TCR_Public/050624.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, June 24, 2005, Vol. 9, No. 148

                          Headlines

ACE AVIATION: Divests 12.5% of Aeroplan at CN$10 Per Unit
ACE SECURITIES: Moody's Rates Class B-2 Sub. Certificates at Ba2
ACURA PHARMACEUTICALS: Inks $1 Million Term Loan Agreement
ADELPHIA COMMS: AEGIS Doesn't Want M. Rigas to Replace Counsel
AMERCO: Posts $32.8 Million Net Loss in Fourth Quarter 2005

AMERICAN AIRLINES: Contributes $75 Million to Pension Plans
AMPEX CORP: Class A Common Stock Begins Trading on Nasdaq Today
ARLINGTON INNS: Files for Chapter 11 Protection in N.D. Illinois
ARLINGTON INNS: Case Summary & 20 Largest Unsecured Creditors
ASSET SECURITIZATION: S&P Lifts Ratings on Three Classes of Certs.

BRANT POINT: Fitch Affirms BB Rating on $15 Million Class D Notes
BUEHLER FOODS: Wants to Hire Gordon Brothers as Liquidating Agent
CATHOLIC CHURCH: Tucson Reps. Seek Summary Judgment on 65 Claims
CATHOLIC CHURCH: Tucson Files Amendments to Third Amended Plan
CENVEO INC: Names James R. Malone as New CEO

COMMERCIAL VEHICLE: S&P Rates Proposed $150M Sr. Unsec. Debt at B+
CONTRACTOR TECHNOLOGY: Wants Case Converted to Chapter 7
COVANTA ENERGY: Exclusive Plan Filing Period Extended to Nov. 1
CROWN CASTLE: Debt Repayment Prompts S&P to Withdraw Ratings
DELPHI CORP: Declares Quarterly Dividend of $0.015 Per Share

DEX MEDIA: Refinances $1.1 Billion Facilities & Reprices Debt
E.DIGITAL CORP: March 31 Balance Sheet Upside-Down by $2 Million
EAGLEPICHER INC: Taps Deloitte to Provide Reorganization Service
ENRON CORP: Asks Court to OK Amended Allocation of Trust Assets
EPOCH 2001-2: Moody's Junks $33M Class IV-A Floating Rate Notes

FANNIE MAE: To Redeem $75 Million of Securities Issues
FEDERAL-MOGUL: PD Panel's Experts Presented at Estimation Trial
FEDERAL-MOGUL: U.K. Court Offers Directions on English Law Issues
FIRST CHICAGO: Fitch Lifts Rating on $119M Certs. One Notch to B+
FMC CORP: Moody's Upgrades Senior Unsecured Debt Ratings to Baa3

G.S. DISTRIBUTION: Case Summary & 14 Largest Unsecured Creditors
GOLDENTREE: Fitch Affirms Low-B Ratings on Two GTHY I Certs.
GOLDENTREE: Fitch Affirms Low-B Ratings on $35 Mil. GTHY II Certs.
GREAT WESTERN: Massey Energy Purchases Primary Assets for $4.8MM
HOME EQUITY: Moody's Rates Class B-2 Sub. Certificates at Ba2

HORSEHEAD INDUSTRIES: Sells Unimproved Lot for $3M to SCB Services
HOST MARRIOTT: Debt Reduction Prompts S&P's Positive Outlook
HUFFY CORPORATION: Wants to Pay Shanghai Precision $262,445
INDYMAC ABS: Fitch Rates $8.5 Million Class M-11 Certs. at BB
INTEGRATED HEALTHCARE: Inks Forbearance Agreement with MedCap

INTERSTATE BAKERIES: Consolidating Southern Calif. PC Operations
IPIX CORP: Raises $10 Million from Private Equity Placement
ISTAR FINANCIAL: Fitch Affirms BB Rating on Preferred Stock
J.P. MORGAN: Fitch Places Low-B Ratings on Six Classes of Certs.
JAKE'S GRANITE: Gallagher & Kennedy Approved as Bankruptcy Counsel

JUNIPER NETWORKS: Improved Cash Flow Cues S&P to Lift Ratings
KIMBERLY OREGON: No Creditor Wants to Serve on a Committee
LAIDLAW INT'L: To Release 3rd Quarter Earnings on July 7
LONGYEAR HOLDINGS: Moody's Rates $125MM 2nd Lien Term Loan at B3
LUCID ENTERTAINMENT: Filing Financial Reports by July 29

MADISON RIVER: Fitch Withdraws B Rating on Sr. Unsecured Debt
MAGELLAN MIDSTREAM: S&P Rates $275 Million Term Loan at BB-
MANUFACTURING TECH: Hires Juan Morales Alicea as Accountant
MARINER HEALTH: Carematrix Asks Court to Okay Mariner Settlement
MERISANT WORLDWIDE: Profit Decline Cues S&P to Lower Ratings

MIRANT: Pacific Gas Plans to Acquire Mirant Delta's Contra Costa
MIRANT CORP: Will Seek to Expand A&M Tax Advisory's Engagement
MIRANT CORP: Court Tells Troutman Sanders to Produce Documents
MOSAIC COMPANY: Fitch Holds BB+ Rating on Sr. Secured Debt
NETWORK INSTALLATION: Founder & Former CEO Retires 6-Mil Shares

NORCROSS SAFETY: S&P Holds B+ Credit Rating and Removes Watch
NRG ENERGY: Swaps New 8% Sr. Secured Notes for Old Notes
ORBIMAGE HOLDINGS: Moody's Junks Proposed $240M Floating Rate Note
ORBIMAGE HOLDINGS: S&P Junks Proposed $245 Million Sr. Sec. Notes
PAETEC COMMUNICATIONS: Moody's Rates Proposed $200M Loans at B2

PETROQUEST ENERGY: Closes $25 Million Private Debt Placement
PROJECT FUNDING: Waning Credit Quality Cues S&P to Watch Ratings
PROXIM CORP: Wants to Hire The Trumbull Group as Noticing Agent
QWEST CORP: Majority of Noteholders Tender Notes for Cash
R.J. REYNOLDS: Prices $500 Million Debt Offering

R.J. REYNOLDS: S&P Rates $500 Million Senior Secured Notes at BB+
R.J. REYNOLDS: Fitch Rates Proposed $500M Debt Offering at BB+
R.J. REYNOLDS: Moody's Rates Backed Senior Secured Notes at Ba2
REFCO GROUP: Moody's Affirms Senior Subordinated Debt's B3 Rating
REGIONAL DIAGNOSTICS: Committee Taps Hahn Loeser as Counsel

SAKS INC: S&P May Lift Ratings to B+ Upon Debt Tender Completion
SANDITEN INVESTMENTS: Judge Michael Dismisses Chapter 11 Case
SEARS HOLDINGS: Recovers $17 Million from Critical Vendors
SIRVA INC: SEC Converts Informal Inquiry to Formal Probe
SOLA INTERNATIONAL: Moody's Withdraws $225M Debts' Ba3 Rating

SOLUTIA INC: Asks Court to OK DIP Financing Extension to June 2006
SOUTHAVEN POWER: Inks Settlement Pact with Enron, EPC & NPPC
SUPERIOR WHOLESALE: S&P Rates $53.16 Million Class D Notes at BB
TACTICA INT'L: U.S. Trustee Wants Case Converted or Dismissed
TEXAS INDUSTRIES: Noteholders Agree to Amend Sr. Debt Indenture

TEXAS INDUSTRIES: Launching $250 Million Sr. Debt Offering
TEXAS INDUSTRIES: Subsidiary Launches $300 Mil. Sr. Debt Offering
TONY COURY: Voluntary Chapter 11 Case Summary
TORONTO-DOMINION: Fitch Holds Individual Rating at B
TRI-COUNTY HAMPSHIRE: Case Summary & 11 Largest Unsec. Creditors

TRANSCOM ENHANCED: Wants DIP Facility Increased by $400,000
TRANSCOM ENHANCED: Wants Exclusive Periods Extended
TROPICAL SPORTSWEAR: Wants Customs' Claims Estimated at $0
TWINLAB CORP: Ephedra Panel Hires Brown Rudnick as Counsel
TWINLAB CORP: Amended Plan Confirmation Hearing Set for July 21

UNITED BISCUITS: Poor 2004 Results Cue Fitch to Junk Ratings
US AIRWAYS: DoJ Completes Review of America West Merger
US AIRWAYS: Proceeds with Aircraft Sale to Republic Airways
USG CORP: New York Tax Authority Demands Payment of Tax Debts
VARIG S.A.: Ends Acquisition Talks with TAP Air Portugal

VISTEON CORP: S&P Retains Watch Until Ford Agreement Completion
WESTPOINT STEVENS: Aretex LLC Asks Court to Deny Credit Bidding
YELLOW ROADWAY: Forms China Transport Joint Venture with Jin Jiang
YUKOS OIL: Russia Recoups RUB392 Billion Tax Payment From Yukos

* BOOK REVIEW: Hospitals, Health and People

                          *********

ACE AVIATION: Divests 12.5% of Aeroplan at CN$10 Per Unit
---------------------------------------------------------
ACE Aviation Holdings, Inc., and Aeroplan Limited Partnership
disclosed that Aeroplan Income Fund entered into an agreement with
a group of underwriters to sell 25 million units of the Fund at a
price of $10 per unit priced as part of its initial public
offering of units.  The final prospectus for the Fund will be
filed today with all securities regulatory authorities throughout
Canada.

"We are extremely pleased to see the market valuing Aeroplan at
$2 billion, making it one of Canada's largest business trusts and
the first-ever monetization of an airline frequent flyer program,"
said Robert Milton, Chairman, President and CEO, ACE Aviation
Holdings, Inc.  "The Aeroplan IPO is a significant step in ACE's
commitment to further illuminate the value inherent in its
business units.  This is a solid endorsement by the market of
ACE's business strategy going forward."

The Fund has granted to the underwriters an option to purchase up
to an additional 3.75 million units at the offering price for a
period expiring 30 days following the closing to cover over-
allotments, if any, and for market stabilization purposes.

The units are expected to provide a cash-on-cash yield of 7%
annually based on the initial public offering price.
Distributions will be paid monthly.  The first distribution is
expected to be paid on or before August 15, 2005 to Unitholders of
record on July 29, 2005.

The Fund has received conditional approval for the listing of its
units on the Toronto Stock Exchange -- TSX, subject to fulfilling
all of the requirements of the TSX.  Closing of the Offering,
subject to customary conditions, is expected to occur on or about
June 29, 2005 and the Fund's units will trade on the TSX under the
symbol AER.UN.

The Fund will acquire and own a 12.5% (14.4% assuming full
exercise of the overallotment option) ownership interest in the
Aeroplan LP.  Aeroplan LP will retain approximately $100 million
of the net proceeds of the offering to partially fund a reserve
for Aeroplan Mile redemptions and for certain capital
expenditures, and will distribute the balance of the net proceeds
to ACE in the amount of approximately $125 million ($160 million
assuming full exercise of the overallotment option).  ACE will use
the proceeds for general corporate purposes and will retain
control of Aeroplan LP.

The underwriting syndicate is being co-led by RBC Capital Markets,
sole bookrunner, CIBC World Markets and Genuity Capital Markets.

In connection with the offering, a commitment letter has been
entered into by Aeroplan LP with the Royal Bank of Canada as
underwriter and lead arranger in respect of the establishment of
$475 million senior secured syndicated credit facilities subject
to the satisfaction of certain customary conditions including the
completion of the offering.  Approximately $300 million of this
will be used to fund the balance of the reserve for Aeroplan mile
redemptions.

The securities offered have not been, and will not be, registered
under the United States Securities Act of 1933, as amended, and
may not be offered or sold in the United States absent
registration or any applicable exemption from the registration
requirement of such Act.

                    About Aeroplan Income Fund

The Fund is an unincorporated, open-ended trust established under
the laws of the Province of Ontario, created to indirectly acquire
an interest in the outstanding limited partnership units of
Aeroplan LP.  After completion of the Offering, ACE will continue
to hold the remaining 87.5% (85.6 % assuming full exercise of the
overallotment option) of the outstanding LP Units.

                          About Aeroplan

Aeroplan -- http://www.aeroplan.com/-- is Canada's premier
loyalty marketing company, with approximately 5 million active
members.  Aeroplan benefits from its unique strategic relationship
with Air Canada, in addition to its contractual arrangements with
leading financial and commercial partners.

Aeroplan provides its commercial partners with loyalty marketing
services to attract and retain customers and stimulate demand for
these partners' products and services.  The Aeroplan Program
offers its approximately 5 million active members the ability to
accumulate Aeroplan Miles through a network of more than 60
commercial partners, representing more than 100 brands, in the
financial, retail and travel sectors and redeem those miles for
rewards, including airline seats to more than 700 destinations
worldwide, other travel rewards such as hotel rooms and car
rentals, selected electronics merchandise and a diversified
selection of experiential and specialty rewards.  Aeroplan was
founded in 1984 by Air Canada, Canada's largest domestic and
international full-service airline, to manage the airline's
frequent flyer program.

Together with its partners, Aeroplan develops and executes
innovative and appealing member-targeted marketing programs
designed to engage the loyalty of this affluent segment of
Canadian consumers.

                   About Ace Aviation Holdings

ACE Aviation is the parent holding company of Air Canada and ACE's
other subsidiaries.  Air Canada is Canada's largest domestic and
international full-service airline and the largest provider of
scheduled passenger services in the domestic market, the
transborder market and each of the Canada-Europe, Canada-Pacific,
Canada-Caribbean/Central America and Canada-South America markets.
Air Canada is a founding member of the Star Alliance network, the
world's largest airline alliance group.

In addition, the Corporation owns Jazz Air LP, Aeroplan LP and
Destina.ca, which is an on-line travel site.  The Corporation also
provides Technical Services through ACTS LP, Cargo Services
through AC Cargo LP and Air Canada, Groundhandling Services
through ACGHS LP and Air Canada and tour operator services and
leisure vacation packages through Touram LP.

                         *     *     *

As reported in the Troubled Company Reporter on Oct. 5, 2004,
Standard & Poor's Ratings Services assigned its 'B' long-term
corporate credit rating to Montreal, Quebec-based ACE Aviation
Holdings Inc. and its wholly owned subsidiary, Air Canada.  S&P
says the outlook is stable.


ACE SECURITIES: Moody's Rates Class B-2 Sub. Certificates at Ba2
----------------------------------------------------------------
Moody's Investors Service assigned Aaa ratings to the senior
certificates issued by ACE Securities Corp. Home Equity Loan
Trust, Series 2005-HE3, and ratings ranging from Aa1 to Ba2 to the
subordinate certificates in the deal.  Moody's did not rate all of
the certificates offered in the transaction.

The securitization is backed by adjustable-rate and fixed-rate
subprime mortgage loans originated by various originators.  The
ratings are based primarily on the credit quality of the loans,
and on the credit enhancement in the transaction.  Credit
enhancement includes:

   * overcollateralization,
   * subordination, and
   * excess spread.

The loans are being serviced by Ocwen Federal Bank FSB (Moody's
rated SQ2 as primary servicer of 1st lien subprime mortgage loans
at the time of settlement of the deal and subsequently changed to
SQ2- on May 17, 2005) with Wells Fargo as the master servicer.

The complete rating actions are:

Ace Securities Corp. Home Equity Loan Trust, Series 2005-HE3 Asset
Backed Pass-Through Certificates

   * Class A-1A, rated Aaa
   * Class A-1B, rated Aaa
   * Class A-2A, rated Aaa
   * Class A-2B, rated Aaa
   * Class A-2C, rated Aaa
   * Class M-1, rated Aa1
   * Class M-2, rated Aa2
   * Class M-3, rated Aa3
   * Class M-4, rated A1
   * Class M-5, rated A2
   * Class M-6, rated A3
   * Class M-7, rated Baa1
   * Class M-8, rated Baa2
   * Class M-9, rated Baa3
   * Class B-1, rated Ba1
   * Class B-2, rated Ba2


ACURA PHARMACEUTICALS: Inks $1 Million Term Loan Agreement
----------------------------------------------------------
Acura Pharmaceuticals, Inc. (OTCBB:ACUR) secured $1 million under
a term Loan Agreement with:

   -- Essex Woodlands Health Ventures V, L.P.;
   -- Care Capital Investments II, L.P.;
   -- Care Capital Offshore Investments II,L.P.;
   -- Galen Partners III, L.P.;
   -- Galen Partners International III, L.P.; and
   -- Galen Employee Fund III, L.P.

The Loan is secured by a lien on all assets of the Company and its
subsidiaries (senior to all other Company debt), bears an annual
interest rate of 10%, and matures June 1, 2006.  This funding will
allow the Company to continue pursuing collaboration agreements
with strategically focused pharmaceutical company partners for the
development and commercialization of products incorporating the
Company's proprietary abuse deterrent technology and to seek more
permanent funding from third parties.

             Cash Reserves Update & Bankruptcy Warning

The Company estimates that its current cash reserves, including
the net proceeds from the Loan, will fund continued development of
the Aversion(tm) Technology and related operating expenses through
late August, 2005.  To continue operating, the Company must raise
additional financing or enter into appropriate collaboration
agreements with third parties providing for cash payments to the
Company.  No assurance can be given that the Company will be
successful in obtaining any such financing or in securing
collaborative agreements with third parties on acceptable terms,
if at all, or if secured, that such financing or collaborative
agreements will provide for payments to the Company sufficient to
continue funding operations.  In the absence of such financing or
third-party collaborative agreements, the Company will be required
to scale back or terminate operations and/or seek protection under
applicable bankruptcy laws.

Acura Pharmaceuticals, Inc., together with its subsidiaries,
researches and develops proprietary abuse deterrent formulation
technologies intended to deter the abuse of orally administered
opioid analgesic products.

At March 31, 2005, Acura Pharmaceutical's balance sheet showed a
$2,548,000 stockholders' deficit, compared to a $1,085,000 deficit
at Dec. 31, 2004.


ADELPHIA COMMS: AEGIS Doesn't Want M. Rigas to Replace Counsel
--------------------------------------------------------------
As reported in the Troubled Company Reporter on June 13, 2005,
John J. Rigas, Timothy J. Rigas, James P. Rigas and Michael J.
Rigas asked the U.S. Bankruptcy Court for the Southern District of
New York to allow Associated Electric & Gas Insurance Services
Limited to advance an additional $300,000 for James Rigas and
$300,000 for Michael Rigas.

The Rigases recently asked the Court for permission to substitute
Dickstein Shapiro Morin & Oshinsky LLP in place of Dilworth Paxson
LLP as their insurance coverage counsel in the Debtors' Chapter 11
cases.

If the Court grants the Rigases' application, the Rigases'
insurance counsel of record will be:

    Adam S. Ziffer
    Dickstein Shapiro Morin & Oshinsky LLP
    1177 Avenue of the Americas
    New York, NY 10036
    Telephone: (212) 835-1400
    Facsimile: (212) 997-9880

                           AEGIS Responds

Louis A. Scarcella, Esq., at Scarcella Rosen & Slome LLP, in
Uniondale, New York, tells the Court that Associated Electric &
Gas Insurance Services Limited has an agreement with the Rigases
concerning the future advancement of defense costs under the
Directors' and Officers' Liability Insurance Policies.

The Agreement, which is the product of protracted negotiations,
remains in full force and effect, Mr. Scarcella asserts.

Mr. Scarcella points out that under the terms of the Agreement,
"John Rigas and Timothy Rigas agreed not to request advancement
of Defense Costs until their convictions are reversed, vacated or
remanded on appeal."  Therefore, to the extent John Rigas and
Timothy Rigas are seeking additional Policy proceeds, AEGIS asks
the Court to deny their request.

Michael Rigas advised AEGIS of his intent to retain a new law
firm as substitute counsel in litigation in which the Rigases,
including Michael Rigas, are and have been represented by the
Dilworth Paxson firm for several years, Mr. Scarcella relates.
"Despite having waived any conflict of interest that might arise
from this joint representation, and years after the fact, Michael
Rigas now seeks to switch law firms based solely on an alleged
conflict of interest which he had already waived," Mr. Scarcella
notes.

AEGIS does not consent to the wholesale substitution of counsel
for Michael Rigas.  AEGIS believes that there is no reasonable
basis for substituting counsel where the Rigases, and without any
input from AEGIS, selected their original counsel and waived any
conflicts that might arise, if any.  According to Mr. Scarcella,
the substitution "would be an apparent waste of Policy proceeds
and would be unfair to other Insureds."

As previously reported, Michael Rigas requests that AEGIS be
permitted to advance an additional $300,000 in Policy proceeds to
him pursuant to the terms and conditions of the Agreement.
However, Mr. Scarcella informs the Court that Michael Rigas,
prior to the filing of the Motion, stated his intent to terminate
the Agreement, even though he seeks to enforce the Agreement by
requesting that AEGIS advance additional Policy proceeds.  As of
June 14, 2005, Michael Rigas has not terminated the Agreement and
has not advised AEGIS of how he intends to proceed with respect
to the issue of representation.

AEGIS has no objection to James Rigas's request for $300,000 in
advance defense costs, and has no objection to Michael Rigas'
request for $300,000 in defense costs to the extent Dilworth
Paxson continues to represent him.  However, if and to the extent
Michael Rigas retains separate counsel, absent compelling reasons
to the contrary, AEGIS asks the Court to deny his request.

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


AMERCO: Posts $32.8 Million Net Loss in Fourth Quarter 2005
-----------------------------------------------------------
AMERCO (Nasdaq: UHAL) reported a net loss available to common
shareholders for its fourth quarter ending March 31, 2005 of
$32.8 million compared with a net loss of $56.2 million, or $2.70
per share in the same period last year.  Last year's fourth
quarter included nonrecurring restructuring charges of $1.01 per
share.  Net earnings available to common shareholders for the full
year were $76.5 million, compared with a net loss of $15.8 million
for the same period last year.  Last year's results included
nonrecurring restructuring charges of $1.31 per share.

According to Joe Shoen, chairman of AMERCO, "we are investing
strongly in our truck rental fleet to further strengthen our 'do-
it-yourself' moving and storage business.  Since March, we have
put 3,500 of our largest rental trucks into service to support the
upcoming and seasonally strong summer moving months.  We will
continue to put 360 of these new trucks in service each week
through the middle of August.  This investment increases the
number of rentable truck days available to meet customer demand
and is expected to reduce future spending on truck repair costs.

"On June 8, 2005, we refinanced the Company's exit debt.  This
action increased our borrowing capacity by more than $45 million
and is expected to lower our annual interest expense, at current
borrowing levels, by approximately $25 million before taxes.  This
early extinguishment of our exit debt will result in a
nonrecurring pre-tax charge of approximately $34 million in the
first quarter of fiscal 2006," added Shoen.

"We made steady progress throughout fiscal 2005 and we have many
exciting developments that we believe will positively affect
performance in fiscal 2006 and beyond.  Moving equipment rental
revenues grew 4.1% during fiscal 2005 to the highest level in our
history.  Our self-storage occupancy rate and revenue have
improved year-over-year," concluded Shoen.

AMERCO is the parent company of U-Haul International, Inc., North
America's largest "do-it-yourself" moving and storage operator,
Amerco Real Estate Company, Republic Western Insurance Company and
Oxford Life Insurance Company.  With a network of over 15,300
locations in all 50 United States and 10 Canadian provinces U-Haul
is celebrating its 60th year of serving customers.  The company
has the largest consumer truck rental fleet in the world, with
over 93,000 trucks, 78,750 trailers and 36,100 towing devices.
U-Haul has also been a leader in the storage industry since 1974,
with over 340,000 rooms and approximately 29 million square feet
of storage space and over 1,000 facilities throughout North
America.

                       *     *     *

As reported in the Troubled Company Reporter on June 21, 2005,
Standard & Poor's Ratings Services withdrew its senior secured
debt rating on AMERCO's $550 million bank facility and AMERCO's
secured notes.  The withdrawal of the ratings reflects the
completion of refinancing outstanding debt with mortgage and
hybrid real estate loans.

"Ratings on AMERCO (B+/Stable/--) reflect the company's weak
financial profile following its emergence from Chapter 11
bankruptcy protection on March 15, 2004, that resulted in
constrained financial flexibility," said Standard & Poor's credit
analyst Kenneth L. Farer.  In addition, ratings take into account
ongoing investigations of the company by the SEC.  A positive
credit factor is the company's position as the largest participant
in the consumer truck rental market.

Reno, Nevada-based AMERCO is a holding company whose principal
subsidiary, U-Haul International Inc., represents approximately
80% of consolidated revenues.  AMERCO is also the parent of Amerco
Real Estate Co., which owns and manages most of AMERCO's real
estate assets, and two insurance companies -- Republic Western
Insurance Co. and Oxford Life Insurance Co.  SAC Holdings, an off-
balance sheet related entity, owns self-storage properties managed
by AMERCO subsidiaries.

On June 9, 2005, Repwest was released from administrative
supervision by the Arizona Department of Insurance.  Repwest had
been under administrative supervision since May 20, 2003.

AMERCO's revenues and earnings are expected to improve modestly
over the intermediate term.  However, upside rating potential will
be limited by a heavy debt burden, constrained financial
flexibility, and various ongoing investigations.


AMERICAN AIRLINES: Contributes $75 Million to Pension Plans
-----------------------------------------------------------
American Airlines has made a $75 million contribution to its
defined benefit pension plans.  This is in addition to the
$138 million American contributed to the defined benefit plans
earlier this year, bringing its total contributions to the plans
in 2005 to more than $200 million.

"American remains strongly committed to its pension plans and to
restructuring our company in ways that will allow us to continue
to afford our pension obligations," said Gerard J. Arpey, the
airline's Chairman and CEO.  "The contributions we have made to
the defined benefit pension plans this year underscore the
progress we, our people and our unions have made -- working
together -- in helping the company build the financial stability
it needs to maintain the plans and work toward a secure retirement
for our employees."  Mr.  Arpey noted that American has been
working closely with its employees and its unions on pension-
reform legislation.  A large group of American employees and union
officials will be rallying on Capitol Hill in Washington, D.C.,
tomorrow in support of measures that would make funding employees
pensions more affordable and more flexible, without transferring
these obligations to the government.

With its defined benefit pension plans currently funded at about
80 percent, American has the best-funded defined benefit plans in
the industry.

American Airlines is the world's largest airline.  American,
American Eagle and the AmericanConnection regional airlines serve
more than 250 cities in over 40 countries with more than 3,800
daily flights. The combined network fleet numbers more than 1,000
aircraft.  American's award- winning Web site --
http://www.AA.com/-- provides users with easy access to check and
book fares, plus personalized news, information and travel offers.
American Airlines is a founding member of the oneworld Alliance,
which brings together some of the best and biggest names in the
airline business, enabling them to offer their customers more
services and benefits than any airline can provide on its own.
Together, its members serve more than 600 destinations in over 135
countries and territories.  American Airlines, Inc. and American
Eagle are subsidiaries of AMR Corporation (NYSE: AMR).

                         *     *     *

As reported in the Troubled Company Reporter on Apr. 27, 2005,
Moody's Investors Service commented that the amendments to the
liquidity facilities that provide credit support to American
Airlines, Inc.'s Series 1999-1 Class A1, A2 and B Enhanced
Equipment Trust Certificates would not affect the current ratings
assigned to these certificates.  The current ratings are Baa3 for
the Class A1 and A2 certificates and Ba3 for the Class B
certificates.

As reported in the Troubled Company Reporter on Feb. 28, 2005,
Standard & Poor's Ratings Services placed its ratings on American
Airlines Inc.'s (B-/Stable/--) equipment trust certificates on
CreditWatch with negative implications.  The rating action does
not affect issues that are supported by bond insurance policies.

"The CreditWatch review is prompted by Standard & Poor's concern
that a prolonged difficult airline industry environment,
characterized by high fuel prices, excess capacity, and intense
price competition in the domestic market, has weakened the
financial condition of almost all U.S. airlines and increased the
risk of widespread simultaneous bankruptcies," said Standard &
Poor's credit analyst Philip Baggaley.

At Dec. 31, 2004, AMR Corp.'s balance sheet shows that liabilities
exceed assets by $581 million.


AMPEX CORP: Class A Common Stock Begins Trading on Nasdaq Today
---------------------------------------------------------------
Ampex Corporation (OTCBB:AEXCA) reported that the Company's
application to list its Class A Common Stock on the Nasdaq
National Market has been approved.  The Company has been informed
that its shares will begin trading under the symbol "AMPX" on
Friday, June 24, 2005.

Ampex Corporation -- http://www.ampex.com/-- headquartered in
Redwood City, California, is one of the world's leading innovators
and licensors of technologies for the visual information age.

At Mar. 31, 2005, Ampex Corporation's balance sheet showed a
$92,742,000 stockholders' deficit, compared to a $99,429,000
deficit at Dec. 31, 2004.


ARLINGTON INNS: Files for Chapter 11 Protection in N.D. Illinois
----------------------------------------------------------------
Arlington Inns, Inc., a wholly owned subsidiary of Arlington
Hospitality, Inc. (Nasdaq: HOST) and a tenant of PMC Commercial
Trust (Amex: PCC), filed a voluntary chapter 11 petition with the
United States Bankruptcy Court for the Northern District of
Illinois on June 22, 2005.

The Debtor's sole business presently consists of the operations of
15 AmeriHost Inn hotels pursuant to leases with PMC Commercial
Trust and its affiliates.  PMC has filed a lawsuit against the
Debtor and Arlington Hospitality seeking payment of past due rent
and real estate taxes for 18 leased hotels.  As of June 22, 2005,
the Debtor has paid a significant amount of the past due real
estate taxes.

Of the 18 properties under lease agreements at the time of
Arlington Hospitality's event of default under the PMC lease on
May 13, 2005, two properties -- located in Storm Lake, Iowa, and
Jackson, Tennessee -- have been sold.  PMC is currently in
possession of a property located in McKinney, Texas.

The parent and guarantor for the Debtor's leases, Arlington
Hospitality, Inc., has not filed for bankruptcy as of June 22.
While PMC has actively pursued a settlement, all proposals have
been rejected by Arlington Hospitality.  PMC said it intends to
vigorously pursue its interests against the Debtor in the
bankruptcy forum and the parent and guarantor outside of
bankruptcy.

PMC has filed various eviction proceedings seeking to obtain
possession of the remaining 15 leased hotels.  The Debtor's
chapter 11 filing will stay the eviction and litigation
proceedings filed against the Debtor.

The Debtor has been actively pursuing a settlement with PMC,
including the presentation of proposals that provided PMC
substantial consideration in return for a settlement.  PMC has
rejected all of the Debtor's proposals.  The Debtor believes that
PMC would receive more under these proposals, compared to what PMC
will receive in the chapter 11 reorganization.

PMC Commercial Trust is a REIT that originates loans to small
businesses secured by real estate and owns various hospitality
properties.

Headquartered in Arlington Heights, Illinois, Arlington Inns,
Inc., operates 15 AmeriHost Inn Hotels under leases from PMC
Commercial Trust.  The Company filed for chapter 11 protection on
June 22, 2005 (Bankr. N.D. Ill. Case No. 05-24749).  David M.
Neff, Esq., at DLA Piper Rudnick Gary Cary US LLP, represents the
Debtor in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it estimated between $100,000 to
$500,000 in assets and $500,000 to $1,000,000 in total debts.


ARLINGTON INNS: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Arlington Inns Inc.
        2355 South Arlington Heights Road, Suite 400
        Arlington Heights, Illinois 60005

Bankruptcy Case No.: 05-24749

Type of Business: The Debtor operates 15 AmeriHost Inn Hotels
                  under leases from PMC Commercial Trust.  The
                  Debtor is a wholly owned subsidiary of Arlington
                  Hospitality, Inc., which serves as a guarantor
                  under these leases.

Chapter 11 Petition Date: June 22, 2005

Court: Northern District of Illinois (Chicago)

Judge: A. Benjamin Goldgar

Debtor's Counsel: David M. Neff, Esq.
                  DLA Piper Rudnick Gary Cary US LLP
                  203 North LaSalle Street
                  Chicago, Illinois 60601-1293
                  Tel: (312) 368-4000

Estimated Assets: $100,000 to $500,000

Estimated Debts:  $500,000 to $1 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                        Nature of Claim    Claim Amount
   ------                        ---------------    ------------
Michigan Department of Revenue   Sales Taxes             $18,123
Collections
430 Allegan
Lansing, MI 48922

Thomasville Furniture            Trade Debt               $9,060
Industries
3731 Mistflower Lane
Naperville, IL 60564

Monroe County Treasurer          Accrued Property         $8,060
51 South Macomb Street           Taxes
Monroe, MI 48161

Mill Distributors, Inc.          Trade Debt               $7,279
45 Aurora Industrial Parkway
Aurora, OH 44202

Gordon Food Service, Inc.        Trade Debt               $7,133
333 50th Street Sourhwest
Grand Rapids, MI 49501

Breckenridge Company             Trade Debt               $4,293

Jackson Energy Authority         Trade Debt               $4,123

TTA Advertising                  Trade Debt               $4,113

The Lamar Companies              Trade Debt               $3,765

The CIT Group Commercial         Trade Debt               $3,516
Services

Amerihost Franchise System, Inc. Trade Debt               $3,414

First Choice Power, Inc.         Trade Debt               $3,291

Ecolab                           Trade Debt               $3,033

Martin Brothers Distributing     Trade Debt               $2,933
Company, Inc.

Rochelle Municipal Utilities     Trade Debt               $2,888

A.C. Furniture Company, Inc.     Trade Debt               $2,741

Wisconsin Public Service         Trade Debt               $2,643
Corporation

Consumers Energy                 Trade Debt               $2,136

PMC Commercial Trust             Trade Debt         Undetermined
c/o Toby L. Gerber, Esq.
Fulbright & Jaworski LLP
2200 Ross Avenue, Suite 2800
Dallas, TX 75201-2784

Cendant Corporation              Trade Debt         Undetermined
1 Sylvan Way
Parsippany, NJ 07954-0278


ASSET SECURITIZATION: S&P Lifts Ratings on Three Classes of Certs.
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on classes
A-6, A-8, B-3, B-4, and B-5 of Asset Securitization Corp.'s
commercial mortgage pass-through certificates series 1997-D4.  At
the same time, all other outstanding ratings from this transaction
are affirmed.

The raised and affirmed ratings reflect the recent favorable asset
disposition of Prime Retail II and resultant repayment of interest
shortfalls, as well as credit enhancement levels that provide
adequate support through various stress scenarios.

As of June 2005, the trust collateral consisted of 105 commercial
mortgages with an outstanding balance of $1.046 billion, down
25.5% since issuance.  There have been 10 realized losses totaling
$14.4 million (1.02% of initial pool balance) to date.  The master
servicer, GMAC Commercial Mortgage Corp., reported full year 2003
net cash flow debt service coverage ratios for 16% of the pool and
partial or full year 2004 NCF DSCRs for 73% of the pool.  To date,
20.6% of the pool totaling $215.6 million has been defeased.
Based on this information and excluding defeasance, Standard &
Poor's calculated a pool DSCR of 1.49x, up from 1.42x at issuance.

The current weighted average DSCR for the top 10 loans, which
comprise 38.4% of the pool, improved to 1.58x, up from 1.34x at
issuance.  However, this calculation excludes the largest loan in
the pool, the Saracen portfolio.  With Saracen's 0.33x DSCR
included, the DSCR for the top 10 loans declines to 1.39x.  The
other top 10 assets have flat to improved DSCR performance since
issuance.  The Saracen portfolio has a current balance of $63.9
million, or 5.9% of the pool.  The loan is current and was
recently returned to the master servicer.  It is secured by six
office properties located near Boston, Massachusetts.

The loan has been assumed and the new borrowers have provided a
full guaranty up to $23 million.  Should the loan perform and pay
in full at maturity, GMACCM will be entitled to a principal
recovery fee.  Given the size of the loan, the collection of this
fee is expected to affect the liquidity of the subordinate
certificates.

There are five loans with a current combined balance of
$53.2 million, or 5.3% of the pool, that are specially serviced by
GMACCM. Four of these loans are 90-plus days delinquent and one is
current.  Significant loans are discussed below.

    -- The Century Square Mall loan has a balance of $19.7
       million and is secured by a 415,713 square-foot retail
       shopping center built in 1991 located in West Mifflin,
       Pennsylvania (about nine miles southeast of Pittsburgh,
       near the Allegheny County Airport).  It is 90-plus days
       delinquent.  Several tenants have filed for bankruptcy and
       have either left the center or reduced their rent payments.
       The latest servicer-reported DSCR, as of March 31, 2004,
       was 0.68x for the trailing 12 months, and occupancy has
       increased to 91%.  GMACCM indicated that a discounted note
       sale is expected within the next few weeks.

    -- Three lodging loans are 90-plus days delinquent.  Holiday
       Inn - Gretna, $9.6 million (0.91%), is a full-service 308-
       room hotel near New Orleans, Louisiana.  The borrower
       requested relief and is willing to give a deed-in-lieu.  As
       of June 30, 3002, the property reported a DSCR of 1.03x and
       occupancy of 55%.  Radisson Hotel - Columbus, $8.4 million
       (0.77%), is a full-service 268-room hotel in Columbus, Ohio
       that is now a Ramada.  The hotel is operating at a loss
       and a September 2004 appraisal valued the property at
       $5.6 million.  A loss is expected upon disposition.
       Clarion Suites Inn, $4.1 million (0.39%), is a 104-unit
       extended-stay lodging property in Manchester, Conn., near
       Hartford.

The servicer's watchlist includes 16 loans totaling $99.6 million
(9.5% of the pool).  The loans on the watchlist appear due to low
occupancies, low DSCRs, or upcoming lease expirations, and were
stressed accordingly by Standard & Poor's.

Standard & Poor's stressed various loans in the mortgage pool,
paying closer attention to the specially serviced and watchlisted
loans.  The expected losses and resultant credit enhancement
levels adequately support the current rating actions.

                           Ratings Raised

                       Asset Securitization Corp.
          Commercial mortgage pass-thru certs series 1997-D4

                        Rating
                        ------
            Class    To        From      Credit Enhancement
            -----    --        ----      ------------------
            A-6      AAA       AA+                   17.41%
            A-8      AA        A                     13.38%
            B-3      BB        BB-                    5.33%
            B-4      B         CCC                    3.32%
            B-5      B-        D                      1.97%

                           Ratings Affirmed

                       Asset Securitization Corp.
          Commercial mortgage pass-thru certs series 1997-D4

              Class     Rating        Credit Enhancement
              -----     ------        ------------------
              A1-D      AAA                       41.57%
              B-1       BBB+                      10.03%
              B-2       BB+                        6.67%


BRANT POINT: Fitch Affirms BB Rating on $15 Million Class D Notes
-----------------------------------------------------------------
Fitch Ratings affirms three classes of notes issued by Brant Point
1999-1. These affirmations are the result of Fitch's review
process and are effective immediately:

   -- $35,000,000 class C-1 notes at 'BBB-';
   -- $13,750,000 class C-2 notes at 'BBB-';
   -- $15,345,379 class D notes at 'BB'.

Brant Point is a collateralized debt obligation managed by Sankaty
Advisors which closed May 28, 1999.  Brant Point is composed of
high yield bonds and loans.  Included in this review, Fitch
discussed the current state of the portfolio with the asset
manager and their portfolio management strategy going forward.  In
addition, Fitch conducted cash flow modeling utilizing various
default timing and interest rate scenarios to measure the
breakeven default rates going forward relative to the minimum
cumulative default rates required for the rated liabilities.

Since last review, Brant Point has continued to perform within
expectations.  The credit enhancement levels have remained stable,
and there has been no redemption of the class C notes and $2.3
million redemption of the class D notes due to a structural
feature that allows the D overcollateralization test to be cured
by paying down the D note first.

In addition, the weighted average rating has remained stable at
'B-' since the last rating affirmation. However, as of the May
2005 trustee report, excess spread has declined as the weighted
average coupon test decreased to 9.56% from 9.83%, with a minimum
threshold of 9.85%, and the A IC test has declined to 348.5% from
760.3%, at last review, with a trigger of 135%.

Another item of note is the $64 million in principal cash
outstanding in the collection account, which represents 19.82% of
the total collateral. The revolving period may be extended an
additional year by the majority holders of the class E notes.

The ratings of the class C and class D notes address the
likelihood that investors will receive ultimate and compensating
interest payments, as per the governing documents, as well as the
stated balance of principal by the legal final maturity date.

As a result of this analysis, Fitch has determined that the
current ratings assigned to the class C and D notes still reflect
the current risk to noteholders.

Fitch will continue to monitor and review this transaction for
future rating adjustments.  Additional deal information and
historical data are available on the Fitch Ratings web site at
http://www.fitchratings.com/For more information on the Fitch
VECTOR Model, see 'Global Rating Criteria for Collateralized Debt
Obligations,' dated Sept. 13, 2004, available on Fitch's web site
at http://www.fitchratings.com/


BUEHLER FOODS: Wants to Hire Gordon Brothers as Liquidating Agent
-----------------------------------------------------------------
Buehler Foods, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of Indiana, Evansville
Division, for permission to employ Gordon Brothers Retail
Partners, LLC, as their store closing and liquidating agent.

Gordon Brothers is an experienced store closing and liquidating
agent who performs similar services for debtors-in-possession on a
national scale.  Gordon Brothers helps major retailers close
underperforming stores and sell obsolete or surplus inventory.

Gordon Brothers is already familiar with the Debtors' operations
because it has already assisted them in conducting store closings
and liquidation at six of their store locations.

The Debtors want to employ Gordon Brothers to conduct store-
closing sales and liquidate four additional stores:

   (a) store number 168 in Highway 1 South, 1311 West Main Street,
       located in Carmi, IL 62821;

   (b) store number 175 in 602 North Main Street, located in
       Princeton, IN 47670;

   (c) store number 621 in 5364 Dixi Highway North, located in
       Louisville, KY 40216; and

   (d) store number 679 in 1340 Lyndon Lane, located in
       Louisville, KY 40222.

Gordon Brothers will also:

   (a) provide qualified supervisors to conduct the
       store closing sales and manage the sale process and
       disposal of the merchandise from the Stores;

   (b) recommend appropriate:

       1. advertising and signage to effectively sell the
          merchandise in accordance with a store closing sale,

       2. pricing and presentation of merchandise,

       3. staffing levels for the Stores,

       4. merchandise transfer strategies between Stores, and

       5. operation practices at the Stores;

   (c) monitor accounting functions for the store closing sales,
       and

   (d) perform other related functions deemed necessary by
       the Debtors and Gordon Brothers.

Michael Chartock, a member at Gordon Brothers Retail Partners,
LLC, discloses that Gordon Brothers will be paid:

   (a) a $20,000 base fee, and

   (b) a $5,000 incentive fee if the Recovery Percentage is
       greater than 55.5%.

The Debtors believe that Gordon Brothers Retail Partners, LLC, is
disinterested as that term is defined in Section 101(14) of the
U.S. Bankruptcy Code.

Headquartered in Jasper, Indiana, Buehler Foods, Inc., owns and
operates grocery stores under the BUY LOW and Save-A-Lot banners
in Illinois, Indiana, and Kentucky, North Carolina, and Virginia.
The company also sells gas at about a dozen locations.  In 2004
Buehler Foods acquired 16 Winn-Dixie stores in Louisville,
Kentucky, and renamed them Buehler's Markets.  Founded in 1940,
the company is still run by the Buehler family.  The Company and
its debtor-affiliates filed for chapter 11 protection on May 5,
2005 (Bankr. S.D. Ind. Case No. 05-70961).  Jerald I. Ancel, Esq.,
at Sommer Barnard Attorneys, PC, represents the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they estimated assets of $10 million to $50
million and debts of $50 million to $100 million.


CATHOLIC CHURCH: Tucson Reps. Seek Summary Judgment on 65 Claims
----------------------------------------------------------------
A. Bates Butler III, the Unknown Claims Representative, and
Charles L. Arnold, the Guardian Ad Litem, object to 51 more
claims, including:

   -- Claim No. 89, which asserts an abuse that occurred in
      1996 when the victim was 35 years old;

   -- Claim No. 87, which alleges an abuse that occurred in
      1964 when the victim was 7 years old;

   -- Claim No. 86, which asserts an abuse that occurred in the
      1950s when the victim was 5 years old;

   -- Claim No. 84, which describes an abuse that occurred from
      1999 when the victim was 40 years old; and

   -- Claim No. 82, which alleges an abuse that occurred from
      1966 to 1968 when the victim was 11 to 12 years old.

              Claims Reps Seek Summary Judgment

The Claims Representatives ask the U.S. Bankruptcy Court for the
District of Arizona for summary judgment on their objections to
all 65 claims.

Sally M. Darcy, Esq., at McEvoy, Daniels & Darcy, P.C., in
Tucson, Arizona, explains that personal injury claims, like those
held by sexual abuse victims, are time-barred by the statute of
limitations if the claimant does not assert them within two years
after the cause of action accrues.  When the alleged abuse occurs
when the victim is a minor, the accrual of the cause of action is
automatically delayed until the claimant reaches his or her 18th
birthday.  Unless there is a reason to toll the statute of
limitations after reaching adulthood, the Tort Claimants had two
years from the date they reached 18 to bring their claims against
the Diocese.

In sexual abuse cases, the statute of limitations may be tolled
when the victim has suffered from repressed memory, which prevents
the victim from discovering the harm, and when the victim is of
"unsound mind," which tolls the accrual of time due to the
victim's inability to act on his or her legal rights.  When a
claim on its face is barred by the statute of limitations, the
burden of proving the statue is tolled falls upon the claimant.

Messrs. Butler and Arnold reviewed each of the Tort Claims.  Many
of the claims contain credible allegations of abuse, Ms. Darcy
says.  The Representatives are not taking a position as to the
credibility of the claim, but object to those claims that, on
their face, are barred by the statute of limitations even though
the allegations may be true.  "The Tort Claims . . . did not
contain any evidence that would support the tolling of the statute
of limitations," Ms. Darcy contends.

Messrs. Butler and Arnold want the claims disallowed because more
than two years have passed and the claimants were adults when the
abuse took place, or, if minors when the abuse occurred, are now
past age 20.  The claimant did not pursue his or her legal rights
within two years after the cause of action accrued.

Where the information was provided by the claimant, the year when
the claimant turned 20 was noted.  All claimants had reached age
20 before 1990, according to Ms. Darcy.  In addition, Messrs.
Butler and Arnold noted each instance where a claimant has
acknowledged telling another person about the abuse.

Specifically, the Representatives ask Judge Marlar to disallow
these claims:

                                  Victim's Age      Year Victim
  Claim No.     Date of Abuse     During Abuse       Turned 20
  ---------     -------------     ------------      -----------
       2            1964                7               1977
      80
     253
       3
      14
     138
       8            1973               16               1977
      10            1988               27
      12            1960               10               1971
      17         1974 - 1978         13 - 18
      18         1993 or 1994        23 or 24
      21            1966             11 or 12           1973
      63         30 yrs. ago         15 - 16
      69         1965 - 1966           13               1971
      71         1960 - 1961           14               1966
      81         1968 - 1970          8 - 10            1980
      82         1966 - 1968         11 - 12            1975
      83            1978               15               1983
      84            1999               40
      86            1950s               5               1966
      87            1964                7               1977
     204
      89            1996               35
      90         1971 - 1972           15               1976
      91         1983 - 1984         12 - 16            1988
      92         1965 - 1977           32
      99            1968               17               1971
     200        1954 - 1955 &        5 and 15           1969
                1965 - 1966
     203           1962                 6               1976
     215        1975 - 1976          10 - 11            1984
     216        1977 - 1978           20/21
     217           1957               15/16             1961
     218        1979 - 1982          17 - 20            1982
     219        1954 - 1955            9/10             1964
     220        1964 - 1965          12 - 13            1972
     221        1963 - 1965          11 - 13            1972
     226        1980 - 1984          11 - 15            1989
     236         1967/1968            11/12             1976
     238           1980s             14 - 15            1987
     239        1951 - 1953          12 - 13            1960
     241        1970 - 1972          12 - 13            1978
     245           1962                12               1970
     247        1984 - 1987          31 - 34
     249        1945 - 1946           5 - 7             1961
     250        1969 - 1972          10 - 13            1979
     251        1974 - 1975            16
     252                               27
     259           1950s            12 or 13
      74           1977                13               1984
      31           1980s

Ms. Darcy relates that the victim holding Claim No. 90 reported
the abuse in 1997, while the abuse of the holder of Claim No. 17
was reported when the victim was 14 years old.  The holder of
Claim No. 12 told his or her parents about the abuse, and the
victim holding Claim No. 252 told his wife about the abuse in the
1960s.

The holder of Claim No. 63 told individuals about the abuse in
1975 and 1977.  Victims holding Claim Nos. 2, 80, 253, 69, 71,
82, 83, 84, 91, 99, 215, 217, 219, 220, 221, 236, 238, 245, 247
and 251 told other persons about the abuse they suffered.

Messrs. Butler and Arnold believe that Claim Nos. 2, 80, and 253
are related or duplicate claims.

Claim Nos. 3, 14, and 138 are also related or duplicate claims.
In addition, the holder of Claim Nos. 3, 14 and 138 appears to be
the spouse of the sexual abuse victim holding Claim No. 2.

To the extent Claims Nos. 2, 80 and 253 are disallowed, the
Representatives assert that Claim Nos. 3, 14 and 138 must also be
disallowed.

                 Claims Not Related to the Diocese

The Representatives also want four claims that identify acts that
occurred in another Diocese disallowed:

   * Claim No. 68 refers to acts that occurred in Inglewood,
     California, by the parish priest.  There is no known
     relationship between the California parish priest or the
     victim and the Tucson Diocese.  The claimant is the parent
     of the holder of Claim No. 70.

   * Claim No. 70 describes an event that occurred in California
     by the parish priest.  Neither the claimant nor the parish
     priest appear to have any connection to the Tucson Diocese.
     The holder of Claim No. 70 is the child of the holder of
     Claim No. 68.

   * Claim No. 73 describes events that occurred in Falls River,
     Massachusetts, by the parish priest.  Neither the victim nor
     the parish priest appear to have any relationship to the
     Tucson Diocese.

   * Claim No. 222 describes an event that occurred in Chicago,
     Illinois.  Neither the victim nor the alleged perpetrator
     appear to have any relationship to the Tucson Diocese.

              Claims That Are Not Tort/Abuse Claims

The Representatives point out that the holder of Claim Nos. 64 and
65 appear to be the parents of a victim of abuse.  The claims
describe an abuse that occurred in 1982 when the victim was 13 to
14 years old.  However, the claim is not for the alleged abuse,
but for a breach of fiduciary duty in promising proper steps to a
successful conclusion of the investigation.

Claim No. 254 is by a priest seeking his retirement package.
Claim No. 255 relates to salaries, benefits, compensation or gifts
due.

Messrs. Butler and Arnold do not take a position on whether the
four Claims should be allowed.  However, they urge the Court to
disallow them as Tort Class 10 claims.

           Claims That Have Insufficient Information

Mr. Darcy contends that three claims contain insufficient
information, and should be disallowed if additional information is
not provided:

   (1) Claim No. 237 fails to disclose any dates.  However, the
       Claimant turned 20 years old in 1973.

   (2) Claim No. 242 fails to disclose the dates of abuse.
       However, the victim turned 20 years old in 1975, and
       describes abuse that took place during his or her years
       of catechism classes.

   (3) Claim No. 256 is completely lacking of any information.

          Claims That Fail to State an Allowable Claim

Messrs. Butler and Arnold assert that two claims should be
disallowed because they fail to state a claim against the
Diocese:

   -- Claim No. 11, which describes an alleged claim against the
      Tucson community for harassment; and

   -- Claim Nos. 13 and 76, which are related, and describe
      harassment by broadcasting undisclosed words over the
      airwaves.

The Roman Catholic Church of the Diocese of Tucson filed for
chapter 11 protection (Bankr. D. Ariz. Case No. 04-04721) on
September 20, 2004, and delivered a plan of reorganization to the
Court on the same day.  Susan G. Boswell, Esq., Kasey C. Nye,
Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson
Diocese.  (Catholic Church Bankruptcy News, Issue No. 31;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


CATHOLIC CHURCH: Tucson Files Amendments to Third Amended Plan
--------------------------------------------------------------
Susan G. Boswell, Esq., at Quarles & Brady Streich Lang LLP, in
Tucson, Arizona, notifies the U.S. Bankruptcy Court for the
District of Arizona that the Diocese of Tucson has made certain
technical and non-material amendments to its Third Amended and
Restated Plan of Reorganization dated May 25, 2005.

Ms. Boswell explains that the Plan provides for further
distributions from the Settlement Trust after the Excess
Distribution other than the Additional Distribution, which will
include, but not be limited to, any reserves established by the
Trustee of the Settlement Trust, any amounts remaining in the
Litigation Trust to be referred to the Settlement Trust, and any
additions to the Fund after the Initial Contribution amount which
are not allocated to the Unknown Claims Reserve.

"Any funds remaining in the Litigation Trust after all
distributions required to be made out of the Litigation Trust will
be distributed to the Settlement Trust for distribution in
accordance with the terms of the Plan and the Settlement Trust
Agreement," Ms. Boswell says.

The Plan will also be amended to provide that funds remaining from
any reserves established pursuant to the Settlement Trust will be
redistributed in accordance with the terms of the Plan as Further
Distributions.

The Roman Catholic Church of the Diocese of Tucson filed for
chapter 11 protection (Bankr. D. Ariz. Case No. 04-04721) on
September 20, 2004, and delivered a plan of reorganization to the
Court on the same day.  Susan G. Boswell, Esq., Kasey C. Nye,
Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson
Diocese.  (Catholic Church Bankruptcy News, Issue No. 31;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


CENVEO INC: Names James R. Malone as New CEO
--------------------------------------------
Cenveo(TM), Inc. (NYSE:CVO) reported that James R. Malone,
founding and managing partner of Qorval, LLC, has been named CEO
of the company, effective Monday, June 27, 2005.

"We are very pleased to have Jim Malone, with his background,
expertise and leadership qualities, take the reins of Cenveo,"
said Susan Rheney, Chairman of Cenveo.  "Jim has a proven track
record of helping companies grow and prosper.  As we continue the
process of evaluating our strategic alternatives and strive to be
more flexible and efficient and to provide even greater levels of
service to our customers and value to our shareholders, Jim's
leadership will be invaluable."

Cenveo said Mr. Malone will also work closely with its financial
and legal advisors as the company continues an aggressive and
thorough evaluation of its strategic alternatives with the goal of
maximizing shareholder value, as it first announced on April 18,
2005.  The Company has said that it has already received
expressions of interest from a number of parties and is actively
reviewing them.

Most recently, Mr. Malone was founding and managing partner of
Qorval, LLC, a financial and business restructuring firm based in
Naples, Florida.  In this capacity, he assumed the role of Chief
Executive Officer of several companies including Mail Contractors
Of America, Inc., Avborne, Inc. and Brown Jordan International.

"I look forward to leading the company towards meeting its
financial and performance targets, while instilling confidence
with customers, suppliers, employees and shareholders," said Jim
Malone.  "Both the industry and today's economy create some
interesting challenges and I am excited about working with the
entire Cenveo team to realize the company's vision of becoming the
solution provider of choice for our customers."

Mr. Malone led the restructuring team at InaCom Corporation, a
$5 billion public company with over 10,000 employees that was a
leading single-source provider of information technology products
and service to Fortune 1000 companies.  In addition, Mr. Malone's
successful career includes CEO positions with Anchor Glass
Container Corporation, a leading glass container manufacturer;
Grimes Aerospace, a global provider of integrated avionics,
engines, systems and service solutions for the airlines industry;
and Purolator Products Company.  Under Mr. Malone's leadership,
Purolator's market capitalization grew from $12 million to $350
million.

Mr. Malone is a graduate of Indiana University in Bloomington,
Indiana. He currently serves on the boards of AmSouth
Bancorporation in Birmingham, Alabama and Ametek, Inc. in Paoli,
Pennsylvania.

Headquartered in Englewood, Colorado, Cenveo, Inc. (NYSE:CVO), --
http://www.cenveo.com/-- is one of North America's leading
providers of visual communications with one-stop services from
design through fulfillment.  The Company is uniquely positioned to
serve both direct customers through its commercial segment, and
distributors and resellers of printed office products through its
Quality Park resale segment.  The Company's broad portfolio of
services and products include e-services, envelopes, offset and
digital printing, labels and business documents.  Cenveo currently
has approximately 10,000 employees and more than 80 production
locations plus five advanced fulfillment and distribution centers
throughout North America.

                        *     *     *

As reported in the Troubled Company Reporter on April 20, 2005,
Standard & Poor's Ratings Services placed its ratings on Cenveo
Inc., including its 'B+' corporate credit rating, on CreditWatch
with developing implications.  The CreditWatch listing follows the
company's announcement yesterday that it has retained Rothschild
Inc. to explore strategic alternatives, which could include a sale
of the company.  Cenveo had about $850 million in lease adjusted
debt outstanding as of Dec. 31, 2004.

Developing implications suggest that ratings could be affected
either positively or negatively, depending on whether a
transaction ultimately occurs.  An example of a transaction that
might have a positive effect would be an acquisition by a higher-
rated entity.  An example of a transaction that could have a
negative impact might include a decision to increase debt levels
to pursue an acquisition or a recapitalization.

"In resolving its CreditWatch listing, we will continue to monitor
developments associated with the company's pursuit of strategic
alternatives.  We could decide to resolve the CreditWatch listing
at a later date if it appears a transaction is not likely to
occur," said Standard & Poor's credit analyst Emile Courtney.


COMMERCIAL VEHICLE: S&P Rates Proposed $150M Sr. Unsec. Debt at B+
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' corporate
credit rating to truck components manufacturer Commercial Vehicle
Group Inc.  In addition, Standard & Poor's assigned its 'B+'
rating to CVG's proposed $150 million senior unsecured debt, due
2013.  The lower 'B+' rating for the senior unsecured debt
reflects the substantial amount of priority liabilities in the
company's capital structure.  The outlook on New Albany, Ohio-
based CVG is stable.

Proceeds from the proposed transaction will be used, in part, to
pay down debt of about $162 million incurred to purchase the North
American assets of Mayflower Vehicle Systems and Monona Wire Corp.
At the same time it issues the new senior notes, CVG expects to
issue about $30 million of common equity.  Several of the
company's largest shareholders are selling their ownership stakes
at the same time, for about $115 million of equity, substantially
reducing their ownership positions.  Pro forma total debt
outstanding at close of the proposed transactions will be
approximately $190 million.

CVG designs, engineers, and produces structural components of
truck cabs, including frame sleeper boxes, and cab-related
interior products for the global commercial vehicle markets.  The
acquisition of Monona Wire gives CVG the ability to also produce
low-volume, high-mix electronic wire harnesses and panel
assemblies for construction equipment cabs.  CVG has been a public
company since its August 2004 IPO.

"The ratings reflect CVG's aggressive leverage and participation
in highly competitive and cyclical end markets," said Standard &
Poor's credit analyst Nancy C. Messer.  "These risks are mitigated
by the company's free cash flow generation, which should enable
modest debt reduction.  Other mitigating factors are the company's
above-average profitability and its solid position in the markets
it serves."

CVG's exposure to the highly competitive, price-sensitive, and
cyclical markets for commercial vehicles (59% of sales) and
construction (18%) present business risks because the company's
revenues depend on original equipment manufacturer (OEM)
production volumes and pricing schemes.  These markets are
currently experiencing an upturn in demand, but they tend to be
volatile, and a supplier can experience swings of as much as 50%
in EBITDA between end-market highs and lows.  CVG's customer base
is concentrated; 59% of sales are to commercial truck OEMs, and
70% of sales are to the company's top five customers.

Because the markets are price competitive, suppliers must
continually improve productivity and engineer new product designs
in order to protect margins.  CVG's revenue and asset bases are
modest in size, and its product applications, although enhanced in
2005 with the two acquisitions, remain narrow.  CVG has limited
geographic diversity, with 84% of 2004 revenues from the U.S.


CONTRACTOR TECHNOLOGY: Wants Case Converted to Chapter 7
--------------------------------------------------------
The Honorable Marvin Isgur of the U.S. Bankruptcy Court for the
Southern District of Texas, Houston Division, will consider at
3:00 p.m. today, June 24, 2005, whether to convert Contractor
Technology, Ltd.'s chapter 11 case into a chapter 7 liquidation
proceeding.

The Debtor tells the Court it can't sustain its operations owing
to customers who refuse to make payments for construction
projects.  In addition, the Debtor says, major vendors are
demanding cash payment on delivery of materials and services.

The Debtor urges the Court to convert its chapter 11 case to a
chapter 7 liquidation proceeding for the estate to avoid incurring
additional expenses.

Headquartered in Houston, Texas, Contractor Technology, Ltd. --
http://www.ctitexas.com/-- is a producer of recycled concrete
and asphalt. The Company filed for chapter 11 protection on
May 13, 2005 (Bankr. S.D. Tex. Case No. 05-37623).  Gregory R.
Travis, Esq., at The Travis Law Firm, represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it estimated assets and debts of $10 million to $50
million.


COVANTA ENERGY: Exclusive Plan Filing Period Extended to Nov. 1
---------------------------------------------------------------
Judge Bernstein extended the period within which the three
Remaining Debtors -- Covanta Warren Energy Resource Co., LP,
Covanta Warren Holdings I, Inc., and Covanta Warren Holdings II,
Inc. -- have the exclusive right to file a plan of reorganization
to November 1, 2005.

The Court sets the hearing on the Remaining Debtors' request to
extend the exclusive solicitation period to November 1, 2005, at
10:00 a.m.

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. 80;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


CROWN CASTLE: Debt Repayment Prompts S&P to Withdraw Ratings
------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its ratings on
Houston, Texas-based wireless tower operator Crown Castle
International Corp., including its 'B' corporate credit rating.

"The company recently repaid most of its existing debt from a
recent refinancing, including its publicly rated unsecured notes
totaling $1.4 billion," said Standard & Poor's credit analyst
Catherine Cosentino.  The ratings had been placed on CreditWatch
with positive implications on April 21, 2005, as part of Standard
& Poor's review of the tower sector.


DELPHI CORP: Declares Quarterly Dividend of $0.015 Per Share
------------------------------------------------------------
The Delphi Corp. (NYSE: DPH) Board of Directors declared a
quarterly dividend of $0.015 per share on Delphi $0.01 par value
common stock.  The previous quarterly dividend was $0.03 per share
paid in May 2005.

The Board determined that the reduction of the dividend is the
prudent course of action at this time given the significant
challenges facing the industry, including the reduction and
continued uncertainty of U.S. production volumes from Delphi's
largest customer.

"With our long-term sights on shareholder return, today's actions
conserve liquidity to support our transformation and strengthen
our business during this challenging environment," said J.T.
Battenberg III, Delphi chairman and CEO.  "This decision provides
further evidence of Delphi's commitment to maintaining and
conserving liquidity.  Last week, Delphi announced the completion
of a $2.8 billion refinancing plan designed to provide the company
continued access to long-term liquidity."

The dividend is payable Aug. 2, 2005, to shareholders of record as
of the close of business July 5, 2005.  The Board will continue to
evaluate the company's dividend policy on a quarterly basis.

                        Annual Meeting

The Board also scheduled Delphi's 2005 annual meeting of
stockholders.  The annual meeting will be held Oct. 12, 2005 in
Wilmington, Del.  Stockholder proposals intended for inclusion in
the proxy material for the 2005 annual meeting must be received at
Delphi's world headquarters in Troy, Mich., no later than July 14,
2005.  Delphi expects to mail proxy material containing additional
information about the 2005 annual meeting in August.

                        *     *     *

As reported in the Troubled Company Reporter on June 15, 2005,
Moody's Investors Service has affirmed the ratings of Delphi
Corporation, Senior Implied at B2 and Senior Secured Bank
Facilities at B1.  Moody's said the rating outlook is Negative.
The bank loan rating was initially assigned on May 19, 2005, as
part of the company's refinancing plan.  The affirmation follows
the disclosure by the company in its 8-K filing with the SEC on
June 9, 2005 that its Audit Committee had concluded that Delphi
"did not accurately disclose to credit rating agencies, analysts,
or the Board of Directors the amount of sales of accounts
receivable or factoring arrangements from the date of its
separation from General Motors until year-end 2004."


DEX MEDIA: Refinances $1.1 Billion Facilities & Reprices Debt
-------------------------------------------------------------
Dex Media, Inc. (NYSE: DEX) refinanced all of the existing
$1.1 billion in Revolving Credit Facilities and Term Loan A
Facilities of its subsidiaries, Dex Media East LLC and Dex Media
West LLC, to an initial price of LIBOR plus 125 basis points, with
potential step-downs to LIBOR plus 87.5 basis points based on
reductions in their total leverage.  The previous facilities of
Dex Media East and Dex Media West had been priced at LIBOR plus
175 basis points and LIBOR plus 200 basis points, respectively.

In addition to the refinancing, the Credit Agreements of Dex Media
East and Dex Media West have been amended.  These amendments,
among other things, provide permission for up to $400 million in
accounts receivable securitization facilities across Dex Media
East and Dex Media West to reduce existing credit facilities and
increase the combined restricted payment basket for quarterly cash
dividends from $70 million annually to $100 million annually.

Dex also disclosed that during May and June 2005 it cancelled
$300 million in pay-floating swaps, raising the fixed-rate portion
of its total debt to 67 percent, up from 63 percent.

"These changes are part of our ongoing effort to actively manage
our capital structure by reducing interest costs and managing
interest rate risk," said Robert M. Neumeister, Executive Vice
President and Chief Financial Officer.

Dex Media, Inc., is the exclusive publisher of the official White
and Yellow Pages for Qwest Communications International Inc.  In
2004, the company published 44.5 million copies of 269 directories
in Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska,
New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington
and Wyoming.  In addition to connecting advertisers and consumers
through its print and CD-ROM directories, Dex Media provides fully
searchable advertising on DexOnline.com(TM), the most used
Internet Yellow Pages in Dex Media's 14-state region, according to
market research firm comScore.

In 2004, Dex Media generated revenue of approximately
$1.65 billion, excluding the effects of purchase accounting
related to the acquisition of Dex Media West LLC.

                        *     *     *

Dex Media Inc.'s $500 million of Series B notes due 2013,
$361 million of 9% Series B discount notes due 2013, and
$389 million of 9% Series B discount notes due 2013, carry Moody's
Investors Service's B3 rating, Standard & Poor's B rating, and
Fitch's CCC+ rating.


E.DIGITAL CORP: March 31 Balance Sheet Upside-Down by $2 Million
----------------------------------------------------------------
e.Digital Corporation (OTC:EDIG) reported revenues for the fiscal
year ended March 31, 2005 totaled $4.25 million, a 24% increase
over fiscal 2004 revenues of $3.42 million.

The company reported a $997,000 or 23% gross profit in the fiscal
year compared to $689,000 or 20% for fiscal 2004.  The company
also reported a slightly reduced operating loss of $2.04 million
for the fiscal year compared to $2.33 million in fiscal 2004.

Also, the company reported it has a backlog of product purchase
orders of approximately $1.9 million that it expects to ship in
the first and second quarters of fiscal 2006.

"We made progress this past year in expanding our business
opportunities and capabilities for our secure MicroOS(TM)-based
video/audio technology platform (DVAP) while growing annual
revenues," said Atul Anandpura, president and chief executive
officer of e.Digital Corporation.  "Based on current customer
relationships and business opportunities, in fiscal 2006, we
expect increased annual revenues and business over fiscal 2005,
most of which we expect will be derived from sales of secure
versions of our DVAP to branding customers for closed system video
products."

Mr. Anandpura continued, "While we look forward to increasing our
business with APS/Wencor through ongoing sales and support of
standard and enhanced versions of the digEplayer(TM), we expect
new customers outside of the in-flight entertainment industry will
also contribute revenue to e.Digital in fiscal 2006.  Kino(TM)-
based devices for high-speed video download kiosk-centered
businesses are among the products we expect to be announced by
branding customers in fiscal 2006.  We have also recently
developed proprietary networking technology for supporting content
downloading to multiple devices.  Intended for the rapidly growing
network storage device market, the first extension of this
technology is being offered for evaluation to interested branding
entities."

Concluded Mr. Anandpura, "The combination of our secure DVAP and
proprietary content encryption technology is attracting companies
interested in branding and marketing a variety of video-based
products either with pre-loaded, or with fast and easy access to,
desirable protected content.  Even as we continue to deal with
limited financial resources, we believe e.Digital can be
successful through additional, emerging business with companies
who share our core vision of making desirable video content easily
accessible to customers and consumers through partner-branded,
e.Digital-powered secure video products.  We will be releasing
further information regarding corporate and business developments
before our scheduled August 4, 2005 annual meeting of
shareholders."

e.Digital Corporation -- http://www.edigital.com/-- partners with
leading, innovative companies, designing and providing
manufacturing services for their branded digital video, digital
audio and wireless products based on the Company's proprietary
MicroOS(TM)-enabled technology platforms.  e.Digital specializes
in the delivery and management of open and secure digital content
through it's Personal Video, Personal Audio, Automotive, and
Wireless technology platforms.  e.Digital's services include the
licensing of the Company's MicroOS(TM), custom software and
hardware development, industrial design, and manufacturing
services through the Company's manufacturing partners.

At Mar. 31, 2005, e.Digital Corporation's balance sheet showed a
$2,261,000 stockholders' deficit, compared to a $1,774,000 deficit
at Mar. 31, 2004.


EAGLEPICHER INC: Taps Deloitte to Provide Reorganization Service
----------------------------------------------------------------
EaglePicher Incorporated and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of Ohio for permission
to employ:

   -- Deloitte & Touche LLP as their bankruptcy and reorganization
      services provider, nunc pro tunc to Apr. 11, 2005, through
      May 28, 2005; and

   -- Deloitte Financial Advisory Services LLP as their bankruptcy
      and reorganization service provider, nunc pro tunc to
      May 29, 2005.

Deloitte & Touche had been providing the Debtors with certain
bankruptcy and reorganization services.  Deloitte & Touche
disclosed that it has implemented a reorganization of some of its
businesses intended to align its organizational structure.  As a
result, Deloitte Financial Advisory Services LLP, began providing
advisory services to the Debtors on May 29, 2005, with the same
personnel from Deloitte & Touche.

Deloitte FAS will:

   a) provide advice and recommendations designed to assist the
      Debtors in their preparation and handling of their invoice
      cutoff process for a bankruptcy filing;

   b) advise the Debtors as they undertake to establish reporting
      processes required in a chapter 11 proceeding, including
      Schedules of Assets and Liabilities and Statements of
      Financial Affairs, cash basis reporting, and other
      necessary information;

   c) assist the Debtors in gathering information regarding
      leases, contracts, and agreements in relation to the
      chapter 11 filing; and

   d) attend and participate as a technical advisor to management
      in its meetings on matters within the scope of the services
      to be performed and as mutually agreed upon.

Curtis McClam, a principal at Deloitte Financial Advisory Services
LLP, disclosed that his Firm's professionals bill:

         Designation                        Hourly Rate
         -----------                        -----------
         Partner, Principal, or Director    $450 - $650
         Senior Manager                     $350 - $575
         Manager                            $300 - $450
         Senior Consultant                  $250 - $350
         Staff                              $180 - $275
         Paraprofessional                   $ 75 - $125

Mr. McClam said his Firm has not received any promises regarding
compensation in the Debtors' chapter 11 cases.

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

Headquartered in Phoenix, Arizona, EaglePicher Incorporated --
http://www.eaglepicher.com/-- is a diversified manufacturer and
marketer of innovative advanced technology and industrial products
for space, defense, automotive, filtration, pharmaceutical,
environmental and commercial applications worldwide.  The company
along with its affiliates and parent company, EaglePicher
Holdings, Inc., filed for chapter 11 protection on April 11, 2005
(Bankr. S.D. Ohio Case No. 05-12601).  Stephen D. Lerner, Esq., at
Squire, Sanders & Dempsey L.L.P., represents the Company.  When
the Debtors filed for protection from their creditors, they listed
$535 million in consolidated assets and $730 million in
consolidated debts.


ENRON CORP: Asks Court to OK Amended Allocation of Trust Assets
---------------------------------------------------------------
As previously reported, Enron Corporation and its debtor-
affiliates sought the U.S. Bankruptcy Court for the Southern
District of New York's approval for the termination and
distribution of the assets of the Enron Gas Pipelines Employee
Benefits Trust.  Enron Corp. administers the Trust to provide
retiree medical and prescription drug benefits to the retired
employees (and their eligible spouses and dependents) of:

    * Florida Gas Transmission Company (a subsidiary of Citrus
      Corp., of which Enron was previously a 50% owner);

    * Transwestern Pipeline Company;

    * Enron Liquids Pipeline Company;

    * Northern Plains Natural Gas Company, which operates Northern
      Border Pipeline Company; and

    * Northern Natural Gas Company.

Included as Pipeline Retirees are the "Retained Retirees" and
some former Enron employees whose functions were devoted solely
to the operations of the Pipeline Companies.

Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, in New York,
relates that Northern Natural Gas had been sold by Enron.  The
sale took place on June 30, 2002.  Since then, all of the other
Pipeline Companies, other than Liquids, were consolidated by
Enron through a contribution of those companies to CrossCountry
Energy, LLC, the equity of which was then sold to CCE Holdings,
LLC, on November 17, 2004.

Contributions to the Trust were made by Enron and charged to the
Pipeline Companies or made directly by the Pipeline Companies,
based on liabilities attributable to the Pipeline Retirees, Mr.
Rosen states.  Contributions to the Trust have also been made by
Pipeline Retirees receiving benefits from the Trust including
certain Pipeline Retirees of Northern Natural Gas who did not
transfer when it was sold to Dynegy, Inc., certain Pipeline
Retirees of Liquids and certain Pipeline Retirees of the other
Pipeline Companies.

Contributions on behalf of Northern Natural Gas ceased with a
final payment on June 30, 2002, for coverage ended March 31,
2002.  Contributions on behalf of Liquids ceased as of the
commencement of 2004.  Contributions for all other Pipeline
Companies ceased on November 17, 2004, although coverage extended
through November 30, 2004.

Except for Retiree Benefit payment obligations to the Pipeline
Retirees that were incurred prior to the effective date of the
sales of the Pipeline Companies by Enron and except with respect
to the Retained Retirees, no Retiree Benefits have been paid by
the Trust on behalf of Pipeline Retirees after the sales.  As the
Pipeline Companies are no longer owned by Enron (other than the
Liquids corporate entity which sold substantially all of its
assets), Mr. Rosen asserts that there is no longer a need for
Enron to continue to maintain its administration of the Trust on
behalf of the Pipeline Retirees.

                        Debtors Amend Request

To separate trusts established by the Pipeline Companies, the
Reorganized Debtors amend its motion to ask the Court to approve
the distribution of the assets of the Trust allocable to the
Pipeline Companies based on certain procedures.  The Debtors
believe that each of the Pipeline Companies has continued to
provide Retiree Benefits after the effective dates of sale by
Enron.

                      Proposed Allocation Basis

The administrative committee of the Trust proposes that the
Trust's assets be allocated based on the Retiree Benefits
liability percentages of the Pipeline Companies.

Retiree Benefits liability, Mr. Rosen explains, means the
"accumulated postretirement benefit obligations" as defined by
Statement of Financial Accounting Standards No. 106, with respect
to current and future Retiree Benefits.  In the case of Liquids,
the calculation was made solely with respect to Liquids Retained
Retirees, Mr. Rosen notes.

According to Mr. Rosen, the first step in the proposed process is
to determine the Retiree Liabilities of the Pipeline Companies
based on their Pipeline Retirees as of June 30, 2002, and
allocate the assets of the Trust based on the resulting Retiree
Liabilities percentages.  "The reason for this initial
bifurcation of Trust assets is that [Northern Natural Gas] ceased
contributing to the Trust as of June 30, 2002, while the other
Pipeline Companies continued to contribute," Mr. Rosen clarifies.
"In that regard, the Retiree Liabilities of the Pipeline
Companies as of June 30, 2002, were calculated by Mercer Human
Resource Consulting . . . on an actuarial basis as of June 30,
2002."

Based on the Pipeline Companies' Liability Allocation Percentage,
the allocation of Trust assets as of June 30, 2002, will be:

    Pipeline           Retiree          Asset        Liability
    Company          Liabilities     Allocation     Allocation %
    --------         -----------     ----------     ------------
    Northern
    Natural Gas      $52,100,000    $22,753,314           72%

    All other
    Pipeline
    Companies         20,300,000      8,848,511           28%
                     -----------     ----------     ------------
    Total            $72,400,000    $31,601,825          100%

For Northern Natural Gas, the $22,753,314 in Trust assets
allocable to it as of June 30, 2002, will be brought forward to
the date of distribution to take into account:

    -- post-June 30, 2002, benefit payments by the Trust
       attributable to claim obligations incurred prior to
       June 30, 2002, for its Pipeline Retirees and for benefit
       payments for Northern Natural Gas Retained Retirees;

    -- retiree contributions to the Trust post-June 30, 2002,
       attributable Northern Natural Gas Retained Retirees; and

    -- asset gains and losses after June 30, 2002, attributable to
       the assets of the Trust allocable to Northern Natural Gas.

As Mercer calculated, the adjusted assets allocable to Northern
Natural Gas as of November 17, 2004, total $25,514,152.

The $8,848,511 remaining Trust assets allocable as of June 30,
2002, to all Pipeline Companies other than Northern Natural Gas
will be brought forward to the date of distribution to take into
account:

    -- post-June 30, 2002, contributions by Other Pipeline
       Companies to the Trust (including on behalf of Liquids);

    -- Pipeline Retiree contributions to the Trust post-June 30,
       2002, attributable to Pipeline Retirees of Other Pipeline
       Companies, including contributions by Liquids Retained
       Retirees and Other Pipeline Companies Retained Retirees;

    -- benefit payments from the Trust post-June 30, 2002,
       attributable to Pipeline Retirees of the Other Pipeline
       Companies, including Other Pipeline Companies Retained
       Retirees; and

    -- asset gains and losses after June 30, 2002, attributable to
       the assets of the Trust allocable to the Other Pipeline
       Companies.

As of November 17, 2004, the adjusted assets allocable to the
Other Pipeline Companies were $12,605,323 as calculated by
Mercer.  Thus, based on their Liability Allocation Percentage,
the allocable Trust assets of each of the Other Pipeline
Companies on November 17, 2004, will be:

    Pipeline           Retiree          Asset        Liability
    Company          Liabilities     Allocation     Allocation %
    --------         -----------     ----------     ------------
    Florida Gas
    Transmission      $8,233,000     $6,239,635          49.5%

    Transwestern       3,781,000      2,861,408          22.7%

    Enron Liquids      2,304,000      1,752,140          13.9%

    Northern Plains
    Natural Gas        2,319,000      1,752,140          13.9%
                     -----------     ----------     ------------
    Total            $16,637,000    $12,605,323         100.0%

According to Mr. Rosen, after the Court's approval of the amended
request, each of the Pipeline Companies will maintain, or will be
a party to, a separate trust intended to qualify as a voluntary
employees' beneficiary association under the Tax Code for the
benefit of the Pipeline Retirees allocable to the Pipeline
Companies.  The Trust Committee will calculate the assets
allocable to each of the Pipeline Companies as of the business
day immediately preceding the distribution.  The allocable assets
will be brought forward from November 17, 2004, for each Pipeline
Company based on the same procedures used to bring forward
Northern Natural Gas' share of assets from June 30, 2002, to
November 17, 2004.

The distributions will take place after:

    -- appropriate notice to Enron that trusts are in effect and
       benefit Pipeline Retirees of the Pipeline Companies;

    -- receipt of evidence by Enron that the trusts have received
       favorable determination from the Internal Revenue Service
       that those trusts qualify under Section 501(c)(9) of the
       Tax Code; and

    -- the indemnification and release of Enron and the Trust
       Committee by the applicable Pipeline Company of liability
       for Retiree Benefits attributable to the Pipeline Retirees
       applicable to the Pipeline Company.

The assets of the Trust are mainly invested in mutual fund
shares, with the balance held in short term investment funds and
cash equivalents to provide needed liquidity, Mr. Rosen relates.
To expedite the distribution of Trust assets, the Trust Committee
will instruct the Trustee to either distribute the mutual fund
shares in kind, or will have them liquidated and distributed in
cash.

The Reorganized Debtors seek Judge Gonzalez's authority to:

    (a) terminate the Trust;

    (b) apportion the Trust's assets among the Pipeline Companies,
        pursuant to the proposed procedures; and

    (c) transfer the assets to qualifying trusts maintained by the
        Pipeline Companies, or in the case of Liquids by Enron or
        one of its assigns, for the benefit of the Pipeline
        Retirees, subject to the indemnification to be provided by
        the Pipeline Companies.

                           *     *     *

Pursuant to Section 107(b) of the Bankruptcy Code and Rule 9018
of the Federal Rules of Bankruptcy Procedure, the Reorganized
Debtors ask the Court for permission to file under seal three
exhibits to their amended request:

    1. Exhibit A -- A Schedule of Retained Retirees currently
                    enrolled in the Enron Medical Plan

    2. Exhibit F -- List of Shared Service Employees and
                    Description of Allocation Methodology

    3. Exhibit G -- Assignment, Release and Indemnity Agreement

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.
148; Bankruptcy Creditors' Service, Inc., 15/945-7000)


EPOCH 2001-2: Moody's Junks $33M Class IV-A Floating Rate Notes
---------------------------------------------------------------
Moody's Investors Service lowered the ratings of three classes of
notes issued by EPOCH 2001-2, Ltd.:

   (1) to Ba3 (from Ba2), the U.S. $12,000,000 Class III Secured
       Floating Rate Notes Due 2006;

   (2) to Caa3 (from Caa2), the U.S. $33,000,000 Class IV-A
       Secured Floating Rate Notes Due 2006; and

   (3) to Caa3 (from Caa2) the Yen1,000,000,000 Class IV-B Secured
       Floating Rate Notes Due April 2006.

This transaction closed in November 2001.

According to Moody's, its rating action results primarily from
rating migration in the underlying referenced assets.

Rating Action: Downgrade

Issuer: EPOCH 2001-2, Ltd.

Class Descriptions: U.S. $12,000,000 Class III Secured Floating
                    Rate Notes Due 2006

   * Previous Rating: Ba2
   * New Rating: Ba3

Class Descriptions: U.S. $33,000,000 Class IV-A Secured Floating
                    Rate Notes Due 2006

   * Previous Rating: Caa2
   * New Rating: Caa3

Class Descriptions: Yen1,000,000,000 Class IV-B Secured Floating
                    Rate Notes Due 2006

   * Previous Rating: Caa2
   * New Rating: Caa3


FANNIE MAE: To Redeem $75 Million of Securities Issues
------------------------------------------------------
Fannie Mae (NYSE: FNM) will redeem the principal amount indicated
of the two securities issues on the July 1, 2005, redemption date
at a redemption price equal to 100 percent of the principal amount
redeemed, plus accrued interest thereon to the date of redemption:

    Principal   Security  Interest
     Amount       Type      Rate    Maturity Date  CUSIP    Redemption Date
    ---------   --------  --------  -------------  ---------  ------------
   $50,000,000   MTN       4.500%   April 1, 2008  3136F6V55  July 1, 2005
   $25,000,000   MTNR      6.375%   June 28, 2029  3136F5P21  July 1, 2005

Fannie Mae -- http://www.fanniemae.com/-- is a New York Stock
Exchange Company which operates pursuant to a federal charter.
Fannie Mae has pledged through its American Dream Commitment to
expand access to homeownership for millions of first-time home
buyers; help raise the minority homeownership rate to 55 percent;
make homeownership and rental housing a success for millions of
families at risk of losing their homes; and expand the supply of
affordable housing where it is needed most.

                           *     *     *

As reported in the Troubled Company Reporter on May 18, 2005,
Standard & Poor's Ratings Services raised its ratings on two
classes of Fannie Mae Multifamily REMIC Trust 1998-M1's REMIC
pass-through certificates.  Concurrently, ratings on three other
classes from the same transaction are affirmed.

The raised ratings reflect:

    (1) the stable financial performance of many of the
        multifamily properties underlying the trust collateral,
        along with low cooperative leverage ratios,

    (2) seven years of loan seasoning, and

    (3) only minor losses to date.

The affirmed ratings reflect credit enhancement levels that are
appropriate for the ratings.


FEDERAL-MOGUL: PD Panel's Experts Presented at Estimation Trial
---------------------------------------------------------------
On the fourth day of the trial to estimate the asbestos personal
injury claims against Federal-Mogul Corporation and its debtor-
affiliates, Adam P. Strochak, Esq., at Weil Gotshal & Manges, LLP,
in New York, representing the Property Damage Committee, continued
cross-examining Dr. Mark Peterson.  He noted that Dr. Peterson
cited three things that made it particularly complex to determine
the appropriate forecast claim values in Turner and Newall's case:

    (1) the Tweedale book [MAGIC MINERAL TO KILLER DUST; Turner
        and Newall and The Asbestos Hazard by Geoffrey Tweedale.
        The book is an account of the UK asbestos health problem,
        which provides an in-depth look at the occupational health
        experience of one of the world's leading asbestos
        companies -- British asbestos giant, Turner and Newall];

    (2) the loss of the obscurity that T&N enjoyed within the
        Center for Claims Resolution; and

    (3) the bankruptcy filings of other defendants.

"Is that correct, Dr. Peterson, that those are the three things
that you believed made it complex to forecast claim values for
T&N?" Mr. Strochak asked.

Actually, Dr. Peterson says, he listed six different factors that
would cause the average settlement amounts against Turner &
Newall to have increased as of the end of 2001 and 2002 as its
liability continued that adds complexity.  "The more important
issue is that all of those factors have the same effect, leading
to higher average settlements compared to the settlements that
Turner & Newall had made previously as a CCR member."

Dr. Peterson points out that Turner & Newall was one of those
companies that knew the asbestos in their products were killing
people and injuring others as early as the 1920s and 1930s.
"They refused to tell their workers . . . and explicitly
considered and decided not to inform workers of these dangers and
continued to expose people, creating the public health crisis
that we have with regard to persons exposed to asbestos.  A lot
of those culpable actions were done in concert and Turner and
Newall participated in organizations and corresponded with Johns-
Manville and other companies where they agreed to do that.  So to
that extent, it's kind of hard to separate out Turner & Newall's
culpability from that of its co-conspirators, but Turner & Newall
also maintained a strong record of how it treated its own workers
in, primarily in the U. K. and just a complete disregard for
their injuries and their unwillingness to assume the cost of
death benefits or other matters, even though Turner & Newall had
documentation and internally recognized that it was responsible
for those deaths and that kind of callousness is not really on
record for any other defendant that I'm aware of."

Mr. Strochak referred Dr. Peterson to his deposition that T&N is
probably the "worst" of any asbestos defendant.  "That was your
testimony, right, sir?"

Representing the Official Committee of Asbestos Claimants, Elihu
Inselbuch, Esq., at Caplin & Drysdale, Chartered, objected to the
form of question.  Nathan Finch, Esq., at Caplin & Drysdale,
Chartered, argued that the question is vague and imprecise.

Mr. Strochak explained that he thinks Dr. Peterson view is that
one of the reasons why T&N is becoming a better target because is
it was in fact more culpable.  "What I'm trying to do is shed
some light on that culpability factor."

After expressing some concerns, Judge Rodriguez permitted Mr.
Strochak to ask the question.

"Dr. Peterson," Mr. Strochak began, "I believe you've testified
that you had never seen a defendant that faced such a conjunction
of horrid things about what happened to it, that was the perfect
storm analogy that you drew, correct?"

"Certainly at that point in time no one, no other asbestos
defendant was facing the conjunction of circumstances that this
one was," Dr. Peterson replied.

In its history, T&N had approximately 381,000 claims against it
and it had resolved roughly 250,000 of those claims.

Mr. Strochak reminds Dr. Peterson that on direct testimony, he
said that T&N had only a small share of CCR liability except with
respect to the last couple of years of CCR's existence.

"I think I testified that it had around 10% or 11%, that may have
been on direct, cross, of the CCR liability.  And the CCR
liability itself was maybe half -- it was less than half of the
liability of all asbestos defendants, so it represents a couple
percent of the total liabilities across all defendants."

Mr. Strochak asked about CCR's total average historical payments.

According to Dr. Peterson, he had data from GAF that he reported
in GAF Holding that he assumed was the total payments by CCR, but
he never had a chance to confirm that either with GAF with the
Center for Claims Resolution.  Dr. Peterson said the GAF was not
cooperative about data issues and the CCR refused to talk to him
about its full liability.

Mr. Strochak points Dr. Peterson to the CCR values he reported
for mesothelioma from 1990 through 1999.

Dr. Peterson said that was his understanding at the time.  "I
think at the time I didn't have the concern that the sum may be
less than the parts, that's something that really occurred to me
looking right now at the GAF contributions."

"Dr. Peterson, did you ever do a comparison between the reported
information for T&N and the information you had for CCR to
determine what T&N's share really was?  Did you ever do a
comparison to see what percentage of CCR Mesothelioma payments
T&N represented?"

Dr. Peterson said what concerns him now is what he assumed to be
the total CCR settlements may not reflect the true picture.

"I'm beginning to get worried that maybe that the GAF -- that the
CCR data doesn't really reflect 100%.  I'm no longer -- you've
shaken my confidence here," Dr. Peterson said.

Mr. Strochak points out that Dr. Peterson has testified in a
variety of different cases on estimation of asbestos personal
injury claims.  "So as a general proposition, it is your view,
sir, that the liability of any particular bankruptcy debtor is
affected by the bankruptcies of other companies, right?"

"In each of those cases my job is to estimate what would have
been the liability for that company had it not entered
bankruptcy, what the asbestos creditors would be owed as
creditors of the company.  And in each case the bankruptcies of
eight other prominent defendants in 2000, 2001 would have
exacerbated the situation for each of those companies, they would
have expected to receive more claims and had to pay more money
for those claims, yeah, certainly," Dr. Peterson said.

"So just to take a hypothetical example, in the Owens Corning
case, you would hypothesize that Owens Corning may face more
liability on account of the bankruptcies of T&N, G-1 Holdings,
and Armstrong, correct?"

"Yes."

"And, likewise, in Armstrong, you would have hypothesized that
Armstrong would face more liability on account of the
bankruptcies of Owens Corning, G-1, and T&N, right?"

"Yes."

Dr. Peterson explained that in each instance, the companies that
went into bankruptcy were no longer contributing to compensation
of victims.  "And once the bankruptcies for any of the other
companies are confirmed, each and every one of those companies
will be paying impaired values, they will be paying pennies on
the dollar.  And so whoever was left outside in my analysis, the
company whose liability I'm estimating would both immediately and
over the long-term be expected to pay more because of the
unavailability of compensation from all of the other defendants.
And when you put together the fact that all of these other
defendants, including in this case Turner & Newall, would only be
paying pennies on the dollar once they come out, the total
compensation provided against all of the nine debtors that's
entered bankruptcy in 2000, 2001 would never reach the level that
it was before.  So it's not a windfall for the plaintiffs, it's
just a recognition that these are all insolvent companies that
can no longer pay their full obligation and you have to take that
into account.  And everyone I know who makes observations about
the asbestos litigation system recognizes it and takes it into
account, it's a fact."

According to Dr. Peterson, there are several thousands of
asbestos defendants.  Rand Corporation, where Dr. Peterson worked
for 25 years doing quantitative empirical research with regard to
the legal system, counts 8,000 defendants.

Mr. Strochak refreshed Dr. Peterson's recollection about the
Owens Corning case.  Mr. Strochak noted that Dr. Peterson
criticized the estimate of one of the opposing consultants who
testified in Owens Corning alleging that he had made improper
adjustments.  According to Mr. Strochak, Dr. Peterson alleged
that Dr. Frederick C. Dunbar had made inappropriate adjustments
that would reduce greatly his projected claim values below the
amounts that claimants had actually received in the past.  Dr.
Dunbar was retained as asbestos claims valuation expert by Credit
Suisse First Boston, the agent for Owens Corning's prepetition
lenders.

"Dr. Peterson, you came to the conclusion that it was
inappropriate for Dr. Dunbar to reject Owens Corning's actual
experience, correct?"

"I came to the conclusion that the particular steps that he did
to adjust its historical experience were biased and
inappropriate.  I didn't testify that it may be appropriate to
make correct adjustments in certain circumstances, it's just he
didn't do it."

Dr. Peterson said the historic claims experience of a company has
to be the place to start.  So he looked at Turner & Newall's
claims experience and he looked at Owens Corning's claims
experience.

Mr. Strochak notes that Dr. Peterson also criticized some of Dr.
Thomas E. Vasquez's conclusions in Owens Corning.  Dr. Peterson
opined that Dr. Vasquez used improper forecasting technique.

"I think Dr. Vasquez was either given poor instructions or did
not -- his report was not prepared for litigation, it was a
report that was prepared for Owens Corning internally and became
discussed and an exhibit in the litigation.  Dr. Vasquez finally
testified, but it wasn't prepared for litigation purposes," Dr.
Peterson said.

Mr. Strochak asked Dr. Peterson if, in the most recent history,
he observed a reduction in the level of claiming activity.

"I think in the last year and-a-half they're down, but in most
recent years they were up sharply after the time of the
bankruptcy and then beginning in late [2003 and 2004] . . .
claims against -- particularly the nonmalignant claims against
asbestos defendants have dropped off sharply because of the
pendency of the legislation in the U.S. Senate."

Mr. Strochak also reminded Dr. Peterson that he testified that
punitive damages really were not an issue for T&N because it
wasn't a litigating defendant in the system.  Mr. Strochak points
out that Dr. Peterson only knew of one punitive damages verdict
against T&N in its history.

"In your view, the threat of punitive damages has an impact on
settlement only when defendants are actually trying to settle a
case during trial, is that right?"

Dr. Peterson replied that no one has done an empirical study of
that.

"When I was at Rand, I tried to do an empirical study of what I
called the shadow effects of punitive damages and said this is no
practical way to do it, there's no appropriate research method,
so there isn't direct data with regard to it.  But in my opinion,
the threat of punitive damages would be clear in cases going to
trial.  My opinion is it would have little or no effect outside
of that.  Perhaps among cases prepared for trial it might.   But
the testimony both of Mr. Hanly and of his peers in the Owens
Corning case as well as plaintiffs' lawyers is that it isn't a
consideration.  And, as I've said earlier when you asked me about
the hedge on a bet, that the settlement process in asbestos
litigation has taken on a life of its own, it has its own market,
it's only modestly effected by any kind of trial judgments.
Because at this point in time when asbestos defendants have
settled hundreds of thousand of claims, when this defendant
settled 250,000 claims, there was a great deal of experience and
expectation on both sides is that they set a value and it's hard
to disturb that value other than kind of general trends.  And a
single event is not like to the disturb -- general changes from
the -- big changes in the litigation process, like the
bankruptcies that have occurred or leaving CCR, will distort and
change the trends.  A single trial is not going to have much
impact in the world when so many cases have been settled
already."

On re-direct examination, Mr. Inselbuch asked Dr. Peterson if he
made a caveat in his testimony that because it was based upon CCR
values, it should not be presumed to be accurate for the future.

Dr. Peterson replied that he made that caveat three or four times
in his testimony.  One of Dr. Peterson's caveats stated that:

    "It is unlikely that T&N would have been able to continue to
    resolve its asbestos liabilities for the amounts that it paid
    as a CCR member.  T&N would have had to pay considerably more
    on average to resolve claims in the future both because it
    lost the negotiating and tactical advantages that it had as a
    CCR member and also because it would have faced sharply
    increased demands and settlement expectations as other
    asbestos defendants entered bankruptcy in 2000 and 2001.
    These changes would have been particularly sharp for T&N
    because of its history in manufacturing and selling many and
    particularly dangerous asbestos products.  Even CCR members
    who did not have the burdens of T&N's particular corporate
    history saw their settlement values increase by multiples in
    the early 2000s after leaving CCR.  T&N would likely have had
    to pay even greater increases."

The Asbestos Claimants Committee and the Futures Representative
had asked Dr. Peterson to prepare a rebuttal report to Dr. Robin
Cantor's expert report.  A full-text copy of Dr. Peterson's 34-
page Rebuttal Report is available for free at:

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

                   PD Committee's Medical Expert
                          Dr. Hans Weill

Due to an accident, Dr. Weill, the PD Committee's medical expert,
can't attend the Estimation Trial.

Peter M. Friedman, Esq., at Weil, Gotshal & Manges LLP, presented
Dr. Weill's testimony.

Dr. Weill is a pulmonologist who is a former President of
American Thorasic Society with 35 years of active involvement in
the diagnosis, research and treatment of individuals exposed to
asbestos and other inhalents.  He's published some 50 articles
related to asbestos.

According to Mr. Friedman, Dr. Weill had testified that there has
be a marked downward trend in American workers' exposure to
asbestos beginning in 1972.  "On the issue of over reading and
under reading of asbestosis, Dr. Weill's report and testimony
indicate that since the late 1980s, he and other practicing
colleagues have rarely seen new cases of asbestos and believe
it's a gradually vanishing disease."

"His reports notes the evidence of systematic over diagnosis by
screening facilities which cannot be explained simply by random
variables among B readers.  In addition, his report indicates
that any estimation which does not take into account systematic
over diagnosis of asbestos will overestimate the incidents of
valid claims.  Dr. Weill testified that death certifies which
other witnesses have relied upon for counting the instances of
asbestos are not a reliable source of information about the cause
of death unless the death is cancer, but as for asbestosis
they're not reliable."

"He discussed his peer reviewed article which demonstrated that
lung cancer can only be caused by asbestos exposure if the person
with cancer has asbestosis.  And his report and his trial
testimony have detailed criticisms of the Cullen study, which Dr.
Welch relies on, and also demonstrates how the Cullen study,
which is in evidence here which Dr. Welch relies on, actually
support Dr. Weill's peer reviewed theory that asbestosis is a
necessary [precursor] for lung cancer to be related to asbestos
exposure."

"Dr. Weill also testified that asbestos exposure caused by lung
cancer is declining and he testified that while asbestos can
cause lung cancer and non-idiopathic mesothelioma, it does not
cause other forms of cancer, and his report cites numerous source
on that."

Mr. Finch, on cross-examination, tells the Court that obviously
no lawyer's characterization of the evidence is as reliable as
the evidence itself, but the Asbestos Claimants Committee
believes that Dr. Weill's cross-examination in the Owens Corning
case establishes that:

    -- Functional impairment is not required for a diagnosis of
       asbestosis.

    -- Asbestosis can be present even without being detectable on
       an x-ray.

    -- A 1/0 x-ray on the ILO scale is sufficient to diagnose
       asbestosis.

    -- A doctor can determine the presence or absence of an
       asbestos-related nonmalignant disease without doing a
       physical examination.

    -- There is a fourfold increase in the risk of contracting
       lung cancer if someone has x-ray evidence of asbestosis
       even without lung function decline.

    -- The peak year for usage of asbestos in the United States
       was 1972.

    -- There is no study upon which Dr. Weill would rely that
       projects the incidence or the prevalence of nonmalignant
       asbestos disease in the United States.

    -- The only substance which has been conclusively linked to
       mesothelioma in the male population is asbestos exposure.

    -- There is no upper limit for the latency for mesothelioma.

    -- The latency period for asbestosis is likely to be longer
       than it was in the past and that might be up to 30 or 40
       years.

    -- Any decline in the mesothelioma incidents in the United
       States is not statistically significant.

    -- Based on the SEER data, the incidence rate for mesothelioma
       is currently two for every 100,000 of the male population.

    -- There are currently approximately 2,800 new cases of
       mesothelioma in males each year.

    -- Dr. Weill relied on this NIOSH information that Dr. Welch
       testified about.  He relied on it because he found
       government statistics to be reliable.

    -- Dr. Weill admitted that he overwhelmingly testifies at the
       request of asbestos defendants in asbestos litigation.

The PD Committee had asked Dr. Weill to comment on Dr. Laura S.
Welch's Expert Report.  According to Dr. Weill, a problem that
applies to the entirety of Dr. Welch's report is that the bases
for her various opinions are not referenced by specific papers in
scientific literature.

A full-text copy of Dr. Weill's comments is available for free
at: http://bankrupt.com/misc/WeillOnWelch.pdf

                        PD Committee Offers
                  George Michael Lynch's Testimony

As Michael P. Kessler, Esq., at Weil, Gotshal & Manges LLP, was
about to summarize a portion of George Michael Lynch's testimony
by deposition, Mr. Finch objected to a portion of the deposition
for lack of relevance and lack of foundation.  Mr. Lynch is
Federal-Mogul's chief financial officer.

Judge Rodriguez ruled the background must to be presented first
before considering the question of relevance.

Mr. Lynch has been Federal-Mogul's chief financial officer since
prior to the year 2001.  As CFO, Mr. Lynch reviews and signs
filings with the Securities and Exchange Commission.  He makes
certain that the information is truthful and accurate before
signing any document.

According to Mr. Kessler, Mr. Lynch also testifies several times
that in the SEC filings, the financial statements, the audited
financial statements of the company are included.  In those
financial statements, the company reports an estimated liability
for aggregate asbestos claims in the range of $1.6 billion.  "It
actually ranges from about $1.550 billion to $1.6 billion.  This
estimate is based upon an estimation valuation commissioned by
the debtors Federal-Mogul from an organization called NERA, and
it first is included in their SEC filings for the 10-K for the
year-ending 2001.  It's presented with the 10-Ks for each of the
years 2001, 2002, 2003."

Mr. Kessler related that Mr. Lynch believed at the time that he
signed it, that the estimate for asbestos liability contained in
the financial statements was an accurate estimate for the company
at that time.  Mr. Lynch believed that the requirement for
submitting their asbestos liability under GAAP and SEC
requirements was to submit an estimate that was at least at the
lowest range of accuracy beginning with the 2004 SEC filing.  Mr.
Lynch testified that he was aware of the existence by that time
of Dr. Peterson's report that estimated asbestos liability in
excess of $11 billion.  He testified that he did not read the
report himself, but he read the explanation and summary of it in
the disclosure statement.  "And notwithstanding his knowledge of
that report and the knowledge of the author, Ernst & Young, of
that report, the company continued to submit a financial
statement in their 10-K showing their estimated asbestos
liability of $1.55 billion as contained in the NERA report that
they received in 2001."

When confronted as to why they, the company, would still submit a
$1.6 billion approximate asbestos liability in 2004 and after it
had received and knew of the Peterson report, Mr. Lynch again
testified that it was his understanding that they could file an
estimate at the lowest range of accuracy, Mr. Kessler said.

"And when confronted a second time with that same question he
says yes, this is my understanding, I would not have filed the
report showing a $1.6 billion estimate of asbestos liability had
I not believed it had at least as high a likelihood of accuracy
as the higher estimate submitted by [Dr.] Peterson," Mr. Kessler
told the Court.

Mr. Kessler and Mr. Finch continued to argue about the relevance
of the financial statements.

"Let me make my position clear," Judge Rodriguez said, "because I
think if there is going to be an appeal, the Third Circuit should
know exactly what it is I'm thinking.  I understand my function
is to try to determine the amount that reasonably should be
estimated in order to take care of past, present, future filings,
which means that the very fact that both sides are here means
that it's contested and disputed.  We're going to hear from
experts from both sides that are going to come here and stand or
fall on their own testimony to determine the amounts that the
Court would have to determine, accept one the other or make
certain adjustments.  What you are saying is here comes the CFO
of a company and he's going to give you a number, if that number
isn't supported where you can stand on that number and show me
why it should be accepted beyond what has developed here in the
courtroom, simply because it comes in as what appears to be an
admission.  It's admitted.  It could be admitted.  I'm talking
about the weight."

"Now here goes a very gross analogy, and every time I give an
analogy I get into hot water.  CEOs appear before you and they
swear to tell the truth.  Cigarette smoking doesn't cause cancer.
Is that it?  The case over?  Or do you dissect their opinion?
You could put that in there without other foundation as to how it
was arrived at, it's a number that's in the record.  How do you
balance its weight when you are dealing with two experts that are
actually dissecting and fragmenting the very issues the Court has
to decide?  The weight of it sits there for whatever."

"I think the Court has to be primarily influenced by actual
testimony that's tested under the crucible of cross-examination
to then arrive at its determination.  And other than that, it's
admitted, but I caution you about its weight, as I sit here now,
being simply the statement of a financial officer without
foundation."

"Recent experience has taught us that you can't just take blindly
what corporations are telling the world what their financial
health is.  Right?  And all I'm saying is in that environment, I
just want to see proof come through the witness stand where its
credibility can be questioned before we take it as a fact."

Mr. Finch asserted that Federal-Mogul is not a party in this
proceeding.  The Federal Rules of Evidence applies.  "The
financial statements, the basis for the number in the financial
statements refers to the work of an outside econometric firm.
That makes it second level hearsay.  It's not just what the
company is telling the world, it's also the company saying we're
relying on these other guys.  Nobody's had the opportunity to
cross-examine those people or take their deposition or find out
what the assumptions were that went in.  One of assumptions was
that they projected the liability out only for 12 years.

"Whatever [Federal-Mogul] said in its financial statement is not
an admission against my client, our client, the Asbestos
Claimants Committee and the Future Claimants Representative, so
there is no way around the hearsay objection for that, it's
second level hearsay," Mr. Finch said.

The lawyers further argued over the admission of an informational
brief.

Judge Rodriguez pointed out that there's no question that there
may be questionable readings that are presented to the Court.
"And you're looking at it as the tort system exists today, where
two experts testified and the jury is told who do you believe by
a preponderance of the believable testimony.  And they make
decisions that may be totally medically wrong but they're doing
it on the basis of what they see as they measure credibility.
Those case have a value.  Yet there may be x-rays in that case
where someone says, hey, that doctor's totally wrong.  And I hear
the defense bar saying it.  I hear the plaintiff's bar saying,
you know, I can give you the name of a doctor that hasn't found a
disability in 20 years.  I'm aware of those extremes.  That's why
what we have to do is pierce through the credibility of those who
are sitting here to find out the elements we want to really
consider."

"All I'm saying is I'm aware of Judge Fullam's opinion.  I'm
aware of the way the Third Circuit, if I disagree with Judge
Fullam, will look at both of our opinions.  And I'm sure that six
eyes are better than four, meaning Fullam's and mine, you have
six.  I'm aware of that.  And we are not going to try to
recklessly stumble through to something, but try to reason on
whatever we do based on the record presented here," Judge
Rodriguez explained.

Judge Rodriguez permitted Mr. Kessler to submit the deposition
transcripts.

                       PD Committee's Witness
                          Dr. Robin Cantor

Kristin King Brown, Esq., at Weil Gotshal & Manges, LLP, called
Dr. Robin Cantor to the witness stand.

Dr. Cantor has a Bachelor's of Science in mathematics from
Indiana University of Pennsylvania.  She has a concentration in
statistics.  Dr. Cantor has a Ph.D. in economics from Duke
University.  She has three fields of expertise -- econometrics,
public finance and international trade.  Econometrics is
basically statistical analysis and modeling applied to economic
data.

Dr. Cantor first worked for Oak Ridge National Laboratory, which
is one of the multifunction laboratories of the Department of
Energy.  For 10 years, she was involved in research and projects
that forecast environmental liabilities, including asbestos
liability issues.  Then, she moved on to National Science
Foundation, where she was the Program Director for the Decision
Risk Management Science Program for four and a half years.  Dr.
Cantor was also connected with LECG, an economics and financial
consulting firm.  As the Principal and Managing Director for the
Environmental and Insurance Claims Practice, Dr. Cantor analyzed
asbestos liabilities issues, among others.

Dr. Cantor currently works for Navigant Consulting as Director
and Subteam Leader for the Liability Estimation and Insurance
Coverage Analysis Subteam.  Her work includes estimating asbestos
liability.  Her subteam is currently involved in six bankruptcies
and five cases for ongoing firms.

She also submitted reports to Congress and published several
articles.

Dr. Cantor is the PD Committee's expert in economic, statistical
analysis, risk analysis, and asbestos liability estimates for the
Estimation Trial.

Mr. Inselbuch asked Judge Rodriguez for permission to voir dire
-- a preliminary examination to test the competence of a witness.

Judge Rodriguez consented and Mr. Inselbuch began grilling Dr.
Cantor.

Dr. Cantor related that she was engaged by the PD Committee
sometime during the end of October 2004.

Mr. Inselbuch asked if Dr. Cantor was ever engaged to do any
forecast of asbestos liability in a contested matter in a court.

No, Dr. Cantor replied.

"Have you ever been recognized by any court anywhere in the world
as an expert qualified to give an opinion on the estimation of
asbestos liabilities?" Mr. Inselbuch asked.

"No."

"At any time prior to your engagement here," Mr. Inselbuch
continued, "had you made any effort to interview plaintiffs'
asbestos lawyers to understand in any way how they operate and
how their business functions and what motivated their decisions?"

"Well, I think that I have attended conferences where they've
participated and I've certainly had the opportunity to hear them
talk about their environment and what factors seem to be shaping
their environment.  I don't know if that satisfies your
definition of what it means.  It's not me systematically
interviewing them, it is certainly me listening to what they have
to say about their environment," Dr. Cantor explained.

"So you never interviewed any plaintiffs' lawyers?"

"Are you speaking specifically with asbestos plaintiffs'
attorneys?" Dr. Cantor asked.

"Yes, asbestos plaintiffs' lawyers," Mr. Inselbuch said.  "And
I'm using the word interviewed in English."

"You know I certainly work with plaintiffs' counsel frequently
and I just don't know whether or not those people have any
asbestos claims or not.  I can't answer that question," Dr.
Cantor said.

Mr. Inselbuch wanted to know if Dr. Cantor ever asked any of
those plaintiffs' lawyers any questions about anything that went
on in asbestos litigation.

"I worked with Gilbert, Heinz & Randolph, so I think they -- I
don't know if they're plaintiffs' counsel.  I think they are."

Mr. Inselbuch told Dr. Cantor they're not.

"They're not?"

Mr. Inselbuch explained that Gilbert Heinz represent people in
insurance litigation.

Dr. Cantor noted that Gilbert Heinz seemed to know a lot about
plaintiffs' counsel and she had many conversations with them.

Mr. Inselbuch asked if Dr. Cantor ever interviewed any
defendants' lawyers to try to understand what motivates the
behavior of the lawyers in the litigation.

"Well, yes, of course.  Because I've work -- I mean, I would --
do you want the lawyers that are working with the insurance
companies?"

"No," Mr. Inselbuch said, "I'm asking you about lawyers that
defend defendants in asbestos litigation."

Yes, Dr. Cantor said, she was able to interview lawyers that
defend defendants in asbestos litigation.

"Who?"

"Well again, I mean, isn't Gilbert, Heinz & Randolph working with
the policyholder?" Dr. Cantor asked.

"Anybody else but Gilbert, Heinz & Randolph."

"You don't like that one," Dr. Cantor commented.

"No, I like them fine.  But I know for a fact they don't ever
participate in asbestos litigation," Mr. Inselbuch said.

Dr. Cantor informed the Court that she worked with a joint
defense group, on the Armstrong matter.  "I think there were
eight law firms there, O'Melvany & Myers was involved in that one
and it's my understanding that they work with defense, they work
on the defense side of asbestos litigation, so yes."

Mr. Inselbuch asked Dr. Cantor to specify who at O'Melvany &
Myers she talked to regarding how things function in asbestos
tort litigation.

Dr. Cantor named John Niles.  There was also one woman who she
was working with but Dr. Cantor said she could not remember the
name of that woman.

Mr. Inselbuch also asked Dr. Cantor if she had talked to any
doctors who practice medicine in the area of lung disease and who
have examined asbestos claimants.

Dr. Cantor said it's possible that she has.  "I know, for
example, Bernie Goldstein, he's actually a toxicologist and he's
at the University of Pittsburgh, and I've had many conversations
with him about asbestos and he's studied asbestos."

"Did you ever meet with any union representatives from unions
that included workers that work with asbestos to discuss the
history and generation of the asbestos litigation?"

Dr. Cantor said she can't immediately answer that question, she
has to review her files.

"So somewhere in your personal history you've talked to a lot of
people but you can't think of any one of them that was a union
representative that had, for unions that represented asbestos
workers, doctors who testified in litigation, in asbestos
litigation, defendants' lawyers, plaintiffs' lawyers, you can't
point me to anybody you talked to obtain a basic understanding of
what the data in this case shows," Mr. Inselbuch pointed out.

"First of all," Dr. Cantor said, "it's not just my personal
experience.  I was president of the Society for Risk Analysis.
It was my professional activities that involved me in these
discussions.  And, in fact, I was the person who was responsible
for organizing the sessions so I don't see how you can say this
is my personal business or personal behavior.  I think that for
any of these areas of risk, this is why I was president of the
Society for Risk Analysis because I am involved in these various
issues and I do have a basic understanding."

Mr. Inselbuch noted that Dr. Cantor declined to speculate what
plaintiffs' lawyers do.

"Well, I hope I declined to speculate about what anyone's
behavior is going to be.  I hope that, in fact, I've done
analysis and I have an informed opinion about what that behavior
is going to be.  I hope that I haven't speculated anywhere.  But
I would like to, if I may, just follow-up and explain why I don't
need to have specific information on plaintiffs' counsel or for
that matter specific information on defense counsel.  It's very
similar in economics, when we're trying to predict prices, which
we do all the time, and we look at price data to do that.  And
price data is the outcome of the behavior of suppliers and
demanders and I don't necessarily have to look at that particular
demand or supply behavior to be able to take the signal from the
interaction of that behavior to understand prices and make good
forecasts of prices.  So it's similar here in that we're trying
to do is a discounted cash flow analysis, which is the outcome to
interaction between the defense counsel and plaintiffs' counsel,
and I can look at the history and the information associated with
it and of the cash flows and the discounted cash flows over time
and then make a forecast from that information which will then
imbed the plaintiffs' and defense counsel behavior," Dr. Cantor
said.

Mr. Inselbuch asked if Dr. Cantor considered any changes in the
environment that all the participants worked in.

"Yes," Dr. Cantor replied.

"And how could you do that without understanding their
motivations?" Mr. Inselbuch asked.

"In the same way that I might look at regulation and prices and
understand that the regulation is going to effect prices without
specifically looking at what might be in the head of a person
who's going to buy a new pair of shoes.  So I can understand
what's going on with prices and market conditions and it's sort
of -- again, this is a big difference, I guess, in the various
ways people approach analysis.  But economists are outcome
oriented, we learn what we learn by examining what these outcomes
are and testing hypotheses about these outcomes.  Other sciences
may be more behaviorally oriented, may focus very much on what
people say but, in fact, there's a huge body in literature in
economics that shows that can be very unreliable to focus your
analysis on what people say as opposed to what people do."

Mr. Inselbuch told Judge Rodriguez that the Asbestos Claimants
Committee opposes the qualifications of Dr. Cantor as an expert.
"She's never done this before, she has no experience
understanding what goes on in the court system.  And she seems to
think she can simply apply mathematical procedures to data that
exists.  If that were true, presumably everybody in this
courtroom would qualify as an expert."

Judge Rodriguez said he will accept Dr. Cantor as an expert and
her testimony will be weighed.

Ms. Brown admitted Dr. Cantor's Supplemental Expert Report and
Rebuttal Report into evidence.

A full-text copy of Dr. Cantor's Supplemental Expert Report is
available at no cost at:

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

A full-text copy of Dr. Cantor's Rebuttal Report is available at
no cost at:

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

Dr. Cantor estimates T&N's U.S. liability for asbestos personal
injury claims at $2.5 billion.

According to Dr. Cantor, she looked at the pending claim
liability, the future malignant liability and the future
nonmalignant liability.  "Those are the three major components of
the total liability estimation."

Within the pending claim liability, Dr. Cantor used the actual
pending claim information.  "You would use the historical
acceptance rates and then the expected settlement value by
disease."

For the future malignant liability, Dr. Cantor said, there has to
be a methodology for constructing the count of these future
compensable claims, which have not yet been observed.  "And so
that analysis proceeds by looking at exposed workers in a
framework that's basically an economic and epidemiological
framework to understand how exposed workers finally become
potentially injured workers by death year and then that
information, in my approach, is multiplied by a compensability
rate and then multiplied by the expected settlement value by
disease.  That differs slightly with Dr. Peterson who is looking
at this propensities to sue, so that's a particular difference
between us."

"In future nonmalignant liability, you don't have an economic or
epidemiological framework that's generally accepted in the
estimation, so what people have done in this area is that they
have looked at the compensated nonmalignant claims as a ratio of
the compensated malignant claims and then apply that ratio to the
future compensable malignant claims to derive the future of
compensable nonmalignant claims and then multiply them by of the
expected settlement value by disease."

Dr. Cantor explained that when she derives expected settlement
values that will be used for the claims information whether or
not it's the pending versus the future claims, she starts with a
four-year window and she looks at the weighted average value over
that four-year window.  "I thought this was an area where there
would not be a lot of dispute because the earlier analysis -- in
the earlier analysis, Dr. Peterson had, in fact, used the four-
year window and that's a fairly standard thing for people to do.
And even the asbestos liability estimation is to basically try to
use a four-year window, a five-year window, something of that
nature, at least for, you know, starting with the base case."

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 US$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, P.C.,
represent the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
US$10.15 billion in assets and US$8.86 billion in liabilities.
At Dec. 31, 2004, Federal-Mogul's balance sheet showed a
US$1.925 billion stockholders' deficit.  At Mar. 31, 2005,
Federal-Mogul's balance sheet showed a US$2.048 billion
stockholders' deficit, compared to a US$1.926 billion deficit at
Dec. 31, 2004.  Federal-Mogul Corp.'s U.K. affiliate, Turner &
Newall, is based at Dudley Hill, Bradford. (Federal-Mogul
Bankruptcy News, Issue No. 84; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


FEDERAL-MOGUL: U.K. Court Offers Directions on English Law Issues
-----------------------------------------------------------------
The English solicitors for the Administrators of the English
Companies in the Federal-Mogul Group informed Judge Lyons that
the Administrators filed an application with the English High
Court of Justice.

On behalf of the Administrators of T&N Limited, Denton Wilde
Sapte tells the Bankruptcy Court that the Administrators asked
Justice David Richards "for directions concerning the conduct of
these cases and in particular the determination of English law
affecting the treatment of [U.S.] asbestos claims in English
insolvency proceedings relating to the [U.K.] Debtors."

Mr. Sapte relates that at the conclusion of a hearing held on
June 9 and 10, 2005, Justice Richards gave directions for future
conduct of the Application.

The core issues that the parties identified for Justice Richards
to address are whether, under the English law:

   (1) the choice of law applicable to the US asbestos claims
       would be governed by either the common law or the
       provisions of the Private International Law (Miscellaneous
       Provisions) Act 1995; and

   (2) the law to be applied to the quantification of damages in
       respect of the claims would be English law.

A full-text copy of the Judgment, together with the letter from
Denton Wilde and an amended application, is available at no
charge at:

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

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 US$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, P.C.,
represent the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
US$10.15 billion in assets and US$8.86 billion in liabilities.
At Dec. 31, 2004, Federal-Mogul's balance sheet showed a
US$1.925 billion stockholders' deficit.  At Mar. 31, 2005,
Federal-Mogul's balance sheet showed a US$2.048 billion
stockholders' deficit, compared to a US$1.926 billion deficit at
Dec. 31, 2004.  Federal-Mogul Corp.'s U.K. affiliate, Turner &
Newall, is based at Dudley Hill, Bradford. (Federal-Mogul
Bankruptcy News, Issue No. 83; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


FIRST CHICAGO: Fitch Lifts Rating on $119M Certs. One Notch to B+
-----------------------------------------------------------------
First Chicago-Lennar Trust I, series 1997-CHL1, commercial
mortgage certificates are upgraded by Fitch Ratings:

     -- $78 million class D to 'AAA' from 'BBB-';
     -- $119.4 million class E to 'B+' from 'B'.

   In addition, the following classes are affirmed:

     -- $19.2 million class C at 'AAA';
     -- $13.8 million class F at 'B-';
     -- $18.4 million class G at 'CCC'.

The class H certificates are not rated by Fitch.  Classes A, B,
and IO have paid in full.

The upgrades are due to improved rating migration of the
underlying certificates and increased subordination levels since
issuance.

The certificates are secured by 29 subordinate commercial mortgage
pass-through certificates (pledged certificates) from 15 separate
commercial mortgage securitizations (the underlying transactions).

Backed by a variety of property types, the underlying transactions
were securitized from 1993 to 1997 by various issuers and, as of
the June 2005 distribution date, have a current aggregate
certificate balance of approximately $1.8 billion, down from $8.8
billion at closing.  The ReREMIC's certificate balance has
decreased by 44.4%, to $255.3 million from $459.1 million at
closing. The decrease in certificate balance is due to paydowns of
$173.7 million and realized losses of $30.1 million on the pledged
certificate classes.

Delinquent loans currently account for 1.6% of the underlying
collateral: 0% 30 days delinquent; 0.2% 60 days delinquent; 0.5%
90+ days delinquent; 0% foreclosure; and 0.9% real estate owned.

Fitch rates 97.3% of the underlying transactions and 61.5% of the
pledged certificates.  For classes not rated by Fitch, an assumed
rating was determined based on current credit enhancement, Fitch's
ratings on other classes in the underlying transaction, current
delinquencies, and specially serviced loans and anticipated
losses, among other factors.

Based on Fitch's ratings or assumed ratings, 47.2% of the pool is
considered investment grade, compared to 0% at issuance.  While
10.2% of the certificates are first-loss pieces and losses are
expected, the improved credit migration and transaction paydown
warrant the upgrades to classes D and E.


FMC CORP: Moody's Upgrades Senior Unsecured Debt Ratings to Baa3
----------------------------------------------------------------
Moody's Investors Service upgraded all of FMC Corporation's senior
unsecured debt ratings to Baa3.  This ratings action was
consistent with Moody's previous statement that the existing debt
ratings would be raised to Baa3 upon completion of an amended bank
facility that incorporates terms and conditions suitable for an
investment grade profile.

As part of this action, Moody's upgraded to Baa3 from Ba1, FMC's
amended senior credit facility consisting of a $250 million term
loan A and a $600 million revolving credit facility, both now due
June 2010.  Proceeds from the amended credit facility will
primarily be used to redeem the $355 million 10.25% senior secured
notes due 2009.  The other debt ratings were raised to reflect the
banks' willingness to forego a secured position.

Moody's also withdrew FMC's Ba1 senior implied rating and SGL-2
speculative grade liquidity rating.  The upgrade also reflects
Moody's belief that the company has made significant progress
reducing contingent liabilities and improving credit metrics, and
that a general economic upturn will translate into improved
performance for 2005 and 2006.  This action completes a review
that was initiated on June 6, 2005.  The ratings outlook is
stable.

These summarizes the ratings activity:

   -- $45 million debentures due 2011 - raised to Baa3 from Ba2

   -- Medium-term notes due 2005 to 2008 - raised to Baa3 from Ba2

   -- Senior unsecured industrial revenue bonds due 2007 to
      2032 -- raised to Baa3 from Ba3

   -- $600 million revolver due 2010 - raised to Baa3 from Ba1

   -- $250 million term loan A due 2010 - raised to Baa3 from Ba1

   -- $355 million 10.25% senior secured notes due 2009 - raised
      to Baa3 from Ba2*

* Will be withdrawn upon redemption.

Ratings Withdrawn:

   -- Senior Implied Rating - Ba1

   -- Issuer Rating - Ba3

   -- Speculative Grade Liquidity Rating - SGL-2

   -- $100 million senior secured letters of credit facility
      due 2009 - Ba1

The revised ratings reflect FMC's:

   * moderate leverage;

   * product, customer, and geographic diversification;

   * good business scale with 2004 revenues exceeding $2 billion;
     and

   * leading market positions in such products as peroxides,
     carrageenan, and soda ash (the company typically has number
     one or two market share in most of its product lines).

In addition, Moody's believes FMC's results are somewhat less
susceptible to the economic cycle than other chemical
manufacturers due to the size of their agricultural and
biopolymers businesses.  Additionally, Moody's believes that the
impact of rising petrochemical feedstock and energy costs is less
than many other commodity chemical producers'.

The upgrade is also supported by:

   * improving operating margins;

   * the strong performance of the Agricultural segment;

   * improving supply/demand fundamentals within the Industrial
     Chemicals segment; and

   * the use of near-term asset sales to support debt reduction.

However, the ratings also consider agricultural market risks
including:

   * the seasonality of sales;

   * the significant influence of weather; and

   * the effect of crop prices and government subsidies on
     farmers' use of FMC's herbicide and insecticide products.

The ratings also reflect:

   * continued spending for environmental remediation;

   * an underfunded pension balance;

   * operating leases;

   * the cyclicality of the Industrial Chemicals segment; and

   * the potential for higher input costs to pressure operating
     margins.

The primary borrowers under the amended credit facility (rated
Baa3) will be FMC Corp. and certain foreign subsidiaries.
Domestic borrowings under the credit facility will be guaranteed
by FMC's direct and indirect material domestic subsidiaries and
international borrowings will be guaranteed by FMC Corporation.
The credit facility will be unsecured, a material change from the
current facilities.  Moody's does not believe that the guarantees,
as currently structured, represent enough of a benefit to the
banks to suggest notching differences with other debt.  FMC's
position as a borrower is further improved by the elimination of a
mandatory prepayment provision and by the removal of limitations
on acquisitions and dividends.  In the event that both S&P and
Moody's continue to rate FMC investment grade, the material
adverse change and litigation representations required at every
borrowing will also be eliminated.

FMC's existing $355 million 10.25% senior secured notes are to be
redeemed as part of the refinancing.  This debt is currently
secured on a second-priority basis by certain domestic
manufacturing and processing facilities and by FMC's shares of FMC
Wyoming Corp., and are guaranteed by the same subsidiaries as the
credit facility.  The security falls away if FMC's bank facilities
are unsecured.  Many of the provisions (including limitation
related to asset sales, additional indebtedness, and restricted
payments) also fall away in the event that both S&P and Moody's
rate the 10.25% notes investment grade.  FMC's existing medium-
term notes and debentures have substantially the same security
provisions as the senior secured notes, and with the banks having
released their security interests the remaining medium-term notes
and debentures are equally and ratably positioned with the
unsecured bank facility.

The ratings are further supported by FMC's moderate leverage and
the fact that the proposed refinancing will reduce the company's
annual interest expense by a run rate of approximately $20
million.  FMC's reported interest expense in 2004 was just over
$80 million.  The company has announced its intention to reduce
net debt to $600 million by the end of 2005.  The ratings also
incorporate more favorable industry dynamics within FMC's soda ash
product line, whereby soda ash is the largest component of
Industrial Chemicals revenues (FMC markets soda ash through its
87.5% interest in FMC Wyoming Corp.).

Soda ash capacity utilization has significantly improved from the
particularly weak levels experienced in 2000 and 2001, and current
operating levels are close to 100% for operating units in the U.S.
Moreover, the closure of American Soda by Solvay and price
increases announced by the industry should significantly improve
operating performance in 2005.  Moody's recognizes that the
company will not realize the full benefit of these price increases
in 2005 as a significant portion of customer contracts contain
price restrictions.  Most of these restrictions should expire by
the end of 2006.

The ratings also reflect improving fundamentals in phosphorous
chemicals (Astaris) and hydrogen peroxide, which have also
benefited from higher demand and industry capacity shut-downs.
Within North America, FMC is a leading producer of hydrogen
peroxide and Astaris is the second leading producer of phosphorous
chemicals, behind Innophos.  Moody's expects that FMC will benefit
from the improving economy in North America and the tighter
supply/demand balance for both of these products.  Nevertheless,
Moody's is concerned that Astaris is at a moderate cost
disadvantage compared to Innophos, due to the lack of vertical
integration and the inability to produce all of its downstream
products from wet acid.  Astaris, uses thermal acid to produce
certain of its products.

The ratings also consider the strong performance of FMC's
Agricultural segment, driven by a favorable global farm economy
and above-normal pest pressures in Latin America.  The
Agricultural segment's EBITDA had been steady at $100 million over
the three years ending 2003 and increased to just under $150
million in 2004.  Operating margins have improved above 20%.
Moreover, this segment should continue to post good earnings due
to a healthy pipeline of new products and high crop prices.
Moody's also derives comfort from the fact that insecticides (75%
of Agriculture segment revenue) tend to be less susceptible to
competition from GMO crops compared to herbicides.  However, the
ratings recognize that FMC is a small player in both insecticides
and herbicides and actions by competitors could have a significant
negative impact on FMC's financial performance.

The stable outlook reflects Moody's expectation that the company
will generate at least $120 million of free cash flow in 2005, and
that it will sustain or increase the current volume of business.
The ratings could be further upgraded if stronger-than-expected
demand or a further reduction in contingent liabilities results in
a sustainable annual retained cash flow to adjusted debt above
35%.  Conversely, the ratings or outlook could be lowered if a
debt-financed acquisition or a reversal in recent positive demand
trends results in adjusted debt to EBITDA exceeding 4.0 times or
free cash flow to adjusted debt less than 10% over the next 12
months.  Moody's notes that upon completion of management's often
stated goal of reaching investment grade further debt reduction in
2006 and 2007 is likely to be limited.  At some point, Moody's
expects FMC to consider the reinstitution of dividends and other
mechanisms to return cash to shareholders.  Moody's believes that
these shareholder efforts will remain consistent and balanced with
the goal of maintaining an investment grade profile.

The rating also derives support from:

   * FMC's strong liquidity, supported by the amended $600 million
     revolving credit facility;

   * a significant pro forma unrestricted cash balance;

   * a favorable debt maturity profile;  and

   * improving earnings, primarily stemming from the strong
     performance of the agricultural business.

Furthermore, the city of San Jose approved a two-phase purchase
agreement with FMC with respect to 75 acres of property for a
purchase price of $81 million.  The initial phase of this
agreement was completed in the first quarter for some $56 million.

However, the rating also reflects:

   * seasonality stemming from the agricultural business;

   * the likelihood for increased capital spending; and

   * that spending for environmental remediation and other legacy
     liabilities will continue to pressure cash flow.

More specifically, Moody's estimates that the company will spend
approximately $20 million in 2005 for the remediation and shutdown
of the Pocatello, Idaho facility as well as other restructuring
spending.  Additionally, Moody's anticipates voluntary pension
contributions continuing in 2005 and beyond (pension plan was
funded 86.2% and 85.9% as of 2003 and 2004 year-end,
respectively).  Overall, Moody's expects the company will generate
free cash flow in the range of $120 million in 2005 (excluding
Astaris payments) and will be slightly higher in 2006.

FMC Corporation is a diversified chemicals company headquartered
in Philadelphia, Pennsylvania.  The company reported revenues of
$2.1 billion for the LTM ended March 31, 2005.


G.S. DISTRIBUTION: Case Summary & 14 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: G.S. Distribution, Inc.
        dba Repossi
        609 Madison Avenue
        New York, New York 10022

Bankruptcy Case No.: 05-14576

Type of Business: The Debtor is a distributor of Repossi jewelry.

Chapter 11 Petition Date: June 23, 2005

Court: Southern District of New York (Manhattan)

Debtor's Counsel: Lewis W. Siegel, Esq.
                  Law Office of Lewis W. Siegel
                  444 Madison Avenue, 27th Floor
                  New York, New York 10022
                  Tel: (212) 481-1300
                  Fax: (212) 696-4064

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 14 Largest Unsecured Creditors:

   Entity                        Nature of Claim    Claim Amount
   ------                        ---------------    ------------
Repossi Diffusion S.A.M.         Inventory and        $5,000,000
Park Palace, Bloc B              disputed breach
5 impasse de la Fontaine         of contract
MonteCarlo                       claims
MONACO

Zurich Holding Company, LLC      Rent                   $100,000
One Union Square West
Suite 402
New York, NY 10003
Attn: Carol Adams
Tel: (212) 243-6722

OCS                              Services                 $5,903
99 Madison Avenue, 15th Floor
New York, NY 10016
Tel: (212) 277-9600

Constantin Associates            Services                 $3,808
575 Madison Avenue, 25th Floor
New York, NY 10022
Attn: Frederic V. Blanchard
Tel: (212) 755-5551

Aztec Services                   Services                 $2,835
791 East 132nd Street
Bronx, NY 10454

The Ritz-Carlton                 Services                 $1,800
50 Central Park South
New York, NY 10019

Oxford Health Plans              Insurance                $1,785
P.O. Box 1697
Newark, NJ 07101

William-Domenick, Inc.           Services                 $1,580
7401 18th Avenue
Brooklyn, NY 11204

T-Mobile                         Telephone services       $1,423
P.O. Box 742596
Cincinnati, OH 45274

Honeywell                        Services                 $1,265
P.O. Box 5114
Carol Stream, IL 60197

St. Paul                         Insurance                $1,109
Dept. CH 9072
Palatine, IL 60055

Futur Telecom                    Services                   $962
17 State Street, Suite 800
New York, NY 10004

Big Apple Visual Group           Services                   $135
247 West 35 Street
New York, NY 10001

AT&T Long Distance               Telephone services         $121
P.O. Box 9001309
Louisville, KY 40290-1309


GOLDENTREE: Fitch Affirms Low-B Ratings on Two GTHY I Certs.
------------------------------------------------------------
Fitch Ratings affirms six classes of GoldenTree High Yield
Opportunities I, L.P..  The affirmation of these notes is a result
of Fitch's annual rating review process and are effective
immediately.

     -- $310,000,000 senior credit facility at 'AA+';
     -- $182,000,000 class A notes at 'AA+';
     -- $45,000,000 class B notes at 'A+';
     -- $54,000,000 class C notes at 'BBB+';
     -- $25,000,000 class D notes at 'BB+';
     -- $14,000,000 class E notes at 'B+'.

GoldenTree High Yield Opportunities I, L.P. is a market value
collateralized debt obligation that closed in October 2000.  The
fund is managed by GoldenTree Capital Partners II LLC, which is a
wholly owned subsidiary of GoldenTree Asset Management L.P., a New
York-based investment manager with approximately $6.2 billion in
assets under management and a focus on fixed-income investing.

As of the May 31, 2005 valuation date, the fund's portfolio was
comprised of approximately 66% high-yield bonds, 25% bank loans,
3.9% mezzanine and special situations investments and the
remainder in cash.  The largest five issuers, which are classified
as liquid investments, represent approximately 17.6% of the total
market value of the fund's assets.  Performing bank loans priced
at or above 90% of par represented approximately 20% of the market
value of the GTHY I portfolio.  GTCP has been able to maintain a
sufficient overcollateralization level while continuing to
distribute funds to the equity holders.

Based on the diversity of the fund's portfolio, the cushion of the
OC tests, the conservative valuation of the semi-liquid and
illiquid investments, the continued distributions to equity
holders and the track record and experience of GTCP in the high-
yield loan, mezzanine and special situation asset classes, Fitch
affirms all of the rated liabilities issued by GoldenTree High
Yield Opportunities I, L.P.


GOLDENTREE: Fitch Affirms Low-B Ratings on $35 Mil. GTHY II Certs.
------------------------------------------------------------------
Fitch Ratings affirms six classes of GoldenTree High Yield
Opportunities II, L.P..  The affirmation of these notes is a
result of Fitch's annual rating review process and are effective
immediately.

     -- $300,000,000 senior credit facility at 'AA+';
     -- $163,000,000 class A notes at 'AA+';
     -- $40,000,000 class B notes at 'A+';
     -- $50,000,000 class C notes at 'BBB+';
     -- $20,000,000 class D notes at 'BB+';
     -- $15,000,000 class E notes at 'B+'.

GoldenTree High Yield Opportunities II, L.P. is a market value
collateralized debt obligation that closed in September 2001.  The
fund is managed by GoldenTree Capital Partners III LLC, which is a
wholly owned subsidiary of GoldenTree Asset Management L.P., a New
York-based investment manager with approximately $6.2 billion in
assets under management and a focus on fixed-income investing.

As of the May 31, 2005 valuation date, the fund's portfolio was
comprised of approximately 64% high-yield bonds, 25% bank loans,
14.3% mezzanine and special situations investments and the
remainder in cash.  The largest five issuers, which are classified
as liquid investments, represent approximately 15% of the total
market value of the fund's assets.  Performing bank loans priced
at or above 90% of par represented approximately 20% of the market
value of the GTHY II portfolio.  GTCP has been able to maintain a
sufficient overcollateralization level while continuing to
distribute funds to the equity holders.

Based on the diversity of the fund's portfolio, the cushion of the
OC tests, the conservative valuation of the semi-liquid and
illiquid investments, the continued distributions to equity
holders and the track record and experience of GTCP in the high-
yield loan, mezzanine and special situation asset classes, Fitch
affirms all of the rated liabilities issued by GoldenTree High
Yield Opportunities II, L.P.


GREAT WESTERN: Massey Energy Purchases Primary Assets for $4.8MM
----------------------------------------------------------------
Massey Energy Company (NYSE: MEE) acquired, through a bankruptcy
sale process, the primary assets of Great Western Coal, Inc.,
located in Harlan County, Kentucky.  The Company paid
approximately $2.1 million in cash, plus the assumption of related
property reclamation liabilities of approximately $2.7 million.
The assets acquired include an estimated 14 million tons of high
quality, low sulfur utility and industrial coal reserves and
related infrastructure, including an active surface mine and rail
loading facility.  In addition, Massey purchased the related
mining equipment for a total of $1.85 million.

"This acquisition allows us to expand our reach into a portion of
Central Appalachia where we currently don't have a strong
presence," said Don L. Blankenship, Massey Chairman and CEO.  The
Company reported that it plans to continue surface production and
review other possible future expansion opportunities.  Annual
production from the existing surface mine is estimated at between
200,000 and 300,000 tons.

Massey Energy Company, headquartered in Richmond, Virginia, with
operations in West Virginia, Kentucky and Virginia, is the fourth
largest coal company in the United States based on produced coal
revenue.

Headquartered in Coalgood, Kentucky, Great Western Coal, Inc., a
coal mining company, filed for chapter 11 protection on Dec. 10,
2003 (Bankr. E.D. Ky. Case No. 03-61955).  Robert Gregory Lathram,
Esq., represents the Debtor in its restructuring efforts.  When
the Company filed for protection from its creditors, it listed
$1,596,725 in total assets and $10,148,184 in total debts.


HOME EQUITY: Moody's Rates Class B-2 Sub. Certificates at Ba2
-------------------------------------------------------------
Moody's Investors Service has assigned an Aaa rating to the senior
certificates issued by Home Equity Mortgage Trust 2005-2 and
ratings ranging from Aa1 to Ba2 to the mezzanine and subordinate
certificates in the deal.

The securitization is backed by fixed-rate, conventional, fully
amortizing and balloon, primarily second lien residential mortgage
loans with original terms to stated maturity of up to 30 years.
The loans were originated by various originators and acquired by
DLJ Mortgage Capital, Inc.  According to Michael Labuskes,
Associate Analyst, "The ratings are based primarily on the credit
quality of the loans, and on the protection from subordination,
overcollateralization, and excess spread."  Moody's expects
collateral losses to range between 6.5% and 7.0%.

Wilshire Credit Corporation will service the loans.  Moody's has
assigned to Wilshire Credit Corporation its servicer quality
rating SQ2 as a primary servicer of second lien loans.

The complete rating actions are:

Home Equity Mortgage Trust 2005-2, Home Equity Mortgage Pass-
Through Certificates Series 2005-2

   * Class A-1 rated Aaa
   * Class A-2 rated Aaa
   * Class A-3 rated Aaa
   * Class M-1 rated Aa1
   * Class M-2 rated Aa2
   * Class M-3 rated Aa3
   * Class M-4 rated A1
   * Class M-5 rated A2
   * Class M-6 rated A3
   * Class M-7 rated Baa1
   * Class M-8 rated Baa2
   * Class M-9 rated Baa3
   * Class B-1 rated Ba1
   * Class B-2 rated Ba2


HORSEHEAD INDUSTRIES: Sells Unimproved Lot for $3M to SCB Services
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave Horsehead Industries, Inc., and its debtor-affiliates
permission to sell their unimproved real property, adjacent to its
former Monaca plant, to SCB Services Corp. for $3 million.

                      Previous Asset Sales

On Dec. 12, 2003, the Court authorized the sale of the Debtors'
businesses and substantially all of their assets to Horsehead
Acquisition.  The sale closed on Dec. 23 and 24, 2003.

The Court also approved the sale of the Debtors' property in
Rosamond, California, to MSBH Land Corporation for $270,000.  The
Property consists of approximately 80 acres situated in the
California desert at 1050 Sierra Highway in Rosamond, California.
The sale includes five buildings, the land surrounding them, and
some personal property.  Approximately 100 feet beyond the
property boundary is the Edwards Air Force Base property boundary.

The Debtors anticipate using the proceeds of these asset sales to
fund a yet-to-be-proposed chapter 11 plan.

Horsehead Industries, Inc., d/b/a Zinc Corporation of America, was
the largest zinc producer in the United States, and its affiliates
filed for chapter 11 protection on August 19, 2002 (Bankr.
S.D.N.Y. Case No. 02-14024).  Laurence May, Esq., at Angel &
Frankel, PC represents the Debtors in their restructuring efforts.
On December 12, 2003, the Court authorized the sale of the
Debtors' businesses and substantially all of their assets to
Horsehead Acquisition Corp.  The sale closed on Dec. 23 and 24,
2003.  The Debtors are in the process of selling their remaining
assets.  When the Company filed for protection from its creditors,
it listed $215,579,000 in assets and $231,152,000 in debts.


HOST MARRIOTT: Debt Reduction Prompts S&P's Positive Outlook
------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on hotel
owner Host Marriott Corp. to positive from stable.

At the same time, Standard & Poor's affirmed its ratings,
including its 'B+' corporate credit rating, on the Bethesda,
Maryland-based company.  Approximately $5.4 billion in total debt
(excluding $492 million convertible subordinated debentures) was
outstanding as of March 31, 2005.

"The outlook revision reflects Host's progress during the past
several quarters in improving credit measures due to earnings
growth and modest debt reduction," said Standard & Poor's credit
analyst Sherry Cai.  Host has acquired a number of hotels during
this time, but funded them in a manner that allowed its balance
sheet to continue to improve (e.g. funded with surplus cash and/or
proceeds from asset sales or equity offerings).  Credit measures
are expected to improve further in the next several quarters in
large part as earnings benefit from healthy industry conditions.

In the first quarter of 2005, the company's comparable revenue per
available room (RevPAR) grew 7.6%, while adjusted EBITDA rose to
$185 million (excludes $7 million of interest income from Host's
reported number), up 9% from the year-ago period.  This followed
RevPAR and adjusted EBITDA growth of 7.3% and 12%, respectively,
in 2004.  Including debt repayment that occurred in the second
quarter, total debt has declined modestly by over $420 million
since the end of 2003.  Standard & Poor's expects operating
momentum to remain strong for at least the next 12 months, driving
a further improvement to Host's credit measures.


HUFFY CORPORATION: Wants to Pay Shanghai Precision $262,445
-----------------------------------------------------------
Huffy Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of Ohio, Western
Division, for authority to enter into a settlement agreement with
Shanghai Precision Technology Corp.

Shanghai Precision manufactures and supplies the Debtors'
specialty golf products bearing brand and trade names owned by
Huffy.  The protected brand and trade names are valuable assets of
the estates.

Shanghai Precision filed claims with the Bankruptcy Court for
unpaid golf products delivered to Huffy.  It also filed an action
in the Superior Court of Los Angeles [Shanghai Precision
Technology v. Huffy Corporation, et al., Case No. BC 320517].  The
suit seeks payment for golf products delivered to Huffy and for
golf products manufactured but undelivered to the Debtors.

Shanghai threatened to sell the undelivered golf products in
markets where Huffy has protected distributorship agreements.

Huffy wants to avert the resale of the golf products and to
continue its business relationship with Shanghai Precision.  To
this end, Huffy agrees to pay Shanghai Precision $262,445 for the
immediate release of the golf products.

Shanghai, on its part, will release Huffy from all charges and
will continue manufacturing and delivering goods to the Debtors on
a go-forward basis.

Headquartered in Miamisburg, Ohio, Huffy Corporation --
http://www.huffy.com/-- designs and supplies wheeled and related
products, including bicycles, scooters and tricycles.  The Company
and its debtor-affiliates filed for chapter 11 protection on
Oct. 20, 2004 (Bankr. S.D. Ohio Case No. 04-39148).  Kim Martin
Lewis, Esq., and Donald W. Mallory, Esq., at Dinsmore & Shohl LLP,
represent the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
$138,700,000 in total assets and $161,200,000 in total debts.


INDYMAC ABS: Fitch Rates $8.5 Million Class M-11 Certs. at BB
-------------------------------------------------------------
IndyMac ABS, Inc. home equity mortgage loan asset-backed trust,
series INABS 2005-B certificates are rated:

    -- $686 million classes A-I-1, A-II-1, A-II-2, and A-II-3
       'AAA';

    -- $26.78 million class M-1 'AA+';

    -- $40.4 million classes M-2 and M-3 'AA';

    -- $12.75 million class M-4 'AA-';

    -- $11.9 million class M-5 'A+';

    -- $12.75 million class M-6 'A';

    -- $11.5 million class M-7 'BBB+';

    -- $8.9 million class M-8 'BBB';

    -- $8.9 million class M-9 'BBB-';

    -- $8.5 million class M-11 certificates, 144A, 'BB'.

The 'AAA' rating on the senior certificates reflects the 19.30%
total credit enhancement provided by the 3.15% class M-1, the
2.85% class M-2, the 1.90% class M-3, the 1.50% class M-4, the
1.40% class M-5, the 1.50% class M-6, the 1.35% class M-7, the
1.05% class M-8, the 1.05% class M-9, the 0.75% class M-10, the
1.00% 144A class M-11, and the 1.80% initial
overcollateralization.

All certificates have the benefit of monthly excess cash flow to
absorb losses.  In addition, the ratings reflect the integrity of
the transaction's legal structure as well as the capabilities of
IndyMac Bank, F.S.B. as Master Servicer.  Deutsche Bank National
Trust Company will act as Trustee.

On the closing date, the depositor will place approximately
$75,411,989 which will be held by the trustee in a pre-funding
account relating to mortgage loans in group I and approximately
$74,588,011 relating to the mortgage loans in group II.  The
amount on deposit in each account will be used to purchase
subsequent mortgage loans during the period from the closing date
up to and including July 17, 2005.

The certificates are supported by two groups of mortgage loans.
The Group 1 mortgage pool consists of first lien fixed-rate and
adjustable-rate mortgage loans with a statistical date pool
balance of $319,136,182. Approximately 20.98% of the Group 1
mortgage loans are fixed-rate and approximately 79.02% of the
Group 1 mortgage loans are adjustable-rate.

The weighted average loan rate is approximately 7.292%.  The
weighted average remaining term to maturity is 357 months.  The
average principal balance of the loans is approximately $164,418.
The weighted average original loan-to-value ratio is 77.33% and
the weighted average FICO score is 629.  The properties are
primarily located in New York (18.39%), California (10.75%), and
New Jersey (10.02%).

The Group 2 mortgage pool consists of first lien fixed-rate and
adjustable-rate mortgage loans with a statistical date pool
balance of $315,649,187.  Approximately 19.18% of the Group 2
mortgage loans are fixed-rate and approximately 80.82% of the
Group 2 mortgage loans are adjustable-rate.  The weighted average
loan rate is approximately 7.037%.  The weighted average remaining
term to maturity is 357 months.  The average principal balance of
the loans is approximately $274,956.  The weighted average OLTV is
77.15% and the weighted average FICO is 637.  The properties are
primarily located in California (22.76%), New York (20.02%) and
New Jersey (11.30%).

IndyMac ABS, Inc., the depositor, purchased the mortgage loans
from IndyMac Bank, F.S.B., the mortgage loan seller, and caused
the mortgage loans to be assigned to the trustee for the benefit
of holders of the certificates.  For federal income tax purposes,
an election will be made to treat the trust fund as multiple real
estate mortgage investment conduits.


INTEGRATED HEALTHCARE: Inks Forbearance Agreement with MedCap
-------------------------------------------------------------
Integrated Healthcare Holdings, Inc. (OTCBB:IHCH) entered into a
settlement of its dispute with its principal shareholder, Orange
County Physicians Investment Network, LLC.  The dispute, which was
previously disclosed by IHHI, relates to OC-PIN's obligation to
invest $30,000,000 in IHHI for 108,000,000 shares of common stock,
which has not been fully funded to date.

IHHI and OC-PIN entered into a First Amendment to their Stock
Purchase Agreement, dated January 28, 2005.  Under the First
Amendment:

   -- A total of 57,250,000 shares of IHHI common stock previously
      issued to OC-PIN will be placed in an escrow account and OC-
      PIN will have until September 1, 2005 to make aggregate
      payments of up to approximately $15,000,000 in monthly
      installments into the escrow account.  Such portion of the
      escrowed shares which are fully paid will be returned to OC-
      PIN and the balance will be transferred back to IHHI.  If
      there is a shortfall, IHHI will use its reasonable best
      efforts to sell equity to new investors to cover the
      shortfall;

   -- OC-PIN will reimburse IHHI for certain of its additional
      debt financing costs incurred since March 8, 2005;

   -- IHHI will work to complete a new borrowing transaction with
      Capital Source Finance LLC; and

   -- Upon receipt of at least $5,000,000 of new capital under the
      First Amendment, IHHI will call a shareholders meeting to
      re-elect directors. The agreement provides that the nominees
      for the Board will consist of two current directors, two
      members of OC-PIN (Ajay Meka, M.D. and Syed Naqvi, M.D.),
      two independent directors unaffiliated with IHHI or OC-PIN,
      and Anil V. Shah, M.D.

                       Forbearance Agreement

On or about May 9, 2005, IHHI's lender, Medical Provider Financial
Corporation II, issued a Notice of Default wherein MedCap will
forbear from taking further action against IHHI.  MedCap is the
lender to the Company under a $50 million acquisition loan, and a
working capital non-revolving line of credit of up to $30 million,
each of which has been issued pursuant to a Credit Agreement,
dated as of March 3, 2005, to which the Company and MedCap are
parties.

The notice of default asserts that:

     (i) the Company failed to provide satisfactory evidence that
         the Company has received capital contributions of not
         less than $15,000,000, as required by Section 2.1(s) of
         the Credit Agreement;

    (ii) the Company failed to prepay $5,000,000 by the
         Mandatory Prepay Date as required under Section
         1.2(b)(ii) of the Credit Agreement; and

   (iii) a Material Adverse Effect has occurred under the Credit
         Agreement for reasons relating primarily to OCPIN's
         failure to fully fund its obligations under its Stock
         Purchase Agreement with the Company dated Jan. 28,
         2005.

Under the Forbearance Agreement executed by IHHI and MedCap:

   -- MedCap agrees for 100 days from June 1, 2005 (as long as
      another default does not occur) to forbear from:

        (i) recording Notices of Default under its Credit
            Agreement with IHHI,

       (ii) filing a judicial foreclosure lawsuit against IHHI,
            OC-PIN and West Coast Holdings, LLC, and

      (iii) filing lawsuits against IHHI, OC-PIN and West Coast
            Holdings, LLC;

   -- so long as the Events of Default referenced in the
      Forbearance Agreement remain uncured and are continuing, the
      interest rate applicable to the outstanding loans with
      MedCap will remain at the Default Rate of interest, as
      defined in the Credit Agreement;

   -- IHHI's Line of Credit facility with MedCap is suspended with
      respect to additional advances; and

   -- During the forbearance period, OC-PIN and other investors
      will invest not less than approximately $15,000,000 in new
      equity capital in IHHI.

Larry Anderson, President of IHHI, stated, "We are very pleased to
have been able to resolve these disputes in a manner that protects
the equity position of IHHI."

The President of MedCap, Joseph J. Lampariello, stated, "I am very
pleased to see that the parties have been able to resolve this
dispute without need for any formal proceedings."

Integrated Healthcare Holdings, Inc., is a hospital management
company created to provide high-quality healthcare services
through the acquisition and management of financially distressed
or poorly performing healthcare facilities.  In March 2005 IHHI
acquired from Tenet Healthcare Corp. four facilities representing
approximately 12% of the hospital beds in Orange County,
California.  Management's focus is on reducing overhead, improving
relationships with insurance companies and HMOs, and enhancing
financial and operating procedures, notably reduction of bad debt
and collection of accounts receivable and government
reimbursements.


INTERSTATE BAKERIES: Consolidating Southern Calif. PC Operations
----------------------------------------------------------------
Interstate Bakeries Corporation (OTC: IBCIQ.PK) plans to
consolidate sales operations in its Southern California Profit
Center by standardizing distribution and consolidating delivery
routes.  The company's six bakeries within the Southern California
PC, located in Pomona, Glendale, Los Angeles and San Diego, will
continue to operate.

This is the fifth PC consolidation Interstate Bakeries has
announced since the Company began the second stage of its
organizational restructuring.  As previously disclosed, the
Company is undergoing a review of its ten Profit Centers,
identifying areas in which it can improve operating efficiencies
in production, distribution, marketing and sales.  The Company
expects to complete the Southern California consolidation by
Aug. 24, 2005, subject to bankruptcy court approval.  The
consolidation is expected to affect approximately 350 workers.

The Company's preliminary estimate of charges to be incurred in
connection with the Southern California PC consolidation is
approximately $2.5 million, including approximately $1.5 million
of severance charges and approximately $1.0 million in other
charges, with virtually all such charges resulting in future cash
expenditures.  In addition, the Company intends to spend
approximately $3.5 million in capital expenditures and accrued
expenses to effect the consolidation.

As previously disclosed, IBC currently contributes to more than 40
multiemployer pension plans as required under various collective
bargaining agreements, many of which are underfunded.  The portion
of a plan's underfunding allocable to an employer deemed to be
totally or partially withdrawing from the plan as the result of
downsizing, job transfers or otherwise is referred to as
"withdrawal liability."  Certain of the plans have filed proofs of
claim in IBC's bankruptcy case alleging that partial withdrawals
have already occurred.  IBC disputes these claims; however, there
is a risk that the consolidation announced yesterday could
significantly increase the amount of the liability to IBC should a
total or partial withdrawal from the multi-employer pension plans
covering the Southern California PC employees be found to have
occurred. IBC is conducting the Southern California PC
consolidation in a manner that it believes will not constitute a
total or partial withdrawal from the relevant multi-employer
pension plans.  Nevertheless, due to the complex nature of such a
determination, no assurance can be given that withdrawal claims
based upon IBC's prior action or resulting from this consolidation
or future consolidations will not result in significant
liabilities for IBC.  Should a total or partial withdrawal be
found to have occurred, the amount of any total or partial
withdrawal liability arising from the underfunded multi-employer
pension plans to which IBC contributes would likely be material
and could adversely affect our financial condition and, as a
general unsecured claim, any potential recovery to our
constituencies.

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.

Recently, the Company announced the closing of bakeries in Miami,
Florida, Charlotte, North Carolina and New Bedford, Massachusetts,
along with two bakeries in San Francisco, California, and the
consolidation of production, routes, depots and thrift stores in
its Florida, Mid-Atlantic, Northeast and Northern California PCs.


IPIX CORP: Raises $10 Million from Private Equity Placement
-----------------------------------------------------------
IPIX Corporation (Nasdaq: IPIX) successfully completed a private
placement of common stock, additional investment right and warrant
units to a group of existing and new institutional investors.
Olympus Securities, LLC, acted as placement agent in the
transaction.

Each unit was comprised of:

    * one share of common stock,

    * an additional investment right to purchase 0.06 of a share
      of common stock, and

    * a warrant to purchase 0.44 of a share of common stock.

The issue price for each unit was $2.41, the exercise price for
each additional investment right is $2.41 per share and the
exercise price for each warrant is $3.11 per share.  The warrants
may not be exercised until six months after issuance.  The
offering generated total gross proceeds of $10 million.  All
proceeds from the financing will be used to grow IPIX's sales and
marketing efforts.

"We have expended a great deal of intellectual capital to develop
what we believe to be premier immersive imaging technologies,"
says IPIX president and CEO Clara Conti.  "This funding allows us
to bolster our sales and marketing efforts in order to capture a
greater share of the surveillance and visual intelligence
markets."

IPIX Corporation -- http://www.ipix.com/-- is a premium provider
of immersive imaging products for government and commercial
applications.  The Company combine experience, patented technology
and strategic partnerships to deliver visual intelligence
solutions worldwide.  The Company's immersive, 360-degree imaging
technology has been used to create high-resolution digital still
photography and video products for surveillance, visual
documentation and forensic analysis.

                       Going Concern Doubt

In its Form 10-K for the year ended Dec. 31, 2004, filed with the
Securities and Exchange Commission, IPIX Corporation's auditors
included a going concern opinion in the Company's financial
statements.  During the year ended December 31, 2004, and in the
prior fiscal years, the Company has experienced, and continues to
experience, certain issues related to cash flow and profitability.
These factors raise substantial doubt about the Company's ability
to continue as a going concern.  The Company believes that it can
generate sufficient cash flow to fund its operations through the
launch and sale of new products in 2005 in the two continuing
business units of the Company.  In addition, management will
monitor the Company's cash position carefully and evaluate its
future operating cash requirements with respect to its strategy,
business objectives and performance.  Management will focus on
operating costs in relation to revenue generated.


ISTAR FINANCIAL: Fitch Affirms BB Rating on Preferred Stock
-----------------------------------------------------------
Fitch Ratings has revised iStar Financial Inc.'s Rating Outlook to
Positive from Stable.  Fitch also affirmed:

     -- Senior Unsecured Debt 'BBB-';
     -- Preferred Stock 'BB'.

iStar's rating strengths are centered on its high-quality
portfolio of triple-net credit tenant leases and first mortgages.
As of March 31, 2005, nearly 50% of the base rents in the CTL
portfolio were from investment grade tenants, while the overall
portfolio was 95.2% leased and had a remaining average lease term
of 11.5 years.  In addition, the weighted average loan-to-value of
the company's mortgage portfolio continues to decline and was at
66.0% as of March 31, 2005.  These characteristics substantially
mitigate many concerns related to high property appraisals in the
current commercial real estate market.

iStar's funding and liquidity profile have also shown a
significant improvement over the past 18 months.  The ratio of
secured capital to total capital improved to approximately 20% at
March 31, 2005 from 44% at Dec. 31, 2003.  In Fitch's view, the
continued migration to an unsecured borrowing profile provides
significant benefits from a financial flexibility standpoint.

This migration also improved the quality and diversity of iStar's
unencumbered asset pool which, in previous years, had significant
'lumpy' concentrations and did not reflect the quality of the
overall asset portfolio.  As of March 31, 2005, over 71% of the
company's total assets were unencumbered, compared to less than
33% at the end of 2003.

iStar's leverage has increased and risk-adjusted capitalization
has softened over the past 12 months.  This was expected as
management had signaled this over 24 months ago.  Leverage,
defined as debt divided by equity plus accumulated depreciation,
was 1.93 times (x) at March 31, 2005; it has historically been
below 1.75x.  When defined as debt divided by undepreciated book
capital, leverage increased to 65.9% as of March 31, 2005 from its
historical range of below 64.5%.  Although risk-adjusted
capitalization has also softened, it remains adequate for the
rating category as management has continued to focus on acquiring
high-quality assets.  Despite these changes, Fitch continues to be
comfortable with iStar's capitalization profile.

iStar's operating performance also remains solid as the company
has continued to selectively write economical business even in a
highly competitive commercial real estate market.  Fixed-charge
coverage (defined as EBITDA less capital expenditures, straight
line rents, and prepayment penalty and gain on sale income divided
by the sum of interest expense and preferred dividends) was 1.88x
for fiscal 2004 compared to 2.02x in 2003 and 1.83x in 2002.

Adjusted to exclude stock compensation and debt prepayment
expense, the company's return on average assets and return on
average equity metrics improved on a year-over-year basis in spite
of margin pressures in the commercial real estate market.

Fitch is comfortable with the company's recent acquisition of
Falcon Financial and minority investments in Oak Hill and
LNR/Blackacre, although they may dilute operating performance and
weaken risk-adjusted capitalization.  Fitch believes that these
strategic moves will help broaden the company's operating platform
and are consistent with iStar's long-held strategy of investing
capital in underserved markets.

Weaknesses continue to center on the company's asset
concentrations, as iStar's top 10 assets are equal to
approximately 70% of total shareholder's equity.  While many other
REITs and finance companies have similar concentrations, many of
iStar's assets tend to be single asset/single tenant or single
obligor assets.

While Fitch does view iStar's portfolio quality as strong,
investors should be aware that many of the company's assets are
highly structured and are not 'cookie cutter' loans that would
traditionally fit in the commercial mortgage backed securities
market.  These are assets that are typically written either on
properties or to borrowers/lessees to which other potential
financiers would not lend or lease.  Both the company's
significant structuring acumen and low refinancing risk mitigate
this concern.

Fitch also has concerns about the level of competition in the
commercial real estate market, which has resulted in iStar being
unable to economically (based on management's risk-adjusted return
expectations) invest in certain areas.  The net result has been a
broadening of the company's investment strategy to include
transactions such as the acquisition of Falcon Financial, which
will emphasize a very specific type of asset and borrower
(automobile dealerships) as well as more cash-flow and franchise-
value based loans, as opposed to more traditional mortgage
investments characterized by modest loan-to-value ratios.  Fitch
generally views iStar's capacity and willingness to move into less
aggressive markets favorably, but is cognizant of the risks
involved in these asset classes.

The Rating Outlook revision to Positive reflects that iStar has
made significant progress in improving its financial flexibility
and safely growing its asset base.  Over the next 12- to 24-month
period, Fitch will continue to evaluate the ramifications and
seasoning of iStar's maturing investment strategy.  Fitch also
expects, over this period, that the company will continue to
maintain solid interest coverage metrics (as previously defined)
in the 1.80x to 2.0x range, but that leverage may continue to
increase, as defined, toward 2.25x.

Headquartered in New York City, iStar provides structured
financing and corporate leasing of high-quality commercial real
estate nationwide.  iStar leverages its expertise in real estate,
capital markets, and corporate finance to serve corporations with
sophisticated financing requirements.  As of March 31, 2005, loans
and other lending investments totaled $4.3 billion and real estate
subject to credit tenant leases totaled $3.3 billion.


J.P. MORGAN: Fitch Places Low-B Ratings on Six Classes of Certs.
----------------------------------------------------------------
J.P. Morgan Chase Commercial Mortgage Securities Corp., series
2005-LDP2, commercial mortgage pass-through certificates are rated
by Fitch Ratings:

     -- $98,893,000 class A-1 'AAA';
     -- $554,697,000 class A-1A 'AAA';
     -- $257,128,000 class A-2 'AAA';
     -- $367,428,000 class A-3 'AAA';
     -- $122,717,000 class A-3A 'AAA';
     -- $561,321,000 class A-4 'AAA';
     -- $123,438,000 class A-SB 'AAA';
     -- $247,946,000 class A-M 'AAA';
     -- $50,000,000 class A-MFL 'AAA';
     -- $216,011,000 class A-J 'AAA';
     -- $2,979,460,402 class X-1* 'AAA';
     -- $2,909,929,000 class X-2* 'AAA';
     -- $18,621,000 class B 'AA+';
     -- $40,968,000 class C 'AA';
     -- $26,070,000 class D 'AA-';
     -- $26,070,000 class E 'A+';
     -- $29,795,000 class F 'A';
     -- $26,070,000 class G 'A-';
     -- $44,692,000 class H 'BBB+';
     -- $29,795,000 class J 'BBB';
     -- $37,243,000 class K 'BBB-';
     -- $11,173,000 class L 'BB+';
     -- $14,897,000 class M 'BB';
     -- $11,173,000 class N 'BB-';
     -- $7,449,000 class O 'B+';
     -- $7,449,000 class P 'B';
     -- $11,173,000 class Q 'B-';
     -- $37,243,402 class NR 'NR';

     * Notional Amount and Interest-Only.

Class NR is not rated by Fitch Ratings. Classes A-1, A-2, A-3, A-
3A, A-4, A-SB, A-M, A-MFL, A-J, X-2, B, C, D, E, and F are offered
publicly, while classes A-1A, X-1, G, H, J, K, L, M, N, O, P, Q,
and NR are privately placed pursuant to Rule 144A of the
Securities Act of 1933.  The certificates represent beneficial
ownership interest in the trust, primary assets of which are 295
fixed-rate loans having an aggregate principal balance of
approximately $2,979,460,402, as of the cutoff date.

For a detailed description of Fitch's rating analysis, please see
the report titled 'J.P. Morgan Chase Commercial Mortgage
Securities Corp., Series 2005-LDP2' dated May 27, 2005, available
on the Fitch Ratings web site at http://www.fitchratings.com/


JAKE'S GRANITE: Gallagher & Kennedy Approved as Bankruptcy Counsel
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona gave Jake's
Granite Supplies, L.L.C., permission to employ Gallagher &
Kennedy, P.A., as its general bankruptcy counsel.

Gallagher & Kennedy will:

   a) advise the Debtor with respect to its powers and duties as a
      debtor and debtor-in-possession in the continued management
      and operation of its business and property;

   b) attend meetings and negotiate with representatives of
      creditors and other parties in interest, and appear before
      the Bankruptcy Court, any appellate courts, and the U.S.
      Trustee, and protect the interests of the Debtor's estate
      before those courts and the U.S. Trustee;

   c) take all necessary actions to protect and preserve the
      Debtor's estate, including the prosecution of actions on its
      behalf, the defense of any actions commenced against the
      estate, negotiations concerning litigation in which the
      Debtor may be involved, and objections to claims filed
      against the estate;

   d) prepare on behalf of the Debtor all motions, applications,
      answers, orders, reports, and papers necessary to the
      administration of the estate;

   e) negotiate and prosecute on the Debtor's behalf any plan of
      reorganization, an accompanying disclosure statement and all
      related agreements or documents, and take any necessary
      action on behalf of the Debtor to obtain confirmation of
      that plan; and

   f) perform all other necessary legal services to the Debtor in
      connection with its chapter 11 case.

Daniel E. Garrison, Esq., a Member at Gallagher & Kennedy, is one
of the lead attorneys for the Debtor.  Mr. Garrison discloses that
the Firm received a $25,000 retainer.  Mr. Garrison charges $325
per hour for his services.

Mr. Garrison reports Gallagher & Kennedy's professionals bill:

      Designation      Hourly Rate
      -----------      -----------
      Counsel          $160 - $450
      Paralegals          $150

Gallagher & Kennedy assures the Court that it does not represent
any interest materially adverse to the Debtor or its estate.

Headquartered in Chandler Heights, Arizona, Jake's Granite
Supplies, L.L.C., owns and operates a sand and gravel mining
operation in Buckeye, Arizona.  The Company filed for chapter 11
protection on June 13, 2005 (Bankr. D. Ariz. Case No. 05-10601).
When the Debtor filed for protection from its creditors, it
estimated assets of $10 million to $50 million and debts of $1
million to $10 million.


JUNIPER NETWORKS: Improved Cash Flow Cues S&P to Lift Ratings
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Mountain View, California-based Juniper Networks Inc. to
'BB' from 'B+'.  The outlook is stable.

The action recognizes the company's broadening business base and
expanding scale, and recently improved operating profitability and
cash flows, which are expected to be sustained.

"The ratings on Juniper Networks reflect the company's continued
good market position in the networking equipment and information
security markets, and its moderate financial profile, tempered by
the challenges of rapid growth in a highly competitive, rapidly
evolving market, and the potential for continued industry
volatility" said Standard & Poor's credit analyst Bruce Hyman.

Juniper Networks Inc. supplies high-performance data networking
equipment and related network security products, used in carrier
and enterprise networks.  It had debt and capitalized operating
leases of $620 million at March 31, 2005.

The company's hardware focus is on the highest-performance
"backbone" router market, principally for service providers and
technology-intensive enterprises, where it competes primarily
against industry leader Cisco Systems Inc.  The market has been
expanding as service providers shift their networks toward
Internet protocol communications.  A 2004 acquisition positioned
the company in the communications security market, which now
generates about 20% of sales; demand has been expanding to counter
growing network abuses such as spam.


KIMBERLY OREGON: No Creditor Wants to Serve on a Committee
----------------------------------------------------------
Steven Jay Katzman, the U.S. Trustee for Region 17, tells the
Honorable Judge James W. Meyers of the U.S. Bankruptcy Court for
the Southern District of California that there isn't sufficient
interest among Kimberly Oregon Realty, Inc.'s unsecured creditors
to allow him to appoint an Official Committee of Unsecured
Creditors.

Headquartered in Rancho Santa Fe, California, Kimberly Oregon
Realty, Inc., filed for chapter 11 protection on Mar. 22, 2005
(Bankr. S.D. Calif. Case No. 05-02313).  When the Debtor filed for
protection from its creditors, it listed $17,649,818 in assets
and $5,313,160 in debts.


LAIDLAW INT'L: To Release 3rd Quarter Earnings on July 7
--------------------------------------------------------
Laidlaw International (NYSE:LI) will release financial results for
its fiscal third quarter, ending May 31, 2005, on Thursday,
July 7, 2005 after market close.

The company will hold a conference call hosted by senior
management to discuss the financial results on Friday, July 8,
2005 at 10:00 a.m. (Eastern).  A web cast of the conference call
will be accessible at Laidlaw International's Web site
http://www.laidlaw.com/

     To participate in the call, dial:

     800-370-0740 - (US and Canada)
     973-409-9259 - (International)

A replay will be available immediately after the conference call
through August 8, 2005.  To access the replay, dial 877-519-4471
(U.S and Canada) or 973-341-3080 (International); access code:
6161478.  Additionally, the web cast will be archived on the
Company's Web site.

Headquartered in Arlington, Texas, Laidlaw, Inc., now known as
Laidlaw International, Inc. -- http://www.laidlaw.com/-- is
North America's #1 bus operator.  Laidlaw's school buses transport
more than 2 million students daily, and its Transit and Tour
Services division provides daily city transportation through more
than 200 contracts in the US and Canada.  Laidlaw filed for
chapter 11 protection on June 28, 2001 (Bankr. W.D.N.Y. Case No.
01-14099).  Garry M. Graber, Esq., at Hodgson Russ LLP, represents
the Debtors.  Laidlaw International emerged from bankruptcy on
June 23, 2003.

                         *     *     *

As reported in the Troubled Company Reporter on Apr. 14, 2005,
Standard & Poor's Ratings Services affirmed its ratings on
Greyhound Lines Inc., including the 'CCC+' corporate credit
rating.  At the same time, the outlook is revised to positive from
developing.

"The outlook change reflects Greyhound's successful resolution of
the default judgment pending against it and the potential for a
higher rating if the company's restructuring actions are
successful in improving operating performance and credit
protection measures," said Standard & Poor's credit analyst Lisa
Jenkins.  Ratings are currently constrained by competitive market
conditions and the company's high debt leverage.  Greyhound is
owned by Laidlaw International Inc. (BB/Watch Pos/--).  Laidlaw
does not guarantee Greyhound's debt and its financial support of
Greyhound is currently limited to just $15 million.


LONGYEAR HOLDINGS: Moody's Rates $125MM 2nd Lien Term Loan at B3
----------------------------------------------------------------
Moody's Investors Service assigned a B1 corporate family rating
(previously called the senior implied) to Longyear Holdings, Inc.
The rating outlook is stable.  This is the first time Moody's has
rated the debt of the company, which is a global drilling services
contractor and equipment manufacturer operating under the trade
name Boart Longyear.  Advent International is purchasing Longyear
from Anglo American Plc for $581 million.

In connection with the financing for the acquisition, Moody's
assigned these ratings:

   * B1 for the $75 million senior secured revolving credit
     facility due 2010;

   * B1 for the $300 million senior secured first lien term loan
     due 2012;

   * B3 for the $125 million senior secured second lien term loan
     due 2013; and

   * B1 corporate family rating (senior implied).

In addition to Longyear, the other co-borrowers for the credit
facilities are a Canadian holding company, 073266 B.C. Limited and
a Dutch holding company, Cooperatief Longyear Holdings U.A.

Moody's ratings reflect Longyear's sales to the highly cyclical
mining industry, as well as the relatively cyclical construction
and industrial markets.  The company's sales and profits are
correlated to metal prices and mineral exploration expenditures,
especially gold exploration spending.  While metals fundamentals
are currently strong, prices could cool from recent levels if
Chinese demand slows and as the cycle ages.  In a commodity
recession, demand for Longyear's products and services can fall
appreciably, although Longyear has implemented a gold hedging
program intended to smooth some of the cyclicality inherent in the
company's markets.

Also, competition is vigorous in all of Longyear's business
segments and barriers to entry are relatively low.  Longyear has a
strong global market position but its international operations
subject it to foreign exchange risk, withholding taxes, and
foreign income taxes that may be higher on average than in the US.

In addition, Moody's notes that Longyear's debt is guaranteed by
certain foreign subsidiaries and secured by the assets of those
subsidiaries, and believes that creditors may have greater
difficulty in enforcing their rights in certain jurisdictions
relative to the US.  Finally, Moody's notes that the book value of
the tangible assets securing the credit facilities is slightly
less than pro forma debt ($417 million as of December 31, 2004 and
$427 million, respectively), so full creditor recoveries are not
ensured in the event of financial distress.

Nevertheless, Moody's believes that Longyear's relatively high
operating risk has been acceptably balanced by moderate initial
leverage and that the protections built into the credit
facilities, including mandatory prepayments from asset sales and
75% of excess cash flow, result in debt protection measures
appropriate for a B1 corporate family rating.  The company had
positive free cash flow (CFO less total capex) over the downcycle
years of 2002-2003 and should be able to steadily retire debt
under current business conditions.  While Longyear was acquisitive
under Anglo American and is expected to remain so, it also plans
to shed parts or all of three segments, representing 2004 sales of
$117 million and operating income of $9.8 million, as quickly as
possible and to reduce debt with the sale proceeds.  In-process
cost reductions and the ability to reduce capex by approximately
$10 million, if necessary, strengthen its cash flow capacity.  In
addition, Longyear's strong market position, track record for
quality, safety and service, and relationships with many of the
world's largest mining companies help sustain earnings over the
cycle.

Moody's stable outlook for Longyear is based on:

   * the favorable near-term outlook for its businesses;

   * its long-term relationships with major mining companies; and

   * the potential for cost savings and working capital reductions
     to bolster cash flow.

The ratings or outlook could be raised if Longyear reduces debt
below $325 million, all other things being equal.  It is difficult
to provide precise credit ratio targets that would be required to
earn an upgrade due to the cyclicality of the company's business.
The current ratings will tolerate reasonably-sized and priced
debt-financed acquisitions and a moderate decline in operating
income such as might result from a commodity recession.

Longyear's ratings or outlook could be lowered by:

   * a severe decline in its core businesses and cash flow;

   * the absence of debt reduction; and

   * shifts in the competitive landscape that risk permanent
     erosion of market share and margins.

Moody's rated the revolving credit facility and first lien term
loan B1, the same as the corporate family rating.  The first lien
debt represents the majority of the company's debt and underfunded
pensions (65% if the revolver is not drawn and 69% if it is fully
drawn).  The rating also reflects the numerous and globally
dispersed subsidiaries supporting the debt and the concerns noted
above regarding guarantees.  The relatively modest tangible asset
coverage of the first lien term loan and revolver also argue for
rating these facilities at the corporate family rating.  Due to
its junior status, the second lien term loan was notched down two
notches from the other ratings, to B3.  Material repayment of the
first lien debt could lead to an upward adjustment of both the
first lien and second lien debt relative to the corporate family
rating.

Longyear Holdings, Inc. is a global supplier of services and
manufacturer of systems and products to the:

   * natural resource,
   * environmental,
   * water,
   * energy,
   * construction and quarrying industries.

In 2004, its pro forma net sales were $768 million.


LUCID ENTERTAINMENT: Filing Financial Reports by July 29
--------------------------------------------------------
Lucid Entertainment Inc. says it will not be able to file its
audited financial statements by the June 30, 2005, deadline since
its management and external auditors are still completing their
audit.  The Company plans to file its financials by July 29, 2005.
Consequently, Lucid will not hold its annual general meeting by
June 30, 2005, and will reschedule this meeting as soon as
reasonably practicable following the filing of the Financial
Statements.

The Company is currently in default of its financial reporting
obligations with respect to its annual audited financial
statements for the year ended Dec. 31, 2004, and unaudited interim
financial statements for the period ended March 31, 2005.

As previously disclosed the Company's board of directors and its
management team are proceeding with their plan to restructure
Lucid's debt.  Negotiations are continuing with various creditors,
lenders and lessors to reduce Lucid's existing debt and
restructure Lucid's long and short-term obligations.

The board of directors of Lucid and its management team's efforts
to secure new financing as part of the restructuring of Lucid are
ongoing.

Lucid's subsidiary, Lucid Manchester Ltd., which has discontinued
its operations, entered bankruptcy proceedings in the United
Kingdom on June 15, 2005.

Lucid's clubs in Toronto, Ontario and Los Angeles, California
continue to operate.

Lucid Entertainment Inc. is a leading operator and developer of
branded entertainment and hospitality venues internationally.

                         *     *     *

As reported in the Troubled Company Reporter on Apr. 28, 2005,
Lucid Entertainment Inc. will delay the filing of its annual
audited financial statements for the year ended Dec. 31, 2004, and
its interim financial statements for the first quarter ended
March 31, 2005, past their due dates of April 30, 2005, and
May 30, 2005.

The delay arises as a result of Lucid's recent business and
operational challenges imposed by certain developments, which have
all been previously disclosed, including:

     (i) the resignation of Lucid's Chairman and Chief Executive
         Officer

    (ii) the ceasing of the operations of Lucid's subsidiary in
         Manchester, England due to a failure to transfer the
         liquor serving license required for its operations and
         its defaults with lenders, creditors and loan guarantors,

   (iii) the resignation of a director of Lucid due to conflicts
         arising from the financial difficulties of Lucid's
         subsidiary operating in Manchester, England,

    (iv) Lucid's and some of its other subsidiaries' default under
         other material contracts and

     (v) the resignation of Lucid's chief accountant.

As a result of these developments Lucid has been forced to manage
some significant changes to its business and operations which
among other things are limiting its ability to produce the
information necessary in order to complete its annual audited
financial statements and to fund the services of its accountants
in the UK.  This information is necessary for the preparation of
Lucid's audited annual financial statements.


MADISON RIVER: Fitch Withdraws B Rating on Sr. Unsecured Debt
-------------------------------------------------------------
Fitch Ratings has affirmed and withdrawn the 'B' rating assigned
to the senior unsecured debt of Madison River Capital, LLC. In
addition, Fitch has removed the rating from Rating Watch Positive,
where it was placed on Jan. 5, 2005.

The Rating Watch Positive designation was due to an expected, but
currently uncompleted, capital restructuring, which, if and when
completed, will result in the retirement of the rated security
well in advance of its maturity date in March 2010.  The potential
accelerated debt retirement is a future positive event of unknown
timing; as Fitch is withdrawing the rating, the Rating Watch
designation signaling a future rating action is no longer
applicable.  The rating actions affect approximately $198 million
of publicly outstanding senior unsecured debt.

The withdrawal of the rating reflects Fitch's expectation that it
will no longer receive cooperation from management and, therefore,
will no longer have the information necessary to rate the company,
such as the prospective capital structure of the recapitalized
company, nor its prospective operating and financial policies.

As of March 31, 2005, the ratio of total debt to the last 12
months EBITDA was approximately 6.2 times (x).  Leverage was
moderately lower, at 5.8x, when the subordinated capital
certificates issued by the Rural Telephone Finance Cooperative are
netted against debt.  MRC is required to purchase SCCs from the
RTFC in the amount of 10% of funds borrowed from the RTFC and the
SCCs are redeemed when MRC makes principal payments on its
borrowings.  The SCCs are a legal obligation of the RTFC.


MAGELLAN MIDSTREAM: S&P Rates $275 Million Term Loan at BB-
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BBB' corporate
credit rating on Magellan Midstream Partners L.P.

Standard & Poor's also assigned its 'BB-' rating and '4' recovery
rating to Magellan Midstream Holdings L.P.'s $275 million term
loan due 2012, indicating the expectation of marginal recovery of
principal (25% to 50%) in the event of a payment default.

Proceeds from the new offering will be used to repay the existing
$96 million debt balance, fund a defeasance account, and
distribute about $152 million to the sponsors.

"The ratings on Magellan reflect assets that generate relatively
stable, consistent free cash flow, modest organic growth
opportunities, and volume-based fees and tariffs, which insulate
the company from commodity price risk," said Standard & Poor's
credit analyst Aneesh Prabhu.

"These positives are offset by expectations of continued
acquisitions," said Mr. Prabhu.

The ratings on Magellan also reflect the company's status as a
master limited partnership and the requirement that the
partnership distribute most of its cash flow.

Magellan is a MLP engaged in the transportation, storage, and
distribution of refined petroleum products and ammonia.


MANUFACTURING TECH: Hires Juan Morales Alicea as Accountant
-----------------------------------------------------------
Manufacturing Technology Services Inc. sought and obtained
permission from the U.S. Bankruptcy Court for the District of
Puerto Rico to employ Juan Morales Alicea, CPA, as its accountant.

Mr. Alicea will provide accounting, bookkeeping and other
accounting services.

Mr. Alicea discloses that he received a $10,000 retainer.  The
professionals who will work on the Debtor's case will bill:

      Professional                     Hourly Rate
      ------------                     -----------
      Juan Morales Alicea                  $125
      Ana Morales                          $100

The Debtor believes that Juan Morales Alicea, CPA, is
disinterested as that term is defined in Section 101(14) of the
U.S. Bankruptcy Court.

Headquartered in Caguas, Puerto Rico, Manufacturing Technology
Services Inc. -- http://www.mtspr.com/-- manufactures biometric
devices, digital and electronic meters, and special-purpose
computers and laptops.  The Company filed for chapter 11
protection on April 18, 2005 (Bankr. D. P.R. Case No. 05-03663).
Jose Raul Cancio Bigas, Esq., of Hato Rey, Puerto Rico, represents
the Debtor in its restructuring efforts.  When the Debtor filed
for protection from its creditors, it estimated assets between
$1 million to $10 million and debts between $10 million to
$50 million.


MARINER HEALTH: Carematrix Asks Court to Okay Mariner Settlement
----------------------------------------------------------------
Between 1996 and 1998, Mariner Post-Acute Network, Inc., Mariner
Health Group, Inc., Mariner Health Resources, Inc., and Prism
Rehab Systems, Inc., entered into a series of contracts for
therapy services, pharmaceutical and medical supplies,
pharmaceutical consultant services, medical equipment and
management services with CareMatrix Corporation and its
affiliates, CareMatrix, Inc., CareMatrix of Dedham, Inc.,
CareMatrix of Needham, Inc., CareMatrix of Palm Beach Gardens
(SNF), Inc., CareMatrix of Princeton (SNF), Inc., and CCC of
Maryland, Inc.

Christopher M. Winder, Esq., at Duane Morris LLP, in Wilmington,
Delaware, relates that under the Contracts, Mariner provided
services at various CareMatrix-affiliated nursing homes and
skilled nursing facilities.

In December 1998, these entities entered into separate termination
agreements:

   * MHR, MHG, Prism and Compass with CareMatrix Corporation,
     CareMatrix Dedham, CareMatrix Needham, CareMatrix
     Princeton, CCC of Maryland, PBG Medical Mall SNF, Ltd., and
     CCC of New Jersey, Inc.; and

   * MHR and its affiliates with CareMatrix Corporation,
     CareMatrix of Massachusetts, Inc., CareMatrix - Palm Beach
     Gardens, CCC New Jersey, CareMatrix Dedham, CareMatrix
     Needham, CareMatrix Princeton and CCC of Maryland.

Pursuant to the Termination Agreements, the Contracts were
terminated and CareMatrix agreed to:

   -- make certain settlement payments;

   -- refund a $500,000 deposit to Mariner; and

   -- make certain final payments under the Contracts based on
      outstanding invoices for services delivered.

Subsequently, Mariner alleged that CareMatrix did not make all
payments as required under the Termination Agreements.  CareMatrix
asserted that it refused to make outstanding payments on the
grounds that:

   -- Mariner was not owed payments for services rendered under
      the Contracts until CareMatrix received reimbursement from
      Medicare and other third-party payors; and

   -- Mariner had caused certain losses to CareMatrix that offset
      any money CareMatrix may have owed to Mariner.

As a result of the parties' dispute, Mariner filed an action in
the Superior Court of Suffolk County, Massachusetts, against
CareMatrix, seeking payment of more than $3,000,000 allegedly due
and owing to the Termination Agreements.  CareMatrix also filed
counterclaims against Mariner in the same action, seeking more
than $3,000,000 in damages allegedly caused by the Debtors.

                     The Bankruptcy Petitions

In January 2000, Mariner and certain of its affiliates filed for
bankruptcy.  In November 2000, CareMatrix and certain of its
affiliates filed for voluntary Chapter 11 petition in the United
States Bankruptcy Court for the District of Delaware.  The
CareMatrix case is pending before Judge Randolph Baxter.

The proceedings in the Massachusetts Action were stayed pursuant
to the commencement of the Mariner and CareMatrix bankruptcies.

Thereafter, the Mariner Debtors filed proofs of claim in
CareMatrix's bankruptcy cases that incorporated Mariner's claims
in the Massachusetts Action as well as other claims.  The
CareMatrix Debtors also filed proofs of claim in the Mariner
bankruptcy case that incorporated CareMatrix's counterclaims and
third-party claims in the Massachusetts Action.

The Mariner Debtors' claims included:

   -- claims for payment of obligations incurred by the Mariner
      Debtors pursuant to claims filed by Sun Healthcare in the
      Mariner bankruptcy cases.  The Mariner Debtors alleged that
      the Sun Claims were based on unpaid invoices for services
      for which the CareMatrix Debtors contracted, which were
      rendered at the CareMatrix facilities, and for which the
      CareMatrix Debtors were responsible; and

   -- certain claims for reimbursement from the CareMatrix
      Debtors for payments made by the Mariner Debtors, on the
      CareMatrix Debtors' behalf, for utility services at certain
      CareMatrix facilities, for the CareMatrix Debtors were
      responsible.

Furthermore, the Mariner Debtors and the CareMatrix Debtors are
parties in the suit captioned Prism Rehab Systems, Inc., v.
Enterprise Care Facilities, Inc., pending before the Circuit
Court, 7th Judicial Circuit, in and for Volusia County, Florida.
The CareMatrix Debtors asserted that they have potential indemnity
and other claims against the Mariner Debtors for any judgment
entered against or settlement made by the CareMatrix Debtors in
the Florida Action.  The Mariner Debtors disputed the CareMatrix
Debtors' assertion.

To resolve their disputes and to avoid further litigation, the
parties agree that:

   (a) The CareMatrix Debtors will withdraw their proofs of
       claim, with prejudice;

   (b) The Mariner Debtors will be allowed a net claim of
       $1.4 million for their Claim Nos. 711 through 721.  Of the
       total amount, $500,000 will be allocated to MHR and
       $900,000 will be allocated to Prism;

   (c) Upon the Mariner Debtors' receipt of the settlement amount
       from the CareMatrix Debtors, the parties will execute and
       deliver general releases.  Both parties will file in the
       Massachusetts Superior Court an assented-to motion to
       dismiss with prejudice all claims and counterclaims
       between the Mariner Debtors and the CareMatrix Debtors in
       the Massachusetts Action; and

   (d) CCC of New Jersey, Inc., a third party plaintiff in the
       Massachusetts Action, is no longer a CareMatrix-affiliated
       entity and is not a party to the Settlement Agreement.
       The Mariner Debtors retain the right to assert claims of
       any kind against CCC of New Jersey and any other entities
       not specifically released by the settlement agreement.

The CareMatrix Debtors ask Judge Baxter to approve the Settlement
Agreement with the Mariner Debtors.

Mariner Post-Acute Network, Inc., Mariner Health Group, Inc., and
scores of debtor-affiliates filed for chapter 11 protection on
January 18, 2000 (Bankr. D. Del. Case Nos. 00-113 through 00-301).
Mark D. Collins, Esq., at Richards, Layton & Finger, P.A.,
represents the Reorganized Debtors, which emerged from bankruptcy
under the terms of their Second Amended Joint Plan of
Reorganization declared effective on May 13, 2002.  (Mariner
Bankruptcy News, Issue No. 69; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


MERISANT WORLDWIDE: Profit Decline Cues S&P to Lower Ratings
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on tabletop
sweetener manufacturer Merisant Worldwide Inc. and its wholly
owned operating subsidiary Merisant Co., including its corporate
credit ratings to 'B-' from 'B'.

At the same time, the ratings on the Chicago, Illinois-based
company were removed from CreditWatch, where they were initially
placed on May 10, 2004, with negative implications.  The outlook
is negative.  Total debt outstanding on a consolidated basis was
about $546.9 million as of March 31, 2005.

The CreditWatch listing followed weaker-than-expected operating
performance for fiscal 2004, and deficiencies cited in the
company's internal controls over financial reporting (the company
has since taken corrective action to improve internal controls to
address these deficiencies).

The downgrade reflects:

    -- Continued decline in profitability driven by weakness in
       the top-line, most notably in the U.S. and Caribbean
       markets.  For the quarter ended March 31, 2005, total net
       sales declined to $75.9 million from $77.8 million in the
       same quarter of 2004.  The decrease would have been about
       $2 million greater if not for favorable foreign exchange
       gains.  The decline in revenue was primarily attributed to
       lower volumes in the grocery segment and flat food service
       sales.  Furthermore, competitive pressures have limited
       opportunities to push through price increases in all
       channels.  Johnson & Johnson's 'Splenda' brand continues to
       present challenges to Merisant's key business segments.

    -- Less favorable product mix, primarily due to softness in
       the higher-margin grocery segment and the introduction of a
       lower-margin product offering in the club channel in order
       to recoup volume and become more price competitive.

    -- Significant management turnover at the executive level.
       Former CFO Don Hotz resigned in May 2005.  Paul Block
       joined Merisant in September 2004 and was named CEO towards
       the end of 2004, following the resignation of former
       CEO Etienne Veber.

    -- For the quarter ended March 31, 2005, free cash flow was
       negative, primarily resulting from an unfavorable working
       capital environment due to inventory buildup.  Aspartame
       was purchased for the entire year in the U.S. under a
       contractual agreement with NutraSweet.

    -- Credit measures weakened due to challenging competitive
       conditions.


MIRANT: Pacific Gas Plans to Acquire Mirant Delta's Contra Costa
----------------------------------------------------------------
Pacific Gas and Electric Company filed a proposal with the
California Public Utilities Commission to take ownership of Mirant
Delta's partially constructed Contra Costa Unit 8 electric
generation facility.  This proposal implements one element of a
larger settlement agreement with Mirant announced in January,
resolving alleged market manipulation claims related to the energy
crisis and separate rate disputes resulting from the sale of
electricity by Mirant's California operations.

"The acquisition of Contra Costa Unit 8 provides a state-of-the-
art generation facility that will provide low-cost, low emissions
power to our customers and address local reliability issues," said
Greg Rueger, Pacific Gas and Electric Company's senior vice
president for generation.  "If we receive the necessary approvals
to complete the power plant, the new unit will add 530 megawatts
of very low cost power, enough electricity for nearly 400,000
customers."

PG&E plans to complete construction of the facility and have the
output available to serve electric customers in 2008. Since the
unit is already partially built, the company expects to invest
only $310 million to complete the project.  This investment will
allow Contra Costa Unit 8 to supply power to northern and central
California at significantly lower cost than if the company built a
new facility from the ground up.

Mirant has agreed to transfer to PG&E the equipment, permits and
contracts for the construction of Contra Costa Unit 8, which
Mirant started to build but never completed due to the downturn in
the wholesale power market.  Contra Costa Unit 8 is located near
Antioch, adjacent to Mirant's existing facilities. PG&E's
application with the CPUC seeks authorization to complete and
operate Contra Costa Unit 8 under a cost-of-service regulatory
structure.

PG&E's settlement agreement with Mirant was approved by the Public
Utilities Commission in January and by the Federal Energy
Regulatory Commission in April.  Under the terms of the
settlement, if PG&E does not receive the approvals necessary to
complete the plant, including CPUC authorization, Mirant will pay
PG&E $70 million in lieu of transferring the assets.

Headquartered in San Francisco, California, Pacific Gas and
Electric Company -- http://www.pge.com/-- a wholly owned
subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest
combination natural gas and electric utilities in the United
States.  The Company filed for Chapter 11 protection on
April 6, 2001 (Bankr. N.D. Calif. Case No. 01-30923).  James L.
Lopes, Esq., William J. Lafferty, Esq., and Jeffrey L. Schaffer,
Esq., at Howard, Rice, Nemerovski, Canady, Falk & Rabkin represent
the Debtors in their restructuring efforts.  On June 30, 2001, the
Company listed $23,216,000,000 in assets and $22,152,000,000 in
debts.  Pacific Gas and Electric emerged from chapter 11
protection on April 12, 2004, paying all creditors 100 cents-on-
the-dollar plus post-petition interest.

Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- is a competitive energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines.  Mirant owns or leases more than 18,000
megawatts of electric generating capacity globally.  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 CORP: Will Seek to Expand A&M Tax Advisory's Engagement
--------------------------------------------------------------
As part of their reorganization effort, Mirant Corporation and its
debtor-affiliates asked Alvarez and Marsal Tax Advisory Services,
LLC, to expand the scope of their duties to include additional
tax-related projects.

Ian T. Peck, Esq., at Haynes and Boone, LLP, in Dallas, Texas,
relates that Alvarez and Marsal Tax Advisory Services will assist
the Debtors in filing amended state tax returns and integrating
the filings with Internal Revenue Services examination reporting
requirements.  In addition, Alvarez and Marsal Tax Advisory
Services will advise the Debtors concerning state income and
franchise tax implications of the Debtors' restructuring.  The
additional duties will likely require Alvarez and Marsal Tax
Advisory Services to devote time each month in excess of the
$50,000 monthly cap for ordinary course professionals.

The Debtors will seek the Court's authority to modify Alvarez's
retention from ordinary course professional status to
professionals employed under Section 327(e) of the Bankruptcy
Code.

The Debtors also ask the Court that Alvarez begin work on the
projects immediately.

Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- is a competitive energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines.  Mirant owns or leases more than 18,000
megawatts of electric generating capacity globally.  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. 67; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


MIRANT CORP: Court Tells Troutman Sanders to Produce Documents
--------------------------------------------------------------
As reported in the Troubled Company Reporter on June 2, 2005,
Mirant Corporation and its debtor-affiliates asked the U.S.
Bankruptcy Court for the Northern District of Texas to compel
Troutman Sanders LLP to produce some documents regarding Southern
Company's spin-off of Mirant Corporation in 2000.

The Board of Directors of Mirant formed a special committee, in
spring 2004, to investigate potential claims and causes of action
that may be asserted against Southern or other parties arising
from Mirant's IPO and all other transactions and transfers leading
up to the Spin-Off.  White & Case LLP was engaged to conduct the
investigation.

Before the Debtors filed for bankruptcy, Troutman Sanders LLP was
their primary outside counsel.  Troutman represented Southern and
continues to represent Southern as its lead outside counsel.
Troutman also acted as "legal counsel" for Project Olympus,
simultaneously representing both Mirant and Southern.

                      Court Requests Briefs

At a hearing on May 26, 2005, the Court asked the parties to
submit briefs on the legal issue of whether Southern Company is
entitled to assert its attorney-client privilege to prevent
discovery of certain requested documents of its outside counsel,
Troutman Sanders L.L.P.

As reported in the Troubled Company Reporter on June 15, 2005,
Judge Lynn of the U.S. Bankruptcy Court for the Northern District
of Texas granted the Debtors' request to the extent that
Troutman Sanders will turnover of all the Debtors' client-matter
files or those that may be later designated in writing by the
parties.  The files will be turned over only after Troutman had
reviewed the same to remove its own property or the property of
others.  The Debtors will review the files at Troutman Sanders'
offices where they are kept in the ordinary course of business.
The Debtors will pay copying costs except for original documents
that were provided to Troutman Sanders, which originals will be
copied at the expense of Troutman Sanders.

       Court Rules on Troutman's Attorney-Client Privilege

Judge Lynn addresses the issue of whether certain discovery
sought by the Debtors with respect to Troutman Sanders LLP is
barred by attorney-client privilege.

In a 15-page Memorandum Opinion, Judge Lynn notes that in a case
of a joint representation of two clients by an attorney, one
client may not invoke the privilege against the other client in
litigation between them arising from the matter in which they
were jointly represented.

Judge Lynn cites Brennan's, Inc. v. Brennan's Rests., Inc., 590
F.2d 168, 172 (5th Cir. 1979).  Using the Brennan's case, Judge
Lynn opines that the law of Georgia would apply to define the
relationship between the Debtors and Troutman and between
Troutman and The Southern Company.  Judge Lynn relates that the
lawyers were licensed in and rendered their services and advice
largely in Georgia.  "Thus, if [Southern Company] is entitled to
invoke with Troutman the attorney-client privilege as to Debtors'
discovery, it must do so under Georgia law."

Troutman has argued that Mirant, as a subsidiary, and its
officers and directors must act for the sole benefit of the
parent.  Troutman has asserted that any and all duties were owed
to Southern Company alone by Mirant and its officers and
directors until the sale of 20% of Mirant Corp. stock because
"there can be no lawful or permissible adverse interest between a
wholly-owned subsidiary and its parent."  On this proposition,
Troutman cited:

    * Anadarko Petroleum Corp. v. Panhandle E. Corp., 545 A.2d
      1171 (Del. 1988); and

    * Glidden Co. v. Jandernoa, 173 F.R.D. 459 (W.D. Mich. 1997).

Judge Lynn explains that the very types of action against the
Southern Company that are contemplated are in the nature of
fraudulent transfers, fraud and alter ego.  "The first and, for
some purposes, the others, presuppose or implicate the insolvency
of [the] Debtors at the time of [and before] the spin-off.  If
[the] Debtors were insolvent, the duty of directors to the
shareholder was superceded by a duty to creditors."

The issue before the Court in Anadarko was whether the contracts
by which the subsidiary was separated from its parents were to be
tested on the basis that the parent's directors owed a fiduciary
duty to the subsidiary's prospective shareholders, Judge Lynn
relates.  "Had [that] duty existed, the contracts would have to
have been 'entirely fair' to the subsidiary for the parent to
escape liability [--] a virtually impossible standard according
to the court."

According to Judge Lynn, the Glidden case does not support
Troutman.  Glidden involved a management buyout of a subsidiary,
which the parent thereafter attacked.  The parent sought
discovery from counsel who had represented management in the
buyout and was general counsel to the subsidiary.  "Glidden does
not stand for the proposition that a subsidiary jointly
represented with a parent may be denied access to confidences
between the parent and counsel," Judge Lynn says.

On the issue of Protocol, Judge Lynn notes that he did not find
any specific ratification of the Protocol in the engagement
letter.  Mirant's in-house general counsel had ties to the
Southern Company and Troutman and an interest in maintaining the
validity of the transactions involved in the divestiture, Judge
Lynn says.  The Court adds that it will not speculate on the
motives that may have led to the engagement letter.  "[I]n any
case, the Protocol does not provide either Mirant or [Southern
Company] with any privilege beyond that which exists in an
ordinary joint representation; to extend special protection to
[Southern Company] by reason of either the Protocol or the
engagement letter would be contrary to the public policy
considerations."

The Court finds that Troutman's participation in the transactions
constituted joint representation of Southern Company and Mirant
and nothing contained in the Protocol dictates a contrary
finding.

Given the short time between divestiture and commencement of the
Chapter 11 cases and given the pre-divestiture history of the
Debtors' problems, Judge Lynn says, it is essential to the
integrity of the Chapter 11 process that "no stone be left
unturned in ensuring satisfactory completion of [the] Debtors'
investigation."

For these reasons, Judge Lynn rules that:

    (1) the Bankruptcy Court's Order dated June 6, 2005, which
        sustained Troutman's Objection is vacated;

    (2) subject to the argument that a subpoena must be issued to
        Troutman, the Debtors' Request is granted as to:

        (a) production of all documents; and

        (b) oral examination of Troutman pursuant to Rule 2004 of
            the Federal Rules of Bankruptcy Procedure.

Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- is a competitive energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines.  Mirant owns or leases more than 18,000
megawatts of electric generating capacity globally.  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. 67; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


MOSAIC COMPANY: Fitch Holds BB+ Rating on Sr. Secured Debt
----------------------------------------------------------
Fitch Ratings has affirmed the credit ratings of The Mosaic
Company, Mosaic Global Holdings, and Phosphate Acquisition
Partnership LP.  The Rating Outlook is Stable.

The ratings are:

     -- Mosaic senior secured revolving credit facility 'BB+';

     -- Mosaic Global Holdings Inc. senior secured term loans A
        and B 'BB+';

     -- Mosaic Global Holdings senior unsecured debt with
        subsidiary guarantees 'BB';

     -- Mosaic Global Holdings senior unsecured debt without
        subsidiary guarantees 'BB-';

     -- Phosphate Acquisition Partnership LP senior secured notes
        'BB-';

     -- Mosaic mandatory convertible preferred securities 'B'.

The ratings reflect Mosaic's high debt level; significant market
positions in the global potash and phosphate markets; and current
financial performance.  Mosaic's debt level stood at nearly $2.6
billion at the end of February 2005.  The company has
opportunities to reduce debt by calling notes and paying debt as
it comes due over the next four years.  However, Mosaic's ability
to call debt early will depend in part on the degree of earnings
improvement and resulting cash flow generation.

Fitch expects the majority of earnings improvement to come from
effective cost reduction efforts, particularly in the phosphates
segment.  Fitch believes Mosaic's consent agreement with the
Florida Department of Environmental Protection and the credit
facility's 2008 refinancing condition provide ample incentive for
the company's cost reduction and debt reduction efforts.

Mosaic's strong market position in potash fertilizer is a credit
positive due to the consistent, high operating margin and current
tight market conditions.  Additionally, Fitch recognizes Mosaic's
leadership position in the phosphate fertilizer market.  However,
the benefit of this strong market position is offset by the weak
profitability of this business.  Fitch believes Mosaic has an
opportunity to substantially improve the profitability of its
phosphates business, but this effort will take time and
significant resources.

For the trailing 12-month period ended Feb. 28, 2005, Mosaic's
total debt-to-EBITDA was 7.5 times (x) and its EBITDA-to-interest
incurred was 4.1x. Note that the TTM EBITDA does not contain a
full year's earnings from the IMC Global Inc. assets.  Fitch
expects that total debt-to-EBITDA would trend downward toward 5.0x
as full year's earnings from IMC's assets are incorporated.  Fitch
estimates that Mosaic could generate $550 million of EBITDA once
earnings from IMC assets are fully included.

The Stable Rating Outlook indicates that Mosaic's ratings will
likely remain at the current levels in the next 12 months.  Fitch
anticipates that the company's cost reduction efforts will take
some time to achieve before meaningful profitability improvement
is evident and consistent.  Meanwhile, Mosaic should continue to
benefit from the strong potash market in the near term.

The Mosaic Company is one of the largest global suppliers of
phosphate and potash fertilizers.  Mosaic earned approximately
$350.0 million in EBITDA on $3.6 billion in revenue TTM Feb. 28,
2005; the company had $2.6 billion in debt at that time.


NETWORK INSTALLATION: Founder & Former CEO Retires 6-Mil Shares
---------------------------------------------------------------
Network Installation Corp. (OTC Bulletin Board: NWKI) disclosed
that its founder and former CEO Michael Cummings has returned 6
million shares of the Company's common stock, which will be
retired into treasury pursuant to his severance agreement.  As a
result of the retirement, the current total shares outstanding
shall be reduced to approximately 16 million.

"This action plain and simple is a significant event," Network
Installation CEO Jeffrey R. Hultman said.  "We are currently
pursuing acquisitions on a number of fronts and are seeking to
minimize any dilution from these transactions while increasing
their accretive value.  We believe that the steps we are taking
will add measurably to our growth and presumably to our
shareholder value."

Network Installation Corp. -- http://www.networkinstallationcorp.net/
-- provides communications solutions to the Fortune 1000,
Government Agencies, Municipalities, K-12 and Universities and
Multiple Property Owners.  These solutions include the design,
installation and deployment of data, voice and video networks as
well as wireless networks including Wi-Fi and Wi-Max applications
and integrated telecommunications solutions including Voice over
Internet Protocol applications.

At March 31, 2005, Network Installation's balance sheet showed a
$2,027,436 stockholders' deficit, compared to a $1,877,631 deficit
at Dec. 31, 2004.


NORCROSS SAFETY: S&P Holds B+ Credit Rating and Removes Watch
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating and all other ratings on safety equipment provider
Norcross Safety Products LLC and its parent NSP Holdings LLC and
removed them from CreditWatch where they were placed with negative
implications on May 24, 2005.  The outlook is negative.

"We have reviewed the plans for the buyout of the company, valued
at $495 million, by Odyssey Investment Partners LLC and have
concluded that there is no significant increase in debt leverage
as a result of the purchase," said Standard & Poor's credit
analyst John Sico.  "The mix of debt and equity after the
transaction is completed has little impact on balance-sheet
leverage."

It is expected that the existing public debt holders of the
holding company and operating company debt will consent to a
waiver of change-of-control provisions in each indenture that will
permit the new ownership and maintain the existing public debt
outstanding.

Closely held Oak Brook, Illinois-based Norcross is a leading
provider of personal protection equipment and is expected to have
about $370 million in consolidated debt outstanding when the
transaction is expected to close in the third quarter of 2005.

"The ratings incorporate a gradual improvement in credit measures
over the next 18 months; otherwise the ratings will be lowered,"
Mr. Sico said. "Rating upside potential is not envisioned in the
next few years."


NRG ENERGY: Swaps New 8% Sr. Secured Notes for Old Notes
--------------------------------------------------------
NRG Energy, Inc. (NYSE:NRG) commenced a registered exchange offer
to exchange up to $1.35 billion aggregate principal amount of its
8% second priority senior secured notes due 2013, which have been
registered under the Securities Act of 1933, as amended, for all
outstanding 8% second priority senior secured notes due 2013 that
were issued and sold by NRG in December 2003 and January 2004 in
private placement offerings.  The sole purpose of this exchange
offer is to fulfill NRG's obligations with respect to the
registration of the notes issued in the private placements.

The exchange offer is contemplated in a registration rights
agreement entered into by NRG in connection with the private
placements under which NRG agreed to register substantially
identical notes, and offer to exchange these registered notes for
the existing notes issued in the private placements.  The
registration statement on Form S-4 pursuant to which the notes
were registered was declared effective by the Securities and
Exchange Commission on June 16, 2005.  As a result, NRG will cease
to accrue liquidated damages under the registration rights
agreement.

The new notes will have substantially the same form and terms as
the outstanding old notes, except that the new notes are
registered under the U.S. Securities Act of 1933, as amended, will
not be subject to transfer restriction and will bear a different
CUSIP number from the old notes.  Any old notes not exchanged will
continue to have restrictions on transfer.  Terms of the exchange
offer are contained in the exchange offer prospectus and letter of
transmittal.

The exchange offer will expire on July 15, 2005, at 5:00 p.m., New
York City time, unless the exchange offer is extended by NRG.

Copies of the exchange offer prospectus and the letter of
transmittal may be obtained from the Exchange Agent, Law Debenture
Trust Company of New York, at 212-750-0888.

This announcement is not an offer to sell any securities or a
solicitation of any offer to buy any securities.  The exchange
offer will be made only by means of a written prospectus.

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.

                         *     *     *

Moody's Investor Services and Standard & Poor's assigned single-B
ratings to NRG Energy's 8% secured notes due 2013.


ORBIMAGE HOLDINGS: Moody's Junks Proposed $240M Floating Rate Note
------------------------------------------------------------------
Moody's Investors Service assigned a Caa2 rating to ORBIMAGE
Holdings Inc.'s proposed $240 million (net proceeds) senior
secured floating rate note issuance.  The company will use the
note issuance proceeds largely to finance the completion of its
ORBVIEW-5 imaging satellite, with the remainder to be used to
retire existing debt and for general corporate purposes.

The ratings broadly reflect:

   * ORBIMAGE's anticipated negative free cash flow going forward
     owing to the company's investment in the ORBVIEW-5 satellite;

   * a relatively short post-Chapter 11 bankruptcy history;

   * reliance on cancelable U.S. government contracts; and

   * the risk associated with the launching and implementation
     of ORBVIEW-5.

Moody's assigned these ratings to ORBIMAGE (ORBIMAGE Holdings Inc.
as the issuer):

   * Corporate family rating (formerly called the senior implied
     rating) -- Caa2

   * Speculative grade liquidity rating -- SGL-3

   * $240 million senior secured floating rate notes due
     2012 -- Caa2

The outlook on all ratings is stable.

The Caa2 corporate family rating reflects:

   * negative projected free cash flow owing to the company's
     ongoing investment in the ORBVIEW-5 satellite;

   * a relatively short post-Chapter 11 bankruptcy history;

   * reliance on cancelable U.S. government contracts (49% of
     revenues), some components of which cannot be confirmed (i.e.
     milestones, due to confidentiality); and

   * the risk associated with the launching and implementation of
     OrbView-5 (scheduled for launch in early 2007) -- including
     delays and unforeseen cost overruns.

The ratings also reflect the company's near term high leverage and
inadequate interest coverage (over 6.0x and under 1.0x,
respectively, on a pro forma basis).  Moody's recognizes that
under the NextView contract with the National Geospatial-
Intelligence Agency, the NGA will support the ORBVIEW-5 project
with a $237 million grant -- subject to various milestones.
However, given their sensitive nature (i.e. from a security
aspect), Moody's is not privy to these milestones.  Therefore, it
is not possible for Moody's to opine on the feasibility of
achieving such milestones or assess the probability that the
company will receive all of the $237 million grant from the NGA.

Additionally, any failure with respect to ORBVIEW-5 (e.g. launch,
operational failure) could impair the company's business plan.
While the company could move some imaging tasks to its existing
ORBVIEW-3 satellite, ORBVIEW-3's imaging capacity and resolution
are less than those of ORBVIEW-5.  Moody's notes that should
ORBVIEW-5 fail during launch or implementation, or otherwise fail
to perform as expected, high resolution satellite imagery
customers could potentially turn to competitors such as
DigitalGlobe, whose high-resolution WorldView satellite is
scheduled for launch in 2006.

The ratings also consider:

   * the company's strong position in the commercial satellite
     imagery market;

   * increased post-9/11 demand for imagery intelligence;

   * the U.S. government's strong support of a domestic commercial
     satellite imagery industry;

   * longer-term contracts (typically three years);  and

   * given its operating leverage, the potential for high margins
     once ORBVIEW-5 is operating.

They also recognize that the value of ORBIMAGE's ongoing business,
which consists of two operating satellites, will be secured to the
bondholders and which Moody's estimates at approximately $200
million.

The ratings also recognize recent equity contributions.  Since
November 2004, the company has attracted nearly $108 million in
new equity.  In April 25, 2003, the U.S. government instituted the
U.S. Commercial Remote Sensing Policy wherein the government
deemed that a strong, well-supported satellite imagery industry
provides significant value.  The Policy requires U.S. federal
government agencies to rely, to the maximum extent possible, on
domestically-owned commercial satellite imagery providers and to
develop long term, sustainable relationships with such providers.
The government elected to support two satellite imagery providers,
ORBIMAGE and its competitor, DigitalGlobe, through the NGA's
NextView programs.  Such support is integral to the company's
future success since 49% of its revenues came directly from U.S.
government agencies, with significant portion of its non-U.S.
government business effectively subject to government approval.

The stable rating outlook considers the company's growth plans as
they relate to ORBVIEW-5, and Moody's belief that in the post-9/11
world, that the demand for imaging intelligence is not likely to
decline.  Additionally, given the capabilities of the company's
existing ORBVIEW-3 satellite and in light of competitors'
capabilities, if ORBVIEW-5 were to fail substantially, a portion
of customer demand could be met by the company's existing
capabilities until a replacement satellite were ready for launch.
Moody's would likely raise ORBIMAGE's ratings once funding of
ORBVIEW-5 is complete and launch date in line with Moody's
expectations is confirmed.  Moody's would likely lower ORBIMAGE's
ratings if cash burn accelerates due to operating shortfalls or
the NGA stops funding ORBVIEW-5 construction.

The SGL-3 speculative grade liquidity rating reflects nominal
operating cash flow expected over the next four quarters and
negative free cash flow through 2006 owing to the completion and
launch of the ORBVIEW-5 satellite.  Subsequent to the senior
secured note issuance, the company would have effectively pre-
funded its business plan.  Pro forma for the note issue proceeds,
Moody's estimates that ORBIMAGE will have approximately $227
million in cash, nearly all of which is earmarked for the ORBVIEW-
5 satellite construction and the redemption of the $62.8 million
senior subordinated notes.

A first-priority lien on substantially all assets of the company
will secure the floating rate notes.  Moody's notes that pro forma
at closing, the company will have no material assets other than
the capital stock of ORBIMAGE and an escrow account, which will
contain the net proceeds from the note issuance.  Funds from the
escrow account will likely be partially released on or before July
7, 2005, in an amount sufficient to trigger mandatory redemption
of the existing $62.8 million senior subordinated notes.  At
closing, the notes will not be guaranteed.  ORBIMAGE Inc., the
issuer's subsidiary, will be required to guarantee the $240
million of floating rate notes as soon as it is no longer
prohibited from doing so by the senior subordinated note indenture
(i.e. subsequent to the aforementioned redemption of the senior
subordinated notes).  Once the guarantee is in place, the
remaining funds will be released to the company from the escrow
account.

Moody's does not notch the proposed senior secured floating rate
notes relative to the corporate family rating since the former
comprises all of the company's pro forma debt (subsequent to the
redemption of the senior subordinated notes).  Also, because of
the subsidiary guarantee, the senior secured first-priority lien
debt would rank ahead of future second-priority lien debt or
unsecured obligations.  Therefore, as a class, the first-priority
lien senior secured debt could be notched higher than the
corporate family rating if the company were to issue a material
amount of second lien or unsecured debt in the future.

ORBIMAGE, headquartered in Dulles, Virginia, is a global provider
of Earth imagery products and services.  The company generated
approximately $31 million in revenue in 2004.


ORBIMAGE HOLDINGS: S&P Junks Proposed $245 Million Sr. Sec. Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' corporate
credit rating to Dulles, Virginia-based satellite imaging company
ORBIMAGE Holdings Inc. and its subsidiary-ORBIMAGE Inc.  The
outlook is negative.

At the same time, a 'CCC+' rating was assigned to ORBIMAGE
Holdings Inc.'s proposed $245 million senior secured floating rate
notes due 2012 to be issued under Rule 144A with registration
rights.  The 'CCC+' rating on the notes was simultaneously placed
on CreditWatch with positive implications.

"The CreditWatch listing reflects the potential guarantee of the
new notes by ORBIMAGE Inc. if the existing $62.8 million senior
subordinated notes due 2008 are redeemed using proceeds from the
new offering as planned by the company on or before July 7, 2005,"
said Standard & Poor's credit analyst Eric Geil.

If the senior subordinated notes are redeemed and the guarantee
provided, the rating on the senior secured floating rate notes
will be raised to 'B-'. In addition to repaying the existing
notes, offering proceeds will be used to finance a portion of the
construction and launch of the OrbView 5 satellite critical to
fulfilling a key government contract, and for general corporate
purposes. As of March 31, 2005, pro forma for the new notes and
repayment of the existing subordinated notes, total debt
outstanding was $245 million.

The ratings on ORBIMAGE reflect:

    * a high degree of business risk because of revenue
      concentration from a government contract,

    * high debt leverage,

    * weak near term cash flow,

    * relatively small asset size, and

    * dependence on the successful launch of the new satellite.

Somewhat tempering these factors are:

    * the rising demand for satellite imagery services,
    * the company's young satellite fleet, and
    * experienced management.

ORBIMAGE's financial profile will be weak until the OrbView 5
satellite is successfully launched.  EBITDA interest coverage will
be less than 1x through 2006, while debt to EBITDA will be above
9x.  After commercial operation of OrbView 5, the EBITDA margin is
expected to rise to the 60% area, similar to the profitability of
some fixed satellite service providers given the largely fixed
cost nature of the business.  Since capital expenditures will
decline dramatically after the satellite's completion, free cash
flow should become positive in 2008.


PAETEC COMMUNICATIONS: Moody's Rates Proposed $200M Loans at B2
---------------------------------------------------------------
Moody's Investors Service assigned a B2 rating for the proposed
$40 million 5-year senior secured revolving credit facility and
$160 million 6-year term loan facility at Paetec Communications,
Inc.  The $160 million term loan can be upsized by as much as $50
million with non-committed incremental term loans.  This
transaction coincides with a proposed Initial Public Offering.

The ratings broadly reflect:

   * Paetec's substantial business risk as a competitive local
     exchange carrier;

   * the company's acquisitive nature and subsequent integration
     risk associated with such acquisitions; and

   * relatively thin fixed asset base, which are offset somewhat
     by moderate financial risk.

Moody's assigned these ratings to Paetec Communications, Inc.:

   * Corporate Family Rating (previously called the Senior Implied
     Rating) -- B2

   * $40 million Senior Secured Revolving Credit Facility
     due 2010 -- B2

   * $160 million Senior Secured Term Loan due 2011 -- B2

   * Speculative Grade Liquidity -- SGL-1

The outlook on all ratings is stable.

The B2 corporate family rating reflects Paetec's challenging
position as a CLEC serving a footprint overlapped by the regional
Bell operating companies, primarily Verizon.  To grow, therefore,
Paetec must take and maintain market share from significantly
larger and better-capitalized telecommunications providers in
order to earn a positive return on its network investment.  To
drive growth and take market share amidst strong incumbent
competition, the company targets medium to large enterprise
customers underserved by its competitors.

The ratings also reflect Paetec's thin fixed asset base
(approximately $144 million of pro forma net PP&E) covering debt
as high as $250 million (assuming fully drawn revolver and the
incremental term loan upsized to the $50 million maximum
permitted).  The ratings also anticipate the potential for
increased acquisition activity, and subsequent integration risk,
upon the IPO's completion.  The issuance of publicly traded common
stock provides Paetec with an additional currency to finance such
acquisitions.

To the extent that the company raises at least $75 million in net
IPO proceeds, Paetec's ratings benefit from:

   * a conservative pro forma capital structure (total debt to
     capitalization of 44%);

   * low pro forma leverage (total leverage of 2.0x, net leverage
     of 0.4x);

   * high interest coverage (6.5x pro forma based on TTM EBITDA
     ending March 31, 2005); and

   * a track record of consistent revenue growth.

Additionally, the company generates positive free cash flow and,
with nearly $120 million of cash on its books, has significant
liquidity.   While management's policy is oriented towards
maintaining a significant cash balance to help weather telecom
industry cyclicality, Moody's is concerned that Paetec may
distribute its excess cash to shareholders or undertake a sizeable
acquisition.

Though the company's EBITDA margins are not as high as some of its
similarly rated peers, Paetec's lower margins are partially due to
the company's leases of special access T1 lines from incumbent
local exchange carriers via competitively priced bulk purchase
agreements.  Paetec does not rely on favorable regulatory pricing
(i.e. for unbundled UNE loops) for access line pricing.  Even
assuming reduced revenue growth rates and margin compression,
Moody's believes Paetec will generate moderate free cash flow in
2005.

Proceeds from the term loan and IPO ($85 million in primary
proceeds expected) will be used to:

   * repay existing debt ($116 million);

   * fund the required cash dividend pertaining to the company's
     series A preferred stock ($40 million);

   * improve Paetec's cash position; and

   * for various fees and expenses.

Moody's notes that a condition precedent to drawing the credit
facilities is that the IPO generates net proceeds of at least $75
million and that the full amount of such proceeds must be
contributed to the borrower as a common equity capital
contribution.  Also, upon completion of the IPO, the company's
outstanding preferred stock ($182 million) will convert to common
stock.

The stable rating outlook considers the company's moderate growth
plans and reasonable likelihood of maintaining its present cash
flow generating customer base.  Moody's would likely raise
Paetec's ratings if the company could improve EBITDA margins above
20%.  Moody's would likely lower Paetec's ratings if the company's
EBITDA margins fall below 15% for a prolonged period, leaving only
minimal free cash flow generation to grow the business, compete
effectively, and reduce leverage.  Furthermore, subsequent to the
IPO, the use of balance sheet cash and/or cash flow to pay a
dividend or establish an aggressive dividend policy could
negatively affect the ratings.

Paetec's SGL-1 speculative grade liquidity rating reflects the
company's strong liquidity and Moody's view that Paetec will be
able to meet its estimated obligations over the next twelve months
through internal resources.  Moody's expects the company's pro
forma 2005 cash balance to be at least $100 million and that
operating cash flow will be roughly $60 million.  Paetec's capital
spending is largely success based and could be trimmed should
revenue growth fail to meet expectations.  There are no looming
debt maturities since the proposed credit facilities will comprise
nearly all of the company's pro forma debt.

Subsequent to the IPO, Moody's expects Paetec will generate annual
free cash flow in excess of its capex and dividend requirements.
Moody's understands that the credit agreement will contain
provisions that restrict the company's ability to pay dividends
should EBITDA generation falter.  However, the SGL-1 rating could
be lowered in the future subsequent to the IPO should the company
elect to pay a substantial ongoing dividend, or make a material
special distribution.

Additionally, Moody's believes that at least part of the company's
cash is effectively earmarked for future acquisitions.  Moody's
could also lower the SGL-1 rating to the extent that such
acquisitions signficantly erode Paetec's cash balance or revolver
availability.

Moody's does not notch the ratings of the senior revolving credit
facility and term loan above the company's corporate family rating
since the credit facilities will comprise a preponderance (over
90%) of Paetec's pro forma debt.  Also, because of subsidiary
guarantees, the debt ranks ahead of general unsecured subsidiary
obligations.  Therefore, as a class, senior secured debt could be
notched higher than the corporate family rating if the company
were to issue a material amount of unsecured debt in the future.
Additionally, the borrowers benefit from both downstream and
upstream parent (i.e. Paetec Corporation Holding Company) and
subsidiary guarantees, respectively.

Paetec, headquartered in Fairport, New York, is a CLEC and
generated revenues of approximately $414 million in 2004.


PETROQUEST ENERGY: Closes $25 Million Private Debt Placement
------------------------------------------------------------
PetroQuest Energy, Inc. (Nasdaq: PQUE) closed its previously
announced private placement of an additional $25 million in
aggregate principal amount of its 10.375% Senior Notes due 2012.
The notes were priced at 99% of their face value to yield 10.578%.
The notes are fully and unconditionally guaranteed by certain of
PetroQuest's subsidiaries.  PetroQuest intends to use the net
proceeds from the private placement to fund acquisitions and for
general corporate purposes.

The notes have not been registered under the Securities Act of
1933, as amended, and may not be offered or sold in the United
States without registration or an applicable exemption from the
registration requirements of the Securities Act.  The Company
offered and issued the notes only to qualified institutional
buyers pursuant to Rule 144A under the Securities Act and to
persons outside the United States pursuant to Regulation S.

PetroQuest Energy, Inc., is an independent energy company engaged
in the exploration, development, acquisition and production of oil
and natural gas reserves in the Gulf Coast Basin, Texas and
Oklahoma.  PetroQuest trades on the Nasdaq National Market under
the ticker symbol "PQUE".

                        *     *     *

As reported in the Troubled Company Reporter on May 3, 2005,
Standard & Poor's Ratings Services assigned its 'CCC+' corporate
credit rating to PetroQuest Energy Inc.  At the same time,
Standard & Poor's assigned its 'CCC+' rating to PetroQuest's
proposed $150 million senior unsecured notes due 2013.  S&P said
the outlook is stable.

Pro forma for the proposed offering, Lafayette, Louisiana-based
PetroQuest will have $150 million of debt.

"The ratings on PetroQuest reflect its very high debt leverage,
aggressive growth strategy, elevated cost structure, exposure to
volatile hydrocarbon prices, and a limited reserve base," said
Standard & Poor's credit analyst Paul Harvey.


PROJECT FUNDING: Waning Credit Quality Cues S&P to Watch Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on the class
I, II, III, and IV notes issued by Project Funding Corp. I on
CreditWatch with negative implications.  Project Funding Corp. I
is a project funding CDO collateralized by a pool of project
finance loans.  The transaction was originated in March 1998 by
Credit Suisse First Boston.

The CreditWatch placements reflect factors that have negatively
impacted the performance of the transaction since the ratings were
lowered in July 2004.  The transaction has experienced
deterioration in the credit quality of the project loans.  One of
the projects has filed for bankruptcy under Chapter 11, while
three of the other remaining project loans are expected to remain
financially distressed over the next two years.

Standard & Poor's will review the results of current cash flow
runs generated for Project Funding Corp. I to determine the level
of future defaults the tranches can withstand under various
default timing and interest rate stress scenarios, while still
paying all of the principal and interest due.

The results of these cash flow runs will be compared with the
projected default performance of the loans remaining in the
portfolio to determine whether the ratings assigned to each class
of notes remain consistent with the amount of credit enhancement
currently available.

               Ratings Placed On Creditwatch Negative

                       Project Funding Corp. I

                           Rating
                           ------
            Class   To               From         Balance
            -----   --               ----       -----------
            I       BBB/Watch Neg    BBB        $95,260,000
            II      BB/Watch Neg     BB          $3,060,000
            III     B/Watch Neg      B           $3,170,000
            IV      CCC+/Watch Neg   CCC+        $3,830,000


PROXIM CORP: Wants to Hire The Trumbull Group as Noticing Agent
---------------------------------------------------------------
Proxim Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware for permission to
employ The Trumbull Group, LLC, as their noticing, claims and
balloting agent, nunc pro tunc to June 11, 2005.

The Trumbull Group is one of the country's leading chapter 11
administrators with experience in noticing, claims processing,
claims reconciliation and distribution.

The Trumbull Group will:

   (a) prepare and serve required notices in the Debtors' cases
       including:

       1. notice of the commencement of the Debtors' chapter 11
          cases and the initial meeting of creditors under Section
          341(a) of the U.S. Bankruptcy Code;

       2. notice of the claims bar date;

       3. notice of objection to claims;

       4. notice of any hearings on a disclosure statement and
          confirmation of a plan of reorganization; and

       5. other miscellaneous notices to any entities, as the
          Debtors or the Court may deem necessary or appropriate
          for an orderly administration of the Debtors' chapter
          11 cases;

   (b) file with the Clerk's office, within five days after
       mailing a particular notice, a certificate of affidavit of
       service that includes a copy of the notice involved, a list
       of persons to whom the notice was mailed and the date and
       manner of mailing;

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

   (d) maintain official claims registers, including the following
       information for each proof of claim or proof of interest:

       1. the name and address of the claimant and any agent
          thereof, if the proof of claim or proof of interest was
          filed by an agent;

       2. the date received;

       3. the claim number assigned; and

       4. the asserted amount and classification of the claim;

   (e) create and administer a claims database including review of
       the claims against the Debtors' estates and the Debtors'
       books and records;

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

   (g) transmit to the Clerk's office a copy of the claims
       registers on a monthly basis, unless requested by the
       Clerk's office on a more or less frequent basis, or in the
       alternative, make available the Proof of Claim docket
       on-line to the Clerk's office via the Claims Manager claims
       system;

   (h) maintain an up to date list for all entities that have
       filed a proof of claim or proof of interest, which list
       shall be available upon request of a party-in-interest or
       the Clerk's office;

   (i) provide access to the public for examination of copies of
       the proofs of claim or interest without charge during
       regular business hours;

   (j) record all transfers of claims pursuant to Bankruptcy Rule
       3001(e) and provide notice of such transfers;

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

   (l) provide temporary employees to process claims, as
       necessary;

   (m) provide balloting services in connection with the
       solicitation process for any chapter 11 plan to which a
       disclosure statement has been approved by the Court;

   (n) provide other claims processing, noticing and related
       administrative services as may be requested from time to
       time by the Debtors; and

   (o) promptly comply with further conditions and requirements as
       the Clerk's office or the Court may at any time prescribe.

Francine Gordon, vice president of The Trumbull Group, LLC,
discloses that her Firm will require a $5,000 retainer.
Trumbull's professionals' bill:

      Designation                     Hourly Rate
      -----------                     -----------
      Administrative Support                  $55
      Data Specialist                  $65 -  $80
      Assistant Case Manager                  $85
      Case Manager                    $100 - $125
      Automation Consultant                  $140
      Senior Automation Consultant    $155 - $175
      Operations Manager              $110 - $185
      Consultant                             $225
      Senior Consultant               $245 - $300

The Debtors believe that The Trumbull Group, LLC, is disinterested
as that term is defined in Section 101(14) of the U.S. Bankruptcy
Code.

Headquartered in San Jose, California, Proxim Corporation --
http://www.proxim.com/-- designs and sells wireless networking
equipment for Wi-Fi and broadband wireless networks. The Debtors
provide wireless solutions for the mobile enterprise, security
and surveillance, last mile access, voice and data backhaul,
public hot spots, and metropolitan area networks.  The Debtor
along with its affiliates filed for chapter 11 protection on
June 11, 2005 (Bankr. D. Del. Case No. 05-11639).  When the Debtor
filed for protection from its creditors, it listed $55,361,000 in
assets and $101,807,000 in debts.


QWEST CORP: Majority of Noteholders Tender Notes for Cash
---------------------------------------------------------
Qwest Communications International Inc. (NYSE:Q) and its
subsidiaries, Qwest Corporation and Qwest Services Corporation,
reported that the early participation period for the cash tender
offers to purchase any and all of QC's 6-5/8% Notes due 2005 and
6-1/8% Notes due 2005 and QSC's 13.00% Senior Subordinated Secured
Notes due 2007 ended on June 20, 2005, at 5:00 p.m. EDT.

As of the Early Participation Payment Deadline, the Companies had
received tenders of notes that were accepted for payment as
follows:

    * approximately $210.3 million of the 6-5/8% notes,
      representing approximately 84% of the outstanding principal
      amount of such notes;

    * approximately $128.8 million of the 6-1/8% notes,
      representing approximately 86% of the outstanding principal
      amount of such notes; and

    * approximately $451.7 million of the 13.00% notes,
      representing approximately 90% of the outstanding principal
      amount of such notes.

Holders who validly tendered notes as of the Early Participation
Payment Deadline received the Total Consideration indicated, which
includes an Early Participation Payment of $25.00.  Holders who
validly tender their notes after the Early Participation Payment
Deadline, but prior to midnight EDT on Tuesday, July 5, 2005, will
only receive the Tender Offer Consideration indicated in the table
above, which is equal to the Total Consideration minus the Early
Participation Payment of $25.00.

The settlement was completed on June 21, 2005, for notes tendered
as of the Early Participation Payment Deadline that were accepted
for payment, and interest accrued up to, but not including, on
June 21 was paid along with the Total Consideration.

The tender offers are scheduled to expire at the Expiration Time.
Notes tendered after the Early Participation Payment Deadline may
not be withdrawn.

Merrill Lynch and Co. and Deutsche Bank Securities are the Dealer
Managers for the tender offers.  Questions regarding the tender
offers may be directed to Merrill Lynch at 888-ML4-TNDR (U.S.
toll-free) and 212-449-4914 (collect) or Deutsche Bank Securities
at 212-250-4270 (collect).

Qwest Communications International Inc. (NYSE: Q) --
http://www.qwest.com/-- is a leading provider of voice, video
and data services. With more than 40,000 employees, Qwest is
committed to the "Spirit of Service" and providing world-class
services that exceed customers' expectations for quality, value
and reliability.

At Mar. 31, 2004, Qwest Communications' balance sheet showed a
$2,564,000,000 stockholders' deficit, compared to a $2,612,000,000
deficit at Dec. 31, 2004.

                        *     *     *

Standard & Poor's Ratings Services assigned its 'B' rating to
Denver, Colorado-based telephone company Qwest Communications
International Inc.'s proposed offering of senior unsecured notes
due 2014 (a tack-on to the existing 7.5% notes due 2014), and its
'BB-' rating to incumbent local exchange carrier operating
subsidiary Qwest Corp.'s proposed offering of senior unsecured
notes due 2013 and 2015.  All are 144A with registration rights.


R.J. REYNOLDS: Prices $500 Million Debt Offering
------------------------------------------------
Reynolds American Inc. (NYSE: RAI) disclosed the pricing of
$300 million of 6.50% Secured Notes due 2010 (the 2010 Notes) and
$200 million of 7.30% Secured Notes due 2015 (the 2015 Notes)
offered by its direct, wholly owned subsidiary, R.J. Reynolds
Tobacco Holdings, Inc., in a private placement pursuant to Rule
144A under the Securities Act of 1933, as amended (the Securities
Act), and to persons outside the United States under Regulation S
under the Securities Act.

RJR intends to use the proceeds from the private offering of the
2010 Notes and the 2015 Notes:

   1) to purchase its 7-3/4% Notes due May 2006 (the 2006 Notes)
      that are validly tendered and accepted for payment pursuant
      to the Offer to Purchase and Consent Solicitation Statement
      and related materials concerning the cash tender offer that
      RJR commenced on June 21, 2005; and

   2) to pay at maturity any 2006 Notes that are not tendered, or,
      at RJR's discretion, to redeem the 2006 Notes.

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

Based in Winston-Salem, North Carolina, Reynolds American is the
parent company of RJR Tobacco Company, the second largest
cigarette company in the United States.

                        *     *     *

As reported in the Troubled Company Reporter on Feb. 9, 2005,
Moody's Investors Service affirmed the ratings of Altria Group
Inc., British American Tobacco, Loews Corp. and Reynolds American
following a recent ruling by the District of Columbia Court of
Appeals in the case brought by the Department of Justice against
the industry.  The rating outlooks of the four companies remain
negative.

The ratings affirmed are:

   -- Altria Group Inc.:

      * Baa2 for senior unsecured long-term debt
      * Prime-3 for commercial paper

   -- British American Tobacco:

      * Baa1 for senior unsecured long-term debt
      * Prime-2 for commercial paper

   -- Loews Corp.:

      * Baa1 for senior unsecured
      * Baa2 for senior subordinated

   -- Reynolds American:

      * Ba2 for senior implied
      * Ba2 for senior secured bonds
      * B2 for senior unsecured bonds


R.J. REYNOLDS: S&P Rates $500 Million Senior Secured Notes at BB+
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' rating to
Winston-Salem, North Carolina-based RJ Reynolds Tobacco Holdings
Inc.'s $500 million senior secured notes in two tranches due 2010
and 2015.

At the same time, Standard & Poor's affirmed its ratings on the
company, including its 'BB+' corporate credit rating.  The ratings
outlook is negative.  About $1.6 billion of total debt was
outstanding at parent company, Reynolds American Inc. at March 31,
2005.

Proceeds from the proposed private offering will be used to
purchase the company's 7.75% notes due May 2006 prior to maturity
in a cash tender offer that commenced June 21, 2005.  Payment of
the notes will be jointly, severally and unconditionally
guaranteed by RAI and by certain direct and indirect subsidiaries
of RJR.  The notes and related guarantees will be secured by the
stock of RJR and certain subsidiaries of RJR, debt of RJR and
certain subsidiaries, and principal property of RJR or the
guarantors (other than RAI).

Upon completion of the tender of and consent from at least 50% of
the 7.75% notes and note holders, the remaining balance on these
notes will no longer be secured or contain negative covenants, yet
will retain the existing guarantees.  Although any remaining
portion of the 7.75% notes would no longer benefit from the
security, these notes would continue to benefit from the upstream
and downstream guarantees so Standard & Poor's would affirm the
existing ratings on these remaining notes.  Standard & Poor's
expects that RJR would warehouse any cash remaining from the new
offering that is not used to tender the 7.75% notes for repayment
of these notes in May 2006.


R.J. REYNOLDS: Fitch Rates Proposed $500M Debt Offering at BB+
--------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to R.J. Reynolds Tobacco
Holdings, Inc.'s proposed $500 million private offering of
guaranteed secured notes.

The notes are guaranteed by Reynolds American Inc., R.J. Reynolds
Tobacco Company, and certain other material subsidiaries.  In
conjunction with the offering RJR has announced a cash tender
offer for any and all of its $500 million aggregate principal
amount of 7 3/4% notes due 2006.  Fitch rates RJR's guaranteed
notes and bank credit facility 'BB+', and senior unsecured notes
'BB'.  Rated debt securities outstanding total approximately $1.6
billion.  The Rating Outlook is Stable.

The ratings rely upon maintenance of conservative financial
policies and a high degree of liquidity to manage the
uncertainties surrounding tobacco-related litigation and the
competitive tobacco operating environment.  There are several
litigation rulings in high-profile cases - particularly the
Department of Justice trial, Engle Appellate review and Price
Appellate review - expected in the next several months that create
heightened uncertainty for the major U.S. tobacco firms.

While RJR, RJRT, and Brown & Williamson are not defendants in the
Price case, they are defendants in similar 'lights' cases in the
same jurisdiction that could be impacted by the outcome of Price.
Favorable resolutions of the major cases could result in upward
rating revisions.  However, an adverse verdict with a multi-
billion dollar judgment could result in a Negative Rating Watch
through the appeal process.  For the 12-month period ending March
31, 2005, total debt-to-EBITDA was 1.1 times (x) and EBITDA-to-
interest was 17.1x. Cash flow from operating activities to total
debt was 58.9%.


R.J. REYNOLDS: Moody's Rates Backed Senior Secured Notes at Ba2
---------------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to the new senior
secured notes maturing in 2010 and 2015 issued by R.J. Reynolds
Tobacco Holdings, Inc., and affirmed all the existing ratings of
RJRT.  RJRT is a 100%-controlled subsidiary of Reynolds American,
Inc.  The outlook remains negative.

Ratings assigned:

  RJRT:

   * Ba2 for backed senior secured notes maturing 2010
   * Ba2 for backed senior secured notes maturing 2015

Ratings affirmed:

  RJRT:

   * Ba2 for corporate family rating
   * Ba2 for backed senior secured debt
   * B2 for senior unsecured debt

RJRT will issue new senior secured notes due 2010 and 2015 in an
aggregate principal amount of $500 million under Rule 144A under
the Securities Act.  The new notes will be secured with a first
lien on principal property of RJRT, made up of:

   * land,
   * building,
   * equipment, and
   * shares of subsidiary stock.

The new notes will share this collateral pari passu with existing
secured senior notes and revolving credit.

The rating action reflects an unchanged capital structure and
level of total indebtedness, and maintenance of the company's
liquidity strength.  RJRT will use proceeds from the private
offering of notes to purchase its 7 3/4% notes due May 2006 prior
to maturity in a cash tender offer.  Refinancing of these notes
will allow the company to maintain a maturity date of January 30,
2007 for its $486 million senior secured revolving credit
facility.  Otherwise, absence of refinancing by February 13, 2006
would have led to an acceleration of maturity of this credit
facility to that date.  In order to induce holders of the 7 3/4%
notes to tender, an amendment stripping non-tendered notes of all
security is being proposed.  Passage of this amendment would place
any remaining non-tendered notes in a substantially subordinated
position relative to secured bondholders and would likely result
in a multi-notch downgrade of the 7 3/4% notes due May 2006.

The ratings reflect:

   * the strength of several of the company brands;

   * expected cost reduction benefits from the recent merger
     between R.J. Reynolds and Brown and Williamson; and

   * increased pricing flexibility in the industry.

The ratings also reflect:

   * declining consumption volumes;

   * the strength of the company's main competitor,
     Philip Morris USA; and

   * significant litigation against the company's main operating
     subsidiary, R.J. Reynolds Tobacco Co.

In the context of an industrywide, long-term decline in
consumption of tobacco in the US market, the larger players such
as Reynolds American seem to have regained some of their pricing
flexibility, as indicated by a recent price increase initiated by
Philip Morris USA.  The mandatory contributions of "deep discount"
manufacturers into state-established escrow accounts should
continue to increase, due in part to new legislative initiatives
aimed at protecting Master Settlement Agreement signatories such
as R.J. Reynolds Tobacco Company.  Reynolds American's operating
income should continue to benefit from a restructuring plan
initiated two years ago and synergy-related cost reductions
following the merger with Brown and Williamson.

In the first quarter of 2005, operating income increased 58% from
$296 million to $467 million, including income of $65 million
associated with lower payments to the tobacco Growers' Trust.
Moody's believes the company should be able to achieve between
$325 and $370 million in cost reductions solely from merger-
related synergies.

The company's outlook remains negative, mainly due to high
remaining legal risk.  While the elimination of disgorgement as a
possible remedy has lowered the risk in this claim, the action
brought by the Department of Justice remains a threat because of
possible bonding requirements and future volume reductions that
could result from the imposition of nonfinancial remedies.  The
Engle product liability class-action case in Florida and the
Price/Miles consumer fraud class-action case in Illinois remain
under review for appeal. R.J. Reynolds Tobacco Co. faces a patent
infringement claim brought in federal court by a competitor, Star
Scientific.  This case could potentially lead to significant
damages. R.J. Reynolds Tobacco Co. could also be asked at some
point in the coming years to indemnify Japan Tobacco for a
$1.5 billion tax payment assessed by the Province of Quebec
against a former Canadian subsidiary of R.J. Reynolds.

In order for the ratings to go up, the main requirement would be a
drastic reduction in legal risk.  All of the pending or potential
legal claims of significance against the company, including the
Star Scientific case, would have to be resolved in its favor.  No
class-action claim in a state without a bond cap or in federal
court would be scheduled for trial.

In addition, these factors would have to be realized:

   -- A return to pricing flexibility, which would allow the
      company to offset ongoing volume reductions.

   -- The company's expected free cash flow to gross debt would
      reach a sustained level above 15%.

These factors could place pressure on the rating:

   -- An increase in overall legal risk, tied to adverse court
      rulings in cases such as Engle, Price/Miles, the Department
      of Justice case, or Star Scientific.

   -- The company's free cash flow to gross debt would not be
      expected to go above 10% on a sustained basis.

Based in Winston-Salem, North Carolina, Reynolds American is the
parent company of R.J. Reynolds Tobacco Co., the second largest
cigarette company in the United States.


REFCO GROUP: Moody's Affirms Senior Subordinated Debt's B3 Rating
-----------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Refco Group
Ltd., LLC (senior secured bank facilities at B1) and its
subsidiaries following its announcement to acquire the brokerage
operations of Cargill Investor Services, subject to relevant
regulatory approvals.  The outlook remains stable.

The affirmation reflects Refco's solid operating and financial
performance since its LBO, driven by robust growth in market
volumes and high customer activity levels in its key business
lines - such as exchange traded derivatives and foreign exchange.
This led to a 30% increase in net revenues and the prepayment of
$150 million in debt in fiscal 2005.

Moody's said that Refco continues to enjoy a solid niche position
as broker in fast-growing capital markets - principally exchange
traded derivatives, FX and liquid bond markets.  The firm has a
granular customer base and limits its position risk taking.

Nonetheless, Refco's global business platform creates multiple
regulatory relationships and challenges.  Acting as a clearing
broker also presents extensive operational risk challenges such as
managing counterparty credit risk Moody's said.

Management is pursuing an initial public offering.  Successful
execution of the offering and an accompanying reduction in total
debt by at least $200 million may lead to upward rating pressure,
assuming underlying operating performance has not deteriorated.

The current ratings continue to reflect the high overall leverage
in the capital structure of Refco Group Ltd., LLC reflecting last
year's leveraged buyout.  The ratings also reflect the debt
holder's structural subordination to operating subsidiaries and
the high degree of double leverage, Moody's noted.

Refco will pay $208 million in cash for the acquisition as well as
future contingent cash payments of between $67 million and
$192 million based on the performance of the acquired operations.
The cash spent on the acquisition reduces Refco's liquidity and
increases its net debt.  Nonetheless, Refco's liquidity is
adequate Moody's said.  It is supported by the firm's cash
balances and the availability of a bank revolver from the lending
banks.  Deterioration of this liquidity position could lead to
negative rating actions.

These ratings were affirmed with stable outlook:

   * Long-term Corporate Family Rating of B1
   * Senior Secured Bank Credit Facility Rating at B1
   * Senior Subordinated Debt at B3

Refco is an independent brokerage and clearing firm for exchange
traded derivatives, which earned $176 million in fiscal year ended
on Feb. 28, 2005.


REGIONAL DIAGNOSTICS: Committee Taps Hahn Loeser as Counsel
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Ohio gave
the Official Committee of Unsecured Creditors of Regional
Diagnostics, L.L.C., and its debtor-affiliates permission to
employ Hahn Loeser & Parks LLP as its counsel.

Hahn Loeser will:

   a) advise the Committee of its rights, powers and duties in the
      Debtors' chapter 11 cases under Section 1103 of the
      Bankruptcy Code;

   b) advise the Committee concerning the administration of the
      Debtors' chapter 11 cases and any efforts by the Debtors or
      other parties to collect and recover property for the
      benefit of the Debtors' estates;

   c) advise the Committee in the formulation, negotiation and
      confirmation of a chapter 11 plan and approval of an
      accompanying disclosure statement and their related
      documents;

   d) review the nature, validity and priority of liens asserted
      against the Debtors' estates and advise the Committee
      concerning the enforceability of those liens;

   e) prepare on behalf of the Committee all necessary
      applications, motions, notices, draft orders and other
      pleadings, and review all other financial and other reports
      filed in the Debtors' chapter 11 cases;

   f) assist and advise the Committee in connection with any
      potential sale of assets or disposition of property of the
      Debtors;

   g) assist and advise the Committee concerning proposed
      executory contracts and unexpired lease assumptions,
      assignment and rejections, and in claims analysis and
      resolution matters; and

   h) perform all other legal services for the Committee that may
      be necessary in satisfying its duties under Section 1103 of
      the Bankruptcy Code.

Daniel A. Demarco, Esq., a Partner at Hahn Loeser, is one of the
lead attorneys for the Committee.  Mr. Demarco charges $405 per
hour for his services.

Mr. Demarco reports Hahn Loeser's professionals bill:

      Professional           Designation    Hourly Rate
      ------------           -----------    -----------
      Lawrence E. Oscar      Partner           $480
      Rocco I. Debitetto     Associate         $250
      Christopher W. Peer    Associate         $190
      Colleen M. Beitel      Paralegal         $170

Hahn Loeser assures the Court that it does not represent any
interest materially adverse to the Committee, the Debtors or their
estates.

Headquartered in Warrensville Heights, Ohio, Regional Diagnostics,
L.L.C. -- http://www.regionaldiagnostic.com/-- owns and operates
27 medical clinics located in Florida, Illinois, Indiana, Ohio and
Pennsylvania.  The Company and its debtor-affiliates filed for
chapter 11 protection on April 20, 2005 (Bankr. N.D. Ohio Case No.
05-15262).  Jeffrey Baddeley, Esq., at Baker & Hostetler LLP
represents the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they estimated
assets of $10 million to $50 million and debts of $50 million to
$100 million.


SAKS INC: S&P May Lift Ratings to B+ Upon Debt Tender Completion
----------------------------------------------------------------
Standard & Poor's Ratings Services expects to raise its corporate
credit and senior unsecured debt ratings on Saks Inc. to 'B+' from
'CCC+' upon successful completion of a debt tender and consent
solicitation, and maintain those ratings on CreditWatch with
developing implications.

"This decision is a reflection of Saks taking a more proactive
approach to alleviate a potential acceleration of its debt," said
Standard & Poor's credit analyst Gerald A. Hirschberg.  Saks
received on June 15, 2005, a notice of a filing requirement
default by a hedge fund that owned more than 25% of the 2%
convertible senior notes.

On June 20, Saks announced a comprehensive plan that would greatly
reduce its funded debt and that would extend the date for filing
its 10-K to Oct. 31, 2005.  (Saks continues to state that it
expects to file its 10-K by Sept. 1, 2005).  The debt retirement
would be accomplished via a tender offer at $990 per $1,000
principal for $658 million of debt that is selling below par.  The
consent solicitation relates to amendments to filing deadlines and
a waiver of defaults under those indentures.

The rating changes are predicated on a successful consent
solicitation with respect to $1.22 billion of debt, and a
materially successful tender offer. The ratings would then be
raised to 'B+' from 'CCC+', and would remain on CreditWatch with
developing implications.

Standard & Poor's also has a better level of comfort with regard
to Saks' liquidity and willingness to reduce debt. In addition to
cash on hand of approximately $320 million, we believe that the
proposed sale of certain department-store assets to Belk Inc. for
$622 million will proceed as scheduled.  This transaction is
scheduled to close in early July, and that the $622 million in
proceeds will be used to pay for tendered debt.  Because the
tender offer expires July 18, Saks should have ample funds to pay
for the tendered issues on the July 19 settlement date.

Furthermore, Standard & Poor's is more confident that Saks will be
able to use availability from its $800 million revolving credit as
supplementary liquidity, although the banks' earlier waiver of
filing requirements doesn't explicitly encompass a waiver of a
material adverse change in the event of default or other debt
acceleration.

After the ratings are raised, the continued CreditWatch listing
would then relate to uncertainty regarding the company's ability
to sell its Northern Department Store Group, the amount of
potential proceeds, and future capital structure.  While proceeds
may be used for further debt reduction, a more likely scenario
would include stock repurchases.  In addition to these financial
concerns, Standard & Poor's will reassess Saks' business risk
after the divestitures.


SANDITEN INVESTMENTS: Judge Michael Dismisses Chapter 11 Case
-------------------------------------------------------------
The Honorable Judge Terrence L. Michael of the U.S. Bankruptcy
Court for the Northern District of Oklahoma dismissed the chapter
11 case of Sanditen Investments, Ltd., on June 13, 2005.

The Debtor has consented to the dismissal of its case because it
has received written consents from approximately 93% of the
current and former limited partners of Sanditen Investments, Ltd.,
consenting to:

   -- the sale of Country Club Plaza to Steven A. Sanditen and
      others, and

   -- the orderly liquidation of the assets of Sanditen
      Investments, Ltd.

As previously reported in the Troubled Company Reporter on
May 3, 2005, The Bank of Oklahoma, N.A., is the largest creditor
of Sanditen Investments, Ltd., holding a $1,746,943 claim.  The
Bank wanted Sanditen's chapter 11 case dismissed because the
Debtor is solvent, with assets of approximately $20.7 million and
only $3.1 million in debt.  The Bank urged the Court to dismiss
the case to stop Sanditen from delaying its payments to the Bank.

The Court finds that the Debtor's case should be dismissed
because:

   -- the Debtor consented to the dismissal of the case and not
      for the reasons stated by the Bank, and

   -- no party-in-interest objected to the Bank's request.

Headquartered in Tulsa, Oklahoma, Sanditen Investments, Ltd., owns
two shopping centers and some undeveloped real estate in Tulsa,
Oklahoma.  The Company filed for chapter 11 protection on Feb. 18,
2005 (Bankr. N.D. Okla. Case No. 05-10850).  John D. Dale, Esq.,
at Gable & Gotwals represents the Debtor.  When the Debtor filed
for protection from its creditors, it listed estimated assets $50
million and estimated debts of $10 million.


SEARS HOLDINGS: Recovers $17 Million from Critical Vendors
----------------------------------------------------------
William K. Phelan, vice president and controller of Sears
Holdings Corporation, reports in a regulatory filing with the
Securities and Exchange Commission that Sears Holdings recognized
recoveries of $17 million for the 13 weeks ended April 30, 2005,
related to vendors who had received cash payments for prepetition
obligations or preference payments from Kmart.

In conjunction with these recoveries, Sears Holdings was assigned
127,046 shares of common stock with a value of $13 million for the
13 weeks ended April 30, 2005.  Of the 127,046 shares, 50,748 were
cancelled on March 24, 2005.

Sears Holdings Corporation -- http://www.searshc.com/-- is the
nation's third largest broadline retailer, with approximately
$55 billion in annual revenues, and with approximately 3,800
full-line and specialty retail stores in the United States and
Canada.  Sears Holdings is the leading home appliance retailer as
well as a leader in tools, lawn and garden, home electronics and
automotive repair and maintenance.  Key proprietary brands include
Kenmore, Craftsman and DieHard, and a broad apparel offering,
including such well-known labels as Lands' End, Jaclyn Smith and
Joe Boxer, as well as the Apostrophe and Covington brands.  It
also has Martha Stewart Everyday products, which are offered
exclusively in the U.S. by Kmart and in Canada by Sears Canada.
(Kmart Bankruptcy News, Issue No. 96; Bankruptcy Creditors'
Service, Inc., 215/945-7000)

                         *     *     *

As reported in the Troubled Company Reporter on March 31, 2005,
Moody's Investors Service affirmed the Ba1 senior implied rating
of Sears Holding Corporation.  Moody's said the rating outlook is
stable.

Ratings assigned:

     Sears Holdings Corporation

        * Senior implied rating at Ba1;
        * Senior unsecured issuer rating at Ba1; and
        * $4 billion senior secured revolving credit facility
          at Baa3.

As reported in the Troubled Company Reporter on March 30, 2005,
Fitch Ratings assigned a 'BB' rating to Sears Holdings senior
unsecured debt, with a negative outlook.

At the same time, Standard & Poor's assigned its 'BB+' corporate
credit rating to Sears Holdings, with a negative outlook.


SIRVA INC: SEC Converts Informal Inquiry to Formal Probe
--------------------------------------------------------
The staff of the enforcement division of the Securities and
Exchange Commission informed SIRVA Inc. (NYSE:SIR) that the
informal inquiry related to the company's previous earnings
guidance announcement for the fourth quarter and full year ended
Dec. 31, 2004, was converted to a formal investigation.

On March 15, SIRVA disclosed that the filing of its Annual Report
on Form 10-K would be delayed to allow for the completion of the
company's internal review and a review initiated by the audit
committee of SIRVA's board of directors, and to allow for
additional time to prepare restated financial statements.  At that
time, the company identified $33 million of net unanticipated pre-
tax charges in the fourth quarter of 2004, $22 million of which
related to accounting errors that would require restatements to
previously issued financial statements.

While the closing process, internal review, and audit committee
review are progressing, they are not yet completed.  The numbers
that follow are based on management's current estimates with
respect to findings to date, but remain subject to change, as
certain additional review topics remain under evaluation.  On this
basis, the company now estimates the net unanticipated pre-tax
charges identified with respect to the fourth quarter of 2004 to
be approximately $45 million.  The company has identified
accounting errors with a cumulative effect of $27 million that
will require the restatement of prior quarterly and annual
financial statements, approximately $25 million of which relate to
continuing operations.

The errors that will require restatement are principally
concentrated within the company's Insurance and European
businesses, accounting for approximately $16 million and
$7 million, respectively.  The balance of the errors of
approximately $4 million are spread across SIRVA's remaining
businesses, and are primarily due to corrections of the company's
accounting for facility leases and associated escalation clauses,
of which approximately $2 million relate to discontinued
operations.

Overall, the company currently estimates the restatement will have
four effects on its annual financial results from continuing
operations:

   -- Pre-tax income from continuing operations for the period
      2001 and prior will not be materially impacted.

   -- Pre-tax income from continuing operations for 2002 will be
      reduced by approximately $3 million.

   -- Pre-tax income from continuing operations for 2003 will be
      reduced by approximately $5 million.

   -- Pre-tax income from continuing operations for the first nine
      months of 2004 will be reduced by approximately $17 million.

Additionally, the company has identified certain corrections that
will not affect net income, but will result in a reclassification
of previously reported balances within the income statement or
balance sheet.  These will be further detailed when the company
releases its consolidated restated results.

The remaining $18 million of pre-tax charges relate to current
operating activities or changes in estimates that will be included
within reported results for the quarter ended Dec. 31, 2004.  On
March 15, the company itemized $11 million of pre-tax charges.
The additional $7 million of charges identified from March 15 to
date are summarized as:

   -- $3 million related to the company's decision to further
      increase the loss reserves in its insurance business.

   -- $2 million of corporate charges related to certain severance
      agreements.

   -- $1 million to impair certain non-insurance assets within the
      company's Network Services segment that were divested in the
      first quarter of 2005.

   -- $1 million of miscellaneous items identified through the
      company's year-end review.

Based upon work completed to date, the company estimates, on a
continuing operations basis including these charges, an operating
loss in the fourth quarter 2004 of $11 million, a net loss of $14
million and net loss per basic share of approximately $0.19.  For
the full year 2004, the company currently estimates income from
continuing operations of $68 million, net income of $27 million
and earnings per diluted share of approximately $0.35.  These
estimated fourth quarter and full-year 2004 results reflect the
impact of the restatements identified to-date.

Due to the additional work required to complete the audit
committee review, the incremental procedures undertaken by the
company's external auditors, and the supplemental external
resources required to support and review the 2004 close and
restatement process, the company currently expects expenses
associated with these activities during 2005 to increase to
approximately $55 million.

                        Sarbanes-Oxley

As previously disclosed, the company's management believes the
accounting errors that gave rise to the restatements were the
result of material weaknesses in internal control over financial
reporting in its Insurance and European operating units.  As a
result, management will conclude in the company's Annual Report on
Form 10-K that internal control over financial reporting was
ineffective as of December 31, 2004.  The company is currently
evaluating the remainder of its internal control structure,
financial reporting procedures and the preliminary findings with
respect to the ongoing reviews so that it can finalize all aspects
of the reporting requirements of Section 404 of the Sarbanes-Oxley
Act.

                      Financial Filings

The company previously disclosed the amended terms of its credit
agreements to allow for, among other things, a 90-day extension of
its requirement to deliver 2004 audited financial statements and a
60-day extension of its requirement to deliver its un-audited
financial statements for the quarter ended March 31, 2005.  To
allow for the completion of the audit committee review, and to
provide sufficient time for the company's external auditors to
complete their audit of the company's 2004 and restated 2003 and
2002 financial statements, the company will seek an amendment to
allow for an extension of this requirement until Sept. 30, 2005.
The company has no reason to believe that it will be unable to
obtain the extension.  Prior to Sept. 30, 2005, the company plans
to meet with its lender group to discuss a more comprehensive
amendment to its credit agreements to provide for additional
operating flexibility.

SIRVA, Inc. -- http://www.sirva.com/-- is a leader in providing
relocation solutions to a well-established and diverse customer
base around the world.  The company is the leading global provider
that can handle all aspects of relocations end-to-end within its
own network, including home purchase and home sale services,
household goods moving, mortgage services and insurance.  SIRVA
conducts more than 365,000 relocations per year, transferring
corporate and government employees and moving individual
consumers.  The company operates in more than 40 countries with
approximately 7,500 employees and an extensive network of agents
and other service providers.  SIRVA's well-recognized brands
include Allied, northAmerican, Global, and SIRVA Relocation in
North America; Pickfords, Huet, Kungsholms, ADAM, Majortrans,
Allied Arthur Pierre, Rettenmayer, and Allied Varekamp in Europe;
and Allied Pickfords in the Asia Pacific region.

                        *     *     *

As reported in the Troubled Company Reporter on March 17, 2005,
Standard & Poor's Ratings Services placed its ratings on SIRVA
Inc., including the 'BB' corporate credit rating, on CreditWatch
with negative implications.

The CreditWatch placement follows SIRVA's announcement:

   -- that charges related to its insurance and European
      businesses will be higher than previously anticipated;

   -- that its year-end financial statement will be delayed; and

   -- that it will incur significant expenses in 2005 to address
      financial control weaknesses.

"The CreditWatch placement reflects SIRVA's disclosure of
additional extraordinary charges, significant costs related to
improved financial control to be incurred in 2005, and recent
earnings pressure, which will likely delay anticipated
improvements in earnings and cash flow," said Standard & Poor's
credit analyst Kenneth L. Farer.


SOLA INTERNATIONAL: Moody's Withdraws $225M Debts' Ba3 Rating
-------------------------------------------------------------
Moody's Investors Service has withdrawn the ratings of Sola
International, Inc. following the completion of its merger with
Carl Zeiss TopCo GmbH and the concurrent repayment of all of
Sola's rated debt.

These ratings were withdrawn:

   * Corporate Family Rating (formerly known as Senior Implied
     Rating) rated Ba3;

   * Senior Unsecured Issuer Rating, rated B1;

   * $50 million Senior Secured Revolver due 2008, rated Ba3; and

   * $175 million Senior Secured Term Loan due 2009, rated Ba3.

Headquartered in San Diego, California, Sola designs, manufactures
and distributes plastic and glass eyeglass lenses.


SOLUTIA INC: Asks Court to OK DIP Financing Extension to June 2006
------------------------------------------------------------------
Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York,
tells Judge Beatty of the U.S. Bankruptcy Court for the Southern
District of New York that over the past year, Solutia, Inc.'s new
senior leadership team significantly improved the financial
performance of its business operations.  Currently, Solutia is
focused on being in a position to successfully emerge from their
Chapter 11 cases.  In that regard, Solutia's management has been
engaging in constructive negotiations with the Official Committee
of Unsecured Creditors and Monsanto Company concerning a
restructuring of the Debtors.

The negotiations resulted in Solutia, the Committee and Monsanto
reaching an agreement-in-principle, which will serve as the
framework for Solutia's plan of reorganization.  According to Mr.
Cieri, the financial markets' increased confidence in Solutia due
to its significantly improved financial performance and progress
made in its Chapter 11 cases has provided Solutia the opportunity
to obtain a favorable amendment to the DIP Agreement.

After extensive arm's-length negotiations, Solutia and the DIP
Lenders reached an agreement on the terms of an amendment to the
DIP Agreement.  The salient terms of the Third Amendment provide
for:

   (a) a lower interest rate on the Term Loans;

   (b) a six-month extension of the term of the DIP Agreement to
       June 19, 2006;

   (c) an increase in the amount of cash proceeds Solutia may
       retain in connection with certain asset sales and
       Extraordinary Receipts before mandatory prepayment
       obligations are triggered; and

   (d) other miscellaneous modifications.

Citicorp USA, Inc., as collateral agent, administrative agent,
and documentation agent, obtained approval for the Third
Amendment from 100% of the DIP Lenders.  To secure the terms of
the Third Amendment, Solutia is required to pay an arranging fee
to the DIP Agent, as well as certain other costs, fees and
expenses described in the Third Amendment.  The Debtors, the DIP
Lenders and the DIP Agent have negotiated these fees at arm's-
length and in good faith.

The Debtors have determined that the Amendment-Related Fees and
Expenses are significantly less than the up to $8 million in
annual interest savings that they could receive pursuant to the
lower interest rates in the Third Amendment.

The DIP Agreement is set to expire on December 19, 2005.  Mr.
Cieri notes that while Solutia intends to make every effort to
emerge from its Chapter 11 cases prior to that date, it is not
certain that it can do so.  Thus, Solutia wants a six-month
extension of the term of the DIP Agreement to provide it with
additional time, if needed, to formulate and seek confirmation of
its plan of reorganization.  Solutia's management believes that
Solutia should extend the facility now given the favorable
lending market, rather than possibly being required later in the
year to secure financing under significant time pressures.

Furthermore, Solutia's management believes that the Third
Amendment sends a strong message to Solutia's vendors, customers
and employees about its ability to emerge from the Debtors'
Chapter 11 cases.

Accordingly, the Debtors seek the Court's authority to amend the
DIP Agreement and to pay the Amendment-Related Fees and Expenses
in connection with the amendment.

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 is represented by
Richard M. Cieri, Esq., at Kirkland & Ellis. (Solutia Bankruptcy
News, Issue No. 40; Bankruptcy Creditors' Service, Inc., 215/945-
7000)


SOUTHAVEN POWER: Inks Settlement Pact with Enron, EPC & NPPC
------------------------------------------------------------
In late 2000, Southaven Power, LLC, entered into three contracts
with Enron Corp., and its subsidiaries -- NEPCO Power Procument
Company and EPC Estate Services Inc. -- for the construction of an
810 megawatt dispatchable, combined cycle, natural gas-fired
electric power plant located in Southaven, Mississippi.

The Debtor signed:

   -- a Construction Agreement with EPC;

   -- an Engineering and Equipment Procurement Agreement with
      NPPC; and

   -- a Coordination Agreement with EPC and NPPC.

According to the contracts, the Plant will be constructed on a
fixed-cost basis.  Enron guaranteed the obligations of EPC and
NPPC.

After Enron filed for bankruptcy in 2001, followed shortly by EPC
and NPPC, the Debtor terminated the three contracts.  SNC-Lavalin
Constructors, Inc., completed the construction of the Plant.

As a result of the termination of the contracts, Southaven was
obligated to pay third party providers of services and goods that
EPC and NPPC failed to pay.

Southaven then filed proofs of claim amounting to $37,095,759
against each of Enron, EPC and NPPC.  After a reconciliation
process, Southaven, the parties agreed, can make claims on Enron
and EPC, each for $27,916,488.

Accordingly, Southaven asks the U.S. Bankruptcy Court for the
Western District of North Carolina, Charlotte Division, to approve
the settlement.

Headquartered in Charlotte, North Carolina, Southaven Power, LLC,
operates an 810-megawatt, natural gas-fired electric power plant
located in Southaven, Mississippi.  The Company filed for chapter
11 protection on May 20, 2005 (Bankr. W.D.N.C. Case No. 05-32141).
Hillary B. Crabtree, Esq., at Moore & Van Allen, PLLC, and Mark A.
Broude, Esq., at Latham & Watkins LLP represent the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it estimated assets and debts of more than $100
million.


SUPERIOR WHOLESALE: S&P Rates $53.16 Million Class D Notes at BB
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Superior Wholesale Inventory Financing Trust XII's
(SWIFT XII) $1,483,903,000 floating-rate asset-backed term notes
series 2005-A.

The preliminary ratings are based on information as of June 22,
2005.  Subsequent information may result in the assignment of
final ratings that differ from the preliminary ratings.

The preliminary ratings reflect:

    -- The credit enhancement, which is sufficient to withstand
       losses at the assigned rating levels;

    -- A structure that includes certain amortization events,
       interest and principal allocation waterfalls, and several
       portfolio concentration thresholds limiting investor
       exposure to losses; and

    -- The underwriting and servicing capabilities of General
       Motors Acceptance Corp.

The preliminary ratings do not address the likelihood that the
notes will be retired on the expected final payment date (June 16,
2008), but do address the ultimate payment of principal by the
legal final payment date (June 15, 2010).  This will be the first
issuance out of the newly formed SWIFT XII.


                  Preliminary Ratings Assigned
          Superior Wholesale Inventory Financing Trust XII

              Class        Rating                Amount
              -----        ------                ------
              A            AAA           $1,250,000,000
              B            A               $127,583,000
              C            BBB+             $53,160,000
              D            BB               $53,160,000


TACTICA INT'L: U.S. Trustee Wants Case Converted or Dismissed
-------------------------------------------------------------
The U.S. Trustee for Region 2 asks the U.S. Bankruptcy Court for
the Southern District of New York to dismiss or convert to a
chapter 7 liquidation proceeding, the chapter 11 case of Tactica
International Inc.

The U.S. Trustee tells the Court that the case's progress is very
slow.  At the same time, the U.S. Trustee says, the estate keeps
losing money.  Tactica reported an $8.34 million loss for the
period ending April 30, 2005.  High salaries of executives and
bankruptcy professional fees contribute to the loss, according to
Tactica in a regulatory filing.

Joshua J. Angel, Esq., at Angel & Frankel P.C., in a letter
disclosed that the Debtor has defaulted on a $2.25 million DIP
facility provided by its parent company, Igia Inc.  The DIP lender
blames the Debtor's Official Committee of Unsecured Creditors
because it refused to adhere to the terms of the DIP Financing
Agreement.

Headquartered in New York, New York, Tactica International, Inc.,
a wholly owned subsidiary of IGIA, Inc. -- http://www.igia.com/
-- designs, develops and markets personal and home care items
under the IGIA and Singer brands.  Product categories include hair
care, dental care, skin care, sports and exercise, household and
kitchen.  Tactica holds an exclusive license to market a line of
floor care products under the Singer name.  Tactica also owns
rights to the "As Seen On TV" trademark.  The Company filed for
chapter 11 protection on Oct. 21, 2004 (Bankr. S.D.N.Y. Case No.
04-16805).  Timothy W. Walsh, Esq., at Piper Rudnick, LLP,
represents the Debtor in its restructuring effort.  When the
Company filed for protection from its creditors, it reported
assets amounting to $10,568,890 and debts amounting to
$14,311,824.


TEXAS INDUSTRIES: Noteholders Agree to Amend Sr. Debt Indenture
---------------------------------------------------------------
Texas Industries, Inc. (NYSE: TXI) disclosed the receipt of the
requisite consents to adopt the proposed amendments to the
indenture governing the 10-1/4% Senior Notes due 2011.  This
announcement is in connection with the previously announced cash
tender offer and consent solicitation for the Notes.

Accordingly, the supplemental indenture governing the Notes to
effect the proposed amendments has been executed.  Adoption of the
proposed amendments required the consent of holders of at least a
majority of the aggregate principal amount of the outstanding
Notes.  The proposed amendments, however, will become operative
when the Notes are accepted and payment is made pursuant to the
terms of the Offer.

Holders still have until 5:00 p.m., New York City time, on
June 24, 2005, the consent payment deadline, to validly tender
their Notes and receive the total consideration, which includes a
$30.00 per $1,000 principal amount consent payment.  The Offer
remains open and is scheduled to expire at 12:00 midnight, New
York City time, on July 14, 2005, the expiration date, unless
extended or earlier terminated.

Withdrawal rights with respect to the tendered Notes expired today
upon execution of the supplemental indenture.  Accordingly,
holders may not withdraw Notes previously or hereafter tendered,
except as contemplated in the Offer.

TXI intends to use proceeds from contemplated debt financings to
repurchase the Notes pursuant to the Offer.  The Offer is subject
to the satisfaction of certain remaining conditions including the
consummation of new debt financings raising proceeds in an
aggregate amount sufficient to fund the tender and certain other
customary conditions.

The complete terms and conditions of the Offer are described in
the Offer to Purchase and Consent Solicitation Statement dated
June 13, 2005, copies of which may be obtained from D. F. King &
Co., Inc., the information agent for the Offer, at (800) 659-5550
(US toll free) or, for bankers and brokers (212) 269-5550.  Banc
of America Securities LLC is the exclusive dealer manager and
solicitation agent for the Offer.  Additional information
concerning Offer may be obtained by contacting Banc of America
Securities LLC, High Yield Special Products, at (888) 292-0070
(U.S. toll-free) or (704) 388-9217 (collect).

Texas Industries, Inc., is a leading supplier of building
materials, primarily cement and structural steel.  TXI is the
largest supplier of cement in Texas and a major cement supplier in
California.  Structural steel products are distributed throughout
North America.  On December 15, 2004, TXI's Board of Directors
approved a plan to spin off the steel business by means of a tax-
free stock dividend to TXI shareholders.  Upon completion of the
Offer and the requisite debt financings, TXI intends to distribute
the common stock of Chaparral Steel Company to its existing
shareholders as part of a previously announced spin- off
transaction.

                        *     *     *

As reported in the Troubled Company Reporter on June 20, 2005,
Moody's Investors Service has assigned a Ba3 rating to Texas
Industries, Inc.'s $250 million in senior unsecured notes and a
Ba2 rating to the company's new 5-year senior secured credit
facility.  In addition, Moody's has upgraded the company's senior
implied rating to Ba3 from B1 and its $200 million subordinated
convertible trust preferred securities to B2 from B3.  The ratings
outlook has been changed to stable from developing following the
company's announcement earlier this year that it intends to spin
off its steel business, Chaparral Steel Company (B1 senior
unsecured rating).

Ratings affected include:

Texas Industries, Inc.:

Assigned:

   * Ba2 -- $200 million 5-year senior secured credit facility
            due 2010

   * Ba3 -- $250 million senior unsecured notes due 2013

Upgraded:

   * Ba3 from B1 -- senior implied
   * B1 from B2 -- senior unsecured issuer rating

TXI Capital Trust I:

Upgraded:

   * B2 from B3 -- $200 subordinated convertible trust preferred
                   securities.


TEXAS INDUSTRIES: Launching $250 Million Sr. Debt Offering
----------------------------------------------------------
Texas Industries, Inc. (NYSE: TXI) launched an offering for
$250 million of senior notes due 2013.  The offering of the Senior
Notes, which is subject to market availability as well as other
conditions, will be made only to qualified institutional buyers
and outside the United States in compliance with Regulation S.

TXI intends to use the net proceeds from the Senior Notes
offering, together with a cash dividend from wholly owned steel
operations and existing cash to repurchase $600 million in
existing senior notes due 2011.

The Senior Notes have not been registered under the Securities Act
of 1933 or any state securities laws, and may not be offered or
sold in the United States absent registration or an applicable
exemption from the registration requirements of the Securities Act
and state securities laws.  This announcement shall not constitute
an offer to sell or a solicitation of an offer to buy the notes.

Texas Industries, Inc., is a leading supplier of building
materials, primarily cement and structural steel.  TXI is the
largest supplier of cement in Texas and a major cement supplier in
California.  Structural steel products are distributed throughout
North America.  On December 15, 2004, TXI's Board of Directors
approved a plan to spin off the steel business by means of a tax-
free stock dividend to TXI shareholders.  Upon completion of the
Offer and the requisite debt financings, TXI intends to distribute
the common stock of Chaparral Steel Company to its existing
shareholders as part of a previously announced spin- off
transaction.

                        *     *     *

As reported in the Troubled Company Reporter on June 20, 2005,
Moody's Investors Service has assigned a Ba3 rating to Texas
Industries, Inc.'s $250 million in senior unsecured notes and a
Ba2 rating to the company's new 5-year senior secured credit
facility.  In addition, Moody's has upgraded the company's senior
implied rating to Ba3 from B1 and its $200 million subordinated
convertible trust preferred securities to B2 from B3.  The ratings
outlook has been changed to stable from developing following the
company's announcement earlier this year that it intends to spin
off its steel business, Chaparral Steel Company (B1 senior
unsecured rating).

Ratings affected include:

Texas Industries, Inc.:

Assigned:

   * Ba2 -- $200 million 5-year senior secured credit facility
            due 2010

   * Ba3 -- $250 million senior unsecured notes due 2013

Upgraded:

   * Ba3 from B1 -- senior implied
   * B1 from B2 -- senior unsecured issuer rating

TXI Capital Trust I:

Upgraded:

   * B2 from B3 -- $200 subordinated convertible trust preferred
                   securities.


TEXAS INDUSTRIES: Subsidiary Launches $300 Mil. Sr. Debt Offering
-----------------------------------------------------------------
Texas Industries, Inc. (NYSE: TXI) disclosed that its wholly owned
steel business, Chaparral Steel Company, has launched an offering
for $300 million of senior notes.  The offering will consist of
floating and fixed rate notes due 2012 and 2013, respectively.
The offering of the Senior Notes, which is subject to market
availability as well as other conditions, will be made only to
qualified institutional buyers and outside the United States in
compliance with Regulation S.

Chaparral Steel Company intends to use the net proceeds from the
Senior Notes offering and borrowings under a new senior secured
revolving credit facility to pay a cash dividend of approximately
$341 million to TXI in connection with the proposed spin-off of
Chaparral Steel Company to TXI's shareholders.

The Senior Notes have not been registered under the Securities Act
of 1933 or any state securities laws, and may not be offered or
sold in the United States absent registration or an applicable
exemption from the registration requirements of the Securities Act
and state securities laws.  This announcement shall not constitute
an offer to sell or a solicitation of an offer to buy the notes.

Texas Industries, Inc., is a leading supplier of building
materials, primarily cement and structural steel.  TXI is the
largest supplier of cement in Texas and a major cement supplier in
California.  Structural steel products are distributed throughout
North America.  On December 15, 2004, TXI's Board of Directors
approved a plan to spin off the steel business by means of a tax-
free stock dividend to TXI shareholders.  Upon completion of the
Offer and the requisite debt financings, TXI intends to distribute
the common stock of Chaparral Steel Company to its existing
shareholders as part of a previously announced spin- off
transaction.

                        *     *     *

As reported in the Troubled Company Reporter on June 20, 2005,
Moody's Investors Service has assigned a Ba3 rating to Texas
Industries, Inc.'s $250 million in senior unsecured notes and a
Ba2 rating to the company's new 5-year senior secured credit
facility.  In addition, Moody's has upgraded the company's senior
implied rating to Ba3 from B1 and its $200 million subordinated
convertible trust preferred securities to B2 from B3.  The ratings
outlook has been changed to stable from developing following the
company's announcement earlier this year that it intends to spin
off its steel business, Chaparral Steel Company (B1 senior
unsecured rating).

Ratings affected include:

Texas Industries, Inc.:

Assigned:

   * Ba2 -- $200 million 5-year senior secured credit facility
            due 2010

   * Ba3 -- $250 million senior unsecured notes due 2013

Upgraded:

   * Ba3 from B1 -- senior implied
   * B1 from B2 -- senior unsecured issuer rating

TXI Capital Trust I:

Upgraded:

   * B2 from B3 -- $200 subordinated convertible trust preferred
                   securities.


TONY COURY: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Tony M. Coury Jr. & Marie C. Coury
        2151 East Hackamore
        Mesa, Arizona 85203

Bankruptcy Case No.: 05-11458

Chapter 11 Petition Date: June 23, 2005

Court: District of Arizona

Debtors' Counsel: Robert J. Berens, Esq.
                  Mann, Berens & Wisner, LLP
                  2929 North Central Avenue, #1600
                  Phoenix, Arizona 85012-2760
                  Tel: (602) 258-6200
                  Fax: (602) 258-6212

Estimated Assets: $500,000 to $1 Million

Estimated Debts:  $1 Million to $10 Million

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


TORONTO-DOMINION: Fitch Holds Individual Rating at B
----------------------------------------------------
Fitch Ratings has affirmed the ratings for Toronto-Dominion Bank
(TD, 'AA-/F1+' by Fitch) and its principal subsidiaries.  TD's
Rating Outlook remains Stable.  These rating actions follow
Wednesday's announcement that TD Waterhouse U.S.A. will be
acquired by Ameritrade Holding Corporation, with TD holding a
39.9% ownership stake in the combined entity to be rebranded TD
Ameritrade.

As currently structured, the announced transaction would result in
TD holding 39.9% of TD Ameritrade common stock and having five of
the company's 12 board seats.  TD would have preemptive rights on
the future sale of TD Ameritrade shares but would be subject to a
39.9% cap on its ownership over the next three years and 45% over
the next 10 years.  While the announced agreement details a
minority position for TD in terms of common stock ownership and
board representation, Fitch considers TD's proposed investment to
be substantial.  This level of investment, along with the fact
that TD's name will be associated with the combined entity,
supports Fitch's view that TD would likely feel compelled to
provide ongoing financial support for TD Ameritrade, should it be
needed.  Fitch also believes reputational risk factors at TD
Ameritrade could flow back to TD should they arise.

Strategically, Fitch believes the transaction has merit.  Scale is
essential to profitability in the discount brokerage industry, and
the combined entity would drive a larger customer account base
through a trading platform that exhibits strong profit margins.
TD will not sell TD Waterhouse Canada as this business and
customer base is closely tied to its other domestic wealth
management business lines.  In fact, TD expects to acquire AMTD's
Canadian customer base.

Fitch expects that the proposed transaction would have slightly
net positive impact on tangible capital levels.  TD's capital
levels, which had strengthened over the past two years, were
negatively affected by the March 1, 2005 acquisition of 51% of
Banknorth Group, Inc. Tangible common equity was reduced from
2.32% of tangible assets at Jan. 31, 2005 to 1.45% of tangible
assets at April 30, 2005.

Despite a slight positive impact on TCE/TA, Fitch anticipates that
the proposed transaction would have a modest negative impact on
total risk-based capital and a modest positive impact on tier 1
risk-based capital.  Nonetheless, Fitch expects that TD will
continue to strengthen capital levels in the intermediate term so
that levels begin to approach those of TD's peers and provide
ongoing support for TD's current ratings.

TD's ratings reflect its solid retail franchise in Canada, good
revenue diversification, and much improved asset quality.  TD is
the second largest bank in Canada and holds a 21% share of
personal deposits in Canada.  Over the past two years, TD has
significantly improved its credit risk profile and enhanced its
credit risk management practices.  As of April 30, 2005, gross
impaired loans totaled just C$482 million or 32 basis points of
loans.  The loan loss reserve covers GILs nearly three times.

These ratings for Toronto-Dominion Bank and related entities are
affirmed with a Stable Rating Outlook:

   Toronto-Dominion Bank

     -- Senior long-term 'AA-';
     -- Subordinated debt 'A+';
     -- Preferred stock 'A+';
     -- Short-term rating 'F1+';
     -- Individual rating 'B';
     -- Support '1'.

   TD Capital Trust I
   TD Capital Trust II

     -- Preferred stock 'A+'.


TRI-COUNTY HAMPSHIRE: Case Summary & 11 Largest Unsec. Creditors
----------------------------------------------------------------
Debtor: The Tri-County Hampshire House Hotel LLC
        fdba Commonwealth Hotel LLC
        30 Tri-County Parkway
        Cincinnati, Ohio 45246

Bankruptcy Case No.: 05-15209

Type of Business: The Debtor operates a hotel in Cincinnati, Ohio.
                  See http://www.hampshirehousehotel.com/

Chapter 11 Petition Date: June 22, 2005

Court: Southern District of Ohio (Cincinnati)

Debtor's Counsel: Norman L. Slutsky, Esq.
                  Slutsky & Slutsky Co. LPA
                  4153 U Crossgate Drive
                  Cincinnati, Ohio 45236
                  Tel: (513) 793-5560

Estimated Assets: $0 to $50,000

Estimated Debts:  $1 Million to Million

Debtor's 11 Largest Unsecured Creditors:

   Entity                       Nature of Claim     Claim Amount
   ------                       ---------------     ------------
Hamilton County Administrator                           $400,000
County Adminstration Building,
Room 607
138 East Court Street
Cincinnati, OH 45202

National City Bank                                       $70,000
632 Vine Street
Cincinnati, OH 45202

PNC Bank                                                 $35,000
201 East Fifth Street
Cincinnati, OH 45202

Ohio Department of Taxation     Sales tax                $35,000
Bankruptcy Division
P.O. Box 530
Columbus, OH 43266

Cincinnati Water Works                                   $22,000
Department 1845
Cincinnati, OH 45274

Midamerica Energy                                        $15,434
P.O. Box 8020
Davenport, IA 52808

Ohio Bureau of Workers'                                  $15,000
Compensation
Attn: Law SectionBankruptcy
Unit
P.O. Box 15567
Columbus, OH 43215

Guest Distribution                                       $10,524
P.O. Box 824700
Philadelphia, PA 19182

Cinergy                         Service                   $8,000
P.O. Box 960
Cincinnati, OH 45201

Internal Revenue Service        941 taxes                 $8,000
Insolvency
P.O. Box 1579
Cincinnati, OH 45201

National Fidelity                                         $2,377
14962 Bear Valley Road
Victorville, CA 92395


TRANSCOM ENHANCED: Wants DIP Facility Increased by $400,000
-----------------------------------------------------------
Transcom Enhanced Services, LLC, asks the U.S. Bankruptcy Court
for the Northern District of Texas, Dallas Division, for authority
to borrow up to an additional $400,000 from First Capital Group of
Texas III, LP, increasing its total available post-petition line
of credit to $1,250,000.

The Debtor discloses that it needs access to post-petition
financing to meet short-term cash obligations.  The additional
$400,000 will be used to pay ordinary course of business expenses.
The new loan under the enlarged line of credit will accrue
interest at 10% annually.

The Debtor says that the proposed financing is necessary to avoid
immediate and irreparable harm to its estate.  The additional
funds will ensure that the Debtor's business will continue as a
going concern and will facilitate its proposed reorganization.

First Capital, a private investment firm that provides equity
capital to companies throughout Texas and the Southwest, holds a
first priority lien on all of the Debtor's assets pursuant to a
$2,200,000 pre-petition loan agreement dated May 25, 2004.

First Capital also holds a minority equity interest in the Debtor
consisting of one-half of the outstanding voting preferred stock
of Transcom Holdings, Inc., Transcom Enhanced's parent company.
First Capital also holds warrants entitling it to purchase up to
17.5% of Transcom Holding's common stock if the pre-petition loan
is not paid on time.

Headquartered in Irving, Texas, Transcom Enhanced Services --
http://www.transcomus.com/-- specializes in the modification of
the form and content of telephone calls and other communications
to improve bandwidth efficiency, reduce costs and facilitate the
development and provision of advanced applications.  Established
in 2003, TES uses state-of-the-art technology and a secure,
privately managed packet-switched network to deliver cost-
effective custom voice-over-IP solutions and converged IP
applications to carriers and enterprise customers all over the
world.  The Company filed for chapter 11 protection on Feb. 18,
2005 (Bankr. N.D. Tex. Case No. 05-31929).  John Mark Chevallier,
Esq., at McGuire, Craddock & Strother represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it estimated between $1 million to $10 million in
total assets and debts.


TRANSCOM ENHANCED: Wants Exclusive Periods Extended
---------------------------------------------------
Transcom Enhanced Services asks the U.S. Bankruptcy Court for the
Northern District of Texas, Dallas Division, to extend until
October 16, 2005, the time within which it has the exclusive right
to file a plan of reorganization and disclosure statement.  The
Debtor also wants the Court to extend the exclusive period to
solicit plan acceptances through December 15, 2005.

The Debtor says that it has been unable to develop a
reorganization plan since it has spent substantial time dealing
with operational issues caused by its dispute with SBC
Communications, Inc. and AT&T Corp.

AT&T's decision to suspend services led to the Debtor's bankruptcy
filing on February 18, 2005.  AT&T suspended its service after SBC
Communications claimed that the Debtor was operating unlawfully
because it was not subject to the Federal Communications
Commission's Enhanced Service Provider exemption and should pay
universal access charges.

The Debtor contends that it is exempted from the fees because it
not a common carrier providing telecommunications services.  The
Debtor maintains that it is an enhanced services provider that
modifies the content of telephone calls to improve bandwidth
efficiency and reduce costs.

As reported in the Troubled Company reporter on May 13, 2005, the
Bankruptcy Court affirmed the Debtor's status as an enhanced
services provider.  The ruling paves the way for the Debtor to
resume its service agreement with AT&T and gives Transcom the
validation it needs to continue doing business.

Headquartered in Irving, Texas, Transcom Enhanced Services --
http://www.transcomus.com/-- specializes in the modification of
the form and content of telephone calls and other communications
to improve bandwidth efficiency, reduce costs and facilitate the
development and provision of advanced applications.  Established
in 2003, TES uses state-of-the-art technology and a secure,
privately managed packet-switched network to deliver cost-
effective custom voice-over-IP solutions and converged IP
applications to carriers and enterprise customers all over the
world.  The Company filed for chapter 11 protection on Feb. 18,
2005 (Bankr. N.D. Tex. Case No. 05-31929).  John Mark Chevallier,
Esq., at McGuire, Craddock & Strother represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it estimated between $1 million to $10 million in
total assets and debts.


TROPICAL SPORTSWEAR: Wants Customs' Claims Estimated at $0
----------------------------------------------------------
Tropical Sportswear Int'l Corp. and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Middle District of Florida to
estimate claim nos. 296 and 297 filed by the United States Customs
and Border Protection at $0 for purposes of determining reserves
required under the Debtors' Amended Joint Chapter 11 Plan of
Liquidation of Debtors, as modified.

The Liquidation Plan provides for the establishment of the
Disputed Claims Reserve Account.  The Liquidating Trustee
administers the Account.  Holders of dispute claims will get their
recovery form the Account after their disputes are resolved and
their claims are allowed.

The Debtors intend to begin making distributions under the Plan in
July 2005.

                       The Customs' Claims

Before the Debtors filed their bankruptcy petitions, Customs
required a customs bond from Westchester Fire Insurance Company,
as customs bond agent.  The customs bond is secured by a $5.3
million standby letter of credit issued under the Debtors'
prepetition secured financing facility.  The policy was in light
of the substantial international import business necessary for the
Debtors' day-to-day operation.  During the Debtors' chapter 11
cases, because the letter of credit securing the customs bond was
due to expire and was not replaced, Westchester Fire drew the full
amount available under the letter of credit.  Consequently,
Westchester Fire currently holds $5.3 million of the Debtors'
cash.

Under the Plan, Westchester Fire is authorized to use the cash of
the Debtors in its possession to pay the Debtors' obligations
under the customs bond, if any, and will be required to return any
remaining cash to the Liquidating Trustee.

As of February 26, 2005, the Debtors ceased all import activities.

On June 3, 2005, Customs filed Claim Number 296 as an
unliquidated, contingent priority and unsecured claim for customs
duties, fees and other charges.  On that same date, Customs filed
Claim Number 297 as an unliquidated, contingent priority claim for
customs duties, fees and other charges.

On June 10, 2005, the Debtors objected to the Claims, asserting
that there is no amount owed to Customs for unpaid customs duties.
Furthermore, the Customs claims are covered by the customs bond
pursuant to which Westchester Fire holds cash sufficient to pay
any potential claims.

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.


TWINLAB CORP: Ephedra Panel Hires Brown Rudnick as Counsel
----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave the Official Committee of Ephedra Claimants of Twinlab
Corporation and its debtor-affiliates permission to employ Brown
Rudnick Berlack Israels LLP as its counsel.

The Ephedra Claimants Committee explains that it retained Brown
Rudnick as its counsel as a replacement for its previous counsel,
Buchanan Ingersoll, PC.

Brown Rudnick will:

   a) advise the Committee with respect to its rights, duties and
      powers in the Debtors' chapter 11 cases;

   b) prepare for the Committee all necessary applications,
      motions, answers, memoranda, orders, reports and other legal
      papers in support of positions taken by the Committee;

   c) appear in Court and at various meetings to represent the
      interests of the Ephedra Claimants Committee and attend
      meetings and negotiate with the representatives of the
      Debtors, the Official Committee of Unsecured Creditors and
      other parties-in-interest;

   d) protect the Committee's interest with respect to
      confirmation and consummation of the First Amended Joint
      Plan of Liquidation filed by the Debtors on May 25, 2005;

   e) develop and negotiate the procedures to govern the allowance
      of claims of Ephedra claimants and the distribution of
      proceeds to Ephedra claimants in accordance with provisions
      of the Amended Joint Plan;

   f) develop and negotiate the procedural structure of an
      appropriate trial on causation, if necessary, and
      participate in that trial solely to insure that the
      approved procedures are followed and not modified without
      the participation of the Committee; and

   g) perform all other legal services for the Committee in
      connection with the Debtors' chapter 11 cases and in
      accordance with the scope of the Committee's duties as
      required under the Bankruptcy Code and the Bankruptcy Rules.

David J. Molton, Esq., and John Biedermann, Esq., are the lead
attorneys for the Ephedra Committee.  Mr. Molton charges $550 per
hour for his services, while Mr. Biedermann charges $515 per hour.

Mr. Molton reports Brown Rudnick's professionals bill:

      Designation        Hourly Rate
      -----------        -----------
      Partners           $375 - $700
      Associate          $135 - $440
      Paralegals         $165 - $230
      Other Staff         $85 - $195

Brown Rudnick assures the Court that it does not represent any
interest materially adverse to the Ephedra Claimants Committee,
the Debtors or their estates.

Headquartered in Hauppauge, New York, Twinlab Corporation --
http://www.twinlab.com/-- (n/k/a TL Administration Corporation),
is a leading manufacturer and marketer of high quality, science-
based, nutritional supplements, including a complete line of
vitamins, minerals, nutraceuticals, herbs and sports nutrition
products. The Company and its debtor-affiliates filed for chapter
11 protection on Sept. 4, 2003 (Bankr. S.D.N.Y. Case No. 03-
15564).  Michael P. Kessler, Esq., at Weil, Gotshal & Manges, LLP
represents the Debtors in their restructuring efforts.


TWINLAB CORP: Amended Plan Confirmation Hearing Set for July 21
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
will convene a hearing at 2:00 p.m., on July 21, 2005, to consider
confirmation of the First Amended Joint Plan of Liquidation filed
by Twinlab Corporation (n/k/a TL Administration Corporation), and
its debtor-affiliates.

The Court approved the adequacy of the Debtors' First Amended
Disclosure Statement explaining the Amended Joint Plan on June 3,
2005.  The Debtors are now authorized to send copies of the
Amended Disclosure Statement and Amended Joint Plan to creditors
and solicit their votes in favor of the Plan.

On the Effective Date of the Plan, the Debtors will be
consolidated for distribution purposes in accordance with the
Plan.  The Debtors and the Official Committee of Unsecured
Creditors will designate a Plan Administrator who will implement
the terms of the Plan with respect to the consolidated Debtors.

The powers and duties of the Plan Administrator include
administering and liquidating the assets of the Debtors, and he
can also object to, seek to subordinate, compromise, or settle any
or all Claims against the Debtors except those Claims that are the
responsibility of the Ephedra Personal Injury Trust.  The
Creditors Committee will have the exclusive right to continue to
litigate, compromise, or settle any litigation commenced by the
Committee on behalf of the Debtors prior to the Effective Date.

The Plan groups claims and interests into seven classes.

Unimpaired claims consist of:

   1) Secured Claims will receive either:

        (i) Cash in an amount equal to 100% of the unpaid amount
            of those Allowed Secured Claims,

       (ii) the proceeds of the sale or disposition of
            the collateral securing those Allowed Secured Claims
            to the extent of the value of those holders' secured
            interest in the Allowed Secured Claims, net of the
            costs of disposition of that collateral,

      (iii) the collateral securing those Allowed Secured
            Claims,

        iv) treatment that leaves unaltered the legal,
            equitable, and contractual rights to which the
            holder of those Allowed Secured Claims are
            entitled, or

        (v) other distribution or treatment necessary to satisfy
            the requirements of the Bankruptcy Code for
            classifying a Class of Secured Claims as unimpaired.

   2) Priority Non-Tax Claims will receive, in full satisfaction
      of those Claims, an amount in Cash equal to the Allowed
      amount of those Claims; and

   3) Pre-2002 Ephedra PI Claims will be satisfied in full in the
      ordinary course of business from the proceeds of the
      Debtors' applicable insurance policy or policies, as the
      case may be, until the time a Pre-2002 Ephedra PI Claim
      becomes an Allowed Claim.

Impaired claims consist of:

   1) 2002-2004 Ephedra PI Claims paid pursuant to the terms,
      provisions, and procedures of the Ephedra Personal Injury
      Trust Agreement as described under the Plan.  The Ephedra
      Personal Injury Trust will assume full responsibility for
      determining the Allowed amount of all 2002-2004 Ephedra PI
      Claims pursuant to the Ephedra Personal Injury Trust
      Agreement and for making payments on account of 2002-2004
      Ephedra Claims that become Allowed Claims in accordance with
      conditions of the Ephedra Personal Injury Trust Agreement;

   2) General Unsecured Claims with an approximate amount of
      $170,000,000, will be further reduced to approximately
      $68,300,000 or less upon the Debtors' completion of the
      claims resolution process, in accordance with Section 5.1 of
      the Plan, which provides that the aggregate amount of those
      claims will not exceed $68,300,000.  Holders of Allowed
      General Unsecured Claims will receive their Pro Rata
      Share of Available Cash until those Claims have been paid in
      full;

   3) Punitive Damage Claims, to the extent any Allowed Punitive
      Damage Claims exist, will be subordinated in full to the
      Claims in Class 1, Class 2, Class 3, Class 4, and Class 5
      and will receive no distribution under the Plan; and

   4) Equity Interests will be canceled on or after the Effective
      Date, at which time one new share of Holdings common stock
      will be issued to the Plan Administrator who will hold that
      share as custodian for the benefit of holders of Equity
      Interests consistent with their former economic entitlement.
      Those holders' beneficial interests in the share of new
      common stock will be non-certified and nontransferable.

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

    http://www.researcharchives.com/bin/download?id=050623023956

All ballots must be returned by July 14, 2005, to the Debtors'
voting agent:

             TL Administration Corporation
             (f/k/a Twinlab Corporation)
                   c/o BSI-FBG
             757 Third Avenue, 3rd Floor
             New York, New York 10017
             Tel: 646-282-2500

Objections to the Amended Plan, if any, must be filed and served
by July 14, 2005.

Headquartered in Hauppauge, New York, Twinlab Corporation --
http://www.twinlab.com/-- (n/k/a TL Administration Corporation),
is a leading manufacturer and marketer of high quality, science-
based, nutritional supplements, including a complete line of
vitamins, minerals, nutraceuticals, herbs and sports nutrition
products. The Company and its debtor-affiliates filed for chapter
11 protection on Sept. 4, 2003 (Bankr. S.D.N.Y. Case No. 03-
15564).  Michael P. Kessler, Esq., at Weil, Gotshal & Manges, LLP
represents the Debtors in their restructuring efforts.


UNITED BISCUITS: Poor 2004 Results Cue Fitch to Junk Ratings
------------------------------------------------------------
Fitch Ratings, the international rating agency, downgraded United
Biscuits Finance's senior subordinated notes to 'CCC+' from 'B-'
(B minus).  At the same time, the agency has downgraded
Regentrealm Limited's - a subsidiary of UB - Senior Unsecured
rating to 'B-' (B minus) from 'B' and its senior secured debt to
'BB-' (BB minus) from 'BB'.  The Outlook has been changed to
Negative from Stable.

The rating actions follow the publication of very disappointing
results for FY04, with a 13.9% decrease in underlying EBITDA if
the contribution of Jacob's and Triunfo is deducted.  This trend
was not reversed in Q105.  Of particular concern is the limited
cash flow generation, primarily driven by decreasing like-for-like
profit generation from the core UK operations.

"This is the second downgrade since the announcement of the
Jacob's acquisition of last summer.  United Biscuits seems to
suffer from a structural inability to improve profit margins
notwithstanding having spent in excess of GBP130 million on cost-
cutting initiatives in the past four years.  Should this trend
continue in 2005, UB may struggle to generate sufficient cash flow
to meet debt repayment obligations in FY06 and FY07, hence the
downgrade and Negative Outlook" says Stefano Podesta, Director in
Fitch's Leverage Finance team in London.

In Fitch's view, UB's decision to expand operations in the hyper-
competitive UK market by acquiring Jacob's may not deliver
increased combined profit, as savings from cost synergies are
likely to be offset by continuing pricing pressure from UK
retailers.  UB's brands are seemingly unable to command a
sufficient price premium in the current market environment.  It is
only in Southern European markets, primarily Spain and Portugal,
that UB has been able to extract higher margins from cost
synergies.

Although UB prepaid some GBP20m of senior debt in Q105 using cash
available on balance sheet, an increasingly steep amortization
profile starting from FY06 requires a step change in cash flow
generation which, at present, seems very difficult to achieve.  In
the absence of another refinancing and large disposal or an IPO,
investors are reliant on a structural improvement in the cash flow
generation of the business. Given the company's track record in
this area this seems quite a challenging task.


US AIRWAYS: DoJ Completes Review of America West Merger
-------------------------------------------------------
The U.S. Department of Justice that the Department has completed
its review of the proposed merger of America West Holdings Corp.
(NYSE: AWA) and US Airways Group Inc. (OTC Bulletin Board: UAIRQ).
The waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 expired at midnight last night without a
formal request from the Department for additional information.

On May 19, 2005, America West and US Airways announced an
agreement to merge and create the first full-service nationwide
airline, with a consumer-friendly pricing structure offering a
network of low-fare service to more than 200 cities across the
U.S., Canada, Mexico, Latin America, the Caribbean and Europe, and
amenities that include a robust frequent flyer program, airport
clubs, assigned seating and First Class cabin service.  The
airlines will operate under the US Airways brand.

When completed, the merger will be anchored by $500 million in new
equity investment that has already been announced, as well as
other potential equity and financing sources still under
negotiation, and participation by suppliers and business partners
that will provide the company with more than $1.5 billion in cash
at the time of the transactions closing.

The merger remains subject to other approvals, including America
West shareholders, US Airways creditors and the U.S. Bankruptcy
Court, the Securities and Exchange Commission, the U.S. Department
of Transportation and the Air Transportation Stabilization Board.

                       About America West

America West Holdings Corporation is an aviation and travel
services company. Wholly owned subsidiary America West Airlines,
Inc. is the nation's second largest low-fare airline and the only
carrier formed since deregulation to achieve major airline status.
America West's 14,000 employees serve nearly 60,000 customers a
day in 96 destinations in the U.S., Canada, Mexico and Costa Rica.
(AWAG)

                        About US Airways

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: Proceeds with Aircraft Sale to Republic Airways
-----------------------------------------------------------
US Airways Group Inc. confirmed that it will proceed with plans to
sell certain Embraer regional jet aircraft and slot assets to
Republic Airways Holdings.  The asset sale will generate
approximately $100 million in liquidity for US Airways as it
completes its Chapter 11 restructuring and eventual merger with
America West Airlines.  The regional jets and the slots will
continue to operate as US Airways Express.

US Airways disclosed in March 2005 a multi-part agreement with
Republic Airways and its affiliated Wexford Capital, LLC, to sell
certain assets, and to enter into an agreement whereby
Republic/Wexford could be an equity investor in the US Airways
Chapter 11 restructuring.  Since that time, the US Airways-America
West merger has been announced, the US Airways business plan has
changed, and other equity participants have committed to invest in
the merged companies.  Subsequently, US Airways notified
Republic/Wexford that it does not intend to request
Republic/Wexford to purchase the new common stock to be issued in
connection with the reorganization and merger, per the agreement,
but it does wish to proceed with the asset sale.

Under the terms of the asset sale agreement, Republic will
purchase or assume the leases of 28 Embraer 170 aircraft from US
Airways, and will operate them in the US Airways network under a
regional jet service agreement that has been negotiated and
approved by the U.S. Bankruptcy Court for the Eastern District of
Virginia.  Until Republic receives its operating certificate from
the FAA, which is expected Sept. 1, 2005, US Airways will lease
the aircraft back from Republic and continue operating them.

Other Embraer 170 assets, including a flight simulator, spare
parts, and certain facilities to support the aircraft operations,
are also part of the transaction.  In addition, US Airways will
sell, and then lease back from Republic, 113 commuter slots at
Ronald Reagan Washington National Airport, and 24 commuter slots
at New York LaGuardia Airport.  US Airways continues to hold the
right to repurchase the slots anytime after the second anniversary
of the slot sale/leaseback transaction.

"Republic Airways has been an outstanding partner, and we look
forward to this expanded relationship," said Bruce Ashby, US
Airways executive vice president -- marketing and planning.  "Our
customers love the comfort of the Embraer 170 aircraft, and this
asset sale transaction allows them to remain in our US Airways
Express network while providing us with enhanced liquidity as we
complete our restructuring and implement the America West merger."

The asset sale transaction will generate approximately
$100 million in cash that has already been identified as a source
of additional liquidity during the US Airways restructuring.  With
today's notification, Republic is expected to begin the process of
taking the first Embraer aircraft this summer, and then placing
all 28 aircraft on its operating certificate by mid- 2006.  US
Airways and Republic remain in discussions about additional
70- and 90-seat regional jets that might be added to the US
Airways Express fleet in future years.

"Republic Airways looks forward to its expanded role with US
Airways.  The addition of the Embraer 170's under the US Airways
Express brand is a very positive development for our employees and
shareholders," said Bryan Bedford, Chairman, President and CEO of
Republic Airways Holdings.

Republic Airways Holdings, based in Indianapolis, Indiana, is an
airline holding company that operates Chautauqua Airlines,
Republic Airlines and Shuttle America.  The company offers
scheduled passenger service on more than 800 flights daily to 82
cities in 32 states, Canada and the Bahamas through airline
services agreements with four major U.S. airlines.  All of its
flights are operated under its major airline partner brand, such
as AmericanConnection, Delta Connection, United Express and US
Airways Express.  The airline currently employs more than 2,900
aviation professionals and operates 123 aircraft including 23
Embraer 170 aircraft.

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.


USG CORP: New York Tax Authority Demands Payment of Tax Debts
-------------------------------------------------------------
The Bankruptcy Section of the New York State Department of
Taxation and Finance seeks payment of administrative expense tax
liabilities totaling over $300,000 incurred by USG Corporation and
its debtor-affiliates.

For the period from December 26, 2004, to February 28, 2005, L&W
Supply Corporation is required to pay administrative expenses for
withholding and sales taxes aggregating $72,283.

United States Gypsum Company is also required to pay a total of
$317,926 for tax liabilities incurred from August 31, 2002, to
February 28, 2005.

Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes.  The Company filed
for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No.
01-02094).  David G. Heiman, Esq., and Paul E. Harner, Esq., at
Jones Day represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts. (USG
Bankruptcy News, Issue No. 89; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


VARIG S.A.: Ends Acquisition Talks with TAP Air Portugal
--------------------------------------------------------
Negotiations between FRB-Par Investimentos S.A., the parent
company of VARIG, S.A., and TAP Air Portugal regarding TAP's
purchase of a 20% stake in VARIG had ended, Omar Carneiro da
Cunha, vice president of VARIG, S.A.'s board of directors,
confirmed in an interview with Dow Jones Newswires.

FRB-Par signed a memorandum of understanding with TAP, SGPS, S.A.
in May 2005 for the purpose of conducting negotiations aimed at
the direct or indirect capitalization of VARIG and two other
units, VARIG Participacoes em Transportes Aereos S.A. and VARIG
Participacoes em Servicos Complementares S.A.

Reuters reports that VARIG President David Zylbersztajn said the
"old model for a partnership with TAP does not make sense anymore,
but we will continue talking on different terms, with them and
others."

TAP Chief Executive Fernando Pinto has expressed in an internal
communication with employees that the Portuguese air carrier is
still interested in reaching a partnership deal with VARIG,
Reuters says.

A participation of up to 20% of VARIG's capital is the maximum
allowed by the Brazilian legislation.

Vicente Cervo, the foreign representative appointed in Varig,
S.A., and its debtor-affiliates' Brazilian bankruptcy proceedings,
filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case
Nos. 05-14400 and 05-14402).  Rick B. Antonoff, Esq., at Pillsbury
Winthrop Shaw Pittman LLP represents Mr. Cervo in the United
States and Sergio Bermudes, Esq., in Brazil.  As of March 31,
2005, the Debtors reported BRL2,979,309,000 in total assets and
BRL9,474,930,000 in total debts. (Varig Bankruptcy News, Issue No.
02; Bankruptcy Creditors' Service, Inc., 215/945-7000)


VISTEON CORP: S&P Retains Watch Until Ford Agreement Completion
---------------------------------------------------------------
Standard & Poor's Ratings Services 'B-' corporate credit rating on
Visteon Corp. remains on CreditWatch with positive implications,
where it was placed on May 25, 2005.  The rating will be raised to
'B+' and removed from CreditWatch following the pending completion
of various agreements with Ford Motor Co. (BB+/Negative/B-1) that
will improve Visteon's competitive position and strengthen its
earnings and cash flow.  The ratings outlook will be negative.

The structural changes to Visteon's operations as provided for in
a memorandum of understanding with Ford are expected to be
finalized with firm agreements by Sept. 30, 2005.  Van Buren
Township, Michigan-based Visteon, a manufacturer of automotive
components, has total debt of about $2.2 billion.

The 'B-' senior unsecured debt rating also remains on CreditWatch,
but we expect to affirm the rating after the corporate credit
rating is raised.  The senior unsecured rating will be two notches
below the corporate credit rating because of Visteon's planned
increase in secured debt and the pending transfer of the majority
of assets held by Visteon Corp., the issuer of the senior
unsecured debt, to a Ford-managed entity.  The bonds will be
structurally subordinated to the liabilities of Visteon's
operating subsidiaries.

"Visteon's business and financial profiles will improve when the
provisions of the MOU are put in place," said Standard & Poor's
credit analyst Martin King.  "The company will shed some of its
weakest businesses units, which are generating large losses and
absorbing substantial cash flow, leaving it with a more
competitively positioned and faster growing portfolio of
products."

Nevertheless, Visteon will face considerable business challenges,
including:

    * its continued high concentration of sales to Ford (50%),
      which is losing market share in the U.S.; unprofitable
      operations in North America;

    * the need to reduce overhead costs in line with the smaller
      size of the company and to restructure certain
      underperforming manufacturing operations; and

    * the intense challenges of the global automotive supply
      industry, characterized by tough competition and cyclical
      demand.

Visteon's financials will improve following the completion of
final agreements with Ford as operating losses decline, enhancing
profitability metrics and cash flow protection measures. But the
company will continue to have a heavy debt load relative to its
cash flow generation, and large underfunded employee benefit
liabilities.

After the corporate credit rating is raised the outlook will be
negative.  Visteon will continue to face challenges from an
uncertain market and Ford's poor market share performance in
recent years.  Management will be challenged to restructure poorly
performing operations while also continuing to win new business
from a diverse group of customers in a highly competitive
environment.  The rating could be lowered if Visteon fails to
report positive pre-tax profits and free cash flow during the next
two years.  On the other hand, the outlook could be revised to
stable if the company is successful in its restructuring and
customer diversification efforts.


WESTPOINT STEVENS: Aretex LLC Asks Court to Deny Credit Bidding
---------------------------------------------------------------
As previously reported, WestPoint Stevens, Inc. and its debtor-
affiliates have commenced an auction process to sell substantially
all of their assets free and clear of liens, either pursuant to a
plan of reorganization or pursuant to Section 363 of the
Bankruptcy Code.  Prior to the implementation of the Court-
approved bidding procedures, the Debtors received at least two
proposals.  One came from New Textile, jointly sponsored by W.L.
Ross and the Steering Committee under the First Lien Credit
Agreement.  The Steering Committee comprise of Contrarian Funds,
LLC, Satellite Senior Income Fund, LLC, CP Capital Investments,
LLC, Wayland Distressed Opportunities Fund I-B, LLC, and Wayland
Distressed Opportunities Fund I-C, LLC.

Under the New Textile proposal, the Steering Committee, which
holds more than 51% of the First Lien Indebtedness, agreed to
direct Beal Bank, S.S.B. the administrative agent and collateral
trustee, to credit bid for the Assets and to direct the First Lien
Collateral Trustee to transfer the Assets to New Textile in
exchange for equity interest in and rights to acquire additional
equity interests in New Textile.  The securities received by the
Collateral Trustee would be distributed to the First Lien
Lenders.

The other proposal came from two affiliates of Aretex LLP -- WS
Textile Co., Inc., and Textile Co., Inc.  Aretex alleges to be a
holder of 52% of the Second Lien Indebtedness and about 40% of the
First Lien Indebtedness.  Under the Aretex proposal, WS Textile
offered to purchase the Assets in exchange for securities issued
by the indirect parent of a newly formed entity.

                        *    *    *

Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal LLP, in
New York, argues that the Steering Committee, in a blatant effort
to rig the outcome of the auction process in its favor, seeks to
interpose obstacles to the bids of Aretex and third parties.  The
Steering Committee alleges that it, and it alone, has an
"unconditional" and "absolute" right to credit bid the entire
amount of the First Lien Debt, notwithstanding loan documents that
expressly preclude independent action by any lender, which would
affect the nature of and recovery on the First Lien Debt, without
the consent of all lenders.

Mr. Wolfson contends that credit bidding is not authorized by the
underlying documents and, given the deliberately limited powers of
the First Lien Agent, the ability to credit bid the debt without
the unanimous consent of the First Lien Lenders can not be
implied.  Furthermore, the Bankruptcy Code does not provide it
with an "unconditional," "absolute" right to credit bid.

According to Mr. Wolfson, it is particularly outrageous that the
Steering Committee purports to bid Aretex's 40% interest in the
First Lien Debt without its consent.  This effort is without
precedent, has no basis in law, equity or the loan documents, and
is essentially an effort by the Steering Committee to take the
property of Aretex without its consent in a manner that Aretex
views as little more than common theft.

Mr. Wolfson further notes that the Steering Committee proposes to
limit competing bids to all cash, despite the fact that its own
bid is not all cash and would provide Aretex, also a First Lien
Lender, with equity in an acquisition company that the Steering
Committee intends to control.  The Steering Committee asserts that
it will not consent to any bid that fails to provide full cash
satisfaction, and that its refusal is fatal to any sale that does
not provide for the payment of all First Lien Lenders in full and
in cash.

However, a sale without the consent of the Steering Committee is
authorized under Section 363(f) upon the satisfaction of any one
of that Section's preconditions.  Under the circumstances, a sale
free and clear of liens may be authorized, with liens attaching to
the proceeds in whatever form they may take.  Nothing requires the
proceeds to be in the form of cash, beyond that necessary to pay
the DIP loan, and only Section 363(f)(2) requires consent of the
secured lender.

Mr. Wolfson points out that to justify the insufficiency of the
Steering Committee's earlier proposed bids, which provide no value
to the Second Lien Lenders, it alleges that under the terms of the
Intercreditor Agreement, the Second Lien Lenders have waived their
right to receive any recovery, proposing, essentially, that the
Steering Committee may retain all of the value realized from the
sale of the Debtors' assets if the form of that value is other
than cash, even though that value exceeds the amount of the First
Lien Debt.  Mr. Wolfson contends that the Steering Committee's
contention is not supported by that agreement, which clearly
allows the Second Lien Lenders to receive a distribution under the
circumstances.

The Steering Committee's efforts to control the sale process and
to capture value in excess of its debt are at odds with the
applicable credit documents, as well as applicable nonbankruptcy
and bankruptcy law, Mr. Wolfson says.

Accordingly, Aretex ask the U.S. Bankruptcy Court for the Southern
District of New York to:

   -- deny credit bidding;

   -- allow all reasonable bids; and

   -- find that the Second Lien Lenders are entitled to receive
      sale proceeds in excess of the value of the claims held by
      the First Lien Lenders.

Headquartered in West Point, Georgia, WestPoint Stevens, Inc., --
http://www.westpointstevens.com/-- is the #1 US maker of bed
linens and bath towels and also makes comforters, blankets,
pillows, table covers, and window trimmings.  It makes the Martex,
Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux
brands, as well as the Martha Stewart bed and bath lines; other
licensed brands include Ralph Lauren, Disney, and Joe Boxer.
Department stores, mass retailers, and bed and bath stores are its
main customers.  (Federated, J.C. Penney, Kmart, Sears, and Target
account for more than half of sales.) It also has nearly 60 outlet
stores.  Chairman and CEO Holcombe Green controls 8% of WestPoint
Stevens.  The Company filed for chapter 11 protection on
June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532).  John J.
Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents the
Debtors in their restructuring efforts. (WestPoint Bankruptcy
News, Issue No. 48; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


YELLOW ROADWAY: Forms China Transport Joint Venture with Jin Jiang
------------------------------------------------------------------
Yellow Roadway Corporation (Nasdaq: YELL) and Shanghai Jin Jiang
International Industrial Investment Co., Ltd. disclosed the
formation of a China-based transportation joint venture.  Under
the terms of the joint venture, both YRC and Jin Jiang Investment
will own 50% of JHJ International Transportation Co., Ltd., the
freight forwarding subsidiary of Jin Jiang Investment.

"Finding the right partner in China was critical to our
international expansion -- and we have found that partner in Jin
Jiang," said Bill Zollars, Chairman, President and CEO of YRC.
"Our objective is to provide seamless, end-to-end global
transportation solutions to our customers.  The joint venture with
Jin Jiang advances this objective by significantly expanding our
scale and capabilities in China."

"Through this partnership with Yellow Roadway Corporation, we will
leverage the combined strengths of our companies," stated Yang
Yuanping, Chairman of JHJ and Vice Chairman and CEO of Jin Jiang
Investment.  "We look forward to providing outstanding service to
the Yellow Roadway customers who are doing business in China."

Based in Shanghai, JHJ is the second largest air-freight forwarder
in China.  JHJ also offers ocean freight forwarding and logistics
services through a strong domestic network of 22 locations,
including 5 customs warehouses adjacent to the Shanghai Pudong
International Airport.  JHJ, who employs over 1,000 people,
reported 2004 revenue of $330 million.

The current ownership of JHJ consists of a 65% stake by Jin Jiang
Investment, 21% ownership by Barkley Transportation Ltd., 10% by
Shanghai HaiGang Trading Company and 4% by Nelson Worldwide Ltd.
Under the terms of the agreement, YRC will invest $45 million to
acquire the full ownership positions of Barkley Transportation
Ltd., Shanghai HaiGang Trading Company and Nelson Worldwide Ltd.,
and 15% ownership of JHJ from Jin Jiang Investment.  Upon the
completion of the transaction, both YRC and Jin Jiang Investment
will each hold 50% equity interests in JHJ.  Both parties will be
equally represented on the board of directors for the venture.
YRC will report its equity interest in JHJ earnings in the non-
operating section of its Consolidated Statement of Operations.

The joint venture is subject to governmental approval processes in
China and is expected to close in early fall 2005.

JHJ is a Class A licensed forwarder, and is a subsidiary of Jin
Jiang Investment. Jin Jiang Investment, a publicly-traded
subsidiary of Jin Jiang International Holding Co., Ltd., engages
in the passenger transportation and logistics industries in China.
Jin Jiang International is a conglomerate that includes China's
largest hospitality group along with operations in international
travel agencies, tourism, real estate and other industries.  Jin
Jiang is one of the most recognized brand names in China.

Yellow Roadway Corporation, a Fortune 500 company, is one of the
largest transportation service providers in the world.  Through
its subsidiaries including Yellow Transportation, Roadway Express,
Reimer Express, USF, New Penn Motor Express, Meridian IQ and
Yellow Roadway Technologies, Yellow Roadway provides a wide range
of asset and non-asset-based transportation services integrated by
technology.  The portfolio of brands provided through Yellow
Roadway Corporation subsidiaries represents a comprehensive array
of services for the shipment of industrial, commercial and retail
goods domestically and internationally.  Headquartered in Overland
Park, Kansas, Yellow Roadway Corporation employs over 70,000
people.

                        *     *     *

As reported in the Troubled Company Reporter on May 18, 2005,
Moody's Investors Service confirmed the debt ratings of Yellow
Roadway Corporation -- senior implied at Ba1 -- and assigned a Ba1
rating to $250 million of senior unsecured floating rate notes.
In a related action, in anticipation of Yellow Roadway's
acquisition of USF Corporation, Moody's downgraded the senior
unsecured debt rating of USF to Ba1 from Baa1.  USF is being
acquired in a transaction valued at $1.4 billion that will
increase the indebtedness of the combined group.

Ratings affected:

Yellow Roadway Corporation:

   * senior unsecured, senior implied and issuer ratings confirmed
     at Ba1;

   * $250 million Floating Rate Notes assigned Ba1; and

   * Roadway LLC guaranteed global notes confirmed at Ba1.

The stable outlook reflects the expectation of a robust near-term
operating environment for the trucking sector which should enable
the company to generate sufficient free cash flow to restore pre-
merger credit metrics before the end of FY 2006.


YUKOS OIL: Russia Recoups RUB392 Billion Tax Payment From Yukos
---------------------------------------------------------------
The Russian government has continued to extract back tax payments
from Yukos Oil Company, according to Interfax.  Federal Court
Bailiff Service Director Nikolai Vinnichenko told Interfax that
they have recovered RUB392 billion from Yukos in accordance with
orders from the Russian tax authorities.

Yukos remains to be indebted to the federal budget for the
remaining RUB59 billion.  Courts, though, are handling claims for
RUB400 billion more.

Headquartered in Houston, Texas, Yukos Oil Company 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.  On
Feb. 24, 2005, Judge Letitia Z. Clark dismissed the Chapter 11
case.  (Yukos Bankruptcy News, Issue No. 22; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


* BOOK REVIEW: Hospitals, Health and People
-------------------------------------------
Author:     Albert W. Snoke, M.D.
Publisher:  Beard Books
Softcover:  248 pages
List Price: $34.95

Order your personal copy at
http://www.amazon.com/exec/obidos/ASIN/1587981610/internetbankrupt

Hospitals, Health and People is an interesting and very readable
account of the career of a hospital administrator and physician
from the 1930's through the 1980's, the formative years of today's
health care system.  Although much has changed in hospital
administration and health care since the book was first published
in 1987, Dr. Snoke's discussion of the evolution of the modern
hospital provides a unique and very valuable perspective for
readers who wish to better understand the forces at work in our
current health care system.

The first half of Hospitals, Health and People is devoted to the
functional parts of the hospital system, as observed by Dr. Snoke
between the late 1930's through 1969, when he served first as
assistant director of the Strong Memorial Hospital in Rochester,
New York, and then as the director of the Grace-New Haven Hospital
in Connecticut.  In these first chapters, Dr. Snoke examines the
evolution and institutionalization of a number of aspects of the
hospital system, including the financial and community
responsibilities of the hospital administrator, education and
training in hospital administration, the role of the governing
board of a hospital, the dynamics between the hospital
administrator and the medical staff, and the unique role of the
teaching hospital.

The importance of Hospitals, Health and People for today's readers
is due in large part to the author's pivotal role in creating the
modern-day hospital.  Dr. Snoke and others in similar positions
played a large part in advocating or forcing change in our
hospital system, particularly in recognizing the importance of the
nursing profession and the contributions of non-physician
professionals, such as psychologists, hearing and speech
specialists, and social workers, to the overall care of the
patient.  Throughout the first chapters, there are also many
observations on the factors that are contributing to today's cost
of care.  Malpractice is just one example.  According to Dr.
Snoke, "malpractice premiums were negligible in the 1950's and
1960's.  In 1970, Yale-New Haven's annual malpractice premiums had
mounted to about $150,000."  By the time of the first publication
of the book, the hospital's premiums were costing about $10
million a year.

In the second half of Hospitals, Health and People, Dr. Snoke
addresses the national health care system as we've come to know
it, including insurance and cost containment; the role of the
government in health care; health care for the elderly; home
health care; and the changing role of ethics in health care.  It
is particularly interesting to note the role that Senator Wilbur
Mills from Arkansas played in the allocation of costs of hospital-
based specialty components under Part B rather than Part A of the
Medicare bill.  Dr. Snoke comments: "This was considered a great
victory by the hospital-based specialists.  I was disappointed
because I knew it would cause confusion in working relationships
between hospitals and specialists and among patients covered by
Medicare.  I was also concerned about potential cost increases.
My fears were realized.  Not only have health costs increased in
certain areas more than anticipated, but confusion is rampant
among the elderly patients and their families, as well as in
hospital business offices and among physicians' secretaries."
This aspect of Medicare caused such confusion that Congress
amended Medicare in 1967 to provide that the professional
components of radiological and pathological in-hospital services
be reimbursed as if they were hospital services under Part A
rather than part of the co-payment provisions of Part B.

At the start of his book, Dr. Snoke refers to a small statue,
Discharged Cured, which was given to him in the late 1940's by a
fellow physician, Dr. Jack Masur.  Dr. Snoke explains the
significance the statue held for him throughout his professional
career by quoting from an article by Dr. Masur: "The whole
question of the responsibility of the physician, of the hospital,
of the health agency, brings vividly to mind a small statue which
I saw a great many years ago.it is a pathetic little figure of a
man, coat collar turned up and shoulders hunched against the chill
winds, clutching his belongings in a paper bag-shaking, tremulous,
discouraged.  He's clearly unfit for work-no employer would dare
to take a chance on hiring him.  You know that he will need much
more help before he can face the world with shoulders back and
confidence in himself.  The statuette epitomizes the task of
medical rehabilitation: to bridge the gap between the sick and a
job."
It is clear that Dr. Snoke devoted his life to exactly that
purpose.  Although there is much to criticize in our current
healthcare system, the wellness concept that we expect and accept
today as part of our medical care was almost nonexistent when Dr.
Snoke began his career in the 1930's.  Throughout his 50 years in
hospital administration, Dr. Snoke frequently had to focus on the
big picture and the bottom line.  He never forgot the importance
of Discharged Cured, however, and his book provides us with a
great appreciation of how compassionate administrators such as Dr.
Snoke have contributed to the state of patient care today.

Albert Waldo Snoke was director of the Grace-New Haven Hospital in
New Haven, Connecticut from 1946 until 1969.  In New Haven, Dr.
Snoke also taught hospital administration at Yale University and
oversaw the development of the Yale-New Haven Hospital, serving as
its executive director from 1965-1968.  From 1969-1973, Dr. Snoke
worked in Illinois as coordinator of health services in the Office
of the Governor and later as acting executive director of the
Illinois Comprehensive State Health Planning Agency.  Dr. Snoke
died in April 1988.

                          *********

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, Jazel P.
Laureno, Cherry Soriano-Baaclo, Marjorie Sabijon, Terence Patrick
F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo Pinili,
Jr., 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 ***