TCR_Public/050210.mbx       T R O U B L E D   C O M P A N Y   R E P O R T E R

         Thursday, February 10, 2005, Vol. 9, No. 34      

                          Headlines

360NETWORKS INC: Commences Cash Tender Offer for Common Shares
ACTUANT CORP: Key Components Acquisition Cues S&P to Hold Ratings
ADELPHIA COMMS: Sells Security Business to Devcon for $42.8MM
AER AVIATION INC: Case Summary & 10 Largest Unsecured Creditors
AIRGATE PCS: Posts $15.3 Million Net Loss in First Quarter

AMRESCO COMMERCIAL: Puts Low-B Ratings on 3 Certificate Classes
BALTIMORE MARINE: Hires Penta Advisory as Accountants and Advisors
CASCADES INC: Keeps Profitability Despite Rise of Canadian Dollar
CASE FINANCIAL: Losses & Deficit Trigger Going Concern Doubt
CATHOLIC CHURCH: Spokane Wants CNA's Request to Lift Stay Denied

COLTS 2005-1: S&P Places BB+ Rating on $10.575M Class E Notes
CONSTRUX CONSTRUCTION: Wants to Use $1 Million of Cash Collateral
CONSTRUX CONSTRUCTION: Taps Francis J. Giganti as General Counsel
CORNING INC: S&P Places Low-B Ratings on CreditWatch Positive
COVANTA ENERGY: Wants Exclusive Period Stretched to June 15

CUES INC: Case Summary & 14 Largest Unsecured Creditors
CROWN OIL: Case Summary & 8 Largest Unsecured Creditors
DANNY'S DIGGIN': Case Summary & 10 Largest Unsecured Creditors
DEL MONTE: Subsidiary Successfully Completes Refinancing
DIMON INC: Posts $1.9 Million Net Loss in Third Quarter 2005

DONNKENNY INC: Files Joint Plan of Reorganization in New York
DONNKENNY INC: Secures $60 Million DIP Loan from CIT Group
EAGLE PICHER: Poor Liquidity Cues S&P to Pare Credit Rating to B-

ENRON CORP: Court Approves Allocation of Reserved Funds
FEDERAL-MOGUL: U.K. Administrators Object to Plan Confirmation
FEDERAL-MOGUL: Points Out Flaws in FAIR Act Draft
FIDELITY NATIONAL: S&P Assigns BB Corp. Credit & Sr. Sec. Ratings
FLEXTRONICS: Completes Transfer of Nortel's Montreal Operations

FRIEDMAN'S: U.S. Trustee Appoints 9-Member Creditors Committee
FRIEDMAN'S: Committee Retains Ellis Painter as Local Counsel
FRIENDS HOSPITAL: Moody's Affirms B2 Bond Rating After Review
HEALTH NET: Fitch Downgrades Senior Debt Rating to BB+
HEALTH NET: S&P Places Low-B Ratings on CreditWatch Negative

HEILIG-MEYERS: RoomStore Disclosure Statement Hearing on Mar. 8
HIGH VOLTAGE: Files Chapter 22 Petition in Boston, Massachusetts
HIGH VOLTAGE: Case Summary & 36 Largest Unsecured Creditors
HORNACO INC: Case Summary & 40 Largest Unsecured Creditors
ILLINOIS HEALTH: S&P Lifts Rating on Revenue Bonds to CCC from CC

INTELSAT: Discount Note Issue Cues Fitch to Junk Senior Notes
INTERSTATE HOTELS: Hosting 4th Quarter Earnings Call on Feb. 23
IWO HOLDINGS: Emerging from Bankruptcy Protection Today
KEY COMPONENTS: Actuant Acquisition Cues S&P to Withdraw B- Rating
KISTLER AEROSPACE: Gets Insurance Premium Financing from Cananwill

KITCHEN ETC: Judge Walsh Confirms Second Amended Liquidation Plan
KMART CORP: Settles Samsung Claim Assignment Dispute
KRISPY KREME: Reducing Workforce by 25% to Save $7.4 Million
LACLEDE STEEL: Disclosure Statement Hearing Scheduled for March 7
LEVI STRAUSS: S&P Places Junk Ratings on CreditWatch Positive

MANUFACTURED HOUSING: S&P's Rating on Three Classes Tumbles to D
MB TECH: Restructuring of Korean Operation Reduces Debt
MIRANT CORPORATION: Court Orders Intercompany Claim Disclosures
MOSAIC GROUP: Can Start Liquidating MCI Stock
NEW SKIES: Wants to Amend Bank Loan via Deutsche Bank on IPO

NEW VISUAL: Needs $820,000 to Operate Until April
NORTEL NETWORKS: Completes Asset Transfer to Flextronics
NORTHWESTERN CORP: Settles Litigation & Bankr. Claims with Magten
NRG ENERGY: NRG McClain Wants Chapter 11 Case Dismissed
OMNICARE INC: S&P Rates Proposed $345M Preferred Securities at BB

ORMET CORP: Steelworkers Demand Fair Settlement
OVERSEAS SHIPHOLDINGS: Moody's Confirms Ba1 Senior Unsec. Rating
PARMALAT USA: Commences Adversary Proceeding Against Tuscan/Lehigh
PEGASUS SATELLITE: Wants to Settle Dispute with Secured Lenders
PHILIP SERVICES: Asks Court to Close 34 Chapter 11 Cases

PILLOWTEX CORP: Court Approves Amendment to Trenwith Engagement
PULASKI TIRE SERVICE: Case Summary & Largest Unsecured Creditors
QUALTEC INC: Case Summary & 17 Largest Unsecured Creditors
RADVIEW SOFTWARE: Dec. 31 Balance Sheet Upside-Down by $84,000
RIGGS NATIONAL: Moody's Pares Rating on Deposits from Baa3 to Ba1

RIGGS NATIONAL: Fitch Junks Subordinated Debt & Preferred Stock
RITE AID: Closes Over-Allotment Option of Convertible Pref. Stock
SAFETY-KLEEN: Creditor Trust Asks Court to Approve Market Hub Pact
SEMGROUP LP: Moody's Lifts Secured Debt Rating to Ba3 from B1
SFBC INT'L: Registers 3.5 Million Common Shares for Public Offer

SOLA INTERNATIONAL: Earns $9.4 Million of Net Income in 3rd Qtr.
SOLUTIA INC: Court Approves Claim Waiver Procedures
SPARKLE CLEANING: Case Summary & 11 Largest Unsecured Creditors
SPEIZMAN INDUSTRIES: Court Confirms Amended Plan of Liquidation
STANDARD COMMERCIAL: Earns $6.4 Million of Net Income in 3rd Qtr.

STATER BROS: Dec. 26 Balance Sheet Upside-Down by $33.8 Million
STONE TOWER: S&P Places Ratings on CreditWatch Positive
TALCOTT NOTCH: S&P Affirms BB- Rating on Class A-4 Notes
TEE JAYS MANUFACTURING: Section 341(a) Meeting Slated for March 23
UAL CORP: Inks Pact to Settle Advertising Dispute with Fallon

UAL CORP: Court Okays Labor Pact Changes with Flight Attendants
UNITED HOSPITAL: Creditors Committee Taps Thelen Reid as Counsel
UNITED HOSPITAL: Hires Kurron Shares as Restructure Managers
US AIRWAYS: Wants to Employ Global Insight as Experts
USM CORPORATION: Case Summary & 20 Largest Unsecured Creditors

WINN-DIXIE: Hosting Second Quarter Conference Call Today
YOUTHSTREAM MEDIA: Losses & Deficit Trigger Going Concern Doubt
YUKOS OIL: Gets Court Nod to Deposit $21 Million in Court Registry
ZEMACH CORP: Taps Backenroth Frankel as Bankruptcy Counsel
ZEMACH CORP: Section 341(a) Meeting Slated for March 7

* Sheppard Mullin Elects Five Attorneys to Partnership

                          *********

360NETWORKS INC: Commences Cash Tender Offer for Common Shares
--------------------------------------------------------------
The Board of Directors of 360networks Corporation is aware that
certain Shareholders of 360 have indicated on various occasions in
the past their desire to sell all or a portion of their Shares.  
As there is no public trading of 360's Shares, most Shareholders
have not have an opportunity to sell their Shares.  360 has
considered various ways of providing liquidity to Shareholders.

Accordingly, 360networks Corporation invites its shareholders to
deposit common shares of 360.  360 will purchase less than all of
its common shares for not more than $3 and not less than $2 per
share.  360's offer to purchase expires at 5:00 p.m., Eastern
Standard Time, on March 11, 2005, unless extended.

A Shareholder may deposit Shares pursuant to:

    (a) an auction tender at a price between $2 and $3 per Share,
        in an increment of $0.10 per Share, specified by the
        Shareholder; or

    (b) a purchase price tender where the tendering Shareholder
        does not specify a price per Share, but rather agrees to
        have the Shareholder's Shares purchased at a certain
        Purchase Price.

Shares deposited by a Shareholder pursuant to an Auction Tender
will not be purchased by 360 if the price specified by the
Shareholder is greater than the Purchase Price determined by 360.
A Shareholder who wishes to deposit Shares but who does not wish
to specify a price should make a Purchase Price Tender.  For the
purpose of determining the Purchase Price, Shares deposited
pursuant to a Purchase Price Tender will be considered to have
been deposited at $2 per Share.  By making a Purchase Price
Tender, a Shareholder will maximize the likelihood of having the
holder's Shares purchased.

360 will purchase Shares under the Offer to a maximum aggregate
amount of $8,000,000 plus any additional Shares pursuant to the
exercise of the Issuer's Option, if any, and pursuant to Small
Holding Purchases:

Issuer's Option       360 will have the option, exercisable
                       on or before the fifth day prior to the
                       Expiration Date, to make available up to
                       an additional $3,000,000 to purchase
                       additional Shares at the Purchase Price to
                       cover Over-Subscriptions.  Over-
                       Subscription occurs when the aggregate
                       Purchase Price for Shares properly tendered
                       exceeds $8,000,000.

Proration             If the number of Shares properly deposited
                       by the Expiration Date is greater than the
                       number of Shares that can be purchased for
                       the Maximum Amount of $8,000,000, 360 will
                       purchase at the Purchase Price the Shares
                       deposited on a pro rata basis with
                       adjustments to avoid the purchase of
                       fractional shares.

Small Holdings        If, as a result of proration following the
                       determination of the Purchase Price and
                       exercise of the Issuer's Option, if any,
                       the number of Shares to be returned to a
                       Selling Shareholder is less than the 1,000
                       Shares, 360 will purchase at the Purchase
                       Price all of the Shares from that Selling
                       Shareholder to avoid the creation of Small
                       Holdings -- holdings of less than 1,000
                       Shares.  Multiple tenders pursuant to an
                       Auction Tender at or below the Purchase
                       Price or a Purchase Price Tender by the
                       same shareholder will be aggregated for
                       this purpose.

All of 360's directors and senior officers owning vested options
or Shares will be depositing vested options in the Option
Buy-Back Program or will be depositing Shares pursuant to the
Offer.

360 will take up Shares as soon as practicable after the
Expiration Date, and in any event, within ten days after the
Expiration Date and will pay for those Shares as soon as possible
thereafter, but not later than three business days after taking up
the Shares.  The Purchase Price will be denominated and paid in
U.S. dollars.

The Board of Directors unanimously approved the Offer to provide
all Shareholders with an opportunity for liquidity.

Canadian securities laws prohibit 360 and its affiliates from
acquiring any Shares, other than pursuant to the Offer, until at
least 20 business days after the Expiration Date or termination of
the Offer.  360 may in the future, subject to applicable law,
purchase additional Shares in private transactions, through issuer
bids or otherwise.  Any purchases may be in the same terms, which
are more or less favorable to Shareholders than the terms of the
Offer.  Any possible future purchases by 360 will depend on many
factors, including 360's business and financial position, the
results of the Offer and general economic and market conditions.

                         Withdrawal Rights

Deposits of Shares may be withdrawn by the Shareholder:

    (a) at any time, if the Shares have not been taken up by 360
        before actual receipt by the Depositary of a notice of
        withdrawal in respect of the Shares; or

    (b) if the Shares have not been paid for by 360 within three
        business days of being taken up.

360 reserves the right to withdraw the Offer and not take up and
pay for any Shares deposited under the Offer unless certain
conditions are satisfied.

Neither 360 nor its Board of Directors makes any recommendation to
any Shareholder as to whether to deposit or to refrain from
depositing Shares.  Shareholders are urged to consult their own
investment and tax advisors and make their own decision whether to
deposit Shares to the Offer and, if so, how many Shares to
deposit, and at what price or prices.

Shareholders should carefully consider the income tax consequences
of accepting the Offer.

A full-text copy of the Offer is available for free at:

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

Headquartered in Vancouver, British Columbia, 360networks, Inc. --
http://www.360.net/-- is a leading independent provider of fiber   
optic communications network products and services worldwide. The  
Company and its 22 debtor-affiliates filed for chapter 11
protection on June 28, 2001 (Bankr. S.D.N.Y. Case No. 01-13721),  
obtained confirmation of a plan on October 1, 2002, and emerged  
from chapter 11 on November 12, 2002. Alan J. Lipkin, Esq., and
Shelley C. Chapman, Esq., at Willkie Farr & Gallagher, represent  
the Company before the Bankruptcy Court. When the Debtors filed  
for protection from its creditors, they listed $6,326,000,000 in  
assets and $3,597,000,000 in liabilities. (360 Bankruptcy News,
Issue No. 80; Bankruptcy Creditors' Service, Inc., 215/945-7000)


ACTUANT CORP: Key Components Acquisition Cues S&P to Hold Ratings
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB' corporate
credit rating on Actuant Corp., following the company's
acquisition in December 2004 of Key Components, Inc., from an
investor group for $315 million.  The acquisition included the
assumption of $80 million of debt of KCI's operating company, Key
Components LLC.  The ratings on Actuant have been removed from
CreditWatch where they were placed Nov. 22, 2004, after Actuant
announced its intent to acquire KCI.  The ratings on Key
Components were removed.  The outlook on Milwaukee,
Wisconsin-based Actuant is stable.

"The ratings affirmation reflects our earlier indication that
ratings would remain unchanged if management fulfilled its
announced intent to issue equity in conjunction with the debt
issuance undertaken to fund the KCI acquisition," said Standard &
Poor's credit analyst Nancy Messer.  "Although Actuant's leverage
has increased somewhat pro forma for the acquisition, it remains
at a level consistent with the 'BB' rating because of management's
effort to balance the capital structure.  The KCI acquisition
demonstrates management's willingness to temporarily increase
leverage in order to execute an attractive acquisition."

Actuant had pro forma total balance sheet debt of about
$442 million as of Jan. 31, 2005, incorporating the acquisition
funding.  The acquisition of KCI was funded by the issuance of
$250 million in unrated term loans and $134 million of common
equity.  The $80 million debt assumed by Actuant in the
acquisition was redeemed in January 2005.

Actuant manufactures a variety of standard and customized products
for niche automotive, industrial, and retail markets.  Newly
acquired KCI operates two business segments, electrical components
and mechanical engineered components, which manufacture flexible
shaft and remote valve components, turbocharger actuators and
related accessories, battery chargers, wiring for uninterruptible
power supplies, and other specialty electrical components for
various end markets.

The KCI acquisition, although significantly larger than what was
incorporated into the 'BB' corporate credit rating, is consistent
with Actuant's previously articulated growth strategy.  The KCI
businesses augment those of Actuant, and Standard & Poor's views
positively Actuant's increase in scale and diversity.


ADELPHIA COMMS: Sells Security Business to Devcon for $42.8MM
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved the asset purchase agreement between Devcon Security
Services Corp. -- DSS, a wholly owned subsidiary of Devcon
International Corp. (Nasdaq: DEVC), Adelphia Communications
Corporation (OTC Pink Sheets: ADELQ) and certain of Adelphia's
affiliates to purchase certain net assets of Adelphia's electronic
security services operation, Starpoint Limited Partnership.  The
transaction is subject to satisfaction of certain approvals and
other closing conditions and is expected to close on or before
February 28, 2005.

In approving the Devcon Sale Agreement, Judge Gerber makes it
clear that the net proceeds of the Sale will be used in accordance
with the terms of Extended DIP Order, dated May 6, 2004.  The
rights, if any, of Circle Acquisitions, Inc., and Circle Security
Systems, Inc., with respect to the allocation of the net proceeds
of the Sale will be reserved until the confirmation hearing on
ACOM's plan of reorganization.

DSS was the successful bidder for certain net assets of ACOM's
electronic security services operation, Starpoint Limited
Partnership, and has entered into a purchase agreement with
Adelphia to acquire the operation.

In announcing the successful bid, Stephen J. Ruzika, President of
Devcon and DSS, said, "The acquisition of Adelphia's security
services operation would make DSS a leader in the Florida
electronic security services market.  Opportunities exist to
consolidate the operations of DSS and Adelphia Security, and we
are optimistic that DSS will benefit from an increased market
presence as a result of this platform acquisition."

The estimated purchase price for the acquired net operating assets
is approximately $42.8 million in cash, based substantially upon
estimated contractually recurring monthly revenue of approximately
$1.2 million.  The purchase price is subject to adjustment, based
primarily on the final contractual recurring monthly revenue
calculation.  DSS will be funding the transaction through
available cash and a senior secured long-term debt facility.

Adelphia's electronic security services operation being acquired
is a leading provider of installation, monitoring and related
security services to commercial and residential customers in
Florida.  The operation has sales and services offices in Boca
Raton, Bonita Springs, Miami, Naples, Orlando and Tampa, as well
as in Buffalo, New York.  The operation has been ranked as the
19th largest electronic security services business in the United
States by Security Dealer Magazine.  The assets to be acquired
include a modern, full-service monitoring center located in
Naples, Florida, from which more than 57,000 subscribers' homes
and businesses are monitored.  After taking into consideration the
planned acquisition and DSS's existing security services business,
DSS would be providing security services to more than 62,000
customers.

A copy of the Devcon Purchase Agreement is available for free at:

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

Devcon has three operating divisions and an operating joint
venture.  The new Security Services Division provides electronic
security services to commercial and residential customers in
selected Florida markets.  The Construction Division dredges
harbors, builds marine facilities, constructs golf courses and
prepares residential, commercial and industrial sites, primarily
in the Bahamas and the eastern Caribbean.  The Materials Division
produces and distributes crushed stone, ready-mix concrete and
concrete block in the eastern Caribbean with principal operations
on St. Croix and St.  Thomas in the U.S. Virgin Islands, on St.
Maarten in the Netherlands Antilles, on St. Martin in the French
West Indies, on Puerto Rico, and on Antigua in the independent
nation of Antigua and Barbuda.  DevMat, an 80-percent-owned joint
venture, was formed in 2003 to build, own and operate fresh water,
waste water treatment and power systems.

Headquartered in Coudersport, Pennsylvania, Adelphia
Communications Corporation (OTC: ADELQ) is the fifth-largest cable
television company in the country.  Adelphia serves customers in
30 states and Puerto Rico, and offers analog and digital video
services, high-speed Internet access and other advanced services
over its broadband networks.  The Company and its more than
200 affiliates filed for Chapter 11 protection in the Southern
District of New York on June 25, 2002.  Those cases are jointly
administered under case number 02-41729.  Willkie Farr & Gallagher
represents the ACOM Debtors. (Adelphia Bankruptcy News, Issue Nos.
78 & 79; Bankruptcy Creditors' Service, Inc., 215/945-7000)


AER AVIATION INC: Case Summary & 10 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: AER Aviation, Inc.
        13709 Gamma Road
        Addison, Texas 75244

Bankruptcy Case No.: 05-31584

Type of Business: The Debtor is in the aviation business.

Chapter 11 Petition Date: February 8, 2005

Court:  Northern District of Texas (Dallas)

Judge:  Barbara J. Houser

Debtor's Counsel: Charles M. Hamilton, Esq.
                  French and Hamilton
                  211 North Record Street, Suite 400
                  Dallas, Texas 75202
                  Tel: (972) 404-1414

Total Assets: $1,078,561

Total Debts:  $1,208,402

Debtor's 10 Largest Unsecured Creditors:

    Entity                       Nature of Claim    Claim Amount
    ------                       ---------------    ------------
East Texas Turbines              Services                $54,097
1874 County Road 1143
Tyler, Texas 75704

Central Texas Avionics           Services                   $951
217 Corsair Drive
Georgetown, Texas 78628

Raul Miranda                     Services                     $0
4917 Rolling Meadows #201
Dallas, Texas 75211

IRS                              Taxes                        $0
Mail Code 5020-DAL
1100 Commerce Street, Room 9B8
Dallas, Texas 75242

French & Hamilton                Attorney Fees                $0
Charles M. Hamilton
211 North Record Street
Suite 400
Dallas, Texas 75202

Cord Johnson                     Sale of Aircraft             $0
166 Rocky Point
Abilene, Texas 76901

Colo Construction Company        Sale of Aircraft             $0
311 Forest Grove
Richardson, Texas 75080

Bill and Greg Rand               Unsecured Debt               $0
2901 Dallas Parkway, Suite 380
Dallas, Texas 75093

Aviation Data Systems, Inc.      Services                     $0
PO Box 634
Sanford, Florida 32772

Addison Airport of Texas         Unsecured Debt               $0
16051 Addison Road
Addison, Texas 75001


AIRGATE PCS: Posts $15.3 Million Net Loss in First Quarter
----------------------------------------------------------
AirGate PCS, Inc. (Nasdaq:PCSA), a PCS Affiliate of Sprint,
released its financial and operating results for its first fiscal
quarter ended Dec. 31, 2004.

Financial and operating highlights of the quarter include:

   -- Net loss for the quarter was $15.3 million, compared with
      net income of $173.0 million,  in the first fiscal quarter
      of 2004.

   -- EBITDA, earnings before interest, taxes, depreciation and    
      amortization, was $11.9 million compared with $11.8 million
      in the first fiscal quarter of 2004.

   -- Gross additions were 51,931 compared with 35,601 in the
      first fiscal quarter of 2004.

   -- Churn decreased to 2.72% from 3.10% in the first fiscal
      quarter of 2004.

   -- Net additions were 15,775 compared with 438 in the first
      fiscal quarter of 2004.

   -- Cash, cash equivalents and short-term investment securities
      increased to $110.0 million as of December 31, 2004 from
      $68.5 million at September 30, 2004.

Notable financial effects during the quarter ended Dec. 31, 2003,
included:

   -- A reduction to roaming revenues of approximately $0.9    
      million resulting from a correction in Sprint's billing
      system with respect to data-related inbound roaming
      revenues.

   -- A reduction of cost of service and roaming of $3.8 million
      related to a year-end settlement of 2003 Sprint service
      bureau fees and Sprint's decision to discontinue their
      billing system conversion.

   -- An increase of general and administrative expenses related
      to debt restructuring costs of $2.3 million.

   -- Net income was positively affected by a $184.1 million non-
      monetary gain from disposition of discontinued operations
      resulting from the elimination of the investment in iPCS.

                          Recent Events

On Dec. 8, 2004, it was disclosed that the Board of Directors
approved a definitive agreement under which AirGate PCS, Inc.,
will merge with and into a wholly-owned subsidiary of Alamosa
Holdings, Inc.  Under the terms of the definitive agreement,
AirGate shareholders will receive 2.87 Alamosa shares for every
share of AirGate common stock they hold.  Also, AirGate
shareholders will have the option to elect cash consideration in
place of Alamosa stock, up to an aggregate amount of $100 million,
with the per share cash consideration based on the average closing
price of Alamosa stock in the ten trading days prior to the
completion of the transaction multiplied by 2.87.

The shareholders of AirGate are scheduled to meet on Feb. 15,
2005, to vote on adoption of the merger agreement.

                      Management Comments

"AirGate is off to a great start for Fiscal 2005," said Thomas M.
Dougherty, president and chief executive officer of AirGate PCS.
"These improved results reflect the actions we have taken over the
past year to strengthen our financial position, improve our
operating efficiencies and increase the productivity of our sales
channels.  We will continue to build on this foundation and
leverage our operating expertise to enhance our competitive
position in the marketplace."

"This was the first quarter in which we added a material number of
wholesale subscribers," Mr. Dougherty continued.  "We added
approximately 23,000 wholesale subscribers during the quarter in
addition to approximately 16,000 net subscribers added through our
Sprint-branded business.  We are very pleased with these net
addition results especially considering that we were able to
achieve a CPGA approaching $300 during the quarter."

"The first quarter of Fiscal 2005 also marked a defining point for
the Company as we announced a definitive agreement under which
AirGate will merge with and into a wholly-owned subsidiary of
Alamosa Holdings, Inc," Mr. Dougherty continued.  "We believe that
this proposed combination creates the premier Sprint PCS Affiliate
serving a combined population of over 23 million residents and
approximately 1.3 million subscribers.  The increased scale of our
combined company offers significant opportunities for additional
operational and financial benefits, and will be a platform for
future growth and value creation for customers and shareholders
alike.  Together we will leverage the assets and operating
expertise of our companies, as well as the proven Sprint PCS
brand, and move forward aggressively to strengthen our leadership
position in the competitive wireless marketplace. With the
proposed transaction with Alamosa, we have many reasons to be
optimistic about the outlook for fiscal 2005. "

                        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)


AMRESCO COMMERCIAL: Puts Low-B Ratings on 3 Certificate Classes
---------------------------------------------------------------
AMRESCO Commercial Mortgage Funding I Corp.'s mortgage pass-
through certificates, series 1997-C1, are upgraded by Fitch
Ratings:

     -- $9.6 million class F to 'AAA' from 'AA+'.

These classes are affirmed by Fitch:

     -- $67.2 million class A-3 'AAA';
     -- Interest-only class X 'AAA';
     -- $24 million class B 'AAA';
     -- $12 million class C 'AAA';
     -- $21.6 million class D 'AAA';
     -- $26.4 million class E 'AAA';
     -- $31.2 million class G 'BBB-';
     -- $4.8 million class H 'BB+';
     -- $7.2 million class J 'B';
     -- $2.4 million class K 'B-'.

Fitch does not rate the $11.1 million class L certificates.

The upgrades are primarily the result of increased subordination
levels due to loan payoffs and amortization.  As of the January
2005 distribution date, the pool's aggregate principal balance has
been reduced by 54% to $217.4 million from $480.1 million at
issuance.

Realized losses to date total $938,463 or 0.20% of the original
principal balance.

Seven loans (14.3%) are in special servicing, including three 90
days delinquent loans (3.9%).  A foreclosure is in process for two
of these delinquent loans (3.08%), an office property in Salt Lake
City, Utah (1.6%) and an industrial property in Leominster,
Massachusetts (1.5%).  Additionally, a discounted payoff is
expected for the third loan (0.75%), secured by a retail property
in Tonawanda, New York (0.75%).  Four of the specially serviced
loans (10.4%) are cross- collateralized and secured by multifamily
properties in Tulsa, Oklahoma.  The loans, previously delinquent,
have been brought current and are expected to be returned to the
master servicer shortly.


BALTIMORE MARINE: Hires Penta Advisory as Accountants and Advisors
------------------------------------------------------------------
Alan M. Grochal, the Liquidating Agent for Baltimore Marine
Industries, Inc., asks the U.S. Bankruptcy Court for the District
of Maryland for authority to employ PENTA Advisory Services, LLC,
as his successor accountants and financial advisors effective Jan.
3, 2005.

PENTA is a spin-off from Navigant Consulting, Inc., the Debtor's
former accountants.  The Trustee does not wish to employ
additional professionals but, rather seeks to continually employ
previous members of Navigant whose employment has been transferred
to PENTA.

Michael Atkinson, Managing Director at PENTA, anticipates that his
Firm will perform the same services previously performed by
Navigant:

      a) advise the Liquidating Agent with respect to accounting,
         financial, and operational issues related to the estate
         and proposed actions of the Liquidating Agent and other
         parties;

      b) assist the Liquidating Agent in the preparation of the
         estate's tax returs and other tax liabilities;

      c) assist the Liquidating Agent in analyzing, and if
         appropriate, object to the claims of the Debtor's
         creditors and negotiate with such creditors;

      d) analyze preferential transfers and advise in preference
         litigation;

      e) advise and assist the Liquidating Agent in monetizing all
         nonliquidated assets that the estate has taken title to
         pursuant to the Plan;

      f) assist the Liquidating Agent in making distributions to
         holders of allowed claims pursuant to and in accordance
         with the terms of the Plan;

      g) assist the Liquidating Agent with analyzing the WARN act
         claims; and

      h) perform such other accounting, financial, and operating
         consulting services as may be required and are deemed to
         be in the interests of the estate in accordance with the
         Liquidating Agent's powers and duties as set forth in the
         Plan.

The current hourly billing rates of PENTA's professionals are:

   Designation                          Rate
   -----------                          ----

Managing Directors/Directors         $320 - $450
Principals                            260 -  330
Senior Engagement Managers            190 -  290
Consultants                           150 -  260
Analysts/IT Staff                     120 -  170
Administrative                           $80

To the best of the Liquidating Agent's knowlegde, PENTA is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.

Baltimore Marine Industries, Inc.'s main line of business is ship
repair. The Company filed for chapter 11 relief on June 11, 2003
(Bankr. Md. Case No. 03-80215).  Martin T. Fletcher, Esq., Cameron
J. Macdonald, Esq., and Dennis J. Shaffer, Esq., at Whiteford
Taylor & Preston L.L.P., represent the Debtor in its restructuring
efforts. When the Company filed for protection from its
creditors, it listed estimated debts and assets of over $10
million each.  The Court confirmed the Debtor's Joint Plan of
Liquidation on June 25, 2004, offering 36% recovery to General
Unsecured Creditors.


CASCADES INC: Keeps Profitability Despite Rise of Canadian Dollar
-----------------------------------------------------------------
Cascades Inc. (Symbol: CAS-TSX) reports net earnings of
$23 million or $16 million of net earnings excluding specific
items for the fiscal year ended Dec. 31, 2004.  This compares with
net earnings of $55 million or net earnings excluding specific
items of $16 million for the same period in 2003.  Sales increased
8.6% to $3.3 billion from $3 billion in 2003.
    
Commenting on the results, Mr. Alain Lemaire, President and Chief
Executive Officer stated: "Throughout 2004 we were faced with some
of the most challenging business conditions our industry has gone
through in recent memory.  However, Cascades was able to maintain
its level of earnings and cash flow despite the appreciation of
the Canadian dollar and the increased fibre and energy costs which
were only partly offset by higher selling prices.  Additional
volumes in the US resulting from recent acquisitions in our
packaging and tissue businesses and ongoing improvement in
production efficiencies have contributed significantly to our
ability to maintain this stability."

                  Business highlights for 2004

   -- Cascades maintains earnings and cash flow from operations
      level despite an 8% increase in the Canadian dollar;

   -- Increased integration (converting) through recently acquired
      Tissue and Packaging assets allowing Cascades to be closer
      to the end-user of its products;

   -- Focus on our core businesses of Packaging and Tissue with
      the decision to divest our distribution activities; and

   -- Cascades named amongst Canada's top 100 employers for the
      second consecutive year.

             Three-month period ended December 31, 2004

Sales increased by 11% during the fourth quarter of 2004,
amounting to $806 million compared with $727 million for the same
period last year.  The increase was due mainly to business
acquisitions realized over the course of the year. Higher prices
were mitigated by higher energy and fibre costs and by the impact
of an increase in the Canadian dollar exchange rate.  Operating
income amounted to $3 million for the period compared to $8
million achieved last year.

Net earnings for the quarter ended Dec. 31, 2004 amounted to $5
million  or $2 million of net earnings excluding specific items
compared to net earnings of $6 million  or a loss of $3 million of
excluding specific items for the same period in 2003.  The month
of December 2004 was particularly difficult as downtime was
extended to avoid building excess inventories.

During the fourth quarter of 2004, the Company recorded an
impairment charge of $18 million ($12 million after-tax) related
to the property, plant and equipment of its de-inked pulp mill
located in Cap-de-la-Madeleine, Quebec which was temporarily
closed in March 2003.  The Company has decided to permanently
close this facility.

                           Outlook

Mr. Alain Lemaire, President and Chief Executive Officer added:
"The last quarter was impacted by extended downtime in most of our
operating sectors, representing approximately 6% of our primary
mill quarterly capacity.  This downtime will reduce our inventory
levels going forward.  The increase of energy, raw material and
maintenance costs also impacted the results.  While some of our
markets remain very challenging, general economic conditions still
remain favourable, especially in North-America. However,
profitability going forward will continue to be sensitive to
selling prices and the level of the Canadian dollar.  Over the
course of the next few months our priorities will be to complete
the successful integration of recently acquired businesses while
applying strict cash flow management in order to further
deleverage our balance sheet."

                    Dividend on Common Shares

The Board of Cascades declared a quarterly dividend of $0.04 per
share to be paid on Mar. 17, 2005 to shareholders of record at the
close of business on Mar. 3, 2005.

                        About the Company

Cascades, Inc., manufactures packaging products, tissue paper and
specialized fine papers.  Internationally, Cascades employs 15,400
people and operates close to 150 modern and versatile operating
units located in Canada, the United States, France, England,
Germany and Sweden.  Cascades recycles more than two million tons
of paper and board annually, supplying the majority of its fibre
requirements.  Leading edge de-inking technology, sustained
research and development, and 40 years in recycling are all
distinctive strengths that enable Cascades to manufacture
innovative value-added products.  Cascades' common shares are
traded on the Toronto Stock Exchange under the ticker symbol CAS.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 15, 2004,
Moody's Investors Service downgraded Cascades Inc.'s senior
implied rating to Ba2.  The ratings were also downgraded on
Cascades, Inc.'s secured revolver, to Ba1 from Baa3, and on its
senior unsecured notes, to Ba3 from Ba1.


CASE FINANCIAL: Losses & Deficit Trigger Going Concern Doubt
------------------------------------------------------------
In their report dated December 19, 2004 on the financial
statements for the fiscal year ended September 30, 2004, Case
Financial, Inc.'s independent auditors -- Gumbiner Savett Inc. in
Santa Monica, California -- expressed substantial doubt about the
company's ability to continue as a going concern.  Case Financial
incurred a $2,578,438 net loss in the year ending Sept. 30, 2004,
and posted $3,127,190 net loss the year earlier.  There was an
accumulated deficit of $12,444,158 as of September 30, 2004, and
total liabilities exceeded total assets by $3,950,530 as of
September 30, 2004.  

"We have been experiencing cash flow problems and new management
is evaluating whether the overall business model is sustainable or
should be discontinued so we can pursue a different business
strategy," Case Financial said in a recent regulatory filing.   

Case Financial, Inc. provides pre-settlement and post-settlement
litigation funding services to attorneys (and, previously,
plaintiffs) involved in personal injury and other contingency
litigation, conducted primarily within the California courts.


CATHOLIC CHURCH: Spokane Wants CNA's Request to Lift Stay Denied
----------------------------------------------------------------
As previously reported, The Diocese of Spokane, by its own
account, faces over 125 claims by individuals who allege that they
were sexually abused as children by priests associated with the
Diocese.  Spokane has asserted defense and indemnity coverage
claims for certain of the sexual abuse claims under primary
general liability insurance policies allegedly issued to Spokane
by CNA between 1976 and 1977 and between 1979 and 1989.  CNA
consists of:

   (a) American Casualty Company of Reading,
   (b) Pennsylvania, Columbia Casualty Company,
   (c) Continental Insurance Company,
   (d) Pacific Insurance Company, and
   (e) The Glens Falls Insurance Company

With the exception of The Glens Falls Insurance Company, whose
policy specifically bars coverage for sexual abuse-related claims,
CNA has been funding Spokane's legal defense pursuant to a
reservation of rights and cost-sharing arrangement with certain of
Spokane's other alleged insurers.

Before the Petition Date, Spokane demanded that its insurers
settle many of the claims, waive coverage defenses, and accept
Spokane's position on all disputed matters.  CNA rejected the
unreasonable demands.

CNA asks Judge Williams to lift the automatic stay under Section
362(d)(1) of the Bankruptcy Code so it may continue the
Declaratory Judgment Action.

Charles R. Ekberg, Esq., at Lane Powell, PC, in Seattle,
Washington, asserts that lifting the automatic stay would promote
judicial economy.  Mr. Ekberg explains that the Spokane County
Superior Court is in the best position to hear and resolve the
coverage litigation in an economic manner and consistent with the
requirements and limitations of Article III and the Seventh
Amendment of the United States Constitution.

                             Objections

A. The Diocese of Spokane

Spokane asks Judge Williams to deny CNA's request to lift the
automatic stay.  On January 5, 2005, Spokane removed the lawsuit
Pacific Insurance Company, et al. v. Catholic Bishop of Spokane  
et al., pending in Spokane County Superior Court to the U.S.
Bankruptcy Court for the Eastern District of Washington, together
with 20 other state court actions involving over 50 plaintiffs.  
Shaun M. Cross, Esq., at Paine, Hamblen, Coffin, Brooke & Miller,
LLP, in Spokane, Washington, contends that Spokane's removal of
the CNA Declaratory Judgment Action renders CNA's request to lift
the stay moot.

Mr. Cross also tells Judge Williams that the factual assertions
contained in CNA's lift stay request are argumentative, present a
self-serving characterization of CNA's position regarding
insurance coverage, and are irrelevant to the issue of whether
cause exists for the Court to lift the automatic stay.

Mr. Cross relates that Patrick O'Donnell testified recently in
deposition that he advised his spiritual confessor many years ago
at the St. Thomas Seminary in Seattle of his attraction to young
boys.  Mr. Cross explains that Spokane was not aware that Fr.
O'Donnell had this discussion with his spiritual confessor until
his deposition was taken in 2004 -- long after the sexual abuse
lawsuits were initiated.  Furthermore, any communications made by
Fr. O'Donnell to his confessor were privileged under Washington
law at the time they were allegedly made.

Regarding the information and events surrounding the mediation
that occurred from November 1 to 4, 2004, Spokane disputes CNA's
allegation that it was not provided with sufficient information
prior to mediation.  Mr. Cross points out that Spokane provided
voluminous amounts of data to CNA as well as the requested
information prior to mediation.  After that, CNA took an
argumentative and unreasonable settlement position immediately
prior to, and during mediation.  CNA provided token settlement
authority to address multiple claims and unreasonably refused to
negotiate in further attempts to resolve the claims.

Spokane believes that the Bankruptcy Court is the proper forum for
the determination of all insurance coverage issues.  The issues
regarding insurance coverage will be intertwined in nearly every
aspect of Spokane's Chapter 11 case.  The Bankruptcy Court will
most efficiently determine determination of insurance coverage
issues.  The Bankruptcy Court and not the Superior Court must make
all determinations regarding property of Spokane's bankruptcy
estate.

Spokane does not object to the speedy prosecution of the CNA
Declaratory Judgment Action in the Bankruptcy Court.

B. Tort Committee

George E. Frasier, Esq., at Riddell Williams P.S., in Seattle,
Washington, informs the Court that Spokane's Official Committee of
Tort Claimants intends to intervene in the CNA Declaratory
Judgment and expects to file its pleadings for intervention by
March 1, 2005.

Mr. Frasier relates that the Tort Committee does not have first-
hand knowledge regarding factual assertions contained in CNA's
request and of CNA's Declaratory Judgment Action, which was filed
12 days after Spokane announced its intention to file a Chapter 11
petition.

The Tort Committee supports Spokane's objection to CNA's request
to lift the automatic stay.

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


COLTS 2005-1: S&P Places BB+ Rating on $10.575M Class E Notes
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to CoLTS 2005-1 Ltd./CoLTS 2005-1 Corp.'s $411,933,473
asset-backed, floating-rate notes series 2005-1.

The preliminary ratings are based on information as of
Feb. 8, 2005.  Subsequent information may result in the assignment
of final ratings that differ from the preliminary ratings.

The preliminary ratings reflects:

     -- the credit enhancement provided to each class of notes
        through the subordination of cash flows to the preference
        shares;

     -- the transaction's cash flow structure, which has been
        subjected to various stresses requested by Standard &
        Poor's; and

     -- the legal structure of the transaction, including the
        bankruptcy remoteness of the issuer.

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
              CoLTS 2005-1 Ltd./CoLTS 2005-1 Corp.
   
         Class             Rating            Amount ($)
         -----             ------            ----------
         A-1               AAA              279,191,000
         A-2 (revolver)    AAA               11,083,333
         B                 AA                23,266,000
         C                 A                 31,726,000
         D                 BBB               25,381,000
         E                 BB+               10,575,000
         Equity            N.R.              41,793,767
   
Note: Classes B through E will be able to defer interest.
      N.R. - Not rated.


CONSTRUX CONSTRUCTION: Wants to Use $1 Million of Cash Collateral
-----------------------------------------------------------------
Construx Construction of Illinois, Inc., asks the U.S. Bankruptcy
Court for the Central District of Illinois for authority to use up
to $1 million of cash collateral securing repayment of the
company's obligations to Central Bank of Illinois.

The Debtor needs access to cash collateral to continue its day-to-
day business operations.  Without the use of the cash collateral,
the estate will be irreparably harmed.

To protect the Lender's interest, the Debtor proposes to provide
Central Illinois Bank a security interest in all new accounts,
contract rights, chattel paper, documents, general intangibles,
equipment, furniture, and fixtures acquired by Construx after the
petition date.

Construx did not submit a budget showing how it proposed use the
cash collateral.

Headquartered in Springfield, Illinois, Construx Construction of
Illinois, Inc. -- http://www.construxofillinois.com/-- designs  
and builds commercial, residential and industrial structures.  The
Company filed for chapter 11 protection on Jan. 27, 2005 (Bankr.
C.D. Ill. Case No. 05-70329).  When the Debtor filed for
protection from its creditors, it estimated assets and debts at
$50 million.


CONSTRUX CONSTRUCTION: Taps Francis J. Giganti as General Counsel
-----------------------------------------------------------------
Construx Construction of Illinois, Inc., seeks authority from the
U.S. Bankruptcy Court for the Central District of Illinois to
retain Francis J. Giganti, Esq., of Springfield, Illinois, as its
bankruptcy counsel.

Mr. Giganti will render all necessary services required in this
bankruptcy proceeding.  He will charge the Debtor for legal
services at his current $175 hourly rate.

To the best of the Debtor's knowledge, Mr. Giganti doesn't hold
any interest materially adverse to the Company or its estate.

Headquartered in Springfield, Illinois, Construx Construction of
Illinois, Inc. -- http://www.construxofillinois.com/-- designs  
and builds commercial, residential and industrial structures.  The
Company filed for chapter 11 protection on Jan. 27, 2005 (Bankr.
C.D. Ill. Case No. 05-70329).  When the Debtor filed for
protection from its creditors, it estimated assets and debts at
$50 million.


CORNING INC: S&P Places Low-B Ratings on CreditWatch Positive
-------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB+' corporate
credit and its other ratings on Corning, New York-based Corning
Inc. on CreditWatch with positive implications.

"The CreditWatch listing, which we expect to resolve by late March
following meetings with the company, reflects sharply improving
credit measures driven by a conservative financial policy that has
been very focused on a stronger financial profile," said Standard
& Poor's credit analyst Robert Schulz.  "Our review will focus on
the company's business prospects and risks, especially in its LCD
segment, including evaluating how Corning's rebounding financial
profile would be affected either by ongoing, solid LCD growth and
the resulting investment needs or by an unexpectedly sharp
slowdown in demand.  We will also consider how a currently very
strong liquidity profile will evolve."

If we conclude that the company's various businesses should
continue to be viewed as average in the aggregate and that the
financial profile can be expected to attain and remain consistent
with an investment-grade rating in light of business risks, a
modest upgrade is possible.  Alternatively, we may conclude that
the visibility regarding LCD prospects in particular, but also
regarding fiber/cable and diesel, makes an upgrade premature, and
so we may affirm the current rating and revise the outlook to
positive.

Liquidity remains an important underpinning of the rating.  At
Dec. 31, 2004, Corning had around $1.8 billion in cash and
short-term investments, most of which were domestically held and
available, and an undrawn $2 billion revolving credit facility
that expires Aug. 5, 2005, but is expected to be replaced in the
spring of 2005.


COVANTA ENERGY: Wants Exclusive Period Stretched to June 15
-----------------------------------------------------------
By this motion, the three remaining Debtors -- Covanta Warren
Energy Resource Co., LP, Covanta Warren Holdings I, Inc., and
Covanta Warren Holdings II, Inc. -- ask the United States
Bankruptcy Court for the Southern District of New York to extend
their exclusive periods to:

    -- file a plan or plans of reorganization to June 15, 2005;
       and

    -- solicit acceptances of that plan to August 16, 2005.

The operations of all three Remaining Debtors relate to a waste-
to-energy facility located in Oxford Township, Warren County, New
Jersey.  The Remaining Debtors have been engaged in discussions
and negotiations with the Pollution Control Financing Authority of
Warren County for an extended period of time concerning a
potential restructuring of the parties' rights and obligations
under various agreements related to the operation of the Warren
Facility.  Those negotiations were in part precipitated by a 1997
federal Court of Appeals decision invalidating certain of the
State of New Jersey's waste-flow laws, which resulted in
significantly reduced revenues for the Warren Facility.

Since 1999, the State of New Jersey has been voluntarily making
debt service payments with respect to the project bonds issued to
finance construction of the Warren Facility, and Covanta Warren
Energy Resource has been operating the Warren Facility pursuant to
a letter agreement with the Pollution Control Authority
establishing the terms on which the Remaining Debtors have been
operating the Warren Facility.

In addition to their negotiations with the Pollution Control
Authority, the Remaining Debtors have been engaged in negotiations
with the Authority and Oxford Township concerning the fees paid by
the facility to Oxford Township, and it appears that the parties
have reached an agreement concerning a reduction in the amount of
those fees.

The Remaining Debtors are continuing to evaluate a restructuring
of the contractual arrangements governing their operation of the
Warren Facility.  Consistent with their business judgment and
their obligation to seek to maximized recoveries for creditors
generally, the Remaining Debtors are continuing to evaluate their
options for a plan, and, among other things:

    -- whether to litigate with counterparties to certain
       agreements with Covanta Warren;

    -- assume or reject one or more executory contracts related to
       the Warren Facility; or

    -- liquidate Covanta Warren Energy Resource.

Vincent E. Lazar, Esq., at Jenner & Block, LLP, in Chicago,
Illinois, points out that the Remaining Debtors need more time so
that they can continue their work toward achieving the most
favorable resolution of their cases.

"The Remaining Debtors are making good progress in these chapter
11 cases, and are not seeking an extension of time in order to
harass their creditors," Mr. Lazar says.

The Remaining Debtors' request for a further extension of the
exclusivity periods is merely a reflection of the fact that the
development, negotiation and confirmation of a viable set of plans
in cases of similar complexity entail considerable time and
effort.

Besides, Mr. Lazar continues, the 120-day extension will not
prejudice the legitimate interests of any creditor or equity
security holder, and will afford the parties the opportunity to
pursue to fruition the beneficial reorganization of the Remaining
Debtors.  Under these circumstances, the requested extension of
the Exclusive Periods fully comports with Section 1121(d) of the
Bankruptcy Code.

                           *     *     *

Judge Blackshear will convene a hearing today at 2:00 p.m., to
consider the Remaining Debtors' request.

Headquartered in Fairfield, New Jersey, Covanta Energy Corporation
-- http://www.covantaenergy.com/-- is a publicly traded holding  
company whose subsidiaries develop, own or operate power
generation facilities and water and wastewater facilities in the
United States and abroad.  The Company filed for Chapter 11
protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826).
Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary,
Gottlieb, Steen & Hamilton, represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed $3,280,378,000 in assets and
$3,031,462,000 in liabilities.  On March 10, 2004, Covanta Energy
Corporation and its core subsidiaries emerged from chapter 11 as a
wholly owned subsidiary of Danielson Holding Corporation.  Some of
Covanta's non-core subsidiaries have liquidated under separate
chapter 11 plans. (Covanta Bankruptcy News, Issue No. 74;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


CUES INC: Case Summary & 14 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: Cues, Inc.
        dba Russell's
        268 Odlin Road
        Bangor, Maine 04401

Bankruptcy Case No.: 05-10181

Type of Business: The Debtor operates Russell Entertainment
                  Center, a discount movie theater and billiards
                  parlor.

Chapter 11 Petition Date: February 6, 2005

Court: District of Maine (Bangor)

Debtor's Counsel: Peter D. Klein, Esq.
                  Stephen G. Morrell, Esq.
                  Eaton Peabody
                  PO Box 1210
                  Bangor, Maine 04402-1210
                  Tel: (207) 947-0111

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 14 Largest Unsecured Creditors:

    Entity                       Nature of Claim    Claim Amount
    ------                       ---------------    ------------
Miami North                      Personal property    $1,254,868
c/o Curtis Kimball, Esq.         as outlined in UCC
Rudman & Winchell                #2050001713119-10
PO Box 1401                      between EKSTM-C, Inc.
Bangor, ME 04402-1401            and Movie City
                                 Cinemas, Inc. as
                                 Debtors/Secured
                                 Value of Security:
                                 $1,000,000

Ms. Ruth Gray                    Loan (start up          $95,000
275 Fourth Street                investment)
Old Town, ME 04468

Lion's Gate Films                Trade Debt               $6,559
2700 Colorado Avenue, Suite 200  (movie rentals)
Santa Monica, CA 90404

Dead River                       Trade Debt               $6,000
PO Box 40                        (heating balance from
Brewer, ME 04412-0040            2003-2004 winter)

Bangor Hydro                     Trade Debt               $5,948
PO Box 11008                    (electric)
Lewiston, ME 04243-9559

Dreamworks Distribution          Trade Debt               $5,358
1000 Flower Street               (movie rentals)
Glendale, CA 91201

Miramax Films                    Trade Debt               $3,923
                                 (movie rentals)

Bangor Daily News                Trade Debt               $1,998
                                 (movie advertising)

New Market Films                 Trade Debt               $1,648
                                 (movie rentals)

New Line Films                   Trade Debt               $1,533
                                 (movie rentals)

Bangor Water District            Trade Debt               $1,471
                                 (water & sewer)

IDP Distribution                 Trade Debt                 $736
                                 (movie rentals)

DHL                              Trade Debt                 $525



Eye9d                            Trade Debt                 $400
                                 (promoter for live
                                 entertainment)


CROWN OIL: Case Summary & 8 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: Crown Oil & Petroleum Supplies, LLC
        100 15th Avenue, Second Floor
        South Milwaukee, Wisconsin 53172

Bankruptcy Case No.: 05-21384

Chapter 11 Petition Date: February 4, 2005

Court: Eastern District of Wisconsin (Milwaukee)

Judge: Susan V. Kelley

Debtor's Counsel: Mark L. Metz, Esq.
                  Reinhart Boerner Van Deuren s.c.
                  1000 North Water Street, Suite 2965
                  Milwaukee, WI 53202
                  Tel: 414-298-1000

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 8 Largest Unsecured Creditors:

   Entity                     Nature Of Claim       Claim Amount
   ------                     ---------------       ------------
Community Bank & Trust        Bank Loan               $3,100,000
604 North 8th St.
P.O. Box 1409
Sheboygan, WI 53082

GD Deal Holdings, LLC         Lease Payment             $210,000
953 Collett Avenue
Bowling Green, KY 42102

Kentucky Dept. of Revenue     Taxes                     $200,000
200 Fair Oaks Lane
Frankfort, KY 40620

Charles C. Parks Company      Trade debt                $150,000

Petroleum Perfection Services                            $47,000

Baker Energy                                             Unknown

Girkin Development, LLC       Lease Payment              Unknown

Tennessee Dept. of Revenue    Taxes                      Unknown


DANNY'S DIGGIN': Case Summary & 10 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Danny's Diggin' N Dozin', Inc.
        205 North Washington Street
        Bloomfield, Iowa 52537

Bankruptcy Case No.: 05-00596

Type of Business: The Debtor is a construction contractor in the
                  area of earthwork, grading, dozing, and digging.

Chapter 11 Petition Date: February 8, 2005

Court:  Southern District of Iowa (Des Moines)

Judge:  Lee M. Jackwig

Debtor's Counsel: Jerrold Wanek, Esq.
                  Garten & Wanek
                  835 Insurance Exchange Building
                  505 Fifth Avenue
                  Des Moines, Iowa 50309
                  Tel: (515) 243-1249
                  Fax: (515) 244-4471

Total Assets:   $647,675

Total Debts:  $2,099,953

Debtor's 10 Largest Unsecured Creditors:

    Entity                       Nature of Claim    Claim Amount
    ------                       ---------------    ------------
Libertyville Savings Bank        Value of Security:     $133,533
PO Box 744                       $486,425
Fairfield, IA 52556-0744

Komatsu Financial                Value of Security:      $40,000
PO Box 7049                      $60,000
Downers Grove, IL 60515-7049

CIT Equipment Finance - US       Value of Security:      $37,500
1540 West Fountainhead Parkway   $82,500
Tempe, AZ 85282

Hedrick Savings Bank             Value of Security:      $27,243
102 Main Street                  $18,750
Hedrick, IA 52563

Chem Gro of Houghton, Inc.                                $4,581
PO Box 76
Houghton, IA 52631

Pyramid Transportation                                    $2,775
308 4th Avenue Northeast
PO Box 391
Grand Meadow, MN 55936

Mid Country Machinery, Inc.                               $2,425
PO Box 1586
Fort Dodge, IA 50501

Walter Law Office                                         $1,523
PO Box 716
Ottomwa, IA 52501

Graber Services, Ltd.                                       $236
Highway 34 West
2098 220th Street
Lockridge, IA 52635

Iowa Telecom                                                $671
CMR Claims Department
PO Box 60770
Oklahoma City, OK 731146


DEL MONTE: Subsidiary Successfully Completes Refinancing
--------------------------------------------------------
Del Monte Foods Company (NYSE: DLM) disclosed that its wholly-
owned subsidiary Del Monte Corporation has completed its
previously announced plan to refinance a significant portion of
its outstanding indebtedness.  The refinancing included the
consummation of the Corporation's cash tender offer and consent
solicitation with respect to its outstanding 9-1/4% senior
subordinated notes due 2011, the Corporation's private placement
offering of $250 million principal amount of its 6-3/4% senior
subordinated notes due 2015  and the Corporation's consummation of
a new $950 million senior credit facility.

The Corporation used the proceeds from the sale of the New Notes
and borrowings under the New Credit Facility to fund the payment
of consideration and costs relating to the Offer and to repay
amounts outstanding under its previous credit facility.  The New
Credit Facility consists of a revolving credit facility of
$350,000,000 with a term of six years, a $450,000,000 term loan A
with a term of six years, and a $150,000,000 term loan B with a
term of seven years.

The Offer expired at 12:00 midnight, New York City time, on
Monday, Feb. 7, 2005.  As of the Expiration Time, $297,463,000
aggregate principal amount of Old Notes had been validly tendered
and not withdrawn, which represented approximately 99.15% of the
outstanding aggregate principal amount of the Old Notes.  The
Corporation has accepted for payment and paid for all Old Notes
validly tendered and not validly withdrawn on or prior to the
Expiration Time.

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.

                          *     *     *

As reported in the Troubled Company Reporter on Jan. 28 2005,
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.


DIMON INC: Posts $1.9 Million Net Loss in Third Quarter 2005
------------------------------------------------------------
DIMON Incorporated (NYSE: DMN) reported a net loss for the quarter
ended Dec. 31, 2004, of $1.9 million, compared to $3.0 million,
for the year earlier period.  The Company's underlying net loss
for the quarter, a non-GAAP measure that excludes market valuation
adjustments for derivative financial instruments, discontinued
operations, and non-recurring items, was $3.2 million, compared to
$5.1 million, on the same basis last year.

The excluded market valuation adjustments result from interest
rate swaps that must be marked-to-market each quarter, even though
they are being held to maturity.  In discussing the Company's
forecast and actual operating performance, DIMON management
consistently excludes these market valuation adjustments because
they do not reflect the Company's operating activities, are non-
cash in nature, and will reverse in their entirety (gains and
losses will offset each other) during the remaining term of the
associated interest rate swaps.  Management also excludes results
from discontinued operations, and gains and charges resulting from
unusual transactions or events that are not reflective of its
underlying operations, and that are not expected to recur.

DIMON's net income for the nine months ended Dec. 31, 2004, was
$17.1 million, compared to $16.5 million, for the year earlier
period.  Underlying net income for the nine months, which excludes
market valuation adjustments for derivative financial instruments,
discontinued operations, and non-recurring items, was $21.0
million, compared to $16.3 million, on the same basis last year.

                       Performance Summary

Sales and other operating revenues for the third quarter were
$366.4 million, compared to $284.6 million for the year earlier
quarter.  Increased shipments from South America, reflecting late
season shipments from substantially larger crops, were the largest
contributor to the sales increase.  Shipments from Europe and
Africa were also higher in comparison to the year earlier quarter.
Sales and other operating revenues for the nine months ended Dec.
31, 2004 were $992.2 million, compared to $847.2 million for the
year earlier period.

Gross profit as a percentage of sales and other operating revenues
for the third quarter was 10.7%, substantially unchanged from the
year earlier quarter.  For the nine months ended Dec. 31, 2004,
gross profit was 15.0% of revenues, compared to 16.6% for the year
earlier period.

Selling, general and administrative  expenses for the third
quarter were $32.0 million, up $3.0 million or 10.2% in comparison
to the year earlier quarter, primarily due to increased legal and
professional expenses.  SG&A expenses for the nine months ended
December 31, 2004 were $92.3 million, down $0.9 million, or 1.0%
in comparison to the year earlier period.

Interest expense for the third quarter increased by $2.0 million,
or 17.9%, in comparison to the year earlier quarter, reflecting a
combination of additional borrowing and increased effective
interest rates.  At Dec. 31, 2004, total debt net of cash was
$627.6 million, up $74.2 million, or 13.4%, in comparison to Dec.
31, 2003.  The increase primarily reflects a larger financing
requirement for trade accounts receivable resulting from increased
sales for the quarter, and for inventories committed to customers.
DIMON's uncommitted inventories remain at a comfortable level.

                             Outlook

Brian J. Harker, Chairman and Chief Executive Officer, stated,
"Our third quarter results benefited from late season shipments
from substantially larger South American crops, as the shift in
global sourcing for leaf tobacco we have experienced over the past
eighteen months has now stabilized.  Although delayed by weather
conditions, we have begun receiving initial deliveries of the
current season Brazilian crop from growers, and we are encouraged
by the general quality and quantity of leaf expected to be
available to the Company from this origin.  While a combination of
increased grower prices and the relative weakness of the U.S.
dollar will raise costs in Brazil, we expect to gain production
efficiencies from an additional new processing line constructed
during the off-season.

"DIMON also made further progress in our global restructuring
efforts.  Although we continue to expect charges associated with
the efforts to approximate $7 million, some portion may not be
recognized until the next fiscal year.  Reflecting our caution
relating to the delayed Brazilian crop, we now expect the
Company's underlying net income to be between $0.43 and $0.48 per
basic share for the fiscal year ending March 31, 2005.  Our
current outlook excludes estimated restructuring charges, any
effects from market valuation adjustments for derivatives, results
from discontinued operations, and other non-recurring items."

The timing and magnitude of fluctuations in the market valuation
adjustments for derivative financial instruments (interest rate
swaps) are driven primarily by often-volatile market expectations
for changes in interest rates, and are inherently unpredictable.
Because these adjustments are a component of net income prepared
in accordance with generally accepted accounting principles,
management is unable to provide forward looking earnings guidance
on that basis.

DIMON's Annual Reports on Form 10-K/A for the fiscal year ended
March 31, 2004, and other filings with the Securities and Exchange
Commission (the "SEC") which are available at the SEC's Internet
site (http://www.sec.gov).

In connection with the proposed merger of DIMON and Standard
Commercial Corporation, the parties have filed a joint proxy
statement/prospectus and other relevant documents concerning the
merger with the U.S. Securities and Exchange Commission.
Stockholders are urged to read the proxy statement/prospectus
regarding the proposed transaction AND OTHER RELEVANT DOCUMENTS
FILED WITH THE SEC because THEY will contain important
information.  Interested parties may obtain a free copy of the
proxy statement/prospectus, as well as other filings containing
information about DIMON and Standard Commercial without charge at
the SEC's Internet site (http://www.sec.gov). Copies of the proxy  
statement/prospectus and the filings with the SEC that are
incorporated by reference in the proxy statement/prospectus can
also be obtained, without charge, by directing a request to DIMON
Incorporated, 512 Bridge Street, Post Office Box 681, Danville,
Virginia 23543-0681, Attention: Investor Relations, (434) 792
7511.

The respective directors and executive officers of DIMON and
Standard Commercial and other persons may be deemed to be
"participants" in the solicitation of proxies in respect of the
proposed merger.  Information regarding DIMON's directors and
executive officers is available in its proxy statement filed with
the SEC on July 13, 2004.  Other information regarding the
participants in the proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the proxy statement/prospectus and other
relevant materials to be filed with the SEC when they become
available.

DIMON Incorporated -- http://www.dimon.com/-- is the world's  
second largest dealer of leaf tobacco with operations in more than
30 countries.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 4, 2004,
Moody's Investors Service confirmed the ratings of DIMON
Incorporated and assigned a stable outlook, following the waivers
and amendment granted by bondholders and banks of the company's
technical defaults on its bonds and bank facilities.  This
concludes the review initiated on Oct. 13, 2004.

Ratings confirmed:

   * Issuer rating at B2
   * Senior implied rating at B1
   * $200 million senior notes due 2011 at B1
   * $125 million senior notes due 2013 at B1

The ratings confirmation reflects the stabilization of liquidity
brought by the waivers and amendments.  On Oct. 11, 2004, DIMON
sought consent of waivers of previous defaults under the
limitation on restricted payments covenant under the indentures
related to the payment of dividends to holders of the company's
common stock, and investments in a majority-owned subsidiary.
Dividend payments have been made since December 2003 in violation
of the indentures as a result of an apparent misunderstanding by
company's management of the restrictions under the indentures.  On
Nov. 1, 2004, DIMON obtained a waiver of the defaults under
all debt, and an amendment under the indenture allowing it to make
dividend payments not to exceed $3.525 million in any quarter
without regard to a consolidated interest coverage ratio test
until June 30, 2005.


DONNKENNY INC: Files Joint Plan of Reorganization in New York
-------------------------------------------------------------
Donnkenny, Inc., and its debtor-affiliates filed with the U.S.
Bankruptcy Court for the Southern District of New York on
February 7, 2004, their Proposed Plan of Reorganization and
Disclosure Statement.

                       Terms of the Plan

The Plan contemplates that the Debtors' operations will cease on
the Plan's effective date.

The Plan intends to substantively consolidate all debtor entities.  
Substantive consolidation refers to combining the assets and
liabilities of two or more related debtors into a single pool to
pay creditors.

The CIT Group/Commercial Services, Inc., and other prepetition
lenders under the 1999 Revolving Finance Agreement, will receive a
pro-rata share of the proceeds of the asset sale.  

Holders of other secured claims will receive either the collateral
securing the claim or cash payment over time covering both
principal amount of the claim and interest.  If the Debtors will
opt to pay over time, the Secured Claim Holder will retain the
liens on the collateral.

Holders of general unsecured claims take nothing under the Plan.  
However, the Credit Agreement Lenders may elect to set aside an
amount from the sale proceeds to be distributed among the General
Unsecured Claim Holders.  

On the effective date of the Plan:

   (1) intercompany claims and equity interests will be cancelled;
       and

   (2) a Plan Administrator will be appointed to implement the
       Plan.  

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

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

Headquartered in New York City, Donnkenny, Inc., and its debtor-
affiliates design, import, and market broad lines of moderately
and better priced women's clothing.  The Debtors filed for chapter
11 protection on Feb. 7, 2005 (Bankr. S.D.N.Y. Case Nos. 05-10712
through 05-10716).  Bonnie Steingart, Esq., Kalman Ochs, Esq., and
Christopher R. Bryant, Esq., at Fried, Frank, Harris, Shriver &
Jacobson LLP represent the Debtors in their restructuring efforts.  
When the Debtors filed for protection from their creditors, they
listed $45,670,000 in total assets and $100,100,000 in total
debts.


DONNKENNY INC: Secures $60 Million DIP Loan from CIT Group
----------------------------------------------------------
Donnkenny, Inc., and its debtor-affiliates (OTC Bulletin Board:
DNKY) has secured a new $60 million debtor-in-possession credit
facility with its current lenders CIT Group/Commercial Services,
Inc., and Wells Fargo Century Inc. and a factoring agreement with
CIT, both of which are subject to Bankruptcy Court approval.

The DIP Agreement limit of $60 million is inclusive of pre-
petition and post-petition obligations.  The Company expects that
the DIP Agreement will allow the Company to finance its working
capital needs and allow business operations to continue as normal
during the sales process, including meeting obligations to
employees, vendors and other suppliers of goods and services.

                         363 Asset Sale

The Debtors have entered into an asset purchase agreement with
Donn K Acquisition LLC, a company affiliated with Pacific Alliance
LLC, to sell certain of its assets including its Nicole Miller(R)
and Pierre Cardin(R) Licensed Products for approximately $16
million.  The Agreement provides for the Company's core businesses
to be acquired pursuant to section 363 of the U.S. Bankruptcy
Code.  On Feb. 4, 2005, Donn K provided the Debtors with a
$500,000 deposit for the assets.

The Debtors ask the U.S. Bankruptcy Court for the Southern
District of New York to:

   -- approve and authorize the proposed sale, assumption and
      assignment of the Assets provided in the Asset Purchase    
      Agreement;

   -- approve the bidding procedures in connection with the
      Debtors' solicitation of higher and better bids than the bid
      reflected in the Asset Purchase Agreement;

   -- schedule an auction;

   -- approve the form and manner of notice of the proposed sale
      and bidding procedures; and

   -- authorize the reimbursement of up to $550,000, and the
      payment of a $625,000 Termination Fee to Donn K.

The Debtors tell the Court that the Asset Purchase Agreement was
negotiated and executed in good faith with Donn K Acquisition, and
was determined to be the best and highest offer most likely to
close.

Daniel H. Levy, Chairman and CEO of the Company said, "We believe
that the relationship with Donn K Acquisition and Pacific Alliance
and the ability to utilize their systems, technology and expertise
will offer Donnkenny an added competitive advantage.  Their
understanding of the business, their experience and the deep
relationships that Pacific Alliance brings to our business will
benefit our customers and employees, and suppliers.

Mr. Levy added, "We believe that the ongoing support from our
existing lenders through our DIP Agreement will help allow us to
continue business operations as normal as we move forward with the
sale process.  We will do everything possible to try to ensure
that there is no disruption in the quality of service we provide
to our customers during this transition period and that our
obligations to employees, vendors and others are met."

                        Stock Termination

The Company has filed a Form 15 with the Securities and Exchange
Commission to terminate registration of the Company's common stock
under the Securities Exchange Act of 1934, as amended.  Upon the
filing of the Form 15, the Company's obligation to file certain
reports and forms under the 1934 Act including, but not limited to
Forms 10-K, 10-Q and 8-K, will be terminated.

The Company's Chapter 11 petition was filed in the United States
Bankruptcy Court for the Southern District of New York.  While
there can be no assurances, the Bankruptcy Court supervision of
the 363 sale approval process is expected to be completed within
sixty days.

Headquartered in New York City, Donnkenny, Inc., and its debtor-
affiliates design, import, and market broad lines of moderately
and better priced women's clothing.  The Debtors filed for chapter
11 protection on Feb. 7, 2005 (Bankr. S.D.N.Y. Case No. 05-10712
through 05-10716).  Bonnie Steingart, Esq., Kalman Ochs, Esq., and
Christopher R. Bryant, Esq., at Fried, Frank, Harris, Shriver &
Jacobson LLP, represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they listed $45,670,000 in total assets and
$100,100,000 in total debts.


EAGLE PICHER: Poor Liquidity Cues S&P to Pare Credit Rating to B-
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
ratings on Eagle Picher, Inc., and Eagle Picher Holdings, Inc., to
'B-' from 'B+', and left them on CreditWatch, where they were
placed on Dec. 28, 2004.  Other ratings were also lowered and
remained on CreditWatch.  At Nov. 30, 2004, the Phoenix,
Arizona-based industrial manufacturer had about $426 million of
total debt outstanding.

"The downgrade reflects the company's poor liquidity and operating
prospects because of heavy exposure to the weak auto supplier
market, including uncertain prospects for production levels in
2005," said Standard & Poor's credit analyst John Sico.  "The
company continues to have covenant issues and is in violation of
certain of its financial covenants under its bank credit agreement
and accounts receivable securitization program, as a result of the
lower-than-expected profitability in the auto supplier market and
in its defense and space operations."

Eagle Picher announced that its CEO has resigned, and the company
has hired a new chief development officer, with extensive
restructuring experience, to assist it in evaluating strategic
alternatives and potential debt reduction through divestitures of
one or more business units.  Standard & Poor's views this as a
risk because of the potential for debt reduction via exchange
offers or other actions that could impair bondholders.

Eagle Picher provides products to the automotive, aerospace,
defense, telecommunications, and pharmaceutical markets.


ENRON CORP: Court Approves Allocation of Reserved Funds
-------------------------------------------------------
As reported in the Troubled Company Reporter on Nov. 22, 2004,
Enron Corporation and its debtor-affiliates asked the U.S.
Bankruptcy Court for the Southern District of New York to approve
their proposed allocation of about $5,500,000,000 of Reserved
Funds among 139 entities.

Throughout the course of the Debtors' bankruptcy cases, the Court
authorized the Debtors to sell or otherwise dispose of assets they
owned, and in some cases, those owned by non-debtors.  Brian S.
Rosen, Esq., at Weil, Gotshal & Manges, LLP, in New York, relates
that in connection with the sale, settlement, or other disposition
of the assets, claims, or contracts, the Court entered individual
orders approving the disposition.

The proceeds received under each Sale or Settlement Order, were
often reserved, escrowed, or otherwise segregated pending either
a further Court order or an agreement between the Debtors and the
Official Committee of Unsecured Creditors providing for the
disposition of the Reserved Funds.

The Reserved Funds comprise the primary source of funding for
distributions to creditors pursuant to the Debtors' confirmed
Plan. The Confirmation Order authorizes the Debtors to take
actions necessary to implement the Plan and to distribute the
Reserved Funds in accordance with the Plan. The Plan addresses
the distribution of Reserved Funds and directs the Debtors to
file one or more motions with the Court to determine the
allocation of proceeds reserved pursuant to a Sale or Settlement
Order.

The Reserved Funds will be allocated among the Reorganized Debtors
or any of the Enron Affiliates designated, free and clear of all
liens and in accordance with Section 1141 of the Bankruptcy Code,
and be subject to distribution in accordance with the provisions
of the Plan.

                          *     *     *

Judge Gonzalez grants the Debtors' proposed allocation except as
to the allocation of proceeds from that certain sale of coal-
related assets to Cline Resources and Development Company.

Judge Gonzalez will conduct a hearing at 10:00 a.m., on March 3,
2005, or as soon as counsel may be heard with respect to the
allocation for the Cline Transaction Proceeds.

For allocations made subsequent to September 30, 2004, which are
not otherwise included in the Proposed Allocation, or in the
event the Debtors have overlooked a Sale or Settlement Order that
should have been included, the Court authorizes the Debtors to
file notices of proposed allocation.  Any allocation of Reserved
Funds pursuant to a Notice of Proposed Allocation served in
accordance with the Case Management Order will be approved.  The
Reserved Funds allocated will vest in the designated Reorganized
Debtor or any of its affiliates, free and clear of all liens and
in accordance with Section 1141 of the Bankruptcy Code.

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

Enron filed for chapter 11 protection on December 2, 2001 (Bankr.
S.D.N.Y. Case No. 01-16033). Judge Gonzalez confirmed the
Company's Modified Fifth Amended Plan on July 15, 2004, and
numerous appeals followed. The Confirmed Plan took effect on
Nov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen,
Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in
their restructuring efforts. (Enron Bankruptcy News, Issue No.
135; Bankruptcy Creditors' Service, Inc., 15/945-7000)


FEDERAL-MOGUL: U.K. Administrators Object to Plan Confirmation
--------------------------------------------------------------
Under the absolute priority rule, creditors' claims take
precedence over shareholders' claims in the event of a liquidation
or reorganization.  In behalf of the officials administering the
insolvency proceedings of Federal-Mogul Corporation's U.K.
debtor-affiliates, Christopher S. Sontchi, Esq., at Ashby &
Geddes, in Wilmington, Delaware, complains that the chapter 11
plan unfairly treats the U.K. Debtors' creditors thereby violating
the absolute priority rule.

In contrast to the U.S. Debtors, the unsecured creditors of the
U.K. Debtors -- who would have received a far greater percentage
recovery than creditors of the U.S. Debtors in liquidation -- will
receive comparatively less favorable treatment under the Plan.  
Certain unsecured creditors of the U.K. Debtors that did not
guarantee the Debtors' Notes will receive only pennies on the
dollar under the Plan.

Mr. Sontchi relates that under the Plan, U.S. pensions are fully
funded while U.K. pension schemes receive only a minimal payment.
There is also an unjustified disparity of treatment between U.S.
and U.K. claimants in the Asbestos Personal Injury Trust
Distribution Procedures.

According to Mr. Sontchi, the reorganization or liquidation of the
U.K. Debtors cannot be effected though Chapter 11 cases alone.  
Rather, the Plan must be enforceable in the U.K. with respect to
the U.K. Debtors and their creditors with claims arising outside
the United States.  In a recent decision of the High Court of
Justice in London, Justice David Richards indicates, "absent a
creditor's agreement to be bound, this can only be achieved by the
collective mechanisms under U.K. law provided by Schemes or CVA."

The U.K. Court also directed that the U.K. Administrators should
not promote the Schemes of Arrangements or Company Voluntary
Arrangements, or call any meeting of creditors for the purpose of
directing the promotion of the Schemes or CVAs without further
order of the U.K. Court.  The U.K. Court also gave the
Administrators liberty to oppose confirmation of the Plan and, in
the event the Plan is confirmed over the U.K. Administrators'
objection, to secure limitations to any injunctions to be made by
the Bankruptcy Court so that they do not apply to the U.K. Debtors
and their creditors.

"Anticipating that the Administrators would be unable, consistent
with their duties under U.K. law, to promote Schemes or CVAs, the
Plan Proponents have included in the Plan several purported
'alternatives' for enforcing the Plan with respect to the U.K.
Debtors.  [N]ot only are these alternatives themselves
fundamentally unfair and proposed in bad faith, but also, as
indicated in the U.K. Judgment, they are inconsistent with U.K.
law and are virtually certain not to occur."  Therefore, Mr.
Sontchi asserts that the Plan is not feasible and cannot be
confirmed pursuant to Section 1129(a)(11) of the Bankruptcy Code.

Accordingly, the U.K. Administrators assert that confirmation of
the Plan must be denied.

                           *     *     *

It is the understanding of the Plan Proponents that the
Administrators' objection includes the views of the Trustees of
the T&N Pension Scheme as well as the views of certain U.K.
asbestos claimants, and the Plan Proponents therefore regard it as
an objection filed on behalf of the Administrators, the Trustees
of the T&N Pension Scheme, and certain U.K. asbestos claimants.  
In a letter sent to Judge Lyons in December 2004 regarding the
status of objections to confirmation of the Plan, James F. Conlan,
Esq., at Sidley Austin Brown & Wood LLP, in Chicago, Illinois,
relates that the parties are discussing the issues regarding the
propriety and enforceability of the Plan.  The Plan Proponents
hope that certain of the issues will be resolved directly or
indirectly by the estimation proceedings, as well as the
inter-court communication process.  In addition, certain of the
issues may be addressed by further amendments to the Plan
following the estimation proceedings.

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


FEDERAL-MOGUL: Points Out Flaws in FAIR Act Draft
-------------------------------------------------
In a statement delivered to all U.S. Senators, Federal-Mogul
Corporation (OTC Bulletin Board: FDMLQ.OB) and the Official
Committee of Unsecured Creditors of Federal-Mogul outlined a
series of flaws in, and reiterated opposition to, the discussion
draft of the Fairness in Asbestos Injury Resolution (FAIR) Act of
2005 as introduced into the Congressional Record on Feb. 7 by
Senator Arlen Specter -- R-PA.

The statement described the inherently flawed and unfair nature of
the legislation's payment allocations for Tier I -- companies
presently in bankruptcy -- and other infirmities.  While more than
two-thirds of present and future true asbestos claims are from
individuals exposed to asbestos by defendants in the building and
construction trades -- an industry sector that includes, among
others, the top eight Tier I defendants -- Tier I participants in
the national fund would provide a mere six percent of payments.   
This bailout places the solvency of the national asbestos fund at
risk.  The statement explained an alternative analyzed by the
financial advisor to the Creditors Committee that could provide
approximately $12 billion in additional funding for the national
trust if Tier I companies were permitted to complete their
bankruptcy reorganization and have their liability addressed in a
bankruptcy plan.  This bankruptcy process would correctly transfer
up to $12 billion from shareholders and other stakeholders of
certain Tier I entities to the national trust and, thereby, to
victims of asbestos exposure.

While Federal-Mogul and the Creditors Committee support efforts to
reform the asbestos litigation crisis, they cannot support trust
fund legislation that would require Federal-Mogul to pay more than
its fair share while providing a bailout to companies with the
greatest liability.  The statement outlined a number of additional
shortcomings in current draft, including:

   (1) the likelihood that the FAIR Act's payment structure would
       drive additional companies into bankruptcy;

   (2) the unfair, and potentially unconstitutional, stripping
       away of insurance assets that will cause protracted
       litigation and cause additional uncertainty for victims;

   (3) joint and several liability provisions that create
       escalating and uncertain payments for business
       participants;

   (4) sunset and reversion language that leaves companies exposed
       to the tort system without any safeguards restricting venue
       or providing standard medical criteria; and

   (5) the disproportionately high payment level imposed on
       Federal-Mogul through reliance on a formula that is
       improperly based on revenue rather than liability.

Federal-Mogul and the Creditors Committee, as they have done in
the past, again urged the U.S. Senate to consider alternative
legislation establishing standardized medical criteria as a more
equitable solution to the asbestos litigation crisis.

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.


FIDELITY NATIONAL: S&P Assigns BB Corp. Credit & Sr. Sec. Ratings
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' corporate
credit and senior secured ratings on Jacksonville Florida-based
Fidelity National Information Services, Inc. -- FIS.  FIS is a
subsidiary of Fidelity National Financial, Inc. -- FNF --
(BBB/Watch Neg/--).  The outlook is stable.

"The ratings on FIS reflect its historically aggressive growth
strategy, coupled with the heavy debt burden associated with its
leveraged recapitalization," said Standard & Poor's credit analyst
Philip Schrank.  Ratings are supported by a leading niche market
position, a stable recurring revenue base, and good cash-flow
generation.  With pro forma revenues exceeding $2.7 billion, FIS
provides processing and information services to the financial
services and real estate industries.  While recent operating
performance has been good, with operating margins exceeding 20%,
the company has grown rapidly through acquisitions, and has yet to
demonstrate a sustained track record of performance.

Standard & Poor's expects acquisitions to remain an integral part
of FIS' growth strategy, albeit at a more moderate pace. Pro forma
total debt to EBITDA is in the area of 4.5x range. Capital
expenditures are moderate, and the company's good free-cash-flow
generation is expected to be used to reduce debt levels over time.

Analytically, Standard & Poor's has attributed little credit
support by the parent company, FNF.  FIS' credit facilities are
not guaranteed by its parent, and there are no cross default
provisions existing within FNF's existing debt.  FNF plans to sell
a 25% equity stake in FIS to private equity holders.  Proceeds
from the drawdown of the credit facilities will be used for a
leveraged recapitalization of FIS. Under the recapitalization
plan, FIS will pay a dividend of $2.7 billion to FNF (which will
in turn pay a special cash dividend to FNF shareholders).


FLEXTRONICS: Completes Transfer of Nortel's Montreal Operations
---------------------------------------------------------------
Flextronics (Nasdaq: FLEX) and Nortel Networks (NYSE: NT; TSX)
successfully completed the transfer of the manufacturing
operations and related assets including product integration,
testing, repair and logistics operations of Nortel's Systems House
in Montreal to Flextronics, as part of a previously announced
agreement.

"We are thrilled to welcome this world-class workforce with
extensive industry experience," said Michael Marks, Flextronics'
Chief Executive Officer.  "This represents a significant increase
in our complex, multi-technology telecom and network capabilities.
Coupled with the optical design resources that we acquired last
November, we have further diversified our product mix and
strengthened our position as an end-to-end solutions provider in
the telecom market."

"The successful transition of these operations to Flextronics is
an important milestone," said Sue Spradley, president, Global
Operations, Nortel.  "This step moves us closer to completing the
journey we began five years ago to divest substantially all of our
manufacturing activities in order to focus our resources on those
areas that offer Nortel true competitive differentiation.  Those
areas include the introduction of new products and the deployment,
network integration and support of complex, multi-technology
network solutions."

Both companies are working towards closing the balance of the
agreement in the first half of 2005.  This is subject to the
implementation of systems and processes and to completion of the
required information and consultation processes with relevant
employee representatives.

                         About Nortel

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

                        About the Company

Headquartered in Singapore (Singapore Reg. No. 199002645H),
Flextronics -- http://flextronics.com/-- is the leading  
Electronics Manufacturing Services (EMS) provider focused on
delivering innovative design and manufacturing services to
technology companies. With fiscal year 2004 revenues of USD$14.5
billion, Flextronics is a major global operating company that
helps customers design, build, ship, and service electronics
products through a network of facilities in 32 countries on five
continents. This global presence provides customers with complete
design, engineering, and manufacturing resources that are
vertically integrated with component capabilities to optimize
their operations by lowering their costs and reducing their time
to market.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 16, 2004,
Moody's Investors Service assigned a Ba2 rating to Flextronics
International Ltd.'s new $500 million 6.25% senior subordinated
notes, due 2014.  At the same time, the company was assigned a
liquidity rating of SGL-1, reflecting Flextronics' significant
on-hand liquidity, unfettered access to the sizeable $1.1 billion
revolver and the expectation for generating moderately positive
free cash flow (pre-Nortel payments) over the next twelve months.


FRIEDMAN'S: U.S. Trustee Appoints 9-Member Creditors Committee
--------------------------------------------------------------
The United States Trustee for Region 21 appointed nine creditors
to serve on an Official Committee of Unsecured Creditors in
Friedman's Inc. and its debtor-affiliates' chapter 11 cases:

      1. Tache USA Inc.
         Attn: Marc Moskoviz/Victor Weinman
         44-40 11th Street
         Long Island City, New York 11101

      2. Simon Property Group LP
         Attn: Ronald M. Tucker, Esq.
         115 W. Washington Street
         Indianapolis, Indiana 46204
      
      3. M. Fabrikant & Sons
         Attn: Michael Shaffet/Sheldon Ginsberg
         One Rockefeller Plaza
         New York, New York 10020

      4. Rosy Blue, Inc.
         Attn: Nirav Dalal/Ragin Mehta
         529 Fifth Avenue
         New York, New York 10017

      5. Kensib, Inc. dba Media Solutions
         Attn: Marilee Coughlin/Patricia Sibley
         3715 Northside Parkway
         100 Northcreek, Suite 250
         Atlanta, Georgia 30327

      6. Alston & Bird LLP
         Attn: Dennis J. Connolly, Esq.
         1201 W. Peachtree Street      
         Atlanta, Georgia 30309-3424

      7. PAJ, Inc.
         Attn: Karen Guest
         2930 N. Stemmons Fairway
         Dallas, Texas 75247
   
      8. Sumit Diamond Corporation
         Attn: Ken Fogal/Robert Olonoff
         592 Fifth Avenue, 4th Floor
         New York, New York 10036

      9. KIP Division of OTC International, Ltd.
         Attn: Lee Rothlein
         3100 47th Avenue, 5th Floor
         Long Island City, New York 11101

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

Headquartered in Savannah, Georgia, Friedman's Inc. --
http://www.friedmans.com/-- is the parent company of a group of  
companies that operate fine jewelry stores located in strip
centers and regional malls in the southeastern United States.  The
Company and its affiliates filed for chapter 11 protection on Jan.
14, 2005 (Bankr. S.D. Ga. Case No. 05-40129).  John W. Butler,
Jr., Esq., George N. Panagakis, Esq., Timothy P. Olson, Esq., and
Alexa N. Paliwal, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP represent the Debtors in their restructuring efforts.  When
the Debtor filed for protection from its creditors it listed
$395,897,000 in total assets and $215,751,000 in total debts.


FRIEDMAN'S: Committee Retains Ellis Painter as Local Counsel
------------------------------------------------------------
The Official Committee of Unsecured Creditors of Friedman's Inc.
and its debtor-affiliates asks the U.S. Bankruptcy Court for the
Southern District of Georgia, Savannah Division, for authority to
hire Ellis, Painter, Ratterree & Adams LLP as its local counsel.

Ellis Painter will:

     a) assist & advise the Committee in its consultation with the
        Debtors relative to the administration of these cases;

     b) attend meetings and negotiate with the representatives of
        the Debtors and other parties-in-interest;

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

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

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

     f) take all necessary action to protect and preserve the
        interests of the Committee, including:
  
              i) the prosecution of actions on its behalf;

             ii) negotiations concerning all litigation in which
                 the Debtors are involved; and

            iii) review and analyze claims filed against the
                 Debtors' estates;

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

     h) appear before the Courts and the U.S. Trustee to protect
        the interests of the Committee; and

     i) perform all other necessary legal services in these cases.
     
David W. Adams, Esq., a partner at Ellis Painter, discloses his
Firm's professionals' hourly billing rates:

          Designation                      Rate       
          -----------                      ----
          Partner/Counsel               $220 - $250
          Associate                      150 -  185
          Paralegal/Legal Assistant       75 -  110

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

Headquartered in Savannah, Georgia, Friedman's Inc. --
http://www.friedmans.com/-- is the parent company of a group of  
companies that operate fine jewelry stores located in strip
centers and regional malls in the southeastern United States.  The
Company and its affiliates filed for chapter 11 protection on Jan.
14, 2005 (Bankr. S.D. Ga. Case No. 05-40129).  John W. Butler,
Jr., Esq., George N. Panagakis, Esq., Timothy P. Olson, Esq., and
Alexa N. Paliwal, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP represent the Debtors in their restructuring efforts.  When
the Debtor filed for protection from its creditors it listed
$395,897,000 in total assets and $215,751,000 in total debts.


FRIENDS HOSPITAL: Moody's Affirms B2 Bond Rating After Review
-------------------------------------------------------------
Moody's Investors Service has affirmed the B2 bond rating for
Friend's Hospital (PA) and removed the rating from Watchlist where
it was placed for potential downgrade on January 12, 2005.  We are
maintaining the negative outlook on the bonds.

This action affects approximately $7.5 million of outstanding
Series 1993 bonds issued through the Philadelphia Hospitals and
Higher Education Facilities Authority.  The Series 1993 bonds are
secured by a pledge of gross revenues only.

The affirmation reflects a recent increase in cash to a level we
believe is adequate to make near-term debt payments and expected
operating improvement over the next year from staffing initiatives
and changes in Medicare reimbursement.  Nevertheless, the negative
outlook reflects the fact that operating improvement is not yet
evident in financial results and the absence of a track record of
sustaining better operations.

The hospital faces challenges associated with:

   1) a still weak liquidity position, a risky investment
      allocation and increasing capital spending;

   2) competition that has contributed to erratic volumes and
      higher labor costs;

   3) a negative operating cashflow, even with recent improvement;
      and

   4) a high dependency on Medicaid funding and several other
      state funding sources that are subject to annual
      allocations.

We expect to reconsider the outlook when the hospital demonstrates
expected operating improvement and an ability to maintain higher
cash levels.

Liquidity Still Weak Although Improving:

After reaching a very low point in liquidity in mid-2004, there is
evidence that the hospital has improved liquidity through the end
of calendar year 2004 to a level that is still weak, but we
believe provides adequate cushion for debt service payments in the
near-term.

As of November 30, 2004, the hospital had $4.9 million in
unrestricted cash (48 days of cash on hand), compared with a low
$1.5 million (16 days) as of fiscal yearend June 30, 2004. At its
lowest level, we believe the hospital was at risk of missing debt
service payments.  Recent growth in cash reflects some improvement
in operations, the receipt of a large $1.3 million unrestricted
gift, $400,000 in funds received from Drexel University, which
provided capital to renovate its rented space, and low capital
spending.

Based on operating improvement and the expected receipt of another
$1 million gift in February 2005, we think this level of cash will
at least be maintained and is adequate to fund the next principal
payment of $1 million in May 2005.

Because the hospital does not yet have a track record of
sustaining better operations and maintaining cash, we think it is
too early to comfortably assess the likelihood of making future
principal payments, which are about $1 million annually. Risks to
maintaining cash include operating challenges, investment risk and
increasing capital spending.  

In our opinion, the hospital's investment allocation of 80%
equities introduces a high degree of risk and potential volatility
for an organization with weak liquidity.  Following multiple years
of deferring capital projects, spending is expected to increase to
approximately $1.5 million annually as the hospital addresses
routine renovation needs.  The hospital's external cash sources
were reduced last year following the termination of a $1 million
bank line.

Operating Improvement Recently Evident, But Margins Still Low:

We believe Friends Hospital still faces a number of operating
challenges that make future operations difficult to predict,
although we note that meaningful progress had been made to improve
performance.  In fiscal year 2004, Friends continued a 5-year
trend of negative operating cashflow, although the loss was $1.8
million less in 2004 than in 2003 (excluding a $3 million
impairment charge in 2004).

Through five months of fiscal year 2005, operating income and
cashflow are about equivalent to the prior year period, excluding
an unusually large third-party settlement, and the second half of
the year should show improvement as recent initiatives start to
take effect.

Improvement in fiscal year 2004 was due to higher admissions (up
10%) and higher state grants.  Additionally, Drexel University now
leases space at the hospital for its psychiatry department,
generating $360,000 annually in rent.  The hospital has eliminated
the use of agency nurses and reduced overtime, which will result
in approximately $1 million in annual savings beginning in
November, 2004. Finally, changes in Medicare reimbursement, which
are effective January 2005, are expected to result in at least an
additional $1 million in annual income.

We believe these benefits could be partially offset by a number of
operating challenges. While Friends Hospital has a niche are the
only free-standing psychiatric hospital in the Philadelphia area,
the hospital faces competition from hospitals that are part of
larger systems.  This competition is contributing to a 7% decline
in admissions through five months of 2005 and wage inflation, as
evidenced by the hospital's need to increase salaries to recruit
nurses.

The hospital derives a high 46% of its revenues from state and
county Medicaid programs, which have granted modest annual
increases and could be at risk depending on the state and county
fiscal situations.  Finally, in 2005 the hospital expects to
receive state tobacco monies of approximately $1.8 million and a
state grant of $500,000, both sources of cashflow that are subject
to annual allocations.

Key Ratios and Data (based on fiscal year 2004, ended June 30,
                     2004; investment income normalized at 6%):

   * Total Hospital Admissions: 6,438

   * Total Operating Revenues: $35.5 million

   * Net Revenues Available for Debt Service: $2.3 million

   * Days Cash on Hand: 15.5 days

   * Maximum Annual Debt Service Coverage: 1.7 times

   * Total Debt Outstanding: $7.6 million

   * Operating Cash Flow Margin: -1.0%

   * Debt-to-Cash Flow: 4.3 times


HEALTH NET: Fitch Downgrades Senior Debt Rating to BB+
------------------------------------------------------
Fitch Ratings has downgraded the long-term issuer and senior debt
ratings of Health Net, Inc. (HNT) to 'BB+' from 'BBB-'.  At the
same time, Fitch has downgraded the insurer financial strength
ratings of Health Net of California and Health Net of Connecticut
to 'BBB' from 'BBB+'.  The Outlook remains Negative on all
ratings.  The rating actions affect approximately $400 million of
senior unsecured notes outstanding.  A list of Fitch's ratings on
HNT and its subsidiaries can be found below.

Today's rating action follows the company's announcement this
morning that it will take a $252 million pretax charge to earnings
in the fourth quarter of 2004, primarily to reflect a settlement
of provider claims disputes and adverse prior-period reserve
development.  The overall effect of the company's charge, combined
with operating difficulties in the company's northeast operations,
have resulted in a capital profile for HNT and its regulated
operating subsidiaries that is below Fitch's expectations for an
investment-grade rating.

The Negative Outlook reflects Fitch's concerns with respect to the
company's exposure to ongoing litigation challenges and execution
risks associated with management's turnaround strategy, as well as
operational risks involved in the company's ongoing systems
conversion.  Approximately $169 million of the charge announced
today is earmarked to cover settlements with providers related to
claims processing and payment disputes.  In addition, although the
company announced a settlement of the litigation related to the
1998 sale of its workers' compensation business to Superior
National Insurance Group, Inc., a follow-up suit has been filed.
The final outcome of the follow-up litigation is currently
uncertain.  Also, a September 2004 decision from the U.S. Court of
Appeals for the Eleventh Circuit in Atlanta for the most part
affirmed the class status of providers in the multidistrict
litigation being heard in the Southern District of Florida by
District Court Judge Federico Moreno.  This decision may result in
accelerated settlement talks, which may further reduce HNT's cash
position.

Fitch's ratings on HNT continue to reflect the company's moderate
financial leverage, good competitive position in the health
insurance/managed care markets in California and in the New York
metropolitan area, and strong presence in the traditionally stable
margin Tricare business.

The ratings also reflect industry challenges related to the
rapidly increasing cost of providing health care, increasing
competitive pressures, and regulatory and legal challenges that
may affect the extent to which industry participants can manage
costs and price their products appropriately.

Health Net, Inc. is among the largest publicly traded managed care
operations in the U.S., reporting Dec. 31, 2004, enrollment of 6.5
million individuals, including enrollment associated with its
Tricare business.  Although HNT's largest presence is in the State
of California, the company operates in a total of 27 states.  The
company provides a variety of indemnity, PPO, POS, and HMO plans
in the group, individual, Medicare risk, Medicaid, and Tricare
markets.

Fitch rates HNT and its subsidiaries:

   Health Net, Inc.

       -- Long-term issuer downgraded to 'BB+' from 'BBB-';
       -- Senior debt downgraded to 'BB+' from 'BBB-'.
       
   Health Net of California, Inc.

       -- Insurer financial strength downgraded to 'BBB' from
          'BBB+'.

   Health Net of Arizona, Inc.

       -- Insurer financial strength affirmed at 'BBB'.

   Health Net Health Plan of Oregon, Inc.

       -- Insurer financial strength affirmed at 'BBB'.

   Health Net of Connecticut, Inc.

       -- Insurer financial strength downgraded to 'BBB' from
          'BBB+'.

   Health Net of New Jersey, Inc.

       -- Insurer financial strength affirmed at 'BBB'.

   Health Net of New York, Inc.

       -- Insurer financial strength affirmed at 'BBB'.

The Rating Outlook is Negative.


HEALTH NET: S&P Places Low-B Ratings on CreditWatch Negative
------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB+' counterparty
credit rating on Health Net, Inc., and its various counterparty
credit and financial strength ratings on Health Net's subsidiaries
on CreditWatch with negative implications.

"The ratings are being placed on CreditWatch negative in
connection with Health Net's announced year-end 2004 financial
results, which included substantial charges that were in excess of
our expectations," explained Standard & Poor's credit analyst
Joseph Marinucci.  "These charges resulted in weak consolidated
profitability, diminished interest coverage, and growing concern
about the health plan segment's earnings quality and statutory
capital adequacy per Standard & Poor's model."

Standard & Poor's intends to meet with Health Net representatives
to review the specific charges and their resultant effect on the
company's prospective financial condition.  Following the review,
the ratings could be affirmed or lowered.  If lowered, it is
unlikely that the counterparty credit rating on Health Net will go
below 'BB'.

On Nov. 2, 2004, Standard & Poor's lowered its counterparty credit
rating on Health Net Inc. to 'BB+' from 'BBB-'.  At the same time,
Standard & Poor's affirmed or lowered its counterparty credit and
financial strength ratings on Health Net's various operating
subsidiaries.  All companies were assigned a negative outlook,
which reflected Standard & Poor's concerns about the less-
predictable nature of Health Net's prospective operating
performance and the potential for sustained operational
challenges.


HEILIG-MEYERS: RoomStore Disclosure Statement Hearing on Mar. 8
---------------------------------------------------------------
As previously reported in the Troubled Company Reporter, HMY
RoomStore, Inc., a wholly owned subsidiary of Heilig-Meyers
Company, and its Official Committee of Unsecured Creditors filed a
Joint Plan of Reorganization and Disclosure Statement with the
U.S. Bankruptcy Court for the Eastern District of Virginia.  

The Bankruptcy Court will convene a hearing on March 8, 2005, at
2:00 p.m., in Richmond, Virginia, to consider the adequacy of the
Disclosure Statement.  The Plan Proponents will ask the Court to
rule that the disclosure document contains the right amount of the
right kind of information necessary to permit creditors to make
informed decisions when they vote to accept or reject the Joint
Plan.  

Under the terms of the Plan, RoomStore will emerge as a
reorganized business enterprise and the unsecured creditors of
RoomStore will receive common stock in Reorganized RoomStore in
satisfaction of their claims against RoomStore.  Heilig-Meyers
Company, RoomStore's parent, is the single largest creditor and
will receive approximately 67% of the new common stock of
Reorganized RoomStore.  Reorganized RoomStore will continue to
operate stores under the RoomStore name.

Disclosure Statement objections, if any, must be filed by March 1,
2005, and served on:

     Counsel for the Debtor:

          Bruce H. Matson, Esq.
          LeClair Ryan, A Professional Corporation
          707 E. Main St., Suite 1100
          Richmond, Virginia 23219

     Counsel for the Creditors' Committee:

          Michael S. Stamer, Esq.
          Akin Gump Strauss Hauer & Feld LLP
          590 Madison Avenue
          New York, New York 10022

RoomStore offers a wide selection of professionally coordinated
home furnishings in complete room packages at value-oriented
prices. RoomStore operates 65 stores located in Pennsylvania,
Maryland, Virginia, North Carolina, South Carolina and Texas.

Heilig-Meyers Company filed for chapter 11 protection on
Aug. 16, 2000 (Bankr. E.D. Va. Case No. 00-34533), reporting
$1.3 billion in assets and $839 million in liabilities.  When the
Company filed for bankruptcy protection it operated hundreds of
retail stores in more than half of the 50 states.  In April 2001,
the company shut down its Heilig-Meyers business format. In June
2001, the Debtors sold its Homemakers chain to Rhodes, Inc.  GOB
sales have been concluded and the Debtors are liquidating their
remaining Heilig-Meyers assets.


HIGH VOLTAGE: Files Chapter 22 Petition in Boston, Massachusetts
----------------------------------------------------------------
Less than a year following the confirmation of its chapter 11
plan, High Voltage Engineering Corporation tumbles back into
bankruptcy with a second chapter 11 petition filed with the United
States Bankruptcy Court for the District of Massachusetts, Eastern
Division, on Feb. 8, 2005.  The filing does not include any of
HVE's international subsidiaries.

HVE's decision to file for bankruptcy was precipitated by
insufficient liquidity from cash flow from its principal operating
subsidiaries and the Company's inability to procure alternative
sources of financing through either the debt or equity markets.  
In connection with its filing, HVE has obtained a commitment for
debtor-in-possession financing from GE Commercial Finance in the
amount of $5 million, which may be increased to a maximum of
$16.2 million if certain conditions are satisfied, including a
condition that the Debtors use their reasonable best efforts to
obtain offers for some or all of the Debtors' assets.  Upon court
approval, this new credit facility will be available as needed to
supplement HVE's existing cash flow from operations and enhance
its ability to meet its future obligations to its employees,
customers, vendors and other business partners throughout the
bankruptcy process.

While in Chapter 11, HVE intends to offer and sell as going
concerns the assets of its three distinct operating groups:

   -- the Charles Evans division based in California,

   -- High Voltage Engineering Europa B.V. based in the
      Netherlands and ASIRobicon, and

   -- both Robicon Corporation based in Pittsburgh and ASIRobicon
      S.p.A. based in Milan, either separately or together.

The successful purchasers will be those offering the highest and
best financial terms, although the company may also give
consideration to purchasers that provide a strong strategic fit.  
HVE will seek to consummate the contemplated assets sales prior to
June 30, 2005.

Phillip Martineau, the Chief Executive Officer of HVE, who joined
the company in mid-December 2004, stated, "HVE has operating
businesses with great customers, great technology and wonderful
people.  It is now time to sell the operating group assets to
equally great owners with the financial strength and intention to
grow the businesses going forward.  While it is unfortunate that a
Chapter 11 filing is necessary, it represents the most efficient
process to facilitate a rapid sale of the business assets as
ongoing concerns, which will maximize value to our stakeholders
while minimizing customer disruption and any concern about
continuing the high level of support which has been a signature of
HVE companies."

Headquartered in Wakefield, Massachusetts, High Voltage
Engineering Corporation owns and operates a group of three
industrial and technology based manufacturing and services
businesses.  HVE's businesses focus on designing and manufacturing
high quality applications and engineered products which are
designed to address specific customer needs.  The Debtor filed its
first chapter 11 petition on March 1, 2004 (Bankr. Mass. Case No.
04-11586).  Its Third Amended Joint Chapter 11 Plan of
Reorganization was confirmed on July 21, 2004, allowing the
Company to emerge on Aug. 10, 2004.

High Voltage filed its second chapter 11 petition on Feb. 8, 2004
(Bankr. Mass. Case No. 05-10787).  S. Margie Venus, Esq., at Akin,
Gump, Strauss, Hauer & Feld LLP, and Douglas B. Rosner, Esq., at
Goulston & Storrs, represent the Debtors in their restructuring
efforts.  In the Company's second bankruptcy filing, it listed
$457,970,00 in total assets and $360,124,000 in total debts.


HIGH VOLTAGE: Case Summary & 36 Largest Unsecured Creditors
-----------------------------------------------------------
Lead Debtor: High Voltage Engineering Corporation
             500 Hunt Valley Drive
             New Kensington, Pennsylvania 15068

Bankruptcy Case No.: 05-10787

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      Robicon Corporation                        05-10789
      Ansaldo Ross Hill, Inc.                    05-10791
      HVE Acquisition Corporation                05-10792
      Hivec Holdings, Inc.                       05-10794
      Nicole Corporation                         05-10795

Type of Business: High Voltage Engineering owns and operates
                  several affiliated companies specializing in
                  generators and motors.  The company's chief
                  subsidiary ASIRobicon, manufactures variable
                  frequency drives that reduce energy use in
                  industrial electric motors, motors, generators,
                  power conversion products, and electronic
                  controls for heavy-duty vehicles.  ASIRobicon
                  operates in Canada, the US, China, Romania, and
                  Europe.  See http://www.asirobicon.com/

                  High Voltage Engineering Corporation and all of
                  its U.S. subsidiaries emerged from a chapter 11
                  reorganization in August 2004 (Bankr. Mass. Case
                  No. 04-11586).  Lawyers at Fried, Frank, Harris,
                  Shriver, & Jacobson LLP, represented the company
                  in that 163-day trip through bankruptcy that
                  converted $155 million of debt into a 97% equity
                  stake in the reorganized company.

Chapter 11 Petition Date: February 8, 2005

Court:  District of Massachusetts (Boston)

Judge:  Joan N. Feeney

Debtors' Counsel: S. Margie Venus
                  Akin, Gump, Strauss, Hauer & Feld LLP
                  1111 Louisiana Street, 44th Floor
                  Houston, Texas 77002-5200
                  Tel: (713) 220-5800
                  Fax: (713) 236-0822

                        -- and --

                  Douglas B. Rosner, Esq.
                  Goulston & Storrs
                  400 Atlantic Avenue
                  Boston, Massachusetts 02110-3333
                  Tel: (617) 482-1776

Financial
Advisor:          Marotta Gund Budd & Dzera, LLC

Unaudited Consolidated Financial Condition as of October 30, 2004:

      Total Assets: $457,970,00

      Total Debts:  $360,124,000

A.  High Voltage Engineering Corporation's 19 Largest Unsecured
    Creditors:

    Entity                       Nature of Claim    Claim Amount
    ------                       ---------------    ------------
Grant Thornton LLP               Trade debt             $612,078
33960 Treasury Center
Chicago, IL 60694-3900
Attn: James Rita
Tel: (617) 848-4885

Thermo Electron Corporation      Trade debt             $159,550
Department CH 10385
Palatine, IL 60055-0385

Outlooksoft Corporation          Trade debt              $95,971
100 Prospect Street
North Tower
Stamford, CT 06901

Protivity                        Trade debt              $75,346
625 Liberty Avenue
Pittsburgh, PA 15222

Russell Reynolds                 Trade debt              $51,501
Association Inc.
Church Street Station
PO Box 6427
New York, NY 10249-6427

Ropes & Gray                     Trade debt              $50,274
One International Place
Boston, MA 02110-2624
Attn: Don S. DeAmicis, Esq.
Tel: (617) 951-7732

National Commercial Capital      Trade debt              $42,897
PO Box 691355
Cincinnati, OH 45269-1355
National Commercial Capital
PO Box 691355
Cincinnati, OH 45269-1355

Bowne of New York City           Trade debt              $36,615
Attn: Accounting Department
345 Hudson Street
New York, NY 10014-9884

Stroock & Stroock & Lavan LLP    Trade debt              $21,303
180 Maiden Lane
New York, NY 10038-4982
Attn: Michael Sage
Tel: (212) 806-5400

Physical Electronics USA, Inc.   Trade debt              $16,052

AT&T                             Trade debt              $13,160

EJC Edgewater LLC
c/o Campbell Estate              Trade debt              $11,331

Hilco Appraisal Services LLC     Trade debt              $10,100

Advanced Materials Engineering   Trade debt              $10,080
(Amer)

Evercore Restructuring, L.P.     Trade debt              $10,000

Core Systems                     Trade debt               $8,187

Pacific Gas & Electric ESV       Trade debt               $6,299

Premium Assignment Corporation   Trade debt               $5,817

Austin Scientific Company, Inc.  Trade debt               $3,645


B.  Robicon Corporation's 17 Largest Unsecured Creditors:

    Entity                       Nature of Claim    Claim Amount
    ------                       ---------------    ------------

NWL Transformers, Inc.           Trade debt           $1,007,143
312 Rising Sun Road
Bordentown, NJ 08505
Attn: Dave Seitz
Tel: (609) 298-7300 ext. 223

X-Mark/CDT                       Trade debt             $802,135
2001 North Main Street
Washington, PA 15301
Attn: Carl M. Bruckner, GM
Tel: (724) 228-7373 ext. 154

Powerex                          Trade debt             $746,969
200 E. Hillis Street
Youngwood, PA 15697
Attn: Mike Drake
Tel: (724) 925-4457

Hitran Corporation               Trade debt             $562,456
362 Highway 31
Flemington, NJ 08822
Attn: Jim Hindle
Tel: (908) 782-5525 x. 224

Gatway Fasteners, Inc.           Trade debt             $522,023
5103 Old William Penn Highway
Export, PA 15632
Attn: Jay Mangold
Tel: (724) 327-7777

Hunterdon Transformer Company    Trade debt             $500,613
75 Industrial Drive
Phillipsburg, NJ 08865
Attn: Mark Brock
Tel: (908) 454-2400

Koester Metals, Inc.             Trade debt             $496,940
1441 Quality Drive
Defiance, OH 43512
Attn: Gary Koester
Tel: (419) 782-2595

NWL Capacitors                   Trade debt             $458,284
PO Box 97
204 Carolina Drive
Snow Hill, NC 28580
Attn: Dave Seitz
Tel: (609) 298-7300

Norlake Manufacturing Company    Trade debt             $447,457
PO Box 215
39301 Taylor Parkway
Elyria, OH 44036
Attn: Jim Markus
Tel: (440) 353-3200

Epcos Inc.                       Trade debt             $435,626
Special Products Division
186 Wood Avenue South
Iselin, NJ 08330-2725
Attn: Barbara Korovich
Tel: (732) 906-4338

R-Theta Inc.                     Trade debt             $382,907
6220 Krestrel Road
Mississauga ON L5T 1Y9
Canada
Attn: Canute Fernandes
Tel: (905) 795-0077

BHC Components Limited           Trade debt             $377,555
20/21 Cumberland Drive
Granby Industrial Estte
Weymouth Dorset, DT4 9TE
Canada
Attn: Peter Maclure
Tel: 011 44 1305 830730

Unifab Enclosures, Inc.          Trade debt             $341,056
1947 Setterington Drive RR#2
Kingsville, ON N9Y 2E5
Canada

Jianghai America Inc.            Trade debt             $337,520
c/o Bear Marketing
6910 Treeline Drive, Unit A
Brecksville, OH 44141

Cincinnati Heat Exchangers       Trade debt             $292,652
5900 West Chester Road, Suite 1
West Chester, OH 45069
Attn: Tim Stilson
Tel: (513) 874-7232

Telsa Power & Automation, Inc.   Trade debt             $289,555
6510 Bourgeois Road
Houston, TX 77066
Tel: (281) 444-1200

AVX Corporation                  Trade debt             $284,760
c/o Campisano Company
6561 Harr
Cincinnati, OH 45247-7822


HORNACO INC: Case Summary & 40 Largest Unsecured Creditors
----------------------------------------------------------
Lead Debtor: Hornaco, Inc.
             3810 Drake Avenue South West
             Huntsville, Alabama 35805

Bankruptcy Case No.: 05-80560

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      John H. Barry, Inc.                        05-80561

Chapter 11 Petition Date: February 7, 2005

Court: Northern District Of Alabama (Decatur)

Judge: Jack Caddell

Debtor's Counsel: Kevin D. Heard, Esq.
                  Heard & Heard P.C.
                  307 Clinton Avenue, West Suite 200
                  Huntsville, AL 35801
                  Tel: 256-535-0817

                                 Total Assets    Total Debts
                                 ------------    -----------
Hornaco, Inc.                              $0     $3,970,343
John H. Barry, Inc.                        $0     $1,064,951

A. Hornaco, Inc.'s 20 Largest Unsecured Creditors:

   Entity                     Nature Of Claim       Claim Amount
   ------                     ---------------       ------------
GE Capital Franchise Finance  secured by blanket      $1,900,000
PO Box 848319                 lien on fixtures,
Dallas, TX 75284              equipment, machinery
                              and inventory

GE Capital Franchise Finance  secured by real         $1,249,000
PO Box 848319                 property
Dallas, TX 75284              Secured value:
                              $832,000

GE Capital Franchise Finance  machinery, inventory      $575,000
PO Box 848319                 Secured value:
Dallas, TX 75284              $350,000

McLane                        Vendor                     $54,986

Taco Bell Royalty             Vendor                     $51,969

Taco Bell Advertising         Vendor                     $42,611

Charles Roberts, Jr.          Vendor/Landlord on         $25,487
                              commercial lease

Balch & Bingham                                          $10,141

UFPC                          Vendor                      $4,962

Kuhns & Associates            Vendor                      $4,210

Malmgren                      Vendor                      $4,125

Taco Bell Corporation         Vendor                      $3,920

Franchise Service Options     Vendor                      $3,759

Par Tech                      Vendor                      $3,610

Diversified Services          Vendor                      $3,401

Archon Group                  Vendor                      $3,000

Don Horner                                                $2,981

Mr. Rooter                    Vendor                      $2,842

American Express #2           Vendor                      $2,425

Ricketts Refrigeration        Vendor                      $1,668


B. John H. Barry, Inc.'s 20 Largest Unsecured Creditors:

   Entity                     Nature Of Claim       Claim Amount
   ------                     ---------------       ------------
GE Capital Franchise Finance  secured by blanket      $1,000,000
P.O. Box 848319               lien on fixtures,
Dallas, TX 75284              equipment, machinery
                              and inventory
                              secured value:
                              $800,000

McLane                        Vendor                     $21,005
7188 Collection Center Drive
Chicago, IL 60693

KFC Royalty                   Vendor                      $9,642
PO Box 102778
Atlanta, GA 30368

Taco Bell Advertising         Vendor                      $7,542

Taco Bell Royalty             Franchisor                  $7,267

KFC Advertising               Vendor                      $4,791

North Alabama Advertising     Vendor                      $3,354

Kuhns & Associates            Vendor                      $2,350

Diversified Services          Vendor                      $2,340

Par Tech                      Vendor                      $1,922

Mr. Rooter                    Vendor                      $1,134

Marshall Durbin               Vendor                        $886

BFI                           Vendor                        $368

Taco Bell Corp.               Vendor                        $360

Barco                         Vendor                        $335

Archway Marketing             Vendor                        $254

Yum Brands                    Vendor                        $239

Miller Zell                   Vendor                        $229

ITC Deltacom                  Vendor                        $173

Hummingbyrd d/b/a Roto        Open account                  $168
Rooter


ILLINOIS HEALTH: S&P Lifts Rating on Revenue Bonds to CCC from CC
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating two notches
to 'CCC' from 'CC' on Illinois Health Facilities Authority's
$41.195 million series 1992 revenue bonds and $17.145 million
series 1996 bonds, issued for Mercy Hospital and Medical Center
(Mercy), Illinois.  The outlook is stable.

"The rating and outlook reflect a debt service reserve fund that
is now fully funded and principal and interest payments that have
been current as of Jan. 1, 2005, as confirmed by the trustee's
counsel," said Standard & Poor's credit analyst Suzie Desai.

In addition, the rating and outlook reflect Mercy's location in a
neighborhood that is slowly undergoing economic transition and
housing growth, which could improve the future overall patient
payor mix, and operational improvements as a result of ongoing
expense controls.  However, there have been some ongoing
fluctuations in operations during the first six months of
unaudited fiscal 2005.

The 'CCC' rating on Mercy's debt indicates that it is highly
vulnerable to nonpayment due to its weak balance sheet and limited
financial flexibility, which is characterized by very low
liquidity levels, high leverage, and low cash to debt.  In
addition, Mercy's high government payor mix and underfunded
self-insurance program could negatively affect its balance sheet
if any unexpected issues arise.

Operations have slowly improved since the large losses incurred in
fiscal 2000.  Management has made, and continues to make,
operational changes, including staffing level improvements and
reductions in costly agency nurse use.

The stable outlook reflects the expectation that Mercy will
continue to make its interest and principal payments to the
trustee and bondholders on time and that management will continue
to improve internal operations and achieve break-even results in
fiscal 2005.  Liquidity should not further deteriorate during the
next year due to some of the onetime cash cushions expected this
year.  Nonetheless, Mercy continues to be in a difficult business
position, as reflected by the current rating, and exhibits a weak
financial profile that will make it susceptible to default if
unexpected events occur.  Standard & Poor's will continue to
monitor the events that affect this credit closely.


INTELSAT: Discount Note Issue Cues Fitch to Junk Senior Notes
-------------------------------------------------------------
Fitch Ratings has downgraded and removed from Rating Watch
Negative the ratings of Intelsat, Ltd. and its wholly owned
subsidiary, Intelsat (Bermuda), Ltd., following the issuance of
$478.4 million ($305.2 million gross proceeds) of senior discount
notes at an intermediate subsidiary currently named Zeus Special
Sub Ltd. (Zeus). Intelsat's Rating Outlook is Stable.  Fitch has
also initiated a rating of 'B-' on the new Zeus senior discount
notes.  The rating actions are:

   Intelsat, Ltd.

       -- Senior unsecured notes to 'CCC+' from 'B-'.

   Zeus Special Sub Ltd.

       -- Senior unsecured discount notes initiated at 'B-'.

   Intelsat (Bermuda), Ltd.

       -- Senior unsecured notes to 'B' from 'B+';
       -- Senior secured credit facilities to 'BB-' from 'BB'.

The Stable Rating Outlook reflects the prospects for stable
revenues from its lease backlog and the expected resulting free
cash flow offset by a very competitive operating environment and
ownership by an investment group.

Fitch's rating action affects about $4.9 billion of existing debt.

The new Zeus notes were issued by a newly formed intermediate
subsidiary placed between Intelsat and Intelsat Bermuda.  This
ranks the new issue as structurally senior to the Intelsat senior
notes and structurally junior to all of the debt at Intelsat
Bermuda.

The issuance and subsequent use of proceeds to retire equity
increases the estimated pro forma total leverage as of Sept. 30,
2004, from about 6.2 times to 6.6x, based on Fitch estimates.  
When cash accrual on the notes begins in 2010, the annual cash
interest payment will be approximately $44.3 million.  Fitch's
ratings not only reflect the overall increased leverage in the
consolidated capital structure but also reflect Intelsat's
possible need to increase capital spending at about the same time
as the new Zeus senior discount notes go cash pay.

This action is based on existing public information and is being
provided as a service to investors.


INTERSTATE HOTELS: Hosting 4th Quarter Earnings Call on Feb. 23
---------------------------------------------------------------
Interstate Hotels & Resorts (NYSE:IHR), the nation's largest
independent hotel management company, will release fourth-quarter
and full-year 2004 financial results on Wednesday, Feb. 23, 2005,
before the market's opening.  Management will hold a conference
call at 10 a.m. E.T. to discuss those results.

The call will be hosted by Chief Executive Officer Steve Jorns and
Chief Financial Officer Bill Richardson.  Stockholders and other
interested parties may listen to a simultaneous webcast of the
conference call on the Internet by logging onto Interstate's Web
site -- http://www.ihrco.com/or http://www.streetevents.com/--  
or may call (800) 240-4186, reference number 11023378.  
(International investors may call (303) 262-2131.)  A recording of
the call will be available by telephone until midnight on
Wednesday, Mar. 2, 2005, by dialing (800) 405-2236, reference
number 11023378.  A replay of the conference call will be posted
on Interstate Hotels & Resorts' Web site through Mar. 23, 2005.

                        About the Company

Interstate Hotels & Resorts -- http://www.ihrco.com/-- operates  
more than 300 hospitality properties with nearly 70,000 rooms in
40 states, the District of Columbia, Canada, Russia, and Portugal.  
BridgeStreet Corporate Housing Worldwide, an Interstate Hotels &
Resorts' subsidiary, is one of the world's largest corporate
housing providers. BridgeStreet and its network of Global Partners
offer more than 8,700 corporate apartments located in 91 MSAs
throughout the United States and internationally.

                          *     *     *

As reported in the Troubled Company Reporter on Aug. 23, 2004,
Moody's Investors Service has assigned a B2 senior implied rating
to Interstate Hotels & Resorts, Inc., and its consolidated
subsidiaries. The B2 ratings previously assigned to the firm's
five-year $75 million secured term loan and to the three-year
$60 million revolver of Interstate Operating Company, L.P., a
subsidiary of Interstate Hotels & Resorts, Inc., are unaffected.

Interstate Hotels & Resorts, Inc. guarantees these bank credit
facilities, which are secured by the capital stock and assets of
the borrower, assets of the guarantor, and benefit from the first
lien rights to receive management contract payments.  This is the
first time Moody's has assigned a senior implied rating to the
company. The rating outlook is stable.


IWO HOLDINGS: Emerging from Bankruptcy Protection Today
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware confirmed
the pre-packaged Chapter 11 Joint Plan of Reorganization of IWO
Holdings, Inc., a PCS affiliate of Sprint (NYSE:FON), and its
wholly owned subsidiaries, Independent Wireless One Corporation
and Independent Wireless One Leased Realty Corporation.  The
Company expects the Joint Plan of Reorganization to become
effective today, Feb. 10, 2005.

Pursuant to the Joint Plan of Reorganization, the Company's old
senior secured credit facility will be repaid in full, using the
net proceeds of the issuance of two new series of notes, and the
holders of the Company's old senior notes will receive 100% of the
common stock of the reorganized Company, subject to dilution for
management equity.  General unsecured creditors will be unimpaired
and paid in full in the ordinary course of business.  The existing
equity interests in the Company, all of which is held by US
Unwired Inc., will be cancelled.  Also, as part of the plan, the
Company's agreements with Sprint PCS will be amended, and the
Company's management contract with US Unwired will also be
cancelled, subject to a four-month transition period.  The new
management team will be led by Bret Cloward.

The Debtors filed their "pre-packaged" chapter 11 plan on Jan. 4,
2005, to implement its previously announced financial
reorganization to restructure and substantially reduce the
Company's debt, strengthen its balance sheet and increase its
liquidity.

As reported in the Troubled Company Reporter on Dec. 2, 2004, IWO
Holdings commenced a solicitation of votes from the holders of its
14% Senior Notes due 2011 in support of a pre-packaged Chapter 11
plan of reorganization.

IWO has entered into a lock-up agreement with holders of
approximately 68% of the outstanding principal amount of its
Senior Notes pursuant to which they have agreed to vote in support
of the Chapter 11 plan.  In connection with the Chapter 11 plan, a
newly formed corporation which will be merged into IWO upon
consummation of the plan anticipates issuing $225,000,000 in
aggregate proceeds of new notes.  The proceeds of such new notes
would be used primarily to repay IWO's senior credit agreement
debt.

Headquartered in Lake Charles, Louisiana, IWO Holdings, Inc., --
http://iwocorp.com/-- through its Independent Wireless One
Corporation subsidiary, is a PCS affiliate of Sprint PCS. IWO
Holdings provides mobile digital wireless personal communications
services, or PCS, under the Sprint and Sprint PCS brand names in
upstate New York, New Hampshire (other than Nashua market),
Vermont and portions of Massachusetts and Pennsylvania. The
Debtors filed for chapter 11 protection on Jan. 4, 2005 (Bankr.
D. Del. Case Nos. 05-10009 to 05-10011). Jeffrey L. Tanenbaum,
Esq., at Weil Gotshal & Manges LLP, and Mark D. Collins, Esq., at
Richards Layton & Finger, represent the Debtors in their
restructuring efforts. When the Debtors sought bankruptcy
protection, they reported total assets of $246,921,000 and total
debts of $413,275,000.


KEY COMPONENTS: Actuant Acquisition Cues S&P to Withdraw B- Rating
------------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its ratings on Key
Components LLC, including the 'B+' corporate credit rating.  The
company had been placed on CreditWatch with positive implications
on Nov. 22, 2004, after Actuant Corp. (BB/Stable/--) announced
that it planned to acquire Key Components.  The acquisition was
completed in December 2004 and all publicly issued debt
outstanding has subsequently been retired.


KISTLER AEROSPACE: Gets Insurance Premium Financing from Cananwill
------------------------------------------------------------------
Kistler Aerospace Corporation asks the U.S. Bankruptcy Court for
the Western District of Washington for authority to enter into an
insurance premium finance agreement with Cananwill, Inc.

Kistler must maintain its insurance policies to keep its business
operations and estate assets insured, and that's necessary for an
effective reorganization.  Cananwill has agreed to finance the
payment of the premiums.  The Debtors will deliver a $22,988.55
cash downpayment and finance the $42,341.45 balance by making
eight monthly payments of $5,472.66.  

To secure Cananwill's interests, the Debtor will grant the
insurance premium financier a security interest in unearned or
returned premiums and other amounts due to Kistler under the
policies.

Headquartered in Kirkland, Washington, Kistler Aerospace
Corporation, develops a fleet of fully reusable launch vehicles to
provide lower cost access to space for Earth orbiting satellites.
The Company filed for chapter 11 protection on July 15,
2003(Bankr. W.D. Wash. Case No. 03-19155).  Jennifer L. Dumas,
Esq., Youssef Sneifer, Esq., at Davis Wright Tremaine LLP
represent the Debtor in its restructuring efforts.  When the
Debtor filed for protection from its creditors, it listed
$6,256,344 in total assets and $587,929,132 in total debts.


KITCHEN ETC: Judge Walsh Confirms Second Amended Liquidation Plan
-----------------------------------------------------------------
The Honorable Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware confirmed the Second Amended Liquidating
Plan of Reorganization filed by Kitchen Etc., Inc., on January 31,
2005.

Judge Walsh concluded that the Plan:

   a) contains only provisions that are consistent with the
      interests of creditors, equity security holders and with
      public policy with respect to the manner of selection of the
      Plan Administrator who will serve, on or after the Effective
      Date as the sole officer and director of the Debtor;

   b) includes only provisions that are not inconsistent with
      applicable provisions of the Bankruptcy Code and applicable
      law;

   c) has been proposed in good faith and not by any means
      forbidden by law;

   d) complies with Section 1129(a)(11) of the Bankruptcy Code
      that provides for the liquidation of the Debtor and its
      remaining assets; and

   e) does not unfairly discriminate against Class 6 and Class 7
      claims in accordance with Section 1129(b)(1) of the
      Bankruptcy Code and is fair and equitable to those two
      classes as required under Section 1129(b)(2)(c) of the
      Bankruptcy Code.

As reported in the Troubled Company Reporter on Dec. 27, 2004, the
Plan provides for the appointment of a Plan Administrator who will
act as the sole representative of the Debtor upon the Effective
Date of the Plan and who will have the authority and power to make
the required distributions under the Plan.

Judge Walsh approved the Debtor's designation of Joseph Myers of
Clear Thinking Group LLC, as the Plan Administrator.

A full-text copy of the Second Amended Liquidation Plan are
available for a fee at:

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

The Court set March 9, 2005, as the Administrative Claims Bar Date
for filing any and all Administrative Expense Claims against the
Debtor.  Those claims must be filed and served on or before the
March 9 bar date to the Debtor's claims agent, CPT Group Inc.

Headquartered in Exeter, New Hampshire, Kitchen Etc., Inc. --
http://www.kitchenetc.com/-- was a multi-channel retailer of
household cooking and dining products.  Kitchen Etc. filed for
chapter 11 protection on June 8, 2004 (Bankr. Del. Case No. 04-
11701) and quickly retained DJM Asset Management to dispose of all
17 Kitchen Etc. stores throughout New England, New York, Delaware,
Pennsylvania, Maryland and Virginia.  Bradford J. Sandler, Esq.,
at Adelman Lavine Gold and Levin, PC, represents the Debtor in its
restructuring efforts.  When the Company filed for protection from
its creditors, it listed $32,276,000 in total assets and
$33,268,000 in total debts.


KMART CORP: Settles Samsung Claim Assignment Dispute
----------------------------------------------------
On February 26, 2002, Samsung Electronics of America, Inc., filed
Claim No. 266 for $15,436,191.  Samsung partially assigned its
interest in Claim No. 266 to EULER American Credit Indemnity
Company in the amount of $8,796,068.

As assignee of a portion of Claim No. 266, EULER filed Claim No.
25066 for $8,796,068 in June 2002.

Samsung subsequently assigned another portion of Claim No. 266, in
the amount of $4,999,963, to Goldman Sachs Credit Partners
L.P., which, in turn, transferred that claim to Third Avenue
Value Fund.

In May 2003, Kmart Corporation commenced an adversary proceeding
against Samsung seeking to avoid certain transfers made by Kmart
to Samsung prior to the Petition Date.

Neither EULER nor Third Avenue have assigned or transferred any
interest in their Claims.

Kmart has timely filed objections to Claim No. 266, as well as
EULER's and Third Avenue's assigned claims.

In a Court-approved stipulation, Kmart, EULER, and Third Avenue
stipulate and agree that:

    (a) Samsung's assignment of portions of Claim No. 266 to EULER
        and Third Avenue is ratified and deemed valid and
        enforceable;

    (b) The EULER Claim is allowed for $8,796,068 and the Third
        Avenue Claim is allowed for $4,999,963, both as Class 5
        Trade Vendor/Lease Rejection Claims against Kmart.  Kmart
        will make a distribution to EULER and Third Avenue on
        account of the Allowed Claims in accordance with the Plan;

    (c) The Parties release each other from all actions that Kmart
        may have had, may now have, or may in the future have
        against any of them arising out of or relating to Claim
        No. 266 and the claims assigned to EULER and Third Avenue,
        except as specifically provided in the Stipulation;

    (d) In consideration of Kmart's release:

        -- EULER will be deemed to assign to Kmart a 10% interest
           in the EULER Claim, which assignment is effective
           January 21, 2005.  After taking into account this
           assignment, the post-assignment allowed EULER Claim
           will be $7,916,461, and the post-assignment allowed
           Kmart claim will be $879,607; and

        -- Third Avenue will be deemed to assign a 10% interest in
           the Third Avenue Claim, which assignment is effective
           January 21, 2005.  After taking into account this
           assignment, the post-assignment allowed Third Avenue
           Claim will be $4,499,966, and the post-assignment
           allowed Kmart claim will be $499,996; and

    (e) Kmart reserves all rights, claims, and defenses asserted,
        or which it may assert, in the Adversary Proceeding.  The
        approved Stipulation will not in any way release Samsung
        from any liability in the Adversary Proceeding.  However,
        Kmart will make distributions on the Assigned Claims,
        notwithstanding any objection it may have earlier asserted
        with respect to those claims under Section 502(d) of the
        Bankruptcy Code.

Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART
Holding Corporation) -- http://www.bluelight.com/-- is the
nation's second largest discount retailer and the third largest
merchandise retailer.  Kmart Corporation currently operates
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam.  The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474).  Kmart emerged from chapter 11 protection on May 6,
2003.  John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts.  The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection.  (Kmart Bankruptcy News, Issue No. 89; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


KRISPY KREME: Reducing Workforce by 25% to Save $7.4 Million
------------------------------------------------------------
Krispy Kreme Doughnuts, Inc. (NYSE: KKD) is reducing the number of
employees in its corporate, mix plant, equipment manufacturing,
and distribution facilities by approximately 25%.  It is estimated
that these actions will result in annual pre-tax savings of
approximately $7.4 million and a cash restructuring charge of
approximately $600,000 in the first fiscal quarter.

The Company also recently divested a corporate airplane that was
subject to an operating lease.  It is estimated that this action
will result in annual pre-tax savings of approximately $3 million
but will involve a cash charge of approximately $300,000 in the
first fiscal quarter related to the divestiture.

                    March 25 Deadline Looms

As previously reported in the Troubled Company Reporter on Jan.
27, 2005, the six-lender consortium under Company's Credit
Facility have agreed to defer until March 25, 2005, the date on
which an event of default would occur because of the Company's
failure to deliver financial statements to the lenders for the
quarter ended Oct. 31, 2004.  Also, as previously disclosed, the
Company is currently unable to borrow funds under the Credit
Facility.  The Company presently is working on a business plan and
intends to conduct discussions with its lending banks regarding
amendments to its Credit Facility.  The Company's cash from
operations continues to be impacted adversely by previously
disclosed unfavorable sales trends, and by the substantial costs
and expenses associated with ongoing litigation, regulatory and
restructuring matters.  In light of the foregoing, Krispy Kreme
believes that it will need to obtain, by the end of the waiver
period, additional credit to fund its operations and required
capital expenditures.  There can be no assurance that the Company
will be able to reach any agreement with the banks or that funding
will be available when and in the amounts needed.

"Krispy Kreme is a great brand, and we are working very hard to
help the Company rediscover its potential," said Steve Panagos,
Krispy Kreme's President and Chief Operating Officer recently
imported from Kroll Zolfo Cooper LLC.  Stephen F. Cooper is
serving as Chief Executive Officer, replacing Scott A. Livengood,
who retired as Chairman of the Board, President and Chief
Executive Officer and resigned as a director of the Company last
month.

Krispy Kreme Doughnuts, Inc. disclosed in early January that its
Board of Directors concluded that the Company's previously issued
financial statements for the fiscal year ended February 1, 2004
and the last three quarters of fiscal year 2004 should be restated
to correct accounting errors estimated to total $6 to $8 million.  

Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme is
a leading branded specialty retailer of premium quality doughnuts,
including the Company's signature Hot Original Glazed.  Krispy
Kreme currently operates more than 400 stores in 45 U.S. states,
Australia, Canada, Mexico the Republic of South Korea and the
United Kingdom.  Krispy Kreme can be found on the World Wide Web
at http://www.krispykreme.com/


LACLEDE STEEL: Disclosure Statement Hearing Scheduled for March 7
-----------------------------------------------------------------
The Honorable Barry S. Schermer of the U.S. Bankruptcy Court for
the Eastern District of Missouri will convene a hearing on Mar. 7,
2005, at 9:00 a.m., to consider the adequacy of a Disclosure
Statement filed on Jan. 31, 2005, by Laclede Steel Company and its
Official Unsecured Creditors Committee to explain their Plan of
Liquidation.  The Plan Proponents will ask the Court to rule that
the disclosure document contains the right amount of the right
kind of information necessary to permit creditors to make informed
decisions when they vote to accept or reject the Joint Plan.  

Objections to the Disclosure Statement, if any, must be filed with
the Bankruptcy Clerk in St. Louis by February 28, 2005, and served
on the Plan Proponents' counsel:

     Attorneys for the Debtor and Debtor-in-Possession:

          Lloyd A. Palans, Esq.
          Christoper J. Lawhorn, Esq.
          David M. Unseth, Esq.
          Cullen K. Kuhn, Esq.  
          BRYAN CAVE, LLP
          211 N. Broadway, Suite 3600
          St. Louis, MO 63102-2750

     Attorneys for the Official Unsecured Creditors Committee:

          Steven Goldstein, Esq.
          Robert A. Breidenbach, Esq.
          GOLDSTEIN & PRESSMAN, P.C.
          121 Hunter Avenue, Suite 101
          St. Louis, MO 63124-2082

Objectors are instructed to identify those portions of the
Disclosure Statement they assert are incomplete, misleading,
erroneous, or otherwise objectionable and further instructed to
state in detail the information the objector wants added or
deleted from the Disclosure Statement.  Where appropriate, the
objecting party is directed to propose acceptable language which
the objecting party requests be included in the disclosure
statement.

The Disclosure Statement must be approved by the Bankruptcy Court
before the Plan may be submitted to the creditors for a vote.  A
copy of the Plan, a court-approved Disclosure Statement and a
notice indicating the time, date and place for a Confirmation
Hearing will be sent to all parties-in-interest at a later date.

One of only three full-line producers of continuous-weld pipe in
the United States at the time, Laclede Steel Company sought
chapter 11 protection for a second time on July 27, 2001 (Bankr.
E.D. Mo. Case No. 01-48321).  The company disclosed more and $100
million in assets and liabilities at the time of the filing.  Over
the past three and half years, the Company has closed its
facilities, conducted going concern sales and liquidated most of
its real property and other assets for the benefit of its
creditors.


LEVI STRAUSS: S&P Places Junk Ratings on CreditWatch Positive
-------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on jeans
designer and marketer Levi Strauss & Co., including its 'CCC'
long-term corporate credit rating, on CreditWatch with positive
implications.

San Francisco, California-based Levi Strauss had about
$2.3 billion in total debt outstanding at Aug. 29, 2004.

The CreditWatch listing reflects Standard & Poor's expectation
that full year results will demonstrate improvement in the
company's operating results and liquidity position.  Standard &
Poor's analysis will focus on the benefits from the cost-reduction
and restructuring efforts in the past year, sustainability of
revenues, and the ability to reduce debt and extend maturities.

"We will conduct a comprehensive review of the company's progress,
including its operating and financial strategies.  Resolution of
the CreditWatch listing, which could result in the corporate
credit rating being raised to the 'B' category, is expected with
the conclusion of our review, which should be completed within the
next 30 days," said credit analyst Susan H. Ding.


MANUFACTURED HOUSING: S&P's Rating on Three Classes Tumbles to D
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on three
classes from three Green Tree-related manufactured housing
transactions to 'D'.

The lowered ratings reflect the reduced likelihood that investors
will receive timely interest and the ultimate repayment of their
original principal investment.  Manufactured Housing Contract
Senior/Sub Pass-thru Trust 1999-3 reported an outstanding
liquidation loss interest shortfall for its B-1 class on the
February 2005 payment date.  At the same time, Manufactured
Housing Contract Senior/Sub Pass-Thru Trust 1999-6 and
Manufactured Housing Contract Senior/Sub Pass-Thru 2000-2 each
reported an outstanding liquidation loss interest shortfall for
its M-2 classes.

Standard & Poor's believes that interest shortfalls for these
transactions will continue to be prevalent in the future, given
the adverse performance trends displayed by the underlying pools
of collateral, as well as the location of mezzanine and
subordinate class write-down interest at the bottom of the
transactions' payment priorities (after distributions of senior
principal).

Standard & Poor's will continue to monitor the outstanding ratings
associated with these transactions in anticipation of future
defaults.
     
                        Ratings Lowered
   
             Manufactured Housing Contract Senior
                  Sub Pass-thru Trust 1999-3

                               Rating
                   Class   To          From
                   -----   --          ----
                   B-1     D           CC

             Manufactured Housing Contract Senior
                  Sub Pass-thru Trust 1999-6
   
                   Class   To          From
                   -----   --          ----
                   M-2     D           CC

             Manufactured Housing Contract Senior
                  Sub Pass-thru Trust 2000-2
    
                   Class   To          From
                   -----   --          ----
                   M-2     D           CC


MB TECH: Restructuring of Korean Operation Reduces Debt
-------------------------------------------------------
MB Tech (OTCBB: MBTT) has reorganized its core assets and business
structure to enhance its financial outlook.

In cooperation with A-Telecom, MB Tech's restructure has
accomplished:

   -- the disposition of aged bad assets;

   -- the clearance of long-term accounts payable and liabilities;

   -- the restructuring of the business which enjoyed neither       
      competitive power or profit (the old LNB business);

   -- the improvement of cash flow by reducing labor, fixed cost
      and indirect cost;

MB Tech continues to focus its business on developing and
marketing the product line led by innovative satellite antenna
solutions known as "Faserwave."

As previously reported, for the LNB business, MB Tech has
established a cooperative relationship with A-Telecom, a top tier
manufacturer in Korea for LNB products.

MB Tech Inc. will market and sell those LNB products for the North
America market under the brand of MB Tech.

For information on MB Tech's product line, visit:

   http://www.princetonresearch.com/clients/MBTechQ14.pdf  

                        About the Company

MB Tech is a global manufacturer and distributor of electronic
components.  MB Tech and its subsidiaries produce products for the
DBS satellite industry and state-of-the-art RF microwave and
communications technologies with consumer and military
applications.

MB Tech serves the satellite television market as a provider of
hardware and bundled solutions, and is expanding to serve the
satellite radio and military hardware and solutions sectors.  MB
Tech manufactures, distributes and/or markets several proprietary
solutions that differentiate it from competitors, including active
and non-active auto-tracking (portable and stationary) flat
antennas, a mobile phased shift array antenna, and a marine
antenna.

MB Tech pioneered advancements like the dual-horn LNB, which
allows multiple set-top boxes to be connected to a single
satellite dish, enabling viewing of multiple channels
simultaneously on different television monitors, and a tri-horn
LNB, which provides the ability to download signals from multiple
satellites over a single dish.

                          *     *     *

                       Going Concern Doubt

In its Form-10QSB for the quarterly period ended Sept. 30, 2004,
filed with the Securities and Exchange Commission, MB Tech
disclosed that it has experienced recurring losses since inception
and has negative cash flows from operations that raise substantial
doubt as to its ability to continue as a going concern.  For the
quarters ended Sept. 30, 2004 and 2003, the Company experienced
net losses of $764,736 and $635,792 respectively.

At Sept. 30, 2004, MB Tech's balance sheet showed a $277,579
stockholders' deficit, compared to a $547,988 deficit at Sept. 30,
2003.


MIRANT CORPORATION: Court Orders Intercompany Claim Disclosures
---------------------------------------------------------------
Deutsche Bank Securities, Inc., holds a $45,000,000 liquidated,
unsecured claim against Mirant Americas, Inc. -- Mirant
Corporation debtor-affiliate.  Deutsche Bank's Claim were held
originally by El Paso North America through its affiliates Shady
Hills Holding Company and Mesquite Investors, LLC.  The Claim was
assigned to Deutsche Bank postpetition.  Mirant Americas'
Schedules of Assets and Liabilities disclose that Mirant Americas
Energy Marketing, LP, and Mirant Services, LLC, hold unliquidated,
unsecured, intercompany claims against Mirant Americas totaling
$600,000,000.  Deutsche Bank wants proof of those intercompany
claims or Deutsche Bank wants those claims disallowed.

Susheel Kirpalani, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
in New York, New York, tells Judge Lynn of the U.S. Bankruptcy
Court for the Northern District of Texas that the Bankruptcy Code
and Bankruptcy Rules contain certain requirements designed to
ensure disclosure and finality throughout the reorganization
process.  Examples include filing deadlines or "bar dates" for
asserting claims and requirements that debtors file schedules
disclosing the extent of their liabilities.  These mechanisms
should, when followed, provide creditors with a meaningful picture
of their obligor's financial condition, Mr. Kirpalani explains,
which can then serve as a backdrop against which a reorganization
plan can be formulated.  They also enable creditors -- and, if
appointed, their statutory creditors' committee -- to be vigilant
in ascertaining the nature of all claims competing for the assets
of their debtor.

The Bankruptcy Code and Bankruptcy Rules also impose obligations
on creditors to ensure that the estate's picture, as presented by
the debtor, includes complete information concerning the debtor's
liabilities.  Indeed, creditors must make meaningful disclosures
when filing claims and must substantiate their assertions to
enable parties in interest to ascertain whether asserted claims
are legitimate, and whether there are any defenses or offsets to
lodge in response.  These procedures have not been adequately
followed by the Debtors in these cases, both when acting as
debtor-preparer of the Schedules and as debtor-claimant asserting
intercompany claims.

            Mirant America's Schedules are Deficient

Mirant Americas' Schedules admit just one undisputed third-party
creditor, Deutsche Bank, with Claims of $45,000,000, plus
interest.  In addition to Deutsche Bank's liquidated, undisputed
claims, Mirant Americas scheduled intercompany claims asserted by
two debtor entities, MAEM and Mirant Services, as unliquidated and
contingent claims totaling $600,000,000 -- but virtually no
information is provided to ascertain the validity of these claims.  
Thus, MAEM and Mirant Services allegedly comprise as much as 93%
of the unsecured creditor body of the Mirant Americas estate, yet
Mirant America's third-party creditors have been given no
information from which to assess the legitimacy of MAEM's and
Mirant Services' assertions.

As a vigilant creditor trying to participate in Mirant Americas'
bankruptcy case, Deutsche Bank has been attempting to ascertain
the nature, extent, and validity of the potentially significant
Intercompany Claims.  Unfortunately, except for a limited degree
of responsiveness by the Court-appointed Examiner, Deutsche Bank's
overtures have been rebuffed by the Mirant Americas "fiduciaries"
to date.  Deutsche Bank is increasingly concerned about the lack
of representation by the existing fiduciaries because, as the
Debtors and the multiple creditors' committees come under
increased pressure to file one or more Chapter 11 plans, they have
little incentive to focus on an estate like Mirant Americas which
has but one scheduled third-party creditor.  However, Deutsche
Bank is entitled, under the Bankruptcy Rules, to know the extent
of Mirant America's "real" liabilities.  Mirant Americas'
Schedules simply do not provide the necessary transparency,
Deutsche Bank complains.

             Order an Intercompany Claims Bar Date

Given the advanced stage of the Debtors' Chapter 11 cases,
Deutsche Bank insists there is ample cause to impose a filing
deadline in accordance with Bankruptcy Rule 3003(c)(3) for
Intercompany Claims against Mirant Americas.  First, Rule
3003(c)(2) of the Federal Rules of Bankruptcy Procedure expressly
requires that "any creditor" whose claim is "scheduled as
disputed, contingent, or unliquidated shall file a proof of claim
. . . within the time prescribed [by the Court]."  Moreover,
establishing a deadline will enable creditors of Mirant Americas
to ascertain with certainty the extent of the competing
liabilities asserted against their Debtor.  Without the
Intercompany Claims Bar Date, Mirant Americas will be unable to
propose, and its creditors will be unable to evaluate, a Chapter
11 Plan on an informed basis.

        Alternatively, Disallow the Intercompany Claims

Deutsche Bank also objects to the Intercompany Claims on account
of, among other things, they are wholly unsubstantiated.  The
absence of any supporting documentation precludes a meaningful
examination of the range of objections that can be raised in
connection with the Claims.  In any event, Deutsche Bank says, the
Intercompany Claims are not entitled to any presumptive validity
and, in the absence of proofs of claim supported by evidence, the
Intercompany Claims should be disallowed.

In the alternative, Deutsche Bank also objects to the MAEM Claim
under Section 502(e)(1)(B) of the Bankruptcy Code, on the grounds
that the Claim appears to be for some type of reimbursement
obligation from Mirant Americas.  As a contingent reimbursement
claim, Section 502(e)(1)(B) mandates its disallowance.

                          *     *     *

Judge Lynn directs the Debtors to file with the Court, in
accordance with Section 521 of Bankruptcy Code, and Rules 1007(k)
and 1009 of the Federal Rules of Bankruptcy Procedure, amended
Schedules of Assets and Liabilities disclosing the Debtors' full
account of known prepetition intercompany claims based on:

   (a) books and records that exist today; and

   (b) any intercompany claims of which the Debtors' General
       Counsel has knowledge based on the General Counsel's
       having received written notice of the same asserted
       against Mirant Americas by any other Debtors or non-debtor
       affiliate;

The Court authorizes the Examiner appointed in the Debtors'
Chapter 11 cases, pursuant to Section 1104, to investigate the
validity and amount of the Amended Intercompany Claims including,
without limitation, any defenses, set-offs, or challenges
available to Mirant Americas, and file with the Court, a non-
confidential report setting forth the Examiners' detailed report
setting for the Examiner's detailed findings and conclusions with
respect to the Investigation.

The Debtors may seek leave of the Court, subject to the objection
of any party-in-interest, to file further amendments to the
Amended Schedules with respect to the Amended Intercompany Claims,
provided that the Debtors may not amend the Amended Schedules with
respect to the Amended Intercompany Claims absent further order of
the Court for cause shown.

Furthermore, the Court directs the Debtors to provide the
Examiner -- including his professional advisors -- with reasonable
access to any and all information required for the Examiner to
conduct his investigation and to prepare the Mirant Americas
Intercompany Claims Report including, without limitation, access
to the Debtors':

   -- books and records;
   -- financial statements;
   -- accounting software;
   -- contracts and other supporting documents;
   -- board resolutions;
   -- minutes;
   -- inter-corporate reconciliation policies and procedures; and
   -- in-house, legal, accounting, and finance personnel.

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


MOSAIC GROUP: Can Start Liquidating MCI Stock
---------------------------------------------
Jeffrey H. Mims, the chapter 11 Trustee for the estates of Mosaic
Group (US) Inc., and its debtor-affiliates sought and obtained an
approval from the Honorable Harlin De Wayne Hale of the U.S.
Bankruptcy Court for the Northern District of Texas to sell the
Debtors' MCI stock.

MCI, Inc., became the successor of Worldcom, Inc., after Worldcom
filed for bankruptcy in July of 2002.  The Debtors have an allowed
$1,350,000 claim against Worldcom.  According to Worldcom's Plan
of Reorganization, Mosaic will get a cash payment and some MCI
stock.  

The Trustee wants to liquidate the MCI stock it now holds to get
the maximum market rates.  Morgan Stanley will facilitate the sale
of the MCI shares for a $1,250 fee.

Headquartered in Irving, Texas, Mosaic Group (US) Inc., a world-
leading provider of results-driven, measurable marketing solutions
for global brands, filed for chapter 11 relief on December 17,
2002 (Bankr. N.D. Tex. Case No. 02-81440).  Charles R. Gibbs,
Esq., David H. Botter, Esq., and Kevin D. Rice, Esq., at Akin,
Gump, Strauss, Hauer & Feld, represent the Debtors in their
restructuring efforts.  When the Company filed for protection from
its creditors, it estimated debts and assets of over $100 million
each.  Mosaic Group, Inc. -- http://www.mosaic.com/-- also sought  
and obtained protection under the Companies' Creditors Arrangement
Act in Canada.  On June 15, 2004, Jeffrey H. Mims was appointed as
chapter 11 Trustee.


NEW SKIES: Wants to Amend Bank Loan via Deutsche Bank on IPO
------------------------------------------------------------
New Skies Satellites B.V. (NYSE:NSK) (AEX:NSK), the global
satellite communications company, is seeking an amendment to its
existing credit facilities via Deutsche Bank.  The amendment is
being sought in connection with the proposed initial public
offering of New Skies Satellites Holdings Ltd., its indirect
parent company, and will seek, among other changes, an increase in
the size of the revolving credit facility, new financial covenant
levels and a reduction in pricing on the facilities.

A registration statement relating to the initial public offering
of New Skies Satellites Holdings Ltd.'s securities has been filed
with the U.S. Securities and Exchange Commission but has not yet
become effective.  These securities may not be sold nor may offers
to buy be accepted prior to the time the registration statement
becomes effective.  This communication shall not constitute an
offer to sell or the solicitation of an offer to buy nor shall
there be any sale of these securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any
such jurisdiction.

                        About the Company

New Skies Satellites is one of only four fixed satellite
communications companies with truly global satellite coverage,
offering data, video, Internet and voice communications services
to a range of telecommunications carriers, broadcasters, large
corporations, Internet service providers and government entities
around the world.  New Skies has five satellites in orbit and
ground facilities around the world.  The company also has secured
certain rights to make use of additional orbital positions for
future growth. New Skies is headquartered in The Hague, The
Netherlands, and has offices in Hong Kong, New Delhi, Sao Paulo,
Singapore, Sydney and Washington, D.C.

                          *     *     *

As reported in the Troubled Company Reporter on Oct. 26, 2004,
Moody's Investors Service assigned a B2 senior implied rating to
New Skies Satellites, BV, reflecting the substantial financial
risk associated with its proposed recapitalization, significant
operating risk inherent in the satellite industry, and challenging
competitive environment.

As part of this rating action, Moody's initiates these ratings:

   * B2 -- Senior Implied Rating
   * B1 -- $75 million senior secured revolving credit facility
   * B1 -- $460 million senior secured term loan
   * B3 -- $160 million senior unsecured floating rate note
   * Caa1 -- $125 million senior subordinate notes
   * B3 -- Senior Unsecured Issuer Rating
   * SGL-3 -- Speculative Grade Liquidity Rating

The outlook for all ratings is stable.

New Skies' B2 senior implied rating reflects high leverage and a
weak fixed charge coverage.  Moody's expects New Skies' to take on
leverage of approximately 12x debt to free cash flow (Total
debt/CFFO less CAPEX less dividend) by the end of the year, and
fixed charge coverage (EBITDA-CAPEX/Cash Interest) to fall to
about 1.9x. Moody's is concerned that these high fixed debt
payments will weaken New Skies' ability to react to an increasing
competitive environment, and potential operational shortfall.  The
rating also incorporates rising costs of insurance across the
industry, which may offset any margin gains resulting from
improved operational efficiency or higher utilization rates.


NEW VISUAL: Needs $820,000 to Operate Until April
-------------------------------------------------
New Visual Corporation entered into a loan agreement with Double U
Master Fund LP in December 2004.  New Visual borrowed $300,000
from Double U.  The principal amount of the loan and any accrued
and unpaid interest is due and payable on June 24, 2005.  The
Company may prepay the loan in whole or in part at any time
without penalty.  Interest on the principal amount of the loan
outstanding accrues at the annual rate of 15% and is payable on
the earlier of March 24, 2005 or the maturity of the loan, or upon
prepayment of the principal.  The Company received net proceeds of
$267,000 from this loan following the payment of due diligence
fees and transaction related fees and expenses.  Part of the
proceeds of this loan were used to pay down and retire the line of
credit from Melton Management Ltd.

In September 2004, the Company entered into a loan agreement with
Melton Management Ltd., pursuant to which it borrowed $250,000
from Melton.  The principal amount of the loan and any accrued and
unpaid interest is due and payable on March 24, 2005.  The Company
may prepay the loan in whole or in part at any time without
penalty.  Interest on the principal amount of the loan outstanding
accrues at the annual rate of 15% and is payable on the earlier of
December 24, 2004 or the maturity of the loan, or upon prepayment
of the principal.  New Visual received net proceeds of
$220,000 from this loan following the payment of transaction
related fees and expenses.

In July 2004, New Visual entered into a revolving line of credit
agreement with Wells Fargo Bank, National Association, which
allows it to borrow up to $100,000 on a revolving basis. Interest
on any amount borrowed under the line of credit accrues at a
floating rate equal to the prime rate set by the bank plus a
margin of .500% and is payable monthly beginning in Sept. 2004.  
The line of credit terminates on August 10, 2005, at which time
any outstanding principal and any accrued and unpaid interest is
due and payable.  The Company's obligations under the line of
credit are secured by funds deposited with the bank by one of its
officers and directors.  New Visual has agreed to indemnify that
officer and director for any losses or expenses he may incur as a
result of providing security for the line of credit.

                           Fund Needs

Notwithstanding the proceeds of the loans described, New Visual
needs to raise a minimum of $820,000 on an immediate basis in
order to maintain its operations as presently conducted through
April 30, 2005.  If unable to raise this amount, New Visual
Corporation will not be able to maintain operations as presently
conducted and may cease operating as a going concern.  Unless the
Entertainment Business generates revenues, New Visual will need to
raise an additional $3 million to $4 million to realize its
business plan as contemplated and complete the design and testing
of a commercially deployable version of the Semiconductor
Technologies and its eventual commercialization.

The Company has no commitments for any such financing, and there
can be no assurance that additional capital will be available to
it on commercially acceptable terms, or at all.  Management also
intends to attempt to raise funds through private sales of common
stock and borrowings.  The inability to obtain such financing will
have a material adverse effect on the Company's business, its
operations and future business prospects.  It is also anticipated
that any successful financing will have a significant dilutive
effect on existing stockholders.

                      Going Concern Doubt

The independent registered public accounting firm's report
accompanying New Visual's financial statements for the year ended
October 31, 2004, includes an explanatory paragraph relating to
the uncertainty of the Company's ability to continue as a going
concern, which may makes it more difficult for the Company to
raise additional capital.  Its auditors believe that there are
conditions that raise substantial doubt about the Company's
ability to continue as a going concern.

New Visual Corporation is developing advanced transmission
technology to enable data to be transmitted across copper
telephone wire at speeds and over distances that exceeds those
offered by leading DSL technology providers.  The Company intends
to market this novel technology to leading equipment makers in the
telecommunications industry.  

Through its wholly owned subsidiary, NV Technology, the Compaqny
intends to design, develop, manufacture and license semiconductor
hardware and software products based upon our Semiconductor
Technologies.  

Through its wholly owned subsidiary, NV Entertainment, the Company
recognized in the year ended October 31, 2004, gross profit from
the revenues from the hit feature-length documentary, STEP INTO
LIQUID.  According to its distributor, the Film has grossed
$3.7 million in box office receipts since its domestic theatrical
release in August 2003.  Since April 2004 it has been, and now
remains, in wide DVD release domestically, grossing approximately
$14 million in sales and rentals.  The Film is currently in
theatrical distribution internationally.


NORTEL NETWORKS: Completes Asset Transfer to Flextronics
--------------------------------------------------------
Flextronics (Nasdaq: FLEX) and Nortel Networks (NYSE: NT; TSX)
successfully completed the transfer of the manufacturing
operations and related assets including product integration,
testing, repair and logistics operations of Nortel's Systems House
in Montreal to Flextronics, as part of a previously announced
agreement.

"We are thrilled to welcome this world-class workforce with
extensive industry experience," said Michael Marks, Flextronics'
Chief Executive Officer.  "This represents a significant increase
in our complex, multi-technology telecom and network capabilities.
Coupled with the optical design resources that we acquired last
November, we have further diversified our product mix and
strengthened our position as an end-to-end solutions provider in
the telecom market."

"The successful transition of these operations to Flextronics is
an important milestone," said Sue Spradley, president, Global
Operations, Nortel.  "This step moves us closer to completing the
journey we began five years ago to divest substantially all of our
manufacturing activities in order to focus our resources on those
areas that offer Nortel true competitive differentiation.  Those
areas include the introduction of new products and the deployment,
network integration and support of complex, multi-technology
network solutions."

Both companies are working towards closing the balance of the
agreement in the first half of 2005.  This is subject to the
implementation of systems and processes and to completion of the
required information and consultation processes with relevant
employee representatives.

                        About Flextronics

Headquartered in Singapore (Singapore Reg. No. 199002645H),
Flextronics -- http://flextronics.com/-- is the leading  
Electronics Manufacturing Services (EMS) provider focused on
delivering innovative design and manufacturing services to
technology companies. With fiscal year 2004 revenues of USD$14.5
billion, Flextronics is a major global operating company that
helps customers design, build, ship, and service electronics
products through a network of facilities in 32 countries on five
continents. This global presence provides customers with complete
design, engineering, and manufacturing resources that are
vertically integrated with component capabilities to optimize
their operations by lowering their costs and reducing their time
to market.

                         About Nortel

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

                          *     *     *

As reported on the Troubled Company Reporter on Jan. 31, 2005,
Standard & Poor's Ratings Services affirmed its 'B-' credit rating
on Nortel Networks Lease Pass-Through Trust certificates series
2001-1 and removed it from CreditWatch with negative implications,
where it was placed Dec. 8, 2004.


NORTHWESTERN CORP: Settles Litigation & Bankr. Claims with Magten
-----------------------------------------------------------------
NorthWestern Corporation d/b/a NorthWestern Energy (Nasdaq: NWEC)
reached an agreement in principle which would settle all pending
legal actions, appeals, claims and disputes by and among
NorthWestern, Magten Asset Management Corporation and Law
Debenture Trust Company of New York LLC.  The settlement is
subject to completing mutually acceptable definitive documentation
and ultimate approval by the United States Bankruptcy Court for
the District of Delaware.

According to Gary G. Drook, NorthWestern President and Chief
Executive Officer, the settlement, if approved by the Bankruptcy
Court, will resolve the only pending appeal of NorthWestern's
confirmed plan of reorganization and resolves a significant amount
of pending legal actions, claims and disputes brought by Magten
and Law Debenture, in its capacity as Indenture Trustee on behalf
of itself and the "non-accepting" Class 8(b) holders of the
Montana Power QUIPs securities.

"As NorthWestern Energy moves forward from its reorganization, it
is important that we appropriately address pending litigation and
disputed claims remaining from the bankruptcy," Mr. Drook said.  
"We believe this settlement is in the best interest of the Company
and its shareholders as it removes the uncertainty associated with
this protracted legal dispute that, if continued, would have
resulted in significant cost to the Company."

The agreement calls for NorthWestern to distribute to Law
Debenture as the Indenture Trustee for its own benefit and on
behalf of Magten and other non- accepting Class 8(b) QUIPS holders
382,732 shares of NorthWestern common stock and 710,449 warrants
not yet distributed to Class 8(b) claimants that would have been
distributed to those holders had they accepted the Company's
confirmed plan of reorganization.  Also, NorthWestern will
distribute to the Indenture Trustee for itself and on behalf of
Magten and the non- accepting Class 8(b) QUIPS holders $17.4
million worth of common stock (or approximately 870,000 shares)
which were set aside for such QUIPS holders in reserves
established for Class 9 pending litigation claims.  Any fees and
expenses asserted to be owed to Law Debenture as the Indenture
Trustee will be paid from the distribution of the stock and
warrants.  NorthWestern will make no cash distributions as part of
the settlement.

NorthWestern will be filing a motion seeking approval of the
settlement and will be asking the Bankruptcy Court to approve the
settlement as soon as possible after appropriate notice to
NorthWestern's creditors and parties-in- interest.

Headquartered in Sioux Falls, South Dakota, NorthWestern
Corporation (Pink Sheets: NTHWQ) -- http://www.northwestern.com/
-- provides electricity and natural gas in the Upper Midwest and
Northwest, serving approximately 608,000 customers in Montana,
South Dakota and Nebraska. The Debtors filed for chapter 11
protection on September 14, 2003 (Bankr. Del. Case No. 03-12872).
Scott D. Cousins, Esq., Victoria Watson Counihan, Esq., and
William E. Chipman, Jr., Esq., at Greenberg Traurig, LLP, and
Jesse H. Austin, III, Esq., and Karol K. Denniston, Esq., at Paul,
Hastings, Janofsky & Walker, LLP, represent the Debtors in their
restructuring efforts. On the Petition Date, the Debtors reported
$2,624,886,000 in assets and liabilities totaling $2,758,578,000.
The Court entered a written order confirming the Debtors' Second
Amended and Restated Plan of Reorganization, which took effect on
Nov. 1, 2004.

At Sept. 30, 2004, Northwestern Corp.'s balance sheet showed a
$602,981,000 stockholder's deficit, compared to a $585,951,000
deficit at Dec. 31, 2003.


NRG ENERGY: NRG McClain Wants Chapter 11 Case Dismissed
-------------------------------------------------------
NRG McClain, LLC, does not operate any businesses or hold any
assets other than $1,311,536.81 in sale proceeds.

As previously reported, the U.S. Bankruptcy Court for the Southern
District of New York approved the sale of substantially all of NRG
McClain's Assets to Oklahoma Gas & Electric Company for
$159,950,000.  A substantial portion of the Sale Proceeds was paid
to NRG McClain's prepetition secured lenders in satisfaction of
McClain's outstanding secured debt obligations under a prepetition
credit agreement.  The remaining portion of the Sale Proceeds will
be used by McClain to satisfy certain administrative expense
obligations that were expected to accrue prior to the closing of
the Bankruptcy Case.

Once the NRG McClain Funds are distributed, NRG McClain's estate
will be fully administered.

Ryan Blaine Bennett, Esq., at Kirkland & Ellis, LLP, in New York,
asserts that the interests of creditors and NRG McClain would be
better served by the dismissal of NRG McClain's Chapter 11 case
in accordance with Sections 305(a) and 1112(b) of the Bankruptcy
Code.

Bankruptcy courts are specifically empowered to dismiss a case
for cause where there is an "absence of a reasonable likelihood
of rehabilitation," or for "inability to effectuate a plan."

Moreover, the aggregate amount of allowed secured claims in NRG
McClain's Chapter 11 case well exceeds the undistributed amount
of the McClain Funds.  Consequently, there is no recovery
available from the NRG McClain Funds to satisfy any outstanding
administrative expense claims, priority claims, or any other
general unsecured claims.  If NRG McClain were to propose a
Chapter 11 plan of liquidation, Section 1129(a)(9) of the
Bankruptcy Code would remain unsatisfied.  Thus, that plan could
not be confirmed.

Alternatively, a case may be dismissed pursuant to Section
305(a)(1) of the Bankruptcy Code if the interests of creditors
and the debtor would be better served by the dismissal.

Mr. Bennett notes that the dismissal of NRG McClain's Chapter 11
case will terminate the accrual of unnecessary administrative
expenses and is in the best interests of the Debtors and their
creditors.

Accordingly, NRG McClain asks the Court to dismiss its Chapter 11
case as soon as the distribution of the NRG McClain Funds is
completed.

Within five days after the final distribution of the NRG McClain
Funds, NRG McClain will file an affidavit attesting that the
distributions have been completed and that there are no
outstanding fees owed to the U.S. Trustee.

The Bankruptcy Court would retain limited jurisdiction over
administrative matters like professional fees and certain other
limited distributions.

NRG Energy, Inc., owns and operates a diverse portfolio of
power-generating facilities, primarily in the United States.  Its
operations include baseload, intermediate, peaking, and
cogeneration facilities, thermal energy production and energy
resource recovery facilities.  The company, along with its
affiliates, filed for chapter 11 protection (Bankr. S.D.N.Y. Case
No. 03-13024) on May 14, 2003.  The Company emerged from chapter
11 on December 5, 2003, under the terms of its confirmed Second
Amended Plan. James H.M. Sprayregen, Esq., Matthew A. Cantor,
Esq., and Robbin L. Itkin, Esq., at Kirkland & Ellis, represented
NRG Energy in its $10 billion restructuring.

                         *     *     *

As reported in the Troubled Company Reporter on Dec. 14, 2004,
Standard & Poor's Ratings Services assigned its 'CCC+' rating to
NRG Energy Inc.'s (NRG; B+/Stable/--) proposed $400 million
convertible perpetual preferred stock.  The outlook is stable.


OMNICARE INC: S&P Rates Proposed $345M Preferred Securities at BB
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' rating to
Omnicare Inc.'s proposed $345 million of Series B 4.00% trust
preferred income equity redeemable securities (PIERS) due
June 15, 2033.  These securities are being offered in exchange for
an existing PIERS issue.  Unlike the existing PIERS, these are
primarily convertible into cash.  A change in accounting treatment
for these "contingently convertible" securities has rendered them
less attractive to issuers as the potential conversion is now
dilutive to earnings.  Otherwise, the new issue is identical to
the old PIERS.

"All the ratings assigned to Omnicare, including this one, remain
on CreditWatch with negative implications where they were placed
May 24, 2004, in light of the company's hostile bid for 'BB' rated
competitor NeighborCare, Inc.," said Standard & Poor's credit
analyst David Lugg.  If successful, debt could increase by
$1.5 billion, markedly weakening credit measures, with total debt
to EBITDA possibly rising to almost 4.5x, from 2.5x.  At the same
time, changes in state Medicaid practices have pressured margins
and the implementation of the Medicare drug benefit in 2006 will
have an uncertain impact.


ORMET CORP: Steelworkers Demand Fair Settlement
-----------------------------------------------
The United Steelworkers of America -- USWA -- said that despite a
statement released by Ormet Corporation on Feb. 7, the last
remaining obstacle preventing a fair contract settlement and an
end to the current labor dispute between the Union and Wheeling-
based company is, in fact, Ormet management.

Ormet's statement, read in part that, "Ormet stands ready to make
every effort to resolve, in good faith, the issues that remain on
the table."

USWA District 1 Director David McCall called the statement
"ironic."

"Ormet took our jobs hostage and forced our members into the
street by insisting on massive, unnecessary concessions," he said.  
"Of course, proclaiming the company's 'good faith' publicly does
not necessarily make it so."

Likewise, Mr. McCall pointed out that no amount of self-
congratulation by Ormet management will make the company's plan to
reorganize under Chapter 11 Bankruptcy protection any more viable
without an agreement with the USWA.

Mr. McCall said that the Union has made a number of contract
proposals based on the principles that enabled other bankrupt
Steelworker employers to emerge from bankruptcy.  The USWA's
proposal to Ormet would preserve as many jobs as possible and
largely retain existing levels of wages and benefits for active
members and retirees.

"Laying off employees, contracting out jobs, cutting wages,
slashing retiree health insurance benefits and reducing production
capacity for the sake of short-term savings will not solve Ormet's
long-term financial problems," Mr. McCall said.  "In recent years,
the USWA assisted other financially strapped companies in
navigating their way out of bankruptcy, and we are trying to do
the same with Ormet.  The difference in the other cases is that
management, unlike Ormet's management, was willing to work
constructively with the USWA."

"Our members understand the need to make sacrifices when
necessary," Mr. McCall said, "but by insisting on these major
concessions and refusing to consider our proposals, Ormet has not
demonstrated anything but its short-sighted desire to line the
pockets of company executives on the backs of our members and
retirees."

Headquartered in Wheeling, West Virginia, Ormet Corporation --
http://www.ormet.com/-- is a fully integrated aluminum  
manufacturer, providing primary metal, extrusion and thixotropic
billet, foil and flat rolled sheet and other products. The
Company and its debtor-affiliates filed for chapter 11 protection
on January 30, 2004 (Bankr. S.D. Ohio Case No. 04-51255).  Adam C.
Harris, Esq., in New York, represents the Debtors in their
restructuring efforts. When the Company filed for bankruptcy
protection, it listed $50 million to $100 million in estimated
assets and more than $100 million in total debts.


OVERSEAS SHIPHOLDINGS: Moody's Confirms Ba1 Senior Unsec. Rating
----------------------------------------------------------------
Moody's Investors Service confirmed the ratings of Overseas
Shipholding Group, Inc., -- senior unsecured and senior implied at
Ba1.  Moody's also changed the rating outlook to negative from
stable.  This completes the ratings review opened on December 13,
2004, following the announcement by the company of its acquisition
of Stelmar Shipping (not rated) for $1.36 billion.

The ratings reflect the size and scale of Overseas Shipholding's
tanker shipping operations, expectations of near term free cash
flow to reduce a substantial portion of the incremental debt
associated with the Stelmar acquisition, Overseas Shipholding's
maintenance of a favorable liquidity profile, and the limited
integration risk of Stelmar's product tanker operations.

The ratings anticipate that Overseas Shipholding will return to
pre-acquisition levels of debt and liquidity within the next year.  
The ratings are balanced by the risks associated with the highly
cyclical shipping sector in which the company operates, the
volatility of charter rates within that sector, and the Company's
use of short-term spot charters to employ the majority of its
fleet.

While in the current environment, Overseas Shipholding can
generate strong free cash flow to service the incremental debt
associated with the Stelmar acquisition, Moody's believes that
overall credit metrics could be significantly weakened in the
event of a market downturn that resulted in charter rates similar
to those seen over the past decade.  Moody's notes that the market
is at relatively high charter rates today, but average rates over
the cycle would produce much weaker credit metrics.

The negative outlook reflects the substantial increase in debt to
fund the acquisition, and the company's reliance on continued
strong shipping market conditions to generate the free cash flow
for debt reduction.  The potential for other meaningful
investments over the near term also contributes to the negative
outlook.

Ratings may be downgraded if shipping market conditions
deteriorate meaningfully in the near-term, if free cash flow from
operations and asset sales are insufficient to reduce debt to
below $1 billion by fiscal year end 2005, or if lease-adjusted
debt does not reduce rapidly from the current pro forma level of
2.7x EBITDAR.  The ratings could also be pressured down if the
company were to take on another large acquisition over the near
term.

Moody's also notes that the senior unsecured rating may be
separately subject to downward notching because of the relatively
high level of secured debt in the Company's capital structure, to
the extent that the company does not reduce such levels of senior
secured debt, which Moody's expects over the near term.  

The rating outlook could be stabilized if the company achieves its
target of reducing debt to below $1 billion within the next twelve
months, with lease-adjusted debt/EBITDAR below 2.0x, while having
demonstrated a smooth integration of the Stelmar fleet.

To finance the acquisition of Stelmar Shipping, OSG's total debt
nearly doubled to $1.8 billion.  As a result, Moody's estimates
OSG's pro forma leverage (lease-adjusted debt/EBITDAR) at fiscal
2004 will increase to over 2.7x, from about 1.9x as of September
2004.  Moody's notes that OSG's operating results during 2004
benefit from an unusually-high charter rate environment which
serves to moderate the increase in the pro forma leverage
calculations.

However, the rating agency expects tanker charter rates to fall
over the next 6-18 months, which would imply the potential for
high leverage even as the Company reduces its indebtedness.
Nevertheless, even with lower freight rates anticipated in both
the crude oil tanker market (Overseas Shipholding's current
primary market) as well as in the product tanker markets that
drive a substantial portion of Stelmar's revenue, Moody's believes
that OSG will achieve substantial free cash flow generation.  This
free cash flow, along with proceeds from contemplated asset sales,
are expected to be applied reduce debt over the near term. The
company has targeted reducing debt to below $1.0 billion by the
end of fiscal year 2005.

The ratings also consider Overseas Shipholding's maintenance of a
relatively strong liquidity profile.  Prior to funding the
acquisition, Overseas Shipholding had liquidity (cash, revolver
availability, and tax-adjusted Capital Construction Fund balances)
of about $1.3 billion.  The Company utilized $500 million of its
cash in funding the Stelmar acquisition.  As part of the
acquisition, Overseas Shipholding also increased its bank revolver
to $1.3 billion.

In monitoring Overseas Shipholding's capital structure, Moody's
will place particular focus on the company's levels of off-balance
sheet financing, which is estimated at over $500 million as of
fiscal 2004.  A substantial portion of the Company's fleet
(estimated at 27% pro forma the Stelmar acquisition) is chartered-
in, predominantly on short- to medium-term time charter bases.
This suggests a significant interest on the part of the company to
use such vehicles to gain access to additional tonnage.

Also, Overseas Shipholding contemplates certain sale and leaseback
transactions; while a sale and leaseback would reduce balance
sheet debt as well as potential asset value exposure on owned
vessels, Overseas Shipholding's adjusted debt and off balance
sheet exposure would increase proportionately.  In Moody's view,
any material degree of additional reliance on operating leases
would represent a deterioration in credit fundamentals, as implied
by increased lease-adjusted debt levels.

The senior unsecured notes are rated Ba1, the same as the senior
implied rating.  The majority of Overseas Shipholding's debt
(about 74%, pro forma) is unsecured and issued at the holding
company level including about $1.3 billion of unsecured revolving
credit agreement (not rated).  Overseas Shipholding's $472 million
of secured debt is collateralized by only about one-fourth of the
fleet, implying a substantial amount of unencumbered assets
supporting the senior unsecured notes.

Still, Moody's considers the significant portion of senior secured
debt in the pro forma capitalization to be high. The senior
unsecured ratings may be notched below the senior implied rating
should the percentage of senior secured debt to total debt remain
in this range of 25%.  However, Moody's anticipates that debt
reduction will largely be directed towards senior secured debt,
thereby lowering the percentage of senior secured debt to total
debt in the capital structure

The ratings confirmed are:

   * $150 million 7.5% senior unsecured notes, due 2024, Ba1,

   * $200 million 8.25% senior unsecured notes due 2013, Ba1,

   * $85 million 8.75% senior unsecured notes due 2013, Ba1,

   * Senior implied rating of Ba1, and

   * Unsecured issuer rating of Ba1

Overseas Shipholding Group, Inc., headquartered in New York City,
New York, is one of the world's leading independent bulk shipping
companies engaged primarily in the ocean transportation of crude
oil and petroleum products, operating a fleet of over 100 vessels.


PARMALAT USA: Commences Adversary Proceeding Against Tuscan/Lehigh
------------------------------------------------------------------
Parmalat USA Corp. and Farmland Dairies, LLC, seek to avoid as a
fraudulent transfer a supply agreement between Parmalat USA and
Tuscan/Lehigh Dairies, Inc., executed within one year before the
U.S. Debtors' Petition Date.  Parmalat USA and Farmland also want
to recover amounts owed by Tuscan and disallow Tuscan's claims
arising out of their rejection of the Supply Agreement.

Parmalat USA and Farmland further ask the Court to disallow any
claim filed by Tuscan against them until the time it has already
paid all amounts for which it is liable in connection with the
fraudulent transfer.

Gary T. Holtzer, Esq., at Weil, Gotshal & Manges, LLP, in New
York, relates that on May 30, 2003, Parmalat USA and Tuscan
entered into the Supply Agreement, pursuant to which Parmalat USA
agreed to process, package, and load milk products under the
Tuscan label at Farmland's Sunnydale facility in Brooklyn, New
York.

Mr. Holtzer explains that the U.S. Debtors were insolvent or their
property constituted unreasonably small capital within the meaning
of Section 548 of the Bankruptcy Code and Section 25:2-29 of the
New Jersey Uniform Fraudulent Transfer Act in the year prior to
their Petition Date, including when the Supply Agreement was
executed.

On June 2, 2004, Tuscan filed a request to compel Parmalat USA to
assume or reject the Supply Agreement.  On June 30, 2004, the
Court approved a stipulation dated June 29, 2004, between Tuscan
and Parmalat USA wherein the parties agreed to Parmalat USA's
rejection of the Supply Agreement effective as of Sept. 30, 2004.

On October 28, 2004, Tuscan filed a proof of claim against
Parmalat USA, and an identical claim against Farmland asserting
general unsecured claims against each of the Debtors for
$57,052,568 for alleged damages arising from the rejection of the
Supply Agreement.

Mr. Holtzer notes that as of the Contract Date, the Processing Fee
of $0.28 per gallon of fluid milk fixed by the Supply Agreement
was far below the market value of the Co-Packing and other
services required from Parmalat USA.  According to Tuscan, in
2005, it would cost them $0.43 to 0.44 per gallon of fluid milk to
obtain similar services in the open market.  For the 2005-2006
contract year, Tuscan's calculations show that the discrepancy
between the Processing Fee set by the Supply Agreement and the
market price for similar services will be more than $4.9 million.

As set forth in the Rejection Damage Claims, in each successive
year, Tuscan estimates that the market price would rise by an
additional penny per gallon of fluid milk, further increasing the
discrepancy between the market price and the contract price each
and every year.  Tuscan states that the difference between the
value of the services it was entitled to receive under the Supply
Agreement, and the value that it is required to pay aggregates
over $57 million.

Tuscan is not obligated and gave no consideration for the licenses
and easements provided to them, to Beyer Farms, Inc., and to any
other Tuscan designees under the Provided Facilities feature of
the Supply Agreement.  The fair market value for the use of the
Provided Facilities is estimated to be not less than $175,000 per
year, Mr. Holtzer says.

Mr. Holtzer contends that Tuscan gave less than the equivalent
value in exchange for the obligations incurred under the Supply
Agreement.  Moreover, the Supply Agreement constituted a transfer
by the U.S. Debtors of an interest in property that occurred, and
an obligation that they incurred, within one year before their
Petition Date.

Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- generates more than 7 billion  
euros in annual revenue.  The Parmalat Group's 40-some brand
product line includes milk, yogurt, cheese, butter, cakes and
cookies, breads, pizza, snack foods and vegetable sauces, soups
and juices and employs over 36,000 workers in 139 plants located
in 31 countries on six continents.  The Company filed for chapter
11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No.
04-11139).  Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at
Weil Gotshal & Manges LLP, represent the Debtors in their
restructuring efforts. When the U.S. Debtors filed for bankruptcy
protection, they reported more than $200 million in assets and
debts. (Parmalat Bankruptcy News, Issue No. 43; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


PEGASUS SATELLITE: Wants to Settle Dispute with Secured Lenders
---------------------------------------------------------------
As previously reported, the Senior Secured Lenders sought payment
of default interest alleging that the Default Interest is due and
owing to the:

    (a) the Senior Term Lenders under the terms of the Senior
        Credit Agreement for $2,312,067; and

    (b) the Revolving Lenders under the terms of the Revolving
        Credit Agreement for $108,000.

The Senior Lenders also sought payment of Prepayment Amounts due
and owing under the terms of the:

    (a) the Senior Credit Agreement for $8,955,000; and

    (b) the Revolving Credit Agreement for $540,000.

Similarly, Wilmington Trust Company, on behalf of the Junior
Secured Lenders, sought payment of a Default Interest under the
terms of the Junior Credit Agreement for $791,579 and a
Prepayment Amount under the Junior Credit Agreement for
$2,157,138.

The Official Committee of Unsecured Creditors objected to the
Secured Lenders' requests.

By this motion, the Pegasus Satellite Communications, Inc. and its
debtor-affiliates ask the United States Bankruptcy Court for the
District of Maine to approve a settlement agreement with the
Creditors Committee and a bank steering committee of lenders.  
Pursuant to the Stipulation, the parties agree that:

    (a) The Debtors will pay:

        * $9,229,296 to the Senior Secured Lenders in satisfaction
          of the Senior Lenders' Prepayment Premium.  If not paid
          within the two-day period after Court approval of the
          Stipulation, the Senior Settlement Amount will accrue
          interest of $3,161 per diem for each day until the
          amount is paid in full.  No amount will be payable by
          the Debtors on account of the Senior Default Interest
          Amount; and

        * $2,096,773 to the Junior Secured Lenders in satisfaction
          of the Junior Prepayment Premium.  To the extent the
          Junior Settlement Amount is not paid within a two-day
          period after the Court approves the Stipulation,
          interest of $718 per diem will accrue for each day until
          the amount is paid in full.  No amount will be payable
          by the Debtors on account of the Junior Default Interest
          Amount.

        Approximately $8,704,407 of the Senior Settlement Amount
        will be paid to Bank of America, N.A., as administrative
        agent, as a voluntary prepayment amount.  Bank of America
        will distribute the amount to the Tranche D Lenders.
        Approximately $524,889 of the Senior Settlement Amount
        will be paid to Madeleine, LLC, who will distribute the
        amount to the Revolving Lenders.

    (b) Within two business days after the approval of the
        Stipulation has become final and payment of the Senior
        Settlement Amount and Junior Settlement Amount are
        received by the Senior Lenders and Wilmington Trust, the
        Bank Steering Committee and Wilmington Trust will withdraw
        the Premium Motions, with prejudice.

    (c) All reasonable professional fees and expenses incurred
        by the Senior Lenders and Wilmington Trust in connection
        with the Debtors' Chapter 11 cases will be paid by the
        Debtors within 10 calendar days of receipt of an invoice
        for the professional fees and expenses by the Debtors
        and counsel to the Committee.

    (d) Upon receipt by the Senior Lenders and Wilmington Trust of
        the Senior and Junior Settlement Amounts, the Debtors will
        no longer be required to comply with the provisions of the
        Cash Collateral Order with respect to the Senior Lenders
        and Wilmington Trust, and the Cash Collateral Order will
        no longer be in force or effect with respect to the
        Debtors' obligations to the Senior Lenders and Wilmington
        Trust, but all obligations of the Debtors contained in the
        Cash Collateral Order with respect to the Committee will
        remain in full force and effect.

Robert J. Keach, Esq., at Bernstein, Shur, Sawyer & Nelson, in
Portland, Maine, relates that the parties each came to the
conclusion that the Secured Lenders' claim for the Prepayment
Premiums is very strong and the claim for the Default Interest
Amounts is considerably weaker.  Accordingly, the Prepayment
Premiums are being paid almost in their entirety and the claim for
Default Interest Amounts is being waived.

While the Creditors' Committee believes that it has meritorious
objections to the payment of the Prepayment Amounts, on balance
the parties believe that the Secured Lenders have a strong case.
Mr. Keach reminds that Court that it has already ruled that the
prepayments were "voluntary" prepayments payable under the loan
documents.  The 2% to 3% Prepayment Premiums sought by the
Secured Lenders appear to be within the range that courts have
upheld as reasonable.  Moreover, the bulk -- i.e., over 80% -- of
the Prepayment Premiums is being sought by the Senior Lenders
whose claims are against the solvent debtor operating company.
In sum, the parties concluded that the Secured Lenders had very
strong claims with respect to the Prepayment Premium portion of
these claims.

The Stipulation also reflects the parties' belief that the claim
for the Default Interest Amounts is far harder to prove and that
claim is being waived.  While the Secured Lenders believe that
they have meritorious claims for an award of default interest, on
balance, the parties believe that the Committee has a strong case.  
The Secured Lenders received payment of their claims in full less
than four months after the Petition Date, during which time they
received both current payment of interest and fees.  In addition,
as a result of offers by DIRECTV, Inc., to purchase the Debtors'
assets for amounts far in excess of the Secured Lenders' claims,
which offers began on the Petition Date, the Secured Lenders'
ability to establish their entitlement to an additional "risk
premium" in the form of Default Interest Amounts for the entire
period between the Petition Date and the Prepayment Date is also
uncertain.

According to Mr. Keach, it is beyond question that a litigated
resolution of the Premium Motions would be both time-consuming and
exceedingly costly for the Debtors.  The Stipulation permits the
Debtors' estates to avoid the uncertainty, delay and strain on
financial resources associated with litigation of the Premium
Motions.  By contrast, if the litigation were to continue, it
would require, among other things, substantial discovery as well
as briefing and numerous appearances by counsel.

Headquartered in Bala Cynwyd, Pennsylvania, Pegasus Satellite
Communications, Inc. -- http://www.pgtv.com/-- is a leading  
independent provider of direct broadcast satellite (DBS)
television.  The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. D. Me. Case No. 04-20889) on
June 2, 2004.  Larry J. Nyhan, Esq., James F. Conlan, Esq., and
Paul S. Caruso, Esq., at Sidley Austin Brown & Wood, LLP, and
Leonard M. Gulino, Esq., and Robert J. Keach, Esq., at Bernstein,
Shur, Sawyer & Nelson, represent the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed $1,762,883,000 in assets and
$1,878,195,000 in liabilities. (Pegasus Bankruptcy News, Issue
No. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000)


PHILIP SERVICES: Asks Court to Close 34 Chapter 11 Cases
--------------------------------------------------------
Philip Services, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of Texas to close the
chapter 11 cases of these Debtors:

   * 21st Century Environmental Management, Inc. (Nevada)
     Case No: 03-37719-H2-11

   * 21st Century Environmental Management, Inc.
     Case No: 03-37726-H2-11

   * Ace/Allwaste Environmental Services of Indiana, Inc.
     Case No: 03-37727-H2-11

   * Allworth, Inc.
     Case No: 03-37729-H2-11

   * Cappco Tubular Products USA, Inc.
     Case No: 03-37733-H2-11

   * Chem-Freight, Inc.,
     Case No: 03-37735-H2-11

   * Chemical Pollution Control, Inc., of Florida
     Case No: 03-37736-H2-11

   * Chemical Pollution Control, Inc., of New York
     Case No: 03-37737-H2-11

   * Chemical Reclamation Services Inc.
     Case No: 03-37738-H2-11

   * Cousins Waste Control Corporation
     Case No: 03-37739-H2-11

   * Cyanokem, Inc.
     Case No: 03-37740-H2-11

   * D&L, Inc.
     Case No: 03-37742-H2-11

   * Delta Maintenance, Inc.
     Case No: 03-37741-H2-11

   * International Catalyst, Inc.
     Case No: 03-37743-H2-11

   * Jesco Industrial Services
     Case No: 03-37744-H2-11 61-1090856

   * Luntz Acquisition (Delaware) Corporation
     Case No: 03-37759-H2-11

   * Northland Environmental, Inc.
     Case No: 03-37745-H2-11

   * Philip Reclamation Services, Houston, Inc.
     Case No: 03-37749-H2-11

   * Philip Services/North Central, Inc.
     Case No: 03-37750-H2-11

   * Philip Transportation and Remediation, Inc.
     Case No: 03-37751-H2-11

   * PSC Industrial Services, Inc.
     Case No: 03-37756-H2-11

   * PSC Recovery Systems, Inc.
     Case No: 03-37754-H2-11

   * Republic Environmental Recycling (New Jersey), Inc.
     Case No: 03-37757-H2-11

   * Republic Environmental Recycling (Pennsylvania), Inc.
     Case No: 03-37758-H2-11

   * Republic Environmental Recycling (Transportation Group), Inc.
     Case No: 03-37760-H2-11

   * Republic Environmental Recycling (Technical Services), Inc.
     Case No: 03-37761-H2-11

   * Resource Recovery Corporation
     Case No: 03-37762-H2-11

   * Rho-Chem Corporation
     Case No: 03-37763-H2-11

   * RMF Global, Inc.
     Case No: 03-37764-H2-11

   * Serv-Tech EPC, Inc.
     Case No: 03-37766-H2-11

   * Serv-Tech EPC Subsidiary, Inc.
     Case No: 03-37768-H2-11

   * Solvent Recovery Corporation
     Case No: 03-37769-H2-11

   * Thermalkem, Inc.
     Case No: 03-37770-H2-11

   * Total Refractory Systems, Inc.
     Case No: 03-37772-H2-11

James Matthew Vaughn, Esq., at Porter & Hedges, L.L.P., in Houston
Texas, contends that:

   (1) these Debtors have resolved all matters related to their
       bankruptcy cases;

   (2) these Debtors completed distributions to creditors with
       allowed claim pursuant to the confirmed Plan;

   (3) these Debtors have paid all administrative fees;

   (4) all contested matters and adversary proceedings have been
       resolved by compromise or settlement or have otherwise been
       fully and finally adjudicated by the Court.

Philip Services Corporation, a holding company which owns directly
or indirectly a series of industrial and metals services companies
that operate throughout North America, filed for chapter 11
protection with its debtor-affiliates on June 2, 2003 (Bankr. S.D.
Tex. Case No. 03-37718).  Robert E. Richards, Esq., John F.
Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges
LLP, and Peter D. Wolfson, Esq., Robert E. Richards, Esq., at
Sonnenschein Nath & Rosenthal LLP, represent the Debtors in their
restructuring efforts.  When the Company filed for protection from
its creditors, it listed $613,423,000 in total assets and
$686,039,000 in total debts.  The Court confirmed the Debtors'
Second Amended and Restated Joint Plan of Reorganization on
Dec. 10, 2003.  The Plan became effective on Dec. 31, 2003.


PILLOWTEX CORP: Court Approves Amendment to Trenwith Engagement
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
Pillowtex Corporation and its debtor-affiliates' request to amend
the terms of the Trenwith Engagement.

As previously reported, the Court authorized the Official
Committee of Unsecured Creditors to retain Trenwith Securities,
LLC, as investment banker and advisor, to assist the Committee
and the Debtors with the marketing of certain of the Debtors'
real property and improvements in Kannapolis, North Carolina, and
the exploration of other business opportunities, pursuant to the
terms of an engagement letter between the parties.

As set forth in the Engagement Letter, Trenwith was to market the
Kannapolis Property for six weeks in exchange for a $50,000
monthly base fee and a $200,000 flat success fee -- or a lesser
fee of $160,000 with respect to certain prospective developers
who had already been identified as possibly being interested in
the Property.

Trenwith began marketing the Property on behalf of the Committee
and the Debtors in May 2004.  Three offers ultimately resulted
from Trenwith's marketing efforts, including that of Manchester
Real Estate & Construction, LLC.

The Manchester offer provides that the Debtors will retain a 1/3
equity interest in the joint venture that acquired and developed
the Property.  The Debtors and the Committee determined that the
Manchester Offer, which is subject to the submission of higher or
better offers, offered the Debtors' creditors with the best
potential upside value to be realized from the Property.  The
Court subsequently approved Manchester as the stalking horse
bidder based on its letter of intent.

In the interim, the Debtors and the Committee worked with
Manchester to prepare the numerous complicated definitive
documents needed to consummate the proposed sale.  These
definitive documents have now been finalized, executed, and
submitted to the Court in connection with a motion to approve the
transaction, scheduled to be heard on December 14, 2004.

At the time Trenwith was initially retained in May 2004, the
Debtors and the Committee did not have any definitive documents
or even a term sheet explaining how the development of the
Property through a joint venture agreement would look.  As a
result, Trenwith was forced to approach prospective interested
parties with only a conceptual outline of the JV Structure.
Consequently, given the complexity of the deal, Trenwith's
marketing efforts were inhibited.

Now that the terms of the Development Projects have been
crystallized by the Manchester offer, the Committee believes that
the estate could benefit if Trenwith were to commence another,
full blown marketing effort utilizing the Manchester Offer to its
list of prospective investors.  Since the terms of Trenwith's
engagement did not contemplate the remarketing effort or even an
auction utilizing the JV Structure, Trenwith requested, and the
Committee agreed, to amend its terms of engagement.

                           The Amendments

As compensation for the additional services provided by Trenwith
from October 1, 2004, until the entry of an order approving the
sale or disposition of the Property and approval of the JV
Structure, Trenwith will be compensated with an additional
reduced monthly advisory fee of $35,000 for each 30-day month of
service or, as applicable, on a pro-rata 30-day month.

In addition, the success fee component of Trenwith's compensation
has been restructured to specifically provide Trenwith with an
incentive to maximize the value received by the estate from the
bids received at the auction.  In the event the cash
consideration paid by any winning bidder exceeds $3,000,000,
Trenwith will be paid an Incentive Bonus equal to 1% of the
amount exceeding $3,000,000.  This represents a modest incentive
fee of $10,000 for every additional $1 million bid at the
auction.

Castle & Cooke was declared the highest bidder at the conclusion
of the auction held on Friday, December 10, 2004, for the sale of
Pillowtex's Plant 1 complex and wastewater treatment facility
located in Kannapolis, North Carolina.  The final bid was for a
purchase price of $4.25 million in cash plus a convertible
promissory note in the principal amount of $2.125 million.

Elio Battista, Jr., Esq., at Blank Rome, LLP, asserts that the
revised fee structure is fair, reasonable, and appropriately
structured to motivate Trenwith to remarket the JV Structure in a
manner to provide the greatest value to the estate.  The
Committee has consulted with the Debtors concerning the proposed
terms of the Amendments to the Trenwith Engagement, and the
Debtors indicated that they have no objection to the proposed
modifications.

Trenwith will file with the Court a fee application within two
weeks of its receipt of the payment of any Transaction Fee to
inform the Court of the consideration paid to Trenwith under the
Agreement, pursuant to the requirements of Rule 2016 of the
Federal Rules of Bankruptcy Procedure and any Court order.

Headquartered in Dallas, Texas, Pillowtex Corporation --
http://www.pillowtex.com/-- sold top-of-the-bed products to  
virtually every major retailer in the U.S. and Canada.  The
Company filed for Chapter 11 protection on November 14, 2000
(Bankr. Del. Case No. 00-4211), emerged from bankruptcy under a
chapter 11 plan, and filed a second time on July 30, 2003 (Bankr.
Del. Case No. 03-12339).  The second chapter 11 filing triggered
sales of substantially all of the Company's assets.  David G.
Heiman, Esq., at Jones Day, and William H. Sudell, Jr., Esq., at
Morris Nichols Arsht & Tunnel, represent the Debtors.  On
July 30, 2003, the Company listed $548,003,000 in assets and
$475,859,000 in debts. (Pillowtex Bankruptcy News, Issue No. 74;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


PULASKI TIRE SERVICE: Case Summary & Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Pulaski Tire Service, Inc.
        7808 Pulaski Highway
        Baltimore, Maryland 21237

Bankruptcy Case No.: 05-12596

Type of Business: The Debtor is a retailer of used tires and
                  repairs and tows trucks.

Chapter 11 Petition Date: February 7, 2005

Court: District of Maryland (Baltimore)

Debtor's Counsel: Edward Malcolm Kimmel, Esq.
                  Kimmel & Roxborough, LLC
                  7629 Carroll Avenue, Southern Suite 4
                  Takoma Park, Maryland 20912
                  Tel: (202) 872-0220
                  Fax: (202) 872 0293

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $500,000 to $1 Million

Debtor's 14 Largest Unsecured Creditors:

    Entity                    Nature of Claim       Claim Amount
    ------                    ---------------       ------------
Tire Supplies, Inc.                                     $300,000
1000 N Clayton St
Wilmington DE 19805

GMAC                          Non-purchase              $250,000
P.O. Box 660208               Money Security
Dallas TX 75266               Value of Security:
                              $78,000

Vernell DeShazo                                          $50,000
3901 Hilton Road
Baltimore MD 21215

Herman DeShazo                                           $50,000
13 Dell Court
Baltimore MD 21216

Alice DeShazo                                            $40,000
3406 Alto Road
Baltimore MD 21216

Ruth Riddick                                             $40,000
5511 Boseworth Ave
Baltimore MD 21244

Snap On Tools                                            $20,000
7301 Mount Vista Rd
Kingsville MD 21087

Constance DeShazo                                        $20,000
3406 Alto Road
Baltimore MD 21216

Aron DeShazo                                             $20,000
5511 Boseworth Ave
Baltimore MD 21207

Jean Hill                                                $15,000
1828 E Lafayette Ave
Baltimore MD 21213

Chaunte DeShazo                                          $13,000
9300 J Carsins Run
Owings Mills MD 21117

Tamera Curtis                                            $10,000
3612 Kenyon Ave
Baltimore MD 21213

Action Auto Part                                            $300
7905 Philadelphia Rd
Baltimore MD 21237

Robert DeShazo                                                $1
715 Druid Park Lake Drive
Baltimore MD 21217


QUALTEC INC: Case Summary & 17 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Qualtec, Inc.
        5010 Sunnyside Avenue, Suite 305
        Beltsville, Maryland 20705

Bankruptcy Case No.: 05-12626

Chapter 11 Petition Date: February 7, 2005

Court:  District of Maryland (Greenbelt)

Judge:  Nancy V. Alquist

Debtor's Counsel: Jerold K. Nussbaum, Esq.
                  60 West Street, Suite 220
                  Annapolis, Maryland 21401
                  Tel: (410) 280-5000
                  Fax: (410) 269-1665

Estimated Assets: $500,000 to $1 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 17 Largest Unsecured Creditors:

    Entity                                Claim Amount
    ------                                ------------
Internal Revenue Service                      $780,000
31 Hopkins Plaza, Room 1150
Baltimore, Maryland 21201

FMS                                           $180,000
4300 Georgia Avenue
Washington, DC 20011
Tel: (202) 829-0501

Wildwood Leasing                              $160,000
P.O. Box 750
California, Maryland 20619
Tel: (301) 863-8655

Kemper Associate                              $150,000
2600 Virginia Avenue, NW
Washington, DC 20037
Tel: (202) 337-5019

California EDD                                $120,000
P.O. Box 82676
Sacramento, California 94230-6276

Metters Companies                             $106,000
8200 Greensboro Drive
McLean, Virginia 22102
Tel: (703) 821-3300


UPI, Inc.                                      $81,000
2044 Veterans Boulevard
Suite 210
Kenner, LA 70062
Tel: (504) 465-0100

Onsite Companies                               $45,000
Hanover Parkway
Hanover, Maryland
Tel: (410) 579-4307

Pilero, Mazza, Pargament                       $38,000

MD Office of Unemployment Insurance            $27,000

Verizon                                        $12,000

Aetna                                           $8,900

Staples Credit Plan                             $8,700

The Hartford                                    $7,000

Key Building                                    $5,500

Sprint                                          $3,000

IOS                                             $2,400


RADVIEW SOFTWARE: Dec. 31 Balance Sheet Upside-Down by $84,000
--------------------------------------------------------------
RadView Software Ltd. (OTCBB: RDVWF), a premier provider of
solutions for verifying the performance, scalability and integrity
of business critical Web applications, reported financial results
for the quarter and year ended Dec. 31, 2004.

Revenues for the fourth quarter of 2004 were $1,329,000 compared
to $1,253,000 for the fourth quarter of 2003.  The Company's net
loss for the fourth quarter of 2004 was $866,000, compared to a
net loss of $1,087,000 for the fourth quarter of 2003.

"The fourth quarter results bring a respectable close to 2004 with
revenue and earnings in-line with our expectations," commented
Ilan Kinreich, President and CEO of RadView.  "Revenues have shown
year-over-year growth, primarily driven by software license
revenues, and we have continued to reduce our operating losses.  
We continue to see the benefits of working with OEM partners from
expanded distribution capabilities and greater diversification of
our revenue sources."

Revenues for the year ended 2004 were $4,663,000 compared to
$4,836,000 for the year ended 2003.  The Company's net loss for
the year ended 2004 was $3,780,000, or $0.19 per share, compared
to a net loss of $5,085,000 million, or $0.31 per share, for the
year ended 2003.

Ilan Kinreich continued, "In 2005, we look to build on the
positive momentum created in the second half of 2004 to reach our
objective of achieving operating profitability through revenue
growth.  We have identified several initiatives to help us reach
this goal including expansion of our distribution channel with
localized products and new OEM relationships, promotion of the
TestView product suite offering to increase average deal size, and
introduction of new products to address specific market segments.
To support these efforts, we are seeking additional financing
during the first quarter of 2005."

The Company also announced the departure of Robert Steinkrauss
from the Company's board of directors effective Feb. 3, 2005.  Mr.
Steinkrauss' resignation was due to conditions with his employer
limiting the number of outside boards on which he may participate.  
"We are thankful for the outstanding services of Mr. Steinkrauss
to the Company over the last four years and we wish him best of
luck in his future endeavors," commented Ilan Kinreich.  The
Company has commenced a search for a replacement director.

                        About RadView

RadView(TM) Software Ltd. (OTCBB: RDVWF) is a leading provider of
solutions for verifying the performance, scalability and integrity
of business-critical Web applications.  Deployed at over 1,550
customers worldwide from major industries such as financial
services, retail, manufacturing, education and technology,
RadView's award-winning products enable customers to reduce costs
while improving the quality of their Web applications throughout
the development lifecycle.  Corporate offices are located in
Burlington, Mass.  For more information visit
http://www.radview.com/or call 1-888-RADVIEW.

At Dec. 31, 2004, RadView Software's balance sheet showed an
$84,000 stockholders' deficit, compared to $1,796,000 of positive
equity at Dec. 31, 2003.


RIGGS NATIONAL: Moody's Pares Rating on Deposits from Baa3 to Ba1
-----------------------------------------------------------------
Moody's Investors Service changed the ratings of Riggs National
Corporation (subordinated to B2 from B1) and its lead bank
subsidiary, Riggs Bank N.A., (deposits to Ba1 from Baa3).  Moody's
left unchanged the ratings of Riggs Capital and Riggs Capital
Trust II preferred stock at Caa1.  The ratings remain on review,
direction uncertain.

Moody's said the downgrade followed the rejection by Riggs
National Corporation of the revised terms and conditions put
forward by PNC Financial Services Group, Inc. for it to proceed
with the merger agreement announced in July 2004.  

Moody's also noted the increased level of legal and other expenses
Riggs incurred in the fourth quarter of 2004.  While some of these
expenses were of a non-recurring nature, Moody's believes such
expenses will continue to weigh on the company's core
profitability over the foreseeable future.

Core profitability was impacted by the run-off in international
banking deposits that had been a source of cheap and stable
funding, the rating agency added.  Despite this, Moody's observed
that Riggs National's liquidity remains sound and its asset
quality indicators and regulatory capital ratios are healthy.
Moody's expects the situation at Riggs to be dynamic and will
revisit the review status within 90 days.

The ratings downgraded and remaining under review, direction
uncertain, are:

   -- Riggs National Corporation:

      * Subordinate to B2 from B1

   -- Riggs Bank N.A.:

      * Long-term deposits to Ba1 from Baa3

      * Short-term deposits to Not Prime from P-3

      * Issuer to Ba3 from Ba2

The ratings remaining under review, direction uncertain are:

   -- Riggs Bank N.A.:

      * Bank financial strength - D

   -- Riggs Capital and Riggs Capital II:

      * Trust Preferred - Caa1

Riggs National Corporation is a bank holding company headquartered
in Washington, D.C. with assets of $5.9 billion as of September
2004.


RIGGS NATIONAL: Fitch Junks Subordinated Debt & Preferred Stock
---------------------------------------------------------------
Fitch Ratings has lowered the individual ratings for Riggs
National Corporation and Riggs Bank National Association to 'D/E'
from 'D'.  All other ratings for Riggs National Corporation (RIGS;
long-term senior rating of 'B') and its subsidiaries remain
unchanged.  Additionally, Fitch revised RIGS' Rating Watch to
Negative from Evolving (for additional detail, see comment dated
Jan. 28, 2005, and available on the Fitch Ratings web site at
http://www.fitchratings.com/

The downgrade of the individual rating reflects Fitch's continuing
concerns regarding RIGS' deteriorating financial condition given
the company's recently announced fourth quarter 2004 results,
which reflected a $60 million loss.  The loss resulted from a
substantial level of expenses related to RIGS' compliance with the
Bank Secrecy Act and multiple investigations.  The company
incurred a $16 million fine (remains subject to change) to the
U.S. Department of Justice, reserved $8 million for litigation,
and incurred $17 million in expenses related to the sale of its
international businesses.

The revision to Rating Watch Negative from Evolving reflects the
news that RIGS' board of directors has unanimously rejected the
revised terms and conditions demanded by The PNC Financial
Services Group, Inc. (PNC) for that merger to close and filed suit
against PNC in Superior Court for The District of Columbia.  This
suit seeks to hold PNC responsible for its wrongdoing and for the
resulting damages it has caused, or, alternatively, to require PNC
to uphold its end of the agreement and proceed with the merger in
accordance with the agreement.  Furthermore RIGS sent a letter
informing PNC that its actions constituted an anticipatory
repudiation of the merger agreement between the two entities and
that RIGS is now entitled to discuss merger combinations with
other interested parties.  The Negative Watch is reflective of the
greatly reduced possibility that the PNC deal will go through and
the current absence of an agreement with another acquirer.

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

   Riggs National Corporation

        -- Individual rating to 'D/E' from 'D'.

   Riggs Bank National Association

        -- Individual rating to 'D/E' from 'D'.

These ratings have been placed on Rating Watch Negative by Fitch:

   Riggs National Corporation

        -- Short-term 'B';
        -- Long-term 'B';
        -- Subordinated debt 'CCC';
        -- Support '5'.

   Riggs Bank National Association

        -- Short-term 'B';
        -- Short-term deposit 'B';
        -- Long-term 'B+';
        -- Long-term deposit 'BB-';
        -- Support '5'.

   Riggs Capital

        -- Preferred stock 'C'.

   Riggs Capital II

        -- Preferred stock 'C'.


RITE AID: Closes Over-Allotment Option of Convertible Pref. Stock
-----------------------------------------------------------------
Rite Aid Corporation (NYSE, PCX:RAD) reported the closing of the
underwriters' exercise in full of an over-allotment option to
purchase 200,000 shares of Rite Aid's 7.0% Series E Mandatory
Convertible Preferred Stock  in connection with its previously
announced public offering of HiMEDS(SM).

Shares of HiMEDS(SM) have an annual dividend yield of 7.0% and a
threshold appreciation price of $5.36.  Each share of HiMEDS(SM)
will automatically convert on Feb. 1, 2008, subject to certain
adjustments, into no fewer than 9.3284 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 Feb. 1, 2008, the HiMEDS(SM)
may be converted at the option of the holders or, under certain
circumstances, by Rite Aid.

Net proceeds to the Company from the exercise of the over-
allotment option were $9.7 million.  Rite Aid intends to use the
net proceeds from the exercise of the over-allotment option to
redeem, at a purchase price of 105% plus any accrued dividends,
30,000 shares of each of its Series F Cumulative Convertible Pay-
in-Kind Preferred Stock, Series G Cumulative Convertible Pay-in-
Kind Preferred Stock and Series H Cumulative Convertible Pay-in-
Kind Preferred Stock.  Any remaining additional net proceeds will
be used for working capital and general corporate purposes.

The offering was lead managed by J.P.Morgan, with Citigroup acting
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, NY 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.


SAFETY-KLEEN: Creditor Trust Asks Court to Approve Market Hub Pact
------------------------------------------------------------------
Pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure, Safety-Kleen Creditor Trust, by and through its
trustee, Oolenoy Valley Consulting, LLC, seeks United States
Bankruptcy Court for the District of Delaware's authority to enter
into a settlement agreement with Market Hub Partners Holding, LLC.  
Market Hub Partners is the successor-in-interest to Market Hub
Holding Company, which formerly conducted business as Energy USA-
TPC Corp.

The Trustee filed a complaint against Market Hub to avoid and
recover certain preferential or, in the alternative, fraudulent
transfers totaling $1,321,030, made by the Debtors to Market Hub
90 days before the Petition Date.

After arm's-length negotiations, the Trustee and Market Hub agree
to settle the Avoidance Action under these terms:

    (a) Market Hub will pay the Trustee $350,000 on or before
        February 23, 2005, by check made payable to the
        Safety-Kleen Creditor Trust;

    (b) The Trustee will hold the Settlement Amount in escrow
        pending Court approval of the Settlement Agreement.
        Should the Court decide not to approve the Agreement, the
        Trustee will return the escrowed Settlement Amount to
        Market Hub and the parties will return to their positions
        status quo ante;

    (c) After the receipt by the Trustee of the full Settlement
        Amount, the Avoidance Action will be dismissed with
        prejudice, with each party bearing its own attorneys'
        fees and costs.  The Settlement Amount will not be deemed
        received by the Trustee until the time as it is finally
        honored by the banking institution on which it is drawn;
        and

    (d) The parties will grant mutual releases from any and all
        claims, liabilities, actions, or causes of action, arising
        from or related to the Avoidance Actions.  However, the
        Mutual Releases with respect to:

        (1) Market Hub, does not cover:

            -- any proofs of claim filed by Market Hub or its
               predecessors-in-interest;

            -- any scheduled claims filed by the Debtors
               concerning Market Hub or its predecessors-in-
               interest; and

            -- Market Hub's claim for the Settlement Amount; and

        (2) the Trust and Trustee, will not affect any defenses
            relating to those excluded Market Hub Claims.

The Trustee informs the Court that it has not assigned any of the
claims and causes of actions asserted in the Avoidance Action.

Headquartered in Delaware, Safety-Kleen Corporation --
http://www.safety-kleen.com/-- provides specialty services such  
as parts cleaning, site remediation, soil decontamination, and
wastewater services.  The Company, along with its affiliates,
filed for chapter 11 protection (Bankr. D. Del. Case No. 00-02303)
on June 9, 2000.  Gregg M. Galardi, Esq., at Skadden, Arps, Slate,
Meagher, represents the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $3,031,304,000 in assets and $3,333,745,000 in liabilities.
(Safety-Kleen Bankruptcy News, Issue No. 85; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


SEMGROUP LP: Moody's Lifts Secured Debt Rating to Ba3 from B1
-------------------------------------------------------------
Moody's upgraded SemGroup, L.P.'s senior implied rating to Ba3
from B1.  Moody's upgraded SemCrude, L.P.'s existing secured debt
ratings by one notch and assigned a Ba3 rating to a new $175
million senior secured fourth tranche, for SemCams Holding
Company, taking the total senior secured credit facility to $924.6
million.  

The new tranche will partially fund $249 million of acquisitions.
The rating outlook is stable.  The outlook is sensitive to the
need for sustained tight adherence to hedging policy and
procedures; sound covered merchant marketing and trading results;
leveraged acquisitions; and the banks' enforcement of borrowing
base and debt covenant disciplines.

The acquisitions add core fixed asset, fee-based, relative mass to
the asset base.  With a new $75 million of cash private equity
from Carlyle/Riverstone Global Energy and Power Fund II, the $175
million Canadian Term Loan will fund:

   1) the $218.7 million purchase of Central Alberta Midstream's
      majority interests in three sour gas processing
      plants and 600 miles of associated natural gas gathering
      lines, and

   2) the $30 million purchase of Texon, L.P.'s three propane
      terminals situated along the TEPPCO pipeline in Missouri,
      Arkansas, and Indiana.

Central Alberta, the largest licensed sour gas processor in
Alberta, Canada, is a ChevronTexaco and BP joint venture.
Typically under life-of-field lease agreements, its assets provide
vital natural gas gathering and processing services for producers
in the Kaybob, Canada and broader west-central Alberta region.

The original three credit tranches were increased from $550
million to $750 million to fund the higher dollar value of working
capital, letters of credit (L/C) and merchant marketing and
trading activity now conducted at far higher oil and refined
product prices and at higher volumes as a result of acquisitions.

One loan agreement governs all four tranches, which are also joint
and severally guaranteed by SemGroup, its domestic subsidiaries,
and foreign subsidiaries to the extent a guarantee does not
trigger adverse tax consequences. All tranches are in U.S.
dollars.

The upgrades are supported by SemGroup's significantly larger,
more diversified business mass; significantly greater proportion
of durable fee-based fixed assets; industry seasoned management;
demonstrated execution of balanced growth and funding strategy;
acceptable pro-forma leverage for the ratings; and history of
executing conservative policies, procedures, and controls over
covered merchant marketing and trading.

Since the original B1 senior implied rating, SemCrude completed
the 1 million barrel expansion of its Cushing, Oklahoma crude oil
storage capacity, now 3.8 million barrels at Cushing and 4.8
million in aggregate, raised a new $75 million of private equity
from a second investment group, and is adding the CAMS and Texon
hard assets.

The ratings are restrained by:

   a) a large merchant marketing and trading business requiring
      daily back office precision and strict adherence to hedging
      policy and procedure;

   b) related heavy and volatile working capital needs;

   c) increased leverage after the Central Alberta acquisition,
      though acceptable for the ratings and on a more durable
      asset base;

   d) still modest levels of Term Loan B and the Canadian Term
      Loan collateral cover by fixed assets; ongoing acquisition
      and releveraging risk, though acquisitions over $50 million
      require bank consent; and

   e) the challenges of an acquisition-driven growth strategy in
      an extremely competitive midstream acquisition market.

However, while SemGroup seeks growth, it is not an MLP.  Unlike
many MLP's, it is not forced to seek increased cash flow to meet
distribution growth promises to the market.

Importantly, however, in addition to SemGroup's own restrictive
policy on the matter, the rated credit agreements restrict
SemGroup to running only fully covered positions.  Nevertheless,
the ratings are sensitive to its ability to successfully market,
trade, and hedge its activity through volatile spot and forward
markets and execute profitable marketing business in backwardated,
transition, and contango markets.

The ratings also benefit from SemGroup's logistical fixed asset
and marketing positions in the core central North American crude
oil production, refining, transportation, and consumption corridor
spanning the Gulf Coast, mid-Continent, Midwest, and natural gas
processing and marketing in Canada.

Its diversification across several hydrocarbon commodities,
midstream activities, and regions may provide greater market
opportunity, information, and risk diversification.  These
acquisitions amplify the scale of SemGroup's midstream
infrastructure, and its customer relationships, in the heart of
the North American energy infrastructure.

Conversely, that activity also exposes small SemGroup's
management, systems, and resources to powerful forces across
multiple world and regional commodity markets impacting covered
merchant marketing and trading.  The credit agreements do restrict
the company to run fully covered positions, but its activity still
exposes it to smaller degrees of basis risk, commodity price
differentials, and time differentials.

The Central Alberta and Texon acquisitions bring a reported $37
million of EBITDA to SemGroup, though this will need to be
realized post-acquisition.  Before non-cash mark-to-market gains
and losses, SemGroup reports $126 million of EBITDA in the twelve
months ending November 30, 2004 on $12.5 billion of revenue.

Pro-forma for the acquisitions, EBITDA over last twelve months
would appear to be in the $160 million range, before non-cash
mark-to-market gains and losses.  Approximately 52% of pro-forma
EBITDA would be generated from durable fee and tariff based
activity while 48% would be generated by high volume, thin margin,
market sensitive activity, requiring intense back office controls
and precise rigorous adherence to hedging policy.

SemGroup's book mark-to-market gains and losses can be
significant, as in third quarter 2004 where such non-cash losses
totaled $41 million.  Such gains and losses are most pronounced in
sharply rising or falling hydrocarbon commodity markets though
these are also the markets in which SemGroup believes its
opportunities are greatest.

Even though SemGroup has not elected to use hedge accounting for
its fully-hedged activity, as long as the actual positions in its
hedge portfolio match its underlying physical positions,
mark-to-market losses will be matched by physical commodity gains
and mark-to-market gains would match physical market losses.

SemGroup does have the option to elect hedge accounting for
approximately 10% of its activity, representing approximately
$1 billion in gross revenue.  However, even though 90% of its
mark-to-market gains and losses relate to underlying and
offsetting physical positions, SemGroup states that the very large
volume and fast pace of that activity would require far larger
overhead costs and systems investment than it currently wishes to
make to qualify this activity for hedge treatment.

In the meantime, SemGroup states that 90% of its mark-to-market
gains and losses typically have zero cash impact, due to
offsetting underlying physical commodity positions.

SemGroup (formerly Seminole Group, L.P.) was founded in early
2000.  It is privately held and wholly-owns SemCrude (63% of LTM
EBITDA), SemFuel (16%), SemGas (nil %), SemStream (10%), and
SemCanada (12%).  After the acquisitions, SemCanada would generate
roughly 30% of EBITDA and SemCrude 47%.  Cross guarantees support
the credit facilities.

SemGroup buys, sells, transports, terminals, and stores crude oil,
refined products, natural gas, and natural gas liquids along the
energy corridor stretching from the U.S. Gulf Coast, through the
MidContinent, Midwest, and into Canada.  It engages in the
midstream gathering, aggregating, storage, marketing, and merchant
trading of crude oil and natural gas liquids; the marketing of
refined petroleum products and propane to jobbers, wholesalers,
industrial consumers, and cogeneration plants.

SemGroup operates crude oil and natural gas gathering,
transportation, terminal, and storage assets along the Gulf Coast
through Canadian corridor, and also markets natural gas in Canada.

As of October 31, 2004, SemGroup owned 4.8 million barrels of
crude oil storage, 900,000 barrels of refined product storage,
150,000 barrels of propane storage, 2,654 miles of pipeline and
gathering systems, and 165 crude oil transport and services
vehicles. It moves roughly 580,000 barrels/day of oil, 186,000
barrels/day of refined products, 130,000 barrels/day of natural
gas liquids, and 1 BCF/day of natural gas.

SemGroup uses its asset base and operating, marketing, and market
prowess to move hydrocarbons, striving, across all market
conditions, to profit from market inefficiencies in the movement
of oil, natural gas, natural gas liquids, and refined products
from production source to consumption point.  SemGroup also
provides risk management, well services, and transportation
services to its customers.

Physical positions are hedged by either offsetting physical
positions or in the options, futures, or over-the-counter markets.
Activity includes buying and selling covered physical and paper
positions in those commodities in the process of its multi-service
merchant function.  

Time, location, quality, and volume differentials arise from the
gaps between where and when a specific volume and quality of crude
oil or refined product is needed, versus the current geographic
location, volume, and quality characteristics of potential supply,
as well as in the difference between spot and forward prices.

SemGroup's storage capacity is let for third party fee business
and used by SemGroup to take proprietary advantage of time
differentials in covered physical buy-sell transactions, and in
merchant trading activity taking advantage of location, quality,
and volume differentials in the service of producer and consumer
needs.  

When markets shift from backwardation to contango, SemGroup shifts
tactics in its proprietary use of its storage assets and engages
more in the buying of prompt physical volumes and simultaneous
forward sale of that volume at the higher forward price.

The ratings also benefit from the considerable control provided by
the borrowing base, covenants, and banks that are seasoned in the
midstream business; the fact that the borrowing base has tended to
cover combined working capital debt, letters of credit, and
permanent debt, with added protection for Term Loan B and the
acquisition revolver provided by first security in fixed assets;
and the partial strategic hedge (against the secular decline in
U.S. oil production) provided by SemGroup's 4.8 million barrels of
crude oil storage capacity (3.8 million barrels of storage
strategically connected to the Cushing, Oklahoma hub) and
terminaling assets that allow SemGroup to participate in rising
imported crude oil volumes.

Borrowing capacity under the Ba2 rated $550 million working
capital facility is governed by a borrowing base determined by
specified advance rates against eligible receivables and
inventory, net of crude oil payables.  

It permits up to $250 million of borrowing base availability to
fund hedged crude oil and refined product storage positions taken
during contango markets. While not conservative, those advance
rates are fairly standard for the sector.  The facility is also
supported by an annual third party borrowing base audit and twice
monthly borrowing base reports from SemGroup. A report is
submitted weekly when availability under the working capital
revolver is less than $50 million.

As of January 17, 2005, the eligible borrowing base was estimated
by the agent banks to be $442 million, distilled from $231 million
of eligible receivables, $199 million of eligible inventory, $84
million of unused letters of credit and eligible margin deposits,
and offset by $72 million of crude oil purchase commitments. The
company had borrowed $178 million and issued $172 million of
letters of credit under the borrowing base, leaving $92 million of
unused availability.

Based on the sale of 30% of SemGroup's private equity for $75
million, we estimate SemGroup's going concern equity value to
approximate $250 million and its implied enterprise value would
approximate $730 million.  Pro-forma for the financings, total
debt would be $480 million.  

The capital structure would include roughly $145 million of
working capital borrowings; the $150 million of Term Loan B; the
$175 million of Canadian Term Loan; $4.4 million of capital lease
obligations; and $6.4 million of subordinated convertible notes.

Pro-forma for the financings and acquisitions, EBITDA over the
last twelve months, before mark-to-market gains and losses, would
be in the $150 million to $159 million range.  Pro-forma
EBITDA/Interest would be in the range of 6.0x (up from 5x last
year), Total Debt/EBITDA would be in the range of 3x, and
Debt/Capital would be in the range of 69%.

SemGroup carries high working capital. As of November 30, 2004,
this included approximately $1 billion of accounts receivable,
$196 million of inventory, and $103 million of current derivative
assets, all funded largely by approximately $1.1 billion of
accounts payable, $80 million of accruals, and $157 million of
derivatives liabilities.  The components rise and fall sharply
with spikes and declines in crude oil, refined product, and
natural gas prices.

The specific ratings assigned by Moody's to SemGroup are:

    i) Upgraded to Ba2 from Ba3 SemCrude's $550 million (was $400
       million) working capital borrowing base revolver maturing
       August 2008, first secured by all borrower and guarantor
       working capital, and junior secured by all borrower and
       guarantor fixed assets.  The facility has a $250 million
       contango borrowing and L/C sub-limit.

   ii) Upgraded to Ba3 from B1 SemCrude's $50 million (unchanged)
       revolving credit facility maturing August 28, 2008, first
       secured by the borrower's and all guarantors' fixed assets
       and junior secured by all borrower and guarantor working
       capital assets.

  iii) Upgraded to Ba3 from B1 a $150 million (was $100 million) 6
       year Term Loan B, first secured by first secured by the
       borrower's and all guarantors' fixed assets and junior
       secured by all borrower and guarantor working capital
       assets.

   iv) Assigned a Ba3 to a new $175 million 6 year Canadian Term
       Loan for SemCams Holding Company, first secured by the
       borrower's and all guarantors' fixed assets and junior
       secured by all borrower and guarantor working capital
       assets.

    v) Upgraded the Senior Implied Rating to Ba3 from B1.

   vi) Upgraded the Senior Unsecured Non-guaranteed Issuer Rating
       to B1 from B2.

Key financial covenants, after amendments, include:

   (i) Maximum Senior Funded Debt to EBITDA of 3.50x (L/C's issued
       for commodity purchases, and contango borrowings of up to
       $100 million, are excluded from Senior Funded Debt),

  (ii) Minimum EBITDA/Cash Interest + Letter of Credit Fees
       coverage of 3.00x;

(iii) Maximum Debt to Capitalization shall not exceed 70% at
       closing and decline to 65% by December 31, 2005;

  (iv) Minimum Current Ratio of 1.00x; Operating Cash Flow (after
       unfunded capital spending) divided by Interest Expense plus
       partner distributions shall not be less than 1.15x; Minimum
       Net Working Capital of $35 million.

SemGroup, L.P., is headquartered in Tulsa, Oklahoma.


SFBC INT'L: Registers 3.5 Million Common Shares for Public Offer
----------------------------------------------------------------
SFBC International, Inc. (NASDAQ:SFCC), a provider of drug
development services to branded pharmaceutical, biotechnology,
generic drug and medical device companies, has filed a
registration statement on Form S-3 with the Securities and
Exchange Commission relating to a proposed public offering of
3,500,000 shares of its common stock.  3,102,000 shares are being
offered by SFBC International, Inc., and 398,000 shares are being
offered by certain of its executive officers.  Also, SFBC intends
to grant to the underwriters an option to purchase up to an
additional 525,000 shares of common stock to cover over-
allotments, if any.

UBS Investment Bank will act as sole book-running manager for the
proposed offering.  Jefferies & Company, Inc., will act as co-
manager.  When available, copies of the preliminary prospectus
relating to this offering may be obtained from UBS Investment
Bank, Prospectus Department, 299 Park Avenue, New York, NY 10171.

SFBC expects to use the proceeds of the proposed offering to repay
$70 million of its outstanding term loan under its credit
facility, for possible acquisitions and for general corporate
purposes, including funding the continued growth and development
of its business and working capital requirements.

A registration statement relating to these securities has been
filed with the Securities and Exchange Commission, but has not yet
become effective.  These securities may not be sold nor may offers
to buy be accepted prior to the time the registration statement
becomes effective.  This release shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any
sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.

                        About the Company

SFBC International, Inc. -- http://www.sfbci.com/-- provides  
early and late stage clinical drug development services to branded
pharmaceutical, biotechnology, generic drug and medical device
companies around the world.  The company has more than 30 offices
located in North America, Europe, South America, India, and
Australia.  In early clinical development services, SFBC
specializes primarily in the areas of Phase I and early Phase II
clinical trials and bioanalytical laboratory services, including
early clinical pharmacology.  The company also provides late stage
clinical development services globally that focus on Phase II
through IV clinical trials.  The company also offers a range of
complementary services, including data management and
biostatistics, clinical laboratory services, medical and
scientific affairs, regulatory affairs and submissions, and
clinical IT solutions.

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 9, 2004,
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit and bank loan ratings to SFBC International, Inc., a Miami,
Florida-based provider of outsourced drug development services to
the pharmaceutical industry.  The 'B+' bank loan ratings apply to
the company's $40 million revolving credit facility due December
2009 and a $120 million term loan facility due December 2010. The
new borrowings will fund the company's pending $245 million
acquisition of privately held PharmaNet, Inc.

At the same time, a 'B-' rating has been assigned to SFBC's
existing $143.8 million senior convertible debt issue.

The outlook is positive.


SOLA INTERNATIONAL: Earns $9.4 Million of Net Income in 3rd Qtr.
----------------------------------------------------------------
SOLA International Inc. (NYSE:SOL) disclosed its fiscal year 2005
third quarter results:

   -- Net sales of $163.1 million compared to $159.3 million in
      the prior year period, an increase of 2.4%.

   -- Reported net income of $9.4 million compared to a net loss
      of $25.3 million in the prior year period.

   -- Adjusted net income of $10.4 million compared to
      $7.6 million in the prior year period.

   -- Cash flow from operations of $22.6 million compared to
      $21.6 million in the prior year period.

                    Third Quarter Results

Net income under generally accepted accounting principles was
$9.4 million in the fiscal 2005 third quarter compared to a net
loss of $25.3 million in the prior year quarter.  Adjusted net
income this year, which excludes after-tax special charges for
restructuring and merger-related costs of $0.1 million and $1.1
million, respectively, was $10.4 million, compared to adjusted net
income of $7.6 million, in the prior year period.  Prior year
adjusted net income excludes after-tax costs of $3.5 million
related to restructuring, $1.7 million associated with an
unrealized currency translation loss on Euro-denominated bonds and
$30.7 million for the net effect of the early extinguishment of
debt.

Gross margins were 39.7% in the fiscal 2005 third quarter compared
to 40.7% in the year ago quarter.  A planned reduction in
manufacturing output, as a result of lower sales to Wal-Mart and
continued sales weakness in Germany, temporarily increased
production costs.

Operating expense on a reported basis was $48.0 million compared
to $49.4 million in the year ago period.  Excluding special
charges of $1.7 million this quarter and $4.6 million in the prior
year, adjusted operating expense in the fiscal 2005 third quarter
was $46.2 million compared to $44.7 million in the year ago
period.  The increase of $1.5 million from the prior year quarter
primarily relates to costs associated with the implementation of
internal controls related to compliance with Section 404 of the
Sarbanes-Oxley Act, acquired operating expense at Great Lakes
Coating Laboratory and Vision Systems Inc., and the impact of a
weaker U.S. dollar when translating overseas expenses.

Operating income on a reported basis was $16.8 million compared to
$15.4 million in the year ago period.  Adjusted operating income,
excluding special charges of $1.7 million this quarter and $4.6
million in the year ago period, was $18.6 million in the fiscal
2005 third quarter and $20.0 million in the year ago period.

Adjusted EBITDA, excluding special charges, was $26.3 million, or
16.1% of net sales, compared to $27.2 million, or 17.1% of net
sales, in the year ago period. EBITDA, including special charges,
was $25.6 million, or 15.7% of net sales, compared to a loss of
$21.8 million in the year ago period, which included $41.0 million
of refinancing costs.

Net interest expense in the fiscal 2005 third quarter was $4.0
million compared to $8.1 million in the comparable year ago
period.  The reduction in interest expense reflects the benefits
of the Company's refinancing, which was completed in the fiscal
2004 third quarter.

The effective tax rate, on an adjusted basis, in the fiscal 2005
third quarter was 33.4% compared to 23.6% in the prior year
period.  The increase in the year-over-year tax rate is largely
due to reduced interest expense in the United States from the
refinancing and increased profitability in other jurisdictions
with higher tax rates.

                  Balance Sheet and Cash Flow

Inventory at Dec. 31, 2004 compared to September 30, 2004
increased $2.5 million on a reported basis but decreased $1.0
million on a constant currency basis.  Finished goods inventory
turnover was 5.1 times in the quarter, which compares to 5.4 times
in the second quarter of fiscal 2005 and 4.5 times in the prior
year quarter.

Receivables at Dec. 31, 2004 compared to Sept. 30, 2004, increased
$8.8 million on a reported basis and increased $0.6 million on a
constant currency basis.

Total debt at Dec. 31, 2004 was $282.6 million, or 39.4% of
capital, compared to $282.7 million, or 40.6% of capital, at Sept.
30, 2004 and $290.6 million, or 43.1% of capital, at Dec. 31,
2003.  During the third quarter fiscal 2005, the Company repaid
$2.2 million on its existing credit facility which, at Dec. 31,
2004 had an outstanding balance of $168.4 million. Since September
30, 2004, bank borrowings increased by $1.3 million to $10.0
million due primarily to the assumption of $1.2 million of debt
related to the Vision Systems acquisition, and outstanding
Eurobond liability increased by $0.8 million to $9.3 million due
to a weaker dollar.  Also, book equity increased by $22 million to
$434 million due to favorable translation adjustment of $12
million and net income of $9 million.

Cash flow from operations in the quarter was $22.6 million
compared to $21.6 million in the prior year period, and was used
to fund capital expenditures of $3.4 million and to repay $2.5
million of debt.

Cash and cash equivalents at Dec. 31, 2004 was $132.1 million
compared to $122.3 million at Sept. 30, 2004 and $102.0 million at
December 31, 2003. Net debt at Dec. 31, 2004 was $150.5 million
compared to $160.5 million at Sept. 30, 2004 and $188.6 million at
Dec. 31, 2003.

                       Nine Month Results

Net sales for the nine months ended Dec. 31, 2004 were $494.5
million compared to $471.9 million for the nine months ended Dec.
31, 2003, an increase of 4.8%. On a constant currency basis, sales
increased 0.6% for the first nine months of fiscal 2005 compared
to the prior year period. For the nine months ended Dec. 31, 2004,
sales on a constant currency basis in North America decreased
2.6%, Europe increased 1.1% and Rest of World increased 6.5%
compared to the nine months ended Dec. 31, 2003.

Operating income on a reported basis was $53.5 million for the
nine months ended Dec. 31, 2004 compared to $55.9 million in the
year ago period.  Adjusted operating income, excluding special
charges of $5.4 million this year and $4.6 million in the prior
year, was $58.9 million in the first nine months of fiscal 2005
compared to $60.5 million in the comparable year ago period.

Adjusted EBITDA, excluding restructuring and merger-related costs
this year and restructuring costs, loss on debt extinguishment,
unrealized currency losses on Euro-denominated debt, and minority
interest last year, was $81.5 million in the nine months ended
December 31, 2004 compared to $81.1 million in the year ago
period.

Net income on a reported basis was $28.0 million for the nine
months ended Dec. 31, 2004 compared to a net loss of $18.1 million
in the prior year period. Adjusted net income, which excludes
restructuring and merger-related costs this year and restructuring
costs, loss on debt extinguishment and an unrealized currency
translation loss on Euro-denominated debt last year, was $32.3
million, or $0.99 earnings per share, for the nine months ended
Dec. 31, 2004 compared with $22.6 million, or $0.90 earnings per
share, in the prior year period.

                        About the Company

SOLA International Inc. -- http://www.sola.com/-- designs,  
manufactures and distributes a broad range of eyeglass lenses,
primarily focusing on the faster-growing plastic lens segment of
the global lens market, and particularly on higher-margin, value-
added products. SOLA's strong global presence includes
manufacturing and distribution sites in three major regions: North
America, Europe and Rest of World (primarily Australia, Asia and
South America) and approximately 6,600 employees in 27 countries
servicing customers in over 50 markets worldwide.

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 3, 2004,
Standard & Poor's Ratings Services revised the outlook of SOLA
International, Inc., to negative from stable and affirmed the
'BB-' corporate credit rating on the company.  The outlook
revision reflects our heightened concern that SOLA will be unable
to comply with Section 404 of the Sarbanes-Oxley Act by Mar. 31,
2005, the company's fiscal year-end. Section 404 mandates that a
company's auditor identify "any material internal control
weakness" in attesting to whether management has sufficient
operational command to produce reliable and compliant financial
reports.  SOLA's external auditors have identified internal
control deficiencies.

Its current ratings reflect the company's operating concentration
in eyeglass lenses, a well-penetrated, mature, and innovative
industry that faces challenges from large competitors as well as
other forms of vision correction.  The company is expanding its
prescription laboratory network, which now contributes a
significant portion of sales, through a series of modest-sized
acquisitions. Prescription labs provide SOLA with more control
over its product and distribution channels to end-users. Still,
barriers to entry in this business are relatively low.  On
Dec. 1, 2004, SOLA's outlook was revised to negative, reflecting
heightened concern that the company would be unable to comply with
Section 404 of the Sarbanes-Oxley Act by Mar. 31, 2005, the
company's fiscal year-end. While these risks contribute to a
below-average business profile, SOLA benefits from a meaningful
global market share (according to the company, it holds a No. 2
position in lens sales), financial parameters that are strong for
the rating, and adequate liquidity.


SOLUTIA INC: Court Approves Claim Waiver Procedures
---------------------------------------------------
The United States Bankruptcy Court for the Southern District of
New York approved a modified process for review and approval of
small claim waivers falling within certain specified economic
parameters in the chapter 11 cases of Solutia, Inc., and its
debtor-affiliates.  Under the proposed process, the Debtors will
use the Claim Waiver Procedures to obtain more expeditious and
cost-effective review by interested parties, in lieu of individual
court approval, of certain waivers of small dollar amount claims.    
All other settlements would remain subject to Court approval on an
individual basis pursuant to Section 363 of the Bankruptcy Code
and Bankruptcy Rule 9019.

                    Claim Waiver Procedures

The salient terms of the Debtors' proposed Claim Waiver
Procedures are:

A. Transactions for which the Claim Waiver Procedures may be used

   The Claim Waiver Procedures would apply to a waiver of all or a
   portion of a prepetition claim where the size of the waiver
   amounts to, in each case, $500,000 or less.

B. Notice and opportunity to object for Non-De Minimis Claim
   Waivers

   For Claim Waivers between $100,000 and $500,000, the Debtors
   propose that after a Debtor enters into a contract or contracts
   contemplating a Claim Wavier, the Debtors will serve a notice
   of the Proposed Waiver by e-mail, facsimile or overnight
   delivery service on:

   -- the United States Trustee for the Southern District ofNew
      York;

   -- counsel to the Official Committee of Unsecured Creditors;

   -- counsel to the Official Committee of Retirees;

   -- counsel to the agents for the Debtors' postpetition secured
      lenders;

   -- counsel to the indenture trustee for the secured public debt
      securities issued by the Debtors;

   -- counsel to the ad hoc committee for the secured public debt
      securities issued by the Debtors;

   -- counsel to the Official Committee of Equity Security
      Holders; and

   -- the creditor agreeing to the Claim Waiver and its counsel,
      if known.

   The Debtors propose that each Waiver Notice include these
   information with respect to the Proposed Waiver:

   (a) a description of and the basis for the claim or claims that
       are the subject of the Proposed Waiver and the Debtor party
       against whom the claim or claims are being asserted;

   (b) any known defenses to the claim that is the subject of the
       Proposed Waiver;

   (c) the identity of the non-debtor party or parties to the
       Proposed Waiver and any relationships between the party or
       parties and the Debtors;

   (d) the nature of any new contractual relationship that the
       Debtors will enter into as a result of the Proposed Waiver;

   (e) the business justifications for the Proposed Waiver and an
       assurance that any negotiations with the non-debtor party
       or parties to the Proposed Waiver occurred on an arm's-
       length basis;

   (f) instructions consistent with the procedures to assert
       objections to the Proposed Waiver; and

   (g) the Debtors' basis for believing that the Proposed Waiver
       is in the best interests of the estates as well as the
       probability of success of litigation of the claim.

   With respect to each Waiver Notice, Interested Parties have
   through 5:00 p.m., Eastern time, on the 10th calendar day after
   the date of service thereof to object to the Proposed Waiver.    
   If no Objections are properly asserted before the expiration of
   the Notice Period, the applicable Debtor or Debtors would be
   authorized, without further notice and without further Court
   approval, to consummate the Proposed Waiver in accordance with
   the terms and conditions of the underlying contract or
   contracts.    If each Interested Party consents in writing to
   the Proposed Waiver before the expiration of the applicable
   Notice Period, then the Debtors would be authorized to
   consummate the Proposed Waiver without waiting for the Notice
   Period to expire.  Upon either the expiration of the Notice
   Period without the receipt of any Objections or the written
   consent of all Interested Parties, the Proposed Waiver would be
   deemed final and fully authorized by the Court.

   If any significant economic terms of a Proposed Wavier are
   amended after transmittal of the Waiver Notice, but before the         
   expiration of the Notice Period, the applicable Debtor would be
   required to send a revised Waiver Notice to all Interested
   Parties describing the Proposed Waiver, as amended.  If a
   revised Waiver Notice is required, the Notice Period would be
   extended for an additional five calendar days.

C. Objection procedures

   Objections to any proposed Claim Waiver must:

   (a) be in writing;

   (b) be served on the Interested Parties and counsel to the
       Debtors so as to be received by all such parties before
       expiration of the Notice Period; and

   (c) state with specificity the grounds for objection.

   If an Objection to a Proposed Waiver is properly and timely
   served, the Debtors and the objecting Interested Party would
   use good faith efforts to resolve the Objection.  If the
   Debtors and any objecting Interested Party were unable to
   achieve a consensual resolution, the Debtors would not be
   permitted to proceed with the Proposed Waiver pursuant to these
   procedures, but would have the ability to seek Court approval
   of the Proposed Waiver upon expedited notice and an opportunity
   for a hearing, subject to the Court's availability.

   Within 45 days after the end of each quarter, the Debtors will
   provide to the Interested Parties a report itemizing the assets
   sold and consideration received for each De Minimis Waiver
   completed during the quarter.

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


SPARKLE CLEANING: Case Summary & 11 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Sparkle Cleaning Associates, Inc.
        63 Fountain Street, Unit 104
        Framingham, Massachusetts 01702

Bankruptcy Case No.: 05-10716

Chapter 11 Petition Date: February 4, 2005

Type of Business:  The Debtor operates a commercial contract
                   cleaning service.  The Debtor handles a full
                   range of housekeeping duties for clients
                   located in Masssachusetts, Maine, New
                   Hampshire, Rhode Island and the Washington,
                   D.C, area, including, janitorial services,
                   preventive maintenance, restoration, carpet
                   cleaning, clinical housekeeping, pest control,
                   grounds maintenance, planning, scheduling,
                   quality control, and biohazard training.  
                   See http://www.sparklecleaning.us/

Court:  District of Massachusetts (Boston)

Judge:  Robert Somma

Debtor's Counsel: David B. Madoff, Esq.
                  Madoff & Khoury LLP
                  124 Washington Street, Suite 202
                  Foxboro, Massachusetts 02035
                  Tel: (508) 543-0040
                  Fax: (508) 543-0020

Estimated Assets: $100,000 to $500,000

Estimated Debts:  $1 Million to $10 Million

Debtor's 11 Largest Unsecured Creditors:

    Entity                                Claim Amount
    ------                                ------------
Carrie Johnson                                $280,000
c/o Gretchen Van Ness, Esq.
44 School Street, Suite 510
Boston, MA 02109

Internal Revenue Service                      $200,000
Special Procedures Function
PO Box 9112
Boston, MA 02203

Robin Bandele Nash                             $20,000
34 Beach Road
Vineyard Haven, MA 02568

HT Berry                                        $9,000

Wallick & Associates                            $6,438

Cingular Wireless                               $3,984

NACM-NE/11551                                   $2,775

Atlantic Cleaning                               $2,373

Waste Management                                $1,195

Internal Revenue Service                        $1,000

Granite Communications                            $614


SPEIZMAN INDUSTRIES: Court Confirms Amended Plan of Liquidation
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia
confirmed the First Amended Joint Plan of Liquidation of Speizman
Industries, Inc., and its debtor-affiliates on Jan. 28, 2005.

Judge W. Homer Drake determined that the Plan:

   * 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.

All but one impaired claim holder voted to accept the Plan.  
Lonati SpA, an impaired secured lender, did not cast a ballot.

                       Terms of the Plan

Speizman Industries will be substantively consolidated with its
debtor-affiliates -- Wink Davis Equipment Co., Todd Motion
Controls, Inc., and Speizman Yarn Equipment Co., Inc.  
Intercompany claims, as a result, are cancelled.

Lloyd Whitaker of Newleaf Corporation will serve as liquidating
agent to administer distributions under the Plan.

SouthTrust Bank, the Company's secured lender, is owed around  
$6.3 million.  The collateral securing the $6.3 million claim will
be surrendered to SouthTrust.  The unsatisfied amount left after
the value of the collateral is deducted from the claim amount is
considered a general unsecured claim.

Lonati SpA, another secured creditor, owed $4 million, won't
receive anything.  Unsecured creditors, owed an "undetermined"
amount, are expected to see a de minimis recovery.  Shareholders
are wiped-out.

Robert Speizman, the Company's former president, will kick
$320,000 into the pot.

Headquartered in Charlotte, North Carolina, Speizman Industries,
Inc. -- http://www.speizman.com/-- is a distributor of  
specialized Commercial industrial machinery parts and equipment
operating primarily in textile and laundry.  The Company, along
with its affiliates, filed for chapter 11 protection (Bankr. N.D.
Ga. Case No. 04-11540) on May 20, 2004.  Michael D. Langford,
Esq., at Kilpatrick Stockton LLP, represents the debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed $23,938,000 in assets and $23,073,000
in liabilities.


STANDARD COMMERCIAL: Earns $6.4 Million of Net Income in 3rd Qtr.
-----------------------------------------------------------------
Standard Commercial Corporation (NYSE: STW - News) reported income
from continuing operations for the quarter and nine months period
ended Dec. 31, 2004, was $11.1 million and $14.0 million,
respectively, versus $6.9 million and $27.5 million for the
respective prior year periods.  As previously disclosed, the
Company discontinued its tobacco operations in Italy during the
second quarter of the current fiscal year.  Net income including
discontinued operations was $6.4 million for the quarter and a net
loss of $18.6 million for the nine months period ended Dec. 31,
2004 versus $3.6 million net income and $4.1 million net loss,
respectively, in the prior year.

Robert E. Harrison, Chairman and Chief Executive Officer said, "We
are pleased with the improvement in our results for this quarter
after a tough start to the year.  As we anticipated, shipping
patterns began to normalize in the most recent quarter and
resulted in a 27.4% increase in volumes shipped on a quarter over
quarter basis and a corresponding increase in sales of 32.8%.  
Importantly, our gross margin percentage was up nearly one
percentage point from 15.5% to 16.3% on a comparative basis as the
mix of tobaccos shipped was more indicative of our global business
base.  We expect the improved shipping pattern will continue for
the balance of the year and that freight issues in Malawi will
ease."

"We also continue to make progress in refocusing our business on
our core tobacco operations.  In January 2005, we sold our UK and
Chile wool operations and expect to complete the sale of
substantially all of our remaining wool interests by March 31,
2005."

            Quarter Ended December 31, 2004 Versus
               Quarter ended December 31, 2003

Sales

Sales for the three months ended December 31, 2004 increased by
32.8% to $244.7 million from $184.3 million in the prior year
period.  The volume of tobacco sold during the current quarter
increased by 27.4% over the prior year quarter.  This was mainly
due to increased shipments from Brazil, Thailand, Turkey and
Argentina.  Shipments from Zimbabwe and the USA were lower during
the quarter primarily due to smaller crops and lower shipments
from Malawi were due to a shortage of shipping containers.

Gross Profit

Gross profit for the quarter ended December 31, 2004 was $39.8
million versus $28.5 million in the prior year period. Gross
margins as a percentage of sales increased from 15.5% to 16.3%
primarily due to increases in Malawi, Thailand, India, Indonesia,
Turkey and Brazil. These increases were partially offset by
decreases of margins in China, USA and Argentina.

Selling, General and Administrative Expenses

SG&A expenses for the quarter were higher by $3.8 million. This
was due to an increase in legal and professional expenses of $2.0
million, relating to the proposed merger with Dimon Incorporated
and to Sarbanes-Oxley expenses, compensation of $0.8 million,
insurance of $0.6 million and communication costs and rent
expenses of $0.4 million.

Interest Expense

Interest expense for the current quarter was higher by $2.6
million due to both increased average borrowings and higher
average rates.

Income taxes

Income tax expense as a percentage of pretax income can vary due
to differences in the projected levels of pre-tax income for the
year in tax jurisdictions with higher or lower tax rates and
adjustments due to the resolution of reviews of certain taxing
authorities. We favorably resolved certain outstanding items with
certain tax authorities which resulted in an effective tax rate
for the quarter of 18.5%. The effective tax rate for the prior
year quarter was 31.9%.

Income from Continuing Operations

Income from continuing operations was $11.1 million for the
current quarter versus $6.9 million in the prior year quarter.

Loss from Discontinued Operations

The tobacco operating loss for the three months ended December 31,
2004 was $3.7 million versus $0.5 million in the prior year
quarter. The wool operating loss for the quarter was $0.9 million
versus $2.8 million in the prior year period. The basic loss per
share for the discontinued operations for the quarter was $0.34
versus $0.24 as the prior year period.

Net Income

The consolidated net income for the quarter was $6.4 million
versus $3.6 million in the prior year period.

               Nine months ended Dec. 31, 2004 Versus
                  Nine Months Ended Dec. 31, 2003

Sales

Sales for the nine months ended December 31, 2004 increased by
21.2% to $650.6 million from $536.6 million in the prior year
period. The volume of tobacco sold during the current nine months
increased by 17.3% over the prior year period. This was mainly due
to increased shipments from Brazil, India, Thailand, Russia,
Turkey and Spain. Shipments from Kenya, Congo and Argentina were
lower during the current nine months due to delayed customer
delivery schedules. Shipments from Zimbabwe and the USA were lower
primarily due to smaller crops. Lower shipments from Malawi were
due to a shortage of containers.

Gross Profit

Gross profit for the nine months ended December 31, 2004 was $93.2
million versus $96.2 million in the prior year period. Gross
margins were down from 17.9% to 14.3% primarily due to higher
tobacco and operating costs in Kenya, Zimbabwe, China, India,
Thailand, Turkey, USA, Argentina and Brazil. These decreases in
percentages are offset by increases in Indonesia and Malawi.

Selling, General and Administrative Expenses

SG&A expenses for the current nine months were higher by $11.9
million. This was mainly due to a charge of $2.4 million accrued
for fines relating to the European Commission investigation in
Spain, increase in legal and professional expenses of $3.5
million, relating to the European Commission investigation in
Spain, Sarbanes-Oxley and expenses related to the proposed merger
with Dimon Incorporated, increases in compensation of $5.4
million, higher communication costs and rental expense of $1.2
million and other normal inflationary increases.

Interest Expense

Interest expense for the current nine months was higher by $6.5
million due to both increased average borrowings and higher
interest rates, as well as payment of $1.0 million for the May
2004 early retirement of the 8-7/8% senior notes.

Income taxes

Income tax expense as a percentage of pretax income can vary due
to differences in the projected levels of pre-tax income for the
year in tax jurisdictions with higher or lower tax rates and
adjustments due to the resolution of reviews of certain taxing
authorities. We favorably resolved certain outstanding items with
certain tax authorities which resulted in an effective tax rate
for the nine months of 18.3%. The effective tax rate for the prior
year nine months was 31.7%.

Income from Continuing Operations

For the current nine months income from continuing operations was
$14.0 million versus $27.5 million in the prior year period.

Loss from Discontinued Operations

The operating loss for the discontinued tobacco operation for the
nine months ended December 31, 2004 was $13.7 million versus a
profit of $2.1 million in the prior year period. The charge
recorded in the current nine months for the discontinued tobacco
operation was $14.8 million. No tax benefit on the losses to
discontinue the Italian operation was recorded due to the
uncertainty of our ability to ultimately receive a tax benefit.
The wool operating loss for the current nine months was $4.1
million versus $7.0 million in the prior year period. The charge
recorded in the prior year period to discontinue the wool
operation was $26.6 million. The basic loss per share for the
discontinued operations for the current nine months was $2.38
versus $2.32 in the prior year period.

Net Loss

The consolidated net loss for the current nine months was $18.6
million versus a loss of $4.1 million in the prior year period.

Because of the seasonal nature of the Company's business, results
for interim periods are not necessarily indicative of business
trends or results to be expected for the full year.

                        Proposed Merger

In connection with the proposed merger of Standard Commercial
Corporation and DIMON, the parties have filed a joint proxy
statement/prospectus and other relevant documents concerning the
merger with the U.S. Securities and Exchange Commission.  
Stockholders are urged to read the proxy statement/prospectus
regarding the proposed transaction and other relevant documents
filed with the sec because they will contain important
information.  Interested parties may obtain a free copy of the
proxy statement/prospectus, as well as other filings containing
information about Standard Commercial Corporation and DIMON free
at the Securities and Exchange Commission -- http://www.sec.gov/  
Copies of the proxy statement/prospectus can also be obtained,
without charge, by directing a request to:

         Standard Commercial Corporation
         2201 Miller Road
         P.O. Box 450
         Wilson, North Carolina 27894
         Attn: Investor Relations
               (252) 291-5507

The respective directors and executive officers of Standard
Commercial Corporation and DIMON and other persons may be deemed
to be "participants" in the solicitation of proxies in respect of
the proposed merger.  Information regarding Standard Commercial
Corporation's directors and executive officers is available in its
proxy statement filed with the SEC on June 23, 2004.  Other
information regarding the participants in the proxy solicitation
and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the proxy
statement/prospectus and other relevant materials to be filed with
the SEC when they become available.

                        About the Company

Headquartered in Wilson, North Carolina, Standard Commercial is an
independent leaf tobacco dealer and operates in over thirty
countries.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 15, 2004,
Moody's Investors Service placed the ratings of Standard
Commercial Corporation and Dimon Incorporated under review with
direction uncertain, following the announcement by the two
companies of a definitive merger agreement. The transaction
remains subject to shareholders and regulatory approvals.

Ratings placed under review with direction uncertain:

   * Standard Commercial Corporation

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

   * Standard Commercial Tobacco Company

     -- Bank Credit facility, at Ba3

   * Dimon Incorporated

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

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

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


STATER BROS: Dec. 26 Balance Sheet Upside-Down by $33.8 Million
---------------------------------------------------------------
Jack H. Brown, Chairman, President and Chief Executive Officer of
Stater Bros. Holdings Inc. reported financial results for the
first quarter of fiscal 2005 ended Dec. 26, 2004.

Sales for the thirteen week first quarter ended December 26, 2004,
understandably decreased 18.3% to $839.1 million compared to
$1.027 billion for the thirteen weeks ended December 28, 2003.  
Results for the period ended December 28, 2003 included increased
sales due to the Southern California grocery labor dispute.  Like
store sales decreased 22.2% for the thirteen weeks ended December
26, 2004 compared to the thirteen weeks ended December 28, 2003.

The Company reported net income for the thirteen week first
quarter ended December 26, 2004 of $3.4 million compared to net
income of $34.6 million for the thirteen week first quarter ended
December 28, 2003.  Prior year results benefited from the labor
dispute in Southern California.

Mr. Brown said: "The decline in sales in the current year is due
to the high sales level in the prior year during the Southern
California grocery labor dispute.  While the sales have declined
we are pleased with the amount of new customers we have been able
to retain.  This year's results reflect our Stater Bros.  Family
post-strike retention efforts to retain many of our new "Valued
Customers" providing excellent service and value.  We are
determined to maintain the existing level of new customers the
Stater Bros.  Family obtained during the labor dispute.  We remain
committed to providing a friendly and satisfying shopping
experience to all our "Valued Customers" on every one of their
visits to our stores."

                        About the Company

Stater Bros. Holdings Inc. is the largest privately held
Supermarket Chain in Southern California and operates 160
supermarkets through its wholly owned subsidiary, Stater Bros.
Markets.

For information contact: Jack H. Brown, Chairman, President and
Chief Executive Officer at (909) 783-5000.

Stater Bros. Markets currently operates 160 Full Service
Supermarket locations, with 47 in San Bernardino County, 44 in
Riverside County, 30 in Orange County, 27 in Los Angeles County,
10 in Northern San Diego County, and 2 in Kern County.  There are
over 16,000 members of the Stater Bros. "Family" of Employees.  
Headquartered in Colton, California, Stater Bros., has been
serving Southern California customers since 1936.

At Dec. 26, 2004, Stater Bros.' balance sheet showed a $33,830,000
stockholders' deficit, compared to a $37,191,000 deficit at
Sept. 26, 2004.


STONE TOWER: S&P Places Ratings on CreditWatch Positive
-------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on the class
A-2, B, C, D-1, and D-2 notes of Stone Tower CLO Ltd., a cash flow
balance sheet CLO transaction, on CreditWatch with positive
implications.  At the same time, the 'AAA' rating on the class A-1
notes is affirmed.

The positive CreditWatch placements reflect factors that have
positively affected the credit enhancement available to support
the class A-2, B, C, D-1, and D-2 notes since the deal closed in
July 2003.  These factors include increases in the class A, B, C,
and D overcollateralization ratios and paydowns totaling
$169.312 million on the class A-1 notes.  As of the most recent
trustee report available, dated Jan. 15, 2005, the class A par
value test ratio was 152.21%.  This compares to a ratio of 120.04%
reported on the initial trustee report (Sept. 15, 2003) and a test
minimum ratio of 108.04%.  Standard & Poor's noted that the par
value ratios for the other classes have similarly increased.

Standard & Poor's will be reviewing the results of current cash
flow runs generated for Stone Tower CLO Ltd. to determine the
level of future defaults the rated notes can withstand under
various stressed default timing and interest rate scenarios, while
still paying all of the interest and principal due on the notes.
The results of these cash flow runs will be compared to the
projected default performance of the performing assets in the
collateral pool to determine whether the ratings currently
assigned to the notes remain consistent with the amount of credit
enhancement available.
    
             Ratings Placed on CreditWatch Positive
                      Stone Tower CLO Ltd.

                 Rating
    Class   To              From          Balance ($ mil.)
    -----   --              ----          ----------------
    A-2     AA/Watch Pos    AA            12.000
    B       A-/Watch Pos    A-            14.750
    C       BBB/Watch Pos   BBB           11.250
    D-1     BB/Watch Pos    BB            4.750
    D-2     B+/Watch Pos    B+            4.875
   
                        Rating Affirmed
                      Stone Tower CLO Ltd.

               Class   Rating   Balance ($ mil.)
               -----   ------   ----------------
               A-1     AAA               93.436
     
Transaction Information

Issuer:               Stone Tower CLO Ltd.
Co-issuer:            Stone Tower CLO Corp.
Manager:              Stone Tower Debt Advisors
Underwriter:          Credit Suisse First Boston
Trustee:              Wachovia Bank N.A.
Transaction type:     Cash flow balance sheet CLO
     
For information on Standard & Poor's CDO Portfolio Benchmarks and
Rated Overcollateralization (ROC) Statistic, please see "ROC
Report January 2005," published on RatingsDirect, Standard &
Poor's Web-based credit analysis system, and on the Standard &
Poor's Web site at http://www.standardandpoors.com/ Go to "Fixed  
Income," under "Browse by Sector" choose "Structured Finance," and
under Commentary & News click on "More" and scroll down to the
desired articles.


TALCOTT NOTCH: S&P Affirms BB- Rating on Class A-4 Notes
--------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on the class
A-3B and A-3L notes issued by Talcott Notch CBO I Ltd., a
high-yield arbitrage CBO transaction managed by General Re-New
England Asset Management, and removed them from CreditWatch with
positive implications, where they were placed Sept. 2, 2004.  At
the same time, the ratings on the class A-2L and A-4 notes are
affirmed based on the credit enhancement available to support the
notes.  The ratings on the class A-3B, A-3L, and A-4 notes were
previously lowered Jan. 8, 2003 and Aug. 25, 2003.

The raised ratings reflect factors that have positively affected
the credit enhancement available to support the A-3B and A-3L
notes since the last downgrade in August 2003.  The primary factor
was an increase in the level of overcollateralization available to
support the notes.  According to the most recent trustee report,
dated Jan. 17, 2005, the senior class A overcollateralization
ratio was at 138.7%, up from a ratio of 119.6% at the time of the
Aug. 25, 2003 rating action, and above the minimum required ratio
of 120%.

Standard & Poor's reviewed the results of current cash flow runs
generated for Talcott Notch CBO I Ltd. to determine the level of
future defaults the rated notes can withstand under various
stressed default timing and interest rate scenarios, while still
paying all of the interest and principal due on the notes.  When
the stressed performance of the transaction was then compared to
the projected default performance of the current collateral pool,
Standard & Poor's found that the projected performance of the
class A-3L and A-3B notes, given the current quality of the
collateral pool, was not consistent with the prior ratings.
Consequently, Standard & Poor's has raised its ratings on
class A-3B and A-3L notes to the new levels.  Standard & Poor's
will continue to monitor the performance of the transaction to
ensure that the ratings assigned to the rated classes continue to
reflect the credit enhancement available to support the notes.
   
      Ratings Raised and Removed from Creditwatch Positive
                    Talcott Notch CBO I Ltd.

                               Rating
                    Class   To         From
                    -----   --         ----
                    A-3B    AA         AA-/Watch Pos
                    A-3L    AA         AA-/Watch Pos
    
                        Ratings Affirmed
                    Talcott Notch CBO I Ltd.
   
                         Class   Rating
                         -----   ------
                         A-2L    AAA
                         A-4     BB-

Transaction Information

Issuer:              Talcott Notch CBO I Ltd.
Co-issuer:           Talcott Notch CBO I Ltd. (Delaware)
                     Corp.
Underwriter:         Bear Stearns Cos. Inc.
Trustee:             JPMorgan Chase
Transaction type:    Arbitrage corporate HY CBO
    
   Tranche                     Initial   Prior        Current
   Information                 Report    Downgrade    Action
   -----------                 -------   ---------    -------
   Date (MM/YYYY)              1/2000    8/2003       2/2005

   Cl. A-1L note rtg.          AAA       AAA          NR
   Cl. A-2L note rtg.          AAA       AAA          AAA
   Cl. A-3B note rtg.          AAA       AA-          AA
   Cl. A-3L note rtg.          AAA       AA-          AA
   Sr. class A O/C ratio       129.28%   119.6%       138.5%
   Sr. class A O/C ratio min.  120.0%    120.0%       120.0%
   Cl. A-4 note rtg.           A-        BB-          BB-
   Cl. A O/C ratio             118.79%   109.7%       119.1%
   Cl. A O/C ratio min.        110.0%    110.0%       110.0%
    
      Portfolio Benchmarks                        Current
      --------------------                        -------
      S&P wtd. avg. rtg. (excl. defaulted)        B+
      S&P default measure (excl. defaulted)       3.28%
      S&P variability measure (excl. defaulted)   2.33%
      S&P correlation measure (excl. defaulted)   1.18
      Oblig. rtd. 'BBB-' and above                15.01%
      Oblig. rtd. 'BB-' and above                 47.23%
      Oblig. rtd. in 'CCC' range                  6.84%
      Oblig. rtd. 'CC', 'SD', or 'D'              17.93%
    
                   S&P Rated   Current
                   O/C (ROC)   Rating Action
                   ---------   -------------
                   Cl. A-2L    182.48% (AAA)
                   Cl. A-3B    108.61% (AA)
                   Cl. A-3L    108.61% (AA)
                   Cl. A-4     102.35% (BB-)
    
For information on Standard & Poor's CDO Portfolio Benchmarks and
Rated Overcollateralization (ROC) Statistic, please see "ROC
Report January 2005," published on RatingsDirect, Standard &
Poor's Web-based credit analysis system, and on the Standard &
Poor's Web site at http://www.standardandpoors.com/ Go to "Credit  
Ratings," under "Browse by Business Line" choose "Structured
Finance," and under Commentary & News click on "More" and scroll
down to the desired article.


TEE JAYS MANUFACTURING: Section 341(a) Meeting Slated for March 23
------------------------------------------------------------------
The Bankruptcy Administrator will convene a meeting of Tee Jays
Manufacturing Co., Inc.'s creditors at 10:00 a.m., on March 8,
2005, at Federal Building, Cain St. Entrance, Room 200, Decatur,
Alabama.  This is the first meeting of creditors required under 11
U.S.C. Sec. 341(a) in all bankruptcy cases.

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

Headquartered in Florence, Alabama, Tee Jays Manufacturing Co.,
Inc., is a textile manufacturing company.  The Company filed for
chapter 11 protection on February 4, 2005 (Bankr. N.D. Ala. Case
No. 05-80527).  Stuart M. Maples, Esq., at Johnston Moore Maples &
Thompson represents the Debtor in its restructuring efforts.  When
the Debtor filed for protection from its creditors, it estimated
assets and debts between $50 million and $100 million.


UAL CORP: Inks Pact to Settle Advertising Dispute with Fallon
-------------------------------------------------------------
Prior to UAL Corporation and its debtor-affiliates' bankruptcy
filing, Fallon, Inc., provided the Debtors with various
advertising agency services, including advertisement creation and
design, advertisement layout, placement and marketing strategy
services and advertisement production.  Fallon also purchased
production services from third parties and purchased media for the
Debtors' advertisements.  The Debtors paid Fallon for its
services, for acting as their agent and for other services that
were passed on to third parties.

In some instances, advertisements or placement schedules were  
modified or cancelled, resulting in credits in the Debtors' favor  
held by Fallon.  The Debtors' Prepetition Credits with Fallon  
total $1,995,447.

On May 9, 2003, Fallon filed Claim No. 36639 for $1,873,869 for  
various unpaid services and third party invoices.  Fallon  
asserted that the Claim was secured by the Prepetition Credits.

In September 2004, the Debtors notified Fallon that certain  
payments may constitute avoidable transfers within the meaning of  
Section 547 of the Bankruptcy Code.  However, Fallon argued that:

  a) a portion of the transfers were advance payments to third
     parties;

  b) the transfers were made in the ordinary course of business;

  c) a portion of the payments reflected Fallon's role as a mere
     conduit and not the final recipient; and

  d) Fallon provided value to the Debtors.

Thus, the parties engaged in good-faith negotiations and  
stipulate that:

  a) Fallon is entitled to an allowed secured claim for
     $1,873,869 that arises from a right to set off that amount
     of the Prepetition Credits;

  b) Fallon will pay the Debtors the $121,578 balance of the
     Prepetition Credits;

  c) Fallon will pay the Debtors $150,000 to settle the
     Preference Claim;

  d) Fallon will provide the Debtors with a discount against its
     fees for the next 12 months at this schedule:

     1) $0 to $2,500,000 in fees will be discounted at 3%;

     2) $2,500,000 to $4,000,000 in fees will be discounted at
        4%; and

     3) fees over $4,000,000 will be discounted at 5%;

  e) The Fallon Claim will be satisfied after the set-off is
     effected and the Debtors will withdraw their objection to
     Fallon's Claim.

The Stipulation enables both parties to avoid the costs of  
additional negotiation or litigation.

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


UAL CORP: Court Okays Labor Pact Changes with Flight Attendants
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
authorizes the modifications of UAL Corporation and its debtor-
affiliates' labor agreement with the Association of Flight
Attendants - CWA.

As reported in the Troubled Company Reporter on Jan. 25, 2005,
the Debtors have been trying to modify collective bargaining
agreements with their unions.  On Nov. 5, 2004, the Debtors
filed a request pursuant to Section 1113(c) of the Bankruptcy
Code to reject the AFA-CWA collective bargaining agreement, among
others.  The Debtors have repeatedly stated that consensual
agreements with the unions are preferable.  Also, on November 5,
the Debtors presented their unions, including the AFA, with
opening proposals to modify the collective bargaining agreements.
Since that time, the Debtors have engaged in intense discussions
with the AFA's negotiating committee to agree on a contract that
would achieve the needed cost reductions, while avoiding Section
1113(c) relief against the AFA.

James H.M. Sprayregen, Esq., at Kirkland & Ellis, in Chicago,
tells the Court that on Jan. 11, 2005, the Master Executive
Council of the AFA accepted a term sheet from the Debtors.  The
membership ratification process began on January 18 and should be
completed by Jan. 31, 2005.

Under the Letter Agreement, all hourly pay rates will be reduced
by 9.5%, effective Jan. 7, 2005.  Purser, galley, LIP and
language hourly premiums will be reduced by 9.0%. Understaffing
Pay will be reduced from $10.00 to $5.00 per hour.  From 2007
through 2009, pay rates will increase by 2.0% every year.  The
Agreement provides for modified vacation accrual and sick leave.

In return for these concessions, the AFA will receive a
percentage distribution of equity or other consideration provided
to general unsecured creditors.  The AFA stands to receive cash
incentives under a Success Sharing Program up to 1.0% of wages
from 2005 through 2009, depending on the Debtors' performance in
certain metrics.  The Debtors will withdraw their Section 1113
Rejection Motion without prejudice as it relates to the AFA.

The AFA may terminate the Agreement if the Debtors fail to revise
the labor contracts of other unions or fail to revise the wages
and benefits of Salaried and Management employees.

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


UNITED HOSPITAL: Creditors Committee Taps Thelen Reid as Counsel
----------------------------------------------------------------
The Official Committee of Unsecured Creditors of New York United
Hospital Medical Center asks the U.S. Bankruptcy Court for the
Southern District of New York for permission to employ Thelen Reid
& Priest LLP, as its counsel.

Thelen Reid is expected to:

   a) assist the Committee in the exercise of oversight with
      respect to the Debtor's affairs including all issues
      impacting the Committee and the Debtor in its chapter 11
      case;

   b) prepare on behalf of the Committee all necessary
      applications, motions, orders, reports and other legal
      papers;

   c) appear before the Court to represent the interests of the
      Committee and assist in the negotiation, formulation,
      drafting and confirmation of any plan of reorganization or
      liquidation and its related matters;

   d) assist the Committee in the exercise of oversight with
      respect to any to any transfer, pledge, conveyance, sale or
      other liquidation of the Debtor's assets;

   e) assist the Committee in the investigation of the Debtor's
      assets, liabilities, financial condition and operating
      issues relevant to the Debtor's chapter 11 case;

   f) perform all other services to the Committee that are
      necessary in the Debtor's chapter 11 case.

Martin G. Bunin, Esq., a Member at Thelen Reid, is the lead
attorney for the Committee.  

Mr. Bunin reports Thelen Reid's professionals bill:

    Designation              Hourly Rate
    -----------              -----------
    Partners                 $330 - $685
    Counsels                 $320 - $600
    Associates               $210 - $460
    Legal Assistants         $115 - $230

Thelen Reid assures the Court that it does not represent any
interest adverse to the Committee, the Debtor or its estate.

Headquartered in Port Chester, New York, New York United Hospital
Medical Center is a 224-bed, community healthcare provider and a
member of the New York-Presbyterian Healthcare System, serving
several Westchester communities, including Port Chester, Rye,
Mamaroneck, Rye Brook, Purchase, Harrison and Larchmont.  The
Company filed for chapter 11 protection on December 17, 2004
(Bankr. S.D.N.Y. Case No. 04-23889).  Lawrence M. Handelsman,
Esq., at Stroock & Stroock & Lavan LLP, represents the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed total assets of $39,000,000 and
total debts of $78,000,000.


UNITED HOSPITAL: Hires Kurron Shares as Restructure Managers
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave New York United Hospital Medical Center permission to employ
Kurron Shares of America, Inc., as its restructuring managers.

The Court also approved the Firm's designation of Philip G. Dionne
as President and Chief Executive Officer for the Debtor, nunc pro
tunc, Dec. 17, 2004.  The Court also ordered that Mr. Dionne will
continue to provide services to the Debtor through Feb. 11, 2005.

The Court approved the Management Agreement between the Debtor and
Kurron Shares.  The Agreement states that the Debtor's continued
employment of Mr. Dionne after Feb. 11, 2005, is dependent upon
the mutual consent by the Debtor and the Creditors Committee and
subject to the Court's approval.  

Kurron Shares will:

   a) manage the Debtor's daily operations and restructuring
      or liquidation efforts, including negotiating with creditors
      and other parties-in-interest;
  
   b) provide reporting and testimony to Court, and develop a plan
      of reorganization or liquidation for the Debtor, subject to
      the approval of the Debtor's Board of Trustees;

   c) oversee the Debtor's day-to-day operations, coordinate and
      manage the chapter 11 process and communicate with
      customers, lenders, suppliers, employees, and other parties-
      in-interest;

   d) develop and implement a business plan to rehabilitate or
      liquidate the Debtor's business, through the design and
      implementation of programs to manage or divest assets,
      improve operations, reduce costs, and restructure or
      liquidate, all subject to the approval of the Debtor's Board
      of Trustees;

   e) interface with regulatory authorities, community leaders,
      and organizations on the Debtor's behalf;

   d) ensure that the Debtor complies with all obligations under
      the Bankruptcy Code, including financial reporting to the
      Court and parties-in-interest;

   e) represent the Debtor in dealings with statutory committees,
      their constituencies, and their professionals; and

   f) assist the Debtor in other matters related to the managing
      and restructuring of its business as may be mutually agreed
      upon by the Debtor and Kurron Shares.

Arnold I. Katz, a Principal at Kurron Shares, discloses that the
Firm received a $137,000 retainer.  Mr. Katz discloses that the
Firm will bill the Debtor a weekly fee of $17,135.00 for Mr.
Dionne's services.

Mr. Katz reports Kurron Shares' professionals bill:

    Designation            Hourly Rate
    -----------            -----------
    Principals             $475 - $650
    Senior Associates         $425
    Associates                $250

Kurron Shares assures the Court that it does not represent any
interest adverse to the Debtor or its estate.

Headquartered in Port Chester, New York, New York United Hospital
Medical Center is a 224-bed, community healthcare provider and a
member of the New York-Presbyterian Healthcare System, serving
several Westchester communities, including Port Chester, Rye,
Mamaroneck, Rye Brook, Purchase, Harrison and Larchmont.  The
Company filed for chapter 11 protection on December 17, 2004
(Bankr. S.D.N.Y. Case No. 04-23889).  Lawrence M. Handelsman,
Esq., at Stroock & Stroock & Lavan LLP, represents the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed total assets of $39,000,000 and
total debts of $78,000,000.


US AIRWAYS: Wants to Employ Global Insight as Experts
-----------------------------------------------------
US Airways, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Eastern District of Virginia for
authority to employ Global Insight, Inc., effective as of November
19, 2004, to provide expert consulting services and backup support
services for certain aspects of the Chapter 11 cases.  

Dr. James W. Gillula, Professor Michael L. Wachter and Professor
Barry T. Hirsch at Global Insight will be the primary
professionals on this assignment.

Global Insight was created by combining two leading economic and
financial forecasting companies -- DRI, formerly Data Resources
Inc., and WEFA, formerly Wharton Econometric Forecasting
Associates.

Upon integration in October 2002, the company changed its name to
Global Insight.  Global Insight is one of the world's leading
economic information and consulting firms with over 500 employees
around the world, including Canada, France, Italy, Germany, South
Africa, the United Kingdom and the United States.  Global Insight
provides business decision makers with industry expertise,
analysis, market evaluation, comparative industry rankings and
data for over 70 industries around the world.

The Experts at Global Insight enjoy the highest professional
standing and reputation, with a wealth of experience in providing
consulting services to a wide cross-section of industries.  The
Experts and Global Insight are well qualified and able to provide
expert consulting services to the Debtors in a cost-effective,
efficient and timely manner.  Their services will not be
duplicative of other professionals.

Brian P. Leitch, Esq., at Arnold & Porter, in Denver, Colorado,
informs the Court that the Experts and Global Insight have already
provided expert consulting services to the Debtors, on three
matters:

  a) The Application to Reject Certain Collective Bargaining
     Agreements;

  b) The Application to Reduce Retiree Health Benefits; and

  c) The Motion to Approve Termination of Certain Defined Benefit
     Retirement Plans and Make Necessary Findings.

The customary hourly rates charged by the Experts and Global
Insight are:

    Michael L. Wachter    $425
    James W. Gillula      $325
    Barry T. Hirsch       $175
    Consultants           $175
    Associates            $110

The Experts and Global Insight ascertain that they have no
connection with the Debtors, their creditors or other parties in
interest in these cases and do not hold any interest adverse to
the Debtors' estates.  The Experts and Global Insight are a
"disinterested person" as defined in Section 101(14) of the
Bankruptcy Code.

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

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

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

US Airways and its subsidiaries filed another chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).  Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts.  In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts.  (US Airways Bankruptcy News, Issue
No. 80; Bankruptcy Creditors' Service, Inc., 215/945-7000)


USM CORPORATION: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: USM Corporation
        dba Hudson Machinery
        dba United Global Supply
        dba United Shoe Machinery
        32 Stevens Street
        Haverhill, Massachusetts 01831

Bankruptcy Case No.: 05-40541

Type of Business: The Debtor manufactures, sells, and distributes
                  shoe machinery and parts to the footwear
                  industry in North and Central America.  It also
                  manufactures, sells, and distributes industrial
                  cutting machines and accessories.
                  See http://www.hudsonmachinery.com/

Chapter 11 Petition Date: February 4, 2005

Court:    District of Massachusetts (Worcester)

Judge:    Henry J. Boroff

Debtor's Counsel: Christopher Martin Winter, Esq.
                  Michael R. Lastowski, Esq.
                  Jennifer L. Hertz, Esq.
                  Duane Morris, LLP
                  1100 North Maket Street
                  Wilmington, Delaware 19801-1246
                  Tel: (302) 657-4951
                  Fax: (302) 657-4901

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

        Entity                   Nature of Claim     Claim Amount
        ------                   ---------------     ------------
Teradyne Connection Systems      Legal Judgment          $902,348
PO Box 3644
Boston, Massachusetts 02241

Black & Decker                   PREBS                   $830,000
c/o Miles & Stockbridge
10 Light Street
Baltimore, MD 21202-1497

ATOM S.P.A.                      Trade                   $265,806
Via Morosini, 6
Vigevano 27079, Italy

Fortuna                          Trade                    $84,015

OFC Capital                      Trade                    $69,377

B.D.F. SRL                       Trade                    $67,205

British United Shoe Machine      Trade                    $66,682

Essebi S.R.L.                    Trade                    $58,694

Silpar Di Rossi Felice EC.SNC    Trade                    $30,351

Hudson Industrial Park           Landlord                 $29,357

Keyspan Energy Delivery          Utility                  $23,692

Bostik Findley, Inc.             Trade                    $21,325

Secure Horizons                  Trade                    $18,200

DHL Express, Inc.                Trade                    $16,699

Roberts Machine Shop Inc.        Trade                    $15,897

Pilgrim Shoe & Sewing Machine    Trade                    $12,635

B&D Associates, Inc.             Trade                    $11,740

Lewiston Shoe Machinery Company  PREBS                    $10,674

Austro Plast                     Trade                    $10,625

Mass Electric                    Utility                  $10,497


WINN-DIXIE: Hosting Second Quarter Conference Call Today
--------------------------------------------------------
Winn-Dixie Stores (NYSE: WIN) will its second quarter earnings
live over the Internet today, Feb. 10, at 8:30 a.m. EST with Winn-
Dixie President and CEO Peter Lynch and Senior Vice President and
CFO Bennett Nussbaum.

To access the live webcast, log on to:
http://phx.corporate-ir.net/playerlink.zhtml?c=78738&s=wm&e=988094or call  
1-888-578-6632.  There is no passcode for the call; just tell the
operator you are calling for the Winn-Dixie event.

For more information, call Kathy Lussier of Winn-Dixie, at
+1-904-370-6025 or kathylussier@winn-dixie.com

                        About the Company

Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of  
the nation's largest food retailers.  Founded in 1925, the Company
is headquartered in Jacksonville, Fla.  Peter Lynch serves as
president and CEO.

If you are unable to participate during the live Web cast, the
call will be archived on the Web site http://www.winn-dixie.com/
until Feb. 17, 2005, at midnight.  To access the replay, under
About Winn-Dixie/Investor Information, click on "Second Quarter
Conference Call."  The call will also be archived at
http://www.prnewswire.com/

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 1, 2004,
Standard & Poor's Ratings Services lowered its ratings on Winn-
Dixie Stores Inc.   The corporate credit rating was lowered to
'B-' from 'B'.  The outlook is negative.

"The downgrade is based on weaker-than-expected profitability and
cash flow," explained Standard & Poor's credit analyst Mary Lou
Burde.  "Although the company should have sufficient liquidity to
fund its near-term operating and capital needs, improved operating
results or additional funding will be needed to execute longer-
term strategic initiatives."


YOUTHSTREAM MEDIA: Losses & Deficit Trigger Going Concern Doubt
---------------------------------------------------------------
YouthStream Media Neworks, Inc., has incurred recurring operating
losses since its inception.  As of September 30, 2004, the Company
had an accumulated deficit of $343,834,000, a stockholders'
deficiency of $13,065,000, a working capital deficiency of
$3,453,000, and a net loss and negative cash flows from operating
activities for the year ended September 30, 2004 of $2,366,000 and
$901,000, respectively, and has insufficient capital to fund all
of its obligations.  In August and September 2002, the Company
defaulted on approximately $18,000,000 of its long-term debt.  In
addition, during the year ended September 30, 2004, the Company
sold its remaining operating business, as a result of which the
Company did not have any revenue-generating business operations at
September 30, 2004.  These conditions raise substantial doubt
about the Company's ability to continue as a going concern.

The Company's management intends to continue efforts to settle the  
Company's outstanding obligations and minimize operating costs.   
The Company believes that its current available cash resources
will be adequate to fund its current limited level of operations
through its fiscal year ended September 30, 2005.  However, to the
extent the Company's estimates and assumptions are inaccurate and
the Company is unable to successfully settle outstanding
obligations at reduced amounts, the Company may not have
sufficient cash resources to fund its ongoing obligations.  In
such event, the Company may be required to seek other funding and
consider a formal or informal restructuring or reorganization.

Prior to August 2002, YouthStream Media Networks, Inc., had a
media business and a retail business.  The media segment
represented the Company's media, marketing and promotional
services provided to advertisers by Network Event Theater, Inc.
and American Passage Media, Inc.  In August 2002, the Company sold
substantially all of the assets and certain liabilities from this
segment to Cass Communications, Inc., a subsidiary of Alloy, Inc.,
for $7 million in cash.  The Company discontinued any remaining
media operations at that time.  The retail segment consisted of
on-campus, online and retail store poster sales provided by its
Beyond the Wall subsidiary.  In February 2004, the Company sold
substantially all of the assets, subject to certain liabilities,
of this segment and discontinued its operation.  

In July 2004, the Company entered into a letter of intent to
acquire a steel mini-mill located in Ashland, Kentucky.  If the
Company is able to complete this transaction, the Company expects
to utilize all, or most, of its available cash resources to fund
such endeavor, and will therefore need to obtain additional
operating capital to fund corporate general and administrative
expenses either through internal or external resources.

The Company's management may also consider various strategic  
alternatives in the future, including the acquisition of new
business opportunities, which may be from related or unrelated
parties.  However, there can be no assurances that such efforts
will ultimately be successful.  The Company may finance any
acquisitions through a combination of debt and/or equity
securities.


YUKOS OIL: Gets Court Nod to Deposit $21 Million in Court Registry
------------------------------------------------------------------
According to Zack A. Clement, Esq., at Fulbright & Jaworski, in
Houston, Texas, Yukos Oil Company opened a bank account at
Southwest Bank of Texas in the name of Yukos USA, Inc., and
deposited into that account, cash owned by the Debtor to insure
that the Debtor would have sufficient funds to operate:

    (i) the office of its chief financial officer; and

   (ii) in its Chapter 11 case, including paying professionals.

Currently, the Southwest Account contains approximately $22
million of cash that is the Debtor's property.

Pursuant to a January 12, 2005, stipulation, the Debtor has
reached an agreement with the U.S. Trustee concerning a procedure
to invest, in compliance with Section 345 of the Bankruptcy Code,
the Estate Cash that is in the Southwest Account and in Fulbright
& Jaworski's Trust Account at Wells Fargo Bank.

However, the Debtor has concluded that it can protect its Estate
Cash better by paying $21 million from the Southwest Account into
the Registry of the Court in its own name.

The Debtor recognizes that it will require a court order for any
of the money to be removed from the Registry of the Court.  The
Debtor is prepared to accept that burden.  Mr. Clement says that
the Debtor want to ensure that no one has access to its Estate
Cash except pursuant to Court order.

Accordingly, the Debtor seeks the United States Bankruptcy Court
for the Southern District of Texas's authority to transfer all
Estate Cash in the Southwest Account except for $1 million into
the Court Registry to be invested by the Clerk of the Court in
compliance with the Court's investment guidelines, Section 345 and
the U.S. Trustee Investment Guidelines.

The Debtor will provide adequate notice to the Clerk of the Court
of any subsequent cash deposit it makes into the Registry of the
Court, and will promptly thereafter report any new deposit to the
U.S. Trustee.

Mr. Clement also notes that the Debtor, as a holding company, will
not be paying a large volume of bills.  Many of the Debtor's bills
will be for professionals working for the estate, and those
already are subject to Court approval.  Small expenditures, made
in the ordinary course, can be paid out of the $1 million Estate
Cash in the Southwest Account.

                       Deutsche Bank Objects

On behalf of Deutsche Bank AG, Jeffrey E. Spiers, Esq., at
Andrews Kurth, LLP, in Houston, Texas, argues that the Debtor has
not provided any concrete justification for its request.  The
Debtor provides no description of the alleged impending harm that
is threatening Yukos USA's funds in the Yukos USA account.

Mr. Spiers notes that the Debtor has already worked out an agreed
stipulation with the U.S. Trustee whereby Yukos USA would invest
its cash in investments backed by the Full Faith and Credit of the
U.S. Government and thereby in compliance with Section 345 of the
Bankruptcy Code.  Yukos USA has already invested the funds in
compliance with the agreement with the U.S. Trustee and has no
need to place the majority of the funds in the registry of the
Court.

Deutsche Bank does not believe that the Debtor's request and the
stipulation with the U.S. Trustee are linked.  The U.S. Trustee
Stipulation is entirely separate and distinct.  The only linkage
between the two motions is the Debtor's attempt to have the Court
make findings on issues germane to the Court's consideration of
Deutsche Bank's Motion to Dismiss and prior to Deutsche Bank's
opportunity to conduct discovery on these issues on a timetable
agreed to by the Debtor.

Deutsche Bank suggests that the Court defer ruling on the
Debtor's request until after it has ruled on the Motion to
Dismiss.

In the event the Court is inclined to consider the Debtor's
request, Deutsche Bank asks the Court to refrain from making any
findings of fact or conclusions of law prejudicial to the full and
fair development and presentation to the Court of these issues
relevant to the pending Motion to Dismiss.

                          *     *     *

Judge Clark authorizes Yukos Oil Company and Yukos USA, Inc., to
pay all but $1,000,000 of the Estate Cash in the Yukos USA
Account into the Court Registry to be held in the name and
ownership of Yukos Oil.  Yukos Oil may make subsequent cash
deposits into the Court Registry.  Yukos Oil will provide adequate
notice to the Clerk of the Court of any subsequent cash deposit it
proposes to make and will promptly after new deposit is made
report any deposit to the U.S. Trustee.  Any withdrawal or payment
of funds from the Court Registry may only be made pursuant to a
Court Order.

Headquartered in Houston, Texas, Yukos Oil Company --
http://www.yukos.com/-- is an open joint stock company existing  
under the laws of the Russian Federation.  Yukos is involved in
the energy industry substantially through its ownership of its
various subsidiaries, which own or are otherwise entitled to enjoy
certain rights to oil and gas production, refining and marketing
assets.  The Company filed for chapter 11 protection on Dec. 14,
2004 (Bankr. S.D. Tex. Case No. 04-47742).  Zack A. Clement, Esq.,
C. Mark Baker, Esq., Evelyn H. Biery, Esq., John A. Barrett, Esq.,
Johnathan C. Bolton, Esq., R. Andrew Black, Esq., Fulbright &
Jaworski, LLP, represent the Debtor in its restructuring efforts.  
When the Debtor filed for protection from its creditors, it listed
$12,276,000,000 in total assets and $30,790,000,000 in total
debts.  (Yukos Bankruptcy News, Issue No. 8; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


ZEMACH CORP: Taps Backenroth Frankel as Bankruptcy Counsel
----------------------------------------------------------
Zemach Corporation ask the U.S. Bankruptcy Court for the Southern
District of New York for permission to employ Backenroth Frankel &
Krinsky, LLP, as its general bankruptcy counsel.

Backenroth Frankel is expected to:

   a) provide the Debtor with legal counsel with respect to its
      powers and duties as a debtor-in possession in the continued
      operation of its business and management of its property
      during its chapter 11 case;

   b) prepare on behalf of the Debtor all necessary applications,
      answers, orders, reports, and other legal documents which
      may be required in connection with its chapter 11 case;

   c) provide the Debtor with legal services with respect to
      formulating and negotiating a plan of reorganization with
      creditors; and

   d) perform other legal services for the Debtor as may be
      required during the course of its chapter 11 case, including
      the institution of actions against third parties, objections
      to claims, and the defense of actions which may be brought
      by third parties against the Debtor.

Mark A. Frankel, Esq., a Member at Backenroth Frankel, is the lead
attorney for the Debtor.  Mr. Frankel discloses that the Firm
received a $15,000 retainer.  Mr. Frankel will bill the Debtor
$410 per hour for his services.

Mr. Frankel reports Backenroth Frankel's professionals bill:

    Designation          Hourly Rate
    -----------          -----------
    Counsels             $375 - $450
    Paralegals              $125

Backenroth Frankel assures the Court that it does not represent
any interest adverse to the Debtor or its estate.

Headquartered in Brooklyn, New York, Zemach Corporation filed for
chapter 11 protection on February 3, 2005 (Bankr. S.D.N.Y. Case
No. 05-10614).  When the Debtor filed for protection from its
creditors, it listed total assets of $13,602,000 and total debts
of $7,024,889.


ZEMACH CORP: Section 341(a) Meeting Slated for March 7
------------------------------------------------------
The U.S. Trustee for Region 2 will convene a meeting of Zemach
Corporation's creditors at 2:30 p.m., on March 7, 2005, at the
Office of the U.S. Trustee, 80 Broad Street, Second Floor, New
York City, New York 1004-1408.  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 Brooklyn, New York, Zemach Corporation filed for
chapter 11 protection on February 3, 2005 (Bankr. S.D.N.Y. Case
No. 05-10614).  Mark A. Frankel, Esq., at Backenroth Frankel &
Krinsky, LLP, represents the Debtor in its restructuring efforts.  
When the Debtor filed for protection from its creditors, it listed
total assets of $13,602,000 and total debts of $7,024,889.


* Sheppard Mullin Elects Five Attorneys to Partnership
------------------------------------------------------
Sheppard, Mullin, Richter & Hampton LLP has elevated five of its
attorneys to partner.  The five new partners are Jason Gasper, Roy
Goldberg, Jonathan Hangartner, Amar Thakur and Carlo Van den
Bosch.

"Each of these attorneys embody the firm's commitment to excellent
legal representation and client service and are strong additions
to the partnership.  We are very proud to have this exceptional
group of attorneys as our partners," said Guy Halgren, chairman of
the firm.

Jason Gasper, 35, is in the firm's Labor and Employment Practice
Group in the Los Angeles office.  Mr. Gasper has significant
experience representing employers in wage and hour class actions
and regularly counsels employers on personnel policies and
procedures, employee discipline matters, employment contracts, and
wage and hour issues.  He also conducts internal wage and hour
audits to identify potential employer liability before it surfaces
in a lawsuit or government audit.  Mr. Gasper has lectured
extensively on wage and hour law, and has also lectured on other
topics, including sexual harassment, discrimination, and leave of
absence issues.  He received his J.D. from Georgetown University
in 1996 and his undergraduate degree, cum laude, from University
of California, Los Angeles in 1993.

Roy Goldberg, 42, in the Business Trial Practice Group and based
in the firm's Washington, D.C. office, has extensive experience in
commercial and regulatory litigation before federal and state
courts, government agencies and domestic and international
arbitration panels.  Mr. Goldberg's substantive areas of
litigation include aviation matters, commercial contract disputes,
construction disputes, challenges to government user fees and
rules and regulations, intellectual property disputes, and
international trade matters.  Prior to joining the firm, he was a
Law Clerk to The Honorable Jim R. Carrigan, United States District
Court for District of Colorado.  Mr. Goldberg received his law
degree from the University of Colorado in 1987 and received his
undergraduate degree from University of Kansas in 1984.

Jonathan Hangartner, 40, is in the Intellectual Property Practice
Group and based in San Diego.  Mr. Hangartner represents clients
in a variety of intellectual property, complex commercial
litigation and international arbitration matters.  He has served
as lead trial and appellate counsel, successfully representing
clients in litigation involving claims of patent, trademark and
copyright infringement, misappropriation of trade secrets, unfair
competition and antitrust violations in federal courts throughout
California and in the Southern District of New York.  Mr.
Hangartner received his J.D., magna cum laude, from Pace
University in 1994, where he served on the editorial board of the
law review.  He received a B.S. in Engineering Physics, cum laude,
from Tufts University in 1987.  Upon completion of his
undergraduate studies, Mr. Hangartner worked as an engineer for
the U.S. Environmental Protection Agency for four years before
entering law school.  After law school, he served as law clerk to
United States District Judge Gerard L. Goettel in the U.S.
District Court for the Southern District of New York.

Amar Thakur, 35, in the firm's Intellectual Property Practice
Group in the Del Mar Heights office, has extensive experience in
corporate and intellectual property transactional matters,
including acquisition and protection of intellectual property,
technology transfer agreements, patent and software licensing
transactions, research and development transactions, marketing,
co-promotion and distribution agreements, professional services
agreements, materials transfer agreements, and laboratory services
agreements.  He also has counseled established corporations on
patent and trademark issues relevant to a focused intellectual
property portfolio, and conducted intellectual property audits and
analyses in furtherance of company mergers and acquisitions.  Mr.
Thakur received his J.D. from Arizona State University in 1995 and
a B.S. in Electrical Engineering from University of Washington in
1992.

Carlo Van den Bosch, 33, is a member of the firm's Intellectual
Property Practice Group and based in the firm's Orange County
office.  Mr. Van den Bosch specializes in intellectual property
litigation and transactions, with substantial expertise in high-
tech, Internet, entertainment and media matters.  He has extensive
experience in matters of infringement and the protection of
trademarks, inventions, works of authorship, and trade secrets
across a variety of industries, such as e-commerce, software,
television, healthcare, apparel, finance, real estate, and
entertainment, among others.  Prior to joining the firm, Mr. Van
den Bosch held positions in both the software and motion picture
industries.  Mr. Van den Bosch received his J.D. from the
University of Southern California in 1996 and a B.S. in Mechanical
Engineering from University of California, Los Angeles in 1993.

         About Sheppard, Mullin, Richter & Hampton LLP

Sheppard, Mullin, Richter & Hampton LLP --
http://www.sheppardmullin.com/-- is a full service AmLaw 100 firm  
with 430 attorneys in nine offices located throughout California
and in New York and Washington, D.C.  The firm's California
offices are located in Los Angeles, San Francisco, Santa Barbara,
Century City, Orange County, Del Mar Heights and San Diego.  
Sheppard Mullin provides legal expertise and counsel to U.S. and
international clients in a wide range of practice areas, including
Antitrust, Corporate and Securities; Entertainment and Media;
Finance and Bankruptcy; Government Contracts; Intellectual
Property; Labor and Employment; Litigation; Real Estate/Land Use;
Tax, Employee Benefits, Trusts and Estate Planning; and White
Collar Defense.  The firm was founded in 1927.

                          *********

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
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The TCR subscription rate is $675 for 6 months delivered via e-
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for the term of the initial subscription or balance thereof are
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                *** End of Transmission ***