TCR_Public/050809.mbx       T R O U B L E D   C O M P A N Y   R E P O R T E R

           Tuesday, August 9, 2005, Vol. 9, No. 187

                          Headlines

360NETWORKS: Automotive Logic Wants Objection to Claims Overruled
ADVANTA CORP: S&P Upgrades Counterparty Credit Rating to B+ from B
AIR ENTERPRISES: Completes 363 Asset Sale to Resilience Capital
AIRXCEL INC: S&P Places Single-B Corporate Credit Rating on Watch
ALLIED HOLDINGS: Hires Lamberth Cifelli as Special Counsel

ALLIED HOLDINGS: Hires Miller Buckfire as Financial Advisor
ALPHA NATURAL: S&P Upgrades Sr. Unsecured Rating to B- from CCC+
AMRESCO FRANCHISE: Fitch Cuts Rating on Class C Certificates to C
ANC RENTAL: Inks Pact Resolving Hawaii Tax Claims for $2.6 Million
ANCHOR GLASS: Files for Chapter 11 Protection in M.D. Florida

ANCHOR GLASS: Case Summary & 20 Largest Unsecured Creditors
ANTHRACITE CDO: Fitch Holds BB Rating on $43.8MM Class F Notes
AOL LATIN AMERICA: Court Okays Bankruptcy Services as Claims Agent
AOL LATIN AMERICA: Files Schedules of Assets & Liabilities
ATA AIRLINES: Wants to Enter Into IAA & Regions Bank Agreement

ATKINS NUTRITIONAL: Look for Bankruptcy Schedules on Sept. 29
ATKINS NUTRITIONAL: Hires Weil Gotshal as Bankruptcy Counsel
ATLANTIC EXPRESS: Moody's Junks Senior Secured Notes' Rating
BALLY TOTAL: Noteholders Issue Notice of Default Under Indentures
BEAUTY THERAPIES: Case Summary & 20 Largest Unsecured Creditors

BIG 5: Search for New CFO Begins Amid Financial Restatements
BISHOP GOLD: Disputes Guardsmen Resources' Default Claim
BRANDON BELL: List of 17 Largest Unsecured Creditors
CAMP WOOD: Chapter 9 Case Summary & 20 Largest Unsecured Creditors
CAPTEC FRANCHISE: Fitch Junks Rating on Seven Certificate Classes

CATHOLIC CHURCH: Spokane Cash Mgt. Order Hearing Set for Sept. 12
CATHOLIC CHURCH: Spokane Litigants Hires Traxi LLC as Advisor
CENTRAL WAYNE: Wants Solicitation Period Stretched to Sept. 30
COLUMBUS MCKINNON: Soliciting Consents to Eliminate Default
CONNECTOR 2000: S&P Affirms B- Ratings on $153 Mil. Revenue Bonds

DEEN PREFILLED: List of 20 Largest Unsecured Creditors
DELPHI CORP: Moody's Junks Corporate Family & Sr. Unsec. Ratings
DELPHI CORP: S&P Junks Corporate Credit & Senior Unsecured Ratings
DELPHI CORP.: Reports $338 Mil. Q2 Loss & Gives Bankruptcy Warning
DELPHI CORPORATION: GM Says It's Considering a Bail-Out Plan

EAST 44TH REALTY: Wants Davidoff Malito as Bankruptcy Counsel
ENRON CORP: CIBC Will Pay $274 Million to Settle MegaClaims Suit
ENRON CORP: SEC Okays Financing Application Until July 31, 2008
ENRON CORP: Wants Court to Nix KBC Bank's Claims
ENRON CORP: Wants to Terminate Employee Benefits Trust

EUGENE PEARSON: Case Summary & 20 Largest Unsecured Creditors
EXIDE TECH: Director Eugene Davis Resigns from Board
FACTORY 2-U: Ch. 7 Trustee Hires Peisner Johnson as Tax Consultant
FACTORY 2-U: Trustee Wants Richard Franklin as Claims Auditor
FLIGHTLEASE HOLDINGS: Foreign Reps. Want Dr. Corti's Testimony

FLOWSERVE CORP: S&P Rates $1 Billion Credit Facility at BB-
GLOBAL CROSSING: Andersen Settles Class Action Suit for $25 Mil.
HIGHLANDERS ALLOYS: List of 13 Largest Unsecured Creditors
INTERSTATE BAKERIES: Court Okays $515,000 Detroit Property Sale
INTERSTATE BAKERIES: Wants Court to Nix D. Huffman's $2.4M Claim

IPIX CORP: Reports Financial Results for Second Quarter 2005
JP MORGAN: Fitch Places BB+ Rating on $11.7MM Private Certs.
KB HOME: Fitch Retains BB+ Rating on Senior Unsecured Debt
KMART CORP: Settles Meesob Investment Rejection Claim for $2.2MM
LBACK DEVELOPMENT: Two Disclosure Statements on the Table

LEWIS REAL: Voluntary Chapter 11 Case Summary
MARIA BUITRON: List of 11 Largest Unsecured Creditors
MCI INC: Adopts Performance-Based Incentive Awards Payment
MERIDIAN AUTOMOTIVE: Court Approves Pact With Four Utility Cos.
MERIDIAN AUTOMOTIVE: Court Okays Stipulation With General Motors

METRIS MASTER: Fitch Places Sub Classes on Rating Watch Positive
MOUNT VERNON: Case Summary & 20 Largest Unsecured Creditors
NATIONAL ENERGY: Post-Confirmation Report Ended April 2005
NRG ENERGY: High Court Upholds Refund Case Dismissal
OIL STATE: Case Summary & 20 Largest Unsecured Creditors

PACIFIC ENERGY: Moody's Affirms $250 Million Notes' Ba2 Rating
PACIFIC ENERGY: S&P Affirms Double-B Corporate Credit Rating
PACIFIC GAS: Asks Court to Direct Deutsche Bank to Release $743K
PILLOWTEX CORP: Wants PFGI Shares Declared as Estate Property
PLASSEIN INT'L: Chapter 7 Trustee Hires KCC as Noticing Agent

PRIME CAMPUS: Prefers Dismissal of Bankruptcy Proceeding
RAYTECH CORP: Fails to Comply with NYSE Listing Standards
RELIANCE GROUP: Liquidator Settles $2.6 Million Claims with NYU
RESIDENTIAL ASSET: Fitch Assigns Low-B Rating on 3 Cert. Classes
SAFETY-KLEEN: Modifying Injunction for Mr. Ratke to Pursue Action

SAINT VINCENTS: Hamre Wants Stay Lifted to Consummate Settlement
SAINT VINCENTS: Wants Lease Decision Period Extended to Jan. 2006
SAINT VINCENTS: Unit Receives $10K Grant From Senator Oppenheimer
SKYWAY COMMUNICATIONS: Talib Parties Want Bankruptcy Dismissed
SONICBLUE INC: Wants to Hire Grobstein Horwath as Consultants

SPORTS COURTS: Voluntary Chapter 11 Case Summary
STRATOS GLOBAL: Moody's Reviews Ba2 Senior Secured Ratings
TIRO ACQUISITION: Plan Filing Period Intact Until October 10
TITAN CRUISE: Court Okays Glenn Rasmussen as Bankruptcy Counsel
TRIUMPH HEALTHCARE: Moody's Rates New $175 Mil. Facilities at B2

UAL CORP: Committee Gets Court Nod on Farr & Taranto as Counsel
UAL CORP: Flight Attendants Demand Change of Management
USGEN NEW ENGLAND: Wants Court to Nix Brascan Energy's Claims
VARIG S.A.: Wants $5 Mil. Wire to GE Commercial Aviation Returned
VARIG S.A.: To Hire UBS As Restructuring Advisor

VULCAN ENERGY: Moody's Rates Pending $288 Mil. Term Loan B at Ba2
WESTPOINT STEVENS: Wants to Hire Lester Sears to Wind-Down Estate
WILD OATS: Earns $900,000 in Second Quarter 2005
WINN-DIXIE: Maria Burch Wants Stay Lifted to File Workers' Claim

* Large Companies with Insolvent Balance Sheets

                          *********

360NETWORKS: Automotive Logic Wants Objection to Claims Overruled
-----------------------------------------------------------------
Since the Reorganized 360networks, Inc. and its debtor-affiliates
filed their objection to Claim Nos. 3200 and 128300 filed by
Automated Logic Corporation, the hearing on Automated Logic's
claims has been adjourned a number of items.

Steven Wilamowsky, Esq., at Willkie Farr & Gallagher, LLP, in New
York, relates that under the Reorganized Debtors' confirmed plan
of reorganization, Automated Logic is identified as a holder of
Impaired Class 6 Claims for $0.  Pursuant to the Plan, if a holder
of a Class 6 Claim fails to file an objection to the scheduled
amount of its claim, that holder is forever barred from asserting
any claims against the Debtors exceeding the allowed amount of
that claim.  If a timely objection is filed, the holder's claim
will be deemed a Disputed Claim to be resolved in accordance with
the Plan.

Mr. Wilamowsky tells the U.S. Bankruptcy Court for the District of
Southern New York that Automated Logic was served with the Plan
and Disclosure Statement documents, including relevant notices.  
Automated Logic, nonetheless, failed to serve an objection
regarding the treatment of its claims.

As a result, the amount set in the Plan is definitely fixed as the
amount of Automated Logic's claims.  Consequently, Automated Logic
has no outstanding claims against the Reorganized Debtors.

Automated Logic has on file a number of liens on property held by
the Reorganized Debtors.

The Reorganized Debtors ask the Court to expunge Claim Nos. 3200
and 128300, pursuant to the Plan and Confirmation Order, and
require Automated Logic to remove its purported liens.

                      Automated Logic Responds

Automated Logic Corporation filed Claim Nos. 32000 and 128300
against the Debtors on May 6, 2002.  However, the Debtors
contended that Automated Logic is owed $0 because:

    * Claim No. 33200 for $1,137,980 is a duplicate of Claim No.
      128300; and

    * Claim No. 128300 for $527,449 is not reflected as owed on
      the Debtors' books.

According to John A. Roberts, Esq., in Atlanta, Georgia, "[i]t is
not at all clear how the Debtors determine that on one hand, the
claim are not reflected as owed on the Debtors' books; and that
simultaneously, on the other hand, the other claim should be
denied because they are duplicative of claims that the Debtors'
books do not reflect as owed."

Mr. Roberts says that the Debtors have repeatedly argued that they
owe Automotive Logic nothing.  However, Automotive Logic has never
been given proper notice of those positions and has not had an
opportunity to respond to them.

Automotive Logic argues that the Debtors' characterizations of the
Claims are not prima facie evidence of the validity or amount of
those claims.  Furthermore, because Automotive Logic has not
received adequate notice or a chance to be heard on those matters,
the Court should not accept the Debtors' characterization of the
Claims.

Thus, Automotive Logic asks the Court to:

    (a) overrule the Debtors' omnibus objection with respect to
        the Claims;

    (b) allow Automotive Logic to submit a brief and documentary
        evidence in support of the validity of the Claims;

    (c) amend the Debtors' Reorganization Plan as it relates to
        the Claims; and

    (d) set the matter for oral argument.

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)


ADVANTA CORP: S&P Upgrades Counterparty Credit Rating to B+ from B
------------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on
Advanta Corp., including Advanta's long-term counterparty credit
rating, which was raised to 'B+' from 'B.'  The outlook was
revised to stable from positive.
      
"The rating change and outlook revision were driven by solid
leverage metrics and steadily improving earnings in Advanta's
core business credit card operations," said Standard & Poor's
credit analyst Jeffrey Zaun.
     
Advanta faces the likelihood that its niche strategy will be
challenged by intensifying rivalry in the credit card industry.
Standard & Poor's expects that future profitability will be
driven by:

   * a rebounding economy;
   * operating expense efficiencies at the card unit; and
   * transaction flow resulting from Advanta's marketing efforts.


AIR ENTERPRISES: Completes 363 Asset Sale to Resilience Capital
---------------------------------------------------------------
Air Enterprises, Inc., completed the sale of substantially all of
its assets to Resilience Capital Partners LLC, a Cleveland-based
private equity firm.

Air Enterprises has signed a deal to sell its assets to Air
Enterprises Acquisition, LLC, an assignee of Resilience Capital
Partners, LLC, for $2.75 million, pursuant to sections 363 and 365
of the U.S. Bankruptcy Code.  

"We are excited to complete this transaction and be able to bring
Air Enterprises out of bankruptcy.  The management, dedicated
employees and Resilience investors all look forward to the company
returning to the position of strength that it held for many years.  
The company has faced many challenges of late but has remained a
leader in its niche throughout" said Steven Rosen, Managing
Partner of Resilience Capital Partners.

The need for air quality and specialized applications serving
those needs continues to grow.  Air Enterprises is in a unique
position to capitalize on that trend.  "Over the last 40 years Air
Enterprises has sold over 6,000 units and we look forward to
continuing that success.  We are pleased to join with Bill Weber,
the new CEO of Air Enterprises and our partner in this
transaction, to support the turnaround and future success of this
business," said Bassem Mansour, Managing Partner of Resilience
Capital Partners.     

The Air Enterprises transaction is the third acquisition in the
last 12 months and the eighth overall for Resilience.

Resilience Capital Partners -- http://www.resiliencecapital.com/
-- is a private equity firm based in Cleveland, Ohio focused on
investing in underperforming and turnaround situations.  
Resilience's investment strategy is to acquire smaller to middle
market companies that have solid fundamental business prospects,
but have suffered from a cyclical industry downturn, are under-
capitalized, or have less than adequate management resources.  
Resilience typically acquires companies with revenues of $25
million to $250 million.

Headquartered in Akron, Ohio, Air Enterprises, Inc. --
http://www.airenterprises.com/-- designs, engineers, manufactures     
and supports custom air handling systems.  The company specializes
in applications for hospitals, pharmaceutical manufacturers,
research laboratories, universities and other demanding air
quality environments.  The Company filed for chapter 11 protection
on Apr. 27, 2005 (Bankr. N.D. Ohio Case No. 05-52467).  John J.
Guy, Esq., at Guy, Lammert & Towne, represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it estimated liabilities between $1 million to
$10 million.  An estimate of its assets was not provided.


AIRXCEL INC: S&P Places Single-B Corporate Credit Rating on Watch
-----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Wichita,
Kansas-based Airxcel Inc., including its 'B' corporate credit
rating, on CreditWatch with negative implications.
     
The CreditWatch placement follows the company's July 22, 2005,
announcement that Bruckmann, Rosser, Sherrill & Co. will acquire
Airxcel for $146 million less debt and certain other expenses.
Airxcel is the leading manufacturer of:

   * air conditioners;

   * furnaces;

   * water heaters;

   * cooking appliances for recreation vehicles; and

   * makes specialty wall-mount air conditioners for
     telecommunications shelters.
     
"The rating action reflects Standard & Poor's expectations that
the company's financial leverage will likely be more aggressive,
and liquidity and cash flow will be further constrained," said
Standard & Poor's credit analyst Lisa Wright.
     
In connection with the acquisition, Airxcel's senior subordinated
notes due 2007 will be repurchased or redeemed.  The transaction
is expected to close by the end of August 2005, at which time all
ratings will be withdrawn at the company's request.


ALLIED HOLDINGS: Hires Lamberth Cifelli as Special 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 Lamberth, Cifelli, Stokes &
Stout, P.A., as their special conflicts counsel.

According to the Debtors, there may be instances where their lead
counsel, Troutman Sanders LLP, will not be able to represent them
because of potential conflict of interest issues.  There may also
be cases that can be more efficiently handled by Lamberth Cifelli.

Lamberth Cifelli and Troutman Sanders will coordinate their
efforts and delineate their duties to prevent any duplication of
effort and extra expense to the Debtors' estates.

Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, in Atlanta,
Georgia, relates that the Debtors have selected Lamberth Cifelli
because of the firm's considerable experience in bankruptcy and
insolvency matters.

James C. Cifelli, Esq., the principal at Lamberth Cifelli in
charge of representing the Debtors, has been practicing bankruptcy
and insolvency law for more than 28 years.  Mr. Cifelli has
significant experience in complex insolvency matters and related
litigation, and transactions.  He has been admitted to practice in
the Northern District of Georgia since 1977 and is familiar with
the local bankruptcy rules.

The Debtors believe that in preparing for its representation, the
firm has become familiar with their business affairs and many of
the potential legal issues that may arise.

Lamberth Cifelli will advise and represent the Debtors in:

    (a) matters arising out of and relating to the Debtors'
        bankruptcy cases; and

    (b) specified and discreet legal matters, including
        litigation in which the Debtors' general counsel,
        Troutman Sanders, may have a conflict or is otherwise
        unable to represent the Debtors.

The firm will also provide other legal services, including
litigation, as may be requested by the Debtors and that is
appropriate and necessary.

Lamberth Cifelli will be paid its customary hourly rates for
services rendered that are in effect from time to time and will be
reimbursed according to its customary reimbursement policies.  The
current standard hourly rates range from $110 to $350 for certain
senior members.

Mr. Cifelli assures the Court that Lamberth Cifelli is a
"disinterested person" as defined in Section 101(14) of the
Bankruptcy Code.

Mr. Cifelli attests that the firm, its members and associates:

    (a) are not creditors, equity holders, or insiders of the
        Debtors;

    (b) are not and were not investment bankers for any
        outstanding security of the Debtors;

    (c) have not been, within three years before the Petition
        Date, (i) investment bankers for a security of the
        Debtors, or (ii) an attorney for an investment banker in
        connection with the offer, sale, or issuance of a
        security of the Debtors;

    (d) are not and were not, within two years before the Petition
        Date, a director, officer, or employee of the Debtors or
        an investment banker; and

    (e) have not represented any party in connection with matters
        relating to the Debtors.

Prior to the Petition Date, the Debtors paid Lamberth Cifelli a
$10,000 retainer.  Mr. Kelley relates that the firm will continue
to hold a portion of the Retainer subject to the future direction
and orders of the Court.

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. 02;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ALLIED HOLDINGS: Hires Miller Buckfire as Financial Advisor
-----------------------------------------------------------
Allied Holdings, Inc., and its debtor-affiliates sought and
obtained permission from the U.S. Bankruptcy Court for the
Northern District of Georgia to employ Miller Buckfire & Co., LLC,
as their financial advisor and investment banker.

The Debtors entered into a letter agreement dated April 29, 2005,
with Miller Buckfire pursuant to which the firm will provide
certain financial advisory and investment banking services.

The Debtors tell the Court that Miller Buckfire and its
professionals have extensive experience in providing financial
advisory and investment banking services to companies, creditors,
and other parties-in-interest in reorganization proceedings and
complex financial restructurings, both in and out of court.

Since April, Miller Buckfire has:

    (a) familiarized itself with the Debtors' business,

    (b) evaluated the Debtors' range of financial and strategic
        alternatives,

    (c) presented its analyses and recommendations to the Debtors'
        management and Board of Directors,

    (d) engaged in negotiations with certain of the Debtors'
        prepetition secured lenders with respect to multiple
        waiver and forbearance agreements; and

    (e) provided advice regarding the Debtors' debtor in
        possession financing alternatives.

In connection with the Debtors' DIP Financing, Miller Buckfire
contacted numerous potential lenders, including the Debtors'
current prepetition secured lenders, and conducted a competitive
process to secure DIP Financing for the Debtors on the most
competitive terms and conditions available, which resulted in an
agreement to provide up to $230 million to the Debtors post-
petition.

The Debtors inform the Court that Miller Buckfire's investigation
has included in-depth reviews and analyses of historical and
forecasted financial information, monthly operating reports, the
2005 and 2006 operating plans, and industry research.

The Debtors further expect Miller Buckfire to:

    (a) assist them in the analysis, design and formulation of
        various options in connection with a Restructuring, which
        may include a Financing or Sale;

    (b) advise and assist them in the financial aspects of the
        transaction;

    (c) provide them with financial advice and assistance in
        developing and seeking approval of a plan of
        reorganization, including assistance in the negotiations
        with their constituencies;

    (d) if applicable, identify, solicit and negotiate with
        potential investors in connection with any Financing
        or potential acquirers in connection with any Sale; and

    (e) participate in hearings before the Court with respect to
        the matters upon which it has provided advice, and
        coordinate with their counsel with respect to testimony.

Miller Buckfire will be paid:

    (a) a $120,000 monthly financial advisory fee during the term
        of the engagement;

    (b) a $3,000,000 Restructuring Transaction Fee, contingent
        upon consummation of a Restructuring and payable at the
        Closing;

    (c) a Sale Transaction Fee of 1% of the Aggregate
        Consideration, contingent upon consummation of a Sale and
        payable at the Closing thereof; provided that if one Sale
        or a series of Sale transactions results in the Sale of
        all or substantially all of the assets or businesses of
        the Debtors or their subsidiaries, then the aggregate Sale
        Transaction Fees for all Sale transactions will
        equal the greater of (x) $3,000,000 and (y) 1% of the
        total of the Aggregate Consideration in respect of all
        Sales; provided further that any Sale Transaction
        Fee(s) paid to Miller Buckfire will be credited against
        any Restructuring Transaction Fee(s) payable to Miller
        Buckfire; and

    (d) financing fees of:

           (i) 0.75% of the gross proceeds of any indebtedness
               issued that is secured by a first lien;

          (ii) 1.50% of the gross proceeds of any indebtedness
               issued that:

               (x) is secured by a second or more junior lien;
               (y) is unsecured; or
               (z) is subordinated; and

         (iii) 3.00% of the gross proceeds of any equity or
               equity-linked securities or obligations issued.

Approximately 50% of any Monthly Advisory Fee paid to Miller
Buckfire will be credited against any Restructuring Transaction
Fee, Sale Transaction Fee or financing fee.

Miller Buckfire is entitled to a $2,325,000 financing fee upon
consummation of the DIP Financing.

In addition, the Debtors will reimburse Miller Buckfire for its
travel and other reasonable out-of-pocket expenses incurred.  The
Debtors have paid Miller Buckfire $25,000 to be held as an
expenses retainer.

According to Henry S. Miller, chairman, managing director and
co-founder of Miller Buckfire & Co., LLC, neither the firm nor
its employees have any connection with or hold any interest
adverse to, among others:

    (a) the Debtors;

    (b) the agent for and lenders in the Debtors' senior secured
        credit facility;

    (c) the indenture trustee for the Debtors' 8-5/8% Senior Notes
        due 2007;

    (d) the Debtors' non-debtor subsidiaries;

    (e) the Debtors' officers and directors; and

    (f) the Debtors' accountants for the prior three years.

Mr. Miller relates that prior to the Petition Date, Miller
Buckfire's professionals performed professional services for the
Debtors.  From time to time, the firm may perform or may have
performed services for, or maintained other commercial or
professional relationships with, certain creditors of the Debtors
and various other parties adverse to the Debtors, in matters
unrelated to the Debtors' Chapter 11 cases.

In addition, Mr. Miller notes that Hugh Sawyer, Allied Holdings,
Inc.'s chief executive officer, was a member of the Board of
Directors of Spiegel, Inc.  Miller Buckfire acted as investment
banker to Spiegel, Inc., during its recent bankruptcy.

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. 02;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ALPHA NATURAL: S&P Upgrades Sr. Unsecured Rating to B- from CCC+
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Abingdon, Virginia-based Alpha Natural Resources Inc.
to 'B+' from 'B'.  Standard & Poor's also raised ANR's senior
secured bank loan rating and recovery rating to 'BB-' from 'B' and
to '1' from '3'.  The bank loan rating is now one notch higher
than the corporate credit rating; this and the '1' recovery rating
indicate a high expectation of full recovery of principal in the
event of a payment default.

In addition, Standard & Poor's raised its senior unsecured rating
to 'B-' from 'CCC+'.  The outlook is stable.

ANR currently has about $262 million in debt outstanding.   

"The upgrade reflects the company's better than expected
performance due to its favorable product mix, the significant
increase in its realized prices, especially for metallurgical coal
which has resulted in meaningful margin expansion, and our
expectations that favorable industry conditions will persist over
the intermediate term," said Standard & Poor's credit analyst
Dominick D'Ascoli.
     
The ratings on U.S. coal producer ANR reflect:

   * its relatively modest reserve base compared to
     larger producers;

   * concentration in the difficult operating environment of
     Central Appalachia;

   * high operating leverage;

   * capital-intensive operations; and

   * relatively thin free cash flow expectations.

These factors significantly overshadow benefits from:

   * the company's diverse mining operations;

   * large percentage of high-margin compliance and metallurgical
     coal reserves;

   * limited postretirement obligations compared to its peers; and

   * currently favorable coal industry conditions.


AMRESCO FRANCHISE: Fitch Cuts Rating on Class C Certificates to C  
-----------------------------------------------------------------
Fitch Ratings has taken ratings actions on these issues for ACLC
Franchise Loan Receivables Trusts and ACLC Business Loan
Receivables Trusts:

   ACLC Franchise Loan Receivables Trust 1997-A:

     -- Class A-1 affirmed at 'AAA' (1);
     -- Class A-2 affirmed at 'AAA' (1).

   ACLC Franchise Loan Receivables Trust 1997-B:

     -- Class A-1 affirmed at 'AAA' (1);
     -- Class A-3 affirmed at 'AAA' (1).

   ACLC Business Loan Receivables Trust 1998-1:

     -- Class A-1 affirmed at 'A';
     -- Class A-2 affirmed at 'B-';
     -- Class A-3 remains at 'C'.

   ACLC Franchise Loan Receivables Trust 1998-A:

     -- Class A-1c affirmed at 'AA';
     -- Class A-2 affirmed at 'A';
     -- Class A-3 affirmed at 'B'.

   ACLC Business Loan Receivables Trust 1998-2:

     -- Class A-3 affirmed at 'A+';
     -- Class B downgraded to 'B' from 'BB';
     -- Class C downgraded to 'C' from 'CC'.

   ACLC Business Loan Receivables Trust 1999-2:

     -- Class A-3A affirmed at 'AA';
     -- Class A-3F affirmed at 'AA';
     -- Class B affirmed at 'BBB';
     -- Class C affirmed at 'BBB-';
     -- Class D affirmed at 'B'.

   ACLC Business Loan Receivables Trust 2000-1:

     -- Class A-3A downgraded to 'A+' from 'AA';
     -- Class A-3F downgraded to 'A+' from 'AA';
     -- Class B affirmed at 'B';
     -- Class C remains at 'CCC';
     -- Class D remains at 'C'.

  (1) Affirmations are based on the strength of an MBIA insurance
      policy.

The negative rating actions reflect additional reductions in the
credit enhancement Fitch expects will be available to support each
class in these transactions.  As many loans in default have
remained unresolved, recovery expectations have continually
decreased.  These lowered expectations, in conjunction with
incurred losses on existing defaults, have reduced subordination
and credit enhancement available to outstanding bonds.

Anticipated credit enhancement is based on the servicer's and
Fitch's expected recoveries on defaulted collateral.  Fitch's
recovery expectations are based on historical collateral-specific
recoveries experienced in the franchise ABS sector.

Fitch will continue to closely monitor performance of the
transactions, and may raise, lower, or withdraw ratings as
appropriate.


ANC RENTAL: Inks Pact Resolving Hawaii Tax Claims for $2.6 Million
------------------------------------------------------------------
Ian J. Gazes, Esq., at Gazes LLC, in New York, relates that the
State of Hawaii's Department of Taxation filed three priority
claims aggregating $4,134,359, and general unsecured claims
totaling $353,365, against ANC Rental Corporation and its debtor-
affiliates.  Hawaii also asserted an administrative claim for
unpaid taxes, including Claim No. 11572 for $973,652.

The Debtors asked the Court to expunge Hawaii's Claims.  The ANC
Liquidating Trust asserted that it has no tax liability to
Hawaii.

In a Court-approved stipulation, the Trust and Hawaii agree that:

   1. The Trust will pay Hawaii $2,625,000, which will be made by
      check payable to the "Hawaii State Tax Collector" and will
      be delivered by overnight mail to Hawaii Deputy Attorney
      General Cynthia Johiro;

   2. All tax periods until October 13, 2003, will be closed for
      audits, examinations, levies, assessments, amended returns,
      refunds and judicial review with regard to the Debtors'
      general excise and net income tax liabilities;

   3. Hawaii will withdraw its claims; and

   4. The parties will exchange mutual releases of the tax
      claims.

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)


ANCHOR GLASS: Files for Chapter 11 Protection in M.D. Florida
-------------------------------------------------------------
Anchor Glass Container Corporation (NASDAQ:AGCC) filed a voluntary
petition for reorganization under Chapter 11 of the US Bankruptcy
Code in the Middle District of Florida, Tampa Division.  The
Company said that it intends to request Court approval to continue
payments of employee salaries and continue health and welfare
benefits to current employees without disruption.

The Company's existing senior secured credit facility lenders have
agreed to convert their loan facility into a debtor-in-possession
facility in order for the Company to continue its operations.  The
Company is in discussions to obtain additional debtor-in-
possession financing that it believes will be required after the
existing facility is fully utilized.

Anchor also disclosed that Mark Burgess, who joined Anchor in May
2005 as Executive Vice President, Finance and CFO, has been
appointed the Chief Executive Officer of the Company effective
immediately.

Mr. Burgess stated that, "The Chapter 11 process will give the
Company the opportunity to restructure its finances while it
continues to operate its business."  In addition, Mr. Burgess
said, "Anchor's goal is to continue delivering quality products to
its existing customer base without interruption and to maintain
its relationships with its suppliers."

Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is the third-largest manufacturer of glass containers
in the United States.  Anchor manufactures a diverse line of flint
(clear), amber, green and other colored glass containers for the
beer, beverage, food, liquor and flavored alcoholic beverage
markets.  The Company filed for chapter 11 protection on Aug. 8,
2005 (Bankr. M.D. Fla. Case No. 05-15606).  Robert A. Soriano,
Esq., at Carlton Fields PA, represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed $661.5 million in assets and $666.6
million in debts.


ANCHOR GLASS: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Anchor Glass Container Corporation
        One Anchor Plaza
        4343 Anchor Plaza Parkway
        Tampa, Florida 33634

Bankruptcy Case No.: 05-15606

Type of Business: The Debtor is the third-largest manufacturer
                  of glass containers in the United States.   
                  Anchor Glass manufactures a diverse line of
                  flint (clear), amber, green and other colored  
                  glass containers for the beer, beverage, food,
                  liquor and flavored alcoholic beverage markets.

Chapter 11 Petition Date: August 8, 2005

Court: Middle District of Florida (Tampa)

Judge: Alexander L. Paskay

Debtor's Counsel: Robert A. Soriano, Esq.
                  Carlton Fields PA
                  P.O. Box 3239
                  Tampa, Florida 33601
                  Tel: (813) 223-7000

Total Assets: $661,540,000

Total Debts:  $666,562,000

Debtor's 20 Largest Unsecured Creditors:

   Entity                                      Claim Amount
   ------                                      ------------
   Pension Benefit Guaranty Corporation         $56,570,000
   1200 K Street Northwest, Suite 270
   Washington, DC 20005-4026                 

   Anchor Glass Container ERISA Excess Plan      $3,949,155
   4343 Anchor Plaza Parkway
   Tampa, FL 33634-751                        

   Temple-Inland                                 $1,351,000
   1300 South Mopac Expressway
   Austin, TX 78746                           

   City of Warner Robins                         $1,149,000
   P.O. Box 1468
   Warner Robins, GA 31099                    

   South Jersey Gas Company                      $1,113,000
   P.O. Box 6000
   Folsom, NJ 08037                           

   Packaging Dimensions - Fibre                    $992,700
   2300 Raddant Road, Suite B
   Aurora, IL 60504                             

   Georgia Power Company                           $929,600
   96 Annex
   Atlanta, GA 30396                            

   Unimin Corp                                     $871,600
   258 Elm Street
   New Canaan, CT 06840                         

   UGI Energy Services, Inc.                       $850,000
   P.O. Box 827032
   Philadelphia, PA 19182                       

   Special Shapes Refractory                       $765,600  
   Drawer 151
   P.O. Box 830769
   Bessemer, AL 35022                           
     
   American Electric Power                         $697,800
   P.O. Box 24412
   Canton, OH 44701                             

   Pepco Energy Services                           $689,100
   1300 North 17th Street, Suite 1600
   Arlington, VA 22209                          

   Heye-Glas International                         $633,500
   Am Ziegeleiweg 3
   Obernkirchen, DE D-31683                     
   WEST GERMANY                                 

   King Industries                                 $616,200
   P.O. Box 2445
   Columbus, GA 31902                           

   OCI Chemical Corp                               $614,000
   P.O. Box 67000 Dept 255801
   Detroit, Ml 48267-2558                       

   Centerpoint Energy                              $580,000
   P.O. Box 3032
   Carol Stream, IL 60132                       

   Owens Brockway Glass Container                  $553,000
   One Seagate - 30 LDP
   Toledo, OH 43666                             

   GMP and Employers Pension Plan                  $550,000
   205 West 4th St., Suite 225
   Cincinnati, OH 45202                         

   Schulte Roth & Zabel LLP                        $543,300  
   919 Third Ave
   New York, NY 10022                           

   Geary Energy, LLC                               $516,000  
   7712 South Yale Avenue, Suite 201
   Tulsa, OK 74136


ANTHRACITE CDO: Fitch Holds BB Rating on $43.8MM Class F Notes
--------------------------------------------------------------
Fitch Ratings affirms all of the rated notes issued by Anthracite
CDO 1 Ltd.  The affirmation of these notes is the result of
Fitch's annual rating review process and is effective immediately:

     -- $213,826,638 class A-FL notes at 'AAA';
     -- $22,000,000 class B fixed notes at 'AA';
     -- $24,433,000 class B-FL notes at 'AA';
     -- $29,331,000 class C fixed notes at 'A-';
     -- $30,000,000 class C-FL notes at 'A-';
     -- $16,000,000 class D fixed rate notes at 'BBB';
     -- $14,955,000 class D-FL notes at 'BBB';
     -- $20,506,000 class E fixed notes at 'BBB-';
     -- $4,000,000 class E-FL notes at 'BBB-';
     -- $43,853,000 class F fixed notes at 'BB'.

Anthracite I is a collateralized debt obligation, which closed May
29, 2002, supported by a static pool of commercial mortgage-backed
securities (CMBS: 73.0%) and senior unsecured real estate
investment trust (REIT: 27.0%) securities.  Fitch has reviewed the
credit quality of the individual assets comprising the portfolio.

Overcollateralization levels are stable as compared to levels
reported in June of 2002, shortly after the close of Anthracite I.
There has been very little deleveraging, with only $270,972 of
principal dollars being paid to the class A noteholders, which
reduced the original balance by 0.13%.  The weighted average
credit quality of the portfolio has remained stable in the 'BBB-
'/'BB+' range.

Anthracite Capital Inc., managed by BlackRock Financial
Management, Inc., selected the initial collateral and serves as
the collateral administrator.  Fitch rates BlackRock, Inc. 'CAM1'
for CDOs collateralized by structured finance and commercial real
estate securities.  Fitch has discussed Anthracite I with
Anthracite Capital and will continue to monitor Anthracite I
closely to ensure accurate ratings.

Based on the stable performance of the underlying collateral and
the OC tests, Fitch affirms all the rated liabilities issued by
Anthracite I.  Transaction information and historical data on
Anthracite I are available on the Fitch Ratings' web site at
http://www.fitchratings.com/  

For more information on the Fitch VECTOR Model, see 'Global Rating
Criteria for Collateralized Debt Obligations,' dated Sept. 13,
2004, also available at http://www.fitchratings.com/


AOL LATIN AMERICA: Court Okays Bankruptcy Services as Claims Agent
------------------------------------------------------------------          
The U.S. Bankruptcy Court for the District of Delaware gave
America Online Latin America, Inc., and its debtor-affiliates
permission to employ Bankruptcy Services LLC as their claims,
noticing and balloting agent.

Bankruptcy Services will:

   1) assist the Debtors with all required notices in their
      chapter 11 cases, including notice of the initial meeting of
      creditors under Section 341(a) of the Bankruptcy Code,
      notice of objections to claims and notices of any hearings
      on a proposed Disclosure Statement and the solicitation of
      votes and confirmation of a chapter 11 Plan, and other
      miscellaneous notices necessary in the Debtors' chapter 11
      cases;

   2) receive, examine and maintain copies of all proofs of claim
      and proofs of interest filed in the Debtors' chapter 11
      cases;

   3) maintain official claims registers in each of the Debtors'
      cases by docketing all proofs of claim and proofs of
      interest un the applicable claims database that includes:

      a) the name and address of the claimant or interest holder
         and the date the proof of claim or proof of interest was
         received by Bankruptcy Services and the Bankruptcy Court,
         and

      b) the claim number assigned to the proof of claim or proof
         of interest the applicable debtor-affiliate against which
         the claims or interest is asserted;

   4) implement necessary security measures to ensure the
      completeness and integrity of the claims registers and
      transmit to the Bankruptcy Clerk's Office a cope of the
      claims register on a weekly basis;

   5) maintain an up-to-date mailing list for all entities that
      have filed proofs of claim or proofs of interest and provide
      access to the public without charge for the examination of
      copies of the proofs of claim or proofs of interest;

   6) record all transfers of claims pursuant to Bankruptcy Rule
      3001(c) and provide notice of transfers as required by
      Bankruptcy Rule 3001(e);

   7) oversee the distribution of applicable soliciting materials
      to holders of claims or interests against the Debtors and
      respond to material and technical distribution and
      solicitation inquiries;

   8) receive, review and tabulate the ballots cast, make
      determinations with respect to the timeliness of each ballot
      and certify the results of balloting to the Court; and

   9) perform all other claims processing, noticing and balloting
      services to the Debtors that are necessary in their chapter
      11 cases.

Kathy Gerber, a Senior Vice-President at Bankruptcy Services,
disclosed that her Firm received a $5,000 retainer.

Ms. Gerber reports Bankruptcy Services' professionals bill:

      Designation                   Hourly Rate
      -----------                   -----------
      Senior Managers                  $225
      & On-Site Consultants       
      Senior Consultants               $185
      Programmers                   $130 - $180
      Associates                       $135
      Schedule Preparation Staff       $225
      Data Entry & Clerical Staff    $40 - $60

Bankruptcy Services assures the Court that it does not represent
any interest materially adverse to the Debtors or their estates.

Headquartered in Fort Lauderdale, Florida, America Online Latin
America, Inc., -- http://www.aola.com/-- offers AOL-branded  
Internet service in Argentina, Brazil, Mexico, and Puerto Rico, as
well as localized content and online shopping over its proprietary
network.  Principal shareholders in AOLA are Cisneros Group, one
of Latin America's largest media firms, Brazil's Banco Itau, and
Time Warner, through America Online.  The Company and its debtor-
affiliates filed for chapter 11 protection on June 24, 2005
(Bankr. D. Del. Case No. 05-11778).  Pauline K. Morgan, Esq., and
Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor, LLP and
Douglas P. Bartner, Esq., at Shearman & Sterling LLP represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed total assets of
$28,500,000 and total debts of $181,774,000.


AOL LATIN AMERICA: Files Schedules of Assets & Liabilities
----------------------------------------------------------          
America Online Latin America, Inc., and its debtor-affiliates
delivered their Schedules of Assets and Liabilities to the U.S.
Bankruptcy Court for the District of Delaware, disclosing:

     Name of Schedule             Assets         Liabilities
     ----------------             ------         -----------
  A. Real Property             
  B. Personal Property         $706,376,454                    
  C. Property Claimed
     as Exempt
  D. Creditors Holding                              $190,590            
     Secured Claims                              
  E. Creditors Holding
     Unsecured Priority Claims
  F. Creditors Holding                          $164,050,411                        
     Unsecured Nonpriority
     Claims
                               ------------     ------------
     Total                     $706,376,454     $164,241,001

Headquartered in Fort Lauderdale, Florida, America Online Latin
America, Inc., -- http://www.aola.com/-- offers AOL-branded  
Internet service in Argentina, Brazil, Mexico, and Puerto Rico, as
well as localized content and online shopping over its proprietary
network.  Principal shareholders in AOLA are Cisneros Group, one
of Latin America's largest media firms, Brazil's Banco Itau, and
Time Warner, through America Online.  The Company and its debtor-
affiliates filed for chapter 11 protection on June 24, 2005
(Bankr. D. Del. Case No. 05-11778).  Pauline K. Morgan, Esq., and
Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor, LLP and
Douglas P. Bartner, Esq., at Shearman & Sterling LLP represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed total assets of
$28,500,000 and total debts of $181,774,000.


ATA AIRLINES: Wants to Enter Into IAA & Regions Bank Agreement  
--------------------------------------------------------------
Terry E. Hall, Esq., at Baker & Daniels, in Indianapolis,
Indiana, relates that ATA Airlines, Inc., and the Indianapolis
Airport Authority are parties to three agreements:

   (1) Maintenance Facility Lease Agreement dated December 29,
       1995, as amended;

   (2) Corporate Office Lease -- also known as the American Trans
       Air, Inc., Master Lease -- dated January 1, 1996, as
       amended; and

   (3) Parking Lot Lease dated December 29, 1995, with respect
       to a real estate adjacent to the premises of the Corporate
       Office Lease.

                       The Regions Mortgage

ATA is indebted to Regions Bank, successor by merger to Union
Planters Bank, N.A., with respect to two separate loans, evidenced
by First Replacement Mortgage Notes dated November 20, 2002, for
$6,966,699 and $9,139,932.

The ATA Loan Debt is secured by a Leasehold Mortgage, Security
Agreement and Fixture Filing dated June 30, 1999, executed by ATA
in favor of Regions Bank.  The Regions Mortgage entitles Regions
Bank to a mortgage lien and security interest in ATA's leasehold
interests and rights in and to the real estate and improvements
which comprise the premises covered by the Maintenance Facility
Lease.

Regions Bank filed a $10,889,455 claim against ATA, exclusive of
fees and interests.  Regions Bank asserts that the Claim is
secured by the liens and interest granted in the Regions Mortgage.

The IAA has asserted that the Regions Mortgage is invalid or
otherwise ineffective by reason of Regions Bank's purported
failure to obtain the requisite approval of the IAA on the terms
and conditions of the Regions Mortgage.

Regions Bank denies the assertion.  The Bank has also expressed
concern that the IAA will not provide it an opportunity to assume
and perform ATA's obligations under the Maintenance Facility
Lease, and that the IAA will attempt to terminate the Maintenance
Facility Lease and relet the Leased Premises without giving effect
to Regions Bank's mortgage lien and security interest.

The IAA contends that Regions has no valid interest in the
Maintenance Facility Lease, and it is free to deal with the
Leased Premises without consideration of any claim by Regions
Bank.

                        The Regions Set-off

Ms. Hall recounts that before the Petition Date, Regions Bank set
off $2,500,000 against the then-outstanding balance of the ATA
Loan Debt from a deposit account maintained by ATA with Regions
Bank.  ATA has asserted that the Regions Set-off was wrongful
because at the time of the Set-off, there was no default with
respect to the ATA Loan Debt.  Regions Bank denies this assertion.

                       The Master Agreement

ATA, the IAA and Regions Bank have reached a Master Agreement to
set forth various transactions, to be executed on August 31, 2005,
that would resolve their conflicting claims, interests and
objectives related to the Maintenance Facility Lease, the
Corporate Office Lease, the Regions Claim, the Regions Mortgage,
and the Regions Set-off.

The parties agree to these terms:

   (1) Effective Date

       (a) If certain conditions precedent will not have been
           satisfied by August 14, 2005, the Master Agreement
           will, for all purposes, be null and void.  The
           Effective Date will be on August 31, 2005.

       (b) On the Effective Date, a closing will be conducted in
           Indianapolis, Indiana, at the offices of Baker &
           Daniels, counsel for ATA, at which all of the
           contemplated agreements, assignments, leases,
           documents and payments will be concurrently executed,
           delivered and paid.

   (2) Corporate Office Lease and Parking Lot Lease

       ATA and the IAA will enter into a new lease, pursuant to
       which the IAA will lease to ATA all of the real estate,
       improvements and other property which is a part of the
       premises subject to the Corporate Office Lease and the
       real estate subject to the Parking Lot Lease.

       The New Office Lease provides for:

       (a) a $583,000 rent per lease year for the initial five-
           year term -- payable in equal monthly installments;

       (b) ATA's right to extend the lease term for five more
           years, so long as it is not in default.  The rent for
           each extension term year will be negotiated by the
           parties; and

       (c) the IAA's payment for the first $700,000 of ATA's
           rehabilitation and renovation costs incurred in
           connection with ATA's relocation of its operations and
           work force in Building 4 to the leased premises.

       The Corporate Office Lease and the Parking Lot Lease will
       be terminated on August 31, 2005, subject to the execution
       of the New Office Lease.

   (3) Maintenance Hangar 6A

       The IAA will be the owner or lessee of, and will have the
       right to lease or sublease to ATA, Hangar 6A in the
       Indianapolis Maintenance Center.  On the Effective Date of
       the Master Agreement, ATA and the IAA will enter into the
       Hangar Lease, which provides for:

       (a) an initial five-year lease term.  ATA will have
           the right to extend that term for five more years if
           not in default;

       (b) a $650,333 annual rent, except that in the first
           lease year, ATA will receive a relocation credit
           against rent for $100,000, and in each lease year, ATA
           will receive an additional $50,000 annual
           transportation cost credit;

       (c) the IAA's payment of the costs of all utilities, taxes
           and maintenance for the leased premises;

       (d) ATA's right to terminate the lease, without further
           liability except for rent and other amounts which
           accrue prior to the termination date, upon 60 days'
           prior written notice given any time during the first
           lease year; and

       (e) the IAA's installation or modification of the security
           walls of Hangar 6A.

   (4) Maintenance Facility Lease

       ATA will assign the Maintenance Facility Lease to Regions
       Bank or its designee.  Concurrent with the assignment, the
       IAA will recognize the validity of the Regions Mortgage,
       and ATA will convey by quit claim bill of sale and
       deed to the IAA all of ATA's right to and interests in all
       buildings and improvements that have been added to the
       real estate which is covered by the Maintenance Facility
       Lease.

       ATA will vacate and cease occupancy of the Existing Hangar
       -- that portion of the Leased Premises covered by the
       Maintenance Facility Lease which is comprised of the
       hangar and the related parts and equipment storerooms, but
       does not include any of Building 4 -- by August 31, 2005.

       The parties agree on these payment, release and waiver
       terms on the Effective Date:

       (a) Regions Bank will pay ATA $500,000, in immediately
           available funds wire transferred pursuant to ATA's
           instructions.  The payment is in satisfaction of ATA's
           claims with respect to the Regions Set-off;

       (b) ATA will release all claims against Regions Bank;

       (c) After the assignment of the Maintenance Facility Lease
           and the ATA Release, Regions Bank will waive and
           release in full the Regions Claim and all other claims
           it has or may have against ATA for payment of the ATA
           Loan Debt; and

       (d) Regions Bank and ATA will enter into a sublease of the
           entire leased premises covered by an Operations
           Center Lease.  The term of the Sublease will end on
           December 31, 2005.  The Sublease will provide that ATA
           will not be required to pay rent for the leasehold,
           but will be obligated during the term of the sublease
           to perform all of the maintenance and insurance
           covenants of the lessee under the Operations Center
           Lease.  The terms of the sublease otherwise will be
           substantially the same as the Operations Center Lease.
           The IAA consents to the Sublease.

       Moreover, the IAA and Regions Bank will enter into a new
       lease with respect to the Existing Hangar, and the Primary
       Land and Expansion Land -- as defined in the Maintenance
       Facility Lease.  The New Maintenance Facility Lease will
       contain terms and conditions substantially the same as
       those set forth in the original Maintenance Facility
       Lease, except that:

       -- The lessee is Regions Bank or its designee;

       -- The New Maintenance Facility Lease will be effective
          from September 1, 2005, through August 31, 2035;

       -- The annual rent will be $255,342 for the entire term;

       -- Regions Bank will have the right to sublease the
          Premises or assign the New Maintenance Facility Lease
          to Republic Airways Holdings, Inc., or any other air
          carrier which would be acceptable to the IAA as tenant
          at any other premises located at the Indianapolis
          International Airport; and

       -- Regions Bank will have right to sell and assign its
          interests in the New Maintenance Facility Lease and the
          assignee will have right to place a mortgage on the
          assigned leasehold interest in an amount not to exceed
          the purchase price of Regions' interest, with terms and
          conditions which are subject to the IAA's approval.

       In addition, the IAA and Regions Bank will enter into a
       new lease with respect to the Additional Primary Land and
       the so-called Building 4.  The Operations Center Lease
       will contain terms and conditions substantially the same
       as those set forth in the original Maintenance Facility
       Lease, except that:

       -- The lessee is Regions Bank or its designee;

       -- The term of the Operations Center Lease is from
          September 1, 2005, through August 31, 2035;

       -- The annual rent for the entire term is $62,992;

       -- Subject to the IAA's prior consent, Regions Bank will
          have the right to sublease or assign the Operations
          Center Lease and space in the buildings which are a
          part of the leased premises to ATA, Ambassadair Travel
          Club, Inc., or ATA Holdings Corp., and to any tenant
          which would be reasonably acceptable to the IAA as a
          tenant of office facilities at any other premises at
          Airport which do not have access to restricted areas.

   (5) General Conditions Precedent

       The covenants and commitment of the parties under the
       Master Agreement are subject to the satisfaction of these
       conditions:

       (a) The Bankruptcy Court enters a final and non-appealable
           order approving the Master Agreement no later than
           August 14, 2005;

       (b) By not later than August 5, 2005, Chautauqua Airlines
           will have agreed to terminate its current lease with
           the IAA with respect to Hangars 7A and 7B of the
           Indianapolis Maintenance Center;

       (c) By not later than August 14, 2005, Republic will have
           agreed to enter into a sublease with Regions Bank of
           the Existing Hangar or will have agreed to purchase
           Regions Bank's leasehold interest in the New
           Maintenance Facility Lease on these acceptable terms:

           * Annual rent for the first year of the lease term
             will be $400,000, and $700,000 subsequently;
  
           * The sublessee will pay for all utilities and normal
             maintenance of the leased premises, while Regions
             Bank will pay for all maintenance to structural
             components and the roof;

           * Regions Bank will be responsible for, and will pay
             all costs required, to eliminate access through
             Building 4 to the Existing Hangar; and

           * The IAA's Board of Directors will have approved and
             authorized the Master Agreement by not later than
             the scheduled August 5 meeting, and AAR Aircraft
             Services will have agreed to a termination of its
             lease of Hangar 6A, effective not later than
             August 15.

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

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

Ms. Hall asserts that the entry into the Master Agreement is in
the best interest of ATA's estates and its creditors.  The global
resolution provided under the Agreement will provide extensive
immediate and ongoing savings for ATA in its occupancy costs.  In
addition, the Master Agreement will allow ATA to economically
consolidate its operations into Buildings 1, 2, and 3 leased from
the IAA, and provide funds to ATA to renovate and update its
office facilities and to consolidate its operations.

Accordingly, ATA seeks the Court's authority to perform the
contemplated transactions in the Master Agreement.

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)


ATKINS NUTRITIONAL: Look for Bankruptcy Schedules on Sept. 29
-------------------------------------------------------------          
The U.S. Bankruptcy Court for the Southern District of New York
gave Atkins Nutritionals, Inc., and its debtor-affiliates, more
time to file their Schedules of Assets and Liabilities, Statements
of Financial Affairs, Schedules of Current Income and Expenditures
and Schedules of Executory Contracts and Unexpired Leases.  The
Debtors have until Sept. 29, 2005 to file those documents.

The Debtors gave the Court three reasons why the extension is
warranted:

   1) to prepare their Schedules and Statements, they must review
      and compile information from their books, records, and
      documents relating to thousands of claims, assets, and
      contracts, and the information is voluminous in nature and
      situated in various locations throughout their organization;

   2) since the Petition Date, their primary focus has been
      negotiating the terms of the plan term sheet and soliciting
      acceptances from their secured lenders with respect to that
      plan term sheet; and

   3) while they are currently mobilizing their employees to work
      diligently and expeditiously on preparing the Schedules and
      Statements, those employees have been busy with assisting
      them in efforts to stabilize their business operations
      during the initial post-petition period.

Headquartered in New York, New York, Atkins Nutritionals, Inc. --  
http://atkins.com/-- sell nutritional supplements based on its    
founder, Dr. Robert C. Atkins' nutritional philosophy of  
controlled-carbohydrate lifestyle.  The Debtors also sell more  
than 100 food products and nutritional supplements, as well as  
informational products such as diet books and cookbooks. Atkins'  
products are sold in more than 30,000 stores in North America  
under numerous trademarks.  The Company along with Atkins  
Nutritionals Holdings, Inc., Atkins Nutritionals Holdings II,  
Inc., and Atkins Nutritionals (Canada) Limited, filed for chapter  
11 protection on July 31, 2005 (Bankr. S.D.N.Y. Case No.
05-15913).  Marcia L. Goldstein, Esq., at Weil Gotshal &  
Manges LLP, represents the Debtors in the United States, while  
lawyers at Osler, Hoskin & Harcourt, LLP, represents the Debtors  
in Canada.  As of May 28, 2005, they listed $265.6 million in  
total assets and $323.2 million in total debts.


ATKINS NUTRITIONAL: Hires Weil Gotshal as Bankruptcy Counsel
------------------------------------------------------------          
The U.S. Bankruptcy Court for the Southern District of New York
gave Atkins Nutritionals, Inc., and its debtor-affiliates
permission to employ Weil, Gotshal & Manges LLP as their general
bankruptcy counsel.

Weil Gotshal will:

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

   2) prepare on behalf of the Debtors, as debtors in possession,
      all necessary motions, applications, answers, orders,
      reports, and other papers in connection with the
      administration of their estates;

   3) negotiate and prepare on behalf of the Debtors any proposed
      plan or plans of reorganization and documents related to
      those plans and assist in obtaining acceptances and
      confirmation of those plans; and

   4) perform all other necessary legal services in connection
      with the prosecution of the Debtors' chapter 11 cases.

Marcia L. Goldstein, Esq., a Member of Weil Gotshal, is one of the
lead attorneys for the Debtors.  

In the year prior to Atkins' chapter 11 filing, Weil Gotshal
received $2.2 million from the Company -- $1.7 million for
prepetition legal work and a $550,000 retainer for postpetition
services.  

Ms. Goldstein reports Weil Gotshal's professionals bill:

      Designation          Hourly Rate
      -----------          -----------
      Members & Counsel    $550 - $775
      Associates           $260 - $495   
      Paraprofessionals    $130 - $240
      
Weil Gotshal assures the Court that it does not represent any
interest materially adverse to the Debtors or their estates.

Headquartered in New York, New York, Atkins Nutritionals, Inc. --  
http://atkins.com/-- sell nutritional supplements based on its    
founder, Dr. Robert C. Atkins' nutritional philosophy of  
controlled-carbohydrate lifestyle.  The Debtors also sell more  
than 100 food products and nutritional supplements, as well as  
informational products such as diet books and cookbooks. Atkins'  
products are sold in more than 30,000 stores in North America  
under numerous trademarks.  The Company along with Atkins  
Nutritionals Holdings, Inc., Atkins Nutritionals Holdings II,  
Inc., and Atkins Nutritionals (Canada) Limited, filed for chapter  
11 protection on July 31, 2005 (Bankr. S.D.N.Y. Case No.
05-15913).  As of May 28, 2005, they listed $265.6 million in
total assets and $323.2 million in total debts.


ATLANTIC EXPRESS: Moody's Junks Senior Secured Notes' Rating
------------------------------------------------------------
Moody's Investors Service has lowered the ratings of Atlantic
Express Transportation Corporation's senior secured notes and
Corporate Family Rating to Caa2 from B3, and has changed the
ratings outlook to negative, citing recent deterioration in
operating performance by the company and concern over the
company's ability to generate adequate cash flow to cover its debt
service requirements while meeting financial covenant levels
prescribed by its amended credit facility and notes indenture
terms.

The lower ratings reflect Moody's concern that the company's
operating performance, which has been substantially weaker than
expected, could remain weak through FY (year-ending June) 2006,
particularly in light of the company's exposure to fuel costs,
which has negatively impacted the company's recent financial
results.  The ratings also reflect deterioration in credit metrics
that has resulted from both the weaker operating results along
with the higher debt levels that the company has undertaken to
finance near-term liquidity requirements, as well as the tightness
to current amended financial covenant levels and ensuing
uncertainty as to compliance with covenants over the next year, as
they return to pre-amendment levels.

The ratings consider the size and scale of the company's school
bus operations, and Atlantic Express' lead position in its major
markets.  Such a leadership position enhances the company's
ability to renew or extend existing school services contracts, as
illustrated by its recent contract renewal with the New York City
Department of Education at favorable terms.

The negative ratings outlook reflects Moody's concerns that
operating result over the next 12 months, despite potential
improvement from new and extended contracts, may continue to be
weak, particularly if fuel prices continue to rise, and that the
company may not have additional sources of liquidity to draw upon
to cover potential shortfalls in cash flows that the company may
experience.  

Ratings would be subject to downgrade:

   * if Atlantic Express' operating profits and free cash flows
     were to remain negative over the next 12 months;

   * if debt were to increase for any reason; or

   * if the company were to breach any of the covenant levels set
     forth in its amended credit facilities.

The ratings outlook may be stabilized if the company were to
generate modest positive free cash flow levels over the next 12
months, requiring no further increases in debt or use of sale-
leaseback transactions to finance near term liquidity
requirements, while remaining in compliance with all credit
facility and notes covenants levels.

Over the last 12 months, Atlantic Express' financial condition has
weakened, reflecting significant deterioration in operating
performance.  For the nine months ending March 2005, revenues have
declined 3% from the same period in 2004, as the result of lost
contracts and changes in school days in New York City.  Operating
costs, meanwhile have increased about 2%, predominantly labor-
related, while fuel cost increased 29%.

As a result, both operating profits and operating cash flows were
negative for that period (-$13 million and -$16 million,
respectively), requiring the company to amend covenant terms in
its senior credit facility as well as on its senior notes, and
increase debt by drawing on both the existing $20 million credit
facility and a new $15 million third lien notes facility, as well
as through use of a sale-leaseback transaction on two of its
facilities, to cover operating cash shortfalls and debt service
requirements.

Consequently, Atlantic Express' leverage (debt/EBITDA, as measured
using standard adjustments per Moody's Ratings methodology report
dated March 2005) rose dramatically, to about 11 times as of March
2005, which is substantially higher than levels typical of the B3
rating category.  Also, Moody's assesses Atlantic Express'
liquidity condition to be extremely tight.  

Although the company reported about $8 million of cash as of March
2005, with the entire revolving credit facility fully drawn and
all assets pledged as collateral to about $155 million of secured
debt under multiple liens, the rating agency believes that it is
unlikely the company will be able to raise additional capital from
external sources to cover potential cash flow shortfalls in the
event that operating results do not return to profitable levels.

Moody's recognizes Atlantic Express' leadership position in the
urban school bus markets in which the company competes.  Atlantic
Express is the leading provider of school bus services in New York
City, Philadelphia, and St. Louis, and has strong market presence
in Long Beach and Los Angeles, California.  

The company is the fourth largest school bus operator in the
country, operating approximately 6,100 vehicles in eight states,
with operational history of over 30 years.  Atlantic Express'
importance to major markets Moody's believes increases the
likelihood that the company will be able to retain significant
market share in these locations, as is evidenced by the recent
extension of its New York City Department of Education contract at
favorable terms and other contract wins in other cities.  The
terms of the new NYC DoE contract has the potential to return the
company to positive operating profit and cash flow in FY 2006,
helping to stabilize the company's credit profile.

However, as the company's cost structure is still quite sensitive
to changes in fuel prices, Moody's remains concerned that further
increases in fuel costs could substantially offset potential
benefits derived from the new contract terms.

The rating assigned to the senior secured notes, which is still
the same as the Corporate Family Rating, reflects the dominant
role of this security in the company's debt structure, comprising
about 70% of the company's debt as of March 2005.  These notes are
secured by a first lien on substantially all motor vehicle assets
of the company and certain properties, and a second lien on all
assets providing first lien security to the $20 million credit
facility (not rated by Moody's).  The notes are guaranteed by
substantially all of the company's existing and future
subsidiaries.

Atlantic Express Transportation Corp. is the fourth largest
provider of school bus transportation in the U.S.  The company
also provides paratransit services for physically and mentally
challenged passengers to public transit systems.  The company had
estimated LTM March 2005 revenues of $358 million.


BALLY TOTAL: Noteholders Issue Notice of Default Under Indentures
-----------------------------------------------------------------
Bally Total Fitness Holding Corporation (NYSE:BFT) received
notices of default under the indentures governing its:

   -- 9-7/8% Senior Subordinated Notes due 2007, and
   -- 10-1/2% Senior Notes due 2011

following the expiration of the waiver of the financial reporting
covenant default on July 31, 2005.  

The notices did not declare the aggregate unpaid principal under
each of the indentures to be due and payable.  However, the
notices commence a 30-day cure period during which Bally must
either secure an extension to the waiver or remedy the default.  
The Company continues to negotiate with bondholders to secure a
waiver extension and currently has received consent from holders
of 96.31% of the Senior Notes and 42.88% of Senior Subordinated
Notes outstanding.

In addition, the delivery of the notices commences the 10-day
period after which time an event of default occurs under Bally's
$275 million secured credit agreement's cross-default provision.
As a result, delivery of these notices could result in
acceleration of Bally's obligations on or after Aug. 14, 2005,
under the credit agreement and the indentures, causing over
$700 million of Bally's debt obligations to become immediately due
and payable.

                      Consent Date Extension

Bally also announced that it has extended the Consent Date (as
defined in Bally's Consent Solicitation Statements dated July 13,
2005) for holders of its Senior Notes and Senior Subordinated
Notes to consent to an extension of the waivers to 5:00 p.m., New
York City time, on Wednesday, Aug. 10, 2005.

Except as set forth herein, the terms of the Consent Solicitations
remain the same as set forth in the Consent Solicitation
Statements previously distributed to noteholders.

As previously announced, Bally has retained Deutsche Bank
Securities Inc. to serve as its solicitation agent and MacKenzie
Partners, Inc., to serve as the information agent and tabulation
agent for the consent solicitation.  Questions concerning the
terms of the consent solicitation should be directed to:

         Deutsche Bank Securities Inc.
         60 Wall Street, 2nd Floor
         New York, New York 10005
         Attn: Christopher White
         Tel. No. (212) 250-6008

Requests for documents may be directed to MacKenzie Partners,
Inc., 105 Madison Avenue, New York, New York 10016, Attention:
Jeanne Carr or Simon Coope. The information agent and tabulation
agent may be reached by telephone at (212) 929-5500 (call collect)
or (800) 322-2885 (toll-free).

Bally Total Fitness is the largest and only nationwide commercial  
operator of fitness centers, with approximately four million  
members and 440 facilities located in 29 states, Mexico, Canada,  
Korea, China and the Caribbean under the Bally Total Fitness(R),  
Crunch Fitness(SM), Gorilla Sports(SM), Pinnacle Fitness(R) ,  
Bally Sports Clubs(R) and Sports Clubs of Canada(R) brands. With  
an estimated 150 million annual visits to its clubs, Bally offers  
a unique platform for distribution of a wide range of products and  
services targeted to active, fitness-conscious adult consumers.  

                         *     *     *  

As reported in the Troubled Company Reporter on Feb. 15, 2005,  
Standard & Poor's Rating Services lowered its ratings on Bally  
Total Fitness Holding Corporation, including lowering the  
corporate credit rating to 'CCC+' from 'B-'.  

At the same time, Standard & Poor's changed its outlook on the  
ratings to negative from developing.  Total debt outstanding at  
Sept. 30, 2004, was $747.7 million.  

"The rating actions are based on the potential for further delays  
in the filing of financial statements and on related  
uncertainties, in light of Bally's Audit Committee's recent  
findings," said Standard & Poor's credit analyst Andy Liu.


BEAUTY THERAPIES: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Beauty Therapies Ltd.
        dba Beauty Therapies
        dba Beauty Therapies Spa Harbor
        One Brookline Place, Suite 302
        Brookline, Massachusetts 02445

Bankruptcy Case No.: 05-17079

Type of Business: The Debtor is the leading provider of
                  Medi-Spa services in Boston.  Beauty
                  Therapies offers a complete range of
                  advanced cosmedical procedures for facial
                  and body enhancement including laser hair
                  removal, endermologie cellulite treatments,
                  chemical peels, and epifacials. See
                  http://www.beautytherapies.com/

Chapter 11 Petition Date: August 8, 2005

Court: District of Massachusetts (Boston)

Debtor's Counsel: Christian J. Urbano, Esq.
                  Hanify & King P.C.
                  One Beacon Street, 21st Floor
                  Boston, Massachusetts 02108-3107
                  Tel: (617) 226-3426

Total Assets: Less than $50,000

Total Debts:  $1 Million to $50 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Bank of America               Principal on              $100,000
858 Washington Street         promissory note
Dedham, MA 02026

Lyon Financial Services Inc.  Personal property          $80,706
dba U.S. Bancorp Manifest     (equipment) leases
Funding Serv
Marshall, MN 56258

James T. Hurley               Principal on               $60,000
2 Van Beal Road               promissory note
Randolph, MA 02368

Boston Globe Advertising      Trade debt                 $48,039

House of Carpet               Goods or services          $38,552

Richard DeLuca                Principal and              $30,500
                              interest in  arrears
                              on promissory note

Cynosure                      Trade debt                 $23,000

H.P.S.C.                      Equipment lease            $21,222

MediaMAx                      Trade debt                 $21,105

Abby Carpet                   Good or services           $16,804

BMW-Lease                     Lease of company           $15,716
                              Vehicle

Linda Bell                    Accounting                 $14,092
                              consultant

Home Depot Credit Card        Credit card                $13,486
                              purchases

Feakes & Associates           Legal services             $13,306
                              rendered and
                              expenses incurred

Verville Construction         Goods or services          $12,000

Improper Bostonian            Advertising services       $11,500

Cape Cod Lumber               Goods or services           $9,335

Payne Boucheir Inc.           Trade debt                  $9,072

The Redecorators              Goods or services           $7,857

Brookline Village II          Lease of non-               $7,254
Ltd. Ptr                      residential real
                              property


BIG 5: Search for New CFO Begins Amid Financial Restatements
------------------------------------------------------------
Big 5 Sporting Goods Corporation (Nasdaq: BGFVE) disclosed that it
will recruit and hire a new Chief Financial Officer, with a strong
background in U.S. generally accepted accounting principles and
SEC financial reporting, to be the Company's principal financial
and accounting officer.  

The new CFO will report directly to the Company's Chief Executive
Officer.  The Company is undertaking these actions in light of the
previously announced restatement of the Company's prior financial
statements and the ongoing review of those financial statements,
as well as the demands of the current regulatory environment.

As part of the Company's effort to strengthen its finance and
accounting department, the Company and Charles P. Kirk have
mutually agreed that he will resign his positions as Chief
Financial Officer and Treasurer, effective today.  Mr. Kirk will
remain a Senior Vice President and a member of the Company's
senior management team.  The Company believes that Mr. Kirk will
continue to add significant value to the Company.

The Company has retained a search firm and is actively engaged in
the process of identifying and assessing appropriate candidates
for the CFO position.  The Company is committed to filling the CFO
position expeditiously.  Until a new CFO is hired, Elizabeth F.
Chambers, the Company's Acting Controller, and Thomas L.
Robershaw, the Company's Assistant Treasurer, jointly will fulfill
the functions of the Company's principal financial and accounting
officer.  Ms. Chambers previously served as the Company's
Assistant Controller since 1993.  Mr. Robershaw joined the Company
in 2002 as Assistant Treasurer.

"We want to thank Chuck Kirk for his many years of dedicated
service as our CFO," Steven G. Miller, the Company's Chairman,
President and Chief Executive Officer, said.  "We look forward to
continuing to work with Chuck and believe that our Company will
continue to benefit from his considerable retail expertise and
experience.  At the same time, we believe that it is in the best
interests of the Company and its stockholders that we engage a new
CFO who is a certified public accountant and who possesses more
financial accounting and public reporting expertise.  We continue
to work diligently to complete the restatement process as quickly
as possible."

The Company does not expect that the change in Mr. Kirk's role
will cause any additional delay in the completion of its
previously announced restatement or the filing of its Annual
Report on Form 10-K for fiscal 2004 and Quarterly Reports on Form
10-Q for the first and second quarters of fiscal 2005.

                     Financial Restatements

Additionally, as the Company announced on July 29, 2005,
additional corrections to its prior financial statements will be
required as part of the restatement.  The expected cumulative net
impact on the Company's net income of all additional corrections
that the Company is aware of at this time, as well as the
adjustments relating to the previously announced lease accounting
changes and sales return reserve, for fiscal years 2002 through
2004 remains less than 3% of aggregate net income as preliminarily
reported on Feb. 9, 2005, for such fiscal year periods, which
reflected the preliminary adjustments to address the previously
announced error in an account within accounts payable.  As also
stated in the July 29, 2005 announcement, these matters will
reduce net income for prior periods, which the Company anticipates
will be reflected in a balance sheet adjustment for fiscal 2002.

The Company is continuing to work diligently to complete the
review process in connection with the restatement so that its
fiscal 2004 financial statements and the associated audit by KPMG
LLP may be completed in order to permit the filing of the
Company's Annual Report for fiscal 2004 and Quarterly Reports for
the first two quarters of fiscal 2005.  If the Company is unable
to file the Annual Report for fiscal 2004 and the Quarterly Report
for the first quarter of fiscal 2005 by the Aug. 12, 2005,
extension date given it by the NASDAQ Listing Qualifications
Panel, it will request a further extension, but such an extension
may not be granted, in which case its common stock could be
delisted from the NASDAQ National Market.

Big 5 is a leading sporting goods retailer in the United States,
operating 312 stores in 10 states under the "Big 5 Sporting Goods"
name.  Big 5 provides a full-line product offering in a
traditional sporting goods store format that averages 11,000
square feet.  Big 5's product mix includes athletic shoes, apparel
and accessories, as well as a broad selection of outdoor and
athletic equipment for team sports, fitness, camping, hunting,
fishing, tennis, golf, snowboarding and in-line skating.


BISHOP GOLD: Disputes Guardsmen Resources' Default Claim
--------------------------------------------------------
Bishop Gold Inc. (TSX VENTURE:BSG), listed on the TSX Venture
Exchange Inc. under the trading symbol "BSG", received a notice
from Guardsmen Resources Inc., the vendor of its Al/Bonanza and
Lawyers properties located in the Toodoggone district of North
Central British Columbia.  Guardsmen Resources claimed that Bishop
Gold is in default pursuant to terms of the Mineral Claim Purchase
and Sale Agreement between Guardsmen and Bishop dated July 22,
2003, due to a delayed royalty payment to Guardsmen.

Concurrently with the delivery of this notice, Mr. Scott Gifford,
a director of Bishop as well as a director and significant
shareholder of Guardsmen, officially tendered his resignation as a
director of Bishop.  Following the resignation, the Company
currently has 3 active directors and is actively seeking another
independent director for the board.

Bishop Gold strongly disputes the claim of default by Guardsmen
and counsel for Bishop and Guardsmen are presently in discussions
regarding the matter.

Bishop Gold is a junior precious metals exploration company  
focused on the acquisition and development of mineral properties  
of historical exploration and past production merit in Western and  
Northern Canada. Bishop owns 100% of two significant epithermal  
gold prospects; the "The Lawyers Group" and "The Ranch" (also  
known as "The Al Group") properties in the Toodoggone region of  
north-central British Columbia.  Bishop also owns 100% of the  
Gordon Lake Property in the Giant Bay Region near Yellowknife,  
NWT.


BRANDON BELL: List of 17 Largest Unsecured Creditors
----------------------------------------------------
Brandon M. Bell & Karen Bell delivered a list of their 17 largest
unsecured creditors to the U.S. Bankruptcy Court for the District
of Arizona, Phoenix Division:

   Entity                        Nature of Claim    Claim Amount
   ------                        ---------------    ------------
Sunstate Bank                    1st Position           $412,000
1300 East Florence Boulevard     on Cattle Kate
P.O. Box 12066
Casa Grande, AZ 85230

David & Florence Amster          1st Possible Lien      $275,000
141 East Winter Drive            on Cabin Property
Phoenix, AZ 85020

Lee Valley & Associates, LLC     2nd Position on        $200,000
c/o Robert Cook, Esq.            Cattle Kate
1430 East Missouri, Suite 150
Phoenix, AZ 85014

Steve Cadwallader                2nd Possible Lien       $70,000
17100 East Shea Boulevard        Cabin Property
Suite 610
Fountain Hills, AZ 85268-6663

U.S. Small Business              3rd Position on         $44,200
Administration                   Cattle Kate
2719 North Air Fresno Drive #107
Fresno, CA 95853-4795

Apache County Treasurer          Property Taxes          $40,000
75 West Cleveland
Saint John, AZ 85936

Ron & Diane Arnold               Personal Loan           $13,000

Shamrock Foods                   Alleged Business Debt    $8,000

TCS, Inc.                        Medical Bills            $4,600

Dr. Jeff Moffat                  Medical Bills            $4,265

Capital One Mastercard           Credit Card Charges      $3,544

Woodland Building Center         Alleged Business Debt    $3,011

Navopache Electric               Alleged Business Debt    $1,327

Arc & Spark Electric             Alleged Business Debt    $1,276

U.S. Department of Education     Student Loan             $1,057

Capital One VISA                 Credit Card Charges        $816

White Mountain Regional          Medical Bills              $200
Medical Center

Residing in Greer, Arizona, Brandon M. Bell & Karen Bell filed for
chapter 11 protection on June 30, 2005 (Bankr. D. Ariz. Case No.
05-11922).  Kent A. Lang, Esq., and Suzanne K. Weathermon, Esq.,
at Lang & Baker, PLC, represent the Debtors.  When the Debtors
filed for protection from their creditors, they estimated assets
between $500,000 to $1 million and debts between $1 million to $10
million.


CAMP WOOD: Chapter 9 Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: City of Camp Wood, Texas
        P.O. Box 130
        109 West Fourth Street, City Hall
        Camp Wood, Texas 78833

Bankruptcy Case No.: 05-54480

Chapter 9 Petition Date: August 5, 2005

Court: Western District of Texas (San Antonio)

Debtor's Counsel: R. Glen Ayers, Jr., Esq.
                  Langley & Banack, Inc.
                  745 East Mulberry, 9th Floor
                  San Antonio, Texas 78212
                  Tel: (210) 736-6600
                  Fax: (210) 735-6889

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $100,000 to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Soules & Wallace              Attorney fees              $69,926
745 East Mulberry, Suite 900
San Antonio, TX 78212

Perdue, Brandon, Fielder,     Default judgment           $21,780
Collin
1235 North Loop West #600
Houston, TX 77008

Ingram Tinkler Eckert         Default judgment            $8,423
[Address not provided]

CP&L Electric                 Services                    $3,505

Texas Municipal League        Goods and services          $3,211

Source Environmental          Goods and services          $2,750
Sciences

Doyle Vernor                  Goods and services          $2,300

FBO American Payment Systems  Services                    $1,300

Texas Workforce Commission    Goods and services          $1,094

Waste Management/Covel Gard   Goods and services          $1,090

Peerless Equipment Co.        Goods and services            $921

Ron Perrin Water              Goods and services            $894
Technologies

UGRAL                         Goods and services            $883

Dynamic A/C Appliance         Goods and services            $750

Internal Revenue Service      Taxes                         $750

Pico Petroleum Products       Goods and services            $618

Texas Municipal League -      Services                      $522
Health Insurance

Moody Brothers                Goods and services            $502

Nueces Canyon ISD             Goods and services            $500

National Waterworks           Goods and services            $496


CAPTEC FRANCHISE: Fitch Junks Rating on Seven Certificate Classes
-----------------------------------------------------------------
Fitch takes these rating actions on the outstanding classes for
these issues for Captec Franchise Receivables Trust:

   Series 1996-A

     -- Class A downgraded to 'CC' from 'CCC';
     -- Class B downgraded to 'C' from 'CC'.

   Series 1998-1

     -- Class A-3 affirmed at 'BBB';
     -- Class B downgraded to 'B' from 'BB';
     -- Class C downgraded to 'C' from 'CCC';
     -- Class A-X downgraded to 'BBB' from 'A'.

   Series 2000-1:

     -- Class A-1 downgraded to 'BBB' from 'A';
     -- Class A-2 downgraded to 'BBB' from 'A';
     -- Class B downgraded to 'B' from 'BBB';
     -- Class C downgraded to 'CCC' from 'BB';
     -- Class D downgraded to 'CC' from 'CCC';
     -- Class E downgraded to 'C' from 'CC';
     -- Class F remains at 'C';
     -- Class A-IO downgraded to 'BBB' from 'A'.

The negative rating actions reflect additional reductions in the
credit enhancement Fitch expects will be available to support each
class in these transactions.  These reductions are based on
Fitch's expected recoveries on defaulted collateral.  Fitch's
recovery expectations are based on historical collateral-specific
recoveries experienced in the franchise ABS sector.  Rating
affirmations are based on the transactions' performing within
Fitch's expectations.


CATHOLIC CHURCH: Spokane Cash Mgt. Order Hearing Set for Sept. 12
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Washington
rules that the Interim Cash Management Order entered on
February 25, 2005, is continued in full force with no alteration
until September 12, 2005, unless sooner modified by Court order.

Judge Williams will convene a hearing to consider further
extension and modification of the Interim Cash Management Order on
September 12, 2005, at 2:00 p.m., via telephone.  Judge Williams
directs the parties who will participate in the hearing to call
telephone number 509-353-3183.

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: Spokane Litigants Hires Traxi LLC as Advisor
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Washington
authorizes the Official Tort Litigants Committee to retain Traxi
LLC as financial advisors as of March 30, 2005.

Judge Williams rules that Traxi may provide limited accounting
advice to the Tort Litigants so that the Tort Litigants
understands the overall concept of the Diocese of Spokane's
accounting system, how fund accounting works vis-a-vis the Diocese
and the affiliated entities, to interpret and understand the
monthly operating statement, and to assist the Tort Litigants in
formulating questions for depositions.

However, to the extent that the Tort Litigants sought the
retention of Traxi to analyze the assets of the affiliated
entities, the application is temporarily denied without prejudice
to the Tort Litigants' right to renew the application after the
Court rules on the Tort Litigants' request for summary judgment.

Requests for compensation and cost reimbursement from the
Debtor's estate will be subject to approval by Court order.

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)


CENTRAL WAYNE: Wants Solicitation Period Stretched to Sept. 30
--------------------------------------------------------------
Central Wayne Energy Recovery LP asks the U.S. Bankruptcy Court
for the Southern District of New York to extend, until September
30, 2005, the period within which it has the exclusive right to
solicit acceptances of its Plan of Liquidation filed on September
17, 2004.  The Debtor has been granted eight extensions to its
exclusive solicitation period prior to this request.

The Debtor asked for several extensions to its exclusive period so
it can engage in extensive negotiations regarding the structure of
its Plan with Wilmington Trust Company, VonWin Capital LP and the
Official Committee of Unsecured Creditors.  

As a result of these negotiations, the Debtor tells the Court that
all previously disputed Plan issues have been resolved.  The
Debtor expects to file a Plan and Disclosure Statement that will
have the consent and support of Wilmington Trust, VonWin and the
Committee.

Headquartered in Baltimore, Maryland, Central Wayne Energy  
Recovery LP owns a waste-to-energy system facility that converts  
the heat energy generated by incinerating waste to electricity.   
The Company filed for chapter 11 protection on December 29, 2003  
(Bankr. D. Md. Case No. 03-82780).  Maria Chavez Ruark, Esq.,  
Piper Rudnick LLP represent the Debtor from its creditors.  When  
the Company filed for protection from its creditors, it listed  
more than $10 million in assets and more than $100 million in  
debts.


COLUMBUS MCKINNON: Soliciting Consents to Eliminate Default
-----------------------------------------------------------
Columbus McKinnon Corporation (Nasdaq: CMCO) commenced a cash
tender offer and consent solicitation for any and all of the
$142,400,000 outstanding principal amount of its 8-1/2% Senior
Subordinated Notes Due 2008.  The noteholder consents are being
solicited to eliminate substantially all of the restrictive and
reporting covenants, certain events of default and certain other
provisions contained in the indenture governing the notes.

The tender offer and consent solicitation is being made upon the
terms and conditions in the Offer to Purchase and Consent
Solicitation Statement and related Letter of Transmittal dated
Aug. 5, 2005.  

The tender offer is scheduled to expire at 12:00 midnight, New
York City time, on Sept. 1, 2005, unless extended or earlier
terminated.  Noteholders who provide consents to the proposed
amendments will receive a consent payment of $10.00 per $1,000
principal amount of notes tendered and accepted for purchase
pursuant to the offer if they provide their consents on or prior
to 5:00 p.m., New York City time, on Aug. 15, 2005, unless such
date is extended.  The total consideration to be paid for each
note validly tendered prior to the Consent Date and accepted for
purchase will be $1,016.67 per $1,000 principal amount of notes,
plus accrued and unpaid interest, if any, from the last interest
payment to, but not including, the payment date.

Columbus McKinnon intends to fund the tender offer and consent
payments, and related costs, with proceeds from a private
placement of senior subordinated notes together with other
available funds.  The new notes to be sold have not been and will
not be registered under the Securities Act of 1933 and may not be
offered or sold in the United States absent registration under
the Securities Act of 1933 or an applicable exemption therefrom.

The obligations to accept for purchase and to pay for notes in the
tender offer are conditioned on, among other things, the
consummation of the new offering of senior subordinated notes, the
receipt of consents to the proposed amendments from the holders of
at least a majority of the aggregate principal amount of
outstanding notes, and the execution of a supplemental indenture
to the indenture governing the notes.

Requests for documents may be directed to D.F. King & Co., Inc.,
the Information Agent, at (888) 628-1041 (US toll-free). Questions
regarding the tender and consent solicitation may be directed to
Credit Suisse First Boston LLC at (800) 820-1653 (US toll-free) or
+1 (212) 325-7596.

Columbus McKinnon Corp. -- http://www.cmworks.com/-- is a leading  
worldwide designer, manufacturer and marketer of material handling
products, systems and services, which efficiently and
ergonomically move, lift, position or secure material. Key
products include hoists, cranes, chain and forged attachments. The
Company is focused on commercial and industrial applications that
require the safety and quality provided by its superior design and
engineering know-how.  

                        *     *     *

As reported in the Troubled Company Reporter on May 17, 2005,
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on material handling company Columbus McKinnon Corp.
The outlook was revised to positive to reflect improvement in the
company's operating performance and credit measures.

"The ratings on publicly held Columbus McKinnon reflect its highly
leveraged financial profile, including its weak (albeit improving)
credit protection measures and weak overall business profile,"
said Standard & Poor's credit analyst Natalia Bruslanova.  

Material handling is a cyclical and fragmented industry.  However,
the company has leading positions in several niche markets:

    * It holds either the No. 1 or No. 2 position in the
      material-handling, lifting, and positioning-products
      industries, and

    * 75% of sales come from markets where it is the leading
      supplier.


CONNECTOR 2000: S&P Affirms B- Ratings on $153 Mil. Revenue Bonds
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' rating on
Connector 2000 Association Inc., S.C.'s $66 million series 1998 A
senior current interest toll road revenue bonds outstanding and
$87.4 million series 1998 B senior capital appreciation toll road
revenue bonds outstanding.  The outlook on the rating is stable.
     
The ratings reflect the continued failure of traffic and revenues
to reach projected levels, and tapping of the debt service reserve
account for debt service payments in fiscals 2003-2005.  Toll
rates were raised on Jan. 3, 2005, resulting in a 28% increase for
the first six months year-to-date 2005.

However, skepticism remains regarding the project's long-term
ability to pay timely principal and interest under the current
back-ended amortization schedule.
      
"Absent dramatic and continued improvement in traffic and revenue
or debt restructuring, the rating is expected to remain at the
current level until the ongoing revenue growth, combined with debt
service reserves, fails to generate enough cash to cover principal
and interest payments," said Standard & Poor's credit analyst
Laura Macdonald.  "The rating will remain in place until it is
apparent that nonpayment of debt service is likely to occur over
the near term."
     
Connector 2000 Association is a nonprofit corporation formed in
1996 to construct and operate the Southern Connector.  The
Southern Connector is a 16-mile, four-lane startup toll road that
opened in March 2001 and extends from the intersection of I-85/185
to the intersection of I-385 in Greenville, S.C.  The toll road
provides the major east-west traffic flow in the southern section
of Greenville, which currently has no comparable roads.  As the
toll road has transitioned from the construction phase to the
operating phase, so has the management team, which is experienced
in toll road operations.
     
Connector 2000 also has series 1998 C subordinate capital
appreciation toll road revenue bonds outstanding, which Standard &
Poor's does not rate.


DEEN PREFILLED: List of 20 Largest Unsecured Creditors
------------------------------------------------------
Deen PreFilled Syringes, LLC, delivered a list of its 20 largest
unsecured creditors to the U.S. Bankruptcy Court for the District
of New Jersey, Trenton Division:

   Entity                        Nature of Claim    Claim Amount
   ------                        ---------------    ------------
Duke Realty Corporation          Landlord               $203,000
782 Melrose Avenue
Nashville, TN 37211

Baxter Healthcare                Insurance              $156,272
P.O. Box 905788
Charlotte, NC 28290

VWR International                                       $123,034
P.O. Box 2078
West Chester, PA 19380

Kal Tech                                                 $59,109
3280 US Highway 70 East
New Bern, NC 28560

Baxter Northcove                                         $56,428
P.O. Box 1390
Marion, NC 28752

A1 Credit Corporation                                    $53,504
P.O. Box 9045
New York, NY 10087

Aetna                            Insurance               $42,613
P.O. Box 88874
Chicago, IL 60695-1874

Southeastern Freight Lines                               $35,229
P.O. Box 1691
Columbia, SC 29202

Nelson Laboratories, Inc.                                $30,430
P.O. Box 17557
Salt Lake City, UT 84117-0557

GE Capital - Software                                    $27,445
P.O. Box 740420
Atlanta, GA 30374-0420

RockTenn Company                                         $25,458
P.O. Box 102064
Atlanta, GA 30368-0064

Watkins Motor Lines                                      $24,855
P.O. Box 95002
Lakeland, FL 33804

DHL Express                      Trade Debt              $24,425
P.O. Box 4723
Houston, TX 77210-4723

Met Life                         Insurance               $20,151
P.O. Box 804466
Kansas City, MO 64180-4466

BAXA Corporation                                         $16,780
P.O. Box 5721
Denver, CO 80217

Richard S. Thuma                                         $16,044
335 4th Avenue
Franklin, TN 37064

Accounttemps                                             $15,901
12400 Collections Center Drive
Chicago, IL 60693

United Healthcare                                        $14,205
Department CH10152
Palatine, IL 60055

USF Holland                                              $13,583
P.O. Box 9021
Holland, MI 49422

Management Recruiters of                                 $12,000
New Glarus
P.O. Box 579
New Glarus, WI 53574-0595

Headquartered in Hillsborough, New Jersey, Deen PreFilled
Syringes, LLC, manufactures prefilled syringes.  The Debtor filed
for chapter 11 petition on May 20, 2005 (Bankr. D. N.J. Case No.
05-27101).  Barry W. Frost, Esq., at Teich Groh represents the
Debtor in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed $6,915,350 in assets and
$6,207,059 in debts.


DELPHI CORP: Moody's Junks Corporate Family & Sr. Unsec. Ratings
----------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of Delphi
Corporation, Corporate Family rating to Caa1 from B2, following
the announcement by the company of a draw down of $1.5 billion
under its $1.825 billion secured revolving credit and further
implications that the company may need to pursue a comprehensive
restructuring if it is unable to obtain necessary concessions
under contracts with its unionized workforce and principal
customers.

The ratings on the company's senior secured bank credit
facilities, which are under a monitored borrowing base, have been
lowered to B3 from B1, and senior unsecured ratings have been
lowered to Ca from B3.  Delphi has confirmed negotiations with its
former parent and largest customer, General Motors, and the United
Automobile Workers to resolve its legacy cost issues in North
America, which have been a substantial contributing factor to
Delphi's high cost structure and ongoing losses in that region.

By drawing down under its credit facility the company has placed
liquidity on its balance sheet to address what will likely be a
period of increased operating and financial risk as it seeks to
negotiate a consensual restructuring of its operations in the
United States.  Proceeds from the drawing along with existing
balance sheet cash will assist the company in dealing with a
number of possibilities, including potential tightening of trade
terms.  

The rating actions reflect the increasing potential that a
comprehensive financial restructuring may be necessary if
negotiations are not successful in resolving the company's cost
issues in the near term.  The outlook remains negative.

Ratings downgraded include:

Delphi Corporation:

   * Corporate Family to Caa1 from B2

   * Senior Secured Bank Credit Facilities to B3 from B1

   * Senior Unsecured to Ca from B3

   * Shelf ratings: senior unsecured to (P)Ca from (P) B3;
     subordinated to (P)C from (P)Caa2; and preferred to (P)C
     from (P)Ca

   * Speculative Grade Liquidity Rating to SGL-4 from SGL-3

Delphi Trust(s):

   * Backed preferred to C from Caa2
   * Shelf ratings, (P)C from (P)Caa2

Delphi's senior secured bank credit facilities have first priority
liens over substantially all of Delphi's domestic tangible and
intangible assets with security interests over the company's
domestic manufacturing assets limited to levels below the negative
pledge basket in its indentures for unsecured notes.  The bank's
collateral includes shareholdings in certain domestic and
international subsidiaries, with the latter limited to a 65%
interest, residual interest in receivables sold to the
securitization conduit, and intercompany debt as well as up-
streamed guarantees from material domestic subsidiaries.

As a result, the B3 rating reflects their priority position and
likely higher recovery rates in a downside scenario.  Unsecured
obligations have become effectively subordinated to the higher
levels of secured debt involved with the significant draw down
under the revolver and lower recovery expectations given their
junior status in a distressed scenario.  Preferred obligations of
Delphi Trust are driven by the trust's investment in junior
subordinated debt of Delphi.

Delphi, headquartered in Troy, Michigan, is one of the world's
largest suppliers of automotive components and had annual revenues
of approximately $29 billion in 2004.


DELPHI CORP: S&P Junks Corporate Credit & Senior Unsecured Ratings
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on automotive supplier Delphi Corp. to 'CCC+' from 'B+',
its senior unsecured rating on the company to 'CCC-' from 'B-',
and its short-term rating on the company to 'C' from 'B-3'.  The
outlook is developing.
      
"The rating actions reflect increased concerns about a potential
bankruptcy filing by Delphi, in light of recent public comments by
its top executives, and the initiation of a $1.5 billion drawdown
of its revolving credit facility," said Standard & Poor's credit
analyst Martin King.
     
Troy, Michigan-based Delphi has total debt of about $4 billion and
total unfunded pension and other postretirement employee benefit
liabilities of about $14.5 billion.
     
Delphi is engaged in discussions with General Motors Corp.
(BB/Negative/B-1) (GM), its largest customer and former parent,
and the United Auto Workers (UAW), its largest union, to
restructure its unprofitable U.S. operations.  Delphi suffers from
a high, uncompetitive fixed-cost structure, primarily because of
the rich wages and benefits of its U.S. hourly workforce.  Recent
industry challenges, including lost market share and reduced
production from GM, which makes up about 50% of Delphi's sales,
and higher materials and employee benefits costs have caused
Delphi's earnings and cash flow to fall sharply this year.  

The company's inflexible labor agreements with UAW and other
unions prevent it from:

   * reducing headcount;
   
   * shutting plants;
   
   * selling unprofitable operations; or
   
   * completing other restructuring actions that might improve
     profitability.
     
Delphi is seeking improved flexibility from the union to address
its high fixed costs.  It has 35,000 hourly U.S. employees, but
close to 4,000 are redundant and continue to receive close to full
pay and benefits.  The compensation of its domestic union
employees is consistent with that of GM's, but about twice the
typical compensation provided by competing auto suppliers.
     
Any restructuring of Delphi is likely to be very costly and,
because of the company's relatively limited financial resources,
may require some funding from GM.  GM may be willing to provide
some financial support to Delphi because it buys $14 billion in
parts from the supplier and would be liable for a portion of
Delphi's employee benefit obligations should the company fail.  
But Delphi's ability to get the union and GM to agree to the
significant and likely expensive changes necessary to stabilize
its operations is highly uncertain.  Delphi's new CEO, Robert
Miller, has reportedly indicated that if an agreement cannot be
reached, the company would not have the wherewithal to continue on
its present course, which could lead to a bankruptcy filing.
     
The drawdown of the credit facility, in light of the current
discussions Delphi is having with GM and the UAW, could mean that
the company is securing its liquidity position should a bankruptcy
filing become necessary.  S&P believes the company has sufficient
liquidity to meet near-term obligations, but the media attention
surrounding the company's difficulties could disrupt Delphi's
vendor relations and weaken its liquidity cushion.


DELPHI CORP.: Reports $338 Mil. Q2 Loss & Gives Bankruptcy Warning
------------------------------------------------------------------
Delphi Corp. (NYSE: DPH) reported Q2 2005 revenues of $7.0 billion
and a GAAP net loss of $338 million, compared to Q2 2004 GAAP net
income of $143 million.  Non-GM revenues were $3.6 billion,
representing 51% of total revenues.

"Despite significant U.S. financial challenges, we continue to
experience growth and profitability in our international
operations," said Robert S. "Steve" Miller, Delphi's chairman and
CEO.

                        Bankruptcy Warning

"While we are pleased with our regional performance, it is
apparent that we must immediately address the U.S. legacy issues.
We are engaging our major unions in discussions to seek
modifications required to implement our restructuring plan, as
well as with GM to seek related financial support."

"If these discussions do not lead to the implementation of a plan
that addresses our existing legacy liabilities and the resulting
high cost of U.S. operations," Mr. Miller warns, "we will consider
other strategic alternatives, including chapter 11 reorganization
for our U.S. businesses, to preserve the value of the company and
complete our transformation plan."

On Aug. 5, Delphi drew $1.5 billion under its $1.8 billion 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.  Delphi says it
drew on the credit facility to make additional cash readily
available to finance operations to the extent required during
restructuring discussions with its unions (principally, the
International Union, United Automobile, Aerospace, and
Agricultural Implement Workers of America) and General Motors.

In its quarterly report on Form 10-Q delivered to the SEC
yesterday, Delphi explains that its discussions with the Unions
and GM involve seeking modifications required to implement such
restructuring and increased flexibility to transform, sell or
close operations under our collective bargaining agreements, as
well as seeking GM's financial support for our restructuring
efforts.  The goal of these discussions is to achieve a
sustainable cost structure for the Company's U.S. operations.  

In making its bankruptcy warning, the Company also notes in its
Form 10-Q that a modification to the current U.S. Bankruptcy Code
is scheduled to become effective October 17, 2005.  "[That]
modification generally is expected to reduce the flexibility of
companies filing for reorganization on or after [Oct. 17]," the
Delphi observes.  

                    Q2 2005 Financial Results
     
     * Revenue of $7.0 billion, down from $7.5 billion in Q2 2004.
  
     * Non-GM revenue for the quarter was $3.6 billion, up 6% from
       $3.4 billion in Q2 2004 (up 3%, excluding the effects of
       foreign exchange rates), representing 51% of Q2 revenues.
       Non-GM growth was more than offset by an 18% decline in GM
       revenues.
  
     * GAAP net loss of $338 million, which includes $49 million
       in restructuring-related charges, compared to Q2 2004 net
       income of $143 million.

     * GAAP cash flow used in operations was $305 million,
       including $625 million in pension contributions during
       the quarter, compared to GAAP cash flow from operations
       of $549 million in Q2 2004.  For the first half of 2005,
       GAAP cash flow from operations was $224 million.
  
     * Capital expenditures were $319 million, including
       approximately $101 million paid to purchase certain
       previously leased facilities.

"While Delphi continues to be impacted by U.S. legacy cost issues,
we are still driving our non-GM sales for long-term growth and
diversification," said John Sheehan, Delphi's acting CFO. "With
Delphi Medical Systems, we announced several actions that will
strengthen our position in the medical components field, including
booking more than $200 million in new business this year for
respiratory care devices."

                      Restructuring Update

In Q2 2005, Delphi made additional progress on restructuring
activities announced in December 2004 to reduce its global
workforce by 8,500 positions.  During the quarter, Delphi reduced
its global workforce by approximately 2,100 positions, bringing
total 2005 reductions to approximately 3,600.

"Attrition in the U.S. has been challenging in this low-volume
environment -- principally with flow-back opportunities -- and
although we are still tracking to the reduction of 8,500
positions, we may see a different mix between U.S. and
international reductions than we originally anticipated," said
Sheehan.

In other restructuring-related activities, on July 1, 2005, Delphi
completed the sale of its battery product line to Johnson Controls
Inc. for $202.5 million, which included the sale of facilities in
France, Mexico and Brazil. In addition to the sale of the battery
operations in Q3 2005, Delphi ceased manufacturing at the Lansing
Cockpit Assembly plant in Lansing, Mich. during the second quarter
2005.

                        Q3 2005 Outlook

Mr. Sheehan said Delphi expects continued lower North American
production levels in Q3 2005. At these low volume levels, revenue
is expected to range between $6.1 billion and $6.3 billion, and
margins will be lower as compared to the first half of the year,
due to the high U.S. legacy fixed-cost structure. The company
expects GAAP cash flow from operations to be negative in the third
quarter of 2005.

                         Credit Ratings

Delphi is rated by the three major rating agencies:

                           Senior      Senior       Preferred
                           Secured     Unsecured    Stock
     Rating Agency         Rating      Rating       Rating
     -------------         --------    ---------    ---------
     Standard & Poor's       B-          CCC-         CC
     Moody's                 B3          Ca           C
     Fitch Ratings           B           CCC          CCC-

As a result of recent downgrades, Delphi's facility fee and
borrowing costs under its credit facilities increased.  "If we are
further downgraded, our cost of borrowing will continue to
increase and availability of credit to meet our liquidity needs
may be further constrained," Delphi said in its Form 10-Q filed
with the SEC yesterday.  

                          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 June 30, 2005, Delphi Corporation's balance sheet showed
a $4.56 billion stockholders' deficit, compared to a $3.54
billion deficit at Dec. 31, 2004.


DELPHI CORPORATION: GM Says It's Considering a Bail-Out Plan
------------------------------------------------------------
General Motors Corporation disclosed in its quarterly report on
Form 10-Q filed with the SEC yesterday that Delphi Corporation has
presented the automaker with information regarding its intention
to address its existing legacy liabilities and the high cost
structure of its U.S. operations.  GM understands that this
information has also been shared with the UAW and other unions.  
GM also understands that Delphi will consider other strategic
alternatives, including a judicial reorganization under Federal
bankruptcy laws, if it is not successful in achieving a
restructuring by October 17, 2005.

"GM is considering Delphi's request in order to determine what
participation by GM, if any, would be in the best interests of GM
and its stockholders," GM states in its quarterly report.  "Delphi
has notified GM that, assuming GM participates in Delphi's
restructuring in a manner satisfactory to Delphi, it is Delphi's
view there is not a likelihood that GM would become obligated to
provide any benefits pursuant to the benefit guarantee agreement
GM entered into with certain of its unions in 1999, but has
indicated that without GM's financial participation in Delphi's
restructuring proposal, it expects that its view as to that matter
would change."

                         Credit Ratings

Delphi is rated by the three major rating agencies:

                           Senior      Senior       Preferred
                           Secured     Unsecured    Stock
     Rating Agency         Rating      Rating       Rating
     -------------         --------    ---------    ---------
     Standard & Poor's       B-          CCC-         CC
     Moody's                 B3          Ca           C
     Fitch Ratings           B           CCC          CCC-

As a result of recent downgrades, Delphi's facility fee and
borrowing costs under its credit facilities increased.  "If we are
further downgraded, our cost of borrowing will continue to
increase and availability of credit to meet our liquidity needs
may be further constrained," Delphi said in its Form 10-Q filed
with the SEC yesterday.  

                          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 June 30, 2005, Delphi Corporation's balance sheet showed
a $4.56 billion stockholders' deficit, compared to a $3.54
billion deficit at Dec. 31, 2004.


EAST 44TH REALTY: Wants Davidoff Malito as Bankruptcy Counsel
-------------------------------------------------------------
East 44th Realty, LLC, asks the U.S. Bankruptcy Court for the
Southern District of New York for permission to employ Davidoff
Malito & Hutcher LLP as its bankruptcy counsel, nunc pro tunc to
Aug. 5, 2005.

The Debtor has selected Davidoff Malito because of the Firm's
extensive experience and knowledge in the fields of debtors' and
creditors' rights, general corporate law, debt restructuring and
corporate reorganizations.  In addition, Davidoff Malito has
become very familiar with the Debtor's operations, business and
underlying litgation.  Accordingly, the Debtor believes that
Davidoff Malito is well qualified to represent it in its chapter
11 case.

The Debtor filed for chapter 11 protection because its Landlord,
East Forty-Fourth Street LLC, had alleged a default under the
Lease and wants to terminate the contract.  The lease dispute is
currently pending before the New York Supreme Court, Appellate
Division for the First Department (East 44th Realty, LLC v. East
Forty-Fourth Street L.L.C., Index No. 110952/04).

Davidoff Malito is expected to:

   (a) perform all necessary services as the Debtor's counsel,
       including, without limitation, providing the Debtor with
       advice, representing the Debtor, and preparing all
       necessary documents on behalf of the Debtor;

   (b) take all necessary actions to protect and preserve the
       Debtor's estate during the pendency of its chapter 11 case,
       including the prosecution of actions by the Debtor, the
       defense of any actions commenced against the Debtor,
       negotiations concerning all litigation in which the Debtor
       is involved and objecting to claims filed against the
       estate;

   (c) prepare on behalf of the Debtor, as debtor-in-possession,
       all necessary motions, applications, answers, orders,
       reports and papers in connection with the administration of
       the Debtor's chapter 11 case;

   (d) counsel the Debtor with regard to its rights and
       obligations as a debtor-in-possession; and

   (e) perform all other necessary legal services.

Warren R. Graham, Esq., a Davidoff Malito's member, discloses that
his Firm has waived $12,649 for prepetition fees.  Mr. Graham also
discloses that the Firm has received a $50,000 retainer.  The
current hourly rates of professionals who will work in the
engagement are:

      Professional/Designation            Hourly Rate
      ------------------------            -----------
      Warren R. Graham, Esq.                  $450
      Cleo F. Sharaf, Esq.                    $275
      Paralegal                               $155

The Debtor believes that Davidoff Malito & Hutcher LLP is
disinterested as that term is defined in Section 101(14) of the
U.S. Bankruptcy Code.

Headquartered in New York, East 44th Realty, LLC, is a tenant of a
building located at 228-238 East 44th Street in Manhattan.  The
building is comprised of 164 residential units and three
commercial spaces.  The Debtor is the sub-lessor of the premises,
collects rents from its subtenants and manages the premises.  The
Debtor is the tenant under a net-lease dated as of Dec. 9, 1960.  
The Debtor filed for chapter 11 protection on August 5, 2005
(Bankr. S.D.N.Y. Case No. 05-16167).  Warren R. Graham, Esq., at
Davidoff Malito & Hutcher LLP represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed $25,737,873 in assets and $13,128,560 in
debts.


ENRON CORP: CIBC Will Pay $274 Million to Settle MegaClaims Suit
----------------------------------------------------------------
Enron Corp. reached an agreement with Canadian Imperial Bank of
Commerce to settle CIBC's portion of the Enron MegaClaims
litigation.  According to the terms of the agreement, CIBC will
pay Enron $250 million in cash and fully subordinate approximately
$40 million in claims held by the bank.  CIBC also agreed to pay
Enron $24 million to permit Enron to allow approximately
$80 million in claims transferred by CIBC to third parties.

"We are pleased that, to date, Enron has reached agreements in the
MegaClaims litigation that have added approximately $300 million
in cash to the estate," said Stephen Cooper, Enron's interim CEO
and chief restructuring officer.

"The CIBC agreement represents a tremendous benefit to the Estate
and we look forward to successfully resolving the remaining
claims," noted John J. Ray III, Enron's Board Chairman.

The settlement came a few days after CIBC agreed to pay
$2.4 billion to settle its portion of the Enron class action
litigation entitled Newby v. Enron Corp., brought on behalf of
Enron security purchasers.

                        Other Settlements

Enron has previously achieved a $90.8 million settlement from
these financial institutions:

    * The Royal Bank of Scotland, which agreed to pay Enron
      $41.8 million in cash.  In addition, RBS will subordinate or
      assign to Enron approximately $329 million of claims filed
      by RBS in the Enron bankruptcy in return for a $20 million
      cash payment from the estate.  This agreement resolves all
      open issues between Enron and RBS.

    * The Royal Bank of Canada, which agreed to pay $49 million to
      Enron, comprising of:

      -- $25 million in cash to settle claims against the bank and  
         other members of the RBC financial group; and

      -- $24 million in cash to allow Enron to pursue $114 million
         of claims held by RBC or transferred by RBC to third
         parties.

                        Remaining Defendants

The remaining financial institutions involved in the MegaClaims  
litigation include:

   -- Barclays PLC;
   -- Citigroup Inc.;
   -- Credit Suisse First Boston, Inc.;
   -- Deutsche Bank AG;
   -- J.P. Morgan Chase & Co.;
   -- Merrill Lynch & Co., Inc.; and
   -- The Toronto-Dominion Bank.

Enron's complaint includes claims that the banks:

   -- aided and abetted breaches of fiduciary duties;
   -- aided and abetted fraud; and
   -- engaged in civil conspiracy.  

The suit also includes bankruptcy-based claims relating to
equitable subordination; preferential and/or fraudulent transfers;
and the re-characterization of certain transactions.

The agreement, which resolves all open issues between Enron and
CIBC, remains subject to the approval of the United States
Bankruptcy Court for the Southern District of New York.

Enron is represented in this matter by Susman Godfrey LLP; Togut,
Segal & Segal; and Venable LLP.

"This represents another important step in resolving our
litigation matters regarding Enron, allowing us to move forward on
meeting our long-term business objectives," Gerry McCaughey,
CIBC's President and Chief Executive Officer, said.

CIBC is a leading North American financial institution.  CIBC
provides a full range of products and services to over nine
million retail clients, administers Cdn. $184.5 billion of assets
for individuals and meets the complex business needs of corporate
and institutional clients. At year-end, CIBC's total assets were
Cdn. $278.8 billion and its market capitalization was Cdn.
$25.7 billion.

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 CORP: SEC Okays Financing Application Until July 31, 2008
---------------------------------------------------------------
The U.S. Securities and Exchange Commission permitted Enron Corp.
and its subsidiaries including Portland General Electric Company
to enter into a number of transactions including financing, non-
utility corporate reorganizations, dividends, affiliate sales of
goods and services, to allow them to continue to operate their
businesses through July 31, 2008.

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: Wants Court to Nix KBC Bank's Claims
------------------------------------------------
Reorganized Enron Corporation and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Southern District of New York to
enter a summary judgment expunging Claim No. 11975 filed by KBC
Bank, N.V., arising under a $215 million Loan Agreement, dated
June 30, 2000.

Melanie Gray, Esq., at Weil, Gotshal & Manges LLP, in New York,
asserts that the Claim must be expunged because KBC discharged
Enron from its obligations when KBC and other lenders abandoned
the terms of the Original Loan Agreement with an Amended Restated
Loan Agreement.

Under the Original Loan Agreement and related Swap Agreements,
KBC was prohibited from "tak[ing] any action or giv[ing] consents
with respect to or to agree to changes to, [the Original KBC Loan
Agreement] and the other Loan Documents without the consent of
Enron. . . ."

Ms. Gray adds that Section 2.4(d) of the Confirmation to the Swap
-- which provides that the parties' obligations are absolute and
conditional -- does not grant unconditional pre-consent to KBC to
modify the Original Loan Agreement; otherwise, it would be
inconsistent with the terms agreed by the parties.

Neither does the Swap Agreements' termination on November 30,
2001, terminate Enron's right to assert the defense of discharge.
As stated in the parties' International Swap Dealers Association
Master Agreement, the "designation of an Early Termination Date .
. . [is] without prejudice to the other provisions of this
Agreement."

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

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

    * Transwestern Pipeline Company;

    * Enron Liquids Pipeline Company;

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

    * Northern Natural Gas Company.

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

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

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

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

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

                        Debtors Amend Request

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

                      Proposed Allocation Basis

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The distributions will take place after:

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

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

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

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

The Reorganized Debtors sought Judge Gonzalez's authority to:

    (a) terminate the Trust;

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

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

           Trust Participants Ask Court to Strike Motion

Lou Geiler and Larry Moore, individually and on behalf of all
current and former participants and dependants in the Northern
Natural Gas Company Medical and Dental Plan for Retirees and
Surviving Spouses, Northern Natural Gas Company, MidAmerican
Energy Company Pension and Employee Benefits Plans Administrative
Committee; and Wells Fargo Bank, National Association, as Trustee
of the MidAmerican Energy Company Master VEBA Trust for Non-
bargaining Employees, ask Judge Gonzalez to strike the Debtors'
motion for termination and distribution of the assets of the
Enron Gas Pipelines Employee Benefits Trust from further
consideration of the Court.

Northern Natural Gas objected to the Debtors' proposed:

     -- allocation and related transfer of assets from the Trust;
     -- allocation of liabilities for Retiree Benefits;
     -- allocation of its participants and dependents;
     -- allocation methodology; and
     -- release of liability.

Patrick L. Hayden, Esq., at McGuireWoods LLP, in New York, tells
the Court that as of June 7, 2005, the fiduciaries of the Enron
Plan and the Trust have refused to make the required
determination and distribution, despite Northern Natural Gas'
demands for the past two years.

The Motion essentially seeks a determination of the validity,
priority and extent of various competing interests in property
held by the Trust, Mr. Hayden notes.  That relief cannot be
properly raised by a motion, but can only be asserted by an
adversary proceeding, Mr. Hayden asserts.  The necessary parties
cannot be afforded the protections under Rule 19 of the Federal
Rules of Civil Procedure and Rule 7019 of the Federal Rules of
Bankruptcy Procedure in a motion practice.

Mr. Hayden avers that the Allocation Issues do not qualify as a
core proceeding or as a "related to" proceeding under Section 157
of the Judicial Procedures Code based on five grounds:

    (a) The Trust was established prepetition pursuant to a Trust
        Agreement and in accordance with a policy statement
        promulgated by the Federal Regulatory Commission, in which
        the Reorganized Debtors don't hold any beneficial
        interest;

    (b) Resolution of Allocation Issues does not depend on
        bankruptcy laws, and an action thereon could undoubtedly
        proceed in a court that lacks federal bankruptcy
        jurisdiction.  The outcome of the Motion would have no
        effect on the Debtors' estate or the Plan;

    (c) Property held by the Trust has never been bankruptcy
        estate property under Section 541 of the Bankruptcy Code
        or property of the Debtors;

    (d) Resolution of Allocation Issues will have no effect on
        distributions to the Reorganized Debtors' creditors; and

    (e) The Reorganized Debtors have no beneficial interest in the
        Trust, and, as admitted in Motion, their sole involvement
        with the Trust is to maintain and administer the Trust.

On June 17, 2005, the Reorganized Debtors amended their Motion.
However, Mr. Hayden notes that, notwithstanding the Amendment,
the Debtors still fail to establish that the Allocation Issues
are core or "related to" matters.

Mr. Hayden adds that a lawsuit has been filed in the United
States District Court for the District of Nebraska entitled Lou
Geiler, Larry Moore, et al., Plaintiffs, v. Robert W. Jones,
Sarah A. Davis, et al., Defendants, on June 7, 2005.  The
District Court Action asserts against the Fiduciaries causes of
action for breach of fiduciary duty regarding administration of
the Trust.

In the interest of judicial economy and full adjudication of all
issues, Mr. Gelier, et al., wants the Allocation Issues included
in the District Court Action.  Out of an abundance of caution,
they did not include the Reorganized Debtors as defendants in the
Action.

                         Debtors Respond

The Reorganized Debtors want the Gelier Motion denied in its
entirety.

Melanie Gray, Esq., at Weil, Gotshal & Manges LLP, in New York,
notes that there is a complete lack of case law supporting the
Gelier Motion.

As long as Enron faces the potential for claims arising out a
Trust asset deficiency and continues to incur expenses in
administration of the Trust, then In re Adelphia Communications
Corp., 285 B.R., indicates that the Court can, and should,
exercise jurisdiction over the Motion.

Ms. Gray asserts that the Geiler motion is "nothing more than a
frivolous attempt to litigate termination of the Trust anywhere
but before [the] Court."

Had Geiler, et al., seriously considered that the Court lacked
jurisdiction on the Motion, they should have voiced those
objections years ago, Ms. Gray remarks.

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)


EUGENE PEARSON: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Eugene Charles Pearson & Angela Kathleen Dawson
        1 Richland Court
        Rome, Georgia 30161

Bankruptcy Case No.: 05-42859

Chapter 11 Petition Date: August 5, 2005

Court: Northern District of Georgia (Rome)

Debtors' Counsel: James R. McKay, Esq.
                  Fuller & McKay
                  P.O. Box 6063
                  Rome, Georgia 30162-6063
                  Tel: (706) 295-1300

Estimated Assets: Less than $50,000

Estimated Debts:  $1 Million to $10 Million

Debtors' 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
IRS, Insolvency                                         $234,194
Room 400 - Stop 334D
401 W. Peachtree St., N.W.
Atlanta, Georgia

Greater Rome Bank                                       $139,240
P.O. Box 5271
Rome, GA 30162

Sallie Mae                                               $83,372
P.O. Box 9500
Wilkes-Barre, PA 18773-9500

SunTrust                      Collateral FMV:            $34,598
                              $28,500

Suntrust                                                 $31,495

Coosa Valley Credit           Collateral FMV:            $30,829
                              $26,000

MBNA America                                             $19,918

Choice Visa                                              $16,452

MBNA America                                             $15,119

Beneficial                                               $10,806

MBNA America                                              $9,313

Beneficial                                                $8,962

American Express                                          $6,698

Citizens First Bank                                       $5,754

Citi Gold Card                                            $5,344

Coosa Valley Credit                                       $5,126

American Express                                          $4,563

Bank of America Credit Card                               $4,107

Sears                                                     $3,469

Bank One Visa Card                                        $2,414


EXIDE TECH: Director Eugene Davis Resigns from Board
----------------------------------------------------
Exide Technologies (NASDAQ: XIDE) disclosed the resignation of
Eugene I. Davis as a member of the Company's Board of Directors
effective Aug. 2, 2005.  Mr. Davis was a member of the Board that
was formed after Exide Technologies emerged from Chapter 11 in
2004.

"I want to thank Gene for his service on Exide's Board --
particularly his leadership as the Chairman of the Compensation
Committee and of the former Executive Committee, which helped to
oversee the Company until the selection of Gordon Ulsh as Exide's
President and CEO," said Chairman of the Board John P. Reilly.

Headquartered in Princeton, New Jersey, Exide Technologies --    
http://www.exide.com/-- is the worldwide leading manufacturer and          
distributor of lead acid batteries and other related electrical   
energy storage products.  The Company filed for chapter 11   
protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125).   
Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland &   
Ellis, represent the Debtors in their restructuring efforts.   
Exide's confirmed chapter 11 Plan took effect on May 5, 2004.  On   
April 14, 2002, the Debtors listed $2,073,238,000 in assets and   
$2,524,448,000 in debts.  (Exide Bankruptcy News, Issue No. 70;  
Bankruptcy Creditors' Service, Inc., 215/945-7000)

                        *     *     *   

As reported in the Troubled Company Reporter on July 8, 2005,   
Standard & Poor's Ratings Services lowered its corporate credit   
rating on Exide Technologies to 'CCC+' from 'B-', and removed the   
rating from CreditWatch with negative implications, where it was   
placed on May 17, 2005.   

"The rating action reflects Exide's weak earnings and cash flow,   
which have resulted in very high debt leverage, thin liquidity,   
and poor credit statistics," said Standard & Poor's credit analyst   
Martin King.  Lawrenceville, New Jersey-based Exide, a   
manufacturer of automotive and industrial batteries, has total   
debt of about $740 million, and underfunded postemployment benefit   
liabilities of $380 million.


FACTORY 2-U: Ch. 7 Trustee Hires Peisner Johnson as Tax Consultant
------------------------------------------------------------------
Jeoffrey L. Burtch, the chapter 7 trustee overseeing the
liquidation of Factory 2-U Stores, Inc., and its debtor-
affiliates, asks the U.S. Bankruptcy Court for the District of
Delaware for authority to hire the accounting firm of Peisner
Johnson & Company, LLP, as his special tax consultant, nunc pro
tunc to July 11, 2005.

Peisner Johnson will assist the trustee in investigating,
preparing and filing any claims for tax assessment reductions and
refunds within the maximum lookback period allowed by applicable
state law.

Jerry S. Peisner, CPA, a partner at Peisner Johnson, tells the
Court that his Firm will receive a commission equal to 40% of any
tax assessment reductions and refunds identified the Firm and
received by the Trustee.  The Firm will not receive any fee if the
Trustee receives no tax assessment reductions or refunds.  Mr.
Peisner adds that the Firm is solely responsible for all expenses
incurred in connection with this engagement.

The Trustee assures the Court that Peisner Johnson is a
"disinterested person" as that term is section 101(14) of the
Bankruptcy Code.

Peisner Johnson & Company, LLP, founded by Jerry S. Peisner, CPA
and Andrew H. Johnson, CPA, in 1992, specializes in state and
local tax consulting.

Headquartered in San Diego, California, Factory 2-U Stores, Inc.  
-- http://www.factory2-u.com/-- operates a chain of off-price   
retail apparel and housewares stores in 10 states, mostly in the
western and southwestern US.  The stores sell branded casual
apparel for the family, as well as selected domestics, footwear,
and toys and household merchandise.  The Company filed for chapter
11 protection on January 13, 2004 (Bankr. Del. Case No. 04-10111).  
The Court converted the Debtors' case into a chapter 7 proceeding
on Jan. 27, 2005, and appointed Jeoffrey L. Burtch as trustee.  M.
Blake Cleary, Esq., and Robert S. Brady, Esq., at Young Conaway
Stargatt & Taylor, LLP, represent the Debtors in their bankruptcy
cases.  When the Debtors filed for protection from their
creditors, they listed $136,485,000 in total assets and
$73,536,000 in total debts.


FACTORY 2-U: Trustee Wants Richard Franklin as Claims Auditor
-------------------------------------------------------------
Jeoffrey L. Burtch, the chapter 7 trustee overseeing the
liquidation of Factory 2-U Stores, Inc., and its debtor-
affiliates, asks the U.S. Bankruptcy Court for the District of
Delaware for authority to hire Richard C. Franklin as his Claims
Auditor, nunc pro tunc to July 11, 2005.

The Trustee selected Mr. Franklin as his Claims Auditor because of
his general experience and knowledge of insurance and workers'
compensation claims.  

From 2000 to 2004, the Debtor made over $10 million in payments
for claims to various workers compensation insurers.  The Trustee
has been unable to identify a third party administrator who
participated in a review of the claims in this period.  Mr.
Franklin will:

    a) identify a population of claims that would be audited from
       the loss runs of the workers compensation insurers from
       2000 to 2004;

    b) acquire individual claim files, identified in the test
       population, from the insurers and review these files for
       appropriateness of the bills submitted and treatment
       provided.

    c) note any exceptions based upon his professional experience
       and communicate with the insurer on an individual claim
       basis seeking a fee adjustment.

    d) report to the Trustee regarding any exceptions identified
       in his audit and based upon the frequency and type of
       exceptions may be asked to expand his audit beyond the  
       original test population.
  
    e) will provide expert litigation and trial assistance to the
       Trustee, as needed, to obtain a refund from the workers
       compensation insurers.

    f) provide other analytical and litigation services for the
       Trustee in connection with these workers compensation
       issues on an as needed basis and as requested by the
       Trustee or his legal counsel.

Mr. Franklin charges $350 per hour for analysis of insurance
issues, including the preparation of expert reports, preparation
for depositions and preparation for trials.  His rate for actual
time testifying in Court or in depositions is $450 per hour.

To the best of the Trustee's knowledge, Mr. Franklin holds no
interest adverse to the Debtor or its estate.

Richard C. Franklin is a property and casualty insurance and
reinsurance professional with experience developing and managing
U.S. personal and commercial lines business for major insurers.  
His primary strengths include business analysis and strategy,
underwriting, marketing and business development, regulatory and
operations management.  His regulatory experience spans 25 years
and includes personal and commercial lines, product line
management, filing, compliance and customer service.

Headquartered in San Diego, California, Factory 2-U Stores, Inc.  
-- http://www.factory2-u.com/-- operates a chain of off-price   
retail apparel and housewares stores in 10 states, mostly in the
western and southwestern US.  The stores sell branded casual
apparel for the family, as well as selected domestics, footwear,
and toys and household merchandise.  The Company filed for chapter
11 protection on January 13, 2004 (Bankr. Del. Case No. 04-10111).  
The Court converted the Debtors' case into a chapter 7 proceeding
on Jan. 27, 2005, and appointed Jeoffrey L. Burtch as trustee.  M.
Blake Cleary, Esq., and Robert S. Brady, Esq., at Young Conaway
Stargatt & Taylor, LLP, represent the Debtors in their bankruptcy
cases.  When the Debtors filed for protection from their
creditors, they listed $136,485,000 in total assets and
$73,536,000 in total debts.


FLIGHTLEASE HOLDINGS: Foreign Reps. Want Dr. Corti's Testimony
--------------------------------------------------------------
Stephen John Akers and Nick Stuart Wood of Grant Thornton UK LLP,
the foreign representatives and joint liquidators in the voluntary
liquidation of Flightlease Holdings (Guernsey) Limited ask the
U.S. Bankruptcy Court for the Northern District of California for
permission to question Dr. Mario Corti of Boston, Massachusetts.

Flightlease A.G., the parent company of Flightlease Holdings, and
various other entities in the SwissAir Group commenced insolvency
proceedings in Switzerland in early October 2001.  The insolvency
proceedings are supervised by the Royal Court of Guernsey.

                    Dr. Corti's Involvement

The foreign representatives tell the Court that Dr. Corti's
testimony will aid them greatly in deciding which claims to pursue
against GATX Third Aircraft Corp. and its officers in relation to
a Joint Order Contract.

Dr. Corti served as Chairman and CEO of the SwissAir Group  when
Flightlease entered into a business agreement with GATX Third
Aircraft.  
  
                     Joint Order Contract

The Debtor and GATX formed GATX Flightlease Aircraft Company Ltd.
to purchase commercial aircraft from Airbus, which GTAX then would
lease to SAir and other carriers.  In 1999, GTAX executed an
aircraft purchase agreement with Airbus.

On October 11, 2001, Airbus purported to terminate the Joint Order
Contract with GATX and the Debtor, in violation of its terms.  
Airbus has retained approximately $227 million in pre-delivery
payments that GTAX paid to Airbus under the Joint Order Contract
for undelivered aircraft.  GTAX ceased operations in 2001.

The foreign representatives consider whether the purported
termination of the Joint Order Contract and related events give
rise to significant claims against one or more parties that they
should pursue for the benefit of the Debtor's estate.

                      Discovery Process

In accordance with a Court order, the foreign representatives
examined several employees and former employees of GATX and
reviewed various documents in GATX's possession or control.  GATX
and the foreign representatives agreed to conduct a consensual
discovery process.  As a result of the parties' negotiations, the
foreign representatives have only recently completed the
employees' depositions.

The foreign representatives are represented by:

          Timothy A. Miller, Esq.
          Kurt Ramlo, Esq.
          Skadden, Arps, Slate, Meagher & Flom LLP
          Four Embarcadero Center, Suite 3800
          San Francisco, California 94111-5974
          Tel: 415-984-6400

               - and -
          
          J. Gregory St. Clair, Esq.,
          Adlai S. Hardin III, Esq.,
          Skadden, Arps, Slate, Meagher & Flom LLP
          Four Times Square
          New York, NY 10036-6522
          Tel: 212-735-3000
          
               - and -

          Edward J. Meehan, Esq.
          Skadden, Arps, Slate, Meagher & Flom LLP
          1440 New York Avenue, NW
          Washington, DC 20005-2111
          Tel: 202-371-7000
          
Headquartered in Guernsey, Flightlease Holdings (Guernsey) Limited
is involved in various aspects of commercial and private aircraft
operation and leasing throughout the world.  The Company filed a
Section 304 petition on October 22, 2004 (Bank. N.D. Calif. Case
No. 04-32989).  Stephen John Akers and Nick Stuart Wood, of Grant
Thornton U.K. LLP, were appointed foreign representatives and
joint liquidators.  The petition disclosed assets and liabilities
of more than $100 million.


FLOWSERVE CORP: S&P Rates $1 Billion Credit Facility at BB-
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' senior
secured bank loan rating to Irving, Texas-based Flowserve Corp.'s
$1 billion credit facility.  A recovery rating of '3' was also
assigned, indicating meaningful recovery of lender principal in
the event of a default.  At the same time, S&P affirmed its
ratings on Flowserve Corp., including the 'BB-' corporate credit
rating and 'B-3' short-term credit rating.
     
The proposed $1 billion senior secured credit facilities consist
of a $400 million revolving credit facility due in five years and
a $600 million term loan facility due in seven years.  Flowserve
plans to use the proceeds from the new $1 billion borrowing to
refinance:

   * its existing terms A and C debt,
   * its existing revolving credit facility, and
   * its outstanding 12.25% senior subordinated notes.

Standard & Poor's would withdraw ratings on those issues once
repaid.  The company will have about $1 billion of rated debt
outstanding after the bank loan has closed in mid-August and the
bonds have been called within the 30-day period.
     
The outlook is stable.
     
This refinancing comes amid the company's continued delay of its
SEC filings.  Flowserve has said it will restate past financial
statements from 2000 through early 2004.  These restatements are
meant to address accounting issues that have prompted changes in
senior management.
     
Cash interest savings as a result of the proposed transaction will
be significant, and Standard & Poor's considers such a refinancing
to be a positive development because it would lengthen the
company's debt maturities and reduce its cash interest costs.
However, the refinancing has no immediate impact on the rating.
      
"The ratings on Flowserve Corp., a manufacturer of engineered
pumps, valves, and mechanical seals, reflect the company's
somewhat elevated financial risk and its satisfactory business
profile," said Standard & Poor's credit analyst John R. Sico.  
"The financial risk stems partly from the company's debt-financed
acquisitions of pumps and valve businesses, but also from its weak
end markets.  However, this risk is partly offset by management's
focus on gradual debt reduction using internal cash generation.
Meanwhile, some end markets such as upstream petroleum and
chemicals have been recovering."
     
In February 2004, Flowserve announced that it would restate its
financial results for 2000 through the first nine months of 2003,
mostly to correct inventory and related balances, and these
corrections will result in cost-of-sales adjustments.  These
changes stemmed from failure by some employees in the valve and
pump business to comply with internal control procedures following
computer system implementations.  The latest results reported in
any detail are for the June 2004 quarter.  The restatements
address issues with certain:

   * intercompany accounts,
   
   * deferred tax accounts,
   
   * consolidation processes,
   
   * non-U.S. pension accruals,
   
   * unreconciled accounts at some facilities, and
   
   * the aggregate effect of other individually insignificant
     adjustments.
     
Because of these issues, the company continues to be delayed in
its SEC filings.  It will restate its financial statements from
2000 through the first quarter of 2004, and it expects to file its
2004 Form 10-K in the third quarter.


GLOBAL CROSSING: Andersen Settles Class Action Suit for $25 Mil.
----------------------------------------------------------------
Since February 2002, more than 50 class action lawsuits alleging
securities law violations were filed against current and
former officers, directors and employees of Global Crossing Ltd.
Investors accused GX of falsifying financial statements to hide
losses.

The Judicial Panel on Multi-District Litigation centralized all
those actions with the Public Employee's Retirement System of
Ohio and the State Teachers' Retirement System of Ohio, as lead
plaintiffs, who claimed more than a $110 million loss.

In an order dated May 29, 2003, Judge Lynch of the United States
District Court for the Southern District of New York consolidated
five putative class actions into the Main Action.  The additional
actions alleged securities law violations against Asia Global
Crossing, Ltd.'s officers and employees.

On March 22, 2004, the Lead Plaintiffs filed their second amended
consolidated class action complaint in the District Court.  The
defendants in the Action include:

    * Arthur Andersen LLP,
    * Mark Fagan,
    * Joseph F. Berardino,
    * Thomas L. Elliot,
    * Anthony J. Amoruso,
    * Scott Taub,
    * Benjamin Neuhausen,
    * Carl E. Bass,
    * Amy Ripepi,
    * John Stewart,
    * Dorsey L. Baskin, Jr.,
    * Gary Michael Crooch,
    * Rick Petersen,
    * Thomas Hoey,
    * Ronald J. Weeks,
    * Andersen S.C., and
    * Arthur Andersen Asahi & Co.

After more than two years of sporadic arm's-length and protracted
negotiations, Arthur Andersen delivered to the District Court a
$25,000,000 partial settlement that would dismiss with prejudice
the Action with respect to the Andersen Defendants.  The
settlement was preliminary approved on July 7, 2005.

Arthur Andersen, GX's former auditor, denied the allegations.
The firm entered into the settlement to eliminate the
uncertainties and expense surrounding protracted litigation.

Judge Lynch will convene a hearing on Oct. 27, 2005, at 2:00 p.m.,
to determine, among other things, whether:

    -- the Action against Arthur Andersen should be finally
       certified as a class action for settlement purposes;

    -- the Settlement Agreement should be approved as fair and
       reasonable; and

    -- the Action should be dismissed with prejudice.

Information about the GX securities litigation developments can
be accessed at http://www.globalcrossinglitigation.com/

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, Global Crossing's total liabilities exceed its
total assets by $30 million.


HIGHLANDERS ALLOYS: List of 13 Largest Unsecured Creditors
----------------------------------------------------------
Highlanders Alloys, LLC, delivered a list of its 13 largest
unsecured creditors to the U.S. Bankruptcy Court for the Southern
District of West Virginia, Huntington Division:

   Entity                        Nature of Claim    Claim Amount
   ------                        ---------------    ------------
Industrial Development, LLC      Trade Debt           $2,938,251
230 Capitol Street, Suite 300
Charleston, WV 25301

Internal Revenue Service         Taxes                $1,100,000
425 Juliana Street
Parkersburg, WV 26101

Boris Bannai                     Trade Debt             $400,000
c/o Global Industrial
Projects, Ltd.
50 Dizengoff Street
Top Tower, 18th Floor
Tel Aviv, Israel

J.W. Stenger Trucking, Inc.      Trade Debt              $91,989
c/o Gary W. Smith
Smith & Coury
316 South Main Street
Woodsfield, OH 43793

R&J Trucking                     Trade Debt              $75,901
c/o J. Nicholas Barth
Barth & Thompson
P.O. Box 129
Charleston, WV 25321

Tube City                        Trade Debt              $75,832
c/o Stephen L. Gaylock
Law Office of John R.
Mitchell, Jr.
205 Capitol Street, Suite 301
Charleston, WV 25301

Datagraphics, Inc.               Trade Debt              $61,166
5100 Center Avenue
Pittsburgh, PA 15232

United Rentals                   Trade Debt              $46,639
c/o Stephen L. Gaylock
Law Office of John R.
Mitchell, Jr.
205 Capitol Street, Suite 301
Charleston, WV 25301

Shaffer & Shaffer,               Trade Debt              $35,000
Attorneys at Law
2116 Kanawha Boulevard East
Charleston, WV 25339

Valley, Inc.                     Trade Debt              $33,769
701 Viand Street
P.O. Box 210
Point Pleasant, WV 25550

West Virginia                    Trade Debt              $20,000
Department of Environmental
Protection
601 57th Street Southeast
Charleston, WV 25304

GE Supply Company                Trade Debt              $10,413
c/o Stephen L. Gaylock
Law Office of John R.
Mitchell, Jr.
205 Capitol Street, Suite 301
Charleston, WV 25301

Graybar Electric Company         Trade Debt               $7,552
P.O. Box 4669
901 West Main Street, Suite 201
Bridgeport, WV 26330

Headquartered in New Haven, West Virginia, Highlanders Alloys,
LLC,  manufactures silicon manganese alloys for the steel and
automotive industries.  The Debtor, together with Global
Industrial Projects, LLC, filed for chapter 11 protection on May
27, 2005 (Bankr. S.D. W.V. Case No. 05-30516).   John Patrick
Lacher, Esq., and Robert O. Lampl, Esq., at Law Offices of Robert
O. Lampl represent the Debtors in their restructuring efforts.  
When the Debtors filed for protection from their creditors, they
listed $11,217,100 in assets and $4,896,513 in debts.


INTERSTATE BAKERIES: Court Okays $515,000 Detroit Property Sale
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Missouri
gave Interstate Bakeries Corporation and its debtor-affiliates
permission to sell its Detroit Property to U.S. Pacific
Management, Inc., an Illinois corporation.

As previously reported, the Debtors own a parcel of real property
at 1100 Oakman Avenue, in Detroit, Michigan, which include an
approximately 134,000-square foot building.

J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP,
in Chicago, Illinois, informs the Court that the Debtors are
currently using only 5% of the Building's total space or
approximately 6,528 rentable square feet of space for the
operation of a thrift store and the parking lot adjacent to the
thrift store.

The salient terms of the Asset Sale Agreement, as amended,
between the Debtors and U.S. Pacific are:

   * The Debtors will sell the Detroit Property for $515,000;

   * U.S. Pacific has deposited $51,500 in an escrow account.
     The Deposit will be held by the escrow agent until the
     Debtors satisfy all conditions to closing;

   * The sale will include all of the Debtors' right, title and
     interest in the Property;

   * The closing will occur within five business days of the
     Court's approval of the Asset Sale Agreement, subject to
     the payment of the Purchase Price;

   * The Agreement will be deemed null and void and the Escrow
     Deposit returned to U.S. Pacific, if the Court does not
     approve the Agreement on or before August 10, 2005;

   * U.S. Pacific will lease 6,528 rentable square feet of
     space, including the adjacent parking lot, for the Debtors'
     exclusive use;

   * The Debtors will deliver good and marketable fee simple
     title to the Land and Improvements, free and clear of liens,
     other than Permitted Exceptions; and

   * The Detroit Property is being sold "as-is, where-is," with
     no representations or warranties, reasonable wear and tear
     and casualty and condemnation excepted.

The Debtors will pay Hilco $28,325, representing 5.5% of the
Purchase Price, payable at the closing.

To maximize the value realized by the Debtors' estates from the
Detroit Property Sale, Mr. Ivester tells the Court that the
Debtors will continue to seek and solicit higher or otherwise
better bids.  Competing offers are due June 20, 2005.  The
Debtors impose a $575,000 minimum bid.

The Debtors will conduct an auction on June 24, 2005, if at least
one qualified bid is received.

The Debtors also seek the Court's authority to provide U.S.
Pacific a $10,300 termination fee, plus reasonable and documented
expense reimbursement of up to $25,000, to induce it into making
the first Qualified Bid.

The Court will consider the Detroit Property Sale at the June 28,
2005 omnibus hearing.  Objections are due June 21.

The Debtors intend to publish a weekly notice or advertisement of
sale in the Detroit Free Press for the two weeks preceding the
Bid Deadline along with a notice or advertisement of sale in The
Wall Street Journal.

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 Court to Nix D. Huffman's $2.4M Claim
----------------------------------------------------------------
Daniel B. Huffman filed a state court action in California
against Interstate Bakeries Corporation and its debtor-affiliates,
alleging age discrimination and wrongful termination.  Mr. Huffman
obtained a jury verdict against the Debtors.  The Debtors appealed
the verdict.  The Supreme Court of California reversed the ruling
and remanded the case due to trial error.

The Debtors ask the Court to disallow in its entirety Claim No.
5481 filed by Mr. Huffman for $2,404,832 because:

   (1) The Claim is without substantive merit;

   (2) The Supreme Court of California has already reversed the
       judgment on which the Claim is based;

   (3) The appeal bond on which the Claim purports to be secured
       has been released as a result of the reversal;

   (4) The Claim provides no other basis on which it seeks
       allowance in the Debtors' Chapter 11 cases; and

   (5) The Debtors did not engage in age discrimination or other
       acts in violation of statutory or common law with respect
       to their dealings with Mr. Huffman.

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)


IPIX CORP: Reports Financial Results for Second Quarter 2005
------------------------------------------------------------
IPIX Corporation (NASDAQ:IPIX) reported financial results for the
three and six months ended June 30, 2005.

Revenue increased 42% and 41%, respectively for the three and six
months ended June 30, 2005, compared to the same periods in the
prior year, primarily due to sales of 360-degree cameras from the
immersive video product line. Gross profit for both the three and
six months ended June 30, 2005 increased to 47% as compared with
42% and 41% for the three and six months ended June 30, 2004. The
increase in gross margin was due to sales of higher margin
immersive video products in 2005.

Included in operating expenses in the three and six months ended
June 30, 2005 is $1,819,388 of restructuring charges resulting
from the plan management executed in the second quarter to abandon
certain assets and a leased facility in conjunction with the sale
of the AdMission business unit. IPIX completed the sale of its
AdMission business unit on February 11, 2005, which was reported
as discontinued operations in the first quarter of 2005 and prior
years.

Increases in operating expenses were related to sales and
marketing expenditures focused on building a direct sales force
and an indirect channel sales team for the immersive video product
line as well as related increases in marketing and trade show
activity. As a result, the company made sales within the prison,
education, law enforcement and retail markets during the second
quarter, 2005.

General and administrative expenses increased as a result of
additional personnel for general and administrative and
information technology.  Also contributing to the increase in
general and administrative expenses were accounting, legal and
consultant fees related to the Sarbanes-Oxley compliance and
reporting of discontinued operations.  Research and development
expenses increased due to additions to IPIX's engineering
resources focused on the integration of the IPIX IP camera into a
variety of digital video recording (DVR) devices utilized in the
surveillance market that IPIX addresses.

"Recent terror-related events worldwide have clearly demonstrated
the need for more cameras and more sophisticated, intelligent
video surveillance solutions, particularly for at-risk public and
private institutions and critical infrastructures," said IPIX
President and CEO Clara Conti.  "As a leader in the emerging
digital video marketplace, IPIX is positioned to stay at the
technology forefront, as evidenced by our recent Defense Advanced
Research Projects Agency (DARPA) contract to develop the world's
highest resolution video camera and the investments we are making
in research and development."

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

                       Going Concern Doubt

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


JP MORGAN: Fitch Places BB+ Rating on $11.7MM Private Certs.
------------------------------------------------------------
Fitch Ratings has rated the J.P. Morgan Mortgage Acquisition Corp.
2005-FLD1, asset-backed pass-through certificates, series 2005-
FLD1, which closed on Aug. 3, 2005:

     -- $813.4 million classes A-1 through A-3 'AAA';
     -- $41.49 million class M-1 'AA+';
     -- $48.30 million class M-2 'AA';
     -- $22.88 million class M-3 'AA-';
     -- $20.75 million class M-4 'A+';
     -- $18.09 million class M-5 'A';
     -- $18.09 million class M-6 'A-';
     -- $15.43 million class M-7 'BBB+';
     -- $15.43 million class M-8 'BBB';
     -- $12.77 million class M-9 'BBB-';
     -- $11.70 million privately-offered class M-10 'BB+'.

The 'AAA' rating on the senior certificates reflects the 23.55%
total credit enhancement provided by the 3.90% class M-1, the
3.60% class M-2, the 2.15% class M-3, the 1.95% class M-4, the
1.70% class M-5, the 1.70% class M-6, the 1.45% class M-7, the
1.45% class M-8, the 1.20% M-9, the 1.10% privately offered class
M-10, and the initial and target overcollateralization (OC) of
3.35%.  All certificates have the benefit of monthly excess cash
flow to absorb losses.  In addition, the ratings reflect the
quality of the loans and the integrity of the transaction's legal
structure, as well as the capabilities of U.S. Bank National
Association as trustee, and.  JPMorgan Chase Bank, N.A. as
servicer and securities administrator.

The certificates are supported by 5,854 mortgage loans with a
total principal balance of $1.064 billion.  The mortgage loans
consist primarily of adjustable- and fixed-rate, conventional,
fully amortizing and balloon, first and second lien mortgage
loans.  The mortgage loans have an average stated balance of
$181,749.  The weighted average current mortgage rate is 7.146%.  
The weighted average remaining term to maturity is 350 months.  
The properties are primarily located in California (40.96%),
Illinois (8.08%), and Florida (6.94%).

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


KB HOME: Fitch Retains BB+ Rating on Senior Unsecured Debt
----------------------------------------------------------
Fitch Ratings affirms KB Homes follows:

    -- Senior unsecured debt 'BB+';
    -- Senior subordinated debt 'BB-';
    -- Rating Outlook Positive.

The ratings reflect KB Home's solid, consistent profit performance
in recent years and the expectation that the company's credit
profile will continue to improve as it executes its business model
and embarks on a new period of growth.  The ratings also take into
account KB Home's broadened customer mix (entry level, move-up,
active adult), its conservative building practices, and effective
utilization of return on invested capital criteria as a key
element of its operating model.

In recent years, KB Home has improved its capital structure and
increased its geographic diversity and has better positioned
itself to withstand a meaningful housing downturn.  Fitch also has
taken note of KB Home's role as an active consolidator within the
industry.  Risk factors also include the cyclical nature of the
homebuilding industry and KB Home's rising off-balance sheet
activities.  Fitch expects leverage (excluding financial services)
to remain comfortably within KB Home's stated debt to capital
target of 45%-55%.

KB Home has expanded EBITDA margins over the past several years on
steady price increases, volume improvements and reductions in SG&A
expenses.  Also, KB Home has produced record levels of home
closings, orders and backlog as the housing cycle extended its
upward momentum.  KB Home realizes a significant portion of its
revenue from California, a region that has proved volatile in past
cycles.  But KB Home has reduced this exposure as it has
implemented its growth strategy and currently sources 16% of its
deliveries from California, compared with 69% in fiscal 1995 and
88% in fiscal 1993.

Over recent years KB Home shifted toward a presale strategy,
producing a higher backlog/delivery ratio and reducing the risk of
excess inventory and debt accumulation in the event of a slowdown
in new orders.  The strategy has also served to enhance margins.
KB Home maintains a 4.7 year supply of lots (based on deliveries
projected for 2005), 48% of which are owned and the balance
controlled through options.  Inventory turnover, as of fiscal
year-end, has been consistently at or above 1.5 times (x) during
the past nine years.

Balance sheet liquidity has continued to improve as a result of
efforts to reduce long-dated inventories, quicken inventory turns
and improve returns on capital.  Progress in these areas has
allowed KB Home to accelerate deliveries without excessively
burdening the balance sheet.

As the housing cycle progresses, creditors should benefit from KB
Home's solid financial flexibility supported by $76.3 million in
cash and equivalents and $362.6 million available under its $1
billion domestic unsecured credit facility, net of $209.9 million
of outstanding letters of credit, as of May 31, 2005.  In
addition, liquid, primarily pre-sold work-in-process inventory
totaling $4 billion provides comfortable coverage for construction
debt of $2.4 billion.  KB Home's debt is well-laddered and the
revolving credit facility matures in October 2007.

Management's share repurchase strategy has been aggressive at
times, but has not impaired KB Home's financial flexibility.  KB
Home repurchased $81.9 million of stock in fiscal 1999, $169.2
million in 2000, $190.8 million in 2002, $108.3 million (two
million shares) in fiscal 2003 and $66.1 million (one million
shares) in fiscal 2004.  At the end of May 2005, one million
shares remained under the board of directors' repurchase
authorization.  Notwithstanding these repurchases, book equity has
increased $1.6897 billion since the end of 1999, while
construction debt grew $1.3678 billion.

KBH has lowered its dependence on the state of California, but it
is still the company's largest market in terms of investment.  
Operations are dispersed within multiple California markets in the
north and in the south.  During the 1990s, KB Home entered various
major Western metropolitan markets, including Phoenix, Denver,
Dallas, Austin and San Antonio, and has risen to a top-five
ranking in each market except Dallas.  In an effort to further
broaden and enhance its growth prospects it has established
operations (greenfield and by acquisition) in the southeastern
U.S., including various markets in Florida, Atlanta and the
Carolinas.  More recently, KB Home has entered the Midwest
(Chicago and Indianapolis) via acquisition.  Fitch recognizes KB
Home as a consolidator in the industry, but expects future
acquisitions will be moderate in size and largely funded through
cash flow.

KB Home ranked as fifth largest homebuilder in the U.S. in 2001,
2002, 2003 and 2004. Its average home selling price through the
first six months of fiscal 2005 is $231,800.  It is on pace to
construct about 38,000 homes in fiscal 2005.  KB Home operates
homebuilding operations within the U.S. and France (49% ownership
of Kaufman and Broad S.A.).  Kaufman and Broad S.A. also does
commercial construction in France and KB Home currently operates
KB Home Mortgage Company domestically.  (KB Home is in the process
of selling its mortgage subsidiary to Countrywide Home Loans, a
principal subsidiary of Countrywide Financial Corp.

Following the sale of the finance subsidiary, KB Home and
Countrywide will be forming a 50-50 joint venture which will make
residential loans to KB Home customers.  Year-to-date the Western
region accounts for 17.5% of corporate orders, the Southwest (AZ,
NV, NM) represents 20.7% of orders, the Central region (CO, IL,
IN, TX) accounts for 25.9% of orders, the Southeast (FL, GA, NC,
SC) contributes 19.7% of orders and France represents 16.2% of
total net new orders.


KMART CORP: Settles Meesob Investment Rejection Claim for $2.2MM
----------------------------------------------------------------
Meesob Investment Company, LLC, asserted claims against Kmart
Corporation in connection with the Debtors' rejection of the lease
for Store No. 6091 in Bakersfield, California.

In a Court-approved stipulation, the parties agree that:

    -- Meesob will have an allowed Class 5 Lease Rejection Claim
       for $2,200,000, to be satisfied in accordance with the
       Plan;

    -- upon receipt of the payment, Meesob's Claim Nos. 43297,
       4329, 45349, and 45350 will be deemed satisfied in full;
       and

    -- Meesob is forever barred from asserting, collecting, or
       seeking to collect any lease rejection or administrative
       expense amount in addition to the Allowed Amount.

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)


LBACK DEVELOPMENT: Two Disclosure Statements on the Table
---------------------------------------------------------
LBack Development, L.P., delivered a Disclosure Statement
explaining its chapter 11 Plan of Reorganization to the U.S.
Bankruptcy Court for the Eastern District of Texas, Sherman
Division, last week.  At the same time, Exotic Car Rental of
Texas, Inc., filed a Disclosure Statement explaining its competing
Plan of Reorganization with the Bankruptcy Court.

LBack Development held the lease for the land at 4201 Park
Boulevard where Linbeck/Advantage, Inc., operated a car dealership
business.  Lineback paid rent to LBack and LBack paid the mortgage
on the land to Gateway National Bank.  

                   LBack and Exotic Car

Exotic Car Rental, a business renting Ferraris, Jaguars and BMWs,
is managed by Matthew Lineback who also ran Lineback/Advantage,
Inc., and LBack Development.  When Lineback/Advantage became
financially troubled, Exotic signed a document that purported to
create a lien against its cars.  After Lineback/Advantage failed
to pay the debt, the lender, MLSBF, L.P., took Exotic's cars which
resulted in the company's bankruptcy.  

Exotic sued the lender and was successful in repossessing some of
its cars.  The company now operates under the name Willowbend Auto
Expo.

Upon its emergence from bankruptcy, Exotic and LBack will operate
under the Willowbend Auto Expo trade name.  The new entity will
engage in:

         * car repair;
         * rental of high-end cars; and
         * leasing of space to individual automobile dealers.

                      Treatment of Claims

                       LBack Development

Under LBack's Plan, Gateway National Bank, holding a first lien on
LBack's property at 4201 West Park, will be paid according to a
contract between the parties.  In the alternative, the Bank will
be paid by placing arrears at the end of the note or through a
recovery against MLSBF, L.P. -- a secured creditor of LBack.

The Small Business Administration will be given a $100,000 secured
claim.  The debt will be paid with 5% simple annual interest over
60 months.

The Collin County's $59,474 tax claim will be paid with 5% simple
annual interest over a 60-month period.

All other claims will be paid in cash within 90 days after the
Plan's effective date.

Insider claims will be paid in cash at any time after the other
claims have been paid.

                      Exotic Car's Plan

Under Exotic's Plan of Reorganization, the Internal Revenue
Service's and the U.S. Trustee's claims will be paid in full
before other claims be paid.

Claims of creditors who made advance credit to Exotic and have not
been paid by the time the chapter 11 case was filed, will be paid
in full in cash within 90 days after the confirmation of the Plan.

Headquartered in Dallas, Texas, Exotic Car Rental of Texas, Inc.,
rents exotic and luxury cars.  The Debtor filed for chapter 11
protection on April 28, 2005 (Bankr. E.D. Tex. Case No. 05-42253).  
Charles R. Chesnutt, Esq., of Dallas, Texas, represents the
Debtor.  When the company filed for protection from its creditors,
it estimated $500,000 to $1 million in assets and $1 million to
$10 million in debts.

Headquartered in Plano, Texas, LBack Development, L.P., filed for
chapter 11 protection on March 31, 2005 (Bankr. E.D. Tex. Case No.
05-41537).  Charles R. Chesnutt, Esq., of Dallas, Texas,
represents the Debtor.  When the Debtor filed for protection from
its creditors, it estimated $50,000 in assets and more than
$10 million in debts.


LEWIS REAL: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Lewis Real Estate Holdings, LLC
        424 East Central Boulevard, #123
        Orlando, Florida 92801

Bankruptcy Case No.: 05-08723

Chapter 11 Petition Date: August 4, 2005

Court: Middle District of Florida (Orlando)

Judge: Arthur B. Briskman

Debtor's Counsel: Lawrence M. Kosto, Esq.
                  Kosto & Rotella PA
                  Post Office Box 113
                  Orlando, Florida 32802
                  Tel: (407) 425-3456
                  Fax: (407) 423-9002

Total Assets: $3,540,501

Total Debts:  $4,787,154

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


MARIA BUITRON: List of 11 Largest Unsecured Creditors
-----------------------------------------------------
Maria Estela Buitron aka Estela L. Buitron delivered a list of her
11 largest unsecured creditors to the U.S. Bankruptcy Court for
the Southern District of Texas, Brownsville Division:

   Entity                        Nature of Claim    Claim Amount
   ------                        ---------------    ------------
Internal Revenue Service         941 Taxes              $200,000
300 East 8th Street
Stop 5022 AUS
Austin, TX 78701

Texas State Bank                 Money loaned            $13,916
P.O. Box 4797
McAllen, TX 78502

Discover                         Credit Card             $11,077
P.O. Box 30395                   Charges
Salt Lake City, UT 84130

Discover                         Credit Card             $10,459
P.O. Box 3008                    Charges
New Albany, OH 43054-3008

First USA                        Credit Card              $7,385
P.O. BOX 94014                   Charges
Palatine, IL 60094-4014

MBNA America                     Credit Card              $7,288
P.O. Box 15137                   Charges
Wilmington, DE 19886-5137

Target                           Credit Card              $4,146
P.O. Box 59317                   Charges
Minneapolis, MN 55459-0317

Dillards                         Credit Card              $2,287
P.O. Box 52067                   Charges
Phoenix, AZ 85072-2067

Housebhold Retail QVC2           Credit Card              $1,432
P.O. Box 129                     Charges
Thorofare, NJ 08086-0129

CBE Group                        Credit Card              $1,111
131 Tower Park, Suite 100        Charges
P.O. Box 2547
Waterloo, IA 50704-2547

American Express                 Credit Card              $1,083
P.O. BOX 297879                  Charges
Fort Lauderdale, FL 33329-7879

Residing in Harlingen, Texas, Maria Estela Buitron aka Estela L.
Buitron filed for chapter 11 protection on June 6, 2005 (Bankr.
S.D. Tex. Case No. 05-10704).  Abelardo Limon, Jr. Esq., at Limon
Law Office PC in Brownsville, Texas represents the Debtor.  When
the Debtor filed for protection from its creditors, she listed
$2,094,425 in assets and $1,468,843 in debts.


MCI INC: Adopts Performance-Based Incentive Awards Payment
----------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission dated July 14, 2005, MCI Inc.'s Executive Vice
President and Chief Financial Officer Robert T. Blakely reports
that the Compensation Committee of the Board of Directors adopted
a performance criteria for the payment of incentive awards under
the Company's Corporate Variable Pay Plan in the second half of
2005.

"The incentive awards for the Company's named executive officers
and other members of the executive leadership team will be based
on their performance against a 'balanced scorecard' of financial,
customer service, organizational improvement, and Key Result Areas
linked directly to the business strategy," Mr. Blakely says.

Incentive awards for each functional group will be based on the
Company's overall EBITDA and incentive awards for other executives
will be based half on company EBITDA and half on the executive's
business unit.

Mr. Blakely further states that MCI intends to provide additional
information regarding the compensation awarded to MCI's named
executive officers for the year ended December 31, 2005, in the
proxy statement for the MCI's 2006 annual meeting of stockholders.

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)

*     *     *

As reported in the Troubled Company Reporter on March 1, 2005,
Standard & Poor's Ratings Services placed its ratings on Denver,
Co.-based diversified telecommunications carrier Qwest
Communications International, Inc., and subsidiaries, including
the 'BB-' corporate credit rating, on CreditWatch with negative
implications.  This follows the company's counter bid to Verizon
Communications, Inc., for long-distance carrier MCI, Inc., for
$3 billion in cash and $5 billion in stock.  MCI also has about
$6 billion of debt outstanding.

The ratings on MCI, including the 'B+' corporate credit rating,
remain on CreditWatch with positive implications, where they were
placed Feb. 14, 2005 following Verizon's announced agreement to
acquire the company.  The positive CreditWatch listing for the MCI
ratings reflects the company's potential acquisition by either
Verizon or Qwest, both of which are more creditworthy entities.
However, the positive CreditWatch listing of the 'B+' rating on
MCI's senior unsecured debt assumes no change to the current MCI
corporate and capital structure under an assumed acquisition by
Qwest, such that this debt would become structurally junior to
other material obligations.

"The negative CreditWatch listing of the Qwest ratings reflects
the higher business risk at MCI if its bid is ultimately
successful," explained Standard & Poor's credit analyst Catherine
Cosentino.  As a long-distance carrier, MCI is facing ongoing
stiff competition from other carriers, especially AT&T Corp.
Moreover, MCI is considered to be competitively disadvantaged
relative to AT&T in terms of its materially smaller presence in
the enterprise segment and fewer local points of presence -- POPs.
The latter, in particular, results in higher access costs relative
to AT&T.  Qwest also faces the challenge of integrating and
strengthening MCI's operations while improving its own
underperforming, net free cash flow negative long-distance
business.  These issues overshadow the positive aspects of Qwest's
incumbent local exchange carrier business that were encompassed in
the former developing outlook.

As reported in the Troubled Company Reporter on Feb. 22, 2005,
Moody's Investors Service has placed the long-term ratings of MCI,
Inc., on review for possible upgrade based on Verizon's plan to
acquire MCI for about $8.9 billion in cash, stock and assumed
debt.

These MCI ratings were placed on review for possible upgrade:

   * B2 Senior Implied
   * B2 Senior Unsecured Rating
   * B3 Issuer rating

Moody's also affirmed MCI's speculative grade liquidity rating at
SGL-1, as near term, MCI's liquidity profile is unchanged.

As reported in the Troubled Company Reporter on Feb. 22, 2005,
Standard & Poor's Ratings Services placed its ratings of Ashburn,
Virginia-based MCI Corp., including the 'B+' corporate credit
rating, on CreditWatch with positive implications. The action
affects approximately $6 billion of MCI debt.

As reported in the Troubled Company Reporter on Feb. 16, 2005,
Fitch Ratings has placed the 'A+' rating on Verizon Global
Funding's outstanding long-term debt securities on Rating Watch
Negative, and the 'B' senior unsecured debt rating of MCI, Inc.,
on Rating Watch Positive following the announcement that Verizon
Communications will acquire MCI for approximately $4.8 billion in
common stock and $488 million in cash.


MERIDIAN AUTOMOTIVE: Court Approves Pact With Four Utility Cos.
---------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
June 29, 2005, Meridian Automotive Systems, Inc., and its debtor-
affiliates entered into stipulations with various utility
companies to resolve the Utilities' demands for adequate assurance
of payment of postpetition charges with respect to utility
services provided to the Debtors.

The Debtors agree to remit to American Electric Power, DTE Energy
Company, New York Electric and Gas Corporation, and Rochester Gas
& Electric security deposits as adequate assurance of payment of
postpetition charges:

           Utility                      Security Deposit
           -------                      ----------------
           American Electric                $116,620
           DTE Energy                         54,677
           New York Electric and Gas          63,000
           Rochester Gas & Electric            6,207

The Utility Companies will retain the Security Deposit in
accordance with applicable tariffs.  The Deposits cannot be
applied to prepetition debts.

The Utility Companies agree to return the Security Deposits to the
Debtors or any amounts remaining following application to any
postpetition arrearages or amounts due:

    -- on a closed account after all postpetition bills for the
       account are paid in full; or

    -- within 30 days of the Effective Date of a plan of
       reorganization if all of the Debtors' postpetition bills
       are paid in full.

The Debtors will continue paying the Utility Companies for
postpetition services in the ordinary course and in accordance
with prepetition billing cycles.  Charges for utility services
furnished postpetition will constitute administrative expenses of
the estate.

Upon occurrence of a default, a Utility Company may:

    1.  disconnect utility service to the Debtors;

    2.  apply the Security Deposits against any unpaid
        postpetition utility service charges; and

    3.  pursue any other remedy permitted by the Tariffs.

                         Court's Ruling

Judge Walrath approves the stipulation between the Debtors and
American Electric Power, DTE Energy Company, New York Electric
and Gas Corporation, and Rochester Gas & Electric.

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: Court Okays Stipulation With General Motors
----------------------------------------------------------------
The Honorable Judge Walrath of the U.S. Bankruptcy Court for the
District of Delaware put his stamp of approval on Meridian
Automotive Systems, Inc., and its debtor-affiliates' stipulation
with General Motors.

As previously reported in the Troubled Company Reporter on
July 6, 2005, General Motors owed the Debtors $3,091,454 and
CN$469,244, in connection with the Debtors' prepetition deliveries
of automotive parts.

The principal terms of the Stipulation are:

   (1) General Motors will pay its Prepetition Obligations to the
       Debtors within five business days of the date of entry of
       a final, non-appealable Court order approving the
       Stipulation;

   (2) Effective immediately and extending through and including
       September 30, 2005, all of General Motors' postpetition
       obligations to the Debtors will be:

       -- paid in accordance with net 18-day payment terms; and

       -- subject to a 1% discount; and

   (3) As adequate protection for any set-off rights General
       Motors may have with respect to its Prepetition
       Obligations, and in consideration for the payment to be
       made by General Motors with respect thereto, General
       Motors will be entitled to exercise its prepetition
       set-off rights, if any, against its postpetition payables
       to the Debtors.  This exercise will, for all purposes, be
       treated as if General Motors had not made any payments to
       the Debtors with respect to General Motors' Prepetition
       Obligations.

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).


METRIS MASTER: Fitch Places Sub Classes on Rating Watch Positive
----------------------------------------------------------------
Fitch Ratings has placed several subordinate classes of asset-
backed securities/notes in the Metris Master Trust on Rating Watch
Positive.

This action follows the announcement on Aug. 4, 2005, that HSBC
Finance Corporation will acquire Metris Companies Inc. in an all-
cash transaction.  Upon that announcement, Fitch placed Metris'
'B-' senior debt on Rating Watch Positive and affirmed HSBC's
'AA-' rated unsecured debt.  For additional information on the
corporate ratings please refer to the Fitch release titled 'Fitch
Ratings Affirms HSBC Finance; Places Metris On Rating Watch
Positive' dated Aug. 4, 2005.

Given the improved financial condition upon completion of the
acquisition, Fitch expects Metris' ability to continue funding new
purchases going forward will be significantly enhanced.  As a
result, Fitch's purchase rate assumption will be modified when
evaluating credit enhancement.  Under the revised assumption,
Fitch expects existing available credit enhancement to more than
adequately cover shortfalls during an early amortization scenario.  
The results could enable rating upgrades on the subordinate
classes of one notch or more.  Fitch anticipates resolving the
Rating Watch status upon completion of the acquisition.

Fitch believes that HSBC's acquisition of Metris complements
HSBC'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.

RATING ACTIONS

   The following ratings are placed on Rating Watch Positive:

    Metris Master Trust, floating-rate asset-backed securities,
    series 2005-1

      -- $63.30 million class M floating-rate asset-backed
         securities, series 2005-1 at 'AA';

      -- $75.90 million class B floating-rate asset-backed
         securities, series 2005-1 at 'A';

      -- $82.30 million floating-rate secured notes, class C at
         'BBB';

      -- $44.35 million floating-rate secured notes, class D at
         'BB+'.

    Metris Master Trust, floating-rate asset-backed securities,
    series 2004-2

      -- $75.40 million class M floating-rate asset-backed
         securities, series 2004-2 at 'AA';

      -- $83.00 million class B floating-rate asset-backed
         securities, series 2004-2 at 'A';

      -- $105.80 million floating-rate secured notes, class C at
         'BBB'.

    Metris Master Trust, floating-rate asset-backed securities,
    series 2001-2

      -- $559.39 million class A floating-rate asset-backed
         securities, series 2001-2 at 'A-';

      -- $99.45 million class B floating-rate asset-backed
         securities, series 2001-2 at 'BBB'.

    Metris Master Trust, floating-rate asset-backed securities,
    series 2000-3

      -- $372.93 million class A floating-rate asset-backed
         securities, series 2000-3 at 'A-';

      -- $66.30 million class B floating-rate asset-backed
         securities, series 2000-3 at 'BBB'.


MOUNT VERNON: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Mount Vernon Asphalt & Paving, Inc.
        fka Mt. Vernon Asphalt & Paving, Inc.
        15441 Farm Creek Drive
        Woodbridge, Virginia 22191

Bankruptcy Case No.: 05-12951

Type of Business: The Debtor is a paving contractor.

Chapter 11 Petition Date: August 5, 2005

Court: Eastern District of Virginia (Alexandria)

Judge: Stephen S. Mitchell

Debtor's Counsel: Thomas P. Gorman, Esq.
                  Tyler, Bartl, Gorman & Ramsdell, PLC
                  700 South Washington Street, Suite 216
                  Alexandria, Virginia 22314
                  Tel: (703) 549-5010
                  Fax: (703) 549-5011

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Internal Revenue Service                                $457,058
P.O. Box 10025
Richmond, VA 23240

APAC                                                    $433,591
P.O. Box 4140
Manassas, VA 20110

Internal Revenue Service                                $404,082
P.O. Box 10025
Richmond, VA 23240

Cook Properties, LLC                                    $250,000
16719 Tintagel Court
Dumfries, VA 22026

Jeffery & Barbara Cook                                  $220,240
16719 Tinagel Court
Dumfries, VA 22026

Jeffery S. Cook               Wages                     $218,775
16719 Tinagel Court
Dumfries, VA 22026

Mike Fitzwater                                          $175,000

National Asphalt Manufacture                            $168,758

American Express                                        $165,433

Reliable Contracting Company                            $143,091

Superior Paving Corp.                                   $135,161

Fort Myer Construction Corp.                            $100,000

Prince William County         Property Tax               $99,274

VA Department of Taxation                                $90,500

Barbara Cook                  Wages                      $73,400

Quarles Petroleum, Inc.                                  $66,744

Luck Stone Corporation                                   $61,164

Richmond Machinery & Equip. Co.                          $59,953

Virginia Unemployment                                    $54,881

Virginia Paving Corp.                                    $54,699


NATIONAL ENERGY: Post-Confirmation Report Ended April 2005
----------------------------------------------------------
Brian Cejka, assistant restructuring officer of National Energy &
Gas Transmission, Inc., discloses that the NEG Debtors completed
the sale of various assets subsequent to their emergence from
bankruptcy:

A. Gas Transmission Northwest Corporation

    In November 2004, NEG completed the sale of the equity of
    GTNC, a non-debtor subsidiary, to TransCanada Corporation for
    $1.7 billion, including $500 million of assumed debt.  The
    sale consisted of the ownership interests of GTNC, including
    North Baja Pipeline, LLC.  At the time of the sale, NEG
    received about $1.1 billion of cash due to these sale
    adjustments:

    * Purchase price ($1.2 billion), less

    * Required holdbacks ($241 million), plus

    * Cash dividends received from the subsidiary prior to the
      sale that would have otherwise been a favorable purchase
      price adjustment ($138 million), less

    * Final working capital adjustments ($2 million).

B. IPPs

    In January 2005, NEG completed the sale of its indirect equity
    interests in 12 power plants and a natural gas pipeline to GS
    Power Holding II LLC, which is a wholly owned subsidiary of
    the Goldman Sachs Group.  The sale resulted in gross sale
    proceeds of about $656 million.  On the closing date, NEG
    received net sale proceeds of about $513 million based on
    these adjustments:

    * Purchase price ($656 million), less

    * Adjustment for the separate sale of a Hermiston facility
      ($40 million), less

    * Dividends received by NEG from the IPP entities prior to the
      closing date as required by the sale agreement
      ($73 million), less

    * Contractually required escrow ($18 million), less

    * Other contractual adjustments for working capital and change
      of control provisions ($12 million).

C. Hermiston Sale

    NEG sold its equity interest in the Hermiston facility to a
    wholly owned subsidiary of Sumitomo Corporation for about
    $47 million in November 2004.  As a result of the sale,
    Hermiston's equity interest was removed from the IPP portfolio
    sold to GS Power Holdings and the total sale price was
    adjusted by $40 million.

D. Marengo and Conaway Ranches

    The company completed the sale of its 360-acre and 17,500-acre
    ranches in the last quarter of 2004.  The Marengo Ranch sale
    closed on November 18, 2004, and resulted in net proceeds of
    $8 million -- including the impact of a $2 million
    indemnification holdback.  The Conaway Ranch sale closed on
    December 15, 2004, and resulted in about $47 million of net
    proceeds -- including the impact of a $2 million
    indemnification holdback.  In addition, these entities
    transferred an incremental $10 million of cash on hand to NEG
    in conjunction with the asset sales.  The company believes
    that the $4 million of holdbacks will be released to NEG
    during the third quarter of 2005.

E. Spruce Power Corporation

    In March 2005, NEG sold its common stock of Spruce Power
    Corporation to American Consumer Industries, Inc., for about
    $15.5 million.  Spruce Power Corporation is the General
    Partner of Spruce Limited Partnership, which owns a 25%
    interest in Colstrip Energy Limited Partnership, a 37-MW waste
    coal fired facility located in Colstrip, Montana.

Aside from the completion of asset sales, the NEG Debtors'
management has focused on these initiatives:

    * Distributions to Class 3 claimholders -- During the period
      from November 2004 to April 2005, NEG has distributed over
      $1.5 billion for the benefit of its Class 3 claimholders in
      the form of note redemptions and Class 3 cash distributions.

    * Resolution of outstanding claims -- As of the Effective
      Date, $4.8 billion of claims were filed against NEG,
      including $1.4 billion of claims that were either disputed
      or valid in nature yet contingent in amount.  As of
      April 2005, NEG was able to reduce the claims to $4.6
      billion, including $1.1 billion in the Disputed Claims
      Reserve.  In June 2005, NEG reduced its Disputed Claim
      Reserve by about $385 million in claims due to the
      expungement of the claims of the Official Committee of
      Unsecured Creditors of USGen New England, Inc., and the
      Bear Swamp certificate holders.  As a result, the total
      claims filed against NEG have been reduced to about $4.2
      billion, including $0.7 billion in the Disputed Claims
      Reserve.

    * Wind-down of operations and dissolution of remaining legal
      entities -- NEG's legal structure consisted of about 200
      legal entities as of the Effective Date.  Through asset
      sales and dissolution efforts, the company eliminated about
      120 of these entities prior to April 30, 2005.  Moreover,
      NEG has reduced the number of corporate support personnel
      from 175 as of the Effective Date to 65 as of April 30,
      2005.  NEG further reduced the number of corporate support
      personnel to 37 as of June 2005.  The company will continue
      to wind-down and dissolve the remaining legal entities as
      efficiently and cost effectively as possible.

From October 29, 2004, through April 30, 2005, NEG made
$1,662,373,233 in disbursements pursuant to the Plan:

    Priority payments of expense administration
       Accountant's fees and expenses                 $2,202,789
       Debtor attorneys fees and expenses              8,011,731
       Committee attorneys fees and expenses           6,124,905
       Other operational fees                         28,024,268
       U.S. Trustee fees                                  30,000
       Taxes, fines, penalties, etc.                  25,696,893
                                                  --------------
       Total priority payments                        70,090,586

    Payments to creditors - unsecured              1,548,555,556
    Operating expenses                                43,727,091
                                                  --------------
    TOTAL DISBURSEMENTS                           $1,662,373,233
                                                  ==============

The most recent Class 3 creditor distribution occurred on or
about June 30, 2005.  As of August 2, 2005, NEGT has made
cumulative distributions of $1.55 billion, including $8 million
of interest accumulated on the notes, to the Class 3 claim
holders.  About 83% of these funds have been paid to allowed
Class 3 claimholders and the remainder is being held by a trustee
pending the resolution of disputed claims.  Based on the
distributions to date, allowed Class 3 claimholders have received
$0.37 for every dollar of claim.  The Plan projected a total
recovery of $0.50 for every dollar of allowed claim.

Future distributions will be considered by the NEG Board of
Directors from these sources:

    a. Distributions received from USGen;

    b. Payment from Energy Trading subsidiaries for allowed NEG
       claims;

    c. Release of sale holdbacks and other escrows;

    d. Dividends of cash balances held by other NEG subsidiaries;

    e. Potential reimbursement of NEG payments for Energy Trading
       subsidiary toll guarantees; and

    f. Reduction in contingency reserves.

Headquartered in Bethesda, Maryland, PG&E National Energy Group,
Inc. -- http://www.pge.com/-- (n/k/a National Energy & Gas     
Transmission, Inc.) develops, builds, owns and operates electric
generating and natural gas pipeline facilities and provides energy
trading, marketing and risk-management services.  The Company and
its debtor-affiliates filed for Chapter 11 protection on July 8,
2003 (Bankr. D. Md. Case No. 03-30459).  Matthew A. Feldman, Esq.,
Shelley C. Chapman, Esq., and Carollynn H.G. Callari, Esq., at
Willkie Farr & Gallagher, and Paul M. Nussbaum, Esq., and Martin
T. Fletcher, Esq., at Whiteford, Taylor & Preston, L.L.P.,
represent the Debtors in their restructuring efforts.  When the
Company filed for protection from its creditors, it listed
$7,613,000,000 in assets and $9,062,000,000 in debts.  NEGT
received bankruptcy court approval of its reorganization plan in
May 2004, and that plan took effect on Oct. 29, 2004.

The Hon. Paul Mannes confirmed NEGT Energy Trading Holdings
Corporation, NEGT Energy Trading - Gas Corporation, NEGT ET
Investments Corporation, NEGT Energy Trading - Power, L.P., Energy
Services Ventures, Inc., and Quantum Ventures' First Amended Plan
of Liquidation on Apr. 19, 2005.  The Plan took effect on May 2,
2005.  (PG&E National Bankruptcy News, Issue No. 46; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


NRG ENERGY: High Court Upholds Refund Case Dismissal
----------------------------------------------------
The U.S. Supreme Court refused to hear an appeal by the Public
Utility District No. 1 of Snohomish County, in Washington, from
the Ninth Circuit order dismissing its refund case against
various energy trading and electric generating companies,
including NRG Energy, Inc.

The High Court denied, without giving comment, Snohomish County's
petition for writ of certiorari.

Snohomish County sued NRG, West Coast Power, LLC, WCP's four
operating subsidiaries, Dynegy, Inc., and numerous other
unrelated parties, alleging that the defendants manipulated the
market during the California Energy Crisis of 2000 and 2001 and
restricted electricity supplies to cause artificially high prices
in the market from which Snohomish purchased power.  Snohomish
sought treble damages and injunctive relief.

Certain of the lawsuits, which seek unspecified treble damages
and injunctive relief, were consolidated and made a part of a
Multi-District Litigation proceeding before the U.S. District
Court for the Middle District of California.

In January 2003, the District Court dismissed the Complaint.  The
District Court held that Snohomish's claims were preempted by
federal law, which authorizes the Federal Energy Regulatory
Commission to set wholesale electricity rates.

In September 2004, the U.S. Court of Appeals for the Ninth
Circuit affirmed the District Court's dismissal.  The County
filed a petition for writ of certiorari in November.

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

                         *     *     *   

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


OIL STATE: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Oil State Distributors I, Inc.
        126 Passaic Street
        Newark, New Jersey 07104

Bankruptcy Case No.: 05-35438

Type of Business: The Debtor is an oil and lubricant dealer.

Chapter 11 Petition Date: August 8, 2005

Court: District of New Jersey (Newark)

Debtor's Counsel: Douglas A. Kent, Esq.
                  Becker Meisel LLC
                  354 Eisenhower Parkway, Suite 2800
                  Livingston, New Jersey 07039
                  Tel: (973) 422-1100
                  Fax: (973) 422-9122

Estimated Assets: $500,000 to $1 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                                 Claim Amount
   ------                                 ------------
W.A.S. Terminals                            $1,200,753
126 Passaic Street
Newark, NJ 07104

Korrect Automotive                            $195,000
96 North 10th Street
Brooklyn, NY 11211

Angela Sirianni                               $190,000
8804 3rd Avenue
North Bergen, NJ 07047

Natalie Dondyshe                               $68,000
833 Central Avenue, Apartment 4B
Far Rockaway, NY 11691

Internal Revenue Service                       $45,000
District Director
Special Procedures
Bankruptcy Section
955 South Springfield Avenue
Building A, 3rd Floor
Springfield, NJ 07081-0744

Waste Reduction System                         $30,000

GE Energy Rental                               $27,994

Spitzer & Boyes LLC                            $18,478

Pro Waste                                      $18,000

Estate of Catherine Vigorito                   $14,385

Hytest Packaging                               $11,000

Unifide Industries                             $10,750

Van Zuverden, Inc.                             $10,370

The Distillation Group, Inc.                   $10,000

Consolidated Container                          $6,000

Chevron                                         $5,000

State of New Jersey                             $5,000

Glycol Specialist Inc.                          $4,240

Shapiro Croland                                 $4,000

General Carbon Corporation                      $2,663


PACIFIC ENERGY: Moody's Affirms $250 Million Notes' Ba2 Rating
--------------------------------------------------------------
Moody's affirmed a Ba2 rating for Pacific Energy Partners, L.P.'s
(PPX) existing $250 million of senior unsecured notes.  Privately-
held LBP Pacific, LP (LBP) is PPX's general partner.  LBP owns
Pacific Energy GP, LLC (PEGP) which, in turn, holds the 2% general
partner interest in PPX.  LBP also owns 34.6% of PPX's
subordinated equity units.

Most importantly, the rating affirmation is subject to PPX raising
common equity units sufficient to contemporaneously fund at least
60% of its pending $455 million fully priced but strategic and
diversifying acquisition of three regional business units
(midstream refined product terminal, storage, and pipeline assets
and crude oil storage assets) from Valero, L.P.  The acquisition
results from Valero, L.P.'s need to divest certain assets as a
condition to gaining Federal Trade Commission approval for its
acquisition of the Kaneb group.  Following the pending
acquisition, approximately 94% of PPX's pro-forma cash flow would
be fee-based, driven by volume and tariffs on its pipeline
transportation, storage, and terminaling assets.

While the rating outlook is stable, the outlook and ratings would
be vulnerable if PPX does not issue sufficient equity funding PPX
also expects to fund the acquisition on a permanent basis through
a future $150 million senior unsecured note offering, a portion by
bank debt, and through about $290 million of common equity units.

Importantly, Moody's has also recalibrated PPX's Corporate Family
Rating (formerly named the senior implied rating) as: Previously,
Moody's had rated LB Pacific (PPX's controlling general partner)
and PPX as two separate corporate families, each with its own
Corporate Family Rating.  Going forward, Moody's will view both
entities as part of one corporate family.

As a result, Moody's withdrew the Ba1 CFR currently assigned to
PPX.  Moody's views the group to have a Ba2 Corporate Family
Rating and assign that rating to LBP, the highest entity within
the corporate family that holds rated debt ($175 million of B1
rated senior secured bank debt).  This recalibration results in
the upgrade of LBP's CFR which was previously rated B1.

PPX is a master limited partnership engaged in the midstream
gathering, blending, transportation, marketing, terminaling, and
storage of crude oil produced in central and southern California,
the Rocky Mountains, and Canada, and imported through the Los
Angeles and Long Beach Harbors, and destined for refineries in
Southern California, Salt Lake City, and the greater Rocky
Mountain region.

LBP is 70% owned by private equity funds managed by Lehman
Brothers Merchant Banking Fund and 30% by First Reserve, a private
equity fund focused on energy sector investing.  PPX's key
subsidiaries are Pacific Energy Group, Pacific Pipeline Systems
and Pacific Terminals which own and operate crude oil pipelines
and storage terminals in the California, Rocky Mountain Pipeline
System which owns and operates crude oil pipelines in the Rocky
Mountains, and smaller PEG Canada, L.P., operating in western
Canada.

The acquisition from Valero, LP would add two major refining
regions to PPX's service area, doubling its number of refining
centers served and providing important diversification of regional
and specific refinery risk.  The acquisition would also diversify
PPX into the refined product midstream business, with two of the
three asset packages located in distinctly growing markets, and,
for the first time, would place PPX in the East Coast market for
domestic refined products and the greater Atlantic Basin market
for imported refined products and imported crude oil.  In contrast
to declining U.S. volumes of crude oil production, refined product
volumes grow with North American economic and demographic growth,
driving rising imported crude oil volumes.

The acquisition would add 9.1 million barrels of storage capacity
to PPX's system.  The acquisition adds to PPS's effort to
participate in rising flows of imported waterborne petroleum and
petroleum products.  Through adequately equity-funded
acquisitions, PPX now operates at increasingly greater scale and
diversification, particularly reducing the proportional impact of
secular decline in California oil production and California
pipeline throughput.

PPX's ratings are restrained by:

   * the constant distribution of free cash flow to MLP unit
     holder after interest expense and maintenance capital
     spending and yielding negligible organic credit accretion
     potential;

   * intense competition for imported Canadian, California
     domestic, and imported crude oil volume;

   * declining California crude oil pipeline throughput volume due
     to falling indigenous crude oil production;

   * relatively aggressive PPX growth strategies and acquisition
     risk in an increasingly expensive competitive midstream
     acquisition market;

   * full PPX leverage relative to its ratings and scale;

   * the uncertain impact of the change in PEGP ownership from
     Anschutz Corporation to Lehman Brothers Merchant Banking, and
     First Reserve; and

   * a desire to observe how the LBP/PPX management mix and
     strategies continue to evolve.

PPX's and LBP's ratings are supported by:

   * PPX's regionally diversified operations and strategic
     exposure to secularly rising imported crude oil volumes at
     Pacific Terminals, the Canadian and Rocky Mountain pipelines,
     and now the East Coast; and

   * strategically located crude oil pipelines in California,
     together feeding crude oil to major established refining
     centers facing rising product demand.

Moody's expects rising throughput for Pacific Terminals and,
eventually, the Rocky Mountain and Canadian pipelines.
Furthermore, PPX to date has been able to mitigate the cash flow
impact of falling California pipeline volume with increased
pipeline tariffs.  PPX's regional diversification also mitigates
its exposure to the risk of reduced pipeline volumes due to
individual refinery downtimes.

The ratings are also supported by:

   * the fact that PPX has only a small exposure to crude oil
     gathering, marketing, and trading;

   * the durable demand for PPS's California pipeline throughput;

   * the relatively predictable rate of PPS throughput decline;

   * PPS's ability to partially offset the cash flow impact of
     falling pipeline throughput by raising tariffs;

   * the strong credit ratings of its shippers; and

   * the relatively durable (though regionally far more
     competitive) throughput of PPX's Rocky Mountain and Canadian
     systems.

The ratings are also restrained by:

   * an inability so far (prior to PPX's late 2005 completion of a
     key pumping station) to materially grow its volumes of
     imported Canadian syncrude;

   * ongoing acquisition and re-leveraging risk;

   * still modest size relative to the scale of potential
     acquisitions;

   * the challenge and uncertainties associated with PPX's effort
     to win growing Canadian synthetic crude oil; and

   * expected large funding needs beginning in the 2006 time frame
     if PPX proceeds with its potentially important Port of Los
     Angeles Pier 400 deepwater port terminal project.

While PPX expects to fund roughly 65% of the Valero acquisition
with equity, combined LBP/PPX leverage on PPX EBITDA will remain
full.  PPX's pro-forma EBITDA leverage would be in the range of
4.2x.  Combined LBP/PPX EBITDA leverage will start at roughly
5.8x, or 8.2x after deducting PPX maintenance capital spending and
interest from PPX EBITDA, and in the range of 10x after deducting
PPX interest, maintenance capital spending, and LBP interest
expense.

At the current PPX cash distribution of $0.5125/unit per quarter
to common and subordinated units, and the expected payout on the
GP interest, LBP would generate in the range of $21.5 million in
EBITDA.  After expected interest expense in the range of $11
million to $12 million, initial interest coverage approximates
1.8x to 2x.

Offshore California oil production declines some 7% to 8% per year
while onshore production from the San Joaquin Valley declines
roughly 3% per year, restraining PPX cash flow.  To organically
sustain or grow cash flow, PPX must offset the impact of the
resulting throughput declines in its California gathering and
pipeline systems.  However, four mitigants to the impact of that
decline include:

   * pricing power to raise tariffs on remaining California
     throughput;

   * added diversification from the Valero assets;

   * rising import throughput and utilization of the Pacific
     Terminal segment; and

   * PPX's rising Rocky Mountain system throughput.

PPX faces highly competitive conditions in the pursuit of
declining Rocky Mountain conventional crude oil production
volumes, and in pursuit of rising Canadian synthetic crude oil
production, to serve the Rocky Mountain refining market.  While
Moody's anticipates progressively rising Canadian southbound
synthetic crude oil throughput over the intermediate term, the
eventual size of that market will evolve from a number of forces
beyond PPX's control.

Ultimate growth in that volume will evolve from a complex
interplay including:

   1) the pace of oil sands development;

   2) producer efforts to create more widely attractive varieties
      of synthetic crude oil blends;

   3) the degree of investment by Rocky Mountain refineries to run
      higher proportions of synthetic crude oil;

   4) similarly, growth in Midwest refiners' demand for synthetic
      crude oil, taking volumes down competing pipelines; and

   5) the degree to which up to three new potential Canadian
      pipelines could open up other markets that would compete for
      synthetic crude oil.

With a stable outlook, Moody's took these actions:

   1) Assigned a Ba2 Corporate Family Rating to the LBP/PPX group,
      assigned at the LBP level.

   2) Withdrew PPX's Ba1 Corporate Family Rating upon the
      placement of the PPX/LBP group Corporate Family Rating at
      the LBP level.

   3) Affirmed PPX's existing Ba2 senior unsecured note rating.

   4) Affirmed LBP's B1 senior secured Term Loan B rating.

The LBP loan is notched two levels below the Corporate Family
Rating due to their structural subordination to all PPX debt,
PPX's heavy cash distributions to unit holders, and the fact that
LBP's Term Loan B is secured by subordinated equity units rather
than common equity units.  Moody's notes that 2.6 million of the
subordinated units will convert to common units after the August
12, 2005 units distribution payment.

While Moody's expects PPX to be acquisitive, the PPX notes are not
notched below the Ba2 Corporate Family Rating due to PPX's pattern
of adequately funding acquisitions with equity, which restrains
the amount of senior secured debt at levels insufficient to
warrant notching for effective subordination purposes.

While the PPX notes are guaranteed on a senior unsecured basis by
PPX's direct domestic subsidiaries (including PEG and PEGC)
holding the equity of indirect operating subsidiaries, they are
not guaranteed by the indirect Canadian subsidiaries.  

Furthermore, regulatory restrictions limit the ability of certain
of PPX's indirect domestic subsidiaries, which hold its key West
Coast regulated pipeline and storage assets, to guarantee the
parent notes.

PPX's actual 2004 and first half 2005 EBITDA were $83.9.4 million
and $44.1 million or $50.3 million as adjusted, respectively.  
Pro-forma for the Valero acquisitions, Moody's places pro-forma
2005 EBITDA in the $115 to $125 million range.

Pro-forma 2005 EBITDA/Interest and EBIT/Interest coverage appears
to be in the range of 4.0x to 4.5x and 3.0x to 3.2x, respectively.
Pro-forma June 30, 2005 Debt/Capital is in the range of 45%, pro-
forma Debt/Pro-forma EBITDA is in the range of 3.5x to 4.25x, and
Debt/Pro-forma Gross Cash flow is in the 4.5x to 5.0x range.

Pacific Energy Partners, L.P. and Pacific Energy Group LLC are
headquartered in Long Beach, California.  LB Pacific is
headquartered in New York, New York.


PACIFIC ENERGY: S&P Affirms Double-B Corporate Credit Rating
------------------------------------------------------------
Standard & Poor's Ratings Services affirmed the 'BB' corporate
credit ratings on Pacific Energy Partners L.P. and LB Pacific L.P.
in response to the upcoming $455 million acquisition of terminals
and pipeline assets from Valero L.P.  The outlook is stable.
     
Long Beach, California-based PEP has $359 million of debt.
      
"The affirmation is based on Standard & Poor's expectation that
the risks attendant with the new assets will be supported with a
strengthened financial position as the acquisition is funded,"
said Standard & Poor's credit analyst Todd A. Shipman.  "The
purchase is large relative to PEP's existing asset base, but the
assets are confined to products with which management has direct
or related experience, and that will help alleviate some of that
risk," he continued.  The terminals and pipeline also generate
most of their revenues from stable fees through contracts with no
direct commodity price vulnerability.
     
PEP is purchasing two terminals in the San Francisco Bay area,
three terminals in the Philadelphia area (a new region for PEP),
and a refined products pipeline in the Rockies from Valero, which
was required to dispose of the assets in connection with its
acquisition of another company.  The assets provide PEP with 9
million barrels of new storage capacity and 550 miles of new
pipeline.
     
The stable outlook on PEP is premised on expectations that
acquisition activities and internal growth projects will be
financed in a manner designed to maintain credit metrics and the
overall business risk profile.  Continued, aggressive pursuit of
such growth is factored into the ratings, but a significant
acquisition outside its traditional business lines or failure to
support the balance sheet as growth-related spending is undertaken
could result in lower ratings.  Improvement in credit quality is
constrained by the strategic focus on growth.
     
The nature of a master limited partnership's (MLP) growth curve
and the temporary strains the growth places on its balance sheet
(acquisitions are often financed with short-term debt that is
later replaced with a permanent mix of debt and equity) suggest
that short-term ratings of MLPs could fluctuate.  PEP is no
exception, and the recent equity sale leaves the partnership in a
relatively good liquidity position.  Considerable flexibility on
capital expenditures, with a small amount of required maintenance
expenditures, compared with total planned spending, adds strength
to PEP's short-term credit profile.


PACIFIC GAS: Asks Court to Direct Deutsche Bank to Release $743K
----------------------------------------------------------------
Pursuant to its Plan of Reorganization, Pacific Gas & Electric
Company is required to establish one or more escrow accounts to
set aside funds to make distributions on Disputed Claims to the
extent the Claims become Allowed Claims.

Gary M. Kaplan, Esq., at Howard Rice Nemerovski Canady Falk &
Rabkin, in San Francisco, California, relates that on March 5,
2004, the Court directed Pacific Gas to set aside $743,006 in a
separate escrow account for Nuevo Energy Company's Class 5 claim.

The Nuevo Class 5 Claim was based on alleged damages incurred
because of purported lost gas production resulting from Pacific
Gas' discontinuance of certain service.

Pacific Gas objected to Nuevo's Gas Claim.  Nuevo Energy later
withdrew the Gas Claim to resolve Pacific Gas' Objection.

Mr. Kaplan tells the Court that under an Escrow and Disbursement
Agreement between Pacific Gas and Deutsche Bank Trust Company
Americas, as escrow and disbursing agent, Deutsche Bank is
required to make payments from the Class 5 Escrow Fund to a Class
5 claimant whose claim becomes an Allowed Claim.  Deutsche Bank
is also required to release funds to Pacific Gas for any
difference between the escrowed amount with respect to the claim
and the allowed amount of the claim.  To the extent any Disputed
Class 5 Claim is resolved pursuant to a settlement or is
disallowed by the Court, Pacific Gas may direct Deutsche Bank to
release the escrowed amount of that claim to Pacific Gas.

"The withdrawal of a Class 5 Claim should be treated consistently
with an order disallowing, or a settlement resolving, a Class 5
Claim," Mr. Kaplan contends.

Accordingly, Pacific Gas seek the Court's authority to direct
Deutsche Bank to release $743,006 from the Class 5 Disputed
Claims Escrow, plus interest, based on Nuevo Energy's withdrawal
of its Gas Claim.

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


PILLOWTEX CORP: Wants PFGI Shares Declared as Estate Property
-------------------------------------------------------------
On Oct. 26, 2001, Principal Mutual Holding Company was converted
from a mutual insurance company owned by policyholders into a
publicly traded stock company.  Prior to the demutualization,
policyholders of Principal Life Insurance Company held membership
interests in Principal Mutual.  As a result of the
demutualization, all membership interests in Principal Mutual were
extinguished in exchange for shares of common stock of Principal
Financial Group, Inc.

Gilbert R. Saydah, Jr., Esq., at Morris, Nichols, Arsht & Tunnel,
in Wilmington, Delaware, informs the U.S. Bankruptcy Court
District of Delaware that 19,120 shares of common stock of
Principal Financial have been issued in the name of Fieldcrest
Mills, Inc.  The Shares were delivered to the Debtors in
connection with certain annuity contracts, which the Debtors
purchased pursuant to three employee retirement plans.

The Debtors acquired:

   -- 745 shares in connection with a 1982 Annuity Contract used
      to fund retirement benefits under the Trustees of Cannon
      Mills Company & Associated Companies Savings and
      Supplemental Retirement Plan;

   -- 10,108 shares in connection with the Trustees of Cannon
      Mills Company and Associated Companies Retirement Plan; and

   -- 8,267 shares in connection with a plan maintained by
      Fieldcrest Mills.

Principal Financial's common stock trades publicly on the New
York Stock Exchange.

On April 1, 2005, the Court authorized the Debtors to sell their
shares in various publicly traded companies on an established
securities exchange or quotation system.

Out of an abundance of caution, and to give other parties
opportunity to be heard with respect to the Shares, the Debtors
ask the Court to declare that the Principal Financial Shares,
including all dividends and distributions, constitute property of
their estates.  The Debtors also seek the Court's authority to
dispose of the Shares as contemplated by the Prior Sale Order.

             Debtors Have Limited Knowledge on Plans

The Debtors inform the Court that they have limited knowledge of
the Shares, the Annuity Contracts and the Retirements Plans.  The
Debtors have not been able to locate copies of the Retirement
Plans and, because the Plans were maintained several decades ago
and the Debtors have not been obligated to pay premiums for an
unknown number of years, no current or former employee is
intimately knowledgeable about the Plans.

The Debtors also explain that the Annuity Contracts were
originally effective in 1953, 1979 and 1982, and even with
Principal Financial's assistance, they were able to locate only
the 1982 Annuity Contract.

However, available evidence indicates that the Shares are surplus
assets from the Annuity Contracts owned by the Debtors' estates,
Mr. Saydah notes.

                           Top Hat Plan

The Debtors believe that the Supplemental Retirement Plan was a
"top hat" plan -- an unfunded employee benefit program
established to provide deferred retirement compensation to a
select group of management or highly compensated employees --
because it was established for the benefit of one highly
compensated employee.

In concurrence, ERISA counsel has advised the Debtors that the
presence of the term "supplemental" in a plan title generally
signifies that it is a "top hat" plan.  "Top hat" plans are
exempt from any ERISA's fiduciary duty and prohibited
transactions rules, including those provisions of ERISA that
impose limitations on employer reversions of plan assets.

In this regard, the Shares relating to the Supplemental Plan may
revert to the Debtors as holders of the 1982 Annuity Contract,
Mr. Saydah says.

             Cannon Mills Plan and Fieldcrest Plan

The Debtors believe that the Cannon Mills Plan was a qualified
defined benefit pension plan, which had been funded through the
Annuity Contract that originally became effective in 1979.  On
the other hand, the Fieldcrest Plan was an income endowment and
retirement annuity plan, which had been funded through the
Annuity Contract that became effective in 1953.

Based on communications with Principal Financial, and absent any
ongoing plan administration activities or assertions by the
Retired Employees of unsatisfied benefits, the Debtors believe
that the Retirement Plans were terminated prior to the Petition
Date.

In connection with the termination, the Debtors purchased
individual annuities under the applicable Annuity Contract to
satisfy all benefits accrued under the Retirement Plans.

The purchase of individual annuities effectively shifted all
payment obligations in respect of the Retirement Plans to
Principal Financial, and Principal, in turn, issued individual
annuity certificates to the Retired Employees.

Because all unfounded liabilities under the Retirement Plans were
satisfied, the Shares relating to the applicable Annuity
Contracts do not constitute plan assets subject to ERISA.  
Instead, the Shares constitute surplus assets and are not the
property of the Retirement Plans or of any retired employee.

Mr. Saydah notes that, although copies of the Retirement Plans
were unavailable, ERISA counsel advised the Debtors that each of
the Plans would likely have contained a standard provision,
allowing surplus assets to revert to the employer upon
satisfaction of all liabilities under the Plans.

Because the Shares underlying the Annuity Contracts applicable to
the Retirement Plans constitute surplus assets, and not ERISA
plan assets, these Shares may revert to the Debtors as owners of
the applicable Annuity Contracts, Mr. Saydah asserts.

           Sale of Shares Will Not Affect Employees

According to Mr. Saydah, Principal Financial has informed the
Debtors that the individual annuity certificates issued to each
Retired Employee under the annuity contracts are "fully
guaranteed."  Payments made by Principal Financial on the annuity
certificates are not contingent on any further actions by the
Debtors or the Retired Employees.

The Retired Employees continue to receive their annuity payments
from Principal Financial.  Principal Financial has identified the
Retired Employees to whom payments are currently being made in
connection with the Annuity Contracts.  The Debtors are not
involved in the annuity payment process in any respect.

Thus, the Retired Employees' rights and benefits under the
Annuity Contracts, including their rights to the annuity
payments, will remain unaffected, without regard to any
disposition of the Shares.

Headquartered in Dallas, Texas, Pillowtex Corporation --
http://www.pillowtex.com/-- sold top-of-the-bed products to     
virtually every major retailer in the U.S. and Canada.  The
Company filed for Chapter 11 protection on November 14, 2000
(Bankr. Del. Case No. 00-4211), emerged from bankruptcy under a
chapter 11 plan, and filed a second time on July 30, 2003 (Bankr.
Del. Case No. 03-12339).  The second chapter 11 filing triggered
sales of substantially all of the Company's assets.  David G.
Heiman, Esq., at Jones Day, and William H. Sudell, Jr., Esq., at
Morris Nichols Arsht & Tunnel, represent the Debtors.  On July 30,
2003, the Company listed $548,003,000 in assets and $475,859,000
in debts.  (Pillowtex Bankruptcy News, Issue No. 82; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


PLASSEIN INT'L: Chapter 7 Trustee Hires KCC as Noticing Agent
-------------------------------------------------------------
The Honorable Walter Shapero of the U.S. Bankruptcy Court for the
District of Delaware gave his permission to William A. Brandt,
Jr., the Chapter 7 Trustee appointed in Plassein International
Corporation and its debtor-affiliates' cases, to employ Kurtzman
Carson Consultants LLC as his claims and noticing agent.

The Debtors, with Court approval, employed KCC as their claims
and noticing agent.  When the Debtors' cases were converted to
chapter 7 liquidation proceedings, KCC ceased working for the
Debtor.  The Chapter 7 Trustee believes that engaging KCC to
continue its work is the most cost effective way to finish the
claims reconciliation process.

The Chapter 7 Trustee believes that there are funds available for
distribution to the unsecured creditors of the Debtors.  These
funds came from the efforts of the Chapter 7 Trustee on behalf of
the estate of the Debtors.

The Chapter 7 Trustee wants to re-engage KCC as claims and
noticing agent to assist him with the reconciliation and
resolution of the remaining claims in the Debtors' cases.

Eric S. Kurtzman, the Chief Executive Officer of Kurtzman Carson
Consultants LLC, discloses that his Firm requires a $5,000
retainer.  

The Chapter 7 Trustee believes that Kurtzman Carson Consultants
LLC is disinterested as that term is defined in Section 101(14) of
the U.S. Bankruptcy Code.

Headquartered in Willington, Connecticut, Plassein International
Corp., a specialty plastic film and packaging company filed for
chapter 11 protection on May 14, 2003 (Bankr. Del. Case No. 03-
11489).  Adam G. Landis, Esq., at Klett Rooney Lieber & Schorling
and Daniel C. Cohn, Esq., at Cohn Khoury Madoff & Whitesell LLP
represent the Debtors.  When the Company filed for protection from
its creditors, it listed more than $50 million in assets and debts
of over $100 million.  On Oct. 24, 2003, the Court converted the
Debtors' cases to chapter 7 liquidation proceedings.


PRIME CAMPUS: Prefers Dismissal of Bankruptcy Proceeding
--------------------------------------------------------
As previously reported, the U.S. Trustee for Region 7 and Varde
Fund, L.P., asked the U.S. Bankruptcy Court for the Northern
District of Texas, Lubbock Division, to convert the chapter 11
case of Prime Campus Housing, LLC, into a chapter 7 liquidation
proceeding.  In the alternative, the U.S. Trustee asked the Court
to dismiss the Debtor's case.

Varde Fund, the largest secured creditor of Prime Campus, has a
lien on the Debtor's estate on account of a $10.9 million claim.  
The creditor foreclosed on its collateral on July 5, 2005,
pursuant to a Court order.  The creditor argued to the Court that
without its only asset, the Debtor is incapable of reorganizing.  
The Debtor's remaining assets are claims which are subject of an
adversary proceeding and a claim objection against Varde Fund.

The U.S. Trustee echoed the creditor's request.  

                    Prime Campus Responds

Prime Campus tells the Court that it prefers dismissal of its
chapter 11 case rather than conversion to a chapter 7 liquidation
proceeding.  The Debtor says that a chapter 7 trustee will be
handicapped in pursuing the claims and causes of action against
Varde Fund.  If the bankruptcy case is dismissed, the Debtor's
principal is willing and able to bring the claims and causes of
action against Varde Fund in a more appropriate forum.

The Debtor adds that it doesn't want to burden a chapter 7 trustee
with the responsibility or liability of an adversary proceeding.  
The dispute should be allowed to continue outside the jurisdiction
of the Bankruptcy Court, the Debtor argues.

Headquartered in Omaha, Nebraska, Prime Campus Housing, LLC,
operates a 1,017-bed coeducational full-service dormitory located
in Lubbock County, Texas.  Prime Campus filed for chapter 11
protection on March 21, 2005 (Bankr. N.D. Tex. Case No. 05-50311).  
Joseph F. Postnikoff, Esq., at Goodrich, Postnikoff & Albertson
represents the Debtor in its restructuring efforts.  When the
Company filed for protection from its creditors, it listed total
assets of $15,963,311.54 and total debts of 11,090,311.54


RAYTECH CORP: Fails to Comply with NYSE Listing Standards
---------------------------------------------------------
Raytech Corporation (NYSE: RAY) received a notification from the
New York Stock Exchange that it is not in compliance with the
NYSE's increased continued listing standards.  Raytech is
considered "below criteria" due to the fact that its total market
capitalization is less than $75 million over a 30-day trading
period and its stockholders' equity is less than $75 million.  

The NYSE will make available on its consolidated tape beginning on
Monday, Aug. 8, 2005, an indicator, "BC," indicating Raytech is
below the NYSE's quantitative continued listing standards.

Under the rules and procedures of the NYSE, Raytech must respond
to the NYSE within 45 days with a business plan that demonstrates
compliance with the continued listing standards.  As Raytech
announced on June 24, 2005, it does not believe that it can take
steps which will permit it to satisfy the financial continued
listing criteria of the NYSE within the 18 month cure period
provided.

                     Going Private Transaction

In addition, on July 7, 2005, Raytech and The Raytech Corporation
Asbestos Personal Injury Trust, its largest shareholder, disclosed
that the Trust intends to undertake a going private transaction of
Raytech.  As part of that transaction, the Trust entered into a
Supplemental Settlement Agreement with shareholders who were the
environmental creditors of Raytech in its 2001 Chapter 11
reorganization.  

The settlement is conditioned upon receiving the approval of the
United States Bankruptcy Court for the District of Connecticut
after a hearing, which is scheduled for Aug. 16, 2005.  Upon
completion of the settlement, the Trust will own approximately
90.6% of the outstanding shares of Raytech.  The Trust then
intends to:

   -- undertake a short-form merger of Raytech into a newly
      created subsidiary that is wholly owned by the Trust;

   -- terminate the registration of the stock with the Securities
      and Exchange Commission; and

   -- seek to de-list the Raytech common stock from trading on the
      New York Stock Exchange.  

The Company is engaged in discussions with NYSE staff regarding
the timing of the anticipated going private transaction.

Raytech Corporation -- http://www.raytech.com/-- develops,  
manufactures and supplies specialty engineered friction and energy
absorption components used in oil immersed (wet) and dry
transmission and brake systems for on- and off-road vehicles.  The
Company also makes and markets specialty engineered products for
heat resistant, inertia control, and energy absorption
applications.  

Raytech Corporation, headquartered in Shelton, Connecticut,
operates five manufacturing facilities in the United States,
Germany and China as well as two technology and research centers
in Indiana and Germany.  The Company's operations are
strategically situated in close proximity to major customers and
within easy reach of geographical areas with demonstrated growth
potential.


RELIANCE GROUP: Liquidator Settles $2.6 Million Claims with NYU
---------------------------------------------------------------
M. Diane Koken, the Insurance Commissioner of the Commonwealth of
Pennsylvania and Liquidator of Reliance Insurance Company,
reached a settlement over three claims filed by New York
University.

NYU filed claims aggregating $2,687,867 against Reliance
Insurance Policy Nos.:

   * NUH0122261, which was assigned Claim No. 2077801,
   * NUH0115903, which was assigned Claim No. 2133228, and
   * NUH108566, which the Liquidator contends it never received.

On March 26, 2004, the Liquidator issued a Notice of
Determination for Claim No. 2077801.  On June 18, 2004, the
Liquidator issued a NOD for Claim No. 2133228.  Both NODs
assigned Priority Level (e) to NYU's Claims, without assigning an
allowed amount.  NYU objected to the NOD relating to Claim No.
2077801, alleging it was entitled to Priority Level (b) status.

In July 2004, the Commonwealth Court appointed Adam D. Wilf,
Esq., as referee to hear the dispute.  After good faith
negotiations, NYU and RIC reached a settlement.

Robert N. Gawlas, Jr., Esq., at Rosenn, Jenkins & Greenwald, in
Wilkes-Barre, Pennsylvania, relates that under the Settlement:

   (a) NYU will withdraw its objection without prejudice;

   (b) RIC will process NYU's third Claim for Policy No.
       NUH108566, upon submission, and will assign that Claim
       Priority Level (e); and

   (c) NYU will retain all rights to dispute, litigate, arbitrate
       or contest the amount of the Claims, but not the Priority
       Levels.

Leonard M. Rosenberg, Esq., at Garfunkel, Wild & Travis, in Great
Neck, New York, signed the settlement for NYU.  Judge James G.
Colins in the Commonwealth Court approved the settlement.

Headquartered in New York, New York, Reliance Group Holdings, Inc.
-- http://www.rgh.com/-- is a holding company that owns 100% of   
Reliance Financial Services Corporation.  Reliance Financial, in
turn, owns 100% of Reliance Insurance Company.  The holding and
intermediate finance companies filed for chapter 11 protection on
June 12, 2001 (Bankr. S.D.N.Y. Case No. 01-13403) listing
$12,598,054,000 in assets and $12,877,472,000 in debts.  The
insurance unit is being liquidated by the Insurance Commissioner
of the Commonwealth of Pennsylvania.  (Reliance Bankruptcy News,
Issue No. 74; Bankruptcy Creditors' Service, Inc., 215/945-7000)

At Apr. 30, 2005, Reliance Group Holdings, Inc.'s balance sheet
showed a $790.3 million stockholders' deficit.


RESIDENTIAL ASSET: Fitch Assigns Low-B Rating on 3 Cert. Classes
----------------------------------------------------------------
Residential Asset Mortgage Products, Inc. series 2005-RZ2 is rated
by Fitch:

     --$67.1 million class A-I-1 'AAA';
     --$12.3 million class A-I-2 'AAA';
     --$29.1 million class A-I-3 'AAA';
     --$17.9 million class A-I-4 'AAA';
     --$126.4 million class A-II 'AAA';
     --$18.6 million class M-1 'AA+';
     --$14.4 million class M-2 'AA';
     --$7.5 million class M-3 'AA-';
     --$7.9 million class M-4 'A+';
     --$8.1 million class M-5 'A-';
     --$6.7 million class M-6 'BBB+';
     --$3.9 million class M-7 'BBB';
     --$3.9 million class M-8 'BBB-';
     --$3.4 million class B-1 'BB+';
     --$3.7 million class B-2 'BB';
     --$3 million class B-3 'BB-'.

The 'AAA' rating on the class A certificates reflects the 24.65%
initial credit enhancement provided by 5.55% class M-1, the 4.30%
class M-2, the 2.25% class M-3, the 2.35% class M-4, the 2.40%
class M-5, the 2.00% class M-6, the 1.15% class M-7, the 1.15%
class M-8, the 1.00% privately offered class B-1, the 1.10%
privately offered class B-2, and the 0.90% privately offered class
B-3, along with overcollateralization.

The initial and target OC is 0.50%. In addition, the ratings
reflect the strength of the transaction's legal and financial
structures and the attributes of the mortgage collateral.  The
ratings also reflect the strength of the servicing capabilities
represented by Residential Funding Corporation as master servicer
and Homecomings Financial Network, Inc. as primary servicer on the
pool.

The collateral pool consists of 2,334 fixed-rate and adjustable-
rate mortgage loans with an initial aggregate principal balance of
$335,410,014, secured by first liens.  As of the cut-off-date, the
weighted average original loan-to-value ratio of the collateral
pool was 101%, and the weighted average credit score was 699.  The
average balance was $143,706, and the pool had a weighted average
interest rate of 7.6698%.  The weighted average original term to
maturity was 359 months.  Florida (11.07%), Pennsylvania (5.55%),
and Michigan (5.32%) constitute the top three state
concentrations.

The loans were sold by RFC to RAMP, the depositor.  The mortgage
loans were originated under RFC's Home Solution Program, which is
less stringent than other first lien underwriting standards such
as Fannie Mae, Freddie Mac, or RFC's jumbo loan program.  Prior to
assignment to the depositor, RFC reviewed the underwriting
standards for the mortgage loans and purchased all the mortgage
loans from mortgage collateral sellers who participated in or
whose loans were in substantial conformity with the standards set
forth in RFC's Home Solutions program.

The Home Solutions program was established primarily for the
purchase of primary or second residence mortgage loans made to
borrowers who may have limited cash or may want to finance the
full value of the home plus closing costs.  In addition, there may
be some debt consolidations loans originated under the program
with LTVs as high as 107%.

RAMP, a special purpose corporation, deposited the loans in the
trust, which then issued the certificates.  For federal income tax
purposes, an election will be made to treat the trust as three
real estate mortgage investment conduits.


SAFETY-KLEEN: Modifying Injunction for Mr. Ratke to Pursue Action
-----------------------------------------------------------------
On May 3, 2004, John C. Ratke filed an action against Safety-Kleen
Corporation and its debtor-affiliates, alleging injury and damages
resulting from a motor vehicle collision with a truck owned and
operated by Safety-Kleen Systems, Inc.

In a Court-approved stipulation, the Reorganized Debtors and Mr.
Ratke agree that:

   (a) The discharge injunction set forth in the Confirmation
       Order and the Debtors' Joint Plan of Reorganization is
       modified to permit Mr. Ratke to prosecute the State Court
       Action to settlement or a final and non-appealable
       judgment, provided that:

          (1) Mr. Ratke may enforce any final and non-appealable
              judgment, entered by a court of competent
              jurisdiction, settlement, or other disposition of
              the State Court Action against the Reorganized
              Debtors without further Court order only to the
              extent that any settlement or final judgment is
              satisfied by the Reorganized Debtors' available
              liability insurance policies and subject to the
              Reorganized Debtors' collection of all or a portion
              of that judgment from the Available Coverage;

          (2) The Available Coverage does not include
              "self-insurance," "fronted" insurance or under
              "self-insurance," "matching deductible" coverage
              or any other policies that do not require actual
              and ultimate payment by an insurer of the
              settlement or judgment;

          (3) The Reorganized Debtors will not be required to
              seek any judgment under:

                 -- self-insured retentions,

                 -- policies constituting "fronted" insurance,

                 -- "self-insurance",

                 -- policies providing for "matching
                    deductible", or

                 -- other policies that do not require actual
                    and ultimate payment by an insurer of the
                    judgment;

          (4) The Available Coverage is comprised solely of the
              automotive personal injury coverage in existence
              as of May 10, 2000, the date of the alleged
              automobile accident; and

          (5) If Mr. Ratke obtains a settlement or a final and
              non-appealable judgment against the Reorganized
              Debtors, the Reorganized Debtors will make all
              reasonable efforts to collect the settlement or
              judgment from the Available Coverage;

   (b) Mr. Ratke will fully release the Reorganized Debtors from
       any claims for punitive damages, breach of contract,
       battery, intentional infliction of emotional distress,
       intentional misrepresentation, fraud, concealment or any
       other claims; and

   (c) Nothing will affect the parties' rights to prosecute or
       defend against the merits of the allegations asserted in
       the State Court Action.

Headquartered in Delaware, Safety-Kleen Corporation --
http://www.safety-kleen.com/-- provides specialty services such  
as parts cleaning, site remediation, soil decontamination, and
wastewater services.  The Company, along with its affiliates,
filed for chapter 11 protection (Bankr. D. Del. Case No. 00-02303)
on June 9, 2000.  Gregg M. Galardi, Esq., at Skadden, Arps, Slate,
Meagher, represents the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $3,031,304,000 in assets and $3,333,745,000 in liabilities.
(Safety-Kleen Bankruptcy News, Issue No. 90; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


SAINT VINCENTS: Hamre Wants Stay Lifted to Consummate Settlement  
----------------------------------------------------------------
On November 14, 2002, Mary Ann Hamre, as Guardian of Michelle
Hamre, commenced an action in the United States District Court
for the Southern District of New York against, among others, Saint
Vincents Catholic Medical Centers of New York, which caused
Michelle to suffer permanent brain damage.

The defendants to the suit agreed to settle with Ms. Hamre for
$3.5 million, with the $1 million to be paid by Medical Liability
Mutual Insurance Co., the Debtors' insurance carrier.  

District Court Judge Peter J. Leisure has approved the
distribution of the settlement.  Pursuant to a Compromise Order,
the District Court directed the insurance companies, not the
Debtors, to pay the plaintiffs.

Pursuant to Section 362 of the Bankruptcy Code, Ms. Hamre asks
Judge Beatty to lift the automatic stay to permit the parties to
complete the Settlement.

Bradley A. Sacks, Esq., in New York, explains that the proceeds
to be used by Mutual Liability are not subject to competing
creditors, nor will it deplete any assets of the Debtors.  While
the insurance policy may be an asset of the estate, the
$1 million earmarked to fund the Settlement is not.

Mr. Sacks argues that the automatic stay must be modified as to
the District Court Action to allow Mutual Liability to complete
the processing of the necessary paperwork and to allow the
insurance companies to disburse the funds without fear that by
doing so they have violated the Stay.  This ministerial function
was all that remained to complete the Settlement.  Mutual
Liability has already funded the annuity portion of the
Settlement.

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 Lease Decision Period Extended to Jan. 2006
-----------------------------------------------------------------
As of the Petition Date, Saint Vincents Catholic Medical Centers
of New York and its debtor affiliates are parties to 50 unexpired
leases of nonresidential real property.  At this juncture in the
Chapter 11 process, they have not had a sufficient opportunity to
make final determination regarding the assumption or rejection of
the Leases.

A list of the Leases can be accessed free of charge at:

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

James S. Sullivan, Esq., at McDermott Will & Emery LLP, in New
York, explains that evaluation of the Leases requires the Debtors
to devote considerable time and effort to carefully review the
merits of each Lease.  The Debtors have begun evaluating the
economics of the Leases in the perspective of the Bankruptcy Code
to determine whether the assumption or rejection of each of the
Leases would inure to the benefit of their estates.  

The Debtors' decision to assume or reject the Leases also will
depend on, among other things, the review of their overall
operations and an analysis of each Lease location and purpose.  

Due to the number of Leases and the complexity of their business
operations, the Debtors' analysis of the Leases will take a
certain amount of time.  Nevertheless, the Debtors are attempting
to make informed determinations regarding the Leases as promptly
as possible.  They have already sought the authorization to
reject two of the Leases, which are vacant.

Given the importance of the Leases to their continued operations,
the Debtors cannot make a reasonable and informed decision as to
whether to assume or reject each of the Lease within the initial
60-day period specified in Section 365(d)(4) of the Bankruptcy
Code.  

In this regard, the Debtors ask the Court to extend the time
within which they may assume or reject the Leases to and
including January 2, 2006, without prejudice to their right to
seek further extension.

Mr. Sullivan asserts that, absent the extension, the Debtors may
be forced to prematurely assume the Leases, which could lead to
unnecessary administrative claims against their estates if the
Leases are ultimately rejected.

Conversely, if the Debtors precipitously reject the Leases or are
deemed to reject the Leases by operation of Section 365(d)(4),
they may forego significant value in the Leases resulting in the
loss of valuable property interests that may be essential to
their reorganization.

Mr. Sullivan assures the Court that the extension will not
prejudice the lessors to the Leases.  The Debtors intend to
perform all of their postpetition obligations under the Leases
pending their assumption and rejection determinations.  Any
lessor may also ask the Court to fix an earlier date for the
Debtors to decide on an unexpired lease.

                           Objections

(A) Primary Care

Under a "lease-leaseback transaction," the Debtors leased the
St. Dominic Family Health Center in Jamaica, New York, to the
Dormitory Authority of the State of New York, which subsequently
leased the property to New York City.  The City then subleased
the property to Primary Care Development Corporation.

Alan M. Feld, Esq., at Manatt, Phelps & Phillips, LLP, in Los
Angeles, California, relates that the Operating Lease requires
the Debtors to provide monthly payments to Primary Care for
$47,244.  The Debtors have not made the payments due for July
2005.

In that light, Primary Care's consent on the Extension is
contingent upon these protections and clarifications:

   (a) The Debtors must agree to comply with the Operating Lease,
       including the timely payment to Primary Care of all
       required rent and other amounts due, through the
       effectiveness of the assumption or rejection of the Lease;

   (b) The Debtors must agree to immediately cure the payment
       default in connection with the payment due on July 1,
       2005, and timely make the payment due on August 1, 2005;

   (c) Regardless of the automatic stay, Primary Care will be
       permitted to draw down the Security Deposit as necessary
       to cure any defaults under the Operating Lease, without
       further order of the Court or the necessity to take any
       other action; and

   (d) The parties will agree to a mutually acceptable deadline
       by which the they must decide whether to assume or reject
       the Operating Lease.

(B) Cavaliere

Cavaliere Group, LLC, and Saint Vincent's Hospital and Medical
Center of New York are parties to a lease, dated as of
February 18, 1999.

Gerard DiConza, Esq., in New York, relates that, as of July 29,
2005, SVCMC has not paid for its postpetition obligations under
the Lease aggregating to $17,679. The sum covers the base rent
and real estate taxes due for July and August 2005.

Cavaliere believes the Debtors' request for a four-month
extension bases on the voluminous number leases is unjustified
and excessive.  The extension would generate the delay and
uncertainty that Section 365(d)(4) is designed to prevent.

Mr. DiConza argues that landlords should not shoulder the risk of
a debtor's inability to reorganize.  To ease the burden on
landlords, they should have the ability to quickly recapture
their leased premises and be granted relief from the automatic
stay in the event of a future default by the Debtors.

In addition, any extension should be conditioned on the Debtors
agreeing to give Cavaliere not less than 15 days' advance written
notice of their intention to reject the Lease.  The Debtors
should also be required to return the premises in "broom clean"
condition.

To the extent the Debtors comply with their postpetition
obligations, Cavaliere would not oppose an extension of 60 days.

(C) Manley

John Manley, et al., managing agent for Thomas F. Campenni
Company and Saint Vincent's Hospital and Medical Center are
parties to the lease of the 8th and 9th floors of the building
known as 41 East 11th Street, New York, New York.  The lease has
expired on March 31, 2005.  

On June 20, 2005, the parties entered into a stipulation to allow
Saint Vincent's Hospital to use the 9th floor until December 31,
2005.

Charles J. Fisher, Esq., at Pollack Cooperman & Fisher, PC, in
Massapequa, New York, tells the Court that the Debtors have
failed to make any payment for July 2005, which became due
July 10, 2005.  

Mr. Fisher asserts that the Court should condition any extension
of time to assume or reject the Occupancy Stipulation on the
Debtors' timely performance of all future, postpetition
obligations as they come due.

(D) Dadourian

Dadourian Export Corporation and Saint Vincent's Hospital are
parties to a lease, dated October 1, 1990.  The Lease currently
expires by its terms on September 30, 2005.

Thomas A. Draghi, Esq., at Westerman Ball Ederer Miller &
Sharfstein, LLP, in Mineola, New York, relates that, as of
August 1, 2005, the Debtors have not paid for their postpetition
obligations aggregating to $47,761.

Dadourian objects to the request to the extent the Debtors are
not being compelled to comply with their payment obligations
under Section 365(d)(3).

Dadourian wants the Court to condition the extension on the
Debtors being required to return the Leased Premises in "broom
clean" condition and otherwise comply with their obligations
under the Lease if an extension is not negotiated or the Lease is
rejected.

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: Unit Receives $10K Grant From Senator Oppenheimer
-----------------------------------------------------------------
St. Vincent's Hospital Westchester has received a $10,000 New York
State Local Initiative grant from State Senator Suzi Oppenheimer.

The funds will be used to renovate the hospital's day treatment
room for adolescents in the partial hospital program.  The program
offers daily mental health treatment services for adolescents who
need a more intensive level of services, but who are able to
return home every day.

"This grant will allow us to improve the environment of care
provided to our neediest adolescents and their families," said Dr.
Brian Fitzsimmons, executive director for behavioral health
services.

"I am very pleased that this grant will be used to help
adolescents who are undergoing mental health treatment," said
Senator Oppenheimer.  "It's so important that adolescents with
mental health issues get back to school and to their day-to-day
lives as quickly as possible."

St. Vincent's Hospital Westchester offers comprehensive inpatient
and outpatient mental health and chemical dependency services for
children, adolescent, adults and their families.  Specialized
programs include bilingual, bicultural Latino treatment services,
programs for individuals dually diagnosed with mental illness and
developmental disabilities, and age-specific programs for
children, adolescents, seniors and their families.

St. Vincent's Westchester is part of Saint Vincent Catholic
Medical Centers, one of the New York metropolitan area's most
comprehensive health care systems, serving nearly 600,000 people
annually.  SVCMC was established in 2000 as a result of the merger
of Catholic Medical Centers of Brooklyn and Queens, Saint Vincents
Hospital and Medical Center of New York and Sisters of Charity
Healthcare in Staten Island. Sponsored by the Roman Catholic
Diocese of Brooklyn and Sisters of Charity of New York, SVCMC
serves as the academic medical center of New York Medical College
in New York City.

The system includes seven hospitals: Mary Immaculate Hospital,
Queens; St. John's Queens Hospital; St. Mary's Hospital of
Brooklyn; St. Vincent's Hospital Manhattan; St. Vincent's Hospital
Staten Island; Bayley Seton Hospital, Staten Island; and St.
Vincent's Hospital Westchester.  Resources include over 3,000
physicians, four skilled nursing facilities, a system-wide home
care service, a hospice and over 60 ambulatory care sites which
provide a broad array of medical, psychiatric and substance abuse
services.  

In 2004, SVCMC recorded over 92,000 inpatient discharges, more
than 1,100,000 outpatient visits, and 640,000 home care visits.  
Its emergency rooms, which include three Level 1 trauma centers,
received 255,000 visits in that same year, while SVCMC is the
largest private provider of EMS services in the New York City Fire
Department's 9-1-1 service.  Also in 2003, St. Clare's Hospital,
now St. Vincent's Midtown, became affiliated with the healthcare
system.

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)


SKYWAY COMMUNICATIONS: Talib Parties Want Bankruptcy Dismissed
--------------------------------------------------------------
A consortium of lenders known as the Talib Parties asks the U.S.
Bankruptcy Court for the Middle District of Florida, Tampa
Division, to dismiss the chapter 11 case of SkyWay Communications
Holding Corp. fka I-Telecom, Inc., fka Mastertel Communications
Corp.

                      The Talib Conflict

On Dec. 14, 2004, the Talib Parties filed an action against the
Debtor and its principals -- Brent Kovar, James Kent and Joy C.
Kovar -- in the U.S. District Court for the Middle District of
Arkansas, Jonesboro Division.  The case was moved and is currently
pending in the U.S. District Court for the Middle District of
Florida, Tampa Division [Case No. 8:05-CV-282-T-17-TBM].  The suit
alleges violations of the Securities Act of 1933, violations of
the Florida Securities Investor Protection Act, fraud, breach of
contract, and breach of fiduciary duty, and requests injunctive
relief.

On April 5, 2005, Magistrate Judge Thomas B. McCoun issued a
temporary restraining order freezing the Debtor's assets and
authorizing expedited discovery.  On April 24, the Debtor's
officers named in the litigation resigned and turned over the
control of the company to Ray Powers and Corban Networks.  At that
time, Ray Powers, the CEO of Corban, became the sole director of
SkyWay.

Judge McCoun issued a preliminary injunction on April 27.  A day
after the District Court issued the premilinary injunction, the
Debtor issued a press release announcing the sale of their assets,
including a Hummer Fleet, a Cessna 172 airplane, and two heavy-
duty bucket trucks.  In addition, several liabilities were
assigned or liquidated including a luxury suite at Raymond James
Stadium.  The Debtor said in the prepared statement that the move
was designed as a cost-cutting measure.

The Talib Parties obtained another order from the District Court
requiring the Debtor to comply with the preliminary injunction.  
The Talib Parties say that the Debtor has yet to comply with the
order.

The Talib Parties also learned that the Debtor vacated its
headquarters and removed property from its offices.  On April 29,
2005, Mr. Powers resigned from the Board of Directors.  Since that
time, the Debtor has had no directors and ceased conducting any
business.

On May 2, 2005, the District Court ordered the Debtor, in danger
of contempt, to cease the destruction, removal or other
disposition of company or individual records regardless of content
or format.  Furthermore, the District Court ordered the Debtor to
produce documents the Talib parties demanded.  The Debtor nor its
officers have complied with that order.  Faced with possible
sanctions and contempt for repeated disregard of the District
Court's orders, the Debtor filed for chapter 11 to stay the
Court's orders.

                     No Schedules and Statements

Court records show that the Debtor asked the Bankruptcy Court to
compel its landlord, ECI, to turnover relevant documents so it can
prepare and file its schedules of assets and liabilities and
statements of financial affairs.

On July 22, 2005, with the Bankruptcy Court's permission, the
Debtor and its officers, conducted an inspection of its former
headquarters to gather the documents and records necessary to
prepare the statements and schedules.  

The Talib Parties allege that during the inspection, the Debtor
made to real effort to gather the necessary documents.  According
to the creditors, there were no IT personnel to record or download
electronic data, no copier was available and only a miniscule
portion of the documents for review were available during the
inspection.

The Debtor, the Talib Parties say, seems to be delaying the
process which is prejudicial to creditors.  

                     Abuse of Judicial Process

The Talib group charges that SkyWay's bankruptcy petition was
filed in bad faith.  They argue that the Debtor's behavior, before
and after the bankruptcy filing, clearly speaks of abuse of the
judicial system.  This abuse includes intentional violation of
numerous District Court orders, the creditors contend.  Also, the
Debtor's counsel, David W. Steen, Esq., of Tampa, has now sought
to withdraw from the proceeding as a result of the Court's refusal
to permit Skyway to transfer an asset to his name.

                   Inability to Effectuate a Plan

The Talib Parties point out that the Debtor is out of business.  
That said, it's impossible for SkyWay to effectuate a chapter 11
plan.  

The Talib group urges the Bankruptcy Court to dismiss the case to
enforce the District Court's orders which will expose the illegal
and fraudulent conduct of the officers in running the Debtor's
business and handling of its assets.

The Talib group is comprised of:  

              * Nuwave Limited,
              * Omar S. Bangaitah,
              * Ahmed Salem Bugshan,
              * Ahmad M. Al Ajlan,
              * Ali Al Sabah,
              * Castle Bridge Investors Ltd.,
              * Ibrahim Al Therban,
              * International Financial Advisors K.S.C.C.,
              * Khalid Al Attal,
              * Kuwait Investment Company,
              * Kuwait Real Estate Company,
              * Q Invest Inc.,
              * Madi M. Haider,
              * Mohammad H. Al Dall,
              * Nedal Al Massoud,
              * Osama A Al Abduljaleel,
              * Mahmoud H. Haider,
              * Pearl of Kuwait Real Estate Co.,
              * Saleh Al Salmi
              * Taiba Group, Inc.,
              * Therfield Holdings,
              * Waleed A. Al Essa,
              * Yasser Zakaria Al Nahhas,
              * Yousef Al Saleh, and
              * Nazar F. Talib.

The Talib group is represented by:

              Stanford R. Solomon
              The Solomon Tropp Law Group, P.A.
              400 North Ashley Plaza, Suite 3000
              Tampa, Florida 33602-4331
              Tel: 813-225-1818
              Fax: 813-225-1050

The Court will convene a hearing on August 22, 2005, at 2:00 p.m.
to consider the request.

Headquartered in Clearwater, Florida, SkyWay Communications
Holding Corp. fka I-Teleco.com, Inc., fka Mastertel Communications
Corp. -- http://www.skywaynet.us/-- develops ground to air in-
flight aircraft communication.  The Debtor filed for chapter 11
protection on June 14, 2005 (Bankr. M.D. Fla. Case No. 05-11953).  
When the Debtor filed for protection from its creditors, it listed
$1 million to $10 million in assets and $10 million to $50 million
in debts.


SONICBLUE INC: Wants to Hire Grobstein Horwath as Consultants
-------------------------------------------------------------
SONICblue Incorporated, its debtor-affiliates and its Official
Committee of Unsecured Creditors ask the U.S. Bankruptcy Court for
the Northern District of California for permission to employ
Grobstein Horwath & Company LLP as their accounting and litigation
consultants.

The Debtors and the Committee believe that the assistance of
Grobstein Horwath is necessary to provide services in support of
claims litigation, prosecuting avoidance actions, the Intel/VIA
litigation and an interim distribution motion, as well as matters
related to the formulation of the reorganization plan.

Grobstein Horwath will:

   1) assist the Debtors or the Committee in valuing, reconciling,
      evaluating and litigating claims against the estate,
      including in context of the interim distribution motion;

   2) assist the Debtors or the Committee in the evaluation and
      prosecution of the avoidance actions, including but not
      limited to to providing analysis, assistance and
      consultation regarding "new value" and "ordinary course"
      defenses raised by various defendants;

   3) provide litigation consulting services relating to the
      Intel/VIA litigation as requested by the Debtors or the
      Committee;

   4) provide tax and other financial analysis as needed regarding
      plans of reorganization to be proposed;

   5) provide other accounting and financial advisory assistance
      as necessary to the Debtors and the Committee; and

   6) perform other services within the scope of the firm's
      employment as acccounting and litigation consultants as may
      be requested by the Debtors and the Committee.

Alfred Siegel, Esq., Daniel L. McConaughy, Esq., and Howard P.
Grobstein, Esq., will primarily represent the Debtors and the
Committee.

A schedule of the Firm's professionals' hourly rates is
available at no charge at:

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

Grobstein Horwath assures the Court that its Firm is a
"disinterested person" as that term is defined and used in the
Bankruptcy Code.       

Headquartered in Santa Clara, California, SONICblue Incorporated
is involved in the converging Internet, digital media,
entertainment and consumer electronics markets.  The Company,
together with three of its wholly owned subsidiaries, Diamond
Multimedia Systems, Inc., ReplayTV, Inc., and Sensory Science
Corporation, filed voluntary petitions for bankruptcy under
Chapter 11 of the United States Bankruptcy Code in the United
States Bankruptcy Court for the Northern District of California,
San Jose Division (Case No. 03-51775).  When the Debtors filed
for protection from their creditors, they listed total assets of
$342,871,000 and total debts of $335,473,000.


SPORTS COURTS: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Sports Courts of Lincoln, Inc.
        222 North 44th Street
        Lincoln, Nebraska 68503

Bankruptcy Case No.: 05-43123

Type of Business: The Debtor operates a sports and fitness
                  center.  See http://www.sportscourts.com/

Chapter 11 Petition Date: August 5, 2005

Court: District of Nebraska (Lincoln Office)

Debtor's Counsel: John C. Hahn, Esq.
                  Jeffrey, Hahn, Hemmerling & Zimmerman
                  4701 Van Dorn, Suite 1
                  Lincoln, Nebraska 68506
                  Tel: (402) 483-7711
                  Fax: (402) 483-6133

Estimated Assets: $50,000 to $100,000

Estimated Debts:  $1 Million to $10 Million

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


STRATOS GLOBAL: Moody's Reviews Ba2 Senior Secured Ratings
----------------------------------------------------------
Moody's Investors Service placed the Ba2 Corporate Family and Ba2
Senior Secured ratings of Stratos Global Corporation under review
for possible downgrade.  Stratos' speculative grade liquidity
rating of SGL-3 remains unchanged.  

This action is driven by recent higher levels of competitive price
pressures within both the Mobile Satellite and Broadband Business
segments which has caused Moody's to reduce its expectations for
Stratos' free cash flow through 2006, coupled with Moody's
expectation that Stratos may seek to make acquisitions and/or
return additional cash to shareholders, either of which will
pressure financial metrics further.

The review will focus on:

   1) Stratos' prospects for organic revenue growth, margins and
      market share amidst a pricing environment that has recently
      been much more competitive;

   2) Moody's expectations for Stratos to purchase growth through
      a leveraged acquisition;

   3) the likelihood that Stratos will, as an alternative, return
      cash to shareholders; and

   4) the effect of these potential transactions on the
      relationship between free cash flow and debt.

These ratings have been placed under review for possible
downgrade:

   * Corporate Family Ba2
   * Senior Secured Ba2
   * Revolver Authorization, due November 2009 US$ 25 million
   * Term Loan B, due November 2010 US$150 million

These rating remains unchanged:

   * Speculative Grade Liquidity SGL-3

Stratos Global Corporation is a global provider of mobile and
fixed satellite-based communications services, with headquarters
in St John's, Newfoundland, Canada, and executive offices in
Bethesda, Maryland.


TIRO ACQUISITION: Plan Filing Period Intact Until October 10
------------------------------------------------------------
TIRO Acquisition, LLC, and its debtor-affiliates sought and
obtained an extension of their time to file and solicit
acceptances of a chapter 11 plan without interference from other
parties.  The U.S. Bankruptcy Court for the District of Delaware
gave the Debtors until October 10, 2005, to file a plan and until
December 8 to solicit acceptances of that plan.

On March 16, 2005, the Debtors sold substantially all of their
assets to Outsourcing Services Group, LLC.  In conjunction with
the sale, the Debtors are liquidating inventory not purchased by
Outsourcing Services.  The Debtors tell the Court they are
currently reviewing executory contracts and unexpired leases to
determined which will be assumed, assumed and assigned or
rejected.  In addition, the Debtors say they're determining the
costs and benefits of pursuing certain avoidance actions as well
as potential actions based on accounting irregularities.

Headquartered in Southport, Connecticut, Tiro Acquisition --
http://www.tiroinc.com/-- develops, manufactures and packages    
hair care and other products for professional salons.  The Company
and its debtor-affiliates filed for chapter 11 protection on
October 12, 2004 (Bankr. D. Del. Case No. 04-12939).  When the
Debtor filed for protection, it listed more than $10 million in
assets and debts.


TITAN CRUISE: Court Okays Glenn Rasmussen as Bankruptcy Counsel
---------------------------------------------------------------          
The U.S. Bankruptcy Court for the Middle District of Florida gave
Titan Cruise Lines and its debtor-affiliate, Ocean Jewel Casino &
Entertainment, permission to employ Glenn Rasmussen Fogarty &
Hooker, P.A., as their general bankruptcy counsel.

Glenn Rasmussen will:

   a) render legal advise with respect to the Debtors' powers and
      duties as debtors-in-possession in the continued operation
      of their business and management of their property;

   b) prepare on behalf of the Debtors all necessary motions,
      applications, orders, reports, pleadings and other legal
      papers required by the Court;

   c) assist and participate in negotiations with creditors and
      other parties in drafting and formulating a plan of
      reorganization and its related disclosure statement, and
      take necessary actions to confirm that plan;

   d) represent the Debtors in all adversary proceedings,
      contested matters and other matters involving the
      administration of their chapter 11 cases in both federal and
      state courts;

   e) represent the Debtors in negotiations with potential
      financing sources and prepare contracts, security
      instruments or other documents necessary to obtain
      financing;

   f) appear before the Bankruptcy Court, any appellate courts and
      the U.S. Trustee to represent and protect the interests of
      the Debtors; and

   g) perform all other legal services to the Debtors that are
      necessary for the proper administration of their chapter 11
      cases.

Robert B. Glenn, Esq., and Gregory M. McCoskey, Esq., are the lead
attorneys for the Debtors.  Mr. Glenn disclosed that his Firm
received a $180,000 retainer.  Mr. Glenn charges $375 per hour for
his services, while Mr. McCoskey charges $240 per hour.

Mr. Glenn reports Glenn Rasmussen's professionals bill:

      Designation          Hourly Rate
      -----------          -----------
      Associates           $185 - $200        
      Paralegals           $100 - $125

Glenn Rasmussen assures the Court that it does not represent any
interest materially adverse to the Debtors or their estates.

Headquartered in Saint Petersburg, Florida, Titan Cruise Lines and
its subsidiary owns and operates an offshore casino gaming
operation.  The Company and its subsidiary filed for chapter 11
protection on August 1, 2005 (Bankr. M.D. Fla. Case Nos. 05-15154
and 05-15188).  When the Debtors filed for protection from their
creditors, they estimated assets and debts between $10 million to
$50 million.


TRIUMPH HEALTHCARE: Moody's Rates New $175 Mil. Facilities at B2
----------------------------------------------------------------
Moody's Investors Service assigned a rating of B2 to Triumph
HealthCare Second Holdings, Inc.'s proposed $175 million first
lien senior secured bank credit facilities comprised of a $35
million senior secured revolving credit facility and a $140
million senior secured term loan, and a rating of Caa1 to a
proposed $95 million second lien term loan.  Moody's also assigned
a corporate family rating of B2 to the new entity, which replaces
the existing borrower, Triumph HealthCare, LLP.  The outlook for
the ratings is stable.

The proceeds of the transaction, along with approximately $20
million of cash on hand, will be used to purchase SCCI Health
Services Corporation (SCCI), a provider of long-term acute care
hospital (LTACH) services, for $110 million, which is
approximately 5.3 times SCCI's trailing twelve month adjusted
EBITDA.  The proceeds will also be used to refinance the company's
existing debt, including the redemption of approximately $30
million of the $35 million redeemable preferred stock put in place
at the holding company, Triumph Holdings Inc., by the financial
sponsor, TA Associates.

Ratings assigned to Triumph HealthCare Second Holdings, Inc.:

   * $35 million senior secured revolving credit facility
     due 2011, rated B2

   * $140 million senior secured 1st lien term loan due 2011,
     rated B2

   * $95 million senior secured 2nd lien term loan due 2012,
     rated Caa1

   * B2 corporate family rating

Ratings to be withdrawn from Triumph HealthCare, LLP (upon
completion of proposed transaction):

   * $25 million senior secured revolving credit facility
     due 2009, rated B2

   * $90 million senior secured term loan due 2010, rated B2

   * B2 corporate family rating

The outlook for the ratings is stable.

The ratings reflect:

   * the company's high leverage after the transaction;

   * the decreased financial flexibility resulting from the
     conversion to debt of a significant portion of the company's
     equity;

   * the expected reduction in Medicare reimbursement in 2006 from
     the proposed re-weighting of LTACH diagnostic related groups;

   * the continued development of new facilities and the required
     start-up costs;

   * concerns regarding the successful integration of the SCCI
     acquisition; and

   * an ongoing qui tam lawsuit involving an SCCI facility.

Following the acquisition, Triumph will operate 19 facilities in
six states with two facilities under development.  Previously
Triumph had operated only six facilities, and was developing the
aforementioned two facilities, in the Houston, Texas area.

The ratings also reflect the investment required to consolidate or
move the company's existing hospital-within-hospital long-term
acute care facilities from the current host hospitals before the
phase in of regulatory changes affecting the Medicare
reimbursement for these types of facilities.  The Medicare
reimbursement rules will ultimately require the HIH to limit
Medicare admission volumes from the host hospital to 25% of total
Medicare admissions.  The change in Medicare reimbursement will be
phased in over a period of three years beginning October 1, 2005.

Moody's expects Triumph will be required to address this issue at
five of the 11 HIH facilities acquired from SCCI.  Triumph had
previously focused on the free-standing LTACH model and therefore
had little exposure to the reimbursement change affecting HIH
operations at its existing facilities.

The ratings also reflect recognition of the company's expanded
geographic reach and diversity following the SCCI acquisition and
the company's leading market position in its primary market in
Houston, Texas.  Moody's notes, however, that the company will
still have a significant concentration of EBITDA from the Houston
market.  The combined company will also benefit from SCCI's focus
on higher acuity patients and increased penetration of commercial
payors.  This will somewhat alleviate the reliance on Medicare
reimbursement.  For the year ended December 31, 2004, Medicare
reimbursement represented 89% of Triumph's revenue and 76% of SCCI
revenue.

The stable outlook anticipates continued positive operating
performance given favorable demographic and industry dynamics
caused by an aging population.  Additionally, Moody's believes the
company will be able to absorb the effect of the expected
reduction in Medicare reimbursement in 2006 with minimal
disruption.  Moody's also notes that the company has plans in
place to address the operations of the HIH facilities that are
expected to be subject to the change in the Medicare regulations.

If the company shows stability in its operations over the next 12-
18 months, particularly in the acquired and de novo facilities,
and generates sustainable operating cash flow to adjusted debt in
the range of 10% to 15% and free cash flow to adjusted debt in the
range of 7% to 10%, Moody's would consider upgrading the ratings.

The ratings would come under pressure if Triumph were to incur
additional indebtedness for development practices beyond the
proposed transaction or if the decrease in Medicare reimbursement
rates resulting from the LTACH DRG re-weighting was greater than
expected.  Additionally, downward pressure on the ratings would
result if integration of the SCCI acquisition resulted in
operating difficulties that limited cash flow or if the company
were not able to adequately address the transition of the HIH
facilities before reimbursement were materially affected.  If any
combination of these factors resulted in a reduction in adjusted
cash flow from operations and adjusted free cash flow to adjusted
debt to levels below 5% and 3%, respectively, Moody's would
consider downgrading the ratings.

Pro forma for the proposed transaction and giving effect to the
new credit facilities, Triumph will initially have cash flow
coverage of debt that is strong for the B2 category.  Moody's
estimates that for the twelve months ended June 30, 2005, adjusted
operating cash flow to adjusted debt would have been approximately
11% and adjusted free cash flow to adjusted debt would have been
approximately 7%.  

However, Moody's believes these coverage metrics will be
constrained in future periods due to our expectation of increased
spending related to the transition of HIH facilities affected by
the new regulations and changes in Medicare reimbursement
resulting from the LTACH DRG re-weighting.

Pro forma EBIT coverage of interest would have been approximately
1.4 times for the twelve months ended June 30, 2005.  Adjusted
debt to adjusted EBITDA would have been approximately 5.3 times.
Adjusted debt to adjusted book capitalization pro forma for the
transaction is expected to be approximately 97% at June 30, 2005.

Moody's expects Triumph to have adequate liquidity pro forma for
the acquisition and incurrence of debt.  Triumph will have
approximately $5 million of cash on hand and access to a $35
million revolving credit facility.  Free cash flow will be
constrained in the near-term as the company's two de novo
facilities ramp up and the company implements transition plans for
the five acquired HIH facilities that are expected to be affected
by the change in the Medicare regulations.

The senior secured rating is placed at the corporate family rating
to reflect the fact that the senior secured debt comprises over
60% of the debt capitalization of Triumph.  The second lien term
loan is notched two levels below the corporate family rating
reflecting its second priority behind the revolver and first lien
term loan and the limited collateral coverage and a lack of
tangible net worth of the company on an adjusted leverage basis.
The rating also incorporates expectations of recovery in distress
using estimates of enterprise value under reasonable stress
scenarios.

Ratings remain subject to review of final documentation.

Headquartered in Houston, Texas, Triumph Healthcare operates five
free-standing and one HIH LTACHs, all in the Houston, Texas
marketplace.  For the twelve months ended June 30, 2005 Triumph
generated revenues of approximately $150 million.  Pro forma for
the twelve months ended June 30, 2005, the combined Triumph and
SCCI would have posted revenue of approximately $285 million.


UAL CORP: Committee Gets Court Nod on Farr & Taranto as Counsel
---------------------------------------------------------------
The Hon. Eugene R. Wedoff of the U.S. Bankruptcy Court for the
Northern District of Illinois authorizes the Official Committee of
Unsecured Creditors appointed in UAL Corporation and its debtor-
affiliates' chapter 11 proceedings to retain Farr & Taranto of
Washington, D.C., as special counsel, effective as of July 13,
2005.  Farr & Taranto's fees will be capped at $250,000 without
prejudice to the Committee's right to seek a waiver of the
financial 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. 95; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


UAL CORP: Flight Attendants Demand Change of Management
-------------------------------------------------------
On July 28, 2005, United Airlines flight attendants staged
coordinated demonstrations at more than 20 locations on three
continents, calling for removal of United's current management
and for a competing business plan.

The demonstrations were triggered after United turned its
contractually mandated defined benefit pension plan over to the
Pension Benefit Guaranty Corporation on June 30, 2005.

"Current United management has held its employees and creditors
hostage in Chapter 11 for nearly 1000 days," said Greg
Davidowitch, president of the Association of Flight Attendants-
CWA, AFL-CIO at United, said in a press release.  "We're hitting
the streets around the globe to demonstrate our resolve.  We want
our pensions back, and we want this management team out."

After 32 months in bankruptcy, United Airlines has little more to
show than a single-minded effort to destroy labor contracts and
career employees, increased executive bonuses and failed business
plans.  Current management filed three failed business plans to
the government resulting in denial of a federal loan guarantee,
failed negotiations with aircraft lessors, failed to institute
Salaried and Management concessions allocated as part of their
own plan for cost savings, failed to cut non-labor costs that are
nearly $1 billion greater than the larger American Airlines, and
have yet to produce a plan for the airline's reorganization.

Congress passed a law effective this year that limits the period
of time a debtor should retain the exclusive right to propose a
plan to 18 months.  While the law does not retroactively apply to
United's three-year old bankruptcy, it evidences Congressional
conclusion that other parties should be permitted to present
alternative plans after a limited period of debtor exclusivity.  
United has extended its period of exclusivity nine times.

"These executives are a dead weight dragging our airline down,"
said Davidowitch.  "We believe interested, qualified investors
and executives are eager to work with the employees of this
airline who have proven our dedication to its success time and
again.  Flight attendants, other employees and creditors clearly
deserve the opportunity to see competing plans."

"New money, new ideas and new management are needed to break
through the maniacal mesmerism this management imposes on our
airline," said Davidowitch.  "Only with competing reorganization
plans that recognize the value of front-line employees will we
see the real potential of this airline realized when we emerge
from bankruptcy."

Flight Attendants picketed at these locations:

  1. Boston Logan International Airport,
  2. Chicago O'Hare International Airport,
  3. Denver International Airport,
  4. Frankfurt International Airport,
  5. Hong Kong International Airport,
  6. Honolulu International Airport,
  7. Las Vegas McCarran International Airport,
  8. Los Angeles International Airport,
  9. Narita International Airport,
10. Newark Liberty International Airport,
11. New York LaGuardia International Airport,
12. Champs Elysee, Paris,
13. Palm Spring International Airport,
14. San Francisco International Airport,
15. SEATAC International Airport,
16. Washington Dulles International Airport, and
17. Washington National Airport

                        Debtors' Statement

     CHICAGO, Illinois -- July 28, 2005 -- In response to actions
taken today by the Association of Flight Attendants (AFA), United
issued the following statement:

     The actions the AFA leadership has threatened are illegal
     and will not be tolerated.  United will do whatever is
     necessary to ensure the continued smooth operation of the
     company for our customers.

     While every other union at United has recognized the need to
     terminate and replace pension plans in order for United to
     successfully complete its restructuring, the AFA leadership
     has simply refused to accept reality and negotiate a
     replacement plan on behalf of its members.

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


USGEN NEW ENGLAND: Wants Court to Nix Brascan Energy's Claims
-------------------------------------------------------------
Before the Petition Date, USGen New England, Inc., and Pontook
Operating Limited Partnership were parties to a long-term power
purchase agreement.  Pursuant to the Pontook Agreement, USGen was
obligated through 2017 to purchase, at a fixed rate, the net
electric output produced by a hydroelectric generating facility
in Dummer, New Hampshire.  USGen continued to purchase electric
power from Pontook until it rejected the Pontook Agreement
effective as of November 18, 2003.

Leslie J. Polt, Esq., at Blank Rome LLP, in Baltimore, Maryland,
relates that subsequent to the rejection, Great Lakes Hydro
America, LLC, and Great Lakes Hydro Management, LLC, purchased
Pontook from Pontook Hydro, Inc., and Hafslund Power Corporation.

USGen believes that Pontook purported to assign the Pontook
Agreement to the Great Lakes Entities in connection with the
Pontook Sale.  The Great Lakes Entities now own and operate the
Electric Facility.

The Great Lakes Entities entered into a power purchase agreement
with an affiliate, pursuant to which the Great Lakes Affiliate
purchases from the Great Lakes Entities the net electric output
produced at the Electric Facility.

USGen believes that the Great Lakes Affiliates has been reselling
and will continue to resell electric power purchased under the
Affiliate Agreement at or in excess of the rate set forth in the
Pontook Agreement.

                         Claims Transferred

According to Ms. Polt, Pontook's claims for unpaid amounts of
electric power provided to USGen under the Pontook Agreement were
reserved by and transferred to the Pontook Sellers in connection
with the Pontook Sale.  Pontook purported to assign to Brascan
Energy Marketing, Inc., effective as of the Rejection Date, all
right, title and interest in and to any claim for damages arising
out of the rejection.

On January 8, 2004, Brascan, as agent for the Pontook Sellers,
filed a proof of claim asserting $240,947 for amounts owing to
Pontook under the Pontook Agreement.  USGen does not dispute the
amount of the Prepetition Receivables Claim.

The first proof of claim also included a $10,162,400 claim for
amounts arising out of the rejection of the Pontook Agreement.
On May 6, 2005, Brascan amended its proof of claim where it
asserted a new rejection damages claim for $24,934,700.

                  USGen Disputes Rejection Claims

Ms. Polt explains that USGen's assessment of the Brascan
Rejection Claims is not complete.  The issues raised by Brascan
will require significant discovery and further briefing.  USGen
anticipates that it will request a scheduling order establishing
discovery and briefing schedules.  USGen will consult with
Brascan in advance to attempt to reach an agreement on a
consensual scheduling order.

Notwithstanding USGen's ongoing assessment of the Brascan
Rejection Claims, it has identified at least two grounds for
disallowing in whole or at the very least significantly reducing
the Brascan Rejection Claims:

    (1) The Second Rejection Damages Claim was untimely filed.

        Ms. Polt contends that the Second Rejection Damages Claim
        was filed long after the Bar Date for filing proofs of
        claim.  The Second Rejection Damages Claim can only be
        considered timely filed if it can be fairly characterized
        as an amendment of a timely filed proof of claim.

        An amended proof of claim filed after the bar date should
        not relate back to a timely filed proof of claim unless
        the amended claim is "reasonably within the amount" of the
        timely filed claim, Ms. Polt continues.  In addition, the
        length of delay must be reasonable.  Ms. Polt notes that
        the Second Rejection Damages Claim is almost $15 million
        more that the First Rejection Damages Claim.  Furthermore,
        the length of delay was 16 months after the Bar Date.

    (2) Based on actual sales or market prices of electric power
        since the Rejection Date, as well as expected future sales
        or market power, there are little, if any, aggregate
        rejection damages under the Pontook Agreement.

        The Pontook Agreement expressly precludes the parties from
        recovering incidental, indirect or consequential damages
        resulting from non-performance, including claims in the
        nature of lost revenues, income or profits.

        There are little, if any, aggregate expectation damages
        arising out of the rejection of the Pontook Agreement.
        Ms. Polt asserts that Pontook or the Great Lakes Entities
        have substantially or fully recovered or otherwise
        mitigated damages under the Pontook Agreement.
        Furthermore, based on current estimates of future prices
        for electric power at the Delivery Point, the Great Lakes
        Entities no doubt will continue to cover or otherwise
        fully mitigate damages under the Pontook Agreement.

Accordingly, USGen asks the Court to disallow or reduce the
Brascan Rejection Claims.

Headquartered in Bethesda, Maryland, USGen New England, Inc., an
affiliate of PG&E Generating Energy Group, LLC, owns and operates
several electric generating facilities in New England and
purchases and sells electricity and other energy-related products
at wholesale.  The Debtor filed for Chapter 11 protection on July
8, 2003 (Bankr. D. Md. Case No. 03-30465).  John E. Lucian, Esq.,
Marc E. Richards, Esq., Edward J. LoBello, Esq., and Craig A.
Damast, Esq., at Blank Rome, LLP, represent the Debtor in its
restructuring efforts.  When it sought chapter 11 protection, the
Debtor reported assets amounting to $2,337,446,332 and debts
amounting to $1,249,960,731.  The Debtor filed its Second Amended
Plan of Liquidation and Disclosure Statement on March 24, 2005
(PG&E National Bankruptcy News, Issue No. 47; Bankruptcy
Creditors' Service, Inc., 215/945-7000)


VARIG S.A.: Wants $5 Mil. Wire to GE Commercial Aviation Returned
-----------------------------------------------------------------
Vicente Cervo and Eduardo Zerwes, Representatives of Varig S.A.,
inform the United States Bankruptcy Court for the Southern
District of New York that GE Commercial Aviation Services LLP
wrongfully instructed JPMorgan Chase Bank, N.A., to distribute
funds out of the Foreign Debtor's JPMorgan account as accelerated
payment of a prepetition debt.

            The Debtors' Agreements with GE Commercial

The Foreign Representatives explain that as of 2003, the Foreign
Debtors leased 36 aircraft from a group of 17 lessors.  GE
Commercial managed the Aircraft Leases on the Creditors' behalf.  
After a series of defaults under the Aircraft Leases, GE
Commercial, the Creditors, and Debtors VARIG, S.A., and Rio Sul
Linhas Aereas, S.A., entered into a series of settlement
agreements, each dated as of March 5, 2004, providing for the
return of the Aircraft and the issuance of promissory notes for
approximately $121.5 million.

Moreover, pursuant to a Security Assignment between VARIG and GE
Commercial -- as collateral agent for the Creditors - VARIG
assigned its right to receive remittance of payments from
International Air Transport Association and the IATA Currency
Clearing Service due from sales of air travel and related services
in France and the United Kingdom as collateral security for
VARIG's obligations under the Promissory Notes.

As a member of IATA, VARIG participates under applicable IATA
Resolutions in IATA's Industry Settlement System and receives
remittance of payments from IATA arising from various travel
agents for sales of air travel and related service through ICCS.
Pursuant to each Settlement Agreement, a default in VARIG's part
purports to accelerate the entire amount owed by VARIG to GE
Commercial, which amount would otherwise be payable in monthly
installments through December 2009.

Furthermore, under an Account Control Agreement, dated May 20,
2004, among VARIG, GE Commercial, and JPMorgan -- as depository
bank -- GE Commercial has exclusive control of a bank account
held in JPMorgan in which the IATA receivables are sent.

Absent a default under all the Agreements, JPMorgan would remit
funds in the Account to VARIG and GE Commercial on a monthly
basis.

                  GE Commercial's Default Notice

GE Commercial served a notice on JPMorgan declaring a default --
as a result of the Foreign Debtors' bankruptcy in Brazil and the
Section 304 Proceedings -- under the Settlement Agreements.

In accordance with the instructions in the Default Notice, yet
without notice to the Foreign Debtors, JPMorgan wired $5,076,961
to GE Commercial.

The Foreign Representatives note that the monthly payment that
would have been payable to GE Commercial, absent the acceleration
under the Settlement Agreements and the filing of the
reorganization proceedings in Brazil, was $1,031,548, due
on June 24, 2005.

The total amount disbursed by JPMorgan constituted the proceeds of
the Foreign Debtors' accounts receivable.

Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP,
in New York, asserts that without access to the accounts
receivable that are now in GE Commercial's possession, the
Foreign Debtors will be hard-pressed to pay their current
obligations to aircraft lessors and other suppliers of goods and
services.

                      VARIG's Demand Letter

On June 28, 2005, VARIG sent GE Commercial a letter demanding a
turnover and accounting of funds.  The Demand Letter also advised
GE Commercial that it was in violation of the orders entered by
the U.S. Bankruptcy Court, including the Preliminary Injunction,
and the Brazilian Court, including the Initial Stay Order.  The
Demand Letter further directed GE Commercial to immediately cease
and withdraw the Default Notice.

                 Debtors Want the Funds Returned

Mr. Antonoff maintains that permitting creditors to attach
receivables as payment for prepetition debts will result in
certain creditors being favored to the detriment of the others.  
The action will also deplete the Foreign Debtors' cash flow and,
therefore, place their ability to present and implement a
reorganization plan at serious risk.

Accordingly, the Foreign Representatives ask Judge Drain to
direct GE Commercial to immediately turn over the receivables in
its possession.  The Foreign Representatives also ask the Court
to obligate JPMorgan to turn over the proceeds of VARIG
receivables now deposited at JPMorgan.

                            Responses

(1) GE Commercial

Richard P. Krasnow, Esq., at Weil, Gotshal & Manges LLP, in New
York, argues that by their turnover request, the Foreign Debtors
seek to strip the Creditors of their property rights and turn
them into unsecured creditors of a potentially administratively
insolvent estate.

Mr. Krasnow asserts that GE Commercial's security interest in the
Cash Collateral has been duly registered and perfected in
accordance with applicable law.  The validity and perfection of
the security interests is not disputed by the Foreign Debtors.

GE Commercial reminds Judge Drain that the stay under the
Brazilian law enjoins aircraft lessors from repossessing the
VARIG aircraft.  Similarly, the ancillary proceedings under
Section 304 of the Bankruptcy Code and the temporary restraining
order also enjoin parties from taking any action that would be in
violation of the Aircraft Injunction.  As neither GE Commercial
nor the Creditors currently lease aircraft to the Foreign
Debtors, they are not among the parties subject to the Aircraft
Injunction and the TRO.

Mr. Krasnow further maintains that pursuant to the Settlement
Agreements, upon filing for reorganization, all amounts under the
Notes became immediately and automatically due and payable, in
full, without any action by GE Commercial or the Creditors, and
without notice to the Foreign Debtors.

"Though the enforcement of a so-called ipso facto default against
a chapter 11 debtor may be barred by section 365(e) of the
Bankruptcy Code, the enforceability of such a default under New
York law against a party not in chapter 11 is beyond
peradventure," Mr. Krasnow says.

GE Commercial informs Judge Drain that, in accordance with the
Agreements, it applied the disbursed funds from JPMorgan to
reduce the Creditors' secured claim under the Settlement
Agreements.  GE Commercial points out that the delivery of the
Default Notice, remittance of the IATA Transfers and application
of funds were not enjoined by Brazilian law, the Aircraft
Injunction, or, by extension, the TRO.

Mr. Krasnow believes that substantially all or a significant
portion of the Cash Collateral comprising the IATA Transfers
related to revenues generated prior to the Petition Date.  Under
Brazilian law, GE Commercial's security interest in the Cash
Collateral is not affected by the reorganization cases and
continues to attach to receivables postpetition.

In light of the limits on the scope of the Stay, the Foreign
Debtors filed a new petition in the Brazilian court requesting a
separate order to enjoin certain banks and institutions from
taking specific actions in Brazil.  Mr. Krasnow notes that the
Injunction Order does not name GE Commercial, the Creditors or
JPMorgan and, therefore, has no impact on them.

In addition, Mr. Krasnow argues that the Foreign Representatives'
Turnover Motion fails for procedural grounds as it does not
comport with Rule 7001 of the Federal Rules of Bankruptcy
Procedure.  On a substantive basis, Brazilian law does not
require the turnover of Cash Collateral held by GE Commercial or
JPMorgan.

GE Commercial asks Judge Drain to deny the Foreign
Representatives' request.

(2) JPMorgan

JPMorgan attests that, as of July 26, 2005, it continues to hold
$4,669,850, as Collateral, in an account under VARIG's name.

Kevin J. Smith, Esq., at Kelley, Drye & Warren, LLP, in New York,
tells the Bankruptcy Court that, pursuant to its rights and
duties under the Account Control Agreement, JPMorgan is not
taking any action to transfer the Collateral to either GE
Commercial or VARIG.  Also, pursuant to JPMorgan's duty as
depository bank, it will continue to keep all property held in
escrow until it will be directed otherwise by the Court.

Under the Account Control Agreement, JPMorgan asserts that VARIG
should reimburse the bank for all claims, losses and liabilities
arising in connection with its execution and performance of the
Account Control Agreement, or its following instructions from
VARIG or GE Commercial.

Gregory P. Shea, assistant vice president of JPMorgan's Worldwide
Securities Services department, says that, to the extent the
Court orders the funds maintained and held in the VARIG Account
be transferred to the Foreign Debtors' estate, reasonable
attorneys' fees and expenses must be deducted from that transfer
for JPMorgan's benefit.
                             
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)


VARIG S.A.: To Hire UBS As Restructuring Advisor
------------------------------------------------
According to Valor Economico newspaper, VARIG, S.A., will employ
UBS AG to advise the company on its reorganization plan.  UBS will
help the airline renegotiate its debt with creditors, sell some
assets and raise money with investors.

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)


VULCAN ENERGY: Moody's Rates Pending $288 Mil. Term Loan B at Ba2
-----------------------------------------------------------------
Moody's assigned a Ba2 rating to Vulcan Energy Corp.'s pending
$288 million 6-year senior secured Term Loan B.  Vulcan's sole
function is to hold 18% of Plains All-American Pipeline, L.P.'s
(PAA) common equity units and pro-forma 54.3% ownership of Plains
All American GP, LLC (PAAGP).  Moody's also assigned a Baa3 rating
to PAA's $150 million of 5.25% senior unsecured notes due 2015.  
The rating outlook is stable.

PAA (Baa3 senior unsecured rating, stable rating outlook) is a
public master limited partnership.  PAA is engaged in the
midstream crude oil activities of:

   * gathering;
   
   * transporting;
   
   * terminaling and storage;
   
   * marketing;
   
   * crude oil trading; and
   
   * marketing and storage of liquefied petroleum gas and other
     natural gas related petroleum products.

PAAGP holds the 2% general partnership interest in PAA and the
board of directors of PAAGP serves as the board of directors of
PAA.  Part of the TLB proceeds will fund Vulcan's purchase of
approximately 10.3% of PAAGP, giving Vulcan majority ownership of
PAAGP.  TLB permits Vulcan to sell PAA units but such proceeds are
pledged to TLB lenders and must be reinvested in PAA common units
or used for permanent TLB debt reduction within 180 days.

Given the very similar economic interests of Vulcan and PAA and
Vulcan's and PAA management's effective combined control of PAA
and PAAGP, Moody's has consolidated Vulcan and PAA into one credit
group.  Previously, Mood's had rated Vulcan and PAA as two
separate corporate families but henceforth will rate both entities
as part of one corporate family.  Accordingly, Moody's has
upgraded Vulcan's Corporate Family Rating (formerly the Senior
Implied Rating) from Ba2 to Ba1, reflecting Moody's view of the
consolidated PAA and Vulcan credit.  The group's corporate family
rating is placed at the Vulcan level, the uppermost rated entity
in the group.

While in force, a voting rights agreement does dampen Vulcan's
ability to elect or remove PAA's independent directors.  However,
Vulcan can terminate the VRA upon a one-year notice, or
immediately if:

   1) private equity firms Kayne Anderson and ENCAP both sell
      their minority PAAGP interests;

   2) Greg Armstrong ceases to be PAA's chief executive officer;
      or

   3) Harry Pefanis ceases to be PAA's chief operating officer.

In addition to Vulcan's 54.3% ownership, the remaining interests
in PAAGP are owned by private equity funds (including Kayne
Anderson and ENCAP) and PAA management.  Vulcan itself is 88%
owned by Vulcan Capital (a private investment firm owned by Paul
G. Allen), 10% by Jim Flores, and 2% by John Raymond.

Additionally, Vulcan and PAA are currently negotiating for PAA to
also conduct all of Vulcan's administrative, accounting, treasury,
finance, tax, and legal activities.

TLB proceeds will fund:

   1) retirement of a $75 million senior unsecured term loan
      guaranteed by Paul G. Allen;

   2) repayment of the $157 million balance of the existing $175
      million Term Loan B due 2010;

   3) a $44 million acquisition of a 10.3% interest in PAA's
      general partner from Sable Investments;

   4) a $10 million capitalization of a new affiliate into which
      Vulcan will divest its small, high cost oil and gas
      reserves; and

   5) pay transaction fees and expenses and fund a small working
      cash balance.

Sable is selling its 19% interest in PAAGP to Vulcan, PAA
management, and other private investors for $81.3 million pursuant
to a right of first refusal for their pro-rata shares of Sable's
PAAGP position.  Vulcan believes it will acquire a 10.3% PAAGP
position from Sable with the remaining 8.7% going to PAAGP's other
investors.

Vulcan's EBITDA consists of PAA cash distributions on general
partner and common units.  Pro-forma Vulcan debt will approximate
$288 million and we estimate that its 2005 pro-forma EBITDA will
approximate at least $40 million and $45 million in 2006.
Moody's expects roughly $2 million of Vulcan operating expense and
$15 million to $17 million of pro-forma 2005 Vulcan interest
expense.  Vulcan's asset coverage of debt is greatly enhanced by
first security in PAA common units now worth roughly $600 million
and the 54.3% of the 2% PAAGP interest, valued in excess of $200
million.

Pro-forma Vulcan and PAA long-term debt at June 30, 2005 will
approximate $1.241 billion and 2005 PAA EBITDA (before mark-to-
market and non-cash incentive plan expenses) is expected to be in
the $355 million to $385 million range, indicating consolidated
Vulcan and PAA Long-Term Debt/EBITDA in the range of 3.4x.

However, including short-term debt primarily associated with
contango crude oil inventory storage, NYMEX cash margin, and
hedged liquid petroleum gas inventory, Total Debt/EBITDA would be
in the 5.6x range.  Moody's expects roughly $90 million in
consolidated interest expense, capital spending of $200 million
(including $20 million maintenance), and discretionary PAA unit
distributions of roughly $195 million.

Vulcan's ratings are supported by:

   * an adequate Vulcan cash flow outlook relative to Vulcan's
     ratings;

   * ample asset coverage of debt by a first lien on equity of the
     subsidiary that holds the PAAGP interest and on common equity
     units currently valued in excess of $800 million in the
     aggregate;

   * a TLB cash sweep that may accelerate Vulcan debt reduction;
     and

   * by the fact that Vulcan, PAA management, and PAA board
     members have sufficient combined ownership and economic
     interests to manage PAA operations, financial, and cash
     distribution policy in a manner supportive of the combined
     Vulcan/PAA debt burden.

TLB collateral coverage is roughly 250%, providing significant
cushion for value collapse if PAA ever needed to cut its units
distributions.

The Vulcan/PAA ratings are generally supported by:

   * strong PAA management;

   * adequate expected consolidated leverage for the ratings,
     excluding PAA's contango debt discussed below;

   * PAA's record of value-adding growth, rising scale, and
     regional diversification across many oil producing basins and
     operating functions;

   * a record of generating sound results in the volatile crude
     oil trading and marketing portion of PAA's business;

   * rising access to imported crude oil that, so far, has been
     sufficient to offset natural oil production declines around
     PAA's system (though insufficient so far to organically grow
     crude oil throughput);

   * PAA's strategically important crude oil storage assets at
     Cushing, Oklahoma;

   * PAA's historic access to acquisitions that are gradually
     building an ever-larger system in the petroleum midstream
     business; and

   * sound back office and hedging controls for its trading and
     marketing activities.

The combined Vulcan/PAA credit is also supported by PAA's proven
access to the equity market and generally prudent leverage policy.
PAA also has had a very consistent record of financing
acquisitions with adequate equity funding.  The MLP market has
also matured to a point where it can more readily absorb the ever-
larger units offerings when acquisitive MLP's like PAA need to
pro-actively launch to fund acquisitions while remaining
comfortably in the investment grade zone.

Vulcan's ratings are restrained by:

   * TLB's structural subordination to $953 million of PAA long-
     term debt and $821 million of self-liquidating short-term
     debt primarily secured by contango crude oil inventory; and

   * fairly low cash flow coverage of Vulcan debt balances.

The Ba1 Vulcan/PAA Corporate Family Rating is restrained by:

   * significant consolidated leverage within the group, including
     Vulcan's roughly $290 million of debt;

   * the fact that somewhat over 50% of PAA's EBITDA is generated
     by the more volatile crude oil gathering, storage, trading,
     and marketing segment;

   * PAA's very heavy cash outlays for its combined MLP units
     distributions, interest expense, and capital spending;

   * PAA's inherent acquisition and acquisition funding risk;

   * the fact that second quarter EBITDA from its durable pipeline
     business did not grow sequentially; and

   * that second quarter growth was generated by PAA's very large,
     volatile, credit intensive and confidence-sensitive hedged
     crude oil trading and marketing segment, also surging in this
     time of extraordinary contango in the oil futures market.

PAA runs a very large crude oil gathering, marketing, storage, and
trading business that conducts large scale hedged trading to
capture regional, timing, or quality basis differentials, to
profit from price volatility, and to capture storage opportunities
when the forward curve moves from backwardation to contango.  That
business is fairly opaque and must be conducted under tight risk
management policies and procedures.  The performance and specific
activities driving the performance of the trading and marketing
business are quite dependent on whether the forward crude oil
price curve is in backwardation, contango, in transition from one
to the other, or if oil prices are comparatively volatile or
comparatively stable.

Currently, Moody's would not want PAA's hedged leveraged contango
storage volumes to grow from current volumes that have required
funding of approximately $800 million in short term debt.  While
PAA profits substantially from that activity, the inventory is
hedged on NYMEX, typical hedged transactions have a duration of
one to two months (enabling a fairly quickly wind down of the
business), and the debt will self-liquidate as storage volumes
roll off when the forward curve flattens and moves to
backwardation, the activity is not risk free, it requires back
office and hedging precision and, to a degree, uses a portion of
the bank and bond markets appetite for PAA credit.

Nevertheless, PAA has built an increasingly integrated, large,
geographically diversified business.  It has done this with a
patient series of adequately equity-funded acquisitions of mid-
stream assets and a modest degree of organic growth.  Its hard
assets consist of crude oil gathering, pipeline, storage, and
terminaling assets that move crude oil from the producing and
importing regions along the Gulf Coast, the and the producing
regions in the Southwest, Mid-continent, West and East Texas,
California, and Canada to refining centers along the Gulf Coast
and in the Rocky Mountains, Midwest, and California.

Vulcan's principal pro-forma assets, cash flow source, and TLB
collateral include pro-forma 54.3% ownership of PAAGP and 18%
(12.4 million units) of PAA's common equity units.  PAA's
management separately holds a further pro-forma 4.9% of PAAGP,
adding to Vulcan's effective control over PAA operations and key
decisions.

PAA's equity market capitalization was recently $3.460 billion.
PAA may generate EBITDA (before non-cash mark-to-market and other
non-cash expense) in the range of $355 million to $385 million for
2005, though in a more normal market environment it would likely
have generated in the range of a more sustainable $315 million to
$330 million.  When Moody's rated Vulcan's initial secured Term
Loan B ($175 million) in March 2004, the PAA equity market
capitalization was $1.9 billion and pro-forma 2003 EBITDA was
approximately $190 million, pro-forma for the Capline acquisition.

Pro-forma June 30, 2005 Vulcan debt totals $288 million, supported
by approximately $216 million of book equity, roughly $40 million
of pro-forma 2005 EBITDA, and first lien collateral currently
valued in excess of $800 million.  At PAA's expected 2005 pro-
forma distribution of $2.60/unit, Vulcan's limited partner units
would yield $32 million of cash flow.  Vulcan's 54.3% interest in
the general partner would generate at least another $10 million of
cash flow.

The need for notching between the Ba1 Corporate Family Rating and
the TLB rating is driven by several factors.  TLB is structurally
subordinated to all debt and other liabilities at PAA.  PAA can
reduce cash distributions if faced with reduced cash flow, cutting
Vulcan cash flow and hurting TLB collateral values.  TLB is also
exposed to repeated PAA acquisition event and releveraging risk
and PAA performance volatility could arise from its very large low
margin crude oil marketing and trading business.

PAA's midstream activities move roughly 2.5 million barrels of
crude oil per day at an average EBITDA margin approximating
$0.39/barrel to $0.42 per barrel based on expected 2005 EBITDA,
but approximately $0.34/barrel to $0.36/barrel in more normal
market conditions.  A significant but minority portion of that
volume is driven by the natural flow of regional crude oil volume
from producing regions to consuming regions, while a majority of
that volume is initiated by PAA through its marketing activity.
Volumes are split between:

   * general pipeline tariff throughput;
   * All-American Pipeline in California;
   * crude oil gathering;
   * opportunistic and crude oil bulk purchases;
   * crude oil terminal throughput; and
   * third party storage volumes.

Vulcan Energy Corporation is headquartered in Seattle, Washington
and Plains All-American Pipeline, L.P. is headquartered in
Houston, Texas.


WESTPOINT STEVENS: Wants to Hire Lester Sears to Wind-Down Estate
-----------------------------------------------------------------
As previously reported, the U.S. Bankruptcy Court for the Southern
District of New York approved the sale of substantially all of
WestPoint Stevens, Inc. and its debtor-affiliates' assets to
Textile Co., Inc.  The Sale Order authorized the Debtors' entry
into an asset purchase agreement, dated June 23, 2005, with the
Purchaser.  In accordance with the APA, notice of closing of the
Sale was provided to parties-in-interest on July 19, 2005.  The
closing is already scheduled on August 8, 2005.

As of the Closing Date, the Debtors will have transferred all of
their operations and employees to the Purchaser and will have
retained only those de minimis assets not acquired by the
Purchaser.  Pursuant to the APA, the Purchaser will reimburse up
to $3 million in wind-down expenses.  All expenses are subject to
the Purchaser's approval.

John J. Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, in New
York, relates that pursuant to the Debtors' Directors & Officers
Insurance Policy, as of the Closing Date, coverage will cease,
subject to a run-off or "tail" policy for acts occurring prior to
the Sale.  The Debtors' officers and directors will only be
covered for claims arising on or before August 8, 2005.

Thus, the Debtors' directors and officers will resign effective as
of August 8.  For the Debtors to wind-down their estates and take
the necessary corporate actions, the Debtors need the Court to
appoint a designated responsible officer as of August 8, 2005.

Accordingly, the Debtors ask the Court to designate Lester D.
Sears, their chief financial officer, as the Responsible Officer
to oversee the wind-down of their estates.

The Debtors assure the Court that Mr. Sears is highly qualified to
serve as the Court-designated Responsible Officer.  Mr. Sears has
served as the Debtors' chief financial officer and senior vice
president - finance since April 16, 2001, and is intimately
familiar with the Debtors' business and their Chapter 11 cases.
He is aware of the requirements necessary to wind-down the
Debtors' estates and possesses the necessary knowledge to do so
efficiently and effectively.  As a Responsible Officer, Mr. Sears
will render these services, including, but not limited to:

    * payment of professional fees and the holdback amounts as
      authorized by Court order;

    * coordination of the turnover of property subject to rejected
      executory contracts or abandonment or liquidation of any
      retained assets;

    * overseeing the filing of final tax returns, SEC documents
      and other corporate dissolution documents; and

    * any additional corporate actions as necessary to carry out
      the wind-down.

The Debtors will reimburse Mr. Sears for any out-of-pocket
expenses incurred.  The Debtors seek the Court's permission to
protect Mr. Sears from any claims or liabilities arising from
actions taken in his capacity as the Court-designated Responsible
Officer.  This is especially important given that the Debtors do
not have any insurance to cover potential claims arising after the
closing, Mr. Rapisardi says.

Headquartered in West Point, Georgia, WestPoint Stevens, Inc., --
http://www.westpointstevens.com/-- is the #1 US maker of bed  
linens and bath towels and also makes comforters, blankets,
pillows, table covers, and window trimmings.  It makes the Martex,
Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux
brands, as well as the Martha Stewart bed and bath lines; other
licensed brands include Ralph Lauren, Disney, and Joe Boxer.
Department stores, mass retailers, and bed and bath stores are its
main customers.  (Federated, J.C. Penney, Kmart, Sears, and Target
account for more than half of sales.) It also has nearly 60 outlet
stores.  Chairman and CEO Holcombe Green controls 8% of WestPoint
Stevens.  The Company filed for chapter 11 protection on
June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532).  John J.
Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents the
Debtors in their restructuring efforts. (WestPoint Bankruptcy
News, Issue No. 51; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


WILD OATS: Earns $900,000 in Second Quarter 2005
------------------------------------------------
Wild Oats Markets, Inc. (Nasdaq: OATS) reported financial results
for the second quarter and first half ended July 2, 2005.

Net sales in the second quarter of 2005 were $284.6 million, up
13.1 percent compared with $251.7 million in the second quarter of
2004.  The sales gain was driven by strong performance in the Wild
Oats chain and total square footage growth of 8.6 percent, as the
Company ended the quarter with 2.53 million square feet.  Weighted
average square footage in the second quarter was 2.52 million
square feet, an increase of 12.5 percent compared to weighted
average square footage of 2.24 million in last year's second
quarter.

The addition of four new stores and two relocated stores in the
first half of 2005 helped to drive the increase in net sales, as
well as continued strong sales momentum in the Company's Wild Oats
Natural Marketplace chain.  First half 2005 net sales were
$562.7 million, a 9.2 percent increase compared to $515.5 million
in the same period last year.

Comparable store sales in the second quarter of 2005 were better
than expected at positive 5.4 percent compared with positive 1.5
percent in the second quarter of 2004.  Excluding the Company's
Southern California stores, which continued to lap difficult
strike-related comparisons through the end of the second quarter,
comparable store sales were positive 7.9 percent compared to 0.1
percent in last year's second quarter.  Comparable store customer
traffic in the second quarter increased 0.3 percent and comparable
store average transaction size per customer increased 5.0 percent.  
Second quarter comparable store sales were bolstered by the
Company's Wild Oats Natural Marketplace stores, which continued
their accelerating sales momentum started in the fourth quarter of
2004.  As a result of year-to-date sales performance, the Company
expects comparable store sales for the full year to be at the high
end of its previously stated 3.0 percent to 4.0 percent range.

"We are very pleased with the continued strengthening of our sales
momentum throughout the first half of the year," said Perry D.
Odak, President and Chief Executive Officer of Wild Oats Markets,
Inc.  "Now that we're into the third quarter and the lapping of
the Southern California grocery strike is behind us, we expect our
comparable store sales to be solid throughout the remainder of the
year.  Additionally, our Wild Oats branded products rollout
continues to exceed our expectations and is producing very strong
sales, which is also contributing to our gross margin
improvement."

As a result of strong sales, a sequential increase in gross
margins and a higher store contribution, net income was $900,000,
compared with a net loss of $300,000 in the same period last year.  
The net loss for the first half of 2005 was $200,000, compared
with net income of $1.7 million in the first six months of 2004.   
Due to the improvement in the second quarter, the Company has
increased guidance for its full-year 2005 EPS to be in the $0.02
to $0.04 per share range, which is up from the range of break-even
to $0.03 given previously.

Net income in the second quarter of 2005 was adversely affected by
approximately $1 million pre-tax in restructuring charges and
accelerated depreciation for the closure of facilities.  In the
second quarter of 2004, net income was adversely affected by
$700,000 in accelerated depreciation for the closure of
facilities, which offset a restructuring credit in the quarter.  
Net income for the first half of 2005 was negatively impacted by
several items totaling $4.1 million, or $0.14 per share.  Included
was $2.9 million related to asset write-offs, restructuring
charges and accelerated depreciation for the closure or relocation
of facilities.  Also included were $0.6 million in incremental
accounting and legal fees related to the March 2005 lease
restatement, and $0.6 million related to the write off of loan
amortization fees, as a result of the termination of the Company's
former credit facility.  Net income in the first half of 2004 was
adversely affected by $2.8 million, or $0.06 per share, related to
restructuring charges and accelerated depreciation for the closure
of facilities.

"Our ability to better leverage our sales growth into
profitability is further evidence that we are beginning to strike
the right balance between gross margin, sales and earnings," said
Mr. Odak.  "Our return to profitability in the second quarter is
encouraging, and we will stay focused on growing our margins to
deliver continued profitable growth and strong shareholder value."

Wild Oats reported gross profit of $82.6 million in the second
quarter of 2005 compared with $73.4 million in the second quarter
of 2004.  As a percent of sales, gross profit improved
sequentially over the first quarter of this year by 10 basis
points, as the Company continues to rebuild its margins.  However,
in the year-over-year comparison, gross margin declined 20 basis
points to 29.0 percent in the second quarter of 2005 compared with
29.2 percent in the second quarter last year.  The decline in
gross margin year-over-year is largely due to the impact of having
a greater number of new stores in the portfolio than in the
previous year, which adversely affected gross margin in the second
quarter of 2005 by 40 basis points relative to the prior year
quarter.  Wild Oats generated gross profit of $162.8 million, or
28.9 percent of sales, in the first half of 2005 compared with
$150.8 million, or 29.3 percent of sales, in the comparable period
last year.

Since the beginning of the year, the sum of cash, cash equivalents
and short-term investments increased by $1.6 million to $43.4
million.  Capital expenditures were $12.0 million in the first
half of 2005, compared to $27.4 million in the same period last
year.  The Company expects full-year capital expenditures to be in
the $35.0 million to $40.0 million range.

                     Business Developments

Wild Oats Markets opened one new Henry's store in Temecula, Calif.
And relocated a Wild Oats store in the Portland, Ore. market in
the second quarter of 2005.  To date, these two new store openings
have produced the strongest grand opening results for the Company
in both the Henry's and Wild Oats chains.  Wild Oats Markets plans
to open an additional three new Henry's stores throughout the
remainder of the year, bringing the total number of new stores
opened in 2005 to nine.  Currently Wild Oats has 17 leases or
letters of intent signed for new stores opening in the remainder
of this year, in 2006 and 2007.  The Company also completed the
major remodeling of two San Diego Henry's stores in July and
expects it will complete major remodels of five additional stores
by the end of the year.

As previously announced, Wild Oats Markets is pursuing additional
retail opportunities whereby it is offering its Wild Oats branded
products in other retail environments.  To this end, in the second
quarter, Wild Oats opened the first of its five-store test of a
Holistic Health boutique in the Plymouth, Mass. Stop & Shop store.  
The second Wild Oats Stop & Shop department will open in the third
quarter in Fairfield, Conn.

                        New Executive

The Company has further strengthened its management team with the
addition of Dan Bolstad as Senior Vice President of Operations.  
Mr. Bolstad brings more than 25 years of operations and management
experience in the food retail industry.  Most recently he was
Senior Vice President of Operations for ShopKo Stores in Green
Bay, Wis., a 140-store chain of multi-department retail stores.  
Mr. Bolstad spent most of his career at Fred Meyer Stores, a
leading grocery and general merchandise retailer in the Pacific
Northwest, where he served as Senior Vice President of Operations
from 2001 to 2003.  Prior to that, he held various management
roles in store operations and merchandising during his 27-year
tenure at Fred Meyer.

Wild Oats Markets, Inc. -- http://www.wildoats.com/-- is a  
nationwide chain of natural and organic foods markets in the U.S.
and Canada.  With more than $1 billion in annual sales, the
Company currently operates 111 natural foods stores in 24 states
and British Columbia, Canada.  The Company's markets include: Wild
Oats Natural Marketplace, Henry's Farmers Markets, Sun Harvest and
Capers Community Markets.  

                        *     *     *

As reported in the Troubled Company Reporter on June 7, 2005,
Standard & Poor's Ratings Services assigned a 'CCC+' corporate
credit rating to Wild Oats Markets Inc. and a 'CCC+' rating to the
company's $115 million 3.25% convertible bonds due 2034.  These
notes were issued pursuant to rule 144A under the Securities Act.  
Proceeds from the note issuance were used to repurchase shares,
pay down debt, and other corporate expenses.  The outlook is
negative.

"The ratings reflect the company's thin cash flow protection, high
debt leverage, participation in a highly competitive industry,
inconsistent comparable sales track record, recent margin
deterioration, inherent risks associated with the company's
geographic expansion plans and relatively small store base," said
Standard & Poor's credit analyst Kristi Broderick.


WINN-DIXIE: Maria Burch Wants Stay Lifted to File Workers' Claim
----------------------------------------------------------------
Winn-Dixie Stores, Inc., employed Maria Chianti Burch on
December 19, 2004.  During the course and scope of her
employment, Ms. Burch sustained injuries in her right thumb while
slicing meat in the Deli.  However, Ms. Burch says, Winn-Dixie
did not send any report of First Injury to establish a claim
under the Florida Workers' Compensation Law.

"This claim should be presented and litigated in front of a Judge
of Compensation Claims, who is in a better position to apply the
applicable workers' compensation law to this claim," Clive N.
Morgan, Esq., in Jacksonville, Florida, asserts.

Moreover, Mr. Morgan continues, Ms. Burch is entitled to make a
claim and recover from the insurance that provides workers'
coverage to Winn-Dixie.  If Winn-Dixie is self-insured, Ms. Burch
has also the right to establish the extent of the claim through
the workers' compensation venue.

Accordingly, Ms. Burch asks the U.S. Bankruptcy Court for the
Middle District of Florida to lift the automatic stay to enable
her to file a workers' compensation claim and recover to the
extent of insurance coverage for the claim, or to establish the
value of her claim in the workers' compensation venue.

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).


* Large Companies with Insolvent Balance Sheets
-----------------------------------------------  
                                Total  
                                Shareholders  Total     Working  
                                Equity        Assets    Capital  
Company                 Ticker  ($MM)          ($MM)     ($MM)  
-------                 ------  ------------  -------  --------  
Abraxas Petro           ABP         (43)          99      (10)
Alliance Imaging        AIQ         (54)         608       14
Amazon.com Inc.         AMZN        (64)       2,601      782
AMR Corp.               AMR        (615)      29,494   (2,230)
Atherogenics Inc.       AGIX        (76)         234      213
Biomarin Pharmac        BMRN       (110)         167       (4)
Blount International    BLT        (220)         446      126
CableVision System      CVC      (2,035)      11,141      410
CCC Information         CCCG       (107)          96       20
Centennial Comm         CYCL       (486)       1,467      124
Choice Hotels           CHH        (185)         283      (36)
Cincinnati Bell         CBB        (593)       1,919       (8)
Clorox Co.              CLX        (346)       3,756     (158)
Compass Minerals        CMP         (69)         707      139
Conjuchem Inc.          CJC         (22)          32       28
Delphi Corp.            DPH      (3,880)      16,998      588
Deluxe Corp             DLX        (124)       1,508     (276)
Denny's Corporation     DENN       (263)         496      (82)
Domino's Pizza          DPZ        (574)         420      (21)
Echostar Comm-A         DISH     (1,830)       6,579      148
Emeritus Corp.          ESC        (133)         716     (106)
Foster Wheeler          FWLT       (520)       2,140     (213)
Freightcar Amer.        RAIL        (23)         208        8
Graftech International  GTI         (34)       1,006      264
I2 Technologies         ITWO       (199)         377       76
ICOS Corp               ICOS        (57)         243      160
IMAX Corp               IMAX        (40)         235       24
Investools Inc.         IED         (16)          56      (36)
Isis Pharm.             ISIS       (104)         176       61
Jorgensen (Earle)       JOR        (186)         659      186
Knoll Inc.              KNL          (3)         570       67
Kulicke & Soffa         KLIC        (44)         365      182
Lodgenet Entertainment  LNET        (72)         287       22
Maxxam Inc.             MXM        (671)       1,000       95
Maytag Corp.            MYG         (77)       3,019      398
McDermott Int'l         MDR        (140)       1,488      123
McMoran Exploration     MMR         (24)         405      143
Northwest Airline       NWAC     (3,273)      13,821   (1,204)
NPS Pharm Inc.          NPSP        (98)         310      215
ON Semiconductor        ONNN       (346)       1,132      270
Owens Corning           OWENQ    (8,225)       7,766    1,391
Primedia Inc.           PRM        (777)       1,883      164
Quality Distrib.        QLTY        (29)         386       15
Qwest Communication     Q        (2,663)      24,070    1,248
Revlon Inc. - A         REV      (1,102)         925       70
RH Donnelley            RHD        (186)       3,972      (57)
Riviera Holdings        RIV         (27)         223        5
Rural/Metro Corp.       RURL       (184)         221       18
SBA Comm. Corp. A       SBAC       (104)         854        9
Sepracor Inc.           SEPR       (201)       1,175      835
St. John Knits Inc.     SJKI        (52)         213       80
Tivo Inc.               TIVO         (1)         151       48
US Unwired Inc.         UNWR        (76)         414       56
Vector Group Ltd.       VGR         (31)         505      152
Verifone Holding        PAY        (120)         267       30
Vertrue Inc.            VTRU        (50)         451      (81)
Viropharma Inc.         VPHM         (6)         190       58
Warner Music Group      WMG        (137)       4,742     (506)
Worldspace Inc.-A       WRSP     (1,698)         592       47
WR Grace & Co.          GRA        (629)       3,464      876

                          *********

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 ***