TCR_Public/050804.mbx       T R O U B L E D   C O M P A N Y   R E P O R T E R

          Thursday, August 4, 2005, Vol. 9, No. 183

                          Headlines

ADAHI INC: Wants Chapter 11 Dismissed to Avert Aug. 22 Foreclosure
AHERN RENTALS: S&P Rates Proposed $175 Million Senior Notes at B
ALLIED HOLDINGS: Gets Interim Okay of $230 Million DIP Financing
ALLIED HOLDINGS: Releases 148-Page List of Equity Security Holders
ARLINGTON INNS: Parent Taps Chanin Capital as Financial Advisor

ASSET BACKED: Fitch Assigns Low-B Rating to Three Cert. Classes
BETHLEHEM STEEL: ISG & Trust Squabble Over Rights to DOE Refund
BRADLEY VIDEO: Case Summary & 20 Largest Unsecured Creditors
BROADBAND OFFICE: Bankruptcy Court Approves Zephion Compromise
CARROLS CORP: S&P Ups Ratings After Reporting Default is Cured

CATHOLIC CHURCH: Tucson & Trustee Agree to Retention Procedures
CATHOLIC CHURCH: Tucson Can Assume Catholic Foundation Lease
CHECKERBOARD SQUARE: Case Summary & 17 Largest Unsecured Creditors
COLLINS & AIKMAN: Creditor Panel Hires Alvarez & Marsal as Advisor
COLLINS & AIKMAN: Village of Rantoul Seeks Adequate Protection

COLLINS & AIKMAN: Asks Court for March 22, 2006, Claims Bar Date
CONSECO INC: S&P Rates $300 Mil. Convertible Senior Notes at BB-
CONSOLIDATED COMMS: IPO Completed & S&P Holds Low-B Ratings
CREDIT SUISSE: S&P Puts Low-B Ratings on Six Certificate Classes
CREDIT SUISSE: S&P Lifts Ratings on Eight Certificate Classes

CUSTOM SERVICES: Case Summary & 20 Largest Unsecured Creditors
DOMTAR INC: S&P Rates New $400 Million Senior Unsec. Notes at BB+
DYNEGY INC: Selling Natural Gas Unit to Targa for $2.475 Billion
EDUCATE INC: Reduced Debt Spurs S&P to Change Outlook to Positive
FTI CONSULTING: Closes Debt Offerings & Repurchases $125M Shares

GALEY & LORD: Hires GlassRatner Advisory as Expert Witness
GENERAL GROWTH: Discloses 2005 Second Quarter Performance
GLACIER FUNDING: Fitch Puts BB+ Rating on $3 Million Class D Notes
GREYHOUND LINES: Debt Redemption Cues S&P to Withdraw Ratings
H TRANS CORP: Case Summary & 18 Largest Unsecured Creditors

HARVEST ENERGY: Closes Equity & Convertible Debenture Transactions
HOVNANIAN ENTERPRISES: Fitch Rates $300MM Senior Notes at BB+
HEALTHEAST CARE: S&P Rates $195 Million Series 2005 Bonds at BB+
HOUTEX I & II: Voluntary Chapter 11 Case Summary
INGRESS I: Fitch Junks $21.25 Million Class C Notes After Review

INTCOMEX INC: S&P Rates $130 Million Senior Secured Notes at B-
INTERNATIONAL COMMUNICATIONS: Involuntary Chapter 11 Case Summary
JAMES ADAMS: Voluntary Chapter 7 Case Summary
JON BERKEY: Case Summary & 20 Largest Unsecured Creditors
KAISER ALUMINUM: Wants to Fix Solicitation & Voting Procedures

KMART CORP: Court Reduces DeSoto & Haring's Ad Valorem Taxes
KMART CORP: Lassiters Can Pursue Lawsuit as Court Lifts Injunction
LARGE SCALE: Transferring Securities Listing to Nasdaq SmallCap
LEAR CORP: Poor Performance Prompts S&P to Pare Ratings to BB+
LITFUNDING CORP: Plans to Acquire Chatham Street

MERIDIAN AUTOMOTIVE: Court Extends Removal Period to November 1
MESQUITE CREEK: Case Summary & 20 Largest Unsecured Creditors
MIRANT CORP: Wants Payments to Power Island Manufacturers Returned
MIRANT CORP: Objects to Bayerische's Multi-Mil. "Avoidable" Claims
MIRANT CORP: Court Okays Pact Allowing Alstom Power's $3.8M Claim

MMVE DEL: Voluntary Chapter 11 Case Summary
NATIONAL BEDDING: Ares Management Deal Cues S&P's Negative Watch
NBTY INC: Earns $16,000,000 of Net Income in Third Quarter
NORTHWEST AIR: Aug. 20 Workers Strike Looms as Negotiations Fail
NORTHWESTERN CORP: Posts $3.9 Million Net Loss in Second Quarter

NORTHWESTERN CORP: Reservoir Superfund Site Consent Decree Lodged
NRG ENERGY: Completes Exchange for $1.35 Billion Senior Sec. Notes
PAR WORLDWIDE: Case Summary & 20 Largest Unsecured Creditors
PARMALAT GROUP: Releases Financial Results Ended June 30, 2005
PARMALAT USA: Court Nixes Bondi's Claims Against Grant & Deloitte

PETTY INDUSTRIAL: Case Summary & 20 Largest Unsecured Creditors
PLAYTEX PRODUCTS: Improved Debt Leverage Cues S&P's Stable Outlook
PNC COMMERCIAL: Citing Likely Loss, Fitch Junks $4M Class N Certs.
PRIMUS TELECOM: June 30 Balance Sheet Upside-Down by $185.4 Mil.
PROTOCOL SERVICES: Section 341(a) Meeting Slated for August 30

PROTOCOL SERVICES: Look for Bankruptcy Schedules on Aug. 25
PROSTAR INC: Case Summary & 20 Largest Unsecured Creditors
PROVIDENT PACIFIC: Hires Michael Lewis as Bankruptcy Counsel
PSEG FUNDING: S&P Lifts Ratings on $480 Million Securities
QWEST COMMS: June 30 Balance Sheet Upside-Down by $2.7 Million

RAM-Z LLC: Case Summary & 20 Largest Unsecured Creditors
RELIANT ENERGY: Paying $75M to Louisiana Municipal Police Retirees
RELIANT ENERGY: Settles Shareholder Class Action Suits for $68M
SALTON INC: Extends Debt Exchange Offer Until August 15
SARAH BENTLEY: Case Summary & 20 Largest Unsecured Creditors

SIRIUS SATELLITE: S&P Junks Proposed $500 Million Senior Notes
SPENCER PATERSON: Case Summary & 20 Largest Unsecured Creditors
STELCO INC: Norambar Gets $40 Million New Credit Facility
TENET HEALTHCARE: June 30 Balance Sheet Upside-Down by $1.8 Bil.
TERAFORCE TECHNOLOGY: Case Summary & 40 Largest Unsec. Creditors

TOWER AUTOMOTIVE: Delivers 2004 Annual Report to SEC
TOWER AUTOMOTIVE: Closure of Three Facilities to Cost $63.4 Mil.
TOWER AUTOMOTIVE: Reserves $16,300,000 for Environmental Issues
TOWN SPORTS: June 30 Balance Sheet Upside-Down by $117 Million
UNITED FLEET: Wants to Hire Fuqua & Keim as Bankruptcy Counsel

UNITED FLEET: Section 341(a) Meeting Slated for August 25
US AIRWAYS: Files First Amended Plan and Disclosure Statement
US AIRWAYS: Incurs $62 Million Net Loss for 2005 Second Quarter
USG CORP: Net Income Increases 38% to $110 Mil. in Second Quarter
VARTEC TELECOM: Wants to Examine Ex-Executives Under Rule 2004

VARTEC TELECOM: Wants to Sell DeSoto Property in 363 Sale
VARTEC TELECOM: Wants to Sell Personal Property in Addison, Texas
VILLAS AT HACIENDA: Court Says Ravenswood Must Produce Documents
W.R. GRACE: Asks Court to Approve Intercat Settlement Agreement
WINN-DIXIE: Committee Has Until August 25 to Challenge DIP Liens

WINN-DIXIE: Sells Pharmaceutical Assets to 10 Companies
WOOD DISCOUNT: Voluntary Chapter 11 Case Summary
WORLDCOM INC: Notice of Class Action Settlements With Past Execs.


                          *********

ADAHI INC: Wants Chapter 11 Dismissed to Avert Aug. 22 Foreclosure
------------------------------------------------------------------
Adahi, Inc., asks the U.S. Bankruptcy Court for the District of
Nevada to dismiss its voluntary Chapter 11 case it filed on
September 13, 2004.  

The Debtor wants to exit the chapter 11 process so it can pursue
other options outside of bankruptcy.  The Debtor explains that it
will continue to needlessly accrue legal, accounting and other
expenses related to the administration of its case if it remains
under bankruptcy protection.

However, the Debtor wants to keep the option of proceeding with
the confirmation of its plan of reorganization if it fails to
obtain approval of a $4.2 million secured loan from Bank of
America.

BofA has given the Debtors conditional approval for a refinancing
loan that it will use to repay the $3.9 million balance of its
secured debt to Russel W. Kuhn and Roy R. Murphy.  The loan is
secured by a first trust deed on the Debtor's two office buildings
located in Incline Village, Nevada.  The Debtor will use the
remaining loan amount to resolve M. Neilsen Corporation's $225,000
mechanic's lien claim.  

To facilitate the approval of the loan, the Debtor agreed to
transfer, post-dismissal, ownership of the Incline Village
property to a newly formed entity.  Adahi's current shareholders
will own stock in the same percentages in the new entity.

                        Creditors Object

Messrs. Kuhn and Murphy, secured creditors holding a first
priority deed of trust on the Incline Village property, do not
support the proposed dismissal.  The creditors argue that a
dismissal of the chapter 11 case will nullify the protection
afforded by their cash collateral stipulation with the Debtor.

The creditors remind the Court that they had deferred their right
to seek relief from the automatic stay to continue a prepetition
foreclosure on the Inclined Village property because of the cash
collateral stipulation.  A copy of the cash collateral stipulation
is available for a fee at:

     http://www.ResearchaAchives.com/bin/download?id=050803025753

Under the cash collateral stipulation, the Debtor is obliged to
fully satisfy its $3.9 million obligation to the creditors by
Aug. 1, 2005.  The creditors are entitled to seek relief from the
automatic stay and continue their prepetition foreclosure if the
Debtors fail to pay the loan by the deadline.  

A foreclosure sale is scheduled on Aug. 22, 2005.

The creditors say that a dismissal of the chapter 11 case will
allow the Debtor to reap the benefits of the cash collateral
stipulation without accepting any of the burdens.  Accordingly,
the creditors want any dismissal to be conditioned upon the
preservation of their rights under the cash collateral
stipulation.

The creditors want the Court to retain jurisdiction over the case
and not allow a dismissal until they are fully paid or,
alternatively, dismiss the case and retain jurisdiction if the
debtor:

    a) fails to pay their secured claim by the Aug. 22
       foreclosure sale;

    b) seeks relief under the U.S. Bankruptcy Code in any other
       jurisdiction;

    c) files an action for relief seeking to halt the rescheduled
       foreclosure sale before any other jurisdiction.

    d) seek to extend the time for the performance of any other
       obligation under the cash collateral stipulation.

Headquartered in Incline Village, Nevada, Adahi Inc. filed for
chapter 11 protection on September 13, 2004 (Bankr. D. Nev.
Case No. 04-52718).  Stephen R. Harris, Esq., Chris D. Nichols,
Esq., and Gloria M. Petroni, Esq., at Belding, Harris & Petroni,
Ltd., represents the Debtor in its restructuring efforts.  When
the Debtor filed for protection from its creditors, it estimated
more than $50 million in debts and assets.


AHERN RENTALS: S&P Rates Proposed $175 Million Senior Notes at B
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned a 'B' corporate credit
rating to equipment rental company Ahern Rentals Inc. and a 'B-'
rating to Ahern's proposed $175 million senior secured notes due
2013.  (These notes are secured by second-priority liens and
assigned under Rule 144a with registration rights.)  The senior
secured notes have been assigned a recovery rating of '3', which
reflects Standard & Poor's expectation that lenders will recover a
meaningful amount of principal (50%-80%) in the event of a
bankruptcy.

Ahern will use the proceeds from these notes to repay outstanding
debt under an existing credit facility and other outstanding
second-lien notes.  The company will amend its senior secured $175
million, five-year revolving credit facility (which is unrated and
secured by first-priority liens), which will primarily be used to
fund future equipment purchases and working capital needs.

The outlook is positive.

"The ratings on Ahern Rentals reflect its weak business profile
operating in a highly fragmented and competitive industry with
limited diversity," said Standard & Poor's credit analyst John R.
Sico.  "The business is also highly capital intensive, as the
company must make ongoing large  equipment purchases, and Ahern
has limited financial flexibility."  Partially offsetting these
risks is the company's good regional presence in fast-growing
markets in the U.S. southwest, particularly in Las Vegas.  Ahern's
credit profile also benefits from the company's focus on customer
service and from its strong EBITDA margins.

Ahern Rentals is a privately owned and operated equipment rental
company that started in 1953 with one location in Las Vegas.  It
has grown organically to 31 locations in seven states, mainly in
the southwest, including the fast-growing Las Vegas metropolitan
area where it maintains a large market share.  (The company is a
Chapter S corporation owned by a family-run trust, and the risks
of this type of structure are incorporated into the rating.)

The company is highly dependent on construction-related end
markets, which account for 80% of its customers; its top 10
customers account for less than 9% of sales and no single customer
contributes more than 3% of revenues.  Ahern has a heavy
concentration in the Las Vegas area that accounts for about 38% of
revenues, followed by California and Arizona with a combined 40%.
Besides new construction activity on the Las Vegas strip, Ahern
benefits from residential construction and other infrastructure
growth in this market.  Weather is less of an issue in the
southwest, so business is less seasonal than it is for the average
rental company, although Ahern is more tied to the ebbs and flows
of the travel and leisure markets.


ALLIED HOLDINGS: Gets Interim Okay of $230 Million DIP Financing
----------------------------------------------------------------
Thomas H. King, executive vice president and chief financial
officer of Allied Holdings, Inc., tells the U.S. Bankruptcy Court
for the Northern District of Georgia that they need immediate
access to cash to fund their day-to-day operations.  The Debtors
project cash losses during the first three weeks in August:

             Allied Holdings, Inc., and Subsidiaries

                                 Forecast   Forecast   Forecast
                                   Week       Week       Week
                                  Ended       Ended      Ended
                                  7-Aug      14-Aug     21-Aug
                                 --------   --------   --------
Receipts:
   A/R Receipts                         -          -          -
   Non-A/R Receipts              $342,000   $342,000   $342,000
                                 --------   --------   --------
   Total Receipts                $342,000   $342,000   $342,000

Disbursements
   A/P Disbursements              126,000     75,000    124,000
   Prepetition Critical Vendors   500,000          -    250,000
   Payroll & Payroll Taxes          2,000      2,000    217,000
                                 --------   --------   --------
   Total Disbursements           $628,000    $77,000   $591,000
                                 --------   --------   --------
Division Net Cash Flow          ($286,000) ($265,000) ($248,000)
                                 --------   --------   --------

                         New DIP Facility

At the First Day Hearing, Judge Drake authorized the Debtors, in
an interim basis, pending a Final DIP Financing Hearing, to enter
into a DIP Financing Agreement with Morgan Stanley Senior Funding,
Inc., General Electric Capital Corporation and Marathon Structured
Finance Fund, L.P

Mitchel J. Perkiel, Esq., at Troutman Sanders, LLP, tells Judge
Drake that Miller Buckfire contacted 20 potential DIP Lenders
prior to the Petition Date.  The goal was to locate a lender that
would lend up to $230 million to pay off approximately
$185,500,000 owed to the Prepetition Lenders and provide Allied
with post-petition working capital financing.  Miller Buckfire
found a DIP Lender.   

The salient terms of the DIP Facility are:

Borrowers:         Allied Holdings, Inc. and
                   Allied Systems, Ltd. (L.P.).

Guarantors:        Each of the other Debtors.

Administrative
Agent and
Collateral Agent:  General Electric Capital Corporation

Lenders:           Morgan Stanley Senior Funding, Inc.
                   General Electric Capital Corporation
                   Marathon Structured Finance Fund, L.P.
                   
Type of Facility:  A first priority secured credit facility to be
                   provided to the Borrowers with a maximum
                   credit amount of $230,000,000, consisting of:

                   (1) a revolving line of credit up to the
                       lesser of:

                       (a) $130,000,000, or

                       (b) a Borrowing Base equal to:

                             -- 85% of eligible accounts
                                receivable, plus

                             -- 85% of the gross orderly
                                liquidation value of Eligible
                                Rolling Stock, plus

                             -- 50% of the fair market value of
                                Eligible Real Estate, less

                             -- reserves subject to adjustment by
                                the Administrative Agent;

                       including, in each case, a $75,000,000
                       letter of credit subfacility.  In
                       addition, the DIP Revolver also includes
                       a $10,000,000 swingline subfacility,
                       funded:

                            (x) $100,000,000 by GE Capital and

                            (y)  $30,000,000 by Marathon;

                   (2) a Term A Loan up to $20,000,000, which
                       will be fully funded by Marathon on the
                       Closing Date;

                   (3) a Term B Loan up to $80,000,000 (funded
                       50%/50% by Morgan Stanley and Marathon);
                       and

                   (4) a $75,000,000 Subfacility to back Letters

Maturity Date:     18 months from the Closing Date.

Security Package:  Except for Permitted Encumbrances, the DIP
                   Facility is secured in accordance with  
                   Sections 364(c) and (d) of the Bankruptcy Code
                   by valid, binding, continuing, enforceable,
                   fully perfected and unavoidable first priority
                   senior priming security interests in and liens
                   on the Debtors' assets.  Those superpriority
                   liens exclude recoveries on account of
                   Avoidance Actions under chapter 5 of the
                   Bankruptcy Code and are junior to the
                   Prepetition Agents' and Prepetition Lenders'
                   rights in and to an Indemnification Fund and
                   a Cash Collateral Fund.

Carve-Out:         The DIP Lenders agree to a $1,500,000 Carve-
                   Out from their liens to permit payment of
                   professional fees and fees payable to the
                   U.S. Trustee.

Interest Rate:     Revolving Loans will accrue interest, at the
                   Debtors' option, at:

                   (x) 200 basis points over an Index Rate (equal
                       to the rate publicly quoted from time to
                       time by The Wall Street Journal as the
                       "base rate on corporate loans posted by at
                       least 75% of the nation's 30 largest
                       banks") or

                   (y) LIBOR plus 300 basis points.

                   The interest rate payable on the Term A Loan
                   is LIBOR plus 5.50%.

                   The interest rate payable on the Term B Loan
                   is LIBOR plus 9.50%.

Fees & Expenses:   The Debtors agree to pay the Lenders:

                   -- a $4,025,000 Facility Closing Fee;

                   -- customary 2.75% letter of credit fees;

                   -- an annual $150,000 Administrative Fee;

Mandatory
Prepayments:       The Debtors are required to deliver all of the
                   net cash proceeds from any asset sale to the
                   DIP Lenders, except for sales of inventory or
                   Rigs in the ordinary course of business.

The Debtors are authorized to immediately pay off $185,500,000
owed to the Prepetition Lenders.  

Any Official Committee of Unsecured Creditors will have 60 days to
investigate and challenge the Prepetition Lenders' liens.  

                       Prepetition Debt

As of the Petition Date, Allied Holdings, Inc., owed approximately
$330 million in funded debt.  

"This debt was comprised of approximately $180 million of
obligations under Allied's prepetition senior secured credit
facility and $150 million of borrowings evidenced by unsecured
notes issued pursuant to the terms of a trust indenture," Thomas
H. King, executive vice president and chief financial officer of
Allied Holdings, Inc., relates.

Allied's Prepetition Credit Facility is provided by a group of
lenders with Ableco Finance, LLC (operated by Cerberus Partners
LP) as collateral agent and Wells Fargo Foothill, Inc., formerly
known as Foothill Capital Corporation, as administrative agent.

The Prepetition Credit Facility is comprised of two facilities:
   
   (i) a revolving credit facility pursuant to which certain
       Prepetition Lenders committed to advance loans and provide
       letters of credit in an aggregate principal amount of up
       to $90 million, and

  (ii) three term loans pursuant to which certain Prepetition
       Lenders advanced loans in an aggregate principal amount of
       $145 million.

Mr. King points out that the Debtors have reached the limits of
their borrowing availability under the Prepetition Credit Facility
and are in breach of certain covenants contained in the
Prepetition Financing Documents.

The Debtors believe that pursuant to the Prepetition Credit
Facility, the Lenders have asserted valid, binding, enforceable
and perfected first priority liens on substantially all of the
Debtors' assets including, without limitation, the Debtors'
accounts receivable, inventory and cash.

                   Immediate Cash Collateral Access

To bridge any gap between the filing of the Debtors' chapter 11
petitions and interim Court approval of the DIP Financing
Facility, the Debtors and the Lenders entered into a Stipulation
agreeing that:

   (1) The Debtors are authorized to use the Cash Collateral to
       protect their assets and property, preserve their estates
       and satisfy necessary expenses incurred and to be incurred
       by them in the operation of their businesses and
       properties;

   (2) As adequate protection, the Collateral Agent for the
       benefit of the Agents and the Prepetition Lenders is
       granted a first priority replacement lien against, and a
       security interest in, all postpetition property of the
       same kind as the Prepetition Collateral to the extent of
       the Debtors' use of the Cash Collateral and decrease in
       the value of the Prepetition Collateral.

   (3) Pending further Court order, the Debtors' authority to use
       the Cash Collateral will terminate on formal closing (and
       funding) of the DIP Facility.

   (4) To the extent the adequate protection provided proves
       inadequate, as determined by the Court, the Collateral
       Agent for the benefit of the Agents and the Prepetition
       Lenders will be granted an allowed administrative claim.

A full-text copy of the Court-approved Cash Collateral Agreement
is available for free at:

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

                     Canadian Cash Collateral

The Bankruptcy Court, on an interim basis, also authorized the
Debtors, particularly Allied Systems (Canada) Company, to use
their cash, cash equivalents, accounts, accounts receivables, and
all products and proceeds on deposit with The Bank of Nova
Scotia, so as to fund, among other things, ongoing working
capital needs of Allied.

Judge Drake restrains and prohibits Scotia from exercising or
implementing any rights of offset, recoupment, restraint, sweep,
reserve or other similar application against the Cash Collateral
on account of any outstanding prepetition general unsecured
advances made by Scotia to Allied Canada pursuant to a CN$2.5
million revolving credit agreement dated June 9, 2004, by and
between Allied Company and Scotia.

Allied Canada will have immediate and uninterrupted access to and
use of all of the Canadian Accounts so as to allow any and all
checks to be fully credited and processed for use by Allied
Canada in the ordinary course; provided, however, that Scotia
will not be required to advance or loan any funds to Allied
Canada and Allied Canada's use of the Canadian Cash Collateral
will be limited to the actual cash balances presently, and as may
become available in, the Canadian Accounts and the cash
collections as may be received by and deposited into the Canadian
Accounts.

Scotia is granted on account of its claims under the Prepetition
Scotia Credit Agreement, the continuation of its interests in and
claims to the Canadian Cash Collateral, and the indubitable
equivalent of Scotia's "security" consisting of the continued
maintenance and preservation in accordance with its present terms
of a $2.6 million Standby Letter of Credit previously issued to
and for the benefit of Scotia by Wells Fargo Bank, N.A., and to
provide continuing security and assurance of repayment for any
outstanding loans and advances by Scotia to Allied Canada.

                          Final Hearing

The Court will convene a Final DIP Financing hearing on
August 24, 2005, at 10:00 a.m.  Objections to the DIP financing
arrangement, if any, must be filed and served by August 19.  

Leslie A. Plaskon, Esq., at Paul, Hastings, Janofsky & Walker
LLP, in New York, represents Morgan Stanley Senior Funding, Inc.,
in this transaction.  General Electric Capital Corporation is
represented by Hilary P. Jordan, Esq., at Kilpatrick Stockton LLP
in Atlanta.  Gerald T. Woods, Esq., at King & Spalding LLP, in
Atlanta, represents Marathon Asset Management.  

Lee R. Bogdanoff, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP,
in Los Angeles, provides counsel to the Prepetition Lenders.  

Anthony J. Smits, Esq., and Jonathan B. Alter, Esq., at Bingham
McCutchen, LLP, in Hartfort, Conn., represents an ad hoc
committee of senior noteholders.

Headquartered in Decatur, Georgia, Allied Holdings, Inc. --  
http://www.alliedholdings.com/-- and its affiliates provide    
short-haul services for original equipment manufacturers and  
provide logistical services.  The Company and 22 of its affiliates  
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.  
Case Nos. 05-12515 through 05-12537).  Jeffrey W. Kelley, Esq., at  
Troutman Sanders, LLP, represents the Debtors in their  
restructuring efforts.  When the Debtors filed for protection from  
their creditors, they estimated more than $100 million in assets  
and debts. (Allied Holdings Bankruptcy News, Issue No. 01;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ALLIED HOLDINGS: Releases 148-Page List of Equity Security Holders
------------------------------------------------------------------
Pursuant to Rule 1007(a)(3) of the Federal Rules of Bankruptcy
Procedure, Allied Holdings, Inc., delivered to the U.S. Bankruptcy
Court for the Northern District of Georgia a list of its equity
security holders.  A full-text copy of the 148-page list is
available for a fee at:

    http://www.researcharchives.com/bin/download?id=050803032949

Headquartered in Decatur, Georgia, Allied Holdings, Inc. --  
http://www.alliedholdings.com/-- and its affiliates provide  
short-haul services for original equipment manufacturers and  
provide logistical services.  The Company and 22 of its affiliates  
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.  
Case Nos. 05-12515 through 05-12537).  Jeffrey W. Kelley, Esq., at  
Troutman Sanders, LLP, represents the Debtors in their  
restructuring efforts.  When the Debtors filed for protection from  
their creditors, they estimated more than $100 million in assets  
and debts. (Allied Holdings Bankruptcy News, Issue No. 01;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ARLINGTON INNS: Parent Taps Chanin Capital as Financial Advisor
---------------------------------------------------------------
Arlington Hospitality, Inc. (Nasdaq/SmallCap: HOST), the parent
company of Arlington Inns, Inc., retained Chanin Capital, L.L.C.,
an affiliate of Chanin Capital Partners.  Chanin serves as
Arlington's exclusive financial advisor, and is assisting the
company in its efforts to restructure its balance sheet.  Chanin
will assist Arlington's board of directors and management in
analyzing the company and its business and financial prospects
with a view towards developing a plan for negotiating with the
company's existing creditors and other stakeholders.

Chanin is comprised of more than 50 dedicated professionals in
London, Los Angeles, and New York.  Since its founding in 1984,
Chanin has completed more than $146 billion in financial
recapitalization and restructuring transactions, and has
consummated more than $29 billion in mergers & acquisitions
transactions.  Chanin has been consistently ranked as one of the
leading restructuring and bankruptcy advisory firms in the United
States.

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.


ASSET BACKED: Fitch Assigns Low-B Rating to Three Cert. Classes
---------------------------------------------------------------
Asset Backed Securities Corporation Home Equity Loan Trust, Series
2005-HE7 is rated by Fitch Ratings:

     -- $204,618,000 classes A-1 through A-3 mortgage pass-through
        certificates 'AAA';

     -- $17,028,000 class M-1 certificates 'AA+';

     -- $13,399,000 class M-2 certificates 'AA';

     -- $14,516,000 class M-3 certificates 'A';

     -- $8,654,000 class M-4 certificates 'BBB+';

     -- $4,187,000 class M-5 certificates 'BBB';

     -- $3,210,000 class M-6 certificates 'BBB-';

     -- $2,792,000 class M-7 certificates 'BB+';

     -- $2,792,000 class M-8 certificates 'BB';

     -- $1,675,000 class M-9 certificates 'BB'.

The 'AAA' rating on the senior certificates reflects the 26.70%
total credit enhancement provided by the 6.10% class M-1, the
4.80% class M-2, the 5.20% class M-3, the 3.10% class M-4, the
1.50% class M-5, the 1.15% class M-6, the 1.00% class M-7, the
1.00% class M-8, the 0.60% class M-9, and the 2.25% initial
overcollateralization.  All the certificates also benefit from
monthly excess cash flow to absorb losses.  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 primary servicing capabilities of
Centex Home Equity Company, LLC.  U.S. Bank National Association
will act as trustee.  All of the mortgage loans were purchased by
an affiliate of the depositor from Centex Home Equity Company.

The collateral pool consists of first and second lien, fully
amortizing and balloon, fixed-rate and adjustable-rate mortgage
loans.  As of the cut-off date, July 1, 2005, the mortgage loans
had an aggregate balance of $279.2 million.  First lien mortgage
loans represent approximately 87.72% of the collateral pool with
the remainder second lien.  The mortgage loans had a weighted
average loan rate of 7.842%, weighted average remaining term to
maturity of 337 months, and an average outstanding principal
balance of $115,019.  The mortgage pool also had a weighted
average Fair, Isaac & Co score of 613 and nearly 56.57% of the
mortgage loans had a loan-to-value ratio at origination in excess
of 80%.  Single Family properties account for approximately 70.59%
of the mortgage pool, planned unit developments 21.90%, and condos
6.00%.  The loans are primarily located in California (27.43%),
Florida (10.00%) and Texas (9.44%).


BETHLEHEM STEEL: ISG & Trust Squabble Over Rights to DOE Refund
---------------------------------------------------------------
John W. Kibler, Esq., at King & Spalding LLP, in New York,
recounts that in 1973, in response to an oil embargo imposed on
the United States by the Organization of Petroleum Exporting
Countries, the Congress authorized the U.S. Department of Energy
to issue price control orders governing the sale and resale of
crude and refined oil, and to recover overcharge amounts from
violators of the price controls.  The Crude Oil Overcharge Refund
Program remained in effect through 1981, allowing the DOE to
collect billions of dollars in overcharge violations.

As part of a settlement of litigation regarding the Refund
Program, the DOE agreed to a restitutionary policy for cases
involving crude oil overcharges that would allow private parties
to recoup losses for overcharges.  In 1986, the DOE reserved in
escrow 20% of all crude oil overcharges recovered from current and
future collections and established a process for victims of
overcharging to submit claims for refunds to be paid out of the
escrow amount.

In connection with the Refund Program, Bethlehem Steel
Corporation duly submitted an application for a refund based on
its refined petroleum purchases made during the program years.  
Mr. Kibler asserts that the refund process was delayed and
prolonged because the DOE continued to collect crude oil
overcharges into the 21st century.

In May 2004, the DOE promulgated procedures for the final round of
payments to successful claimants in the Refund Program.  The DOE
Notice was sent to all claimants purchasing a certain amount of
refined petroleum products during the controls period, including
Bethlehem Steel.  The notice informed claimants of the
availability of the final crude oil refund payment and sought
verification of the information contained in the DOE's database
for each claimant.  Claimants were required to confirm by
December 31, 2004, if they should receive the refund or not, for
any reason, including their dissolution.

The DOE Notice published in the Federal Register reflected the
calculation of the final refund amounts.  The published refund to
which Bethlehem Steel is entitled to receive equaled $1.6 million.  
According to the Procedures, the DOE was tohave begun distributing
refunds by February 1, 2005.

                  ISG & Trust Fight Over Refund

International Steel Group Inc. advised The Bethlehem Steel
Corporation Liquidating Trust of its position that the Refund was
an Acquired Asset under the Asset Purchase Agreement among
Bethlehem, ISG and ISG Acquisition Inc., dated March 12, 2003, as
subsequently amended on April 22, 2003, and May 6, 2003.  Hence,
ISG asserted that the Refund was an asset transferred to it under
the APA.

In response, the Liquidating Trust argued that the Refund was an
Excluded Asset under the APA and that, accordingly, the
Liquidating Trust intended to file the appropriate documentation
with the DOE requesting the Refund.

Subsequently, ISG filed a request with the DOE that ISG be listed
as the beneficiary of the Refund.

On December 22, 2004, the Liquidating Trust sent a Verification of
the information contained in the DOE records seeking to establish
the Liquidating Trust, the successor-in-interest to Bethlehem
Steel, as the entity to which the Refund distribution should be
made.

Mr. Kibler asserts that the specific Acquired Assets, as listed in
the APA, clearly comprised substantially all of Bethlehem Steel's
operating assets, including:

   * cash;
   * owned and leased real property;
   * owned machinery and equipment;
   * acquired contracts;
   * accounts receivable;
   * inventory;
   * supplies;
   * intellectual property;
   * owned motor vehicles;
   * computer hardware and software;
   * permits;
   * books, files, documents and records;
   * joint venture interests;
   * goodwill;
   * air emissions credits, allowances, allotment trading units
     and other creditable emission reductions;
   * prepaid expenses and deposits;
   * claims, other than those constituting Excluded Assets;
   * employee benefit plans, together with attendant insurance
     policies and contracts; and
   * rights to proceeds from insurance, indemnity or similar
     agreements relating to any acquired assets or assumed
     liabilities.

However, according to Mr. Kibler, the Acquired Assets excluded
assets that can clearly be characterized as Bethlehem Steel's non-
operational assets.  Bethlehem Steel retained the so-called
"Excluded Assets," which generally fell into one of two
categories:

   -- assets which were not essential to continued operations of
      Bethlehem Steel's businesses, could be easily liquidated,
      and the proceeds distributed to its creditors; and

   -- assets which carried attendant liabilities.

Among the Excluded Assets were certain delineated claims that were
retained by Bethlehem Steel and not assigned to ISG.  The
delineated claims included:

   (1) claims for tax refunds, overpayments and rebates of taxes
       for periods ending on or before the APA Closing Date;

   (2) claims arising under the Bankruptcy Code or similar state
       laws;

   (3) claims filed or commenced by the Debtors in any court; and

   (4) claims not related to any Acquired Assets or assumed
       liabilities.

A full-text copy of the APA, as amended, with relevant schedules
is available at no charge at:

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

Mr. Kibler asserts that the Refund clearly fell within the
definition of an "Excluded Asset" as a "Claim not related to any
"Acquired Assets or Assumed Liability" of Bethlehem Steel under
the APA.

Mr. Kibler explains that since Acquired Assets under the APA all
relate to assets that were essential to Bethlehem Steel's
continued business operations, a refund of overcharges for its
purchase of petroleum products during the 1970's, more than 30
years past, could not be deemed to be an asset related to its
continuing operations which were acquired by ISG.  Mr. Kibler
argues that the Refund is irrelevant to ISG's continued operation
of Bethlehem Steel's former business.

Mr. Kibler contends that the Refund is properly classified as a
"Claim not related to any Acquired Assets or Assumed Liability"
and, accordingly, is an "Excluded Asset" under the APA.

In the event that the Court determines that the APA is ambiguous,
extrinsic evidence would show that the Refund was an Excluded
Asset.  In the case of ambiguous contracts, courts may look to the
surrounding facts and circumstances to determine the intent of the
parties, Mr. Kibler says.  An examination of the facts and
circumstances surrounding the entry into the APA and its
negotiation would demonstrate that the Refund is an Excluded
Asset.

Mr. Kibler tells the Court that the time the APA was concluded,
the parties understood that there would be other assets that were
unknown at the time to both Bethlehem Steel and ISG, which,
pursuant to the APA, were not meant to be conveyed to ISG.  
Because the full extent of the Excluded Assets was not known at
the entry of the APA, provision was made for unforeseen assets
that clearly were intended to be included in the definition.

Accordingly, the Liquidating Trust asks Judge Lifland to enforce
the terms of the APA and find that the Refund is an "Excluded
Asset" as defined in the APA to be distributed to the
beneficiaries of the Trust.

Headquartered in Bethlehem, Pennsylvania, Bethlehem Steel
Corporation -- http://www.bethlehemsteel.com/-- was the second-   
largest integrated steelmaker in the United States, manufacturing
and selling a wide variety of steel mill products including hot-
rolled, cold-rolled and coated sheets, tin mill products, carbon
and alloy plates, rail, specialty blooms, carbon and alloy bars
and large diameter pipe.  The Company filed for chapter 11
protection on October 15, 2001 (Bankr. S.D.N.Y. Case No. 01-
15288).  Jeffrey L. Tanenbaum, Esq., and George A. Davis, Esq., at
WEIL, GOTSHAL & MANGES LLP, represent the Debtors in their
restructuring, the centerpiece of which was a sale of
substantially all of the steelmaker's assets to International
Steel Group.  When the Debtors filed for protection from their
creditors, they listed $4,266,200,000 in total assets and
$4,420,000,000 in liabilities.  Bethlehem obtained confirmation of
a chapter 11 plan on October 22, 2003, which took effect on Dec.
31, 2003. (Bethlehem Bankruptcy News, Issue No. 58; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


BRADLEY VIDEO: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Bradley Video, Inc.
        dba Game Cage
        660 Sebastapol Road
        Santa Rosa, California 95407

Bankruptcy Case No.: 05-11982

Type of Business: The Debtor is home video, DVD and
                  game entertainment retailer. See
                  http://www.bradleyvideo.com/

Chapter 11 Petition Date: August 2, 2005

Court: Northern District of California (Santa Rosa)

Debtor's Counsel: John H. MacConaghy, Esq.
                  MacConaghy and Barnier
                  645 1st Street West #D
                  Sonoma, California 95476
                  Tel: (707) 935-3205

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Rentrak                       Trade debt                $438,944
P.O. Box 18888
Portland, OR 97218-0888

VPD, IV Inc.                  Trade debt                $364,505
Dept. 05290
P.O. Box 39000
San Francisco, CA 94139-5290

Greater Bay Bank, NA          Unsecured credit line     $100,000
Marin Office
999 Fifth Ave., Suite 100
San Rafael, CA 94901

Wells Fargo Bank              Unsecured credit line      $94,886

Empire Video Dist.            Trade debt                 $61,560

Ingram Entertainment, Inc.    Trade debt                 $52,838

Marjack Co. Inc.              Trade debt                  $8,158

Video Store Shopper           Trade debt                  $4,036

Prime Office Products         Trade debt                  $2,604

ICEE-USA                      Trade debt                  $2,573

Sysco Food Services of S.F.   Trade debt                  $2,191

Vanguard                      Trade debt                  $2,043

Anderson, Ziegler, Disharoon  Professional fee            $2,025

Office Helper                 Trade debt                  $1,885

Pepsi Cola                    Trade debt                  $1,846

JP Digital Imaging            Trade debt                  $1,751

PC Mall                       Trade debt                  $1,719

Valpak                        Trade debt                  $1,600

Kalish & Leavy                Professional fees           $1,510

Air Systems, Inc.             Trade debt                  $1,102


BROADBAND OFFICE: Bankruptcy Court Approves Zephion Compromise
--------------------------------------------------------------
The Honorable Gregory M. Sleet of the U.S. Bankruptcy Court for
the District of Delaware approved a compromise and settlement
agreement among Broadband Office, Inc., Zephion Networks, Inc.,
and Zephion Network's Official Committee of Unsecured Creditors.

The compromise agreement effectively cancels a $163 million claim
Broadband Office filed against Zephion Network.  It also cancels
Zephion Network's $25.7 million claim and a $62.5 million claim
filed by Zephion's Creditors Committee against Broadband Office.

Broadband Office and Zephion Networks had operated as affiliates
prior to their individual bankruptcy filings.  As previously
reported in the Troubled Company reporter, the Debtors completed a
spin-off transaction separating their businesses from one another.  
Upon the filing of their  bankruptcy cases, each of the Debtors
sold their assets and is now administering a liquidation procedure
to wind up of their estates.

When they requested for approval of the settlement agreement,
Broadband Office and Michael B. Joseph, chapter 7 trustee of the
bankruptcy estate of Zephion Networks, Inc., told the Court that
that litigating and liquidating their claims against each other
isn't justified because of the costs, risks and uncertainty of
litigation.  

BBO and the Zephion Trustee said litigation would be difficult
because the Spin-Off Transactions dividing the companies' assets
weren't formalized, documents have been lost, and witnesses aren't
available.  

                     About Zephion Networks

Zephion Networks, Inc., was an Internet access solutions and
network services provider.  Zephion filed for chapter 11
protection on June 25, 2001 (Bankr. Del. Case No. 01-2111).  The
case was converted to Chapter 7 Liquidation under the Bankruptcy
Code on February 22, 2002, and Michael B. Joseph was appointed as
the Chapter 7 Trustee.  Maribeth L. Minella, Esq., and John D.
Mclaughlin, Jr., Esq., at Young Conaway Stargatt & Taylor, LLP,
represent the Chapter 7 Trustee as he winds down the Debtors'
estates.

                   About Broadband Office

Headquartered in San Mateo, California, Broadband Office, Inc.,
filed for chapter 11 protection on May 9, 2001 (Bankr. D. Del.
Case No. 01-1720).  BBO is now a non-operating company in the
process of liquidating its assets.  Adam Hiller, Esq., and David
M. Fournier, Esq., at Pepper Hamilton LLP represent the company.
When the Company filed for protection from its creditors, it
listed $100 million in assets and debts.


CARROLS CORP: S&P Ups Ratings After Reporting Default is Cured
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Carrols Corporation to 'B+' from 'CCC+'.  The company's
bank loan rating was raised to 'B+' from CCC+,' and the rating on
its subordinated debt was raised to 'B-' from 'CCC-'.  In
addition, all ratings are removed from CreditWatch, where they
were placed with developing implications on May 11, 2005.  The
outlook is negative.

"The upgrade follows Carrols' recent filing of its annual
financial statements, which had been delayed because of a re-
evaluation of accounting practices related to leases and leasehold
amortization, estimation of useful lives of franchise rights,
treatment of stock options and the preparation of guarantor
footnote disclosure," said Standard & Poor's credit analyst Kristi
Broderick.  In May 2005, an event of default occurred under
Carrols' senior credit facility as a result of its failure to
timely furnish its audited financial statements.  Carrols has
since obtained a waiver and met its filing deadline of July 31,
2005.

In its filing, the company states that it did not maintain
effective controls over the selection and application of
accounting policies related to the items mentioned above.  These
control deficiencies constitute material weakness and resulted in
a restatement of the company's financial statements for 2003 and
2002, and the unaudited quarterly financial information for 2003
and the first three quarters of 2004.  While the restatement did
not materially affect cash flow, the delayed filing and
insufficient internal controls suggest that management of the
company's financial policies could be improved.

The ratings reflect Carrols' leveraged capital structure and the
risks of operating in the extremely competitive quick-service
restaurant industry.  Carrols is the largest franchisee in the
domestic franchised Burger King system, with 347 restaurants in 13
states in the Northeast, Midwest, and Southeast.  The company also
operates and franchises 88 Pollo Tropical restaurants, primarily
located in Florida, and 134 Taco Cabana restaurants, primarily
located in Texas.


CATHOLIC CHURCH: Tucson & Trustee Agree to Retention Procedures
---------------------------------------------------------------
Judge Marlar of the U.S. Bankruptcy Court for the District of
Arizona signs an agreed order between the Roman Catholic Church of
the Diocese of Tucson and the U.S. Trustee regarding the terms for
the employment of Ordinary Course Professionals.

The parties agree that:

   (a) Each of the Current Ordinary Course Professional has until
       August 24, 2005, to file with the U.S. Bankruptcy Court
       for the District of Arizona and serve to the Office of the
       U.S. Trustee and the Diocese:

       -- a Rule 2014(a) application for employment, the facts
          showing the necessity for employment, the professional
          services to be rendered, the compensation agreement,
          any connections between the Current Ordinary Course
          Professional and the Diocese, its creditors, any other
          party-in-interest, their attorneys and accountants, and
          any party employed in the Office of the U.S. Trustee;

       -- an affidavit certifying that it does not represent or
          hold any interest adverse to the Diocese, its estate,
          any other party-in-interest, their attorneys and
          accountants, and any party employed in the Office of
          the U.S. Trustee with respect to the matter on which
          it is to be employed: and

       -- a completed retention questionnaire.

   (b) The Diocese is permitted to obtain the services of
       additional Ordinary Course Professionals to support its
       ongoing business operations, as the need arises.

   (c) For each Future Ordinary Course Professional, the Diocese
       will file with the Court:

       -- a notice stating its intention to employ, and detailing
          the terms and conditions under which, the Future
          Ordinary Course Professional will be employed;

       -- a Rule 2014(a) application for employment, outlining
          the facts showing the necessity for employment, the
          professional services to be rendered, the compensation
          agreement, any connections between the Future Ordinary
          Course Professional and the Diocese, its creditors, any
          other party-in-interest, their attorneys, and
          accountants, and any party employed in the Office of
          the U.S. Trustee;

       -- an affidavit certifying that the Future Ordinary Course
          Professional does not represent or hold any interest
          adverse to the Diocese, its estate, any other party-in-
          interest, their attorneys and accountants, and any
          party employed in the Office of the U.S. Trustee with
          respect to the matter on which the Future Ordinary
          Course Professional is to be employed; and

       -- a completed Retention Questionnaire.

   (d) The Diocese will serve the Employment Notice, the 2014
       Statement of the Future Ordinary Course Professional, and
       the completed Retention Questionnaire on:

       -- the Office of the U.S. Trustee;

       -- counsel to the Committee of Tort Creditors; and

       -- all other parties that have filed notice of appearance
          in the Reorganization Case.

   (e) If no objection to a proposed Future Ordinary Course
       Professional is filed within 15 days after the Employment
       Notice is served, the Diocese will file with the Court a
       certificate of no objection, and the retention of the
       Future Ordinary Course Professional will be deemed
       approved by the Court without the need for a hearing or
       further Court order.

   (f) Each Ordinary Course Professional will submit to the
       Diocese a monthly invoice setting forth in reasonable
       detail, the nature of the services rendered and the fees
       and disbursements actually incurred.

   (g) The Diocese will pay each Ordinary Course Professional
       100% of the fees and disbursements incurred, upon
       submission to, and approval by the Diocese of an
       appropriate invoice setting forth in reasonable detail the
       nature of the services rendered and disbursements actually
       incurred, up to $2,500 per month per Professional.  If
       more than $2,500 per month is sought, that Ordinary Course
       Professional will be required to file a fee application.

The Diocese and the U.S. Trustee agree that these retention and
payment procedures will not apply to those professionals for whom
the Diocese has filed or will file separate applications for
approval of employment.

                         *     *     *

As previously reported in the Troubled Company Reporter on    
March 17, 2005, the Diocese of Tucson seeks authority from the
U.S. Bankruptcy Court for the District of Arizona to employ
certain professionals in the ordinary course of business to
provide legal, accounting and other services requiring
professional expertise with respect to the Diocese's day-to-day
operations.

Tucson's Ordinary Course Professionals are:

   * John Levitt, Esq., at Soltman Levitt & Flarety LLP, in
     Westlake Village, who is being employed with respect to a
     stayed sexual abuse litigation against the Diocese;

   * Barry MacBan, Esq., who is being employed with respect to
     a stayed sexual abuse litigation against the Diocese.
     Prior to the Petition Date, Mr. MacBan was employed to
     complete conflicts check of the Diocese and all of the
     Diocese's creditors; and

   * Charles G. Rehling, Esq., at Jones, Skelton & Hochuli PLC,
     in Phoenix, Arizona, who is being employed with respect to
     certain workers' compensation settlements.

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. 36;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


CATHOLIC CHURCH: Tucson Can Assume Catholic Foundation Lease
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona gave Roman
Catholic Church of the Diocese of Tucson permission to assume a
lease dated June 30, 2003, with the Catholic Foundation for the
Diocese of Tucson for the Pastoral Center building located at 111
South Church Avenue in Tucson, Arizona.

As reported in the Troubled Company Reporter on June 23, 2005,
Kasey C. Nye, Esq., at Quarles & Brady Streich Lang LLP, in
Tucson, Arizona, relates that the Pastoral Center has recently
been renovated and houses substantially all of the Diocese's
operations.  Furthermore, the Diocese is paying below market rent.
Based on these and other factors, the Diocese believes that
assuming the lease is in the best interest of its operations,
ministry, estate and creditors.

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. 36;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


CHECKERBOARD SQUARE: Case Summary & 17 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Checkerboard Square, LLC
        603 Seagaze #146
        Oceanside, California 92054

Bankruptcy Case No.: 05-07064

Chapter 11 Petition Date: August 2, 2005

Court: Southern District of California (San Diego)

Judge: Peter W. Bowie

Debtor's Counsel: Dennis C. Winters, Esq.
                  Winters Law Firm
                  1820 East 17th Street
                  Santa Ana, California 92705
                  Tel: (714) 836-1381

Total Assets: $5,508,175

Total Debts:  $2,097,214

Debtor's 17 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Hudson United Bank            Loan                       $33,759
P.O. Box 20430
Newark, NJ 07101-6430

National City Bank                                       $33,656
P.O. Box 5570
Cleveland, OH 44101-0570

Anthony and Dickie Bons                                  $22,500
25709 Hillcrest Drive
Escondido, CA 92026

Signs, Etc.                   Goods and services          $7,000

Pacific Power                 Utilities                   $4,703

Nick Pagakis                                              $3,500

Del Norte Disposal            Services                    $2,373

Crescent City Water           Services                    $2,265

Evergreen Insurance           Insurance                   $2,000

Charter Communications                                    $1,616

SDG&E                         Utilities                   $1,449

Verizon                       Utilities                     $722

Cresent City Glass            Goods and services            $641

Crescent Electric             Services                      $501

Del Fode                                                    $250

City of Oceanside             Services                      $150

Oscar Larson & Asso                                         $120


COLLINS & AIKMAN: Creditor Panel Hires Alvarez & Marsal as Advisor
------------------------------------------------------------------
The Official Committee of Unsecured Creditors of Collins & Aikman
Corporation and its debtor-affiliates seeks permission from U.S.
Bankruptcy Court for the Eastern District of Michigan to retain
Alvarez & Marsal, LLC, as its operational and strategic advisor,
nunc pro tunc to June 1, 2005.

A&M is an internationally recognized business turnaround and
crisis management company that specializes in providing
restructuring and advisory services to companies in financial and
operational distress.

Thomas E. Hill, a managing director at A&M, will be responsible  
for the overall engagement.  Mr. Hill has more than 20 years of  
experience serving the needs of financially and operationally  
challenged organizations.  He brings leadership and a proven  
track record to addressing critical business process including  
cash management and enhancement, profitability improvement,  
strategic assessment and business plan implementation.  Mr. Hill  
has been involved in major corporate restructuring projects  
throughout the Untied Sates.  Some of his most notable publicly  
disclosed engagements have include USG Corporation, Allied  
Products Corp., and AEI Holdings Corp..

As advisor, A&M will:

   a. review and evaluate the financial and operational  
      conditions of the Debtors' domestic and foreign operations  
      and advise the Committee concerning those matters;

   b. assist the Committee and its counsel in evaluating and  
      responding to various developments or motions during the  
      course of the Debtors' Chapter 11 proceedings, including  
      "core" matters as claims analysis, preference analysis,  
      leased and owned property analysis, vendor relations,  
      reclamation issues, vendor liens/arrangements, substantive  
      consolidation and executory contracts;

   c. advise the Committee concerning various measures for  
      operational improvement at the Debtors domestic and foreign  
      operations;

   d. assist the Committee and its counsel in analyzing and  
      evaluating various forensic accounting analyses prepared by  
      the Debtors and their professionals; and

   e. provide other services that may be required by the  
      Committee, and that do not overlap with services provided  
      by the Committee's other advisors.

Subject to Court approval, A&M will receive $200,000 per month  
for services rendered during the first three months of its  
retention and $150,000 per month thereafter until the Committee  
determines that A&M's services are no longer necessary.   
Furthermore, A&M will be entitled to an additional fee to be  
determined by the Committee upon the completion of the case.  A&M  
will also be reimbursed for reasonable out-of-pocket expenses.

Mr. Hill assures the Court that A&M is a disinterested person as  
that term is defined in Section 101(14) of the Bankruptcy Code.   

Although not a factor that would cause A&M to not be  
disinterested, A&M makes additional disclosures related to these  
parties:

   * Delphi Corporation -- In a matter unrelated to the Debtors  
     and their Chapter 11 proceedings, a former client of A&M is  
     involved in litigation against Delphi.  A&M employees who  
     worked on that engagement have been informally advised that  
     they may be deposed as fact witnesses in the former client's  
     litigation against Delphi.

   * Heartland Industrial Partners -- In a matter unrelated to
     the Debtors and their Chapter 11 proceedings, an affiliate
     of A&M previously provided services to another professional  
     services firm retain by an affiliate of Heartland Industrial  
     Partners.

Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit    
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems.  The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world.  The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927).  When the Debtors filed for protection from their
creditors, they listed $3,196,700,000 in total assets and
$2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News,
Issue No. 9; Bankruptcy Creditors' Service, Inc., 215/945-7000)


COLLINS & AIKMAN: Village of Rantoul Seeks Adequate Protection
--------------------------------------------------------------
Collins & Aikman Corporation and its debtor-affiliates incur
utility expenses for, among other things, water, sewer service,
electricity, gas, local telephone service, long-distance telephone
service and waste disposal in the ordinary course of business.  
The utility services are provided by numerous Utility Companies.  

As previously reported in the Troubled Company Reporter, Joseph M.
Fischer, Esq., at Carson Fischer, P.L.C., in Birmingham, Michigan,
tell the Court that uninterrupted utility services are essential
to the Debtors' ongoing operations.  Should one or more of the
Utility Companies refuse or discontinue service even for a brief
period, operations would be severely disrupted.  An interruption
would damage customer relationships, revenues, and profits.

The Village of Rantoul seeks immediate payment of amounts due for
postpetition utility services and cash deposits as adequate
assurance payment pursuant to Section 366 of the Bankruptcy Code.

Sheryl L. Toby, Esq., at Dykema Gossett PLLC, in Detroit,
Michigan, tells the Court that the Village provides electric,
fire, sprinkler, water service, waste water services and gas
service to the Debtors' facilities in Illinois.

The Debtors owe $798,628 to the Village for prepetition utility
services.  For postpetition utility services, the Debtors owe
$157,403 from May 17, 2005, to May 31, 2005.  The Debtors will
likely have additional utility service obligations in succeeding
months.

The Village asserts that it has provided all the detail regarding
its right to receive adequate assurance as is required by the
order deeming utilities adequately assured.

Ms. Toby notes that the Debtors' recent request for additional
financing establishes that there is no assurance of future
operations and ability to pay obligations.  It is beyond question
that the Debtors are in extreme crisis and in no way can
establish that they will be able to meet all obligations they
incur through the bankruptcy process.

Hence, as adequate assurance under Section 366, the Village asks
the Court to compel the Debtors to make immediate payments of all
amounts incurred postpetition.  The Debtors should also be
required to make a $628,000 cash deposit -- which is equal to two
months' usage, based on the Debtors' current outstanding
postpetition debt and usage -- to cover the full amount of usage
that may be incurred at the time period before the utility can
realistically act to discontinue services.

In the event of the Debtors' failure to timely pay for their
utility services, the Village may apply the deposit to
outstanding amounts due without further Court order, notice or
hearing and may give notice to the Debtors that service may be
discontinued without further delay unless the deposit is fully
replenished.

Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit    
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems.  The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world.  The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927).  When the Debtors filed for protection from their
creditors, they listed $3,196,700,000 in total assets and
$2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News,
Issue No. 9; Bankruptcy Creditors' Service, Inc., 215/945-7000)


COLLINS & AIKMAN: Asks Court for March 22, 2006, Claims Bar Date
----------------------------------------------------------------
Collins & Aikman Corporation and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Eastern District of Michigan to
extend the general bar date for filing proofs of claim in their
Chapter 11 cases to March 22, 2006, without prejudice to their
ability to seek further extensions.  The Debtors believe that the
extension will provide additional time for them and their
creditors to assess potential claims without prejudicing any
party.

Local Rule 3003-1 establishes the Bar Date as 90 days after the
first date set for the Section 341 meeting "unless the Court
orders otherwise in a particular case."  The Section 341 meeting
was held on June 24, 2005.  Thus, the Bar Date is currently set
for September 22, 2005.

According to Joseph M. Fischer, Esq., at Carson Fischer, P.L.C.,
in Birmingham, Michigan, the Debtors filed their Chapter 11 cases
a little more than two months ago.  Many of the administrative
tasks required of the Debtors that relate to claims administration
have not yet been completed.  The Debtors have yet to file their
schedules of assets and liabilities and statements of financial
affairs.

The Debtors believe that the extension is practical and will help
ensure that the claims administration process is orderly and
efficient.  Prematurely requiring creditors to file proofs of
claim may result in meritless claims being filed that will
unnecessarily add to the already large burden of assessing the
multitude of claims that will undoubtedly be filed.

Mr. Fischer also points out that the Debtors and their creditors
may not have had sufficient time to analyze or assess potential
claims against the estates.  The extension will provide a full
and fair opportunity for parties with claims against the Debtors
to lodge those claims without prejudice to any party-in-interest.

Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit    
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems.  The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world.  The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927).  When the Debtors filed for protection from their
creditors, they listed $3,196,700,000 in total assets and
$2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News,
Issue No. 9; Bankruptcy Creditors' Service, Inc., 215/945-7000)


CONSECO INC: S&P Rates $300 Mil. Convertible Senior Notes at BB-
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Conseco
Inc.'s (NYSE:CNO) core operating companies to positive from
stable.  The outlook on Conseco Inc. and Conseco Senior Health
Insurance Co., which is a nonstrategic member of the group,
remains stable.

Standard & Poor's also said that it assigned its 'BB-' rating to
Conseco Inc.'s upcoming $300 million convertible senior notes
issue.  Proceeds from the new senior debt issue will be used to
pay down the existing $767 million bank credit facility.

In addition, Standard & Poor's affirmed its 'BB+' counterparty
credit and financial strength ratings on Conseco Inc.'s core
operating companies, its 'CCC' counterparty credit and financial
strength ratings on CSH, and its 'BB-' counterparty credit rating
on Conseco Inc.

"We revised the outlook on the core operating companies to
positive because of our expectation that the group will be able to
generate profitable growth in overall insurance sales in 2005,"
said Standard & Poor's credit analyst Jon Reichert.  However, for
the ratings to be raised, each of the core subsidiaries will need
to have a capital adequacy ratio, as per Standard & Poor's capital
model, of at least 110%.  For the group, the consolidated capital
adequacy ratio is expected to remain above 125%.

The stable outlook on the holding company reflects the likelihood
that the ratings will be affirmed even if the ratings on the core
subsidiaries are raised one notch.  "We believe the standard
three-notch rating differential between most U.S. insurance
holding companies and their subsidiaries is appropriate in
Conseco's case, given its level of fixed-charge coverage as well
as the diversity of sources of holding-company earnings," Mr.
Reichert added.


CONSOLIDATED COMMS: IPO Completed & S&P Holds Low-B Ratings
-----------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on
Mattoon, Illinois-based incumbent local telephone carrier
Consolidated Communications Holdings Inc., including its 'BB-'
corporate credit rating and the 'BB-' senior secured bank loan
rating of co-borrowers Consolidated Communications Inc. and
Consolidated Communications Acquisition Texas Inc.  This follows
the company's recent completion of its IPO, which provided total
funds of about $78 million.  The outlook is negative.

"At the same time, we raised the rating on the $200 million of
senior unsecured notes at co-issuers Consolidated Communications
Illinois Holdings Inc. and Consolidated Communications Texas
Holdings Inc. to 'B' from 'B-', and withdrew our 'B+' corporate
credit ratings on those entities," said Standard & Poor's credit
analyst Susan Madison.

This follows the company's recent completion of its IPO.  This
debt is guaranteed by post-IPO parent Consolidated Communications.
This entity has been merged into Consolidated Communications with
the completion of the IPO.  Standard & Poor's also withdrew the
bank loan rating of Consolidated Communications Acquisition Texas
Inc. and Consolidated Communications Inc., since this loan was
repaid with proceeds from a new $455 million facility, which was
contingent on completion of the IPO.  Pro forma debt is about $560
million.

Consolidated Communications Holdings, Inc. was created as an
entity to enable the IPO, and was assigned a corporate credit
rating on Jan. 24, 2005.  Since originally proposed, there have
been some modifications to the transaction.

First, proceeds from the IPO, which was delayed to July 22, were
somewhat less than anticipated.  Second, a special $37.5 million
dividend was paid to the pre-IPO shareholders in June. As a result
of these two items, net debt is approximately 10% higher than
anticipated in the initial rating.  The resulting financial
parameters, while marginally weaker than anticipated in January,
nevertheless remain consistent with the 'BB-' corporate credit
rating.  Similarly, the slight $30 million increase in the bank
facility, to $455 million, does not affect the rating on this loan
or its recovery prospects.


CREDIT SUISSE: S&P Puts Low-B Ratings on Six Certificate Classes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Credit Suisse First Boston Mortgage Securities Corp.'s
$1.333 billion commercial mortgage pass-through certificates
series 2005-C4.

The preliminary ratings are based on information as of Aug. 2,
2005.  Subsequent information may result in the assignment of
final ratings that differ from the preliminary ratings.

The preliminary ratings reflect the credit support provided by the
subordinate classes of certificates, the liquidity provided by the
trustee, the economics of the underlying loans, and the geographic
and property type diversity of the loans.  Class A-1, A-2, A-3, A-
AB, A-4, A-4M, A-1-A, A-J, B, C, and D are currently being offered
publicly.  Standard & Poor's analysis determined that, on a
weighted average basis, the pool has a debt service coverage of
1.37x, a beginning LTV of 99.0%, and an ending LTV of 88.5%.

A copy of Standard & Poor's complete presale report for this
transaction can be found on RatingsDirect, Standard & Poor's Web-
based credit analysis system, at http://www.ratingsdirect.com/

The presale can also be found on the Standard & Poor's Web site at
http://www.standardandpoors.com/
            
                     Preliminary Ratings Assigned
        Credit Suisse First Boston Mortgage Securities Corp.
   
       Class    Rating      Preliminary          Recommended
                              amount           credit support(%)
       -----    ------      -----------        -----------------      
       A-1      AAA         $39,000,000                    20.00
       A-2      AAA        $138,000,000                    20.00
       A-3      AAA        $113,000,000                    20.00
       A-AB     AAA         $45,000,000                    20.00
       A-4      AAA        $310,000,000                    30.04
       A-4M     AAA         $44,502,000                    20.00
       A-1-A    AAA        $377,179,000                    20.00
       A-J      AAA         $93,335,000                    13.00
       B        AA          $23,334,000                    11.25
       C        AA-         $13,333,000                    10.25
       D        A           $23,334,000                     8.50
       E        A-          $16,667,000                     7.25
       F        BBB+        $16,667,000                     6.00
       G        BBB         $13,333,000                     5.00
       H        BBB-        $16,667,000                     3.75
       J        BB+          $5,000,000                     3.38
       K        BB           $8,334,000                     2.75
       L        BB-          $6,666,000                     2.25
       M        B+           $1,667,000                     2.13
       N        B            $5,000,000                     1.75
       O        B-           $5,000,000                     1.38
       P        N.R.        $18,334,236                     0.00
       A-X*     AAA      $1,333,352,236                      N/A
       A-SP*    AAA      $1,213,113,000                      N/A
              
            * Interest-only class with a notional dollar amount.
            N.R. -- Not rated.
            N/A -- Not applicable.


CREDIT SUISSE: S&P Lifts Ratings on Eight Certificate Classes
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on eight
classes of Credit Suisse First Boston Mortgage Securities Corp.'s
commercial mortgage pass-through certificates from series
2001-CP4. Concurrently, the ratings on 10 classes from the same
transaction are affirmed.

The raised and affirmed ratings reflect the defeasance of 18.1% of
the pool as well as credit enhancement levels that adequately
support the raised and affirmed ratings.

As of July 15, 2005, the pool consisted of 127 loans with an in-
trust balance of $1.16 billion, down from 130 loans with a balance
of $1.21 billion at issuance.  The master servicer, Midland Loan
Services Inc., provided primarily year-end 2004 net cash flow debt
service coverage figures for more than 96.0% of the pool.  Based
on this information, Standard & Poor's calculated a weighted
average DSC of 1.52x for the pool, which is identical to the 1.52x
at issuance.  These figures exclude nine loans (including an
$88.6 million loan, the largest in the trust) with an aggregate
balance of $203.8 million that have been defeased.

The top 10 exposures secured by real estate compose 31.7% of the
pool and have a weighted average DSC of 1.81x, up from 1.73x at
issuance.  The largest loan secured by a real estate asset is a
pari passu loan with a current balance of $111.2 million and an
in-trust balance of $55.2 million.  This loan had a shadow-rated
investment-grade rating at issuance, and exhibits characteristics
reflective of a high investment-grade obligation.  The second
largest loan has a current balance of $52.9 million and is secured
by an office building in Pasadena, California.  This loan, also
shadow-rated investment-grade at issuance, continues to exhibit
characteristics reflective of an investment-grade obligation.
Approximately 34.3% of the space is leased to Overture Services
Inc., which will not renew its lease, which expires in the near
future; this factor has been incorporated into Standard & Poor's
analysis.

The balance of the space is leased to Kaiser Foundation Health
Plan Inc. ('A+').  Two of the top 10 exposures appear on the
master servicer's watchlist due to DSC issues.  Additionally, the
fifth largest exposure totals $29.8 million and consists of two
loans with identical balances that are cross-collateralized and
cross-defaulted.  One of these loans also appears on the watchlist
due to DSC issues. Standard & Poor's reviewed recent inspections
provided by the master servicer for the properties underlying the
top 10 exposures.  All of these properties were deemed to be in
"good" or "excellent" condition.

The most recent remittance report indicates that there are three
loans with an aggregate balance of $26.5 million with the special
servicer, LNR Partners Inc.  Subsequent to the issuance of this
report, another loan with a balance of $6.2 million was
transferred to the special servicer as well.  All four of these
loans are secured by multifamily properties in Dallas, Texas, and
were originally constructed before 1980.  The two largest
specially serviced loans have outstanding principal balances of
$16.7 million and $8.5 million and were transferred to LNR in
January 2005.  These loans have related borrowing entities but are
neither cross-collateralized nor cross-defaulted.  The loans were
transferred to the special servicer in January 2005 for imminent
default; the larger of these loans is less than 30 days delinquent
in its debt service payments and the smaller loan is 60-plus days
delinquent.

Both of these properties have recently been listed for sale.  The
third largest specially serviced loan has a balance of
$6.2 million, is 60-plus days delinquent, and was recently
transferred to the special servicer.  The remaining specially
serviced loan has a balance of $1.2 million, is now current in its
debt service payments, and is listed for sale.  Given the weakness
of the Dallas multifamily market, the age of the properties, and
relatively high loan balances per unit at several of the
properties, Standard & Poor's anticipates losses upon the eventual
disposition of these loans.

There are 36 loans with an outstanding balance of $291.5 million
(25.9%) on the master servicer's watchlist.  The third, fifth, and
eighth largest exposures are among the loans with the master
servicer.  The third largest exposure is a $52.6 million loan
secured by a 783,000-sq.-ft. retail property in Port Charlotte,
Florida. that reported a 2004 DSC of 1.10x. Occupancy at the
property, which was 91.0% at issuance, was down to 83.0% in 2004.
The fifth largest exposure totals $29.8 million and consists of
two, $14.9 million loans that are cross-collateralized and cross-
defaulted.  The loans are secured by three newly constructed
office buildings that consist of 372,000-sq. ft. in Raleigh, North
Carolina.  One of these loans appears on the watchlist as it
reported a 2004 DSC of 0.90x.  The eighth largest exposure is
secured by a 552-unit multifamily property in Winter Springs,
Florida.  It has an unpaid principal balance of $25.2 million.
This property generated a 2004 DSC of 0.95x and reported DSCs that
were less than 1.00x in 2002 and 2003.  The remaining loans on the
watchlist appear primarily due to DSC or occupancy issues.

The underlying trust collateral is located across 26 states, and
the only states with concentrations in excess of 10.0% are
California (20.1%), Texas (12.6%), and Florida (11.6%).  Property
type concentrations can be found in office (42.5%), multifamily
(28.1%), and retail (22.6%) assets.

Standard & Poor's stressed the specially serviced assets, loans on
the watchlist, and other loans with credit issues in its analysis.
The resultant credit enhancement levels appropriately support the
raised and affirmed ratings.
    
                         Ratings Raised
    
        Credit Suisse First Boston Mortgage Securities Corp.
       Commercial mortgage pass-through certs series 2001-CP4

                           Rating
                           ------
                Class    To     From    Credit Support
                -----    --     ----    --------------
                B        AAA    AA               18.3%
                C        AA+    A                14.2%
                D        AA-    A-               12.3%
                E        A      BBB+             10.8%
                F        BBB+   BBB               9.4%
                G        BBB    BBB-              8.3%
                H        BBB-   BB+               6.4%
                J        BB+    BB                4.7%
    
                         Ratings Affirmed
    
        Credit Suisse First Boston Mortgage Securities Corp.
       Commercial mortgage pass-through certs series 2001-CP4

                 Class    Rating   Credit Support
                 -----    ------   --------------
                 A-1      AAA              23.8%
                 A-2      AAA              23.8%
                 A-3      AAA              23.8%
                 A-4      AAA              23.8%
                 K        BB-               3.8%
                 L        B+                3.0%
                 M        B                 2.3%
                 N        B-                1.8%
                 A-CP     AAA                -
                 A-X      AAA                -


CUSTOM SERVICES: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Custom Services International, Inc.
        1600 State Docks Road
        Eufala, Alabama 36027

Bankruptcy Case No.: 05-32220

Type of Business: The Debtor provides warehousing services for
                  long & short term periods, third party
                  logistics services, de-vanning for customs
                  inspections, labeling, packaging services,
                  and transportation services.  See
                  http://www.customservicesint.com/

                  The Debtor originally filed for chapter 11
                  protection on Mar. 28, 2005 (Bankr. D. Nev. Case
                  No. 05-12327), as reported in the Troubled
                  Company Reporter on Mar. 31, 2005.  The
                  Honorable Linda B. Riegle entered an order
                  transferring venue from Nevada to Alabama on
                  June 9, 2005.  

Chapter 11 Petition Date: August 2, 2005

Court: Middle District of Alabama (Montgomery)

Debtor's Counsel: Ron Schlager, Esq.
                  The Law Office of Ron Schlager
                  810 South Casino
                  Las Vegas, Nevada 89101
                  Tel: (702) 366-1528      

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Lillie C. Thomas              Unpaid Wages &            $398,707
601 Cherry Street 2G          Expenses
Eufaula, AL 36027
Tel: (334) 695-1451

Michael Brown                 Unpaid Wages &            $214,607
PO Box 97772                  Expenses
Las Vegas, NV 89193
Tel: (702) 498-4645

Computer Associates           Software License          $210,000
PO Box 12001                  Fees
Dallas, TX 75312
Attn: Rosa Salis Rainy
Tel: (702) 383-8888

Unites States Agency for      Unpaid Contract           $172,457
International Development
1300 Pennsylvania Avenue, NW
Washington, DC 20523
Attn: Bruce Baltas
Tel: (202) 712-1202

SSL Americas, Inc.            Unpaid Equipment          $120,000
3585 Engineering Drive        Lease
Suite 200
Norcross, GA 30092
Attn: Robert Kaiser
Tel: (770) 582-2072

Principal Insurance           Insurance Payments         $75,000

Michael Tom                   Accounting Services        $70,000

Reynolds Metals               Unpaid Stipulated          $54,000
                              Judgment

Johnstone Adams               Attorney Fees & Costs      $52,000

Lexington Insurance           Backcharge on              $50,000
                              Insurance Stipulated
                              Judgment

Ron Schlager                  Attorney Fees & Costs      $20,000

Dina Browne                   Unpaid Wages               $11,846

Wells Fargo                   Overdrawn Bank             $10,000
                              Accounts

Jorge Pupo                    Unpaid Wages                $9,231

United Parcel Services        Shipping Charges              $603

Sprint                        Final Telephone Bill          $400

Catherin Pierce v. LMR, CSI   Lawsuit for Damages             $0

Eufaula Staffing              Lawsuit for Damages             $0

Person v. LMR, CSI            Lawsuit for Damages             $0

Jones v. LMR, CSI             Lawsuit for Damages             $0


DOMTAR INC: S&P Rates New $400 Million Senior Unsec. Notes at BB+
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' debt rating
to paper producer Domtar Inc.'s new $400 million senior unsecured
notes due in 2015.  Proceeds from the new issue will be used to
refinance existing debt and improve liquidity.  The outlook on
Domtar is stable.

The ratings on Montreal, Quebec-based Domtar reflect the
company's:

    * exposure to cyclical paper prices,
    * aggressive debt leverage, and
    * a declining cost position due to a stronger Canadian dollar.

These risks are partially offset by:

    * good fiber and energy integration, and
    * some revenue diversity.

"Domtar's credit metrics are not recovering as much as we had
originally expected, and demand for uncoated freesheet paper
appears weak," said Standard & Poor's credit analyst Daniel
Parker.  "Domtar's earnings have been materially affected by the
appreciation of the Canadian dollar, and other cost pressures such
as fiber, freight, and energy. Softwood lumber duties have been an
additional burden," Mr. Parker added.

At June 30, 2005, trailing 12-month EBITDA to interest coverage
was 3.3x, while funds from operations (FFO) to total debt was
about 14%.  Total debt to capital is about 56% (adjusted for
operating leases and off-balance-sheet receivables
securitizations) and total adjusted debt to EBITDA is about 4.9x.
Standard & Poor's expects these measures will improve in 2005, as
pricing is expected to be better than full-year 2004.  The company
is also targeting C$100 million in cost improvements, and has
already achieved C$60 million toward this goal.

The company's profitability has been weak for several years
(return on capital has averaged about 6% in the past five years).
The company has focused on reducing costs and has limited capital
spending to about C$225 million per year for the past three years,
which is about 60% of depreciation.  Despite the spending
discipline, Domtar has struggled to generate free cash flow
(negative C$63 million in the past 12 months).  The company has
some financial flexibility with assets that could be sold to
reduce debt. Standard & Poor's believes, however, that Domtar will
not sell assets for the sole purpose of reducing debt.  Standard &
Poor's expects leverage to be modestly reduced in 2005, and the
company's medium-term target is a debt-to-capital ratio of 45%.

With 50% of its production located in Canada and 75% of its sales
to the U.S., Domtar's cost position is materially affected by the
foreign exchange rate of the Canadian dollar.  The relatively high
Canadian dollar (currently about 83 U.S. cents) represents about a
15% increase on the Canadian export margins; the Canadian dollar
averaged 70 U.S. cents to 2005 from 2000.  Domtar recently
announced the temporary closure of 150,000 tonnes of pulp and
85,000 tonnes of paper capacity in Canada, and will eliminate
about 790 jobs.  These initiatives are intended to improve
profitability by about C$100 million in 2005. Nevertheless, other
cost pressures including fiber, freight, and energy continue to
pressure operating margins.

The outlook is stable.  If uncoated freesheet prices slide in the
second half of 2005 and the Canadian dollar appreciates, Domtar
will be severely challenged to improve its earnings and cash flow.
The current ratings can tolerate several quarters of weak earnings
and cash flow generation, but any further deterioration in
operating margins, or negative free cash generation would pressure
the ratings or outlook, however.


DYNEGY INC: Selling Natural Gas Unit to Targa for $2.475 Billion
----------------------------------------------------------------
Dynegy Inc. (NYSE: DYN) entered into a definitive agreement for
the sale of the company's Midstream natural gas business to Targa
Resources, Inc., a Houston-headquartered independent company
affiliated with private equity investor Warburg Pincus.  Under the
terms of the agreement, which has been approved by the boards of
both companies, Targa will acquire Dynegy's ownership interests in
Dynegy Midstream Services, Limited Partnership, which holds
Dynegy's natural gas gathering and processing assets, as well as
its natural gas liquids fractionation, terminalling, storage,
transportation, distribution and marketing assets.

Dynegy expects to receive $2.475 billion in cash, subject to
working capital adjustments, of which $2.35 billion will be paid
at closing.  In addition to the amount payable at closing, based
on current expectations, the company will realize a return of cash
collateral of $125 million and eliminate its responsibility for
approximately $75 million in letters of credit for the Midstream
business, both within 60 days of the transaction closing.

The completion of the transaction is conditioned on the expiration
or termination of the Hart-Scott-Rodino waiting period and the
fulfillment of other closing conditions as set forth in the
agreement.  Pending satisfaction of those conditions, the sale is
expected to close in the fourth quarter 2005.

"As a result of Dynegy's unique tax position, the proceeds from
the Midstream transaction will be substantially retained for our
shareholders," said Bruce A. Williamson, Chairman, President and
Chief Executive Officer of Dynegy Inc.  "We believe the benefits
of the transaction will also provide us with opportunities to
evaluate new strategic directions for our Power Generation
business.  We will consider organic growth, growth through
opportunistic expansion or participation in the anticipated power
sector consolidation as we continue our focus on delivering value
to our investors.

"We are positioning our Midstream employees and operations to
become part of a company strategically focused on the Midstream
natural gas business with expanded market capabilities," Mr.
Williamson added.  "We will work with Targa to expedite a
transition marked by seamless product and service delivery to our
customers, open communications with our regulators and
communities, and the continued safe, efficient operation of our
Midstream assets."

The Midstream organization, when acquired by Targa, will continue
to be headquartered in downtown Houston.  Dynegy's existing
Midstream work force of nearly 800 field and corporate employees
will join Targa, which is led by Chief Executive Officer Rene
Joyce.

In connection with the transaction, Stephen A. Furbacher,
Executive Vice President of Dynegy's Midstream business and a
member of Dynegy's Executive Management Committee, will retire
after more than 30 years with Dynegy and predecessor companies.  
He will serve as a consultant to Targa during a transition period
after the closing of the transaction.

"I am grateful for Steve's commitment and direction in guiding
Midstream to an industry-leading position, while serving as an
example for all of our employees in terms of integrity, ethics and
professionalism," said Mr. Williamson. "I appreciate his efforts
at building an organization regarded for its reliable, safe and
cost-efficient operations, as well as his leadership as a member
of Dynegy's Executive Management Committee these past two and a
half years as we restructured the company.  All of us at Dynegy
wish Steve and his family the very best in his retirement."

Dynegy's Midstream assets will be combined with Targa's Louisiana
and Texas assets.  Targa currently has midstream operations in
West Texas and Southwest Louisiana, operating more than 2,000
miles of pipeline, five gas plants with 400 million cubic feet of
natural gas per day of capacity, and system throughput of about
370 million cubic feet of natural gas per day. Additionally, Targa
owns 40 percent of the Bridgeline pipeline system in Southern
Louisiana.

The Midstream transaction will enable Dynegy to utilize its
significant tax assets, a third component of the company's
portfolio.  Taxable gains from the transaction will be largely
offset by net operating losses, capital loss carry-forwards and
tax credits related to Dynegy's self-restructuring activities of
the past several years, thereby minimizing cash taxes associated
with the Midstream transaction.

Dynegy will provide new earnings and cash flow guidance estimates
on August 8 as part of its second quarter 2005 financial results
announcement.  Members of the company's senior management team
will discuss results and new estimates during an investor
presentation to be web cast live beginning at 9 a.m. ET/8 a.m. CT.
The listen-only web cast can be accessed via the "News &
Financials" section of the company's web site at
http://www.dynegy.com/

Dynegy's primary financial advisor was Credit Suisse First Boston,
with J.P. Morgan Securities Inc. also serving as financial advisor
for the purpose of evaluating the fairness of the transaction.
Targa was advised by Merrill Lynch and Co.

                   About Targa Resources, Inc.

Targa Resources, Inc. is an independent company formed in 2003 by
Warburg Pincus and management to pursue gas gathering, processing,
and pipeline asset acquisition opportunities. Targa currently has
midstream operations in West Texas and Southwest Louisiana,
operating over 2,000 miles of pipeline, five gas plants with
400 million cubic feet of natural gas per day of capacity, and
system throughput of about 370 million cubic feet of natural gas
per day.  Additionally, Targa owns 40 percent of the Bridgeline
pipeline system in Southern Louisiana.  For more information,
please visit www.targaresources.com.

                      About Warburg Pincus

Warburg Pincus -- http://www.warburgpincus.com/-- has been a  
leading private equity investor since 1971.  The firm currently
has approximately $12 billion under management and invests in a
range of industries including energy, information and
communication technology, financial services, healthcare, LBOs and
special situations, media and business services, and real estate.  
The firm has provided equity to finance energy companies since the
late 1980s, including exploration and production, midstream,
energy technologies, alternative power, oilfield services, power,
and international energy.  Warburg Pincus has invested and
committed over $2.0 billion in 31 energy companies.  An
experienced partner to entrepreneurs seeking to create and build
durable companies with sustainable value, the firm has offices in
North America, Europe and Asia and an active portfolio of more
than 100 companies.  

                        About Dynegy Inc.

Dynegy Inc. provides electricity, natural gas and natural gas
liquids to markets and customers throughout the United States.  
Through its energy businesses, the company owns and operates a
diverse portfolio of assets, including power plants totaling
approximately 13,000 megawatts of net generating capacity and gas
processing plants that process approximately 1.6 billion cubic
feet of natural gas per day.

                         *     *     *

As reported in the Troubled Company Reporter on May 11, 2005,
Moody's Investors Service placed the debt ratings of Dynegy Inc.
and its rated subsidiaries (Dynegy Holdings Inc., B3 Senior
Implied) under review for possible upgrade.

This action reflects the company's announcement that it is
planning to sell its natural gas liquids business segment, which
should provide the opportunity for material debt repayment.  The
review also reflects the continuing improvement Dynegy has made in
its post-Enron restructuring, including selling Illinois Power,
sales of non-core assets, mitigation of its tolling obligations,
including the Sithe acquisition, and the recent settlement of
shareholder lawsuits related to "Project Alpha."

Dynegy recently announced that it had settled class action
lawsuits related to a 2001 structured transaction known as
"Project Alpha" that resolves the last material litigation facing
the company.  The settlement requires Dynegy to make a $250
million cash payment, which will reduce its liquidity; however, we
would expect Dynegy to maintain total liquidity, including cash on
hand and availability under its revolving credit facility, of at
least $700 million even after the settlement payment.  More
importantly, this settlement removes a significant source of
uncertainty regarding the company's future direction.  As a result
of the settlement, Dynegy will be able to sell its midstream
natural gas liquids business and evaluate other possible strategic
transactions.

Dynegy's natural gas liquids segment is currently generating about
$300 million per year of cash flow, and at current asset sale
multiples in the 8 to 10x range, Dynegy could realize $2.5 to $3
billion in total proceeds.  In addition, Dynegy has a large income
tax net operating loss position that could shelter virtually all
of the gain from the sale of this business.  Consequently, Dynegy
will be able to sell its midstream business in a tax efficient
manner and monetize the value of its NOL.  Dynegy currently has
adjusted debt of about $5.5 billion, which ignores the non-
recourse Sithe debt but includes lease obligations and its
convertible preferred securities.  Moody's expects that Dynegy
should be able to prepay at least $2.5 billion of this debt from
its sales proceeds, or about 45% of its outstanding debt.
Following the midstream sale, Dynegy will be a pure-play electric
power generator with greater focus and a lower cost structure.
Moody's expects continued consolidation in the merchant power
sector and Dynegy will be positioned to participate in this
consolidation.

The ratings review will include an analysis of Dynegy's expected
operating and free cash flow from its power generation business
following the midstream disposition, the value of its generation
assets relative to its outstanding debt, its capital structure
post debt repayment and the company's ongoing working capital
requirements of its customer risk management segment.

Ratings placed under review include those of Dynegy Inc. and its
rated subsidiaries, except Sithe/Independence.
Advisors, a hedge fund, had taken a 5.7 per cent stake in the
struggling US carrier.

In a filing with US regulators after the close of trading on
Friday, SAC revealed that it held 4.9m shares in Northwest, worth
$23.3m at Friday's closing price.

The shares rose to $4.93 by mid-day in New York. Northwest, which
is considered to be among the weakest US carriers financially,
last week repeated warnings that it might face bankruptcy unless
it secured pensions relief and $1.1bn in labour cost savings this
year. The warnings came as Northwest reported a widened quarterly
loss of $225m.

The carrier's hopes were lifted last week after the Senate finance
committee approved a draft bill that would extend the time
airlines have to make up for funding gaps in their pension plans
from the current four years to 14 plus a 7-year transition period.
Northwest called the draft bill a "workable solution".

Some analysts have said that Northwest remains a candidate for
additional financing in spite of its mounting losses.

SAC Capital Advisors manages $6bn and is known for its aggressive
trading style. Its manager, Steven Cohen, is thought to have made
$450m last year after the company's funds returned an average of
about 23 per cent.

Northwest's improved share price is in contrast to that of Delta
Air Lines, its Atlanta-based rival. Shares in Delta, which faces
fixed cash obligations of more than $1bn over the next six months,
plunged almost 15 per cent last week amid fears that a Chapter 11
filing could be imminent. By mid-session yesterday, the shares
were trading 1 per cent lower at $2.93.


EDUCATE INC: Reduced Debt Spurs S&P to Change Outlook to Positive
-----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Educate
Inc. to positive from stable.  At the same time, Standard & Poor's
affirmed the 'B+' corporate credit rating on the company.  Total
debt was $141 million as of June 30, 2005.  Baltimore, Maryland-
based Educate provides retail K-12 tutoring through Sylvan
Learning Centers and supplemental education programs in schools.

"The outlook revision reflects the maintenance of reduced debt
leverage since the company's 2004 IPO, improving operating
performance, and continued good growth prospects for the core
Sylvan learning center business," said Standard & Poor's credit
analyst Hal F. Diamond.

The rating considers the company's relatively small business base,
limited business diversity, continued online losses, and volatile
same-store growth rates, which overshadow its niche competitive
position in the learning center business.

Growth of the learning center business, which accounts for more
than 80% of EBITDA, has been good over the past several years.
However, sustaining the historical rate in the intermediate term
may be tough because of the potential for increased competition,
rising advertising costs, and saturation.  Management expects
systemwide same-territory revenue growth to increase to roughly
5%-6% for the full year 2005 versus 2% in 2004, when high media
rates made advertising expenditures less efficient at reaching the
company's target audience.  High advertising expenditures, largely
funded by franchisees, are needed to maintain brand awareness and
increase enrollment.

Sylvan has the best-known brand within this fragmented sector,
with a market share of 13%, and is five times larger than its
next-largest competitor.  Operations are predominantly franchised,
with only 20% of the geographically diverse portfolio of 1,103
learning centers owned by the company.  Franchisee ownership is
widely dispersed, with low turnover and long tenures.  Management
believes there is a significant potential for roughly 1,000
additional systemwide learning centers over the long run, but
Standard & Poor's is concerned that this expansion may restrain
the growth of existing centers.


FTI CONSULTING: Closes Debt Offerings & Repurchases $125M Shares
----------------------------------------------------------------
FTI Consulting, Inc. (NYSE: FCN) closed its private offering of
$200 million in aggregate principal amount of 7-5/8% Senior Notes
due 2013 and $150 million in aggregate principal amount of 3-3/4%
Convertible Senior Subordinated Notes due 2012.

FTI used the net proceeds of the offering to repay its existing
$142.5 million term loan indebtedness and repurchase approximately
$125 million of common shares through a combination of direct
share repurchases and an accelerated stock buyback program.  The
remainder, approximately $70 million after transaction costs, will
be used for general corporate purposes, which may include
acquisitions and additional stock repurchases.  FTI will incur a
one-time non-cash charge of approximately $1.8 million, or $0.03
per diluted share, for the write-off of deferred financing costs
associated with the early extinguishment of the term loan.

The Senior Notes and the Convertible Notes, net of the repayment
of the existing term loan, will increase net interest expense by
approximately $5.7 million for the remainder of 2005.  The
concurrent stock repurchase will reduce the weighted-average
diluted shares by 5.2 million shares for the remainder of 2005.
The net effect of the increase in interest expense and the
reduction in diluted shares is expected to be neutral to earnings
per diluted share for the remainder of 2005, excluding the one-
time charge described above.  In addition, the Company may enter
into an interest rate swap agreement to manage interest rate
exposure by achieving a desired proportion of variable rate versus
fixed rate borrowings.

"The successful financing we completed today will contribute to
the financial well being of our company and its capital needs for
years to come," Jack Dunn, FTI's president and chief executive
officer, said.  "The strong demand and positive reception to our
offering, as reflected by its pricing, is a tribute to the
strength and integrity of our company, the talented people that
make up FTI, and the institutional presence we have established.

"This offering accomplishes three goals for FTI: it dramatically
increases our liquidity and cash flow at a unique time for growth
opportunities in our markets; solidifies our capital structure for
the foreseeable future, and has enabled us to raise our profile
with the investment community."

                  Outlook for Remainder of 2005

Based on results for the first half of the year and the impact of
the debt offerings, FTI has raised the lower end of its existing
outlook for the remainder of 2005. Revenues are now anticipated to
range from $487.0 million to $503.0 million for the full year;
earnings per diluted share are now expected to range from $1.28 to
$1.35 before the one-time charge of approximately $0.03 per
diluted share for early extinguishment of its term loan; EBITDA is
now expected to range from $119.0 million to $124.0 million
and cash flow from operations to range between $80.0 million and
$90.0 million.

The company believes its average bill rate and utilization will
now be approximately $342 and 77 percent (on a 2,032 hours base),
respectively.  The updated outlook by segment for 2005 reflects,
among other things, some shift in segment results due to the
continued success of FTI's cross-selling and cross-utilization
programs.  While such programs may impact individual segment
results, they have no effect on total enterprise revenues and
profitability.

FTI Consulting is the premier provider of corporate  
finance/restructuring, forensic/litigation/ technology consulting,  
and economic consulting.  Strategically located in 24 of the major  
US cities, London and Melbourne, FTI's total workforce of more  
than 1,100 employees includes numerous PhDs, MBA's, CPAs, CIRAs  
and CFEs, who are committed to delivering the highest level of  
service to clients.  These clients include the world's largest  
corporations, financial institutions and law firms in matters  
involving financial and operational improvement and major  
litigation.   

                         *     *     *

As reported in the Troubled Company Reporter on July 21, 2005,
Moody's Investors Service assigned first-time ratings to FTI
Consulting, Inc., a provider of business consulting services.  The
credit ratings reflect:

   * strong market positions;
   * long standing relationships with a top tier client base;
   * an increasingly complex regulatory environment; and
   * solid credit metrics.

The ratings also consider:

   * significant employee turnover rates;

   * sensitivity of the corporate finance segment to the economic
     cycle;

   * intense competition; and

   * low barriers to entry.

Moody's assigned these ratings:

   * $175 million senior unsecured notes due 2013, Ba2

   * $125 million senior subordinated convertible notes
     due 2012, Ba3

   * Corporate family (formerly senior implied) rating, Ba2

   * Speculative grade liquidity rating, SGL-1

The ratings outlook is stable.


GALEY & LORD: Hires GlassRatner Advisory as Expert Witness
----------------------------------------------------------
The Honorable Mary Grace Diehl of the U.S. Bankruptcy Court for
the Northern District of Georgia in Rome authorized S. Gregory
Hays, the chapter 7 trustee for Galey & Lord, Inc., and its
debtor-affiliates, to employ GlassRatner Advisory & Capital Group
LLC as an expert witness.

The Trustee needs the services of a professional expert witness to
help resolve a dispute with the Bank of New York over rights to
$40 million of sale proceeds from the sale of substantially all of
the Debtors' assets.
   
In March 2005, the bank obtained relief from the automatic stay to
exercise its rights over the sale proceeds.  The Trustee
subsequently filed a complaint seeking, among other things, a
determination of the rights of the parties over the sale proceeds.  

Mr. Hays selected GlassRatner Advisory as his expert witness
because of the Firm's substantial expertise and experience in
asset valuation in a bankruptcy setting.  In this engagement,
GlassRatner Advisory will:

    a) provide financial analyses and valuations of the various
       classes of Sold Assets, including stock holdings, stock of
       related joint ventures, and dividends, distributions, or
       similar payments related to same, intellectual property and
       related intellectual property rights, and all other classes
       of Sold Assets;

    b) provide testimony before the Court as to the value of the
       classes of Sold Assets and related litigation support; and

    c) provide other related services as the Trustee may deem
       necessary and appropriate.

Ian Ratner, CPA, the lead professional assigned on this case, will
be paid $295 per hour for his services.  Other professionals from
GlassRatner Advisory expected to work on this case and their
hourly rates are:

        Designation                          Hourly Rate
        -----------                          -----------
        Managing Directors & Directors          $275
        Managers                                $175
        Associates                           $135 to $175

Mr. Ratner assures the Court that he and his Firm are
"disinterested persons" as that term is defined in section 101(14)
of the Bankruptcy Code.

                    About GlassRatner Advisory

GlassRatner Advisory & Capital Group LLC is a specialty financial
advisory services firm providing Solutions to complex business
problems and Board level agenda items.  The Firm applies a unique
mix of skill sets and experience to address matters of the utmost
importance to the enterprise such as planning and executing a
major acquisition or divestiture, pursuing a fraud investigation
or corporate litigation, managing through a business crisis or
bankruptcy and other top level, non-typical business challenges.

Ian Ratner has extensive experience as a Forensic Accountant and
is nationally recognized as an expert in this area. Mr. Ratner has
been the lead professional on high profile and complex assignments
from international money laundering investigations, failed
transactions, SEC investigations, countless financial reporting
frauds, lost profits, valuation disputes and bankruptcy
investigations.

In addition to his experience as a Forensic Accountant, Mr. Ratner
has distinguished himself as a leading Financial Advisor in
complex bankruptcy and restructuring assignments.  His current
practice includes creditor committee representations, due
diligence assignments, expert witness services, monitoring
borrowers on behalf of lenders, mergers and acquisition consulting
and serving as a liquidating agent, Special Master, and other
fiduciary capacities.

                      About Galey & Lord

Headquartered in Atlanta, Georgia, Galey & Lord, Inc., a leading
global manufacturer of textiles for sportswear, including denim,
cotton casuals and corduroy, and its debtor-affiliates filed for
chapter 11 protection on August 19, 2004 (Bankr. N.D. Ga. Case No.
04-43098).  The Court converted the case to a chapter 7 proceeding
on November 29, 2004.  S. Gregory Hays is the Chapter 7 Trustee
for the Debtors' estate.  Jason H. Watson, Esq., and John C.
Weitnauer, Esq., at Alston & Bird LLP, and Joel H. Levitin, Esq.,
at Dechert LLP, represent the Debtor.  When the Debtor filed for
chapter 11 protection, it listed $533,576,000 in total assets and
$438,035,000 in total debts.


GENERAL GROWTH: Discloses 2005 Second Quarter Performance
---------------------------------------------------------
General Growth Properties, Inc. (NYSE:GGP) announced its second
2005 quarter results.  Earnings per share - diluted (EPS) were
$0.01 for the second quarter of 2005 as compared to $.23 in the
second quarter of 2004.  Fully diluted Funds From Operations per
share (FFO) were $.71 for the second quarter of 2005, a 16.6%
increase over the $.61 reported in the comparable period of 2004.

"Our operating results for the second quarter of 2005 continue to
show improvements from the expanded and more valuable platform
represented by the combined operations of The Rouse Company and
General Growth," reported the Chief Executive Officer of General
Growth Properties, John Bucksbaum.  "Although pleased with our
progress to date, we continue to expect more benefits and
synergies to be realized in the years ahead."

Financial and Operational Highlights

   -- EPS in the second quarter of 2005 were $0.01 per share
      versus $0.23 in the comparable period of 2004. Depreciation
      expense in the second quarter of 2005 was $173.5 million or
      $0.73 per share versus $85.8 million or $.39 per share in
      2004.

   -- FFO increased to $.71 in the second quarter of 2005, 16.6%
      above the $.61 reported in the second quarter of 2004.
      Total Funds From Operations for the quarter increased 24%
      to $207.6 million, from $167.0 million in the second
      quarter of 2004. The effects of non-cash rental revenue
      recognized pursuant to SFAS No. 141 and 142 resulted in
      approximately $7.5 million or $.03 of FFO in the second
      quarter of 2005 and $8.3 million or $0.03 in the comparable
      period of 2004. Non-cash ground rent expense recognized
      pursuant to SFAS No. 141 and 142, all of which was
      attributable to The Rouse Company acquisition, resulted in
      a reduction of approximately $2.0 million or approximately
      $0.01 of FFO in the second quarter of 2005. Straight-line
      rent resulted in approximately $10.2 million or $.03 of FFO
      in the second quarter of 2005, versus $4.0 million or $.01
      in the same period of 2004.

   -- FFO Guidance for 2005 remains estimated to be at least
      $3.13 per share. As future short term interest rates still
      cannot be accurately estimated, the Company will maintain
      this method of guidance (rather than guidance in a low to
      high range) until the Federal Reserve Board discontinues
      its measured increases of interest rates, or until such
      earlier time, if applicable, that the Company estimates
      that full year 2005 FFO per share could be below $3.13.

Retail and Other Segment

   -- Real estate property net operating income (NOI) from
      consolidated properties for the second quarter of 2005
      increased to $414.7 million, 73.4% above the $239.2 million
      reported in the second quarter of 2004. NOI from
      unconsolidated properties, at the Company's ownership
      share, for the quarter increased 48.4% to $96.8 million,
      compared to $65.3 million in the second quarter of 2004.

   -- Revenues from consolidated properties were $628.8 million
      for the quarter, an increase of 77.0% compared to $355.2
      million for the same period in 2004. Revenues from
      unconsolidated properties, at the Company's ownership
      share, for the quarter increased 59.7% to $158.7 million,
      compared to $99.4 million in the second quarter of 2004.

   -- Total tenant sales and comparable tenant sales, both on a
      trailing 12 month basis at June 2005, increased 5.4% and
      3.3%, respectively, compared to the same period last year.

   -- Comparable NOI from consolidated properties in the second
      quarter of 2005 increased by 4.6% compared to the same
      period last year. Comparable NOI from unconsolidated
      properties at the Company's ownership share for the quarter
      increased by approximately 9.9% compared to the second
      quarter of 2004.

   -- Retail Center occupancy was 90.7% at both June 30, 2005 and
      2004.

   -- Sales per square foot for second quarter 2005 were $421
      versus $369 in the second quarter of 2004.

   -- Average rent

For consolidated properties, average rent per square foot for
new/renewal leases signed during the quarter was $36.75 versus
$32.40 for 2004. For unconsolidated properties, average rent per
square foot for new/renewal leases signed in the second quarter of
2005 was $39.32 versus $35.27 for 2004. Average rent for
consolidated properties leases expiring in 2005 was $29.63 versus
$25.69 in 2004. For unconsolidated properties, average rent for
leases expiring in 2005 was $32.31 compared to $32.35 in 2004.

Community Development Segment

   -- NOI for the three months ended June 30, 2005 for the
      properties in the Community Development segment was $20.0
      million for consolidated properties and $9.7 million for
      unconsolidated properties. Substantially all of the
      Company's $14.1 million in income taxes for the three
      months ended June 30, 2005 was attributable to the
      Community Development segment.

   -- Land sale revenues for the three months ended June 30, 2005
      were approximately $114.3 million for consolidated
      properties and approximately $28.7 million for
      unconsolidated properties, amounts which represent
      approximately a 28% increase over the revenues achieved by
      The Rouse Company in the three months ended June 30, 2004.

General Growth Properties, Inc. -- http://www.generalgrowth.com/-
- is the second largest U.S.-based publicly traded Real Estate
Investment Trust (REIT).  The Company currently has ownership
interest and management responsibility for a portfolio of 210
regional shopping malls in 44 states, as well as ownership in
planned community developments and commercial office buildings.
The Company portfolio totals approximately 200 million square feet
of retail space and includes over 24,000 retail stores nationwide.  
The Company is listed on the New York Stock Exchange under the
symbol GGP.

                         *     *     *

As previously reported in the Troubled Company Reporter on
Apr. 8, 2005, Fitch Ratings has downgraded and removed from Rating
Watch Negative ratings for General Growth Properties, Inc. (GGP)
and its subsidiaries:

   General Growth Properties, Inc.:

      -- Senior unsecured issuer to 'BB' from 'BB+';
      -- Preferred stock shelf to 'B+' from 'BB'.

   Price Development Co., LP (Price):

      -- Senior unsecured debt to 'BB+' from 'BBB-'.

   Fitch has also assigned these ratings:

   General Growth Properties, Inc.:

      -- Bank facility 'BB'.

   Rouse LP

      -- Senior unsecured debt 'BB'.

The Rating Outlook for GGP and its subsidiaries is now Stable.
Approximately $8.4 billion of debt is affected by Fitch's action.


GLACIER FUNDING: Fitch Puts BB+ Rating on $3 Million Class D Notes
------------------------------------------------------------------
Fitch Ratings assigns these ratings to Glacier Funding CDO III,
Ltd. and Glacier Funding CDO III, LLC:

     -- $347,500,000 class A-1 first priority senior secured
        floating-rate notes due 2035 'AAA';

     -- $67,500,000 class A-2 second priority senior secured
        floating-rate notes due 2041 'AAA';

     -- $42,750,000 class B third priority senior secured floating
        -rate notes due 2041 'AA';

     -- $25,500,000 class C fourth priority mezzanine secured   
        floating-rate notes due 2041 'BBB';

     -- $3,000,000 class D fifth priority mezzanine secured   
        floating-rate notes due 2041 'BB+'.

The ratings of the classes A-1, A-2, and B notes address the
likelihood that investors will receive timely payments of
quarterly interest and the ultimate repayment of principal.  The
ratings of the classes C and D notes address the likelihood that
investors will receive ultimate payment of scheduled and
compensating interest and the ultimate repayment of principal.  
The ratings are based on the quality and mixture of portfolio
assets, credit enhancement through excess spread, subordination,
collateral coverage, and the sound legal structure of the issuer.

Terwin is the collateral manager for Glacier.  Terwin is a wholly
owned subsidiary of Terwin Asset Management LLC, which is a member
of The Winter Group family of businesses.  Collectively, the
affiliated companies are engaged in loan origination/acquisition,
aggregation, securitization, new issue distribution, and secondary
market trading.  TAM and Terwin are focused on the business of
issuing and managing structured finance CDOs.  Terwin closed its
first mezzanine ABS CDO, Glacier Funding CDO I, in March 2004.
Since then, the company has closed four additional CDOs: Cascade
Funding CDO I in July 2004, Glacier Funding CDO II in October
2004, Athos Funding Ltd. in May 2005, and Northwall Funding CDO I
in May 2005.

Net proceeds from issuance will be used to purchase a diversified
portfolio consisting primarily of residential mortgage-backed
securities, commercial mortgage-backed securities, asset-backed
securities, senior real estate investment trust debt, and CDOs.
Terwin has 90 days to ramp up the portfolio, which will have a
maximum Fitch weighted average rating factor (WARF) of 4.79
('BBB/BBB-').

Terwin will have the ability to sell defaulted and written-down
securities.  There is a substitution period of up to two years
during which the collateral manager may trade up to 10% of the
total portfolio balance annually on a discretionary basis.  The
collateral manager will manage the portfolio in accordance with
specific investment restrictions as outlined in the indenture.

Glacier Funding CDO III, Ltd. is a special purpose company,
incorporated under the laws of the Cayman Islands.  Glacier
Funding CDO III, LLC is a limited-liability company, incorporated
under the laws of the State of Delaware.  The placement agent for
this transaction is Merrill Lynch, Pierce, Fenner & Smith
Incorporated.


GREYHOUND LINES: Debt Redemption Cues S&P to Withdraw Ratings
-------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its ratings, including
its 'CCC+' corporate credit rating, on bus company Greyhound Lines
Inc. (a subsidiary of Laidlaw International Inc.; BBB-/Stable/--)
The rating action follows Laidlaw's successful redemption of
outstanding rated debt issues at Greyhound.  On June 1, 2005,
Standard & Poor's stated that it would likely withdraw its ratings
on Greyhound upon the completion of refinancing activities then
under way at Laidlaw.


H TRANS CORP: Case Summary & 18 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: H Trans Corporation
        aka Fu-Kim
        2615 Fannin Street, Box 3
        Houston, Texas 77002

Bankruptcy Case No.: 05-41911

Type of Business: The Debtor operates a Chinese-Vietnamese
                  restaurant located in Houston, Texas.
                  See http://www.fukimgrandpalace.com/

Chapter 11 Petition Date: August 1, 2005

Court: Southern District of Texas (Houston)

Judge: Jeff Bohm

Debtor's Counsel: Clinton LaFayette Franklin, Esq.
                  Attorney at Law
                  3200 Southwest Freeway, Suite 2200
                  Houston, Texas 77027
                  Tel: (713) 499-3174

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 18 Largest Unsecured Creditors:

   Entity                                   Claim Amount
   ------                                   ------------
City of Houston                                  Unknown
Water Department
P.O. Box 1560
Houston, TX 77251

Reliant Energy                                   Unknown
P.O. Box 3765
Houston, TX 77253-3765

Thyssen Krupp Elevator Corp.                     Unknown
P.O. Box 933004
Atlanta, GA 31193-3004

Prime Sales and Trading, Ltd.                    Unknown
4747 Techniplex Drive
Stafford, TX 77477

Ipswich Shellfish CO.                            Unknown
8 Hayward Street
P.O. Box 550
Ipswich, MA 01938

CenterPoint Energy                               Unknown
P.O. Box 2428
Houston, TX 77252-2428

ECOLAB                                           Unknown
P.O. Box 70343
Chicago, IL 60673-0343

Allied Waste Services                            Unknown
8101 Little York Road
Houston, TX 77016-2435

Advance Restaurant Finance, L.L.C.               Unknown
3 Waters Park Drive, Suite 231
San Mateo, CA 94403

Metrobank, N.A.                                  Unknown
9600 Bellaire Boulevard, Suite 252
Houston, TX 77036

Mai Hoang Nguyen                                 Unknown
9408 Sunlake Drive
Pearland, TX 77589

Internal Revenue Service                         Unknown
Special Procedures
Insolvency SEC
5022-HOU
1919 Smith
Houston, TX 77002

State Treasurer of Texas                         Unknown
P.O. Box 12608
Austin, TX 78711-2608

Texas Comptroller of Public Accounts             Unknown
Revenue Accounting Division
Bankruptcy Section
P.O. Box 13528
Austin, TX 78711-3258

Paul Bettencourt                                 Unknown
Harris County Tax Assessor Collector
P.O. Box 4576
Houston, TX 77210-4576

Houston ISD Tax Office                           Unknown
P.O. Box 4668
Houston, TX 77210-4668

Texas Workforce Commission                       Unknown
Tax Department
P.O. Box 721620
Houston, TX 77272-1620

Texas Workforce Commission                       Unknown
P.O. Box 149037
Austin, TX 78714-9037


HARVEST ENERGY: Closes Equity & Convertible Debenture Transactions
------------------------------------------------------------------
Harvest Energy Trust (TSX:HTE.UN)(NYSE:HTE) closed its previously
announced bought deal financing.  Upon closing, a total of
6,505,600 subscription receipts were issued at a price of $26.90
per Subscription Receipt for gross proceeds of $175,000,640 and
$75,000,000 principal amount of 6.5% convertible extendible
unsecured subordinated debentures were issued.

The Subscription Receipts will be available for trading on the TSX
under the symbol "HTE.R" but will automatically be converted into
Trust Units on a one-for-one basis upon closing of the previously
announced Hay River property acquisition.  Subscription receipt
holders will be entitled to receive the monthly distribution of
$0.25 per Trust Unit expected to be paid on Sept. 15, 2005,
provided they retain the Trust Units received on conversion
through to the August record date for distributions, anticipated
to be Aug. 25, 2005.

The Debentures have a face value of $1,000 per Debenture, a coupon
of 6.5% and are listed for trading on the TSX under the symbol
"HTE.DB.B".  On closing of the Acquisition, the maturity date of
the Debentures will be automatically extended to Dec. 31, 2010 or
the "Final Maturity Date".  Interest on the Debentures is payable
semi-annually on June 30 and December 31 each year beginning
Dec. 31, 2005.  The Debentures are redeemable by the Trust at a
price of $1,050 per Debenture after Dec. 31, 2008, and on or
before Dec. 31, 2009 and at a price of $1,025 per Debenture after
Dec. 31, 2009 and before maturity on Dec. 31, 2010.  In each case,
accrued and unpaid interest thereon, if any, will be settled at
maturity or redemption.  Each Debenture will be convertible into
Trust Units at the option of the holder at any time prior to the
close of business on the Final Maturity Date, as applicable, and
the Business Day immediately preceding the date specified by the
Trust for redemption of the Debentures, at a conversion price of
$31.00 per Trust Unit, subject to adjustment in certain events.
Holders converting their Debentures will receive accrued and
unpaid interest thereon.

The proceeds from this financing will be used to repay bank
borrowings incurred to fund the Acquisition.

The financing was underwritten by a syndicate led by National Bank
Financial Inc., and including TD Securities Inc., CIBC World
Markets Inc., Scotia Capital Inc., Canaccord Capital Corporation,
GMP Securities Ltd., FirstEnergy Capital Corp., Tristone Capital
Inc., Haywood Securities Inc. and Raymond James Ltd.

These Subscription Receipts and the Trust Units issuable upon
conversion thereof as well as the Debentures have not been
registered under the U.S. Securities Act of 1933, as amended, and
may not be offered or sold in the United States absent
registration or applicable exemption from the registration
requirements. This news release shall not constitute an offer to
sell or the solicitation of an offer to buy securities in any
jurisdiction.

Harvest Energy Trust -- http://www.harvestenergy.ca/-- is a  
Calgary-based energy trust actively managed to deliver stable
monthly cash distributions to its Unitholders through its strategy
of acquiring, enhancing and producing crude oil, natural gas and
natural gas liquids. Harvest trust units are traded on the Toronto
Stock Exchange (TSX) under the symbol "HTE.UN" and on the New York
Stock Exchange (NYSE) under the symbol "HTE".  

                         *     *     *

As reported in the Troubled Company Reporter on July 28, 2005,
Standard & Poor's Ratings Services affirmed its 'B+' long-term
corporate credit on Harvest Energy Trust and 'B-' senior unsecured
debt rating on Harvest Operations Corp., a wholly owned subsidiary
of Calgary, Alberta-based Harvest Energy, and removed the ratings
from CreditWatch with negative implications, where they were
placed June 24, 2005, following the company's announcement of a
C$260 million property acquisition in conjunction with an increase
in monthly unit distributions.  S&P said the outlook is stable.


HOVNANIAN ENTERPRISES: Fitch Rates $300MM Senior Notes at BB+
-------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to Hovnanian
Enterprises, Inc.'s (NYSE:HOV) $300 million 6.25% senior unsecured
notes due Jan. 15, 2016.  The Rating Outlook is Stable.  The $300
million issue will be ranked on a pari passu basis with all other
senior unsecured debt, including Hovnanian's revolving and letter
of credit facility.  Proceeds from the new debt issues will be
used for general corporate purposes.

Ratings for Hovnanian are based on the company's successful
execution of its business model, conservative land policies, and
geographic, price point and product line diversity.  The company
has been an active consolidator in the homebuilding industry,
which has contributed to above-average growth during the past six
years, but has kept debt levels somewhat higher than its peers.

Management has also exhibited an ability to quickly and
successfully integrate its acquisitions.  In any case, now that
the company has reached current scale, there may be somewhat less
use of acquisitions going forward and acquisitions may be smaller
relative to Hovnanian's current size.  Significant insider
ownership aligns management's interests with the long-term
financial health of the company.

Risk factors include the inherent (although somewhat tempered)
cyclicality of the homebuilding industry.  The ratings also
manifest the company's aggressive, yet controlled growth strategy,
concentration in California (29% of total deliveries) and
Hovnanian's capitalization and size.

The company's EBITDA and EBIT-to-interest ratios tend to be close
to the average public homebuilder, while inventory turnover tends
to be moderately stronger.  Hovnanian's leverage is somewhat
higher and the debt-to-EBITDA ratio is slightly below the averages
of its peers.  Although the company has certainly benefited from
the generally strong housing market of recent years, a degree of
profit enhancement is also attributed to purchasing design and
engineering, access to capital, and other scale economies that
have been captured by the large national and regional public
homebuilders in relation to nonpublic builders.  These economies,
the company's presale operating strategy, and a return on equity
and assets orientation provide the framework to soften the margin
impact of declining market conditions in comparison to previous
cycles.  Hovnanian's ratio of sales value of backlog to debt
during the past few years has ranged between 1.6 times (x) to 2.3x
and is currently 2.1x, a comfortable cushion.

Hovnanian employs conservative land and construction strategies.  
The company typically purchases land only after necessary
entitlements have been obtained so that development or
construction may begin as market conditions dictate.  Hovnanian
extensively uses lot options.  The use of land option contracts
without specific performance clauses gives the company the ability
to renegotiate price/terms or void the option which limits down
side risk in market downturns and provides the opportunity to hold
land with minimal investment.  At present 73.8% of its lots are
controlled through options, a higher percentage than most public
builders.  Total lots, including those owned, were 104,098 at
April 30, 2005.  This represents a 6.6 year supply based on latest
12 months home deliveries.  However, the company has one of the
lowest owned lot positions in the industry, typically owning only
a one- to two-year supply.  An estimated 85%-90% of its homes are
presold.  The balance is homes under construction or homes
completed in advance of a customer's order.  Hovnanian's
unconsolidated joint venture activity is growing but is still
modest in size and conservatively levered.

Fitch estimates that in recent years at least half of Hovnanian's
growth has resulted from a series of acquisitions, 15 during the
past seven and a half years.  (However, in each of the past four
years, more than 90% of the company's growth in earnings has come
from operations owned more than one year.)  The acquisitions have
enabled the company to grow its position and increase market
share, often broadening product and customer bases in existing
markets.  They have also enabled the company to enter new markets.
The combinations typically were funded by debt and to a lesser
degree by stock and retained earnings.  At times there were earn-
outs, which reduced risk and served to retain key management.

In the future, Hovnanian's acquisition strategy will focus on
purchasing smaller builders and land portfolios in current markets
and on making selected acquisitions in new markets if there is a
good strategic fit and appropriate returns can be achieved.  The
key analysis will be return on capital as to whether an
acquisition will be executed.  Fitch believes that management
would balance debt and stock as acquisition currency to maintain
current credit ratios.  The company is publicly committed to
maintaining an average net debt/equity ratio of 1.0:1.0.

Hovnanian maintains a $1.2 billion revolving and letter of credit
facility.  The facility contains an accordion feature under which
the aggregate commitment can be increased to $1.3 billion, subject
to the availability of additional commitments.  As of April 30,
2005, the outstanding balance under the agreement was $105.1
million.  Also, as of the end of the second quarter, Hovnanian had
issued $272.5 million of letters of credit, which reduces cash
available under the agreement.  The revolving credit agreement
matures in July 2009.  The company has irregularly purchased
moderate amounts of its stock in the past.  About 1.78 million
shares remain in the current class A common stock repurchase
authorization as of April 30, 2005.


HEALTHEAST CARE: S&P Rates $195 Million Series 2005 Bonds at BB+
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' rating to
the Housing and Redevelopment Authority of the City of Saint
Paul's $195 million series 2005 bonds, issued for HealthEast Care
7System, located in St. Paul, Minnesota.

In addition, Standard & Poor's affirmed its 'BB+' rating on the
Housing and Redevelopment Authority of the City of Saint Paul's
hospital facility revenue bonds, series 1997, and Washington
County Housing and Redevelopment Authority's hospital facility
revenue bonds, series 1998.  Standard & Poor's also affirmed its
'BB' rating on HealthEast's series 2005-3A lease bonds.  The
outlook is stable.

At the same time, the 'BB+' ratings on HealthEast's series 1993,
1994, and 1996 bonds were affirmed, but these bonds will be
refunded with the series 2005 bonds, at which point the ratings
will be withdrawn.

"The 'BB+' rating reflects a balance sheet that is challenged by
high leverage and a low, but growing, cash position, with only 68
days of cash on hand," said Standard & Poor's credit analyst Brian
Williamson.

Factors supporting the rating include:

    * the continued improvement in the overall operations of
      HealthEast that has positively affected cash and debt
      service coverage;

    * a solid business position, with a leading 38% market share
      in the competitive St. Paul/Minneapolis, Minnesota
      marketplace; and

    * a management team that continues to take the appropriate
      measures to restore the system's previous stronger financial
      profile and presence in the market.

The proceeds of the series 2005 bonds will be used to refund the
series 1993, 1994, and 1996 bonds that are outstanding.  Also,
HealthEast will obtain about $80 million, which will be used to
fund its five-year capital plan.  The first and most significant
step of the plan is to build a new five-story tower on its St.
Joseph's campus.  Other projects to be funded from the bond
proceeds relate to the St. John's and Woodwinds campuses.  With
the issuance of the 2005 bonds, the security for the bonds will be
enhanced with a mortgage pledge on the property of the obligated
group members.

The stable outlook is based on the expectation that the positive
strides that management has been able to effect in the past three
to four years will continue.  The outlook also reflects the
expectation that as HealthEast has historically operated with a
highly leveraged position, this new borrowing will allow the
management team to increase its liquidity as it has funded the
majority of the capital expenditures for the system.  Finally, the
addition of the new debt leaves little room for management error
regarding budgets and projections.


HOUTEX I & II: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Houtex I & II Joint Venture
        621 South Richey
        Pasadena, Texas 77056

Bankruptcy Case No.: 05-41953

Chapter 11 Petition Date: August 2, 2005

Court: Southern District of Texas (Houston)

Debtor's Counsel: Weldon Leslie Moore, III, Esq.
                  Creel & Moore, L.L.P.
                  8235 Douglas Avenue, Suite 1100
                  Dallas, Texas 75225
                  Tel: (214) 378-8270
                  Fax: (214) 378-8290

Estimated Assets: $1 Million to $10 Million

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

The Debtor did not file a list of its 20 Largest Unsecured
Creditors.


INGRESS I: Fitch Junks $21.25 Million Class C Notes After Review
----------------------------------------------------------------
Fitch Ratings has downgraded one and affirmed three classes of
notes issued by Ingress I, Ltd.  These affirmations are the result
of Fitch's review process and are effective immediately.

   Downgraded:

     -- $21,250,000 class C notes to 'CC' from 'B-'.

   Affirmed:

     -- $71,712,326 class A-1 notes 'AAA';
     -- $94,420,897 class A-2 notes 'AAA';
     -- $54,000,000 class B notes 'A-' '.

Ingress is a collateralized debt obligation supported by a static
pool of asset-backed securities, residential mortgage-backed
securities, commercial mortgage-backed securities, and real estate
investment trusts.  Structured Credit Partners, LLC, a subsidiary
of Wachovia Corporation, selected and is monitoring the portfolio.
SCP may, but is not required to, sell defaulted or credit risk
securities.  Fitch has reviewed the credit quality of the
individual assets comprising the portfolio, including discussions
with SCP, and has conducted cash flow modeling of various default
timing and interest rate scenarios.

Since the last rating action in July 2004, the collateral has
remained stable.  The weighted average rating has slightly
improved to 'BBB+' as a result of the migration of lower rated
collateral into the defaulted collateral bucket.  Subsequently,
overcollateralization ratios have decreased as a result of the
removal of the additional defaulted collateral from the collateral
principal balance.

The classes A, B, and C OC decreased to 138.6%, 104.6, and 94.3%,
respectively, as of the June 30, 2005 trustee report, from 143.8%,
111.0%, and 101.5% as of the trustee report dated April 30, 2004.
The weighted average spread has also decreased to 1.68% from 1.8%,
while the weighted average coupon has increased to 7.3% from
7.51%.  The class B OC ratio has failed its required level of 112%
on each payment date following Sept. 30, 2003, causing the class C
notes to capitalize missed interest payments of over $3.2 million.
Additionally, Ingress' interest rate hedging position continues to
reduce the interest cash flow available to the noteholders.

The ratings of the class A-1 and A-2 notes address the likelihood
that investors will receive full and timely payments of interest,
as per the governing documents, as well as the stated balance of
principal by the legal final maturity date.  The ratings of the
classes B and C 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.

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/


INTCOMEX INC: S&P Rates $130 Million Senior Secured Notes at B-
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Miami, Florida-based Intcomex Inc.  At the same
time, Standard & Poor's assigned its 'B-' debt rating to the
proposed $130 million senior secured second-lien notes due 2010.
The 'B-' second-lien debt rating is one notch below the corporate
credit rating, reflecting a material amount of senior secured debt
in the capital structure.

The outlook is stable.  Proceeds from the notes are expected
largely to be used to refinance existing debt, and to make a
distribution to shareholders.

"The ratings reflect Intcomex's position as a second-tier
distributor of IT products to the Latin American and Caribbean
markets, modest historical earnings and cash flow from operations,
earnings exposure to more volatile end-market economic conditions,
and a leveraged balance sheet," said Standard & Poor's Credit
Analyst Martha Toll-Reed.  These factors are partially offset by
Intcomex's diverse customer base and good growth prospects in the
Latin American PC market.

Founded in 1988, Intcomex's revenues and EBITDA for the 12 months
ended March 31, 2005, were $573 million and $27.3 million,
respectively.  Although fragmented and highly competitive, the
Latin American PC market has good growth potential because of low
PC penetration rates, declining PC prices, and rapid growth of
Internet users.  Intcomex has consistently grown its market
presence and revenue base through internal expansion.  The company
recently acquired Centel, S.A. de C.V., a former subsidiary.
However, additional acquisitions are not expected to be a
strategic priority and are not factored into our current rating
and outlook.


INTERNATIONAL COMMUNICATIONS: Involuntary Chapter 11 Case Summary
-----------------------------------------------------------------
Alleged Debtor: International Communications Group, Inc.
                aka Corban Networks, Inc.
                aka Corban Towers, Inc.
                aka ICG
                3701 West Plano Parkway, Suite 300
                Plano, Texas 75075

Involuntary Petition Date: August 3, 2005

Case Number: 05-38729

Chapter: 11

Nature of Business: The Debtor is a network service provider that
                    allows voice, data and internet bandwidth
                    connectivity to other national carriers and
                    other service providers.  
                    See http://www.corbannetworks.com/

Court: Northern District of Texas (Dallas)

Judge: Harlin DeWayne Hale

Debtor's Counsel: Davor Rukavina, Esq.
                  Munsch, Hardt, Kopf & Harr
                  1445 Ross Avenue, Suite 4000
                  Dallas, Texas 75202
                  Tel: (214) 855-7587

Petitioners' Counsel: James I. Harlan, PLLC
                      2033 West McDermott Drive, Suite 320-170
                      Allen, TX 75013-4716
                      Tel: (214) 514-3134
         
   Petitioners                 Nature of Claim     Claim Amount
   -----------                 ---------------     ------------
   N.W. Lease I, LLC           Breach of             $5,000,000
   5133 Meadowside Lane        Lease Contracts
   Plano, TX 75093
   Attn: Robert A. Esty
         Managing Member

   N.W. Lease II, LLC          Breach of             $1,000,000
   5133 Meadowside Lane        Lease Contracts
   Plano, TX 75093
   Attn: Robert A. Esty
         Managing Member   

   Esty & Associates, Inc.     Failure to pay           $10,000
   5133 Meadowside Lane        Accounts Payable
   Plano, TX 75093
   Attn: Robert A. Esty
         President


JAMES ADAMS: Voluntary Chapter 7 Case Summary
---------------------------------------------
Debtor: James Stephen Adams
        10902 Sedgemoor Circle
        Carmel, Indiana 46032          

Bankruptcy Case No.: 05-14681

Type of Business: The Debtor is the former treasurer of
                  Conseco Inc.

Chapter 7 Petition Date: July 29, 2005

Court: Southern District of Indiana (Indianapolis)

Judge: Frank J. Otte

Debtor's Counsel: Gary Lynn Hostetler, Esq.
                  Hostetler & Kowalik, P.C.
                  101 West Ohio Street, Suite 2100
                  Indianapolis, Indiana 46204
                  Tel: (317) 262-1001
                  Fax: (317) 262-1010

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $10 Million to $50 Million

The Debtor did not file a list of his 20 Largest Unsecured
Creditors.


JON BERKEY: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Jon Harvey Berkey
        1952 Thomas Avenue
        San Diego, California 92109

Bankruptcy Case No.: 05-07076

Chapter 11 Petition Date: August 2, 2005

Court: Southern District of California (San Diego)

Judge: James W. Meyers

Debtor's Counsel: Dennis D. Burns, Esq.
                  7855 Ivanhoe Avenue, Suite 420
                  La Jolla, California 92037

Total Assets: Not provided

Estimated Debts: $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Gulf Coast Bank and Trust     Loan judgment             $562,650
Company
1825 Veterans Boulevard
Metarie, LA 70005

Oakland Commerce Bank         Judgment                   $75,350
888 West Big Beaver Road
Troy, MI 48084

Island Development Group      Lawsuit                    $75,000
c/o A. Stuart Tompkins
1000 Maccabees Center
25800 Northwestern Highway
Southield, MI 48075-1000

Harbor Woodward-40700, LLC    Lease judgment             $55,000

MBNA                          Credit card debt           $34,760

Citibank                      Credit card debt           $23,011

Vafer Investment Group, LLC   Lawsuit                    $19,139

Louis Stinson, Jr., P.A.      Attorneys fees             $15,464

Washington Mutual             Bank debt                  $11,277

Polsinelli, Shalton, Welte,   Attorneys fees             $11,188
Suelhaus, PC

Bruce M. Beals, Esq.          Attorneys fees             $10,664

Jolanta E. Berkey             Interim support            $10,000

Capital One                   Credit card debt            $6,602

Bank of America               Judgment                    $6,031

Dysart & Dubick, LLP          Attorneys fees              $4,942

Pacific Bell / SBC            Phone debt                  $4,646

MCI                           Phone debt                  $4,024

Texaco-Shell                  Credit card debt            $3,767

Ronald J. Warren, M.F.T.      Professional fees           $3,475

Chevron                       Credit card debt            $1,759


KAISER ALUMINUM: Wants to Fix Solicitation & Voting Procedures
--------------------------------------------------------------
Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, reminds Judge Fitzgerald that Kaiser
Aluminum Corporation, together with Kaiser Aluminum & Chemical
Corporation and 19 of their subsidiaries, filed their plan of
reorganization and a related disclosure statement on June 29,
2005, and a hearing to consider the adequacy of their Disclosure
Statement explaining the Plan is scheduled for September 1, 2005.

Concurrent with the filing of their Chapter 11 Plan and the
Disclosure Statement Hearing, the Remaining Debtors ask Judge
Fitzgerald to approve a set of uniform noticing, balloting, voting
and tabulation procedures to be used in connection with asking
creditors to vote to accept the Plan.  The Solicitation and
Tabulation Procedures also include special provisions relating to
holders of Channeled Personal Injury Claims, other than Indirect
Channeled PI Claims, and holders of Voting Debt Securities,
Interest in KAC or KACC and Senior Subordinated Notes.

The Debtors ask the U.S. Bankruptcy Court for the District of
Delaware to establish August 29, 2005, as the Record Date, which
is the date that will separate creditors who can vote from
creditors who cannot.  Rule 3017(d) of the Federal Rules of
Bankruptcy Procedure provides that, for the purposes of vote
solicitation, "creditors and equity security holders will include
holders of stock, bonds, debentures, notes, and other securities
of record on the date the order approving the disclosure statement
is entered or another date fixed by the court, for cause, after
notice and a hearing."  Bankruptcy Rule 3018(a) contains a similar
provision regarding determination of the record date for voting
purposes.

Rule 3017(d) further identifies these materials that must be
provided to holders of claims and equity interests to solicit
their votes and provide adequate hearing notice on Plan
confirmation:

   (1) the Plan or its Court-approved summary;

   (2) the disclosure statement approved by the Court;

   (3) notice of time within which acceptances and rejections of
       the Plan may be filed; and

   (4) other information as the Court may direct, including any
       Court opinion approving the disclosure statement or a
       Court-approved summary of the opinion.

                    The Solicitation Package

The Remaining Debtors intend that the Solicitation and Tabulation
Agent will commence mailing the Solicitation Packages not less
than 35 days before August 15, 2005, to:

   * all persons or entities that have filed proofs of claim on
     or before the record date for voting;

   * all persons listed in the Schedules of Assets and
     Liabilities as holding liquidated, non-contingent,
     undisputed claims as of the record date for voting;

   * all other known holders of claims against, or equity
     interests in, the Remaining Debtors, if any;

   * all parties-in-interest that have filed notices in
     accordance with Bankruptcy Rule 2002 in the Debtors'
     Chapter 11 cases on or before the record date for voting;

   * counsel to the Debtors' postpetition lenders;

   * the indenture trustees;

   * the Securities and Exchange Commission; and

   * the United States Trustee.

The Remaining Debtors also propose that the appropriate form of
Ballot will be distributed to claimholders in these classes
entitled to vote to accept or reject the Plan:

   Ballot No.   Description
   ----------   -----------
       1        Ballot for Convenience Claims in Class 2;

       2        Ballot for Canadian debtors PBGC Claims in
                Class 4;

       3        Individual ballot to be returned directly to the
                solicitation and tabulation agent for Class 5
                (Asbestos PI Claims), Class 6 (CTPV PI Claims),
                Class 7 (NIHL PI Claims) and Class 8 (Silica PI
                Claims);

       4        Master Ballot for Classes 5, 6, 7 and 8;

       5A       Individual ballot to be returned directly to the
                solicitation and tabulation agent for Subclass 9B
                (General Unsecured Claims) in respect of 9-7/8%
                Senior Notes, 10-7/8% Senior Notes, 7-3/4% SWD
                Revenue Bonds and 7.60% SWD Revenue Bonds;

       5B       Individual ballot to be returned directly to a
                Master Ballot Agent for General Unsecured Claims
                in Subclass 9B, in respect of the Form B Debt
                Securities Individual Ballot;

       6        Master Ballot for Subclass 9B;

       7        Individual ballot for Subclass 9B in respect of
                6-1/2% RPC Revenue Bonds; and

       8        Ballot for other subclass 9B.

Ms. Newmarch relates that Class 1 (Unsecured Priority Claims),
Class 3 (Secured Claims), Class 10 (Canadian Debtor Claims) and
Class 15 (Other Old Stock Interests) under the Plan are impaired
and, therefore, are conclusively presumed to accept the Plan
pursuant to Section 1126(f) of the Bankruptcy Code.  Furthermore,
holders of claims in Class 11 (Intercompany Claims and KACC, as
sole holder of interests in Class 13 (Kaiser Trading Old Stock
Interests), are deemed to have accepted the Plan.

With respect to Class 14 (KACC Old Stock Interest) under the
Plan, the claimholders will receive nothing and are conclusively
presumed to have rejected the Plan, while KAC is deemed to have
accepted the Plan.  Holders of claim or interests in Subclass 9A
of Class 9 (Senior Subordinated Note Claims) and Class 12 (KAC
Old Stock Interests) will receive nothing and are presumed to have
rejected the Plan.

For those reasons, Ms. Newmarch says the solicitation of Subclass
9A in Class 9 and Classes 1, 3, and 10 through 15 under the Plan
is not required, and no Ballots have been proposed for creditors
and interest holders in those classes.

Certain beneficial owners hold voting debt securities through
brokers, banks, dealers, or other agents or nominees.  Ms.
Newmarch informs the Court that each Master Ballot Agent will
receive both:

   (i) a Debt Securities Master Ballot to be completed by the
       Master Ballot Agent; and

  (ii) Form B Debt Securities Individual Ballots to be completed
       by the Beneficial Owners of the Voting Debt Securities for
       whom the master Ballot Agent provides services.

The Master Ballot Agent will make arrangements to distribute the
Form B Debt Securities to the applicable Beneficial Owners.  The
Agent will then tally on the Debt Securities ballot the votes of
the applicable Beneficial Owners that return the Form B ballots
and return the completed Debt Securities ballot to the
Solicitation and Tabulation Agent.

Ms. Newmarch relates that to be counted as a vote to accept or
reject the Plan, each Ballot must be properly executed, completed,
and transmitted to the Solicitation and Tabulation Agent so as to
be received no later than 5:00 p.m. (prevailing Eastern Time) on
October 21, 2005.  The deadline for the Beneficial Owners to
return their Form B Debt Securities ballots to the Master Ballot
Agent will be on October 19, 2005.

             Solicitation and Tabulation Procedures

The Remaining Debtors have established standards and protocols for
the voting and tabulation of the Ballots:

   (1) A claim will be deemed temporarily allowed for voting
       purposes equal to the amount of a timely filed proof of
       claim.

   (2) If a claim is deemed allowed in accordance with the Plan,
       it will be temporarily allowed for voting purposes in the
       deemed allowed amount as indicated in the Plan.

   (3) If a claim is marked as contingent, unliquidated or
       disputed on its face, that claim will be temporarily
       allowed for the amount marked on the claim as non-
       contingent, liquidated and undisputed, or $1.00 if no
       amount is clearly marked.

   (4) If it is a priority claim but is listed in the Schedules
       as non-priority or priority only in part, that claim will
       be temporarily allowed as non-priority claim equal to the
       lesser of the entire claim amount or the non-priority
       claim, provided that claim is not marked as contingent,
       unliquidated or disputed.

   (5) If a claim has been estimated or otherwise allowed for
       voting purposes, that claim will be temporarily allowed in
       an amount so estimated or allowed by the Court.

   (6) If a claim is listed in the Schedules as contingent,
       unliquidated or disputed, and a proof of claim was not
       timely filed, that claim will be disallowed for voting
       purposes.

   (7) If the Debtors have filed and served an objected to a
       claim at least 20 days before a voting deadline, that
       claim will be temporarily allowed or disallowed, unless it
       is estimated or allowed by the Court before the voting
       deadline.

   (8) With respect to the Channeled Personal Injury Claims, each
       holder will have a single vote for $1.00.

   (9) With respect to claims asserted by holders of Voting Debt
       Securities, the claim amounts will be lesser of:

       -- the amounts provided to the Remaining Debtors by the
          corresponding Indenture Trustee on the list of record
          holders; or

       -- the amounts identified by an individual record holder
          on an appropriate ballot or a Master Ballot Agent on a
          Debt Securities Master Ballot.

  (10) If a claimholder identifies a claim amount on its ballot
       that less than the amount calculated, the Remaining
       Debtors will reserve the right to request that the Court
       temporarily allow the claim for voting purposes in the
       lesser amount identified on the ballot.

The Remaining Debtors also propose additional tabulation
procedures:

   (a) Only Ballots cast by claimants that are entitled to vote
       will be counted as votes to accept or reject the Plan.

   (b) Only those Ballots that are actually received by the
       Solicitation and Tabulation Agent will be counted as
       Votes.

   (c) Any Ballot that is incomplete, unsigned, and illegible,
       and contains insufficient information to identify the
       claimant will not be counted to vote on the Plan.

   (d) Any Ballot that is properly completed, executed and timely
       returned but does not indicate an acceptance or rejection
       of the Plan will not be counted as either a vote to accept
       or reject a Plan.

   (e) Creditors will be required to vote all of their claims
       within a particular class under the Plan and may not split
       their votes that partially rejects and accepts the Plan
       will not be counted.

   (f) If a creditor casts more than one Ballot voting the same
       claim, the last-date Ballot received before the Voting
       Deadline will be deemed to reflect the voter's intent and
       thus will supersede any prior Ballots.

   (g) If multiple Ballots are received from different holders
       purporting to hold the same claim, the latest-date Ballot
       that is received before the Voting Deadline will be the
       Ballot that is counted.

   (h) If multiple ballots are received from a claimholder and
       someone purporting to be that holder's attorney or agent,
       the Ballot received from the claimholder will the Ballot
       that is counted, and the vote of the purported attorney or
       agent will not be counted.

   (i) The tabulation of Ballots in connection with the claims in
       respect of the Voting Debt Securities will also be subject
       to the special provisions for those claims.

If any creditor seeks to challenge the allowance of its claim to
vote on the Plan, the Debtors ask the Court to direct that
creditor to file a motion for an order pursuant to Bankruptcy
Rule 3018(a) temporarily allowing its claim in a different amount
for voting purposes.  A Creditor's Rule 3018(a) Motion must be
filed 10 days after the later of the date of service of the
Confirmation Hearing Notice and the date of service of notice of
an objection, if any, to that claim.

        Special Procedures for Direct Channeled PI Claims

Ms. Newmarch explains that the Remaining Debtors are mailing
copies of a notice and a Certified Plan Solicitation Directive by
first-class mail to all known attorneys representing holders of
Direct Channeled PI Claims.  The Remaining Debtors request that
each PI attorney complete and return the Directive to the
Solicitation and Tabulation Agent on or before August 22, 2005.

Ms. Newmarch states that the Directive permits each PI attorney to
direct the Solicitation Tabulation Agent according to these
procedures:

   * If a PI attorney certifies that he has the authority under
     applicable bankruptcy or non-bankruptcy law to vote on the
     Clients' behalf, the PI attorney may direct the Agent to
     serve him with one Solicitation Package and one Master
     ballot on which the PI attorney must record the votes on the
     Plan for each clients.

   * If a PI attorney does not have the authority to vote the
     clients' Direct Channeled PI Claims, or he prefers to have
     the clients cast their own votes on the Plan, the PI
     attorney may direct the Solicitation and Tabulation Agent to
     solicit votes directly from the clients, or to deliver the
     Solicitation Packages to the attorney, who will, in turn,
     deliver the package to the clients.

   * If a PI attorney certifies that he is permitted to vote, and
     intends to exercise that power, only for certain of the
     Clients, the PI attorney may direct to be served with one
     Solicitation Package and one Direct Channeled PI Claim
     Master Ballot on which he must record the votes for the
     Master Ballot Clients.

In addition, the PI attorney will also submit a list that
contains the name and social security number of each holder of
the Direct Channeled PI Claim that the attorney represents.  The
Client Lists will be submitted by:

   -- the Voting Deadline;

   -- September 1, 2005, for any Clients who will be served with
      a Solicitation Package by the Solicitation and tabulation
      Agent; and

   -- September 30, 2005, for any Clients on whom the PI attorney
      will serve a Solicitation Package.

To accommodate the additional tabulation activities that must be
performed by the Master Ballot Agents, the Remaining Debtors
further propose that the Debt Securities ballots, if necessary, ay
be submitted by facsimile so that they are received by the
Solicitation and Tabulation Agent before the Voting Deadline.

In accordance with Bankruptcy Rule 3017(c) and consistent with
their proposed solicitation schedule, the Remaining Debtors ask
the Court to set the confirmation hearing on November 15, 2005.

Objections, if any, to the confirmation of the Plan are due
October 21, 2005, or any other date established by the Debtors
that is at least 35 days after the commencement of the
solicitation period.

Moreover, the Remaining Debtors assert that the issues raised in
any objections to the Disclosure Statement, the Solicitation and
Tabulation Procedures, the Plan confirmation, or any proposed
resolutions to those issues can be more efficiently and
effectively considered by the Court if the parties are permitted
to file a consolidated reply to any objections and, if
appropriate, proposed modifications to the Disclosure Statement or
the Solicitation Procedures Motion to address those issues, no
later than August 24, 2005.

Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading  
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications.  The Company filed for chapter 11 protection on
February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold
off a number of its commodity businesses during course of its
cases.  Corinne Ball, Esq., at Jones Day, represents the Debtors
in their restructuring efforts.  On June 30, 2004, the Debtors
listed $1.619 billion in assets and $3.396 billion in debts.
(Kaiser Bankruptcy News, Issue No. 74; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


KMART CORP: Court Reduces DeSoto & Haring's Ad Valorem Taxes
------------------------------------------------------------
After reviewing its prepetition books and records, Kmart
Corporation found out that the ad valorem taxes assessed by
DeSoto County, Mississippi, and the Charter Township of Haring,
Wexford County, Michigan, are excessive.

Kimberly J. Robinson, Esq., at Barack Ferrazzano Kirschbaum
Perlman & Nagelberg, notes that the assessments of Kmart's
properties are in excess of their true cash value or market value,
in violation of applicable state laws.

At Kmart's request, the Court reduces the overstated tax claims
filed by the Counties:

    Entity    Claim No.   Asserted Amount   Reduced Amount
    ------    ---------   ---------------   --------------
    DeSoto       41030        352,567           $246,797
    Haring           -        $35,370            $24,759

Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART
Holding Corporation) -- http://www.bluelight.com/-- operates
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam.  The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474).  Kmart emerged from chapter 11 protection on May 6,
2003.  John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts.  The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection.  Kmart bought Sears, Roebuck & Co., for $11 billion to
create the third-largest U.S. retailer, behind Wal-Mart and
Target, and generate $55 billion in annual revenues.  The
waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act expired on Jan. 27, without complaint by the Department of
Justice.  (Kmart Bankruptcy News, Issue No. 99; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


KMART CORP: Lassiters Can Pursue Lawsuit as Court Lifts Injunction
------------------------------------------------------------------
At Charlene and Melvin Lassiter's request, the U.S. Bankruptcy
Court for the District of Delaware lifts the Plan Injunction so
they may proceed with their lawsuit against Kmart Corporation.

On January 31, 2003, unaware of the pendency of the Plan
Injunction, the Lassiters filed a nominal lawsuit against Kmart in
the Court of Common Pleas of Northhampton County, Pennsylvania.

Peter J. Roberts, Esq., at Shaw Gussis Fishman Glantz Wolfson &
Townbin, LLC, in Chicago, Illinois, recounts that the Lassiters
sustained injuries on January 31, 2003, in a shopping center
parking lot owned by Kmart.  

Mr. Roberts points out that various decisions by the Seventh
Circuit in Hawxhurst v. Pettibone Corp., 40 F.3d 175, 179 n.1
(7th Cir. 1994), Hendrix v. Page (In re Hendrix), 986 F.2d 195,
197 (7th Cir. 1993), In re Shondel, 950 F.2d 1301, 1307 (7t Cir.
1991), collectively hold that claimants under a liability
insurance policy have an ultimate right to payment from the
applicable insurance carrier notwithstanding any discharge that a
debtor may have received in bankruptcy.

Judge Sonderby rules that the Lassiters will pursue the State
Court Action solely for the purpose of obtaining a judgment that
may be enforced against any applicable liability insurance
carriers.

Moreover, the Lassiters will not assert administrative expense
claims against Kmart.  Any recovery on the claims will be limited
solely to the proceeds, if any, payable under applicable liability
insurance policies held by Kmart in connection with the Claims.

Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART
Holding Corporation) -- http://www.bluelight.com/-- operates
approximately 2,114 stores, primarily under the Big Kmart or Kmart
Supercenter format, in all 50 United States, Puerto Rico, the U.S.
Virgin Islands and Guam.  The Company filed for chapter 11
protection on January 22, 2002 (Bankr. N.D. Ill. Case No.
02-02474).  Kmart emerged from chapter 11 protection on May 6,
2003.  John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, LLP, represented the retailer in its restructuring
efforts.  The Company's balance sheet showed $16,287,000,000 in
assets and $10,348,000,000 in debts when it sought chapter 11
protection.  Kmart bought Sears, Roebuck & Co., for $11 billion to
create the third-largest U.S. retailer, behind Wal-Mart and
Target, and generate $55 billion in annual revenues.  The
waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act expired on Jan. 27, without complaint by the Department of
Justice.  (Kmart Bankruptcy News, Issue No. 99; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


LARGE SCALE: Transferring Securities Listing to Nasdaq SmallCap
---------------------------------------------------------------
Following a Nasdaq Listing Qualifications Panel determination, the
common stock securities of Large Scale Biology Corporation
(Nasdaq: LSBC) will transfer from the Nasdaq National Market to
the Nasdaq SmallCap market.

The delisting from the Nasdaq National Market is due to the
Company not presently meeting the stockholder's equity requirement
of Marketplace Rule 4450(a)(3).  The Company's common stock had
remained listed during its appeal before a Nasdaq Listing
Qualifications Panel of the determination to delist the Company's
common stock by the staff of the Nasdaq Stock Market on May 18,
2005.  By letter dated August 1, 2005, the Panel determined that
the Company's plan for compliance to meet the stockholders' equity
requirement was not mature enough to warrant an exception.
Pursuant to the Company's prior request, the listing of its common
stock will be transferred to the Nasdaq SmallCap Market.  The
Company meets all Nasdaq SmallCap Market listing requirements
other than bid price, which will be addressed by management and
the Company's Board of Directors after consideration of
alternatives.  The transfer of the Company's common stock to the
Nasdaq SmallCap Market is expected to be effective Aug. 3, 2005.

                       Going Concern Doubt

Deloitte & Touche LLP expressed substantial doubt about Large  
Scale Biology Corporation's ability to continue as a going
concern after it audited the Company's Form 10-K for the fiscal
year ended 2004 due to the Company's history of negative cash
flows and its current cash balance.   

"We continue to take the appropriate steps to address our current  
financial situation," said Ronald J. Artale, LSBC's Chief  
Operating Officer and Chief Financial Officer.

The Company incurred a $4,075,000 net loss for the three months
ended March 31, 2005, compared to a $17,425,000 net loss for the
year ended Dec. 31, 2004.  The Company also reported negative
operating cash flows of $3,074,000 for the three months ended
March 31, 2005, and $14,566,000 in the year ended Dec. 31, 2004.  
These negative cash flows were financed primarily by proceeds from
the Company's IPO in 2000, a private placement of our common stock
during the first quarter of 2004 and loans received during
December 2004 and the first quarter of 2005.

Large Scale Biology Corporation is a product-focused biotechnology  
company using proprietary technologies to develop and manufacture  
recombinant biologics.  The Company's biomanufacturing  
opportunities include vaccines, complex proteins and follow-on  
off-patent therapeutics.  The Company's proprietary systems are  
supported by patents and patent applications.  The Company's  
corporate offices, research and development and its subsidiary  
company, Predictive Diagnostics, Inc., are headquartered in  
Vacaville, California.  The Company's biomanufacturing operation  
is located in Owensboro, Kentucky.


LEAR CORP: Poor Performance Prompts S&P to Pare Ratings to BB+
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured debt ratings on automotive supplier Lear
Corp. to a speculative-grade 'BB+' from 'BBB-'.  At the same time,
the ratings were removed from CreditWatch with negative
implications, where they had been listed on June 27, 2005.  The
outlook is now negative.

"The downgrade reflects the sharp fall in Lear's operating
performance during 2005 because of severe industry pressures,"
said Standard & Poor's credit analyst Martin King.  "It also
reflects our reassessment of the company's business profile given
its high exposure to customers and product segments that are
losing market share."

Southfield, Michigan-based Lear has total debt of about $2.4
billion (including operating leases and securitized accounts
receivable).

Lear reported net income of $19 million for the first half of
2005, excluding special items, a steep decline from $207 million
in profit during the first half of 2004.  The weakened financial
performance by Lear, which makes seating systems and interior
components, primarily results from reduced automotive production
in North America, volatile production schedules, unfavorable
shifts in product mix, and higher raw material costs.

The vehicle production levels of Lear's two largest customers,
Ford Motor Co. (BB+/Negative/B-1) and General Motors Corp.
(BB/Negative/B-1), declined 7% and 11%, respectively, in the first
half of 2005.  Both companies have cut production because of
bloated inventory levels and market-share losses, especially for
sport utility vehicles and light trucks.  Production on nine of
Lear's 15 largest North American platforms declined in the second
quarter anywhere from 2% to 42%.  Lear's content per vehicle on
these nine platforms is almost twice the average content of all
its platforms, and contributes a disproportionate share of Lear's
earnings.

Lear has also had to absorb large increases in raw material costs,
primarily for steel and plastic resins.  Increased costs have come
from direct purchases of these commodities and from price
increases from suppliers.  Lear is incurring increased costs to
help some of its own troubled suppliers, and is pursuing various
initiatives to reduce costs, including in-sourcing and supplier
re-sourcing, but these actions will not fully offset higher
material prices.  After negotiating with its largest customers,
Lear has recovered from them only a modest amount of raw material
costs.


LITFUNDING CORP: Plans to Acquire Chatham Street
------------------------------------------------
LitFunding Corp. (OTC Bulletin Board: LFDG), a provider of
non-recourse cash advance funding to law firms and plaintiffs'
attorneys, entered into a letter of intent to acquire Chatham
Street Financial Services, Inc., located in Westlake Village,
California.  The letter of intent follows over a month of
negotiations and is anticipated to culminate in a definitive
merger agreement whereby Chatham will join the LitFunding Corp.
portfolio of services as a wholly owned subsidiary engaged in real
estate financing.

Dr. Morton Reed, Ph.D., the Company's chief executive officer,
commented, "The addition of Chatham Street Financial Services will
provide LitFunding the opportunity to offer full recourse loans at
competitively low interest rates to our existing attorney
clients."

The parties have not executed definitive agreements and the
closing of the proposed acquisition is contingent on several
conditions, including, but not limited to, the completion of
customary and usual due diligence.  There is no guarantee that the
proposed acquisition will close or otherwise be consummated or
that all the conditions to closing will be satisfied.

LitFunding Corp. (OTC Bulletin Board: LFDG), provides non-recourse
cash advance funding to law firms and plaintiffs' attorneys.  The
company advanced many millions of dollars over the past few years
towards a variety of cases.  Typical advances have ranged between
$10,000 and $2,000,000.

As reported in the Troubled Company Reporter on Aug. 23, 2004,  
LitFunding Corp. and its subsidiary, California LitFunding, both  
Nevada corporations reported that their Second Amended Joint Plan  
of Reorganization (Plan) under Chapter 11 of the Bankruptcy Code  
was confirmed by the United States Bankruptcy Court, Central  
District of California, Los Angeles Division, on May 26, 2004.   
The order confirming that ruling was entered into the court record  
on June 17, 2004 and became effective on June 21, 2004.

As of March 31, 2005, LitFunding's balance sheet reflects a
$1,931,722 stockholder deficit.


MERIDIAN AUTOMOTIVE: Court Extends Removal Period to November 1
---------------------------------------------------------------
The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware extended the period within which Meridian
Automotive Systems, Inc., and its debtor-affiliates may file
notices of removal with respect to prepetition civil actions
through and including Nov. 1, 2005.

As previously reported in the Troubled Company Reporter on
July 7, 2005, Robert S. Brady, Esq., at Young Conaway Stargatt &
Taylor, LLP, in Wilmington, Delaware, told the Court that the
extension will afford the Debtors additional time to make fully
informed decisions concerning removal of each pending prepetition
civil action and will assure that the Debtors not forfeit their
valuable rights under Section 1452.

Headquartered in Dearborn, Mich., Meridian Automotive Systems,
Inc. -- http://www.meridianautosystems.com/-- supplies           
technologically advanced front and rear end modules, lighting,
exterior composites, console modules, instrument panels and other
interior systems to automobile and truck manufacturers.  Meridian
operates 22 plants in the United States, Canada and Mexico,
supplying Original Equipment Manufacturers and major Tier One
parts suppliers.  The Company and its debtor-affiliates filed for
chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos.
05-11168 through 05-11176).  James F. Conlan, Esq., Larry J.
Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at
Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon
L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks,
Esq., at Young Conaway Stargatt & Taylor, LLP, represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed $530 million in
total assets and approximately $815 million in total liabilities.
(Meridian Bankruptcy News, Issue No. 12; Bankruptcy Creditors'
Service, Inc., 215/945-7000).


MESQUITE CREEK: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Mesquite Creek of Clarkston, Inc.
        dba Mesquite Creek Steakhouse
        7228 North Main Street
        Clarkston, Michigan 48346

Bankruptcy Case No.: 05-64598

Type of Business: The Debtor operates a restaurant.

Chapter 11 Petition Date: August 3, 2005

Court: Eastern District of Michigan (Detroit)

Debtor's Counsel: David R. Shook, Esq.
                  412 South Saginaw Street, Suite 300
                  Flint, Michigan 48502
                  Tel: (810) 767-1520

Total Assets: $294,630

Total Debts:  $1,470,129

Debtor's 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Sysco Foods of Detroit        Food and supplies         $300,000
P.O, 33580
Detroit, MI 48223-0580

Clarkston State Bank          All assets sec.           $270,000
15 South Main Street          agreement
Clarkston, MI 48346

Brian Hussey, Jr.             Shareholder loan          $190,000
4999 Cavendish Court
Ann Arbor, MI 48103

State of Michigan             Sales tax                 $180,000
Revenue Division

Stanley Dorfman, MD           Commercial loan           $170,000

Advanceme Inc.                Commercial loan           $135,000

M1575 Associates              Past due rent.            $125,000

Nordic Energy                 Utilities                  $22,000

Harleysville Insurance Co.    Insurance services         $11,172

Follmer Ruzewicz, PC          Accounting fees            $10,000

John Poponea and Assoc.       Consulting fees             $9,463

Midwest Linen Service         Supplies                    $9,396

Paul Cenko                    Accounting                  $6,910

Proforma FD & P Group         Printing and                $6,660
                              uniforms
Otto Liebold & Co.            Food and supplies           $6,630

Merchant Retailers Services   Credit card fees            $4,840

Plunkett and Cooney, PC       Legal fees                  $4,323

Mr. Bread Inc.                Bread                       $2,535

Polar Ice                     Ice and machines            $1,962

Oakland County Treasure       All assets                  $1,704


MIRANT CORP: Wants Payments to Power Island Manufacturers Returned
------------------------------------------------------------------
Mirant Corporation and its debtor-affiliates seek to avoid and
recover fraudulent transfers from entities involved in several
transactions arising from a Master Equipment Purchase and Sale
Agreement entered into with the Power Island Manufacturers.

Specifically, the Debtors want to recover the transfers from:

    a. General Electric Company and General Electric
       International, Inc.;

    b. European Power Island Procurement B.V., and Stichting
       European Power Island; and

    c. Lenders or Investors under certain facilities:

       * Commerzbank AG;
       * ABN AMRO Bank N.V.;
       * Intesabci, S.P.A.;
       * ING Bank, N.V.;
       * The Royal Bank of Scotland PLC;
       * Credit Lyonnais;
       * Danske Bank, A/S;
       * ANZ Investment Bank;
       * Australia and New Zealand Banking Group Limited;
       * Barclays Bank PLC; and
       * BNP Paribas.

                       The Master Agreement

Mirant Asset Development and Procurement B.V., or Mirant Europe,
is an indirect, wholly owned subsidiary of Mirant.  Mirant Europe
is formerly known as Southern Energy Business Development and
Procurement B.V.

In December 2000, Mirant Europe entered into a Master Equipment
Purchase and Sale Agreement with the Power Island Manufacturers
for the acquisition of nine 386-MW engineered equipment packages
or power islands.  The power islands were to be used at electric
generating project sites in Europe.

Mirant guaranteed to the Power Island Manufacturers the
obligations of Mirant Europe.

A special purpose Netherlands limited liability company was
established to act as owner of the power islands -- European
Power Island Procurement B.V.  Stichting European Power Island
held the ownership interest in the Owner.

                           The Facilities

Prior to making any payments under the Master Agreement, Mirant
Europe entered into a temporary off-balance sheet financing or
Bridge Facility, with Westdeutsche LandesBank Girozentrale.  The
Bridge Facility was refinanced through another off-balance sheet
financing, the EUR1.1 billion Power Island Acquisition
Facilities.

Mirant Europe and West LB entered into an Owner Assignment and
Assumption Agreement dated February 15, 2001, assigning all of
Mirant Europe's interest in the Master Agreement to West LB.

Subsequently, European Power and West LB entered into a Purchase
Option and Assignment and Assumption Agreement dated May 25,
2001, assigning all of West LB's interest in the Master Agreement
and certain other contracts to European Power.

                       Participation Agreement

On May 25, 2001, Mirant Europe, European Power, Stichting, the
Lenders and Investors, and Commerzbank AG, New York Branch, as
Administrative Agent, entered into a participation agreement.

The Participation Agreement was amended with ABN AMRO, as Co-Lead
Arranger and Syndication Agent.

European Power and Mirant Europe also entered into an Amended and
Restated Procurement Agency Agreement dated August 13, 2001.  As
procurement agent, Mirant Europe was required to administer the
acquisition and construction of the power islands in accordance
with the terms of the Master Agreement.

Mirant executed and delivered a guaranty on May 25, 2001.  Mirant
unconditionally guaranteed to the beneficiary all amounts payable
by Mirant Europe under the Initial Participation Agreement,
Procurement Agency Agreement and West LB Assignment.

                              Options

The Amended Participation Agreement gave Mirant Europe three
options with respect to the power islands:

    (a) purchase the Owner's interest in each power island and the
        Owner's related interest in the Master Agreement;

    (b) not later than six months prior to the scheduled shipment
        date for a given power island, remarket the power island
        and the related interest in the Master Agreement, and pay
        the Owner an amount of up to approximately 89.9% of the
        project costs as well as remarketing proceeds; or

    (c) not later than three months prior to the shipment date for
        a given power island, enter into a five-year, 100% cash
        collateralized synthetic lease of the power island
        containing the terms to which the parties mutually agreed.

Mirant Europe ultimately concluded that it would not utilize the
power islands.  Consequently, Mirant Europe purchased the rights
to the power islands.  Simultaneously, Mirant Europe exercised
the termination rights with respect to the power islands.

To the extent that the progress payments previously paid equaled
or exceeded the termination amount under the Master Agreement, no
further amount was due.  If the progress payments were less than
the termination amount, then Mirant Europe was required to pay
the deficit.

              Payments Made Under the Purchase Option

In connection with the purchase options, Mirant made payments to
Commerzbank AG, New York Branch:

                                       Power        Amount
    Date        Transferor             Package      in Euros
    ----        ----------             -------      --------
    02/22/02    Mirant Investments
                Europe, B.V.           7,8,9       6,900,000

    04/26/02    Mirant Investments
                Europe, B.V.           5,6         7,400,000

    12/30/02    Mirant                 4           4,500,000

    02/28/03    Mirant                 1,2,3     118,073,950

J. Robert Forshey, Esq., at Forshey & Prostok LLP, in Fort Worth,
Texas, relates that the transfers on February 22 and April 26,
2002, are "Subsidiary Payments," provided to Mirant Investments
Europe B.V. by Mirant.

As a result of the termination of the orders on the power
islands, Mirant was required under the Equipment Guaranty to make
a termination payment to GE International pursuant to the Master
Agreement.

On May 29, 2002, Mirant Europe or Mirant Investments paid
directly to GE International or GE a termination payment totaling
EUR7,092,060.  The funds for the Termination Payment were
provided to Mirant Investments by Mirant.

Mirant Europe paid to GE International or GE a progress payment
totaling EUR9,672,223.  The funds for the GE Progress Payment
were provided by Mirant.

According to Mr. Forshey, none of the power islands were ever
delivered to Mirant Europe.  Thus, in the end, neither Mirant nor
Mirant Europe received anything of value from the transaction in
return for the Guarantees, the Transfers or the GE Payments.
Mirant did not receive fair consideration or reasonably
equivalent value in exchange for either the Guarantees, the
Transfers or the GE Payments.

Mr. Forshey asserts that from and after the dates of the
execution and delivery of the Guarantees, the Transfers and the
Payments:

    (a) Mirant was rendered insolvent;

    (b) Mirant should have reasonably believed that it would incur
        debt beyond its ability to pay when due; and

    (c) Mirant was engaged or about to engage in business or
        transactions for which the remaining capital in its hands
        was unreasonably small in relation to the business or
        transaction.

Mr. Forshey asserts that Mirant is entitled, pursuant to Section
544 (a) and (b) of the Bankruptcy Code, to avoid the obligation
pursuant to the Guarantees, the Transfers and the GE Payments.

In particular, Mirant asks the Court:

    a. for permission to avoid as fraudulent transfer the
       Participation Agreement Guaranty, the Equipment Guaranty,
       each of the Transfers and the GE Payments as fraudulent
       transfers;

    b. for judgment against:

       * the Power Island Manufacturers and all other transferee
         Defendants, jointly and severally for the GE Payments;

       * the Facility Defendants and all other transferee
         Defendants, jointly and severally, for the Transfers; and

    c. to disallow any claims asserted by the Defendants,
       including pursuant to Section 502(d) of the Bankruptcy
       Code.

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


MIRANT CORP: Objects to Bayerische's Multi-Mil. "Avoidable" Claims
------------------------------------------------------------------
Mirant Corporation and its debtor-affiliates object to Claim No.
6046 filed by Bayerische Hypo und Vereinsbank, Cayman Branch,
against Mirant Corp. and Claim No. 6045 filed by HVB against
Mirant Americas Energy Marketing, LP.

On October 11, 2001, MAEM entered into a swap agreement with each
of HVB Risk Management Products, Inc. and Scarlett Resource
Merchants LLC.

MAEM's obligations under the Swaps were guaranteed by Mirant
Corp.

On January 30, 2003, Scarlett assigned its rights and obligations
under the Scarlett Swap to HVB RMP.

On September 2, 2003, HVB RMP assigned to HVB all of its rights,
title and interest in and to the amounts payable to it with
respect to (i) the HVB RMP Swap Master Agreement and (ii) the
Master Guaranty.

             Prepetition Payments Pursuant to the Swaps

On October 15, 2002, MAEM paid $28,751,179 to Scarlett.  On the
same day, MAEM received $3,751,179 from HVB RMP pursuant to the
Swaps.

At the end of 2001, the credit rating of MAEM and Mirant Corp.
were downgraded.

On January 6, 2003, an additional $893,388 was paid as a result
of additional cost attributable to the downgrade.

                     Termination of the Swaps

On August 26, 2003, HVB RMP sent a notice to MAEM, seeking to
terminate the Swaps on the grounds that MAEM's bankruptcy filing
constituted an event of default under the HVB RMP Swap Master
Agreement.

HVB asserted that the HVB RMP Contracts and the Scarlett
Contracts were "safe harbor" contracts under Section 560 of the
Bankruptcy Code.

To ensure that the Swaps were terminated, the Debtors sought and
obtained the Court's authority to reject their contracts with:

    (1) Scarlett Resource Merchants LLC and
    (2) HVB Risk Management Products, Inc.

                        Objection to Claims

On December 15, 2003, HVB filed:

    -- Claim No. 6045 for $222,913,568 against MAEM arising from
       the termination of the Swaps.

    -- Claim No. 6046 for $222,913,568 against Mirant Corp. based
       on the Master Guaranty.

The Debtors assert that the Mirant Claim should be disallowed
because it is based on guarantees, which are avoidable.

The MAEM Claim should be reduced in the amount of the January
2003 Payment, as the January 2003 Payment is avoidable, the
Debtors contend.

While the Debtors have not yet completed their analysis with
respect to the Swaps, the Debtors believe that discovery in
connection with their Objection will demonstrate that:

    (i) the Master Guaranty constitutes a fraudulent obligation
        that may be avoided pursuant to Section 548 of the
        Bankruptcy Code;

   (ii) the Original Guarantees are fraudulent transfers that can
        be avoided under applicable state law pursuant to Section
        544 of the Bankruptcy Code; and

  (iii) the January 2003 Payment is a fraudulent transfer that can
        be avoided under applicable state law pursuant to section
        544 of the Bankruptcy Code.

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


MIRANT CORP: Court Okays Pact Allowing Alstom Power's $3.8M Claim
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas
approved the stipulation inked between Mirant Corporation and its
debtor-affiliates and Alstom Power, Inc. allowing Alstom Power's
general prepetition unsecured claims against:

       Debtor                  Allowed Claim Amount
       ------                  --------------------
       Mirant California            $20,034.97
       Mirant Bowline                10,304.00
       MIRMA                         75,510.83
       Mirant Canal               3,650,000.00

As reported in the Troubled Company Reporter on Mar. 8, 2005,
Alstom, which is in the power generating construction business,
provided goods and services to Debtor affiliates, including,
Mirant Bowline, LLC, Mirant California, LLC, and Mirant Mid-
Atlantic.

On December 16, 2003, Alstom filed four proofs of claim:

   (1) Proof of Claim No. 7222 against Mirant California for
       goods and services in the liquidated and non-contingent
       amount of $20,034.97;

   (2) Proof of Claim No. 7223 against Mirant Bowline for goods
       and services in the liquidated and non-contingent amount
       of $10,304.00;

   (3) Proof of Claim No. 7228 against MIRMA for goods and
       services in the liquidated and non-contingent amount of
       $75,510.83; and

   (4) Proof of Claim No. 7229 against Mirant Canal for work
       performed under the EPC Agreement in the liquidated and
       non-contingent amount of $6,722,000.

The Debtors objected to the claims.  Regarding the first two
claims, the Debtors argued that its books and records did not show
any liability owed by Mirant California or Mirant Bowline to
Alstom.  Regarding the third claim, the Debtors' books and records
showed a liability owed by MIRMA to Alstom of no greater than
$15,040.54.  Regarding the fourth claim, the Debtors argued that
the damages owed to them as a result of Alstom's breach of the EPC
Agreement exceed the amount that the Debtors allegedly owed Alstom
under the EPC Agreement.

The parties have successfully reached a compromise, and ask the
Court to approve their Stipulation.

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


MMVE DEL: Voluntary Chapter 11 Case Summary
-------------------------------------------
Debtor: MMVE Del Campo LLC
        887 Balboa
        Laguna Beach, California 92651

Bankruptcy Case No.: 05-15305

Chapter 11 Petition Date: August 2, 2005

Court: Central District of California (Santa Ana)

Judge: Robert W. Alberts

Debtor's Counsel: Charles W. Daff, Esq.
                  2122 North Broadway #210
                  Santa Ana, California 92706
                  Tel: (714) 541-0301

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

The Debtor has no unsecured creditors who are not insiders.


NATIONAL BEDDING: Ares Management Deal Cues S&P's Negative Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB-' corporate
credit and senior secured bank loan ratings on National Bedding
Co. LLC on CreditWatch with negative implications.  CreditWatch
with negative implications means that the ratings could be
affirmed or lowered following the completion of Standard & Poor's
review.

The CreditWatch placement follows the announcement by Ares
Management LLC and Teachers' Private Capital that they have signed
a definitive agreement to buy National Bedding Co., maker of Serta
mattresses.  "While terms of the transaction were not disclosed,
we expect that National Bedding will be more highly leveraged
following the acquisition, leaving it with a weaker financial
profile," said Standard & Poor's credit analyst David Kang.

Standard & Poor's will continue to monitor developments and will
meet with management to discuss the company's business strategy,
future capital structure, and financial policy before resolving
the CreditWatch listing.

Hoffman Estates, Illinois-based National Bedding is the second-
largest bedding manufacturer in the U.S.


NBTY INC: Earns $16,000,000 of Net Income in Third Quarter
----------------------------------------------------------
NBTY, Inc. (NYSE: NTY), a leading global manufacturer and marketer
of nutritional supplements, posted results for the fiscal third
quarter ended June 30, 2005.

For the fiscal third quarter, the Company's sales increased to
$439 million compared to sales of $400 million for the fiscal
third quarter ended June 30, 2004.   Net income for the fiscal
third quarter ended June 30, 2005, was $16 million, or $0.23 per
diluted share, compared to $26 million, or $0.37 per diluted share
for the fiscal third quarter ended June 30, 2004.

Results were affected by asset impairment charges of $11 million,
or $0.14 per diluted share, related to Vitamin World, consisting
of a write off of $8 million of goodwill and a write off of
$3 million for leasehold improvements.  These asset impairment
charges are required by accounting principles, and are the result
of the continued adverse business climate in the specialty retail
channel in the United States.

For the first nine months of fiscal 2005, sales were $1.3 billion,
compared to $1.2 billion for the first nine months of fiscal 2004.
Net income for the first nine months of fiscal 2005 was $67
million, or $0.97 per diluted share, compared to $91 million, or
$1.31 per diluted share, for the first nine months of fiscal 2004.
Results for the first nine months of fiscal 2005 were also
affected by the aforementioned $11 million Vitamin World
impairment charges.

During the fiscal third quarter of 2005, NBTY agreed to acquire
substantially all the assets of Solgar(R) from Wyeth for $115
million. Solgar is a prominent supplement company with annual
sales of approximately $105 million for 2004. Solgar's products
are sold in more than 40 countries and at nearly 5,000 retail
locations across the United States. The acquisition is expected to
close on August 1, 2005 and will be financed by a $120 million
five-year term loan.

In addition, during the fiscal third quarter of 2005, NBTY
expanded its presence in Canada with its $8 million acquisition of
SISU Inc. SISU is a Canadian-based manufacturer and distributor of
a premier line of nutritional supplements with annual sales of
approximately $14 million in 2004.

At June 30, 2005, NBTY's total assets were $1.3 billion and
working capital was $434 million. Inventory at June 30, 2005 was
$479 million, representing an increase of $17 million for the
fiscal third quarter of 2005 and an increase of $104 million from
September 30, 2004. Although the Company is attempting to lower
inventories, this increase is primarily the result of the
Company's prior purchase commitments for raw materials in short
supply for the joint care product lines. The inventory remains
current.

During the fiscal third quarter, the Company expended $28 million
for property, plant and equipment, including $19 million for a new
420,000 square foot warehouse facility in Hazelton, Pennsylvania.
On July 1, 2005, after the close of the quarter, the Company
acquired a 400,000 square foot building in Augusta, Georgia for
$11 million. NBTY currently has nearly 4 million square feet of
total space for operations, manufacturing and distribution.

Operations

For the fiscal third quarter of 2005, sales for the Wholesale/US
Nutrition division, which markets Nature's Bounty and Sundown
brands, increased 10% to $188 million from $172 million for the
fiscal third quarter of 2004.  The increase in sales reflects the
division's enhanced position in the market place. Product returns
for the fiscal third quarter and first nine months of 2005 were
$11 million and $33 million, respectively, largely resulting from
continued reallocation of shelf space and the decline in the low
carb bar market. US Nutrition continues to drive its mass market
sales utilizing valuable consumer preference sales data generated
by the Company's Vitamin World retail stores and Puritan's Pride
Direct Response/E-Commerce operations.

The North American Retail/Vitamin World division increased sales
by 10% to $59 million for the fiscal third quarter of 2005 from
$53 million for the prior like period. North American Retail
operations reported a pre-tax loss of $15 million during this
quarter compared to a pre-tax loss of $1 million for the fiscal
third quarter of 2004. Results were affected by the aforementioned
$11 million asset impairment charges. Same store sales increased
1% during the fiscal third quarter of 2005. During the fiscal
third quarter of 2005, Vitamin World opened 6 new stores and
closed 11 underperforming stores.  At the end of the quarter, the
North American Retail division operated a total of 655 stores; 552
in the US and 103 in Canada.

NBTY's European Retail division sales increased by 17% to $143
million from $122 million for the fiscal third quarter a year ago.
The European Retail same store sales for the fiscal third quarter
2005 increased 14% (11% in local currency). The European Retail
division continues to leverage its premier status, high street
locations and brand awareness to achieve these results. The
European Retail division's increased sales include sales generated
by Holland & Barrett and GNC stores in the UK, DeTuinen stores in
the Netherlands, and Nature's Way stores in Ireland.  During the
fiscal third quarter of 2005, the European Retail division opened
5 new stores, closed 1 store and at the end of the quarter
operated a total of 609 stores.

Revenues from Direct Response/Puritan's Pride operations for the
fiscal third quarter of 2005 decreased 7% to $49 million from $53
million for the comparable prior period. The total number of
orders received in the third quarter remained unchanged from the
prior like quarter at approximately 664,000. However, as a result
of the Company's decision to lower prices and put pressure on its
competitors, the average order fell from $75 to $69 from the
comparable prior like period. Online sales increased 22% from $12
million in the third quarter of 2004 to $15 million in the current
quarter. Online sales now constitute 30% of total Direct
Response/E-Commerce sales compared with 23% of such sales for the
prior like period. NBTY remains the leader in the direct response
and e-commerce sectors and continues to increase the number of
products available via its catalog and web sites.

NBTY Chairman and CEO, Scott Rudolph, said: "Our strong financial
and industry position allowed us to further capitalize on market
opportunities including the strategic acquisitions of Solgar and
SISU. We remain committed to increasing market share and enhancing
our position in this highly competitive marketplace. We are
confident in the long-term outlook for the Company and our ability
to continue to generate long term growth in both revenue and
market share."

NBTY, Inc. -- http://www.NBTY.com/-- is a leading vertically  
integrated manufacturer and distributor of a broad line of high-
quality, value-priced nutritional supplements in the United States
and throughout the world.  The Company markets approximately 2,000
products under several brands, including Nature's Bounty(R),
Vitamin World(R), Puritan's Pride(R), Holland & Barrett(R),
Rexall(R), Sundown(R), MET-Rx(R), WORLDWIDE Sport Nutrition(R),
American Health(R), GNC (UK)(R), DeTuinen(R) , LeNaturiste(TM) and
SISU(R).

                         *     *     *

As previously reported, Standard & Poor's Ratings Services
affirmed its ratings on vitamin manufacturer NBTY Inc., including
its 'BB' corporate credit rating.

Standard & Poor's removed the ratings from CreditWatch, where they
were placed on June 7, 2005, with negative implications, following
NBTY's announcement of its plans to acquire nutritional supplement
manufacturer Solgar Vitamin and Herb, an operating unit of Wyeth
Consumer Healthcare, a division of Wyeth (A/Negative/A-1) for $115
Million.

At the same time, Standard & Poor's assigned its 'BB' bank loan
rating and a recovery rating of '2' to NBTY's proposed $120
million senior secured term loan A, indicating the expectation of
substantial (80%-100%) recovery of principal in the event of a
payment default.  The outlook on the Bohemia, New York-based
company is negative.  Pro forma total debt outstanding at March
31, 2005, was about $412 million.

The proposed $120 million, five-year senior secured term loan A is
due 2010, or March 15, 2007, if the 8.625% senior subordinated
notes due Sept. 15, 2007, are still outstanding.  Proceeds of the
new term loan A will finance NBTY's pending acquisition of Solgar,
as part of a proposed credit facility amendment that will permit
the acquisition, as well as other modifications to the company's
existing credit facility.  The ratings are based on preliminary
terms and are subject to review upon final documentation.

Also, Moody's Investors Service rated NBTY Inc.'s new $120 million
senior secured term loan A at Ba2.  In addition, Moody's affirmed
NBTY's existing ratings, including its corporate family rating
(formerly, "senior implied rating") of Ba2.  Proceeds from the
term loan (net $115 million) will fund NBTY's pending acquisition
of Solgar from Wyeth.  Notwithstanding the risks associated with a
high-priced, debt-financed acquisition, the ratings affirmation
reflects the strong alignment of Solgar with NBTY's products,
integration capabilities, and long-term growth strategies, as well
as the ongoing solid financial profile and market position of NBTY
in the nutritional supplements industry.  Moody's says the outlook
remains stable.


NORTHWEST AIR: Aug. 20 Workers Strike Looms as Negotiations Fail
----------------------------------------------------------------
The likelihood of an August 20 strike by mechanics, cleaners and
custodians ballooned as Northwest Airlines (Nasdaq:NWAC)
representatives refused to move beyond unacceptable demands in a
last-ditch negotiating session called by the National Mediation
Board -- NMB.

"Northwest's continued refusal to engage in meaningful
negotiations destroyed yesterday's session and left little hope
for a consensual agreement needed to avert a strike," said AMFA
National Director O.V. Delle-Femine.  "There is no use scheduling
another negotiating session unless both parties come prepared to
negotiate."

Mr. Delle-Femine said that in the Aug. 2 session, Northwest
repeated its previous demand that would require AMFA members to
approve a contract in which 53 percent of them would lose their
jobs.  "Common sense should tell Northwest that's a non-starter."
Other demands already deemed non-acceptable by AMFA include pay
cuts for remaining employees of 25-26 percent, along with other
major concessions.

"Even at this late date, Northwest still has not developed a
comprehensive counter-proposal to our last economic proposal that
offered generous 16 percent pay cuts and other important
concessions," he said.  "Northwest's only new offers in
yesterday's session consisted of a single sentence about limited
job protection for remaining employees -- the individuals, not the
positions--and meager profit-sharing, which in the current
economic environment is likely to amount to nothing at all."

"The only logical conclusion you can draw from Northwest's refusal
to take multiple negotiation sessions seriously, and their
rejection of arbitration, is that the company's strategy has
always been to enter bankruptcy in order to get more concessions.
If Northwest goes bankrupt, it will be by choice and they'll have
no one to blame but themselves," Mr. Delle-Femine added.

A strike by AMFA mechanics, cleaners and custodians could begin at
any point after 12:01 a.m. Eastern time on August 20, 2005.  In
July, an overwhelming 92.4 percent of its Northwest members voted
to authorize Mr. Delle-Femine to call a strike.

Mr. Delle-Femine said Northwest is irresponsible for continuing to
claim that outsourcing aircraft maintenance is just as safe and
secure as doing it in-house.  "An update report issued just last
week by the U.S. Department of Transportation's Inspector General
concluded that Federal Aviation Authority oversight of outsourced
aircraft maintenance facilities remains poor."

The report said the FAA has "completed only one of nine promised
actions" and went on to say that "FAA inspections of (domestic)
repair stations were infrequent and did not encompass a review of
all aspects of repair stations' operations."  Regarding inspection
of foreign repair stations, the report said, "The foreign aviation
authorities did not focus on FAA standards during surveillance,
and the inspection documentation provided by the authorities to
FAA was incomplete or incomprehensible."

Mr. Delle-Femine also disputed Northwest claims that replacement
mechanics will keep the airline running on schedule.  "Northwest
executives sound like Eastern Airlines execs of old when they tell
the public maintenance will continue to go smoothly during a
strike.  In the Minneapolis-St. Paul and Detroit hubs, hundreds of
Northwest planes arrive and depart every few hours.  Replacement
mechanics would have to keep up with this high volume while
learning from scratch how to work in this totally unfamiliar
environment.  They won't even know where the tools are.

"It's also no secret that Northwest has one of the airline
industry's oldest fleets, including 150 DC-9s and 20 DC-10s from
as long ago as the 1960s," Mr. Delle-Femine added.  "Our mechanics
grew up with these vintage planes and know all of their
idiosyncrasies and how to keep them flying reliably.  Many of the
replacements will be learning to work on these aircraft for the
first time."

Aircraft Mechanics Fraternal Association --
http://www.amfanatl.org/-- represents more aircraft technicians  
than any other union.  AMFA's craft union represents aircraft
maintenance technicians and related support personnel at Alaska
Airlines, ATA, Horizon Air, Independence Airlines, Mesaba
Airlines, Northwest Airlines, Southwest Airlines and United
Airlines.  AMFA's credo is "Safety in the air begins with quality
maintenance on the ground."  

Northwest Airlines is the world's fifth largest airline with hubs
at Detroit, Minneapolis/St. Paul, Memphis, Tokyo, and Amsterdam,
and approximately 1,500 daily departures.  Northwest and its
travel partners serve nearly 750 cities in almost 120 countries on
six continents.

                         *     *     *

As reported in the Troubled Company Reporter on Nov. 4, 2004,
Moody's Investors Service assigned a (P)B1 rating to Northwest
Airlines, Inc. proposed $975 million guaranteed and secured Senior
Credit Facilities.  The Facilities will be provided in the form of
a five-year term Tranche A Term Facility and a six-year term
Tranche B Term Facility.  The Facilities are intended to replace
the company's $975 million bank line of credit.  They contain
support for creditors similar to that available in the existing
line of credit including guarantees from Northwest Airlines
Corporation and Northwest Airlines Holdings Corporation, and
collateral including aircraft and Northwest Airlines, Inc.'s
Pacific division route rights and slots. Covenant protection is
expected to be at least as beneficial to debt holders under the
new Facilities as it is to the holders of the existing bank line
of credit.  The (P)B1 provisional rating will be replaced by a
permanent rating upon review of the final terms and conditions of
the facilities.  The ratings outlook for Northwest is Negative.

As reported in the Troubled Company Reporter on Jul. 30, 2004,
Standard & Poor's lowered its ratings on Northwest Airlines Corp.
and its Northwest Airlines Inc. subsidiary, including lowering the
corporate credit rating to 'B' from 'B+'.  The 'B+' bank loan
rating was not lowered, and a recovery rating of '1' assigned,
reflecting strong collateral protection for that facility.  Some
enhanced equipment trust certificates were lowered by more than
one notch, reflecting evaluation of collateral coverage and other
protections for individual securities.


NORTHWESTERN CORP: Posts $3.9 Million Net Loss in Second Quarter
----------------------------------------------------------------
NorthWestern Corporation d/b/a NorthWestern Energy (Nasdaq: NWEC)
reported income from continuing operations of $6.4 million or 18
cents per share for the three months ended June 30, 2005, compared
with a loss from continuing operations of $14.4 million in the
same period in 2004.

NorthWestern reported a consolidated net loss of $3.9 million or
11 cents per share in the second quarter of 2005, compared with a
consolidated net loss of $4.8 million in the same period of 2004.  
Results in the second quarter of 2005 included a $10.3 million
after-tax loss from discontinued operations primarily related to
the settlement reached with the securities class action claimants
in the bankruptcy proceedings of Netexit, Inc., a NorthWestern
subsidiary.  Results in the second quarter of 2004 included an
after-tax gain of $9.6 million from discontinued operations
primarily a result of a previously announced settlement with
Avaya.

"Our second quarter results from continuing utility operations
showed significant year-over-year improvement due primarily to
higher gross margins from our regulated electric and natural gas
segments and our unregulated electric segment," said Michael J.  
Hanson, President and Chief Executive Officer of NorthWestern.  
"In addition during the second quarter, we made significant
progress in resolving several of the major remaining issues
associated with our reorganization.  For instance, we reached
agreements in principle to settle the outstanding issues
associated with the Netexit bankruptcy and the PPL Montana
litigation.  These settlements should result in the Company
receiving significant cash payments by year-end 2005."

For the six months ended June 30, 2005, NorthWestern reported
consolidated net income of $15.0 million or 42 cents per share,
an improvement of $2.8 million, or 23.0 percent, over the
$12.2 million reported in the first half of 2004.  This
improvement was primarily related to higher margins and decreased
operating and interest expenses, offset by an increase in income
taxes and the loss on discontinued operations discussed above.
Results from continuing operations for the first half of 2005
were $24.8 million or 70 cents per share, compared with a loss
of $2.3 million in the same period in 2004.

Consolidated revenues for the three months ended June 30, 2005,
were $249.4 million, an increase of 14.5 percent, compared with
$217.8 million reported in the same period in 2004.  Revenues from
regulated electric and natural gas segments increased
approximately $24.4 million primarily due to higher supply costs.  
Unregulated natural gas segment revenues increased $5.5 million
due to higher supply costs, and unregulated electric revenues
increased $4.4 million due primarily to higher market prices.
Revenues for the second quarter were offset by $2.4 million in
higher intersegment eliminations.

For the first six months of 2005, revenues were $584.5 million, an
increase of 11.7 percent, compared with $523.5 million in first
half of 2004. The increase was due primarily to higher supply
costs.

Consolidated gross margin in the second quarter of 2005 was
$118.2 million, a 14.4 percent increase, compared with
$103.3 million in the same period in 2004. Margins in the
regulated gas segment increased $8.7 million due primarily to the
recovery in the second quarter of 2005 of $4.6 million of gas
costs previously disallowed by the Montana Public Service
Commission, while in the second quarter of 2004, the Company
recorded $1.9 million of disallowed gas costs and a $1.3 million
loss on a fixed-priced sales contract. Higher volume sales of $0.8
million to regulated gas transmission and distribution customers
also contributed to the increase. Margins in the regulated
electric segment increased $4.2 million primarily due to $2.5
million in higher volume sales to transmission and distribution
customers and decreases in out-of-market costs of approximately
$1.1 million associated with Montana Qualifying Facility (QF)
contracts. These were offset by a $2.1 million decrease in
wholesale electric revenues due to lower plant availability during
scheduled maintenance. In the second quarter of 2004, the Company
recorded a loss of $2.1 million related to a settlement with a
wholesale power supply vendor. Unregulated electric segment
margins increased $1.8 million primarily due to higher market
prices.

For the first six months of 2005, consolidated gross margin was
$262.9 million, an increase of 11.4 percent, compared with gross
margin of $236.0 million in the same period in 2004.

                  Liquidity and Capital Resources

As of June 30, 2005, cash and cash equivalents were $49.7 million,
compared with $17.1 million at Dec. 31, 2004, and $51.6 million as
of June 30, 2004.  Cash provided by continuing operations totaled
$123.8 million during the six months ended June 30, 2005, compared
with $117.1 million during the six months ended June 30, 2004.  
During the first half of 2005, NorthWestern used existing cash to
fund $31.6 million in capital improvements, repaid $37.5 million
of debt and paid dividends on common stock of $15.7 million.

On June 30, 2005, the Company amended its $225 million senior
secured credit facility into a $200 million unsecured revolving
credit facility.  The amended revolving line of credit matures on
Nov. 1, 2009, and bears interest at a variable rate based upon a
grid tied to the Company's credit rating. The spread ranges from
0.625% to 1.75% over the London Interbank Offered Rate (LIBOR).
The facility currently bears interest at a rate of approximately
4.5%, or 1.125% over LIBOR. Because the amended facility is
unsecured, $225 million of first mortgage bond collateral securing
the previous credit facility was released by the lenders.

Approximately $40 million in additional debt was repaid in July
2005 from available cash, and on Aug. 1, 2005, NorthWestern
utilized the amended revolving line of credit to repay $60 million
of secured term debt that matured.  In moving the $60 million debt
to the line of credit, the Company further lowered borrowing costs
and released an additional $60 million in secured first mortgage
collateral.

"We continue to make significant progress in reducing debt and
improving our capital structure," said Brian B. Bird, Vice
President and Chief Financial Officer.  "Since emergence we have
reduced debt by approximately $155 million which has substantially
reduced our borrowing costs and improved our credit profile.  With
a debt to capitalization ratio of approximately 50 percent, we
have achieved our planned debt reduction efforts."

                2005 Earnings Guidance Reaffirmed

NorthWestern reaffirmed its estimates for 2005 basic earnings of
between $1.30 to $1.45 per share from continuing operations.
The guidance assumes normal weather in the Company's electric and
natural gas service areas and excludes any potential impact from
unforeseen bankruptcy-related expenses and gains or losses from
previously announced asset sales.

                      Quarterly Dividends

NorthWestern previously announced that its Board of Directors
increased its quarterly common stock dividend by 3 cents, or 14%,
from 22 cents to 25 cents per share.  The Board declared the next
quarterly dividend to be payable on Sept. 30, 2005, to common
shareholders of record as of Sept. 15, 2005.

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

                         *     *     *

As reported in the Troubled Company Reporter on July 5, 2005,  
Standard & Poor's Ratings Services placed its 'BB' corporate  
credit rating on NorthWestern Corp. on CreditWatch with negative  
implications pending clarity on Montana Public Power Inc.'s  
June 30, 2005, offer to buy NorthWestern for $1.18 billion plus  
the assumption of $825 million in debt.

Montana Public Power is a newly formed single-purpose entity  
organized to purchase NorthWestern and is ultimately composed of  
the Montana cities of Bozeman, Great Falls, Helena, Missoula, and  
Butte.

"The CreditWatch listing reflects Standard & Poor's lack of  
information about Montana Public Power and the financing and legal  
structure of its bid for NorthWestern," said Standard & Poor's  
credit analyst Gerrit Jepsen.


NORTHWESTERN CORP: Reservoir Superfund Site Consent Decree Lodged
-----------------------------------------------------------------
NorthWestern Corporation d/b/a NorthWestern Energy's (Nasdaq:
NWEC) stipulated agreement outlining the Company's financial and
operational role in the cleanup of the Milltown Reservoir
Sediments Operable Unit has been incorporated into the Consent
Decree lodged with the U.S. District Court of Montana on
Aug. 2, 2005.  The stipulated agreement has been affirmed by all
parties.

The Consent Decree is the formal agreement between the parties
involved in the cleanup of the Milltown Reservoir Sediments
Operable Unit and outlines the responsibilities of each entity.  
The lodged Consent Decree is subject to a 30-day public comment
period.

According to the Stipulation approved last year by the Bankruptcy
Court overseeing the NorthWestern Chapter 11 reorganization, the
terms of which are incorporated into the Consent Decree,
NorthWestern agreed to:

   -- reserve $3.9 million for payment to the State of Montana for
      restoration work at the Milltown Reservoir Sediments site;

   -- offer a conditional transfer of land and water rights at the
      Milltown site to the State or a designee as additional
      Restoration consideration;

   -- complete a land exchange agreement to transfer a 7-mile
      stretch of riverfront property in Alberton Gorge to the Five
      Valleys Land Trust;

   -- reserve an additional $7.5 million to pay the Atlantic
      Richfield Company for remediation costs that the
      Environmental Protection Agency and the State are requiring
      at the site for dam and sediment removal.

In total, NorthWestern Energy will contribute $11.4 million to
effect the removal of the dam and powerhouse, removal of
contaminated sediments, and restoration of the adjacent land.  The
Atlantic Richfield Company is responsible for performing the
agreed upon remediation work as outlined in the Consent Decree.

"The lodging of the Consent Decree is another positive step
forward in a long process to restore the confluence of the
Blackfoot and Clark Fork Rivers," said Mike Hanson, President and
CEO of NorthWestern Energy.  "NorthWestern has completed the
Alberton Gorge land exchange, and we look forward to cooperating
with the relevant agencies, Atlantic Richfield and its remedial
contractor to expedite the remediation and restoration of the
Milltown Reservoir Sediments site once the Consent Decree is
confirmed by the Court."

The Consent Decree will undergo a public comment period prior to
confirmation by the U.S. District Court.  The parties to the
Consent Decree include NorthWestern Corporation, the Atlantic
Richfield Company, the United States of America on behalf of the
U. S. Environmental Protection Agency and the U.S. Department of
the Interior, the State of Montana and the Confederated Salish and
Kootenai Tribes.

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

                         *     *     *

As reported in the Troubled Company Reporter on July 5, 2005,  
Standard & Poor's Ratings Services placed its 'BB' corporate  
credit rating on NorthWestern Corp. on CreditWatch with negative  
implications pending clarity on Montana Public Power Inc.'s  
June 30, 2005, offer to buy NorthWestern for $1.18 billion plus  
the assumption of $825 million in debt.

Montana Public Power is a newly formed single-purpose entity  
organized to purchase NorthWestern and is ultimately composed of  
the Montana cities of Bozeman, Great Falls, Helena, Missoula, and  
Butte.

"The CreditWatch listing reflects Standard & Poor's lack of  
information about Montana Public Power and the financing and legal  
structure of its bid for NorthWestern," said Standard & Poor's  
credit analyst Gerrit Jepsen.


NRG ENERGY: Completes Exchange for $1.35 Billion Senior Sec. Notes
------------------------------------------------------------------
NRG Energy, Inc. (NYSE:NRG), completed its exchange offer of up to
$1.35 billion in 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 exchange offer expired at 5:00 pm, New York City time, on
July 25, 2005.  $1,348,508,000 in aggregate principal amount or
99.89% of the issuers' outstanding 8% second priority senior
secured notes due 2013 were exchanged.  The new notes are
substantially identical to the notes for which they were
exchanged, except that the new notes have been registered under
the Securities Act of 1933, as amended and as a result, the
transfer restrictions and registration rights provisions
applicable to the original notes do not apply to the new notes.

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.


PAR WORLDWIDE: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: The PAR Worldwide Group, Inc.
        fka PAR Marketing of Florida, Inc.
        fka PAR International Circuits, LLC
        fka PAR International Sourcing, Inc.
        fka Micro-Metals Manufacturing, Inc.
        2385 Aerial way
        Brooksville, Florida 34604

Bankruptcy Case No.: 05-15214

Type of Business: The Debtor is a manufacturing,
                  engineering, and sales organization
                  specializing in build to print
                  products.  See http://www.parworldwide.com/

Chapter 11 Petition Date: August 2, 2005

Court: Middle District of Florida (Tampa)

Debtor's Counsel: Alberto F. Gomez, Jr., Esq.
                  Morse & Gomez, PA
                  119 South Dakota Avenue
                  Tampa, Florida 33606
                  Tel: (813) 301-1000      

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                                      Claim Amount
   ------                                      ------------
   EPAC Lim-Electropac Limited                     $369,980
   25-27 Keefer Road
   St. Catherin Ont L2m 6k4

   Tsuding Global Electronic Co.                   $219,286
   No. 32 Ln 290
   Hsin Sheung Hsin Chuang
   Lu Chu Shiang

   SIG/Sistemas de Indentification                 $126,960
   G Caserose 381
   2 Piso

   Electronic Interconnect                          $58,135

   Trenam, Kemker, Scharf, Et al                    $54,793

   Insulated Roofing Contractors                    $53,018

   Construction Dynamics                            $38,764

   LPC Circuits Limited                             $35,658

   EPAC Ccan-Elecropac Canada                       $30,971

   Southern Micro Etch Inc.                         $25,538

   Apollo Circuits                                  $23,977

   Speedmark Transportation                         $23,528

   Hydro Aluminum Extrusion                         $16,389

   Phoenix Metals Co.                               $14,067

   American Express                                 $13,935

   Symbol Technologies Inc./Matrics                 $11,466

   Stainless Steel Service                          $10,890

   Alro Metals                                      $10,514

   ElectroLab                                       $10,454   

   Tampa Bay Bucanners                              $10,064


PARMALAT GROUP: Releases Financial Results Ended June 30, 2005
--------------------------------------------------------------
Parmalat Finanziaria S.p.A. in Extraordinary Administration
reports the operating and financial results of the Parmalat Group
at June 30, 2005.

                     Scope of Consolidation  

The scope of consolidation has been defined using principles that
are consistent with those adopted in preparing the statement of
income and balance sheet at December 31, 2004.  Companies that are
subject to certain restrictions on their management as a result of
local bankruptcy proceedings that have effectively placed them
outside the control of Parmalat Finanziaria S.p.A. in
Extraordinary Administration, and companies in voluntary
liquidation are no longer consolidated on a line-by-line basis.

The current scope of consolidation no longer includes companies in
which the Group held equity investments that were sold after
January 1, 2005.  The corresponding 2004 data have been restated
accordingly on a pro forma basis.  The operations divested in 2005
include the companies that comprised the USA Bakery Division
(Mother's Cake & Cookies, Archway Cookies and three production
units in Canada), which were sold in January 2005, and Parmalat
Uruguay, which was sold in February 2005.  Margherita Yogurt,
which was placed in liquidation in February 2005, has also been
removed from the scope of consolidation.

Following a settlement with the three U.S. companies in Chapter 11
(Parmalat USA Corporation, Farmland Dairies LLC and Farmland
Stremicks Sub LLC) and their respective bankruptcy trustees and
creditors (USA Dairy), the three companies have been permanently
removed from the Parmalat Group.

                       Financial Highlights

                        First Half of 2005
                         (in EUR millions)

                                           Revenues
                               --------------------------------
                               Previous  Previous year  Current
                               year      Pro-Forma      year
                               --------  -------------  -------
     Core Activities            1,820.4        1,820.4  1,839.7
     Non Core Activities          175.9          161.2    125.3
                               --------  -------------  -------
     Total                      1,996.3        1,981.7  1,965.1
                               ========  =============  =======

                                             EBITDA
                               --------------------------------
                               Previous  Previous year  Current
                               year      Pro-Forma      year
                               --------  -------------  -------
     Core Activities              131.8          131.8    142.0
     Non Core Activities          (15.4)         (15.1)    11.1
                               --------  -------------  -------
     Subtotal                     116.5          116.7    153.1
     Proceedings costs            (38.8)         (38.8)   (48.6)
                               --------  -------------  -------
     Total                         77.7           77.9    104.5
                               ========  =============  =======

                                         % of Revenues
                               --------------------------------
                               Previous  Previous year  Current
                               year      Pro-Forma      year
                               --------  -------------  -------
     Core Activities              7.2          7.2        7.7
     Non Core Activities         (8.7)        (9.4)       8.8
                               --------  -------------  -------
     Subtotal                     5.8          5.9        7.8
     Total                        3.9          3.9        5.3
                               ========  =============  =======


                        First Quarter of 2005
                         (in EUR millions)

                                           Revenues
                               --------------------------------
                               Previous  Previous year  Current
                               year      Pro-Forma      year
                               --------  -------------  -------
     Core Activities              845.9          845.9    880.5
     Non Core Activities          110.3          102.9     68.9
                               --------  -------------  -------
     Total                        956.3          948.9    949.4
                               ========  =============  =======

                                             EBITDA
                               --------------------------------
                               Previous  Previous year  Current
                               year      Pro-Forma      year
                               --------  -------------  -------
     Core Activities               50.6           50.6     61.8
     Non Core Activities           (6.2)          (5.9)     4.0
                               --------  -------------  -------
     Subtotal                      44.4           44.7     65.8
     Proceedings costs            (14.6)         (14.6)   (16.5)
                               --------  -------------  -------
     Total                         29.8           30.1     49.3
                               ========  =============  =======

                                         % of Revenues
                               --------------------------------
                               Previous  Previous year  Current
                               year      Pro-Forma      year
                               --------  -------------  -------
     Core Activities              6.0          6.0        7.0
     Non Core Activities         (5.6)        (5.7)       5.8
                               --------  -------------  -------
     Subtotal                     4.6          4.7        6.9
     Total                        3.1          3.2        5.2
                               ========  =============  =======


                      Second Quarter of 2005
                         (in EUR millions)

                                           Revenues
                               --------------------------------
                               Previous  Previous year  Current
                               year      Pro-Forma      year
                               --------  -------------  -------
     Core Activities              974.5          974.5    959.2
     Non Core Activities           65.6           58.3     56.4
                               --------  -------------  -------
     Total                      1,040.1        1,032.9  1,015.7
                               ========  =============  =======

                                             EBITDA
                               --------------------------------
                               Previous  Previous year  Current
                               year      Pro-Forma      year
                               --------  -------------  -------
     Core Activities               81.2           81.2     80.2
     Non Core Activities           (9.2)          (9.2)     7.1
                               --------  -------------  -------
     Subtotal                      72.1           72.0     87.3
     Proceedings costs            (24.2)         (24.2)   (32.1)
                               --------  -------------  -------
     Total                         47.9           47.8     55.2
                               ========  =============  =======

                                         % of Revenues
                               --------------------------------
                               Previous  Previous year  Current
                               year      Pro-Forma      year
                               --------  -------------  -------
     Core Activities              8.3          8.3        8.4
     Non Core Activities        (14.0)       (15.9)      12.5
                               --------  -------------  -------
     Subtotal                     6.9          7.0        8.6
     Total                        4.6          4.6        5.4
                               ========  =============  =======


      * The Core Businesses include the following product
        categories: beverages (milk and fruit juices) and
        functional dairy products, which are sold under
        approximately 30 brands (global and strong local brands)
        primarily in high-potential countries in which there is
        sustained demand for wellness products, consumers are
        willing to pay a premium price for Parmalat brands and
        there is access to leading-edge technologies.

     ** The Noncore Businesses are those that are located in
        countries or engaged in activities that are not
        strategically significant and have been earmarked for
        divestiture.

                         Core Businesses

In the six months ended June 30, 2005, the Group's Core Businesses
reported slightly higher revenues than in the same period last
year.  Revenues were up 1.1%, rising from EUR1,820.4 million at
June 30, 2004, to EUR1,839.7 million at June 30, 2005.  EBITDA
also improved, growing from EUR131.8 million (7.2% of revenues) to
EUR142.0 million (7.7% of revenues).

These data do not reflect the impact of the nonrecurring charges
related to the extraordinary administration proceedings, which
amounted to about EUR48.6 million (EUR38.8 million in 2004).

Revenues for the second quarter of 2005 (difference between the
cumulative figures at June 30 and March 31) rose sharply compared
with the previous quarter (revenues up to 8.9% to EUR959.2 million
compared with EUR880.5 million in the first quarter; EBITDA to
EUR80.2 million, or 29.8% more than the EUR61.8 million earned in
the first three months of the year), but were little changed from
the second quarter of 2004, when revenues totaled EUR974.5
million, (-1.6%) and EBITDA amounted to EUR81.2 million (-1.2%).

Monthly revenues (difference between the cumulative figures at
June 30 and May 31) decreased compared with the same period a year
ago (EUR308.9 million vs EUR336.0 million).  At June 2005
EUR26.4 million, EBITDA were also lower than the amount booked in
June 2004 (EUR30.5 million).

Parmalat provides an analysis of the Group's results in the main
geographic regions in which it operates.

     -- Italy

        The results for the first half of 2005 were somewhat
        lower than those reported in the same period last year,
        with revenues falling from EUR692.0 million to EUR678.2
        million (-2.0%) and EBITDA decreasing from EUR47.3
        million to EUR46.1 million (-2.5%).  The ratio of EBITDA
        to revenues was unchanged.

        While June revenues were down in 2005 compared with June
        2004 (EUR113.5 million compared with EUR117.8 million),
        EBITDA showed a modest increase from EUR7.3 million to
        EUR7.4 million.  If the affiliate Boschi S.p.A. in
        Extraordinary Administration is excluded, the performance
        of the Italian operations improved in the fist six months
        of 2005, with revenues up slightly and EBITDA almost
        unchanged.

        Market data show a modest contraction in the demand for
        fresh milk, but the Group increased its share of the UHT
        segment, due mainly to gains by the Zymil brand.  The
        Parmalat and Kyr product lines performed well in the
        yogurt segment, despite the intense competition that
        characterizes this market.  The fruit juice operations
        also showed good growth.

     -- Spain

        Revenues for the first half of 2005 were down 4.2% to
        EUR109.5 million (EUR114.3 million in 2004), but EBITDA
        increased both in absolute terms (up from EUR7.9 million
        to EUR8.1 million) and as a percentage of revenues (up
        from 7.0% to 7.4%).

        In June 2005, net revenues and EBITDA decreased, totaling
        EUR21.6 million and EUR1.6 million, respectively (EUR23.3
        million and EUR2.0 million, respectively, in 2004), but
        the trend showed signs of improvement compared with the
        earlier months of the year.

        The start of promotional and advertising campaigns for
        products that are traditionally affected by seasonal
        factors (e.g., flavored milk beverages) and products that
        are being launched or repositioned (e.g., Santal Top
        fruit juices and Active Soja) had a positive effect on
        unit sales, which rose enough to offset the impact of
        higher promotional and advertising costs on
        profitability.

        Nevertheless, the Group's companies in Spain are still
        faced with the challenges discussed in previous press
        releases, which include an overall decrease in consumer
        demand and an extremely competitive market environment
        (especially in the yogurt and dessert businesses).

     -- South Africa

        In the first six months of 2005, the South African
        operations reported significantly better results than in
        the same period last year.  Net revenues increased from
        EUR113.1 million to EUR134.4 million (+18.8%) and EBITDA
        jumped 46.2%, rising from EUR9.3 million (8.2% of
        revenues) to EUR13.6 million (10.1% of revenues).

        June revenues totaled EUR21.2 million and EBITDA amounted
        to EUR2.2 million (10.4% of revenues).  Both revenues and
        EBITDA were significantly higher than in June 2004.
        Rising demand from consumers concerned with quality and
        wellness, who were responding to a timely increase in
        advertising and promotional investments; gains in
        production efficiency; and the steadily expanding
        coverage of the distribution network caused unit sales to
        grow in the first half of 2005 (pasteurized cream was the
        sole exception) compared with the same period last year.

        A reduction in overhead and the rise in the value of the
        South African rand versus the euro (+2.9% at the average
        exchange rate for the January-June 2005 period) were also
        positive factors.  Market share was also up in the fruit
        juice, yogurt and cheese segments.

     -- Venezuela

        Even though revenues decreased to EUR71.6 million
        (EUR74.8 million in the first six months of 2004), the
        profitability of the Venezuelan operations improved
        dramatically during the first half of 2005.  EBITDA rose
        both in absolute terms (from EUR2.1 million to EUR6.1
        million) and as a percentage of revenues (from 2.7% to
        8.5%).

        In June 2005, revenues totaled EUR12.6 million and EBITDA
        amounted to EUR0.6 million (4.8% revenues), up from
        EUR12.1 million and EUR0.4 million, respectively, in June
        2004.

        While unit sales were down overall compared with the
        previous year, a shift in the sales mix helped contain
        the decline in revenues.  A reduction in raw material
        costs and overhead, and the successful streamlining of
        the product line account for the improvement in
        profitability.  However, promotional expenses were higher
        than in the same period last year.  Lastly, it is
        important to keep in mind that the data in euros
        presented in this press release reflect the negative
        impact of a slide in the value of the bolivar (-17.7%
        compared with the average exchange rate for the period).

     -- Canada

        In the first six months of 2005, revenues increased to
        EUR599.5 million, or 7.5% more than the EUR557.6 million
        booked in the same period last year.  EBITDA were also
        up, rising from EUR35.6 million to EUR45.4 million
        (+27.5%).

        As a result, the ratio of EBITDA to revenues improved
        from 6.4% to 7.6%.

        In June 2005, the Canadian operations reported higher
        revenues and EBITDA (EUR99.2 million and EUR10.0 million,
        respectively) than in June 2004, when the corresponding
        figures were EUR93.0 million and EUR8.4 million,
        respectively.

        Steady overall unit sales and a reduction in variable
        production costs and overhead are the main reasons for
        this improved performance.

        The Canadian dollar appreciated versus the euro during
        the first six months of 2005, with the average exchange
        rate rising by 3.3% compared with the same period in
        2004.

     -- Australia

        Revenues for the first six months of 2005 grew to
        EUR193.3 million, up from EUR182.6 million in 2004.
        EBITDA were also up, rising both in absolute terms (from
        EUR13.8 million to EUR15.0 million) and as a percentage
        of revenues (from 7.6% to 7.7%).

        In June 2005, net revenues totaled EUR32.6 million and
        EBITDA increased to EUR2.5 million (EUR2.1 million in
        June 2004).

        Higher unit sales (especially pasteurized milk and
        yogurt) and a shift in the sales mix contributed to these
        improved results.  At the same time, the launch of new
        streamlining projects (closure of two production
        facilities, exit from unprofitable product areas and
        markets and divestiture of non-strategic assets, such as
        a Coca-Cola bottling franchise) offset the negative
        impact of the higher prices paid for milk and packaging
        materials during the first half of 2005.

        There was no significant difference between the average
        exchange rates for the first six months of 2005 and
        2004.

                       Non-core Businesses

In the first six months of 2005, the Group's Non-core Businesses
reported revenues of EUR125.3 million, a decrease of 22.3% from
pro forma revenues of EUR161.2 million in the same period last
year.

However, even though net revenues were down, chiefly as a result
of the divestiture of the Mexican operations in 2004, EBITDA
improved from a negative EUR15.1 million to a positive
EUR11.1 million, due mainly to the successful implementation of
cost cutting programs by the Group's other operations.

Revenues for the month of June were EUR17.8 million and EBITDA
amounted to EUR1.5 million.

                       NET FINANCIAL POSITION

                    Highlights (in EUR millions)

                               Balance     Balance     Balance
                               as at       as at       as at
                               12/31/04    05/31/05    06/30/05
                               --------    --------    --------
Short term financial assets      (375.6)     (354.6)     (354.2)
   broken down as:

   Financial assets not
   held as fixed assets            (0.4)       (0.6)       (0.7)

   Liquid assets                 (375.2)     (354.0)     (353.5)

Financial accrued income
and prepaid expenses
(incl. intra-Group)               (66.0)      (70.1)      (71.2)
                               --------    --------    --------
Total short-term
financial assets                 (441.6)     (424.7)     (425.4)
                               ========    ========    ========

Financial debts                11,455.3    11,570.6    11,604.8

Financial accrued expenses
& deferred income                  14.3        12.1        16.1
                               --------    --------    --------

Total financial liabilities    11,469.6    11,582.6    11,620.9

Indebtedness owed to
lenders outside the Group/
(Financial assets) of
companies consolidated
line-by-line                   11,028.0    11,157.9    11,195.5

Indebtedness owed by
companies consolidated
line-by-line to companies
that are parties to local
composition-with-creditors
proceedings                       316.6       246.0       250.7

Indebtedness/(Financial
assets) of companies
consolidated line-by-line      11,344.6    11,403.9    11,446.2

Indebtedness/(Financial
assets) of companies not
consolidated line-by-line           7.6         8.0         8.2
                               --------    --------    --------
Total indebtedness/
(financial assets)             11,352.2    11,411.9    11,454.4
                               ========    ========    ========
Guarantees to secure
Indebtedness of companies
That are parties to local
Composition-with-creditors
Proceedings                     1,701.3     1,685.2     1,685.2
                               ========    ========    ========

At June 30, 2005, the net indebtedness of companies consolidated
line by line totaled EUR11,446.2, or EUR101.6 million more than at
December 31, 2004.  This decrease reflects the weakening of the
euro versus the reporting currencies of certain Group companies.  
The translation of local currency amounts into euros caused
indebtedness to rise by about EUR57.0 million.  When stated in
local currencies - especially those of Australia and South Africa
- indebtedness shows a decrease.

Indebtedness denominated in currencies other than local currencies
(mainly in U.S. dollars) increased by about EUR60.0 million, due
to the impact of changes in currency translation rates.  Most of
this indebtedness was owed by Wishaw Trading (Uruguay) and the
Group's Venezuelan companies.

The combined indebtedness owed to lenders outside the Group by
subsidiaries that are parties to local composition-with-creditors
proceedings and, consequently, have been deconsolidated is not
reflected in the net financial position.  Some of these borrowings
are secured by guarantees provided by Parmalat S.p.A. in
Extraordinary Administration and Parmalat Finanziaria S.p.A. in
Extraordinary Administration in the amount of EUR1,685.2 million.  
The indebtedness owed by the Group to companies in special
proceedings that are not consolidated line by line amounted to
EUR250.7 million.  The change, compared with the balance owed at
December 31, 2004 (EUR316.6 million) reflects mainly the
reclassification of the indebtedness payable to the USA Dairy
companies in Chapter 11, following the recent settlement, offset
in part by changes in foreign exchange translations.

No amount has yet been drawn from the EUR105.8 million line of
credit that a pool of banks provided to Parmalat S.p.A. in
Extraordinary Administration on March 4, 2004, and later renewed
until September 2, 2005.

The indebtedness does not reflect the positive impact of the
settlement signed with Morgan Stanley, which generated proceeds of
EUR155.0 million.

A breakdown of the net indebtedness owed to lenders outside the
Group by companies consolidated line by line:

                        (in EUR millions)

                               Balance     Balance     Balance
                               as at       as at       as at
                               12/31/04    05/31/05    06/30/05
                               --------    --------    --------
Companies in EA
   subject to proposed
   composition with
   creditors                    9,813.0     9,896.5     9,894.2

Other companies in EA              89.7        87.9        84.8

Other companies                 1,125.3     1,173.6     1,216.5
                               --------    --------    --------
Total indebtedness/
(financial assets)             11,028.0    11,157.9    11,195.5
                               ========    ========    ========

     Companies Under Extraordinary Administration Included in the
              Proposal of Composition with Creditors

The indebtedness incurred by companies under extraordinary
administration toward lenders outside the Group prior to their
becoming eligible for extraordinary administration is all short-
term, since all of these companies are in default of the covenants
of the respective loan agreements.

At June 30, 2005, liquid assets held by companies included in the
Proposal of Composition with Creditors totaled EUR238.3 million,
compared with EUR249.1 million at December 31, 2004, and
EUR24.0 million when these companies became eligible for
extraordinary administration proceedings.

                        Other Companies

At June 30, 2005, the net indebtedness owed to lenders outside the
Group by the remaining operating and financial companies, which
are consolidated line by line but are not included in the
extraordinary administration proceedings, totaled
EUR1,216.5 million (including EUR727.1 million in long-term
debt), up from EUR1,173.6 million at May 31, 2005.

Foreign exchange fluctuations account for the increase.  Some
Group companies are currently renegotiating their indebtedness in
order to restructure it.

      Principal Companies Under Extraordinary Administration

Financial highlights of the principal Italian companies under
extraordinary administration:

                     Parmalat Finanziaria S.p.A
                   (Amounts in millions of Euros)

                               Balance     Balance     Balance
                               as at       as at       as at
                               12/31/04    05/31/05    06/30/05
                               --------    --------    --------
Short-term financial assets       (24.4)      (24.4)      (23.9)
   broken down as:

   Intra-Group loans
   receivable                     (17.1)      (17.1)      (17.1)

   Financial assets not
   held as fixed assets               -           -           -

   Liquid assets                   (7.4)       (7.3)       (6.8)

Financial accrued income
and prepaid expenses
(including intra-Group)               -        (0.3)       (0.3)
                               --------    --------    --------
Total short-term
financial assets                  (24.4)      (24.6)      (24.2)
                               ========    ========    ========

Financial liabilities
(including intra-Group)         1,286.0     1,289.9     1,289.9
   broken down as:

   Intra-Group loans payable    1,019.5     1,023.3     1,023.3

   Other financial debts          266.5       266.5       266.5

Financial accrued expenses
and deferred income
(including intra-Group)               -         0.1         0.2
                               --------    --------    --------
Total financial
liabilities                     1,286.0     1,290.0     1,290.0
                               --------    --------    --------
Total indebtedness/
(financial assets)              1,261.6     1,265.3     1,265.8
                               ========    ========    ========

     No significant changes have occurred since the previous
month.

     Liquid assets include EUR5.9 million in deposits from
subsidiaries, offset by the recognition of an equal liability.

                          Parmalat S.p.A.
                   (Amounts in millions of Euros)

                               Balance     Balance     Balance
                               as at       as at       as at
                               12/31/04    05/31/05    06/30/05
                               --------    --------    --------

Short-term financial assets      (152.7)     (143.3)     (142.6)
   broken down as:

   Intra-Group
   loans receivable               (32.3)      (33.9)      (33.9)

   Financial assets not
   held as fixed assets               -           -           -

   Liquid assets                 (120.4)     (109.5)     (108.7)

Financial accrued income
and prepaid expenses
(including intra-Group)               -        (0.1)       (0.2)
                               --------    --------    --------
Total short-term
financial assets                 (152.7)     (143.5)     (142.7)
                               ========    ========    ========

Financial liabilities
(including intra-Group)         3,766.7     3,765.7     3,765.7
   broken down as:

   Intra-Group
   loans payable                  997.2       936.6       936.6

   Other financial debts        2,769.6     2,829.0     2,829.0

Financial accrued expenses
and deferred income
(including intra-Group)               -           -           -
                               --------    --------    --------
Total financial
liabilities                     3,766.7     3,765.7     3,765.7
                               --------    --------    --------
Total indebtedness/
(financial assets)              3,614.0     3,622.2     3,622.9
                               ========    ========    ========

     No significant changes occurred since the previous month.

                           Eurolat S.p.A.
                   (Amounts in millions of Euros)

                               Balance     Balance     Balance
                               as at       as at       as at
                               12/31/04    05/31/05    06/30/05
                               --------    --------    --------

Short-term financial assets       (13.5)       (8.9)      (12.2)
   broken down as:

   Intra-Group
   loans receivable                (2.2)       (1.5)       (1.0)

   Financial assets not
   held as fixed assets               -           -           -

   Liquid assets                  (11.3)       (7.4)      (11.2)

Financial accrued income
and prepaid expenses
(including intra-Group)               -        (0.1)       (0.1)
                               --------    --------    --------
Total short-term
financial assets                  (13.5)       (9.0)      (12.3)
                               ========    ========    ========

Financial liabilities
(including intra-Group)           188.2       188.2       188.2
   broken down as:

   Intra-Group loans payable       43.8        43.8        43.8

   Other financial debts          144.4       144.4       144.4

Financial accrued expenses
and deferred income
(including intra-Group)               -           -           -
                               --------    --------    --------
Total financial
liabilities                       188.2       188.2       188.2
                               --------    --------    --------
Total indebtedness/
(financial assets)                174.7       179.3       175.9
                               ========    ========    ========

     Eurolat increased its liquid assets in June 2005.

                            Lactis S.p.A.
                   (Amounts in millions of Euros)

                               Balance     Balance     Balance
                               as at       as at       as at
                               12/31/04    05/31/05    06/30/05
                               --------    --------    --------

Short-term financial assets        (4.4)       (4.8)       (5.6)
   broken down as:

   Intra-Group
   loans receivable                   -           -           -

   Financial assets not
   held as fixed assets               -           -           -

   Liquid assets                   (4.4)       (4.8)       (5.6)

Financial accrued income
and prepaid expenses
(including intra-Group)            (0.0)       (0.0)       (0.1)
                               --------    --------    --------
Total short-term
financial assets                   (4.4)       (4.8)       (5.6)
                               ========    ========    ========

Financial liabilities
(including intra-Group)            18.6        18.6        18.6
   broken down as:

   Intra-Group
   loans payable                    8.6         8.6         8.6

   Other financial
   liabilities                     10.0        10.0        10.0

Financial accrued expenses
and deferred income
(including intra-Group)               -         0.0         0.0
                               --------    --------    --------
Total financial
liabilities                        18.6        18.6        18.6
                               --------    --------    --------
Total indebtedness/
(financial assets)                 14.2        13.8        13.0
                               ========    ========    ========

     Lactis increased its liquid assets in June 2005.

                        Significant Events

  June 1            Settlement with the three U.S. companies in
                    Chapter 11 (Parmalat USA Corporation,
                    Farmland Dairies LLC and Farmland Stremicks
                    Sub LLC) and their respective bankruptcy
                    trustees and creditors (US Dairy).

  June 15           Completion of the paperwork needed to secure
                    mutual recognition of the Prospectus, the
                    publication of which has been authorized by
                    the Consob.  The countries that are expected
                    to allow mutual recognition are: the
                    Netherlands, Sweden, Denmark, Germany, the
                    United Kingdom and Luxembourg.

  June 16           Filing by the Italian bankruptcy judges
                    (Giudici Delegati) of a Decree with the
                    Office of the Clerk of the Bankruptcy Court
                    of Parma regarding the upcoming vote on the
                    Parmalat Proposal of Composition with
                    Creditors and the voting method that should
                    be used.

  June 28           Voting on Parmalat's Proposal of Composition
                    with Creditors gets under way.

  July 8            Parmalat S.p.A. in Extraordinary
                    Administration and Eurolat S.p.A. in
                    Extraordinary Administration execute an
                    agreement with the Italian social security
                    administration (INPS) for the recovery of
                    contributions owed by these two companies to
                    INPS.  Under the agreement, INPS will be
                    allowed to collect directly about EUR25.6
                    million in VAT overpayments belonging to
                    these two companies.

  July 18           Acting with the approval of the Italian
                    Ministry of Production Activities and having
                    received a favorable opinion from the
                    Extraordinary Administration Oversight
                    Committee, the Group accepted the settlement
                    proposal put forth by Morgan Stanley on
                    June 23, 2005 and collected a settlement
                    amount of EUR155.0 million.

Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- generates more than 7 billion
euros in annual revenue.  The Parmalat Group's 40-some brand
product line includes milk, yogurt, cheese, butter, cakes and
cookies, breads, pizza, snack foods and vegetable sauces, soups
and juices and employs over 36,000 workers in 139 plants located
in 31 countries on six continents.  The Company filed for chapter
11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No.
04-11139).  Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at
Weil Gotshal & Manges LLP, represent the Debtors.  When the U.S.
Debtors filed for bankruptcy protection, they reported more than
$200 million in assets and debts.  The U.S. Debtors emerged from
bankruptcy on April 13, 2005.  (Parmalat Bankruptcy News, Issue
No. 59; Bankruptcy Creditors' Service, Inc., 215/945-7000)


PARMALAT USA: Court Nixes Bondi's Claims Against Grant & Deloitte
-----------------------------------------------------------------
As previously reported, Chairman Enrico Bondi filed a complaint
against Parmalat's former auditors and affiliates asserting
professional malpractice, fraud, aiding and abetting fraud,
negligent misrepresentation, aiding and abetting breach of
fiduciary duty, theft and diversion of corporate assets,
conversion of corporate property, unlawful civil conspiracy,
aiding and abetting fraudulent transfer, and deepening insolvency
as causes of action.

Judge Kaplan dismisses Dr. Bondi's claims against Grant Thornton
LLP, Deloitte & Touche LLP and Deloitte & Touche USA LLP.

Judge Kaplan also rejects Dr. Bondi's claims against Grant
Thornton International and Deloitte Touche Tohmatsu on the counts
of:

    -- theft and diversion of corporate assets;

    -- aiding and abetting the fraudulent transfer of property;
       and

    -- deepening insolvency; and

Judge Kaplan further dismisses Dr. Bondi's claim against GTI and
DTT for recovery of damages not incurred by Parmalat's bankruptcy
estate.

The Court denies GTI's and DTT's request to dismiss the remaining
counts in Dr. Bondi's Complaint.

A full-text copy of Judge Kaplan's Opinion, as amended on
July 18, 2005, is available for free at:

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

Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- generates more than 7 billion
euros in annual revenue.  The Parmalat Group's 40-some brand
product line includes milk, yogurt, cheese, butter, cakes and
cookies, breads, pizza, snack foods and vegetable sauces, soups
and juices and employs over 36,000 workers in 139 plants located
in 31 countries on six continents.  The Company filed for chapter
11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No.
04-11139).  Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at
Weil Gotshal & Manges LLP, represent the Debtors.  When the U.S.
Debtors filed for bankruptcy protection, they reported more than
$200 million in assets and debts.  The U.S. Debtors emerged from
bankruptcy on April 13, 2005.  (Parmalat Bankruptcy News, Issue
No. 59; Bankruptcy Creditors' Service, Inc., 215/945-7000)


PETTY INDUSTRIAL: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Petty Industrial Coaters, Inc.
        8000 Daffan Lane
        Austin, Texas 78724

Bankruptcy Case No.: 05-14464

Type of Business: The Debtor offers metal coating, RFI-sheilding,
                  silk screening, paint stripping, and chemical
                  blasting services.

Chapter 11 Petition Date: August 2, 2005

Court: Western District of Texas (Austin)

Judge: Frank R. Monroe

Debtor's Counsel: Steven P. Boney, Esq.
                  Law Office of Steven P. Boney
                  1201 West 24th Street, Suite 105
                  Austin, Texas 78705
                  Tel: (512) 478-9042
                  Fax: (512) 482-8073

Total Assets: $801,300

Total Debts:  $1,110,222

Debtor's 20 Largest Unsecured Creditors:

   Entity                                   Claim Amount
   ------                                   ------------
Baer Engineering                                  $7,075
7756 Northcross Drive
Austin, TX 78757

Sherwin Williams                                  $5,662
424 Peach Street
Waco, TX 76704

Preston Screen Printing                           $5,000
James Preston
1308 September Drive
Austin, TX 78753

Eastern Chem-Lac Corp.                            $3,257

Texaco Fleet                                      $2,571

Gladwin Paint                                     $1,717

Safety-Kleen System                               $1,683

Cardinal Industrial                               $1,605

Chempoint.Com                                     $1,447

U-Line                                            $1,444

Ikon Financial Service                            $1,044

Bioclean U.S.A.                                     $933

Tem Tex Solvents                                    $865

Pitney Bowes Credit                                 $827

Crest Industrial Chemical                           $758

Janitors Warehouse                                  $676

Pack Mark                                           $498

Viking Office Products                              $400

Crown Industrial Supply                             $388

U.S. Specialty Color Co.                            $277


PLAYTEX PRODUCTS: Improved Debt Leverage Cues S&P's Stable Outlook
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on personal
care company Playtex Products Inc. to stable from negative.

At the same time, Standard & Poor's affirmed its ratings on the
Westport, Connecticut-based company, including its 'B' corporate
credit rating.  The company had about $719 million of debt
outstanding as of July 2, 2005.

The revised outlook reflects the company's improved debt leverage
which is currently trending at about 6x over the 12 months ended
July 2, 2005, from 7.5x in fiscal 2003, and expected maintenance
of satisfactory liquidity over the near to intermediate term.
"Playtex has implemented cost savings initiatives that are
expected to help offset marginal sales growth, which is due to the
highly competitive operating environment and increasing commodity
costs in the near term," said Standard & Poor's credit analyst
Patrick Jeffrey.

Playtex's operating performance strengthened over the 12 months
ended July 2, 2005, after facing increased challenges in 2003
because of the highly competitive environment in which it operates
and the maturity of the U.S. consumer products market.  While
revenues declined somewhat during this period due to the sale of
its Woolite business, operating margins rose to about 19% from
17.8% through better cost control management.  However, margins
remain well below historic levels of 23.8% in 2001, and are
expected to continue to be challenged by promotional activity from
competitors and increasing raw material costs over the near term.


PNC COMMERCIAL: Citing Likely Loss, Fitch Junks $4M Class N Certs.
------------------------------------------------------------------
Fitch Ratings downgrades PNC Commercial Mortgage Acceptance
Corp.'s commercial mortgage pass-through certificates, series
2000-C1:

     -- $4 million class N to 'C' from 'CCC'.

In addition, Fitch affirms the following:

     -- $36.3 million class A-1 at 'AAA';
     -- $460.7 million class A-2 at 'AAA';
     -- Interest-only class X at 'AAA';
     -- $34 million class B at 'AAA';
     -- $34 million class C at 'AA-';
     -- $10 million class D at 'A+';
     -- $26 million class E at 'BBB+';
     -- $12 million class F at 'BBB-';
     -- $12 million class G at 'BB+';
     -- $18 million class H at 'BB';
     -- $8 million class J at 'BB-';
     -- $7 million class K at 'B+';
     -- $8 million class L at 'B'.

The $7 million class M certificates remain at 'CCC'. Fitch does
not rate the $1.6 million class O certificates.

The downgrade is due to Fitch's expectation that losses on the
specially serviced assets will reduce the class O balance to zero
and will significantly affect class N.  As of the July 2005
distribution date, the pool has paid down 15.2% to $679 million
from $801 million at issuance.

Midland Loan Services, Inc., as master servicer, collected year-
end 2004 financials for 90.3% of the transaction.  Among those
properties that reported, the weighted average debt service
coverage ratio based on net operating income increased to 1.47
times (x) from 1.42x at issuance for the same loans.

There are currently six assets (2.4%) in special servicing,
consisting of one real estate owned property (0.1%), two 90-day
delinquent loans (1.6%), one 60-day delinquent loan (0.2%), one
30-day delinquent loan (0.2%), and one loan that is current
(0.2%).  The largest specially serviced loan (0.9%) is
collateralized by a retail property in Langhorne, PA.  Based on a
September 2004 appraised value and on recent interest in the
property, minimal losses are anticipated on this loan.

The second largest specially serviced loan (0.7%) is
collateralized by a hotel in South Plainfield, NJ.  The property
has suffered from decreased travel to the area and sizable losses
are expected upon disposition.


PRIMUS TELECOM: June 30 Balance Sheet Upside-Down by $185.4 Mil.
----------------------------------------------------------------
PRIMUS Telecommunications Group, Incorporated (NASDAQ:PRTL), an
integrated communications services provider, reported its results
for the quarter ended June 30, 2005.

PRIMUS reported second quarter 2005 net revenue of $293 million,
as compared to $332 million in the second quarter 2004.  The
Company reported a net loss for the quarter of ($44) million
compared to a net loss of ($15) million in the second quarter
2004.  

"Our fundamental challenge continues to be generating sufficient
margin contribution from new initiatives in broadband, local and
voice-over-Internet protocol (VOIP) services to offset the
declining contribution from our core long distance voice and dial-
up ISP businesses," said K. Paul Singh, Chairman and Chief
Executive Officer of PRIMUS.  "We believe that the path to
creating long-term shareholder value is to achieve scale in the
broadband, local and VOIP businesses, and to do so at investment
levels that permit the Company to achieve its goal of being Free
Cash Flow positive in 2006.

"In order to accomplish our goal of becoming Free Cash Flow
positive in 2006, we are implementing a four-pronged Action Plan
to:

   (1) continue to drive strong revenue growth from the new
       initiatives in the broadband, local and VOIP businesses and
       to concentrate resources on the most promising initiatives;

   (2) achieve margin enhancements from the new initiatives as a
       result of increased scale and by investing in the broadband
       infrastructure in high density locations as well as
       migrating customers onto our network;

   (3) continue cost cutting and cost management programs
       partially to offset margin erosion caused by the continued
       decline of our high-margin core retail revenues; and

   (4) delever the balance sheet and reduce interest expense."

To date, PRIMUS's strategy of refocusing the Company in the
direction of growth businesses is showing clear and tangible
results.  In light of continuing strong sequential revenue growth
from the new initiatives in the second quarter, together with the
performance outlined below, PRIMUS now expects by the fourth
quarter 2005 its new initiatives to generate an aggregate revenue
run rate of approximately $100 million annually.

Another important element of the Company's Action Plan is its
previously specified intent to reduce costs to offset partially
the decline in core long-distance voice and dial-up ISP revenues.
Over the course of the second quarter the Company has implemented
cost reductions targeted to achieve at least $20 million in
annualized savings, and it expects to implement further cost
reductions throughout the remainder of this year.  The Company's
intensive capital expenditure program in support of the new
initiatives, particularly the DSL network build-out in Australia,
is expected to reach a peak of between $50 million to $60 million
during 2005.

"We are pleased with our progress to date in transforming PRIMUS
and growing scale in our broadband, local and VOIP businesses,"
Mr. Singh stated.  "We believe the combination of our investment
and progress to date on these new initiatives has already improved
the competitive positioning and the franchise values of our major
operating subsidiaries.

"As we review our operating results to date and face the challenge
of continued decline in our core long distance voice and dial-up
ISP businesses, it is clear that we must stay the course of
investing to create scale in the new initiatives," Mr. Singh
continued.  "Pursuit of that course, while critical to our long
term success, will make it unlikely that the Company will reach
its $35 million to $50 million Adjusted EBITDA target for 2005.
The management priority remains, however, to be Free Cash Flow
positive in 2006.  We believe this goal can be accomplished
through execution of our four-pronged Action Plan."

               Second Quarter 2005 Financial Results

Second quarter 2005 revenue was $293 million, down 6% sequentially
from $314 million in the prior quarter and down 12% from
$332 million in the second quarter 2004. "The sequential quarterly
revenue decline was primarily due to a $13 million decline in our
European prepaid services revenue, a $8 million decline in retail
long distance and dial-up ISP revenues, and a decline of $5
million as a result of a strengthening United States dollar,
partially offset by $5 million of revenue growth from various new
product initiatives," stated Thomas R. Kloster, Chief Financial
Officer.

"As we discussed in our year-end 2004 and first quarter 2005
earnings releases, we no longer operate a prepaid services
business in the United Kingdom, but rather support service
providers through a wholesale relationship.  As a result, the
revenue decline from first quarter to second quarter was not
unexpected.  During the second quarter, we launched operations in
new geographic markets, including the United States, as a provider
of prepaid services directly to service providers and prepaid
calling card distributors. The revenue trajectory of the prepaid
services business exiting the second quarter should enable it to
return to a position of growth," stated Mr. Kloster.

Net revenue from data/Internet and VOIP services, despite the
decline in dial-up ISP revenues, remained stable from the prior
quarter at $70 million (24% of total net revenue for the quarter)
and up 14% from the second quarter 2004. Geographic revenue mix
changed slightly with 18% coming from the United States, 21% from
Canada, 29% from Europe and 32% from Asia-Pacific. The mix of net
revenue was 79% retail (53% residential and 26% business) and 21%
carrier.

Net loss for the quarter was ($44) million (including a $3 million
net loss from foreign currency transactions, a $3 million write-
down of European prepaid card receivables and card stock
inventory, a $2 million loss on early debt extinguishment, a $1
million asset impairment write-down and $2 million in severance
expenses) compared to a net loss of ($35) million (including a $4
million write-down of inventory and receivables related to
European wireless handsets and a $3 million net loss from foreign
currency transactions) in the first quarter 2005 and a net loss of
($15) million (including a $15 million net loss from foreign
currency transactions and a $2 million loss on sale of assets) in
the second quarter of 2004.

Adjusted Net Income (Loss), as calculated in the attached
schedules, for the second quarter 2005 was a loss of ($39)
million, as compared to a loss of ($31) million in the prior
quarter and income of $1 million for the year-ago quarter.

                 Liquidity and Capital Resources

PRIMUS ended the second quarter 2005 with a cash balance of
$105 million, including $13 million of restricted funds.  During
the quarter, $2 million in cash was used in operating activities.  
Capital expenditures for the quarter were $16 million and Free
Cash Flow, as calculated in the attached schedules, was negative
($18) million.

PRIMUS' long-term debt obligations as of June 30, 2005 were
$646 million, down $10 million from March 31, 2005.  This
reduction includes exchanges of $5 million principal amount of the
Company's 5.75% convertible subordinated debentures due Feb. 15,
2007 for 2.8 million shares of common stock of the Company. Since
June 30, 2005, the Company has exchanged an additional $12 million
principal amount of its 5.75% Convertible Debentures for 7 million
shares of its common stock.

PRIMUS Telecommunications Group, Incorporated (NASDAQ:PRTL) is an
integrated communications services provider offering international
and domestic voice, voice-over-Internet protocol (VOIP), Internet,
wireless, data and hosting services to business and residential
retail customers and other carriers located primarily in the
United States, Canada, Australia, the United Kingdom and western
Europe.  PRIMUS provides services over its global network of owned
and leased transmission facilities, including approximately 250
points-of-presence (POPs) throughout the world, ownership
interests in undersea fiber optic cable systems, 18 carrier-grade
international gateway and domestic switches, and a variety of
operating relationships that allow it to deliver traffic
worldwide.  Founded in 1994, PRIMUS is based in McLean, Virginia.

At June 30, 2005, PRIMUS' total liabilities exceed its total
assets by $185,470,000.

                         *     *     *

As reported in the Troubled Company Reporter on June 30, 2005,
Standard & Poor's Ratings Services lowered its ratings on McLean,
Virginia-based international long-distance telecommunications
carrier Primus Telecommunications Group Inc. and related entities.
The corporate credit rating was lowered to 'CCC+' from 'B-'.  The
ratings were removed from CreditWatch, where they were placed on
May 5, 2005, following the company's first-quarter 2005 earnings
announcement, which included reported EBITDA that were less than
expected by Standard & Poor's.  The outlook is negative.

"The downgrade reflects our assessment of Primus' heightened
business risk, and higher uncertainty about the accompanying level
of EBITDA the company will be able to achieve in 2005," said
Standard & Poor's credit analyst Catherine Cosentino.  EBITDA --
at $10 million for the first quarter of 2005, before writedowns --
dropped by 60% sequentially, and 77% on a year-over-year basis.
The ratings could be lowered within the next one to two quarters
if net cash requirements do not substantially abate from the first
quarter 2005 level of $24 million.


PROTOCOL SERVICES: Section 341(a) Meeting Slated for August 30
--------------------------------------------------------------
The U.S. Trustee for Region 15 will convene a meeting of Protocol
Services, Inc., and its debtor-affiliates' creditors at 1:30 p.m.,
on Aug. 30, 2005, at the Sixth Floor, Suite 630, 402 W. Broadway,
San Diego, California 92101-8511.  This is the first meeting of
creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy
cases.

All creditors are invited, but not required, to attend.  This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

Headquartered in Deerfield, Illinois, Protocol Services, Inc., and  
its subsidiaries offers agency services, database development and  
management, data analysis, direct mail printing and lettershops,  
e-marketing, media replication, and inbound and outbound  
teleservices.  Protocol has offices and operations in California,  
Colorado, Illinois, Louisiana, Florida, Michigan, North Carolina,  
New York, Massachusetts, Connecticut and Canada and employs over  
4,000 individuals.  The Company and its affiliates -- Protocol  
Communications, Inc., Canicom, Inc., Media Express, Inc., and  
3588238 Canada, Inc. -- filed for chapter 11 protection on July  
26, 2005 (Bankr. S.D. Calif. Case Nos. 05-06782 through 05-06786).   
Bernard D. Bollinger, Jr., Esq., and Jeffrey K. Garfinkle, Esq.,  
at Buchalter, Nemer, Fields & Younger, represent the Debtors in  
their restructuring efforts.  When the Debtors filed for  
protection from their creditors, they estimated more than
$100 million in assets and debts.


PROTOCOL SERVICES: Look for Bankruptcy Schedules on Aug. 25
-----------------------------------------------------------          
The U.S. Bankruptcy Court for the Southern District of California
gave Protocol Services, Inc., and its debtor-affiliates, more time
to file their Schedules of Assets and Liabilities, Statements of
Financial Affairs, Schedules of Current Income and Expenditures,
Statements of Executory Contracts and Unexpired Leases and Lists
of Equity Security Holders.  The Debtors have until Aug. 25, 2005,
to filed those documents.

The Debtors explain that because of the complexity of their
finances and business operations, it was impossible for them to
assemble all of the necessary information required to prepare the
Schedules and Statements prior to the filing of their bankruptcy
petitions.

The Debtors are currently assembling and collecting the necessary
information to prepare the Schedules and Statements and anticipate
that they will file those documents on or before the August 25
deadline.  The Court's order is without prejudice to the Debtors'
right to request a further extension to file their Schedules and
Statements.

Headquartered in Deerfield, Illinois, Protocol Services, Inc., and  
its subsidiaries offers agency services, database development and  
management, data analysis, direct mail printing and lettershops,  
e-marketing, media replication, and inbound and outbound  
teleservices.  Protocol has offices and operations in California,  
Colorado, Illinois, Louisiana, Florida, Michigan, North Carolina,  
New York, Massachusetts, Connecticut and Canada and employs over  
4,000 individuals.  The Company and its affiliates -- Protocol  
Communications, Inc., Canicom, Inc., Media Express, Inc., and  
3588238 Canada, Inc. -- filed for chapter 11 protection on July  
26, 2005 (Bankr. S.D. Calif. Case Nos. 05-06782 through 05-06786).   
Bernard D. Bollinger, Jr., Esq., and Jeffrey K. Garfinkle, Esq.,  
at Buchalter, Nemer, Fields & Younger, represent the Debtors in  
their restructuring efforts.  When the Debtors filed for  
protection from their creditors, they estimated more than
$100 million in assets and debts.


PROSTAR INC: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Prostar, Inc.
        dba Prostar Satellite Encryption, Inc.
        12831 Royal Drive
        Stafford, Texas 77477

Bankruptcy Case No.: 05-41977

Type of Business: The Debtor offers satellite encryption and
                  programming signal delivery on both
                  domestic and international levels.  
                  See http://www.prostar-inc.com/

Chapter 11 Petition Date: August 2, 2005

Court: Southern District of Texas (Houston)

Judge: Marvin Isgur

Debtor's Counsel: John Michael Slogar, Esq.
                  John Michael Slogar, P.L.L.C.
                  440 Louisiana Street, Suite 900
                  Houston, Texas 77002
                  Tel: (713) 236-7752

Estimated Assets: $500,000 to $1 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                        Nature of Claim    Claim Amount
   ------                        ---------------    ------------
Space Connections                Trade debt              $68,693
P.O. Box 6067
Burbank, CA 91510-6067

Wiltel Communications LLC        Trade debt              $61,519
P.O. Box 678094
Dallas, TX 75267-8094

American Express                 Trade debt              $44,000
Suite 0001
Chicago, IL 60679-0001

Atlanta International Teleport   Trade debt              $43,713

Crawford Communications          Trade debt              $38,364

PMTV                             Trade debt              $29,854

Insight Telecommunications       Trade debt              $28,837
Corporation

Vista Satellite                  Trade debt              $26,762
Communications Inc.

Fox Sports Enterprise            Trade debt              $25,000

State of New Jersey              Taxes                   $23,000

Daryl De Croix Productions       Trade debt              $22,000

PanAmsat Corporation             Trade debt              $13,990

Alltel                           Trade debt              $13,236

Pacific Teleproductions TV       Trade debt              $10,000

Production & Satellite           Trade debt               $9,338
Services Inc.

Fox Sports World Espanol         Trade debt               $6,454

Lynqx Communications             Trade debt               $4,250

WHYY                             Trade debt               $3,750

UHY - Mann Frankfort             Professional services    $3,675

Video Satellite Associates Inc.  Trade debt               $3,500


PROVIDENT PACIFIC: Hires Michael Lewis as Bankruptcy Counsel
------------------------------------------------------------
Provident Pacific Corporation asks the Honorable Judge Alan
Jaroslovsky of the U.S. Bankruptcy Court for the Northern District
of California, Santa Rosa Division, for permission to employ the
Law Offices of Michael H. Lewis as its bankruptcy counsel

The Law Offices of Michael H. Lewis is expected to:

   (a) advise and consult concerning questions arising in the
       conduct of the administration of the estate, the claims of
       creditors and other parties in interest and the negotiation
       and preparation of a plan of reorganization;

   (b) appear for, prosecute, defend and represent suits arising
       in or related to the Debtor's chapter case;

   (c) investigate and prosecute preference and other
       actions arising under the debtor-in-possession's avoiding
       powers;

   (d) review and object to claims; and

   (e) assist in the preparation of pleadings, motions, notices
       and orders as required for the orderly administration of
       the Debtor's estate.

Mr. Lewis will charge $350 per hour for his legal services.

The Debtor believes that the Law Offices of Michael H. Lewis and
the professionals who will work in the engagement are
disinterested as that term is defined in Section 101(14) of the
U.S. Bankruptcy Code.

Headquartered in Belvedere, California, Provident Pacific
Corporation, filed for chapter 11 protection on June 8, 2005
(Bankr. N.D. Calif. Case No. 05-11435).  Michael H. Lewis, Esq.,
at Law Offices of Michael H. Lewis, represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed total assets of $39,545,023 and total
liabilities of $28,495,982.


PSEG FUNDING: S&P Lifts Ratings on $480 Million Securities
----------------------------------------------------------
Standard & Poor's Ratings Services raised its rating on PSEG
Funding Trust I's $480 million preferred trust securities to
'BBB-' from 'BB+' to reflect the preferred trust securities'
parity status with the Public Service Enterprise Group Inc.'s
unsecured senior debt.

The rating remains on CreditWatch with developing implications.

Public Service Enterprise Group is a utility holding company based
in Newark, New Jersey.


QWEST COMMS: June 30 Balance Sheet Upside-Down by $2.7 Million
--------------------------------------------------------------
Qwest Communications International Inc. (NYSE:Q) reported second
quarter results that benefited from improved revenue trends,
increased operating income and growth in free cash flow.

"Qwest's second quarter results demonstrate that our business and
marketing strategies work," said Richard C. Notebaert, Qwest
chairman and CEO.  "We continued to steadily improve performance,
free cash flows and financial flexibility and are pursuing, in a
disciplined way, opportunities to drive future growth and value
for all of our constituents."

                        Financial Results

Qwest reported second quarter revenue of $3.47 billion compared to
$3.45 billion in the first quarter and $3.44 billion in the second
quarter a year ago.  This represents the fifth consecutive quarter
of stable revenues, as well as year-over-year growth in mass
markets and business revenues.  Wireline revenues benefited from
an improvement in business local, data and Internet revenues, mass
markets growth products, such as long-distance and high-speed
Internet, as well as wholesale settlements.  Qwest's wireless
revenues grew 4.8 percent sequentially to $130 million and 1.6
percent compared with the second quarter of the prior year.

"Improved operating results are driving meaningful expansion in
free cash flow," said Oren G. Shaffer, Qwest vice chairman and
CFO.  "Our ongoing improvement in cash flow generation, coupled
with our recent financing transactions, advances us in our goal to
reduce debt and invest in growth."

Qwest's second quarter operating expenses totaled $3.2 billion, a
decline of 15 percent or $555 million compared to the second
quarter of 2004.  Cost of sales declined $52 million in the second
quarter compared with the second quarter of last year.  The
decrease was driven by continued improvement in productivity and
operating efficiency, and the reduction of fixed and variable
costs as a result of our facilities cost optimization initiatives,
partially offset by an increase in wireless usage-based minutes.

Selling, general and administrative (SG&A) expenses decreased
$441 million for the same period.  In addition, SG&A benefited
from further productivity improvements and continued cost-
containment efforts.

Revenue less cost of sales and SG&A for the second quarter totaled
$991 million compared with $470 million for the second quarter of
2004, including special items.

            Capital Spending, Cash Flow and Interest

Second quarter capital expenditures totaled $352 million including
a sales tax refund of $33 million, compared to $486 million in the
second quarter of 2004.  The company's disciplined approach to
capital spending focuses on investment in key growth areas and
supporting the highest service levels.

Cash generated from operations of $570 million in the second
quarter exceeded capital expenditures by $218 million.  Qwest
expects consistent operating results to be the main driver in
generating improved free cash flow for 2005 of $600 to $800
million before one-time payments.

Interest expense totaled $380 million for the second quarter, a
decline of four percent compared to the second quarter a year ago.

                      Balance Sheet Update

The company reduced total debt less cash and marketable
investments by more than $850 million to $14.7 billion compared to
$15.5 billion in the second quarter of 2004.  The company has
approximately $240 million in remaining maturities in 2005, of
which $179 million was paid in July.  The remainder will be paid
at maturity.

Liquidity continued to improve through a series of transactions in
the quarter, including the issuance of $1.95 billion in notes due
2013 and beyond, as well as tender offers for high coupon debt and
the early retirement of other maturities totaling $1.5 billion.  
Qwest ended the quarter with $2.9 billion in cash and short-term
investments.

Qwest Communications International Inc. (NYSE:Q) --
http://www.qwest.com/-- is a leading provider of high-speed  
Internet, data, video and voice services. With approximately
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 June 30, 2005, Qwest Communications' balance sheet showed a
$2,663,000 stockholders' deficit, compared to a $2,612,000 deficit
at Dec. 31, 2004.


RAM-Z LLC: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Ram-Z, L.L.C.
        dba Schlotzsky's Deli
        9916-D East 43rd Street
        Tulsa, Oklahoma 74146

Bankruptcy Case No.: 05-14844

Type of Business: The Debtor is a Schlotzsky's Deli franchisee.
                  See http://www.schlotzskys.com/

Chapter 11 Petition Date: August 2, 2005

Court: Northern District of Oklahoma (Tulsa)

Judge: Dana L. Rasure

Debtor's Counsel: Mark A. Craige, Esq.
                  Morrel, West, Saffa, Craige & Hicks
                  3501 South Yale
                  Tulsa, Oklahoma 74135
                  Tel: (918) 664-0800
                  Fax: (918) 663-1383

Total Assets: $2,100,000

Total Debts:  $2,540,000

Debtor's 20 Largest Unsecured Creditors:

   Entity                       Nature of Claim     Claim Amount
   ------                       ---------------     ------------
William W. Ramsey               Loans to company      $4,400,000
6721 South Evanston Avenue
Tulsa, OK 74136

The Bolick Children             Judgement on            $162,838
7655 East 41st Street           commercial lease
Tulsa, OK 74145

Coury Properties Inc.           Landlord Claim           $88,832
1350 South Boulder,             arising from
Suite 500                       vacated lease
Tusla, OK 74119

Sygma Network                   A portion of this        $32,300
                                claim is a PACA claim.
                                The remaining portion
                                is for supplies.

Stanfield & O'Dell, P.C. Inc.   Accounting Fees          $25,575

Hall, Estill, Hardwick, Gable   Attorney's Fees          $15,594

Thomas Brothers Produce         PACA claim               $15,579

Tulsa Fruit                     PACA claim               $11,936

Hanover Insurance Company       Insurance premium         $5,469
                                finance agreement

Commercial Linen Supply         Trade Debt                $4,083

Krueger Food Equipment Inc.     Trade Debt                $1,393

IMA                             Uniforms                    $933

NuCo2                           Trade Debt                  $932

Granite Sound Inc.              Trade Debt                  $682

Eagle Paper Plus                Trade Claim                 $631

J.D. Young Leasing, LLC         Copier and office           $499
                                equipment maintenance

Ecolab Pest Inc.                Trade Debt                  $470

Imperial Coffee Service, Inc.   Trade Debt                  $425

Stewart Business Forms, Inc.    Trade Debt                  $395

Lektron Lighting & Supply Inc.  Trade Debt -                $358
                                light bulbs


RELIANT ENERGY: Paying $75M to Louisiana Municipal Police Retirees
------------------------------------------------------------------
Reliant Energy, Inc., (NYSE: RRI) and Deloitte & Touche LLP have
agreed to pay $75 million to settle alleged misrepresentation
claims from investors during the company's 2001 initial public
stock offering.

The settlement covers investors who lost money after purchasing
common shares of Reliant Resources, as Reliant Energy was formerly
known, in its April 30, 2001, initial public offering.  Investors
who purchased Reliant Resources stock on the open market before
May 14, 2002, are also eligible to participate in the settlement.

The Louisiana Municipal Police Employees' Retirement System
(MPERS) acted as lead plaintiffs on behalf of Reliant Resources
investors in federal court in Houston, represented by the law firm
of Berman DeValerio Pease Tabacco Burt & Pucillo.

"We are pleased that we were able to recover a very significant
portion of the money investors lost," said Henry Dean, Chairman of
the MPERS Board of Trustees. "We will continue to use all the
means at our disposal to defend the retirement assets of our
members."

Under the agreement, the Reliant Defendants -- Reliant Energy,
Inc. and former company executives R. Steve Letbetter, Stephen W.
Naeve, Mary P. Ricciardello and Joe Bob Perkins -- will pay $68
million of the settlement, while Deloitte will pay $7 million.

The settlement must be approved by Judge Ewing Werlein, Jr., of
the U.S. District Court for the Southern District of Texas before
it becomes final.  Judge Werlein is overseeing the class action,
captioned In Re: Reliant Energy Securities Litigation, 02-cv-1810.

In their complaint, investors charged that Reliant made false
statements, audited by Deloitte, in the prospectus and
registration statement filed with the U.S. Securities and Exchange
Commission.  Investors accused the defendants of failing to
disclose the company was engaged in "round trip" energy trading
and thereby exaggerating its revenues and trading volume. Round-
trip trading refers to the practice whereby two companies buy and
sell the same amount of power at the same price and at the
same time, resulting in a financial "wash" for both companies.

When news of the practice and the resulting financial restatements
was first disclosed to the market in May 2002, Reliant Energy and
Reliant Resources stock suffered double-digit declines.

"The size of the settlement underscores the positive impact public
pension funds like MPERS can have," said lead counsel Michael
Pucillo, a partner in Berman DeValerio's West Palm Beach, Florida
office.  "The settlement is an excellent result for all investors
in the class."

MPERS manages more than $1 billion in retirement assets for 9,500
full-time police department workers throughout Louisiana.

Berman DeValerio Pease Tabacco Burt & Pucillo prosecutes class
actions nationwide on behalf of institutions and individuals,
chiefly victims of securities fraud and antitrust law violations.
The firm consists of 34 attorneys in Boston, San Francisco and
West Palm Beach, Florida.

Reliant Energy, Inc. based in Houston, Texas, provides electricity
and energy services to retail and wholesale customers in the U.S.  
The company provides energy products and services to approximately
1.9 million electricity customers, ranging from residences and
small businesses to large commercial, industrial, governmental and
institutional customers, primarily in Texas.

Reliant also serves commercial and industrial clients in the PJM
(Pennsylvania, New Jersey, Maryland) Interconnection.  The company
is one of the largest independent power producers in the nation
with more than 19,000 megawatts of power generation capacity in
operation or under contract across the U.S.  These strategically
located generating assets utilize natural gas, wind, fuel oil and
coal.  

The Company's $750,000,000 issue of 6.75% Senior Secured Notes due
Dec. 15, 2014, are rated B+ by Standard & Poor's Ratings Services,
B1 by Moody's Investors Service; and BB- by Fitch Ratings.


RELIANT ENERGY: Settles Shareholder Class Action Suits for $68M
---------------------------------------------------------------
Reliant Energy, Inc. (NYSE: RRI) reported that it has agreed to
settle all shareholder class action lawsuits related to alleged
violations of the securities laws governing the manner in which
certain trading activities of the company were accounted
for during the 1999 to 2001 time frame.  The suits were
consolidated in the U.S. District Court in Houston.  

The class actions include claims for damages on behalf of a class
of purchasers of Reliant stock during the period of April 30,
2001, through and including May 14, 2002.  The settlement, which
is subject to court approval, provides for a total settlement
payment by Reliant of $68 million, of which $61.5 million is
covered by Reliant's director and officer insurance policies.  

Reliant will make a cash payment of $6.5 million as part of the
settlement and pay certain costs associated with the defense of
the litigation.  In addition, Deloitte & Touche LLP, another
defendant in the litigation, has agreed to make a payment
of $7 million, bringing the total value of the settlement to $75
million.

"Today's settlement represents another step forward in our
continuing effort to resolve the legacy issues that relate to
Reliant's historical trading operations," said Joel Staff,
chairman and chief executive officer, Reliant Energy.  "In
addition, it represents a fair and equitable resolution
of this matter for all concerned, including the company, our
shareholders and the class plaintiffs."

Under the terms of the settlement, Reliant does not admit to any
liability by the company or its directors and officers, nor are
there any findings of any violations of the federal securities
laws.  The settlement also includes releases of all claims by the
plaintiffs against certain former officers of Reliant.

Reliant will record a second quarter pre-tax charge of
approximately $8 million (approximately $7 million after-tax)
related to the settlement and associated legal expenses.

Reliant Energy, Inc. based in Houston, Texas, provides electricity
and energy services to retail and wholesale customers in the U.S.  
The company provides energy products and services to approximately
1.9 million electricity customers, ranging from residences and
small businesses to large commercial, industrial, governmental and
institutional customers, primarily in Texas.

Reliant also serves commercial and industrial clients in the PJM
(Pennsylvania, New Jersey, Maryland) Interconnection.  The company
is one of the largest independent power producers in the nation
with more than 19,000 megawatts of power generation capacity in
operation or under contract across the U.S.  These strategically
located generating assets utilize natural gas, wind, fuel oil and
coal.  

The Company's $750,000,000 issue of 6.75% Senior Secured Notes due
Dec. 15, 2014, are rated B+ by Standard & Poor's Ratings Services,
B1 by Moody's Investors Service; and BB- by Fitch Ratings.


SALTON INC: Extends Debt Exchange Offer Until August 15
-------------------------------------------------------
Salton, Inc. (NYSE:SFP) extended the expiration date of its
previously announced private debt exchange offer for its
outstanding:

   -- 10-3/4% Senior Subordinated Notes due 2005; and
   -- 12-1/4% Senior Subordinated Notes due 2008.  

The expiration date has been set for midnight, New York City time,
on Monday, Aug. 15, 2005, unless extended or earlier terminated by
Salton.

None of the securities proposed to be issued in connection with
the exchange offer have been registered under the Securities Act
of 1933, as amended, or any state securities laws and unless so
registered may not be offered or sold in the United States except
pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act and applicable
state securities laws.  Neither the Form 8-K nor the exhibits
attached thereto, nor this press release, constitute an offer to
sell or the solicitation of offers to buy any securities or
constitute an offer, solicitation or sale of any security in any
jurisdiction in which such offer, solicitation or sale would be
unlawful.

Salton, Inc., is a leading designer, marketer and distributor of
branded, high quality small appliances, electronics, home decor
and personal care products.  Its product mix includes a broad
range of small kitchen and home appliances, electronics for the
home, tabletop products, time products, lighting products, picture
frames and personal care and wellness products.  The company sells
its products under a portfolio of well recognized brand names such
as Salton(R), George Foreman(R), Westinghouse (TM),
Toastmaster(R), Mellitta(R), Russell Hobbs(R), Farberware(R),
Ingraham(R) and Stiffel(R).  It believes its strong market
position results from its well-known brand names, high quality and
innovative products, strong relationships with its customers base
and its focused outsourcing strategy.

                         *     *     *

As reported in the Troubled Company Reporter on July 18, 2005,
Standard & Poor's Ratings Services withdrew its 'D' corporate
credit and 'D' subordinated debt ratings on Salton Inc.

Salton has made the June interest payment on its 10.75% senior
subordinated notes within the 30-day grace period provided under
the indenture governing the notes.

As reported in the Troubled Company Reporter on June 17, 2005,   
Standard & Poor's Ratings Services lowered its corporate credit  
rating on Salton Inc. to 'D' from 'CCC'.  At the same time,  
Salton's subordinated debt rating was lowered to 'D' from 'CC'.  

These actions reflect the announcement by Lake Forest, Illinois-  
based Salton that it will not make its interest payment due  
June 15, 2005, on its senior subordinated notes that mature on  
Dec. 15, 2005.


SARAH BENTLEY: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Sarah Brock Bentley
        6860 Peachtree Dunwoody Road, Northeast
        Atlanta, Georgia 30328

Bankruptcy Case No.: 05-73970

Chapter 11 Petition Date: August 1, 2005

Court: Northern District of Georgia (Atlanta)

Debtor's Counsel: Ralph Goldberg, Esq.
                  Ralph Goldberg, PC
                  1766 Lawrenceville Highway
                  Decatur, Georgia 30033
                  Tel: (404) 636-0331

Total Assets: $2,009,785

Total Debts:  $1,101,531

Debtor's 20 Largest Unsecured Creditors:

   Entity                                      Claim Amount
   ------                                      ------------
Saint Joseph Hospital                               $30,000
5665 Peachtree Dunwoody Road
Atlanta, GA 30342

Bankcard Service                                    $27,874
P.O. Box 15137
Bloomington, DE 19866

Chase                                               $23,116
P.O. Box 17202
Bloomington, DE 19886

American Express                                    $15,540

Sears Mastercard                                     $8,584

Rich's Visa                                          $7,471

Wilson, Brock & Irby LLC                             $7,088

Cardmember Service                                   $6,613

Discover                                             $6,432

Bank of America                                      $6,009

Providian                                            $3,976

Chase                                                $3,670

Gainesville Bank and Trust                           $3,060

CitiCard                                             $2,100

AT&T Universal                                       $2,039

Spaulding Regional Hospital                          $2,000

Cardiologist Consultants of North Fulton             $1,800

Bank of America                                      $1,781

Neiman Marcus                                        $1,677

Rich's/Macy                                          $1,000


SIRIUS SATELLITE: S&P Junks Proposed $500 Million Senior Notes
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC' rating to
Sirius Satellite Radio Inc.'s proposed $500 million Rule 144A
senior unsecured notes maturing in 2013.   At the same time,
Standard & Poor's affirmed its existing ratings on the New York,
New York-based satellite radio broadcasting company, including its
'CCC' corporate credit rating.  The new proposed notes will
replace the company's previously proposed $250 million senior
unsecured note offering, which was postponed in the second quarter
of 2005.  Standard & Poor's 'CCC' rating on the $250 million
senior note issue was withdrawn.  The outlook remains stable.

Proceeds will be used to repay $57.4 million in debt and to boost
liquidity. On a June 30, 2005, pro forma basis, Sirius had nearly
$1.1 billion in debt.

"The proposed financing does not significantly alter Standard &
Poor's assessment of Sirius' credit profile, as the benefit from
the added liquidity is offset by the increase in the company's
debt burden," said Standard & Poor's credit analyst Steve
Wilkinson.

The senior unsecured debt rating is the same as the corporate
credit rating as a result of the absence of any higher priority
debt.  However, Sirius will retain flexibility to raise new
secured debt of up to $500 million, and the senior unsecured debt
rating could be lowered one to two notches below the corporate
credit rating if Sirius subsequently issues a large amount of
secured debt.

The very low speculative-grade rating on Sirius reflects the
company's substantial debt load, large projected EBITDA and cash
flow deficits for this start-up business through at least 2006,
and increased rivalry for exclusive programming and subscribers
that may continue to raise both operating costs and the time and
the number of subscribers needed to reach break-even cash flow.
These risk factors are not meaningfully offset by the near-term
benefit of Sirius' sizable liquid assets, and the company's
operational progress.

Sirius' subscriber growth has improved as it has filled some
important product line gaps, secured more meaningful installation
programs with its exclusive automotive partners, and expanded its
retail distribution.  Even so, its only direct competitor, XM
Satellite Radio Holdings Inc. (CCC+/Stable/--), has more than
twice as many total subscribers and faster unit growth because of
its stronger automotive partner support and product innovation.

"Sirius' ability to reach break-even cash flow will require
significantly more subscribers, continued meaningful reductions in
SAC per new user, and cost discipline," said Wilkinson.


SPENCER PATERSON: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Spencer Michael Paterson
        aka Spencer Michael Paterson, MD
        11 Candy Cane Lane
        Santa Claus, Georgia 30436

Bankruptcy Case No.: 05-60792

Chapter 11 Petition Date: August 1, 2005

Court: Southern District of Georgia (Statesboro)

Debtor's Counsel: C. James McCallar, Jr., Esq.
                  McCallar Law Firm
                  P.O. Box 9026
                  Savannah, Georgia 31412
                  Tel: (912) 234-1215

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Locom Tenens.com              Bill for business         $107,295
Box 532869                    Southeastern
Atlanta, GA 30353-2869        Neurologic Associates
                              P.C.

Internal Revenue Department   941 Taxes for business     $58,857
401 West Peachtree St., NW    Southeastern
Atlanta, GA 30365             Neurologic Associates
                              P.C. (payroll taxes)

Lovins Branch & Company P.C.  Accounting bill for        $51,119
                              business Southeastern
                              Neurologic Associates
                              P.C.

BMW Financial Services        Lease of a 2003            $45,970
                              BMW X5 (car was
                              Repossessed on May
                              17, 2005)

Bankers Leasing               Equipment lease for        $43,832
                              business Southeastern
                              Neurologic Associates
                              P.C. (Lease of a
                              Viking System EMG and
                              a EEG Machine)

MBNA America                  Credit card-personal       $43,703

Aztec Financial Services Inc  Equipment leases for       $41,637
                              business Southeastern
                              Neurologic Associates
                              P.C.

Key Business Credit           Personal guaranty          $40,522
f/k/a AMEX Business           on commercial leases
                              for Southeastern
                              Neurologic Associates
                              P.C. (1 Misys
                              Computer System)

American Express              Credit Card                $33,568
                              Personal and for
                              business Southeastern
                              Neurologic Associates
                              P.C.

American Express              Credit Card                $31,826
                              Personal and for
                              business Southeastern
                              Neurologic Associates
                              P.C.

Allergan Sales, LLC           Bill for business          $30,292
                              Southeastern
                              Neurologic Associates
                              P.C.

UNSBANCORP                    Equipment lease for        $17,504
                              business Southeastern
                              Neurologic Associates
                              P.C.

Misys Healthcare Systems      Billing system for         $12,490
                              business Southeastern
                              Neurologic Associates
                              P.C.

Bellsouth Advertising         Bill for business          $11,945
                              Southeastern
                              Neurologic Associates
                              P.C.
                              (advetising)

Providian National Bank       Credit card-personal       $11,629

Clarity Credit Corporation    Bill for business          $11,427
                              business Southeastern
                              Neurologic Associates
                              P.C. (Telephone-
                              Monaural headset
                              system)

Michelle Blewett Tax Office   City taxes for 806          $8,804
                              Maple Drive, 2.75
                              A&C Medical office
                              Building

Key Equipment Finance         Property insurance on       $5,702
                              Leased equipment for
                              Southeastern
                              Neurologic Associates
                              P.C. for 1 Misys
                              Computer System.


STELCO INC: Norambar Gets $40 Million New Credit Facility
---------------------------------------------------------
Norambar Inc. obtained an arrangement for a new credit facility
for operating purposes.  The new credit facility of $40 million
will cover Norambar Inc. and Fers et Metaux Recycles Ltee and
replace the old facility of $30 million.  The facility expires
January 28, 2007.

The lenders are CIT Business Canada Inc. with GE Canada Finance
Inc.

Norambar Inc. is a modern mini-mill located in Contrecoeur,
Qu,bec, where it employs more than 400 qualified people. Norambar
supplies over 600,000 tons of quality bars and billets for the
automotive, construction, service centre and railway industries.   
Over 60% of its production is sold outside Canada.  An important
recycler, Norambar is also involved in ferrous and non-ferrous
scrap metal recuperation and processing through Fers et Metaux
Recycles Ltee of La Prairie, Quebec, and Cyclomet of Scoudouc, New
Brunswick.  Norambar is a wholly owned subsidiary of Stelco Inc.

Stelco, Inc. -- http://www.stelco.ca/-- is a large, diversified  
steel producer.  Stelco is involved in all major segments of the
steel industry through its integrated steel business, mini-mills,
and manufactured products businesses.

In early 2004, after a thorough financial and strategic review,
Stelco concluded that it faced a serious viability issue.  The
Corporation incurred significant operating and cash losses in 2003
and believed that it would have exhausted available sources of
liquidity before the end of 2004 if it did not obtain legal
protection and other benefits provided by a Court-supervised
restructuring process.  Accordingly, on Jan. 29, 2004, Stelco Inc.
and certain related entities filed for protection under the
Companies' Creditors Arrangement Act.


TENET HEALTHCARE: June 30 Balance Sheet Upside-Down by $1.8 Bil.
----------------------------------------------------------------
Tenet Healthcare Corporation (NYSE:THC) reported a net loss of
$21 million for its second quarter ended June 30, 2005.  This
compares to a net loss of $426 million, or $0.91 per share, in the
second quarter of 2004.  The net loss for the second quarter of
2005 includes a loss from continuing operations of $3 million, or
essentially breakeven on a per share basis compared to a loss of
$170 million in the second quarter of 2004 and a loss from
discontinued operations of $18 million, compared to a loss of
$256 million in the second quarter of 2004.

"We continue to make good progress in improving quality,
controlling costs and improving pricing," said Trevor Fetter,
president and chief executive officer.  "Volume growth remains our
biggest challenge and our top operational priority.  Despite a
decline in overall admissions in the quarter, we are pleased that
our volume of surgeries and emergency room visits were both up in
the quarter.  These are welcome indicators of improved confidence
in our hospitals and strategy.  I am confident that we have the
right combination of initiatives in place to build back the
overall volume growth we need.  As we do that, I am pleased that
our discipline on cost management continued to show very real
results in the quarter."

"We are achieving our objectives for mid- to high-single digit
percentage pricing increases on newly negotiated commercial
managed care contracts," said Reynold Jennings, chief operating
officer.  "As contracts renegotiated in earlier quarters reach
their effective dates, these new agreements are making a tangible
contribution.  We continue to do a great job in improving cost
efficiency despite the continual challenges of medical cost
inflation."

Robert Shapard, chief financial officer, said, "Although volume
growth has fallen short of our targets, aggressive cost management
has had a positive contribution.  Our continued effort to collect
accounts receivables contributed to positive cash flow for the
quarter resulting in an unrestricted cash balance at the end of
the quarter of approximately $1.6 billion, up $97 million from
March 31."

                    Continuing Operations

The loss from continuing operations for the second quarter of 2005
was $3 million, or essentially breakeven on a per share basis,
including the following three items with an aggregate positive net
after-tax impact totaling approximately $6 million:

  (1) net litigation and investigation costs of $11 million pre-
      tax, approximately $7 million after-tax, or $0.01 per share;

  (2) negative non-cash adjustment to the valuation allowance for
      deferred tax assets of approximately $10 million, or $0.02
      per share; and

  (3) positive non-cash adjustment to reduce the accrual for IRS
      audit exposures for years 1995-1997 by approximately
      $23 million.

It should be noted that litigation and investigation costs
includes an accrual for a $45 million estimated minimum liability
attributable to our securities class action lawsuit and two
shareholder derivative actions, which has been offset by a
corresponding amount that is expected to be recovered from our
insurance carriers under our insurance policies.  In addition, the
company had stock compensation expense, included in salaries,
wages and benefits, of $13 million pre-tax, $8 million after-tax,
or $0.02 per share in the second quarter of 2005 as compared to
$36 million pre-tax, $22 million after-tax, or $0.05 per share in
the second quarter of 2004.

                           Revenues

Net operating revenues were $2.421 billion in the second quarter
of 2005, a decrease of $84 million, or 3.4 percent, as compared to
$2,505 million in the second quarter of 2004. Patient discounts
provided under the Compact with Uninsured Patients reduced net
operating revenues in the second quarter of 2005 by $146 million,
or 5.7 percent, and reduced revenues in the second quarter of 2004
by $28 million, or 1.1 percent.  Tenet began the initial
implementation of the Compact in the second quarter of 2004.  If
the discounts under the Compact were added back to net revenues,
it would have produced a non-GAAP measure of adjusted net
operating revenues for the second quarter of 2005 of $2.567
billion, which would be an increase of $34 million or 1.3 percent
compared to adjusted net operating revenues of $2,533 million for
the second quarter of 2004.

Under the Compact, discounts are provided to uninsured patients at
managed care-style rates established by each hospital.  Tenet
expects to begin implementation of the Compact in Texas on
September 1, 2005, which will complete the implementation in all
Tenet markets.  Under the Compact, the discount offered to an
uninsured patient is recognized as a contractual allowance, which
reduces net operating revenues at the time the account is
recorded.  Prior to implementing these discounting provisions
under the Compact, the vast majority of these accounts were
ultimately recognized to be uncollectible and, as a result, was
then recorded in our provision for doubtful accounts.

Approximately $152 million in charity care, measured on a gross
charges basis, was provided in the second quarter 2005, as
compared to $139 million in the second quarter of 2004.

Total uncompensated care for continuing operations, a non-GAAP
measure, defined as the sum of charity care plus discounts
provided under the Compact and provision for doubtful accounts,
was $451 million in the second quarter of 2005, approximately 16.6
percent of the sum of net operating revenues plus charity care
plus discounts provided under the Compact.  In the second quarter
of 2004, total uncompensated care as defined above was $649
million or approximately 24.3 percent of the sum of net operating
revenues plus charity care plus discounts under the Compact.  A
bad debt charge of $196 million was included in the second quarter
of 2004 reflecting a change in how the company estimated the net
realizable value of self-pay accounts.

                        Cash Flow

Unrestricted cash was $1,594 million at June 30, 2005, up
$97 million from $1,497 million March 31, 2005.  Unrestricted cash
at June 30, 2005 as well as March 31, 2005, excludes $263 million
of cash restricted as collateral for standby letters of credit
under the letter of credit facility that we entered into in
December, 2004.

Net cash provided by operating activities was $184 million in the
second quarter of 2005. In accordance with generally accepted
accounting principles, this cash flow figure excludes capital
expenditures, proceeds of asset sales, and certain other items.  
Excluding cash provided by operating activities from discontinued
operations of $32 million, our cash provided by operating
activities was $152 million, which was primarily attributable to
the timing of accrued expenses and collection of patient accounts
receivable.  Capital expenditures in the second quarter of 2005
were $128 million.  Substantially all capital expenditures in the
second quarter were in continuing operations.

                         Liquidity

Total debt was $4.8 billion at June 30, 2005, unchanged from total
debt at March 31, 2005. Net debt, a non-GAAP measure defined as
total debt less unrestricted cash, was $3.2 billion at June 30,
2005, as compared to $3.3 billion at March 31, 2005.

                        Filing Delay

Developments arising out of a previously disclosed Securities and
Exchange Commission investigation will most likely cause a delay
in the filing of the company's Form 10-Q for the second quarter
2005, the Company disclosed last month.  These developments arise
out of allegations made by a former Tenet employee that
inappropriate contractual allowances for managed care contracts
may have been established at three California hospitals through at
least 2001.  The audit committee of the company's board of
directors has asked its independent outside counsel to review
these allegations and examine whether similar issues may have
affected other Tenet hospitals.  While the company cannot provide
assurances until the investigation has been completed, it does not
believe the ultimate findings will have a material impact on its
financial position or its 2004 or 2005 results of operations.

The company cannot provide assurances when the review will be
completed, when the filing of the Form 10-Q will be made, or what
the results or impact on its financials will be.  The failure to
deliver the required filing or financial information pursuant to
the company's letter of credit facility and the indenture
agreement governing its senior notes, if not cured or waived,
could lead to defaults under such instruments.  The company
anticipates that it would have sufficient time to cure or obtain a
waiver of any possible default under either the indenture or the
letter of credit facility; however, it cannot provide any
certainty on these matters or on the potential impact of any such
default.

As a result of these developments, the company's operating results
have not been reviewed by its independent registered public
accountants and are subject to the ongoing review described above.  

Tenet Healthcare Corporation -- http://www.tenethealth.com/--  
through its subsidiaries, owns and operates acute care hospitals
and related health care services. Tenet's hospitals aim to provide
the best possible care to every patient who comes through their
doors, with a clear focus on quality and service.

At June 30, 2005, Tenet Healthcare's balance sheet showed a
$1.8 billion stockholders' deficit, compared to a $1.7 billion
deficit at Dec. 31, 2004.


TERAFORCE TECHNOLOGY: Case Summary & 40 Largest Unsec. Creditors
----------------------------------------------------------------
Lead Debtor: Teraforce Technology Corporation
             1240 East Campbell Road
             Richardson, Texas 75081-1935

Bankruptcy Case No.: 05-38756

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      DNA Computing Solutions, Inc.              05-38757

Type of Business: Teraforce Technology Corporation markets the
                  products and services of DNA Computing
                  Solutions, Inc.  DNA Computing designs, produces
                  and sells board-level products that deliver high
                  performance computing capabilities for embedded
                  applications in the military/aerospace,
                  industrial, and commercial market sectors.
                  See http://www.teraforcetechnology.com/and
                  http://www.dnacomputingsolutions.com/

Chapter 11 Petition Date: August 3, 2005

Court: Northern District of Texas (Dallas)

Judge: Barbara J. Houser

Debtors' Counsel: Davor Rukavina, Esq.
                  Munsch, Hardt, Kopf & Harr, PC
                  1445 Ross Avenue, Suite 4000
                  Dallas, Texas 75202
                  Tel: (214) 855-7587
                  Fax: (214) 855-7584

Consolidated Financial Condition as of May 31, 2005:

      Total Assets: $4,338,000

      Total Debts: $14,269,000

A.  Teraforce Technology Corporation's 20 Largest Unsecured
    Creditors:

   Entity                        Nature of Claim    Claim Amount
   ------                        ---------------    ------------
Bank One, N.A.                   Bank Loan            $3,917,098
4th Floor, TX1-2454
1717 Main Street
Dallas, TX 75201
Attn:  Joey T. Orr
Tel: (214) 290-2718

O.S. Wyatt Jr.                   Loan Guaranty        $3,917,098
8 Greenway Plaza, Suite 930
Houston, TX 77046-0892
Attn:  Truman Simpson Same
Tel: (713) 877-6777

Savage Sports Corporation        Indemnity Claim        $776,000
100 Springdale Road
Westfield, MA 01085
Attn:  Albert Kasper
Tel: (413) 568-7001

Haynes and Boone, LLP            Trade debt             $609,110
901 Main Street, Suite 3100
P. O. Box 841399
Dallas, TX 75284-1399

Donald B. Carmichael             Convertible Note       $509,995
714 FM 1960W, Suite 107
Houston, TX 77090-3406

Peter Badger                     Loan Guaranty          $506,030
11108 Meadowick Drive
Houston, TX 77024
Tel: (713) 993-4655

Richard E. Bean                  Loan Guaranty          $506,030
P. O. Box 35068
Houston, TX 77235
Tel: (713) 551-0304

Robert E. Garrison II            Loan Guaranty          $506,030
600 Travis, Suite 3000
Houston, TX 77002
Tel: (713) 993-4680

James Hawkins                    Loan Guaranty          $506,030
5305 Hillcrest Drive
Waco, TX 76710
Tel: (254) 761-2801

Steven A. Webster                Loan Guaranty          $506,030
1000 Louisiana, Suite 1500
Houston, TX 77002
Tel: (713) 328-1049

GVR Family Ltd. Partnership      Convertible            $449,333
14 West Isle Place               Subordinated Note
The Woodlands, TX 77381-3300

Wanda Hicks Carmichael           Convertible            $449,333
18223 Theiss Mail Route          Subordinated Note
Spring, TX 77379

Rick Richards                    Convertible            $314,533
51 North Royal Fern              Subordinated Note
The Woodlands, TX 77380

Kirk E. Kanady, M.D.             Convertible            $224,666
P. O. Box 8399                   Subordinated Note
The Woodlands, TX 77387-8399

Anton von Liechtenstein          Convertible            $244,400
Admintrust Services              Subordinated Note
Josef-Rheinbergerstr. 6
VADUZ, FL9490,
LEICHTENSTEIN
Tel: 011-423-2361520

Zurich American Insurance Co.    Promissory Note        $196,991
Corporate Law Department
One Liberty Plaza
Attn:  James W. March, Esq.

Sonnenschien Nath &              Trade Debt             $173,233
Rosenthal LLP
One Metropolitan Square
Suite 3000
Saint Louis, MO 63102

Herman M. Frietsch               Convertible Note       $172,427
3002 Quenby
Houston, TX 77005

Donald Campbell                  Loan Guaranty          $126,508
323 Tamerlaine
Houston, TX 77024
Tel: (713) 827-1747

John Styles                      Loan Guaranty          $126,508
2200 Southwest Freeway
Suite 500
Houston, TX 77098
Tel: (713) 563-8961


B.  DNA Computing Solutions, Inc.'s 20 Largest Unsecured
    Creditors:

   Entity                        Nature of Claim    Claim Amount
   ------                        ---------------    ------------
EFW, Inc.                        Trade Debt             $205,173
4700 Marine Creek Parkway
Fort Worth, TX 76136

Peter W. Badger                  Promissory Note         $51,107
11108 Meadowick Drive
Houston, TX 77024
Tel: (713) 993-4655

Richard E. Bean                  Promissory Note         $51,107
P. O. Box 35068
Houston, TX 77235
Tel: (713) 551-0304

James Hawkins                    Promissory Note         $51,107
5305 Hillcrest Drive
Waco, TX 76710
254-761-2801

Robert E. Garrison II            Promissory Note         $51,107
600 Travis, Suite 3000
Houston, TX 77002
Tel: (713) 993-4680

Steven A. Webster                Promissory Note         $51,107
1000 Louisiana, Suite 1500
Houston, TX 77002
Tel: (713) 328-1049

General Systems and Software     Trade Debt              $37,922

Campbell Place J.V.              Lease                   $27,363

Wind River Systems               Trade Debt              $23,453

Avnet Electronics Marketing      Trade Debt              $13,562

TXU Energy                       Utility                 $10,413

Insight Electronics, Inc.        Trade Debt              $10,127

Elcoteq, Inc.                    Trade Debt               $8,717

IKON Financial Services          Trade Debt               $6,677

Sanmina-SCI Corp.                Trade Debt               $6,580

Synplicity Inc.                  Trade Debt               $4,191

ASG Monitoring Inc.              Trade Debt               $3,858

Pentek Inc.                      Trade Debt               $3,423

SBC                              Trade Debt               $3,298

Arrow Electronics, Inc.          Trade Debt               $2,609


TOWER AUTOMOTIVE: Delivers 2004 Annual Report to SEC
----------------------------------------------------
Tower Automotive, Inc., delivered its Annual Report for the year
ended December 31, 2004, to the Securities and Exchange Commission
last week.  

Tower Automotive, Inc.'s Form 10-K is available at no charge at
http://ResearchArchives.com/t/s?a6

Deloitte & Touche LLP audited Tower Automotive's consolidated
financial statements.  Deloitte notes that the financial
statements have been prepared assuming that Tower will continue
as a going concern.  However, the company's recurring losses from
operations, an extensive liquidity deficiency in early 2005, and
a significant amount of indebtedness raise substantial doubt
about its ability to continue as a going concern, according to
Deloitte.

             Tower Automotive, Inc. and Subsidiaries
                       Consolidated Balance Sheet
                        As of December 31, 2004
                             (In Thousands)
   
                                 Assets
   
   Current Assets:
      Cash and cash equivalents                           $149,101
      Accounts receivable                                  346,031
      Inventories                                          159,034
      Deferred income taxes, net                                 -
      Prepaid tooling and other                            124,938
                                                        ----------
   Total current assets                                    779,104
                                                        ----------
   Property, Plant and equipment, net                    1,205,640
   Investments in joint ventures                           227,740
   Deferred income taxes                                         -
   Goodwill                                                174,563
   Other assets, net                                       173,727
                                                        ----------
   Total Assets                                         $2,560,774
                                                        ==========
   
                Liabilities and Stockholders' Investment
   
   Current Liabilities:
      Current maturities of long-term debt &              $133,156
      capital lease obligations
      Convertible Subordinated Notes                             -
      Accounts payable                                     638,118
      Accrued liabilities                                  286,262
                                                        ----------
   Total current liabilities                             1,057,536
                                                        ----------
   Long-term debt, net of current maturities             1,239,562
   Convertible senior debentures                           121,723
   Obligations under capital leases                         36,823
   Other noncurrent liabilities                            226,062
                                                        ----------
   Total noncurrent liabilities                          1,624,170
                                                        ----------
   Commitments and Contingencies                                 -
   
   Stockholders' Investment:
      Preferred stock, par value $1                              -
      Common stock, par value $.01                             666
      Additional paid-in capital                           681,084
      Retained deficit                                    (715,754)
      Deferred compensation plans                           (7,636)
      Accumulated other comprehensive loss                 (29,968)
      Treasury stock, at cost                              (49,324)
                                                        ----------
   Total stockholders' investment (deficit)               (120,932)
                                                        ----------
   Total Liabilities and Stockholders' Investment       $2,560,774
                                                        ==========
   
   
                Tower Automotive, Inc. and Subsidiaries
                 Statements of Consolidated Operations
                   12 Months Ended December 31, 2004
                             (In Thousands)
   
   Revenues:                                            $3,178,724
      Cost of sales                                      2,953,041
      Gross profit                                         225,683
      Selling, general and administrative expenses         145,217
      Restructuring and asset impairment charges, net         (713)
      Goodwill impairment charges                          337,230
                                                        ----------
      Operating income (loss)                             (256,051)
      Interest expense                                     143,745
      Interest income                                       (1,767)
      Unrealized gain on derivative                         (3,860)
      Other expense, net                                         -
                                                        ----------
   Income (loss) before provision for income taxes,       (394,169)
      equity in earnings of joint ventures, minority
      interest and cumulative effect of accounting
      change
   
   Provision (benefit) for income taxes                    157,084
                                                        ----------
   Income (loss) before equity in earnings of             (551,253)
      joint ventures, minority interest and
      cumulative effect of accounting change
   
   Write-down of joint venture investment to                     -
      market value, net of tax
                                                        ----------
   Equity in earnings of joint ventures, net of tax         13,370
   Minority interest, net of tax                            (5,754)
   Gain on sale of joint venture                             9,732
                                                        ----------
   Income (loss) before cumulative effect of              (533,905)
      accounting change
   
   Cumulative effect of change in accounting                     -
      principle, net of tax
                                                        ----------
   Net income (loss)                                     ($533,905)
                                                        ==========
   
   
                Tower Automotive, Inc. and Subsidiaries
                 Statements of Consolidated Cash Flows
                   12 Months Ended December 31, 2004
                             (In Thousands)
   
   Operating Activities:
   Net income (loss)                                     ($533,905)
   
   Adjustments required to reconcile net loss to net
      cash provided by operating activities:
      Goodwill impairment charges                          337,230
      Cumulative effect of change in accounting                  -
         principle, net
      Restructuring and asset impairment charges, net       (6,276)
      Customer recovery related to program cancellation          -
      Unrealized gain on derivative                         (3,860)
      Deferred income tax provision (benefit)              167,720
      Depreciation and amortization                        152,156
      Gain on sale of joint venture                         (9,732)
      Gain on sale of plant                                      -
      Write-down of joint venture investment to market value     -
      Equity in earnings of joint ventures, net            (13,370)
      Proceeds from receivables securitization              44,817
      Change in other operating items:
         Accounts receivable                               (99,574)
         Inventories                                       (29,030)
         Prepaid tooling and other                         (33,276)
         Accounts payable and accrued liabilities          163,600
         Other assets and liabilities                      (61,740)
                                                        ----------
         Net cash provided by operating activities          74,760
   
   Investing Activities:
      Capital expenditures, net                           (210,926)
      Acquisitions, net of cash acquired                   (21,299)
      Net proceeds from divestitures                        51,700
      Proceeds from sale of fixed assets                         -
                                                        ----------
         Net cash used for investing activities           (180,525)
   
   Financing Activities:
      Proceeds from borrowings                             613,785
      Repayments of debt                                  (519,921)
      Net proceeds from issuance of common stock               103
      Payments for repurchase of common stock                    -
                                                        ----------
         Net cash provided by financing activities          93,967
   
   Net Change in Cash and Cash Equivalents                 (11,798)
   Cash and Cash Equivalents, beginning of year            160,899
                                                        ----------
   Cash and Cash Equivalents, end of year                 $149,101
   
Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc.
-- http://www.towerautomotive.com/-- is a global designer and       
producer of vehicle structural components and assemblies used by  
every major automotive original equipment manufacturer, including  
BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan,  
Toyota, Volkswagen and Volvo.  Products include body structures  
and assemblies, lower vehicle frames and structures, chassis  
modules and systems, and suspension components.  The Company and  
25 of its debtor-affiliates filed voluntary chapter 11 petitions  
on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through
05-10601).  James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq.,
Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet,
Esq., at Kirkland & Ellis, LLP, represent the Debtors in their  
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed $787,948,000 in total assets and
$1,306,949,000 in total debts.  (Tower Automotive Bankruptcy News,
Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000)


TOWER AUTOMOTIVE: Closure of Three Facilities to Cost $63.4 Mil.
----------------------------------------------------------------
On April 15, 2005, Tower Automotive, Inc., committed to a plan to
close its facilities located in Belcamp, Maryland; Bowling Green,
Kentucky; and Corydon, Indiana.  In addition, as a result of the
closing of the Corydon facility, Tower will reduce the number of
employees at its Granite City, Illinois facility.  The actions
result in the elimination of approximately 800 positions.

The facility closures were expected to be completed on June 30,
2005.  These operational restructuring initiatives are designed to
reduce excess capacity and associated costs and improve overall
efficiency.

In a regulatory filing with the Securities and Exchange
Commission, Kathleen Ligocki, Tower's president and chief
executive officer, discloses that the actions would cost the
company approximately $63,400,000, which is comprised of:

      $3,800,000 for employee termination benefits;
     $32,100,000 for asset impairment charges;
     $25,000,000 for related lease costs; and
      $2,500,000 for other costs.

Future cash expenditures for these actions are estimated at
$4,500,000.

The amounts do not include approximately $4,700,000 of cash
expenditures to be incurred for training and relocation of
employees and equipment.

Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc.
-- http://www.towerautomotive.com/-- is a global designer and       
producer of vehicle structural components and assemblies used by  
every major automotive original equipment manufacturer, including  
BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan,  
Toyota, Volkswagen and Volvo.  Products include body structures  
and assemblies, lower vehicle frames and structures, chassis  
modules and systems, and suspension components.  The Company and  
25 of its debtor-affiliates filed voluntary chapter 11 petitions  
on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through
05-10601).  James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq.,
Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet,
Esq., at Kirkland & Ellis, LLP, represent the Debtors in their  
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed $787,948,000 in total assets and
$1,306,949,000 in total debts.  (Tower Automotive Bankruptcy News,
Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000)


TOWER AUTOMOTIVE: Reserves $16,300,000 for Environmental Issues
---------------------------------------------------------------
Kathleen Ligocki, president and chief executive officer of Tower
Automotive, Inc., discloses in a regulatory filing with the
Securities and Exchange Commission that the company has reserves
of $16,300,000 to cover estimated environmental liabilities
associated with its properties.  This amount is based on
estimates of expected investigation or remediation costs related
to environmental contamination.

Tower and its subsidiaries are required to:

   (1) comply with federal, foreign, state and local laws and
       regulations governing the protection of the environment
       and occupational health and safety, including laws
       regulating:

       -- the generation, storage, handling, use and
          transportation of hazardous materials;

       -- the emission and discharge of hazardous materials into
          soil, air or water; and

       -- the health and safety of its colleagues; and

   (2) obtain permits from governmental authorities for certain
       operations.

"The Company has taken steps to assist in the compliance with the
numerous and sometimes complex regulations, such as holding
environmental and safety training sessions for representatives
from its domestic facilities," Ms. Ligocki says.

Tower has achieved ISO 14001 registration for the majority of its
domestic facilities, and has achieved ISO/TS 16949 at eight of
its eleven European facilities.  The company is in the process of
attempting to achieve ISO registration for certain of its other
foreign operations.  Tower conducts third party or internal
audits for environmental, health, and safety compliance, and uses
outside expertise to assist in the filing of permits and reports
when required.

According to Ms. Ligocki, Tower owns properties, which have been
impacted by environmental releases.  At some of these properties,
the company is liable for costs associated with investigation and
remediation of contamination in one or more environmental
media.  The company is currently actively involved in
investigation and remediation at several of these locations.

"At certain of these locations, costs incurred for environmental
investigation and/or remediation are being paid partly or
completely out of funds placed into escrow by previous property
owners," Ms. Ligocki says.  "Nonetheless, total costs associated
with remediating environmental contamination at these properties
could be substantial and may be material to the Company's
financial condition, results of operations or cash flows."

Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc.
-- http://www.towerautomotive.com/-- is a global designer and      
producer of vehicle structural components and assemblies used by  
every major automotive original equipment manufacturer, including  
BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan,  
Toyota, Volkswagen and Volvo.  Products include body structures  
and assemblies, lower vehicle frames and structures, chassis  
modules and systems, and suspension components.  The Company and  
25 of its debtor-affiliates filed voluntary chapter 11 petitions  
on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05-  
10601).  James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup  
Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq.,
at Kirkland & Ellis, LLP, represent the Debtors in their  
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed $787,948,000 in total assets and
$1,306,949,000 in total debts.  (Tower Automotive Bankruptcy News,
Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000)


TOWN SPORTS: June 30 Balance Sheet Upside-Down by $117 Million
--------------------------------------------------------------
Town Sports International Holdings, Inc., reported its results for
the quarter ended June 30, 2005.

Revenues for the three months ended June 30, 2005, were
$98 million, an increase of $9.5 million, or 10.7%, over the same
quarter of 2004.  During the quarter, TSI's mature clubs (those in
operation for 24 months or longer) saw a $4.8 million, or 5.7%,
increase in revenues over the prior year's quarter.  This increase
in mature club revenues is due to a 3.5% increase in membership,
a 2.1% increase in ancillary revenue, and a 0.1% increase in
average dues charged. The 15 clubs opened or acquired within the
last twenty-four months contributed $4.7 million of the increase
in revenues in the quarter ended June 30, 2005 over the prior
year.  Revenues at all clubs open one year or more increased 7.0%,
using the "same store" method used by many retailers.

"We are very pleased with our mature club revenue growth, which
has improved in each of the past five quarters.  Our efforts with
respect to membership retention and ancillary revenue continued to
generate positive results.  We are particularly pleased with our
personal training revenue this  quarter which improved $2.2
million, or 23.8%, over the same period in the prior year," said
Bob Giardina, CEO of TSI.

Operating income for the second quarter was $10.6 million,
compared to $10.2 million in the second quarter of 2004, a 3.5%
increase.

Adjusted EBITDA (as defined) increased $1.8 million, or 9.1%, to
$21.8 million during the quarter ended June 30, 2005, from $20.0
million in last year's quarter, with margins of 22.3% and 22.6%
respectively.

TSI recorded net income of $491,000 during the quarter ended June
30, 2005, compared to $490,000 for the comparable period in the
prior year.

The Company acquired a club and closed and relocated a club in the
second quarter of 2005, maintaining its club count of 138 owned
and two part-owned and operated clubs.

TSI serves a membership base of 404,000 (excluding 11,000 summer
and seasonal pool memberships) as of June 30, 2005, which
increased by 5.5% from 383,000 as of December 31, 2004.

New York-based Town Sports International Holdings, Inc. --
http://www.mysportsclubs.com/-- is a leading owner and operator  
of fitness clubs in the Northeast and mid-Atlantic regions of the
United States.  In addition to New York Sports Clubs, TSI operates
under the brand names of Boston Sports Clubs, Washington Sports
Clubs and Philadelphia Sports Clubs, with 137 clubs and more than
400,000 members in the U.S.  In addition, the Company operates
three facilities in Switzerland.  

At June 30, 2005, Town Sports' balance sheet showed a $116,979,000
stockholders' deficit, compared to a $117,017,000 deficit at
Dec. 31, 2004.

                         *     *     *

As reported in the Troubled Company Reporter on July 5, 2005,
Standard & Poor's Ratings Services placed its ratings on Town
Sports International Holdings Inc. and operating subsidiary Town
Sports International Inc., including the 'B' corporate credit
ratings, on CreditWatch with developing implications, indicating
the possibility of an upward or downward rating movement.

The rating action follows Town Sports' disclosure of its plans to
file a registration statement with the SEC for a proposed
underwritten IPO of its common stock and its exploration of
strategic alternatives, which include a possible sale of the
company.  The company has retained Goldman, Sachs & Co.;
Deutsche Bank Securities Inc.; and Credit Suisse First Boston LLC
to assist in its review of strategic alternatives.  Town Sports
had total debt outstanding of $400 million as of March 31, 2005.

"The CreditWatch listing is based on concerns that a sale of the
company could meaningfully increase Town Sports' interest expense
and debt burden to warrant a ratings downgrade," said Standard &
Poor's credit analyst Andy Liu.  "On the other hand, if Town
Sports pursues an IPO and if the entire proceed is used to reduce
debt, the resulting improvement in credit measures could warrant a
one-notch upgrade."


UNITED FLEET: Wants to Hire Fuqua & Keim as Bankruptcy Counsel
--------------------------------------------------------------
United Fleet Maintenance, Inc., asks the U.S. Bankruptcy Court for
the Southern District of Texas for permission to employ Fuqua &
Keim, L.L.P., as its general bankruptcy counsel.

Fuqua & Keim will:

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

   2) prepare on behalf of the Debtor all necessary applications,
      answers, orders, reports, pleadings and other legal papers
      necessary in its chapter 11 case;

   3) negotiate and submit a potential plan of arrangement
      satisfactory to the Debtor, its estate, and its creditors;
      and

   4) perform all other legal services to the Debtor that are
      necessary in its bankruptcy proceedings.

Richard L. Fuqua, Esq., a Member of Fuqua & Keim, is the lead
attorney for the Debtor.  Mr. Fuqua charges $400 per hour for his
services.  

Mr. Fuqua reports Fuqua & Keim's professionals bill:

    Designation                    Hourly Rate
    -----------                    -----------
    Partners & Shareholders           $300
    Associates                     $125 - $175
    Law Clerks & Legal Assistants   $60 - $75

Fuqua & Keim had not yet submitted its retainer amount to the
Debtor when the Debtor filed its request with the Court to employ
the Firm as its bankruptcy  counsel.

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

Headquartered in Houston, Texas, United Fleet Maintenance, Inc.,
filed for chapter 11 protection on July 22, 2005 (Bankr. S.D. Tex.
Case No. 05-41222).  When the Debtor filed for protection from its
creditors, it listed estimated assets of $10 million to
$50 million and estimated debts of $1 million to $10 million.


UNITED FLEET: Section 341(a) Meeting Slated for August 25
---------------------------------------------------------
The U.S. Trustee for Region 7 will convene a meeting of United
Fleet Maintenance, Inc.'s creditors at 10:00 a.m., on Aug. 25,
2005, at the Office of the U.S. Trustee, 515 Rusk Avenue, Suite
3401, Houston, Texas 77002.  This is the first meeting of
creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy
cases.

All creditors are invited, but not required, to attend.  This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

Headquartered in Houston, Texas, United Fleet Maintenance, Inc.,
filed for chapter 11 protection on July 22, 2005 (Bankr. S.D. Tex.
Case No. 05-41222).  Richard L. Fuqua, Esq., at Fuqua & Keim,
L.L.P., represents the Debtor in its restructuring efforts.  When
the Debtor filed for protection from its creditors, it listed
estimated assets of $10 million to $50 million and estimated debts
of $1 million to $10 million.


US AIRWAYS: Files First Amended Plan and Disclosure Statement
-------------------------------------------------------------
On July 27, 2005, US Airways, Inc., and its debtor-affiliates
filed their First Amended Joint Plan of Reorganization and
Disclosure Statement with the Court.  Brian P. Leitch, Esq., at
Arnold & Porter, in Denver, Colorado, says that the amendments
include the Investment Agreement with Tudor Investments
Corporation and related documents.  A group of investors under the
management of Tudor will invest $65,000,001 in exchange for
3,939,394 shares of New Common Stock.

The Amended Plan also provides that:

   * the existing shareholders of America West will receive
     approximately 36.7% of the New Common Stock of Reorganized
     Group;

   * the Plan Investors will invest not less than $565 million in
     New Common Stock of Reorganized Group representing, in the
     aggregate, approximately 51.7% of Reorganized Group;

   * New Common Stock representing approximately 11.6% of
     Reorganized Group will be distributed to unsecured creditors
     of the Debtors; and

   * subject to certain exceptions, America West is required to
     prepay the loan upon a change in control and may be required
     to prepay portions of the loan if its employee compensation
     costs exceed a certain threshold.

In addition to $565 million of new equity from the Plan Investors
and an additional $150 million of equity financing from the
Rights Offering, Reorganized Group will receive:

   -- approximately $550 million of cash infusions from
      commercial partners, including approximately $300 million
      from affinity credit card partners and the $250 million
      line of credit to be provided by Airbus;

   -- approximately $100 million from asset-based financings or
      sales of aircraft, net, after prepayments of the ATSB Loan;
      and

   -- approximately $170 million from release of certain cash
      reserves that are currently restricted but that should be
      released as a part of the Plan.

              Claim Amounts and Percentage Recovery

The Debtors provide an estimate of the claim amounts and the
percentage recovery for the various classes of Claims:

   a) Class-1 (Miscellaneous Secured Claims)

         Estimated Claim Amount: Not Given

         Estimated Percentage Recovery: 100%

   b) Class-3 (ATSB Loan Claims)

         Estimated Claim Amount: $708,000,000 (lowered from
                                 $709,267,980)

         Estimated Percentage Recovery: 100%

   c) Class-5 (Other Priority Claims)

         Estimated Claim Amount: $500,000 to $1,500,000

         Estimated Percentage Recovery: 100%

   d) Class-6 (Aircraft Secured Claims)

         Estimated Claim Amount: $1,750,000,000 to $2,000,000,000

         Estimated Percentage Recovery: 100%

   e) Class-7 (PBGC Claims)

         Estimated Claim Amount: $2,400,000,000 to $2,650,000,000

         Estimated Percentage Recovery: 3.3% to 8.3%

   f) Class-8 (General Unsecured Convenience Claims)

         Estimated Claim Amount: $22,250,000 to $61,500,000

         Estimated Percentage Recovery: 6.8% to 10%

   g) Class-9 (General Unsecured Claims)

         Estimated Claim Amount: $458,500,000 to $1,311,500,000

         Estimated Percentage Recovery: 3.3% to 8.3%

   h) Class-10 (Interests in the Debtors)

         Estimated Percentage Recovery: 0%

The Debtors estimate that at the conclusion of the claims
resolution process, the aggregate amount of estimated and allowed
General Unsecured Claims -- inclusive of General Unsecured
Convenience Claims and PBGC Claims -- will be between
$2,880,750,000 and $4,023,000,000.

                  Classes Impaired Under the Plan

Class Group-10 and Class Group-11 are not entitled to receive or
retain any property under the Plan.  The Claimholders and
Interestholders in these Classes are deemed to reject the Plan,
and their votes will not be solicited.  Holders of Interests in
Classes USAI-10, Piedmont-10, PSA-10, and Material Services-10
are conclusively presumed to have accepted the Plan.  Similarly,
their votes will not be solicited.  All other Classes are
Impaired, and entitled to vote to accept or reject, the Plan.

Unimpaired Classes of Claims and Interests under the Plan are:

   USAI-1               USAI-5               USAI-6
   Group-1              Group-5              Group-6
   PSA-1                PSA-5                PSA-6
   Piedmont-1           Piedmont-5           Piedmont-6
   Material Services-1  Material Services-5  Material Services-6

                          The ATSB Loan

On July 22, 2005, the Debtors, America West and the Air
Transportation Stabilization Board reached an agreement in
principle regarding modifications to the ATSB Loan and to America
West's loan partially guaranteed by the ATSB.  The principal
terms of the ATSB Term Sheet are:

   1) The Debtors will prepay the ATSB Loan with proceeds from
      asset sales equal to the greater of:

         (a) $125,000,000; or

         (b) 60% of the net cash proceeds.

      If the ATSB Loan is prepaid by more than $150,000,000,
      the Debtors do not have to make another payment until
      September 30, 2007.  Thereafter, the ATSB Loan will be
      repaid in seven semi-annual installments through September
      2010.  If the asset sales do not cause the ATSB Loan to be
      prepaid by at least $150,000,000, the Debtors will pay the
      difference to bring prepayments to $150,000,000 by
      March 31, 2007.

   2) The ATSB Loan will be prepaid from the proceeds:

         (a) of issuances of debt or equity securities of the
             Reorganized Debtors or America West after the
             Effective Date, excluding proceeds from the issuance
             of New Common Stock to the Plan Investors, the New
             Convertible Notes or proceeds to be received from
             Airbus;

         (b) from the sale of certain assets not subject to
             mandatory prepayment provisions; and

         (c) from the sale of collateral securing the ATSB Loan.

      The ATSB Loan is subject to mandatory prepayment from
      excess cash flow if the value of the collateral proves
      insufficient.

   3) The ATSB Loan will bear interest at a spread over the
      Lenders' cost of funds for the portion guaranteed by the
      ATSB.

   4) The portion of the loan not guaranteed by the ATSB will
      bear interest at LIBOR plus 6.00%.

   5) The Debtors will pay the ATSB a guarantee fee of 6.00% on
      outstanding principal of the ATSB guaranteed portion of the
      ATSB Loan.

   6) The ATSB Loan will be secured by a first priority lien on
      the Debtors' and America West's unencumbered assets,
      including cash and cash equivalents.

   7) The Debtors will enter into affirmative and negative
      covenants, including minimum unrestricted cash and cash
      equivalents of consolidated Reorganized Group and a fixed
      charge coverage ratio.

The principal terms of the ATSB Term Sheet relating to the AWA
ATSB Loan include:

   1) The AWA ATSB Loan will be repaid as scheduled in seven
      equal semi-annual installments of $42,900,000 with the
      final installment due in September 2008.

   2) The AWA ATSB Loan will be prepaid from the proceeds:

         (a) of issuances of debt or equity securities of the
             Reorganized Debtors or America West after the
             Effective Date, excluding proceeds from the issuance
             of New Common Stock to the Plan Investors, the New
             Convertible Notes or proceeds to be received from
             Airbus;

         (b) from the sale of certain assets not subject to
             mandatory prepayment provisions; and

         (c) from the sale of collateral securing the ATSB Loan.

      The ATSB Loan and the AWA ATSB Loan is subject to mandatory
      prepayment from excess cash flow if the value of the
      collateral proves insufficient.

   3) The AWA ATSB Loan will bear interest at LIBOR plus 0.40%.

   4) AWA will pay the ATSB, the lenders and the counter-
      guarantors of the AWA ATSB Loan a guarantee fee of 8.00% on
      the principal of the ATSB guaranteed portion of the AWA
      ATSB Loan.  The guarantee fee will increase by 0.05%
      annually.

   5) The AWA ATSB Loan will be secured by a second priority lien
      on the Debtors' and America West's unencumbered assets,
      including cash and cash equivalents.

   6) AWA will enter into affirmative and negative covenants,
      including minimum unrestricted cash and cash equivalents of
      consolidated Reorganized Group and a fixed charge coverage
      ratio.

   7) Warrants to purchase AWA Common Stock issued to the ATSB,
      the  lenders and the counter-guarantors under the AWA ATSB
      Loan will be converted into warrants to acquire New Common
      Stock.

   8) The ATSB will waive its right to cause the AWA Loan to be
      prepaid in full upon the Merger.

Conditions to the consummation of the ATSB Term Sheet include:

   -- consummation of the Plan, including the investment by the
      Plan Investors or others for at least $565,000,000;

   -- closing of specified asset sales of at least $125,000,000
      by the Effective Date;

   -- Reorganized Group having unrestricted liquidity of at least
      $1,250,000,000;

   -- all other agreements contemplated by the Plan must be
      complete including the GECC Master MOU and the Airbus Term
      Sheet.

                            The PBGC

The Pension Benefit Guaranty Corporation filed $203,000,000 in
priority Claims for pension plan minimum funding obligations
under the Employee Retirement Income Security Act.  The PBGC has
filed unsecured Claims for $2,450,000,000, for pension plan
unfunded benefit liabilities under the ERISA.  Because the PBGC
asserted these amounts on a joint and several basis against each
of the Debtors, the aggregate amount of the PBGC's Claims exceeds
$13,000,000,000.  The PBGC will be limited to a single recovery
in any distribution.  The PBGC has asserted certain other
unliquidated and contingent Claims against the Debtors for
pension-related liabilities.

Mr. Leitch says that the PBGC is entitled to priority treatment
for less than $10,000,000 of its Claims and is not entitled to
distributions on a joint and several basis.  The Debtors are in
the process of deciding whether they will object to the PBGC's
Claims as improperly calculated.

                       Executory Contracts

The Debtors will file a list of Other Executory Contracts and
Unexpired Leases to be assumed and a list of Other Executory
Contracts and Unexpired Leases for Post-Effective Date
Determination.  Contracts on the Post-Effective Date
Determination Schedule may be assumed or rejected within six
months after the Effective Date.  Any Contracts or Leases not
assumed by the end of this period will be deemed rejected.

                    Aircraft Lease Rejections

For any Aircraft Leases that are rejected, the Debtors will:

   (1) pay the counterparty the average daily rent for the
       period ending on the earlier of:

          (a) the effective date of rejection; or

          (b) the date of return of the Aircraft Equipment;

   (2) continue insurance coverage for the Aircraft Equipment
       for 20 days after the effective date of rejection;

   (3) maintain the Aircraft Equipment for the 20 days after the
       effective date of rejection, pursuant to the requirements
       of the Federal Aviation Administration maintenance
       program; and

   (4) upon written request, provide the counterparty with a
       termination document to file with the FAA, provided that
       the counterparty bears all associated costs.

                    Tudor Contact Information

The Debtors provide contact information for the most recent
Investor Agreement with Tudor Investment Corporation:

            Tudor Investment Corp.
            1275 King Street
            Greenwich, CT 06831
            Attention: Steven N. Waldman

                    -- and --

            Boies, Schiller & Flexner LLP
            570 Lexington Avenue 16th Floor
            New York, NY 10022
            Attention: George Y. Liu, Esq.

A blacklined copy of the Debtors' First Amended Disclosure
Statement is available for free at:

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

A blacklined copy of the Debtors' First Amended Plan of
Reorganization is available for free at:

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

Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of:

            * US Airways, Inc.,
            * Allegheny Airlines, Inc.,
            * Piedmont Airlines, Inc.,
            * PSA Airlines, Inc.,
            * MidAtlantic Airways, Inc.,
            * US Airways Leasing and Sales, Inc.,
            * Material Services Company, Inc., and
            * Airways Assurance Limited, LLC.

Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.

US Airways and its subsidiaries filed another chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).  Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts.  In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts.  (US Airways Bankruptcy News, Issue
No. 100; Bankruptcy Creditors' Service, Inc., 215/945-7000)


US AIRWAYS: Incurs $62 Million Net Loss for 2005 Second Quarter
---------------------------------------------------------------
US Airways Group, Inc., reported a net loss of $62 million for the
second quarter 2005, compared to a $34 million net income for the
second quarter 2004.  Excluding unusual items, the net loss for
the second quarter 2005 was $36 million compared to a $34 million
net income for the comparable period in 2004.

The cost of aviation fuel per gallon, including taxes, for the
second quarter 2005, was $1.68 ($1.63 excluding taxes), up 57
percent from the same period in 2004.  This significant price
increase is the key driver of a $182 million increase in fuel
expense from the same period in 2004.

"Record fuel prices continue to offset the tremendous progress we
have made in reducing costs, and we are further hampered by our
inability to hedge fuel while in Chapter 11," said US Airways
President and Chief Executive Officer Bruce R. Lakefield.  
"Nevertheless, we are pleased with our summer bookings and
appreciative of the continued hard work by our employees to
improve our performance and satisfy our customers, as well as the
milestones we have achieved in securing approvals for our proposed
merger with America West Airlines."

On May 19, US Airways and America West announced intentions to
merge in connection with US Airways' planned emergence from
Chapter 11 this fall.  Lakefield noted that plans to close the
merger transaction in late September or early October remain on
track.  Over the past month, the merger cleared a required U.S.
Department of Justice review while the Air Transportation
Stabilization Board (ATSB) has consented to a restructuring plan
for the federally-guaranteed loans held by the two airlines.  
This week, W. Douglas Parker, America West's chairman, president,
and chief executive officer, and Lakefield, announced the
proposed new senior executive team for the combined
US Airways/America West Airlines, with other management, policy
and structural changes to be announced over the coming weeks.

System passenger revenue per available seat mile (PRASM) for the
second quarter 2005 was 10.72 cents, down 5.5 percent compared to
the second quarter of 2004.  Domestically, system PRASM fell
7.9 percent to 11.37 cents.  System statistics encompass mainline,
MidAtlantic Airways, wholly owned airline subsidiaries of US
Airways Group, Inc., and capacity purchases from third parties
operating regional jets as US Airways Express.  For US Airways
mainline operations only, the PRASM of 9.64 cents was down
5.1 percent.  System passenger revenue increased 0.4 percent to
$1.77 billion from $1.76 billion in the second quarter
of 2004.

System available seat miles (ASMs) were up 6.2 percent, while
mainline ASMs increased 2.2 percent during the second quarter
2005.  System revenue passenger miles (RPMs) increased
4.3 percent, while mainline RPMs increased 0.5 percent.  The
second quarter 2005 system load factor of 76.0 percent was down
1.4 percentage points year-over-year.  The mainline passenger
load factor for the second quarter 2005 was down 1.3 percentage
points to 77.6 percent.  For the second quarter 2005, US Airways
Group Inc.'s system carried 15.8 million passengers, an increase
of 6.3 percent, while mainline operations carried 11.1 million
passengers, a 0.3 percent increase compared to the same period of
2004.  The second quarter 2005 yield for mainline operations of
12.42 cents decreased 3.5 percent from the same period in 2004,
while system yield was down 3.8 percent to 14.11 cents.

Looking forward, the company expects system capacity growth will
slow from just under 5.0 percent in May and June to less than
1.0 percent in the third quarter 2005.  The company also is seeing
positive yield trends and as a consequence, the company expects
positive system PRASM performance year-over-year in the third
quarter 2005.

The mainline cost per available seat mile (CASM), excluding fuel,
of 7.83 cents for the second quarter 2005, decreased 16.7 percent
from the same period in 2004, reflecting the benefit of the
company's restructuring efforts.

Substantially all of the company's unrestricted cash (includes
cash, cash equivalents and short-term investments) constitutes
cash collateral under the ATSB loan agreement.  As of
June 30, 2005, $557 million of cash collateral was available for
the company's use, subject to the limitations of the cash
collateral agreement with the ATSB, approved by the bankruptcy
court, which includes stringent minimum cash balances.  The cash
collateral agreement has been extended through Aug. 19, 2005.

During the quarter, the company drew $25 million in debtor in
possession financing.  Additionally, on June 30, 2005, restricted
cash was $793 million, for a total cash position of $1.35 billion.  
This compares to a total cash position of $1.73 billion on
June 30, 2004, which included $975 million of unrestricted cash.

     Other notable US Airways developments:

          * Filed its Plan of Reorganization (POR) and Disclosure
            Statement with the U.S. Bankruptcy Court for the
            Eastern District of Virginia, based on the proposed
            merger with America West Holdings Corporation.  The
            bankruptcy court has set a hearing on approval of the
            Disclosure Statement for Aug. 9, 2005.  US Airways
            has targeted mid-September for a Plan Confirmation
            hearing;

          * Raised additional liquidity by selling 10 aircraft
            and three spare engines to Jet Partners LLC for $52
            million.  The sale is expected to close by mid-
            September;

          * Received commitments on $565 million in new equity
            investment and participation by suppliers and
            business partners that, together with the new equity,
            are expected to provide the company with
            approximately $1.5 billion in liquidity.  The new
            investors are: ACE Aviation Holdings; Par Investment
            Partners; Peninsula Investment Partners; Eastshore
            Aviation; a group of investors for which Wellington
            Management Company serves as an investment advisor;
            and a group of investors for which Tudor Investment
            Corp., serves as an investment advisor;

          * Introduced a low-cost guarantee program, whereby a
            customer who finds a lower price for a US Airways
            ticket on a Web site other than usairways.com will be
            refunded the difference and provided a $50 voucher
            toward a future US Airways flight booked at
            usairways.com; and

          * Increased the breadth of its international service by
            adding daily nonstop service between Philadelphia and
            both Barcelona and Venice. US Airways now serves 13
            destinations in Europe and 27 in the Caribbean (36
            when including our GoCaribbean partners).

US Airways will not hold a second quarter results conference call.

                      US Airways Group, Inc.
         Unaudited Consolidated Statements of Operations
                 Three Months Ended June 30, 2005
                          (in millions)

Operating Revenues
   Passenger transportation                              $1,768
   Cargo and freight                                         25
   Other                                                    152
                                                       --------
   Total Operating Revenues                               1,945

Operating Expenses
   Personnel costs                                          402
   Aviation fuel                                            445
   US Airways Express capacity purchases                    228
   Aircraft rent                                            116
   Other rent and landing fees                              131
   Selling expenses                                         101
   Aircraft maintenance                                     111
   Depreciation and amortization                             62
   Other                                                    308
                                                       --------
   Total Operating Expenses                               1,904
                                                       --------
   Operating Income (Loss)                                   41

Other Income (Expense)
   Interest income                                            7
   Interest expense, net                                    (81)
   Reorganization items, net                                (26)
   Other, net                                                (5)
                                                       --------
   Other Income (Expense), Net                             (105)
                                                       --------
Income (Loss) Before Income Taxes                           (64)

Provision (Credit) for Income Taxes                          (2)
                                                       --------
Net Income (Loss)                                          ($62)
                                                       ========

Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of:

            * US Airways, Inc.,
            * Allegheny Airlines, Inc.,
            * Piedmont Airlines, Inc.,
            * PSA Airlines, Inc.,
            * MidAtlantic Airways, Inc.,
            * US Airways Leasing and Sales, Inc.,
            * Material Services Company, Inc., and
            * Airways Assurance Limited, LLC.

Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.

US Airways and its subsidiaries filed another chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).  Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts.  In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts.  (US Airways Bankruptcy News, Issue
No. 100; Bankruptcy Creditors' Service, Inc., 215/945-7000)


USG CORP: Net Income Increases 38% to $110 Mil. in Second Quarter
-----------------------------------------------------------------
USG Corporation (NYSE:USG) reported second quarter net sales of
$1.3 billion, a record for any quarter in USG's history, and net
earnings of $110 million.  Net sales increased $142 million, or 12
percent, and net earnings increased $30 million, or 38 percent,
compared with the second quarter of last year.  Diluted earnings
per share for the second quarter of 2005 were $2.53 compared with
$1.86 in the same period a year ago.

"USG continued its strong performance with another great quarter,"
said USG Corporation Chairman, CEO and President William C. Foote.  
"Net sales this quarter were a record, driven by stronger
shipments and improved selling prices.  We shipped more
SHEETROCK(R) Brand gypsum wallboard and related gypsum products
than ever before, and operating margins improved for many of our
businesses, despite continuing cost pressures.  We are
successfully implementing our strategies to grow USG's core
businesses and improve our business processes to cope with higher
operating costs."

Net sales for the first half of 2005 were $2.5 billion versus
$2.2 billion for the same period in 2004.  USG reported net
earnings of $187 million for the first six months of this year
compared with net earnings of $137 million for the same period a
year ago.  Diluted earnings per share for the first six months of
2005 were $4.30 compared with $3.18 for the first six months of
2004.

Commenting further, Foote said, "USG's outlook for the rest of
2005 is favorable.  Demand for USG's gypsum wallboard products is
likely to remain strong in the second half as the robust new
housing and residential remodeling markets show no sign of slowing
in the near term."

                      North American Gypsum

USG's North American Gypsum business recorded net sales of
$804 million and operating profit of $148 million in the second
quarter.  Second quarter net sales increased by $126 million, or
19 percent, while operating profit increased $46 million, or 45
percent, compared with the same period a year ago.

United States Gypsum Company recorded second quarter 2005 net
sales of $720 million and operating profit of $125 million,
increases of $103 million and $38 million, respectively, compared
with the second quarter of 2004.  U.S. Gypsum's strong performance
during the quarter was mainly attributable to higher selling
prices and record shipments of the company's SHEETROCK Brand
gypsum wallboard.

U.S. Gypsum's second quarter shipments of gypsum wallboard were a
record for any quarter in its history, totaling 2.9 billion square
feet, 4 percent higher than shipments in last year's second
quarter.  U.S. Gypsum's nationwide average realized selling price
for gypsum wallboard was $138.28 per thousand square feet during
the second quarter, an increase of $19.81, or 17 percent, compared
with $118.47 per thousand square feet in the second quarter of
last year.

Second quarter 2005 gypsum wallboard selling prices reflect
continued strong industry demand and high company and industry
utilization rates.  The benefits of higher selling prices were
partially offset by higher costs, including higher energy and raw
material prices.  However, manufacturing costs for gypsum
wallboard improved in the second quarter of 2005 as compared to
the first quarter, due primarily to improved operating factors.

U.S. Gypsum also continued to grow sales of its complementary
products.  In the second quarter of 2005, U.S. Gypsum's shipments
of SHEETROCK Brand joint compound, DUROCK(R) Brand cement board
products and FIBEROCK(R) Brand gypsum fiber panels were the
highest for any quarter in its history.  Results for these
products also benefited from higher selling prices during the
period.

The gypsum division of Canada-based CGC Inc. reported second
quarter 2005 net sales of $82 million and operating profit of
$14 million.  Sales increased by $14 million, or 21 percent,
during the period and operating profit improved $5 million versus
last year's second quarter.  The improvement in results was
largely attributable to higher selling prices for SHEETROCK Brand
gypsum wallboard.

                        Worldwide Ceilings

USG's Worldwide Ceilings business reported second quarter net
sales of $178 million, a decline of $12 million versus the second
quarter of 2004.  Operating profit was $17 million in the quarter,
a decline of $9 million versus the same period a year ago.

USG's domestic ceilings business, USG Interiors, reported second
quarter 2005 net sales and operating profit of $124 million and
$13 million, respectively.  Net sales and operating profit
declined $11 million and $6 million, respectively.  The decline in
sales was due largely to lower shipments of ceiling grid and tile,
partially offset by higher selling prices for both product lines.  
In last year's second quarter, market concerns over a shortage of
steel used to make grid and related increases in steel costs
contributed to unusually strong demand for grid products.  Demand
in 2005 for the company's ceiling grid and tile has been in line
with overall industry demand, which remained relatively weak.  
Operating profit also declined during the quarter due to higher
manufacturing costs, primarily related to energy and raw materials
for ceiling tile and steel for ceiling grid.

USG International reported net sales and operating profit of
$52 million and $2 million, respectively, in the second quarter of
2005.  This compared with net sales of $54 million and operating
profit of $4 million for the same period a year ago.  These
declines primarily reflected lower demand and higher operating
costs for ceiling grid and tile in Europe.

The ceilings division of CGC Inc. reported net sales of
$14 million and operating profit of $2 million in the quarter.  
Net sales and operating profit for the same period a year ago were
$15 million and $3 million, respectively.  These results
primarily reflected lower volume and higher manufacturing costs
for ceiling grid, partially offset by higher selling prices.

                  Building Products Distribution

L&W Supply, USG's building products distribution business,
reported second quarter 2005 net sales of $506 million and
operating profit of $39 million, both records for any quarter in
L&W's history.  Sales and operating profit rose $52 million and
$8 million, respectively, over the second quarter of 2004.  The
increase in net sales primarily reflected improved pricing and
higher shipments of gypsum wallboard.  L&W's second quarter
gypsum wallboard shipments, also a record for any quarter, rose
10 percent versus the second quarter of 2004.  Selling prices for
gypsum wallboard increased 16 percent compared with the same
period a year ago.

                  Other Consolidated Information

Second quarter 2005 selling and administrative expenses of
$87 million increased by $8 million versus the second quarter of
2004.  For the first six months, these expenses were $176 million
versus $156 million a year ago.  These increases primarily
related to compensation and benefits, including retention and
incentive compensation, and higher funding for marketing and
growth initiatives.  Selling and administrative expenses as a
percent of net sales were 6.8 percent and 7.2 percent in the
second quarter and first six months of 2005, respectively, versus
6.9 percent and 7.2 percent for the comparable 2004 periods.

Interest expense of $2 million was reported in the second quarter
of 2005, compared with $1 million in the same period a year ago.  
Interest expense was $3 million and $2 million in the first six
months of 2005 and 2004, respectively.  Under AICPA Statement of
Position 90-7, "Financial Reporting by Entities in Reorganization
Under the Bankruptcy Code," virtually all of USG's outstanding
debt is classified as liabilities subject to compromise, and
interest expense on this debt has not been accrued or recorded
since USG's bankruptcy filing.

USG reported net Chapter 11 reorganization expenses/(income) of
($1) million in the second quarter of 2005, compared with
$4 million in last year's second quarter, a favorable change of
$5 million.  For the second quarter of 2005, this consisted of
$6 million in legal and financial advisory fees, offset by
$7 million in bankruptcy-related interest income.  In the same
period a year ago, USG incurred $6 million in legal and financial
advisory fees, partially offset by $2 million in bankruptcy-
related interest income.  Under SOP 90-7, interest income on
USG's bankruptcy-related cash is offset against Chapter 11
reorganization expenses.

As of June 30, 2005, USG had $1.3 billion of cash, cash
equivalents, restricted cash and marketable securities on a
consolidated basis, compared with $1.2 billion as of
March 31, 2005 and $1.25 billion as of December 31, 2004.  Capital
expenditures in the second quarter of 2005 were $43 million
compared with $27 million in the corresponding 2004 period.  
For the first six months of 2005, capital expenditures were
$76 million versus $47 million in the first six months of 2004.

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


VARTEC TELECOM: Wants to Examine Ex-Executives Under Rule 2004
--------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in VarTec
Telecom Inc. and its debtor-affiliates' chapter 11 cases wants to
examine eight former directors, officers and employees pursuant to
Rule 2004 of the Federal Rules of Bankruptcy Procedure:

      Individual                  Scheduled Deposition
      ----------                  --------------------
      Joe Cook                    Aug. 10, 2005 9:00 a.m.
      Miller Williams             Aug. 10, 2005 1:30 p.m.
      Ronald Hughes               Aug. 11, 2005 9:00 a.m.
      Hollis Ray Atkinson         Aug. 12, 2005 9:00 a.m.
      Gary Egger                  Aug. 15, 2005 9:00 a.m.
      Kevin McAleer               Aug. 16, 2005 9:00 a.m.
      Sonia Ayers                 Aug. 22, 2005 9:00 a.m.
      Connie Mitchell             Aug. 23, 2005 9:00 a.m.

The Committee wants them to produce:

   (1) documents relating to their compensation, including
       salaries and bonuses and copies of their employment
       contracts;

   (2) documents relating to any dividends or any other
       distributions paid to them;

   (3) documents relating to any loans made by any of the Debtors
       to them;

   (4) documents relating to any contracts they inked with the
       Debtors;

   (5) documents reflecting their ownership or investment in or
       loans to or contracts with:

       (a) 10XXX Ranch Company,
       (b) Choctaw Communications, Inc.,
       (c) Light Year Communications,
       (d) Protel,
       (e) Any of the Excel Entities,
       (f) Williams Communications, LCC,
       (g) Records Retrieval Inc,
       (h) Sunergos Technologies, Ltd.,
       (i) Universal Vision Corporation.

   (6) documents relating to any contracts or agreements they
       inked with any Debtor regarding the disposition or sale of
       property in Snow Mass, Colorado.  

The Committee is investigating multiple claims against numerous
individuals with varying restrictions and limitations including
the statute of limitations.  Additionally, because insurance
proceeds will likely be used to satisfy the potential claims, and
there is a substantial likelihood that those proceeds will be the
subject of competing claims, it is necessary for the Committee to
complete its investigation.

Investigation of the Estate Claims requires, among other things:

   * a detailed investigation and analysis of certain transactions
     and practices of the Debtors and the Debtors' former
     directors and officers;

   * an understanding and analysis of the property interests
     involved in the transactions; and

   * an identification of potential witnesses.

The Committee wants to examine these former officers and directors
and documents, records and other materials regarding the Debtors'
acts, conduct, property, liabilities, and financial affairs, all
of which are pertinent to the investigation of the Estate Claims.  

Headquartered in Dallas, Texas, VarTec Telecom Inc.
-- http://www.vartec.com/-- provides local and long distance     
service and is considered a pioneer in promoting 10-10 calling
plans.  The Company and its affiliates filed for chapter 11
protection on November 1, 2004 (Bankr. N.D. Tex. Case No.
04-81694.  Daniel C. Stewart, Esq., William L. Wallander, Esq.,
and Richard H. London, Esq., at Vinson & Elkins, represent the
Debtors in their restructuring efforts.  When the Company
filed for protection from its creditors, it listed more than
$100 million in assets and debts.


VARTEC TELECOM: Wants to Sell DeSoto Property in 363 Sale
---------------------------------------------------------
VarTec Telecom Inc. and its debtor-affiliates ask the Honorable
Judge Steven A. Felsenthal of the U.S. Bankruptcy Court for the
Northern District of Texas for permission to sell a real property
located in DeSoto, Texas free and clear of liens, claims,
encumbrances, taxes and interests.

The property includes a 4.1686-acre tract of vacant land located
at 1006 East Pleasant Run Road in DeSoto, Texas.

Rosen Systems, Inc., will be the exclusive agent to market and
sell the property.  

Rural Telephone Finance Cooperative has contractual liens and
security interests in the property that secure repayment of:

   (a) a $154,000,000 term loan, and
   (b) a $70,000,000 revolving line of credit commitment.

Abigail B. Willie, Esq., at Vinson & Elkins LLP in Dallas Texas
tells the Court that RTFC provisionally consents to the proposed
disposition, reserving its rights subject to final review.

Headquartered in Dallas, Texas, VarTec Telecom Inc.
-- http://www.vartec.com/-- provides local and long distance    
service and is considered a pioneer in promoting 10-10 calling
plans.  The Company and its affiliates filed for chapter 11
protection on November 1, 2004 (Bankr. N.D. Tex. Case No.
04-81694.  Daniel C. Stewart, Esq., William L. Wallander, Esq.,
and Richard H. London, Esq., at Vinson & Elkins LLP, represent the
Debtors in their restructuring efforts.  When the Company
filed for protection from its creditors, it listed more than
$100 million in assets and debts.


VARTEC TELECOM: Wants to Sell Personal Property in Addison, Texas
-----------------------------------------------------------------
VarTec Telecom Inc. and its debtor-affiliates ask the Honorable
Judge Steven A. Felsenthal of the U.S. Bankruptcy Court for the
Northern District of Texas for permission to sell some aged and
unnecessary personal property located in Addison, Texas free and
clear of liens, claims, encumbrances, and interests.

The property includes furniture, computers, electronics, two golf
carts, and other miscellany.  These assets are located at 4550
Excel Parkway in Addison, Texas.

The Debtors has employed Rosen Systems, Inc., as Liquidator and
Auctioneer to market the property and conduct an auction.  The
Debtors propose to hold the auction on Aug. 30, 2005, at
10:00 a.m.

Abigail B. Willie, Esq., at Vinson & Elkins LLP in Dallas, Texas
tells the Court that the Debtors anticipate sales proceeds between
$100,000 to $150,000.

Rural Telephone Finance Cooperative asserts a lien, interest, or
encumbrance in the Property and has provisionally consented to the
sale of the Property.

The Debtors also request authority to abandon or discard the
property by any means as the Debtors may elect, including donating
the Property to a charitable organization or removing the
Property, as waste, in the exercise of the Debtors' business
judgment.

Headquartered in Dallas, Texas, VarTec Telecom Inc.
-- http://www.vartec.com/-- provides local and long distance    
service and is considered a pioneer in promoting 10-10 calling
plans.  The Company and its affiliates filed for chapter 11
protection on November 1, 2004 (Bankr. N.D. Tex. Case No.
04-81694.  Daniel C. Stewart, Esq., William L. Wallander, Esq.,
and Richard H. London, Esq., at Vinson & Elkins LLP, represent the
Debtors in their restructuring efforts.  When the Company
filed for protection from its creditors, it listed more than
$100 million in assets and debts.


VILLAS AT HACIENDA: Court Says Ravenswood Must Produce Documents
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona granted the
request of Western Plains Development Corp., a creditor in Villas
at Hacienda del Sol, Inc.'s, chapter 11 case, to compel Ravenswood
Construction, LLC, to designate a responsible person who will
testify at an oral deposition pursuant to Rule 2004 of the Federal
Rules of Bankruptcy.

Western Plains wants Ravenswood to produce documents containing:

    a) all communication with anyone concerning completion of
       construction for the apartment project including bids,
       estimates, and construction contracts or subcontracts;

    b) all communication with anyone concerning financing the
       completion of the apartment project; and

    c) information concerning management, formation and
       capitalization for Ravenswood Construction, LLC

Western Plains is compiling information related to Ravenswood's
proposed completion of the Debtors apartment project.  The
project, called The Villas at Hacienda del Sol, is an exclusive,
gated rental community, located in Tucson, Arizona.

David Mason, the Debtor's principal, testified at the first
meeting of creditors in July 2005 that the Debtor owns Ravenswood
and that Ravenswood is communicating with subcontractors to
complete the apartment project.

During the meeting, Mr. Mason explained that he does not have
information on the estimates obtained by Ravenswood on the cost to
complete or any proposed construction contracts.  Western Plains
has learned that subcontractors who have worked on the apartment
project have provided Ravenswood with cost to complete
information.

The Debtor, however, has not asked for the Court's approval for a
completion contract.  The Debtor has also failed to provide
Western Plains with information concerning Ravenswood, cost to
complete or contracts by or with Ravenswood despite the Rule 2004
order.

Headquartered in Tucson, Arizona, Villas At Hacienda Del Sol, Inc.
-- http://www.thevillasathaciendadelsol.com/-- filed for chapter     
11 protection on March 28, 2005. (Bankr. D. Ariz. Case No.
05-01482).  Matthew R.K. Waterman, Esq., at Waterman & Waterman,
PC, represents the Debtor.  When the Company filed for protection
from its creditors, it estimated assets and liabilities ranging
from $10 million to $50 million.


W.R. GRACE: Asks Court to Approve Intercat Settlement Agreement
---------------------------------------------------------------
On October 18, 2002, David B. Bartholic and Intercat, Inc., sued
Nol-Tec Systems, Inc., for an alleged infringement of U.S. Patent
No. 5,389,236 issued February 14, 1995.  The plaintiffs accused
Nol-Tec of inducing and contributing to the infringement of
certain claims by making, using or selling a catalyst loader that
was used by the refiner to directly infringe the Intercat Patent.

Nol-Tec is W.R. Grace & Co.-Conn.'s manufacturer of certain
loaders used to inject additives into fluid catalytic cracking
units.

On May 8, 2003, the District Court in Minnesota -- where the
Litigation was pending -- approved Grace's request to intervene
in the Litigation to protect its supply of loaders, which are an
important component of its catalyst-additive business.

Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub P.C., in Wilmington, Delaware, informs the Court that
the Intercat Patent covers a particular method for injecting
additives into FCC units, which includes, among other steps:

    (a) establishing certain desired operating criteria for the
        unit;

    (b) determining a particular injection schedule for the
        additive -- amount per injection and interval between
        injections -- to effect those pre-established criteria;

    (c) injecting additive into the unit through several interval
        cycles while monitoring the actual weight of additive
        injected; and

    (d) correcting subsequent injections to account for any
        discrepancy between the amount scheduled to be injected
        and the amount actually injected in the previous cycles.

The Intercat Patent discloses that certain kinds of loading
equipment known as "loaders" are useful in the claimed method to
make the additive injections.  The loaders include a hopper that
carries an inventory of the additive to be injected and that is
situated on weigh cells.

According to the claimed method, the inventory in the hopper is
weighed both before and after each injection to determine whether
the amount scheduled to be injected was actually injected into
the FCC unit from the hopper.

Thus, Ms. Jones points out, the Intercat Patent does not cover
loaders per se, but only particular methods of injecting
additives.

Over the course of the Litigation, interest has taken Rule
30(b)(6) depositions of 20 refineries who have used the accused
Nol-Tec loaders.  Ms. Jones relates that it has always been
Grace's position that those refineries do not pre-establish the
operating criteria required by the patent claim or use any
criteria or data to set an injection schedule, and Grace believes
that the depositions have borne out that position.

Grace asserts that neither the refineries nor Grace nor Nol-Tec
infringe the Intercat Patent.

Nevertheless, Ms. Jones relates, Intercat has taken a contrary
position on what acts fall within the various method steps of the
claim and the sequence in which those steps must be performed.

Subsequently, in March 2005, each party filed a request for
summary judgment.  To date, no decision has been rendered on
either party's request.  The Litigation was set to go to trial in
August 2005.

                   Prior Litigation Won By Grace

In 1997, Intercat was found to have willfully infringed Grace's
patents covering SOx additives, resulting in a damage award of
over $22 million.  Intercat filed its own Chapter 11 bankruptcy
case after that judgment was entered.

Ms. Jones says that a Chapter 11 Plan, which Grace voted to
accept, was confirmed in Intercat's Chapter 11 case in 2002.  The
confirmed Intercat Plan provided for the payment of 105% of the
amount of general unsecured claims, including the claim based on
the Grace judgment, without interest, over a period of years
through 2011.

Ms. Jones tells Judge Fitzgerald that Intercat still owes Grace
about $16 million of the original judgment, which it is currently
paying at a rate of about $2.3 million per year.

                      The Intercat Settlement

On June 7, 2005, Intercat and Grace attended settlement
negotiations directed by the Court as a precondition for going to
trial in August 2005.  Since the parties could not reach
agreement on what acts by the refiner would constitute direct
infringement, they agreed to focus on the functionality of the
loader and fashioned a settlement around that issue.

In addition, Grace insisted on reaching a global solution under
other patents owned by the parties to avoid the distraction and
expense of a potential series of litigation.

Accordingly, the parties have reached a settlement that has three
components:

    (a) Grace's payment to Intercat for $9 million, structured as
        quarterly credits against the quarterly payments owed by
        Intercat to Grace as a result of the prior litigation;

    (b) a license under loaders that incorporated "corrective
        action," installed in the future by Grace or its
        affiliates to be used by refinery customers; and

    (c) an option by each party to obtain a license under the
        other party's patents covering loader related inventions
        developed before June 7, 2010.

Ms. Jones explains that the Payment extends over the remaining
life of the Intercat payments to Grace, through March 2012.  The
payment will act as consideration for a release for Grace and its
customers of all alleged past infringement on the use of all
previously shipped loaders.

The definition of "corrective action" and the consequent
definition of "loaders" within the safe harbor, which will affect
royalty payments by Grace going forward, have not yet been
finalized but are the subject of current negotiation.

Ms. Jones maintains that the Settlement Agreement, the Option
Agreement, and the Model License Agreement are considered to
constitute a single agreement expressed in three separate
documents and collectively constitute the "Intercat Settlement."

To the extent there are any disputes between Grace and Intercat
in finalizing the documents of the Settlement, the Magistrate,
Judge Boylan, is the final arbitrator without the possibility of
appeal.

Grace expects that the agreements embodying the Intercat
Settlement will be finalized before August 29, 2005, but in the
event that negotiations on the Intercat Settlement Agreement have
not been completed, the Debtors will advise the Court regarding
the status of those negotiations.

Ms. Jones contends that the contemplated Intercat Settlement
will:

    * relieve the Debtors from prospective legal costs and
      litigation risks associated with the underlying dispute;

    * preserve key Grace customer relationships;

    * ensure continuity of key suppliers; and

    * establish mechanisms to prevent further litigation on other
      loader issues.

By this motion, the Debtors ask Judge Fitzgerald to approve the
Intercat Settlement.

The Intercat Settlement Agreement is confidential.  To the extent
the Court determines it is necessary for review, the Agreement
will be submitted to the Court for in-camera inspection.

Headquartered in Columbia, Maryland, W.R. Grace & Co. --
http://www.grace.com/-- supplies catalysts and silica products,     
especially construction chemicals and building materials, and
container products globally.  The Company and its debtor-
affiliates filed for chapter 11 protection on April 2, 2001
(Bankr. Del. Case No. 01-01139).  James H.M. Sprayregen, Esq.,
at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts.  (W.R. Grace Bankruptcy
News, Issue No. 92; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


WINN-DIXIE: Committee Has Until August 25 to Challenge DIP Liens
----------------------------------------------------------------
As previously reported in the Troubled Company Reporter on July
18, 2005, the Official Committee of Unsecured Creditors appointed
in Winn-Dixie Stores, Inc., and its debtor-affiliates' chapter 11
cases asks the U.S. Bankruptcy Court for the Middle District of
Florida to enlarge the deadline within which to commence a
Prepetition Lien/Claim Challenge to and including August 25, 2005.

The Committee would utilize Akerman, its local co-counsel, to
review the Prepetition Lender Debt as set forth in the Final DIP
Order.  The Committee and Milbank determined that Akerman is
qualified to perform the review, and has sufficient resources and
experience to accomplish the review effectively.  Most
importantly, the Committee and the Debtors' estates would save
money due to the generally lower rate structure of Akerman's
professionals.

Milbank will not start the review of the Prepetition Lender Debt
pending approval of the retention of Akerman to avoid any
duplication of services.

                       Judge Funk's Ruling

The Committee will have through August 25, 2005, to commence an
adversary proceeding asserting a Prepetition Lien or Claim
Challenge, Judge Funk rules.

No later than August 10, 2005, the Committee will notify Wachovia
Bank National Association of all grounds on which the Committee
would assert a Prepetition Lien or Claim Challenge.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest    
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063).  The Honorable Judge
Robert D. Drain ordered the transfer of Winn-Dixie's chapter 11
cases from Manhattan to Jacksonville.  On April 14, 2005, Winn-
Dixie and its debtor-affiliates filed for chapter 11 protection in
M.D. Florida (Case No. 05-03817 to 05-03840).  D.J. Baker, Esq.,
at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson
Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP,
represent the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
$2,235,557,000 in total assets and $1,870,785,000 in total debts.
(Winn-Dixie Bankruptcy News, Issue No. 19; Bankruptcy Creditors'
Service, Inc., 215/945-7000).


WINN-DIXIE: Sells Pharmaceutical Assets to 10 Companies
-------------------------------------------------------
As previously reported in the Troubled Company Reporter on
July 8, 2005, Winn-Dixie Stores, Inc., and its debtor-affiliates
operate pharmacies at 107 of the stores targeted to be closed or
sold.  Many of the purchasers of the Targeted Pharmacy Stores will
purchase the pharmaceutical prescriptions and inventory located at
the store.  However, in the circumstance in which the Targeted
Pharmacy Store is not sold or a purchaser does not purchase the
store's Pharmaceutical Assets, the Debtors must sell or otherwise
transfer the Pharmaceutical Assets under applicable state law.

A schedule identifying each Targeted Stores with Pharmacies is
available for free at:

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

                         Committee Responds

The Official Committee of Unsecured Creditors raised various
issues to the Debtors in connection with the Pharmaceutical
Assets Sale, including concerns about certain indemnities
provided in the proposed agreements for the Pharmaceutical
Assets Sale.

The Committee expressly reserves all of its rights to object to
any claim or request for the payment of an administrative expense
sought by a purchaser under a Pharmaceutical Assets Sale
Agreement, including any claim or request for payment on account
of indemnification provided by the Debtors in excess of the
purchase price as not providing a benefit to the Debtors'
estates.

                         *     *     *

Judge Funk of the U.S. Bankruptcy Court for the Middle District of
Florida permits the Debtors to sell pharmaceutical assets,
free and clear of liens, claims, interests and encumbrances, to:

    * Publix Super Markets, Inc.,
    * Wal-Mart Stores, Inc.,
    * Target Corporation,
    * Rite Aid Corp,
    * CVS Corporation,
    * The Kroger Company,
    * Fred's Stores of Tennessee, Inc.,
    * Eckerd Corp.,
    * Walgreen Company, and
    * Bi-Lo, LLC.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest    
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063).  The Honorable Judge
Robert D. Drain ordered the transfer of Winn-Dixie's chapter 11
cases from Manhattan to Jacksonville.  On April 14, 2005, Winn-
Dixie and its debtor-affiliates filed for chapter 11 protection in
M.D. Florida (Case No. 05-03817 to 05-03840).  D.J. Baker, Esq.,
at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson
Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP,
represent the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
$2,235,557,000 in total assets and $1,870,785,000 in total debts.
(Winn-Dixie Bankruptcy News, Issue No. 19; Bankruptcy Creditors'
Service, Inc., 215/945-7000).


WOOD DISCOUNT: Voluntary Chapter 11 Case Summary
------------------------------------------------
Lead Debtor: Wood Discount Pharmacy, Inc.
             aka Wood Discount Pharmacy
             P.O. Box 590
             Alabaster, Alabama 35007

Bankruptcy Case No.: 05-07338

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      William Gregory & Pamela Kay Wood          05-07336

Type of Business: The Debtor operates a pharmacy that is fully
                  licensed to administer immunization shots, as
                  well as any type of injectable treatment.  The
                  Company also offers prescription delivery to
                  every location within a 15-mile radius and
                  over-the-counter medications as well as generic
                  and name-brand prescriptions. See
                  http://www.woodpharmacy.com/

Chapter 11 Petition Date: August 3, 2005

Court: Northern District of Alabama (Birmingham)

Debtors' Counsel: Frederick Mott Garfield, Esq.
                  Sextone, Cullen, Hobson & Garfield, PC
                  2116 10th Avenue South
                  Birmingham, Alabama 35205
                  Tel: (205) 252-5361
                  Fax: (205) 252-9557                          

                            Estimated Assets      Estimated Debts
                            ----------------      ---------------
Wood Discount Pharmacy,     $1 Million to         $1 Million to
Inc.                        $10 Million           $10 Million

William Gregory &           $1 Million to         $1 Million to
Pamela Kay Wood             $10 Million           $10 Million

The Debtors' did not file a list of their 20 Largest Unsecured
Creditors.


WORLDCOM INC: Notice of Class Action Settlements With Past Execs.
-----------------------------------------------------------------
The law firms of Barrack, Rodos & Bacine and Bernstein Litowitz
Berger & Grossmann LLP, Lead Counsel for the Class, regarding the
WorldCom, Inc., Securities Litigation issued a notice describing
the settlements reached in the WorldCom securities class action
litigation with four former WorldCom executives.

Background

On November 12, 2004, United States District Judge Denise Cote
granted final approval to a settlement in the amount of
$2,575,000,000 between Lead Plaintiff Alan G. Hevesi, Comptroller
of the State of New York and the sole Trustee of the New York
State Common Retirement Fund on behalf of the Class, and four
defendants associated with Citigroup, Inc.  That settlement was
described in a Notice of Proposed Settlement of Class Action
Against the Citigroup Defendants, dated Aug. 2, 2004, that was
mailed to Class Members.

Between March 3 and April 25, 2005, Lead Plaintiff achieved
settlements in a combined amount of $3,553,056,840 with all
remaining defendants against whom the Litigation was not stayed.
Those settlements were described in a Notice of Proposed
Settlements of Class Action with Settling Defendants and Bar Order
Notice, dated July 1, 2005, that was mailed to Class Members.  The
total amount previously recovered for the benefit of the Class,
including the Citigroup Settlement, is $6,128,056,840, plus
interest.

Mr. Hevesi has now reached settlements with the four remaining
defendants in the Litigation -- the Executive Defendants.  The
Litigation had been stayed against the Executive Defendants as a
result of the criminal charges filed against them.  The four
Executive Defendants are:
   
   -- former WorldCom chief executive officer Bernard Ebbers;
   -- former WorldCom chief financial officer Scott Sullivan;
   -- former WorldCom controller David Myers; and
   -- former WorldCom director of accounting Buford Yates.

This is the Court-approved Notice of the proposed settlements with
the WorldCom Executive Defendants.  This Notice is being issued by
sending it for publication in The Wall Street Journal and The New
York Times, and over the PR Newswire and Bloomberg News, posting
it on the website established for this Litigation,
http://www.worldcomlitigation.com/and sending it by mail to each  
Class Member who by Aug. 12, 2005, requests a hard copy of the
Notice from the Claims Administrator, identified in Part IX below.
There will be no other mailing of this Notice to Class Members.

The Class

As set forth in the Notice of Class Action, which was mailed to
Class Members pursuant to a December 11, 2003 Order of the Court,
the lawsuit has been certified by the Court as a Class Action on
behalf of a class consisting of all individuals or entities who
purchased or acquired publicly-traded securities of WorldCom,
Inc., during the period from April 29, 1999 through and including
June 25, 2002, and who were injured thereby.  The Class includes
persons or entities who acquired shares of WorldCom common stock
by any method, including but not limited to in the secondary
market, in exchange for shares of acquired companies pursuant to a
registration statement, or through the exercise of options
including options acquired pursuant to employee stock plans, and
persons or entities who acquired debt securities or other
preferred securities of WorldCom in the secondary market or
pursuant to a registration statement, and who were injured
thereby.

Excluded from the Class are:

   -- the defendants in the Litigation;

   -- members of the families of the individual defendants in the
      Litigation;

   -- any entity in which any defendant in the Litigation has a
      controlling interest;

   -- officers and directors of WorldCom and its subsidiaries and
      affiliates;

   -- and the legal representatives, heirs, successors or assigns
      of any such excluded party.

Also excluded from the Class are all persons who opted out of the
Class on a timely basis, i.e., by the Sept. 1, 2004, opt out
deadline, and did not submit a signed request for revocation of a
prior request for exclusion that was deemed effective by the
Court.  A more detailed description of the Class is contained in
the Notice of Settlements of Class Action With Settling Defendants
and Bar Order Notice, which can be obtained from the sources
identified in Part IX of this Notice.

The Settlements with the Executive Defendants

Between June 30, 2005 and July 26, 2005, after negotiations with
the Executive Defendants that included their disclosure of their
financial condition, Lead Plaintiff entered into Stipulations of
Settlement on behalf of the Class with each of the Executive
Defendants. The settlements reached with the Executive Defendants
are as follows:

     Bernard Ebbers -- June 30, 2005, for $5,636,543.69 in cash
     (paid to the Class on July 14 and July 29, 2005), plus
     approximately 75% of the net proceeds from the sales of
     certain of Ebbers' assets and approximately 66.7% of the net
     proceeds from sales relating to another Ebbers' asset, the
     Joshua Timberlands.  (The balance of the net proceeds will go
     to MCI, Inc., in satisfaction of debts owed to it by Ebbers.)
     Conservatively estimated, the additional consideration to be
     paid to the Class pursuant to the prospective liquidation of
     these assets is between $18 million and $28 million.

     Scott Sullivan -- July 26, 2005, for 90% of Sullivan's MCI
     401(k) account, or approximately $200,000 (to be paid to
     the Class before Sullivan is sentenced in his criminal
     case on August 11, 2005), plus approximately 90% of the net
     proceeds from the sale of the house presently under
     construction in the Le Lac Estate section of Boca Raton,
     Florida.  (The balance of the net proceeds will be
     distributed to the class of former WorldCom employees in the
     WorldCom ERISA Litigation.)  The consideration to be paid to
     the Class pursuant to the prospective sale of this property
     is estimated to be between $4 million and $5 million.

     David Myers and Buford Yates -- July 26, 2005, for no
     monetary consideration, after Lead Plaintiff's examination of
     the sworn financial statements of these Defendants confirmed
     their impecunious financial condition.

The settlements with Messrs. Ebbers and Sullivan will result in
the surrender of substantially all of their assets, and include
confidential protections for the Class in the event of a
bankruptcy proceeding involving Messrs. Ebbers or Sullivan.  If
the settlements are approved, bar orders will be entered
preventing Class Members from asserting any claims against the
Executive Defendants.

The Plans of Allocation

Mr. Hevesi and the Additional Named Plaintiffs have proposed to
the Court that the proceeds of the settlements with the WorldCom
Executive Defendants be allocated to members of the Class, as
follows:

     (i) 4.774% of the Net Settlement Funds to claims asserted
         under the Securities Act by purchasers of debt securities
         offered by WorldCom in May 2000;

    (ii) 15.226% of the Net Settlement Funds to claims asserted
         under the Securities Act of 1933 by purchasers of debt
         securities offered by WorldCom in May 2001; and

   (iii) 80% of the Net Settlement Funds to claims asserted under
         the Securities Exchange Act of 1934 by Class Members who,
         during the Class Period, purchased:

         (a) WorldCom stock and/or

         (b) publicly-traded debt securities issued by WorldCom
             prior to the beginning of the Class Period.

These are the same percentages utilized for the proposed
allocation of the proceeds from the settlement reached by
Plaintiffs with the former WorldCom Director Defendants and Arthur
Andersen LLP, as more fully described in the Notice of Proposed
Settlements, dated July 1, 2005.

Lead Plaintiff's Recommendation to the Class

The Lead Plaintiff recommends these settlements with the Executive
Defendants to the Class because of the inability of the Class to
recover the damages it seeks from these defendants given their
limited financial resources.  Each of the Executive Defendants has
provided a statement of financial condition to the Lead Plaintiff.  
In the event that they have failed to disclose assets, each of the
Executive Defendants has agreed that, subject to whatever rights
the U.S. Securities and Exchange Commission may have and choose to
exercise, the undisclosed assets will be transferred to the Class.  
Based on their evaluation of these settlements with Messrs. Ebbers
and Sullivan, the Government agreed to forego seeking restitution
at the sentencing of Messrs. Ebbers and Sullivan.

Attorney's Fees

The Lead Counsel has agreed with Lead Plaintiff that counsel will
not seek any attorney's fees from these recoveries.

The Settlement Hearing

A hearing will be held on Sept. 9, 2005, at 2:30 p.m., before the
Honorable Denise Cote in the United States District Court for the
Southern District of New York, Daniel Patrick Moynihan United
States Courthouse, 500 Pearl Street, Courtroom 11-B, New York, New
York 10007.  At the Hearing, the Court will consider, among other
matters:

     (i) the fairness, reasonableness and adequacy of the proposed
         settlements with the WorldCom Executive Defendants; and

    (ii) the fairness and reasonableness of the proposed Plans of
         Allocation for the settlements.

Submitting an Objection to the Settlements
or Plans of Allocation

Any Class Member may appear at the Settlement Hearing and be heard
on any of the foregoing matters.  No such person shall be heard to
object to the settlements or plans of allocation, however, unless
his, her or its objection or opposition is made in writing and,
together with copies of all other papers and briefs to be
submitted to the Court at the Settlement Hearing, by him, her or
it (including proof of all purchases or acquisitions of WorldCom
publicly- traded securities during the Class Period), is filed
with the Court and served for receipt by either of the Lead
Counsel, identified in Part IX, below, no later than Aug. 26,
2005, and showing due proof of such service on one of the Lead
Counsel.  (The deadline for submitting an objection to the
previously reached settlements described in a Notice of Proposed
Settlements of Class Action with Settling Defendants and Bar Order
Notice, dated July 1, 2005, is Aug. 12, 2005.)

Unless otherwise ordered by the Court, any Class Member who does
not make and serve his, her or its objection or opposition in the
manner provided shall be deemed to have waived all objections and
opposition to the issues described in this Notice.

Obtaining Notices, Supplemental Plan of Allocation,
or a Proof of Claim Form

If you believe that you are a member of the Class identified
above, you may obtain copies of any of the Notices identified
above; the proposed Supplemental Plan of Allocation; the
settlement agreements with the Executive Defendants; the
transcript of the July 11, 2005, court hearing at which the Court
preliminarily approved the Ebbers settlement; the transcript of
the July 28, 2005 court hearing at which the Court preliminarily
approved the Sullivan, Myers and Yates settlements; or a Proof of
Claim form, by downloading them from
http://www.worldcomlitigation.com/or by writing to the Court-
approved Administrator, as follows:

          WorldCom, Inc. Securities Litigation
          Administrator
          The Garden City Group, Inc.
          P.O. Box 9000 #6184
          Merrick, NY  11566-9000
          Tel: 1-866-808-3556 (toll free)
          Fax: 1-631-940-6549
          worldcominfo@gardencitygroup.com

  The Court-approved Lead Counsel for the Class are:

     Bernstein Litowitz Berger            Barrack, Rodos & Bacine
      & Grossmann Llp                     Leonard Barrack
     Max W. Berger                        Jeffrey W. Golan
     John P. Coffey                       3300 Two Commerce Square
     1285 Avenue of the Americas          2001 Market Street
     New York, NY 10019                   Philadelphia, PA 19103
     Tel: 212-544-1400                    Tel: 215-963-0600
     Fax: 212-544-1444                    Fax: 215-963-0838

Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI -- http://www.worldcom.com/-- is a pre-eminent global   
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532).  On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts.  The Bankruptcy Court confirmed WorldCom's Plan on
October 31, 2003, and on April 20, 2004, the company formally
emerged from U.S. Chapter 11 protection as MCI, Inc.


                          *********

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                          *********

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  
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F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo Pinili,
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Copyright 2005.  All rights reserved.  ISSN: 1520-9474.

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