TCR_Public/050830.mbx       T R O U B L E D   C O M P A N Y   R E P O R T E R

         Tuesday, August 30, 2005, Vol. 9, No. 205

                          Headlines

265 BELLEFONTAINE: Case Summary & 6 Largest Unsecured Creditors
ACTION REAL: Case Summary & 2 Largest Unsecured Creditors
ADVANCED ENERGY: Will Redeem 5% Convertible Sub. Debt on Sept. 28
ALLIED HOLDINGS: Banc of America Wants to Exercise Lease Rights
ALLIED HOLDINGS: DaimlerChrysler Demands Lease Decision

ALOHA AIRGROUP: Court Approves Redelivery Pact With GE Entities
AMERIDEBT INC: Court Approves Chapter 11 Trustee's Lease Renewal
ANCHOR GLASS: Bank of New York Wants DIP Hearing Moved to Sept. 8
ANCHOR GLASS: Hires Houlihan Lokey as Financial Advisor
ANCHOR GLASS: Wants to Assume Sales Contract with OCI Chemicals

ASARCO LLC: Wants to Enter Into Bank One Credit Card Pact
ASARCO LLC: Wants Approval of Reclamation Claim Procedures
ASARCO LLC: Utilities Want Court Order Vacated
ATA AIRLINES: Motion to Reject Pilot's Union Agreement Draws Fire
ATKINS NUTRITIONALS: Files Plan & Disclosure Statement in New York

ATKINS NUTRITIONALS: Gets Final Court Nod on DIP Financing Access
AXEDA SYSTEMS: Posts $1.5 Million Net Loss in Second Quarter
BELDEN & BLAKE: Buying Back 8.75% Senior Secured Notes for Cash
BIG 5: Nasdaq Extends Financial Filing Deadline Until Tomorrow
BUFFALO MOLDED: Files Liquidating Plan & Disclosure Statement

CAPITAL BEVERAGE: June 30 Balance Sheet Upside-Down by $4.8 Mil.
CATHOLIC CHURCH: Court Rules Parish Property Belongs to Spokane
CATHOLIC CHURCH: Tucson Wants Four Tort Claim Settlements Approved
CERVANTES ORCHARDS: Section 341(a) Meeting Slated for Oct. 6
CITICORP MORTGAGE: Fitch Puts Low-B Rating on Two Cert. Classes

CLAREMONT TECHNOLOGIES: Consents to Ch. 11 Petition & Files Plan
CLEVELAND COLD: Voluntary Chapter 11 Case Summary
CRYOCOR INC: June 30 Balance Sheet Upside-Down by $39 Million
DELPHI CORP: Reiterates Demands in Light of New Bankruptcy Laws
DIVERSIFIED CORPORATE: Equity Deficit Widens to $3.72M at June 30

DIVERSIFIED CORPORATE: Negotiating Sale of Traveling Nurse Unit
DJ ORTHOPEDICS: Credit Amendments Cue Moody's to Withdraw Ratings
DOCTORS HOSPITAL: Hires Wellspring Valuation to Perform Appraisals
E.SPIRE COMMS: DIP Financing Pact Extended to Sept. 30
EAST TEXAS MEDICAL: Moody's Affirms Ba2 Rating on $220-Mil Bonds

EASTMAN KODAK: Cuts More Jobs, Pares Film Manufacturing Operations
ENCYCLE/TEXAS: Case Summary & 22 Largest Unsecured Creditors
ENRON CORP: Court Approves JEDI II & CalPERS Settlement Pact
ENRON CORP: AEGON, et al., Agree to Withdraw Amended Claims
EXCALIBUR IND: Balance Sheet Upside-Down by $14.1 Mil. at June 30

FIRST FRANKLIN: Fitch Puts BB+ Rating on $3MM Private Certificates
H&E EQUIPMENT: To Restate 2002 and 2003 Financial Statements
HUNTSMAN INT'L: Moody's Rates $1.56 Billion Sr. Sec. Debts at Ba3
INFOUSA INC: Gupta Bid Rejection Cues Moody's to Hold Ratings
INTERSTATE BAKERIES: PI Claimant Wants Stay Lifted to Pursue Claim

INTERSTATE BAKERIES: Wants to Ink Long-Term Extension of CBAs
INTERSTATE BAKERIES: Names Richard Seban as Chief Mktg. Officer
ISTAR FINANCIAL: CEO Adopts New Rule 10b5-1 Stock Trading Plan
J.P. MORGAN: Moody's Places Low-B Ratings on Nine Cert. Classes
JOHN Q. HAMMONS: JQH Finance to Buy 8-7/8% First Mortgage Notes

KAISER ALUMINUM: Wants Underwriters Settlement Pact Approved
KEY3MEDIA GROUP: Has Until Sept. 30 to Object to Claims
KMART CORP: Court Nixes McHugh's Move to Reopen Discharge Trial
KPMG LLP: Paying $456 Million Over Fraudulent Tax Shelters
MARIE COLLARO: Case Summary & 3 Largest Unsecured Creditors

MARKWEST ENERGY: Taps Ehrhardt Keefe to Provide Internal Audit
MCI INC: Inks $1.3 Mil. Three-Year Service Pact with AMF Bowling
MERIDIAN AUTOMOTIVE: Court Approves De Minimis Asset Sale Protocol
MOLECULAR DIAGNOSTICS: June 30 Balance Sheet Upside-Down by $13MM
NATIONAL ENERGY: Court Clarifies Plan Distribution Definition

NEW ENGLAND COLLEGE: Moody's Revises Ratings Outlook to Positive
NORTHWEST AIRLINES: AMFA Strike Doesn't Have Large Scale Support
PACIFIC GAS: Asks Court to Enforce Confirmation Order on 3 Suits
PANOLAM INDUSTRIES: Moody's Junks Proposed $150M Sr. Sub. Notes
PROLOGIC MANAGEMENT: Equity Deficit Tops $2 Million at June 30

PROVIDENT PACIFIC: MKA Can Foreclose on Timber Ridge Townhomes
PROXIM CORP: Wants Until December 31 to Decide on Unexpired Leases
PROXIM CORP: Committee Prepares to Challenge Warburg Pincus Claims
PROXIM CORP: Secures Interim Okay to Use $573,500 Cash Collateral
QUEBECOR WORLD: Moody's Downgrades Senior Unsec. Rating to Ba2

QUEBECOR WORLD: Has Weak Liquidity, Moody's Says
RELIANCE GROUP: Committee Wants Court to OK Solicitation Protocol
RHODE ISLAND: New Gas Plant Cues Fitch to Raise Single-B Rating
RISK MANAGEMENT: Wants Lease Decision Period Stretched to Nov. 4
S-TRAN: Court Okays DIP Loan & Cash Collateral Use Extension

SAINT VINCENTS: Committee Wants Thelen Reid as Counsel
SAINT VINCENTS: Wants to Make $200,000 Due Diligence Payment
SALOMON BROTHERS: Poor Performance Prompts Fitch to Junk Ratings
SCARLET OAKS: Voluntary Chapter 11 Case Summary
SEAN HORNBECK: Case Summary & 20 Largest Unsecured Creditors

SOUTHWEST FLORIDA: Case Summary & 20 Largest Unsecured Creditors
SPECIAL METALS: Precision Castparts Acquiring Assets for $303MM
TECNET INC: Trustee Wants Bar Date for Newly Discovered Creditors
TENET HEALTHCARE: Default Notice Prompts Fitch's Negative Watch
TEREVE HOLDINGS: Bowring Retail Chain Seeks CCAA Protection

TERMOEMCALI FUNDING: Soliciting Consents on Chapter 11 Prepack
TITAN CRUISE: Section 341(a) Meeting Slated for Sept. 9
TOWER AUTOMOTIVE: Court Approves Seagull Software Licensing Pact
TOYS R US: Fitch Junks $2 Billion Domestic Unsecured Bridge Loan
TRANSCOM ENHANCED: Court Approves $400,000 Additional DIP Loan

TRANSMETA CORP: Audit Panel Taps Burr Pilger to Audit Financials
UAL CORP: Court Extends Exclusive Plan Filing Period Until Nov. 1
UAL CORP: Four Banks Submit $3 Billion Exit Financing Proposals
UNISYS CORP: Decline in Profitability Spurs Moody's to Cut Ratings
VENCOR INT'L: Case Summary & 15 Largest Unsecured Creditors

WORLDCOM INC: Wants Court to Nix & Limit Parus Holding's Claims

* Large Companies with Insolvent Balance Sheets

                          *********

265 BELLEFONTAINE: Case Summary & 6 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: 265 Bellefontaine LP
        P.O. Box 570627
        Tarzana, California 91356

Bankruptcy Case No.: 05-15910

Chapter 11 Petition Date: August 25, 2005

Court: Central District of California (San Fernando Valley)

Judge: Maureen A. Tighe

Debtor's Counsel: Simon Aron, Esq.
                  Wolf, Rifkin & Shapiro, LLP
                  11400 West Olympic Boulevard, 9th Floor
                  Los Angeles, California 90064
                  Tel: (310) 478-4100

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 6 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Brad Kaye                     Member                    $568,000
265 Bellefontaine Street
Pasadena, CA 91105

Private Properties Group Inc.                            $70,000
David Zuckerman
P.O. Box 570627
Tarzana, CA 91357

Donikian Construction                                     $7,000
11288 Ventura Boulevard #203
Studio City, CA 91604

Carr Landscaping                                          $4,000
P.O. Box 8149
Porter Ranch, CA 91327

Pasadena Water & Power                                    $1,500
P.O. Box 7120
Pasadena, CA 91109

Mr. Poolman                                                 $800
336 East Front Street
Covina, CA 91723


ACTION REAL: Case Summary & 2 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Action Real Estate Inc.
        16300 Lindbergh Street
        Van Nuys, California 91406

Bankruptcy Case No.: 05-15917

Type of Business: The Debtor first filed for chapter 11
                  protection on Dec. 29, 2004 (Bankr. C.D.
                  Calif. Case No. 04-18163).  The Honorable
                  Kathleen T. Thompson dismissed that case
                  on Aug. 3, 2005.  Action Real's first
                  chapter 11 filing was reported in the
                  Troubled Company Reporter on Jan. 5, 2005.

Chapter 11 Petition Date: August 25, 2005

Court: Central District of California (San Fernando Valley)

Judge: Kathleen Thompson

Debtor's Counsel: M. Jonathan Hayes, Esq.
                  21800 Oxnard Street, Suite 840
                  Woodland Hills, California 91367
                  Tel: (818) 710-3656

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 2 Largest Unsecured Creditors:

   Entity                                      Claim Amount
   ------                                      ------------
   All Century Inc.                              $2,012,000
   15910 Ventura Boulevard, Suite 1505
   Encino, California 91436

   Los Angeles County Tax Collector                 $10,077
   P.O. Box 54018
   Los Angeles, California 90054-0018  


ADVANCED ENERGY: Will Redeem 5% Convertible Sub. Debt on Sept. 28
-----------------------------------------------------------------
Advanced Energy Industries, Inc. (Nasdaq: AEIS) will redeem all of
its outstanding 5% Convertible Subordinated Notes due Sept. 1,
2006.  The redemption date will be Sept. 28, 2005.  The Company
sent notice of redemption on its 5-1/4% Convertible Subordinated
Notes due 2006, on Aug. 17, 2005.

The notes shall be redeemed at a price of 101% of the principal
amount, together with accrued and unpaid interest to the
redemption date.  On the redemption date, the redemption price and
the interest, if any, will become due and payable upon each of the
notes. Interest shall cease to accrue on the notes from and after
the Redemption Date.  The notes may be converted into common stock
of the Company at any time prior to 5:00 p.m. on Sept. 27, 2005,
which is the close of business on the business day immediately
preceding the Redemption Date.  The rate at which the notes may be
converted into common stock is 33.5289 shares of common stock for
each $1,000 principal amount of the notes, or approximately $29.83
per share.  A notice of redemption containing information required
by the terms of the indenture governing the notes will be mailed
to the shareholders.  The address of the paying agent for purposes
of surrendering notes in connection with the redemption is:

           U.S. Bank National Association        
           West Side Flats Operations Center
           60 Livingston Ave.            
           St. Paul, MN 55107                   
           Attention: Specialized Finance       

Headquartered in Fort Collins, Colorado, Advanced Energy
Industries, Inc. -- http://www.advanced-energy.com/-- is a global  
leader in the development and support of technologies critical to
high-technology manufacturing processes used in the production of
semiconductors, flat panel displays, data storage products,
compact discs, digital video discs, architectural glass, and other
advanced product applications.  

                        *     *     *

                      Material Weaknesses

As reported in the Troubled Company Reporter on May 11, 2005,  
Advanced Energy identified two material weaknesses in its internal  
control over financial reporting as of Dec. 31, 2004, which are  
described in the Company's annual report:  

     (i) a lack of appropriate segregation of duties defined  
         within our enterprise resource planning system; and  

    (ii) the combination of a lack of information system  
         integration and uniformity regarding the Company's Japan  
         operations and a lack of sufficient human resources for  
         proper segregation of duties and oversight in Japan.

The Company received notification from the Listing Qualifications
Department of The Nasdaq Stock Market that the Company's common
stock will be listed for trading on Nasdaq under its ticker symbol
"AEIS" as of the open of business on July 14, 2005.


ALLIED HOLDINGS: Banc of America Wants to Exercise Lease Rights
---------------------------------------------------------------
Banc of America Leasing & Capital, LLC, asks the U.S. Bankruptcy
Court for the Northern District of Georgia to lift the automatic
stay to so it can take possession of all equipment and exercise
any and all of its contractual and state-law rights with respect
to the equipment held by Allied Systems Ltd. pursuant to a Master
Equipment Lease Agreement.    

Allied Systems Ltd. leased automobile transport equipment from
BancBoston Leasing, Inc., under a Master Equipment Lease Agreement
dated June 30, 1998.  Allied Holdings, Inc., executed an Equipment
Lease Guaranty in favor of BancBoston and agreed to be liable for
the payment and performance of all of the Debtors' obligations
under the Master Lease.

James S. Rankin, Jr., Esq., at Parker, Hudson, Rainer & Dobbs,
LLP, in Atlanta, Georgia, relates that pursuant to various lease
supplements, Allied Systems leased additional equipment from
BancBoston:

   Lease
Supplement
    No.       Leased Equipment                Expiry Date
----------   ----------------                -----------
     1        14 Volvo Truck Tractors         July 31, 2005
              14 Cottrell Car Haul Trailers

     2        15 Volvo Truck Tractors         August 31, 2005
              15 Cottrell Car Haul Trailers

     3        16 Volvo Truck Tractors         September 30, 2005
              16 Cottrell Car Haul Trailers

     5        22 Volvo Truck Tractors         April 30, 2006
              22 Cottrell Car Haul Trailers

Additional lease supplements exist under the Master Lease and
have been assigned to other lessors.

Effective as of December 31, 2000, BancBoston merged into Fleet
Capital Corporation.  Fleet Capital Corporation merged into FCC
Transition, LLC, which merged into Banc of America Leasing &
Capital, LLC, each effective as of July 31, 2005.  As a result,
BALC is now the owner and the holder of the Master Lease, the
Guaranty, the First Supplement, the Second Supplement, the Third
Supplement, the Fifth Supplement and all related documents and
properties, Mr. Rankin says.

To provide notice of the lessor's ownership interest in the
Equipment, BancBoston and Fleet filed certain UCC-1 financing
statements, amendments and continuation statements in county
records within the State of Georgia.  According to Mr. Rankin,
BALC possesses original certificates of title for the Equipment.

Mr. Rankin relates that the Lease Documents evidence what are
generally known as TRAC leases, which refers to "terminal rental
adjustment clause."  Under TRAC leases, at the end of the term of
the lease, the lessee has two options:

    (1) the lessee may elect to acquire the leased property for an
        established residual value plus taxes and any other
        amounts provided in the lease; or

    (2) the lessee may return the leased property, which will be
        sold by the lessor.

Any excess sales proceeds above the established residual value
will be paid by the lessee to the lessor.

On the Petition Date, the term of the First Supplement expired.
Mr. Rankin asserts that Allied Systems has not returned the
Leased Equipment to BALC pursuant to the First Supplement.
According to Mr. Rankin, Allied Systems also failed and refused
to pay the amount owed to BALC under the TRAC provisions in the
Master Lease and the First Supplement, which, as of the Petition
Date, was $150,883.

Furthermore, Allied Systems has failed to make any of the rent
payments due to BALC on August 1, 2005.  Mr. Rankin notes that
the term of the Second Supplement will expire soon, yet Allied
Systems has been unable or unwilling to commit as to its
intentions with respect to the Equipment in general and the lease
supplements that have expired or will soon expire in particular.

"Despite the fact that the Debtor continues to use the Equipment
in its business, [Allied Systems] had made no offer of adequate
protection to BALC," Mr. Rankin says.  "Clearly, the Equipment is
depreciating and BALC is entitled to adequate protection of its
ownership interest in the Equipment."

Unless Allied Systems is willing to comply with the Lease
Documents, the Equipment will not be available to it to support a
reorganization of its business.  With respect to the Lease
Supplements, there is or soon will be no unexpired lease for
Allied Systems to assume or reject.  BALC owns the Equipment, and
because the various lease supplements will soon expire, the
Equipment will not be available to Allied Systems unless it is
willing and able to comply with the TRAC provisions in the Lease
Documents.  Therefore, Mr. Rankin concludes, there is no equity
in Allied Systems' interest in the Equipment and the Equipment is
not necessary for an effective reorganization.

In the alternative, BALC asks the Court to compel Allied Systems
to grant it adequate protection by:

    a. either paying all end-of-lease TRAC amounts to BALC as when
       they come due or immediately surrender possession of any
       Equipment that is subject to an expired lease supplement to
       BALC;

    b. making all monthly lease payments to BALC as and when they
       come due under the Lease Documents;

    c. certifying in writing to BALC that each item of the
       Equipment is in the possession and control of Allied
       Systems and is not missing, stole, destroyed, or otherwise
       unaccounted for;

    d. providing to BALC evidence of hazard insurance covering all
       of the Equipment; and

    e. complying with all of the provisions of the Lease Documents
       relating to audit and inspection rights in favor of BALC.

Headquartered in Decatur, Georgia, Allied Holdings, Inc. --  
http://www.alliedholdings.com/-- and its affiliates provide      
short-haul services for original equipment manufacturers and  
provide logistical services.  The Company and 22 of its affiliates  
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.  
Case Nos. 05-12515 through 05-12537).  Jeffrey W. Kelley, Esq., at  
Troutman Sanders, LLP, represents the Debtors in their
restructuring efforts.  When the Debtors filed for protection from  
their creditors, they estimated more than $100 million in assets  
and debts. (Allied Holdings Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ALLIED HOLDINGS: DaimlerChrysler Demands Lease Decision
-------------------------------------------------------
DaimlerChrysler Services North America LLC, successor by merger to
Mercedes-Benz Credit Corporation, as a lessor, asks the U.S.
Bankruptcy Court for the Northern District of Georgia to compel
Allied Holdings, Inc., and its debtor-affiliates to:

    -- immediately either reject or assume unexpired leases, or

    -- in the alternative, provide adequate protection.

On June 25, 1999, the Debtors entered into a Master Equipment
Lease Agreement with Mercedes-Benz Credit Corporation, now known
as DaimlerChrysler Services.

The Debtors and DaimlerChrysler Services executed three Lease
Supplements:

    -- Under Lease Supplement No. 1, the Debtors leased 58 items
       of Equipment for $3,875,767.  Monthly rental payments total
       $48,292.

    -- Under Lease Supplement No. 2, the Debtors leased 18 items
       of Equipment for $1,202,824.  Monthly rental payments total
       $15,011.

    -- Under Lease Supplement No. 3, the Debtors leased 48 items
       of Equipment for $3,406,788.  Monthly rental payments total
       $44,050.

Rent is due and payable on the 1st day of each month.

The rent due totals $107,353 as of August 1, 2005, plus $5,280 in
accrued late charges.

The Debtors' obligation to DaimlerChrysler Services is further
secured by an Equipment Lease Guaranty executed by Allied
Holdings, Inc.

Erich N. Durlacher, Esq., at Burr & Forman, LLP, in Atlanta,
Georgia, notes that given the nature of the property being used
by the Estate, which property is subject to depreciation,
ordinary and extraordinary wear and tear, and casualty losses
beyond the control of the Debtors, DaimlerChrysler Services wants
to know right away what the Debtors intend to do with the Master
Lease and all the Lease Supplements.

DaimlerChrysler Services also wants adequate protection of its
interest in the Leased Equipment considering that the Debtors
continue to use them postpetition.

Mr. Durlacher asserts that pursuant to Section 363(e), or
alternatively, Section 503(b)(1)(A) and Section 365(d)(10) of the
Bankruptcy Code, DaimlerChrysler Services is entitled to the
timely payment of rents due and owing under the Master Lease and
three Lease Supplements from the Petition Date going forward
until the Debtors decide to assume or reject the Master Lease and
all Lease Supplements.

If the Debtors elect to assume the Master Lease, DaimlerChrysler
Services asks the Court to compel the Debtors to promptly cure
all defaults under the Master Lease and all Lease Supplements.

According to Mr. Durlacher, under the Master Lease, the Debtors
are required to provide both physical damage and liability
insurance, with all insurance designating DaimlerChrysler
Services as an additional insured and loss-payee.

The Debtors have not confirmed that insurance coverage with
DaimlerChrysler Services, Mr. Durlacher says.

Under Section 365(b)(1)(B) of the Bankruptcy Code, Mr. Durlacher
asserts, the Debtors are required to compensate DaimlerChrysler
Services for any actual pecuniary loss resulting from the
defaults.  Specifically, Mr. Durlacher says, the Debtors are
obligated to reimburse DaimlerChrysler Services its actual
attorneys' fees incurred in preparing and filing its request.

The Debtors are further required to provide adequate assurance of
future performance under the Master Lease and timely rental
payments, Mr. Durlacher adds.

Thus, DaimlerChrysler Services asks the Court to compel the
Debtors to provide adequate assurance of future performance,
through appropriate means, including, but not limited to, escrow
deposits to cover one or more month's rental, "drop dead" default
remedies, among others.

In the alternative, if the Court won't approve DaimlerChrysler
Services' request or if the Debtor fails to remit timely the due
and owing postpetition rent payments under the Master Lease and
the three Lease Supplements, DaimlerChrysler Services asks Judge
Drake to terminate the automatic stay with respect to the Leased
Equipment either for lack of adequate protection or because the
Debtors do not have any equity in the Leased Equipment and it is
not necessary to an effective reorganization.

In the event that the Debtors reject the Master Lease or the
Court terminates the automatic stay with respect to the Leased
Equipment, DaimlerChrysler Services asks Judge Drake to direct
the Debtors to abandon the Leased Equipment pursuant to Section
554(b) of the Bankruptcy Code.  The Leased Equipment is
burdensome and of inconsequential value to the Estate since the
Debtors do not have any equity or ownership interest in the
Leased Equipment, Mr. Durlacher says.

Headquartered in Decatur, Georgia, Allied Holdings, Inc. --  
http://www.alliedholdings.com/-- and its affiliates provide      
short-haul services for original equipment manufacturers and  
provide logistical services.  The Company and 22 of its affiliates  
filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.  
Case Nos. 05-12515 through 05-12537).  Jeffrey W. Kelley, Esq., at  
Troutman Sanders, LLP, represents the Debtors in their  
restructuring efforts.  When the Debtors filed for protection from  
their creditors, they estimated more than $100 million in assets  
and debts. (Allied Holdings Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ALOHA AIRGROUP: Court Approves Redelivery Pact With GE Entities
---------------------------------------------------------------
The Honorable Robert J. Faris of the U.S. Bankruptcy Court for the
District of Hawaii approved the Redelivery Agreements among Aloha
Airgroup, Inc., Aloha Airlines, Inc., General Electric Capital
Corporation and some of its affiliates concerning three 737-700
Boeing aircraft.

Prior to the Debtors' bankruptcy filing, Aloha Airlines and some
of the GE Entities have entered into three Aircraft Lease
Agreements:

   (a) Aircraft Lease Agreement, dated Dec. 14, 2001, between
       Aircraft 28654, LLC, as lessor, and Aloha Airlines, as
       lessee, incorporating Aircraft Lease Common Terms
       Agreement, dated May 12, 2000, between GECC and Aloha
       Airlines, as supplemented and amended from time to time,
       respecting the Boeing 737-700 Aircraft bearing
       manufacture's Serial No. 28654 and U.S. Registration No.
       N743AL, and equipped with CFM56-7B26 engines bearing
       Manufactures Serial Nos. 88639 and 889655;

   (b) Aircraft Lease Agreement, dated Dec. 14, 2001, between
       Aircraft 32582, LLC, as lessor, and Aloha Airlines, as
       lessee, incorporating Aircraft Lease Common Terms
       Agreement, dated May 12, 2000, between GECC and Aloha
       Airlines as supplemented and amended, respecting that
       certain Boeing 737-700 aircraft bearing manufacturer's
       Serial No. 32582 and U.S. Registration No. N744AL, and
       equipped with CM56-7B26 engines bearing Manufactures Serial
       Nos. 88699 and 88702; and

   (c) Aircraft Lease Agreement, dated June 26, 2002 between AFS
       Investments XXVIII, LLC, as lessor, and Aloha Airlines, as
       lessee, incorporating Aircraft Lease Common Terms
       Agreement, dated May 12, 2000, between GECC and Aloha
       Airlines, as supplemented and amended, respecting that
       certain Boeing 737-700 aircraft bearing manufacturer's
       Serial No. 32743 and U.S. Registration No. N750AL, and
       equipped with CFM56-7B26 engines bearing manufacturer's
       Serial Nos. 890832 and 890833.

In connection with the Debtors' ongoing review of their business
plan, including the profitability of some of their routes, the
Debtors concluded to terminate some of their routes and services.  
The canceled services include service from Vancouver, Canada to
the State of Hawaii, and service between Reno, Nevada and San
Diego, California.

The Debtors also determined that they no longer require all of the
aircraft leased by Aloha Airlines from the GE Entities.
Accordingly, the Debtors approached the GE Entities regarding the
possible early redelivery of some of the aircraft that are subject
of the Assumed Aircraft Agreements.

The Debtors want the approval of the Redelivery Agreements:

   -- authorizing Aloha Airlines to undertake the transactions
      contemplated by the Redelivery Agreements,

   -- authorizing Aloha Airlines to execute and deliver the
      Replacement Deferral Notes, and

   -- allowing the General Unsecured Claims.

The General Unsecured Claims consist of:

   -- $146,758.38 with respect to the lease for N744AL;
   -- $201,731.58 with respect to the lease for N750AL; and
   -- $152,185.56 with respect to the lease for N743AL.

The Debtors' early redelivery of the Redelivered Aircraft will
facilitate the Debtors' fleet rationalization efforts and their
contemplated reorganization efforts.

The Debtors says that the Redelivery Agreements give the Debtors
and their estates significant benefits because:  

   (a) The GE Entities have agreed to accept delivery of the
       aircraft now, notwithstanding the prior assumption of the
       Redelivered Aircraft Leases.  

   (b) The GE Entities have agreed to assert the Lease Termination
       Fees solely as general unsecured claims, and not as
       administrative expense claim.  

   (c) The lessors have also agreed to provide to restructure the
       obligations under the Original Deferral Notes and permit
       Aloha Airlines to pay the amounts due over time as provided
       in the Substitute Deferral Notes.

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.


AMERIDEBT INC: Court Approves Chapter 11 Trustee's Lease Renewal
----------------------------------------------------------------
The Honorable Paul Mannes of the U.S. Bankruptcy Court for the
District of Maryland approved the request of Mark D. Taylor, the
Chapter 11 Trustee appointed in AmeriDebt, Inc.'s chapter 11 case
to:

   -- enter into a Real Property Lease effective July 1, 2005; and

   -- enter into subsequent Lease Renewals as necessary and
      appropriate.

The Lease commenced on July 1, 2004, and expired on June 30, 2005.  
The Chapter 11 Trustee renewed the Lease at a rate of $3,208.45
per month for another six months from July 1, 2005, to Dec. 31,
2005.  Under the Court's order, Mr. Taylor has the authority to
enter into subsequent renewals, as necessary and appropriate.

The Debtor maintains a significant portion of its business records
at its leased premises located at 444 North Frederick Avenue, in
Gaithersburg, Maryland.  The Debtor still has two employees and
maintains a substantial business records on the premises.

The Chapter 11 Trustee is currently in the process of preparing a
plan of liquidation.  The remaining significant piece of the plan
will be the resolution of issues with the IRS.  The Trustee is
currently negotiating with the IRS.

Headquartered in Germantown, Maryland, AmeriDebt, Inc. --
http://ameridebt.org/-- is a credit counseling company.  The  
Company filed for chapter 11 protection on June 5, 2004 (Bankr. D.
Md. Case No. 04-23649).  When the Company filed for protection
from its creditors, it listed $8,387,748 in total assets and
$12,362,695 in total debts.


ANCHOR GLASS: Bank of New York Wants DIP Hearing Moved to Sept. 8
-----------------------------------------------------------------
The Bank of New York, as Indenture Trustee and Collateral Agent
for Anchor Glass Container Corp.'s $350,000,000 11% Senior Secured
Notes due 2013, asks the Court to continue the final hearing to
consider approval of a proposed $15,000,000 Noteholder Financing
to September 8, 2005.

As previously reported in the Troubled Company Reporter on Aug.
18, 2005, the Debtor arranged a $15 million debtor-in-possession
secured term financing facility effective Aug. 10, 2005.  The
facility is provided by a group of financial institutions that are
members of an ad hoc committee consisting of holders of a majority
in principal amount of the Company's $350 million 11% Senior
Secured Notes due 2013.  This facility supplements the secured
revolving debtor-in- possession facility provided by Wachovia
Capital Finance, for itself and as agent for other lenders, in the
maximum amount of  $115 million, subject to availability.

Amy E. Lowen, Esq., at Greenberg Traurig, PA, in Orlando, Florida,
asserts that BNY and its professionals must be afforded
sufficient time and opportunity to assess:

   -- the impact of the Noteholder Financing on its collateral
      position; and

   -- the adequacy of the adequate protection proposed in
      consideration for the grant of the priming lien on that
      Noteholders' Collateral.

Ms. Lowen explains that the Second Amended Interim Priming Order
provides that the advances and indebtedness are to be secured by
a priming lien on the Noteholders' Collateral, the very same
package of collateral pledged by the Debtor to secure the
indebtedness owed under the Senior Secured Notes and Indentures.

Ms. Lowen reminds Judge Paskay that Section 364(d)(1)(B) requires
that a priming lien on the collateral of any other lien holder
can be granted only upon a showing that the interests of the
prior lien holder are adequately protected.

Absent a prior agreement with the Debtor and Purchasers, BNY
believes that the final hearing on the Noteholder Financing is
likely to require the presentation of evidence and expert
testimony on the issue of adequate protection, in particular the
value of the junior lien proposed to be granted as Noteholder
Adequate Protection in favor of BNY on the Collateral described
in the Wachovia DIP Order.

BNY has retained the services of a financial advisor, who has
requested certain due diligence materials from professionals
retained by the Debtor and Noteholders.

Ms. Lowen further argues that, as a matter of common interest to
all parties affected by the proposed Noteholder Financing, a
continuance of the final hearing is necessary to allow for
negotiations among the Debtor, BNY and the Note Purchasers in an
effort to avoid an evidentiary hearing on the issue of adequate
protection.

The Noteholder Financing appears to be subsumed in the $125
million postpetition financing the Debtor seeks under an expanded
facility to be provided by the same Noteholders and Purchasers.  
In the interests of judicial efficiency and economy, Ms. Lowen
says the final hearing on the Noteholder Financing should be
deferred until September 8, the same date the Court is scheduled
to consider the Debtor's request to borrow $125,000,000.

Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is the third-largest manufacturer of glass containers
in the United States.  Anchor manufactures a diverse line of
flint (clear), amber, green and other colored glass containers for
the beer, beverage, food, liquor and flavored alcoholic beverage   
markets.  The Company filed for chapter 11 protection on Aug. 8,   
2005 (Bankr. M.D. Fla. Case No. 05-15606).  Robert A. Soriano,   
Esq., at Carlton Fields PA, represents the Debtor in its   
restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed $661.5 million in assets and $666.6
million in debts. (Anchor Glass Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ANCHOR GLASS: Hires Houlihan Lokey as Financial Advisor
-------------------------------------------------------
On July 25, 2005, Anchor Glass Container Corporation and its
Special Committee of the Board of Directors entered into a letter
agreement with Houlihan Lokey Howard & Zukin Capital, pursuant to
which the firm will serve as the Debtor and the Special
Committee's financial advisor.

The Debtor has selected Houlihan Lokey as its financial advisor
because of Houlihan Lokey's extensive experience in providing
financial advisory services.  The Debtor submits that Houlihan
Lokey is well-qualified and uniquely able to perform the services
for which it is to be retained in a most efficient and timely
manner.  

Accordingly, pursuant to Sections 327(a) and 328(a) of the
Bankruptcy Code, and Rule 2014 of the Federal Rules of Bankruptcy
Procedure, the Debtor seeks the Court's permission to employ
Houlihan Lokey, nunc pro tunc to the Petition Date.

Among others, the firm will:

   (a) assist with the development, negotiation and
       implementation of either a Restructuring Transaction,
       Merger and Acquisition Transaction, Financing Transaction
       or a combination thereof;

   (b) assist in valuing the Debtor and, as appropriate,
       valuing the Debtor's assets or operations;

   (c) provide expert advice and testimony relating to financial
       matters associated with the Transactions, including the
       feasibility of any Transaction and the valuation of any
       securities issued in connection with a Transaction;

   (d) to the extent specifically requested by the Debtor or the
       Special Committee, as the case may be:

          -- advise the Debtor and the Special Committee, as to
             mergers or acquisitions, the sale or other
             disposition of any of the Debtor's assets or
             business, alternative restructuring or
             reorganization strategies, and the potential
             availability of new debt or equity financing;

          -- develop a list of potential lenders, equity
             investors, acquirers and strategic partners, and
             interact with the investors in an effort to create
             interest in the Debtor; or

          -- prepare an offering memorandum to provide to
             interested investors and submit and discuss such
             offering memorandum with interested parties, and
             coordinate the negotiation of any Transaction with
             interested parties;

          -- assist with any due diligence investigations
             conducted in connection with any Transaction;

   (e) assist with any due diligence investigations conducted in
       connection with any Transaction;

   (f) assist in preparing proposals to creditors, shareholders
       and other parties-in-interest in connection with any
       Transaction;

   (g) assist with presentations to the Debtor's creditors,
       investors and other parties-in-interest regarding
       potential Transactions or other related issues; and

   (h) render other financial advisory and investment banking
       services as may be mutually agreed upon by the parties.

The Debtor has offered Houlihan Lokey this compensation package:

   (A) Monthly Fee:

            $150,000 per month for six months; and
            $125,000 per month thereafter

       The Monthly Fee will be payable for a minimum of three
       Months.  After the first six months, 50% of the Monthly
       Fees actually paid will be credited against the
       Restructuring Transaction Fee or the M&A Transaction Fee.

   (B) Transaction Fees to be paid on the closing of a
       Transaction:

       * Restructuring Transaction Fee equal to the lesser of:

            $3,250,000; or

            0.75% of the face amount of outstanding Company
                  Obligations that are restructured, modified,
                  amended, forgiven or otherwise compromised.

       * M&A Transaction Fee equal to the lesser of:

            $3,250,000; or

            1% of Aggregate Gross Consideration.

         However, if an M&A Transaction is consummated as part
         of a Restructuring Transaction, Houlihan Lokey will be
         entitled to the greater of the M&A Transaction Fee or
         the Restructuring Transaction Fee, but not both.

       * Financing Transaction Fee equal to the sum of:

            1% of all senior secured notes and bank debt raised
               or committed;

            2% of the aggregate principal amount of all second
               lien or junior secured debt financing raised or
               committed;

            3% of all unsecured, non- senior and subordinate debt
               raised or committed; and

            5% of all equity of equity equivalents raised.

         The fees will be paid immediately out of the proceeds of
         the placement.

         However, no Financing Transaction Fee will be payable on
         amounts raised either:

            (i) as part of a DIP financing facility under Chapter
                11; or

           (ii) from Cerberus Capital Management, L.P. or any
                Cerberus affiliates or in connection with a
                Cerberus-sponsored transaction other than to the
                extent requested by the Debtor or the Special
                Committee.

       * Fairness Opinion Fee:  The fees will be market fees
         mutually agreed upon by Houlihan Lokey and the Debtor.

   (C) Expense Reimbursement:

       All out of-pocket expenses reasonably incurred by Houlihan
       Lokey before termination.

The Debtor proposes that Houlihan Lokey be paid 100% of the
amount due for Monthly Fees and expenses incurred upon submission
of an acceptable invoice to the Debtor, provided that the firm
will submit a separate application to the Court for approval of a
Transaction Fee if and when the fee becomes due and payable.  

The Debtor will indemnify and hold Houlihan Lokey harmless
against any and all losses, claims, damages or liabilities in
connection with the engagement, except to the extent they arise
as a result of any gross negligence or willful misconduct on the
part of the firm in the performance of its services.

David R. Hilty, Managing Director at Houlihan Lokey, attests that
the firm does not hold or represent an interest adverse to the
estate that would impair its ability to objectively perform
professional services to the Debtor.

Mr. Hilty assures the Court that Houlihan Lokey has not provided,
and will not provide, professional services to any of the
creditors, other parties-in-interest, or their attorneys with
regard to any matter related to the Debtor's Chapter 11 case.

Mr. Hilty, however, discloses that before the Petition Date, the
Debtor paid Houlihan Lokey $150,000 for services provided and
$13,378 as reimbursement for out-of-pocket expenses.  These
amounts were for services provided prior to the commencement of
the Debtor's bankruptcy case and cover full payment for all
prepetition fees and expenses.  Accordingly, Houlihan Lokey is
not a prepetition creditor of the Debtor.

Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is the third-largest manufacturer of glass containers
in the United States.  Anchor manufactures a diverse line of
flint (clear), amber, green and other colored glass containers for
the beer, beverage, food, liquor and flavored alcoholic beverage   
markets.  The Company filed for chapter 11 protection on Aug. 8,   
2005 (Bankr. M.D. Fla. Case No. 05-15606).  Robert A. Soriano,   
Esq., at Carlton Fields PA, represents the Debtor in its   
restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed $661.5 million in assets and $666.6
million in debts. (Anchor Glass Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ANCHOR GLASS: Wants to Assume Sales Contract with OCI Chemicals
---------------------------------------------------------------
Anchor Glass Container Corporation seeks authority from the U.S.
Bankruptcy Court for the Middle District of Florida to assume a
Sales Agreement dated 7, 2004, with OCI Chemical.

As reported in the Troubled Company Reporter on Aug. 24, 2005, OCI
informed the Debtor that it will decline further performance under
the agreement because the Debtor had failed to make payments due.  
OCI asserts a balance due in excess of $1,800,000 as of the
Petition Date.  

The Debtor informed OCI that it was obligated to continue to
perform under the Agreement notwithstanding any prepetition
defaults. The Debtor notified OCI that as debtor-in-possession,
Anchor had the right to assume or reject the Agreement under
Section 365(d)(2), at any time prior to confirmation.

Pursuant to the Agreement, OCI supplies substantially all of the
soda ash requirements for six of Anchor Glass' eight plants. Soda
ash is an essential raw material for the manufacture of glass.  

There are few suppliers of soda ash in the United States.  Anchor
Glass' management does not believe that a replacement source is
available that could meet Anchor's needs for quantity, timeliness
and frequency of delivery to each of its plants.

Robert M. Quinn, Esq., at Carlton Fields PA, in Tampa, Florida,
informs the Court that the OCI Agreement provides that OCI will
ship approximately 240,000 tons of soda ash to Anchor annually,
at prices established in January of each year for the coming
year.

Mr. Quinn adds that under the terms of the OCI Agreement, the
price for soda ash is adjusted annually at the start of each
year.  Anchor now pays $79.20 per ton under the terms of the OCI
Agreement.  The price will remain in effect until January 2006,
at which time the price will adjust to a market price.  The 2005
price under the OCI Agreement is substantially less than the
current market price for soda ash.

Anchor Glass owes OCI a substantial prepetition unpaid balance
under the OCI Agreement.  OCI asserts that Anchor Glass owes
$2.5 million for unpaid invoices arising from sales of soda ash,
and additional disputed amounts of $400,000 arising from
increased shipping costs incurred by OCI, and approximately
$23,000 which is subject to other disputes.

The OCI Agreement provides for 30-day terms.  In the event Anchor
cures and reinstates the OCI Agreement, and provided Anchor is
not in breach of the OCI Agreement at the end of the term, Anchor
will be entitled to payment from OCI of a rebate of $1.13 per ton
purchased from OCI, not to exceed $840,000.

Headquartered in Tampa, Florida, Anchor Glass Container
Corporation is the third-largest manufacturer of glass containers
in the United States.  Anchor manufactures a diverse line of
flint (clear), amber, green and other colored glass containers for
the beer, beverage, food, liquor and flavored alcoholic beverage   
markets.  The Company filed for chapter 11 protection on Aug. 8,   
2005 (Bankr. M.D. Fla. Case No. 05-15606).  Robert A. Soriano,   
Esq., at Carlton Fields PA, represents the Debtor in its   
restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed $661.5 million in assets and $666.6
million in debts. (Anchor Glass Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


ASARCO LLC: Wants to Enter Into Bank One Credit Card Pact
---------------------------------------------------------
ASARCO LLC seeks authority from the U.S. Bankruptcy Court for the
Southern District of Texas pursuant to Section 364(c)(2) of the
Bankruptcy Code to enter into a corporate credit card agreement
with Bank One and grant a lien on a newly created segregated cash
account to secure obligations arising under the credit card
program.

                   The American Express Program

Before the Petition Date, ASARCO had a company credit card
program sponsored by American Express Company, which provided
business credit cards to certain key employees of the Debtor for
their business-related expenses and for purchasing necessary
goods and services.  Upon learning of the Chapter 11 filing,
American Express cancelled ASARCO's credit card program, freezing
all cards under it.

James R. Prince, Esq., at Baker Botts L.L.P., in Dallas, Texas,
states that even before the Petition Date the Debtor was
unsatisfied with the credit card program offered by American
Express.  According to Mr. Prince, ASARCO had contacted other
providers, prepetition, including Bank One, one of ASARCO's main
banking and financial institutions, about the possibility of
migrating ASARCO's credit card program to another provider.  Due
to American Express' cancellation of the existing credit card
program, the Debtor found it necessary to expedite its
negotiations for a replacement credit card program.

                     Migration to Bank One

ASARCO has selected Bank One's $250,000 Commercial Card Classic
program, which will provide key employees with up to 100 business
charge cards to replace the cancelled American Express program.
Annual fees for the credit cards vary depending on annual usage,
but in no event are the fees greater than $35 per card.  The
finance charge rate, which applies only to past-due accounts, is
equal to the prime rate plus 2%.

As a condition to entering into the credit card agreement, Bank
One is requiring ASARCO to:

   (a) set aside $250,000 in a segregated savings account at Bank
       One; and

   (b) grant Bank One a lien against the segregated savings
       account to secure ASARCO's obligations arising under the
       credit card program.

ASARCO will fund the account with unencumbered cash, not cash
collateral.  The segregated savings account will remain in
ASARCO's name and control.

            Bank One Credit Card Program Is Necessary

ASARCO believes that the credit agreement with Bank One is
necessary for the operation of its business and is in the best
interest of the estate.  Mr. Prince explains that the Debtor
needs to provide certain of its key employees with a business
charge card to be used:

   (1) for the purchase of supplies used in the daily operations
       of the business;

   (2) for business-related travel expenses; and

   (3) other business-related needs.

Section 364 authorizes a debtor who is unable to obtain unsecured
credit to obtain credit, after notice and a hearing, secured by a
lien on property of the estate that is not otherwise subject to a
lien.  Mr. Prince notes that ASARCO has otherwise been unable to
obtain the type of credit that Bank One is offering on an
unsecured basis.  In fact, even American Express sought similar
protections in order to continue to service ASARCO's procurement
card program postpetition.

Mr. Prince further informs the Court that, unless the Debtor is
authorized to enter into the credit arrangement with Bank One and
grant a lien on a $250,000 segregated cash account, ASARCO's
business operations will be disrupted by the loss of its
corporate credit card program.

                     Texas Commission Objects

The Texas Commission on Environmental Quality contests ASARCO's
request to migrate its Credit Card Program to Bank One on the
grounds that the Commission's counsel did not receive notice of
the emergency hearing on the Motion until August 18, 2005, at
5:33 p.m., after close of business, when he received an e-mail
from an employee of the Debtor's counsel.  

ASARCO has sought expedited consideration of the request.  A
hearing on the Motion was scheduled for August 19, 2005.

The Texas Commission asserts that it is inappropriate for its
counsel to receive less than one business day's notice of a
hearing without a true emergency.  The Commission's counsel is
extremely concerned that the expedited consideration of the
Debtor's request is a window into what creditors can expect in
the case.

"The Debtor should not be permitted to abuse the Court's
graciousness with respect to the setting of emergency hearings,"
Hal F. Morris, Esq., Assistant Attorneys General, Bankruptcy &
Collections Division, in Austin, Texas, argues, "unless they can
demonstrate a true emergency which would require immediate court
action and justify the denial of due process to other parties in
interest."

The Texas Commission also asserts that the Debtor's Motion lacks
sufficient detail about the nature of the alleged emergency,
stating that the Motion itself does not contain substance
creating a problem with regard to the employees' inability to
avail of Credit Card Services.  Mr. Morris points out that one of
the key facts the Debtor should disclose is the date and time it
received notice that its account was being frozen by American
Express.

The Texas Commission requests that any order entered by the Court
on less than one day's notice to parties-in-interest, be an
interim order.  This would allow all parties-in-interest an
opportunity to review the Debtor's pleading and consider the
Debtor's request.

The Texas Commission also asks the Court to establish a procedure
for the setting of emergency hearings in the bankruptcy
proceedings, stating that not all requests by the Debtor are true
emergencies and that the due process rights of parties-in-
interest must be balanced against the Debtor's desire for
expeditious resolution of its motions.

The Texas Commission suggests a procedure for the Court's
consideration:

   (1) Any order entered on an emergency motion be interim;

   (2) Parties-in-interest have 20 days to challenge the entry of
       the interim order;

   (3) If an objection is filed, the matter be requested by the
       Debtor be set for hearing within 20 days of the date the
       objection was filed; and

   (4) If there are no objections filed, the order becomes final
       in 25 days of the entry of the interim order.

                             Notice

James R. Prince, Esq., at Baker Botts L.L.P., in Dallas, Texas,
advises parties-in-interest that the hearing to consider the
Debtor's request, originally scheduled for Aug. 19, 2005, has
been adjourned to a later date still to be set.

Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining, smelting    
and refining company.  Grupo Mexico S.A. de C.V. is ASARCO's
ultimate parent.  The Company filed for chapter 11 protection on
Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).  James R.
Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq.,
at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A.
Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden,
Womble & Culbreth, P.C., represent the Debtor in its restructuring
efforts.  When the Debtor filed for protection from its creditors,
it listed $600 million in total assets and $1 billion in total
debts.

The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
thru 05-20525).  They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe
Company, Inc., Cement Asbestos Products Company, Lake Asbestos Of
Quebec, Ltd., and LAQ Canada, Ltd.  Details about their asbestos-
driven chapter 11 filings have appeared in the Troubled Company
Reporter since Apr. 18, 2005.  ASARCO has asked that the five
subsidiary cases be jointly administered with its chapter 11 case.
(ASARCO Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


ASARCO LLC: Wants Approval of Reclamation Claim Procedures
----------------------------------------------------------
Since filing for bankruptcy, ASARCO LLC has received reclamation
demands from various suppliers and other creditors.  ASARCO
expects to receive more of these demands.

Pursuant to Section 546(c) of the Bankruptcy Code, the Debtors
ask the Court to establish these guidelines and procedures for
the treatment of timely asserted reclamation claims:

   (a) Any supplier or other creditor asserting a reclamation
       claim must do so in compliance with the requirements of
       Section 546(c) and applicable state law;

   (b) Notwithstanding any reclamation demand that would require
       ASARCO to segregate the assets subject to the reclamation
       demand, ASARCO would be authorized to use the goods,
       products, and raw materials provided by suppliers and
       other trade creditors that may be subject to reclamation
       claims;

   (c) In lieu of physical reclamation, if ASARCO determines that
       a particular supplier or other trade creditor has a valid
       reclamation claim and ASARCO desires to pay the creditor
       on account of the goods, then ASARCO will provide written
       notice of its intent, along with the supporting invoices,
       to:

          (i) the official committee of unsecured creditors
              appointed in ASARCO's case;

         (ii) the official committee of unsecured creditors
              appointed in the Subsidiary Cases; and

        (iii) the United States Trustee.

       Unless a written objection is filed and served on ASARCO
       within five business days from the date of delivery of the
       notice, the creditor will be deemed to hold an
       administrative expense claim under Section 503(b), and
       ASARCO is authorized to pay the creditor without further
       Court order;

   (d) In lieu of physical reclamation, if the Court determines,
       upon request of a particular supplier or other trade
       creditor, and after notice and a hearing, that a creditor
       has asserted a valid reclamation claim, then the creditor  
       will be granted an administrative expense claim under
       Section 503(b) for the amount of the reclamation claim;
       and

   (e) In any proceeding commenced to determine the validity or
       amount of any reclamation claim, the supplier or the trade
       creditor asserting the claim will bear the initial
       evidentiary burden of establishing the validity of its
       reclamation claim under Section 546(c) and applicable
       state law by a preponderance of the evidence.

Jack L. Kinzie, Esq., at Baker Botts LLP, in Dallas, Texas, tells
the Court that the procedures for resolving reclamation claims
are necessary to prevent supply interruptions and severe and
irreparable injury to the Debtors' business operations.  The
success and ultimate viability of the Debtors' businesses depend
on the immediate utilization of the goods, products, and raw
materials that may be the subject of reclamation claims.  

"If suppliers or other trade creditors are allowed to reclaim
certain assets or if the Debtors are required to segregate those
assets, there could be disastrous interruption in the Debtors'
business operations," Mr. Kinzie says.

Mr. Kinzie further asserts that the disruption and adverse
publicity that would result could impact the Debtors'
relationship with other trade creditors and force an effective
shut down of their business operations, which could severely
impair, or possibly eliminate, any possibility for a successful
reorganization.  Any payment to be made will be subject to any
cash collateral or postpetition financing documents or orders
approved or entered in the Debtors' cases.

Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining, smelting    
and refining company.  Grupo Mexico S.A. de C.V. is ASARCO's
ultimate parent.  The Company filed for chapter 11 protection on
Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).  James R.
Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq.,
at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A.
Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden,
Womble & Culbreth, P.C., represent the Debtor in its restructuring
efforts.  When the Debtor filed for protection from its creditors,
it listed $600 million in total assets and $1 billion in total
debts.

The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
thru 05-20525).  They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe
Company, Inc., Cement Asbestos Products Company, Lake Asbestos Of
Quebec, Ltd., and LAQ Canada, Ltd.  Details about their asbestos-
driven chapter 11 filings have appeared in the Troubled Company
Reporter since Apr. 18, 2005.  ASARCO has asked that the five
subsidiary cases be jointly administered with its chapter 11 case.
(ASARCO Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


ASARCO LLC: Utilities Want Court Order Vacated
----------------------------------------------
ASARCO LLC obtains electricity, water, natural gas, telephone
services, and similar services through accounts with numerous
utility companies in connection with the normal operation of its
business.

Under Section 366 of the Bankruptcy Code, utility companies are
prohibited from discontinuing, altering, or refusing service to a
debtor during the first 20 days of the bankruptcy case.  Upon
expiration of the Stay Period, however, a Utility Company has the
option of terminating its services if a debtor has not furnished
adequate assurance of payment.

Karen C. Paul, Senior Assistant General Counsel of ASARCO,
relates that it is vitally important to the Debtor's business,
and thus to the Debtor's successful reorganization, that utility
services continue uninterrupted after the expiration of the Stay
Period.  If utility services were discontinued or altered, even
briefly, the Debtor's ongoing operations would be severely
disrupted, causing substantial and perhaps irreparable harm, and
the Debtor's reorganization efforts would be jeopardized.

For this reason, the Debtor wants to prevent Utility Companies
from terminating services or requiring additional deposits in
connection with their provision of services.

The Utility Companies would not be prejudiced by the absence of
additional deposits, Ms. Paul says.  ASARCO has timely paid most
of its undisputed prepetition invoices, and is prepared to pay
all undisputed postpetition charges for Utility Services.

The timely payment of prepetition invoices and prompt payment of
all undisputed postpetition invoices for Utility Services after
the Petition Date, together with existing deposits and the
statutory administrative priority provisions constitute adequate
assurance of payment under the Bankruptcy Code, Ms. Paul asserts.  
Moreover, if the Utility Companies require additional deposits to
secure continued services, the Debtor may face a severe cash
shortage.

Shelby A. Jordan, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., in Corpus Christi, Texas, points out that courts have held
that a debtor's ability to pay postpetition bills promptly is
most determinative of adequate assurances for utility companies.  

In In re George C. Frye Co., 7 B.R. 856 (Bankr. D. Me. 1980), Mr.
Jordan says the court found that a utility company's demand that
a Chapter 11 debtor post a deposit or suffer termination of
service, if permitted, would jeopardize the debtor's
reorganization efforts.  Additionally, the court noted that the
administrative expense priority provisions of Sections 503(b) and
507(a) constituted adequate assurance of payment to the utility.

At the Debtor's behest, the U.S. Bankruptcy Court for the Southern
District of Texas enjoins and restrains Utility Companies from
discontinuing, altering, or otherwise refusing service on account
of any unpaid prepetition charges.

A Utility Company, however, may request additional assurances of
payment in the form of deposits or other security within 30 days
after the Court enters a Utility Injunction Order.  If the Debtor
believes that the Additional Assurance Request is not reasonable,
the Debtor may schedule a hearing to determine if additional
assurances are necessary.

Judge Schmidt holds that a Utility Company will be deemed to have
adequate assurance of payment until a further Court order is
entered in connection with a Determination Hearing.

Utility Companies will be prohibited from applying any
prepetition deposit to a postpetition invoice, but instead be
required to hold any deposits postpetition as additional adequate
assurance.

A schedule of the Debtor's utility service accounts is available
at no charge at:

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

                   Utilities Want Order Vacated

(1) Chevron

Rhett G. Campbell, Esq., at Thompson & Knight LLP, in Houston,
Texas, informs the Court that Chevron Natural Gas, a division of
Chevron U.S.A. Inc., is not a utility but rather a forward
contract merchant entitled to the protection of Section 556 of
the Bankruptcy Code.

Before the Petition Date, Chevron and the Debtor had entered into
a Base Contract for Sale and Purchase of Natural Gas dated
April 1, 2003, by which Chevron agreed to deliver natural gas to
the Debtor.  Pursuant to the terms of the contract and Tex. Bus.
Com. Code section 2.702(a), the Debtor was prepaying for the gas
prior to delivery.

Section 556 expressly provides that a forward contract may not be
"stayed, avoided or otherwise limited by operation of any
provision of this title or by order of a court in any proceeding
under [the Bankruptcy Code]."

The Utility Order seeks to modify Chevron's contractual rights
with respect to payment and dispute resolution pursuant to the
provision of Section 366, Mr. Campbell points out.  That action
is expressly forbidden by the provision of Section 556.  

Accordingly, Chevron asks the Court to modify the Utility Order
to delete Chevron from the list of Utility Companies or to
provide that the Order does not apply to Chevron.

(2) El Paso

Philip G. Eisenberg, Esq., at Locke Liddell & Sapp LLP, in
Houston, Texas, asserts that El Paso Natural Gas Company is not a
utility company subject to the provision of Section 366 of the
Bankruptcy Code.

Mr. Eisenberg notes that "utility," as used in Section 366, is
not defined in the Bankruptcy Code.  However, the legislative
history of Section 366 contemplates application only to utilities
that are "monopolies in the area" and debtors who "cannot easily
obtain comparable service."

In this regard, Mr. Eisenberg says the Debtor has wholly failed
to meet its burden of proving that El Paso is a monopoly, and
proving that it has no choice but to enter into gas supply
contracts with El Paso because it could not otherwise obtain
comparable service.  Moreover, the Debtor has disclosed in an
exhibit to the Utility Motion that it obtains natural gas from
seven suppliers.

"El Paso expressly avers that it is not a monopoly in any of the
areas where the Debtors operate, and the Debtors could (and did)
obtain comparable service from other natural gas suppliers," Mr.
Eisenberg tells Judge Schmidt.  "If the Debtors, or their
affiliates who have actually contracted with El Paso, did not
find the terms and condition of the Gas Supply Contracts
acceptable, it could have negotiated with another natural gas
supplier."

Mr. Eisenberg further notes that El Paso's records indicate that
its gas supply contract is with ASARCO, Inc., not the Debtor.

Mr. Eisenberg also contends that the Gas Supply Contracts are
forward contracts subject to termination or liquidation under
Section 556.  By classifying El Paso as a utility, Mr. Eisenberg
says, the Debtor is merely attempting to avoid the possibility of
termination or liquidation of the Gas Supply Contracts or its
obligations to cure prepetition defaults in the event of
assumption of the Gas Supply Contracts, as would be required by
Section 365(b)(1)(A).

Furthermore, Section 365 does not enjoin the alteration, refusal
or discontinuation of service to, or discrimination against, the
Debtor, as does the Utility Order relying upon Section 366, Mr.
Eisenberg adds.

The Debtor should be required on rehearing to substantiate its
claim that El Paso should be subject to the Utility Order, Mr.
Eisenberg argues.  The Utility Order should be vacated to provide
El Paso an adequate opportunity to demonstrate that the Order is
inapplicable.

Absent the Court vacating the Utility Order, El Paso will be
subjected to the provisions of Section 366, without the Debtor
having first put to the task of demonstrating that it is entitled
to any of the protections provided.

Headquartered in Tucson, Arizona, ASARCO LLC --
http://www.asarco.com/-- is an integrated copper mining, smelting    
and refining company.  Grupo Mexico S.A. de C.V. is ASARCO's
ultimate parent.  The Company filed for chapter 11 protection on
Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).  James R.
Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq.,
at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A.
Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden,
Womble & Culbreth, P.C., represent the Debtor in its restructuring
efforts.  When the Debtor filed for protection from its creditors,
it listed $600 million in total assets and $1 billion in total
debts.

The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521
thru 05-20525).  They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe
Company, Inc., Cement Asbestos Products Company, Lake Asbestos Of
Quebec, Ltd., and LAQ Canada, Ltd.  Details about their asbestos-
driven chapter 11 filings have appeared in the Troubled Company
Reporter since Apr. 18, 2005.  ASARCO has asked that the five
subsidiary cases be jointly administered with its chapter 11 case.
(ASARCO Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


ATA AIRLINES: Motion to Reject Pilot's Union Agreement Draws Fire  
-----------------------------------------------------------------
As previously reported in the Troubled Company Reporter on   
August 18, 2005, ATA Airlines, Inc., sought the U.S. Bankruptcy
Court for the Southern District of Indiana's authority to reject
its collective bargaining agreement with the Air Line Pilots
Association, International, representing 833 ATA cockpit
crewmembers, including pilots and flight engineers.

Melissa M. Hinds, Esq., at Baker & Daniels, in Indianapolis,
Indiana, relates that beginning August 8, 2005, ATA submitted a
business plan to the investment community to begin a process to
secure an investment of up to $100 million of new capital needed
for its reorganization.  Without a new investment, ATA cannot
emerge from Chapter 11.  

The Business Plan projects a return to profitability only if ATA
achieves a level of labor costs consistent with the long-term
relief that ATA has proposed, along with the successful
implementation of a number of other initiatives.

The Business Plan is based upon, among other things, the
$37.6 million per year reduction in crewmember labor costs in
2006 and the ongoing savings generated by an August 5, 2005
Proposal presented by ATA to ALPA under Section 1113(b)(1) of the
Bankruptcy Code.

                          Responses

(A) ALPA

The Air Line Pilots Association, International, objects to ATA
Airlines, Inc.'s request to reject their 2002 collective
bargaining agreement under Section 1113 of the Bankruptcy Code.

Frederick W. Dennerline III, Esq., at Fillenwarth, Dennerline,
Groth & Towe, in Indianapolis, Indiana, asserts that ATA attempts
to minimize the tremendous sacrifices already made by the ALPA
crewmembers.  Not unmindful of the Debtors' financial conditions,
ALPA has thrice agreed to modify the CBA to generate about $70
million in savings to ATA.

In addition, ATA attempts to down play the enormity of the
concessions ATA seeks to impose on the crewmembers.  

ATA repeatedly asserts that is has a viable business plan that
requires the carrier to reduce pilot costs by $37.5 million in
2006.  In a footnote in the Motion, however, ATA admitted that, in
fact, its proposal would generate $43.2 million in savings in
2006.  ATA did not explain why it is asking the crewmembers to
give more than its business plan contemplates, Mr. Dennerline
points out.

ATA similarly seeks to mask the severity of the concessions it
seeks by repeatedly citing "20%" as the reduction in crewmember
pay.  Comparing the wages ATA is obligated to pay under the ALPA
CBA with the wages it wants to pay under the 1113 Proposal would
reveal that the difference is approximately 42%.

Additionally, while ATA refers to ALPA's need to "share with other
stakeholders" in reducing costs, the Debtor never bothers to
provide any detail as to the sacrifices by the other stakeholders.  

According to Mr. Dennerline, the proposed concessions would
dramatically outpace those of other interested parties.  He
asserts that the ALPA-represented crewmembers are being asked to
accept pay reductions that are approximately double that of any
other employee group.  

Under ATA's business plan, Southwest Airlines, Inc., will receive
27.5% of the equity in the reorganized ATA in exchange for
$30 million in exit financing, whereas ALPA, in stark contrast,
will receive no equity for its approximate $80 million in
concessions for July 2004 through July 2007.

ALPA believes that it has bargained in good faith.  The current
version of ATA's ever-evolving business plan was not presented to
ALPA until July 18, 2005.  Thus, it is ridiculous to suggest that
ALPA should have concluded negotiations in June or early July
without waiting to see the plan, Mr. Dennerline remarks.

ALPA has rejected ATA's proposal in favor of its own reasonable
proposal that provides the concessions that are needed to allow
reorganization.

ALPA has offered to forego "snapbacks" set to take place
October 1, 2005, and has agreed that ATA can pay its crewmembers
at rates below the frozen July 2003 rates.  Rather than the 20%
reduction from July 2003 rates proposed by ATA, however, ALPA
offered 8% reductions.  And rather than suspending contributions
to the Crewmember Money Purchase Plan as proposed by ATA, ALPA
offered to continue the plan at the 50% contribution level that
the parties previously agreed to in May 2005.

Through wage reductions and other means, ALPA's proposal would
provide ATA with savings of approximately $18 million in 2006 and
a total of $36 million for the period October 1, 2005, through
June 30, 2007.

Nonetheless, ALPA has not walked away from negotiations for
alternative and compromise proposals with ATA.

In that light, ALPA asks the Court to deny the Motion on these
grounds:

  (1) ATA's proposal does not meet the strict standards under
      Section 1113(b);

  (2) ATA has not proved that the proposed modifications are
      "necessary" to reorganization and that ATA has negotiated
      in good faith concerning the proposal;

  (3) ATA has failed to demonstrate that all affected parties are
      treated fairly and equitably;

  (4) ATA has failed to demonstrate that ALPA rejected its
      proposal without good cause;

  (5) ATA has not demonstrated that the balance of equities
      clearly favors rejection; and

  (6) ATA cannot condition relief upon speculations as to
      prospective investors.

(B) AFA

The Association of Flight Attendants tells the Court that all of
the unions representing the employees of ATA have been called on
to make sacrifices as part of the Debtors' reorganization.  

AFA believes that the concessions requested by ATA are not
necessary for its reorganization.  

AFA believes that the CBA should be honored, and thus, opposes to
the Motion.

(C) Creditors Committee

The Official Committee of Unsecured Creditors believes that the
Debtors need to secure additional capital and reduce operational
costs to be able to successfully reorganize.  The Debtors' ability
to obtain the much needed financing is, in part, dependent upon
the long term labor concessions being sought in the 1113 Proposal,
which is an essential part of the Debtors' business plan.

C. R. Bowles, Jr., Esq., at Greenebaum Doll & McDonald, PLLC, in
Louisville, Kentucky, explains that lender or equity investor will
not commit to provide additional funds unless it believes that the
Debtors' business plan is viable.  Without a long-term arrangement
with the crewmembers, the Debtors' current business plan is not
viable.

Although there are no guarantees that the Debtors will be able to
obtain the additional capital, and there is continued uncertainty
relating to fuel costs, the Debtors will incur approximately
$4 million per month under the "snapback" provisions of the CBA,
unless the 1113 Proposal is approved.  As the Debtors have
correctly noted, the increase will not only inhibit attracting the
required investment, it would likely push their estates into
liquidation.

The Debtors have implemented significant cost cutting measures
during their Chapter 11 cases including:

   (i) eliminating non-core assets, including a captive regional
       carrier based in Chicago -- the Chicago Express market --
       and exiting several scheduled service routes from
       Indianapolis;

  (ii) reducing aircraft and aircraft-engine expenses through the
       rejection and renegotiation of leases;

(iii) reducing the gauge of their fleet to improve load factors
       and yields;

  (iv) obtaining an agreement in principle with their landlord to
       substantially reduce occupancy costs for the Debtors'
       corporate headquarters;

   (v) reducing pay of the Debtors' officers, directors, and
       other employees; and

  (vi) announcing the outsourcing of maintenance and reservations
       functions which is expected to generate approximately $20
       million in annual savings.

"The unfortunate reality is that the Debtors must now look to
ALPA for help in achieving their remaining, or at least a
significant part of, their cost-cutting goals," the Creditors
Committee states.  

While it acknowledges and is mindful of the immense sacrifices
being sought of the ALPA crewmembers, the Creditors Committee
believes that the future of the Debtors is plainly and
inextricably tied to the concessions provided under the 1113
Proposal.

                      Debtors Defend Motion

Melissa M. Hinds, Esq., at Baker & Daniels, in Indianapolis,
Indiana, asserts that ATA indisputably needs the relief sought in
the 1113 Proposal based on these facts:

    -- Without a new collective bargaining agreement with ALPA,
       ATA's current crewmember labor costs will increase by
       $4 million per month beginning October 1, 2005;

    -- Even under ALPA's last proposal, ATA's current crewmember
       labor costs will increase by almost $1 million per month
       beginning October 1, 2005;

    -- Either increase would hasten ATA's already perilous cash
       burn, and sound the death knell for ATA's efforts to raise
       necessary new investment; and

    -- Without that new investment, ATA cannot survive.

Ms. Hinds points out that ALPA failed to acknowledge that its
proposal would actually cause an immediate increase in ATA's
crewmember labor cost.  

The crewmembers are currently being paid in accordance with the
18% pay scale reduction that ALPA agreed to on an interim basis in
Letter of Agreement No. 38.  

Under ALPA's latest proposal, the scale reduction would change to
only 8%, providing crewmembers an immediate 10% pay rate increase.  
The cost to ATA of that increase, after offsetting a small savings
in the ALPA Proposal, would be almost $900,000 per month.

On the other hand, the 1113 Proposal would go back to the 20%
scale reduction that ALPA agreed to in January 2005 and extend it
on a long-term basis.  This change from the current interim 18%
reduction would result in roughly a $200,000 per month expense
reduction for ATA.  Counting other savings in the Proposal, ATA's
crewmember labor costs would decrease by about $700,000 per month
from current levels.

Frank Conway, chief financial officer of ATA, and Sean Frick,
chief restructuring officer of ATA, have filed affidavits with the
Court defending the Debtors' request.  Mr. Conway and Mr. Frick
concur that the labor concessions granted under the 1113 Proposal
are necessary to the Debtors' reorganization and for prospects of
acquiring additional capital.

It is not accurate to say that ALPA crewmembers' sacrifices have
been materially greater than other employees, according to Ms.
Hinds.

Ms. Hinds relates that employees of ATA other than cockpit
crewmembers have had an average salary increase of 14% since
September 11, 2001.  They had the Company match to their 401(k)
account suspended for 2005.  Also, they have had their medical
insurance premiums increase in each year.

In contrast, the crewmembers on average have seen a 38% increase
in their pay, taking into account the step increases and general
rate increases since September 11, 2001.  Since 2002 they have
also received a 3.6% Company match to their contributions to their
401(k) accounts plus a Company contribution to their CMPP
accounts.  The crewmembers continue to be covered under a premium
medical insurance program without contribution for individual or
dependent medical coverage after two years of employment.  Also,
of approximately 440 employees who will earn in excess of
$100,000 in 2005, approximately 400 of them will be the
crewmembers.

The accusation that ATA is trying to hide the fact that its 1113
Proposal generates $43.2 million in concessions in 2006 rather
than the $37.6 million is a complete red herring, Ms. Hinds tells
Judge Lorch.  ATA explained in the Motion and the supporting
declarations that its valuation did not include a value for a
2006 pay rate increase, because it focused on current costs, not
costs to be incurred in the future, Ms. Hinds says.  More
importantly, complete details on the costing of the Company
proposal were provided to ALPA during the negotiations.

It is clear that ALPA understood these details, Ms. Hinds
maintains.  In a statement reported by the Aviation Daily, "[t]he
union said the concessions would actually be worth $44 million a
year because the airline proposal would cancel pay increases
scheduled for next year," according to Ms. Hinds.

Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA
Holdings Corp. -- http://www.ata.com/-- is the nation's 10th  
largest passenger carrier (based on revenue passenger miles) and
one of the nation's largest low-fare carriers.  ATA has one of the
youngest, most fuel-efficient fleets among the major carriers,
featuring the new Boeing 737-800 and 757-300 aircraft.  The
airline operates significant scheduled service from Chicago-
Midway, Hawaii, Indianapolis, New York and San Francisco to over
40 business and vacation destinations.  Stock of parent company,
ATA Holdings Corp., is traded on the Nasdaq Stock Exchange.  The
Company and its debtor-affiliates filed for chapter 11 protection
on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868
through 04-19874).  Terry E. Hall, Esq., at Baker & Daniels,
represents the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
$745,159,000 in total assets and $940,521,000 in total debts.  
(ATA Airlines Bankruptcy News, Issue No. 32; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


ATKINS NUTRITIONALS: Files Plan & Disclosure Statement in New York
------------------------------------------------------------------
Atkins Nutritionals, Inc., and its debtor-affiliates delivered
their Joint Plan of Reorganization and an accompanying Disclosure
Statement to the U.S. Bankruptcy Court for the Southern District
of New York on Aug. 26, 2005.  

The Plan provides for the substantive consolidation of the Debtors
and the transfer of ownership and control of the reorganized
company to Atkins' secured creditors.  

On the Plan's Effective Date, Reorganized Atkins Holdings is
authorized to issue the New Common Interests without any further
action by holders of Claims or Equity Interests.

The New Common Interests will consist of 15 million authorized
shares or units, as applicable, of Reorganized Atkins Holdings,
10 million of which will be issued and distributed to the holders
of Allowed First Lien Claims and Allowed Second Lien Claims
pursuant to Article IV of the Plan.  The remainder of the
authorized New Common Interests will be reserved for future
purposes, as determined by the Board of Reorganized Atkins
Holdings, consistent with its New Organizational Documents.

The Plan groups claims and interests into six classes.

Unimpaired Claims consist of:

   1) Priority Non-Tax Claims, totaling approximately $40,000,
      which will be paid in full in Cash together with post-
      petition interest; and

   2) Other Secured Claims, totaling approximately $720,000, which
      will receive five options in the treatment of their Claims.
      Allowed Other Secured Claims will either be:   

      a) reinstated or paid in full in cash, together with post-
         petition interest, or

      b) satisfied by the surrender of the underlying collateral,
         or

      c) otherwise rendered unimpaired in accordance with Section
         1124 of the Bankruptcy Code, or

      d) accorded a treatment, including deferred cash payments,
         as consistent with Section  1129(b) of the Bankruptcy
         Code, or

      e) paid  at other terms as the Debtors and the Holders of
         Allowed Other Secure Claims may agree.

Impaired Claims consist of:

   1) First Lien Claims, totaling approximately $216.4 million,
      to receive their Ratable Proportion of the New Tranche A
      Senior Notes and 8,400,000 shares or units of the New Common
      Interests; and

   2) Second Lien Claims, to receive their Ratable Proportion of
      1,600,000 shares or units of the New Common Interests and
      the New CVR Interests.

The Plan delivers nothing to General Unsecured Creditors.  General
Unsecured Creditors will not be entitled to and will not receive
or retain any property or interest in property on account of those
Claims and on the Effective Date, according to the Plan, and the
Debtors will be discharged from any obligations to holders of
General Unsecured Claims.  

Old Equity Interests will be cancelled on the Effective Date and
the holders of Old Equity Interests will not be entitled to and
will not receive or retain any property or interest in property on
account of those interests.

A full-text copy of the Disclosure Statement and Plan is available
for a fee at:

   http://www.researcharchives.com/bin/download?id=050829021507

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


ATKINS NUTRITIONALS: Gets Final Court Nod on DIP Financing Access
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
granted Atkins Nutritionals, Inc., and its debtor-affiliates,
final approval to:

   a) obtain secured post-petition financing on a superpriority
      basis pursuant to the terms and conditions of the Senior
      Secured DIP Credit Agreement entered into between the
      Debtors and UBS AG, Stamford Branch as the DIP Agent for
      itself and on behalf of the DIP Lenders;

   b) grant adequate protection to UBS AG and the DIP Lenders
      and authorize the Debtors to perform the obligations
      pursuant to the DIP Credit Agreement and the DIP Facility
      Documents; and

   c) vacate and modify the automatic stay imposed by Section
      362 of the Bankruptcy Code to the extent necessary to
      implement and effectuate the terms and provisions of
      the DIP Facility Documents and Court's Final Order.

                DIP Financing & Use of DIP Loans

The Court authorizes the Debtors to obtain up to $25 million in
aggregate amount of the DIP Financing, including a sub-limit for
letters of credit having a maximum drawing amount of not more than
$5 million, subject to the limitations on availability and
reserves pursuant to the DIP Credit Agreement.  The DIP Loans will
mature on April 30, 2006.

The Debtors will use the proceeds of the DIP Loan for the
continued operation of their businesses, to maintain business
relationships with their vendors, suppliers and customers, to pay
for employees' payroll and finance their operations.

                       Adequate Protection
               & Modification of the Automatic Stay

The Debtors will grant UBS AG and the DIP Lenders continuing,
valid, binding, enforceable, and automatically perfected post-
petition security interests and liens on all of the Debtors' pre-
petition and post-petition assets.

The automatic stay imposed by Section 362(a) of the Bankruptcy
Code is modified to permit:

   a) the granting of the Adequate Protection Liens and the
      Adequate Protection Superpriority Claims and to perform
      other acts as the UBS AG may request to assure the
      perfection and priority of the Adequate Protection Liens,

   b) the granting of the DIP Liens and the DIP Superpriority
      Claim, and to perform other acts as the DIP Agent may
      request to assure the perfection and priority of the DIP
      Liens, and

   c) to implement the terms of the Court's Final Order.

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


AXEDA SYSTEMS: Posts $1.5 Million Net Loss in Second Quarter
------------------------------------------------------------
Axeda Systems Inc. reported financial results for the quarter
ended June 30, 2005.  

The Company reported a net loss of $1,549,000 for the quarter
ended June 30, 2005 compared with a net loss of $2,424,000 for the
same period in 2004.  As of June 30, 2005 we had approximately
$1.2 million in cash and cash equivalents.

                          Asset Sale

On June 29, 2005, the Company entered into a non-binding letter of
intent to sell its Axeda DRM system business and related assets to
JMI Equity Fund V, L.P., a Baltimore and San Diego-based private
equity firm.  The letter of intent contemplates that JMI will
purchase substantially all of the assets of its Axeda DRM system
business, with the exception of its Supervisor product family
business, for a total of $7,000,000 in cash plus the assumption of
certain liabilities.  In addition, JMI committed to provide up to
a $1,500,000 bridge loan to Axeda, of which $600,000 was advanced
in July 2005.  The bridge loan bears interest at the rate of 7%
per annum and is secured by the assets of the Company's Axeda DRM
system business.

                      Sublease Agreements

On July 11, 2005 Axeda entered into a Letter of Intent to sublease
14,711 square feet of space in Foxborough, Massachusetts, which is
in the same industrial complex as its current offices.  The
Company is currently finalizing the sublease agreement for this
space, or Sublease Agreement, which currently proposes annual rent
of $125,000 plus operating expenses, for the term of September 1,
2005 to March 31, 2007.

In July 2005, Axeda entered into a Sublease Termination Agreement
for its offices in Mansfield, Massachusetts under which it will
surrender these premises on, or before, October 1, 2005 or the
Termination Date, rather than the current lease termination date
of July 2007. This termination agreement provided for no rental
liability from July 1, 2005 to the Termination Date.  The security
deposit of $150,000 was reduced by $100,000 upon the signing of
the Termination Agreement, and will be reduced by another $25,000
upon a signed lease for alternate space, and the final $25,000
will be returned after surrendering the premises and the final
inspection. The current monthly base rent for this office is
$26,000, plus $14,000 monthly for operating expenses.  As a result
this lease termination, the Company expects to amortize in full
the recorded amount of leasehold improvements made to the
Mansfield office as of June 30, 2005 of $400,000 in the third
quarter of 2005.

With the finalizing of the Sublease Agreement for its office in
Foxborough, Massachusetts the Company's lease commitments,
including rent, utilities and taxes, will be reduced by
approximately $608,000 over the remaining lease term, compared to
the Mansfield, Massachusetts sublease.

If the sale of the Axeda DRM system business to JMI is
consummated, substantially all of Axeda's revenue will be derived
from its remaining assets, the Supervisor product family business.
The Company does not have experience operating its business with
this single products family, however, management does not expect
that the revenues to be generated from the Supervisor product
family business will be sufficient to allow the Company to
continue to operate its business as a going concern.

Axeda has recently received some inquiries from third parties who
have indicated that they may be interested in acquiring the
Supervisor product family business.  The Company would consider
selling the Supervisor product family business if it were offered
favorable terms.  However, there can be no assurances that a
suitable acquirer will be identified and that Axeda could
negotiate a favorable price and terms for such transaction.

                    Laurus Notes Default

As of August 22, 2005, the Company was in default under the Laurus
Secured Convertible Term Note issued to Laurus Master Fund, Ltd,
or Laurus, for failing to pay interest due under the Note for May,
June, July, and August 2005, as well as the July and August 2005
principal payments when due.

Article IV of the Note defines "Events of Default" as the failure
to pay any installment of principal or interest within three days
of the due date, and that upon the occurrence and continuance of
an Event of Default, Laurus may make all sums of principal,
interest and other fees then remaining unpaid immediately due and
payable.  In the event of such an acceleration, the amount due and
owing to Laurus shall be 120% of the outstanding principal amount,
plus accrued and unpaid interest and fees.  In addition, the
registration rights agreement entered into in connection with the
Note states that if the Company's shares are not traded on a
"Trading Market", which does not include the "Pink Sheets", where
the Company's shares of common stock currently trade, then Axeda
is obligated to issue certain warrants to Laurus, and failure to
do so also constitutes a default under the Note.

In a Letter Agreement dated July 8, 2005 between the Company and
Laurus, Laurus agreed to accept payment in full in cash of the
outstanding principal and accrued and unpaid interest
simultaneously with the closing of the JMI Asset Sale, in full
satisfaction of the Company's obligations.

                       Nasdaq Delisting

As reported in the Troubled Company Reporter on July 12, 2005,
Axeda Systems Inc. reported that its common stock was delisted
from The Nasdaq SmallCap Market effective with the opening of
business on July 7, 2005.

This follows the Company's announcement that a Nasdaq Listing  
Qualifications Panel had approved the Company's request for
continued listing of its common stock on The Nasdaq SmallCap
Market, via an exception from Nasdaq's stockholders' equity and
minimum bid price requirements.  While the Company was able to
demonstrate compliance with the stockholders' equity requirement
in accordance with the terms of the exception, it failed to
achieve a $1 stock price by June 30, 2005, as required by the
Panel's decision.

The Company's quotation for its common stock now appears in the  
"Pink Sheets."  The trading symbol for its common stock has
changed from XEDAC to XEDA effective with the removal from NASDAQ.  
The Company's common stock may also be quoted in the future on the  
OTC Bulletin Board provided a market maker files the necessary
application with the NASD and such application is cleared.  The  
Company will disclose further trading venue information for its
common stock when such information becomes available.

                     Bankruptcy Warning

If sales of both the Axeda DRM system business and the Supervisor
product family business are consummated, the Company would expect
to use the proceeds to pay its creditors, including Laurus.  To
the extent that not all of its obligations to creditors were
satisfied, management indicates that Axeda may elect to file for
bankruptcy, or be forced into bankruptcy.

Axeda Systems Inc. -- http://www.axeda.com/-- is the world's  
leading provider of Device Relationship Management (DRM) software
and services.  The Company's flagship product, the Axeda(R) DRM
system helps manufacturing and service organizations increase
revenue while lowering costs, by proactively monitoring and
managing devices deployed at customer sites around the world.  
Axeda DRM is a highly scalable, field-proven, and comprehensive
remote management solution that leverages its patented Firewall-
Friendly(TM) technology to enable Machine-to-Machine (M2M)
communication by utilizing the public Internet.  Axeda customers
include Global 2000 companies in many markets including Medical
Instrument, Enterprise Technology, Office and Print Production
Systems, and Industrial and Building Automation industries.  Axeda
has sales and service offices in the U.S. and Europe, and
distribution partners worldwide.  

                     Going Concern Doubt

KPMG LLP raised substantial doubt about Axeda Systems Inc.'s
ability to continue as a going concern after it audited the  
Company's 2004 financials.  KPMG stated that the Company's
recurring losses from operations and negative cash flows from
operations since inception triggered that doubt.  

"Management has developed and begun to implement a plan to address
these issues and allow the Company to continue as a going concern
through at least the end of 2005," the Company said in its Annual   
Report.  "This plan includes fundraising from new and current
investors, continued cost-cutting, and stabilizing and growing our
revenue streams.  Although we believe the plan will be realized,
there is no assurance that these events will occur."


BELDEN & BLAKE: Buying Back 8.75% Senior Secured Notes for Cash
---------------------------------------------------------------
Belden & Blake Corporation commenced a tender offer to purchase
for cash any and all of its outstanding 8.75% Senior Secured Notes
due 2012 in the aggregate principal amount of $192,500,000.

Belden & Blake is offering to purchase the outstanding Securities
at 101% of the principal amount tendered from all holders of
Securities who validly tender their Securities at or prior to 9:00
a.m., New York City time, on Monday, Sept. 26, 2005, the
expiration of the Tender Offer.  Holders who validly tender their
Securities at any time during the tender offer period will also be
paid accrued and unpaid interest up to, but not including, the
applicable date of payment for such Securities.

On Aug. 16, 2005, Capital C Energy Operations, LP, the Company's
parent, was acquired by certain institutional funds managed by
EnerVest Management Partners, Ltd., a Houston-based privately held
oil and gas operator and institutional funds manager.  Because the
acquisition resulted in a change of control of the Company, the
indenture governing the Securities requires the Company to make
the Tender Offer.

The Tender Offer is conditioned upon compliance of the Tender
Offer with all applicable laws.  The purchase price for Securities
tendered in the Tender Offer will be paid by the Company using
borrowings under its new credit facility, cash on hand and
subordinated loans or equity investments provided by the Funds.

Requests for documentation may be directed to Global Bondholder
Services Corporation, at (212) 430-3774 (collect; for banks and
brokers) or (866) 795-2200 (toll free; for all other than banks
and brokers).

Belden & Blake engages in the exploitation, development,
production, operation and acquisition of oil and natural gas
properties in the Appalachian and Michigan Basins (a region which
includes Ohio, Pennsylvania, New York and Michigan).  Belden &
Blake is a subsidiary of Capital C Energy Operations, LP, an
affiliate of Carlyle/Riverstone Global Energy and Power
Fund II, L.P.

                         *     *     *

As reported in the Troubled Company Reporter on Apr. 7, 2005,
Moody's downgraded Belden & Blake's senior implied rating from B3
to Caa1 and its note rating from B3 to Caa2.  The outlook is
changed to negative.  The downgrade, which concludes Moody's
review that commenced on December 28, 2004, is a result of Moody's
review of the company's 10-K which confirmed the credit
deterioration through a combination of:

   * a greater than expected reserve revision;

   * poor capital productivity evidenced by drillbit F&D of
     $62.23/boe (excluding revisions) and only replacing 15% of
     production through extensions and discoveries;

   * very high leverage on the proved developed (PD) reserves of
     $7.64/boe;

   * B&B's very high full cycle costs that are unsustainable long-
     term;  and

   * the free cash flow drain from currently out-of-the-money
     hedging that could otherwise be used for debt repayment or
     reinvestment.

The notes are notched down from the senior implied rating due a
combination of:

   * asset deterioration which impacts the coverage for the
     bondholders;

   * the increased use of the credit facilities (including L/C's)
     to support underwater hedging; and

   * the carveouts in the indenture that could permit additional
     secured debt to be layered in ahead of the notes.


BIG 5: Nasdaq Extends Financial Filing Deadline Until Tomorrow
--------------------------------------------------------------
The Nasdaq Listing Qualifications Panel has granted Big 5 Sporting
Goods Corporation's (Nasdaq: BGFVE) request to extend the deadline
for the Company to file its Annual Report on Form 10-K for fiscal
2004 and its Quarterly Reports on Form 10-Q for the first quarter
and second quarter of fiscal 2005 and to continue the listing of
the Company's common stock on the Nasdaq National Market pending
those filings.

The Panel has granted the Company an extension until tomorrow,
Aug. 31, 2005, to file its fiscal 2004 Form 10-K and an extension
until September 30, 2005 to file its first quarter and second
quarter fiscal 2005 Forms 10-Q.  These dates are an additional
extension from the August 12, 2005 extension date previously
granted by the Panel for the Company to file its fiscal 2004 Form
10-K and its first quarter fiscal 2005 Form 10-Q.  As previously
announced, the Company is not in compliance with Nasdaq
requirements for continued listing as a result of its failure to
file with the Securities and Exchange Commission its fiscal 2004
Form 10-K and its first quarter and second quarter fiscal 2005
Forms 10-Q.

In granting this additional extension, the Panel advised the
Company that in the event that the Company is unable to file its
fiscal 2004 Form 10-K by August 31, 2005, no further requests for
extension to file the Form 10-K would be considered.  Work on the
review and associated audit of the Company's fiscal 2004 Form 10-K
has been substantially completed, and while no assurances can be
given, the Company expects to be able to file its Form 10-K by
August 31, 2005.  The Company also expects that the review of its
first quarter and second quarter fiscal 2005 Forms 10-Q will be
completed, and that those reports will be filed, soon after the
Form 10-K is filed.

The Company also received a notice on August 25, 2005 of a
determination by Nasdaq's Listing Qualifications Staff that it
fails to comply with Nasdaq listing standards set forth in Nasdaq
Marketplace Rule 4310(c)(14) due to the delayed filing of its
second quarter fiscal 2005 Form 10-Q with the SEC and that this
deficiency is an additional basis for delisting its securities
from the Nasdaq National Market.  The Company filed a Form 12b-25
with the SEC on August 15, 2005 to report that it was unable to
file its second quarter fiscal 2005 Form 10-Q by the August 12,
2005 deadline.  The Company previously announced that it had
notified Nasdaq of its inability to timely file the second quarter
fiscal 2005 Form 10-Q and had requested an extension of time to
file this Form 10-Q.  As discussed, the Panel considered this
request and granted the Company an extension to September 30, 2005
to file its second quarter fiscal 2005 Form 10-Q.

In the event that the Company is unable to file its fiscal 2004
Form 10-K by August 31, 2005, or its first quarter and second
quarter fiscal 2005 Forms 10-Q by September 30, 2005, the
Company's shares may be delisted from the Nasdaq National Market.

Big 5 is a leading sporting goods retailer in the United States,
operating 311 stores in 10 states under the "Big 5 Sporting Goods"
name.  Big 5 provides a full-line product offering in a
traditional sporting goods store format that averages 11,000
square feet.  Big 5's product mix includes athletic shoes, apparel
and accessories, as well as a broad selection of outdoor and
athletic equipment for team sports, fitness, camping, hunting,
fishing, tennis, golf, snowboarding and in-line skating.

                       *     *     *

                           Waiver

As reported in the Troubled Company Reporter on Aug. 17, 2005,
Big 5 Sporting Goods Corporation obtained an extension to
Aug. 31, 2005, from the lenders under its financing agreement, to
deliver its audited financial statements for fiscal 2004 as
required by its financing agreement.  While the Company expects to
be able to deliver these audited financial statements by then, if
the Company is not able to do so, it intends to seek another
extension, although there is no assurance that one will be
granted.  The Company is in compliance with all of the covenants
contained in its financing agreement.


BUFFALO MOLDED: Files Liquidating Plan & Disclosure Statement
-------------------------------------------------------------
Buffalo Molded Plastics, Inc., dba Andover Industries, delivered
its Chapter 11 Plan of Liquidation and accompanying Disclosure
Statement to the U.S. Bankruptcy Court for the Western District of
Pennsylvania, Erie Division.  

The Debtor's Plan sets forth the process by which Buffalo proposes
to liquidate and distribute its remaining assets to creditors.  As
previously reported, the Company sold substantially all of its
assets to Plastech Engineered Products, Inc., for an undisclosed
amount.

On the Effective Date of the Plan, all right, title and interest
in all of the assets of the Debtor's estate will be assigned to a  
Liquidating Trustee.  The Trustee will be responsible for the
liquidation of all remaining assets.  The Trustee will also have
the authority to commence, continue, preserve, litigate and settle
causes of action.

Pursuant to the Plan, administrative claim holders, Comerica Bank
and PMT will be paid in full.  However, if there is an
insufficient proceeds from the liquidation of the Debtor's assets
to pay the three classes, payment made to administrative claim
holders will be pro rated.

General unsecured creditors will share pro rata from a $240,000
carve-out from the proceeds of the sale of the Debtor's assets.  
They will also share in whatever's left after the administrative
claim holders, Comerica Bank and PMT are paid in full.

Equity interest holders take nothing under the Plan.

The Court will convene a hearing to discuss the adequacy of the
information contained in Buffalo's Disclosure Statement on
Oct. 20, 2005, at 1:30 p.m.  Objections to the Disclosure
Statement, if any, must be filed by Oct. 13.

Headquartered in Andover, Ohio, Buffalo Molded Plastics, Inc., dba
Andover Industries, -- http://www.andoverplastics.com/--   
manufactures rocker panels, grilles, pillars and body side molding
components for General Motors Corp. and DaimlerChrysler.  The
Company filed for chapter 11 protection on Oct. 21, 2004 (Bankr.
W.D. Pa. Case No. 04-12782).  David Bruce Salzman, Esq., at
Campbell & Levine, LLC, represents the Debtor in its restructuring
efforts.  When the Debtor filed  for protection from its
creditors, it estimated assets and debts in the $10 million to $50
million range.  David W. Lampl, Esq., at Leech Tishman Fuscaldo &
Lampl, LLC, represents the Official Committee of Unsecured
Creditors in the Debtor's chapter 11 case.


CAPITAL BEVERAGE: June 30 Balance Sheet Upside-Down by $4.8 Mil.
----------------------------------------------------------------
Capital Beverage Corporation reported financial results for the
quarter ended June 30, 2005.  The Company had a $726,736 net loss
for the quarter ended June 30, 2005 compared with a net loss of
$38,859 for the same period of 2004

At June 30, 2005, the Company's primary sources of liquidity were
$120,044 in cash, $417,239 in accounts receivable and $1,463,269
in inventories.

Cash provided by operations for the six months ended June 30, 2005
was $840,037.  This was primarily due to a decrease in beer and
beverage inventories and accounts receivable of $634,069 and
281,553, respectively and an increase in accounts payable of
$947,370, offset by the Company's net loss for the six months
ended June 30, 2005 of $1,276,846.

Cash used in financing activities resulted primarily from paying
down revolving loans of $865,176 and the decrease in Capital's
cash overdraft of $278,171, offset primarily by proceeds from a
loan payable of $350,531.

Working capital deficiency increased from $4,915,762 at December
31, 2004 to $5,950,738 at June 30, 2005, due primarily to the net
loss incurred for the six months.  The Company also reported an
accumulated deficit of $10,776,155 at June 30, 2005.

                       Revolving Loan

The Company has a revolving loan with Entrepreneur Growth Capital,
LLC.  The loan limit is $2,500,000 and carries an interest rate of
prime plus 2%.  The Company could be materially adversely affected
if there is a significant rise in interest rates, due to the fact
that this revolving loan carries a rate of prime plus 2%.  The
loan is collateralized by the Company's accounts receivable,
inventory, pledged property, and distribution rights.  The        
outstanding balance was $1,142,180 at June 30, 2005.

                      Going Concern Doubt

Sherb & Co., LLP, expressed substantial doubt about Capital
Beverage's ability to continue as a going concern after it audited
the Company's financial for the year ended Dec. 31, 2004.  The
auditing firm points to the Company's significant losses.

The Company's continuation as a going concern is dependent upon
its ability to ultimately attain profitable operations, generate
sufficient cash flow to meet its obligations, and obtain
additional financing as may be required.

Capital Beverage Corporation engages in the wholesale distribution
of beer and malt liquor products throughout the state of New York.
The company distributes various brands, including Brigade, Brigade
Light, Brigade Ice, Brigade N/A, Prime Time Lager, Prime Time Malt
Liquor.  Its wholly owned subsidiary, CAP Communications, Ltd.,
markets domestic and long distance prepaid telephone calling cards
to distributors and general public.  Capital Beverage was formed
in 1995 and is based in Brooklyn, New York.

At June 30, 2005, Capital Beverage Corporation's balance sheet
showed a $4,786,113 stockholders' deficit, compared to a
$3,509,266 deficit at Dec. 31, 2004.


CATHOLIC CHURCH: Court Rules Parish Property Belongs to Spokane
---------------------------------------------------------------
The Hon. Patricia C. Williams of the United States Bankruptcy
Court for the Eastern District of Washington finds that the real
and personal properties that the Diocese of Spokane listed on its
schedules as "property held for another" actually constitute
property of the Diocese's estate.

The Committee of Tort Litigants did not believe that all entities
affiliated with or related to the Diocese of Spokane, including
custodial, endowment, insurance, and monetary funds, parishes, and
schools, are legal entities and properties separate from, or not
belonging to, the Diocese.  Rather, the Committee argues, the
Diocese-Related Entities are operating divisions of the Diocese,
and therefore, are real or personal property of
Spokane.

The Litigants Committee identified 154 real properties located in
Washington that are supposedly belonging to Diocese-Related
Entities but are, in fact, under the Diocese's complete control
and domination:

   1.   All Saints School in Spokane, WA
   2.   Assumption Church in Spokane, WA
   3.   Assumption Church in Walla Walla, WA
   4.   Bishop White Seminary in Spokane, WA
   5.   Cataldo Catholic School in Spokane, WA
   6.   Cathedral of Our Lady of Lourdes in Spokane, WA
   7.   Catholic Cemeteries of Spokane
   8.   Catholic Cemeteries - Holy Cross in Spokane, WA
   9.   Catholic Charities, Inc. in Spokane, WA
   10.  Catholic Newman Center in Cheney, WA
   11.  Comunidad Hispana De Spoke in Spokane, WA
   12.  De Sales Prep High School in Walla Walla, WA
   13.  Hispanic Ministry in Oroville, WA
   14.  Hispanic Ministry of Our Lady of Valley in Okanogan, WA
   15.  Holy Family Church in Clarkston, WA
   16.  Holy Family School in Clarkston, WA
   17.  Holy Ghost Church in Valley, WA
   18.  Holy Rosary Church in Pomeroy, WA
   19.  Holy Rosary Church in Rosalia, WA
   20.  Holy Rosary Church in Tonasket, WA
   21.  Holy Rosary Parish in Tonasket, WA
   22.  Holy Trinity Church in Washtucna, WA
   23.  Immaculate Conception - Colville in Colville, WA
   24.  Immaculate Conception - Davenport in Davenport, WA
   25.  Immaculate Conception - Oroville in Oroville, WA
   26.  Immaculate Conception - Republic in Republic, WA
   27.  Immaculate Conception Church in Colville, WA
   28.  Immaculate Heart Retreat Center in Spokane, WA
   29.  La Comunidad Catolica De Spokane in Spokane, WA
   30.  Mary Queen of Heaven Church in Spokane, WA
   31.  Mary Queen of Heaven Church in Sprague, WA
   32.  Morning Star Boys Ranch in Spokane, WA
   33.  Our Lady of Fatima in Spokane, WA
   34.  Our Lady of Fatima Church in Spokane, WA
   35.  Our Lady of Fatima Parish in Spokane, WA
   36.  Our Lady of the Lake in Suncrest, WA
   37.  Our Lady of the Lake Church in Suncrest, WA
   38.  Our Lady of Lourdes in West End, WA
   39.  Our Lady of Lourdes Cathedral in Spokane, WA
   40.  Our Lady of Lourdes West in Fruitland, WA
   41.  Our Lady of Perpetual Help in St. John, WA
   42.  Our Lady of the Valley in Okanogan, WA
   43.  Parish Services Office in Spokane, WA
   44.  Pure Heart of Mary Church in Northport, WA
   45.  St. Agnes Church in Ritzville, WA
   46.  St. Aloysius Church in Spokane, WA
   47.  St. Aloysius School in Spokane, WA
   48.  St. Ambrose in Lind, WA
   49.  St. Ambrose Church in Lind, WA
   50.  St. Ann Church in Medical Lake, WA
   51.  St. Anne Church in Spokane, WA
   52.  St. Anne's Children & Family Center in Spokane, WA
   53.  St. Anthony - Newport in Newport, WA
   54.  St. Anthony Church in Newport, WA
   55.  St. Anthony Church in Spokane, WA
   56.  St. Anthony Parish - Newport in Newport, WA
   57.  St. Anthony's Altar Society in Newport, WA
   58.  St. Augustine Church in Spokane, WA
   59.  St. Bernard in Ione, WA
   60.  St. Bernard Church in Ione, WA
   61.  St. Boniface in Uniontown, WA
   62.  St. Boniface Church in Uniontown, WA
   63.  St. Catherine Church in Oakesdale, WA
   64.  St. Charles in Spokane, WA
   65.  St. Charles Church in Spokane, WA
   66.  St. Francis Assisi - Harrington in Harrington, WA
   67.  St. Francis Assisi - Walla Walla in Walla Walla, WA
   68.  St. Francis Assisi Church in Spokane, WA
   69.  St. Francis of Assisi Church in Walla Walla, WA
   70.  St. Francis Xavier in Spokane, WA
   71.  St. Francis Xavier Church in Spokane, WA
   72.  St. Gall Church in Colton, WA
   73.  St. Genevieve in Twisp, WA
   74.  St. Genevieve Church in Twisp, WA
   75.  St. John Vianney in Spokane Valley, WA
   76.  St. John Vianney - Seminary in Spokane, WA
   77.  St. John Vianney Church in Spokane Valley, WA
   78.  St. John Vianney School in Spokane, WA
   79.  St. Joseph in Spokane, WA
   80.  St. Joseph - Colbert in Colbert, WA
   81.  St. Joseph - Dayton in Dayton, WA
   82.  St. Joseph - Jump Off Joe in Valley, WA
   83.  St. Joseph - Metaline Falls in Metaline Falls, WA
   84.  St. Joseph - Odessa in Odessa, WA
   85.  St. Joseph Church in Colbert, WA
   86.  St. Joseph Church in Lacrosse, WA
   87.  St. Joseph Church in Metaline Falls, WA
   88.  St. Joseph Church in Odessa, WA
   89.  St. Joseph Church in Omak, WA
   90.  St. Joseph Church in Otis Orchards, WA
   91.  St. Joseph Church in Rockford, WA
   92.  St. Joseph Church in Spokane, WA
   93.  St. Joseph's Cemetery in Spokane, WA
   94.  St. Joseph's Church in Dayton, WA
   95.  St. Jude Church in Usk, WA
   96.  St. Mark Church in Waitsburg, WA
   97.  St. Marks in Dayton, WA
   98.  St. Marks in Waitsburg, WA
   99.  St. Mary Church in Spokane Valley, WA
   100. St. Mary Mission in Omak, WA
   101. St. Mary of the Rosary in Chewelah, WA
   102. St. Mary of the Rosary Church in Chewelah, WA
   103. St. Mary Presentation in Deer Park, WA
   104. St. Mary Presentation Church in Deer Park, WA
   105. St. Mary's Parish in Spokane Valley, WA
   106. St. Michael - Reardan in Reardan, WA
   107. St. Michael Church in Reardan, WA
   108. St. Michael's in Inchelium, WA
   109. St. Michael's Mission in Inchelium, WA
   110. St. Pascal Church in Spokane, WA
   111. St. Patrick - Colfax in Colfax, WA
   112. St. Patrick - Pasco in Pasco, WA
   113. St. Patrick Church in Colfax, WA
   114. St. Patrick Church in Pasco, WA
   115. St. Patrick Church in Spokane, WA
   116. St. Patrick Church in Walla Walla, WA
   117. St. Patrick Parish - Walla Walla in Walla Walla, WA
   118. St. Patrick's Church in Curlew, WA
   119. St. Paul the Apostle - Eltopia in Eltopia, WA
   120. St. Peter Church in Spokane, WA
   121. St. Phillip Benizi in Ford, WA
   122. St. Phillip's Villa in Spokane, WA
   123. St. Rose of Lima - Cheney in Cheney, WA
   124. St. Rose of Lima in Keller, WA
   125. St. Rose of Lima Church in Cheney, WA
   126. St. Thomas Moore Parish in Spokane, WA
   127. St. Thomas More in Pullman, WA
   128. St. Thomas More Church in Spokane, WA
   129. St. Thomas More School in Spokane, WA
   130. St. Vincent in Connell, WA
   131. St. Vincent Church in Connell, WA
   132. St. Vincent Church (Basin City Mission) in Connell, WA
   133. St. Vincent De Paul Parish in Connell, WA
   134. St. Vincent Thrift Store in Dayton, WA
   135. Sacred Heart - Brewster in Brewster, WA
   136. Sacred Heart - Nespelem in Nespelem, WA
   137. Sacred Heart - Othello in Othello, WA
   138. Sacred Heart - Pullman in Pullman, WA
   139. Sacred Heart - Valley in Springdale, WA
   140. Sacred Heart - Wilbur in Wilbur, WA
   141. Sacred Heart Church in Brewster, WA
   142. Sacred Heart Church in Kettle Falls, WA
   143. Sacred Heart Church in Othello, WA
   144. Sacred Heart Church in Pullman, WA
   145. Sacred Heart Church in Spokane, WA
   146. Sacred Heart Church in Springdale, WA
   147. Sacred Heart Church in Tekoa, WA
   148. Sacred Heart Church in Wellpinit, WA
   149. Sacred Heart Church in Wilbur, WA
   150. Sacred Heart Parish - Nespelem in Nespelem, WA
   151. Sacred Heart Parish - Othello in Othello, WA
   152. Walla Walla Catholic Schools in Walla Walla, WA
   153. Walla Walla Schools in Walla Walla, WA
   154. Wenning Estate in Spokane, WA

The Litigants Committee also identified personal properties
ostensibly claimed by the Diocese-Related Entities or located at,
or on, the Disputed Real Properties, which are under the Diocese's
complete control and domination.  The Disputed Personal
Properties includes appurtenances to the Disputed Real Properties,
furniture, books, relies, artwork, cash, bank accounts,
investments, trusts, estates, balances in Diocesan Deposit & Loan
Funds, endowment funds, and custodial funds.  In particular, the
Disputed Personal Properties include:

A. Custodial funds

   1.   Baronti Church Fund
   2.   Catholic Church U S
   3.   Guatemala Maintenance & Legal Fund
   4.   Mass Stipends
   5.   Nelson Property/Fr. Hein
   6.   Pension Plan & State Industrial Funds
   7.   Region XII-Youth Ministry
   8.   St. Michael's Mission Fund
   9.   Sprietzer - Cash Invested Fund
   10.  Society for the Propagation of Faith
   11.  Special Cost Reserve
   12.  Tri. Conf. Ret. Program
   13.  World Mission Collection

B. Endowment funds

   1.   Guse Trust for the Poor
   2.   Mater Cleri Fund
   3.   Special People Fund
   4.   Walla Walla Orphanages

C. Other personal properties

   1.   Campbell Estate in Walla Walla, WA
   2.   Spokane Catholic Investment Trust in Spokane, WA
   3.   Sprietzer Estate in Walla Walla, WA
   4.   Sprietzer Estate/DeSales Prep in Walla Walla, WA
   5.   Sprietzer Estate/St. Patrick Church in Walla Walla, WA
   6.   Self Insurance Fund in Spokane, WA

Spokane has not scheduled the Disputed Real Property or the
Disputed Personal Property as assets of the estate.

                        Court's Opinion

Judge Williams grants the Committee of Tort Litigants' request for
partial summary judgment.

Judge Williams holds that, as authorized by the Revised Code of
Washington 24.12, et seq., an express trust was created whereby
the Bishop, a natural person, holds legal title to the Disputed
Real Property in trust for the benefit of the Diocese who holds
the beneficial interest.

There are disputed material facts regarding the nature of the
parishes and the other members of the diocesan family, Judge
Williams points out.  For purposes of the Court's decision, it has
been assumed that the Diocese and other defendants are correct in
their contention that the parishes and other members of the
diocesan family have the legal capacity to hold the beneficial
interest under a trust.  

There are also disputed material facts regarding the nature and
extent of the Diocese's interest under the state law in certain
cash and investment accounts as well as other personal property.  
The Court's decision does not address that issue, Judge Williams
explains.

According to Judge Williams, the matter is not an intra-church
dispute.  Hence, the legal analysis differs.  Judge Williams
maintains that the issue is a purely secular dispute between
creditors and a bankruptcy debtor, albeit one which is a religious
organization.

"It is not a violation of the First Amendment to determine the
nature and extent of the [Diocese's] interest in property by
application of state law rather than internal church doctrine,"
Judge Williams says.

Judge Williams denies the request of the Association of Parishes
to dismiss the complaint for lack of standing and lack of
jurisdiction.

Judge Williams finds that the Tort Litigants Committee has
standing to investigate the Diocese's assets and any other matters
relevant to the reorganization case.

"The right to investigate the financial affairs of the debtor,
including the assets of the estate, would have limited usefulness
if a committee were not empowered to disagree with the debtor's
characterization of its assets and bring that disagreement to the
Bankruptcy Court for resolution," Judge Williams says.

The matter is also a core proceeding relevant to the bankruptcy
case.  Judge Williams notes that the adversary proceeding has been
repeatedly likened to a "turnover action," as much of the disputed
property is in the possession of the non-debtor defendants.  
Requests to "turnover" property of the estate are core proceedings
under 28 U.S.C. Section 157(2)(E).

The Diocese's cross-motion for summary judgment is likewise
denied.

A full-text copy of the Bankruptcy Court's Memorandum Opinion
dated Aug. 26, 2005, is available at no charge at:

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

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


CATHOLIC CHURCH: Tucson Wants Four Tort Claim Settlements Approved
------------------------------------------------------------------
The Diocese of Tucson asks the U.S. Bankruptcy Court for the
District of Arizona to approve stipulations resolving Claim Nos.
64, 65, 207 and 208.

Susan G. Boswell, Esq., at Quarles & Brady Streich Lang LLP, in
Tucson, Arizona, relates that the holders of Claim Nos. 64, 65,
207 and 208 are plaintiffs in actions filed in the Superior Court
of Pima County, Arizona, which were removed from the State Court
and are presently pending before the Arizona Bankruptcy Court.

Ms. Boswell notes that Tucson's confirmed Plan of Reorganization
provides for minimum initial funding of Settlement Trust, and for
minimum distributions to be made to the holders of Allowed Tort
Claims.  A Settling Tort Claimant will be entitled to an Initial
Distribution Amount for the Tier in which the Tort Claimant's
Tort Claim is placed.  The distribution will be made on the later
of funding of the Settlement Trust or entry of a Final Order
Allowing the Tort Claim.

The Initial Distribution Amount is only the initial distribution
to be made to a Settling Tort Claimant and does not represent the
value of the Tort Claim.  If the Tort Claim of a Settling Tort
Claimant was to be litigated, the likelihood is that the value of
certain Tort Claims would be greater.

Ms. Boswell informs Judge Marlar that the parties to the
Stipulations agree and acknowledge that in accepting the Initial
Distribution Amounts, the liability of the Diocese is not being
extinguished nor does the Initial Distribution Amount represent
the value of the Tort Claim if the Tort Claim of Claimant was to
be determined in a proceeding before a Court or jury.

The parties further agree that regardless of the amount of the
Diocese's liability, the parties will be bound by the terms of the
Plan and will not seek further relief or recovery from the Diocese
except to the extent specifically provided for in the Plan.

In light of the risks of litigation, the parties wish to enter
into the Stipulations to resolve the Claimants' claims in the
context of a mutually acceptable plan of reorganization.  In
addition, the parties acknowledge that it may become necessary to
determine the value of the Tort Claim of a Claimant.  The parties
have agreed to the manner in which the determination may be made.

Under the Stipulations, the parties agree that:

   (a) The Claimants will be allowed claims in specified tiers:

             Claim No.              Agreed Tier Placement
             ---------              ---------------------
                 64                        Tier 1
                 65                  Relationship Tier 1
                207                  Relationship Tier 2
                208                        Tier 2

   (b) The Claimants will receive on account of their Allowed
       Tort Claims Initial Distribution Amounts within 30 days
       of the funding the Settlement Trust.  The Initial
       Distribution Amounts for each Tier are:

          (i) Tier 1: $100,000;
         (ii) Tier 2: $200,000;
        (iii) Tier 3: $425,000;
         (iv) Tier 4: $600,000; and
          (v) California Tier: $300,000.

   (c) The Claims of parents or spouses of direct victims who
       have Tort Claims, will receive 5% of the highest amount
       recovered by a son or daughter with an Allowed Tort Claim
       as more fully explained in the Plan.

   (d) The Claimants will be entitled to subsequent distributions
       from the Settlement Trust as all other allowed Tort Claims
       as provided under the Plan as these may be amended so long
       as the amendments are acceptable to the Claimants.

   (e) The distributions and any other compensation being made to
       Claimants pursuant to the Stipulations and the Plan are
       for compensation of physical injuries.  Tucson will
       cooperate with the Claimants and their attorneys to draft
       and execute the appropriate documents to allow the
       Claimants or their attorneys to place all or any portion
       of the distributions in an annuity or structured
       settlement, if so elected by Claimants.

   (f) If it is necessary to determine the full extent of the
       Diocese's liability to a Claimant on account of Tier 1,
       Tier 2, Tier 3, Tier 4, California Tier Claims and
       Relationship Tort Claims, the determinations will be made
       in a proceeding which may be before the Bankruptcy Court.
       However, notwithstanding the amount of the liability, the
       Claimants agree to be bound by the terms of the Plan in
       accordance with the Stipulations and not seek further or
       additional recovery from the Diocese so long as the Plan
       provides for treatment of the Claimants' Tort Claims in
       accordance with the terms of the Stipulations.

Once the Court approves the Stipulations, the Diocese and each of
the Claimants will jointly seek to remand to the appropriate
Arizona Superior Court, any portion of the Claimant's case that is
not settled pursuant to the Stipulations.

The Roman Catholic Church of the Diocese of Tucson filed for
chapter 11 protection (Bankr. D. Ariz. Case No. 04-04721) on
September 20, 2004, and delivered a plan of reorganization to the
Court on the same day.  Susan G. Boswell, Esq., Kasey C. Nye,
Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson
Diocese.  (Catholic Church Bankruptcy News, Issue No. 39
Bankruptcy Creditors' Service, Inc., 215/945-7000)


CERVANTES ORCHARDS: Section 341(a) Meeting Slated for Oct. 6
------------------------------------------------------------          
The U.S. Trustee for Region 18 will convene a meeting of Cervantes
Orchards and Vineyards LLC's creditors at 2:30 p.m., on Oct. 6,
2005, at the Tower Bldg., 402 East Yakima Ave, 2nd Floor
Courtroom, Yakima, Washington 98901.  This is the first meeting of
creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy
cases.

All creditors are invited, but not required, to attend.  This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

Headquartered in Sunnyside, Washington, Cervantes Orchards and
Vineyards LLC, filed for chapter 11 protection on Aug. 19, 2005
(Bankr. E.D. Wash. Case No. 05-06600).  R. Bruce Johnston, Esq.,
at Law Offices of R. Bruce Johnston represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed estimated assets of $10 million to
$50 million and estimated debts of $1 million to $10 million.  


CITICORP MORTGAGE: Fitch Puts Low-B Rating on Two Cert. Classes
---------------------------------------------------------------
Fitch rates Citicorp Mortgage Securities, Inc.'s, REMIC pass-
through certificates, series 2005-5:

     -- $444,144,902 classes IA-1 through IA-13, IIA-1 through
        IIA-3, IIA-PO, IIIA-1, and A-PO certificates 'AAA';

     -- $6,152,000 class B-1 'AA';

     -- $2,278,000 class B-2 'A';

     -- $1,139,000 class B-3 'BBB';

     -- $911,000 class B-4 'BB';

     -- $455,000 class B-5 'B'.

The $687,060 class B-6 is not rated by Fitch.

The 'AAA' rating on the senior certificates reflects the 2.55%
subordination provided by the 1.35% class B-1, the 0.50% class B-
2, the 0.25% class B-3, the 0.20% privately offered class B-4, the
0.10% privately offered class B-5, and the 0.15% privately offered
class B-6.  In addition, the ratings reflect the quality of the
mortgage collateral, strength of the legal and financial
structures, and CitiMortgage, Inc.'s servicing capabilities (rated
'RPS1' by Fitch) as primary servicer.

The mortgage loans have been divided into three pools of mortgage
loans.  Pool I, with an unpaid aggregate principal balance of
$354,161,307, consists of 658 recently originated, 20-30-year
fixed-rate mortgage loans secured by one- to four-family
residential properties located primarily in California (33.45%)
and New York (18.98%).  The weighted average current loan to value
ratio of the mortgage loans is 66.41%. Condo properties account
for 8.21% of the total pool and co-ops account for 6.93%.  Cash-
out refinance loans and investor properties represent 24.03% and
0.3% of the pool, respectively.  The average balance of the
mortgage loans in the pool is approximately $538,239.  The
weighted average coupon of the loans is 5.897% and the weighted
average remaining term is 358 months.

Pool II, with an unpaid aggregate principal balance of
$61,114,160, consists of 110 recently originated, 15-year fixed-
rate mortgage loans secured by one- to four-family residential
properties located primarily in California (35.14%).  The weighted
average CLTV of the mortgage loans is 60.25%.  Condo properties
account for 5.99% of the total pool and co-ops account for 1.43%.  
Cash-out refinance loans represent 23.2% and there are no investor
properties.  The average balance of the mortgage loans in the pool
is approximately $555,583.  The WAC of the loans is 5.397% and the
weighted average remaining term is 178 months.

Pool III, with an unpaid aggregate principal balance of
$40,491,496, consists of 73 recently originated, 25-30-year fixed-
rate relocation mortgage loans secured by one- to four-family
residential properties located primarily in New Jersey (20.43%)
and California (16.93%).  The weighted average CLTV of the
mortgage loans is 73.84%.  Condo properties account for 3.0% of
the total pool.  There are no co-op, cash-out refinance loans, or
investor properties.  The average balance of the mortgage loans in
the pool is approximately $554,678.  The WAC of the loans is
5.490% and the weighted average remaining term is 358 months.

None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws.  

For additional information on Fitch's rating criteria regarding
predatory lending legislation, please see the press release issued
May 1, 2003 entitled 'Fitch Revises Rating Criteria in Wake of
Predatory Lending Legislation,' available on the Fitch Ratings web
site at http://www.fitchratings.com/

The mortgage loans were originated or acquired by CMI and in turn
sold to CMSI.  A special purpose corporation, CMSI deposited the
loans into the trust, which then issued the certificates. U.S.
Bank NA will serve as trustee.  For federal income tax purposes,
an election will be made to treat the trust fund as one or more
real estate mortgage investment conduits.


CLAREMONT TECHNOLOGIES: Consents to Ch. 11 Petition & Files Plan
----------------------------------------------------------------
Claremont Technologies Corp (OTCBB:CTTG) agreed to reorganize
under chapter 11 of the U.S. Bankruptcy Code after facing an
involuntary chapter 7 petition filed by two noteholders in the
U.S. Bankruptcy Court for the District of Nevada on March 25,
2005.  The Company will remain as debtor-in-possession and the
management appointed after March 25, 2005, will continue in place.  

The Debtor strenuously contested the involuntary petition and at a
hearing on May 4, 2005, two more noteholders joined the petition.  
The parties then began extensive discovery with seven depositions
scheduled and taken over a three-week period.  On the eve of
trial, the parties reached a tentative settlement and began an
ongoing dialogue, which led to the negotiation of a Plan of
Reorganization.  On Aug. 24, 2005, the Debtor consented to the
entry of an order for relief and filed its Plan of Reorganization
and accompanying Disclosure Statement.

                        About the Plan

The Plan provides that the Debtor will retain its assets.  The
Plan proposes to pay allowed claims in order of priority under the
Bankruptcy Code and to pay Claremont's largest creditors over a
period of up to 15 years.  

Under the terms of the Plan, the Debtor will acquire the assets of
Wataire Industries, Inc., for 45 million shares of the Reorganized
Debtor's restricted stock.  In addition, Wataire will contribute
sufficient funds to allow the Debtor to pay sums required to meet
the plan obligations to administrative claims, priority tax
claims, and general unsecured claims.  Wataire will become the
largest shareholder owning approximately 70% of the Reorganized
Debtor's issued and outstanding stock.

                    Treatment of Claims

The claims of the petitioning creditors will be allowed for
$112,822 and will be fully satisfied with 10 million shares of the
Reorganized Debtor's stock.

The claims of the Involuntary Gap creditors will be determined by
the Court and will be fully satisfied with 10 million shares of
the Reorganized Debtor's stock.

General unsecured creditors will recover 10% of their claim.  In
addition, holders of allowed unsecured claims will receive 1 share
of the Reorganized Debtor's restricted stock for every $1.00 of
claim.  

The existing shares of outstanding stock will be cancelled on the
effective date and the Reorganized Debtor will distribute 50,000
shares to Equity holders pro-rata.

The Court will convene a hearing to consider the adequacy of the
Debtor's Disclosure Statement at 9:30 a.m. on Sept. 19, 2005.  

Objections, if any, must be filed no later than Sept. 12, 2005 at
5:00 PM PST.

If the Court approves the adequacy of the Disclosure Statement,
then creditors, shareholders and parties in interest will be given
the opportunity to vote on the Plan.

A full-text copy of the Debtor's Plan of Reorganization is
available at no charge at http://ResearchArchives.com/t/s?11f

A full-text copy of the Disclosure Statement explaining the Plan
is available at no charge at http://ResearchArchives.com/t/s?120

Headquartered in Las Vegas, Nevada, Claremont Technologies Corp.
develops the first and only independent lab certified device, the
Safe Cell Tab, which helps eradicate all cancer-causing radiation
from electromagnetic frequencies.  The Company was subject to an
involuntary chapter 7 petition on March 25, 2005 (Bankr. D. Nev.
Case No. 05-12235).  The Debtor consented to an entry of an order
for relief under chapter 11 on Aug. 24, 2005.  Matthew L. Johnson,
Esq., at Matthew L. Johnson & Associates, P.C., represents the
Debtor in its bankruptcy proceeding.


CLEVELAND COLD: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Cleveland Cold Storage
        2000 West 14th Street
        Cleveland, Ohio 44113

Bankruptcy Case No.: 05-22997

Type of Business: The Debtor operates a cold storage warehouse.

Chapter 11 Petition Date: August 27, 2005

Court: Northern District of Ohio (Cleveland)

Judge: Arthur I. Harris

Debtor's Counsel: Donald C. Williams, Esq.
                  Donald C. Williams & Assoc.
                  The Standard Building
                  1370 Ontario Street, #330
                  Cleveland, Ohio 44113
                  Tel: (216) 696-4345

Total Assets: $775,050

Total Debts:  $1,515,574

The Debtor does not have any Unsecured Creditors who are not
insiders.


CRYOCOR INC: June 30 Balance Sheet Upside-Down by $39 Million
-------------------------------------------------------------
CryoCor, Inc. (Nasdaq: CRYO) reported financial results for the
three months ended June 30, 2005.

CryoCor markets its Cardiac Cryoablation System in Europe, where
it has received CE mark approval.  Revenues for the three months
ended June 30, 2005 was $201,000 compared with $160,000 for the
same period in 2004.  Revenues for the six months ended June 30,
2005 was $530,000 compared with $317,000 for the six months ended
June 30, 2004.  The revenue increase was primarily due to a modest
increase in catheter shipments in 2005.  Second quarter 2005
revenues were impacted by the recall of the Company's Model 1200
catheter, resulting in a five week period during which catheters
were not shipped or commercially available.

Cost of sales for the three months ended June 30, 2005, was
$850,000 compared with $639,000 for the three months ended June
30, 2004.  For the six months ended June 30, 2005, cost of sales
was $1.6 million compared with $1.3 million for the same period in
2004.  The increase reflected the increased sales activity during
the related periods.  It also included additional costs of
approximately $200,000 to recall the Model 1200 catheter in Europe
and to withdraw the use of the Model 1200 catheter from use in
clinical trials in the United States during the three months ended
June 30, 2005.

Research and development expenses for the three months ended June
30, 2005 was $2.4 million and $4.2 million for the six months
ended June 30, 2005.  The increase for the three and six months
ended June 30, 2005 was due to an increase in non-cash stock-based
compensation expenses of $422,000 and $606,000, respectively.

General and administrative expenses for the three months ended
June 30, 2005 was $1.4 million compared with $1 million for the
same period in 2004.  For the six months ended June 30, 2005,
general and administrative expenses were $2.8 million compared
with $2 million for the same period in 2004.  The increase for the
three months ended June 30, 2005 was primarily related to an
increase in non-cash stock-based compensation expenses of
$198,000, and $109,000 in other compensation related costs.  The
increase for the six months ended June 30, 2005 was primarily due
to an increase in non-cash stock-based compensation expenses of
$395,000, and $317,000 in other compensation related costs.

Net loss applicable to common stockholders was $6.1 million for
the three months ended June 30, 2005, and $11.2 million for the
six months ended June 30, 2005.  Included in the net loss
applicable to common stockholders for the three and six months
ended June 30, 2005 were dividends and accretion to redemption
value of Series D redeemable convertible preferred stock as well
as cumulative dividends on Series C preferred stock of $1.4
million and $2.8 million, respectively, compared to $1.0 million
and $1.7 million for the same periods ended in 2004.

Cash and cash equivalents as of June 30, 2005 were $2.2 million,
prior the completion of the initial public offering in July, which
generated net proceeds of $35.5 million.  After the sale of 3.7
million shares of common stock in the Company's initial public
offering and the conversion of all preferred shares to common
shares, CryoCor had 10,598,319 shares of common stock outstanding.

CryoCor Inc. -- htpp://www/cryocor.com/ -- is a medical technology
company that has developed and manufactures a disposable catheter
system based on its proprietary cryoablation technology for the
minimally invasive treatment of cardiac arrhythmias.  The
Company's product, the CryoCor Cardiac Cryoablation System, is
designed to treat cardiac arrhythmias through the use of
cryoenergy, or extreme cold, to destroy targeted cardiac tissue.  
The CryoCor System has been approved in Europe for the treatment
of atrial fibrillation and atrial flutter, the two most common and
difficult to treat arrhythmias, since 2002.  In the United States,
CryoCor is conducting a pivotal trial to evaluate the safety and
efficacy of the CryoCor Cardiac Cryoablation System for the
treatment of atrial fibrillation, and has submitted a PMA for the
treatment of atrial flutter.

At June 30, 2005, CryoCor Inc.'s balance sheet showed a
$39,275,000 stockholders' deficit, compared to a $30,004,000
deficit at Dec. 31, 2004.


DELPHI CORP: Reiterates Demands in Light of New Bankruptcy Laws
---------------------------------------------------------------
Delphi Corporation may file for bankruptcy by Oct. 17, 2005, if
its talks with General Motors Corporation and Delphi's employee's
union, United Auto Workers, fail.  That's what the Company's
Chairman of the Board, Robert S. "Steve" Miller, reiterated last
week, The Detroit News reports.

The Company issued the same warning at the start of its talks with
GM, its major client, and the UAW, three weeks ago.  GM is
represented by its Chairman Rick Wagoner.  UAW President, Ron
Gettelfinger, represents UAW.  

Delphi is a 1999 spin-off from General Motors.  While General
Motors and Delphi are separate entities, GM retains
indemnification obligations for some employee obligations.  

Chairman Steve Miller, Federal-Mogul's former non-executive
chairman is a turnaround pro who came to Delphi from Bethlehem
Steel.  Mr. Miller didn't mince any words, demanding wage cuts of
at least $5 an hour, other benefit reductions and work rule
changes from the UAW.  Those concession total around $2.5 billion
in savings for the Company.  The Company also wants the freedom to
close plants and to divest or shut down money-losing business
units, in the shortest time possible.  

Mr. Miller said the Company is spending $130,000 per worker
annually.  The UAW contests that figure and is reported unlikely
to give way to the Company's demands.  The Company's contract with
the UAW will expire on 2007.

Delphi Corp. -- http://www.delphi.com/-- is the world's    
largest automotive component supplier with annual revenues topping  
$25 billion.  Delphi is a world leader in mobile electronics and    
transportation components and systems technology.  Multi-
national Delphi conducts its business operations through various    
subsidiaries and has headquarters in Troy, Michigan, USA, Paris,   
Tokyo and Sao Paulo, Brazil.  Delphi's two business sectors --      
Dynamics, Propulsion, Thermal & Interior Sector and Electrical,     
Electronics & Safety Sector -- provide comprehensive product     
solutions to complex customer needs.  Delphi has approximately     
186,500 employees and operates 171 wholly owned manufacturing     
sites, 42 joint ventures, 53 customer centers and sales offices     
and 34 technical centers in 41 countries.     
  
At June 30, 2005, Delphi Corporation's balance sheet showed  
a $4.56 billion stockholders' deficit, compared to a
$3.54 billion deficit at Dec. 31, 2004.

Delphi is rated by the three major rating agencies:

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

As a result of recent downgrades, Delphi's facility fee and
borrowing costs under its credit facilities increased.   


DIVERSIFIED CORPORATE: Equity Deficit Widens to $3.72M at June 30
-----------------------------------------------------------------
Diversified Corporate Resources, Inc., reported its financial
results for the quarter ending June 30, 2005, in a Form 10-Q
delivered to the Securities and Exchange Commission earlier this
month.

                 Liquidity and Capital Resources

Cash on hand at June 30, 2005 was $3,000.  Because all cash
receipts are deposited into the Company's lockboxes and swept
daily by its lender, combined with its policy of maintaining zero
balances in its operating accounts, the Company maintains only a
minimal amount of cash on hand.  Cash flows from financing
activities during the year totaled $727,000, principally from an
increase in borrowings under debt obligations of $1,075,000,
repayment of a note receivable from a related party of $311,000,
and an increase in obligations not liquidated because of
outstanding checks of $187,000.  These increases were partially
offset by net repayments under factoring arrangements of $396,000,
net repayments on revolving lines of credit of $254,000, and
principal payments under debt and lease obligations of $196,000.  
Cash used by investing activities of $13,000 represented funds
used for capital expenditures.  Cash used in operating activities
was $715,000.

If a sale of Datatek is consummated, the cash received should be
adequate to repay most, if not all, of the Company's past due
payroll tax liabilities.  The Company cannot give any assurance at
this time that a sale will occur.  Datatek is primarily involved
in information technology temporary and contract staffing and
represents approximately 53% of our 2005 year to date temporary
and contract staffing revenue.

The Company is continuing to evaluate various other financing and
restructuring strategies, including merger candidates and
investments through private placements, to maximize shareholder
value and to provide assistance in pursuing alternative financing
options in connection with our capital requirements and business
strategy.  The Company will also seek acquisitions to replace the
revenues lost from a Datatek sale by acquiring small companies
where we can absorb their back office operations into its own.  
There can be no assurance that it will be successful in
implementing the changes necessary to accomplish these objectives,
or if it is successful, that the changes will improve our cash
flow and liquidity.

If a Datatek sale takes place, management believes it will be able
to secure other financing that will allow it to pursue the
Company's acquisition strategy, which, when combined with
improving market conditions and the restructuring of its present
businesses, should eventually produce enough new revenues and
gross profit to cover the operating funds shortfall the Company
are currently experiencing.  However, the Company cannot guarantee
that funds will be available, that any acquisitions will, if made,
be accretive to its cash flow, or that its creditors will give it
the time needed to implement its plan.

                       Bankruptcy Warning

The Company's common stock was delisted on Feb. 9, 2005, and has
since been trading sporadically on the "pink sheets" inter-dealer
trading network.  The loss of the AMEX listing has made the
Company's ability to use is common stock in acquisitions
substantially more difficult.  The inability to obtain additional
financing will have a material adverse effect on its financial
condition.  It may cause the Company to delay or curtail its
business plans or to seek protection under bankruptcy laws.  The
Company has initiated the process leading to the trading of our
common stock on the OTC Bulletin Board.

The Company said its continuation as a going concern is dependent
upon its ability to obtain additional financing and, ultimately,
to attain and maintain profitable operations.

A full-text copy of Diversified Corporate's Quarterly Report is
available for free at http://ResearchArchives.com/t/s?11d

Diversified Corporate Resources, Inc., is a national employment
services and consulting firm, servicing Fortune 500 and larger
regional companies with permanent recruiting and staff
augmentation in the fields of Engineering, Information Technology,
Healthcare, BioMed and Finance and Accounting.  The Company
currently operates a nationwide network of eight regional offices.

As of June 30, 2005, Diversified Corporate's equity deficit
widened to $3,716,000, from a $1,899,000 deficit at Dec. 31, 2004.


DIVERSIFIED CORPORATE: Negotiating Sale of Traveling Nurse Unit
---------------------------------------------------------------
Diversified Corporate Resources, Inc. (OTC Pink Sheets: HIRD.PK)
is reviewing its strategic options whether or not to sell its
traveling nurse division.

MT Ultimate Healthcare Corp. (OTCBB: MTHC) signed a binding
agreement to purchase the business and assets of the Company's
traveling nurse division, which conducts business under the name
Magic Healthcare and is located in Palm Desert, California.

However, the exclusivity period under that agreement, during which
the parties agreed to use their reasonable efforts to close the
transaction, has expired.  Accordingly, although these discussions
are continuing, no assurances can be provided that a final,
definitive agreement with MT will be reached or that a sale is
otherwise imminent.

Diversified Corporate Resources, Inc., is a national employment
services and consulting firm, servicing Fortune 500 and larger
regional companies with permanent recruiting and staff
augmentation in the fields of Engineering, Information Technology,
Healthcare, BioMed and Finance and Accounting.  The Company
currently operates a nationwide network of eight regional offices.

As of June 30, 2005, Diversified Corporate's equity deficit
widened to $3,716,000, from a $1,899,000 deficit at Dec. 31, 2004.


DJ ORTHOPEDICS: Credit Amendments Cue Moody's to Withdraw Ratings
-----------------------------------------------------------------
Moody's Investors Service has withdrawn the Ba3 Corporate Family
Rating of dj Orthopedics, LLC, the Ba3 rating for the company's
$100 million guaranteed senior secured term loan and the Ba3
rating for its $30 million guaranteed senior secured revolving
credit.  On May 5, 2005, dj Orthopedics entered into an amended
agreement that consists of a $50 million term loan and $75 million
revolving credit facility.  This amended agreement is not rated by
Moody's.

Dj Orthopedics, LLC, based in Vista, California, specializes in
the design, manufacture and marketing of products that
rehabilitate soft tissue and bone injuries, protect against
injury, and treat osteoarthritis of the knee.


DOCTORS HOSPITAL: Hires Wellspring Valuation to Perform Appraisals
------------------------------------------------------------------
The Hon. Jeff Bohm of the U.S. Bankruptcy Court for the Southern
District of Texas in Houston gave Doctors Hospital 1997 LP
permission to employ Wellspring Valuation Ltd. as its professional
appraiser.

The Debtor selected Wellspring Valuation because of the Firm's
reputation for offering objective, independent business judgment
and professionalism, as well as its extensive experience in
conducting fixed asset and real estate valuations of hospitals.  

Wellspring Valuation will perform a building and equipment
appraisal at the Debtor's Tidwell and Parkway Facilities,
utilizing the income and cost valuation approaches to produce an
estimated market value of the land.

The Debtor tells the Bankruptcy Court that it needs to determine
the market value of these assets so it can properly formulate a
viable long-term business plan and explore strategic
Alternatives that add value to its business.

The Debtor estimates the overall cost for Wellspring Valuation's
services at $30,000.  Wellspring Valuation has agreed to cap all
services and expenses related to the appraisal at $33,000.  The
Debtor will pay a $10,000 retainer, to be credited to Wellspring
Valuation's total charges.

To the best of the Debtor's knowledge, Wellspring Valuation does
not hold any interest adverse to its estate and is a
"disinterested person" as that term is defined in section 101(14)
of the Bankruptcy Code.

Wellspring Valuation Ltd. -- http://www.wellspringvaluation.com/
-- is the nationally recognized leader in providing independent
valuation and financial advisory services specifically tailored to
the healthcare industry.  The Firm is a national, full service
valuation and financial advisory firm, with senior level
healthcare expertise in finance, equipment and real estate.  

Wellspring Valuation's clients include hospitals, ambulatory
surgery centers, diagnostic imaging centers, laboratories,
dialysis centers, long-term care facilities, medical office
buildings, and all types of ancillary operations.  Financial
advisory services are used for transaction due diligence and
valuation, corporate compliance, and financial reporting.

Headquartered in Houston, Texas, Doctors Hospital 1997 LP, dba
Doctors Hospital Parkway-Tidwell, operates a 101-bed hospital
located in Tidwell, Houston, and a 152-bed hospital located in
West Parker Road, Houston.  The Company filed for chapter 11
protection on April 6, 2005 (Bankr. S.D. Tex. Case No. 05-35291).
James M. Vaughn, Esq., at Porter & Hedges, L.L.P., represents the
Debtor in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed total assets of
$41,643,252 and total debts of $66,306,939.


E.SPIRE COMMS: DIP Financing Pact Extended to Sept. 30
------------------------------------------------------
Gary F. Seitz, Esq., the Chapter 11 Trustee appointed in e.Spire
Communications, Inc., and its debtor-affiliates' chapter 11 cases
sought and obtained permission from the U.S. Bankruptcy Court for
the District of Delaware to further extend and amend their debtor-
in-possession financing until Sept. 30, 2005.  The DIP Facility is
provided by Ableco Finance LLC, as lender, and Wells Fargo
Foothill, Inc., as agent.

The Debtors will use the financing to continue:

   -- funding the expenses of liquidating their remaining
      assets;

   -- resolving disputed liabilities;

   -- pursuing avoidance actions;

   -- investigating potential estate causes of action;

   -- resolving cure claims associated with the sale to Thermo
      Telecom Partners LLC and Expedius Management Co., LLC;

   -- collecting miscellaneous accounts receivable;

   -- resolving disputed liens asserted by mechanics lienors and
      taxing authorities; and

   -- winding-up the Debtors' 401(k) plan and other wind-down
      activities.

John D. McLaughlin, Jr., Esq., the chapter 11 Trustee's Counsel,
tells the Court that absent the DIP financing, the Debtors' entire
liquidation effort will be terminated.

                     Use of Cash Collateral

The Court authorizes Mr. Seitz to use up to $310,500 of the DIP
Lenders' cash collateral that is on deposit in the Trustee's
accounts.  The amount will be deducted from the Revolver and then
re-advanced by the DIP Lenders as loans under the DIP facility.

To provide the Lenders with adequate protection, the Debtors agree
to:

   -- pay the prepetition agent all accrued and unpaid prepetition
      and postpetition interest and expenses under the Prepetition
      Credit Agreement;

   -- grant the prepetition agent valid, perfected, first priority
      postpetition security interests in all liens, subordinate
      only to the liens of the DIP Lenders upon all property of
      the Debtors acquired postpetition; and

   -- grant to the prepetition agent an administrative claim to
      the extent there shall be any diminution in the value of the
      prepetition collateral.

The Court approves the use of cash collateral in accordance with a
monthly budget from July 2005 through September 2005, projecting:

                           Monthly Budget
                  July 2005 through September 2005

                           July      August      Sept.      Total
                          ------    --------    -------    -------    
Monthly Administrative
Costs                    $17,500     $17,500    $17,500    $52,500

Professional Fees         86,000      86,000     86,000   $258,000

Total                   $103,500    $103,500   $103,500   $310,500

The Court also approved a modified method of calculating Mr.
Seitz's voluntarily reduced commission.  Pursuant to this
agreement, the Trustee is entitled to a 3% commission on all
current distributions of Reduced Commission Assets, provided that
this increased commission will be subtracted from the Trustee's
commission derived from the future distribution of the Note from
Xspedius Management Co., LLP, dated as of Aug. 30, 2002.

Headquartered in Columbia, Maryland, e.Spire Communications is a
facilities-based integrated communications provider, offering
traditional local and long distance internet access throughout the
United States.  The Company and its debtor-affiliates filed for
chapter 11 protection on March 22, 2001 (Bankr. Del. Case No.
01-00974).  Chad Joseph Toms, Esq., and Domenic E. Pacitti, Esq.,
at Saul Ewing LLP, and James E. O'Neill, Esq., at Pachulski,
Stang, Ziehl, Young & Jones, represent the Debtors in their
chapter 11 proceedings.  When the Debtors filed for protection
from their creditors, they listed $911.2 million in total assets
and $1.4 billion in total debts.

Gary F. Seitz, Esq., is the Court-appointed Chapter 11 Trustee in
the Debtors' bankruptcy proceedings.  Daniel K. Astin, Esq., and
Anthony M. Saccullo, Esq., at The Bayard Firm; Erin Edwards, Esq.,
at Young Conaway Stargatt & Taylor LLP; and Deirdre M. Richards,
Esq., at Obermayer Rebmann Maxwell & Hippel LLP, represent Mr.
Seitz.  


EAST TEXAS MEDICAL: Moody's Affirms Ba2 Rating on $220-Mil Bonds
----------------------------------------------------------------
Moody's Investors Service has affirmed the Ba2 rating on East
Texas Medical Center Regional Health System's Series 1993 A&B
bonds ($43 million) and Series 1997A-E bonds ($177 million) issued
through Tyler Health Facilities Development Corporation.

The Series 1997A bonds are insured by MBIA and the Series 1997B-E
bonds are insured by FSA; all of the Series 1997 bonds carry
primary ratings of Aaa.  The rating outlook has been revised to
stable from positive due to increased competitive pressures and an
unexpected and recent decline in volume, both of which contributed
to lower profit margins following record performance in FY 2003.

                         Legal Security

Security interest in revenues and receipts of the Tyler facility
and all affiliate hospitals.  The mortgage on the Tyler facility
was pledged to the master trustee in favor of the bondholders in
FY 2004.  The mortgage pledge was part of an agreement with FSA
which no longer requires the system to meet the 91 days cash on
hand liquidity covenant.  The system also agreed to fund the
Special Reserve Fund (which is akin to a debt service reserve
fund) at the lesser of $50 million or half of the Series 1997
current par amount while the bonds remain outstanding.

Strengths:

   (1) continuation of good financial performance with profitable
       earnings since fiscal year 2001, although FY 2005 results
       will be below FY 2004, denoting the second year of a
       decline in earnings;

   (2) market share has remained stable in spite of the presence
       of a sizable competitor; East Texas maintains the leading
       market share in the 12-county primary service area due to
       its expansive network of affiliate hospitals; and

   (3) moderate capital spending in the near term which indicates
       a spending discipline within the organization and the
       willingness to pull back on capital given recent volume
       declines.

Weaknesses:

   (1) presence of a physician-owned specialty hospital in Tyler
       which has impacted surgical volumes and financial
       performance;

   (2) unexpected decline in volumes over the past three months
       which has impacted financial results; and

   (3) material rate reduction from one of the system's larger
       payers;

   (4) decline in liquidity following a peak of $95 million in
       FY 2003; unrestricted cash is expected to decline to
       $68 million or 31 days cash by the end of FY 2005; and

   (5) highly leveraged balance sheet with $285 million bonds,
       notes and capital leases as well as sizeable operating
       leases and an expected future pension benefit obligation of
       $46 million as of October 31, 2004; the plan assets are
       currently above the present value of the accrued pension
       benefits.

                   Recent Results/Developments

The rating affirmation and revision of the outlook to stable from
positive reflects recent declines in East Texas Medical Center
Regional Healthcare System's financial performance.  Following a
record year of performance in FY 2003 with $90 million of
operating cash flow (13.3% operating cash flow margin), financial
results declined to $75 million operating cash flow (10.1%
operating cash flow margin) in FY 2004.  Management expects
performance to again decline in FY 2005 with $67 million operating
cash flow (8.0% operating cash flow margin).  While these levels
remain respectable and represent a higher level of earnings for
the system since weaker performance in the late 1990s, Moody's
believes that the decline represents new financial pressures that
the organization must absorb.

These pressures include the presence of a physician-owned 20-bed
specialty surgical hospital (Texas Spine and Joint Hospital) that
opened in Tyler in January 2003.  Management estimates that the
specialty hospital has resulted in a $9 million reduction in net
income and represents a greater competitive threat than 465
licensed-bed Trinity Mother Francis Health System, also located in
Tyler.  While management moved quickly to replace the trauma
orthopedic surgeons through ETMCRHS' employed physician 501(a)
corporation, the outmigration to this competing facility has
impacted hospital financial performance and increased the subsidy
levels required at the 501(a) corporation.  Aside from the
specialty hospital, volumes at several of the system's facilities
(including Tyler) have unexpectedly declined in recent months.
Management is uncertain as to whether this is a non-recurring
trend or a permanent decline but it is nonetheless included in the
FY 2005 forecast.  Finally, the system incurred a material rate
reduction from one of its larger payers, contributing to a
$12 million revenue reduction in FY 2005.

Liquidity has also declined since FY 2003 from a peak of
$95 million or 57 days cash on hand to a projected $69 million or
32 days cash by the end of FY 2005.  Capital spending has been
funded with cash flow as well as notes and leases; future capital
spending will hover between $35 million to $40 million per annum
which approximates depreciation expense.  The decline in liquidity
from FY 2003 to FY 2004 ($57 million or 30 days) reflects, in
part, the $20 million funding into the Special Reserve Fund. Under
the prior liquidity covenant, ETMCRHS was required to fund 50% of
free cash flow (after debt service payments) until the system
reached 91 days cash on hand.  The covenant has since been revised
and now requires ETMCRHS to maintain the lesser of $50 million or
half of the outstanding Series 1997 bonds in the SRF in exchange
for the mortgage pledge.  While the SRF is akin to a debt service
reserve fund and not included in our liquidity calculations, it
does represent the overall improvement in earnings at the system
in recent years.

Absolute levels of long-term debt have not declined due to the
increased use of notes, as well as leases and other lending
vehicles to fund capital needs.  Projected FY 2005 cash-to-debt is
below average, 24% while projected debt-to-cash flow is modest,
5.30 times.  Moody's notes that the system also has large
non-cancelable operating leases for its affiliate hospitals that
further adds to the overall debt burden.  Increased funding into
the pension plan has been on par with pension expense.

We note that ETMCRHS is involved as a defendant and counter
plaintiff in a legal action in federal district court in Marshall,
Texas filed by Trinity Mother Frances Health System.  The trial is
expected to begin in October 2005 barring any unforeseen delays.   
Moody's will monitor the outcome and any impact on financial
performance.

                             Outlook

The rating outlook is stable and reflects our belief that
financial performance should produce adequate debt service
coverage levels.

What could change the rating - UP

   -- Improved liquidity;
   -- stable financial performance; and
   -- volume trends

What could change the rating - DOWN

   -- Departure from profitable earnings;
   -- loss in market share; and
   -- decline in liquidity

                            Key Facts
    East Texas Medical Center Regional Healthcare System and
                Affiliates ended October 31, 2004

Admissions:                45,765

Total Revenues:            $743.0 MM

Net Revenues Available
for Debt Service:          $78.0 MM (investment income normalized
                           at 5%)

Maximum Annual debt
service coverage based on
actual reported investment
income:                    2.80 times

Moody's-Adjusted Maximum
Annual Debt service
coverage:                  2.84 times (investment income
                           normalized at 5%)

Total Debt Outstanding:    $283.1 MM

Days cash on hand:         30.4 days (excludes Special Reserve
                           Funds)

Operating Cash flow
Margin:                    10.1%


EASTMAN KODAK: Cuts More Jobs, Pares Film Manufacturing Operations
------------------------------------------------------------------
Eastman Kodak Company is closing various operations in Rochester,
New York, and downsizing its film manufacturing business in China
in a bid to address the worldwide decline in demand for consumer
film and photographic paper.

Pursuant to a restructuring program originally announced in
January 2004 and expanded in July 2005, the imaging giant will
consolidate photographic paper manufacturing for North America at
plants in Windsor, Colorado and Harrow, England, resulting in the
closure of an operation in Rochester by the end of October.

The consolidation will cost approximately $95 million and will
affect an estimated 900 jobs.  Costs associated with the
restructuring include termination benefits of approximately
$33 million and accelerated equipment depreciation and inventory
write-offs of approximately $62 million.  Kodak will also record
approximately $3 million in operating charges related to the
consolidation, which it expects to complete by the end of 2005.

Kodak further anticipates the closure of its polyester processing
and recycling operations in Rochester by the end of the year. To
reduce operating costs, the Company will opt to purchase finished
raw material and outsource the recycling of its polyester waste.

As a result of this action, the Company will incur restructuring-
related charges of approximately $25 million.  Included in these
charges are accelerated depreciation on equipment and inventory
write-offs of approximately $21 million, employee severance of
approximately $3 million, and other exit costs of approximately $1
million.

Kodak will also reduce output and staff at its plant in Xiamen,
China.  The Xiamen plant is the Company's largest production base
in Asia.  As a result of this action, the Company will incur
restructuring-related charges of approximately $30 million.  
Included in these charges is accelerated depreciation on equipment
of approximately $29 million and other exit costs of approximately
$1 million. This action will be completed by July 31, 2006.

Kodak reports that all severance and exit costs require a cash
outlay, while the accelerated depreciation and inventory write-
offs represent non-cash charges.

Based in Rochester, New York, Eastman Kodak Company --
http://www.kodak.com/-- is a worldwide vendor of imaging products  
and services.  The company is committed to a digitally oriented
growth strategy focused on four businesses: Digital & Film Imaging
Systems - providing consumers, professionals, and cinematographers
with digital and traditional products and services; Health -
supplying the medical and dental professions with traditional and
digital imaging and information systems, IT solutions, and
services; Graphic Communications - providing customers with a
range of solutions for prepress, traditional and digital printing,
document scanning, and multi-vendor IT services; and Display &
Components - supplying original equipment manufacturers with
imaging sensors as well as intellectual property and materials for
the organic light-emitting diode and LCD display industries.

                         *     *     *

As reported in the Troubled Company Reporter on Aug. 18, 2005,
Fitch Ratings downgraded Kodak's senior unsecured debt to 'BB-'
from 'BB' with a negative outlook.  The rating action reflects
uncertainties regarding the structure and collateral package of
the new secured facilities, timing and uncertainty surrounding the
stability of earnings and digital profitability, and the financial
impact from restructuring costs.

As reported in the Troubled Company Reporter on Aug. 17, 2005,
Standard & Poor's Ratings Services lowered its senior unsecured
debt rating on Kodak to 'BB-' from 'BB', based on the company's
plan to add $2.7 billion in secured credit facilities to its
capital structure.  

As reported in the Troubled Company Reporter on July 25, 2005,
Moody's Investors Service has downgraded Eastman Kodak Company's
corporate family rating to Ba2 from Ba1 and its senior unsecured
rating to Ba3 from Ba1 and has placed both ratings on review for
further possible downgrade.

Ratings on review for possible downgrade:

   * Corporate Family Rating (formerly senior implied rating)
     at Ba2

   * Senior Unsecured Rating at Ba3


ENCYCLE/TEXAS: Case Summary & 22 Largest Unsecured Creditors
------------------------------------------------------------
Lead Debtor: Encycle/Texas, Inc.
             1150 North 7th Avenue
             Tucson, Arizona 85705

Bankruptcy Case No.: 05-21304

Debtor affiliate filing separate chapter 11 petition:

      Entity                                     Case No.
      ------                                     --------
      Encycle, Inc.                              05-21305

Type of Business: The Debtor operates a large hydrometallurgical
                  processing complex that chemically recovers the
                  metals in waste and by-product materials that
                  are received from a variety of manufacturing
                  companies nationwide.  The recovered metals are
                  returned to commerce, either in metallic form or
                  as inorganic chemicals.  Encycle/Texas, Inc. is
                  affiliated with ASARCO LLC (Bankr. S.D. Tex.
                  Case No. 05-21207).  ASARCO LLC filed for
                  chapter 11 protection on August 9, 2005, and its
                  case is pending before Hon. Richard Schmidt.  
                  See http://www.asarco.com/

                  The other debtor-affiliates who filed for
                  chapter 11 protection are: Lac d'Amiante du
                  Qu,bec Lt,e (Bankr. S.D. Tex. Case No. 05-
                  20521); CAPCO Pipe Company, Inc. (Bankr. S.D.
                  Tex. Case No. 05-20522); Cement Asbestos
                  Products Co. (Bankr. S.D. Case No. 05-20523);
                  Lake Asbestos of Quebec, Ltd. (Bankr. S.D. Case
                  No. 05-20524); and LAQ Canada, Ltd. (Bankr. Case
                  No. 05-20525).  All of these Debtor-affiliates
                  filed for chapter 11 protection on April 11,
                  2005, and their case are pending before Hon.
                  Richard Schmidt.
                  
Chapter 11 Petition Date: August 26, 2005

Court: Southern District of Texas (Corpus Christi)

Judge: Richard S. Schmidt

Debtor's Counsel: C. Luckey McDowell, Esq.
                  Jack L. Kinzie, Esq.
                  James R. Prince, Esq.
                  Baker Botts L.L.P.
                  2001 Ross Avenue
                  Dallas, Texas 75201
                  Tel: (214) 953-6500
                  Fax: (214) 953-6503

                         Estimated Assets        Estimated Debts
                         ----------------        ---------------
Encycle/Texas, Inc.      $50,000 to $100,000     $10 Million to
                                                 $50 Million

Encycle, Inc.            $1 Million to           $1 Million to
                         $10 Million             $10 Million

A. Encycle/Texas, Inc.'s 20 Largest Unsecured Creditors:

   Entity                        Nature of Claim    Claim Amount
   ------                        ---------------    ------------
State of Texas                   Judgment             $1,125,000
Natural Resources Division       Hazardous waste         $50,000
Attorney General's Office        generator fee
P.O. Box 12548
Austin, TX 78711

United States of America         Judgment             $1,125,000
Financial Litigation Unit
Office of the United States
Attorney
P.O. Box 61129
Houston, TX 77208

Meaney-Walsh Properties          Judgment               $510,000
No. 1 Ltd.
3360 San Antonio Street
Corpus Christi, TX 78412

Nueces County Tax                Property taxes          $50,971
Assessor-Collector

SBC Communications, Inc.         Telephone provider      $14,317

City of Corpus Christi           Property taxes          $12,041
                                 Water utility provider   $1,711

US Ecology Texas                 Trade                   $11,472

Suez Energy Resources            Electrical provider      $7,249

Ram Consultants                  Environmental services   $1,800

STL Corpus Christi               Outside lab analysis     $1,032

PSC Industrial Outsourcing Inc.  Trade                      $466

Continental Battery Co.          Trade                      $356

Unifirst Holdings, LP            Trade                      $321

Grainger                         Trade                      $224

Allied Waste Services            Trade                      $205

Purvis Bearing Service Corpus    Trade                      $198
Christi

United Steel Workers of America  Union dues, payroll         $96
                                 deduction

Xerox Capital Services LLC       Trade                       $81

Reddy Ice Corpus Christi         Trade                       $71

Arcadis G&M, Inc.                Trade                       $63

B. Encycle, Inc.'s 2 Largest Unsecured Creditors:

   Entity                        Nature of Claim    Claim Amount
   ------                        ---------------    ------------
State of Texas                   Environmental           Unknown
Natural Resources Division
Attorney General's Office
P.O. Box 12548
Austin, TX 78711

Department of Justice            Environmental           Unknown
Environmental and Natural
Resources Division
P.O. Box 7611
Washington, D.C. 20044-7611


ENRON CORP: Court Approves JEDI II & CalPERS Settlement Pact
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approved a settlement agreement among JEDI II, Enron Corporation,
Enron North America Corp., and CalPERS.

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

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

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

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

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

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

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

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

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

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

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

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

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

     (x) the Closing, and

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

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

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

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

      1. the third anniversary of the Closing Date,

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

      3. the written agreement of CalPERS, and

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

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

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

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

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

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: AEGON, et al., Agree to Withdraw Amended Claims
-----------------------------------------------------------
Three entities filed statutory securities and common law fraud
claims against Enron Corp.:

    Claimant                                    Claim No.
    --------                                    ---------
    Principal Capital Management LLC               7602
    Pacific Investment Management Company LLC      8044
    AEGON USA Investment Management, LLC           8133

The Claims alleged misrepresentations and omissions in connection
with the Claimants' purchases of certain senior secured notes
sponsored by Enron and issued by Osprey Trust and Osprey I, Inc.,
of:

    (i) $1.4 billion aggregate principal amount of 8.31% Senior
        Secured Notes due 2003;

   (ii) $750 million aggregate principal amount of 7.79% Senior
        Secured Notes due 2003; and

  (iii) EUR315 million aggregate principal amount of 6.375% Senior
        Secured Notes due 2003.

On February 21, 2003, Enron commenced an adversary proceeding
against, among others, Whitewing Associates, L.P., in connection
with the Osprey Note structure.  Enron later filed an amended
complaint to include the Claimants as defendants.

On February 26, 2004, the parties to the Whitewing Litigation
entered into a settlement agreement, providing, among other
things, Enron's payment of an aggregate $75 million as cash
settlement consideration and an allowed $3.6 billion general
unsecured claim against Enron.  The Court-approved Settlement
also provided that the Fraud Claims asserted by Claimants in
their Original Proofs of Claims were expressly preserved.

Pursuant to the Settlement Agreement and Enron's express
agreement, the Claimants amended the Claims to eliminate all
claims other than the Osprey Fraud Claims, which were realleged
in their entirety.  On April 13, 2004, Principal, PIMCO and Aegon
filed Amended Claim Nos. 24743, 24741 and 24742.

The Debtors objected to the Amended Claims.

Pursuant to a settlement agreement with various third parties,
the Claimants have agreed to withdraw the Amended Claims.

Pursuant to Rule 3006 of the Federal Rules of Bankruptcy
Procedure, the Claimants seek the Court's authority to withdraw
the Amended Claims.

A. Brent Truitt, Esq., at Hennigan, Bennett & Dorman LLP, in New
York, argues that the Claimants should be allowed to withdraw the
Amended Claims without prejudice, based on these factors:

    (i) The Claimants exercised diligence in bringing the Motion
        to Withdraw.  The Claimants reached the Third Party
        Settlement, which obviated the need for continued
        prosecution of the Amended Claims, only within the last
        few months.  Furthermore, since the time the Settlement
        was reached, Enron has not had to take any further court
        action with respect the Amended Claims.

   (ii) There has been no "undue vexatiousness" on the Claimants'
        part.  To the contrary, the Claimants filed the Amended
        Claims to preserve their rights and claims as against
        Enron.  The only action Enron has been required to take in
        court with respect to those claims was the filing of an
        objection back in March, before the Third Party Settlement
        was reached.  Now that they have reached that settlement,
        the Claimants are promptly seeking to withdraw the Amended
        Claims with prejudice, without the need for further
        litigation and without any payment or distribution by
        Enron.

  (iii) The resolution of the Amended Claims has not progressed
        to the extent that would necessitate a great deal of
        effort and expense on Enron's part.  To the contrary, all
        that Enron has had to do up to this point is to prepare
        and file the Objection.

   (iv) There will be no duplicative expense of relitigation, as
        there will be no relitigation -- the Claimants are seeking
        to withdraw their claims with prejudice.

    (v) The Claimants' explanation for the need to withdraw the
        Amended Claims warrants the Court's authorizing
        them to do so.  Their settlement with third parties
        requires them to do so and they no longer intend to
        continue to prosecute the claims.

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)


EXCALIBUR IND: Balance Sheet Upside-Down by $14.1 Mil. at June 30
-----------------------------------------------------------------
Excalibur Industries, 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.

                            Net Sales

Net sales for continued operations of Shumate Machine Works
increased by $67,156, or an increase of 7.4%, to $979,410, for the
three months ended June 30, 2005, from $912,254 for the three
months ended June 30, 2004.  This increase in sales results
primarily from overall increased demand for oil and gas drilling
products and components that Shumate produces.  This increased
demand resulted in higher volumes and higher pricing of the
products and components that Shumate manufactures during the
second quarter of 2005.

                         Operating Loss

The Company incurred an operating loss of $1,017,673 for the three
months ended June 30, 2005, an increase of $362,122 as compared to
an operating loss of $655,551 for the three months ended June 30,
2004.  The Company had larger operating losses in 2005 as compared
to 2004 primarily because of higher general and administrative
expenses and research and development expenses partially offset by
higher revenues and lower depreciation expenses.

                 Liquidity and Capital Resources

The Company financed its operations, acquisitions, debt service
and capital requirements through cash flows generated from
operations, debt financing, capital leases, and issuance of equity
securities.  The Company's working capital deficit at June 30,
2005 was $15,912,901.  The Company had cash of $231,459 and a bank
overdraft of $873,757 as of June 30, 2005, compared to having cash
of $82,904 and a bank overdraft of $1,985,940 at June 30, 2004.  
The difference results primarily from additional borrowings.

A full-text copy of Excalibur's Quarterly Report is available for
free at http://ResearchArchives.com/t/s?11e

Excalibur Industries, Inc., serves the energy field services
market through its Shumate Machine Works operating subsidiary.  
With its roots going back more than 25 years, Shumate is a
contract machining and manufacturing company that makes products,
parts, components, assemblies and sub-assemblies for its customers
designed to their specifications.  The Company's state-of-the-art
3-D modeling software, computer numeric controlled machinery and
manufacturing expertise are contracted by its customers' research
and development, engineering and manufacturing departments to
ensure optimization and timely desired results for their products.  
The diverse line of products Shumate manufactures includes
expandable tubular launchers and liner hangers for oil & gas field
service applications, blow-out preventers, top drive assemblies,
directional drilling products, natural gas measurement equipment,
control & check valves and sub-sea control equipment used in
energy field service.  The Company employs about 35 people at its
23,000 square foot plant in Conroe, Texas, north of Houston.

As of June 30, 2005, Excalibur Industries' total liabilities
exceed its total assets by $14,128,939.

As reported in the Troubled Company Reporter on May 26, 2005,
Excalibur Industries entered into a restructuring agreement with
Stillwater National Bank, its secured lender.  That loan is
secured by a pledge of 100% of Excalibur Holdings, Inc.'s stock in
Shumate Machine Works, Inc.  Excalibur Holdings is a subsidiary of
Excalibur Industries, and filed a voluntary petition for
protection under Chapter 7 of the U.S. Bankruptcy Code (Bankr.
S.D. Tex. Case No. 05-33543) on March 9, 2005.  Excalibur Holdings
is represented in its chapter 7 proceeding by:

          Jean Petersen Sumers, Esq.
          19901 Southwest Freeway
          Sugar Land, TX 77479
          Telephone (713) 850-7955
          Fax (713) 850-8917

The Chapter 7 Trustee overseeing the liquidation of Excalibur
Holdings' estate is:

          Kenneth R. Havis
          114 N. 10th St.
          P.O. Box 750
          Navasota, TX 77868
          Telephone (936) 825-7982

Stillwater, represented by:

          Thomas S. Henderson, Esq.
          Munsch Hardt Kopf & Harr, P.C.
          700 Louisiana, Suite 4600
          Houston, TX 77002-2732
          Telephone (713) 222-1470

has obtained relief from the automatic stay in Excalibur Holdings'
chapter 7 case.  

The United States Trustee will convene a meeting of Excalibur
Holdings' creditors under Sec. 341(a) of the Bankruptcy Code on
September 20, 2005, at 10:00 a.m., at 515 Rusk, Suite 3401, in
Houston, Texas.  


FIRST FRANKLIN: Fitch Puts BB+ Rating on $3MM Private Certificates
------------------------------------------------------------------
First Franklin Mortgage Loan Trust, mortgage pass-through
certificates, series 2005-FF7, are rated by Fitch Ratings:

    -- $706,258,000 classes A-1, A-2, A-3, A-4 and A-5 'AAA';
    -- $32,631,000 class M-1 certificates 'AA+';
    -- $29,949,000 class M-2 certificates 'AA+';
    -- $18,327,000 class M-3 certificates 'AA';
    -- $16,092,000 class M-4 certificates 'AA-';
    -- $14,751,000 class M-5 certificates 'A+';
    -- $13,410,000 class M-6 certificates 'A';
    -- $12,069,000 class M-7 certificates 'A-';
    -- $10,728,000 class M-8 certificates 'BBB+';
    -- $9,387,000 class M-9 certificates 'BBB';
    -- $6,705,000 class M-10 certificates 'BBB';
    -- $6,705,000 class M-11 certificates 'BBB-';
    -- $3,129,000 privately offered class M-12 certificates 'BB+'.

The 'AAA' rating on the senior certificates reflects the 21.00%
total credit enhancement provided by the 3.65% class M-1, the
3.35% class M-2, the 2.05% class M-3, the 1.80% class M-4, the
1.65% class M-5, the 1.50% class M-6, the 1.35% class M-7, the
1.20% class M-8, the 1.05% class M-9, the 0.75% class M-10, the
0.75% class M-11, the 0.35% class M-12 and the 1.55% initial
overcollateralization.  

All certificates have the benefit of monthly excess cash flow to
absorb losses.  An interest rate swap agreement with Swiss Re
Financial Products Corporation guaranteed by Swiss Re (rated
'AA+'/Stable Outlook by Fitch) is also available to cover interest
shortfalls and losses.  In addition, the ratings reflect the
quality of the loans, the integrity of the transaction's legal
structure as well as the primary servicing capabilities of
Countrywide Home Loans Servicing LP (rated 'RPS1' by Fitch) and
U.S. Bank National Association as trustee.

The mortgage loans are divided into two groups of first-lien,
fixed-rate and adjustable mortgage loans.  The weighted average
loan rate of the Group I mortgage loans is approximately 6.836%.  
The weighted average remaining term to maturity is 354 months.  
The average cut-off date principal balance of the mortgage loans
is approximately $169,300.  The weighted average original loan-to-
value ratio is 82.41% and the weighted average Fair, Isaac & Co.  
score was 638.  The properties are primarily located in California
(30.38%), Illinois (9.56%) and Florida (6.45%).

The weighted average loan rate of the Group II mortgage loans is
approximately 6.721%.  The WAM is 356 months.  The average cut-off
date principal balance of the mortgage loans is approximately
$303,213.  The weighted average OLTV ratio is 82.69% and the
weighted average Fair, Isaac & Co. score was 660.  The properties
are primarily located in California (47.69%), Florida (6.60%) and
New York (5.44%).


H&E EQUIPMENT: To Restate 2002 and 2003 Financial Statements
------------------------------------------------------------
H&E Equipment Services L.L.C. (H&E) will restate its audited
financial results for the fiscal years ended December 31, 2002 and
2003, to reflect certain adjustments relating primarily to the
treatment of deferred taxes in connection with its combination
with ICM Equipment Company LLC in 2002.

The Company estimates that the impact of these adjustments on net
income for 2003 and 2002 will be positive, and that the
adjustments will have no impact to EBITDA or Adjusted EBITDA for
2003 and 2002.  The Company estimates that these adjustments will
decrease its net loss by approximately $5.4 million to $46.1
million for 2003 and $4.8 million to $8.2 million for 2002.

While the Company has not completed its financial statements for
2004, it currently expects to report net loss for 2004 of
approximately $13.7 million, as compared to its original guidance
of a net loss of $13.6 million.  The Company currently expects
that it will report EBITDA for 2004 of approximately $79.6
million, as compared to its original guidance of $79.8 million.
The Company expects to report net income for the first quarter of
2005 of approximately $1.0 million, as compared to its original
guidance of $1.3 million.

Pending completion of the review of these adjustments, the Company
is delaying announcing earnings for the second quarter ended June
30, 2005.  Second quarter revenue is expected to be approximately
$137.7 million, an increase of $24.0 million, or 21.1%, from the
prior year period.  Net income is expected to be in the range of
$4.0 million to $4.5 million.

                       Lender Waivers

The Company has discussed the accounting adjustments with the
lenders under its revolving credit facility, and its revolving
credit facility lenders have waived the non-compliance by the
Company with, and the effects of non-compliance under, various
representations and non-financial covenants affected by the
accounting adjustments in connection with the restatements.
Accordingly, the Company has full access to its revolving credit
facility.

These adjustments to the Company's accounting practices have been
discussed with its independent registered public accounting firm,
BDO Seidman L.L.P.  The Company will include the restated results
for the fiscal years ended December 31, 2003 and 2002 in its 2004
Annual Report on Form 10-K.  In addition to the principal
adjustments described above, the restatement will impact
individual line items within the Company's financial statements.
In the interim, investors should no longer rely on the financial
statements currently on file with the SEC in the Company's Forms
10-K for the fiscal years ended December 31, 2003 and 2002 and the
related auditor's report thereon, and the unaudited financial
statements for all interim periods through September 30, 2004.

                    Form 10-Q Filing Delay

As previously reported, the Company delayed filing of its 2004
Form 10-K and Forms 10-Q for the quarters ended March 31, 2005 and
June 30, 2005 pending completion by BDO of the re-audit of its
2002 and 2003 annual financial statements and the issuance of new
audit opinions thereon.  The Company will delay finalizing results
for the second quarter of 2005 and the filing of our 10-Q for the
quarter ended June 30, 2005 until the work necessary to restate
our financial results for prior fiscal year and the re-audits are
completed, and the Company reports its final results for 2004 and
its unaudited results for first quarter 2005.  The estimates,
earnings, other selected financial data and 2005 outlook provided
in this press release are preliminary and subject to change based
on completion of prior year audits.

H&E Equipment Services L.L.C. is one of the largest integrated
equipment rental, service and sales companies in the United States
of America, with an integrated network of 39 facilities, all of
which have full service capabilities, and a workforce that
includes a highly-skilled group of service technicians and
separate and distinct rental and equipment sales forces.  In
addition to renting equipment, the Company also sells new and used
equipment and provides extensive parts and service support.  This
integrated model enables the Company to effectively manage key
aspects of its rental fleet through reduced equipment acquisition
costs, efficient maintenance and profitable disposition of rental
equipment.  The Company generates a significant portion of its
gross profit from parts sales and service revenues.

At Mar. 31, 2005, H&E Equipment Services L.L.C.'s balance sheet
showed a $39,368,000 stockholders' deficit, compared to a
$40,403,000 deficit at Dec. 31, 2004.


HUNTSMAN INT'L: Moody's Rates $1.56 Billion Sr. Sec. Debts at Ba3
-----------------------------------------------------------------
Moody's Investors Service assigned a B1 corporate family rating to
Huntsman International LLC.  The B1 rating was related to the
recent merger of two of Huntsman Corporation's subsidiaries
(Huntsman, which also has a B1 corporate family rating).  Huntsman
recently completed an all-stock merger of two of its wholly owned
subsidiaries, Huntsman LLC (HLLC) and Huntsman International LLC
(HI).  HLLC merged with and into HI, with HI being the surviving
entity.  HI now holds the combined assets and liabilities of HI
and HLLC.  HI is the direct obligor of all of HI and HLLC existing
debt securities and the recently executed and rated credit
facilities totaling $2.5 billion.  These rated credit facilities
replaced the prior credit facilities located at HI and HLLC.   
Moody's also made a variety of ratings adjustments as a result of
the merger.  The outlook for Huntsman and HI is positive.

Ratings withdrawn:

   -- Huntsman International LLC

      * Guaranteed senior secured revolving credit facility,
        $375 million due 2008 -- Ba3

      * Guaranteed senior secured multi currency facility,
        $50 million due 2008 -- Ba3

      * Guaranteed senior secured term loan B, $1.136 billion due
        2010 -- Ba3

   -- Huntsman LLC

      * Guaranteed senior secured revolving credit facility,
        $350 million due 2009 -- Ba3

      * Guaranteed senior secured term loan B, $665 million due
        2010 -- B1

      * Corporate Family Rating -- B1

   -- Huntsman International Holdings LLC

      * Corporate Family Rating -- B1

Ratings Assigned:

   -- Huntsman International LLC

      * Corporate Family Rating -- B1

Huntsman Corporation is a global manufacturer of differentiated
and commodity chemical products.  Huntsman's products are used in
a wide range of applications, including those in the adhesives,
aerospace, automotive, construction products, durable and
non-durable consumer products, electronics, medical, packaging,
paints and coatings, power generation, refining and synthetic
fiber industries.  Huntsman had revenues for the year ended
December 31, 2004 of $11.5 billion.


INFOUSA INC: Gupta Bid Rejection Cues Moody's to Hold Ratings
-------------------------------------------------------------
Moody's Investors Service affirmed all of InfoUSA Inc.'s credit
ratings.  The affirmation follows the company's recent
announcement that a special committee of the board of InfoUSA
determined that it did not intend to move forward with an
acquisition proposal by Vin Gupta, chairman and CEO of the
company.  Mr. Gupta announced that he intends to withdraw his
proposal to acquire all of the publicly held common shares of
InfoUSA in a debt-financed transaction.

The negative ratings outlook remains unchanged reflecting
InfoUSA's announcement that it will continue to explore strategic
alternatives.

If the company decides not to pursue a strategic transaction, the
rating outlook could be changed to stable.

Moody's affirmed these ratings:

   * $50 million senior secured revolving credit facility due
     2007, rated Ba3

   * $94 million senior secured first lien term loan A due 2009,
     rated Ba3

   * $69 million senior secured term loan B due 2010, rated Ba3

Headquartered in Omaha, Nebraska, InfoUSA Inc. is a leading
provider of business and consumer information, data processing and
database marketing services.  Revenues for the twelve months ended
June 30, 2005 were approximately $369 million.


INTERSTATE BAKERIES: PI Claimant Wants Stay Lifted to Pursue Claim
------------------------------------------------------------------
As previously reported, the U.S. Bankruptcy Court for the Western
District of Missouri authorized Brenda Sieckmann to proceed to
trial a personal injury matter then pending in the Circuit Court
of the City of St. Louis.  

On July 13, 2005, Ms. Sieckmann obtained a $9,750,500 judgment.
The Debtors and their insurance carriers advised Ms. Sieckmann
that their obligation was limited to a $1,000,000 self-insured
retention.  Ms. Sieckmann intended to collect $8,750,500 from the
insurance companies.

"Notwithstanding testimony and representations elicited during
discovery and trial of the matter, the insurance companies are
now contending that their coverage is not as represented," Joanne
B. Stutz, Esq., at Evans & Mullinix, P.A., in Shawnee, Kansas,
points out.

In addition, Ms. Sieckmann has learned that a $1,000,000
insurance policy was issued that would potentially cover, as
primary coverage, the initial $1,000,000 SIR.

The parties' dispute has prompted one of the insurers, National
Union Fire Insurance Company of Pittsburgh, Pennsylvania, to
request and receive relief from the automatic stay to pursue a
declaratory judgment action to determine the Debtors' liability,
Ms. Stutz reminds the Court.

According to Ms. Stutz, Ms. Sieckmann intends to file a petition
with the St. Louis Circuit Court, alleging negligent and
fraudulent misrepresentations against the Debtors and other
parties, concerning the extent of her insurance coverage.  Ms.
Sieckmann believes that the Debtors are necessary parties to the
St. Louis Action and may even have their own cause of action
against their insurers.

By this motion, Ms. Sieckmann asks the Bankruptcy Court to lift
the automatic stay to proceed against the Debtors on the issues
of negligent and fraudulent misrepresentation.

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)


INTERSTATE BAKERIES: Wants to Ink Long-Term Extension of CBAs
-------------------------------------------------------------
J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP,
in Chicago, Illinois, relates that during the last several
months, Interstate Bakeries Corporation and its debtor-affiliates
have negotiated and entered into side agreements and extensions
with respect to their Collective Bargaining Agreements on a
frequent basis in the ordinary course of their business, all as
permitted by the Court's Nov. 12, 2004 Order authorizing the
Debtors to:

   (a) comply with existing grievance procedures under the CBAs;

   (b) engage in arbitration;

   (c) pay the fees and costs of the arbitrators;

   (d) liquidate union grievances;

   (e) implement existing agreements and enter into and implement
       ongoing agreements with unions in connection with CBAs;
       and

   (f) extend certain expired or expiring CBAs for up to one
       year.

The Debtors, Mr. Ivester continues, have also made significant
progress in their restructuring efforts.  In particular, the
Debtors have already begun an exhaustive review of each of their
10 profit centers.  By the time the profit center review process
is concluded, the Debtors hope to have achieved an operational
structure on which they can base a long-term business plan,
negotiate a plan of reorganization and, ultimately, emerge from
Chapter 11.

By this motion, the Debtors seek the Court's permission to enter
into and implement agreements that extend the terms of related
CBAs up to five years and may modify, amend, replace or otherwise
change the terms and conditions of employment, including changing
wages and benefits and changing work rules or operational
guidelines.

The Debtors do not seek to assume, modify or reject any CBAs or
related agreements, or modify retiree benefits as of this time.  
The Debtors reserve all of their rights with respect to the final
treatment of their CBAs in their Chapter 11 cases.

Given the number of CBAs and their confidential nature, the
Debtors believe that it is impractical to file individual motions
seeking approval of each and every Long-term Extension.

The Debtors seek to implement a process that:

   -- allows for efficient negotiation and approval of Long-term
      Extensions;

   -- makes clear that notwithstanding the postpetition
      negotiation of the Extensions, all parties' rights are
      preserved until a critical mass of agreements is reached
      and would warrant assumption; and

   -- preserves an appropriate level of confidentiality in
      respect of public disclosure of the terms of the CBAs while
      allowing the Debtors' stakeholders an appropriate
      opportunity to be apprised of and comment on the Long-term
      Extensions as they are finalized.

Accordingly, the Debtors propose:

   (1) to establish notice procedures for approval of Long-term
       Extensions comparable to that currently in use under the
       Collective Bargaining Procedures Order; and

   (2) that certain provisions be required to be a part of any
       Long-term Extension.

                        Notice Procedures

The Debtor ask the Court to approve these Notice Procedures for
the approval of Long-term Extensions:

   (a) The Debtors will provide the Notice Parties and each of
       the CBA bargaining unit 10 calendar days before
       implementing a Long-term Extension;

   (b) Any objection to a Long-term Extension must be delivered
       to the Debtors and the CBA bargaining unit within 10
       calendar days of the Notice Party's receipt of the Notice;

   (c) If no objection is received within the 10-day period, the
       Long-term Extension will be deemed approved without any
       further action by the Debtors or the Court;

   (d) If a Notice Party objects before the expiration of the
       objection period, and the Debtors and the Notice Party are
       unable to resolve the objection, the Debtors will not be
       authorized to implement the Long-term Extension without
       further Court order, which the Debtors may seek in their
       sole discretion.

                  Long-Term Extension Provisions

The Debtors also seek the Court's authority to include term
provisions that:

     (i) extend the term of the relevant CBA for up to five
         years, irrespective of whether the term of the CBA has
         previously expired by its terms;

    (ii) establish new or revised rates for wages, salaries,
         commissions and benefits of all kinds which may include
         reductions of current rates and establishing controls on
         the inflation of these rates;

   (iii) modify existing work rules or operational guidelines,
         including establishing work rules or operational
         guidelines related to the profit center restructurings
         and their future operations;

    (iv) provide for a commitment by the Debtors to assume the
         CBA as amended by the Long-term Extension in connection
         with a plan of reorganization in the event that all of
         the various CBA bargaining units of a particular union
         have agreed to Long-term Extensions; and

     (v) provide for a commitment by the Debtors to seek approval
         in connection with a plan of reorganization of a program
         whereby a portion of the reorganized Debtors' profits
         over a certain level would be used to reimburse union
         members for the economic value of concessions given by
         them as a part of the Long-term Extension.

"[T]hese procedures strike the desired balance of providing the
Debtors and the Unions with sufficient flexibility to address
applicable circumstances while giving key parties-in-interest
notice and an opportunity to object to any Long-term Extensions,"
Mr. Ivester maintains.  "Moreover, the aforementioned process
protects the confidentiality of the sensitive commercial
information likely to be included in the Long-term Extensions."

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



INTERSTATE BAKERIES: Names Richard Seban as Chief Mktg. Officer
---------------------------------------------------------------
Richard C. Seban, a veteran executive in the consumer packaged
goods field, with 30 years experience in sales, marketing and new
product development, has been named chief marketing officer at
Interstate Bakeries Corporation.  The appointment comes at a time
when IBC is reinvigorating product development and reenergizing
sales and marketing by placing a premium on speed, focus and
innovation.

Most recently, Mr. Seban was president and chief operating officer
of High Liner Foods, Inc. (TSX: HLF), a Nova Scotia-based
processor and marketer of superior frozen seafood and pasta
products.  From 1983 to 1995, he held several positions at Sara
Lee Bakery, including serving as vice president of customer
marketing.

From 1995 to 2000, Mr. Seban was vice president of consumer
products at Rich Seapak Corporation, where he managed sales,
marketing and customer service functions for the company's
warehouse clubs and consumer products divisions.  Earlier in his
career, he held positions at the Campbell Soup Company and
Henri's Food Products.

Jacques Roizen, a director with Alvarez & Marsal who has been
serving as interim chief marketing officer at IBC, will move into
the position of executive vice president of marketing.

"Rich Seban has an excellent sales and marketing background, a
superb reputation and strong relationships in the retail and
wholesale trade," said Tony Alvarez, chief executive officer of
IBC.  "IBC's future depends on building a strong marketing
platform that ensures that our products resonate in the
marketplace, with both retailers and consumers alike.  Rich's
depth of experience will enable us to continue to build a solid
platform for long-term growth and success."

While at High Liner Foods, Mr. Seban, who had full responsibility
for the U.S. division, led the company into new strategic business
channels and successfully launched major new products.  At Sara
Lee, he had a significant impact - restaging the core product
line, creating and executing a new advertising campaign,
introducing new products and re-engineering the sales, pricing and
promotion systems.

IBC recently has been embarking on a major effort to optimize its
powerful brands and reconnect the company with market trends,
executing a number of significant marketing, sales and development
initiatives over the past seven months alone.

In July, IBC re-launched its iconic Wonder(R) brand, the top
selling brand of bread in the United States.  Leveraging robust
R&D capabilities, the company introduced Wonder(R) White Bread
Fans 100% Whole Grain, the first bread designed specifically for
people who love the taste and texture of white bread.  IBC also
rolled out Wonder(R) Kids, an enriched white bread, and re-
launched existing Wonder(R) SKUs under, Wonder Classic(R) and
Wonder(R) Classic Sandwich.

In addition, the company mounted a national television and
magazine advertising campaign to capitalize and build on the
success of Baker's Inn(TM), its brand of super premium bread.  
With outstanding consumer feedback and strong sales, Baker's
Inn(TM) was named a top 10 "brand to watch" by Information
Resources and the best new product of the year at FMI in 2004.

In the sweet snack division, IBC established promotional
partnerships with organizations including Warner Bros., launching
limited-edition Chocolicious Wonka Cakes in connection with the
premier of Charlie and the Chocolate Factory.  The partnership,
which is the first of several planned for the next few years,
comes on the heels of the highly successful promotion of green
creme-filled Hostess(R) Twinkies(R) in connection with the DVD
release of Shrek 2 last November.

Other major initiatives included redesigning packaging for the
entire Hostess(R) line, fusing the brand's traditional colors
with new graphic elements and product photography to create a new
contemporary feel, and mounting a major promotional and public
relations campaign in connection with Twinkies' 75th anniversary.
Again taking advantage of the company's strength in R&D, IBC also
has plans underway to roll out new products under the Hostess(R)
brand in select markets over the next several months.

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)


ISTAR FINANCIAL: CEO Adopts New Rule 10b5-1 Stock Trading Plan
--------------------------------------------------------------
iStar Financial Inc. (NYSE: SFI) disclosed that Jay Sugarman,
chairman and chief executive officer, has adopted a new stock
trading plan to sell a portion of his company stock over time as
part of a strategy for asset diversification and liquidity.

The trading plan was adopted in accordance with guidelines
specified by the Securities and Exchange Commission's Rule 10b5-1
under the Securities Exchange Act of 1934.  Rule 10b5-1 allows
corporate officers and directors to adopt written, pre-arranged
stock trading plans when they do not have material, non- public
information.  Using these plans, insiders can gradually diversify
their investment portfolios, can spread stock trades out over an
extended period of time to reduce any market impact and can avoid
concerns about whether they had material, non-public information
when they sold their stock.

Under this plan, Mr. Sugarman may sell up to 480,000 shares,
subject to the satisfaction of minimum price conditions and other
contingencies.  Sales under the plan may commence in September
2005 and will end in July 2007.  The plan contemplates sales of up
to 12,000 shares during each of the first six calendar months of
the plan, and up to 24,000 shares during each of the remaining
calendar months of the plan.  Any shares not sold during a
particular month will be added to the number of shares available
for sale in subsequent months.  The 480,000 shares available for
sale under the plan represent approximately 13.4% of the total
number of shares held by Mr. Sugarman, including shares subject to
currently exercisable stock options.  If Mr. Sugarman completes
all the planned sales of shares under his Rule 10b5-1 Plan, he
would beneficially own approximately 3.1 million shares of iStar
Financial's outstanding stock including exercisable stock options.

In accordance with Mr. Sugarman's trading plan, the sales will
occur from time to time, and will be under the direction of Mr.
Sugarman's broker.  The transactions under his plan will commence
no earlier than Sept. 12, 2005, and will be disclosed publicly
through Form 144 and Form 4 filings with the Securities and
Exchange Commission.

iStar Financial -- http://www.istarfinancial.com/-- is the    
leading publicly traded finance company focused on the commercial  
real estate industry.  The Company provides custom-tailored  
financing to high-end private and corporate owners of real estate  
nationwide, including senior and junior mortgage debt, senior and  
mezzanine corporate capital, and corporate net lease financing.   
The Company, which is taxed as a real estate investment trust,  
seeks to deliver a strong dividend and superior risk-adjusted  
returns on equity to shareholders by providing the highest quality  
financing solutions to its customers.

                        *     *     *

As reported in the Troubled Company Reporter on June 24, 2005,  
Fitch Ratings has revised iStar Financial Inc.'s Rating Outlook to
Positive from Stable.  Fitch also affirmed:

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

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


J.P. MORGAN: Moody's Places Low-B Ratings on Nine Cert. Classes
---------------------------------------------------------------
Moody's Investors Service upgraded the ratings of two classes and
affirmed the ratings of seventeen classes of J.P. Morgan
Commercial Mortgage Securities Corp., Commercial Mortgage
Pass-Through Certificates, Series 2002-C2 as follows:

   * Class A-1, $186,763,481, Fixed, affirmed at Aaa
   * Class A-2, $606,587,000, Fixed, affirmed at Aaa
   * Class X-1, Notional, affirmed at Aaa
   * Class X-2, Notional, affirmed at Aaa
   * Class B, $41,256,000, WAC Cap, upgraded to Aa1 from Aa2
   * Class C, $10,314,000, WAC Cap, upgraded to Aa2 from Aa3
   * Class D, $28,363,000, WAC Cap, affirmed at A2
   * Class E, $14,182,000, WAC, affirmed at A3
   * Class F, $19,339,000, WAC, affirmed at Baa2
   * Class G, $12,892,000, WAC, affirmed at Baa3
   * Class H, $15,471,000, WAC Cap, affirmed at Ba1
   * Class J, $11,603,000, WAC Cap, affirmed at Ba2
   * Class K, $3,868,000, WAC Cap, affirmed at Ba3
   * Class L, $7,736,000, WAC Cap, affirmed at B1
   * Class M, $3,867,000, WAC Cap, affirmed at B2
   * Class N, $5,157,000, WAC Cap, affirmed at B3
   * Class SP-1, $5,337,032, Fixed, affirmed at Ba1
   * Class SP-2, $8,139,264, Fixed, affirmed at Ba2
   * Class SP-3, $5,482,125, Fixed, affirmed at Ba3

As of the August 12, 2005 distribution date, the transaction's
aggregate balance has decreased by approximately 4.6% to
$1.0 billion from $1.1 billion at securitization.  The
Certificates are collateralized by 108 mortgage loans.  The loans
range in size from less than 1.0% to 11.7% of the pool, with the
top ten loans representing 44.1% of the pool.  The pool consists
of four shadow rated loans, representing 25.4% of the pool, and a
conduit component, representing 74.6% of the pool.  Two loans,
representing 2.2% of the pool, have defeased and are
collateralized by U.S. Government securities.

One loan has been liquidated from the pool resulting in a realized
loss of approximately $775,000.  There are no loans currently in
special servicing.  Twenty-two loans, representing 24.9% of the
pool, are on the master servicer's watchlist.

Moody's was provided with partial or full year 2004 operating
results for 95.3% of the performing loans.  Moody's loan to value
ratio for the conduit component is 87.1%, compared to 89.8% at
securitization.  Based on Moody's analysis, 3.6% of the conduit
pool has a LTV greater than 100.0% compared to 0.0% at
securitization.  The upgrade of Classes B and C is due to stable
overall pool performance and increased subordination levels.

The largest shadow rated loan is the Simon Portfolio II Loan
($115.5 million - 11.7%), which is secured by portions of two
regional malls totaling 1.9 million square feet and a 494,000
square foot power center.  The collateral securing the loan totals
1.0 million square feet.  The portfolio includes:

   -- Century III Mall (Pittsburg, Pennsylvania; 64.0% allocated
      balance; 559,000 square feet);

   -- Longview Mall (Longview, Texas; 24.1%; 207,800 square feet);
      and

   -- Highland Lakes Shopping Center (Orlando, Florida; 11.9%;
      281,000 square feet).

The portfolio is 79.6% occupied as of March 2005, compared to
86.0% at securitization.  In-line tenant sales have declined to
$261.00 per square foot for calendar year 2004 from $287.00 per
square foot in calendar year 2001.  The loan sponsor is the Simon
Property Group (Moody's preferred stock rating Baa3; on review for
possible upgrade), a publicly traded REIT.  The portfolio is also
encumbered by three subordinate loans totaling $19.0 million,
which secure Classes SP-1, SP-2 and SP-3.  Moody's current shadow
rating on the senior loan is Baa3, the same as at securitization.

The second shadow rated loan is the 75/101 Federal Street Loan
($96.0 million - 9.8%), which is secured by an 812,000 square foot
office property located in the financial district of Boston,
Massachusetts.  The property is approximately 78.7% leased,
compared to 95.0% at securitization.  The decline in occupancy is
largely due to the loss of two tenants at lease expiration which
occupied a combined 21.6% of the property at securitization.  The
property's largest tenants are Edwards and Angell (8.7% NRA; March
2008 expiration) and Sherin and Lodgen, LLC (5.0% NRA; July 2014
expiration).  Property performance has been impacted by a decline
in the Boston office market.  Market rents have declined by
approximately 15.0% since securitization.  The loan sponsors are
Equity Office Properties (Moody's preferred stock rating Baa3;
stable outlook) and General Motors Employees Pension Trust.
Moody's current shadow rating is Ba1, compared to Aa3 at
securitization.

The third shadow rated loan is the 600 Fifth Avenue Loan
($24.0 million - 2.4%), which is secured by a leased fee interest
in a land parcel located on the northwest corner of Fifth Avenue
and 48th Street in New York City.  The parcel is improved with a
354,000 square foot office building that is part of the
Rockefeller Center Complex.  Moody's current shadow rating is Aaa,
the same as at securitization.

The fourth shadow rated loan is the U-Haul Portfolio Loan
($14.9 million - 1.5%), which is secured by five self storage
facilities located in California (2), Florida (2) and South
Dakota.  The portfolio is 80.1% occupied, compared to 88.6% at
securitization. Despite the decline in occupancy the portfolio's
net cash flow has been stable since securitization.  Moody's
current shadow rating is Baa1, the same as at securitization.

The top three conduit loans represent 11.0% of the outstanding
pool balance.  The largest conduit loan is the ARC Portfolio A
Loan ($44.4 million - 4.5%), which is secured by 11 manufactured
housing communities containing 2,222 pads.  The communities are
located in Texas (5), Colorado (3), California, Kansas and
Illinois.  The portfolio is 82.8% occupied, compared to 95.5% at
securitization.  Despite the drop in occupancy, the portfolio's
net cash flow has been stable since securitization.  The loan
sponsor is Affordable Residential Communities, a major owner of
manufactured housing communities.  Moody's LTV is 85.6%, compared
to 88.1% at securitization.

The second largest conduit loan is the Long Island Industrial
Portfolio II Loan ($38.2 million - 3.9%), which is secured by a
portfolio of seven industrial properties located in Long Island,
New York.  The portfolio totals 859,000 square feet, with
properties ranging in size from 57,700 to 241,000 square feet.  
The portfolio is 91.4% occupied, compared to 97.9% at
securitization.  Major tenants include:

   -- Air Techniques (12.1% NRA; September 2008 expiration);
   -- J.C. Penney (11.6% NRA; July 2011 expiration); and
   -- Ultimate Precision Metal (7.6% NRA; September 2006
      expiration).

Moody's LTV is 99.7%, compared to 92.6% at securitization.

The third largest conduit loan is the Cameo Apartments Loan
($25.5 million - 2.6%), which is secured by a 102-unit multifamily
property located in New York City.  The property was constructed
in 2001 and is 100.0% occupied, the same as at securitization.   
Moody's LTV is 88.5%, compared to 97.0% at securitization.

The pool's collateral is a mix of:

         * retail (29.5%),
         * multifamily (25.3%),
         * industrial and self storage (16.9%),
         * office (15.5%),
         * manufactured housing (7.3%),
         * ground lease (2.4%),
         * U.S. Government securities (2.2%), and
         * other (0.9%).

The collateral properties are located in 31 states.  The highest
state concentrations are:

         * Massachusetts (11.3%),
         * New York (11.2%),
         * Texas (10.6%),
         * Illinois (9.9%), and
         * Florida (9.1%).

All of the loans are fixed rate.


JOHN Q. HAMMONS: JQH Finance to Buy 8-7/8% First Mortgage Notes
---------------------------------------------------------------
JQH Finance, LLC, is commencing an offer to purchase for cash any
and all of the outstanding $499 million principal amount of Series
B 8-7/8% First Mortgage Notes due 2012 issued by John Q. Hammons
Hotels, L.P. and John Q. Hammons Hotels Finance Corporation III,
affiliates of John Q. Hammons Hotels, Inc., in connection with the
pending merger between an affiliate and John Q. Hammons Hotels,
Inc.

JQH Finance is also soliciting consents from the holders of the
notes to approve certain amendments to the indenture under which
the notes were issued.  The tender offer is contingent on, among
other things:

   -- the receipt of consents necessary to approve such amendments
      to the indenture;

   -- at least a majority of the notes being validly tendered and
      not withdrawn;

   -- the consummation of the pending merger;

   -- the availability of funds necessary to complete the tender
      offer; and

   -- other conditions described in the Offer to Purchase and
      Consent Solicitation Statement and the Consent and Letter of
      Transmittal, each dated Aug. 26, 2005, and related
      documents.

The total consideration to be paid for each $1,000 principal
amount of notes tendered and accepted for payment will be
determined on the second business day preceding the consent date
of the tender offer, using the present value on the payment date
of the sum of $1,044.38 plus interest that would be paid from the
payment date through May 15, 2007.  The present value will be
determined using the yield to maturity of the 3.125% U.S. Treasury
Note due May 15, 2007, plus a fixed spread of 50 basis points.  
The total consideration for each note tendered includes a consent
payment of $30.00 per $1,000 principal amount of notes to holders
who validly tender their notes and deliver their consents prior to
5:00 p.m., New York City time, on the consent date, which will be
Sept. 9, 2005, unless extended.  Holders who tender their notes
after the consent date will not receive the consent payment.

The tender offer will expire at 10:00 a.m., New York City time, on
Sept. 26, 2005, unless extended or earlier terminated.  The
consents being solicited will eliminate substantially all of the
restrictive covenants, the provision requiring the Issuers to make
an offer to repurchase the notes upon a change of control, certain
opinion delivery obligations in the event of a defeasance and
certain events of default in the indenture governing the notes.  
JQH Finance, LLC currently intends to defease the remaining notes
not purchased pursuant to the tender offer. Information regarding
the pricing, tender and delivery procedures and conditions of the
tender offer and consent solicitation is contained in the Offer to
Purchase and Consent Solicitation Statement and the Consent and
Letter of Transmittal.

JQH Finance, LLC has received a financial commitment from Goldman
Sachs Mortgage Company for the funds necessary to complete the
tender offer.

Goldman, Sachs & Co. has been appointed as dealer manager and
solicitation agent for the tender offer and consent solicitation.  
Global Bondholder Services Corporation has been appointed the
information agent and depositary for the tender offer and consent
solicitation.  The Offer to Purchase and Consent Solicitation
Statement, the Consent and Letter of Transmittal and any
additional documents related to the tender offer and consent
solicitation may be obtained by contacting Global Bondholder
Services Corporation, 65 Broadway -- Suite 74, New York, New York
10006, Attention: Corporate Actions (telephone: 866-873-6300).  
Information concerning the terms and conditions of the tender
offer and consent solicitation may be obtained by contacting
Goldman, Sachs & Co., Credit Liability Management Group, 85 Broad
Street, 29th Floor, New York, New York, 10004 (telephone: 800-828-
3182).

John Q. Hammons Hotels, Inc. -- http://www.jqh.com/-- is a   
leading independent owner and manager of affordable upscale, full
service hotels located primarily in key secondary markets.  The
Company owns 46 hotels located in 20 states, containing 11,370
guest rooms or suites, and manages 14 additional hotels located in
seven states containing 3,158 guest rooms or suites.  The majority
of these 60 hotels operate under the Embassy Suites, Holiday Inn
and Marriott trade names.  Most of the hotels are located near a
state capitol, university, convention center, corporate
headquarters, office park or other stable demand generator.

                        *     *     *

As reported in the Troubled Company Reporter on May 27, 2005,
Standard & Poor's Ratings Services ratings on John Q. Hammons
Hotels L.P. (JQH LP), including the 'B' corporate credit rating,
remain on CreditWatch with developing implications, where they
were placed on Oct. 18, 2004.

This follows the announcement today by JQH Inc. that a special
committee approved a transaction between principal stockholder
John Q. Hammons and an investor group.   The purchase price for
JQH Inc.'s Class A common shares was reiterated at $24 a share.
JQH Inc. has not yet publicly disclosed all details of the
transaction, such as the participants in the investor group and
what the final capital structure will be.

JQH LP is a partnership whose sole general partner is JQH Inc., a
publicly traded company, which exercised control over all
partnership decisions.  Mr. John Q. Hammons, the majority
shareholder of JQH Inc. holds about 77% of the voting shares.

In resolving the CreditWatch listing, Standard & Poor's will
monitor developments associated with the ongoing transaction,
including whether the $499 million in outstanding 8.875% first
mortgage notes due 2012, which were jointly issued by JQH LP and
John Q. Hammons Hotels Finance Corporation III, will remain
outstanding.  The CreditWatch listing will be resolved when
details of the transaction are fully determined.


KAISER ALUMINUM: Wants Underwriters Settlement Pact Approved
------------------------------------------------------------
In September 1988, Kaiser Aluminum & Chemical Corporation
instituted an insurance coverage action against certain of the
underwriters and members at Lloyd's London, styled "Kaiser
Aluminum & Chemical Corp. v. Mended & Mount, et al.," Case No.
897055, in the Superior Court of California for the Country of
San Francisco.

The coverage at issue in the Ships Coverage Action spans from 1945
to 1959 and involved 14 policies.  In the Ships Coverage Action,
KACC sought a declaratory judgment that certain Underwriters are
obliged to cover asbestos-related bodily injury claims asserted
against KACC relating to ships built by, or shipyards owned and
operated by, KACC.

The Ship Coverage Action also sought damages for:

   * breach of contract;

   * breach of the covenant of good faith and fair dealings;

   * violations of the applicable Insurance Code;

   * conspiracy to violate the applicable Insurance Code; and

   * tortious inducement to breach contract and injunctive
     relief.

KACC and the Underwriters subsequently entered into a tolling
agreement staying the prosecution of the lawsuit.  The tolling
agreement is still in effect, and the Underwriters have not been
dismissed from the Ships Coverage Action.

In May 2000, KACC instituted an insurance coverage action against
certain insurers, including the Underwriters, styled "Kaiser
Aluminum & Chemical Corporation v. Certain Underwriters at
Lloyds, London," Case No. 31241 in the Superior Court of
California for the County of San Francisco.

Involving more than 300 insurance policies, KACC sought a
declaratory judgment that the Insurers are obligated to cover the
asbestos-related bodily injury products liability claims that have
been asserted against KACC.  In addition, the Products Coverage
Action sought damages for breach of contract and breach of the
covenant of good faith and fair dealing against several of the
Insurers.

Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, P.A., in
Wilmington, Delaware, tells the Court that the Products Coverage
Action, if successful, would establish KACC's rights, and the
Insurers' obligations, with respect to the Asbestos Products
Claims and would allow KACC to recover its costs in connection
with the defense and settlement of the Asbestos Products Claims
from the Insurers.

Furthermore, KACC has also sued more limited number of insurers,
including certain Underwriters, on premises claims in a companion
action, styled "Kaiser Aluminum & Chemical Corp. v. Certain
Underwriters at Lloyds, London," Case No. 322710, which is also
pending in San Francisco Superior Court.

In general, Ms. Newmarch explains, a product claim is a "claim for
injury resulting from a product manufactured or sold by KACC,"
while a premises claim is a "claim for injury resulting from
exposure to an allegedly hazardous product or condition at a
facility owned and operated by KACC."

The Underwriters each severally subscribe as an insurer on certain
London Market Insurance Policies, including 59 policies providing
excess insurance coverage to KACC from 1945 to 1986.

Ms. Newmarch notes that certain of Underwriters had already made
payments on certain Asbestos Products Claims and Asbestos Ship
Claims.

Following extensive discussions, KACC and Underwriters have
reached a settlement resolving all claims against Underwriters
with respect to the subject policies, including coverage for
Channeled Personal Injury Claims pursuant to the Debtors' Plan of
Reorganization, as well as other present and future liabilities,
except for certain potential future claims under Aviation
Products Policies.

The salient terms of the Underwriters Settlement Agreement are:

   (1) Underwriters will pay $137 million into a settlement
       account, which will be established pursuant to a
       Settlement Account Agreement.

   (2) On the trigger date, the Settlement Fund will be
       transferred to the Insurance Escrow Account established
       pursuant to the Court's December 29, 2004, Order.  Upon
       the transfer of the Settlement Fund to the Insurance
       Escrow Account, legal and equitable title to the
       Settlement Fund will pass irrevocably to the Insurance
       Escrow Agent to be distributed pursuant to the Plan.

   (3) KACC will release all of its rights under the Subject
       Policies and to dismiss Underwriters from the
       Products Coverage Action, the Premise Coverage Action, and
       the Ships Coverage Action.

   (4) The Settlement Agreement encompasses all claims that might
       be covered by the Subject Policies and constitutes a
       policy buy-out of Underwriters respective participation
       shares in those policies, except for the Aviation Products
       Policies as to which KACC retains certain rights.

   (5) The Settlement Agreement contains certain rights of
       termination, including if Asbestos Legislation were to be
       enacted into law by December 31, 2005.

Ms. Newmarch asserts that the effect of the Settlement Agreement
is to:

   (a) eliminate KACC's continuing costs of prosecuting the
       Products Coverage Action and Premises Coverage Action
       against Underwriters;

   (b) eliminate uncertainty regarding future payments by the
       Underwriters; and

   (c) secure the payment of a total fixed amount from
       Underwriters without further delay and costs to KACC.

Accordingly, the Debtors ask the Court to approve the
Underwriters Settlement Agreement pursuant to Rule 9019 of the
Federal Rules of Bankruptcy Procedure.

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


KEY3MEDIA GROUP: Has Until Sept. 30 to Object to Claims
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extended,
until Sept. 30, 2005, the period within which Key3Media Group,
Inc., its debtor-affiliates or the Creditor Representative
appointed under Key3Media's confirmed chapter 11 plan can object
to proofs of claims.  

As previously reported in the Troubled Company Reporter, the
Reorganized Debtors have substantially completed the review and
reconciliation of approximately 380 claims filed against their
estates.  The extension will give the Debtors more time to review
and reconcile remaining claims that are potentially objectionable.

Headquartered in Los Angeles, California, Key3Media Group, Inc.,  
produces, manages and promotes a portfolio of trade shows,  
conferences and other events for the information technology  
industry.  The Company and its debtor-affiliates filed for chapter  
11 protection on Feb. 3, 2003 (Bankr. D. Del. Case No. 03-10323).
Christina M. Houston, Esq., at Richards, Layton & Finger, P.A.,
and David M. Friedman, Esq., at Kasowitz, Benson, Torres &
Friedman, LLP, represent the Debtor.  When the Debtors filed for
protection from their creditors, they listed $241,202,000 in total
assets and $441,033,000 in total liabilities.  The Court confirmed
the Debtors' First Amended Joint Plan of Reorganization on June 4,
2003, and the Plan took effect on June 20, 2003.


KMART CORP: Court Nixes McHugh's Move to Reopen Discharge Trial
---------------------------------------------------------------
As reported in the Troubled Company Reporter on July 13, 2005,
Katherine McHugh asked Judge Sonderby to reopen the proceedings
regarding her discharged claim -- based on the fact that she
timely filed her Claim, which preserved her rights and placed
Kmart on notice of the Action.  Ms. McHugh also sought an
extension of time or a stay in the Supreme Court of the State of
New York to allow the Bankruptcy Court to rule on her request to
reopen the discharge proceedings.

Ms. McHugh sustained injuries when she slipped and fell in a Kmart
store at 33 West State St., in Binghamton, New York.  Ms. McHugh
filed Claim No. 35011 with the U.S. Bankruptcy Court for the
Northern District of Illinois and a complaint in the Supreme
Court of the State of New York, County of Broome.

Kmart Corporation asserted that Ms. McHugh's claims were barred,
having been disallowed by the Bankruptcy Court.  Kmart sought
dismissal of Ms. McHugh's underlying action upon the discharge of
the matter in bankruptcy, for Ms. McHugh's failure to submit a
questionnaire.

Mary Jane Murphy, Esq., at the Law Office of Ronald R. Benjamin,
in Binghamton, New York, points out that Kmart was notified of the
events from which Ms. McHugh's action arose from the outset.  
Ms. McHugh filled out an incident report at the scene of the
accident, and communication began immediately between Ms. McHugh
and Kmart's claims adjuster.

*    *    *

As negotiated by Katherine McHugh and Kmart Corporation, Judge
Sonderby vacates the order expunging Claim No. 35011.  The
Court's resolution is without prejudice to Kmart's right to
object to the Claim.

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)


KPMG LLP: Paying $456 Million Over Fraudulent Tax Shelters
----------------------------------------------------------
According to published reports, KPMG LLP agrees to pay a
$456 million penalty at the end of the Internal Revenue Service's
probe of its tax shelter called Bond Linked Issue Premium
Structure.  The government concluded that the accounting firm's
BLIP tax shelter product is fraudulent.  

The agreement also called for the Firm's acknowledgment of
wrongdoing.  The move will save KPMG from a criminal indictment
and from suffering the fate of the now defunct accounting giant,
Arthur Andersen.

However, former partners at the firm are expected to be indicted
on criminal charges, possibly this week, the New York Times
reports.  The Firm's acknowledgment of wrongdoing will bolster the
state prosecutors' case against former KPMG partners and others
involved in the scam.  The prosecutors are expected to build a
case against the former partners' misrepresentations in connection
with selling the tax shelters.

Reports also say that although KPMG conceded that some of its
conduct in promoting two other tax shelters -- known as Foreign
Leveraged Investment Program, and Offshore Portfolio Investment
Strategy -- was fraudulent, the transactions themselves were not
done in bad faith.

Robert S. Bennett, Esq., at Skadden Arps Slate Meagher & Flom,
represents KPMG.

The Department of Justice has been investigating certain tax
services that KPMG offered from 1996 to 2002.  This is part of a
larger tax shelter investigation into the role of accounting
firms, law firms, large banks and taxpayers who participated in
the development, promotion and implementation of tax shelters.

On July 9, 2002, the Justice Department, on behalf of the Internal
Revenue Service, filed a lawsuit in the U.S. District Court for
the District of Columbia (Dist. D.C. Case No. 1:02-mc-00295)
against KPMG LLP.  In that the proceeding, the Government asked
the court to compel the public accounting firm to disclose to the
IRS information about all tax shelters it marketed since 1998.  On
Sept. 7, 2004, the DOJ and KPMG advised Judge Hogan that the
accounting firm had produced all of the documents sought by the
IRS.  Robert S. Bennett, Esq., and Kenneth W. Gideon, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, and John M. Bray, Esq.,
at King & Spaulding LLP, represent KPMG in this civil proceeding.  

KPMG LLP is a global network of professional services firms
providing Audit, Tax and Advisory services.  It operates in 148
countries and have around 6,500 partners, 70,000 client service
professionals, and 17,000 administration and support staff working
in member firms around the world.


MARIE COLLARO: Case Summary & 3 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Marie A. Collaro
        7 Hadley Drive
        Smithtown, New York 11787

Bankruptcy Case No.: 05-85949

Chapter 11 Petition Date: August 29, 2005

Court: Eastern District of New York (Central Islip)

Debtor's Counsel: Edward Zinker, Esq.
                  278 East Main Street
                  P.O. Box 866
                  Smithtown, New York 11787-0866
                  Tel: (631) 265-2133

Total Assets: $1,969,000

Total Debts:  $1,045,996

Debtor's 3 Largest Unsecured Creditors:

   Entity                        Nature of Claim    Claim Amount
   ------                        ---------------    ------------
MBNA America                     Credit Card             $14,711
P.O. Box 15026
Wilmigton, DE 19850-5026

Discover Financial               Credit Card             $13,242
P.O. Box 15316
Wilmington, DE 19850

Chase Platinum Visa              Cash Advances           $12,404
P.O. Box 15650
Wilmington, DE 19886-5650


MARKWEST ENERGY: Taps Ehrhardt Keefe to Provide Internal Audit
--------------------------------------------------------------
MarkWest Energy Partners, LP (Amex: MWE) entered into a service
agreement with Ehrhardt, Keefe, Steiner & Hottman, PC, Certified
Public Accountants and Consultants to provide internal audit
services.  Under the terms of the agreement, EKS&H will provide
these services along with other accounting and consultation
services on an as needed basis and will be compensated for actual
time and expenses.

"EKS&H will provide another key resource in our ongoing efforts to
strengthen our accounting, controls and financial reporting
processes," said Frank Semple, President and Chief Executive
Officer.  "I am also pleased to announce the addition of Richard
Ostberg to our senior management team.  Richard, as the Vice
President of Compliance, will manage the EKS&H engagement and also
be responsible for our Sarbanes-Oxley 404 compliance program.  He
and his team will also provide key support for our back office
integration project and corporate development due diligence
processes.  "Richard comes to us with a very strong technical
background in accounting, auditing and compliance developed in his
former positions including those with Black Hills Corporation
where he spent four years, most recently as Vice President and
Controller of Black Hills Energy, the company's non-regulated
energy operations."

Prior to Black Hills, Mr. Ostberg spent four years with Pacific
Minerals, Inc, the operator of the Bridger Coal mine and spent
eight years with Deloitte & Touche in their audit practice,
including two years consulting from his national office assignment
in Washington DC.

"These enhancements to our accounting, control and compliance
capabilities reinforce our continued focus and commitment to
rapidly improve the accuracy and efficiency of the financial
reporting required by the SEC and expected by our shareholders,"
said Mr. Semple.  "We are intent on continuing to strengthen our
organizational capabilities and implementing the changes required
to ensure proper accounting and financial reporting.  As one
example, we are deep in the process of an intensive search for a
new chief accounting officer.  As we continue to grow our business
it is essential that our accounting and financial reporting
functions receive a high level of focus and support and this has
become an overarching priority for our ongoing business."

MarkWest Energy Partners, L.P. is a publicly traded master limited
partnership with a solid core of midstream assets and a growing
core of gas transmission assets. It is the largest processor of
natural gas in the Northeast and is the largest gas gatherer of
natural gas in the prolific Carthage field in east Texas. It also
has a growing number of other gas gathering and intrastate gas
transmission assets in the Southwest, primarily in Texas and
Oklahoma.

                        *     *     *  

As reported in the Troubled Company Reporter on May 11, 2005,    
Standard & Poor's Rating Services placed its 'B+' corporate credit  
rating on MarkWest Energy Partners L.P. on CreditWatch with  
negative implications after the company's announcement that its    
Form 10-K filing would be further delayed and that it would be  
required to restate its 2002 through 2004 financial statements.    

MWE has not filed its Form 10-K on time as a consequence of  
identifying material weaknesses under Section 404 of the Sarbanes-
Oxley Act, primarily involving reporting processes in its  
Southwest business unit.  In addition, both MWE and MarkWest    
Hydrocarbon Inc., the majority interest holder in MWE's general  
partner, have now determined that they must file restatements for  
2002 through 2004 to reflect compensation expense for the sale of  
interests in MWE's general partner.    

"The CreditWatch listing reflects concern about repeated and  
protracted delays in the company's Form 10-K filing, uncertainty  
about the magnitude of impending restatements, the possibility  
that further delays could reduce the partnership's liquidity, and  
the risk of material weaknesses being greater in scope than  
expected," said Standard & Poor's credit analyst Plana Lee.    

MWE has obtained covenant waivers from its banks under its  
revolving credit facilities until June 30, 2005.  The company was  
previously granted a waiver through April 30, 2005, which it was  
unable to meet.    

MWE has also received an extension to regain compliance from the    
American Stock Exchange until May 31, 2005, having missed its  
previous May 2 deadline.


MCI INC: Inks $1.3 Mil. Three-Year Service Pact with AMF Bowling
----------------------------------------------------------------
MCI, Inc. (NASDAQ: MCIP) and AMF Bowling, the world's largest
owner and operator of bowling centers, reported a new three-year
$1.275 million agreement for MCI to deploy and manage AMF's global
communications network.  MCI will connect more than 350 bowling
centers and 12,000 employees around the nation to enhance AMF's
business operations and better serve customers.

Utilizing MCI's fully-managed, cost-effective IP VPN Broadband
Service, AMF will modernize its existing satellite communications
system to increase reliability, performance and security at each
location, while reducing the costs associated with network
equipment investment, maintenance and management.  MCI's Internet
Protocol (IP) services also will support AMF's new Online
Reservation System, a Web-based tool under development that will
enable bowlers to make lane reservations in real-time for bowling
parties and other special events via the AMF Web site.

"MCI is providing a comprehensive IP-based solution that will help
us take our business to the next level as we move more self-
service customer functions to the Web," said Rohana Meade, vice
president of Information Technology for AMF.  "As a valued
communications and IT partner, we know we can rely on MCI to run
our network and keep our business rolling 365 days a year."

In addition to using MCI's high-speed, always-on IP VPN Broadband
Services, AMF is further safeguarding its network with MCI's
NetSec Managed Firewall Service.  As a result, AMF can increase
the security and productivity of its employees and customers while
eliminating the complexities associated with managing advanced
enterprise-wide security solutions.

"With MCI's Managed Network Services, large enterprise customers,
like AMF, can leverage their existing resources and enjoy
flexible, reliable and secure IP-based solutions that will meet
their rapidly evolving business needs," said Steve Young, senior
vice president, MCI Commercial Markets.  "MCI, through the power
of our IP capabilities, is providing solutions that enable AMF to
better focus on its core business operations."

Today, MCI manages nearly 3,100 customer networks in 149
countries, including overseeing 22,000-plus non-MCI connections
from more than 60 network service providers globally.

               About AMF Bowling Worldwide, Inc.

AMF Bowling Worldwide Inc. is the world's largest owner and
operator of bowling centers.  Over the past 60 years, AMF has been
proud of its contributions to the sport of bowling as well as its
place in delivering the traditional bowling experience to millions
of enthusiasts each year.  For additional information, visit
https://www.amf.com/ or call 804-730-4000.

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: Court Approves De Minimis Asset Sale Protocol
------------------------------------------------------------------
Meridian Automotive Systems, Inc., and its debtor-affiliates
sought and obtained authority from the U.S. Bankruptcy Court for
the District of Delaware to implement these procedures for the
sale of any De Minimis Asset with a value of up to but not more
than $1,000,000:

   (1) The Debtors will be authorized to consummate any Sale
       without further Court order;

   (2) Any Sale will be free and clear of all Liens with the
       Liens attaching only to the Net Proceeds to the extent of
       their validity and priority immediately prior to the Sale;

   (3) At least 10 days prior to the closing of any Sale, the
       Debtors will notify:

         (i) the U.S. Trustee;

        (ii) Credit Suisse, Cayman Island Branch, as
             administrative agent under the DIP Facility;

       (iii) the Official Committee of Unsecured Creditors;

        (iv) the administrative agent for the prepetition lenders
             under the First Lien Credit Agreement;

         (v) the administrative agent for the prepetition lenders
             under the Second Lien Credit Agreement;

        (vi) U.S. Bank National Association, as collateral agent
             for the subordinated noteholders; and

       (vii) any creditor who has a Lien on a De Minimis Asset to
             be sold;

   (4) The Sale Notice will, in reasonable detail:

         (i) identify the De Minimis Assets being sold;
        (ii) identify the purchaser;
       (iii) provide the purchase price; and
        (iv) provide the significant terms of the sale agreement;

   (5) A Sale Notice Party may object to a Sale within 10 days of
       the date of the Sale Notice;

   (6) If a Sale Notice Party objects to a Sale, the Sale will
       not proceed except upon (x) resolution of the objection by
       the parties in question or (y) further Court order after a
       hearing; and

   (7) If there are no objections, the Debtors may consummate a
       Sale without further notice or a hearing.

As previously reported in the Troubled Company Reporter on
Aug. 3, 2005, the Debtors also propose that the De Minimis Value
of a De Minimis Asset will be the dollar amount, including the
amount of any assumed liabilities, of the estimated selling price
for each De Minimis Asset, provided that parties-in-interest will
in good faith refrain from structuring transactions solely to
cause a Sale to fall within or outside of the Sale Procedures.

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).


MOLECULAR DIAGNOSTICS: June 30 Balance Sheet Upside-Down by $13MM
-----------------------------------------------------------------
Molecular Diagnostics, Inc., fka Ampersand Medical Corporation,
reported its financial results for the quarter ending June 30,
2005, in a Form 10-Q delivered to the Securities and Exchange
Commission.

Revenues for the three months ended June 30, 2005 decreased
$72,000, or 71.3%, to $29,000 from revenues of $101,000 for the
same period in 2004.  This decrease was the result of a reduction
in revenue from the sale of the Company's slide-based installed
systems and AcCell instruments.

The net loss for the three-month period ended June 30, 2005,
before preferred dividends totaled $791,000, compared with
$1,621,000 for the same period in 2004, a decrease of $830,000 or
51.2%.  The decrease was primarily the result of reduced operating
capacity due to capital and liquidity constraints as well as a
reduction in interest expense.  In addition, cumulative dividends
on the Company's outstanding Series B, Series C, Series D and
Series E convertible preferred stock totaled  $228,000 for the
quarter ended June 30, 2005, compared with  $258,000 for the same
period in 2004.  The net loss applicable to common stockholders
for the three months ended June 30, 2005 was $1,019,000 on
111,463,812 weighted average common shares outstanding.  This
compared with the net loss applicable to common stockholders for
the three-month period ended June 30, 2004 of  $1,879,000, on
73,839,577 weighted average common shares outstanding.

                 Liquidity and Capital Resources

The Company experienced severe liquidity problems during the six
months ended June 30, 2005.  As a result, the Company was forced
to cut staff and reduce its operations to a minimum level.  

Officers refrained from drawing salaries during portions of the
first and second quarters of 2005 in order to reduce demands on
the Company's limited cash position.  The Company was able to
raise funds through the sale of common stock during the quarter,
although the proceeds of the common stock offerings were used to
satisfy certain obligations coming due as well as for the payment
of a limited amount of current operational expenses.

At June 30, 2005, the Company had $1,000 cash on hand, a decrease
of $10,000 over cash on hand at December 31, 2004 of $11,000.  
This cash position results from our loss from operations and our
inability to raise sufficient new capital due to very unfavorable
conditions in financing markets, both public and private, for
small life sciences companies such as ours.  The Company was
unable to raise sufficient funds during the six months ended
June 30, 2005, in order to maintain adequate cash reserves and to
meet the ongoing operational needs of the business.

The Company incurred $10,000 in capital expenditures during the
first six months of 2005 versus capital expenditures of $198,000
for the first six months of 2004, a decrease of 94.9%.  Capital
expenditures are defined as disbursements for laboratory
equipment, leasehold improvements, software, and
furniture/fixtures with a purchase price in excess of $1,000 per
item and useful life in excess of one year.  MDI is striving to
keep capital expenditures to a minimum due to capital and
liquidity constraints, and the Company has no plans for material
commitments for capital expenditures in the near-term.

                       Going Concern Doubt

The Company said its operations have been, and will continue to
be, dependent upon management's ability to raise operating capital
in the form of debt or equity.  The Company has incurred
significant operating losses since inception of the business.  The
Company expects that significant on-going operating expenditures
will be necessary to successfully implement our business plan and
develop, manufacture and market its products.  The Company's
managements says these circumstances raise substantial doubt about
the Company's ability to continue as a going concern.  

Pointing to the company's substantial net losses from operations  
and limited financial resources, ALTSCHULER, MELVOIN AND GLASSER
LLP, expressed similar doubts when it completed its review of the
company's 2004 financials on April 13, 2005.

                       Bankruptcy Warning

During the six months ended June 30, 2005, the Company was unable
to raise sufficient adequate capital or generate profitable sales
revenues, and was forced to curtail its product development and
other activities.  If the Company continues to be unable to obtain
adequate financing, it will be forced to cease operations and may
seek bankruptcy protection.

Molecular Diagnostics, Inc., formerly Ampersand Medical
Corporation, is a biomolecular diagnostics company focused on the
design, development and commercialization of cost-effective
screening systems to assist in the early detection of cancer.  MDI
has currently curtailed its operations focused on the design,
development and marketing of its InPath(TM) System and related
image analysis systems, and expects to resume such operations only
when additional capital has been obtained by the Company.  The
InPath System and related products are intended to detect cancer
and cancer-related diseases, and may be used in a laboratory,
clinic or doctor's office.

As of June 30, 2005, Molecular Diagnostics' balance sheet showed a
$12,998,000 equity deficit, compared to a $12,123,000 deficit at
Dec. 31, 2004.


NATIONAL ENERGY: Court Clarifies Plan Distribution Definition
-------------------------------------------------------------
On May 13, 2005, the U.S. Bankruptcy Court for the District of
Maryland confirmed the Second Amended Plan of Liquidation for
USGen New England, Inc., as modified.  USGen received about
$1,148,000 from the sales of its hydro and fossil assets.  The
liquidation analysis under the USGen Plan indicates that as of
June 2005, the total allowed claims in the USGen Chapter 11 case,
plus postpetition interest, equal $1,385,000.  Only $20 million of
that amount was for administrative and priority claims.  Thus, the
vast majority of funds to be distributed under the USGen Plan are
from the proceeds of the USGen Sales.

Matthew A. Feldman, Esq., at Willkie Farr & Gallagher LLP, in New
York, relates that in accordance with the USGen Plan, USGen
distributed the $72 million portion of the $485 million Bear
Swamp Claim assigned to National Energy & Gas Transmission, Inc.,
and NEGT Generating Company, LLC, NEGT Energy Company, LLC,
National Energy Holding Corporation and NEGT Enterprises, Inc.,
each a wholly owned subsidiary of NEGT, as Shareholder pursuant
to the USGen Plan.

USGen gave the $72 million directly to NEGT Generating Company,
LLC, the direct owner of USGen's issued and outstanding stock.

Pursuant to Section 5.04 of the USGen Plan, USGen will distribute
to the Shareholder the remainder, if any, of all amounts in the
USGen estate after payment of allowed claims, plus postpetition
interest, and all necessary and sufficient funds have been
reserved.  Ultimately all sums received from USGen, less any
amounts required to satisfy or reserve for obligations owing by
each Intermediate Subsidiary, will be distributed through the
Intermediate Subsidiary to NEG.

                   Additional Sale Distributions

The Modified Third Amended Plan of Reorganization filed by NEG
defines Additional Sale Distributions as:

   "distributions out of net proceeds of certain sales of assets
   or equity interests of the Reorganized Debtor or certain of
   its subsidiaries other than the Sale Transactions, which sales
   occur within one year of the Effective Date."

To the extent a NEG subsidiary sells assets prior to October 29,
2005, and all or a portion of the net proceeds of that sale are
given to NEG, any proceeds received are to be distributed to
holders of Allowed Class 3 Claims in accordance with the
provisions of the NEG Plan.

While NEG believes that the definition of Additional Sale
Distributions clearly would encompass proceeds it received
through the sales of USGen assets, the definition of "Additional
Sale Distributions," as well as the NEG Plan generally, is
otherwise silent respecting distributions from a subsidiary that
are primarily comprised of sale proceeds but which may, because
of the use of funds and the fungibility of cash, include funds
from other sources.

As a result, NEG asked Judge Mannes to clarify that the definition
of Additional Sale Distributions includes the proceeds it
received from distributions made under the USGen Plan.

Mr. Feldman assures the Court that the clarification requested
would not change any terms of the NEG Plan.

"Clarifying that the definition of Additional Sale Distributions
includes the proceeds received from distributions made under the
USGen Plan will facilitate Distributions to holders of Allowed
Class 3 Claims in accordance with the provisions and intent of
the NEGT Plan," Mr. Feldman tells the Court.

                        *     *     *

Judge Mannes granted the Debtors' request for clarification and
declares that the definition of Additional Sale Distributions
includes proceeds received from distributions made under USGen New
England's plan of reorganization by NEG's intermediate
subsidiaries.

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)


NEW ENGLAND COLLEGE: Moody's Revises Ratings Outlook to Positive
----------------------------------------------------------------
Moody's Investors Service has affirmed the B1 rating on New
England College's $5.2 million of Series 1999 bonds.  The rating
outlook has been revised to positive from stable.  The Series 1999
bonds were issued through the New Hampshire Higher Education and
Health Facilities Authority.

Strengths:

   * improved financial controls and discipline, lead by new
     President and Chief Financial Officer, should continue recent
     trend of balanced operating performance (1.8% operating
     margin in 2004; average operating margin -3.0%) leading to
     sufficient cash flow to meet debt service obligations (11.7%
     operating cash flow margin).

   * recruitment and marketing strategies appear successful as
     enrollment expands rapidly (1,298 full-time equivalent
     students), especially in graduate programs provided off-site
     (graduate enrollment up 165% since 2002).

Challenges:

   * small revenue ($19.8 million) and financial resource (total
     financial resources of $2.9 million) base leaves College
     vulnerable to unexpected shifts in demand or financial
     performance.

   * cash and endowment funds ($1.5 million) are pledged as
     collateral to bank line of credit, weakening position of
     long-term bond holders, and broad liquidity measures are
     still very thin.

   * market remains vulnerable, with much of recent enrollment
     growth experienced in competitive graduate training on
     location at corporations throughout state.

                   Recent Developments/Results

The College hired a new President as of May 2005 after a prior
president resigned.  The new President is reportedly focused on
continuing to expand the College's market position with a healthy
focus on financial performance.

The College has continued to see expanding enrollment, with
undergraduate FTE reaching 900 students in fall 2004 and
potentially over 950 in fall 2005.  New England College's market
remains somewhat challenging as competitors include very low
priced public institutions including area community colleges.   
Graduate enrollment has risen rapidly as the College expands its
program offerings, especially through delivering courses on
location at area corporations.  Graduate enrollment accounted for
nearly 400 full time equivalents during FY2005, or nearly a third
of total credits.  These graduate programs are run in cohort
models and do not necessarily coincide with typical semesters.
Although the programs are clearly beneficial to the College's
reputation and financial performance, they are highly competitive
in nature and require significant flexibility and ability to
respond quickly to a changing environment.

After several years of significant deficits, culminating in a
12 percent deficit in FY2002, New England College has generated
several years of positive operating performance, which reportedly
continued in FY2005.  As tuition revenue continues to grow
rapidly, Moody's believes the College should be able to maintain
solid cash flow and debt service coverage.  Ability to maintain
this degree of improved cash flow to invest in capital and
moderately enhance liquidity will be an important factor for
improvement in credit quality.

NEC's liquidity profile remains a significant concern as the
College has essentially no expendable financial resources and less
than $6 million of cash and investments.  The College's total debt
of $7.3 million is comprised primarily of the fixed rate Series
1999 bonds.  NEC also carries several small capital lease and HUD
loans.  The College's $1.5 million line of credit is
collateralized by endowment funds (nearly all of the College's
cash and investments), essentially providing the Bank a senior
lien on the College's liquidity relative to long-term bond
holders.  The balance on the line as of June 30, 2005 was
$408,000.

                             Outlook

Moody's positive outlook reflects our expectation that the College
will continue to generate essentially balanced operations through
growing enrollment and tuition revenue, but may be challenged to
significantly expand liquidity.

What could change the rating - Up

   -- Liquidity growth;
   -- improved cash flow from operations; and
   -- continued enrollment growth.

What could change the rating - Down

   -- Additional debt without growth in financial resources;
   -- operating deficits; and
   -- substantial declines in enrollment.

                       Key Data and Ratios
                 Fiscal Year 2004 Financial Data
                    Fall 2004 Enrollment Data

Total Enrollment: 1,298 full-time equivalent students
Selectivity: 87.2%
Matriculation: 19.2%
Total Financial Resources: $2.9 million
Total Debt: $7.3 million
Expendable Resources to Debt: -0.07x
Cash and Investments to Debt: 0.81x
Three-Year Average Operating Margin: -3.0%
Operating Cash Flow Margin: 11.7%


NORTHWEST AIRLINES: AMFA Strike Doesn't Have Large Scale Support
----------------------------------------------------------------
Northwest Airlines Corporation scored a point last week when
mechanics from Aircraft Mechanics Fraternal Association failed to
get other unions on board in their strike against the airline.

Mechanics and other maintenance workers at Northwest Airlines
walked off the job on August 20 after labor talks failed to
produce a deal to help the carrier cut costs and avert possible
bankruptcy.  The union said the airline's best proposal would have
cut more than half the AMFA jobs and imposed hefty pay cuts for
remaining workers.  The labor group said its final counteroffer
would have met the cost-cutting target and preserved jobs.

The Company's pilots have agreed to reductions, accepting a 15%
pay cut worth $300 million when combined with cuts for salaried
employees.   The Company needs $1.1 billion in labor concessions.
The Company is still negotiating with ground workers and flight
attendants.

AMFA's strike also failed to ground the Company's planes as the
Company hired replacements.

No new talks are scheduled between Northwest and AMFA.  The
mechanics averaged about $70,000 a year in pay, and cleaners and
custodians made around $40,000.

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

                    About Northwest Airlines

Northwest Airlines Corp. is the world's fifth largest airline with
hubs in Detroit, Minneapolis/St. Paul, Memphis, Tokyo and
Amsterdam, and approximately 1,600 daily departures.  Northwest is
a member of SkyTeam, an airline alliance that offers customers one
of the world's most extensive global networks.  Northwest and its
travel partners serve more than 900 cities in excess of 160
countries on six continents.

At June 30, 2005, Northwest Airlines' balance sheet showed a
$3,752,000,000 stockholders' deficit, compared to a $3,087,000,000
deficit at Dec. 31, 2004.

                         *     *     *

As reported in the Troubled Company Reporter on June 23, 2005,
Moody's Investors Service downgraded the debt ratings of Northwest
Airlines Corporation and its primary operating subsidiary,
Northwest Airlines, Inc.  The Corporate Family Rating (previously
called the Senior Implied rating) was lowered to Caa1 from B2, and
the Senior Unsecured rating was downgraded to Caa3 from Caa1.
Ratings assigned to Enhanced Equipment Trust Certificates were
downgraded.

In addition, the company's Speculative Grade Liquidity Rating was
downgraded to SGL-3 from SGL-2.  The rating actions complete a
review of Northwest's ratings initiated April 8, 2005.  Moody's
said the outlook is negative.


PACIFIC GAS: Asks Court to Enforce Confirmation Order on 3 Suits
----------------------------------------------------------------
Pacific Gas and Electric Company asks the U.S. Bankruptcy Court
for the Northern District of California to enforce its
Confirmation Order by compelling three plaintiffs to promptly
dismiss their lawsuit against Pacific Gas, with prejudice, or face
sanctions:

  Plaintiff            Lawsuit
  ---------            -------
  Johnson, Sinclair    Sinclair Johnson, Jr. v. Asbestos
                       Defendants
                       San Francisco Superior Court
                       Case No. 427818

  Lerda, Lawrence      Lawrence Lerda v. Asbestos Defendants
                       San Francisco Superior Court
                       Case No. 438389

  Slack, Charles       Charles Slack v. Asbestos Defendants
                       San Francisco Superior Court
                       Case No. 420271

Gary M. Kaplan, Esq., at Howard Rice Nemerovski Canady Falk &
Rabkin, in San Francisco, California, argues that the Lawsuits
are subject to both the discharge and the injunction imposed by
Pacific Gas' Plan of Reorganization and the Confirmation Order.

The Lawsuits are based on claims that arose prior to the
Confirmation Date, Mr. Kaplan points out.  The Plaintiffs either
failed to timely file proofs of claim or their claims have been
disallowed by a Court order.

Pursuant to the Confirmation Order, as of the Effective Date of
the Plan, Pacific Gas was discharged from all claims or debts
that arose prior to the Confirmation Date, except as otherwise
expressly provided in the Plan.

Headquartered in San Francisco, California, Pacific Gas and
Electric Company -- http://www.pge.com/-- a wholly owned  
subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest
combination natural gas and electric utilities in the United
States.  The Company filed for Chapter 11 protection on
April 6, 2001 (Bankr. N.D. Calif. Case No. 01-30923).  James L.
Lopes, Esq., William J. Lafferty, Esq., and Jeffrey L. Schaffer,
Esq., at Howard, Rice, Nemerovski, Canady, Falk & Rabkin represent
the Debtors in their restructuring efforts.  On June 30, 2001, the
Company listed $23,216,000,000 in assets and $22,152,000,000 in
debts.  Pacific Gas and Electric emerged from chapter 11
protection on April 12, 2004, paying all creditors 100 cents-on-
the-dollar plus post-petition interest. (Pacific Gas Bankruptcy
News, Issue No. 100; Bankruptcy Creditors' Service, Inc.,
215/945-7000)   


PANOLAM INDUSTRIES: Moody's Junks Proposed $150M Sr. Sub. Notes
---------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Panolam
Industries International, Inc., proposed $155 million senior
secured credit facility and a Caa1 rating to its proposed
$150 million senior subordinate notes.  The assigned ratings
reflect the company's high leverage, slow sales growth, and
uncertainty surrounding raw material costs.  The ratings also
consider the benefits derived from the company's extensive
geographical presence, strong brand recognition, and low customer
concentration.  The ratings outlook is stable.

Moody's has assigned these ratings:

   * $20 million senior secured revolving credit facility, due
     2010, rated B2;

   * $135 million senior secured term loan, due 2012, rated B2;

   * $150 million senior subordinate notes, due 2013, rated Caa1;

   * Speculative Grade Liquidity Rating of SGL-3;

   * Corporate Family Rating, assigned B2.

Moody's has withdrawn these ratings:

   * $20 million first lien senior secured revolving credit
     facility, due 2010, rated B1;

   * $130 million senior secured term loan B, due 2010, rated B1;

   * $75 million second lien term loan C, due 2011, rated B3.

The ratings outlook is stable.

Panolam's recapitalization is being initiated by a proposed
acquisition of the company by Genstar Capital Partners and The
Sterling Group.  The sponsors have agreed to acquire Panolam for
$345 million or approximately 6.6 times adjusted EBITDA for the
LTM period ended June 30, 2005.

The ratings are constrained by Panolam's high leverage ratios, low
free cash flow (FCF) generation, and slow sales growth.  The
company's total debt to EBITDA after the financing is expected to
increase to approximately 5.3 times from 3.8 times for the year
ended 2004.  Total debt to revenues after the acquisition will
rise to nearly 106% from 75% for the year ended 2004.  Based on
the current construction activity, Moody's anticipates Panolam's
2006 FCF to total debt to be around 5%; thus the improvement in
the company's credit metrics is anticipated to be gradual.

The company's revenue is generated from the sale of decorative
overlay products used in a wide variety of indoor surfacing
applications.  Sales to the commercial market represent 80% of
Panolam's revenues while the residential market only represents
20% of revenues.  Anticipated revenue growth over the next couple
of years is expected to be in the low single digits while free
cash flow will probably only grow modestly faster.  The company's
ability to de-lever is anticipated to highly correlate with
corporate construction spending.

The ratings are positively impacted by the company's competitive
advantage of having the broadest product line in the North
American decorative surfacing industry and also by having the most
widely recognized brand name in the North American thermally fused
melamine (TFM) panels market.  The vast product array enables the
company to cross-sell its products and provide a complete solution
for its customers' decorative overlay and decorative panel needs.   
The company's wide North American distribution network consisting
of over 200 distributors allows the company to provide its
customers with a shorter lead time than its competitors and lower
the company's shipping costs.  The combination of having an
expansive product breadth and a large distribution network has
thus far helped the company to reduce the impact of foreign
competition on the company's mid to high end product line.  The
ratings also benefit from the company's strong operating and gross
margin.  Moody's expects Panolam's gross margin and operating
margin for 2005 to be similar to recent years'.

Panolam's speculative grade liquidity rating of SGL-3 indicates
expected adequate liquidity for the coming 12-month period.  The
rating reflects the anticipation that during the next 12-month
period the company's internal cash generation is adequate to cover
basic cash requirements including the company's seasonal working
capital needs.  Additionally, the SGL-3 rating takes into
consideration the company's small revolver size relative to the
company's size and leverage.  Moody's notes that the company does
not expect to draw on its revolver over the next 12 months. The
rating also considers the company to have adequate room under its
covenants; however, Moody's believes some of the covenants to be
moderately tight.  The company's covenants are expected to
comprise of a net leverage ratio set initially at 6 times with
step-down provisions to 3.5 times and a cash interest coverage
ratio set initially at 1.7 times with step-up provisions to 2.5
times.  The company's net leverage ratio and cash interest
coverage ratio for the third quarter of 2005 are projected to be
approximately 5.3 times and 2.2 times, respectively.  The company
is not believed to have significant unencumbered assets that could
be sold.

The outlook and or ratings may improve if the company is able to
improve its cash flow generation to total debt to over 8% on an
annual basis and if its EBITDA coverage of interest was over 3
times.  The outlook may deteriorate if FCF to total debt was to
decline to under 3% while the rating would likely decline if FCF
to total debt was under 1%.

The $155 million senior secured credit facilities are comprised of
a $20 million revolver (unused at closing) and a $135 million term
loan.  The credit facilities are unconditionally guaranteed by
holdings and by each existing and subsequently acquired or
organized domestic subsidiary.  The credit facilities are secured
by substantially all the assets of holdings, the borrower and each
domestic subsidiary guarantor and 65% of the voting stock in the
company's Canadian subsidiary.  Moody's notes that Panolam's
Canadian subsidiary represented approximately 32% of the company's
2004 net sales.

The $150 million senior subordinated notes are guaranteed, jointly
and severally, on a senior subordinated basis by the existing and
future domestic subsidiaries.  The notes and the guarantees rank
junior to all of the company's and the company's guarantors'
existing and future senior indebtedness, and are effectively
junior to the indebtedness and other liabilities of Panolam's
Canadian subsidiary that is not guaranteeing the notes.

Headquartered in Shelton, Connecticut, Panolam is an integrated
manufacturer of thermally fused melamine panels and high pressure
laminates.  Revenue for the year ended 2004 was approximately
$281 million.


PROLOGIC MANAGEMENT: Equity Deficit Tops $2 Million at June 30
--------------------------------------------------------------
Prologic Management Systems Inc. reported its financial results
for the quarter ending June 30, 2005, in a Form 10-Q delivered to
the Securities and Exchange Commission.

General and administrative expenses for the quarter ended June 30,
2005, were $35,984 as compared to $60,850 for the same period of
the previous year.  The decrease in these expenses is attributable
to the reduction in efforts related to the accounting and audit
expenses related to the foreclosure that occurred in the prior
year.

Operating loss for the quarter ended June 30, 2005, was  $35,984,
as compared to an operating loss of $60,850 for the same period of
the previous year.

Due to the insolvency of the Company, no interest expense was
accrued for the current quarter ended June 30, 2005, or for the
same period of the previous year.

The loss from continued operations for the quarter ended June 30,
2005, was $35,984, as compared to $60,850 for the same period of
the prior fiscal year.

The Company had no income tax expense for the first quarters of
fiscal 2005 and 2004.  As of June 30, 2005, the Company had
Federal net operating loss carry forwards of approximately  
$8,870,000.  The utilization of net operating loss carry forwards
will be limited pursuant to the applicable provisions of the
Internal Revenue Code and Treasury regulations.

Net loss for the quarter ended June 30, 2005 was $35,984, or a
loss of approximately  $0.005 per share, compared to a loss of
$60,850, or a loss of approximately $0.01 per share, for the same
period of the previous year.  The decrease in net loss was
attributable to the reduction in efforts related to the accounting
and audit expenses related to the foreclosure that occurred in the
prior year.

                 Liquidity and Capital Resources

At June 30, 2005, the Company had a working capital deficit of
approximately $2,120,000 versus a deficit of approximately  
$2,084,000 at March 31, 2005.  As a result of the working capital
deficit at March 31, 2005 -- the Company's fiscal year end, the
Company's independent certified public accountants -- Epstein,
Weber & Conover, PLC -- have expressed substantial doubt about the
Company's ability to continue as a going concern.  The total cash
balance at June 30, 2005 was $62

Cash used by continuing operations for the quarter ended June 30,
2005 was approximately $280 compared to cash used by continuing
operations of $1,000 in the same period of the previous year.

Historically the Company has been unable to generate sufficient
internal cash flows to support operations, and has been dependent
upon outside capital sources to supplement cash flow.  New equity
investments, lines of credit and other borrowings, and credit
granted by its suppliers have enabled the Company to sustain
operations over the past several years.  In August 1998, the
Company had failed to meet the "continued listing criteria"
established by NASDAQ and the Company's securities were delisted
from the NASDAQ Small Cap Market.  The Company said that the
subsequent lack of shareholder liquidity in its securities has
materially adversely affected its ability to attract equity
capital.  Additionally, the lack of capital resources has
precluded the Company from effectively executing its strategic
business plan.  The ability to raise capital and maintain credit
sources is critical to the Company's continued viability.

At June 30, 2005, the Company had current debt obligations, or
debt that will become due within twelve months, of $1,411,757.  
The Company will not be able to service or repay any of this debt.
As a result, the Company will need to renegotiate the terms of
these obligations, either to:

   -- convert it to equity; or

   -- any other means to eliminate the debt to allow the Company
      to attract additional capital.

The Company continues to review its strategic alternatives,
including raising capital through debt or equity financing in
conjunction with the conversion of the existing debt.

A full-text copy of Prologic's Quarterly Report is available for
free at http://ResearchArchives.com/t/s?11b

Headquartered in Tucson, Arizona, Prologic Management Systems Inc.
-- http://www.prologic.com-- provides a full range of hardware  
and commercial software solutions, with a focus on a UNIX-based
products, as well as Microsoft NT. The products and services
provided by the Company include system integration, software
development, proprietary software products and related services.

As of June 30, 2005, Prologic Management's equity deficit widened
to $2,138,783, from a $2,084,461 deficit at March 31, 2005.


PROVIDENT PACIFIC: MKA Can Foreclose on Timber Ridge Townhomes
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California,
Santa Rosa Division, lifted the automatic stay in Provident
Pacific Corporation's chapter 11 case at the behest of
MKA Capital Group, Inc.  The lender asked the Court to lift the
automatic stay so that it can foreclose on its collateral.  

According to MKA, its collateral isn't adequately protected
because the Debtor's liability insurance policy expired on
July 27, 2005.  Provident has no resources to replace it.

In a hearing on July 28, the Court ordered the Debtor to provide
MKA with proof of replacement liability insurance by Aug. 2.  
On Aug. 2, the Debtor delivered an Insurance Binder.  MKA isn't
satisfied with the binder because it doesn't insure the
improvements on the property.  

The Collateral is the Timber Ridge Townhomes located at 39
Palisade Drive in Kirkwood, California.  

Headquartered in Belvedere, California, Provident Pacific
Corporation, filed for chapter 11 protection on June 8, 2005
(Bankr. N.D. Calif. Case No. 05-11435).  Michael H. Lewis, Esq.,
at Law Offices of Michael H. Lewis, represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed total assets of $39,545,023 and total
liabilities of $28,495,982.


PROXIM CORP: Wants Until December 31 to Decide on Unexpired Leases
------------------------------------------------------------------
Proxim Corporation and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to extend the period
within which they can assume, assume and assign, or reject
unexpired non-residential real property lease and sublease in
Mountain View, California through and including Dec. 31, 2005.

As reported in the Troubled Company Reporter on July 29, 2005,
Terabeam Wireless completed its purchase of substantially all of
the assets of Proxim Corporation, pursuant to an asset purchase
agreement.  The Debtors' non-residential real property leases were
assumed and assigned to Terabeam except for two unexpired leases:

   a) a lease dated Aug. 28, 1992, between Vanni Business Park
      Partnership, as lessor and the Debtor as lessee; and

   b) sublease dated as of Aug. 23, 1999, between the Debtor as
      sublessor, and PlaceWare, Inc., as sublessee.

Under the master lease, Proxim leased the premises from Vanni with
its current rent and other obligations for approximately a total
of $86,000 per month.  The Debtors are substantially current on
all obligations under the master lease except to the rent payment
for August 2005, which has not been paid pending authority to use
their cash collateral.

Pursuant to the sublease, Proxim subleased the premises to
PlaceWare.  Proxim receives approximately $104,000 per month on
account of the Sublease.  Proxim will pay 50% of the premium
received from PlaceWare on the sublease account to Vanni.  Both
master lease and sublease currently expire on March 31, 2006.

The Debtors believe that an extension to decide on leases will
allow them to evaluate and maximize the value of the unexpired
leases.

Headquartered in San Jose, California, Proxim Corporation --
http://www.proxim.com/-- designs and sells wireless networking    
equipment for Wi-Fi and broadband wireless networks. The Debtors
provide wireless solutions for the mobile enterprise, security and
surveillance, last mile access, voice and data backhaul, public
hot spots, and metropolitan area networks.  The Debtor along with
its affiliates filed for chapter 11 protection on June 11, 2005
(Bankr. D. Del. Case No. 05-11639).  When the Debtor filed for
protection from its creditors, it listed $55,361,000 in assets and
$101,807,000 in debts.


PROXIM CORP: Committee Prepares to Challenge Warburg Pincus Claims
------------------------------------------------------------------
The Official Committee of Unsecured Creditors of Proxim
Corporation and its debtor-affiliates asks the U.S. Bankruptcy
Court for the District of Delaware for authority to commence an
adversary proceeding against Warburg Pincus Private Equity VIII,
L.P., and its affiliates.

The Warburg Group asserts a $17,334,246 claim against the Debtors.  
The debt is secured by an interest in substantially all of
Proxim's assets, including a $16.6 million cash on hand realized
from the sale of the Company's assets to Terabeam Wireless in
July.

The Committee wants to challenge the validity, extent and priority
of the Warburg entities' claims in the Debtors' cases.  The
Committee also wants to recharacterize, reclassify and subordinate
Warburg's alleged claims.

Lawyers at Drinker Biddle & Reath LLP represent the Committee.

Headquartered in San Jose, California, Proxim Corporation --  
http://www.proxim.com/-- designs and sells wireless networking   
equipment for Wi-Fi and broadband wireless networks.  The company
is providing its enterprise and service provider customers with
wireless solutions for the mobile enterprise, security and
surveillance, last mile access, voice and data backhaul, public
hot spots, and metropolitan area networks.  The Company and three
of its affiliates filed for chapter 11 protection on June 11, 2005
(Bankr. Del. Case No. 05-11639).  Laura Davis Jones, Esq., and
Tobias S. Keller, Esq., at Pachulski, Stang, Ziehl, Young,
represent the Debtors in their restructuring efforts.  As of
Apr. 1, 2005, the Debtors reported $55,361,000 in total assets and
$101,807,000 in total debts.


PROXIM CORP: Secures Interim Okay to Use $573,500 Cash Collateral
-----------------------------------------------------------------
The Honorable Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware gave Proxim Corporation and its debtor-
affiliates interim approval to use $573,000 cash collateral
securing repayment of debt obligations to Warburg Pincus Private
Equity VIII, L.P., as agent for itself and a consortium of
lenders, Moseley Associates, Inc., and Silicon Valley Bank.  The
Debtors can use cash collateral until September 6, 2005.

The Debtors require immediate access to encumbered cash to fund
their wind-down efforts and remaining business affairs.

The Warburg Group asserts a $17,334,246 claim against the Debtors.  
The debt is secured by an interest in substantially all of
Proxim's assets, including a $16.6 million cash on hand realized
from the sale of the Company's assets to Terabeam Wireless in
July.

The Debtors have outstanding secured obligations to Moseley and
Silicon Valley for less than $100,000 each.

To provide the lenders with adequate protection required under 11
U.S.C. Sec. 363 for any diminution in the value of their
collateral, the Debtors will grant the Warburg Group, Moseley and
Silicon Valley replacement liens to the same extent, validity and
priority as the prepetition lien.  The liens will be subject to
carve-out expenses of at least $400,000.

Headquartered in San Jose, California, Proxim Corporation --
http://www.proxim.com/-- designs and sells wireless networking    
equipment for Wi-Fi and broadband wireless networks. The Debtors
provide wireless solutions for the mobile enterprise, security and
surveillance, last mile access, voice and data backhaul, public
hot spots, and metropolitan area networks.  The Debtor along with
its affiliates filed for chapter 11 protection on June 11, 2005
(Bankr. D. Del. Case No. 05-11639).  When the Debtor filed for
protection from its creditors, it listed $55,361,000 in assets and
$101,807,000 in debts.


QUEBECOR WORLD: Moody's Downgrades Senior Unsec. Rating to Ba2
--------------------------------------------------------------
Moody's Investors Service lowered the senior unsecured rating of
Quebecor World Inc. to Ba2 from Baa3, and assigned a Corporate
Family Rating of Ba2, concluding the review initiated in May 2005.   
The outlook is negative.

The rating was lowered reflecting the effect of continuing
difficult industry conditions on QWI's performance and credit
metrics, coupled with Moody's expectation that debt is unlikely to
reduce as previously anticipated.  Despite an initially successful
effort in 2004 by a new management team to improve operating
performance, results in the first half of 2005 were weaker than
expected by Moody's.  Moody's anticipates that, in order to
improve its competitive position in the longer term, QWI will
incur further restructuring charges, which will limit debt
reduction over a two year rating horizon.  Despite higher
reinvestment plans in the business, and increasing industry
competition, management has recently decided to buy back its own
shares.  Moody's believes this reflects management's priority
toward shareholders over creditors.

The outlook is negative as Moody's expectations for QWI's
financial metrics in 2007 are weak for the Ba2 rating.  Moody's
expects net debt to EBITDA (after Moody's standard adjustments) of
approximately 4.2X, funds from operations to net debt of 15%,
retained cash flow to net debt of 13%, EBITDA-Capex/interest of
2X, and free cash flow to net debt of 4-5%.  QWI will need to
outperform on Moody's expectations in order to retain a Ba2
rating, which might occur if the new printing presses result in
improved operating results, or if management's ongoing
restructuring produces a meaningful margin improvement.  The
rating will be considered for downgrade if management undertakes
additional share buybacks or a significant acquisition or if
operating results underperform due to a loss in revenues or
shrinkage in QWI's margin, reflecting worsening industry
conditions or inability to control costs.  A rating upgrade is not
considered likely over the next 18-24 months.

The assigned Corporate Family Rating of Ba2 is constrained by:

   (1) global industry overcapacity,

   (2) high leverage and related credit metrics,

   (3) increasing capital expenditures which will limit debt
       reduction from free cash flow,

   (4) management focus on shareholder returns which limit debt
       reduction,

   (5) acquisition risk, and

   (6) poor liquidity.

The rating is supported by:

   (1) QWI's position as one of the two largest commercial
       printers in the world,

   (2) geographic, industry and product diversity,

   (3) long-term contractual relationships with major print
       customers, and

   (4) a focus on cost-cutting to address poor industry demand,
       which produced improved results in 2004.

Moody's assumes that QWI's top line will be relatively flat over
the next few years, as industry pricing pressures continue.  While
management is very focused on both incremental as well as
strategic operational improvements, Moody's assumes that the
EBITDA margin (after Moody's standard adjustments and including
restructuring costs) will remain in the 12-13% range demonstrated
through the difficult first half of 2005.  Although QWI's
operating margin may benefit from the 22 new offset presses which
will start arriving in North America in late 2005 and continuing
through 2007, Moody's will not include such improvement in its
expectations until there is tangible evidence to that effect.   
Moody's does expect, however, that QWI will likely incur future
restructuring costs that will dampen margin improvement for the
intermediate term.

As QWI has announced a $330 million North American press
modernization program, Moody's believes that the company may also
choose to further increase capital expenditures to modernize its
European press platform and address protracted profitability
problems in that region.

Moody's believes that the share buyback program now under way, in
an amount of up to approximately US$140 million, demonstrates
management's focus on returning cash to shareholders and
supporting its share price.  Moody's considers this to be
detrimental to creditors, particularly given continuing industry
pressures and the need for QWI to reinvest in order to remain
competitive.  Moody's believes that management is more focused on
its strategic positioning within the industry and on its share
price than improving credit metrics.  Strategic repositioning
currently involves capital expenditures for new presses, but
Moody's also believes that QWI could choose to make future
acquisitions in this very fragmented industry, as it has done
frequently in the past.

Ratings affected by this action:

   -- Quebecor World Inc.

      * Corporate Family Rating, Ba2 (assigned)

      * Senior Unsecured, rated Ba2 (lowered from Baa3) --  
        US$1 billion bank facility due November 2007

   -- Quebecor World (USA) Inc.

      * Senior Subordinated, rated Ba3 (lowered from Ba1)

      * 6% due October 2007 US$113 million

   -- Quebecor World Capital Corporation

      * Senior Unsecured, rated Ba2 (lowered from Baa3)

      * 6.5% debentures due August 2007

      * (puttable August 2004) US$3 million

        (a) 7.25% debentures due January 2007 US$150 million
        (b) 4.875% debentures due November 2008 US$200 million
        (c) 6.125% debentures due November 2013 US$397 million

Quebecor World Inc. is one of the world's largest commercial
printers, headquartered in Montreal, Quebec, Canada.


QUEBECOR WORLD: Has Weak Liquidity, Moody's Says
------------------------------------------------
Moody's Investors Service assigned a speculative grade liquidity
rating of SGL-4 to Quebecor World Inc.  The liquidity rating was
assigned in conjunction with the downgrade of QWI's long-term debt
ratings to speculative grade (Corporate Family Rating of Ba2).

Moody's says issuers rated SGL-4 possess weak liquidity.  They
rely on external sources of financing and the availability of that
financing is, in Moody's opinion, highly uncertain.

For the five quarters ending September 30, 2006, Moody's expects
QWI will likely have cash sources that total about US$650 million
compared to possible claims on cash of about US$880 million.
Moody's believes this cash deficiency of approximately
US$230 million represents poor liquidity.

QWI's US$71 million cash balance at June 30, 2005 is not
considered a source of liquidity as Moody's believes these funds
are required for normal operating requirements or for use in QWI's
captive insurance subsidiary.  Moody's expects that QWI may
generate about US$150 million of annual free cash flow in each of
calendar 2005 and 2006.  However, because of working capital
inflows are likely to reverse to a use of cash in the second half
of 2005, and because QWI typically generates 50% of its cash flow
in the fourth quarter, Moody's believes QWI may not actually
generate any free cash flow over the liquidity forecast period to
September 30, 2006.

At June 30, 2005, Moody's estimates that QWI had US$650 million of
unused availability under its US$1 billion bank revolver, which is
committed until November 2007.  Against this sole source of
liquidity, QWI will potentially use approximately US$880 million
of cash: $260 million to fund debt maturities and $617 million to
fund maturing accounts receivable securitization outstandings.

Additionally, Moody's notes that QWI may have two contingent uses
of cash and one contingent source, none of which are included in
the liquidity analysis due to their uncertain nature.  In June
2006, $160 million of preferred shares become retractable by the
holders, and QWI can settle in shares or cash.  Moody's believes
that QWI intends to settle in cash, as they are currently buying
back shares.  However, Moody's believes that management is
unlikely to use cash in June 2006 without being assured of their
liquidity at least through September 2006.  Moody's also expects
that most or all of the proceeds from the sale of their Commercial
division will be used to fund future share buybacks.  While the
sale is not assured prior to September 2006 neither are the share
buybacks.

Of the US$260 million in debt maturities, US$250 million is
composed of one issue, which matures in March 2006.

QWI operates three accounts receivable programs.  The
US$400 million outstanding in QWI's U.S. accounts receivable
securitization program matures in September 2005 with a one-year
term out option.  The US$140 million outstanding in the European
program matures in the next twelve months, unless renewed.
Finally, the US$75 million outstanding in the Canadian program is
cancelable at any time.

The company's bank availability is subject to an EBITDA coverage
ratio and a debt-to-capitalization ratio; however the specific
levels of these ratios are not public. Moody's notes that the
existence of any material adverse change clause would limit
liquidity under adverse circumstances, which is typically when a
company most needs it.

Quebecor World Inc. is one of the world's largest commercial
printers, with headquarters in Montreal, Quebec, Canada.


RELIANCE GROUP: Committee Wants Court to OK Solicitation Protocol
-----------------------------------------------------------------
As reported in the Troubled Company Reporter on Aug. 24, 2005, the
Official Committee of Unsecured Creditors appointed in Reliance
Group Holdings, Inc.'s chapter 11 proceedings filed a Plan of
Reorganization for RGH and an accompanying Disclosure Statement
explaining the Plan in the U.S. Bankruptcy Court for the Southern
District of New York on Aug. 18, 2005.

The Official Committee asks the U.S. Bankruptcy Court for the
Southern District of New York to:

  a) approve solicitation and tabulation procedures to process
     votes to accept or reject the Plan of Reorganization for
     Reliance Group Holdings, Inc.;

  b) establish a record date to determine which Holders of Claims
     against RGH are entitled to receive Solicitation Materials
     and to vote on the Plan;

  c) establish a voting deadline;

  d) schedule and approve the form and manner of notice of the
     Confirmation Hearing; and

  e) establish a deadline for filing objections to confirmation
     of the Plan.

The Creditors' Committee wants the Court to set the date on which
an order approving the Disclosure Statement is entered as the
Voting Record Date.

"Setting a Voting Record Date will assist the Creditors'
Committee and RGH's Voting Agent -- Bankruptcy Services, Inc. --
in preparing and distributing the Solicitation Materials," Arnold
Gulkowitz, Esq., at Orrick, Herrington & Sutcliffe, in New York
City, tells Judge Gonzalez.

In addition, the Court should approve the Creditors' Committee's
form of Ballots for voting on the Plan.  Mr. Gulkowitz notes that
the Ballots have been modified from established form to permit
holders of Claims in Classes 3a, 3b and 3c to indicate whether
they will opt-out of assigning certain claims in exchange for
receiving additional distributions.  Although the Ballots may not
exactly mirror the official form, the modifications are necessary
to efficiently implement the Plan.

                Solicitation Materials and Ballots

The Committee wants permission to provide the Ballots only to
parties entitled to vote on the Plan.  Classes 1 and 2 are
unimpaired and are deemed to accept the Plan.  Classes 5 and 6
are impaired and are deemed to reject the Plan.  Therefore, only
Classes 3a, 3b, 3c and 4 should receive Ballots.

The Solicitation Materials will be distributed by the Voting
Agent to:

   -- the U.S. Trustee;
   -- RGH;
   -- the Securities and Exchange Commission;
   -- the Internal Revenue Service; and
   -- Claimholders entitled to vote on the Plan.

Since the Creditors' Committee may not be able to determine the
identity of all Beneficial Holders of Claims, the Committee will
distribute the Solicitation Materials only to known Record
Holders.  Record Holders are obligated to distribute the
Solicitation Materials to their Beneficial Holders within five
days of receipt.  RGH will reimburse Record Holders for any out-
of-pocket expenses incurred in distributing the Solicitation
Materials to Beneficial Holders.

Ballots must be submitted to:

               Bankruptcy Services LLC
               757 Third Avenue
               New York, NY  10017-2072
               Attn: Reliance Group Holdings

The Creditors' Committee will not provide the Disclosure
Statement and Plan to Equity Holders.  According to Mr.
Gulkowitz, there is no reason to require distribution of these
materials to Equity Holders who are not entitled to vote on the
Plan.  Impaired parties can acquire the documents on their own.
Instead, the Creditors' Committee will send these parties a Non-
Voting Notice.

                              Notices

Approximately 25 days before the Confirmation Objection Deadline,
the Creditors' Committee will publish the Confirmation Hearing
Notice in The Wall Street Journal (National Edition).  This
notification will satisfy the notice provisions of Rule 3017(d)
of the Federal Rules of Bankruptcy Procedure, while eliminating
substantial and needless expense to RGH's estate and minimizing
the risk of confusion to parties unaffected by the Plan.  Mr.
Gulkowitz states that the Creditors' Committee is not responsible
for Disclosure Statement Notices that are returned by the U.S.
Postal Service as undeliverable.

                   Amounts for Voting Purposes

Claimholders in Classes 3a, 3b, 3c, and 4 are impaired and
entitled to vote on the Plan.  For voting purposes only, each
holder of a Voting Claim will have an allowed claim in an amount
equal to the lesser of:

  a) the amount of the Claim as set forth in the schedules of
     liabilities filed by RGH; or

  b) the amount of the Claim as set forth in a proof of claim.

The procedures are subject to these exceptions:

  1) If a Claim is contingent, unliquidated or disputed, it will
     be allowed temporarily for voting at $1;

  2) Any Claim that has been estimated or allowed by the Court
     will be temporarily allowed in that amount;

  3) If a Claim is listed in the Schedules as contingent,
     unliquidated or disputed without a timely filed proof of
     claim, the Claim should be temporarily disallowed for voting
     purposes;

  4) If a Claim is not listed in the Schedules and a proof of
     claim is timely filed, the Claim should be temporarily
     allowed in the amount set forth in the proof of claim, for
     voting purposes only; and

  5) If the Creditors' Committee, the Bank Committee, RGH or RFSC
     have objected to the Claim at least 10 days prior to the
     Voting Deadline, the Claim should be temporarily disallowed
     for voting purposes.

Classes 3a, 3b and 3c Claimholders who do not check the "Opt-Out"
box on their Ballot will be deemed to have agreed to the
assignment of their D&O Litigation Claims and Creditor Litigation
Claims to RGH on the Effective Date.

                     The Confirmation Hearing

The Creditors' Committee will request at the Disclosure Statement
Hearing that the Court schedule the Confirmation Hearing seven
days after the Voting Deadline.

Notice of the Confirmation Hearing will be given to:

   a) the Office of the U.S. Trustee,

   b) counsel to RGH,

   c) counsel to the Official Unsecured Bank Committee,

   d) counsel to M. Diane Koken, Insurance Commissioner of
      Pennsylvania and Statutory Liquidator of Reliance Insurance
      Company,

   e) the Indenture Trustees for RGH's 9% Notes and 9.75% Notes,

   f) counsel to the Pension Benefit Guaranty Corporation,

   g) the Internal Revenue Service,

   h) the Securities Exchange Commission,

   i) the Office of the United States Attorney, and

   j) any other governmental agency as required and all parties
      that requested notices.

The Creditors' Committee asks the Court to set 28 days after the
Confirmation Hearing Notice is mailed as the last date for filing
and serving Objections to confirmation of the Plan.  Confirmation
Objections should be delivered to:

        Counsel to the Creditors' Committee
        Orrick, Herrington & Sutcliffe
        666 Fifth Avenue
        New York, New York  10103
        Attn: Arnold Gulkowitz, Esq.

        Counsel to RGH
        Debevoise & Plimpton
        919 Third Avenue
        New York, New York  10022
        Attn: Steven R. Gross, Esq.

        Counsel to the Bank Committee
        White & Case
        1155 Avenue of the Americas
        New York, New York  10036
        Attn: Andrew P. DeNatale, Esq.

        Counsel to the Liquidator
        Blank Rome
        The Chrysler Building
        405 Lexington Avenue
        New York, New York  10174
        Attn: Michael Z. Brownstein, Esq.

        The Office of the U.S. Trustee
        33 Whitehall Street, Suite 2100
        New York, New York  10004
        Attn: Mary Tom, Esq.

Mr. Gulkowitz tells Judge Gonzalez that the Creditors' Committee
will solicit votes on the Plan immediately upon approval of the
Disclosure Statement.  The Creditors' Committee will seek
confirmation of the Plan once voting is concluded.

Headquartered in New York, New York, Reliance Group Holdings, Inc.
-- http://www.rgh.com/-- is a holding company that owns 100% of   
Reliance Financial Services Corporation.  Reliance Financial, in
turn, owns 100% of Reliance Insurance Company.  The holding and
intermediate finance companies filed for chapter 11 protection on
June 12, 2001 (Bankr. S.D.N.Y. Case No. 01-13403) listing
$12,598,054,000 in assets and $12,877,472,000 in debts.  The
insurance unit is being liquidated by the Insurance Commissioner
of the Commonwealth of Pennsylvania.  (Reliance Bankruptcy News,
Issue No. 78; Bankruptcy Creditors' Service, Inc., 215/945-7000)


RHODE ISLAND: New Gas Plant Cues Fitch to Raise Single-B Rating
---------------------------------------------------------------
Fitch assigns an underlying 'BBB' rating to approximately
$26.2 million Providence, RI, special obligation tax increment
refunding bonds series E and F.  The bonds are scheduled for
negotiation the week of Sept. 19 with Bank of America as
underwriter.  In addition, Fitch upgrades to 'BBB-' from 'B' and
removes from Rating Watch Positive the underlying rating on
$30.7 million outstanding special obligation bonds series A-D.  
Series E and F bond proceeds will refund all outstanding series A-
D bonds and at closing, the 'BBB-' rating will be withdrawn.  The
bonds mature through 2016.  The Rating Outlook is Stable.

The upgrade to 'BBB-' on the outstanding series A-D bonds reflects
Dominion Resources, Inc.'s acquisition of the 495-megawatt
combined-cycle natural gas-fired Manchester Street Station located
in the city of Providence, from which the tax revenues securing
the bonds are generated.  Dominion Resources purchased the plant
in January of this year from bankrupt US Gen New England, Inc.
Fitch rates the senior-unsecured debt of Dominion Resources, Inc.
'BBB+'; Stable Outlook.  The 'BBB' rating on the series E and F
bonds additionally reflects a covenant by the city (GO bonds rated
'A' by Fitch) to budget any required replenishment of the debt
service reserve fund on the series E and F bonds.  Payment of this
obligation is subject to appropriation.

The series E and F bonds are secured by net tax increment revenues
of the property as well as the covenant to replenish the debt
service reserve fund.  Net tax increment is currently derived from
a single taxpayer, the company, pursuant to an amended five-year
tax stabilization agreement that expires in June 2008.  While the
amended agreement was entered into between the city and US Gen New
England, the original agreement from 1992 states that its
provisions will transfer with any transfer of ownership of the
plant during the term covered by the agreement.  

The city continues to receive full and timely payment of revenues
under the agreement, quarterly, totaling $6.6 million per year
including the three payments made by the company in January and
April and July of this year.  Coverage of the $3.7 million maximum
annual debt service from net tax increments is stable at 1.58
times (x), but subject to change, and possibly a decline, upon
expiration of the agreement.

A preliminary assessment indicates that the value of the plant
would generate property taxes yielding about 1.27x. Additional
security is generated from the fully funded debt service reserve
fund.  The MADS payment totals approximately 1% of the city's
general fund budget, and the city has a history of appropriating
like payments for another facility under a similar debt service
reserve fund replenishment commitment.

Fitch lowered the underlying rating to 'B' from 'BBB-' and placed
the rating on Rating Watch Negative in July 2003 following the
bankruptcy filing of the then current owner, US Gen New England
Inc.  Fitch later revised the Rating Watch to Positive when the
company was identified by the bankruptcy court as the highest
bidder for the plant, with a rating upgrade pending the closing of
the sale of the plant.


RISK MANAGEMENT: Wants Lease Decision Period Stretched to Nov. 4
----------------------------------------------------------------
Risk Management Alternatives, Inc., and its debtor-affiliates ask
the U.S. Bankruptcy Court for the Northern District of Ohio,
Eastern Division, to extend, until Nov. 4, 2005, the period within
which they can elect to assume, assume and assign, or reject 20
unexpired non-residential real property leases.  

The Debtors tell the Bankruptcy Court that they have been unable
to sufficiently review the importance of these leases to their
reorganization because they have focused their time on operating
their businesses and negotiating a sale of substantially all of
their assets to NCO Group, Inc.

Matthew A. Salerno, Esq., at McDonald Hopkins Co., LPA, states
that the leases are essential assets of the Debtors' estates and
integral to the continued operation of their businesses in the
face of an impending sale.  Mr. Salerno explains that the
extension will give the Debtors more time to make an intelligent
decision as to which of these leases to assume or reject.

The Debtors assure the Bankruptcy Court that the requested
extension will not prejudice any of their lessors because they are
current and will continue to pay all postpetition rent.

A list of the Debtor's unexpired non-residential real property
leases is available for free at:

              http://researcharchives.com/t/s?11c

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.


S-TRAN: Court Okays DIP Loan & Cash Collateral Use Extension
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
S-Tran Holdings, Inc., and its debtor-affiliates to obtain more
funds from LaSalle Business Credit, LLC, through a secured post-
petition financing facility.  The Debtors can also continue
accessing cash collateral securing repayment of debt obligations
to LaSalle and American Capital.

S-Tran Holdings has until Nov. 11 to use the lenders' encumbered
fund and to obtain fresh capital from LaSalle.

As previously reported, the Debtors owe LaSalle, under a senior
secured credit facility:

   a) a term loan of approximately $4,100,000;
   b) a revolver with an outstanding balance of $4,200,000; and
   c) certain letters of credit issued in favor of Protective
      Insurance for $3,500,000.

The Debtors also owe $7.5 million to American Capital Financial
Services, Inc., as agent for American Capital Strategies, Ltd.,
and ACS Funding Trust I.

                     Postpetition Financing

On June 14, 2005, the Court gave the Debtors authority to obtain
approximately $9 million in secured postpetition financing from
LaSalle.  At the same time, the Debtors were also given permission
to use their lenders' cash collateral.

The DIP loan is secured by interests in all of the Debtors'
presently owned and after-acquired personal property and
prepetition collateral.  In addition, LaSalle was granted a
superpriority administrative claim.

To provide the lenders with adequate protection required under 11
U.S.C. Sec. 363 for any diminution in the value of their
collateral, the Debtors grant LaSalle and American Capital  
replacement liens to the same extent, validity and priority as the
prepetition lien.

As previously reported, S-Tran recently concluded the sale of its
personal property.  The Court authorized S-Tran to pay the
$8,780,000 net proceeds from the sale to LaSalle.

                      Additional Financing

The Debtors have reached an agreement with LaSalle and American
Capital for the extension of the postpetition financing and the
use of the cash collateral in accordance with a proposed weekly
budget through Nov. 11:

                                     Week Ending
                                     -----------
                  Sept. 2    Sept. 9    Sept. 16    Sept. 23    Sept. 30
                  -------    -------    --------    --------    --------
  Total Cash                    
  Receipts        $175,000  $150,000    $160,000    $125,000    $120,000
  
  Total
  Payroll        $25,693     $25,693     $35,219     $25,094     $21,983
  
  Total
  Disbursement   $119,443    $98,443    $129,590     $33,094     $51,233
  
  
                 Oct. 7     Oct. 14    Oct. 21    Oct. 28    Nov. 4    Nov.  11
                 ------     -------    -------    -------    ------    --------
  Total Cash    $120,000   $170,000   $115,000   $115,000   $245,000   $100,000
  Receipts
  
  Total
  Payroll       $20,277    $27,862     $36,812    $13,079    $13,079    $70,400        
  
  Total
  Disbursement  $32,027    $38,362     $48,812    $18,079    $23,579    $18,400
  

Headquartered in Cookeville, Tennessee, S-Tran Holdings, Inc.,
provides common carrier services and specialized in less-than-
truckload shipments and also supplies overnight and second-day
service to shippers in 11 states in the Southeast and Midwestern
United States.  The Company and its debtor-affiliates filed for
chapter 11 protection on May 13, 2005 (Bankr. D. Del. Case No.
05-11391).  Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl,
Young, Jones & Weintraub P.C. represents the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed total assets of $22,508,000 and total
debts of $30,891,000.


SAINT VINCENTS: Committee Wants Thelen Reid as Counsel
------------------------------------------------------
The Official Committee of Unsecured Creditors of Saint Vincents
Catholic Medical Centers of New York and its debtor-affiliates has
selected Thelen Reid & Priest LLP as its counsel.

According to the Committee, Thelen Reid's broad-based practice,
which includes expertise in the areas of finance, litigation, tax,
health care, real estate, as well as bankruptcy, will permit it to
fully represent the creditors' interests in an efficient and
effective manner.

In addition to acting as primary spokesman for the Committee,
Thelen Reid will also assist, advise and represent the Committee
with respect to:

    (a) the administration of the Debtors' cases and the exercise
        of oversight with respect to the Debtors' affairs
        including all issues arising from or impacting the Debtors
        or the Committee;

    (b) the preparation on the Committee's behalf all necessary
        applications, motions, order, reports, and other legal
        papers;

    (c) appearances in the Bankruptcy Court to represent the
        Committee's interests;

    (d) the negotiation, formulation, drafting, and confirmation
        of any plan of reorganization or liquidation and related
        matters;

    (e) the exercise of oversight with respect to any transfer,
        pledge, conveyance, sale, or other liquidation of the
        Debtors' assets;

    (f) such investigation, if any, as the Committee may desire
        concerning, among other things, the assets, liabilities,
        financial condition, and operating issues concerning the
        Debtors that may be relevant;

    (g) such communication with the Committee's constituents and
        others, as the Committee may consider desirable in
        furtherance of its responsibilities;

    (h) negotiations regarding the Debtors' management; and

    (i) the performance of all the Committee's duties and powers
        under the Bankruptcy Code and the Bankruptcy Rules and the
        performance of other services that is in the interests
        of those represented by the Committee or as may be ordered
        by the Court.

Martin G. Bunin, Esq., a partner at Thelen Reid informs the Court
that the firm is willing to serve as counsel to the Committee and
to receive compensation on an hourly basis.  Its current hourly
rates for attorneys and legal assistants are:

                    Partner      $330 - $685
                    Counsel      $320 - $600
                    Associate    $210 - $460
                    Paralegal     $95 - $320

Thelen Reid is a "disinterested person" as that term is defined
in Section 101(14) of the Bankruptcy Code, in that the firm:

    (a) is not a creditor, an equity security holder or an insider
        of the Debtors;

    (b) is not and has not been an investment banker for any
        outstanding security of the Debtors;

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

    (d) is not and was not, within two years before the Petition
        Date, a director, officer, or employee of the Debtors or
        of an investment banker.

Thus, the Committee seeks the Court's permission to retain Thelen
Reid, nunc pro tunc to July 18, 2005.

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: Wants to Make $200,000 Due Diligence Payment
------------------------------------------------------------
Saint Vincents Catholic Medical Centers of New York and its
debtor-affiliates ask the U.S. Bankruptcy Court for the Southern
District of New York for authority to pay Due Diligence Fees
totaling $200,000.

The Debtors are currently negotiating with three potential lenders
to obtain a final DIP funding, which would be larger and would
replace the $100,000,000 HFG Healthco-4 LLC facility.

Each Potential Lender has requested payment of certain due
diligence and related fees totaling $200,000 to fund the process
required to evaluate the benefits and risks of providing a loan
commitment to the Debtors.

Certain of the Potential Lenders have advised the Debtors that
they will not conduct any further due diligence without Court
approval of the Due Diligence Fees.

After a thorough analysis of (i) the scope of the due diligence
to be performed by the Potential Lenders in connection with the
Final DIP Loan, and (ii) the standard due diligence fees required
by lenders for a DIP loan, the Debtors have concluded that
payment of up to $200,000 for reimbursement of reasonable out-of-
pocket due diligence expenses to each of the three Potential
Lenders is necessary and reasonable under the circumstances and
will ensure that the Debtors will be able to obtain sufficient
liquidity when needed to fund their Chapter 11 cases.

Unused portions of the Due Diligence Fees may be returned to the
Debtors if the Potential Lender is unable to close on the Final
DIP Loan.  The Due Diligence Fees may also be credited against
other fees due at the closing of the Final DIP Loan.

Headquartered in New York, New York, Saint Vincents Catholic
Medical Centers of New York -- http://www.svcmc.org/-- the    
largest Catholic healthcare providers in New York State, operate
hospitals, health centers, nursing homes and a home health agency.
The hospital group consists of seven hospitals located throughout
Brooklyn, Queens, Manhattan, and Staten Island, along with four
nursing homes and a home health care agency.  The Company and six
of its affiliates filed for chapter 11 protection on July 5, 2005
(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951).  Gary
Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &
Emery, LLP, represent the Debtors in their restructuring efforts.
As of Apr. 30, 2005, the Debtors listed $972 million in total
assets and $1 billion in total debts.  (Saint Vincent Bankruptcy
News, Issue No. 8; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


SALOMON BROTHERS: Poor Performance Prompts Fitch to Junk Ratings
----------------------------------------------------------------
Fitch Ratings has taken rating actions on these Salomon Brothers
Mortgage Securities VII, Inc., mortgage pass-through certificates:

   Series 2000-UP1

      -- Class A1 and A2, PO affirmed at 'AAA';
      -- Class B-1 affirmed at 'AAA';
      -- Class B-2 affirmed at 'AA+';
      -- Class B-3 affirmed at 'BBB+';
      -- Class B-4 downgraded to 'B' from 'BB';
      -- Class B-5 downgraded to 'C' from 'CC'.

   Series 2003-NBC1 Group 1

      -- Class AV1 affirmed at 'AAA';
      -- Class BV-1 affirmed at 'AAA';
      -- Class BV-2 affirmed at 'AAA';
      -- Class BV-3 affirmed at 'AA';
      -- Class BV-4 affirmed at 'A';
      -- Class BV-5 affirmed at 'B+'.

   Series 2003-NBC1 Group 2

      -- Class AV2 affirmed at 'AAA'.

   Series 2003-NBC1 Group 3

      -- Class AV3 affirmed at 'AAA'.

   Series 2003-NBC1 Group 4

      -- Class AV4 affirmed at 'AAA'.

   Series 2003-NBC1 Group 5

      -- Class AF affirmed at 'AAA';
      -- Class BF-1 affirmed at 'AAA';
      -- Class BF-2 affirmed at 'AA';
      -- Class BF-3 affirmed at 'BBB+';
      -- Class BF-4 affirmed at 'BB';
      -- Class BF-5 affirmed at 'B'.

The affirmations, affecting $319.82 million of debt, are due to
stable collateral performance and moderate growth in credit
enhancement.  The above deals have pool factors (i.e., current
mortgage loans outstanding as a percentage of the initial pool)
ranging from 12% to 40%.

The negative rating actions on series 2000-UP1 are the result of
poor collateral performance and the deterioration of asset quality
beyond original expectations, and affect $2,289,913 of outstanding
certificates.  The transaction is collateralized by prime 30-year
fixed-rate mortgage loans.  As of the July 2005 distribution, the
current pool balance is $70,348,590 and there are 1,791 mortgage
loans remaining.  The 90-plus delinquencies represent 11.48% of
the mortgage pool, and foreclosures and real estate owned
represent 2.43% and 1.95%, respectively.

The series 2000-UP1 mortgage loans are being serviced by Regions
Mortgage, a division of Union Planters Bank, N.A., which is rated
'RPS2-' by Fitch.  The National Bank of Commerce is the master
servicer for the series 2003-NBC1.

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


SCARLET OAKS: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Scarlet Oaks Country Club, LLC
        2 Dairy Road
        Poca, West Virginia 25159-9643

Bankruptcy Case No.: 05-22713

Type of Business: The Debtor operates a facility which
                  consists of an 18-hole golf course, tennis
                  courts, swimming pool, and clubhouse.

Chapter 11 Petition Date: August 26, 2005

Court: Southern District of West Virginia (Charleston)

Debtor's Counsel: Joseph W. Caldwell, Esq.
                  Caldwell & Riffee
                  P.O. Box 4427
                  Charleston, West Virginia 25364-4427
                  Tel: (304) 925-2100
                  Fax: (304) 925-2193

Estimated Assets: $0 to $50,000

Estimated Debts:  $0 to $50,000

The Debtor does not have Unsecured Creditors who are not insiders.


SEAN HORNBECK: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Sean Keith Hornbeck
        125 Tattnall Court
        Gallatin, Tennessee 37066

Bankruptcy Case No.: 05-10302

Type of Business: The Debtor previously filed for chapter 11
                  protection on May 2005 (Bankr. M.D. Tenn.
                  Case No. 05-5952).

Chapter 11 Petition Date: August 27, 2005

Court: Middle District of Tennessee (Nashville)

Judge: George C. Paine

Debtor's Counsel: William Ashby Smith, Jr., Esq.
                  Law Offices of William Ashby Smith Jr.
                  P.O. Box 1358
                  Fairview, Tennessee 37062
                  Tel: (615) 799-3328
                  Fax: (615) 799-0329

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                                   Claim Amount
   ------                                   ------------
American Express                                 $40,582
P.O. Box 650448
Dallas, TX 75265-0448

MBNA America                                     $36,000
P.O. Box 15102
Wilmington, DE 19886-5102

MBNA America                                     $25,000
P.O. Box 15102
Wilmington, DE 19886-5102

MBNA America                                     $15,000
P.O. Box 15102
Wilmington, DE 19886-5102

Discover                                          $9,282
P.O. Box 15251
Wilmington, DE 19886-5251

The Governors Club                                $3,821
9681 Concord Road
Brentwood, TN 37027

T-Mobile                                          $2,894
c/o Sunrise Credit Service
200 Airport Plaza
Farmington, NY 11735

The Governors Club                                $2,882
9681 Concord Road
Brentwood, TN 37027

Union College                                     $2,840
c/o ECSI
181 Montrose Run Road
Corapolis, PA 15108

Nolensville/College Grove                         $2,383
P.O. Box 127
Nolensville, TN 37135

Albany Law School                                 $1,500
c/o University Accounting Service
P.O. Box 5291
Carol Stream, IL 60197-5291

Atomos Energy                                     $1,225
P.O. Box 9001949
Louisville, KY 40290-1949

Mercedes Benz Credit                              $1,031
P.O. Box 551080
Jacksonville, FL 32255

GC Landscaping                                      $948
9681 Concord Road
Brentwood, TN 37027

Barnes Plumbing                                     $899
207 Century Court
Franklin, TN 37064

American Express                                    $681
c/o Nationwide Credit Inc.
P.O. Box 740640
Atlanta, GA 30374-0640

Four Seasons                                        $300
P.O. Box 836
Nashville, TN 37135

Middle Tennessee Electric Co.                       $154
P.O. Box 681709
Franklin, TN 37068

Federal Express                                      $74
c/o OSF
P.O. Box 965
Brookfield, WI 53008-0965

Federal Express                                      $51
c/o OSF
P.O. Box 965
Brookfield, WI 53008-0965


SOUTHWEST FLORIDA: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Southwest Florida Heart Group, P.A.
        aka Southwest Florida Heart Group
        8540 College Parkway
        Fort Myers, Florida 33919

Bankruptcy Case No.: 05-17167

Type of Business: The Debtor provides a comprehensive range of
                  in-office and hospital-based services.  
                  See http://www.swfheartgroup.com/

Chapter 11 Petition Date: August 29, 2005

Court: Middle District of Florida (Fort Myers)

Debtor's Counsel: Jeffrey W. Leasure, Esq.
                  Jeffrey W. Leasure, PA
                  P.O. Box 61169
                  Fort Myers, Florida 33906
                  Tel: (239) 275-7797

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                                      Claim Amount
   ------                                      ------------
   Southwest Florida Heart Group                   $324,997
   Employee 401(k) Profit Sharing Plan
   8010 Summerlin Lakes Drive
   Fort Myers, FL 33907-1817

   Lawrence A. Kline, D.O.                         $316,599
   3950 E. Patrick Lane
   Phoenix, AZ 85050-5442

   Daniel R. Schwartz, M.D.                        $295,974
   67 New England Avenue, #D
   Summit, NJ 07901-1800

   Eliot B. Hoffman, M.D.                          $295,974
   14171 Metropolis Avenue, Suite 101
   Fort Myers, FL 33912

   Steven R. West, M.D.                            $295,974
   14171 Metropolis Avenue, Suite 101
   Fort Myers, FL 33912

   Richard A. Chazal, M.D.                         $275,079
   671 North Town & River Drive
   Fort Myers, FL 33919

   James A. Conrad, M.D.                           $275,079
   9041 Ligon Court
   Fort Myers, FL 33908

   Michael D. Danzig, M.D.                         $275,079
   5010 Royal Shores Drive, #201
   Estero, FL 33928

   David R. Axline, M.D.                           $275,079
   1755 3rd Street South
   Naples, FL 34102

   M. Erick Burton, M.D.                           $275,079
   6181 Tidewater Island Circle
   Fort Myers, FL 33908

   William M. Miles, M.D.                          $275,079
   11510 Compass Point Drive
   Fort Myers, FL 33908

   Herman L. Spilker, M.D.                         $275,079
   292 Bahia Point
   Naples, FL 34103

   Paul A. Hanna, M.D.                             $112,703

   US Cardio Vascular Incorporated                  $51,000

   Lee County Tax Collector                         $32,112

   Carlo D. Santos-Ocampo, M.D.                     $27,589

   Brian A. Hanlon, M.D.                            $27,589

   Steven T. Lee, M.D.                              $27,589

   Michael A. Corbellini, D.O.                      $27,589

   Cardinal Health Nuclear Pharmacy Services        $18,000


SPECIAL METALS: Precision Castparts Acquiring Assets for $303MM
---------------------------------------------------------------
Precision Castparts Corp. proposes to buy substantially all of
Special Metals Corp.'s assets for $303 million, the Buffalo News
reports.  The deal also includes Precision's assumption of Special
Metal's $237 million debt.

Mark Donegan, Precision's Chief Executive Officer, told the
Buffalo News that the transaction will give his company an
internal supply of nickel-based billet for its forged products.  
As a result of the acquisition, Special Metals' Dunkirk, N.Y.,
operation is expected to increase production.  

William J. Pienta, the United Steelworkers of America, District 4
director, told the Buffalo News that the deal means more security
for union members.

Precision Castparts, based in Portland, Ore., makes metal
components and products for the aerospace, power generation,
automotive and general industrial markets.  

The proposed acquisition boost Precision's stock price on the New
York Stock Exchange by 6.73%.  The shares closed at $96.75 on
Friday.

Special Metals is the world's largest and most-diversified
producer of high-performance nickel-based alloys. Its specialty
metals are used in some of the world's most technically demanding
industries and applications, including: aerospace, power
generation, chemical processing, and oil exploration. Through its
10 U.S. and European production facilities and a global
distribution network, Special Metals supplies over 5,000 customers
and every major world market for high-performance nickel-based
alloys.

Special Metals filed for chapter 11 protection on March 27, 2002
(Bankr. E.D. Ky. Case No. 02-10335).  Gregory R. Schaaf, Esq., at
Greenebaum Doll & McDonald PLLC represented the Company while in
bankruptcy.  As of Sept. 30, 2001, Special Metals listed
$790,462,000 in total assets and $774,306,000 in total debts.  The
Company emerged from bankruptcy on October 20, 2003.


TECNET INC: Trustee Wants Bar Date for Newly Discovered Creditors
-----------------------------------------------------------------
Scott M. Seidel, the Chapter 7 Trustee overseeing the liquidation
of TecNet, Inc., asks the U.S. Bankruptcy Court for the Northern
District of Texas, Dallas Division, to establish a bar date for
newly discovered creditors.

Mr. Seidel discloses that through his investigation, he discovered
additional creditors that have not been provided with a Notice to
File Claims and have not had the opportunity to file their proofs
of claim.

The trustee tells the Court a bar date must be established for the
newly discovered creditors so that they may be given a chance to
file their claims.

Headquartered in Garland, Texas, TecNet, Inc., provides
telecommunication services, filed for chapter 11 protection on
April 8, 2004 (Bankr. N.D. Tex. Case No. 04-34162) and its case
was converted to a chapter 7 liquidation proceeding on June 4,
2004.  Scott M. Siedel serves as the chapter 7 Trustee.  Mark A.
Weisbart, Esq., represents the Debtor in its restructuring
efforts.  When the Company filed for protection from its
creditors, it listed estimated debts of over $10 million and
estimated debts of over $100 million.  On June 7, 2005, the Court
converted the chapter 11 case to a chapter 7 proceeding.  Scott M.
Seidel was appointed as the Chapter 7 Trustee.


TENET HEALTHCARE: Default Notice Prompts Fitch's Negative Watch
---------------------------------------------------------------
Fitch Ratings has placed Tenet Healthcare Corp.'s ratings on
Rating Watch Negative after the company announced that it received
a notice of default from holders of $139.9 million (of the $450
million outstanding principal) of the company's 6 7/8% senior
unsecured notes due 2031.

The notice was delivered pursuant to the terms of the indenture
governing the notes and cites Tenet's failure to file its Form 10-
Q (for the three months ended June 30, 2005) on a timely basis
with the Securities and Exchange Commission and the notes'
trustee.  Receipt of the notice starts a 90-day cure period
(through Nov. 23, 2005).  Tenet will avoid an event of default if
it files its Form 10-Q within this cure period.  If the default is
not cured within the 90-day period, bondholders may elect to
declare the principal amount of the notes to be due and payable
immediately.  Such an action could trigger a cross default under
the company's other outstanding bond issuances.

The company has stated that it believes that it will be able to
cure the default by filing the 10-Q within the 90-day cure period.  
Fitch will monitor the company's progress towards filing its 10-Q.  
If Tenet files the 10-Q within the 90-day cure period, no event of
default will have occurred and the ratings will be removed from
Rating Watch Negative, and the Negative Rating Outlook (reflecting
ongoing, longer-term operational, and legal concerns) would be re-
instated.  If the company fails to file in the 90-day cure period
a negative rating action may be warranted.

Tenet has approximately $4.8 billion in debt outstanding, mostly
senior unsecured notes with the earliest maturity being the 6 3/8%
senior unsecured notes due 2011.  Tenet's unrestricted cash
balance at June 30, 2005 was approximately $1.6 billion.  Tenet's
current ratings include the following:

    -- Senior unsecured notes 'B-';
    -- Issuer default rating 'B-';
    -- Recovery rating 'R4'.


TEREVE HOLDINGS: Bowring Retail Chain Seeks CCAA Protection
-----------------------------------------------------------       
Bowrings, a chain of retail gift stores operating 64 locations in
Canada, filed for protection under the Companies' Creditors
Arrangement Act, according to a report by the National Post.

Most of the Company's mall stores have incurred significant
financial losses since last year.  The Company cited intense
competition from other domestic and U.S.-based retail chains,
which have moved into the retail segments previously dominated by
Bowrings, the changing shopping habits of their primary customers
and the increasing lease costs of their mall-based stores as
reasons for declining sales since last year.

Tereve Holdings Ltd., the operator of the Bowrings chain of
stores, stated in its court filings that it owes creditors
approximately C$20.6 million, with C$8,820,000 owed to the Bank of
Nova Scotia, its main secured lender, according to the National
Post.

As part of its reorganization efforts, Tereve Holdings will close
34 mall-based stores this year and intends to restructure or sell
30 stores located in suburban big-box stores.

Tereve says it will concentrate on its suburban big-box stores
because they operate at a profit.  

Established in Newfoundland, Canada, Bowring is one of the oldest
and most respected names in Canadian retailing.  Bowring stores
are located in most major malls in larger cities across Canada.
Bowring mall stores sell a wide array of gifts, fashion tableware,
decorative home accessories and other home and gift items.


TERMOEMCALI FUNDING: Soliciting Consents on Chapter 11 Prepack
--------------------------------------------------------------
TermoEmcali Funding Corp. launched an offer to exchange all
outstanding 10.125% Senior Secured Notes Due 2014 for Senior
Secured Notes Due 2019, a consent solicitation and solicitation of
acceptances of a prepackaged plan of reorganization, on Aug. 11,
2005.  

The out-of-court restructuring will consist of an offer to
exchange each $1,000 of outstanding principal amount of 10-1/8%
Senior Secured Notes Due 2014 for $968.58 in principal amount of
new Restructured Senior Secured Notes Due 2019.  The Restructured
Notes will bear interest rates escalating from 6% per annum
effective as of the first day of the month in which the exchange
offer is effective to 10-1/8% per annum effective from July 1,
2009, plus $31.42 in Cash.  The payment recognizes that if $1,000
principal amount of Existing Senior Secured Notes had been
exchanged for $1,000 principal amount of Restructured Senior
Secured Notes on June 16, 2004, an additional $31.42 in principal
would have been amortized since that exchange is based on the
actual interest payments exceeding the interest that would have
been paid at the applicable restructured interest rates to the
holders of the Existing Senior Secured Notes since June 16, 2004.  
The Restructured Senior Secured Notes are expected to have the
opportunity for principal prepayments, monthly installment
payments, and certain security that would not be available to the
Existing Senior Secured Notes.

The financial restructuring will also consist of a consent
solicitation for the New Indenture, the New Common Agreement and
to amend, waive or terminate certain agreements or provisions
thereof, including, but not limited to, the Existing Indenture and
the Existing Common Agreement applicable to the Existing Senior
Secured Notes.  By validly tendering the Existing Senior Secured
Notes, noteholders will automatically be deemed to have:

        (a) given consent to the proposed amendments, waivers and
            terminations with respect to all of the Existing
            Senior Secured Notes tendered;

        (b) agreed to the exchange;

        (c) authorized and directed the Existing Indenture Trustee
            to execute the proposed amendments, waivers and
            terminations and to take such further necessary action
            to effectuate the exchange, including directing the
            Collateral Agent to execute the amendments, waivers
            and terminations and to take such further action
            necessary on its part to effectuate the exchange;

        (d) accepted the Prepackaged Plan and

        (e) accepted the releases.

The proposed amendments, waivers and terminations will become
operative only if the Exchange Offer closes.  Obtaining the
requisite consent of the holders of at least 94.5% of the
aggregate outstanding principal balance of the Existing Senior
Secured Notes is one of the conditions to the closing of the
Exchange Offer.

            Existing vs. Restructured Senior Secured Notes

If the Exchange Offer is completed, there will be a number of
differences between the Existing Senior Secured Notes that are not
tendered in the Exchange Offer and the Restructured Senior Secured
Notes that will be issued through the Exchange Offer, including:

                    Non-Tendering Existing   Restructured Sr.
Characteristic     Sr. Secured Notes        Secured Notes
--------------     ----------------------   ----------------
Payment Frequency     Quarterly             Monthly

Interest Rate         10-1/8%               Escalating from 6% at
per annum                                   closing of the
                                             Exchange Offer or the                                                              
                                             effectiveness of the
                                             Prepackaged Plan to
                                             10-1/8% commencing
                                             July 1, 2009

Maturity              2014                  2019, subject to                                                          
                                             potential shortening    
                                             of maturity through
                                             mandatory prepayments

Principal             
prepayment at         No                    Yes
closing

Opportunity for     
mandatory principal   No                    Yes
prepayments after
closing

Additional security   No                    Yes
through equity
pledge

Guarantee of          Yes, but the right    Yes
underlying cash       to the proceeds of                             
flow by Emcali        any draw will fall
                       below those of the
                       holders of
                       Restructured Senior
                       Secured Notes

Rated                 No                    Yes, expected from
                                             Fitch and/or
                                             Standard & Poor's

Luxembourg            No, such a listing    Yes, such a listing
Listing               is not to be          is expected to be
                       retained for          obtained for the
                       the Existing Senior   Restructured Senior
                       Secured Notes         Secured Notes

Benefits of
continuing
affirmative and
negative covenants    No                    Yes

Redemption            Yes                   No
premium

Holder receives       No, except through    Yes
releases on           the Prepackaged Plan
exchange

As of Aug. 11, 2005, there is a total of $144,080,024 in aggregate
principal amount of Existing Senior Secured Notes outstanding.  
Delivery of the Restructured Senior Secured Notes and payment to
tendering holders will be made promptly following the expiration
date and the satisfaction or waiver of all conditions to the
Exchange Offer.

                    The Prepackaged Plan

The Claims held by holders of its Existing Senior Secured Notes
constitute the only impaired class under the Prepackaged Plan.  
In the event that less than 94.5% of the aggregate outstanding
principal balance of the Existing Senior Secured Notes are
tendered in connection with the Exchange Offer, but if the
Prepackaged Plan is accepted by holders of at least 66% of the
aggregate principal amount of the Existing Senior Secured Notes
who vote and who represent at least 50% of the total number of
beneficial holders of the Existing Senior Secured Notes who vote,
the Company may commence a voluntary case under Chapter 11 of the
Bankruptcy Code for purposes of effectuating the restructuring
through the Prepackaged Plan.

The exchange offer and consent solicitation will expire at 5:00
p.m. on Sept. 9, 2005.

Deutsche Bank Trust Company Americas serves as the Indenture
Trustee for the Restructured Senior Secured Notes.

The Company and Emcali are parties to a 20-year power purchase
agreement pursuant to which the Company sold electric generating
capacity and energy to Emcali.  The Power Purchase Agreement has
been suspended pending the effectiveness of the exchange offer and
the issuance of notes payable by Emcali to TermoEmcali.  At such
time, the PPA is to be terminated.

Full-text copies of the Company's Offering Memorandum and  
Disclosure Statement and related documents are available at no
charge at its exchange agent's website at
http://www.bondcom.com/termoemcalior at these addresses:

        Bondholder Communications Group -- New York
        Attn:  Trina Caliveri
        30 Broad Street, 46th Floor
        New York, NY  10004
        Telephone:  (212) 809-2663
        Fax:  (212) 437-8727
        E-mail:   tcaliveri@bondcom.com
    
        Bondholder Communications Group -- London
        Attn:  Trina Caliveri
        3rd Floor, Prince Rupert House
        64 Queen Street
        London, EC4R 1AD
        Telephone:  +44 20 7236 0788
        Fax:  +44 20 7236 0779
        E-mail:  tcaliveri@bondcom.com

TermoEmcali Funding Corp. was formed to develop, construct, own
and operate a natural gas-fired electric power generation
facility, which is located near Cali, Colombia.  The Company is
owned by Leaseco, Cauca Valley Holdings Ltd., TermoEmcali Holdings
Ltd., Emcali E.I.C.E. E.S.P., and Inversiones Inca S.A.  Leaseco,
a Cayman Islands company, is owned and controlled by Cauca Valley
and Holdings, both of which are Cayman Islands companies.

                        *     *     *

As reported in the Troubled Company Reporter-Latin America on
July 28, 2005, Standard & Poor's 'D' rating on TermoEmcali Funding
Corp.'s US$165 million senior secured notes due 2014 reflects the
Colombian company's failure to make its September 2004 debt-
service payment.  Since then, the project-financed entity also
failed to make its debt-service payments through June 2005.

TermoEmcali operates a 234 MW combined-cycle, natural-gas-fired
power generation facility, and sells capacity and energy to
Empresas Municipales de Cali (Emcali), a Colombian municipal
utility that provides diversified services to two million
residents in and around Santiago de Cali.

TermoEmcali entered a 20-year purchased-power agreement (PPA)
with Emcali to provide capacity and energy, and eventually
transfer the facility to Emcali at no cost. However, after
Emcali defaulted on March 6, 2003, the PPA has not been honored.
As of June 2005, Emcali continues to fail to meet its financial
obligations due under the PPA for more than $85 million.

In November 2003, TermoEmcali and Emcali, the project's
offtaker, signed a memorandum of understanding (MOU) while
pursuing an orderly restructuring of the obligations under the
PPA. The MOU expired on June 2004, and although the parties
discussed extending it, Emcali indicated it would not continue
payments under the MOU until an energy-purchase agreement (EPA),
replacing the former PPA, is signed.

Despite the expiration of the MOU and Emcali's failure to
perform its obligations under the PPA, Emcali and TermoEmcali
continued to negotiate a restructuring of the PPA. On June 2005,
TermoEmcali reached agreement to restructure Emcali's
obligations to the project and settle certain disputes with
Emcali. The deadline to achieve the restructuring is May 17,
2006. In parallel with those negotiations, TermoEmcali and a
committee of restricted bondholders and other lenders have held
discussions about restructuring the financing documents on a
basis consistent with cash flows anticipated under a
restructured PPA. After the restructuring of the financing
documents is finalized Standard & Poor's Ratings Services will
reassess the transaction's credit rating.


TITAN CRUISE: Section 341(a) Meeting Slated for Sept. 9
-------------------------------------------------------          
The U.S. Trustee for Region 21 will convene a meeting of Titan
Cruise Lines and its debtor-affiliate's creditors at 1:30 p.m., on
Sept. 9, 2005, at Room 100-A, Timberlake Annex, 501 E. Polk
Street, Tampa, Florida.  This is the first meeting of creditors
required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases.

All creditors are invited, but not required, to attend.  This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.

Headquartered in 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.


TOWER AUTOMOTIVE: Court Approves Seagull Software Licensing Pact
----------------------------------------------------------------
Tower Automotive, Inc., is a party to several software licensing
agreements with Seagull Software Systems, Inc., pursuant to which
Tower uses and duplicates Seagull's proprietary software in
connection with Tower's business operations, subject to certain
limitations and restrictions.

A composite copy of the Seagull Agreements with related
documentation is available for free at:

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

The Seagull applications, according to Anup Sathy, Esq., at
Kirkland & Ellis LLP, in Chicago, Illinois, allow personnel in
the field to enter data into Tower's system via an interface as
opposed to requiring each user to sit at Tower's central terminal
and enter the data manually.  As a result, these applications
provide Tower's purchasing and receiving departments with a means
by which to obtain accurate reports as to Tower's entire
manufacturing process at any given time.

Seagull also provides Tower with certain critical maintenance and
training services related to the Seagull software applications.
These services include a hotline and 24-hour on-line trouble-
shooting service, in addition to technical support staff whom
Seagull will dispatch to Tower's location to train Tower
personnel and respond to inquiries and problems regarding
installation, general use, connectivity, and reproducible
problems that may arise with respect to the software.

The total estimated cost to Tower for continued maintenance
service under the Seagull Agreements is approximately $10,000 per
year.  No additional licensing fees are required.

The Debtors believe that their continued use of the Seagull
software is integral to their ongoing business operations.  
Tower's day-to-day inventory management process is dependent on
the Seagull software and its data entry applications.

Without the continued dedicated and prompt availability of
technical support, training and service from Seagull, Tower, Mr.
Sathy tells the Court, will be unable to properly utilize the
Seagull software, and further risks incurring significant
administrative costs to replace and install alternate software.

Upon Court approval of the Debtors' request, the Debtors will pay
Seagull $62,648, on account of all outstanding prepetition
amounts owing to Seagull by Tower.  The Cure Amount, Mr. Sathy
reports, arises from unpaid prepetition amounts owed to Seagull
pursuant to the Seagull Agreements for the Seagull software, and
related maintenance and advisory services.

Tower is not obligated to pay for any additional charge related
to re-installation of services under the Seagull Agreements.

Mr. Sathy informs the Court that the Official Committee of
Unsecured Creditors has reviewed the Seagull Agreements and has
raised no objection to the Debtors' assumption of the Seagull
Agreements and payment of the Cure Amount.

                        *    *    *

The U.S. Bankruptcy Court for the Southern District of New York
approved the Debtors' request to assume the software licensing
agreements with Seagull Software.

Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc.
-- http://www.towerautomotive.com/-- is a global designer and        
producer of vehicle structural components and assemblies used by  
every major automotive original equipment manufacturer, including  
BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan,  
Toyota, Volkswagen and Volvo.  Products include body structures  
and assemblies, lower vehicle frames and structures, chassis  
modules and systems, and suspension components.  The Company and  
25 of its debtor-affiliates filed voluntary chapter 11 petitions  
on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through
05-10601).  James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq.,
Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet,
Esq., at Kirkland & Ellis, LLP, represent the Debtors in their  
restructuring efforts.  When the Debtors filed for protection from
their creditors, they listed $787,948,000 in total assets and
$1,306,949,000 in total debts.  (Tower Automotive Bankruptcy News,
Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000)


TOYS R US: Fitch Junks $2 Billion Domestic Unsecured Bridge Loan
----------------------------------------------------------------
Fitch Ratings has assigned credit and recovery ratings to Toys 'R'
Us, Inc.'s new revolving credit facilities and bridge loans:

    -- $2 billion domestic secured revolver: credit rating of 'B'
       and recovery rating of 'R3';

    -- $350 million European multicurrency secured revolvers:
       credit rating of 'B' and recovery rating of 'R3';

    -- $1 billion European secured bridge facility: credit rating
       of 'B' and recovery rating of 'R3';

    -- $2 billion domestic unsecured bridge loan: credit rating of
       'CCC' and recovery rating of 'R6'.

The $2 billion domestic secured revolver is secured by TOY's North
American inventories and receivables while the company's European
revolvers and bridge facility are secured by the company's
European assets.

Additionally, Fitch affirms the existing ratings of TOY:

    -- IDR credit rating of 'B-';

    -- Senior unsecured notes: credit rating of 'CCC' and recovery
       rating of 'R6'.

The Rating Outlook is Negative.

For more information on the rating of TOY's senior unsecured
notes, see the press release dated July 22, 2005.  For more
information on recovery ratings, see Fitch's criteria report
'Retail and Apparel Recovery Ratings Guidelines,' dated Aug. 9,
2005, available on the Fitch web site at
http://www.fitchratings.com/


TRANSCOM ENHANCED: Court Approves $400,000 Additional DIP Loan
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas,
Dallas Division, gave its stamp of approval to Transcom Enhanced
Services, LLC's request to obtain an additional $400,000 fund from
First Capital Group of Texas III, LP, increasing its total
available post-petition line of credit to $1,250,000.

The Debtor says it needs access to the additional post-petition
financing to meet short-term cash obligations.  The additional
$400,000 will be used to pay ordinary course of business expenses.  
The new loan under the enlarged line of credit will accrue
interest at 10% annually.

The Debtor related that the proposed financing is necessary to
avoid immediate and irreparable harm to its estate.  The
additional funds will ensure that the Debtor's business will
continue as a going concern and will facilitate its proposed
reorganization.

First Capital, a private investment firm that provides equity
capital to companies throughout Texas and the Southwest, holds a
first priority lien on all of the Debtor's assets pursuant to a
$2,200,000 pre-petition loan agreement dated May 25, 2004.

First Capital also holds a minority equity interest in the Debtor
consisting of one-half of the outstanding voting preferred stock
of Transcom Holdings, Inc., Transcom Enhanced's parent company.
First Capital also holds warrants entitling it to purchase up to
17.5% of Transcom Holding's common stock if the pre-petition loan
is not paid on time.

Headquartered in Irving, Texas, Transcom Enhanced Services --
http://www.transcomus.com/-- specializes in the modification of
the form and content of telephone calls and other communications
to improve bandwidth efficiency, reduce costs and facilitate the
development and provision of advanced applications.  Established
in 2003, TES uses state-of-the-art technology and a secure,
privately managed packet-switched network to deliver cost-
effective custom voice-over-IP solutions and converged IP
applications to carriers and enterprise customers all over the
world.  The Company filed for chapter 11 protection on Feb. 18,
2005 (Bankr. N.D. Tex. Case No. 05-31929).  John Mark Chevallier,
Esq., at McGuire, Craddock & Strother represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it estimated between $1 million to $10 million in
total assets and debts.


TRANSMETA CORP: Audit Panel Taps Burr Pilger to Audit Financials
----------------------------------------------------------------
The Audit Committee of Transmeta Corporation's (NASDAQ: TMTA)
Board of Directors has selected Burr, Pilger & Mayer LLP as its
new independent registered public accounting firm.  BPM's
engagement will commence with the review of the Company's
financial results for the third quarter ending Sept. 30, 2005.

"We interviewed a number of highly qualified accounting firms, and
we believe that Burr, Pilger & Mayer, a regional firm based in San
Francisco, is a good fit for Transmeta," commented Mark R. Kent,
chief financial officer.  "BPM understands the specific and
complex requirements of technology companies like Transmeta, and
they will help us to ensure that we maintain the highest standards
of accuracy in our accounting, financial reporting and Sarbanes-
Oxley compliance."

Transmeta Corporation -- http://www.transmeta.com/-- develops and    
licenses innovative computing, microprocessor and semiconductor  
technologies and related intellectual property.  Founded in 1995,  
Transmeta first became known for designing, developing and selling  
its highly efficient x86-compatible software-based  
microprocessors, which deliver a balance of low power consumption,  
high performance, low cost and small size suited for diverse  
computing platforms.  The Company also develops advanced power  
management technologies for controlling leakage and increasing  
power efficiency in semiconductor and computing devices.   

                          *     *     *  

                      Going Concern Doubt  

"[T]he Company's recurring losses from operations raise  
substantial doubt about its ability to continue as a going  
concern," ERNST & YOUNG LLP says in its audit report dated  
March 25, 2005, addressed to the company's Board of Directors and  
Stockholders.  

At Dec. 31, 2004, the Company had $53.7 million in cash, cash  
equivalents and short-term investments compared to $120.8 million  
and $129.5 million at December 31, 2003 and December 31, 2002,  
respectively.  

The Company believes that its existing cash and cash equivalents  
and short-term investment balances and cash from operations would  
not be sufficient to fund its operations.  


UAL CORP: Court Extends Exclusive Plan Filing Period Until Nov. 1
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
further extended the period within which UAL Corporation and its
debtor-affiliates may:

   (a) file a plan to Nov. 1, 2005; and
   (b) solicit acceptances of the plan to Jan. 2, 2006.

The Hon. Eugene Wedoff said this would be the last extension that
he will grant for the Debtors "in the absence of compelling and
unforeseeable circumstances," the Associated Press reports.

The Official Committee of Unsecured Creditors supported the
Debtors' request.

The Debtors anticipate filing a Plan and Disclosure Statement in
early September 2005.

                United to Exit Bankruptcy in 2006

The Debtors expect to finalize a complete exit financing package
in the near future.  According to James J. Mazza, Jr., Esq., at
Kirkland & Ellis, in Chicago, Illinois, the Debtors were prepared
to file both a plan and disclosure statement on Aug. 2, 2005.

However, the Debtors agreed to delay the filings by approximately
one month at the request of the Creditors' Committee to allow it
more time to review and provide input on these documents.  The
Debtors continue to provide the Creditors' Committee with plan-
related materials for its comment and review.

There have also been numerous meetings and telephone conferences
with the Creditors' Committee and its professionals covering a
multitude of topics, including the Debtors' business plan, exit
financing, the plan of reorganization, BTO and BII savings
progress, revenue updates and near term outlooks, PDG
negotiations, and recent financial performance.

In conjunction with this process, Mr. Mazza says the Debtors, with
the Creditors' Committee's affirmative support, sought a 60-day
extension of their exclusivity periods.  Despite this request, the
Debtors are still targeting to emerge from Chapter 11 in late 2005
or early 2006.

Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the   
holding company for United Airlines -- the world's second largest
air carrier.  The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191).  James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts. (United Airlines
Bankruptcy News, Issue No. 98; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


UAL CORP: Four Banks Submit $3 Billion Exit Financing Proposals
---------------------------------------------------------------
UAL Corporation and its debtor-affiliates have made significant
strides in their restructuring efforts since July, including,
among other things:

   1.  finalizing their business plan;

   2.  executing comprehensive term sheets covering all but 14 of
       the aircraft controlled by the Public Debt Group, which
       coupled with other aircraft restructuring efforts, will
       result in the Debtors reducing their fleet costs by
       approximately $850 million annually; and

   3.  amending their Club DIP Facility to obtain the necessary
       financing to purchase Class A Certificates which will
       enable United to have a controlling position in the
       1997-1 EETC Transaction covering the 14 aircraft.

James J. Mazza, Jr., Esq., at Kirkland & Ellis, in Chicago,
Illinois, tells Judge Wedoff that resolution of the PDG aircraft
issues, including the 1997-1 EETC Transaction, will effectively
bring the Section 1110 process to a close, leaving exit financing
and the filing and confirmation of the Debtors' plan of
reorganization and disclosure statement as the remaining tasks on
the Debtors' path to emergence from Chapter 11.

              United Gets Pledges for $3-Bil Funding

Mr. Mazza relates that the Debtors went back to the same four
financial institutions -- Citibank, JPMorgan Chase & Co.,
Deutsche Bank and GE Commercial Finance -- who had earlier in the
year submitted preliminary exit financing proposals.  The Debtors
shared their updated business plan with the potential lenders.

The potential lenders performed their due diligence on the
business plan, and as a result of their thorough review, the
Debtors received fully underwritten commitments for all-debt exit
financing packages with competitive terms and conditions.  At the
same time, these commitments accommodate the Debtors' aggressive
timetable for exit.

While the Debtors asked the financial institutions for up to
$2,500,000,000 in exit financing, they received commitments for
up to $3,000,000,000 in all-debt financing, including funds
sufficient to refinance the 14 planes from the 1997-1 EETC
Transaction if the Debtors purchases the Class A Certificates.

"Now that United has received these exit financing commitments,
it is working with the lenders and the Creditors' Committee to
further improve the terms and conditions in these proposals," Mr.
Mazza relates.

Headquartered in Chicago, Illinois, UAL Corporation --
http://www.united.com/-- through United Air Lines, Inc., is the   
holding company for United Airlines -- the world's second largest
air carrier.  The Company filed for chapter 11 protection on
December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191).  James H.M.
Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,
and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they listed $24,190,000,000
in assets and $22,787,000,000 in debts. (United Airlines
Bankruptcy News, Issue No. 98; Bankruptcy Creditors' Service,
Inc., 215/945-7000)


UNISYS CORP: Decline in Profitability Spurs Moody's to Cut Ratings
------------------------------------------------------------------
Moody's Investors Service lowered the long-term credit ratings of
Unisys Corporation (Corporate Family Rating to Ba3 from Ba1) and
affirmed the SGL-3 short-term liquidity rating.  The rating action
concludes a review for possible downgrade initiated on
August 1, 2005.  The ratings outlook for the Corporate Family
Rating is stable.  However, the ratings outlook for the senior
unsecured notes and shelf registration is negative, reflecting the
possibility that the securities could be notched below the
Corporate Family Rating for effective subordination should the
company choose to renew its current $500 million senior unsecured
credit facility maturing May 2006 and future lenders require a
pledge of collateral security as a result of the rating action.

Ratings downgraded include:

   * Corporate Family rating (formerly Senior Implied rating) to
     Ba3 from Ba1

   * Senior unsecured rating to Ba3 from Ba1

   * Shelf registration for senior unsecured debt to (P)Ba3 from
     (P)Ba1,

   * Shelf registration for subordinated debt to (P)B1 from
     (P)Ba2, and

   * Shelf registration for preferred stock to (P)B2 from (P)Ba3.

The rating action reflects weakened credit protection measures
that result from sustained declines in the company's
profitability, as higher margin Technology segment revenue
continues to fall and the company addresses loss-generating
problem outsourcing contracts.  Low operating margins over the
past several quarters have pressured interest coverage ratios,
while free cash flow generation over the past few years has been
inconsistent due to varying profitability levels and increasing
capital expenditures relative to revenue.  The rating action also
considers the continuing challenges the company faces to improve
its competitive position in its Services and Technology segments
that will create sustainable revenue growth and profitability over
the intermediate term.  Moody's believes that the margin profile
of Unisys's current Services businesses limits the prospects for
offsetting contraction in operating income contribution from the
Technology segment, given continued fall off in Technology segment
revenue and high research and development costs.

Over the past several years, Technology segment revenue has
steadily declined, particularly in the company's high margin
legacy ClearPath large enterprise server business.  In 2004, the
Technology segment represented 19% of consolidated revenue (versus
31% in 2000), while contributing over 75% of total operating
income (prior to asset impairment and restructuring charges).   
Consolidated profitability has also been challenged by higher than
expected costs related to several large business process
outsourcing contracts within the Services segment, which the
company has been addressing over the past few quarters.  The
company is in the process of renegotiating terms of a major
underperforming outsourcing engagement, which if unsuccessful
could result in a write down of up to $235 million of related
outsourcing assets.  In addition, increases in pension expenses
have negatively impacted consolidated operating profits.

The stable CFR outlook reflects progress the company has made to
remediate problem outsourcing contracts, expected benefits of
prior restructuring efforts and ongoing investment in its
Technology segment that could improve longer term prospects.  The
stable CFR outlook also considers Moody's expectation that the
company should achieve its target of $50 million free cash flow
for 2005, and that it will look to refinance its $400 million
8-1/8% senior notes due June 2006.  The negative outlook for the
senior unsecured notes and shelf registration ratings reflects the
possibility that the securities could be notched below the
Corporate Family Rating for effective subordination should the
company choose to renew its current $500 million senior unsecured
credit facility maturing May 2006 and future lenders require a
pledge of collateral security as a result of the rating action.

The CFR rating outlook could experience upward pressure to the
extent the company is able to demonstrate moderate and sustainable
revenue growth and solid improvements in consolidated operating
margins, which are currently below 5% on a reported LTM basis.  
The ability to generate consistent reported free cash flow at
levels approximating 10% of reported debt could also lead to a
positive ratings momentum.  Alternatively, the CFR rating could
face downward pressure to the extent revenue declines in
Technology are not offset by profitable growth in Services, cash
flow generation attenuates, consolidated margin levels do not show
meaningful improvement or the company announces further material
charges from write downs or restructurings.

In the second quarter ended June 30, 2005, the company reported a
net loss of $27 million on revenue of $1.4 billion.  Pension
expense was $46 million.  As a result of declines in profits and
cash flow, interest coverage and leverage metrics have steadily
weakened over the past several quarters.  Based on Moody's
standard adjustments to $901 million of reported debt as of June
30, 2005, adjusted debt of $3.0 billion results in adjusted debt
to EBITDA leverage of 5.8 times (versus 2.5 times based on
reported figures).  Moody's adjustments to reported debt include
$844 million of pension, $1.1 billion present value of operating
lease adjustments and $217 million of accounts receivable
securitization outstanding.  Accordingly, adjusted free cash flow
to debt stood at -1.1% (versus -10.3% based on reported figures).   
Adjusted EBITDA of $518 million leads to adjusted EBITDA to
interest coverage of 2.5 times (versus 6.0 times based on reported
figures).  The company has a $500 million credit facility that
expires in May 2006.  As of June 30, 2005, there were no
borrowings under the facility.

Unisys, based in Blue Bell, Pennsylvania, is a worldwide provider
of IT services and technology hardware.  The company generated
$5.8 billion of revenue in 2004.


VENCOR INT'L: Case Summary & 15 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Vencor International Inc.
        aka Regal Apparel Group, Inc.
        1545 Newton Street
        Los Angeles, California 90021

Bankruptcy Case No.: 05-29524

Type of Business: The Debtor's subsidiary, Robeworks Inc.,
                  filed for chapter 11 protection on Aug. 24,
                  2005 (Bankr. C.D. Calif. Case No. 05-29275),
                  the Honorable Vincent P. Zurzolo presiding.  
                  Robeworks Inc.'s chapter 11 filing was reported
                  in the Troubled Company Reporter on Aug. 29,
                  2005.

Chapter 11 Petition Date: August 25, 2005

Court: Central District of California (Los Angeles)

Judge: Barry Russell

Debtor's Counsel: Robert B. Shanner, Esq.
                  Shanner & Shanner
                  3200 Fourth Avenue, Suite 203
                  San Diego, California 92103
                  Tel: (619) 232-3057

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 15 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
The McGrath Family Trust                              $3,348,492
[address not provided]

Judy Nagler                                           $2,133,778
[address not provided]

Norman Solomon                                        $1,800,000
929 East 2nd St., Ste. 101
Los Angeles, CA 90012

Star Insurance Co.                                    $1,139,888
[address not provided]

GLJ Holdings LLC              Loan                      $850,000
1611 W. Rosecrans Avenue
Gardena, CA 90249

MPI Ltd.                      Office rent               $250,000
11300 West Olympic Boulevard
Suite 770
Los Angeles, CA 90064

Gary Nathanson                                           $55,619

Hanjin International                                     $22,289

Multi Media Productions       Advertising                $14,900

Hutchinson & Bloodgood LLP    Professional fee           $12,928

The Job Shop                  Service contract           $10,550

Getz & Associates             Professional                $6,621

Magnum Fulfillment &          Service contract            $5,868
Logistics LLC

Quill Corporation             Trade debt                  $1,580

Tel-Us Call Center            Service contract              $726


WORLDCOM INC: Wants Court to Nix & Limit Parus Holding's Claims
---------------------------------------------------------------
WorldCom, Inc. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York to:

   (a) dismiss Parus Holding, Inc.'s statutory and tort based
       claims; and

   (b) limit Parus Holdings' recovery for breach of contract to
       $460,442.

Robert L. Driscoll, Esq., at Stinson Morrison Hecker, LLP, in
Kansas City, Missouri, relates that on November 20, 2000,
EffectNet, Inc., and EffectNet, LLC, entered into a Unified
Communications Services General Agreement with Intermedia
Communications, Inc.  Pursuant to the UC Contract, EffectNet
agreed to supply Intermedia with unified messaging, wholesale
communications and related services that Intermedia could resell
to its end user customers.

Parus Holdings, as successor-by-merger to EffectNet, asserted
claims alleging Intermedia's failure to perform its obligations
under the UC Contract and breach of the Contract:

   (1) Claim No. 11242, amending Claim No. 9291; and

   (2) Claim No. 11173, amending Claim No. 9293.

According to Mr. Driscoll, Parus Holdings alleged that:

   (1) Intermedia and WorldCom engaged in a civil conspiracy by
       "act[ing] in concert to breach the UC Contract . . . with
       the knowledge that a breach . . . would have a devastating
       impact on EffectNet;"

   (2) WorldCom tortiously interfered with Intermedia's UC
       Contract;

   (3) Intermedia and WorldCom made a conscious decision not to
       perform under the UC Contract so that WorldCom could offer
       its own competing similar products; and

   (4) Intermedia and WorldCom engaged in deceptive trade
       practices related to Intermedia's alleged breach of the
       UC Contract.

"Parus Holdings, through Claim Nos. 11242 and 11173, attempts to
transform a relatively straightforward breach of contract claim
into numerous torts claims," Mr. Driscoll contends.  "Such tort
claims, however, are barred by the parties' agreement prohibiting
recovery of damages from such claims and as a matter of law."

Mr. Driscoll argues that Parus Holdings' Claims fail as a matter
of law for these reasons:

   (1) The tort theories of civil conspiracy and tortious
       interference with contract fail because the alleged
       conspiratorial or interfering conduct was between a
       parent corporation, WorldCom, and its wholly owned
       subsidiary, Intermedia, a unified interest relationship
       that precludes the claims.

   (2) The claim for breach of an implied covenant of good faith
       and fair dealing fails because the UC Contract was an
       ordinary private commercial agreement between two business
       entities, whose contractual relationship did not embrace
       public interest, arise from a position of adhesion or
       involve fiduciary responsibilities.

   (3) The claim that WorldCom and Intermedia engaged in
       deceptive trade practice fails because neither WorldCom
       nor Intermedia sold any service or product to EffectNet.
       Moreover, EffectNet was not the target of any deceptive
       advertising.  Therefore, Parus Holdings cannot maintain an
       action under the Arizona Consumer Fraud Act.

Mr. Driscoll further notes that EffectNet terminated the UC
Contract on April 12, 2002.  Thus, damages for breach are limited
to the obligations that accrued prior to the date of the
termination.

Mr. Driscoll tells the Court that the amounts accrued prior to
April 12, 2002, include the adjusted amounts for three past due
invoices and the minimum commitment amount for March 2002.  The
minimum commitment provision of the contract obligated Intermedia
to deliver 10,000 subscribers per month starting December 18,
2001.  The reconciliation provision of the contract provided that
if Intermedia failed to deliver the minimum commitment for a
month, it must pay a reconciliation payment for the shortfall
"equal to the volume Shortfall multiplied by the base monthly
price applicable to the Intermedia UC Service per subscriber."

Mr. Driscoll relates that applying the basic rate, the accrued
amounts are:

   Billing Cycle            Adjustment              Damages
   -------------            ----------              -------
   December 2001      Unpaid invoice #1010         $115,271
                      adjusted to $11.45
                      for shortfall of 9,953

   January 2002       Unpaid invoice #1011          115,271
                      adjusted to $11.45
                      for shortfall of 9,953

   February 2002      Unpaid invoice #1018          115,401
                      adjusted to $11.45
                      for shortfall of 9,958

   March 2002         One month at $11.45           114,500
                      for 10,000                   --------

                      TOTAL                        $460,442
                                                   ========

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)


* Large Companies with Insolvent Balance Sheets
-----------------------------------------------  
                                Total  
                                Shareholders  Total     Working  
                                Equity        Assets    Capital  
Company                 Ticker  ($MM)          ($MM)     ($MM)  
-------                 ------  ------------  -------  --------  
Abraxas Petro           ABP         (43)         106       (5)
AFC Enterprises         AFCE        (44)         216       52
Alliance Imaging        AIQ         (52)         621       43
Amazon.com Inc.         AMZN        (64)       2,601      782
AMR Corp.               AMR        (615)      29,494   (2,230)
Atherogenics Inc.       AGIX        (76)         235      213
Biomarin Pharmac        BMRN       (110)         167       (4)
Blount International    BLT        (220)         446      126
CableVision System      CVC      (2,430)      10,111   (1,607)
CCC Information         CCCG       (107)          96       20
Centennial Comm         CYCL       (480)       1,447       59
Choice Hotels           CHH        (185)         283      (36)
Cincinnati Bell         CBB        (625)       1,891      (18)
Clorox Co.              CLX        (346)       3,756     (158)
Compass Minerals        CMP         (81)         667      129
Crown Media HL-A        CRWN        (34)       1,289     (130)
Delphi Corp.            DPH      (4,392)      16,511      256
Deluxe Corp             DLX        (124)       1,508     (276)
Denny's Corporation     DENN       (260)         494      (73)
Domino's Pizza          DPZ        (574)         420      (21)
Echostar Comm-A         DISH       (972)       7,281      269
Emeritus Corp.          ESC        (123)         720      (43)
Foster Wheeler          FWLT       (490)       2,012     (175)
Guilford Pharm          GLFD        (20)         136       60
Graftech International  GTI         (34)       1,006      264
I2 Technologies         ITWO       (153)         386      124
ICOS Corp               ICOS        (57)         243      160
IMAX Corp               IMAX        (38)         241       27
Intermune Inc.          ITMN         (7)         219      133
Investools Inc.         IED         (22)          56      (47)
Isis Pharm.             ISIS       (124)         147       46
Kulicke & Soffa         KLIC        (44)         365      182
Lodgenet Entertainment  LNET        (72)         275       15
Lucent Tech Inc.        LU          (70)      16,437    2,517
Maxxam Inc.             MXM        (681)       1,024      103
Maytag Corp.            MYG         (77)       3,019      398
McDermott Int'l         MDR        (140)       1,489      123
McMoran Exploration     MMR         (39)         377      135
Nexstar Broadc - A      NXST        (51)         684       27
Northwest Airline       NWAC     (3,563)      14,352   (1,392)
NPS Pharm Inc.          NPSP        (98)         310      215
ON Semiconductor        ONNN       (346)       1,132      270
Owens Corning           OWENQ    (8,225)       7,766    1,391
Primedia Inc.           PRM        (771)       1,506       16
Quality Distrib.        QLTY        (26)         380       18
Qwest Communication     Q        (2,663)      24,070    1,248
Revlon Inc. - A         REV      (1,102)         925       70
Riviera Holdings        RIV         (27)         216        5
Rural/Metro Corp.       RURL       (184)         221       18
SBA Comm. Corp.-A       SBAC        (50)         857       19
Sepracor Inc.           SEPR       (201)       1,175      717
St. John Knits Inc.     SJKI        (52)         213       80
Tivo Inc.               TIVO         (1)         151       48
US Unwired Inc.         UNWR        (76)         414       56
Vector Group Ltd.       VGR         (33)         527      173
Verifone Holding        PAY         (36)         248       48
Vertrue Inc.            VTRU        (50)         451      (81)
Weight Watchers         WTW         (36)         938     (266)
Worldspace Inc.-A       WRSP     (1,698)         592       47
WR Grace & Co.          GRA        (605)       3,423      811

                          *********

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
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affiliated with a TCR editor holds some position in the issuers'
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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
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of Delaware, contact Ken Troubh at Nationwide Research &
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                          *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published by  
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.

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                *** End of Transmission ***