, up
from $186 billion in 2003 and $143 billion in 2002.

Fitch believes that demand for floating-rate bonds will continue
to accelerate in 2005 and with it increased issuance of floating-
rate bonds.  For companies, some of the interest rate risk
inherent in these floating instruments can be mitigated through
the use of interest rate swaps.  It is worth noting that as of
year's end, floating notes remained a small portion of overall
industrial bond volume (just 3%).  Furthermore, the backdrop of
improving fundamentals and a positive economic outlook also offset
some of the short-term risk posed by these notes.

In contrast to floating activity, fixed-rate bond issuance overall
declined 13% in 2004, compared with that of 2003 ($415 billion in
2004 versus $479 billion in 2003) and in particular, was down 20%
for the industrial sectors.  The slowdown was partly due to some
refinancing burnout among the industrials and also due to the
combination of cash rich balance sheets and spending restraint,
which limited the need to access long-term funds.  Fitch believes
these same trends will depress fixed-rate issuance again in 2005.

Fitch's complete analysis of rating and issuance trends for the
U.S. Bond Market in 2004 will be available on the Fitch Ratings
web site at http://www.fitchratings.com/under 'Credit Market
Research' in February.

Fitch's U.S. Bond Market Credit Insight looks at macro trends for
outstanding U.S. dollar-denominated, nonconvertible bonds issued
by companies domiciled in the U.S. (at the end of December the
market's size was $3.1 trillion).  Downgrades and upgrades noted
above refer to broad category changes, i.e. 'BBB' to 'BB'.
Ratings are based on a blended average of the ratings assigned by
Fitch or one of the other two major rating agencies.


* BOOK REVIEW: Full Faith and Credit: The Great S & L Debacle
-------------------------------------------------------------
Author:     Lewis William Seidman
Publisher:  Beard Books
Softcover:  300 pages
List Price: $34.95

Order your personal copy at
http://www.amazon.com/exec/obidos/ASIN/1893122492/internetbankrupt

Review by Susan Pannell

"My friends, there is good news and bad news.  The good news is
that the full faith and credit of the FDIC and the US government
stands behind your money at the bank.  But the bad news is that
you, my fellow taxpayers, stand behind the US government."  Take
it from L. William Seidman, former chairman of the FDIC under
Reagan and Bush, in his irreverent Washington memoir.  Chosen by
Congress to lead the S&L cleanup, the author describes how the
debacle was created and nurtured and the lawsuits against Charles
Keating, Michael Milken, and Neil Bush that it spawned.

The story begins in the summer of 1973 when Seidman, then a Grand
Rapids, Michigan, businessman and managing partner of one of the
country's ten largest accounting firms, which bore his family's
name, was tapped by Nixon to be undersecretary of HUD.  Seidman
had scarcely unpacked his bagswhen "the summer of 1973" took on
new meaning in Washington and across the country.  Confirmation of
any of the precarious president's nominations looked dubious in
the extreme, and Seidman prepared to pack up again.  Then came a
call from the office of newly appointed Vice President Ford.
Spiro Agnew, hastily departing, had left the office in shambles.
(Not least to be disposed of were large cases of Scotch whiskey,
presented to Agnew by supplicants.) Would Seidman lend his
managerial expertise for a few weeks to help a fellow Grand
Rapidan get organized?

One thing led to another in the usual Potomac way, and when Ford
advanced to the presidency, Seidman was made his assistant for
economic affairs.  That job, too, was relatively short-lived, but
a decade later he returned to Washington to head the FDIC under
Reagan.  What the author found was plenty disturbing.  The
over-optimism of the 1970s ad 1980s- in particular, he believes, a
speculative binge of real estate investing -- followed by
recession, was resulting in numerous bank failures, more than
1,000 between 1986 and 1991.  Worse, disaster loomed in the sister
agency that insured savings and loan institutions: a majority of
the nation's 4,000 S&Ls were on their way to bankruptcy.

What caused the S&L crisis? Seidman, although a small-government
advocate, blames a combination of deregulation and cutbacks in the
oversight agencies.  One of his many battles, for example, was
with OMB, which sought to cut the FDIC's bank supervision staff
just as it had tried to reduce the number of S&L examiners.  But
he finds a silver lining in the near catastrophe: proof of
resilience.  The diversity of the US financial system is also its
strength.

Seidman's memoir is as much about life inside the Beltway as it is
about financial crises, making this book, first published in 1990,
no less entertaining today.  Included are lively anecdotes of
confrontations with heavy-weight White House chief of staff John
Sununu, an interview with a wild-eyed Wyoming purchaser of FDIC
property from a liquidated bank who arrived in Seidman's office
armed with a gun to register his displeasure with the purchase (a
valid objection, the author discovered), and ambush by Secret
Service agents who converged on Seidman as he opened his window
and leaned out to watch the president's helicopter take off.


                          *********

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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