TCR_Public/050211.mbx       T R O U B L E D   C O M P A N Y   R E P O R T E R

           Friday, February 11, 2005, Vol. 9, No. 35

                          Headlines

360NETWORKS INC: Directors & Officers Disclose New Equity Stakes
ADELPHIA COMMS: DIP Financing Maturity Extended to March 31
AERO PLASTICS: Will File Schedules & Statements on Valentine's Day
ALLIANCE ATLANTIS: Names Andrea Wood Integrated Operational Head
ALOHA AIRGROUP: Trustee Appoints 9-Member Creditors Committee

ALOHA AIRGROUP: Intends to Subpoena E-Mail Records from ISPs
AMERICAN MEDIA: Third Quarter Net Income Narrows to $281,000
ANC RENTAL: Liquidating Plan Declared Effective on Feb. 3
ANECO ELECTRICAL: Files Schedules of Assets & Liabilities
ATA AIRLINES: Balks at NatTel's Motion to Appoint Examiner

BALLY TOTAL: Moody's Pares Ratings on Credit Facilities
BEAR CREEK: S&P Rates Proposed $245 Million Unsecured Notes
BEAR STEARNS: Fitch Puts BB Rating on $2.277 Million Private Class
BEAR STEARNS: Moody's Junks Classes I & J Certificates
BELL CANADA: Receives 88.8% of Nexxlink Shares in Tender Offer

BLOCKBUSTER INC: Exchange Offer Cues Moody's to Review Ratings
CADMUS COMMS: Declares $0.0625 Per Share Quarterly Cash Dividend
CAMCO INC: Equity Deficit Widens to $22,879,000 at Dec. 31
CATHOLIC CHURCH: Court Allows Portland to Keep Union Bank Accounts
CITIGROUP MORTGAGE: Fitch Rates $9.2 Mil. Class M10 Cert. at BB+

COMPUTER ASSOCIATES: John Swainson Assumes CEO Post
CORN PRODUCTS: Board Authorizes Stock Repurchase Program
COVANTA ENERGY: Liquidating Trustee Wants to Close Eight Cases
DEX MEDIA: Forms Partnership with Aptas to Upgrade Capabilities
EARL BRICE: Look for Bankruptcy Schedules by Mar. 1

ELAN CORP: Final SEC Settlement Concludes Investigation
ENRON CORP: Inks Pact to Settle Two Federal Insurance Claims
EXIDE TECHNOLOGIES: Proposes $350 Million Senior Debt Offering
FALCON PRODUCTS: Gets Interim Okay to Use Fleet's Cash Collateral
FEDERAL-MOGUL: Insurers Says Plan Alters Business Relationship

FLOWSERVE CORP: Moody's Affirms Ratings & Says Outlook is Stable
FPL ENERGY: Fitch Assigns BB Rating on $100 Million Senior Debt
FREEDOM MEDICAL: U.S. Trustee Will Meet Creditors on Mar. 9
FRONTIER OIL: Hosting FY 2004 Conference Call on Feb. 23
GARDENA CALIFORNIA: S&P Pares Certificate Rating to BB- from BBB-

GENCORP INC: Posts $398 Million Net Loss in Fiscal 2004
GENOIL INC: Issues Stock to Complete Proposed Debt Settlement
GLOBAL LEARNING: Plan Confirmation Hearing Set for Mar. 3
GLOBAL LEARNING: Dismissal Hearing Continued to March 3
HEALTH NET: Names Stephen Lynch Pres. of Largest Health Plan Unit

HIGH VOLTAGE: Wants to Hire Akin Gump as Bankruptcy Counsel
HIGH VOLTAGE: Look for Bankruptcy Schedules by Mar. 25
HOLLY ENERGY: Moody's Puts Ba3 Rating on $150MM Sr. Unsec. Notes
INTERSTATE BAKERIES: Amends DIP Financing Agreement with JPMorgan
JARDEN CORP: Moody's Pares Rating on Sr. Sub. Notes to B3 from B2

KMART CORP: ESL Companies Swap Kmart Options for Sears Options
LEHMAN BROTHERS: S&P Slices Rating on Class L Certificates to BB+
LEUCADIA NATIONAL: Fitch Lowers Long-Term Issuer Rating to BB+
LIFESTREAM TECH: Sells Interactive's IP Rights to LifeNexus
MADISON RIVER: Earns $7.9 Million of Net Income in Fourth Quarter

MCDERMOTT INTERNATIONAL: Names Roger Brown to Board of Directors
MEGO FINANCIAL: Sells Real Property to Case Int'l for $565,000
MEYER'S BAKERIES: U.S. Trustee Will Meet Creditors on Mar. 18
MIRANT CORP: Reject Consumers Energy Contract to Save Costs
MORGAN STANLEY: Fitch Junks $22.6 Million Class H Series 1997-XL1

MORGAN STANLEY: S&P Puts Low-B Ratings on Six Certificate Classes
NATIONSLINK FUNDING: S&P Junks Class J Certificates
NNRG ENERGY: Tacoma City Seeks Summary Judgment on Four Issues
NTELOS INC: S&P Junks $225 Million Second-Lien Term Loan
OMNOVA SOLUTIONS: Consolidates Chemical Business Leadership

OWENS CORNING: Parties File Asbestos Estimation Post-Trial Briefs
PACIFIC COAST: S&P Places Ratings on CreditWatch Negative
PARMALAT: Tuscan Wants $57.5M Claim Allowed for Voting Purposes
PEGASUS SATELLITE: Court Approves Amended Disclosure Statement
PEGASUS SATELLITE: Nixes Claim Aggregation for Voting Proposal

PEGASUS SATELLITE: Has Until May 1 to Decide on Leases
PILLOWTEX CORP: Court Approves Sale of Trademark Rights to GGST
RURAL/METRO CORP: Moody's Junks $140M Senior Subordinated Notes
RURAL/METRO: Obtains Commitment for New Secured Credit Facilities
RURAL/METRO: S&P Junks $140 Million Senior Subordinated Notes

SMC HOLDINGS: Files for Chapter 11 Protection in Delaware
SMC HOLDINGS CORP: Case Summary & 20 Largest Unsecured Creditors
SOLUTIA INC: Court Approve CP Films & 3M Global Supply Agreement
STANDARD COMMERCIAL: Declares $0.0875 Quarterly Cash Dividend
STAR GAS: Fitch Revises Outlook to Negative After Inergy Purchase

STATE STREET: Must File Monthly Operating Reports by February 18
STELCO INC: Algoma Steel Withdraws from Purchase Talks
STELCO INC: Developing Reasonable Plan to Address Pension Issues
STELCO INC: Ontario Court Extends CCAA Protection Until Apr. 29
STERICYCLE INC: 4th Qtr. Net Income Up 3.5% to $19.1 Million

TEXEN OIL: Inks Control Block Sale Agreement
TROPICAL SPORTSWEAR: Court Okays $88.5 Million Sale to Perry Ellis
TRUMP HOTELS: Amended Plan's Classification & Treatment of Claims
TRUMP HOTELS: Feb. 14 Telephonic Disclosure Statement Hearing Set
UNISPHERE WASTE: All Five Directors Walk Away from Board

URS CORP: Earns $26.1 Million of Net Income in Fourth Quarter
US AIRWAYS: Pension Benefit Takes $2.3 Billion Pension Loss
US AIRWAYS: Wants to Enter into Fuel Hedging Programs
USM CORP: Judge Walsh Orders Transfer of Chapter 22 Case to Mass.
VEO: Voluntary Chapter 11 Case Summary

WISTON XIV: U.S. Trustee Will Meet Creditors on Mar. 4
YUKOS OIL: Judge Clark Approves Stipulation with U.S. Trustee

* Cadwalader Moves New York Offices to One World Financial Center
* Jonathan Aberman & David Dutil Join Mintz Levin's D.C. Office

* BOOK REVIEW: Health Plan: The Practical Solution

                          *********

360NETWORKS INC: Directors & Officers Disclose New Equity Stakes
----------------------------------------------------------------
As of January 18, 2005, Directors and Senior Officers of
360networks Corporation beneficially own directly or indirectly
these shares in 360:

                                         Number of     Percentage
Name                     Position      Shares Owned   Outstanding
----                     --------      ------------   -----------
Gregory B. Maffei        Director,           -             -
                          Chairman, &
                          CEO

William T. Brock         Director            -             -

Michael Brown            Director            -             -

George T. Haymaker, Jr.  Director            -             -

Wilbur L. Ross, Jr.      Director            -             -

David Van Valkenberg     Director            -             -

Chris Mueller            Senior VP,       32,501          0.02%
                          Finance

Rob Frasene              Senior VP,       30,004          0.02%
                          Operations

Lin Gentemann            Senior VP,       70,000          0.05%
                          General
                          Counsel and
                          Corporate
                          Secretary

In early 2004, Mr. Maffei transferred all of his 340,000 Shares to
a trust for the benefit of his four minor children.  Mr. Brock
resigned from the Board of Directors as of December 31, 2004,
while Mr. Ross resigned as of January 17, 2005.

The Directors and Senior Officers also own stock options in 360,
as of December 31, 2004:

                         Number of      Number of      Percentage
Name                  Options Owned  Options Vested  Outstanding
----                  -------------  --------------  -----------
Gregory B. Maffei       175,000            -              8.5%

William T. Brock         35,000         35,000            1.7%

Michael Brown            35,000         20,000            1.7%

George T. Haymaker, Jr.  35,000         20,000            1.7%

Wilbur L. Ross, Jr.      35,000         20,000            1.7%

David Van Valkenberg     35,000         20,000            1.7%

Chris Mueller            45,000            -              2.2%

Rob Frasene              45,000            -              2.2%

Lin Gentemann            35,000            -              1.7%

The maximum number of Shares authorized for issuance pursuant to
360's 2002 Long Term Incentive Award Plan is 3,750,000 Shares.

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)


ADELPHIA COMMS: DIP Financing Maturity Extended to March 31
-----------------------------------------------------------
On January 26, 2005, Adelphia Communications Corporation and its
debtor-affiliates entered into a commitment letter and a related
fee letter with JPMorgan Chase Bank, N.A., J.P. Morgan Securities
Inc., Citigroup Global Markets, Inc., and Citicorp North America,
Inc.  The Committed Banks agreed to provide a portion of and to
syndicate an extended debtor-in-possession credit facility.

The terms of the Commitment Letter contemplate:

    (i) the extension of the maturity date from March 31, 2005,
        the maturity date under the ACOM Debtors' Existing DIP
        Facility, to March 31, 2006;

   (ii) an increase in the aggregate commitments of the lenders
        from $1.0 billion, representing the aggregate commitments
        of the lenders under the Existing DIP Facility, to
        $1.3 billion, comprised of an $800 million revolving
        credit facility and a $500 million loan; and

  (iii) a decrease in the borrowing margins with respect to loans
        made under the Extended DIP Facility.

The commitment letter and the related fee letter will only become
binding on the ACOM Debtors upon Bankruptcy Court approval.

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


http://sec.gov/Archives/edgar/data/796486/000104746905002049/a2150738zex-10_01.htm

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


AERO PLASTICS: Will File Schedules & Statements on Valentine's Day
------------------------------------------------------------------
Aero Plastics, Inc., asks the U.S. Bankruptcy Court for the
Northern District of Georgia, Atlanta Division, for an additional
7-day extension to prepare and deliver its schedules of assets and
liabilities and statements of financial affairs.  The Debtor's
current deadline expired on Feb. 7.

Aero Plastics needs this brief extension to complete its schedules
and statements.  Aero assures the Court that creditors will have
ample time to review the documents before the Feb. 17 creditors
meeting.

Headquartered in Leominster, Massachusetts, Aero Plastics, Inc. --
http://www.aeroplastics.com/-- manufactures household products.
The Company filed for chapter 11 protection on Jan. 6, 2005
(Bankr. N.D. Ga. Case No. 05-60451). J. Michael Lamberth, Esq.,
at Lamberth, Cifelli, Stokes & Stout, PA, represents the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it estimated assets and debts between $10
million to $50 million.


ALLIANCE ATLANTIS: Names Andrea Wood Integrated Operational Head
----------------------------------------------------------------
Michael MacMillan, Chairman and CEO of Alliance Atlantis
Communications disclosed the appointment of Andrea Wood, Executive
Vice President, Business and Legal Affairs as head of the
integrated operational and corporate legal departments, effective
immediately.

Based in Toronto, Ms. Wood will oversee all operational and
corporate legal activities for Alliance Atlantis.  Having joined
Alliance Atlantis in 1992, Ms. Wood has played a significant
leadership role in the company on a broad range of business and
legal affairs issues.

"[Wednesday]'s appointment reflects our more efficient and
integrated organizational structure within Alliance Atlantis,"
said Michael MacMillan.  "In this new role, Andrea will continue
to provide invaluable leadership as our organization builds on our
solid foundation as one of Canada's best performing broadcasters."

                      About the Company

In 2005, Alliance Atlantis Communications Inc. --
http://www.allianceatlantis.com/-- celebrates its 10th
anniversary as a leading specialty broadcaster, continuing to
offer Canadians recognizable, high-quality brands boasting
targeted, high-quality programming across 13 specialty channels.
The Company co-produces and distributes a limited number of
television programs in Canada and internationally, including the
hit CSI franchise, and holds a 51% limited partnership interest in
Motion Picture Distribution LP, Canada's leading motion picture
distribution business. The Company's common shares are listed on
the Toronto Stock Exchange - trading symbols AAC.A, AAC.NV.B and
on NASDAQ - trading symbol.

                          *     *     *

As reported by the Troubled Company Reporter on Nov. 1, 2004,
Standard & Poor's Ratings Services raised its long-term corporate
credit rating on Alliance Atlantis Communications Inc. to 'BB'
from 'BB-'.  Standard & Poor's also assigned its 'BB' rating to
the company's proposed C$700 million senior secured bank facility.
A recovery rating of '3' was assigned to the loan, indicating
expectations of a meaningful recovery of principal (50%-80%) in
the event of default.  The bank loan rating is based on
preliminary terms and conditions and is subject to review once
final documentation is received.  Borrowings under the proposed
bank facility are being used to refinance the existing senior
subordinated debt and revolving credit facility.  Standard &
Poor's will withdraw the 'B' rating on the company's subordinated
debt, effective October 28, 2004.  The outlook is stable.


ALOHA AIRGROUP: Trustee Appoints 9-Member Creditors Committee
-------------------------------------------------------------
The United States Trustee for Region 15 appointed nine creditors
to serve on an Official Committee of Unsecured Creditors in Aloha
Airgroup, Inc., and its debtor-affiliate's chapter 11 cases:

        1. Air Line Pilots Association
           c/o Katz & Ranzman, P.C.
           Attn: Daniel M. Katz
           1015 18th Street, N.W., Suite 801
           Washington, District of Columbia 20036
           Tel: 202-659-1799, Fax: 202-659-3145

        2. International Association of Machinist and Aerospace
           Workers, AFL-CIO
           c/0 Lowenstein Sandler, P.C.
           Attn: Sharon L. Levine
           65 Livingston Avenue
           Roseland, New Jersey
           Tel: 973-597-2374, Fax: 973-597-2375

        3. Association of Flight Attendants - CWA
           Attn: Peggy H. Gordon
           3375 Koapaka Street, D-131
           Honolulu, Hawaii 96819
           Tel: 808-792-7137, Fax: 808-792-7138

        4. SITA
           Attn: George Parker
           3100 Cumberland Boulevard, Suite 200
           Atlanta, Georgia 30339
           Tel: 770-612-4869, Fax: 770-303-3448

        5. Milici Valenti Ng Pack, Inc.
           Attn: Nick Ng Pack
           999 Bishop Street, 24th Floor
           Honolulu, Hawaii 96813
           Tel: 808-536-0881, Fax: 808-529-6208

        6. Pratt & Whitney
           Attn: F. Scott Wilson
           400 Main Street, M/S 133-54
           East Hartford, Connecticut 06108
           Tel: 860-565-7364, Fax: 860-557-9946

        7. HMSA
           Attn: Edward S. Van Lier Ribbink
           P.O. Box 860
           Honolulu, Hawaii 96808-0860
           Tel: 808-948-6275, Fax: 808-948-5999

        8. Pension Benefi Guaranty Corp.
           Attn: Craig Yamaoka
           1200 K Street, N.W.
           Washington, District of Columbia 20005
           Tel: 202-326-4070, Fax: 202-842-2643

        9. Gate Gourmet
           c/o Arnold & Porter LLp
           Attn: Robert Barret
           370 Seventeenth Street, Suite 4500
           Denver, Colorado 80202-1370
           Tel: 303-863-2319, Fax: 303-832-0428

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 Honolulu, Hawaii, Aloha Airgroup, Inc. --
http://www.alohaairlines.com/-- provides air carrier service
connecting the five major airports in the State of Hawaii.  Aloha
Airgroup and its subsidiary Aloha Airlines, Inc., filed for
chapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case No.
04-03063).  Alika L. Piper, Esq., Don Jeffrey Gelber, Esq., and
Simon Klevansky, Esq., at Gelber Gelber Ingersoll & Klevansky
represent the Debtors in their restructuring efforts. When the
Debtor filed for protection from its creditors it listed more than
$50 million in estimated assets and debts.


ALOHA AIRGROUP: Intends to Subpoena E-Mail Records from ISPs
------------------------------------------------------------
Aloha Airgroup, Inc., and Aloha Airlines, Inc., ask the U.S.
Bankruptcy Court for the District of Hawaii to issue an order
directing three Internet service providers -- Road Runner HoldCo.,
LLC, Hawaii.Com and Load.Com -- to produce certain documents
relevant to the Debtors' bankruptcy proceedings.

The Debtors want to obtain records relating to certain e-mail
messages and the identity of the senders pursuant to Federal Rule
2004.

The Debtors relate that on Dec. 24, 2004, e-mail messages
containing false information were sent to people with which the
Debtors have business relationships.  The Debtors deny having
anything to do with those e-mail communications.

Aloha's negotiations and relations with various groups have
significantly been disrupted by those e-mail messages.  The
Debtors found that the e-mail communications were sent from
Hawaii.com's web mail and one or more subscribers of Road Runner.
Load.com is the e-mail service provider for Hawaii.com.

Headquartered in Honolulu, Hawaii, Aloha Airgroup, Inc. --
http://www.alohaairlines.com/-- provides air carrier service
connecting the five major airports in the State of Hawaii. Aloha
Airgroup and its subsidiary Aloha Airlines, Inc., filed for
chapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case No.
04-03063). Alika L. Piper, Esq., Don Jeffrey Gelber, Esq., and
Simon Klevansky, Esq., at Gelber Gelber Ingersoll & Klevansky
represent the Debtors in their restructuring efforts. When the
Debtor filed for protection from its creditors it listed more than
$50 million in estimated assets and debts.


AMERICAN MEDIA: Third Quarter Net Income Narrows to $281,000
------------------------------------------------------------
American Media, Inc. (AMI), the nation's largest publisher of
celebrity, health and fitness, and Spanish language magazines,
reported results for the third fiscal quarter ended Dec. 27, 2004.

                    Financial Highlights

   -- Revenues for the third fiscal quarter increased 9.3% to
      $129.4 million, compared to $118.3 million for the prior
      year fiscal third quarter.

   -- The Company's EBITDA increased 1.9% to $32.0 million from
      $31.4 million for the prior year fiscal quarter.

David J. Pecker, American Media's Chairman, President and CEO
commented, "We continue to focus very heavily on the investments
that we have made to re-launch Star as a glossy magazine.  We are
beginning to see these investments pay dividends with the Star's
single copy sales up 6% with a $3.29 cover price through December
versus the March 2004 quarter when we transitioned it from a 84
page tabloid with a $2.99 cover price.  Advertising revenue for
Star is up 50.8% versus the prior year.  In addition, Star has
increased its subscriptions by 52% since its launch as a glossy
magazine bringing total circulation to approximately 1.3 million,
an increase of 14.5%.

"The results for the Weider acquisition continue to perform better
than we originally expected," Mr. Pecker added.  "We continue to
improve these titles, most recently with the redesign and re-
launch of Men's Fitness.  Average advertising pages for Men's
Fitness are up 25% from the prior year with many new advertisers
and the most recent issues are selling 17% higher on the newsstand
than the prior year issues.  Additionally, Shape has continued to
out-perform expectations, and has also taken market share from all
of its competitors.  Shape is now the market share leader in its
category with a 19.2% lead in advertising pages over its nearest
competitor.  As a result of this performance, Shape was named to
the Ad Age Top Ten List in 2004.  Shape's newsstand sales continue
to improve and registered a 4.1% gain over the prior year."

Commenting on the remaining outlook for the 2005 fiscal year,
American Media's Chief Financial Officer, Tom Severson, added, "We
are currently expecting our full fiscal year 2005 EBITDA to
finalize in the $147 million to $153 million range.  This is slig
htly less than our previous guidance of $155 million due to an
increase in production costs and slightly lower than anticipated
advertising revenue projected for certain magazines in the fourth
fiscal quarter of 2005.  We still expect double digit advertising
revenue growth in the fourth fiscal quarter compared to the prior
year.  In addition, we will be changing our year end to a calendar
or Mar. 31, 2005 year end from a publishing calendar or March 28,
2005 year end.  This will result in three additional days of
operational expenses in the quarter.  We will be reporting on
traditional calendar quarters on a going forward basis."

Revenues for the fiscal quarter ended Dec. 27, 2004 increased 9.3%
to $129.4 million compared to $118.3 million for the prior year
fiscal quarter.  Advertising revenues increased 29.2% to $37.7
million for the quarter and circulation revenues increased 3.2% to
$84.2 million for the quarter.  These revenue increases were
primarily related to Star's success as a glossy magazine and the
continuing strength of Shape.  These increases were partially
offset by a 7.2% decline in newsstand units for AMI's weekly
publications when compared to the prior year quarter. Revenues for
the three fiscal quarters ended Dec. 27, 2004 increased 7.9% to
$399.4 million compared to $370.2 million for the prior year
period.  When compared to the prior year period, advertising
revenues increased 16.9% to $123.1 million for the three fiscal
quarters and circulation revenues increased 4.9% to $253.3 million
for the three fiscal quarters.  These revenue increases were
primarily related to the success of Star magazine and the
continuing strength of Shape.  These increases were partially
offset by an 8.4% decline in newsstand units for AMI's weekly
publications when compared to the prior year's three fiscal
quarters.

Total operating expenses for the December 2004 fiscal quarter
increased 11.8% to $108.5 million from $97.0 million compared to
the prior year fiscal quarter.  Total operating expenses for the
three fiscal quarters ended Dec. 27, 2004 increased 13.1% to
$331.4 million from $292.9 million compared to the prior year
three fiscal quarters.  These increases in operating expenses for
the fiscal quarter and for the three fiscal quarters ended
December 27, 2004 were primarily due to an increase in operating
expenses related to the new cost structure of the Star as a glossy
magazine and an increase in advertising sales expense relating to
our increases in advertising revenues.

The Company's EBITDA for the December 2004 fiscal quarter
increased 1.9% to $32.0 million from $31.4 million compared to the
prior year fiscal quarter.  The Company's EBITDA for the three
fiscal quarters ended December 2004 decreased to $101.2 million
from $107.6 million compared to the prior year three fiscal
quarters.  This decrease was primarily due to an increase in
production expenses, the new cost structure of the Star as a
glossy magazine and legal charges incurred during the three fiscal
quarters ended Dec. 27, 2004.

Net loss was $281,000 for the December 2004 fiscal quarter
compared to net income of $692,000 in the prior year fiscal
quarter primarily due to increased interest expense and
depreciation.  Net income was $3.1 million for the three fiscal
quarters ended December 27, 2004 compared to net income of $12.0
million for the prior year period.  This decrease in net income
for the period resulted from the circumstances mentioned above
combined with an increase in interest expense of $4.4 million and
an increase in depreciation expense of $2.7 million.

Headquartered in Boca Raton, Florida, American Media Operations is
a leading publisher of consumer magazines.  The company recorded
sales of $517 million for the fiscal year ending March 2004.

                          *     *     *

As reported in the Troubled Company Reporter on Dec. 2, 2004,
Moody's Investors Service has downgraded American Media
Operations, Inc.'s senior implied rating to B1 from Ba3.  Full
details of the rating action are:

Ratings confirmed:

      * $60 million senior secured revolving credit facility, due
          2006 -- Ba3

      * $3 million senior secured term loan tranche A, due 2006 --
          Ba3

      * $304 million (remaining amount) senior secured term loan
          tranche C, due 2007 -- Ba3

      * $133 million senior secured term loan tranche C-1, due
        2007
        -- Ba3

Ratings downgraded:

      * $150 million 8.875% senior subordinated notes, due 2011 --
        B3 from B2

      * $400 million 10.25% senior subordinated notes, due 2009 --
        B3  from B2

      * Senior Implied rating -- B1 from Ba3

      * Issuer rating -- B2 from B1

The rating outlook is stable.


ANC RENTAL: Liquidating Plan Declared Effective on Feb. 3
---------------------------------------------------------
Joseph Grey, Esq., at Stevens & Lee, PC, advises the U.S.
Bankruptcy Court for the District of Delaware that as of Feb. 3,
2005, all conditions precedent for the Effective Date of the
Amended Joint Chapter 11 Liquidating Plan of ANC Rental and its
debtor-affiliates and Statutory Creditors' Committee had been
satisfied.  Accordingly, the Plan became effective Feb. 3, 2005.

Headquartered in Fort Lauderdale, Florida, ANC Rental Corporation,
is the world's third-largest publicly traded car rental company.
The Company filed for chapter 11 protection on November 13, 2001
(Bankr. Del. Case No. 01-11200). On April 15, 2004, Judge Walrath
confirmed the Debtors' 3rd amended Chapter 11 Liquidation Plan, in
accordance with Section 1129(a) and (b) of the Bankruptcy Code.
Upon confirmation, Blank Rome, LLP, and Fried, Frank, Harris,
Shriver & Jacobson, LLP, withdrew as the Debtors' counsel. Gazes
& Associates, LLP, and Stevens & Lee, PC, serve as substitute
counsel to represent the debtors' post-confirmation interests.
When the Company filed for protection from their creditors, they
listed $6,497,541,000 in assets and $5,953,612,000 in liabilities.
(ANC Rental Bankruptcy News, Issue No. 65; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


ANECO ELECTRICAL: Files Schedules of Assets & Liabilities
---------------------------------------------------------
Aneco Electrical Construction, Inc., filed with the U.S.
Bankruptcy Court for the Middle District of Florida, Tampa
Division, its schedule of assets and liabilities, disclosing:

   Name of Schedule            Assets            Liabilities
   ----------------            ------            -----------
A. Real Property
B. Personal Property      $27,929,688
C. Property Claimed
   As Exempt
D. Creditors Holding
   Secured Claims                             $15,753,674.53
E. Creditors Holding
   Unsecured Priority
   Claims                                             408.59
F. Creditors Holding
   Unsecured Nonpriority
   Claims                                      10,056,728.93
                          -----------         --------------
   Total:                 $27,929,688         $25,810,812.05

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


ATA AIRLINES: Balks at NatTel's Motion to Appoint Examiner
----------------------------------------------------------
As previously reported, NatTel, LLC, asked the United States
Bankruptcy Court for the Southern District of Indiana to appoint
an examiner to investigate and analyze the financial and other
dealings between Debtor Chicago Express Airlines, Inc., on the one
hand, and ATA Holdings Corp., ATA Airlines, Inc. and the other
Debtors, on the other hand.

Aaron L. Hammer, Esq., at Freeborn & Peters, LLP, in Chicago,
Illinois, contends the Non-Chicago Express Debtors have engaged in
a pattern of activities and ATA Holdings has forced Chicago
Express to engage in various transactions that have likely caused
Chicago Express to suffer substantial harm to its business and
financial affairs for the exclusive benefit of the Non-Chicago
Express Debtors.

                             Objections

(A) Official Committee of Unsecured Creditors

"The legislative history of section 1104 of the Bankruptcy Code
clearly evinces Congress' intent to provide for the appointment of
an examiner in a bankruptcy case when it is in the estate's
interests or in order to protect holders of public debt in large
estates," John W. Ames, Esq., at Greenbaum, Doll & McDonald,
PLLC, in Louisville, Kentucky, reminds the Court.  "The purpose of
the statute is not to provide a disgruntled bidder in a bankruptcy
auction process with a vehicle to derail a debtor's chapter 11
case, to the severe detriment of the debtor's estate and its
unsecured creditors, for its own gain."

Mr. Ames tells Judge Lorch that NatTel is attempting to derail the
Debtors' restructuring efforts.  On learning that it was not the
winning bidder for the purchase of the stock of Chicago Express
Airlines, Inc., NatTel purchased two small trade claims to gain
standing to object to the Debtors' transaction with Southwest
Airlines Co.

Upon failure of that attempt, NatTel now seeks a broad-based
investigation of each of the Debtors' financial transactions and
other dealings with and involving Chicago Express.  It, however,
fails to satisfy the statutory requisites or congressional intent
for appointment of an examiner under Section 1104.

Mr. Ames asserts that NatTel's unsupported accusations of
mismanagement do not provide a basis upon which to appoint an
examiner.  NatTel maintains that the Debtors have "abused" and are
"exploiting" Chicago Express.  It has failed to substantiate that
charge.

NatTel relies primarily on the existence of a Chicago Express
guarantee securing third party loans to the Debtors, and
incorrectly asserts that Chicago Express has not received a
benefit from that contractual guarantee.  Mr. Ames contends
Chicago Express received both direct and indirect benefits from
its guarantee of two loans of ATA Holdings, Inc., its parent
company:

   -- The mechanics of the Debtors' integrated, prepetition cash
      management procedures, which have been continued
      postpetition, has permitted Chicago Express to receive
      proceeds of those loans from the general operating accounts
      of the parent corporation; and

   -- The loans enabled the affiliates of Chicago Express to
      continue their operations in the face of difficult
      financial conditions, strengthening the "ATA" corporate
      group as a whole.

Furthermore, the appointment of an examiner is unnecessary,
expensive and would cause undue delay in the resolution of the
Debtors' cases for these reasons:

   -- Under the Debtors' current DIP Facility and the Cash
      Collateral Order, the appointment of an examiner with
      expanded powers will trigger an event of default.  The
      appointment of an examiner will place the Debtors and their
      creditors in peril of losing continued use and access to
      cash, jeopardizing the Debtors' continued operations;

   -- The Debtors' unsecured creditors, who are already facing
      less than full recoveries, would directly bear the impact
      of all of the expenses attributable to the appointment of
      an examiner; and

   -- Courts have concluded that the appointment of an examiner
      would be duplicative when a committee exists pursuant to
      Section 1103 of the Bankruptcy Code, replete with
      investigative authority under Section 1103(c).

Mr. Ames tells the Court that the nature and scope of the
investigation and due diligence proposed by NatTel falls squarely
within the responsibility of the Official Committee of Unsecured
Creditors.  The Creditors Committee, through its legal and
financial advisors, is fully capable of investigating the
relationships and financial affairs among Chicago Express and the
Debtors to the extent it determines it is warranted.  There is no
need to introduce an examiner into the Debtors' cases at this
time.

Thus, the Creditors Committee asks the Court to deny NatTel's
request.

In the alternative, if the Court determines that the appointment
of an examiner is mandatory, the Creditors Committee asks the
Court to allow an examiner to conduct a limited investigation
according to appropriate limitations and proscriptions designed to
substantially reduce expense and interference with the
administration of the Debtors' Chapter 11 cases.

(B) Debtors

Terry E. Hall, Esq., at Baker & Daniels, in Indianapolis,
Indiana, tells Judge Lorch that the appointment of an examiner
would only:

   (a) materially interfere with the Debtors' efforts to
       reorganize;

   (b) burden the Debtors' estates with significant and wasteful
       expense; and

   (c) confer no benefit to the Debtors' estates or to their
       creditors.

"The Examiner Motion appears to be nothing more than an attempt to
cause Debtors to reconsider their determination, in concert with
the Official Committee of Unsecured Creditors and other creditors,
that the offer made by NatTel to acquire ownership of CE for
$38,000 was and is of no interest to the Debtors because the offer
is so far below the market value of CE that the offer does not
merit further consideration," Ms. Hall points out.

Ms. Hall maintains that no grounds exist for the appointment of an
examiner at this time:

   (a) NatTel is not a "party in interest" that Section 1104 of
       the Bankruptcy Code seeks to protect.  NatTel is not the
       holder of Chicago Express' publicly traded bonds, nor was
       it a creditor of Chicago Express at the Petition Date; and

   (b) The monetary threshold is not present to require an
       examiner.  Chicago Express's debt level, excluding
       insider, contingent, unliquidated, or secured debts, and
       debts for goods, services, or taxes, do not reach the
       $5,000,000 triggering threshold under Section 1104(c)(2).

Ms. Hall relates that the Debtors are engaged with the Creditors
Committee and the secured lenders in an intense process to
reorganize and restructure their businesses after the initial
closing of the Southwest Transaction.  To devote significant
resources to an examiner to assist in any investigation of
Chicago Express is simply not in the best interest of anyone.
The Debtors, representing the unsecured creditors, the secured
lenders, including the ATSB, and the U.S. Trustee are sufficient
watchdogs of the estates and the creditors' interests.

Should the Court grant NatTel's request, the Debtors want the
appointment to be very limited in scope and designed and funded so
as not to materially burden or interfere with the efforts of the
Debtors and the real parties-in-interest to restructure and
maximize the value of the Debtors' estates for the benefit of
creditors, employees, and customers.

(C) ATSB

The United States of America, on behalf of the Air Transportation
Stabilization Board, joins in the Debtors' objection to NatTel's
request.

Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA
Holdings Corp. -- http://www.ata.com/-- is the nation's 10th
largest passenger carrier (based on revenue passenger miles) and
one of the nation's largest low-fare carriers.  ATA has one of the
youngest, most fuel-efficient fleets among the major carriers,
featuring the new Boeing 737-800 and 757-300 aircraft.  The
airline operates significant scheduled service from
Chicago-Midway, Hawaii, Indianapolis, New York and San Francisco
to over 40 business and vacation destinations. Stock of parent
company, ATA Holdings Corp., is traded on the Nasdaq Stock
Exchange.  The Company and its debtor-affiliates filed for chapter
11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case No. 04-
19866, 04-19868 through 04-19874).  Terry E. Hall, Esq., at Baker
& Daniels, represents the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $745,159,000 in total assets and $940,521,000 in total
debts.  (ATA Airlines Bankruptcy News, Issue No. 14; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


BALLY TOTAL: Moody's Pares Ratings on Credit Facilities
-------------------------------------------------------
Moody's Investors Service downgraded the credit ratings of Bally
Total Fitness Holding Corporation and changed the outlook to
negative, concluding a review of the Company's ratings for
possible downgrade initiated on November 4, 2004.  The ratings
downgrade reflects Moody's expectation of continued poor operating
performance and weak free cash flow generation due to increasing
industry competition, continued high attrition rates and the
mounting cost of the continuing investigation into accounting
matters at the company.

The ratings also reflect the Company's limited financial
flexibility due to its highly leveraged capital structure, concern
that the Company's access to liquidity may be constrained,
material weaknesses in internal controls over financial reporting
and Moody's estimates of recovery values for the various classes
of debt in the event of default.

The ratings downgraded are:

   * $175 million Senior Secured Term Loan B Facility, due 2009,
     downgraded to B3 from B2;

   * $100 million Senior Secured Revolving Credit Facility, due
     2008, downgraded to B3 from B2;

   * $235 million 10.5% Senior Unsecured Notes (guaranteed), due
     2011, downgraded to Caa1 from B3;

   * $300 million 9.875% Senior Subordinated Notes, due 2007,
     downgraded to Ca from Caa2;

   * Senior Implied, downgraded to Caa1 from B3;

   * Senior Unsecured Issuer Rating, downgraded to Caa2 from Caa1;

The ratings outlook is negative.

Moody's believes that it will be difficult for Bally Total to grow
its revenue base, increase profitability and generate positive
free cash flows in an increasingly competitive environment.
Although Bally Total reported a 2% increase in its membership base
for the nine months ended September 30, 2004, free cash flow for
the same period was negative $2.7 million.  While Bally is capital
constrained, its competitors are continuing to expand.  It is
unclear whether marketing dollars spent by Bally to attract new
members will be able to offset the significant rate of member
attrition.

In addition, Bally Total's results will continue to be pressured
by general increases in operating costs as well as the cost of the
continuing investigation into accounting matters and audit
restatements.  For these reasons, Moody's is concerned that Bally
may be unable to comply with financial covenants in its credit
agreement over the next few quarters, which, absent a waiver,
would prevent the company from borrowing under its $100 million
revolving credit facility.

In December 2004, Bally Total received a limited waiver, which may
be extended until July 31, 2005, from the holders of a majority of
its unsecured and subordinated notes of any default arising from
Bally's failure to file with the Securities and Exchange
Commission ("SEC") and furnish to the holders of the notes and
trustee required financial reports.

Lenders under the Company's senior secured credit facility have
foregone any requirement for receipt from Bally of any financial
statements filed with the SEC.  However, the credit agreement
provides for a cross-default in the event of delivery of a default
notice under either the senior unsecured or senior subordinated
indentures.

Bally Total announced that it intends to restate its financial
statements for the years ended December 31, 2000 through December
31, 2003 and the first quarter of 2004 due to a number of
accounting errors.  Bally has engaged KPMG LLP, its new auditor,
to re-audit the company's financial statements for the years ended
December 31, 2002 and 2003, which were previously audited by Ernst
& Young LLP.  Bally expects to complete the restatements by July
2005.  As part of the restatement, previously reported installment
receivables and related deferred revenues will no longer be
reported on the balance sheet.

Bally Total's audit committee recently completed its investigation
into various accounting issues at the Company.  The audit
committee concluded that there were multiple accounting errors in
the financial statements and that certain former executives were
responsible for those errors and creating a culture within the
accounting and finance groups at Bally that encouraged aggressive
accounting.  Two financial executives of Bally were also
terminated for improper conduct.

Bally identified numerous deficiencies in its internal controls
over financial reporting which deficiencies, either individually
or in the aggregate, constitute material weaknesses in its
internal controls over financial reporting.

Bally Total also recently announced that it is working with a
financial advisor to develop a long-term financial strategy to
improve the Company's capital structure and maximize free cash
flows.  Among the strategies being considered is the possible
divestiture of non-core assets.

The negative ratings outlook reflects Moody's expectation of
minimal revenue growth and break-even free cash flow over the next
12 months.  As a result, Moody's believes that Bally may be unable
to comply with the financial covenants in its credit facility
during the next few quarters.  If Bally Total improves its
operating performance by generating sustainable annualized free
cash flows of over $20 million over the next few fiscal quarters,
Moody's would consider revising the outlook to stable or positive.

Asset divestitures that materially improve leverage and liquidity
would also likely benefit the rating.  A relaxation of bank
covenants that provides the company with significant covenant
cushion would also be positive for the ratings or outlook.

The continued generation of negative free cash flow would likely
further pressure the rating.  The ratings or outlook will also be
sensitive to the results of the continuing SEC investigation, the
ability of Bally to correct its material deficiencies in internal
controls over financial reporting and the ability of the company
to complete and file its restated financial statements with the
SEC.

The B3 rating on the senior secured credit facility reflects the
benefits of a pledge of substantially all the assets of the
company and its subsidiaries.  The credit facility has been
notched above the senior implied rating reflecting expected full
recovery in the event of default due to the expected enterprise
value of the company and the value of secured assets including
installment receivables and property and equipment.

The Caa1 rating on the senior notes reflects the senior unsecured
nature of these obligations and the guarantee by substantially all
of the subsidiaries of the Company.  The senior notes have been
notched at the senior implied rating reflecting relatively high
expected recovery rates in the event of default.

The Ca rating on the senior subordinated notes reflects
contractual subordination and expected low recovery rates in the
event of default.

Headquartered in Chicago, Illinois, Bally Total Fitness Holding
Corporation is the largest commercial operator of fitness centers
in North America.


BEAR CREEK: S&P Rates Proposed $245 Million Unsecured Notes
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to specialty food gifts and horticultural products
direct marketer Bear Creek Corp.  The outlook is stable.

At the same time, Standard & Poor's assigned its 'B-' rating to
the company's proposed $245 million of unsecured notes to be
issued under Rule 144A with registration rights.  The proposed
debt issue will comprise a combination of fixed- and floating-rate
note issues, with maturities projected between 2012 and 2013.

The notes are rated one notch lower than the corporate credit
rating due to the significant amount of priority debt in the
capital structure.  Proceeds will be used to refinance an existing
$155 million second-lien loan and a $14 million holding company
loan, as well as to pay an $83 million dividend to shareholders.
Pro forma for the transaction, Bear Creek will have $245 million
of debt outstanding.  Concurrent with the transaction, the company
plans to amend and restate its first-lien revolving credit
facility and reduce the size of the credit facility to
$125 million from $150 million.  Bear Creek was acquired in June
2004 from Yamanouchi Consumers, Inc., for $242 million, by equity
funds controlled by Wasserstein & Co. L.P. (65% ownership) and
Highfields Capital Management L.P. (35% ownership).

"The ratings on Bear Creek reflect an aggressive financial policy,
a highly leveraged capital structure, the company's participation
in the intensely competitive and fragmented specialty food gifts
direct marketing and retailing businesses, and the very high
seasonality of its operations," said Standard & Poor's credit
analyst Ana Lai.  As a direct marketer of specialty food gifts and
horticultural products, Bear Creek faces intense competition from
other direct marketers, such as 1800flowers.com and FTD.com, Omaha
Steaks, and Williams-Sonoma, Inc., specialty stores, and other
retail channels with similar product offerings.  However, the
company benefits from the recognized Harry & David brand, and it
has a long track record of operations.


BEAR STEARNS: Fitch Puts BB Rating on $2.277 Million Private Class
------------------------------------------------------------------
Bear Stearns Asset Backed Securities (BSABS) Trust 2005-SD1,
asset-backed certificates, series 2005-SD1 are rated by Fitch
Ratings:

   Group 1 certificates:

       -- $204,922,000 classes I-A-1, I-A-2, I-A-3 'AAA';
       -- $7,627,000 class I-M-1 'AA';
       -- $3,757,000 class I-M-2 'A';
       -- $2,277,000 class I-M-3 'A-';
       -- $2,277,000 class I-M-4 'BBB+';
       -- $2,277,000 class I-M-5 'BBB';
       -- $2,277,000 class I-M-6 'BBB-';
       -- $2,277,000 privately offered class I-B 'BB'.

   Group 2 certificates:

       -- $94,207,000 class II-A 'AAA';
       -- $5,927,200 class II-M-1 'AA';
       -- $3,875,500 class II-M-2 'A';
       -- $3,248,600 class II-M-3 'BBB';
       -- $2,621,718 class II-B 'BBB-'.

The 'AAA' rating on the group 1 certificates reflects the 11.65%
initial credit enhancement provided by:

       * 3.35% class I-M-1,
       * 1.65% class I-M-2,
       * 1.00% class I-M-3,
       * 1.00% class I-M-4,
       * 1.00% class I-M-5,
       * 1.00% class I-M-6, and
       * 1.00% class I-B, along with
       * target overcollateralization - OC -- of 1.65%.

The 'AAA' rating on the group 2 certificates reflects the 18.30%
initial credit enhancement provided by:

       * 5.20% class II-M-1,
       * 3.40% class II-M-2,
       * 2.85% class II-M-3, and
       * 2.30% class II-B, along with OC.

The initial OC for the group 2 certificates is 3.55% with a target
OC of 4.55%.  In addition, the ratings on the certificates reflect
the quality of the underlying collateral and Fitch's level of
confidence in the integrity of the legal and financial structure
of the transaction.

The group 1 mortgage pool consists of fixed-rate mortgage loans
secured by first liens on one- to four-family residential
properties, with an aggregate principal balance of $ 227,691,541.
As of the cut-off date, Jan. 1, 2005, the mortgage loans had a
weighted average loan-to-value ratio - LTV -- of 76.98%, weighted
average coupon - WAC -- of 6.422%, and an average principal
balance of $151,089.  Single-family properties account for 75.99%
of the mortgage pool, two- to four-family properties 9.50%, and
condos 4.69%.  Approximately 86.50% of the properties are owner-
occupied.

The three largest state concentrations are:

       * California (12.30%),
       * Florida (7.90%), and
       * New York (7.31%).

The group 2 mortgage pool consists of adjustable-rate mortgage
loans secured by first liens on one- to four-family residential
properties, with an aggregate principal balance of $113,983,732.
As of the cut-off date, Jan. 1, 2005, the mortgage loans had a
weighted average loan-to-value ratio of 78.26%, weighted average
coupon of 5.663%, and an average principal balance of $185,944.
Single-family properties account for 72.00% of the mortgage pool,
two- to four-family properties 4.32%, and condos 5.99%.
Approximately 90.25% of the properties are owner-occupied.

The three largest state concentrations are:

       * California (18.56%),
       * New Jersey (13.00%), and
       * Virginia (6.79%).

None of the mortgage loans are 'high cost' loans as defined under
any local, state, or federal laws.  For additional information on
Fitch's rating criteria regarding predatory lending legislation,
see the press release 'Fitch Revises Rating Criteria in Wake of
Predatory Lending Legislation,' dated May 1, 2003, available on
the Fitch Ratings web site at http://www.fitchratings.com/

Bear Stearns Asset Backed Securities I LLC deposited the loans
into the trust, which issued the certificates, representing
beneficial ownership in the trust.  JPMorgan Chase Bank, N.A. will
act as trustee.  Wells Fargo Bank N.A., rated 'RMS1' by Fitch,
will act as master servicer for this transaction.


BEAR STEARNS: Moody's Junks Classes I & J Certificates
------------------------------------------------------
Moody's Investors Service upgraded the rating of three classes,
downgraded the ratings of four classes and affirmed the ratings of
four classes of Bear Stearns Commercial Mortgage Securities Inc.,
Commercial Mortgage Pass-Through Certificates, Series 1999-C1:

   * Class A-1, $42,935,503, Fixed, affirmed at Aaa
   * Class A-2, $280,821,086, Fixed, affirmed at Aaa
   * Class X, Notional, affirmed at Aaa
   * Class B, $23,900,199, Fixed, upgraded to Aaa from Aa2
   * Class C, $17,925,149, Fixed, upgraded to Aa2 from A2
   * Class D, $21,510,179, Fixed, upgraded to Baa1 from Baa2
   * Class E, $5,975,050, Fixed, affirmed at Baa3
   * Class G, $4,780,040, Fixed, downgraded to Ba3 from Ba2
   * Class H, $3,585,030, Fixed, downgraded to B2 from Ba3
   * Class I, $9,560,080, Fixed, downgraded to Caa2 from B2
   * Class J, $2,390,020, Fixed, downgraded to C from B3

As of the January 14, 2005 distribution date, the transaction's
aggregate principal balance has decreased by approximately 10.4%
to $428.3 million from $478.0 million at securitization.  The
Certificates are collateralized by 118 loans secured by commercial
and multifamily properties.

The loans range in size from less than 0.1% to 3.3% of the pool,
with the top ten loan groups representing 26.2% of the pool.  Nine
loans, representing 8.9% of the pool, have defeased and been
replaced with U.S. Government securities.  One loan has been
liquidated from the pool resulting in a realized loss of
approximately $2.8 million.

Three loans, representing 2.6% of the pool, are in special
servicing.  Moody's has estimated aggregate losses of
approximately $5.2 million for all of the specially serviced
loans.  Twenty-two loans, representing 13.9% of the pool, are on
the master servicer's watchlist.  The trust has realized interest
shortfalls due to appraisal reductions and special servicing fees.
As of the most recent distribution date, Classes K and J have
aggregate interest shortfalls of approximately $150,000.

Moody's was provided with year-end 2003 operating results for
95.2% of the performing loans and partial year 2004 operating
results for 68.5% of the performing loans.  Moody's weighted
average loan to value ratio is 69.7%, compared to 76.0% at
securitization.

The upgrade of Classes B, C and D is due to increased
subordination levels, improved overall pool performance and
defeased loans.  The downgrade of Classes G, H, I and J is due to
realized and expected losses from the specially serviced loans and
LTV dispersion.  Based on Moody's analysis, 6.1% of the pool has a
LTV greater than 100.0%, compared to 0.0% at securitization.

The top three loan groups represent 10.2% of the outstanding pool
balance.  The largest loan group is the Founders Plaza & Tower 14
Loan ($19.5 million - 4.6%), which is secured two cross-
collateralized loans secured by two office properties. Founders
Plaza ($14.0 million) is a 390,000 square foot office property
located in East Hartford, Connecticut.  The property, which was
built in 1972, has maintained 95.0% occupancy since
securitization.

The largest tenant is Bank of America (formerly Fleet Bank; 38.0%
NRA; lease expiration December 2006).  The property's performance
has improved since securitization due to increased rents and
stable expenses.  Tower 14 ($5.5 million) is a 251,700 square foot
Class C office building located in Southfield, Michigan.  The
property was built in 1973 and is 87.0% occupied, compared to
80.0% at securitization.  The largest tenant is Health Alliance
Plan (14.0% NRA; lease expirations January and March 2005).  The
property's performance has improved since securitization due to
increased occupancy.  Moody's loan to value ratio is 85.2%,
compared to 96.0% at securitization.

The second largest loan is the Clemens Place Apartments Loan
($14.1 million - 3.1%), which is secured by a 583-unit multifamily
property located in Hartford, Connecticut.  The property was built
between 1915 and 1971 and was renovated in the early 1980s.
Currently the property is 95.4% occupied, compared to 97.0% at
securitization.  The property's performance has improved since
securitization due to increased rental income.  Moody's loan to
value ratio is 74.4%, compared to 85.0% at securitization.

The third largest loan is the South Bay Marketplace Loan
($10.8 million - 2.5%), which is secured by a discount oriented
community shopping center located in National City in San Diego
County, California.  National City is located approximately
10 miles north of the Mexican border.

The property was built in 1997 and contains 133,000 square feet.
The property is 100.0% occupied, the same as at securitization.
Major tenants include Office Depot, Ross Dress for Less and Old
Navy.  The property's performance has improved due to increased
revenue. Moody's loan to value ratio is 84.0%, compared to 95.9%
at securitization.

The pool's collateral is a mix of:

            * multifamily (27.7%),
            * office and mixed use (24.6%),
            * retail (22.5%),
            * industrial and self storage (9.2%),
            * U.S. Government securities (8.9%) and
            * lodging (7.1%).

The collateral properties are located in 27 states.  The highest
state concentrations are:

            * California (27.5%),
            * New York (13.9%),
            * Connecticut (9.9%),
            * Pennsylvania (7.9%), and
            * New Jersey (6.9%).

All of the loans are fixed rate.


BELL CANADA: Receives 88.8% of Nexxlink Shares in Tender Offer
--------------------------------------------------------------
Bell Canada disclosed that an additional 282,605 common shares of
Nexxlink Technologies Inc. (TSX: NTI) had been tendered to the
take-over bid by its subsidiary, 4257049 Canada Inc., to acquire
all of the outstanding shares of Nexxlink for $6.05 per share.
Bell Canada has taken up and intends to pay for these shares on
Feb. 10, 2005.

At the close of business on Feb. 7, 2005, and taking into account
the shares taken up on Jan. 24, 2005, a total of 9,771,094 common
shares of Nexxlink, representing approximately 88.8% of the
aggregate number of common shares outstanding, had therefore been
tendered to the offer.

In order to allow shareholders who have not had the opportunity to
tender their shares and be paid the consideration under the offer
to do so, Bell Canada will grant an extension to Nexxlink
shareholders to tender their shares, by extending its offer to
5:00 p.m. (Eastern time) on Feb. 21, 2005.  Bell Canada intends to
acquire all outstanding common shares not tendered by that date
pursuant to rights of compulsory acquisition, if available, or
pursuant to a subsequent acquisition transaction.

If less than 90% of the aggregate number of Nexxlink common shares
outstanding are not tendered by 5:00 p.m. (Eastern time) on
Feb. 21, 2005, Bell Canada intends to proceed with a subsequent
acquisition transaction and hold a special meeting of the
shareholders of Nexxlink to that effect in March 2005.  Bell
Canada, through 4257049 Canada Inc., already holds a number of
common shares sufficient to enable all required corporate and
securities laws approvals to be obtained at such special meeting
of shareholders.  Bell Canada would therefore be in a position to
have the subsequent acquisition transaction approved.

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

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


BLOCKBUSTER INC: Exchange Offer Cues Moody's to Review Ratings
--------------------------------------------------------------
Moody's Investors Service placed the long-term debt ratings of
Blockbuster Inc., on review for possible downgrade and downgraded
the speculative grade liquidity rating to SGL-2 following the
commencement of a hostile exchange offer for all outstanding
shares of Hollywood Entertainment Corporation.

The review for downgrade in relation to Blockbuster's long-term
ratings is based on:

   1) the likelihood that the exchange offer, if successful, would
      result in significantly higher leverage and weaker credit
      metrics, as well as,

   2) the risk that the recent elimination of late fees could
      constrict earnings and cash flow.

The downgrade of the speculative grade liquidity rating from SGL-1
(very good liquidity) to SGL-2 (good liquidity) reflects Moody's
expectation that the elimination of the no late fee policy will
reduce liquidity in the near term, as well as reducing the amount
of cushion that currently exists in the financial covenants in
Blockbuster's credit agreement.

Currently, Movie Gallery has a definitive agreement to acquire
Hollywood Entertainment for $13.25 per share cash plus the
assumption of debt for a transaction value of $1.2 billion.
Blockbuster has offered to exchange all of the outstanding shares
of Hollywood Entertainment for $14.50 per share, comprised of
$11.50 per share cash and $3.00 per share in Blockbuster Class A
common stock for a transaction value of $1.3 billion.

Blockbuster Inc. has received commitments for $1 billion in bank
and bond debt to finance the proposed transaction.  The offer is
subject to various conditions including; a majority of the shares
being validly tendered and the termination of the merger agreement
with Movie Gallery.  It is therefore unclear whether Blockbuster's
exchange offer will be successful and whether other bids could
surface.

The review for possible downgrade will focus on the financial
profile of Blockbuster post acquisition should its hostile bid be
successful.  Whether or not the bid is successful, the review will
evaluate the impact of the elimination of late fees on Blockbuster
Inc.'s earnings and cash flow, as well as management's financial
policies going forward, including its risk appetite for
acquisitions.

The SGL-2 speculative grade liquidity rating reflects Moody's
expectation that the company will maintain good liquidity.
Internally generated cash flow and cash on hand will be sufficient
to fund its working capital, capital expenditures, term loan
amortization, and dividend requirements over the next four
quarters.  In addition, the Company will have sufficient liquidity
to meet the 50% excess cash flow requirement beginning in the
first quarter of 2006.

Cash on hand at September 30, 2004 was $190.0 million.  However,
Blockbuster's cushion for complying with the financial agreements
in its bank credit facilities is likely to be reduced, in Moody's
view, by the elimination of late fees which could constrict
earnings and cash flow.  In addition, given Blockbuster's limited
tangible assets, the company has limited sources of alternative
liquidity other than the sale of the entire company, its
international business, or its extensive customer database.

The ratings placed on review for possible downgrade are:

   * Senior Implied of Ba2;

   * Long Term Issuer Rating of Ba3;

   * Senior Secured Bank Credit Facilities of Ba2;

   * Senior Subordinated Notes of B1.

The rating downgraded is:

Speculative Grade Liquidity Rating to SGL-2 from SGL-1.

Blockbuster Inc., headquartered in Dallas, Texas, is a leading
global provider of in-home movie and game entertainment with
nearly 9,000 stores throughout the Americas, Europe, Asia, and
Australia.  Total revenues for fiscal year 2003 were approximately
$5.9 billion.


CADMUS COMMS: Declares $0.0625 Per Share Quarterly Cash Dividend
----------------------------------------------------------------
Cadmus Communications Corporation's (Nasdaq: CDMS) Board of
Directors approved a regular quarterly cash dividend of $0.0625
per share payable on March 8, 2005 to stockholders of record on
Feb. 22, 2005.  The Company increased its regular quarterly cash
dividend from $0.05 per share to $0.0625 per share effective with
the dividend paid on Sept. 14, 2004.  Cadmus Communications has
approximately nine million shares of common stock outstanding.

                        About the Company

Cadmus Communications Corporation -- http://www.cadmus.com/--  
provides end-to-end, integrated graphic communications services to
professional publishers, not-for-profit societies and
corporations.  Cadmus is the world's largest provider of content
management and production services to scientific, technical and
medical journal publishers, the fifth largest periodicals printer
in North America, and a leading provider of specialty packaging
and promotional printing services.

                          *     *     *

Moody's Rating Services and Standard & Poor's assigned its
single-B ratings to Cadmus Communications' 8-3/8% senior
subordinated notes due 2014 last year.


CAMCO INC: Equity Deficit Widens to $22,879,000 at Dec. 31
----------------------------------------------------------
Primarily as a result of the closure costs relating to the
Hamilton manufacturing and distribution facility, Camco Inc.,
(TSX:COC) reported a net loss of $4.2 million or $0.21 per share
for the fourth quarter ending December 31, 2004.  This compares to
a net loss of $53.4 million or $2.67 per share for the same period
last year, which was primarily driven by significant provisions
for Hamilton plant closure costs.  Total sales for the fourth
quarter of 2004 amounted to $185 million, up 13.5% from sales of
$163 million for the fourth quarter of 2003.  Camco reported
income from operations, before closure costs, of $0.3 million in
the fourth quarter of 2004 versus $1.7 million for the same period
last year.  Excluding plant closure costs, lower income from
operations in the fourth quarter of 2004 was primarily the result
of increased raw material commodity prices.  Recent increases in
commodity prices, especially steel have had an adverse impact on
manufacturing costs in 2004 and as a result the Company has
announced price increases to the domestic market effective
January 1, 2005.  Closure costs of $5.0 million ($3.5 million net
of taxes) were recorded in the fourth quarter of 2004.

In 2004, the Company recorded a net loss of $10.7 million on sales
of $643 million, compared to a net loss of $52.5 million on sales
of $595 million.  Income from operations, before closure costs
rose to $9.9 million, compared to $5.3 million in 2003. The
principal drivers of improved year-over-year operational
performance were:

   (1) strong domestic and export sales,

   (2) base cost productivity improvements resulting in lower
       operating costs, and

   (3) increased production at the Company's manufacturing
       facility in Montreal.

James Fleck, President and CEO commented: "Camco experienced
profound changes in 2004, including significant new product
introductions, a major expansion of dryer manufacturing capacity
in Montreal, new facilities in Burlington and Brantford, and the
shutdown of the Hamilton facility.  We have always said that
Camco's real competitive advantage is the quality of our people.
This unique strength was demonstrated in many different ways in
2004, be it our sales success in Canada, our ability to meet GE's
dryer requirements, or the high integrity shown by our Hamilton
employees.  With the major restructuring costs behind us, we look
forward to success in 2005 and beyond."

                Liquidity and Capital Resources

On May 30, 2003, the Company renewed its securitization facility
under which it sells up to $60.0 million eligible trade
receivables on a revolving basis.  This program, which originally
began in 1995, has been extended through to September 27, 2005.
The Company also renewed a $40.0 million line of credit facility
on July 10, 2004. The line of credit agreement extends to July 9,
2005.

To assist with closure related expenses, the Company has arranged
an additional credit facility of up to $10.0 million with its
banker available from April 1, 2004 - September 30, 2004 and up to
$20.0 million from January 1, 2005 - September 30, 2005.  To date,
the Company has not needed to draw upon these funds.  During the
year, the Company met all of its cash and banking requirements.

As of Dec. 31, 2004, Camco's stockholders' deficit widened to
$22,879,000 from a $12,136,000 deficit at Dec. 31, 2003.

Camco, Inc. -- http://www.geappliances.ca/-- is the largest
Canadian manufacturer, marketer and service provider of home
appliances, with manufacturing operations in Montreal, Quebec.
The Company's product line includes such popular names as GE,
Hotpoint, Moffat, Monogram, BeefEater and Samsung.  Camco also
produces and services private brands for major Canadian department
stores.


CATHOLIC CHURCH: Court Allows Portland to Keep Union Bank Accounts
------------------------------------------------------------------
The United States Trustee contends that Archdiocese of Portland in
Oregon is required to obtain an order excusing compliance with
Section 345 of the Bankruptcy Code with respect to the continued
administration of the Archdiocese's investment accounts located at
Union Bank of California.

The Archdiocese disagrees.  Thomas W. Stilley, Esq., at Sussman
Shank LLP, in Portland, Oregon, contends that the provisions of
Section 345 pertain only to "investment of the money of the estate
for which such trustee serves. . . ."  Thus, where Portland is
only the trustee or custodian of the investments, Section 345
would not be applicable, Mr. Stilley asserts.

The estimated current value of the investments in the Union Bank
Investment Accounts is $99 million.  Mr. Stilley explains that the
investments in the Union Bank Investment Accounts are managed
pursuant to a comprehensive Statement of Investment Policy and
Guidelines.  To assist in carrying out the investment policy,
Portland retained Bonnie Haslett, Director of The Consulting
Group, a division of Citigroup's Smith Barney.  The Consulting
Group is responsible for the compilation of investment returns on
a quarterly basis by individual investment managers and the review
of the overall portfolio.  These returns are compared or measured
against an established investment benchmark based on the
investment manager's particular style.  In addition, The
Consulting Group is responsible for reviewing the adherence of
investment managers to the established investment policy.  The
Consulting Group also performs asset allocation studies for the
Investment Committee and helps coordinate the yearly reallocation
of the entire pool.

Union Bank of California is the investment custodian responsible
for the safekeeping of all equity and fixed income securities
purchased by the investment managers.

Mr. Stilley contends that investment of the $99 million in strict
compliance with the requirements of Section 345(b) is inconsistent
with the mandate of Section 345(a) to make the investment of money
"as will yield the maximum reasonable net return on such money,
taking into account the safety of such deposit or investment."  As
long as investments are maintained in accordance with current
practices, Mr. Stilley maintains that no corporate surety is
necessary or required to afford protection to creditors.

Mr. Stilley assures Judge Perris that the continued investment in
accordance with Portland's historical practices will provide the
protection required by Section 345 notwithstanding the absence of
a "corporate surety."  A bond secured by the undertaking of a
corporate surety would be unduly expensive, even if the bond were
available, and could offset much of the financial gain derived
from investing in private as well as federal or federally
guaranteed securities.  Therefore, cause exists to waive the
requirement of a bond or undertaking.

Mr. Stilley also notes that the continuation of the existing
Investment Accounts and compliance with preexisting investment
guidelines will allow the investments held in the accounts to be
maintained in accordance with the advice received from the
Archdiocese's professional managers and consistent with the
instructions received from the parishes and investment committees
that have the responsibility for directing the investments held in
the Investment Accounts.

At Portland's' request, Judge Perris authorizes the Archdiocese to
continue to administer its Union Bank Investment Accounts
consistent with prepetition practices.

The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.
Thomas W. Stilley, Esq. and William N. Stiles, Esq. of Sussman
Shank LLP represent the Portland Archdiocese in its restructuring
efforts.  Portland's Schedules of Assets and Liabilities filed
with the Court on July 30, 2004, the Portland Archdiocese reports
$19,251,558 in assets and $373,015,566 in liabilities. (Catholic
Church Bankruptcy News, Issue No. 16; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


CITIGROUP MORTGAGE: Fitch Rates $9.2 Mil. Class M10 Cert. at BB+
----------------------------------------------------------------
Citigroup Mortgage Loan Trust $836.2 million asset-backed pass-
through certificates, series 2005-OPT1 are rated by Fitch Ratings:

     -- $668.55 million classes A-1A through A-1C 'AAA';
     -- $30.52 million class M1 'AA+';
     -- $24.67 million class M2 'AA';
     -- $15.88 million class M3 'AA-';
     -- $13.79 million class M4 'A+';
     -- $13.38 million class M5 'A';
     -- $12.12 million class M6 'A-';
     -- $10.45 million class M7 'BBB+';
     -- $6.69 million class M8 'BBB';
     -- $8.36 million class M9 'BBB-';
     -- $9.20 million class M10 'BB+'.

The 'AAA' rating on the senior certificates reflects the 20.05%
total credit enhancement provided by:

     * the 3.65% class M1,
     * the 2.95% class M2,
     * the 1.90% class M3,
     * the 1.65% class M4,
     * the 1.60% class M5,
     * the 1.45% class M6,
     * the 1.25% class M7,
     * the 0.80% class M8,
     * the 1% privately offered class M9,
     * the 1.10% privately offered class M10 and
     * the initial overcollateralization - OC -- of 2.70%.

All certificates have the benefit of monthly excess cash flow to
absorb losses.  In addition, the ratings reflect the quality of
the loans, the integrity of the transaction's legal structure as
well as the capabilities of Option One Mortgage Corp. as servicer
and Deutsche Bank National Trust Company, as trustee.

The certificates are supported by one collateral group consisting
of both conforming and nonconforming loans.  The mortgage pool
consists of first lien adjustable-rate and fixed-rate, mortgage
loans that have a cut-off date pool balance of $836,207,600.96.
Approximately 16.89% of the mortgage loans are fixed-rate mortgage
loans and 83.11% are adjustable-rate mortgage loans.  The weighted
average current loan rate is approximately 6.914%.  The weighted
average remaining term to maturity - WAM -- is 355 months.  The
average principal balance of the loans equals $180,802.  The
weighted average original loan-to-value - OLTV -- ratio is 80.65%.
The properties are primarily located in:

          * California (26.33%),
          * New York (14.17%) and
          * Massachusetts (8.12%).

For federal income tax purposes, multiple real estate mortgage
investment conduit elections will be made with respect to the
trust estate.

Option One was incorporated in 1992, and began originating and
servicing subprime loans in February 1993.  Option One is a
subsidiary of Block Financial, which is in turn a subsidiary of H
& R Block, Inc.


COMPUTER ASSOCIATES: John Swainson Assumes CEO Post
---------------------------------------------------
Computer Associates International, Inc. (NYSE: CA) has named CA's
President and CEO-elect John Swainson as chief executive officer
of the Company.  He also will continue as president.

Mr. Swainson, 50, who joined Calif. in November 2004 after a 26-
year career at IBM, assumes the role from interim CEO Kenneth D.
Cron, 48, who has held the post since April 2004.  Mr. Cron will
continue as a director of the Company, a position he has held
since 2002.

"Ken and John have worked extremely well together over the past
two and a half months, and I couldn't be more pleased with their
performances," said CA Chairman Lewis S. Ranieri.

"John has quickly displayed an impressive knowledge of the Company
and its technologies, and his industry background is a tremendous
asset.  Our confidence in his leadership abilities and strategy to
move CA forward led the Board to name him CEO at this time."

Mr. Ranieri also had significant praise for Mr. Cron, who stepped
in as interim CEO more than nine months ago to help stabilize CA
during a challenging period.

"I can't thank Ken enough for successfully taking on the challenge
of leading CA through this turbulent time," Mr. Ranieri said.
"Ken and COO Jeff Clarke were able to successfully overcome
significant obstacles.  The Company performed solidly for the past
three quarters, underwent a restructuring effort, made two
strategic acquisitions to add to its security portfolio, outlined
a growth strategy and continued to fill key management positions
with highly credentialed individuals.  Much of this credit goes to
Ken, and I am delighted that he has agreed to remain on CA's Board
of Directors."

                        About the Company

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

                          *     *     *

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

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


CORN PRODUCTS: Board Authorizes Stock Repurchase Program
--------------------------------------------------------
Corn Products International, Inc.'s (NYSE: CPO) board of directors
has authorized a stock repurchase program.

Under the program, which runs through Feb. 28, 2010, the Company
can purchase up to 4 million shares of its issued and outstanding
common stock.

This program replaces the Company's previous stock repurchase
program, which expired on Jan. 20, 2005.

                        About the Company

Corn Products International, Inc., is one of the world's largest
corn refiners and a major supplier of high-quality food
ingredients and industrial products derived from the wet milling
and processing of corn and other starch- based materials.  The
Company is the number-one worldwide producer of dextrose and a
leading regional producer of starch, high fructose corn syrup and
glucose.  In 2004, the Company recorded net sales of $2.3 billion
with operations in 19 countries at 34 plants, including wholly
owned businesses, affiliates and alliances.  Headquartered in
Westchester, Ill., it was founded in 1906.  The Company is listed
on the New York Stock Exchange under the symbol CPO.  Additional
information can be found on the World Wide Web at
http://www.cornproducts.com/

                          *     *     *

As reported in the Troubled Company Reporter on Oct. 22, 2004,
Moody's Investors Service placed the debt ratings of Corn Products
International (senior implied Ba1) under review for possible
upgrade. Ratings placed under review are as follows:

   * Senior implied rating - Ba1,
   * $255MM senior unsecured notes, due 2007 - Ba1,
   * $200MM senior unsecured notes, due 2009 - Ba1,
   * $145MM senior unsecured shelf - (P) Ba1,
   * Senior unsecured issuer rating - Ba1.

The review is prompted by Corn Products International's steady
improvement in operating performance over the past few years,
which has been accompanied by debt reduction, improved debt
protection measures, and less reliance on subsidiary borrowings.


COVANTA ENERGY: Liquidating Trustee Wants to Close Eight Cases
--------------------------------------------------------------
Pursuant to Section 350 of the Bankruptcy Code and Rule 3022 of
the Federal Rules of Bankruptcy Procedure, the Liquidating
Trustee asks the Court to enter a final decree closing the
Chapter 11 cases of eight liquidating Debtors:

Case No.   Debtor
--------   ------
02-40827   Ogden Allied Abatement & Decontamination Service, Inc.
02-40828   Ogden Allied Maintenance Corp.
02-40835   Ogden Allied Payroll Services, Inc.
02-40846   Ogden Facility Management Corp. of Anaheim
02-40850   Ogden Services Corporation
02-40851   Ogden Support Services, Inc.
03-13695   Ogden Aviation Security Services of Indiana (NJ), Inc.
03-13702   Ogden Management Services, Inc.

Section 350(a) provides that "[a]fter an estate is fully
administered and the Court has discharged the trustee, the Court
shall close the case."  Bankruptcy Rule 3022 further provides that
"[a]fter an estate is fully administered in a Chapter 11
reorganization case, the Court, on its own motion or on motion of
a party-in-interest, shall enter a final decree closing the case."

Although neither the Bankruptcy Code nor the Bankruptcy Rules
define "fully administered," the Advisory Committee's Note to
Rule 3022 states that:

     "[F]actors that the court should consider in determining
     whether the estate has been fully administered include
     (1) whether the order confirming the plan has become
     final; (2) whether deposits required by the plan have been
     distributed; (3) whether the property proposed by the plan to
     be transferred has been transferred; (4) whether the debtor
     or the successor of the debtor under the plan has assumed the
     business or management of the property under the plan; (5)
     whether payments under the plan have commenced; and (6)
     whether all motions, contested matters, and adversary
     proceedings have been finally resolved."

Applying the six factors to the facts and circumstances of the
eight Completed Cases demonstrates that the cases have been fully
administered.

Paul R. DeFelippo, Esq., at Wollmuth, Maher, & Deutsch, LLP,
asserts that the entry of a final decree closing the Completed
Cases is warranted.  The Completed Cases meet the six factors, and
the Court has no need to keep them open to exercise jurisdiction
over any outstanding matters.  Absent the closure of the Completed
Cases, the Liquidating Trustee would continue to incur unnecessary
U.S. Trustee fees.

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)


DEX MEDIA: Forms Partnership with Aptas to Upgrade Capabilities
---------------------------------------------------------------
Dex Media, Inc. (NYSE: DEX) and Aptas Inc. reported a partnership
agreement that will bring next-generation local search
capabilities to DexOnline.com, Dex's online Yellow Pages
directory.  The new capabilities will be introduced throughout
this year and in early 2006.

"Our partnership with Aptas will enable us to take the local
search experience to the next level, making DexOnline even more
relevant for consumers and valuable for advertisers," said Dex
Media CEO George Burnett.  "With its strong management team and
breadth of local search expertise, Aptas is an ideal partner to
help us extend our local search leadership."

DexOnline has been named the usage leader in the company's 14-
state region for three straight quarters, according to market
research firm comScore.  The Kelsey Group, a directory and local
search industry research firm, recently gave DexOnline the highest
overall rating among 15 U.S. Internet Yellow Pages/Local Search
Sites based on depth of content, search capabilities, site
intelligence, relevance of results and user interface and
interaction.

"We look forward to working together to help Dex Media build on
its leadership position in local search, introducing new
capabilities that will create significant benefits for consumers
and advertisers," said Aptas CEO Perry Evans.

About Aptas Inc.

Aptas' unique methods of relevancy and deep content organization
offer the most refined and ready to apply solutions in Local
Search.  Aptas' user-centered content enhancements and search
functionality help connect and build relationships between
consumers and locally targeted advertisers.  Aptas' Directory
Knowledge Base(TM) and suite of products and services transforms
complex content into relevant knowledge critical Local Search
success.

                    About the Company

Dex Media, Inc. is the exclusive publisher of the official White
and Yellow Pages directories in print, Internet and CD-ROM for
Qwest Communications International Inc.  The company publishes 259
directories in Arizona, Colorado, Idaho, Iowa, Minnesota, Montana,
Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Utah,
Washington and Wyoming.  The company's leading Internet based
directory, DexOnline.com, is the most used Internet Yellow Pages
in the states Dex Media serves, according to market research firm
comScore. In 2003, after giving effect to the acquisition of Dex
Media West, LLC, Dex Media, Inc. generated revenues of
approximately $1.6 billion.


                          *     *     *

As reported in the Troubled Company Reporter on June 18, 2004,
Fitch Ratings affirmed these ratings on Dex Media's subsidiaries,
Dex Media East LLC (DXME) and Dex Media West LLC (DXMW):

     DXME

          -- $1.1 billion senior secured credit facility 'BB-';
          -- $450 million senior unsecured notes due 2009 'B';
          -- $525 million senior subordinated notes due 2012 'B-;

     DXMW

          -- $2.1 billion senior secured credit facility 'BB-';
          -- $385 million senior unsecured notes due 2010 'B';
          -- $780 million senior subordinated notes due 2013 'B-'.

In addition, Fitch has assigned a 'CCC+' rating to the holding
company's, Dex Media Inc., $500 million 8% notes due 2013 and its
$750 million 9% aggregate principal discount notes due 2013, which
has a current accreted value of $512 million. Approximately
$6.3 billion of debt is affected by Fitch's actions. The Rating
Outlook is Stable.

On July 28, 2004, Moody's Investor Service upgraded its credit
ratings by two notches to B3.

In anticipation of a common stock offering and the use of a
portion of the proceeds to reduce debt, on May 17, 2004, Standard
& Poors revised the outlook on Dex's single-B credit ratings to
stable from negative.


EARL BRICE: Look for Bankruptcy Schedules by Mar. 1
---------------------------------------------------
The Honorable Timothy J. Mahoney of the U.S. Bankruptcy Court for
the District of Nebraska gave Earl Brice Equipment, LLC, more time
to file its Schedules of Assets and Liabilities, Statement of
Financial Affairs, and Schedules of Executory Contracts and
Unexpired Leases.  The Debtor has until March 1, 2005, to file
those documents.

The Debtor explains that because its assets consist mostly of
equipment subject to possible liquidation and located in many
locations, it needs the additional time to accurately collect and
prepare all the information necessary for those assets and their
related contracts.

The Debtor assures Judge Mahoney that the extension will give it
more time to work with its staff in collecting and completing the
Schedules and Statements on or before the extension deadline.

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


ELAN CORP: Final SEC Settlement Concludes Investigation
-------------------------------------------------------
Elan Corporation, plc said the Commissioners of the Securities and
Exchange Commission have given final approval to the previously
announced provisional agreement between Elan and the Staff of the
SEC to settle the investigation by the SEC's Division of
Enforcement that commenced in February 2002.  The approved
settlement concludes all aspects of the investigation with respect
to Elan and its current and former Directors and Officers.

"I am pleased to announce the final settlement of the SEC
investigation," said Kelly Martin, Elan's president and chief
executive officer.  "This is an important step forward for Elan,
its shareholders and patients.  Closure on the SEC investigation
removes uncertainty and allows us to focus all of our energies on
bringing innovative science to patients in our core areas of
neurodegenerative and autoimmune diseases and, in particular,
executing on the successful launches of Tysabri and Prialt."

                  Terms of Settlement with SEC

Under the agreement reached with the SEC the Company neither
admits nor denies the allegations contained in the SEC's civil
complaint, which includes allegations of violations of some
provisions of the federal securities laws, including Section 10(b)
of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
The settlement contains a final judgment restraining and enjoining
the Company from future violations of these provisions.  In
addition, the Company will pay a civil penalty of $15 million.  In
connection with the settlement, the Company will not be required
to restate or adjust any of its historical financial results or
information.

On Oct. 4, 2004, the Company had included in its financial
statements a reserve of $55 million, net of insurance coverage, to
cover the Company's estimated liability related to the SEC
investigation and the shareholder class action pending in the U.S.
District Court for the Southern District of New York.  The terms
of the class action settlement are subject to final Court
approval.  A hearing is scheduled for Feb. 18, 2005, at which the
Court will consider final approval of the settlement.

                        About the Company

Elan is a neuroscience-based biotechnology company that is focused
on discovering, developing, manufacturing, selling and marketing
advanced therapies in neurodegenerative diseases, autoimmune
diseases and severe pain. Elan's (NYSE: ELN) shares trade on the
New York, London and Dublin Stock Exchanges.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 25, 2004,
Standard & Poor's Ratings Services raised the corporate credit and
senior unsecured debt ratings on specialty pharmaceutical maker
Elan Corp. to 'B' from 'B-'.  The rating action reflects the
Dublin, Ireland-based company's increased liquidity and
anticipates the upcoming market launch of its very promising
multiple sclerosis treatment Antegren, a drug that could generate
annual sales well in excess of $1 billion.

At the same time, Standard & Poor's raised its ratings on
subsidiary Elan Finance plc's recently completed offering of
$1.15 billion in senior unsecured notes to 'B' from 'B-'.  These
consist of $850 million in 7.75% fixed-rate notes due 2011 and
$300 million in floating rate notes due 2011.  In addition,
Standard & Poor's raised the ratings on Elan Pharmaceutical
Investments III Ltd.'s $390 million in subordinated notes to 'B'
from 'CCC'.  The senior unsecured debt rating on Elan Corp.'s
$460 million in convertible notes was raised to 'CCC+' from 'CCC'.

All the ratings have been removed from CreditWatch, where they
were placed November 1, 2004, after the company announced it would
issue senior unsecured notes to refinance a significant portion of
the EPIL III notes and increase liquidity ahead of the planned
Antegren launch.  The recently completed debt offering and
subsequent retirement of $351 million of EPIL III's notes adds
roughly $800 million to the coffers of Elan Corp.  The outlook is
positive.


ENRON CORP: Inks Pact to Settle Two Federal Insurance Claims
------------------------------------------------------------
On April 5, 1999, Enron Corp. executed and delivered to Federal
Insurance Company a General Agreement of Indemnity pursuant to
which Enron indemnified Federal Insurance for all loss, damage or
expense that it would incur as a result of issuing any bond on
behalf of Enron or its subsidiaries.

Subsequently, Federal Insurance along with American Home
Assurance Co. issued a certain advance payment supply surety bond
in the maximum amount of $300,071,427.  Federal Insurance issued
the Surety Bond on behalf of Enron Natural Gas Marketing Corp.,
and in favor of American Public Energy Agency, with Federal
Insurance's contractual share of liability under the Bond being
50% of the Bond's penal amount then outstanding.

On January 8, 2002, upon their request, Federal Insurance and
American Home were granted an order to show cause with temporary
restraints by the United States District Court for the District
of New Jersey.  With Enron Natural Gas' commencement of its
Chapter 11 case on January 11, 2002, the New Jersey litigation
was stayed.

On March 15, 2002, Federal Insurance and its co-surety, American
Home, filed a complaint for declaratory judgment and injunctive
relief against Enron Natural Gas, Enron, JPMorgan Chase & Co. and
American Public Energy in U.S. Bankruptcy Court for the Southern
District of New York.  The Court denied Federal Insurance's and
American Home's request for summary judgment and granted the
Debtors' motion to dismiss the complaint.  The District Court
affirmed the Bankruptcy Court's dismissal.  An appeal to the
United States Court of Appeals subsequently was dismissed with
prejudice.

On October 11, 2002, Federal Insurance filed Claim No. 9315
against Enron for $125,877,601 plus attorneys' fees, and Claim
9317 against Enron Natural Gas for the same amount.  In July
2003, Federal Insurance transferred and assigned Claim No. 9315
to SPCP Group, LLC.  The Debtors dispute the asserted amount and
classification of the Claims.

To resolve the dispute regarding the Claims, the Debtors, Federal
Insurance and SPCP entered into a stipulation.

The Stipulation, which Judge Gonzalez approved, provides that:

    (a) The two Federal Insurance Claims will be allowed as
        general unsecured claims:

           Claim No.   Allowed Amount   Treatment under the Plan
           ---------   --------------   -------------------------
              9315       $125,877,601   Guaranty Claim to be
                                        treated in Class 185 with
                                        no right of setoff

              9317        125,877,601   General Unsecured Claim
                                        to be treated in Class 37
                                        of the Plan with no right
                                        of setoff

    (b) Federal Insurance and SPCP waive all liabilities related
        to the two Claims that appear on the Debtors' Schedules;

    (c) The Stipulation supercedes the Debtors' Schedules, as may
        be amended from time to time;

    (d) All liabilities relating to the two Claims, as scheduled,
        will be deemed withdrawn and no distributions will be made
        on account of the scheduled liabilities; and

    (e) Federal Insurance and SPCP will discharge the Debtors from
        any claims, obligations, which they have relating to the
        two Claims, or any transaction that gave rise to the
        issuance of the Bond and the Indemnity.

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)


EXIDE TECHNOLOGIES: Proposes $350 Million Senior Debt Offering
--------------------------------------------------------------
Exide Technologies (NASDAQ: XIDE), a global leader in stored
electrical energy solutions, intends to offer $350 million
aggregate principal amount of senior notes due in 2013.

The net proceeds from the note offering are expected to be used to
repay a portion of indebtedness under Exide's senior credit
facilities, for general corporate purposes and to provide Exide
with greater liquidity. The proposed offering of notes is
conditioned upon the receipt of an amendment to the senior credit
agreement. The amendment will, among other things, permit the
issuance of the notes and the application of the proceeds as
described.

The notes are being offered in a private placement to qualified
institutional buyers under Rule 144A and to persons outside the
United States under Regulation S. The notes will not be registered
under the Securities Act of 1933, as amended, and unless so
registered, may not be offered or sold in the United States except
pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act and applicable
state securities laws.

This press release shall not constitute an offer to sell, or the
solicitation of an offer to buy, nor shall there be any sale of
the senior notes 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.

Headquartered in Princeton, New Jersey, Exide Technologies is the
worldwide leading manufacturer and distributor of lead acid
batteries and other related electrical energy storage products.
The Company filed for chapter 11 protection on Apr. 14, 2002
(Bankr. Del. Case No. 02-11125).  Matthew N. Kleiman, Esq., and
Kirk A. Kennedy, Esq., at Kirkland & Ellis, represent the Debtors
in their restructuring efforts.  Exide's confirmed chapter 11 Plan
took effect on May 5, 2004.  On April 14, 2002, the Debtors listed
$2,073,238,000 in assets and $2,524,448,000 in debts.  (Exide
Bankruptcy News, Issue No. 60; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


FALCON PRODUCTS: Gets Interim Okay to Use Fleet's Cash Collateral
-----------------------------------------------------------------
The Honorable Barry S. Schermer of the U.S. Bankruptcy Court for
the Eastern District of Missouri gave Falcon Products, Inc., and
its debtor-affiliates interim approval to use cash collateral
securing repayment of loans from Fleet Capital Corporation.

To avoid immediate and irreparable harm to the Debtor's estate,
Falcon requires the use of the cash collateral to pay its
operating expenses and pay vendors to ensure a continued supply of
goods and services essential to the company's ongoing viability.

The Debtor's use of the cash collateral will be in accordance with
its proposed budget projecting:

                                  For the Week Ending
                      ------------------------------------------
                        2/5     2/12     2/19     2/26      3/5
                      ------   ------   ------   ------   ------
Total Collections     $2,625   $3,200   $3,200   $3,200   $3,200
Total Disbursements    4,693    3,781    4,547    3,812    4,676
                      ------   ------   ------   ------   ------
Net Activity         ($2,068)   ($581) ($1,347)   ($612) ($1,476)
Revolver Payments     (2,625)  (3,200)  (3,200)  (3,200)  (3,200)
Revolver Borrowings    2,625    3,200    3,200    3,200    3,200
                      ------   ------   ------   ------   ------
Net Decrease in Cash ($2,068)   ($581) ($1,347)   ($612) ($1,476)
                      ======   ======   ======   ======   ======

The Court grants Fleet Capital valid and perfected liens and
security interests in all accounts receivable to adequately
protect its security interests.

Headquartered in Saint Louis, Missouri, Falcon Products, Inc. --
http://www.falconproducts.com/-- design, manufacture, and market
an extensive line of furniture for the food service, hospitality
and lodging, office, healthcare and education segments of the
commercial furniture market.  The Debtor and its eight debtor-
affiliates filed for chapter 11 protection on January 31, 2005
(Bankr. E.D. Mo. Case No. 05-41108).  Andrew M. Parlen, Esq., Eve
H. Karasik, Esq., Jeffrey C. Krause, Esq., Marina Fineman, Esq.,
Robert A. Greenfield, at Stutman, Treister & Glatt, PC, and Brian
Wade Hockett, Esq., and Mark V. Bossi, at Thompson Coburn LLP,
represent the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
$264,042,000 in assets and $252,027,000 in debts.


FEDERAL-MOGUL: Insurers Says Plan Alters Business Relationship
--------------------------------------------------------------
On behalf of 20 insurers of Federal-Mogul Corporation and its
debtor-affiliates, Sean J. Bellew, Esq., at Cozen O'Connor, in
Wilmington, Delaware, tells Judge Lyons of the U.S. Bankruptcy
Court for the District of Delaware that confirmation of the Third
Amended Plan of Reorganization would fundamentally alter the
nature of the relationship and impose significant new risks on the
Insurers.  The Plan seeks to assign the Asbestos Insurance
Policies to a trust established pursuant to Section 524(g) of the
Bankruptcy Code, which would liquidate and pay asbestos claims.
The Trust will be controlled by Trustees, a Trust Advisory
Committee, and the Future Claimants Representative, all of whom
have been or will be selected by the counsel for the asbestos
claimants.

Thus, instead of indemnifying a policyholder that has financial
incentives to cooperate with the Insurers in the defense and
settlement of claims, the Insurers will be expected to indemnify
an asbestos trust administered both by and for the benefit of the
very same asbestos claimants asserting the claims.  Moreover, the
Plan would eliminate the Insurers' contractual rights to control
or participate in the defense and settlement of the claims they
will be expected to pay.

Among other things, the Plan:

   * seeks a finding that allowance of an Asbestos Claim by the
     Trust constitutes a "judgment" and an "adjudication" that
     binds the Insurers for insurance coverage purposes;

   * seeks to assign to the Trust insurance policies that are
     non-assignable under applicable law;

   * includes anti-insurer findings intended to override the
     Insurers' defenses in the coverage litigation;

   * purports to cut off the Insurers' rights to pursue
     contribution claims against any insurer who settles with the
     Debtors, regardless of the equities as between the Insurers
     and the settling insurer; and

   * purports to vest the Bankruptcy Court with jurisdiction over
     insurance coverage litigation in violation of the Insurers'
     jury trial rights.

The Plan is an attempt to preempt central issues of the coverage
litigation to the detriment of the Insurers, Mr. Bellew adds.  It
also lays the foundation for later attempts by the Trust to hold
the Insurers immediately liable for claims that would not be valid
outside of bankruptcy or, if valid, would not be payable for many
years.

                      Plan Proponents Respond

To limit the Plan's impact on the rights and obligations of the
Debtors' insurers, the Debtors, the Official Committee of Asbestos
Claimants and the Legal Representative for Future Asbestos
Claimants have proposed certain non-material modifications to the
Plan, Kenneth P. Kansa, Esq., at Sidley Austin Brown & Wood LLP,
in Chicago, Illinois, relates.

A full-text copy of the modifications, many of which were
requested by or revised to incorporate the comments of the
Insurers is available free of charge at:

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

The Debtors, the Asbestos Committee and the Futures Representative
are co-proponents of the Third Amended Joint Plan of
Reorganization for the Debtors together with the Official
Committee of Unsecured Creditors, the Official Committee of Equity
Security Holders, and JPMorgan Chase Bank, as administrative agent
under the Debtors' prepetition secured credit facility.

Through the Proposed Plan Modifications, the Plan Proponents have
limited the Insurers' legitimate interest in the Plan solely to
the issue of whether the Debtors can transfer to the Trust their
rights to receive proceeds from the Insurers' policies.  The
Proposed Plan Modifications make clear that, other than defenses
that may arise solely as a result of an assignment, the Insurers'
defenses to making any payments required by and any other rights
they may have under the policies will remain available to them
after the Plan is confirmed.

On the Debtors' behalf, Mr. Kansa tells the Court that the
Insurers' objections go beyond the issue of assignment -- the only
issue on which they arguably have standing -- and into issues that
are not even plausibly relevant to them.  Among other things, Mr.
Kansa says, the Insurers object to:

    -- the proposed treatment of FMP Fund claimants;

    -- the ability of the Asbestos Personal Injury Trust
       Distribution Procedures to value and pay claims;

    -- the neutrality of the Trustees and the members of the Trust
       Advisory Committee;

    -- the proposed treatment of equity interests; and

    -- whether the Plan satisfies the "best interest" test.

According to Mr. Kansa, the Insurers cannot be motivated in
prosecuting their objections by a benevolent desire to protect the
interests of asbestos claimants or other stakeholders in these
proceedings, but instead seek to raise any objection that they
believe might derail the Plan.  "The Insurers' unsubstantiated
worries about future happenings that may or may not come to pass
are not a legitimate reason to block confirmation of the Plan,"
Mr. Kansa says.  The Plan Proponents assert that the Insurers'
attempt to block confirmation of the Plan are improper and their
objections should be overruled.

With respect to the only issue that the Insurers might have
standing to contest -- the Plan's assignment to the Trust of the
Debtors' right to proceeds from certain of the Debtors' insurance
policies -- a December 2, 2004, Third Circuit opinion in
Combustion Engineering makes clear that the Bankruptcy Code
provides the Bankruptcy Court with the authority to assign
insurance rights of the Debtors to the Trust notwithstanding any
anti-assignment provisions in the subject policies.  Mr. Kansa
points out that the Combustion Engineering decision compels the
overruling of the Insurers' objections to the assignment of the
Debtors' insurance rights and thus eliminates the only objections
to confirmation of the Plan that the Insurers have standing to
assert.

                      Insurers Lack Standing

Mr. Kansa contends that the Insurers have not established and
cannot establish that the Court's confirmation of the Plan will
result in any direct and immediate pecuniary impact on their
legitimate interests.  "They are not creditors of the Debtors and
have suffered no injury prompting them to file a claim in [the
Debtors'] cases."

               Assignments are Valid and Enforceable

Mr. Kansa notes that it is a condition to confirmation of the Plan
that the Court find that the assignments of the Asbestos Insurance
Actions and the Asbestos Insurance Action Recoveries to the Trust
are valid and enforceable.  The proposed assignments are limited
to the assignment to the Trust of the right to recover any
insurance proceeds that are available for the Asbestos Personal
Injury Claims that are being channeled from the Debtors to the
Trust.

Mr. Kansa contends that the Debtors' assignment is authorized
under Sections 541 and 1123(a)(5) of the Bankruptcy Code.  Even if
Sections 541 and 1123(a)(5) did not grant the Bankruptcy Court the
power to assign to the Trust the Debtors' right to insurance,
courts have long recognized that the assignments are permitted as
a matter of state law.  Furthermore, prohibiting the assignment of
insurance rights is contrary to Section 524(e) of the Bankruptcy
Code and to the insolvency clauses contained in the policies
themselves.

In addition, Mr. Kansa notes, the Plan's assignment of insurance
rights does not change the Insurers' risk.  The insurance policies
themselves and Section 524(e) of the Bankruptcy Code prevent the
Insurers from receiving a windfall as a result of the Debtors'
bankruptcy.

              Other Objections Must be Overruled, Too

As to the insurers' other objections, Mr. Kansa argues that the
TDPs do not constitute an improper delegation of the power to
allow claims.  Even if the TDP constituted an "allowance" within
the meaning of Section 502, the parties affected by the TDP's
processes are the holders of present and future claims.  These are
the parties who voted overwhelmingly in support of the Plan.

Moreover, Mr. Kansa continues, the proposed funding available to
the Trust, the ability of the Trustees to adjust the TDP to
account for changes in the value of the assets available to the
Trust, the Trustees' continuing fiduciary duties, and the Court's
retained jurisdiction all operate to provide "reasonable
assurance" that present and future claimants will be treated
fairly and in a substantially similar manner.  Given these
thorough protections, the Insurers' claimed concerns are grossly
exaggerated.  "The Plan complies with all of the requirements of
Sections 524(g) and 1129 and should be confirmed."

                         Insurers Talk Back

In seven separate pleadings, more than 35 insurers raised
supplemental objections to confirmation of the Debtors' Third
Amended Joint Plan of Reorganization:

    1. ACE Property & Casualty Insurance Company
    2. Allianz Global Risks U.S. Insurance Company
    3. Allianz Underwriters Insurance Company
    4. Allianz Versicherungs AG
    5. Allstate Insurance Company, solely as successor-in-interest
       to Northbrook Excess and Surplus Insurance Company
    6. American Home Assurance Company
    7. American International Underwriters Insurance Company
    8. Birmingham Fire Insurance Company of Pennsylvania
    9. Central National Insurance Company of Omaha
   10. Century Indemnity Company
   11. Certain London Market Insurance Companies
   12. Certain Underwriters at Lloyds, London
   13. Everest Reinsurance Company
   14. Federal Insurance Company
   15. Fireman's Fund Insurance Company
   16. First State Insurance Company
   17. Granite State Insurance Company
   18. Hartford Accident and Indemnity Company
   19. Insurance Company of North America
   20. Insurance Company of the State of Pennsylvania
   21. Lexington Insurance Company
   22. Lumbermens Mutual Casualty Company
   23. Mt. McKinley Insurance Company
   24. National Surety Corporation
   25. National Union Fire Insurance Company of Pittsburgh, PA
   26. New England Insurance Company
   27. One Beacon America Insurance Company
   28. Pacific Employers Insurance Company
   29. Seaton Insurance Company
   30. St. Paul Mercury Insurance Company
   31. Stonewall Insurance Company
   32. The Travelers Indemnity Company and certain affiliates
   33. TIG Insurance Company, as successor by merger to
       International Insurance Company
   34. Travelers Casualty and Surety Company
   35. U.S. Fire Insurance Company

The Insurers point out that the Debtors, the Asbestos Committee,
and the Future Claimants' Representative misunderstood and
misconstrued the Combustion Engineering decision.

In In re Combustion Engineering, 2004 U.S. App. LEXIS 24834 (3d
Cir., December 2, 2004), the Third Circuit explained that,
contrary to the restrictive requirements for appellate standing, a
party-in-interest has a broad right to participate at the trial
level of a bankruptcy case, including the right to object to plan
confirmation at the plan confirmation hearing.

Furthermore, the Third Circuit addressed certain
"super- preemptory language" -- which has been referred to by the
parties-in-interest as "insurance neutrality language".  The
super-preemptory language provided that nothing in the plan of
reorganization would impair the insurers' legal, equitable, or
contractual rights.  The Third Circuit concluded that the plan,
pursuant to the super-preemptory language, did not diminish the
rights of the insurers or increase their burdens under the subject
insurance policies and settlements because:

    (a) the claims handling processes as they existed prepetition
        were not changed by the Trust Distribution Procedures, and
        hence the claims would be paid under the TDPs in a manner
        consistent with the rights and conditions of the subject
        insurance policies, and

    (b) the insurers were permitted to dispute coverage and raise
        any of the same challenges and defenses to the payment of
        claims under the TDPs as they could do prepetition.

The Third Circuit also affirmed the long-standing rule that
language in prepetition contracts barring assignment of those
contracts or the rights and interests under those contracts does
not prevent transfer of the debtor's assets to the debtor-in-
possession's estate.  The Third Circuit did not address the
transfer of a debtor's assets to a trust.

According to the Insurers, bankruptcy law, including Section
1123(a)(5), does not permit -- without the insurer's consent --
the transfer of "financial accommodations" like insurance policies
from those who are insured to those who are not.  More
specifically, Section 1123(a)(5) does not authorize the Proponents
to substitute one person for another under an insurance policy --
in Federal-Mogul's case, the uninsured non-debtor Trust for the
insured Debtors.

The Proponents' constitutional argument concerning standing also
fails, the Insurers assert.  As the Supreme Court has explained,
"in terms of Article III limitations on federal court
jurisdiction, the question of standing is related only to whether
the dispute sought to be adjudicated will be presented in an
adversary context and in a form historically viewed as capable of
judicial resolution." Camp, 397 U.S. at 151-52.

Moreover, contrary to the Proponents' contentions, it is the
Proponents, not the Insurers, that seek a windfall.  By
definition, the Insurers explain, a windfall arises when a party
seeks and obtains more than what it is entitled to receive.  The
Insurers seek only to preserve their legal entitlement to have
their rights and obligations determined in strict accordance with
the Policies.  The Proponents, on the other hand, seek to obtain
a windfall by altering the terms and conditions under which the
Insurers may be liable for payment.  "This is legally
impermissible," the Insurers complain.

Thus, the Insurers insist that the Plan, as presently formulated,
cannot be confirmed.

                           *     *     *

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,
notes that various issues concerning the Insurers' objections have
been the subject of ongoing proceedings before the Court.  The
Plan Proponents submit that there is no present need for further
Court proceedings on the Insurers' objections prior to the
confirmation hearing.

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 Nos. 65 & 72; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


FLOWSERVE CORP: Moody's Affirms Ratings & Says Outlook is Stable
----------------------------------------------------------------
Moody's Investors Service has affirmed the ratings of Flowserve
Corp., following its recent announcement regarding the restatement
of its financial results, divestiture of non-core operations, its
2004 debt reduction amount, and the pending departure of its CEO.
The rating outlook remains stable.

The ratings affirmed are:

   * Senior implied rating of Ba3,

   * Issuer rating of B1,

   * Ba3 for the $300 million senior secured revolving credit
     facility, due 2006,

   * Ba3 for approximately $203 million of senior secured term
     loan A, due 2006,

   * Ba3 for approximately $465 million of senior secured term
     loan C, due 2009,

   * B2 for approximately $268.5 million of senior subordinated
     notes, due 2010.

(Note: These numbers reflect the last reported financial
statements of Flowserve as of the first quarter of 2004 and do not
reflect subsequent reported debt reduction by the company in its
press releases.)

The rating affirmation balances the uncertainty arising from the
financial restatement and the CEO's pending departure against the
company's seemingly good operating performance and the potentially
positive impact from the planned divestiture of non-core assets.

Flowserve Corp. has stated that it achieved debt repayments of
$210 million in 2004.  This, coupled with higher bookings for the
fourth quarter of 2004 and the full year 2004, as well as higher
backlogs at the end of 2004, indicate a healthy underlying
operation.  However, its operating and financial performance
cannot be fully assessed until it files its 10-Q reports for the
second and third quarters of 2004 and its 2004 10-K report until
around the third quarter of 2005, as it currently plans to.

The Company also expects to report new material control
weaknesses, in addition to those previously announced, arising
from its ongoing assessment and expects to receive an adverse
opinion on the operating effectiveness of its internal controls
from its external auditors.

Moody's will assess the nature and extent of the potential
material control weaknesses once disclosed, and cautions that in
the event that the on-going review reveals systematic failure in
internal control and reporting, it could have negative
implications on the ratings.

Furthermore, Moody's says that Flowserve Corp.'s plan to divest of
the general services business of its Flow Control Division could
have potentially positive impact on its credit facility if the
proceeds from the proposed divestiture are used to reduce debt.

On the other hand, the pending departure of the CEO, along with
the frequent reshuffle of its senior management team over the past
year, has created a considerable amount of uncertainty regarding
its strategic direction and future operating strategy.  Moody's
will continue to assess the transition process as it progresses,
along with other developments as noted above.

Moody's notes that the rating affirmation presumes that the
company will be able to obtain the necessary waivers from its bank
lenders in order to maintain its financial flexibility.  Failure
to obtain the banks' consent will jeopardize the company's
liquidity and thus have adverse effect on the ratings.

Flowserve Corp., headquartered in Dallas, Texas, is one of the
world's leading providers of fluid motion and control products and
services.  Operating in 56 countries, the company produces
engineered and industrial pumps, seals and valves as well as a
range of related flow management services.


FPL ENERGY: Fitch Assigns BB Rating on $100 Million Senior Debt
---------------------------------------------------------------
Fitch Ratings expects to assign ratings of 'BBB' and 'BB' to FPL
Energy National Wind, LLC's $351 million senior secured
indebtedness due 2024 and to FPL Energy National Wind Portfolio,
LLC's $100 million senior secured indebtedness due 2019,
respectively.  The Holdco owns 100% of the Opco and, in turn, is a
wholly owned indirect subsidiary of FPL Group Capital, Inc. (FPL
Group, rated 'A' by Fitch).

The purpose of the proposed financing is to recapitalize a
portfolio of wind farms constructed with members' equity.  After
funding reserve accounts and paying transaction costs, the net
proceeds of the issuance will be distributed to FPL Energy, LLC,
the sponsor.

The Opco is a portfolio of nine operating wind farms with an
aggregate capacity of approximately 534 MW.  Each project company
is wholly owned by the Opco and is otherwise unencumbered with
project-level indebtedness.  All of the output of each wind farm
is committed under long-term power purchase agreements -- PPAs --
with counterparties that are unaffiliated with the Opco.  Under
the agreements, the Opco generally receives a fixed-energy price
for all energy produced by the wind farm, and the counterparty
generally pays all costs associated with transmission and
scheduling.

The Holdco is a special-purpose vehicle formed to own 100% of the
Opco. Distributions from the Opco are the Holdco's sole source of
revenues.  Neither the Opco nor the Holdco has any employees.
Operations and maintenance activity will be the responsibility of
an affiliate, FPL Energy Operating Services, Inc.  Management and
overhead functions will be performed by other affiliated entities.

Rating Rationale

The rating of the Opco bonds is based on the stand-alone credit
quality of the Opco, which is derived from the aggregated cash
flow generated from the nine wind farm assets and protections in
the project indenture.  Fitch believes the circumstances of the
portfolio, including number of turbines, maintenance requirements,
and experience of the sponsor, suggest that a gradual erosion of
cash flow or a temporary increase in expenditures is unlikely.
Accordingly, Fitch believes the portfolio can withstand debt-
service coverages in a stress scenario that are lower than
typically observed in the rating category.

Fitch views the structural subordination of the Holdco debt as
commensurate with deeply subordinated debt of the Opco.  Fitch's
policy for deeply subordinated debt requires a three-notch
differential between the ratings of the senior and subordinate
debt unless other circumstances suggest greater notching.
Distribution tests at the Opco and consolidated coverage of the
combined Opco and Holdco debt service suggest that the minimum
three notches are appropriate.

The sponsor's outside counsel will provide an opinion that in the
event of a bankruptcy of the Holdco's direct and indirect owners,
the assets and liabilities of the Holdco would not be consolidated
with those of its owners under the federal bankruptcy laws.
Furthermore, in the event of a bankruptcy of the Holdco, the
assets and liabilities of the Opco would not be consolidated with
those of the Holdco.  Accordingly, Fitch views the credit quality
of the Opco and Holdco to be structurally independent of the
rating of its owners.

Although the ratings are not directly linked to the ratings of the
sponsor, the credit quality of the sponsor is considered a
constraint on the rating of the Opco.  FPL Group guarantees an
average of approximately 40% of annual Opco revenues over the
first eight years of the debt life, and affiliated companies
manage the operations of the facilities.  In the event the future
rating of the sponsor deteriorates below the stand-alone credit
quality of the Opco, the ratings of the Opco and Holdco bonds will
likely be constrained by the then-current rating of FPL Group.

The rating of the Opco incorporates the following strengths and
concerns.

Primary credit strengths:

     -- The portfolio provides significant equipment, technology,
        and regional diversity;

     -- The maintenance requirements of wind turbines minimize the
        potential for unexpected costs;

     -- Substantially all revenues are derived under fixed-price
        arrangements;

     -- Revenues are derived from counterparties with a strong
        investment-grade profile;

     -- The transaction structure incorporates meaningful
        liquidity to minimize technology risks;

     -- The sponsor is reported to own the largest fleet of wind
        turbines in the U.S. and has publicly stated a long-term
        strategy in the sector.

Primary credit concerns:

     -- The financial projections rely on wind data collected over
        a short period of time;

     -- The portfolio and certain turbine models have a limited
        operating history.

Financial Analysis

In the sponsor's base case, annual DSCRs for the Opco gradually
rise to 2.2 times at maturity from 1.7x with an average of 1.8x.
Consolidated annual DSCRs for the combined Opco and Holdco debt
are approximately 1.3x in all years until the maturity of the
Holdco debt.  The sponsor's base case incorporates conservative
modeling assumptions for several wind farms.  Fitch believes there
are credible arguments that the sponsor's base-case cash flows
could be stronger in the long term than indicated in the
projections.

Several stress scenarios were provided to assess the effect of
wind volatility.  Fitch believes the one-year P90 is most
meaningful to assessing the likelihood of a payment default,
whereas the 10-year P95 scenario is better suited for recovery
analysis.

     -- One-year P90: This scenario reflects, for every year, the
                      level of production that can be expected in
                      a one-year period with a 90% degree of
                      confidence.  Average DSCRs are approximately
                      0.2x lower than in the base case.

     -- 10-year P95: This scenario reflects, for every year, the
                     average level of production that can be
                     expected over a 10-year period with a 95%
                     degree of confidence.  Average DSCRs are
                     approximately 0.17x lower than in the base
                     case.

Several stress scenarios were considered to assess the effect of
other modeling assumptions:

     -- Increased O&M: This scenario increases operations and
                      maintenance expenses by 10%.  DSCRs are
                      approximately 0.05x per year lower than in
                      the base case.

     -- 92% availability: This scenario reduces turbine
                      availability to 92% from 97%.  DSCRs are
                      approximately 0.1x per year lower than in
                      the base case.

A combination stress was prepared to approximate conditions that
Fitch believes could reasonably exist concurrently.  This scenario
includes the wind production in the one-year P90 scenario, the 5%
availability reduction to provide additional allowance for error
in the wind resource assessment, and the 10% increase in O&M.
Average DSCRs are approximately 0.3x lower than in the base case
with a minimum of 1.4x.

Fitch has published a presale report with a detailed discussion of
the transaction and rating rationale.  The presale report 'FPL
Energy National Wind LLC,' is available on Fitch's web site at
http://www.fitchratings.com/under 'Project Finance' and
'Corporate Finance' sector or by contacting the ratings desk at
+1-800-893-4824.


FREEDOM MEDICAL: U.S. Trustee Will Meet Creditors on Mar. 9
-----------------------------------------------------------
The United States Trustee for Region 3 will convene a meeting of
Freedom Medical, Inc.'s creditors at 3:00 p.m., on March 9, 2005,
at the Office of the U.S. Trustee, Meeting Room, Suite 501,
located in 833 Chestnut Street in Philadelphia, Pennsylvania.
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 Exton, Pennsylvania, Freedom Medical, Inc.,
-- http://www.freedommedical.com/-- sells electronic medical
equipment and related services to hospitals, alternate site
healthcare providers, and EMS transport organizations.  The
Company filed for chapter 11 protection on December 29, 2004
(Bankr. E.D. Pa. Case No. 04-37092).  When the Debtor filed for
protection from its creditors, it listed estimated assets and
debts of more than $50 million.


FRONTIER OIL: Hosting FY 2004 Conference Call on Feb. 23
--------------------------------------------------------
Frontier Oil Corporation (NYSE: FTO) plans to release results for
the quarter and year ended Dec. 31, 2004 on Wednesday, Feb. 23,
2005.  Management has scheduled a conference call for the morning
of Feb. 23 at 11:00 a.m. (eastern time) to discuss the financial
results and business outlook.

To access the call, which is open to the public, dial (800) 289-
0746 several minutes prior to the call.  For those individuals
outside the United States, call (913) 981-5573.  A recorded replay
of the call may be heard through March 9, 2005, by dialing (888)
203-1112 (international callers (719) 457-0820) and entering the
code 7142683.  Also, the real-time conference call and a recorded
replay will be webcast by PR Newswire.  To access the call or the
replay via the Internet, go to http://www.frontieroil.com/and
register from the Investor Relations page of the site.

                        About the Company

Frontier operates a 110,000 barrel-per-day refinery located in El
Dorado, Kansas, and a 46,000 barrel-per-day refinery located in
Cheyenne, Wyoming, and markets its refined products principally
along the eastern slope of the Rocky Mountains and in other
neighboring plains states.

                          *     *     *

As reported in the Troubled Company Reporter on Sept. 23, 2004,
Moody's upgraded Frontier Oil Corporation's Senior Implied Rating
from B1 to Ba3 and assigned a B1 rating to its new $150 million of
6.625% senior unsecured guaranteed notes due 2011, with a stable
rating outlook.  Moody's also upgraded Frontier Oil's senior
unsecured issuer rating (a notional non-guaranteed parent issuer
rating) from B2 to B1 and Frontier Oil's remaining $170 million of
non-guaranteed 11.75% senior unsecured notes from B2 to B1.

Note proceeds will fund the majority of Frontier Oil's pending
call and retirement of the 11.75% notes (expected to cost roughly
$180 million), with $35 million of Frontier Oil's $88 million in
June 30, 2004 cash balances funding the rest of the tender cost.

The one-notch upgrade in the senior implied rating reflects:

   * the impact of a continued disciplined approach to evaluating
     acquisition candidates;

   * a supportive margin environment driven by supportive regional
     crack spreads and by amply wide crude oil quality price
     differentials;

   * cash balances to provide back-up internal funding for heavy
     2005 and 2006 capital spending; and

   * moderate leverage to bridge margin down-cycles and support
     revolver borrowings in such an environment in needed to
     support an escalated capital program and high inventory
     investment driven by high oil costs.


GARDENA CALIFORNIA: S&P Pares Certificate Rating to BB- from BBB-
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating to 'BB-'
from 'BBB-' on Gardena, Calif.'s outstanding series 1994
certificates of participation -- COPs.  The rating action reflects
significant uncertainties concerning the city's ability to meet
potential financial obligations derived from reimbursement
agreements with two letter of credit -- LOC -- banks.  The outlook
is developing.

"Given the approaching expiration of its LOC support the city's
credit is significantly weaker, particularly if it is compelled to
somehow absorb significantly higher debt service costs associated
paying down its obligations to the banks.  All of this is in the
context of already limited and somewhat concentrated financial
resources, despite recent incremental improvements to general fund
operating performance" Standard & Poor's credit analyst Gabriel
Petek said.  "The outlook is 'developing' because the rating could
be revised upward if the city is successful in negotiating a
restructuring of its obligations to the lending banks.  However,
the rating could be revised downward if the city is unsuccessful
in negotiating a restructuring of the obligations or if it must
absorb the increased debt payments after the LOCs expire."

The COPs were issued to provide for the refunding of debts
associated with the city's first-time home buyers program
($6.28 million) and its municipal mutual insurance funding program
($20.6 million), both of which are now defunct.

Of the city's outstanding $35.9 million in debt, $26.3 million of
it is in the form of obligations to two LOC banks under
reimbursement agreements for outstanding variable-rate
obligations.


GENCORP INC: Posts $398 Million Net Loss in Fiscal 2004
-------------------------------------------------------
GenCorp Inc. (NYSE: GY) reported results for the fourth quarter
and the fiscal year ended Nov. 30, 2004.

                           2004 Highlights

   -- Aerospace & Defense 2004 sales rose 53%, both from higher
      sales in existing programs, as well as contributions from
      the Atlantic Research Corporation (ARC) acquisition in late
      2003.

   -- The Company's Sacramento area property in process for
      development expanded in the fourth quarter by an additional
      1,600 acres.  Total real estate development projects now in
      the entitlement process exceed 5,800 acres.

   -- The under-performing GDX Automotive unit sale was completed
      August 31, 2004, and in the third quarter the Company
      classified Aerojet Fine Chemicals (AFC) as a discontinued
      operation, in accordance with a corporate decision to divest
      that business.

   -- A major recapitalization via a series of successful debt and
      equity offerings and a new credit facility began in the
      fourth quarter and was completed in the first quarter of
      2005.

Sales from continuing operations for 2004 totaled $499 million,
compared to $348 million in 2003, an increase of 43%. The increase
in sales for 2004 primarily reflects contributions from the ARC
acquisition, as well as other growth in the Company's Aerospace
and Defense business, partially offset by lower real estate sales.

The Company's net loss for 2004 was $398 million ($8.82 per
share), compared to net income of $22 million ($0.50 per share)
for 2003.  The loss from continuing operations for 2004 was $86
million ($1.91 per share) compared to income of $12 million ($0.26
per share) for 2003. The decrease in earnings from continuing
operations primarily reflects the impact of increases in employee
retirement benefit plan expense and interest expense, a tax
provision to reflect the uncertainty of realizing deferred tax
benefits, given historical losses, and lower real estate income.
The earnings decrease was partially offset by contributions from
the propulsion business of ARC, which was acquired in October
2003.

Sales from continuing operations for the fourth quarter 2004 were
$149 million, compared to $103 million in the same 2003 period.
The Company reported a fourth quarter net loss of $20 million
($0.42 per share), compared to net income of $12 million ($0.27
per share) for the 2003 period. Loss from continuing operations
for the fourth quarter was $14 million compared to income of
$8 million for the same 2003 period.

The 2004 fourth quarter and full year period reflect both the GDX
Automotive segment and Aerojet Fine Chemicals (AFC) segment as
discontinued operations. The sale of GDX Automotive was completed
on August 31, 2004. In addition, during the third quarter the
Company made a strategic decision to divest its AFC business and
focus on its Aerospace and Defense and Real Estate segments.  The
Company will continue to operate AFC in the ordinary course of
business pending any sale.

"GenCorp is a significantly different and stronger company than it
was at this time last year.  We are smaller -- with two business
segments -- but the 2004 operating performance of our Aerospace
and Defense segment and the milestones we achieved in executing
our real estate development plans are solid indicators of the
strength of the strategy we pursued in 2004," said Terry L.  Hall,
chairman of the Board, president and chief executive officer.  "We
have transformed the business portfolio and improved the capital
structure of the Company, with the goal of delivering shareholder
value over the long term."

"Our Aerospace and Defense business experienced significant and
impressive growth this year, reinforced by recent strategic
acquisitions that expanded both our technology and our market
presence," Hall continued.  "Aerojet contributed significantly to
several important national space and defense missions.  Aerojet
propulsion systems supported the spectacularly successful NASA
Mars and Saturn missions, and are aboard a spacecraft launched in
2004 to Mercury.  We continued to strengthen Aerojet's record of
participation in all major missile defense systems. With important
ongoing and new national initiatives in both defense and space
exploration, we expect to capitalize on our market and technology
leadership in these important markets in 2005."

"Likewise, our Real Estate business achieved important milestones
in 2004. We settled a major water dispute that should ensure an
adequate water supply to serve our development projects, and we
entered into a unique long-term agreement to sell the rights to
mine excess aggregates from portions of our property, which will
both produce income and reduce the development costs of the
property.  Most significantly, we increased the amount of our real
estate holdings undergoing the entitlement process to
approximately 5,800 acres.  These actions, together with our work
with state and federal authorities to advance the process toward
real estate development, are bringing us closer to our long-term
goal of monetizing the significant value of our real estate
holdings."

"Lastly, our recent equity and debt offerings, both in the fourth
quarter of 2004 and continuing through the first quarter of 2005,
have reduced debt and extended debt maturities.  These actions
strengthened our balance sheet and improved our financial
flexibility going forward.  During 2004 we faced impacts of higher
corporate expense, employee retirement benefit plan expense,
interest expense, and significant expense associated with the
Company's balance sheet restructuring.  In 2005 we will implement
strategies to bring our operations into better conformity with the
current size of the Company," concluded Hall.

                        Operations Review

                  Aerospace and Defense Segment

Total Year

Sales were $492 million for 2004, 53% higher than 2003 sales of
$321 million. The ARC acquisition contributed $156 million of the
increase. The 2004 sales growth included increased deliveries to
Boeing on the F/A-22 program, volume on the Terminal High Altitude
Air Defense (THAAD) program that was acquired in 2004 from Pratt &
Whitney for a nominal amount, and higher sales on programs
utilizing electric and liquid thrusters for orbit and attitude
maintenance. These increases were partially offset by lower volume
on a variety of defense and armament programs.

Segment performance was $30 million for 2004, compared to $43
million in 2003. Excluding the impacts of employee retirement
benefit plan expense and unusual items, segment performance was
$57 million, compared with $45 million the prior year. The
increase in segment performance reflects the impact of higher
sales, mainly driven by the ARC acquisition. Segment performance,
which is a non-GAAP financial measure, is defined in the footnotes
to the Operating Segment Information table at the end of this
release.

Fourth Quarter

Fourth quarter sales increased to $138 million compared to
$95 million in the fourth quarter 2003. Higher sales on the
Atlas(R) V and THAAD programs and the ARC acquisition contributed
to the increase.

Fourth quarter segment performance in 2004 was $7 million compared
to $17 million in 2003. Excluding the impacts of employee
retirement benefit plan expense and unusual items, segment
performance was $13 million, compared with $19 million in the same
period in 2003. In 2003, the Company benefited from favorable
contract performance on space systems programs, including the
Delta program.

Aerojet continued to make advances in its NASA business during the
quarter. Aerojet's engines powered the Genesis Discovery Mission.
Aerojet also tested a new Mars Lander and non-toxic Reaction
Control Engines. We view these milestones as highly relevant to
our ability to participate in NASA's manned and robotic space
exploration initiatives. In the missile defense area, Aerojet
successfully tested an advanced Throttling Divert and Attitude
Control System (TDACS) for interceptor applications and delivered
the first THAAD flight test motor. Aerojet also began installation
of production equipment at its Socorro, New Mexico facility to
support manufacturing of fire suppression systems for the Ford
Crown Victoria police cruiser.

As of November 30, 2004, Aerojet's contract backlog was $879
million compared to $830 million as of November 30, 2003. Funded
backlog, which includes only the amount of those contracts for
which money has been directly authorized by the U.S. Congress, or
for which a firm purchase order has been received by a commercial
customer, was approximately $538 million as of November 30, 2004
compared to $425 million as of November 30, 2003. The increase in
funded backlog primarily reflects growth and/or timing of funding
on tactical solid rocket motors, missile defense and F/A-22
programs, new funding for design upgrades on the Atlas V program,
and additional Crown Victoria business with Ford.

Real Estate Segment

Real Estate sales and segment performance for 2004 were $15
million and $12 million, respectively, compared to $32 million and
$23 million, respectively, for 2003. The 2003 results included
sales of several real estate assets. Results for 2004 do not
include any sales of real estate assets, but do include a property
usage agreement with the Sacramento Regional Transit for
construction of a Light Rail station adjacent to property the
Company intends to develop. The Company also finalized an
agreement with Granite Construction Company for the exclusive
rights to mine excess aggregates from certain portions of our
Sacramento property. These two transactions occurred in the fourth
quarter 2004.

Corporate and other expenses increased to $38 million in 2004
compared to $31 million in 2003. The increase is primarily due to
higher Sarbanes-Oxley compliance costs, higher insurance costs, an
increase in amortization of deferred financing costs, and a
provision of $2 million for environmental remediation costs
related to a former operating site.

Corporate employee retirement benefit plan expense was $17 million
in 2004, compared to $2 million in 2003. This change, as well as
the change in segment employee retirement benefit plan expense, is
primarily due to the recognition of the underperformance of the
U.S. pension plan assets in prior years and a decrease in the
discount rate used to determine benefit obligations.

Interest expense increased to $35 million in 2004 from $22 million
in 2003. The increase is due to higher debt levels and higher
average interest rates. The additional debt includes amounts
incurred in August 2003 to finance the ARC acquisition.

Total debt of $538 million at November 30, 2003 increased to $577
million at November 30, 2004. Total debt less total cash decreased
from $474 million at November 30, 2003 to $308 million as of
November 30, 2004. The decrease of $166 million primarily reflects
proceeds received from the sale of the GDX Automotive business and
our recent equity offering, offset by increased working capital.

In November 2004, the Company initiated the following financing
transactions in order to recapitalize its balance sheet and reduce
future interest costs:

   -- A public equity offering of common stock raised net cash
      proceeds of approximately $131 million, of which
      approximately $58 million (including premiums) will be used
      to redeem outstanding 9-1/2% Senior Subordinated Notes.

   -- The Company issued $80 million of aggregate principal amount
      of 2-1/4% Convertible Subordinated Debentures due in 2024.
      The proceeds were used to repurchase $70 million in
      aggregate principal amount of the Company's 5-3/4%
      Convertible Subordinated Notes due in 2007. In the first
      quarter of 2005, the Company issued an additional $66
      million of its 2-1/4% Convertible Subordinated Debentures,
      the proceeds of which were used to repurchase an additional
      $60 million in aggregate principal amount of the 5 3/4%
      Notes.

   -- In the first quarter of 2005, the Company closed a new $180
      million credit facility that replaced the senior credit
      facility in place as of November 30, 2004.  The new credit
      facility consists of an $80 million undrawn revolver, a $25
      million term loan and a letter of credit facility of $75
      million.  Using cash on hand, the Company repaid, in full,
      $141 million of outstanding term loans that existed under
      the former facility.

In 2004, the Company recorded pre-tax charges of $9 million
related to the write-off of deferred financing fees and the
premium associated with the repurchase of the 5-3/4% Notes.  In
addition, in the first quarter of 2005 the Company will record
additional pre-tax charges of $19 million which includes the
write-off of deferred fees associated with the former senior
credit facility, redemption of the 9 1/2% Notes, and the write-off
of deferred financing fees and premium associated with the
repurchase of the additional 5 3/4% Notes. Together, these actions
should save the Company approximately $9 million annually in
interest costs, while they also extend the debt maturities.

For 2004, the Company recorded an income tax provision consisting
of $34 million primarily to reflect the uncertainty of realizing
tax benefits in the future, given historical losses, offset by $5
million of benefit related primarily to research tax credit
claims. The Company recorded a provision of $6 million relating to
discontinued operations in the fourth quarter for foreign tax
obligations. No tax benefit has been included in the charge
related to the GDX Automotive business divestiture, as realization
of the tax benefit in the future is uncertain.

Shareholders' equity at November 30, 2004 was $141 million
compared to shareholders' equity as of November 30, 2003 of $428
million. The decline includes losses from the continuing and
discontinued operations of $433 million, resulting mostly from the
sale of GDX Automotive, partially offset by $146 million of other
shareholders' equity adjustments, primarily proceeds from the
equity offering and stock option exercises.

                         Business Outlook

We expect that Aerospace and Defense revenue growth will continue
over the long-term, however, margins will be under slight pressure
in the near-term due to our projected 2005 program mix. Real
Estate prospects remain positive with current levels of leasing
activities continuing to provide a stable income base going
forward. Our primary near-term focus in this segment will be to
concentrate on securing the entitlements of the 5,800 acres that
are currently in process.

We expect to incur approximately $48 million in non-cash expense
from employee retirement benefit plans evenly throughout 2005.

                        About the Company

GenCorp Inc. -- http://www.GenCorp.com/-- is a leading
technology-based manufacturer of aerospace and defense products
and systems with a real estate business segment that includes
activities related to the development, sale and leasing of the
Company's real estate assets.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 11, 2004,
Moody's Investors Service assigned a Caa2 rating to GenCorp,
Inc.'s proposed $50 million convertible subordinated notes, due
2024, and a B1 rating to the company's new $175 million senior
secured credit facilities, consisting of a $75 million revolving
credit due 2009 and a $100 million term loan due 2010. The
proceeds from the new notes and facilities, along with about
$100 million expected from a recently-announced 7.5 million public
share offering as well as cash provided by the recent sale of the
GDX automotive division in August 2004, will be used to re-
purchase part of the company's existing 5-3/4% note (due 2007) and
certain other debt securities, as well as to re-finance its
existing senior secured credit facilities. All other ratings of
the company have been affirmed:

     * Senior implied rating of B2

     * Unsecured issuer rating of B3

     * $150 million 9.5% senior subordinated notes, due 2013, of
       Caa1

     * $150 million 5.75% convertible subordinated notes, due
       2007, of Caa2

     * $125 million 4% convertible subordinated notes, due 2024,
       of Caa2

The ratings outlook is stable.


GENOIL INC: Issues Stock to Complete Proposed Debt Settlement
-------------------------------------------------------------
Genoil, Inc., (TSX VENTURE:GNO) (OTCBB:GNOLF.OB) has issued
358,259 common shares at a deemed price of $0.26 per share to
conclude part of a previously announced definitive shares for debt
settlement agreement with a related party for prior cash advances.
The total amount of indebtedness settled in this regard is
$93,147.30.  The shares issued in connection with the settlement
of this debt are subject to a four-month hold period from their
date of issuance.

Genoil, Inc. -- http://www.genoil.net/-- is an international
technology development company providing solutions to the oil and
gas industries through the use of proprietary technologies, which
represent significant breakthroughs in commercial applications.
The company's flagship product, the Genoil Hydroconversion
Upgrader -- GHUTM, combines hydrogen with carbon in order to
convert bitumen, heavy oil and refinery residue into light, sweet
synthetic oil with higher yields of transportation fuels.  The
GHUTM also eliminates a majority of contaminants such as sulfur
and nitrogen from the feed, and can either be easily integrated
into existing refinery infrastructures or be built as a stand-
alone unit.  Genoil believes that by upgrading the 13 million
bbls/d of refinery residuals into lighter distillates, the
dependency of the world on Middle Eastern light oil can be
significantly decreased.  The company is headquartered in Alberta,
Canada with offices in New York, Mexico, Columbia, Ecuador, Peru,
Russia, Saudi Arabia, and Bahrain, with coverage in numerous other
countries.

                         *     *     *

                      Going Concern Doubt

The Company's latest filings with the Securities and Exchange
Commission indicate that it hasn't attained commercial operations
from its various patents and technology rights and continues to
incur losses.  At September 30, 2004, the Company had a working
capital deficiency of $5,121,092, including a note payable and
accrued interest in the amount of $2,959,332 due in January 2005.
The future of the Company is dependent upon its ability to
maintain the continued financial support of the note holder, and
obtain adequate additional financing to fund the development of
commercial operations.  Those factors caused Genoil's auditors to
express doubt about the company's ability to continue as a going
concern.


GLOBAL LEARNING: Plan Confirmation Hearing Set for Mar. 3
---------------------------------------------------------
The Honorable Paul Mannes of the U.S. Bankruptcy Court for the
District of Maryland will convene a confirmation hearing on March
3, 2005, at 10:00 a.m. to consider the merits of the Amended Plan
of Reorganization proposed by GlobalLearning Systems.com, Inc.,
and Keystone Learning System.

Judge Mannes approved the Debtors' Amended Disclosure Statement on
Jan. 7, 2005.

                        About the Plan

The Plan provides for the substantive consolidation of the Debtors
for distribution purposes.  Upon confirmation, Keystone Learning
will become a division of Global Learning.

The Plan provides, among others:

     -- Full payment to:

          * administrative claims;
          * priority claims; and
          * secured claims

        on the Effective Date.

     -- Priority tax claims will be paid over a six-year period
        with a 7% interest;

     -- Wage claim holders will receive 50% of their claims on
        the Effective Date, with the balance paid over a four-
        month period;

     -- Wachovia Bank will receive a $500,000 note and 1/3 of
        the stock in the Reorganized Global Learning;

     -- General Unsecured creditors are expected to recover 10%
        of their claims plus a pro rata share from the Makau
        litigation.

                About the Makau Litigation

Keystone and Global Learning seek injunctive and monetary
relief against the Makau Corporation, et. al, based upon their
misappropriation of Keystone trade secrets, copyright
infringement, civil conspiracy, tortious interference with
contract, tortious interference with prospective economic
relations and conversion.  In addition, Keystone and Global
assert numerous bankruptcy causes of action against the
Defendants.  Expected monetary damages is at least $1,000,000.

Based in Frederick, Maryland GlobalLearning Systems.COM offers a
library of over 1,200 courses through its Keystone subsidiary in
VHS, CDROM, DVD and server format to home and business computer
users, software developers and network professionals.  Keystone
provides training products to more than 420 of the Fortune 500
companies.  GLS.COM also develops customized learning content,
enterprise knowledge management software and comprehensive
training support services for corporate and government clients
through GLS.

On June 6, 2003 GLS and Keystone filed a petition for relief under
chapter 11 of Title 11 of the United States Code in the Bankruptcy
Court for the District of Maryland, Greenbelt Division (Bankr. D.
Md. Case No. 03-30218).  GLS and Keystone are debtors-in-
possession, and therefore have retained control of their
businesses and assets.  Both companies expect to emerge as
dominate players in the rapidly expanding computer and Web-based
training arena.  When Global filed for protection, it estimated
assets of more than $50,000,000 and estimated debts of
$50,000,000.


GLOBAL LEARNING: Dismissal Hearing Continued to March 3
-------------------------------------------------------
After more than seven months since the U.S. Trustee for Region 4
asked the U.S. Bankruptcy Court for the District of Maryland to
dismiss the chapter 11 cases of Global Learning Systems, Inc., and
its debtor-affiliate, the Court has yet to rule on the request.

The Court says it'll revisit the U.S. Trustee's request at a
hearing on March 3, 2005 -- if the company can't obtain
confirmation of its proposed chapter 11 plan.

The U.S. Trustee asked the Court, on June 3, 2004, to dismiss the
chapter 11 cases or convert them to chapter 7 proceedings when the
Debtors failed to file monthly operating reports.  The U.S.
Trustee also alleged that the Debtors failed to pay their 2003
fourth quarter unemployment taxes.

Although the U.S. Trustee believed the failure to file MORs casts
doubt on the Debtors' ability to file an adequate Disclosure
Statement, the Court approved the Debtors' Amended Disclosure
Statement on Jan. 7, 2005.

Headquartered in Frederick, Maryland, Global Learning Systems,
Inc., is improvement solutions company.  The Company and its
debtor-affiliates filed for chapter 11 protection June 6, 2003
(Bankr. Md. Case No. 03-30218).  Brent C. Strickland, Esq., at
Whiteford, Taylor & Preston LLP, represents the Debtors in their
restructuring efforts.  When the Company filed for protection from
its creditors, it listed assets of over a million and debts of
more than $10 million.


HEALTH NET: Names Stephen Lynch Pres. of Largest Health Plan Unit
-----------------------------------------------------------------
Health Net, Inc. (NYSE:HNT) appointed Stephen Lynch as president
of Regional Health Plans and Health Net of California, the
company's largest health plan subsidiary.

Mr. Lynch now assumes day-to-day control of the company's Western
Division, incorporating both its California and Oregon health
plans.  He was named chief operating officer, Western Region in
June 2004.  Mr. Lynch joined the company in August 2001 as
president of Health Net of Oregon.  In his new role he will report
to Jay Gellert, president and chief executive officer of Health
Net.

"Steve did an outstanding job in Oregon and he's had a very real
impact on California in just a few short months.  We are pleased
he now has the reins and look forward to further operating
improvements in both California and Oregon under his capable
leadership," Mr. Gellert said.

Health Net, Inc. -- http://www.healthnet.com/-- is among the
nation's largest publicly traded managed health care companies.
Its mission is to help people be healthy, secure and comfortable.
The company's HMO, POS, insured PPO and government contracts
subsidiaries provide health benefits to approximately 6.5 million
individuals in 27 states and the District of Columbia through
group, individual, Medicare, Medicaid and TRICARE programs.
Health Net's subsidiaries also offer managed health care products
related to behavioral health and prescription drugs, and offer
managed health care product coordination for multi-region
employers and administrative services for medical groups and self-
funded benefits programs.

                          *     *     *

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

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


HIGH VOLTAGE: Wants to Hire Akin Gump as Bankruptcy Counsel
-----------------------------------------------------------
High Voltage Engineering Corporation and its debtor-affiliates ask
the U.S. Bankruptcy Court for the District of Massachusetts for
permission to employ Akin Gump Strauss Hauer & Feld LLP, as their
general bankruptcy counsel.

Akin Gump is expected to:

   a. render legal advice with respect to the powers and duties of
      the Debtors as debtors in possession in the continued
      operation of  their business and management of their
      properties;

   b. negotiate, prepare and file a plan of reorganization and
      disclosure statement in connection with that plan, and
      promote the financial rehabilitation of the Debtors;

   c. take all necessary action to protect and preserve the
      Debtors' estates, including:

        (i) the prosecution of actions on the Debtors' behalf and
            the defense of any actions commenced against the
            Debtors,

       (ii) negotiations concerning all litigation in which the
            Debtors are or become involved, and

      (iii) the evaluation and objection to claims filed against
            the estates;

   d. prepare, on behalf of the Debtors, all necessary
      applications, motions, answers, orders, reports and papers
      in connection with the administration of the Debtors'
      estates, the sale of the Debtors' assets, and appear on
      behalf of the Debtors at all Court hearings in connection
      with the Debtors' chapter 11 cases;

   e. represent the Debtors as may be necessary in proceedings
      that may arise in foreign jurisdictions;

   f. attend meetings and negotiate with representatives of
      secured creditors, committees, the Office of the U.S.
      Trustee and other parties-in-interest and respond to
      creditor inquiries and advise and consult the Debtors on the
      conduct of the cases, including all of the legal and
      administrative requirements of operating in chapter 11;

   h. perform all other necessary legal services to the Debtors in
      connection with their chapter 11 cases.

S. Margie Venus, Esq., a Partner at Akin Gump, is the lead
attorney for the Debtors.  Ms. Venus discloses that the Firm
received a $500,000 retainer.  Ms. Venus will bill the Debtor $625
per hour for her services.

Ms. Venus reports Akin Gump professionals bill:

    Designation            Hourly Rate
    -----------            -----------
    Partners and Counsel   $285 - $775
    Associates             $160 - $450
    Paralegals              $95 - $195

Akin Gump assures the Court that it does not represent any
interest adverse to the Debtors or their estates.

Headquartered in New Kensington, Pennsylvania, High Voltage
Engineering Corporation -- http://www.asirobicon.com/-- 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.  The
Company and its debtor-affiliates filed for chapter 11 protection
on February 8, 2005 (Bankr. D. Mass. Case No. 05-10787).  When the
Debtors filed for protection from their creditors, they listed
total assets of $457,970,00 and total debts of $360,124,000.


HIGH VOLTAGE: Look for Bankruptcy Schedules by Mar. 25
------------------------------------------------------
High Voltage Engineering Corporation and its debtor-affiliates ask
the U.S. Bankruptcy Court for the District of Massachusetts for
more time to file their Schedules of Assets and Liabilities,
Statements of Financial Affairs, Schedules of Executory Contracts
and Unexpired Leases and Lists of Equity Security Holders.  The
Debtors want until March 25, 2005 to file those documents.

The Debtors explain that in order to prepare the Schedules and
Statements, the Debtors must gather information from books,
records, and documents relating to claims, contracts, leases,
independent contractor agreements, and holders of equity
securities.  Consequently, collection of the information necessary
to complete the Schedules and Statements will require an
expenditure of substantial time and effort on the part of the
Debtors' employees.

The Debtors add that in view of the amount of work involved, and
the simultaneous demands on their employees to assist in efforts
to stabilize their business operations during the initial post
petition period, the Debtors are unlikely to complete and file the
Schedules and Statements within the 15-day deadline after the
Petition Date.

The Debtors assure the Court that the requested extension will
give them more time to mobilize their employees in working
diligently to prepare and complete the Schedules and Statements on
or before the requested extension deadline.

Headquartered in New Kensington, Pennsylvania, High Voltage
Engineering Corporation -- http://www.asirobicon.com/-- 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.  The
Company and its debtor-affiliates filed for chapter 11 protection
on February 8, 2005 (Bankr. D. Mass. Case No. 05-10787).  S.
Margie Venus, Esq., at Akin Gump Strauss Hauer & Feld LLP,
represent the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
total assets of $457,970,00 and total debts of $360,124,000.


HOLLY ENERGY: Moody's Puts Ba3 Rating on $150MM Sr. Unsec. Notes
----------------------------------------------------------------
Moody's assigned first-time public ratings for Holly Energy
Partners, L.P., a Ba3 senior implied rating, a Ba3 rating for a
pending $150 million of 10-year senior unsecured notes, and an
SGL-3 liquidity rating.

Holly Energy is a public master limited partnership that operates
an integrated system of refined petroleum product pipelines and
distribution terminals formerly owned by unrated Holly
Corporation.  The system operates primarily in West Texas, New
Mexico, Utah, and Arizona.  Holly Corp. indirectly holds 51% of
Holly Energy's equity, consisting of 49% of Holly Energy's limited
partnership units plus Holly Energy's 2% general partner interest.

The rating outlook is stable.

However, to avoid a future prompt notching down of the note rating
to one level below the then prevailing senior implied rating,
Holly Energy needs to:

   1) avoid senior secured revolver borrowings exceeding $25
      million,

   2) reduce such borrowings to no more than $10 million for a
      consecutive 30 days annually and,

   3) if higher levels of senior secured debt are incurred to fund
      acquisitions, Holly Energy needs to refinance that debt
      within roughly 30 days with equity and or senior unsecured
      debt ranking no more than pari passu with the rated notes.

The secured debt carveouts language in the note indenture permits
up to $110 million of senior secured debt.  However, Holly
Energy's current clearance under its entire proposed indenture
covenants currently permits as much as $200 million of senior
secured debt.

Note proceeds will fund Holly Energy's pending $150 million
acquisition of four refined products pipelines from Alon USA, Inc.
(rated B2 senior implied; stable outlook) aggregating
approximately 500 miles, plus an associated tank farm and two
refined products terminals with total storage capacity in the
range of 347,000 barrels.

Holly Energy estimates that the Alon USA assets will generate
approximately $16.5 million of annual EBITDA.  Compensation to
Alon includes $120 million in cash and issuance of 937,500 Holly
Energy subordinated Class B limited partnership units.  Moody's
also anticipates that in the near-term, Holly Energy will acquire
two 65 mile intermediate product pipelines connecting the two main
units of Holly Corp.'s main Navajo refinery in New Mexico. Navajo
consists of one unit in Artesia and one in Lovington, New Mexico.

The ratings are supported by the expected comparative stability of
Holly Energy's pro-forma cash flow (95% of revenue is generated on
long-term contracts); minimum contracted revenues to mitigate
scheduled and unscheduled shipper refinery downtimes; a degree of
risk diversification in that cash flow to product markets,
pipeline operating risks, and exposure to two main shippers; and
acceptable financial leverage relative to cash flow and the
balance sheet.

The ratings also reflect the vital nature of ' Holly Energy's
assets to two adequately long-term competitive southwestern
refineries in moving their production to market; Holly Corp.'s
highly profitable history and currently very strong and liquid
balance sheet; the tight historical logistical fit of the combined
pipeline and terminal system in serving refiners and consumers in
the region; a potential expansion of Holly Corp.'s main refinery
(the main shipper on Holly Energy's lines); and a solid growth
outlook for refined product in the region.

The ratings are restrained by:

   1) the fact that, as an MLP, Holly Energy will routinely payout
      virtually all free cash flow to unit holders;

   2) acquisition and funding risks associated with Holly Energy's
      growth effort;

   3) reliance on Holly Corp. for 54% and Alon USA for 34% of
      Holly Energy EBITDA;

   4) the risk of curtailed pipeline throughput due to unscheduled
      refinery downtime at Holly Corp. or Alon USA;

   5) the looming risk of volume competition in the El Paso and
      Arizona markets from the Longhorn pipeline;

   6) the risk of reduced refining margins, profitability and
      credit strength at Holly Corp. and Alon due to volume
      competition from Longhorn; and

   7) the fact that Holly Corp. is exposed to a $150 million civil
      lawsuit by Frontier Oil (Ba3 senior implied) whom Holly
      Corp. has counter-sued for $145 million.

Effectively, Holly Energy conducts most of the lowest business
risk functions of Holly Corp. and Alon USA(transporting relatively
durable production volumes for a fee), leaving the highest risk
refining activities and margin exposures with HOC and Alon.

Absent force majeure or serious damage to the economic viability
of either HOC's Navajo complex (75,000 barrels/day; 10.0 Nelson
Complexity Index rating) or Alon USA's Big Spring refinery (65,000
barrels/day; 10.4 Nelson Complexity Index), Holly Energy benefits
from Holly Corp.'s and Alon's minimum revenue and volume
commitments, and Holly Energy's expected higher levels of
throughput would generally not be very sensitive to volatile crack
spreads and refining margins at either refinery.

Holly Energy's pro-forma EBITDA will be generated 42% by
contracted throughput from Holly Corp., 34% from contracted
throughput of Alon USA (70% of Alon's total production), 9% from
BP, 12% from intermediate product pipelines, and 3% from other
activity. Approximately 85% of total EBITDA would be generated on
minimum throughput guarantee or capacity payments.

Further important ratings restraints reside in the overlap of the
regional competitive situation with the contract-out terms granted
to Holly Corp. and Alon USA.  With 12 months notice, Holly Corp.
could abrogate its minimum revenue commitments under their shipper
contracts if they decided to close the Navajo or Big Spring
refinery, respectively.

This is a very significant contract-out for Holly Corp. and Alon
USA in the event of a catastrophic event at either refinery or if
Longhorn Pipeline ended up damaging either refineries viability.
However, this risk currently appears to be adequately reflected in
the Ba3 ratings.  Holly Energy and its shippers have sufficient
staying power over the intermediate term and also appear to have
cost structures that make them more regionally competitive than at
least one of the region's least competitive refineries.

This is indicated by a number of considerations, some of which
include:

   1) the already currently negative spread between refined
      product prices in West Texas and prices along the Gulf Coast
      adjusted for pipeline tariffs to move Gulf Coast production
      through Longhorn Pipeline from its Gulf Coast origination
      point to its El Paso, Texas terminus,

   2) the fact that the Navajo and Big Spring refineries have
      degrees of flexibility to move meaningful amounts of their
      production away from West Texas,

   3) the near-term difficulty Longhorn is having finding product
      takers on the El Paso, Texas end of its pipeline, and

   4) and the fact that 9% of HEP EBITDA is generated under a
      long-term contract with BP.

In Moody's view, Longhorn eventually will connect with expanded
pipelines into the Southwest and become more of a margin force in
the region.  However, it appears that at this point, this would
suppress margins regionally but not drive them to levels
imperiling the Navajo refinery.  To a somewhat lesser degree,
Moody's believes that to be the case for the Big Spring refinery
too.

It appears to be more likely that Holly Energy could incur a
degree of throughput decline to the Southwest, some of which would
then eventually be diverted on Holly Energy 's lines to the north
into Colorado and northeast into the MidContinent region, and that
the Alon and Holly Corp. refineries would incur a survivable
downward adjustment in normalized regional margins.

The ratings are also supported by a generally supportive near-term
outlook for refining margins, the balance sheet benefits of Alon
USA's solid up-cycle performance, the credit strength of BP, and
the diversified markets across the Southwest, lower Rocky
Mountain, and northern Mexico regions served by Holly Energy's
system.  The Holly Energy system is also strategically positioned
to carry product volumes produced by more distant refineries
seeking to distribute product to the region's markets.

Holly Corp. is generating very strong up-cycle margins and holds
more than $200 million in cash balances.  Alon is in an up-cycle
strengthening mode, though it (as well as Holly Corp.) also
remains acquisitive.  Holly Corp. also has the flexibility to run
nearly 100% sour crude oil, which substantially enhances its
margins when crude quality price differentials are, as now,
particularly wide.

Pro-forma Debt/EBITDA appears to be in the 3.0x range and
EBITDA/Interest appears to be in the 4.5x to 6x range (depending
on final note coupon and EBITDA performance). Using Holly Energy's
higher EBITDA estimate, interest coverage could be in the 6x
range.

Including only the Alon USA acquisition, pro-forma debt at January
31, 2005 would be $150 million and equity would approximate $87
million. Pro-forma for the pending acquisition from Alon, annual
EBITDA would appear to be in the range of $50 million. During the
nine months ended September 30, 2004, Holly Energy generated
EBITDA (pro-forma only for the spin-off of assets from Holly Corp.
to Holly Energy) of approximately $26 million, or an annualized
$34.6 million.

If Holly Energy completes an approximately $60 million acquisition
of intermediate product pipelines from HOC, EBITDA would increase
approximately by another $6 million to $7 million. HEP states it
would finance the potential acquisition of the Holly Corp. lines
50% with equity units and 50% with debt in the form of an add-on
to the senior unsecured notes.

The SGL-3 liquidity rating indicates that over the next four
quarters Moody's expects adequate liquidity coverage of all
budgeted outlays. We see adequate coverage by roughly $50 million
of EBITDA and $13 million in pro-forma cash balances, of interest
expense in the range of $10 million, less than $5 million of
maintenance capital spending, roughly $39 million in cash
distributions, and less than $5 million of other outlays. However,
the SGL-3 rating also reflects expected very good back-up
liquidity coverage under an initially largely undrawn $100 million
secured bank revolver and adequate bank covenant coverage. Bank
covenant coverage may improve once pending amendments are executed
as discussed below. Alternative liquidity coverage is deemed to be
weak since all assets are pledged to the bank revolver.

Holly Energy's $100 million senior secured revolver (3.5 years
remaining to maturity) contains three main financial covenants.
Coverage of interest expense by EBITDA must exceed 3.5x, though a
pending amendment would relax that to 3.0x.  Debt cannot exceed
3.5x EBITDA, though a pending amendment would relax that to 4.0x.

Minimum tangible net worth must exceed $45 million plus 50% of
equity proceeds, though a pending amendment will relax that test
to accommodate a substantial expected reduction in HEP's book
equity if it acquires the Navajo intermediates pipelines from HOC.
That acquisition would be treated as a drop down of assets between
related entities.

Holly Corporation, Holly Energy's sponsor and General Partner,
carries a strong balance sheet after $112 million of 2003 and $193
million of 2004 EBITDA that amply covered capital spending,
working capital needs, and negligible interest expense. As of
year-end 2004, Holly Corp. appears to carry just under $200
million in cash and equivalents, only $25 million in debt, and
$350 million in book equity.  Moody's does expect capital spending
needs to rise in 2005 and 2006 to roughly $90 million and $65
million, respectively, as HOC completes is low sulfur fuels
spending and pursues value adding projects.

Holly Energy Partners, L.P., is headquartered in Dallas, Texas.


INTERSTATE BAKERIES: Amends DIP Financing Agreement with JPMorgan
-----------------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission, Interstate Bakeries Corporation and its debtor-
affiliates disclose that they entered into a Second Amendment to
the DIP Agreement with JPMorgan Chase Bank, as Agent, on Jan. 28,
2005.

The parties have amended the DIP Agreement to provide that the
Debtors will have until May 28, 2005, to deliver to the Lenders a
projected operating budget that details on a monthly and
quarterly basis the Debtors' anticipated cash receipts and
disbursements from that date until the maturity date of the DIP
Agreement.  The Debtors also will have until Oct. 4, 2005, to
deliver updated quarterly budgets to the Lenders, beginning with
the fiscal quarter ended Aug. 20, 2005.  The Second Amendment
sets forth specified limitations on the Debtors' ability to make
capital expenditures in the fiscal quarters ended March 5, 2005,
and May 28, 2005:

        Fiscal Quarter Ending    Maximum Capital Expenditures
        ---------------------    ----------------------------
          March 5, 2005                  $12,500,000
          May 28, 2005                     9,400,000

Furthermore, the Second Amendment specifies minimum Cumulative
Consolidated EBITDA amounts for monthly periods beginning
February 5, 2005, and ending on May 28, 2005:

                                  Cumulative Consolidated
        Fiscal Period Ending              EBITDA
        --------------------      -----------------------
             02/05/2005                   $500,000
             03/05/2005                    500,000
             04/02/2005                 (2,500,000)
             04/30/2005                 (5,500,000)
             05/28/2005                   (500,000)

             Deadline to Challenge Obligations Extended

The Debtors, the Official Committee of Unsecured Creditors, the
Official Committee of Equity Security Holders, JPMorgan, and U.S.
Bank National Association, as Indenture Trustee on behalf of the
holders of 6.0% Senior Subordinated Convertible Notes due
August 15, 2014, agree to extend the deadline for the Debtors,
any Committee, the Indenture Trustee and each of the Noteholders
to challenge the validity, enforceability, or priority of the
Debtors' prepetition obligations to April 22, 2005.  The March 2,
2005, deadline for all other parties-in-interest remains
unchanged.

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

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


JARDEN CORP: Moody's Pares Rating on Sr. Sub. Notes to B3 from B2
-----------------------------------------------------------------
Moody's Investors Service downgraded the rating on Jarden
Corporation's senior subordinated notes to B3 and assigned a
definitive rating of B1 on its $1,050 million loan facility.  The
ratings on the refinanced bank facilities have been withdrawn.
The outlook for the ratings is stable.  This concludes the review
for possible downgrade that commenced on September 27, 2004.

Moody's initiated the review and assigned a prospective rating of
B1 on the new loan facility at the time the acquisition of
American Household, Inc., and new the financing, were announced.
The acquisition of American Household has been completed under
substantially the same terms.

The downgrade reflects the risks associated with the large,
primarily debt financed, acquisition in terms of integration
challenges and weaker credit metrics.  American Household has been
a distressed company and turning around the performance of its
brands will be a challenging task for Jarden Corp.  The American
Household transaction is the Company's most ambitious to date as
combined annual revenues will be approximately $2.7 billion,
roughly triple Jarden's pre-acquisition annualized revenues of
about $900 million.

The company's present products tend to have large, or even
dominant, market shares, while some of American Household's
products are more disparate and face greater competition. The
ratings also recognize the lack of coverage on a tangible asset
basis and the potential for enterprise value to erode in a
distress scenario.

The proforma debt / EBITDA was approximately 3.5 times at closing.
The ultimate de-leveraging of the company to the targeted level of
under 3.0 X is dependent on operating margin improvement, as well
as on sales growth.  Moody's believes that American Household's
recent relatively low EBIT margins can be improved upon, but it is
noted that this improvement may be slower than management
anticipates given the large number of products involved.  Jarden
Corp.'s planned cost synergies are projected to produce rapid EBIT
margin improvement back to historical levels in a 3 to 5 year
period.

The ratings and the stable outlook are supported by the highly
recognized brands, those already owned by Jarden Corp. as well as
those being acquired, management's proven track record in
integrating previous acquisitions, the new $350 million equity
capital invested by Warburg Pincus and Catterton, the limited
cyclicality inherent in these brands, and the increased product
diversification.

A ratings upgrade could occur once a successful integration of
American Household's operations is evidenced, operating margin
improves to at least 10%, free cash flow / debt increases to at
least 10%, and debt / EBITDA declines to below 3.0 times.
However, negative rating action could ensue if Jarden Corp.
engages in additional material leveraged transactions, experiences
a prolonged slump in operating margins, or encounters integration
problems.

The B1 rating on the new $1,050 million senior secured bank
facilities recognizes that these facilities are senior, are
guaranteed by domestic and foreign subsidiaries, and are secured
by all of the assets and properties of the borrower and
guarantors.

The credit agreement includes covenants concerning maximum total
leverage, maximum senior debt leverage, minimum fixed charge
coverage, and maximum capital expenditures which have been set at
levels that Moody's finds prudent, while providing sufficient
flexibility.

The ratings downgraded are:

   * Senior implied rating to B1 from Ba3;

   * $180 million 9-_% senior subordinated notes, due 2012, to B3
     from B2;

   * Issuer rating to B2 from B1

The ratings assigned definitively are:

   * $850 million senior secured term loan facility, due 2012 --
     B1;

   * $200 million senior secured revolving credit facility, due
     2010 -- B1

The ratings withdrawn are:

   * $50 million senior secured term loan A, due 2007 of Ba3;

   * $150 million senior secured term loan B, due 2008 of Ba3;

   * $100 million senior secured add-on term loan B, due 2008 of
     Ba3;

   * $70 million senior secured revolving credit facility, due
     2007 of Ba3;

The outlook is stable.

Headquartered in Rye, New York, Jarden Corporation is a global
provider of market leading branded consumer products used in and
around the home marketed under well-known brands including Ball(R)
Bee(R), Bicycle(R), Campingaz(R), Coleman(R), Crawford(R),
Diamond(R), First Alert(R), FoodSaver(R), Forster(R), Health o
meter(R), Hoyle(R), Kerr(R), Lehigh(R), Leslie-Locke(R), Loew-
Cornell(R), Mr. Coffee(R), Oster(R), Sunbeam(R) and VillaWare(R).
Jarden operates through four business segments: Branded
Consumables, Consumer Solutions, Outdoor Solutions and Other.
Jarden Corp., has over 9,000 employees worldwide.


KMART CORP: ESL Companies Swap Kmart Options for Sears Options
--------------------------------------------------------------
James F. Gooch, Vice President and Controller of Kmart Holding
Corporation informs the Securities and Exchange Commission that on
January 31, 2005, Kmart entered into an agreement with Sears
Holdings Corporation, and the ESL Companies composed of ESL
Partners, L.P., ESL Investors, L.L.C., ESL Institutional Partners,
L.P. and CRK Partners II, L.P.  The ESL Companies are controlled,
directly or indirectly, by ESL Investments, Inc., which in turn is
controlled by Edward S. Lampert, the Chairman of Kmart.

Pursuant to the Agreement, the ESL Companies converted, in
accordance with the terms of the notes, all of Kmart's outstanding
9% convertible subordinated notes into an aggregate of 6,269,998
shares of Kmart common stock, plus cash in lieu of fractional
shares.  In consideration of this conversion, the ESL Companies
received an aggregate payment from Kmart of $3.3 million in cash.
This cash payment is approximately equivalent to the discounted,
after-tax cost of the future interest payments that would have
otherwise been paid by Kmart to the ESL Companies in the absence
of the conversion.  The conversion is calculated by multiplying
the present value of the interest payments by one less an assumed
effective tax rate for Kmart.

The Agreement also provides that the options to acquire shares of
common stock of Kmart, which were issued pursuant to an investment
agreement, dated as of January 24, 2003, as amended, among ESL
Investments, Inc., and Third Avenue Trust, on behalf of its
investment series, will be exchanged for options to acquire the
same number of shares of common stock of Holdings at the same
exercise price upon consummation of the mergers involving Kmart
and Sears, Roebuck and Co.  The Holdings Options will have the
same terms and conditions as the Investment Options and will
expire, in accordance with their terms, on May 6, 2005.

Kmart's Audit Committee approved the Agreement, as contemplated by
the rules of the NASDAQ Stock Market for related party
transactions, as well as by Kmart's Board of Directors.

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


http://www.sec.gov/Archives/edgar/data/1229206/000095012305001219/y05213kexv99w1.htm

                   Sears' Registration Statement

Sears Holdings Corporation has filed a Registration Statement on
Form S-4 with the Securities and Exchange Commission, containing a
preliminary joint proxy statement-prospectus regarding the
proposed transaction.  Stockholders are urged to read the
definitive joint proxy statement-prospectus regarding the proposed
transaction when it becomes available, because it will contain
important information.  Stockholders will be able to obtain a free
copy of the definitive joint proxy statement-prospectus, as well
as other filings containing information about Sears Holdings
Corporation, Kmart and Sears, without charge, at the SEC's
Internet site http://www.sec.gov/ Copies of the definitive joint
proxy statement-prospectus and the SEC filings that will be
incorporated by reference in the definitive joint proxy statement-
prospectus can also be obtained, without charge, by directing a
request to:

      Kmart Holding Corporation
      3100 West, Big Beaver Road
      Troy, Michigan, 48084
      Attention: Office of the Secretary

           -- or --

      Sears, Roebuck and Co.
      3333 Beverly Road
      Hoffman Estates, Illinois, 60179
      Attention: Office of the Secretary

Information regarding Sears Holdings' proposed directors and
executive officers, Kmart's and Sears' directors and executive
officers and other participants in the proxy solicitation and a
description of their direct and indirect interests, by security
holdings or otherwise, is available in the preliminary joint proxy
statement-prospectus contained in the Registration Statement on
Form S-4.

A full-text copy of Sears' Registration Statement is available for
free at:


http://sec.gov/Archives/edgar/data/1310067/000104746905001969/a2149339zs-4a.htm

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)


LEHMAN BROTHERS: S&P Slices Rating on Class L Certificates to BB+
-----------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on seven
classes of Lehman Brothers Floating Rate Commercial Mortgage
Trust's multiclass pass-through certificates from series
2003-LLF C2.  Concurrently, the rating on one class is lowered,
and ratings are affirmed on the eight remaining classes from the
same transaction.

The raised and affirmed ratings reflect previous and expected
paydowns of the transaction's certificate balance. The lowered
rating primarily reflects the operating performance decline in the
largest loan from Standard & Poor's adjusted net cash flow -- NCF
-- levels at issuance.

The current in-trust principal balance of the pool is
$795.6 million, compared to $1.2 billion at issuance, which
represents a principal reduction of 34%.  The 11 loans are all
one-month LIBOR-based adjustable loans, down from 17 loans at
issuance.  Additionally, four of the remaining loans have A/B note
structures with B notes held outside the trust totaling
$34.1 million.

Finally, three other loans have mezzanine debt totaling
$146.6 million.

The master servicer, Midland Loan Services L.P., provided
Dec. 31, 2003, NCF debt service coverage -- DSC -- figures for the
11 loans.  Based on this information, Standard & Poor's calculated
a weighted average DSC for the pool of 4.27x, down from 4.92x at
issuance.  To date, the trust has experienced no losses and all of
the loans are current.  The property type and geographic
concentration is similar to issuance levels.  Property types
accounting for more than 10% of the pool balance are:

            * lodging (50%),
            * office (29%), and
            * retail (19%)

while the trust collateral is located across 13 states with
Florida (37%) and Illinois (26%) accounting for more than 10% of
the pool balance.

Per Midland, four loans ($176.2 million, 22%) are expected to pay
off in the near term, which will leave a pool of seven loans
($619.4 million).  Additionally, only one loan, which is discussed
below, will have mezzanine debt outstanding after the payoffs
occur.  The anticipated loan payoffs were factored into the
revised ratings.

The largest loan, comprising the cross-defaulted and
cross-collateralized Walt Disney World Swan and Dolphin mortgages,
has a current in-trust and whole loan balance of $295.1 million
(37%).  The collateral properties are two, full-service resort
convention hotels located within the Epcot Resorts Area of Walt
Disney World, with 2,267 total rooms and 329,000 square feet (sq.
ft.) of interior meeting, banquet, and convention space.  The
renovation of the guestrooms in both hotels has been completed,
while property renovations scheduled for completion in 2005
include the presidential suites, the corridors, and the addition
of an 11,000-sq.-ft. spa.  Because of the lodging market's general
decline and the assets' reliance on vacation travelers to Walt
Disney World, property performance has declined substantially from
Standard & Poor's adjusted NCF at issuance.  Although property
performance has improved in 2004, it is still significantly lower
than Standard & Poor's adjusted NCF at issuance.  Standard &
Poor's assumed occupancy and revenue per available room -- RevPAR
-- at issuance was 75% and $141.00, respectively.  For the
trailing 12 months ending Nov. 30, 2004, occupancy and RevPAR were
72% and $121.19, respectively.  NCF during the period fell 32% as
compared to Standard & Poor's adjusted NCF at issuance.  Based
primarily on recent performance, advanced bookings, and budget
projections, occupancy and RevPAR of 75% and $130.95,
respectively, are expected by Standard & Poor's along with an
adjusted NCF that is 18% below issuance levels.  Further
downgrades in the transaction may be necessary if projected
performance improvements in 2005 are not achieved.  The loan is
scheduled to mature Sept. 13, 2005, with various extensions
limited to 43 months unless any casualty extensions are exercised,
at which time the loan can be extended by 60 months.

The One IBM Plaza loan is the second-largest loan with a current
in-trust and whole loan balance of $130.2 million (16%).  In
addition to the mortgage, there is mezzanine debt of $64.8 million
outstanding. The collateral property is a 1.4 million sq. ft.,
52-story office building and adjoining 11-story, 902-space parking
garage.  The collateral spans one city block located at 330 North
Wabash Avenue in Chicago, Ill. along the north bank of the Chicago
River.  The occupancy, as of Sept. 30, 2004, was 88%. However, IBM
stated it would not renew its lease on 280,670-sq.-ft. (21%) at
its lease expiration on Aug. 31, 2006.  According to REIS, market
vacancy is 18%, with an average net lease rate of approximately
$15 per sq. ft.  IBM's space is leased at below market levels.
Annualized NCF for the nine months ending Sept. 30, 2004,
increased by 18% compared to Standard & Poor's adjusted NCF at
issuance.  The loan matures March 9, 2006 with two, one-year
extensions available.

The Bingham Office Center loan is the seventh-largest loan, and
currently has an in-trust balance of $24.4 million (3%) and a
whole loan balance of $29 million.  The collateral property is a
522,346-sq.-ft. suburban office building in Bingham Farms, Mich.,
which is approximately 20 miles northwest of Detroit.

The occupancy, as of Sept. 30, 2004, was 68%, which is well below
market occupancy of 81% per REIS.  The borrower cited poor market
conditions as the source of the property's poor performance.
Despite the deteriorating performance, annualized NCF for the same
period was relatively flat at 6% over Standard & Poor's adjusted
NCF at issuance.  The loan matures Sept. 10, 2005, with two,
one-year extensions available.

Standard & Poor's performed a stabilized analysis in order to
revalue the loans.  The revised ratings reflect the resultant
valuations.

                         Ratings Raised

                         Lehman Brothers
            Floating Rate Commercial Mortgage Trust
                    Multiclass Pass-Thru Certs
                        Series 2003-LLF C2

                    Rating        Credit Enhancement
          Class   To      From     (pooled interests)
          -----   --      ----    -------------------
          B       AAA     AA+                 33.91%
          C       AAA     AA                  30.10%
          D       AAA     AA                  27.05%
          E       AAA     AA                  24.38%
          F       AA+     AA-                 20.96%
          G       AA      A+                  17.15%
          H       AA-     A                   13.72%

                         Rating Lowered

                         Lehman Brothers
            Floating Rate Commercial Mortgage Trust
                    Multiclass Pass-Thru Certs
                        Series 2003-LLF C2

                    Rating        Credit Enhancement
          Class   To      From     (pooled interests)
          -----   --      ----    -------------------
          L       BB+     BBB-                 0.00%

                        Ratings Affirmed

                         Lehman Brothers
            Floating Rate Commercial Mortgage Trust
                    Multiclass Pass-Thru Certs
                        Series 2003-LLF C2

                               Credit Enhancement
              Class   Rating   (pooled interests)
              -----   ------   ------------------
              A-1     AAA                 37.34%
              A-2     AAA                 37.34%
              J       A-                   9.53%
              K-1     BBB                  6.84%
              K-2     BBB                  4.95%
              X-1     AAA                    N/A
              X-2     AAA                    N/A
              X-FLP   AAA                    N/A

              N/A - Not applicable.


LEUCADIA NATIONAL: Fitch Lowers Long-Term Issuer Rating to BB+
--------------------------------------------------------------
Fitch Ratings has lowered the long-term issuer rating on Leucadia
National Corporation (Leucadia) to 'BB+' from 'BBB-'.

Additionally, Fitch has lowered the ratings on these obligations
of Leucadia:

    -- Senior notes due 2013 to 'BB+' from 'BBB-';
    -- Senior subordinated notes due 2006 to 'BB' from 'BB+';
    -- Senior subordinated convertible notes due 2014 to 'BB' from
       'BB+';
    -- Junior subordinated deferrable interest debentures due 2027
       to 'BB-'.

The Rating Outlook is revised to Negative from Stable.

Fitch believes that the acquisition of AT&T by SBC Communications
will adversely affect the financial condition of WilTel,
Leucadia's largest subsidiary, and that of Leucadia, as well.
Fitch would expect significant economic impairment to result
should SBC utilize AT&T as its preferred provider rather than
WilTel.  SBC, as WilTel's primary customer, would be difficult to
replace given the capacity excess that exists in the industry.  A
reduction in Leucadia's equity is a likely consequence in Fitch's
view.   Any such writedown of the WilTel investment coupled with
the recent debt increases by the parent make long-term financial
commitments more vulnerable.

Leucadia's parent-company-only debt to capital ratio was
approximately 30% at Sept. 30, 2004.  The ratings changes
incorporate not only Fitch's expectation of a lower investment
value of the telecommunication operations but also the reduced
possibility of favorable cashflow and earnings contributions by
the subsidiary to the consolidated group over time.


LIFESTREAM TECH: Sells Interactive's IP Rights to LifeNexus
-----------------------------------------------------------
Lifestream Technologies, Inc. (OTCBB:LFTC) has assigned the
intellectual property of its subsidiary, Secured Interactive
Technologies, to LifeNexus, Inc.

"We are pleased to have this opportunity to receive a benefit from
the transfer of our smart card technology since our current
resources are being focused on our core business," stated
Christopher Maus, Lifestream's CEO.  "This technology, which has
no material value to the Company, has not been commercialized as
market conditions were not conducive to support the costs related
to an effective rollout.  With national attention focused on
revamping the healthcare information system, we believe this sale
provides the most favorable opportunity for Lifestream and its
shareholders.  LifeNexus has proposed an innovative approach, a
portable medical record in concert with powerful healthcare
financial services, to create a viable opportunity for
commercializing this technology.  We look forward to profiting
from its success."

"I look forward to working directly with LifeNexus to make this
proposition successful.  It brings considerable value to consumers
as it is a universal solution for the portability of medical
records," said Mr. Maus.

Lifestream has entered into an agreement whereby, upon completion
of LifeNexus' financing, Lifestream will receive a 49% equity
position in LifeNexus and rights to the technology will transfer
to LifeNexus.  Mr. Maus is required by LifeNexus to facilitate the
early phase of product development and it has, therefore, entered
into an independent agreement wherein Mr. Maus will receive
compensation as a member of the board of directors of LifeNexus.
No changes are foreseen in his responsibilities at Lifestream.

                        About LifeNexus

LifeNexus, Inc., is a recently organized, privately-held company
focused on the development and marketing of personal healthcare on
a smart card platform incorporating emergency medical information,
emergency medical insurance, accidental life and other financial
products.

                  About Lifestream Technologies

Lifestream Technologies, Inc., developed and currently markets a
line of cholesterol monitors to consumers and healthcare
professionals that provide test results in three minutes.

The Company's product line aids the health conscious consumer in
monitoring their risk of heart disease. By regularly testing
cholesterol at home, individuals can monitor the benefits of their
diet, exercise and/or drug therapy programs. Monitoring these
benefits can support the physician and the individual's efforts to
improve compliance.  Lifestream's products also integrate a smart
card reader further supporting compliance by storing test results
on an individual's personal health card for future retrieval,
trend analysis and assessment.

As of September 30, 2004, Lifestream's stockholders' deficit
widened to $3,763,081, compared to a $2,063,527 deficit at
June 30, 2004.


MADISON RIVER: Earns $7.9 Million of Net Income in Fourth Quarter
-----------------------------------------------------------------
Madison River Capital, LLC (Bond Ticker: MADRIV) released its
unaudited financial and operating results for the fourth quarter
and the year ended Dec. 31, 2004.

       2004 Fourth Quarter Financial & Operating Results

For the fourth quarter ended Dec. 31, 2004, the Company reported
net operating income of $13.7 million, an increase of
$4.6 million, or 50.4%, when compared to net operating income of
$9.1 million in the fourth quarter of 2003.  Revenues in the
fourth quarter of 2004 were $47.5 million, a decrease of $1.3
million, or 2.8%, from revenues of $48.8 million in the fourth
quarter of 2003.  Also, the Company reported net income of
$7.9 million in the fourth quarter of 2004 compared to a net loss
of $2.9 million in the fourth quarter of 2003.

Adjusted Operating Income, previously referred to as Adjusted
EBITDA, is net operating income (loss) before depreciation,
amortization and non-cash long-term incentive plan expenses.
For the fourth quarter ended December 31, 2004, the Company
reported Adjusted Operating Income of $25.5 million, computed by
taking net operating income of $13.7 million, adding depreciation
and amortization expenses of $12.0 million and subtracting the
benefit from reversal of long-term incentive plan expenses of $0.2
million.  Adjusted Operating Income in the fourth quarter of 2003
was $23.2 million, and includes a $0.3 million benefit from
adjustments made to a restructuring accrual to reflect actual
results.  The increase in Adjusted Operating Income in the fourth
quarter of 2004 was $2.3 million, or 10.2% compared to the fourth
quarter of 2003.

As announced previously, the Company incurred damages in September
2004 from Hurricane Ivan at its Alabama rural local exchange
carrier.  The most significant storm-related damages affected
certain outside plant facilities, primarily its transmission and
distribution plant, in the coastal areas.  The Company accrued
$1.7 million in the third quarter of 2004 for storm-related
expenses.  In the fourth quarter of 2004, the Company made
approximately $2.6 million in capital expenditures, primarily to
replace the damaged and destroyed transmission and distribution
facilities.  The Company received authorization from the Alabama
Public Service Commission to accelerate depreciation on its storm-
related capital expenditures completely in the fourth quarter of
2004, and accordingly, the Company recognized an additional $2.6
million in depreciation expense for these capital expenditures.
The Company reported that substantially all anticipated repairs
and replacements were completed by December 31, 2004.

At December 31, 2004, voice access lines disconnected as a result
of the storm were approximately 2,840 lines.  This is an increase
of disconnects of approximately 1,840 voice access lines from
September 30, 2004.  Substantially all of these voice access lines
disconnected are due to damage at the customer premises making the
location unusable or uninhabitable until repairs or rebuilding, if
necessary, can be completed.  The Company believes that these
voice access lines should return to service as repairs and
restorations in this area are completed.

Revenues in the Company's RLEC operations in the fourth quarter of
2004 were $44.7 million compared to $45.5 million in the fourth
quarter of 2003, a decrease of $0.8 million, or 1.8%.  The
decrease is attributed primarily to a $2.1 million decrease in
local service revenues partially offset by a $1.2 million increase
in Internet and enhanced data services revenues and a $0.1 million
increase in miscellaneous telecommunications revenues.  Long
distance revenues were $3.7 million in each comparable period.
The decrease of $2.1 million in local service revenues is
attributable primarily to non-recurring revenues recognized in the
fourth quarter of 2003 from wireless settlements and other carrier
access revenues as well as revenues for updated cost study
filings.  The increase in Internet and enhanced data services
revenues is attributed to the growth in the number of DSL
connections in service.  At December 31, 2004, the RLECs served
39,562 DSL subscribers compared to 24,181 DSL subscribers at
December 31, 2003, an increase of 15,381 connections, or 63.6%.
We believe the growth in DSL connections reflects the strong
market acceptance of the Company's No Limits bundled offering.

Net operating income reported by the RLECs for the fourth quarter
of 2004 was $15.8 million compared to net operating income for the
fourth quarter of 2003 of $12.2 million, an increase of $3.6
million, or 29.7%.  The increase in net operating income is
attributable to a decrease in operating expenses of $4.5 million,
partially offset by the decrease in revenues as discussed above.
Within operating expenses, cost of services in the RLEC operations
increased approximately $0.6 million in the fourth quarter of 2004
compared to the fourth quarter of 2003.  The increase in cost of
services is attributable to general expense increases including a
$0.1 million increase in costs to terminate long distance calls
primarily from an increase in access minutes of use related to the
No Limits package.

Selling, general and administrative expenses in the fourth quarter
of 2004 were approximately $5.0 million less when compared to the
fourth quarter of 2003.  The decrease is attributable primarily to
the nonrecurring accruals in the fourth quarter of 2003 that
resulted in $1.9 million in higher short-term incentive awards and
$1.3 million in potential sales tax liabilities for which no
similar accruals were made in the fourth quarter of 2004.  In
addition, long-term incentive plan expenses were $1.4 million less
in the fourth quarter of 2004 compared to the fourth quarter of
2003.  Depreciation and amortization expenses were $9.2 million in
the fourth quarter of 2004 and $9.3 million in the fourth quarter
of 2003, a change of $0.1 million.  However, depreciation expense
in the fourth quarter of 2004 include a one-time, $2.6 million
depreciation charge for capital expenditures made to repair and
replace certain damaged facilities as a result of the hurricane.
As discussed previously, the Company received authorization from
the Alabama Public Service Commission to accelerate the
depreciation on these capital expenditures completely in the
fourth quarter of 2004.  Excluding this one-time depreciation
charge, depreciation and amortization expenses would have
decreased $2.7 million in the fourth quarter of 2004 when compared
to the fourth quarter of 2003 largely due to certain classes of
assets becoming fully depreciated during 2004.

Interest expense in the RLEC operations decreased $0.8 million, or
9.4%, to $7.8 million in the fourth quarter of 2004 from $8.6
million in the fourth quarter of 2003.  The decrease is
attributable primarily to a lower weighted average balance of
long-term debt outstanding in the fourth quarter of 2004 compared
to the fourth quarter of 2003 as well as a lower weighted average
interest rate.

During the fourth quarter of 2004, the Company recognized an
income tax benefit of $6.6 million.  The income tax benefit was
largely due to the reversal of the Company's valuation allowance
established to reflect the Company's deferred income tax assets at
their net realizable value.  In the fourth quarter of 2003, the
Company recognized an income tax benefit of $2.0 million largely
due to the recognition of income tax benefit of $2.7 million for
two refunds received in a prior year.  The Company recognized the
income tax benefit after being advised that the statute of
limitations for audit adjustments had expired related to these
refunds. In 2004, these refunds were the subject of two erroneous
refund lawsuits filed by the Department of Justice on behalf of
the Internal Revenue Service as discussed below.

Net income in the RLEC operations in the fourth quarter of 2004
increased $9.2 million, or 129.2%, to $16.3 million from $7.1
million in the fourth quarter of 2003.  The increase in net income
reflects the higher net operating income of $3.6 million combined
with a decrease in interest expense of $0.8 million and a $4.7
million increase in the income tax benefit recognized.

For the fourth quarter of 2004, the RLEC operations reported
Adjusted Operating Income of $25.0 million and an Adjusted
Operating Income margin of 56.0%. The Adjusted Operating Income
margin, previously referred to as "Adjusted EBITDA margin", is
computed by dividing the RLEC's Adjusted Operating Income of $25.0
million by the RLEC's revenues of $44.7 million. For the same
quarter of 2003, the RLEC operations reported Adjusted Operating
Income of $22.9 million and an Adjusted Operating Income margin of
50.2%. Adjusted Operating Income in the fourth quarter of 2004 was
$2.1 million, or 9.5%, higher than the fourth quarter of 2003.
Please refer to Footnote 1 - "Non-GAAP Financial Measures" for a
reconciliation of Adjusted Operating Income and Adjusted Operating
Income margin to net operating income (loss) and net operating
income margin, respectively.

As of December 31, 2004, the RLEC operations had 220,774 voice
access and DSL connections in service. This represents an increase
of 10,690 connections, or 5.1%, from the total number of
connections in service at December 31, 2003. The change consisted
of an increase in DSL connections of 15,381, offset by a decrease
in voice access lines of 4,691, or 2.5%. After adjusting for voice
access lines lost due to damages from Hurricane Ivan, the decrease
in RLEC voice access lines was approximately 1,850 lines, or 1.0%.
DSL connections at December 31, 2004 increased 63.6% compared to
DSL connections at December 31, 2003. The Company's penetration
rate for its DSL service as a percentage of primary residential
access lines reached 32.2% at December 31, 2004 compared to 18.5%
at December 31, 2003.

At December 31, 2004, the RLEC operations had 181,212 voice access
lines in service compared to 185,903 voice access lines in service
at December 31, 2003, a decrease of 4,691 lines that is
attributable to the impact of Hurricane Ivan, the loss of primary
voice access lines at Gallatin River Communications and a decrease
in second lines. Hurricane-related damages resulted in a decrease
of approximately 2,840 voice access lines at December 31, 2004.
The 2,840 voice access lines were approximately one-half of the
Company's estimate of 5,700 voice access lines that potentially
could be disconnected as a result of the hurricane as reported for
the third quarter ended September 30, 2004. The Company believes
that these voice access lines should return to service as repairs
and restorations in this area are completed. Primary voice access
lines served by Gallatin River Communications, the Company's
Illinois RLEC, decreased by 2,587 lines in 2004 as this region
continues to deal with weak economic conditions that have
persisted in recent years. Finally, second lines decreased by
1,097 lines from 8,200 second lines in service at December 31,
2003 to 7,103 second lines in service at December 31, 2004. The
decrease in second lines is attributed primarily to customers who
remove second lines when upgrading to the Company's DSL service.

On a sequential quarter basis, voice access and DSL connections in
the RLECs decreased by 250 connections, or 0.1% in the fourth
quarter of 2004. The decrease is attributed to a decrease of
approximately 1,840 voice access lines related to hurricane
damages in the fourth quarter. Of the 220,774 total connections at
December 31, 2004, 120,649 are residential voice access lines,
60,563 are business voice access lines and 39,562 are DSL
connections. The RLEC operations also served 101,469 long distance
accounts at December 31, 2004 for a penetration rate over total
RLEC access lines of 56.0%. In addition, the RLEC operations had
15,593 dial-up Internet accounts at December 31, 2004. RLEC access
minutes of use increased 10.4% in 2004 compared to 2003.

In the fourth quarter of 2004, revenues from edge-out services
were $2.8 million, a decrease of $0.5 million, or 15.5%, from
revenues of $3.3 million in the fourth quarter of 2003. The
decrease is attributed primarily to a decrease in the number of
connections served in the edge-out markets. On a sequential
quarter basis, revenues declined $0.1 million. The Company's edge-
out services incurred a net operating loss of $2.1 million in the
fourth quarter of 2004, an improvement of $1.0 million, or 31.3%,
from a net operating loss of $3.1 million in the same quarter of
2003. The improvement is attributed to a $1.5 million decrease in
operating expenses which includes a $0.6 million decrease in
depreciation and amortization expenses and a $0.1 million decrease
in long-term incentive plan expenses in the fourth quarter of 2004
compared to the fourth quarter of 2003. In addition, operating
expenses in the fourth quarter of 2003 reflect a benefit of $0.3
million for an adjustment made to restructuring accruals where no
comparable adjustment was made in the fourth quarter of 2004. The
net loss in edge-out services was $8.4 million in the fourth
quarter of 2004 and $10.0 million in the fourth quarter of 2003.

Adjusted Operating Income in the edge-out services for the fourth
quarter of 2004 was $0.5 million which is an increase of $0.2
million from the $0.3 million in Adjusted Operating Income
reported in the fourth quarter of 2003. Please refer to Footnote 1
- "Non-GAAP Financial Measures" for a reconciliation of Adjusted
Operating Income to net income (loss).

As of December 31, 2004, the Company's edge-out services served
11,880 voice access lines and 653 high-speed data connections
compared to 14,462 voice access lines and 682 high-speed data
connections as of December 31, 2003. This represents a decrease of
2,582 voice access lines, or 17.9%, and 29 high-speed data
connections, or 4.3%. On a sequential quarter basis for the edge-
out services, voice access lines decreased by 639 lines and high-
speed data connections decreased by 8 connections.

         2004 Year-End Financial and Operating Results

For the year ended December 31, 2004, revenues were $194.4
million, an increase of $8.0 million, or 4.2%, compared to
revenues of $186.4 million in the year ended December 31, 2003.
The RLEC operations reported revenues of $182.5 million and the
edge-out services reported revenues of $11.9 million. RLEC
revenues increased approximately $10.0 million in 2004 compared to
RLEC revenues in 2003. The increase in RLEC revenues is primarily
attributed to a $4.5 million increase in Internet and enhanced
data service revenues, a $3.7 million increase in local service
revenues and a $2.5 million increase in miscellaneous
telecommunication revenues. The increase in Internet and enhanced
data service revenues is attributable to the increase in the
number of DSL connections served in 2004 compared to 2003. We
believe the significant growth in DSL connections in 2004 is the
result of the strong market acceptance of the Company's No Limits
bundle that was introduced in the Company's three largest markets
in the fourth quarter of 2003. The increase in local service
revenues is attributable to an increase in network access revenues
from certain one-time wireless settlements and other carrier
access revenues and settlements for updated cost study filings.
The increase in miscellaneous telecommunication revenues is
attributed to revenues from a special construction project and two
equipment installation projects and lower bad debt expenses. These
increases in revenues were partially offset by a $0.7 million
decrease in long distance revenues. Long distance revenues
decreased primarily as a result of more customers selecting the No
Limits bundle which provides a flat rate charge for long distance
services compared to the higher usage-based charges for these
customers in the prior year. For the year ended December 31, 2004,
revenues from edge-out services decreased $2.0 million, or 14.6%,
compared to the same period in 2003. The decrease is attributed
primarily to the decrease in the number of voice access lines and
high-speed data connections in service during the year.

Net operating income for 2004 was $54.3 million, an increase of
$11.8 million, or 27.6%, from net operating income of $42.5
million in 2003. Net operating income in the RLEC operations was
$64.1 million and $54.5 million in 2004 and 2003, respectively,
representing an increase of $9.6 million or 17.6%. The increase in
net operating income for the RLECs is attributed to the $10.0
million increase in RLEC revenues partially offset by a $0.4
million increase in operating expenses. In the RLEC operations,
depreciation and amortization expense in 2004 was $3.7 million
lower than 2003. Included in depreciation and amortization
expenses for 2004 is the one-time depreciation charge of $2.6
million from storm-related capital expenditures. Excluding this
charge, depreciation and amortization expenses would have
decreased by approximately $6.3 million. Cost of services in the
RLEC operations increased approximately $8.3 million in 2004
compared to 2003. The increase in cost of services includes
approximately $1.7 million in expenses related to storm-related
repairs and restoration. Expenses for DSL modems used in the RLEC
operations were approximately $0.5 million higher in 2004 when
compared to 2003 as DSL modems were capitalized in the first six
months of 2003. In addition, costs to terminate long distance
calls attributable primarily to an increase in access minutes of
use related to the No Limits package increased approximately $1.5
million and costs for a one-time construction and special projects
were $1.3 million higher in 2004 compared to 2003. Finally, cost
of services for the RLECs in 2003 reflect $0.6 million for a non-
cash gain from a pension curtailment for which no comparable gain
was recognized in 2004. Selling, general and administrative
expenses in the RLECs decreased $4.3 million in 2004 compared to
2003. The decrease is attributed primarily to higher short-term
incentive accruals of $2.8 million and a $1.3 million accrual for
potential sales tax liabilities made in 2003 for which no
comparable accruals were made in 2004. In addition, long-term
incentive plan expenses in the RLEC's selling, general and
administrative expenses were $2.6 million lower in 2004 compared
to 2003. Partially offsetting these higher selling, general and
administrative expenses in the RLECs in 2003 was $1.5 million for
a non-cash pension curtailment gain recognized in 2003 for which
no comparable gain was recognized in 2004.

Net operating loss in the edge-out services was $9.8 million in
2004, an improvement of $2.2 million from a net operating loss of
$12.0 million in 2003. The improvement is attributed to a decrease
in operating expenses of $4.2 million partially offset by the
decrease in revenues of $2.0 million. The decrease in operating
expenses is attributed primarily to a $3.4 million decrease in
depreciation and amortization expenses largely due to certain
assets becoming fully depreciated in 2004. In addition, the edge-
out services recognized a benefit of $0.7 million in 2003 for
certain adjustments to restructuring accruals for which no
comparable adjustments were recognized in 2004.

Interest expense in 2004 was $59.3 million in 2004 compared to
$62.6 million in 2003, a decrease of $3.3 million or 5.4%. The
decrease is attributed to a lower weighted average balance of
long-term debt outstanding and lower weighted average interest
rates in 2004 compared to 2003. Other income increased $0.4
million to $4.0 million in 2004 from $3.6 million in 2003
primarily as a result of higher dividend income on the Company's
Rural Telephone Bank stock.

For 2004, the Company recognized an income tax benefit of $6.4
million. The income tax benefit was largely due to the reversal of
the Company's valuation allowance established to reflect the
Company's deferred income tax assets at their net realizable
value.. During the fourth quarter of 2003, the Company recognized
an income tax benefit of $2.7 million for refunds received in 2002
from amendments to its 1998 income tax returns when the Company
was advised that the statute of limitations for review by the
Internal Revenue Service had expired. However, in June 2004, the
Department of Justice filed suit against two of the Company's
subsidiaries, Gulf Coast Services, Inc. and Coastal Utilities,
Inc., claiming that the refunds were erroneous refunds in the
amount of approximately $2.9 million. Approximately $0.9 million
of this claim was paid in the first quarter of 2004 as part of a
separate year income tax audit adjustment. As a result, the
Company accrued approximately $2.1 million in income tax expense
and $0.4 million in interest expense during the second quarter of
2004. Based on discussions with its tax advisors, the Company
believes that its position taken in the amended income tax returns
was appropriate under current tax laws and the Company intends to
vigorously defend against these claims.

For 2004, the Company reported net income of $5.4 million compared
to a net loss of $14.7 million in 2003, an improvement of $20.1
million. The improvement is attributed primarily to the $11.8
million increase in net operating income, the $3.4 million
decrease in interest expense and a $4.6 million increase in the
income tax benefit reported. The RLEC operations reported net
income of $41.3 million in 2004 and $24.2 million in 2003. The
edge-out services reported net losses of $35.9 million and $38.9
million in 2004 and 2003, respectively.

Adjusted Operating Income improved by $1.8 million, or 1.8%, to
$101.8 million in 2004 compared to $100.0 million in 2003. The
RLECs reported Adjusted Operating Income of $99.8 million in 2004
compared to $96.8 million in 2003. Adjusted Operating Income from
the edge-out services was $2.0 million in 2004 compared to
Adjusted Operating Income of $3.2 million in 2003. The RLECs had
an Adjusted Operating Income margin of 54.7% for 2004 and 56.1%
for 2003. Please refer to Footnote 1 - "Non-GAAP Financial
Measures" for a reconciliation of Adjusted Operating Income to net
income (loss).

As of December 31, 2004, the Company had approximately $75.5
million in liquidity consisting of $34.5 million in cash on hand
and $41.0 million fully available under two lines of credit with
the Rural Telephone Finance Cooperative. The lines of credit are
scheduled to mature in March 2005. The Company has been notified
by the RTFC that a 180-day extension of these revolving credit
facilities has been granted to complete the documentation for a
new secured line of credit in the amount of $41.0 million for a
term ending in March 2010. Completion of the extension and, if
necessary, the new line of credit is subject to satisfactory
completion of documentation for the new agreements and all
conditions precedent to closing being satisfied.

Based on its 2004 financial results, the Company is not required
to make a mandatory prepayment of principal to the RTFC under the
terms of its loan agreement, as amended. Capital expenditures for
2004 were approximately $14.6 million, which includes
approximately $2.6 million in capital expenditures related to
hurricane damages.

The Company announced that the 3rd Infantry Division, stationed at
Fort Stewart and Hunter Army Airfield in Hinesville, Georgia, is
in the final stages of its deployment to Iraq. According to
military officials, the deployment could last up to 14 months.
Coastal Utilities, Inc., an RLEC owned by Madison River
Communications, provides services to customers in Hinesville
including Fort Stewart and Hunter Army Airfield. The Company is
unsure at this time what effect the deployment will have on its
operations and cash flows.

The Company also announced an agreement with the National Rural
Telecommunications Cooperative that will allow the Company to
offer DIRECTV satellite television service to its customers. The
Company anticipates that introduction of this product offering
will commence by the second quarter of 2005.

                  Earnings Release Conference Call

Because the Company is in a quiet period due to the recent filing
of a Form S-1 Registration Statement by Madison River
Communications Corp. with the Securities and Exchange Commission,
the Company will not have its regularly scheduled earnings call
discussing its financial and operating results.

                        About the Company

Madison River Capital LLC is a rural local exchange carrier
headquartered in Mebane, North Carolina.

                          *     *     *

As reported in the Troubled Company Reporter on Feb. 9, 2005,
Moody's Investors Service has assigned a B1 rating to Madison
River Capital, LLC's, proposed senior secured credit facilities
and has upgraded the senior implied rating to B1 from B2, and the
rating for the Company's $200 million 13-1/4% senior unsecured
notes to B3 from Caa1.

The ratings assigned are:

    * $400 Million Senior Secured Term B Loan (matures 7 years
      from closing) -- B1

    * $50 Million Senior Secured Term C Loan (matures 7 years from
      closing) -- B1

    * $5.6 Million Senior Secured Term D Loan (matures 7 years
      from closing) -- B1

    * Senior Secured Revolving Credit Facility (matures 7 years
      from closing) -- B1

The ratings upgraded are:

    * Senior Implied rating -- to B1 from B2

    * Senior Unsecured Issuer rating -- to B3 from Caa1

    * $200 million 13.25% Senior Notes due 2010 -- to B3 from
      Caa1 (rating to be withdrawn at closing)

The rating outlook remains stable.


MCDERMOTT INTERNATIONAL: Names Roger Brown to Board of Directors
----------------------------------------------------------------
McDermott International, Inc. (NYSE:MDR) has appointed
Roger A. Brown to McDermott's board of directors, effective
Feb. 24, 2005.  Mr. Brown will be a member of the compensation
committee and the governance committee.

Mr. Brown, 60, currently serves as president of Smith
Technologies, a business unit of Smith International Inc.
(NYSE:SII).  Mr. Brown has served in this role since July 1998.
Before his current position, Mr. Brown was president of Smith
Diamond Technology since April 1995.  Earlier in his career, Brown
served in a variety of leadership positions at Camco International
prior to its acquisition by Schlumberger, including vice president
of Reda Pump Company, president of Hycalog, and as Camco's general
counsel and corporate secretary.  Mr. Brown earned his bachelor's
of science and doctorate of jurisprudence degrees from The
University of Oklahoma.

"Roger Brown is a seasoned oilfield services executive with over
30 years of experience to draw upon," said Bruce W. Wilkinson,
chairman and chief executive officer of McDermott.  "We welcome
Roger to McDermott's board of directors and look forward to his
many contributions."

                        About the Company

McDermott International, Inc. is a leading worldwide energy
services company.  The Company's subsidiaries provide engineering,
fabrication, installation, procurement, research, manufacturing,
environmental systems, project management and facility management
services to a variety of customers in the energy and power
industries, including the U.S. Department of Energy.

At Sept. 30, 2004, McDermott International's balance sheet showed
a $338,421,000 stockholders' deficit, compared to a $363,177,000
deficit at Dec. 31, 2003.


MEGO FINANCIAL: Sells Real Property to Case Int'l for $565,000
--------------------------------------------------------------
Mego Financial Corp. and its debtor-affiliates sought and obtained
authority from the United States Bankruptcy Court for the District
of Nevada to sell a real estate property in Colorado.  Case
International Company, Inc., offered the highest and best bid to
purchase the property for $565,000.

The Debtors explained that they don't have interest to develop the
property and are no longer in the business of selling time-share
interests in certain properties and selling certain undeveloped
lots of real estate.  The property consists of undeveloped lots of
land and water in Colorado.

Finova Capital Corporation and Textron Financial Corporation, two
entities with security interests on the property, will receive
$450,000 for water rights and $115,000 for real estate portion
respectively.

Headquartered in Henderson, Nevada, Mego Financial Corp. --
http://www.leisureindustries.com/-- is in the business of
vacation time share resorts sales and management industry.  The
Company and its affiliates filed for chapter 11 protection on
July 9, 2003 (Bankr. Nev. Case Nos. 03-52300 through
03-2304).  Stephen R Harris, Esq., at Belding, Harris & Petroni,
Ltd., represents the Debtors in their restructuring efforts.  When
the Company filed for protection from their creditors, they listed
more than $1 million in assets and $39,319,861 in liabilities.


MEYER'S BAKERIES: U.S. Trustee Will Meet Creditors on Mar. 18
-------------------------------------------------------------
The United States Trustee for Region 13 will convene a meeting of
Meyer's Bakeries, Inc. and its debtor-affiliate's creditors at
1:00 p.m., on March 18, 2005, at the U.S. Post Office &
Courthouse, located in 500 State Line Avenue, Room B-8 in
Texarkana, Arkansas.  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 Hope, Arkansas, Meyer's Bakeries, Inc., produces
English muffins, bagels, bread sticks, energy bars, and hearth
baked specialty breads and rolls at its facilities in Hope and
Wichita.  The Company and its affiliate filed for chapter 11
protection on Feb. 6, 2005 (Bankr. W.D. Ark. Case No. 05-70837).
Charles T. Coleman, Esq., at Wright, Lindsey & Jennings LLP
represents the Debtors in their restructuring efforts.  When the
Company filed for protection from its creditors, it listed total
assets of $44,226,139 and total debts of $48,699,754.


MIRANT CORP: Reject Consumers Energy Contract to Save Costs
-----------------------------------------------------------
Mirant Corporation and its debtor-affiliates seek the authority of
the U.S. Bankruptcy Court for the Northern District of Texas to
reject a Contract for Standby Electric Service between Mirant
Zeeland, LLC, and Consumers Energy.

Under the Standby Service Contract, dated March 1, 2001, Mirant
Zeeland purchased 8,500 kW of standby capacity from Consumers
Energy to service Mirant Zeeland's power plant located in Zeeland,
Michigan.  In exchange, Mirant Zeeland pays Consumers Energy
charges based on Consumers Energy's tariff:

   (1) A fixed $100 monthly customer charge; and

   (2) Other charges based on the Plant's actual usage, assessed
       on a per kWh basis.

The tariff, which is on file with the Michigan Public Service
Commission, specifies the minimum charge under the Standby Service
Contract.

The Standby Service Contract expires one year after entry, and
automatically renews unless written notice of termination is
provided 30 days before March 1 of any given year.

Section 365(a) of the Bankruptcy Code provides that a debtor-in-
possession, "subject to the court's approval, may assume or reject
any executory contract or unexpired lease of the debtor."

Robin Phelan, Esq., at Haynes and Boone, LLP, in Dallas, Texas,
states that Standby Service Contract is clearly executory, as it
requires:

   (a) Consumers Energy to provide standby capacity to service
       the Plant; and

   (b) Mirant Zeeland to pay for the capacity.

Mr. Phelan also notes that in In re Stewart Title Guaranty Co. v.
Old Republic National Title Insurance Co., 83 F.3d 735, 741 (5th
Cir. 1996), "Section 365 allows a [debtor] to relieve the
bankruptcy estate of burdensome agreements which have not been
completely performed."

The Debtors find that the Standby Service Contract is burdensome
to their estates and, accordingly, should be rejected.
Furthermore, the Debtors tell the Court that self-supplying the
Plant, rather than entering into contracts for station service,
will result in substantial savings.

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)


MORGAN STANLEY: Fitch Junks $22.6 Million Class H Series 1997-XL1
-----------------------------------------------------------------
Fitch Ratings downgrades Morgan Stanley Capital I Inc., series
1997-XL1:

     -- $22.6 million class H to 'CC' from 'CCC'.

In addition, Fitch affirms these classes:

     -- $16.6 million class A-1 at 'AAA';
     -- $64 million class A-2 at 'AAA';
     -- $226.2 million class A-3 at 'AAA';
     -- Interest-only (IO) class X at 'AAA';
     -- $22.6 million class B at 'AAA';
     -- $22.6 million class C at 'AAA';
     -- $45.3 million class D at 'AA';
     -- $45.3 million class E at 'BBB+';
     -- $41.5 million class F at 'BBB-';
     -- $26.4 million class G at 'B'.

The downgrade is the due to anticipated losses resulting from the
discounted payoff - DPO -- of the Westgate Mall loan which is
expected in February 2005.  The DPO at $25.5 million will result
in an approximate loss of $14 million to the trust.


MORGAN STANLEY: S&P Puts Low-B Ratings on Six Certificate Classes
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Morgan Stanley Capital I Trust 2005-IQ9's
$1.532 billion commercial mortgage pass-through certificates
series 2005-IQ9.

The preliminary ratings are based on information as of
Feb. 9, 2005.  Subsequent information may result in the assignment
of final ratings that differ from the preliminary ratings.

The preliminary ratings reflect:

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

   (2) the liquidity provided by the trustee,

   (3) the economics of the underlying loans, and

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

Classes A-1, A-2, A-3, A-4, A-AB, A-5, A-1A, A-J, B, C, and D are
being offered publicly.  Standard & Poor's analysis determined
that, on a weighted average basis, the pool (not including the
co-op loans) has a debt service coverage (DSC) of 1.45x, a
beginning LTV of 89.0%, and an ending LTV of 75.7%.  The
residential cooperative portion of the pool (11.0% of the pool
balance) has a beginning LTV of 28.5% and an ending LTV of 24.4%.
Overall, the collateral pool has a DSC of 1.92x, a beginning LTV
of 83.2%, and an ending LTV of 70.8%.

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

                   Preliminary Ratings Assigned
             Morgan Stanley Capital I Trust 2005-IQ9

    Class            Rating         Preliminary amount ($)

    A-1              AAA                        62,100,000
    A-2              AAA                       112,600,000
    A-3              AAA                       194,700,000
    A-4              AAA                        94,400,000
    A-AB             AAA                        43,800,000
    A-5              AAA                       446,242,000
    A-1A             AAA                       271,561,000
    A-J              AAA                       130,199,000
    B                AA                         32,550,000
    C                AA-                        11,488,000
    D                A                          26,806,000
    E                A-                         15,317,000
    F                BBB+                       15,318,000
    G                BBB                        11,488,000
    H                BBB-                       17,232,000
    J                BB+                         5,744,000
    K                BB                          7,659,000
    L                BB-                         5,744,000
    M                B+                          5,744,000
    N                B                           3,830,000
    O                B-                          5,744,000
    P                N.R                        11,488,421
    X-1*             AAA                     1,531,754,421**
    X-2*             AAA                     1,491,944,000**
    X-Y*             AAA                       168,257,608**

                     *  Interest-only class
                     ** Notional amount


NATIONSLINK FUNDING: S&P Junks Class J Certificates
---------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on five
classes of certificates from NationsLink Funding Corp.'s
commercial mortgage pass-through certificates series 1998-2.
Concurrently, the ratings on six other classes from the same
transaction are affirmed.

The raised and affirmed ratings reflect credit support levels that
adequately support the ratings under various stress scenarios.

As of Jan. 20, 2005, the trust collateral consisted of 349 loans
with an aggregate outstanding principal balance of $1.3 billion,
down from 376 loans totaling $1.6 billion at issuance.  The master
servicer, Midland Loan Services L.P., provided recent net
operating income data for 91.1% of the pool.  Based on this
information, Standard & Poor's calculated a weighted-average debt
service coverage -- DSC -- of 1.55x, up from 1.47x at issuance.
These DSC figures exclude loans with an aggregate balance of
$66.7 million that are now defeased.

The largest defeased loan has an outstanding principal balance of
$22.0 million.  Excluding this loan, the top 10 assets have an
aggregate unpaid principal balance of $270.1 million (21.5% of the
pool).  The weighted average DSC of these assets is 1.49x, up from
1.36x at issuance.  The 1.49x figure excludes the ninth-largest
asset, for which recent financial data is unavailable.  Standard &
Poor's reviewed recent property inspections for the top 10 assets,
and all of the properties were characterized as "excellent" or
"good."  None of the top 10 assets are on Midland's watchlist, but
the eighth-largest asset is in special servicing. The trust has
experienced five losses to date amounting to $19.2 million (1.2%).

There are six assets with an aggregate balance of $47.8 million
(3.8%) that are with the special servicer, Lennar Partners, Inc.
With the exception of one loan, all of the specially serviced
assets are expected to generate losses.  The eighth-largest asset
has an unpaid principal balance of $24.7 million and a total
exposure figure of $26.3 million.  This REO asset is
cross-collateralized and cross-defaulted with another REO property
with a principal balance of $12.3 million and $1.0 million in
advances.  These assets are industrial properties located in the
Research Triangle area of North Carolina in the city of Durham.
The larger of the two assets has an occupancy of approximately
25.0%, and Standard & Poor's anticipates the trust will incur a
substantial loss upon the liquidation of this asset.  The other
asset reports an occupancy level of 81.0%, slightly below the
market occupancy level.  The two 90-plus day delinquent loans have
balances of $4.5 million and $2.0 million and are secured by a
multifamily property in Indianapolis, Ind. and a healthcare
facility in Ridgefield, Wash., respectively.  Losses are also
expected upon the resolution of a $2.3-million loan secured by a
lodging property in Mobile, Ala. that was reported late as of the
January 2005 remittance report.  The loan, which has been with
Lennar since February 2002, has now been brought current.
Standard & Poor's does not anticipate a loss on the remaining $2.0
million loan in special servicing.

Midland's watchlist consists of 52 loans with an aggregate balance
of $148.6 million (11.8%).  The largest loan on the watchlist has
an outstanding balance of $11.7 million (0.9%) and has occupancy
issues.  The largest tenant leased more than 34.0% of the space
and vacated the property before its March 2005 lease expiry.
Another tenant recently signed a lease and moved into
approximately half of this vacated space.  Consequently, the
building's occupancy as of December 2004 was only 63.9%.  The
second-largest loan on the watchlist is secured by a multifamily
property in Atlanta, Ga. with an outstanding balance of
$11.2 million (0.9%).  This property reported a 2003 DSC of 1.01x,
a figure that has improved to 1.06x through the first half of
2004.

The third-largest loan on the watchlist is secured by a retail
property in West Palm Beach, Fla. with an unpaid principal balance
of $10.7 million (0.9%).  This property generated a DSC of 1.22x
for the year-to-date ending June 30, 2004 and appears on the
watchlist due to property damage suffered as a result of a recent
hurricane.  The borrower has repaired the damages to the property
and subsequently filed an insurance claim.  The insurance proceeds
are being held by Midland pending a review of the repairs.  The
remaining loans on the watchlist all have balances of less than
$7.5 million, and these loans appear on the watchlist primarily
due to DSC or occupancy issues.

The trust collateral is located across 33 states, and California
(29.0%) is the only state with more than 10.0% of the trust's
exposure.  Property concentrations are found in multifamily
(32.2%), retail (29.4%), and office (13.3%) assets.

Standard & Poor's stressed the specially serviced loans, loans on
the watchlist, and other loans for which recent financial data is
still unavailable in its analysis.  The resulting credit
enhancement levels appropriately support the raised and affirmed
ratings.

                         Ratings Raised

                    NationsLink Funding Corp.
      Commercial Mortgage Pass-Through Certs Series 1998-2

                     Rating
           Class   To     From    Credit Enhancement
           -----   --     ----    ------------------
           C       AAA    AA+     22.5%
           D       AA-    A       15.9%
           E       A-     BBB+    13.0%
           F       BB+    BB       6.1%
           G       BB     BB-      5.1%

                        Ratings Affirmed

                    NationsLink Funding Corp.
      Commercial Mortgage Pass-Through Certs Series 1998-2

              Class   Rating   Credit Enhancement
              -----   ------   ------------------
              A-1     AAA      36.3%
              A-2     AAA      36.3%
              B       AAA      30.0%
              H       B-        2.6%
              J       CCC+      2.0%
              X       AAA        -


NNRG ENERGY: Tacoma City Seeks Summary Judgment on Four Issues
--------------------------------------------------------------
On Oct. 26, 2000, the City of Tacoma, Washington, and NRG
Energy, Inc.'s subsidiary, Tacoma Energy Recovery Company,
entered into a Power Plant Services Agreement to modify and
operate a refuse derived fuel power plant in Tacoma.  NRG
unconditionally guaranteed TERC's obligations and performance.
After the Service Agreement was executed, the Project began to
run into permitting delays.

Nonetheless, in March 2002, the Parties negotiated Amendment
No. l to reallocate funding responsibility during the delayed
permitting process.  Under the reallocation, TERC agreed to
reimburse the City for all Net Power Plant Losses in 2003 and
subsequent years.  The Parties projected that TERC's
responsibility for the 2003 Net Power Plant Losses would be $1.2
million.  The City actually spent less than this projection,
incurring only $956,817 in Net Power Plant Losses during 2003.

Mark S. Indelicato, Esq., at Hahn & Hessen, LLP, in Tacoma,
Washington, relates that notwithstanding the Service Agreement
and Amendment No. 1, TERC began to have second thoughts about its
obligations.  Only eight months after the parties executed
Amendment No. 1, TERC undertook a calculated course of conduct to
scuttle the Project and to stonewall the City.  Through its
representatives on the Management Committee, TERC proposed a
zero-dollar 2003/2004 Biennial Budget and a zero-dollar Five Year
Plan for the Project.  TERC and NRG clearly intended to spend
nothing on the Project, Mr. Indelicato remarks.

TERC also refused to reimburse the $956,817 of 2003 Net Power
Plant Losses that the City incurred in keeping the project on
hold.  Despite timely demand by the City, TERC did not reimburse
the losses that both parties clearly anticipated TERC would be
liable for when they executed Amendment No. 1.

Accordingly, the City of Tacoma seeks a summary judgment on four
issues:

    (a) TERC breached the Service Agreement by forcing a zero-
        dollar budget for the Project.  Without a budget, the
        Project is effectively terminated, yet the Management
        Committee does not have the power to terminate or starve
        the Project;

    (b) TERC breached the Service Agreement by failing to
        reimburse the City's 2003 Net Power Plant Losses as
        bargained for in Amendment No. 1.  Even though the parties
        specifically negotiated Amendment No. 1 for the purpose of
        putting the Project on hold and reallocating funding
        responsibility during the delayed permitting process, TERC
        nonetheless refused to honor its obligations;

    (c) TERC has anticipatorily breached and repudiated the
        Service Agreement.  Anticipatory repudiation is "an
        express or implied assertion of intent not to perform a
        party's obligations under the contract prior to the time
        of performance."  TERC's conduct demonstrates that it
        does not intend to perform under the Service Agreement;
        and

    (d) NRG breached the Unconditional Guaranty that it provided
        to the City for the purpose of guarantying TERC's
        performance and obligations.

Mr. Indelicato argues that the Unconditional Guaranty
unequivocally provides for NRG's guarantee of payment and
performance of all of TERC's obligations under the Service
Agreement.  It was not limited in duration.  The Unconditional
Guaranty was a material component of the Service Agreement and
must be read to cover TERC's performance throughout the 20-year
term.  The Unconditional Guaranty should be enforced and the
Court should find that NRG breached when it rejected the
Unconditional Guaranty in its Reorganization Plan.

Mr. Indelicato tells Judge Beatty that NRG's interpretation of
the Service Agreement is unreasonable as a matter of law and
should be rejected.  The Management Committee did not exercise
reasonable discretion as required in the Agreement.  "The
Management Committee's refusal to approve any Power Plant
Expenses means it effectively demanded that parties, among other
things, not pay taxes on the Project, refuse to pay salaries and
benefits, and relinquish the lease for the real property
underlying the Project," Mr. Indelicato says.

Moreover, the Management Committee does not have the power to
effectively terminate or starve the Project pursuant to the
Service Agreement.  Courts recognize that it is bad faith to
attempt to get out of an agreement because the contract is not as
favorable as wished.  TERC cannot run from its obligations simply
because the Service Agreement is not profitable as TERC wants.

Mr. Indelicato adds that TERC cannot import its financial
projections into the Agreement.  Under the Service Agreement,
TERC's financial projections are inadmissible because they were
not incorporated into the Service Agreement.  In addition, there
were no representations, warranties or termination mechanisms
suggesting that the Project should be terminated if it was not
permitted and operable by late 2000.

Mr. Indelicato says that the business judgment rule is
inapplicable in this matter because the City did not sue TERC's
representatives on the Management Committee in their individual
capacity.  As NRG's own cases demonstrate, the defense only
applies to corporate management -- not the corporation.

                        About the Company

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.


NTELOS INC: S&P Junks $225 Million Second-Lien Term Loan
--------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to, NTELOS Inc.  The outlook is negative.

Simultaneously, a 'B' bank loan rating was assigned to NTELOS'
$435 million first-lien credit facility, which consists of a
$400 million term loan facility due 2011 and a $35 million secured
revolving credit facility maturing 2010.  The first-lien facility
also was assigned a recovery rating of '2', denoting the
expectation of a substantial recovery of principal (80%-100%) in
the event of a payment default or bankruptcy.  (These ratings are
based on preliminary bank loan documentation.)

In addition, a 'CCC+' rating was assigned to NTELOS' $225 million
second-lien term loan maturing in 2012.  The second-lien loan is
rated two notches below the corporate credit rating due to the
significant amount of first-priority secured debt and other
priority obligations that are senior to it.  This facility was
assigned a recovery rating of '5', denoting negligible recovery of
principal (0%-25%) in the event of a payment default or
bankruptcy.

Proceeds from the new term loans, an equity contribution of about
$130 million from the new sponsors, asset sales and tax recovery
of about $25 million, and cash on hand will be used to buy out
existing shareholders, retire existing debt, and pay related
transaction costs.  Upon receipt of regulatory approvals, the
company will be owned 100% by Quadrangle and CVC (private equity
sponsors).  Pro forma for the transaction, total debt outstanding
was about $626 million at Dec. 31, 2004.

"The rating reflects NTELOS' aggressive capital structure, the
highly competitive environment of its wireless segment (which is
its primary cash growth producer), geographic concentration, and
the company's overall small size," said Standard & Poor's credit
analyst Rosemarie Kalinowski.  "These factors dominate the credit
profile despite the relatively stable cash flow of the incumbent
local exchange carrier -- ILEC -- business and the potential for
higher wireless revenue growth due to new data products.  In
addition, the company's wholesale relationship with Sprint PCS
enables it to offer nationwide wireless plans without making major
capital commitments."


OMNOVA SOLUTIONS: Consolidates Chemical Business Leadership
-----------------------------------------------------------
OMNOVA Solutions Inc. (NYSE: OMN) has consolidated leadership of
its Performance Chemicals businesses and appointed James J. Hohman
as President, Performance Chemicals.  Mr. Hohman will lead all
efforts for the Company's chemical product lines, which serve the
paper, carpet, nonwovens, floor care, textiles, construction,
coatings and adhesives markets.  Sales for Performance Chemicals
in 2004 were $373 million.

"Opportunities for greater synergy across all of our chemical
businesses, and the desire to reduce costs, led us to conclude
that OMNOVA Solutions and our customers are best served under a
more streamlined leadership structure," said Kevin McMullen,
Chairman and Chief Executive Officer of OMNOVA Solutions.  "Under
Jim Hohman's leadership, our paper and carpet chemical teams have
brought innovative solutions to customers by leveraging value-
added new products and technology and utilizing creative and
effective business models, such as our successful RohmNova joint
venture in paper coatings.  Jim will bring that same focus to the
specialty chemical product lines."

Mr. Hohman has been a Vice President of OMNOVA Solutions since
November 2001, and President, Paper & Carpet Chemicals since
December 2000.  Since joining the Company's chemicals segment in
1996, he has held several roles in general management and
strategic business development, including vice president of the
specialty chemical product lines in 2000.  Previously, he held key
positions in business and marketing management at BP Chemicals.

                        About the Company

OMNOVA Solutions Inc. is a technology-based company with 2004
sales of $746 million and 2,000 employees worldwide.  OMNOVA is an
innovator of emulsion polymers, specialty chemicals, and
decorative and functional surfaces for a variety of commercial,
industrial and residential end uses.

                          *     *     *

As reported in the Troubled Company Reporter on Jan. 31, 2005,
Fitch Ratings has affirmed OMNOVA Solutions Inc.'s (Omnova) credit
ratings:

   -- $165 million senior secured notes 'B+';
   -- $100 million senior secured credit facility 'BB-';
   -- Rating Outlook Negative.

Omnova's continued weak financial performance and small company
size support the ratings affirmation. The company has been able
to withstand the pressure from rapidly rising raw material costs,
including costs for styrene, butadiene and PVC resin, by raising
product prices. However, these cost increases have not yet been
fully offset, so operating margins remain weak. Omnova is
experiencing some delay in fully recouping raw material cost
increases in part due to its position as a downstream chemical
producer and converter. For the trailing 12 months ended Nov. 30,
2004, EBITDA-to-interest incurred was 1.3 times versus 1.9x at
year-end 2003. Total debt-to-EBITDA was to 7x for year-end 2004
compared to 6.5x at year-end 2003.

The Negative Rating Outlook reflects the current operating
weakness and the liquidity impact of the December 2004 credit
facility amendment. The December 2004 credit facility This
amendment eliminated the fixed charge coverage financial covenant
and increased the revolver's minimum availability to $20 million.
As a result, revolver borrowing availability has been reduced
during a period of weak operating cash flow generation. Fitch
expects that Omnova's operating margins will improve in 2005 as
product price increases outpace raw material cost increases.
Moreover, Fitch expects demand to remain good in the performance
chemicals and building products segments; the timing for
improvement in the decorative products segment remains uncertain.


OWENS CORNING: Parties File Asbestos Estimation Post-Trial Briefs
-----------------------------------------------------------------
Owens Corning and its debtor-affiliates, the Official Committee of
Asbestos Claimants, the Legal Representative for Future Asbestos
Claimants, Credit Suisse of First Boston -- as agent for the bank
lenders under the prepetition Credit Agreement -- and the
bondholders submitted their post-trial briefs with regards to the
hearing to estimate the Debtors' asbestos liability for plan
evaluation and voting purposes.

A. Debtors

The Debtors emphasize three points in their post-trial brief:

   (1) Owens Corning's historical experience provides an ample
       basis on which to make a reasonable forecast of its
       asbestos liability.  The Debtors' database contains
       information on the more than 562,000 prepetition asbestos
       personal injury claims, as well as the Debtors' experience
       in resolving some 330,000 of those claims, which arose in
       all 50 states and involved the full spectrum of asbestos-
       related diseases;

   (2) The $7.8 billion valuation of Owens Corning's asbestos
       liability and the $3.9 billion valuation of Fibreboard's
       asbestos liability implicit in the plan of reorganization
       are within the range of reasonable estimates of the
       Debtors' liability; and

   (3) Dr. Frederick Dunbar's estimation on behalf of the Bank
       Debt Holders is below the range of reasonable estimates of
       the Debtors' asbestos liability.

According to Roger E. Podesta, Esq., at Debevoise & Plimpton LLP,
Dr. Dunbar rejects as "zero-pays" approximately 84.5% to 86.5% of
the 128,000 pending claims, by:

   -- using an unrealistically high historical no pay rate
      derived from his incomplete and faulty analysis of non-
      National Settlement Program dismissals; and

   -- after excluding a high percentage of claims on the basis
      for supposed historical dismissal rates, making zero-pay
      adjustments to both the nonmalignant and lung cancer and
      other cancer claims:

      (a) As to nonmalignant claims, Dr. Dunbar rejected claims
          that he presumed would not meet medical criteria, that
          happened to be more stringent than any substantive
          state law.

      (b) As to lung cancer and other cancer claims, Dr. Dunbar
          assigned 11% no value because he believed they would
          ultimately have no disease.  Not only is this double
          counting of his original dismissals, it is derived from
          data based on claims filed against the Manville Trust,
          not on anything in Owens Corning's historical
          experience.

      (c) As for the future claims, Dr. Dunbar's estimate of the
          number of compensable claims is only about one-twelfth
          the nearest estimate of any other expert.  This
          discrepancy is largely attributable to Dr. Dunbar's use
          of an ad hoc methodology for forecasting the future
          incidence of asbestos-related nonmalignant disease -- a
          methodology, which was presented for the first time in
          the estimation proceeding, and which has never been
          peer reviewed.  Under Dr. Dunbar's ad hoc methodology,
          he estimates that there will only be approximately
          40,000 compensable future non-malignant claims against
          Owens Corning.  Furthermore, Dr. Dunbar adds to the
          unrealistic estimate of the number of claims, values on
          the stronger cases that even he regards as compensable,
          that are derived from the settlement values of the
          weaker cases to which he assigned no value.

Mr. Podesta contends that Dr. Dunbar's estimate does not withstand
the "sanity check" provided by the Court-approved estimates of
asbestos liability in other recent bankruptcy cases.  In the event
that Dr. Dunbar's preferred estimate is accepted, Owens Corning's
liability would be less than one-half that of Armstrong World
Industries and one-quarter that of Babcock & Wilcox, a result
wholly inconsistent with the relative liability experience of the
three companies during 20 years of actual litigation in the tort
system.

A full-text copy of the Debtors' post-trial brief is available at
no charge at:

             http://bankrupt.com/misc/OWCTab46.pdf

B. Asbestos Constituencies

The Official Committee of Asbestos Claimants and the Legal
Representative for Future Asbestos Claimants begin their 74-page
Post-Trial brief with a quotation from Judge Perlman's decision in
In re Eagle-Picher Indus., Inc., 189 B.R. 681, 686 (Bankr. S.D.
Ohio 1995):

     If you want to estimate the value of something, you
     must look to the most comparable item you can find
     where the value is known.  This commonsense rule holds
     just as true for valuing asbestos claims as it does in
     everyday life.

Accordingly, Elihu Inselbuch, Esq., at Caplin & Drysdale,
Chartered, tells Judge Fullam that the best and the only valid
basis from which to value Owens Corning's 180,000 pending asbestos
personal injury and death claims, including the hundreds of
thousands of claims that will be filed in the future is by
reference to the values established by Owens Corning's prepetition
resolution of over 300,000 similar individual Asbestos Claims.

The 300,000 Asbestos Claims were litigated in both state and
federal courts, and were resolved either through trials or at
values that the company and the claimants agreed were acceptable
for a consensual resolution of the cases.  The cases ranged in
severity and value from claims for mesothelioma where both disease
and exposure could not be disputed, to claims for non-malignant
asbestos disease where the diagnosis was supported only by x-ray
evidence, the strength of which was questioned by Owens Corning,
with minimal or no economic damages.

According to Mr. Inselbuch, Owens Corning tried a variety of
strategies to deal with the claims and resolved the 300,000 prior
cases through settlement criteria and at values that in all
instances were designed to -- and did -- minimize its liability to
asbestos personal injury claimants.

The approach advocated by the Bank Debt Holders, on the other
hand, would disallow 90% of the present and future asbestos
personal injury claims without any review or trial and then
arbitrarily value the 10% remaining at drastically reduced values
from their historical averages.  "[The Bank Debt Holders']
approach is based on nothing more than a wish list of how the Bank
Debt Holders would prefer the claims to be resolved in a system of
their own design," Mr. Inselbuch asserts.  "However characterized,
the Bank Debt Holders' approach is nothing more than an attempt to
re-write the substantive legal rules of the 50 states."

           Dr. Dunbar's Estimate Results Not Credible

The Asbestos Committee and the Futures Representative supports the
Debtors' objections to Dr. Dunbar's estimates.

Mr. Inselbuch reiterates that, incredibly, Dr. Dunbar's estimate
rejects Owens Corning's actual claims resolution history and
ignores the substantive law, which governs the compensability and
value of asbestos personal injury claims.

Although Dr. Dunbar's analyses presented at trial were decidedly
opaque, he produced a "Reconciliation of NERA Forecast to Peterson
Forecast," which shows his calculation of the individual and
cumulative effect of his various assumptions.  Dr. Dunbar's
forecast treats as "allowable" claims only 17,076 pending and
50,695 future claims.  However, the claims that survived all of
Dr. Dunbar's "allowability criteria" would not be "average"
asbestos claims; they would be gold standard cases where liability
and injury were not subject to dispute.  The metric for valuing
those claims cannot be the values assigned to "average"
settlements, prompting questions concerning "why a claimant with
an indisputably valid mesothelioma claim against Owens
Corningaccept an average settlement of $150,000 or $200,000 when
if he took the case to trial he would recover $1,900,000?"

Instead, the 67,771 "allowable" claims would have to be valued by
reference to the Owens Corning jury verdict history, which
averaged $297,842 for all claims that Owens Corning took to trial.
Simple arithmetic shows that if Dr. Dunbar's allowability criteria
were actually implemented, Owens Corning's liability for the
pending "allowable" claims alone would be over $5 billion (17,076
x $297,842 = $5,085,949,992), and future claim would add an
additional $15 billion -- in nominal dollars -- onto that.

                 Estimates Will Ultimately Decide
                      Plan's Confirmability

If the Bank Debt Holders reject the Plan, as they have repeatedly
said they would, the Court must determine whether Owens Corning's
and Fibreboard's present and future asbestos personal injury and
death claimants will each receive under the plan of reorganization
a percentage recovery on the value of their claim that is no
greater than that received by the Bank Debt Holders and other
unsecured creditor constituencies.

Mr. Inselbuch reminds the Court that for the Plan to be confirmed:

   * the estimate of Owens Corning's liability to present and
     future asbestos personal injury claimants must be equal to
     or greater than $7.8 billion net present value; and

   * the estimate of Fibreboard's liability to present and future
     asbestos personal injury claimants must be equal to or
     greater than $3.9 billion net present value.

The Asbestos Committee and the Futures Representative's evidence
of Fibreboard's asbestos liability adduced at the Estimation
Hearing, consisting of the estimates of Drs. Peterson and
Rabinovitz, was unchallenged by the Bank Debt Holders and clearly
supports an estimate of Fibreboard's asbestos liability in excess
of $3.9 billion net present value.  Under Dr. Peterson's preferred
estimate, the net present value of Fibreboard's liability for
present and future asbestos claims is $7.5 billion.

           Best Estimates of Owens Corning's Liability

Mr. Inselbuch emphasizes that Dr. Peterson's preferred forecast of
$11.1 billion net present value, and Dr. Rabinovitz's 2- or 5-year
calibration period forecasts of $8.2 billion net present value,
are "eminently reasonable and consistent" with estimates that
courts have recently adopted in Armstrong World Industries and
Babcock & Wilcox cases.  In contrast, Owens Corning has a much
greater tort exposure than Armstrong and Babcock & Wilcox.

Based on all credible evidence, the Asbestos Committee and the
Futures Representative ask the Court to estimate the present value
of Owens Corning's liability for present and future asbestos
claims at $11.1 billion, and Fibreboard's liability at $7.5
billion.

A full-text copy of the Asbestos Constituencies' Post-Trial Brief
is available at no charge at:

             http://bankrupt.com/misc/OWCTab44.pdf

C. Credit Suisse First Boston

Ralph I. Miller, Esq., at Weil, Gotshal & Manges LLP, points out
two fundamental threshold issues concerning the basic purpose of
and standard for performing an estimation of future liabilities
which, once resolved, would simplify the Court's task and drive
the outcome of Owens Corning's case:

   (1) The purpose of a forecast is to estimate what the
       liability for future claims will be in the future -- not
       the past; and

   (2) The real world in which the post-bankruptcy claims will
       now be resolved, and which must be compared to the pre-
       bankruptcy history, is the federal judicial system.

Mr. Miller explains that while one can use historical claims
values as a starting point, the future liability can be forecast
by extrapolating from them.  However, those past values should
reflect the setting in which the future claims will be resolved.

As Dr. Peterson stressed in his report to Judge Weinstein in the
Manville proceedings, and reconfirmed on cross-examination at
trial:

     "The extrapolations are problematic if the bases for
     settling claims have or will change.  The
     extrapolations would then provide little information
     about what defendants will actually pay, but would at
     most indicate what defendants' expected payments would
     have been if past practices had continued into the
     future."

Dr. Peterson also asserted in his Expert Report that in order to
do a proper forecast, a forecast expert "cannot merely do a
numeric analysis of statistics."  Rather, it is necessary to do a
"systematic study," of the prior litigation and settlement process
that generated those statistics in order to determine if the
"bases for settling claims have or will change."

In reference to the second threshold point, Mr. Miller states that
with Owens Corning having been driven to seek protection in the
federal bankruptcy system, the future claims will not be resolved
in the state court tort system, particularly as it existed back in
the 1990s.

Mr. Miller notes that neither Dr. Peterson nor Dr. Rabinovitz
attempted to present any analysis of the pre-bankruptcy litigation
to determine whether there had been changes between then and now.
Moreover, neither expert had attempted to estimate what Owens
Corning's liability would be in the federal judicial system in
which the claims would be resolved.  Instead, they had blindly
extrapolated from the pre-bankruptcy claims values to determine
what Owens Corning's liability would have been if nothing had
changed -- exactly what Dr. Peterson had warned Judge Weinstein
should not be done in forecasting future liabilities.

As the Court noted during closing arguments, there was no question
that there had been changes -- indeed, some of the litigation
tactics that inflated the value of the pre-bankruptcy nonmalignant
claims have now been banned in the very states that were
previously the "hotbed" of litigation against Owens Corning.  Mr.
Miller states that other changes had occurred and would continue
to occur by virtue of the fact that the population exposed to
Owens Corning's products before 1975 had continued to age since
the 1990s.

The question in Owens Corning's case was no longer whether there
had been changes, but whether and how the historic claims values
should therefore be adjusted to arrive at an appropriate forecast
of the amount of Owens Corning's liability for the legitimate
claims that should be allowed by the Court.

Accordingly, CSFB asks the Court to conclude that the present
value of all pending and future asbestos claims against Owens
Corning, including settled but not paid contract claims, is
$2,046,000,000.

A full-text copy of Credit Suisse's post-hearing brief is
available at no charge at:

            http://bankrupt.com/misc/OWCTab45.pdf

Additionally, Credit Suisse delivered to the Court a compendium of
unreported cases in support of its post-hearing brief.  A
full-text copy of that Compendium of Cases is also available at no
charge at:

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

D. Bondholders

King Street Capital Management, LLC, D. E. Shaw Laminar
Portfolios, LLC, Harbert Distressed Master Fund, Ltd., Canyon
Capital Advisors, LLC, and Lehman Brothers, Inc., adopt the
arguments made by Credit Suisse First Boston.

However, the Bondholders believe that Dr. Dunbar's estimates --
$2.046 billion or, under his alternative forecast, $3.151 billion
-- are the most appropriate of the estimates presented to the
Court because only Dr. Dunbar adequately took into account the
"real world" in which the claims will be determined.

Alternatively, the Bondholders believe that the estimate offered
by Dr. Vasquez is reasonable -- although not preferable -- because
Dr. Vasquez, to some extent, considered the changed circumstances
on which Owens Corning's asbestos personal injury liabilities will
now be determined.

On the extreme, the Bondholders insist that the estimates of Drs.
Peterson and Rabinovitz should be rejected, because both
reflexively applied what they claimed to be the "historical"
experience of Owens Corning, without regard to whether that
history is at all relevant to the resolution of claims in the
future.

A full-text copy of the Bondholders' brief is available at no
charge at:

          http://bankrupt.com/misc/OWCTab47.pdf

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


PACIFIC COAST: S&P Places Ratings on CreditWatch Negative
---------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on the class
B, C-1, and C-2 notes issued by Pacific Coast CDO Ltd., an
arbitrage CDO of ABS transaction, on CreditWatch with negative
implications.  At the same time, the rating on the class A notes
is affirmed based on the credit enhancement available to support
the notes.

The CreditWatch placements reflect factors that have negatively
affected the credit enhancement available to support the notes
since the last rating action in June 2004.  These factors include
a negative migration in the credit quality of the performing
assets in the pool.

Since the June 2004 rating action, the overcollateralization
ratios have deteriorated.  According to the Jan. 19, 2005 monthly
report, the class A/B overcollateralization ratio was 97.55%,
compared to 105.89% at the time of the last rating action, and the
class C overcollateralization ratio was 91.93%, compared to 99.93%
at the time of the last rating action.  The paydown of $44.103
million to the class A notes after the Jan. 25, 2005 payment date
was not sufficient enough to offset deterioration in the credit
quality of the portfolio for the ratings of the class B and C
notes.

             Ratings Placed on CreditWatch Negative
                     Pacific Coast CDO Ltd.

                               Rating
                 Class   To               From
                 -----   --               ----
                 B       BBB+/Watch Neg   BBB+
                 C-1     B/Watch Neg      B
                 C-2     B/Watch Neg      B

                       Rating Affirmed
                     Pacific Coast CDO Ltd.

                       Class     Rating
                       -----     ------
                       A         AAA


PARMALAT: Tuscan Wants $57.5M Claim Allowed for Voting Purposes
---------------------------------------------------------------
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom,
LLP, in New York, relates that Parmalat USA Corp. and Farmland
Dairies, LLC, had previously sought to preclude Tuscan/Lehigh
Dairies, Inc., from voting over $57.5 million in claims on their
Plans of Liquidation and Reorganization, in the hope of obtaining
sufficient acceptances to confirm those plans.

Tuscan's claims, evidenced by timely filed proofs of claim in both
Parmalat USA's and Farmland's cases, are substantial, Mr. Milmoe
asserts.  Mostly, those claims reflect damages arising from the
U.S. Debtors' rejection of a long-term supply contract, and
represent over 7% of the total liquidated claims filed against
Parmalat USA and Farmland, and, if allowed, those claims would
triple the Debtors' estimate of total allowed claims in each case.

Farmland has objected to Tuscan's claims, therefore, preventing
them from being deemed allowed and automatically entitled to vote
on Farmland's Plan under Sections 502(a) and 1126(a) of the
Bankruptcy Code.  Parmalat USA has not objected to Tuscan's
claims, but, together with Farmland, has:

    (i) filed an adversary complaint to avoid Tuscan's rejection
        damage claims; and

   (ii) invoked Section 502(d) in an attempt to disallow Tuscan's
        claims pending resolution of the novel theories
        propounded in the complaint, even though there has been
        no determination whatsoever that Tuscan is an entity from
        which property is recoverable under Section 550 or is a
        transferee of a transfer avoidable under Section 544 or
        548.

Mr. Milmoe argues that Parmalat USA and Farmland should not be
permitted to disenfranchise a major creditor like Tuscan based on
unproven allegations and legal theories.

Accordingly, Tuscan asks Judge Drain of the U.S. Bankruptcy Court
for the Southern District of New York to:

   * clarify that Section 502(d) does not preclude it from voting
     on Parmalat USA's Plan of Liquidation; and

   * temporarily allow its claims for voting purposes pursuant
     to Rule 3018(a) of the Federal Rules of Bankruptcy Procedure
     on Farmland's Plan of Reorganization, and, if necessary, the
     Parmalat USA Plan.

Mr. Milmoe tells the Court that Tuscan's Rejection Claims --
$57,052,568 against each of Parmalat USA and Farmland -- were
calculated using the well-established contract principles of
"cover," pursuant to which it computed the difference between what
it likely will pay for Processing Services on the open market and
what it would have paid under, and using the terms and volumes set
forth in, the Supply Agreement.  Those damages were then
discounted to present value at a rate of 7%.  The two Rejection
Claims also seek $4 million for consequential damages arising from
Tuscan's need to obtain alternative office and parking space and
$250,000 which had been paid to Parmalat USA for future capital
improvements to Farmland's Sunnydale milk processing plant in
Brooklyn, New York.  Tuscan believes that the Debtors never made
improvements.

Since Tuscan's claims are based on well-established methods of
calculating damages, Mr. Milmoe asserts that the Court should
determine that Tuscan will succeed on the merits of its claims,
and allow it to vote their full amount.

In addition, Tuscan timely filed Claim No. 656 against Farmland
and Claim No. 658 against Parmalat USA, each for $469,985 for
goods sold under the Supply Agreement.

The Parmalat USA Rejection Claim and the Parmalat USA Trade Claim
are not the subject of an objection and are, therefore, entitled
to vote.  The Farmland Rejection Claim and the Farmland Trade
Claim should be temporarily allowed for voting purposes under
Bankruptcy Rule 3018, Mr. Milmoe asserts.

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: Court Approves Amended Disclosure Statement
--------------------------------------------------------------
Judge Haines approves the First Amended Disclosure Statement, as
it may be modified to reflect changes made or ordered on the
record at the Disclosure Statement Hearing.  Judge Haines finds
that the Disclosure Statement contains adequate information within
the meaning of Section 1125 of the Bankruptcy Code.

The United States Bankruptcy Court for the District of Maine will
convene a hearing to consider confirmation of the Pegasus
Satellite Communications, Inc. and its debtor-affiliates' Chapter
11 Plan on March 24, 2005, commencing at 10:30 a.m. prevailing
Eastern Time.

Objections, if any, to the confirmation of the Plan must be served
and filed by March 17, 2005 at 4:00 p.m., prevailing Eastern Time.

The Confirmation Hearing may be adjourned from time to time by the
Court without further notice except for the announcement of the
adjournment date made at the Confirmation Hearing or at any
subsequent adjourned Confirmation Hearing.

                            Objections

These parties had objected to the approval of the Disclosure
Statement:

(1) United States Trustee

Phoebe Morse, the United States Trustee for Region 1, believes
that the information contained in the Debtors' First Amended
Disclosure Statement generally complies with Section 1125(a) of
the Bankruptcy Code.  However, the U.S. Trustee objects to the
suggestion that the Debtors and their successors, including the
liquidating trustee, can contractually relieve themselves of their
obligation to file post-confirmation disbursement reports and pay
post-confirmation quarterly fees, based on disbursements.

The U.S. Trustee argues that Section 1930(a)(6) of the Judiciary
Code mandates payment of post-confirmation fees until the Debtors
cases are closed or dismissed.  Thus, such provision in the
Amended Disclosure Statement and any parallel provision in the
Plan should be stricken.

The U.S. Trustee wants the Debtors to redact the Amended
Disclosure Statement, the Plan and the Order to require that the
Liquidating Trustee be covered by a bond in an amount sufficient
to cover the aggregate Plan disbursements that the Liquidating
Trustee is likely to hold at any time post-confirmation, pending
distribution.  Doing so will lessen the risk of loss due to
defalcation.

The U.S. Trustee reserves all rights to object to confirmation of
the Plan for any reason under Section 1129(a), including, without
limitation, on grounds that it impermissibly releases non-debtor
third parties.

(2) Par Capital and HSBC

Par Capital Management, Inc. and Par Investment Partners, L.P. and
HSBC Bank USA, National Association, as Indenture Trustee, have
identified several potential claims against certain Non-Debtor
Affiliates and Releasees which the Plan and the Third Party
Release provision under the Plan would purport to eliminate.

HSBC is the successor Indenture Trustee of Pegasus Satellite
Communications, Inc.'s 13.5% Senior Subordinated Notes due March
2007, pursuant to which about $193,100,000 in aggregate principal
amount were issued.  Par Capital is the holder of $41,200,000 of
the Sub Debt.

According to Daniel L. Cummings, Esq., at Norman, Hanson & De
Troy, LLC, in Portland, Maine, the claims that the Plan would
purport to eliminate include:

   (A) Breach of fiduciary duty by PSC's directors and
       controlling shareholder, Pegasus Communications
       Corporation, based on transfers made as part of a series
       of transactions that included the issuance of the Sub
       Debt, including:

       (1) the exchange of Golden Sky DBS Inc.'s notes for PSC's
           Sub Debt notes, which benefited PCC and the officers
           and directors common to each of PCC and PSC; and

       (2) payment of dividends and distributions made in 2001
           and 2002, which benefited PCC and the officers and
           directors common to each of PCC and PSC.

       Distributions and dividends made by PSC to PCC were
       unlawful due to PSC's impaired financial condition and
       avoidable by PSC under relevant state law.  They
       constitute breaches of duty to the Sub Debt because they
       were both unlawful distributions and fraudulent transfers;

   (B) Breach of fiduciary duty by PSC's directors and
       controlling shareholder, PCC, to the Sub Debt based on
       these additional fraudulent transfers:

       (1) payment of dividends in 2002;

       (2) transfer of stock of Pegasus Real Estate Company on
           May 8, 2004 to PCC; and

       (3) transfer of 7% of the equity of Pegasus Communications
           Holdings, Inc. on April 11, 2002 to PCC; and

   (C) Possible additional claims for misrepresentation or other
       violation of the securities laws.

Mr. Cummings argues that pursuant to the release provision of the
Debtors' Plan, the Debtor is effectively forcing the Sub Debt
holders to release all claims against the Releasees while
providing no recovery for the Sub Debt holders under the Plan.

The Third Party Release under the Plan does not depend on actual
consent of holders of Sub Debt, is not in exchange for any
consideration to those holders, and does not satisfy the
"exceptional circumstances" requirements for granting of the a
release.  Thus, Mr. Cummings asserts, the Third Party Release is
improper, not permitted by law and render the Plan patently
unconfirmable.

Mr. Cummings contends that the Plan does not meet the basic
standard for the validity of non-debtor releases.  The Plan does
not provide for repayment in full of all creditors, there is no
substantial contribution by the Releasees to the Plan funding, and
the Third Party Releases are not an essential part of the Plan.
Furthermore, the Plan is a liquidating plan.  Bankruptcy courts
have found that third party injunctions are inappropriate under
liquidating Chapter 11 plans.  The requirements of contribution of
assets to the reorganization and that the injunction be essential
to reorganization are not met when a debtor is liquidating and
there is no ongoing business.  Allowing the Debtors' Third Party
Release provision would be unwarranted and no extraordinary
circumstances exist to merit it.

                  Debtors Respond to Objections

The Debtors contend that the issues raised by the U.S. Trustee,
Par Capital and HSBC are matters that are not necessary for the
Court to decide in connection with Disclosure Statement approval,
but should properly be considered only at the Confirmation
Hearing.

Nevertheless, the Debtors agree to revise the Amended Plan and
Disclosure Statement to clarify that the Liquidating Trustee will
send copies of the quarterly reports to the U.S. Trustee.
Furthermore, the Debtors will revise the Plan and Disclosure
Statement to provide that the U.S. Trustee Fees will be paid
pursuant to Section 1930(a)(6) through the closing of the Chapter
11 Cases.

The Debtors will also revise the release provisions in the Plan
and Disclosure Statement to clarify that any Holder of a Claim or
Interest that is not receiving Distributions under the Plan will
not be deemed to have released the Debtors' officers and directors
or, to the extent PCC becomes a successor-in-interest to one or
more of the Debtors, PCC.

However, the Debtors assert that the U.S. Trustee's request that
the Liquidating Trustee "be covered by a bond in an amount
sufficient to cover the aggregate Plan disbursements that he/she
is likely to hold at any time post-confirmation, pending
distribution[,]" is not an issue that the Court needs to consider
in connection with approval of the Amended Disclosure Statement.
The issue should be deferred until the Confirmation Hearing, and
in any event is completely unsupported by either applicable law or
justified by the facts of the Debtors' case.

The proposed bond for the Liquidating Trustee is wholly
unsupported by law, as evidenced by the U.S. Trustee's inability
to cite to a single statute, rule or case supporting the
requirement.  Furthermore, the U.S. Trustee has not asserted any
facts that warrant imposition of the requirement on the
Liquidating Trustee.  The Debtors see no reason to reduce the
recovery of creditors through the imposition of this cost on the
Liquidating Trustee.  If the Court determines that the matter
should be considered at the hearing to approve the First Amended
Disclosure Statement, the Debtors maintain that the U.S. Trustee
Objection should be overruled on its merits to the extent it
relates to requesting a bond covering the Liquidating Trustee.

                  Court Overrules Objections

Judge Haines overrules with prejudice all objections to the
approval of the Disclosure Statement, to the extent not previously
withdrawn, waived, resolved or settled.

Par Capital and HSBC have agreed on the release modifications in
the Debtors' Plan and Disclosure Statement.  Par Capital and
HSBC's Objection is rendered moot.

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


PEGASUS SATELLITE: Nixes Claim Aggregation for Voting Proposal
--------------------------------------------------------------
Pegasus Satellite Television, Inc., and its debtor-affiliates
withdrew a common, but illegal, provision from the uniform voting
procedures they asked the U.S. Bankruptcy Court for the District
of Maine to approve in connection with the company's solicitation
of creditors' acceptances of their Chapter 11 Plan.

Pegasus asked the Bankruptcy Court to rule, for purposes of
determining under section 1126(c) of the Bankruptcy Code whether
one-half in number of Claims in each Class has accepted the Plan,
that separate Claims held by a single creditor in a particular
Class would be aggregated as if such creditor held one Claim in
such Class, and the votes related to such Claims would be treated
as a single vote to accept or reject the Plan.  The effect of that
aggregation language on a purchaser of more than one claim against
Pegasus was to limit that postpetition transferee to one vote on
the company's plan.

             Claims and Creditors Aren't the Same

Aggregation of multiple claims owned by a claim trader into one
single claim for voting purposes to determine compliance with the
numerosity requirement under 11 U.S.C. Sec. 1126, while commonly
inserted into chapter 11 plans, defies logic.  The Bankruptcy
Code, the Bankruptcy Rules and applicable case law make it clear
that voting rights relate to "claims" rather than "creditors."  A
"claim" is a "right to payment."  11 U.S.C. Sec. 101(5).  A
"creditor" is an "entity that has a claim against the debtor that
arose at [or before] the [petition date]."  11 U.S.C. Sec.
101(10).  The rules of construction for interpreting the text of
the Bankruptcy Code provide that "the singular includes the
plural."  11 U.S.C. Sec. 102(7).  Section 1122 of the Code calls
for classification of claims under a chapter 11 plan-not
classification of creditors.  Section 1123(a)(4) of the Code
requires that any chapter 11 plan must "provide the same treatment
for each claim [in a class], unless the holder . . . agrees
[otherwise]."  Section 1126(c) of the Code requires acceptance of
a plan by "creditors . . . that hold . . . more than one-half in
number of the allowed claims of such class held by creditors . . .
[that have accepted a plan]."  Rule 3001(e) provides for the
transfer of claims-not aggregation of rights of creditors.  Rule
3003(b)(1) directs that "[t]he schedule of liabilities filed
pursuant to Sec. 521(1) of the Code shall constitute prima facia
evidence of the validity and amount of the claims of creditors."
The Bankruptcy Code and Rules distinguish claims from creditors.
Pegasus' proposed voting procedures didn't make the distinction,
but were modified at the eleventh-hour to reflect that important
difference.

A copy of Pegasus' proposed Order establishing plan solicitation
and ballot tabulation procedures is available at no charge at:

     http://bankrupt.com/misc/919ProposedSolicitationOrder.pdf

The claim aggregation proposal appears on page 9 of the draft
order at item e.

A copy of the Order signed by Judge Haines Wednesday afternoon
excluding the aggregation language is available at no charge at:

     http://bankrupt.com/misc/980FinalSolicitationOrder.pdf

        An Assignee "Steps into the Shoes" of an Assignor

A claim trader, or any other purchaser of a claim against a
debtor's estate, steps into the shoes of the seller of the claim.
This rule of law was true under the Bankruptcy Act, see
Manufacturers Trust Co. v. Becker, 338 U.S. 304, 94 L. Ed. 107, 70
S. Ct. 127 (1949), and continues to be true under the Bankruptcy
Code.  See, e.g., In re Olson, 191 B.R. 991, 1004 (Bankr. D. Minn.
1996); In re Executive Office Centers, Inc., 96 B.R. 642, 648-49
(Bankr. E.D. La. 1988); In re Oaks Partners, Ltd., 141 B.R. 453
(Bankr. N.D. Ga. 1992).  A claim purchaser accepts all of the
rights and infirmities of a purchased claim.  See Goldie v. Cox,
130 F.2d 695, 720 (8th Cir. 1942) (stating that an assignee is
subject to all equitable claims against the assignor); State Bank
of India v. Walter E. Heller & Co., 655 F. Supp. 326, 331
(S.D.N.Y. 1987) ("An assignee 'is subject to all the equities and
burdens which attach to the property assigned because he receives
no more and can do no more than his assignor.'" (quoting
International Ribbon Mills, Ltd. v. Arjan Ribbons, Inc., 36 N.Y.2d
121, 365 N.Y.S.2d 808, 811, 325 N.E.2d 137 (N.Y. 1975)).  See also
Shropshire, Woodliff & Co. v. Bush, 204 U.S. 186, 189, 27 S.Ct.
178, 179, 51 L.Ed. 436 (1907) (priority wage claim retains
priority in hands of claim purchaser); Wilson v. Brooks
Supermarket, Inc. (In re Missionary Baptist Foundation of America,
Inc.), 667 F.2d 1244 (5th Cir. 1982) (one who cashes a payroll
check of debtor's employee retains the same priority enjoyed by
the employee), citing In re Stultz Bros., 226 F. 989 (S.D.N.Y.
1915); In re Chateaugay Corporation, et al., 155 B.R. 625 (Bankr.
S.D.N.Y. 1993) (Conrad, J.) ("the character of debts are fixed
when incurred, and these rights remain with the claim when
transferred."); In re Greer West Investment Limited Partnership,
81 F.3d 168, 1996 WL 134293 (9th Cir. 1996) (transfer of claim
from insider to non-insider did not alter claim's "insider"
status).

In short, there is no mystical transformation in the character,
nature or other rights attendant to a claim upon its transfer from
one entity to another after the commencement of a chapter 11 case.

Rule 3001(e) of the Federal Rules of Bankruptcy Procedure sets
forth the mechanical procedures for the transfer of claims against
a chapter 11 debtor.  Nowhere in Rule 3001(e) does the United
States Supreme Court suggest that an assignee loses any right that
attaches to a claim or that multiple claims are aggregated upon
their transfer to a single transferee.  See Fed. R. Bankr. Proc.
3001(e).  A claim purchaser that follows all of the procedures set
forth in Rule 3001(e) succeeds to all of the rights and incidents
which go with those claims, including, but not limited to, the
right to vote each impaired claim.

                      Case Law On Point

Judge Sellers, in In re Concord Square Apartments of Wood County,
Ltd., 174 B.R. 71, 74 (Bankr. S.D. Ohio 1994), explained a decade
ago that "a purchaser of claims is entitled to a vote for each
separate claim it holds. . . .  The language [of section 1126(c)]
distinguishes between claim-holders and claims.  'The formula
contained in Sec. 1126(c) speaks in terms of the number of claims,
not the number of creditors, that actually vote for or against the
plan.'  In re Gilbert, 104 B.R. 206, 210 (Bankr. W.D. Mo. 1989).
Thus a [creditor] which holds multiple claims, has a voting right
for each claim it holds.").

"It would not make much sense to require a vote by creditors who
held 'more than one-half in number of the allowed claims' while at
the same time limiting a creditor who held two or more of those
claims to only one vote.  If allowed claims are to be counted,
they must be counted regardless of whose hands they happen to be
in."  In re Figter Limited, 118 F.3d 635 at 640 (slip op. at 14)
(9th Cir. 1997), citing Concord Square and Gilbert.

The bundles of rights that are incident to individual claims are
fixed upon the commencement of a chapter 11 case.  Those bundles
of rights do not merge or unwind during a chapter 11 proceeding,
except, perhaps, at the option of a holder of multiple claims.
The right to vote the claim is an incident of ownership of the
claim itself.  Because a claim is a separate and distinct claim on
the date the bankruptcy petition is filed, carrying with it an
unfettered right to be voted if placed in an impaired class, it
does not lose that essential character simply because it is
transferred post-petition to a party who may hold another
unrelated claim.  The transferee is entitled to no more and no
less than precisely what the transferor had on the petition date.
Any suggestion to the contrary is both illogical and contrary to
the plain language contained in the Bankruptcy Code.

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 SATELLITE: Has Until May 1 to Decide on Leases
------------------------------------------------------
The United States Bankruptcy Court for the District of Maine gave
Pegasus Satellite Communications, Inc., and its debtor-affiliates
an approval to extend their deadline to assume, assume and assign,
or reject non-residential real property leases through
May 1, 2005.

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)


PILLOWTEX CORP: Court Approves Sale of Trademark Rights to GGST
---------------------------------------------------------------
On Oct. 7, 2003, the U.S. Bankruptcy Court for the District of
Delaware authorized Pillowtex Corporation and its debtor-
affiliates to sell certain of their assets and approved procedures
for the subsequent sale or assumption of the Debtors' interest in
certain real property, executory contracts and unexpired leases,
and the assumption of certain liabilities.  The Court approved an
amended and restated asset purchase agreement for GGST, LLC's
purchase of certain assets of and certain designation rights
relating to the personal property, real estate and leasehold
interests of the Debtors, including Pillowtex Corp. and Fieldcrest
Cannon, Inc.  The Debtors were also authorized to sell, assign,
and transfer to GGST or its designees, all trademarks owned by the
Debtors.

Subsequently, the Debtors sold, assigned and transferred to
Official Pillowtex, all right, title and interest, including
goodwill, in and to the United States and foreign trademarks,
they owned.

James E. O'Neill, Esq., at Pachulski, Stang, Ziehl, Young, Jones,
& Weintraub, P.C., in Wilmington, Delaware, informs Judge Walsh
that Official Pillowtex is having difficulty protecting its
rights in the trademarks assigned by Pillowtex Corp. and
Fieldcrest Cannon in certain Middle Eastern countries, including
the United Arab Emirates.

To assist in protecting those rights, GGST and Official Pillowtex
ask the Court to confirm the sale of the Debtors' trademark
rights to Official Pillowtex.

                          *     *     *

Judge Walsh confirms that:

   (a) Pillowtex Corporation and Fieldcrest Cannon are currently
       in bankruptcy proceedings before the U.S. Bankruptcy Court
       for the District of Delaware;

   (b) the Court approved the sale of the Debtors' trademark
       rights to GGST; and

   (c) the Debtors assigned and transferred their trademark
       rights to Official Pillowtex.

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)


RURAL/METRO CORP: Moody's Junks $140M Senior Subordinated Notes
---------------------------------------------------------------
Moody's Investors Service assigned ratings to the proposed debt of
Rural/Metro Corporation and Rural/Metro LLC, a newly created
subsidiary of Rural/ Metro Corporation.  The proceeds from the
proposed transactions will be used to refinance the existing debt
of Rural/Metro.

Concurrently, Moody's upgraded Rural/Metro Corp.'s senior implied
rating to B2 from B3 reflecting improved operations and its return
to profitability over the past few years.  The change in the
ratings outlook to stable, from negative, reflects the expectation
of continued enhancement of the ratio of free cash flow relative
to total debt to the middle - upper single digits.

A list of Moody's rating actions:

   -- Rural/Metro LLC

       B2 assigned to the proposed $155 million senior secured
        credit facility consisting of a $20 million Senior Secured
        Revolving Credit Facility, due 2010; a $15 million Senior
        Secured Letter of Credit Facility, due 2011; and a $120
        million Senior Secured Term Loan B, due 2011

       Caa1 assigned to the proposed $140 million Senior
        Subordinated Notes, due 2015

   -- Rural/Metro Corp.

       Assigned Caa2 to the proposed $50 million Senior Discount
        Notes, due 2016 (not guaranteed)

       Upgraded the existing Senior Secured Revolving Credit
        Facility, due 2007, to B2 from B3 (to be withdrawn
        concurrent with the proposed transaction)

       Upgraded the existing Senior Implied Rating to B2 from B3

       Affirmed the existing $150 million 7.875% Senior Notes,
        due 2008, rated B3

       Lowered the Senior Unsecured Issuer Rating to Caa2 from
        Caa1(non-guaranteed exposure)

The ratings outlook changed to stable from negative.  The ratings
are predicated upon review of executed documents.

The upgrade in the senior implied rating to B2 reflects an
improvement in the Company's core ambulance operations. Over the
past few years, Rural/Metro Corp. has terminated unprofitable
contracts, exited weak markets, reduced corporate overhead, used
technology to enhance labor utilization and productivity,
stabilized collections, and improved its payer mix.

The Company has also benefited from a more favorable reimbursement
environment, and continued strong demand for its ambulance
transport services.  As a result, revenue has grown on a
compounded basis by 7.8% between 2002 and 2004, following several
years of either flat or declining revenue growth.

Similarly, Rural Metro Corp. has become profitable again and
EBITDA margins have recently expanded to over 10% of revenue.
Additional factors supporting the ratings include a stable
customer base with a 100% retention rate and long-term
relationships, strong geographic and customer diversification, and
the absence of any acquisitions over the past few years.

The ratings are constrained by a low absolute level of free cash
flow on a historic basis as well as a modest level of projected
free cash flow relative to sizable debt, continued high financial
leverage and negative equity, potential reimbursement risk, and
moderate union representation for its ambulance service workforce.

The Company has a significant amount of uncollectible revenue as a
result of providing uncompensated care.  While uncompensated care
is inherent in the mandatory provision of ambulance transport to
all patients, including the uninsured, this care constrains the
absolute level of operating cash flow from operations.

The change in the ratings outlook to stable from negative
anticipates that the Company will continue to grow revenue
internally and expand operating margins through controlling costs,
increasing volume from existing customers, and adding new
contracts.  Continued revenue growth and increased margins should
translate into higher free cash flow generation and debt reduction
over time, improving debt coverage statistics.

Moody's is concerned with the high level of capital expenditures
needed to support the ambulance business and the low level of
operating margins inherent in the provision of ambulance transport
services.  Any unexpected adverse changes, such as greater pricing
pressure and/or an increase in bad debt expense, could inhibit the
company's recent progress, prevent an improvement in its credit
metrics, and result in negative free cash flow, likely resulting
in increased reliance on its revolving credit facility.

Pro forma for the transaction, credit statistics are modest.
During the intermediate term, adjusted free cash flow as a
percentage of adjusted debt is expected to range in the mid to
upper single digits.  Financial leverage, as measured by the ratio
of Debt/EBIT, is expected to decline from close to 6.3 times to
slightly over 4.7 times over the next two years (4.6 times
EBITDA).  Similarly, the level of interest coverage (EBIT to
interest) is expected to increase to 2.1 times.

The Company is proposing to issue $50 million senior discount
notes at Rural/Metro, $140 million in senior subordinated notes at
Rural/Metro LLC, and a $155 million senior secured credit
facility, at Rural/Metro LLC, consisting of a $120 million Term
Loan B, $15 million Letter of Credit Facility, and a $20 million
undrawn revolver.  The majority of proceeds, along with
approximately $7.4 million in cash, will be used to tender the
company's existing 7.875% senior notes due March 2008 and repay
the company's existing revolver facility.

The Company will use the letter of credit as collateral for its
insurance policies, and as a result, lower its overall costs for
worker's compensation, auto insurance, and other insurance
expenses.  The transaction also reduces its overall cash expense
and provides the capital to enter new markets on a selective
basis.

The upgrade of the rating of Rural/Metro's existing senior credit
facility to B2 from B3, and the assignment of a B2 rating for the
proposed senior credit facility at Rural/Metro LLC reflects the
priority position in the capital structure and the expectation of
asset coverage in a distressed scenario.  In Moody's opinion,
excess collateral coverage in a distressed scenario would not
likely be ample enough to support notching above the B2 senior
implied rating despite the fact that senior secured debt at the
Rural/Metro LLC level ranks higher than senior debt at the parent
level. Further supporting the rating is the fact the total
committed bank facilities account for over 40% of total pro-forma
debt.

The credit facilities are secured by a first lien on the capital
stock of the borrower and its subsidiaries, 65% of the capital
stock of first tier non-U.S. subsidiaries, and all property and
assets of the borrower and its guarantors.  There is a downstream
guarantee from the company's parent, Rural/Metro, as well as an
upstream guarantee from the operating subsidiaries.

The affirmation of the B3 rating for the existing senior notes at
Rural/Metro reflects the benefit from the same guarantee as the
senior credit facility.

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

The assignment of a Caa2 rating for the proposed senior discount
notes reflects the effective subordination to any existing and
future debt at the Rural/Metro LLC level as well as the absence of
any security supporting this class of debt.  These notes do not
benefit from any guarantee package.

The overall liquidity of Rural/Metro is considered adequate as it
is expected that internally generated cash flow should be
sufficient to fund working capital, capital expenditures and debt
service over the next year.  The Company should also be able to
access external liquidity through its $20 million revolving credit
facility.

The Company's liquidity is constrained by the modest level of free
cash flow relative to required capital expenditures, and limited
cash on hand.  Any additional unexpected capital expenditures,
could pressure free cash flow.  Additionally, there is an absence
of an alternate source of liquidity, since all assets will be
encumbered under the credit agreement.

Rural/Metro Corporation provides emergency and non-emergency
medical transportation, fire protection and other safety services
in 23 states and approximately 400 communities throughout the
United States.  Revenue for the twelve months ended December 31,
2004 was approximately $541 million.


RURAL/METRO: Obtains Commitment for New Secured Credit Facilities
-----------------------------------------------------------------
Rural/Metro Corporation (NASDAQSC: RURL) reported that in
connection with the financing of its previously announced tender
offer for and consent solicitation relating to its 7-7/8% Senior
Notes due 2008, it has obtained a commitment for new senior
secured credit facilities.

The facilities are expected to include a $120 million term loan B
maturing in 2011 and a $20 million revolving credit facility
maturing in 2010.  The facilities also are expected to include a
$15 million letter of credit facility maturing in 2011.  The
borrower under the facilities is expected to be a newly formed
wholly owned subsidiary of the company.  The borrower also will
offer $140 million in aggregate principal amount of senior
subordinated notes due 2015.  Rural/Metro intends to offer
approximately $50 million in gross proceeds of senior discount
notes due 2016.

Rural/Metro expects to use the borrowings under the new senior
secured facilities and the proceeds from the offerings of the
notes, in addition to about $7 million of the company's cash, to
finance its tender offer for and consent solicitation relating to
its existing senior notes, to redeem any existing senior notes not
acquired in the tender offer, to repay approximately $153 million
of outstanding revolving credit facility borrowings and to pay
certain fees and expenses related to the above transactions.

Any issuance of senior subordinated notes or senior discount notes
is expected to be through a private placement that would be resold
by the initial purchasers to qualified institutional buyers under
Rule 144A of the Securities Act of 1933, as amended, and outside
the United States pursuant to Regulation S of the Securities Act.
The commitment for the credit facilities is subject to certain
conditions, including the successful completion of the proposed
offerings of the notes.  The final terms of any new credit
facilities, senior subordinated notes or senior discount notes are
still subject to negotiation.  Other aspects of the refinancing
plan are still under discussion with financing sources and may
vary significantly in light of market and other conditions
existing at the time the refinancing plan is finalized.  There can
be no assurance that the borrower or company will successfully
enter into its new senior secured facilities or complete the
issuance of its senior subordinated notes or senior discount
notes.

Any senior subordinated notes or senior discount notes will not be
registered under the Securities Act and may not be offered or sold
in the United States absent registration or an applicable
exemption from the registration requirements.  This press release
does not constitute an offer to sell or the solicitation of an
offer to buy any security in any jurisdiction in which such offer
or sale would be unlawful.

                       About the Company

Rural/Metro Corporation -- http://www.ruralmetro.com/ -- provides
emergency and non-emergency medical transportation, fire
protection, and other safety services to approximately 400
communities in 23 states.

At Sept. 30, 2004, Rural/Metro Corp.'s balance sheet showed a
$187,715,000 stockholders' deficit, compared to a $192,226,000
deficit at June 30, 2004.


RURAL/METRO: S&P Junks $140 Million Senior Subordinated Notes
-------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Scottsdale, Arizona-based medical transport
services provider Rural/Metro Corporation, the holding company.
Standard & Poor's has also assigned its 'B' senior secured debt
rating and '2' recovery rating to Rural/Metro LLC's proposed
$20 million senior secured revolving credit facility maturing in
2010 and a $120 million senior secured term loan B maturing in
2011.

Rural/Metro LLC is an operating company and subsidiary of
Rural/Metro Corp.

At the same time, Standard & Poor's assigned its 'CCC+'
subordinated debt rating to Rural/Metro LLC's proposed
$140 million senior subordinated notes due 2015 and to Rural/Metro
Corporation's proposed $50 million paid-in-kind notes maturing in
2016.  As part of this transaction, the company is also
establishing a $15 million letter-of-credit facility, with a $30
million accordion feature, maturing in 2011.  This facility is
primarily for insurance purposes and is not rated by Standard &
Poor's.

The company is expected to use the proceeds from the term,
subordinated, and holding company debt, in addition to about
$7 million of on-hand cash, to refinance $150 million of existing
senior notes, repay approximately $153 million of outstanding
revolving credit facility borrowings, and fund $15 million of
related transaction fees and tender premiums.  Pro forma for the
transaction, Rural/Metro will have $313 million of total debt
outstanding (including the $50 million of holding company debt).

The outlook on Rural/Metro is stable.

"The low-speculative-grade ratings reflect the company's exposure
to government reimbursement combined with its relatively thin
operating margins, as well as concerns regarding the
sustainability of price increases from its commercial payors,"
said Standard & Poor's credit analyst Jesse Juliano.  "The ratings
also reflect Rural/Metro's large debt burden.  These issues are
only partially offset by the company's diverse and long-standing
client list, and the improvement in the Medicare reimbursement
environment."

Rural/Metro is the second-largest commercial provider of medical
transport services, behind competitor American Medical Response,
Inc.  Rural/Metro mainly provides emergency and non-emergency
medical transportation services to about 400 communities in
23 states.  The company generally contracts with governmental
entities, hospitals, nursing homes, and other health care
facilities.  Rural/Metro also provides fire protection services to
residential and commercial property owners.  Medical transport and
fire protection services represent about 86% and 14% of total
revenues, respectively.


SMC HOLDINGS: Files for Chapter 11 Protection in Delaware
---------------------------------------------------------
SMC Holdings Corporation and its subsidiaries filed for voluntary
chapter 11 petitions in the United States Bankruptcy Court for the
District of Delaware to complete and effect a prepackaged joint
plan of reorganization.  As of Jan. 31, 2005, the Debtors owed
approximately $123.7 million to its secured bank claimholders, and
approximately $66.9 million to its senior note claimholders.

                           Terms of the Plan

The Plan only impairs two classes of creditors and two classes of
equity holders, namely:

      -- the secured bank claimholders;
      -- the senior note claimholders;
      -- the SMC Holdings Stockholders; and
      -- the EFA stockholders.

Pursuant to the Plan:

     (i) each secured bank claimholder will receive a full
         satisfaction of its allowed secured bank claims, and its
         ratable portion of the secured bank allocation of the
         reorganized SC Corp. common stock;

    (ii) each secured bank claim holders, who also holds secured
         bank priming loan claims, will be paid in cash the amount
         equal to the claim;

   (iii) each senior noteholder will be receive, in full
         satisfaction of its allowed claim, and its ratable
         portion of the senior note allocation of the reorganized
         company common stock; and

    (iv) equity interest holders in SMC Holdings and EFA will not
         receive any distributions or retain any of such equity
         interests.

The Debtors expect no obstacle to the confirmation and
implementation of the Plan after 93% in amount and 66-2/3% in
number of the secured bank claimholders, and 100% in amount and in
number of the senior note claim holders have voted to accept the
Plan.

In April 2003, the Debtors engaged The Blackstone Group to assist
them in examining options to restructure and repay the debts owed
to their impaired creditors.  Castle Harlan, Inc., on behalf of
Castle Harlan Partners IV, LP, submitted the best and highest
offer to purchase substantially all of the Debtors' assets for
approximately $120 million.  Although this was the highest and
best offer, the amount is more than $50 million less than the
Debtors' outstanding debt.  As a result, the terms of the asset
sale was never finalized.

On Dec. 23, 2004, following the Debtors' plan solicitation, Castle
Harlan delivered an unsolicited offer which increased its previous
offer to approximately $135 million.  Following the receipt of
this latest offer, the majority of the bank claim holders and
senior note claimholders indicated that they would rather go
forward with the Plan than have the Debtors sell their assets to
Castle Harlan for a lesser price.

Headquartered in St. Paul, Minnesota, SMC Holdings and its
subsidiaries provide baggage cart, locker and stroller services at
airports, train stations, bus terminals, shopping centers, ski
resorts and entertainment facilities across the world.  The
Company and its debtor-affiliates filed for chapter 11 protection
on Feb. 10, 2005 (Bankr. D. Del. Case No. 05-10395).  Jason M.
Madron, Esq., and Mark D. Collins, Esq., at Richards, Layton &
Finger, P.A., and Douglas P. Bartner, Esq., and Michael H. Torkin,
Esq., at Shearman & Sterling, LLP, represent the Debtors in their
restructuring efforts.  When the Debtors filed for bankruptcy,
they estimated more than $100 million in assets and debts.


SMC HOLDINGS CORP: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Lead Debtor: SMC Holdings Corporation
             4455 White Bear Parkway
             St. Paul, Minnesota 5510-7641

Bankruptcy Case No.: 05-10395

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      Smarte Carte Corporation                   05-10396
      Smarte Carte, Inc.                         05-10397
      Smarte Carte Europe, Inc.                  05-10398
      EFA Acquisition Corporation                05-10399

Type of Business: The Debtors provide baggage cart, locker and
                  stroller services at airports, train stations,
                  bus terminals, shopping centers, ski resorts
                  and entertainment facilities across the world.
                  See http://www.smartecarte.com/

Chapter 11 Petition Date: February 10, 2005

Court:  District of Delaware (Delaware)

Judge:  Mary F. Walrath

Debtor's Counsel: Jason M. Madron, Esq.
                  Mark D. Collins, Esq.
                  Richards, Layton & Finger, P.A.
                  One Rodney Square
                  PO Box 551
                  Wilmington, Delaware 19899
                  Tel: (302) 651-7595
                  Fax: (302) 651-7701

                        -- and --

                  Douglas P. Bartner, Esq.
                  Michael H. Torkin, Esq.
                  Shearman & Sterling, LLP
                  599 Lexington Avenue
                  New York, New York 10022

Auditors and
Tax Consultants:  KPMG Peat Marwick LLP

Secured Bank Agent
And Exit
Facility Agent:   Black Diamond

Counsel to
Black Diamond:    Timothy R. Pohl, Esq.
                  Skadden, Arps, Slate, Meagher & Flom, LLP
                  333 West Wacker Drive
                  Chicago, Illinois 60606

Estimated Assets: More than $100 Million

Estimated Debts:  More than $100 Million

Consolidated List of Debtors' 20 Largest Unsecured Creditors:

    Entity                       Nature of Claim    Claim Amount
    ------                       ---------------    ------------
BDCM Opportunity Fund, LP        Noteholder          $22,000,000
c/o Black Diamond Capital                           (plus accrued
Management, LLC                                      interest)
One Conway Park
100 Field Drive, Suite 140
Lake Forest, IL 60045

BDC Finance LLC                  Noteholder          $13,000,000
c/o Black Diamond Capital                           (plus accrued
Management, LLC                                      interest)
One Conway Park
100 Field Drive, Suite 140
Lake Forest, IL 60045

General Electric Capital         Noteholder           $5,000,000
Corporation                                         (plus accrued
777 Long Ridge Road                                  interest)
Building 1st Floor
Stamford, CT 06927

St. Paul Travelers               Contract             $1,019,261
200 North LaSalle Street
Suite 1200
Chicago, IL 60601
Fax: (312) 750-2830

The Blackstone Group             Contract             $1,000,000
345 Park Avenue, 30th Floor
New York, NY 10154
Fax: (212) 583-5707

Los Angeles & Ontario            Contract               $393,006
International Airports
City of Los Angeles
Department of Airports
PO Box 92216
Los Angeles, CA 90009-2216

R&R Industrial (HK) Limited      Contract               $383,414
23 Liangong Road
Longbau Town, Bao'an District
Shenzhen, China 518109
Fax: 86-755-2774-5595

New York State Department of     Taxes                  $230,000
Taxation & Finance
1011 East Touhy Avenue, Suite 475
Des Plaines, IL 60018

State of Florida                 Taxes                  $170,000
Department of Revenue
4415 West Harrison Street
Suite 448
Hillside, IL 60162

Walt Disney World Company        Contract               $150,832
PO Box 3232
Anaheim, CA 92803

Port Authority of New York and   Contract               $102,114
New Jersey
225 Park Avenue South
New York, NY 10003

International Fidelity           Contract               $100,000
Insurance Company
c/o International Bond & Marine
2 Hudson Place, 4th Floor
Hoboken, NJ 07030

Siegfried Larch                  Contract                Unknown
Carrera Roureda de Sansa 38
Atic 1
Andorra la Vella
Andorra

Lazaro Albo                      Contract                Unknown
2900 Southwest 4th Avenue
Miami, FL 33129

Leslie Johnson                   Litigation              Unknown
c/o Andrew J. Schatkin, Esq.
Attorney for Plaintiff
350 Jericho Turnpike
Jericho, NY 11753

Larry Mauriello, Esq.            Litigation              Unknown
Richard Gugliotta, Esq.
Attorneys for Plaintiff
1941 Williambridge Road
Bronx, NY 10461

Martin Levinson &                Litigation              Unknown
Lilly Levinson
c/o Eric B. Epstein, Esq.
Attorney for Plaintiff
500 5th Avenue, Suite 1150
New York, NY 10110

Dieter Waldmannstetter &         Litigation              Unknown
Hilly Mayr Waldmannstetter
c/o Thomas G. Gorman, Esq.
Schiff, Gorman & Krkljes
One East Wacker Drive, 35th Floor
Chicago, IL 60601

Rea Smith                        Litigation              Unknown
c/o Paul Markstein
Attorney for Plaintiff
574 Route 303
Blauvelt, NY 10913

Mary Cowhead                     Litigation              Unknown
c/o Ronald Gutworth
Attorney for Plaintiff
90 South Main Street
Orange, NJ 07050


SOLUTIA INC: Court Approve CP Films & 3M Global Supply Agreement
----------------------------------------------------------------
Minnesota Mining and Manufacturing Corporation is CPFilms, Inc.'s
second largest customer.  CPFilms is one of Solutia Inc.'s
debtor-affiliate.  Historically, CPFilms and 3M have entered into
a number of separate purchase agreements each governing a specific
product and containing their own terms and conditions.

CPFilms has determined that entering into one global supply
agreement that sets forth uniform terms for purchases, which would
then be supplemented with specific subcontracts would be
beneficial to its business.  In addition, 3M has indicated that
the existence of a global supply agreement could grant CPFilms
greater access to future sales to 3M because many of 3M's sites
will only do business with a supplier that has entered into a
global supply agreement.  Moreover, under the terms of one or more
of the specific Subcontracts, to permit CPFilms to manufacture
product under the Master Agreement and the Subcontracts, 3M may
license its technology to CPFilms, permit CPFilms to utilize 3M
equipment at CPFilms' facilities and provide CPFilms with 3M
tooling, parts and materials to be maintained at CPFilms'
facilities.

Therefore, CPFilms has decided to enter into a Master Agreement
with 3M.  The Master Agreement establishes a business relationship
in which 3M may request that CPFilms produce, package, process or
store certain products for 3M at agreed-on pricing and in
accordance with 3M's packaging and product specifications and
other written instructions.  When CPFilms and 3M identify certain
Products that a specific 3M business unit will purchase from
CPFilms on a recurring basis, the parties will enter into an
exhibit to the Master Agreement that will describe those Products,
their prices, and any Subcontract variations from the Master
Agreement.  In addition, 3M will order Products and CPFilms will
accept orders, by issuing an individual purchase order or a
release from a blanket purchase order. The terms of the Master
Agreement will also apply to those purchase orders.

Although the specific prices for products will be as set forth in
a Subcontract or purchase order, the Master Agreement provides a
mechanism for price adjustments.  If CPFilms and 3M cannot agree
on any Product's price adjustment, an independent auditor may be
hired, at 3M's expense, to review CPFilms' records and determine
the appropriate price change.

M. Natasha Labovitz, Esq., at Gibson, Dunn & Crutcher LLP, in New
York, relates that the Master Agreement neither obligates CPFilms
to sell nor obligates 3M to purchase any Products not specifically
set forth in a Subcontract or purchase order.  CPFilms anticipates
that it will enter into number of Subcontracts and purchase orders
governing the supply of Products in the ordinary course of its
business.  If the entry of any Subcontract or purchase order is
outside of the ordinary course of its business, CPFilms will file
a separate motion with the Court seeking permission to enter into
the Subcontract or purchase order.

CPFilms sought and obtained the approval of the U.S. Bankruptcy
Court for the Southern District of New York of the Master
Agreement.

Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications.  The Company
filed for chapter 11 protection on December 17, 2003 (Bankr.
S.D.N.Y. Case No. 03-17949).  When the Debtors filed for
protection from their creditors, they listed $2,854,000,000 in
assets and $3,223,000,000 in debts. (Solutia Bankruptcy News,
Issue No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000)


STANDARD COMMERCIAL: Declares $0.0875 Quarterly Cash Dividend
-------------------------------------------------------------
Standard Commercial Corporation's (NYSE: STW) Board of Directors
has declared a quarterly cash dividend of $0.0875 per share on the
common shares of the Company, payable on March 15, 2005, to common
shareholders of record at the close of business on Feb. 28, 2005.

                        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.


STAR GAS: Fitch Revises Outlook to Negative After Inergy Purchase
-----------------------------------------------------------------
Fitch Ratings has revised the Rating Watch on Star Gas Partners,
L.P. to Negative from Positive on this debt:

     -- $265 million principal amount of 10.25% senior notes due
        2013 (co-issued with its special purpose financing
        subsidiary Star Gas Finance Company) 'B-'.

The securities were placed on Rating Watch Positive on Nov. 18,
2004, following the announcement that Star Gas had agreed to sell
its propane operations to Inergy, L.P. for $475 million in cash.
However, the debt reduction/liquidity benefits of the sale of the
propane operations have not been as great as previously believed
due to poor operating results and elevated working capital needs.

Today's rating action follows the release of Star Gas' results of
operations for the fiscal 2005 first quarter ended Dec. 31, 2004.
Of particular concern to Fitch is the continued deterioration of
operating results for its heating oil business reflecting high
levels of net customer attrition, price induced conservation, and
margin compression.  Furthermore, Star Gas is unable to give
assurances that the initiatives it is undertaking to improve
results and decrease the customer attrition will be effective.

Fitch is also concerned with Star Gas' weakened liquidity
position.  In addition to its senior unsecured notes, $119 million
working capital borrowings were outstanding under its secured $260
million revolving credit facility.  The company also reported that
$40 million of the proceeds it received from the sale of propane
operations have been invested in working capital assets (heating
oil).  As a result, with the repayment of its affiliates' secured
long-term debt including associated premiums and fees, only $103.5
million is currently available to repurchase the $265 million of
outstanding senior notes.  Star Gas is obligated under the
indenture for the senior notes to apply the remaining net proceeds
from the sale of the propane operations to reduce the senior notes
or make investments in assets or capital expenditures useful to
Star Gas or its subsidiaries.  Star Gas disclosed it expects it
may utilize a portion of the remaining proceeds to meet future
working capital needs.

Typically the second fiscal quarter during the peak of the heating
season, January through March, is critical to annual results of
operations since it accounts for 45% of heating oil volumes sold.
Fitch will continue to monitor operating and financial results as
they are disclosed by the company.  A continuation of current
operating trends could lead to further negative rating action.


STATE STREET: Must File Monthly Operating Reports by February 18
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of New York
directed State Street Houses, Inc., and State Street Associates,
L.P., to file monthly operating reports with the Court and the
U.S. Trustee for Region 2 by Feb. 18, 2005.  The Debtors should
file the monthly operating reports for the periods commencing
May 21, 2004 -- the bankruptcy petition date -- through
Dec. 31, 2004.

Judge Stephen D. Gerling further ordered that in the event the
Debtors fail to file the MORs by Feb. 18, their chapter 11 cases
will be converted to a chapter 7 proceeding when the U.S. Trustee
applies for the conversion and with no requirement to inform the
Debtors or their attorneys.

If a conversion happens, the Debtors must:

   (1) turnover to the Chapter 7 Trustee all of the Debtors'
       records and properties as required by Rule 1019(5) of the
       Federal Rules of Bankruptcy Procedure;

   (2) file an accounting of all receipts and disbursements made
       during the pendency of the chapter 11 cases no later than
       30 days after the effective date of the conversion; and

   (3) file a schedule of all unpaid debts incurred after the
       bankruptcy petition date no later than 15 days after the
       effective date of the conversion.

The Court handed down the order after Guy A. VanBaalen, the
Assistant U.S. Trustee for Region 2, pointed out the Debtors'
neglect in filing the MORs and requested the conversion.

Headquartered in Utica, New York, State Street Houses, Inc., is a
New York Corporation and legal titleholder of Kennedy Plaza
Apartments in Utica, New York.  State Street Houses and State
Street Associates, L.P., filed for chapter 11 protection on
May 21, 2004 (Bankr. N.D.N.Y. Case No: 04-63673).  When the
Debtors filed for bankruptcy, they reported estimated assets and
debts amounting between $10 million to $50 million.


STELCO INC: Algoma Steel Withdraws from Purchase Talks
------------------------------------------------------
Algoma Steel Inc. said it does not intend to submit a binding
offer for Stelco Inc.  Algoma has been engaged in due diligence
and in discussions with Stelco and its stakeholders since mid-
December.  Denis Turcotte, President and Chief Executive Officer,
stated, "Algoma's due diligence has confirmed that there are
significant potential benefits in a combination of Algoma and
Stelco, but given the risks and obligations associated with the
acquisition, we have concluded that proceeding with the
transaction would not be in the best interests of our
shareholders."

Denis Turcotte further stated, "The efforts of our people across
the Company continue to contribute to strong financial
performance.  This has allowed us to investigate strategic options
that we will continue to explore in the months ahead."  Ben
Duster, Algoma's Chairman, said, "We believe Algoma can continue
its success in the North American steel industry, however, the
Company is also mindful of the potential for value creation
through either acquisitions or industry consolidation.  The Board
will continue to evaluate all of these opportunities on behalf of
its shareholders."

                       About Algoma Steel

Algoma Steel Inc. manufactures and markets steel plates.  The
products of the Group include sheets and strips, plates and
seamless tubular steels.

Stelco, Inc. -- http://www.stelco.ca/-- which is currently
undergoing CCAA restructuring proceedings, is a large, diversified
steel producer. Stelco is involved in all major segments of the
steel industry through its integrated steel business, mini-mills,
and manufactured products businesses. Consolidated net sales in
2003 were $2.7 billion.


STELCO INC: Developing Reasonable Plan to Address Pension Issues
----------------------------------------------------------------
Stelco Inc. (TSX:STE) has received a letter from Mr. James Arnett,
Special Advisor on the Steel Industry to the Government of
Ontario, regarding the funding of the Company's pension plans.

In the letter, received on Feb. 9, Mr. Arnett states that "I have
been instructed to advise you that upon emergence from CCAA,
Stelco will not be entitled to the benefit of Section 5.1."  The
letter also states that "...the Government supports your auction
process and, to that end, is prepared to be flexible in discussing
a fair and reasonable plan for the consequent need to fund the
pension deficiencies on a solvency basis".  Mr. Arnett also offers
his commitment "on behalf of the Government, to working
constructively with the company, its employees, stakeholders and
bidders to address this issue."

Stelco has stated that it will actively negotiate with the Ontario
Government to develop a fair and reasonable plan to address this
potential change in regulation under the Pension Benefits Act.
If the Government passes a regulation to simply revoke the 5.1
election, the solvency deficiency of $1.3 billion, as at Dec. 31,
2004, will have to be amortized over a five- year period.  For
example, if the election had been rescinded as of Jan. 1, 2004,
the total 2004 cash contributions to Stelco's four main plans
would have increased from $64 million to $353 million.

Hap Stephen, Stelco's Chief Restructuring Officer, said, "Our goal
is a reasonable and responsible solution that will serve the best
interests of the Company and all its stakeholders, including the
Government of Ontario, and also reflect the Company's ability to
make payments to reduce the solvency deficiency."

Mr. Stephen added that, "Stelco has consistently stated that the
pension funding issue is front-and-centre for the Company and for
the bidders.  The bidders are well aware of the issue, of our
view, and of the Court's stated assumption that they will keep the
issue in mind in making their bids."

The Ontario Government amended Regulation 909 under the Pension
Benefits Act in 1992 to allow a pension plan with over
$500 million in assets to elect to cease funding the plan on a
solvency basis.  Pension Plans that have taken the 5.1 election
are exempt under the Regulation from making special payments to
fund a solvency deficiency.  These plans, however, must continue
to be funded on a going concern basis, and pay higher Pension
Benefit Guarantee Fund premiums in accordance with the Pension
Benefits Act.

Stelco, Inc. -- http://www.stelco.ca/ -- which is currently
undergoing CCAA restructuring proceedings, is a large, diversified
steel producer.  Stelco is involved in all major segments of the
steel industry through its integrated steel business, mini-mills,
and manufactured products businesses.  Consolidated net sales in
2003 were $2.7 billion.


STELCO INC: Ontario Court Extends CCAA Protection Until Apr. 29
---------------------------------------------------------------
Stelco Inc. (TSX:STE) obtained an Order of the Superior Court of
Justice (Ontario) extending the stay period under its Court-
supervised restructuring to Apr. 29, 2005.

The extension will enable the Company to continue negotiations
with its stakeholders, complete the capital raising and asset sale
process, complete the creditor claims procedure and develop a plan
of arrangement or compromise.

Courtney Pratt, Stelco President and Chief Executive Officer said,
"This extension is in the best interests of all stakeholders.  It
provides the time and the certainty in which we can move closer to
the goal of a successful restructuring."

Stelco, Inc. -- http://www.stelco.ca/-- which is currently
undergoing CCAA restructuring proceedings, is a large, diversified
steel producer. Stelco is involved in all major segments of the
steel industry through its integrated steel business, mini-mills,
and manufactured products businesses. Consolidated net sales in
2003 were $2.7 billion.


STERICYCLE INC: 4th Qtr. Net Income Up 3.5% to $19.1 Million
------------------------------------------------------------
Stericycle, Inc. (NASDAQ:SRCL), the United States' leading
provider of medical waste management and compliance services for
the healthcare community, reported financial results for the
fourth quarter and full year of 2004.

              Fourth Quarter and Full Year Results

Revenues for the quarter ended Dec. 31, 2004 were $138.9 million,
up 21.2% from $114.6 million in the same quarter last year.
Acquisitions less than 12 months old contributed approximately
$18 million in revenues for the quarter. Gross profit was $60.5
million, up 18.4% from $51.1 million in the same quarter last
year. Gross profit as a percent of revenues was 43.6% versus 44.6%
in the fourth quarter of 2003.

Net income for the fourth quarter of 2004, including the charges
related to the redemption of our senior subordinated notes, rose
3.5% to $19.1 million, up from $18.4 million in the fourth quarter
of 2003. As we had previously announced, we redeemed the remaining
$50.1 million of our 12-3/8% senior subordinated notes in November
2004. The redemption premium was a cash pre-tax charge of $3.1
million, and the accelerated amortization of financing fees
associated with the notes was a non-cash pretax charge of $1.1
million. On an after-tax basis, these charges totaled
approximately $2.6 million, or $0.06 per diluted share.

Earnings per diluted share, including this charge, for the fourth
quarter of 2004 were $0.42, up 5.0% from $0.40 in the fourth
quarter of 2003. Weighted shares outstanding used to determine
earnings per diluted share were 45,858,482 for the fourth quarter
of 2004 and 46,311,916 for the fourth quarter of 2003.

For the year ended December 31, 2004, revenues increased to $516.2
million, up 13.9% from $453.2 million in the same period a year
ago. Gross profit was $228.2 million, up 16.1% from $196.6 million
in the same period a year ago. Gross profit as a percent of
revenues increased to 44.2% for the year ended December 31, 2004
from 43.4% for the same period in 2003. Earnings per diluted
share, including $0.06 in charges related to the redemption of our
senior subordinated notes, increased 18.2% to $1.69 from $1.43 per
diluted share in the same period a year ago.

Our total debt to capitalization percentage ratio at December 31,
2004 was 29.1% versus 28.1% at December 31, 2003.

Miller said, "During the year, we continued to execute our proven
business model, generating strong sales growth, and record income
from operations. With a strong balance sheet, the cash flow from
operations of $114.6 million for the year was used to strengthen
the business and funded $72.4 million in acquisitions, $33.2
million in capital spending, and $34.8 million ($24.7 million in
the fourth quarter of 2004) in stock repurchases."

                    About the Company

Stericycle -- http://www.stericycle.com/-- provides medical waste
collection, transportation, treatment and disposal services and
safety and compliance programs.

                          *     *     *

As reported in the Troubled Company Reporter on Sept. 3, 2004,
Moody's Investors Service upgraded the ratings of Stericycle, Inc.
The affected debt includes:

   * $50.8 million of senior subordinated notes due 2009, upgraded
     to B2 from B3;

   * Senior Implied Rating, upgraded to Ba3 from B1; and

   * Issuer Rating, upgraded to B1 from B2.

The rating outlook remains stable.


TEXEN OIL: Inks Control Block Sale Agreement
--------------------------------------------
Texen Oil and Gas, Inc., (OTCBB:TXEO) reported that an agreement
has been reached for the acquisition of a control position of the
Company by Texen Holdings, LLC, an entity controlled by the
Company President, D. Elroy Fimrite.  The sale is expected to
complete within the current quarter.

"The Company is positioned to accelerate development of its
current asset base in conjunction with the field study being
conducted by Durango Resources Corporation," stated Mr. Fimrite,
"I am pleased that these developments have facilitated the
negotiation of an agreement for the acquisition of the control
position."

The Company intends to seek additional opportunities to access
high quality prospects through alignment of the Company with state
of the art exploration technologies.  The Company believes that
obtaining access to high quality prospects in a preferential
position is the most effective way to acquire new reserves and
enhance Shareholder value.

                      About the Company

Texen Oil and Gas, Inc. -- http://www.texenoilandgas.com/-- is a
Houston based oil and gas exploration and development company.
The company leases approximately 6,000 acres of crude oil and
natural gas producing properties in Victoria, DeWitt and Waller
Counties, Texas.  The Company trades under the stock symbol TXEO
on the OTC bulletin board.

                      Going Concern Doubt

The company's auditors in its September 30, 2004, quarterly
financial report have issued a going concern opinion.  This means
that the auditors believe there is doubt that the company can
continue as an on-going business for the next twelve months unless
the company can obtain additional capital to pay our bills.  The
company have generated limited revenues and expected revenues
during the ensuing period are subject to fluctuation based on the
availability of additional capital necessary in order to fully
exploit the unproven potential of our Oil & Gas portfolio.
Accordingly, we must raise cash from sources other than from the
sale of Oil & Gas found on our properties.  Our only other source
for cash at this time is investments by others in our company.  We
must raise cash to implement our project and stay in business.


TROPICAL SPORTSWEAR: Court Okays $88.5 Million Sale to Perry Ellis
------------------------------------------------------------------
Perry Ellis International, Inc. (NASDAQ:PERY) has received
bankruptcy court approval for the acquisition of certain domestic
operating assets as well as the outstanding capital stock of the
U.K. subsidiary of Tropical Sportswear International (NASDAQ:TSIC)
for $88.5 million in cash.  Closing on this transaction is
expected to take place on or before Feb. 26, 2005, and will be
funded by proceeds from Perry Ellis International's senior credit
facility.

George Feldenkreis, Chairman and CEO of Perry Ellis International,
said, "This acquisition should add in excess of $230 million in
net sales on an annualized basis, and we expect it will be $0.05 -
$0.10 accretive in the first twelve months after acquisition.  The
combined bottoms volume of the two companies makes us one of the
largest producers of men's pants in the world.  We predicted years
ago that retailer consolidation would transform relationships
between apparel wholesalers and their customers, and our new
assets make Perry Ellis International more valuable and important
to its customers."

Mr. Feldenkreis continued: "This acquisition increases the
significance of the bottoms category from approximately 20 percent
of our total sales to over 40 percent, balancing our portfolio of
tops and bottoms and further diversifying our product mix.  We are
now one of the most broadly diversified and balanced men's
sportswear companies in the United States, with the ability to
capitalize on current opportunities.  We are pleased to add to our
organization the very capable people at TSI's Tampa facility, and
plan to maintain a significant Tampa presence."

Oscar Feldenkreis, President and COO of Perry Ellis International,
concluded, "This acquisition enhances our standing with our retail
partners by adding many of Tropical's high profile labels to our
branded portfolio, including Savane(R), Farah(R), and Banana
Joe(R).  We will grow these brands through Perry Ellis' core
competencies, investing in their marketing and improving design.
In addition, our familiarity with the bottoms business, as well as
common merchandising and management systems, will facilitate our
integration of Tropical.  Lastly, Tropical's U.K. subsidiary will
provide an excellent platform for the future expansion of Perry
Ellis International brands into Europe.  We feel that this
acquisition will continue to create substantial value for our
shareholders and build one of the premier apparel companies in the
world."

                  About Perry Ellis International

Perry Ellis International, Inc., is a leading designer,
distributor and licensor of a broad line of high quality men's and
women's apparel, accessories, and fragrances, including dress and
casual shirts, golf sportswear, sweaters, dress and casual pants
and shorts, jeans wear, active wear and men's and women's swimwear
to all major levels of retail distribution. The company, through
its wholly owned subsidiaries, owns a portfolio of highly
recognized brands including Perry Ellis(R), Jantzen(R),
Cubavera(R), Munsingwear(R), John Henry(R), Original Penguin(R),
Grand Slam(R), Natural Issue(R), Penguin Sport(R), the Havanera
Co.(R), Axis(R), and Tricots St. Raphael(R). The company also
licenses trademarks from third parties including Nike(R) and Tommy
Hilfiger(R) for swimwear, PING(R) and PGA Tour(R) for golf apparel
and Ocean Pacific(R) for men's sportswear. Additional information
on the company is available at http://www.pery.com/

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


TRUMP HOTELS: Amended Plan's Classification & Treatment of Claims
-----------------------------------------------------------------
In their Amended Plan and Disclosure Statement, Trump Hotels &
Casino Resorts, Inc., and its debtor-affiliates provided
estimates of recoveries for Claim Classes 1 to 4, and cash
distributions to Classes 1 to 3.  The Plan now also groups claims
and interests into 13 classes:

                                     Estimated Cash Distribution
    Class   Description              and Estimated Recovery
    -----   -----------              ---------------------------
     N/A    Administrative Claims    Paid in full in cash.
                                     Estimated recovery: 100%.


     N/A    Priority Tax Claims      Paid in full in cash.
                                     Estimated recovery: 100%.

      1     TAC Notes Claims         Based on an assumed
                                     Effective Date of May 1,
                                     2005, the Debtors estimate
                                     that the TAC Cash
                                     Distribution would total
                                     $66,100,000.

                                     Estimated Recovery: 93.2%

      2     TCH First Priority       Based on the assumed
            Notes Claims             Effective Date of May 1,
                                     2005, the Debtors estimate
                                     that the TCH First Cash
                                     Distribution would aggregate
                                     around $6,900,000, which
                                     estimate excludes any
                                     scheduled interest payments
                                     to be made on December 15,
                                     2004, and March 15, 2005
                                     with respect to the TCH First
                                     Priority Notes during the
                                     pendency of the Debtors'
                                     Chapter 11 cases.

                                     Estimated Recovery: 100%

      3     TCH Second Priority      Assuming May 1, 2005, is the
            Notes Claims             Effective Date, the Debtors
                                     estimate that the TCH Second
                                     Cash Distribution would equal
                                     around $5,200,000.

                                     Estimated Recovery: 95.4%

      4     DJT Secured              Estimated Recovery: 90%
            Notes Claim

      5     Other Secured Claims     Unimpaired under (a) and (e);
                                     Impaired under (b), (c), (d)
                                     and (f); Holder will receive
                                     any one or a combination of
                                     these:

                                     (a) cash equal to the Allowed
                                         Class 5 Claim;


                                     (b) deferred cash payments
                                         totaling at least its
                                         allowed amount, of a
                                         value, of at least the
                                         value of the holder's
                                         interest in the Debtors'
                                         property securing the
                                         Allowed Class 5 Claim;

                                     (c) the Debtors' property
                                         securing the claim;

                                     (d) payments or liens
                                         amounting to the
                                         indubitable equivalent
                                         of the value of the
                                         holder's interest in the
                                         Debtors' property
                                         securing the claim;

                                     (e) reinstatement of the
                                         claim; or

                                     (f) other treatment as the
                                         Debtors and the holder
                                         will have agreed upon in
                                         writing.

                                     Estimated Recovery: 100%

      6     Priority Claims          Unimpaired; Paid in full, in
                                     cash

                                     Estimated Recovery: 100%

      7     General Unsecured        Unimpaired; Paid in full, in
            Claims                   cash

                                     Estimated Recovery: 100%

      8     Intercompany Claims      Unimpaired; Allowed Claims
                                     will be reinstated on the
                                     Effective Date.

                                     Estimated Recovery: 100%

      9     Old Equity Interests     Unimpaired; Allowed Claims
            of Other Subsidiaries    will be reinstated on the
                                     Effective Date.

                                     Estimated Recovery: 100%

     10     Old THCR Holding         Impaired; Holder will retain
            Interests                existing interests
                                     subject to the terms of the
                                     New THCR Partnership
                                     Agreement.


     11     Old THCR Common          Impaired; Each holder will:
            Stock Interests
                                     (a) to the extent holder
                                         holds Old THCR Common
                                         Stock:

                                         -- retain its existing
                                            shares of Old THCR
                                            Common Stock, subject
                                            to the reverse stock
                                            split and dilution
                                            upon issuance of the
                                            New Common Stock, on
                                            a pro rata basis; and

                                         -- receive, on a pro rata
                                            basis, New Class A
                                            Warrants based on the
                                            holder's beneficial
                                            ownership of Old
                                            THCR Common Stock as
                                            of the New Class A
                                            Warrants Record Date,
                                            with the exception of
                                            Mr. Trump, who
                                            will forego receipt of
                                            his warrants
                                            regardless of the Old
                                            THCR Common Stock
                                            shares he beneficially
                                            owns;

                                     (b) to the extent the holder
                                         holds Old THCR Holdings
                                         LP Interests, retain its
                                         existing Old THCR
                                         Holdings LP Interests,
                                         subject to the terms of
                                         the New THCR Partnership
                                         Agreement; and

                                     (c) to the extent the holder
                                         holds Old THCR Class B
                                         Common Stock, retain its
                                         existing shares of Old
                                         THCR Class B Common
                                         Stock, which will be
                                         reclassified on a
                                         one-to-one basis into
                                         shares of New Class B
                                         Common Stock.

                                     The ability of holders of New
                                     Class B Common Stock to vote
                                     shares of New Common Stock
                                     issuable upon the exchange of
                                     New THCR LP Interests will be
                                     adjusted to account for the
                                     Reverse Stock Split.

     12     Interests of holders     Impaired; Holder will not
            of Old THCR Stock        receive or retain any cash
            Rights and Claims        or property on account of
            arising out of the       the claims and interests.
            Old THCR Stock
            Rights
                                     Estimated Recovery: 0%

     13     Securities Claims        Impaired; Holder will not
            against THCR             receive or retain any cash or
                                     property on account of the
                                     claims.

                                     Estimated Recovery: 0%


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


TRUMP HOTELS: Feb. 14 Telephonic Disclosure Statement Hearing Set
-----------------------------------------------------------------
Jeffrey T. Testa, Esq., at Schwartz, Tobia, Stanziale, Sedita &
Campisano, in Montclair, New Jersey, relates that Trump Hotels &
Casino Resorts, Inc., and its debtor-affiliates agreed to make
some slight modifications to the Disclosure Statement based on
the objections heard at the February 3, 2005, Disclosure
Statement Hearing.

The Debtors and Equity Committee are negotiating the final terms
of the Plan.

The Court has scheduled a telephonic hearing for any outstanding
issues with regard to the Disclosure Statement on February 14,
2005 at 3:00 p.m. EST.  The Debtors will present the final terms
of the Plan at the telephonic hearing.

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


UNISPHERE WASTE: All Five Directors Walk Away from Board
--------------------------------------------------------
Unisphere Waste Conversion Ltd. disclosed the resignation of all
its directors effective Feb. 9, 2005.  The Directors are John
Wypich, Tom Allen, Lee Barker, Oliver Lennox King and Cal Parent.

The Company's wholly owned subsidiary, Unisphere Tire Recycling
Inc. (formerly, Enviro Tire Technologies Inc.) has filed a Notice
of Intention to Make a Proposal to its creditors under the
Bankruptcy and Insolvency Act (Canada).

As reported in the Troubled Company Reporter on Feb. 9, 2005,
Unisphere Waste reported that a lawsuit has been filed by a 6%
unsecured debenture holder against the Company for non-payment of
principal and interest amounting to $1,060,000.

On Feb. 1, the Company did not make interest payments due to
debenture holders in the amount of $625,000 on Jan. 31, 2005, and
did not make interest payments due to debenture holders in the
amount of $150,000 on Feb. 2, 2005.  In addition the Company did
not make a principal payment due to a debenture holder of
$1,000,000 on Feb. 2, 2005.

As a result of the non-payment and other defaults with lenders,
the Company's other indebtedness may become due and payable.

The Company is unable to make its current payments and pay
indebtedness.  The Company has met with representatives of the 10%
secured debenture holders and discussions are ongoing.

A further lawsuit has been filed by a former employee, Victor
Sibilia, for $5,000,000 plus other ancillary relief and damages
against the four outside directors of the Company.  The Company
had expected that the outside directors will vigorously defend the
lawsuit but anticipates that they will also claim indemnity from
the Company for any damages that the court might assess against
them.

                        About the Company

Unisphere Waste Conversion Ltd. is a Canadian environmental
solutions company.


URS CORP: Earns $26.1 Million of Net Income in Fourth Quarter
-------------------------------------------------------------
URS Corporation (NYSE: URS) reported revenues of $907.4 million
for the fiscal 2004 fourth quarter ended October 31, 2004, an
increase of 8% from the $838.1 million in revenues reported for
the fourth quarter of fiscal 2003.  Net income was $26.1 million,
compared to $19.5 million for the corresponding fourth quarter of
fiscal 2003. Earnings per share of $0.59, fully diluted, was in
line with the Company's guidance and compares with EPS of $0.57
per share, fully diluted, for the fiscal 2003 fourth quarter.

For the fiscal year ended October 31, 2004, revenues increased 6%
to $3.382 billion from $3.187 billion for the fiscal year ended
October 31, 2003.  Net income was $61.7 million, or $1.53 per
share, fully diluted, compared to $58.1 million, or $1.76 per
share, fully diluted, in fiscal 2003.  Net income for fiscal 2004
included a previously announced pre-tax charge of $28.2 million,
or $0.36 per diluted share, which was taken in the third and
fourth quarters of fiscal 2004.  The charge related to the
Company's note redemptions of $260.0 million.

Weighted-average shares outstanding for fiscal 2004 for the
purposes of calculating diluted EPS were 40.4 million, compared to
32.5 million weighted-average shares outstanding for fiscal 2003.
The increase was primarily due to the Company's April 2004 public
stock offering and to additional shares issued pursuant to the
Company's stock option and purchase plans.

During fiscal 2004, the Company generated operating cash flow of
$109 million and repaid $271 million of debt by using $185 million
of proceeds received from its public stock offering and $86
million from its operating cash flow.  As a result, the Company's
debt to total capitalization ratio improved to 34% at October 31,
2004, from 52% at October 31, 2003.

As of October 31, 2004, the Company's backlog was $3.823 billion,
compared to $3.662 billion as of October 31, 2003.

Commenting on the Company's financial results, Martin M. Koffel,
Chairman and Chief Executive Officer, stated: "Our results for
both the fourth quarter and the fiscal year were in line with our
guidance and reflect the continued strength of the federal
business, as well as our continued ability to mitigate the effect
of slowdowns in the state and local government and private sector
markets.  Despite the continued softness in these two markets
during much of 2004, we were able to generate strong cash flow,
substantially reduce our leverage, and deliver consistent
financial results throughout the year.  We ended the year as a
significantly stronger company overall and are well positioned for
the future."

Mr. Koffel continued: "The combination of our public stock
offering and continued success in generating cash flow during the
year allowed us to achieve our goal of reducing our debt to total
capitalization ratio to below 40% well ahead of schedule.  Looking
forward, we believe our continued strong cash generation will
enable us to pay down an additional $80 million during fiscal
2005."

                        Business Segments

In addition to providing consolidated financial results, URS
provided separate financial information for its two segments, the
URS Division and the EG&G Division:

URS Division

For the fourth quarter of fiscal 2004, the URS Division reported
revenues of $589.9 million and operating income of $45.8 million.
For the 2004 fiscal year, the URS Division reported revenues of
$2.255 billion and operating income of $167.5 million.

EG&G Division

For the fourth quarter of 2004, the EG&G Division reported
revenues of $317.9 million and operating income of $13.3 million.
The EG&G Division had revenues of $1.130 billion and operating
income of $54.8 million for the 2004 fiscal year.

                        Earnings Outlook

As previously announced, effective January 1, 2005, URS will begin
reporting its financial results on a 52/53-week fiscal year ending
on the Friday closest to December 31, with interim quarters ending
on the Fridays closest to March 31, June 30 and September 30. The
period from November 1, 2004 through December 31, 2004 will be
treated as a separate reporting period, for which the Company
expects to issue a press release and file a transition report on
Form 10-Q on February 8, 2005. The Company expects that its
financial results for this unique transition period will be
affected by seasonal factors including winter weather and the
costs associated with the holidays that fall during this period.

For the fiscal year that will end on December 30, 2005, the
Company expects revenues of approximately $3.6 billion. Assuming
it meets this revenue expectation, the Company expects that net
income will be approximately $94 million and EPS will be
approximately $2.10 for fiscal 2005. In addition, the Company has
indicated that it expects 2005 first quarter EPS will be between
19% and 23% of the Company's full year 2005 EPS guidance of $2.10.
This EPS guidance does not include the potential impacts of
Statement of Financial Accounting Standards 123 (Revised) "Share-
Based Payment," which requires that the costs resulting from
share-based payment transactions be recognized in the financial
statements. FAS 123R becomes effective for the Company on July 1,
2005.

URS Corporation -- http://www.urscorp.com/-- offers a
comprehensive range of professional planning and design, systems
engineering and technical assistance, program and construction
management, and operations and maintenance services for surface
transportation, air transportation, rail transportation,
industrial process, facilities and logistics support,
water/wastewater treatment, hazardous waste management and
military platforms support. Headquartered in San Francisco, the
Company operates in more than 20 countries with approximately
27,000 employees providing engineering and technical services to
federal, state and local governmental agencies as well as private
clients in the chemical, manufacturing, pharmaceutical, forest
products, mining, oil and gas, and utilities industries.

                          *     *     *

As reported in the Troubled Company Reporter on August 20, 2004,
Moody's upgraded URS Corporation's ratings to reflect the
company's reduced debt balances, improved credit metrics, and
expectations that revenues and margins will support further
improvement in the company's cash flows. The company's rating
outlook has been changed from positive to stable.

Moody's has upgraded these ratings:

    * $225 million senior secured revolving credit facility, due
      2007, upgraded to Ba2 from Ba3;

    * $84 million senior secured term loan A, due 2007, upgraded
      to Ba2 from Ba3;

    * $270 million senior secured term loan B, due 2008, upgraded
      to Ba2 from Ba3;

    * $130 million 11.5% senior unsecured notes, due 2009,
      upgraded to Ba3 from B1;

    * $20 million 12.25% senior subordinated notes, due 2009,
      upgraded to B1 from B2;

    * Senior Implied, upgraded to Ba2 from Ba3;

    * Senior Unsecured Issuer, upgraded to Ba3 from B1;

    * Speculative Grade Liquidity Rating, upgraded to SGL-1 from
      SGL-2.

The ratings upgrade:

   (1) reflects the company's improved balance sheet;

   (2) strong operating performance; and

   (3) the expectation that the company's services will continue
       to enjoy stable demand.

In its third fiscal quarter, URS used the net proceeds of an
equity offering, cash on hand and additional borrowings under its
credit facility to redeem $70 million of its 11.5% senior notes
and $180 million of its 12.25% senior subordinated notes. As a
result of these redemptions, the company's overall debt balance
decreased by over $180 million to about $594 million. This is a
significant improvement over the $955 million debt balance at
October 31, 2002. The company's ratings also benefit from:

   (1) a stable customer base;

   (2) recurring revenues;

   (3) a $3.9 billion backlog at April 30, 2004; and

   (4) expected increases in defense and homeland security
       spending.

The ratings are constrained by the challenges the company faces in
growing its state and local revenues due to state budget deficits
and delays in funding of state and local infrastructure projects.
Revenues from the company's private clients are also under
pressure due to reduced levels of capital spending and cost-
cutting measures by the company's private clients. In 2002, URS
purchased EG&G for $500 million for a purchase multiple that
equates to just under 10 times its fiscal 2003's EBITDA. This
acquisition transformed URS as EG&G represents around 32% of total
revenues. Going forward, Moody's does not expect the company to
make large debt-financed acquisitions as URS has publicly stated
that it wants to maintain a debt to capitalization ratio below
40%. A change in policy due to an acquisition or other
transaction, however, would pressure the ratings. A decrease in
the company's revenues, operating margins and free cash flow
generation would also pressure the rating.


US AIRWAYS: Pension Benefit Takes $2.3 Billion Pension Loss
-----------------------------------------------------------
The Pension Benefit Guaranty Corporation has assumed
responsibility for the pensions of more than 51,000 flight
attendants, machinists and other employees of US Airways, the
bankrupt air carrier based in Arlington, Va.  The estimated cost
to the pension insurance program is $2.3 billion, in addition to
the $726 million claim from the US Airways' pilots plan in 2003.
The total claim of $3 billion is the second largest in the history
of the pension insurance program, after Bethlehem Steel at $3.7
billion.

"The PBGC will protect the pension benefits of US Airways' workers
and retirees," said Executive Director Bradley Belt.  "But the
pension safety net is badly frayed.  The Administration has put
forward a comprehensive proposal that requires companies to pay
for their promises, strengthens the insurance backstop, and sheds
light on plan finances.  We look forward to working with Congress
to enact these reforms promptly."

The Retirement Plan for Flight Attendants and Retirement Plan for
Machinists ended as of Jan. 10, 2005, and the Retirement Plan for
Certain Employees of US Airways ended as of Jan. 17, 2005.  The
PBGC became trustee of all three plans on February 1, 2005.
According to PBGC estimates, the plans are 40 percent funded, with
$1.7 billion in assets to cover $4.2 billion in liabilities.  Of
the $2.5 billion shortfall, the PBGC will guarantee payment of an
estimated $2.3 billion.

Based upon an extensive financial review, the PBGC determined that
US Airways met the legal criteria to transfer its pension
liabilities to the federal pension insurance program and advised
the bankruptcy court of its findings.  U.S. Bankruptcy Judge
Stephen S. Mitchell ruled on Jan. 6, 2005, that the company could
not emerge from Chapter 11 bankruptcy protection unless the plans
were terminated.

US Airways retirees will continue to receive their monthly benefit
checks without interruption, and other workers will receive their
pension when eligible to retire.  Under federal pension law, the
maximum guaranteed pension at age 65 for participants in plans
that terminate in 2005 is $45,613 per year.  The maximum
guaranteed amount is lower for those who retire earlier or elect
survivor benefits.  In addition, certain early retirement
subsidies and benefit increases made within the past five years
may not be fully guaranteed.

Within the next several weeks, the PBGC will send trusteeship
notification letters to all participants in the US Airways pension
plans.  Workers and retirees with questions may consult the PBGC
Web site, http://www.pbgc.gov/usairwaysor call toll-free at
1-800-400-7242.  For TTY/TDD users, call the federal relay service
toll-free at 1-800-877-8339 and ask for 800-400-7242.

US Airways retirees who draw a benefit from the PBGC may be
eligible for the federal Health Coverage Tax Credit.  Further
information may be found on the PBGC Web site at
http://www.pbgc.gov/trade_adjustment_act_FAQ.htm

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


US AIRWAYS: Wants to Enter into Fuel Hedging Programs
-----------------------------------------------------
In the past, US Airways, Inc., and its debtor-affiliates used
hedges to guard against fluctuations in jet fuel prices, including
fuel options, call options, collars and swap agreements.  To enter
into these derivatives, the Debtors had to comply with a Master
Agreement form provided by the International Swaps and Derivatives
Association, Inc., which included providing a counterparty with
cash collateral to secure potential obligations.

Since the price of jet fuel has been high lately, the Debtors have
not used fuel hedges.  However, prudent risk management may compel
hedging transactions in the near future.  If the Debtors want to
enter into hedges under a Master Agreement, they will have to
grant a counterparty a first priority lien and security interest
in sufficient cash collateral.  Potential counterparties will not
enter into fuel hedges unless they are confident that the Debtors
have the necessary authority.

The Debtors seek the authority of the U.S. Bankruptcy Court for
the Eastern District of Virginia to enter into jet fuel hedging
transactions.  To the extent collateral is required, the Debtors
seek permission to use their cash, including the Cash Collateral
subject to the Cash Collateral Order, provided that written
permission from the ATSB Lender Parties is received.  The Debtors
want authority to allow counterparties to close out and net their
positions.

Brian P. Leitch, Esq., at Arnold & Porter, in Denver, Colorado,
notes that the Cash Collateral Order gives the Debtors permission
to use Cash Collateral to "pay the ordinary and reasonable
expenses of operating their businesses," including the "purchase
of fuel" and "other expenditures as are necessary for operating
their business."

Given the large amount of jet fuel that the Debtors consume and
the risk management benefits derived through jet fuel hedges, Mr.
Leitch asserts that it is in the best interests of the estates to
have the authority to enter into hedging transactions, including
Master Agreements.  If authorization is not granted, the Debtors
will be at a competitive financial disadvantage and will be unable
to utilize an industry practice to manage the costs of jet fuel.

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 CORP: Judge Walsh Orders Transfer of Chapter 22 Case to Mass.
-----------------------------------------------------------------
USM Corporation filed for chapter 11 protection on July 31, 2001
in the U.S Bankruptcy Court for the District of Massachusetts.
Thirty-two months after the confirmation of its plan of
reorganization, the Debtor filed for chapter 11 protection in the
U.S. Bankruptcy Court for the District of Delaware on Feb. 1,
2005.  At the behest of Teradyne, Inc., Judge Peter J. Walsh
ordered the transfer of the case to the U.S. Bankruptcy Court for
the District of Massachusetts on Feb. 3, 2005.

Teradyne Inc., holds a judgment claim of $949,280 and is the
Debtor's largest unsecured creditor.  Teradyne holds a substantial
claim that arises as a consequence of defaults arising under the
Plan confirmed by the Massachusetts Bankruptcy Court in May 2002.

Teradyne argued that the Debtor has no presence in Delaware and
its only connection is that it is the state of incorporation of
the Debtor.  Teradyne also argued:

   (a) The Debtor previously filed for bankruptcy in
       Massachusetts.

   (b) The Debtor's corporate headquarters are located in
       Haverhills and Bridgewater, Massachusetts.

   (c) The Debtor's books, records, and corporate financial
       departments and personnel are located in Massachusetts.

   (d) The Creditor's Trustee appointed under the Debtor's prior
       Plan is located in Boston.

   (e) Ten of the Debtor's 20 largest unsecured creditors holding
       42% of the claims are located in Massachusetts, Connecticut
       or Maine.

   (f) The Debtor's secured lender is located in Massachusetts.

Headquartered in Haverhill, Massachusetts, USM Corporation --
http://www.hudsonmachinery.com/-- 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.  USM
Corporation emerged from a chapter 11 reorganization in May 2002
(Bankr. D. Mass. Case No. 01-16082).  The Company filed for
chapter 11 protection on February 4, 2005 (Bankr. D. Del. Case No.
05-10272, transferred Feb. 10, 2004, to Bankr. D. Mass. Case No.
05-40541).  Christopher Martin Winter, Esq., Michael R. Lastowski,
Esq., and Jennifer L. Hertz, Esq., at Duane Morris, LLP, represent
the Debtor in its restructuring efforts.  The Debtor estimates its
assets between $1 million and $10 million and debts between $1
million and $10 million.


VEO: Voluntary Chapter 11 Case Summary
--------------------------------------
Debtor: Veo
        fdba Xirlink, Inc.
        2210 O'Toole Ave #150
        San Jose, California 95131

Bankruptcy Case No.: 05-50680

Type of Business: The Debtor is a hardware technology company that
                  develops quality digital imaging devices.
                  See http://www.veo.com/

Chapter 11 Petition Date: February 9, 2005

Court: Northern District of California (San Jose)

Judge: Marilyn Morgan

Debtor's Counsel: David A. Boone, Esq.
                  Law Offices of David A. Boone
                  1611 The Alameda
                  San Jose, CA 95126
                  Tel: 408-291-6000

Estimated Assets: $10 Million to $50 Million

Estimated Debts:  $10 Million to $50 Million

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


WISTON XIV: U.S. Trustee Will Meet Creditors on Mar. 4
------------------------------------------------------
The United States Trustee for Region 13 will convene a meeting
of Wiston XIV Limited Partnership's creditors at 10:00 a.m., on
March 4, 2005, at the U.S. Trustee Meeting Room, First Floor of
the Roman L. Hruska United States Courthouse located in 111 South
18th Plaza in Omaha, Nebraska.  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 Stilwell, Kansas, Wiston XIV Limited Partnership
filed for chapter 11 protection on Jan. 5, 2005 (Bankr. D. Nebr.
Case No. 05-80037). Robert V. Ginn, Esq., at Brashear & Ginn,
represents the Debtor in its restructuring efforts.  When the
Debtor filed for protection from its creditors, it estimated
assets between $10 million and $50 million and estimated debts
from $10 million to $50 million.


YUKOS OIL: Judge Clark Approves Stipulation with U.S. Trustee
-------------------------------------------------------------
Under the Cash Management System in place for the Debtor in
Russia, as of January 12, 2005, a substantial amount of the
proceeds from the sale of oil and gas produced both inside and
outside Russia by the Debtor and its subsidiaries and affiliates
flow through the Debtor's bank accounts located in the Russian
Federation.

The Debtor borrowed certain amounts from certain entities:

Lender/Date Borrowed     Amount           Purpose
--------------------     ------           -------
Yukos Hydrocarbons     $1,000,000     to fund legal fees and
Investments, Ltd.                     expenses of Fulbright &
12/09/04                              Jaworski, its counsel

Brittany Assets
Limited
12/13/04                5,000,000     to fund legal fees and
                                       expenses of Fulbright &
                                       Jaworski

12/14/04                1,500,000     to purchase, on behalf of
                                       Yukos International U.K.
                                       B.V., the sum of $1,000 to
                                       buy 1,000 shares of the
                                       common stock of Yukos, USA,
                                       Inc., with the remainder to
                                       he held by Yukos USA for
                                       the Debtor's benefit

12/21/04               20,000,000     to be held by Yukos USA,
                                       for the Debtor's benefit

Currently, $5 million of the Debtor's cash is located in a
Fulbright & Jaworski IOLTA Trust Account at Wells Fargo Bank.
Another $22 million of the Debtor's cash -- the DIP Operating
Cash -- is located at Southwest Bank of Texas in the name of
Yukos USA.

The Debtor seeks to use its cash in order to continue its
operations and the management of its properties as it established
its new headquarters in the United States.

The Debtor has decided not to seek, at this time, to use any cash
located in its Existing Russian Bank Accounts, but to seek
appropriate damages at a later date from the Russian Government
concerning its various violations of the automatic stay.

The U.S. Trustee has asked the Debtor to place the Fulbright
Client Trust Fund Retainer Cash and the DIP Operating Cash into
investments that are backed by the Full Faith and Credit of the
United States Government.

The Debtor agreed.

Accordingly, the Debtor asks the Court to approve its proposed
stipulation with the U.S. Trustee with respect to its existing
bank accounts and the continued use of its cash management system.

The Stipulation provides that the Debtor:

    (a) is authorized to maintain its Existing Russian Cash
        Management System and Existing Russian Bank Accounts in
        the names and account numbers existing immediately prior
        to the Petition Date;

    (b) will immediately place all of the DIP Operating Cash and
        the Fulbright Client Trust Fund Retainer Cash into
        investments that are backed by the Full Faith and Credit
        of the United States Government in compliance with
        U.S. Trustee Guidelines; and

    (c) may use the DIP Operating Cash pursuant to Section 363 of
        the Bankruptcy Code for transactions:

        -- in the ordinary course of business without Court
           approval; and

        -- outside the ordinary course of business after Court
           approval;

        provided that the Debtor may, at its discretion, seek a
        comfort order from the Court to approve any particular
        proposed Ordinary Course Transaction.

*   *   *

Judge Clark approves the Debtor's stipulation with the U.S.
Trustee with respect to the Debtor's continued use of its existing
bank accounts and cash management system, effective through March
3, 2005.  The Debtor will place all of its operating cash and the
Fulbright Client Trust Fund into investments that are backed by
the Full Faith and Credit of the United States Government in
compliance with U.S. Trustee Guidelines.

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)


* Cadwalader Moves New York Offices to One World Financial Center
-----------------------------------------------------------------
Cadwalader, Wickersham & Taft LLP, one of the world's leading
international law firms, held a Grand Opening to mark its move to
new offices at One World Financial Center, the firm's
international headquarters.  During a ribbon-cutting ceremony at
the new offices, the firm was presented with an official
proclamation from the City of New York saluting Cadwalader's
commitment to the City and New York's Financial District, its home
since 1792.  Cadwalader's One World Financial Center lease has
been heralded as one of the most important, and largest, leases
completed in lower Manhattan during 2004.  The firm will occupy 14
floors, more than 450,000 square feet, enabling it to bring its
800 New York-based personnel together in one location.

"Cadwalader has enjoyed tremendous success over the years. Our
priority now is to prepare for the continued growth of the firm,"
said Robert O. Link, Jr., Cadwalader's Chairman.

"We are proud of our heritage as one of the country's oldest law
firms and of having evolved with New York's economy over three
centuries. Our growth and development often paralleled economic
events that shaped our city. In the process, we've earned a
reputation for crafting innovative financial solutions and
products to help our clients achieve their goals. Our new, state-
of-the-art facilities will help us to continue this work not only
in New York but around the world," Mr. Link added.

In a statement proclaiming Tuesday, January 18, 2005 as
'Cadwalader, Wickersham & Taft LLP Day' in the City of New York,
Michael R. Bloomberg, the Mayor of the City of New York, cited
Cadwalader as, "upholding and strengthening the sanctity of the
law since its founding, putting principle in action with its move
to One World Financial Center." The proclamation also commended
Cadwalader on its continuing legacy of innovation and excellence.
Participating in the Grand Opening ceremony were Andrew M. Alper,
President of the New York City Economic Development Corporation,
Eileen Mildenberger, Chief Operating Officer and Executive Vice
President, Empire State Development Corporation and Dennis H.
Friedrich, President and Chief Operating Officer, Brookfield
Properties Corporation, US Commercial Operations.

In September 2003, Cadwalader announced its intention to remain in
Lower Manhattan but to move to new office space at One World
Financial Center. In March 2004, the firm completed the sale of
its former 325,000 square foot headquarters building at 100 Maiden
Lane while also finalizing lease negotiations with Brookfield
Properties Corporation, owners of One World Financial Center.

Cadwalader retained a team of leading consultants to assist with
all aspects of this project - from acoustical, electrical,
construction and structural engineers to project management, food
service, audio-video, IT infrastructure, communications, furniture
and move consultants - to insure that the design was attractive,
efficient and functional.

"Not only do our offices have some of the most commanding views of
the city, but our Conference Center, comprised of 55 meeting
rooms, has state-of-the art audio and video capabilities. This
focus on technology will enable the firm to provide unparalleled
service to our clients on a global basis," added Mr. Link.

Cadwalader, Wickersham & Taft LLP -- http://www.cadwalader.com/--  
established in 1792, is one of the world's leading international
law firms, with offices in New York, London Charlotte, and
Washington. Cadwalader serves a diverse client base, including
many of the world's top financial institutions, undertaking
business in more than 50 countries in six continents. The firm
offers legal expertise in securitization, structured finance,
mergers and acquisitions, corporate finance, real estate,
environmental, insolvency, litigation, health care, banking,
project finance, insurance and reinsurance, tax, and private
client matters.


* Jonathan Aberman & David Dutil Join Mintz Levin's D.C. Office
---------------------------------------------------------------
Jonathan M. Aberman and David Dutil have joined Mintz, Levin,
Cohn, Ferris, Glovsky and Popeo, P.C.'s Washington D.C. office as
Of Counsel in the Business and Finance Section.

Before joining Mintz Levin, Mr. Aberman was a member of the
Corporate and Securities Group of Fish & Richardson P.C.  His
extensive business and finance experience spans both public,
private, domestic and international companies in a variety of
industries, including biotechnology, computer software and
Internet services, managed healthcare, pharmaceuticals, medical
devices, aviation, retail and consumer products.

As a recognized expert on emerging company financings and
structuring, Mr. Aberman sits on the Steering Committee of the
Governor's Advisory Board for the Virginia Biotechnology
Initiative and is a member of the Board of Directors of VA Bio and
George Mason Intellectual Properties, Inc.  Mr. Aberman is also an
adjunct professor at George Mason University, where he teaches
Venture Capital, and is a regular contributor to local and
national periodicals on various technology and emerging company
topics.  He is also a regular participant on panels at various
venture capital and emerging company events, contributing
commentary at events sponsored by the Northern Virginia Technology
Counsel, the DC Technology Council, MidAtlantic Venture Capital
Association, VA Bio, George Mason University and University of
Maryland, College Park.

"Jonathan's extensive background in corporate law and substantial
experience in the areas of venture capital, private equity,
technology and biotechnology complement the firm's existing, deep-
rooted expertise in these areas, making him an outstanding
addition to our Business and Finance team," said Neil Aronson, a
Member of Mintz Levin and heads of the Business and Finance
Section.

"With well integrated, multi-disciplinary practices, Mintz Levin
is uniquely positioned to meet the diverse requirements of today's
service and technology companies and I am delighted to join this
growing group of talented professionals," added Mr. Aberman.

Before joining Mintz Levin, Mr. Dutil was also a member of the
Corporate and Securities Group of Fish & Richardson P.C.  Over the
course of his career, he has represented multiple domestic and
international venture capital funds, borrowers and lenders in
secured and unsecured debt financings and entrepreneurial ventures
in business formation and corporate governance.

In addition to his legal practice, Mr. Dutil is an active
participant in the Mid-AtlanticVenture Association's Capital
Connection and D.C. Tech's Early Stage Capital Forum, where he
coaches emerging companies and entrepreneurs on corporate
financing and related issues.

Mr. Aberman earned a B.A. from George Washington University, a
M.Sc. from The London School of Economics, a B.A., M.A. in law
from Cambridge University, Downing College and a LL.M. in
corporate law from New York University.

Mr. Dutil earned a B.A from the University of Vermont, and a J.D.
from Fordham University School of Law.

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. --
http://www.mintz.com/-- is a multidisciplinary law firm with over
450 attorneys and senior professionals in Boston, Washington D.C.,
Reston, VA, New York, Stamford, CT, Los Angeles and London.

Mintz Levin is distinguished by its reputation for responsive
client service and expertise in the areas of bankruptcy; business
and finance; communications; employment; environmental; federal;
health care; immigration; intellectual property; litigation;
public finance; real estate; tax; and trusts and estates.  Mintz
Levin's international clientele range from privately held start-
ups to Fortune 100 companies in a wide array of industries
including biotechnology, venture capital, telecommunications,
health care and high technology.

Mintz Levin was one of the first law firms to develop
complementary consulting capabilities to provide complete
solutions to clients' problems, including investment/wealth
management, and government and public affairs.


* BOOK REVIEW: Health Plan: The Practical Solution
--------------------------------------------------
Author:     Alain C. Enthoven
Publisher:  Beard Books
Softcover:  224 pages
List Price: $34.95

Order your personal copy at
http://www.amazon.com/exec/obidos/ASIN/1587981238/internetbankrupt

Like most experts calling for fundamental reform in any field,
Enthoven introduces his plan for reform of the field of health
care by identifying the current beliefs and perspectives standing
in the way of reform.  These are identified in "Seven
Misconceptions About Medical Care."  Among these are there is only
one "best" treatment for any given medical problem; medical care
is a product measured by such criteria as "inpatient days,"
"outpatient visits," and "doctor office visits"; more medical care
for any condition is always better than less; and individuals have
no control over when they need to or desire to seek medical care.

In one way or another, the seven misconceptions are related to two
common ways of looking at health care which have led to the
problems now faced by the United States health-care system and the
millions of employers, employees, and their families, as well as
other groups such as young single workers, the poor, and migrant
workers.  Likening health care to accident insurance or a public-
utilities company are the two common ways of regarding it which
have to be put aside if the system is to be relevant to the lives
and medical problems of the myriad individuals it is meant to
serve.  In Enthoven's view, health care has to be able to respond
to the diverse conditions of individuals' lives and the
differences in their behavior and decisions rather than be based
on bureaucratic or corporate guidelines and objectives.

With his plan, Enthoven seeks to locate basic health-care
decisions with individuals, who patently know more about their own
circumstances and wishes, rather than politicians, government
bureaucrats, or corporate executives.  Once this premise of
Enthoven's plan is grasped, the wrongfulness of the metaphors of
accident insurance and public-utilities company becomes evident;
and with this, the problematic and sometimes harmful consequences
wrought by them.  According to the accident-insurance metaphor,
the health-care system is involved in individuals' lives only in
moments of emergency.  But this has no more to do with good health
than car insurance has to do with good driving.  Since good health
is a central concern of every person over the course of her or his
entire life, the optimum health-care plan would be accessible and
responsive regarding a broad range of health issues and conditions
of varying degrees and individual preferences.  The health plan
Enthoven proposes is such a plan.  The public-utilities model for
a health plan likewise fails in meeting the wider range of actual
health concerns for individuals and society because this makes
health care like this resource that is entirely in the hands of
large utilities' companies and government regulators.  Resources
such as energy or phone lines controlled by a public-utility
company in accordance with government regulations make a resource
available to consumers in ways the company determines as allowed
by the regulations.  The public is left to making use of the
resource according to the system designed by the public-utilities
company.  While one can partake of more of the resource by paying
more, one cannot do this in a desirable, relevant health plan.
Such a plan has to play an active part in individuals' lives and
not be available only in response to their decisions; and it also
has to have its full resources potentially available at any moment
to respond to unanticipated health emergencies whether these be
accidents or illnesses.  By contrast, public-utilities companies
are passive; and if one wants to make more use of their particular
resource, this is ordinarily accompanied by a change in one's life
or business, and it entails purchasing new equipment such as more
energy-using products or additional phones.

Enthoven names the optimum health plan he proposes the Consumer
Choice Health Plan, CCHP for short.  It is derived from a
"synthesis of principles of economics, statistics, probability,
and decision theory applied to the complex and uncertain problems
of medical decision making."  Although Enthoven designed his
health plan from years of incomparable experience in the health-
care field and related government agencies, his expertise in
economics, and deep analyses of the broad and diverse factors of
health-care (many of which the average reader would not be even
aware of before reading his book), the basics of his health plan
are simple and readily comprehensible.  These basics are two: (a)
individual choice; and (b) free-market practices.  These two
basics have the virtue of being ones which have proven not only to
be effective in other social and economic fields, but to be
fundamentals of American society.  Hence, adopting Enthoven's plan
would not call for arduous persuasion or education of the public,
new government agencies, or the creation of new businesses.  For
instance, the author does not propose the elimination of HMOs, but
describes practices that would make them more competitive so as to
keep medical costs under control and thereby offer lower health-
insurance costs to consumers.  The adoption of Enthoven's plan
would mean a recognition of the principles and practices
beneficial in other major areas of society, and an implementation
of these in the central social interest of optimum health care.

First published in 1980, Enthoven's "Health Plan" presents a
critique of the health-care system that has become widely
accepted.  His recommendations of individual choice and free-
market economics, too, are recommendations that have become
acknowledged as necessary to overcome problems in the health care
system and render it relevant to the health needs and desires of
the public.  Some of the plan's recommendations have already been
put into effect--such as employees of a business being able to
select a health plan suitable to their circumstances from among
several offered.  Enthoven also recognizes that for many health
matters, the individual, not a doctor, is the one making the
choice about health care.  For example, many persons choose to go
to work with certain health conditions (e. g., a cold or a sprain)
rather than seek medical attention for it.  Under Enthoven's plan,
such decisions would be acknowledged while not categorizing the
individuals as being any less eligible for timely health care when
they would seek it.  Prevention, levels of risk balancing serious
medical problems (e. g., cancer) with age and lifestyle, and
acknowledgment that health care can never be perfect since
medicine is not an exact science are other factors in the
realistic, multifaceted, comprehensive plan Enthoven presents.

Alain C. Enthoven has many years of experience at the top levels
of government, health care, and economics.  Among his numerous
positions have been professor at Stanford University's Graduate
School of Business, Economist with the RAND Corporation,
consultant to Kaiser Permanente, and in 1997, Chairman of the
California Managed Health Care Improvement Task Force.

                          *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com.

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                          *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L.
Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Dylan
Carlo Gallegos, Jazel P. Laureno, Cherry Soriano-Baaclo, Marjorie
Sabijon, Terence Patrick F. Casquejo and Peter A. Chapman,
Editors.

Copyright 2005.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $675 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher Beard
at 240/629-3300.

                *** End of Transmission ***