TCR_Public/050808.mbx       T R O U B L E D   C O M P A N Y   R E P O R T E R

           Monday, August 8, 2005, Vol. 9, No. 186

                          Headlines

360NETWORKS: Delinquent in Filing Financial Reports
ACE AVIATION: Earns $168 Million of Net Income in Second Quarter
ADELPHIA COMMS: Court OKs Sale of Long Distance Units to Pioneer
AHERN RENTALS: Moody's Rates Proposed $175 Million Notes at (P) B3
ALLIED HOLDINGS: Hires Troutman Sanders as Lead Counsel

ALLIED HOLDINGS: Union Fights To Protect Jobs Following Bankruptcy
ALTERRA HEALTHCARE: Seeks 2nd Extension to File Notices of Removal
ANC RENTAL: Trust Wants Until Dec. 15 to Object to Proofs of Claim
ANY MOUNTAIN: Committee Objects to 3rd Amended Chapter 11 Plan
AOL LATIN: Wants to Hire Cicerone Capital as Financial Advisors

ARMSTRONG WORLD: DIP Facility Backs $43.5M in Outstanding L/C's
ATA AIRLINES: Wants Lease Decision Period Stretched to Dec. 27
BONUS STORES: Settles Texas Taxing Authorities' Claims
BRANTLEY CAPITAL: Nasdaq Halts Common Stock Trading
CALPINE CORP: Subsidiary Terminates Senior Secured Debt Offering

CATHOLIC CHURCH: Spokane Claims Rep. Wants to Limit Testimony
CATHOLIC CHURCH: Tucson Files Technical Amendments to Plan
CELESTICA INC: Acquires Ontario-Based CoreSim
CHI-CHI'S: Fulminant Hepatitis Victim Gets $6,250,000 Settlement
COMDIAL CORP: Panel Taps Weiser LLP as Financial Advisors

COMDIAL CORP: Wants Until Sept. 26 to Make Lease-Related Decisions
COMPLETE PRODUCTION: S&P Rates $530 Million Bank Loans at B
CONSECO INC: Earns $88.1 Million of Net Income in Second Quarter
CT CDO: Fitch Assigns Low-B Ratings to Six Certificate Classes
DELPHI CORP: Draws $1.5 Billion Under $1.8 Billion Revolver

DELPHI CORP: Negotiating with GM & UAW on Restructuring Operations
DELPHI CORP: Heightened Bankruptcy Risk Cues Fitch to Junk Ratings
DEPARTMENT 56: Moody's Assigns B1 Corporate Family Rating
DIRECT MERCHANTS: Moody's Reviews Ba2 Long-Term Deposit Rating
DVI INC: Trust Can't Access Merrill Lynch's Privilege Log

EAST 44TH REALTY: Case Summary & 20 Largest Unsecured Creditors
ENRON: Judge Harmon Reinstates UC's Claims Against Deutsche Bank
ENRON CORP: Inks Pact Resolving Jedi II & CalPERS Claim Disputes
ENRON CORP: PGH & PTC Asks Court to Dismiss Chapter 11 Cases
FLEETWOOD ENTERPRISES: Defers Dividends on 6% Preferred Securities

FRIEDMAN'S INC: Files Chapter 11 Plan of Reorganization in Georgia
GLOBAL CROSSING: GCUK Begins Exchange Offer for Sr. Secured Notes
GMAC COMMERCIAL: Fitch Puts Low-B Rated Certs. on Watch Positive
GRAFTECH INT'L: June 30 Balance Sheet Upside-Down by $64 Million
HOLLINGER INT'L: Names Former NY Times CFO to Audit Committee

INTERSTATE BAKERIES: Charles Sullivan Retires From Board
INTERSTATE BAKERIES: Court OKs $700,000 Sale of Hearth Roll Line
INTERSTATE BAKERIES: Wants to Reject 9 Real Property Leases
JERNBERG INDUSTRIES: Court Orders Debtor to File Plan by Oct. 27
KAISER ALUMINUM: Gets Okay to Hire Ernst & Young as Tax Servicer

KMART CORP: Court Allows Hampton Roads' $3.5 Mil. Rejection Claim
LA PALOMA: S&P Rates $370 Million Loans at BB-
LIFEPOINT HOSPITALS: Moody's Rates New $200 Million Notes at B2
LIFEPOINT HOSPITALS: S&P Rates $200 Million Senior Notes at B+
LIONBRIDGE TECH: Moody's Rates Proposed $125 Million Loans at B1

LIONBRIDGE TECH: S&P Rates Proposed $125 Million Loans at B
MEDICAL ACADEMIC: S&P Upgrades Rating on Revenue Bonds to BB+
MERIDIAN AUTOMOTIVE: Court Approves Sidley Austin as Counsel
MERIDIAN AUTOMOTIVE: Gets Court Nod to Employ FTI Consulting
MERIDIAN AUTOMOTIVE: No Evergreen Retainer for Young Conaway

MERRILL LYNCH: S&P Lifts Rating on Class F Certificates to BB+
METRIS COS: HSBC Finance to Acquire Company for $1.59 Billion
METRIS COMPANIES: Moody's Reviews Ratings for Possible Upgrade
METRIS COMPANIES: HSBC Finance Sale Prompts S&P's Positive Watch
METRIS COMPANIES: Fitch Places B- Rating on Senior Unsecured Debt

MICHAELS STORES: S&P Withdraws BB+ Rating at Company's Request
MILLENNIUM CHEMICAL: S&P Rates Proposed $250 Mil. Sr. Loan at BB
MIRANT CORP: MAGi Panel Wants Court Order on Document Production
MMM HOLDINGS: Moody's Assigns B2 Corporate Family Rating
MORGAN STANLEY: S&P Upgrades Rating on Class F Certificates

MORGAN STANLEY: Fitch Affirms Junk Rating on $2.1 Million Certs.
N-45 FIRST: S&P Lifts Rating on Three Certificate Classes
NEW WORLD: June 28 Balance Sheet Upside-Down by $120.9 Million
NEWMAST MARKETING: Case Summary & 20 Largest Unsecured Creditors
NEXTEL COMMS: Noteholders Agree to Amend Indentures

NEXTEL COMMS: Pending Merger Completion Cues S&P to Retain Watch
PC LANDING: Wants Court to Approve Lucent Contract
PORT TOWNSEND: Parent Will Re-Audit Fiscal 2002 & 2003 Financials
PROXIM CORP: Committee Wants Drinker Biddle as Counsel
PROXIM CORP: Committee Wants Weiser LLP as Financial Advisor

QUESTRON TECHNOLOGY: Files Disclosure Statement in Delaware
QUIGLEY COMPANY: DIP Financing Maturity Extended to March 8
RAMP CORP: Committee Hires Phillips Nizer as Counsel
RAMP CORP: Creditor Seeks Appointment of Operating Trustee
RDR RESOLUTION: Case Summary & 23 Largest Unsecured Creditors

REGIONAL DIAGNOSTICS: Committee Taps Olshan Grundman as Co-Counsel
REGIONAL DIAGNOSTICS: Has Until October 26 to Decide on Leases
ROCK OF AGES: Lenders Agree to Waive Cash Flow Covenant Violation
SAINT VINCENTS: Iris Cotto Wants to Continue Malpractice Suit
SAINT VINCENTS: Wants Court Approval of $6.7MM DASNY DIP Facility

SAINT VINCENTS: Wants to Repay Commerce Bank Loan
SAKS INC: Moody's Reviews Low-B Ratings for Possible Upgrade
SCOTIA PACIFIC: Outlines Restructuring Via Prepack Ch. 11 Plan
SOLUTIA INC: Faces Probe in Belgium on Sale of BBP Business
SPECIAL DEVICES: Moody's Withdraws Junk Senior Sub. Notes' Rating

STELCO INC: Reports $40 Million Net Earnings for Second Quarter
STRATOS GLOBAL: Poor Performance Prompts S&P's Negative Outlook
TOBACCO ROW: Copy of Confirmed Chapter 11 Plan Available
TOWER AUTOMOTIVE: Wants Court to Approve Steel Supply Agreement
TOWER AUTOMOTIVE: Wants to Assume Seagull Software Agreements

UAL CORP: Barclay Bank Wants $14.4 Million Admin. Expenses Paid
UAL CORP: Committee Retains Parthenon Group as Economic Expert
UAL CORP: Withdraws Motion to Approve Citigroup Cooperation Pact
US AIRWAYS: 9/11 Tort Plaintiffs Agrees to Waive Claims
US AIRWAYS: Gets Court Nod to Hire Merrill Lynch as Dealer Manager

VARIG S.A.: Board Names Omar da Cunha As New Company President
VARIG S.A.: Six Companies Eye Cargo Units
VARIG S.A.: TAP Air to Present Acquisition Bid in September
VILLAS AT HACIENDA: Western Plains Wants Ch. 11 Trustee Appointed
VISION METALS: Court Dismisses Chapter 11 Case

W.R. GRACE: Wants to Acquire Single-Site Assets for $1.5 Million
WACHOVIA BANK: S&P Puts Low-B Ratings on Six Certificate Classes
WEIRTON STEEL: Trust Gets Court Nod to Amend WVWCC Settlement Pact
WESTCOM CORP: Moody's Withdraws All Debt Ratings
WINN-DIXIE: 20 Creditors Transfer $2,348,361 in Claims

WINN-DIXIE: Ruddick Corp. Acquires Nine Stores for $16.75 Million
WORLDCOM INC: Court Disallows Michael Jordan's $8 Million Claim
WORLDCOM INC: Wants Withdrawal of N.Y. Fund Claims Recognized

* Wilmer Cutler Adds Three New Lawyers to Palo Alto Office
* BOND PRICING: For the week of Aug. 1 - Aug. 5, 2005

                          *********

360NETWORKS: Delinquent in Filing Financial Reports
---------------------------------------------------
In a notice dated July 26, 2005, the Ontario Securities
Commission disclosed that 360networks, Inc., is delinquent in
filing its Annual Financial Statements.

According to the Ontario Securities Commission, 360networks has
not filed interim financial statements within 60 days of its
quarter end, as required by Section 77 of the Ontario Securities
Act.  Furthermore, 360networks has not filed an AIF within 140
days of the fiscal year end, as required by OSC Rule 51-501.

The company was Cease traded by the Ontario Securities Commission
on July 19, 2002.

Headquartered in Vancouver, British Columbia, 360networks, Inc. --
http://www.360.net/-- is a leading independent provider of fiber  
optic communications network products and services worldwide.  The
Company and its 22 debtor-affiliates filed for chapter 11
protection on June 28, 2001 (Bankr. S.D.N.Y. Case No. 01-13721),
obtained confirmation of a plan on October 1, 2002, and emerged
from chapter 11 on November 12, 2002. Alan J. Lipkin, Esq., and
Shelley C. Chapman, Esq., at Willkie Farr & Gallagher, represent
the Company before the Bankruptcy Court.  When the Debtors filed
for protection from its creditors, they listed $6,326,000,000 in
assets and $3,597,000,000 in liabilities.  (360 Bankruptcy News,
Issue No. 86; Bankruptcy Creditors' Service, Inc., 215/945-7000)


ACE AVIATION: Earns $168 Million of Net Income in Second Quarter
----------------------------------------------------------------
ACE Aviation Holdings Inc. reported operating income of
$177 million for the second quarter of 2005, an increase of
$155 million from the operating income before reorganization and
restructuring items of $22 million recorded in the second quarter
of 2004.  EBITDAR of $394 million was achieved in the second
quarter of 2005, an improvement of $99 million over the 2004
quarter.  Operating revenues were up $237 million or 11 per cent
reflecting a significant increase in passenger revenues.  
Passenger traffic, as measured by revenue passenger miles -- RPMs,
increased 7 per cent on a capacity increase of 4 per cent, as
measured by available seat miles -- ASMs, resulting in a passenger
load factor improvement of 2.4 percentage points.  On the same
basis of presentation, passenger revenue per available seat mile
was up 6 per cent reflecting the significant improvement in the
passenger load factor combined with the 3 per cent improvement in
passenger yield, as measured by passenger revenue per revenue
passenger mile.

Operating expenses increased $82 million or 4 per cent over the
second quarter of 2004.  The fuel expense increase of $156 million
or 42 per cent more than offset the continued cost reductions
achieved in other expense categories.  Excluding fuel expense,
unit cost was reduced by 8 per cent from the second quarter of
2004.  Including fuel expense, unit cost was essentially unchanged
from the second quarter of 2004.

Net income for the second quarter of 2005 was $168 million. This
compared to a net loss of $510 million, which included
reorganization and restructuring items of $426 million recorded in
the second quarter of 2004.  Included in the 2005 second quarter
net income of $168 million are the following non-recurring items:
a dilution gain of $190 million and a tax provision of $28 million
related to the Aeroplan transaction and charges of $29 million
related to the extinguishment of the credit facility with General
Electric Capital Corporation.  Excluding these non-recurring
items, adjusted income before foreign exchange on non-compromised
monetary items and income taxes would have been $116 million.

"I am pleased to report a significant improvement in operating
results for the Corporation", said Robert Milton, Chairman,
President and CEO of ACE Aviation Holdings Inc.  "Following the
significant milestones achieved in the implementation of ACE's
business plan throughout the quarter, these operating results
further confirm the potential of ACE going forward.  Our revenue
performance, in terms of both traffic and yield, was strong and
gained momentum throughout the quarter.  This reflects our ability
to better match capacity to demand as well as increasing customer
response to Air Canada's product offering.  Furthermore, our unit
costs have remained essentially unchanged from the second quarter
of 2004, despite a 42 per cent increase in fuel costs.  With
$2.1 billion in new equity and equity-linked capital raised since
September 2004, ACE now has one of the strongest balance sheets in
the industry and our debt is mostly aircraft-related.  All in all,
this is a clear indication that the restructuring efforts of Air
Canada employees and other stakeholders are paying off.

"Looking forward, the revenue picture is expected to continue to
strengthen as we increase capacity in North America with new large
regional aircraft deliveries.  The increasing yields and record
traffic we achieved throughout the quarter reflect a healthier
market environment in Canada and ever-growing consumer response to
the Air Canada product.  With the ongoing deliveries of Embraer
175 and Bombardier 705 aircraft, we are now able to respond to
market opportunities and improve our schedule with additional
flights on high-demand routes and non-stop service on new routes.  
We expect this strong revenue picture to continue into the last
six months of the year.

"In addition, the performance of the other operating segments
within ACE continue to track well against plan as Aeroplan, ACTS
and Jazz are not directly exposed to fuel price fluctuations.   
These results provide a further endorsement of the Corporation's
strategy of diversifying its operating results.  The Corporation
also continues to build an industry-leading balance sheet and
enjoys strong cash flow performance.  One area of concern,
however, for our transportation services segment is the sustained
high price for oil.  As we have discussed before, a US$1 per
barrel increase in the price of WTI has an approximate $28 million
impact on our fuel expenses all things being equal.  We have been
able to mitigate approximately one third of this fuel expense
growth through fuel surcharges.  Given strengthening yields, we
expect this percentage to increase going forward.  As of June 30,
2005, we slightly exceeded our internal expectations for EBITDAR,
as a result of particularly strong results in both traffic and
RASM, despite fuel costs being $133 million over plan.  We remain
confident that, barring any further unforeseen events, our
financial performance for the full year will be amongst the
strongest in the industry.

"In order to minimize our exposure to the volatility of fuel
prices going forward, the Corporation has decided to implement,
effective immediately, a systematic fuel risk management strategy
using financial instruments to build up our hedge position in
increments of approximately 4% per month to a target level of
approximately 50 % of our future fuel requirement over a 24-month
period."     

The Corporation also announced the appointment of Mr. Richard M.
McCoy of Toronto to the ACE Board of Directors. Mr. McCoy replaces
the Honourable Frank McKenna who left the Board in March 2005 upon
his appointment as Canada's Ambassador to the United States.  
Prior to his retirement Mr. McCoy was Vice Chairman, Investment
Banking at TD Securities Inc.  He was active in the securities
industry for 35 years. Prior to joining TD Securities in 1997, Mr.
McCoy was Deputy Chairman of CIBC Wood Gundy.  Mr. McCoy is
director of several Canadian companies and is a past Chairman of
the Shaw Festival Foundation.

"I want to welcome Dick McCoy to the ACE Board of Directors," said
Mr. Milton.  "Dick is a well-known business leader and his
contributions to our Board will be welcome as we continue to
aggressively implement our strategy of maximizing the value of
ACE's business units."

                 Highlights of ACE Achievements

ACE recorded significant progress towards the implementation of
its business plan in the quarter.

ACE Equity and Convertible Notes Offerings

In April, ACE completed one of the most sizeable equity raises in
the airline industry's history.  The Corporation raised
approximately $792 million in gross proceeds following the
successful completion of its offerings of Class A Variable Voting
Shares and Class B Voting Shares and Convertible Senior Notes due
2035.  Approximately $557 million of the aggregate net cash
proceeds of the offerings was used to repay all of the
Corporation's outstanding debt under the exit credit facility with
General Electric Capital Corporation.  The balance will be used
for general corporate purposes.  In addition, Air Canada, ACE
Aviation's principal subsidiary, entered into a two-year senior
secured revolving credit facility in an aggregate amount of
$300 million with a syndicate of lenders.  As at June 30, 2005, no
amounts have been drawn against this credit facility.

US Airways/America West Planned Investment

Pursuant to an investment agreement announced in May between ACE
and the merged US Airways/America West carrier, subject to certain
conditions, ACE will invest US$75 million in the merged carrier.   
This investment will represent approximately 7% of the merged
entity at closing, depending on the total amount of new equity
capital raised.  In addition, the agreement provides for five-year
commercial agreements with the newly merged entity regarding
maintenance services, ground handling, regional jet flying,
network, training and other areas of cooperation.  The benefits
expected to be derived by Air Canada Technical Services (ACTS)
alone are significant.  It is estimated that as a result of the
maintenance agreement with the newly merged entity, ACTS will
become one of the top three aircraft MRO providers worldwide in
terms of sales with anticipated revenues in excess of $1 billion
per annum by 2006, with more than half being earned from customers
other than Air Canada.  This investment is consistent with ACE's
strategic plan to grow its business units with an emphasis on
third-party revenues.  The investment agreement is subject, among
other closing conditions, to bankruptcy court approval and the
closing of the US Airways/America West merger, including receipt
of applicable regulatory approvals.

Aeroplan Income Fund

In June, ACE and Aeroplan Income Fund successfully completed the
first-ever monetization of an airline frequent flyer loyalty
program with an initial public offering of the Fund, which
represented a $2 billion equity valuation for Aeroplan.  The IPO
constituted a 14.4% divesture of Aeroplan with ACE holding the
balance 85.6% interest in Aeroplan LP.  The aggregate gross
proceeds from the IPO (including the full exercise of the
underwriters' over-allotment options) totaled $287.5 million.  In
connection with the offering, Aeroplan LP established $475 million
in senior secured syndicated credit facilities, of which
$318 million was drawn on June 29, 2005.

Fleet Update

Air Canada began taking delivery of the first of 15 state-of-the-
art Embraer 175 aircraft in July 2005.  The Embraer 175 is
configured in two classes of service with nine seats in Executive
Class with three abreast seating offering 38 inches of legroom,
and 64 seats in Hospitality with four abreast seating offering 32
inches of legroom.  In November 2005, Air Canada will begin taking
delivery of 45 Embraer 190 aircraft configured in two classes of
service with 9 seats in Executive Class with three abreast seating
offering 38 inches of legroom, and 84 seats in Hospitality with
four abreast seating offering 33 inches of legroom and featuring
spacious overhead bins.  The new Embraer aircraft will be deployed
throughout Air Canada's North America network.

Meanwhile, Air Canada Jazz took delivery of its first 75-seat
CRJ-705 aircraft earlier in May with a total of 15 to be
introduced into service by December 2005.  The new CRJ-705
aircraft features Executive Class service and leading levels of
comfort including 37 inches of legroom in Executive Class and an
industry leading 34 inches of legroom in Hospitality Class.  Both
the Embraer 175 and the Bombardier 705 will have in-seat audio and
video on demand in both cabins installed beginning in the fall
2005.

Jazz Air Limited Partnership

To maximize the value of its business units for the benefit of its
shareholders, ACE intends to proceed with an initial public
offering of Jazz Air Limited Partnership through an income trust
structure.  A preliminary prospectus in respect of the offering is
expected to be filed in the third quarter and ACE will retain a
majority interest in Jazz.

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

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

                         *     *     *

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


ADELPHIA COMMS: Court OKs Sale of Long Distance Units to Pioneer
----------------------------------------------------------------
Judge Gerber of the U.S. Bankruptcy Court for the Southern
District of New York gave Adelphia Communications Corporation and
its debtor-affiliates, to sell their long distance telephone
business to Telecom Management, Inc., d/b/a Pioneer Telephone, for
$1,180,000, despite objections posed by OCV, Inc.

Adelphia Telecommunications, Inc., and Adelphia Telecommunications
of Florida, Inc. operated the long distance telephone businesses.

As reported in the Troubled Company Reporter on July 11, 2005,
Adelphia Long Distance is not among the ACOM Debtors' assets that
will be sold to Time Warner NY Cable LLC and Comcast Corporation,
Ms. Chapman states.  Since the Time Warner-Comcast Transaction is
the centerpiece of the Debtors' Plan for emergence and commands
significant time and attention from the Debtors, the continued
operation of Adelphia Long Distance would be a distraction to
management.  

                        OCV's Objections

Joseph H. Lemkin, Esq., at Duane Morris LLP, in Newark, New
Jersey, told the Court that on June 3, 2005, OCV, Inc., offered
to purchase the ACOM Debtors' long distance business for
$1,200,000 with the final payment to be made within 60 days of
closing.  OCV believes the offer is superior to the Debtors'
Asset Purchase Agreement with Pioneer Telephone.

OCV made repeated follow-up inquiries to the ACOM Debtors but was
never given any feedback as to why its offer was not accepted,
nor how it could be improved to make it acceptable, Mr. Lemkin
says.

On July 19, 2005, OCV's Chief Executive Officer Jay Jessup
received by mail a copy of the proposed Pioneer Asset Purchase
Agreement.  The following day, OCV offered to pay the same amount
proposed by Pioneer plus $250,000 within 180 days after closing,
subject to a reduction of the $250,000 if there is a significant
drop-off in the long distance business receivables within 150
days after closing.

OCV asked the Court to direct the Debtors to:

    1. close the Pioneer Sale Transaction pursuant to its clearly
       superior offer; and

    2. immediately hold an auction, with the Court as the arbiter
       of what constitutes a higher and best offer.

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


AHERN RENTALS: Moody's Rates Proposed $175 Million Notes at (P) B3
------------------------------------------------------------------
Moody's Investors Service has assigned a (P) B3 long-term rating
to Ahern Rentals, Inc. proposed $175 million second priority
senior secured notes due 2012.  The rating agency also assigned a
B2 Corporate Family Rating (previously called Senior Implied) and
a SGL-3 Speculative Grade Liquidity Rating to the company.  The
rating outlook is stable.

The B2 corporate family rating reflects Moody's view that Ahern's
near-term debt protection measures will remain modest through 2005
due to the company's high leverage and its large capital
expenditure program.  Moreover, the company will remain vulnerable
to the highly competitive operating environment and cyclicality
within the equipment rental sector.

However, Moody's also expects that the company's debt protection
measures will begin to strengthen and to be more supportive of the
B2 rating by the end of 2006 as the US rental market continues to
recover, and as the company begins to scale back the pace of
capital expenditures.  As this occurs, the company should begin to
generate free cash flow that the rating agency anticipates will be
used to reduce debt.

The B2 rating also anticipates that estate planning by the
company's owner will limit any potential burden on Ahern to make
distributions in connection with estate taxes.  Finally, the
company should be successful in negotiating amendments to its
senior secured credit facility that will increase its borrowing
base (thereby expanding availability) and extend its maturity to
2010.  The stable outlook reflects Moody's anticipation that Ahern
will continue to capitalize on the more robust demand levels
within the equipment rental market and that debt protection
measures will strengthen.

The (P) B3 rating on the second priority senior secured notes
reflects the junior position relative to the security interest of
the $175 million first priority senior secured credit facility in
substantially all of Ahern's property and equipment.

The SGL-3 Rating reflects Moody's belief that the company will
maintain an adequate liquidity profile over the next 12-month
period.  The SGL rating anticipates that Ahern's operating cash
flow generation combined with approximately $95 million of pro
forma availability under its first lien senior secured credit
facility should be sufficient to fund the company's required
obligations, capital spending, and other needs over the next 12
months.  Although internal cash generation and availability under
the borrowing facility should cover all anticipated requirements,
the margin of anticipated sources over uses is modest and thereby
constrains the SGL rating.

Ahern is undertaking a recapitalization.  The new capital
structure will consist of:

   * the $175 million first priority senior secured facility;

   * the $175 million in second priority senior secured notes; and

   * about $2.3 million in other notes.

Book equity at closing will approximate $18 million.  Proceeds
from the proposed second priority senior secured notes will be
used to:

   1) repay the existing $90 million second priority senior
      secured notes;

   2) reduce borrowings by about $63 million under the first
      priority senior secured facility;  and

   3) pay associated fees and expenses.

Ahern will continue to face important operational and financial
challenges.  Operationally, the construction equipment rental
market remains both highly competitive and cyclical.  Ahern
significantly scaled back its capital expenditures during the
recent economic downturn as it sold off its excess fleet,
mitigating the impact of the downturn.  With the economic recovery
underway, Ahern has made significant investments in its fleet,
which strained the company's cash flow.

Additionally, the company generates modest levels of cash relative
to the potentially high leverage employed in Ahern's capital
structure.  The company's small size, coupled with the higher
leverage makes it vulnerable to potential adverse operating and
financial risks.  Finally, the priority of claim of the second
priority notes will remain junior to that of the large, first
priority facility.

Moody's believes that Ahern's competitive strengths; the robust
demand in the equipment rental market; and, a scale-back in the
company's aggressive capital expenditure program will enable the
company to generate robust free cash flow which would be used to
reduce debt.  As this occurs, debt protection measures would
improve and be more supportive of the B2 rating.  By the end of
2006 Moody's anticipates EBIT/Interest should will approximate
1.4x, debt/EBITDA will be in the area of 3.8x, and retained cash
flow (defined as cash from operations before working capital
changes less dividends) to debt will be around 18%.

The non-residential construction market, which is the main driver
for equipment rental industry, is experiencing a solid recovery
with spending growth projected to be in the mid to high-single
digits over the next eighteen months versus the negative growth
experienced in mid-2001 through 2003.  This more favorable
industry outlook should support continued improvement in Ahern's
utilization rates and cash generation.  As a result, Moody's
anticipates that Ahern will be able to fund a majority of its
rental fleet expansion from internally generated cash by 2006.
Upon amending the first priority facility and closing of the
second priority credit facility Ahern will have extended its debt
maturity profile until mid-2010 when the first priority facility
matures.

Notwithstanding favorable industry outlook and the potential
benefits to Ahern, the company faces considerable challenges.  The
equipment industry is highly competitive with significant number
of participants that are better capitalized than Ahern.  The
industry will also remain highly cyclical.  However, Moody's
believes that Ahern's business model of providing predominately
high-reach equipment within Southwestern Metropolitan markets,
especially in Las Vegas and California, helps mitigate these
risks.

To remain competitive Ahern continues with significant capital
purchases.  In the past eighteen gross CAPEX totaled about $127
million ($114 million net of dispositions), resulting in a very
young fleet age.  Partially offsetting the capital disbursement
requirement is an active secondary market for used construction
equipment.  The sale of equipment into this market represents a
sizeable source of cash flow, particularly during downturns in the
equipment rental market.  Importantly, Ahern has maintained
prudent depreciation rates for its rental fleet.

Consequently, residual values of equipment sold in the secondary
market have historically been very close to the realization value.
Moody's believe that Ahern has largely completed its fleet
investment to take advantage of the economic rebound in the non-
residential construction market.  Moreover, the Rating Agency
anticipates that Ahern going forward will significantly curtail
its CAPEX program in relation to previous years subject to market
demand.

Factors which could contribute to an improvement in Ahern's
ratings include a continued strong non-residential construction
market driving improved earnings.  Operational improvements
combined with more robust free cash flows used for significant
debt reductions would enhance the company's financial flexibility.

Factors which might result in pressure on the company's ratings
include any adverse changes in the construction and industrial
end-markets, which could lead to decreased demand in equipment and
services.  Economic declines generally result in lower overall
rental rates.  Ahern's substantial indebtedness or continued
aggressive CAPEX program could adversely affect the company's
financial flexibility and pressure the ratings as well.

Ahern Rentals, headquartered in Las Vegas, Nevada, is a regional
equipment supplier in the Mid-West and West Coast regions.


ALLIED HOLDINGS: Hires Troutman Sanders as Lead Counsel
-------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia
approved, on an interim basis, Allied Holdings, Inc., and its
debtor-affiliates' request to employ Troutman Sanders LLP as their
bankruptcy counsel.

Troutman Sanders LLP has been the Debtors' principal outside
counsel for more than seven years and has been providing
restructuring advice to the Debtors at various times in recent
years.

The Debtors need Troutman Sanders to provide bankruptcy services
and legal services during their Chapter 11 proceedings.

The Debtors selected Troutman Sanders as their attorneys because
of the firm's extensive knowledge of their businesses and
financial affairs, its general experience and knowledge, and its
expertise in the field of debtors' protections, creditors' rights
and business reorganizations.

Specifically, Troutman Sanders will:

    (a) advise the Debtors with respect to their powers and duties
        as debtors in possession in the continued management and
        operation of their businesses;

    (b) take all necessary action to protect and preserve the
        Debtors' estates, including the prosecution of actions on
        the Debtors' behalf, the defense of any actions commenced
        against the Debtors, the negotiation of disputes in which
        the Debtors are involved, and the preparation of
        objections to claims filed against the Debtors' estates;

    (c) prepare on the Debtors' behalf all necessary motions,
        applications, answers, orders, reports, and other papers
        in connection with the administration of the Debtors'
        estates;

    (d) negotiate and prepare on the Debtors' behalf a plan of
        reorganization, a disclosure statement, and all related
        documents;

    (e) negotiate and prepare documents relating to the
        disposition of assets, as requested by the Debtors;

    (f) advise the Debtors, where appropriate, with respect to
        federal, state, and foreign regulatory matters;

    (g) advise and represent the Debtors on litigation matters;

    (h) advise and represent the Debtors in connection with
        corporate, lending, intellectual property, commercial,
        securities, litigation, real estate, environmental and
        real estate matters and transactions; and

    (i) perform other legal services for the Debtors as may be
        necessary and appropriate.

Troutman Sanders will be paid at its standard hourly rates and
reimbursed for reasonable and necessary expenses it incurs.  The
firm's professionals charge:

              Professional            Hourly Rate
              ------------            -----------
              Attorneys               $165 - $815
              Paralegals              $110 - $195

Ezra H. Cohen, Esq., a partner at Troutman Sanders, assures the
Court that the firm represents no entity other than the Debtors
in connection with their Chapter 11 cases.

Troutman Sanders is a "disinterested person" as defined in
Section 101(14) of the Bankruptcy Code, Mr. Cohen contends.

The firm informed the Debtors that the Georgia Rules of
Professional Conduct or its relationship with certain clients may
preclude it from advising or acting on behalf of the Debtors in
the event litigation arises directly between the Debtors and
certain clients or their affiliates.

Mr. Cohen discloses that the Debtors paid Troutman Sanders
$1,035,509 for services rendered and expenses advanced in the
preparation for their Chapter 11 cases.

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. 2;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ALLIED HOLDINGS: Union Fights To Protect Jobs Following Bankruptcy
------------------------------------------------------------------
The Teamsters Union has taken immediate steps to protect the jobs,
wages and benefits of Teamster carhaul members following Sunday's
Chapter 11 federal bankruptcy filing of Allied Holdings, Inc. and
its subsidiaries, the largest Teamster carhaul employer with more
than 5,000 employees in the United States and Canada.

"We have known for some time that Allied has faced severe
financial problems, so this action was not unexpected," said Jim
Hoffa, Teamsters General President. "While Allied says it will
continue operating normally during the bankruptcy reorganization,
the Teamsters have assembled a top team of legal and financial
experts to participate in all court proceedings to ensure that
our members' jobs, wages and benefits are protected."

"Teamster members had approved a two-year wage freeze from 2003 to
2005 and had taken other steps to help the company succeed, but
apparently the Allied management was unable to take advantage of
our members' sacrifices to make their business plan work," said
Fred Zuckerman, Director of the Teamsters' Carhaul Division.  "We
have worked closer with this company than any other company in
recent years to make them successful. However, we have made it
clear that their financial problems will not be solved on the
backs of our hardworking Teamster members."

The Teamsters Union continues to have an open dialogue with the
company on its financial condition, and the union has assembled a
team of legal and financial experts to closely monitor the
situation and to assess any reorganization of the company.

Local unions with carhaul members will participate in a special
conference call on Tuesday, August 2 to get updated on the
bankruptcy filing.

Founded in 1903, the International Brotherhood of Teamsters
represents more than 1.4 million hardworking men and women
throughout the United States and Canada.

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. 2;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ALTERRA HEALTHCARE: Seeks 2nd Extension to File Notices of Removal
------------------------------------------------------------------
Alterra Healthcare Corporation asks the U.S. Bankruptcy Court for
the District of Delaware to further extend, through August 9,
2005, the time within which it can file notices of removal with
respect to Pre-Petition Civil Actions pursuant to 28 U.S.C.
Section 1452 and Rules 9006 and 9007 of the Federal Rules of
Bankruptcy Procedure.  

On November 26, 2003, the Court entered an order confirming the
Debtor's Second Amended Plan of Reorganization.  The plan took
effect on December 4, 2003.

Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP,
explains that the Reorganized Debtor believes that it may be party
to Pre-Petition Actions currently pending in the courts of various
states and federal districts.  However, due to the size and
complexity of this case, the Reorganized Debtor has not had a full
opportunity to investigate its involvement in the Pre-Petition
Actions.  

The attention of the Reorganized Debtor's personnel, management
and professionals have been focused primarily on settling issues
relating to a potential distribution under the Plan and continuing
the claims reconciliation process.  Thus, the Reorganized Debtor
and its professional have not had sufficient time to fully review
all of the Pre-Petition Actions to determine if any should be
removed pursuant to Bankruptcy Rule 9027(a).

Mr. Brady submits that the extension will afford the Reorganized
Debtor an opportunity to make more fully informed decisions
concerning the removal of each Pre-Petition Action and will assure
the Reorganized Debtor does not forfeit the valuable rights
afforded under 28 U.S.C. Section 1452.  Further, the rights of the
Reorganized Debtor's adversaries will not be prejudiced by such an
extension, as any party to a Pre-Petition Action that is removed
may seek to have it remanded to the state court pursuant to 28
U.S.C. Section 1452(b).

Headquartered in Milwaukee, Wisconsin, Alterra Healthcare
Corporation offers supportive and selected healthcare services to
the elderly and is one of the largest operator of freestanding
Alzheimer's and memory care residences in the U.S.  The Company
filed for chapter 11 protection on January 22, 2003 (Bankr. D.
Del. Case No. 03-10254).  James L. Patton, Esq., Edmon L. Morton,
Esq., Joseph A. Malfitano, Esq., and Robert S. Brady, Esq., at
Young, Conaway, Stargatt & Taylor, LLP, represent the Debtor in
its restructuring.  When the Debtor filed for protection from its
creditors, it listed $735,788,000 in total assets and
$1,173,346,000 in total debts.  On Nov. 26, 2003, the Honorable
Judge Mary F. Walrath confirmed the Second Amended Plan of
Reorganization of Alterra.  The Plan took effect on Dec. 4, 2003.


ANC RENTAL: Trust Wants Until Dec. 15 to Object to Proofs of Claim
------------------------------------------------------------------
The ANC Liquidating Trust, as successor to ANC Rental Corporation
and its debtor-affiliates, asks the U.S. Bankruptcy Court for the
District of Delaware to extend the deadline for the Debtors to
file objections to proofs of claims to December 15, 2005.

The Debtors have filed 14 omnibus objections to claims, Joseph
Grey, Esq., at Stevens & Lee, P.C., in Wilmington, Delaware,
relates.  The Debtors have asked the Court to expunge, reduce,
reclassify or settle over 6,700 claims.  About 4,800 claims are
still subject to resettlement process.

Mr. Grey states that 2,000 of the remaining claims may be
characterized as personal injury or wrongful death claims.  The
Trust intends to seek leave to file an omnibus objection with
respect to the Personal Injury or Wrongful Death Claims and
compel the claimants to participate in mediation or voluntary
arbitration programs.

The Trust asserts that the requested extension will enable them
to conclude the claims reconciliation process in a timely, cost-
efficient and complete manner.

Headquartered in Fort Lauderdale, Florida, ANC Rental Corporation,
is the world's third-largest publicly traded car rental company.
The Company filed for chapter 11 protection on November 13, 2001
(Bankr. Del. Case No. 01-11200).  On April 15, 2004, Judge Walrath
confirmed the Debtors' 3rd Amended Chapter 11 Liquidation Plan, in
accordance with Section 1129(a) and (b) of the Bankruptcy Code.
Upon confirmation, Blank Rome LLP and Fried, Frank, Harris,
Shriver & Jacobson LLP withdrew as the Debtors' counsel.  Gazes
& Associates LLP and Stevens & Lee PC serve as substitute
counsel to represent the Debtors' post-confirmation interests.
When the Company filed for protection from their creditors, they
listed $6,497,541,000 in assets and $5,953,612,000 in liabilities.
(ANC Rental Bankruptcy News, Issue No. 72; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


ANY MOUNTAIN: Committee Objects to 3rd Amended Chapter 11 Plan
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of Any Mountain,
Ltd., objects to confirmation of the Debtor's Third Amended
Chapter 11 Plan filed with the U.S. Bankruptcy Court for the
Northern District of California on June 10, 2005.

Robert L. Eisenbach III, Esq., at Cooley Godward LLP, the
Committee's counsel, notes that on July 6, 2005, the Debtor filed
its Notice of Withdrawal of Hearing on Confirmation of Debtor's
Plan, stating that the confirmation hearing was cancelled.  The
Debtor didn't state that the Plan itself was withdrawn.  The
Withdrawal Notice also made no mention of when confirmation
objections were due.  

On July 6, 2005, the Debtor also filed its Motion for Order
Authorizing Sale of Business and Business Assets and Declaration
of David N. Chandler seeking authority to sell the Debtor's
business and non-cash assets to SSI Venture LLC.

Mr. Eisenbach explains that the Plan has not relationship to
reality in light of the Sale Motion.  The Committee believes the
Debtor intends permanently to withdraw its Plan and to pursue the
sale contemplated in the Sale Motion.  

Headquartered in Corte Madera, California, Any Mountain Ltd,
operates ten specialty outdoor stores throughout the San Francisco
Bay Area.  The Company filed for chapter 11 protection on Dec. 23,
2004 (Bankr. N.D. Calif. Case No. 04-12989).  David N. Chandler,
Esq., of Santa Rosa, California represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed below $50,000 in assets and more than $10
million in debts.


AOL LATIN: Wants to Hire Cicerone Capital as Financial Advisors
---------------------------------------------------------------          
America Online Latin America, Inc., and its debtor-affiliates ask
the U.S. Bankruptcy Court for the District of Delaware for
permission to retain and employ Cicerone Capital LLC as their
financial advisors.

The Debtors have employed Cicerone Capital since May 31, 2004, as
their financial advisors and is therefore familiar with their
businesses and financial affairs.

Cicerone Capital will:

   a) assist the Debtors in identifying the target, sectors,
      region and quantity of business entities and assets in Latin
      America with respect to a potential sale of the Debtors, the
      Non-Debtor Foreign Subsidiaries or their respective assets;

   b) advise and assist the Debtors in analyzing and evaluating
      the business, operations, properties, financial condition,
      major liabilities, prospects and potential synergies of the
      Debtors and any potential purchaser;

   c) participate in discussions with the Company's directors,
      shareholders, suppliers and investment bankers and conduct
      management interviews, site visits, data analysis and due
      diligence of the Company and any potential purchaser;

   d) review the documents related to any potential sale of the
      Debtors, the Non-Debtor Foreign Subsidiaries or their
      respective assets, and prepare a valuation analysis of the
      Debtors and any potential purchaser in connection with that
      potential asset sale; and

   e) provide all other financial advisory services to the Debtors
      in connection with their chapter 11 cases.

Zain A. Manekia, a Managing Principal of Cicerone Capital, reports
that the Firm will be paid with:

   1) a monthly Advisory Fee of $50,000;

   2) in connection with a sale of American Online Latin America
      Inc., during the term of Cicerone's engagement or in a
      period of six months after the termination of the Engagement
      Letter:  

      a) a Success Fee of not more than $1.2 million equal to
         the sum of 2% of the first $30 million of the Aggregate
         Transaction Value, plus 1.5% of the second $30 million of
         the Aggregate Transaction Value, plus 1% of the Aggregate
         Transaction Value of more than $60 million, and

      b) provided, however, that if a sale transaction for the
         sale of American Online Latin America is not consummated
         after the Company enters into a definitive agreement and
         it receives a Break-Up Fee as a result of the failure of
         that transaction, a fee equal to 10% of that Break-Up
         Fee;

   3) in connection with a sale of the Non-Debtor Foreign
      Subsidiaries, during the term of Cicerone's engagement or in
      a period of six months after the termination of the
      Engagement Letter:  

      a) a Success Fee of not more than $1 million per transaction
         or a series of related transactions with one or more
         related acquirers, equal to the sum of 2% of the first
         $30 million of the Aggregate Transaction Value, plus 1.5%
         of the second $30 million of the Aggregate Transaction
         Value, plus 1% of the Aggregate Transaction Value of more
         than $60 million, and

      b) provided, however, that if a sale transaction for the
         sale of American Online Latin America is not consummated
         after the Company enters into a definitive agreement and
         it receives a Break-Up Fee as a result of the failure of
         that transaction, a fee equal to 10% of that Break-Up
         Fee; and

   4) in connection with a sale of AOL Brazil during the term of
      the engagement of Cicerone or in a period of six months
      after the termination of the Engagement Letter, a Success
      Fee of $100,000 if AOL Brazil is sold for $33 million, and
      additional compensation if AOL Brazil is sold for more than
      $33 million.

Cicerone Capital assures the Court that it does not represent any
interest materially adverse to the Committee, the Debtors or their
estates.

Headquartered in Fort Lauderdale, Florida, America Online Latin
America offers AOL-branded Internet service in Argentina, Brazil,
Mexico, and Puerto Rico, as well as localized content and online
shopping over its proprietary network.  The Company and three of
its affiliates filed for chapter 11 protection on June 24, 2005
(Bankr. D. Del. Case No. 05-11778 through 05-11781). Douglas P.
Bartner, Esq., at Shearman & Sterling LLP and Edmon L. Morton,
Esq., Margaret B. Whiteman, Esq., and Pauline K. Morgan, 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 $28,500,000 in
total assets and $181,774,000 in total debts.  The Debtors
delivered their Schedules of Assets and Liabilities and Statements
of Financial Affairs to the Bankruptcy Court on July 29, 2005.  


ARMSTRONG WORLD: DIP Facility Backs $43.5M in Outstanding L/C's
---------------------------------------------------------------
Armstrong World Industries, Inc., has a $75,000,000 DIP credit
facility that is currently limited to issuances of letters of
credit.  The facility is scheduled to mature on December 8, 2005.  
Obligations to reimburse drawings under the letters of credit
constitute a superpriority administrative expense claim in AWI's
Chapter 11 Case.

As of June 30, 2005, there were no outstanding borrowings under
the DIP Facility.  However, AWI had $43.5 million in letters of
credit outstanding.

The DIP Facility also contains several covenants including, among
other things, limits on asset sales and capital expenditures and a
required ratio of debt to cash flow.

In a regulatory filing with the Securities and Exchange
Commission, AWI says it has remained in compliance with all of the
DIP Facility covenants.  The covenants have not impaired our
operating ability.

Upon its emergence from Chapter 11, AWI expects to replace the DIP
facility with a new facility that would provide reorganized
Armstrong with greater borrowing capacity and which will have debt
covenants yet to be negotiated.

In the event AWI has not emerged from Chapter 11 by December 8,
2005, the company intends to pursue another extension of the DIP
Facility.

Headquartered in Lancaster, Pennsylvania, Armstrong World
Industries, Inc. -- http://www.armstrong.com/-- the major
operating subsidiary of Armstrong Holdings, Inc., designs,
manufactures and sells interior finishings, most notably floor
coverings and ceiling systems, around the world.  The Company and
its debtor-affiliates filed for chapter 11 protection on
December 6, 2000 (Bankr. Del. Case No. 00-04469).  Stephen
Karotkin, Esq., at Weil, Gotshal & Manges LLP, and Russell C.
Silberglied, Esq., at Richards, Layton & Finger, P.A., represent
the Debtors in their restructuring efforts.  When the Debtors
filed for protection from their creditors, they listed
$4,032,200,000 in total assets and $3,296,900,000 in liabilities.
As of March 31, 2005, the Debtors' balance sheet reflected a
$1.42 billion stockholders' deficit. (Armstrong Bankruptcy
News, Issue No. 80; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


ATA AIRLINES: Wants Lease Decision Period Stretched to Dec. 27  
--------------------------------------------------------------
Jeffrey C. Nelson, Esq., at Baker & Daniels, in Indianapolis,  
Indiana, reminds the Court that ATA Airlines, Inc. and its debtor-
affiliates' decisions with respect to each of their nonresidential
real property leases depend in large part on whether the location
will play a future role under their plan of reorganization.  Those
decisions will depend most significantly on whether the Debtors
will continue operations at each leased facility once a Plan is
implemented.  

Mr. Nelson points out that at this early stage in the Chapter 11
cases, the Debtors do not know the exact contours of their Plan
and which of the Leases the Plan will necessitate the Debtors to
assume, assume and assign, or reject.

Without an extension of time to assume, assume and assign, or
reject the Leases, the Debtors may be forced to assume liabilities
under the Leases or forego benefits under the Leases without
sufficient information.

Pursuant to Section 365(d)(4) of the Bankruptcy Code, the Debtors
ask the U.S. Bankruptcy Court for the Southern District of Indiana
to extend the deadline for them to assume, assume and assign or
reject Leases to December 27, 2005.

Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA
Holdings Corp. -- http://www.ata.com/-- is the nation's 10th  
largest passenger carrier (based on revenue passenger miles) and
one of the nation's largest low-fare carriers.  ATA has one of the
youngest, most fuel-efficient fleets among the major carriers,
featuring the new Boeing 737-800 and 757-300 aircraft.  The
airline operates significant scheduled service from Chicago-
Midway, Hawaii, Indianapolis, New York and San Francisco to over
40 business and vacation destinations.  Stock of parent company,
ATA Holdings Corp., is traded on the Nasdaq Stock Exchange.  The
Company and its debtor-affiliates filed for chapter 11 protection
on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868
through 04-19874).  Terry E. Hall, Esq., at Baker & Daniels,
represents the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
$745,159,000 in total assets and $940,521,000 in total debts.  
(ATA Airlines Bankruptcy News, Issue No. 30; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


BONUS STORES: Settles Texas Taxing Authorities' Claims
------------------------------------------------------
William Kaye, the Liquidating Agent appointed to administer the
confirmed chapter 11 Plan of Bonus Stores, Inc., asks the U.S.
Bankruptcy Court for the District of Delaware to approve a
stipulation resolving claims filed by various Texas taxing
authorities against the Debtor's estate.

Linebarger Googan Blair $ Sampson, LLP, representing the Texas
taxing authorities, negotiated with the liquidating agent to
resolve the claims and avoid further cost or litigation.  

The Stipulation's salient provisions include:

    a) recognition of the claims filed by the Texas taxing
       authorities as a priority unsecured claim in the collective
       amount of $120,984, including accrued interest up to the
       date of payment.

    b) recognition of the Texas taxing authorities' receipt of
       $107,925 as partial payment of the their claims.  

    c) payment of the remaining $25,156 balance, in full and final
       satisfaction of the claims , within 30 day after the
       Court's approval of the stipulation.

A copy of the stipulation is available for a fee at:

  http://www.researcharchives.com/bin/download?id=050805041730

Headquartered in Columbia, Mississippi, Bonus Stores, Inc.,
operated a chain of over 360 stores in 13 Southeastern states
offering everyday deep discount prices on basic everyday items.
The Company filed for chapter 11 protection on July 25, 2003
(Bankr. Del. Case No. 03-12284).  Joel A. Waite, Esq., at Young
Conaway Stargatt & Taylor, LLP represents the Debtor.  When the
Company filed for protection from its creditors, it estimated
assets and debts of more than $100 million.  Bonus Stores, Inc.
(fka Bill's Dollar Stores) declared its First Amended Liquidating
Chapter 11 Plan effective on September 20, 2004.  William Kaye is
the Liquidating Agent under the Debtors' confirmed Plan.  Edward
J. Kosmowski, Esq., at Young Conaway Stargatt & Taylor, LLP
represents the Liquidating Agent.


BRANTLEY CAPITAL: Nasdaq Halts Common Stock Trading
---------------------------------------------------
Brantley Capital Corporation (Nasdaq: BBDCE) received notice from
The Nasdaq Stock Market's Listing Qualifications Department that
the Company's securities have been delisted from The Nasdaq
National Market at the opening of business on Aug. 3, 2005.  The
Company currently does not intend to appeal this determination.

The Listing Qualifications Department's determination, dated
Aug. 1, 2005, was based on the Company's continuing delinquency in
filing its Form 10-K for the year ended Dec. 31, 2004, and its
Form 10-Q for the quarter ended March 31, 2005, as required by
Nasdaq Marketplace Rule 4310.

Brantley Capital Corporation -- http://www.BrantleyCapital.com/--
is a publicly traded business development company primarily
providing equity and long-term debt financing to small and medium-
sized private companies throughout the United States.  The
Company's investment objective is to achieve long-term capital
appreciation in the value of its investments and to provide
current income primarily from interest, dividends and fees paid by
its portfolio companies.

                       *      *     *

                    Possible Restatements

As a result of the uncertainty caused by the filing delay, and the
potential balance sheet effects of the related party compliance
issues, unaudited financial statements for the year ended  
Dec. 31, 2004, filed under Form 8-K dated June 27, 2005, may be
amended or restated, depending on the outcome of the valuation
analyses and the resolution of related party issues.


CALPINE CORP: Subsidiary Terminates Senior Secured Debt Offering
----------------------------------------------------------------
Calpine Corporation's (NYSE: CPN) wholly owned subsidiary, Calpine
Construction Finance Company, L.P., has terminated its previously
announced offer to purchase for cash a portion of its 9-3/4%
Second Priority Senior Secured Floating Rate Notes Due 2011.  

CCFC terminated its offer for the Notes pursuant to the conditions
of the offer.  The conditions of the offer, among other things,
provided that CCFC shall not be required to accept for payment,
purchase or pay for any Notes tendered and may terminate the offer
if CCFC does not expect to receive the net proceeds from the
proposed sale of the Ontelanuee Energy Center on or prior to the
purchase date, which is no later than the third business day
following the expiration date (Aug. 3, 2005).  Any Notes that have
been tendered will be redelivered to the tendering party.

Calpine Corporation -- http://www.calpine.com/-- supplies          
customers and communities with electricity from clean, efficient,   
natural gas-fired and geothermal power plants.  Calpine owns,   
leases and operates integrated systems of plants in 21 U.S.   
states, three Canadian provinces and the United Kingdom.  Its   
customized products and services include wholesale and retail   
electricity, natural gas, gas turbine components and services,   
energy management, and a wide range of power plant engineering,   
construction and operations services.  Calpine was founded in   
1984.  It is included in the S&P 500 Index and is publicly traded   
on the New York Stock Exchange under the symbol CPN.  

                         *     *     *

As reported in the Troubled Company Reporter on June 23, 2005,     
Standard & Poor's Ratings Services assigned its 'CCC' rating to   
Calpine Corp.'s (B-/Negative/--) planned $650 million contingent   
convertible notes due 2015.  The proceeds from that convertible     
debt issue will be used to redeem in full its High Tides III     
preferred securities.  The company will use the remaining net     
proceeds to repurchase a portion of the outstanding principal     
amount of its 8.5% senior unsecured notes due 2011.  S&P said its     
rating outlook is negative on Calpine's $18 billion of total debt     
outstanding.   

As reported in the Troubled Company Reporter on May 16, 2005,   
Moody's Investors Service downgraded the debt ratings of Calpine   
Corporation (Calpine: Senior Implied to B3 from B2) and its   
subsidiaries, including Calpine Generating Company (CalGen: first   
priority credit facilities to B2 from B1).


CATHOLIC CHURCH: Spokane Claims Rep. Wants to Limit Testimony
-------------------------------------------------------------
Gayle E. Bush, the Future Claims Representative in the Diocese of
Spokane's Chapter 11 case, asks the U.S. Bankruptcy Court for the
Eastern District of Washington to limit any testimony at the
August 18, 2005 hearing regarding the claims bar date proposed by
the Diocese of Spokane, to those submitted by declarations.

In the alternative, if the Court determines that live testimony is
appropriate, Mr. Bush asks that the Diocese be required to
immediately provide detailed information on all of the expert
witnesses it intends to call at the hearing.

Mr. Bush notes that the Diocese has had more than two months to
file responsive declarations in support of its request for a
claims bar date.  However, it has failed to do so and has failed
to even reply to Mr. Bush's objection or to the other objections.  
Now, upon very short notice, the Diocese seeks an evidentiary
hearing, without providing Mr. Bush and other parties with any
meaningful information about the witnesses it would call at the
hearing.

According to Mr. Bush, he found out about Spokane's intent to hold
an evidentiary hearing when he called and requested a
clarification of the "in court hearing" stated by the Diocese.  
Spokane's counsel informed Mr. Bush that the Diocese intended to
call live witnesses, and invited Mr. Bush to do the same.

It is approximately three weeks before the hearing, and all the
Diocese has told Mr. Bush is that it intends to call a witness
named Youngren.  This Youngren disagrees in some unspecified
manner with the conclusions of Jon Robert Conte, Ph.D., who signed
a declaration in the Archdiocese of Portland's Chapter 11 case
pending before the U.S. Bankruptcy Court for the District of
Oregon.

Mr. Bush points out that in the Portland case, Judge Elizabeth
Perris found no need for live testimony regarding the claims bar
date under similar circumstances.  Mr. Bush also notes that the
Diocese's invitation for him to provide his own witnesses is not
helpful because he has not retained any expert.  With respect to
Dr. Conte, Mr. Bush has not spoken to him, much less retained him.

"The problem is compounded by the fact that the Diocese has not
made clear which portions of the Conte Declaration it intends to
dispute," Mr. Bush says.

At the very least, Mr. Bush asserts that the Diocese should be
required to provide information on:

   (a) All issues that the Diocese intends to raise through
       expert testimony;

   (b) Any disagreements that the Diocese has with Mr. Bush's
       objection, or the Conte Declaration;

   (c) The identity of any expert witnesses the Diocese intends
       to call.  It so far has provided nothing other than a
       name; no contact information, no credentials, no summary
       of testimony, no expected opinions;

   (d) The nature and scope of the testimony the Diocese expects
       from the expert witnesses and their expected opinions; and

   (e) Any materials or documents the expert witnesses rely on
       as the basis for their testimony.

Without these information, it will be difficult for Mr. Bush to
prepare for a hearing.  Furthermore, as the Diocese surely knows,
it is virtually impossible for Mr. Bush to retain an expert, and
prepare one for testimony in time for the August 18 hearing.

             Tort Committee Supports FCR's Request

The Tort Claimants Committee asserts that the primary reason the
Diocese of Spokane and its insurers seek an evidentiary hearing is
to promote their argument that Causal Link Claimants "know" they
were abused.  Accordingly, since the Claimants "know" they were
abused, the Diocese would then argue that:

   (a) each Causal Link Claimant should file an individual proof
       of claim even if they have not yet suffered recognizable
       injuries or made the connection between the abuse and
       injuries;

   (b) the Future Claims Representative should not be permitted
       to file claims for Causal Link Claimants; and

   (c) the claims of all Causal Link Claimants who do not file
       individual proofs of claim should be barred.

Joseph E. Shickich, Jr., Esq., at Riddell Williams P.S., in
Seattle, Washington, contends that an evidentiary hearing would be
very expensive, would delay setting a bar date, and could not and
would not bind any Causal Link Claimant who does not file an
individual proof of claim.

"The Court does not need to hear live testimony to address this
issue," Mr. Shickich asserts.

As in the Portland Archdiocese case, the Tort Committee believes
that declarations are sufficient and the Future Claims
Representative must be the one to file claims for Causal Link
Claimants.

The Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004.  Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed $11,162,938 in total assets and
$81,364,055 in total debts. (Catholic Church Bankruptcy News,
Issue No. 36; Bankruptcy Creditors' Service, Inc., 215/945-7000)


CATHOLIC CHURCH: Tucson Files Technical Amendments to Plan
----------------------------------------------------------
The Diocese of Tucson filed with the U.S. Bankruptcy Court for the
District of Arizona certain technical non-adverse and non-material
amendments to its confirmed Third Amended and Restated Plan of
Reorganization.

                      The Sharing Agreement

The Amended Plan provides that there will be a sharing arrangement
between the Reorganized Debtor and the Settlement Trust after
funding of the Initial Contribution.  If the amounts paid into the
Fund equal or exceed $21,000,000, then the Fund in excess of
$21,000,000 will be shared as:

   (a) $21,000,000 to $22,000,000 -- 10% to the Diocese to
       be used for Special Projects and 90% to the Trustee of the
       Settlement Trust;

   (b) $22,000,000 to $23,000,000 -- 20% to the Diocese to be
       used for Special Projects and 80% to the Trustee of the
       Settlement Trust;

   (c) $23,000,000 to $24,000,000 -- 30% to the Diocese to be
       used for Special Projects and 70% to the Trustee of the
       Settlement Trust; and

   (d) Any amount over $24,000,000 -- 40% to the Diocese to be
       used for Special Projects and 60% to the Trustee of the
       Settlement Trust.

                        Avoidance Actions

Within 30 days of the Plan Effective Date, the Trustee will fund
$100,000 to the Avoidance Actions Fund from the $15,700,000
Initial Contribution, and the Debtor or Reorganized Debtor will
assign to the Unknown Claims Representative and the Guardian ad
Litem certain Avoidance Actions.  

Kasey C. Nye, Esq., at Quarles & Brady Streich Lang LLP, in
Tucson, Arizona, says the Claims Representatives will have the
right, after the Effective Date, without the necessity of seeking
Court approval, to hire professionals as the Representatives deem
necessary to assist them in investigating and, if necessary,
prosecuting the assigned Avoidance Actions.  Under no
circumstances will the Debtor be obligated to fund more than the
Avoidance Action Fund to assist the Representatives nor will the
Estate, the Reorganized Debtor, the Litigation Trust, or the
Settlement Trust, be liable for any costs, expenses or actions of
the Representatives or any professional they retained.

However, the Representatives may, if they exhaust the Avoidance
Actions Fund, seek approval from the Court to use up to $100,000
of the Trust Administrative Expense Reserve to replenish the
Avoidance Actions Fund.  After that, the Representatives may, upon
exhaustion of the $100,000 from the Trust Administrative Expense
Reserve, request Court approval for payment of the fees, costs
expenses or actions of the Representatives or any professional
retained by them from the Unknown Claims Reserve.

Neither the Representatives nor any of the professionals they
hired to investigate or prosecute the assigned Avoidance Actions
will have to seek Court approval for payment of any fees and costs
incurred.

Notwithstanding any provision in the Plan for the payment of any
fees or costs of the Representatives after the Effective Date with
respect to matters involving the Unknown Claims Reserve or the
Tort Claims of Unknown Tort Claimants, any of the Representatives'
fees or costs of related to investigation or prosecution of the
assigned Avoidance Actions will be paid from the Avoidance Actions
Fund and not from any other source.

Except as otherwise ordered by the Court, any recoveries from the
Assigned Avoidance Actions will be subject to the Sharing
Arrangement and will be distributed pro rata between the
Settlement Trust and the Unknown Claims Reserve in the proportion
that the distributions to each under the Plan bear to the sum of
the distributions to both.

                        Other Provisions

The Diocese will not defend any Tort Claim on the basis that a
parish or parish affiliate, and not the Diocese, is liable for the
claim.

Each holder of an Allowed General Unsecured Claim will be paid the
Allowed amount of the General Unsecured Claim in monthly
installments, including interest, based on a 15-year amortization.  
The first installment will be paid 30 days after the Effective
Date.  Succeeding installments will be paid each month thereafter
until the 7th anniversary of the Effective Date, whereupon any and
all remaining amounts due including interest on each Allowed
General Unsecured Claim will be paid in full.

The Fund established by the Diocese will be transferred to the
Settlement Trust and allocated pursuant to the Plan among the
Settlement Trust, the Unknown Claims Reserve and, if necessary,
the Litigation Trust.  The Fund will be funded over time and will
consist of:

   (a) On the Effective Date, the net proceeds from the sale of
       the Diocese Real Property for not less than $3,200,000 or,
       if all of the Diocese Real Property has not been sold or
       proceeds received by the Effective Date, then the net
       proceeds that have been received by the Diocese on the
       Effective Date;

   (b) After the Effective Date, the proceeds from the sale of
       the Diocese Real Property if all parcels of Diocese Real
       Property have not been sold or proceeds received on or
       before the Effective Date;

   (c) Additional funding from the Diocese totaling $300,000 to
       be paid on this schedule:

       -- $100,000 on the Effective Date;

       -- $100,000 on the first anniversary of the Effective
          Date; and

       -- $100,000 on the second anniversary of the Effective
          Date;

   (d) Payments from the Participating Third Parties;

   (e) The Hartford Settlement Proceeds;

   (f) Payments from the Settling Insurers; and

   (g) Net proceeds from Insurance Action Recoveries.

Mr. Nye clarifies that the payments to the Fund will be subject to
the Sharing Arrangement pursuant to the terms of the Plan.

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. 37;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


CELESTICA INC: Acquires Ontario-Based CoreSim
---------------------------------------------
Celestica Inc. (NYSE: CLS, TSX: CLS/SV) acquired CoreSim, a leader
in advanced design analysis and redesign services.  CoreSim will
strengthen Celestica's design services offering by adding
intellectual property, including its unique engineering tools and
processes that enable electronic design projects to be delivered
on-time and at a reduced cost. Based in Ottawa, Ontario, Canada,
CoreSim currently provides services to some of the world's leading
OEMs.

CoreSim will enhance Celestica's design offering through its
proprietary tool, Schematic Modeling, a model-based tool that
identifies wiring and technology issues in schematics.  Through
this tool, CoreSim provides design analysis which independently
verifies and validates pre-layout customer designs to assist in
keeping engineering projects on-time and within budget.  This
approach also offers customers rapid design verification which
reduces costly design respins; produces well-margined designs that
are 'right the first time'; reduces errors in schematic capture;
facilitates custom verification; and, significantly shortens the
overall development process.

"CoreSim's proven track record of delivering innovative design
processes and tools to the telecommunications, aerospace and
defense, and enterprise markets will complement our current design
services offering," said Dave Tiley, senior vice president, Global
Services, Celestica.  "This acquisition will enable us to offer
our customers reduced cost on redesigns, faster time-to-market on
new products and assist with product design innovations."

For existing products, CoreSim's design services include complex
hardware cost reduction, or component obsolescence retargeting,
without software changes.  CoreSim will deliver further strength
to Celestica's design offering through its System Integrity
Analysis, Board Static Timing Analysis, Real Time System Vector
Capture and Hardware Modeling, which create accurate models of
hardware/software functionality and parametric operating margins,
resulting in reduced design costs for customers.  CoreSim's unique
services also enable redesign of products whereby critical
information is not available and redesign for RoHS compliance.

"Our unique design tools and processes, combined with Celestica's
existing design capabilities, expertise in supply chain management
and end-to-end manufacturing services, will provide OEM customers
with a truly differentiated and competitive offering," said Jim
Whiteside, chief technology officer, CoreSim.  "We are happy to
join Celestica and look forward to being part of the company's
expanding design business."

Celestica's global design services offering leverages the
company's depth of experience in supply chain management, leading
IT solutions and electronics manufacturing services to provide
customers with seamless product lifecycle design solutions on a
global basis.  Celestica boasts strong design capabilities based
on its engineering heritage, including design collaboration,
design-for-test and design-for-manufacture.  The result is a
competitive advantage for OEM customers through faster time-to-
market, lower product life cycle costs and innovative solutions
for a wide range of product designs.

CoreSim is a private company with 30+ employees based in Ottawa,
Canada.  The company provides design analysis services to internal
design teams within Original Equipment Manufacturers, Engineering
Manufacturing Suppliers and Silicon Vendors.  These services draw
on unique model based tools such as Schematic Modeling and Board
Static Timing analysis, combined seamlessly with commercial
analysis tools for services such as Signal Integrity analysis.

Celestica, Inc. -- http://www.celestica.com/-- is a world leader  
in the delivery of innovative electronics manufacturing services.  
Celestica operates a highly sophisticated global manufacturing
network with operations in Asia, Europe and the Americas,
providing a broad range of integrated services and solutions to
leading OEMs (original equipment manufacturers).  Celestica's
expertise in quality, technology and supply chain management,
enables the company to provide competitive advantage to its
customers by improving time-to-market, scalability and
manufacturing efficiency.   

                         *     *     *   

Celestica's 7-5/8% senior subordinated notes due 2013 and 7-7/8%
senior subordinated notes due 2011 carry Moody's Investors
Service's and Standard & Poor's single-B ratings.


CHI-CHI'S: Fulminant Hepatitis Victim Gets $6,250,000 Settlement
----------------------------------------------------------------
The Hepatitis A outbreak at the Beaver Valley location of Chi-
Chi's arose from exposure to contaminated green onions.  
Approximately 600 customers and 13 employees contracted the
disease.  To date Chi-Chi's settled 547 Hepatitis-related claims.  
Only 84 cases were paid more than the $35,000 cap.

The latest victim that Chi-Chi's wants to pay developed fulminant
hepatitis, resulting in liver rapid failure and necessitating a
liver transplant.  Other complications included paralysis of the
victim's left vocal chord and other vital organs.  The victim's
wife contracted the virus from him as well.  The victim now faces
a lifetime of treatment without the ability to work.

Because of the extent of the damage to the victim's life, Chi-
Chi's asks the U.S. Bankruptcy Court for the District of Delaware
to approve a $6,250,000 cash settlement.

Headquartered in Irvine California, Chi-Chi's, Inc., is a direct
or indirect operating subsidiary of Prandium and FRI-MRD
Corporation and each engages in the restaurant business.  The
Debtors filed for chapter 11 protection on October 8, 2003 (Bankr.
Del. Case No. 03-13063-CGC).  Bruce Grohsgal, Esq., Laura Davis
Jones, Esq., Rachel Lowy Werkheiser, Esq., and Sandra Gail McLamb,
Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C.,
represent the Debtors in their restructuring efforts.  When the
Debtor filed for bankruptcy, it estimated $50 to $100 million in
assets and more than $100 million in liabilities.


COMDIAL CORP: Panel Taps Weiser LLP as Financial Advisors
---------------------------------------------------------          
The Official Committee of Unsecured Creditors of Comdial
Corporation and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware for permission to employ Weiser
LLP as its financial advisors.

Weiser LLP will:

   a) review all financial information prepared by the Debtors or
      their consultants as requested by the Committee including,
      a review of the Debtors' financial statements as of the
      Petition Date, showing in detail all assets and liabilities
      and priority and secured creditors;

   b) monitor the Debtors' activities regarding cash
      expenditures, receivable collections, asset sales and
      projected cash requirements, and review the Debtors'
      periodic operating and cash flow statements;

   c) review the Debtors' books and records for related party
      transactions, potential preferences, fraudulent conveyances
      and other potential pre-petition investigations;

   d) assist the Committee in any investigation with respect to
      the Debtors' pre-petition acts, conduct, property,
      liabilities and financial condition of the Debtors, its
      management and creditors, including the operation of their
      businesses, and as appropriate, avoidance actions;

   e) assist the Committee in a sale process of the Debtors
      collectively or in segments, parts or delineations;

   f) assist the Committee in developing, evaluating, structuring
      and negotiating the terms and conditions of any potential
      plan or plans of reorganization, including preparation
      of a liquidation analysis;

   g) estimate the value of the securities that may be issued to
      unsecured creditors under any proposed chapter 11 plan;

   h) analyze the claims filed against the Debtors' estates and
      provide expert testimony on behalf of the Committee;

   i) provide all other financial advisory services to the
      Committee in connection with the Debtors' chapter 11 cases.

James Horgan, C.P.A., a Partner of Weiser LLP, reports that his
Firm's professionals bill:

      Designation          Hourly Rate
      -----------          -----------
      Partners             $312 - $400
      Senior Managers      $264 - $312
      Managers             $204 - $264
      Seniors              $168 - $204
      Assistants           $108 - $132
      Paraprofessionals     $72 - $132

Weiser LLP assures the Court that it does not represent any
interest materially adverse to the Committee, the Debtors or their
estates.

Headquartered in Sarasota, Florida, Comdial Corporation --
http://www.comdial.com/-- and its affiliates develop and market   
sophisticated communications products and advanced phone systems
for small and medium-sized enterprises.  The Company and its
debtor-affiliates filed for chapter 11 protection on May 26, 2005
(Bankr. D. Del. Case No. 05-11492).  Jason M. Madron, Esq., and
John Henry Knight, Esq., at Richards, Layton & Finger, P.A.,
represent the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
total assets of $30,379,000 and total debts of $35,420,000.


COMDIAL CORP: Wants Until Sept. 26 to Make Lease-Related Decisions
------------------------------------------------------------------          
Comdial Corporation and its debtor-affiliates ask the U.S.
Bankruptcy for the District of Delaware for an extension, until
Sept. 26, 2005, the period within which they can elect to assume,
assume and assign, or reject their unexpired nonresidential real
property leases.

The Debtors remind the Court that they filed a request to sell
substantially all of their assets pursuant to Section 363 of the
Bankruptcy Code on May 31, 2005.  The sale hearing for that
request is currently scheduled on Aug. 29, 2005.

The Debtors give the Court five reasons that warrant in favor of
the extension:

   1) the complexity of their chapter 11 cases and the progress
      that have made in administering their cases;

   2) the need to maximize the value of their estates by providing
      a purchaser of their asset sale with the opportunity to
      request that the Debtors assume and assign certain of their
      unexpired leases under the asset sale;

   3) the number of issues that a potential purchaser and the
      Debtors must consider and resolve with regards to the
      unexpired leases under the asset sale;

   4) they do not want to forfeit any lease that a purchaser might
      desire as a result of the deemed rejected provision of
      Section 365(d)(4) of the Bankruptcy Code; and

   5) they assure the Court that the requested extension will not
      prejudice the landlords of the unexpired leases because the
      Debtors are current on all post-petition obligations under
      the leases.

The Court will convene a hearing at 10:30 a.m., on Aug. 29, 2005,
to consider the Debtors' request.

Headquartered in Sarasota, Florida, Comdial Corporation --
http://www.comdial.com/-- and its affiliates develop and market  
sophisticated communications products and advanced phone systems
for small and medium-sized enterprises.  The Company and its
debtor-affiliates filed for chapter 11 protection on May 26, 2005
(Bankr. D. Del. Case No. 05-11492).  Jason M. Madron, Esq., and
John Henry Knight, Esq., at Richards, Layton & Finger, P.A.,
represents the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
total assets of $30,379,000 and total debts of $35,420,000.


COMPLETE PRODUCTION: S&P Rates $530 Million Bank Loans at B
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Complete Production Services.

Standard & Poor's also assigned its 'B' rating and '4' recovery
rating to the company's $400 million term loan B due 2012 and $130
million revolving credit facility due 2010, indicating the
expectation of marginal (25%-50%) recovery of principal in the
event of a payment default following an extended cyclical
downturn.

The outlook is stable.  As of June 30, 2005, Houston, Texas-based
Complete had total debt of about $426 million, pro forma for the
proposed term loan B and revolving credit facility.

The ratings on Complete reflect the company's weak business
position as a small niche oilfield services provider in a
cyclical, capital intensive, and highly competitive industry,
combined with an aggressive growth strategy and substantial debt
burden.

These weaknesses are slightly mitigated by the company's adequate
near-term liquidity to meet capital spending and debt service in
the currently favorable well servicing environment.

"The stable outlook on Complete reflects the expectation that the
company will continue to benefit from near-term market conditions
strengthening through 2005 and will maintain its relatively
adequate liquidity," said Standard & Poor's credit analyst Brian
Janiak.

Proceeds from the combined offering will primarily be used to
repay $274 million of existing bank debt, and a sizable one-time
dividend of $150 million will be paid out to existing
shareholders.


CONSECO INC: Earns $88.1 Million of Net Income in Second Quarter
----------------------------------------------------------------
Conseco, Inc. (NYSE: CNO) reported results for the second quarter
of 2005 -- the company's seventh consecutive quarter of strong
earnings.  Net income applicable to common stock was a record
$78.6 million, a 76% increase versus $44.6 million in the second
quarter of 2004.  

The Company reported net income of $88.1 million for the three
months ended June 30, 2005, compared to a $68.3 million net income
for the same period in 2004.

"During the past 12 months, Conseco has achieved steady and
consistent progress on each of our key initiatives," President and
CEO William Kirsch said.  "We have fundamentally strengthened our
balance sheet, expense management, operations, product offerings,
distribution systems, internal controls and, most importantly, our
management team.  Building on these accomplishments, we have now
posted a record quarter and our seventh consecutive quarter of
strong earnings.  We continue to build our financial strength with
a debt-to-total capital ratio, excluding accumulated other
comprehensive income, of 17% (3) and a book value per share,
excluding accumulated other comprehensive income, of $20.21.

"We will continue to deliver on our key initiatives, and will
invest in building a strong platform as we reduce costs, grow
sales and provide excellent customer service," Mr. Kirsch said.

Conseco, Inc.'s insurance companies help protect working American
families and seniors from financial adversity: Medicare
supplement, long-term care, cancer, heart/stroke and accident
policies protect people against major unplanned expenses;
annuities and life insurance products help people plan for their
financial futures.  The Company can be accessed on the World Wide
Web at http://www.conseco.com/

                        *     *     *

As reported in the Troubled Company Reporter on Aug. 4, 2005,
Standard & Poor's Ratings Services revised its outlook on Conseco  
Inc.'s 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.

As reported in the Troubled Company Reporter on Aug. 2, 2005,
Moody's Investors Service placed the ratings on the bank debt and
mandatory convertible preferred securities of Conseco, Inc.
(Conseco, B2 bank debt rating) as well as the Ba1 insurance
financial strength ratings of Conseco, Inc.'s insurance
subsidiaries on review for possible upgrade.  Conseco Senior
Health Insurance Company was affirmed at Caa1 with a developing
outlook.


CT CDO: Fitch Assigns Low-B Ratings to Six Certificate Classes
--------------------------------------------------------------
CT CDO III Ltd., collateralized debt obligations are rated by
Fitch Ratings:

     -- $61,000,000 class A-1 'AAA';
     
     -- $147,169,000 class A-2 'AAA';
     
     -- $29,007,000 class B 'AA';
     
     -- $13,650,000 class C 'A';
     
     -- $5,118,000 class D 'A-';
     
     -- $6,825,000 class E 'BBB+';
     
     -- $6,825,000 class F 'BBB';
     
     -- $9,811,000 class G 'BBB-';
     
     -- $11,517,000 class H 'BB+';
     
     -- $6,825,000 class J 'BB';
     
     -- $3,839,000 class K 'BB-';
     
     -- $5,118,000 class L 'B+';
     
     -- $5,545,000 class M 'B';
     
     -- $4,265,000 class N 'B-';
     
     -- $21,334,229 class O (not rated;
     
     -- $21,334,229 class X (notional amount and interest only)
        (not rated);
     
     -- $3,412,608 class Preferred Shares (not rated).

All classes are privately placed pursuant to rule 144A of the
Securities Act of 1933.  The certificates represent beneficial
ownership interest in the trust, primary assets of which are all
or a portion of 23 classes of fixed-rate commercial mortgage-
backed securities having an aggregate principal balance of
approximately $341,260,837, as of the closing date.

For a detailed description of Fitch's rating analysis, please see
the presale report titled 'CT CDO III Ltd.,' dated July 12, 2005,
available on the Fitch Ratings web site at
http://www.fitchratings.com/


DELPHI CORP: Draws $1.5 Billion Under $1.8 Billion Revolver
-----------------------------------------------------------
Delphi Corp. (NYSE: DPH) confirmed Friday that on August 3, 2005,
it initiated a draw down of $1.5 billion under its $1.8 billion
revolving credit facility.  "The draw down was in connection with
financing operations in the context of Delphi's discussions with
its principal unions and General Motors regarding a consensual
restructuring of the Company's operations in the United States,"
the autoparts maker said.  

Delphi will be filing its Form 10-Q today, August 8, 2005, and
that regulatory filing will contain additional information.  
Delphi will also host its scheduled briefing concerning second
quarter results for institutional investors and security analysts
at 11:00 a.m., Eastern time, this morning, August 8, 2005.

                  Delphi's Credit Agreements

Delphi Corporation signed a five-year THIRD AMENDED AND RESTATED
CREDIT AGREEMENT, dated as of June 14, 2005, with HSBC Bank USA,
National Association, CREDIT SUISSE, Cayman Islands Branch,
DEUTSCHE BANK AG NEW YORK BRANCH, CITICORP USA, INC., and JPMORGAN
CHASE BANK, N.A., as Lenders.  JPMorgan serves as the
Administrative Agent.

The June 2005 amendments give Delphi access to a $1.8 billion
Revolving Credit Facility and a $1.0 billion six-year term loan.  
Delphi promises to comply with a Senior Secured Leverage Ratio
covenant.  Specifically, Delphi promises that the ratio of (a)
Senior Secured Debt (all debt on account of borrowings from the
lenders, non-trade payables, tooling and equipment in the ordinary
course of business, services in respect of information technology
provided in the ordinary course of business, all notes, bonds,
debentures or other similar instruments, any conditional sale or
other title retention agreement, and all Capital Lease
Obligations) to (b) Consolidated EBITDA will not exceed:

                                             Maximum
      For the Fiscal                      Senior Secured
      Quarter Ending                      Leverage Ratio
      ---------------                     --------------
      June 30, 2005                        2.75 to 1.00
      September 30, 2005                   2.75 to 1.00
      December 31, 2005                    2.75 to 1.00
      March 31, 2006                       2.75 to 1.00
      June 30, 2006                        2.75 to 1.00
      September 30, 2006                   2.50 to 1.00
      December 31, 2006                    2.50 to 1.00
      March 31, 2007                       2.50 to 1.00
      June 30, 2007                        2.50 to 1.00
      September 30, 2007                   2.50 to 1.00
      December 31, 2007 and thereafter     2.25 to 1.00

A full-text copy of the Five-Year Credit Agreement is available at
no charge at http://researcharchives.com/t/s?27  

                         Credit Ratings

Standard & Poor's Ratings Services, Fitch Ratings and Moody's
Investors Service lowered Delphi's credit ratings Friday in
response to the draw on the revolver.  Standard & Poor's cut
Delphi's senior unsecured credit rating three notches to CCC-, or
nine levels below investment grade.  Fitch Ratings lowered the
ratings to CCC from B and Moody's Investors Service cut four
levels to Ca from B3.  Each one-notch downgrade in the company's
credit ratings from Moody's Ba1 rating, Standard & Poor's BB+
rating or Fitch's BB+ rating increases the interest rate payable
to the lenders by 50 basis points.  If Delphi's credit ratings
fall below Moody's Ba1 rating, Standard & Poor's BB+ rating or
Fitch's BB+ rating, the Commitment Fee payable to the Lenders
increases from 0.375% to 0.50%.

                        Market Reactions

Jim Gillette, a supplier analyst with the automotive forecasting
firm CSM Worldwide, told the Associated Press that warnings of
bankruptcy are premature. "They've got that line of credit to help
them through the rough bumps this year," Mr. Gillette told the AP.  
"Delphi, from a product standpoint, is very strong, and they've
been doing a good job diversifying their customer base."

"Bankruptcy is clearly on the table.  It is an option of last
resort, but we are seeing more talk about it than a month ago,"
Morningstar analyst John Novak told Reuters.

Chief Executive Officer and turnaround pro Steve Miller "will
likely play bankruptcy brinkmanship," Sanford C. Bernstein analyst
Brian Johnson in New York, told Jeff Green and John Lippert at
Bloomberg News.  "I think he's very serious about it if he can't
get what he wants."  

                          About Delphi

Delphi Corp. -- http://www.delphi.com/-- is the world's largest      
automotive component supplier with annual revenues topping $25  
billion.  Delphi is a world leader in mobile electronics and
transportation components and systems technology.  Multi-national  
Delphi conducts its business operations through various
subsidiaries and has headquarters in Troy, Michigan, USA, Paris,  
Tokyo and Sao Paulo, Brazil.  Delphi's two business sectors --   
Dynamics, Propulsion, Thermal & Interior Sector and Electrical,  
Electronics & Safety Sector -- provide comprehensive product  
solutions to complex customer needs.  Delphi has approximately  
186,500 employees and operates 171 wholly owned manufacturing  
sites, 42 joint ventures, 53 customer centers and sales offices  
and 34 technical centers in 41 countries.  

At March 31, 2005, Delphi Corporation's balance sheet showed a  
$4.09 billion stockholders' deficit, compared to a $3.54 billion  
deficit at Dec. 31, 2004.


DELPHI CORP: Negotiating with GM & UAW on Restructuring Operations
------------------------------------------------------------------
Delphi Corp. is negotiating with General Motors Corp., its major
client, and the United Auto Workers, its workers' union, on
restructuring the Company's unprofitable U.S. operations to avoid
bankruptcy reorganization, the Wall Street Journal reports.

General Motors is the Company's former parent before being spun
off in 1999.  General Motors is not currently related to Delphi
aside from the supplier-customer relationship, yet, it could be
liable for a portion of pension and retiree health benefits for
Delphi's UAW employees, should Delphi file for bankruptcy and
terminate its pension plans.  

The Company's Chairman and Chief Executive Officer Robert S.
"Steve" Miller said that if talks fail and agreements are not
reached to its labor costs, the company can't continue on its
current course until September 2007, when its current UAW contract
expires.

                         Financial Woes

The Company disclosed to the Securities and Exchange Commission in
its latest quarterly report on June 30, 2005, that first quarter
2005 net sales were $6.9 billion, down from $7.4 billion in the
first quarter of 2004.  Non-GM revenues were $3.5 billion, or 50%
of sales, up 7.7% from the first quarter of 2004.  The Company's
first quarter 2005 GM sales were $3.4 billion, down 18.9% from the
first quarter of 2004.

The net loss for the first quarter 2005 was $403 million.  In the
first quarter of 2005, the Company experienced a more challenging
U.S. vehicle manufacturer production environment combined with
slowing attrition of our U.S. hourly workforce, increased
commodity price pressures as well as program launch and volume
related cost issues.

For 2005, the Company expects to incur $0.4 billion of higher
commodity cost than 2004.  This amount includes $0.1 billion for
costs associated with troubled suppliers. To date, due to
previously established contractual terms, the Company's success in
passing commodity cost increases on to our customers has been
limited.  

As reported in the Troubled Company Reporter on July 4, 2005, the
Company completed its financial restatement for 2001 to 2003.  In
conjunction with the restatement, the audit committee of the
company's Board of Directors has concluded its internal
investigation of certain accounting transactions over the past
five years.  SEC is investigating the matter.

                     Refinancing Not Enough

As reported in the Troubled Company Reporter on June 17, 2005, the
Company completed its $2.8 billion refinancing plan, comprised of
a $1.8 billion secured revolving credit facility and a $1.0
billion secured term loan.  Delphi believes the completion of this
refinancing plan provides the company with access to sufficient
liquidity to continue to address its U.S. legacy cost issues
during the current low GM North American production environment.

Apparently, cost reduction and profitability, not just liquidity
is still necessary to turn the company around.  As reported in the
Troubled Company Reporter on July 1, 2005, Fitch said the
Company's balance sheet is expected to continue to deteriorate
through this period, with significant new debt incurred.  A
reversal of negative cash flows will require stabilization of GM
volumes, significant reductions in Delphi's fixed cost structure,
and continued healthy growth in the company's non-GM business.   

Delphi Corp. -- http://www.delphi.com/-- is the world's largest       
automotive component supplier with annual revenues topping $25  
billion.  Delphi is a world leader in mobile electronics and  
transportation components and systems technology.   Multi-national  
Delphi conducts its business operations through various  
subsidiaries and has headquarters in Troy, Michigan, USA, Paris,  
Tokyo and Sao Paulo, Brazil. Delphi's two business sectors --   
Dynamics, Propulsion, Thermal & Interior Sector and Electrical,  
Electronics & Safety Sector -- provide comprehensive product  
solutions to complex customer needs.  Delphi has approximately  
186,500 employees and operates 171 wholly owned manufacturing  
sites, 42 joint ventures, 53 customer centers and sales offices  
and 34 technical centers in 41 countries.  

At March 31, 2005, Delphi Corporation's balance sheet showed a  
$4.09 billion stockholders' deficit, compared to a $3.54 billion  
deficit at Dec. 31, 2004.  

                        *     *     *

As reported in the Troubled Company Reporter on July 1, 2005,
Fitch has assigned a rating of 'BB-' to Delphi Corporation's
$2.825 billion revolving credit and term loan agreement.  The
assignment follows the indicative rating issued on May 20, 2005.  

As reported in the Troubled Company Reporter on June 15, 2005,
Moody's Investors Service has affirmed the ratings of Delphi
Corporation, Senior Implied at B2 and Senior Secured Bank
Facilities at B1.  The rating outlook is Negative.


DELPHI CORP: Heightened Bankruptcy Risk Cues Fitch to Junk Ratings
------------------------------------------------------------------
Fitch has downgraded the senior unsecured debt rating of Delphi
Corp. to 'CCC' from 'B' and the rating on the trust preferred
Securities to 'CCC-' from 'CCC+'.

The downgrade reflects the drawdown of Delphi's revolving credit
facility and the implied heightened bankruptcy risk as the company
enters a critical stage in its discussions with the UAW.  The bank
facility is downgraded to 'B' from 'BB-'.  The company remains on
Rating Watch Negative.

The drawdown of the bank facility provides Delphi with short-term
operating liquidity as it seeks to restructure its operations
through concessions from the UAW.  The drawdown also provides
assurances to critical trade creditors during this process.
(Accounts payable totaled $3.7 billion at March 31, 2005 versus
cash holdings of $1.2 billion.)  Further access to additional
external capital over the near term is viewed by Fitch to be
negligible.  Although the risk of a bankruptcy remains high, Fitch
believes that it is not a certainty due to the significant
incentive that the UAW has to pursue a cooperative restructuring.  
An out-of-court restructuring would provide the UAW with the
flexibility and access to influence the course of the
restructuring, an impact that would be less in the event of a
filing.  A filing would also put the current level of health care
and pensions at greater risk and would likely involve a greater
depth of restructuring.

Inside or outside of bankruptcy, significant headcount reductions
and facility closures are likely to occur.  Currently,
approximately 9% of Delphi's work force is idle, the cost of which
Delphi estimates at $300 million-$400 million per year.  The
restructuring is expected to address the remaining operations
under Delphi's Automotive Holdings Group but would also involve
Delphi's other operations.

A major concern remains the extension of trade credit.  As with a
number of automotive suppliers, Delphi relies on trade payables as
a critical component of its financing.  The curtailment of trade
credit from already-stressed second and third-tier suppliers could
hasten liquidity concerns.

If a bankruptcy filing were to occur prior to the 2007 UAW
contract reopening, a substantial portion (in Fitch's view) of
Delphi's pension and health care obligations could revert to GM.  
Neither Delphi nor GM has disclosed the extent of these
liabilities.  Fitch is not assuming a material amount of financial
support to Delphi from GM in its ratings.

Delphi's underfunded pension plans represent a major claim on cash
flows, including $1.1 billion in 2006.  Delphi is not currently
positioned to meet these obligations (given pricing pressures,
commodity costs, and cash outflows related to restructuring costs)
without a significant restructuring of its operations over the
near term or some form of legislative relief.  Benefit payments
out of Delphi's pension plans have ratcheted up significantly from
$375 million in 2003 to a projection of approximately $556 million
in 2005 and $900 million in 2009.  Despite heavy contributions,
the rapid escalation in benefits paid will make it more difficult
to close this gap in the absence of high asset returns or
increases in the discount rate.

One form of pension legislation currently being proposed would
meaningfully ratchet up Delphi's liabilities and required
contributions.  Fitch notes that in a similar position, the
airline industry has received a form of legislative relief.  
Similarly, projected OPEB benefit payments continue to ratchet up
significantly over the next several years.  Both of these items
will be further affected by accelerated headcount reductions
associated with restructuring actions.

Delphi does possess key technological strengths and has shown
solid growth in its non-GM business but remains highly exposed to
GM volumes.  Recent incentive programs and the introduction of new  
GM products for 2006 could support volumes over the short term.
Any potential relief from high commodity prices would also assist
in stabilizing cash flows.  Nevertheless, the industry is
currently experiencing a healthy economic environment and very
high industry sales volumes.  Delphi and the industry are
increasingly vulnerable to volume declines that could result from
a decline in economic conditions or a falloff from recent
incentive-driven sales peaks.

Fitch's recovery analysis suggests that in the event of a
bankruptcy, bank creditors may not receive full recovery due
primarily to the questionable viability of a large portion of
Delphi's asset base.  The new bankruptcy law also could provide
greater recovery values to trade creditors depending on the timing
of the filing. Fitch also assumes that PBGC claims would affect
the recovery of other creditors.

The company also remains under investigation by the SEC and other
federal authorities regarding accounting and disclosure issues.


DEPARTMENT 56: Moody's Assigns B1 Corporate Family Rating
---------------------------------------------------------
Moody's Investors Service assigned first time ratings to
Department 56, Inc., a leading designer, wholesaler and retailer
of fine quality collectibles and other giftware products.  The
ratings are in response to the company's announcement that it will
purchase Lenox, Inc. the leading designer, marketer and
manufacturer of fine china dinnerware and silver flatware in the
United States, from Brown-Foreman Corp.  (A2 senior unsecured
rating; P-1; stable outlook) for approximately $190 million in
cash.  Concurrently, Moody's assigned a Speculative Grade
Liquidity Rating of SGL-3, reflecting the expectation of adequate
near-term liquidity for the combined company.

The ratings actions were:

   -- Assigned a B1 Corporate Family Rating to Department 56, Inc.

   -- Assigned a Ba3 rating on the up to $175 million revolving
      credit facility of D56, Inc., a wholly-owned subsidiary of
      Department 56.

   -- Assigned a B1 rating to the $100 million term loan of
      D56, Inc.

   -- Assigned a Speculative Grade Liquidity Rating SGL-3 to
      Department 56, Inc.

The rating outlook is stable

The ratings are subject to the final execution and review of
documentation.

The ratings are constrained by the fundamental weaknesses of both
Department 56 and Lenox on a standalone basis, as Department 56
has been suffering from revenue declines due to customer attrition
in the Gift and Specialty business and Lenox is in the early
stages of a significant restructuring designed to lower its cost
structure by shifting production from the US to low cost
countries.  

The ratings also reflect the significant amount of adjusted
financial leverage when taking into account Lenox's leases and
underfunded pension position, which increase the proforma LTM
debt-to-EBITDA from approximately 3.7 times to over 5.5 times.  In
addition, Moody's is concerned that although the Lenox acquisition
is transforming for Department 56, the combined company remains
limited in terms of size, with proforma LTM June 30, 2005 revenue
of about $595 million - mostly in the US.  

The Lenox acquisition is the company's largest to date, and will
result in significant integration risks, especially because
management intends to execute the announced Lenox restructuring
while concurrently focusing on the development of new products and
channels for both Lenox and Department 56 brands to combat the
ongoing fall-off in revenue.

The ratings acknowledge the strength of Lenox's branded portfolio,
which is supported by strong EBIT return on assets of mid-teens
historically and anticipated for the pro-forma company.  The
ratings favorably reflect the benefits of the combined company's
leading market positions in the tabletop, collectibles and
giftware product segments, and the potential synergies that stem
from cross-selling opportunities and expansion into new channels.

In addition, the rating reflects Department 56's fully-outsourced
manufacturing model, that when coupled with Lenox's low cost
manufacturing and outsourcing initiatives, should allow the
combined company to continue to enhance efficiencies.  

Furthermore, the ratings are based upon the expectation of rapid
debt reduction through expected improvements in profitability and
cash flow.  This would be consistent with Department 56's
historical pattern.

The SGL-3 rating reflects the highly seasonal nature of Department
56's cash flows, which typically are negative in the first three
quarters of the year due to working capital build.  However, the
company is expected to produce positive cash flows over the next
twelve month period even under highly-sensitized scenarios which
should be sufficient to comfortably satisfy the proposed annual
term loan amortization.  While Moody's expects adequate liquidity
to be maintained throughout the next twelve months after the
closing, heavy usage under the proposed borrowing base governed
revolver is anticipated (commitment is $175 million, however
effective availability under the advance formulae is likely capped
at under $120 million on average throughout the near term).
Satisfactory headroom under the three proposed financial covenants
is anticipated.  The full encumbrance of assets and stock
constrain the liquidity rating.

The stable ratings outlook reflects some tolerance for modest
fluctuations in credit statistics.  However, the stability of the
outlook is highly sensitive to the execution risks of the
integration and restructuring efforts.  Should these deviate
negatively from Moody's expectations or if planned new growth
strategies do not appear to be gaining traction, the ratings
outlook could change to negative.  

Additionally, any creep in financial leverage or reduction in free
cash flow generation throughout the near term could also trigger a
negative change in the outlook.  The stable ratings outlook also
assumes that the company will continue to maintain its stated core
business strategy, manage liquidity effectively, and improve debt
protection measures through debt reduction to levels more
commensurate with the B1 rating category.

It will likely take some time before the ratings outlook could
change to positive given the absence of a proven record as a
combined, highly leveraged entity with publicly rated debt.  A
change to a positive ratings outlook could result from sustained
profitability improvements such that operating margins
significantly exceed 10% or if retained cash flow (excluding
working capital changes)-to-debt exceeds 22%.

The Ba3 rating assigned to the proposed $175 million revolver is
one notch higher than the B1 Corporate Family Rating reflecting:

   * the priority position in the capital structure;

   * the benefits afforded by monthly borrowing base governance;
     and

   * the expected full collateral coverage in a distressed
     scenario with some excess.

The rating reflects the benefits the collateral package, which
includes a perfected first priority security interests in all
tangible and intangible personal property and assets of D56 and
the guarantors, but not including any of the term loan collateral
described below.  The revolver will also have a second priority
lien on and security interest in the term loan collateral.  The
facility also benefits from a full and unconditional guaranty by
Department 56 as well as all D56 current and future subsidiaries
(including Lenox and its subsidiaries).

The B1 rating on the $100 million term loan reflects the benefits
and limitation of the collateral package, which include perfected
first priority pledges of all of the equity interests of D56 and
each of its direct and indirect domestic subsidiaries, and a first
priority security interest in and mortgages on all real property,
fixtures and equipment of D56 and the guarantors.  The term loan
also has a second priority lien on and security interest in the
revolving credit facility collateral.  The term loan was rated at
the B1 Corporate Family Rating because it is expected to have
collateral coverage in distress, but with much less cushion than
the revolving credit facility.

At the time of this review, financial covenants for the secured
credit facility were not finalized, however are expected to
address:

   * maximum leverage;
   * minimum coverage of interest expense; and
   * maximum capital expenditures.

Based in Eden Prarie, Minnesota, Department 56 is a leading
designer, wholesaler and retailer of collectibles and giftware
products with 2004 revenue of $165 million.  

Lenox, Inc. is a leading designer, manufacturer and marketer of:

   * fine china,
   * dinnerware,
   * silverware,
   * crystal, and
   * giftware products.

Lenox, Inc.'s estimated FY April 2005 revenue exceeds $500
million.


DIRECT MERCHANTS: Moody's Reviews Ba2 Long-Term Deposit Rating
--------------------------------------------------------------
Moody's Investors Service put on review for possible upgrade the
ratings of Metris Companies, Inc. (senior unsecured at B3) and its
bank subsidiary Direct Merchants Credit Card Bank NA (issuer at
Ba3).  The rating action was in response to the announcement that
Metris has agreed to be acquired by HSBC Finance Corporation
(senior unsecured at A1) in an all-cash transaction valued at $1.6
billion.  The ratings of HSBC Finance Corporation were affirmed;
the outlook remains positive.

Moody's said the review of Metris' ratings reflects the potential
benefits the acquisition would provide to Metris' creditors from
HSBC Finance's substantially larger and more diversified earnings
base as well as its stronger funding profile.  The review will
focus on the structure of the transaction and the extent to which
Metris' liabilities will be assumed by, and its operations will be
integrated with, HSBC Finance.

The affirmation of the ratings of HSBC Finance reflects the small
scale of the Metris acquisition relative to HSBC Finance's $147
billion of managed assets and the company's long-standing
expertise within credit cards and the sub- and near-prime consumer
finance customer segments.  Moody's noted that it expects that
HSBC Finance will continue to allocate appropriate levels of
capital to its businesses as its balance sheet composition
continues to evolve.

These ratings were placed on review for possible upgrade:

Metris Companies Inc.:

   * senior unsecured debt rating of B3;
   * senior unsecured shelf rating of P(B3);
   * subordinated shelf rating of P(Caa1); and
   * preferred stock shelf rating of P(Caa2).

Direct Merchants Credit Card Bank, N.A.:

   * the rating of the bank for long-term deposits of Ba2;
   
   * the issuer rating and rating for other senior long-term
     obligations of Ba3; and
   
   * the bank financial strength rating of D.

Metris Companies Inc., headquartered in Minnetonka, Minnesota, is
the thirteenth largest general purpose credit card issuer in U.S.
and had total managed receivables of $5.9 billion as of June 30,
2005.

HSBC Finance Corporation is a consumer finance company that offers
a range of retail financial products, including:

   * real-estate secured loans,
   * credit cards,
   * auto loans,
   * unsecured personal loans, and
   * credit-related insurance products.

As of June 30, 2005, the company had managed assets of almost $147
billion and common equity of $16.8 billion.  HSBC Finance is an
indirect subsidiary of UK-based HSBC Holdings PLC, a global
financial services firm with global assets of almost $1.5
trillion.


DVI INC: Trust Can't Access Merrill Lynch's Privilege Log
---------------------------------------------------------
As reported on Friday, August 5, 2005, Dennis J. Buckley, the
Liquidating Trustee of the DVI Liquidating Trust, asked the
Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware Court for authority to examine Merrill Lynch
Mortgage Capital Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated's Privilege Log and to depose 23 witnesses before
August 22, 2005.

Judge Walrath denied the Trustee's request to access the
privileged documents Merrill Lynch withheld.  Judge Walrath also
said no to 21 of the 23 depositions requested.  

Judge Walrath orders the lenders to present two witnesses, Greg
Petrie and Joseph Magnus, for deposition before August 22.

As previously reported, Merrill Lynch was ordered by the Court to
submit to a formal examination under Rule 2004 of the Bankruptcy
Rules.  The probe was the result of the report filed by R. Todd
Neilson, the appointed examiner in DVI Inc. and its debtor-
affiliates' chapter 11 cases.  Among the issues flagged by the
examiner for further review and investigation in connection with
the Debtors' improper accounting practices was whether any of the
Debtors' lenders were parties to DVI's improper practices.

Merrill Lynch, a multi-national financial management and advisory
company, played various roles in the Debtors' finances and
operations.  Among other things, Merrill Lynch:

   * provided a $150 million warehouse credit facility to DVI,
     portions of which were secured by collateral that had
     previously been pledged to other lenders;

   * provided $500 million annually to DVI in off-balance sheet
     loans;

   * benefited from the DVI's success in inducing Fleet Bank to
     release a collateral with a face value of $315 million;

   * financed senior secured notes which are secured by equipment
     leases that DVI had transferred to one or more entities
     including DVI Receivables Corp. XIV and DVI Receivables
     Corp. XV;

   * underwrote a series of securitization based on repackaged
     loans owned by the Debtors;

   * as the underwriters of the securities to be sold as part of
     DVI's quarterly securitization, the lenders selected the
     financed contracts to be pooled (transferred to a non-debtor
     entity) for contribution to a securitization; and

   * owned or held interests in one or more securitizations
     sponsored by the Debtors.

Merrill Lynch withheld some documents on the basis of privilege.  

The Liquidating Trustee argued that most of the documents
identified on the Privilege Log were not protected by any
privilege.  In response, Merrill Lynch produced fifteen of the
withheld documents to prove that they were indeed privileged.  
Among those presented were documents exchanged between:

     * Merrill Lynch and the firm of Thacher Proffitt & Wood,
       LLP, which represented the lenders in the DVI
       securitizations;

     * Merrill Lynch and the accounting firm of Plant & Moran;
       and

     * employees reflecting counsel's advice.

DVI, Inc., the parent company of DVI Financial Services, Inc., and
DVI Business Credit Corporation, provide lease or loan financing
to healthcare providers for the acquisition or lease of
sophisticated medical equipment.  The Company, along with its
affiliates, filed for chapter 11 protection (Bankr. Del. Case
No. 03-12656) on Aug. 25, 2003.  Bradford J. Sandler, Esq., at
Adelman Lavine Gold and Levin PC, represents the Debtors in their
restructuring efforts.  When the Company filed for protection from
its creditors, it listed $1,866,116,300 in total assets and
$1,618,751,400 in total debts.  On Nov. 24, 2004, Judge Walrath
confirmed the Amended Joint Plan of Liquidation filed by DVI,
Inc., and its debtor-affiliates.


EAST 44TH REALTY: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: East 44th Realty, LLC
        12 East 37th Street
        New York, New York 10016

Bankruptcy Case No.: 05-16167

Type of Business: Real Estate

Chapter 11 Petition Date: August 5, 2005

Court: Southern District of New York (Manhattan)

Judge: Stuart M. Bernstein

Debtor's Counsel: Warren R. Graham, Esq.
                  Davidoff & Malito
                  305 Third Avenue, 34th Floor
                  New York, New York 10158
                  Tel: (212) -557-7200
                  Fax: (212) 286-1884

Total Assets: $25,737,873

Total Debts:  $13,128,560

Debtor's 20 Largest Unsecured Creditors:

   Entity                              Claim Amount
   ------                              ------------
   East Forty Fourth Street                $159,777
   Tofel & Karen
   800 Third Avenue
   New York, NY 10022

   B&F Imports Inc.                         $30,754
   12 East 37th Street
   New York, NY 10016

   Borah, Goldstein, Altschuler,            $16,517
   Schwartz & Nahins, P.C.
   377 Broadway
   New York, NY 10013

   Davidoff Malito & Hutcher, LLP           $12,649
   605 Third Avenue, 34th Floor
   New York, NY 10158

   New York City Water Board                $10,936
   P.O. Box 410
   Church Street Station
   New York, NY 10018

   Con Edison                                $3,449

   Con Edison - Steam                        $3,421

   H. Gottlieb & Amy Miller                  $2,550

   Jhansi Raju                               $2,200

   Nathaniel Whitten                         $1,700

   Father & Son Appliances                   $1,649

   Every Supply Co.                          $1,612

   State Insurance Fund                      $1,326

   Ikuyo Yoneyama                            $1,625

   Dmitry Kroshka                            $1,289

   Merit Kaplan Hardware                       $730

   Ghada M. Elmahdy                            $500

   The Bag Lady                                $315

   Big Apple Refinishing                       $271

   Leonard Power Steam Specialist              $244


ENRON: Judge Harmon Reinstates UC's Claims Against Deutsche Bank
----------------------------------------------------------------
The University of California, as lead plaintiff, asserted claims
against Deutsche Bank AG, Deutsche Bank Securities, Inc., and
Deutsche Bank Trust Company Americas in the consolidated case --
Mark Newby, et al., v. Enron Corporation, et al., and The Regents
of the University of California, et al., v. Kenneth L. Lay, et
al. -- pending before the United States District Court for the
Southern District of Texas.

UC alleged that Deutsche Bank entered into structured tax deals,
which were intended to falsify Enron Corporation's reported
financial results and designed to mislead investors.  Those tax
deals violated Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, UC asserted.

However, on March 29, 2004, the District Court dismissed the
claims against the Deutsche Bank Entities as time-barred by the
three-year statue of repose.  The Court determined that Deutsche
Bank's structured tax deals closed more than three years before
UC filed its First Consolidated Complaint on April 8, 2002.

UC asked the District Court for reconsideration.

UC argues that in addition to their involvement with the STDs,
the Deutsche Bank Entities knowingly made numerous false and
misleading statements in analyst reports and offering documents
for Enron securities during the Class Period.

UC contends that the Deutsche Bank Entities' scienter for the
Section 10(b) claims can be shown by the Deutsche Bank Entities'
ongoing conduct in connection with the fraudulent STDs, which
were intended to falsify Enron's financial result for years into
the future.

UC also points out that the District Court previously ruled that
even where a claim is time-barred, conduct prior to the Class
Period giving rise to it may still be asserted to establish
scienter or a pattern and practice amounting to a scheme for
purposes of Section 10(b).

In response to the Motion for Reconsideration, the Deutsche Bank
Entities asserted that the District Court lacks subject matter
jurisdiction over any sales of Enron securities made by any
Deutsche Bank Entity under Regulation S.7.

They argue that the 1933 Act is silent about its territorial
reach and that the Supreme Court has noted that absent contrary
intent in a statute, there is a presumption against
extraterritorial jurisdiction for that statute.

UC, however, asserts that the District Court has jurisdiction
over its claims.

                      District Court's Opinion

District Court Judge Melinda Harmon notes that, in their request
for dismissal of the remaining claims against them, the Deutsche
Bank Entities address the fact that the March 29 Order left
standing claims against them under Section 12 of the Securities
Act of 1933 based on four Foreign Debt Securities.  "The Deutsche
Bank Entities now assert that the Court lacks subject matter
jurisdiction over any sales of these securities made by any
Deutsche Bank Entity under Regulation S."

Judge Harmon concludes that the domestic conduct of the alleged
"Ponzi" scheme participants inside the United States as well as
outside was of material importance to and directly caused the
fraud and the purported injury to the Plaintiffs, including at
least one large United States investor.

Accordingly, the District Court approves the Lead Plaintiff's
Motion for Reconsideration and reinstates its Section 10(b) and
Rule 10b-5 claims against the Deutsche Bank Entities.  In
addition, Judge Harmon denies the Deutsche Bank Entities' request
to dismiss the remaining claims against them.

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

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


ENRON CORP: Inks Pact Resolving Jedi II & CalPERS Claim Disputes
----------------------------------------------------------------
Pursuant to a partnership agreement dated as of Dec. 30,
1997, Enron Capital Management II Limited Partnership, Enron
Capital Management III Limited Partnership, and California Public
Employees' Retirement System formed the Joint Energy Development
Investments II Limited Partnership.  JEDI II's general partner is
ECM II, and its two limited partners are ECM III and CalPERS.

Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, in New
York, relates that, in return for its $10 million capital
commitment to JEDI II, ECM II was granted a 1% interest in the
Partnership.  In return for its $490 million capital commitment
to JEDI II, ECM III was granted a 49% interest in the
Partnership.  In return for its $500 million capital commitment
to JEDI II, CalPERS was granted a 50% interest in the
Partnership.

At its inception, JEDI II's primary purpose was to invest in
certain "qualified investments" and opportunities relating to
natural gas, crude oil, coal, electricity and other forms of
energy, including investments in energy facilities.

ECM II and ECM III are indirectly wholly owned entities of Enron
North America Corp.

Throughout the course of the Debtors' reorganization cases, JEDI
II divested itself of its assets.  These divestitures often
occurred in connection with the disposition of certain of the
Debtors' interests and assets.

JEDI II filed proofs of claim in the Debtors' Chapter 11 cases:

                  Amended
    Claim No.     Claim No.    Debtor
    ---------     ---------    -------
      24653        14668       ENA
      24654        23847       ECT Merchant Investments Corp.
      24655        N/A         Enron Corp.
      24656        23849       ECT Securities LP Corp.
      24657        23846       ECT Securities GP Corp.
      24658        23850       TLS Investors, L.L.C.
      24679        23848       ECT Securities Limited Partnership

Each of the JEDI II Claims includes one or more of these
allegations:

    (I) JEDI II claims that Enron and ENA breached fiduciary
        duties owed to JEDI II:

         (1) by causing JEDI II to pay certain fees to certain
             affiliates of Enron and ENA and concealing the
             payment of the Fees;

         (2) in connection with the entry by JEDI II into
             certain swap agreements with ENA;

         (3) by agreeing to certain transfer restrictions which
             limited JEDI II's ability to liquidate certain
             of its assets; and

         (4) in connection with an action against JEDI
             II and ENA styled, Costilla Energy, Inc., by and
             through its Litigation Trustee, George Hicks vs.
             Joint Energy Development Investments II
             Limited Partnership, et al., in the 49th Judicial
             District Court, Zapata County, Texas.

   (II) JEDI II alleges that Enron and ENA:

         (a) induced the General Partner to breach the terms of
             Partnership Agreement in connection with the Fee
             Allegations;

         (b) induced the General Partner to breach its fiduciary
             duties to the limited partners of the Partnership;

         (c) were grossly negligent in connection with the Fee
             Allegations and the Trutta Claim; and

         (d) are liable for conversion in connection with the Fee
             Allegations.

  (III) JEDI II asserts that ENA is obligated to indemnify it in
        connection with the Costilla Litigation.

The Reorganized Debtors strongly dispute the JEDI II Claims.  In
addition, ENA maintains claims against the Partnership arising
from various commodity swap transactions and for various unpaid
fees allegedly due and owing to the General Partner pursuant to
the Partnership Agreement.

Over a period of several months, JEDI II, Enron, ENA, and CalPERS
engaged in discussions regarding the dissolution of JEDI II and,
in connection therewith, resolution of the issues related to the
Partnership Agreement, the JEDI II Claims, the Claims Objection
and the ENA Claims, including various liabilities of JEDI II.

As a result of these discussions, the parties have reached a
Settlement Agreement:

(A) On the Closing Date, the cash of the Partnership will be
     treated in this manner:

     -- the General Partner will create a reserve for each of the
        matters, and in the amounts not to exceed $5,620,000;

     -- the General Partner will cause the Partnership to pay
        $16,000,000, at the direction of ENA, in full and complete
        satisfaction of the ENA Claims and other claims that any
        of the Enron Parties may have against the Partnership;

     -- the General Partner will cause the Partnership to pay
        CalPERS all unpaid legal fees and expenses incurred up to
        and including May 31, 2005, and all unpaid monitoring fees
        through the Closing Date; and

     -- the balance of the Partnership's cash will be distributed
        to the Partners in accordance with the terms and
        provisions of the Partnership Agreement.

(B) In the event that any future proceeds are received by the
     Partnership in respect of its investment in East Coast Power,
     the proceeds will be distributed to the Partners as soon as
     practicable after the later to occur of:

     (x) the Closing, and

     (y) the receipt of the proceeds in accordance with the terms
         and provisions of the Partnership Agreement.

(C) The funds reserved in the Costilla Reserve will be used
     solely for liabilities and fees and expenses incurred in
     connection with the Costilla Litigation.  Upon final
     resolution of the Litigation, any funds remaining in the
     Reserve will be distributed as soon as practicable after the
     Closing and in accordance with the terms and provisions of
     the Partnership Agreement.

(D) In the event the Partnership receives cash from any other
     source or the General Partner reasonably determines that the
     cash in any Reserve is no longer necessary to fund the
     liability for which such Reserve was created, the General
     Partner will cause the Partnership to distribute such cash
     to the Partners in accordance with the Partnership Agreement;
     provided, however, that notwithstanding the foregoing and
     with the exception of the amounts necessary to reimburse the
     Partnership for payments to the law firm of Morris James
     Hitchens & Williams to be made by or on behalf of the
     Partnership, the Partnership will distribute any and all
     proceeds received by the Partnership in connection with the
     Venoco settlement directly to Enron, and no such proceeds
     will be considered to be Partnership assets or distributed
     to the Partners.

(E) ENA will hold in reserve the General Partner's and ECM III's
     Distributable Share until the earliest to occur of:

      1. the third anniversary of the Closing Date,

      2. entry of an order of the Bankruptcy Court, upon notice to
         CalPERS and a hearing,

      3. the written agreement of CalPERS, and

      4. the payment of any amounts required to be paid in
         connection with the final resolution of the Costilla
         Litigation, and at that time, ENA will release the
         Distributable Shares to each of the General Partner and
         ECM III.

(F) On the Closing Date, each claim by the Partnership against
     the Reorganized Debtors, including, but not limited to, the
     JEDI II claims, other than the Partnership's Claim No. 2253
     for $486,526, which claim was assigned to the Partnership by
     Andex Resources, will be deemed irrevocably withdrawn, with
     prejudice, and to the extent applicable expunged and
     disallowed in their entirety.

(G) Upon resolution of the Costilla Litigation, and to the extent
     that that resolution is a compromise and settlement of the
     claims and causes of action asserted, that resolution will be
     approved in accordance with the terms of the Partnership
     Agreement.

(H) The liability of each Partner under the Settlement Agreement
     and the Partnership Agreement to return any distributions
     will be limited solely to the amount of that Partner's
     Distributable Share and no return of distributions will be
     required for any reason other than in connection with any
     judgment or settlement of the Costilla Litigation.

The parties agree that the Bankruptcy Court will retain
jurisdiction over disputes arising out of the Settlement
Agreement and further provides that disputes arising from or
related to the Partnership Agreement will be subject to the
jurisdiction provision in the Partnership Agreement.

Mr. Rosen asserts that the Settlement Agreement is favorable to
the Reorganized Debtors, their estates and creditors.  The
Reorganized Debtors believe that any protracted dispute with JEDI
II will simply drain their resources.

Pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure, the Reorganized Debtors ask the Court to approve the
Settlement.

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

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


ENRON CORP: PGH & PTC Asks Court to Dismiss Chapter 11 Cases
------------------------------------------------------------
Pursuant to Section 1112(b) of the Bankruptcy Code, Portland
General Holdings, Inc., and Portland Transition Company, Inc.,
ask the U.S. Bankruptcy Court for the Southern District of New
York to dismiss their Chapter 11 cases.

The bankruptcy cases of Enron Corp. and its subsidiaries,
including PGH and PTC, have been procedurally consolidated for
administrative purposes.  PGH and PTC filed for Chapter 11
protection on December 27, 2003.

As of its Petition Date, PGH's books and records reflected
$5,406,564 in assets and $61,564,423 in liabilities.  PTR's
consolidated books and records reflected $0 assets and
liabilities.

PGH acts as a holding company for PGH II, Inc., and PGH Leasing,
LLC, both non-debtors, and is the sponsoring corporation and
administrator for certain non-qualified deferred compensation
plans.  In addition, PGH sponsors and administers the PGH
Umbrella Trust for Management and the PGH Umbrella Trust for
Directors, which hold assets to pay plan liabilities.

PTR was formed for the purpose of acting as the employer of
certain former employees of Portland General Electric Company, a
non-debtor subsidiary of Enron, that were to render services to
other non-regulated Enron affiliates during the two-year
transition period after Enron's acquisition of PGE.  PTR no
longer has any employees.

Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, in New
York, notes that, as stated in their Schedules of Assets and
Liabilities and Statements of Financial Affairs, filed on
June 30, 2003:

    (i) PGH's creditors consisted primarily of current and former
        employees and members of PGH's board of directors who
        are beneficiaries under the Benefit Plans.

   (ii) PTR's creditors are also primarily former employees who
        PTR believed, at the time of the filing of the Schedules,
        may assert a claim against PTR.

To the extent that any employees' claims existed, the claims have
been settled by the execution and consummation of the terms and
provisions of a January 2005 Settlement Agreement.

The Court approved the Settlement on February 24, 2005.  Pursuant
to the Settlement, Enron, PGH, the Creditors Committee, Portland
General Electric Company, and certain settling participants
agreed to:

     (a) resolve issues associated with ownership of funds held in
         trusts,

     (b) the payment of amount to settling participants and

     (c) the adoption of certain benefit plans.

In addition, the Settlement provided that distribution amounts
that would be allocable to certain of PGH's employees who were
not parties to the Settlement Agreement would be maintained by
PGH in a segregated account.

The Settlement Agreement became effective on April 4, 2005.

Mr. Rosen notes that the Debtors' Confirmed Plan of
Reorganization did not pertain to PGH, PTR or their assets and
liabilities.  The formulae contained in the Plan carved out from
the calculation any reference to PGH, PTR or their assets and
liabilities.

Section 1112(b) provides, in pertinent part, "on request of a
party in interest . . . and after notice and a hearing . . . the
court . . . may dismiss a case under this chapter, whichever is
in the best interest of creditors and the estate for cause".

Mr. Rosen asserts that the dismissal of the Chapter 11 cases of
PGH and PTR is warranted under the circumstances.

As of the Effective Date of the Plan, the creditors and assets of
PGH and PTR were separated from the assets of the other Debtors.
Their estates are, effectively, being administered separately
from the estates of the remaining Debtors.  Based on the
consummated Settlement, all assets of PGH, other than those
contained in the Non-Signatory Account have been distributed.
Likewise, virtually all liabilities have been satisfied.

Enron, as equity interest holder of PGH and PTR, does not see any
value to be gained from continuing PGH's and PTR's Chapter 11
cases.  The dismissal of the Cases would permit PGH and PTR to
pursue liquidation and dissolution pursuant to Oregon state law
and would relieve their estates of any administrative expenses,
Mr. Rosen says.

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

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


FLEETWOOD ENTERPRISES: Defers Dividends on 6% Preferred Securities
------------------------------------------------------------------
Fleetwood Enterprises, Inc. (NYSE: FLE) confirmed its intent to
continue to defer distributions on its 6% preferred securities,
otherwise due on Aug. 15, 2005.

On July 22, 2005, the Company amended its credit agreement with a
consortium of lenders led by Bank of America, N.A., as
administrative and collateral agent.  The lenders include:

   -- General Electric Capital Corporation,
   -- Wells Fargo Foothill, Inc.,
   -- The CIT Group/Business Credit, Inc., and
   -- Textron Financial Corporation.

The amendment permits the Company to engage in an exchange offer
and a consent solicitation, including the issuance of new
convertible senior subordinated debentures.

As reported in the Troubled Company Reporter on July 26, 2005, the
Company filed a registration statement with the U.S. Securities
and Exchange Commission relating to a proposed exchange offer and
consent solicitation of to all the outstanding 6% Convertible
Trust Preferred Securities due 2028, of Fleetwood Capital Trust.  
Fleetwood proposes to offer to exchange new convertible senior
subordinated debentures for up to $201,250,000 in aggregate stated
liquidation amount of the Trust Preferred Securities.  The terms
of the exchange offer and the consent solicitation have not yet
been determined and will be announced upon commencement.

The purpose of the exchange offer is to reduce outstanding  
liabilities, eliminate all or a substantial portion of the  
existing deferred distributions on the Trust Preferred Securities,  
reduce interest expense and improve capital structure and credit  
statistics.  The purpose of the consent solicitation is to solicit  
consents from holders to amend the governing documents of the  
Trust Preferred Securities to allow for the purchase or exchange  
of all or a portion of the Trust Preferred Securities, whether  
pursuant to the exchange offer or otherwise, during periods in  
which Fleetwood has exercised its right to defer payment of  
interest.

Fleetwood Enterprises, Inc. -- http://www.fleetwood.com/-- is a    
leading producer of recreational vehicles and manufactured homes.   
This Fortune 1000 company, headquartered in Riverside, California,
is dedicated to providing quality, innovative products that offer
exceptional value to its customers.  Fleetwood operates facilities
strategically located throughout the nation, including
recreational vehicle, manufactured housing and supply subsidiary
plants.

                        *     *     *

As reported in the Troubled Company Reporter on July 22, 2005,  
Standard & Poor's Ratings Services lowered its corporate credit
rating on Fleetwood Enterprises Inc. to 'B+' from 'BB-'.  S&P said
the outlook is negative.  At the same time, the rating assigned to
the company's convertible senior subordinated debentures is
lowered to 'B-' from 'B'.  The rating assigned to Fleetwood  
Capital Trust's convertible trust preferred securities remains  
'D', as Fleetwood continues to defer payment of related dividends.


FRIEDMAN'S INC: Files Chapter 11 Plan of Reorganization in Georgia
------------------------------------------------------------------
Friedman's Inc. (OTC: FRDMQ.PK) filed a proposed Plan of
Reorganization and related Disclosure Statement with the United
States Bankruptcy Court for the Southern District of Georgia,
Savannah Division, on Aug. 4, 2005.  The filing of the Plan
positions Friedman's to emerge from chapter 11 on an accelerated
basis in November 2005 before the 2005 holiday sales season.

The proposed Plan of Reorganization reflects the outcome of
extensive negotiations between Friedman's and Harbert Distressed
Investment Master Fund, Ltd., as the proposed plan investor in
Friedman's chapter 11 cases.  Under the terms of the Plan:

    * the remaining $1.9 million allowed secured claim arising
      under Friedman's prepetition senior secured credit facility,
      which is now held by Harbert, will be fully satisfied
      through the issuance of shares of new common stock of
      Reorganized Friedman's;

    * claims under the Company's secured vendor program, in which
      Harbert holds a participation interest, will be fully
      satisfied through the issuance of shares of new common stock
      of Reorganized Friedman's.  Other secured vendor program
      claims will be satisfied by cash payments in the amount of
      75% of such claims with the remaining face amount of such
      claims treated as general unsecured claims.

    * any recoveries for general unsecured creditors will be
      realized from any net recoveries generated from a creditor
      trust that will be established for the benefit of the
      Company's general unsecured creditors, to which the Company
      will transfer initial funding of $500,000 and the right to
      prosecute causes of action and recover amounts in connection
      with claims relating to certain prepetition events involving
      the Company currently under joint investigation by the
      Company and the Company's Official Committee of Unsecured
      Creditors;

    * all existing equity interests will be cancelled upon the
      Company's emergence from chapter 11.  The Plan provides that
      Harbert will receive substantially all of the new equity
      interests in Reorganized Friedman's, except for management
      grants, on account of its additional anticipated equity
      investment and in satisfaction of all claims held by Harbert
      in the Company's chapter 11 cases including its $25.5
      million Term DIP Loan and other claims described above.

The Disclosure Statement filed in conjunction with the Plan of
Reorganization includes information about the Plan and the
Company's history, accomplishments during the chapter 11 cases,
and future prospects including a 2005-2008 business plan that
anticipates Friedman's return to profitability in fiscal year
2007.

                  Creditor Talks Continue

The Creditors' Committee, which serves as fiduciary for the
benefit of all unsecured creditors, has not agreed to the
treatment for unsecured creditors proposed in the Plan.  
Representatives of the Company, Harbert, and the Creditors'
Committee devoted significant time and effort in attempting to
reach resolution on the treatment for unsecured creditors, but
were unable to do so prior to the filing of the Plan.  

The Company filed the Plan and has commenced the Court process
required to approve the Plan because the Plan should enable the
Company to emerge from Chapter 11 with a healthy balance sheet and
appropriate liquidity to execute its strategic four year business
plan.  The Company's plan investor (which is providing the funding
necessary to implement the Plan) would not support more favorable
treatment of creditors and interest holders than is contained in
the Plan based on the Company's financial circumstances and future
prospects as described in the Disclosure Statement.  

The Company has been advised by the Creditors' Committee that the
Committee will oppose the Plan as currently filed and that the
Committee may also file and pursue other forms of relief that
could have an adverse effect on the Company.  The Company,
Harbert, and the Creditors' Committee informed the Bankruptcy
Court at last Thursday's monthly omnibus hearing that the parties
were continuing to negotiate possible consensual amendments to the
Plan.

                  Disclosure Statement Hearing

At last Thursday's omnibus hearing, the Bankruptcy Court scheduled
a hearing on the Disclosure Statement filed in connection with the
Plan for Sept. 7, 2005, and an objection deadline regarding the
adequacy of the Disclosure Statement for Aug. 31, 2005.  

In the event that the Creditors' Committee files an objection to
the Disclosure Statement, the hearing would be adjourned to
Sept. 19, 2005.  Bankruptcy law does not permit solicitation of
acceptances of the Plan until the Court approves the related
Disclosure Statement as providing adequate information of a kind,
and in sufficient detail, as far as is reasonably practicable in
light of the nature and history of the debtor and the condition of
the debtor's books and records, that would enable a hypothetical
reasonable investor typical of the holder of claims or interests
of the relevant class to make an informed judgment about the Plan.  

The Company's Plan and Disclosure Statement is available at no
charge at http://www.kccllc.net/friedmans

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


GLOBAL CROSSING: GCUK Begins Exchange Offer for Sr. Secured Notes
-----------------------------------------------------------------
Global Crossing (UK) Finance plc, a wholly owned subsidiary of
Global Crossing (Nasdaq:GLBC), has begun an exchange offer with
respect to its senior secured notes.

GCUK Finance will exchange $200 million of its 10.75% US dollar-
denominated senior secured notes due in 2014 and GBP105 million of
its 11.75% British pounds sterling-denominated senior secured
notes due in 2014, all of which were privately placed in December
2004, for equivalent amounts and types of notes that have been
registered under the Securities Act of 1933, as amended.

As is the case with the unregistered notes, the new notes will be
guaranteed by Global Crossing (UK) Telecommunications Limited,
GCUK Finance's immediate parent and the principal UK operating
subsidiary of Global Crossing.

The exchange offer satisfies certain obligations of the company
with respect to the registration of the notes.

This offer will expire at 5:00 p.m., London Time on Sept. 1, 2005,
unless extended. The offer is made pursuant to the terms and
conditions included in GCUK Finance's prospectus dated Aug. 3,
2005.

Copies of the prospectus and other information relating to this
exchange offer are available from the exchange agent, The Bank of
New York.

This press release shall not constitute an offer to sell or the
solicitation of an offer to purchase. No sale of these securities
shall occur in any state on which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities law of said state.

Headquartered in Florham Park, New Jersey, Global Crossing Ltd. --
http://www.globalcrossing.com/-- provides telecommunications    
solutions over the world's first integrated global IP-based
network, which reaches 27 countries and more than 200 major cities
around the globe.  Global Crossing serves many of the world's
largest corporations, providing a full range of managed data and
voice products and services.  The Company filed for chapter 11
protection on January 28, 2002 (Bankr. S.D.N.Y. Case No.
02-40188).  When the Debtors filed for protection from their
creditors, they listed $25,511,000,000 in total assets and
$15,467,000,000 in total debts.  Global Crossing emerged from
chapter 11 on December 9, 2003.

At March 31, 2005, GCUK's balance sheet showed a GBP170,397,000
stockholders' deficit, compared to a GBP161,565,000 deficit at
Dec. 31, 2004.


GMAC COMMERCIAL: Fitch Puts Low-B Rated Certs. on Watch Positive
----------------------------------------------------------------
Fitch Ratings places these classes of GMAC Commercial Mortgage
Securities, Inc.'s series 1999-CTL1, on Rating Watch Positive:

     -- $7.7 million class B 'AA';
     -- $8.7 million class C 'A';
     -- $9.6 million class D 'BBB';
     -- $4.8 million class E 'BB';
     -- $3.9 million class F 'B'.

The classes are placed on Rating Watch Positive due to the
anticipated defeasance of 24 loans with an unpaid principal
balance totaling $123.6 million, or 85% of the remaining pool.  
The classes will remain on Rating Watch Positive until the
defeasances close, at which time Fitch expects to upgrade classes
B through F to 'AAA'.


GRAFTECH INT'L: June 30 Balance Sheet Upside-Down by $64 Million
----------------------------------------------------------------
GrafTech International Ltd. (NYSE: GTI) reported second quarter
2005 results.

Net sales were $220 million for the second quarter of 2005,
compared to $213 million in the second quarter of 2004.  Gross
profit increased by approximately five% to $57 million, compared
to $54 million for the second quarter of 2004, driven primarily by
higher average graphite electrode revenue per metric ton and
productivity enhancements.

Net income for the quarter was $5 million, compared to a net
income of $18 million, in the second quarter of 2004.  Net income
in the second quarter of 2005 included a gain of $12 million
(before and after tax) from the successful reduction of the EU
antitrust fine.

Net income before special items was $11 million, compared to $13
million, in the second quarter of 2004.  The decrease in net
income was primarily due to an increase of $3 million in interest
expense in the second quarter of 2005.

GTI Chief Executive Officer Craig Shular commented, "We continued
to grow our revenues this quarter despite the much lower than
anticipated operating levels of our steel customers.  Graphite
electrode shipments were slightly lower than plan as our steel
customers continued working through high steel inventories.
Despite these lower shipments, gross profit and gross margin
percent in our synthetic graphite segment continued to improve,
achieving a four-year high, driven by both higher realized prices
and better than anticipated productivity improvements."

Mr. Shular continued, "During the quarter, we also made
significant progress in commercializing new advantaged
technologies.  We received the prestigious 2005 R&D 100 Award for
our new Apollo brand graphite electrode that enables higher steel
productivity in the largest and most demanding EAF applications.
This is the third consecutive year that GTI has received this
prestigious award for commercializing new products with its
advantaged technologies.

We also received our first approval in the very important LCD flat
panel display segment.  We believe the LCD television segment,
when coupled with the plasma display panel television segment, is
expected to grow from about eight million units, or four percent
of total televisions sold in 2004, to 60 million units, or 28
percent of the total television market, by 2008.  We are now
positioned to participate in the anticipated rapid growth of both
of these segments over the next few years."

                  Synthetic Graphite Segment

Net sales for GTI's synthetic graphite segment increased three
percent in the second quarter of 2005 to $193 million as compared
to $188 million in the second quarter of 2004.  The increase was
primarily attributable to higher sales volume in the company's
cathode and advanced graphite material product lines and increased
average graphite electrode revenue per metric ton.

Second quarter 2005 average graphite electrode revenue per metric
ton increased approximately 14 percent to $2,849 as compared to
$2,507 in the second quarter of 2004.  Graphite electrode sales
volume was 48.2 thousand metric tons as compared to 55.9 thousand
metric tons in the same period in the prior year, primarily due to
the company's price initiatives and the lower operating levels of
its steel customers.

Gross profit for the synthetic graphite segment increased six
percent to $51 million as a result of higher graphite electrode
prices and stronger volumes in the advanced graphite materials
product line.  The improvement was partially offset by increased
costs, in line with the company's guidance.  During the quarter,
the graphite electrode gross profit represented the single best
gross margin performance since 2001, contributing to GTI's total
company gross profit performance.

                           Other Segment

Net sales for GTI's other segment increased 8% to $27 million in
the second quarter of 2005, versus $25 million in the second
quarter of 2004, representing a four-year high for GTI. This
increase was primarily driven by second quarter 2005 ETM sales of
$4.5 million, representing a 50 percent or $1.5 million increase
over net sales of $3 million in the second quarter of 2004.

Commenting on the growth of GTI's ETM product line, Mr. Shular
said, "We are pleased with our market penetration to date and
continued revenue growth.  We expect to achieve sales of
approximately $20 million in 2005, representing an almost 70
percent increase over 2004."

GTI received eight new approvals during the second quarter of 2005
for the use of its ETM solutions in high growth segments,
including its first approvals for the use of its products in LCD
flat panel displays used for televisions and computer monitors,
wireless PDA communication devices and video gaming devices.

GTI's Advanced Energy Technology Inc. subsidiary received the
prestigious "Supplier of the Year" Award from Federal-Mogul
Corporation in July 2005.  GTI was one of only six companies to
achieve this annual award from Federal-Mogul's global supplier
network, which consists of more than 7,000 companies.  The award
is based on zero defects, on-time delivery, superior customer
support and cost savings recommendations.  This designation
recognizes GTI as a trusted and dependable partner in supplying
Federal-Mogul's needs, with a commitment to provide the highest
levels of quality and service.  This award exemplifies GTI's
vision of enabling customer leadership faster and better than its
competition.

                            Corporate

Selling, general and administrative and research and development
expenses were $27 million in the second quarter of 2005, in line
with the company's guidance, as compared to $28 million in the
first quarter of 2005, primarily due to lower administrative
expenses.  In the third quarter of 2005, GTI expects a further
reduction in selling, general and administrative expenses of $1
million to $2 million.

Other Expense, net, was $6 million ($4 million after tax) in the
second quarter of 2005, and was primarily due to $5 million
associated with currency exchange losses on Euro-denominated
inter-company loans.  Second quarter 2004 Other Expense, net of $7
million ($5 million after tax) included $3 million of currency
exchange losses, primarily associated with Euro-denominated inter-
company loans, $2 million for certain environmental work and $2
million of various other costs.

Interest expense was $13 million in the second quarter of 2005, as
compared to $10 million in the second quarter of 2004, primarily
due to higher effective rates on GTI's variable interest rate
debt.  During the second quarter of 2005, GTI exited $285 million
notional amount of existing interest rate swaps at a cost of
approximately $5 million, thereby converting the effective rate of
interest on the underlying debt back to a fixed rate.  Since mid-
2002, the company has saved over $60 million, including the recent
exit costs, in interest expense from these initiatives.  Following
these transactions there remained $150 million notional amount of
interest rate swaps at June 30, 2005. Interest expense for 2005 is
now expected to be approximately $51 million to $52 million, or $2
million to $3 million higher than previously anticipated,
partially due to higher effective interest rates.

Provision for income tax expense was $6 million in the second
quarter of 2005, including a $2 million non-cash tax charge taken
during the quarter related to the impact on the company from Ohio
state tax reform laws passed on June 30, 2005.  The effective tax
rate for the quarter, excluding the $2 million charge, was
approximately 37 percent, in line with the company's guidance.
Although the charge represents the reduced value of existing
future deductible items, the overall tax reform is designed to
create an improved business climate for companies operating in
Ohio, and will, among other things, phase out the corporate
franchise tax over a five year period, phase out tangible personal
property tax over four years, and create a new broad-based, low
rate business privilege tax.  The company is currently assessing
the positive implications of these changes on its future operating
activities in Ohio.

Free cash flow in the second quarter of 2005 before antitrust and
restructuring payments was breakeven.  GTI generated positive cash
flow from operations of $5 million, despite using $17 million for
working capital, primarily for inventory.  Free cash flow before
antitrust and restructuring also included capital expenditures of
$14 million, and a $3 million source of cash from the sale of
certain assets in the second quarter of 2005.  Other uses of cash
included $5 million for the exiting of interest rate swaps. Net
debt was $677 million at June 30, 2005.

GrafTech International Ltd. -- http://www.graftech.com/-- is one  
of the world's largest manufacturers and providers of high quality
synthetic and natural graphite and carbon based products and
technical and research and development services, with customers in
80 countries engaged in the manufacture of steel, aluminum,
silicon metal, automotive products and electronics. The Company
manufactures graphite electrodes and cathodes, products essential
to the production of electric arc furnace steel and aluminum. The
Company also manufactures thermal management, fuel cell and other
specialty graphite and carbon products for, and provides services
to, the electronics, power generation, semiconductor,
transportation, petrochemical and other metals markets.  The
Company is the leading manufacturer in all of our major product
lines, with 13 state of the art manufacturing facilities
strategically located on four continents.  

At Jun. 30, 2005, GrafTech International Ltd.'s balance sheet
showed a $64,000,000 stockholders' deficit, compared to a
$53,000,000 deficit at Dec. 31, 2004.


HOLLINGER INT'L: Names Former NY Times CFO to Audit Committee
-------------------------------------------------------------
Hollinger International Inc. (NYSE: HLR) reported that John
O'Brien, former New York Times Company Chief Financial Officer and
veteran newspaper industry executive, has been appointed to its
Board of Directors.  Mr. O'Brien will become a member of the
Board's Audit Committee.

Gordon A. Paris, Chairman and Chief Executive Officer, said, "John
O'Brien is a highly experienced and respected executive in the
newspaper industry, and we welcome him to our Board.  Our
Company's ability to recruit a professional of John's caliber
reflects the strides Hollinger International has made over the
past two years and the bright future ahead for our publications.
We stand to benefit from John's guidance and expertise as we build
on the solid foundation we have in place to further improve our
performance for our readers and our shareholders."

Mr. O'Brien joined The New York Times Company (NYSE: NYT) in 1960.  
He served in positions of increasing responsibility in the
accounting and finance areas before being named a Vice President
in 1980 and, following that, held several senior executive
positions in the operations, finance and labor relations areas
including Senior Vice President for Operations, Deputy General
Manager for THE NEW YORK TIMES newspaper and Deputy Manager of the
Company, including overseeing all newspaper, wholesaler and
electronic publishing efforts.  He was named Chief Financial
Officer of the Company in 1998 and held that position until his
retirement in 2001.  Mr. O'Brien received a B.S. in accounting
from Fairleigh-Dickinson University and an Executive M.B.A. from
Stanford University.

Hollinger International Inc. is a newspaper publisher whose assets
include The Chicago Sun-Times and a large number of community
newspapers in the Chicago area as well as in Canada.

                         *     *     *

As reported in the Troubled Company Reporter on August 6, 2004,
Moody's Investors Service changed the rating outlook on Hollinger
International Publishing, Inc., to positive from stable and has
withdrawn other ratings.

Ratings withdrawn:

   * $45 million Senior Secured Revolving Credit Facility, due
     2008 -- Ba2

   * $210 million Term Loan "B", due 2009 -- Ba2

   * $300 million of 9% Senior Unsecured Notes, due 2010 -- B2

Ratings confirmed:

   * Senior Implied rating -- Ba3
   * Issuer rating -- B2

Moody's says the outlook is changed to positive.


INTERSTATE BAKERIES: Charles Sullivan Retires From Board
--------------------------------------------------------
Interstate Bakeries Corporation (OTC: IBCIQ) disclosed that Board
of Directors member Charles A. Sullivan has retired from the
Board, effective immediately.

Mr. Sullivan said, "It has always been my intention to retire as a
Director after my 70th birthday.  Now that the Company's
restructuring is well under way, I feel confident in the ability
of our management team and Board to provide the leadership
necessary for the future of the Company."

Leo Benatar, Chairman of the Board, commented, "Chuck Sullivan's
leadership has played a valuable role in IBC's history for more
than 17 years.  We are deeply indebted to him for his loyal and
dedicated service."

Mr. Sullivan joined Interstate Bakeries in 1988 following IBC's
acquisition of American Bakeries, where Mr. Sullivan served as
President.  In March of 1989 Mr. Sullivan was appointed CEO of
Interstate Bakeries Corporation, a position in which he served
until October 2002.  He was appointed Chairman of the Board in
1991 and served in that capacity until September 2003.

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

The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts.  When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6.0% senior subordinated convertible notes due August 15, 2014,
on August 12, 2004) in total debts.  (Interstate Bakeries
Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


INTERSTATE BAKERIES: Court OKs $700,000 Sale of Hearth Roll Line
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Missouri
gave Interstate Bakeries Corporation and its debtor-affiliates
authority to sell its Hearth Roll Line to Russell T. Bundy, an
Ohio Corporation, for $700,000.  Bundy has already deposited
$70,000 in an escrow account, pursuant to the parties' Sale
Agreement.

The Hearth Roll Line encompasses all of the equipment necessary
for the Debtors to produce and package different varieties of
rolls, including Hoagies, Pistelette Brown & Serves, French twin
rolls, 8" Subs, Bread DeJour French, Bread DeJour, Beefsteak,
Cluster 8 hamburger buns, Brown & Serve Rolls, Onion Kaiser, Honey
Rolls, and Golden Wheat Rolls.

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

The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts.  When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6.0% senior subordinated convertible notes due August 15, 2014,
on August 12, 2004) in total debts.  (Interstate Bakeries
Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


INTERSTATE BAKERIES: Wants to Reject 9 Real Property Leases
-----------------------------------------------------------
Interstate Bakeries Corporation and its debtor-affiliates seek the
U.S. Bankruptcy Court for the Western District of Missouri's
authority to reject nine non-residential real property leases
effective as of July 29, 2005, to reduce postpetition
administrative costs:

   Lessor                Address of Leased Premises  Lease Date
   ------                --------------------------  ----------
   Willsteph Properties  125 Pamplico Highway,       01/01/1974
                         Florence, South Carolina

   Coastal Realty Co.    2060 Carolina Beach,        08/01/1991
   (Herbert Fisher)      Wilmington, North
                         Carolina

   Trackstar Partners,   2822 Street Road,           04/20/1992
   L.P.                  Bensalem, Pennsylvania

   Speight Properties    3193 E 10th, Greenville,    07/19/1993
   (Maxine A. Spreight)  North Carolina

   Charles Frye          1400 Gamecock Street,       05/01/1996
                         Conway, South Carolina

   HanGill Family LLC    4601 Main Street,           05/11/1996
                         Shallotte, North Carolina

   6 C's, Inc.           510 Blue Ridge Avenue,      11/03/1998
                         Bedford, Virginia

   Midland Holding       6801 Two Notch Road,        05/12/2000
   Corp. c/o Coldwell    Columbia, South Carolina
   Banker

   W. M. Timberlake      721 South 5th Street,       01/20/2004
                         Hartsville, South Carolina

"By rejecting each Real Property Lease as of the Rejection Date,
the Debtors will avoid incurring unnecessary administrative
charges for rent and other charges and repair and restoration of
each of the Premises that provide no tangible benefit to the
Debtors' estates and will play no part in the Debtors' future
operations," J. Eric Ivester, Esq., at Skadden Arps Slate Meagher
& Flom LLP, in Chicago, Illinois, says.

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

The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts.  When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6.0% senior subordinated convertible notes due August 15, 2014,
on August 12, 2004) in total debts.  (Interstate Bakeries
Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


JERNBERG INDUSTRIES: Court Orders Debtor to File Plan by Oct. 27
----------------------------------------------------------------
The Honorable John H. Squires of the U.S. Bankruptcy Court for the
Northern District of Illinois entered an order last month
requiring Jernberg Industries, Inc. and its debtor-affiliates to
file its Plan of Reorganization and Disclosure Statement on or
before October 27, 2005.  

Headquartered in Chicago, Illinois, Jernberg Industries, Inc., --
http://www.jernberg.com/-- is a press forging company that      
manufactures formed and machined products.  The Company and its
debtor-affiliates filed for chapter 11 protection on June 29, 2005
(Bankr. N.D. Ill. Case No. 05-25909).  Jerry L. Switzer, Jr.,
Esq., at Jenner & Block LLP represents the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they estimated assets and debts of $50 million to
$100 million.  CM&D Management Services, LLC' A. Jeffery Zappone
serves as the Debtors' Chief Restructuring Officer.  CM&D Joseph
M. Geraghty sits as Cash and Restructuring Manager and Joshua J.
Siano, Gerald B. Saltarelli and J. David Mathews serve as Cash and
Restructuring Support personnel.


KAISER ALUMINUM: Gets Okay to Hire Ernst & Young as Tax Servicer
----------------------------------------------------------------
Judge Fitzgerald authorizes Kaiser Aluminum Corporation and its
debtor-affiliates to employ Ernst & Young LLP as their tax
servicer, nunc pro tunc to May 21, 2005.

At the next omnibus hearing scheduled for August 29, 2005, the
U.S. Bankruptcy Court for the District of Delaware will consider
whether the nunc pro tunc date for Ernst & Young's retention may
extend back further than May 21, 2005.

Ernst & Young's fees for the services rendered to the Debtors will
be subject to the "reasonableness" standard under Section 330 of
the Bankruptcy Code.  The firm will be compensated for its
services and reimbursed for any related expenses in accordance
with applicable provisions of the Bankruptcy Code.

           Debtors Want U.S. Trustee's Objection Nixed

The Debtors ask the Court to overrule the United States Trustee's
objection and to fix May 1, 2005, as the nunc pro tunc date for
Ernst & Young's retention.

Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, relates that the Unites States Court of
Appeals for the Third Circuit has established in In re Arkansas
Co., 798 F.2d 645, 649 (3d Cir. 1986), and F/S Airlease II, Inc.,
v. Simon (In re F/S Airlease II, Inc.), 844 F.2d 99, 104 (3d Cir.
1988), a two-part test that is used to determine the propriety of
retroactive approval of a professional's employment.  The test
provides that:

   (1) the bankruptcy court must determine whether the
       professional seeking to be employed satisfies the standard
       for employment under Section 327(a) of the Bankruptcy
       Code; and

   (2) in exercising its discretion, the bankruptcy court must
       consider whether the particular circumstances in the case
       adequately excuse the failure to have sought prior
       approval.

Ms. Newmarch contends that there is no dispute that Ernst & Young
meets the standard for retention under Section 327(a), given that
the Court has already entered an agreed order approving Ernst &
Young's retention.

Ms. Newmarch argues that the nunc pro tunc date is warranted
because certain circumstances unquestionably establish that:

   -- it was impossible for Ernst & Young to file a retention
      application before commencing services;

   -- Ernst & Young and the Debtors acted diligently to complete
      all the steps necessary before a retention application
      could be filed; and

   -- no third parties will be prejudiced by the approval of the
      request.

Ms. Newmarch recounts that the Debtors' urgent and significant
need for tax preparation and compliance services was created by
the resignation of the Debtors' tax corrector, Ron Barnhill, who
was in charge of the Debtors' tax return preparation and other tax
compliance matters that were being performed in-house.  Mr.
Barnhill notified the Debtors that he would be resigning from his
position effective March 15, 2005.

Ms. Newmarch states that the timing of Mr. Barnhill's resignation
was completely unexpected and left the Debtors with an urgent void
to fill because they were, at the time, in the process of
preparing:

   (i) their tax provision to be included in their annual report,
       which was opened to be filed with the Securities and
       Exchange Commission at the end of March 2005;

  (ii) multiple local and state tax returns; and

(iii) a variety of estimated tax payments within the next
       several weeks.

"Clearly, the fact that the Ernst & Young Application was filed
after [it] commenced providing services was not due to 'mere
oversight and inadvertence' and the requested nunc pro tunc
approval will not 'reward laxity by counsel and encourage
circumvention of the statutory requirement'," Ms. Newmarch says.

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 Allows Hampton Roads' $3.5 Mil. Rejection Claim
-----------------------------------------------------------------
On July 10, 2002, Hampton Roads Associates Retail, LLC, filed
Claim No. 27526 against Kmart Corporation for $14,935,502.  

In a Court-approved stipulation, the parties agree that the Claim
will be allowed for $3,500,000 as a Class 5 Trade Vendor/Lease
Rejection Claim against Kmart.  

With respect to 85% of the allowed amount, Hampton Roads will
receive 22,102 shares of Sears Holdings Corporation.  Hampton
Roads will receive subsequent distributions on a pro rated basis
with other holders of Class 5 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)


LA PALOMA: S&P Rates $370 Million Loans at BB-
----------------------------------------------
Standard & Poor's Ratings Services assigned a preliminary 'BB-'
rating and '1' recovery rating to La Paloma Generating Co. LLC's
(La Paloma) proposed $265 million secured term loan B due in 2012
on the seventh anniversary of the closing.

In addition, a 'BB-' preliminary rating and '1' recovery rating
were assigned to La Paloma's senior-lien $65 million working-
capital facility and its $40 million synthetic LC facility.  

A 'B' preliminary rating and '5' recovery rating have been
assigned to the issuer's proposed second-lien $172 million term
loan C, due on the eighth anniversary of closing.

The outlook is stable.

The 'BB-' rating and '1' recovery rating on the term loan B,
working-capital facility, and synthetic LC facility indicate an
expectation of the full recovery of principal in the event of a
payment default.  The 'B' rating and '5' recovery rating on the
term loan C indicate an expectation of negligible (0%-25%)
recovery of principal in the event of a payment default.

La Paloma, a Delaware limited liability company, will use about
$582 million of loan proceeds, and third-party equity infusions,
to acquire a 1,022 MW (net), combined-cycle, natural gas-fired
power plant near McKittrick, California, near the outer reaches of
the service territories of Southern California Edison Co. and
Pacific Gas and Electric Co.  The purchase price translates into a
favorable acquisition cost of $570 per kW.

The plant has been in service since March 2003.  Following the
acquisition, La Paloma will be a wholly owned subsidiary of La
Paloma Acquisition Co.  A portion of the lending group that is
selling the plant, including participants in the lending group's
loans, is making an $80 million equity contribution to be applied
to the purchase.  An affiliate company that sits above La Paloma
is contributing $108 million of equity that has been funded
through a borrowing from several lenders.

"The stable outlook reflects the near-term revenue stream
predictability provided by tolling agreements, the anticipated
operational stability created by the EPC contractor's
improvements, as well as attributes of California's energy markets
that should support the dispatch of the La Paloma units," said
Standard & Poor's credit analyst David Bodek.

"However, financial performance and credit quality could suffer if
the plant modifications do not translate into sustainable
improvements in heat rates, energy production, and availability,"
Mr. Bodek continued.

Rating upgrades are unlikely, due to the project's sizable
refinancing risk and the use of debt to support the project's
equity.


LIFEPOINT HOSPITALS: Moody's Rates New $200 Million Notes at B2
---------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to LifePoint
Hospitals, Inc.'s proposed $200 million senior subordinated
convertible notes offering.  Moody's also affirmed LifePoint
Hospitals' existing ratings.  The rating actions follow an
announcement by the company that the proceeds of the proposed
convertible notes offering would be used to refinance the existing
$192 million senior subordinated credit facility entered into in
June 2005.  The $192 million senior subordinated credit facility
was not rated by Moody's.

Below is a summary of Moody's actions:

   * Assigned B2 rating to proposed $200 million senior
     subordinated convertible notes due 2025

   * Affirmed Ba3 rating on $1,250 million senior secured Term
     Loan B due 2012

   * Affirmed Ba3 rating on $300 million senior secured revolving
     credit facility due 2010

   * Affirmed Ba3 corporate family rating

The outlook for the ratings is stable.

The ratings reflect the company's high leverage following the
acquisition of Province Healthcare in April 2005 and Danville
Regional Medical Center.  The company drew $150 million of its
revolver to partially fund the Danville acquisition on July 1,
2005.  The ratings also reflect Moody's expectation that the
company will likely use debt to finance the acquisition of five
facilities from HCA, Inc., which the company announced on July 14,
2005.  

The company entered into a definitive agreement to acquire the
five rural Virginia and West Virginia facilities for $285 million,
plus working capital.  Moody's estimates that pro forma for these
transactions and the agreement to lease Wythe County Community
Hospital, adjusted debt to adjusted EBITDA for the last twelve
months ended June 30, 2005 would have been approximately 4.0
times.

Moody's also believes the pace and scale of recent transactions
are indications that the company may more aggressively pursue
larger acquisitions in order to continue to show relative growth.
The ratings reflect Moody's concerns about the company's ability
to absorb the acquired businesses because of integration issues
that could arise given the high volume of acquisition activity in
2005.  The ratings also reflect Moody's concern over LifePoint
Hospitals' ability to capture out-migration of services to larger
urban facilities or non-affiliated outpatient centers and
continued growth in uninsured patient volumes.

The affirmation of the existing ratings reflects the company's
track record of reducing financial leverage prior to the 2005
transactions.  Additionally, following the Province acquisition,
the company has solid market share; improved geographic and
revenue diversification; and increased scale, which allows the
company to compete more effectively with other non-urban hospital
players.

While the proposed offering does not add significantly to the
company's overall leverage, as it refinances existing debt,
Moody's does expect leverage to increase during the near term
given the anticipated debt financing of the five HCA facilities.
The recent transactions of the company result in credit statistics
that are weakly positioned for the rating category.

The high leverage and the expectation that the company will
continue with its strategy of acquiring non-urban, not-for-profit
hospitals are expected to constrain the already weak ratios of
adjusted cash flows from operations to adjusted debt and adjusted
free cash flow to adjusted debt.  Therefore, a positive outlook or
an upgrade of the ratings is not expected in the near term.

The stable outlook reflects our view that positive demographic
trends will continue, and rates for Medicare will remain stable in
the near term.  Moody's expects the company to have good operating
cash flow and free cash flow that will allow for debt repayment.
If the company does not reduce leverage within six months to a
year, or if the company continues its rapid pace of opportunistic
debt-financed acquisitions, the outlook could change to negative.
Moody's notes that the credit agreement allows for up to $400
million of additional borrowings under the facility.  Moody's does
not expect the company's access to these amounts to be
constrained.

Additionally, if the company experiences operational challenges
caused by softening admission trends, adverse reimbursement
developments, or issues associated with the integration of
acquired facilities, and is not expected to attain and sustain
ratios of adjusted operating cash flow to adjusted debt and
adjusted free cash flow to adjusted debt of 15% and 10%,
respectively, there could be downward pressure on the outlook and
ratings.  Additionally, Moody's would expect to see adjusted debt
to adjusted capital reach a sustainable level of 50% or less by
2006 in order to maintain the current ratings.  Adjustments are
made for operating leases and certain non-recurring items.

Pro forma for the Province and Danville acquisitions, a $40
million agreement to lease Wythe (funded with cash on hand), and
the expectation that the acquisition of the HCA facilities will be
debt financed, LifePoint Hospitals would have had cash flow
coverage of debt that is weak for the Ba3 category.  Despite the
incremental increase in debt, Moody's estimates that adjusted cash
flow from operations to adjusted debt and adjusted free cash flow
to adjusted debt would have been approximately 17% and 8%,
respectively, for the twelve months ended June 30, 2005, which is
conistent with prior expectations.

The affirmation of the Ba3 rating on the senior secured credit
facilities reflects our continued expectation of full recovery
under distress.  The assignment of the B2 rating to LifePoint
Hospitals, Inc.'s proposed senior subordinated convertible notes,
two levels below the corporate family rating, reflects the
contractual subordination to the significant amount of senior
secured debt in the company's capital structure and the structural
subordination of the proposed notes (given the absence of
guarantees) to a material amount of senior obligations at the
operating companies.  The rating also expresses the expectation of
recovery in distress under a reasonable stress case sensitivity to
enterprise value.

Under the terms of the proposed offering, any put or conversion
(up to the principal amount) must be satisfied with cash versus
equity.  Moody's views this as an additional liquidity constraint.
However, this is mitigated by the fact that the first date at
which the instruments could be put back to the company will be 7.5
years from the date of issuance.

Ratings remain subject to the review of final documentation.

Headquartered in Brentwood, Tennessee, LifePoint Hospitals, Inc.
operates 52 general acute-care hospitals in non-urban communities
in 20 states.  Revenues for the six months ended June 30, 2005
approximated $743.5 million.


LIFEPOINT HOSPITALS: S&P Rates $200 Million Senior Notes at B+
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on
Brentwood, Tennessee-based hospital operator LifePoint Hospitals,
Inc. (including the 'BB' corporate credit rating) and removed them
from CreditWatch, where they were placed with negative
implications July 15, 2005.  The rating outlook is negative.

At the same time, Standard & Poor's assigned its 'B+' rating to
$200 million of senior subordinated convertible notes due 2025.
LifePoint will use the proceeds to refinance existing debt.

"The ratings are based on LifePoint's aggressive growth strategy
and moderately high leverage since the recent completion of
several acquisitions, highlighted by the April 2005 acquisition of
Province Healthcare Inc. and the pending acquisition of five
hospitals from HCA Inc.," said Standard & Poor's credit analyst
David Peknay.  These acquisitions serve to strengthen the
company's business profile and increase the size of its hospital
portfolio to more than 50 facilities in 20 states from 30
hospitals in 9 states.  The diversity of the portfolio is much
improved, particularly with regard to its previous concentration
in Kentucky, which previously contributed 30% of revenues.  Still,
LifePoint's more than doubling in size creates the challenge of
effectively operating the much-enlarged organization.  The company
also remains subject to uncertain third-party reimbursement.

Lease-adjusted debt to EBITDA, which more than doubled to about
3.8x with the Province transaction, will not meaningfully change
on a pro forma basis (including the pending facility
acquisitions).  Standard & Poor's believes that this spurt of
acquisition activity will cease for an extended period after the
HCA transaction is completed.  LifePoint's management has a
history of maintaining significantly lower debt leverage.  From
2001 until the acquisition of Province, debt to EBITDA was less
than 2x.  The rating incorporates Standard & Poor's expectation
that the company will restore its financial strength as it applies
free cash flow to debt reduction.  Proceeds received from the
eventual sale of the three hospitals marked for disposition, as
well as from any future asset sales, are also expected to repay
debt.  In addition, if earnings fall or if cash flow is weak,
management is expected to reduce discretionary capital spending in
order to decrease debt.


LIONBRIDGE TECH: Moody's Rates Proposed $125 Million Loans at B1
----------------------------------------------------------------
Moody's Investors Service assigned a B1 first-time corporate
family rating (formerly senior implied rating) and SGL-2
speculative grade liquidity rating to Lionbridge Technologies,
Inc. and rated its proposed $125 million senior secured credit
facility B1 that will be utilized in the pending acquisition of a
much larger company, BGS Companies, Inc.

Moody's assigned these ratings:

   * Corporate family rating, B1

   * $25 million senior secured revolving credit facility
     due 2010, B1

   * $100 million senior secured term loan B due 2011, B1

   * Speculative grade liquidity rating, SGL-2

The ratings outlook is stable.

The ratings are subject to the review of the final executed
documents and the 2004 audited financial statements of BGS.

On June 27, 2005, Lionbridge entered into an agreement to acquire
BGS from Bowne & Co., Inc.  Under the terms of the agreement,
Lionbridge will pay $130 million in cash, up to 9.4 million shares
of its common stock and a potential subordinated note of up to $20
million.  Proceeds from the $100 million term loan, $2.5 million
of borrowings under a $25 million revolving credit facility plus
approximately $31 million of cash on hand are expected to be used
to fund the cash portion of the acquisition cost, including
related transaction fees.

The credit ratings reflect the risks related to significant
customer concentration, declining gross margins and low barriers
to entry.  The ratings also consider the leading market position
of the combined company, considerable potential cost savings and
expected continued growth in demand for outsourced globalization
services.  The ratings recognize the significant challenges facing
Lionbridge as it completes the global integration of BGS which is
1.5x times as large as Lionbridge based on LTM June 30, 2005
revenues and will comprise 60% of the combined company's sales.
Difficulties could include the loss of key clients (including the
risk that overlapping clients will diversify a portion of their
combined budget to other providers), loss of key personnel and the
integration of technology platforms.

Moody's views the combination of the two leading providers of
outsourced globalization services favorably as the transaction is
based on clearly defined cost synergies.  Management's plan
includes a significant reduction in fixed overhead costs
(targeting a reduction of up to 5% of the cost base), a
substantial portion of which is expected to be achieved within the
first year after the merger.  The company has identified
overlapping facilities and personnel in certain geographic
locations that will be consolidated.  The ratings, however,
recognize the risk that management may need to spend more time and
expense than expected to achieve targeted cost reductions and
expected cost reductions may not be fully realized.

Moody's expects continued growth in the market for outsourced
globalization services in the intermediate term reflecting
increased demand for global code and content and the continuing
consolidation in the high-tech sector.  High-tech consolidation
has led to increased outsourcing of non-core functions although
weakness in this sector has restrained spending.  The combined
company will be well positioned to compete based on its leading
market position (with an estimated market share of 5%-7% or about
3x larger than the nearest competitor), large scale, wide
geographic reach and longstanding relationships with many large
information technology clients.  On a combined basis, the company
will have:

   * over 3,600 full time employees,
   * 14,000 contract translators, and
   * 50 locations in 25 countries.

The company's performance, however, will continue to be impacted
by the highly fragmented nature of the industry and low barriers
to entry.  The company competes against a large number of
translation service providers, including numerous regional vendors
specializing in specific languages in various geographic areas, as
well as internal globalization departments of large companies.  
The company may also face increasing competition from offshore
competitors.  Intense competition, a shift in work mix and pricing
pressure have led to declining gross margins.  Lionbridge's gross
margin declined from 37% in 2003 to 34% in the last twelve month
period ending June 30, 2005.

The ratings are also constrained by:

   * customer concentration (with the top 3 customers representing
     over 30% of pro forma combined 2004 revenues);

   * technology risk;

   * significant foreign currency exposure (75% of BGS revenues
     are denominated in foreign currencies);  and

   * a limited track record of free cash flow from operations.

The stable ratings outlook anticipates flat to modest revenue
growth for the merged company during the next 12-18 months as the
merger integration is completed.  Moody's expects the company to
achieve sizeable cost reductions and significant improvements in
operating margins.  Operating margins for Lionbridge and BGS,
excluding merger and restructuring charges, were about 2% in the
twelve month period ending June 30, 2005.  

Moody's expects operating margins, excluding restructuring
charges, to increase to over 4% after first year cost reductions
are fully implemented resulting in Debt to EBITDA (as adjusted for
operating leases in accordance with Moody's Special Comment dated
March 2005) of about 4.5x and free cash flow to debt of over 10%.

The ratings could be upgraded if substantially all of management's
projected cost reductions are achieved within the context of
stable to growing revenues resulting in debt to EBITDA of less
than 3.5x and sustainable free cash flow to debt of over 12%.

The ratings could be downgraded if the company loses significant
clients after the merger or a substantial portion of anticipated
cost reductions are not achieved resulting in debt to EBITDA of
over 5 times and free cash flow to debt of under 8%.

The SGL-2 speculative grade liquidity rating reflects:

   * the good liquidity profile provided by significant cash
     balances;

   * solid availability under the proposed $25 million revolving
     credit facility (not rated by Moody's); and

   * ample cushion expected under the company's bank covenants.

Moody's expects cash flow from operations to be modest over the
next year due to significant spending needs associated with the
integration of BGS (estimated at $7-$10 million) and uncertainty
as to the timing of realization of cost reductions.  However, a
$20 million cash balance pro forma for the closing of the BGS
acquisition should amply cover expected capital expenditure
requirements of about $7 million and debt amortization
requirements of about $1 million.

Given the pro forma cash position of the company, Moody's expects
that the $25 million revolver will be sufficient to meet any short
term borrowing needs due to working capital swings, revenue
volatility based on timing of product release cycles by clients or
integration difficulties.  Pro forma for the acquisition at June
30, 2005, $2.5 million will be drawn under the revolver leaving
$21.0 million available for borrowings (net of letters of credit
of $1.5 million).

Moody's expects the company to have ample cushion under its bank
covenants for each of the next four quarters.  Covenants will
include maximum levels of total leverage, minimum fixed charge
coverage levels and maximum levels of capital expenditures.  The
SGL rating also recognizes limited alternative liquidity sources
as the company's significant assets are largely pledged to secure
the credit facility.

The B1 rating assigned to the proposed senior secured credit
facility reflects a first priority security interest in all
tangible and intangible assets of the company and its subsidiaries
and 100% of the capital stock of the company and its domestic
subsidiaries.  The credit facility is notched at the corporate
family rating level reflecting the preponderance of senior secured
debt in the capital structure.  The term loan B amortizes at a
rate of .25% a quarter with the balance payable at maturity.  The
credit facility has a cash flow sweep, initially set at 75%,
subject to a step down if the company achieves a specified decline
in its leverage ratio.

Lionbridge Technologies, Inc., headquartered in Waltham,
Massachusetts, is a leading provider of globalization and testing
services that enable clients to develop, release, manage and
maintain their enterprise content and technology applications
globally.  Revenue for the twelve-month period ended June 30,
2005, on a pro forma basis for the acquisition of BGS Companies,
Inc., would have been $388.5 million.


LIONBRIDGE TECH: S&P Rates Proposed $125 Million Loans at B
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to Lionbridge Technologies Inc.  At the same time,
Standard & Poor's assigned its 'B' bank loan rating and a recovery
rating of '4' to Lionbridge's proposed $125 million credit
facilities.  The recovery rating of '4' indicates an expectation
of marginal (25%-50%) recovery of principal in the event of a
payment default.

The proposed credit facilities consist of a $25 million revolving
credit facility due 2010 and a $100 million term loan B due 2011.
Proceeds from the transaction will be used to finance the
acquisition of BGS Companies Inc.  The outlook is stable.  Pro
forma for the debt offering, total debt outstanding was
$103.9 million as of June 30, 2005.

"The ratings reflect Lionbridge's significant integration risk
associated with the acquisition of much-larger BGS, sector and
customer concentration risk, a small EBITDA base, thin margins,
and the competitive market for globalization services," said
Standard & Poor's credit analyst Andy Liu.  These factors are only
partially offset by Lionbridge's leading market share in the
sector and its cost and scale advantages over competitors.

Lionbridge provides globalization and testing services to
businesses, particularly in the technology industry.  
Globalization services enable the translation of content and
product information to meet the language, technical, and culture
requirements of users.  BGS was the largest competitor to
Lionbridge.

Integration of BGS represents the most significant challenge for
the company over the intermediate term.  While both companies
serve the same markets and often the same customers, effective
integration will be a major risk.  Lionbridge will need to reduce
duplicative functions and consolidate excess facilities with
little impact on customer service and revenue generation to
achieve its 2005 projections.  Inability to reduce cost and
increase EBITDA could lead to a narrowing cushion of compliance
with bank covenants and strain liquidity, especially when the
covenants are scheduled to step down in mid-2006.


MEDICAL ACADEMIC: S&P Upgrades Rating on Revenue Bonds to BB+
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating to 'BB+' from
'BB' on Massachusetts Health and Educational Facilities
Authority's series 1995A revenue bonds, issued for Medical,
Academic, and Scientific Community Organization, Massachusetts.
The outlook is positive.

The 'BB+' rating reflects the 'BBB-' rating on CareGroup's debt
(originally sold for Beth Israel Deaconess Medical Center).

"The rating on MASCO's debt reflects a debt service reserve fund
makeup provision from a number of independently rated entities,"
said Standard & Poor's credit analyst Martin Arrick.

This provision becomes effective if MASCO is unable to make debt
service payments or fund the debt service reserve fund if it falls
below maximum annual debt service for any reason.

The following organizations are obligated through an irrevocable
contribution agreement to make up a pro rata share of any debt
service reserve fund deficiency:

    * Harvard University: 19.7% ('AAA'/Stable);

    * Children's Hospital: 19.7% ('AA'/Stable);

    * Brigham and Women's Hospital: 22.6% ('AA-'/Stable);

    * Dana-Farber Cancer Institute: 7.0% ('A'/Stable); and

    * Beth Israel Deaconess Medical Center (CareGroup): 31.0%
      ('BBB-'/Positive).

The rating on MASCO's debt reflects a several, not joint,
obligation and, using the weak-link theory, is based on the lowest
rating of the entities listed above.  Historically, the rating has
been one notch lower than the weakest rating, as MASCO's
obligation is not on parity with the guarantor institutions'
senior debt.

The positive outlook reflects the recent outlook revision on
CareGroup's debt to positive, combined with MASCO's history of
self-support, an adequate balance sheet, and a sound business
position as a provider of value-added services for a number of
nonprofit higher education and health care institutions.

The upgrade affects about $18.535 million of debt outstanding.


MERIDIAN AUTOMOTIVE: Court Approves Sidley Austin as Counsel
------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
May 17, 2005, Meridian Automotive Systems, Inc., and its debtor-
affiliates seek authority from the U.S. Bankruptcy Court for the
District of Delaware to employ Sidley Austin Brown & Wood, LLP, as
their general reorganization and bankruptcy counsel, nunc pro tunc
to April 26, 2005.

Mr. Newsted discloses that Sidley Austin received a $500,000
Retainer in connection with preparing for the filing of the
Debtors' Chapter 11 cases and for its proposed postpetition
representation of the Debtors.  In addition to the Retainer, the
firm received $945,936 in fees and $25,126 in expenses from the
Debtors on account of legal services rendered in connection with
the filing of their Chapter 11 cases.

                         Court's Ruling

Judge Walrath directs Sidley Austin Brown & Wood, LLP, to
allocate and apply $241,319 of its $500,000 retainer in reduction
of the firm's accrued prepetition fees and expenses.  The firm is
directed to apply the $258,681 balance against accrued
postpetition fees and expenses.

Sidney Austin will not receive additional payments from the
Debtors in respect of postpetition fees and expenses until the
time as the Retainer has been exhausted.

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).


MERIDIAN AUTOMOTIVE: Gets Court Nod to Employ FTI Consulting
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave
authority to Meridian Automotive Systems, Inc. and its debtor-
affiliates to employ FTI Consulting, Inc., to provide certain
officers and temporary staff to assist them in their restructuring
efforts.

As previously reported in the Troubled Company Reporter on
May 25, 2005, pursuant to an engagement letter dated May 6, 2005,
Jeffery J. Stegenga, Senior Managing Director at FTI Consulting's
Corporate Finance/Restructuring Division, will serve as the
Debtors' Chief Restructuring Officer.  John A. Koskiewicz,
Managing Director at FTI Consulting, will act as the Debtors'
Chief Financial Officer.

Messrs. Stegenga and Koskiewicz will assist the Debtors in their
operations and manage the Debtors' restructuring efforts.  This
includes negotiating with parties-in-interest and coordinating the
"working group" of the Debtors' employees and external
professionals who are assisting the Debtors in their restructuring
efforts.

Jeffery J. Stegenga, the Debtors' Chief Restructuring Officer and
John A. Koskiewicz, the Debtors' Chief Financial Officer, will
both be paid $140,000 as monthly compensation for their services
without further Court order.  However, if the Officers' actual
quarterly fees are less than $420,000, FTI Consulting, Inc., will
only be entitled to payment of the lower amount from the Debtors.  
The difference from fees already paid in that quarter will be
deducted from future payments to be made to the firm.

Parties-in-interest may object to a quarterly fee within 20 days
of the filing of the quarterly statement.

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)


MERIDIAN AUTOMOTIVE: No Evergreen Retainer for Young Conaway
------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
June 2, 2005, the Honorable Judge Eugene Walrath authorizes
Meridian Automotive Systems, Inc., and its debtor-affiliates to
employ Young Conaway as bankruptcy co-counsel, nunc pro tunc, to
the April 26, 2005.

                    U.S. Trustee's Objection

Kelly Beaudin Stapleton, the United States Trustee for Region 3,
objects to the Debtors' application to the extent that Young
Conaway Stargatt & Taylor LLP is permitted to hold the unused
portion of its prepetition security retainer until the conclusion
of the Debtors' Chapter 11 cases as security in the event the
Debtors are unable to pay for its services.

                         Court's Ruling

Judge Walrath directs Young Conaway Stargatt & Taylor, LLP, to
apply its $250,000 retainer against accrued postpetition fees and
expenses.  The firm will not receive additional payments from the
Debtors in respect of postpetition fee and expenses until the
time as the Retainer has been exhausted.

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).


MERRILL LYNCH: S&P Lifts Rating on Class F Certificates to BB+
--------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on five
classes of Merrill Lynch Financial Assets Inc.'s commercial
mortgage pass-through certificates series 2002-Canada7.  At the
same time, ratings are affirmed on six other classes from the same
series.

The rating actions reflect credit enhancement levels that
adequately support the raised and affirmed ratings, as well as the
improved operating performance of the mortgage loan pool.

As of July 12, 2005, the trust collateral consisted of 49 loans
with an aggregate outstanding principal balance of C$264.0
million, down from C$280.7 million at issuance.  The master
servicer, GMAC Commercial Mortgage Corp., provided full-year 2003
or partial-year 2004 net cash flow debt service coverage (DSC)
figures for 99% of the pool.  Based on this information, Standard
& Poor's calculated a weighted average DSC of 1.54x, up from 1.40x
at issuance.  The pool has experienced no losses to date. There
are no delinquent loans within the pool.

The top 10 loans by exposure have an aggregate outstanding balance
of C$159.6 million (60.5% of the pool).  This includes the largest
loan, which consists of five cross-collateralized loans.  The top
10 loans reported a weighted average DSC of 1.55x, up from 1.38x
at issuance.  Standard & Poor's reviewed recent property
inspections provided by GMACCM for assets underlying the top 10
loans, and all such assets were characterized as "excellent" or
"good."

GMACCM reports that there are six loans on its watchlist (C$20.5
million, 7.8% of the pool).  All are on the watchlist due to a
decrease in cash flow performance.

The pool has property type concentrations in excess of 10% in:

    * retail (47%),
    * industrial (16%),
    * office (16%), and
    * multifamily (16%).

In addition, the pool has significant concentrations in:

    * Ontario (50%),
    * Quebec (26%), and
    * Alberta (12%).

Based on discussions with the servicer, Standard & Poor's stressed
various loans in the mortgage pool as part of its analysis.  The
resultant credit enhancement levels adequately support the raised
and affirmed ratings.
   

                           Ratings Raised
   
                 Merrill Lynch Financial Assets Inc.
      Commercial mortgage pass-thru certs series 2002-Canada7
   
                          Rating
                          ------
              Class   To          From   Credit support(%)
              -----   --          ----   ----------------
              B       AA+         AA                14.90
              C       A+          A                 11.46
              D       BBB+        BBB                7.44
              E       BBB         BBB-               6.38
              F       BB+         BB                 4.25
   

                         Ratings Affirmed
   
                 Merrill Lynch Financial Assets Inc.
      Commercial mortgage pass-thru certs series 2002-Canada7
   
                  Class   Rating   Credit support(%)
                  -----   ------   ----------------
                  A-1     AAA                 17.82
                  A-2     AAA                 17.82
                  G       BB-                  3.46
                  H       B                    2.13
                  J       B-                   1.60
                  X       AAA                   N/A
   
                       N/A - Not applicable.


METRIS COS: HSBC Finance to Acquire Company for $1.59 Billion
-------------------------------------------------------------
HSBC Finance Corporation and Metris Companies Inc. (NYSE: MXT)
entered into a definitive agreement for HSBC Finance to acquire
Metris in an all-cash transaction which values Metris at
$1.594 billion.  Upon completion, Metris will become a wholly
owned subsidiary of HSBC Finance.

HSBC Finance, headquartered in Prospect Heights, Illinois, through
its subsidiaries and affiliates, is the sixth largest issuer of
MasterCard and Visa cards in the nation.  Metris, with
headquarters in Minnetonka, Minnesota and offices in five states,
is the 11th largest issuer of MasterCard and Visa cards in the
United States with managed receivables of approximately
$5.9 billion.  Metris primarily serves the near-prime credit card
market through direct mail and partnership affiliations.

"HSBC Finance is a major provider of near-prime consumer finance
credit in the United States and this acquisition deepens our
capabilities to serve the full spectrum of credit card customers,"
said Bobby Mehta, Chairman and CEO of HSBC Finance Corporation.
"We are very familiar with Metris and its management team and look
forward to the integration of their business within HSBC."

Metris was formed in 1994 and became a public company in 1996.  
The company issues credit cards through Direct Merchants Credit
Card Bank, N.A., a wholly owned subsidiary headquartered in
Phoenix, Arizona.

"Being part of a world-class organization such as HSBC is a
logical step following our successful turnaround of the business,"
said David Wesselink, Chairman and CEO of Metris. "HSBC and Metris
will make a terrific combination, continuing to serve the needs of
our customers."

                  Terms of the Agreement

Under the terms of the merger agreement, Metris common
stockholders will be entitled to receive $15.00 for each share of
Metris common stock for a transaction that closes on or before
Dec. 9, 2005.  After Dec. 9, 2005, the price per common share to
the common stockholders will decrease by an amount based on the
pay-in-kind dividends that accumulate on Metris' Series C
Preferred Stock, in accordance with its terms.  For illustrative
purposes only, if the closing was on March 31, 2006 (the latest
date on which closing could occur under the terms of the
contract), the common stockholders would receive $14.82 per share.
The transaction is currently anticipated to close in the fourth
quarter of 2005.

The Board of Directors of Metris has unanimously approved the
transaction, as has the Board of Directors for HSBC Finance.

As part of the total consideration, the Preferred Stock held by
Thomas H. Lee Partners, L.P. will receive, in accordance with its
terms, approximately $682.6 million if the transaction closes on
or before December 9, 2005.  Subsequent to December 9, 2005, the
amount payable on the Preferred Stock will be increased based on
the pay-in-kind dividends that accrue on the Preferred Stock in
accordance with its terms.  The holders have given an irrevocable
proxy to HSBC Finance to vote in favor of the transaction.  These
shares represent approximately 44 percent of the voting rights of
Metris stockholders.  Total consideration payable to common
stockholders, on or before December 9, 2005, is approximately
$911.1 million.

The acquisition is subject to certain conditions including
resolution of the potential civil enforcement action of the
Securities and Exchange Commission against Metris as described in
Metris' Form 8-K dated July 12, 2005, approval by the stockholders
of Metris and various regulatory consents.

HSBC Finance is a subsidiary of HSBC North America Holdings Inc.,
one of the top 10 financial organizations in the United States
with assets totaling more than $300 billion.  Both companies are
wholly-owned subsidiaries of HSBC Holdings plc which is
headquartered in London and is the holding company of the HSBC
Group, one of the largest banking and financial services
organizations in the world, with well established businesses in
Europe, the Asia-Pacific region, the Americas, the Middle East and
Africa.

As of June 30, 2005, the HSBC Group had total assets of $1.467
trillion.  HSBC is listed on the London, New York, Hong Kong,
Paris and Bermuda stock exchanges.

Goldman, Sachs & Co. acted as the lead financial advisor to
Metris. UBS Securities LLC was also a financial advisor to Metris.
HSBC Securities (USA) Inc. acted as financial advisor to HSBC
Finance.

HSBC Finance Corporation subsidiaries primarily provide middle-
market consumers with real estate secured loans, auto finance
loans, MasterCard and Visa credit cards, private label credit
cards, personal loans, tax refund anticipation loans and specialty
insurance products.

HSBC - North America -- http://www.hsbcusa.com/-- comprises all  
of HSBC's US and Canadian businesses, including the former
Household International businesses.  The company's businesses
serve more than 60 million customers in five key areas: personal
financial services, consumer finance, commercial banking, private
banking and corporate, investment banking and markets.  Financial
products and services are offered under the HSBC, HFC and
Beneficial brands.

HSBC Holdings plc serves more than 110 million customers worldwide
through more than 9,700 offices in 77 countries and territories in
Europe, the Asia-Pacific region, the Americas, the Middle East and
Africa.  With assets of US$1,467 billion at June 30, 2005, HSBC is
one of the world's largest banking and financial services
organisations.  HSBC is marketed worldwide as 'the world's local
bank.'

Metris Companies Inc. (NYSE:MXT), based in Minnetonka, Minnesota,
is one of the largest bankcard issuers in the United States.  The
Company issues credit cards through Direct Merchants Credit Card
Bank, N.A., a wholly owned subsidiary in Phoenix, Arizona.

                           *     *     *

Standard & Poor's Ratings Services placed its ratings on Metris
Cos. Inc. (Metris; NYSE: MXT) and its subsidiaries, including its
'B' long-term counterparty credit rating on Metris, on CreditWatch
with positive implications.


METRIS COMPANIES: Moody's Reviews Ratings for Possible Upgrade
--------------------------------------------------------------
Moody's Investors Service put on review for possible upgrade the
ratings of Metris Companies, Inc. (senior unsecured at B3) and its
bank subsidiary Direct Merchants Credit Card Bank NA (issuer at
Ba3).  The rating action was in response to the announcement that
Metris has agreed to be acquired by HSBC Finance Corporation
(senior unsecured at A1) in an all-cash transaction valued at $1.6
billion.  The ratings of HSBC Finance Corporation were affirmed;
the outlook remains positive.

Moody's said the review of Metris' ratings reflects the potential
benefits the acquisition would provide to Metris' creditors from
HSBC Finance's substantially larger and more diversified earnings
base as well as its stronger funding profile.  The review will
focus on the structure of the transaction and the extent to which
Metris' liabilities will be assumed by, and its operations will be
integrated with, HSBC Finance.

The affirmation of the ratings of HSBC Finance reflects the small
scale of the Metris acquisition relative to HSBC Finance's $147
billion of managed assets and the company's long-standing
expertise within credit cards and the sub- and near-prime consumer
finance customer segments.  Moody's noted that it expects that
HSBC Finance will continue to allocate appropriate levels of
capital to its businesses as its balance sheet composition
continues to evolve.

These ratings were placed on review for possible upgrade:

Metris Companies Inc.:

   * senior unsecured debt rating of B3;
   * senior unsecured shelf rating of P(B3);
   * subordinated shelf rating of P(Caa1); and
   * preferred stock shelf rating of P(Caa2).

Direct Merchants Credit Card Bank, N.A.:

   * the rating of the bank for long-term deposits of Ba2;
   
   * the issuer rating and rating for other senior long-term
     obligations of Ba3; and
   
   * the bank financial strength rating of D.

Metris Companies Inc., headquartered in Minnetonka, Minnesota, is
the thirteenth largest general purpose credit card issuer in U.S.
and had total managed receivables of $5.9 billion as of June 30,
2005.

HSBC Finance Corporation is a consumer finance company that offers
a range of retail financial products, including:

   * real-estate secured loans,
   * credit cards,
   * auto loans,
   * unsecured personal loans, and
   * credit-related insurance products.

As of June 30, 2005, the company had managed assets of almost $147
billion and common equity of $16.8 billion.  HSBC Finance is an
indirect subsidiary of UK-based HSBC Holdings PLC, a global
financial services firm with global assets of almost $1.5
trillion.


METRIS COMPANIES: HSBC Finance Sale Prompts S&P's Positive Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Metris
Cos. Inc. (Metris; NYSE: MXT) and its subsidiaries, including its
'B' long-term counterparty credit rating on Metris, on CreditWatch
with positive implications.

"The CreditWatch listing follows the announcement that Metris has
agreed to be acquired by HSBC Finance Corp. (HSBC Finance,
A/Stable/A-1)," said Standard & Poor's credit analyst Jeffrey
Zaun.

Minnetonka, Minnesota-based Metris is a monoline credit card
company with $1.3 billion in on-balance-sheet assets and $5.9
billion in managed receivables.

While the firm's performance has improved, Standard & Poor's view
with regard to Metris has been tempered by asset quality levels
that remain below those of its peers in the credit card industry
and funding costs that have remained high because of the firm's
recent troubles.  The sale to HSBC Finance will enhance Metris'
funding profile by improving pricing and offering alternatives to
asset-backed securitization markets.  At the close of the proposed
transaction, the ratings on Metris will likely be equalized with
those of HSBC Finance.


METRIS COMPANIES: Fitch Places B- Rating on Senior Unsecured Debt
-----------------------------------------------------------------
Fitch Ratings affirmed HSBC Finance Corporation's ratings and
placed Metris Companies Inc.'s ratings on Rating Watch Positive.  
HSBC Finance operates as an indirect wholly-owned subsidiary of
HSBC Holdings plc.

Fitch currently rates HSBC 'F1+/AA'.  A complete list of HSBC
Finance's and Metris ratings is detailed at the end of this
release.  Approximately $115 billion of HSBC debt and $78 million
of Metris debt is affected by this action.

HSBC Finance announced today the acquisition of Metris in a cash
transaction totaling approximately $1.6 billion.  Fitch believes
this acquisition complements HSBC Finance's existing credit card
business by providing additional scale in the rapidly
consolidating U.S. credit card segment.  

Moreover, Fitch believes the continuing improvement in the Metris
credit card portfolio mitigates concerns surrounding the relative
difference between Metris and HSBC Finance's general purpose
credit cards.  For Metris, the acquisition addresses the company's
relative funding disadvantage as well as the intensifying
competitive environment for credit card issuers.  HSBC may also
realize ancillary benefits such as additional cross-sell
opportunities with the addition of the Metris customer base.

Fitch expects HSBC to receive an equity infusion to fund this
transaction.  Capital infusion further demonstrates the linkage
between HSBC and HSBC Finance.  Fitch expects that following this
equity issuance, HSBC Finance capital ratios will be unchanged
post acquisition.  Fitch expects to equalize the ratings of Metris
to HSBC Finance and withdraw them when the transaction closes in
the fourth quarter of 2005.

Fitch has placed these ratings on Rating Watch Positive:

   Metris Companies Inc.

     -- Senior unsecured debt 'B-';

   Direct Merchants Credit Card Bank N.A.

     -- Long-term 'B';
     -- Short-term 'B'.

   Fitch affirms these ratings with a Stable Outlook:

   HSBC Finance Corporation

     -- Senior debt 'AA-';
     -- Preferred stock 'A+';
     -- Individual 'B/C';
     -- Commercial paper 'F1+';
     -- Support '1'.

   Household Capital Trust I, III, VI and VII

     -- Preferred stock 'A+'.

   Household Bank (Nevada) N.A.

     -- Senior debt 'AA-';
     -- Short-term debt 'F1+';
     -- Individual 'B/C';
     -- Support '1'.

   Household Bank International Netherlands BV

     -- Senior notes 'AA-'.

   HSBC Financial Corporation Limited (Previously - Household
   Financial Corp., Ltd.)

     -- Senior debt 'AA-';
     -- Senior debt shelf 'AA-'.

   HFC Bank Ltd

     -- Euro medium-term notes 'AA-';
     -- Guaranteed deposit programme: long-term 'AA-';
     -- Guaranteed deposit short-term programme 'F1+';
     -- Individual 'B';
     -- Support '1'


MICHAELS STORES: S&P Withdraws BB+ Rating at Company's Request
--------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its BB+/Stable/--
corporate credit rating on Michaels Stores Inc. at the request of
the company.

Michaels Stores, Inc. -- http://www.michaels.com/-- is the  
world's largest specialty retailer of arts, crafts, framing,
floral, wall d,cor, and seasonal merchandise for the hobbyist and
do-it-yourself home decorator.  As of August 3, 2005, the Company
owns and operates 870 Michaels stores in 48 states and Canada, 165
Aaron Brothers stores, 11 Recollections stores, and four Star
Wholesale operations.  Michael's balance sheet dated April 30,
2005, showed $2.1 billion in assets and $800 million in
liabilities.  Michaels Stores, Inc. (NYSE: MIK) reported $745.5
million in total sales for the second quarter of fiscal 2005 -- a
9.2% increase over last year.  Same-store sales for the quarter
increased 4.2% on a 2.4% increase in average ticket, a 1.4%
increase in transactions, and a 0.4% increase in custom frame
deliveries.  


MILLENNIUM CHEMICAL: S&P Rates Proposed $250 Mil. Sr. Loan at BB
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' rating and a
recovery rating of '1' to Millennium America Inc.'s and Millennium
Inorganic Chemicals Ltd.'s proposed $250 million senior credit
facilities, consisting of a $100 million term loan facility and a
$150 million revolving credit facility, both due 2010.

The 'BB' rating is a notch higher than the corporate credit
rating; this and the '1' recovery rating reflect the expectation
for a full recovery of principal in the event of default.

Millennium America and Millennium Inorganic Chemicals are
subsidiaries of Millennium Chemicals Inc.  Standard & Poor's also
affirmed its ratings on Millennium Chemicals (BB-/Positive/--) and
Millennium America.  The outlook is positive.

"The ratings recognize Millennium Chemicals' business position as
a well-established producer of commodity chemicals, the credit
strength of its larger parent, Lyondell Chemical Co., and the
risks associated with an aggressive capital structure and
operating results that vary widely over the course of the business
cycle," said Standard & Poor's credit analyst Kyle Loughlin.
"These risks are mitigated somewhat by financial policies that
emphasize debt reduction as business conditions improve and the
preservation of sufficient liquidity at all points in the business
cycle."

Millennium is a $1.9 billion diversified commodity chemicals
company.  The majority of sales, nearly 70%, are generated from
the company's position as the second-largest producer of titanium
dioxide (TiO2), a white pigment used in paper, plastics, and
coatings, but Millennium also has a position in the global acetyls
market, and a niche terpene-based flavors and fragrance chemicals
business.  In addition, Millennium owns a 29.5% stake in Equistar
Chemicals L.P., a $9 billion petrochemical producer.

Millennium's credit quality is supported by management's
commitment to restore the financial profile to a level consistent
with the current ratings and by satisfactory sources of liquidity.
The direction of credit quality also takes into account the
ratings of Lyondell Chemical, following Lyondell's acquisition of
Millennium in November 2004.  Lyondell's debt reduction plans,
together with a recovery within its key business units, could
support a slightly higher rating.  To achieve higher ratings,
however, considerable progress will have to be made toward the
company's debt reduction goals in advance of the next industry
downturn.  Adverse developments, with respect to raw-material
price trends or the supply and demand balance in key product
lines, will remain risks given Lyondell's still-significant debt
burden, but should be manageable with prudent liquidity
management.


MIRANT CORP: MAGi Panel Wants Court Order on Document Production
----------------------------------------------------------------
In March 2005, the Official Committee of Unsecured Creditors of
Mirant Americas Generation, LLC, asked Mirant Corporation and its
debtor-affiliates for information relating to allegations in the
Debtors' Disclosure Statement that were most critical to MAGi
creditors.

Specifically, the information requested included the analysis
relied upon for the assertions in the Disclosure Statement
regarding substantive consolidation, the "global settlement" of
intercompany claims, and the amounts of claims asserted against
the Debtors.

The MAGi Committee determined it was necessary to seek the
information through discovery because the Debtors' Disclosure
Statement is lacking on those critical issues.  To have a
benchmark by which to evaluate the sufficiency of the information
being provided to creditors, the MAGi Committee sought those
documents.

Deborah D. Williamson, Esq., at Cox Smith Matthews Incorporated,
in San Antonio, Texas, relates that for the past three months,
the Debtors have failed to respond to the Document Requests with
any meaningful or substantive material.  "Instead, as has been
consistent with the Debtors' discovery practices in other
disputes, the MAGi Committee received a haphazard smattering of
documents, including credit agreements, organizational documents,
and SEC filings.  Many of these documents are public or were
previously provided to the MAGi Committee."

The Debtors, Ms. Williamson notes, also included two privilege
logs so general in nature that they did not even identify whether
the individuals named were counsel or client, and most of the
documents listed had no author or recipient.

According to Ms. Williamson, the MAGi Committee has not found any
material substantiating many of the key assertions in the
disclosure statement, including:

    -- analyses of the treatment of creditors under the Debtors'
       proposed temporary consolidation; or

    -- information on how the Debtors are valuing the myriad of
       intercompany claims to be "resolved" under their plan of
       reorganization.

"The Debtors' only response to attempt to justify their
incomplete production is that the material the [MAGi] Committee
seeks relates to confirmation issues, and not to the Debtors'
disclosure statement," Ms. Williamson tells the Court.

After repeated attempts to resolve the sufficiency of the
Debtors' production, the MAGi Committee has concluded that the
Debtors do not intend to provide creditors with the information
they require to evaluate the sufficiency of the Disclosure
Statement.

Therefore, the MAGi Committee asks Judge Lynn to compel the
Debtors to respond to the Document Requests.

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)


MMM HOLDINGS: Moody's Assigns B2 Corporate Family Rating
--------------------------------------------------------
Moody's Investors Service has assigned a B2 corporate family
rating to MMM Holdings, Inc.'s.  Previously the rating agency had
assigned a provisional (P)B2 senior debt rating to MMM and NAMM
Holdings, Inc.'s proposed $420 million senior secured bank credit
facility.  The outlook on all the ratings is stable.

Moody's B2 corporate family rating is based on the consolidated
results of MMM and NAMM and reflect the companies' highly
leveraged capital structure, including:

   * the large amount of goodwill;

   * the company's short operating history;

   * limited product offering;

   * geographic area; and

   * the uncertainty which surrounds the future financial
     prospects of the Medicare program.

Although the companies comply with the regulatory capital
requirements of each jurisdiction in which they operate, Moody's
believes that the targeted consolidated capital adequacy on an
NAIC risk-based capital basis is relatively weak at 50% of company
action level.

As of May 31, 2005 MMM Healthcare reported approximately $53
million in equity on a GAAP basis and membership of 92,400.  For
the five month period ending May 31, 2005 total revenue was $241
million.  NAMM reported GAAP equity of approximately $40 million
and membership of 240,000 as of May 31, 2005.  Total revenue for
the first five months of 2005 was approximately $129 million.

Moody's corporate family rating is an opinion of a corporate
family's ability to honor all of its financial obligations and is
assigned to a corporate family as if it had a single class of debt
and a single consolidated legal entity structure.


MORGAN STANLEY: S&P Upgrades Rating on Class F Certificates
-----------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on three
classes of Morgan Stanley Capital I Inc.'s commercial mortgage
pass-through certificates from series 1998-WF1.  At the same time,
ratings are affirmed on seven other classes from the same series.

The rating actions reflect credit enhancement levels that
adequately support the raised and affirmed ratings.

As of July 15, 2005, the trust collateral consisted of 220 loans
with an aggregate outstanding principal balance of $882.9 million,
down from 306 loans with a balance of $1.392 billion at issuance.
The master servicer, Wells Fargo Bank N.A., provided full-year
2003 (9.5%), partial-year 2004 (1.0%), or full-year 2004 (86.5%)
net cash flow debt service coverage for the pool.  Based on this
information, Standard & Poor's calculated a weighted average DSC
of 1.51x, slightly down from 1.54x at issuance.  There are five
loans that are specially serviced, and four of the five loans are
delinquent.

The top 10 loans by exposure have an aggregate outstanding balance
of $250.4 million (28.36% of the pool).  The top 10 loans reported
a weighted average DSC of 1.36x, down from 1.51x at issuance.
Standard & Poor's reviewed recent property inspections provided by
Wells Fargo for assets underlying the top 10 loans, and all were
characterized as "excellent" or "good."  None of the top 10 loans
are currently in special servicing.  However, the largest and
seventh largest loans are on the servicer's watchlist and are
discussed below.

Currently there are four loans with the special servicer, CRIIMI
MAE Services L.P., with an aggregate balance of $19.0 million
(2.2%).  The largest loan in special servicing is the Waterford at
Clear Lake loan ($10.5 million, 1.2%), which is secured by a 400-
unit garden-style apartment complex in Webster, Texas.  The
property was transferred due to monetary default and is currently
REO. The DSC as of Dec. 31, 2004 for the property was 0.34x.  The
second largest loan with CRIIMI MAE is the Ramada Hilltop loan
($4.1 million, 0.5%), which is secured by a 162-unit lodging
facility in Natchez, Mississippi.  The property was transferred
due to monetary default and is currently REO.  The property's
occupancy at June 30, 2005, was 41%.  The third property with the
special servicer, the Council Rock Greens Office Complex ($2.5
million, 0.3%), is secured by a 33,831-sq.-ft. office building in
Rochester, New York.  A purchase offer has been accepted on the
property, which suggests a substantial loss.  The last loan with
CRIIMI MAE is the Anchorage Motor Inn ($1.9 million, 0.2%), which
is secured by an 89-unit lodging facility in South Burlington,
Vermont.  The loan was transferred to special servicing due to
monetary default.  A foreclosure motion with appointment of
receiver has been filed.  The DSC as of Dec. 31, 2003, for the
property was 1.15x.

Wells Fargo reports 36 loans with an aggregate outstanding balance
of $176.3 million (20.0%) on its watchlist.  Of note is the
largest loan in the pool, the Scottsdale Plaza Resort ($52.7
million, 6.0%), which is secured by a 404-unit lodging facility
located in Scottsdale, Arizona.  This property appears on the
watchlist because of low net cash flow, which is the result of low
occupancy.  There has also been an increase in competition in the
area over the past few years.  The DSC was 0.39x for full-year
2003 and 0.40x for full-year 2002.  The Dec. 31, 2004 OSAR
(operating statement analysis report) was not available at the
time of this review, but a statement supplied by the borrower for
the full-year 2004 did not suggest an improvement.  The DSC as of
Dec. 31, 2003, for the property was 0.39x.  Also of note is the
seventh largest loan, the Radisson Hotel/Pittsburgh Expomart
($15.3 million, 1.7%), which is secured by a 322-unit lodging
facility in Monroeville, Pennsylvania.  The property suffers from
a low DSC due to a drop in room and showroom revenue.  As of Dec.
31, 2004, the DSC for the property was 0.88x.

The pool has property type concentrations in excess of 10% in
retail (28.6%), multifamily (27.1%), lodging (16.8%), and office
(13.8%).  In addition, the pool has a significant geographic
concentration in California (33.5%).

Based on discussions with the master and special servicer,
Standard & Poor's stressed various loans in the mortgage pool as
part of its analysis.  The resultant credit enhancement levels
adequately support the raised and affirmed ratings.
   
                          Ratings Raised
   
                   Morgan Stanley Capital I Inc.
         Commercial mortgage pass-thru certs series 1998-WF1

                         Rating
                         ------
             Class   To          From   Credit support(%)
             -----   --          ----   ----------------
             C       AAA         AA-               26.25
             D       A+          BBB+              18.36
             F       BBB         BB+               12.05

   
                        Ratings Affirmed
   
                   Morgan Stanley Capital I Inc.
         Commercial mortgage pass-thru certs series 1998-WF1

                 Class   Rating   Credit support(%)
                 -----   ------   ----------------
                 A-2     AAA                 42.02
                 B       AAA                 34.13
                 G       BB                   7.72
                 H       BB-                  6.54
                 J       B                    3.38
                 K       B-                   2.20
                 X-1     AAA                  N.A.
   
                      N.A. - Not applicable


MORGAN STANLEY: Fitch Affirms Junk Rating on $2.1 Million Certs.
----------------------------------------------------------------
Morgan Stanley Capital I Inc.'s commercial mortgage pass-through
certificates, series 1999-LIFE 1, are affirmed by Fitch Ratings:

     -- $32.3 million class A-1 at 'AAA';
     -- $399 million class A-2 at 'AAA';
     -- Interest-only class X at 'AAA';
     -- $20.8 million class B at 'AA+';
     -- $23.8 million class C at 'A+';
     -- $8.9 million class D at 'A';
     -- $13.4 million class E at 'BBB+';
     -- $7.4 million class F at 'BBB';
     -- $1.5 million class G at 'BBB-';
     -- $10.4 million class H at 'BB+';
     -- $7.4 million class J at 'BB';
     -- $4.5 million class K at 'BB-';
     -- $5.9 million class L at 'B+';
     -- $4.5 million class M at 'B';
     -- $5.3 million class N at 'B-'.

The $2.1 million class O remains 'CC'.  Fitch does not rate the
$4.5 million class P certificates.

The rating affirmations reflect the continued loan performance and
scheduled amortization since Fitch's last rating action.  As of
the July 2005 distribution date, the pool's collateral balance has
been reduced 7.1% to $551.7 million from $594 million at issuance.

There is one loan (1.7%) in special servicing.  The loan is
secured by three industrial buildings in Warren, MI and is
currently in foreclosure.  The loan transferred to special
servicing as a result of a major tenant filing involuntary
bankruptcy.  Currently, two of the properties are vacant and the
third is 100% occupied. Losses are expected upon liquidation of
this loan.

Fitch reviewed the credit assessment of the Edens & Avant loan
portfolio (15.1%).  Based on the loan's stable to improved
performance, maintains an investment-grade credit assessment.

The Edens & Avant portfolio is secured by 21 retail properties,
anchored mostly by grocery and drug stores.  The stressed DSCR for
YE 2004 was 1.83 times (x), compared with 1.35x at issuance and
occupancy remained strong at 90%.

The DSCR is calculated using borrower-provided net operating
income less required reserves divided by debt service payments
based on the current balance using a Fitch-stressed refinance
constant.

Fitch will continue to monitor this transaction, as surveillance
is ongoing.


N-45 FIRST: S&P Lifts Rating on Three Certificate Classes
---------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on five
classes from N-45 First CMBS Issuer Corp.'s series 1999-1.
Concurrently, the 'AAA' ratings on the remaining classes from the
same transaction are affirmed.

The rating actions reflect credit enhancement levels that
adequately support the raised and affirmed ratings. They also
reflect the stable operating performance of the mortgage loan
pool.

As of July 15, 2005, the trust collateral consisted of 13 fixed-
rate mortgage loans with an aggregate outstanding principal
balance of C$26.2 million, down from 100 loans with a balance of
C$254.1 million at issuance.  The master servicer, Gespa CDPQ,
provided trailing 12-month 2004 or 2005 net cash flow debt service
coverage (DSC) figures for 100% of the pool.  Based on this
information, Standard & Poor's calculated a weighted average DSC
of 1.86x, up from 1.51x at issuance.  There are no delinquent
loans in the pool.  There are no loans with the special servicer,
and none are on the watchlist.  The pool has experienced no losses
to date.

The loans are secured by 13 properties in Quebec.  Retail (18.2%)
is the only property type with a concentration greater than 10%.
   

                            Ratings Raised
   
                      N-45 First CMBS Issuer Corp.
         Commercial mortgage pass-through certs series 1999-1

                            Rating
                            ------
                 Class    To      From   Credit support(%)
                 -----    --      ----   ----------------
                 E        AAA     AA+                 38.85
                 F        AAA     AA                  29.14
                 G        BBB     BB                   9.72
                 H        BB+     B+                   7.29
                 J        BB+     CCC                  4.86

   
                           Ratings Affirmed
   
                      N-45 First CMBS Issuer Corp.
         Commercial mortgage pass-through certs series 1999-1

                 Class      Rating       Credit support(%)
                 -----      ------       ----------------
                 C          AAA                       97.13
                 D          AAA                       72.85
                 IO         AAA                        N/A
   
                         N/A - Not applicable.


NEW WORLD: June 28 Balance Sheet Upside-Down by $120.9 Million
--------------------------------------------------------------
New World Restaurant Group, Inc. (Pink Sheets: NWRG.PK) reported
strong improvements in comparable store sales, total revenues,
income from operations and cash flow from operations during the
second quarter of fiscal 2005.

Total revenues increased 3.1% to $97.1 million during the three
months ended June 28, 2005 from $94.2 million in the second
quarter of fiscal 2004.  Retail sales grew 4% to $91.1 million, or
93.8% of total revenues, from $87.6 million, or 93.0% of total
revenues, for the year earlier quarter.

Comparable store sales in company-owned restaurants grew by 6.3%
during the quarter over the corresponding quarter in 2004.  The
improvement reflected a 6.0% increase in average check size and a
0.3% gain in transactions -- the first year-over-year increase in
transactions in two years.

Gross profit margin increased to 19.7% of sales in the 2005
quarter from 17.3% in the corresponding 2004 quarter.  General and
administrative expenses increased 16.4% to $9.3 million, or 9.6%
of revenues, from $8.0 million, or 8.5% of revenues, a year
earlier.  Approximately $0.7 million of the increase in G&A
expenses was due to higher bonuses payable due to improved
operating performance.  Depreciation and amortization expense,
which is included in income from operations, was essentially
unchanged at $7.1 million.

Income from operations for the second quarter was $1.4 million,
compared to a loss of $200,000 in the corresponding 2004 quarter.
Results in the 2005 quarter reflected impairment charges of
approximately $1.2 million associated with the company's
Chesapeake Bagel Bakery trademarks, as well as a $200,000 loss on
the sale, disposal or abandonment of assets.  The operating loss
in the 2004 quarter reflected a $1.5 million loss on the sale,
disposal or abandonment of assets.

New World's operations generated net cash from operations of
$8.1 million during the first six months of 2005, compared to net
cash of $5.4 million a year earlier.  Through the first six months
of 2005, the company invested approximately $4.0 million in
property and equipment for its restaurants, while also making a
$10.4 million semi-annual interest payment on its $160 million
notes. New World realized a $4.1 million net increase in cash for
the year.  At quarter's end, the company had $13.8 million in cash
and cash equivalents, compared with $10.3 million a year ago.
Additionally, New World generated approximately $14.4 million of
cash from operations in the second quarter of fiscal 2005, a $4.7
million increase over the comparable quarter in 2004.

"We are very pleased to report another quarter of improved retail
sales and operating results," said Paul Murphy, New World CEO.
"The move towards positive transactions at our company operated
restaurants began in the third quarter of 2004, and has now
culminated in real increases in customer traffic in this quarter.
Our improvements in comparable store sales began in the second
quarter of fiscal 2004, and have now continued for five
consecutive quarters.  For the second quarter of fiscal 2005, our
gains were attained during both the breakfast and lunch day-parts,
demonstrating that the initiatives to improve the performance of
our company-operated restaurants are resonating with consumers.

"The strong increase in comparable store sales is the result of a
planned shift in product mix to higher priced items, the
introduction of new menu items as well as improvements in
restaurant operations, including initiatives to enhance customer
service and store appearance," he continued. "Sales also benefited
from the development of catering programs in selected markets, as
well as advertising campaigns initiated in the fourth quarter of
2004 and second quarter of 2005 that strengthened consumer
awareness. In turn, those strong increases in sales positively
impact our gross profit, helping to drive retail gross margins to
19.0% in the 2005 quarter from 16.2% a year earlier."

New World reported a net loss of $4.3 million, in the second
quarter of 2005, compared to a net loss of $6.2 million, a year
earlier.  Included in the net loss for the second quarter were the
aforementioned non-cash charges associated with impairments and
the disposal of assets.  These charges aggregated $1.3 million for
the quarter ended June 28, 2005. The fiscal 2004 comparable
quarter net loss included approximately $1.5 million of non-cash
charges associated with the disposal of assets, as noted earlier.

For the year to date, total revenues increased 2.7% to
$190.4 million from $185.4 million in the first six months of
2004.  Comparable store sales rose 5.5%, as a 6.2% increase in the
average check was partially offset by a 0.6% decline in
transactions.

Gross profit margin for the six months improved to 19.1% from
17.7% a year earlier, while general and administrative expenses
increased 7.0% to $18.0 million, or 9.4% of revenues, compared to
$16.8 million, or 9.1% of revenues, in the first half of 2004.
Depreciation and amortization expense decreased slightly to $13.8
million for the first six months of 2005 from $13.9 million a year
earlier.

Income from operations for the first six months of 2005 totaled
$3.1 million, compared to $1.5 million in the first half of last
year. Results in 2005 included $1.3 million in impairment charges
and other related costs and a $0.2 million loss on the sale,
disposal or abandonment of assets. Results for the first six
months of 2004 included a $1.5 million loss on the sale, disposal
or abandonment of assets, partially offset by a $0.8 million
benefit from the reversal of a prior accrual for integration and
reorganization costs.

With net interest expense remaining unchanged at $11.7 million,
New World's net loss for the first two quarters of 2005 was $8.5
million, or $0.86 per basic and diluted share, compared to a net
loss of $10.4 million or $1.05 per share in the same period of
2004.

Chief financial officer Richard P. Dutkiewicz noted that the
company's investments in the business during the first half of
2005 included funds for the development of new quick-casual
Einstein Bros. Cafe restaurants and retrofits of existing Einstein
Bros. Bagels locations to that concept.  At quarter's end, the
company had eight Einstein Bros. Cafe locations in the Denver and
Colorado Springs markets.  As reported, New World is embarking on
a three-year program to improve the performance of its existing
company-owned Einstein Bros. restaurants by incorporating the most
successful elements of the Cafe concept in the majority of its
locations.

Commenting on the company's franchised brands, Mr. Murphy said the
Manhattan Bagel Company system has been experiencing increases in
comparable store sales following multi-pronged efforts to improve
the performance of the store base and terminate relationships with
franchisees not performing in accordance with their franchise
agreements.  At quarter's end, 127 Manhattan Bagel locations were
in operation, primarily in the Northeast.

Mr. Murphy added that, "during the second quarter of 2005, we
revisited the long term strategic fit of the Chesapeake brand.
Utilizing the recommendations of a consultant previously engaged
to present viable alternatives for the brand, we decided to form
an exit strategy that we believe could be completed within
approximately one year."

New World is a leading company in the casual restaurant industry.
The company operates locations primarily under the Einstein Bros.
and Noah's New York Bagels brands and primarily franchises
locations under the Manhattan Bagel and Chesapeake Bagel Bakery
brands.  As of June 28, 2005, the company's retail system
consisted of 659 locations, including 442 company-operated
locations, as well as 156 franchised and 61 licensed locations in
34 states, and the District of Columbia.  The company also
operates a dough production facility.

At June 28, 2005, New World Restaurant Group Inc.'s balance sheet
showed a $120,909,000 stockholders' deficit, compared to a
$112,483,000 deficit at Dec. 28, 2005.


NEWMAST MARKETING: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Newmast Marketing & Communications, Inc.
        P.O. Box 205
        Canal Winchester, Ohio 43110

Bankruptcy Case No.: 05-63643

Type of Business: The Debtor is a commercial printing company.

Chapter 11 Petition Date: August 4, 2005

Court: Southern District of Ohio (Columbus)

Debtor's Counsel: Robert E. Bardwell, Jr., Esq.
                  Law Office of Robert E. Bardwell, Jr.
                  995 South High Street
                  Columbus, Ohio 43206
                  Tel: (614) 445-6757
                  Fax: (614) 224-4870

Total Assets: $985,000

Total Debts:  $1,015,674

Debtor's 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
American Print Works          Trade debt                 $61,137
2060 Integrity Drive North
Columbus, OH 432090239

BookColor Bindery             Trade debt                 $47,989
P.O. Box 06239
Columbus, OH 432090239

Xpedx                         Trade debt                 $35,828
013745
Chicago, IL 60693

MBNA America                  Credit card purchases      $16,385

Sabin Robbins Paper Company   Trade debt                 $15,158

Sterling Paper Co.            Trade debt                 $13,023

Laird Plastics                Trade debt                 $12,924

Akorn                         Trade debt                  $7,176

Enovation Graphic Systems     Trade debt                  $6,290

ReyHan                        Trade debt                  $5,252

Transilwrap Co.               Trade debt                  $3,333

Nazdar Cincinnati             Trade debt                  $3,224

Grandon Manufacturing Co.     Trade debt                  $3,190

Pattan Graphic Supplies       Trade debt                  $3,104

Kennedy Ink Co.               Trade debt                  $2,594

Ain Plastics                  Trade debt                  $2,180

All Seasons Paper Co.         Trade debt                  $2,180

Custom Digital Color          Trade debt                  $1,814

Continental Trade Exchange    Trade debt                  $1,585

Bunn Packaging, Inc.          Trade debt                  $1,564


NEXTEL COMMS: Noteholders Agree to Amend Indentures
---------------------------------------------------
Nextel Communications Inc. (NASDAQ:NXTL) reported that based on
consents received to date from holders of its:

  -- 7.375% Senior Serial Redeemable Notes due 2015, Series A;
  -- 6.875% Senior Serial Redeemable Notes due 2013, Series B; and
  -- 5.95% Senior Serial Redeemable Notes due 2014, Series C,

it will have sufficient consents to amend the indenture governing
such notes as described in the Offer to Exchange and Consent
Solicitation Statement and related documents.  The receipt of the
required consents is a condition to the related exchange offer.  
Nextel intends to enter into a supplemental indenture that
implements the amendments to the indenture in accordance with the
terms and conditions of the consent solicitation.  These
amendments will not become operative, however, unless and until
the notes tendered for exchange prior to the expiration date are
accepted pursuant to the terms of the exchange offer.  When the
amendments become operative, they will be binding on all holders,
including the holders of notes not tendered in the exchange offer.

Pursuant to the exchange offer and consent solicitation, each
exchange note will have the benefit of a:

   (i) new covenant under which Nextel will undertake to seek
       from Sprint Corporation, which will be renamed "Sprint
       Nextel" following consummation of the proposed merger
       between Nextel and a subsidiary of Sprint, a guarantee of
       all Nextel's payment obligations under the exchange Notes,
       and
    
  (ii) new covenant with respect to the provision of financial
       information and reports similar to the existing covenant
       relating to the provision of financial information and     
       reports, with the exception that if the exchange notes are
       subsequently guaranteed by a parent guarantor, the reports
       and other information required by such covenant may be
       provided only with respect to the parent guarantor and
       without any condensed consolidating financial information        
       elating to the issuer.

Holders who do not tender notes in the exchange offer will not
have the benefit of the guarantee covenant and the Indenture:

   (a) will not contain any covenant to provide financial
       information and reports; and

   (b) will provide for termination of certain restrictive
       covenants upon the consummation of the proposed merger if
       earlier than the notes achieving investment grade status.

                         Exchange Offer

On July 11, 2005, Nextel commenced an exchange offer and consent
solicitation relating to its Series A Notes, Series B Notes and
Series C Notes.  The exchange offer and consent solicitation were
scheduled to expire last Friday, Aug. 5, 2005, at 12:00 midnight,
New York City time.  Under the terms of the exchange offer,
holders must tender their notes and deliver the related consents
on or before the expiration of the consent solicitation in order
to receive the newly issued 7.375% Senior Serial Redeemable Notes
due 2015, Series D, 6.875% Senior Serial Redeemable Notes dues
2013, Series E, and 5.95% Senior Serial Redeemable Notes due 2014,
Series F.

The exchange offer and consent solicitation are being made
pursuant to an Offer to Exchange and Consent Solicitation
Statement dated July 11, 2005, and related Letter of Transmittal
and Consent, which more fully set forth the terms and conditions
of the exchange offer and consent solicitation.

Bear, Stearns & Co. Inc. is acting as the financial advisor for
the exchange offer and consent solicitation. The information agent
for the exchange offer and consent solicitation is Georgeson
Shareholder Communications, Inc.  The exchange agent for exchange
offer and consent solicitation is BNY Midwest Trust Company.

This press release does not constitute an offer of the Series D
Notes, Series E Notes, or Series F Notes, nor the solicitation of
offers to repurchase the outstanding Series A Notes, Series B
Notes and Series C Notes, nor a solicitation of consents with
respect to the Series A Notes, Series B Notes and Series C Notes.
The offer has not been registered under the Securities Act of
1933, as amended.  The exchange offer and consent solicitation are
made solely by means of an Offer to Exchange and Consent
Solicitation Statement, dated July 11, 2005, and related
materials.

Holders of Series A Notes, Series B Notes and Series C Notes are
encouraged to read the Offer to Exchange and Consent Solicitation
Statement and related materials carefully before making any
decision with respect to the offer to exchange or consent
solicitation because it contains important information.

The Offer to Exchange and Consent Solicitation Statement and the
related Letter of Transmittal and Consent, are available upon
request, free of charge, from Georgeson Shareholder
Communications, Inc., the information agent for the exchange offer
and consent solicitation, at (877) 278-4751 (toll-free).  
Georgeson Shareholder Communication, Inc., as information agent,
can also answer questions regarding the exchange offer and consent
solicitation.

Nextel Communications, a FORTUNE 200 company based in Reston,
Virginia, is a leading provider of fully integrated wireless
communications services and has built the largest guaranteed all-
digital wireless network in the country covering thousands of
communities across the United States.  Today 95% of FORTUNE 500(R)
companies are Nextel customers.  Nextel and Nextel Partners, Inc.
currently serve 297 of the top 300 U.S. markets where
approximately 264 million people live or work.

                            *     *     *

Standard & Poor's Ratings Services ratings on Sprint Corp. and
Nextel Communications Inc. remain on CreditWatch with positive
implications based on operating and financial improvement.

At the same time, Standard & Poor's expects to raise its corporate
credit rating on Nextel to 'A-' from 'BB+', and raise the rating
on Nextel's senior unsecured debt to 'A-' from 'BB'.  The outlook
on the merged "Sprint-Nextel" will be stable.  The ratings on both
companies were independently placed on CreditWatch with positive
implications -- Sprint On Oct. 8, 2004, and Nextel on Oct. 27,
2004 -- based on operating and financial improvement, and remained
on CreditWatch following the Dec. 15, 2004, announcement of the
merger agreement.


NEXTEL COMMS: Pending Merger Completion Cues S&P to Retain Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services ratings on Sprint Corp. and
Nextel Communications Inc. remain on CreditWatch with positive
implications based on operating and financial improvement.

"Upon completion of the merger between the two companies, likely
to close within the next few weeks, we expect to raise our
corporate credit and senior unsecured debt ratings on Sprint to
'A-' from 'BBB-'," said Standard & Poor's credit analyst Eric
Geil.  

At the same time, Standard & Poor's expects to raise its corporate
credit rating on Nextel to 'A-' from 'BB+', and raise the rating
on Nextel's senior unsecured debt to 'A-' from 'BB'.  The outlook
on the merged "Sprint-Nextel" will be stable.  The ratings on both
companies were independently placed on CreditWatch with positive
implications -- Sprint On Oct. 8, 2004, and Nextel on Oct. 27,
2004 -- based on operating and financial improvement, and remained
on CreditWatch following the Dec. 15, 2004, announcement of the
merger agreement.

The upgrades will be based on continuing operating and financial
improvement of both companies' wireless operations, the strong
business profile largely derived from growing national wireless
services that will result after the merged Sprint-Nextel spins off
its stagnant local exchange operations, and an intermediate
financial profile.  Sprint-Nextel will be analyzed on a
consolidated basis and had total debt of $24.7 billion at June 30,
2005.


PC LANDING: Wants Court to Approve Lucent Contract
--------------------------------------------------
PC Landing Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware for authority to
enter into a four-year Master Operational Services Agreement with
Lucent Technologies, Inc.

Lucent Technologies will operate, maintain and manage two landing
stations, located in California and Washington, for the Debtors'
PC-1 fiber optic cable system.  PC-1, the Debtors' main source of
income, is one of three major trans-pacific fiber optic cable
systems with available capacity linking Japan and the U.S.
  
The Debtors tell the Court that the agreement will significantly
reduce the costs of operating and maintaining PC-1.  The Debtors
expect to realize aggregate savings of $3.6 million over the term
of the agreement.

Lucent Technologies will receive a fixed monthly fee for its
services.  In addition to the monthly fees, Lucent is also
entitled to a monthly variable fee.  The variable fee reimburses
Lucent Technologies for third party costs of operations.

Lucent Technologies has agreed to rear-end load the fixed monthly
fees to accommodate the Debtors' cash flow requirements.  As such,
the monthly fees will increase over the term of the agreement.   

The Debtors are also obliged to pay a Termination for Convenience
Fee, up to $500,000, if they decide to prematurely terminate the
agreement.  The termination fee will serve to recoup the monthly
fee discount Lucent Technologies allowed in the early years of the
agreement.

A redacted copy of the Master Operational Services Agreement is
available for a fee at:

    http://www.researcharchives.com/bin/download?id=050804035448

The Court will convene a hearing at 2:00 p.m. on August 24, 2005,
to review the Debtors' request.  Objections to the proposed Master
Operational Services Agreement must be filed with the Court by
August 17, 2005.

Headquartered in Dallas, Texas, PC Landing Corporation and its
debtor-affiliates, own and operate one of only two major trans-
Pacific fiber optic cable systems with available capacity linking
Japan and the United States.  The Debtor filed for chapter 11
protection on July 19, 2002 (Bankr. Del. Case No. 02-12086).
Laura Davis Jones, Esq., at Pachulski Stang Ziehl Young Jones &
Weintraub, P.C., represents the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they estimated assets of over $10 million and estimated
debts of more than $100 million.


PORT TOWNSEND: Parent Will Re-Audit Fiscal 2002 & 2003 Financials
-----------------------------------------------------------------
PT Holdings Company Inc., parent company of Port Townsend Paper
Corporation, disclosed that it has preliminarily determined that
it will re-audit its financial statements for fiscal 2002 and
2003.  The Company will also host a bondholder meeting to discuss
its unaudited 2004 financial statements and the timing of the 2002
and 2003 re-audits, the Company's 2004 audit, and the 2005 year-
to-date results.  Additionally, the Company reported unaudited
results for the six months ended June 30, 2005.

No independent public accounting firm has performed any audit,
review or other procedures on the year-to-date results as
presented and discussed below.

          Update on Timing of Audited Financial Statements

The Company has determined that it will delay the release of its
2004 audited financial statements while it further explores re-
auditing its 2002 and 2003 financial statements to change the
method under which it records spare parts inventory.  The Company
has preliminarily determined to re-audit these prior years.  If
the Company proceeds with re-auditing these periods, it would
expect to release audited results for 2002, 2003 and 2004 at the
beginning of November.  The results for the six months ended June
30, 2005 and June 30, 2004 are prepared assuming that the Company
will account for spare parts under the "inventory method" and will
therefore record spares parts as inventory when purchased and
expense the parts when used.

The re-audit of the Company's 2002 and 2003 financial statements
could result in adjustments that may be material to the Company's
previously reported results of operations, financial position, and
cash flows for the years ended December 31, 2002 and 2003, its
previously reported unaudited results for the year ended Dec. 31,
2004, and the interim results for 2005 set forth below.

                      Year-To-Date Results

For the six months ended June 30, 2005, net sales were
$111.2 million, a 12.0% increase compared to $99.4 million for the
six months ended June 30, 2004.  The net loss for the six months
ended June 30, 2005 was $2.6 million compared to a net loss of
$5.1 million for the same period in 2004.

The major factors contributing to the net loss decrease was the
$6.3 million loss relating to the Company's early extinguishment
of debt in 2004, offset by a $3.6 million increase in interest
expense and a $0.5 decrease in income tax benefits during the six
months ended June 30, 2005 as compared to the same period in 2004.
Gross profit decreased by $0.2 million to $7.0 million for the six
months ended June 30, 2005 from $7.2 million during the same
period in 2004 due primarily to fuel surcharges, corrugator
production inefficiencies, higher material maintenance costs at
our Port Townsend mill, increased depreciation expense, and costs
associated with the startup of our Calgary operations.  Higher
Adjusted EBITDA was primarily the result of pricing increases
experienced across all product lines, and a $0.2 million decrease
in general and administrative expenses between the year-to-date
periods.

As discussed, interest expense increased approximately
$3.6 million, or 64%, to $9.2 million for the six months ended
June 30, 2005 as compared to $5.6 million due to the increased
level of debt at a higher interest rate as a consequence of the
refinancing that was consummated early in the second quarter of
2004.

The Company also disclosed that its liquidity position, consisting
of cash and availability under its new revolving credit facility,
was approximately $10.5 million at July 31, 2005.  "Our credit
availability increased by approximately $2 million upon the
signing of the new agreement we announced in July," said Dolph
Conrads, Treasurer.  "Further, an additional $3 million in
borrowing capacity will be made available under the terms of the
new agreement when we complete the 2004 audit process, which we
anticipate will be in the fourth quarter.  We are at the peak of
our seasonal working capital borrowing requirements, and expect
our liquidity position will improve during the remainder of the
third quarter."

As discussed, the Company has preliminarily determined to re-audit
fiscal 2002 and 2003.  To the extent it does so, the Company would
not record the previously announced cumulative change in
accounting principle in the amount of $4.9 million for fiscal
2004, which will reduce previously reported net income for fiscal
2004 by the same amount.  In addition, the Company determined in
the course of the audit of its fiscal 2004 financial statements
that its accrual for workers' compensation expense has been
understated.  Although the Company is still determining the
appropriate treatment for this accrual, it anticipates that it
will take a charge in the range of $200,000 to $500,000 in fiscal
2004.

                    Analyst/Bondholder Meeting

Company management will host a meeting to present the Company's
unaudited 2004 financial statements and discuss in further detail
timing of the 2002 and 2003 re-audits, the Company's 2004 audit,
and the 2005 year-to-date results.

The meeting will be held at the offices of JPMorganChase, 277 Park
Avenue, New York City on August 16, at 11:00 a.m., ET. Additional
information regarding the meeting will be provided to bondholders
at a subsequent date.  Bondholders and others not attending the
meeting in person can access the discussion by dialing 888-799-
0481.  A replay of the meeting will be available for seven days
following the discussion at 800-642-1687.

The Port Townsend Paper family of companies employs approximately
850 people and annually produces more than 325,000 tons of
unbleached Kraft pulp, paper and linerboard at its mill in Port
Townsend, Washington.  The Company also operates three Crown
Packaging Plants, two BoxMaster Plants, and the Crown Creative
Group, located in British Columbia and Alberta.

                          *     *     *

As reported in the Troubled Company Reporter on Apr. 20, 2005,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Port Townsend Paper Corp. to 'B-' from 'B'.  At the same
time, Standard & Poor's lowered its rating on Port Townsend's 11%
senior secured notes due April 15, 2011, to 'B-' from 'B'.  The
outlook is negative.

"The downgrade reflects our concerns regarding the company's
liquidity position in light of continued upward pressure on energy
and fiber costs and the possibility that price increases announced
by several industry participants may not be fully realized," said
Standard & Poor's credit analyst Dominick D'Ascoli.  Liquidity was
$14 million on Dec. 31, 2004.

Standard & Poor's estimates liquidity has declined substantially
since Dec. 31, 2004, as cost pressures have continued and a $7
million interest payment on the company's 11% senior secured notes
was made on April 15, 2005.  With continued cost pressures and
thin liquidity, the Port Townsend, Washington-based company is
very vulnerable to any sort of operating disruption or the failure
of announced price increases to be fully realized.

The ratings on Port Townsend reflect:

    (1) a modest scope of operations in the highly cyclical,
        commodity-like paper-based packaging market,

    (2) rising cost pressures,

    (3) very aggressive debt leverage,

    (4) thin liquidity, and

    (5) delays in filing 2004 audited financial statements


PROXIM CORP: Committee Wants Drinker Biddle as Counsel
------------------------------------------------------
The Official Committee of Unsecured Creditors of Proxim
Corporation and its debtor-affiliates asks the U.S. Bankruptcy
Court for the District of Delaware for authority to employ and
retain Drinker Biddle & Reath LLP as its counsel, nunc pro tunc to
June 22, 2005.

Drinker Biddle will:

    a. advise the Creditors' Committee with respect to its rights,
       powers, and duties;

    b. assist and advise the Creditors' Committee in its
       consultations with the Debtors relative to the
       administration of these cases including the proposed sale
       of the Debtors' businesses as a going concern;

    c. assist the Creditors' Committee in analyzing the claims of
       creditors and in negotiating with creditors;

    d. assist the Creditors' Committee with its investigation of
       the acts, conduct, assets, liabilities, and financial
       condition of the Debtors and of the operation of the
       Debtors' businesses in order to maximize the value of the  
       Debtors' assets for the benefit of all creditors;

    e. assist the Creditors' Committee in its analysis of, and
       negotiations with the Debtors or any third party concerning
       matters related to, among other things, the terms of a plan
       of reorganization or plan orderly liquidation;

    f. assist and advise the Creditors' Committee with respect to
       any communications with the general creditor body regarding
       significant matters in the Debtors' cases;

    g. commence and prosecute necessary and appropriate actions
       and proceedings on behalf of the Creditors' Committee ;

    h. review, analyze or prepare, on behalf of the Creditors'  
       Committee, all necessary applications, motions, answers,
       orders, reports, schedules, pleadings and other documents;

    i. represent the Creditors' Committee at all hearings and
       other proceedings;

    j. confer with other profesinal advisors retained by the
       Creditors' Committee  in providing advice to the members of   
       the Creditors' Committee ; and

    k. perform all other necessary legal services in this case as
       may be requested by the Creditors' Committee in the
       Debtors' chapter 11 proceeding.

Robert K. Malone, Esq., at Drinker Biddle, discloses the Firm's
standard hourly rates:

             Designation             Hourly Rate
             -----------             -----------
             Partners                $325 - $600
             Counsel/Associates      $175 - $375
             Paraprofessional         $75 - $190

Mr. Malone assures the Court that his Firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.

Headquartered in San Jose, California, Proxim Corporation --
http://www.proxim.com/-- designs and sells wireless networking  
equipment for Wi-Fi and broadband wireless networks. The Debtors
provide wireless solutions for the mobile enterprise, security and
surveillance, last mile access, voice and data backhaul, public
hot spots, and metropolitan area networks.  The Debtor along with
its affiliates filed for chapter 11 protection on June 11, 2005
(Bankr. D. Del. Case No. 05-11639).  When the Debtor filed for
protection from its creditors, it listed $55,361,000 in assets and
$101,807,000 in debts.


PROXIM CORP: Committee Wants Weiser LLP as Financial Advisor
------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Proxim
Corporation and its debtor-affiliates' chapter 11 cases asks the
U.S. Bankruptcy Court for the District of Delaware for permission
to employ and retain Weiser LLP as its financial advisor, nunc pro
tunc to June 22, 2005.

Weiser LLP will:

    a. review all financial information prepared by the Debtors'
       or its consultants as requested by the Committee including,
       but not limited to, a review of Debtors' financial
       statements as of filing of the petition, showing in detail
       all assets and liabilities and priority and secured
       creditors;

    b. monitor the Debtors' activities regarding cash  
       expenditures, receivable collections, asset sales and
       projected cash requirements;

    c. attend meetings including the Committee, the Debtors,
       creditors, their attorneys and consultants, Federal and
       state authorities, if required;

    d. review the Debtors' periodic operating and cash flow
       statements;

    e. review the Debtors' books and records for related party
       transactions, potential preferences, fraudulent conveyances  
       and other potential pre-petition investigations;

    f. investigate with respect to pre-petition acts, conduct,
       property, liabilities and financial condition of the
       Debtors', their management, creditors including the
       operation of their business, and as appropriate avoidance
       actions;

    g. review and analyze proposed transactions for which the
       Debtors seek Court approval;

    h. assist in the sale process of the Debtors collectively or
       in segments, parts or other delineations, if any;

    i. assist the Committee in developing, evaluation, structuring
       and negotiating the terms and conditions of all potential
       plans of reorganization including preparation of a
       liquidation analysis;

    j. analyze claims filed;

    k. estimate the value of the securities, if any, that may be
       issued to unsecured creditors under any such plan;

    l. provide expert testimony on the result of its findings;

    m. assist the Committee in developing plans including
       contacting potential plan sponsor if appropriate; and

    n. provide the Committee with other and further financial
       advisory services with respect to the Debtors, including
       valuation, general restructuring and advice with respect to
       financial, business and economic issues, as may arise
       during the course of the restructuring as requested by the
       Committee.

James Horgan, a Partner at Weiser LLP, discloses the Firm's
standard hourly rates:

             Designation             Hourly Rate
             -----------             -----------
             Partners                $312 - $400
             Senior Managers         $264 - $312
             Managers                $204 - $264
             Seniors                 $168 - $204
             Assistants              $108 - $132
             Paraprofessionals        $72 - $132

Mr. Horgan assures the Court that his Firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.

Headquartered in San Jose, California, Proxim Corporation --
http://www.proxim.com/-- designs and sells wireless networking  
equipment for Wi-Fi and broadband wireless networks. The Debtors
provide wireless solutions for the mobile enterprise, security and
surveillance, last mile access, voice and data backhaul, public
hot spots, and metropolitan area networks.  The Debtor along with
its affiliates filed for chapter 11 protection on June 11, 2005
(Bankr. D. Del. Case No. 05-11639).  When the Debtor filed for
protection from its creditors, it listed $55,361,000 in assets and
$101,807,000 in debts.


QUESTRON TECHNOLOGY: Files Disclosure Statement in Delaware
-----------------------------------------------------------
John Forte, the chapter 11 trustee of QUTI Corp. fka Questron
Technology, Inc., delivered a Disclosure Statement explaining his
Plan of Liquidation to the U.S. Bankruptcy Court for the District
of Delaware.

The Trustee intends to liquidate the Debtor's assets and
distribute the proceeds to the Debtors' creditors.  

                     Terms of the Plan

Allowed administrative claims, allowed priority tax claims and
other allowed priority claims for $675,000 will be paid in full
before other classes receive any distribution.

The Debtors' Prepetition Lenders are expected to receive 50% of an
Earnout Payment (approximately $333,333.50) which will pay them
100% of what they're owed.  

Miscellaneous secured creditors, owed $345,000 and holding valid,
duly-perfected and non-avoidable security interests and liens on
the Debtor's assets, will receive, at the Trustee's option,
either:

         * the net proceeds from the disposition of their
           collateral; or

         * some other treatment agreed to between the parties.

General unsecured creditors, owed $37,400,000, and senior
subordinated noteholders, owed $47,600,000, will receive their pro
rata share of all remaining cash on hand and any proceeds from
avoidance actions.  The Trustee projects unsecured creditors and
sub debt holders will recover 2% to 5% of their claims.

Intercompany claims will be extinguished.

Interest holders of 750,000 preferred shares and 9,202,553 common
shares will receive no distribution under the Plan.

The Court will convene a plan confirmation hearing on October 12,
2005, at 10:00 a.m.  Objections to the Plan, if any, must be filed
by September 28, 2005, at 4:00 p.m.  Bankruptcy Court records
don't show a separate hearing scheduled to consider the adequacy
of the Trustee's disclosure statement.  

Questron Technology Inc., was a leading provider of supply chain
management solutions and professional inventory logistics
management programs for small parts commonly referred to as "C"
inventory items (fasteners and related products) focused on the
needs of Original Equipment Manufacturers. The Company and its
debtor-affiliates filed for Chapter 11 protection on
February 03, 2002. Evelyn Rodriguez, Esq., at Kasowitz Benson
Torres & Friedman LLP and Amanda Kernish, Esq., at Richards
Layton & Finger PA, represent the Debtors.  When the Company filed
for protection from its creditors, it listed $178,415,000 in
assets and $131,039,000 in debts.


QUIGLEY COMPANY: DIP Financing Maturity Extended to March 8
-----------------------------------------------------------
Quigley Company Inc. sought and obtained an extension, until
March 8, 2006, of the maturity date under its postpetition
financing agreement with Pfizer Inc.  At the same time, the Debtor
obtained Bankruptcy Court authority to access its parent company's
cash collateral until the March 8 deadline.  A fifth amended
credit agreement was signed on July 15, 2005.

The original credit pact was signed on March 6, 2003.  Under that
agreement, Pfizer provides secured loans and advances on a
revolving basis to Quigley.  The loans are secured by liens
approved by the Court under 11 U.S.C. Sec. 364.

Headquartered in Manhattan, Quigley Company is a subsidiary of
Pfizer, Inc., which used to produce and market a broad range of
refractories and related products to customers in the iron, steel,
glass and other industries.  The Company filed for chapter 11
protection on Sept. 3, 2004 (Bankr. S.D.N.Y. Case No.
04-15739) to resolve legacy asbestos-related liability. When the
Debtor filed for protection from its creditors, it listed
$155,187,000 in total assets and $141,933,000 in total debts.  
Michael L. Cook, Esq., at Schulte Roth & Zabel LLP, represents the
Company in its restructuring efforts.  Albert Togut, Esq., at
Togut Segal & Segal serves as the Futures Representative.


RAMP CORP: Committee Hires Phillips Nizer as Counsel
----------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave the Official Committee of Unsecured Creditors for the estate
of Ramp Corporation permission to employ the law firm of Phillips
Nizer LLP as its counsel, nunc pro tunc to July 13, 2005.

The Committee selected Phillips Nizer as its counsel because of
the Firm's expertise and experience in bankruptcy cases, including
the representation of creditors' committees.  Phillips Nizer has
been engaged in a wide-ranging practice of domestic and
international law for over 75 years.  The Firm's principal office
is in New York City, with additional offices in Garden City, Long
Island and Hackensack, New Jersey.

Phillips Nizer will assist, advise and represent the Committee  
in:

    a) the administration of this case and the exercise of
       oversight with respect to the Debtor's affairs including
       all issues arising from or impacting the Debtors or the
       Committee in the company's Chapter 11 case;

    b) the preparation, on behalf of the Committee, of all
       necessary applications, motions, orders, reports and other
       legal papers;

    c) appearances in Bankruptcy Court to represent the interests
       of the Committee;

    d) the negotiation, formulation, drafting and confirmation of
       any plan of reorganization or liquidation;

    e) the exercise of oversight with respect to any transfer,
       pledge, conveyance, sale or other liquidation of the
       Debtor's assets;

    f) investigations the Committee may initiate concerning the
       assets, liabilities, financial condition ad operating
       issues of the Debtor relevant to its chapter 11 case;

    g) communicating with the Committee's constituents and others
       as the Committee may consider desirable in furtherance of
       its responsibilities; and

    h) the performance of all of the Committee' duties and powers
       under the Bankruptcy Code and the Bankruptcy Rules.  

Henry Condell, Esq., leads the engagement.  

Phillips Nizer charges these hourly rates for its services:

       Designation          Hourly Rate
       -----------          -----------
       Partners             $345 - $565
       Associates            275 -  400
       Paralegals            150 -  195

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

Ramp Corporation -- http://www.Ramp.com/-- through its wholly     
owned HealthRamp subsidiary, develops and markets the CareGiver
and CarePoint suite of technologies.  CareGiver enables long term
care facility staff to easily place orders for drugs, treatments
and supplies from a wireless handheld PDA or desktop web browser.
CarePoint enables electronic prescribing, lab orders and results,
Internet-based communication, data integration, and transaction
processing over a handheld device or browser, at the point-of-
care. HealthRamp's products enable communication of value-added
healthcare information among physician offices, pharmacies,
hospitals, pharmacy benefit managers, health management
organizations, pharmaceutical companies and health insurance
companies.  The Company filed for chapter 11 protection on June 2,
2005 (Bankr. S.D.N.Y. Case No. 05-14006).  Howard Karasik, Esq.,
at Sherman, Citron & Karasik, P.C., represents the Debtor in its
restructuring efforts.  As of May 31, 2005, the Debtor reported $6
million in total assets and $13 million in total debts.


RAMP CORP: Creditor Seeks Appointment of Operating Trustee
----------------------------------------------------------
Xand Corporation, a member of the Official Committee of Unsecured
Creditors in Ramp Corporation's chapter 11 case, asks the U.S.
Bankruptcy Court for the Southern District of New York to appoint
an Operating Trustee or, alternatively, an examiner with expanded
powers to oversee the Debtor's bankruptcy proceedings.

Xand tells the Court that the appointment of a trustee or examiner
is warranted because all three remaining members of the Debtor's
board are subject to an ongoing fraud and mismanagement
investigation initiated by the Securities and Exchange Commission
and the Federal Bureau of Investigation.  The demands of the
ongoing investigation, Xand suggests, will distract the board
members from their duties to preserve the going-concern value of
the Debtor's estate.

                         Cash Bribe

Arthur Morrison, Esq., Xand's Counsel, reminds the Court that the
Debtor's bankruptcy filing was not caused by simple business
reversals, but rather from fraud, dishonesty and gross
mismanagement primarily on the part of Andrew Brown, its former
CEO and president.  

Mr. Brown had allegedly accepted a large cash bribe from a third
party source.  The incident led to his removal from the debtor's
board and the subsequent SEC and FBI investigation.  Two of the
Debtor's five-member board have since resigned, leaving three
board members.  

Louis Hyman, the Debtor's Chief Technical Officer, has submitted
an affidavit in support of Xand's motion for appointment of an
Operating Trustee or examiner.  A copy of this affidavit is
available for a fee at:

   http://www.researcharchives.com/bin/download?id=050805041124

           Committee Opposes Appointment of Trustee

The Official Committee of Unsecured Creditors opposes Xand's bid
to appoint an Operating Trustee or Examiner and wants the Court to
deny the motion.  

In a response filed by Henry Condell, Esq., at Phillips Nizer LLP,
the Committee's counsel, the Committee says that the appointment
of an Operating Trustee or examiner will disrupt the Debtor's
operation and cost too much.  The Committee does not agree with
Xand that the appointment will enhance the Debtor's prospects for
a successful reorganization.

The Committee states that Xand incorrectly assumes that the Debtor
wants to continue it operations in the long-term.  The Committee
says that the Debtor has made it clear that it is actively
pursuing an expeditious sale of its major assets and is not
looking to continue its operations as a going concern.

The Committee assures that Court that it is active in monitoring
the Debtor's activities and is determined to take the steps
necessary to see that the Debtor is proceeding diligently and
effectively with its current business strategy.

                     Request to Delay

The Debtor asks the Court to adjourn the hearing for a short time.  
The Committee supports the Debtor's request to adjourn the hearing
on Xand's motion for a period of approximately two weeks.  During
the two-week period, the Debtor will pursue its plan for further
cost reductions and solicit potential purchasers of its primary
assets.  The extension will also allow parties-in-interest to
evaluate the efficacy of the Debtor's efforts to move its case
forward.  

Ramp Corporation -- http://www.Ramp.com/-- through its wholly     
owned HealthRamp subsidiary, develops and markets the CareGiver
and CarePoint suite of technologies.  CareGiver enables long term
care facility staff to easily place orders for drugs, treatments
and supplies from a wireless handheld PDA or desktop web browser.
CarePoint enables electronic prescribing, lab orders and results,
Internet-based communication, data integration, and transaction
processing over a handheld device or browser, at the point-of-
care. HealthRamp's products enable communication of value-added
healthcare information among physician offices, pharmacies,
hospitals, pharmacy benefit managers, health management
organizations, pharmaceutical companies and health insurance
companies.  The Company filed for chapter 11 protection on June 2,
2005 (Bankr. S.D.N.Y. Case No. 05-14006).  Howard Karasik, Esq.,
at Sherman, Citron & Karasik, P.C., represents the Debtor in its
restructuring efforts.  As of May 31, 2005, the Debtor reported $6
million in total assets and $13 million in total debts.


RDR RESOLUTION: Case Summary & 23 Largest Unsecured Creditors
-------------------------------------------------------------
Lead Debtor: RDR Resolution, LLC
             One Ferry Building
             San Francisco, California 94111

Bankruptcy Case No.: 05-32481

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      Sierra Gateway Resolution, LLC             05-32493

Chapter 11 Petition Date: August 4, 2005

Court: Northern District of California (San Francisco)

Judge: Thomas E. Carlson

Debtors' Counsel: Roberto J. Kampfner, Esq.
                  Law offices of White and Case
                  3 Embarcadero Center #2210
                  San Francisco, California 94122
                  Tel: (415) 544-1100

                       Estimated Assets      Estimated Debts
                       ----------------      ---------------
RDR Resolution LLC     $1 Million to         $10 Million to
                       $10 Million           $50 Million

Sierra Gateway         $1 Million to         $10 Million to
Resolution, LLC        $10 Million           $50 Million


A. RDR Resolution LLC's 19 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Community Facilities          Special tax lien       $13,310,576
District #6 of the            Value of security:
County of Los Angeles         $1,113,343
(Agua Dulce Area)
500 West Temple #434
Los Angeles, CA 90012

Continental Land Title Co.    Deed of Trust           $1,275,000
55 South Lake Avenue #500     Value of security:
Pasadena, CA 91101            $1,113,343
                              (Junior lien is
                              entirely unsecured)

Los Angeles County            Tax lien                $1,047,797
Tax Collector                 Value of security:
Attn: Bankruptcy Unit         $1,113,343
225 North Hill Street #130
Los Angeles, CA 90012

Chicago Title Co.             Deed of Trust             $540,000
171 North Clark Street        Value of security:
ML 08RS                       $1,113,343
Chicago, IL 60601             (Junior lien is
                              entirely unsecured)

Chicago Title Ins. Co.        Deed of Trust             $540,000
171 North Clark St., 8th Fl.  Value of security:
Chicago, IL 60601             $1,113,343
                              (Junior lien is
                              entirely unsecured)

MEC Associates, Inc.          Deed of Trust             $263,000
2716 Ocean Park Boulevard     Value of security:
#2025                         $1,113,343
Santa Monica, CA 90405        (Junior lien is
                              entirely unsecured)

MEC Associates, Inc.          Deed of Trust             $175,000
                              Value of security:
                              $1,113,343
                              (Junior lien is
                              entirely unsecured)

Internal Revenue Service      Tax lien                  $155,689

MEC Associates, Inc.          Deed of Trust             $150,000
                              Value of security:
                              $1,113,343
                              (Junior lien is
                              entirely unsecured)

MEC Associates, Inc.          Deed of Trust             $146,740
                              Value of security:
                              $1,113,343
                              (Junior lien is
                              entirely unsecured)

Friedman, Ronald              Noteholder                 $75,000

7 Sigma Group LLC             Noteholder                 $67,500

Dekker, Ken                   Noteholder                 $25,000

Dekker, Mary                  Noteholder                 $25,000

Kornfeld, Raymond             Noteholder                 $25,000

Robey, Ann                    Noteholder                 $25,000

Earth Resources               Consultant                 $10,000

JemStreet Properties          Consultant                 $10,000

Pillsbury Winthrop LLP        Legal Services             $10,000


B. Sierra Gateway Resolution, LLC's 4 Largest Unsecured
   Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Community Facilities          Special tax lien       $17,500,000
District #91-1                Value of security:
(Sierra Gateway)              $7,000,000
City of Palmdale
38300 Sierra Highway
Palmdale, CA 93550

County of Los Angeles         Tax lien                $1,100,000
500 West Temple St., #434     Value of security:
Los Angeles, CA 90012         $7,000,000

Community Facilities          Special tax lien          $500,000
District #1 of the            Value of security:
County of Los Angeles         $7,000,000
500 West Temple #434
Los Angeles, CA 90012

JemStreet Development         Consultant                 $10,000
1435 Reynolds Court
Thousand Oaks, CA 91362


REGIONAL DIAGNOSTICS: Committee Taps Olshan Grundman as Co-Counsel
------------------------------------------------------------------
The Official Committee of Unsecured Creditors of Regional
Diagnostics, L.L.C. and its debtor-affiliates asks the U.S.
Bankruptcy Court for the Northern District of Ohio for permission
to employ of Olshan Grundman Frome Rosenzweig & Wolosky LLP as its
substitute co-counsel nunc pro tunc July 18, 2005.  Olshan
Grundman will replace Traub, Bonacquist & Fox, LLP.

The Committee selected Olshan Grundman because Michael S. Fox,
Esq., and Adam H. Friedman, Esq., left Traub Bonacquist and have
joined Olshan Grundman.  Furthermore, Olshan Grundman has
considerable experience in the field of bankruptcy and creditors
rights.

Olshan Grundman will provide the same scope of services rendered
by Traub Bonacquist as previously reported in the Troubled Company
Reporter on June 23, 2005, at these hourly rates:

         Professional/Designation                Hourly Rate
         ------------------------                -----------
         Michael Fox, Esq.                           $530
         Adam Friedman, Esq.                         $400
         Partners                                $360 - $530
         Counsel & Associates                    $216 - $360
         Paraprofessionals                       $130 - $190

Mr. Fox assures the Court that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.

Messrs. Fox and Friedman can be reached at:

         Michael S. Fox, Esq.
         Adam H. Friedman, Esq.,
         Olshan Grundman Frome Rosenzweig & Wolosky LLP
         Park Avenue Tower
         65 East 55th Street
         New York, New York 10022
         Telephone (212) 451-2300
         Fax (212) 451-2222

Headquartered in Warrensville Heights, Ohio, Regional Diagnostics,
L.L.C. -- http://www.regionaldiagnostic.com/-- owns and operates   
27 medical clinics located in Florida, Illinois, Indiana, Ohio and
Pennsylvania.  The Company and its debtor-affiliates filed for
chapter 11 protection on April 20, 2005 (Bankr. N.D. Ohio Case No.
05-15262).  Jeffrey Baddeley, Esq., at Baker & Hostetler LLP
represents the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they estimated
assets of $10 million to $50 million and debts of $50 million to
$100 million.


REGIONAL DIAGNOSTICS: Has Until October 26 to Decide on Leases
--------------------------------------------------------------
The Honorable Pat E. Morgenstern-Clarren of the U.S. Bankruptcy
Court for the Northern District of Ohio, Eastern Division,
extended Regional Diagnostics, L.L.C., and its debtor-affiliates'
time to decide whether to assume, assume and assign or reject
unexpired leases pursuant to Section 365(d)(4) of the Bankruptcy
Code.

The Debtors originally asked the Court for an open-ended
extension.  The Debtors gave the Court three reasons why the lease
decision extension is warranted:

   1) they are still evaluating and determining which of the
      businesses that they operate from the leased facilities
      might be sold as going concerns;

   2) the requested extension will afford the Debtors more
      time to evaluate the 27 unexpired leases in conjunction
      with their businesses and any purchase offers from
      potential buyers, thereby maximizing the value of each
      unexpired lease to their estates; and

   3) the requested extension will not prejudice the landlords of
      the unexpired leases because they are current on all post-
      petition rent obligations under the leases.

But lessors and creditors objected to the open-ended request.  
Creditors Regional Health Services, Inc., JVZ Partners Limited, JZ
Investment Corp. and the Ridgepark lessor said that they'd consent
to an extension of no more than 90 days.  The Bankruptcy Court
extended the Debtors' lease decision period to Oct. 26, 2005.  

Headquartered in Warrensville Heights, Ohio, Regional Diagnostics,
L.L.C. -- http://www.regionaldiagnostic.com/-- owns and operates  
27 medical clinics located in Florida, Illinois, Indiana, Ohio and
Pennsylvania.  The Company and its debtor-affiliates filed for
chapter 11 protection on April 20, 2005 (Bankr. N.D. Ohio Case No.
05-15262).  Jeffrey Baddeley, Esq., at Baker & Hostetler LLP
represents the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they estimated
assets of $10 million to $50 million and debts of $50 million to
$100 million.


ROCK OF AGES: Lenders Agree to Waive Cash Flow Covenant Violation
-----------------------------------------------------------------
Rock of Ages Corporation (NASDAQ:ROAC) obtained a verbal waiver
from its lenders after violating a modified Cash Flow to Debt
Service covenant on its credit facility, as an outcome of its
second quarter results for 2005.  In addition, the Company
obtained revised covenants from its lenders through the end of
2006 that it believes it can meet.  

The Company will pay an additional 0.25% interest in the interim
until it is in compliance for the year 2006.  The Company expects
to obtain the formal written waiver prior to the filing of its
quarterly report for the period ended July 2, 2005, under Form
10-Q with the Securities and Exchange Commission.

On May 12, 2005, the Company received a letter from its lenders,
the CIT Group, Business Credit and Chittenden Trust Company,
pursuant to which CIT and Chittenden waived compliance with the
Minimum Operating Cash Flow Ratio, as that term is defined in the
Financing Agreement dated Dec. 17, 1997, as amended, for the first
quarter 2005.

A full-text copy of the waiver letter dated May 12, 2005, is
available at no charge at http://ResearchArchives.com/t/s?b1

                  Second Quarter Financials

The Company reported financial results for the second quarter and
first half of 2005.

"Revenue for our Memorials Division, which includes our retail and
manufacturing segments, increased 17% for this year's second
quarter versus the second quarter of 2004, and new orders
increased 25%.  The new branding, pricing and outreach programs
initiated by Memorials Division President Rick Wrabel and his team
are beginning to deliver the results we anticipated, which is an
encouraging sign that our strategy to grow this business has put
us on the right track," said Chairman and CEO Kurt Swenson.

"We were surprised and disappointed by a decline in quarrying
revenue for the second quarter, which was attributable primarily
to lower sales of granite blocks to customers in China. This
appears to be related to the tightening of credit conditions in
that country, which has slowed the start of numerous planned
building projects and also made it harder for our Chinese
customers to post the necessary letters of credit to order their
normal granite block inventory.  We expect sales to begin to
recover in the second half from the depressed second quarter pace,
but doubt that quarry revenue and earnings for 2005 will reach the
levels reported for 2004," Swenson said.

                       Strategic Update

"During the second quarter, our Memorials Division team focused on
the implementation of the new branding and pricing program
introduced in March, as well as on improving day-to-day operating
procedures to strengthen our outreach program to funeral homes and
cemeteries.  While these important efforts continue, we now are
also focused on achieving the target operating margin in each of
our retail profit centers that is an important part of our overall
goal of continuous improvement in every aspect of our retail and
manufacturing operations," Swenson said.  In addition, Mr. Swenson
noted that gross margin in the retail segment was affected by the
learning process related to the new branding program and the
reduction during the second quarter of older memorial inventory
that is not within the new branding plan.

The CEO continued, "SG&A expenses in our Memorials Division
increased as planned in the second quarter versus prior year to
support personnel, sales and marketing and other initiatives in
our growth strategy.  Approximately $750,000 of the SG&A expenses
incurred in the first half of the year are related to the new
branding program materials, recruiting fees, relocation expenses
and other similar items which we do not expect in future periods.
A principal goal of the profit center-by-profit center improvement
effort now underway is to reduce SG&A in some locations and
improve the productivity of SG&A dollars expended in all
locations.

"Early in the fourth quarter we plan to introduce a new product
line that will begin the process of expanding the range of
products we offer as we roll out our 'total memorialization'
concept.  We have decided to defer the planned consumer-directed
portion of our print advertising program and additional
acquisitions originally anticipated this year until we are sure
that the initiatives in progress are generating the store-level
operating margins we have targeted.  We remain confident that the
investments we are making will deliver growth in our Memorials
Division this year and accelerating in 2006 and beyond."

                   Second Quarter Results

For the three months ended July 2, 2005, retailing revenue
increased 15% to $14,108,000 from $12,256,000 last year, and
manufacturing revenue increased 22% to $7,704,000 from $6,323,000.
Quarrying revenue decreased to $5,870,000 from $9,455,000 for the
second quarter of 2004.  Total revenue for the second quarter of
2005 decreased to $27,682,000 from $28,034,000 for the second
quarter of 2004.

The net loss for this year's second quarter was $8,144,000.  This
compares to a net loss of $1,050,000, for the second quarter of
2004.  Results for this year's second quarter included a charge to
tax expense of $9,194,000 to fully reserve for the Company's
entire net U.S. deferred tax asset.  Results for 2004 included
pre-tax settlement costs for the Eurimex litigation of $6,500,000.

"Rock of Ages has a cumulative U.S. taxable loss for the last
three years, and we anticipate a U.S. taxable loss in 2005.  Based
on the language of the Statement of Financial Accounting Standards
No. 109 -- 'Accounting for Income Taxes' -- we determined that we
cannot now estimate that the Company will more likely than not
generate the necessary taxable income in the U.S. to support the
realizability of the net U.S. deferred tax asset.  Accordingly, we
have adjusted the valuation allowance to fully reserve for the
entire deferred tax asset," Swenson said.

At July 2, 2005, cash and equivalents amounted to $2,796,000, and
shareholders' equity was $44,404,000.

                     First Half Results

For the six months ended July 2, 2005, revenue declined to
$38,152,000 from $40,196,000 for the first half of 2004.  
Memorials Division (manufacturing and retailing combined) revenue
increased 10% to $28,717,000 from $26,209,000 last year, while
Quarrying revenue decreased to $9,435,000 from $13,987,000.  The
net loss for this year's first six months was $15,099,000.  This
compares to a net loss of $4,475,000, for the same period last
year.

Rock of Ages -- http://www.RockofAges.com/-- is the largest  
integrated granite quarrier, manufacturer and retailer of finished
granite memorials and granite blocks for memorial use in North
America.


SAINT VINCENTS: Iris Cotto Wants to Continue Malpractice Suit
-------------------------------------------------------------
Iris Cotto filed a medical malpractice lawsuit against Saint
Vincents Catholic Medical Centers of New York in the Supreme
Court, State of New York, in New York County, before the
healthcare provider filed for chapter 11 protection.  The suit
seeks to recover damages for serious and permanent personal
injuries sustained by Ms. Cotto on August 30, 1999, arising out of
the Debtors' negligence and medical malpractice in failing to
timely and properly treat lacerations of her left arm.   

Sherri L. Plotkin, Esq., at Barton, Barton & Plotkin, LLP, in New
York, representing Ms. Cotto, relates that the Debtors maintained
a policy of insurance in effect at the time of the accident which
affords coverage for Ms. Cotto's injuries.  The Debtors maintained
primary liability insurance with coverage afforded through Medical
Liability Mutual Insurance Company.

Ms. Cotto asks Judge Beatty to:

   (a) lift the stay and allow her to proceed to prosecute her
       claim in the State Court;

   (b) allow her to receive any insurance proceeds from the
       Debtors' insurance carrier without further leave of the
       Bankruptcy Court;

   (c) permit her to file amended proofs of claim after her claim
       has been liquidated and after receipt and application of
       insurance proceeds, if any, of her claim, notwithstanding
       the bar date; and

   (d) permit her to participate as an unsecured creditor to the
       extent her claim remains unsatisfied after liquidation and
       application of insurance proceeds, if any.

Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the    
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency.  The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951).  Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, represent the Debtors in their restructuring efforts.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts.  (Saint Vincent Bankruptcy
News, Issue No. 6; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


SAINT VINCENTS: Wants Court Approval of $6.7MM DASNY DIP Facility
-----------------------------------------------------------------
Although Saint Vincents Catholic Medical Centers of New York and
its debtor-affiliates have obtained postpetition financing from
HFG Healthco-4 LLC to address their operational and cash flow
problems, the HFG DIP Financing does not authorize the Debtors to
make the prospective mortgage payments, Stephen B. Selbst, Esq.,
at McDermott Will & Emery LLP, in New York, informs the Court.

If any of the prospective mortgage payments are not timely made
or cured within a 30-day period, the Dormitory Authority of the
State of New York would be obligated to assign the Mortgages to
the United States Department of Housing and Urban Development and
call on the Federal Housing Administration insurance, which
insures the repayment obligations on the Mortgages.  

The Debtors, DASNY and the HUD believe that an assignment of the
Mortgages to the HUD is not in the best interest of the Debtors
or all non-profit hospitals in the New York State.

If the Mortgages were assigned, the HUD would have a fiduciary
duty to actively recover funds outstanding, and therefore may not
have the same flexibility to defer mortgage payments or agree to
restructuring of the Debtors' obligations.  An assignment of the
Mortgages to the HUD also could jeopardize the willingness and
ability of the HUD to provide insurance on mortgages and loans to
other not-for-profit hospitals and nursing homes in New York.

                DASNY & HUD Offer $14-Mil Bail-Out

In that regard, the parties have reached an agreement by which
DASNY and the HUD will advance, on behalf of SVCMC, amounts
sufficient to pay the debt service payments on the Mortgage Notes
due on the first day of each month from August 2005 until January
2006:

     $6,765,721 will be advanced in the form of a term loan from
                DASNY; and

     $7,620,364 will be advanced by the HUD through releases from
                a Depreciation Reserve Fund that will not take
                the form of loan.
   ------------
    $14,386,088 Total funds to be received by SVCMC

However, the HUD reserves the right to seek replenishment of the
Depreciation Reserve Fund at a later date.

The amounts will permit the Debtors time to seek and obtain
additional DIP funding that is sufficient to satisfy the Mortgage
Notes and redeem or defease the Bonds.

By this motion, the parties ask the Court to authorize SVCMC to
obtain credit under a Loan and Reimbursement Agreement dated
August 1, 2005, among DASNY and SVCMC and its related debtors.

They also ask Judge Beatty to grant liens on substantially all of
the Debtors' property to secure the repayment of the Debtors'
obligations under the DASNY DIP Loan Agreement.

                         Financing Terms

The DASNY loan and the advances released from the DRF will be
made in six installments:

      Date         Total Advance      HUD          DASNY
      -----        -------------      ---          -----
    07/29/2005       $2,397,681    $1,250,240    $1,147,442
    08/31/2005       $2,397,681    $1,258,100    $1,139,581
    09/30/2005       $2,397,681    $1,266,012    $1,131,670
    10/31/2005       $2,397,681    $1,273,974    $1,123,707
    11/31/2005       $2,397,681    $1,281,988    $1,115,694
    12/31/2005       $2,397,681    $1,290,053    $1,107,628

The proceeds from the DASNY DIP Facility will be paid to the
applicable Mortgage Servicers, on behalf of SVCMC, solely and
exclusively for repayment of the Mortgages identified by the
parties.  The Obligations under the DASNY DIP Facility will
accrue interest at a rate equal to the Treasury Bill Rate as of
August 4, 2005, which will be approximately 3.00%, almost half of
the current prime rate of approximately 6.250%.

The DRF Releases will be used to repay the monthly mortgage
principal amounts due under the Mortgages and will not accrue
interest.  The Mortgage payments are to be applied in accordance
with the Federal Housing Administration and Bond Documents.

              Loan Maturity & Termination Covenants

All amounts owning under the DASNY DIP Facility will be repaid in
cash, in full and with interest upon the earlier of:

   (i) SVCMC's receipt of funding that is sufficient to:

       (a) repay the DASNY DIP Facility; and

       (b) satisfy the FHA-Insured Mortgage indebtedness in
           accordance with their terms and the requirements of
           the FHA Documents and redeem or defease -- after
           application of available reserves -- the Bonds in
           accordance with their terms; or

  (ii) February 1, 2006.

In the sole discretion of DASNY and the HUD, after consultation
with the DOH, DASNY's obligation to make advances under the
Dedicated Funding Commitment will terminate on the earlier of:

    -- immediately after DASNY's sixth and final advance;

    -- DASNY's receipt of funds from the Take Out DIP Funding; or

    -- SVCMC's failure to meet any of the conditions precedent.

DASNY reserves the right to make advances despite a failure by
SVCMC to meet any of the conditions precedent, though no course
of dealing will be inferred from any action.

In the event SVCMC fails to comply with the terms of the
Agreement, DASNY will have the right to delay any advance or
terminate the Dedicated Funding Commitment.

                    Debtors Got the Best Deal

Mr. Selbst clarifies that DASNY is not seeking to prime any
existing liens.  Rather, DASNY is only seeking liens, subject to
all prior perfected liens as of the Petition Date and the liens
and security interests granted to HFG in the HFG DIP Loan
Agreement.

Moreover, DASNY and the HUD have also agreed to withdraw their
objections to approval of the HFG DIP Loan Agreement, which will
avoid the prospect of costly and protracted litigation over the
appropriateness of the Debtors' grant to HFG of a priming lien on
certain receivables, thereby helping to ensure the continued
availability of working capital from HFG.

Given these considerations and extraordinarily favorable terms,
the Debtors believe that the financing under the DASNY DIP Loan
Agreement is the best financing available for purposes of making
the Prospective Mortgage Payments at this time.

A full-text copy of the DASNY Loan Agreement is available free of
charge at:

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

The Court will convene a hearing on August 4, 2005, at 3:00 p.m.
to consider approval of the parties' request.

Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the    
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency.  The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951).  Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, represent the Debtors in their restructuring efforts.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts.  (Saint Vincent Bankruptcy
News, Issue No. 6; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


SAINT VINCENTS: Wants to Repay Commerce Bank Loan
-------------------------------------------------
On September 30, 2003, Commerce Bank, N.A., provided Saint Vincent
Catholic Medical Centers of New York with a $40 million revolving
line of credit secured by a first priority perfected lien on cash
held in an account at Commerce Bank.  On October 8, 2004, the
parties agreed to reduce the Loan to $30 million.

The indebtedness bears interest at LIBOR plus 2% and matures on
September 30, 2005.  

As of June 30, 2005, SVCMC owes Commerce Bank the full amount of
the Loan.

At the request of the parties, the Court lifts the automatic stay
under Section 362 of the Bankruptcy Code to authorize and permit
Commerce Bank to repay all amounts due to the Bank by SVCMC under
the Loan from certain of the funds in the Account.

Commerce Bank will remit all remaining cash in the Account to
SVCMC within three business days of complete repayment of the
Loan, except those funds in the Account being held to secure
Irrevocable Letter of Credit No. 1136551958.

Upon complete repayment of the Loan and complete satisfaction to
the terms agreed, the parties will release each other from all
liabilities in connection with the Loan.

Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the    
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency.  The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951).  Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, represent the Debtors in their restructuring efforts.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts.  (Saint Vincent Bankruptcy
News, Issue No. 6; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


SAKS INC: Moody's Reviews Low-B Ratings for Possible Upgrade
------------------------------------------------------------
Moody's Investors Service changed the direction of Saks Inc.
review to on review for possible upgrade from on review for
possible downgrade as a result of the company effectively curing
the defaults triggered by its failure to timely file its fiscal
year end financial statements, as well as its improved liquidity
as a result of a significant asset sale.

Saks received a notice of default under its $230 million senior
convertible notes in June 2005 following a delay in the filing of
its financial statements for the last fiscal year as a result of
an ongoing investigation into accounting and other matters.  If
the event of default had not been cured within 60 days of the
notice, all debt could have been accelerated under the cross-
default provisions in the company's indentures.  

The company has received irrevocable consents from holders of a
majority of each series of its senior notes and convertible senior
notes to amendments to the related indentures and waivers of
defaults under those indentures.  As a result, the delay in filing
its financial statements is no longer an event of default under
those indentures provided it occurs by October 31, 2005.  The
banks had previously agreed to waive any default related to the
late filing of its financial statements under its committed bank
facility.

During July 2005, the company successfully completed the sale of
the assets to Belk and received $622 million in proceeds.  It also
tendered for approximately $586 million of senior notes reducing
its debt to approximately $765 million including capital leases.
Following these transactions, Saks has approximately $250 million
of cash balances and $650 million of undrawn capacity on its $800
million revolver.

Moody's review for possible upgrade will focus on:

   1) the company's progress in resolving the internal
      investigation and preparing the delayed financial
      statements;

   2) the scope and timing of the SEC investigation;

   3) the company's liquidity profile;

   4) the capital structure and operating strategy of the company
      following any potential strategic moves with respect to its
      northern group of department stores ; and

   5) any additional strategic alternatives available to the
      company.

These ratings are on review for possible upgrade:

Saks, Inc.:

   * Corporate family of B2;

   * Senior unsecured debt guaranteed by operating
     subsidiaries of B2;

These ratings have been withdrawn following the shelf
registrations becoming ineffective:

   * Prospective ratings for prospective senior unsecured debt,
     subordinated debt and preferred stock issued from the
     company's shelf registration of (P) B2; (P) Caa1, (P) Caa1.

Proffit's Capital Trust I, II, III, IV, and V:

   * Preferred Stock Shelf of (P) Caa1.

Saks Inc., headquartered in Birmingham, Alabama, operates 37381
department stores and specialty stores under the names:

   * Saks Fifth Avenue,
   * Parisian,
   * Carson Pirie Scott,
   * Herberger's,
   * Younkers,
   * Bergner's,
   * Boston Store,
   * Off 5th, and
   * Club Libby Lu.

Revenues for fiscal year 2004 were $6.4 billion.


SCOTIA PACIFIC: Outlines Restructuring Via Prepack Ch. 11 Plan
--------------------------------------------------------------
Scotia Pacific Company LLC disclosed in a regulatory filing with
the Securities and Exchange Commission that it is currently
engaged in confidential discussions with its noteholders' advisors
to restructure the Company's Timber Collateralized Notes.  

The Company has outlined a potential restructuring plan to be
accomplished through confirmation of a chapter 11 plan of
reorganization.  Under the terms of the plan, the noteholders will
receive $300 million in new senior secured notes and 90% equity
stake of the Reorganized Company.
  
The Company is disclosing these proposed terms in order to
facilitate direct negotiations with the noteholders, Gary L.
Clark, the Company's vice president for Finance and
Administration, said.  None of the lenders have yet entered into a
confidentiality agreement with respect to the negotiations.

If the Company is unable to achieve a negotiated restructuring of
the Timber notes, it expects to:

   -- reduce expenditures by laying off employees and shutting
      down various operations;

   -- seek other sources of liquidity, including asset sales; and

   -- seek protection under the U.S. Bankruptcy Code.

                  July 20 Interest Payment

On July 20, 2005, The Pacific Lumber Company, Scotia Pacific's
parent company, made an early payment equal to a cash shortfall of
$2.2 million to Scotia Pacific, in respect of certain logs already
delivered to and purchased by Palco from Scotia.  This move
allowed Scotia Pacific to pay the $27.9 million interest on the
Timber notes due on July 20, 2005.

Scotia Pacific Company LLC is a wholly owned subsidiary of The
Pacific Lumber Company.  It is structured to be a bankruptcy-
remote entity and its assets are segregated from those of PALCO
and PALCO's parent corporations.  Scotia Pacific's principal asset
consists of timber property and an associated database integral to
managing the property.

PALCO is a 140-year old lumber and timber products company located
in Scotia, Calif.  In addition to owning Scotia Pacific, PALCO is
the primary purchaser of the timber harvested by Scotia Pacific.
PALCO is a wholly owned subsidiary of Houston-based Maxxam Inc.
Neither PALCO nor Maxxam are currently rated by Moody's.

                        *     *     *

As reported in the Troubled Company Reporter on June 23, 2005,
Moody's lowered the ratings on the three outstanding classes of
Timber Collateralized Notes issued by Scotia Pacific Company LLC.
The rating action reflects:

   * concern over continued weak cash flow from timber operations;

   * recent regulatory decision by the California State Water
     Resources Control Board; and

   * the announcement by the Company that it was unlikely to be
     able to pay in full the $27.9 million interest payment due on
     July 20.

The regulatory and cash flow problems have been ongoing for a
number of years, due to:

   * changes in regulations that govern timber harvesting;

   * changes in the regulatory bodies that oversee environmental
     and timber matters; and

   * pending court actions.

The complete rating action is:

Scotia Pacific Company LLC Timber Collateralized Notes, Final
Maturity July 2028:

   * $160.700 million Class A-1 Notes Scheduled Maturity
     January 2007, rating lowered to Caa1, from a rating of Ba3;

   * $243.200 million Class A-2 Notes, Scheduled Maturity
     January 2014, rating lowered to Caa1, from a rating of B1;
     and

   * $463.348 million Class A3 Notes, Scheduled Maturity
     January 2014, rating lowered to Caa1, from a rating of B1.


SOLUTIA INC: Faces Probe in Belgium on Sale of BBP Business
-----------------------------------------------------------
Solutia, Inc., discloses in its latest Form 10-Q filed with the
Securities and Exchange Commission that competition authorities
in Belgium and several other European countries are investigating
past commercial practices of certain companies engaged in the
production and sale of butyl benzyl phthalates.

One of the BBP producers under investigation by the Belgian
Competition Authority is Ferro Belgium sprl, the European
subsidiary of Ferro Corporation.  Ferro's BBP business in Europe
was purchased from Solutia in 2000.

Solutia says it has received an indemnification notice from Ferro
and has exercised its right, pursuant to the purchase agreement
relating to Ferro's acquisition of the BBP business, to assume
and control the defense of Ferro in proceedings relating to these
investigations.

On July 7, 2005, the Belgian Competition Authority issued a
Statement of Objections regarding its BBP investigation in which
Solutia Europe S.A/N.V., a European subsidiary of Solutia, along
with Ferro and two other producers of BBP, is identified as a
party under investigation with respect to its ownership of the
BBP business from 1997 until the business was sold in 2000.

Solutia is not named as a party under investigation in the
Statement of Objections.

Written comments to the Statement of Objections are due on
August 31, 2005, and a preliminary oral hearing before the
Belgian Competition Authority is currently scheduled to take
place on September 6, 2005.

Solutia is fully cooperating with the Belgian Competition
Authority in this investigation.  Solutia believes that any
liability that may result from the Belgian investigation will not
be significant to its results of operations or financial
position.

However, Solutia cannot provide any assurance that the liability
assessed against it as a result of this matter would not have a
material adverse effect on the company's results of operations or
financial position.

Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications.  The Company
filed for chapter 11 protection on December 17, 2003 (Bankr.
S.D.N.Y. Case No. 03-17949).  When the Debtors filed for
protection from their creditors, they listed $2,854,000,000 in
assets and $3,223,000,000 in debts.  Solutia is represented by
Richard M. Cieri, Esq., at Kirkland & Ellis. (Solutia Bankruptcy
News, Issue No. 44; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


SPECIAL DEVICES: Moody's Withdraws Junk Senior Sub. Notes' Rating
-----------------------------------------------------------------
Moody's Investors Service has withdrawn the ratings of Special
Devices Incorporated.  On June 10, 2005 the company filed a Form
15 with the Securities and Exchange Commission indicating that it
was no longer obligated to file current and periodic reports
pursuant to Section 15(d) of the Securities Exchange Act of 1934,
as amended.

Earlier this year the company obtained consents from the holders
of its 11 3/8% Senior Subordinated Notes due in 2008, Series A and
Series B, to amend the previous indenture and to execute a third
supplemental indenture which would eliminate the obligation to
file quarterly and annual reports on forms 10-Q and 10-K
respectively, and current reports on form 8-K.  This third
supplemental indenture has been executed by the requisite parties
and has become effective.  The rating has been withdrawn because
Moody's believes it lacks adequate information to maintain a
rating due to the absence of publicly available information.
Please refer to Moody's Withdrawal Policy on moodys.com.

These specific ratings were withdrawn:

   * Caa2 rating on Senior Subordinated Notes due in 2008
   * B3 Corporate Family Rating

Special Devices Incorporated is a designer and manufacturer of
pyrotechnic devices used:

   * by the automotive industry as initiators in airbag systems;
   * by the aerospace industry in tactical military systems; and
   * by the commercial mining industry in electronic systems.

The company operates facilities in:

   * Moorpark, California;
   * Mesa, Arkansas;
   * Thailand; and
   * also owns a 50% interest in a joint venture in Germany.

It employs approximately 650 people worldwide.


STELCO INC: Reports $40 Million Net Earnings for Second Quarter
---------------------------------------------------------------
Stelco Inc. (TSX:STE) reported net earnings of $40 million
for the quarter ended June 30, 2005 compared to net earnings of
$42 million for the second quarter of 2004.  Six month net
earnings were $89 million compared to net earnings of $5 million
for the same period in 2004.

Second quarter 2005 net earnings would have been lower than
reported but for four non-recurring items, which had a positive
impact on net earnings for the period.  These items were (in pre-
tax figures) a $20 million gain on the sale of the plate mill
assets, $14 million for the balance of an insurance claim recovery
related to a June 2004 blast furnace outage, a $4 million gain
on the sale of the Company's interest in Camrose Pipe, and a
$4 million gain on the sale of the Welland Pipe U and O pipe mill.
Compared to second quarter 2004, second quarter 2005 earnings were
negatively affected by decreased shipments and higher costs,
particularly at Norambar and the Manufactured Products segment,
and reduced Integrated Steel finishing mills production, partly
offset by higher selling prices.

Net sales revenue in the second quarter was $888 million compared
to $881 million for the same period last year.  In the first half
of 2005, sales amounted to $1,856 million, a 12% increase over the
$1,650 million recorded for the first six months of 2004.  This
increase was attributable to such factors as the renewal of
customer contracts at substantially higher prices, improved market
demand which had the effect of raising spot prices in the first
quarter, and selling price surcharges implemented to cover high
raw material and energy costs in the first quarter.

Costs for the second quarter of 2005 were $799 million compared to
$779 million for the same quarter in 2004.  Costs for the
first six months of 2005 stood at $1,620 million compared to
$1,514 million for the first half of 2004.  The increase in costs
was attributable to such factors as :

   * higher raw material and energy costs, particularly for scrap,
     coal, iron ore, natural gas and electricity;

   * higher spending for repairs and maintenance and supplies;


   * reduced output required to control steel inventories; and

   * the increased cost of hot roll as raw materials for the
     Manufactured Products segment of the business.

Production in the second quarter of 2005 was 1,297,000 semi-
finished tons compared to 1,327,000 semi-finished tons produced
during the same period in 2004.  Production for the first six
months of 2005 was 2,553,000 semi-finished tons compared to
2,693,000 semi-finished tons produced during the first half of
2004.

Shipments in the second quarter of 2005 totalled 1,125,000 net
tons compared to 1,249,000 net tons during the same period in
2004.  Shipments in the first six months of 2005 totalled
2,325,000 net tons, compared to 2,515,000 net tons during the
first half of 2004.

As at June 30, 2005, the Corporation's net liquidity position was      
$407 million, consisting of $26 million of cash and cash
equivalents, including restricted cash, plus $472 million of
available lines of credit, less $91 million of drawings on lines
of credit.  At December 31, 2004, net liquidity was $284 million,
consisting of $43 million of cash and cash equivalents, including
restricted cash, plus $456 million of available lines of credit
less $215 million of drawings on lines of credit.

During the quarter the Corporation generated $43 million of cash
primarily due to cash earnings before working capital and proceeds
from the sale of its 40% interest in Camrose pipe, partly offset
by expenditures for capital assets, primarily consisting of
$30 million related to the Lake Erie Phase II hot strip mill
upgrade, and working capital changes.  In the year earlier period
$2 million of cash was generated.

The Corporation noted that steel market selling prices have been
very volatile and are highly dependent on North American and
worldwide steel demand and other factors beyond Stelco's control.
For example, the current spot price for hot roll coils, Stelco's
largest product category, has declined approximately 26% since
April 2005.  Stelco also indicated that future financial results
will be highly dependent on the strength of North American steel
markets and on the direction of commodity raw material and energy
input costs.

North American steel producers have reduced production levels in
the second quarter of 2005, attempting to better balance supply
with demand, which ultimately may stabilize steel pricing.   
Following the seasonal shutdowns, automotive demand is forecast to
remain constant through the balance of the third quarter of 2005.
Spot market prices appear to be stabilizing due to lower steel
production, and reduced customer inventory levels.

The Corporation expects that third quarter 2005 results will be
significantly lower than second quarter and that there will be
increased drawings on the Stelco Inc. credit facility.  In the
fourth quarter, as a result of a planned shutdown of the Lake Erie
hot strip mill to install components related to the Phase II
upgrade, significant shipments of slabs are planned. There is a
risk that market demand may not support the projected level of
slab sales.  While there is currently a court order outstanding
that prevents a strike by Local 8782, there is a risk that
delivery of the 90-day notice from Local 8782 could result in
disruptions to the Corporation's business.

Courtney Pratt, Stelco President and Chief Executive Officer,
said, "Our results reflect the softening in North American demand
and pricing that began in the third quarter of last year and that
has continued well into 2005.

"We've said that Stelco could not base its future upon steel
prices remaining at historically high levels. We've believed from
the outset of our restructuring process that the only way to
ensure a positive long-term future for the Company is to make it
competitive through all stages of the market cycle.

"That's what the four-point strategy announced one year ago and
the restructuring plan outline filed last month are designed to
achieve.  I urge all stakeholders to work together at this crucial
stage of the restructuring process to ensure that our shared goal
of a viable, competitive and successful Stelco can be realized."

With respect to the Corporation's recently released restructuring
plan outline, Mr. Pratt noted that to date the plan outline has
not yet been endorsed by any stakeholder group.

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.


STRATOS GLOBAL: Poor Performance Prompts S&P's Negative Outlook
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on remote
communications provider Stratos Global Corp. to negative from
stable on weak operating performance during the first half of 2005
year ended June 30. At the same time, Standard & Poor's affirmed
its 'BB-' long-term corporate credit and bank loan ratings on
Stratos.

"Stratos' results were below our expectations for the past two
quarters, due to competitive pressures in its mobile satellite
services segment, and in particular due to strong pricing
pressures in one of its key products," said Standard & Poor's
credit analyst Joe Morin.

Revenues in the MSS segment were down 7% for the six months ended
June 30, 2005, as compared with the same period in 2004.  In
addition, excluding the effect of the Plenexis acquisition in
January 2005, revenues for the broadband segment were down 12%
over the same period.  Reported segment earnings for the
MSS and broadband divisions were down 19% and 26%, respectively,
in first-half 2005 as compared with first-half 2004, due to
competitive pressures and costs associated with the integration of
Plenexis.

Stratos' strategy is to be a consolidator within the industry and
management has indicated its willingness to undertake a debt-
financed transaction in the near term, which could result in
further pressure on the ratings.  The current ratings and outlook
do not factor in any specific acquisition by Stratos, the effect
of which will be addressed should a potential acquisition
materialize.

The ratings on Stratos further reflect the below-average industry
profile of the remote communications sector, which is a highly
competitive niche segment within the broader telecommunications
sector.  Stratos generates more than 70% of its revenues and
segment earnings from the MSS industry as a distributor of mobile
satellite capacity, primarily through Inmarsat Ltd.

Although Stratos has the leading market share of five major
competitors in the MSS division, the market is highly competitive
and is subject to revenue and earnings volatility.  The industry
is fragmented and highly competitive as the vast majority of MSS
are provided through a network of wholesale distributors.

Similarly, Stratos' other major business segment, broadband
services, which involves the provision of data services to remote
locations via satellite or microwave solutions, is also highly
fragmented and competitive.  Stratos is expected to remain an
industry leader within this niche segment of the
telecommunications industry.

The negative outlook reflects Standard & Poor's concerns regarding
the company's recent operating performance, including the decline
in revenues and reported segment earnings.  The ratings on Stratos
factor in our expectation that the company will maintain lease-
adjusted debt to EBITDA at or below 3.5x.  Should competitive
pressures result in Stratos not being able to improve operating
performance in second half, and credit measures deteriorate
materially, the ratings could be lowered.  Should the company
announce an acquisition, the effect on ratings will be addressed
when sufficient information becomes available.  Should any
potential transaction result in a material degradation of key
credit measures, however, a lowering of the ratings would be more
likely.  Should the company be able to improve operating
performance and maintain credit ratios at current levels, the
outlook could be revised to stable.


TOBACCO ROW: Copy of Confirmed Chapter 11 Plan Available
--------------------------------------------------------
As reported in the Troubled Company Reporter on Fri., Aug. 4,
2005, the Honorable Douglas O. Tice Jr. of the U.S Bankruptcy
Court for the Eastern District of Virginia confirmed the Plan of
Reorganization filed by Tobacco Row Phase 1a Development, L.P.
Judge Tice confirmed the Plan on June 27, 2005.  

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

   http://www.researcharchives.com/bin/download?id=050804035836

Headquartered in Richmond, Virginia, Tobacco Row Phase 1a
Development, L.P., owns the Tobacco Row apartment buildings, which
are in three former tobacco warehouse buildings, called the
Cameron, Cameron Annex and Kinney buildings.  The Company filed
for chapter 11 protection on October 22, 2003 (Bankr. E.D. Va.
Case No. 03-40033). Bruce H. Matson, Esq., and Christopher A.
Jones, Esq., at LeClair Ryan, A Professional Corporation
represents the Debtor.  When the Company filed for protection from
its creditors, it listed estimated assets and debts of
$10 million to $50 million.



TOWER AUTOMOTIVE: Wants Court to Approve Steel Supply Agreement
---------------------------------------------------------------
Matthew A. Cantor, Esq., at Kirkland & Ellis LLP, in New York,
relates that Tower Automotive Inc. and its debtor-affiliates spent
approximately $900 million on steel purchases for their North
American operations in 2004.

Steel is the primary raw material in most of the products
manufactured by the Debtors.  Thus, the ability to insulate
against steel price fluctuations and to ensure a reliable supply
of steel, Mr. Cantor explains, is essential to the Debtors'
business and to their ability to stabilize their cash flows.

In 2003, the Debtors entered into a long-term agreement with
National Material L.P., wherein National Material provides three
different types of processed steel used by the Debtors to
manufacture frames for four different Nissan vehicle models.  The
Steel Supply Agreement allows the Debtors to save approximately
$20 million through the end of 2006.

The Debtors believe that very few steel processing companies have
the capacity or infrastructure to support the steel supply
network required for the Debtors' Nissan production.  The
Debtors, Mr. Cantor says, do not intend to rely on a series of
smaller, regional steel processors to do the work.

According to Mr. Cantor, National Material is one of the Debtors'
best and most reliable steel supplier.  Since the inception of
the Steel Supply Agreement, National Material has consistently
met and exceeded the Debtors' quality and on-time delivery
requirements.

The Debtors and National Material have agreed that the cure cost
related to the assumption of the Steel Supply Agreement is $7.491
million.  Of this amount, National Material will be able to
assert set-off and reclamation claims for approximately $900,000.
Therefore, the true "cost" of paying the $7.491 million Cure
Claim is approximately $6.6 million.

Mr. Cantor informs Judge Gropper that if the Debtors assume the
Steel Supply Agreement, National Material will:

   (a) provide the Debtors with significantly better trade terms;

   (b) restore the 60-day trade terms under the Agreement, which
       will improve the Debtors' liquidity position by more than
       $10 million over the next few months, on a permanent going
       forward basis; and

   (c) pay the Debtors the full amount of approximately
       $2 million in rebates at issue.

Hence, the Debtors seek the U.S. Bankruptcy Court for the Southern
District of New York's authority to assume the Steel Supply
Agreement and pay the Cure Claim.

The Debtors do not waive any material avoidance actions against
National Material by their decision to assume the Steel Supply
Agreement.

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: Wants to Assume Seagull Software Agreements
-------------------------------------------------------------
Tower Automotive, Inc., is a party to several software licensing
agreements with Seagull Software Systems, Inc., pursuant to which
Tower uses and duplicates Seagull's proprietary software in
connection with Tower's business operations, subject to certain
limitations and restrictions.

A composite copy of the Seagull Agreements with related
documentation is available for free at:

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

The Seagull applications, according to Anup Sathy, Esq., at
Kirkland & Ellis LLP, in Chicago, Illinois, allow personnel in
the field to enter data into Tower's system via an interface as
opposed to requiring each user to sit at Tower's central terminal
and enter the data manually.  As a result, these applications
provide Tower's purchasing and receiving departments with a means
by which to obtain accurate reports as to Tower's entire
manufacturing process at any given time.

Seagull also provides Tower with certain critical maintenance and
training services related to the Seagull software applications.
These services include a hotline and 24-hour on-line trouble-
shooting service, in addition to technical support staff whom
Seagull will dispatch to Tower's location to train Tower
personnel and respond to inquiries and problems regarding
installation, general use, connectivity, and reproducible
problems that may arise with respect to the software.

The total estimated cost to Tower for continued maintenance
service under the Seagull Agreements is approximately $10,000 per
year.  No additional licensing fees are required.

By this motion, the Debtors ask the U.S. Bankruptcy Court for the
Southern District of New York for authority to assume
the Seagull Agreements.

The Debtors believe that their continued use of the Seagull
software is integral to their ongoing business operations.  
Tower's day-to-day inventory management process is dependent on
the Seagull software and its data entry applications.

Without the continued dedicated and prompt availability of
technical support, training and service from Seagull, Tower, Mr.
Sathy tells the Court, will be unable to properly utilize the
Seagull software, and further risks incurring significant
administrative costs to replace and install alternate software.

Upon Court approval of the Debtors' request, the Debtors will pay
Seagull $62,648, on account of all outstanding prepetition
amounts owing to Seagull by Tower.  The Cure Amount, Mr. Sathy
reports, arises from unpaid prepetition amounts owed to Seagull
pursuant to the Seagull Agreements for the Seagull software, and
related maintenance and advisory services.

Tower is not obligated to pay for any additional charge related
to re-installation of services under the Seagull Agreements.

Mr. Sathy informs the Court that the Official Committee of
Unsecured Creditors has reviewed the Seagull Agreements and has
raised no objection to the Debtors' assumption of the Seagull
Agreements and payment of the Cure Amount.

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)


UAL CORP: Barclay Bank Wants $14.4 Million Admin. Expenses Paid
---------------------------------------------------------------
UAL Corporation and its debtor-affiliates financed two Boeing
737-322 Aircraft with Tail Nos. N323UA and N324UA, through
Leveraged Leases.  In both prepetition transactions, the Debtors
leased the Aircraft from Wilmington Trust Company, as Owner
Trustee.  The Owner Trustee issued Loan Certificates pursuant to
Trust Indentures and Mortgages.  The Owner Trustee received an
equity contribution by the Owner Participants, AT&T Credit
Holdings, Inc., for Tail No. N323UA, and Cimmred Leasing Company
for Tail No. N324UA.  State Street Bank & Trust was Indenture
Trustee for both Indentures.  Barclays Bank PLC holds the Loan
Certificates.

On July 15, 2003, the Debtors entered into Term Sheets with
Barclays, which contemplated converting the Leases into operating
leases, Michael P. Richman, Esq., at Mayer, Brown, Rowe & Maw, in
New York City, relates.  The Term Sheets expressly reserved
Barclays' rights to administrative rent:

     "In the event that definitive lease documents evidencing
     the transactions contemplated by this Term Sheet are not
     entered into, the Lessor (or the Financiers as applicable)
     reserves the right to assert an administrative claim based
     upon the lease rate set forth in the Existing lease
     documents (without regard to the terms hereof)."

On September 23, 2003, the Term Sheet was approved and the
Debtors were authorized to execute the operative definitive
documentation.  However, the definitive documentation was never
completed, Mr. Richman says.  The Term Sheet Termination Dates
were extended many times, finally terminating on November 30,
2004.  Had the definitive documentation been completed, the
Debtors would have paid Barclays an administrative claim for
postpetition use and possession of the Aircraft at the new
monthly lease rate.  The Debtors would have continued to pay this
rate going forward, including pro ration for partial month's use
of the Aircraft.

On January 4, 2005, the Debtors and Barclays entered into a
Letter Agreement whereby the Debtors agreed to return the
Aircraft.  On January 24, the Court authorized the Debtors to
reject the Leases.  Barclays assigned the Loan Certificates to a
subsidiary, which then directed the Indenture Trustees to
foreclose the liens on the estates of the Owner Trustees.

Mr. Richman tells the Court that the Debtors used the Aircraft
and engines for over two years without making any payments.
Barclays wants compensation for rent due under each Lease for use
of each Aircraft until the effective date of rejection.

Under the Lease for N323UA, the Debtors owe postpetition rent of
$6,216,993 for:

          December 9, 2002                $190,367
          February 10, 2003              2,534,389
          August 10, 2003                  488,631
          February 10, 2004              2,606,178
          August 10, 2004                 397,4282

Under the Lease for N324UA, the Debtors owe postpetition rent of
$6,219,469 for:

          December 9, 2002                $311,834
          February 10, 2003              2,390,292
          August 10, 2003                  573,126
          February 10, 2004              2,551,172
          August 10, 2004                  393,045

In addition to a total rent of $12,436,462, Barclays wants
$1,689,088 for attorneys' fees and expenses.

Mr. Richman asserts that the Court should allow an administrative
expense claim in favor of Barclays for $14,125,550.

Headquartered in Chicago, Illinois, UAL Corporation --  
http://www.united.com/-- through United Air Lines, Inc., is the   
holding company for United Airlines -- the world's second largest
air carrier.  The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191).  James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts.  (United Airlines
Bankruptcy News, Issue No. 96; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


UAL CORP: Committee Retains Parthenon Group as Economic Expert
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
gave the Official Committee of Unsecured Creditors appointed in
UAL Corporation and its debtor-affiliates' chapter 11 cases
permission to retain the Parthenon Group as an economic
expert, effective as of July 20, 2005.  Parthenon will provide
the Committee with assistance in the formulation and prosecution
of its objection to the Pension Benefit Guaranty Corporation's
Claims.

                       The PBGC Claims

Pursuant to its pension termination agreement with the Debtors,
the Pension Benefit Guaranty Corporation calculated its claims
using rates from the PBGC regulations.  The Debtors relinquished
the right to challenge the PBGC Claims, but the Official Committee
of Unsecured Creditors retained this right.

Carole Neville, Esq., at Sonnenschein, Nath & Rosenthal, in New
York City, says the Committee intends to object to the PBGC's
calculation assumptions for its Claims, specifically the PBGC's
failure to use the prudent investor rate and its reliance on a
rate derived from its regulations in calculating the underfunded
pension liabilities.

The PBGC has stated that the Debtors' Pension Plans were
underfunded by $9,800,000,000.  According to Ms. Neville, the
PBGC's calculation "is grossly overstated."  If allowed as filed,
the PBGC's Claims will comprise over a third of the total
estimated amount of unsecured claims in the Chapter 11
proceedings, which will have a dramatic effect on plan voting and
the recovery of unsecured creditors.

Parthenon was founded in 1991 as a boutique strategic advisory
firm.  Parthenon has offices in Boston, London and San Francisco.
Its clients include Global 1000 companies, high/emerging growth
companies and private equity firms.  Parthenon's professionals
hail from various backgrounds including economics, law,
accounting and finance.

Dr. Roger E. Brinner is the Parthenon professional who will
primarily work with the Committee.  Dr. Brinner is a
distinguished economist and business advisor.  He frequently
testifies before Congress on budget, taxation, and policy issues
and served as Senior Staff Economist on the Council of Economic
Advisors.  Dr. Brinner was a professor at Harvard University and
the Massachusetts Institute of Technology, and led the economic
research group, Standard & Poors/Data Resources, for more than 20
years.  Dr. Brinner holds a B.A. from Kalamazoo College and a
Ph.D. in economics from Harvard University.

Dr. Brinner recently worked on similar issues in In re Kaiser
Aluminum Corp., Case No. 02-10429, pending in the U.S. Bankruptcy
Court for the District of Delaware.  Dr. Brinner also provided
expert testimony on the claims asserted by the PBGC in the Kaiser
case.  The Committee, therefore, trusts that Dr. Brinner is
uniquely qualified to assist it.

Dr. Brinner will perform economic evaluations for the Committee
with a concentration on evaluating the fair value of the PBGC's
Claims.  He will also analyze use of the prudent investor rate of
return and evaluate the PBGC's calculations of its unfunded
benefit liability claim.

Parthenon's professionals will paid on an hourly basis.  The
rates for Parthenon's professionals range from $275 to $600 per
hour.  Parthenon will likewise be reimbursed for related
expenses, including messenger and delivery charges, telephone,
facsimile, photocopy and other similar charges.

Dr. Brinner assures Judge Wedoff that Parthenon does not hold or
represent any interest adverse to the Debtors, their estates or
the Committee and its constituents, with respect to the
litigation for which Parthenon is to be employed.

                        Debtors Respond

Marc Kieselstein, Esq., at Kirkland & Ellis, in Chicago,
Illinois, informs the Court that KPMG LLP, the Committee's
accounting and restructuring advisor, has already spent hundreds
of hours analyzing the Debtors' pension plans.  Between June 2004
and March 2005, KPMG spent 3,900 hours analyzing the pension
plans, other employee benefit issues and related issues.

Mr. Kieselstein argues that the Committee's statement that its
professionals would have to start at "square one" in analyzing
the PBGC's Claims is clearly at odds with all of the work already
performed by KPMG in pension matters.

The Debtors are not against the Committee's proposed retention of
a "truly necessary professional" to analyze the PBGC's
$9,800,000,000 in Claims.  However, the Debtors believe that
before retaining Parthenon, the Committee must explain why KPMG
cannot perform the same analysis.

                        *     *     *

Judge Wedoff rules that Parthenon Group's fees will be capped at
$300,000, without prejudice to the Official Committee of
Unsecured Creditors' right to seek a waiver of the limitation.

Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the   
holding company for United Airlines -- the world's second largest
air carrier.  The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191).  James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts.  (United Airlines
Bankruptcy News, Issue No. 96; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


UAL CORP: Withdraws Motion to Approve Citigroup Cooperation Pact
----------------------------------------------------------------
As reported in the Troubled Company Reporter on Aug. 2, 2005, UAL
Corporation and its debtor-affiliates asked the U.S. Bankruptcy
Court for the Northern District of Illinois for permission to
enter into a cooperation agreement with Citigroup Global Markets,
Inc., and Citigroup North America, Inc., with respect to a
proposed restructuring of the 1997-1 EETC Transaction.

Under the Cooperation Agreement:

  a) the Junior Tranche Holder will exercise its right to
     purchase the Senior Tranche;

  b) Citigroup will purchase the Senior, B and C Tranches from
     the Junior Tranche Holder;

  c) the Debtors and Citigroup will amend the interim adequate
     protection stipulation governing the 1997-1 EETC, and
     restructure and refinance the obligations under the Senior,
     B and C Tranches, as set forth in the Cooperation Agreement;

  d) the funds expended by Citigroup in the Cooperation Agreement
     will be syndicated in the private market or refinanced
     through a public market transaction; and

  e) the Debtors will pay Citigroup an accommodation fee.

James H.M. Sprayregen, Esq., at Kirkland & Ellis, in Chicago,
Illinois relates that under the Cooperation Agreement, the
total indebtedness of the Senior, B and C Tranches will be
substantially reduced.  Under the Cooperation Agreement, the cash
flows required to service the restructured debt will be lower
than if the B and C Tranches were acquired by an unfriendly third
party, perhaps affiliated with the Trustees.  The 14 aircraft in
the 1997-1 EETC would no longer be at risk for repossession.  If
the Debtors do not move quickly, profit-minded investors may
attempt to maneuver within the 1997-EETC's tranches to gain
leverage to extract enhanced financial returns from the Debtors.

Since the Cooperation Agreement contains confidential commercial
information, it will be filed with the Court under seal.  The
Debtors have provided copies of the Cooperation Agreement to the
Creditors Committee's professionals, the Committee -- other than
indenture trustees with aircraft holdings -- and the DIP Lenders.

                      Wells Fargo Objects

Wells Fargo Bank is Indenture Trustee for the 1997-1 EETC
Transaction.  Ann Acker, Esq., at Chapman and Cutler, in Chicago,
Illinois, argues that the Debtors are asking for greater secrecy
than is allowed by accepted practice and the disclosure
requirements of the Federal Securities Laws.

Ms. Acker asserts that Wells Fargo has an interest in
ascertaining the terms of the Cooperation Agreement.  As the
1997-1 EETC Trustee, Wells Fargo must know if the terms of the
Cooperation Agreement implicate the rights of the
Certificateholders it represents.

The Debtors offer no justification for their extraordinary
request for secrecy other than their own self-serving assertion
that the Cooperation Agreement contains highly sensitive
information that they deem to be proprietary and confidential,
Ms. Acker says.  The labels and characterizations do nothing to
meet legal disclosure requirements.

Wells Fargo should not have to guess how the Cooperation
Agreement impacts the rights of its Certificateholders, Ms. Acker
conitnues.  Wells Fargo is ready to enter into a confidentiality
agreement to prevent any dissemination of confidential business
information.

                       Request Withdrawn

The Debtors have withdrawn their request.

Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the   
holding company for United Airlines -- the world's second largest
air carrier.  The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191).  James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts.  (United Airlines
Bankruptcy News, Issue No. 96; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


US AIRWAYS: 9/11 Tort Plaintiffs Agrees to Waive Claims
-------------------------------------------------------
Before US Airways, Inc., and its debtor-affiliates filed their
second bankruptcy petition, the September 11, 2001 Tort Litigation
Plaintiffs filed civil actions against them in the U.S. District
Court for the Southern District of New York.  The Actions have
been consolidated before the Honorable Alvin K. Hellerstein under
the caption "In re September 11 Litigation," Civil Action No.
21-MC-97(AKH).  The Actions assert liability against the Debtors.

In March 2005, Judge Hellerstein separated out claims involving
property loss and business loss into a separate case, now pending
as Civil Action No. 21-MC-101(AKH).  The remaining Plaintiffs
under Civil Action No. 21-MC-97(AKH) assert liability against the
Debtors for personal injury or wrongful death.

On the Petition Date, the Plaintiffs were automatically stayed
from commencing or continuing the Actions to seek recovery for
damages.  Various Plaintiffs have filed Claims in the Debtors'
cases.

The Plaintiffs are willing to waive all claims against the
Debtors and seek recovery solely from insurance coverage.  The
Debtors have agreed to modify the stay to permit the Plaintiffs
to pursue this matter to judgment or settlement.  The Plaintiffs
will withdraw their claims.

Marc S. Moller, Esq., at Kreindler & Kreindler, in New York City,
representing the Executive Committee for the September 11, 2001
Tort Litigation Plaintiffs, signs the Stipulation.

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: Gets Court Nod to Hire Merrill Lynch as Dealer Manager
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia
gave US Airways, Inc., and its debtor-affiliates permission to
hire Merrill Lynch, Pierce, Fenner & Smith Incorporated as dealer
manager to facilitate the distribution and exercise of rights by
recipients in the Rights Offering contemplated in the Plan of
Reorganization.  

Pursuant to the Rights Offering, the Debtors will distribute
rights to purchase 9,090,909 shares of Reorganized US Airways
Group common stock to record holders of Class A and Class B common
stock of America West, and to certain unsecured creditors.  More
specifically, America West Class A and Class B common stockholders
will receive transferable subscription rights based on the number
of shares owned, while certain unsecured creditors will receive
non-transferable subscription rights based on the dollar amounts
of claims allowed to vote on the Plan.  The common stock will have
a par value of $0.01 per share.

Each subscription right entitles its holder to purchase one share
of US Airways Group common stock for $16.50, Brian P. Leitch,
Esq., at Arnold & Porter, in Denver, Colorado, explains.
Participants may purchase additional shares for $16.50 under an
over-subscription privilege.  Unexercised rights will expire
without payment to the holders.

Merrill Lynch is an active trader in airline securities, including
those of the Debtors and America West.  Merrill Lynch has provided
investment-banking services to America West.  Merrill Lynch is
currently acting as structuring advisor to America West for the
Rights Offering.

US Airways Group will indemnify Merrill Lynch in the performance
of Rights Offering services.  Merrill Lynch will be paid 2.75% of
the aggregate subscription price for all shares of common stock
that are issued in the Rights Offering.  Moreover, the Debtors
will pay:

  (a) all fees and expenses for the preparation, filing,
      printing, mailing and publishing of Rights Offering
      materials;

  (b) all fees and expenses of the Subscription Agent and
      Information Agent;

  (c) all advertising charges;

  (d) all fees and expenses of brokers, dealers, banks and trust
      companies for forwarding the Rights Offering materials to
      their customers;

  (e) all fees and expenses to register or qualify the securities
      under state securities or "blue sky" laws;

  (f) all listing fees and other fees and expenses associated
      with listing the shares on the New York Stock Exchange;

  (g) the filing fee of the National Association of Securities
      Dealers; and

  (h) all other fees and expenses connected with the Rights
      Offering.

The Debtors will mail the Rights Offering prospectus after the
U.S. Bankruptcy Court for the Eastern District of Virginia
approves the Disclosure Statement, which is anticipated to occur
by August 9, 2005.

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


VARIG S.A.: Board Names Omar da Cunha As New Company President
--------------------------------------------------------------
VARIG, S.A. has reorganized its senior management structure to
ensure that the Company's operations and financial restructuring
will be handled by seasoned leaders.  According to Dow Jones
Newswires, VARIG has appointed Omar Carneiro da Cunha to lead the
airline's operations, replacing Henrique Neves.  Mr. Neves,
former VARIG president, stepped down to focus on the airline's
Reorganization Plan.

Mr. Cunha will keep his seat on VARIG's board of directors.  His
position as deputy chairman, however, has been handed to another
director, Eleazar de Carvalho Filho.

In a statement, VARIG Chairman David Zylberstajn said the same
team that took over VARIG in mid-May 2005 remains in place and is
united it its efforts to resolve the airline's problems.

Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.  
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia.  VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.  

The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage.  The Debtors may be the first case under the new law,
which took effect on June 9, 2005.  Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization.  Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil

Each of the Debtors' Boards of Directors authorized Vicente Cervo
as foreign representative.  In this capacity, Mr. Cervo filed a
Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-
14400 and 05-14402).  Rick B. Antonoff, Esq., at Pillsbury
Winthrop Shaw Pittman LLP represents Mr. Cervo in the United
States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts.  (VARIG Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


VARIG S.A.: Six Companies Eye Cargo Units
-----------------------------------------
VARIG, S.A., said six companies are interested in buying its cargo
and maintenance units, Bloomberg News reports citing Folha de S.
Paulo.

The airline may sell a stake or full control in the units as a
part of its reorganization plan, according to VARIG Chairman David
Zylbersztajn and Chief Executive Omar Carneiro da Cunha.

As previously reported, VARIG has until September 12, 2005, to
present its reorganization plan to creditors.

Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.  
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia.  VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.  

The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage.  The Debtors may be the first case under the new law,
which took effect on June 9, 2005.  Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization.  Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil

Each of the Debtors' Boards of Directors authorized Vicente Cervo
as foreign representative.  In this capacity, Mr. Cervo filed a
Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-
14400 and 05-14402).  Rick B. Antonoff, Esq., at Pillsbury
Winthrop Shaw Pittman LLP represents Mr. Cervo in the United
States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts.  (VARIG Bankruptcy News, Issue No. 05; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


VARIG S.A.: TAP Air to Present Acquisition Bid in September
-----------------------------------------------------------
TAP Air Portugal intends to present a new bid to buy a 20% stake
in VARIG, S.A., in September 2005 after the Brazilian airline
submits its restructuring plan, TAP Chief Executive Fernando Pinto
said.

TAP's offer will be more complex than the initial bid because it
will have to be presented to VARIG creditors, Mr. Pinto indicated
in an interview.  TAP will only invest in VARIG when its
reorganization is concluded.

Other investors from Portugal and other countries have also
expressed interest in participating in the VARIG bid, Lisbon
newspaper Diario de Noticias reported.

Varig has resurrected discussions with TAP Air Portugal about a
scheme to save the debt-laden Brazilian airline from bankruptcy.
TAP has hired the investment bank J.P. Morgan as a financial
adviser for a deal in which the Portuguese carrier would buy a 20%
stake in VARIG, according to VARIG Chairman David Zylberstajn.

Diario Economico, citing an unidentified VARIG insider, reported
that TAP would have to pay about $400 million to buy the 20% stake
in the airline company.

Mr. Zylberstajn said the current proposal would create a new
company, to be called Nova Varig.  Under the plan, VARIG's
current controlling shareholder, the Rubem Berta Foundation,
would hold no more than 10% of the new company.

The Rubem Berta Foundation, which represents VARIG employees, had
blocked previous attempts to restructure the airline.  But it
later agreed to relinquish control and hired Lufthansa Consulting
to draw up a restructuring plan.

Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's
largest air carrier and the largest air carrier in Latin America.  
VARIG's principal business is the transportation of passengers and
cargo by air on domestic routes within Brazil and on international
routes between Brazil and North and South America, Europe and
Asia.  VARIG carries approximately 13 million passengers annually
and employs approximately 11,456 full-time employees, of which
approximately 133 are employed in the United States.  

The Company, along with two affiliates, filed for a judicial
reorganization proceeding under the New Bankruptcy and
Restructuring Law of Brazil on June 17, 2005, due to a competitive
landscape, high fuel costs, cash flow deficit, and high operating
leverage.  The Debtors may be the first case under the new law,
which took effect on June 9, 2005.  Similar to a chapter 11
debtor-in-possession under the U.S. Bankruptcy Code, the Debtors
remain in possession and control of their estate pending the
Judicial Reorganization.  Sergio Bermudes, Esq., at Escritorio de
Advocacia Sergio Bermudes, represents the carrier in Brazil

Each of the Debtors' Boards of Directors authorized Vicente Cervo
as foreign representative.  In this capacity, Mr. Cervo filed a
Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-
14400 and 05-14402).  Rick B. Antonoff, Esq., at Pillsbury
Winthrop Shaw Pittman LLP represents Mr. Cervo in the United
States.  As of March 31, 2005, the Debtors reported
BRL2,979,309,000 in total assets and BRL9,474,930,000 in total
debts.  (VARIG Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


VILLAS AT HACIENDA: Western Plains Wants Ch. 11 Trustee Appointed
-----------------------------------------------------------------
Western Plains Development Corp., a creditor of Villas at Hacienda
del Sol, Inc., asks the U.S. Bankruptcy Court for the District of
Arizona to appoint a chapter 11 trustee in the Debtor's bankruptcy
proceeding.

Western Plains asserts a $1,800,000 claim that's secured by a
mechanic's lien.  The claim stems from a Construction Contract
Cost Plus between Western Plains and Villas at Hacienda signed on
Oct. 22, 2002.  Lewis and Roca LLP, counsel of Western Plains
tells the Court that under the contract, Western Plains, a
licensed contractor, agreed to build an apartment complex for the
Debtor.  

Since its bankruptcy filing, the Debtor has made no payments to
Western Plains.  Yet, subcontractors and suppliers have asked for
payments from the general contractor.  Some subcontractors and
suppliers even sued Western Plains.

Western Plains contends that the Debtor's management has a
fiduciary duty to the estate, with obligations to all creditors,
not simply to the interests of the owners.  Western Plains charges
that Villas' management operates:

   -- with a calculated hostility toward Western Plains and its
      requests for information, including those embodied in this
      Court's discovery order;

   -- with indifference to a matter as simple as obtaining a cash
      collateral stipulation with the Secretary of Housing and
      Urban Development for almost 3 months;

   -- with calculated unfairness to the owner of the Elks'
      property, forcing the adjoining owner to seek stay relief
      and quiet title over abandonment of an unused easement; and

   -- without regard to the requirements of payments to counsel.

Western Plains believes that the management of the Debtor's
business operations while in chapter 11 should be given to a
disinterested third party.  Accordingly, Western Plains urges the
Court to approve the appointment of a chapter 11 trustee.

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.


VISION METALS: Court Dismisses Chapter 11 Case
----------------------------------------------
The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the
District of Delaware approved, on July 28, 2005, Vision Metals,
Inc, and Vision Metals Holdings, Inc.'s request to dismiss their
chapter 11 cases.

The Debtors tell the Court that they have substantially completed
the liquidation of their assets including pursuing causes of
action and resolving secured and administrative claims filed
against them.  The Debtors add that no funds are presently
available for the continued administration of their bankruptcy
estates.

Robert Bassman, the Debtors' Chief Executive and Chief
Restructuring Officer, will conduct the wind down of the Debtors'
business as a Responsible Person.  Pursuant to the dismissal
order, Mr. Bassman will receive these amounts:

       Entity                         Amount
       ------                         ------
     Foley Trust Account             $50,000
     Foley $ Lardner LLP              20,000
     Daley Hodkin                     45,000
     The Bayard Firm                   6,000
                                     -------
     Total                          $121,000

Within 15 days from the entry of the dismissal order, Mr. Bassman
will pay the claimants identified on a list available at no charge
at http://researcharchives.com/t/s?b0

As previously reported in the Troubled Company Reporter, the
Debtors have a pending adversary proceeding against SMS Demag,
Inc.  The Debtors specifically proposed that the Court's
jurisdiction of the Demag Litigation continue subsequent to the
dismissal of their bankruptcy cases.  

Proceeds from the Demag Litigation will be paid:

    a) first to Whitford Taylor, the Debtors' counsel in the
       adversary proceeding;

    b) second to the Pension Benefit Guaranty Fund up to a maximum
       amount of $100,000; and

    c) third, to the DIP lenders up to a maximum amount of $1.2
       million.

As previously reported in the Troubled Company Reporter, the
Debtors asserted a $75,924 claim in an adversary proceeding
against PTC Alliance Corp.  The PBGC is entitled to receive the
first $25,000 of any recoveries from the PTC Alliance litigation.

Vision Metals, Inc., and Vision Metals Holdings, Inc., filed for
chapter 11 protection on Nov. 13, 2000 (Bankr. D. Del. Case No.
00-04205).  Michigan Seamless Tube LLC purchased the assets of the
Michigan Specialty Tube Division of Vision Metals, Inc., in a
Section 363 sale in 2002.  Salvatore A. Barbatano, Esq., at
Foley & Lardner LLP, represents the Debtors.  Sharon L. Levine,
Esq., at Lowenstein Sandler PC, represents the Official Committee
of Unsecured Creditors.


W.R. GRACE: Wants to Acquire Single-Site Assets for $1.5 Million
----------------------------------------------------------------
W.R. Grace & Co., and its debtor-affiliates seek the U.S.
Bankruptcy Court for the District of Delaware's authority to
acquire the technology and certain assets of Single-Site
Catalysts, LLC, of Chester, Pennsylvania, for a $1.5 million cash
payment at closing plus earnout payments estimated to equal to
$2.8 million on discounted basis for over ten years.  The
acquisition would be made by the Debtors' Grace Davison business
unit, which, among other products, sells polymerization catalysts
to polyolefin producers.

David W. Carickhoff, Esq., at Pachulski, Stang, Ziehl, Young,
Jones & Weintraub P.C., in Wilmington, Delaware, informs the
Court that Single-Site sells single site polymerization catalysts
that is used in high performance polymers for applications like
high strength and high clarity food packaging.  That segment is
expected to grow between 15 to 20% per year, and the market for
those catalysts is projected to be $140 million in 2010 and to
exceed $270 million in 2015.

Single-Site primarily owns Metallocene Catalyst intellectual
property and has limited research and development assets.  The
technology was developed over a ten-year period and relates to
the synthesis and manufacture of Metallocene Catalysts and their
components.  Mr. Carickhoff says that its products are supplied
through contract manufacture by an affiliate, Norquay Technology,
Inc., and its research is performed by independent consultants.
Single-Site's sales in 2004 were $2.3 million and are projected
to be $3.8 million in 2005.

Mr. Carickhoff relates that one aspect of Davison's strategy is
to increase the value of its business by expanding into those
segments of the polyolefin catalyst market that are experiencing
high growth.

Specifically, Davison has entered into:

    (i) joint research and development projects with technology
        owners in next generation single site metallocene resins;

   (ii) agreements to supply catalysts made in accordance with the
        recipes of customers for linear low density polyethylene;
        and

  (iii) the acquisition of the polyolefin and polypropylene
        manufacturing assets of Borealis in 2002.

The Debtors expect sale of Davison's existing portfolio of olefin
polymerization catalysts, which includes chrome and Ziegler-Natta
polymerization catalysts, to grow five to eight percent per year
over the next five years.

Under the terms of a Letter of Intent that the Debtors signed
with Single-Site, the Debtors will purchase:

    (a) all of Single-Site's technology for Metallocene Catalysts
        and components;

    (b) related trademarks;

    (c) inventory, with an estimated value of $400,000;

    (d) customer contracts for $1.5 million to be paid at closing;
        and

    (e) a ten-year earnout, payable quarterly, equal to:

        * 3% of net sales of products manufactured using the
          acquired technology below $5 million;

        * 8% of net sales between $5 million and $10 million; and

        * 5.5% of net sales exceeding $10 million.

The total discounted estimated Contingent Payments is $2.8
million.  Mr. Carickhoff maintains that the Debtors would not
purchase any cash and accounts receivable or real property from
Single-Site and would not assume any of Single-Site's liabilities
or contractual obligations other than those in the customer
contracts.

Mr. Carickhoff further states that closing of the transaction
will be subject to the Debtors' receipt, among other
requirements, of a satisfactory supply agreement with Norquay,
and a service agreement with Single-Site for development of new
and existing products.

"The Debtors have a history of successful "bolt-on" acquisitions
of that sort, which are, and will continue to be, integral to the
Debtors' growth strategy, and will give the Debtors access to
product lines, technologies and markets that they cannot
economically develop internally," Mr. Carickhoff says.  "Combined
with its other initiatives and acquisitions, the proposed
acquisition continues the Debtors' strategy to improve Davison's
value by participating in those markets which are growing most
rapidly."

In addition, Mr. Carickhoff contends that the Single-Site
acquisition is particularly attractive because it would allow the
Debtors to combine their silica material and catalyst science
expertise with metallocene components in the design, manufacture
and sale of polyolefin catalysts.

"The acquisition of Single-Site is an excellent growth
opportunity for the Debtors," Mr. Carickhoff concludes.  "The
acquisition would combine the Debtors' 80 years of silica and 60
years of catalysis expertise with Single-Site's proven technology
and demonstrated success in producing Metallocene Catalysts."

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)


WACHOVIA BANK: S&P Puts Low-B Ratings on Six Certificate Classes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Wachovia Bank Commercial Mortgage Trust's $3.7 billion
commercial mortgage pass-through certificates series 2005-C20.

The preliminary ratings are based on information as of Aug. 4,
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-3FL,
A-3FX, A-4, A-5, A-6, A-PB, A-7, A-1A, A-MFL, A-MFX, 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 1.56, a beginning LTV of 99.2%, and
an ending LTV of 92.0%.

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

         Wachovia Bank Commercial Mortgage Trust 2005-C20

     Class         Rating     Preliminary          Recommended
                                amount          credit support(%)
     -----         ------     -----------       -----------------
     A-1           AAA        $85,000,000                  30.000
     A-2           AAA       $148,096,000                  30.000
     A-3FL         AAA       $179,875,000                  30.000
     A-3FX         AAA       $179,875,000                  30.000
     A-4           AAA       $225,000,000                  30.000
     A-5           AAA       $121,177,000                  30.000
     A-6           AAA       $268,951,000                  30.000
     A-PB          AAA       $175,888,000                  30.000
     A-7           AAA       $861,941,000                  30.000
     A-1A          AAA       $318,883,000                  30.000
     A-MFL         AAA       $183,192,000                  20.000
     A-MFX         AAA       $183,192,000                  20.000
     A-J           AAA       $274,788,000                  12.500
     B             AA         $77,856,000                  10.375
     C             AA-        $27,479,000                   9.625
     D             A          $68,697,000                   7.750
     E             A-         $41,218,000                   6.625
     F             BBB+       $41,218,000                   5.500
     G             BBB        $32,059,000                   4.625
     H             BBB-       $41,218,000                   3.500
     J             BB+        $22,899,000                   2.875
     K             BB         $13,739,000                   2.500
     L             BB-        $13,739,000                   2.125
     M             B+          $9,160,000                   1.875
     N             B           $9,160,000                   1.625
     O             B-          $9,160,000                   1.375
     P             N.R.       $50,377,891                   0.000
     X-P*          AAA     $3,531,024,000                     N/A
     X-C*          AAA     $3,663,837,891                     N/A

           * Interest-only class with a notional dollar amount.
           N.R. -- Not rated.
           N/A -- Not applicable.


WEIRTON STEEL: Trust Gets Court Nod to Amend WVWCC Settlement Pact
------------------------------------------------------------------
The Weirton Steel Corporation Liquidating Trust asks the U.S.
Bankruptcy Court for the Northern District of West Virginia to
allow it to amend a settlement agreement dated Aug. 19, 2004,
between Weirton Steel Corporation and the West Virginia Workers'
Compensation Commission.

Mark E. Freedlander, Esq., at McGuireWoods, in Pittsburgh,
Pennsylvania, relates that the Settlement Agreement resolved
substantial claims asserted by the Worker's Compensation
Commission against Weirton and allowed the Commission a priority
claim for $10,277,958.

The Weirton Steel Corporation Liquidating Trustee has alleged to
the Commission certain credits to which, the Trustee asserts, the
Trust is entitled.  These credits would reduce the amount of the
Allowed Priority Claim.

To avoid the costs, risks, delay and uncertainty associated with
litigation arising from the interpretation of rights, duties and
obligations under the Settlement Agreement, the Liquidating
Trustee and the Commission have agreed to reduce the amount of
the Allowed Priority Claim to $9,200,000, without further right
of credit or offset for the Trust's benefit.  The Trust will pay
the reduced amount of the Allowed Priority Claim to the
Commission.

Judge Friend approves the Amended Settlement Agreement.

Headquartered in Weirton, West Virginia, Weirton Steel Corporation
was a major integrated producer of flat rolled carbon steel with
principal product lines consisting of tin mill products and sheet
products.  The company was the second largest domestic producer of
tin mill products with approximately 25% of the domestic market
share. The Company filed for chapter 11 protection on May 19,
2003 (Bankr. N.D. W. Va. Case No. 03-01802).  Judge L. Edward
Friend, II administers the Debtors' cases.  Robert G. Sable, Esq.,
Mark E. Freedlander, Esq., David I. Swan, Esq., James H. Joseph,
Esq., at McGuireWoods LLP, represent the Debtors in their
liquidation.  Weirton sold substantially all of its assets to
Wilbur Ross' International Steel Group.  Weirton's confirmed Plan
of Liquidation became effective on Sept. 8, 2004. (Weirton
Bankruptcy News, Issue No. 46; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


WESTCOM CORP: Moody's Withdraws All Debt Ratings
------------------------------------------------
Moody's Investors Service has withdrawn all ratings for WestCom
Corporation for business reasons.

WestCom had previously planned to recapitalize its balance sheet
by issuing publicly tradable Canadian Income Participating
Securities and refinancing existing bank debt with new senior
secured bank debt - a $15 million revolver and a $105 million term
loan.  On July 1, 2005, Moody's assigned a B2 corporate family
rating to WestCom and B1 ratings to the revolver and term loan.
WestCom, however, has decided not to proceed with the IPS
transaction.  The company has therefore, also decided not to
refinance its existing bank debt (unrated by Moody's) with new
bank debt resulting in the ratings withdrawal.

Moody's has withdrawn these ratings:

   * Corporate family rating -- B2

   * $15 million senior secured revolving credit facility
     maturing 2010 -- B1

   * $105 million senior secured term loan maturing 2010 -- B1

WestCom is a provider of trader voice services to financial
services firms in North America and Europe.  The company is
headquartered in New York, New York.


WINN-DIXIE: 20 Creditors Transfer $2,348,361 in Claims
------------------------------------------------------
For June 2005, the Clerk of the Bankruptcy Court for the Middle
District of Florida recorded 135 claim transfers totaling
$2,348,361 in Winn-Dixie Stores, Inc., and its debtor-affiliates'
chapter 11 cases.  The Claim Transfers include:

Transferor                Transferee                Claim Amount
----------                ----------                ------------
Action Vacuums & Repairs  Trade-Debt.net                  $134
Aramark Uniform           Madison Investment Trust     328,680
Baker Distributing Co.    Madison Investment Trust     334,746
BMK Inc. Central          Madison Investment Trust     400,631
BMK Inc. West             Madison Investment Trust     122,621
Consolidated Biscuit Co.  SPCP Group, LLC.             916,570
Falcon Rice Mill Inc.     Madison Investment Trust      16,936
Faucet Parts Of America   Debt Acquisition Company         137
Gadsden County Times      Trade-Debt.net                   900
George County Times       Debt Acquisition Company         850
Jose H. Porquez MD PC     Trade-Debt.net                   320
Keyboard Advertising      Trade-Debt.net                   817
Mother Murphys Lab Inc.   Madison Investment Trust       3,838
Performance Oil Equipment Madison Investment Trust      56,796
Requa Inc.                Debt Acquisition Company         515
Specialty Bakers Inc.     Madison Investment Trust      11,787
SMS Unlimited Inc.        Madison Investment Trust      10,798
Sturm Foods               Madison Investment Trust      82,360
Tropical Del Campo Inc.   Trade-Debt.net                 1,075
Webeco Foods Inc.         Madison Investment Trust      57,850

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


WINN-DIXIE: Ruddick Corp. Acquires Nine Stores for $16.75 Million
-----------------------------------------------------------------
Ruddick Corporation (NYSE: RDK) announced Harris Teeter
supermarket subsidiary entered into an agreement to purchase nine
supermarket stores located throughout its core markets of North
Carolina from a subsidiary of Winn-Dixie Stores, Inc.  The
agreement calls for the purchase of the leasehold interest for
each of the nine supermarkets for an aggregate purchase price of
$16.75 million.  

In addition, Harris Teeter is required to purchase other assets,
including inventories, and to assume the leases.  It is expected
that Harris Teeter will also remodel the purchased stores.  The
agreement is being entered into in connection with the Seller's
bankruptcy proceedings and is subject to numerous conditions
including bankruptcy court approval.  The agreement permits the
Seller to continue to solicit offers for the stores until the time
of the bankruptcy court approval.  Consequently, no assurance can
be given that Harris Teeter will successfully close on the
transaction for any or all of the stores.  If successful, closing
is expected to occur during early August, at which time Ruddick
will provide additional information.

Ruddick Corporation is a holding company with two primary
operating subsidiaries: Harris Teeter, Inc., a regional chain of
supermarkets in six southeastern states and American & Efird,
Inc., a leading manufacturer and distributor of industrial sewing
thread with global operations.

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


WORLDCOM INC: Court Disallows Michael Jordan's $8 Million Claim
---------------------------------------------------------------
Judge Gonzalez denied Michael Jordan's request to allow his $8
million claim, without prejudice.

As reported in the Troubled company Reporter on March 21, 2005,
Michael Jordan and WorldCom, Inc., entered into an agreement,
which provided for WorldCom's right to use Mr. Jordan's name,
likeness, and personal services, to develop, manufacture, produce,
sell, distribute, advertise and promote WorldCom's products and
services.

The Agreement, which provided for a 10-year contract term,
precluded Mr. Jordan from conducting certain activities,
including:

    (1) unreasonably withholding approval of packaging,
        advertising or promotional materials; and

    (2) using products or services which the Debtors' competitors
        produced or provided as long as alternatives were
        reasonably available from non-competitors.

The agreement also contained a confidentiality clause, provisions
for termination, and a non-assignment clause that prohibited
Mr. Jordan from transferring his rights or obligations under the
agreement without the Debtors' prior written consent.

On January 16, 2003, Mr. Jordan filed Claim No. 11414 for
$2 million, plus contingent and unliquidated amounts allegedly for
unpaid annual compensation due on June 30, 2002, under the
Agreement.

Mark Shaiken, Esq., at Stinson Morrison Hecker LLP, in Kansas
City, Missouri, relates that the Debtors rejected the Agreement on
July 18, 2003.

On August 14, 2003, Mr. Jordan amended his original claim with
Claim No. 36077.  Mr. Jordan alleged that the Debtors owed him $8
million pursuant to the rejected Agreement.

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. (WorldCom
Bankruptcy News, Issue No. 96; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


WORLDCOM INC: Wants Withdrawal of N.Y. Fund Claims Recognized
-------------------------------------------------------------
Adam P. Strochak, Esq., at Weil, Gotshal & Manges, in Washington,
D.C., relates that various actions were filed in 2002 in the
United States District Court for the Southern District of New
York, by and on behalf of persons who purchased or otherwise
acquired publicly traded securities of WorldCom, Inc.  The
securities fraud actions have been consolidated in In re WorldCom
Securities Litigation and are currently pending before District
Court Judge Denise L. Cote.

The District Court appointed Alan G. Hevesi, Comptroller of New
York State and the sole Trustee of the New York State Common
Retirement Fund, as lead plaintiff in the WorldCom Securities
Litigation.  The District Court certified the WorldCom Securities
Litigation as a class action on October 24, 2003.

Former WorldCom CEO Bernard J. Ebbers is a defendant in the
WorldCom Securities Litigation.  The Class seeks billions of
dollars in damages from him and other defendants in the WorldCom
Securities Litigation.

                    The Securities Fraud Claims

On January 21, 2003, the New York Fund filed five proofs of claim,
in its capacity as an individual claimant and as a putative
representative of the Class:

    (1) Claim No. 18172 -- individual claim for damages in excess
        of $57 million based on the purchase or sale of MCI
        Communications Corporation debt securities;

    (2) Claim No. 18173 -- individual claim for damages in excess
        of $31 million based on the purchase or sale of WorldCom,
        Inc., debt securities;

    (3) Claim No. 18174 -- individual claim for damages in excess
        of $335 million based on the purchase or sale of WorldCom,
        Inc., equity securities;

    (4) Claim No. 18175 -- putative class proof of claim for
        damages in excess of $60 billion based on the purchase or
        sale of equity securities; and

    (5) Claim No. 18176 -- putative class proof of claim for
        damages in excess of $17 billion based on the purchase or
        sale of debt securities.

Various state and municipal retirement systems filed substantially
similar proofs of claim, seeking damages on account of the
purchase or sale of equity or debt securities of WorldCom or its
subsidiaries:

    Claimant                                            Claim No.
    --------                                            ---------
    Arkansas Teachers Retirement System                    23121

    Arkansas Public Employees Retirement System            22945
                                                           22946

    Arizona State Retirement System                22900 - 22909

    Iowa Public Employees Retirement System                20239

    Iowa Public Employees Retirement System                20240

    Kentucky Teachers' Retirement System                   18235

    Pennsylvania State Employees'                          16154
    Retirement System                                      16155

    Public School Teachers Pension                         22941
    & Retirement Fund of Chicago

                          Claims Objection

In their 14th Omnibus Objection to Claims, WorldCom, Inc. and its
debtor-affiliates asked the Bankruptcy Court to reclassify,
subordinate and expunge numerous proofs of claim, including the
New York Fund Claims and the Other Fund Claims.  The Bankruptcy
Court has adjourned the hearing to consider the Securities Fraud
Claims.

The Debtors subsequently sought a summary judgment on the
Securities Fraud Claims, arguing that the claims are not entitled
to any distributions under the Plan because the claims are
subordinated under Section 510(b) of the Bankruptcy Code.  The
Debtors' summary judgment motion has been briefed and argued
before Judge Adlai S. Hardin, Jr., and currently is under
advisement.

                        The Ebbers Settlement

The Debtors, the Class and Mr. Ebbers participated in intense,
arm's-length negotiations to resolve the claims against Mr.
Ebbers in the WorldCom Securities Litigation.  The United States
Attorney for the Southern District of New York facilitated the
parties' settlement discussion.  The negotiations culminated in a
tripartite agreement, which provides for:

    -- Mr. Ebbers' turnover of substantially all of his assets;
       and

    -- the allocation of those assets among the Class and the
       Debtors in satisfaction of their claims against Mr. Ebbers.

In consideration of the agreement to allocate a substantial
portion of the Ebbers assets to the Class, the New York Fund has
agreed to withdraw its claims against the Debtors, with prejudice.

The Ebbers Settlement further contemplates the establishment of a
liquidating trust for the benefit of the Class and the Debtors.
The Debtors will contribute to the Liquidating Trust the Joshua
Holdings Promissory Note, which was pledged and endorsed to the
Debtors as collateral security for the financing arrangements it
made with Mr. Ebbers prior to the Petition Date.

To the extent a recovery is realized on the Joshua Holdings
Promissory Note, the recovery will be allocated 2/3 to the Class
and 1/3 to the Debtors.  Otherwise, the Liquidating Trust will
distribute 75% of the liquidated value of its assets to the Class,
and 25% to the Debtors.

Mr. Strochak explains that in consideration of the withdrawal of
the New York Fund Claims, Class members who have not opted out
will receive distributions on account of their securities fraud
claims against the Debtors.  However, the precise amount of any
distributions related to the Joshua Holdings Promissory Note and
other unliquidated assets cannot be determined at this time.
Those distributions will be made after Judge Cote's final approval
of all settlements and a plan of distribution, and after the
Liquidating Trust liquidates its assets.

Pursuant to Rule 7023 of the Federal Rules of Bankruptcy
Procedure, the Reorganized Debtors ask the Bankruptcy Court to
recognize the withdrawal of the New York Fund Claims in the
context of the Ebbers Settlement and the related intercreditor
agreement, as a settlement of claims on behalf of the entire
Class.

The Reorganized Debtors further ask the Court to disallow the
Other Fund Claims as duplicative.

Resolution of the New York Fund Claims will result in
distributions to all members of the Class on account of the
securities fraud claims against the Debtors.  Mr. Strochak
contends that upon certification of a class proof of claim for
settlement purposes, any other proofs of claim by Class members
seeking damages on account of similar claims are duplicative.
"Failure to disallow duplicative claims would permit double
recoveries and vitiate the compromise effected by the Settlement
between the Debtors and the New York Fund."

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. (WorldCom
Bankruptcy News, Issue No. 96; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


* Wilmer Cutler Adds Three New Lawyers to Palo Alto Office
----------------------------------------------------------
Wilmer Cutler Pickering Hale and Dorr LLP disclosed the addition
of Rod J. Howard, Peter S. Buckland, and Joseph K. Wyatt to its
newly established office in Palo Alto, California.  The three new
hires have joined Curtis L. Mo, who opened the Palo Alto office in
June.

Rod Howard, Esq., joins Wilmer Hale as a partner in the Corporate
Department and will help lead the firm's mergers and acquisitions
efforts.  Mr. Howard, formerly of Weil, Gotshal & Manges LLP, is a
seasoned mergers and acquisitions attorney in Silicon Valley.  He
represents numerous public and private companies, financial
investors and investment banks in mergers, acquisitions and
divestitures, negotiated and contested takeovers, auctions, cross-
border transactions, leveraged buyouts, and takeover defense.  He
also counsels senior management and boards of directors of major
public companies on corporate governance and SEC compliance
matters. Howard was previously a partner and global head of
mergers and acquisitions at a major Silicon Valley law firm.

Peter Buckland, Esq., and Joe Wyatt, Esq., each join the firm as
Counsel in the firm's Corporate Department.  Both have extensive
experience in representing companies ranging from emerging growth
companies to public companies in capital markets transactions,
private placements, venture capital financings, mergers and
acquisitions, and general corporate matters.  They are also
experienced in advising investment banks as underwriters' counsel
and private equity sponsors in leveraged buyouts.  Messrs.
Buckland and Wyatt were formerly with the Silicon Valley office of
Weil, Gotshal & Manages LLP.

"I am thrilled to join the Wilmer Hale team," said Mr. Howard.  
"The firm is a well-known leader in the technology and life
sciences sectors, and I look forward to working with them to build
the Palo Alto office, which is already off to a great start."

"I am excited to be working once again with my colleagues and
friends," said Curtis Mo, partner and head of Wilmer Cutler
Pickering Hale and Dorr's Palo Alto office.  "As our West Coast
office continues to attract more high-level talent, we will
continue to provide the best legal representation for our
clients."

Wilmer Hale's new Palo Alto office was established to extend the
firm's corporate, intellectual property, intellectual property
litigation, and securities litigation and enforcement practices.  
The corporate practice is known for its preeminence in the
representation of technology and life sciences companies in the
United States and Europe.  Through the Palo Alto office, the firm
will be able to better serve those clients who are based on the
West Coast and, more specifically, in Silicon Valley--the largest
technology, life sciences, and venture capital market in the
world.

Wilmer Cutler Pickering Hale and Dorr LLP --
http://www.wilmerhale.com/-- is nationally and internationally  
recognized for its premier practices in antitrust and competition;
aviation; bankruptcy; civil and criminal trial and appellate
litigation (including white collar defense); communications;
corporate (including public offerings, public company counseling,
start-up companies, venture capital, mergers and acquisitions, and
licensing); defense and national security; financial institutions;
intellectual property counseling and litigation; international
arbitration; life sciences; securities regulation, enforcement and
litigation; tax; and trade. Wilmer Cutler Pickering Hale and Dorr
was formed in May 2004 through the merger of two of the nation's
leading law firms, Hale and Dorr LLP and Wilmer Cutler Pickering
LLP.  With a staunch commitment to public service, the firm is
renowned as a national leader in pro bono representation.  The
firm has more than 1,000 lawyers and offices in Baltimore,
Beijing, Berlin, Boston, Brussels, London, Munich, New York,
Northern Virginia, Oxford, Palo Alto, Waltham and Washington, DC.


* BOND PRICING: For the week of Aug. 1 - Aug. 5, 2005
-----------------------------------------------------

Issuer                                Coupon   Maturity  Price
------                                ------   --------  -----
ABC Rail Product                      10.500%  01/15/04     0
Adelphia Comm.                         3.250%  05/01/21     5
Adelphia Comm.                         6.000%  02/15/06     4
AHI-DFLT07/05                          8.625%  10/01/07    57
Allegiance Tel.                       11.750%  02/15/08    28
Amer. & Forgn Pwr.                     5.000%  03/01/30    73
Amer. Color Graph.                    10.000%  06/15/10    71
Amer. Plumbing                        11.625%  10/15/08    16
Amer. Restaurant                      11.500%  11/01/06    66
American Airline                       7.377%  05/23/19    75
American Airline                       7.379%  05/23/16    72
American Airline                      10.180%  01/02/13    72
American Airline                      10.680%  03/04/13    65
American Airline                      11.000%  05/06/15    69
Ameritruck Distr                      12.250%  11/15/05     1
AMR Corp.                              9.750%  08/15/21    71
AMR Corp.                              9.800%  10/01/21    72
AMR Corp.                              9.820%  10/25/11    73
AMR Corp.                              9.880%  06/15/20    53
AMR Corp.                             10.000%  04/15/21    70
AMR Corp.                             10.200%  03/15/20    73
AMR Corp.                             10.450%  03/10/11    63
AMR Corp.                             10.550%  03/12/21    69
Anchor Glass                          11.000%  02/15/13    61
Antigenics                             5.250%  02/01/25    60
Anvil Knitwear                        10.875%  03/15/07    55
AP Holdings Inc.                      11.250%  03/15/08    15
Apple South Inc.                       9.750%  06/01/06     5
Asarco Inc.                            7.875%  04/15/13    70
Asarco Inc.                            8.500%  05/01/25    68
AT Home Corp.                          0.525%  12/28/18     7
AT Home Corp.                          4.750%  12/15/06    32
ATA Holdings                          12.125%  06/15/10    20
ATA Holdings                          13.000%  02/01/09    20
Atlantic Coast                         6.000%  02/15/34    15
Atlas Air Inc.                         8.770%  01/02/11    57
Atlas Air Inc.                         9.702%  01/02/08    58
Autocam Corp.                         10.875%  06/15/14    66
B&G Foods Hldg.                       12.000%  10/30/16     8
Bank New England                       8.750%  04/01/99     9
Bank New England                       9.500%  02/15/96     9
BBN Corp.                              6.000%  04/01/12     0
Big V Supermarkets                    11.000%  02/15/04     0
Burlington North                       3.200%  01/01/45    61
Calpine Corp.                          4.750%  11/15/23    75
Calpine Corp.                          7.750%  04/15/09    68
Calpine Corp.                          7.875%  04/01/08    72
Calpine Corp.                          8.500%  02/15/11    69
Calpine Corp.                          8.625%  08/15/10    69
Calpine Corp.                          8.750%  07/15/13    74
Cell Therapeutic                       5.750%  06/15/08    71
Cellstar Corp.                        12.000%  01/15/07    72
Cendant Corp.                          4.890%  08/17/06    50
Charter Comm Inc.                      5.875%  11/16/09    72
Charter Comm Inc.                      5.875%  11/16/09    67
Ciphergen                              4.500%  09/01/08    72
Collins & Aikman                      10.750%  12/31/11    30
Color Tile Inc.                       10.750%  12/15/01     0
Comcast Corp.                          2.000%  10/15/29    43
Comprehens Care                        7.500%  04/15/10    23
Cons Container                        10.125%  07/15/09    70
Conseco Inc.                           9.000%  10/15/06     0
Covad Communication                    3.000%  03/15/24    70
Covant-Call 07/05                      7.500%  03/15/12    69
Cray Inc.                              3.000%  12/01/24    53
Cray Research                          6.125%  02/01/11    43
Delco Remy Intl                        9.375%  04/15/12    68
Delta Air Lines                        2.875%  02/18/24    33
Delta Air Lines                        7.299%  09/18/06    45
Delta Air Lines                        7.700%  12/15/05    40
Delta Air Lines                        7.711%  09/18/11    59
Delta Air Lines                        7.779%  11/18/12    42
Delta Air Lines                        7.779%  01/02/12    42
Delta Air Lines                        7.900%  12/15/09    23
Delta Air Lines                        7.920%  11/18/10    55
Delta Air Lines                        8.000%  06/03/23    21
Delta Air Lines                        8.270%  09/23/07    47
Delta Air Lines                        8.300%  12/15/29    19
Delta Air Lines                        8.540%  01/02/07    44
Delta Air Lines                        8.540%  01/02/07    60
Delta Air Lines                        8.540%  01/02/07    36
Delta Air Lines                        8.540%  01/02/07    63
Delta Air Lines                        9.000%  05/15/16    19
Delta Air Lines                        9.200%  09/23/14    31
Delta Air Lines                        9.250%  03/15/22    18
Delta Air Lines                        9.375%  09/11/07    56
Delta Air Lines                        9.480%  06/05/06    66
Delta Air Lines                        9.750%  05/15/21    18
Delta Air Lines                        9.875%  04/30/08    69
Delta Air Lines                       10.000%  08/15/08    24
Delta Air Lines                       10.000%  06/01/10    36
Delta Air Lines                       10.000%  06/01/11    43
Delta Air Lines                       10.125%  05/15/10    20
Delta Air Lines                       10.140%  08/26/12    46
Delta Air Lines                       10.375%  02/01/11    22
Delta Air Lines                       10.375%  12/15/22    24
Delta Air Lines                       10.430%  01/02/11    50
Delta Air Lines                       10.500%  04/30/16    47
Delta Air Lines                       10.790%  09/26/13    36
Delta Air Lines                       10.790%  03/26/14    24
Delphi Auto System                     7.125%  05/01/29    74
Delphi Trust II                        6.197%  11/15/33    55
Dura Operating                         9.000%  05/01/09    70
DVI Inc.                               9.875%  02/01/04     8
Eagle-Picher Inc.                      9.750%  09/01/13    73
Edison Brothers                       11.000%  09/26/07     0
Empire Gas Corp.                       9.000%  12/31/07     3
Exodus Comm. Inc.                      5.250%  02/15/08     0
Fedders North Am.                      9.875%  03/01/14    72
Federal-Mogul Co.                      7.375%  01/15/06    27
Federal-Mogul Co.                      7.500%  01/15/09    28
Federal-Mogul Co.                      8.160%  03/06/03    24
Federal-Mogul Co.                      8.370%  11/15/01    24
Federal-Mogul Co.                      8.800%  04/15/07    27
Fibermark Inc.                        10.750%  04/15/11    64
Finova Group                           7.500%  11/15/09    46
Firstworld Comm                       13.000%  04/15/08     0
Foamex L.P.                            9.875%  06/15/07    30
Foamex L.P.                           13.500%  08/15/05    55
GMAC                                   6.000%  03/15/19    75
GMAC                                   6.100%  09/15/19    75
GMAC                                   6.600%  06/15/19    74
Golden Books Pub                      10.750%  12/31/04     0
Graftech Int'l                         1.625%  01/15/24    66
HNG Internorth                         9.625%  03/15/06    37
Holt Group                             9.750%  01/15/06     0
Impsat Fiber                           6.000%  03/15/11    75
Inland Fiber                           9.625%  11/15/07    43
Integrated Elec. Sv                    9.375%  02/01/09    74
Integrated Elec. Sv                    9.375%  02/01/09    74
Interep Natl. Rad                     10.000%  07/01/08    75
Intermet Corp.                         9.750%  06/15/09    46
Iridium LLC/CAP                       10.875%  07/15/05    21
Iridium LLC/CAP                       11.250%  07/15/05    20
Iridium LLC/CAP                       13.000%  07/15/05    21
Iridium LLC/CAP                       14.000%  07/15/05    20
Kaiser Aluminum & Chem.               12.750%  02/01/03     8
Kellstorm Inds                         5.750%  10/15/02     0
Kmart Corp.                            8.990%  07/05/10    72
Kmart Funding                          8.800%  07/01/10    35
Lehman Bros. Hldg                      7.500%  09/03/05    68
Level 3 Comm. Inc.                     2.875%  07/15/10    54
Level 3 Comm. Inc.                     5.250%  12/15/11    71
Level 3 Comm. Inc.                     6.000%  09/15/09    54
Level 3 Comm. Inc.                     6.000%  03/15/10    53
Liberty Media                          3.250%  03/15/31    75
Liberty Media                          3.750%  02/15/30    58
Liberty Media                          4.000%  11/15/29    62
Macsaver Financl                       1.625%  01/15/24    66
Metaldyne Corp.                       11.000%  06/15/12    74
Mississippi Chem                       7.250%  11/15/17     4
Muzak LLC                              9.875%  03/15/09    55
MSX Intl. Inc.                        11.375%  01/15/08    64
Natl Steel Corp.                       8.375%  08/01/06     2
Natl Steel Corp.                       9.875%  03/01/09     1
New World Pasta                        9.250%  02/15/09     8
Nexprise Inc.                          6.000%  04/01/07     0
Northern Pacific Railway               3.000%  01/01/47    60
Northwest Airlines                     7.248%  01/02/12    51
Northwest Airlines                     7.360%  02/01/20    52
Northwest Airlines                     7.626%  04/01/10    55
Northwest Airlines                     7.691%  04/01/17    68
Northwest Airlines                     7.875%  03/15/08    42
Northwest Airlines                     8.070%  01/02/15    41
Northwest Airlines                     8.130%  02/01/14    40
Northwest Airlines                     8.700%  03/15/07    54
Northwest Airlines                     8.875%  06/01/06    61
Northwest Airlines                     9.875%  03/15/07    45
Northwest Airlines                    10.000%  02/01/09    43
Northwest Airlines                    10.500%  04/01/09    50
NTK Holdings Inc.                     10.750%  03/01/14    54
Nutritional Src.                      10.125%  08/01/09    74
Oakwood Homes                          7.875%  03/01/04    16
Oakwood Homes                          8.125%  03/01/09    20
O'Sullivan Ind.                       13.375%  10/15/09     5
Orion Network                         11.250%  01/15/07    54
Outboard Marine                        7.000%  07/01/02     0
Outboard Marine                        9.125%  04/15/17     0
Owens Corning                          7.000%  03/15/09    72
Owens Corning                          7.700%  05/01/08    74
Owens-Crng Fiber                       8.875%  06/01/02    71
Pegasus Satellite                      9.750%  12/01/06    54
Pegasus Satellite                     12.375%  08/01/06    54
Pegasus Satellite                     12.500%  08/01/07    54
Pen Holdings Inc.                      9.875%  06/15/08    63
Pixelworks Inc.                        1.750%  05/15/24    71
Polaroid Corp.                         6.750%  01/15/02     0
Polaroid Corp.                         7.250%  01/15/07     0
Polaroid Corp.                        11.500%  02/15/06     0
Primedex Health                       11.500%  06/30/08    50
Primus Telecom                         3.750%  09/15/10    20
Primus Telecom                         5.750%  02/15/07    33
Primus Telecom                         8.000%  01/15/14    50
Primus Telecom                        12.750%  10/15/09    38
Radnor Holdings                       11.000%  03/15/10    67
Raintree Resorts                      13.000%  12/01/04    13
RDM Sports Group                       8.000%  08/15/03     0
Read-Rite Corp.                        6.500%  09/01/04    52
Realco Inc.                            9.500%  12/15/07    45
Reliance Group Holdings                9.000%  11/15/00    27
Reliance Group Holdings                9.750%  11/15/03     0
Salton Inc.                           10.750%  12/15/05    73
Salton Inc.                           12.250%  04/15/08    50
Silicon Graphics                       6.500%  06/01/09    74
Solectron Corp.                        0.500%  02/15/34    70
Specialty Paperb.                      9.375%  10/15/06    66
Sun World Int'l.                      11.250%  04/15/04    11
Tom's Foods Inc.                      10.500%  11/01/04    70
Tower Automotive                       5.750%  05/15/24    32
Trans Mfg Oper                        11.250%  05/01/09    58
Triton PCS Inc.                        8.750%  11/15/11    71
Triton PCS Inc.                        9.375%  02/01/11    72
Tropical SportsW                      11.000%  06/15/08    40
United Air Lines                       6.831%  09/01/08    56
United Air Lines                       6.932%  09/01/11    72
United Air Lines                       7.270%  01/30/13    43
United Air Lines                       7.371%  09/01/06    10
United Air Lines                       7.762%  10/01/05    28
United Air Lines                       7.811%  10/01/09    67
United Air Lines                       8.030%  07/01/11    52
United Air Lines                       8.700%  10/07/08    50
United Air Lines                       9.000%  12/15/03    16
United Air Lines                       9.020%  04/19/12    42
United Air Lines                       9.125%  01/15/12    18
United Air Lines                       9.200%  03/22/08    45
United Air Lines                       9.300%  03/22/08    35
United Air Lines                       9.350%  04/07/16    51
United Air Lines                       9.560%  10/19/18    41
United Air Lines                       9.750%  08/15/21    17
United Air Lines                      10.125%  03/22/15    47
United Air Lines                      10.250%  07/15/21    16
United Air Lines                      10.670%  05/01/04    18
United Air Lines                      11.210%  05/01/14    14
Univ. Health Services                  0.426%  06/23/20    61
US Air Inc.                           10.250%  01/15/07     2
US Air Inc.                           10.250%  01/15/07     5
US Air Inc.                           10.250%  01/15/07     4
US Air Inc.                           10.300%  01/15/08    15
US Air Inc.                           10.300%  07/15/08    15
US Air Inc.                           10.610%  06/27/07     2
US Air Inc.                           10.900%  01/01/08     2
US Airways Pass-                       6.820%  01/30/14    60
UTStarcom                              0.875%  03/01/08    74
Venture Hldgs                          9.500%  07/01/05     0
Venture Hldgs                         11.000%  06/01/07     0
WCI Steel Inc.                        10.000%  12/01/04    65
Werner Holdings                       10.000%  11/15/07    69
Wheeling-Pitt St.                      5.000%  08/01/11    65
Wheeling-Pitt St.                      6.000%  08/01/10    65
Winn-Dixie Store                       8.875%  04/04/08    72
World Access Inc.                     13.250%  01/15/08     6
Xerox Corp.                            0.570%  04/21/18    30


                          *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.  
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com.

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                          *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published by  
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,  
USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L.  
Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Jazel P.
Laureno, Cherry Soriano-Baaclo, Marjorie Sabijon, Terence Patrick
F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo Junior M.
Pinili, and Peter A. Chapman, Editors.

Copyright 2005.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $675 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher Beard
at 240/629-3300.

                *** End of Transmission ***