TCR_Public/050826.mbx       T R O U B L E D   C O M P A N Y   R E P O R T E R

           Friday, August 26, 2005, Vol. 9, No. 202

                          Headlines

ACCESS FINANCIAL: Fitch Junks Rating on Three Certificate Classes
ACCESS WORLDWIDE: Balance Sheet Upside-Down by $3.86MM at June 30
AFFINITY TECHNOLOGY: Equity Deficit Widens to $1.78MM at June 30
AIRTRAN HOLDINGS: S&P Junks Senior Unsecured & Subordinated Debt
ALLMERICA FINANCIAL: Moody's Affirms Preferred Stock Rating at Ba2

ALOHA AIRGROUP: Can Set-Off Receivables & Credits with Honeywell
AMERICAN HEARTLAND: Receiver Hires Robison Johnston as Accountant
AMERICAN HEARTLAND: Investors Want Chapter 11 Case Dismissed
BALLY TOTAL: Amends Sr. Notes Offer & Seeks Consent from Lender
BIJAN H__________: Case Summary & 20 Largest Unsecured Creditors

BOMBARDIER INC: Reports Second Quarter Financial Results
BUEHLER FOODS: Gets Final Nod to Access $6 Million DIP Financing
CASCADES INC: Cutting 150 Jobs to Streamline Operations
CATHOLIC CHURCH: Court Suspends Portland's Payment of Legal Fees
CATHOLIC CHURCH: Six Claimants Want More Time to File Claims

CHARTER COMMS: Subsidiaries Launch $8.4 Billion Exchange Offers
CHARTER COMMS: Fitch Says Debt Swap Good for Credit Profile
CHARTER COMMS: S&P Places Junk Corporate Credit Rating on Watch
CINCINNATI BELL: S&P Rates Proposed $400 Million Term Loan at B+
CREDIT SUISSE: Fitch Junks Rating on Three Certificate Classes

CYCLELOGIC INC: Trustee Wants Dec. 15 as Claims Objection Deadline
CYCLELOGIC INC: Trustee Wants More Time to Remove Civil Actions
DIAMOND ENTERTAINMENT: May Sell Business Due to Liquidity Woes
DMX MUSIC: Wants Court to Approve Settlement With CVS Pharmacy
DMX MUSIC: Wants Until Nov. 11 to File Notices of Removal

ENRON CORP: Court Okays Turbine Claims Settlement Pacts
ENRON CORP: XL Trading Holds $9.5 Million Allowed Unsecured Claim
FACTORY 2-U: Court Approves Richard Franklin as Claims Auditor
FALCON PRODUCTS: Drafts Consensual Plan with Creditors Committee
FIBERMARK INC: Files Revised Plan & Disclosure Statement

FLINTKOTE COMPANY: Two Insurers Object to Exclusivity Extension
G-FORCE 2005-RR2: Fitch Places Low-B Ratings on Six Cert. Classes
GLOBAL LEARNING: Court Confirms Amended Plan of Reorganization
GREAT ATLANTIC: Receives Requisite Consents from Noteholders
HEILIG-MEYERS CO: Has $65.9 Mil. in Assets to Pay $681 Mil. Debts

HILLMAN GROUP: S&P Places B Corporate Credit Rating on Watch
INTERLINE BRANDS: Names Michael DeDomenico to Board of Directors
INTERSTATE BAKERIES: 189 Trade Creditors Transfer $9.8MM in Claims
IPCS INC: AIG Entities, et al., Register 2.88 Mil. Shares for Sale
IPCS INC: Additional SilverPoint Shares Registered for Sale

KAISER ALUMINUM: Insurers & HSBC Balk at Solicitation Procedures
KMART CORP: Settles Aztex Associates' Rejection Claim for $16.9MM
LOGAN INTERNATIONAL: Trustee Picks 7-Member Creditors Committee
MBIA INC: Names Jeffrey Yabuki to Board of Directors
MCI INC: Connecticut AG Urges DPUC to Reconsider MCI-Verizon Deal

MERIDIAN AUTOMOTIVE: Exclusive Period Extended to Dec. 22
MERIDIAN AUTOMOTIVE: Toyota Wants Stay Lifted to Collect Payments
MERIDIAN AUTOMOTIVE: Wants Korn/Ferry as Headhunter
MERRILL LYNCH: Fitch Assigns Low-B Ratings to Six Cert. Classes
METALFORMING: Brings In DoveBid Valuation to Appraise Equipment

METALFORMING: Hires Complete Appraisal as Real Estate Appraiser
MIRANT CORP: Creditors Panel Objects to Former Directors' Claim
NATIONAL ENERGY: Moss Bluff Holds $1.2 Million Allowed Claim
NATURADE INC: Losses & Deficits Prompt Going Concern Doubt
NVF COMPANY: Committee Wants Blank Rome as Counsel

NVF COMPANY: Committee Wants Weiser LLP as Financial Advisor
ONE TO ONE: Soliciting Bids for Substantially All Assets
OWENS CORNING: Shintech Concedes $39 Million Claim is Overstated
PACIFIC MAGTRON: Has $5.55 Mil. of Assets to Pay $6.91 Mil. Debts
PETROKAZAKHSTAN INC: Moody's Reviews Ba3 Corporate Family Rating

PHILLIPS-VAN: Earns $23.5 Million of Net Income in Second Quarter
PURCHASEPRO.COM: Court Dismisses $4.1 Mil. Suit Against Johnson
RADNOR HOLDINGS: Equity Deficit Widens to $19 Million at July 1
RAVEN MOON: Equity Deficit Raises Going Concern Doubts
REGINALD PHILLIPS: Case Summary & 13 Largest Unsecured Creditors

RISK MANAGEMENT: Inks Master Restructuring Pact with Equifax Info
RISK MANAGEMENT: Qwest Objects to Proposed Asset Sale
ROBERT WRIGHT: Case Summary & 16 Largest Unsecured Creditors
SAINT VINCENTS: Wants to Establish Insurance Subsidiary
SAINT VINCENTS: NewEnergy Wants to Terminate Energy Services Pact

SAINT VINCENTS: Prepares to Shut Down St. Mary's Hospital
SAKS INC: Reimbursing Suppliers $48.2M for Improper Collections
SAKS INC: Restating Financial Statements After Audit Panel Inquiry
SEGA GAMEWORKS: Files First Amended Plan of Reorganization
SHOPKO STORES: Sr. Noteholders Have Until Sept. 15 to Tender Bonds

SIERRA HEALTH: Three Noteholders Convert $19M Notes to Stock
SKIN NUVO: Files Joint Plan of Liquidation in Nevada
SOVEREIGN BANCORP: Issues $500 Million of Senior Notes
SPIEGEL INC: Wants Court to Nix Three PBGC Claims
STATION CASINO: Moody's Rates $150 Million Notes' Add-On at Ba3

STRUCTURED ASSET: Fitch Lowers Ratings on Six Certificate Classes
STRUCTURED ASSET: Monthly Losses Cue Fitch to Hold C Rating on B4
TITAN CRUISE: Laying Off 415 Workers Starting Oct. 16
TOMMY HILFIGER: Moody's Reviews Ba1 Corporate Family Rating
UAL CORP: Wants More Time to File Plan & Gets $3-Bil Loan Pledges

USG CORP: Court OKs $2M+ Sale of U.S. Gypsum's Natural Gas Assets
USG CORP: U.S. Gypsum Plans to Build $180 Million Wallboard Plant
VISKASE COS: S&P Revises CreditWatch Implications to Developing
VISUALGOLD.COM INC: Involuntary Chapter 11 Case Summary
WATTSHEALTH FOUNDATION: Committee Wants Danning Gill as Counsel

WATTSHEALTH FOUNDATION: Panel wants FTI as Financial Advisor
WINN-DIXIE: Objects to Wah Hong Go's Request to Lift Stay
WINN-DIXIE: Court Approves Store Closing Sales to Five Purchasers
WORLDCOM INC: Court Sentences Scott Sullivan to 5 Years in Prison

* Stephen Borman Joins Alvarez & Marsal Tax Advisory Services

* BOOK REVIEW: Charles F. Kettering: A Biography

                          *********

ACCESS FINANCIAL: Fitch Junks Rating on Three Certificate Classes
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Fitch has taken rating actions on two Access Financial
Manufactured Housing issues:

   Series 1995-1:

     -- Class A-3 is affirmed at 'AAA';
     -- Class A-4 is upgraded to 'AAA' from 'AA-';
     -- Class B-1 is downgraded to 'C' from 'CCC'.

   Series 1996-1:

     -- Class A-5 is affirmed at 'AAA';
     -- Class A-6 is affirmed at 'AA-';
     -- Class B-1 is downgraded to 'C' from 'CCC';
     -- Class B-2 remains at 'C'.

Losses on series 1995-1 have reduced the collateral at a faster
rate than payments on the related certificates and have
consequently created an undercollateralized amount of
approximately $2 million.  The current pool factor (mortgage loan
principal outstanding as a percentage of the initial pool) is 25%.
Cumulative losses to date on the pool are 24% of the original
balance.

Series 1996-1 has also experienced higher losses than initially
expected.  Currently, the certificates are undercollateralized by
$8.5 million, while cumulative losses are 26% of the initial pool
balance.  The pool factor is 27%.

The transactions reviewed pay interest and principal due to the
senior outstanding bond prior to paying interest to subordinate
bonds, a structure commonly referred to as an IP-IP structure
(interest-principal/interest-principal).  As opposed to a
structure that pays interest to all bonds prior to paying any
principal, an IP-IP structure generally reduces the credit risk to
the senior class at the expense of the mezzanine and subordinate
certificates.  The payment priority distribution is not expected
to change as all of the transactions will fail performance
triggers for the remainder of each pool's life.

Access Financial, Corp., entered the manufactured housing lending
business in 1995.  In March 1998, Access announced its exit from
the manufactured housing business and began pursuing opportunities
to sell its portfolio and the accompanying servicing.  In June
1998, Vanderbilt Mortgage and Finance, Inc., took over servicing
of the AFC portfolio.

Further information regarding current delinquency, loss, and
credit enhancement statistics is available on the Fitch Ratings
web site at http://www.fitchratings.com/


ACCESS WORLDWIDE: Balance Sheet Upside-Down by $3.86MM at June 30
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Access Worldwide Communications, Inc., reported its financial
results for the quarter ending June 30, 2005, in a Form 10-Q
delivered to the Securities and Exchange Commission last week.

                 Pharmaceutical Services Segment

Revenues for the Pharmaceutical Services Segment was 6.2 million,
a decrease of 16.2% in the three months ended June 30, 2005,
compared to the three months ended June 30, 2004.  The decrease
was primarily attributed to the launch of a major DTC program for
one of our clients in 2004 with no similar launch in 2005.

Gross profit as a percentage of revenues for the Pharmaceutical
Segment for the three months ended June 30, 2005 decreased to
46.8%, compared to 50.0% for the three months ended June 30, 2004.
The decrease was primarily attributed to a change in the mix of
programs performed by our medical education division.

Selling, general and administrative expenses as a percentage of
revenues for the Pharmaceutical Segment decreased to 25.8% for the
three months ended June 30, 2005, compared to 31.1% for the three
months ended June 30, 2004.  The decrease was primarily attributed
to the favorable settlement of our litigation against MTI for
$363,000 and a net recovery from an insurance claim for flood
damages at our Florida location of $215,000.

                    Business Services Segment

Revenues for the Business Services Segment was $3.3 million, a
decrease of 50% for the three months ended June 30, 2005 compared
to the three months ended June 30, 2004.  The decrease was
primarily attributed to the lengthy lead-time necessary for our
two new business development professionals to replace the revenue
lost from a prior client due to regulatory changes.  The Company
is beginning to experience an increase in new business development
activity from each of these individuals.

Gross profit as a percentage of revenues for the Business Segment
decreased to 30.3% for the three months ended June 30, 2005, from
39.4% for the three months ended June 30, 2004.  The decrease was
primarily attributed to the significant decrease in revenue.

Selling, general and administrative expenses as a percentage of
revenues for the Business Segment increased 27.3% for the three
months ended June 30, 2005 compared to the three months ended
June 30, 2004.  The increase was primarily attributed to our
Maryland communication center ceasing revenue and profit
generating operations, while we continue to incur overhead
expenses such as rent, utilities and depreciation of fixed assets.
Management continues their effort to closely manage costs without
severely impacting business needs and operating efficiencies.

                        Interest Expense

The Company's net interest expense increased slightly to
$0.4 million for the three months ended June 30, 2005, compared to
$0.3 million for the three months ended June 30, 2004, due
primarily to the accretion of the discount on Convertible Notes,
along with the increase in the loan balance under the Debt
Agreement.

                 Liquidity and Capital Resources

At June 30, 2005 and December 31, 2004, the Company had a working
capital deficit of approximately $2.1 million and $1.8 million,
respectively.  Cash and cash equivalents were $2.4 million at
June 30, 2005, compared to $2.6 million at December 31, 2004.

Net cash used in operating activities during the first half of
2005 was $3.7 million, compared to net cash provided by operating
activities during the first half of 2004 of $3.4 million.  The net
decrease was primarily due to an increase in unbilled receivables
of $1.3 million and a decrease in grants payable of $2.2 million.
These changes were primarily the result of delays in reconciling
completed projects and in collection of accounts receivable from
our clients, coupled with less grant payments to be made to
recipients on behalf of our clients.

Net cash used in investing activities did not change significantly
during the first half of 2005 compared to the first half of 2004.

Net cash provided by financing activities was $4.2 million for the
first half of 2005, compared $1.9 million for the first half of
2004.  The change was primarily due to an increase in net
borrowing under the Debt Agreement of $3.1 million, as well as an
increase due to proceeds from a private placement of $1.0 million.
The increased borrowing was primarily a result of the delays being
experienced in reconciling completed projects, collections of
accounts receivables, and increased working capital needs due to
decreases in revenues.

                       Revolver Amendment

On August 12, 2005, Allied Worldwide entered into a FOURTH
AMENDMENT to its REVOLVING CREDIT, TERM LOAN AND SECURITY
AGREEMENT with CAPITALSOURCE FINANCE LLC agreeing to deposit
$967,000 in an account with Merrill Lynch, Pierce, Fenner & Smith
Incorporated and pledge that account to the lender as collateral.

The Company also agrees that it will abide by two key financial
covenants:

   (1) Minimum EBITDA -- The Company promises that EBITDA will be
       no less than:

          For the Month of                 Minimum EBITDA
          ----------------                 --------------
          August 2005                        ($621,000)
          September 2005                      (375,000)
          October 2005                        (416,000)
          November 2005                         (9,000)
          December 2005                        363,000
          January 2006                         600,000
          February 2006                        626,000
          March 2006                           561,000
          April 2006                           549,000
          May 2006                             600,000
          June 2006                            600,000
          July 2006                            700,000
          August 2006                          628,000
          September 2006                       700,000
          October 2006                         800,000
          November 2006                      1,000,000
          December 2006 and thereafter       1,000,000


   (2) Fixed Coverage Ratio -- The Company promises that the ratio
of EBITDA to Fixed Charges will not fall below:

                                           Minimum Fixed
          For the Period                   Coverage Ratio
          --------------                   --------------
          Through December 2005                Waived
          January 2006                           1.0
          February 2006                          1.0
          March 2006 and thereafter              1.0

                     Private Placement Update

As of August 12, 2005, the Company has received approximately
$2.25 million in cash for, and are in the process of closing, a
private placement for approximately $2.25 million of Convertible
Notes and Warrants to Accredited Investors.

The Notes will be convertible at a ratio of 2 shares of common
stock for $1.00 invested.  The Notes will automatically convert
upon the Conversion Event, which is defined as that date upon
which the majority of our stockholders, pursuant to Delaware
General Corporations Law, vote to amend the Amended and Restated
Certificate of Incorporation of the Company, to increase the
authorized shares of the Company's Common Stock from 20 million to
not less than 35 million.

Should the Conversion Event not occur, the purchase price of the
Convertible Notes III, and a 20% non-conversion fee, will be due
and payable by the Company on the earlier of 36 months from the
issuance date, or a Change of Control, upon written consent of the
Company's Senior Lender, CapitalSource.  In the event of non
payment upon the Maturity Date, the purchase price and 20%
non-conversion fee will immediately bear interest at a rate of 15%
annually, payable quarterly in arrears, provided that the Company
is in compliance with its loan covenants under its Debt Agreement
with CapitalSource, and that such payments will not cause the
Company to violate such covenants.  The proceeds of the private
placement will be used to fund working capital and operations.

A full-text copy of Access Worldwide's Quarterly Report is
available for free at http://ResearchArchives.com/t/s?10b

Access Worldwide Communications, Inc., is an outsourced marketing
services company that provides a variety of sales, education and
communication programs to clients in the medical, pharmaceutical,
telecommunications, financial services, insurance and consumer
products industries.

As of June 30, 2005, Access Worldwide's balance sheet reflected a
$3,864,961 equity deficit, compared to a $3,865,118 deficit at
Dec. 31, 2004.


AFFINITY TECHNOLOGY: Equity Deficit Widens to $1.78MM at June 30
----------------------------------------------------------------
Affinity Technology Group, Inc., reported its operating results
for the quarter ended June 30, 2005.

                            Revenues

The Company recognized patent licensing revenues of $4,412 and
$8,824 for the three and six-month periods ended June 30, 2005,
respectively, compared to $4,412 and $258,824 in the corresponding
periods in 2004.  During the three and six month periods ended
June 30, 2005, and June 30, 2004, the Company recognized $4,412
and $8,824, respectively, related to a three-year license
agreement entered into in 2002.  Of the revenues recognized during
the six-month period ended June 30, 2004, $250,000 was related to
a settlement agreement entered into in January 2004 with an
institution that formerly maintained a system that permitted
consumers to apply for credit cards over the Internet.  These
revenues are not recurring.

                       Costs and Expenses

Cost of Revenues

Cost of revenues for the three and six month periods ended
June 30, 2005, was $441 and $882, respectively, compared to
$441 and $63,382 for the corresponding periods in 2004.  Cost of
revenues consists of commissions paid to the Company's patent
licensing representatives.  The decrease in cost of revenues
during the six months ended June 30, 2005, compared to the
corresponding period in 2004 is attributable to a settlement
agreement entered into in the first quarter of 2004 for which
commissions of $62,500 were paid to the Company's patent licensing
representatives.

General and Administrative Expenses

General and administrative expenses totaled $145,259 and $255,506
for the three and six-month periods ended June 30, 2005,
respectively, compared to $165,912 and $456,993 in the
corresponding periods in 2004.  The decrease of $20,653 for the
three month period ended June 30, 2005, compared to the same
period in 2004 was primarily attributable to legal fees and
related expenses incurred in 2004 in conjunction with the
Company's patent licensing litigation and general business
matters.  The decrease of $201,487 for the six month period ended
June 30, 2005, compared to the same period in 2004 was primarily
attributable to legal fees and related expenses incurred in 2004
in conjunction with the Temple Ligon trial, the Company's patent
infringement litigation and general business matters.

Interest Expense

Interest expense for the three and six month periods ended
June 30, 2005, was $24,042 and $47,452, respectively, compared to
$24,127 and $48,209 for the corresponding periods in 2004.
Interest expense is related to the Company's convertible notes,
which accrue interest at 8%.  Convertible note principal
outstanding at June 30, 2005, December 31, 2004, and June 30, 2004
totaled $1,231,336, $1,181,336, and $1,206,336, respectively.

                 Liquidity and Capital Resources

The Company has generated net losses of $68,972,987 since its
inception and has financed its operations primarily through net
proceeds from its initial public offering in May 1996 and cash
generated from operations and other financing transactions.  Net
proceeds from the Company's initial public offering were
$60,088,516.

To date, the Company has generated substantial operating losses
and has been required to use a substantial amount of cash
resources to fund its operations.  At June 30, 2005, the Company
had cash and cash equivalents of $26,429.  On August 12, 2005, the
Company sold an additional $45,000 principal amount of its notes.
The Company has informal arrangements with certain vendors and
officers under which these vendors and officers have agreed to
defer all or part of the amounts payable to them until the Company
has adequate resources to do so.

               Liquidation and Bankruptcy Warning

The Company must raise additional capital to fund accrued
operating expenses and continue its operations.  Unless the
Company raises additional capital it will have to consider
alternatives for winding down its business, which may include
offering its patents for sale or filing for bankruptcy protection.
Moreover, the Company currently does not have the resources to
repay the principal and accrued interest outstanding under its
convertible secured notes, which have become due and payable in
full.  If any of the holders of these notes takes action to
collect the amounts owed by the Company under these notes, the
Company will be forced to consider alternatives for winding down
its business, which may include offering its patents for sale or
filing for bankruptcy protection.

A full-text copy of Affinity Technology's Quarterly Report is
available for free at http://ResearchArchives.com/t/s?10a

Through its subsidiary, decisioning.com, Inc., Affinity Technology
Group, Inc., owns a portfolio of patents that covers the automated
processing and establishment of loans, financial accounts and
credit accounts through an applicant-directed remote interface,
such as a personal computer or terminal touch screen.  Affinity's
patent portfolio includes U.S. Patent Nos. 5,870,721C1, 5,940,811,
and 6,105,007.

As of June 30, 2005, Affinity Technology's equity deficit widened
to $1,778,039, from a $1,513,523 deficit at Dec. 31, 2004.


AIRTRAN HOLDINGS: S&P Junks Senior Unsecured & Subordinated Debt
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary 'CCC'
rating to AirTran Holdings Inc.'s senior unsecured and
subordinated debt securities included in its $225 million Rule 415
shelf filing.  Ratings on Orlando, Florida-based AirTran and its
major operating subsidiary, AirTran Airways Inc., including the
'B-' corporate credit rating, are affirmed.  The outlook is
stable.

"The ratings on AirTran Holdings and AirTran Airways reflect a
modest competitive position within the U.S. airline industry, and
a relatively weak financial profile," said Standard & Poor's
credit analyst Betsy Snyder.  "Ratings also incorporate low
operating costs and fairly good liquidity for
its size," the analyst continued.

AirTran Airways operates a fleet of 97 aircraft primarily out of
Atlanta, also Delta Air Lines Inc.'s major hub.  In 2004, AirTran
began to take delivery of Boeing 737-700's to augment its fleet of
Boeing 717's.  These aircraft have enabled the company to fly more
long-haul routes, adding new markets and reducing its dependence
on Atlanta.  As a result, less than 70% of its network is now
dependent on Atlanta, versus approximately 90% in 2001.

AirTran operates a relatively young fleet of less than three years
old, which has aided its operating costs.  Although the company's
earnings have been constrained by high fuel prices, its operating
costs benefit from low labor expenses and high productivity.  In
the first six months of 2005, the company earned a modest profit
of $3 million and, in 2004, was one of only three U.S. airlines to
achieve profitability.

However, its credit ratios are still relatively weak, with EBITDA
interest coverage in the low-1% area and funds flow to debt in the
mid-single-digit percentage area, due to substantial operating
leases used to finance most aircraft deliveries.  The company's
profitability will continue to be hurt by ongoing high fuel
prices, since it does not have a significant fuel-hedging program
in place.  Alternatively, any significant improvement will be
constrained by a growing operating lease burden as the company
continues to add to its fleet.

Although AirTran's earnings are expected to remain under pressure
over the near term, the effect on its credit ratios should be
modest.  Its financial profile will continue to be aided by
minimal debt maturities and fairly good liquidity for the rating
level.  However, if the company were to experience material
losses, the outlook could be revised to negative.  Revision to a
positive outlook is not considered likely.


ALLMERICA FINANCIAL: Moody's Affirms Preferred Stock Rating at Ba2
------------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Allmerica
Financial Corporation (AFC; senior at Ba1) and the insurance
financial strength ratings of its subsidiaries, Hanover Insurance
Company (Hanover; Baa1) and First Allmerica Financial Life
Insurance Co. (FAFLIC; Ba1), following the company's announcement
that it had signed a definitive agreement to sell its run-off life
and annuity company Allmerica Financial Life Insurance & Annuity
to Goldman Sachs Group, Inc.  Moody's also announced that it has
placed the Ba1 insurance financial strength rating of AFLIAC on
review for possible upgrade.

Total cash proceeds from the sale are projected to be
approximately $385 million, approximately $70 million of which is
expected to be deferred and paid over a three year period.  The
price is well below the life company's GAAP carrying value, and
will result in a material reduction of AFC's shareholders' equity.
The transaction is expected to close on or after November 30, 2005
subject to regulatory approvals and other closing conditions.

Expanding on its rationale, Moody's said that the completion of
the transaction will permit AFC to eliminate a substantial portion
of its exposure to its runoff life operations and allow the
company to focus on its core property/casualty business.  Moody's
noted, however, that statutory dividend capacity from AFC's life
subsidiaries would be reduced as a result of the sale of AFLIAC.

AFC has announced that a portion of the transaction proceeds will
be deployed to service interest and dividends on its debt and
trust preferred securities, respectively.  However, AFC's
intention to use over half of the cash proceeds to fund
repurchases of its common stock and to facilitate commencement in
4Q05 of the company's reinstated common dividend program
represents a significant offset to the potential benefits of the
transaction for creditors.  The outlook for the affirmed ratings
is stable.

Moody's Baa1 insurance financial strength rating of Hanover
reflects challenges the company faces in maintaining its existing
portfolio of business and its high expense ratio relative to
peers, offset by good underwriting profitability and a modest risk
profile which is weighted toward personal lines.

Moody's Ba1 insurance financial strength rating of FAFLIC reflects
the company's modest scale and embedded value, and the runoff
nature of the business.  The rating agency views AFC's life
insurance operations as non-strategic in relation to its stated
business objectives and believes that, over time, capital will be
reallocated from the non-core life insurance operations to AFC's
core P&C business.

Moody's Ba1 insurance financial strength rating of AFLIAC reflects
the potential earnings volatility associated with the variable
business and the non-core nature of the operations to AFC.  The
review for upgrade will focus on the completion of the recently
announced transaction and the execution of a support agreement
with Goldman Sachs Group, Inc.

These ratings were affirmed with a stable outlook:

     Allmerica Financial Corporation:

        * Senior unsecured debt rating at Ba1

     AFC Capital Trust 1:

        * Preferred stock rating at Ba2

     Hanover Insurance Company:

        * Insurance financial strength rating at Baa1

     Allmerica Financial Corporation:

        * Commercial paper rating at Not Prime

     First Allmerica Financial Life Insurance Company:

        * Insurance financial strength rating at Ba1

     First Allmerica Financial Life Insurance Company:

        * Short-term insurance financial strength rating of
          Not-Prime

        * Premium Asset Trust Series 1999-1 - senior debt
          rating at Ba1.

This rating was placed on review for possible upgrade:

     Allmerica Financial Life Insurance and Annuity Company:

        * Insurance financial strength rating at Ba1

AFC writes predominantly personal and commercial lines insurance
on a regional basis, including in Michigan, Massachusetts, New
York, New Jersey and Louisiana.  For the year ended December 31,
2004, AFC reported net income of $125 million.  As of June 30,
2005, shareholders' equity was $2.5 billion.


ALOHA AIRGROUP: Can Set-Off Receivables & Credits with Honeywell
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Aloha Airgroup, Inc., and Aloha Airlines sought and obtained
permission from the U.S. Bankruptcy Court for the District of
Hawaii to effect a set-off of mutual prepetition debts with
Honeywell International, Inc.

Aloha Airlines owes Honeywell $581,702, while Honeywell owes Aloha
$600,368.  The set-off will be effected pursuant to a Letter
Agreement between the parties, and Honeywell will send Aloha a
check for the difference.

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


AMERICAN HEARTLAND: Receiver Hires Robison Johnston as Accountant
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Walter O'Cheskey, the Court-appointed Receiver for American
Heartland Sagebrush Securities Investments, Inc, sought and
obtained authority from the U.S. Bankruptcy Court for the Northern
District of Texas to employ and retain Robison, Johnston & Patton,
LLP, as his accountant.

Robison Johnston will:

    1) prepare income tax returns and other tax matter for the
       bankruptcy estate;

    2) prepare monthly operating reports as required by the U.S.
       Trustee's Office; and

    3) prepare financial statement and any additional finanacial
       information as may be requested from the Receiver.

Court documents do not show how much Robison Johnston will be paid
for its accounting services.

To Mr. O'Cheskey knowledge, the Firm is a "disinterested person"
as that term is defined in Section 101(14) of the Bankruptcy Code.

Headquartered in Lubbock, Texas, American Heartland Sagebrush
Investments, Inc., d/b/a Sagebrush, holds investor funds.  The
Company is under receivership and Walter O'Cheskey is the
appointed receiver.  The Company filed for chapter 11 protection
on June 21, 2005 (Bankr. N.D. Tex. Case No. 05-50761).  Max Ralph
Tarbox, Esq., represents the Debtor and Mr. O'Cheskey.  When the
Debtor filed for protection from its creditors, it listed $185,000
in assets and $1,172,892 in debts.


AMERICAN HEARTLAND: Investors Want Chapter 11 Case Dismissed
------------------------------------------------------------
Morris A. Turner, James Cathey, and Rhonda Cathey ask the U.S.
Bankruptcy Court for the Northern District of Texas to dismiss the
chapter 11 case commenced by American Heartland Sagebrush
Securities Investments, Inc.

The Three Investors tell the Court they own some of the Debtor's
SIPC-insured securities.  The Investors contend that:

    1) American Heartland is not eligible to be a debtor under
       Section 109 of the Bankruptcy Code, and

    2) a "receivership" is not eligible to be a debtor under
       Section 109 of the Bankruptcy Code.

                        Identity Crisis

The investors say that the purported Debtor suffers from a severe
identity crisis.  At different times, the Receiver and his counsel
refer to the Debtor by different names and by different
organizational structures.  None of the names or identities used
in the pleadings qualify the entity as a Debtor under the
Bankruptcy Code.  "The shoe simply does not fit," the investors
say.

The investors assert that calling the Debtor a corporation is
insufficient.  They also contend that the Receiver's counsel filed
a Motion to Amend Petition to add the name "Sagebrush Securities &
Financial Services, Inc.," in order to avoid dismissal.  However,
Sagebrush Securities, like American Heartland, does not exist as a
corporation under Texas law.

Headquartered in Lubbock, Texas, American Heartland Sagebrush
Investments, Inc., d/b/a Sagebrush, holds investor funds.  The
Company is under receivership and Walter O'Cheskey is the
appointed receiver.  The Company filed for chapter 11 protection
on June 21, 2005 (Bankr. N.D. Tex. Case No. 05-50761).  Max Ralph
Tarbox, Esq., represents the Debtor and Mr. O'Cheskey.  When the
Debtor filed for protection from its creditors, it listed $185,000
in assets and $1,172,892 in debts.


BALLY TOTAL: Amends Sr. Notes Offer & Seeks Consent from Lender
---------------------------------------------------------------
Bally Total Fitness Holding Corporation (NYSE: BFT) reached
agreement with holders of a majority of its outstanding 9-7/8%
Senior Subordinated Notes due 2007 to an extension through
Nov. 30, 2005, of the waiver of the financial reporting covenant
default under the indenture governing the notes.

The agreement to consent to the waiver of the financial reporting
covenant default under the Subordinated Note indenture is subject
to:

   -- the Company receiving a similar waiver extension from the
      holders of the Company's 10-1/2% Senior Notes due 2011; and

   -- approval by the lenders under the Company's $275 million
      senior secured credit facility.

The agreement with the holders of the Subordinated Notes will
automatically terminate if these conditions are not satisfied by
the close of business on Sept. 2, 2005, and, at the option of a
significant holder, after close of business on Aug. 30, 2005, or
prior thereto under certain other circumstances.

The agreement provides that holders of Subordinated Notes who are
"accredited investors" under applicable securities laws and who
consent to the extension will receive, at the holder's election,
either 9.2308 shares of the Company's common stock, which will not
be registered under federal or state securities laws, or $20.00 in
cash for each $1,000 principal amount of Subordinated Notes as to
which consent is delivered.  Holders of at least 43% of the
Subordinated Notes have agreed to elect the common stock
consideration.

Consenting holders who are not accredited investors will receive
$20.00 for each $1,000 principal amount of Notes.  In order to
permit all holders of Subordinated Notes to receive the
consideration payable under yesterday's agreement, Bally will
commence promptly a new consent solicitation offering such
consideration to the holders of Subordinated Notes that are not
party to yesterday's agreement.

As previously disclosed, Bally has received consents from holders
of approximately 96.03% of its outstanding Senior Notes to a
waiver extension through Oct. 31, 2005.  The Company has amended
its solicitation to request a waiver through Nov. 30, 2005, and
pay to Senior Noteholders a one-time consent fee of $15.00 in cash
per $1,000 principal amount of Senior Notes as to which consent is
delivered.  The consent solicitation to holders of Senior Notes
has been extended and will expire at 5:00 p.m., New York City
time, on Aug. 30, 2005.  Except as set forth herein, the terms of
the consent solicitation remain the same as set forth in the
Consent Solicitation Statement previously distributed to the
Senior Noteholders.

The record date for determining Senior Noteholders eligible to
submit consents will remain July 12, 2005.  Senior Noteholders who
have previously submitted Letters of Consent are not required to
take any further action in order to receive payment of the Consent
Fee.  Senior Noteholders who have not yet consented are asked to
submit the previously distributed Letters of Consent in order to
consent and receive any consent fees that may be paid by the
Company.  Holders of Subordinated Notes shortly will receive
solicitation materials (including a new Letter of Consent) that
will need to be submitted in order to elect cash or shares of
common stock and receive the Consent Fee.

                  Credit Facility Amendment

Bally has also requested an amendment to its senior secured credit
facility to permit payment of the consent fees to the holders of
the Senior Notes and Subordinated Notes.  The proposed amendment,
which is supported by JP Morgan Chase as Agent for the lenders,
would, among other things, permit certain expenses to be added
back to the Company's EBITDA for purposes of financial covenant
calculations, exclude certain consent fees from interest expense
in calculating the EBITDA to interest expense ratio and reduce the
required ratio from 1.70x to 1.65x for the period ending March 31,
2006.  Bally and JP Morgan Chase have requested that lender
consents to the proposed amendment be delivered by Aug. 30, 2005.

As previously announced, Bally's existing waiver of the financial
reporting covenant defaults expired on July 31, 2005, and the
Company received notices of default under the Senior Note and
Subordinated Note indentures on Aug. 4 and 5, 2005, respectively.
As a result of these notices and a cross-default provision in the
Company's credit agreement, unless the financial reporting
covenant defaults contained in the indentures are waived by
Aug. 31, 2005, over $700 million of Bally's debt obligation under
the credit agreement and indentures could become immediately due
and payable.  Notwithstanding the agreement announced yesterday,
consent of holders of the Senior Notes to a waiver extension and
approval by lenders under the Company's credit agreement are still
required to waive the defaults.

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: (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 Aug. 11, 2005,
Moody's Investors Service affirmed the Caa1 corporate family
(formerly senior implied) rating and debt ratings of Bally Total
Fitness Holding Corporation.  The affirmation reflects continued
high risk of default and Moody's estimate of recovery values of
the various classes of debt in a default scenario.  The ratings
outlook remains negative.

Moody's affirmed these ratings:

   * $175 million senior secured term loan B facility due 2009,
     rated B3

   * $100 million senior secured revolving credit facility
     due 2008, rated B3

   * $235 million 10.5% senior unsecured notes (guaranteed)
     due 2011, rated Caa1

   * $300 million 9.875% senior subordinated notes due 2007,
     rated Ca

   * Corporate family rating, rated


BIJAN H__________: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Bijan & Crystal A. H__________ {*}
        155 Neita Drive
        Salisbury, North Carolina 28147

Bankruptcy Case No.: 05-52604

Chapter 11 Petition Date: August 24, 2005

Court: Middle District of North Carolina (Winston-Salem)

Judge: William L. Stocks

Debtor's Counsel: Edwin H. Ferguson, Jr., Esq.
                  P.O. Box 444
                  Concord, North Carolina 28026-0444
                  Tel: (704) 788-3211
                  Fax: (704) 784-3211

Total Assets: $880,103

Total Debts:  $1,235,990

Debtor's 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
F&M Bank                      5 Bed Room, 3 Bath        $139,926
P.O. Box 307                  Brick Home
Granite Quarry, NC 28072      Value of security:
                              $132,833

US Bancorp                    Nova verta paint           $69,000
1450 Channel Pkwy             booth, Leased
Marshall, MN 56258

North East Medical Center     Medical                    $54,500
P.O. Box 247
Concord, NC 28026

Rowan County Tax Collector    Property tax               $44,130

Snap On Credit                Alignment machine,         $44,130
                              Leased

Axis Capital                  Prep Station, 2 stall      $40,000
                              exhaust/recirculating
                              PD021104 pressurized,
                              Leased

American Express              Credit card                $27,500

Allied Finance                1988 Mercedes 300TE,       $24,834
                              inoperable
                              1987 Mercedes 560SL,
                              inoperable
                              Value of security:
                              $1,500

F&M Bank                      5 bed room, 3 bath         $19,906
                              brick home
                              Value of senior lien:
                              $139,926

Prince Parker & Assoc.        Medical                    $15,000

Beneficial                    Credit card                $11,496

AT&T                          Credit card                $10,000

Allied Finance                1975 Mercedes 450SL         $8,668
                              Value of security:
                              $2,000

Medley Electric               Electric work               $8,000

Suntrust                      Credit card                 $8,000

Wachovia                      Credit card                 $6,500

Allied Finance                1990 BMW 535                $6,112
                              this loan is
                              cross-collateralized
                              with a 1993 Jeep
                              Cherokee that is
                              owned in the name
                              of the debtor's
                              corporation, MBJ, Inc.
                              Value of security:
                              $1,800

American Express              Credit card                 $4,975

Cabarrus Radiologists         Medical                     $4,862

Citi Financial                Credit card                 $3,500
_________

     {*} Redacted on Nov. 4, 2007, at Debtors' son's request.

BOMBARDIER INC: Reports Second Quarter Financial Results
--------------------------------------------------------
Bombardier Inc.(TSX:BBD.MV.A)(TSX:BBD.SV.B) increased its
profitability during the second quarter of fiscal year 2006,
showing improved earnings before income taxes from continuing
operations before special items of $59 million, a $17 million
increase year over year.  The earnings before net interest and
income taxes margin before special items also improved to 3% from
2.1% last year.  These improvements were driven by the continued
strength of the business jet segment and improved results at
Bombardier Transportation.

Earnings per share from continuing operations before special items
reached $0.02 (nil after special items) compared to $0.01 before
and after special items, last year.

"Our overall results continue to progress according to our plan.
Once again, we benefited from our diversified product lines in
aerospace, and won important contracts in Transportation," said
Laurent Beaudoin, Chairman and Chief Executive Officer, Bombardier
Inc.

"Despite the continued challenging environment in the airline
industry arising from the financial difficulties of some U.S.
operators, Bombardier Aerospace succeeded in improving its
earnings before interest and income taxes.  Bombardier regional
airliners remain the aircraft of choice for airlines facing sky-
high oil prices.  In Transportation, the restructuring initiative
progresses according to plan, while results are back on a positive
course.  A good level of new orders was reached this quarter, and
the fourth follow-on order from the SNCF and the French Regions
for high-capacity trains demonstrates our clients' trust in our
products."

"Our focus remains on increasing profitability for the Corporation
and our shareholders," concluded Mr. Beaudoin.

                      Bombardier Aerospace

At Bombardier Aerospace, EBIT has shown improvement over the past
five quarters.  For the three-month period ended July 31, 2005, it
reached $65 million, a $23-million increase year over year.  The
EBIT margin also grew to 3.3% from 2.2% for the same period last
fiscal year.

The business jet segment demonstrated its continued strength with
a 41% increase in deliveries, totalling 41 aircraft, and a 63%
growth in net orders, for a total of 49 aircraft.

Bombardier's families of regional aircraft remain leaders in their
segment and popular among customers for their excellent operating
economics.  The trend from smaller regional jets to larger CRJ700
and CRJ900 aircraft continues.  Accordingly, effective at the
beginning of the next fiscal year, Bombardier will further adjust
the production rate of its 50-passenger CRJ200 aircraft to 18
deliveries per year.

As a result of the positive effect of the ramp-up in production of
business aircraft and this production rate adjustment, the initial
workforce reduction estimated in October 2004 at 2,000 employees
is now reduced to 1,135 employees.  The total costs, originally
estimated at $26 million, are now reduced to $19 million.  The
total number of aircraft deliveries for this year will remain, as
planned, approximately the same as last fiscal year.

                    Bombardier Transportation

At Bombardier Transportation, EBIT before special items reached
$43 million for the second quarter, or 2.6% of segmented revenues.
For five quarters in a row now, the EBIT margin before special
items has stabilized at that level.

Order intake reached a good level with $1.6 billion for the
quarter, a $300-million increase year over year.  A major follow-
on order, in addition to French National Railways' (SNCF), was
from the Ministry of Railways of China for 20 eight-car high-speed
trainsets. Subsequent to the quarter, the Metropolitan
Transportation Authority/Metro-North Railroad (MTA/MNR) and the
Metropolitan Transportation Authority/Long Island Rail Road
(MTA/LIRR) exercised options for M-7 electric multiple unit
commuter railcars.  These orders underscore Bombardier's ability
to deliver consistent, quality products that meet customers' needs
resulting in an excellent relationship with its clients.

The restructuring plan is proceeding on schedule and on budget.
Workforce reductions are ahead of plan and the site closures
continue as per the proposed initiative.  Site improvement plans
are showing progress across 37 sites, and project control has
gained ground, as reflected by the increased stability in margins.

                       Bombardier Capital

The Corporation completed the sale of Bombardier Capital's
inventory finance operations and on-balance sheet manufactured
housing operations, resulting in a net pre-tax gain of
$173 million (net after-tax gain of $103 million).

                      Consolidated Results

Consolidated revenues totalled $3.7 billion for the second quarter
ended July 31, 2005, compared to $3.8 billion for the same period
last year.  The $169-million decrease reflects lower revenues in
the transportation segment, resulting mainly from decreased
mainline revenues in the United Kingdom (U.K.) and Germany due to
a lower level of activities in these markets.  For the six-month
period ended July 31, 2005, consolidated revenues reached
$7.5 billion compared to $7.3 billion for the same period last
year.  The $135-million increase mainly reflects higher revenues
in the aerospace segment resulting from increased deliveries and a
favourable mix of business aircraft.  This increase was partially
offset by lower revenues in the transportation segment.

EBT from continuing operations before special items for the
three-month period ended July 31, 2005, amounted to $59 million,
compared to $42 million for the same period last fiscal year.  For
the six-month period ended July 31, 2005, EBT from continuing
operations before special items amounted to $107 million, compared
to negative $94 million for the same period last fiscal year.
These increases result mainly from increased volume and a
favourable mix of business aircraft deliveries, partially offset
by a lower volume of CRJ200 aircraft deliveries, higher regional
aircraft sales incentive costs and higher costs related to the
CSeries aircraft feasibility study.  In addition, the margin
percentage increase from 10.3% to 13.2% for the six-month period
reflects higher margins in the transportation segment, mainly as a
result of the contract adjustments recorded in the first quarter
of last fiscal year.

Special items amounted to $34 million and $26 million for the
three- and six-month periods ended July 31, 2005, respectively,
compared to $5 million and $91 million for the same periods last
fiscal year.  The special items are related to the restructuring
plan in the transportation segment.

As a result, EBT from continuing operations amounted to
$25 million for the second quarter of fiscal year 2006, compared
to an EBT of $37 million for the same period the previous year.
For the six-month period ended July 31, 2005, EBT from continuing
operations amounted to $81 million, compared to negative
$185 million for the corresponding period last year.

Income from continuing operations totalled $10 million, for the
three-month period ended July 31, 2005, compared to $18 million,
or $0.01 per share, for the same period last fiscal year.  Income
from discontinued operations, net of tax, amounted to $107 million
for the three-month period ended July 31, 2005, compared to
$5 million for the corresponding period of last fiscal year.  As a
result, net income was $117 million, or $0.06 per share, for the
second quarter of fiscal year 2006, compared to $23 million, or
$0.01 per share, for the same period the previous year.

For the six-month period ended July 31, 2005, income from
continuing operations totalled $58 million, compared to a loss
from continuing operations of $164 million, for the same period
the previous year.  Income from discontinued operations, net of
tax, amounted to $114 million for the six-month period ended
July 31, 2005, compared to $13 million for the corresponding
period of last fiscal year.  As a result, net income totalled
$172 million, compared to a net loss of $151 million, for the
corresponding period the previous year.

As at July 31, 2005, Bombardier's order backlog was $30.6 billion,
compared to $31.5 billion as at January 31, 2005.  This reduction
is due mainly to the negative impact of the weakening of the euro
and sterling pound compared to the U.S. dollar, amounting to
approximately $660 million, on the backlog of the transportation
segment.

                      Bombardier Aerospace

Bombardier Aerospace's segmented revenues amounted to $2 billion
for the three-month periods ended July 31, 2005, and 2004.

Earnings before net interest, income taxes, depreciation and
amortization amounted to $162 million for the three-month period
ended July 31, 2005, compared to $129 million for the same period
last fiscal year.  This increase results mainly from a significant
increased volume and a favourable mix of business aircraft
deliveries, partially offset by a lower volume of CRJ200 aircraft
deliveries, higher regional aircraft sales incentive costs and
higher costs related to the CSeries aircraft feasibility study.

EBIT amounted to $65 million, or 3.3% of segmented revenues, for
the second quarter ended July 31, 2005, compared to $42 million,
or 2.2%, for the same period the previous fiscal year.

For the quarter ended July 31, 2005, aircraft deliveries totalled
81, the same level as the corresponding period the previous fiscal
year.  The 81 deliveries consisted of 41 business aircraft,
39 regional aircraft and one amphibious aircraft compared to 29,
52 and nil for the corresponding period of the last fiscal year.
The 41% increase in business aircraft deliveries mainly results
from the continued strength of the business aircraft market.  The
25% decrease in regional aircraft deliveries is mainly due to
lower deliveries of CRJ200 aircraft, consistent with current
market analysis, which indicates a reduction in the demand for
50-seat regional jets.

Bombardier received 49 net orders for business aircraft, during
the three-month period ended July 31, 2005, compared to 30 net
orders during the same period last fiscal year.  This increase
reflects the continued strength in the business aircraft market.
For the quarter ended July 31, 2005, Bombardier received 13 net
orders for regional aircraft, compared to 27 for the same period
last fiscal year.  Orders during this quarter included an order
for five Q400 aircraft from Jeju Air of South Korea, valued at
approximately $120 million and for four Q400 aircraft from FlyBE
of the U.K., valued at approximately $100 million.

As at July 31, 2005, the aerospace order backlog remained stable
at $10.2 billion, compared to Jan. 31, 2005.

                    Bombardier Transportation

Bombardier Transportation's segmented revenues amounted to
$1.7 billion for the three-month period ended July 31, 2005,
compared to $1.8 billion for the same period last fiscal year.
This decrease is mainly attributable to decreased mainline
revenues in the U.K. and Germany, due to a lower level of
activities in these markets.

EBITDA before special items amounted to $69 million for the
three-month period ended July 31, 2005, compared to $79 million
for the same period last fiscal year.

EBIT before special items totalled $43 million, or 2.6% of
segmented revenues for the second quarter ended July 31, 2005,
compared to $43 million, or 2.3%, for the same quarter the
previous fiscal year.

Special items arising from the restructuring plan amounted to
$34 million for the three-month period ended July 31, 2005,
compared to $5 million for the same period last fiscal year.

As a result, EBIT amounted to $9 million, or 0.5% of segmented
revenues, for the second quarter ended July 31, 2005, compared to
$38 million, or 2.1%, for the same quarter the previous fiscal
year.

Order intake during the three-month period ended July 31, 2005,
totaled $1.6 billion, an increase of $300 million compared to the
same period last fiscal year. Major orders were for 168 high-
capacity trains AGC type from SNCF valued at $239 million; 78
double-deck coaches and nine locomotives from
Landesnahverkehrsgesellschaft Niedersachsen of Germany, valued at
$172 million; and 160 high-speed trains from the Ministry of
Railways of China, valued at $119 million.

Bombardier Transportation's backlog totalled $20.4 billion as at
July 31, 2005, compared to $21.3 billion as at Jan. 31, 2005.
This decrease reflects lower order intake compared to revenues
recorded and the negative impact of the weakening of the euro and
sterling pound compared to the U.S. dollar representing
approximately $660 million.

                       Bombardier Capital

In April 2005, the Corporation entered into an agreement to sell
BC's inventory finance operations to GE Commercial Finance and on
May 31, 2005, completed the sale for cash proceeds of
approximately $1.3 billion ($732 million after repayment by BC of
its private bank-sponsored securitized floorplan conduits not
transferred to GE).  The sale resulted in a pre-tax gain of
$191 million ($121 million after tax).

On July 25, 2005, the Corporation completed the sale of its
on-balance sheet manufactured housing operations to Vanderbilt
Mortgage and Finance, Inc., for cash proceeds of approximately
$119 million.  The sale resulted in an after-tax loss of
$18 million.

The inventory finance and on-balance manufactured housing
operations have been reported as discontinued operations.
Accordingly, the following analysis excludes these operations.

For the second quarter of fiscal year 2006, BC's segmented
revenues amounted to $57 million, compared to $62 million for the
same quarter the previous fiscal year.  EBT from continuing
operations amounted to $5 million for the quarter ended
July 31, 2005, compared to $3 million for the same period the
previous fiscal year.

The wind-down portfolios were reduced by $38 million, or 11%,
since the beginning of the current fiscal year.  The reduction in
these portfolios reflects the continued reduction in the business
aircraft and consumer finance portfolios.

Bombardier Inc. -- http://www.bombardier.com/-- is a world-
leading manufacturer of innovative transportation solutions, from
regional aircraft and business jets to rail transportation
equipment.  Bombardier Inc. is a global corporation headquartered
in Canada.  Its revenues for the fiscal year ended Jan. 31, 2005
were $15.8 billion US and its shares are traded on the Toronto
Stock Exchange.

                         *     *     *

As reported in the Troubled Company Reporter on Apr. 20, 2005,
Standard & Poor's Ratings Services affirmed its ratings, including
its 'BB' long-term corporate credit rating, on Bombardier Inc. and
its subsidiaries.  At the same time, Standard & Poor's removed the
ratings on Bombardier from CreditWatch, where they were placed
Dec. 13, 2004.  The outlook is negative.  The affirmation follows
a review of Bombardier's fiscal 2005 results, a review of
financial prospects for the next few years, and recent discussions
with senior management regarding financial and strategic
priorities.


BUEHLER FOODS: Gets Final Nod to Access $6 Million DIP Financing
----------------------------------------------------------------
The Hon. Basil H. Lorch III of the U.S. Bankruptcy Court for the
Southern District of Indiana gave his final stamp of approval on
the $6 million debtor-in-possession financing agreement between
Buehler Foods, Inc., its debtor-affiliates, and Harris N.A.

Pursuant to the DIP financing agreement, Harris, as agent for the
DIP lenders, commits to provide up to $6 million in cash to the
Debtors -- with the last $3 million subject to its further consent
based on a demonstrated need for cash consistent with an approved
budget.

Harris has the option to treat $500,000 of the $6 million loan
either as an advance on the DIP Loan or as consent for the Debtor
to use up to $500,000 of cash collateral securing its pre-petition
claim.  The Debtors owe Harris approximately $47 million on
account of prepetition loans.

As previously reported in the Troubled Company Reporter, the
Debtors will use the proceeds of the DIP loan for:

        a) payment of normal operating expenses, in the
           amounts stated in the approved Budget,

        b) payment of professional fees of the DIP
           Agent and the Prepetition Agent related to the DIP
           Credit and the Prepetition Credits,

        c) payment of interest, fees and expenses on
           the DIP Credit, and

        d) payment of an administrative expense carve
           out.

Harris' DIP Loan has an allowed super-priority administrative
claim status, with priority over all other obligations of the
Debtors, including administrative expenses or priority claims,
except for valid, fully perfected and unavoidable liens on
Prepetition Collateral securing obligations in existence on the
Petition Date.

Valid, binding, enforceable and perfected first priority liens in
all of the Debtor's assets secure the DIP Loan.  These liens are
junior only to any liens existing at the Petition Date that are
good, valid, enforceable and not avoidable under Chapter 5 of the
Bankruptcy Code or other applicable law.

The DIP Loan is due and payable upon the earlier of Oct. 1, 2005,
or the occurrence of one or more these events of default:

     a) any of the Debtors' chapter 11 Cases is either dismissed
        or converted to a liquidation proceeding under chapter 7
        of the Bankruptcy Code;

     b) a trustee or examiner with the expanded powers of a
        trustee is appointed for any of the Debtors in any of the
        Chapter 11 Cases;

     c) any of the Debtors ceases operation of any of its
        businesses or takes any material action without the prior
        written consent of the DIP Agent;

     d) any sale of Postpetition Collateral (other than in the
        ordinary course of business) is approved without the
        consent of the DIP Agent;

     g) any other super-priority claim or lien equal or superior
        in priority to that granted pursuant to or permitted
        hereunder shall be granted; or

     h) the automatic stay is lifted so as to allow a third party
        to proceed against any material asset of the Debtors.

     i) non-compliance or default by the Debtors with any of the
        terms of the DIP Financing Agreement or the proposed
        budget.

Buehler, LLC, and Buehler of Carolinas, LLC, wholly owned
subsidiaries and debtor-affiliates of Buehler Foods, Inc., will
receive a maximum aggregate amount of $3 million of the proceeds
of the DIP Loan and shall be obligated only up to that amount.

A copy of the DIP Financing Agreement is available for a fee at:

    http://www.researcharchives.com/bin/download?id=050825022347

A copy of the Debtors' budget is available for a fee at:

    http://www.researcharchives.com/bin/download?id=050825021926

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


CASCADES INC: Cutting 150 Jobs to Streamline Operations
-------------------------------------------------------
Cascades Inc. plans to streamline activities at Cascades Fine
Papers Group Thunder Bay, Inc., in Ontario, which specializes in
the manufacturing of coated and specialty papers.  Cascades' plan
involves the closing of its No. 5 Paper Machine and its converting
operations.  These steps will result in a staff reduction of
approximately 150 employees by the end of 2005.  In order to
minimize the impact on customers some of the converting activities
as well as the manufacture of certain grades of paper will be
transferred to other facilities within the Fine Papers Group.

In spite of sustained efforts over the past few years to improve
profitability, this plant has continued to incur major financial
losses.  None competitive operating costs, high energy costs in
Ontario and the appreciation of the Canadian dollar versus the U.S
dollar are the main factors which have adversely affected the
performance of the Thunder Bay operations.  As well, the
unfavourable market conditions prevailing in the pulp and paper
industry have had a particularly negative impact on the print
paper sector both in terms of price and demand.

As a result of the streamlining, Cascades expects to take a pre-
tax charge of approximately $9 million during the second half of
2005, nearly $2 million of which is non-cash.  These charges are
estimates and will be finalized by year-end.

"The measures that we are announcing . . . are unavoidable given
the economic context.  We know how much this decision will affect
our employees and we will make the efforts required to reduce the
impact.  However, these measures will enable Cascades Fine Papers
Group to restructure its Thunder Bay operations, to improve mill
economics by more than $10 million annually and to enhance the
future of the remaining 375 employees," said Gino Levesque, Vice
President, Operations, Cascades Fine Papers Group.

Mr. Levesque will meet with employees and union representatives to
explain the decision.  Over the next few weeks, the parties will
analyze various options to deal with the consequences of the staff
reduction.  As well, the company shall continue to take steps with
the government authorities to identify eligible assistance
programs for the employees affected.

Cascades, Inc., manufactures packaging products, tissue paper and
specialized fine papers.  Internationally, Cascades employs 15,400
people and operates close to 150 modern and versatile operating
units located in Canada, the United States, France, England,
Germany and Sweden.  Cascades recycles more than two million tons
of paper and board annually, supplying the majority of its fibre
requirements.  Leading edge de-inking technology, sustained
research and development, and 40 years in recycling are all
distinctive strengths that enable Cascades to manufacture
innovative value-added products.  Cascades' common shares are
traded on the Toronto Stock Exchange under the ticker symbol CAS.

                          *     *     *

As reported in the Troubled Company Reporter on Nov. 15, 2004,
Moody's Investors Service downgraded Cascades Inc.'s senior
implied rating to Ba2.  The ratings were also downgraded on
Cascades, Inc.'s secured revolver, to Ba1 from Baa3, and on its
senior unsecured notes, to Ba3 from Ba1.


CATHOLIC CHURCH: Court Suspends Portland's Payment of Legal Fees
----------------------------------------------------------------
As previously reported in the Troubled Company Reporter on May 3,
2005, Paul E. DuFresne asked the U.S. Bankruptcy Court for the
District of Oregon that Portland should not be paying for legal
counsel on behalf of other entities.  Until the question of the
ownership of the "Beneficial/equitable" assets is decided, any
payments on Portland's part for the defense of the Individuals
should be suspended.

             Co-Defendant Representation Is Common

Thomas V. Dulcich, Esq., at Schwabe, Williamson & Wyatt, PC, in
Portland, Oregon, explains to the U.S. Bankruptcy Court for the
District of Oregon that prior to the Petition Date and for a
number of years, Schwabe has provided legal representation to the
Archdiocese and certain co-defendants on tort claims asserted
against them.  The defendants were typically parish and parish
employees who were covered along with the Archdiocese and its
employees by the Archdiocesan insurance program.

As is typical in much civil litigation, Mr. Dulcich relates that
Schwabe has jointly represented co-defendants in tort and
employment cases against the Archdiocese or parishes.  However,
Schwabe's representation of co-defendants was limited to matters
in which no conflict of interest existed.  In most cases, the
arrangement has resulted in no additional fees being incurred.

Upon the filing of the bankruptcy petition, Schwabe has continued
as record counsel for the co-defendants in prepetition lawsuits,
which have been removed to the Bankruptcy Court.  Postpetition
defense activity in the lawsuits has included:

   -- removal of the actions to the Bankruptcy Court;

   -- implementation of the Accelerated Claims Resolution Process
      for mediation of the claims asserted in those actions;

   -- working on document discovery; and

   -- deposition of some of the tort claimants and certain
      individual defendants in preparation for the mediations.

Mr. Dulcich says representation of the co-defendants in those
matters has not resulted in any additional fees billed to the
Archdiocese, except perhaps some de minimus amount, which would be
difficult to quantify.  Besides, Mr. Dulcich continues, multiple
representation of co-defendants is a common occurrence in
litigation in which the co-defendants' interests are aligned.

Mr. Dulcich, therefore, believes that Schwabe:

   * will be able to continue to represent both the Archdiocese
     and the individual co-defendants in tort claims at no
     additional cost to the Archdiocese; and

   * can continue to represent certain co-defendants in certain
     matters but it will not continue to do so if circumstances
     change or if a conflict on interest arises in the future.

                        DuFresne Replies

Paul E. DuFresne points out that many of the arguments made by
Portland in favor of paying legal fees of individuals have already
been rejected by the Court in the context of paying legal fees for
living priests.  These arguments include:

   (a) payment of legal fees for the Archdiocese's employees is
       customary;

   (b) Portland is obligated as an employer to pay legal fees;

   (c) Portland's insurance covers legal fees for the
       Archdiocese's employees.

Furthermore, Portland has brought up other troubling aspects of
its representation of individuals like the conflict of interest
inherent in being the legal advocate for multiple parties with
possibly conflicting interests, and the impossibility of
adequately representing any individual at no cost.

                   Court Agrees with DuFresne

Judge Perris directs the Archdiocese of Portland in Oregon not to
pay for any services to co-defendants.

The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts.  In its Schedules of Assets and Liabilities filed with
the Court on July 30, 2004, the Portland Archdiocese reports
$19,251,558 in assets and $373,015,566 in liabilities.  (Catholic
Church Bankruptcy News, Issue No. 39; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


CATHOLIC CHURCH: Six Claimants Want More Time to File Claims
------------------------------------------------------------
On April 29, 2005, D.B.W. filed a standard proof of claim,
alleging that while a minor, three Roman Catholic priests sexually
abused him:

   * Fr. Maurice Grammond,
   * Fr. James Harris, and
   * Fr. Bernard Harris.

Two of the priests were working in parishes in the Archdiocese of
Portland in Oregon and the third was a member of the Oregon
Jesuit order.

On May 6, 2005, four of D.B.W.'s siblings filed standard proofs of
claim, alleging that one or more of the priests had also sexually
abused them as children.  Subsequent to that date, D.B.W.'s
remaining two siblings have come forward with memories of their
own abuse by one or more of the priests.

By this motion, the six siblings asks the U.S. Bankruptcy Court
for the District of Oregon for leave to file proofs of claim after
the Claims Bar Date.

D.B.W. and his siblings are represented in Portland's case by
Daniel J. Gatti, Esq., at Gatti, Gatti, Maier, Krueger, Sayer and
Associates, in Salem, Oregon, and Erin K. Olson, Esq., in
Portland.

                     D.B.W. Recounts Abuse

D.B.W. relates that the abuse perpetrated upon him by the three
priests occurred after his family was displaced by a fire in their
home.  Fr. James Harris arranged for a temporary residence for
them and organized efforts to feed and clothe them.  After this
incident, Fr. James Harris became a regular and frequent guest at
D.B.W.'s home.  Fr. James Harris would bring his brother, Fr.
Bernard Harris, along with him to visit the family on occasion.

At one time, Fr. James Harris took D.B.W. and his siblings to
visit his good friend, Fr. Grammond, in Seaside, Oregon.  The
three priests committed horrific acts of abuse against D.B.W., and
as D.B.W. recalled, against one or more of his siblings as well.

D.B.W. contacted Mr. Gatti on April 27, 2005, and met with him the
following day.  At the meeting, Mr. Gatti directed D.B.W. to
contact his siblings to determine what they remembered at time
D.B.W. was sexually abused.

Beginning May 2, 2005, D.B.W. began speaking to his siblings, and
one after the other recounted their own memories of abuse by the
three priests -- memories they had successfully repressed or
suppressed until their brothers and sisters forced them to
remember.

One by one, D.B.W.'s siblings came to Mr. Gatti and recounted
horrific abuse at the hands of the three priests.  Mr. Gatti filed
standard proofs of claim for four of the siblings the week after
the Claims Bar Date.  The remaining two have come forward more
recently, and no proofs of claim have yet been filed.

               Late-Filed Claims Must Be Allowed

On behalf of D.B.W. and his siblings, Ms. Olson reminds the Court
that in In re Dix, 95 B.R. 134, 136 (9th Cir. BAP 1988), the 9th
Circuit Bankruptcy Appellate Panel held that "whether or not to
extend a bar date is a matter within the sound discretion of the
court."  The 9th Circuit Panel further ruled that "an extension
requested after the bar date may only be granted upon a showing of
excusable neglect."

Ms. Olson asserts that the Court should accept the late-filed
claims of D.B.W.'s siblings because the late filing of the claims
was the result of "excusable neglect."

Ms. Olson contends that:

   (1) granting the delay will not prejudice Portland.  If
       allowed, the late-filed claims will be mediated during the
       Stage 2 mediations.  Nothing in the time between the Bar
       Date and the present could conceivably prejudice Portland
       since pre-mediation discovery for the Stage 2 mediations
       has not yet begun, or even been scheduled;

   (2) the delay will not impact efficient Court administration.
       The delay is de minimus in the context of the Bankruptcy
       case;

   (3) the delay was beyond the reasonable control of D.B.W.'s
       siblings and their counsel.  The siblings either repressed
       their memories or did not discover the causal connection
       between their injuries and the child abuse, nor in the
       exercise of reasonable care should they have discovered
       the causal connection between the injury and the child
       abuse, until they were contacted by their brother or other
       siblings.  They did not contact counsel until after the
       Bar Date, so it was not within counsel's reasonable
       control to file timely proofs of claim;

   (4) the siblings acted in good faith in consulting with
       counsel shortly after discovering their potential claims;
       and

   (5) the siblings' counsel acted promptly by filing Proofs of
       Claim and the request for more time to file the Claims
       after obtaining the declarations of D.B.W. and each of his
       six siblings.  No mistake or neglect is attributable to
       counsel.

Ms. Olson also points out that the enlargement of time sought is
considerably less than the two-year enlargement approved by the
9th Circuit in In re Dix.  In addition, the reasons for the
siblings' late discovery of their claims are among those
circumstances contemplated by the Court in appointing a Future
Claimants Representative.

While the Court may be tempted to disallow the late-filed claims
on the grounds that they fall within the obligations of the FCR,
Ms. Olson notes that it would better serve the various interests
of the bankruptcy case to allow the late filing of the siblings'
claims because they could be liquidated in the Stage 2 mediations
or otherwise meaningfully valued in the context of a Plan of
Reorganization.

Additionally, Ms. Olson points out that the claims of D.B.W.'s
siblings are the only claims that have accrued after the Claims
Bar Date for which an enlargement of time is sought.  It is in
Portland's best interests to have the most accurate valuation of
the claims against it before it presents a Plan of Reorganization
to the parties for approval.  Meaningfully valuing the claims of
D.B.W.'s siblings will further those interests.

Allowing D.B.W.'s siblings to participate as tort claimants in the
bankruptcy case rather than as claimants subject to the procedures
and timeline of claims under the purview of the FCR will also mean
a more timely resolution for the siblings, Ms. Olson tells Judge
Perris, since claims for which the FCR is responsible will be the
last to be resolved in the case.  As with other tort claimants,
timely resolution of the siblings' claims will promote their
healing.

D.B.W. and his siblings have sought and obtained Judge Perris'
permission to file their declarations under seal.

                          FCR Responds

David A. Foraker, the Future Claimants Representative, tells
Judge Perris that the request is unnecessary as to those claimants
who, as of April 29, 2005, were within the class of "Future
Claimants," as defined by the Court.

"The [Claimants] declarations filed under seal indicate that as of
the Claims Bar Date each of them had repressed or suppressed the
memories of the alleged child sexual abuse," Mr. Foraker says.

Mr. Foraker points out that as Future Claims Representative, he
has filed a proof of claim based on child abuse on behalf of all
Future Claimants.  Mr. Foraker suggests that the FCR Claim should
be subject to amendment by the Future Claimants themselves once
the existence of their claims become known to them.

Under established 9th Circuit precedent, the amendments relate
back to the date on which the FCR Claim was originally filed.

Accordingly, Mr. Foraker says, the proofs of claim filed by
Future Claimants should be treated as amendments to the FCR Claim
that relate back to the date on which the FCR Claim was filed.

Mr. Foraker says the siblings who were Future Claimants on the
Claims Bar Date do not need to establish "excusable neglect" under
Rule 9006(b)(1) of the Federal Rules of Bankruptcy Procedure in
order to file their own claims and be treated as creditors for
purposes of voting and distribution.

The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts.  In its Schedules of Assets and Liabilities filed with
the Court on July 30, 2004, the Portland Archdiocese reports
$19,251,558 in assets and $373,015,566 in liabilities.  (Catholic
Church Bankruptcy News, Issue No. 39; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


CHARTER COMMS: Subsidiaries Launch $8.4 Billion Exchange Offers
---------------------------------------------------------------
Charter Communications, Inc. (NASDAQ: CHTR) disclosed that Charter
Communications Holdings, LLC, and its wholly owned subsidiaries,
CCH I, LLC and CCH I Holdings, LLC, are commencing private offers
to exchange any and all of the $8.4 billion aggregate principal
amount of Charter Holdings' outstanding debt securities listed
below in a private placement for new debt securities.

The offer is made only to qualified institutional buyers and
institutional accredited investors inside the United States and to
certain non-U.S. investors located outside the United States. The
purpose of these private exchange offers is to improve Charter
Holdings' financial flexibility by extending debt maturities and
reducing indebtedness.

CCH I is offering to issue $3.525 billion aggregate principal
amount of new 11.00% Senior Secured Notes due 2015 of CCH I in
exchange for Old Notes that mature in 2009 and 2010.  Of that
amount, up to $750 million (subject to increase) principal amount
of CCH I notes is issuable in exchange for Old Notes that mature
in 2011 and 2012.  In addition, CIH is offering to issue
$4.262 billion aggregate principal amount of various series of
Senior Accreting Notes due 2014 and 2015 in exchange for any and
all of the Old 2011-2012 Notes.

For each $1,000 principal amount of tendered Old 2011-2012 Notes,
CIH will issue CIH Notes with a principal amount of $1,000 and the
same coupon as the corresponding series of Old 2011-2012 Notes.
The principal amount of CCH I Notes issuable in exchange for each
$1,000 principal amount of Old Notes is listed as follows:

                              Principal
                                Amount       Old Notes to be Exchanged
            CUSIP             Outstanding          for CCH I Notes
   ------------------------ --------------- ----------------------------
   2009-2010 Notes
   16117PAE0                $1,244,067,000  8.625% Senior Notes due 2009
   16117PAK6                   640,437,000  10.00% Senior Notes due 2009
   16117PAT7                   874,000,000  10.75% Senior Notes due 2009
   16117PAZ3                   639,567,000  9.625% Senior Notes due 2009
   16117PAL4                   318,195,000  10.25% Senior Notes due 2010
   16117PAM2                   449,500,000  11.75% Senior Discount Notes
                                            due 2010 (fully accreted)

   2011-2012 Notes
   16117PAV2                $  500,000,000  11.125% Senior Notes due 2011
   16117PAF7                 1,108,180,000  9.920% Senior Discount Notes
                                            due 2011 (fully accreted)
   16117PBB5                   709,630,000  10.00% Senior Notes due 2011
   16117PBD1                   939,306,000  11.75% Senior Discount Notes
                                            due 2011
   16117PAW0                   675,000,000  13.50%  Senior Discount
                                            Notes due 2011
   16117PBH2                   329,720,000  12.125% Senior Discount
                                            Notes due 2012


                            CCH I Notes per $1,000 Principal Amount of
                                              Old Notes
                            --------------------------------------------
                                               Early
                               Exchange     Participation      Total
            CUSIP            Consideration     Payment     Consideration
   ------------------------ -------------- -------------- --------------
   2009-2010 Notes
   16117PAE0                      $780.00         $50.00        $830.00
   16117PAK6                       808.75          50.00         858.75
   16117PAT7                       811.25          50.00         861.25
   16117PAZ3                       778.75          50.00         828.75
   16117PAL4                       778.75          50.00         828.75
   16117PAM2                       813.75          50.00         863.75

   2011-2012 Notes
   16117PAV2                      $748.75         $50.00        $798.75
   16117PAF7                       731.25          50.00         781.25
   16117PBB5                       731.25          50.00         781.25
   16117PBD1                       670.00          50.00         720.00
   16117PAW0                       768.75          50.00         818.75
   16117PBH2                       597.50          50.00         647.50

The CCH I Notes will mature on October 1, 2015 and will be secured
by a pledge of 100% of the equity interests of CCH I's subsidiary,
CCH II, LLC.  Each series of CIH Notes will mature three years
after the maturity date of the corresponding series of Old 2011-
2012 Notes.  Each series of CIH Notes will pay cash interest on
100% of the principal amount at the same rate, and on the same
dates, as the corresponding series of Old 2011-2012 Notes.  The
accreted value of each series of CIH Notes will initially be $800
per $1,000 principal amount and will accrete on a straight-line
basis to $1,000 per $1,000 principal amount on September 30, 2007.

All CCH I Notes and CIH Notes will be structurally senior to any
Old Notes that remain outstanding after consummation of the
exchange offers.  CCH I is a direct subsidiary of CIH and CIH is a
direct subsidiary of Charter Holdings.

Tenders of Old 2009-2010 Notes are not subject to proration.
Tenders of Old 2011-2012 Notes for CIH Notes are also not subject
to proration.

Tenders of Old 2011-2012 Notes for CCH I Notes are subject to
proration as follows. The aggregate principal amount of CCH I
Notes available to be issued in exchange for Old 2011-2012 Notes
will be limited to the lesser of:

     (i) $750 million (subject to increase in Charter Holdings'
         discretion) and

    (ii) the maximum amount that can be issued without causing
         the total principal amount of CCH I Notes issuable in the
         exchange offers to exceed $3.525 billion.

If the offer to issue CCH I Notes in exchange for Old 2011-2012
Notes is oversubscribed, all tendered 11.125% Senior Notes due
2011, 9.92% Senior Discount Notes due 2011 and 10.00% Senior Notes
due 2011 will be exchanged for CCH I Notes before any of the other
Old 2011-2012 Notes are exchanged for CCH I Notes.  To the extent
holders of the Old 2011-2012 Notes who tendered for CCH I Notes do
not receive CCH I Notes in the exchange offer because of the
foregoing, such holders will instead receive CIH Notes as if they
had tendered their Old 2011-2012 Notes for CIH Notes (unless they
have elected otherwise, in which case their Old 2011-2012 Notes
not accepted for CCH I Notes will be returned).

In order to be eligible to receive the early participation payment
of $50.00 in principal amount of new notes, holders must tender
their Old Notes on or prior to 5:00 PM Eastern Time (ET), on
Sept. 9, 2005, unless extended.  Eligible holders who validly
tender their Old Notes after that time will receive, for each
$1,000 principal amount of Old Notes tendered, a principal amount
of new notes equal to the total consideration for that series of
Old Notes less the early participation payment.  The early
participation payment will be paid in CCH I Notes, to the extent
Old Notes are exchanged for CCH I Notes, and will be paid in CIH
Notes, to the extent Old Notes are exchanged for CIH Notes.

Tendered Old Notes may be validly withdrawn at any time prior to
5:00 PM ET, on Sept. 9, 2005.  Tendered Old Notes may not be
withdrawn after that time.

Holders who exchange Old Notes for CCH I Notes will receive a cash
payment on the settlement date of all accrued and unpaid cash
interest to, but not including, the settlement date.  The first
payment of cash interest on each series of CIH Notes will include
an amount equal to any cash interest accrued and unpaid to, but
not including, the settlement date on the corresponding series of
Old 2011-2012 Notes exchanged for CIH Notes.  Such amount will be
paid on the first date after the settlement date on which cash
interest would be paid on the corresponding series of Old 2011-
2012 Notes so exchanged.

The new notes have not been registered under the Securities Act of
1933, as amended, and may not be offered or sold in the United
States absent registration or an applicable exemption from
registration requirements. CCH I and CIH will enter into a
registration rights agreement pursuant to which they will agree to
file an exchange offer registration statement with the Securities
and Exchange Commission with respect to the CCH I Notes and CIH
Notes.

The complete terms and conditions of the exchange offers are set
forth in the informational documents relating to the offers. The
exchange offers are subject to significant conditions that are
described in the informational documents.

Documents relating to the offers will only be distributed to
noteholders who complete and return a letter of eligibility
confirming that they are within the category of eligible investors
for this private offer. Noteholders who desire a copy of the
eligibility letter may contact Global Bondholder Service
Corporation, the information agent for the offers, at (866) 470-
3800 (U.S. Toll-free) or (212) 430-3774 (Collect).

Charter Communications, Inc. -- http://www.charter.com/-- a
broadband communications company, provides a full range of
advanced broadband services to the home, including cable
television on an advanced digital video programming platform via
Charter Digital(TM), Charter High-Speed(TM) Internet service and
Charter Telephone(TM). Charter Business(TM) provides scalable,
tailored and cost-effective broadband communications solutions to
organizations of all sizes through business-to-business Internet,
data networking, video and music services. Advertising sales and
production services are sold under the Charter Media(R) brand.

At June 30, 2005, Charter Communications' balance sheet showed a
$5.1 billion stockholders' deficit, compared to a $4.4 billion
deficit at Dec. 31, 2004.


CHARTER COMMS: Fitch Says Debt Swap Good for Credit Profile
-----------------------------------------------------------
Charter Communications, Inc. has launched a private offer to
exchange debt issued by Charter Communications Holdings, LLC, an
indirect wholly owned subsidiary of Charter for new notes issued
by CCH I, LLC, and CCH I Holdings, LLC, that Fitch Ratings
considers a positive development.  CCHI is a direct subsidiary of
CIH, and CIH is a direct subsidiary of Charter Holdings.  Up to
$8.43 billion of debt is affected by the proposed debt exchange.
Charter has an issuer default rating of 'CCC'.

Pursuant to the terms of the exchange offer, CCHI will offer up to
$3.525 billion of 11.0% senior secured notes due 2015 (new senior
secured notes) in exchange for approximately $4.166 billion of
Charter Holdings' senior unsecured notes that mature in 2009 and
2010.  The new senior secured notes will be secured by a first
lien on 100% of the capital stock of CCH II, LLC, CCHI's wholly
owned subsidiary.  While the exchange of Charter Holdings senior
unsecured notes maturing in 2009 and 2010 will take a priority, up
to $750 million of the new senior secured notes could be issued in
exchange for Charter Holdings' senior unsecured notes maturing in
2011 and 2012.

Also in accordance with the exchange offer, CIH will offer up to
$4.262 billion of senior accreting notes due 2014 and 2015 in
exchange for the same amount of Charter Holdings' senior unsecured
notes scheduled to mature in 2011 and 2012.  The new senior
secured notes along with the senior accreting notes to be issued
by CIH will be guaranteed by Charter Holdings.  Fitch believes
that Charter Holdings bondholders not participating in the
exchange will maintain existing terms and conditions including the
existing covenant structure.

From Fitch's perspective, the exchange offer extends scheduled
maturities from the 2009-2012 timeframe to the 2014-2015 timeframe
and modestly reduces outstanding debt and leverage, which are
positive developments for Charter's overall credit profile.  Pro
forma leverage (on an LTM basis) as of the end of the second
quarter after giving effect to the $300 million issuance by CCO
Holdings, LLC in August was 9.99 times (x).  Assuming a 50%
participation in the exchange, Fitch estimates pro forma leverage
of 9.83x as of the end of the second quarter.

The proposed exchange offer creates additional issuing entities
within Charter's capital structure that are structurally senior to
the bondholders at Charter Holdings.  Fitch recognizes the
structural hierarchy within Charter's intermediate holding company
structure.  However, Fitch's lack of notching between these
intermediate holding companies reflects the lack of material
credit enhancement (in the form of an operating company guaranty)
and that the proceeds from the debt raised by the intermediate
holding companies was directed to the operating company level,
which in Fitch's estimation would warrant similar treatment in a
reorganization process and similar recovery prospects.

The proposed exchange offer will not, in Fitch's opinion, improve
the company's near-term liquidity profile.  Fitch expects that the
exchange offer will have a neutral impact to the company's cash
interest requirements.  Overall, Charter's liquidity position is
supported by the $870 million available under the company's
secured credit facility, all of which is available for borrowing
under the covenant structure.  The company has nominal amounts of
debt scheduled to mature during the remainder of 2005, and, in
2006, scheduled maturities total $55.0 million.  Scheduled
maturities in 2007 total approximately $385 million.  In light of
Fitch's expectation of limited near-term EBITDA growth, Fitch does
not expect any meaningful improvement of credit protection
metrics.

Overall, Fitch's current ratings for Charter reflect the company's
highly levered balance sheet and the absence of any prospects to
meaningfully delever its balance sheet over the near term.
Additionally the ratings incorporate Fitch's expectation that
Charter will continue to generate negative free cash flow given
the company's operating profile, elevated capital expenditures,
and the increasing cash interest requirements on debt that has
converted to cash interest payment or is scheduled to convert to
cash interest payment.

For the year-to-date period ended June 30, 2005, CHTR reported
negative $361 million of free cash flow reflecting an erosion of
63% relative to the first half of 2004.  From Fitch's perspective,
the company's ability to generate free cash flow over the near
term is constrained by limited EBITDA growth prospects and the
conversion of discount notes issued by holdings to cash pay
interest.  The terms of the senior accreting notes to be issued by
CIH will contain the same cash interest conversion dates as the
existing Charter Holdings notes.


CHARTER COMMS: S&P Places Junk Corporate Credit Rating on Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'CCC+' corporate
credit rating on Charter Communications Holdings LLC on
CreditWatch with negative implications.  Charter Holdings is a
subsidiary of St. Louis, Missouri-based cable TV system operator
Charter Communications Inc., which had consolidated debt of about
$19.5 billion as of June 30, 2005 (pro forma for the August 2005
issue of $300 million, 8.75% senior notes).

The CreditWatch listing follows Charter's announcement of an
exchange offer for about $8.4 billion of various notes issued by
Charter Holdings due between 2009 and 2012 for about $6.9 billion
in accreted value of various new notes due in 2014 and 2015.  The
'CCC-' ratings on these issues also were placed on CreditWatch
with negative implications.  The 'B-3' short-term rating on the
parent company and other debt issues not part of the exchange
offer were affirmed.

"The exchange transactions will reduce onerous maturity pressure
on Charter," said Standard & Poor's credit analyst Eric Geil.
"However, we will view completion of any of the exchanges as
tantamount to a default on the original debt issue terms because
of the discount to par and the maturity extensions," he continued.

Upon completion of any exchange transactions, Standard & Poor's
will lower the corporate credit rating on Charter Holdings to 'SD'
to indicate a selective default, and lower the ratings on the
affected issues to 'D'.  Subsequently, Standard & Poor's expects
to reassign the corporate credit rating at 'CCC+'.  The new notes
would receive a 'CCC-' rating and any remaining Charter Holdings
notes also would be rated 'CCC-'.


CINCINNATI BELL: S&P Rates Proposed $400 Million Term Loan at B+
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating to
Cincinnati, Ohio-based diversified telecommunications carrier
Cincinnati Bell Inc.'s proposed $400 million secured term loan B.
A recovery rating of '3' also was assigned to the loan, indicating
the expectation for a meaningful (50%-80%) recovery in the event
of a payment default.  (These ratings are based on preliminary
information, subject to review of the final bank loan
documentation.)

In addition, the ratings on the company's $250 million revolving
credit facility and $50 million secured notes were lowered to 'B+'
from 'BB-', and the recovery rating was revised to '3' from '1' on
both.  The downgrade reflects the higher amount of secured debt
relative to the overall asset value and does not reflect any
diminution in the company's overall credit quality.

Other existing ratings for CBI and related entities, including the
'B+' corporate credit rating, were affirmed.  The rating outlook
is negative.  Proceeds from the new bank loan, together with
borrowings from the revolving credit facility, will be used to
finance the repayment of CBI's $385 million of 16% senior
subordinated discount notes due 2009, plus a $62 million
redemption premium.  This provides a modest improvement in the
company's overall net cash from operations, but does not
materially change its overall credit profile.  At June 30, 2005,
the company had $2.1 billion of total debt outstanding.

"The ratings reflect CBI's aggressive leverage, coupled with
prospects for increasing competition faced by both its incumbent
local exchange carrier, Cincinnati Bell Telephone Co., and its
majority-owned wireless subsidiary, Cincinnati Bell Wireless LLC,"
said Standard & Poor's credit analyst Catherine Cosentino.

Management is taking steps to mitigate threats to CBT, which
provides the majority of consolidated cash flow, including plans
to offer alternative video services in 2006 using ADSL2+
technology.  However, cable telephony competition poses the
potential for both increased access line losses and pricing
pressure at the ILEC.  In addition, while the overall
wireless industry has continued to grow, CBI has experienced
recent wireless subscriber losses.  The company's modest capital
spending needs, however, should enable it to continue to generate
sizable free cash flows, somewhat mitigating the aforementioned
challenges.


CREDIT SUISSE: Fitch Junks Rating on Three Certificate Classes
--------------------------------------------------------------
Fitch Ratings has taken rating actions on these CSFB Mortgage
Securities Corp. issues:

   CSFB mortgage-backed certificates, series 2001-AR7

     -- Class IV-M2 affirmed at 'A';
     -- Class IV-B affirmed at 'BBB'.

   CSFB mortgage-backed certificates, series 2001-HE8

     -- Class A-1 affirmed at 'AAA';
     -- Class M-1 affirmed at 'AAA';
     -- Class M-2 affirmed at 'AA';
     -- Class B affirmed at 'BBB-'.

   CSFB mortgage-backed pass-through certificates, series 2002-22
   Group 3

     -- Class IIIA affirmed at 'AAA';
     -- Class DB1 affirmed at 'AA';
     -- Class DB2 affirmed at 'A';
     -- Class DB3 downgraded to 'BB' from 'BBB';
     -- Class DB4 downgraded to 'CC' from 'B';
     -- Class DB5 downgraded to 'C' from 'CC'.

   CSFB mortgage backed pass-through certificates, series 2002-22
   Group 4

     -- Class IVA affirmed at 'AAA';

   CSFB mortgage-backed certificates, series 2002-32R

     -- Class M downgraded to 'BB-' from 'BBB-';
     -- Class B-1 downgraded to 'CCC' from 'BB-'.

The affirmations, affecting approximately $89.67 million of the
outstanding certificates, are due to credit enhancement and
collateral performance generally consistent with expectations.

The downgrades, affecting approximately $7.88 million of the
outstanding certificates, reflect the deterioration of CE relative
to consistent or rising monthly losses.

The above deals have pool factors (ie, current mortgage loans
outstanding as a percentage of the initial pool) ranging from 4%
to 54%.  The pools are seasoned from a range of 37 to 53 months.

The series 2001-AR7 is backed by prime adjustable-rate, fully
amortizing, first lien residential mortgage loans.  The series
2001-HE8 is collateralized by sub-prime fixed-rate mortgages
secured by first or second liens.  Credit enhancement for series
2001-AR7 and 2001-HE8 transactions consists of excess spread,
overcollateralization, and subordination.  As of the July 2005
distribution date, the credit enhancement levels for all the
classes in this transaction have increased from the original CE
levels.

The underlying trust for series 2002-22 Groups 3 and 4 consists of
two groups of mortgage loans and are cross-collateralized.  The
trust consists primarily of 15-year and 30-year fixed-rate one- to
four-family residential first mortgage loans.  As of the July 2005
distribution, the 90-plus delinquencies represent 18.88% of the
mortgage pool, while foreclosures and REO represent 5.85% and
3.94%, respectively.

The series 2002-32R trust certificates comprise primarily the
underlying certificates listed below, each of which is a
subordinate mortgage pass-through certificate previously issued by
its respective issuer.  All deals were rated by Fitch, with the
exception of CSFB series 2002-9 and 2002-10.  The underlying
certificates consists primarily of a pool of conventional, one- to
four-family mortgage loans with original terms to maturity of not
more than 30 years.

     -- CSFB 2002-5 IV-B-5, IV-B-6, IV-B-7
     -- CSFB 2002-9 I-B-4, I-B-5, I-B-6
     -- CSFB 2002-10 II-B-4, II-B-5, II-B-6
     -- CSFB 2002-18 II-B-5, II-B-6, II-B-7
     -- CSFB 2002-22 D-B-4, D-B-5, D-B-6
     -- CSFB 2002-24 I-B-4, I-B-5, I-B-6

The mortgage loans are being serviced by various entities and the
depositor is Credit Suisse First Boston.

Further information regarding current delinquency, loss, and
credit enhancement statistics is available on the Fitch Ratings
web site at http://www.fitchratings.com/ Fitch will continue to
monitor these deals.


CYCLELOGIC INC: Trustee Wants Dec. 15 as Claims Objection Deadline
------------------------------------------------------------------
Ana Maria Lozano-Stickley, the Liquidating Trustee appointed under
the confirmed Plan of Liquidation of CycleLogic, Inc., asks the
U.S. Bankruptcy Court for the District of Delaware to further
extend, until Dec. 15, 2005, her deadline to object to proofs of
claims filed against the Debtor's estate.

Ms. Lozano-Stickley explains that in addition to performing many
other tasks associated with the confirmed Plan and the Liquidation
Trust Agreement, she has been carefully analyzing and reviewing
Priority Claims and General Unsecured Claims.

A careful and thorough analysis and review of Priority Claims and
General Unsecured Claims is essential so that objections to
invalid or deficient Priority or General Unsecured Claims may be
properly filed.  But given the large number of those claims, the
process is complicated and time-consuming.

Ms. Lozano-Stickley's needs more time to analyze claims, prepare
and file additional objections to claims and, if appropriate,
consensually resolve disputed claims.

The Court will convene a hearing at 3:00 p.m., on Sept. 27, 2005,
to consider Ms. Lozano-Stickley's request.

Headquartered in Miami, Florida, CycleLogic, Inc., was an Internet
media company and wireless software provider. The Company filed
for chapter 11 protection on December 23, 2003 (Bankr. Del. Case
No. 03-13881). Joseph A. Malfitano, Esq., at Young, Conaway,
Stargatt & Taylor LLP represents the Debtor.  When the Company
filed for protection from its creditors, it listed estimated
assets of more than $100 million and estimated debts of
$10 million to $50 million.  The Court confirmed the Debtor's
chapter 11 Plan on May 25, 2004, and the Plan took effect on
July 23, 2004.  Ana Maria Lozano-Stickley is the Liquidation
Trustee under the confirmed Plan.  Alfred Villoch, III, Esq., and
Joseph A. Malfitano, Esq., at Young Conaway Stargatt & Taylor LLP
represents the Liquidating Trustee.


CYCLELOGIC INC: Trustee Wants More Time to Remove Civil Actions
---------------------------------------------------------------
Ana Maria Lozano-Stickley, the Liquidating Trustee appointed under
the confirmed Plan of Liquidation of CycleLogic, Inc., asks the
U.S. Bankruptcy Court for the District of Delaware to further
extend, until Dec. 16, 2005, or 30 days after entry of an order
terminating the automatic stay with respect to a particular action
sought to be removed, her time to file notices of removal with
regard to pre-petition civil actions.

The Court confirmed the Debtor's Plan on May 25, 2004, and the
Plan took effect on July 23, 2004.

Ms. Lozano-Stickley explains that pursuant to the confirmed Plan
and the Litigation Trust Agreement attached to the Plan, the
Liquidation Trustee may be a party to several civil actions
pending in several courts of various jurisdictions.

Ms. Lozano-Stickley gives the Court three reasons that militate in
favor of the extension:

   1) she has recently been focused on various important post-
      confirmation matters, including analyzing pre-petition
      transfers and filing preference complaints, prosecuting
      certain claim objections and negotiating settlements of
      various actions and claim objections;

   2) the extension will give her more opportunity to fully
      investigate and make fully-informed decisions concerning the
      removal of any pending pre-petition civil actions and it
      will assure that she does not forfeit valuable rights under
      28 U.S.C. Section 1452; and

   3) the extension will not prejudice the rights of the Trustee's
      adversaries because any party to a pending civil action that
      is removed may seek to have it remanded to the Court from
      which it was is removed pursuant to 28 U.S.C. Section
      1452(b).

The Court will convene a hearing at 3:00 p.m., on Sept. 27, 2005,
to consider Ms. Lozano-Stickley's request.

Headquartered in Miami, Florida, CycleLogic, Inc., was an Internet
media company and wireless software provider. The Company filed
for chapter 11 protection on December 23, 2003 (Bankr. Del. Case
No. 03-13881). Joseph A. Malfitano, Esq., at Young, Conaway,
Stargatt & Taylor LLP represents the Debtor.  When the Company
filed for protection from its creditors, it listed estimated
assets of more than $100 million and estimated debts of $10
million to $50 million.  The Court confirmed the Debtor's chapter
11 Plan on May 25, 2004, and the Plan took effect on July 23,
2004.  Ana Maria Lozano-Stickley is the Liquidation Trustee under
the confirmed Plan.  Alfred Villoch, III, Esq., and Joseph A.
Malfitano, Esq., at Young Conaway Stargatt & Taylor LLP represents
the Liquidating Trustee.


DIAMOND ENTERTAINMENT: May Sell Business Due to Liquidity Woes
--------------------------------------------------------------
Diamond Entertainment Corporation d/b/a e-DMEC reported its
financial results for the quarter ending June 30, 2005, to the
Securities and Exchange Commission in a Form 10-Q filing.

Net sales were approximately $963,000 for the quarter ended June
30, 2005, as compared to approximately $1,413,000 for the quarter
ended June 30, 2004, representing a decrease of 32%.  DVD program
net sales were approximately $680,000 for the quarter ended June
30, 2005, as compared to approximately $1,319,000 for the quarter
ended June 30, 2004, representing a decrease of approximately
$48%.  The decrease in DVD sales of approximately $639,000 was the
result of lower volume of orders received from the Company's major
customers. Videocassette net sales, of total sales, was
approximately $278,000 for the quarter ended June 30, 2005, as
compared to approximately $92,000 for the quarter ended June 30,
2004, a increase of approximately 202%.  This increase in
Videocassette sales of approximately $186,000 was the result of
liquidating Videocassette products at discounted sales prices to
the Company's major customers.  Management expects higher DVD
program sales to continue in the remaining quarters of fiscal
2006.

                          Gross Profit

Gross profit was approximately $201,000 for the three months ended
June 30, 2005, as compared to approximately $666,000 for the three
months ended June 30, 2004.  The lower gross margin of
approximately $465,000 was primarily the result of lower sales
volume together with an additional reduction in margins caused by
recording approximately $113,000 representing an inventory
allowance for videocassette inventory.  As a percentage to sales,
gross margin for the three month ended June 30, 2005 and 2004 was
21% and 47%, respectively.  The lower margin of 26% was primarily
the result of liquidating our videocassette inventory at
discounted prices and sales price erosion experienced in our DVD
line of products.

          Selling, General and Administrative Expenses

Selling expenses for the three months ended June 30, 2005, and
2004 were approximately $213,000 and $239,000, respectively.  The
decrease in selling expenses of approximately $26,000 was
primarily caused by lower expense levels in commission,
advertising, freight out expense and sales consulting fees.

General and administrative expenses for the three months ended
June 30, 2005, and 2004 were approximately $273,000 and $252,000,
respectively.  The increase in general administrative expenses of
approximately $21,000 was primarily the result of higher salaries,
and accounting fees offset by lower travel expense.

                    Other Income and Expense

Interest expense for the three months ended June 30, 2005, and
2004 was approximately $24,000 and $74,000 respectively.  The
decrease in interest expense of approximately $50,000 was
primarily the result of decreased interest from our factoring
arrangement and other short-term loans of approximately $23,000
and $27,000 respectively.  As of June 30, 2005, and 2004, the
outstanding debt of the Company was approximately, $548,000, and
$854,000, respectively.

                        Operating Income

The Company's operating loss for the three months ended
June 30, 2005, was approximately $286,000 as compared to an
operating profit of approximately $174,000 for the same period
last year.  The decrease in the Company's operating profit of
approximately $460,000 arose from a decrease in gross profit of
approximately $465,000 offset by a decrease in operating expenses
of approximately $5,000.

       Net Profit (Loss) Before Provision for Income Taxes

The Company's net loss before income taxes for the three months
ended June 30, 2005, was approximately $301,000 as compared to a
net profit of approximately $115,000 for the same period last
year.  The primary reason for the net loss before provision for
income taxes at June 30, 2005, was the Company's operating loss of
approximately $286,000 and other income and (expense) of
approximately ($15,000).

                 Liquidity and Capital Resources

The Company has four primary sources of capital which include:

   (1) cash provided by operations,

   (2) a factoring arrangement with a financial institution to
       borrow against the Company's trade accounts receivable,

   (3) funds derived from the sale of its common stock, and

   (4) a loan arrangement with a related party bearing interest at
       10%.

As of June 30, 2005 the Company's working capital deficit
decreased by approximately $68,000 from a working capital deficit
of approximately $1,036,000 at March 31, 2005, to a working
capital deficit of approximately $1,104,000 at June 30, 2005.  The
decrease in working capital deficit was attributable primarily to
increases inventory and other miscellaneous accounts, together
with decreases in other accrued expenses, provision for estimated
sales returns and related parties note payable in the aggregate
amount of approximately $1,014,000 offset by increases in working
capital deficit caused by decrease in cash and increase in
accounts payable, and customer deposits totaling approximately
$1,083,000.

                       Going Concern Doubt

Diamond Entertainment's auditors -- Pohl, McNabola, Berg and
Company, LLP, in Irvine, California -- expressed doubt about the
company's ability to continue as a going concern after looking at
the company's financial statements for the year ending March 31,
2005.  The auditors pointed to recurring losses, negative cash
flow from operations, and the company's capital deficit.

Management believes that its revenues will continue to increase
during fiscal year 2006 and will generate positive cash flows in
the third quarter of fiscal 2006.  Management anticipates cash
flow provided by operations will be adequate to operate the
business for the next twelve months.  If cash flow is not
adequate, and no other source of capital was available to the
Company, management cautions, the Company would have to sell its
business or assets.

A full-text of Diamond Entertainment's latest Quarterly Report is
available for free at http://ResearchArchives.com/t/s?10c

Diamond Entertainment Corporation d/b/a e-DMEC was formed under
the laws of the State of New Jersey on April 3, 1986.  In May
1999, the Company registered in the state of California to do
business under the name "e-DMEC".  DMEC markets and sells a
variety of videocassette and DVD (Digital Video Disc) titles to
the budget home video and DVD market.  The Company also purchases
and distributes general merchandise including children's toy
products, general merchandise and sundry items.

As of June 30, 2005, Diamond Entertainment's balance sheet showed
$1,679,262 in assets and debts totaling $2,792,035.

The Company's balance sheet shows a stockholder's deficiency of
$308,000 at June 30, 2005, compared to a deficiency of $238,000 at
March 31, 2005.


DMX MUSIC: Wants Court to Approve Settlement With CVS Pharmacy
--------------------------------------------------------------
DMX Music, Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware to approve the Settlement and
Release Agreement between them and CVS Pharmacy, Inc., resolving
the parties' dispute over the Debtors' alleged claims against CVS
for breach of contract and breach of the covenant of good faith
and fair dealing.

In October 2001, through a Request for Proposal, CVS Pharmacy
solicited bids from DMX Music and Muzak LLC, a competitor of DMX,
to enter into a long-term contract to provide music programming
for approximately 4,100 CVS stores.  DMX submitted a bid of $16
per location for five years, with the right to sell and insert a
minimum of two minutes of manufacturer funded advertising per hour
into the music provided to CVS.

DMX Music also agreed to provide CVS Pharmacy with approximately
$1 million of free equipment and installation.  DMX won the bid
and entered into a five-year written contract with CVS that called
for music services, equipment and a minimum of two minutes of
advertising.

After the DMX Contract was executed, Muzak entered into two
Contracts with CVS Pharmacy for the same stores covered by the DMX
Contract.  The DMX services in each of the stores were replaced
with Muzak's services.

Under its Contract, Muzak charged CVS Pharmacy $16 per location
for its music programming services with no advertising
requirement.  DMX Music contended that it would not be possible
for Muzak to make a profit on its contract if it only charged $16
per location without advertising revenue.  Muzak denied DMX's
allegations that it sells below cost.

On June 19, 2003, DMX Music filed a complaint against CVS Pharmacy
and Muzak in the Superior Court for the State of California,
County of Los Angeles, in the case entitled DMX Music, Inc. v. CVS
Pharmacy, Inc., Muzak, LLC, Case No. BC297762.

In the CVS Litigation, DMX Music asserted claims against CVS
Pharmacy for breach of contract, breach of the covenant of good
faith and fair dealing and claims against Muzak for predatory
pricing, unfair business practices, intentional interference with
contract and intentional interference with prospective economic
advantage.

The Muzak portion of the CVS Limitation has been fully resolved
when the Court approved a settlement agreement between DMX Music
and Muzak on June 17, 2005.  With only DMX Music's claims against
CVS Pharmacy remaining outstanding in the Litigation, the Court
has continued the proceeding pending the approval of the
Settlement Agreement between the Debtors and CVS.

       Summary of Material Terms of the Settlement Agreement

Under the terms of the Settlement Agreement:

   1) CVS Pharmacy will pay $2.4 million to the Debtors within 10
      days of CVS's receipt of the Court's final order approving
      the Settlement Agreement;

   2) the Debtors will deliver to CVS's counsel a request for
      dismissal with prejudice of all claims asserted against CVS
      in the lawsuit, in which the dismissal will be delivered
      within 10 days after CVS makes the $2.4 million payment; and

   3) upon DMX Music's receipt of the payment, the Debtors will
      discharge and release CVS Pharmacy and its affiliates from
      all claims and liabilities directly and indirectly arising
      out of CVS Litigation.

The Court will convene a hearing at 10:30 a.m., on Aug. 31, 2005,
to consider the Debtors' request.

Headquartered in Los Angeles, California, Maxide Acquisition,
Inc., dba DMX MUSIC, Inc. -- http://www.dmxmusic.com/-- is
majority-owned by Liberty Digital, a subsidiary of Liberty Media
Corporation, with operations in more than 100 countries.  DMX
MUSIC distributes its music and visual services worldwide to more
than 11 million homes, 180,000 businesses, and 30 airlines with a
worldwide daily listening audience of more than 100 million
people.  The Company and its debtor-affiliates filed for chapter
11 protection on Feb. 14, 2005 (Bankr. D. Del. Case No. 05-10431).
The case is jointly administered under Maxide Acquisition, Inc.
(Bankr. D. Del. Case No. 05-10429).  Curtis A. Hehn, Esq., and
Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub P.C., represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they estimated more than $100 million in assets and
debts.


DMX MUSIC: Wants Until Nov. 11 to File Notices of Removal
---------------------------------------------------------
DMX Music, Inc., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware to further extend, through and
including Nov. 11, 2005, within which it can file notices of
removal with respect to pre-petition civil actions pursuant to 28
U.S.C. Section 1452 and Rule 9027 of the Federal Rules of
Bankruptcy Procedure.

The Debtors give the three reasons in support of the extension:

   1) the extension is necessary because their efforts were
      initially focused on obtaining Court approval in selling
      substantially all of their assets and the formulation and
      negotiation for a consensual plan of liquidation;

   2) the extension will give them more time and opportunity to
      thoroughly review and make fully-informed decisions
      concerning the removal of each pre-petition civil action and
      will assure that they do not forfeit valuable rights under
      Section 1452 of the Bankruptcy Code; and

   3) the extension will not prejudice the rights of their
      adversaries because any party to a pre-petition civil action
      that is removed may seek to have it remanded to the state
      court pursuant to 28 U.S.C. Section 1452(b).

The Court will convene a hearing at 10:30 a.m., on Aug. 31, 2005,
to consider the Debtors' request.

Headquartered in Los Angeles, California, Maxide Acquisition,
Inc., dba DMX MUSIC, Inc. -- http://www.dmxmusic.com/-- is
majority-owned by Liberty Digital, a subsidiary of Liberty Media
Corporation, with operations in more than 100 countries.  DMX
MUSIC distributes its music and visual services worldwide to more
than 11 million homes, 180,000 businesses, and 30 airlines with a
worldwide daily listening audience of more than 100 million
people.  The Company and its debtor-affiliates filed for chapter
11 protection on Feb. 14, 2005 (Bankr. D. Del. Case No. 05-10431).
The case is jointly administered under Maxide Acquisition, Inc.
(Bankr. D. Del. Case No. 05-10429).  Curtis A. Hehn, Esq., and
Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub P.C., represent the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they estimated more than $100 million in assets and
debts.


ENRON CORP: Court Okays Turbine Claims Settlement Pacts
-------------------------------------------------------
Pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure, Reorganized Debtors Enron Corp., Enron South America
LLC, Enron Power Corp., Enron International, Inc., Enron do
Brazil Holdings Ltd. and Superior Construction Company ask the
U.S. Bankruptcy Court for the Southern District of New York to
approve a Settlement Agreement with:

    a. Claimants EPE-Empresa Produtora de Energia Ltda, EPE
       Holdings Ltd., EPE Investments Ltd., Shell Cuiaba Holdings
       Limited, and Enron Power Construction Company Ltda; and

    b. International Underwriters Munich Reinsurance Company UK
       General Branch, Allianz Cornhill Insurance PLC, Gerling
       Konzern Allgemeine Versicherungs AG, Solen Versicherungen
       AG, Converium AG and Syndicates 457 and 1173 at Lloyds,
       London, England.

EPE-Empresa, an entity indirectly owned 50% by Enron and 50% by
Shell Cuiaba, owns and operates a 480 MW thermal power plant --
the Cuiaba Power Plant -- in Mato Grosso, Brazil.

On March 15, 2001, the Claimants, the International Underwriters
and Underwriters AGF Brasil Seguros SA and IRB Brasil Resseguros
SA entered into contracts of insurance and reinsurance, which
Policies were to be effective until May 29, 2002.  Under the
terms of the Policies, the Underwriters agreed to insure and
reinsure certain property and business interruption risks related
to the Plant.

On August 25, 2001, GT11, one of the Plant's gas turbines,
suffered catastrophic failure because of a third stage turbine
blade failure.  Consequently, EPE-Empresa made claims under the
Policies for both property damage and business interruption
losses, which Turbine Claims have been denied by the
Underwriters.

In August 2002, EPE-Empresa filed a lawsuit against AGF Brasil in
the Civil Court of the Sao Paulo State Capital District Central
Court to recover $30 million in insurance proceeds under the
Policies.

The Reorganized Debtors, the Claimants and the International
Underwriters want to compromise and settle all issues regarding
the Turbine Claims.  After extensive, arm's-length and good faith
negotiations, the parties entered into the Settlement Agreement.

The principal terms of the Settlement are:

A. Settlement Amount

    To fully resolve all disputes relating to the Turbine Claims,
    the Underwriters will pay $15 million to EPE-Empresa.

B. Consent Order

    The Claimants will execute with AGF Brasil and file with the
    Brazilian Court, for its approval, an order withdrawing the
    Sao Paulo Proceeding with prejudice.

C. Releases

    The Claimants and the Underwriters will release each other
    from all claims, causes of action and liabilities arising out
    of or with respect to the Turbine Claims under the Policies.

    The Underwriters also release and forever discharge Siemens AG
    or Siemens Westinghouse Power Corporation and any of their
    affiliates from any claims.

D. Assertions of Released Claims

    If contrary to the agreed releases, any party in any manner
    seeks relief or assert a claim against a released party,
    through any suit relating to any of the released claims, then:

       -- as to claims by any of the Underwriters, the remaining
          Underwriters;

       -- as to claims by any of Shell, EPE-Empresa, EPE Holdings,
          EPE Investments, the remaining EPE Claimants; and

       -- as to claims by any of Enron Brazil, ESA, Enron, EPC,
          EI, Superior, and Enron Power, the remaining Enron
          Claimants,

    will hold any released party harmless and pay on an indemnity
    basis to the released party against whom the claim is
    asserted, but only as to a claim by a party from within their
    classification, damages, attorneys' fees and expenses incurred
    provided that the aggregate amount payable by the Claimants
    pursuant to the indemnity and all other indemnities under the
    Settlement Agreement will not exceed $35,000,000.

    Any claim for indemnity must be made within seven years from
    March 31, 2005.

    The Claimants are not responsible and will not have liability
    in any way for any suit instituted by the Underwriters,
    any party not within the classification to which it belongs,
    or any third party seeking damages from any of the
    Underwriters for matters in any way related to the Claims
    provided, however, EPE-Empresa, but no other Claimant, agrees
    that if Enron Engineering and Procurement Co. or LJM Brasil
    Company or anyone claiming by, through or under either of
    them, in any manner seeks relief against the Underwriters
    through any suit relating to, any of the Claims then it will
    hold the Underwriters harmless and pay on an indemnity basis
    damages, attorneys' fees and expenses incurred provided that
    the aggregate amount payable by EPE-Empresa will not exceed
    $35,000,000.  Any claim for indemnity must be made within
    seven years from March 31, 2005.

The Reorganized Debtors believe that the Settlement is a very
favorable development for their Chapter 11 cases as it resolves
numerous complicated legal and factual issues relating to the
Turbine Claims.

At the Reorganized Debtors' request, Judge Gonzalez approves the
Settlement.

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

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


ENRON CORP: XL Trading Holds $9.5 Million Allowed Unsecured Claim
-----------------------------------------------------------------
Reorganized Enron Corporation and its debtor-affiliates sought and
obtained Judge Gonzalez's approval of a Settlement Agreement with
XL Trading Partners Ltd.

On January 3, 2001, XL Trading entered into agreements with Enron
North America Corp. for the sale of commodities and the exchange
of cash payments based on the movement of the price indices
relating to these commodities.  On April 11, 2001, Enron Corp.
executed a guaranty in favor of XL where Enron guaranteed certain
obligations of ENA owing under the Agreements.

On October 7, 2002, XL Trading filed Claim No. 7084 against ENA
for $9,488,447 asserting amounts allegedly due under the ENA
Agreements.  For alleged obligations under the ENA Guaranty, XL
filed Claim No. 7085 against Enron for the same amount.

On November 28, 2003, Enron filed an adversary proceeding,
captioned Enron Corp. v. XL Trading Partners Ltd, seeking to
avoid the ENA Guaranty under Section 548 of the Bankruptcy Code.

Following negotiations between the Reorganized Debtors and XL
Trading, the parties arrived at the Settlement Agreement.  The
parties agreed that the ENA Claim will be allowed as prepetition,
general unsecured claim against ENA in Class 5 for $9,488,445.
The ENA Guaranty Claim will be allowed as a prepetition, general
unsecured claim against Enron in Class 185 for $2,019,466.

Additionally, the Settlement provides that the ENA Guaranty
Avoidance Action will be dismissed, with prejudice and without
costs to any party.

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


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

As previously reported in the Troubled Company Reporter on
August 9, 2005, the Trustee selected Mr. Franklin as his Claims
Auditor because of his general experience and knowledge of
insurance and workers' compensation claims.

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.


FALCON PRODUCTS: Drafts Consensual Plan with Creditors Committee
----------------------------------------------------------------
Falcon Products, Inc. (OTC: FCPR) reached an agreement with the
Official Unsecured Creditors Committee on a consensual plan of
reorganization that will allow Falcon to emerge from bankruptcy.
At a hearing before the U.S. Bankruptcy Court for the Eastern
District of Missouri, Eastern Division, on Wednesday, Aug. 24, the
Court reserved Oct. 6, 2005, for a hearing on the confirmation of
the Amended Plan.  Assuming that the requisite approvals are
received and the Court confirms the Amended Plan, Falcon expects
to exit bankruptcy within approximately 30 days of confirmation,
although there can be no assurances that such timetable can be
met.

Consistent with the plan of reorganization filed with the Court on
July 20, 2005, the Amended Plan provides for a comprehensive
reorganization and debt recapitalization.  Under the terms of the
Amended Plan, debt will be reduced from over $250 million to less
than $90 million, thereby significantly lowering the Company's
cash interest requirements and allowing more operating cash flow
to be utilized in the business.

The Amended Plan envisions a significant conversion of debt to
equity and an infusion of new capital via a rights offering to
certain unsecured creditors who qualify under Federal Securities
Laws.  The rights offering will be backstopped by funds affiliated
with Oaktree Capital Management, LLC and Whippoorwill Associates,
Inc., the co-proponents.  In addition, the Amended Plan provides
that unsecured creditors (including trade creditors and holders of
the 11-3/8% Senior Subordinated Notes) will have the right to
share in proceeds from certain causes of action.  The Amended Plan
does not provide for any distributions to holders of the junior
convertible notes or current equity holders.  Upon consummation of
the Plan, Oaktree and Whippoorwill will hold the majority of
Falcon's equity and the Company will no longer be a public
reporting entity.  The Company will make the required filings with
the Securities and Exchange Commission to terminate its public
reporting requirements.

The Company filed the Amended POR along with an amended disclosure
statement with the Court on Aug. 22, 2005.  The Company
anticipates that it will make further minor modifications to the
disclosure statement and, while there can be no assurances,
expects to receive Court approval of the disclosure statement by
Monday, Aug. 29, 2005.  After approval is received the Disclosure
Statement will be distributed to all creditors.

"We are extremely pleased to have reached an agreement with the
Official Committee as it is a significant step in clearing the
path for Falcon to emerge from bankruptcy," John S. Sumner, Jr.,
Falcon's president and chief executive officer, said.  "We
sincerely appreciate the continued support of our employees,
customers and suppliers during this process.  The Company will
continue to work hard in order to exceed the expectations of these
constituencies who have been so supportive."

Confirmation and consummation of Falcon's Amended Plan is subject
to a number of conditions including approval by certain creditors
of the Company and approval by the Bankruptcy Court.  There can be
no assurance that the Amended Plan as filed will be adopted and
approved.

Headquartered in Saint Louis, Missouri, Falcon Products, Inc.
-- http://www.falconproducts.com/-- designs, manufactures, and
markets an extensive line of furniture for the food service,
hospitality and lodging, office, healthcare and education segments
of the commercial furniture market.  The Debtor and its eight
debtor-affiliates filed for chapter 11 protection on January 31,
2005 (Bankr. E.D. Mo. Lead Case No. 05-41108).  Brian Wade
Hockett, Esq., and Mark V. Bossi, Esq., at Thompson Coburn LLP
represent the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
$264,042,000 in assets and $252,027,000 in debts.


FIBERMARK INC: Files Revised Plan & Disclosure Statement
--------------------------------------------------------
FiberMark, Inc. (OTC Bulletin Board: FMKIQ) filed a revised Plan
of Reorganization and related Disclosure Statement in the U.S.
Bankruptcy Court for the District of Vermont.

These documents, the previous versions of which were filed in June
2005, were revised to reflect the findings of the recently
unsealed independent examiner's report, including a mechanism for
litigating the causes of action identified in the report and
distributing to unsecured creditors any net recoveries received as
a result of the litigation.  Pending Bankruptcy Court approval of
the company's Disclosure Statement at the hearing now scheduled
for Sept. 9, 2005, the company's Plan of Reorganization will be
submitted to creditors for voting shortly thereafter, with a
confirmation hearing to follow as scheduled by the Court.

                     The Amended Plan

Whereas the Previous Plan offered a combination of New Common
Stock and New Notes to unsecured creditors, the New Plan offers a
combination of New Common Stock and Cash.  The New Notes were
discarded because their terms were a source of conflict among the
noteholders and carried an above-market interest rate that became
improvident in light of the impact of the delayed plan process on
the Debtors' business, operations, and financial condition.  That
impact is also largely responsible for a loss in the Debtors'
reorganization value over the last eight months and, thus, for the
reduced recoveries projected for the Debtors' unsecured creditors
under the Plan -- 54%.

The Plan also provides a mechanism by which the Reorganized
Debtors may pursue causes of action on behalf of unsecured
creditors as constituents of the Creditors Committee resulting
from Mr. Miller's investigation.

The material amendments of the Revised Plan include, among others:

   -- allowed administrative claim is increased to $12.4 million;

   -- allowed DIP Facility Claim is increased to $6.2 million;

   -- allowed priority tax claims are increased to $624,000;

   -- allowed convenience claims are increased to $835,000;

   -- GECC Equipment Financing Claim is decreased to $963,495;

   -- Banc One Equipment Financing Claim is reduced to
      $4.5 million (after giving effect to the payment due by
      Nov. 1, 2005);

   -- allowed Class 6, Coated Paper Sale/Leaseback Claim is
      decreased to $1.04 million;

   -- other secured claims are reduced to $127,000;

   -- allowed General Unsecured Claims are reduced to
      $12.4 million;

   -- Net Litigation Proceeds, if any, will be distributed by the
      Reorganized Debtors among allowed Noteholder Claims and
      General Unsecured Claims on a pro rata basis based upon the
      record of ownership of these claims existing as of the
      Distribution Record Date.  The 54% estimated recovery of the
      $345.6 million allowed Noteholder Claims and the allowed
      General Unsecured Claims will be exclusive of any Net
      Litigation Proceeds.

A Redlined copy of the Debtors' Amended Plan of Reorganization is
available at no charge at:

        http://bankrupt.com/misc/FiberMark_Redlined

                      Examiner's Report

As previously reported, the Court has determined that the report
of the independent examiner appointed in the Debtor's chapter 11
case should be unsealed, subject to certain minimal redaction.
The redacted report was unsealed on Friday, Aug. 19, 2005, absent
any motion to stay the unsealing.  A full-text copy of the
redacted 344-page report is available for free at:

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

Harvey R. Miller, the chapter 11 examiner appointed in the
Debtors' chapter 11 cases, looked into disputes among Committee
members and the Debtors concerning corporate governance issues and
fiduciary duties.  Mr. Miller is represented by Weil, Gotshal &
Manges LLP.

The U.S. trustee disbanded the creditors committee effective
July 13, 2005, after Mr. Miller conducted the investigation and
made his recommendation that the dysfunctional committee be
dissolved.

                      Exit Financing

In addition, the company received exit financing commitments for
approximately $155 million that will be effective upon the
company's emergence from chapter 11.  The financing package
includes a $75 million five-year non-amortizing term facility,
underwritten by Silver Point Finance LLC, which will be used to
fund the cash distribution of the recovery for the unsecured
creditors.  It also includes two revolving credit facilities for
working capital and general corporate purposes, underwritten by GE
Commercial Finance, including 40 million euros (approximately $50
million) for the company's German operations and $30 million for
its North American operations.  The size of the revolver for the
German operations is larger than the company's current facility to
reflect potential capital investment for additional German
production capacity.

Headquartered in Brattleboro, Vermont, FiberMark, Inc. --
http://www.fibermark.com/-- produces filter media for
transportation applications and vacuum cleaning; cover stocks and
cover materials for books, graphic design, and office supplies and
base materials for specialty tapes, wall coverings and sandpaper.
The Company filed for chapter 11 protection on March 30, 2004
(Bankr. D. Vt. Case No. 04-10463).  Adam S. Ravin, Esq., D.J.
f, Esq., David M. Turetsky, Esq., and Rosalie Walker Gray,
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 $329,600,000 in
total assets and $405,700,000 in total debts.

At June 30, 2005, FiberMark, Inc.'s balance sheet showed a
$108,891,000 stockholders' deficit, compared to a $101,876,000
deficit at Dec. 31, 2004.


FLINTKOTE COMPANY: Two Insurers Object to Exclusivity Extension
---------------------------------------------------------------
Everest Reinsurance Company fka Prudential Reinsurance Company
and Mt. McKinley Insurance Company fka Gibraltar Casualty Company
object to the Debtors' fourth request for an extension of their
exclusive periods to file a plan of reorganization and solicit
votes on that plan.

                    1991 Settlement Agreement

Everest and Mt. McKinley issued the Debtors some insurance
policies.

The Debtors commenced a civil action in the Superior Court of the
State of California in the City and County of San Francisco, Case
No. 808594, styled The Flintkote Company v. American Mutual
Liability Company, et. al, against a number of defendants,
including Mt. McKinley.  In 1991, Mt. McKinley and the Debtors
settled and disposed of this Coverage Litigation by executing four
separate but substantially similar settlement agreements, two
between Mt. McKinley and the Debtors, and two between Everest and
the Debtors.

The 1991 Settlement Agreements grant Mt. McKinley specific
informational and participatory rights with respect to the
negotiation, litigation and payment of asbestos claims.

On May 6, 2002, Mt. McKinley initiated suit in the Superior Court
of the State of California, County of San Francisco, styled Mt.
McKinley Insurance Company v. The Flintkote Company, et al., Case
No. 407641, in which Mt. McKinley seeks declaratory relief
regarding interpretation of the 1991 Settlement Agreements.  This
Settlement Agreement Litigation is still pending.

                  Trust Distribution Procedures

Trust Distribution Procedures are the very heart of any asbestos
chapter 11 plan that proposes a Section 524(g) channeling
injunction.  They determine who gets paid and in what amounts.

According to the Debtors' Fourth Exclusivity Motion, the Debtors
indicate that the Asbestos Claimants' Committee and the Future
Claimants Representative are preparing drafts of the Trust
Distribution Procedures.

Mt. McKinley questions the wisdom of allowing ACC and FCR to draft
those procedures when Section 1121 of the Bankruptcy Code bestows
exclusivity solely to a debtor -- not to non-debtor parties-in-
interest like the asbestos constituencies.

Mt. McKinley says that it should be allowed to submit a trust
agreement and TDPs for inclusion in the chapter 11 plan to be
filed by the Debtors because the Debtors admit that they are not
drafting the trust agreement and the TDPs.

                     Contractual Obligations

Mt. McKinley contends that extension of exclusivity can only lead
to costly delay because the Debtors continue to breach their post-
petition contractual obligations to Mt. McKinley.

Mt. McKinley also says that it has repeatedly expressed a desire
to participate in negotiations and the construction of a
consensual plan.  The 1991 Settlement Agreements allows Mt.
McKinley's participation in the negotiation, trial, and settlement
of asbestos claims, and obligates the Debtors to keep Mt. McKinley
informed.  Whatever negotiations of asbestos claims are occurring,
they cannot be in "good faith" because the Debtors continue to
refuse to honor Mt. McKinley's informational and participatory
rights.

                     Limitation on Extension

The recent amendments to the Bankruptcy Code indicate Congress
does not mean for debtors in bankruptcy to enjoy endless
extensions of the exclusivity period.  Section 411 of the 2005
Bankruptcy Abuse Prevention and Consumer Protection Act imposes a
new limitation on extensions of the exclusivity periods under the
Code.

The amendment sets an absolute limit for the exclusivity period to
eighteen months from the date of the order for relief.  And even
under pre-amendment analysis, a debtor's burden to justify
extensions of the exclusivity period gets heavier with each
extension it seeks and with the passage of time.

As such, though it does not control in the instant case, Mt.
McKinley respectfully requests that the Court give due
consideration to Congress' recent statutory expression of
disapproval of successive exclusivity extensions.

                        Payments of Debt

By keeping Mt. McKinley in the dark, the Debtors cannot be found
to be meeting its post-petition contractual obligations to Mt.
McKinley.

The Debtors say that they are paying debts as they come due, a
factor courts traditionally consider when considering whether to
grant an extension of exclusivity.  But post-petition obligations
include performance of non-monetary obligations, in addition to
payment of on-going business expenses.

Otherwise bankruptcy courts would grant successive extensions of
exclusivity without regard to whether, post-petition, a chapter 11
debtor was meeting supply contracts, complying with environmental
laws, or complying with Sarbanes Oxley.  The Debtors' continued
failure to deny Mt. McKinley access to the TDP and plan
negotiations is a violation of Mt. McKinley's participatory and
informational rights and therefore a violation of Flintkote's duty
to honor its post-petition obligations.

By keeping Mt. McKinley in the dark about negotiations with
asbestos claimants, Flintkote is failing to honor its post-
petition obligations to Mt. McKinley under the 1991 Settlement
Agreements.  The ACC and the FCR, not the Debtor, are preparing
the TDPs, the core of the reorganization.  Because of these, the
Fourth Exclusivity Motion should be denied.  Alternatively, if the
Court finds any merit in the Fourth Exclusivity Motion,
exclusivity should not be extended with respect to the TDPs and
the trust agreement.  Also, this Court should direct Flintkote to
immediately commence honoring its post-petition obligations to Mt.
McKinley under the 1991 Settlement Agreement.

John D. Demmy, Esq., at Stevens & Lee, P.C., and David McClain,
Esq., Tony Draper, Esq., Annie E. Catmull, Esq., and Daniel F.
Patchin, III, Esq., at McClain, Leppert & Maney, P.C., represent
the Insurers.

Headquartered in San Francisco, California, The Flintkote Company
is engaged in the business of manufacturing, processing and
distributing building materials.  The Company and its affiliate
filed for chapter 11 protection on April 30, 2004 (Bankr. Del.
Case No. 04-11300).  James E. O'Neill, Esq., Laura Davis Jones,
Esq., and Sandra G. McLamb, Esq., at Pachulski, Stang, Ziehl,
Young, Jones & Weintraub P.C., represent the Debtors in their
restructuring efforts.  When the Debtor filed for protection
from its creditors, it estimated assets and debts of more than
$100 million.


G-FORCE 2005-RR2: Fitch Places Low-B Ratings on Six Cert. Classes
-----------------------------------------------------------------
G-FORCE 2005-RR2 LLC, series 2005-RR2, commercial mortgage-backed
securities pass-through certificates are rated by Fitch Ratings:

     -- $90,235,000 class A-1 'AAA';
     -- $150,000,000 class A-2 'AAA';
     -- $250,000,000 class A-3FL 'AAA';
     -- $50,000,000 class A-4A 'AAA';
     -- $58,446,000 class A-4B 'AAA';
     -- $728,400,000 class X* 'AAA';
     -- $64,860,000 class B 'AA';
     -- $47,397,000 class C 'A';
     -- $17,462,000 class D 'A-';
     -- $21,204,000 class E 'BBB+';
     -- $23,698,000 class F 'BBB';
     -- $31,182,000 class G 'BBB-';
     -- $19,957,000 class H 'BB+';
     -- $12,473,000 class J 'BB';
     -- $11,226,000 class K 'BB-';
     -- $12,472,000 class L 'B+';
     -- $11,226,000 class M 'B';
     -- $9,978,000 class N 'B-';
     -- $114,596,545 class O 'NR'.

        * Notional Amount and Interest Only

All classes are privately placed pursuant to rule 144A of the
Securities Act of 1933.  The certificates represent beneficial
ownership interest in the trust, primary assets of which are all
or a portion of 133 classes of fixed-rate commercial mortgage-
backed securities and a whole loan real estate mortgage investment
conduit having an aggregate principal balance of approximately
$996,412,545, as of the cutoff date.

For a detailed description of Fitch's rating analysis, please see
the report titled 'G-FORCE 2005-RR2 LLC, Series 2005-RR2' dated
August 2, 2005, available on the Fitch Ratings web site at
http://www.fitchratings.com/


GLOBAL LEARNING: Court Confirms Amended Plan of Reorganization
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland confirmed
Global Learning Systems, Inc., and its debtor-affiliate's Amended
Plan of Reorganization, The Deal reports.

                        Terms of the Plan

The Debtors will be substantively consolidated.

Wachovia Bank, N.A., will receive $500,000 in satisfaction of its
$10.274 million claim.

The Reorganized Company will assume allowed priority tax claim
obligations and will pay them over a six year period with 7%
interest.  The Reorganized Company will assume allowed wage
claims, and pay 50% on the Plan's Effective Date and the 50%
balance over a four-month period following the Effective Date.

Holders of general unsecured claims will receive their pro rata
share of a $35,000 cash payment on the Effective Date and a second
$50,000 payment within 12 months after the Effective Date.  The
Debtors anticipate a recovery to unsecured creditors of
approximately 10%.

A full-text copy of the Amended Plan of Reorganization is
available for a fee at:

     http://www.researcharchives.com/bin/download?id=050825034403

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

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


GREAT ATLANTIC: Receives Requisite Consents from Noteholders
------------------------------------------------------------
The Great Atlantic & Pacific Tea Company, Inc. (NYSE:GAP) said
that, in connection with the previously announced cash tender
offers and consent solicitations for its outstanding 7-3/4% Notes
due 2007 and 9-1/8% Senior Notes due 2011, A&P has received the
requisite consents from the holders of the 7-3/4% Notes and from
the holders of the 9-1/8% Notes to amend the indenture governing
the Notes.  A&P also said that it has determined the consideration
to be paid for each series of notes in the tender offers and has
extended the eligibility to receive the consent payment.

As of 5:00 p.m., New York City time, on August 23, 2005, tenders
and consents had been received with respect to $162,287,000
aggregate principal amount of the 7-3/4% Notes (81.55% of the
total outstanding principal amount of the 7-3/4% Notes) and
$202,388,000 aggregate principal amount of the 9-1/8% Notes
(93.48% of the total outstanding principal amount of the 9-1/8%
Notes).  A&P has executed supplemental indentures with Wilmington
Trust Company, as trustee, effectuating the proposed amendments to
the Indenture, as described in the Offer to Purchase and Consent
Solicitation Statement dated August 10, 2005.

The total consideration, excluding accrued and unpaid interest,
for each $1,000 principal amount of 7-3/4% Notes validly tendered
(and not validly withdrawn) is $1,045.66, which includes a $30.00
consent payment.

The total consideration, excluding accrued and unpaid interest,
for each $1,000 principal amount of 9-1/8% Notes validly tendered
(and not validly withdrawn) is $1,099.50, which includes a $30.00
consent payment.

The total consideration was determined using standard market
practice of pricing to the maturity date, in the case of the
7-3/4% Notes, and earliest redemption date, in the case of the
9-1/8% Notes, at a fixed spread of 75 basis points over the bid
side yield on the 3.75% Treasury Notes due 3/31/07 in the case of
the 7-3/4% Notes, and 50 basis points over the bid side yield on
the 3.00% Treasury Notes due 12/31/06 in the case of the 9-1/8%
Notes, determined at 2:00 p.m. New York City time, on August 24,
2005 as reported by the Bloomberg Government Pricing Monitor.

Under the revised terms of the tender offers and consent
solicitations holders who tender after the Consent Date but prior
to the Expiration Date will now be eligible to receive the total
consideration, which includes the consent payment of $30.00.
Previously holders who tendered after the Consent Date but prior
to the Expiration Date would have only been eligible to receive
the tender offer consideration, which equals the total
consideration less the consent payment.

The tender offers will expire at 11:59 p.m., New York City time,
on September 7, 2005, unless extended, with respect to either
series of notes.  Payment for the tendered notes will be made
promptly after the expiration of the tender offers if the notes
are accepted for purchase.  Consummation of the tender offers, and
payment for the tendered notes, is subject to the satisfaction or
waiver of various conditions.

Lehman Brothers Inc. is acting as the sole Dealer Manager and
Solicitation Agent for the tender offers and the consent
solicitations.  The Tender Agent and Information Agent is D.F.
King & Co., Inc.

Requests for documentation should be directed to D.F. King & Co.,
Inc. at (800) 949-2583 or (212) 269-5550 in the case of banks and
brokerage firms.  Questions regarding the tender offers and the
consent solicitations should be directed to Lehman Brothers at
(212) 528-7581 or toll free at (800) 438-3242.

Headquartered in Montvale, New Jersey, The Great Atlantic &
Pacific Tea Company, Inc. operates 637 supermarkets in 10 states,
the District of Columbia and Ontario, Canada.  Sales for the
fiscal year ended February 26, 2005 were approximately $10.8
billion.

                        *     *     *

As reported in the Troubled Company Reporter on July 22, 2005,
Moody's Investors Service placed the ratings of The Great
Atlantic & Pacific Tea Company, Inc. on review for possible
upgrade following the announcement that its subsidiary, A&P
Luxembourg S.a.r.l., had entered into an agreement to sell A&P
Canada for total consideration of the Canadian dollar equivalent
of $1.475 billion.  The review for possible upgrade reflects the
anticipated significant increase in cash and material reduction in
debt when the transaction is completed around mid-August.

Ratings placed under review for possible upgrade:

The Great Atlantic & Pacific Tea Company, Inc.:

   * Corporate Family rating at B3
   * Senior secured and guaranteed bank agreement at B2
   * Senior unsecured notes at Caa1

   * Multi-seniority shelf at (P)Caa1 for senior, (P)Caa2 for
     subordinated, (P)Caa2 for junior subordinated, and (P)Caa3
     for preferred stock.

   * Speculative Grade Liquidity Rating of SGL-3

A&P Finance I, A&P Finance II and A&P Finance III:

   * Trust preferred securities shelf at (P)Caa2


HEILIG-MEYERS CO: Has $65.9 Mil. in Assets to Pay $681 Mil. Debts
-----------------------------------------------------------------
Heilig-Meyers Company reported its operational results for the
period from March 1, 2005, to June 30, 3005.  The financial
statements delivered to the Securities and Exchange Commission do
not include HMY Roomstore, Inc.'s operations.

As reported in the Troubled Company Reporter on May 20, 2005,
Roomstore is the only business entity among the Debtors emerging
as a reorganized Debtor.  The other Debtors are liquidating.

Without Roomstore, Heilig-Meyers' equity deficit widened to
$614,951,000, from a $563,408,000 deficit at Feb. 28, 2005.  The
increase in stockholders' deficit is attributable to a $60,483,000
net loss during the period.  The bulk of the costs incurred during
the period were bankruptcy-related expenses.

Heilig-Meyers' June 30 balance sheet shows that the failed
furniture retailer has $65,949,000 in assets to satisfy debts
totaling to $680,901,000.

A full-text copy of the Heilig-Meyers' recent regulatory filing is
available for free at http://ResearchArchives.com/t/s?109

Heilig-Meyers Company filed for chapter 11 protection on
Aug. 16, 2000 (Bankr. E.D. Va. Case No. 00-34533), reporting
$1.3 billion in assets and $839 million in liabilities.  When the
Company filed for bankruptcy protection it operated hundreds of
retail stores in more than half of the 50 states.  In April 2001,
the company shut down its Heilig-Meyers business format.  In
June 2001, the Debtors sold its Homemakers chain to Rhodes, Inc.
GOB sales have been concluded and the Debtors are liquidating
their remaining Heilig-Meyers assets.  Bruce H. Matson, Esq., Troy
Savenko, Esq., and Katherine Macaulay Mueller, Esq., at LeClair
Ryan, P.C., in Richmond, Va., represent the Debtors.


HILLMAN GROUP: S&P Places B Corporate Credit Rating on Watch
------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B' corporate credit
and senior secured bank loan ratings on Hillman Group Inc. on
CreditWatch with negative implications.

Total debt outstanding was about $378 million as of March 31,
2005, for this Cincinnati, Ohio-based manufacturer and distributor
of fasteners and other hardware to the retail trade.

The CreditWatch placement follows the company's announcement of
further material weakness in internal controls over financial
reporting as of Dec. 31, 2004, through June 30, 2005.  The company
disclosed that it will delay its 10-Q filing for the second
quarter ended June 30, 2005, due to issues regarding the company's
method of accounting for income taxes and recognition of revenue
(disclosed in 8-K filing on Aug. 16, 2005).

Furthermore, the Hillman Group stated that as a result of these
issues, the financial statements on form 10-K for 2004 and interim
financial statements for the first quarter of 2005 and the first,
second, and third quarters of 2004 should no longer be relied
upon.  The company intends to restate its interim and annual
financial statements for 2004 and 2003, its annual financial
statements for 2002, and its interim financial statements for the
first quarter of 2005.  The Hillman Group currently expects to
file its amended 10-K for 2004 and its second quarter 2005 10-Q by
Sept. 9, 2005.

Standard & Poor's will meet with management to evaluate the
company's internal controls and assess the effect on Hillman
Group's financial results.


INTERLINE BRANDS: Names Michael DeDomenico to Board of Directors
----------------------------------------------------------------
Interline Brands, Inc. (NYSE: IBI) elected Michael DeDomenico as a
member of the Company's Board of Directors effective Aug. 24,
2005.   Mr. DeDomenico is Chairman and Chief Executive Officer of
NuCO2 (Nasdaq: NUCO), a national distributor of beverage gases and
services.

"We are very pleased to have Mike join our Board of Directors,"
said Michael Grebe, Interline Brands' President and Chief
Executive Officer.  "Mike has a broad background in industrial
distribution and a proven track record of executing organic and
acquisition growth strategies.  His appointment as an independent
director, and member of the Audit Committee, furthers our
commitment to maintaining the highest corporate governance
standards.

"Mr. DeDomenico has been a director of NuCO2 since June 2000 and
its Chief Executive Officer since September 2000.  In October
2001, Mr. DeDomenico was elected Chairman of NuCO2's board.

Prior to joining NuCO2, Mr. DeDomenico was President and Chief
Executive Officer of Praxair Distribution, Inc., a subsidiary of
Praxair Inc.  Mr. DeDomenico had been employed by Union Carbide
Corp., the former parent of Praxair, in various capacities since
1969.  Mr. DeDomenico has a B.S. degree in economics and finance
from Hofstra University and an M.B.A. degree from Georgia State
University.

Interline Brands, Inc., is a leading national distributor and
direct marketer with headquarters in Jacksonville, Florida.
Interline provides maintenance, repair and operations products to
approximately 150,000 professional contractors, facilities
maintenance professionals, specialty distributors, and other
customers across North America and Central America.

                         *     *     *

As reported in the Troubled Company Reporter on July 13, 2005,
Standard & Poor's Ratings Services assigned its 'BB' bank loan
rating and '1' recovery rating to Jacksonville, Florida-based
Interline Brands Inc.'s $150 million term loan due 2010, which
replaces Interline's previous $100 million term loan due 2009.

At the same time, Standard & Poor's raised its bank loan rating to
'BB' from 'BB-' and assigned its '1' recovery rating to
Interline's $100 million revolving credit facility due 2008.
Standard & Poor's also affirmed its 'BB-' corporate credit rating
and 'B' senior subordinated debt rating on Interline.  S&P said
the outlook is stable.


INTERSTATE BAKERIES: 189 Trade Creditors Transfer $9.8MM in Claims
------------------------------------------------------------------
From February 24 to March 30, 2005, the Clerk of the U.S.
Bankruptcy Court for the Western District of Missouri recorded 189
claim transfers to:

(a) 3V Capital Management, LLC

           Creditor                           Claim Amount
           --------                           ------------
           Calise & Sons Bakery, Inc.             $481,670
           Capital Distribution Company, LLC       105,770

(b) Contrarian Funds, LLC

           Creditor                           Claim Amount
           --------                           ------------
           AgReserves Inc. d/b/a Berberian        $223,544
           Nut Co.

(c) Debt Acquisition Company of America V, LLC

           Creditor                           Claim Amount
           --------                           ------------
           Above All Cleaning Services                 $70
           Advanced Business Solutions                 521
           Advocate                                    166
           ALS Maintenance, LLC                        389
           Anderson Pest Control                       773
           Autocraft                                   375
           Boerner Truck Center                        332
           Brian M. Beahm                              175
           Browns Janitorial Service                   464
           Cagle Electric                               66
           Capital City Press                          818
           Carr Distributingwell-Worth                 324
           Central Illinois Cleaning                   200
           Charles D. Jones Co., Inc.                  920
           Class A Lawn & Landscape                    479
           Clearwater Systems                           63
           Coast Caster                                537
           Community Lawn Service, Inc.                360
           Condell Acute Care                          302
           Coverall North America, Inc.              3,835
           Cox Media Kansas                            526
           Dave's Towing                                50
           David Beard, Sr.                             65
           Deb Puckett & Associates                    914
           Diamond Springs                             493
           Ed Bowes-EVB, Inc.                           65
           G Baker Distributing                        835
           Grangeville New Meadows Auto Freight, Inc.  151
           Halls Warehouse Corp.                       692
           Hugos Locksmithing & Keys, Inc.              75
           IHC WorkMed - Ogden                         191
           Industrial Truck Sales & Service          1,164
           ITM, LLC                                     65
           James Lawn Service, James Lybrand           495
           James P. McNair Co., Inc.                   226
           Jim's Specialty Shop                        410
           JJ Lawn Service                             550
           Johnson Mechanical Heating & Cooling        172
           Joseph P. Ledoux, Jr.                       650
           J Ryland Earth Renovations                  225
           Kent's Welding & Radiator                   961
           Lemack's Construction, Inc.                 120
           Linda Howard                                459
           Magiera Diesel Injection                  1,279
           Marty's Cleaning Service                    470
           Midway Auto Parts & Salvage                  80
           Midwest Linen & Uniform                     116
           Murray City Corp. 2521-2500               1,876
           National Salt Supply                        947
           Norris Heating & Air, Inc.                  202
           Ohara True Value                             54
           Orlando Business Machines, Inc.             133
           Preferred Fire Safety                       254
           Pure Water Delivery                         449
           Ramada Inn                                  112
           Ramada Limited Tucson West                  222
           Ram Rent - All                              110
           Ray L. Weaver                                50
           Raynor Door Sales Co., Inc.                 142
           Regency Lighting                            715
           Reliable Fire Equipment Company           1,404
           Renaissance Commercial Pest Control       2,348
           River City Communication                     80
           Roscoe Frost                                200
           Rubin Iron Works, Inc.                      257
           SBM                                         232
           Scalemen of Florida, Inc.                   216
           Sibley Radiator                             127
           Soapy's Mobile Wash                         629
           Southside Steel, Inc.                       815
           Suburban Newspapers                          70
           Sunshine Cleaning Service                    64
           Super 8 Motel Mason City                    457
           System Scale Corp.                        2,065
           The Baldewein Company                       603
           The Grounds Keeper Nursery                  208
           The Shopper's Guide                         397
           United Fire Health & Safety                 151
           United Welding                              248
           VTS, Inc.                                   535
           Water Boy, Inc., Crystal Fresh Water         81
           We Can Do, LLC                              120
           Weldon Parts, Inc. - Tulsa                  880
           Western Building Service 4287431            157
           Whataya-Nuts?                               225
           Williams Company Cleaning                   290
           William Tanskey                              65
           Work a While                                522
           Wright Wisner Dist. Corp.                   462
           Ziprint Centersinc                          249

(d) Distressed/High Yield Trading Opportunities, Ltd.

           Creditor                           Claim Amount
           --------                           ------------
           Capital Distribution Company, LLC       $43,366

(e) Fair Harbor Capital, LLC

           Creditor                           Claim Amount
           --------                           ------------
           Azusa L&W 303 0240 02 0350               $2,762
           Daugherty's Parking Lot Service           2,370

(f) KS Capital Partners, L.P.

           Creditor                           Claim Amount
           --------                           ------------
           Foran Spice Company, Inc.              $387,128

(g) KS International

           Creditor                           Claim Amount
           --------                           ------------
           Kiel Bros Oil Co., Inc.                 $88,399

(h) Longacre Master Fund, Ltd.

           Creditor                           Claim Amount
           --------                           ------------
           PacifiCorp                             $120,723
           Utah Power                               82,877

(i) Morgan Stanley Senior Funding, Inc.

           Creditor                           Claim Amount
           --------                           ------------
           Horizon Milling, LLC                 $4,236,780

(j) Madison Liquidity Investors 123, LC

           Creditor                           Claim Amount
           --------                           ------------
           AG Processing                           $86,762
           Bruce's Welding                           2,700
           Buffalo Rock Company                     14,210
           Cannon Equipment Co., Inc.                5,069
           Carroll Service                           2,805
           Central Sheet Metal Co., Inc.             1,886
           Collier Electric Co.                      2,656
           Collier Electric Company of Fort Myers      912
           Corropack Container Corp.                12,410
           Creative Inflatables                     18,825
           Excelsior Blowers Systems, Inc.           4,233
           Fox Valley Signs                          2,188
           Gate Fuel Services, Inc.                 42,063
           Graphic Impressions, Inc.                 1,810
           Herlacher Angleton Association          305,929
           Hershey Creamery                          3,297
           Information Resources, Inc.              27,806
           Kline Law Offices                         8,485
           MBA Recruitment Advertising              12,587
           Nordson Corporation                       8,169
           Pro Floors                                3,340
           Quality Towing                            1,612
           Rawl's Equipment                          3,985
           Robert S. Schwartz                       64,551
           Rudy Schmid                               1,564
           Salad Jazz Cafe                           4,005
           Sauel Caminiti                            1,866
           Sigco Sun Products                        1,482
           South Georgia Beverage                    6,252
           Star Leasing                             16,736
           The New York Blower Co.                   1,808
           Truck Parts & Equipment                   2,027
           Wise Foods, Inc.                         91,541

(k) Madison Liquidity Investors 124, LLC

           Creditor                           Claim Amount
           --------                           ------------
           Philadelphia Baking Co.                  $1,809

(l) Madison Liquidity Investors 129, LLC

           Creditor                           Claim Amount
           --------                           ------------
           Bakery Feeds                             $7,628
           BW Clark, Inc.                            1,482
           California Packaging                     39,051
           Carterenergy Corp.                       36,986
           Casanova Pendrill                        37,468
           Chenetall Oakrite                        30,138
           Chicago Sweeteners, Inc.                 17,132
           Cole's Sheet Metal                        3,980
           Curtis Packaging Machinery, Inc.         17,229
           Dairy Fresh Corp.                         3,725
           Deffenbaugh Disposal Service, Inc.        2,195
           Dobot, Inc.                              15,106
           Drive Line Service Of Pittsburgh          1,505
           Genesee Truck Sales                       3,309
           Green Disposal                            2,838
           Halcyon Fund, L.P.                      122,179
           Harvard Pest Control, Inc.                4,795
           Hodges Trucking Company                   5,020
           Iesi Alex                                 2,144
           Initial Security                         22,262
           Key Refrigeration                         1,752
           Load Control                              1,661
           Mercury Plastics, Inc.                    7,604
           Midtown Pallet Recycle                   25,268
           North Carolina Dept. of Transportation    8,024
           Old Dominion Peanut Corp.                 4,086
           Pacific Radiator Sales & Service          1,283
           Presnell Equipment and Truck Repair       2,111
           Purcell Tire Company                      3,577
           Quality Refrigeration                     2,414
           Royal Battery Distributors                4,014
           Sentry Roofing, Inc.                     27,958
           Stewart Industries                        2,485
           Tab Label Co.                             2,463
           Talon Ind., Inc.                          5,095
           Vitamins, Inc.                            2,500

(m) Madison Niche Opportunities, LLC

           Creditor                           Claim Amount
           --------                           ------------
           Aurora Power Resources                   $3,217
           Best Access Systems                       4,274
           Boyd's Janitorial Service                 1,225
           Ind. Supply & Service                     5,777
           Jesse Sherrell                           10,000
           Limon's Road Service                        932
           Rescue Rooter                             1,608

(n) Sierra Liquidity Fund

           Creditor                           Claim Amount
           --------                           ------------
           Bay Area Indus. Filtration, Inc.         $1,381
           Cross Midwest & Tire                      3,024
           D & D Wholesale Distributors, Inc.       12,538
           Days Inn - Phoenix Mesa                   2,154
           Industrial Supply & Drives, Inc.          3,291
           Protection Engineering, Inc.              6,624

(o) Stark Event Trading Ltd.

           Creditor                           Claim Amount
           --------                           ------------
           Glopak Inc.,                         $2,014,747
           Lou Misterly Food Sales                 598,237
           Trailco Terminal Service                 26,474

(p) Trade-Debt.net

           Creditor                           Claim Amount
           --------                           ------------
           City of Enid Dept. of Finance              $227
           Super 8 Motel Mason City                    457

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


IPCS INC: AIG Entities, et al., Register 2.88 Mil. Shares for Sale
------------------------------------------------------------------
iPCS, Inc., delivered a Registration Statement to the Securities
and Exchange Commission to permit these stockholders to resell
their 2,888,563 shares of the Company's common stock:

The Selling Stockholders are:

      Selling Shareholder                        Shares for Sale
      -------------------                        ---------------
      AIG Annuity Insurance Company                      387,553
      AIG Life Insurance Company                             712
      AIG Retirement Services, Inc.                      170,979
      SunAmerica Life Insurance Company                  777,672
      The Variable Annuity Life Insurance Co.            387,553
      VALIC Company II Strategic Bond Fund                27,071
      SunAmerica Income Funds - High Yield Bond          336,972
      SunAmerica Series Trust - High Yield Bond          418,187
      SunAmerica Income Funds - Strategic Bond Fund       59,130
      VALIC Company II High Yield Bond Fund               57,706
      SPCP Group, L.L.C.                                   7,938
      Timothy M. Yager                                   128,545
      Executive officers & directors as a group          128,545

The selling stockholders obtained their shares in connection with
the consummation of the Company's merger with Horizon PCS, Inc.
The Company will not receive any proceeds from the sale of these
shares.

The Company's common stock is quoted on the OTC Bulletin Board
under the ticker symbol "IPCX".  The Company's share price hit a
$30.50 low in June and climbed as high as $43 this month.

A full-text copy of the Prospectus is available for free at
http://ResearchArchives.com/t/s?110

                        About AIG Global

AIG Global Investment Corp. (a subsidiary of American
International Group, Inc.) is the investment adviser of:

   * AIG Annuity Insurance Company,
   * AIG Life Insurance Company,
   * AIG Retirement Services, Inc.,
   * SunAmerica Life Insurance Company, and
   * The Variable Annuity Life Insurance Company, and

is the investment sub-adviser of:

   * VALIC Company II Strategic Bond Fund,
   * SunAmerica Income Funds - SunAmerica High Yield Bond Fund,
   * SunAmerica Income Funds - SunAmerica Strategic Bond Fund, and
   * VALIC Company II High Yield Bond Fund.

AIG SunAmerica Asset Management Corp. is the investment adviser of
SunAmerica Series Trust-High Yield Bond Portfolio.

As the investment adviser and investment sub-adviser of these
entities, AIG Global Investment Corp. and AIG SunAmerica Asset
Management Corp. have investment discretion over securities held
by these entities.

Mr. Langdon, one of the Company's directors, is a Managing
Director of AIG Global Investment Corp.

                           About iPCS

iPCS, Inc. -- http://www.ipcswirelessinc.com/-- is the PCS
Affiliate of Sprint with the exclusive right to sell wireless
mobility communications, network products and services under the
Sprint brand in 80 markets including markets in Illinois,
Michigan, Pennsylvania, Indiana, Iowa, Ohio and Tennessee.  The
territory includes key markets such as Grand Rapids (MI), Fort
Wayne (IN), Tri-Cities (TN), Quad Cities (IA/IL), Scranton (PA)
and Saginaw-Bay City (MI).  As of June 30, 2005 and giving effect
to the July 1, 2005 completion of its merger with Horizon PCS,
iPCS's licensed territory had a total population of approximately
15.0 million residents, of which its wireless network covered
approximately 11.3 million residents, and had approximately
459,000 subscribers.  iPCS is headquartered in Schaumburg,
Illinois.

On Feb. 23, 2003, iPCS and its wholly owned subsidiaries filed
voluntary petitions seeking relief from creditors pursuant to
Chapter 11 of the Bankruptcy Code in the United States Bankruptcy
Court for the Northern District of Georgia.  iPCS filed its plan
of reorganization with the Bankruptcy Court on March 31, 2004. On
April 30, 2004, iPCS Escrow Company, a newly formed, wholly owned
indirect subsidiary of iPCS, completed an offering of $165.0
million aggregate principal amount of 11.50% senior notes due
2012. The Company's plan of reorganization was confirmed on July
9, 2004 and declared effective on July 20, 2004.

With the effectiveness of the plan of reorganization, iPCS Escrow
Company was merged with and into iPCS and the senior notes became
senior unsecured obligations of iPCS.  Other significant items of
the reorganization that occurred on July 20, 2004, included the
repayment and cancellation of iPCS' senior credit facility from
the proceeds of the $165.0 million senior notes offering, the
cancellation of its common stock held by a liquidating trust, the
cancellation of its $300.0 million 14% senior notes along with
other unsecured claims in exchange for the Company's new common
stock, the assumption of its amended Sprint affiliation agreements
and the settlement of its previously stayed litigation against
Sprint.

                         *     *     *

As reported in the Troubled Company Reporter on July 22, 2005,
Standard & Poor's Ratings Services affirmed its ratings on
Schaumburg, Illinois-based Sprint PCS affiliate iPCS Inc.,
including its 'CCC+' corporate credit rating and 'CCC' senior
unsecured debt rating.  S&P said the outlook is developing.

Standard & Poor's also affirmed its 'CCC' rating on the senior
unsecured debt of another Sprint PCS affiliate, Horizon PCS Inc.
These affirmations follow the recently completed merger of Horizon
into iPCS Inc.  Under the terms of the merger agreement, iPCS
became the obligor of Horizon PCS's $125 million senior notes.
Pro forma for the merger, total debt outstanding is about
$290 million.


IPCS INC: Additional SilverPoint Shares Registered for Sale
-----------------------------------------------------------
All of SilverPoint Capital Offshore Fund, Ltd. and Silver Point
Capital Fund, L.P.'s shares of common stock in iPCS, Inc. are
being registered for sale.

As reported in the Troubled Company Reporter yesterday, shares
representing a 3.5% equity stake in the communications company
were registered for resale by SilverPoint.  A second registration
statement delivered to the Securities and Exchange Commission this
week registered additional shares representing SilverPoint's
additional 13.3% equity stake in iPCS.

SilverPoint obtained shares of common stock in connection with the
consummation of the Company's merger with Horizon PCS, Inc.  The
Company will not receive any proceeds from the sale of these
shares.

The Company's common stock is quoted on the OTC Bulletin Board
under the ticker symbol "IPCX".  The Company's share price hit a
$30.50 low in June and climbed as high as $43 this month.

A full-text copy of the Prospectus is available for free at
http://ResearchArchives.com/t/s?110

                       About Silver Point

Silver Point Capital, L.P. investment manages the funds held by
Silver Point Capital Offshore Fund, Ltd., Silver Point Capital
Fund, L.P. and SPCP Group, L.L.C.  By virtue of its status as
investment manager, Silver Point Capital, L.P. may be deemed to be
the beneficial owner of the shares of common stock held by the
Silver Point Funds.  Mr. Edward Mule and Mr. Robert O'Shea are
Partners of Silver Point Capital, L.P. and have voting and
investment power with respect to the shares of common stock held
by the Silver Point Funds and may be deemed to be the beneficial
owners of the shares of the common stock held by the Silver Point
Funds.  Each of Messrs. Mule and O'Shea disclaims beneficial
ownership of the shares of common stock held by the Silver Point
Funds, except to the extent of any pecuniary interest.  Mr.
Babich, one of iPCS' directors, is an employee of Silver Point
Capital L.P.

                           About iPCS

iPCS, Inc. -- http://www.ipcswirelessinc.com/-- is the PCS
Affiliate of Sprint with the exclusive right to sell wireless
mobility communications, network products and services under the
Sprint brand in 80 markets including markets in Illinois,
Michigan, Pennsylvania, Indiana, Iowa, Ohio and Tennessee.  The
territory includes key markets such as Grand Rapids (MI), Fort
Wayne (IN), Tri-Cities (TN), Quad Cities (IA/IL), Scranton (PA)
and Saginaw-Bay City (MI).  As of June 30, 2005 and giving effect
to the July 1, 2005 completion of its merger with Horizon PCS,
iPCS's licensed territory had a total population of approximately
15.0 million residents, of which its wireless network covered
approximately 11.3 million residents, and had approximately
459,000 subscribers.  iPCS is headquartered in Schaumburg,
Illinois.

On Feb. 23, 2003, iPCS and its wholly owned subsidiaries filed
voluntary petitions seeking relief from creditors pursuant to
Chapter 11 of the Bankruptcy Code in the United States Bankruptcy
Court for the Northern District of Georgia.  iPCS filed its plan
of reorganization with the Bankruptcy Court on March 31, 2004. On
April 30, 2004, iPCS Escrow Company, a newly formed, wholly owned
indirect subsidiary of iPCS, completed an offering of $165.0
million aggregate principal amount of 11.50% senior notes due
2012. The Company's plan of reorganization was confirmed on July
9, 2004 and declared effective on July 20, 2004.

With the effectiveness of the plan of reorganization, iPCS Escrow
Company was merged with and into iPCS and the senior notes became
senior unsecured obligations of iPCS.  Other significant items of
the reorganization that occurred on July 20, 2004, included the
repayment and cancellation of iPCS' senior credit facility from
the proceeds of the $165.0 million senior notes offering, the
cancellation of its common stock held by a liquidating trust, the
cancellation of its $300.0 million 14% senior notes along with
other unsecured claims in exchange for the Company's new common
stock, the assumption of its amended Sprint affiliation agreements
and the settlement of its previously stayed litigation against
Sprint.

                         *     *     *

As reported in the Troubled Company Reporter on July 22, 2005,
Standard & Poor's Ratings Services affirmed its ratings on
Schaumburg, Illinois-based Sprint PCS affiliate iPCS Inc.,
including its 'CCC+' corporate credit rating and 'CCC' senior
unsecured debt rating.  S&P said the outlook is developing.

Standard & Poor's also affirmed its 'CCC' rating on the senior
unsecured debt of another Sprint PCS affiliate, Horizon PCS Inc.
These affirmations follow the recently completed merger of Horizon
into iPCS Inc.  Under the terms of the merger agreement, iPCS
became the obligor of Horizon PCS's $125 million senior notes.
Pro forma for the merger, total debt outstanding is about
$290 million.


KAISER ALUMINUM: Insurers & HSBC Balk at Solicitation Procedures
----------------------------------------------------------------
As reported in the Troubled Company Reporter on August 4, 2005,
Kaiser Aluminum Corporation and its debtor-affiliates ask Judge
Fitzgerald to approve a set of uniform noticing, balloting, voting
and tabulation procedures to be used in connection with asking
creditors to vote to accept the Plan.  The Solicitation and
Tabulation Procedures also include special provisions relating to
holders of Channeled Personal Injury Claims, other than Indirect
Channeled PI Claims, and holders of Voting Debt Securities,
Interest in KAC or KACC and Senior Subordinated Notes.

                            Objections

(1) Ace Property, et al.

Six insurers -- who issued certain insurance policies that may
provide coverage for certain direct channeled personal injury
claims -- propose that they be provided at least 180 days after
the approval of any amended Disclosure Statement to complete
discovery prior to any scheduled confirmation hearing.

The Insurers are:

   * ACE Property & Casualty Company,
   * Central National Insurance Company of Omaha,
   * Century Indemnity Company,
   * Industrial Indemnity Company,
   * Industrial Underwriters Insurance Company, and
   * Pacific Employers Insurance Company.

Thomas G. Whalen Jr., Esq., at Stevens & Lee, P.C., in
Wilmington, Delaware, explains that the Bankruptcy Code and the
Federal Rules of Bankruptcy Procedure provide a mandatory,
comprehensive scheme in which a debtor can seek approval of a
proposed plan of reorganization through the solicitation of votes
from the holders of allowed claims and interests.

In violation of those statutory prerequisites to voting, Mr.
Whalen believes that the Remaining Debtors' Voting Procedures
Motion suggests a short-circuited solicitation procedure that
conforms their desires for expediency, yet sacrifices judicial
scrutiny that ensures the integrity of the confirmation process.

To be eligible to vote, Mr. Whalen explains, the holders of
Direct Channeled Personal Injury Claims must:

   -- hold a "claim" that is cognizable in bankruptcy;

   -- have either filed a proof of claim or had it deemed filed;
      and

   -- had that claim allowed, or temporarily allowed under
      Bankruptcy Rule 3018.

"It appears that certain holders of Direct Channeled Personal
Injury Claims being sent Solicitation Packages to allow them to
vote do not -- and can never -- meet those threshold
requirements," Mr. Whalen asserts.

Mr. Whalen tells Judge Fitzgerald that an approval of the Voting
Procedures Motion would violate Section 1126 of the Bankruptcy
Code by providing voting rights to possibly thousands of persons
who have suffered no injury and, accordingly, have no claims at
all as a matter of law.

Moreover, Mr. Whalen notes that Bankruptcy Rule 3018 can only be
used to temporarily allow a cognizable claim that has been filed
or deemed filed.  As such, the legal preconditions for voting on a
plan may not be met by simply permitting voting by any "known
holders of claims."  To temporarily allow claims for voting
purposes pursuant to the Voting Procedures Motion as to those non-
creditors would impermissibly and unfairly enlarge the rights of
parties to participate in the plan voting process.

Mr. Whalen further argues that the Voting Procedures Motion did
not define or articulate what "known holders of claims" actually
means.  Presumably, that includes any person that holds a mere
"demand."  Under Section 1126(a), demands are not claims and may
not vote on a plan.

"[T]he ballots being sent as part of the Solicitation Packages do
not request, nor provide, information sufficient for [the] Court
to determine that purported 'known holders of claims' have even
prima facie tort claims," Mr. Whalen states.

Mr. Whalen says that at a minimum, the Voting Procedures Motion
should require all persons seeking to vote on the Plan to provide
the Court with basic facts about their exposure to the
Reorganizing Debtors' products and conduct and provide specified
evidence linking the claimants alleged injury to the asbestos
exposure.

"Considering that the Disclosure Statement is facially incomplete,
and that there is extensive discovery that the Insurers will
require to adequately prepare meaningful objections to
confirmation of the Plan, the timetable for the Confirmation
Hearing is unreasonably short," Mr. Whalen contends.

Accordingly, the Insurers ask the Court to deny the Remaining
Debtors' request or, in the alternative, modify the terms to
adhere to the applicable legal standards.

(2) HSBC

HSBC Bank USA, National Association, argues that the Voting
Procedures Motion is "unclear" with respect to the proposed
requirements that the Remaining Debtors seek to impose on HSBC
Bank in connection with the balloting process and vote
solicitation by certain bondholders.

HSBC Bank is the successor indenture trustee under that certain
Indenture of Trust, dated as of March 1, 1997, among Industrial
Development Corporation of Spokane County in Washington, pursuant
to which Spokane County's Solid Waste Disposal Revenue Bonds
Series 1997 were issued for $19,000,000.

HSBC remains hopeful that it will receive clarification and will
be able to resolve the outstanding issues with the Remaining
Debtors prior to the Confirmation Hearing.

Headquartered in Foothill Ranch, California, Kaiser Aluminum
Corporation -- http://www.kaiseraluminum.com/-- is a leading
producer of fabricated aluminum products for aerospace and high-
strength, general engineering, automotive, and custom industrial
applications.  The Company filed for chapter 11 protection on
February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold
off a number of its commodity businesses during course of its
cases.  Corinne Ball, Esq., at Jones Day, represents the Debtors
in their restructuring efforts.  On June 30, 2004, the Debtors
listed $1.619 billion in assets and $3.396 billion in debts.
(Kaiser Bankruptcy News, Issue No. 75; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


KMART CORP: Settles Aztex Associates' Rejection Claim for $16.9MM
-----------------------------------------------------------------
J.P. Morgan Trust Company, National Association, as successor
trustee to Bank One Trust Company, N.A., filed rejection claims
against Kmart Corporation.  J.P Morgan is the security assignee of
the leases between Aztex Associates, LP, and Kmart pertaining to
18 stores and real estate holdings.

Kmart objected to the Rejection Claims.

After negotiations, the parties agree that Aztex will have an
allowed Class 5 class rejection claim for $16,947,571.

    Store No.   Location                 Allocation of Claim
    ---------   --------                 -------------------
      176       Plainview, Texas                $671,514
      179       Ponca City, Texas                735,832
      180       Arlington, Texas                 984,120
      181       San Marcos, Texas                587,664
      182       Grand Junction, Colorado         956,389
      184       Hurst, Texas                   1,083,975
      185       Albuquerque, New Mexico        1,292,709
      188       Longmont, Colorado               832,825
      189       Boulder, Colorado              1,018,419
      190       Lubbock, Texas                   904,984
      191       Fort Worth, Texas                835,063
      193       Hutchinson, Kansas               881,690
      194       Corpus Christi, Texas          1,154,092
      195       Austin, Texas                    855,862
      196       Albuquerque, New Mexico        1,032,699
      212       Phoenix, Arizona               1,132,540
      217       Phoenix, Arizona               1,158,494
      219       Irving, Texas                    828,702

The distributions on account of the Claim will be made to J.P.
Morgan.  The Claim will be satisfied in accordance with the terms
of the Plan.

The parties will be forever barred from asserting, collecting, or
seeking to collect any other amounts in connection with the Claim
and the Leases.

The U.S. Bankruptcy Court for the Northern District of Illinois
approved the terms agreed by the parties.

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


LOGAN INTERNATIONAL: Trustee Picks 7-Member Creditors Committee
---------------------------------------------------------------
The United States Trustee for Region 18 appointed seven creditors
to serve on an Official Committee of Unsecured Creditors in Logan
International II LLC and its debtor-affiliate's chapter 11 case:

      1. 12-H, Inc.
         Attn: Tyler S. Hansell, President
         77398 County Line Road
         Hermiston, Oregon 97838
         Tel: (541) 567-8939
         Fax: (541) 564-1359

      2. Pasco Farming, Inc.
         Attn: Crane Bergdahl, Esq.
         P.O. Box 2755
         Pasco, Washington 99302
         Tel: (509) 545-4950
         Fax: (509) 545-4959

      3. Boise Cascade
         Attn: Jerry Reiff, Credit Administrator
         P.O. Box 50
         Boise, Idaho 83728
         Tel: (208) 384-7902
         Fax: (208) 384-6294

      4. Cloudy & Britton, Inc.
         Attn: Ed Cloudy, President
         6202 214th Street, SW
         Mountlake Terrace, Washington 98043
         Tel: (425) 775-7424 ext. 222
         Fax: (425) 775-1715

      5. PrintPack, Inc.
         Attn: Robert P. George, Credit Manager
         500 Interchange Drive SW
         Atlanta, Georgia 30336
         Tel: (404) 460-7229
         Fax: (404) 696-5058

      6. Traffic Tech, Inc.
         Attn: Todd LaForest, VP Controller
         4275 Executive Square, Suite 250
         La Jolla, California 92037
         Tel: (514) 343-0044
         Fax: (514) 343-2624

      7. Basin Frozen Foods, Inc.
         Attn: Gregory J. Vietz, Counsel
         910 W Main, Suite 248
         Boise, Idaho 83616
         Tel: (208) 343-6882 ext. 25
         Fax: (208) 343-6883

Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense.  They may investigate the Debtors' business and financial
affairs.  Importantly, official committees serve as fiduciaries to
the general population of creditors they represent.  Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest.  If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee.  If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the chapter 11 cases to a liquidation
proceeding.

Headquartered in Irrigon, Oregon, Logan International II LLC
-- http://www.loganinternational.com/-- is a manufacturer and
wholesaler of frozen French fries.  The Debtor and its debtor-
affiliates filed for chapter 11 protection on January 18,
2005 (Bankr. D. Ore. Lead Case No. 05-38286).  Leon Simson, Esq.,
at Ball Janik LLP represents the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they estimated between $10 million to $50 million in
assets and $10 million to $50 million in debts.


MBIA INC: Names Jeffrey Yabuki to Board of Directors
----------------------------------------------------
MBIA Inc. (NYSE:MBI) disclosed the election of Jeffery W. Yabuki,
executive vice president and chief operating officer of H&R Block
Inc., to MBIA's Board of Directors.  Mr. Yabuki has oversight
responsibility for H&R Block's global tax business units, its
financial services businesses, and digital products and services.
In addition, he oversees several H&R Block corporate functions
including information technology, marketing, compliance, and
corporate development.

Recognized for his strategic leadership, Mr. Yabuki has
spearheaded several key areas of differentiation for H&R Block
including the expansion of its integrated tax and financial
services strategy and the launch of H&R Block branded services to
the digital tax marketplace.  He joined H&R Block as president of
international operations and was in that role from 1999 to 2001.
Prior to joining H&R Block Inc., Mr. Yabuki was with American
Express from 1987 to 1999 in a variety of management roles, most
recently as chief executive officer of American Express Tax and
Business Services.

MBIA Board Member and Nominating/Corporate Governance Committee
Chairperson Claire Gaudiani said, "Jeff's distinguished career
brings experience and vision especially in the area of business
expansion to MBIA's Board of Directors.  His diverse background in
business strategy, operations, sales, marketing, information
systems and accounting offers a unique set of talents and
resources complementing our strong board.  We are proud to welcome
him to MBIA."

Mr. Yabuki has a Bachelor of Science degree in business
administration from California State University at Los Angeles and
is a certified public accountant.  He holds CPA certificates in
California and Minnesota, a NASD Series 7 license, and is a past
member of the Minnesota Board of Accountancy.  He also serves on
the board of directors of PetsMart, Inc., a specialty retailer of
pet food and supplies.

MBIA Inc. -- http://www.mbia.com/-- through its subsidiaries, is
a leading financial guarantor and provider of specialized
financial services.  MBIA's innovative and cost-effective products
and services meet the credit enhancement, financial and investment
needs of its public and private sector clients, domestically and
internationally.  MBIA Inc.'s principal operating subsidiary, MBIA
Insurance Corporation, has a financial strength rating of Triple-A
from Moody's Investors Service, Standard & Poor's Ratings
Services, Fitch Ratings, and Rating and Investment Information,
Inc.

                        *     *     *

As reported in the Troubled Company Reporter on Aug. 24, 2005,
MBIA Inc. received a "Wells Notice" from the staff of the U.S.
Securities and Exchange Commission.  The Wells Notice indicates
that the Staff is considering recommending that the SEC bring a
civil injunctive action against the Company alleging violations
of federal securities laws "arising from MBIA's action to
retroactively reinsure losses it incurred from the AHERF bonds
MBIA had guaranteed, including, but not limited to, its entering
into excess of loss agreements and quota share agreements with
three separate counterparties."

The Company is engaged in discussions with the Staff concerning
the possible resolution of these charges.  The Company is also
engaged in preliminary discussions with the staffs of the New York
Attorney General's Office and the New York State Insurance
Department regarding the possible resolution of potential civil
charges that the New York Attorney General's Office might bring in
connection with the AHERF reinsurance transactions.

On November 18, 2004, MBIA received subpoenas from the Securities
and Exchange Commission and the New York Attorney General's Office
requesting information with respect to non-traditional or loss
mitigation insurance products developed, offered or sold by MBIA
to third parties from January 1, 1998 to the present.

On March 8, 2005, MBIA disclosed that it had decided to restate
its financial statements for 1998 through 2003 to correct the
accounting treatment for two reinsurance agreements that MBIA
entered into in 1998 with Zurich Reinsurance North America, which
later was re-named Converium Re upon its divesture by Zurich
Financial Services in 2001.  The restated transactions overstated
net income by $54 million during the period 1998 through 2003 by
failing to record a loss related to MBIA's insurance of bonds
issued by the Allegheny Health, Education and Research Foundation.

On March 9, 2005, MBIA announced that the U.S. Attorney's Office
for the Southern District of New York was conducting its own
investigation into losses suffered by MBIA as a result of its
insurance of the Allegheny bonds.

On March 30, 2005, the SEC and NYAG supplemented the November 2004
subpoenas with requests for documents related to MBIA's accounting
treatment of advisory fees, its methodology for determining loss
reserves and case reserves, instances of purchase of credit
default protection in itself, and documents relating to Channel
Reinsurance Ltd., a reinsurance company launched in 2004 by MBIA,
PartnerRe Ltd., RenaissanceRe Holdings Ltd., and Koch Financial
Corporation. On April 8, 2005, PartnerRe Ltd. and RenaissanceRe
Holdings Ltd. announced that they had received subpoenas from the
SEC and NYAG seeking information relating to Channel Re.


MCI INC: Connecticut AG Urges DPUC to Reconsider MCI-Verizon Deal
-----------------------------------------------------------------
Attorney General Richard Blumenthal urged the Department of Public
Utility Control (DPUC) to reconsider its preliminary decision not
to review proposed mergers between SBC and AT&T and Verizon and
MCI.

Mr. Blumenthal, joined by the Office of Consumer Counsel
(OCC), called on the DPUC to hold a hearing and to thoroughly
review the mergers' impact on consumers and Connecticut's
telecommunications market.  Blumenthal expressed concern that the
mergers will significantly reduce telecommunications competition,
thereby increasing prices, compromising service and narrowing
consumer options.

Mr. Blumenthal disputed the DPUC's claim that it lacks
jurisdiction and assured the department that it has the authority
to conduct such a review.

"These massive mergers threaten to strangle telecommunication
competition in Connecticut," Mr. Blumenthal said.  "The result
will be higher prices, lower quality of service and constricted
consumer choice.  In refusing to review these mergers, the DPUC is
abdicating its authority and obligation to promote
telecommunications competition and protect Connecticut consumers.

"The department has clear authority to review these mergers, but
it has declined to do so - leaving this vital task to regulators
in other states.  Connecticut's consumers should not have to rely
on other states to protect them from these mergers' potentially
disastrous and devastating impact on local phone service,
broadband competition and access to emerging technologies.  I urge
the DPUC to undertake a detailed and in-depth review of these
mergers and their effect on Connecticut consumers."

Mr. Blumenthal asked the DPUC to consider specific measures to
mitigate the mergers' impact on Connecticut, including:

     -- Capping residential telephone rate increases;

     -- Instituting rules to promote broadband competition; and

     -- Assuring access to VOIP (voice over internet protocol).

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. 98; 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: Exclusive Period Extended to Dec. 22
---------------------------------------------------------
Meridian Automotive Systems, Inc., and its debtor-affiliates
sought and obtained an extension from the U.S. Bankruptcy Court
for the District of Delaware of their exclusive periods to:

   (1) file a plan through Dec. 22, 2005; and

   (2) solicit and obtain acceptances of that plan through
       Feb. 20, 2006.

                    CSFB's Favorable Comments

Credit Suisse First Boston, as administrative agent and
collateral agent under the Second Lien Credit Agreement, at the
direction of holders of more than a majority in amount of
obligations, supports the Debtors' initial request to extend
their exclusive periods.

According to CSFB, the Debtors have demonstrated their ability to
manage important restructuring issues at the same time that they
run the business.

"The Second Lien Agent understands that the Debtors will now be
able to devote their energies towards completing a business plan
and meeting with the creditor constituencies within the timetable
contemplated by their postpetition financing facility with the
goal of emerging from chapter 11 without undue delay," David B.
Stratton, Esq., at Pepper Hamilton LLP, in Wilmington, Delaware,
tells the Court.

According to Mr. Stratton, CSFB believes the Debtors can deliver
a reasonably detailed business plan by Sept. 30, 2005.  "Once
this process is complete, the Second Lien Agent understands that
the Debtors and their professionals will work with the
professionals for the Second Lien Agent in their review and
diligence of the business plan."

Afterwards, Mr. Stratton says, CSFB expects plan negotiations to
begin in earnest.

The Second Lien Agent reserves its rights with respect to any
subsequent requests by the Debtors to seek an extension of
exclusivity.

Credit Suisse, Cayman Islands Branch, as agent under the
prepetition secured First Lien Credit Agreement, notes that the
proposed exclusivity extension is not unreasonable under the
circumstances, including, most importantly, the Debtors' promises
regarding the business plan and the Reorganization Plan term
sheet.

"Exclusivity should be extended as requested by the Debtors.
However, any further extension should be considered in light of
the Debtors' timely progress toward a consensual plan and the
Debtors' compliance with the other agreements made in connection
with the DIP financing," Dennis A. Meloro, Esq., at Greenberg
Traurig LLP, in Wilmington, Delaware, asserts.

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


MERIDIAN AUTOMOTIVE: Toyota Wants Stay Lifted to Collect Payments
-----------------------------------------------------------------
Before the Petition Date, Meridian Automotive Systems, Inc., and
Toyota Motor Credit Corporation entered into four Commercial
Lease Agreements.

Cambridge Industries also entered into two Commercial Lease
Agreements with Toyota, whereby Toyota leased these Equipment to
the Debtors:

    Account No.                    Leased Equipment
   -------------         ------------------------------------
   2/3 52814-001         five Toyota Forklifts Model Number
                         7FGCU30, Serial Numbers 65672, 65673,
                         65679, 65683, and 65688

   2/3 52814-002         six Toyota Forklifts Model Number
                         7FGCU25, Serial Nos. 83953, 83992,
                         84019, 84069, 84076, and 84105

   1/1 12770-007         two Toyota Forklifts Model No. 52-
                         6FGU30, Serial Nos. 61783 and 61807

   1/1 25650-008         Toyota Forklift Model number 5FBE18,
                         Serial number 36791

   1/1 25650-009         Toyota Forklift Model Number 5FBE18,
                         Serial No. 36641

   1/1 25650-010         Toyota Forklift Model No. 5FBE18, Serial
                         No. 37062

The Leases require monthly payments to Toyota as rent for the
Equipment.

As of Aug. 3, 2005, the rental for the 16 Forklifts is in
default on these accounts:

                   Monthly   Default  Postpetition  Prepetition
    Account No.    Payment    Date       Arrears      Arrears
   -------------   -------  --------  ------------  -----------
   2/3 52814-001    $2,889  08/01/05        $3,611         $289

   2/3 52814-002     3,010  07/01/05         6,085          301

   1/1 12770-007       376  current postpetition &           58
   (Matured on              paid thru Aug. 1, 2005
   Aug. 1, 2005)

   1/1 25650-008       581  current postpetition &           58
   (Mature on               paid thru Aug. 1, 2005
   Aug. 1, 2005)

   1/1 25650-009       581  current postpetition &           58
   (Matured on              paid thru Aug. 1, 2005
   Aug. 1, 2005)

   1/1 25650-010       581  current postpetition &           58
   (Matured on              paid thru Aug. 1, 2005
   Aug. 1, 2005)

The Leases require the Debtors to maintain insurance on the
Equipment and provide Toyota with evidence of the insurance.

By this motion, Toyota asks Judge Walrath to lift the automatic
stay to pursue payment on the Leases, seek proof of ongoing
maintenance, location and contact information with regard to the
Equipment, and access to the Equipment to assess its condition
and perform maintenance as necessary.

According to Kristi J. Doughty, Esq., at Whittington & Aulgur, in
Odessa, Delaware, relief from the stay is warranted because the
Debtors have failed to:

   (1) stay current with their postpetition payments;

   (2) provide Toyota with adequate protection;

   (3) provide evidence of continuing insurance;

   (4) provide proof of ongoing maintenance, location and contact
       information;

   (5) permit ongoing access to the Equipment so that Toyota may
       assess its condition and perform maintenance as necessary.

Toyota also seeks payment of attorney's fees and costs in
accordance with the Lease Agreements, which provide for
attorney's fees and other expenses incurred in the event of a
default in the enforcement of the terms of the Leases.

Furthermore, Toyota, Ms. Doughty continues, is entitled to relief
from the stay because (x) the Debtors have no equity interest in
the leased Equipment and (y) the Equipment is not necessary to an
effective reorganization.

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


MERIDIAN AUTOMOTIVE: Wants Korn/Ferry as Headhunter
---------------------------------------------------
The Board of Directors of Meridian Automotive Systems, Inc.,
terminated the employment of Meridian's then Chief Executive
Officer.  As an interim measure, the Board asked D. Thomas Divird,
a member of the Board, to serve as Meridian's interim Chief
Executive Officer.

Meridian Automotive Systems, Inc., and its debtor-affiliates ask
the U.S. Bankruptcy Court for the District of Delaware for
authority to employ Korn/Ferry International as executive search
consultant to assist them in their search for a permanent Chief
Executive Officer.

Edward J. Kosmowski, Esq., at Young Conaway Stargatt & Taylor,
LLP, in Wilmington, Delaware, relates that Korn/Ferry is one of
the world's leading executive search firms, specializing in
helping companies find senior-level management worldwide.

"Korn/Ferry's extensive data bank of successful executives, as
well as its extensive research and information processing
capabilities, provide it with a unique ability to attract the
best executive talent from a broad cross section of industries,"
Mr. Kosmowski tells the Court.  "Furthermore, as one of the best
known executive search consultants in the world, Korn/Ferry's
reputation provides it with access to top executive talent."

Thus, the Debtors believe that Korn/Ferry is uniquely qualified
to serve as their executive search consultant.

Specifically, Korn/Ferry will:

   (a) develop an understanding of the Debtors' organization and
       business operations to be as knowledgeable as possible
       about the Debtors prior to discussing the CEO position
       with prospective candidates;

   (b) develop a confidential position specification based on
       Korn/Ferry's understanding of the key success factors and
       priorities of the CEO, as well as of the candidate
       specifications sought by the Debtors, which will be shared
       with serious candidates for the CEO position;

   (c) upon the Debtors' approval of the position specification,
       Korn/Ferry will identify qualified candidates for the CEO
       position based on targeted research, database review,
       direct sourcing, and assessment of internal candidates
       from within the Debtors' organization;

   (d) interview candidates and assess their relative strengths
       and limitations;

   (e) prepare comprehensive profiles of each CEO candidate
       recommended by Korn/Ferry based on information provided by
       the candidate;

   (f) present the best qualified candidates for the Debtors'
       consideration;

   (g) conduct reference and background checks on successful
       candidates;

   (h) once a candidate is chosen, Korn/Ferry will assist the
       Debtors in formulating a competitive employment offer
       based on market data and the Debtors' compensation
       strategy; and

   (i) follow up with the Debtors following the candidate's
       placement to assist in identifying and implementing the
       Debtors' and the candidate's goals with respect to the CEO
       position.

Korn/Ferry will act as the Debtors' exclusive search consultant
throughout the search process.  The project will be staffed by
Korn/Ferry's Senior Client Partner Bradford B. Marion, Senior
Associate Alex Richardson, and Project Assistant Dhun Batlivala.

In exchange for the services, the Debtors will pay Korn/Ferry a
non-contingent, non-refundable fee equal to 33.3% of the total
first year estimated cash compensation for Meridian's new CEO.
The estimated first year cash compensation will include the CEO's
base salary, annualized target or guaranteed incentive bonus, and
any signing bonus.

In the event that the Debtors hire more than one executive as a
result of the work performed by Korn/Ferry, the Debtors will pay
a full placement fee based on estimated first year compensation
to Korn/Ferry for each additional executive hired.  The firm's
fees are neither refundable nor contingent on the success in
placing a candidate with the Debtors, and are payable whether or
not Meridian hires a new CEO.

If the Debtors opt not to hire a new CEO, Korn/Ferry will be
entitled to a $400,000 placement fee.

The Debtors will also reimburse Korn/Ferry on a monthly basis for
direct, out-of-pocket expenses.

If Korn/Ferry's engagement terminates prior to the time a new CEO
is hired, the firm will bill the Debtors for:

     (i) expenses incurred as of the date it received written
         notification of termination from the Debtors;

    (ii) expenses incurred with the Debtors' prior approval that
         cannot be cancelled; and

   (iii) payment of the pro-rata portion of any remaining
         placement fee.

The first payment of $200,000 to Korn/Ferry is non-refundable
even if the engagement terminates within the 30-day period
following approval of the Debtors' request.  The second payment
will be fully earned and non-refundable if the engagement
terminates as any time after the second payment is made.

Mr. Marion assures the Court that Korn/Ferry:

   -- is a "disinterested person" within the meaning of Section
      101(14) of the Bankruptcy Code, as required by Section
      327(a);

   -- holds no interest adverse to the Debtors or their estates
      in connection with the matters for which it is to be
      retained for; and

   -- has no connection with the Debtors, their creditors, or
      other parties-in-interest in the Debtors' Chapter 11 cases.

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


MERRILL LYNCH: Fitch Assigns Low-B Ratings to Six Cert. Classes
---------------------------------------------------------------
Merrill Lynch Mortgage Trust 2005-CIP1, commercial mortgage pass-
through certificates are rated by Fitch Ratings:

     -- $79,700,000 class A-1 'AAA';
     -- $533,800,000 class A-2 'AAA';
     -- $157,900,000 class A-3A 'AAA';
     -- $50,000,000 class A-3B 'AAA';
     -- $108,000,000 class A-SB 'AAA';
     -- $510,325,000 class A-4 'AAA';
     -- $205,675,000 class AM 'AAA';
     -- $138,830,000 class AJ 'AAA';
     -- $2,056,750,308 class XC* 'AAA';
     -- $2,008,754,000 class XP* 'AAA';
     -- $43,706,000 class B 'AA';
     -- $17,997,000 class C 'AA-';
     -- $38,564,000 class D 'A';
     -- $25,709,000 class E 'A-';
     -- $33,423,000 class F 'BBB+';
     -- $20,567,000 class G 'BBB';
     -- $25,709,000 class H 'BBB-';
     -- $10,284,000 class J 'BB+';
     -- $5,142,000 class K 'BB';
     -- $7,713,000 class L 'BB-';
     -- $7,713,000 class M 'B+';
     -- $5,142,000 class N 'B';
     -- $5,141,000 class P 'B-';
     -- $25,710,308 class Q not rated (NR).

        * Notional amount and interest only.

Class Q is not rated by Fitch.  Classes A-1, A-2, A-3A, A-3B, A-
SB, A-4, AM, AJ, XP, B, C, and D are offered publicly, while
classes XC, E, F, G, H, J, K, L, M, N, P, and Q are privately
placed pursuant to rule 144A of the Securities Act of 1933.  The
certificates represent beneficial ownership interest in the trust,
primary assets of which are 135 fixed-rate loans having an
aggregate principal balance of approximately $2,056,750,308, as of
the cutoff date.

For a detailed description of Fitch's rating analysis, see the
report 'Merrill Lynch Mortgage Trust 2005-CIP1,' dated Aug. 4,
2005, available on the Fitch Ratings web site at
http://www.fitchratings.com/


METALFORMING: Brings In DoveBid Valuation to Appraise Equipment
---------------------------------------------------------------
Metalforming Technologies, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware for permission
to employ DoveBid Valuation Services, Inc., as their appraisers,
nunc pro tunc to Aug. 19, 2005.

The Debtors chose DoveBid Valuation as their appraiser because of
the Firm's expertise, extensive knowledge and familiarity with its
business.

DoveBid Valuation will conduct an appraisal of the Debtors'
equipment located at their facilities in Milan, Saline and
Pinconning, Michigan, and in Mexico.  The Debtors say the
comprehensive appraisal of the Michigan and Mexico properties will
provide substantial benefit in connection with the proposed sale
of their assets.

As previously reported in the Troubled Company Reporter, the
Bankruptcy Court approved bidding procedures for the asset sale
that will be conducted through an open marketing and auction
process.  The Debtors intend to sell all of the assets of:

    -- their structural and tubular business;

    -- their Saline and Milan plants; and

    -- Metalform's 49% equity interests in the Lexington Joint
       Venture and the Engineered Systems business.

Zohar Tubular Acquisition, LLC, has offered to buy the assets
for $25 million and the assumption of certain postpetition
liabilities.  An auction will be conducted at 10:00 a.m. on
Sept. 26, 2005, in connection with the asset sale.  Competing
bids, if any, must exceed Zohar Tubular's offer by $750,000.

DoveBid will charge the Debtors $20,500, plus reimbursement of
actual out-of-pocket expenses, for the appraisal services.  The
Debtors will pay half of the appraisal fee prior to the appraisal
and the balance due upon completion.

To the best of the Debtors' knowledge, DoveBid Valuation does not
hold any interest adverse to their estates and is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.

Headquartered in Foster City, California, DoveBid, Inc.
-- http://www.dovebid.com/-- is a global provider of capital
asset auction and valuation services to large corporations and
financial institutions.  DoveBid has over 65 years of auction
experience in the capital asset industry with more than 35
locations in 15 countries.  DoveBid offers an array of auction
services to meet its customers' specific needs, including live
Webcast auctions, on-site-only auctions, featured online auctions
and privately negotiated sales.  DoveBid Valuation Services uses
its database of transaction information to provide valuations of
capital assets for financial institutions and large businesses.

Headquartered in Chicago, Illinois, Metalforming Technologies,
Inc., and its debtor-affiliates manufacture seating components,
stamped and welded powertrain components, closure systems, airbag
housings and charge air tubing assemblies for automobiles and
light trucks.  The Company and eight of its affiliates, filed for
chapter 11 protection on June 16, 2005 (Bankr. D. Del. Case Nos.
05-11697 through 05-11705).  Joel A. Waite, Esq., Robert S. Brady,
Esq., and Sean Matthew Beach, Esq., at Young Conaway Stargatt &
Taylor, represent the Debtors in their restructuring efforts.  As
of May 1, 2005, the Debtors reported $108 million in total assets
and $111 million in total debts.


METALFORMING: Hires Complete Appraisal as Real Estate Appraiser
---------------------------------------------------------------
Metalforming Technologies, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware for permission
to employ The Complete Appraisal Company as their real estate
appraiser, nunc pro tunc to Aug. 19, 2005.

The Debtors need Complete Appraisal to appraise their real estate
assets located in Milan, Saline and Burton, Michigan.  Complete
Appraisal agrees to conduct the appraisal for a $12,000 engagement
fee plus reimbursement of actual and necessary expenses.  The
Debtor will advance half of the engagement fee prior to the Firm's
inspection of the properties, with the balance due upon delivery
of the appraisal reports.

Complete Appraisal also agrees to provide testimony in support of
the appraisals at a Court Hearing for a $175 hourly fee.

The Debtors assure the Court that Complete Appraisal does not hold
any interest adverse to their estates and is a "disinterested
person" as that term is defined in section 101(14) of the
Bankruptcy Code.

Headquartered in Southfield, Michigan, The Complete Appraisal
Company -- http://www.completeappraisal.com/-- is a full-service
appraisal company serving 41 counties in southern lower Michigan.
Headed by its founder and president, Hugh L. Gedrich, ASA, IFA,
CA-S, the Firm employs 24 certified or licensed appraisers and a
support staff of 9.

Headquartered in Chicago, Illinois, Metalforming Technologies,
Inc., and its debtor-affiliates manufacture seating components,
stamped and welded powertrain components, closure systems, airbag
housings and charge air tubing assemblies for automobiles and
light trucks.  The Company and eight of its affiliates, filed for
chapter 11 protection on June 16, 2005 (Bankr. D. Del. Case Nos.
05-11697 through 05-11705).  Joel A. Waite, Esq., Robert S. Brady,
Esq., and Sean Matthew Beach, Esq., at Young Conaway Stargatt &
Taylor, represent the Debtors in their restructuring efforts.  As
of May 1, 2005, the Debtors reported $108 million in total assets
and $111 million in total debts.


MIRANT CORP: Creditors Panel Objects to Former Directors' Claim
---------------------------------------------------------------
On July 11, 2005, Elmer B. Harris, W. L. Westbrook, and H. Allen
Franklin, former Mirant directors, sent a letter to Mirant
Corporation seeking indemnification "as a result of threatened
claims arising out of their service as Directors of Mirant."

Anthony L. Cochran, Esq., at Chilivis, Cochran, Larkins & Bever,
LLP, asserts that Mirant's bylaws support the Former Directors'
contentions as to their rights to indemnification.  These rights
to indemnification "will continue as to a person who has ceased
to be a director."

                     Mirant Committee Objects

The Official Committee of Unsecured Creditors of Mirant
Corporation believes that the Former Directors' July 11 Letter is
an informal claim.

The Mirant Committee opposes the Informal Claim on these grounds:

   a. The Informal Claim is contingent and unliquidated at this
      time, as liability for the Directors, if any, in the D&O
      Action has not yet been established;

   b. The Directors may have claims for indemnity, subrogation
      and reimbursement from Southern for and in connection with
      any liability that may be established in the D&O Action;

   c. Given the vague language in the Mirant Bylaws, the Mirant
      Committee disputes whether the Directors are entitled to
      receive any indemnity from Mirant; and

   d. The Directors are not entitled to indemnification under
      Delaware law, as they cannot meet the requirements
      contained in Section 145(a) and (b) of the Delaware General
      Corporation Law because:

      (1) the Directors will not be successful on the merits of
          the D&O Action;

      (2) the Directors did not act in good faith and in a manner
          they reasonably believed to be in or not opposed to the
          best interests of Mirant in connection with the matters
          raised in the D&O Action and for which indemnity is
          sought; and

      (3) the Informal Claim, which was not served until July 11,
          2005, is late and, thus, time-barred.

The Mirant Committee asks the Court to disallow the Former
Directors' Informal Claim.

                     Debtors Reserve Options

The July 11 Letter states that it "preserve[s] any rights to
indemnification to which Messrs. Westbrook, Franklin and Harris
may be entitled."  In this regard, the Debtors reserve:

    (i) all rights and actions against the former Directors and
        their counsel for violation of the automatic stay; and

   (ii) all objections to the form, substance, and timeliness of
        the "Demand Letter", the claims asserted therein, and any
        claims of the Former Directors.

                     Former Directors Respond

The July 11 Letter did not make either a formal or an informal
claim for indemnification, Mr. Cochran clarifies.  "[The
Directors] simply put Mirant on notice that the Directors 'want
to preserve any rights to indemnification to which Messrs.
Westbrook, Franklin and Harris may be entitled.'"

"A letter simply putting a debtor on notice, sent only to the
debtors' counsel, not to the Bankruptcy Court, is not an informal
proof of claim," Mr. Cochran contends.

Additionally, the July 11 Letter, Mr. Cochran adds, does not meet
the Fifth Circuit's test for an "informal proof of claim."

Mr. Cochran explains that the mere existence of bylaws combined
with a notice of the provisions within those bylaws does not, in
and of itself, create any indemnity obligation.

"The [July 11] Letter does not run afoul of the purposes for the
automatic stay," Mr. Cochran points out.

According to Mr. Cochran, the Mirant Committee's Objection and
the Debtors' reservation of rights are moot because the Former
Directors did not and cannot assert a counterclaim for
indemnification since the Mirant Committee had dismissed the D&O
Action on August 9, 2005.

Without any determination of liability, there can be no
indemnification, Mr. Cochran points out.

Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- is a competitive energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines.  Mirant owns or leases more than 18,000
megawatts of electric generating capacity globally.  Mirant
Corporation filed for chapter 11 protection on July 14, 2003
(Bankr. N.D. Tex. 03-46590).  Thomas E. Lauria, Esq., at White &
Case LLP, represents the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $20,574,000,000 in assets and $11,401,000,000 in debts.
(Mirant Bankruptcy News, Issue No. 74; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


NATIONAL ENERGY: Moss Bluff Holds $1.2 Million Allowed Claim
------------------------------------------------------------
NEGT Energy Trading - Gas Corporation entered into certain
contracts with Moss Bluff Hub partners, LP, a Texas limited
partnership.  As credit support for the Contracts, certain
parties issued guaranty agreements and provided collateral in the
form of cash and irrevocable standby letters.  All executory
transactions under the Contracts were terminated pursuant to a
March 5, 2004, order.

ET Gas and Moss Bluff have agreed to settle all matters between
them relating to the Contracts, Collateral and Guarantees.

The parties agree that Moss Bluff's claim against ET Gas will be
allowed for $1,225,000.  Moss Bluff will also retain a portion of
the Collateral.  As a component of the Agreement, the parties
will also release each other from any liabilities arising out of
the Contracts, Guarantees, or Collateral.

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


NATURADE INC: Losses & Deficits Prompt Going Concern Doubt
----------------------------------------------------------
Naturade Inc. reported its operational results for the quarter
ending June 30, 2005, in a Form 10-Q filed with the Securities and
Exchange Commission last week.

                            Net Sales

Net sales for three months ended June 30, 2005 decreased $582,095,
or 17.4%, to $2,761,811 from $3,343,906 for the same period in
2004.  For the six months ended June 30, 2005, net sales decreased
$1,221,188, or 17.7%, to $5,675,342 from $6,896,530 from the same
period in 2004.  The decrease in net sales is due principally to
the lack of sales related to Aloe Vera products, which totaled
$497,800 and $911,923, respectively, in the three and six month
periods ended June 30, 2004, as a direct result of the sale of
this brand in November 2004.  In addition, the Company's ready-to-
drink line, which accounted for $106,770 and $243,661,
respectively in the three and six month periods ended June 30,
2004, was discontinued in mid 2004 due to slow turns at retail.

Mass Market Net Sales

For the three months ended June 30, 2005, mass market net sales
decreased $79,911, or 5.3%, to $1,432,855 from $1,512,766 for the
three months ended June 30, 2004.  For the six month period ended
June 30, 2005, mass market net sales decreases $321,603, or 10.3%,
to $2,806,584 from $3,128,187 from the same period in 2004.  The
decrease in net sales during the period is principally related to
softness in the grocery channel partially offset by new product
sales of ReVivex(R) during the period.

Health Food Net Sales

For the three months ended June 30, 2005, health food channel net
sales decreased $502,183, or 27.4 %, to $1,328,956 from $1,831,139
for the three months ended June 30, 2004. For the six-month period
ended June 30, 2005, health food net sales decreased $899,585, or
23.9%, to $2,868,758 from $3,768,345 for the same period in 2004.
The sales decline is principally related to the lack of sales of
Aloe Vera products, which accounted for $497,800 for the quarter
ended June 30, 2004 and $911,923 for the six months ended
June 30, 2004, as a result of the sale of this brand in November
2004 partially offset by new product sales of ReVivex(R) during
the period.

Channels of Distribution On a percent of net sales basis, the
breakdown of sales between the mass market and health food
channels was 48.1% for the health food channel and 51.9% for the
mass market channel for the three month period ended June 30,
2005, as compared to 54.8 % and 45.2%, respectively, for the same
period in 2004.  For the six month period ended June 30, 2005,
health food channel sales were 50.5% and mass market channel sales
were 49.5% as compared to 54.6% and 45.4% respectively, for the
same period in 2004.  The change in sales by channel is
principally related to the lack of Aloe Vera products, which are
principally sold in the health food channel.

For the three months ended June 30, 2005, domestic net sales
decreased $559,648, or 17.1%, to $2,722,719 from $3,282,367 for
the three months ended June 30, 2004.  For the six-month period
ended June 30, 2005, domestic net sales decreased $1,053,637, or
15.8%, to $5,595,552 from $6,649,189 for the same period in 2004.
The decrease in domestic net sales is principally due to the
softness in the mass market channel, the lack of Aloe Vera product
sales and the discontinuance of our ready-to-drink line, offset by
new product sales of ReVivex(R).  For the three months ended June
30, 2005, international sales decreased $22,447, or 36.5%, to
$39,092 from $61,539.  International sales for the three-month
period ended June 30, 2005 decrease principally due to softness in
the Canadian market for the Company's products.  The Company is
currently investigating alternatives to its current distributors
in order to expand the Canadian market.  For the six-month period
ended June 30, 2005, international net sales decreased $167,551 or
67.7% to $79,790 from $247,341 in the same period of 2004.
International sales decreased in the six month period due
principally to pipeline fill related to a new distributor in
Canada during the same period of 2004 coupled with the softness of
the Canadian market described above.

                          Gross Profit

Gross profit as a percentage of net sales for the three months
ended June 30, 2005 decreased 0.9% to 43.9% of net sales, from
44.8% for the three months ended June 30, 2004.  The decrease for
the quarter is due principally to higher vendor costs for raw
material as a result of the Company's cash position during the
quarter.  Gross profit for the six-month period ended June 30,
2005 increased 0.5% to 45.6% from 45.1% for the same period in
2004.  The increase in gross profit as a percentage of sales is
related to the higher gross margin on new ReVivex(R) products
introduced during the first six months of 2005 as compared to the
products sold during the same period of 2004.

                  Operating Costs and Expenses

Operating costs and expenses for the three months ended June 30,
2005 decreased $316,992 to $1,491,571, or 54% of net sales, from
$1,808,563, or 54.1% of net sales, for the three months ended
June 30, 2004.  For the six month period ended June 30, 2005,
operating costs and expenses decreased $723,529 to $3,099,254, or
54.6% of net sales, from $3,822,783, or 55.4% of net sales, for
the same period in 2004.  This decrease is primarily due to an
aggressive costs reduction program undertaken by the Company
during the six months ended June 30, 2005 in order to partially
offset the effects of reduced net sales.  Operating expenses,
before brand expenses, declined $581,500, or 27.0% from $2,168,700
to $1,587,200 as result of the costs elimination principally in
the area of head count reductions.  In addition, the Company's
senior management team voluntarily reduced their salaries
temporarily by 10% for an indefinite period of time.

                        Interest Expense

Interest expense for the three and six month periods ended
June 30, 2005, increased $10,291 and $29,177 respectively compared
to the same period in June 30, 2004, principally due to increased
borrowings on the Loan Agreement with related parties, more fully
explained in Note 4, partially offset by decreased average
borrowings on the Company's credit facility during the second
quarter of 2005.

                 Liquidity and Capital Resources

The Company's operating activities provided cash of $585,622 in
the six months ended June 30, 2005, compared to cash provided of
$372,782 from operating activities in the six months ended
June 30, 2004.  This increase in cash provided from operating
activities is primarily due to the reduction in the Company's
operating loss of $173,156 and a decrease in inventories providing
an increase in cash of $791,615, partially offset by an decrease
in cash provided by accounts receivable of $400,966.

Net cash provided by inventories was $647,643 for the six months
ended June 30, 2005, compared with net cash used in inventories of
$143,972 for the six month ended June 30, 2004.  Management
elected to reduce inventories during the first six months of 2005
in order to offset reduced sales forecasted for the period.

Net cash provided by accounts receivable was $610,064 for the
six-month period ended June 30, 2005, compared to net cash
provided from accounts receivable of $1,011,030 for the same
period of 2004, principally due to lower sales in the last quarter
of 2004 as compared to the last quarter of 2003 coupled with lower
sales during the six month period ended June 30, 2005, as compared
to the six month period ended June 30, 2004.  General customer
terms and the Company's collection policies have remained
constant.

Net cash provided by accounts payable and accrued expenses was
$24,441 for the six month period ended June 30, 2005, compared to
net cash provided of $463,174 for the same period of 2004,
principally due to the continued planned reduction of inventories
during the period which resulted in a reduction of vendor account
balances.

There were no changes in the provision for excess and obsolete
inventory for the six-month periods ended June 30, 2005 and 2004.

                            Liquidity

The Company's working capital deficit increased $651,372 from
$1,859,321 at December 31, 2004, to $2,510,693 at June 30, 2005.
This increase was largely due to the decrease in receivables and
inventory as a result of decreased sales and a concentrated
inventory reduction program partially offset by a decrease in
borrowings $705,158 on the Company's credit facility partially
offset by additional borrowings on the Loan Agreement.

The Company's cash used in financing activities of $535,767 for
the six months ended June 30, 2005, compared to cash used in
financing activities of $498,497 for the same period of 2004.  The
increase in cash used in financing activities was the result of a
net repayment under the Company's credit facility of $705,158,
coupled by borrowings of $175,000 on the Loan Agreement and
partially offset reduced payments on related party loans during
the six months ending June 30, 2005 as compared to the same period
in 2004.

As of June 30, 2005, the Company was in compliance with all of the
covenants of the Credit Agreement with Wells Fargo, which was paid
in full as a result of the refinancing with Laurus Master Fund,
Ltd.

                       Going Concern Doubt

At June 30, 2005, the Company had an accumulated deficit of
$22,984,011, a net working capital deficit of $2,510,693 and a
stockholders' capital deficiency of $3,992,088, and had incurred
recurring net losses.  These factors, among others, raise
substantial doubt about the Company's ability to continue as a
going concern.  As reported in the Troubled Company Reporter on
April 8, 2005, BDO Seidman, LLP -- the Company's independent
registered public accounting firm -- issued a qualified opinion
after reviewing Naturade's 2004 financial statements.

The Company's liquidity would be adversely affected if it defaults
under its Credit Agreement and Wells Fargo exercises its right to
terminate, or demand immediate payment of all amounts outstanding
under the Credit Agreement as a result of a default.  In addition,
if the Company continues to incur declines in revenues, the
Company could encounter a shortage in cash reserves required to
meet current commitments.  This could result in the Company being
unable to obtain products necessary to fulfill customer orders.
The Company has raised additional capital through the financing
with Laurus Master Fund, Ltd.  The Company is seeking to raise
additional funds through the sale of public or private equity and
debt financings or from other sources.  No assurance can be given
that additional financing will be available in the future or that,
if available, such financing will be obtainable on terms
acceptable to the Company or its stockholders.

On July 22, 2005, the Company entered into the Master Investment
Agreement by and among the Company, HHB, Westgate, Quincy, Stewart
and Weil, pursuant to which the Company will issue to Quincy:

   (1) 30,972,345 shares of Common Stock,

   (2) warrants to purchase 14,000,000 shares of Common Stock, and

   (3) 4,200,000 shares of Series C Convertible Preferred Stock,

all in consideration of Quincy:

   (1) negotiating, and arranging the financing for the Company;

   (2) acquisition of the selected assets of Ageless, Symco; and

   (3) Symbiotics and guaranteeing the payment of a portion of the
       purchase price of each such transaction.

HHB will surrender the 41,054,267 shares of Common Stock held by
it for conversion into:

   (a) 12,600,000 shares of Series C; and

   (b) a warrant to purchase 10,000,000 shares of Common Stock.

Westgate will surrender the 13,540,723 shares of Series B
Convertible Preferred Stock held by it, including any accrued
and unpaid dividends, for conversion into 4,200,000 shares of
Series C.  HHB, Stewart and Weil will extend the term of the
Secured Promissory Notes issued to them pursuant to that certain
Loan Agreement dated April 23, 2003, from December 31, 2005 to
December 31, 2006.

On July 26, 2005, the Company entered into a Security and Purchase
Agreement, by and between the Company and Laurus Master Fund,
Ltd., pursuant to which Laurus provided the Company a $4,000,000
convertible financing facility composed of a $3,000,000 revolving
facility and a $1,000,000 term facility.

A full-text copy of Naturade's latest Quarterly Report is
available for free at http://ResearchArchives.com/t/s?10d

Naturade Inc. is a branded natural products marketing company
focused on growth through innovative, scientifically supported
products designed to nourish the health and well being of
consumers.  The Company primarily competes in the overall market
for natural, nutritional supplements.  Nutrition Business Journal,
a San Diego-based research publication that specializes in this
industry, reports that sales for the overall $58 billion
"Nutrition" industry were up 7% in 2004 versus 2003.  Naturade
primarily competes in the $19 billion segment defined by NBJ as
Supplements, which grew 3.8% in 2004.  In addition, the report
points out that sales of supplements were growing at similar rates
in both the mass market channel and health food and natural
product stores at approximately 3.5%.

As of June 30, 2005, Naturade's balance sheet reflects a
$3,992,088 stockholders' deficit, compared to a $3,031,548
deficit at Dec. 31, 2004.


NVF COMPANY: Committee Wants Blank Rome as Counsel
--------------------------------------------------
The Official Committee of Unsecured Creditors of NVF Company, and
its debtor-affiliate, asks the U.S. Bankruptcy Court for the
District of Delaware for permission to employ Blank Rome LLP as
its counsel, nunc pro tunc to July 8, 2005.

Blank Rome will represent the Committee and perform services
necessary and appropriate for the Committee to carry out it
fiduciary duties and responsibilities under the Bankruptcy Code.

The lead attorneys for the Committee are:

            Attorney                        Hourly Rate
            --------                        -----------
            Michael B. Schaedle, Esq.          $380
            Raymond M. Patella, Esq.           $300
            Jason W. Staib, Esq.               $275

Mr. Schaedle reports Blank Rome's other professionals bill:

            Designation                     Hourly Rate
            -----------                     -----------
            Partners & Counsel              $300 - $675
            Associates                      $195 - $400
            Paralegals                      $105 - $250

Mr. Schaedle discloses that the Firm:

    a) represents UGI Energy Services, member and chair of the
       Committee, in various matters as counsel not related to the
       chapter 11 case;

    b) represented NVF Company and that such representation was
       concluded in 1997.  The Firm has never represent Parsons
       Paper, is not owed fees by NVF, and is not a creditor of
       NVF.

    c) represent, from time to time, Metropolitan Life Insurance
       Company, Waste Management, Inc., and Connectiv Power, the
       Debtors unsecured creditors, in matters not connected to
       the chapter 11 case;

    d) represent the City of Wilmington, a creditor of the
       Debtors, in matters not connected to the chapter 11 case;
       and

    e) represented Morris Anderson & Associates, the Debtors'
       financial advisor.  Morris Anderson is presently not a
       client of the Firm.

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

Headquartered in Yorklyn, Del., NVF Company -- http://www.nvf.com/
-- manufactures thermoset composites (glass, Kevlar), vulcanized
fiber, custom containers, circuitry materials, custom fabrication,
and welding products.  The Company along with its wholly owned
subsidiary, Parsons Paper Company, Inc., filed for chapter 11
protection on June 20, 2005 (Bankr. D. Del. Case Nos. 05-11727 and
05-11728).  Rebecca L. Booth, Esq., at Richards, Layton & Finger,
P.A., represents the Debtors in their restructuring efforts.  When
the Debtors filed for protection from their creditors, they listed
estimated assets between $10 million to $50 million and estimated
debts of more than $100 million.


NVF COMPANY: Committee Wants Weiser LLP as Financial Advisor
------------------------------------------------------------
The Official Committee of Unsecured Creditors of NVF Company, and
its debtor-affiliate, asks the U.S. Bankruptcy Court for the
District of Delaware for permission to employ Weiser LLP as its
financial advisor.

Weiser LLP will:

    a) conduct a review of all financial information prepared by
       the Debtors or its consultants as requested by the
       Committee including, but not limited to, a review of
       Debtors' financial statements as of the filing of the
       petition, showing in detail all assets and liabilities and
       priority and secured creditors;

    b) monitor the Debtors' activities regarding cash
       expenditures, receivable collections, asset sales and
       projected cash requirements;

    c) attend meetings including the Committee, the Debtors,
       creditors, their attorneys and consultants, Federal and
       state authorities, if required;

    d) review the Debtors' periodic operating and cash flow
       statements;

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

    f) investigate with respect to the pre-petition acts, conduct,
       property, liabilities and financial condition of the
       Debtors, their management, creditors including the
       operation of their businesses, and as appropriate avoidance
       actions;

    g) review and analyze proposed transactions for which the
       Debtors seek Court approval;

    h) assist in a sale process of the Debtors collectively or in
       segments, parts or other delineations, if any;

    i) assist the Committee in developing, evaluation, structuring
       and negotiating the terms and conditions of all potential
       plans of reorganization including preparation of a
       liquidation analysis;

    j) analyze the claims filed;

    k) estimate the value of the securities, if any, that may be
       issued to unsecured creditors under any such plan;

    l) provide expert testimony on the results of its findings;

    m) assist the Committee in developing alternative plans
       including contacting potential plan sponsors if
       appropriate; and

    n) provide the Committee with other and further financial
       advisory services with respect to the Debtors, including
       valuation, general restructuring and advice with respect to
       financial, business and economic issues, as may arise
       during the course of the restructuring as requested by the
       Committee.

James Horgan, at Weiser LLP, discloses that the Firms'
professionals bill:

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

To the best of the Committee's knowledge, Wieser LLP is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.

Headquartered in Yorklyn, Del., NVF Company -- http://www.nvf.com/
-- manufactures thermoset composites (glass, Kevlar), vulcanized
fiber, custom containers, circuitry materials, custom fabrication,
and welding products.  The Company along with its wholly owned
subsidiary, Parsons Paper Company, Inc., filed for chapter 11
protection on June 20, 2005 (Bankr. D. Del. Case Nos. 05-11727 and
05-11728).  Rebecca L. Booth, Esq., at Richards, Layton & Finger,
P.A., represents the Debtors in their restructuring efforts.  When
the Debtors filed for protection from their creditors, they listed
estimated assets between $10 million to $50 million and estimated
debts of more than $100 million.


ONE TO ONE: Soliciting Bids for Substantially All Assets
--------------------------------------------------------
One to One Interactive, LLC, asks the U.S. Bankruptcy Court for
the District of Massachusetts for permission to sell substantially
all of its assets, including customer contracts and other
unexpired leases and executory contracts, to the highest bidder.

As of July 31, 2005, the Debtor's current assets total $3,115,334;
this includes cash, accounts receivable, customer deposits, and
prepaid expenses.

The Debtor's fixed assets include computers, testing and office
equipment and furniture valued at $223,000.

Postpetition liabilities:

   -- $2,578,561 worth of unearned income, accrued media purchase
      obligations, offsetting customer deposits, accrued expenses
      and trade payables

Other postpetition obligations include:

   -- $123,500 of unpaid compensation to bankruptcy professionals
      retained by the Debtor and the Creditors' Committee, and
      approximately $13,000 of accrued, unpaid employee vacation.

The Debtor tells the Court that it has faced difficulties with
retaining and attracting qualified employees.  Moreover, it will
continue to face problems while it remains in bankruptcy and may
go downhill if unable to retain existing customers and attract new
business foreshadows an eventual downturn in its business.

For these reasons, the Debtor believes that it is necessary that a
formal sale process be initiated, implemented and completed in the
next six to eight weeks.

The sale proceeds will be distributed to general unsecured
creditors.

Otoac, LLC, formed by the Debtor's founders, principal
shareholders, and senior officers, Ian and Jeremi Karnell, has
already submitted offers to acquire the Debtor's business as a
going concern.  However, the Creditors' Committee express its
concern that the sale process must be open and consider any
proposals of potential investors because of the tension between
Karnells' duty to maximize value to the estate and their interest
as inevitable participants in any acquisition of the Debtor's
business enterprise.

Headquartered in Boston, Massachusetts, One to One Interactive,
LLC -- http://www.onetooneinteractive.com/-- provides Internet
marketing services and offers marketing, creative and technology
services to companies in industries like financial services, life
sciences, media, telecommunications and technology.  The Debtor
filed for chapter 11 protection on March 18, 2005 (Bankr. D. Mass.
Case No. 05-12083).  A. Davis Whitesell, Esq., at Cohn &
Whitesell, LLP, represents the Debtor in its restructuring
process.  When the Debtor filed for protection from its creditors,
it estimated assets and debts from $1 million to $10 million.


OWENS CORNING: Shintech Concedes $39 Million Claim is Overstated
----------------------------------------------------------------
Shintech Incorporated asserts a $38,942,063 claim against Owens
Corning on account of:

    (a) prepetition accounts receivable for $5,298,751; and

    (b) "Failure to Accept Contract Volume" for $33,643,312

The Debtors objected to Shintech's claim.

Charles J. Brown, Esq., at Elzufon Austin Reardon Tarlov &
Mondell, PA, in Wilmington, Delaware, represents Shintech.  Mr.
Brown asserts that Texas law governs the Contract entered into
between the Debtors and Shintech.  "Under the Texas law, the
universal rule for measuring damages for the breach of a contract
is just compensation for the loss or damage actually sustained.  A
nonbreaching party is generally entitled to all actual damages
necessary to put it in the same economic position in which it
would have been had the contract not been reached."

Mr. Brown therefore believes that the rejection claim should be
allowed for $14,061,447.  Shintech will provide the Debtors with
the calculations and analysis used by Shintech to support its
rejection claim, Mr. Brown tells the Court.

Additionally, Shintech insists that the Debtors owed it
$5,298,751 for prepetition accounts receivable.  To support its
claim, Shintech will provide the Debtors with copies of the
invoices.  Due to the competitive nature of the pricing of resin,
Shintech will submit the information confidentially and will ask
the Court to seal the sensitive pricing information.

Mr. Brown points out that Shintech's Claim No. 12105 should be
allowed against Owens Corning because the Contract was entered
into between Shintech and "Owens Corning and its affiliates."

Headquartered in Toledo, Ohio, Owens Corning --
http://www.owenscorning.com/-- manufactures fiberglass
insulation, roofing materials, vinyl windows and siding, patio
doors, rain gutters and downspouts.  The Company filed for chapter
11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837).
Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom,
represents the Debtors in their restructuring efforts.  At Sept.
30, 2004, the Company's balance sheet shows $7.5 billion in assets
and a $4.2 billion stockholders' deficit.  The company reported
$132 million of net income in the nine-month period ending
Sept. 30, 2004.  (Owens Corning Bankruptcy News, Issue No. 114;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


PACIFIC MAGTRON: Has $5.55 Mil. of Assets to Pay $6.91 Mil. Debts
-----------------------------------------------------------------
Pacific Magtron International Corp. delivered its quarterly report
on Form 10-Q for the quarter and half-year ending June 30, 2005,
to the Securities and Exchange Commission last week.  At July 1,
2005, Pacific Magtron's balance sheet shows that it has $5,542,100
in assets available to pay debts totaling $6,905,400.

As reported in the Troubled Company Reporter on Aug. 19, 2005, the
Debtors plans to dispose of their respective assets to fund the
payments proposed under their Joint Liquidating Plan of
Reorganization.

With the Liquidation Plan in mind, the Company adopted the
liquidation basis of accounting, beginning July 1, 2005, whereby
assets are valued at their estimated net realizable values and
liabilities are valued at their estimated settlement amounts.  The
Company has provided an estimated liquidation basis statement of
net assets and liabilities in its Form 10-Q for the quarterly
period ended June 30, 2005.

The Debtors' prepetition secured creditors are:

  (1) Textron Financial Corporation

      Textron is fully secured by the Company's accounts
      receivable, inventories, cash and other assets.  As of
      June 30, 2005, the outstanding balance due to Textron was
      $250,100.  The Court approved a settlement agreement,
      pursuant to which the Company will pay Textron $100,000 per
      month beginning June 2005 until the outstanding balance is
      fully paid.

      The Company remitted $100,000 on June 27, 2005 and $100,000
      on July 18, 2005 to Textron.  On August 2, 2005, the Company
      settled with Textron for $202,559 for the principal and
      interest owed to Textron and legal costs incurred.
      Beginning August 2, 2005, Textron begins to charge an
      additional interest of $41 per day until payment is made.
      The Court has approved the settlement agreement.  On
      August 9, 2005, the Company paid $202,887 to Textron for the
      settlement.

  (2) Wells Fargo Bank

      Wells Fargo holds a first mortgage on the Company's land
      and building and funds in the Restricted Cash Account.  The
      Company agreed and the Court approved that funds in the
      Restricted Account will be used to make the normal mortgage
      payments (currently $2,740 per month plus interest at 2.5%
      plus LIBOR, or a total of 5.75% at June 30, 2005).  As of
      June 30, 2005, the outstanding amount due to Wells Fargo was
      $2,355,200.

  (3) Micro Technology Concept, Inc.

      The Company's cash, accounts receivable, inventories and
      equipment are encumbered by MTC, but MTC's security
      interests are subordinated to the Textron's liens.  As of
      June 30, 2005, the outstanding amount due to MTC for the
      payables before the Company's bankruptcy petition date was
      $679,800.

  (4) U.S. Small Business Administration

      SBA holds a second mortgage interest on the Company's land
      and building.  Payments of $8,591 are due monthly.  The
      unpaid balance at June 30, 2005 was $752,200.

A full-text copy of the Company's Disclosure is available for free
at http://ResearchArchives.com/t/s?10f

Headquartered in Milpitas, California, Pacific Magtron
International Corp. -- http://www.pacificmagtron.com/--  
distributes some 1,800 computer hardware, software, peripheral,
and accessory items that it buys directly from 30 manufacturers
like Creative Labs, Logitech, and Yamaha.  The Company, along with
its subsidiaries, filed for chapter 11 protection on May 11, 2005
(Bankr. D. Nev. Case No. 05-14326).  As of Dec. 31, 2004, the
Company reported $11,740,700 in total assets and $11,105,200 in
total debts.


PETROKAZAKHSTAN INC: Moody's Reviews Ba3 Corporate Family Rating
----------------------------------------------------------------
Moody's Investors Service placed the Ba3 corporate family rating
for PetroKazakhstan Inc. ("PKZ") on review for possible upgrade.
The company, which is the guarantor of the US$125 million notes
issued by PetroKazakhstan Finance B.V., announced on Monday, the
22nd of August, that it has entered into an Arrangement Agreement
with CNPC International Ltd which has offered to buy all
outstanding PKZ common shares for USD 4.2 billion in cash.

Moody's rating action is in response to the expectation that a
successful acquisition will have a positive impact on PKZ's rating
considering the stronger credit profile of China National
Petroleum Corporation which is the 100% parent company of CNPCI.
The closure of the transaction is expected in October 2005.

In case of a successful closure of the proposed acquisition, the
review will focus on the level of operational and financial
integration of PKZ into the acquirer's group.  It is likely that
the rating can be lifted by 3 or more notches even without a
formal support arrangement.  With regard to the impact of the
transaction on PKZ's outstanding notes which include a change of
control clause, Moody's will focus on the company's liquidity
situation, debt allocation and funding policy in the new group.
The agency will also monitor the development of PKZ's currently
challenging legal and regulatory situation in light of the new
owner.

PetroKazahstan Finance B.V. is a special-purpose financing vehicle
and an indirect wholly owned subsidiary of PetroKazahstan, Inc.,
formerly known as Hurricane Hydrocarbons Ltd., headquartered in
Calgary, Alberta, in Canada.  PKZ is an integrated oil company
which operates in central and southern Kazakhstan.  The other
guarantors are PetroKazahstan's principal up- and downstream
operating subsidiaries in Kazakhstan.


PHILLIPS-VAN: Earns $23.5 Million of Net Income in Second Quarter
-----------------------------------------------------------------
Phillips-Van Heusen Corporation reported net income of $23.5
million for the second quarter of 2005 and 2005 year to date net
income of $48.5 million.  This includes the costs associated with
the secondary common stock offering completed in July 2005.  The
prior year's second quarter net income was $13 million while the
year to date was $14.6 million.

For the 2005 second quarter, excluding the costs associated with
the secondary common stock offering, net income per share was
$0.43 which was $0.02 ahead of First Call consensus estimate and
54% higher than last year's net income per share excluding
restructuring and other items of $0.28.

The current year's six month net income per share excluding the
costs associated with the secondary common stock offering was
$0.89 which was almost double the prior year's net income per
share excluding restructuring and other items of $0.46.

The secondary common stock offering completed in the current
quarter consisted of the voluntary conversion of a portion of the
Company's Series B convertible preferred stock by the holders of
such stock into 7.3 million shares of common stock and the
subsequent sale of such shares.  The costs associated with the
secondary common stock offering of $14.2 million include an
inducement payment of $12.9 million and $1.3 million of costs
specifically related to the offering.  Restructuring and other
items in the prior year include the costs of:

    (i) exiting the wholesale footwear business and relocating the
        Company's retail footwear operations,

   (ii) closing underperforming retail outlet stores, and

  (iii) debt extinguishment associated with the Company's debt
        refinancing in February 2004.

Second quarter net income of $23.5 million improved 65% from
second quarter 2004 net income of $14.2 million, which excludes
restructuring and other items, as the positive trends experienced
in the first quarter continued.  The Apparel and Related Products
segment earnings increased 65% driven by double-digit revenue
growth in the Company's dress shirt and sportswear businesses.
The new dress shirt lines for Chaps, BCBG, Sean John and Donald
Trump added incremental sales and supplemented the strong
performance of the Company's core dress shirt business.  The
Calvin Klein men's better sportswear collection, which was
introduced for Fall 2004 selling, continues to perform well, and,
as in the first quarter, the IZOD, Arrow and Van Heusen sportswear
brands continue to experience significant growth. The Calvin Klein
Licensing segment recorded a 15% increase in operating earnings
over the prior year as the Company's growth initiatives to expand
the breadth and reach of Calvin Klein product offerings continue
to be realized.

Total revenues in the second quarter increased 18% to $443.5
million from $375.9 million in the prior year.  Key drivers were
the dress shirt and sportswear increases noted above, a 13% growth
in Calvin Klein Licensing revenues and the continued rollout of a
limited number of Calvin Klein outlet stores in premium outlet
malls.  For the six months, total revenues were $915.6 million, an
increase of 21% from the prior year amount of $754.2 million.

From a balance sheet perspective, the Company continues to
generate positive cash flow and, after incurring the costs
associated with the secondary common stock offering, ended the
quarter with a $27.4 million decrease in net debt versus the prior
year.  Inventories ended the quarter on plan, with a 20% increase
over the prior year's level.  The increase supports the additional
volume relating to the Calvin Klein sportswear business and
planned growth in the dress shirt and other sportswear businesses
for the third quarter.

Commenting on these results, Mark Weber, Chief Executive Officer,
noted, "We are extremely pleased with our second quarter results.
The positive trends in business we experienced in the first
quarter continued through the second quarter and enabled us to
exceed our previous earnings guidance.  Each of our brands is
benefiting from delivering the right product to its respective
channel of distribution and the consumer is responding
positively."

Mr. Weber continued, "Our business model is working and we will
continue to focus on the significant growth opportunity presented
by the Calvin Klein brands, where growth in licensing revenue will
drive operating margin expansion.  We will also work to maximize
the growth opportunities within the wholesale dress shirt and
sportswear businesses, as evidenced by the new dress shirt brands
launched over the last year and the strong growth of IZOD and
Arrow."

Mr. Weber then stated, "Given our second quarter results and our
projections for the second half of the year, we are raising our
2005 earnings per share guidance, excluding the costs of the
secondary common stock offering, to a range of $1.75 to $1.80, or
an increase of 28% to 31% over the prior year earnings per share
excluding restructuring and other items.  Including the costs of
the secondary common stock offering, we anticipate that GAAP
earnings per share in 2005 will be in the range of $1.55 to $1.60.
(Please see reconciliation of GAAP to non-GAAP 2005 full year
earnings per share estimate.) 2005 full year revenues are expected
to be $1.88 billion to $1.90 billion, or an increase of 14% to 16%
over the prior year.  Our 2005 revenue and earnings projection
continues to be based on a conservative view of the fourth
quarter, and if the current trends in our business were to
continue, we believe we would exceed these estimates for the
year."

Mr. Weber concluded, "With respect to the third quarter, we are
projecting earnings per share of $0.67 to $0.71, or an increase of
14% to 20% over the prior year's third quarter earnings per share
excluding restructuring and other items, with corresponding
revenues of $525 million to $535 million, or an increase of 11% to
13% over the prior year."

The Company's 2005 EPS guidance does not include the impact of
expensing stock options as the SEC has amended the compliance date
for SFAS 123R.  The Company will implement the provisions of SFAS
123R beginning in fiscal 2006, as now required by the SEC.

Phillips-Van Heusen Corporation -- http://www.pvh.com/-- is one
of the world's largest apparel companies.  It owns and markets the
Calvin Klein brand worldwide.  It is the world's largest shirt
company and markets a variety of goods under its own brands: Van
Heusen, Calvin Klein, IZOD, Arrow, Bass and G.H. Bass & Co.,
Geoffrey Beene, Kenneth Cole New York, Reaction Kenneth Cole, BCBG
Max Azria, BCBG Attitude, Sean John, MICHAEL by Michael Kors,
Chaps and Donald J. Trump Signature.

                         *     *     *

As reported in the Troubled Company Reporter on June 28, 2005,
Standard & Poor's Ratings Services raised its corporate credit
rating on New York, New York-based Phillips-Van Heusen Corp. to
'BB+' from 'BB'.  At the same time, ratings on the senior secured,
senior unsecured, subordinated debt were also raised a notch, to
'BB+', 'BB', and 'BB-', respectively.  The outlook is stable.


PURCHASEPRO.COM: Court Dismisses $4.1 Mil. Suit Against Johnson
---------------------------------------------------------------
The Lexington Herald Leader reports that the Honorable Bruce
Markell of the U.S. Bankruptcy Court for the District of Nevada
dismissed PurchasePro.com's lawsuit against its founder Charles E.
Johnson, Jr.  The suit sought judgment for $1.66 million related
to a retention bonus payment and $2.5 million for PurchasePro
stock that Mr. Johnson received in 2001.

Mr. Johnson countersued asking for a $6 million termination bonus
under his PurchasePro contract.  Mr. Johnson and five other
company officers await trial in Washington, D.C., on federal
charges of conspiracy, fraud and obstruction of justice in
PurchasePro's collapse, the Herald relates.

PurchasePro.com which offers strategic sourcing and procurement
software solutions, filed for chapter 11 protection on
September 12, 2002 (Bankr. Nev. Case No. 02-20472).  Gregory E.
Garman, Esq., at Gordon & Silver, Ltd., represents the Debtor in
its restructuring efforts.  When the Company filed for
protection from its creditors, it listed $41,943,000 in total
assets and $20,058,000 in total debts.  The Court confirmed the
Debtor's chapter 11 Plan on Dec. 21, 2004.


RADNOR HOLDINGS: Equity Deficit Widens to $19 Million at July 1
---------------------------------------------------------------
Radnor Holdings Corporation delivered its quarterly report for the
quarter fiscal quarter ending July 1, 2005, to the Securities and
Exchange Commission this week.

Radnor reports that while net sales increased $13.4 million, or
12.4%, during the three months ended July 1, 2005, compared to the
three months ended June 25, 2004, gross profit decreased by $4.7
million.  In North America, increases in raw material and energy-
related costs were partially offset by higher across-the-board
selling prices and increased sales volumes at our food packaging
operations primarily due to the expansion of our cold drink
product lines.  At the Company's European operations, increased
raw material costs and reduced sales volumes were only partially
offset by higher selling prices, accounting for a
$3.5 million decrease in gross profit.

While net sales increased $31.9 million, or 15.6%, during the six
months ended July 1, 2005, compared to the six months ended
June 25, 2004, gross profit decreased by $5.5 million.  In North
America, increases in raw material and energy-related costs were
almost entirely offset by higher across-the-board selling prices
and increased sales volumes at our food packaging operations.  At
the Company's European operations, increased raw material costs
and reduced sales volumes were only partially offset by higher
selling prices and led to a $4 million decrease in gross profit.
Operating expenses increased as a result of higher distribution
costs related to increased sales volumes in North America, as well
as higher depreciation and amortization expenses related to higher
fixed asset levels.

Net sales for the three months ended July 1, 2005, were
$121.5 million, a 12.4% increase from $108.1 million for the three
months ended June 25, 2004.  This increase was primarily a result
of higher average selling prices at both the packaging and
specialty chemicals operations of 9.9% and 16.2%, respectively,
and higher sales volumes at the packaging segment ($6.8 million),
partially offset by lower sales volumes at the specialty chemicals
operations ($10.3 million).

                          Gross Profit

Gross profit decreased $4.7 million to $16.2 million for the three
months ended July 1, 2005 from $20.9 million for the similar
three-month period in 2004.  This decrease was primarily due to
lower gross profit at the Company's European specialty chemicals
operations ($3.5 million), resulting from higher raw material
costs and reduced sales volumes.  In the North American
operations, higher raw materials and energy-related costs, as well
as the impact of a fire at one of Company's production facilities,
describes below, were only partially offset by the benefits of
increased selling prices and higher sales volumes in the
foodservice packaging operations.

During the three months ended July 1, 2005, operating expenses of
$16.5 million increased $0.2 million from $16.3 million for the
three months ended June 25, 2004 as lower selling, general and
administrative costs ($0.9 million) related to our cost reduction
program were offset by higher depreciation and amortization
expenses ($0.8 million) and distribution costs ($0.3 million).  As
a percentage of net sales, operating costs decreased to 13.6% for
the three months ended July 1, 2005 as compared to 15.1% for the
three months ended June 25, 2004.

                         Operating Loss

Income (loss) from operations decreased by $4.9 million for
the three months ended July 1, 2005, to an operating loss of
$0.3 million from operating income of $4.6 million for the
comparable period in 2004 due to a $3.1 million decrease at the
Company's European specialty chemicals operations and a $1.4
million increase in depreciation and amortization expense.  Income
from operations at our North American operations, excluding
depreciation and amortization, decreased by $1.7 million for the
three months ended July 1, 2005.

Interest expense increased $1.4 million to $7.8 million during the
three months ended July 1, 2005, from $6.4 million in the prior
year period primarily due to higher average debt levels and higher
interest rates.

The effective tax rate for the three months ended July 1, 2005
yielded an expense of 27.0%, as compared to a 1.7% expense in the
same period in the prior year.  This change was primarily due to
the creation of a reserve during the prior period for certain
expenses at the Company's Canadian operations and the Company
evaluated its deferred tax assets and recorded a charge of $7.1
million which primarily consists of an establishment of valuation
allowance against its U.S. net operating loss carryforwards during
the second quarter.  As of July 1, 2005, the Company had
$97.4 million of net operating loss carryforwards for federal
income tax purposes, which expire through 2024.

                 Liquidity and Capital Resources

During the six months ended July 1, 2005, cash used in operating
activities totaled $23.5 million mainly due to an increase in
working capital of $20.4 million.  The increase in working capital
was due to higher accounts receivable ($9.7 million), lower
accounts payable ($7.6 million) and lower accrued expenses
($4.6 million).  Accounts receivable increased primarily due to
higher sales volumes and selling prices, while accounts payable
decreased as a result of paying down creditors with the proceeds
from investing activities.

During the six months ended July 1, 2005, the inventory turnover
rate decreased to approximately 5.5 times per year compared to
5.8 times per year during the same period last year primarily due
to the build in the plastics inventory related to the expansion of
our cold drink product lines.  As of July 1, 2005, the average
collection period for our accounts receivable was 44 days as
compared to 43 days in the prior year period.

The Company's investing activities during the six months ended
July 1, 2005, provided $11.6 million mainly due to the proceeds
from the collection of a note receivable from a formerly
consolidated affiliate of the Company totaling $18.9 million,
partially offset by capital expenditures of $9.6 million.

Radnor Holdings Corporation is a leading manufacturer and
distributor of a broad line of disposable foodservice products in
the United States and specialty chemical products worldwide. We
operate 15 plants in North America and 3 in Europe and distribute
our foodservice products from 10 distribution centers throughout
the United States.

At July 1, 2005, Radnor Holdings' balance sheet shows an
$18,940,000 equity deficit, compared to a $770,000 deficit at
Dec. 31, 2004.


RAVEN MOON: Equity Deficit Raises Going Concern Doubts
------------------------------------------------------
Raven Moon Entertainment, Inc., incurred a $3,751,464 net loss in
the six-months ending June 30, 2005.  Last year's net loss for the
same period was $5,224,388.

Raven Moon disclosed its financial results for the quarter and
half-year ending June 30, 2005, in a Form 10-Q delivered to the
Securities and Exchange Commission earlier this week.

The Company's negligible revenues are generated from the sale of
rights, licenses, and toys inspired by the children entertainment
productions of Raven Moon Entertainment.

Raven Moon burns millions of dollars each quarter producing and
developing its " Family Values television programs that convey
good morals and positive attitudes to children."  The Company has
two full time employees and relies heavily on outside consultants
and production facilities to operate on a daily basis.

                       Going Concern Doubt

At June 30, 2005, the Company has $26,442 in cash, and total
assets of $27,442.  At June 30, 2005 Raven Moon's liabilities
totaled $1,661,290.  These circumstances raise substantial doubt
about the Company's ability to continue as a going concern.  The
Company's ability to continue as a going concern is dependent upon
positive cash flows from operations and ongoing financial support.
Adequate funds may not be available when needed or may not be
available on terms favorable to the Company.  If the Company is
unable to secure sufficient funding, the Company may be unable to
develop or enhance its products and services, take advantage of
business opportunities, respond to competitive pressures or grow
the Company's business in the manner that the Company's management
believes is possible.  This could have a negative effect on the
Company's business, financial condition and results of operations.
Without such support, the Company may not be able to meet its
working capital requirements and accordingly the Company and its
subsidiaries may need to reorganize and seek protection from its
creditors.

A full text copy of Raven Moon's 10Q filing is available for free
at http://ResearchArchives.com/t/s?10e

Raven Moon Entertainment, Inc. -- http://www.ravenmoon.net/--  
develops and produces children's television programs and videos,
CD music, and Internet websites focused on the entertainment
industry.  Raven Moon talks about music publishing and talent
management on its Web site.  Raven Moon indicates in its latest
quarterly report that it wants to enter the plush toy market too.


REGINALD PHILLIPS: Case Summary & 13 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Reginald Keith & Rachelle Denise Phillips
        2110 Waterfall Drive
        Missouri City, Texas 77489

Bankruptcy Case No.: 05-43197

Chapter 11 Petition Date: August 24, 2005

Court: Southern District of Texas (Houston)

Judge: Marvin Isgur

Debtor's Counsel: H. Miles Cohn, Esq.
                  Sheiness, Scott, Grossman & Cohn LLP
                  1001 McKinney, Suite 1400
                  Houston, Texas 77096
                  Tel: (713) 374-7020
                  Fax: (713) 374-7049

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                                 $52,019
Attn: Michael Allen
8701 South Gessner, Stop
4311HAL
Houston, TX 77074

Internal Revenue Service      Docket no. 769317331       $26,000
Attn: Michael Allen           Docket no. 040090620
8701 S. Gessner Stop 4311HAL  paid
Houston, TX 77074

HFC - USA                                                 $6,751

NCO Financial Systems, Inc.   Credit card                 $5,658

Midland Credit Management     Household/Arbor             $3,500
                              account no.
                              5488975013948198

Washington Mutual Bank        Bank account balance        $2,000

Capital One                   Credit card                 $1,550

O'Conner & Associates         For appraisal                 $450

AT&T Wireless                                               $445

Sprint PCS                    Original account              $297
                              no. 0022944922

Direct TV                                                   $162

Internal Revenue Service                                 Unknown

Visa Gold                                                Unknown


RISK MANAGEMENT: Inks Master Restructuring Pact with Equifax Info
-----------------------------------------------------------------
Risk Management Alternatives, Inc., and its debtor-affiliates ask
the U.S. Bankruptcy Court for the Northern District of Ohio,
Eastern Division, for:

   1) authority to enter into a Master Restructuring Agreement
      with Equifax Information Services LLC;

   2) permission to use property of the estates pursuant to
      Section 363 of the Bankruptcy Code; and

   3) approval of its decision to assume and assign a non-
      residential real property lease pursuant to Section 365 of
      the Bankruptcy Code.

The eleven Debtors, along with two foreign non-debtor entities,
make up a corporate family known as Risk Management Alternatives.
These entities perform contingency collections, outsourcing and
related services, and acquiring portfolios of delinquent accounts
receivable.

             Prepetition Relationship with Equifax

RMA entered into the purchased receivables market in 2000 by
acquiring the debt portfolios of Equifax Risk Management Services,
a division of Equifax Information.  These debt portfolios are held
by Purchased Paper LLC, one of the Debtors.  Purchased Paper is
wholly-owned by RMA Holdings LLC -- which Risk Management
Alternatives Parent Corp. and Equifax hold membership interests.

The Lease

Equifax is party to a lease agreement with MRSL Atlanta I, LLC, as
landlord.  Equifax assigned the lease to Risk Management
Alternatives Solutions, LLC.  RMA Holdings guarantee Solutions'
performance under the lease of the property located at 4360
Northeast Expressway in Atlanta, Georgia.

Asset Sale

As a result of their financial difficulties, the RMA entities were
marketed and purchasers were sought to buy the group's assets.
Kaulkin Ginsberg Company's efforts resulted in a stalking horse
bid from the NCO Group, Inc., to purchase substantially all of the
Debtors' assets.

The sale of the portfolios needs Equifax's approval.  To resolve
this, the parties entered into a Master Restructuring Agreement.
The agreement provides, among other things, that Equifax will
relinquish its interest in the portfolios and surrender its 49%
stake in RMA Holdings to the successful bidder.

Also, the agreement obliges Solutions to perform its postpetition
obligations under the lease agreement until such time it has
assumed and assigned or rejected the lease.

Headquartered in Duluth, Georgia, Risk Management Alternatives,
Inc. -- http://www.rmainc.net/-- provides consumer and commercial
debt collections, accounts receivable management, call center
operations, and other back-office support to firms in the
financial services, telecommunications, utilities, and healthcare
sectors, as well as government entities.  The Company and ten
affiliates filed for chapter 11 protection on July 7, 2005 (Bankr.
N.D. Ohio Case Nos. 05-43959 through 05-43969).  Shawn M. Riley,
Esq., at McDonald, Hopkins, Burke & Haber Co., LPA, represents the
Debtors in their chapter 11 proceedings.  When the Debtors filed
for protection from their creditors, they estimated more than $100
million in assets and between $50 million to $100 million in
debts.


RISK MANAGEMENT: Qwest Objects to Proposed Asset Sale
-----------------------------------------------------
Qwest Corporation, Qwest Business Resources, Inc. and Qwest
Communications Corporation object to the proposed sale of
substantially all of the assets owned by Risk Management
Alternatives, Inc., and its debtor affiliates.

As previously reported in the Troubled Company Reporter, The
Debtors decided on the sale after determining that other
turnaround initiatives required significant capital.
Pennsylvania-based NCO Group, Inc., has presented a $150 million
stalking horse bid for the assets.

The Qwest entities are against the proposed sale because the
Debtors stipulated a $0 cure amount due to them as a condition for
the assumption and assignment of certain executory contracts and
unexpired leases related to the sale.

The Qwest entities tell the U.S. Bankruptcy Court for the Northern
District of Ohio, Western Division, that the zero value cure
amount is inconsistent with the Debtors' own admission regarding
the amounts due to QC and QCC as stated in a prior Adequate
Assurance Stipulation.

Roger J. Stevenson, Esq., counsel for the Qwest entities, says
that the Debtors owe approximately $8,500 in prepetition
liabilities to QC and approximately $96,000 in prepetition
liabilities to QCC.  The Debtors admitted to owing these amounts
in the Adequate Assurance Stipulation signed in July 2005.

Mr. Stevenson says that the cure amount due to the Qwest entities
is approximately $104,500, plus post-petition amounts, and not $0
as the Debtors claim.  He says that the Debtors cannot assume the
Qwest contracts unless the cure amounts are paid.

Mr. Stevenson adds that the Debtors and the proposed purchaser
have not demonstrated any financial backing, escrow deposit, or
similar forms of security to provide the Qwest entities with
adequate assurance of performance.  He says that his clients will
not agree to the assumption of their contracts unless the Debtors
provide adequate assurance.

Headquartered in Duluth, Georgia, Risk Management Alternatives,
Inc. -- http://www.rmainc.net/-- provides consumer and commercial
debt collections, accounts receivable management, call center
operations, and other back-office support to firms in the
financial services, telecommunications, utilities, and healthcare
sectors, as well as government entities.  The Company and ten
affiliates filed for chapter 11 protection on July 7, 2005 (Bankr.
N.D. Ohio Case Nos. 05-43959 through 05-43969).  Shawn M. Riley,
Esq., at McDonald, Hopkins, Burke & Haber Co., LPA, represents the
Debtors in their chapter 11 proceedings.  When the Debtors filed
for protection from their creditors, they estimated more than $100
million in assets and between $50 million to $100 million in
debts.


ROBERT WRIGHT: Case Summary & 16 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Robert E. Wright, Sr.
        aka Robert Wright
        aka Robert E Wright
        aka Vinyl Siding & Windows, Inc.
        aka Bob Wright Corporation
        aka Bob Wright Motor Company
        534 North Broadway
        Sylacauga, Alabama 35150

Bankruptcy Case No.: 05-42859

Type of Business:

Chapter 11 Petition Date: August 25, 2005

Court: Northern District of Alabama (Anniston)

Debtor's Counsel: Harry P Long, Esq.
                  P.O. Box 1468
                  Anniston, Alabama 36202
                  Tel: (256) 237-3266

Total Assets: $940,000

Total Debts:  $1,025,894

Debtor's 16 Largest Unsecured Creditors:

   Entity                                      Claim Amount
   ------                                      ------------
   Southtrust Bank of Alabama                      $100,000
   P.O. Box 830837
   Birmingham, AL

   Southtrust Bank of Alabama                       $14,000
   P.O. Box 830837
   Birmingham, AL

   American Express Business                         $9,542
   P.O. Box 360001
   Fort Lauderdale, Fl 33329

   Talladega County Revenue Commissioner             $7,000

   Talladega Hardware                                $6,593

   Marvin's Inc.                                     $6,200

   American Express Optima                           $5,678

   Sears Card                                        $5,634

   MBNA America                                      $5,612

   Citi Cards                                        $2,697

   Home Depot Credit Service                         $2,052

   Bank One                                          $1,873

   AmSouth Bank                                      $1,790

   Bank One Mastercard                               $1,497

   Sam's Club                                          $892

   Southtrust Bank of Alabama                          $500


SAINT VINCENTS: Wants to Establish Insurance Subsidiary
-------------------------------------------------------
Stephen B. Selbst, Esq., at McDermott Will & Emery LLP, in New
York, tells the U.S Bankruptcy Court for the Southern District of
New York that Saint Vincent Catholic Medical Centers of New York
has maintained several medical professional liability programs
which involve:

    (a) primary insurance purchased from third parties like
        National Union Fire Insurance Company of Pennsylvania;

    (b) reinsurance of those liabilities through a wholly owned
        subsidiary of SVCMC; and

    (c) excess reinsurance from unrelated third parties like
        Transatlantic Reinsurance Company.

The primary medical professional liability insurance presently
provided by National Union AIG is a claims made policy with a per
occurrence limit of $1,300,000 and an aggregate liability cap of
$3,900,000 to allow access to the medical professional liability
insurance provided by Transatlantic AIG.  The current policy
provides insurance to 200 attending physicians for which the
Debtors have provided medical professional liability insurance on
a prepetition basis and will expire on November 1, 2005.

Mr. Selbst explains that the purchase of primary medical
professional liability insurance from a carrier licensed by the
State of New York qualifies each attending physician at no cost
for an additional $1,000,000 per occurrence and $3,000,000 in the
aggregate of medical professional liability insurance under a
state program, which would otherwise be unavailable.  Absent this
state program, additional insurance with significant costs to the
Debtors would be necessary to maintain the existing levels of
liability coverage for the attending physicians.

In 1991, to maximize the value of its medical professional
liability insurance programs, Catholic Medical Centers, as
predecessor to SVCMC, established Queensbrook Insurance Limited
as a wholly owned subsidiary.  Queensbrook Insurance operates as
a licensed entity in the Cayman Islands and its principal
activity is the insurance and reinsurance of SVCMC and certain of
its affiliates and professionals.

Several lines of casualty coverage underwritten by Queensbrook
Insurance to SVCMC exist, including reinsured medical
professional liability insurance of primary medical professional
liability insurance presently purchased by SVCMC from National
Union AIG for certain of the attending physicians.

Beginning in July 1991, Queensbrook Insurance reinsured the
medical professional liability of certain physicians employed by
SVCMC and its affiliates for up to $1,000,000 per occurrence.
Queensbrook Insurance's maximum retention has been for the first
$500,000 for each physician for each covered loss, with an
aggregate liability cap of $7,000,000 per year.  Excess
professional liability insurance has been further reinsured
through an unrelated third party, subject to an aggregate cap of
$8,000,000.

Effective in July 1996, this reinsurance was expanded to provide
similar coverage for certain attending physicians for their
services at SVCMC, its facilities, affiliates, and in private
practice.  As of July 2003, Queensbrook Insurance acted as re-
insurer for up to $1,300,000 per occurrence and the maximum
retention remained at $500,000.

Prior to the Petition Date, the Debtors initiated a review of the
various alternatives for primary medical professional liability
insurance for certain of the attending physicians, including the
possibility of forming a wholly owned insurance subsidiary.

On August 15, 2005, National Union AIG officially notified the
attending physicians that it would not renew the existing primary
medical professional liability insurance polices on expiration.

The Debtors have evaluated the primary medical professional
liability policies generally available in the marketplace and
concluded that establishing a wholly owned insurance subsidiary
to provide insurance allows the Debtors the maximum value and
flexibility considering existing needs and assets.

By establishing a wholly owned insurance subsidiary licensed by
the State of New York, the Debtors will maintain existing levels
of insurance for certain of the attending physicians and avoid
third party costs of $269,000 on an annual basis.

Pursuant to Sections 105 and 363 of the Bankruptcy Code, the
Debtors seek authority, but not the obligation, to incorporate,
capitalize and operate a wholly owned insurance subsidiary to be
licensed by the State of New York and provisionally named
Queensbrook New York, Inc.

The Debtors intend to incorporate and capitalize Queensbrook New
York, Inc., with $275,000 in cash and equivalents on or before
November 1, 2005.  The target date for Queensbrook New York's
operations is October 1, 2005.

Mr. Selbst says that because the underwriting to be performed by
Queensbrook New York replaces similar third party insurance,
which carries additional costs, the Debtors' request is
consistent with prepetition practices, in the best interests of
their estates and the creditors and essential to the continued
operation of their businesses in the ordinary course.

"Absent the expeditious replacement of primary medical
professional insurance for certain of the Debtors' attending
physicians, the Debtors face increased costs and risk a
substantial disruption to their mission and the delivery of high
quality health care."

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


SAINT VINCENTS: NewEnergy Wants to Terminate Energy Services Pact
-----------------------------------------------------------------
Constellation NewEnergy, Inc., asks the U.S. Bankruptcy Court for
the Southern District of New York for authority to terminate,
under Section 556, its Energy Services Agreement with Saint
Vincents Catholic Medical Centers.  Alternatively, NewEnergy asks
the Court to modify the stay to allow it to terminate the
Agreement on 30 days' written notice in accordance with its terms.

On October 10, 2003, NewEnergy entered into an Energy Services
Agreement with SVMC.  Under the Agreement, NewEnergy sells
specific volumes of electricity to certain accounts that SVCMC
maintains with the Consolidated Edison Company of New York, its
electric distribution utility.  Con Edison delivers the
electricity sold to SVCMC.

Lawrence M. Handelsman, Esq., at Stroock & Stroock & Lavan LLP,
in New York, informs the Court that the initial term of the
Agreement expired in May 2005.  For the past two months, in
accordance with the Agreement, NewEnergy, "at its sole
discretion," has been continuing to sell electricity to SVCMC on
a "month-to-month basis, subject to a 30-day written notice of
termination by either party."

On July 11, 2005, the Court entered an order prohibiting utility
companies, including NewEnergy, from discontinuing service to the
Debtors.

Section 556 of the Bankruptcy Code provides that a forward
contract merchant can terminate a forward contract based on an
Ipso Facto Default clause in the contract notwithstanding the
automatic stay or other provisions of the Bankruptcy Code.

Mr. Handelsman asserts that NewEnergy is a forward contract
merchant because it is engaged in the business of buying and
selling electricity on a forward basis for profit.  SVCMC has
recognized NewEnergy's status as a forward contract merchant in
the creditworthiness provisions of the Agreement.

In addition, under the Agreement, NewEnergy has a contractual
right to terminate the Agreement in the event that SVCMC becomes
insolvent or declares bankruptcy, Mr. Handelsman contends.

Pursuant to Section 556, NewEnergy has the right to terminate the
Agreement and liquidate its position without the Court's
approval.  However, out of an abundance of caution, NewEnergy
seeks the Court's permission to terminate the Agreement.

Mr. Handelsman asserts that, absent SVCMC's bankruptcy, the
Agreement is presently terminable under non-bankruptcy law.  It
would then be unfair to force NewEnergy to perform under a
contract, which no longer has duration and instead provides that
its continuation is in NewEnergy's sole discretion and is solely
on a month-to-month basis.

Since the energy is provided at market rates, Mr. Handelsman
says, termination of the Agreement will not deprive the estate of
any economic benefit.  "SVCMC will not be at risk for loss of
service, as Con Edison is required, pursuant to applicable
tariffs, to continue delivery of the product even if the
Agreement with NewEnergy is terminated."

                 Adequate Assurance of Payment

Mr. Handelsman tells the Court that as of August 5, 2005,
NewEnergy is owed $680,000 for energy provided postpetition to
SVCMC, for which it has received no payment.  "The administrative
expense status for the postpetition amounts owed is not an
adequate assurance of payment for NewEnergy's services."

Accordingly, NewEnergy requests additional assurance of payment
pursuant to Sections 503(b) and 507(a)(1), pending termination of
the Agreement.

The Agreement currently has 60-day payment terms.  Mr. Handelsman
explains that during an average billing and payment cycle, SVCMC
accrues $1 million for electricity provided by NewEnergy.

NewEnergy has asked SVCMC for security in the form of a cash
payment for one month's service, and a shorter billing cycle or
alternatively for an estimated prepayment on a 15-day billing
cycle, as adequate assurance of payment.

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


SAINT VINCENTS: Prepares to Shut Down St. Mary's Hospital
---------------------------------------------------------
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates seek authority from the U.S. Bankruptcy Court
for the Southern District of New York to close St. Mary's Hospital
in Brooklyn pursuant to the directives of the New York State
Department of Health and other applicable government agencies.

St. Mary's Hospital is a 269-bed hospital located at 170 Buffalo
Avenue in Brooklyn, New York.  It was founded in 1892 by the
Sisters of Charity of St. Vincent de Paul. The hospital provides
general inpatient and outpatient medical services, inpatient
detoxification services, ambulatory surgery, HIV treatment, dental
services, emergency department, women's health services, and wound
care.

According to James M. Sullivan, Esq., at McDermott Will & Emery
LLP, in New York, St. Mary's Hospital has struggled financially
for several years.  It incurred losses in excess of $24 million
in 2004.

Saint Vincent Catholic Medical Centers was required to allocate
more than $60 million to St. Mary's Hospital for required
operating costs and capital expenditures for the period from
2001-2004.

For the six-month period ended June 30, 2005, St. Mary's Hospital
has already lost more than $9 million.

              St. Mary's Hospital Financial Overview
              --------------------------------------

                                                   Capital
                      Revenues     Income(Loss)  Expenditures
                      --------     -----------   ------------
       2002        $171,333,000     $1,208,000    $7,151,000
       2003        $162,513,000   ($28,847,000)   $6,538,000
       2004        $119,845,000   ($24,374,000)   $4,264,000
       6/30/2005    $56,609,000    ($9,670,000)     $979,000

Mr. Sullivan tells the Court that based on these substantial
losses, SVCMC has been faced with the decision to take steps to
stop the losses before they threaten patient care at other SVCMC
institutions and cause the other SVCMC operations to lose value.

Due to its own lack of liquidity, SVCMC can no longer afford to
provide continuing financial support to St. Mary's Hospital, Mr.
Sullivan says.

Mr. Sullivan assures the Court that St. Mary's current patients
will continue to have convenient access to health care when it
closes.  Four major hospitals with facilities in the Central
Brooklyn area have agreed to work with St. Mary's Hospital to
transition its patients to their inpatient and ambulatory care
services to the extent possible.

             Sponsor Solicitation & Efforts to Transfer

Mr. Sullivan relates that SVCMC has made extensive efforts to
transfer St. Mary's Hospital to another sponsor.

During 2004, after a comprehensive exploration process, SVCMC
identified Kingsbrook HealthCare System as a potential transferee
of St. Mary's and began to negotiate the terms of a potential
transfer.  But no deal was signed because Kingbrook didn't have
enough funds to complete a purchase of St. Mary's.

Although Kingsbrook was unable to acquire St. Mary's Hospital,
Mr. Sullivan says, it has indicated that it is prepared to start
programs to continue the provision of substantially all of the
clinic-based services now provided by St. Mary's Hospital.

On August 18, 2005, SVCMC cooperated and negotiated in good faith
with prospective employee purchasers of St. Mary's.  SVCMC has
entered into confidentiality agreements with them and have had
its proposed investment bankers, Cain Brothers & Company LLC,
meet with the employees to discuss the financing aspects of their
proposed purchase.

                           Closure Plan

Mr. Sullivan points out that under the applicable provisions of
the Public Health Law, (NYCRR 401.3(g)), SVCMC is required to
obtain the approval of the DOH of a closure plan before it can
close St. Mary's.  In early June 2005, SVCMC submitted a draft
closure plan to the DOH, which dealt with, among other things,
the transfer of patients, transition of services and custody of
patient records.

Mr. Sullivan relates that under applicable law, the DOH does not
have the authority to require a hospital to remain open if its
sponsor is not able to support it financially.  The DOH's review
of the Closure Plan is essentially limited to the closing
hospital's satisfactory plans for the transfer of patients,
transition of services and custody of patient records.

On July 22, 2005, the Debtors gave notice to St. Mary's employees
pursuant to the Worker Adjustment and Retraining Notification Act
of 1988, as amended.  Pursuant to the Warn Act, the Debtors were
required to give 60 days' notice and are permitted a two-week
grace period of the closing of St. Mary's Hospital and the
termination of its employees.

The Warn Act Notice Period expires on October 4, 2005.

Mr. Sullivan explains that if St. Mary's does not close by
October 4, 2005, the Debtors will be required to give an
additional notice and wait for the expiration of the new notice
period or face Warn Act penalties, which would include salary
payments in addition to any severance that is owed.

Arrangements are being made to make sure that St. Mary's
employees will find a new job as soon as possible.

According to Mr. Sullivan, the Closure Plan is in the final
stages of receiving DOH approval.

Until the DOH approves the Closure Plan, Mr. Sullivan says, St.
Mary's will continue operations in the ordinary course of
business and will use its best business judgment to minimize the
mounting losses.

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


SAKS INC: Reimbursing Suppliers $48.2M for Improper Collections
---------------------------------------------------------------
Saks Incorporated (NYSE: SKS) said it will pay $48.2 million to
vendors from which it improperly collected markdown allowances
between fiscal 1996 and fiscal 2004.  The $48.2 million total is
comprised of:

   * $26 million of markdown allowances during the Company's
     1999-2003 fiscal years;

   * $8.2 million of markdown allowances during the 1996-1998
     fiscal years; and

   * interest at the rate of 7.25% per annum, totaling
     approximately $14 million.

The Company arrived at the amount it needs to pay after the
completion of its management's confirmatory and supplementary work
arising from the findings of the internal investigation conducted
by the Audit Committee of the Company's Board of Directors, which
was initially disclosed by the Company on March 3, 2005.

The Company recently began sending reimbursements to affected
vendors.

The Audit Committee's investigation also examined SFAE's
allocations to vendors during the 1999-2003 fiscal years of a
portion of markdown costs associated with certain of SFAE's
customer loyalty and other promotional activities.  The Audit
Committee's investigation concluded that the mechanism for making
these allocations was not communicated to vendors.  The Company
considered these issues and concluded that these allocations did
not result in the improper collection of markdown allowances from
vendors.

The Audit Committee's initial investigation disclosed on
March 3, 2005, was commenced at management's request.  On
May 9, 2005, the Company disclosed the independent investigators'
conclusion that, during the Company's 1999-2003 fiscal years, one
of six Saks Fifth Avenue merchandising divisions improperly
collected markdown allowances from vendors totaling approximately
$20 million.  The Company also disclosed on May 9, 2005, that
Company management was undertaking its own work to confirm this
amount and to supplementally determine whether that SFAE division
improperly collected markdown allowances before fiscal 1999.

Saks Incorporated operates Saks Fifth Avenue Enterprises (SFAE),
which consists of 57 Saks Fifth Avenue stores, 52 Saks Off 5th
stores, and saks.com.  The Company also operates its Saks
Department Store Group (SDSG) with 232 department stores under the
names of Parisian, Proffitt's, McRae's, Younkers, Herberger's,
Carson Pirie Scott, Bergner's, and Boston Store and 47 Club Libby
Lu specialty stores.  On April 29, 2005, the Company announced
that it had entered into an agreement to sell 22 Proffitt's stores
and 25 McRae's stores to Belk, Inc.  The Company expects to
complete the sale on July 5, 2005, subject to various closing
conditions.

                         *     *     *

As reported in the Troubled Company Reporter on Aug. 8, 2005,
Moody's Investors Service changed the direction of Saks Inc.
review to on review for possible upgrade from on review for
possible downgrade as a result of the company effectively curing
the defaults triggered by its failure to timely file its fiscal
year end financial statements, as well as its improved liquidity
as a result of a significant asset sale:

   * Corporate family of B2;

   * Senior unsecured debt guaranteed by operating
     subsidiaries of B2;

As reported in the Troubled Company Reporter on July 22, 2005,
Standard & Poor's Ratings Services raised its corporate credit and
senior unsecured debt ratings on Saks Inc. to 'B+' from 'CCC+' to
reflect the successful completion of a tender offer that reduced
debt by $585 million.  The ratings remain on CreditWatch with
developing implications.


SAKS INC: Restating Financial Statements After Audit Panel Inquiry
------------------------------------------------------------------
Saks Incorporated (NYSE: SKS) will restate its financial
statements for fiscal 1999 through the third quarter of fiscal
2004.  The Company expects that its restatement work will be
completed, and the 2004 Form 10-K will be filed, on or shortly
after September 1, 2005.  The Company also expects that its
Quarterly Reports on Form 10-Q for the fiscal quarters ended April
30, 2005 and July 30, 2005 will be filed on or shortly after
September 30, 2005.

The Company has informed the Securities and Exchange Commission
and the Office of the United States Attorney for the Southern
District of New York of the Audit Committee's initial
investigation and its supplemental inquiry. The Company is
continuing to cooperate fully with investigations being conducted
by the SEC and the Office of the United States Attorney.

The Company completed the Audit Committee's supplemental inquiry.

      Completion of Audit Committee's Supplemental Inquiry

On June 3, 2005, the Company disclosed that the Audit Committee
had begun a supplemental inquiry into:

   (1) timing of recording of inventory markdowns and vendor
       markdown allowances at SFAE,

   (2) whether there had been any overcollections of vendor
       markdown allowances in any of the merchandising divisions
       of SFAE that had not been the subject of the Audit
       Committee's initial investigation, and

   (3) whether there had been any inappropriate
       billing/logistics/transportation compliance chargebacks by
       the Company to any of its merchandise vendors.

The Audit Committee requested Company management to review the
investigation's findings regarding timing of recording of
inventory markdowns and to review timing of recording of vendor
markdown allowances.  This supplemental inquiry has now been
completed.

The Audit Committee's supplemental inquiry did not find any
overcollections of vendor markdown allowances in any of the
merchandising divisions of SFAE that had not been the subject of
the Audit Committee's initial investigation.  Steps to confirm
amounts of markdown allowances collected from certain vendors
during specified seasons have begun, and this work is ongoing.  In
addition, the supplemental inquiry did not find any fraudulent
activities with respect to billing/logistics/transportation
compliance chargebacks.

The Audit Committee's supplemental inquiry did find evidence at
SFAE of improper timing of recording of inventory markdowns during
the fiscal years 1999 and 2001.  Company management believes that,
as a result of this improper timing, gross margin and operating
income:

   (1) for the second quarter of fiscal year 1999 were overstated,
       and for the third quarter of fiscal year 1999 were
       understated, by approximately $14.5 million, and

   (2) for the second quarter of fiscal year 2001 were overstated,
       and for the third quarter of fiscal year 2001 were
       understated, by approximately $11 million.

As a result of these findings, the Company will take disciplinary
action with respect to one current SFAE associate concerning this
activity.  Company management does not believe that these Audit
Committee findings of improper timing of recording of inventory
markdowns will have any effect on the restatement of the Company's
prior financial statements because the improper timing of
recording of inventory markdowns during the fiscal years 1999 and
2001 did not affect annual financial results reported for those
fiscal years.

Company management's supplemental review and analysis, in part
based on the findings of the Audit Committee's investigation,
identified evidence at SFAE of incorrect timing of recording of
vendor markdown allowances that affected the quarterly reporting
periods for fiscal years 2003 and 2004.  Company management
believes that, as a result of this incorrect timing, gross margin
and operating income:

   (1) for the first quarter of fiscal year 2003 were overstated,
       and for the second quarter of fiscal year 2003 were
       understated, by approximately $3.3 million,

   (2) for the third quarter of fiscal year 2003 were overstated,
       and for the fourth quarter of fiscal year 2003 were
       understated, by approximately $4.4 million,

   (3) for the first quarter of fiscal year 2004 were overstated,
       and for the second quarter of fiscal year 2004 were
       understated, by approximately $4 million, and

   (4) for the third quarter of fiscal year 2004 were overstated,
       and for the fourth quarter of fiscal year 2004 were
       understated, by approximately $6 million.

Company management expects to reflect these quarterly overstated
and understated amounts in the restated quarterly financial
information for fiscal years 2003 and 2004 that will be included
in the footnotes to the financial statements that the Company will
include in its Annual Report on Form 10-K for the fiscal year
ended January 29, 2005.  Company management believes the incorrect
timing of recording of vendor markdown allowances did not affect
annual financial results for fiscal years 2003 or 2004.

Saks Incorporated operates Saks Fifth Avenue Enterprises (SFAE),
which consists of 57 Saks Fifth Avenue stores, 52 Saks Off 5th
stores, and saks.com.  The Company also operates its Saks
Department Store Group (SDSG) with 232 department stores under the
names of Parisian, Proffitt's, McRae's, Younkers, Herberger's,
Carson Pirie Scott, Bergner's, and Boston Store and 47 Club Libby
Lu specialty stores.  On April 29, 2005, the Company announced
that it had entered into an agreement to sell 22 Proffitt's stores
and 25 McRae's stores to Belk, Inc.  The Company expects to
complete the sale on July 5, 2005, subject to various closing
conditions.

                         *     *     *

As reported in the Troubled Company Reporter on Aug. 8, 2005,
Moody's Investors Service changed the direction of Saks Inc.
review to on review for possible upgrade from on review for
possible downgrade as a result of the company effectively curing
the defaults triggered by its failure to timely file its fiscal
year end financial statements, as well as its improved liquidity
as a result of a significant asset sale:

   * Corporate family of B2;

   * Senior unsecured debt guaranteed by operating
     subsidiaries of B2;

As reported in the Troubled Company Reporter on July 22, 2005,
Standard & Poor's Ratings Services raised its corporate credit and
senior unsecured debt ratings on Saks Inc. to 'B+' from 'CCC+' to
reflect the successful completion of a tender offer that reduced
debt by $585 million.  The ratings remain on CreditWatch with
developing implications.


SEGA GAMEWORKS: Files First Amended Plan of Reorganization
----------------------------------------------------------
Sega Gameworks L.L.C. delivered its First Amended Plan of
Reorganization to the Central District of California, Los Angeles
Division.  The Court approved the Debtor's Disclosure Statement
explaining its Plan on Aug. 10, 2005.

                      Treatment of Claims

Pursuant to the Plan, these chapter 11 professionals'
administrative priority claims will be paid in full:

      Amount  Professional
      ------  ------------
     $20,000  U.S. Trustee Fees
    $125,000  Pachulski Stang Ziehl Young Jones & Weintraub, PC
    $125,000  Giuliani Capital Advisors LLC
    $250,000  Levene, Neale, Bender, Rankin & Brill L.L.P.
     $50,000  Paul Hastings Janofsky & Walker LLP
     $20,000  Seyfarth Shaw, LLP
     $75,000  KPMG, LLC
     $15,000  Steel Hector & Davis LLP
     $15,718  Liberatore & Associates
    $185,000  Joint Venture of Cushman Makefield, Inc.
     $25,000  Julien J. Studley, Inc.
   ---------
    $905,519

The Debtors estimate they'll owe, and pay in full, another
$800,000 to $1,000,000 of administrative priority claims to other
Non-Bankruptcy Professionals.

On the Effective Date, the Debtor will establish:

     * a professional fee reserve for $250,000; and
     * an expense reserve for $100,000.

All undisputed portions of a priority tax claim will be paid on
the Effective Date; disputed portions of that claim will be paid
upon the later of the effective date or the entry of an order
allowing such claim.

These claims against the Estate have already been paid in full:

          Claims                             Amount
          ------                             ------
          Heller EMX, Inc.                 $552,640
          Key Corporate Capital, Inc.      $235,952
          Block E Interests              $5,205,591

General Unsecured creditors, not covered by any insurance policy,
are owed approximately $6 million to $7 million.  The Plan
Administrator will make interim cash distributions to these
creditors on a pro rata basis.  Unsecured creditors are expected
to recover 24% to 31% of their claims.

Equity interest holders will receive no distribution under the
Plan.

                          Plan Funding

The Debtor estimates it will have a $4.5 million cash on hand on
the Effective Date generated from the sale of its Detroit location
to SEUI.  Those sale proceeds, the Debtor says, will be more than
enough to make required distributions of $2,277,875 to $2,477,875
on the Effective Date to satisfy administrative, tax and priority
claims.

Headquartered in Glendale, California, SEGA Gameworks LLC --
http://www.gameworks.com/-- operates 16 video arcades in 11 US
states, Canada, Guam, and Kuwait.  The Company filed for chapter
11 protection on March 9, 2004 (Bankr. C.D. Calif. Case No.
04-15404).  Ron Bender, Esq., at Levene Neale Bender Rankin &
Brill represents the Debtor in its restructuring efforts.  When
the Company filed for protection from its creditors, it listed
both estimated debts and assets of $50 million.


SHOPKO STORES: Sr. Noteholders Have Until Sept. 15 to Tender Bonds
------------------------------------------------------------------
ShopKo Stores, Inc. (NYSE: SKO) extended its offer to purchase any
and all of its outstanding $100 million principal amount of 9-1/4%
Senior Notes due 2022 in connection with the previously announced
definitive merger agreement that provides for the acquisition of
ShopKo by Badger Retail Holding, Inc., and Badger Acquisition
Corp., which are affiliates of Minneapolis-based private equity
firm Goldner Hawn Johnson & Morrison Incorporated.

The Offer, scheduled to expire on Wednesday, Aug. 24, 2005 at 5:00
p.m., New York City time, will now expire at 9:30 a.m., New York
City time, on Thursday, Sept. 15, 2005, unless further extended or
earlier terminated by ShopKo.  All other terms, provisions and
conditions of the Offer will remain in full force and effect.  The
terms of the Offer and Solicitation are described in the Offer to
Purchase and Consent Solicitation Statement dated June 30, 2005,
as amended by a Supplement dated Aug. 10, 2005.

ShopKo disclosed on Aug. 15, 2005, that it had received the
requisite consents to amend the indenture governing the Notes.
ShopKo executed the supplemental indenture on Aug. 16, 2005,
eliminating substantially all of the restrictive covenants and
certain events of default in the indenture governing the Notes.
Copies of the Offer to Purchase and Consent Solicitation Statement
may be obtained from Global Bondholder Services Corporation, the
information agent for the Offer, at (866) 736-2200 (US toll free)
or (212) 430-3774 (collect).

ShopKo said it has been informed by the information agent that, as
of 5:00 p.m., New York City time, on August 24, 2005,
approximately $92.6 million in aggregate principal amount of Notes
had been tendered in the Offer.  This amount represents
approximately 92.6% of the outstanding principal amount of the
Notes.

Banc of America Securities LLC and Morgan Stanley & Co.
Incorporated are acting as the dealer managers for the Offer.
Questions regarding the Offer may be directed to Banc of America
Securities LLC, the lead dealer manager, at (212) 847-5834 or
(888) 292-0070.

ShopKo Stores, Inc. -- http://www.shopko.com/-- is a retailer of
quality goods and services headquartered in Green Bay, Wisconsin,
with stores located throughout the Midwest, Mountain and Pacific
Northwest regions.  Retail formats include 140 ShopKo stores,
providing quality name-brand merchandise, great values, pharmacy
and optical services in mid-sized to larger cities; 223 Pamida
stores, 116 of which contain pharmacies, bringing value and
convenience close to home in small, rural communities; and three
ShopKo Express Rx stores, a new and convenient neighborhood
drugstore concept.  With more than $3 billion in annual sales,
ShopKo Stores, Inc., is listed on the New York Stock Exchange
under the symbol SKO.

                        *     *     *

As reported in the Troubled Company Reporter on April 18, 2005,
Moody's Investors Service placed the long-term debt ratings of
Shopko Stores, Inc., on review for possible downgrade following
the company's announcement that it had signed a definitive merger
agreement to be acquired by an affiliate of Goldner Hawn Johnson &
Morrison.  The downgrade reflects the anticipated significant
increase in leverage as a result of the proposed transaction.

The transaction is valued at slightly more than $1 billion and is
expected to be funded predominantly from debt with only $30
million of the purchase price to be funded by equity.  The company
has received a commitment from Bank of America to provide $700
million in real estate financing and additional commitments from
Bank of America and Back Bay Capital Funding LLC to provide $415
million in senior debt financing.

The proceeds from these financings along with the $30 million of
equity will be used to pay the merger consideration, refinance the
borrowings under the existing revolving credit facility, fund the
amounts due under the expected tender offer for the $100 million
senior unsecured notes due 2022, plus all fees and expenses.

In addition, the financing will be used to cover all future
working capital needs.  If substantially all of the senior notes
are tendered the rating on those notes will be withdrawn.  The
review will focus on the debt protection measures of Shopko post
acquisition as well as the company's business strategy going
forward.

These ratings are placed on review for possible downgrade:

   * Senior implied of B1;
   * Issuer rating of B2; and
   * Senior unsecured notes due 2022 of B2.


SIERRA HEALTH: Three Noteholders Convert $19M Notes to Stock
------------------------------------------------------------
Sierra Health Services, Inc., entered into privately negotiated
transactions with three holders of Sierra's 2-1/4% Senior
Convertible Debentures due 2023 pursuant to which the Holders
converted the Debentures they owned into Sierra common stock, par
value $.005 per share, in accordance with the indenture governing
the debentures.

The holders converted $19,000,000 aggregate principal amount of
the Debentures and, upon such conversion, received:

   (1) 1,038,819 shares of Common Stock; and

   (2) $641,000 in cash for accrued and prepaid interest.

Sierra will incur a third quarter expense of approximately
$800,000 related to this transaction due to the write-off of the
associated deferred debenture-related costs and the $451,000 in
incurred prepaid interest.

Sierra Health Services Inc. -- http://www.sierrahealth.com/--  
based in Las Vegas, is a diversified health care services company
that operates health maintenance organizations, indemnity
insurers, military health programs, preferred provider
organizations and multispecialty medical groups. Sierra's
subsidiaries serve more than 1.2 million people through health
benefit plans for employers, government programs and individuals.

                         *     *     *

As reported in the Troubled Company Reporter on May 19, 2005,
Fitch Ratings has upgraded its long-term issuer and senior debt
ratings on Sierra Health Services, Inc. to 'BB+' from 'BB', as
well as the insurer financial strength ratings of SIE's core
insurance subsidiaries Health Plan of Nevada, Inc. and Sierra
Health and Life Insurance Co., Inc. to 'BBB+' from 'BBB'.  The
rating action affects approximately $115 million of outstanding
public debt.  Fitch says the Rating Outlook is Stable.

As reported in the Troubled Company Reporter on May 18, 2005,
Standard & Poor's Ratings Services raised its counterparty credit
rating on Sierra Health Services Inc. to 'BB' from 'B+'.

Standard & Poor's also said that it raised its senior unsecured
debt rating on Sierra's $115 million, 2.25% senior convertible
notes, which are due in March 2023, to 'BB' from 'B+'.  S&P says
the outlook is stable.


SKIN NUVO: Files Joint Plan of Liquidation in Nevada
-----------------------------------------------------
Skin Nuvo International LLC, and its debtor-affiliates, delivered
their Joint Plan of Reorganization to the U.S. Bankruptcy Court
for the District of Nevada

The Plan provides for the liquidation of the Debtors' assets.  All
sale proceeds, as well as recoveries from avoidance actions and
other causes of action, will be distributed to creditors in
accordance with the priorities set forth in the Bankruptcy Code.

Greg T. Murray, the Debtors' CEO, will have the authority to
liquidate the Reorganized Debtors' remaining assets.  As
previously reported, Skin Nuvo sold substantially all of its
assets to Goldin Restructuring Fund LLP for $5.2 million in cash
plus assumption of certain debts and lease-related obligations.
The sale closed on June 22, 2005.

Other salient terms of the Plan include:

   * Allowed secured claim holders will receive the return of
     their collateral.

   * Syneron will receive the return of the Syneron equipment
     which will be sold pursuant to the terms of a sale order.

   * General unsecured creditors will receive pro rata shares of
     the sale proceeds and other estate assets.  The Plan does
     not attempt to quantify the value of those shares.

   * Allowed customer claims will be paid in full.

   * Allowed subordinated claims and equity interests holders
     will receive no distribution under the plan.

Headquartered in Henderson, Nevada, Skin Nuvo International, LLC,
dba Nuvo International, LLC, and dba A&E Aesthetics, LLC --
http://www.nuvointernational.com/-- specializes in offering
progressive anti-aging treatments and top quality products and the
first medical cosmetic company to launch a chain of retail skin
care clinics in shopping malls throughout the United States.
Keith M. Aurzada, Esq., and Sarah Link Schultz, Esq., at Akin Gump
Strauss Hauer & Fled LLP represent the Debtors.  The Company and
its debtor-affiliates filed for chapter 11 protection on March 7,
2005 (Bankr. D. Nev. Case No. 05-50463).  When the Debtors filed
for protection from their creditors, they estimated assets and
debts of $10 million to $50 million.


SOVEREIGN BANCORP: Issues $500 Million of Senior Notes
------------------------------------------------------
Sovereign Bancorp, Inc. (NYSE: SOV), parent company of Sovereign
Bank, disclosed an issuance of $500 million of Senior Notes.
There are two tranches of debt including $200 million of 3.5 year,
floating rate notes and $300 million of 5 year, fixed rate notes.
The floating rate notes will bear interest at a rate of 3 month
LIBOR plus 28 basis points (adjusted quarterly) and mature on
March 1, 2009.  The fixed rate notes will bear interest at a rate
of 4.80% and mature on September 1, 2010.

The proceeds of the offering will be used to pay off $225 million
of a line of credit at LIBOR plus 90 basis points, provide
additional holding company cash for a previously announced stock
repurchase program, enhance the short-term liquidity of the
company, and for general corporate purposes.  Mark R. McCollom,
Chief Financial Officer of Sovereign, said, "We are very pleased
with the execution of this transaction.  As a result, we have
improved the liquidity of Sovereign Bancorp and reduced our cost
of borrowing."

The lead manager for the transaction was Goldman Sachs.  Co-
managers were Merrill Lynch, JP Morgan and Sovereign Securities,
LLC.

Sovereign Bancorp, Inc., (NYSE: SOV), is the parent company of
Sovereign Bank -- http://www.sovereignbank.com/-- a $60 billion
financial institution with more than 650 community banking
offices, over 1,000 ATMs and approximately 10,000 team members
with principal markets in the Northeast United States.  Sovereign
offers a broad array of financial services and products including
retail banking, business and corporate banking, cash management,
capital markets, trust and wealth management and insurance.
Sovereign is the 19th largest banking institution in the United
States.

                        *     *     *

As reported in the Troubled Company Reporter on April 21, 2005,
Fitch Ratings has affirmed the ratings of Sovereign Bancorp (SOV;
long-term/short-term 'BBB-/F3') and its bank subsidiary, Sovereign
Bank (long-term/short-term 'BBB/F2').  At the same time, Fitch has
revised both SOV and Sovereign Bank's Rating Outlook to Positive
from Stable.

The revision in the Rating Outlook is supported by SOV's
consistent earnings performance, sound and improved asset quality,
and the company's profitable franchise expansion.  The revision
also reflects SOV's improved financial flexibility associated with
a decline in the parent company's borrowing cost and a reduction
in double leverage.  That said, while improved, the company's
profile still exhibits a significant level of parent company debt
and a relatively modest level of tangible equity.

Ratings affirmed by Fitch and Rating Outlook revised to Positive
from Stable:

   Sovereign Bancorp, Inc.

      -- Short-term 'F3';
      -- Long-term senior 'BBB-';
      -- Subordinated debt 'BB+'
      -- Individual 'C';
      -- Support '5'.

   Sovereign Bank

      -- Short-term 'F2'.
      -- Long-term Senior 'BBB';
      -- Subordinated Debt 'BBB-'
      -- Long-term Deposits 'BBB+';
      -- Short-term deposit 'F2';
      -- Individual 'B/C';
      -- Support '4'.

Ratings Affirmed:

   Sovereign Capital Trust I

      -- Preferred Stock 'BB'.

   Sovereign Capital Trust IV

      -- Preferred Stock 'BB'.

   ML Capital Trust I

      -- Preferred Stock 'BB'.

   Sovereign Real Estate Investment Trust

      -- Preferred Stock 'BB+'


SPIEGEL INC: Wants Court to Nix Three PBGC Claims
-------------------------------------------------
Andrew V. Tenzer, Esq., at Shearman & Sterling LLP, in New York,
informs the U.S. Bankruptcy Court for the Southern District of New
York that Spiegel Inc., and its debtor-affiliates sponsor, for
their employees' benefit, various health and welfare benefit
plans, policies and programs.  Among those plans are the Debtors'
retirement benefit plans, which include a non-contributory defined
benefit pension plan.

As part of the Pension Plan, the Debtors make periodic payments
to the applicable retired employee for a certain period of time
after that employee retires from the Debtors' employment.

On September 30, 2003, the Pension Benefit Guaranty Corporation
filed three proofs of claim against Spiegel, Inc., contingent on
the termination of the Pension Plan by the Debtors.

The Debtors object to the first unliquidated claim -- Claim
No. 2745 -- on the grounds that it expressly stated to be based
on "contributions that may be owed to the Pension Plan," should
it become "underfunded" during the pendency of the Debtors'
bankruptcy cases.

The Debtors also object to Claim No. 2746 asserting an estimated
amount of $12,758,600, because it assumes that "the Pension Plan
terminated on May 31, 2003."  Pursuant to applicable law, upon
termination of the Pension Plan, its contributing sponsor is
potentially liable to the PBGC for the total amount of the
Pension Plan's unfunded benefit liabilities.

The third claim -- Claim No. 2747 -- was also filed in an
unliquidated amount based on any insurance premiums, interest and
penalties which might become due and owing to the PBGC by the
Debtors.

The Debtors contend that no amount is due and owing with respect
to each of the PBGC Claims.

To date, Mr. Tenzer says that the Debtors have not sought to
reject the Pension Plan and remain current on all necessary
payments under that Plan, pursuant to their obligations.

Moreover, Mr. Tenzer asserts that the Debtors' first amended plan
of reorganization provides that all of the Benefits Programs will
be treated as executory contracts, and, on the Plan's effective
date, will be assumed and transferred to Eddie Bauer Holdings,
Inc.  Therefore, provided the Plan is confirmed, the Pension Plan
will be assumed and the contingency on which each of the PBGC
Claims is premised will not arise.

Accordingly, subject to the Plan's confirmation, the Debtors ask
Judge Lifland to disallow and expunge the PBGC Claims in their
entirety.

Headquartered in Downers Grove, Illinois, Spiegel, Inc. --
http://www.spiegel.com/-- is a leading international general
merchandise and specialty retailer that offers apparel, home
furnishings and other merchandise through catalogs, e-commerce
sites and approximately 560 retail stores.  The Company filed for
Chapter 11 protection on March 17, 2003 (Bankr. S.D.N.Y. Case No.
03-11540).  James L. Garrity, Jr., Esq., and Marc B. Hankin, Esq.,
at Shearman & Sterling, represent the Debtors in their
restructuring efforts.  When the Company filed for protection from
its creditors, it listed $1,737,474,862 in assets and
$1,706,761,176 in debts.  The Court confirmed the Debtors'
Modified First Amended Joint Plan of Reorganization on May 23,
2005.  Impaired creditors overwhelmingly voted to accept the Plan.
(Spiegel Bankruptcy News, Issue No. 51; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


STATION CASINO: Moody's Rates $150 Million Notes' Add-On at Ba3
---------------------------------------------------------------
Moody's Investors Service raised the ratings of Station Casino,
Inc. and affirmed the company's SGL-2 speculative grade liquidity
rating.  Moody's also assigned a Ba3 rating to Station's $150
million add-on to its existing 6-7/8% senior subordinated notes
due 2016.  Proceeds from the add-on will be used to reduce
revolver borrowings.

The upgrade acknowledges that:

   * Station continues to benefit greatly from the rapidly growing
     Las Vegas area; and

   * that the company has been highly effective at using debt to
     further develop its:

     -- asset profile,
     -- market leadership position, and
     -- competitive advantage in the Las Vegas locals market.

For the 12-month period ended June 30, 2005, debt/EBITDA was about
3.6 times (x), the lowest reported leverage in the company's
recent history despite significant capital investment that more
than doubled the size of its asset base in terms of absolute
dollars.  At the same time, the company's EBIT and EBITDA-based
margins and returns have increased steadily.

The upgrade also considers that:

   * Station has an exceptional development track record;
   * relatively low borrowing costs; and
   * growing annual discretionary cash flow.

Additionally, the company's planned development projects have a
favorable risk/reward profile.  Temporary increases in leverage
are expected during peak development periods, and some near-term
negative impact to earnings is likely to result from construction
disruption.  However, planned development projects including the
Red Rock development and the Santa Fe, Fiesta Henderson and Green
Valley Ranch expansions are expected to have a significant
positive impact on the company's revenue and cash flow growth once
they are completed.

In addition to the favorable growth prospects of the Las Vegas
locals market, and strong earnings performance and outlook for
Station, the stable ratings outlook takes into account that the
Las Vegas locals market is subject to Senate Bill 208 that
effectively limits where new gaming properties can be built.
Worth noting is that Station owns a significant amount of gaming-
entitled land that gives it some control over the amount and
timing of future development in the area.  Limited legislative
risk in Nevada also supports the stable ratings outlook.

Ratings upside is limited at this point given that:

   * the company's planned development activities will likely keep
     debt/EBITDA at or above 4.0x, a level considered too high for
     investment grade status;

   * the likelihood that more expansion activity will be announced
     over the next several months; and

   * that almost all of Station's cash flow comes from a single
     gaming market, albeit a strong one.

Ratings could be negatively impacted by a change in Station's
willingness and/or ability to maintain its currently stated
financial policy of maintaining debt/EBITDA over the longer-term
at or near 4.0x.

Station's SGL-2 speculative grade liquidity rating indicates good
liquidity and is based on Moody's expectation that internally
generated cash flow combined with existing cash balances and
availability under the company's bank credit facility will be
sufficient to meet capital spending and debt service requirements
over the next twelve months.  Station's SGL-2 also acknowledges
that the company has a considerable amount of land held for
development that could be sold in the event the company wants or
needs to raise cash.

These ratings were raised:

   -- Corporate family rating, to Ba1 from Ba2;

   -- $450 million 6% senior notes due 2012, to Ba2 from Ba3;

   -- $450 million 6 1/2% senior subordinated notes due 2014,
      to Ba3 from B1; and

   -- $350 million 6 7/8% senior subordinated notes due 2016,
      to Ba3 from B1.

This new rating was assigned:

   -- $150 million 6 7/8% senior subordinated note add-on
      due 2016 -- Ba3.

This rating was affirmed:

   -- Speculative grade liquidity rating, at SGL-2.

Station Casinos, Inc. (NYSE: STN) owns and operates fourteen
hotel/casinos in the Las Vegas locals market including a 50%
interest in both Barley's Casino & Brewing Company and Green
Valley Ranch Station Casino and a 6.7% interest in the Palms
Casino Resort.  In addition, Station manages the Thunder Valley
Casino for the United Auburn Indian Community in California.  Net
revenue for the latest twelve month period ended June 30, 2005 was
slightly above $1 billion.


STRUCTURED ASSET: Fitch Lowers Ratings on Six Certificate Classes
-----------------------------------------------------------------
Fitch Ratings has affirmed 12 and downgraded 6 classes of
Structured Asset Securities Corp. residential mortgage-backed
certificates, as follows:

   Series 2002-HF2

     -- Classes A1, A3, A4, A5, A-IO affirmed at 'AAA';
     -- Class M1 affirmed at 'AA';
     -- Class M2 affirmed at 'A';
     -- Class M3 downgraded to 'BBB-' from 'BBB';
     -- Classes B1, B2 downgraded to 'BB' from 'BBB-'.

   Series 2003-BC2

     -- Classes A, A-IO affirmed at 'AAA';
     -- Class M1 affirmed at 'AA';
     -- Class M2 affirmed at 'A';
     -- Class M3 affirmed at 'BBB+';
     -- Class M4 downgraded to 'BBB' from 'BBB+';
     -- Class B1 downgraded to 'BB' from 'BBB-';
     -- Class B2 downgraded to 'B' from 'BB+'.

The affirmations reflect credit enhancement consistent with future
loss expectations and affect $190,578,215 of outstanding
certificates.  The pools are seasoned from a range of 28 to 33
months.  The pool factors (current principal balance as a
percentage of original) range from approximately 28% (series 2002-
HF2) to 32% (series 2003-BC2) outstanding.

The negative rating action on classes M3, B1, and B2 from series
2002-HF2 and classes M4, B1, and B2 from series 2003-BC2 relates
to concerns regarding the adequacy of credit enhancement with
declining collateral performance.  The downgrade affects
$49,438,000 of outstanding certificates.

SASCO 2002-HF2 remittance information indicates that as of July
25, 2005, excess spread has not been sufficient to cover losses
for the last three months, which have averaged $1,115,147 while
excess spread has averaged only $850,936.  Overcollateralization
is currently below target at $6,451,400.

The percentage of the mortgage pool which is more than 60 days
delinquent is 35.93%.  The mortgage pool consists primarily of
first lien subprime loans.  The borrowers in the mortgage pool
initially had a weighted average credit score of 599 and a
weighted average loan-to-value of 86.57%.  The mortgage loans
included in the mortgage pool were originated by correspondent
originators and acquired by Household Finance Corporation.  Select
Portfolio Servicing (Select; formerly known as Fairbanks Capital)
is currently the primary servicer.  Select is rated 'RPS2-' by
Fitch as a primary servicer.

SASCO 2003-BC2 remittance information indicates that as of July
25, 2005, excess spread has not been sufficient to cover losses
for the last 5 months.  Losses for the last 3 months have averaged
$953,618 while excess spread has averaged only $364,781.  OC is
currently below target at $4,914,299.

The percentage of the mortgage pool which is more than 60 days
delinquent is 30.01%.  The mortgage pool consists primarily of
subprime first and second lien loans.  Approximately 12% of the
pool was initially a second lien loan.  The borrowers in the pool
initially had a weighted-average credit score of 626 and weighted-
average loan-to-value of 87.59%.  The mortgage loans were
originated by Conseco Finance Corporation and are currently being
serviced by Select.

Further information regarding current delinquency, loss and credit
enhancement statistics is available on the Fitch Ratings web site
at http://www.fitchratings.com/


STRUCTURED ASSET: Monthly Losses Cue Fitch to Hold C Rating on B4
-----------------------------------------------------------------
Fitch Ratings has affirmed 7 and downgraded 1 class of Structured
Asset Securities Corp. residential mortgage-backed certificates:

   Series 2001-2

     -- Class A affirmed at 'AAA';
     -- Class B1 affirmed at 'AAA';
     -- Class B2 affirmed at 'AA';
     -- Class B3 downgraded to 'C' from 'B';
     -- Class B4 remains at 'C'.

   Series 2001-9

     -- Class A affirmed at 'AAA';
     -- Class B1 affirmed at 'AA';
     -- Class B2 affirmed at 'A';
     -- Class B3 affirmed at 'B';
     -- Class B4 remains at 'C'.

The affirmations reflect credit enhancement consistent with future
loss expectations and affect $62,374,950 of outstanding
certificates.  The pools are seasoned from a range of 48 to 53
months.  The pool factor (current principal balance as a
percentage of original) is approximately 4% outstanding for both
series.

The negative rating action taken on 2001-2 class B3, affecting
$4,232,978 of outstanding certificates, is the result of Fitch's
observation of continuing high monthly pool losses and delinquency
levels.  July 25, 2005 remittance information indicates that
13.53% of the pool is currently over 90 days delinquent and
cumulative losses are 0.99% of the original pool balance.  Class
B3 currently has 0.54% of credit support remaining (originally
1.50%).

The collateral consists of conventional, fixed-rate, fully
amortizing residential mortgage loans extended to prime/AltA
borrowers.

Further information regarding current delinquency, loss and credit
enhancement statistics is available on the Fitch Ratings web site
at http://www.fitchratings.com/


TITAN CRUISE: Laying Off 415 Workers Starting Oct. 16
-----------------------------------------------------
Titan Cruise Lines intends to lay off 415 of its employees as of
October 16, 2005, Larry Halstead at Tampa Bay Business Journal
reports.

Titan operates the Ocean Jewel gambling ship which is scheduled
for drydock on Oct. 15.  Dennis Shepard, the Company's Chief
Restructuring Officer, told Mr. Halstead that if the company fails
to complete the drydock inspection, the workers won't be coming
back.

The ship routinely operates in international waters and shuttles
passengers to and from the ship.  The shuttle docks in Johns Pass
in Pinellas County.

Titan plunged into chapter 11 as a result of shuttle breakdowns,
weather-related cancellations, low turnout and access issues.

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).  Gregory M. McCoskey, Esq., at Glenn Rasmussen &
Fogarty, P.A., represents the Debtors in their restructuring
efforts.  When the Debtors filed for protection from their
creditors, they estimated assets and debts between $10 million to
$50 million.


TOMMY HILFIGER: Moody's Reviews Ba1 Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service withdrew Tommy Hilfiger U.S.A. Inc.'s
("TH US") speculative grade liquidity rating of SGL-1, and
maintained the review for possible downgrade of its Ba1 long-term
debt rating. Moody's also placed the corporate family rating
(previously senior implied rating) of Ba1 on review for possible
downgrade.  The corporate family previously had a negative rating
outlook.

The liquidity rating is withdrawn as a result of the company's
continued delay in filing financial statements.  Tommy Hilfiger
Corporation, the debt issuer's parent and guarantor, has not filed
financial statements with the SEC since its fiscal first quarter
ended June 2004.  The company had previously anticipated that it
would publish financial statements (including audited statements
for the fiscal year ended March 2005) on August 10th, 2005.  The
company has published press releases with summary performance and
financial information.

Moody's does not believe this level of disclosure is sufficient to
maintain the liquidity rating, although published information
indicates that the company's liquidity remains adequate.  The
company reported balances of cash and short term securities of
$570 million as of June 30, 2005, versus $468 million in June of
2004.  Its next long-term debt maturity is in mid-2008.  Moody's
expects that a new SGL rating will be assigned following the
availability of audited financial statements and an evaluation of
prospective liquidity.

The Ba1 senior debt ratings were placed on review in November 2004
following TH US' disclosure of the investigation of its tax
payments and liabilities in the U.S. and Hong Kong, where its
parent company is headquartered.  At the time, Moody's was
concerned primarily about possible effective subordination of the
senior debt.  Since the ratings were placed on review, Tommy
Hilfiger Corp. has performed below Moody's expectations for the
March and June 2005 quarters, prompting the review of the
corporate family rating as well.

The company recently announced a resolution of its U.S. tax
investigations, and expects to conclude on the remaining actions
soon.  The company announced that it expects to record additional
provisions of $30 to $40 million on top of existing reserves of
about $15 million.  Moody's review will continue to focus on the
resolution of the company's tax position, including the levels of
cash outflow and future liabilities, as well as the operating
outlook for TH US and Tommy Hilfiger Corp.  The company's recent
performance levels are not consistent with its current ratings,
and an expectation of improved operating performance in the near
to medium term will be required for ratings to be maintained.

Tommy Hilfiger U.S.A., Inc., headquartered in New York City,
designs, sources, and markets:

   * men's and women's sportswear,
   * jeanswear, and
   * childrenswear under Tommy Hilfiger trademarks.

Through a range of licensing agreements, the company also offers a
broader array of:

   * related apparel,
   * accessories,
   * footwear,
   * fragrance, and
   * home furnishings.

The company is a wholly-owned subsidiary of Tommy Hilfiger
Corporation, headquartered in Kowloon, Hong Kong.


UAL CORP: Wants More Time to File Plan & Gets $3-Bil Loan Pledges
-----------------------------------------------------------------
UAL Corporation and its debtor-affiliates ask the Court to further
extend the period within which they may:

   (a) file a plan to Nov. 1, 2005; and
   (b) solicit acceptances of the plan to Jan. 2, 2006.

The Official Committee of Unsecured Creditors supports the
Debtors' request.

James H.M. Sprayregen, Esq., at Kirkland & Ellis, in Chicago,
Illinois, says the Debtors need the extension "to foster a
consensual exit process with the Committee."

According to Mr. Sprayregen, an additional 60 days of exclusivity
will facilitate a collaborative and inclusive process.  The extra
time will allow for a disciplined schedule, so the Debtors can
emerge from bankruptcy as soon as possible.

Mr. Sprayregen assures the Court that the Debtors have made
progress on many fronts.  Specifically, the Debtors have:

   -- completed their business plan;

   -- reached agreements with the Aircraft Trustees and have
      secured the status of several aircraft through the 1997-A
      EETC transactions; and

   -- achieved considerable savings through labor costs.

The Debtors anticipate filing a Plan and Disclosure Statement in
early September 2005.

                         The AFA Objects

The Association of Flight Attendants-CWA, AFL-CIO, argues that the
Debtors have failed to meet the burden of establishing cause for
the extension of exclusivity for the 33rd and 34th months of the
Chapter 11 proceedings.

Robert S. Clayman, Esq., at Guerrieri, Edmond, Clayman & Bartos,
in Washington, D.C., points out that the Debtors have already
achieved the goals set out in the previous requests for extensions
of exclusivity.  Therefore, the Debtors cannot tell the Court that
exclusivity will provide the stable negotiating environment they
need to make progress.

Mr. Clayman argues that the Debtors' timetable does not make
sense.  If the Debtors file a Plan and Disclosure Statement in
early September, there is no cause for extending exclusivity until
late October.  The Debtors may argue that more time is needed to
secure exit financing.  However, ending exclusivity will not
impair the Debtors' negotiations with its lenders, says Mr.
Clayman.

               Obtains $3 Billion Exit Financing

Mr. Sprayregen tells Judge Wedoff that the Debtors have
demonstrated substantial progress in the Chapter 11 cases.  The
Debtors met two of the last major prerequisites to obtaining exit
financing:

    a) reaching a global settlement to restructure aircraft
       agreements with the Aircraft Trustees; and

    b) completing a business plan.

The Associated Press and Bloomberg News have reported that United
has received competing proposals from Citibank, JPMorgan Chase &
Co., Deutsche Bank and GE Commercial Finance, to provide up to
$3 billion in exit financing.

Mr. Sprayregen points out that the Debtors have showed -- and the
Creditors' Committee has agreed -- that 60 additional days of
exclusivity is in the best interest of the estates and creditors.
The additional flexibility will allow creditors to provide input
on the Plan.  It also ensures greater assurance of a smoother and
quicker exit process after the Plan is filed.  Moreover, there is
no evidence of another party waiting in the wings to file its own
plan.

Mr. Sprayregen concedes that if exclusivity is terminated, the
Debtors could file a Plan immediately.  But this would eliminate
continued dialogue with stakeholders and impair the logical,
constructive process for the Plan.  The AFA's Objection does not
refute the Debtors' request and should be overruled, Mr.
Sprayregen asserts.

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.


USG CORP: Court OKs $2M+ Sale of U.S. Gypsum's Natural Gas Assets
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave USG
Corporation and its debtor-affiliates' permission to sell United
States Gypsum Company's natural gas assets in Western
Pennsylvania, which consist of:

   -- leases for around 75 natural gas wells;
   -- the associated pipelines; and
   -- various related mineral and other rights and assets

for not less than $2 million.

As reported in the Troubled Company Reporter on July 29, 2005, the
Debtors will serve a notice of the proposed sale to the
United States Trustee, the counsel to each of the Committees. and
the counsel to the Futures Representative.  The Sale Notice will
include:

   1. the identity of the purchaser or purchasers;
   2. the major economic terms of the proposed sale; and
   3. a copy of the proposed sale contract or contracts.

The Notice Parties will have 10 days to lodge an objection.

If no Party timely objects, the Debtors will be authorized to
consummate the sale or sales without further Court order.

If an objection to a sale is received, the sale may not proceed
absent written withdrawal of the objection or entry of a Court
order specifically approving the sale.

Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes.  The Company filed
for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No.
01-02094).  David G. Heiman, Esq., and Paul E. Harner, Esq., at
Jones Day represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts.  (USG
Bankruptcy News, Issue No. 94; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


USG CORP: U.S. Gypsum Plans to Build $180 Million Wallboard Plant
-----------------------------------------------------------------
United States Gypsum Company, a subsidiary of USG Corporation
(NYSE: USG), disclosed plans to build a new SHEETROCK(R) Brand
Gypsum Panel manufacturing plant in Washingtonville, Pennsylvania.

The state-of-the-art facility, valued at approximately
$180 million, will enable the company to maintain its position as
the market leader by keeping pace with its customers' growing
demand for wallboard products in the Northeast U.S.

Located in North Central Pennsylvania near Danville, the new plant
is designed to operate the world's largest wallboard manufacturing
line, with the capacity to produce approximately one billion
square feet of SHEETROCK Brand wallboard annually.  The facility
will be built on a 186-acre site, and initially employ about 150
people.  Construction of the new plant is scheduled to begin in
2006, with completion set for the first half of 2008.

USG Chairman, President and CEO William C. Foote said, "This new
plant represents another element of our strategic plan to grow
with our customers and deliver superior products and services to
them when and where they are needed.  Many of our key customers in
the region are experiencing consistently high rates of growth
related to the robust housing and construction markets, and the
Washingtonville plant will help serve that growth in the years
ahead."

Strong growth in the region was cited by Foote as the key factor
in the company's decision to locate in Washingtonville.  U.S.
Gypsum also chose this site to leverage the availability of
recaptured, or synthetic, gypsum -- a byproduct of flue gas
desulfurization, the process that removes sulfur dioxide from the
emissions generated by PPL Corporation's adjacent Montour power
plant.  This material would have otherwise been sent to a mine
reclamation facility or landfilled.  The Washingtonville location
also offers convenient highway and rail loading access.

"Adding low-cost capacity in one of our highest-growth markets is
a vital part of our company's long-term vision," said Foote.  U.S.
Gypsum Company currently operates more than 40 manufacturing
plants in North America.

Since 1996, U.S. Gypsum has implemented several strategic growth
initiatives, including new state-of-the-art wallboard plants in
Aliquippa, Pennsylvania; Bridgeport, Alabama; Rainier, Oregon; and
Monterrey, Mexico.  In addition, the company rebuilt wallboard
manufacturing lines at its plants in East Chicago, Indiana, and
Plaster City, California, and currently is rebuilding its
manufacturing plant in Norfolk, Virginia.

The new facility will be an outstanding example of environmental
responsibility.  It will produce wallboard using recaptured
gypsum, use 100 percent recycled paper for the surfaces of the
finished wallboard products, recycle 100 percent of its production
waste and feature a closed-loop liquid effluent system, which
translates to zero discharge into nearby waterways.

United States Gypsum Company is a subsidiary of USG Corporation, a
Fortune 500 company with business units that are market leaders in
their key product groups: gypsum wallboard, joint compound and
related gypsum products; cement board; gypsum fiber panels;
ceiling panels and grid; and building products distribution.

Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes.  The Company filed
for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No.
01-02094).  David G. Heiman, Esq., and Paul E. Harner, Esq., at
Jones Day represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts.  (USG
Bankruptcy News, Issue No. 93; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


VISKASE COS: S&P Revises CreditWatch Implications to Developing
---------------------------------------------------------------
Standard & Poor's Ratings Services revised the CreditWatch
implications on its ratings for Willowbrook, Illinois-based
casings producer Viskase Cos. Inc. to developing from positive
after the publication of second-quarter earnings results.

The 'B-' corporate credit rating and senior secured debt rating
were originally placed on CreditWatch on May 5, 2005, following
Viskase's announcement that its Board of Directors has engaged
Harris Williams Advisors to evaluate strategic alternatives, which
include debt and/or equity financings, the sale of the company,
and a rights offering.

The CreditWatch is expected to be resolved as soon as more
information becomes available.

"The CreditWatch revision reflects concern over slightly weaker
operating trends relative to expectations," said Standard & Poor's
credit analyst Robyn Shapiro.

While an acquisition of Viskase by a strategic buyer with a
stronger credit profile could result in an upgrade, an acquisition
by a financial buyer would likely be financed with a similarly
aggressive debt structure to that which is currently on the
balance sheet, thus leading to an affirmation of the ratings.  The
ratings could be lowered modestly if unfavorable operating trends
persist or if Viskase is unable to preserve its liquidity
position.

The ratings on Viskase reflect:

   * its vulnerable business risk profile as a global producer in
     the highly competitive casings niche within the packaging
     industry;

   * a narrow scope of operations; and

   * a highly leveraged financial risk profile, following the
     company's emergence from Chapter 11 bankruptcy protection in
     April 2003.

Partially offsetting factors include:

   * steady end markets;
   * diversified customer relationships; and
   * consistency in raw-material costs.

Viskase remains aggressively leveraged with total debt (adjusted
to include capitalized operating leases) to EBITDA of about 5x.

Although somewhat reduced from prior levels, liquidity is
reasonable.  Liquidity is supported by a cash balance of about $22
million at June 30, 2005, and availability under the company's $20
million revolving credit facility maturing June 2009.


VISUALGOLD.COM INC: Involuntary Chapter 11 Case Summary
-------------------------------------------------------
Alleged Debtor: VISUALGOLD.COM, Inc.
                1011 First Street South, Suite 370
                Hopkins, Minnesota 55343

Involuntary Petition Date: August 24, 2005

Case Number: 05-35840

Chapter: 11

Court: District of Minnesota (St. Paul)

Judge: Dennis D. O'Brien

Petitioners' Counsel: Charles A. Bassford, Esq.
                      Charles A. Bassford Law Office, P.A.
                      Southdale Place, Suite 325
                      1400 West 66th Street
                      Edina, MN 55435

                           -- and --

                      David B. Olsen, Esq.
                      William L. Kampf, Esq.
                      Henson & Efron, P.A.
                      220 South Sixth Street, Suite 1800
                      Minneapolis, MN 55402

                           -- and --

                      Douglas A. Heddin, Esq.
                      Heddin & Glidden, P.A.
                      298 Tallmadge Building
                      1219 Marquette Avenue South
                      Minneapolis, MN 55402

   Petitioners                                 Amount of Claim
   -----------                                 ---------------
   Steven B. Foust                                    $607,622
   4177 Shoreline Drive, Apartment 210
   Spring Park, MN 55384-9600

   Ken Richards                                       $286,408
   8090 Eden Road, #333
   Eden Prairie, MN 55344

   Corporate Capital Management, LLC                  $205,707
   10125 Crosstown Circle, Suite 210
   Eden Prairie, MN 55344
   Attn: Dan Ryweek


WATTSHEALTH FOUNDATION: Committee Wants Danning Gill as Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of WATTSHealth
Foundation, Inc., asks the U.S. Bankruptcy Court for the Central
District of California -- a second time -- for permission to
employ Danning, Gill, Diamond & Kollitz, LLP, as its counsel.

As reported in the Troubled Company Reporter on Aug. 10, 2005, the
Honorable Judge Thomas B. Donovan denied the Committee's original
application because it didn't contain adequate compensation
disclosures as required by Rule 2014 of the Federal Rules of
Bankruptcy Procedure.

Danning Gill is expected to:

   1) assist the Committee in consulting with the Debtor
      concerning the administration of the Debtor's chapter 11
      case;

   2) assist the Committee in its investigation of the acts,
      conduct, assets, liabilities and financial condition of the
      Debtors, the operations of the Debtor and the desirability
      of continuing its operations, and any other matters relevant
      to the Debtor's bankruptcy case or the formulation of a
      chapter 11 plan;

   3) participate in the formulation of a plan of reorganization
      and advise those creditors represented by the Committee of
      its determination in formulating that plan;

   4) assist the Committee in requesting the appointment of
      chapter 11 Trustee or Examiner if warranted under Section
      1104 of the Bankruptcy Code; and

   5) perform other legal services to the Committee that are
      necessary in the Debtor's chapter 11 case.

Richard K. Diamond, Esq., a Principal of Danning Gill, is the lead
attorney for the Committee.  Mr. Diamond charges $535 per hour for
his professional services.

Mr. Diamond reports Danning Gill's professionals bill:

      Professional            Designation    Hourly Rate
      ------------            -----------    -----------
      David A. Gill           Partner           $575
      Howard Kollitz          Partner           $535
      John J. Bingham, Jr.    Partner           $480
      Eric P. Israel          Partner           $445
      Kathy B. Phelps         Partner           $440
      George E. Schulman      Partner           $535
      Richard D. Burstein     Partner           $535
      Robert A. Hessling      Partner           $445
      Walter K. Oetzell       Partner           $445
      Nancy Knupfer           Partner           $410
      Curtis B. Danning       Counsel           $575
      James J. Joseph         Counsel           $535
      Mitchell I. Cohen       Associate         $390
      Elan S. Levey           Associate         $330
      Uzzi O. Raanan          Associate         $370
      Steven J. Schwartz      Associate         $300
      Kim Tung                Associate         $280
      Matthew F. Kennedy      Associate         $260
      Fank X. Ruggier         Associate         $260
      John N. Tedford, IV     Associate         $250
      Aaron E. de Leest       Associate         $225
      Alain M. R'bibo         Associate         $195
      Diana Kealer            Paralegal         $175
      Valerie G. Radocay      Paralegal         $175
      Maggie Loates           Paralegal         $175
      Cheryl A. Blair         Paralegal         $175
      Shawn P. Launier        Paralegal         $175
      Aracellie Panta         Paralegal         $175
      Greg M. Suchniak        Paralegal         $165
      Juanita Treshinsky      Paralegal         $165

The Committee discloses that the Debtor has filed a Motion for
Order Establishing Procedures for Interim Compensation and
Reimbursement of Professionals Employed at the Expenses of the
Bankruptcy Estate.  Should the Fee Motion be granted, the Debtor
will pay the Firm on an interim basis subject to subsequent court
order:

    (a) 80% of its interim fees on a monthly basis; and
    (b) 100% of its expenses on a monthly basis.

Danning Gill assures the Court that it does not represent any
interest materially adverse to the Committee, the Debtor or its
estate.

Headquartered in Inglewood, California, WATTSHealth Foundation,
Inc., dba UHP Healthcare, provides comprehensive medical and
dental services for Commercial, Medi-Cal and Medicare members in
the Greater Southern California area.  The Company filed for
chapter 11 protection on May 31, 2005 (Bankr. C.D. Calif. Case No.
05-22627). Gary E. Klausner, Esq., at Stutman Treister & Glatt
represents the Debtor in its restructuring efforts.  When the
Debtor filed for protection from its creditors, it estimated
assets and debts of $50 million to $100 million.


WATTSHEALTH FOUNDATION: Panel wants FTI as Financial Advisor
------------------------------------------------------------
The Official Committee of Unsecured Creditors of WATTSHealth
Foundation, Inc., asks the U.S. Bankruptcy Court for the Central
District of California -- a second time -- for permission to
employ FTI Consulting, Inc., as its financial advisors.

As reported in the Troubled Company Reporter on Aug. 10, 2005,
the Honorable Judge Thomas B. Donovan denied the Committee's
original application because it didn't comply with Rule 2014 of
the Federal Rules of Bankruptcy Procedure.

FTI Consulting will:

   1) analyze the Debtor's short-term cash receipts and
      disbursements, financial and operational reports and other
      professional data, and the claims reporting process

   2) assist the Committee with the resolution of the Debtor's
      pre-petition and post-petition claims and in assessing the
      prospects of the Debtor's reorganization;

   3) prepare regular reports for the Committee and participate in
      its meetings;

   4) assist and advise the Committee with respect to the
      identification of the Debtor's core business assets,
      disposition of part or all of its assets, and liquidation of
      unprofitable operations;

   5) attend meetings with the Debtor's management, professionals
      and other agents; and

   6) perform all other financial advisory services to the
      Committee or its counsel that is appropriate and necessary
      in the Debtor's chapter 11 case.

Ronald F. Greenspan, a Senior Managing Director of FTI Consulting,
and Matthew Pakkala, a Managing Director at the Firm, are the lead
professionals performing services to the Committee.  Mr. Greenspan
charges $580 per hour for his services, while Mr. Pakkala charges
$540 per hour.

Mr. Greenspan reports FTI Consulting's professionals bill:

      Designation                      Hourly Rate
      -----------                      -----------
      Senior Managing Directors        $560 - $625
      Directors & Managing Directors   $395 - $560
      Associates & Consultants         $195 - $385
      Administration &                  $95 - $180
      Paraprofessionals

The Committee discloses that Mr. Greenspan and Mr. Pakkala have
agreed to be billed at $475 per hour.  Messrs. Greenspan and
Pakkala retains the right to seek the hourly rate differentials,
upon support of the Committee and Court approval, at the
conclusion of the case.

FTI Consulting assures the Court that it does not represent any
interest materially adverse to the Committee, the Debtor or its
estate.

Headquartered in Inglewood, California, WATTSHealth Foundation,
Inc., dba UHP Healthcare, provides comprehensive medical and
dental services for Commercial, Medi-Cal and Medicare members in
the Greater Southern California area.  The Company filed for
chapter 11 protection on May 31, 2005 (Bankr. C.D. Calif. Case No.
05-22627). Gary E. Klausner, Esq., at Stutman Treister & Glatt
represents the Debtor in its restructuring efforts.  When the
Debtor filed for protection from its creditors, it estimated
assets and debts of $50 million to $100 million.


WINN-DIXIE: Objects to Wah Hong Go's Request to Lift Stay
---------------------------------------------------------
As previously reported in the Troubled Company Reporter on
July 5, 2005, Wah Hong Go, a former store manager of Winn-Dixie
Stores, Inc., asks the U.S. Bankruptcy Court for the Middle
District of Florida to lift the automatic stay to permit him to
file, serve and litigate a lawsuit against the Debtor.

Mr. Go intends to file his lawsuit before a federal or state
court of competent jurisdiction in Miami-Dade County, Florida,
where the unlawful conduct of the Debtors took place and where
the witnesses and evidence reside.  Mr. Go also seeks leave to
file a proof of claim upon the conclusion of litigation following
the entry of judgment.

                         Debtors Respond

Wah Hong Go assumes incorrectly that, to preserve his right to
sue, he needs stay relief so he may file a lawsuit in Federal
Court, to file a case retroactive to June 8, 2005, and to
prosecute that lawsuit through judgment," James H. Post, Esq., at
Smith Hulsey & Busey, in Jacksonville, Florida, asserts.

According to Mr. Post, Mr. Go's belief that his right to sue will
be lost absent retroactive stay relief is misguided because
Section 108(c) of the Bankruptcy Code protects his right to file
the litigation for 30 days after the automatic stay terminates
with respect to his claim.  Thus, Mr. Go will suffer no prejudice
if his request is denied.

The Debtors will suffer substantial prejudice if Mr. Go's claim
is allowed to go forward.  Specifically, the Debtors have no
applicable insurance for employment-related claims like Mr. Go's.
The cost of defending Mr. Go's claim will drain the Debtors
estates of resources to the detriment of other creditors.

More importantly, Mr. Post asserts that lifting the automatic
stay will be prejudicial to the Debtors because it would impede
their ability to implement a comprehensive plan for the
resolution of Litigation Claims.  The Debtors believe that it
would be time-consuming, unduly burdensome and expensive to
defend against and liquidate Litigation Claims in forums other
than the Court.  The Debtors should be afforded a breathing spell
from creditor claims to implement procedures for the resolution
of the Litigation Claims.  If the Court lifts the automatic stay
with respect to Mr. Go's claim, then large numbers of other
claimants will likely seek similar relief, which would interfere
with the Debtors current reorganization efforts.

Furthermore, Mr. Post notes that there has been no demonstration
by Mr. Go of any real injury, which would result if the stay were
not lifted.

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


WINN-DIXIE: Court Approves Store Closing Sales to Five Purchasers
-----------------------------------------------------------------
As previously reported in the Troubled Company Reporter on
Aug. 2, 2005, Winn-Dixie Stores, Inc., and its debtor-affiliates
sought and obtained authority from the U.S. Bankruptcy Court for
the Middle District of Florida to employ Hilco Merchandise
Resources, LLC, and Gordon Brothers Retail Partners, LLC, to
assist them in liquidating merchandise at the closing stores.

The Court also authorizes the Debtors to cease retail operations
at the Stores and take related actions.  The Debtors are further
authorized to sell the furniture, fixtures, and equipment at the
stores through the Liquidating Agent.

                        More APAs Approved

The Court approves the Asset Purchase Agreement with respect to
these stores:

               Purchaser                  Store No.
               ---------                  ---------
               Bi-Lo, LLC                   1004
                                            1010
                                            1234
                                            1242
                                            1248
                                            1938
                                            1942
                                            1944
                                            2004
                                            2051
                                            2150
                                            2151
                                            2156
                                            2160

               Southern Family Markets
                  Acquisition               0524
                                            0576
                                            1906
                                            1913
                                            1915
                                            0911
                                            2073

               Wal-Mart                     0739

               Alex Lee, Inc.               0805

               Supervalu                    1303
                                            1317
                                            1323
                                            1328
                                            1349
                                            1806
                                            2623
                                            2710
                                            2720
                                            2727
                                            2730
                                            2733
                                            2740
                                            2743

                 Termination Agreements Approved

In connection with the sale of their grocery stores, the Debtors
sought to terminate leases relating to the stores.  Landlords
have submitted bids at the Auction for the termination of the
Leases.  At the Debtors' behest, the Court approves the Debtors'
Termination Agreements with:

   Landlord                               Store No.   Bid Amount
   --------                               ---------   ----------
   Naples South Realty Associates, LLC       0731       $200,000
   American Commercial Realty Corp.          0216        150,000
   Southchase Investors, LLC                 2282        580,000

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


WORLDCOM INC: Court Sentences Scott Sullivan to 5 Years in Prison
-----------------------------------------------------------------
U.S. District Judge Barbara Jones of the Southern District of New
York sentenced former WorldCom, Inc., Chief Financial Officer
Scott Sullivan to five years in jail, for his participation in the
$11 billion fraud that led to WorldCom's bankruptcy, Bloomberg
News reports.

Mr. Sullivan's reduced sentence, handed down on August 11, 2005,
includes three years probation.  According to Bloomberg, it was a
reward for cooperating with the government and testifying against
Bernard Ebbers.  Mr. Sullivan was a key witness in the fraud case
against Mr. Ebbers, WorldCom's former chief executive officer.
Last month, Judge Jones sentenced Mr. Ebbers to 25 years in
prison.

Judge Jones also sentenced former WorldCom accounting director
Buford Yates and former WorldCom Controller David Myers to a year
and a day in prison.

                       Oklahoma Case Dropped

In a separate report, Larry Levy and David Glovin of Bloomberg
relate that Oklahoma Attorney General Drew Edmondson dropped the
fraud charges against former WorldCom officers Scott Sullivan,
David Myers, Buford Yates, Betty L. Vinson and Troy M. Normand.

The Attorney General previously charged the former WorldCom
officers with securities fraud in an Oklahoma state court.  Mr.
Edmonson says that Judge Jones' sentence against the WorldCom
officers is sufficient punishment.

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


* Stephen Borman Joins Alvarez & Marsal Tax Advisory Services
-------------------------------------------------------------
Alvarez & Marsal Tax Advisory Services, LLC, an affiliate of
leading global professional services firm Alvarez & Marsal,
announced that Stephen Borman has joined as a senior director
based in Charlotte.

With more than 12 years of public accounting experience, Mr.
Borman advises clients on federal taxation matters, including tax
accounting issues and business restructurings.  Mr. Borman also
assists clients with tax planning, tax compliance and examination
assistance.

"Steve brings a wealth of experience handling a variety of
important tax matters on behalf of clients and is an outstanding
addition to our growing team," said James Eberle, a Charlotte-
based managing director with Alvarez & Marsal Tax Advisory
Services, LLC.

Prior to joining A&M Tax Advisory Service, Mr. Borman was a Senior
Manager with KPMG.  Mr. Borman earned a master's degree in
taxation from the University of Tulsa and a bachelor's degree in
accounting from Oral Roberts University.

A&M Tax Advisory professionals advise clients on federal,
international, and state and local tax matters, including tax
aspects of mergers, acquisitions and dispositions, research
credits and incentives, tax risk management, and tax
controversies.  Since launching in 2004, A&M Tax Advisory Services
has grown to more than 80 professionals based in New York,
Atlanta, Miami, San Francisco, Seattle, Charlotte, Houston and
Washington, DC.  The growth has been largely in response to
continued restrictions faced by tax professionals in the Big Four
audit firms, which have caused many experienced tax professionals
to seek other opportunities.

       About Alvarez & Marsal Tax Advisory Services, LLC

Alvarez & Marsal Tax Advisory Services, LLC, an affiliate of
Alvarez & Marsal -- http://www.alvarezandmarsal.com-- a leading
global professional services firm, is an independent tax group
comprised of experienced tax professionals dedicated to providing
customized tax advice to clients in a broad range of industries.
Its professionals extend Alvarez & Marsal's commitment to offering
clients a choice in tax advisors free from audit-based conflicts.
It serves clients with knowledge, experience and a commitment to
excellence in client service.  Alvarez & Marsal Tax Advisory
Services, LLC, is a founding member of the Taxand global alliance
which is comprised of independent tax firms in countries around
the world that provide our multinational clients with
international tax advice.


* BOOK REVIEW: Charles F. Kettering: A Biography
------------------------------------------------
Athor:      Thomas Alvin Boyd
Publisher:  Beard Books
Softcover:  280 Pages
List Price: $34.95

Order your personal copy at
http://www.amazon.com/exec/obidos/ASIN/1587981335/internetbankrupt

Charles Kettering was born on a farm in northern Ohio in 1876.  He
once said, "I am enthusiastic about being an American because I
came from the hills in Ohio.  I was a hillbilly.  I didn't know at
that time that I was an underprivileged person because I had to
drive the cows through the frosty grass and stand in a nice warm
spot where a cow had lain to warm my (bare) feet.  I thought that
was wonderful.  I walked three miles to the high school in a
little village and I thought that was wonderful, too.  I thought
of all that as opportunity.  I didn't know you had to have money.
I didn't know you had to have all these luxuries that we want
everybody to have today."

Charles Kettering is the embodiment of the American success story.
He was a farmer, schoolteacher, mechanic, engineer, scientist,
inventor and social philosopher.  He faced adversity in the form
of poor eyesight that plagued him all his life.  He was forced to
drop out of college twice due to his vision before completing his
electrical engineering degree.

Kettering went on to become a leading researcher for the U.S.
automotive industry.  His company, Dayton Engineering
Laboratories, Delco, was eventually sold to General Motors and
became the foundation for the General Motors Research Corporation
of which Kettering became vice president in 1920.  He is best
remembered for his invention of the all-electric starting,
ignition and lighting system for automobiles, which replaced the
crank.  It first appeared as standard equipment on the 1912
Cadillac.

Kettering held more than 300 patents ranging from a portable
lighting system, Freon, and a World War I "aerial torpedo," to a
device for the treatment of venereal disease and an incubator for
premature infants. He conceived the ideas of Duco paint and ethyl
gasoline, pursued the development of diesel engines and solar
energy, and was a pioneer in the application of magnetism to
medical diagnostic techniques.

This book shows the wisdom and common sense of Kettering's
approach to engineering and life.  It received favorable reviews
when was first published in 1957.  The New York Times called it an
"old-fashioned narrative biography, written in clean, straight-
line prose-no nuances, no overtones, .but with enough of
Kettering's philosophy and aphorisms, his tang and humor, to
convey his personality."  The New York Herald Tribune Book Review
said, "(t)his lively book is particularly successful in its
reflection of Kettering's restless, searching mind and tough
persistence."

Kettering once showed a passing tramp the "fun" of digging holes
properly and gave him a job.  The man, then promoted to foreman,
later told Kettering, "(i)f only years ago someone had taught me
how much fun it is to work, when a fellow tries to do good work, I
would never have become the bum I was."  Kettering once advised,
".whenever a new idea is laid on the table it is pushed at once
into the wastebasket. (i)f your idea is right, get to that
wastebasket before the janitor.  Dig your idea out and lay it back
on the table. Do that again and again and again.  And after you
have persisted for three or four years, people will say 'Why, it
does begin to look as through there is something to that after
all.'"

Charles Kettering died on November 24, 1958.

Thomas Alvin Boyd was a chemical engineer and a member of Charles
Kettering's research staff for more than 30 years.

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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.

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