TCR_Public/050915.mbx        T R O U B L E D   C O M P A N Y   R E P O R T E R

         Thursday, September 15, 2005, Vol. 9, No. 219

                          Headlines

A4S SECURITY: IPO Proceeds Wipe Out Shareholder Deficit
AAIPHARMA INC: Retains Chanin Capital as Valuation Expert
AAIPHARMA INC: Taps RSM McGladrey as Tax Consultant
ADELPHIA COMMS: Gets More Time to Evaluate Leases vis-a-vis Sale
ALASKA AIRLINES: Operations Chief George Bagley to Retire

ALLMERICA FINANCIAL: S&P Revises Watch Implications to Negative
ASHTON WOODS: Moody's Rates New $125 Million Sr. Sub. Notes at B3
ASSOCIATES MANUFACTURED: Fitch Holds Junk Rating on Class B Certs.
ATA AIRLINES: Gets Court Nod to Hire Crowe Chizek as Auditor
ATA AIRLINES: Court Approves Mikelsons Severance Agreement

AUXILIO INC: Net Loss & Deficit Trigger Going Concern Doubt
BALLY TOTAL: Amends Senior Note Indentures with U.S. Bank
BENJAMIN DAWN: Case Summary & 2 Largest Unsecured Creditors
BISYS GROUP: Lenders Extend Cure Period for Defaults to Nov. 15
BLUE BEAR: Section 341(a) Meeting Scheduled for Sept. 30

BLUE BEAR: Wants Sample & Bailey as Accountant
BLUE BEAR: Files Schedules of Assets and Liabilities
BRIDGEPORT HOLDINGS: Liquidating Trustee Wants to Extend Deadlines
BROOKSTONE COMPANY: Moody's Rates $190 Million Notes at B3
CATHOLIC CHURCH: Court OKs Tucson's Settlement with Republic Fire

CENVEO INC: S&P Says B+ Corporate Credit Rating Remains on Watch
CMBS ISSUER: Fitch Affirms BB+ Rating on C$3.7 million Certs.
COEUR D'ALENE: Australian Unit Buying Broken Hill Mine for $36-Mil
COMSYS IT: S&P Rates $150 Million Senior Unsecured Notes at B-
CONTINENTAL AIRLINES: Moody's Rates Class A Certificates at Ba2

CREDIT SUISSE: Fitch Affirms Low-B Rating on Five Cert. Classes
DELPHI CORP: Reiterates Need for Cost Cuts as October 17 Looms
DELTA AIR: Fitch Downgrades Issuer Default Rating to D
DELTA AIR: Files for Chapter 11 Protection in S.D. New York
DELTA AIR: Case Summary & 186 Largest Unsecured Creditors

DENNIS CONWELL: Case Summary & 13 Largest Unsecured Creditors
DERIVIUM CAPITAL: Wants to Hire Ruta & Soulios as Bankr. Counsel
DERIVIUM CAPITAL: U.S. Trustee Meeting With Creditors on Oct. 12
DEUTSCHE FINANCIAL: Fitch Pares Class M Certs. Seven Notches to B-
EAST 44TH: Can Use NYCB's Cash Collateral Until Sept. 30

ENRON CORP: Withdraws Request for PGE to Cancel Existing Stock
ENRON CORP: Wants Court to Okay Kirkland & Ellis Settlement Pact
EXCELLIGENCE LEARNING: Prepares to Restate Fiscal 2004 Financials
FEDERAL-MOGUL: Court OKs BofA's $1.12M Claim & Verizon Settlement
FIBERMARK INC: Alex Kwader Succeeds Duncan Middleton as President

FORD CREDIT: Credit Enhancement Prompts Fitch to Lift Ratings
FRUIT OF THE LOOM: FOL Trust Prepares to Make Final Distribution
HERTZ CORP: S&P Revises CreditWatch Implications to Negative
HIGH VOLTAGE: Robicon Settles Toshiba's Claims
HUDSON VALLEY: Case Summary & 20 Largest Unsecured Creditors

INTERSTATE BAKERIES: Can Walk Away From 9 Real Estate Leases
INTERSTATE HOTELS: Moody's Affirms B2 Corporate Family Rating
J. CREW GROUP: Earns $2 Million of Net Income in June 30
JERNBERG INDUSTRIES: Court Okays Carson Fischer as Co-Counsel
JERNBERG INDUSTRIES: Court Okays Jenner & Block as Lead Counsel

KAISER ALUMINUM: Will Pay USWA Experts' Fees Under Revised Pact
LOGAN INTERNATIONAL: Hires Christensen King as Accountants
MARK IV: S&P Affirms B+ Corporate Credit Rating & Other Ratings
MASON COOK: Case Summary & 20 Largest Unsecured Creditors
MILLENNIUM AMERICA: Noteholders Tender $281 Mil. of 7% Sr. Notes

MIRANT CORP: Wants to Sell Two HRS Generators to Belyea for $2 Mil
MIRANT CORP: Shareholder Insists Equity Holders Are In the Money
MORGAN STANLEY: Fitch Affirms Low-B Rating on Two Cert. Classes
NORTH AMERICAN: Wants Solicitation Period Stretched to Jan. 31
NETEXIT INC: Court Enters Oral Confirmation on Liquidating Plan

NORTHWEST AIRLINES: S&P Says Ratings Remain on Negative Watch
NORTHWEST AIRLINES: Moody's Downgrades Sr. Unsecured Rating to C
NORTHWEST AIRLINES: Files for Chapter 11 Protection in S.D.N.Y.
NORTHWEST AIRLINES: AMFA & IAM Comment on Airline's Ch. 11 Filing
NORTHWEST AIRLINES: Case Summary & 100 Largest Unsecured Creditors

NVE INC: Wants to Employ Parillo Russo as Accountant
NVE INC: Look for Bankruptcy Schedules by Sept. 24
NVE INC: Court Okays Murnane Brandt as Special Litigation Counsel
OMNI CAPITAL: Wants to Hire Foley Bryant as Bankruptcy Counsel
OWENS CORNING: Gets Court Nod to Pay $106 Million to Pension Plan

PBI MEDIA: S&P Rates $78 Million 2nd-Lien Term Loan at CCC+
PERRYVILLE ENERGY: Court Approves Amended Disclosure Statement
PERSISTENCE CAPITAL: Case Summary & 9 Largest Unsecured Creditors
PHARMACEUTICAL FORMULATIONS: Gets Court Nod to Tap Claims Agent
PIONEER NATURAL: Prices Tender Offer for 5.875% Senior Notes

POINT TO POINT: Court Okays AGS Capital as Management Consultant
QUESTOR PARTNERS: Closes $454 million GeoLogistics Sale
QUESTRON TECHNOLOGY: Court Approves Disclosure Statement
RELIANCE GROUP: RIC Liquidator's Second Quarter 2005 Status Report
RISK MANAGEMENT: Resolves License Dispute with Ontario Systems

RUFUS INC: Section 341(a) Meeting Slated for September 16
RUFUS INC: Wants to Walk Away from Nine Real Property Leases
RUFUS INC: U.S. Trustee Appoints 3-Member Creditors Committee
SCHOOL SPECIALTY: S&P Places $650 Million Notes' Ratings at CCC+
SEAFOOD SERVICES: Case Summary & 20 Largest Unsecured Creditors

SOLUTIA INC: Equity Panel Fights Monsanto Over Complaint Dismissal
SPECTRUM BRANDS: Moody's Affirms $1.05 Billion Notes' B3 Ratings
SPHERE DRAKE INSURANCE: U.K. Scheme of Arrangement is Effective
TFS ELECTRONIC: Committee Wants Jennings Strouss as Counsel
TRANSITION AUTO: June 30 Balance Sheet Upside-Down by $4.9 Million

TRUSTREET PROPERTIES: Fitch Holds Sr. Secured Debt Facility at BB+
UAL CORP: Wants Court Nod on Plan Confirmation-Related Schedule
UAL CORP: Asks Court to Okay Claims Resolution Schedule
UNISYS CORP: Increases Senior Debt Offering to $550 Million Total
US AIRWAYS: Creditors Approve Ch. 11 Plan, Hearing Begins Today

USG CORP: IRS Audit Results in $25-Mil Increase in 2005 Earnings
VENTIV HEALTH: S&P Rates Proposed $225 Million Debts at BB-
VIRAGEN INC: Ernst & Young Express Going Concern Doubt in 10-K
W.R. GRACE: Asbestos PD Panel Wants to Hire Speights as Counsel
WINN-DIXIE: Judge Funk Allows Old Dixie's $172,016 PACA Claims

WORLDCOM INC: Settles Dispute Over Discover Financial's Claims

* EPIQ Systems Buys Novare & Expanding Bankrupcy Service Offerings

                          *********

A4S SECURITY: IPO Proceeds Wipe Out Shareholder Deficit
-------------------------------------------------------
A4S Security, Inc. (NASDAQ SC and ArcaEx: Common Stock - SWAT;
Warrants - SWATW) delivered its quarterly report on Form 10-QSB
for the quarter ending June 30, 2005, to the Securities and
Exchange Commission on Sept. 1, 2005.

The Company reported a $853,640 net loss on $46,860 of net
revenues for the quarter ending June 30, 2005.  At June 30, 2005,
the Company's balance sheet shows $1,411,607 in total assets and a
$3,295,714 stockholders deficit.

                  Initial Public Offering

The Company's initial public offering was completed in July 2005,
after the end of the quarter being reported.  The Company's
balance sheet has been positively impacted by the IPO.  The
Company's cash position has increased on a net basis by over $6
million.  Working capital has gone from a deficit of $356,000 at
June 30, 2005, to positive working capital of over $7 million
following the IPO.

As a result of the IPO, stockholders' equity increased from a
deficit of $3.3 million as of June 30, 2005, to a positive
$7 million.

The filing of the Company's Form 10-QSB for the period ended June
30, 2005 is the first regular quarterly filing for A4S under the
Securities Exchange Act of 1934.

                     Going Concern Doubt

Citing operating losses and negative cash flow, the notes to the
Company's second quarter financial statements indicate there's
doubt about the company's ability to continue as a going concern.
A4S Security's auditors at GHP Horwath, P.C., in Denver, Colorado,
expressed similar doubts after reviewing the company's 2004
financial statements.

A full-text copy of the Company's second quarter regulatory filing
is available at no charge at http://ResearchArchives.com/t/s?181

A4S Security, Inc. -- http://www.shiftwatch.com-- develops and
markets the patent pending Shiftwatch(R) product line of mobile
digital video surveillance solutions for public transportation,
law enforcement and general security applications.  The Company's
full motion, high-resolution video system utilizes video streaming
technology and GPS camera synchronization capabilities to provide
agencies with data security and reliability.  The Company's open,
standards based architecture facilitates interoperability, eases
management of the growth of information and leverages customer
investment in the future.


AAIPHARMA INC: Retains Chanin Capital as Valuation Expert
---------------------------------------------------------
aaiPharma Inc. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware for authority to retain Chanin
Capital Partners, LLC, as their valuation expert.

The Debtors selected Chanin Capital as their valuation expert
because of the Firm's extensive experience with the valuation of
troubled companies.  Chanin Capital will analyze the Debtors'
businesses and produce a Valuation Report that will form the basis
for their plan of reorganization and disclosure statement.

In this engagement, Chanin Capital is expected to:

    a) undertake a study and analysis of the business, operations,
       and financial condition of the Debtors;

    b) provide the Debtors with a Valuation Report expressing the
       Firm's estimate of the value of the business and operations
       of the Debtors;

    c) present the valuation report to the Debtors' management and
       Board of Directors and be available to answer questions
       concerning the Valuation Report;

    d) prepare for and provide testimony to the Bankruptcy Court
       concerning the Valuation Report;

    e) prepare a valuation analysis based upon the Valuation
       Report to be included in the Debtors' chapter 11 plan and
       disclosure statement; and

    f) assist with other matters related to the Valuation Report,
       as requested by the Debtors.

Chanin Capital will receive a $50,000 initial payment from the
Debtors upon the Bankruptcy Court's approval of their retention.
The Debtors will pay the Firm an additional $200,000 after the
Valuation Report is completed and delivered.  Chanin Capital will
also receive a $50,000 fee for any deposition or live testimony it
will provide in connection with the Valuation Report.

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

Chanin Capital -- http://www.chanin.com/-- is comprised of more
than 50 dedicated professionals in London, Los Angeles, and New
York. Founded in 1984, Chanin has completed more than $146 billion
in financial recapitalization and restructuring transactions, and
has consummated more than $29 billion in mergers & acquisitions
transactions.

Headquartered in Wilmington, North Carolina, aaiPharma Inc.
-- http://aaipharma.com/-- provides product development services
to the pharmaceutical industry and sells pharmaceutical products
which primarily target pain management.  AAI operates two
divisions:  AAI Development Services and Pharmaceuticals Division.
The Company and eight of its debtor-affiliates filed for chapter
11 protection on May 10, 2005 (Bankr. D. Del. Case No. 05-11341).
Karen McKinley, Esq., and Mark D. Collins, Esq., at Richards,
Layton & Finger, P.A.; Jenn Hanson, Esq., and Gary L. Kaplan,
Esq., at Fried, Frank, Harris, Shriver & Jacobson LLP; and the
firm of Robinson, Bradshaw & Hinson, P.A., represent the Debtors
in their restructuring efforts.  When the Debtors filed for
bankruptcy, they reported consolidated assets amounting to
$323,323,000 and consolidated debts totaling $446,693,000.


AAIPHARMA INC: Taps RSM McGladrey as Tax Consultant
---------------------------------------------------
aaiPharma Inc. and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware for authority to employ RSM
McGladrey, Inc. as their tax consultant, nunc pro tunc to Sept. 1,
2005.

The Debtors chose RSM McGladrey as their tax consultant because of
the Firm's extensive experience in the tax-consulting field,
including the reorganization of troubled companies.

As previously reported in the Troubled Company Reporter, McGladrey
& Pullen LLP replaced Ernst & Young LLP as the Debtors'
independent auditors and accountants following Ernst & Young's
resignation in May 2005.  Prior to its resignation, E&Y expressed
substantial doubt about aaiPharma's ability to continue as a going
concern after auditing the Company's 2004 financials.

RSM McGladrey and McGladrey & Pullen follow an alternative
practice structure.  Although separate and independent legal
entities, the two firms work together to serve their clients
business needs.  The Debtors agree that RSM McGladrey may use
McGladrey & Pullen's employees in carrying out certain of its tax
consulting work.

In this engagement, RSM McGladrey will:

    a) research and analyze certain significant U.S. federal
       income tax issues with respect to the Debtors' bankruptcy
       cases including the treatment of cancellation of
       indebtedness income, tax attribute impact, Internal Revenue
       Code Section 382 analysis, asset basis and gain or loss
       analysis;

    b) research and analyze certain significant state and local
       income tax issues with respect to the bankruptcy cases;

    c) research and analyze certain significant international
       income tax issues with respect to the bankruptcy cases;

    d) perform income tax modeling and forecasting necessary to
       determine the calendar year 2005 and 2006 post emergence
       tax liabilities, including restructuring assistance;

    e) research and analyze the consequences of certain
       transactions and activities of the Debtor from January 1,
       2005 to the petition date; and

    f) provide other tax bankruptcy research, analysis and support
       as required by the Debtors.

RSM McGladrey will charge the Debtors based on these current
hourly rates for their professionals:

       Designation                                 Hourly Rate
       -----------                                 -----------
       International - Partner, Managing Director     $700
       National Tax -  Partner, Managing Director     $650
       Partner, Managing Director                     $550
       Director                                       $460
       Manager                                        $350
       Supervisor                                     $300
       Senior Associate                               $225
       Associate                                      $150
       Paraprofessional                               $100

The Debtors will also pay a $50,000 retainer to RSM McGladrey.

Keith T. Wallace, a managing director at RSM McGladrey, assures
the Bankruptcy Court that his Firm does not hold any interest
adverse to the Debtors and is a "disinterested person" as that
term is defined in section 101(14) of the Bankruptcy Code.

The RSM McGladrey group of companies --
http://www.rsmmcgladrey.com/-- consists of financially focused
business services providers that serve mid-sized companies with
tax and business consulting, retirement resource, employer
services, corporate finance, wealth management and financial
process outsourcing.  With 100 offices in the United States, RSM
McGladrey Inc. helps clients with global business needs through
its membership in RSM International, an affiliation of separate
and independent accounting and consulting firms.

Headquartered in Wilmington, North Carolina, aaiPharma Inc.
-- http://aaipharma.com/-- provides product development services
to the pharmaceutical industry and sells pharmaceutical products
which primarily target pain management.  AAI operates two
divisions:  AAI Development Services and Pharmaceuticals Division.
The Company and eight of its debtor-affiliates filed for chapter
11 protection on May 10, 2005 (Bankr. D. Del. Case No. 05-11341).
Karen McKinley, Esq., and Mark D. Collins, Esq., at Richards,
Layton & Finger, P.A.; Jenn Hanson, Esq., and Gary L. Kaplan,
Esq., at Fried, Frank, Harris, Shriver & Jacobson LLP; and the
firm of Robinson, Bradshaw & Hinson, P.A., represent the Debtors
in their restructuring efforts.  When the Debtors filed for
bankruptcy, they reported consolidated assets amounting to
$323,323,000 and consolidated debts totaling $446,693,000.


ADELPHIA COMMS: Gets More Time to Evaluate Leases vis-a-vis Sale
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extended Adelphia Communications Corporation and its debtor-
affiliates' time to assume and reject all unexpired nonresidential
real property leases through and including the date upon which the
Court enters an order confirming their Plan of Reorganization.

The extension will allow the ACOM Debtors to continue working with
Time Warner, Inc., and Comcast Corp. to analyze the Buyers' needs
for the various premises governed by the Unexpired Leases and
determine which of those will be needed after the sale is
completed.

Under the asset purchase agreements the ACOM Debtors entered into
with Time Warner and Comcast, the deadline for the Buyers to
decide on the leases is 50 days before the Confirmation Hearing.
The Debtors believe the extension is appropriate to enable the
Buyers to decide on the leases and, thus, enable the Debtors to
assume or reject the leases accordingly.

Headquartered in Coudersport, Pennsylvania, Adelphia
Communications Corporation (OTC: ADELQ) is the fifth-largest cable
television company in the country.  Adelphia serves customers in
30 states and Puerto Rico, and offers analog and digital video
services, high-speed Internet access and other advanced services
over its broadband networks.  The Company and its more than 200
affiliates filed for Chapter 11 protection in the Southern
District of New York on June 25, 2002.  Those cases are jointly
administered under case number 02-41729.  Willkie Farr & Gallagher
represents the ACOM Debtors.  (Adelphia Bankruptcy News, Issue
No. 105; Bankruptcy Creditors' Service, Inc., 215/945-7000)


ALASKA AIRLINES: Operations Chief George Bagley to Retire
---------------------------------------------------------
Alaska Air Group disclosed the retirement of George Bagley,
executive vice president of operations for Alaska Airlines,
effective at the end of 2005, after more than 16 years in
operating roles at both Alaska and Horizon Air and six years as
Horizon's president and chief executive officer.

"Since joining us in 1983, George has been instrumental in putting
both Horizon and Alaska on solid operational footing and
reinforcing the high standards of safety and customer service that
we are known for," said Bill Ayer, chairman and chief executive
officer of Alaska Air Group.  "His operating experience and track
record are admired across the industry, and his focus on important
operational issues has laid the groundwork for us to prosper in
the years ahead as we pursue opportunities for growth."

Mr. Bagley joined Horizon after serving as president of
Transwestern Airlines, a Logan, Utah-based regional carrier
acquired by Horizon in 1983.  He later became vice president of
flight operations at Horizon and then Alaska, returning to Horizon
as president and CEO in 1995.  Mr. Bagley assumed leadership of
Alaska's flight operations, maintenance and ground operations in
2002.

"George has played a critical role at Alaska in recent years, and
over the coming months, we will be looking at alternatives for
filling his position," Mr. Ayer said.  He noted a number of
factors contributing to Bagley's decision to retire, including the
approach of his 60th birthday, which Mr. Bagley will celebrate
Friday, and his desire to spend more time with his family and
pursue his interests in boating and golf.

Alaska Airlines and its sister carrier, Horizon Air, together
serve more than 80 cities in Alaska, the Lower 48, Canada and
Mexico.

Seattle-based Alaska Air Group is the parent company of Alaska
Airlines and Horizon Air Industries.  The company and its sister
carrier, Horizon Air, together serve 80 cities in Alaska, the
Lower 48, Canada and Mexico.

                         *     *     *

As reported in the Troubled Company Reporter on Apr. 25, 2005,
Standard & Poor's Ratings Services lowered its ratings on Alaska
Airlines Inc.'s 9.5% equipment trust certificates due April 12,
2012, to 'B+' from 'BB', as part of an industry wide review of
aircraft-backed debt.  All other ratings on Alaska Airlines and
parent Alaska Air Group Inc., including the 'BB-' corporate credit
ratings on both, are affirmed.  The outlook remains negative.

"The lower rating on the ETCs reflects Standard & Poor's concern
that repayment prospects for holders of aircraft-backed debt could
suffer in a potential scenario of multiple, further bankruptcies
of large U.S. airlines weakened by high fuel prices and intense
price competition," said Standard & Poor's credit analyst Betsy
Snyder.  "Downgrades of aircraft-backed debt securities were
focused on debt instruments that would be hurt in such a scenario,
particularly debt backed by aircraft that are concentrated heavily
with large U.S. airlines that would be at greater risk in
negotiated restructurings or sale of repossessed collateral," the
analyst continued.


ALLMERICA FINANCIAL: S&P Revises Watch Implications to Negative
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its CreditWatch
implications on two synthetic transactions related to Allmerica
Financial Corp.  The CreditWatch status of the ratings on
PreferredPLUS Trust Series ALL-1 and CorTS Trust For AFC Capital
Trust I are revised to negative from positive (see list).

These actions follow the September 9, 2005, revision of the
CreditWatch status of the rating assigned to AFC Capital Trust I's
(a wholly owned subsidiary of Allmerica Financial Corp.) preferred
stock to negative from positive.

The ratings on these swap-independent synthetic transactions are
weak-linked to the underlying collateral, the preferred stock
issued by AFC Capital Trust I.  The CreditWatch revisions reflect
the current credit quality of the underlying securities.

Creditwatch implications revised to negative.

PreferredPLUS Trust Series ALL-1 $48 million trust certificates
series ALL-1

                       Rating

                Class   To           From
                -----   --           ----
                A       B/Watch Neg  B/Watch Pos
                B       B/Watch Neg  B/Watch Pos

CorTS Trust For AFC Capital Trust I $36 million Allmerica
corporate-backed trust securities certificates  series 2001-19

                       Rating

                Class   To           From
                -----   --           ----
                A       B/Watch Neg  B/Watch Pos


ASHTON WOODS: Moody's Rates New $125 Million Sr. Sub. Notes at B3
-----------------------------------------------------------------
Moody's Investors Service assigned first-time ratings to Ashton
Woods USA L.L.C., including a B1 corporate family rating, a B3
rating on the proposed $125 million issue of senior subordinated
notes, and a Speculative Grade Liquidity rating of SGL-3.  The
ratings outlook is stable.

The stable ratings outlook is based on Moody's expectation that
the company will maintain debt/capitalization ratios in the 50%-
60% range even as it attempts to take advantage of growth
opportunities in new markets and as it fulfills the dividend
expectations of its Canadian owners.

The ratings reflect:

   * the company's relatively small size and scale;
   * limited geographic reach and product diversity;
   * risks associated with de novo expansion into new markets;
   * the financial expectations of its owners; and
   * the cyclical nature of the homebuilding industry.

At the same time, the ratings recognize that Ashton Woods scores
strongly on virtually all of the financial metrics outlined in the
Moody's Homebuilding Methodology dated December 2004, is located
in the some of the faster growing homebuilding markets in the
U.S., and is quite conservative with regard to its land supply and
speculative building practices.

The SGL-3 rating indicates adequate liquidity for the next 12
months, reflecting:

   * the company's satisfactory availability under its committed;
   * unsecured bank credit facility;
   * the absence of any material near-term debt maturities;
   * adequate to ample headroom under its financial covenants; and
   * strong credit protection measures.

The rating is constrained by the relatively heavy seasonal working
capital requirements of its homebuilding operations, which leave
the company with negative free cash flows.

These ratings were assigned:

   * B1 corporate family rating

   * B3 rating on $125 million of senior subordinated notes
     due 2015.

   * SGL-3 liquidity rating

All of Ashton Woods' debt, which includes borrowings under a $225
million, four-year revolver (unrated by Moody's), is guaranteed by
all of the company's material operating subsidiaries.

Begun in 1989, Ashton Woods conducts homebuilding operations in
five markets, with two additional markets recently started up.
Two of its markets, Atlanta and Phoenix, account for a substantial
portion of its profits.  This geographic concentration, plus the
company's relatively limited product and price point diversity as
well as its overall small relative size, make the company somewhat
more susceptible to a cyclical industry downturn than its much
larger competitors.

The company has identified a number of additional markets in which
it would ultimately like to build.  Again, given its relatively
small size, de novo expansion, which would include advance
purchases of land and other start-up costs, could have a short-
term effect on overall results, as the Orlando start-up in 2001
and the Phoenix start-up in 2002 did to 2002 and 2003 earnings.

Ashton Woods USA is owned by seven Canadian families, which elect
the entire board of directors and have other financial interests
and requirements that include related party transactions and right
to repatriation of up to half of the company's earnings through
dividends.  This potential dividend requirement will slow down the
build up of the company's equity base.

On the plus side, Ashton Woods' financial metrics are very strong
for the ratings assigned.  In fiscal 2005, which ended May 31,
2005, the company's EBIT coverage of interest of 14.7x, its return
on assets of 23.0%, and a debt/capitalization ratio of 46% far
exceeded the bounds of its assigned ratings.  Similarly, the
company's approximately four-year lot supply, roughly 75% owned,
and its conservative speculative building practices (less than 15%
spec) would map to a much higher ratings level.

The company's existing homebuilding divisions are located in five
of the top eight U.S. markets, as measured by 2004 single-family
permits.  The two recent start-ups, in the Tampa and Denver
markets, fall within the top 15.  These are markets with strong
fundamentals and favorable long-term growth prospects.

Pro forma for the offering of $125 million of new senior sub
notes, repayment of approximately $92 million of bank debt and $14
million of a related party note, total debt/capitalization as of
May 31, 2005 would be 50% and total debt/EBITDA as of the 12
months ended the same date would be approximately 1.9x, with both
metrics acceptable to strong for the ratings assigned.

Going forward, the ratings and outlook would be strengthened by:

   * a significant build-up in the equity base;
   * successful diversification into other markets; and
   * a permanent reduction in the company's debt leverage metric.

The ratings and outlook would be stressed by a misstep in the
company's expansion process and a significant increase in debt
leverage.  The SGL-3 liquidity rating would be adversely impacted
if the company were to make unusually large land purchases or to
bulk up its work-in-process inventory, thereby reducing its
available liquidity under its revolver.  The SGL-3 rating would be
bolstered if the company were to become strongly free cash flow
positive on a consistent annual basis and/or were to develop more
headroom in its tightest covenant.

Headquartered in Roswell, Georgia, Ashton Woods builds:

   * single-family detached homes,
   * townhomes, and
   * stacked-flat condominiums

with operations in five U.S. cities and with two more slated for
imminent start-up.

Revenues and pretax income for the fiscal year ending May 31, 2005
were approximately $500 million and $60 million, respectively.


ASSOCIATES MANUFACTURED: Fitch Holds Junk Rating on Class B Certs.
------------------------------------------------------------------
Fitch Ratings has reviewed four Associates Manufactured Housing
contracts and has taken these actions:

   Series 1996-1:

     --Class A-5 affirmed at 'AAA';
     --Class M affirmed at 'AA';
     --Class B-1 affirmed at 'AA+';
     --Class B-2 affirmed at 'AA+'.

   Series 1996-2:

     --Class A-5 affirmed at 'AAA';
     --Class M affirmed at 'AA';
     --Class B-1 affirmed at 'BBB';
     --Class B-2 remains at 'C'.

   Series 1997-1:

     --Classes A-7 affirmed at 'AAA';
     --Class M affirmed at 'AA';
     --Class B-1 affirmed at 'AA+';
     --Class B-2 affirmed at 'AA+'.

   Series 1997-2:

     --Class A-6 affirmed at 'AAA';
     --Class M affirmed at 'AA';
     --Class B-1 affirmed at 'AA+';
     --Class B-2 affirmed at 'AA+'.

The rating actions affect approximately $479.5 million in
outstanding principal.  The ratings on classes B-1 and B-2 on
series 1996-1, 1997-1, and 1997-2 are based upon a limited
guarantee from Associates First Capital Corporation, which
completed a merger with Citigroup Inc. in November of 2000.

Citigroup guarantees principal and interest payments to the
limited guarantee bondholders in the event cash flow from the
trust is insufficient to make all payments due.  The ratings on
the limited guarantee bonds reflect Fitch's corporate rating of
Citigroup of 'AA+'.

The guarantee classes may be reduced by applied liquidation loss
amounts in the event excess interest is insufficient to cover
realized losses.  Interest will accrue on the reduced guaranteed
class principal balance at its pass-through rate, and this amount
will be payable out of cash flow on the collateral.  Interest will
also accrue on the guaranteed class liquidation loss amount at the
same pass-through rate.

Accrued interest on the guaranteed class liquidation loss amount
will be paid on the following distribution date using guarantee
payments if cash flow from the collateral is insufficient.  The
liquidation loss amount will not get reimbursed to the guaranteed
class until the guaranteed class is entitled to receive principal
payments in the waterfall.

In addition to the limited guarantee, 1997-1 has the additional
benefit of a reserve fund.  The reserve fund provides cash to the
trust when available funds from the collateral are insufficient to
cover distributions due in each period.  In the event that this
reserve fund is completely depleted, any liquidated losses causing
a shortfall of interest on class B-1 and/or class B-2 will be
covered by the aforementioned limited guarantee.

Series 1996-2, which does not have the same limited guarantee as
series 1996-1, 1997-1, and 1997-2, benefits from a liquidity
account that covers interest payments on the applied cumulative
liquidated loss amounts on the subordinate classes and an
additional deposit that covers shortfalls to the trust's reserve
fund in an amount of up to $1.3 million.

The affirmations on the senior classes in these deals reflect
credit enhancement levels consistent with future loss
expectations.


ATA AIRLINES: Gets Court Nod to Hire Crowe Chizek as Auditor
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Indiana
approved the request of ATA Airlines, Inc. and its debtor-
affiliates to authorize Crowe Chizek and Company LLC to perform
auditing services to the Debtors effective April 19, 2005.

Terry E. Hall, Esq., at Baker & Daniels, in Indianapolis,
Indiana, relates that the Debtors have selected Crowe Chizek
because of its diverse experience and extensive knowledge in the
fields of plan administration, record keeping, compliance testing,
Form 5500 preparation, benefit plan auditing and general
consulting.  The Firm has considerable experience in collecting
and analyzing information with respect to benefit plans in
numerous Chapter 11 cases.

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


ATA AIRLINES: Court Approves Mikelsons Severance Agreement
----------------------------------------------------------
As reported in the Troubled Company Reporter on September 1, 2005,
the Air Line Pilots Association, the International Association of
Machinists and Aerospace Workers, AFL-CIO, and other parties
objected to the severance agreement between ATA Airlines, Inc.,
its debtor-affiliates and J. George Mikelsons.

Frederick W. Dennerline III, Esq., at Fillenwarth, Dennerline,
Groth & Towe, in Indianapolis, Indiana, representing the Unions,
argued that the Motion should be denied because:

  (1) implementation of the severance agreement would be
      detrimental to the morale of the hourly employees; and

  (2) the Debtors have failed to demonstrate that the Agreement
      is necessary.

Mr. Dennerline pointed out that before seeking approval of the
severance agreement, the Debtors sought permission from the U.S.
Bankruptcy Court for the Southern District of Indiana to reject
their collective bargaining agreement with ALPA under Section 1113
of the Bankruptcy Code.  "It is thus impossible for any crew
member or other employee to not be demoralized by the incongruity
between reducing crew members' compensation in 2006 by $43.2
million while at the same time awarding Mr. Mikelsons over $1
million."

The Severance Agreement should not be approved in any form, Mr.
Dennerline argued, saying the request is based on generalities of
"business judgment" which are inconsistent with the Debtors'
emphasized assurances in the Section 1113 Motion that they have
undertaken to "reduce costs in every area it can."

                            *    *    *

The Court rejected and overruled all objections and granted ATA's
Motion.

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


AUXILIO INC: Net Loss & Deficit Trigger Going Concern Doubt
-----------------------------------------------------------
Auxilio Inc.'s management expresses substantial doubt about its
ability to continue as a going concern, pointing to a $1,446,900
net loss for the six months ended June 30, 2005, and a $10,321,635
accumulated deficit.

The going concern statement was expressed in the Company's
Form 10QSB for the second quarter delivered to the Securities and
Exchange Commission on September 2, 2005, and echoes a similar
expression of doubt articulated in the company's first quarter
financial statements filed with the SEC on May 18, 2005.

Auditors at Stonefield Josephson, Inc., in Irvine, California,
completed their audit of Auxilio's 2004 financial statements on
April 1, 2005.  The auditors gave the company a clean opinion at
that time.  Auxilio's balance sheet showed an $8.8 million
accumulated deficit at Dec. 31, 2004, and the company reported
nearly $1 million in net income in 2004.

The company's June 30 balance sheet shows $6,633,115 in assets and
debts totaling $2,098,820.

A full-text copy of Auxilio's latest quarterly report is available
for free at http://ResearchArchives.com/t/s?183

Auxilio Inc. -- http://www.auxilioinc.com/-- provides integration
strategies and outsourced services for document image management
to healthcare facilities.  The Company manages the back-office
processes of hospitals and health systems.  Auxilio's target
market includes medium to large hospitals, health plans and health
care systems.  Auxilio's customer list includes health systems
such as St. Joseph's Health System, Memorial Health Services,
Catholic Healthcare West and Huntington Memorial Hospital.


BALLY TOTAL: Amends Senior Note Indentures with U.S. Bank
---------------------------------------------------------
Bally Total Fitness Holding Corporation entered into a
supplemental indenture with U.S. Bank National Association on
Sept. 2, 2005, as trustee, which amended the Indenture dated as of
July 2, 2003, as supplemented on July 22, 2003, among Bally, as
issuer, certain subsidiaries of Bally, as guarantors, and the
Trustee, which governs Bally's 10-1/2% Senior Notes due 2011.

Bally Total also entered into a supplemental indenture, which
amended the Indenture dated as of Dec. 16, 1998, between
Bally and the Trustee, which governs Bally's 9-7/8% Senior
Subordinated Notes due 2007.  The Senior Notes Supplemental
Indenture and Senior Subordinated Notes Supplemental Indenture are
collectively referred to herein as the "Supplemental Indentures".

The Supplemental Indentures were entered into in connection with
the successful completion of Bally's solicitation of consents
from holders of the Senior Notes and receipt of consents from
holders of a majority of the Senior Subordinated Notes to a
limited waiver of certain past Defaults or Event of Defaults
under the Indentures arising from the failure by Bally to file
certain information with the Securities and Exchange Commission,
and furnish such information to the holders of the Notes and the
Trustee.  In addition, the Supplemental Indentures amended the
Indentures to waive future compliance by Bally with Section 7.4
of each Indenture, which require Bally to file with the
Securities and Exchange Commission, and furnish to the holders
of Notes and the Trustee, reports required to be filed pursuant
to the Securities Exchange Act of 1934, as amended, until Nov. 30,
2005.

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

                      *     *     *

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

Moody's affirmed these ratings:

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

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

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

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

   * Corporate family rating, rated


BENJAMIN DAWN: Case Summary & 2 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Benjamin Bennett Dawn, Jr.
        aka B B Dawn, Jr.
        1693 Burnt Mill Road
        Flintstone, GA 30725

Bankruptcy Case No.: 05-43409

Chapter 11 Petition Date: September 13, 2005

Court: Northern District of Georgia (Rome)

Debtor's Counsel: Charles G. Wright, Jr., Esq.
                  253 East 11th Street
                  Chattanooga, Tennessee 37402-4225
                  Tel: (423) 266-7074
                  Fax: (423) 266-2320

Total Assets: $2,757,120

Total Debts:  $1,365,309

Debtor's 2 Largest Unsecured Creditors:

   Entity                                      Claim Amount
   ------                                      ------------
   American Express                                  $1,519
   P.O. box 650448
   Dallas, TX 75265-0448

   American Express                                  $1,030
   P.O. box 650448
   Dallas, TX 75265-0448


BISYS GROUP: Lenders Extend Cure Period for Defaults to Nov. 15
---------------------------------------------------------------
The BISYS Group, Inc., entered into a consent agreement with its
lenders on Sept. 13, 2005.  The Consent further extends to
Nov. 15, 2005:

   -- the cure periods for the default resulting from BISYS'
      failure to timely file its Form 10-Q for the fiscal quarter
      ended March 31, 2005, and deliver the related compliance
      certificate for such fiscal quarter; and

   -- the anticipated default resulting from its expected failure
      to timely file its Form 10-K for the fiscal year ended
      June 30, 2005.

In connection with the Consent, BISYS repaid $33.75 million under
the term loan portion of the Credit Facility, which reduces the
outstanding balance of the term loan to $60 million, and the
lender commitments under the revolving portion of the Credit
Facility have been permanently reduced from $300 million to
$150 million.

                     Financial Restatements

BISYS previously disclosed on July 25, 2005, that it is required
to restate its previously issued financial statements for the
years ended June 30, 2002, 2003, and 2004 and the interim
financial statements for the quarters ended March 31, 2004, and
Sept. 30 and Dec. 31, 2004 and 2003.  BISYS will not be in a
position to file the Form 10-Q for the quarter ended March 31,
2005 or its Form 10-K for the fiscal year ended June 30, 3005,
until the investigation being conducted by the Company's Audit
Committee and restatement are completed.

During the extended cure period, BISYS has agreed that it will not
request additional credit extensions under the Credit Facility.
BISYS believes that its operating cash flows and cash on hand will
be sufficient to support its near term working capital and other
cash requirements and that additional credit under the Credit
Facility will not be necessary through the extension date.

                     The Credit Agreement

THE BISYS GROUP, INC., is the Borrower under a $400,000,000 CREDIT
AGREEMENT dated as of March 31, 2004.  The Lending Syndicate at
the time that loan facility was put in place was comprised of:

     * THE BANK OF NEW YORK, individually, as Issuing Bank,
          as Swingline Lender and as Administrative Agent
     * FLEET NATIONAL BANK, individually and as
          Documentation Agent
     * JPMORGAN CHASE BANK, individually and as
          Documentation Agent
     * SUNTRUST BANK, individually and as Documentation Agent
     * WACHOVIA BANK, NATIONAL ASSOCIATION, individually and as
          Documentation Agent
     * KEYBANK NATIONAL ASSOCIATION
     * PNC BANK, NATIONAL ASSOCIATION
     * THE BANK OF NOVA SCOTIA
     * SCOTIABANC INC.
     * US BANK, N.A.
     * ALLIED IRISH BANKS, PLC
     * FIFTH THIRD BANK (CENTRAL OHIO)
     * UFJ BANK LIMITED
     * SUMITOMO MITSUI BANKING CORPORATION and
     * WELLS FARGO BANK, NATIONAL ASSOCIATION

Lawyers at Bryan Cave LLP represent the Lenders.

The BISYS Group, Inc. (NYSE: BSG) -- http://www.bisys.com/--  
provides outsourcing solutions that enable investment firms,
insurance companies, and banks to more efficiently serve their
customers, grow their businesses, and respond to evolving
regulatory requirements. Its Investment Services group provides
administration and distribution services for mutual funds, hedge
funds, private equity funds, retirement plans and other investment
products.  Through its Insurance Services group, BISYS is the
nation's largest independent wholesale distributor of life
insurance and a leading independent wholesale distributor of
commercial property/casualty insurance, long-term care,
disability, and annuity products.  BISYS' Information Services
group provides industry-leading information processing, imaging,
and back-office services to banks, insurance companies and
corporate clients. Headquartered in New York, BISYS generates more
than $1 billion in annual revenues worldwide.


BLUE BEAR: Section 341(a) Meeting Scheduled for Sept. 30
--------------------------------------------------------
The U.S. Trustee for Region 19 will convene a meeting of Blue Bear
Funding, LLC's creditors at 1:00 p.m., Sept. 30, 2005, at the U.S.
Custom House, 721 19th Street, Room 104, in Denver, Colorado.

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 Windsor, Colorado, Blue Bear Funding, LLC --
http://www.bluebearfunding.com/-- provides invoice factoring
services. The Company filed for chapter 11 protection on Aug. 22,
2005 (Bankr. D. Colo. Case No. 05-31300).  Alice A. White, Esq.,
and Douglas W. Jessop, Esq., at Jessop & Compnay, P.C., represent
the Debtor in its restructuring efforts.  When the Debtor filed
for protection from its creditors, it listed estimated assets of
$1 Million to $10 Million and estimated debts of $10 Million to
$50 Million.


BLUE BEAR: Wants Sample & Bailey as Accountant
----------------------------------------------
Blue Bear Funding, LLC asks the U.S. Bankruptcy Court for the
District of Colorado for permission to employ and retain Sample &
Bailey, CPAs, P.C. as its accountant.

The Debtor tells the Court that Sample Bailey has been its
accountant since May 5, 2005 and is familiar with its business and
financial history.

Sample Bailey will:

    (a) review financial books and records for the Debtor;

    (b) prepare financial statements, balance sheets and monthly
        U.S. Trustee reports; and

    (c) provide assistance in matters related to the preparation
        of tax returns, as needed.

Steve Collins, a partner at Sample Bailey, tells the Court that he
will bill $210 an hour for his services.  Mr. Collins also tells
the Court that general staff will bill between $74 to $150 per
hour.

Mr. Collins discloses that the Firm has received a total of $7,500
as prepetition retainer from the Debtor.  Mr. Collins also
discloses that the Firm provides income tax services on six
creditors of the Debtor:

    * Randall and Linda Beaver

    * John and Constance Boose

    * Tad Borrett (100% owner of Provision Factoring, LLC,
      another creditor)

    * R. Michael Dellenbach

    * William and Patricia Green; and

    * Jack and Susan Krueger.

Mr. Collins assures the Court that the Firm does not represent any
interest adverse to the creditors or the Debtor.

Headquartered in Windsor, Colorado, Blue Bear Funding, LLC --
http://www.bluebearfunding.com/-- provides invoice factoring
services. The Company filed for chapter 11 protection on Aug. 22,
2005 (Bankr. D. Colo. Case No. 05-31300).  Alice A. White, Esq.,
and Douglas W. Jessop, Esq., at Jessop & Compnay, P.C., represent
the Debtor in its restructuring efforts.  When the Debtor filed
for protection from its creditors, it listed estimated assets of
$1 Million to $10 Million and estimated debts of $10 Million to
$50 Million.


BLUE BEAR: Files Schedules of Assets and Liabilities
----------------------------------------------------
Blue Bear Funding, LLC, delivered its Schedules of Assets and
Liabilities to the U.S. Bankruptcy Court for the District of
Colorado disclosing:

      Name of Schedule               Assets        Liabilities
      ----------------               ------        -----------
   A. Real Property
   B. Personal Property             $6,240,287
   C. Property Claimed
      As Exempt
   D. Creditor Holding
      Secured Claim
   E. Creditors Holding Unsecured                      $11,408
      Priority Claims
   F. Creditors Holding Unsecured                  $20,752,804
      Nonpriority Claims
   G. Executory Contracts and
      Unexpired Leases
   H. Codebtors
   I. Current Income of
      Individual Debtor(s)
   J. Current Expenditures of
      Individual Debtor(s)
                                   -----------     -----------
      Total                         $6,240,287     $20,764,212


Headquartered in Windsor, Colorado, Blue Bear Funding, LLC --
http://www.bluebearfunding.com/-- provides invoice factoring
services. The Company filed for chapter 11 protection on Aug. 22,
2005 (Bankr. D. Colo. Case No. 05-31300).  Alice A. White, Esq.,
and Douglas W. Jessop, Esq., at Jessop & Compnay, P.C., represent
the Debtor in its restructuring efforts.  When the Debtor filed
for protection from its creditors, it listed estimated assets of
$1 Million to $10 Million and estimated debts of $10 Million to
$50 Million.


BRIDGEPORT HOLDINGS: Liquidating Trustee Wants to Extend Deadlines
------------------------------------------------------------------
Keith F. Cooper, the Liquidating Trustee for Bridgeport Holdings
Inc. and its debtor-affiliates, asks the U.S. Bankruptcy Court for
the District of Delaware to extend the fact discovery and expert
discovery deadlines in these adversary proceedings:

   Defendant                           Adversary Proceeding No.
   ---------                           ------------------------
   The Douglas Stewart Company                 05-50704
   GTSI Corporation                            05-50705
   Computer Design & Integration, LLC          05-50706
   Promark Technology, Inc.                    05-50707
   Nextiraone, LLC                             05-70708
   Metro Business Systems, Inc.                05-50709
   Health Net                                  05-50710
   Bax Global No.                              05-50711
   Crystal Decisions                           05-50712
   Envision Peripherals, Inc.                  05-50713
   Gateway, Inc., and Emachines, Inc.          05-50786

The Liquidating Trustee and the Defendants are amenable to the
extension of the discovery deadlines:

   -- Oct. 31, 2005, for the fact discovery deadline, and
   -- Dec. 31, 2005, for the expert discovery deadline.

Daniel B. Butz, Esq., at Morris, Nichols, Arsht & Tunnel in
Wilmington, Delaware tells the Court that the extension will
enable the parties to settle these cases and conduct mediation
without using unnecessary resources on additional discovery.

The mediation of these cases is tentatively scheduled for
Sept. 26, 2005, with Daniel J. DeFranceschi, Esq.

Headquartered in Norwalk, Connecticut, Bridgeport Holdings, Inc.
and its debtor-affiliates filed for chapter 11 protection on
September 10, 2003 (Bankr. Del. Case No. 03-12825).  Brendan
Linehan Shannon, Esq., and Matthew Barry Lunn, Esq., at Young,
Conaway, Stargatt & Taylor, represent the Debtors.  When the
Debtors filed for protection from their creditors, they listed
estimated assets and debts of more than $100 million.  William H.
Sudell, Jr., Esq., and Daniel B. Butz, Esq., at Morris, Nichols,
Arsht & Tunnell in Wilmington, Delaware, and S. Margie Venus,
Esq., Matthew S. Okin, Esq., and Jeffrey M. Anapolsky, Esq., at
Akin Gump Strauss Hauer & Feld LLP in Houston, Texas, represent
Keith Cooper, as Liquidating Trustee for the Bridgeport Holdings,
Inc., Liquidating Trust.


BROOKSTONE COMPANY: Moody's Rates $190 Million Notes at B3
----------------------------------------------------------
Moody's Investors Service assigned first time ratings to
Brookstone Company Inc.  The ratings are being assigned in
connection with the proposed acquisition of Brookstone by a
consortium of investors.

These ratings are assigned:

   * Corporate family rating at B3

   * $190 Million of senior unsecured guaranteed notes due 2012
     at B3

   * Speculative Grade Liquidity Rating at SGL-3

The outlook is stable.

On April 15, 2005, OSIM International, J.W. Childs, and Temasek
signed a definitive merger agreement to acquire Brookstone.  The
revised consideration of $20 per share equates to an enterprise
value of approximately $417.0 million and will be financed with:

   * $26.6 million of balance sheet cash,

   * $190 million of proposed senior notes, and

   * $249 million of preferred and common equity invested by the
     consortium and management.

The ratings reflect:

   * the company's solid brand name;

   * its innovative product development track-record of unique
     proprietary branded products;

   * its multi-channel format; and

   * its experienced management team.

The ratings are constrained by:

   * the amount of proposed funded leverage at close;

   * the terms of the preferred stock to which Moody's attributes
     significant debt like characteristics, thus further
     increasing the overall level of leverage;

   * the company's recent weak operating performance; and

   * its ongoing dependence on new product launches to
     support sales.

Moody's has classified the $125 million of preferred stock as
basket B as discussed in Moody's rating methodology dated February
2005 called "Refinements to Moody's Tool Kit".  In addition, the
ratings are restrained by:

   * the company's small scale;
   * high seasonality;
   * specialty niche; and
   * the discretionary nature of its product offerings.

Moody's estimates that pro-forma for the transaction,
Debt/EBITDA(as adjusted by Moody's for operating leases and 75% of
the preferred stock) was approximately 6.6x for the LTM period
ended April 30, 2005.

The stable outlook reflects the company's adequate liquidity and
Moody's expectation that there will no reduction in funded debt
over the next twelve to eighteen months.  A positive outlook could
be assigned should operating performance improve causing
Debt/EBITDA (as adjusted by Moody's for operating leases and 75%
of the preferred stock) to be sustained below 6.25x.  Ratings
could move downward should operating performance deteriorate
resulting in the operating margin falling below 6% or Debt/EBITDA
(as adjusted by Moody's for operating leases and 75% of the
preferred stock) rising above 7.25x.  In addition ratings could
move downward should the company borrow to fund dividends or share
repurchases.

The proposed senior unsecured notes would be rated at the
corporate family rating reflecting:

   * the enterprise value multiple that would be required to fully
     cover the notes;

   * the notes size and scale relative to the total capital
     structure; and

   * the expected guarantees by all domestic subsidiaries and its
     parent, Brookstone Inc.

The speculative grade liquidity rating of SGL-3 represents
adequate liquidity.  The company's internally generated cash flow
combined with normal seasonal borrowings under the revolver will
be sufficient to fund its working capital and capital expenditures
requirements for the next four quarters.  The company has in place
a $100 million secured asset based revolving credit facility which
is not rated by Moody's but is expected to be used only for
seasonal borrowings and letters of credit.  The credit agreement
is subject to one financial covenant, a fixed charge coverage
ratio, which will only be in effect when availability combined
with the company's cash balance falls below $20 million.

Brookstone, headquartered in Merrimack, New Hampshire, is a
nationwide specialty retailer that operates approximately 290
stores, two catalogues, and website under the brand names:

   * Brookstone,
   * Hard-to-Find Tools, and
   * Gardener's Eden.

Revenues for the period ended January 29, 2005 were approximately
$499 million.


CATHOLIC CHURCH: Court OKs Tucson's Settlement with Republic Fire
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona approved the
Diocese of Tucson's Settlement Agreement and Release with Old
Republic Fire Insurance Company.

As reported in the Troubled Company Reporter on August 3, 2005,
the Diocese and Old Republic entered into a settlement agreement
and release in resolution of their disputes.

The salient terms of the Agreement are:

   (a) The Diocese and the Other Releasing Parties will sell the
       Policy to Old Republic for $550,000;

   (b) The Diocese and the Other Releasing Parties will provide a
       full release to Old Republic with respect to and in
       connection with the Old Republic Policy, including any
       other unknown insurance policies issued by Old Republic
       under which the Estate may have insurance coverage.  The
       release represents fair consideration for the purchase
       price paid by Old Republic to buy back the Policy in view
       of the various disputes between the parties, and in no way
       constitutes an annulment of the Policies within the
       meaning of A.R.S. Section 20-1123; and

   (c) Old Republic will provide full releases to the Diocese and
       the Other Releasing Parties with respect to and in
       connection with any claims in connection with the
       Policy.

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. 41
Bankruptcy Creditors' Service, Inc., 215/945-7000)


CENVEO INC: S&P Says B+ Corporate Credit Rating Remains on Watch
----------------------------------------------------------------
Standard & Poor's Ratings Services' ratings on Cenveo Inc.,
including its 'B+' corporate credit rating, remain on CreditWatch
with negative implications following the company's announcement it
had reached an agreement with Burton Capital Management LLC and
Goodwood Inc. to end their proxy contest.  The Englewood,
Colorado-based commercial printer had more than $850 million in
lease-adjusted debt outstanding as of June 2005.

Pursuant to the agreement, Cenveo also announced the company had
approved a new board of directors, replaced its CEO, and cancelled
the special meeting of shareholders scheduled for September 14,
2005.  With the approval of the successor members of the board,
Cenveo said the agreement would not constitute a change of control
for purposes of the company's debt agreements, which could have
given bondholders the ability to exercise put rights.  Standard &
Poor's will review its ratings on Cenveo after evaluating the
company's operating and financial strategies in light of the
changes in the board and management.


CMBS ISSUER: Fitch Affirms BB+ Rating on C$3.7 million Certs.
-------------------------------------------------------------
Fitch Ratings affirms N-45 First CMBS Issuer Corporation, series
2003-3:

     --C$105.9 million class A-1 at 'AAA';
     --C$228.5 million class A-2 at 'AAA';
     --Interest only class IO at 'AAA';
     --C$47.6 million class B at 'AA';
     --C$31.4 million class C at 'A';
     --C$31.4 million class D at 'BBB-';
     --C$3.7 million class E at 'BB+'.

The affirmations are attributed to the relatively stable
performance of the transaction.  Since issuance, the deal has paid
down 3% to its current balance of C$448.6 million as of the August
2005 remittance period.  The weighted average debt service
coverage ratio has improved to 1.53 times (x) as compared to 1.38x
at issuance due primarily to slightly improved performance at each
of the properties combined with scheduled amortization.  Going
forward, if performance continues to improve, the senior classes
will likely be upgraded.

The Place Bell loan is the largest in the transaction at 34.7% of
the balance.  Located in Ottawa, Canada, the loan is secured by a
989,802-square foot class A office building built in 1971 and
renovated in the late 1990s.  The Place Bell loan is full recourse
to the sponsor.  Place Bell is over 99% occupied with Bell Canada
(rated 'A+' by Fitch), the largest tenant, at 48% of the net
rentable area, on a long-term lease until 2022.  Fitch's stressed
DSCR after giving credit for amortization, based upon year-end
2004 operating figures adjusted for vacancy, expenses, and capital
expenditures is 1.44x as compared to 1.36x at issuance.

Fifth Avenue Place, the second-largest loan in the transaction at
34.3%, is secured by two 34-story office towers totaling 1.5
million square feet in downtown Calgary.  Approximately 48,000 sf
of the properties consists of retail and storage space.  The
tenant base is concentrated in the oil and gas industry, such as
Devon Estates (38%), which is owned by Imperial Oil Limited,
Anadarko Canada (16.7%) (rated 'BBB+' by Fitch), and Enbridge,
Inc. (11%).  Occupancy remains very strong at 99.6% as of June
2005.

Fitch's stressed DSCR after giving credit for amortization, based
upon YE 2004 operating figures adjusted for vacancy, expenses, and
capital expenditures is 1.78x as compared to 1.49x at issuance.
The improvement in performance is attributed to scheduled
amortization and improved revenues at the property due mainly to
rent bumps that have occurred since issuance.

The final loan in the transaction is the Tour Bell loan at 30.8%
of the pool.  The Tour Bell loan is secured by two, 28-story
office towers located in Montreal containing 975,661 sf of office
space and 40,227 sf of connected underground retail space along
with a 693-space parking facility.  Of the retail space and
parking, 79.2% and 63.0%, respectively, serve as collateral for
the loan.

The Tour Bell building houses Bell Canada's Canadian headquarters
while the other tower is primarily occupied by National Bank of
Canada's headquarters.  As anticipated at issuance, Bell Canada
exercised early termination rights on two portions of its space,
known as Block A and Block B, totaling 307,258 sf (33.2% NRA).
The borrower has been successful at re-leasing approximately
172,000 sf of this space, but the property is currently 14.5%
vacant.

While there are no current leasing prospects at this time, the
property remains one of the superior office buildings in the
Montreal market and has in place rents that are approximately 13%
below current market levels.  While Fitch factored in the
potential increase in vacancy at issuance, it will continue to
follow the leasing activity at the property closely.  Fitch's
stressed DSCR after giving credit for amortization, based upon YE
2004 operating figures adjusted for various operating expenses and
capital expenditures is 1.35x as compared to 1.29 x at issuance.


COEUR D'ALENE: Australian Unit Buying Broken Hill Mine for $36-Mil
------------------------------------------------------------------
Coeur d'Alene Mines Corporation's (NYSE:CDE, TSX:CDM) wholly owned
Australian subsidiary has agreed to acquire the silver reserves
and production at the Broken Hill Mine in Australia, which is
owned and operated by Perilya Broken Hill Limited, a wholly owned
subsidiary of Perilya Limited (ASX:PEM).

Coeur will pay Perilya US$36 million in cash under the terms of
the transaction.  The company will finance the consideration with
what it deems to be the most attractive alternative, which may
include available cash, capital raised through the issuance of
additional securities, or some combination of the two.
The transaction is expected to provide Coeur with an additional
2.3 million ounces of average annual silver production at an
estimated cash cost of approximately US$2.75 per ounce and
15.0 million ounces of silver contained in proven and probable
reserves.  This addition to Coeur's silver production profile
represents a 17 percent increase in its currently expected 2005
production of 13.5 million ounces of silver.  In combination
with Coeur's recently completed acquisition of silver production
from the Endeavor mine, the Perilya transaction also serves to
increase Coeur's estimated annual silver production in Australia
to 3.6 million ounces.

"We are excited about this transaction for a number of reasons,"
said Dennis Wheeler, Coeur's Chairman, President, and Chief
Executive Officer.  "First and foremost, we expect it will be
accretive to the company's per-share financial and operating
results including cash flow per share, earnings per share,
production per share, and reserves per share.  In addition, the
transaction represents another key step in the ongoing
transformation of Coeur's asset base to lower-cost, longer life
silver assets that generate substantial cash flow for the company.
This transaction, along with our other growth initiatives, will
enhance our position as the world's leading primary silver
producer. Further - and as was the case with our Endeavor
transaction - we do not assume operational responsibility for the
mine.  That responsibility remains with the top-quality management
team at Perilya, leaving our staff free to continue focusing on
our current operations and growth opportunities."

Located in New South Wales, Australia, the Broken Hill Mine
is a zinc/lead/silver ore body that has produced approximately
500 million ounces of silver since its beginnings in 1885, making
it one of the most prolific silver producing regions in the world.
The transaction is capped at approximately 24.5 million contained
ounces (or 17.2 million payable ounces) of silver to be mined by
Perilya at Broken Hill on Coeur's behalf, providing Coeur with
approximately 10 million ounces of upside to the reserve base at
Broken Hill, representing a 63 percent increase over the current
silver reserve levels at the mine.

Categories of mineral reserves and resources are per Canadian
National Instrument 43-101.  Mineral reserves and resources are
effective March 31, 2005.  Mineral reserves based on a combined
cut-off grade of 7% lead plus zinc.  Silver content of the mineral
reserves and resources is tabulated as a by-product.  Mineral
reserves are not materially affected by any known environmental,
permitting, legal, title, taxation, socio-political, marketing, or
other relevant issues.  Mineral resources are in addition to
reserves.

Donald J. Birak, Coeur's Senior Vice President of Exploration, and
Donald Earnest, P.Geo., an Independent Consultant to Coeur, are
the qualified persons, per Canadian National Instrument 43-101,
responsible for preparation of the scientific and technical
information in this press release.  Mr. Birak and Mr. Earnest have
reviewed the available data and procedures and believe the
calculation of reserves and resources was conducted in a
professional and competent manner.

Coeur d'Alene Mines Corporation is the world's largest primary
silver producer, as well as a significant, low-cost producer of
gold. The Company has mining interests in Nevada, Idaho, Alaska,
Argentina, Chile, Bolivia and Australia.

                         *     *     *

As reported in the Troubled Company Reporter on Oct. 4, 2004,
Standard & Poor's Ratings Services affirmed its 'B-' corporate
credit and senior unsecured debt ratings on Coeur D'Alene Mines
Corporation and removed the ratings from CreditWatch, where they
were placed on June 1, 2004, with positive implications.  S&P said
the outlook is stable.  Coeur D'Alene, an Idaho-based silver and
gold mining company, currently has about $180 million in debt.


COMSYS IT: S&P Rates $150 Million Senior Unsecured Notes at B-
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to COMSYS IT Partners Inc. and its 'B-' rating to
the company's privately placed, Rule 144A $150 million senior
unsecured notes due 2013.  The outlook is negative.

Houston, Texas-based COMSYS specializes in IT staffing services,
with 41 offices in 26 states.  At July 3, 2005, COMSYS had pro
forma debt of $151 million and $25 million of preferred stock.

"The ratings reflect the potential challenges associated with
the ongoing integration of the company's acquisition of Venturi
Partners Inc., and COMSYS' still small size in the competitive and
cyclical $17 billion domestic IT staffing market," said Standard &
Poor's credit analyst Hal F. Diamond.  Competitor Venturi Partners
was acquired in September 2004.

These factors are partly offset by COMSYS' management's track
record of coping with difficult industry conditions.  The company
also maintains a fairly diverse customer base and many long-
standing client relationships.

Pricing pressures in the fragmented IT staffing industry have been
exacerbated by globalized purchasing at large corporations and the
increasing competition from both onshore and offshore IT
outsourcing providers.  Pro forma revenues increased 2.5% in the
second quarter of 2005, and EBITDA declined 10% because of
increases in state unemployment taxes and health care expenses.
COMSYS is relying partially on the continued fast growth of its
higher margin Vendor Management Services division to fuel
profitability.

The 'B-' rating on the senior unsecured notes reflects their
subordination to potential borrowings on the company's $100
million senior secured revolving credit facility.  Although the
revolving credit facility is expected to be undrawn at closing,
Standard & Poor's has assumed that part of the facility could be
drawn to fund general corporate purposes, creating a priority
liability.

The notes will be used to refinance the company's indebtedness,
which had already been refinanced in 2004 as part of the Venturi
acquisition.  The company's high-cost 15% $25 million pay-in-kind
preferred stock will remain in place, with its maturity extended
to 2014, one year beyond that of the notes.


CONTINENTAL AIRLINES: Moody's Rates Class A Certificates at Ba2
---------------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to the proposed
Series 2005-ERJ1 Class A Pass Through Certificates of Continental
Airlines, Inc. and affirmed Continental's long term debt ratings
(corporate family rating at B3).  The rating outlook is negative.

Proceeds from the sale of the Certificates will be used to
purchase equipment notes which will be issued to finance a portion
of the purchase price of 24 Embraer ERJ-145XR aircraft.  All but
four aircraft have been delivered to Continental, with the
remaining four scheduled for delivery before the end of 2005.
Proceeds from the issuance of the Certificates to finance the
aircraft not yet delivered to Continental will be held in escrow
until deliveries occur.

The Notes issued as part of the underlying leveraged lease
transactions to finance the aircraft are not obligations of, nor
are they guaranteed by Continental.  However, the aircraft have
been or will be leased to Continental and the rentals payable by
Continental will be sufficient to pay in full all principal and
interest on the Notes when due.  The Notes will be secured by a
perfected security interest in the aircraft and by an assignment
of the leases relating thereto.  It is the opinion of counsel to
Continental that the Notes will be entitled to benefits under
section 1110 of the U.S. Bankruptcy Code.

Interest on the Certificates will be supported by a liquidity
facility intended to pay up to 18 months of interest in the event
Continental defaults on its lease obligations.  The liquidity
facility does not provide for payments of principal due.  The
short-term rating of the liquidity provider, Landesbank Baden-
Wurttemberg, is P-1.

The rating assigned to the Certificates reflects the ability of
the issuer trust to make timely payments of interest and ultimate
payment of principal at a date no later than the Final Maturity
Date of December 1, 2020.  The ratings are based on:

   * the credit quality of Continental, as obligor under
     the leases;

   * the value of the aircraft pledged as security for the
     equipment notes; and

   * the credit support provided by the liquidity facilities.

Any future changes in the underlying credit quality of Continental
and its ratings, and/or material changes in the value of aircraft
pledged as collateral, and/or changes in the status of the
liquidity facility or the credit quality of the liquidity provider
could cause a change in the ratings assigned to the Certificates.

The ERJ-145XR aircraft collateralizing the Certificates will be
sub leased by Continental to ExpressJet Airlines, Inc.  Express
Jet, which provides regional jet capacity to Continental on a fee
for departure basis, operates a total of:

   * 86 ERJ-145XR,
   * 140 ERJ-145, and
   * 30 ERJ-135 aircraft.

The ERJ-145 line of aircraft is widely accepted in the global
market, and the ERJ-145XR model being financed through the
Certificates is an extended range version of the ERJ-145LR model.
Moody's notes, however, that ExpressJet is the only operator of
the ERJ-145-XR.  Although all ERJ-135, 145 and 145XR share a high
degree of commonality, the rating on the Certificates reflects
that, under a liquidation scenario, it could be difficult to place
this specific type of aircraft without discounting because of the
operator concentration.

Rating assigned:

  Continental Airlines, Inc.:

     * Senior Secured Enhanced Equipment Trust, 2005-ERJ1 Pass
       Through Certificates Class A at Ba2

Continental Airlines, Inc. is headquartered in Houston, Texas.


CREDIT SUISSE: Fitch Affirms Low-B Rating on Five Cert. Classes
---------------------------------------------------------------
Credit Suisse First Boston Mortgage Securities Corp.'s commercial
mortgage pass-through certificates, series 2001-CK3, are upgraded:

     --$42.3 million class B to 'AAA' from 'AA';
     --$56.3 million class C to 'AA' from 'A';
     --$11.3 million class D to 'AA-' from 'A-';
     --$14.1 million class E to 'A+' from 'BBB+';
     --$25.4 million class F to 'BBB+' from 'BBB';

These classes are affirmed by Fitch:

     --$98.2 million class A-2 at 'AAA';
     --$127 million class A-3 at 'AAA';
     --$582.4 million class A-4 at 'AAA';
     --Interest-only class A-X at 'AAA';
     --$8 million class G-1 at 'BBB-';
     --$11.7 million class G-2 at 'BBB-';
     --$14.1 million class H at 'BB+';
     --$24.8 million class J at 'BB';
     --$9 million class K at 'BB-';
     --$12.7 million class L at 'B+';
     --$9.9 million class M at 'B-';

Fitch does not rate the $6.8 million class N or the $4.3 million
class O certificates.

The upgrades reflect paydowns as well as the defeasance of nine
loans in the pool (11.9%) since issuance.  As of the August 2005
distribution date, the pool's aggregate certificate balance has
decreased 6.1%, to $1.06 billion from $1.13 billion since
issuance.

Two assets (1.5%) are currently in special servicing including a
90-day-delinquent loan.  The delinquent loan (1.1%) is secured by
a multifamily property in Detroit, MI.  The special servicer is
evaluating workout options including a deed in lieu of foreclosure
or foreclosure.  The second specially serviced loan (0.42%) is
secured by retail property in Flemington, NJ.  The loan is
current; however, the borrowers notified the servicer that they
would not be able to continue making the debt service payments.
As a result, a settlement was negotiated and the borrower is
expected to pay off the loan at the end of October.

Fitch reviewed the credit assessment of two loans in the pool, 888
Seventh Avenue (9.9%) and Atrium Mall (4.4%).  Based on stable
performance, the loans maintain investment grade credit
assessments.  Debt service coverage ratios for these loans are
calculated using servicer-reported net operating income less
required reserves divided by debt service payments based on the
current balance and a Fitch stressed refinance constant of 9.23%.

The 888 Seventh Avenue is an office property located in New York,
NY.  The property, which contains 874,000 square feet, was built
in 1971 and renovated in 1998.  Occupancy as of July 2005 was 98%
compared to 93% at issuance, and the DSCR increased to 1.92 times
(x) from 1.60x at issuance.

The Atrium Mall is a 215,000 sq. ft. retail center located in
Chestnut Hill, MA.  Occupancy as of July 2005 was 94%, and the
DSCR increased to 1.80x from 1.37x at issuance.  Major tenants
include Borders Books (13% of net rentable area), The Gap/Gap Kids
(14%), and Pottery Barn/Pottery Barn Kids (10%).


DELPHI CORP: Reiterates Need for Cost Cuts as October 17 Looms
--------------------------------------------------------------
Delphi Corporation Chief Executive Officer Steve Miller continues
to stress the need for wage and benefit concessions from its
employee members of United Auto Workers to avoid a bankruptcy
filing on or before October 17.

According to published reports, Mr. Miller said October 17 was not
an "absolute deadline" but the Company needs a clear framework by
that time because new U.S. bankruptcy laws would reduce the
flexibility corporations have if they file for protection after
that date.

As previously reported, Delphi Chairman Steve Miller -- Federal-
Mogul's former non-executive chairman and a turnaround pro who
came to Delphi from Bethlehem Steel -- demanded 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 asked for the
freedom to close plants and to divest or shut down money-losing
business units, in the shortest time possible.

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.
Analysts said in reports that should Delphi file for bankruptcy,
GM will be paying up to $9 billion in costs.

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.


DELTA AIR: Fitch Downgrades Issuer Default Rating to D
------------------------------------------------------
Fitch Ratings downgraded the issuer default rating of Delta Air
Lines, Inc. to 'D' from 'C' following the company's announcement
Wednesday that it has filed for Chapter 11 bankruptcy court
protection.  Fitch has also affirmed its issue rating of 'C' and
recovery rating of 'R6' on Delta's senior unsecured debt,
reflecting the very weak recovery prospects for unsecured
creditors in a Delta bankruptcy reorganization.  The senior
unsecured rating applies to approximately $4.5 billion in debt
obligations.

Delta's Chapter 11 filing comes despite numerous attempts by the
airline to cut unit operating costs, increase unit revenue,
restructure debt obligations, and raise additional liquidity
through asset sales.  Over the past year, Delta has implemented a
number of cost-saving and revenue-enhancing initiatives with a
goal of achieving $5 billion in annual benefits, including a $1
billion reduction in annual pilot labor costs.  However, the
combination of much higher jet fuel costs and a still weak
domestic pricing environment has thwarted the company's efforts to
stabilize its operating profile and generate stronger cash flow
from operations.  In light of substantial near-term cash
obligations for debt maturities, pension contributions, and
interest and lease payments, Delta faced the prospect of
intensifying liquidity pressures over the next several months.
This pressure has been exacerbated by an expected $1.5 billion
year-over-year increase in full-year 2005 fuel expense.

Delta enters Chapter 11 protection with $1.7 billion in debtor-in-
possession financing from GE Commercial Finance and Morgan
Stanley.  In addition, American Express has agreed to provide the
airline with $350 million in secured financing.  Of the total
$2.05 billion in financing, $980 million will be used to repay
existing secured financing from GE and American Express, leaving
Delta with approximately $1.07 billion in additional liquidity.

Based on the high percentage of secured debt in Delta's capital
structure, which will receive priority in the settlement of
claims, Fitch estimates that recoveries to holders of Delta's
unsecured debt obligations will be in the single-digit percentage
range.  This would be consistent with unsecured debt recoveries in
other recent airline bankruptcies (e.g. US Airways' first
bankruptcy and United Airlines' plan of reorganization filed with
the court this month).

Delta's in-court restructuring efforts will likely focus on
additional wage and work rule concessions (potentially achieved
through the use of Section 1113 of the Bankruptcy Code), a
probable termination of existing defined benefit pension plans,
and a realignment of the airline's domestic route network to
maximize unit revenue in the face of significant low-cost carrier
competition.  The carrier will likely seek other opportunities to
renegotiate aircraft-backed debt and lease obligations to reduce
secured claims in a post-Chapter 11 scenario.

The 'C' rating on Delta's defaulted unsecured debt obligations
follows from Fitch's revised recovery rating methodology
guidelines.  The 'C' rating represents the lowest possible issue
rating for a defaulted security with below average or poor
recovery prospects.  For more information on Fitch's airline
recovery ratings methodology, see the 'Airline Industry Recovery
Ratings Guidelines,' available on the Fitch web site at
http://www.fitchratings.com/in the 'Recovery Ratings' section.


DELTA AIR: Files for Chapter 11 Protection in S.D. New York
-----------------------------------------------------------
Delta Air Lines (NYSE:DAL) and its affiliates filed for chapter 11
protection in the U.S. Bankruptcy Court for the Southern District
of New York in order to address its financial challenges and
support its ongoing efforts to become a simpler, more efficient
and cost-effective airline.

Delta's Board of Directors, in a unanimous decision, directed the
company to take this action after determining that a Chapter 11
reorganization is in the best long-term interest of the company,
its employees, customers, creditors, business partners and other
stakeholders.

                      Interim Orders

The Hon. Prudence C. Beatty entered a series of interim orders
that will help facilitate Delta's normal operations until the
Court rules on the Company's first day motions.  A hearing on the
first day motions is scheduled to begin at 2 p.m. today, Sept. 15,
2005, in New York.

Delta received interim authorization to, among other things:

   -- Provide employee wages, health care coverage, vacation,
      sick leave and similar benefits without interruption;

   -- Honor tickets and reservations and provide refunds and
      exchanges as usual;

   -- Maintain the SkyMiles program and other customer service
      programs;

   -- Pay for fuel under existing fuel supply contracts, and
      honor existing fuel supply, pipeline and storage fuel
      contracts, into-plane service contracts and other fuel
      service arrangements;

   -- Assume interline agreements, clearinghouse agreements,
      Airline Reporting Corporation (ARC) agreements, billing
      and settlement plan agreements, cargo agreements, and the
      Universal Air Travel Plan (UATP) agreement;

   -- Pay pre-petition obligations owed to creditors who have
      provided goods and services in foreign countries; and

   -- Continue to use existing cash management systems and
      maintain existing bank accounts.

"We are gratified that the Court has granted our request for
immediate approval of certain key motions that allow Delta to
continue normal operations," said Edward Bastian, Delta's Chief
Financial Officer.  "This action ensures a smooth beginning of our
Chapter 11 reorganization and is an important step in the
continuing transformation of our airline."

                        DIP Financing

To help support its business during the Chapter 11 proceedings,
Delta has obtained a commitment for $1.7 billion in debtor-in-
possession financing from GE Commercial Finance and Morgan Stanley
as Co-Lead Arrangers.  The commitment includes up to $1.4 billion
of financing on an interim basis pending final approval of the
full DIP financing at a later date.

In addition to the commitment for the new $1.7 billion DIP
financing, which replaces approximately $980 million in secured
pre-petition financing from GE Commercial Finance and American
Express, Delta has an agreement in principle with American Express
to provide the airline with an additional $350 million of secured
financing.  Altogether, Delta's post-petition financing
arrangements now total up to $2.05 billion, an increase of
approximately $1.07 billion from the company's pre-petition
secured credit facilities.

During the last year, Delta has developed and implemented a
transformation plan aimed at achieving approximately $5 billion in
annual financial benefits by the end of 2006 as compared to 2002.
As of June 30, 2005, Delta had implemented initiatives intended to
achieve approximately 85 percent of these benefits and was ahead
of schedule to meet its target.  However, persistent record-high
fuel costs at unpredicted and unprecedented levels and the
continued downward pressure on revenues within the airline
industry substantially outpaced and masked these benefits.
Despite doing everything it could to preserve its liquidity, Delta
has determined that it has no alternative but to utilize the
protections and flexibilities provided by the U.S. bankruptcy
laws.  Delta intends to use the additional time and flexibility
provided by the Chapter 11 process to expand its transformation
plan and move the company toward a more secure future.

"Delta's financial problems are severe, but by no means
insurmountable," Mr. Grinstein said.  "We are optimistic about our
future because we have been working for months on a business plan
that builds on the substantial improvements we've already made and
demonstrates that Delta can return to profitability once the
company is able to restructure appropriately."

Delta understands that any cost savings that it is able to achieve
while in Chapter 11 must fit within the strategic context of a
sensible business plan that remakes the airline into a profitable
company.  Delta has made great strides over the last few years to
adapt itself to the new competitive environment, undertaking major
cost-cutting initiatives and massive network, scheduling and
operational improvements -- without adversely impacting its
customer service rankings.  As part of these efforts to improve
efficiency and bottomline results, Delta undertook the largest
single-day schedule restructurings in its history, including the
redesign of the Atlanta hub operation and the elimination of its
hub operation at Dallas/Ft. Worth airport.  The airline also
restructured its domestic fare system with industry-leading
"Simplifares," rolled out extensive new customer-focused airport
technology, and outsourced a significant portion of its heavy
maintenance, among other steps.  Delta's in-court business plan
builds on these achievements and on its competitive strengths and
is designed to return the carrier to profitability.

Delta plans to use Chapter 11 to reconfigure its fleet and network
footprint in a manner that will enhance its revenues.  First,
Delta plans to simplify and streamline its fleet by targeting four
aircraft types to be removed by the end of 2006, so that only
seven mainline aircraft types will remain.  Second, Delta plans to
deploy smaller aircraft on many of its routes so that it utilizes
the proper-sized aircraft for the route it is flying.  Third,
Delta will continue to right-size its hub operations.  Fourth,
Delta plans to increase its capacity on international routes with
greater profit potential.

In addition to these substantial network and operational
improvements, Delta has determined that further job reductions and
changes to employee pay and benefits are a necessary component of
its business plan.  "Any changes in pay and benefits will be in
the context of a comprehensive business plan that is equitable and
involves other Delta stakeholders," said Mr. Grinstein.
"Importantly, Delta people at every level and across all work
groups also will have a greater ability than they do now to
benefit from our financial recovery and operational excellence,"
he added.  The company said it will be communicating to employees
more details about these changes as early as next week.

                         Labor Cuts

On Sept. 12, Delta presented the union that represents Delta
pilots, the Air Line Pilots Association, with pilot cost-saving
proposals necessary to help address the company's severe
challenges.

Given its financial situation and the need to preserve as much
cash as possible for its operations, Delta does not plan to make
the qualified defined benefit plan funding contributions soon due.
"Missing contributions does not mean that our qualified plans stop
paying monthly retirement benefits or that we have initiated the
process to terminate the plans," Mr. Grinstein said.

The company is continuing to pursue pension reform legislation
that might make the plans more affordable.  However, because of
Delta's growing financial pressures, there can be no guarantees --
even with pension reform -- about the future of Delta's qualified
defined benefit pension plans.  "Ultimately, what we can afford in
the future airline business environment, as well as the nature of
any legislation, will determine what is possible," Mr. Grinstein
asserted.

He added, "As we deal with our financial challenges, it is
important to keep in mind that Delta -- the world's second-largest
passenger airline, the leading U.S. carrier across the Atlantic
and the third-largest carrier to Latin America -- has formidable
strengths: Delta people and the customer loyalty their superior
service inspires; the significant network advantages derived from
having the world's largest hub (in Atlanta), supported by our hubs
in Cincinnati, Salt Lake City, New York-JFK and many focus cities;
Song -- our award-winning, low-fare air service; and Delta's
cutting-edge, passenger-friendly technology are but a few of our
distinguishing assets."

He concluded, "As Delta rises to meet new challenges, I am certain
some things will never change.  Our resolve to keep flying while
upholding the highest standards of safety and service will not
falter.  Our commitment to the principle that Delta people will
share in any success their sacrifice helps make possible will not
waver.  Our gratitude for the loyalty of our customers and the
support of the communities we serve will not subside.  And, our
pride in this great company and in one another will not be
shaken."

Delta's Chapter 11 cases were filed in U.S. Bankruptcy Court for
the Southern District of New York.  Delta has filed a motion with
the Court seeking interim relief that will ensure the company's
continued ability to conduct normal operations.  If such interim
relief is granted by the Court, Delta will be authorized, among
other things, to:

   -- Provide employee wages, healthcare coverage, vacation, sick
      leave and similar benefits without interruption.

   -- Honor pre-petition obligations to customers and continue
      customer programs including Delta's SkyMiles frequent-flyer
      program.

   -- Pay for fuel under existing fuel supply contracts, and honor
      existing fuel supply, distribution and storage agreements.

   -- Assume contracts relating to interline agreements with
      other airlines.

   -- Pay pre-petition obligations to foreign vendors, foreign
      service providers and foreign governments.

   -- Continue maintenance of existing bank accounts and existing
      cash management systems.

Delta's principal bankruptcy counsel is Davis Polk & Wardwell.
Its financial adviser is the Blackstone Group.

Headquartered in Atlanta, Georgia, Delta Air Lines --
http://www.delta.com/-- is the world's second-largest airline in
terms of passengers carried and the leading U.S. carrier across
the Atlantic, offering daily flights to 502 destinations in 88
countries on Delta, Song, Delta Shuttle, the Delta Connection
carriers and its worldwide partners.  The Company and 18
affiliates filed for chapter 11 protection on Sept. 14, 2005
(Bankr. S.D.N.Y. Lead Case No. 05-17923).  Marshall S. Huebner,
Esq., at Davis Polk & Wardwell, represents the Debtors in
their restructuring efforts.  As of June 30, 2005, the
Company's balance sheet showed $21.5 billion in assets and
$28.5 billion in liabilities.


DELTA AIR: Case Summary & 186 Largest Unsecured Creditors
---------------------------------------------------------
Lead Debtor: Delta Air Lines, Inc.
             P.O. Box 20706
             Department 981
             Atlanta, Georgia 30320-6001

Bankruptcy Case No.: 05-17923

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      Song, LLC                                  05-17921
      Crown Rooms, Inc.                          05-17922
      Comair, Inc.                               05-17924
      Delta Connection Academy, Inc.             05-17926
      Delta Technology, LLC                      05-17927
      DAL Global Services, LLC                   05-17928
      Comair Holdings, LLC                       05-17931
      Delta Corporate Identity, Inc.             05-17932
      Comair Services, Inc.                      05-17935
      Delta Ventures III, LLC                    05-17936
      DAL Moscow, Inc.                           05-17937
      Delta Loyalty Management Services, LLC     05-17939
      DAL Aircraft Trading, Inc.                 05-17941
      Delta AirElite Business Jets, Inc.         05-17942
      Epsilon Trading, Inc.                      05-17943
      Delta Benefits Management, Inc.            05-17945
      ASA Holdings, Inc.                         05-17946
      Kappa Capital Management, Inc.             05-17947

Type of Business: The Debtor is the world's second-largest
                  airline in terms of passengers carried and the
                  leading U.S. carrier across the Atlantic,
                  offering daily flights to 502 destinations in
                  88 countries on Delta, Song, Delta Shuttle, the
                  Delta Connection carriers and its worldwide
                  partners.  See http://www.delta.com/

Chapter 11 Petition Date: September 14, 2005

Court: Southern District of New York (Manhattan)

Judge: Prudence Carter Beatty

Debtors' Counsel: Marshall S. Huebner, Esq.
                  Davis Polk & Wardwell
                  450 Lexington Avenue
                  New York, NY 10017
                  Telephone (212) 450-4000

Financial Condition as of June 30, 2005:

    Total Assets: $21,561,000,000

    Total Debts:  $28,546,000,000


A. Delta Air Lines, Inc.'s 21 Largest Unsecured Creditors:

   Entity                     Nature of Claim      Claim Amount
   ------                     ---------------     --------------
Boeing Commercial Airplane    Future Aircraft     $3,718,340,366
Group                         Commitments
Attn: R. Leo Lyons
VP of Contract
P.O. Box 3707
Mail Stop 75-38
Seattle, WA 98124-2207

The Bank Of New York          Delta Air             $924,895,000
Dave Csatari                  Lines 8.30%
Vice President                Bonds
One Wall Street
New York, NY 10286

The Bank of New York          Delta Air             $537,500,000
                              Lines 8.125%
                              Due 2039

The Bank of New York          Delta Air             $499,340,000
                              Lines 7.90%

The Bank of New York          Massport              $497,585,000
                              Series A, B & C

The Bank of New York          Delta Air             $350,000,000
                              Lines Inc.
                              8% Convertible

The Bank of New York          Delta Airlines        $325,000,000
                              2.875% Convertible
                              Senior Bonds

The Bank of New York          Develp Auth of        $295,495,000
                              Clayton County -
                              A, B, C

The Bank of New York          Delta Air Lines       $247,772,000
                              10.00% Senior Notes

The Bank of New York          8.00% Notes Due 2007  $135,202,000

Suntrust Bank                 Fulton County -       $124,770,000
Patricia Sruell               OCIII
25 Park Place Northeast
24th Floor
Mail Code Ga-Atlanta-0008
Atlanta, GA 30338

The Bank of New York          Delta Air Lines       $121,975,000
                              7.70%

The Bank of New York          Delta Air Lines       $105,766,000
                              9.75% Debentures

The Bank of New York          Delta Air Lines       $102,455,000
                              9.00% Debentures

The Bank of New York          Delta Air Lines        $84,665,000
                              10.125% Debentures

The Bank of New York          Delta Air Lines        $68,725,000
                              10.375% Due 2011

The Bank of New York          Delta Air Lines        $63,548,000
                              Inc. 9.25% Due 2022

The Bank of New York          Delta Air Lines        $54,329,000
                              Inc. 10.375%

Suntrust Bank                 Fulton County -        $29,900,000
                              1992

The Bank of New York          Delta Air Lines        $27,500,000
                              Mtn Series B

Boeing Comm Airplane Co       Trade Vendor            $2,628,540
Seattle, WA 98124-2207


B. Song, LLC's 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Panasonic Avionics Corp.      Trade Vendor              $581,995
22333 29th Drive Southeast
Bothell, WA 98021-7814

The Media Kitchen             Trade Vendor              $484,373
Div Of Kirshenbaum Bond
& Partners
P.O. Box 5613 FPO
New York, NY 10087-5613

Echostar Satellite Corp.      Trade Vendor              $189,025
dba Dish Network Acct 2525735
5701 South Santa Fe
Littleton, CO 80120

Spafax Airline Network Ltd    Trade Vendor              $127,111
4695 Macarthur Court
Suite 370
Newport Beach, CA 92660

Creative Artists Agency       Trade Vendor              $125,500
9830 Wilshire Boulevard
Beverly Hills, CA 90212

Shepardson Stern & Kaminsky   Trade Vendor               $73,129
88 Pine Street, 30th Floor
New York, NY 10005

M K G Productions             Trade Vendor               $56,750
53 West 21 Street, 3rd Floor
New York, NY 10010

ADP, Inc.                     Trade Vendor               $45,318
5800 Winward Parkway, A-210
Alpharetta, GA 30005

Eflyte Inc.                   Trade Vendor               $18,442
One Independent Drive
Suite 106
Jacksonville, FL 32202

Hall & Partners USA Inc       Trade Vendor               $14,750
72 Spring Street
New York, NT 10012-4019

Modem Media                   Trade Vendor               $11,667
230 East Avenue
Norwalk, CT 06855-1935

ADP Benefit Services          Trade Vendor               $10,236
4900 University Avenue
West Des Moines, IA 50266

Diversified Electronics Inc.  Trade Vendor                $5,840
309 Agnew Drive C
Forest Park, GA 30297-2606

Emory University              Trade Vendor                $5,000
1300 Clifton Rd.
Atlanta, GA 30322

Ladas & Parry                 Trade Vendor                $4,697
224 S Michigan Avenue
Chicago, IL 60604-2505

The Flight Station, Inc.      Trade Vendor                $1,524
3430 Lang Avenue
Hapeville, GA 30354-1306

Melanie Paykos Design, Inc.   Trade Vendor                  $900
3457 South La Cienega Blvd.
Los Angeles, CA 90016

Corsolutions Medical, Inc.    Trade Vendor                  $699
38755 Eagle Way
Chicago, IL 60678-1387

Luce Information Services     Trade Vendor                  $633
P.O. Box 379
Topeka, KS 66601-0379

Source Inc.                   Trade Vendor                  $325
14060 Proton Rd.
Dallas, TX 75244-3673


C. Comair, Inc.'s 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Bombardier Inc,- Canada       Trade Vendor            $3,474,492
National Bank Of Canada
Aba #026005487
Montreal, Quebec

Bombardier Services           Trade Vendor              $900,648
Attn: Finance Dept.
2400 Aviation Way
Bridgeport, WV 26330

Lufthansa A.E.R.O.            Trade Vendor              $792,265
Rudolf-Diesel-Strass
55232 Alzey (Germany)

Port Authority Of NY          Trade Vendor              $737,278
P.O. Box 95000-1517
Philadelphia, PA 19195-1517

Goodrich Aerospace Corp       Trade Vendor              $309,395
File 53028
Los Angeles, CA 90074-3028

Short Bros. PLC               Trade Vendor              $304,399
HSBC Bank PLC
City Of London Corpo
London, England, E14 5xl

Kenton Co. Airport B          Trade Vendor              $229,553
P.O. Box 752000
Cincinnati, OH 45275

Massachusetts Port Authority  Trade Vendor              $222,135
P.O. Box 3471
Boston, MA 02241-3471

Cintas Corporation            Trade Vendor              $199,627
P.O. Box 97627
Chicago, IL 60678-7627

Jeppesen-Sanderson I          Trade Vendor              $186,212
Dept. 1303
Denver, CO 80291-1303

Reebaire Aircraft, I          Trade Vendor              $170,703
P.O. Box 1409
Mena, AR 71953

Golden Touch Transportation   Trade Vendor              $168,884
109-15 14th Avenue
College Point, NY 11356

Metro. Washington Airport     Trade Vendor              $148,310
P.O. Box 2143
Merrifield, VA 22116-2143

Rosemount Aerospace           Trade Vendor              $139,935
Dept Ch 10564
Palatine, IL 60055-0564

Sundstrand Atg                Trade Vendor              $121,799
Po Box 360951
Pittsburgh, PA 15251

Professional Data Re Inc.     Trade Vendor              $119,178
P.O. Box 643445
Cincinnati, OH 45264-3445

Dade County Aviation          Trade Vendor              $119,119
Miami Int'l Airport
P.O. Box 592616
Miami, FL 33159-2616

Systems Insight, Inc          Trade Vendor              $110,288
514 Madison Ave., Suite 200
Covington, KY 41011

S.A.R.A.A.                    Trade Vendor               $96,558
P.O. Box 12934
Philadelphia, PA 19101-0934

Wingate Inn                   Trade Vendor               $93,662
33 Beacon Dr.
Greenville, SC 29615


D. Delta Connection's 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Textron Lycoming              Trade Vendor               $41,794
P.O. Box 371097m
Pittsburgh, PA 15251

Air Orlando                   Trade Vendor               $20,720
51 N.Crystal Lake Dr
Orlando, FL 32803

Jeppesen Sanderson, Inc.      Trade Vendor               $12,137
Dept 1303
Denver, CO 80291-1303

Federal Aviation Adm          Trade Vendor               $11,786
6303 Ivy Lne, Suite
Greenbelt, MD 20770-6325

Aviation Plus, Inc.           Trade Vendor               $10,888
P.O. Box 161344
Miami, FL 33116

Florida Power & Light         Trade Vendor               $10,311
General Mail Facilitt
[Address Not Provided]

Hachette Filipacchi           Trade Vendor               $10,162
Media U.S., Inc.
Dept 5227-31
Chicago, IL 60694-1327

Xperient                      Trade Vendor                $8,632
2290 Ronald Regan Bl
Suite 136
Longwood, FL 32750

American Aero Servic          Trade Vendor                $8,089
333 South Street
New Smyrna Beach, FL 32168

Key Equipment Finance         Trade Vendor                $8,016
Payment Processing
P.O. Box 203901
Houston, TX 77216-3901

API                           Trade Vendor                $7,159
Aerospace Products Inc
P.O. Box 1000
Memphis, TN 38148-0026

The New Piper Aircraft        Trade Vendor                $7,156
Attn: Claire Guffant
2926 Piper Drive
Vero Beach, FL 32960

Iridia Technologies           Trade Vendor                $6,068
195 South Westmonte,
Suite 1108
Altamonte Springs, FL 32714

Aeroparts Aviation            Trade Vendor                $5,109
8233 Margarita Drive
Orlando, FL 32817

Aircraft Tool Supply          Trade Vendor                $4,393
P.O. Box 370
Oscoda, MI 48750

Airparts Company, Inc.        Trade Vendor                $3,969
P.O. Box 9268
Ft. Lauderdale, FL 33310-9268

Piper Parts Plus, LLC         Trade Vendor                $3,436
P.O. Box 1000, Dept. 433
Memphis, TN 38148-0433

Bellsouth Advertising         Trade Vendor                $3,260
Publishing Corp.
P.O. Box 105024
Atlanta, GA 30348-5024

Aerotech of Louisville        Trade Vendor                $3,132
2209 Watterson Trail
Louisville, KY 40299-2531

Grainger, Inc.                Trade Vendor                $2,946
P.O. Box 419267
Dept 580 - 818085276
Kansas City, MO 64141-6267


E. Dal Global's 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Tug Technologies Corporation  Trade Vendor              $141,958
Marietta, GA 30062

Netaspx, Inc.                 Trade Vendor               $42,517
Herndon, VA 20171

Kronos Incorporated           Trade Vendor               $41,766
Chelmsford, MA 01824

Adaptive Enginneering Ltd.    Trade Vendor               $40,240
Calgary, AB T2g 1v1

Kavi Software Inc             Trade Vendor               $38,315
Suwanee, GA 30024

Insight Global, Inc.          Trade Vendor               $32,806
Atlanta, GA 30319

Jacksonville                  Trade Vendor               $26,529
Airport Authority
Jacksonville ATO,
Fl 32229-4018

Primeflight Aviation          Trade Vendor               $25,602
Services
Rep0100=000288
Cincinnati, OH 45264-3041

O.C. Tanner                   Trade Vendor               $24,109
Recognition Company
Salt Lake City, UT 84115-2383

Aircraft Service Intl Group   Trade Vendor               $23,559
Rep 0100 =000334 0231=448
Dallas, TX 75391-0701

Verifications Incorporated    Trade Vendor               $21,886
Minneapolis, MN 55480-1150

Cigna                         Trade Vendor               $19,688
Chicago, IL 60693-0050

Fortbrand Services, Inc.      Trade Vendor               $19,648
Plainview, NY 11803

Global Technologies           Trade Vendor               $17,325
Int'l Corp.
Miami, FL 33183

Metropolitan Washington       Trade Vendor               $15,703
Airport Authority
Merrifield, VA 22116-2143

Port Of Oakland               Trade Vendor               $15,034
Oakland Int'l Airport
Oakland, CA 94621

Premium Services              Trade Vendor               $15,015
Management, LLC
Atlanta, GA 30344

Manassas                      Trade Vendor               $14,727
Ice & Fuel Company, Inc.
Mifco
Manassas, VA 20110

Continental                   Trade Vendor               $14,392
Building Maintenance
Chantilly, VA 20151

Digital                       Trade Vendor               $12,776
Consulting & Software
Sugar Land, TX 77478


F. Delta Technology's 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Hewlett-Packard               Trade Vendor            $2,526,477
Dallas, TX 75230

Hewlett-Packard               Trade Vendor              $333,854
Dallas, TX 75230

Worldspan L P                 Trade Vendor            $2,328,318
Atlanta, GA 30339-3153

Hewlett-Packard (Cisco)       Trade Vendor            $1,504,886
Roswell, GA 30075

SAS Institute Inc             Trade Vendor            $1,200,000
Cary, NC 27513

MSLI, GP                      Trade Vendor            $1,000,387
Reno, NV 89511-1137

Sun Microsystems Inc          Trade Vendor              $565,558
Attn: Shannon Judge
Alpharetta, GA 30005-2026

Cisco Systems Capital Corp    Trade Vendor              $514,841
File No 73226
San Jose, CA 95134

NCR Corporation               Trade Vendor              $328,592
Charlotte, NC 28275-5245

IBM                           Trade Vendor              $323,012
Chicago, IL 60693

Avaya Financial Services      Trade Vendor              $273,125
Chicago, IL 60673-3000

Kinetics, Inc.                Trade Vendor              $270,272
Lake Mary, FL 32746

Parity Teltech                Trade Vendor              $268,804
New York, NY 10006-3003

Microsoft Corporation         Trade Vendor              $231,315
Dallas, TX 75248-6411

Hyperion
Solutions Corporation         Trade Vendor              $202,490
Sunnyvale, CA 94089

Hewlett-Packard Company       Trade Vendor              $197,287
Boise, ID 83714

1 E Limited                   Trade Vendor              $169,050
Ealing, London W5 5tl

Tangosol, Inc.                Trade Vendor              $157,279
Somerville, MA 02144

Avaya Communication           Trade Vendor              $110,880
Parsippany Troy Hill,
NJ 07054

Computer Horizons Corp        Trade Vendor              $109,174
Mountain Lakes, NJ 07046

The Research Board            Trade Vendor              $106,000
New York, NY 10021


G. Comair Holdings' 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Sed-It, Llc                   Trade Vendor                $8,795
3901 Yardley Court
Suite 205
Louisville, KY 40299

Software Architects           Trade Vendor                $6,864
Lbx 619785
P.O. Box 6197
Chicago, IL 60680-6197

Societe International         Trade Vendor                $6,000
De Telecommunication
Attn: Beth Higgins
Bohemia, NY 11716

Sabre Inc.                    Trade Vendor                $2,650
7285 Collection Cent
Chicago, IL 60693

Hewlett Packard               Trade Vendor                $2,140
Direct Marketing Div
P.O. Box 44548
San Francisco, CA 94144

Institute For Int'l           Trade Vendor                $1,721
P.O. Box 3685
Boston, MA 02241-3685

Rumpke Container Service      Trade Vendor                $1,652
P.O. Box 538708
Cincinnati, OH 45251

Cincinnati Bell Tech          Trade Vendor                $1,573
1507 Solutions Center
Chicago, IL 60677-1055

Itsmf Publications            Trade Vendor                $1,500
13140 Coit Road
Suite 320, Lb 120
Dallas, TX 75240

Business Information          Trade Vendor                $1,228
2201 Spring Grove Av
Cincinnati, OH 45214-1723

Crew & Buchanan Law           Trade Vendor                $1,079
2580 Kettering Tower
40 North Main Street
Dayton, OH 45423

Access Computer               Trade Vendor                  $961
P.O. Box 507
West Chester, OH 45069

Anixter Inc                   Trade Vendor                  $909
P.O. Box 847428
Dallas, TX 75284-7428

Progressive Microtec          Trade Vendor                  $790
11150 Woodward Lane
Cincinnati, OH 45241

Jensen Tools Inc.             Trade Vendor                  $775
Dept Ch 10655
Palatine, IL 60055-0655

Computer Science Corp         Trade Vendor                  $362
P.O. Box 8500-S-2476
FC 1-2-4-3, Lockbox
Philadelphia, PA 19178

Insight                       Trade Vendor                  $349
P.O. Box 78825
Phoenix, AZ 85062

Startron Componets Inc        Trade Vendor                  $258
5933 W Century Blvd, # 130
Los Angeles, CA 90045-5445

Transource                    Trade Vendor                  $172
P.O. Box 60005
Charlotte, NC 28260-0005

Corporate Express             Trade Vendor                  $167
P.O. Box 71217
Chicago, IL 60694-1217

H. Comair Services' 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Aetna Building Maintenance    Trade Vendor                $4,092
P.O. Box 713175
Columbus, OH 43271-3175

NSG Inc.                      Trade Vendor                $3,640
1014 Vine St., Suite 1800
Cincinnati, OH 45202

Cinergy/ULH&P                 Trade Vendor                $3,566
P.O. Box 740150
Cincinnati, OH 45274-0150

Hydrotech Inc.                Trade Vendor                $2,603
10052 Commerce Park
Cincinnati, OH 45246

Smith & Jolly                 Trade Vendor                $1,666
13093 East Nagel Road
Alexandria, KY 41001

Gem City Tires Inc.           Trade Vendor                $1,490
3680 East Kemper Road
Sharonville, OH 45241

Aviation Laboratories         Trade Vendor                $1,420
P.O. Box 260118
Dallas, TX 75326-0118

Harper Oil Products           Trade Vendor                $1,378
P.O. Box 6325
Florence, KY 41022-6325

Double Check Company          Trade Vendor                  $958
P.O. Box 87-9200
Kansas City, MO 64187-9200

Bosserman Aviation            Trade Vendor                  $524
2327 State Route 568
Carey, OH 43316

Brinkman Oil Co.              Trade Vendor                  $450
P.O. Box 631863
Cincinnati, OH 45263-1863

Lynx Enterprises Inc          Trade Vendor                  $428
P.O. Box 18817
Fairfield, OH 45018

KY Motor Service              Trade Vendor                  $383
P. O. Box 14240
2701 Spring Grove Avenue
Cincinnati, OH 45250-0240

Prime Office Product          Trade Vendor                  $382
4924 Provident Drive
Cincinnati, OH 45246

Cardinal Laboratories         Trade Vendor                  $327
104 North Street
Wilder, KY 41071

Florence Hardware Co          Trade Vendor                  $274
7110 Dixie Highway
Florence, KY 41042

D&M Battery Co, Inc           Trade Vendor                  $246
275 Cherokee Trail
Dry Ridge, KY 41035

Accu-Tex Signs & Banners      Trade Vendor                  $153
4210 Dixie Highway
Erlanger, KY 41018

W.W. Grainger                 Trade Vendor                  $149
Dept 152
P.O. Box 801906314
Palatine, IL 60038-0001

Northern Safety Co.           Trade Vendor                  $141
P.O. Box 4250
Utica, NY 13504-4250


I. Delta Loyalty's 3 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Pace Communications Inc       Trade Vendor               $29,720
Preformat 000706
For 0185 Only
Charlotte, NC 28260

Jackson Spalding Inc          Trade Vendor                $9,266
Communications Management
Atlanta, GA 30361-6302

Pace Communications Inc       Trade Vendor                $5,605
Preformat 000706
For 0185 Only
Greensboro, NC 27401-1022


J. Delta Airelete's 19 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Learjet Corporation           Trade Vendor               $95,110
P.O. Box 844715
Dallas, TX 75284-4715

Air Routing Card Center       Trade Vendor               $50,143
P.O. Box 412171
Kansas City, MO 64141-2171

Jetride Inc.                  Trade Vendor               $45,655
P.O. Box 714912
Columbus, OH 43271-4912

Averitt Air Inc.              Trade Vendor               $30,170
P.O. Box 3166
Cookeville, TN 38502

Universal Weather An Inc.     Trade Vendor               $20,886
P.O. Box 201033
Houston, TX 77216-1033

Cessna Aircraft Comp          Trade Vendor               $16,483
P.O. Box 281188
Atlanta, GA 30384-1188

Superstition Aviation         Trade Vendor               $16,016
c/o Patrick Dial
6404 East Gainsbrough
Scottsdale, AZ 85251

Jet Aviation                  Trade Vendor               $14,532
P.O. Box 350034
Boston, MA 02241-0534

Swaps Aviation Progr          Trade Vendor               $13,483
5079 North Dixie Highway
Oakland Park, FL 33334

Jet Solutions, LLC            Trade Vendor                $7,917
1702 N. Collins Boulevard
Suite 190
Dallas, TX 75080

FD2S                          Trade Vendor                $6,825
500 Chicon
Austin, TX 78702

Airfuel International         Trade Vendor                $6,647
Dept 135-01
P.O. Box 6700
Detroit, MI 48267-0135

Aviation Research Group       Trade Vendor                $5,000
212 West 8th Street
Cincinnati, OH 45202

Limolink, Inc.                Trade Vendor                $4,967
701 Tama Street, Building A,
Marion, IA 52302

Innersync Studio              Trade Vendor                $4,839
26 E. 9th Street, 2nd Floor
Newport, KY 41071

Elite Aviation                Trade Vendor                $3,885
7501 Hayvenhurst Place
Van Nuys, CA 91406

Flightworks Air Charter       Trade Vendor                $3,761
500 Townpark Lane, Suite 350
Kennesaw, GA 30144

Aero Clean Corp.              Trade Vendor                $3,648
1250 Aviation Avenue
Suite 200s
San Jose, CA 95110

Cae Simuflite                 Trade Vendor                $3,500
P.O. Box 846135
Dallas, TX 75284-6135


K. Epsilon Trading's 3 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Marathon Ashland Petroleum    Trade Vendor              $339,880
LLC
Repetitve Code 0105=541
Houston, TX 77056

Internal Revenue Service      Trade Vendor               $75,211
Eftps - Excise Tax
Cincinnati, OH 45999-0009

California Secretary Of       Trade Vendor                   $25
State
Sacramento, CA 94244


DENNIS CONWELL: Case Summary & 13 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Dennis W. Conwell & Mareda A. Burnett-Conwell
        8033 Clearview Drive
        Newburgh, Indiana 47630

Bankruptcy Case No.: 05-72276

Chapter 11 Petition Date: September 13, 2005

Court: Southern District of Indiana (Evansville)

Debtor's Counsel: Andrew Dennis Thomas, Esq.
                  2906 First Avenue
                  Evansville, Indiana 47710
                  Tel: (812) 422-2222
                  Fax: (812) 425-4828

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

Estimated Debts:  $1 Million to $10 Million

Debtor's 13 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
Integra Bank, N.A.            Judgment                $2,100,106
c/o Catherine A. Nestrick,
Esq.
P.O. Box 657
Evansville, IN 47704-0657


Barger Trust                  Guaranty on loan          $685,000
c/o H.S. Barger               of Spencer County
3 Johnson Place               Central Development
Evansville, IN 47714          LLC

Fifth Third Mortgage Company  8033 Clearview Drive,      $67,159
MD: 1COM54                    Newburgh, IN
38 Fountain Square Plaza      Value of security:
Cincinnati, OH 45263          $275,000
                              Senior lien:
                              $214,770

Barger Trust                  Guaranty on loan           $40,000
                              of Spencer County
                              Central Development
                              LLC

SST, Inc.                     1998 Pursuit/              $36,588
                              Georgia Boy RV
                              Value of security:
                              $35,000

Citibank                      Credit card debt            $6,320

Old National Bank             Lot 116 in the              $5,877
                              Sixth Subdivision
                              (Noel Shores) of
                              Christmas Lake
                              Village, as the same
                              appears of record
                              in Town Plat Book 1,
                              pag
                              Value of security:
                              $1,500

Corressell, Inc.              Business debt               $5,028

Platinum Plus for Business    Credit card debt            $1,707

American Express              Credit card debt            $1,373

Monogram Bank                 Credit card debt              $200

Sams Club                     Credit card debt              $165

Farmour Barr                  Credit card debt               $18


DERIVIUM CAPITAL: Wants to Hire Ruta & Soulios as Bankr. Counsel
----------------------------------------------------------------
Derivium Capital LLC asks the U.S. Bankruptcy Court for
the Southern District of New York for permission to employ
Ruta & Soulios LLP as its general bankruptcy counsel.

Ruta & Soulios will:

   1) provide the Debtor legal advice with respect to its powers
      and duties as a debtor-in-possession in the continued
      operation of its business and management of its properties;

   2) prepare all necessary applications, answers, orders, reports
      and other legal documents on behalf of the Debtor in
      connection with its chapter 11 proceeding; and

   3) perform all other legal services for the Debtor that are
      necessary in its chapter 11 case.

Steven Soulios, Esq., a Member of Ruta & Soulios, is one of the
lead attorneys for the Debtor.  Mr. Soulios disclosed that his
Firm received a $45,000 retainer.  Mr. Soulios charges $275 per
hour for his services.

Mr. Soulios reports that Ruta & Soulios' compensation rates for
partners, counsel and paraprofessionals who will perform services
to the Debtor presently range between $100 and $275 per hour.

Ruta & Soulios assures the Court that it does not represent any
interest materially adverse to the Debtor or its estate.

Headquartered in Tuxedo, New York, Derivium Capital LLC markets
and administers loans.  The Company filed for chapter 11
protection on Sept. 1, 2005 (Bankr. S.D.N.Y. Case NO. 05-37491).
When the Debtor filed for protection from its creditors, it listed
$60,000,000 in assets and $79,890,199 in debts.


DERIVIUM CAPITAL: U.S. Trustee Meeting With Creditors on Oct. 12
----------------------------------------------------------------
The U.S. Trustee for Region 2 will convene a meeting of Derivium
Capital LLC's creditors at 1:00 p.m., on Oct. 12, 2005, at the
Office of the U.S. Trustee, 181 Church Street, Poughkeepsie, New
York 12601.  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 Tuxedo, New York, Derivium Capital LLC markets
and administers loans.  The Company filed for chapter 11
protection on Sept. 1, 2005 (Bankr. S.D.N.Y. Case NO. 05-37491).
Steven Soulios, Esq., at Ruta & Soulios, LLP, represents the
Debtor in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed $60,000,000 in assets
and $79,890,199 in debts.


DEUTSCHE FINANCIAL: Fitch Pares Class M Certs. Seven Notches to B-
------------------------------------------------------------------
Fitch Ratings has performed a review of the Deutsche Financial
Capital Securitization LLC manufactured housing transactions.

DFC was a joint venture of Deutsche Financial Services Corporation
and Oakwood Acceptance Corporation.  Oakwood Homes Corporation
(Oakwood) was engaged in the production, sale and financing of
manufactured homes throughout the United States.

Oakwood filed for Chapter 11 bankruptcy protection in November
2002 and the company's operations and non-cash assets were
subsequently acquired by Clayton Homes, Inc. in April 2004.
Clayton Homes is a subsidiary of Berkshire Hathaway Inc. (rated
'AAA' by Fitch).  The loans continue to be serviced at the
servicing center in Greensboro, North Carolina, under Clayton
management.

Based on the review, these rating actions have been taken:

   Series 1997-I:

     -- Classes A-3 - A-6 are downgraded to 'AA+' from 'AAA';
     -- Class M is downgraded to 'B-' from 'BBB';
     -- Class B-1 remains at 'C'.

   Series 1998-I:

     -- Classes A-2 - A-7 affirmed at 'A';
     -- Class M is downgraded to 'CCC' from 'B-';
     -- Class B-1 remains at 'C'.

The affirmations affect approximately $49 million in outstanding
principal, while the downgrades affect nearly $58 million.

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


EAST 44TH: Can Use NYCB's Cash Collateral Until Sept. 30
--------------------------------------------------------
The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York gave East 44th Realty, LLC,
continued access to New York Community Bank's cash collateral
until Sept. 30, 2005.

The Debtor's indebtedness to NYCB stems from Prepetition
Agreements totaling $12,666,527.67 plus fees, costs, expenses and
other accrued charges including $80,993.20 in fees and expenses of
NYCB's counsel incurred as of Aug. 4, 2005.

As reported in the Troubled Company Reporter on Sept. 13, 2005,
valid and perfected first priority security interests and liens on
substantially all of the Debtor's assets secure the debt.

To provide the lender with adequate protection required under
Section 363 of the U.S. Bankruptcy Code for any diminution in the
value of its collateral, the Debtor will grant the Bank a
replacement lien to the same extent, validity and priority as the
prepetition lien.

In addition, the Debtor will pay into escrow $12,500 for six
months.  The prepetition legal fees totaling $80,993.20 will be
added to the principal amount of the prepetition debt.

Gary M. Becker, Esq., at Kramer Levin Naftalis & Frankel LLP in
Manhattan represents New York Community Bank.

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


ENRON CORP: Withdraws Request for PGE to Cancel Existing Stock
--------------------------------------------------------------
On July 29, 2004, Enron Corp. asked the U.S. Securities and
Exchange Commission for authority to cause its electric public
utility subsidiary company, Portland General Electric Company, to
cancel its existing common stock and to issue new common stock to
holders of allowed claims and to the Reserve for Disputed Claims
for further distribution to creditors with unresolved claims as
contemplated by Enron's Supplemental Modified Fifth Amended Joint
Plan.  Enron also sought authorization to deregister after the
issuance of the new shares of Portland General common stock.

According to Robert S. Bingham, Enron's Interim Chief Financial
Officer and Interim Treasurer, the new Portland General common
stock is not expected to be issued until April 2006 and given the
recent enactment of the Domenici-Barton Energy Policy Act of
2005, which repeals the Public Utility Holding Company Act of
1935 effective February 8, 2006, authorization under the PUHCA for
Enron to cause Portland General to issue new stock would not be
required, nor would authorization for Enron's deregistration
under the PUHCA be required.

Thus, Enron now withdraws its request for authorization under the
PUHCA.

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


ENRON CORP: Wants Court to Okay Kirkland & Ellis Settlement Pact
----------------------------------------------------------------
Pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure, Reorganized Enron Corporation and its debtor-affiliates
ask the U.S. Bankruptcy Court for the Northern District of
Illinois to approve their settlement agreement with Kirkland &
Ellis, LP.

Kirkland served as counsel to LJM Cayman, L.P., LJM2 Co-
Investment, L.P., Chewco Investments, L.P., and Enron Corp.'s
special purpose entity known as RADR.  Those Entities were
involved in various disputes relating the alleged manipulation of
Enron's financial results prior to its bankruptcy filing in 2001.

Lewis T. LeClair, a principal at McKool Smith, PC, relates that
his Firm was retained on behalf of the Debtors and the
Reorganized Debtors to investigate and make recommendations
concerning potential claims that Enron might have against
Kirkland.  To that end, the Firm has investigated and evaluated
those claims.

After extensive and substantial arm's-length negotiations, Enron
and Kirkland agree that:

   (a) Kirkland will pay Enron $5.2 million;

   (b) they will release each other from all claims in connection
       with Kirkland's representation of the Entities; and

   (c) neither party makes any admissions relating to the settled
       claims.  Kirkland contends that its conduct was
       professionally appropriate and denies any liability
       whatsoever.

Mr. LeClair asserts that the Settlement is fair and reasonable
under the circumstances.  He notes that that the Settlement will
result in a substantial recovery to the Reorganized Debtors.  On
the other hand, if the Settlement is not approved, the
Reorganized Debtors' estates will face prolonged and extensive
litigation.

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


EXCELLIGENCE LEARNING: Prepares to Restate Fiscal 2004 Financials
-----------------------------------------------------------------
Excelligence Learning Corporation (Nasdaq:LRNSE) reported that, on
September 7, 2005 and upon the recommendation of management, its
Board of Directors concluded that the Company's previously issued
financial statements as of and for the year ended December 31,
2004 and the quarter ended March 31, 2005 should not be relied
upon and should be restated.  This conclusion was based on the
results of the previously announced internal investigation
initiated by the Company's Audit Committee to determine if the
Company improperly failed to record and accrue for certain
obligations for the period and fiscal year ended December 31,
2004.

The investigation has concluded and Paul, Weiss, Rifkind, Wharton
and Garrison LLP, independent legal counsel to the Audit
Committee, with assistance from AlixPartners, acting as forensic
accounting consultants, have reported their findings to the Board.

Based on current estimates and as more fully described below, the
Company believes that operating (pre-tax) income for fiscal year
2004 will be reduced by approximately $500,000 to $600,000.  The
majority of the expected adjustments to fiscal year 2004 operating
(pre-tax) income is believed to be due to adjustments to the
timing of when certain accruals were recorded and is currently
expected to reverse in fiscal year 2005.

The Company plans to make adjustments to its operating income for
the fourth quarter of 2004 and the first quarter of 2005.  The
adjustments will be based on the results of the investigation and
management's continuing review of such results; the adjustments
anticipated at present remain estimates pending completion of
audit procedures related to the restated financial statements for
the year ended December 31, 2004 and review procedures related to
the restated financial statements for the quarter ended March 31,
2005, in each case by the Company's independent registered public
accounting firm.

The Company expects to report a decrease of approximately $500,000
to $600,000 in its previously reported operating (pre-tax) income
for the fiscal year ended December 31, 2004 of $3.1 million.
Certain elements of the expected adjustments consist of accruals
relating to fiscal year 2004 that were not recorded until fiscal
year 2005.  Adjusting the timing of when these accruals were
recorded is expected to result in an increase, in an amount yet to
be determined, to the Company's previously reported operating
(pre-tax) income for the quarter ended March 31, 2005.  The
anticipated adjustments are also expected to increase previously
reported total liabilities as of December 31, 2004 of $6.3 million
by approximately $1.3 million, and to increase previously reported
total assets of $48.7 million by approximately $750,000.

                     Officer Resignation

On September 13, 2005, Diane Kayser resigned as Chief Financial
Officer of the Company.  The Board is currently searching for a
new Chief Financial Officer.  The Company has engaged a consultant
to oversee day-to-day accounting and finance matters.

                         Filing Delay

The filing of the Company's quarterly report on Form 10-Q for the
quarter ended June 30, 2005 will be further delayed pending the
completion of the restated consolidated financial statements for
fiscal year 2004 and the first quarter of fiscal year 2005.
Because of the delay in filing its Form 10-Q, the Company is not
in compliance with the NASDAQ Stock Market's continued listing
requirement set forth in Marketplace Rule 4310(c)(14).

                    Nasdaq Delisting Notice

As previously announced, the Company received a NASDAQ Staff
Determination Letter dated August 16, 2005 regarding the Company's
failure to timely file its second quarter Form 10-Q.  On August
30, 2005, the Company received a letter from the NASDAQ Listing
Qualifications Department informing the Company that its appeal of
the determination to delist the Company's securities from The
NASDAQ SmallCap Market will be considered by the NASDAQ Listing
Qualifications Panel at an oral hearing on September 29, 2005.
The Company can provide no assurance that the Panel will grant its
request for continued listing.

                       Material Weakness

The circumstance of a restatement is a strong indicator that a
material weakness may have existed in the Company's internal
control over financial reporting.  Management is continuing to
evaluate whether there were one or more material weaknesses
related to the Company's restatements.

Headquartered in Monterey, California, Excelligence Learning
Corporation -- http://www.excelligencelearning.com/-- is a
developer, manufacturer and retailer of educational products which
are sold to child care programs, preschools, elementary schools
and consumers.  The Company serves early childhood professionals,
educators, and parents by providing quality educational products
and programs for children from infancy to 12 years of age.  With
its proprietary product offerings, a multi-channel distribution
strategy and extensive management expertise, the Company aims to
foster children's early childhood and elementary education.

The Company is composed of two business segments, Early Childhood
and Elementary School.  Through its Early Childhood segment, the
Company develops, markets and sells educational products through
multiple distribution channels primarily to early childhood
professionals and, to a lesser extent, consumers.  Through its
Elementary School segment, the Company sells school supplies and
other products specifically targeted for use by children in
kindergarten through sixth grade to elementary schools, teachers
and other education organizations.  Those parties then resell the
products either as a fundraising device for the benefit of a
particular school, student program or other community
organization, or as a service project to the school.


FEDERAL-MOGUL: Court OKs BofA's $1.12M Claim & Verizon Settlement
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
the settlement agreement among Federal-Mogul Corporation, Bank of
America, Cellco Partnership, doing business as Verizon Wireless
and Mellon Bank settling the disputes over alleged mistakes in
banking transactions by Mellon Bank and Bank of America.

Verizon agreed to withdraw its $1,120,320 claim.  The Bank of
America Claim is deemed allowed as a general unsecured claim in
the Debtors' cases for $1,120,320 in full satisfaction of all
claims asserted against the Debtors in the Verizon Adversary
Proceeding.

The Complaint, as amended, and all counterclaims and cross claims
are dismissed with prejudice, with each party to bear its own
costs and expenses.

Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's largest
automotive parts companies with worldwide revenue of some US$6
billion.  The Company filed for chapter 11 protection on Oct. 1,
2001 (Bankr. Del. Case No. 01-10582).  Lawrence J. Nyhan Esq.,
James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin
Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang,
Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in
their restructuring efforts.  When the Debtors filed for
protection from their creditors, they listed US$10.15 billion in
assets and US$8.86 billion in liabilities.  At Dec. 31, 2004,
Federal-Mogul's balance sheet showed a US$1.925 billion
stockholders' deficit.  At Mar. 31, 2005, Federal-Mogul's balance
sheet showed a US$2.048 billion stockholders' deficit, compared to
a US$1.926 billion deficit at Dec. 31, 2004.  Federal-Mogul
Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill,
Bradford. (Federal-Mogul Bankruptcy News, Issue No. 92;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


FIBERMARK INC: Alex Kwader Succeeds Duncan Middleton as President
-----------------------------------------------------------------
FiberMark, Inc. (OTC Bulletin Board: FMKIQ) disclosed that A.
Duncan Middleton, who has served as FiberMark's president since
January 2002, has left the company to pursue other interests.
Alex Kwader, chairman of the board and chief executive officer,
will assume Mr. Middleton's responsibilities and the position will
not be filled at this time.  Mr. Middleton will no longer serve as
a member of the Board of Directors.

Mr. Middleton's departure reflects the continuing need to balance
the company's organizational resources with the size of its
business, as well as pending chapter 11 ownership changes,
according to Mr. Kwader.  "We thank Duncan for his service and
many contributions to FiberMark during the past few years," Mr.
Kwader said.

The company has indicated that it expects to emerge from
chapter 11 by the end of 2005.  A transition to a new Board of
Directors, whose members have been named, is expected following
the company's emergence.

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

The Court approved the Debtor's Disclosure Statement related to
its Plan of Reorganization dated Sept. 8, 2005, last week.


FORD CREDIT: Credit Enhancement Prompts Fitch to Lift Ratings
-------------------------------------------------------------
Fitch Ratings has upgraded eight classes of four Ford Credit Auto
Owner Trust asset-backed transactions:

   Series 2002-D

     --Class D notes to 'A+' from 'BB+';

   Series 2003-A

     --Class C notes to 'AA+' from 'AA';
     --Class D notes to 'BBB+' from 'BB+'.

   Series 2003-B

     --Class C notes to 'AA+' from 'A+';
     --Class D notes to 'A' from 'BB+'.

   Series 2004-A

     --Class B notes to 'AA' from 'A';
     --Class C notes to 'A+' from 'BBB+';
     --Class D notes to 'BBB+' from 'BB+'.

The rating upgrades are a result of increased available credit
enhancement in excess of expected remaining losses.  Under the
credit enhancement structure, the bonds can now withstand stress
scenarios consistent with the upgraded ratings and still make full
and timely payments of principal and interest.  As before, the
ratings reflect the quality of Ford Motor Credit Co.'s retail auto
loan originations, the sound financial and legal structure of the
transactions, and servicing provided by Ford Motor Credit Co.


FRUIT OF THE LOOM: FOL Trust Prepares to Make Final Distribution
----------------------------------------------------------------
FOL Liquidation Trust, a liquidating trust established pursuant to
Fruit of the Loom, Inc., and its debtor-affiliates' Third Amended
Joint Plan of Reorganization, asks the U.S. Bankruptcy Court for
the District of Delaware to authorize and approve:

   * the final accounting for the FOL Trust,

   * the process for final distribution to creditors,

   * the reserve account for expenses associated with the
     dissolution of the FOL Trust, and

   * the contribution of certain de minimis assets to a charitable
     organization

J. Kate Stickles, Esq., at Saul Ewing LLP, in Wilmington, Delaware
tells the Court that the FOL Trust has liquidated substantially
all of the Debtors' assets and will make a final distribution to
creditors and file final tax returns.  All motions, contested
matters and other proceedings related to the FOL Trust have been
resolved.

Ms. Stickles says that the FOL Trust should also be dissolved
after the final distribution and accounting process.

The FOL Trust also asks the Court to discharge:

   (a) the FOL Trust Administrator, Avidity Partners, LLC;

   (b) the Trust Advisory Committee, including its present and
       former members:

       -- Bank of America, N.A.,

       -- Ocean Ridge Capital Advisors, LLC, and

       -- King Street Capital Advisors, LLC (a/k/a George Street
          Capital Advisors, LLC)

   (c) Scheme Administrators for Fruit of the Loom, Ltd. under the
       Scheme of Arrangement approved by the Grand Court of the
       Cayman Islands on April 25, 2002:

       -- DeWitt W. King, III,
       -- Bradley Scher, and
       -- Simon Whicker,

   (d) professionals for the FOL Trust:

       -- Milbank, Tweed, Hadley & Mccloy LLP,
       -- Saul Ewing LLP, and
       -- Bell, Boyd & Lloyd LLC, and

   (e) professional for the Trust Advisory Committee:

       -- Moore & Van Allen, PLLC,
       -- KPMG

The FOL Trust also wants the Debtors' administrative obligations
transferred to the NWI Trust, a Trust created under the Debtors'
Plan.

The Court will consider granting the FOL Trust's request on
October 5, 2005.

Headquartered in Chicago, Illinois, Fruit of the Loom, Inc., is a
leading international, vertically integrated basic apparel
company, emphasizing branded products for consumers ranging from
infants to senior citizens.  The Company and its debtor-affiliates
filed for chapter 11 protection on Dec. 29, 1999 (Bankr. D. Del.
Case No. 99-04497).  Aaron A. Garber, Esq., at Pepper Hamilton LLP
and Donald J. Detweiler, Esq., at Saul Ewing LLP represent the
Debtors.  When the Debtors filed for protection from their
creditors, they listed $2,283,700,000 in total assets and
$2,495,200,000 in total debts.  The Court confirmed the Debtors'
Third Amended Joint Plan of Reorganization on April 19, 2002,
under which Berkshire Hathaway purchased substantially all of the
company's assets and Berkshire's money is distributed to the
Debtors' creditors.  The Plan took effect on April 30, 2002.


HERTZ CORP: S&P Revises CreditWatch Implications to Negative
------------------------------------------------------------
Standard & Poor's Ratings Services revised its CreditWatch
implications on Hertz Corp. to negative from developing, after the
announcement by Ford Motor Co. (BB+/Negative/B-1), Hertz's parent,
that it had reached a definitive agreement to sell Hertz to an
investor group for approximately $15 billion, including debt,
rather than divesting Hertz through an IPO.

Ratings on Hertz, including the 'BBB-' corporate credit rating,
were placed on CreditWatch on April 21, 2005.  The sale of Hertz
includes:

   * proceeds of $5.6 billion to be received by Ford for its
     equity ownership;

   * the exchange of $2.4 billion of Hertz debt into Ford Motor
     Credit debt; and

   * the refinancing of certain of Hertz's other debt.

At June 30, 2005, Hertz had $10.8 billion of balance sheet debt,
including a $1.2 billion note payable to Ford.

"Hertz's sale will likely result in a weaker financial profile,"
said Standard & Poor's credit analyst Betsy Snyder.  "Even if the
company were to maintain similar leverage, the composition of its
debt would likely change, to include a higher level of secured
debt, resulting in reduced financial flexibility," she continued.

Resolution of the CreditWatch will focus on the new owners'
operating and financial plans for Hertz.

The ratings on Park Ridge, New Jersey-based Hertz incorporate its
strong competitive position in car rentals, and a fairly strong
financial profile on a stand-alone basis, pre-acquisition.  Hertz,
the largest global car rental company, participates primarily in
the business and leisure rental segment of the car rental
industry.  This segment generates a significant portion of its
revenues from transactions at airport locations, in which demand
has recovered since 2003.  Hertz has also grown its local (non-
airport) business, the segment of the car rental business that has
remained more profitable, and which Enterprise Rent-A-Car Co.
dominates.


HIGH VOLTAGE: Robicon Settles Toshiba's Claims
----------------------------------------------
The Hon. Joan N. Feeney of the U.S. Bankruptcy Court for the
District of Massachusetts, Eastern Division, approved the
stipulation allowing Toshiba International Corporation's $129,377
claim against Robicon Corporation.  Robicon is a debtor-affiliate
in the jointly administered chapter 11 cases of High Voltage
Engineering Corporation and its affiliates.

Toshiba initially asserted the $129,377 claim in Robicon's first
chapter 11 filing in 2004.  The claim covers Toshiba's costs in
defending a patent-infringement lawsuit filed by Robicon in the
U.S. District Court for the Western District of Pennsylvania.

The Debtor had alleged that Toshiba's Tosvert Medium Voltage Drive
product was an exact copy of its commercial drive product and
called Toshiba's drive a "Roboclone."  The District Court found
that that there was no literal infringement of the patent and
entered a judgment in Toshiba's favor.

The Debtor objected to the District Court's decision and
subsequently filed an appeal with the U.S Court of Appeals for the
Federal Circuit.  The Bankruptcy Court deferred its ruling on the
allowance and amount of Toshiba's claim pending the Court of
Appeal's decision.  In March 2005, the Court of Appeals dismissed
the Debtor's appeal for lack of jurisdiction.

Following the Court of Appeal's decision, Toshiba asserted the
same claim in the Debtor's second chapter 11 filing.  Toshiba says
its claim is partially secured by funds held in reserve by chapter
11 Trustee Stephen S. Gray for the benefit of unpaid creditors in
the Debtors' first chapter 11 cases.

Pursuant to the stipulation, the claim filed by Toshiba in the
Debtor's second chapter 11 case will allowed as a general
unsecured claim for $129,377.  The stipulation resolves all
matters concerning Toshiba's claims in the Debtor's first chapter
11 filing.

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

     http://www.researcharchives.com/bin/download?id=050914041835

Headquartered in Wakefield, Massachusetts, High Voltage
Engineering Corporation -- http://www.asirobicon.com/-- owns and
operates a group of three industrial and technology based
manufacturing and services businesses.  HVE's businesses focus on
designing and manufacturing high quality applications and
engineered products which are designed to address specific
customer needs.  The Debtor filed its first chapter 11 petition on
March 1, 2004 (Bankr. Mass. Case No. 04-11586).  Its Third Amended
Joint Chapter 11 Plan of Reorganization was confirmed on July 21,
2004, allowing the Company to emerge on Aug. 10, 2004.

High Voltage filed its second chapter 11 petition on Feb. 8, 2005
(Bankr. Mass. Case No. 05-10787).  S. Margie Venus, Esq., at Akin,
Gump, Strauss, Hauer & Feld LLP, and Douglas B. Rosner, Esq., at
Goulston & Storrs, represent the Debtors in their restructuring
efforts.  In the Company's second bankruptcy filing, it listed
$457,970,00 in total assets and $360,124,000 in total debts.
Stephen S. Gray was appointed chapter 11 Trustee in February 2005.
John F. Ventola, Esq., and Lisa E. Herrington, Esq., at Choate,
Hall & Stewart LLP represents the chapter 11 Trustee.


HUDSON VALLEY: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Hudson Valley Care Centers, Inc.
        dba Green Manor Nursing Home
        dba Green Manor Adult Home
        1 Whittier Way
        Ghent, New York 12075

Bankruptcy Case No.: 05-16436

Type of Business: The Debtor operates a nursing home.

Chapter 11 Petition Date: September 13, 2005

Court: Northern District of New York (Albany)

Judge: Robert E. Littlefield Jr.

Debtor's Counsel: Michael D. Assaf, Esq.
                  O'Connell and Aronowitz
                  54 State Street, 9th Floor
                  Albany, New York 12207
                  Tel: (518) 462-5601
                  Fax: (518)-427-6988

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

Estimated Debts:  $10 Million to $50 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                        Nature of Claim    Claim Amount
   ------                        ---------------    ------------
Greenleaf VI, Inc.                                   $23,900,121
P.O. Box 5999
Christiansted, VI 00823-5999

Columbia County Industrial       Payments due           $530,760
Development Agency               in lieu of tax
444 Warren Street                agreement
Hudson, NY 12534

State Insurance Fund             Worker's               $496,000
NYAHSA Services Inc.             compensation
Self Insurance Trust             contributions and
150 State Street, Suite 301      assessments
Albany, NY 12207

Unlimited Care                   Trade Debt             $104,816
222 Bloomingdale Road, #402
White Plains, NY 10605

Any Time Home Care Inc.          Trade Debt              $52,655
P.O. Box 995
Nyack, NY 10960

Health System Services           Trade Debt              $38,337
4827 Tomson Avenue
Niagara Falls, NY 14304

Northeast Ventilator Rentals     Trade Debt              $25,183
98 Everett Road
Albany, NY 12203

New York Oncology Hematology, PC Trade Debt              $23,422
P.O. Box 18259
Newark, NJ 07191

Statewide Machinery, Inc.        Trade Debt              $19,808
60 Pixley Industrial Parkway
Rochester, NY 14624

Curt's Lawn & Excavating         Trade Debt              $16,690
Service, Inc.
461 CR 19
Hudson, NY 12534

Cardinal Health Medical          Trade Debt              $15,528
Products & Services
P.O. Box 18362
Newark, NJ 07188

Greenport Rescue Squad           Trade Debt              $12,211
P.O. Box 275
Hudson, NY 12534

Visiting Nursing Care            Trade Debt              $11,378
855 Central Avenue, Suite 300A
Albany, NY 12206

Register Star                    Trade Debt              $10,339
P.O. Box 484
Catskill, NY 12414

Perkins Network Services         Trade Debt               $5,625
630 John Hancock Road
Taunton, MA 02780

Daily Freeman                    Trade Debt               $4,883
7997 Hurley Avenue
Kingston, NY 12401

Ecolab                           Trade Debt               $4,199
P.O. Box 905327
Charlotte, NC 28920

Mobile Imaging                   Trade Debt               $3,931
6400 Collamer Road
East Syracuse, NY 13057

Language Fundamentals Inc.       Trade Debt               $2,864
5 Old Grange Road
Hopewell Junction, NY 12533

Twin County Medical              Trade Debt               $3,093
Associates, PC
848 Columbia Street
Hudson, NY 12534


INTERSTATE BAKERIES: Can Walk Away From 9 Real Estate Leases
------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Missouri
gave Interstate Bakeries Corporation and its debtor-affiliates
permission to reject nine non-residential real property leases
effective as of July 29, 2005, to reduce postpetition
administrative costs:

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

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

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

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

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

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

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

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

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

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

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


INTERSTATE HOTELS: Moody's Affirms B2 Corporate Family Rating
-------------------------------------------------------------
Moody's Investors Service affirmed the B2 Corporate Family Rating
of Interstate Hotels & Resorts, and changed the rating outlook to
positive.  The B2 senior secured credit facility rating of
Interstate Operating Company, L.P., Interstate's main operating
subsidiary, was also affirmed.

According to the rating agency, the positive rating outlook
reflects the company's success in growing its hotel management
business as well as diversifying its business away from MeriStar
Hotels & Resorts and the prospect for further performance
improvement.  The credit facility is secured by a perfected first
lien on substantially all of the assets of Interstate and its
subsidiaries.

Interstate Hotels has been successful in acquiring long-term
management contracts, exemplified by gaining the management
contract on 54 hotels owned by Sunstone Hotel Properties.  In
addition, Interstate Hotels is actively involved in sourcing and
underwriting hotel acquisition deals for third parties, which is
also helping to drive contract growth.  This successful growth has
resulted in reduced reliance on management fees from MeriStar.

Moody's B2 rating continues to reflect Interstate Hotel's limited
franchise in the hotel management business relative to major brand
managers such as Marriott, Starwood and Hilton, though the firm is
the largest independent hotel management company.  The rating also
incorporates Interstate Hotel's exposure to:

   * the endemic cyclically of the lodging industry;

   * recent management turnover;

   * execution risk associated with its joint venture hotel
     property investment strategy;

   * constrained access to capital markets; and

   * probable low post-distress recovery given the lack of
     hard assets.

These weaknesses are mitigated by:

   * the company's good operating platform;

   * stable cash flows from management contracts (relative to the
     more volatile hotel revenues);

   * ability to manage through the recent severe lodging
     downcycle; and

   * sound diversification by geography, hotel segment, hotel
     owner and brand affiliation.

Performance of hotels managed by Interstate Hotels is improving,
reflecting continued recovery in the lodging industry.  Finally,
through the sale of BridgeStreet's Toronto operations, Interstate
Hotels has reduced its exposure to the corporate housing business,
which Moody's believes to be peripheral to its core hotel
management business.

Moody's indicated that an upgrade to B1 would likely result from
growth in Interstate Hotel's lodging-based revenues exceeding $100
million, and further reduction in the portion of revenues coming
from MeriStar.  The rating agency would also view as positives net
debt of around 2.5X EBITDA on an annualized basis, and measured
growth in ownership, either direct or through joint ventures, of
managed hotel assets.

A return to a stable rating outlook would likely result from any
meaningful loss in contracts, which if not replaced precipitates a
sustained decline in EBITDA of 10% or more, or a rise in MeriStar
exposure.

These ratings were affirmed with a positive outlook:

  Interstate Hotels & Resorts, Inc.:

     -- B2 Corporate Family Rating

  Interstate Operating Company, L.P.:

     -- B2 senior secured bank credit facility

In its last rating action, Moody's assigned a Corporate Family
Rating of B2 with a stable outlook on August 19, 2004.

Interstate Hotels & Resorts, Inc. [NYSE: IHR] is headquartered in
Arlington, Virginia, USA, and operates more than 300 hospitality
properties with nearly 69,000 rooms in:

   * 41 states,
   * the District of Columbia,
   * Canada, and
   * Russia.

BridgeStreet Worldwide, an Interstate Hotels subsidiary, is one of
the world's largest corporate housing providers.  BridgeStreet and
its partners offer more than 8,700 corporate apartments located in
91 MSAs throughout the USA and internationally.


J. CREW GROUP: Earns $2 Million of Net Income in June 30
--------------------------------------------------------
J.Crew Group, Inc. reported that its operating income for the
thirteen weeks ended July 30, 2005 increased by 150% to $20
million, compared to $8 million in the comparable period last
year.  This increase was driven primarily by a 22% increase in
revenues and higher gross margins.

Millard Drexler, Chairman and CEO, said, "We are pleased with our
customer's response to our continuing focus on quality, styling,
and craftsmanship combined with our customer service initiatives."

Consolidated revenues for the thirteen weeks ended July 30, 2005
increased 22% to $229 million from $188 million last year.  Store
sales (Retail and Factory stores) increased by 17% to $163
million, compared to $139 million last year.  Comparable store
sales increased by 15%.  Direct sales (Internet and Catalog)
increased by 35% to $58 million, as compared to $43 million last
year.

Gross margin increased to 42% of revenues in the second quarter,
compared to 39% last year.  The increase was primarily
attributable to lower markdowns in all sales channels.

Selling, general and administrative expenses during the quarter
were $77 million, or 34% of revenues vs. $66 million or 35% in the
prior year period.

Net income for the second quarter increased by $16 million to $2
million, compared to a net loss of $14 million in the prior year.
This increase resulted from the $12 million increase in operating
income and a $4 million decrease in interest expense as a result
of debt refinancing in the fourth quarter of 2004.

Consolidated revenues for the twenty-six weeks ended July 30, 2005
were $440 million compared to $334 million last year, an increase
of 32%.  Store sales increased by 27% to $308 million from $243
million, as comparable store sales increased by 24%.  Direct sales
increased by 48% to $118 million from $80 million last year.
Direct sales in the first half of 2004 were adversely impacted by
reduced inventory levels.

Gross margin for the twenty-six weeks ended July 30, 2005
increased to 44% of revenues compared to 40% last year, resulting
from a decrease in buying and occupancy costs as a percentage of
revenues and lower markdowns across all channels.

Selling, general and administrative expenses for the twenty-six
weeks ended July 30, 2005 increased to $150 million, or 34% of
revenues, from $130 million, or 39% last year.

Operating income for the twenty-six week period was $43 million
compared to $5 million last year, an improvement of $38 million.
Net income for the first half of 2005 was $7 million, compared to
a loss of $38 million last year.

Inventory at July 30, 2005 was $111 million, an increase of 18%
over the prior year.  There were no outstanding borrowings under
the Company's working capital facility during the first half of
2004 or 2005.

                        Proposed IPO

On August 17, 2005, the Company filed a Registration Statement on
Form S-1 with the U.S. Securities and Exchange Commission relating
to the proposed initial public offering of its common stock.

J.Crew Group, Inc. is a nationally recognized multi-channel
retailer of quality women's and men's apparel, shoes and
accessories.  The Company operates 156 retail stores, the J.Crew
catalog business, j.crew.com and 44 factory outlet stores.

                     *     *     *

As reported in the Troubled Company Reporter on Aug. 23, 2005,
Standard & Poor's Ratings Services placed its ratings on J. Crew
Group Inc., including its 'B-' corporate credit rating, on
CreditWatch with positive implications.

The ratings on J. Crew Corp. and J. Crew Intermediate LLC were
also placed on CreditWatch with positive implications.  J. Crew
had total debt (including preferred stock that is mandatorily
redeemable in 2009) of about $577 million as of April 30, 2005.

The CreditWatch listing follows J. Crew's S-1 filing with the SEC
for an IPO of its common stock of up to $200 million.


JERNBERG INDUSTRIES: Court Okays Carson Fischer as Co-Counsel
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
gave Jernberg Industries, Inc., and its debtor-affiliates
permission to employ Carson Fischer, P.L.C., as co-counsel in the
chapter 11 restructuring.

As previously reported in the Troubled Company Reporter on
July 4, 2005, Joseph M. Fischer, Esq., a partner at Carson
Fischer, discloses that the Firm received a $100,000 retainer.
Mr. Fischer charges $595 per hour for his services.

Mr. Fischer reports Carson Fischer's professionals bill:

      Professional             Designation    Hourly Rate
      ------------             -----------    -----------
      Robert A. Weisberg       Partner           $475
      William C. Edmunds       Partner           $475
      Lawrence A. Lichtman     Partner           $425
      Christopher A Grossman   Associate         $275
      Patrick J. Kukla         Associate         $175
                               Law Clerks        $110

Headquartered in Chicago, Illinois, Jernberg Industries, Inc., --
http://www.jernberg.com/-- is a press forging company that
manufactures formed and machined products.  The Company and its
debtor-affiliates filed for chapter 11 protection on June 29, 2005
(Bankr. N.D. Ill. Case No. 05-25909).  When the Debtors filed for
protection from their creditors, they estimated assets and debts
of $10 million to $50 million.


JERNBERG INDUSTRIES: Court Okays Jenner & Block as Lead Counsel
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois
gave Jernberg Industries, Inc., and its debtor-affiliates
permission to employ Jenner & Block LLP as their general
bankruptcy counsel.

As previously reported in the Troubled Company Reporter on
July 4, 2005, Mark K. Thomas, Esq., a Partner at Jenner & Block,
is one of the lead attorneys for the Debtors.  Mr. Thomas
discloses that the Firm received a $480,000 retainer.  Mr. Thomas
charges $625 per hour for his services.

Mr. Thomas reports Jenner & Block's professionals bill:

    Professional            Designation   Hourly Rate
    ------------            -----------   -----------
    Michael S. Terrien      Partner          $495
    Jerry L. Switzer, Jr.   Partner          $465
    Brian I. Swett          Partner          $475
    Edward J. Neveril       Partner          $425
    Elizabeth A. Davidson   Partner          $410
    Michael C. Rupe         Partner          $410
    Peter J. Young          Associate        $275
    David M. Kavanaugh      Associate        $215
    Andrew J. Olejnik       Associate        $215
    Michael H. Matlock      Paralegal        $210

    Designation           Hourly Rate
    -----------           -----------
    Partners              $410 - $750
    Associates            $215 - $390
    Paralegals            $150 - $210
    Project Assistants       $110

Headquartered in Chicago, Illinois, Jernberg Industries, Inc., --
http://www.jernberg.com/-- is a press forging company that
manufactures formed and machined products.  The Company and its
debtor-affiliates filed for chapter 11 protection on June 29, 2005
(Bankr. N.D. Ill. Case No. 05-25909).  When the Debtors filed for
protection from their creditors, they estimated assets and debts
of $10 million to $50 million.


KAISER ALUMINUM: Will Pay USWA Experts' Fees Under Revised Pact
---------------------------------------------------------------
Judge Fitzgerald authorizes the Kaiser Aluminum Corporation and
its debtor-affiliates to reimburse United Steelworkers of
America's professional fees and expenses pursuant to the terms of
the Revised Fee Agreement.

As reported in the Troubled Company Reporter on July 29, 2005, the
Debtors and the United Steelworkers of America, AFL-CIO/CLC,
originally agreed on the $600,000 fee limit in 2003, the parties
were anticipating professional fees relating only to negotiations
on a potential restructuring of retiree medical and pension
liabilities, Daniel J. DeFranceschi, Esq., at Richards, Layton &
Finger, in Wilmington, Delaware, relates.

In April, May and June 2005, the Debtors and the USWA negotiated
new long-term collective bargaining agreements.

Mr. DeFranceschi further relates that the USWA and its advisors
expended a substantial amount of time and effort relating to the
settlement reached between the Debtors and the Official Committee
of Unsecured Creditors regarding intercompany claims and related
intercompany issues.

Mr. DeFranceschi notes that the Intercompany Claims Settlement was
necessary for the 1113/1114 Agreement to have finality because the
Debtors and the USWA each had the right under the agreement to
terminate it if the intercompany issues were not resolved in a
satisfactory manner.

The negotiations and work related to the Intercompany Claims
Settlement spanned over nine months, the USWA took the lead in
representing KACC's creditors.

Although the U.S. Bankruptcy Court for the District of Delaware
approved the Creditor Committee's application for payment of fees
and expenses in connection with the Intercompany Claims
Settlement, the application specifically noted that fees and
expenses were not being sought on the USWA's behalf because a
separate application would be made, including those incurred in
connection with the Intercompany Claims Settlement.

Because of the substantial work that has been and will be required
to address those complex issues, the USWA and the Debtors agreed
that:

   (1) Subject to an overall limit of $2,000,000, KACC will
       reimburse the USWA for the reasonable fees and out-of
       pocket expenses incurred by:

       * the investment banker, Leon Potok, through his
         affiliated companies, whose cumulative fees will be at
         the agreed rate of $40,000 per month;

       * the bankruptcy and labor counsel, Cohen, Weiss and
         Simon, LLP;

       * the corporate law counsel, Arnold & Porter; and

       * the actuarial consultant, Martin E. Segal & Co.

   (2) All reasonable fees and out-of-pocket expenses incurred by
       those professionals in connection with the Intercompany
       Claims Settlement will be included in the $2,000,000
       aggregate limit, and those fees and expenses will not be
       included in the fee application contemplated by the
       Intercompany Claims Settlement.

   (3) KACC is not agreeing, pursuant to the Revised Fee
       Agreements, to pay any fees and expenses of any
       professional or other entity providing services in
       connection with the Union VEBA, including, without
       limitation, services provided by labor, pension and
       benefits counsel, Bredhoff & Kaiser.

   (4) As of March 31, 2005, the USWA has invoiced $568,826 on
       KACC for professional fees and expenses, which amount will
       be credited against the $2,000,000 limit.

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


LOGAN INTERNATIONAL: Hires Christensen King as Accountants
----------------------------------------------------------
Logan International II LLC and its debtor-affiliate sought and
obtained authority from the U.S. Bankruptcy Court for the District
of Oregon to employ Christensen, King & Associates as their
accountant.

Christensen King will:

    (a) provide general accounting services;

    (b) prepare operating and cashflow forecasts and reports;

    (c) provide the Debtors with advice regarding tax issues; and

    (d) assist the Debtors in formulating a business plan in
        support of the Debtors' plan of reorganization.

The Debtors tell the Court that the Firm's professionals bill:

     Accountant          Position          Hourly Rate
     ----------          --------          -----------
     Robert McBride      Partner               $170
     Scott Bronson       Senior Accountant     $150
     Jill Crowther       Accountant             $80

The Debtors disclosed that one year prior to the petition date,
the Firm was paid a total of $6,693 for accounting services
provided to the Debtors.

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

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


MARK IV: S&P Affirms B+ Corporate Credit Rating & Other Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating and all other ratings on Mark IV Industries Inc.
At the same time, the ratings were removed from CreditWatch, where
they were placed with negative implications on July 25, 2005.

The outlook is negative.  At May 31, 2005, consolidated debt
totaled about $1.1 billion.

"The ratings on Amherst, New York-based Mark IV reflect the firm's
aggressively leveraged balance sheet, weak debt protection
measures, and exposure to the cyclical and highly competitive
original equipment automotive market," said Standard & Poor's
credit analyst Daniel R. DiSenso.  "These weaknesses are somewhat
mitigated by good geographic diversification and market positions
in certain niche segments of the automotive supply, industrial,
and transportation industries."

Following the company's June 2004 recapitalization, debt levels
remain elevated and credit measures remain stretched.  Standard &
Poor's expected Mark IV to generate sizable positive free cash
flow (FCF) to be earmarked for debt reduction.  For fiscal 2005
(ended Feb. 28, 2005), Mark IV generated only $15 million of FCF,
and for the first quarter of fiscal 2006 FCF was a negative
$31 million.

However, cash generation is expected to strengthen, especially in
the second half of the fiscal year.  At May 31, 2005, adjusted
debt to EBITDA stood at about 5.5x (leverage was lower, according
to bank covenant calculations).  Although Mark IV will be required
to make large mandatory cash contributions to its pension plans
over the next three years (it has made only minimal cash
contributions to these plans in the past few years), the company
should have sufficient liquidity to make such payments, assuming
cash generation does not deteriorate.  Given the generally
favorable business conditions in the company's industrial and
transportation segments, and given also the benefits of the
company's rationalization and cost-reduction actions, Mark IV
should generate some positive FCF, and credit measures should
strengthen.  Over the next one to two years, adjusted debt to
EBITDA should decline to about 5x, and the company should maintain
EBITDA interest coverage of at least 2x.

Mark IV product offerings consist of:

   * power transmission systems,
   * fuel and fluid handling, and
   * air-intake systems for the:

     -- automotive,
     -- heavy-duty truck, and
     -- off-highway vehicle markets.

The company also offers:

   * power trains (small diesel engines and transmissions for
     industrial applications),

   * electronic toll systems,

   * signs,

   * display systems, and

   * lighting for transportation markets.

Mark IV's revenue contribution by market is:

   * automotive original equipment (OE; 47%);
   * automotive aftermarket (16%);
   * heavy-duty truck and off-highway vehicles (7%);
   * industrial (16%); and
   * transportation (14%).


MASON COOK: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Mason & Jewel Cook
        dba Willits Towing & Recovery, LLC
        dba Willits Automotive Service
        dba Willits Big O Tires
        dba Mason & Jewel Cook, LLC
        P.O. Box 630
        Willits, CA 95490

Bankruptcy Case No.: 05-12491

Chapter 11 Petition Date: September 13, 2005

Court: Northern District of California (Santa Rosa)

Judge: Alan Jaroslovsky

Debtor's Counsel: David N. Chandler, Esq.
                  Law Offices of David N. Chandler
                  1747 4th Street
                  Santa Rosa, California 95404
                  Tel: (707) 528-4331

Estimated Assets: $500,000 to $1 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                                      Claim Amount
   ------                                      ------------
   Lloyd & Margaret Cook                           $100,000
   2112 Key West Lane
   Modesto, CA 95350

   Ann Koch                                         $80,000
   P.O. Box 659
   Willits, CA 95490

   Ralph Snyder                                     $60,000
   925 South 12th Street
   Adel, IA 50003

   Willits Cardlock                                 $56,061

   Premium Assignment Corp.                         $56,000

   Rita Santos                                      $30,000

   State Fund Comp. Ins.                            $20,637

   Cintas Corp.                                     $16,100

   SBC Smart Yellow Pages                           $12,633

   Chase Bank                                       $10,183

   Bank Americard                                    $8,300

   David Riemenschneider                             $8,087

   Charter Sales Company                             $7,500

   Safety Kleen Corp.                                $7,330

   Herbert L. Terreri                                $7,290

   Verizon Wireless                                  $4,873

   Johnsons Mobile Solutions                         $3,288

   Eureka Oxygen Co.                                 $3,000

   Ampac Tire Distributors                           $3,000

   Ukiah Auto Dismantlers                            $3,000


MILLENNIUM AMERICA: Noteholders Tender $281 Mil. of 7% Sr. Notes
----------------------------------------------------------------
Millennium America Inc. disclosed that, as of 5:00 p.m., EDT Time,
on Monday, Sept. 12, 2005, a total of approximately $281 million
in aggregate principal amount of its 7.00% Senior Notes due 2006
have been tendered pursuant to its tender offer for up to
$350 million principal amount of Notes.

The total consideration per $1,000 principal amount of Notes
validly tendered on or prior to the Early Tender Date is
$1,026.22, of which $30 is the early tender payment.  The total
consideration for the Notes was determined as of 2:00 p.m. EDT, on
Sept. 13, by reference to a fixed spread of 75 basis points above
the bid-side yield to maturity of the 3-1/2% U.S. Treasury Note
due Nov. 15, 2006; the Reference Yield and Offer Yield are 3.842%
and 4.592%, respectively.

Holders who tender notes after the Early Tender Date will receive
the total consideration minus the $30 per $1,000 principal amount
early tender payment.  In addition, accrued and unpaid interest on
the Notes up to, but not including, the settlement date for the
Offer, which is expected to be on or about Sept. 27, 2005, will be
paid in cash on all validly tendered Notes accepted for purchase.

The Offer will expire at midnight EDT on Monday, Sept. 26, 2005,
unless extended or earlier terminated by Millennium.  Withdrawal
rights with respect to tendered Notes have expired.  Accordingly,
holders may not withdraw any Notes previously or hereafter
tendered, except as contemplated in the Offer.

The complete terms and conditions of the Offer are set forth in
the Offer to Purchase dated Aug. 29, 2005, which has been sent to
holders of Notes.

Banc of America Securities is the exclusive dealer manager for the
Offer. Questions regarding the Offer may be directed to Banc of
America Securities LLC, High Yield Special Products, at 888-292-
0070 (U.S. toll-free) and 704-388-4813 (collect).  Copies of the
Offer to Purchase and Letter of Transmittal may be obtained from
the Information Agent for the Offer, D.F. King & Co., Inc., at
800-758-5378 (U.S. toll-free) and 212-269-5550 (collect).

Millennium America Inc. is a wholly owned subsidiary of Millennium
Chemicals Inc., a major international producer of chemicals
including titanium dioxide (TiO2).  Millennium Chemicals Inc. is a
wholly owned subsidiary of Lyondell Chemical Company (NYSE: LYO).

                        *     *     *

As reported in the Troubled Company Reporter on Aug. 12, 2005,
Fitch Ratings has assigned a 'BB+' to the new US$250 million five-
year guaranteed secured bank facility of Millennium America with
Millennium Inorganic Chemicals, a co-borrower under the facility.

This facility replaces an existing secured credit facility that
was due to mature in June 2006 that was also rated 'BB+'.  Both
Millennium America Inc. and MICL are subsidiaries of Millennium
Chemicals, Inc., which is a subsidiary of Lyondell Chemical.

In addition, Fitch affirms Millennium America's senior unsecured
notes at 'BB' as well as Millennium Chemical's convertible senior
unsecured debentures rating at 'BB'.  Millennium's Issuer Default
Rating is 'B+'.  Fitch said the rating outlook remains stable.


MIRANT CORP: Wants to Sell Two HRS Generators to Belyea for $2 Mil
------------------------------------------------------------------
Before they filed for bankruptcy protection, Mirant Corporation
and its debtor-affiliates, including Mirant Wyandotte, LLC,
implemented a generation capacity growth strategy pursuant to
which they purchased various new turbine generators and ancillary
equipment for the purpose of constructing additional power
generation facilities.

As a result of a downturn in the merchant energy sector, as well
as the Debtors' need to focus on liquidity, the Debtors suspended
construction on certain projects, including the Wyandotte project
for which two heat recovery steam generators were originally
purchased.

The Debtors have recently received the U.S. Bankruptcy Court for
the Northern District of Texas' authority to sell certain
combustion gas turbines and transformers that were originally
purchased for the Wyandotte project.

The HRS Generators were specifically configured to meet the
technical requirements of the Wyandotte project.

Because the Wyandotte project has been terminated, the Debtors no
longer have any productive use for the HRS Generators.

The Debtors determined that retaining the HRS Generators, either
for use in other projects or for future disposition, is costly.
After extensive analysis, they decided to market the HRS
Generators for sale.

                      Marketing Process

PennEnergy, Inc., and Thomassen Amcot International helped the
Debtors market the HRS Generators, along with other equipment,
beginning in May 2004.

Belyea Company, Inc., offered to buy the two HRS Generators for
$2 million.  Belyea, a surplus power equipment broker, intended
to facilitate the purchase of the HRS Generators for DP Leasing
L.L.C. and another party.

The Debtors, in consultation with their advisors, concluded that
Belyea's offer represented a commercially reasonable offer for
the HRS Generators.

During the negotiations, Belyea, DP Leasing and the Debtors
determined that DP Leasing should enter into its own agreement
with the Debtors for the purchase and sale of one of the HRS
Generators.

Thus, the Debtors ask the Court to approve the sale of the HRS
Generators and certain other related equipment to Belyea and DP
Leasing, pursuant to separate Purchase and Sale Agreements dated
August 29, 2005.

                   Terms of the Sale Agreements

The Sale Agreements with Belyea and DP Leasing contain similar
terms and conditions:

A. Purchase Price

    The Purchase Price for each HRS Generator is $1,000,000.

B. Deposit

    Belyea and DP Leasing will each pay to the Debtors a $100,000
    deposit.  In the event the Court does not approve the sale of
    the HRS Generators, Mirant will return the Deposit.

C. Closing Date

    The Closing Date will be three days after the Court approves
    the sale.

E. Remaining Purchase Price

    Belyea and DP Leasing will each pay the remaining net amount
    of the Purchase Price, minus $60,000 associated with Mirant's
    avoided transportation access-related costs, on the Closing
    Date.

F. Delivery Terms

    Mirant will deliver the title of the HRS Generators to Belyea
    and DP Leasing at Closing, "as is" and "where is."

G. Taxes

    Belyea and DP Leasing will each bear all Taxes associated with
    the sale.

H. HRS Generator Storage and Maintenance

    In the event Belyea and DP Leasing do not remove the HRS
    Generators on the relevant Closing Date, Mirant agrees to
    provide storage space and maintenance at a cost to Belyea and
    DP Leasing of:

     (i) $150 per day for up to 60 days after the Closing; and

    (ii) $850 per day for the period commencing 61 days after the
         Closing.

    Mirant will have the right to remove the HRS Generators from
    the Site at the expiration of the 90-day period at Belyea's
    and DP Leasing's expense.

I. Termination

    Any Party may terminate the Sale Agreement by written notice
    if there has been a material violation by the other Party,
    which has prevented the satisfaction of any condition to the
    obligations of Belyea and DP Leasing, and which has not been
    cured within 30 days after receipt of written notice.

    Termination will be without prejudice to any other rights of
    the Parties and will not otherwise relieve the Parties of any
    unfulfilled obligation or liability incurred under the Sale
    Agreement prior to termination.

J. General Release

    Except for Mirant's obligations under the Sale Agreement,
    effective as of the Closing Date, Belyea and DP Leasing will
    waive and release Mirant from any and all losses that may
    arise on account of the HRS Generators.

K. Indemnification

    Belyea or DP Leasing will indemnify, defend, and hold Mirant
    harmless from any and all claims of any kind suffered,
    incurred or paid in connection with:

    (1) Belyea's or DP Leasing's responsibilities under the Sale
        Agreement;

    (2) Belyea's or DP Leasing's transport of the HRS Generator;

    (3) Belyea's or DP Leasing's exercise of its right to inspect
        the HRS Generator;

    (4) any and all losses or damage to the HRS Generator, the
        Site, inter alia, caused by Belyea or DP Leasing during
        performance of its Sale Agreement.

Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- is a competitive energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines.  Mirant owns or leases more than 18,000
megawatts of electric generating capacity globally.  Mirant
Corporation filed for chapter 11 protection on July 14, 2003
(Bankr. N.D. Tex. 03-46590).  Thomas E. Lauria, Esq., at White &
Case LLP, represents the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $20,574,000,000 in assets and $11,401,000,000 in debts.
(Mirant Bankruptcy News, Issue No. 76; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


MIRANT CORP: Shareholder Insists Equity Holders Are In the Money
----------------------------------------------------------------
Terry Zerngast, a shareholder in Mirant Corporation tells the U.S.
Bankruptcy Court for the Northern District of Texas that the
report of William K. Snyder, the chapter 11 examiner appointed in
Mirant Corporation and its debtor-affiliates' chapter 11 cases, is
incorrect.

The Examiner's Seventh Interim Report focused on:

   a. the enterprise value of the estates of Mirant Corporation
      and its debtor affiliates;

   b. the investigation of the Debtors' estimation of the
      total claims -- the "claims hurdle" -- that must be
      satisfied before residual value may be distributed to
      shareholders and the holders of 6.25% Junior Subordinated
      Convertible Debentures due 2030; and

   c. certain issues relating to the compensation of
      professionals.

A full-text copy of the Chapter 11 Examiner's Seventh Interim
report is available for free at:

         http://bankrupt.com/misc/7thExaminerReport.pdf

Mr. Zerngast believes that the shareholders and subordinated debt
holders will be entitled to a distribution if actual claims exceed
$11 billion.

Mr. Zerngast points out that assets will be increasing at a rate
faster than the accrual of interest.  "The EBITDA of Mirant is in
excess of an annual rate of approximately $1,300,000,000.  The
total annual fully accrued interest expense on the above $11
billion of claims is less than $616,000,000 as stated on [its
Form 10-Q ending June 30, 2005].  Therefore, there is an excess
of EBITDA over total interest expense of $684,000,000 annually."

"The period from June 30 to December 31, 2005, (date of
emergence) is six months or one-half of a year," Mr. Zerngast
continues.  "During [the] six-month period the only interest
expense that will be paid is $60,000,000 by non-debtors and the
Cash Paid Income Taxes are projected to be $35,000,000.
Therefore, one could reasonably expect that cash or cash invested
of $555,000,000 will be added to asset values by December 31,
2005: EBITDA minus Cash paid interest minus Cash Paid Income
Taxes ($650,000,000 - $60,000,000 - $35,000,000)."

Mr. Zerngast projects a $722,000,000 EBITDA.  "Of this cash
inflow, a net of $168,300,000 is scheduled by [Mirant] to be
invested in Capital Expenditures and Acquisitions, $85,800,000 is
scheduled by [Mirant] to be invested in Long-term Debt reduction,
and the net addition to Cash is projected to be $372,900,000."

Mr. Zerngast contends that these investments add to equity value
because:

     * Debt repayment adds because there is less debt;

     * Capital Expenditure is an investment into the productive
       assets of the business -- its value is exactly equal to the
       amount expended; and

     * Additions to Cash provide more available cash on hand.

Mr. Zerngast projects that the total addition to asset value is
$627,000,000.

Mr. Zerngast notes that Judge Lynn allowed in his instructions
for the valuation recalculation, $115,000,000 as Assets Held for
Sale.  "However, that amount is significantly larger," Mr.
Zerngast says.

In the June 2005 financial statements, Mr. Zerngast points out
that Mirant restates its December 31, 2004, financial statement
information to provide $61,000,000 more in Assets Held for Sale.

Additionally, since Judge Lynn was provided information, the
Enron receivable that was considered to have no value has been
settled and Mirant will receive $22,000,000, Mr. Zerngast says.
"When [the] Enron receivable is added to the corrected Assets
Held for Sale amount, the total number is $146,000,000 instead of
$115,000,000; this is a $31,000,000 increase."

Mr. Zerngast provides a breakdown of the $146,000,000:

          Assets Held for Sale:

               Wrightsville                 $83,000,000
               Wyandotte                     23,000,000
               Mint Farm                     18,000,000
                                             ----------
          Total Assets Held for Sale       $124,000,000

               Enron receivable              22,000,000
                                             ==========
          Total cash proceeds              $146,000,000

Mr. Zerngast indicates that these amounts should also be added to
value:

    -- $46,000,000 sale of the Maryland Service Center;

    -- $40,000,000 Aquaelectra preferred stock investment; and

    -- Tax Overpayment Notes for $270,000,000 and forgiveness of
       $92,000,000 in accrued and unpaid New York property taxes
       under the New York Settlement.

Mr. Zerngast relates that in his objection to the Mirant's
Disclosure Statement, he proposed that $50,000,000 should be
withdrawn from the W. Georgia Funds on Deposit and be used to pay
down the $140,000,000 debt of W. Georgia.

Mirant partially granted his request by proposing to withdraw
$30,000,000 from the W. Georgia Funds on Deposit and using the
$30,000,000 to pay down the W. Georgia debt to a balance of
$110,000,000, Mr. Zerngast says.  "However, [the] fact that
$30,000,000 has been withdrawn from the excess balance of Funds
on Deposit and used as Cash to pay down the Long-term debt has
been overlooked in establishing value.  In establishing value,
either the $30,000,000 should be added as available excess Cash
or, alternatively, the debt of W. Georgia should be listed as
$110,000,000 instead of $140,000,000."

According to Mr. Zerngast, the Amended Disclosure Statement lists
the $140,000,000 as a Class 2-Secured Claim.  "The total Class 2-
Secured Claims are $154,210,685 and the W. Georgia debt is
$140,000,000 of this total."

                     Claims Against the Debtors

The Examiner reports that total claims against the Debtors are
estimated to be $11,333,184,888 as of December 31, 2005.

Mr. Zerngast says that the estimated total claims appear to be
overstated because of:

    a. the over-accrual of postpetition interest;

    b. non-cash transfer of accounts receivable and power plant as
       partial satisfaction of the California claims;

    c. over recording of the Citibank "C" revolver or
       understatement of restricted cash; and

    d. other questions whose answers may result in a significant
       reduction of the stated claims.

For these reasons, Mr. Zerngast asks the Court to thoroughly
investigate the issues he raised.

Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- is a competitive energy company that
produces and sells electricity in North America, the Caribbean,
and the Philippines.  Mirant owns or leases more than 18,000
megawatts of electric generating capacity globally.  Mirant
Corporation filed for chapter 11 protection on July 14, 2003
(Bankr. N.D. Tex. 03-46590).  Thomas E. Lauria, Esq., at White &
Case LLP, represents the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $20,574,000,000 in assets and $11,401,000,000 in debts.
(Mirant Bankruptcy News, Issue No. 75; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


MORGAN STANLEY: Fitch Affirms Low-B Rating on Two Cert. Classes
---------------------------------------------------------------
Fitch Ratings affirms Morgan Stanley Capital I Inc.'s commercial
mortgage-backed securities, series 1999-WF1:

     --$17.0 million class A-1 at 'AAA';
     --$476.8 million class A-2 at 'AAA';
     --Interest-only class X at 'AAA';
     --$48.4 million class B at 'AAA';
     --$43.6 million class C at 'AA+';
     --$9.7 million class D at 'AA-';
     --$29.1 million class E at 'A';
     --$16.9 million class F at 'BBB+';
     --$9.7 million class G at 'BBB';
     --$19.4 million class H at 'BB+';
     --$7.3 million class J at 'BB'.

Fitch does not rate classes K through O.

The rating affirmations are the result of the transaction's stable
performance and ongoing paydown.  As of the August 2005
distribution date, the pool's aggregate certificate balance has
decreased 26.4% to $715.9 million from $968.5 million at issuance.
To date, realized losses total less than 0.1% of pool balance at
issuance.

There are currently 11 loans identified as Fitch loans of concern,
of which the largest is Silvertree Hotel and Wildwood Lodge
(4.3%).  This loan is a full-service hotel in Snowmass, CO that
relies heavily on Colorado's snow season.  The loan is current but
has consistently under-performed underwriting expectations, as
indicated by a year-end 2004 DSCR of 0.52 times (x) on a net
operating income basis.

There are no loans that are currently delinquent or in special
servicing.


NORTH AMERICAN: Wants Solicitation Period Stretched to Jan. 31
--------------------------------------------------------------
North American Refractories Company asks the U.S. Bankruptcy Court
for the Western District of Pennsylvania to extend, until Jan. 31,
2006, the exclusive period within which it may solicit acceptances
for its proposed Amended Reorganization Plan.

At the omnibus hearing in July 2005, The Debtor committed to
submit an amended plan of reorganization by Sept. 15, 2005.  The
Debtor reports that it has made substantial progress towards
formulating an amended plan that is satisfactory to the major
parties-in-interest in its chapter 11 case.

The extension will provide the Debtors the time they need to
finalize the negotiation, revisions, and solicitation of the Plan
that has been agreed to in principle by the major creditor
constituencies.

The Debtor's exclusive period to solicit plan acceptances has been
extended nine times since the Plan was filed on July 31, 2003.

The Debtor sought bankruptcy protection in early 2002 after
suffering a slump in the domestic economy and encountering an
overwhelming number of claims from individuals asserting injuries
or illnesses caused by exposure to asbestos containing products it
manufactured.

Headquartered in Pittsburgh, Pennsylvania, North American
Refractories Company, was engaged in the manufacture and non-
retail sale of refractory bricks and related products.  The
Company filed for chapter 11 protection on January 4, 2002 (Bankr.
W.D. Pa. Case No. 02-20198).  Paul M. Singer, Esq., of Pittsburgh
represents the Debtor.  When the Debtor filed for protection from
its creditors, it listed $27,559,000,000 in assets and
$18,634,000,000 in debts.


NETEXIT INC: Court Enters Oral Confirmation on Liquidating Plan
---------------------------------------------------------------
Sept. 14 /PRNewswire-FirstCall/

The U.S. Bankruptcy Court for the District of Delaware has issued
an oral ruling confirming Netexit, Inc.'s Chapter 11 liquidating
plan of reorganization.  Netexit is a subsidiary of NorthWestern
Corporation d/b/a NorthWestern Energy (Nasdaq: NWEC).

Netexit advised the Court that it anticipates establishing
Sept. 29, 2005, as the effective date for the amended and restated
liquidating plan of reorganization.  According to the terms of the
plan:

   -- NorthWestern will receive an initial cash distribution of
      $20 million for its allowed claims upon the effective date
      of the confirmed plan.

   -- A reserve of $5 million will be set aside through the plan
      for an additional distribution to NorthWestern after
      distributions are made on other allowed unsecured claims.

   -- A reserve of up to $22.9 million will be set aside through
      the plan for payment of allowed non-NorthWestern unsecured
      claims with distribution to occur only after all such
      unsecured claims are resolved. Any remaining cash from this
      reserve, which is not paid out to other allowed unsecured
      claims, will be paid to NorthWestern.

   -- $8 million will be paid on the effective date of the plan to
      securities class action claimants to satisfy an allowed
      liquidated claim provided to former NorthWestern
      shareholders in a previously announced court-approved
      settlement.

   -- After distributions are made to allowed unsecured,
      administrative and priority claims, any remaining Netexit
      estate funds will be paid to NorthWestern at the filing of a
      motion to close the bankruptcy proceeding.

"We are pleased to have been able to accomplish our objective of
quickly and efficiently obtaining a confirmed plan that will lead
to the final distribution of Netexit's estate funds," said Michael
J. Hanson, NorthWestern's President and Chief Executive Officer.
"Northwestern is to receive an immediate $20 million cash
distribution on the effective date, and we expect additional cash
distributions to NorthWestern when the claim resolution process is
completed and the case closed."

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

Headquartered in Sioux Falls, South Dakota, Netexit, Inc., fka
Expanets, Inc., is a nationwide provider of networked
communications and data services to small and mid-sized
businesses.  The Company and its debtor-affiliates filed for
chapter 11 protection on May 4, 2004 (Bankr. D. Del. Case No. 04-
11321).  Jesse H. Austin, III, Esq., and Karol K. Denniston, Esq.,
at Paul, Hastings, Janofsky & Walker LLP, and Scott D. Cousins,
Esq. Victoria Watson Counihan, Esq., and William E. Chipman, Jr.,
Esq., at Greenberg Traurig, LLP, represent the Debtors.  When the
Debtors filed for chapter 11 protection, they estimated $10
million to $50 million in assets and more than $100 million in
liabilities.


NORTHWEST AIRLINES: S&P Says Ratings Remain on Negative Watch
-------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings on
Northwest Airlines Corp. (CCC-/Watch Neg/C) remain on CreditWatch
with negative implications.  Northwest Airlines Corp. disclosed
that it had missed $23 million of payments due on aircraft-backed
debt and that it had not made a $19 million payment due regional
airline partner Mesaba Aviation Inc.

Further, the company noted that a $65 million pension payment is
due September 15, 2005, and failure to make that payment would
trigger a lien against its assets unless the airline first files
for bankruptcy.

"These disclosures indicate that Northwest will very likely file
for Chapter 11 shortly, probably on September 14," said Standard &
Poor's credit analyst Philip Baggaley.

Standard & Poor's ratings on Northwest and its Northwest Airlines
Inc. (CCC-/Watch Neg/--) unit were lowered to current levels on
Sept. 6, 2005.

The corporate credit ratings of both entities will be lowered to
'D' upon a bankruptcy filing, as will ratings on unsecured debt,
the bank credit facility, and airport revenue bonds.  Ratings on
enhanced equipment trust certificates will be reviewed for
possible further downgrades.

Northwest's previous strategy of seeking to negotiate
concessionary labor contracts with its unions and obtaining relief
from pension funding obligations through new federal legislation
appears to have been overtaken by the surge in fuel prices.
Northwest's unrestricted cash, $2.14 billion at June 30, had
fallen to $1.7 billion by August 31, and the company recently
predicted a third-quarter net loss of $350 million to $400
million, due mostly to much higher fuel costs.

Northwest should be able to reorganize successfully, though it
will likely shrink its fleet and its domestic operations, as
bankrupt United Air Lines Inc. has done.  The company would also
be expected to negotiate or, if necessary, ask the bankruptcy
court to impose, concessionary labor contracts, and to eventually
seek to terminate its defined benefit pension plans.


NORTHWEST AIRLINES: Moody's Downgrades Sr. Unsecured Rating to C
----------------------------------------------------------------
Moody's Investors Service downgraded the debt ratings of Northwest
Airlines Corporation and its primary operating subsidiary,
Northwest Airlines, Inc.  The Corporate Family Rating was lowered
to Caa2 from Caa1, and the Senior Unsecured rating was downgraded
to C from Caa3.  Ratings assigned to Enhanced Equipment Trust
Certificates were downgraded as noted below.  In addition, the
company's Speculative Grade Liquidity Rating was downgraded to
SGL-4 from SGL-3.  The outlook is negative.

The rating actions reflect:

   * a combination of continued operating losses;

   * deterioration of balance sheet liquidity; and

   * the comany's stated need to analyze and reorganize its short
     and long term obligations as part of a transformation plan.

Northwest did not make $23 million of scheduled payments on
outstanding debt obligations which became due on September 10, 11
and 12, and indicated that the company will likely seek to
restructure these obligations.  Additionally, Northwest did not
make a scheduled semi-monthly payment of $19 million on its
airline services agreement with Mesaba Aviation, Inc. which became
due September 12.

The ratings actions affecting the EETC transactions consider:

   * the underlying financial risk of Northwest and the increased
     likelihood of default on its obligations to make payments to
     the trustee of the EETC's;

   * the availability of liquidity facilities supporting interest
     payments for up to 18 months in the event of a Northwest
     default;

   * existing collateral values; and

   * the ability to apply proceeds from the sale of aircraft to
     reduce outstanding principal.

In Moody's view, the junior classes of the certificates have a
higher risk of loss in reorganization due to the exclusivity and
control afforded to the senior classes following a default.  While
collateral values are expected to provide full recovery for the
senior tranches of the EETC's, risk associated with achieving that
recovery is greater.  The downgrade of the ratings of the junior
tranches reflects that, in Moody's opinion, full recovery of
principal outstanding is less likely.  The ratings could be
further downgraded if there are any negative changes in the
underlying market values of the collateral and/or depending on
which EETC's Northwest elects to affirm or reject should the
company elect to file for bankruptcy protection as part of its
plan of reorganization.

The downgrade of the SGL rating reflects:

   * Northwest's ongoing losses;

   * deterioration of cash balances and substantial debt
     maturities;

   * pension obligations; and

   * capital expenditures which could further utilize available
     liquidity.

Northwest continues to incur significant near-term losses and has
forecasted a net loss of $350 million to $400 million for third
quarter of 2005 driven by high labor and fuel costs.  Northwest's
operating cash inflow was $14 million in the second quarter of
2005, or $406 million less than in the prior-year period.  As
airlines' cash balances are typically replenished during their
seasonally stronger spring and summer months, the company's
relatively weak internal cash generation in the second quarter of
2005 portends a significant drain on cash occurring in late 2005
and early 2006.

Ratings affected include:

  Northwest Airlines Corporation:

     * Corporate Family (previously called Senior Implied) rating:
       to Caa2 from Caa1

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

     * Guaranteed Convertible Notes to C from Caa3.

  Northwest Airlines, Inc.:

     * Senior Unsecured debt: to C from Caa3.

     * Senior Unsecured and Subordinated debt to be issued under
       the multiple seniority shelf: to (P)C / (P) C from
       (P)Caa3 / (P)C.

     * Secured Bank Credit Facility:

       -- Term Loan A: to Caa1 from B3
       -- Term Loan B: to Caa1 from B3
       -- Term Loan C: to Caa1 from B3

     * Industrial Revenue Bonds (Series 1997): to C from Caa3

Enhanced Equipment Trust Certificates, except for Aaa ratings
supported by monoline insurance policies have been downgraded as:

   * All Class A tranches have been downgraded to rating levels
     ranging from Ba2 to Caa2

   * All Class B tranches have been downgraded to rating levels
     ranging from B3 to Ca

   * All Class C tranches have been downgraded to rating levels
     ranging from Caa1 to C

   * All Class D tranches have been downgraded to rating levels
     ranging from Ca to C

Northwest Airlines Corporation and Northwest Airlines, Inc. are
headquartered in Eagan, Minnesota.


NORTHWEST AIRLINES: Files for Chapter 11 Protection in S.D.N.Y.
---------------------------------------------------------------
Northwest Airlines Corporation (Nasdaq: NWAC), the world's fourth
largest airline, and 12 affiliates filed voluntary petitions for
reorganization under Chapter 11 of the U.S. Bankruptcy Code in the
U.S. Bankruptcy Court for the Southern District of New York.

The company emphasized that it will continue to operate normally
to serve customers, honor tickets, fly its competitive schedule
and continue the WorldPerks frequent flyer and WorldPerks Visa
programs.  In addition, its tour subsidiary, MLT, will also
continue normal operations.

"As we have consistently stated, the airline industry has changed
permanently," said Doug Steenland, Northwest president and chief
executive officer.  "Northwest must significantly lower its costs
to compete with other carriers.  Many of these are legacy carriers
that have already used the bankruptcy process to achieve changes
in their cost structures or newer, low-cost carriers which have
much lower labor and operating costs than legacy carriers."

"We had developed a plan to restructure Northwest outside of
Chapter 11 and have been implementing that plan," Mr. Steenland
added.  "Unfortunately, in addition to an uncompetitive cost
structure, our efforts have been overtaken by skyrocketing fuel
costs.  We can no longer continue to incur sizable losses and
reductions in liquidity as we attempt to complete implementation
of the plan.  By filing for Chapter 11 now, we ensure that we have
the means to complete the transformation of Northwest quickly and
effectively."

Northwest expects that its fuel bill for 2005 will be
approximately $3.3 billion.  This compares to $2.2 billion for
2004 and $1.6 billion for 2003.

"The Chapter 11 process will allow us to realize three major goals
essential to the transformation of Northwest Airlines:

   -- a competitive cost structure including both labor and non-
      labor costs;

   -- a more efficient business model which will allow us to
      continue to deliver superior choice and service to our
      customers; and

   -- a strengthened balance sheet with debt and equity levels
      consistent with long-term profitability."

"We have many valuable assets that position us well in today's
marketplace, including our highly-skilled, dedicated employees,
strong hub and spoke network, domestic and international
alliances, world-class airport facilities, valuable cargo
business, strong presence in U.S. Heartland markets and extensive
trans-Pacific and trans-Atlantic international routes.  Once our
reorganization has been completed and a competitive cost structure
is in place, Northwest will emerge as a strong competitor with a
solid future."

Mr. Steenland said the decision to file for Chapter 11 protection
was unrelated to the ongoing strike by members of the airline's
mechanics union.  He stressed that the airline's operations are
working well and that the company has experienced no adverse
impact on its operational performance.

In addition to its other labor cost restructuring, Northwest said
that it must continue its transition from defined benefit pension
plans to defined contribution plans.  Absent any changes to ERISA,
particularly the deficit reduction contribution provisions,
Northwest is required to contribute $3.3 billion to its defined
benefit plans from 2006 through 2008.  Notwithstanding having
filed its Chapter 11 petition, the airline will continue to seek
favorable pension legislation.

As of Sept. 14, the company's unrestricted cash and short-term
investments balance was $1.5 billion.

Mr. Steenland concluded, "Although this filing will change the
process of our restructuring, two things will not change.  We will
continue to provide safe, reliable air transportation to the more
than 55 million passengers carried annually to their destinations
around the world.  And we will continue to work toward consensual
collective bargaining agreements with all of our employees
represented by labor unions."

Northwest Airlines Corporation -- http://www.nwa.com/-- is the
world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 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.  The Company and 12 affiliates filed for
chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case
No. 05-17930).  Bruce R. Zirinsky, Esq., and Gregory M. Petrick,
Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark
C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $14.4 billion in total assets and $17.9 billion in total
debts.


NORTHWEST AIRLINES: AMFA & IAM Comment on Airline's Ch. 11 Filing
-----------------------------------------------------------------
Aircraft Mechanics Fraternal Association and the International
Association of Machinists and Aerospace Workers issued statements
about Northwest Airlines' filing for chapter 11 bankruptcy
protection:

                      AMFA Statement

"Speaking on behalf of our members who have spent most or all of
their careers working to make Northwest Airlines successful, we
are saddened for our airline company but not surprised that the
current management has filed for bankruptcy protection," O.V.
Delle-Femine, AMFA National Director.

"We said earlier on that management's refusal to negotiate with us
in good faith, or to agree to binding arbitration, showed that
they intended all along to declare bankruptcy in the hope that a
bankruptcy judge would impose the unreasonable terms Northwest
knew it could never get through the normal negotiating process.
But the terms of Northwest's last offer were harsher than the
terms a bankruptcy judge granted to United Airlines with respect
to AMFA.  As we also said earlier, we would rather take our
chances with a bankruptcy judge than submit to management's
proposed terms and working conditions that would have been
devastating economically and contrary to AMFA's commitment to
quality maintenance."

As previously reported, Northwest asked for a $176 million wage
and benefit cuts from the AMFA.  After that negotiation failed,
Union members went on strike.  The carrier and the Union went back
on the negotiating table last week but talks again failed.
Northwest raised its demand to $203 million and told AMFA
representatives that it's laying off about 900 cleaners and
custodians.

Jeff Mathews, a spokesman for the AMFA bargaining committee, said
that talks failed due to a disagreement over severance pay for the
workers who would be laid off.   The company's proposal included
severance that was equal to the maximum amount available to any
Northwest contract employee.  The company said the severance
proposal would have allowed their AMFA-represented employees to be
furloughed to continue to receive a paycheck through the end of
the year.

                      IAM's Statement

"The IAM is prepared to defend our members and their interests
throughout the bankruptcy process," said Robert Roach, Jr.,
General Vice President of Transportation for the International
Association of Machinists and Aerospace Workers following the
announcement that Northwest Airlines has filed for Chapter 11
bankruptcy reorganization.

"Today's filing is unfortunate, but not unexpected to anyone
familiar with the airline," said Roach. "We have assembled a team
of attorneys, economists and IAM Representatives with a wealth of
airline bankruptcy experience and resources to ensure our members
are treated fairly and their rights protected both in the
courtroom and at the bargaining table."

"The IAM will not allow Northwest's bankruptcy to alter our goal
of reaching a fair and equitable agreement for our members," said
IAM District 143 President Bobby DePace.  "We want Northwest to
succeed, but not at an unreasonable cost to our members."

The Machinists Union's collective bargaining agreements with
Northwest Airlines became amendable on February 25, 2003, and the
IAM has been in mediated negotiations with Northwest Airlines
since August 26, 2003.

IAM District 143 -- http://www.iam143.org/-- represents 14,200
Northwest Airlines employees in the Equipment Service, Office &
Clerical, Passenger Service, Plant Protection and Flight Simulator
Operator classifications.

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

Northwest Airlines Corporation -- http://www.nwa.com/-- is the
world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and
approximately 1,400 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.  The Company and 12 affiliates filed for
chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case
No. 05-17930).  Bruce R. Zirinsky, Esq., and Gregory M. Petrick,
Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark
C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in
Washington represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $14.4 billion in total assets and $17.9 billion in total
debts.


NORTHWEST AIRLINES: Case Summary & 100 Largest Unsecured Creditors
------------------------------------------------------------------
Lead Debtor: Northwest Airlines Corporation
             5101 Northwest Drive
             St. Paul, Minnesota 55111-3034

Bankruptcy Case No.: 05-17930

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                     Case No.
      ------                                     --------
      NWA Fuel Services Corporation              05-17925
      Northwest Airlines, Inc.                   05-17933
      Northwest Airlines Holdings Corporation    05-17938
      NWA Inc.                                   05-17940
      Northwest Aerospace Training Corp.         05-17944
      MLT Inc.                                   05-17948
      Northwest Airlines Cargo, Inc.             05-17949
      NWA Retail Sales Inc.                      05-17950
      Montana Enterprises, Inc.                  05-17952
      NW Red Baron LLC                           05-17953
      Aircraft Foreign Sales, Inc.               05-17955
      NWA Worldclub, Inc.                        05-17956

Type of Business: The Debtor is the world's fourth largest
                  airline with hubs at Detroit, Minneapolis/St.
                  Paul, Memphis, Tokyo and Amsterdam, and
                  approximately 1,400 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.  See http://www.nwa.com/

Chapter 11 Petition Date: September 14, 2005

Court: Southern District of New York (Manhattan)

Judge: Allan L. Gropper

Debtors' Counsel: Bruce R. Zirinsky, Esq.
                  Gregory M. Petrick, Esq.
                  Cadwalader, Wickersham & Taft LLP
                  One Word Financial Center
                  New York, New York 10281
                  Tel: (212) 504-6000
                  Fax: (212) 504-6666

                     --- and ---

                  Mark C. Ellenberg, Esq.
                  Cadwalader, Wickersham & Taft LLP
                  1201 F. Street Northwest, Suite 1100
                  Washington, DC 20004
                  Tel: (202) 862-2200
                  Fax: (202) 862-2400

Debtors' Special
Labor Counsel:    Arnold & Porter LLP

Debtors'
Strategic &
Financial
Advisor:          Seabury Group LLC

Debtors'
Accounting &
Restructuring
Consultants:      Huron Consulting Group,

Debtors'
Special
Employee Benefits
Counsel:          Groom Law Group, Chartered

Debtors' Special
Corporate &
Litigation
Counsel:          Simpson Thacher & Bartlett LLP

Debtors'
Anti-Trust &
Litigation
Counsel:          Boies, Schiller & Flexner LLP

Debtors' ERISA,
Antitrust
Litigation,
Employment Law &
Commercial Law
Counsel:          Dorsey & Whitney LLP

Debtors' Special
Labor & Employment
Law Counsel:      Paul, Hastings, Janofsky & Walker, LLP

Debtors'
Bankruptcy
Conflicts Counsel: Curtis, Mallet-Prevost, Colt & Mosle LLP


Total Assets: $14,352,000,000

Total Debts:  $17,915,000,000

Debtors' Consolidated List of 100 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
U.S. Bank National            Notes - 10% Sr.       $300,000,000
Association                   Notes Due 2009
Attn: Donald Smith
1 Federal Street
Boston, MA 02110
Tel: (617) 603-6561

U.S. Bank National            Notes - 9.875% Sr.    $300,000,000
Association                   Notes Due 2007
Attn: Donald Smith
1 Federal Street
Boston, MA 02110
Tel: (617) 603-6561

U.S. Bank National            Notes - 8.875% Sr.    $270,027,000
Association                   Notes Due 2006
Attn: Donald Smith
1 Federal Street
Boston, MA 02110
Tel: (617) 603-6561

U.S. Bank National            Notes - 7.625%        $225,000,000
Association                   Convertible Sr.
Attn: Donald Smith            Notes Due 2023
1 Federal Street
Boston, MA 02110
Tel: (617) 603-6561

State Street Bank & Trust     Series C Preferred    $211,684,707
Company                       (held for non-
200 Newport Avenue, Q3N       qualified trusts
North Quincy, MA 02171        for ground employees
                              and flight attendants
                              and other employees)

U.S. Bank National            Notes - 7.875% Sr.    $200,000,000
Association                   Notes Due 2008
Attn: Donald Smith
1 Federal Street
Boston, MA 02110
Tel: (617) 603-6561

U.S. Bank National            Notes - 6.625%        $150,000,000
Association                   Convertible Sr.
Attn: Donald Smith            Notes Due 2023
1 Federal Street
Boston, MA 02110
Tel: (617) 603-6561

U.S. Bank National            Notes - 9.5% Sr.      $142,500,000
Association                   Quarterly Interest
Attn: Donald Smith            Bonds Due 2039
1 Federal Street
Boston, MA 02110
Tel: (617) 603-6561

U.S. Bank National            Notes - 8.7% Sr.      $100,000,000
Association                   Notes Due 2007
Attn: Donald Smith
1 Federal Street
Boston, MA 02110
Tel: (617) 603-6561

State Street Bank & Trust     Series C Preferred     $64,770,008
Company                       (held for non-
200 Newport Avenue, Q3N       qualified trusts
North Quincy, MA 02171        for ground employees
                              and flight attendants
                              and other employees)

Koninklijke Luchtvaart        Alliance Partner       $64,121,983
Maatschappij N.V. (KLM)
Attn: Peter Schelvis
SVP Finance & Control
P.O. Box 7700
1117 Z1 Schiphol Airport
The Netherlands

Pinnacle Airlines Inc.        Regional Carrier       $28,050,539
1689 Nonconnah Parkway
Suite 111
Memphis, TN 38132
Tel: (901) 348-4100

Mesaba Avaiation Inc.         Regional Carrier       $23,128,832
1000 Blue Gentian Road
Suite 200
Eagan, MN 55121

American Express Travel       Trade Debt -           $19,182,704
Related Services Company      Agency Commissions
Attn: Patrick J. Corbett
VP - Supplier Management &
Procurement
2901 Wilcrest Drive
Suite 400
Houston, TX 77042
Tel: (713) 954-7615

Blue Cross Blue Shield        Insurance -            $18,370,278
85 North Danny Thomas Blvd.   Benefits
Memphis, TN 38103-2398

Worldspan                     Global Distribution    $14,870,693
Attn: Kevin Ficco             System
Vice President -
Airline Distribution &
Business Development
300 Galleria Parkway, N.W.
Atlanta, GA 30339-3196
Tel: (770) 563-7277

SNECMA                        Trade Debt -           $13,279,733
Attn: Jean-Lin Fournereax     Parts and Service
2 Boulevard du General
Martial Valin
75724 Paris, Cedex 15
France
Tel: (33) 1-6414-8460

United Healthcare             Insurance -            $13,203,253
P.O. Box 1459                 Benefits
Minneapolis, MN 55440-1459
Tel: (800) 328-5979

Pacific Gas Turbine Center    Engine Leases/         $12,025,695
7007 Consolidated Way         Overhaul
San Diego, CA 92121
Tel: (858) 877-2800

Kemper Insurance Companies    Insurance -             $8,431,408
1 Kemper Drive                Benefits
Long Grove, IL 60049-0002

Galileo International         Global Distribution     $8,051,006
Attn: Steven Diffley          System
Group Vice President -
Supplier Services
9700 West Higgins Road
Rosemont, IL 60018
Tel: (847) 518-4047

Sabre                         Global Distribution     $7,473,703
Attn: Todd Wallace            System
Managing Director -
Airline Distribution &
Marketing
3150 Sabre Drive
MD 8311
Southlake, TX 76092
Tel: (682) 605-2689

Eurocontrol                   Overfly Charges         $5,464,133
Rue De LA Fusee, 96
Brussels B-1130, Belgium
Tel: (32) 2729-3865

Jetran International Ltd.     Spare Engine Leases     $5,221,711
12400 Highway 281 North
Suite 150
San Antonio, TX 78216
Tel: (210) 495-7766

Pratt & Whitney               Trade Debt -            $5,050,963
400 Main Street               Parts & Service
East Hartford, CT 06108
Tel: (860) 565-4321

Amsterdam Airport Schiphol    Airport/ Government     $4,776,601
Attn: Peter Verboom           Authorities
CFO Schiphol
Postbus/P.O. Box 7501
1118 ZG Luchthaven Schiphol
The Netherlands
Tel: 011-31-20-601-2384

Finova Capital Corporation    Spare Engine Leases     $4,755,313
Attn: Jim Wifler
4800 North Scottsdale Road
Scottsdale, AZ 85251-7623
Tel: (480) 636-6728

Israel Aircraft Industries    Trade Debt -            $4,732,267
1700 North Moore Street       Parts & Service
Suite 1210
Arlington, VA 22209

Carlson Travel Group, Inc.    Agency Commissions      $4,167,586
& Carlson Travel Network
Associates, Inc.
P.O. Box 96258
Chicago, IL
Tel: (612) 540-5561

Civil Aviation                Airport/Government      $4,129,172
Bureau of Japan               Authorities
Mr. Takashi (Narita)
Administration Division
Aerodome Department
Civil Avaiation Bureau
Ministry of Land
Infrastructure & Transport
2-1-3, Kasumigaseki
Chiyoda-ku
Tokyo, Japan 100-8919
Tel: 81-3-5253-8111
Fax: 81-3-5253-1658

AON Risk Services Companies   Insurance - Broker      $3,915,908
200 East Randolph Street
Chicago, IL 60601

U.S. Department of Homeland   Airport/Government      $3,895,222
Security                      Authorities
Washington, DC 20528

HAECO (Hong Kong Aircraft     Trade Debt -            $3,792,842
Engineering Company Ltd.)     Engineering/
Attn: Albert C.H. Leung       Maintenance
MSc., General Manager
80 South Perimeter Road
Hong Kong International
Airport
Lantau, Hong Kong
Tel: (852) 2767-6694

Honeywell                     Trade Debt -            $3,791,701
Attn: Peter M. Kreindler      Parts & Service
Senior Vice President &
General Counsel
101 Columbia Road
Morristown, NJ 07962
Tel: (973) 455-2000

Amadeus                       Global Distribution     $3,538,689
Attn: David Doctor            System
Director - Airline Marketing
and Sales
Salvador De Madariaga,
Madrid, E-28027 Spain
Tel: (34) 915-820-110

Merck                         Insurance -             $2,829,250
One Merck Drive               Benefits
P.O. Nox 100
Whitehouse Station, NJ
08889-0100
Tel: (908) 423-1000

A I Leasing IV Inc            Financing/Leasing       $2,603,131
593 Herndon Way
Herndon, VA 20170
Tel: (703) 834-3495

LSG Sky Chefs                 Trade Debt -            $2,398,406
Attn: Rick Pike               Catering
Global Credit & Collections
Manager
6191 North State
Highway 161
Irving, TX 75038
Tel: (972) 793-9290

Chimes Corporation            Trade Debt -            $2,328,330
P.O. Box 35429                Software
Newark, NJ 07193
Tel: (888) 339-2421

World Travel Partners         Agency Commissions      $2,238,694
1055 Lenox Park Blvd., #420
Atlanta, GA 30319
Tel: (404) 923-9442

Delta Dental                  Insurance -             $2,020,004
Attn: Valerie Sorneson,       Benefits
VP Sales & Marketing
3560 Delta Dental Drive
Eagan, MN 55122
Tel. No: (651) 406-5901

General Electric Co.          Engine Leases           $1,924,111
3135 Easton Turnpike
Fairfield, CT 06828
Tel. No: (203) 373-2211

Nav Canada                    Overfly Charges         $1,918,524
Attn: Louise Patnaude,
AR & Collections Manager
77 Metcalfe Street
Ottawa, ON K1P 5L6,
Canada
Tel. No: (613) 563-4520

Travelocity                   Agency Commissions      $1,854,169
Attn: Simon Bramley,
Vice President
3150 Sabre Dr.
Southlake, TX 76092
Tel. No: (682) 605-2398

Hawker Pacific Aerospace      Trade Debt              $1,660,966
Attn: Klaus Koester
11230 Sherman Way
Sun Valley, CA 91352
Tel. No: (818) 765-6201

Affiliated Computer Service   Trade Debt              $1,653,591
P.O. Box 200790
Dallas, TX

Aviance UK Limited            Trade Debt              $1,639,306
Attn: Paul Williams,
Commercial Manager
3rd Floor, First Point,
Buckingham Gate,
Gatwick Airport
West Sussex, RH6 0NT
United Kingdom
Tel. No: 011 44 1293
         502 240

CIT Group                     Financing/Leasing       $1,604,183
Attn: Frederick E.
Wolfert, Vice President
Commercial Finance
1 CIT Drive
Livingston, NJ 07039
Tel. No: (973) 740-5000

SITA                          Trade Debt              $1,550,000
Attn: John Decost,
Global Account Director
3100 Cumberland Blvd.
Atlanta, GA 30339
Tel. No: (770) 612-2280

Medica                        Insurance - Benefits    $1,525,864
P.O. Box 9310
Minneapolis, MN 55440

PEMCO World Air Services      Trade Debt - Aircraft   $1,471,958
Attn: Accounts Receivable     Maintenance
100 Pemco Drive
Dothan, AL 36303
Tel. No: (334) 983-4571

ICTS Europe Holdings B.V.     Trade Debt              $1,436,795
Burg Stramanweg 102
1101 AA Amsterdam
The Netherlands

TQ3Navigant                   Trade Debt              $1,376,589
Attn: Robert Griffith, CFO
84 Inverness Circle East
Englewood, CO 80112
Tel. No: (303) 706-0800

Wayne County Airport          Airport/Government      $1,307,010
Authority                     Authorities
Detroit Metropolitan
L C Smith Terminal
Mezzanine
Airport Finance
Detroit, MI 48242
Tel. No: (734) 942-3550

Goodrich Corporation          Trade Debt -            $1,279,419
Attn: Terrence G. Linnert     Parts and Service
Executive Vice President,
Administration and
General Counsel
Four Coliseum Centre
2730 West Tyvola Rd.
Charlotte, NC 28217

Triumph Air Repair, Inc.      Trade Debt              $1,257,364
Attn: John B. Wright, II
Vice President,
General Counsel & Secretary
1550 Liberty Ridge Drive
Suite 100
Wayne, PA 19087
Tel. No. (610) 251-1000

Prospect Airport Services     Trade Debt -            $1,230,000
1900 Lee St.                  Terminal/Airplane
Des Plaines, IL 60018         Services
Tel. No: (847) 299-3636

Swissport USA Inc.            Trade Debt -            $1,211,283
45025 Aviation Drive          Aviation Services
Suite 350
Dulles, VA 20166
Tel No: (703) 742-4381

AMTECH                        Financing/Leasing       $1,202,569
8081 NW 31st St.
Miami, FL 33122
Tel. No: (305) 591-1553

Bank of America               Financing/Leasing       $1,163,470
Comm Fin Corp.
555 California Street
4th Floor
San Francisco, CA 94104

Vanguard Car Rental USA       Trade Debt -            $1,154,577
6929 North Lakewood           MLT - Rental Cars
Avenue, Suite 100
Tulsa, OK 74117
Tel: (918) 401-6000

Val-Pak Direct                Trade Debt              $1,149,423
Attn: Gina Medlin
Marketing System
8605 Large Lake Drive
Largo, FL 33773

ASIG Aircraft Service         Trade Debt              $1,143,225
International Group
P.O. Box 910701
Dallas, TX 75391

Globe Ground                  Trade Debt              $1,103,153
North America LLC
Servisair/GlobeGround
111 Great Neck Road,
Suite 600
P.O. Box 355
Great Neck, NY 11022-0355
Tel: (516) 487-8610

SIA Engineering Co.           Trade Debt -            $1,094,479
SIA Engineering               Aircraft Maintenance
Company Hangar
31, Airline Road
Singapore 819831

Riu Hotels Riu Centre         Trade Debt -            $1,092,269
Calle Llad s/n               MLT - Hotels
07610-Playa de Palma, Majorca

Cathay Kansai                 Trade Debt              $1,065,879
Terminal Services
Company Limited
Rinku International
Logistics Center
2-21 Rinku-orai kita,
Izumisano City, Osaka
598-0048 Japan
Tel: (81)-(724)-69-4915

Gateway Travel & Tour         Agency Commission       $1,062,163
Suite 202
4100 Spring Valley Road
Dallas, TX 75244
Tel: (214) 960-2000

Hagemeyer                     Trade Debt -            $1,018,467
North America Inc.            Parts Supplier
P.O. Box 790405
St Louis, MO 63179-0405
Tel: (678) 746-2770
Tel: (678) 746-2400

British Airport Authorities   Airport/Government        $962,230
Attn: Karen Russel,           Authorities
Property Asset Manager
Paul Griffith, Managing
Director
BAA Business Support
Centre Limited Invoice
To Cash Process Team
P.O. Box 3000,
Glasgow, G52 4YG
United Kingdom
Tel No: 011 44 7839 504 044

Diversified Distribution      Trade Debt -              $945,851
Systems Incorporated          Distributor
Northwest 7940
P.O. Box 1450
Minneapolis, MN 55485

ARINC Incorporated            Trade Debt -              $928,345
2551 Riva Road                Transportation
Annapolis, MD 21401           Communications
Tel: (800) 633-6882
Fax: (410) 573-3300

Worldwide Flight Services     Trade Debt -              $906,869
P.O. Box 3831                 Aviation Services
Commerce Court Postal Station
Toronto, ON M5L 1K1 Canada
Tel No: (514) 636-7874

AT&T                          Trade Debt -              $897,574
Attn: George Potter,          Telecommunications
Signature Client Director
1050 West County Road
Shoreview, MN 55126
Tel No: (612) 376-5469

Mainami                       Trade Debt                $895,204
(Mainami Kuko
Service Co. Ltd)
373 Hillcrest 4F, 1-7-8,
Moto-Akasaka
Minato-Ku, Tokyo,
107-0051 Japan
Tel: 03-3796-6633

Palace Resorts                Trade Debt -              $849,202
8725 NW 18th Terrace,         MLT - Hotels
Suite 301
Miami, FL 33172

Shanghai Pudong Cargo         Trade Debt                $815,541
Terminal
Room 309, Shanghai
Pudong International
Airport Cargo Terminal
168 Suhang Road,
Shanghai Pudong
International Airport,
Shanghai 201202,
P.R. of China
Tel: 86 21 6834-1982

Mill-Run Tours, Inc.          Trade Debt                $805,914
12th Floor
424 Madison Avenue
New York, NY

Das Air Engineering           Trade Debt                $797,978
Attn: Martin Greenfield,
General Manager, Maintenance
Hangar 3, Maintenance Area 1
Perimeter Road
Southlondon Gatwick
Airportwest
Sussex, Rh6 0Lp,
United Kingdom
Tel: 011 44 1293 557 823

Jeppesen Sanderson            Trade Debt                $787,252
Attn: General Counsel
55 Inverness Drive East
Englewood, CO 80112-5498
Tel: (303) 799-9090

ACS Tradeone Marketing Inc    Trade Debt                $787,252
Attn: Jeff Jacobson
7901 Flying Cloud Drive
Eden Prairie, MN 55344
Tel: (507) 385-5312

Alitalia Airport S.P.A.       Airport/Government        $766,757
Attn: Simone Mangani          Authorities
Commercial & Systems,
Sales & Customer
Support Manager
Viale A. Marchette, III
00148 Rome, Italy
Tel: 011 39 06 6563 6109

Unisys Corporation            Trade Debt                $758,736
Attn: John F. Zimmerman
Client Executive
3199 Pilot Knob Road
Eagan, MN 55121

CIGNA Corp.                   Insurance                 $746,201
One Liberty Place             Benefits
1650 Market Street
Philadelphia, PA 19192
Tel: 215-761-1000

C&H International             Trade Debt                $744,282
4751 Wilshire Blvd. Ste 201
Los Angeles, CA
Tel: (213) 933-2288

International Air             Trade Debt                $739,414
Cargo Terminal Co., Ltd.
2121 Aza Tennamino
Komaino Narita-Shi, Chiba-Ken
Japan

Thales Avionics               Trade Debt-               $738,350
7810 Collection Center Drive  Aircraft Equipment
Chicago, IL

GS Caltex Corporation         Trade Debt-               $721,842
135-985 LG Kangnam Tower      Fuel Services
679 Yoksam-dong
Kangnam-gu
Seoul, South Korea

Petron Corporation            Trade Debt-               $708,361
16800 Glendale Drive          Lubricant Supplier
New Berlin, WI 53151
Tel No: (632) 886-3122

U.S. Bank National            Financing/Leasing         $665,295
Association
Attn: Donald Smith
1 Federal Street
Boston, MA 02110
Tel: (617) 603-6561

Detroit Metropolitan Airport  Airport/                  $664,920
Attn: Lester W. Robinson      Government
CEO                           Authorities
Wayne County Airport
Authority
Detroit Metropolitan Airport
Smith Terminal -
Mezzanine Level
Detroit, MI 48242

Massachusetts Port            Airport/                  $659,309
Authority                     Government
P.O. Box 3741                 Authorities
Boston, MA

Orbitz                        Agency Commissions        $656,033
200 So Wacker Ste 1900
Chicago, IL 60606-5857

Boeing Commercial             Trade Debt                $642,102
Airplane Group
Attn: General Counsel
Boeing World Headquarters
100 North Riverside
Chicago, Illinois 60606
Tel: (312) 544-2000

MGM Mirage                    Trade Debt                $627,437
3600 Las Vegas
Boulevard South
Las Vegas, NV 89109
Tel: (702) 693-7120

Oks Co Ltd. KIX               Airport/                  $621,199
Airport Authority             Government
Kansai International Airport  Authorities
I-Banchi, Senshu-kuko
Kita, Izumisano-Shi
Osaka 549-8501, Japan
Tel: 81 724-22-2500

Jasco Heat Treating Inc.      Trade Debt                $617,010
P.O. Box 188
Fairport, NY 14450

Atlas Air Entertainment       Trade Debt                $577,776
410 West Arden Ave
Suite 206
Glendale, CA 91203

Abacus Distribution           Trade Debt                $565,918
Systems Pte.
Attn: Aileen Chan
Acct. Manager-Airline Sales
Abacus Plaza
3 Tampines Central 1, #08-01
Singapore 529540

Globe Services                Trade Debt                $565,000
Globe Ground Services
P.O. Box 9647
Uniondale, NY 11555


NVE INC: Wants to Employ Parillo Russo as Accountant
----------------------------------------------------
NVE Inc. asks the U.S. Bankruptcy Court for the District of New
Jersey for permission to employ Parillo, Russo & Grill as its
accountant.

Parillo Russo will:

   1) assist the Debtor in maintaining their books and records;

   2) assist in complying with the reporting requirements of the
      United States Trustee's office; and

   3) prepare all required stated and federal tax returns, and any
      other accounting services which may be required.

The Firm's current hourly rates:

      Designation                 Hourly Rate
      -----------                 -----------
      Partner                        $200
      Staff Accountant               $125
      Office Staff                    $75

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

Headquartered in Andover, New Jersey, NVE Inc. dba NVE
Pharmaceuticals, NVE Pharmaceuticals, Inc., NVE Enterprises, NVE
Enterprises, Inc., manufactures dietary supplements.  The Debtor
is facing lawsuits about its weight-loss products which contain
the now-banned herbal stimulant, ephedra.  The Debtor filed for
chapter 11 protection on August 10, 2005 (Bankr. D. N.J. Case No.
05-35692). Daniel M. Stolz, Esq., at Wasserman, Jurista & Stolz,
P.C., represent the Debtor.  When the Debtor filed for chapter 11,
it listed $10,966,522 in total assets and $14,745,605 in total
debts


NVE INC: Look for Bankruptcy Schedules by Sept. 24
--------------------------------------------------
The Honorable Novalyn L. Winfield of the U.S. Bankruptcy Court for
the District of New Jersey extended until Sept. 24, 2005, NVE Inc.
dba NVE Pharmaceuticals, Inc.'s time within which it must file its
Schedules of Assets and Liabilities, Statement of Financial
Affairs and Lists of Executory Contracts required under Section
521(1) of the U.S. Bankruptcy Code.

As previously reported in the Troubled Company Reporter on
Aug 16, 2005, the Debtor tells the Court it was unable to file its
Schedules and Statement of Affairs when it filed for bankruptcy,
because of other pressing chapter 11 matters.

Headquartered in Andover, New Jersey, NVE Inc. dba NVE
Pharmaceuticals, Inc., manufactures dietary supplements.  The
Debtor is facing lawsuits about its weight-loss products which
contain the now-banned herbal stimulant, ephedra.  The Debtor
filed for chapter 7 liquidation proceeding on August 10, 2005
(Bankr. D. N.J. Case No. 05-35692).  When the Debtor filed for
chapter 7, it listed $10,966,522 in total assets and $14,745,605
in total debts.


NVE INC: Court Okays Murnane Brandt as Special Litigation Counsel
-----------------------------------------------------------------
The Honorable Novalyn L. Winfield of the U.S. Bankruptcy Court for
the District of New Jersey gave NVE Inc. dba NVE Pharmaceuticals,
Inc., approval to employ Murnane Brandt as its special litigation
counsel.

As previously reported in the Troubled Company Reporter on Aug.
15, 2005, Murnane Brandt will defend the Debtor in more than 114
wrongful death and personal injury actions pending throughout the
country.  Also, the Firm is familiar with the litigation pending
against the Debtor.

Steven J. Kirsch, Esq., Murnane Brandt partner, discloses the
Firm's hourly bill rates:

      Professional/Designation     Hourly Rate
      ------------------------     -----------
      Steven Kirsch                   $220
      Andrew T. Shern                 $175
      Thomas J. Norby                 $175
      Debra Filteau                   $175
      Timothy M. Peters               $175
      Susan Docherty                  $175
      Robert W. Murnane               $175
      Paralegals                      $100

Headquartered in Andover, New Jersey, NVE Inc. dba NVE
Pharmaceuticals, Inc., manufactures dietary supplements.  The
Debtor is facing lawsuits about its weight-loss products which
contain the now-banned herbal stimulant, ephedra.  The Debtor
filed for chapter 7 liquidation proceeding on August 10, 2005
(Bankr. D. N.J. Case No. 05-35692).  When the Debtor filed for
chapter 7, it listed $10,966,522 in total assets and $14,745,605
in total debts.


OMNI CAPITAL: Wants to Hire Foley Bryant as Bankruptcy Counsel
--------------------------------------------------------------
Omni Capital Limited Partnership asks the U.S. Bankruptcy Court
for the Western District of Kentucky for permission to employ
Foley Bryant & Holloway, PLLC as its general bankruptcy counsel.

Foley Bryant will:

   1) advise the Debtor of its powers and duties as a debtor in
      its bankruptcy proceeding;

   2) advise and consult the Debtor concerning questions arising
      in the conduct of the administration of its estate and
      concerning its rights and remedies with regard to the
      estate's assets and the claims of secured, preferred and
      unsecured creditors and other parties in interest;

   3) assist in the preparation of pleadings, motions, notices and
      orders that are required for the orderly administration of
      the Debtor's estate;

   4) consult and advise the Debtor in connection with the
      operation and management of its business and properties; and

   5) perform all other legal services to the Debtor that are
      necessary in its chapter 11 case.

Wm. Stephen Reisz, Esq., a Member of Foley Bryant, is the lead
attorneys for the Debtor.  Mr. Reisz disclosed that his Firm
received a $6,000 retainer.  Mr. Reisz charges $200 per hour for
his services.

Foley Bryant assures the Court that it does not represent any
interest materially adverse to the Debtor or its estate.

Headquartered in Louisville, Kentucky, Omni Capital Limited
Partnership filed for chapter 11 protection on Sept. 9, 2005
(Bankr. W.D. Ky. Case No. 05-36490).  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


OWENS CORNING: Gets Court Nod to Pay $106 Million to Pension Plan
-----------------------------------------------------------------
Judge Fitzgerald of the U.S. Bankruptcy Court for the District of
Delaware authorized Owens Corning to contribute to Owens Corning
Merged Retirement Plan:

    -- $39.1 million and to pay Pension Benefit Guaranty
       Corporation variable rate premiums totaling $2.3 million in
       October 2005; and

    -- $44.7 million in 2006 and to pay PBGC variable rate
       premiums totaling $2.5 million in 2006, assuming no
       material changes in the current applicable pension
       guidelines and regulations.

The Pension Plan is a Employee Retirement Income Security Act of
1974 defined benefit pension plan qualified under the Internal
Revenue Code.  The Pension Plan has 28,400 participants.

The Pension Plan covers eligible salaried and hourly employees.
When a Plan Participant retires, the Pension Plan provides a
pension benefit based on formulas set forth in the plan document.
A participant's benefit, whether paid as an annuity or lump sum,
is independent of the Pension Plan's investment performance.

For most participating hourly employees, the benefit formulas
typically provide a monthly pension at retirement of a certain
dollar amount multiplied by years of service.  The retirement
formula varies by employee group and can be different for past
and future years of service.  For most hourly employees, benefits
earned for service after January 1, 1995, can only be received in
the form of an annuity; a lump sump option may be available on
benefits earned prior to January 1, 1995.

Before January 1, 1996, salaried employees were covered by a
traditional final average pay pension formula.  The formula
provided a monthly benefit at retirement based on a percentage
determined by the average compensation carried over the prior
three years.

On January 1, 1996, the salaried pension formula was converted to
a cash balance formula.  Cash balance accounts work like savings
accounts.  They grow monthly by Pay or Service Credits and
Interest Credits.  The Pay or Service Credits are based on
defined percentages of covered compensation or defined dollar
amounts.  The Interest Credits are based on five-year U.S.
Treasury rates.  When the employment relationship ends,
participants may receive the value of their benefit in a lump sum
or an annuity.

Headquartered in Toledo, Ohio, Owens Corning --
http://www.owenscorning.com/-- manufactures fiberglass
insulation, roofing materials, vinyl windows and siding, patio
doors, rain gutters and downspouts.  The Company filed for chapter
11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837).
Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom,
represents the Debtors in their restructuring efforts.  At Sept.
30, 2004, the Company's balance sheet shows $7.5 billion in assets
and a $4.2 billion stockholders' deficit.  The company reported
$132 million of net income in the nine-month period ending
Sept. 30, 2004.  (Owens Corning Bankruptcy News, Issue No. 115;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


PBI MEDIA: S&P Rates $78 Million 2nd-Lien Term Loan at CCC+
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to PBI Media Inc.  At the same time, Standard &
Poor's assigned its 'B' bank loan rating and a recovery rating of
'3' to the company's $245 million first-priority senior secured
credit facilities, indicating an expected meaningful recovery of
principal (50%-80%) in the event of a default.  The first-lien
bank facilities consist of a $60 million revolving credit facility
due 2011 and a $185 million term loan due 2012.

Standard & Poor's also assigned its 'CCC+' rating and a recovery
rating of '5' to the company's $78 million second-lien term loan
due 2013, indicating the expectation of a negligible recovery of
principal (less than 25%) in the event of default.  The outlook is
stable.

Proceeds of the $263 million in bank term loans will be used to
help fund the acquisition of PBI by Wasserstein & Co., Highfields
Capital Management LP, and other investors, for $385 million,
representing a 9.9x EBITDA multiple.  The acquiring companies are
investing $131.8 million in common equity.

PBI Media's total debt, pro forma for the acquisition, was $263
million at June 30, 2005.  The New York, New York-based company is
a leading business-to-business communications concern.

"The ratings reflect the financial risk resulting from the highly
leveraged acquisition of the company, cyclical operating
performance, and mature growth prospects for many of the company's
end markets," said Standard & Poor's credit analyst Hal F.
Diamond.

These factors are only partially offset by:

   * the company's good niche competitive positions in the trade
     publishing and exhibition industries;

   * diverse customer base; and

   * experienced management team.

Operations include:

   * 70 trade magazines,
   * 17 expositions, and
   * 5 information data products.

PBI is a relatively small concern despite being the fifth-largest
business-to-business media company, with good positions in various
targeted market segments.  The company publishes a diversified
portfolio of well-positioned controlled-circulation free business
magazines, but only 15 of its exhibitions target the same
industries as its 70 publications, providing limited cross-selling
opportunities to trade show exhibitors and magazine advertisers.


PERRYVILLE ENERGY: Court Approves Amended Disclosure Statement
--------------------------------------------------------------
The Honorable Henley A. Hunter of the U.S. Bankruptcy Court for
the Western District of Louisiana approved the Amended Disclosure
Statement explaining the Amended Chapter 11 Plan proposed by
Perryville Energy Partners, LLC, and Perryville Energy Holdings,
LLC.

Judge Hunter determined that the Amended Disclosure Statement
contains adequate information as required and defined by Sec. 1125
of the U.S. Bankruptcy Code.

Judge Hunter authorizes the Debtors to distribute and use the
Amended Disclosure Statement to solicit acceptances to the Amended
Plan.

                      Terms of the Plan

The Debtors will continue to operate as a going concern.  Current
management will run the Reorganized Debtors' businesses.

A disbursing officer will be appointed to make the distributions
under the Plan.

The claims of these banks under the June 7, 2001, Construction and
Term Loan Agreement:

   -- KBC Bank, N.V., New York Branch, agent and lender;
   -- Bayerische Hypo-und Vereinsbank AG, New York Branch;
   -- Australia and New Zealand Banking Group Limited;
   -- Credit Industriel et Commericial; and
   -- Dexia Credit Local, New York Agency

will be capped at $300,000, and will be paid from an escrow
account.

Mirant Corporation will receive $98.65 million pursuant to a
settlement agreement.

The legal, equitable or contractual rights of holders secured
claims will not be altered.

Holders of general unsecured claims will be paid in full on the
effective date or as soon as the Court allows their claim.

Holders will equity interests will retain ownership of their
securities.

Judge Hunter will consider confirmation of the Amended Plan on
September 28, 2005.  Objections, if any, should be filed with the
Court on or before September 21, 2005, 5:00 p.m.

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

     http://www.researcharchives.com/bin/download?id=050914042708

Headquartered in Pineville, Louisiana, Perryville Energy Partners,
LLC, owns an electric power plant and operates a regulated
electric utility services.  The Company and its affiliate,
Perryville Energy Holdings, LLC, filed voluntary Chapter 11
petitions on Jan. 28, 2004 (Bankr. W.D. La. Case No. 04-80110).
Barry N. Seidel, Esq., at King & Spalding, LLP, and David S.
Rubin, Esq., of Kantrow, Spaht, Weaver & Blitzer represent the
Debtors in their restructuring efforts.  When the Debtors filed
for protection from their creditors, they estimated more than
$100 million in total assets and debts.


PERSISTENCE CAPITAL: Case Summary & 9 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Persistence Capital LLC
        2222 Norfield Court
        Westlake Village, California 91361

Bankruptcy Case No.: 05-16450

Chapter 11 Petition Date: September 13, 2005

Court: Central District of California (San Fernando Valley)

Judge: Kathleen Thompson

Debtor's Counsel: Lawrence R. Young, Esq.
                  9530 East Imperial Highway #k
                  Downey, California 90242
                  Tel: (562) 803-4240

Total Assets: $85,000,000

Total Debts:  $28,602,241

Debtor's 9 Largest Unsecured Creditors:

   Entity                                      Claim Amount
   ------                                      ------------
   Persistence Family I, LLC                    $10,855,500
   Attn: Robert A. Coberly, Jr.
   2222 Norfield Court
   Westlake Village, CA 91361

   Bruinbilt, LLC                                $7,500,000
   Attn: Bard Howard
   1819 West Olive Avenue
   Burnak, CA 91506

   Persistence Friends, LLC                      $5,417,191
   Attn: Robert A. Coberly, Jr.
   2222 Norfield Court
   Westlake Village, CA 91361

   Persistence Friends II, LLC                     $402,000
   Attn: Robert A. Coberly, Jr.
   2222 Norfield Court
   Westlake Village, CA 91361

   Loeb & Loeb                                     $127,913

   Lloyd Chapman                                    $40,000

   Fields, Fehn & Sherwin                            $3,988

   Justice Finerman                                  $3,350

   Genau Design                                      $2,300


PHARMACEUTICAL FORMULATIONS: Gets Court Nod to Tap Claims Agent
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave
Pharmaceutical Formulations, Inc., permission to retain Delaware
Claims Agency LLC as its claims and noticing agent.

Delaware Claims specializes in providing consulting and data
processing services to chapter 11 Debtors in connection with the
administration, reconciliation and negotiation of claims and
solicitation of votes to accept or reject plans of
reorganizations.

As reported in the Troubled Company Reporter on Sept. 5, 2005,
the Debtor has in excess of 400 creditors and other parties-in-
interest who are expected to file proofs of claim.  The Debtor
believes that the assistance of Delaware Claims to prepare and
serve the notices on all creditors and parties-in-interest as well
as to docket and maintain the enormous number of proofs of claim
filed will avoid straining the resources of the Clerk's office.

Delaware Claims will:

   1) transmit certain notices to creditors and parties-in-
      interest;

   2) receive, docket, scan, maintain and photocopy claims filed
      against the Debtor;

   3) assist the Debtor in the distribution of solicitation
      materials;

   4) receive, review and tabulate ballots cast in accordance with
      voting procedures approved by the Court; and

   5) assist the Debtor with certain administrative functions
      relating to its chapter 11 plan.

The Firm will bill the Debtor at these hourly rates:

          Designation                   Hourly Rate
          -----------                   -----------
          Senior Consultants               $130
          Technical Consultants            $115
          Associate Consultants            $100
          Processors and Coordinators       $50

Joseph L. King, vice president of Delaware Claims, assures the
Court that the firm is "disinterested" as that term is defined in
Section 101(14) of the U.S. Bankruptcy Code.

Headquartered in Edison, New Jersey, Pharmaceutical Formulations,
Inc. -- http://www.pfiotc.com/-- is a publicly traded private
label manufacturer and distributor of nonprescription over-the-
counter solid dose generic pharmaceutical products in the United
States.  The Company filed for chapter 11 protection on July 11,
2005 (Bankr. Del. Case No. 05-11910).  Matthew Barry Lunn, Esq.,
and Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor
LLP, represent the Debtor in its chapter 11 proceeding.  As of
Apr. 30, 2005, the Debtor reported $40,860,000 in total assets and
$44,195,000 in total debts.


PIONEER NATURAL: Prices Tender Offer for 5.875% Senior Notes
------------------------------------------------------------
Pioneer Natural Resources Company (NYSE:PXD) has established the
Total Early Payment for each $1,000 principal amount outstanding
of its 5.875% Senior Notes due 2012 (CUSIP No. 299900 AD 2) for
which Pioneer previously announced an offer to purchase.

In connection with the Tender Offer, Pioneer is soliciting
consents to proposed amendments to the indenture governing the
Notes.  The proposed amendments will permanently remove
substantially all of the operating restrictions contained in the
indenture governing the Notes.  Holders tendering their Notes will
be deemed to have delivered a consent to the proposed amendments.

Assuming an early settlement date of September 20, 2005, the
consideration for each $1,000 principal amount of the Notes
validly tendered and not validly withdrawn prior to 5:00 p.m., New
York City time, today, September 15, 2005, will be $1,061.15,
which includes a consent payment of $30.

In order to encourage holders to tender early, Pioneer is offering
a consent payment of $30 per $1,000 principal amount of the Notes
to holders who validly tender their Notes and give their consent
to the proposed amendments before the Consent Date.  Holders who
validly tender their Notes and give their consent to the proposed
amendments before the Consent Date will be entitled to receive the
Total Early Payment. The Tender Offer expires at 12:00 midnight,
New York City time, on Thursday, September 29, 2005.  Holders who
validly tender their Notes and give their consent to the proposed
amendments after the Consent Date but before the Expiration Date
will be entitled to receive only the tender price, which is the
Total Early Payment less the consent payment of $30.  Pioneer will
also pay accrued and unpaid interest on the Notes accepted in the
Tender Offer to, but not including, the applicable settlement
date.

Today, the Company will pay the semi-annual interest payment on
the Notes to holders of record of the Notes on September 1, 2005.

Pioneer has engaged D.F. King & Co., Inc., to act as information
agent in connection with the Tender Offer.  Requests for copies of
the Offer to Purchase and Consent Solicitation Statement and
questions regarding the Tender Offer may be directed to D.F. King
& Co., Inc. at 1(800)859-8509.  Pioneer has engaged Goldman, Sachs
& Co. to act as dealer managers in connection with the Tender
Offer and as solicitation agent for the consent solicitation.
Questions regarding the Tender Offer and the consent solicitation
may be directed to Goldman, Sachs & Co. at 1(800)828-3182.

Pioneer Natural Resources Company -- http://www.pioneernrc.com/--  
is a large independent oil and gas exploration and production
company with operations in the United States, Argentina, Canada
and Africa.  Pioneer's headquarters are in Dallas, Texas.

Moody's rates Pioneer Natural's subordinated debt at Ba1 and
preferred stock at Ba2.


POINT TO POINT: Court Okays AGS Capital as Management Consultant
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Missouri
gave Point to Point Business Development, Inc., approval to employ
AGS Capital, LLC, as its management consultant.

AGS Capital will perform these six services:

   (a) management consulting;
   (b) crises intervention;
   (c) turnaround consulting;
   (d) business development;
   (e) accounting; and
   (f) infrastructure provision.

Scott Weaver, a partner at AGS Capital, LLC, discloses that the
Firm will receive a $5,000 flat fee plus reimbursement of pocket
expenses.  This is in lieu of the compensation for $300 per hour.

Mr. Weaver tells the Court that he owns the shares of P2P Capital
Partners, Inc.  P2P Capital acquired 100% of the shares of the
Debtor before the bankruptcy filing.

Based in Liberty, Missouri, Point to Point Business Development,
Inc. -- http://www.P2PMRO.com/-- says it helps clients lower
costs through its maintenance, repair and operating (MRO) Web
platform which enables manufacturers to streamline the process of
supply ordering, reduce excess in inventory management, and more
efficiently manage supply chains.  Point to Point filed for
chapter 11 protection (Bankr. W.D. Mo. Case No. 05-44642) on
July 7, 2005.  Cynthia F. Grimes, Esq., at Grimes & Rebein, L.C.,
represents Point to Point.  The Debtor estimated at the time of
the chapter 11 filing that it had less than $50,000 in assets and
more than $1 million of debt.


QUESTOR PARTNERS: Closes $454 million GeoLogistics Sale
-------------------------------------------------------
Questor Partners Fund II, L.P., reports it has closed its sale of
international freight forwarder GeoLogistics Corp. to PWC
Logistics of Kuwait for US $454 million.

GeoLogistics, based in Santa Ana, Calif., provides a range of
freight management and customized logistics solutions in nearly
100 countries.  It has annual revenues of approximately $1.6
billion and more than 5,700 employees throughout the world.

Questor acquired a majority interest in GeoLogistics in November
2001 through an investment of US $67.5 million.  At the time,
GeoLogistics was unprofitable and deep in debt.

"Now that GeoLogistics once again is strong financially and
operationally, we are very pleased that PWC Logistics has added
the company to its world-class global contract logistics
capabilities," said John Janitz, co-managing Principal of Questor
Management Company.

"GeoLogistics is a great example of the value Questor can create
by bringing capital and expertise to bear on troubled and
underperforming companies.  The Questor deal team, led by Rob
Denious and Kevin Prokop, and GeoLogistics management, led by CEO
Bill Flynn, have done a remarkable job of driving improved
operating performance at GeoLogistics."

Under Questor's ownership, GeoLogistics implemented a broad-based
operational turnaround that refocused its business on core
international freight forwarding operations.  It also improved
productivity and reduced costs by lowering overhead expenses and
by consolidating underperforming offices.  Questor said that these
initiatives improved operating performance and margins.  In
addition, investments in sales capabilities contributed to
substantial revenue growth in 2004.

GeoLogistics engaged Citigroup and Bear Stearns as financial
advisors and Drinker Biddle & Reath as legal advisor.  Banc of
America Securities and Shearman & Sterling advised PWC Logistics
on the transaction.

Questor Management Company LLC manages the Questor Partners Funds,
which have more than $1.1 billion of committed equity capital.
Questor's objective is to acquire underperforming businesses that
are in transition and offer the potential for superior returns
with the application of appropriate levels of capital and
management expertise.

PWC Logistics - http://www.pwclogistics.com/-- is a global
provider of end-to-end supply chain solutions.  Through its
network of warehousing facilities and transportation and freight
management services, PWC Logistics provides its customers with
flexible solutions tailored to meet their business needs.  PWC
Logistics' customers span a wide range of industries, including
apparel and footwear; automotive; consumer and industrial
electronics; consumer packaged goods; engineering and
construction; exhibits and entertainment; food and grocery;
governmental and military organizations; and oil and
petrochemicals.

GeoLogistics Corporation -- http://www.geo-logistics.com-- is a
global leader in non-asset based logistics, with an extensive
network of operations in nearly 100 countries around the world.
GeoLogistics offers its customers a broad range of freight
management and customized solutions backed by a single, company-
wide IT system.


QUESTRON TECHNOLOGY: Court Approves Disclosure Statement
--------------------------------------------------------
The Honorable Peter Walsh of the U.S. Bankruptcy Court for the
District of Delaware approved the Amended Disclosure Statement
explaining the Amended Plan of Liquidation filed in the chapter 11
case of QUTI Corp. fka Questron Technology, Inc.

John Forte, the Debtor's chapter 11 trustee, filed the Amended
Plan and the Disclosure Statement on August 24, 2005.

Judge Walsh determined that the Disclosure Statement contained the
right amount of the right kind of information to allow the
creditors to make an informed decision on the plan.

The Chapter 11 Trustee is now authorized to distribute the
Disclosure Statement and solicit acceptances for the Plan.

                     Terms of the Plan

The Plan calls for the establishment of a Plan Trust.  The Plan
Trust will liquidate the Debtor's assets and distribute the
proceeds to the Debtor's creditors.

Holders of these claims will be paid in full:

   * allowed administrative claims amounting to $475,000;
   * allowed priority tax claims aggregating $150,000;
   * other allowed priority claims for $50,000; and
   * prepetition lenders claims amounting to $342,210.

Miscellaneous secured creditors, owed $345,000 and holding valid,
duly-perfected and non-avoidable security interests and liens on
the Debtor's assets, will receive, at the Trustee's option,
either:

         * the net proceeds from the disposition of their
           collateral; or

         * some other treatment agreed to between the parties.

General unsecured creditors, owed $37,400,000, and senior
subordinated noteholders, owed $47,600,000, will receive their pro
rata share of all remaining cash on hand and any proceeds from
avoidance actions.  The Trustee projects unsecured creditors and
sub debt holders will recover 2% to 5% of their claims.

Intercompany claims will be extinguished.

Interest holders of 750,000 preferred shares and 9,202,553 common
shares will receive no distribution under the Plan.

                  Oct. 12 Confirmation Hearing

The Court will convene a plan confirmation hearing on October 12,
2005, at 10:00 a.m.  Objections to the Plan, if any, must be filed
by September 28, 2005, at 4:00 p.m.

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

     http://www.researcharchives.com/bin/download?id=050914042317

Questron Technology Inc., was a leading provider of supply chain
management solutions and professional inventory logistics
management programs for small parts commonly referred to as "C"
inventory items (fasteners and related products) focused on the
needs of Original Equipment Manufacturers.  The Company and its
debtor-affiliates filed for Chapter 11 protection on
February 03, 2002. Evelyn Rodriguez, Esq., at Kasowitz Benson
Torres & Friedman LLP and Amanda Kernish, Esq., at Richards
Layton & Finger PA, represent the Debtors.  When the Company filed
for protection from its creditors, it listed $178,415,000 in
assets and $131,039,000 in debts.


RELIANCE GROUP: RIC Liquidator's Second Quarter 2005 Status Report
------------------------------------------------------------------
M. Diane Koken, the Insurance Commissioner of the Commonwealth of
Pennsylvania, issued a Status Report on the liquidation of
Reliance Insurance Company for the Second Quarter 2005.

In her capacity as RIC Liquidator, Ms. Koken reports that, at the
end of the second quarter 2005, the estate held $5,168,500,000 in
assets.  The most significant balance was $2,688,700,000,
relating to reinsurance receivables and future reinsurance
recoverables.  This figure was reduced from a $2,970,600,000
estimate in the First Quarter Report.  Total liabilities are
estimated at $8,338,200,000, with the most significant balance,
$4,842,400,000, attributable to loss and loss adjustment expenses
on direct business.

The Statement reflects $1,805,100,000 in losses and loss
adjustment expenses paid by Guaranty Associations.  These figures
include data reported to the estate through an automated
interface on a time lag basis.  Since not all states were
reporting through this system at the end of the quarter, actual
payments by GAs are higher.  This amount includes $1,179,200,000
in losses and loss adjustment expenses on assumed reinsurance
business, which are Class C general creditor claims.  The net
deficit produced is $3,169,700,000.

Short and intermediate duration marketable investments increased
from $611,800,000 to $798,100,000 at the end of the period.
Reinsurance collections, the primary source of funds, totaled
$196,800,000 for the three-month period between January 1, 2005,
and March 31, 2005.  Loss adjustment expenses totaled
$2,700,000.  Operating expenses reached $32,400,000, including
$3,200,000 in GA reimbursed expenses.

At March 31, 2005, RIC held Symbol Technologies common stock
with a market value of $113,000,000.  At August 9, 2005, the
market value of the stock was $8.89 per share.  RIC will continue
to sell shares as appropriate, depending on market conditions.

RIC estimates current and future premium receivables at
$76,500,000.  This includes receivables arising from large
deductible policies whose ownership is disputed.  At March 31,
2005, reinsurance receivables and recoverables totaled
$2,688,700,000, down by $281,900,000.  RIC holds about
$727,500,000 in collateral as security.  Total reinsurance
collections for the first quarter of 2005 amounted to
$196,800,000.  Collections since the date of liquidation total
$1,400,000,000.

During the first quarter of 2005, the Commonwealth Court approved
commutations and settlements for 1995 and 1996 Accident Year
Aggregate Excess of Loss reinsurance agreements.  RIC collected
the remaining balances due under the 1997 Accident Year Aggregate
Excess of Loss agreement.  Collectively, RIC settled balances of
$147,000,000 during the first quarter of 2005 for these three
Agreements.  The majority of balances were settled with cash paid
from trust accounts held by RIC.  The balance of reinsurance
collections for the first quarter of $50,000,000, represents
payments on ordinary billings.

The inventory of billed reinsurance receivables is $494,000,000
as of March 31, 2005.  Of this amount, approximately
$150,000,000 relates to pre-liquidation balances.  This balance
consists of amounts in both formal and informal dispute, amounts
available to reinsurers as legitimate offsets and balances due
from insolvent and financially distressed companies.

Data feeds from the Guaranty Associations providing paid and
outstanding claim information were loaded into RIC's systems in
April 2003.  The GA data plus the Notices of Determination
generated about $1,100,000,000 of post-liquidation billings, of
which $344,000,000 was unpaid at March 31, 2005.  The post-
liquidation amount readily available to collect is estimated at
$226,000,000.  The amount collected will ultimately be much lower
due to disputes, offsets and insolvencies.

Certain RIC employees coordinate with reinsurers to provide
documentation, resolve disputes and verify proper offsets.  RIC
continues to seek cooperation and support from insureds and the
GAs in providing timely, complete and accurate claims
documentation and data to support reinsurance billings that will
enhance cash flow and maximize reinsurance collectibility and
distributions.  RIC is aggressively attempting to collect
reinsurance billings and is in constant contact with its major
reinsurers.  Formal dispute resolution actions continue against
several reinsurers with overdue balances, including various
Underwriters at Lloyd's and Houston Casualty Company.

During the first half of 2005, RIC completed 19 on-site
reinsurance audits at various GAs, bringing the total of onsite
GA reinsurance audits to 85 since the inception of Liquidation.
RIC expects the pending disputes to be resolved over the next six
to 12 months.

Ms. Koken notes that reinsurer financial strength is a problem
and will continue to be a major concern for the duration of the
RIC liquidation proceedings.  RIC is monitoring the financial
condition of its major reinsurers and will attempt to settle its
overall exposure with distressed companies through commutation.
However, significant write-offs for uncollectible reinsurance
are expected.

In the first half of 2005, RIC entered into four agreements to
sell property in Virginia for combined net proceeds of
$40,000,000.  The Commonwealth Court has approved all contracts
and RIC expects the transactions to close in 2006.

At June 30, 2005, RIC employed 334 people in Philadelphia and New
York City.  Since January 2005, staff has been reduced in most
areas with a net decrease of 22 employees.

The Liquidator has devoted considerable resources to general
asset recovery through numerous plaintiff actions to recover
assets owed to the estate.  These include litigation and
arbitration for:

   (1) collections from agencies, TPAs, brokers or program
       managers -- approximately $34,000,000 sought;

   (2) claims in bankruptcy against financially distressed
       insureds -- approximately $133,000,000 sought;

   (3) subrogation matters -- approximately $32,000,000 sought;

   (4) premium and large deductible collections -- approximately
       $48,000,000 sought;

   (5) reinsurance recoveries -- approximately $54,000,000
       sought; and

   (6) other litigation -- approximately $2,000,000 sought.

In the second quarter of 2005, the Liquidator recovered nearly
$29,00,000 through legal actions, with total 2005 recoveries in
excess of $33,200,000.  Since January 2003, the Liquidator has
recovered more than $133,200,000 through legal actions, a portion
of which benefits the GAs.

RIC is receiving regular quarterly reports from most GAs and
administrative expenses are reimbursed by RIC.  Total allowable
GA administrative expenses paid by RIC from the start of
liquidation through June 30, 2005, is $123,400,000.

Through June 30, 2005, total paid losses and estimated loss
reserves reported from the GAs to RIC are $1,900,000,000 and
$2,200,000,000.  Approximately 99% of GA payments have been
matched to RIC's systems.

Through the end of March 2005, RIC received 156,596 proofs of
claim, of which 5,601 were filed after the deadline.  RIC mailed
176,831 status letters and issued 54,133 Notices of
Determination.  Of the POCs remaining to be addressed, more than
47,000 relate to contingent POCs which may not become absolute
for a long time, perhaps several years.

Through June 30, 2005, the Liquidator has allowed $256,000,000
for all NODs issued.  The Liquidator has received 425 objections
to the NODs.  Of those objections, more than 197 have been
resolved and 228 are in the objection resolution process.

The Liquidator has established a process to review requests for
the release of collateral held to secure obligations for direct
insureds, reinsurers and premium receivables.  As of June 30,
2005, RIC held collateral of approximately $1,500,000,000 to
secure current and future obligations.

For the six months ended June 30, 2005, 115 accounts were
reviewed, resulting in the release of $59,300,000 in collateral
for 67 accounts.  Of the remaining accounts, 27 were denied
collateral release and other resolutions were reached for 21
accounts.

A committee was established to review and recommend action for
cut-through requests.  Since implementation of the guidelines,
26 cut-through requests have been submitted to the Liquidator.
Of these, 15 have been approved, eight were disapproved, two were
withdrawn and one is pending.  Of the eight disapprovals, two
were never contested, the Court disapproved one after a contest,
one was approved by the Court with a decision under appeal by the
Liquidator in the Pennsylvania Supreme Court, and four are being
decided before referees.

           Reliance Insurance Company (In Liquidation)
                  Special Purpose Balance Sheet
                        At March 31, 2005

Assets

  Short-term Investments                      $798,100,000
  Symbol Technologies Common Stock             113,000,000
  Investments in Trust - Secured Creditors      85,000,000
  Real Estate Investments                       40,400,000
                                           ---------------
  Invested Assets                            1,036,500,000

  Investments in Affiliates                     79,200,000
                                           ---------------
Total Invested Assets                        1,115,700,000

  Premium Balances                              76,500,000
  Reinsurance Receivable                       494,000,000
  Reinsurance Recoverable                    2,194,700,000
  Early Access to Guaranty Associations      1,203,800,000
  Other Assets                                  83,800,000
                                           ---------------
Total Assets                                $5,168,500,000
                                           ===============

Liabilities

  Loss & Loss Adjustment Expenses - GAs      1,805,100,000
  Loss & Loss Adjustment Expenses - Direct   4,842,400,000
  Loss & Loss Adjustment Expenses - Assumed  1,179,200,000
  Notices of Determination Issued               57,300,000
  Funds Held                                   100,900,000
  Other Liabilities                            353,300,000
                                           ---------------
Total Liabilities                            8,338,200,000
                                           ---------------
Net Deficit                                ($3,169,700,000)
                                           ===============


           Reliance Insurance Company (In Liquidation)
                      Statement of Cash Flow
                 January 1, 2005 to March 31, 2005

Beginning Balance                             $611,800,000

Sources:
  Reinsurance Collections                      196,800,000
  Premium Collections                            6,600,000
  Claim Recoveries                               5,700,000
  Sale Proceeds from investments                 1,300,000
  Released From Trust                            2,000,000
  Symbol Technologies Stock Sales                8,700,000
  Investment Depreciation                       (1,200,000)
  Other                                          1,500,000
                                           ---------------
Total Sources                                  221,400,000
                                           ---------------

Uses:

  Loss & Loss Adjustment Expenses               (2,700,000)
  Operating Expenses                           (32,400,000)
                                           ---------------
Total Uses                                     (35,100,000)
                                           ---------------
Net Increase in Funds                          186,300,000
                                           ---------------
Ending Balance                                $798,100,000
                                           ===============

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


RISK MANAGEMENT: Resolves License Dispute with Ontario Systems
--------------------------------------------------------------
The Hon. Kay Woods of the U.S. Bankruptcy Court for the Northern
District of Ohio, Eastern Division, approved Risk Management
Alternatives, Inc., and its debtor affiliates' assumption of two
software license agreements with Ontario Systems Corporation and
the subsequent assignment of these agreements to NCOP Capital
Resource, LLC.

The Debtors asked the Bankruptcy Court to approve the assumption
and assignment of the FACS(R) and GCBS Software Licensing
Agreements in connection with the proposed sale of substantially
all of their assets to NCOP.  NCOP has presented a $150 million
stalking horse bid for the Debtors' assets.

The license agreements grant the Debtors a non-exclusive, non-
transferable, license to use Ontario Systems' software together
with user manuals, related documentation, and certain enhancements
and program modifications.

Ontario Systems objected to the proposed assumption of the
agreements because of alleged discrepancies in the cure amounts
due to them.  In the assumption schedule, the Debtors claimed that
the aggregate cure amount under the two agreements is $89,966.
Ontario Systems says the correct aggregate cure amount should be
$216,610.

Ontario Systems further opposed the assumption of the agreements
because NCOP could assert that existing agreements between NCOP
and Ontario Systems may be cancelled and replaced by the assigned
agreements.  Ontario Systems claims that this would produce a
windfall for NCOP with no attendant benefit to the Debtors'
estates.

The Debtors, NCOP and Ontario Systems negotiated to consensually
resolve all issues arising from the proposed assumption of the
agreements.  Pursuant to modified terms of the agreements, the
GCBS license will be transferred to NCOP at no additional cost.
Maintenance fees for the GCBS license will remain the same as
current fees paid under the agreement.

The Debtors also agree to satisfy and cure the arrearages due to
Ontario Systems with a $146,500 payment, payable two days after
the closing of the sale to NCOP.

Headquartered in Muncie, Indiana, Ontario Systems -
http://www.ontariosystems.com/-- provides receivables management
information systems to organizations that manage large volumes of
accounts receivables. Its receivables management products include
the FACS(R), CT Vision(R) and Artiva(TM) systems.

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.


RUFUS INC: Section 341(a) Meeting Slated for September 16
---------------------------------------------------------
The U.S. Trustee for Region 3 will convene a meeting of Rufus,
Inc.'s creditors at 10:00 a.m., tomorrow, Friday, September 16,
2005, at the Office of the U.S. Trustee, located at the J. Caleb
Boggs Federal Bldg., 2nd Floor, Room 2112, in Wilmington,
Delaware.  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 Meriden, Connecticut, Rufus, Inc., sells dogs,
dog food, supplies and accessories.  The Debtor also operates a
chain of six retail stores in the Northeastern United States.  The
Company filed for chapter 11 protection on Aug. 10, 2005 (Bankr.
D. Del. Case No. 05-12218).  Edward J. Kosmowski, Esq., and Ian S.
Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP,
represent the Debtor in its bankruptcy proceeding.  When the
Debtor filed for protection from its creditors, it listed
$1.8 million in total assets and $12.7 million in total debts.


RUFUS INC: Wants to Walk Away from Nine Real Property Leases
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave Rufus,
Inc., permission to reject nonresidential real property leases.

These property leases are identified as:

   a) store A-103 within the Palisades Center, in West Nyack,
      New York;

   b) space B-318 within the Holyoke Mall, in Holyoke,
      Massachusetts;

   c) space N-10 within the King of Prussia Plaza, in King of
      Prussia, Pennsylvania;

   d) space 2024A within the South Shore Plaza, in Braintree,
      Massachusetts;

   e) space E-207A within the Square One Mall, in Saugus,
      Massachusetts;

   f) property within the Poughkeepsie Galleria, in Poughkeepsie,
      New York;

   g) space 09 of the Aviation Mall in Queensbury, New York;

   h) property located at 55 Carter Drive in Edison, New Jersey;
      and

   i) space N-109 within the Crossgates Mall in Albany, New York.

Each of the leases was previously housed in a retail store
location of the Debtor with the exception of the Edison property,
which formerly housed the Debtor's administrative offices.  The
Debtor decides to walk away from the leases in its effort for
costs cutting and after examining various leases, including the
rental obligations and store revenues.

Furthermore, the Debtor no longer has any economically viable uses
for the properties and has determined that the leases have no
residual value.

Headquartered in Meriden, Connecticut, Rufus, Inc., sells dogs,
dog food, supplies and accessories.  The Debtor also operates a
chain of six retail stores in the Northeastern United States.  The
Company filed for chapter 11 protection on Aug. 10, 2005 (Bankr.
D. Del. Case No. 05-12218).  Edward J. Kosmowski, Esq., and Ian S.
Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP,
represent the Debtor in its bankruptcy proceeding.  When the
Debtor filed for protection from its creditors, it listed
$1.8 million in total assets and $12.7 million in total debts.


RUFUS INC: U.S. Trustee Appoints 3-Member Creditors Committee
-------------------------------------------------------------
The United States Trustee for Region 2 appointed three creditors
to serve on the Official Committee of Unsecured Creditors in
Rufus, Inc.'s chapter 11 case:

     1. RSM Construction Services
        Attn: Stephen Sargenti
        45 First Street
        Lodi, New Jersey 07644
        Phone: (973) 253-9300, Fax: (973) 253-9330;

     2. Innovative Print & Media Group
        Attn: Robert Andrew Fisher
        749 Pike Springs Road
        Phoenixville, Pennsylvania 19460
        Phone: 610-489-4800, Fax: 610-454-2903

     3. Valley Cottage Animal Hospital
        Attn: Michele L. Wojtunik
        202 Route 303
        Valley Cottage, New York 10989
        Phone: 845-268-9263, Fax: 845-268-9487

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

Headquartered in Meriden, Connecticut, Rufus, Inc., sells dogs,
dog food, supplies and accessories.  The Debtor also operates a
chain of six retail stores in the Northeastern United States.  The
Company filed for chapter 11 protection on Aug. 10, 2005 (Bankr.
D. Del. Case No. 05-12218).  Edward J. Kosmowski, Esq., and Ian S.
Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP,
represent the Debtor in its bankruptcy proceeding.  When the
Debtor filed for protection from its creditors, it listed
$1.8 million in total assets and $12.7 million in total debts.


SCHOOL SPECIALTY: S&P Places $650 Million Notes' Ratings at CCC+
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' corporate
credit rating to School Specialty Inc.  At the same time,
Standard & Poor's assigned a 'B+' rating and a recovery rating of
'1' to the company's $725 million senior secured bank loan,
indicating the expectation for full recovery of principal in the
event of a payment default.

At the same time, a CCC+ rating was assigned to $350 million
senior unsecured notes and $300 million subordinated notes.  The
outlook is negative.  Proceeds from the debt offerings and a $673
million equity contribution will be used to fund the purchase of
School Specialty by Bain Capital LLC and Thomas H. Lee Partners
LP.  Total debt is $1.059 billion.

"The ratings on School Specialty reflect very high debt leverage
after the LBO transaction, the company's participation in the
competitive and highly fragmented school supplies industry, and
the risks associated with its aggressive growth through
acquisitions," said Standard & Poor's credit analyst Robert
Lichtenstein.  "These factors are partially offset by the
company's leading market position and history of stable operating
performance."

School Specialty has a leading position in the $7 billion school
supplies industry, with a 15% market share, compared with about 2%
for the next-largest competitor.  The industry is highly
fragmented, comprising more than 3,300 marketers of school
supplies.  Also, office products companies and contract stationers
with significantly larger financial resources provide competition
in certain segments.

Still, the school supplies industry has stable growth prospects,
based on a growing population of K-12 students and favorable
trends in educational spending.  However, a weak economy can place
pressure on state budgets, which are the primary source of funding
for most of the company's customers, negatively affecting the
company's revenues and squeezing margins.

A key strength is School Specialty's ability to successfully
integrate acquisitions.  The company has made numerous
acquisitions since 1991.  Most recently the company acquired Delta
Education, a publisher of science curricula, for $272 million.
School Specialty is expected to continue to make strategic
acquisitions to enhance its product offerings where the margins
are higher than in its essentials business.  This strategy should
continue to improve operating efficiencies through:

   * economies of scale,
   * purchasing advantages, and
   * elimination of redundant operations.


SEAFOOD SERVICES: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Seafood Services, Inc.
        dba MacLeans Seafood
        10 North Front Street
        New Bedford, Massachusetts 02740

Bankruptcy Case No.: 05-18321

Type of Business: The Debtor is a wholesale distributor and
                  processor of seafood as swordfish, tuna,
                  lobster and jonah crab.  Jack Stewardson,
                  writing for The Standard-Times, relates that
                  Gordon's used to operate a clam-processing
                  facility at the 10 N. Front St. address.
                  Gordon's went out of business and returned the
                  property to Compass Bank.  In 1988, MacLeans
                  worked out a deal to buy the property.

Chapter 11 Petition Date: September 12, 2005

Court: District of Massachusetts (Boston)

Judge: William C. Hillman

Debtor's Counsel: Jennifer L. Hertz, Esq.
                  Duane Morris LLP
                  470 Atlantic Avenue, Suite 500
                  Boston, Massachusetts 02210
                  Tel: (617) 289-9200

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                     Nature of Claim       Claim Amount
   ------                     ---------------       ------------
James L. Mood Fisheries, LTP  Trade                     $226,000
Woods Harbor
Nova Scotia
Canada BOW2E0

R&L Fisheries, LTD            Trade                     $223,000
P.O. Box 113
Clark's Harbour
Nova Scotia
Canada BOW1P0

W Sears Seafood, LTD          Trade                     $207,000
P.O. Box 40
Shag Harbour
Nova Scotia
Canada BOW3B0

MJ Meats and Seafood          Trade                     $125,000

Eastern Overseas Marketing    Trade                      $73,000

Rockville Carrier, Ltd.       Trade                      $67,000

Oceanview Fisheries, LTD      Trade                      $64,000

Trenton Bridge Lobster Pound  Trade                      $59,711

E&E Foods                     Trade                      $56,149

Clean Fish, Inc.              Trade                      $49,008

Fleet Fisheries, Inc.         Trade                      $42,901

Jail Island Salmon            Trade                      $42,445

Harbour Marine Products, LTD  Trade                      $40,065

R&D Nickerson Fish Product,   Trade                      $38,750

True World Nova Scotia        Trade                      $35,954

United Fishing Agency         Trade                      $31,082

Seafreeze Ltd                 Trade                      $30,702

O.W. & B.S. Look Co., Inc.    Trade                      $29,911

Four Seas                     Trade                      $29,498

Arrowac Fisheries, Inc.       Trade                      $26,838


SOLUTIA INC: Equity Panel Fights Monsanto Over Complaint Dismissal
------------------------------------------------------------------
The Official Committee of Equity Security Holders appointed in the
chapter 11 cases of Solutia, Inc., and its debtor-affiliates
objects to Pharmacia Corporation and Monsanto Company's request to
the U.S. Bankruptcy Court for the Southern District of New York to
dismiss its adversary proceeding against Monsanto.

The premise of the Complaint is that the 1997 spin-off of Solutia
by Pharmacia Corporation (Old Monsanto) was a fraudulent transfer
in that the original Monsanto Company forced Solutia to take on
excessive liabilities and insufficient assets, such that Solutia
was destined to fail from its inception.

David A. Crichlow, Esq., at Pillsbury Winthrop LLP, in New York,
tells the Court that the Equity Committee asserts serious
allegations of wrongdoing by Pharmacia Corporation and Monsanto
Company in connection with the Spin-Off of Solutia, Inc.  The
Equity Committee wants the Court to disallow Pharmacia and
Monsanto's claims as well as reallocate substantial amounts of
legacy liabilities from the Debtors' balance sheet to that of
Pharmacia and Monsanto.  To date, the Equity Committee has been
the only party in the Debtors' bankruptcy that has been diligently
pursuing the facts surrounding the Spin-Off and the consequent
assignment by Pharmacia and Monsanto of billions of dollars of
liabilities to the Debtors, Mr. Crichlow says.

As previously reported, Monsanto, the Debtors and the Official
Committee of Unsecured Creditors Committee had entered into an
agreement-in-principle on a proposed reorganization plan.  Mr.
Crichlow contends that the Agreement-in-Principle would not only
"settle" any claims relating to Pharmacia and Monsanto's handling
of the Spin-Off, but would also give Monsanto the ability to
acquire more than half of the stock of the reorganized Debtors,
release Pharmacia from all potential liability arising from the
legacy environmental claims, and leave the existing public
shareholders with nothing.

"It is no wonder that Defendants now seek to dismiss the
Complaint and Objection, ostensibly in favor of allowing other
parties in the bankruptcy to pursue the claims presented," Mr.
Crichlow observes.  "However, their real hope is plainly that if
the Complaint and Objection were dismissed, they could escape the
consequences of their wrongdoing and continue to siphon value
from Solutia."

Mr. Crichlow contends that Pharmacia and Monsanto offer no reason
for ignoring the Equity Committee's lawsuit.  He says that the
Motion to Dismiss is fatally flawed and fails for four reasons:

    (1) Pharmacia and Monsanto do not confront the allegations of
        the Complaint and Objection.  Instead, they offer an
        alternate account of Solutia's creation and descent into
        bankruptcy that is demonstrably false and incomplete.
        Pharmacia and Monsanto's story also fails to address this
        central question: How can Pharmacia and Monsanto be
        permitted to assert proofs of claim for over $2 billion
        relating to environmental legacy liabilities when their
        Spin-Off era disclosures estimated that these liabilities
        amounted only to "as much as" $280 million?  Plainly,
        Pharmacia and Monsanto's earlier estimate was disastrously
        understated and investors were misled.  Moreover, even
        limited, pre-filing discovery indicates that Pharmacia
        secretly knew that its public estimates did not account
        for the full magnitude of the potential environmental
        liabilities.  Under these circumstances, equity will not
        permit Pharmacia and Monsanto to profit once again at
        stockholders' expense by asserting a claim for
        environmental liabilities that is at odds with their
        earlier public pronouncements.

    (2) Pharmacia and Monsanto improperly invite the Court to
        prejudge the highly detailed factual allegations of the
        pleading at the dismissal stage.  After declaring that the
        Complaint and Objection is "baseless, and contradicted by
        indisputable evidence" Pharmacia and Monsanto spend 16
        pages urging that Solutia failed not because of the self-
        serving way that Pharmacia structured the Spin-Off, but
        because Solutia's "management fail[ed] to protect either
        the business or its balance sheet."  However, in the
        context of a motion to dismiss, these disputed factual
        allegations are irrelevant.

    (3) In light of their plans to wipe out prepetition
        stockholders, Pharmacia and Monsanto make no sense when
        they argue that the Equity Committee lacks standing
        because stockholders have supposedly suffered no injury.
        Pharmacia and Monsanto also use broad-brush
        mischaracterizations of the Complaint and Objection,
        refashioning its allegations as necessary to suit their
        arguments.  Their standing and timeliness arguments never
        address the pleading's 14 counts and requests for relief
        on their own terms, as dismissal standards require.
        Pharmacia and Monsanto attack straw men of their own
        creation, not the Complaint and Objection that the Equity
        Committee actually pled.

    (4) When Pharmacia and Monsanto urge that the Complaint and
        Objection be dismissed or stayed in favor of other
        adversary proceedings, their arguments ring hollow.  In
        reality, those actions have been abandoned.  Even a
        cursory reading of the pleadings for the other suits
        demonstrates that the instant action is not substantially
        identical or even substantially similar to the prior
        actions.  The relief sought by the Equity Committee is
        broader, and seeks to return billions of dollars of value
        to the estate in a way that the other actions do not.
        Pharmacia and Monsanto's reliance on cases that
        purportedly prevent new parties from bringing the same
        claim where the interest of the new parties would be
        adequately protected in the original suit is misplaced.

Accordingly, the Equity Committee asks the Court to deny the
Motion to Dismiss.

                   Pharmacia & Monsanto Responds

Bruce R. Zirinsky, Esq., at Cadwalader Wickersham & Taft LLP, in
New York, points out that Pharmacia and Monsanto established with
indisputable documents that the factual allegations in the
Complaint are baseless.  Pharmacia and Monsanto also established
that virtually all of the claims asserted by the Equity Committee
are based on a theory that the Spin-off was a fraudulent
transfer.  According to Mr. Zirinsky, Pharmacia and New Monsanto
demonstrated that the Equity Committee is legally precluded from
prosecuting those claims because they are time-barred by the
applicable statutes of limitations, and the Equity Committee
lacks standing to assert these claims, which belong to the estate
and not to shareholders.

"The Equity Committee essentially ignores the substance of the
documents cited in the [Motion to Dismiss], which describe the
healthy financial condition of Solutia following the 1997 spin-
off as described by both Solutia's own management and objective
analysts in the market," Mr. Zirinsky argues.

The Equity Committee, Mr. Zirinsky continues, has failed to refer
the Court to any documents to support any of its conclusory and
baseless allegations of misconduct.  While Solutia, Pharmacia and
Monsanto produced thousands of pages of documents relating to the
Spin-off, the Equity Committee is only able to refer the Court to
two documents, which contradict the Equity Committee's
allegations.  Mr. Zirinsky notes that both documents make clear
that while there could be potential unknown future environmental
liabilities, based on facts then available, the estimates were
reasonable.

With respect to the Equity Committee's lack of standing to assert
fraudulent transfer claims, Mr. Zirinsky points out that the
Equity Committee concedes this point by not even attempting to
respond.  With respect to the timeliness of any claims based on
fraudulent transfers, the Equity Committee contends that the
statutes of limitations either have been tolled, or are not
applicable to claims based on equity.  Mr. Zirinsky refutes that
these assertions are baseless.  "The law is clear that the time
for bringing a claim for constructive fraudulent transfer may not
be equitably tolled," Mr. Zirinsky explains.  "The law is also
clear that a claim for fraudulent transfer may not be transformed
into a claim sounding in equity for the purpose of circumventing
the applicable statutes of limitations."

Mr. Zirinsky asserts that the Equity Committee has no statutory
right to bring, in effect, a class action on behalf of individual
shareholders.  In addition, even if the Equity Committee were to
be permitted to bring an action on behalf of individual
shareholders, the Complaint is wholly defective in alleging what
specific facts were withheld, and what specific facts each
investor relied on in making the decision to invest in Solutia's
stock.  To the extent the Equity Committee has filed the
Complaint on behalf of purportedly misled investors, the
Complaint must allege specific facts regarding each specific
investor, and the facts on which each investor relied.

Mr. Zirinsky insists that the Equity Committee fails, as a matter
of law, to respond to the fundamental defects of each of the
Counts contained in the Complaint.  The Court should dismiss the
Complaint in its entirety, he says.

Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications.  The Company
filed for chapter 11 protection on December 17, 2003 (Bankr.
S.D.N.Y. Case No. 03-17949).  When the Debtors filed for
protection from their creditors, they listed $2,854,000,000 in
assets and $3,223,000,000 in debts.  Solutia is represented by
Richard M. Cieri, Esq., at Kirkland & Ellis.   (Solutia Bankruptcy
News, Issue No. 45; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


SPECTRUM BRANDS: Moody's Affirms $1.05 Billion Notes' B3 Ratings
----------------------------------------------------------------
Moody's Investors Service affirmed the debt ratings of Spectrum
Brands, Inc. ("Spectrum", formerly Rayovac Corporation), but
revised its rating outlook to negative from stable.

The outlook revision follows Spectrum's successive lowering of
earnings forecasts in August and September, which has been driven
by demand and cost pressures in several of its key product
segments.  Continuation of these trends through the winter holiday
season and deeper into fiscal 2006 could further weaken Spectrum's
credit metrics beyond levels appropriate for the category and
could challenge its compliance with bank agreement financial
covenants.

The affirmation of the ratings reflects:

   * Spectrum's adequate near-term cash flow and liquidity
     profile;

   * its credible sales and profit enhancement opportunities into
     fiscal 2006; and

   * its stable, leading market positions which aggregate to a
     near $3 billion well-diversified consumer product company.

These ratings were affirmed:

   * Corporate family rating (formerly, senior implied
     rating), B1;

   * Senior secured revolving credit facility due 2011, B1;

   * Senior secured US term loan due 2012, B1;

   * Senior secured European term loan due 2012, B1;

   * Senior secured European term loan B due 2012, B1;

   * Senior secured Canadian term loan due 2012, B1;

   * $700 million 7 3/8% senior subordinated notes due 2015, B3;

   * $350 million 8.5% senior subordinated notes due 2013, B3.

On September 7, Spectrum lowered its earnings outlook for Q4'05
(ending September 30, 2005) and fiscal 2006, citing:

   * weak sales trends in:

     -- European batteries,
     -- North American pet supplies, and
     -- lawn and garden products; and

   * acceleration in raw materials and transportation costs.

These pressures were incremental to those which prompted an August
earnings forecast revision due to similar cost increases and the
delayed sales impact of its North American battery remerchandising
initiative.

The outlook revision recognizes the widespread challenges facing
Spectrum, which are mitigating the key drivers of the prior rating
outlook (diversification, organic growth, and cash flow), and are
weakening the company's credit metrics.  Moody's now expects bank
calculated FY'05 debt-to-EBITDA of over 5.5x and free cash flow in
the mid-single digits as a percentage of funded debt.  Continued
operating pressures through the winter holiday season could
further diminish profit and cash flows.

In this regard, Moody's notes the importance of winter holiday
sales to its high-profit Remington shaver business, and to a
lesser extent its battery and pet supplies segments, which could
be negatively affected by the impact of high gas and energy prices
on holiday spending.  The negative rating outlook also reflects:

   * risks and uncertainty related to Spectrum's integration of
     its recent acquisitions;

   * expense/timing of any incremental cost savings measures; and

   * potential competitive responses to its North American battery
     remerchandising strategy.

Notwithstanding these concerns, the affirmation of the ratings
continues to reflect Spectrum's long-term credit strengths,
including its standing as a large and well-diversified global
consumer product company with stable and leading market positions
in many attractive categories.  The affirmation also reflects the
expectation that Spectrum will remain substantially free cash flow
positive and will maintain abundant availability under its $300
million revolving credit facility.

Lastly, Moody's notes the potential for positive sales and profit
developments into fiscal 2006 as supported by:

   * its merchandising changes;

   * new product launches;

   * distribution gains; and

   * integration efforts led by experienced management and
     operating teams.

Given its weakened position in the rating category, Spectrum's
ratings would likely be downgraded if the company is not able to
stabilize or improve run-rate credit metrics during fiscal Q1'06
and beyond.  Potential drivers could include:

   * existing macro-economic and industry pressures;
   * renewed competitive challenges;
   * integration difficulties; or
   * debt-financed acquisitions.

Specifically, Moody's continues to consider debt-to-EBITDA
increases to near 6.0x, interest coverage decreases below 2.0x,
and free cash flow declines below 5% of funded debt as
inconsistent with the current rating levels, particularly if the
company's borrowing access were to become constrained under such a
scenario.  Maximum debt-to-EBITDA permitted under Spectrum's bank
agreement is currently at 5.85x, stepping down to 5.0x at quarter-
end September 2006.

Conversely, with the substantial challenges facing the company,
plus its weakened credit metrics, Moody's views a ratings upgrade
as unlikely over the coming twelve months in the absence of a
materially deleveraging transaction.  However, successful
execution of operating and integration strategies that result in
continued positive cash flows and debt-to-EBITDA below 5.0x, could
lead to a stable ratings outlook over the next year.  Upward
rating moves over the longer-term would require sustained debt-to-
EBITDA and free cash flow-to-debt levels below 4.0x and above 10%,
respectively.

Ongoing risks include the presence, in nearly all of Spectrum's
product categories, of large branded competitors with more
financial flexibility, including:

   * Gillette, Energizer,
   * S.C. Johnson,
   * Phillips,
   * Scotts, and
   * Central Garden & Pet.

The company also continues to be exposed to:

   * potential raw material and energy price volatility,
   * unfavorable weather impacts (lawn & garden), and
   * customer concentration issues.

Spectrum's increasing scale, geographic diversity, and broadening
portfolio of leading brands in largely attractive categories
provide ongoing support for the B1 rating levels.  Despite
significant historical pricing and promotional actions, the global
battery industry has remained largely controlled by four main
operators (Duracell, Energizer, Panasonic and Spectrum's Rayovac
brand) and has grown over the long-term with the expansion of
battery-operated gadgets, high drain/rechargeable battery-operated
electronics, and the trend towards higher-margin alkaline products
from zinc carbon.

Similarly, North American dry shaving and grooming categories are
dominated by three branded competitors (Phillips/Norelco, Braun
and Remington), with Spectrum's Remington brand dominating the
value-priced segment.  Lawn & garden, household insecticide and
pet products have enjoyed above-average growth trends, owing to
strong demographic trends (home ownership, pet ownership, and high
participation from older adults) and to the growth and expansion
of associated big box retailers.

With headquarters in Atlanta, Georgia, Spectrum Brands, Inc. is a
global consumer products company with a diverse product portfolio
including:

   * consumer batteries,
   * electric shavers, and
   * lawn and pet supplies.

Reported sales for the twelve-month period ended July 2005 were
$2.1 billion, but recent acquisitions result in pro forma sales of
around $2.8 billion.


SPHERE DRAKE INSURANCE: U.K. Scheme of Arrangement is Effective
---------------------------------------------------------------
The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the
Southern District of New York entered an order giving full force
and effect to the Sphere Drake Insurance Limited's U.K. Scheme of
Arrangement.

The U.K. Scheme provides for an expeditious payment in full to all
creditors covered by the U.K. Scheme.  The High Court of England
and Wales, in London, England sanctioned the U.K. Scheme on
April 27, 2005, the U.K. Scheme became effective on May 6, 2005.

The Scheme Business has been in solvent run-off since 1968.  To
shorten SDI's run-off period, the U.K. Scheme, as an estimation
scheme of arrangement under which SDI's liabilities will be valued
as of Dec. 31, 2004.

Sphere Drake Insurance Limited's List of U.S. parties-in-interest
is available for a fee at:

   http://www.researcharchives.com/bin/download?id=050420025337

A copy of the U.K. Scheme of Arrangement can be requested from:

                   Karen Ostad, Esq.
                   Lovells
                   900 Third Avenue, 16th Floor
                   New York, NY 10022
                   Telephone: (212) 909-0600

The business of Sphere Drake Insurance Limited aka Odyssey Re
(London) Limited comprises policies, reinsurance, liabilities and
assets for Marine and Aviation Pool Business and the Non-Marine
Pool Business.   The Marine and Aviation Pool Business and the
Non-Marine Pool Business consist of: (a) direct insurance business
where policyholders are almost entirely U.S. companies and
reinsurance and retrocession business where the policyholders are
almost entirely U.S. insurers and reinsurers; and (b) reinsurance
placed through brokers where policyholders are London Market
insurers and reinsurers.  The Company filed a Section 304 petition
on June 24, 2005 (Bankr. S.D.N.Y. Case No. 05-14610).  Dina
Gielchinsky, Esq., and Karen Ostad, Esq., at Lovells, Norman N.
Kinel, Esq., and Jonathan F. Linker, Esq., at Dreier LLP,
represent Catherine Geraldine Regan, the Debtor's foreign
representative, company secretary, general counsel, and
petitioner.


TFS ELECTRONIC: Committee Wants Jennings Strouss as Counsel
----------------------------------------------------------
The Official Committee of Unsecured Creditors of TFS Electronic
Manufacturing Services, Inc., asks the U.S. Bankruptcy Court
for the District of Arizona for permission to employ Jennings,
Strouss & Salmon, P.L.C. as its counsel nunc pro tunc to
Sept. 6, 2005.

Jennings Strouss will:

    (a) assist, advise and represent the Committee and its
        constituencies in connection with the administration of
        the Debtor's case;

    (b) assist, advise and represent the Committee in any
        investigation of the acts, conducts, assets, liabilities
        and financial condition of the Debtor, the operation and
        profitability of the Debtor, the operation of the Debtor's
        business and desirability of the continuance or
        disposition of such business, and any other matters
        relevant to the Debtor's cases or to the formation of the
        plan of reorganization;

    (c) assist, advise and represent the Committee in its
        participation in the negotiation, formulation and drafting
        of a plan of reorganization, and in its advise to those
        represented by the Committee as to the Committee's
        recommendation with respect to any such plan of
        reorganization;

    (d) assist, advise and represent the Committee with respect to
        the legal issues raised by the Debtor's business
        operations; and

    (e) assist, advise and represent the Committee in the
        performance of all of its duties and powers under the
        Bankruptcy Code and in the performance of such other
        services as are in the interest of those represented by
        the Committee.

The Committee discloses the Firm's professionals will bill:

     Professional                     Hourly Rate
     ------------                     -----------
     Carolyn J. Johnsen, Esq.             $360
     Gary G. Keltner, Esq.                $345
     Brian N. Spector, Esq.               $290
     Danelle Kelling, Esq.                $120

The Committee also discloses that paralegals will bill $120 per
hour.

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

Headquartered in Redmond, Washington, TFS Electronic Manufacturing
Services, Inc., is an electronics manufacturing services facility
that specializes in New Product Introduction services, prototype
Development and low to medium-volume manufacturing.  The Company
filed for chapter 11 protection on August 19, 2005 (Bankr. D.
Ariz. Case No. 05-15403).  John R. Clemency, Esq., Koriann M.
Atencio, Esq., and Tajudeen O. Oladiran, Esq., at Greenberg
Traurig LLP, represent the Debtor in its restructuring efforts.
When the Debtor filed for protections from its creditors, it
estimated assets between $1 million to $10 million and estimated
debts between $10 million to $50 million.


TRANSITION AUTO: June 30 Balance Sheet Upside-Down by $4.9 Million
------------------------------------------------------------------
Transition Auto Finance III, Inc. reported financial results for
the quarter ended June 30, 2005.

The Company's net profit for the quarter ended June 30, 2005 was
$46,136 compared to a loss of $180,197 for the same period in
2004.  The profit for the three months ended June 30, 2005 was due
to the fact that no interest was paid in the 2005 period.  The
Company's only source of liquidity in the future will be from
proceeds from the sale of repossessed vehicles, early
terminations, and its monthly lease payments after interest and
other allowed expenses.  The Company's portfolio, which consisted
of 543 leases, included 465 leases, which resulted in early
terminations.

                  Default on Investor Notes

Trust Management, Inc. serves as the trustee for the Company under
an Indenture Agreement.  The Company defaulted on the investor
notes administered by Trust Management, Inc. in December 2004.
Upon the default of the investor notes payable, Trust Management,
Inc. receives all receipts collected by the Company and approves
all of the Company's disbursements.  Trust Management, Inc. will
pay note holders any unpaid principal, ratably, without
preference, as well as any other unpaid allowable costs incurred
by the Company.

Management will attempt to service existing leases and raise
additional capital and secure additional financing in order to
repay the investor notes payable.  Management recognizes that full
repayment may take several years to complete and that full
repayment may not occur.

                       Going Concern Doubt

Sprouse & Anderson, L.L.P. expressed substantial doubt on
Transition Auto Finace III, Inc.'s ability to continue as a going
concern after it audited the Company's financial statement for the
year ended Dec. 31, 2004.  The auditing firm pointed to the
Company's:

    * recurring losses,
    * negative working capital,
    * negative equity position, and
    * default on investor notes payable due 2004.

Transition Auto Finance III, Inc. purchases motor vehicle and
automobile lease contracts, collecting and servicing automobile
lease contracts and remarketing motor vehicles upon termination of
their leases.  Transition Leasing Management, Inc. owns 100% of
the Company's common stock.

At June 30, 2005, Transition Auto Finance III, Inc.'s balance
sheet showed a $4,935,100 stockholders' deficit, compared to a
$5,067,463 deficit at Dec. 31, 2004.


TRUSTREET PROPERTIES: Fitch Holds Sr. Secured Debt Facility at BB+
------------------------------------------------------------------
Fitch Ratings affirms these ratings for Trustreet Properties, Inc.

   -- Senior secured credit facility 'BB+';
   -- Senior unsecured notes 'BB-';
   -- Preferred stock 'B+';

The Rating Outlook is Stable.

Trustreet's ratings are affirmed following its announcement that
it is acquiring a portfolio of up to 120 restaurant properties for
approximately $87 million in cash.  Initially, the transaction
will be funded by a $50 million senior unsecured bond offering,
with most of the remainder being funded through the company's
revolving credit facility.  Based on the company's recent $700
million shelf filing Fitch would expect the company to issue
equity to reduce leverage.

The transaction represents an opportunity for the company to
acquire a diverse pool of restaurant properties spread across 19
states with tenants comprising a predominantly well-known mix of
franchisors and franchisees, including Burger King, Arby's and
Pizza Hut.  The weighted average remaining lease term for the
assets being acquired is not expected to change the overall
weighted average lease term of the portfolio.

Fitch notes that Trustreet has made several significant
acquisitions since the closing of the merger between CNL
Restaurant Properties, U.S. Restaurant Properties, and 19 CNL
Income Funds that combined to form Trustreet in February 2005.

Specifically, the company completed a $139 million sale-leaseback
transaction with The Restaurant Company on June 30, 2005 for the
acquisition of 67 Perkins Restaurant and Bakery properties.  This
acquisition was also partially funded using the company's
revolving credit facility.  Approximately two thirds of these
properties, however, are targeted for sale under Trustreet's
investment property sales program, which markets properties
principally to tax-motivated 1031 exchange buyers.  The company
has already made progress towards liquidating some of these
properties and has many of them under contract for sale.

The company also sold a substantial component of its mortgage pool
in July 2005 which modestly reduced its utilization of secured
financing due to mature in 2007, and generated proceeds to reduce
revolving credit outstandings.  Trustreet's competitiveness in the
mortgage market is currently limited by the mortgage-pricing
environment.  As a result, the company refers mortgage prospects
to Bank of America.

In general, Fitch views this series of acquisitions and sales,
including the transaction, the Restaurant Company sale-leaseback,
and the mortgage portfolio sale as a modest positive for the
rating, as it continues to grow the company's portfolio, modestly
reduces usage of secured debt, and should not result in higher
leverage.

Nevertheless, it will be important for Trustreet to follow through
with it to reduce borrowings on its revolving credit facility.
Following the close of the transaction, Fitch expects that
Trustreet's $175 million unsecured line of credit will be close to
75% drawn, limiting its ability to provide financial flexibility
if needed.  Fitch views unused committed revolving credit as well
as the significant but generally unpredictable stream of property
sales under the investment property sales program as core
components of Trustreet's liquidity profile.

Trustreet's credit strengths are centered on the diversity of its
portfolio by geography, tenant, and restaurant concept.  As of
June 30, 2005, the company had relationships with over 170
restaurant concepts and 450 franchisors/franchisees in a total of
approximately 1,900 owned properties.  The company's lease
maturity, at almost 10.7 years as of June 30, 2005, is also a
strength that in combination with the company's broad portfolio
should help contribute to increasingly stable recurring cash flows
over time.

The company's recurring EBITDA-to-interest expense of 1.6 times
(x) and fixed charge coverage of 1.2x in its first full quarter of
operations were relatively modest.  Nevertheless, these results
reflect only one quarter and are impacted both by costs associated
with the merger and portfolio consolidation as well as portfolio
acquisitions over the past few months.  Over time, Fitch will look
for these to strengthen.

Rating concerns center largely on the company's aggressive
capitalization, as well as a predominantly secured funding
profile.  Trustreet's ratio of debt to undepreciated book capital
was 61% at the end of the second quarter and is expected to be
modestly lower than this following the transactions.

Management has indicated that leverage should be expected to
decline modestly over the next several years as some of the debt
incurred in the merger is retired.  Fitch also notes that the
transactions, in total, involve the retirement of certain secured
debt and the issuance of unsecured debt, which over time will help
improve the company's financial flexibility.

Additional concerns center on the company's relatively weak
unencumbered asset coverage.  The structural subordination of the
senior unsecured bonds to the revolving credit facility further
lowers unencumbered asset coverage of the bonds when the facility
is heavily drawn, as it will be following the transaction.

Headquartered in Orlando, FL, Trustreet is the largest triple-net
lessor of real estate to the restaurant industry.  The company
provides a range of real estate, financial, and advisory services
to operators of national and regional restaurant chains.  As of
June 30, 2005, the company had over $2.7 billion in total assets
with 1,900 owned and an additional 850 managed properties in 49
U.S. states.


UAL CORP: Wants Court Nod on Plan Confirmation-Related Schedule
---------------------------------------------------------------
UAL Corporation and its debtor-affiliates propose to establish a
schedule to smooth the path toward emergence from Chapter 11.
Against this backdrop, the Debtors ask the U.S. Bankruptcy Court
for the Northern District of Illinois to approve this schedule:

            Date          Event
            ----          -----
     October 11, 2005     Disclosure Statement Hearing

     October 11, 2005     Record Date

     December 1, 2005     Plan Objection Deadline

     December 1, 2005     Voting Deadline

     December 7, 2005     Deadline to serve confirmation-related
                          Discovery

     December 14, 2005    Deadline to disclose anticipated fact
                          and expert witness lists

     December 23, 2005    Deadline to file expert reports

     January 9, 2006      Discovery closes

     January 9, 2006      Deadline to reply to objections to Plan

     January 11, 2006     Deadline to disclose final fact/expert
                          witness and exhibit lists

     January 13, 2006     Deadline to file pretrial motions

     January 17 to
        18, 2006          Plan Confirmation Hearing

James H.M. Sprayregen, Esq., at Kirkland & Ellis, in Chicago,
Illinois, relates that the Debtors' Chapter 11 cases are unique,
complex, and large.  Accordingly, "a transparent and clearly
articulated exit process set forth at the outset ensures
meaningful participation of all key stakeholders."

Mr. Sprayregen notes that the exit schedule affords creditors
maximum notice of the confirmation process, lays out a smooth
path toward exit and limits unnecessary delay.  The schedule also
affords creditors more time than is statutorily required to:

   -- review the Plan of Reorganization, the Disclosure Statement
      and solicitation materials;

   -- vote on the Plan; and

   -- file objections to the Plan.

Mr. Sprayregen assures the Court that the exit schedule complies
with the Bankruptcy Code and Bankruptcy Rules.

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


UAL CORP: Asks Court to Okay Claims Resolution Schedule
-------------------------------------------------------
More than 40,000 claims asserting over $3,600,000,000,000 against
UAL Corporation and its debtor-affiliates estates have been filed.
The Debtors have eliminated more than 25,000 claims, reducing the
face amount on the claims register to approximately
$45,000,000,000.  The Debtors continue to resolve outstanding
claims to maximize distributions and to minimize the reserve for
disputed claims.

James H.M. Sprayregen, Esq., at Kirkland & Ellis, in Chicago,
Illinois, relates that, at this time, the Debtors expect the
unsecured claims pool to total around $30,000,000,000.  A large
portion of the unsecured claims pool is comprised of three
segments:

(1) The Pension Benefit Guaranty Corporation Claim

Pursuant to the PBGC Settlement, the Debtors will allow the PBGC
a single prepetition, general, unsecured, unfunded liability
claim for an amount determined under PBGC regulations.  The PBGC
Claim will be asserted against the estate of United Air Lines,
Inc., for the termination of the Debtors' defined benefit pension
plans.

The PBGC Claim could total $9,500,000,000, if allowed as
calculated under the PBGC's regulations.  The Official Committee
of Unsecured Creditors plans to object to the PBGC Claim, and
argue that the amount should be calculated by the more
restrictive "prudent investor" standard.

Mr. Sprayregen says the potential size of the PBGC Claim is so
significant that it must be resolved shortly.  Otherwise, initial
distributions to unsecured creditors may be impacted if the
Debtors must holdback stock to reserve for the PBGC Claim.

The Debtors expect to reserve $9,500,000,000 for the PBGC Claim.

(2) Employee Distributions

The Debtors must finalize the Employee Distributions to union-
represented employees under the 2003 Restructuring Agreements and
the 2005 Restructuring Agreements.  Although the Debtors have
agreed to the Employee Distributions, other parties may challenge
those Distributions, as allowed by the Court upon approval of the
2003 and 2005 Restructuring Agreements.  The Employee
Distributions comprise a large portion of the unsecured claims
pool.  Therefore, the Debtors must resolve third-party assertions
so that initial distributions to creditors under their Plan can
be estimated.

The Debtors expect to make $7,500,000,000 in Employee
Distributions.

(3) 9/11 Claims

According to Mr. Sprayregen, there are 15 claims totaling
$2,100,000,000 filed by victims of the September 11, 2001
terrorist attacks.  The Debtors hope that negotiations will
amicably resolve the remaining 9/11 Claims.  However, this
process may not be complete prior to confirmation of the Plan of
Reorganization and initial distributions to creditors.

Therefore, the Debtors need resolution of the 9/11 Claims prior
to exit.  The Debtors anticipate the elimination of
$2,100,000,000 of claims arising from the September 11, 2001
terrorist attacks.

                   Claims Resolution Schedule

The Debtors have agreed to the claim amounts of Employees and the
PBGC.  The Debtors also intend to object to the 9/11 Claims.
The current size of these three claims, relative to the rest of
the claims pool, presents unique circumstances, Mr. Sprayregen
explains.

Due to their large size, approximately 60% of the total claims
pool will be subject to a holdback if the three claims are not
reduced through resolution.  This would dramatically reduce
initial distributions to holders of allowed claims.

This scenario, Mr. Sprayregen says, will have serious
implications on:

   * the Debtors' post-confirmation capital structure;
   * the trading environment for the Debtors' securities; and
   * the relisting of new stock on a national exchange.

The Debtors need to resolve these and other significant claims
and distributions to avoid a disproportionately large disputed
claims reserve upon exit, Mr. Sprayregen asserts.

For this reason, the Debtors seek the U.S. Bankruptcy Court for
the Northern District of Illinois' permission to establish a
process for closure of the Employee Distributions, the PBGC Claim
and the 9/11 Claims.  The Debtors ask the Court to approve this
schedule:

    -- October 7, 2005

          * Deadline to assert objections to the PBGC Claim or
            the Employee Distributions

          * Deadline for Debtors to object to 9/11 Claims based
            on the Air Transportation Safety and System
            Stabilization Act

    -- October 28, 2005

          * Deadline to file support of the PBGC Claim, Employee
            Distributions and 9/11 Claims

    -- November 11, 2005

          * Deadline to disclose anticipated fact and expert
            witness lists for the PBGC Claim, Employee
            Distributions and 9/11 Claims

    -- November 18, 2005 (Omnibus Hearing Date)

          * Pre-trial conferences for PBGC Claim, Employee
            Distributions and 9/11 Claims

          * Deadline to file expert reports for PBGC Claim,
            Employee Distributions and 9/11 Claims

    -- December 14, 2005

          * Discovery Closes for PBGC Claim, Employee
            Distributions and 9/11 Claims

    -- December 16, 2005

          * Deadline to disclose final fact/expert witness and
            exhibit lists for PBGC Claim, Employee Distributions
            and 9/11 Claims

    -- December 30, 2005

          * Deadline to file pretrial motions for PBGC Claim,
            Employee Distributions and 9/11 Claims

    -- Week of January 4-10, 2006

          * Potential hearing dates for objections to PBGC Claim,
            Employee Distributions and 9/11 Claims

Setting a schedule now will provide all parties with a roadmap
for closure of the three Claims, and ample time to resolve
dispositive legal issues, Mr. Sprayregen maintains.

The schedule reflects that the PBGC Claims, the Employee
Distributions and the 9/11 Claims are straightforward and can be
adjudicated quickly.

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


UNISYS CORP: Increases Senior Debt Offering to $550 Million Total
------------------------------------------------------------------
Unisys Corporation (NYSE:UIS) has offered a total of $550 million
of senior notes, more than previously announced due to strong
market demand.  The notes were offered in two tranches:

   -- $400 million of 8% senior notes due 2012,which were priced
      at par; and

   -- $150 million of 8.5% senior notes due 2015, which were
      priced at par.

Banc of America Securities LLC and Citigroup Global Markets
Inc. are joint bookrunning managers of the offerings, which are
scheduled to be completed next week.

Also as previously announced, the company is commencing a tender
offer and consent solicitation for all $400 million of its 8-1/8%
senior notes due 2006.  The tender offer will be financed by the
above-mentioned senior notes.  In conjunction with the tender
offer, the company is soliciting holders of the 8-1/8% notes to
consent to certain proposed amendments to the indenture governing
the notes.

Assuming all $400 million of the 8-1/8% notes are tendered, Unisys
said, it will take an estimated pre-tax charge in the third
quarter of approximately $13 million for the premium paid for the
notes and unamortized debt expense.

The tender for the 8-1/8% notes will expire at 5:00 p.m., New York
City time, on Oct. 7, 2005, unless extended.  The consent
solicitation will expire at 5:00 p.m., New York City time, on
Sept. 15, 2005, unless extended.  Holders tendering their notes
will be required to consent to certain proposed amendments to the
indenture governing the notes, which will eliminate substantially
all of the restrictive covenants and certain events of default.
Holders may not tender their notes without delivering consents or
deliver consents without tendering their notes.  Holders may
withdraw their tenders and revoke their consents at any time prior
to 5:00 p.m., New York City time, on the Consent Date, but not
thereafter.

Holders who validly tender their notes and provide consents to the
proposed amendments on or prior to the Consent Date will receive a
consent payment of $20 per $1,000 principal amount of notes as
part of their total consideration.  In such case, the total
consideration, including the consent payment, to be paid for each
validly tendered note and delivered consent will be a price based
on a fixed spread of 50 basis points over the yield of the 2.5%
U.S. Treasury Note due May 31, 2006.  The pricing formula assumes
that the notes would otherwise be paid in full at maturity on
June 1, 2006.  The yield of the reference U.S. Treasury Note used
in the fixed spread formula will be set at 2:00 p.m., New York
City time, on the business day following the Consent Date.  Unisys
expects to pay the total consideration on the second business day
following the Consent Date for notes validly tendered on or prior
to the Consent Date and accepted for purchase.

Holders who validly tender their notes and provide consents after
the Consent Date and on or prior to the Expiration Date are not
entitled to the $20 consent payment, and will receive as payment
for their notes the total consideration minus the consent payment.
Unisys expects to make payment promptly after the Expiration Date
for notes validly tendered and accepted for purchase after the
Consent Date and prior to the Expiration Date. Holders who validly
tender their notes will also be paid accrued and unpaid interest
up to, but not including, the applicable payment date for their
notes. Holders may withdraw their tenders and revoke their
consents at any time prior to 5:00 p.m., New York City time, on
the Consent Date but not thereafter.

The terms and conditions of the tender offer and consent
solicitation, including the obligation to accept the notes
tendered and pay the offer consideration and consent payments, are
set forth in the Offer to Purchase and Consent Solicitation
Statement, dated Sept. 9, 2005.  Unisys may amend, extend or,
subject to certain conditions, terminate the tender offer and
consent solicitation.

Unisys has retained Citigroup Global Markets Inc. and Banc of
America Securities LLC to act as the exclusive dealer managers and
solicitation agents in connection with the tender offer and
consent solicitation for the 8-1/8% notes.  Requests for documents
can be directed to Global Bondholder Services Corp, the
information agent, at (866) 924-2200 (toll free) or (212) 430-3774
(banks and brokers).  Questions regarding the tender offer and
consent solicitation can be directed to Citigroup Global Markets
Inc., Liability Management Group at (800) 558-3745 (toll free) or
(212) 723-6106 (collect) or Banc of America Securities LLC , High
Yield Special Products at (888) 292-0070 (toll free) or (704)
388-4813 (collect).

Unisys -- http://www.unisys.com/-- is a worldwide information
technology services and solutions company. Our people combine
expertise in consulting, systems integration, outsourcing,
infrastructure and server technology with precision thinking and
relentless execution to help clients, in more than 100 countries,
quickly and efficiently achieve competitive advantage.

                          *     *     *

As reported in the Troubled Company Reporter on Sept. 13, 2005,
Moody's Investors Service affirmed Unisys Corporation's corporate
family rating at Ba3 and short term liquidity rating at SGL-3, and
assigned a Ba3 to Unisys Corporation's proposed new senior
unsecured notes.  The company plans to offer approximately $450
million of senior unsecured notes to be drawn under its $1.5
billion shelf program rated (P)Ba3.  Proceeds from the offering
will be used to tender for $400 million of 8 1/8% senior notes due
June 2006.


US AIRWAYS: Creditors Approve Ch. 11 Plan, Hearing Begins Today
---------------------------------------------------------------
US Airways creditors has formally and overwhelmingly approved the
Debtors' Chapter 11 Plan of Reorganization, which is anchored by
its proposed merger with America West Airlines.  The affirmative
vote by the creditors, coupled with the separate approval by
America West shareholders this week, leaves the judicial
confirmation hearing of the plan by the U.S. Bankruptcy Court as
the key remaining step prior to the expected emergence from
Chapter 11 and the consummation of the proposed merger.

The independent claims agent, Donlin, Recano and Company, which
tabulated the vote on the proposed Plan, filed its report with the
U.S. Bankruptcy Court in Alexandria, Va., confirming that US
Airways has received more than a sufficient number of votes in
favor of its Plan.  Every class of creditor for all five debtors:

   * US Airways, Inc.,
   * US Airways Group, Inc.,
   * PSA Airlines, Inc.,
   * Piedmont Airlines, Inc., and
   * Material Services Company, Inc.

in the Chapter 11 cases that was entitled to vote on the Plan, has
voted in favor by at least 90 percent in dollar amount and 80
percent in the number of votes cast.  This is well in excess of
the required two-thirds vote in dollar amount, and more than one-
half of the number of votes, which also is required.

"We have worked enthusiastically to put together a robust plan
that will benefit our customers, our stakeholders and our
employees.  The result will be a more stable and more competitive
US Airways," said US Airways President and Chief Executive Officer
Bruce R. Lakefield.  "This strong vote of confidence by our
creditors adds momentum as we look to emerge from Chapter 11 and
complete our merger with America West Airlines in a few weeks."

The plan confirmation hearing is scheduled to begin at 9:30 a.m.,
today, Sept. 15, 2005, at the U.S. District Courthouse in
Alexandria.  Under the terms of the merger agreement, the
transaction can close on the 11th day following entry of a final
order by Judge Stephen S. Mitchell, confirming the plan.

                     America West Merger

As reported in the Troubled Company Reporter yesterday,
stockholders holding voting rights of Class B America West stock
voted in favor of the US Airways merger agreement with the
breakout as follows:

   * 85.2 percent voted for the merger,
   * 4.4 percent voted against, and
   * 10.4 percent abstained.

Stockholders holding voting rights of Class A America West stock
voted in favor of the merger, with 100 percent voting for the
merger.  The result is the merger agreement has received America
West stockholder approval with 95.5 percent of total voting shares
in favor of the merger.

America West -- http://www.americawest.com/-- operates more than
900 flights daily to 95 destinations in the U.S., Canada, Mexico
and Costa Rica.  The airline's 13,500 employees are proud to offer
a range of services including more destinations than any other
low-cost carrier, first-class cabins, assigned seating, airport
clubs and an award-winning frequent flyer program.

Headquartered in Arlington, Virginia, US Airways' primary business
activity is the ownership of the common stock of:

            * US Airways, Inc.,
            * Allegheny Airlines, Inc.,
            * Piedmont Airlines, Inc.,
            * PSA Airlines, Inc.,
            * MidAtlantic Airways, Inc.,
            * US Airways Leasing and Sales, Inc.,
            * Material Services Company, Inc., and
            * Airways Assurance Limited, LLC.

Under a chapter 11 plan declared effective on March 31, 2003,
USAir emerged from bankruptcy with the Retirement Systems of
Alabama taking a 40% equity stake in the deleveraged carrier in
exchange for $240 million infusion of new capital.

US Airways and its subsidiaries filed another chapter 11 petition
on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820).  Brian
P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,
Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and
Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors
in their restructuring efforts.  In the Company's second
bankruptcy filing, it lists $8,805,972,000 in total assets and
$8,702,437,000 in total debts.


USG CORP: IRS Audit Results in $25-Mil Increase in 2005 Earnings
----------------------------------------------------------------
USG Corporation (NYSE:USG) reported that the Internal Revenue
Service has finalized its regular audit of the Corporation's
federal income tax returns for the years 2000 through 2002.  The
audit will result in an increase in the Corporation's reported
earnings for 2005 of $25 million and net cash outflows by the end
of 2005 of $105 million.

Substantially all of the additional tax liabilities resulting from
the audit will be covered by liabilities currently recorded on
USG's financial statements.  In addition, a portion of the
Corporation's recorded income tax contingency reserves are no
longer necessary.  This will result in a reduction in the
Corporation's income tax provision and a corresponding increase
in consolidated net income in the third quarter of 2005 of
$25 million.

In the aggregate, the audit is expected to result in net cash
outflows by the end of 2005 of $105 million ($53 million of which
has already been paid), including $47 million directly related to
the 2000 through 2002 audit and an additional $58 million relating
to the Corporation's 2003 and 2004 years.  A substantial portion
of the outflows relating to the audited years and all of the
outflows relating to the 2003 and 2004 years are the result of the
disallowance by the IRS of the Corporation's current deduction of
contractual interest on debt incurred prior to its bankruptcy
filing in 2001.  In addition, the audit is expected to result in
net cash outflows of $12 million related to the 2000 year.
Because this amount is considered a prepetition liability under
the Bankruptcy Code, the timing of payment is subject to
Bankruptcy Court approval and has not yet been determined.
Assuming that the contractual interest is ultimately paid, a
substantial portion of these outflows will be recovered by the
Corporation on its tax returns in future years following its
emergence from bankruptcy.

Payment of these amounts will be made from current cash balances.
The Corporation had $1.2 billion of cash, cash equivalents and
marketable securities as of June 30, 2005.

Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes.  The Company filed
for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No.
01-02094).  David G. Heiman, Esq., and Paul E. Harner, Esq., at
Jones Day represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts.


VENTIV HEALTH: S&P Rates Proposed $225 Million Debts at BB-
-----------------------------------------------------------
Standard & Poor's Ratings Services assigned its corporate credit
rating of 'BB-' to Ventiv Health Inc.  At the same time, the
rating agency assigned its senior secured bank loan rating of
'BB-' to the company's proposed $50 million revolving credit
facility due in 2010 and $175 million term loan B due in 2011.

A recovery rating of '3' also was assigned to the secured loan,
indicating a meaningful (50%-80%) recovery of principal in the
event of a payment default.  The company plans to use the
proceeds, in combination with a relatively limited amount of
company stock, to acquire inChord Communications Inc., a health
care marketing and communications services firm, for $185 million.

"The speculative-grade ratings on Ventiv reflect the company's
solid, but niche, position in the pharmaceutical outsourced
services industry, competition against larger rivals, and the
challenges inherent in integrating several acquisitions.  The
ratings also reflect the company's increasingly diverse revenue
streams and adequate level of financial flexibility," said
Standard & Poor's credit analyst Arthur Wong.

Somerset, New Jersey-based Ventiv is a broad-based provider of
services to the pharmaceutical industry.


VIRAGEN INC: Ernst & Young Express Going Concern Doubt in 10-K
--------------------------------------------------------------
Ernst & Young LLP expressed substantial doubt about Viragen,
Inc.'s (Amex: VRA) ability to continue as a going concern after it
audited the Company's financial statements for the fiscal year
ended June 30, 2005.  The auditors point to the Company's
operating losses, accumulated deficit and working capital
deficiency.

The Company has experienced losses and a negative cash flow from
operations since inception.  It incurred significant losses of
approximately $26.2 million for the year ended June 30, 2005,
$18.2 million in 2004, and $17.3 million in 2003, and had an
accumulated deficit of approximately $146.7 million at June 30,
2005.

"We believe we have sufficient cash to support operations,
including those of our subsidiaries, through at least December 31,
2005," the Company disclosed in its Annual Report.  "However, we
will require substantial additional funding to support our
operations subsequent to Dec. 31, 2005.  As we do not anticipate
achieving sufficient cash flows from operations by Dec. 31, 2005,
our plans include seeking additional capital through equity and
debt financings.  No assurance can be given that additional
capital will be available when required or upon terms acceptable
to us.  Our inability to generate substantial revenue or obtain
additional capital through equity or debt financings would have a
material adverse effect on our financial condition and our ability
to continue operations."

President & CEO, Charles A. Rice commented, "We are currently
addressing financial priorities to ensure the Company is able to
capitalize on expected near-term achievements.  We hope to be able
to announce new agreements that improve our ability to service our
debt obligations and raise additional sources of working capital
in the very near term."

                  June 2004 Convertible Notes

On April 1, 2004, the Company entered into purchase agreements for
the issuance and sale of convertible notes and common stock
purchase warrants in the aggregate amount of $20 million.  The
notes were placed with a group of new and returning institutional
investors.  The $20 million purchase price for the notes and
warrants was placed in escrow pending satisfaction of all
conditions precedent to closing, including receipt of stockholder
approval for the sale of the notes and warrants, as well as a one
for ten reverse split of the Company's common stock.

On June 11, 2004, the Company's stockholders voted to approve the
sale of the notes, the one for ten reverse split of its common
stock and a change in the number of the authorized shares of its
common stock to 100 million shares.

On June 18, 2004, the Company completed the sale of the notes and
warrants.  Under the terms of these agreements, it received
approximately $18.96 million, net of finder's fees and legal
expenses.  These agreements also provided for the issuance to the
purchasers of an aggregate of 5,357,051 three-year common stock
purchase warrants exercisable at $1.819 per share.

These convertible notes mature on March 31, 2006.  The notes are
convertible by the investors, in whole or in part, into shares of
our common stock at a conversion price equal to $1.516.  This
conversion price is subject to reductions if we enter into
additional financing transactions for the sale of the Company's
stock below the public trading price and below the conversion
price.

These notes may be prepaid at 110% of their face amount, plus the
issuance to note holders of additional warrants to purchase the
number of shares of our common stock into which the notes would
otherwise have been convertible, at an exercise price equal to the
prevailing conversion price of the notes.  If issued on
prepayment, the warrants may be exercised for the period that
would have been the remaining life of the notes had they not been
prepaid.  Commencing one year after issuance, the Company also
have the right to require note holders to convert their notes,
subject to certain limitations; provided that its common stock has
traded at 200% or more of the conversion price of the notes on
each of the 30 trading days ending five days prior to the date
fixed for conversion.

As of June 30, 2005, the entire principal amount of these
convertible notes of $20 million remained outstanding.  Interest
payable on the convertible notes is payable in cash or shares of
its common stock at the Company's option.  The value of shares
used to satisfy the interest payment equals the average closing
price of common stock for the 20 trading days prior to the
interest payment date.  For the fiscal year ended June 30, 2005,
the Company paid interest on the notes of $1,050,000 in cash and
$350,000 through the issuance of shares of our common stock valued
at $0.67 per share.

Ernst & Young expressed similar doubts after looking at Viragen,
International, Inc.'s 2004 financials too.  International is 81.2%
owned by Viragen and the primary operating subsidiary.

With global operations in the U.S., Scotland and Sweden, Viragen
-- http://www.Viragen.com/-- is a biotechnology company engaged
in the research, development, manufacture and commercialization of
pharmaceutical proteins for the treatment of viral diseases and
cancers.


W.R. GRACE: Asbestos PD Panel Wants to Hire Speights as Counsel
---------------------------------------------------------------
The Official Committee of Asbestos Property Damage Claimants
appointed in W.R. Grace & Co. and its debtor-affiliates' chapter
11 cases seeks the U.S. Bankruptcy Court for the District of
Delaware's authority to retain Martin W. Dies, III, Esq., at
Dies & Hile L.L.P., and C. Alan Runyan, Esq., at Speights &
Runyan, as special counsel to represent the PD Committee in the
context of the asbestos PD claims estimation, particularly in
litigating the "science" or harmfulness of the Debtors' various
asbestos-containing products.

Theodore J. Tacconelli, Esq., at Ferry, Joseph & Pearce, P.A., in
Wilmington, Delaware, relates that the PD Committee has informed
the Court of the Debtors' intention to litigate those science
issues at previous hearings, which intention was the principal
reason that an agreement on the terms of a case management order
was delayed until August 2005.  However, neither the PD Committee
nor the Court had previously contemplated a science trial in the
course of the PD Estimation.

Subsequently, on August 29, 2005, the Court entered an agreed
CMO, pursuant to which the PD Estimation will proceed in two
phases.  In Phase I, the Court will first consider the
"Methodology Issue" addressing certain methodologies for
determining exposure to asbestos that must comply with Rule 702
of the Federal Rules of Evidence, particularly, the use of dust
versus air sampling.

As a result of the Debtors' inclusion of science issues in the
PD Estimation, the PD Committee, in addition to utilizing Ferry,
Joseph & Pearce as asbestos PD liaison counsel, deems it
"necessary, appropriate and highly efficient" to utilize the
services of special counsel.

Mr. Tacconelli says Dies & Hile and Speights & Runyan have unique
expertise in litigating asbestos PD claims.  The Special Counsel
have specialized knowledge of all aspects of asbestos PD claims,
and have been at the forefront of asbestos PD litigation and
asbestos bankruptcy reorganizations for more than 20 years.

"Each possesses a remarkable amount of historical information and
legal knowledge related to Asbestos PD Claims and will
immeasurably enhance the PD Committee's presentation on the long-
established harmfulness of the Debtors' asbestos-containing
products and other issues engendered by the PD Estimation," Mr.
Tacconelli says.

Mr. Tacconelli also notes that the Debtors already have special
counsel at their disposal with the historical knowledge and
experience necessary to assist in or undertake the PD Estimation
on their behalf.  According to Mr. Tacconelli, the PD Committee
does not currently enjoy a similar benefit putting the Committee
at a distinct disadvantage.  The PD Committee's bankruptcy
counsel does not have the same depth of knowledge and experience
as the Special Counsel.

The Special Counsel's services to the PD Committee will include:

   (a) representation of the PD Committee, including in any
       ensuing appeal, of all aspects of the Methodology Issue;

   (b) selection and the presentation of the opinions and
       testimony of experts and consultants; and

   (c) other services as are necessary during the course of the
       PD Estimation.

The current hourly rates for each firm are:

     Law Firm              Professionals           Rates
     --------              -------------           -----
     Speights & Runyan     Senior Partners          $650
                           Junior Partners          $400
                           Associates           $225 to $240
                           Paraprofessionals    $125 to $150

     Dies & Hile           Senior Partners          $650
                           Junior Partners          $400
                           Associates           $195 to $400
                           Paraprofessionals    $125 to $150

In addition, the Special Counsel will seek reimbursement of all
of its reasonable out-of-pocket expenses incurred.

C. Alan Runyan, a member of Speights & Runyan, attests that none
of the individuals and firms comprising the Special Counsel
represents or holds any interest adverse to the Debtors' estates
or their creditors in the matters on which those firms are to be
engaged.  However, Mr. Runyan notes, each firm is a multi-lawyer
firm with a national practice and may represent or may have
represented certain of the Debtors' creditors or equity holders
in matters unrelated to the Debtors' Chapter 11 cases.

Headquartered in Columbia, Maryland, W.R. Grace & Co. --
http://www.grace.com/-- supplies catalysts and silica products,
especially construction chemicals and building materials, and
container products globally.  The Company and its debtor-
affiliates filed for chapter 11 protection on April 2, 2001
(Bankr. Del. Case No. 01-01139).  James H.M. Sprayregen, Esq.,
at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski,
Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the
Debtors in their restructuring efforts.  (W.R. Grace Bankruptcy
News, Issue No. 95; Bankruptcy Creditors' Service, Inc.,
215/945-7000)


WINN-DIXIE: Judge Funk Allows Old Dixie's $172,016 PACA Claims
--------------------------------------------------------------
As previously reported, Winn-Dixie Stores, Inc., and its debtor-
affiliates unilaterally determined that a portion of the claim of
Old Dixie Produce & Packaging, Inc., formerly known as Dixie
Produce & Packaging, Inc., was not eligible under the Perishable
Agricultural Commodities Act because Old Dixie's invoices extended
the time for payment beyond 30 days.

Old Dixie contends that the Debtors' argument is based on an
incorrect interpretation of PACA's statutory and regulatory
framework under 7 U.S.C. Section 499e.  Nicholas V. Pulignano,
Jr., Esq., at Marks Gray, PA, in Jacksonville, Florida, asserts
that under PACA, if the parties elect to use a different time for
payment beyond the 10-day period established by the federal
regulations, they must enter a written agreement before entering
into the transaction to do so, among other requirements.  Only
when a pre-transaction written agreement exists does the 30-day
limit cited by the Debtors apply.

"No such agreement exists and the Debtors' baseless attempt to
substitute the Old Dixie invoices for the required pre-
transaction written agreement must be disregarded," Mr. Pulignano
says.  "The invoices alone cannot and did not effectuate a valid
extension of the applicable 10-day period."

               Court Sustains Old Dixie's Objection

Judge Funk of the U.S. Bankruptcy Court for the Middle District of
Florida explains that because parties did not agree in writing
prior to the transaction to extend payment terms, the payment
terms listed on their invoices had no legal effect, and the
payment terms of 10 days supplied by the Secretary of Agriculture
were applicable.

Since Old Dixie complied with the PACA notice requirements set
forth in 7 U.S.C. Section 499e(c)(4) and 7 C.F.R. Section
46.46(f) by including the required statutory language on each of
its invoices, Judge Funk opines that Old Dixie properly preserved
its benefits under the trust.  "The invoices alone cannot and did
not effectuate a valid extension of the applicable 10-day payment
period.  Absent a pre-transaction written agreement, the payment
terms automatically default to the 10-day period established by
the federal regulations, as a matter of law."

Accordingly, the Court rules that Old Dixie is entitled to
payment in full of the invoices because it properly preserved its
PACA trust benefits in its invoices.

Judge Funk sustains Old Dixie's objection to the Debtors' PACA
Report as to its claim.  The entire disputed sum of Old Dixie's
prepetition unpaid invoices -- $172,016 -- will be deemed an
Allowed PACA Claim and payable immediately.

Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc.
-- http://www.winn-dixie.com/-- is one of the nation's largest
food retailers.  The Company operates stores across the
Southeastern United States and in the Bahamas and employs
approximately 90,000 people.  The Company, along with 23 of its
U.S. subsidiaries, filed for chapter 11 protection on Feb. 21,
2005 (Bankr. S.D.N.Y. Case No. 05-11063).  The Honorable Judge
Robert D. Drain ordered the transfer of Winn-Dixie's chapter 11
cases from Manhattan to Jacksonville.  On April 14, 2005, Winn-
Dixie and its debtor-affiliates filed for chapter 11 protection in
M.D. Florida (Case No. 05-03817 to 05-03840).  D.J. Baker, Esq.,
at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson
Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP,
represent the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
$2,235,557,000 in total assets and $1,870,785,000 in total debts.
(Winn-Dixie Bankruptcy News, Issue No. 22; Bankruptcy Creditors'
Service, Inc., 215/945-7000).


WORLDCOM INC: Settles Dispute Over Discover Financial's Claims
--------------------------------------------------------------
Discover Financial Services, Inc., is in the business of offering
credit cards to the general public bearing a "Discover Logo" card.
Before the Petition Date, MCI WorldCom Network Services, Inc., and
Discover Financial executed certain contracts, including a certain
Merchant Services Agreement dated December 21, 1993.  The
Agreement authorized the Debtors to accept the Discover Card from
customers who elected to pay for the Debtors' services with the
Discover Card.

Discover Financial filed 14 claims against the Debtors, alleging
amounts pursuant to the Agreement:

     Claim No.     Asserted Debtor             Claim Amount
     ---------     ---------------             ------------
       24378    MCI Wireless, Inc.                $45,422
       24379    Telecom USA, Inc.                     519
       24380    1-800-COLLECT, Inc.                14,596
       24381    WorldCom, Inc.                     93,830
       24410    WorldCom Wireless, Inc.            45,422
       24411    MCI Communications Corp.           93,830
       24412    MCI WorldCom Network Services      93,830
       25441    1-800-COLLECT, Inc.                14,596
       27452    WorldCom Wireless, Inc.            45,422
       27453    Telecom*USA, Inc.                     519
       27454    MCI Wireless, Inc.                 45,422
       29269    WorldCom, Inc.                     93,830
       29270    MCI WorldCom Network Services      93,830
       29271    MCI Communications Corp.           93,830

The Debtors objected to the Claims.

The Debtors assert that Discover Financial owes MCI Network
Services $258,232 under the Agreement in connection with
prepetition charges incurred by Discover Financial's cardholders
for the Debtors' services.

Discover Financial disputed the amount of the Discover Debt and
any entitlement of the Debtors to interest.

On December 2, 2004, Discover Financial asked the U.S. Bankruptcy
Court for the Southern District of New York to clarify the
Debtors' 28th Omnibus Objection to Claims or in the alternative,
reconsider with respect to the disallowance of Discover
Financial's Claims.  Discover Financial asked the Court to
reinstate Claim No. 24381.

To resolve their disputes, the parties stipulate and agree that:

   (1) The Motion for Reconsideration will be deemed withdrawn,
       with prejudice;

   (2) MCI WorldCom Network has assumed the Merchant Services
       Agreement.  MCI represents and warrants that the Merchant
       Services Agreement is currently in force and effect
       between Discover Financial and MCI WorldCom Network.  Any
       cure of defaults due under Section 365 of the Bankruptcy
       Code for the assumption of the Merchant Services Agreement
       will be deemed fully satisfied by allowing Discover
       Financial to apply $93,830 against the Discover Debt.
       Applying $93,830 of the Discover Debt will fully satisfy
       Claim No. 24381 and reduce the Discover Debt to $164,402.
       Discover Financial waives and releases any right to a
       distribution under the Debtors' Plan of Reorganization on
       account of Claim No. 24381;

   (3) Claim No. 24378 will allowed as a Class 6 General
       Unsecured Claim for $44,085;

   (4) All the remaining claims of Discover Financial will be
       expunged in their entirety;

   (5) The $10,490 accrued interest will be added to the Discover
       Debt, making the total amount due from Discover Financial
       to MCI $174,892; and

   (6) The parties will exchange mutual releases.

Judge Gonzalez approves the parties' Stipulation.

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


* EPIQ Systems Buys Novare & Expanding Bankrupcy Service Offerings
------------------------------------------------------------------
EPIQ Systems, Inc. (NASDAQ: EPIQ) acquired the business of Novare,
Inc., for an undisclosed cash purchase price.  Novare is a leading
provider of service offerings related to preference, claims
reconciliation and liquidating trustee matters for Chapter 11
reorganization plans.  While Novare represents a small acquisition
with annual operating revenue of less than $1 million annually,
the expansion into this niche will provide complementary
diversification to EPIQ Systems' existing legal services business.
EPIQ Systems will operate Novare as a wholly owned subsidiary from
its current location in metropolitan Chicago, Illinois.

"Our move into Chapter 11 preference, claims reconciliation and
liquidating trustee matters is a logical compliment to our
existing bankruptcy offerings," Tom W. Olofson, chairman and CEO,
and Christopher E. Olofson, president and chief operating officer
of EPIQ Systems, said.  "The acquisition of Novare, Inc. provides
access to new opportunities and further strengthens the depth of
our presence in the market for fiduciary management and claims
administration solutions."

EPIQ Systems -- http://www.epiqsystems.com/-- is a national
leader in the market for fiduciary management and claims
administration systems and provides an advanced offering of
integrated technology-based products and services.  The Company
provides clients a packaged offering of both proprietary
technology and value-added services that comprehensively addresses
their extensive business requirements.

                          *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
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liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

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Each Friday's edition of the TCR includes a review about a book of
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Monthly Operating Reports are summarized in every Saturday edition
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For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                          *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L.
Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Jazel P.
Laureno, Cherry Soriano-Baaclo, Marjorie Sabijon, Terence Patrick
F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo Pinili,
Jr., and Peter A. Chapman, Editors.

Copyright 2005.  All rights reserved.  ISSN: 1520-9474.

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