TCR_Public/051104.mbx       T R O U B L E D   C O M P A N Y   R E P O R T E R

          Friday, November 4, 2005, Vol. 9, No. 262

                          Headlines

A.P.I. INC: Plan Confirmation Hearing Set for December 6
ABLE LABORATORIES: Holds Auction to Sell Assets
ACCELLENT INC: Moody's Rates $325 Mil. of Sr. Sub. Notes at Caa1
ACCURIDE CORP: Earns $19.1 Million of Net Income in Third Quarter
ALLIANCE IMAGING: Sept. 30 Balance Sheet Upside-Down by $43 Mil.

ALOHA AIRGROUP: U.S. Trustee Amends Creditors Committee Membership
ANCHOR GLASS: Court Allows Mepco Premium Financing Agreement
ANCHOR GLASS: Wants to Pay $4 Mil. in Critical Vendors' Claims
ANCHOR GLASS: Panel Taps Alvarez & Marsal as Financial Advisor
ARG HOLDINGS: Moody's Rates $95 Million 2nd-Lien Term Loan at B3

ATKINS NUTRITIONALS: Panel Can Hire Navigant as Financial Advisor
ATKINS NUTRITIONALS: Winston & Strawn Approved as Panel's Counsel
BEAZER HOMES: Earns $164.4 Million of Net Income in Third Quarter
BECKMAN COULTER: Reports Third Quarter Financial Results
BORGER ENERGY: Moody's Downgrades Mortgage Bonds' Rating to Ba3

BREUNERS HOME: Court Okays Avoidance Action Procedures
CAROLINA TOBACCO: Plan Confirmation Hearing Continued to Nov. 10
CENVEO INC: September 30 Balance Sheet Upside-Down by $12 Million
CITIZENS COMMS: Earns $38.4 Million of Net Income in Third Quarter
CMS ENERGY: Posts $265 Million Net Loss in Third Quarter

CATHOLIC CHURCH: Claimants Want to Pursue Actions Against Portland
CATHOLIC CHURCH: Portland Wants Relations with Insurers Protected
COLLINS & AIKMAN: Court Approves Auto Alliance & RCO Settlement
COLLINS & AIKMAN: Taps CB Richard & Keen Realty as Consultants
DELPHI CORP: USW Questions Significance of Northstar Document

DOMTAR INC: Moody's Reviews Ba2 Debt Rating & May Downgrade
DRESSER INC: Negotiates Feb. 15 Filing Extension with Lenders
EL POLLO: Moody's Rates Planned $150 Million Unsec. Notes at Caa1
EL POLLO: S&P Junks Proposed $150 Million Senior Unsecured Notes
ENTERGY NEW ORLEANS: Gets Interim Injunction Vs. Utility Companies

FALCON PRODUCTS: Wants PBGC to Terminate Three Pension Plans
FOAMEX INT'L: Gets Court Authority to Assume Four Supply Contracts
FOAMEX INT'L: Wants Court Okay to Reject 13 Executory Contracts
FOAMEX INT'L: Young Conaway Approved as Bankruptcy Co-Counsel
FOOTSTAR INC: Files First Amended Plan & Disclosure Statement

GENERAL MOTORS: Moody's Lowers Long-Term Rating to B1 from Ba2
GRIFFIN THERMAL: Case Summary & 20 Largest Unsecured Creditors
HALCYON ATTRACTIONS: Case Summary & 7 Largest Unsecured Creditors
IMMUNE RESPONSE: Nasdaq Cites Additional Noncompliance Issue
INDEPENDENCE TAX: Unit Earns $71K of Net Income in Third Quarter

INSIGHT COMMS: Posts $7.4 Million Net Loss in Third Quarter
INTEGRATED ELECTRICAL: Engages Gordian Group as Financial Advisor
INTERSTATE HOTELS: Earns $5.4 Mil. of Net Income in Third Quarter
JERNBERG INDUSTRIES: Ch. 7 Trustee Taps McGuireWoods as Counsel
JERNBERG INDUSTRIES: Section 341(a) Meeting Slated for Nov. 14

JEROME-DUNCAN: Wants Open-Ended Deadline to Decide on Leases
JOSEPH PENNY: Case Summary & 5 Largest Unsecured Creditors
KAISER ALUMINUM: Balks at Insurers' Cry for Exact Insurance Report
KAISER ALUMINUM: Settles Dispute Over Washington Revenue's Claims
LEINER HEALTH: Posts $1.4 Million Net Loss in Second Quarter

LEVEL 3 COMMS: Acquisition Cues Moody's to Affirm Junk Ratings
MCI INC: Heyman Investment Associates Owns 8.7% Equity Stake
MCLEODUSA INC: Court Okays Interim Use of Cash Collateral
MCLEODUSA INC: Disclosure Statement Objection Deadline is Dec. 2
MEDICAL TECHNOLOGY: Court Quashes Motion to Dismiss Ch. 11 Case

MERITAGE HOMES: Moody's Upgrades Corporate Family Rating to Ba2
MESABA AVIATION: Asks Court to Expand Mercer Management's Tasks
MESABA AVIATION: Wants to Assume Clearinghouse Agreement
MILLIPORE CORP: Moody's Reviews $100 Million Notes' Ba1 Rating
MIRANT CORP: Citibank & Wachovia Out of Creditors Committee

MIRANT CORP: Lenders Consent to Extend DIP Maturity to Jan. 31
MIRANT CORP: Mackay Shields Resigns from MAGi Creditors Committee
NABI BIOPHARMA: Botched Vaccine Dev't Cues S&P to Put Neg. Outlook
NATIONSLINK FUNDING: Fitch Holds C Rating on $5.3M Class J Certs.
NEW WORLD: Sept. 27 Balance Sheet Upside-Down by $125.7 Million

NEXSTAR BROADCASTING: Posts $8.9 Million Net Loss in Third Quarter
NORTEL NETWORKS: Board Reports Preferred Share Dividends
NORTHWEST AIRLINES: In Talks with Unions to Cut Labor Costs
O'SULLIVAN IND: Gets Court Nod for Joint Administration of Cases
O'SULLIVAN INDUSTRIES: Walks Away from 19 Executory Contracts

O'SULLIVAN IND: Wants Interim Compensation Procedures Established
OAK CREEK: Gibson Dunn Approved as Bankruptcy Counsel
PERKINELMER INC: Moody's Withdraws Ba1 Corporate Family Rating
PONDERLODGE INC: Arthur Abramowitz Named as Chapter 11 Trustee
PONDERLODGE INC: Chapter 11 Trustee Hires Murtaugh as Accountants

PRIMUS TELECOMMS: Balance Sheet Upside-Down by $220M at 3rd Qtr.
QUEBECOR WORLD: Low 3rd Quarter Results Spur S&P to Shave Ratings
QWEST COMMUNICATIONS: Prices $1.1 Billion Convertible Senior Notes
QWEST COMMS: Moody's Rates Newly Launched Senior Notes at B3
QWEST COMMS: Spin-Off Plans Cue Fitch to Put Ratings at Low-B

RED TAIL: Court Okays Hiring of Cable Huston as Bankruptcy Counsel
RED TAIL: Court Approves Hiring of Lane Powell as Special Counsel
RITE AID: Names Kevin Twomey CFO & Doug Donley as Chief Accountant
ROCKLAND TOBACCO: Fitch Rates Settlement Bonds Series 2005B at BB
ROOMLINX INC: Michael S. Wasik Appointed as New Company CEO

ROYAL GROUP: Expects Sales Decline in Third Quarter Results
SALOMON BROTHERS: Fitch Affirms Low-B Ratings on Two Cert. Classes
SEARS ROEBUCK: Liquidity Prompts S&P to Lift Low-B Ratings
SILICON GRAPHICS: NYSE Delists Common Stock & Sr. Sec. Notes
SIRIUS SATELLITE: Incurs $180.4 Million Net Loss in Third Quarter

SOUPER SALAD: Court Confirms Plan of Reorganization
SUN HEALTHCARE: Equity Deficit Narrows to $109.5 Mil. at Sept. 30
TOM'S FOODS: Exclusive Plan Filing Period Extended Until Dec. 2
TORCH OFFSHORE: Court Approves Energy Partners Settlement Pact
TORCH OFFSHORE: Can Walk Away from Pipeline Installation Pact

TRC COMPANIES: Delays Filing of Form 10-K to December 31
TRIGEM COMPUTER: Chapter 15 Petition Summary
TRONOX INC: S&P Assigns BB- Rating to $450-Mil Sr. Secured Loans
TXU CORP: Earns $565 Million of Net Income in Third Quarter
U.S. REMEDIATION: Case Summary & 20 Largest Unsecured Creditors

U.S. STEEL: Fitch Rates $600 Million Senior Secured Loan at BB+
UBIQUITEL INC: Earns $6.2 Million of Net Income in Third Quarter
UBIQUITEL INC: Wireless Unit Returns Spur S&P to Review Ratings
UQM TECHNOLOGIES: Losses Continue in FY 2006 2nd Quarter
USEC INC: Posts $5.2 Million Net Loss in Third Quarter

VITAMIN SHOPPE: Moody's Lowers $116 Mil. Bank Loan's Rating to B2
W.R. GRACE: Futures Rep. Says Asbestos Bar Date is Useless
WATERMAN INDUSTRIES: Court Approves Amended Disclosure Statement
WENDY'S INT'L: Continued Decline Cues Moody's to Review Ratings
WILLIAMS COS: Partners Units Post $2.9MM Net Loss in 3rd Quarter

WILTEL COMMS: Moody's Affirms $100 Million Term Loan's Caa1 Rating
WINN-DIXIE: Will Pay $2.75 Mil. to CLC to Settle Lease Dispute
WORLDCOM INC: Lerach Firm Says Investors Win $651MM in Lawsuits
XOMA LTD: Sept. 30, 2005 Balance Sheet Upside-Down by $10.99 Mil.

* BOOK REVIEW: THE FAILURE OF THE FRANKLIN NATIONAL BANK:
               Challenge to the International Banking System

                          *********

A.P.I. INC: Plan Confirmation Hearing Set for December 6
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota will
convene a hearing to consider confirmation of A.P.I. Inc.'s Second
Amended Plan of Reorganization on Dec. 6, 2005.

A pre-trial hearing will be held on Nov. 7, 2005, at 1:30 p.m., to
hear and settle objections to the Debtor's Plan.

                        Terms of the Plan

Under the Plan, unimpaired claims, consisting of holders of wage,
employee benefits, and general unsecured claims will be paid in
full on the Plan's effective date.  

Secured creditors LaSalle Bank National Association and Wells
Fargo Bank National Association will retain their liens on the
Debtor's property.

Asbestos personal injury claims will be transferred to an Asbestos
Trust on the Effective Date.  API will pay the Asbestos Trust
$14.5 million.  The Debtor's parent company, API Group, Inc., will
pay the Asbestos Trust $500,000 on the Effective Date.

The Initial Payments will be used to:

   (1) pay all amounts owed to professionals engaged by the
       Official Committee of Asbestos Personal Injury Claimants
       and the Official Representative for Future Asbestos
       Personal Injury Claimants (other than those retained by
       the Debtor), and

   (2) pay $250,000 to the law firm of Sieben Polk LaVerdiere &
       Dusich, P.A., for services rendered and expenses incurred
       in connection with the negotiation of the Plan.

The balance will be used to partially pay asbestos claimants.  API
will pay the Trust 80 quarterly payments of $325,000 starting on
the fourth month from the Effective Date -- for a total of $26
million.  

Equity interests will be cancelled.

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

  http://www.researcharchives.com/bin/download?id=050614004857

Headquartered in St. Paul, Minnesota, A.P.I. Inc., f/k/a A.P.I.
Construction Company -- http://www.apigroupinc.com/-- is a    
wholly owned subsidiary of the API Group, Inc., and is an
industrial insulation contractor.  The Company filed for chapter
11 protection on January 5, 2005 (Bankr. D. Minn. Case No.
05-30073).  James Baillie, Esq., at Fredrikson & Byron P.A.,
represents the Debtor in its restructuring.  When the Debtor filed
for protection from its creditors, it listed total assets of
$34,702,179 and total debts of $63,000,000.


ABLE LABORATORIES: Holds Auction to Sell Assets
-----------------------------------------------
Able Laboratories, Inc. (NASDAQ:ABRXQ) held an auction of its
assets on Nov. 1, 2005, to solicit higher and better bids than the
bid reflected in the asset purchase agreement entered into on
Oct. 19, 2005.  At the conclusion of the auction, the company
entered into an asset purchase agreement dated Nov. 1, 2005, with
the winning bidder at the auction.

The U.S. Bankruptcy Court for the District of New Jersey, Trenton
Division, has scheduled a final hearing to consider the approval
of the company's sale of its assets and the assumption and
assignment of contracts under Sections 363 and 365 of the
Bankruptcy Code for Nov. 7, 2005.

Headquartered in Cranbury, New Jersey, Able Laboratories, Inc.
-- http://www.ablelabs.com/-- develops and manufactures generic      
pharmaceutical products in tablet, capsule, liquid and suppository
dosage forms.  The Company filed for chapter 11 protection on
July 18, 2005 (Bankr. D. N.J. Case No. 05-33129) after it halted
manufacturing operations and recalled all of its products not
meeting FDA regulatory standards.  Deborah Piazza, Esq., and Mark
C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP represent
the Debtor in its restructuring efforts.  When the Debtor filed
for protection from its creditors, it listed $59.5 million in
total assets and $9.5 million in total debts.


ACCELLENT INC: Moody's Rates $325 Mil. of Sr. Sub. Notes at Caa1
----------------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating to
Accellent Inc., a holding company which will be wholly-owned by
Kohlberg Kravis Roberts & Co. following the closing of a
transaction valued at $1.27 billion.  Moody's also assigned a B2
rating to $450 million in proposed senior secured bank facilities
and a Caa1 rating to $325 million of proposed senior subordinated
notes.  The ratings are subject to our review of final
documentation.

In addition to raising about $700 million of new debt, KKR and
management will invest about $640 million of equity to complete
the transaction.  The rating outlook is stable.  Accellent Corp.'s
prior debt ratings (including its corporate family rating) will be
withdrawn at closing.

Ratings assigned:

  Accellent Inc. (under new ownership):

     * B2 corporate family rating
     * B2 $375 million guaranteed, senior secured term-loan B
     * B2 $75 million guaranteed, senior secured revolver
     * Caa1 $325 million guaranteed, senior subordinated notes
     * SGL-3 speculative grade liquidity rating

Ratings to be withdrawn at closing:

  Accellent Corp. (pre-KKR):

     * B2 corporate family rating
     * B2 $174 million guaranteed, senior secured term loan B
     * B2 $40 million guaranteed, senior secured revolver
     * Caa1 $190 million guaranteed, senior subordinated notes

Moody's ratings reflect very high leverage and a small revenue
base, as well as some product obsolescence and regulatory risk,
offset by a leading contract manufacturing business which focuses
on markets that exhibit good underlying growth, as well as
improved profitability associated with a successful integration of
MedSource.

Under new KKR ownership, the company will initially be very highly
leveraged, raising absolute debt levels by 75%.  Adjusted debt to
expected 2005 revenues will be over 150% and adjusted Debt to
EBITDA is expected to be 7.6 times, even after including, on a pro
forma basis, EBITDA associated with two very recent acquisitions.
In addition, even after NOL benefits of approximately $7 million
during 2005, free cash flow to debt ratios are expected to be in
the low single digit range following this transaction.

Since June 2004, however, when Moody's assigned the initial
ratings to Accellent Corp.(formerly Medical Device Manufacturing,
Inc.), the company has de-leveraged by improving its
profitability; Debt to EBITDA declined from approximately 7.0
times to under 5.0 times prior to this LBO transaction.  This de-
leveraging has been accomplished in large part to the successful
integration of MedSource, providing Accellent with orthopedic and
cardiac rhythm management capabilities.

Management has been able to raise MedSource's sales growth rates
to levels comparable to Accellent prior to the acquisition and has
achieved synergies of about $17 million.  Management made two
additional acquisitions (Campbell Engineering and Machining
Technology Group, LLC) totaling $60 million since September 2005
-- providing greater capabilities in manufacturing spine and knee
products.  However, the ratings and outlook do not anticipate the
pursuit of additional acquisitions until leverage improves.

Accellent does contract manufacturing for some of the key medical
device manufacturers in the nation, focusing on three main
clinical areas:

   * endoscopy,
   * cardiology, and
   * orthopedics.

Particularly for cardiology products, there is risk of
technological obsolescence as manufacturers must introduce new
platforms with relative frequency to remain competitive.  This
risk is mitigated for Accellent because it often serves the key
players in a specific market.  Therefore, even if a manufacturer
loses market share to a competitor, Accellent may be able to pick-
up business from the competitor.

Although there is some risk associated with customer
concentration, contracts are written on the basis of individual
programs or product lines versus customers.  Moody's believes that
the loss of revenues from one of Accellent's largest customers,
Boston Scientific, related to the transfer of products currently
assembled by Accellent, is isolated and is not likely to be
replicated with other contracts.

Moody's believes that increased regulatory oversight of medical
device manufacturers will likely extend to contract manufacturers
as well.  Accellent may benefit from more business if
manufacturers seek to reduce the number of outsourcing partners
they contract with.  However, Moody's believes that although
product risks are often associated with design flaws rather than
issues with components or assembly, a stricter regulatory
environment could limit the ability of Accellent to expand its
services along the manufacturing chain if manufacturers desire
greater control of complex portions of the manufacturing process.

As a leading contract manufacturer focusing on three key clinical
areas, the company is able to provide a range of services to well-
established medical device companies, including:

   * Johnson & Johnson,
   * Medtronic, and
   * Boston Scientific.

Moody's believes that underlying drivers for the medical device
industry are stable and that demand for devices should remain
strong.  Furthermore, a significant portion of Accellent's new
business is associated with new product launches.  Volume
increases and new business are critical drivers to sales as unit
pricing typically remains flat.

The stable rating outlook assumes that the company will focus
largely on organic growth and de-leveraging, such that free cash
flow to debt ratios can be sustained in the 3-6% range and that
Debt to EBITDA will decline relatively rapidly.  If Accellent
continues to make acquisitions that prevent de-leveraging or if
EBITDA and cash flow improvements are not attained, the ratings
may come under pressure.

Because the B2 ratings are prospective in nature, Moody's believes
that the likelihood of an upgrade is limited over the near-term.
Over time, however, if the company is able to internally expand
its business and sustain free cash flow to debt above 6% and
adjusted Debt to EBITDA below 5.0 times, the ratings may improve.

Structurally, the B2 assigned to the credit facilities reflects
security provided by a first priority interest in the stock of
Accellent Inc. and each of Accellent's direct and indirect US
subsidiaries and perfected security interests in all material
tangible and intangible assets.  There was no notching upward from
the corporate family rating for secured debt because full recovery
in a distressed scenario was not certain.  The senior subordinated
notes are rated Caa1 because they are unsecured and could
experience loss in a distressed scenario.

The SGL-3 speculative grade liquidity rating reflects Moody's
belief that the company will have adequate liquidity.  Despite the
expectation of adding new contracts, the loss of business from
Boston Scientific could place some pressure on liquidity during
2006.  Furthermore, free cash flow relative to debt is modest.

Although the old revolver was tapped to fund two recent
acquisitions, the company's revolver is not expected to be heavily
utilized absent opportunistic acquisitions.  Moody's anticipates
that there will likely be adequate cushions associated with bank
covenants, assuming the company achieves relatively rapid de-
leveraging.

Headquartered in Wilmington, Massachusetts, Accellent Inc. is a
holding company, which, along with its operating subsidiaries,
including Accellent Corp., will be owned by Kohlberg Kravis
Roberts and Co.

Accellent Corp. is a leader in contract manufacturing and supply
chain management services for the medical device industry.  Pro
forma sales for fiscal year end 2004, including full year revenues
for MedSource and the two recent acquisitions, were approximately
$436 million.


ACCURIDE CORP: Earns $19.1 Million of Net Income in Third Quarter
-----------------------------------------------------------------
Accuride Corporation (NYSE: ACW) reported net sales of
$316.1 million for the third quarter ended September 30, 2005.  
This compares to net sales of $123.5 million for the third quarter
of 2004.  For the nine months ended September 30, 2005, net sales
were $931.6 million compared to net sales of $355.5 million for
the same nine-month period in 2004.  Net income was $19.1 million
for the quarter compared to $7.1 million for the third quarter of
2004.   

For the first nine months of 2005, net income was $36.3 million
compared to $16.0 million for the first nine months of 2004.  The
Company said the results reflect continuing strength in the
commercial vehicle industry with Class 5-8 and trailer builds up
12% over the prior year third quarter and the acquisition of
Transportation Technologies Industries, Inc., on January 31, 2005.

                    Pro Forma Results for the
                     Acquisition of TTI and
                    Initial Public Offering

The Company's net sales were $316.1 million for the third quarter
of 2005 compared to pro forma net sales of $279.2 million for the
third quarter in the prior year, an increase of 13.2%.  For the
first nine months ended September 30, 2005, pro forma net sales
were $985.9 million compared to $790.8 million for the same
nine-month period in 2004, an increase of 24.7%.

Adjusted EBITDA was $51.7 million for the third quarter of 2005
compared to pro forma Adjusted EBITDA of $42.6 million for the
prior year, an increase of 21.4%.  For the first nine months of
2005, pro forma Adjusted EBITDA was $155.1 million compared to
$120.3 million for the same nine-month period in 2004, an increase
of 28.9%.  

Net income was $19.1 million for the third quarter of 2005
compared to pro forma net income of $7.6 million for the third
quarter of 2004, an increase of 151.3%.  For the first nine months
of 2005, pro forma net income was $37.9 million compared to $19.4
million for the first nine months of 2004, an increase of 95.4%.

Net income adjusted for the initial public offering and other
non-operating/non-recurring items was $18.1 million for the
quarter ended September 30, 2005, compared to $8.4 million in
2004, an increase of 115.5%.  Operating Earnings for the quarter
exclude $1.4 million in unrealized gains related to the
mark-to-market of interest rate swaps and $0.4 million in
transaction costs related to our recently completed secondary
stock offering.  For the first nine months of 2005, Operating
Earnings were $50.9 million compared to $22 million in 2004.  For
the first nine months of 2005, Operating Earnings exclude
$0.7 million in unrealized gains related to the mark-to-market of
interest rate swaps and $12.6 million in refinancing costs and
loss on extinguishment of debt.  

                     Liquidity and Cash Flow

At September 30, 2005, the Company had $40.1 million of cash and
$712.7 million of total debt for net debt of $672.6 million, which
declined by $24.3 million in the quarter.  The Company's leverage
ratio or net debt to pro forma Adjusted EBITDA on Sept. 30, 2005,
was 3.5 times, a reduction from approximately 4.3 at the time of
the IPO in April.  In the third quarter, the Company reduced
senior debt by $35 million.  For the first nine months of 2005,
the Company has reduced its senior debt by $50.8 million excluding
proceeds of $89.6 million from the IPO.

For the third quarter of 2005, cash from operating activities was
$37 million and capital expenditures totaled $13.3 million,
producing free cash flow of $23.7 million.

                       Review and Outlook

"Overall, we are pleased with the results from the quarter as we
continue to focus on improving margins and generating strong cash
flow," said Terry Keating, Accuride's President and CEO.   "We are
progressing well with our integration of the former TTI businesses
and the rapid deleveraging of our balance sheet as evidenced by
the $35 million debt reduction in the quarter.  We continue to see
strong industry fundamentals supported by freight growth and
replacement demand.  However, high fuel prices that have been
further aggravated by the recent hurricanes remain a concern.  
Despite this we remain committed to our previous guidance of
$205 million in pro forma adjusted EBITDA for the full year."

Accuride Corporation -- http://www.accuridecorp.com/-- is one of     
the largest and most diversified manufacturers and suppliers of
commercial vehicle components in North America.  Accuride's
products include commercial vehicle wheels, wheel-end components
and assemblies, truck body and chassis parts, seating assemblies
and other commercial vehicle components.  Accuride's products are
marketed under its brand names, which include Accuride, Gunite,
Imperial, Bostrom, Fabco and Brillion.

                          *     *     *

As reported in the Troubled Company Reporter on July 12, 2005,
Moody's Investors Service upgraded the corporate family
(previously called senior implied) and senior secured debt ratings
of Accuride Corporation and Accuride Canada Inc. to B1 from B2,
and Accuride's senior subordinated debt to B3 from Caa1.  At the
same time the rating outlook was revised to stable from positive.  

As reported in the Troubled Company Reporter on Feb. 3, 2005,
Standard & Poor's Ratings Services raised its corporate credit
rating on Accuride Corporation to 'B+' from 'B' and removed the
ratings from CreditWatch, where they were placed on Dec. 28, 2004.

Evansville, Indiana-based Accuride has total debt of about
$800 million.  The ratings outlook is stable.


ALLIANCE IMAGING: Sept. 30 Balance Sheet Upside-Down by $43 Mil.
----------------------------------------------------------------
Alliance Imaging, Inc. (NYSE:AIQ) reported results for the third
quarter and first nine months ended Sept. 30, 2005.

Revenue was $106.2 million for the third quarter of 2005, in line
with the Company's preannounced third quarter revenue range of
approximately $106 million.  The third quarter 2005 revenue of
$106.2 million represents a decrease of $3.6 million, or 3.2%,
compared to $109.8 million reported in the third quarter of 2004.
For the first nine months of 2005, revenue was $320.6 million
compared to $324.9 million in the same period of 2004, a decrease
of 1.3%.

Alliance's Adjusted EBITDA was $39.6 million in the third quarter
of 2005, in line with the Company's preannounced third quarter
Adjusted EBITDA range of approximately $39.0 million to $39.5
million.  The third quarter 2005 Adjusted EBITDA of $39.6 million
represents a decrease of $4.6 million, or 10.4%, compared to $44.2
million reported in the third quarter of 2004.

Third quarter 2005 results were negatively impacted primarily by
softer than anticipated MRI scan volumes, as well as the effect of
Hurricanes Katrina and Rita, and rising fuel and transportation
costs.  The Company estimated that the hurricanes had the impact
of reducing revenue by approximately $0.5 million in the third
quarter and is expected to impact full year 2005 results by
approximately $1.4 million.  Alliance's business was also impacted
by increasing diesel fuel costs and mileage reimbursement rates in
the third quarter.  These increases, which affect the cost of
moving mobile systems to client locations and transportation costs
of Alliance's technologists, reduced Adjusted EBITDA by
approximately $400,000 in the third quarter and are expected to
reduce full year Adjusted EBITDA by approximately $1.2 million.
Adjusted EBITDA also declined by approximately $700,000 due to the
Company recording a $600,000 provision for doubtful accounts in
the third quarter of 2005 compared to a credit of $100,000 million
in the corresponding period of 2004, due to the collection of
higher than normal aged accounts receivable in the third quarter
of 2004.  The provision for doubtful accounts was 0.5% of revenue
in the third quarter of 2005, in line with Alliance's historical
experience.

For the first nine months of 2005, Adjusted EBITDA totaled $122.5
million compared to $128.4 million in the first nine months of
2004, a decrease of $5.9 million, or 4.6%.  Of this decrease,
$1.7 million was due to the Company recording $2 million in the
provision for doubtful accounts in the first nine months of 2005,
or 0.6% of revenue, compared to $300,000, or 0.1% of revenue, in
the first nine months of 2004 due to the collection of higher than
normal amounts of aged accounts receivable in the first nine
months of 2004.

Cash flow provided by operating activities was $42.3 million in
the third quarter of 2005 compared to $46.1 million in the
corresponding quarter of 2004, and was $93.0 million for the first
nine months of 2005 and $107.1 million for the first nine months
of 2004.  Alliance made $27.4 million of payments, net of proceeds
from borrowings and capital lease obligations assumed for the
purchase of equipment, on its long-term debt in the first nine
months of 2005.  The Company's cash and cash equivalents balance
increased by $12.6 million to $33.3 million at Sept. 30, 2005 from
$20.7 million at Dec. 31, 2004.

Paul S. Viviano, Chairman of the Board and Chief Executive
Officer, stated, "Alliance's third quarter results were impacted
by several factors.  Scan volumes were softer than expected,
largely due to weak hospital volumes as reported by several
investor-owned hospital companies, continued utilization pressures
from insurers, and continued patient-related cost-sharing
programs.  Alliance's business was also impacted by overcapacity
of imaging equipment in the marketplace, especially related to
medical groups adding imaging capacity within their practice
setting.  The disruption of operations caused by Hurricanes
Katrina and Rita and rising fuel and transportation costs also
adversely impacted our business in the third quarter."

As previously announced, effective Sept. 1, 2005, Alliance
purchased certain assets associated with six established multi-
modality fixed-sites and three recently established fixed-sites
for an aggregate purchase price of $7.7 million in cash, which was
financed through internally generated funds of the company.  This
acquisition is expected to generate approximately $6 million in
annualized revenue for Alliance.  The Company's third quarter 2005
results include one month of operations from this acquisition.

                      PET Scans Acquisition

Alliance previously reported that effective Oct. 1, 2005, the
Company acquired 100% of the outstanding stock of PET Scans of
America Corp., a mobile provider of PET and PET/CT services
primarily to hospitals in 13 states.  Alliance acquired or leased
12 PET and PET/CT systems in connection with this acquisition.

The purchase price consisted of $36.6 million in cash and $4.0
million of assumed liabilities and transaction costs, which was
financed through a combination of the Company's revolving line of
credit, internally generated funds, and capital leases.  The
previously disclosed purchase price of approximately $44 million
was revised due to the receipt of a refund from a lessor due to
the Company's decision not to purchase certain assets that were
under operating lease obligations.  Annualized revenue from the
PSA acquisition is expected to contribute approximately $20
million.

Relating to these acquisitions, Mr. Viviano commented, "Alliance's
efforts continue to be focused on operating our core mobile MRI
business.  Our recently completed acquisition of PSA will further
expand our PET and PET/CT business.  We continue to grow our
fixed-site business, accelerating our expansion by acquiring nine
fixed-site centers with operations in certificate-of-need states.
Both of these acquisitions complement the Company's strategy and
are accretive."

Alliance Imaging is a leading national provider of shared-service
and fixed-site diagnostic imaging services, based upon annual
revenue and number of systems deployed.  Alliance provides imaging
services primarily to hospitals and other healthcare providers on
a shared and full-time service basis, in addition to operating a
growing number of fixed-site imaging centers.  The Company had 497
diagnostic imaging systems, including 350 MRI systems and 58 PET
or PET/CT systems, and over 1,000 clients in 44 states at
September 30, 2005.

At Sept. 30, 2005, Alliance Imaging, Inc.'s balance sheet showed a
$43,334,000 stockholders' deficit compared to a $67,528,000
deficit at Dec. 31, 2004.


ALOHA AIRGROUP: U.S. Trustee Amends Creditors Committee Membership
------------------------------------------------------------------
Steven Jay Katzman, the U.S. Trustee for Region 15, amended the
appointment of creditors serving on the Official Committee of
Unsecured Creditors in Aloha Airgroup, Inc., and its debtor-
affiliate's chapter 11 cases.

Airport Terminal Services replaced SITA in the Official Committee.  
Captain Richard Bockhaus has also been added to the Committee.

The Creditors' Committee's current members are:

        1. Air Line Pilots Association
           c/o Katz & Ranzman, P.C.
           Attn: Daniel M. Katz
           1015 18th Street, N.W., Suite 801
           Washington, D.C. 20036
           Tel: 202-659-1799, Fax: 202-659-3145

        2. International Association of Machinist and Aerospace
           Workers, AFL-CIO
           c/0 Lowenstein Sandler, P.C.
           Attn: Sharon L. Levine
           65 Livingston Avenue
           Roseland, New Jersey
           Tel: 973-597-2374, Fax: 973-597-2375

        3. Association of Flight Attendants - CWA
           Attn: Peggy H. Gordon
           3375 Koapaka Street, D-131
           Honolulu, Hawaii 96819
           Tel: 808-792-7137, Fax: 808-792-7138

        4. Airport Terminal Services
           c/o Armstrong Teasdale, LLP
           Attn: Richard W. Engel, Jr.
           One Metropolitan Square, Suite 2600
           St. Louis, Missouri 63102
           Tel: 314-621-5070, Fax: 314-621-5065

        5. Milici Valenti Ng Pack, Inc.
           Attn: Nick Ng Pack
           999 Bishop Street, 24th Floor
           Honolulu, Hawaii 96813
           Tel: 808-536-0881, Fax: 808-529-6208

        6. Pratt & Whitney
           Attn: F. Scott Wilson
           400 Main Street, M/S 133-54
           East Hartford, Connecticut 06108
           Tel: 860-565-7364, Fax: 860-557-9946

        7. HMSA
           Attn: Edward S. Van Lier Ribbink
           P.O. Box 860
           Honolulu, Hawaii 96808-0860
           Tel: 808-948-6275, Fax: 808-948-5999

        8. Pension Benefit Guaranty Corp.
           Attn: Craig Yamaoka
           1200 K Street, N.W.
           Washington, District of Columbia 20005
           Tel: 202-326-4070, Fax: 202-842-2643

        9. Gate Gourmet
           c/o Arnold & Porter LLP
           Attn: Robert Barret
           370 Seventeenth Street, Suite 4500
           Denver, Colorado 80202-1370
           Tel: 303-863-2319, Fax: 303-832-0428

       10. Captain Richard Bockhaus
           P.O. Box 161179
           Honolulu, Hawaii 96816
           Tel: 808-554-5116, Fax: 808-947-4263
         
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 Honolulu, Hawaii, Aloha Airgroup, Inc. --
http://www.alohaairlines.com/-- provides air carrier service  
connecting the five major airports in the State of Hawaii.  Aloha
Airgroup and its subsidiary Aloha Airlines, Inc., filed for
chapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case No.
04-03063).  Alika L. Piper, Esq., Don Jeffrey Gelber, Esq., and
Simon Klevansky, Esq., at Gelber Gelber Ingersoll & Klevansky
represent the Debtors in their restructuring efforts.  When the
Debtor filed for protection from its creditors, it listed more
than $50 million in estimated assets and debts.


ANCHOR GLASS: Court Allows Mepco Premium Financing Agreement
------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
authorized Anchor Glass Container Corporation to enter into a $2.3
million premium financing agreement with Mepco Acceptance
Corporation.

As reported in the Troubled Company Reporter on Oct. 13, 2005, the
Mepco Policies bear a $2,264,348 total annual premium, which sum
Anchor Glass wishes to finance in accordance with a Premium
Finance Agreement.  The Debtor told the Bankruptcy Court that
maintaining the coverage under the Policies are essential in
preserving Anchor's property, assets and business.  The Debtor had
been unable to locate any source of unsecured premium financing.

Under the Finance Agreement, the premium for the Policies grants
Mepco a security interest in the gross unearned premiums that
would be payable in the event of cancellation of the insurance
Policies.

In addition, Mepco is authorized to assess and collect late
charges not exceeding 5% of the monthly installment if an
installment is 10 days or more past due.  Mepco is also authorized
to cancel the financed insurance policies and obtain the return of
any unearned premiums in the event of an uncured default in the
payment of any installment due.

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


ANCHOR GLASS: Wants to Pay $4 Mil. in Critical Vendors' Claims
--------------------------------------------------------------
Anchor Glass Container Corporation seeks authority from the U.S
Bankruptcy Court for the Middle District of Florida to compromise
and pay, in its sole discretion, up to $4 million in prepetition
claims of certain critical vendors and service providers that are
essential to the uninterrupted functioning of its operations.

According to Robert A. Soriano, Esq., at Carlton Fields PA, in
Tampa, Florida, the $4 million Cap represents less than 1% of the
Debtor's total liabilities, and approximately 8% of its total
trade-related liabilities, as of the Petition Date.  

The Debtor proposes to condition the payment of Critical Vendor
Claims on the agreement of the individual Critical Vendors to
compromise their prepetition claims and to continue supplying
goods and services to the Debtor on terms that are consistent
with the historical trade terms between the parties.

The Debtor reserves the right to negotiate trade terms with any
Critical Vendor, as a condition to payment of any Critical Vendor
Claim, that vary that from the Customary Trade Terms to the
extent the Debtor determines that the terms are necessary to
procure essential goods or services or are otherwise in the best
interests of the Debtor's estate.

If a Critical Vendor refuses to supply goods and services to the
Debtor on Customary Trade Terms after receipt of payment of its
Critical Vendor Claim, or fails to comply with any Trade
Agreement, the Debtor seeks the Court's authority to:

   a.  terminate any Trade Agreement with the Critical Vendor;
       and

   b.  declare that provisional payments made to Critical Vendors
       be deemed to have been in payment of then-outstanding    
       postpetition claims of the vendors without further Court
       order.

The Debtor proposes that any Trade Agreement terminated as a
result of a Critical Vendor's refusal to comply with the terms be
reinstated if:

   1.  The determination is reversed by the Court, after notice
       and a hearing following a motion by the Critical Vendor,
       for good cause shown that the determination was materially
       incorrect; or

   2.  The default under the Trade Agreement was fully cured by
       the Critical Vendor not later than five days after the
       Debtor's notification to the Critical Vendor that a
       default had occurred; or

   3.  The Debtor, in its sole discretion, reaches a favorable
       alternative agreement with the Critical Vendor.

The Debtor will maintain a matrix summarizing, with respect to
the period after the Petition Date:

   -- the name of each Critical Vendor;

   -- the amount each Critical Vendor that has been paid on
      account of its Critical Vendor Claims; and

   -- the goods or services provided by each Critical Vendor.

The Debtor, Mr. Soriano relates, has critically examined whether
the Critical Vendor Claim payments are necessary and whether
those payments will ensure that it will have access to adequate
amounts of trade credit on postpetition basis.  Specifically, the
Debtor has undertaken a thorough review of its accounts payable
and its list of prepetition vendors to identify those vendors who
are essential to its operations.

The Debtor believes that payment of the Critical Vendor Claims in
the manner they propose will increase its postpetition liquidity
and profitability.

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


ANCHOR GLASS: Panel Taps Alvarez & Marsal as Financial Advisor
--------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Anchor
Glass Container Corp.'s chapter 11 case seeks authority from the
U.S. Bankruptcy Court for the Middle District of Florida to retain
Alvarez & Marsal, LLC, as its financial advisor, nunc pro tunc to
Aug. 29, 2005.

A&M is an internationally recognized business turnaround and
crisis management company that specializes in working with
underperforming and troubled companies and their stakeholders.  
A&M and its employees have had extensive restructuring experience
in many industries, including manufacturing, apparel, cosmetics,
telecommunications, retail, and textile.  

As financial advisor, A&M will:

   (a) review and evaluate the current and prospective financial
       and operational condition of the Debtor, including but not
       limited to cash receipts and disbursement forecasts, short
       term and long term business plans and various plans of
       reorganization that maybe considered or pursued by the
       Debtor, review appraisals, DIP financing, plans and effort
       to sell assets, recapitalize or reorganize the Debtor;

   (b) assist the Committee and its counsel in evaluating and
       responding to various developments or motions during
       the course of the Debtor's Chapter 11 case, including
       providing expert testimony as may be required and
       acceptable to A&M; and

   (c) provide other services that may be required by the
       Committee and as may also be acceptable to A&M.

Terry Hamilton, Managing Director with A&M, will be responsible
for the overall engagement.  Mr. Hamilton has more than 20 years
of experience serving the needs of financially and operationally
challenged organizations.

A&M will be paid for its services at these hourly rates:

         Professional             Hourly Rates
         ------------             ------------
         Managing Director             $550
         Director                      $425
         Associate                     $325
         Analyst                       $275

The firm will also be reimbursed for any actual and necessary
expenses incurred while representing the Committee.  

Mr. Hamilton assures the Court that A&M is not connected with the
Debtor, its known creditors, and any other interested parties,
their attorneys and accountants, nor any person in the office of
the U.S. Trustee.

Mr. Hamilton discloses that the firm is currently performing or
has within the past three years provided services to these
companies in matters wholly unrelated to the Debtor's case:

   -- The Bank of New York;
   -- Cerberus Capital Management LP;
   -- Houlihan, Lokey, Howard & Zukin;
   -- CenterPoint Energy; and
   -- Alliance Capital Management

Mr. Hamilton attests that A&M did not receive any compensation
from the Debtor or any other parties-in-interest in connection
with the Chapter 11 case.

                      U.S. Trustee Objects

Felicia S. Turner, the United States Trustee for Region 21,
objects to the retention of Alvarez & Marsal effective as of
August 29, 2005.  The U.S. Trustee asserts that a nunc pro tunc
approval should not be granted if a professional's failure to
file a timely application was due to something other than
excusable neglect.  The U.S. Trustee says the Committee has
failed to demonstrate excusable neglect for its delay in filing
the Application.

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


ARG HOLDINGS: Moody's Rates $95 Million 2nd-Lien Term Loan at B3
----------------------------------------------------------------
Moody's Investors Service assigned B2 ratings to the first-lien
credit facilities ($175 million term loan and $30 million
revolving credit facility), and a B3 rating to the $95 million
second-lien term loan of ARG Holdings, Inc., a holding company for
Alliant Resources Group, Inc.

In the same action, Moody's assigned a B2 Corporate Family Rating
to ARG Holdings, Inc.  Proceeds from the credit facilities
combined with equity from both a new sponsor (Lindsay, Goldberg &
Bessemer) and existing management/employees, are expected to be
used to purchase the company from existing majority owners while
also refinancing the company's existing debt (currently rated B2).
The outlook for the ratings is stable.

According to Moody's, the ratings reflect:

   * Alliant's position as the 14th largest domestic US insurance
     brokerage firm; and

   * its presence in several, unique customer niches, including:

     -- Indian Nations,
     -- law firms, and
     -- public entities.

The rating also considers the company's strong organic growth and
consistent profitability, in spite of its formation in 2000 and
its subsequent roll-up acquisition strategy.  Further, Moody's
believes that support exists among carriers for mid-sized
brokerage firms, particularly in the small to middle market
account arena as demand for insurance placement services remain
strong.

Offsetting these positive factors are the company's very high
financial leverage at nearly 5x debt-to-EBITDA, along with its
relatively modest scale and franchise strength.  Alliant's high
level of growth is also a risk factor, given that much of it has
been achieved through acquisitions.  Although the company tends to
run its subsidiaries as autonomous units, Moody's believes that
growth through acquisitions presents both operational and
integration risks.

Further, credit risk for the insurance brokerage industry has
increased over the last year given the extensive legal and
regulatory scrutiny stemming from the use of contingent
commissions, and the potential for fines or other legal action
that could result from investigative findings.  Some brokers have
curtailed the use of contingent commissions while others have
retained it.  As of January 1, 2005, Alliant has chosen to curtail
its use of contingent commissions.  Moody's will continue to
monitor the regulatory/legal investigations regarding the
insurance brokerage industry.

Moody's expects that Alliant will reduce its financial leverage
profile over time while maintaining its sound profitability and
disciplined approach to acquisitions.  Factors that could lead to
a ratings upgrade include:

   * debt-to-EBITDA of 4x or less;
   * maintenance of free cash flow to debt above 10%; and
   * EBIT margins above 20%.

Conversely, increased financial leverage with debt-to-EBITDA of 6x
or more, EBIT margins falling below 10%, or free cash flow to debt
falling below 5% and could lead to a ratings downgrade.

Alliant Resources Group is a US insurance broker which
distributes:

   * property and casualty insurance,
   * employee health and welfare, and
   * asset management products to small and mid-sized businesses.

In 2004, the company reported $194.3 million in revenues and $19.7
million in net income.  As of December 31, 2004, shareholders'
equity was $11.4 million.


ATKINS NUTRITIONALS: Panel Can Hire Navigant as Financial Advisor
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors of Atkins
Nutritionals, Inc., and its debtor-affiliates, sought and obtained
permission from the U.S. Bankruptcy Court for the Southern
District of New York to employ Navigant Consulting, Inc., as its
financial advisor.

Navigant Consulting will:

   a) assist and advise the Committee in the analysis of the
      Debtors' current financial position;

   b) assist and advise the Committee in its analysis of the
      Debtors' business plans, cash flow projections,
      restructuring programs, selling, general and administrative
      structure and other reports or analyses prepared by the
      Debtors or their professionals, in order to assist the
      Committee in its assessment of the business viability of
      the Debtors, the reasonableness of projections and
      underlying assumptions, and the impact of market conditions
      on forecasted results of the Debtors;

   c) assist and advise the Committee in its analysis of proposed
      transactions for which the Debtors seek Court approval
      including, but not limited to, evaluation of competing bids
      in connection with the divestiture of corporate assets, DIP
      financing or use of cash collateral, assumption or
      rejection of leases and other executory contracts,
      management compensation or retention and severance plans;

   d) assist and advise the Committee in its analysis of the
      Debtors' internally prepared financial statements and
      related documentation, in order to evaluate performance of
      the Debtors as compared to its projected results;

   e) attend and advise at meetings or calls with the Committee
      and its counsel and representatives of the Debtors and
      other parties;

   f) assist and advise the Committee and its counsel in the
      development, evaluation and documentation of any plans of
      reorganization or strategic transactions, including
      developing, structuring and negotiating the terms and
      conditions of potential plans or strategic transaction
      including the value of consideration that is to be
      provided;

   g) assist and render expert testimony on behalf of the
      Committee;

   h) assist and advise the Committee in its analysis of the
      October 13, 2003, Recapitalization in order to identify
      potential causes of action, if any;

   i) assist and advise the Committee with the review of payments
      made during the period May 3, 2005 through July 31, 2005 in
      order to identify potential preferential transfers, if any;

   j) assist and advise the Committee with the review of payments
      made to insiders during the period August 1, 2004 through
      July 31, 2005 in order to identify amounts, if any, that
      may be recoverable; and

   k) assist and advise the Committee in such other services,
      including but not limited to, other bankruptcy,
      reorganization and related litigation support efforts, tax
      services, valuation assistance, corporate finance,
      compensation and benefits consulting, or other specialized
      services as may be requested by the Committee and agreed to
      by the firm.

The firm's professionals current hourly rates are:

            Designation                Hourly Rate
            -----------                -----------
            Managing Director          $600 - $650
            Director                   $500 - $550
            Associate Director         $400 - $450
            Managing Consultant        $300 - $350
            Senior Consultant          $200 - $275
            Consultant                 $150 - $175
            Paraprofessional           $100 - $125

Navigant Consulting assured the Court that it does not represent
any interest materially adverse to the Committee, the Debtors or
their estates.

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


ATKINS NUTRITIONALS: Winston & Strawn Approved as Panel's Counsel
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
permitted the Official Committee of Unsecured Creditors of Atkins
Nutritionals, Inc., and its debtor-affiliates to employ Winston &
Strawn LLP as its counsel, nunc pro tunc to August 23, 2005.

Winston & Strawn will:

   a) provide legal advice to the Committee with respect to its
      duties and powers in these cases;

   b) consult with the Committee and the Debtors concerning the
      administration of these cases;

   c) assist the Committee in its investigation of the Debtors'
      acts, conduct, assets, liabilities, and financial
      condition, operation of the Debtors' businesses, and the
      desirability of continuing or selling such businesses or
      assets, and any other matter relevant to these cases;

   d) assist the Committee in evaluating claims against the
      estates, including analysis of and possible objections to
      the validity, priority, amount, subordination, or avoidance
      of claims or transfers of property in consideration of such
      claims;

   e) assist the Committee in participating in the formulation of
      a chapter 11 plan, including the Committee's communications
      with unsecured creditors concerning any such plan;

   f) assist the Committee with any effort to request the
      appointment of a trustee or examiner;

   g) advise and represent the Committee in connection with
      matters generally arising in the cases, including the
      obtaining of credit, the sale of assets, and the rejection
      or assumption of executory contracts and unexpired leases;

   h) appear before this Court, any other federal court, state
      court or appellate courts; and

   i) perform such other legal services as may be required or
      which are in the interests of unsecured creditors.

The Firm will bill the Debtors based on its professionals' current
hourly rates:

            Designation                Hourly Rate
            -----------                -----------
            Partners                   $360 - $765
            Associates                 $225 - $470
            Legal Assistants           $105 - $230

David Neier, Esq., a Winston & Strawn partner, assured the Court
that the Firm does not represent any interest materially adverse
to the Committee, the Debtors or their estates.

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


BEAZER HOMES: Earns $164.4 Million of Net Income in Third Quarter
-----------------------------------------------------------------
Beazer Homes USA, Inc. (NYSE: BZH), reported its financial results
for the quarter ended September 30, 2005.  Highlights of both the
quarter and fiscal year ended September 30, 2005, compared to the
same periods of the prior year, are:

Quarter Ended September 30, 2005

   * Net income of $164.4 million;

   * Home closings: 6,339 (up 24.3%);

   * Total revenues: $1.8 billion (up 49.8%);

   * Gross margin from home construction: 23.9% (up 350 basis
     points);

   * Operating income margin: 14.1% (up 350 basis points);

   * New orders: 4,937 homes (up 15.5%), sales value $1.4 billion
     (up 25.1%);

Year Ended September 30, 2005

   * Reported net income of $262.5 million including the non-cash
     goodwill impairment charge of $130.2 million incurred in Q2
     2005.

   * Adjusted net income of $392.8 million excluding the Q2 2005
     non-cash goodwill impairment charge (up 66.6%);

   * Home closings: 18,146 (up 10.3%);

   * Total revenues: $5 billion (up 27.9%)

   * Gross margin from home construction: 22.6% (up 290 basis
     points);

   * Operating income margin: 9.7%;

   * Adjusted operating income margin, excluding the Q2 2005 non-
     cash goodwill impairment charge: 12.4% (up 270 basis points);

   * New orders: 18,923 (up 8.2%);

   * Backlog at 9/30/05: 9,233 homes (up 9.2%), sales value

     $2.72 billion (up 21.7%);

"We are pleased to report that Beazer Homes finished the year with
extremely strong results, once again surpassing numerous
milestones," said President and Chief Executive Officer, Ian J.
McCarthy.  "We generated annual revenues of $5 billion on home
closings of 18,146, up 28% and 10% from fiscal 2004, respectively,
and both representing all-time company records.  For the September
quarter, net earnings more than doubled to $164.4 million and
revenues increased nearly 50% to $1.8 billion.  We believe these
results, coupled with strong new order growth of 16%, reflect
successful execution of our profitable growth initiatives.
Furthermore, Beazer Homes believes its ongoing commitment to
achieving increasingly profitable growth by leveraging its size,
scale and geographic reach through its national brand will
position the company well to take full advantage of the favorable
long-term environment for the industry."

"Beazer Homes' backlog now stands at a fourth quarter record level
of 9,233 homes with a sales value of $2.72 billion, up 9% and 22%,
respectively, from the backlog homes and sales value a year ago.
We believe this sizeable year-end backlog provides the basis for
continued strong financial performance in fiscal 2006" added Mr.
McCarthy.

Closings of 6,339 homes represents a quarterly record and resulted
from year-over-year increases in all regions except the Midwest,
where increased closings in Ohio and Kentucky were offset by a
decline in Indiana.

The growth in new home orders for the quarter resulted from
increases in all regions except the West.  In the West, community
opening delays in Nevada and California resulted in fewer
available sales opportunities during the period than previously
expected.

        Strong Financial Performance in September Quarter

"We achieved record earnings and greatly improved margins this
quarter as our on-going focus on profitable growth and heightened
attention to backlog conversion yielded significant returns," said
James O'Leary, Executive Vice President and Chief Financial
Officer.  "Substantially increased margins for the quarter
resulted from our continued execution of specific strategic
initiatives focused on maximizing profitability and organic
growth."

During the fourth quarter of fiscal 2005, the company realized
increases over the prior year in its home construction gross
margin, total gross margin and operating income margin of
350 basis points, 340 basis points, and 350 basis points,
respectively, as the company continued to realize benefits from
the execution of its profitable growth strategy.  Margins were
also favorably impacted by continued strong pricing in most major
markets.  In the prior year fourth fiscal quarter, the company
incurred warranty costs associated with Trinity Homes, LLC and
increased marketing costs associated with the company's branding
initiative, totaling in the aggregate $18.5 million, and having an
impact of approximately 150 basis points on operating margin.
Also, during the fourth quarter of fiscal 2005, the company
benefited from a favorable tax adjustment which reduced tax
expense by approximately $4.0 million or $0.09 per diluted share.

                     Fiscal 2006 EPS Outlook

"Our strong level of backlog, coupled with our current
expectations for further competitive advantages for large public
builders such as Beazer Homes provide us confidence in our future
growth opportunities," said Mr. McCarthy.  "In addition, we expect
continued execution of our profitable growth strategy to
capitalize on our broad geographic profile through focused product
expansion, leveraging our national brand and achieving optimal
efficiencies, will result in continued growth and meaningfully
enhanced shareholder value.  As such, our initial outlook for
fiscal 2006 diluted earnings per share is $10.50 per share,
representing growth of 20% over adjusted earnings per share of
$8.72 in fiscal 2005.  In addition, we are presently evaluating
our capital allocation strategies, including our existing Share
repurchase authorization of approximately 2.0 million shares,
within the current environment in order to optimize the
utilization of our capital resources.  Any impact this evaluation
would have on our outlook will be addressed prospectively."

Headquartered in Atlanta, Beazer Homes USA, Inc. --  
http://www.beazer.com/-- is one of the country's ten largest      
single-family homebuilders with operations in Arizona, California,  
Colorado, Delaware, Florida, Georgia, Indiana, Kentucky, Maryland,  
Mississippi, Nevada, New Jersey, New Mexico, New York, North  
Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas,  
Virginia and West Virginia and also provides mortgage origination  
and title services to its homebuyers. Beazer Homes, a Fortune 500  
company, is listed on the New York Stock Exchange under the ticker  
symbol "BZH."  

                         *     *     *

As reported in the Troubled Company Reporter on June 7, 2005,  
Fitch Ratings assigned a 'BB+' rating to Beazer Homes USA,  
Inc. (NYSE: BZH) $300 million, 6.875% senior unsecured notes due  
July 15, 2015.  The Rating Outlook is Stable.


BECKMAN COULTER: Reports Third Quarter Financial Results
--------------------------------------------------------
Beckman Coulter, Inc. (NYSE:BEC) reported its third quarter ended
September 30, 2005, results, including record placements of key
products, with comparable diluted earnings per share well above
the $0.48 to $0.61 outlook the company provided on August 9, 2005.

                  Third Quarter 2005 Discussion

Beckman Coulter's worldwide sales increased 2.1% over prior year.  
On July 22, 2005, the company announced a change in its customer
leasing policy to favor operating-type leases over sales-type
leases for Beckman Coulter instrument placements.  According to
the Company, this shift moves the recognition of instrument
revenues and earnings from a single transaction to monthly
installments made over the life of the lease agreement, which is
typically five years.  When normalizing 2004 and 2005 quarterly
sales for lease-type mix, third quarter sales would have increased
about 5%.  As part of a reorganization also announced July 22, the
company is now reporting revenues in four product areas:
Chemistry, Cellular, Immunoassay and Discovery & Automation
Systems.  

On a geographic basis, sales in the United States were even with
the prior year, impacted by the leasing policy change.  On a
constant currency basis, International sales increased 3.8% with
growth in France and markets served by third-party distributors
more than offsetting continued softness in Germany and Japan.  
Currency in the quarter added $1.7 million to reported sales
results.

Gross profit margin was 46.5% of sales, down 160 basis points from
prior year, due to continued investment in field service
infrastructure and new product support, both consequences of
record placements of key products, and increased freight costs.

In the third quarter, the company incurred $19.2 million of
special charges: $4.9 million related to Hurricane Katrina,
principally for impaired receivables and leased equipment;
$13.4 million for the non-cash write-off of intangible assets of a
discontinued robotic automation product and the discontinuance of
the Bovine Spongiform Encephalopathy (Mad Cow Disease) testing
initiative; and $0.9 million for the first portion of the
restructuring charge for personnel related costs.

According to Scott Garrett, president and chief executive officer,
"In July, we announced a reorganization to better align the
company for future growth, which included combining the two
operating divisions into a "one-company" structure, focusing on a
smaller number of our strongest opportunities and taking a
restructuring charge of up to $60 million.  With regard to the
reorganization and restructuring program, our intent is to close
at least three facilities, sell two parcels of real estate,
harvest or discontinue a number of small or mature product lines
or projects, reduce 350 positions, significantly streamline our
physical distribution and leverage additional scale in our
commercial operations.

"Thus far, staffing initiatives costing at least $30 million have
been identified.  If fully implemented, these initial stage
restructuring initiatives are expected to provide $15 million of
annual savings in 2006, growing to $20 million of annual savings
in 2007 and beyond.  A benefit of up to $2 million may be realized
in the fourth quarter of 2005.  More details about these and other
later stage restructuring initiatives, timing, related costs and
benefits will be announced with the fourth quarter 2005 earnings
release," said Mr. Garrett.

Before the special charges, operating income was $70.1 million, or
11.8% of sales.  After the special charges, operating income was
$50.9 million, or 8.6% of sales.  Non-operating expense was
$7.3 million, a decrease of $5.6 million from prior year quarter,
primarily due to lower currency-related expenses.  The effective
tax rate for the quarter was 17% as a result of a shift in
geographic mix of income due to the leasing policy change,
additional tax benefits related to the repatriation of foreign
earnings in 2004, and the final resolution of the company's
1998-2002 tax audit.  Reported diluted earnings per share were
$0.56.  Without the special charge, the effective tax rate would
have been 23.4%, resulting in comparable diluted earnings per
share of $0.74.

Continued Mr. Garrett, "Sales results were well above our outlook
due to a number of factors.  Clinical lab automation had an
excellent quarter and, due to the large number of U.S. diagnostic
system orders already in queue under sale-type leases, there was
about $15 million more in hardware revenue than forecasted.    
Without the lease mix benefit, we hit the mid-point of our revenue
outlook.   While some of the U.S. diagnostic instruments placed in
the third quarter were under sales-type leases, almost all new
lease prospects in the pipeline are forecast to be operating-type
leases.  Our overall business is on track, with comparable sales
up 5% and unit placements of our chemistry, clinical lab
automation, flow cytometry and centrifugation systems particularly
robust.  Consumables sales were up 5.6% for the quarter and nearly
10% year-to-date.  Consumables were affected in the quarter by
weakness in dedicated proteins, stockouts and order interruption
from customers affected by hurricanes.

"Comparable diluted earnings per share of $0.74 finished well
ahead of our outlook range of $0.48 to $0.61.  Key factors were
the additional hardware revenue under sales-type leases more than
offsetting the lower than expected consumables revenue, lower than
expected operating and non-operating expense, and a slightly lower
share count.

"After investing $67 million in capital expenditures, free cash
flow in the quarter was $64 million, boosted by monetization of
$30 million of sales-type lease receivables.  The company doubled
the investment in capital expenditures for operating-type leases
to more than $40 million.  Year to date, free cash flow is
$122 million."

                    Preliminary 2006 Outlook

Commented Mr. Garrett, "Our original range for the impact of the
leasing policy change on sales through 2006 was $200 to
$220 million. We now expect the change to reduce revenues by
$190 to $200 million over the implementation period, which will be
split about evenly between 2005 and 2006.  Total 2006 sales should
range from $2,525 to $2,600 million, which includes the
acquisitions and assumes about $25 million negative impact from
currency.  Continued success of the UniCel(R) DxC autochemistry
systems, along with the launches of the new UniCel(R) DxC 600i
workcell and the AutoMate 800 sample preparation workstation,
reinforces our position as the industry leader in new product
launches.

"Beckman Coulter's robust new product flow is expanding our
substantial installed base, which necessitates continued
investment in field support, distribution and customer training.
The effect of this infrastructure investment is included in our
2006 outlook."

Mr. Garrett said, "Operating income margin should improve over
2005 to about 12.5%, primarily due to operational efficiencies
arising from the company's reorganization.  Non-operating expenses
should be $52 to $57 million due to higher interest expense.  Our
pre-restructure tax rate should rise to 26.5% given our
expectations for the geographic mix of income and the lack of
one-time benefits.  Comparable diluted earnings per share, based
on a share count of 65.5 million, should be in the range of $2.90
to $3.10."

Beckman Coulter, Inc., headquartered in Fullerton, California, is
a leading provider of instrument systems and complementary
products that simplify and automate processes in biomedical
research and clinical laboratories.

                         *     *     *

As reported in the Troubled Company Reporter on May 27, 2005,
Moody's Investors Service placed the ratings of Beckman Coulter,
Inc., under review for possible upgrade reflecting double digit
revenue growth and an expansion in free cash flow generated by the
core business.  In particular, the company continues to gain share
in the immunodiagnostic market and will launch several new
products including two new analyzers for its routine chemistry
business.  Moody's anticipates that continued growth in its core
business will lead to higher free cash flow over the next few
years.

These ratings were placed under review for a possible upgrade:

   -- $500 Million Universal Shelf Registration (Senior and
      Subordinate) at (P) Baa3/ (P) Ba1

   -- $240 Million 7.45% Senior Notes due 2008 at Baa3

   -- $235 Million 6.875% Senior Notes due 2011 at Baa3

   -- $100 Million 7.05% Senior Debentures due 2026 at Baa3


BORGER ENERGY: Moody's Downgrades Mortgage Bonds' Rating to Ba3
---------------------------------------------------------------
Moody's Investors Service downgraded Borger Energy Associates,
L.P.'s 7.26% first mortgage bonds due 2022 to Ba3 from Ba1,
concluding the review for downgrade that was initiated on
July 22, 2005.  The rating outlook is stable.

The downgrade is prompted by deterioration in operating and
financial performance and the expectation that the project's debt
service coverage measures will be weak through 2006.  The lower
coverages reflect:

   * a significant and prolonged reduction in steam revenues;

   * the further extension of the projected time period during
     which Borger's capacity revenues will be reduced as a result
     of recent and current unplanned outages; and

   * to a lesser extent, the project's intention to incur
     additional debt in conjunction with the purchase and
     installation of a new generator.

The above factors lead to our expectation that the debt service
coverage ratios for full year 2005 and 2006 will be about 1.0
times and that the major maintenance reserve is likely to be
under-funded at the end 2005.  While financial coverage ratios are
expected to improve significantly in 2007 due to a resumption of
higher steam revenues, there is some uncertainty about the pace of
recovery because the volume of steam sales is uncertain and there
is an ongoing large capital project to replace a generator.

The reduction in projected steam revenues and the resulting
decrease in fuel margin is primarily due to ConocoPhillips'
intention to reduce its steam purchases in the second half of 2005
and in 2006 below levels that were indicated at the end of 2004.
Steam sales make up a significant component of the project's
revenue and operating margin and can fluctuate dramatically based
on volumes.  All else being equal, a reduction in steam volumes to
the currently projected range for a full year would result in
project revenues and margins being reduced about $3 million to $6
million from the levels projected at the end of 2004.  The project
is able to offset this loss to some extent via a steam delivery
reduction (SDR) provision in its Power Purchase Agreement with
Southwestern Public Service Company.  The SDR provision allows
Borger to be paid for energy at its actual heat rate rather than
its guaranteed heat rate, in exchange for the pass through of
steam revenues.  This provision essentially creates a fuel pass
through for the project.  Implementation of the SDR provision
began in August.

The project's capacity revenues are also projected to remain
depressed into 2006.  A major overhaul of Unit # 2 completed in
early 2005 took several days longer than anticipated; an unplanned
19 day outage on the unit further delayed the project's
anticipated return to full availability.  At the end of September,
the generator on Unit #2 failed.  A generator was already on order
and arrived at the end of October.  It is currently being
installed; however the unit is not expected to be back on line
until sometime later in November.  The project is now estimating
that it will not be entitled to its full capacity payment until
October of 2006.

Borger's decision to order the generator that just arrived was
based on the extended outage experienced in 2004 when it was
determined the generator on Unit # 1 needed to be rewound and that
the procedure would likely need to be repeated every few years.
Management felt it was very likely that the generator on Unit # 2
would need similar repairs.  The Unit # 2 generator is now being
replaced, and a portion of its cost will be covered by insurance.

Financing for the Unit #2 generator and its installation was
obtained through a $3 million loan facility that is secured by the
generator.  The generator loan is scheduled to be repaid primarily
in 2006, 2007 and 2008, with a maturity in 2009.  The new
financing was expected to add approximately $500,000 to $1.2
million to annual debt service costs.  The aforementioned debt
service costs will likely be reduced to the extent that Borger is
able to utilize insurance proceeds rather than term loan proceeds
to finance the generator and its installation.

Preliminary projections for 2005 show debt service coverage to be
approximately 1.0 times with the potential for significant
shortfalls in the funding of the major maintenance reserve;
however, no utilization of the project's six-month ($5.5 million)
debt service reserve is expected.  In 2006, debt service coverage
is also projected to again be close to 1.0x; however, the project
currently anticipates it will be able to fully fund its major
maintenance reserve and that it will not need to access the debt
service reserve.  Although steam sales are expected to increase in
2007, there is a significant amount of uncertainty as to the
ultimate volume.  In addition any potential need to refill
remaining under-funded major maintenance reserves would lengthen
the time before the project's debt service coverage ratios would
be expected to improve to levels significantly above 1.0 times.

The stable outlook reflects Moody's view that the Ba3 rating is
not likely to be revised in the near term, and assumes that the
project will be able to maintain a coverage around 1.0x in 2005
and 2006 and will not need to utilize the debt service reserve.
The rating could be revised downward should the current operating
outage extend significantly longer or cost more than anticipated
or if there was a need to utilize the debt service reserve.  The
outlook could be revised to positive if the project returns to
full operation as expected such that it should be able to produce
debt service coverage ratios above 1.20 times on a sustainable
basis.  Additional positive rating action would be dependent on
additional clarity on the amount of steam sales expected in 2007
and beyond.

Borger Energy Associates, L.P. is a 230 MW gas-fired cogeneration
facility located near Borger Texas.  Power generated by the
project is sold to Southwestern Public Service Company (Baa1;
senior unsecured), and steam is sold to ConocoPhillips (A3; senior
unsecured).


BREUNERS HOME: Court Okays Avoidance Action Procedures
------------------------------------------------------
Montague S. Claybrook, the Chapter 7 Trustee overseeing the
liquidation of Breuners Home Furnishings Corp. and its debtor-
affiliates, obtained approval from the U.S. Bankruptcy Court for
the District of Delaware on the global procedures governing the
commencement, prosecution, and settlement or recovery of
prepetition payments and transfers made by the Debtors.  

As reported in the Troubled Company Reporter on Oct. 5, Mr.
Claybrook identified approximately 875 entities that received
approximately $57 million in aggregate payments and transfers,
which may be avoidable under Sections 547 and 550 of the
Bankruptcy Code.

Sheldon K. Rennie, Esq., at Fox Rothschild LLP, told the
Bankruptcy Court that the uniform procedures allows for a quick
settlement of avoidance actions and minimizes probable litigation
expenses.  The procedures attempt to:

    a) promote and facilitate settlement of the avoidance actions
       without unnecessary litigation expense or undue delay; and

    b) streamline the litigation of any avoidance action that the
       parties are unable to expeditiously settle.

Key features of the avoidance action procedures are:

   a) The Trustee can settle individual avoidance actions,
      including settlement before the commencement of adversary
      proceedings, without further notice and approval from the
      Bankruptcy Court if:

         (i) the face amount of the funds recoverable in the
             avoidance action is less than $25,000; or

        (ii) the face amount of the funds recoverable in the
             avoidance action exceeds $25,000, but the settlement
             amount is not less than 70% of the face amount of the
             avoidance action.

   b) The Trustee can accept immediate payment from settled
      actions and retain that payment in his trust account pending
      the Bankruptcy Court's approval of the settlement.

   c) The initial disclosure requirements under Rule 26 (a)(1-4)
      and Rule 26(d) and (e) of the Federal Rules of Civil
      Procedure are waived, unless the parties to a specific
      adversary proceeding otherwise stipulate in writing.

A full-text copy of the avoidance action procedures is available
for free at http://researcharchives.com/t/s?21d  

Headquartered in Lancaster, Pennsylvania, Breuners Home
Furnishings Corp. -- http://www.bhfc.com/-- is one of the   
largest national furniture retailers focused on the middle the
upper-end  segment of the market.  The Company and its debtor-
affiliates, filed for chapter 11 protection on July 14, 2004
(Bankr. Del. Case No. 04-12030).  Great American Group, Gordon
Brothers, Hilco Merchant Resources, and Zimmer-Hester were brought
on board within the first 30 days of the bankruptcy filing to
conduct Going-Out-of-Business sales at the furniture retailer's 47
stores.  The Court converted the case to a Chapter 7 proceeding on
Feb. 8, 2005.  Montague S. Claybrook serves as the Chapter 7
Trustee.  Mr. Claybrook is represented by Michael G. Menkowitz,
Esq., at Fox Rothschild LLP.  Bruce Grohsgal, Esq., and Laura
Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones &
Weintraub, P.C., represent the Debtors.  When the Debtors filed
for chapter 11 protection, they reported more than $100 million in
estimated assets and debts.


CAROLINA TOBACCO: Plan Confirmation Hearing Continued to Nov. 10
----------------------------------------------------------------          
The U.S. Bankruptcy Court for the District of Oregon continued the
hearing to consider confirmation of the Third Amended Plan of
Reorganization filed by Carolina Tobacco Company to Nov. 10, 2005,
at 9:00 a.m.

The Debtor filed the Third Amended Plan on Oct. 18, 2005.  The
Court conditionally approved the Debtor's Second Amended
Disclosure Statement on Aug. 25, 2005, subject to the Court's
consideration of objections against the Amended Disclosure
Statement.

                     Summary of Amended Plan

On the Effective Date, the Reorganized Debtor will be vested with
all of the property of its estate free and clear of all claims,
liens, encumbrances, charges and other interests of creditors, and
may operate its business free of any restrictions imposed by the
Bankruptcy Code or by the Bankruptcy Court.

The affairs of the Reorganized Debtor after the Effective Date
will be governed by the Reorganized Debtor and managed by its
current officers, directors and employees.  A Financial Consultant
will be retained to assist the Debtor's financial reporting.  The
Financial Consultant, together with the Reorganized Debtor, will
provide financial statements and budget reporting as he or she
deems appropriate, on a quarterly basis to all creditors who filed
with the Court a request that all notices under the Plan after the
Effective Date be given to them.

                Treatment of Claims and Interests

The Plan groups claims and interests into seven classes.

Priority Claims are unimpaired.  Allowed Priority Claims will be
paid in full with a cash payment equal to the amount of the
Allowed Claim shortly after the Effective Date or after a Priority
Claim becomes an Allowed Claim.

The Impaired Claims are:

   1) the HOP Group Claim, which will retain its lien on the
      Escrow Account with the same validity, extent and priority
      as existed on the Petition Date.  On the Plan's
      confirmation, the Debtor will execute the HOP Settlement
      Agreement since confirmation will be deemed as approval of
      the Settlement Agreement on the Debtor's behalf.  The Debtor
      will contribute $31,009,757 from its Qualified Escrow
      Account to the Settlement in full satisfaction of the
      HOP Group's Allowed Claim, as soon as all conditions to
      the Settlement have been satisfied.  If the HOP Settlement
      Agreement is not consummated, the HOP Group and the Debtor
      will reserve all claims, offsets and rights against each
      other as existed on the Petition Date;

   2) General Unsecured Claims totaling approximately $64,804
      will be paid in full with:

      a) 50% of the Allowed Claim to be paid on or before the
         later of Sept. 30, 2006, or 30 days after the date upon
         which the Priority Claim becomes an Allowed Claim, and

      b) the remainder of the Allowed Claim to be paid on or
         before the later of Dec. 31, 2006, or 30 days after the
         date upon which the Claim becomes an Allowed Claim;

   3) Allowed Unsecured Claim of CPI-NV totaling approximately
      EUR300,000 will be paid in full, with payments of
      EUR66,000 to be paid on or before Sep. 30, 2006, and
      payments of EUR33,000 every year from Sept. 30, 2006, until
      Sept. 30, 2013;

   4) Conditional Allowed Unsecured Claims of the States of the
      U.S. for Pre-Petition Escrow Deposits, which are estimated
      to be between $4.5 million to $6.8 million.  The States
      will be paid proceeds of the 2004 Pre-Petition Escrow
      Deposits, to be paid 12% in September 2006, 36% in December
      2006, 22% in September 2007; and the remaining 30% in
      December 2007.  The States will receive aggregate deposits
      of the 2005 Pre-Petition Escrow Deposits estimated to be
      $3,582,666 on or before April 15, 2006;

   5) Allowed Penalty Claims will be paid in full so long as the
      total of those Allowed Claims do not exceed $500,000.  If
      the total of those Allowed Claims exceed $500,000, the
      Debtor will pay those Claims in quarterly installments of
      $250,000, plus interest; and

   6) Interest Holders will retain their legal, equitable and
      contractual rights under the Plan, but those Holders will
      receive no payments until all Claims provided for in the
      Plan are paid in full.

A full-text copy of the Third Amended Plan is available for a fee
at http://ResearchArchives.com/t/s?2be

Headquartered in Portland, Oregon, Carolina Tobacco Company
-- http://www.carolinatobacco.com/-- manufactures Roger-brand  
cigarettes.  The Company filed for chapter 11 protection on
April 18, 2005 (Bankr. D. Ore. Case No. 05-34156).  Tara J.
Schleicher, Esq., at Farleigh Wada & Witt P.C., represents the
Debtor in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed $24,408,298 in assets and
$14,929,169 in debts.


CENVEO INC: September 30 Balance Sheet Upside-Down by $12 Million
-----------------------------------------------------------------
Cenveo, Inc., (NYSE: CVO) reported results for the third quarter
and nine months ended Sept. 30, 2005.

For the third quarter, the Company incurred a net loss of
$64.1 million compared to net income of $2.5 million in the third
quarter of 2004.  The third-quarter 2005 results included $25.1
million consisting of:

    * $15.2 million in restructuring and other charges;

    * $2.1 million in asset impairments;

    * $800,000 in loss on sale of non-strategic businesses; and

    * $7.0 million in proxy contest related expenses.

In addition, the Company recorded a non-cash valuation allowance
of $35.3 million to eliminate the remaining net U.S. deferred tax
asset due to the decision not to implement identified tax
strategies that could have been used to realize the net tax
benefit.  Net sales for the quarter were slightly higher at $430.8
million compared with to $428.1 million in 2004.

EBITDA excluding restructuring and other charges, asset
impairments, loss on sale of non-strategic businesses, and proxy
contest related expenses for the third quarter of 2005 was $31.5
million compared to EBITDA of $33.5 million in the same period
last year.  Net cash used in operating activities in the quarter
ended Sept. 30, 2005 was $17.7 million compared to $18.7 million
provided during the same period last year.

For the nine months ended September 30, 2005, the Company reported
a net loss of $97.2 million, or $1.99 per share. This compares to
a net loss of $16.1 million, or $0.34 per share for the same
period in 2004. The results for the nine months ended September
30, 2005 include restructuring and other charges ($22.1 million),
asset impairments of ($9.8 million), loss on sale of non-strategic
businesses ($2.0 million), and proxy contest related expenses
($7.6 million) totaling $41.5 million. In addition, the Company
recorded an additional valuation allowance of $35.3 million
against its net U.S. deferred tax asset. EBITDA, excluding
restructuring and other charges, asset impairments, loss on sale
of non-strategic businesses, and proxy contest related expenses
for the nine months ended September 30, 2005 was $89.7 million
versus EBITDA of $92.8 million for the prior year. Net sales for
the first nine months of 2005 were $1.30 billion compared to $1.26
billion in 2004. Net cash used in operating activities in the nine
months ended September 30, 2005 was $27.3 million compared to
$14.0 million provided during the same period last year.

Robert G. Burton, Chairman and Chief Executive Officer commented,
"Looking back at Cenveo's results for the first nine months of the
year, it is clear that the financial results of the Company are
completely unacceptable.  Turning our performance around, and
doing so quickly and effectively, is my number one mandate.  Even
before I was appointed the senior manager of the Company, I felt
that there was an opportunity to reduce the Company's overall cost
structure by $75 million in a two year period.  Over the past two
months, we have analyzed the Company's business and reviewed each
cost center to identify excess costs and areas for improvement.
I now feel comfortable that after initiating a number of
significant actions in support of my commitment, we are well on
our way to achieving at least $75 million of cost reductions by
the end of 2006.  This accelerated timeline is in large part due
to the tremendous job the entire team has done. Specific items
identified, already implemented or scheduled for implementation in
the future include the following:

    * Centralization of general and administrative functions

    * Consolidation of the Company's vendor base and
      implementation of Company-wide purchasing initiatives

    * Streamlining I.T. processes and infrastructure

    * Corporate and field Human Resources staff rationalization

    * Plant consolidation and rationalization

    * Elimination of all discretionary spending

In addition, I believe that significant incremental cost savings
can be achieved.  I have challenged the entire organization to
identify an additional $25 million of savings by the end of 2006
to bring our cost structure in line with our competitors."

Mr. Burton continued, "We have also decided to evaluate the sale
of our Canadian operations.  Our longstanding success in Canada
combined with current market conditions, presents a unique
opportunity that may help us to realize the substantial value of
our Canadian assets.  Although, there can be no assurance that we
will be able to complete such a sale on acceptable terms, we
believe that a successful transaction would enable us to de-
leverage the balance sheet and provide an opportunity to redeploy
capital that will generate additional growth opportunities
domestically."

Mr. Burton concluded, "As we head into the fourth quarter and the
upcoming year, I am optimistic about the direction of the Company.
We have already identified over $75 million in cost savings to be
implemented throughout 2006, and it will be my personal objective
to achieve an additional $25 million more.  While getting there
will not be easy, the new management team is on its way to
building an organization that can consistently deliver results.
Our twenty-five newly hired managers have worked with us in the
past and fully understand that current results are unsatisfactory.
They are focused, working hard and committed to delivering results
that our customers, employees and shareholders expect."

Cenveo, Inc. -- http://www.cenveo.com/-- is one of North  
America's leading providers of print and visual communications
with one-stop services from design through fulfillment.  The
company's broad portfolio of services and products include,
commercial printing, envelopes, labels and business documents
through a network of over 80 production, fulfillment and
distribution facilities throughout North America.

At Sept. 30, 2005, Cenveo, Inc.'s balance sheet showed a
$12,145,000 stockholders' deficit compared to a $57,354,000
positive equity at Dec. 31, 2004.


CITIZENS COMMS: Earns $38.4 Million of Net Income in Third Quarter
------------------------------------------------------------------  
Citizens Communications (NYSE:CZN) reported third quarter 2005
revenues of $537.3 million; operating income of $141.6 million;
and net income of $38.4 million.

Third quarter 2005 revenue from the company's ILEC operations was
$497.6 million, as compared to $500 million in the third quarter
of 2004.  The decrease is due primarily to fewer access lines,
lower access service revenues (which includes subsidy payments we
receive from federal and state agencies) and reduced long distance
revenue.  Subsidy revenue declined primarily due to a missed
filing deadline with the Universal Service Fund (USF).

The Company received a Waiver from the FCC for the late filing and
expects to recognize approximately $10 million of additional USF
subsidy revenue in the fourth quarter.  Growth in data and
enhanced service revenues partially offset the decreases.  Data
service revenues increased 28 percent compared to the third
quarter of 2004.

The company added 23,000 high-speed internet customers during
the quarter and had 290,200 high-speed data subscribers at
September 30, 2005.  The number of the company's high-speed
internet subscribers has increased by more than 102,000 or
55 percent from a year ago.

ILEC operating income for the third quarter of 2005 was
$137 million and operating income margin was 27.5 percent,
compared to $69.3 million and 13.9 percent in the third quarter of
2004.  This increase is principally due to the management
succession and strategic alternative charges in 2004.  Capital
expenditures for the ILEC were $57.9 million for the third quarter
of 2005.

Free cash flow was $130.2 million during the third quarter and has
increased 13 percent from $371.6 million to $421.3 million during
the first nine months of 2005.  The company's dividend represents
a payout of 60.6 percent of free cash flow for the first nine
months of 2005.

During the third quarter, the company repurchased $153.4 million,
or 11,256,500 shares of stock.  The company has now repurchased a
total of $172.0 million, or 12,656,500 shares of stock under its
$250.0 million authorized share repurchase program.

The company's next regular quarterly cash dividend of $0.25 per
share will be paid on December 30, 2005, to shareholders of record
on December 9, 2005.

A full-text copy of the Company's quarterly report in Form 10-Q
filed with the Securities and Exchange Commission is available for
free at http://ResearchArchives.com/t/s?2bd

Citizens is a telecommunications company headquartered in
Stamford, Connecticut.

                         *     *     *

As reported in the Troubled Company Reporter on Sept. 29, 2005,
Fitch Ratings affirmed the 'BB' rating on Citizens Communications
Company's senior unsecured debt securities and the 'BB-' rating on
Citizens Utilities Trust's 5% company-obligated mandatorily
redeemable convertible preferred securities due 2036.  Fitch said
Citizens' Rating Outlook is Stable.

As reported in the Troubled Company Reporter on Sept. 2, 2005,
Standard & Poor's Ratings Services affirmed its ratings on
Stamford, Connecticut-based Citizens Communications Co., including
the 'BB+' corporate credit rating.  S&P said the outlook is
negative.


CMS ENERGY: Posts $265 Million Net Loss in Third Quarter
--------------------------------------------------------
CMS Energy (NYSE: CMS) reported a $265 million net loss for the
third quarter of 2005, compared to $56 million of net income for
the same quarter of 2004.

The third-quarter loss resulted from a non-cash, after-tax
impairment charge of $385 million related to CMS Energy's
ownership interest in the Midland Cogeneration Venture (MCV)
because of sustained high natural gas prices.

CMS Energy's adjusted third quarter net income, which excludes the
MCV impairment charge and other items, is $119 million up from
$18 million for the same period of 2004.  Adjusted third quarter
2005 net income, without mark-to-market impacts, would be
$43 million compared to $27 million for the same period of 2004.

For the first nine months of 2005, CMS Energy incurred a reported
net loss of $88 million compared to net income of $63 million for
the first nine months of 2004.

CMS Energy's adjusted nine-month net income, which excludes the
MCV impairment charge and other items, is $294 million up from
$110 million for the same period of 2004.  Adjusted nine-month
2005 net income, without mark-to-market impacts, would be
$162 million compared to $106 million for the same period of 2004.

With the MCV impairment charge, the Company now projects its
full-year reported results will be a loss of about $0.39 per
share.  CMS Energy projects 2005 adjusted earnings, which excludes
the MCV impairment charge and other items.  CMS Energy said its
adjusted 2005 earnings guidance, without mark-to-market impacts,
is $0.95 per share.

The MCV Partnership impaired its fixed assets in September 2005 by
recording a $1.2 billion non-cash charge.  After taxes and
minority interest, CMS Energy's portion of that charge was
$385 million.

The natural gas-fired MCV facility can produce up to 1,500
megawatts of electricity and up to 1.35 million pounds per hour of
industrial steam.  It began commercial operation in 1990.  The MCV
Partnership said it expects to incur losses because its power
supply contract doesn't allow for the full recovery of its natural
gas fuel costs at current and forecast prices.

Consumers Energy is the main customer for the MCV's electricity
output.  CMS Energy's president and chief executive officer, David
Joos, said the MCV Partnership's actions aren't expected to affect
service or reliability for Consumers Energy's 1.8 million electric
customers.

"We're obviously disappointed about the impairment charge on our
interest in the MCV.  Unfortunately, this impairment overshadows
strong operational performance in the third quarter, including
keeping pace with record electric demand in Michigan in July and
August," Mr. Joos said.

A full-text copy of the Company's quarterly report in Form 10-Q
filed with the Securities and Exchange Commission is available for
free at http://ResearchArchives.com/t/s?2bb

CMS Energy is an integrated energy company, which has as its
primary business operations an electric and natural gas utility,
natural gas pipeline systems, and independent power generation.

                         *     *     *

As reported in the Troubled Company Reporter on Jan. 17, 2005,
Fitch assigned a 'B+' rating to CMS Energy Corp.'s $150 million
issuance of 6.30% senior unsecured notes, due 2012.  Proceeds from
the issuance will be used to refinance higher cost debt and for
general corporate purposes.  Fitch said the Rating Outlook is
Positive.

As reported in the Troubled Company Reporter on Dec. 27, 2004,
Moody's Investors Service upgraded the ratings of CMS Energy
Corporation, including its Senior Implied rating to Ba3 from B2,
senior unsecured debt to B1 from B3, subordinated debt to B3 from
Caa2, and preferred stock to Caa1 from Ca.  Moody's also upgraded
CMS' Speculative Grade Liquidity rating to SGL-2 from SGL-3.  In
addition, Moody's assigned a Ba3 rating to CMS' $300 million
secured bank credit facility.  This action concludes the review of
CMS' ratings for possible upgrade.  The rating outlook is stable.


CATHOLIC CHURCH: Claimants Want to Pursue Actions Against Portland
------------------------------------------------------------------
Three sets of sexual abuse claimants ask the U.S. Bankruptcy
Court for the District of Oregon to lift the automatic stay to
permit them to prosecute civil lawsuits against the Archdiocese of
Portland in Oregon.

(1) Eight Gatti Claimants

Daniel J. Gatti, Esq., at Gatti, Gatti, Maier, Krueger, Sayer and
Associates, in Salem, Oregon, relates that R.D.W., R.B., M.C.,
L.L.C., James LaFortune, Randall McSorley, Ricky B. DuHaime, and
Douglas A. Moore each commenced litigation in the Circuit Court of
Multnomah County in Oregon subsequent to the commencement of the
Chapter 11 case against the priests who abused them and, in some
cases, the State of Oregon.

Each Claimant also filed a related proof of claim in Portland's
Chapter 11 case seeking general and punitive damages.  The claims
are disputed and unliquidated.

The Claimants removed each of their state court lawsuits to the
Oregon Bankruptcy Court in November 2004.

Mr. LaFortune executed a settlement agreement in May 2004 with
Portland and the priest who abused him.  He received a settlement
check prior to July 6, 2004, which was dishonored as a result of
Portland's bankruptcy filing.  Under the terms of the settlement
agreement, Mr. LaFortune reserved the right to declare the
agreement void and to reinstate or recommence his claims in the
event a defendant filed for bankruptcy under circumstances that
include the bankruptcy action.  Mr. LaFortune joins the request to
lift the stay as a precaution to preserve his rights under the
terms of his settlement agreement with Portland and his abuser.

By the terms of the Court-approved Accelerated Claims Resolution
Process, the Claimants were required to attempt settlement of
their claims against Portland through mediation.  Under the ACRP,
claims were divided into two stages.  The Claimants' claims were
initially assigned to Stage 1.

Two of the Claimants cancelled their scheduled pre-mediation
depositions and, therefore, did not participate in the Stage 1
mediations.  One other Claimant died before his scheduled
mediation.  However, majority of the Claimants attempted to settle
their claims against Portland and the defendants named in the
adversary proceedings during the Stage 1 mediation.

Stage 1 of the court-mandated mediations is at an end.  Yet, none
of the Claimants who participated in the mediation was able to
settle his claim, Mr. Gatti tells Judge Perris.

The Claimants want to liquidate their claims against Portland:

   (a) In cases wherein the State of Oregon is not a named
       defendant in their individual adversary proceedings, the
       Claimants seek to amend their complaints in the adversary
       proceedings to include Portland as a defendant, and to
       proceed to jury trial in state or federal court; and

   (b) Where the State of Oregon is a named defendant and has not
       waived its immunity from suit in federal court under the
       Eleventh Amendment, the Claimants request remand to the
       Circuit Court of Multnomah County in Oregon, and for
       permission to amend their complaints to name Portland as a
       defendant so as to proceed to jury trial.

Mr. Gatti notes that the ACRP Order provides binding arbitration
as an option to claimants if mediation fails.  However, the
Claimants decline to submit their claims to binding arbitration.  
The Claimants prefer a civil jury trial.

(2) D.B.W. and his six siblings

D.B.W. and his siblings -- P.S.E, W.L.T., D.R.W., P.R.W., D.C.W.,
and D.E.W -- want to file a suit against Portland in the
Multnomah County Circuit Court and proceed to liquidate their
claims arising from sexual abuse by three Roman Catholic priests
in a civil jury trial, along with their claims against the non-
Debtor persons and entities liable for their harm.

The Claimants' claims are disputed and unliquidated at this time.

Erin K. Olson, Esq., at David Slader Trial Lawyers, P.C., in
Portland, Oregon, recounts that D.B.W. filed a timely proof of
claim on April 29, 2005.  His six siblings did not remember the
sexual abuse or did not realize the causal connection between the
sexual abuse and the harm it caused them until after the
April 29, 2005 Bar Date.  The six siblings are members of the
class represented by David Foraker, the Future Claimants
Representative.

A proof of claim was timely filed on behalf of the class of
Future Claimants by the FCR on March 14, 2005.

Ms. Olson relates that D.B.W. and his siblings will shortly file a
state court lawsuit against non-Debtor third parties liable for
their harm.

Inasmuch as D.B.W.'s six siblings are within the class of Future
Claimants, the FCR does not oppose the request, Ms. Olson adds.

(3) Seven Slader Claimants

F.B., S.D., K.L., J.R., M.S., J.W., and Joan Doe commenced
litigation against non-Debtor defendants in the Circuit Court of
Multnomah County in Oregon after the Petition Date and filed
related proofs of claim in Portland's Chapter 11 case.

The lawsuit filed by F.B., S.D., K.L., J.R., M.S., J.W. -- Case
No. 0409-09193 -- is against the Franciscan Friars, the State of
Oregon, and Fr. Micheal Sprauer.  The case has been stayed by
stipulation of the parties to facilitate participation in the
ACRP approved in Portland's bankruptcy case.

The lawsuit filed by Jane Doe -- Case No. 0507-07194 -- is against
Sr. Jeanne Clare Frolick, the Society of the Sisters of the Holy
Name of Jesus and Mary, and Fr. Augustine Alvarez.  Portland has
objected to the claim filed by Ms. Doe.

Erin K. Olson, Esq., at David Slader Trial Lawyers, P.C., in
Portland, Oregon, tells Judge Perris that under the ACRP, six of
the claims were assigned to Stage 1, and the six Claimants were
required to attempt settlement of their claims against Portland
through mediation.  Ms. Olson maintains that none of the claims
was settled during the Stage 1 mediations, and none of the six
Claimants wish to participate in the binding arbitration made
optional by the ACRP Order.

Ms. Doe filed her claim on or after January 1, 2005, and would
therefore, be required to participate in Stage 2 of the mediations
under the terms of the ACRP Order should the Court deny the
presently pending request to abate the ACRP Order.

Each of the Claimants seeks a civil jury trial, Ms. Olson says.
The Claimants seek to modify the stay to permit them to amend
their state court complaints to include Portland as a named
defendant and to proceed to liquidate their claims against
Portland in state court civil jury trials.

The Claimants also want to join their clergy abuse claims against
Portland with those against other persons and entities responsible
for their harm that are presently being prosecuted in state court
lawsuits.

                      Right to Jury Trial

Ms. Olson and Mr. Gatti contend that under the ACRP Order, any
party may request a civil trial for claims not resolved in
mandatory mediation.  They also note that the Claimants' requests
place no special burden on Portland because each of the Claimant
has a statutory right to a jury trial.

The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.  
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts.  In its Schedules of Assets and Liabilities filed with
the Court on July 30, 2004, the Portland Archdiocese reports
$19,251,558 in assets and $373,015,566 in liabilities.  (Catholic  
Church Bankruptcy News, Issue No. 45; Bankruptcy Creditors'  
Service, Inc., 215/945-7000)


CATHOLIC CHURCH: Portland Wants Relations with Insurers Protected
-----------------------------------------------------------------
The Archdiocese of Portland in Oregon asks the U.S. Bankruptcy
Court for the District of Oregon to issue a protective order for
its privileged communications with its insurers.

The Insurers consist of:

   (1) Certain Underwriters at Lloyd's London subscribing
       severally and not jointly as their interests appear to
       Policy Nos. MO 10345, SL 3075, SL 3391, SL 3831, and
       SL 3232, and Excess Ins. Co., Ltd., Terra Nova Ins. Co.,
       Tenecom, Ltd. -- formerly known as Yasuda Fire & Marine
       Ins. Co. (UK) Ltd. -- and Sphere Drake Ins. Co. Plc

   (2) ACE USA, Inc.,
   (3) Centennial Insurance Company,
   (4) Fireman's Fund Insurance Company,
   (5) General Insurance Company of America,
   (6) Safeco Insurance Company Of America,
   (7) Interstate Fire & Casualty Company,
   (8) Interstate Insurance Group,
   (9) OneBeacon America Insurance Company,
  (10) St. Paul Fire and Marine Insurance, and
  (11) Oregon Insurance Guaranty Association

Teresa H. Pearson, Esq., at Miller Nash LLP, in Portland, Oregon,
relates that in the course of defending tort claims and pursuing
insurance coverage for the tort claims, the Archdiocese has
necessarily communicated with the Insurers about the merits and
defense of the tort claims.

The Archdiocese asserts various privileges in its communications
with the Insurers, including attorney-client privileges, work
product privileges, joint defense privileges, common interest
privileges, mediation privileges, joint litigant privileges and
pooled information privileges.

Ms. Pearson says the Insurers believe they can share these
communications among themselves, including sharing communications
regarding specific tort claims with those of the Insurers who are
not on the risk.

The Archdiocese is concerned that the tort claimants, or other
parties to the Chapter 11 case, may later argue that the
Insurers' sharing of the Archdiocese's communications about tort
claims with those of the Insurers who are not on the risk was a
waiver of privilege.  Provided that it is absolutely clear that
the sharing will not constitute a waiver of any privilege, the
Archdiocese is not opposed to the Insurers sharing information
about the tort claims amongst themselves without restriction.

However, Ms. Pearson clarifies that Portland does not consent to
the sharing of information if it could lead to a waiver of
privilege.

Accordingly, the Archdiocese wants the Court to confirm that the
exchange of privileged information -- written documents as well as
oral communication -- between and among the Archdiocese and the
Insurers does not constitute a waiver of any privilege.

The Insurers take the position that the Court has already approved
the Insurers sharing documents among themselves without waiver of
privilege, relying on the Court's comments at a hearing
on June 29, 2005.  Ms. Pearson, however, points out that at the
hearing, the Court only addressed whether the Insurers could share
documents among themselves; the Court did not address whether any
privilege would be waived by the Insurers doing so.

Ms. Pearson notes that the Archdiocese and the Insurers are
engaged in the common goal of defending the tort claims.  
Therefore, "[the] Court should enter an order protecting
privileged communications between the Archdiocese and the
Insurers," she says.

The Court has the power to protect the Archdiocese's privileges in
its communications with its Insurers, Ms. Pearson says.  Several
circuit courts, including the Ninth Circuit Court of Appeals, have
acknowledged the power of the district courts to enter orders
stating that parties are not deemed to have waived privileges by
providing those documents in discovery to each other.

Besides, Mr. Pearson continues, the Archdiocese is not attempting
to expand the scope of the privileges or protect documents that
are not privileged.  The order the Archdiocese seeks specifically
protects the rights of any party who may challenge the claim of
privilege of any particular written document or oral
communication.

The Archdiocese of Portland in Oregon filed for chapter 11
protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.  
Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts.  In its Schedules of Assets and Liabilities filed with
the Court on July 30, 2004, the Portland Archdiocese reports
$19,251,558 in assets and $373,015,566 in liabilities.  (Catholic  
Church Bankruptcy News, Issue No. 45; Bankruptcy Creditors'  
Service, Inc., 215/945-7000)


COLLINS & AIKMAN: Court Approves Auto Alliance & RCO Settlement
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Michigan
authorized Collins & Aikman Corporation and its debtor-affiliates
to enter into a settlement and compromise agreement with Auto
Alliance International, Inc., and RCO Engineering.

As reported in the Troubled Company Reporter on Oct. 24, 2005, the
Debtor expects to recover approximately $2 million from the
settlement in addition to securing the expedited payment of
substantial outstanding receivables and accelerated payment terms
for prospective invoices.  

                    Auto Alliance Dispute

Auto Alliance is a joint venture between Ford Motor Company and
Mazda Motor Corporation.  On November 24, 2003, Auto Alliance
awarded the Debtors the sourcing for a J56L/N Mazda 6 Door Trim
Program.  The Debtors also have other programs with Auto
Alliance, including a S197 Mustang Program.

In April 2005, the Debtors requested certain tooling progress
payments, capital equipment, and launch costs to be advanced by
Auto Alliance to assist with launch readiness and program
targets.  However, Mr. Fischer reports that Auto Alliance did not
pay the requested advances.  Auto Alliance asserted that the
Debtors failed to meet a program milestone for the J56L Program,
Mr. Fischer says.

In a letter dated July 1, 2005, Auto Alliance informed the
Debtors that they were in breach of a purchase order for the J56L
Program.  In the Letter, Auto Alliance made an offer of
settlement to resource and transition the existing equipment and
materials in the Debtors' facilities in exchange for payment of
certain engineering, design and testing costs.  Auto Alliance
also sent further notice to the Debtors saying that they are in
material default under the "terms and conditions" relating to the
program, demanding immediate possession of the tooling at the
Debtors' facilities and advising that the program was being
resourced.

The Debtors responded on July 11, 2005, disputing Auto Alliance's
assertions.  The Debtors argued that it was Auto Alliance who
breached its contract with them.

                            RCO Dispute

As part of the J56L Program, the Debtors contracted with RCO to
obtain certain capital equipment.  RCO delivered a portion of the
Equipment to the Debtors but has not been paid for it.  RCO also
hasn't been paid for the remaining portion of the Equipment that
remains in its possession.

RCO affixed permanent labels to the Equipment and filed financing
statements as required under the Michigan Special Tooling Lien
Act, with respect to the Equipment delivered to the Debtors and
currently in the Debtors' possession.

RCO believes that it has a valid tooling lien as against the
Equipment it delivered to the Debtors relating to the J56L
Program.  The Debtors dispute the RCO Equipment payment
obligation.

                             Settlement

The parties have engaged in extensive negotiations to resolve the
disputes.  As a result, the parties agree that Auto Alliance
will, among other things:

    a. immediately pay the Debtors for all outstanding amounts
       owed to them for any program, including the J56L Program
       and the S197 Mustang Program;

    b. eliminate a 4% pricing reduction under the S197 Mustang
       Program, which the Debtors estimate will provide them with
       $1,000,000 in increased pricing;

    c. pay the Debtors for all prospective indebtedness under
       programs with Auto Alliance on "net instant" 5-day terms;

    d. pay $1,350,000 to the Debtors for the purchase of capital
       equipment from RCO of which RCO will be paid $1,000,000 and
       the Debtors will retain a net of $350,000;

    e. pay $500,000 to the Debtors as payment in full for the
       Debtors' engineering, design and testing costs related to
       the J56L Program;

    f. indemnify, defend and hold the Debtors harmless from any
       payments damages, costs, expenses or other liability to the
       toolers H.S. Die, Derby, Mico, or Paragon arising or
       relating in any way under the Debtors' purchase orders or
       contracts with the Toolers for the tooling in connection
       with the J56L Program; and

    g. pay the Debtors $189,000 for the purchase of certain
       additional equipment.

The Debtors and RCO will surrender to Auto Alliance the
identified capital equipment and tooling "as is and where is" in
their possession.  The parties will also mutually release one
another from claims relating to the J56L Program.

"The Agreement provides extremely valuable economic benefits to
the Debtors and their stakeholders, while at the same time
avoiding significant attendant risks," Joseph M. Fischer, Esq., at
Carson Fischer, P.L.C., in Birmingham, Michigan, relates.
                
Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit    
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems.  The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world.  The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927).  When the Debtors filed for protection from their
creditors, they listed $3,196,700,000 in total assets and
$2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News,
Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000)


COLLINS & AIKMAN: Taps CB Richard & Keen Realty as Consultants
--------------------------------------------------------------
Collins & Aikman Corporation and its debtor-affiliates seek
permission from the U.S. Bankruptcy Court for the Eastern District
of Michigan to employ CB Richard Ellis, Inc., and Keen Realty,
LLC, as their real estate consultants, nunc pro tunc to August 8,
2005.

Since the Petition Date, the Debtors have begun to evaluate all of
their outstanding leases and property interests to determine the
appropriate disposition.  The Debtors have determined to
restructure or renegotiate some of these leases.  In addition, the
Debtors may decide to dispose of certain leases or property
interests if it becomes apparent that disposition is in the best
interests of their estates.

As part of this process, the Debtors have determined that they
require the services of professional consultants to maximize
benefits.  Accordingly, the Debtors entered into a Real Estate
Retention Agreement with real estate consultants.

The Consultants will work with the Debtors to:

     -- restructure and renegotiate the Debtors' real estate
        leases;

     -- restructure or replace the Debtors' headquarters in Troy,
        Michigan; and

     -- if the Debtors so request, dispose of their excess real
        property interests.

Pursuant to the Real Estate Agreement between the Debtors and CB
Richard and Keen Realty, the parties agree that:

    a. With respect to the negotiation of leases, the Debtors and
       CB Richards and Keen Realty will establish negotiating
       goals and parameters.  The Consultants will negotiate lease
       modifications in accordance with those parameters.  The
       Consultants will also perform other services as directed by
       the Debtors.  For these services, the Consultants will
       receive a commission of 4% of the present value of the
       total monetary and non-monetary savings provided by the
       lease renegotiation, subject to a formula set forth in the
       Agreement.

    b. With respect to the headquarters leases, the Consultants
       and the Debtors will determine whether the Debtors should
       remain in their current headquarters or relocate.  The
       Debtors and the Consultants will establish negotiating
       goals and parameters.  The Consultants will negotiate
       modifications in accordance with the parameters.  If the
       Debtors seek to relocate their headquarters, the
       Consultants will negotiate a lease in accordance with the
       parameters.  For work performed through October 12, 2005,
       the Consultants will be paid $35,000 for their services.
       For work requested by the Debtors in writing and performed
       after October 12, 2005, the Consultants will be paid an
       additional $35,000 per month.

    c. Upon the Debtors' written designation that the Consultants
       are to perform disposition services, the Consultants will
       have the sole and exclusive authority to offer the relevant
       properties for disposition.  The Consultants will be paid,
       on a transaction-by-transaction basis, the greater of:

       * $2,500, or

       * 4.75% of the disposition proceeds for leased properties
         and 3.75% of the disposition proceeds for owned
         properties.

       The disposition proceeds will be determined according to
       the formula as set forth in the Agreement.

    d. If required, the Consultants will testify and assist in
       responding to requests for information and in preparing for
       and testifying at hearings seeking court approval of a
       disposition transaction.  For these services, the
       Consultants will be compensated at rates ranging from $125
       to $500 per hour depending on the individual engaged for
       those services.

    e. The Consultants will be reimbursed for all reasonable,
       out-of-pocket expenses incurred in connection with
       performing the services required by the Agreement as long
       as the Debtors have approved, in writing, any and all
       expenses in excess of $500.

    f. The retention will be from the effective date of the
       Agreement, August 8, 2005, through the earlier to occur of
       the confirmation of a plan of reorganization or
       December 31, 2006, subject to extension by agreement of the
       parties, without the need for further Court approval.

CB Richard and Keen Realty have formed a joint venture for the
limited purpose of providing the consultation services to the
Debtors.  Compensation earned by the Consultants is being shared
among them and their employees pursuant to the joint venture.

Larry S. Michael, a member of CB Richard, assures the Court that
his firm is a "disinterested person" as defined by Section
101(14) of the Bankruptcy Code.

Moe Bordwin, a member of Keen Realty, also attests that his firm
does not hold or represent any interest adverse to the Debtors'
estates.

Headquartered in Troy, Michigan, Collins & Aikman Corporation
-- http://www.collinsaikman.com/-- is a global leader in cockpit    
modules and automotive floor and acoustic systems and is a leading
supplier of instrument panels, automotive fabric, plastic-based
trim, and convertible top systems.  The Company has a workforce of
approximately 23,000 and a network of more than 100 technical
centers, sales offices and manufacturing sites in 17 countries
throughout the world.  The Company and its debtor-affiliates filed
for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case
No. 05-55927).  When the Debtors filed for protection from their
creditors, they listed $3,196,700,000 in total assets and
$2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News,
Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000)


DELPHI CORP: USW Questions Significance of Northstar Document
-------------------------------------------------------------
The United Steelworkers yesterday questioned the significance of a
draft confidential document outlining a plan code-named
"Northstar" as a blueprint for the restructuring of Delphi Corp.'s
Electronic and Safety division.  The Detroit News reported on the
contents of the "leak" in a story on Nov. 2, 2005.

"Bankruptcy procedures are very complicated and it's early in the
process," said USW District Director Dave McCall.  "The USW, along
with all the parties with vested interests, will take part in
developing a restructuring plan.  Our rights are outlined in a
collective bargaining agreement and we'll work to keep our plants
open, our members working, and fight to keep our retirees from
being served up as sacrificial lambs."

The leaked document outlines a plan to:

    * close plants,
    * abandon some product lines, and
    * grow one of its core divisions.

The draft also identifies Motorola Automotive as an acquisition
target.  Plants cited for closure include USW-represented
facilities in Vandalia and Dayton, Ohio.

"The document doesn't make any sense to me," said USW staff
representative Ronnie Waldrup.  "The Vandalia and Dayton
facilities are highly profitable and productive.  They will be an
integral part of the long-term viability of a rejuvenated
company."

Headquartered in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- is the single largest global supplier of  
vehicle electronics, transportation components, integrated systems
and modules, and other electronic technology.  The Company's
technology and products are present in more than 75 million
vehicles on the road worldwide.  The Company filed for chapter 11
protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No.
05-44481).  John Wm. Butler Jr., Esq., John K. Lyons, Esq., and
Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
represents the Debtors in their restructuring efforts.  As of
Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530
in total assets and $22,166,280,476 in total debts.


DOMTAR INC: Moody's Reviews Ba2 Debt Rating & May Downgrade
-----------------------------------------------------------
Moody's Investors Service placed Domtar Inc.'s Ba2 senior
unsecured debt rating on review for possible downgrade.  The
rating action was prompted by the company's announcement that it
had initiated a comprehensive review of its asset portfolio so as
to rectify ongoing negative free cash flow.  In turn, this results
from a dramatic acceleration in adverse extraneous influences.
These include the:

   * exchange value of the Canadian dollar having appreciated
     relative the United States dollar;

   * input costs for energy, chemicals and fiber having increased;
     and

   * pricing for the company's key output, uncoated woodfree paper
     having unexpectedly declined in response to softening demand
     and excess capacity.

As there is the potential these influences may not materially
abate over the near-to-mid term, the company announced the
suspension of its dividend.  Domtar indicated that it would
present the market with a comprehensive suite of remedial steps by
the end of November.  Moody's intends to review the company's plan
and assess the pace at which cash generation can be accelerated.
This will be done in the context of current and expected industry
dynamics, and will account for expected performance subsequent to
and during the restructuring.  Moody's expects this review to be
completed shortly after the company's plans are made public.

Ratings placed on review for possible downgrade:

   * Corporate family rating: Ba2
   * Senior unsecured rating: Ba2

Headquartered in Montreal, Quebec, Domtar is a major North
American producer of fine papers, pulp, and lumber, and owns a 50%
interest in Norampac Inc., Canada's leading containerboard and
corrugated containers business.


DRESSER INC: Negotiates Feb. 15 Filing Extension with Lenders
-------------------------------------------------------------
Dresser, Inc., is seeking an extension from lenders under its
senior secured credit facility and senior unsecured term loan of
its obligation to deliver financial statements.

The request would extend the deadline from Nov. 14, 2005, to
Feb. 15, 2006, for providing audited financial statements for the
fiscal year ended Dec. 31, 2004, and unaudited financial
statements for the fiscal quarters ended March 31, June 30, and
Sept. 30, 2005.  It would also permit a similar extension under
the senior unsecured term loan for the filing of any pro forma
financial information that may be required after the expected sale
of Dresser's On/Off valve business and request a technical
amendment under the senior secured credit facility.

The company also said it will commence a consent solicitation from
the holders of its outstanding $550.0 million principal amount of
9-3/8% Senior Subordinated Notes due 2011 to amend and waive
certain reporting requirements in the governing indenture.  

The company believes the extension from its lenders will provide
time for the company to complete its consent solicitation process
and file its delayed SEC reports.

As reported in the Troubled Company Reporter on Oct. 3, 2005,
Dresser, Inc., amended its senior secured credit facility and
received a consent and waiver under its senior unsecured term loan
to extend the required delivery date from Sept. 30, 2005, to
Nov. 14, 2005, for providing audited financial statements for the
fiscal year ended Dec. 31, 2004, and unaudited financial
statements for the fiscal quarters ended March 31, 2005, and
June 30, 2005.

Headquartered in Dallas, Texas, Dresser, Inc. --
http://www.dresser.com/-- is a worldwide leader in the design,  
manufacture and marketing of highly engineered equipment and
services sold primarily to customers in the flow control,
measurement systems, and compression and power systems segments of
the energy industry.  Dresser has a comprehensive global presence,
with over 8,500 employees and a sales presence in over 100
countries worldwide.

                         *     *     *

As reported in the Troubled Company Reporter on June 23, 2005,
Standard & Poor's Ratings Services lowered its corporate credit
rating on Addison, Texas-based Dresser Inc. to 'B+' from 'BB-'.
The company remains on CreditWatch with negative implications.
The ratings downgrade reflects weak credit measures and debt
leverage that remain elevated for the current ratings level.


EL POLLO: Moody's Rates Planned $150 Million Unsec. Notes at Caa1
-----------------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating to
El Pollo Loco, Inc. following Trimaran Capital Partners' proposed
leveraged buyout of the company from American Securities Capital
Partners.  

In conjunction with the recapitalization, Moody's assigned a B3
rating to the proposed $125 million senior secured credit facility
(consisting of a $25 million revolver and a $100 million term
loan) and a Caa1 rating to the proposed $150 million senior
unsecured notes.  At the same time, a SGL-2 Speculative Grade
Liquidity rating was assigned.  The outlook is stable.  This
concludes the review for possible downgrade that commenced on
September 29th.

Ratings assigned with a stable outlook:

  El Pollo Loco, Inc.:

    * B3 corporate family rating;

    * B3 for the $125 million senior secured credit facility
      ($25 million revolver maturing in 2010 and a $100 million
      term loan maturing in 2011); and

    * Caa1 for the $150 million senior unsecured notes maturing in
      2013 and a Speculative Grade Liquidity rating of SGL-2.

Moody's expects to withdraw the legacy debt ratings established
during ASCP's ownership which includes:

   * the $40 million discount note of EPL Intermediate, Inc., the
     former holding company; and

   * the $110 million senior secured notes of El Pollo Loco, Inc.,
     the operating company, following the successful completion of
     the tender offers for these securities.

The B3 corporate family rating reflects El Pollo's highly levered
capital structure following the proposed LBO, with pro forma debt-
to-EBITDA at December 31, 2005 (using Moody's standard
adjustments) approximating 6.5x.  Further constricting the rating
is the challenges in effectively expanding the chain into new
markets against much larger fast-casual restaurant competitors
such as Chipotle (parent company McDonald's) and Baja Fresh
(parent company Wendy's) in an effort to offset El Pollo's
concentration of revenues in the Los Angeles metro area.

Moody's notes that with chicken as the company's core product,
El Pollo is somewhat more vulnerable to consumer perceptions
regarding chicken than many of its competitors.  The rating also
incorporates:

   * El Pollo's leading quick-service restaurant (QSR) chicken
     market share position and strong brand name in
     southern California;

   * unique position between traditional QSRs and the more recent
     fast-casual restaurants; and

   * solid operating momentum stemming from:

     -- favorable consumer/industry trends,

     -- new product introductions, and

     -- the increased capital reinvestment in infrastructure and
        the El Pollo brand.

Moody's added that El Pollo is favorably positioned within the B3
rating category.

The B3 rating on the secured credit facility (to be comprised of a
$25 million revolving credit and $100 million term loan)
recognizes the senior position of this debt class in the company's
capital structure and considers that this debt is secured by
substantially all of the company's assets.  In a hypothetical
default scenario, Moody's believes that the orderly liquidation
value of easily monetizable assets such as accounts receivable and
inventory would fall below the total bank commitments.

Because of the relative size of this debt class in the total debt
structure (45% with the revolver fully drawn) and the fact that
complete recovery would rely on the less predictable valuation for
property, leasehold improvements, restaurant equipment and
intangibles such as goodwill and El Pollo's trade name, notching
above the corporate family rating is not warranted in this
particular debt structure.  

The term loan portion of the facility will amortize at 1% per year
for five years with the remainder due in the sixth year (2011).
Moody's expects that the credit facility will include three
financial covenants - fixed charge coverage, consolidated leverage
and a limitation on capital expenditures - with levels yet to be
determined, and that the final covenant levels will provide
sufficient cushion to allow for uninterrupted access to the
revolving facility over the immediate term.  The Caa1 rating on
the unsecured notes reflects the structurally subordinated
position of those noteholders to the secured lenders in the senior
credit facility and is notched one level below the corporate
family rating.

With its authentic Mexican heritage and unique marinated, flame-
grilled chicken, El Pollo has become the chicken QSR market leader
in southern California driven by its popularity with the rapidly-
growing Hispanic population.  Beyond the Hispanic population,
which is the fastest growing segment in the U.S., El Pollo's
position between QSRs and fast-casual restaurants enables the
company to appeal to a wide range of customers with diverse
demographics and varying income levels.  Favorable industry trends
including increasing awareness in the need for healthier diets,
continuing growth in home meal replacement and rising demand for
ethnic, more flavorful foods also enhance El Pollo's growth
opportunities.

In addition, the company's strategy of expanding the brand into
new markets and regions via well-established franchisees appears
to be a prudent, lower risk higher margin approach.  However, this
planned expansion comes with challenges including competing
against local incumbents and larger chain operators as well as
appealing to potentially more conservative consumer tastes in some
regions.

The stable outlook anticipates the continuation of solid same
store sales growth through the remainder of fiscal 2005 and fiscal
2006, improving operating earnings and escalating free cash flow
generation which should reduce leverage and improve financial
flexibility over time.  On a pro forma basis at December 31, 2005
using Moody's standard adjustments, debt-to-EBITDA is
approximately 6.5x, EBITDA-to-interest expense at 2x and free cash
flow-to-debt slightly over 5%.  Moody's expects free cash flow
generation to steadily build over the next few years, benefiting
from favorable demographics and general consumer trends,
productivity improvements derived from continued focus on
infrastructure investments and accelerated franchisee expansion.

Moody's anticipates that accelerated franchisee expansion into the
New England and Chicago areas will be instrumental in enhancing El
Pollo's brand name beyond southern California and ultimately
improving the company's overall performance.  Better than expected
cash generation and accelerated debt reduction such that debt-to-
EBITDA falls to around 6x, EBITDA-to-interest approaches 2.5-3x
and free cash flow-to-debt reaches the 6-7% level could result in
positive rating actions.  Conversely, debt-to-EBITDA rising above
7x and free cash flow-to-debt falling below 3% on a sustained
basis could warrant a negative change in the outlook and/or
rating.

The SGL-2 rating reflects good liquidity and Moody's expectation
that El Pollo's cash position at the proposed transaction closing
coupled with internally generated cash flow will be sufficient in
funding upcoming debt obligations, capital expenditures and other
internal investments during 2006.  The $25 million revolver
portion of the credit facility is expected to have approximately
$14 million of availability after an initial $3 million draw at
closing plus $8 million of issued letters of credit under the $15
million letters of credit sub-limit.  There is Material Adverse
Change representation required for each individual borrowing,
however, the facility does provide same-day borrowing capability.

While financial covenant levels have yet to be set, Moody's
expects sufficient cushion to warrant complete access to the
facility over the next year.  Since all of El Pollo's tangible and
intangible assets are pledged to the bank credit facilities,
alternative sources of liquidity are limited.

El Pollo Loco Inc, headquartered in Irvine, California, is a
leading quick-service restaurant chain specializing in flame-
grilled chicken and other Mexican-inspired entrees.  The company
operates or franchises approximately 330 restaurants primarily
around Los Angeles and throughout the Southwest.


EL POLLO: S&P Junks Proposed $150 Million Senior Unsecured Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating to
Irvine, California-based El Pollo Loco Inc.'s planned $125 million
senior secured bank loan.  A recovery rating of '1' also was
assigned to the loan, indicating the expectation for full recovery
of principal in the event of a payment default.  In addition,
Standard & Poor's assigned a 'CCC+' rating to the company's
planned $150 million senior unsecured notes.

"At the same time, we affirmed our 'B' corporate credit rating on
El Pollo Loco.  The outlook is negative.  All ratings were removed
from CreditWatch, where they were placed with negative
implications on Sept. 28, 2005," said Standard & Poor's credit
analyst Robert Lichtenstein.

Proceeds from the proposed financing and a $160 million cash
contribution from Trimaran Capital Partners LLC will be used to
fund a leveraged buyout of the company.  The negative outlook is
based on increased debt leverage to an already leveraged capital
structure, with pro forma total debt to EBITDA at 7.0x.

The ratings reflect El Pollo Loco's small size in the highly
competitive quick-service sector of the restaurant industry,
regional concentration, and a very highly leveraged capital
structure.

El Pollo Loco is a small player in the highly competitive    
quick-service chicken sector of the restaurant industry.  The
company maintains only a 4% national market share, compared with
49% for KFC, 17% for Chick-fil-A, and 13% for Popeye's.  However,
in Los Angeles, the company's primary market, El Pollo Loco
competes more effectively, holding about a 40% market share.  

Still, many of the company's competitors have substantially
greater brand recognition, as well as greater financial,
marketing, and operating resources.  Moreover, major hamburger
chains, including McDonald's and Wendy's, have increased their
chicken offerings, providing additional competition for chicken
operators.


ENTERGY NEW ORLEANS: Gets Interim Injunction Vs. Utility Companies
------------------------------------------------------------------          
As previously reported in the Troubled Company Reporter on
Oct. 13, 2005, in operating its business, Entergy New Orleans,
Inc., obtains utility services, including telephone, cable, water,
and trash collection from these utility companies:

   * AllTel Telephone Co.,
   * AT&T,
   * AT&T Global Network Services,
   * AT&T Teleconference Services,
   * BellSouth,
   * BellSouth Co.,
   * BellSouth Telecommunications, Inc.,
   * Cingular Wireless, LLC,
   * COX Communication,
   * COX Communication New Orleans,
   * COX Communications,
   * Nextel Communications,
   * Nextel Communications, Inc.,
   * Sewerage & Water Board,
   * Sewerage & Water Board of New Orleans,
   * Verizon Wireless, Inc.,
   * Waste Management, and
   * Waste Management of LA, LLC.

In this regard, the Debtor asks the U.S. Bankruptcy Court for the
Eastern District of Louisiana to enjoin and restrain the Utility
Companies from discontinuing, altering or refusing service for or
on account of unpaid charges for prepetition Utility Services.

The Debtor assures the Court that it fully intends to continue
its payment habits and to timely tender all postpetition payments
for Utility Services furnished by the Utility Companies.

If it fails to pay for the postpetition Utility Services within
five business days after the due date prescribed in the billing
statement, the Debtor proposes that the unpaid Utility Company
will have the right to require the Debtor to pay the past due
billing statement and make a deposit.  The Postpetition Deposit
will be equal to the lesser of:

   1.  the average billing period over the last 12 months; or

   2.  the actual billing statement for that account for July
       2005.

The Debtor will be required to post the Deposit within 10
business days after the date of notice from the Utility Company.

If the Debtor fails to make the deposit within the period, the
Utility Company will be free to discontinue any service with
respect to the unpaid account.

                       *     *     *

Pending a final hearing on November 9, 2005, the Court restrains
the Utility Companies from altering, refusing or discontinuing
service to the Debtor.

The Court directs any Utility Company having an objection to the
entry of a Final Order to file a written objection by November 1,
2005.   "If no objections are timely filed, this Court may grant
the Final Order without further notice or hearing," the Honorable
Jerry A. Brown of the Bankruptcy Court for the Eastern District of
Louisiana declares.
                     
Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc.  
-- http://www.entergy-neworleans.com/-- is a wholly owned  
subsidiary of Entergy Corporation.  Entergy New Orleans provides
electric and natural gas service to approximately 190,000 electric
and 147,000 gas customers within the city of New Orleans.  Entergy
New Orleans is the smallest of Entergy Corporation's five utility
companies and represents about 7% of the consolidated revenues and
3% of its consolidated earnings in 2004.  Neither Entergy
Corporation nor any of Entergy's other utility and non-utility
subsidiaries were included in Entergy New Orleans' bankruptcy
filing.  Entergy New Orleans filed for chapter 11 protection on
Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697).  Elizabeth J.
Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the
Debtor in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed total assets of
$703,197,000 and total debts of $610,421,000.  (Entergy New
Orleans Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


FALCON PRODUCTS: Wants PBGC to Terminate Three Pension Plans
------------------------------------------------------------
Falcon Products, Inc., and its debtor-affiliates ask the Honorable
Barry S. Schermer of the U.S. Bankruptcy Court for the Eastern
District of Missouri to compel the Pension Benefit Guaranty
Corporation to immediately terminate their three Benefit Pension
Plans.

In the alternative, the Debtors ask the Court to compel the PBGC
to immediately make the required determination whether the Debtors
and their affiliated non-debtor entities satisfy the financial
requirements for a "distress termination" of the Pension Plans
under Sections 4041(c)(2)(B)(ii) and (iii) of the Employee
Retirement Income Security Act of 1974, as amended, Sections
1341(c)(2)(B)(ii) and (iii) of the Labor Code and to confirm that
the remaining procedural requirements for these distress
terminations have been met.

The three Benefit Pension Plans are:

      1) the Falcon Products, Inc., Retirement Plan;
      
      2) the Shelby Williams Industries, Inc., Employees' Pension
         Plan; and

      3) the Sellers & Josephson, Inc., Employees' Pension Plan.

The termination of the Benefit Pension Plans is a condition to the
Debtors' confirmed Third Amended Joint Plan of Reorganization.  
The Pension Plans cannot be terminated until the PBGC conducts its
administrative determination process for Falcon.

PBGC has not provided Falcon with its determination despite these
events:

   -- the Debtors' provision of the required information to the
      PBGC;

   -- the Court's ruling on Oct. 6, 2005, that the Debtors satisfy
      the financial requirements for a distress termination of the
      Pension Plans;

   -- the Court's ruling on Oct. 26, 2005, that the termination of
      the Pension Plans effective Aug. 31, 2005, is approved, and

   -- the Debtors' request that the PBGC commence the
      determination process for termination of the Pension Plans.

                        PBGC's Objections

The PBGC is the federal agency charged with administering the
pension plan termination provisions of Title IV of the Employee
Retirement Income Security Act of 1974, as amended, and Section
1301-1461 of the Labor Code.

The four statutory distress termination tests under Section
1341(c)(2)(B) of the Labor Code are:

   (a) liquidation in bankruptcy;
   (b) reorganization in bankruptcy;
   (c) inability to pay debts when due; and
   (d) unreasonably burdensome pension costs.

The PBGC argues that the Debtors should not let the Bankruptcy
Court bypass the requirements of a distress termination under
Title IV of ERISA.  The PBGC says the Bankruptcy Court's role in a
distress termination under Title IV of ERISA is limited to
determining whether a debtor "will be unable to pay all its debts
under a plan of reorganization and will be unable to continue in
business outside the chapter 11 reorganization process" unless a
pension plan is terminated.

The PBGC also added that the Bankruptcy Court has no role in
applying the Title IV distress criteria to the Debtors' non-debtor
affiliates.  The non-debtor affiliates cannot meet the
"reorganization in bankruptcy" distress test since they are not in
bankruptcy before the Court.

The PBGC further says that separation of powers imposes
substantial restraints on the Court's exercise of any remedial
powers that would encroach on the PBGC's delegated role under
ERISA.

The PBGC also argues that the Bankruptcy Court does not have the
authority to order the PBGC to terminate the Debtors' Pension
Plans under Section 1142(b) of the Bankruptcy Code.  This is
because there is nothing in either the Debtors' Third Amended
Joint Plan of Reorganization or the order confirming that Plan,
which purports to terminate the Pension Plans outright, nor is the
PBGC directed to terminate those Pension Plans.  

By asking the Bankruptcy Court to enforce a condition rather than
a mandatory term of the Plan of Reorganization or the Confirmation
Order, the Debtors are asking the Court to set a new precedent and
exceed the scope of Section 1142(b), the PBGC complains.

The PBGC argues that the Debtors' motion to compel the PBGC to
terminate their pension plans must be denied because under Rule
7001 of the Federal Rules of Bankruptcy Procedure, the Debtors
must initiate an adversary proceeding in order to obtain
injunctive relief.

In the alternative, the PBGC says, the Debtors' request must be
dismissed because the Debtors did not file a civil action in the
appropriate District Court as provided under Section 1303(f)(2) of
the Labor Code.  

Headquartered in Saint Louis, Missouri, Falcon Products, Inc.
-- http://www.falconproducts.com/-- designs, manufactures, and        
markets an extensive line of furniture for the food service,
hospitality and lodging, office, healthcare and education segments
of the commercial furniture market.  The Debtor and its eight
debtor-affiliates filed for chapter 11 protection on January 31,
2005 (Bankr. E.D. Mo. Lead Case No. 05-41108).  Brian Wade
Hockett, Esq., and Mark V. Bossi, Esq., at Thompson Coburn LLP
represent the Debtors in their restructuring efforts.  When the
Debtors filed for protection from their creditors, they listed
$264,042,000 in assets and $252,027,000 in debts.   On Oct. 18,
2005, the Honorable Barry S. Schermer confirmed the Debtors' Third
Amended Joint Plan of Reorganization.


FOAMEX INT'L: Gets Court Authority to Assume Four Supply Contracts
------------------------------------------------------------------          
Foamex International Inc. asks the U.S. Bankruptcy Court for the
District of Delaware for authority to assume four supply
contracts:

1. Maverick Sales Contract

   Foamex utilizes scrap foam materials in manufacturing carpet
   cushion products.  Maverick, Inc., supplies around a quarter
   of Foamex's foam needs.

   Pursuant to negotiations between the parties, Pauline K.
   Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, in
   Wilmington, Delaware, tells the Court that Maverick has
   committed to supply a significant amount of additional scrap
   foam.  The supply of scrap foam from Maverick is integral to
   Foamex's production of rebond polyurethane carpet cushion and
   flooring underlay products.  Ms. Morgan says Foamex will
   benefit with Maverick supplying higher volume levels because
   of the resulting cost savings.

2. Advanced Foam Sales Contract

   Advanced Foam Recycling, Ltd., supplies roughly a quarter of
   Foamex's blended and scrap foam needs.  Pursuant to
   negotiations, Ms. Morgan says Advanced Foam has agreed to
   provide a significant amount of scrap foam for Foamex's
   Dallas, Texas production facility over the next three months.
   Advanced Foam also assured Foamex of an increasing supply of
   blended scrap where significant volumes are not available
   elsewhere.  Advanced Foam also agreed to grant Foamex cost
   savings for higher volume levels.

3. Huntsman MDI Sales Contract

   Huntsman International LLC is one of the Debtors' primary
   suppliers of MDI isocyanate.  The Debtors utilize chemicals,
   including MDI, which are specially formulated to meet
   specific needs and are obtained from only a few select
   providers like Huntsman.  Ms. Morgan says that the Debtors
   inventory of these chemicals is limited and is sufficient to
   sustain operations for up to one week.  MDI and the other
   chemicals are the fundamental building blocks for the Debtors'
   foam products, which without them, the Debtors' manufacturing
   operations would put an immediate halt, Ms. Morgan asserts.

   The sales contract that provides the terms of the supply
   agreement between Huntsman and Foamex has been amended more
   than once to ensure Foamex a continued supply of MDI on
   payment terms that Foamex could abide by.  The most recent
   amendment extended the term of the Huntsman Contract to
   December 31, 2006, increased the quantities of MDI available
   for the Debtors, and extended the payment terms to 60-day
   terms.

4. Anatomic Supply Contract

   Anatomic Concepts, Inc., manufactures specialty medical
   mattresses and has recently expanded its business by
   manufacturing and selling viscoelastic mattress topper pads
   and pillows.  Anatomic has been a customer of the Debtors and
   their predecessors for over two decades.

   Under the terms of a Supply Contract, the Debtors have agreed
   to provide Anatomic with all of Anatomic's polyurethane foam
   requirements.  Before the Petition Date, Anatomic and Foamex
   amended the Anatomic Contract to address Anatomic's failure to
   pay past due invoices.  The amendment extends the Anatomic
   Contract until April 1, 2012.  In addition, Anatomic is
   required to pay $1,100,000 to Foamex on or before October 20,
   2005.  Any past due invoices that remain unpaid after the
   Initial Payment will be paid gradually through December 31,
   2005, at which point all past due invoices must be paid in
   full.

   Because Anatomic owes the Debtors $1,817,852 in prepetition
   debt, Anatomic granted Foamex a security interest on its
   property.  Anatomic has since obtained a financing commitment
   from First Capital Western Region LLC, of which part of the
   proceeds will be used to pay Foamex.  At FCW's insistence, FCW
   and Anatomic have entered into a Subordination Agreement and
   Intercreditor Agreement that provide, among other things, that
   the Debtors' security interest in Anatomic's property and the
   Debtors' rights to payment are subordinate to FCW's security
   interests and rights to payment.  Further, Anatomic and FCW
   have informed Foamex that FCW will not close on the financing
   agreements, thus, Anatomic will be unable to pay past due
   amounts to the Debtors until the Debtors obtain an order
   authorizing the assumption of the Anatomic Contract and entry
   into the Subordination Agreement and the Intercreditor
   Agreement.

To the extent that entry into the Subordination and Intercreditor
Agreements with FCW is outside the ordinary course of business,
Foamex seeks the Court's permission to enter into those
agreements.

Foamex tells the Court that the assumption of the Advanced Foam
and Maverick Contracts provides certainty of supply that the
Debtor requires.

Assumption of the Huntsman Contract is also warranted. Among
others, Ms. Morgan points out, it would be very difficult, if not
impossible, for Foamex to find a replacement supplier, let alone
one that would supply Foamex with the quantities that Huntsman
has agreed to provide.  "MDI is in short supply and, that
shortage has become even more acute in recent weeks as a result
of hurricanes Katrina and Rita," Ms. Morgan adds.

Furthermore, the assumption of the Anatomic Contract provides
Foamex with $1.1 million in immediate cash.  The assumption would
also give Anatomic the ability to refinance its business and
access much needed capital to pay the remaining past due amounts
as well as future purchases under the Anatomic Contract.

Thus, Foamex's assumption of each of the Contracts is amply
justified, Ms. Morgan concludes.

                      *     *     *

The Court grants Foamex International's request.

The Court directs Foamex International to satisfy its cure
obligations aggregating:

   (a) $634,310 to Maverick, Inc., in four installments:

         -- $200,000 on October 22, 2005;
         -- $200,000 on November 21, 2005;
         -- $200,000 on December 21, 2005; and
         -- $34,310 on January 20, 2005;

   (b) $170,989 immediately to Advanced Foam Recycling, Ltd.; and

   (c) $2,780,649 to Huntsman International LLC in eight weekly
       installments of $347,581.

Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of    
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets.  The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries. The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).  
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts.  Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders.  As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts.  (Foamex International Bankruptcy
News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 215/945-
7000)


FOAMEX INT'L: Wants Court Okay to Reject 13 Executory Contracts
---------------------------------------------------------------          
Foamex International Inc. and its debtor-affiliates tell the
Honorable Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware that 13 executory contracts represent
agreements for products and services that they no longer use:

   (a) Six severance agreements between the Debtors and these
       individuals:

          * Marshall S. Cogan,
          * Nick Costides,
          * Stephen Janofsky,
          * Vernon L. Leis,
          * Eleanor McKenna, and
          * Arthur H. Vartanian;

   (b) Commercial Sales Proposal between the Debtors and ADT
       Security Services, Inc. for a facility in Atlanta,
       Georgia;

   (c) Utility Consulting Agreement between the Debtors and
       Public Utility Service Corporation;

   (d) Manufacturing Agreement between the Debtors and Sleep
       Innovations, Inc.;

   (e) Two lease agreements between the Debtors and Ricoh
       Corporation for the installation of copiers; and

   (f) Two equipment leases with these parties:

          * Mercedes-Benz Manhattan, Inc.
          * Pitney Bowes Credit Corp.

Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP,
in Wilmington, Delaware, relates that the Debtors have reviewed
each of the Contracts and found that the Contracts hold no
material economic value to them or their estates, and are not
essential to the conduct of their Chapter 11 cases.

It is highly unlikely that the Debtors would be able to locate a
third-party willing to accept an assignment of any of the
Contracts, Ms. Morgan says.  Furthermore, the Debtors would only
accrue administrative expense obligations as well as the
attendant cost if they market the Contracts.

Accordingly, the Debtors seek the Court's authority to reject the
Contracts.

Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of    
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets.  The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries. The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).  
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts.  Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders.  As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts.  (Foamex International Bankruptcy
News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 215/945-
7000)


FOAMEX INT'L: Young Conaway Approved as Bankruptcy Co-Counsel
-------------------------------------------------------------          
The U.S. Bankruptcy Court for the District of Delaware granted
Foamex International Inc. and its debtor-affiliates' request to
employ Young Conaway Stargatt & Taylor, LLP, as their bankruptcy
co-counsel.

As previously reported in the Troubled Company Reporter on Oct. 3,
2005, the services that Young Conaway will render to the Debtors
include:

   (a) providing legal advice of the Debtors' powers and duties
       in the continued operation of their business and
       management of their properties;

   (b) preparing and pursuing confirmation of a plan and approval
       of disclosure statement;

   (c) appearing in Court and protecting the Debtors' interests
       before the Court; and

   (d) performing all other legal services for the Debtors, which
       may be necessary and proper in the proceedings.

The Debtors want to employ Young Conaway under a general retainer
because of the extensive legal services that may be required and
the fact that the nature and extent of the services are not known
at this time.  

On August 12, 2005, Young Conaway received $100,000 as a retainer
in connection with the planning and preparation of initial
documents and its proposed postpetition representation of the
Debtors.  Of the retainer, $90,607 has been applied to outstanding
balances existing as of Petition Date.  The remainder will
constitute a general retainer as security for postpetition
services and expenses until the conclusion of the cases.

Young Conaway will be paid on an hourly basis, plus reimbursement
of actual, necessary expense and other charges incurred by the
firm.  The principal attorneys and paralegals presently designated
to represent the Debtors will be paid at these rates:

      Name                             Hourly Rate
      ----                             -----------
      Pauline K. Morgan                    $460
      M. Blake Cleary                      $385
      Joseph M. Barry                      $325
      Sean T. Greecher                     $240
      Kenneth J. Enos                      $225
      Debbie E. Laskin                     $175

Pauline K. Morgan, Esq., a partner at Young Conaway, assures the
Court that Young Conaway does not hold nor represent any interest
adverse to the Debtors' estates.  Ms. Morgan attests that the firm
is a "disinterested person" as defined in Section 101(14) of the
Bankruptcy Code.

However, Ms. Morgan notes, Young Conaway has worked with parties-
in-interests in the Debtors' Chapter 11 cases but on matters
wholly unrelated to those cases.

Headquartered in Linwood, Pa., Foamex International Inc. --
http://www.foamex.com/-- is the world's leading producer of    
comfort cushioning for bedding, furniture, carpet cushion and
automotive markets.  The Company also manufactures high-
performance polymers for diverse applications in the industrial,
aerospace, defense, electronics and computer industries. The
Company and eight affiliates filed for chapter 11 protection on
Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).  
Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,
represent the Debtors in their restructuring efforts.  Houlihan,
Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the
ad hoc committee of Senior Secured Noteholders.  As of July 3,
2005, the Debtors reported $620,826,000 in total assets and
$744,757,000 in total debts.  (Foamex International Bankruptcy
News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 215/945-
7000)


FOOTSTAR INC: Files First Amended Plan & Disclosure Statement
-------------------------------------------------------------
Footstar Inc. and its debtor-affiliates delivered their First
Amended Plan and Disclosure Statement to the U.S. Bankruptcy Court
for the Northern District of Illinois on October 28, 2005.

The Debtors tell the Court that the plan provides for a stand-
alone restructuring around their Meldisco business, which
currently generates over 90% of its revenue from their
relationship with Kmart, which is governed by the Master
Agreement.  The Plan contemplates that the Debtors will emerge
with up to $100 million in exit financing and all unsecured
creditors will be unaltered and will remain in place.

                        Treatment of Claims

Allowed administrative expense claims will be paid in full on the
effective date.  All priority tax claims will be paid in full on
the effective date or over six years from the date of assessment
of the tax, with interest.

The Debtors estimate that they will pay in full an aggregate
allowed amount of other priority claims totaling $1 million.  
Other priority claims includes prepetition wages and employee
benefit plan contributions.

Secured tax claims aggregating $1.9 million will be paid in full.  
The Debtors will pay $8 million of other secured claims in full,
reinstate the debt, return the collateral, or provide periodic
cash payments having a present value equal to the value of the
secured creditor's interest in the Debtor's property.

Other secured claims include:

   * obligations under equipment leases,

   * mechanic liens,

   * liens of landlords on the accounts, general intangibles, or
     inventory related to the properties leased by them to the
     Debtors, and

   * contingent insurance carrier claims or mortgage claims.

Holders of allowed general unsecured claims will paid in full in
cash in an amount equal to the allowed amount of those claims,
plus interest.

Under a settlement with AIG, $14.3 million of insurance proceeds
will be made available to the class of stockholders represented in
class action lawsuits.  Each holder will receive its pro rata
share of the proceeds of the AIG Settlement in full satisfaction
of its claim.

Footstar Equity Interests will be unaltered and will remain in
place.  Subsidiary Equity Interest will be unaltered and remain in
place unless provided for otherwise by order of the Bankruptcy
Court.

                           DIP Financing

The Debtors estimate that on the effective date there will be
approximately $16 to $18 million outstanding, the majority of
which consists of standby letters of credit, under the DIP Credit
Agreement on the Effective Date.  All Loans or other required
payments, including, without limitation, all fees, costs and
expenses due and owing under the DIP Credit Agreement will be
indefeasibly paid in full in cash on the effective date.

Headquartered in West Nyack, New York, Footstar Inc., retails
family and athletic footwear.  As of August 28, 2004, the Company
operated 2,373 Meldisco licensed footwear departments nationwide
in Kmart, Rite Aid and Federated Department Stores.  The Company
also distributes its own Thom McAn brand of quality leather
footwear through Kmart, Wal-Mart and Shoe Zone stores.  The
Company and its debtor-affiliates filed for chapter 11 protection
on March 3, 2004 (Bankr. S.D.N.Y. Case No. 04-22350).  Paul M.
Basta, Esq., at Weil Gotshal & Manges represents the Debtors in
their restructuring efforts.  When the Debtor filed for
protection, it listed $762,500,000 in total assets and
$302,200,000 in total debts.


GENERAL MOTORS: Moody's Lowers Long-Term Rating to B1 from Ba2
--------------------------------------------------------------
Moody's Investors Service lowered the long-term rating of General
Motors Corporation (GM) to B1 from Ba2.  The outlook is negative.
The Ba1 rating of General Motors Acceptance Corporation (GMAC) and
the Baa3 rating of Residential Capital Corporation remain under
review with direction uncertain.  The GM downgrade reflects
greater uncertainty as to GM's ability to:

   * implement a comprehensive restructuring program;

   * stem eroding market share;

   * rebuild North American profitability; and

   * achieve positive free cash flow quickly enough to meet the
     financial metrics previously defined by Moody's for
     maintenance of its Ba2 rating.

Moreover, factors that could create additional uncertainty
include:

   * risk of supply disruptions if actions by Delphi to reduce its
     costs lead to UAW job actions;

   * potential implications of the recently announced SEC
     investigations; and

   * any actions that GM might need to take to address the
     interests of key shareholders.

The ongoing erosion of GM's competitive position and market share
is evident in the company's significant third quarter operating
loss, which contributed to $6.6 billion of cash consumption for
the nine months ended September 30th.  The company anticipates
that the scheduled launch of its new T900 trucks and SUVs will
provide opportunity for improved market share and financial
performance.  However, in an environment where consumer
preferences are shifting toward more fuel efficient vehicles, the
market acceptance of this new line of vehicles is less certain,
and may not enable the company to fully recover the considerable
investment made to develop, produce and launch the project.

At the same time, GM continues to face a significant competitive
cost disadvantage because of a burdensome North American wage and
benefit structure within its own operations and those of its major
supplier, Delphi Corporation.  While the company has recently
reached a tentative agreement with the UAW to significantly reduce
its retiree healthcare costs, the cash flow benefits of this
proposed plan are unlikely to be realized before 2008.  Moreover,
further cost reduction initiatives are likely to be needed in
order for GM to achieve a competitive cost structure in North
America.  Further restructuring actions would likely require a
large use of cash in order to fund employee separation costs.
Liquidity could be further pressured by continued operating cash
deficits together with any cash payments related to the Delphi
reorganization.

A potential offset to these liquidity requirements is GM's plan to
monetize a portion of its GMAC investment, and the B1 rating
anticipates that GM will be successful in selling a majority stake
in GMAC.  Dividends received from GMAC have been a major source of
cash to GM and have provided a lift to its credit metrics.  The
potential reduction in dividends from GMAC due to a partial sale
would contribute to a longer-term erosion of the company financial
profile.  Despite this erosion, the sale plays a critical role in
GM's financial strategy.  The transaction will boost liquidity
available to fund GM's operating and restructuring requirements,
and will enhance GMAC's value by improving its capital structure
and funding cost.  Consequently, Moody's believes that a failure
to complete the sale would require further adjustment to the
company's strategy and could result in additional downward
pressure on the rating.

The negative outlook reflects Moody's view that GM continues to
face a number of near-term challenges that could further pressure
the rating.  GM remains vulnerable to any work actions or strikes
that might occur at Delphi as a result of the supplier's attempt
to reduce labor costs.  Any interruption of supply arrangements
with Delphi would be highly disruptive for GM.  Beyond this,
failure to achieve material incremental labor cost reductions over
the intermediate term could require the company to pursue other
strategic initiatives that could have further negative rating
implications.

The SEC inquiry into certain GM accounting practices could
distract management's attention from implementing needed
restructuring actions.  Moody's further notes that SEC
investigations have, in a number of circumstances, resulted in
various companies electing to delay the filing of their financial
statements, resulting in their inability to comply with lending
agreement covenant requirements.  While GM has not indicated any
delay in its financial reporting related to the SEC investigation,
such an event would be viewed negatively from a rating
perspective.  Moreover, it would be viewed negatively if
developments relating to the investigation interfered with the
company's ability to sell a majority interest in GMAC.

Moreover, depending on developments in the investigation, the
company's ability to file financial statements in a timely manner
and thereby remain in compliance with covenant provisions of
various lending agreements could be jeopardized.  Developments in
the inquiry could also interfere with the company's near-term
ability to sell a majority interest in GMAC.

The company's SGL-1 Speculative Grade Liquidity Rating considers
that as GM contends with market and competitive challenges, it
will benefit from $19 billion of cash and $16 billion in long-term
Voluntary Employees' Beneficiary Association balances.  These
resources, along with proceeds from the potential sale of a
majority stake in GMAC, should provide critical liquidity through
2007.  In order to maintain the parent company's B1 rating, GM's
automotive operations, excluding any earnings or dividend
contribution from GMAC, will have to remain on track for
generating:

   * interest coverage exceeding 1.5 times;
   * EBIT margin of over 2%; and
   * positive free cash flow by 2007.

These areas are the principal drivers of GM's ability to implement
longer term recovery:

   -- Near term finalization of the proposed UAW agreement to
      reduce health care costs, and laying the groundwork for
      productive negotiations with the UAW regarding the 2007
      contract negotiation;

   -- Achieving component cost reductions including a supply
      agreement with Delphi that materially reduces the current
      $2 billion cost penalty;

   -- Avoiding operational disruptions stemming from Delphi's
      restructuring, and minimizing obligations associated with
      its guarantee of certain Delphi pension and health care
      benefits;

   -- Rebuilding market share including establishing market
      acceptance and reasonable pricing for the T900 series;

   -- Completing the sale of a majority interest in GMAC;

   -- Maintaining strong liquidity;

   -- Resolving the SEC investigation in a manner that does not
      delay release of or necessitate material adjustments to its
      financial statements.

Consistent progress in these areas could stabilize GM's rating
outlook and lay the ground work for a credit recovery.  
Conversely, set backs could result in further rating downgrades.

GMAC's Ba1 long-term rating, which was placed under review with
direction uncertain on October 17, 2005, is not affected by the
downgrade in GM's ratings.  GMAC's Not-Prime short term rating,
currently under review for possible upgrade, is also not affected
by the GM rating action.

Moody's believes GM to be aggressively pursuing its previously
announced intention to sell a controlling stake in GMAC.  The
outcome of a successful transaction would likely lead to a
separation of GMAC's ratings from those of GM, assuming the
strategic partner exhibits sufficient financial and managerial
strength and strategic alignment with GMAC's auto and mortgage
finance franchises.

Moody's believes GMAC's stand-alone credit profile would currently
warrant a low-Baa long-term rating, based upon GMAC's franchise
strength and reasonable credit metrics, balanced by its sizeable
direct and indirect exposure to GM.  Moody's has noted that should
GMAC's new strategic partner exhibit both an ability and
willingness to support the enterprise, there could ultimately be
positive implications for GMAC's ratings beyond its current stand-
alone low-Baa credit profile.

Moody's notes that there is uncertainty regarding the outcome of
GM's plans for the sale of a controlling stake in GMAC.  A
transaction this large and complex necessarily entails execution
risk.  In maintaining the current Ba1 long-term rating, on review
with direction uncertain, Moody's is assuming that a transaction
is likely to be completed.

If Moody's believes that a successful outcome is less likely as
events develop, Moody's could lower GMAC's ratings in the interim.
If GM is ultimately unable to consummate its plans in such a way
as to achieve ratings separation for GMAC, Moody's would likely
re-link GMAC's long-term rating with the long-term rating of GM.

The number of notches of rating differential between the GMAC
ratings and the GM ratings would be evaluated at that time.
Moody's said that it has historically maintained a one-notch
differential between the firms' long-term ratings.  This has been
based upon Moody's belief that GMAC's unsecured creditors benefit
from:

   1) to a limited degree, a lower likelihood of default between
      the two firms; and

   2) to a much greater degree, reduced severity of loss upon
      default, relative to GM unsecured creditors.

General Motors Corporation, headquartered in Detroit, Michigan, is
the world's largest producer of cars and light trucks.  GMAC, a
wholly-owned subsidiary of GM, provides retail and wholesale
financing in support of GM's automotive operations and is one of
the world's largest non-bank financial institutions.


GRIFFIN THERMAL: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Griffin Thermal Products, Inc.
        100 Hurricane Creek Road
        Piedmont, South Carolina 29673

Bankruptcy Case No.: 05-14142

Type of Business: The Debtor designs and manufactures thermal
                  transfer products for automotive and industrial
                  applications.  See http://www.griffinrad.com/

Chapter 11 Petition Date: October 14, 2005

Court: District of South Carolina (Spartanburg)

Judge: Wm. Thurmond Bishop

Debtor's Counsel: G. William McCarthy, Jr., Esq.
                  Robinson, Barton, McCarthy,
                  Calloway & Johnson, P.A.
                  1715 Pickens Street
                  P.O. Box 12287
                  Columbia, South Carolina 29211
                  Tel: (803) 256-6400

Total Assets: $2,392,244

Total Debts:  $4,182,128

Debtor's 20 Largest Unsecured Creditors:

   Entity                                   Claim Amount
   ------                                   ------------
Wilson Inc.                                     $211,412
P.O. Box 236
Piedmont, SC 29673

The G and O Manufacturing Co.                    $78,752
Transpro Inc.
P.O. Box 14068A
Newark, NJ 07198-0068

Lynch Metals Inc.                                $44,455
1075 Lousons Road
Union, NJ 07083-5029

All Midwest Sales                                $31,777

Pratt Industries                                 $28,730

Phoenix Metals Company                           $25,277

Blue Cross Blue Shield                           $21,880

Tripac International Inc.                        $20,572

Duke Power Company                               $17,626

Tru Cast Inc.                                    $17,562

Delphi Harrison Thermal Systems                  $16,878

Harleysville Insurance Company                   $16,055

Dell Computer Corporation                        $14,965

Estes Express Lines                              $14,468

Peerless of America                              $14,083

Niagara Precision Inc.                           $12,820

Praxair Inc.                                     $12,643

Weldors Supply House Inc.                        $12,323

Dreison International Inc.                       $11,627

Morrisette Paper Company Alles                   $11,205


HALCYON ATTRACTIONS: Case Summary & 7 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Halcyon Attractions Corporation
        P.O. Box 1740
        North Little Rock, Arkansas 72115

Bankruptcy Case No.: 05-40043

Chapter 11 Petition Date: November 3, 2005

Court: Eastern District of Arkansas (Little Rock)

Judge: Audrey R. Evans

Debtor's Counsel: James F. Dowden, Esq.
                  James F. Dowden, P.A.
                  212 Center Street, 10th Floor
                  Little Rock, Arkansas 72201
                  Tel: (501) 324-4700
                  Fax: (501) 374-5463

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 7 Largest Unsecured Creditors:

   Entity                        Nature of Claim   Claim Amount
   ------                        ---------------   ------------
Merk Investments, Ltd.           Real property       $1,174,268
c/o David Grace                  located at 6820
500 Main Street, Suite A         Crystal Hill Road,
P.O. Box 5851                    North Little Rock
North Little Rock, AR 72119

State of Ark Revenue Division                          $302,522
Sales & Use Tax Section
P.O. Box 8054
Little Rock, AR 72203-8054

ProSlide Technologies                                   $33,700
2283 St Laurent Blvd., Suite 200
Ottawa, Ontario K1G 5A
Canada

Pulaski County Tax Collector                            $18,671
3rd and Broadway
Little Rock, AR 72201

Lasiter Construction, Inc.       Real property          $17,844
c/o Newland and Associates       located at 6820
10 Corporate Hill Drive          Crystal Hill Road,
Suite 330                        North Little Rock
Little Rock, AR 72205

City Tax Collector               HB Tax                  $4,300
300 Main
North Little Rock, AR 72114

Halcyon Attractions of Arkansas                         Unknown
6820 Crystal Hill Road
North Little Rock, AR 72118


IMMUNE RESPONSE: Nasdaq Cites Additional Noncompliance Issue
------------------------------------------------------------
The Immune Response Corporation (NASDAQ:IMNR) received a notice
from the staff of The Nasdaq Stock Market, Inc. that the Company
did not demonstrate compliance with the $1.00 bid price
requirement for continued listing on The Nasdaq Capital Market, as
required by Nasdaq Marketplace Rule 4310(c)(4), prior to the
expiration of the 180 day compliance period on October 26, 2005.

As previously announced, on Sept. 30, 2005, the Company received
notice from Nasdaq that it no longer satisfied the requirement
that it maintain a market value of listed securities of at least
$35,000,000 and that it was subject to delisting based on that
deficiency.

In response, the Company requested a hearing before a Nasdaq
Listing Qualifications Panel, which has been scheduled yesterday,
Nov. 3, 2005.  The most recent notice from Nasdaq stated that the
bid price issue could serve as an additional basis for delisting.

The Company plans to present its plan to comply with all
requirements for continued listing at the hearing.  However, there
can be no assurance that the Panel will grant the Company's
request for continued listing.  The Company's securities will
remain listed on Nasdaq until the Panel issues its decision.

The Immune Response Corporation (Nasdaq:IMNR) --
http://www.imnr.com/-- is a biopharmaceutical company dedicated  
to becoming a leading immune-based therapy company in HIV and
multiple sclerosis (MS).  The Company's HIV products are based on
its patented whole-killed virus technology, co-invented by Company
founder Dr. Jonas Salk, to stimulate HIV immune responses.
REMUNE(R), currently in Phase II clinical trials, is being
developed as a first-line treatment for people with early-stage
HIV.  We have initiated development of a new immune-based therapy,
IR103, which incorporates a second-generation immunostimulatory
oligonucleotide adjuvant and is currently in Phase I/II clinical
trials in Canada and the United Kingdom.

The Immune Response Corporation is also developing an immune-based
therapy for MS, NeuroVax(TM), which is currently in Phase II
clinical trials and has shown potential therapeutic value for this
difficult-to-treat disease.

                         *     *     *

Levitz, Zacks & Ciceric, expressed substantial doubt about The
Immune Response Corporation's ability to continue as a going
concern after it audited the Company's financial statements for
the fiscal year ended Dec. 31, 2004.  The auditors point to
operating and liquidity concerns which resulted from the Company's
significant net losses and negative cash flows from operations.

The Company has incurred net losses since inception and has an
accumulated deficit of $339,293,000 as of June 30, 2005.  The
Company says it will not generate meaningful revenues in the
foreseeable future.

At June 30, 2005, Immune Response's balance sheet showed a
$2.1 million stockholders' deficit, compared to $4.4 million of
positive equity at Dec. 31, 2004.


INDEPENDENCE TAX: Unit Earns $71K of Net Income in Third Quarter    
----------------------------------------------------------------
Independence Tax Credit Plus LP, fka Independence Tax Credit Plus
Program, delivered its financial results for the quarter ended
Sept. 30, 2005, to the Securities and Exchange Commission on
Oct. 26, 2005.

The Company's financial statements include the accounts of 28
other limited partnerships owning affordable apartment complexes
that are eligible for the low-income housing tax credit.  Results
of operations for the three and six months ended Sept. 30, 2005,
and 2004, consist primarily of the results of the investment in
the 28 local partnerships.

                Opa-Locka's Going Concern Doubt

Of the 28 partnerships, Creative Choice Homes II LP, aka Opa-
Locka, is in default on its third and fourth mortgage notes and
continues to incur significant operating losses.  Opa-Locka's net
losses amounted to approximately $465,000, $1,550,000 and $173,000
for the 2004, 2003 and 2002 Fiscal Years, respectively.  
Management says the default and continuing losses raise
substantial doubt about Opa-Locka's ability to continue as a going
concern.  

Opa-Locka is under new management and the managers are
implementing a strategy to reduce overall operating expenses.  As
a result, Opa-Locka reported net income of approximately $71,000
for the quarter ended Sept. 30, 2005.

Independence Tax Credit's investment in Opa-Locka at March 31,
2005, and March 31, 2004, was approximately $2,970,000 and
$3,435,000, respectively.

Habif, Arogeti & Wynn, LLP, expressed substantial doubt about Opa-
Locka's ability to continue as a going concern after auditing the
subsidiary's financial statements for the year ended Dec. 31,
2004.  The auditing firm pointed to the subsidiary's default and
significant operating losses.

                       Overall Results

Independence Tax Credit incurred a $1,539,236 net loss for the
three months ended Sept. 30, 2005, compared to a $1,475,972 net
loss for the same period in 2004.  

The Company's Balance Sheet showed total assets at Sept. 30, 2005,
of $132,569,857 compared to $135,523,965 of assets at March 31,
2005.  The Company's total liabilities at Sept. 30, 2005, were
$124,584,784 compared to $124,452,229 of liabilities at March 31,
2005.  The company had approximately $9,000 of working capital
reserve at Sept. 30, 2005.


INSIGHT COMMS: Posts $7.4 Million Net Loss in Third Quarter
-----------------------------------------------------------
Insight Communications Company (NASDAQ:ICCI) reported financial
results for the quarter ended Sept. 30, 2005.

For the three months ended Sept. 30, 2005, the Company reported
net loss of $7,375,000 compared to net loss of $5,447,000 for the
same period in 2004.

Revenue for the three months ended Sept. 30, 2005 totaled $279.0
million, an increase of 11% over the prior year, due primarily to
customer gains in high-speed Internet and digital services, as
well as basic rate increases.  High-speed Internet service revenue
increased 46% over the prior year, which is mainly attributable to
an increased customer base.  Insight added a net 47,900 high-speed
Internet customers during the quarter to end at 439,200 customers.

In addition, digital service revenue increased 10% over the prior
year due to an increased customer base.  Insight added a net
29,100 digital customers during the quarter to end at 489,900
customers.

Basic cable service revenue increased 3% due to basic rate
increases partially offset by customer losses over the last twelve
months.  Insight is increasing its customer retention efforts by
emphasizing bundling, enhancing and differentiating its video
services and providing video-on-demand, high definition television
and digital video recorders.  The company is also continuing to
focus on improving customer service through higher service levels,
increased education of product offerings and increased spending on
marketing and sales efforts.

Cash provided by operations for the nine months ended Sept. 30,
2005 and 2004 was $225.0 million and $227.7 million.  The decrease
was primarily attributable to:

    * the timing of cash receipts and payments related to
      Insight's working capital accounts;

    * the decrease was partially offset by increased operating
      income; and

    * the effect of non-cash items.

Cash used in investing activities for the nine months ended
Sept. 30, 2005 and 2004 was $143.0 million and $130.9 million.  
The increase primarily was due to capital expenditures for the
buildout of Insight's telephone product.

Cash used in financing activities for the nine months ended
Sept. 30, 2005 and 2004 was $64.3 million and $60.8 million.  The
increase was primarily due to debt issuance costs paid for the
refinancing of the Term B loan facility and increased amortization
payments of the credit facility in 2005.

For the nine months ended September 30, 2005 and 2004, Insight
spent $144.6 million and $130.9 million in capital expenditures.
These expenditures principally constituted telephone equipment,
purchases of customer premise equipment, capitalized labor,
headend equipment and system upgrades and rebuilds, all of which
are necessary to maintain Insight's existing network, grow its
customer base and expand its service offerings.

Free Cash Flow for the nine months ended Sept. 30, 2005 totaled
$80.4 million, compared to $96.8 million for the nine months ended
September 30, 2004.   While Insight expects to continue to use
Free Cash Flow to repay its indebtedness, as interest rates
continue to increase, it expects interest costs will also be
higher.

                          Refinancing

On July 21, 2005, Insight completed a refinancing of the existing
$1.1 billion Term B loan facility under the Insight Midwest Credit
Agreement.  This refinancing reduced the applicable margins for
LIBOR rate borrowings from LIBOR plus 275 basis points to LIBOR
plus 200 basis points.  The applicable margin will reduce an
additional 25 basis points if the Midwest Holdings leverage ratio
drops below 2.75.  The maximum total leverage ratio covenant was
reset from 3.75 to 4.50 on July 1, 2005 with additional step-downs
to 4.25 on July 1, 2006 and to 4.00 on July 1, 2007.  The facility
was also amended to provide certain flexibility to refinance the
senior notes at Insight Midwest.

Insight Communications (NASDAQ: ICCI) is the 9th largest cable
operator in the United States, serving approximately 1.3 million
customers in the four contiguous states of Illinois, Indiana,
Ohio, and Kentucky.  Insight specializes in offering bundled,
state-of-the-art services in mid-sized communities, delivering
analog and digital video, high-speed Internet, and voice telephony
in selected markets to its customers.

                         *     *     *

As reported in the Troubled Company Reporter on Oct. 5, 2005,
Fitch Ratings affirmed the 'B+' Issuer Default Rating and the
Stable Rating Outlook assigned to Insight Communications Company,
Inc.  

Specifically, Fitch affirmed the 'BB+' senior secured rating and
'R1' Recovery Rating assigned to Insight Midwest Holdings, LLC's
senior secured credit facility, and the 'B+' senior unsecured debt
rating and 'R4' Recovery Rating assigned to the senior unsecured
notes issued by Insight Midwest, LP.  Also, Fitch affirmed the
'CCC+' senior unsecured rating and 'R6' Recovery Rating assigned
to ICCI's senior discount notes.  Approximately $2.8 billion of
debt is affected by Fitch's action.

As reported in the Troubled Company Reporter on July 12, 2005,
Standard & Poor's Ratings Services revised its outlook on New York
City, New York-based cable TV operator Insight Midwest L.P. to
stable from negative.  At the same time, Standard & Poor's
affirmed its ratings on Insight Midwest, including the 'BB-'
corporate credit rating. Standard & Poor's also assigned its 'BB-'
rating to intermediate holding company Insight Midwest Holdings
LLC's new $1.108 billion term loan C due December 2009.  Proceeds
from the new bank loan will be used to repay the previous term
loan B facility.


INTEGRATED ELECTRICAL: Engages Gordian Group as Financial Advisor
-----------------------------------------------------------------
Integrated Electrical Services, Inc. (NYSE: IES) has retained
Gordian Group, LLC, as a financial advisor.  As part of its
engagement, Gordian will assist the Company's management and Board
of Directors in developing alternatives to refinance or de-lever
all or a portion of its long-term debt, including the 9 3/8%
Senior Subordinated Notes due 2009.

"This is a very important initiative for our customers, suppliers
and employees," Byron Snyder, Chief Executive Officer, said.  
"This initiative constitutes a significant step in our continuing
efforts to work with our various constituents to reduce our long
term debt, the goal of which is to improve free cash flow, enhance
credit ratings, strengthen the balance sheet and enhance surety
bonding capacity for our business.  During this process, we will
continue to maintain normal course of payment to vendors and
suppliers.  We are pleased with the faith and support that our
customers and suppliers continue to show in us."

Gordian is a leading investment bank based in New York City with a
national practice in providing investment banking and financial
advisory services in complex situations.  Consistently recognized
as one of the nation's top 10 investment banks in its field,
Gordian is a registered broker-dealer, has extensive capital
market capabilities and has been involved in over 150 engagements
during its 18-year history.  Gordian has received national
recognition for its advisory work, earning the 2000 Middle-Market
Deal of the Year award for its work on behalf of Ben & Jerry's
Homemade, Inc. in its sale to Unilever NV.

Integrated Electrical Services, Inc. -- http://www.ies-co.com/--
is a national provider of electrical solutions to the commercial
and industrial, residential and service markets.  The company
offers electrical system design and installation, contract
maintenance and service to large and small customers, including
general contractors, developers and corporations of all sizes.   

                         *     *     *   

As reported in the Troubled Company Reporter on May 19, 2005,   
Moody's Investors Service downgraded the ratings of Integrated   
Electrical Services, Inc. one notch to B3 senior implied and to   
Caa2 for its guaranteed senior subordinated debt of $173 million  
due 2009 and changed the outlook to negative.   

Moody's has downgraded these ratings:   

   * Senior Implied, downgraded to B3 from B2;   

   * Senior Unsecured Issuer Rating, downgraded to Caa1 from B3;   

   * $173 million (remaining balance) of 9.375% senior   
     subordinated notes due 2009 (in two series), downgraded to   
     Caa2 from Caa1.   

The ratings outlook is changed from stable to negative.


INTERSTATE HOTELS: Earns $5.4 Mil. of Net Income in Third Quarter
-----------------------------------------------------------------
Interstate Hotels & Resorts (NYSE: IHR) reported results of
operations for the third quarter ended Sept. 30, 2005.  The
company exceeded its earnings guidance of August 9 and raised its
2005 full-year earnings guidance for the third time this year.

For the 2005 third quarter, net income was $5.4 million compared
to a net loss of $300,000 in the third quarter 2004.  The
statement of operations includes the following non-recurring items
and special charges:

    * $4.3 million gain related to the extinguishment of a non-
      recourse promissory note;

    * $2.6 million gain on the sale of the Pittsburgh Airport
      Residence Inn by Marriott; and

    * $1.0 million loss from asset impairments and other write-
      offs, primarily related to the termination of three
      management contracts as a result of the hotels being sold by
      MeriStar Hospitality.

Total revenue in the 2005 third quarter, excluding other revenue
from managed properties (reimbursable costs), was $55.3 million,
compared to $48.1 million in the 2004 third quarter.  The increase
in revenue over the prior year can be attributed to:

    * higher management fee revenue resulting from a greater
      number of managed properties compared to the same period
      last year, as well as favorable operating results across the
      company's portfolio;

    * ownership of the Hilton Concord, acquired in the first
      quarter of 2005; and

    * the strong performance of the BridgeStreet Worldwide
      corporate housing subsidiary.

"Hotel operating results outpaced the industry in the third
quarter, and we exceeded our guidance for the third quarter in a
row," said Thomas F. Hewitt, chief executive officer.  "RevPAR was
above the high end of our guidance range, up 10.8 percent, as we
were able to move rate higher during the quarter due to a
continued strong economy and increasing business travel demand.

"In addition, we continue to add impressive hotels to our
management portfolio, such as the 279-room Claremont Resort & Spa
in Berkeley, California, and the 402-room Radisson Plaza Hotel
Myrtle Beach Convention Center in South Carolina, which was
immediately converted to a Sheraton brand - both added during the
quarter."

Strong results were reported by the company's corporate housing
division, with London and Chicago leading the way.  "We continued
to focus on yield management, which positively impacted rate and
occupancy and translated into higher margins and profits on a
lower unit count compared to the same period last year.  Rate rose
4.1% and occupancy increased 3.3% for the third quarter," Mr.
Hewitt said.

                Acquisitions and Divestments

The company completed the sale of one hotel during the third
quarter, the Pittsburgh Airport Residence Inn by Marriott, for $11
million and used a portion of the proceeds to pay down its senior
credit facility.  Additionally, the company signed a definitive
agreement to acquire the 195-room Hilton in Durham, North Carolina
for a net purchase price of $13.3 million.  The acquisition will
be funded with cash on hand as well as availability under its
senior credit facility.

"With the upcoming purchase of the Hilton Durham we are continuing
to execute on our growth strategy," Mr. Hewitt commented. "Hotel
acquisitions, either wholly-owned or through joint ventures, will
remain a key component of our future growth as we seek to further
diversify and strengthen our core hotel management earnings
stream.

"Furthermore, to support our acquisition focus, we named Leslie Ng
as our chief investment officer in September.  We currently have
an active pipeline, and Leslie will play a pivotal role in
sourcing and negotiating additional investment and management
opportunities."

On Sept. 30, 2005, Interstate had:

    * Total cash of $17.8 million

    * Total debt of $86.3 million, consisting of:

         -- $65.3 million of senior debt,
         -- $19 million of mortgage debt,
         -- $2 million of other debt

"The company paid down more than $10 million on its senior credit
facility during the quarter with cash flow from operations and
proceeds from the sale of the Pittsburgh Airport Residence Inn,"
said J. William Richardson, chief financial officer.  "We will
continue to focus on strengthening our balance sheet by
efficiently managing our cash flows.  We currently have more than
$35 million of availability on our senior credit facility to fund
our growth initiatives."

Interstate Hotels & Resorts -- http://www.ihrco.com/-- operates  
nearly 300 hospitality properties with more than 67,000 rooms in
41 states, the District of Columbia, Canada, and Russia.
BridgeStreet Worldwide, an Interstate Hotels & Resorts'
subsidiary, is one of the world's largest corporate housing
providers.  BridgeStreet and its network of Global Partners offer
more than 8,900 corporate apartments located in more than 90 MSAs
throughout the United States and internationally.

                        *     *     *

As reported in the Troubled Company Reporter on Sept. 14, 2005,
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.


JERNBERG INDUSTRIES: Ch. 7 Trustee Taps McGuireWoods as Counsel
---------------------------------------------------------------
Richard J. Mason, Esq., the chapter 7 trustee appointed in
Jernberg Indusries, Inc. and its debtor-affiliates' chapter 7
proceedings, asks the U.S. Bankruptcy Court for the Northern
District of Illinois for permission to employ McGuireWoods LLP as
his counsel, nunc pro tunc to Oct. 7, 2005.

Mr. Mason is the president and sole shareholder of Richard J.
Mason, P.C., an Illinois professional corporation that is a
partner of McGuireWoods.  

McGuireWoods LLP will:

  (a) provide legal advice with respect to the Trustee's duties,
      responsibilities and powers in these cases (including his
      responsibilities related to the employee benefit plans);

  (b) assist in the investigation of the acts, conduct, assets,
      liabilities and financial conditions of the Debtors;

  (c) assist in marshalling and liquidating the assets of these
      estates;

  (d) provide legal advice with respect to the prosecution of
      claims against third parties;

  (e) provide legal advice and assistance with prosecuting claims
      objections;

  (f) represent the Trustee before the Court;

  (g) respond on behalf of the Trustee to requests for information
      from creditors and other parties in interest; and

  (h) provide other legal services as may be required by the
      Trustee.
  
Mr. Mason will receive $495 per hour for his services.  
Patricia K. Smoots, the principal partner assigned to Jernberg
Industries' cases will bill $395 per hour, while Michael M.
Schmahl, the Firm's principal associate, will bill $250 per hour.

The Firm's professionals' current billing rates are:

        Designation               Hourly Rate
        -----------               -----------
        Partners                  $375 - $495
        Associates                $250 - $300
        Paraprofessionals         $140 - $155

The Firm has not received any retainer for this engagement.

Mr. Mason disclosed that McGuireWoods has and continues to
represent:

   -- A. Finkl & Sons, Inc., one of the Debtors' creditors;

   -- Citicapital Commercial Corporation, a defendant to one of
      the Debtors' adversary proceedings; and

   -- General Electric Capital Corporation and its affiliates
      which owns Heller Financial Leasing, a defendant to one of
      the Debtors' adversary proceedings.
   
Mr. Mason tells the Court that he intends to employ a special
counsel to advise and represent him for matters that will involve
Finkl, Citicapital and GE Capital.  Mr. Mason assures the Court
that there will be no overlapping of services between law firms.

Based on Mr. Mason's knowledge, the Firm does not hold any
interest adverse to the Debtors' estate.

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


JERNBERG INDUSTRIES: Section 341(a) Meeting Slated for Nov. 14
--------------------------------------------------------------
The United States Trustee for Region 10 will convene a meeting of
Jernberg Industries Inc.'s creditors at 2:00 p.m., on Nov. 14,
2005, at 227 W. Monroe Street, Room 3360 in Chicago, Illinois.  
This is the first meeting of creditors required under 11 U.S.C.
Sec. 341(a) in all chapter 11 bankruptcy cases converted to
chapter 7 liquidation proceedings.

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 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).  The case was converted to a
chpater 7 liquidation proceeding on Sept. 26, 2005.  Richard J.
Mason was appointed chapter 7 Trustee.  Jerry L. Switzer, Jr.,
Esq., at Jenner & Block LLP represents the Debtors in their
restructuring efforts.  When the Debtors filed for protection from
their creditors, they estimated assets and debts of $50 million to
$100 million.  CM&D Management Services, LLC's A. Jeffery Zappone
serves as the Debtors' Chief Restructuring Officer.  CM&D Joseph
M. Geraghty sits as Cash and Restructuring Manager and Joshua J.
Siano, Gerald B. Saltarelli and J. David Mathews serve as Cash and
Restructuring Support personnel.


JEROME-DUNCAN: Wants Open-Ended Deadline to Decide on Leases
------------------------------------------------------------
Jerome-Duncan, Inc., asks the U.S. Bankruptcy Court for the
Eastern District of Michigan, Southern Division, to extend the
period within which it may assume, assume and assign, or reject
unexpired non-residential leases until the confirmation of a plan
of reorganization.

The Debtor is a party to seven executory contracts or non-
residential real property leases:

Facility        Landlord/Vendor         Location
--------        ---------------         --------
Ford Lot        Ford Motor Company      Ford Transmission Plant                                        
                                         Parking Facility-Van Dyke
                                         Sterling Heights, MI

Sub-Lease to    Jerome Duncan, Inc.     40522 Van Dyke
Sterling Motors                         Sterling Heights, MI

Jerome
Duncan, Inc.    SK Paul & Gail Duncan   8000 Ford Country Lane
                                         Sterling Heights, MI

North Lot       SK Paul & Gail Duncan   45411/45433 Van Dyke
                                         Utica, MI

Pioneer Lot     SK Paul & Gail Duncan   40552 Van Dyke
                                         Sterling Heights, MI

South/East Lot  SK Paul & Gail Duncan   39990 Van Dyke
                                         Sterling Heights, MI

17 Mile         SK Paul & Gail Duncan   38935 Mound Road
Quick Lube                              Sterling Heights, MI
                                             
Jason W. Bank, Esq., at Schafer and Weiner, PLLC in Michigan,
tells the Court that the leases are valuable to the Debtor's
ongoing operations.  The Debtor wants to avoid making premature
decisions whether to assume or reject the leases which may harm
unsecured creditors.

The Debtor assures the Court that the proposed extension will not
prejudice its lessors, as it remains current on its obligations
under the leases.

Headquartered in Sterling Heights, Michigan, Jerome-Duncan Inc.,
is the largest dealer of automobiles manufactured by Ford Motor
Company in the state of Michigan.  The Debtor is one of the most
well-known, modern automobile dealers in the area and has a
tradition of serving customers in southeastern Michigan for the
past 50 years.  The Debtor employs over 200 individuals in its
operations and generates between $300 and $500 million in annual
sales.  The company filed for chapter 11 protection on June 17,
2005 (Bankr. E.D. Case No. 05-59728).  Arnold S. Schafer, Esq., at
Schafer and Weiner, PLLC, represents the Debtor in its
restructuring efforts.


JOSEPH PENNY: Case Summary & 5 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Joseph Edward Penny, Jr.
        10453 Sarah Street
        Toluca Lake, California 91602

Bankruptcy Case No.: 05-50030

Chapter 11 Petition Date: November 3, 2005

Court: Central District Of California (San Fernando Valley)

Judge: Maureen Tighe

Debtor's Counsel: J. Bennett Friedman, Esq.
                  Hamburg, Karic, Edwards & Martin LLP
                  1900 Avenue of the Stars, Suite 1800
                  Los Angeles, California 90067
                  Tel: (310) 552-9292

Estimated Assets: $1 Million to $10 Million

Estimated Debts:  $1 Million to $10 Million

Debtor's 5 Largest Unsecured Creditors:

   Entity                                 Claim Amount
   ------                                 ------------
Internal Revenue Service                      $280,000
Special Procedures Branch
300 North Los Angeles, Room 4062
Los Angeles, CA 90012-9903

JAC Capital Fund, LLC                          $28,000
10449 Sarah Street
Toluca Lake, CA 91602

American Express                               $21,329
P.O. Box 360002
Fort Lauderdale, FL 33336

Franchise Tax Board                            $19,315
Special Procedures
P.O. Box 2952
Sacramento, CA 95812-2952

American Express                               $11,754
P.O. Box 0001
Los Angeles, CA 90096-0001


KAISER ALUMINUM: Balks at Insurers' Cry for Exact Insurance Report
------------------------------------------------------------------
As previously reported in the Troubled Company Reporter on  
October 4, 2005, some insurers complained that Kaiser Aluminum
Corporation and its debtor-affiliates' Second Amended Plan of
Reorganization is unclear and contradictory concerning whether it
is truly insurer neutral on many issues.

The Insurers asked the U.S. Bankruptcy Court for the District of
Delaware for a more definite statement with respect to the Plan.

The Insurers include:

   (a) Allstate Insurance Company, solely as Successor-in-
       Interest to Northbrook Excess and Surplus Insurance
       Company, formerly known as Northbrook Insurance Company;

   (b) Hudson Insurance Company;

   (c) Federal Insurance Company;

   (d) Employers Mutual Casualty Company;

   (e) American Re-Insurance Company Executive Risk Indemnity
       Company, as successor-in-interest to American Excess
       Insurance Company;

   (f) Associated International Insurance Company and Evanston
       Insurance Company; and

   (g) Republic Indemnity Company and Transport Insurance
       Company, formerly known as Transport Indemnity Company.

                             Objections

(a) Debtors

Aside from being procedurally improper, the Insurer's request for
insurance neutrality language cited no single case to support
their contentions.

"This is not surprising," Kimberly D. Newmarch, Esq., at
Richards, Layton & Finger, in Wilmington, Delaware, tells the
Court.  "The proper way to challenge a plan is to file an
objection to the plan, not to file a motion that effectively seeks
to require the plan proponents to modify the plan to explain what
they believe to be the legal effect of certain provisions of the
plan.  The Motion is essentially a premature confirmation
objection."

The Debtors do not believe that the insurance neutrality language
in the Plan is unclear, Ms. Newmarch says.  But whether or not the
language could be drafted in a clearer way, there can be no
question that the Insurers have failed to establish that the
language is so "unintelligible" that they are unable to draft an
objection to the Plan.

The plan modifications that the Insurers seek are not the
appropriate subject of a motion pursuant to Rule 12(e) of the
Federal Rules of Civil Procedure, Ms. Newmarch contends.
Nonetheless, the Debtors and their tort constituencies are willing
to discuss, and in fact are currently discussing, with the
Insurers the concerns raised in the request.

Thus, the Debtors ask the Court to deny the Insurers' request.

(b) Asbestos Claimants Committee & Future Representative

The Official Committee of Asbestos Claimants and Martin J. Murphy,
the legal representative for future asbestos claimants, agree with
the Debtors.

Given that the Disclosure Statement has been approved and the
Insurers have not filed an objection to confirmation of the Plan,
Mark T. Hurford, Esq., at Campbell & Levine, LLC, in Wilmington,
Delaware, points out that there is no contested matter to support
the application of Civil Rule 12(e) through Rules 9014 and 7012 of
the Federal Rules of Bankruptcy Procedure.

Mr. Hurford contends that the Insurers' request is nothing more
than an attempt for them to solicit the Court's aid in securing
additional protections, which they are not entitled to secure.

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


KAISER ALUMINUM: Settles Dispute Over Washington Revenue's Claims
-----------------------------------------------------------------
As previously reported in the Troubled Company Reporter on  
October 6, 2005, Kaiser Aluminum & Chemical Corporation and the
State of Washington Department of Revenue entered into
negotiations and eventually arrived at an agreement to resolve
their disputes over the Claims.  The material terms of the
Stipulation are:

A. Claim No. 209 will be allowed as:

   (a) an unsecured priority claim under Section 507(a)(8) of the
       Bankruptcy Code against KACC for $452,949; and

   (b) a general unsecured claim for $224,913.

    Claim No. 209 will be satisfied in accordance with KACC's
    plan of reorganization:

B. Claim No. 381 will be allowed as an unsecured priority claim
   for $980.  Claim No. 381 will be satisfied in accordance with
   KACC's plan of reorganization;

C. Claim No. 864 will be disallowed and expunged;

D. The Contingent Excise Taxes will be unaffected by the Debtors'
   Chapter 11 cases and will be the obligation of KACC or any
   successor to the extent that the taxes become due and owing;

E. To the extent that Washington was not authorized to conduct
   the Setoff pursuant to applicable law, the automatic stay
   imposed by Section 362 will be deemed lifted to permit
   Washington to conduct the Setoff; and

F. Except with respect to the Contingent Excise Taxes, all
   prepetition claims Washington has against the Debtors, whether
   asserted in Claim Nos. 209, 381 or 864 or otherwise, including
   the Disallowed B&O Tax Credit and the Natural Gas Use Taxes,
   to the extent not expressly allowed pursuant to the
   Stipulation, will be deemed to have been withdrawn as
   satisfied.

The U.S. Bankruptcy Court for the District of Delaware approved
the stipulation.

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


LEINER HEALTH: Posts $1.4 Million Net Loss in Second Quarter
------------------------------------------------------------
Leiner Health Products Inc. reported financial results for the
second quarter ended Sept. 24, 2005.

Net sales for the quarter were $168.9 million compared to $165.0
million for the same period in fiscal 2005, a 2.4% increase.  For
the first six months of fiscal 2006, net sales totaled $314.5
million compared to $321.0 million in the first half of fiscal
2005, a 2.1% decrease.

Leiner reported a net loss of $1.4 million for the quarter,
compared to net income of $5.4 million for the same period in
fiscal 2005.  The decrease in net income for the second quarter of
fiscal 2006 was primarily the result of reduced gross margins due
to:

    1) the transition in product mix from higher margin Vitamin E
       to lower margin joint care in the VMS category and

    2) lower plant volumes from the company's inventory reduction
       initiative which began in the fourth quarter of fiscal
       2005.

Consequently, gross profit for the second quarter of fiscal 2006
was $29.5 million compared to $43.6 million for the same period in
fiscal 2005.

For the first six months of fiscal 2006, Leiner recognized a net
loss of $5.6 million, compared to a net loss of $62.4 million in
the first half of fiscal 2005, which included $87.4 million of
recapitalization charges.

                      Credit Agreement

Credit Agreement EBITDA for the quarter was $22.2 million,
compared to $21.4 million for the same period in fiscal 2005.  For
the first six months of fiscal 2006, Credit Agreement EBITDA was
$31.4 million, compared to $41.0 million during the first half of
fiscal 2005.  Credit Agreement EBITDA is a financial measure used
in the company's Credit Agreement, which required Leiner to have
met a Consolidated Indebtedness to Credit Agreement EBITDA
Leverage Ratio and a Credit Agreement EBITDA to Consolidated
Interest Expense Ratio.

Leiner was in compliance with these financial covenants as of
Sept. 24, 2005.  As previously announced, the Company's financial
covenants were amended through unanimous approval by its secured
lenders, effective Sept. 23, 2005.

Robert Kaminski, Chief Executive Officer, commented, "On Sept. 26,
we announced the closing of the Pharmaceutical Formulations, Inc.
acquisition and the completion of our Credit Agreement Amendment.
I want to express our appreciation to both the Company's lenders
and our equity sponsors for their continued support of Leiner's
vision.  The full participation of our equity holders in
contributing $13.0 million to support the PFI acquisition and the
positive terms of the Credit Agreement Amendment are evidence of
the confidence we share in the Company's future plans.

"In the short term, the business has absorbed the impact of
product rotation and inventory rebalancing.  These factors are
clearly reflected in our first half results.  The Company's
'customer first' philosophy has never been more evident.  We have
emerged as a leading store brand pain management supplier focused
on customer quality and in-stock first, believing our own rewards
will follow.  During the quarter, the Company's point of sale to
customer inventory ratio increased and plant production returned
to a more normalized level.

"Additionally, the initial results of the National Institutes of
Health GAIT study (Glucosamine/Chondroitin Arthritis Intervention
Trial) appear to be quite favorable to our expanded natural joint
care franchise.  Details should be available in the next few
weeks. We are excited about the potential in this product category
and the position we have established for Leiner in the
marketplace."

Founded in 1973, Leiner Health Products, headquartered in Carson,
Calif., is America's leading manufacturer of store brand vitamins,
minerals, and nutritional supplements and its second largest
supplier of over-the-counter pharmaceuticals in the food, drug,
mass merchant and warehouse club (FDMC) retail market, as measured
by retail sales. Leiner provides nearly 40 FDMC retailers with
over 3,000 products to help its customers create and market high
quality store brands at low prices. It also is the largest
supplier of vitamins, minerals and nutritional supplements to the
US military. Leiner markets its own brand of vitamins under
YourLife(R) and sells over-the-counter pharmaceuticals under the
Pharmacist's Formula(R) name. Last year, Leiner produced 27
billion doses that help offer consumers high quality, affordable
choices to improve their health and wellness.

                        *     *     *

As reported in the Troubled Company Reporter on Aug. 19, 2005,
Moody's Investors Service lowered the long and short-term ratings
of Leiner Health Products Inc. by one notch and placed the long-
term ratings on review for further possible downgrade.  The rating
action follows the sharp decline in first quarter profits that has
resulted in negative free cash flow and has forced the company to
seek an amendment to its bank credit agreement.  Credit measures
and liquidity have weakened beyond levels consistent with the
previous ratings, and could be further constrained by ongoing
industry and cost pressures or by the company's planned
acquisition of Pharmaceutical Formulations Inc.

These ratings were downgraded and placed under review for further
possible downgrade:

   * Corporate family rating (formerly called "senior implied
     rating"), to B2 from B1;

   * $50 million senior secured revolving credit facility
     due 2009, to B2 from B1;

   * $240 million senior secured term loan facility due 2011,
     to B2 from B1;

   * $150 million 11% senior subordinated notes due 2012, to Caa1
     from B3.

These rating was downgraded:

   * Speculative grade liquidity rating, to SGL-4 from SGL-3.


LEVEL 3 COMMS: Acquisition Cues Moody's to Affirm Junk Ratings
--------------------------------------------------------------
Moody's Investors Service affirmed Level 3 Communications, Inc.'s
ratings and changed the outlook for all ratings to developing from
stable following the company's announcement that it is acquiring
WilTel Communications Group LLC for 115 million shares of Level 3
common stock plus $370 million of cash.  

The transaction, which Moody's expects to be a delevering event
for Level 3, given that WilTel generates positive free cash flow,
should nominally decrease Level 3's pro forma leverage thereby
decreasing credit risk for Level 3 debt holders.  Moody's will
consider the probability of achieving merger synergies, and the
potential for the company to reduce debt.

Moody's has affirmed these ratings:

  Level 3:

    * Corporate family rating -- Caa2
    * Speculative Grade Liquidity Rating -- SGL-1
    * $954 Million 9.125% Senior Notes due in 2008 -- Ca
    * $132 Million 11% Sr. Notes due in 2008 -- Ca
    * EUR50 Million 10.75% Senior Euro Notes due 2008 -- Ca
    * $362 Million 6% Convertible Subordinated Notes due 2009 -- C
    * $374 Million 2.875% Convertible Senior Notes due 2010 -- Ca
    * EUR104 Million 11.25% Senior Euro Notes due 2010 -- Ca
    * $96 Million 11.25% Senior Notes due 2010 -- Ca
    * $514 Million 6% Convertible Subordinated Notes due 2010 -- C
    * $345 Million 5.25% Convertible Senior Notes due 2011 -- Ca

  Level 3 Financing, Inc.:

    * $730 Million Term Loan due in 2011 -- B3
    * $500 Million Senior Notes due in 2011 -- Caa1

Moody's has changed the outlook to developing from stable.

The developing outlook reflects the uncertainty surrounding the
regulatory review processes.  Once Moody's has greater certainty
with respect to such processes, the future ratings outlook will
depend on:

   1) Level 3's strategy for financing the acquisition (i.e. the
      final balance of cash versus common stock);

   2) the company's strategy for successfully integrating WilTel's
      operations and the probability of generating meaningful cost
      reductions; and

   3) the company's ability to generate pro forma cash flows and
      its overall strategy for reducing debt, including the impact
      of the pending transactions involving its Information
      Services businesses.

Any potential outlook change would also likely focus on Level 3's
pro forma market position and whether the elimination of a
significant competitor and its effect, if any, will have on
pricing pressures.  Additionally, Moody's would also assess Level
3's strategy for WilTel's Vyvx business, which is included as part
of the merger transaction.

LVLT is a leading nationwide communications service provider and
software distributor with sales of $3.8 billion for the trailing
twelve months ended September 30, 2005.  The company's
headquarters are located in Broomfield, Colorado.


MCI INC: Heyman Investment Associates Owns 8.7% Equity Stake
------------------------------------------------------------
Heyman Investment Associates LP reported in a regulatory filing
with the Securities and Exchange Commission on October 14, 2005,
that it beneficially owned, in the aggregate, 28,254,200 shares of
MCI, Inc., common stock.

The MCI stake represents approximately 8.7% of 326,430,593 MCI
shares outstanding as of August 30, 2005.

About 9,096,700 shares are held by Heyvestco LLC while Heyman
Joint Venture holds 1,464,800 of the shares.

Heyman, owned by Samuel J. Heyman, is headquartered in Westport,
Connecticut.

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

                         *     *     *

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


MCLEODUSA INC: Court Okays Interim Use of Cash Collateral
---------------------------------------------------------
Before the bankruptcy filing, McLeodUSA Incorporated and its
debtor-affiliates borrowed money under two credit agreements
arranged by JPMorgan Chase Bank, N.A.:

                                              Amount Outstanding
    Credit Facility                           As of Petition Date
    ---------------                           -------------------
    Senior Prepetition Credit Agreement
    dated April 16, 2002                         $107,340,000

    Junior Prepetition Credit Agreement
    dated May 31, 2000                           $677,277,946

The Debtors' obligations under those agreements are secured by
first priority liens on substantially all of their assets.  All
of the Debtors' cash and other proceeds generated from the
Prepetition Collateral as of the Petition Date constitute cash
collateral of the Prepetition Lenders within the meaning of
Section 363(a) of the Bankruptcy Code.

Because the Debtors filed for bankruptcy, the Debtors can't touch
their lenders' cash collateral.  Section 363(c)(2) of the
Bankruptcy Code provides that the Debtors may not use, sell or
lease cash collateral unless their lenders consent or the Court
authorizes the Debtors' use of cash collateral.

By this motion, the Debtors ask the U.S. Bankruptcy Court for the
Northern District of Illinois for permission to use their lenders'
cash collateral.

Stanford Springel, chief restructuring officer of McLeodUSA,
relates that the Debtors need to use the Cash Collateral to pay
(i) present operating expenses including payroll, and (ii)
vendors to ensure a continued supply of services and materials
essential to the Debtors' continued viability.

"Absent [Court authority to use the Cash Collateral], I believe
the Debtors will be compelled to shut down their operations and
bring the Debtors' businesses to a halt.  In sum, the failure to
obtain authorization for the use of the Cash Collateral will be
fatal to the Debtors, and disastrous to their creditors," Mr.
Springel says.

As adequate protection for any diminution in the value of the
Prepetition Collateral, the Debtors and the Prepetition Lenders
have agreed that the Prepetition Lenders should be granted:

    (A) a lien junior to the liens under a postpetition financing
        agreement,

    (B) payment of current cash interest at the contractual non-
        default rate in respect of the senior of the two Credit
        Facilities,

    (C) payment of all fees and expenses of the agent and the
        lenders under the Credit Facilities,

    (D) after repayment of the postpetition financing facility,
        application of proceeds from asset sales:

           (1) to repayment of unpaid obligations under the senior
               of the two Credit Facilities,

           (2) to cash collateralize outstanding letters of
               credit, and

           (3) to the repayment of unpaid obligations under the
               junior of the two Credit Facilities, and

     (E) the usual and customary claims, priorities and other
         protections provided to prepetition secured creditors.

Under a consensual arrangement with the Lenders, the Debtors will
limit their use of cash collateral to amounts specified in a 13-
Week Budget.  A full-text copy of the Company's week-by-week 13-
Week Cash Flow Forecast through December 16, 2005, is available
at no charge at:

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

                          Interim Approval

Judge Squires permits the Debtors to use all Cash Collateral of
their prepetition secured lenders, except amounts held in an
Escrow Account.

The Court rules that the Prepetition Secured Lenders are entitled
to adequate protection of their interest in the Cash Collateral.
Accordingly, the Prepetition Secured Lenders are granted, among
other things, a replacement security interest in and lien on all
of the Collateral, a superpriority claim, and interest and fees.
The Prepetition Secured Lenders are permitted to retain expert
consultants and financial advisors at the Debtors' expense, which
consultants and advisors will be given reasonable access for
purposes of monitoring the Debtors' business and the value of the
Collateral.

Judge Squires will convene the Final Cash Collateral Hearing on
Dec. 15, 2005, at 10:00 a.m.

Headquartered in Cedar Rapids, Iowa, McLeodUSA Incorporated --
http://www.mcleodusa.com/-- provides integrated communications   
services, including local services in 25 Midwest, Southwest,
Northwest and Rocky Mountain states.  The Debtor and its
affiliates filed for chapter 11 protection on Oct. 28, 2005
(Bankr. N.D. Ill. Case Nos. 05-53229 through 05-63234).  Peter
Krebs, Esq., and Timothy R. Pohl, Esq., at Skadden, Arps, Slate,
Meagher and Flom, represent the Debtors in their restructuring
efforts.  As of June 30, 2005, McLeodUSA Incorporated reported
$674,000,000 in total assets and $1,011,000,000 in total debts.

McLeodUSA Inc. previously filed for chapter 11 protection on
January 30, 2002 (Bankr. D. Del. Case No. 02-10288).  The Court
confirmed the Debtor's chapter 11 plan on April 5, 2003, and
that Plan took effect on April 16, 2002.  The Court formally
closed the case on May 20, 2005.  (McLeodUSA Bankruptcy News,
Issue No. 2 Bankruptcy Creditors' Service, Inc., 215/945-7000).


MCLEODUSA INC: Disclosure Statement Objection Deadline is Dec. 2
----------------------------------------------------------------
On Oct.19, 2005, McLeodUSA Incorporated and its debtor-affiliates
mailed solicitation materials consisting of the Disclosure
Statement with Respect to the Joint Prepackaged Plan of
Reorganization of the Debtors, the Plan and an appropriate Ballot.

The Plan groups claims against and equity interests in the
Debtors into nine classes:

    Name of
     Class    Description                               Treatment
    -------   -----------                               ---------
      n/a     Administrative Expense Claims            Unimpaired

      n/a     Priority Tax Claims                      Unimpaired

    Class 1   Non-Tax Priority Claims                  Unimpaired

    Class 2   Other Secured Claims                     Unimpaired

    Class 3   General Unsecured Claims                 Unimpaired

    Class 4   Senior Prepetition Lender Claims           Impaired

    Class 5   Junior Prepetition Lender Claims           Impaired

    Class 6   Lease Rejection Claims                     Impaired

    Class 7   Equity Interests in
              Debtors' Subsidiaries                    Unimpaired

    Class 8   Old Preferred Stock Interests
              and Subordinated Claims                  Unimpaired

    Class 9   Old Common Stock Interests
              and Subordinated Claims                  Unimpaired

Seven classes of Claims and Interests were not solicited:

    (a) Unimpaired Claims in Class 1 (Non-Tax Priority Claims);
        Class 2 (Other Secured Claims); Class 3 (General Unsecured
        Claims); and Class 7 (Equity Interests in Debtors'
        Subsidiaries) because they are conclusively presumed to
        accept the Plan;

    (b) Class 6 (Lease Rejection Claims) because the Debtors are
        paying 100% of the Allowed Lease Rejection Claims and the
        Debtors are seeking relief to deem Class 6 to reject the
        Plan thereby relying on Section 1129(b)(2)(b)(i) of the
        Bankruptcy Code to confirm the Plan; and

    (c) Class 8 Old Preferred Stock Interests and Subordinated
        Claims and Class 9 Old Common Stock Interests and
        Subordinated Claims because these classes will retain and
        receive no property under the Plan and, therefore, are
        deemed to reject the Plan.

Thus, only holders of Class 4 Senior Prepetition Lender Claims
and Class 5 Junior Prepetition Lender Claims were entitled to
vote on the Plan.

Each Class voted to accept the Plan pursuant to Section 1126 of
the Bankruptcy Code and the Debtors believe those acceptances are
sufficient to confirm the Plan pursuant to Section 1129 of the
Bankruptcy Code.

Specifically:

    (1) 100% in amount and 100% in numbers of those Holders of
        Class 4 Senior Prepetition Lender Claims voting on the
        Plan voted to accept the Plan; and

    (2) 97% in amount and 97.3% in numbers of those Holders of
        Class 5 Junior Prepetition Lender Claims voting on the
        Plan voted to accept the Plan.

                          Combined Hearing

Accordingly, the Debtors request a single hearing, the Disclosure
Statement and Confirmation Hearing, to seek the Court's approval
of the Disclosure Statement and confirmation of the Plan.

The Debtors believe there is no reason to delay consideration of
the adequacy of the Disclosure Statement, the approval of the
Solicitation Procedures and the confirmation of the Plan.

Rule 3017(c) of the Federal Rules of Bankruptcy Procedure
provides that "[o]n or before approval of the disclosure
statement, the court . . . may fix a date for the hearing on
confirmation of the Plan."

Thus, Judge Squires sets the Disclosure Statement and
Confirmation Hearing on December 15, 2005, at 10:00 a.m.
(Prevailing Central Time).

                    Notices & Objection Deadline

Bankruptcy Rules 3017(a) and 2002(b) require that notice of at
least 25 days be given by mail to all creditors of the time fixed
for filing objections to approval of a disclosure statement or
confirmation of a plan of reorganization.

The Debtors intend to provide notice of the Disclosure Statement
and Confirmation Hearing by mail.

The Debtors will also publish a notice regarding the Disclosure
Statement and Confirmation Hearing in the national edition of The
Wall Street Journal, The New York Times and The Cedar Rapids
Gazette.

Holders of unimpaired, impaired and prepetition lender claims
will receive different notices regarding the treatment of their
claims.

The Disclosure Statement and Confirmation Hearing Notice also
will be served upon (i) the United States Trustee, (ii) the
Securities and Exchange Commission, (iii) the office of the
United States Attorney for the Northern District of Illinois
(Eastern Division), (iv) the District Director for the Internal
Revenue Service, and (v) counsel for the Prepetition Agents.

Objections to the Disclosure and Plan, if any, must be filed no
later than 4:00 p.m. on Dec. 2, 2005, and served on:

    (i) Counsel to the Debtors:

        Skadden, Arps, Slate, Meagher & Flom LLP
        333 West Wacker Drive
        Chicago, Illinois 60606-1285
        Attn: Timothy R. Pohl, Esq.

   (ii) Counsel to the Prepetition Agents:

        Davis, Polk & Wardwell
        450 Lexington Avenue
        New York, New York 10017
        Attn: Donald S. Bernstein, Esq.

  (iii) The Office of the United States Trustee
        227 West Monroe Street, Suite 3350
        Chicago, Illinois 60606

                 Class 6 Exempted from Solicitation

Judge Squires rules that the Debtors are not required to solicit
votes from the Holders of Class 6 Lease Rejection Claims.

The Debtors assert that while the Class 6 Lease Rejection Claims
are impaired, the Plan is fair and equitable because on the
Distribution Date each Holder of an Allowed Lease Rejection Claim
will be paid 100% of such claim.  "In addition, the Plan does not
unfairly discriminate, because Holders of Class 6 Lease Rejection
Claims, like Holders of Class 3 General Unsecured Claims, are
being paid the full amount of their claims, as allowed by the
Bankruptcy Code, in cash.  Therefore, even if the Holders of the
Class 6 Lease Rejection Claims voted to reject the Plan,
confirmation of the Plan is still permissible under section
1129(b)(2)(b)(i) of the Bankruptcy Code."

The Debtors explain that they chose not to solicit votes from
Holders of Class 6 Lease Rejection Claims prior to the Petition
Date because:

    (1) those claims, and the impairment of those claims, are a
        function of the Court authorizing the rejection of the
        leases, which by definition does not and cannot occur
        unless and until the Court authorizes the rejection of the
        leases; and

    (2) soliciting votes regarding a potential bankruptcy plan,
        thereby highlighting that a chapter 11 case is to be
        commenced soon, prior to a company actually being in
        Chapter 11, from a party not bound by confidentiality
        restrictions might jeopardize the Debtors' operations to
        the detriment of all stakeholders.

           Disclosure Statement & Plan Should be Approved

The Debtors submit that their Disclosure Statement contains
adequate information within the meaning of Section 1125 of the
Bankruptcy Code.

The Debtors point out that the Disclosure Statement is extensive
and comprehensive; it contains descriptions and summaries of,
among other things:

    (a) the Plan,

    (b) certain events preceding the commencement of these chapter
        11 cases,

    (c) claims asserted against the Debtors' estates,

    (d) securities to be issued under the Plan,

    (e) risk factors affecting the Plan,

    (f) a liquidation analysis setting forth the estimated return
        that creditors would receive in chapter 7,

    (g) financial information and valuations that would be
        relevant to creditors' determinations of whether to accept
        or reject the Plan, and

    (h) securities law and federal tax law consequences of the
        Plan.

The Debtors assert that the Disclosure Statement should be
approved.

Prior to the Disclosure Statement and Confirmation Hearing, the
Debtors will file a memorandum of law in support of confirmation
of the Plan demonstrating that the Plan satisfies each
requirement for confirmation and responding to objections to
confirmation, if any.

Headquartered in Cedar Rapids, Iowa, McLeodUSA Incorporated --
http://www.mcleodusa.com/-- provides integrated communications   
services, including local services in 25 Midwest, Southwest,
Northwest and Rocky Mountain states.  The Debtor and its
affiliates filed for chapter 11 protection on Oct. 28, 2005
(Bankr. N.D. Ill. Case Nos. 05-53229 through 05-63234).  Peter
Krebs, Esq., and Timothy R. Pohl, Esq., at Skadden, Arps, Slate,
Meagher and Flom, represent the Debtors in their restructuring
efforts.  As of June 30, 2005, McLeodUSA Incorporated reported
$674,000,000 in total assets and $1,011,000,000 in total debts.

McLeodUSA Inc. previously filed for chapter 11 protection on
January 30, 2002 (Bankr. D. Del. Case No. 02-10288).  The Court
confirmed the Debtor's chapter 11 plan on April 5, 2003, and
that Plan took effect on April 16, 2002.  The Court formally
closed the case on May 20, 2005.  (McLeodUSA Bankruptcy News,
Issue No. 2 Bankruptcy Creditors' Service, Inc., 215/945-7000).


MEDICAL TECHNOLOGY: Court Quashes Motion to Dismiss Ch. 11 Case
---------------------------------------------------------------
The Hon. Russell F. Nelms of the U.S. Bankruptcy Court for the
Northern District of Texas in Fort Worth denied Generation II
Orthodontics Inc. and Generation II USA Inc.'s request to dismiss
the chapter 11 case of Medical Technology, Inc.

Orthodontics and USA based their request for dismissal on
allegations that the Debtor had sought bankruptcy protection to
circumvent the posting of a supersedeas bond related to an award
for damages granted by the U.S. District Court for the Western
District of Washington, Seattle Division.

                  Patent Infringement Lawsuit

The Debtor is party to a patent infringement lawsuit filed by
Orthodontics and USA with the Seattle District Court.  In April
2005, a jury determined that the Debtor had willfully infringed on
the Generation companies' patents for certain medical devices and
awarded $3,386,145 in damages to the Generation companies.

Following the jury verdict, Orthodontics and USA filed a motion
seeking an award for enhanced damages, prejudgment interest and
additional attorney's fees.

In July 2005, the District Court affirmed the $3,386,145 judgment
awarded by the jury and awarded $1,561,615 in prejudgment interest
and $1,774.292 for attorneys' fees.  The District Court then
directed the Debtor and the Generation companies to submit a
proposed revised final judgment, reflecting an updated award for
attorneys' fees.  

The Debtor and the Generation Companies negotiated the appropriate
amount of attorneys' fees to be incorporated on the revised final
judgment and subsequently agreed to an updated award of $1,831,313
for attorneys' fees.     

Days before the agreed revised final judgment could be submitted
and entered in the District Court, the Debtor sought protection
from its creditors.

            The Generation Companies' Allegations

Jesse R. Pierce, Esq., at Howrey LLP, presented evidence
purportedly showing that the Debtor had filed its chapter 11 case
in bad faith.  Mr. Pierce pointed out that Medical Technology's
president admitted that:

     -- the Debtor sought bankruptcy protection to avoid posting a    
        supersedeas bond during the pendency of its appeal for an
        adverse judgment in the patent litigation;

     -- absent the adverse judgment, reorganization is not
        necessary and no significant reorganization is
        contemplated; and  

     -- the Debtor's business continues to expand and is
        profitable.

Headquartered in Grand Prairie, Texas, Medical Technology, Inc.,
dba Bledsoe Brace Systems -- http://www.bledsoebrace.com/home.asp  
-- manufactures and distributes orthopedic knee braces, ankle
braces, ankle supports, knee immobilizers, arm braces, sport
braces, boots, and walkers.  The Debtor filed chapter 11
protection on July 25, 2005 (Bankr. N.D. Tex. Case No. 05-47377).  
J. Robert Forshey, Esq., Jeff P. Prostok, Esq., and Julie C.
McGrath, Esq., at Forshey & Prostok, LLP, represent the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it estimated assets and debts between $10
million to $50 million.


MERITAGE HOMES: Moody's Upgrades Corporate Family Rating to Ba2
---------------------------------------------------------------
Moody's Investors Service raised the ratings of Meritage Homes
Corporation, including the corporate family rating to Ba2 from Ba3
and the rating on the existing issues of senior unsecured notes to
Ba2 from Ba3.  The ratings outlook is stable.

The stable ratings outlook reflects Moody's expectation that the
company will continue to maintain capital structure discipline
while choosing from among a myriad of expansion opportunities.

The upgrades acknowledge:

   * Meritage's dramatically improved credit profile since the
     time of its initial rating in May 2001;

   * its record of strong profitability and growth (with the
     company nearing its 18 consecutive year of record revenues
     and profits);

   * the current strength of its major markets (Arizona, Texas,
     California, and Las Vegas, Nevada);

   * the company's modest owned lot inventory; and

   * its conservative spec building practices.

At the same time, the ratings incorporate:

   * the financial and integration risks associated with an     
     acquisition-based growth strategy;

   * moderate size and geographic diversification compared to its
     peer group;

   * heavy reliance on options in general as well as on land
     banking options in particular; and

   * dual corporate structure in Arizona and Texas, each led by a
     co-chairman, that may give rise to potential inefficiencies.

The ratings affected are:

   * corporate family rating raised to Ba2 from Ba3;

   * $350 million of 6.25% senior unsecured notes
     due March 15, 2015 raised to Ba2 from Ba3; and

   * $130 million of 7% senior unsecured notes due May 1, 2014
     raised to Ba2 from Ba3.

The senior unsecured notes are guaranteed by Meritage's
subsidiaries.

Applying the Homebuilding Rating Methodology (a report dated
December 2004) to Meritage's metrics, Meritage:

   * outperforms its rating category in:

     -- interest coverage,
     -- return on assets,
     -- lot supply controlled,
     -- percentage of spec building in which it is engaged; and

   * it comes close to outperforming on debt leverage.  

Given its moderate size, however, it underperforms its rating
category in the market share and geographic diversity metrics, and
only modestly exceeds the tangible net worth threshold.

As of the third quarter ended September 30, 2005, Meritage's
capital structure consisted of:

   * $480 million of senior notes,
   * $151 million of bank debt,
   * $41 million of other debt (including model home leases), and
   * $762 million of book net worth.

On an as reported basis, total debt/total capitalization was
approximately 47%.  After adjusting for the company's pro rata
share of joint venture debt (as of June 30, 2005), total
debt/capitalization increased to 49%.  Adjusting further for the
modest amount of specific performance options that the company is
obligated to exercise, debt leverage edged up to a still
reasonably strong 49.2%.

Roughly 40% (by dollar value) of the company's owned and optioned
land inventory is financed with land bankers, i.e., financial
intermediaries that buy land on behalf of the company and then
option this land to the company.  Down payments for these options
are typically larger than for other options, and the total cost
for these options, given the return requirements of the land
bankers, may be higher than for owned land or more traditionally
optioned land.

Finally, for relationship reasons, there is always the possibility
that a homebuilder might be reluctant to walk away from land
banking options for fear of damaging the business association.  In
Meritage's case, the company has relationships with numerous land
bankers and is not dependent on one or a few.  Nor is the company
contractually obligated to exercise these land banking options.
Thus, while Moody's believes that land banking options may have
more ownership characteristics than more traditional lot options,
Moody's is not making adjustments to the balance sheet for them at
this time.

Going forward, consideration for further improvement in Meritage's
outlook and ratings will include:

   * its maintaining its strong financial performance while
     managing the financial and integration risks associated with
     its active acquisition policy;

   * growing its equity base further;

   * further diversifying its earnings base away from its four
     core markets; and

   * reducing its adjusted debt leverage (adjusted to take into
     account its lot option obligations and pro rata share of
     joint venture debt).

Future events that could potentially stress Meritage's ratings
include:

   * its significantly releveraging its balance sheet for share      
     repurchases or acquisitions;

   * taking a large impairment charge; or

   * having difficulty in integrating any acquisitions or start
     ups outside of its core markets.

Meritage Homes Corporation, based in Scottsdale, Arizona, and in
Plano, Texas, is a builder of single-family homes in:

   * Arizona,
   * Texas,
   * California, and
   * Las Vegas, Nevada; and

recently entered the:

   * Denver,
   * Colorado, and
   * Florida markets via acquisition.

Meritage's revenues and net income for the trailing twelve month
period ended September 30, 2005 were approximately $2.7 billion
and $206 million, respectively.


MESABA AVIATION: Asks Court to Expand Mercer Management's Tasks
---------------------------------------------------------------
As reported in the Troubled Company Reporter on Oct. 20, 2005,
Mesaba Aviation, Inc., asked the U.S. Bankruptcy Court for the
District of Minnesota for authority to continue Mercer's
employment as its consultant pursuant to the terms of an
engagement letter dated October 8, 2005.

The Debtor engaged Mercer prepetition to provide financial
analytical support in connection with an out-of-court
restructuring and, to the extent warranted, assist the Debtor's
preparation for a Chapter 11 filing.

Initially, the Debtor believed that it only required restructuring
and financial advice from Mercer.  Now that the Debtor has
commenced its Chapter 11 case, Mesaba President and Chief
Operating Officer John G. Spanjers says Mercer's services are
needed not only to provide the Debtor with airline restructuring
advice and financial assistance but also with executory contract
review and sourcing services.

The Debtor seeks the Court's authority to:

   a. expand the scope of Mercer Management Consulting, Inc.'s
      engagement;

   b. amend the fee structure to be paid to Mercer; and

   c. respond to the issues raised by Habbo G. Fokkena, the
      United States Trustee for Region 12.

Pursuant to a revised Engagement Letter, Mercer will assist:

   -- with the Debtor's development and implementation of a
      restructuring office, the development of the overall
      restructuring plan and revised business plan, and the
      development of the plan of reorganization;

   -- with the Debtor's development of interactive financial
      models, development of financials which model restructuring
      scenarios, development of the financial models necessary to
      development and confirmation of a plan of reorganization
      and of the overall financial plan; and

   -- the Debtor in connection with supply base restructuring,
      review and analysis of executory contracts, negotiation of
      key contracts, and claims analysis.

Based on Mercer's prepetition involvement with the Debtor, Mercer
is uniquely qualified to provide the services, Mr. Spanjers
asserts.  The Debtor does not believe that the services will be
duplicative of those provided by other advisors retained in its
Chapter 11 case, inasmuch as Mercer will carry out unique
functions and will use reasonable efforts to coordinate with other
retained professionals to avoid the unnecessary duplication of
services.

Specifically, the Debtor seeks the Court's permission to employ
Mercer only in accordance with the Revised Engagement Letter.   

The Debtor asks Judge Kishel to disregard the prior Engagement
Letter and related attachments.

The terms of the Revised Engagement Letter, Mr. Spanjers attests,
were negotiated by the Debtor and Mercer at arm's-length and in
good faith.

Mercer has agreed that, notwithstanding its general firm policy to
apply a monthly fee to its engagements, it will bill the Debtor on
an hourly charge basis.  The rates charged by Mercer's personnel
range from $100 to $668 per hour.  The Debtor will pay Mercer's
reasonable out-of-pocket expenses incurred in connection with any
matters related to its employment.

The Revised Engagement Letter provides that the Debtor has agreed,
subject to certain exceptions, to limit and indemnify Mercer and
its personnel from liability related to its engagement.

Mercer director Peter Walsh assures the Court that Mercer does not
have any connection with potential parties-in-interest in matters
related to the Debtor or the Chapter 11 proceedings.

According to Mr. Walsh, Mercer currently serves a number of
clients that are among the Debtor's list of Potential Parties-in-
Interest.  However, because of its responsibility to maintain
strict client confidentiality, Mercer cannot disclose the services
performed, or even the fact that services were provided for those
clients.

Mr. Walsh tells Judge Kishel that if additional disclosure is
required of Mercer as a condition to its employment by the
Debtor, which runs afoul of those responsibilities, Mercer may be
required to withdraw from the representation.  Based on a review
of Mercer's books and records, and except with respect to certain
entities, Mr. Walsh attests that none of those services is related
to the Debtor or its Chapter 11 case.

The U.S. Trustee has asked Mercer to disclose relationships, if
any, that the Mercer engagement team may have with the Office of
the U.S. Trustee.  According to Mr. Walsh, Mercer does not have a
current listing of the employees of the U.S. Trustee Office.  
Mercer, however, has inquired of the members of the engagement
team whether they have a relationship with any employee of the
U.S. Trustee Office.  Based on the responses received, Mr. Walsh
says no member of the Mercer engagement team has any such
relationship.

Mesaba Aviation, Inc., d/b/a Mesaba Airlines,--
http://www.mesaba.com/-- operates as a Northwest Airlink  
affiliate under code-sharing agreements with Northwest Airlines.  
The Company filed for chapter 11 protection on Oct. 13, 2005
(Bankr. D. Minn. Case No. 05-39258).  Michael L. Meyer, Esq., at
Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed total assets of $108,540,000 and
total debts of $87,000,000. (Mesaba Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


MESABA AVIATION: Wants to Assume Clearinghouse Agreement
--------------------------------------------------------
Mesaba Aviation Inc., doing business as Mesaba Airlines, is party
to an Associate Membership Agreement with Airline Clearing House,
Inc., dated July 23, 1980.  

According to Michael L. Meyer, Esq., at Ravich Meyer Kirkman
McGrath & Nauman, P.A., in Minneapolis, Minnesota, the
Clearinghouse Agreement allows the Debtor to efficiently settle
accounts with other airlines, incurred or generated in the
ordinary course of the Debtor's business.

Mr. Meyer explains that the airline business is based on a vast
global network of agreements and arrangements that govern
virtually all aspects of air travel and airline operations.  
Without agreements for coordination between airlines and airline
services, efficient service by the domestic and international
airline industry would be virtually impossible.  Among others,
these agreements facilitate basic levels of cooperation among
airlines with respect to important activities, like making
reservations and transferring passengers, freight, baggage and
mail.  These agreements also provide for fare publication,
appointment of travel agencies, and foreign currency clearing
procedures.

The Clearinghouse Agreement, Mr. Meyer says, allows the Debtor to
effectuate the transactions under these agreements.

The automatic stay provisions of Section 362 of the Bankruptcy
Code required ACH to suspend the Debtor from its status as an
Associate Member and to exclude the Debtor from settlements
thereafter occurring.

Mr. Meyer says ACH is willing to revoke the Debtor's suspension
from the status of Associate Member and to permit the Debtor to
resume participation in the periodic inter-carrier settlements,
but only if the Debtor obtains permission to assume all
obligations under the contract, including its obligations to
settle inter-carrier accounts arising from the provision of both
transportation and non-transportation services under the ACH rules
and regulations.

The Debtor asserts that any interruption or cessation of its
ability to make and receive payments through the Clearinghouse
could precipitate a disruption in its operation, and could have a
material adverse effect on its estate.

Thus, the Debtor seeks the U.S. Bankruptcy Court for the District
of Minnesota's permission to assume the Clearinghouse Agreement.

The Debtor makes it clear that it is not:

   -- requesting authority to assume the obligations owing to, or
      agreements with, the third parties whose claims are
      processed through the Clearinghouse Agreements; and

   -- agreeing or otherwise obligating itself to pay any
      prepetition claims to the third parties that are, or would
      otherwise be, processed through the Clearinghouse
      Agreement, except for the undisputed prepetition claims
      that the Debtor otherwise expressly agrees to pay in
      accordance with a Court order.

The Clearinghouse Agreement, Mr. Meyer assures the Court, does not
impose any material economic burdens on the Debtor's estate and is
terminable upon notice by the Debtor.

The Debtor believes that it is current with respect to payments
under the Clearinghouse Agreement and, therefore, is not required
to provide adequate assurance of its future performance under the
Agreement.  In this regard, ACH has proposed to execute a
stipulation with the Debtor clarifying each party's obligations in
connection with the assumption of the Agreement.

The Clearinghouse requires that the Debtor post a $1,000 deposit.
The Debtor currently has that deposit in its account with
JPMorgan Chase, ACH's designated bank.  To comply with the
Stipulation, the Debtor asks the Court to modify the automatic
stay to allow ACH and the Debtor to perform under the
Clearinghouse Agreement, including the use of the deposit.

Mr. Meyer notes that the services provided by ACH under the
Clearinghouse Agreement are the equivalent of industry-wide
"utility" services for which there is no readily available
alternative.  Therefore, it is vitally important to the Debtor's
business and must be assumed, Mr. Meyer maintains.

Mesaba Aviation, Inc., d/b/a Mesaba Airlines,--
http://www.mesaba.com/-- operates as a Northwest Airlink  
affiliate under code-sharing agreements with Northwest Airlines.  
The Company filed for chapter 11 protection on Oct. 13, 2005
(Bankr. D. Minn. Case No. 05-39258).  Michael L. Meyer, Esq., at
Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed total assets of $108,540,000 and
total debts of $87,000,000. (Mesaba Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc., 215/945-7000)


MILLIPORE CORP: Moody's Reviews $100 Million Notes' Ba1 Rating
--------------------------------------------------------------
Moody's Investors Service placed the ratings of Millipore
Corporation under review for possible upgrade reflecting an
improvement in their financial flexibility over the past two
years.  The rating agency noted that free cash flow from
operations expanded to over $100 million at the end of 2004 from
$28 million at the end of 2002.  During the same period, total
outstanding debt has declined to $147 million from $334 million;
total outstanding debt at the end of September 2005 was
$100 million.

Since Moody's anticipates that the company will generate at least
$165 million in operating cash flow in 2005, the free cash flow to
adjusted debt ratio will expand to 25% at the end of the year, up
from a 13% ratio at the end of 2003.  Further, despite an
accelerated pace of acquisitions, Moody's anticipates that the
company's credit metrics will continue to improve based on solid
growth in the core business and higher free cash flow over the
next few years.

These ratings were placed under review for a possible upgrade:

   * $100 Million 7.5% Senior Unsecured Notes due 2007 at Ba1
   * $300 Million Shelf Registration at (P)Ba1
   * Corporate Family Rating at Ba1

Moody's rating review will primarily focus:

   * on the company's strategy to be a leading bioscience and
     bioprocess provider for the healthcare industry; and

   * its ability to produce higher cash flow over the next few
     years.

The major factors that Moody's will study are:

   * new product introductions,
   * potential acquisitions,
   * global manufacturing consolidation,
   * the cost structure, and
   * working capital utilization.

Moody's will also evaluate the potential subordination of current
debt caused by subsidiaries' borrowing to repatriate international
profits under the American Jobs Creation Act.

Moody's expects that expansion of the service and product
platform, re-invigoration of research and development and the
introduction of new products and entry into new geographic markets
will result in high single digit to low double digit constant
currency organic revenue growth.  The contribution from
acquisitions, higher gross margins from the consolidation of
manufacturing plants and the outsourcing of some low-margined
products, and greater operating efficiency emanating from the new
organizational structure will lead to expansion in margins and
operating cash flow.

According to Moody's, the major risk to the company's enhanced
financial flexibility is the possibility of a more aggressive
acquisition strategy.  In developing its forecasts, Moody's has
assumed that the Millipore will complete several acquisitions over
the next few years and finance them with a combination of cash and
additional debt.  Based on those assumptions and more conservative
projections for the base business, the free cash flow to debt
ratio will drop below 20% in 2006 but will rebound to over 25% in
2007.  As a result, even under a stressed scenario, the company
will be able to maintain credit metrics indicative of an
investment grade company.

Moody's also notes that a potential repatriation of $500 million
will improve the financial flexibility of the company.  The extra
cash will enable the company to fund:

   * research and development,

   * working capital,

   * capital expenditures, and

   * other operating expenses while pursuing a more aggressive
     growth strategy.

Millipore, headquartered in Billerica, Massachusetts, is a leading
bioprocess and bioscience products and services company, organized
into two divisions.  The Bioprocess division offers solutions that
optimize development and manufacturing of biologics.  The
Bioscience division provides high performance products and
application insights that improve laboratory productivity.

The Company employs approximately 4,850 people worldwide and
posted revenues of approximately $883 million in 2004


MIRANT CORP: Citibank & Wachovia Out of Creditors Committee
-----------------------------------------------------------
George F. McElreath, Assistant United States Trustee for Region
6, reports that Citibank, N.A., and Wachovia Securities are no
longer members of the Official Committee of Unsecured
Creditors appointed in the chapter 11 cases of Mirant Corporation
and its debtor-affiliates.

As of October 12, 2005, the Mirant Committee's members are:

     1. Hypovereins Bank
        150 East 42nd Street
        New York, NY 10017-4679
        Attn: Lori Ann Curnyn
        Tel:(212) 672-5935
        Fax: (212) 672-5908
        loriann_curnyn@hvbamericas.com

     2. Appaloosa Management, LP
        26 Main Street, 1st Floor
        Chatham, NJ 07928
        Attn: Ronald Goldstein
        Tel: (973) 701-7000
        Fax: (973) 701-7055
        R.Goldstein@amlp.com

     3. Deutsche Bank AG
        60 Wall Street
        New York, NY 10019
        Attn: Mark B. Cohen
        Tel: (212) 250-6038
        Fax: (212) 797-5695
        mark.b.cohen@db.com

     4. HSBC Bank USA
        452 Fifth Avenue
        New York, NY 10018
        Attn: Sandi Horwitz
        Tel: (212) 525-1358
        Fax: (212) 525-1300 fax
        sandra.e.horwitz@us.hsbc.com

     5. Law Debenture Trust Company of New York
        767 Third Avenue
        New York, NY 10022
        Attn: Daniel Fisher
        Tel: (212) 750-6474
        Fax: (212) 750-1361
        daniel.fisher@lawdeb.com

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


MIRANT CORP: Lenders Consent to Extend DIP Maturity to Jan. 31
--------------------------------------------------------------
Mirant Corporation and its debtor-affiliates have used the
$500,000,000 DIP Financing Facility principally for the purpose of
issuing letters of credit in support of the Debtors' day-to-day
commercial operations.

Ian T. Peck, Esq., at Haynes and Boone, LLP, in Dallas, Texas,
relates that as of October 19, 2005, the Debtors had
approximately $63,000,000 in letters of credit outstanding and
issued under the DIP Facility.

Pursuant to the terms of the DIP Credit Agreement, the DIP
Facility matures on November 5, 2005.

The Debtors are currently in the process of soliciting their
creditors' and equity interest holders' votes to accept or reject
their Plan of Reorganization.  The Confirmation hearing is set to
commence on December 1, 2005.  As a result, the Debtors
anticipate that, if accepted, the Plan will be consummated
shortly thereafter.

Absent an amendment, the DIP Facility will mature prior to the
Debtors' emergence from chapter 11 protection.  Accordingly, the
Debtors must either extend the term of the DIP Facility or obtain
alternative sources for liquidity.

After acquiring the consent of the Lenders and General Electric
Capital Corporation, as Agent, the Debtors sought and obtained
Court approval amending the DIP Facility to extend the maturity
date to January 31, 2006.

The Debtors believe that continued access to the DIP Facility
will provide, among other things, a level of assurance to their
counterparties that the Debtors will be able to continue
operating while in the chapter 11 environment.  In addition,
other than the continued cost of the credit, the Debtors will not
incur any additional fees and expenses, including amendment,
waiver or extension fees, associated with the Amendment, other
than fees of Lenders' counsel.

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


MIRANT CORP: Mackay Shields Resigns from MAGi Creditors Committee
-----------------------------------------------------------------
Pursuant to Section 1102(a)(1) of the Bankruptcy Code, William T.
Neary, U.S. Trustee for Region 6, informs the U.S. Bankruptcy
Court for the Northern District of Texas that Mackay Shields
Financial resigned as member of the Official Committee of
Unsecured Creditors of Mirant Americas Generation, LLC.

The MAGi Committee currently consists of:

      1. California Public Employees Retirement System
         Lincoln Plaza
         400 P Street
         Sacramento, CA 95814
         Attn: Mike Claybar
         Tel: (916) 795-3396
         Fax: (916) 326-3330
         Mike_Claybar@calpers.ca.gov

      2. Elliott Associates, L.P.
         712 Fifth Avenue, 36th Floor
         New York, NY 10019
         Attn: Ivan Kristicevic
         Tel: (212) 506-2999
         Fax: (212) 974-2092
         Ivan@elliottmgmt.com

      3. Wells Fargo Bank Minnesota, National Association
         MAC N9303-120
         Sixth and Marquette Minneapolis, MN 55479
         Attn: Thomas M. Korsman
         Tel: (612) 466-5890
         Fax: (612) 667-9825 fax
         thomas.m.korsman@wellsfargo.com

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


NABI BIOPHARMA: Botched Vaccine Dev't Cues S&P to Put Neg. Outlook
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Boca
Raton, Florida-based Nabi Biopharmaceuticals to negative from
stable.  Ratings on the company, including the 'B' corporate
credit rating, were affirmed.  The outlook change is in response
to the company's announcement that it is halting the development
of StaphVAX, a vaccine against staph infection, and has withdrawn
its European Union marketing approval application.

StaphVAX was Nabi's lead development candidate and held high sales
potential.  The company planned to file a biological license
application in the U.S. for the vaccine by the end of 2005 and was
awaiting marketing approval in the European Union.  However, data
from a confirmatory Phase III clinical trial indicated that
StaphVAX failed to meet its primary endpoint.  Nabi has also
halted development on Altastaph, another product for preventing
and treating staph infections, and is reexamining the clinical
data.

"Ratings on Nabi reflect the company's narrow business focus as a
niche developer of biopharmaceutical products and vaccines, as
well as its limited cash flow generating ability," said Standard &
Poor's credit analyst Arthur Wong.  "The prospective loss of
StaphVAX leaves the company with no significant high-potential
late-stage prospects.  These negative factors are only partially
offset by the modest sales growth of Nabi's products and its
current adequate liquidity."

Nabi focuses on the development of treatments mainly for
infectious and autoimmune diseases.  The company's main products
are Nabi-HB and PhosLo, which collectively account for an
overwhelming majority of sales.  Nabi's distribution agreement
with Cangene Corp. on WinRho SDF in the U.S. ended in March 2005.


NATIONSLINK FUNDING: Fitch Holds C Rating on $5.3M Class J Certs.
-----------------------------------------------------------------
NationsLink Funding Corp.'s commercial mortgage pass-through
certificates, series 1998-1, are upgraded by Fitch Ratings:

     -- $48.5 million class D certificates to 'AA+' from 'AA'.

In addition, Fitch affirms these classes:

     -- $240 million class A-3 'AAA';
     -- Interest-only class X-1 'AAA';
     -- Interest-only class X-2 'AAA';
     -- $53.6 million class B 'AAA';
     -- $56.1 million class C 'AAA';
     -- $51 million class F 'BBB-';
     -- $10.2 million class G 'BB+';
     -- $25.5 million class H 'B';
     -- $5.3 million class J remains at 'C'.

Fitch does not rate class E. Class K has been reduced to zero due
to losses, while classes A-1 and A-2 have paid off in full.

The upgrade reflects the increased credit enhancement to the
investment grade classes as a result of additional paydown.  As of
the October 2005 distribution date, the pool's aggregate
certificate balance has been reduced 48% to $515.8 million from
$1.02 billion at issuance.  To date, the trust has realized $31.1
million in losses.

Five loans are currently in special servicing. The largest
specially serviced asset is a hotel located in Kissimmee, FL. The
loan continues to perform under a forbearance agreement.  The
second largest specially serviced asset is an office property
located in Cambridge, Massachusetts and is currently 60 days
delinquent.  The borrower was attempting to refinance the loan,
but the refinancing fell through.  The special servicer is
proceeding with a deed-in-lieu of foreclosure.

The three largest loans in the deal are located in Florida.  Fitch
has confirmed with the master and special servicers that the two
largest loans were not located within the affected areas of
Hurricane Wilma and therefore the properties did not sustain
damage.  The master servicer has contacted the borrower on the
status of the third largest loan, located in Miami, Forida, and is
awaiting a response.

In addition, one loan has reported moderate damage by Hurricane
Katrina.  The loan is secured by a multifamily property located in
Metaire, Louisiana.  Fitch will continue to closely monitor the
performance of this loan.


NEW WORLD: Sept. 27 Balance Sheet Upside-Down by $125.7 Million
---------------------------------------------------------------
New World Restaurant Group, Inc. (Pink Sheets: NWRG.PK) reported
continued improvements in comparable store sales, total revenues,
and cash flow from operations during the third quarter of fiscal
2005.

Total revenues increased 4.0% to $94.8 million during the 13 weeks
ended Sept. 27, 2005, compared to $91.2 million in the third
quarter of 2004.  Retail sales grew 3.7% to $87.9 million, or
92.8% of total revenues, from $84.8 million, or 93.0% of total
revenues, for the year earlier quarter.

Comparable store sales in company-owned restaurants grew by 5.9%
over the corresponding quarter of 2004.  The improvement reflected
a 5.5% increase in average check size and a 0.4% gain in
transactions -- the second consecutive quarter of year-over-year
increases in transactions.

During the current quarter, the company's advertising and
marketing expenses increased 100% or $1.5 million over the
comparable quarter in 2004.  Expenses in the 2005 quarter included
a full campaign supporting the summer's "Taste of the Tropics"
promotion, as well as preproduction and initial media launch for
the new "Anything but Routine" breakfast campaign.  Expenses in
the 2004 comparable quarter represented preproduction costs and
initial media for advertising campaigns that predominately ran in
the fourth quarter of 2004.  Additionally, the heat wave
experienced throughout the summer resulted in an increase of
$400,000 in utility costs compared to the comparable 2004 quarter.
Due to these increased expenses, gross profit declined $400,000 to
$15.9 million, or 16.7% of revenues, compared to $16.3 million, or
17.8% of revenues, in the 2004 quarter.  Positive performance in
store level operations offset the majority of these increased
expenses.

General and administrative expenses increased 5.0% to $8.9
million, or 9.4% of revenues, compared to $8.4 million, or 9.3% of
revenues, a year earlier.  The increase was primarily due to
$300,000 million in bonuses payable to corporate staff and
management in connection with improved operating performance.  
Depreciation and amortization expense, which is included in income
from operations, decreased 17.2% to $5.8 million, from $7.0
million in the year earlier quarter.  The decrease is partly due
to a portion of New World's asset base becoming fully depreciated,
as well as a correction of an overstatement in depreciation
expense from the previous two quarters of approximately $600,000.

Income from operations for the third quarter increased 68.3% to
$885,000 from $526,000 a year earlier.  In addition to the factors
listed above, results in the 2005 quarter reflected impairment
charges of approximately $200,000 and an approximate $100,000 loss
on the sale, disposal or abandonment of assets.  Operating income
in the 2004 quarter reflected $400,000 in impairment charges,
partially offset by an approximate $100,000 million benefit
arising from a net gain on the sale of assets and an adjustment to
integration and reorganization costs.

New World's operations generated net cash from operations of $2.8
million during the first nine months of 2005, compared to
consuming cash of $418,000 a year earlier.  At the end of the
third quarter, the company's cash and cash equivalents increased
approximately $5.0 million to $6.8 million, compared to $1.9
million a year earlier.  Net expenditures for capital equipment
during the first nine months of 2005 increased $200,000 to $5.7
million, compared to $5.5 million in the comparable 2004 period.

Commenting on the results, New World CEO Paul Murphy said: "We are
very pleased to report continued improvement in restaurant sales
and operating results, and especially the second consecutive
quarter of increased retail transactions.  Moreover, comparable
store sales have now shown year-over-year increases for four
straight quarters.  The continued gains in customer traffic in our
company operated locations strongly indicate that our introduction
of new menu items and ongoing improvements in restaurant
operations are proving attractive to consumers in an intensely
competitive climate.  Our increases in revenue and cash flow are
primarily the result of this increase in retail sales."

New World reported a net loss of $4.8 million in the third quarter
of 2005, compared to a net loss of $5.0 million a year earlier.
Included in the net loss for the third fiscal 2005 period were the
non-cash charges aggregating $300,000 associated with impairments
and disposal of assets.  Additionally included in the third
quarter of 2005 is a correction of an overstatement in
depreciation expense from the previous two quarters of
approximately $600,000.  The fiscal 2004 quarter's net loss
included non- cash impairment charges, net gains from the sale of
assets and adjustments of integration and reorganization costs,
also aggregating $300,000.  The net losses also reflected net
interest expense of $5.8 million in the most recent quarter and
$5.7 million a year earlier.

For the year to date, total revenues increased 3.1% to $285.2
million from $276.5 million in the first nine months of 2004.
Comparable store sales rose 5.6%, which consisted of a 6.0%
increase in the average check, partially offset by a 0.3% decrease
in transactions.

Gross profit margin for the nine months improved to 18.3% from
17.8% a year earlier, while general and administrative expenses
increased 6.3% to $26.9 million, or 9.4% of total revenues,
compared to $25.3 million, or 9.1% of revenues, in the same period
of 2004.  Depreciation and amortization expense decreased to $19.6
million for the first nine months of 2005 from $20.9 million a
year earlier.

Income from operations for the first nine months of 2005 totaled
$4.0 million, compared to $2.0 million in the year earlier period.
Results in 2005 included $1.5 million in impairment charges and
other related costs, and a $300,000 loss on the sale, disposal or
abandonment of assets.  Results for the first nine months of 2004
included a $1.4 million loss on the sale, disposal or abandonment
of assets, and $400,000 in impairment charges and other related
costs, partially offset by a $800,000 benefit from the reversal of
a prior accrual for integration and reorganization costs.

After including net interest expense of $17.5 million, New World's
net loss for the first three quarters of 2005 was $13.3 million,
or $1.35 per basic and diluted share.  This compared with a net
loss of $15.2 million, or $1.56 per share for the same period of
2004, which reflected $17.4 million in net interest expense.

New World chief financial officer Richard P. Dutkiewicz said the
company continues to experience improvements in cash flow from
operations, a key performance indicator, with this measurement now
increasing for eight consecutive quarters.  Mr. Dutkiewicz
believes such cash flow will be adequate to fund operating costs.
As noted earlier, the company has used $5.8 million of cash to
date in 2005 for new and remodeled restaurants and to meet
interest payments of $20.8 million on the $160 million notes.
Historically, Mr. Dutkiewicz noted, New World's fourth quarter is
the strongest quarter for generating cash due to seasonality and
gift card promotions.

                      Debt Refinancing

Mr. Dutkiewicz added that the company is exploring the possibility
of refinancing its $160 Million Notes and AmSouth Revolver with
Bear Stearns, after market conditions led to a temporary
suspension of such activities earlier this year.  "With market
conditions appearing to have improved, we are reviewing our
options regarding the refinancing with Bear Stearns," Mr.
Dutkiewicz said.  "We believe that refinancing our debt at more
favorable interest rates could increase our letter of credit
capacity, reduce interest expenditures and provide additional
flexibility for future store growth."

New World Restaurant Group, Inc. is a leading company in the
casual restaurant industry.  The company operates locations
primarily under the Einstein Bros. and Noah's New York Bagels
brands and primarily franchises locations under the Manhattan
Bagel and Chesapeake Bagel Bakery brands.  As of Sept. 27, 2005,
the company's retail system consisted of 643 locations, including
439 company- owned locations, as well as 137 franchised and 67
licensed locations in 34 states, and the District of Columbia.  
The company also operates a dough production facility.

At Sept. 27, 2005, New World Restaurant Group, Inc.'s balance
sheet showed a $125,705,000 stockholders' deficit compared to a
$112,483,000 deficit at Dec. 28, 2004.


NEXSTAR BROADCASTING: Posts $8.9 Million Net Loss in Third Quarter
------------------------------------------------------------------
Nexstar Broadcasting Group, Inc. (NASDAQ: NXST) reported financial
results for the third quarter ended Sept. 30, 2005.

Total net revenue for the 2005 third quarter was $54.0 million, a
decrease of 9.9% from net revenue of $59.9 million in the 2004
third quarter.  Nexstar's guidance, issued on Aug. 2, 2005, was
for total net revenue in the 2005 third quarter of approximately
$52.0 to $53.0 million.

For the three months ended Sept. 30, 2005, Nexstar reported net
loss of $8,887,000 compared to a net loss of $5,702,000 for the
same period in 2004.

Perry A. Sook, Chairman, President and Chief Executive Officer of
Nexstar Broadcasting Group, Inc., commented, "In the third
quarter, Nexstar performed slightly ahead of its net revenue
guidance, despite the challenging advertising environment, which
included continued weakness in the automotive category and the
absence of Olympic related advertising on our NBC affiliates.  We
partially offset these negative industry trends by attracting new
advertisers to our stations and increasing the amount of project
revenue that our stations generate.  Year-over-year quarterly
revenue comparisons also reflect the absence of approximately $6.1
million of revenue related to political advertising.

"We continue to reposition the Company for a return to growth in
2006 by pre-selling advertising in advance of the Winter Olympics,
expanding project revenue programs, and launching additional local
news broadcasts in several of our markets.

"We are also making progress in retransmission consent
negotiations across our markets.  Last month, we completed a
retransmission consent agreement with Cox Communications, one of
the cable industry's largest operators, spanning a combined 21
stations across 12 markets.  Although the confidentiality
provisions limit Nexstar and Cox from discussing publicly the
financial aspects of this agreement, we are pleased to have
reached an economic agreement that is acceptable to both parties.
We look forward to announcing additional agreements in the periods
ahead."

Depreciation and amortization was $10.6 million in the third
quarter of 2005, compared to $10.4 million in the third quarter of
2004.  The higher depreciation and amortization expense for the
third quarter of 2005 is primarily the result of the amortization
of intangible assets from newly acquired television station WTVO,
partially offset by assets at certain stations becoming fully
amortized.

Interest expense in the third quarter of 2005 was $11.4 million,
compared to $13.1 million for the same period in 2004.  The
decrease is primarily attributed to the April 2005 redemption of
all $160.0 million in aggregate principal amount of our
outstanding 12% Senior Subordinated Notes due April 1, 2008,
partially offset by the April 2005 issuance of the $75.0 million
in the aggregate principal amount of 7% Senior Subordinated Notes
due 2014, higher interest rates and a greater amount of debt
outstanding incurred in 2005 under Nexstar and Mission
Broadcasting Inc.'s senior credit facilities.

Capital expenditures in the third quarter of 2005 were $3.5
million, compared to $3.3 million in the third quarter of 2004.
Cash interest for the third quarter of 2005 was $8.4 million,
compared to $10.3 million for the same period in 2004.  Cash
interest excludes non-cash interest related to amortization of
debt financing costs and accretion of the discount on Nexstar's
11.375% senior discount notes and 7% senior subordinated notes.

                  Liquidity and Cash Flow

Free cash flow for the 2005 third quarter was $1.9 million,
compared to $5.7 million in the year-ago quarter.  The decrease in
free cash flow for the 2005 third quarter is primarily due to a
decline in political advertising revenue compared to the year-ago
third quarter.

At Sept. 30, 2005, the Company's total debt, which reflects a
repayment of $6.5 million under Nexstar's credit facility, was
approximately $644.5 million and cash balances were $5.8 million.

Nexstar Broadcasting, Inc., a subsidiary of the Company, and
Mission Broadcasting, Inc., are borrowers under senior secured
credit facilities.  As defined per the credit agreement,
consolidated total debt was $540.2 million at Sept. 30, 2005, net
of cash on hand, which resulted in a leverage ratio as defined per
the credit agreement of 7.4x, compared to a permitted leverage
covenant of 7.5x under the new credit facilities.  Covenants under
the credit facilities exclude Nexstar Finance Holdings, Inc.'s
11.375% notes, which have accreted to $98.5 million as of
Sept. 30, 2005.

                   Amended Credit Facility

Subsequent to the close of the quarter, Nexstar Broadcasting,
Inc., an indirect operating subsidiary of Nexstar, and Mission
Broadcasting, Inc., borrowers under the senior secured credit
facilities, successfully amended the facilities to adjust certain
financial covenants under the agreements.  Pursuant to the
amendments, the maximum consolidated total and senior leverage
ratios (as defined per the credit agreements) for Nexstar and
Mission were adjusted to 8.5x and 5.5x times, respectively, with
quarterly reductions starting in the period commencing
Jan. 1, 2006.  As of Sept. 30, 2005, Nexstar had $175.8 million
outstanding under its facility, while Mission had $172.7 million
outstanding under its facility.

   Retransmission Consent Agreement with Cox Communications

On Oct. 20, 2005, Cox Communications, Inc., Nexstar Broadcasting
Group, Inc. and Mission Broadcasting, Inc. signed a retransmission
consent agreement for analog and digital carriage rights.  The
agreement covers 12 Nexstar stations and 9 Mission stations
serving the following Designated Market Areas:

    * Abilene-Sweetwater, San Angelo, Lubbock, Amarillo, Odessa-
      Midland and Beaumont-Port Arthur, Texas;

    * Shreveport, Louisiana;

    * Fort Smith, Little Rock and Monroe-El Dorado, Arkansas;

    * Springfield and Joplin, Missouri; and

    * Pittsburg, Kansas.

Pursuant to the new agreement, all affected Nexstar and Mission
stations have returned to their respective cable systems.

Nexstar Broadcasting Group owns, operates, programs or provides
sales and other services to 47 television stations in 27 markets
in the states of Illinois, Indiana, Maryland, Missouri, Montana,
Texas, Pennsylvania, Louisiana, Arkansas, Alabama and New York.
The Company's television station group includes affiliates of NBC,
CBS, ABC, Fox and UPN, and reaches approximately 7.0% of all U.S.
television households.

                         *     *     *

As reported in the Troubled Company Reporter on Aug. 24, 2005,
Standard & Poor's Ratings Services lowered its ratings on Nexstar
Broadcasting Group Inc., including lowering its long-term
corporate credit rating to 'B' from 'B+', because of the company's
weaker-than-expected operating performance and high leverage.  The
outlook is stable.  Total debt, including debt obligations of
Mission Broadcasting that are guaranteed by Irving, Texas-based
Nexstar, totaled approximately $648 million at June 30, 2005.
     
"The downgrade recognizes that softer-than-expected advertising
demand gives us greater concern that the company will not achieve
the near-term leverage reduction that we had used in our previous
rating assumptions," said Standard & Poor's credit analyst Alyse
Michaelson Kelly.  The shortfall in ad demand recently prompted
Nexstar to lower its full-year 2005 revenue guidance.


NORTEL NETWORKS: Board Reports Preferred Share Dividends
--------------------------------------------------------
The board of directors of Nortel Networks Limited reported a
dividend on each of the outstanding Cumulative Redeemable Class A
Preferred Shares Series 5 (TSX:NTL.PR.F) and the outstanding Non-
cumulative Redeemable Class A Preferred Shares Series 7
(TSX:NTL.PR.G).  

The dividend amount for each series is calculated in accordance
with the terms and conditions applicable to each respective
series, as set out in the Company's articles.  The annual dividend
rate for each series floats in relation to changes in the average
of the prime rate of Royal Bank of Canada and The Toronto-Dominion
Bank during the preceding month and is adjusted upwards or
downwards on a monthly basis by an adjustment factor which is
based on the weighted average daily trading price of each of the
series for the preceding month, respectively.  The maximum monthly
adjustment for changes in the weighted average daily trading price
of each of the series will be plus or minus 4% of Prime.  The
annual floating dividend rate applicable for a month will in no
event be less than 50% of Prime or greater than Prime.  

The dividend on each series is payable on Jan. 12, 2006, to
shareholders of record of such series at the close of business on
Dec. 30, 2005.

Nortel Networks Limited -- http://www.nortel.com/-- is a  
recognized leader in delivering communications capabilities that
enhance the human experience, ignite and power global commerce,
and secure and protect the world's most critical information.
Serving both service provider and enterprise customers, Nortel
delivers innovative technology solutions encompassing end-to-end
broadband, Voice over IP, multimedia services and applications,
and wireless broadband designed to help people solve the world's
greatest challenges. Nortel does business in more than 150
countries.

                        *     *     *

As reported in the Troubled Company Reporter on Oct. 31, 2005,
Standard & Poor's Ratings Services affirmed its 'B-' long-term
corporate credit rating on Nortel Networks Ltd., on the release of
security with respect to the Export Development Canada
performance-based support facility.  At the same time, Standard &
Poor's withdrew all the senior secured debt ratings on the company
and assigned its senior unsecured ratings on Nortel's public debt
securities at 'B-'.


NORTHWEST AIRLINES: In Talks with Unions to Cut Labor Costs
-----------------------------------------------------------
Northwest Airlines (OTC Bulletin Board: NWACQ) is involved in
negotiating with its unions to secure $1.4 billion in labor cost
savings.  NWA hopes to achieve these cost savings through
consensual agreements with its unions.

As previously announced, Northwest filed an 1113(c) motion with
the U.S. Bankruptcy Court for the Southern District of New York to
secure labor cost savings if the company and its unions do not
achieve consensual agreements.  The 1113(c) motion was filed on
Oct. 12, 2005, and the hearing is scheduled to commence on Nov.
16, 2005.

The company has been in discussions with:

    * The Air Lines Pilots Association (ALPA),

    * The International Association of Machinists and Aerospace
      Workers, and

    * The Professional Flight Attendants Association,

regarding the possibility of extending the deadline for the
Section1113(c) hearing to mid- January in order to allow all
parties more time to reach consensual labor cost saving
agreements.  In light of Northwest's significant financial
challenges, the company has advised ALPA, IAM and PFAA that
interim financial relief of approximately 60% of the $1.4 billion
target would have to go into effect in mid-November to allow for
an extension of the 1113(c) hearing.

Northwest Airlines will provide further information as events
develop.

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.


O'SULLIVAN IND: Gets Court Nod for Joint Administration of Cases
----------------------------------------------------------------
Pursuant to the Rule 1015(b) of the Federal Rules of Bankruptcy
Procedure, the U.S. Bankruptcy Court for the Northern District of
Georgia ordered the joint administration of the bankruptcy cases
of O'Sullivan Industries, Inc., and its debtor-affiliates.

The Debtors anticipate that during the course of their Chapter 11
cases, it will be necessary to file numerous motions and
applications seeking relief on behalf of all of the Debtors.  

Rick A. Walters, the Company's vice president and chief financial
officer, believes that procedural consolidation and joint
administration of the Debtors' Chapter 11 cases will further the
interests of judicial economy and administrative expediency by,
among other things, obviating the need to file duplicate motions,
enter duplicate orders, or forward duplicate notices to creditors
and other parties-in-interest.

Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings,
Inc. -- http://www.osullivan.com/-- designs, manufactures, and  
distributes ready-to-assemble furniture and related products,
including desks, computer work centers, bookcases, filing
cabinets, home entertainment centers, commercial furniture, garage
storage units, television, audio, and night stands, dressers, and
bedroom pieces.  O'Sullivan sells its products primarily to large
retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and
Office Depot.  The Company and its subsidiaries filed for chapter
11 protection on October 14, 2005 (Bankr. N.D. Ga. Case No. 05-
83049).  On September 30, 2005, the Debtor listed $161,335,000 in
assets and $254,178,000 in debts.  (O'Sullivan Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000)


O'SULLIVAN INDUSTRIES: Walks Away from 19 Executory Contracts
-------------------------------------------------------------
O'Sullivan Industries Holdings, Inc., and its debtor-affiliates
sought and obtained the U.S. Bankruptcy Court for the Northern
District of Georgia's authority to reject 19 executory contracts:

    Transaction Date    Agreement       Contract Party
    ----------------    ---------       --------------
    October 16, 1998    Severance       Daniel F. O'Sullivan

       June 25, 2003    Severance       Tyrone Riegel

   December 20, 2000    Severance       Howard L. Bass

   December 20, 2000    Severance       Sheila F. Roland

        May 30, 2003    Severance       Ralph W. Pattison

  September 10, 2004    Severance       Tommy W. Thieman

     August 13, 2004    Severance       Richard D. Davidson

    October 28, 2004    Severance       Michael P. O'Sullivan

     August 18, 2004    Severance       E. Thomas Riegel

     January 2, 2002    Severance       Betty J. Brasher

      March 22, 1999    Management      Neal C. Ruggeberg,
                        Termination     Randall Day,
                        Protection      Michael L. Franks,
                                        Joe J. Whyman,
                                        Kenneth S. Ladd

    February 1, 1996    Termination     Rowland H. Geddie, III
                        Protection

        July 2, 1991    Sales           Roark Associates, Inc.
                        Representative

       March 1, 1990    Sales           EJ Schwendeman Associates
                        Representative  

   November 30, 1999    Management      Bruckmann, Rosser,
                        Services        Sherrill & Co., L.L.C.

        June 1, 1995    Design          Metamorphosis Design &
                                        Development, Inc.

  September 26, 1994    License         Home Cinema Designs, Inc.

        May 28, 1996    License         Nova Solutions, Inc.

     January 5, 2000    Subrogation     Kelly Hull
                        Settlement

The Debtors disclose that they receive limited, if any, benefits
from the Executory Contracts, and they would owe more than
$1,300,000 if the Contracts were not rejected.

James C. Cifelli, Esq., at Lamberth, Cifelli, Stokes & Stout,
P.A., in Atlanta, Georgia, says all non-debtor parties to the
Rejected Contracts will be provided with notice of any bar date
with respect to any claims they may have arising from the
rejection of the Contracts.

Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings,
Inc. -- http://www.osullivan.com/-- designs, manufactures, and  
distributes ready-to-assemble furniture and related products,
including desks, computer work centers, bookcases, filing
cabinets, home entertainment centers, commercial furniture, garage
storage units, television, audio, and night stands, dressers, and
bedroom pieces.  O'Sullivan sells its products primarily to large
retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and
Office Depot.  The Company and its subsidiaries filed for chapter
11 protection on October 14, 2005 (Bankr. N.D. Ga. Case No. 05-
83049).  On September 30, 2005, the
Debtor listed $161,335,000 in assets and $254,178,000 in debts.  
(O'Sullivan Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


O'SULLIVAN IND: Wants Interim Compensation Procedures Established
-----------------------------------------------------------------
O'Sullivan Industries Holdings, Inc., and its debtor-affiliates
tell the U.S. Bankruptcy Court for the Northern District of
Georgia that they may need to retain other professionals in their
Chapter 11 cases other than the Professionals they previously
sought to employ.  An official committee of unsecured creditors
may also be appointed in the Debtors' bankruptcy cases and likely
will retain counsel and possibly other professionals.

Pursuant to Section 331 of the Bankruptcy Code, all professionals
are entitled to submit applications for interim compensation and
reimbursement of expenses every 120 days, or more often, if the
Court permits.

In this regard, the Debtors ask the Court to establish procedures
for compensating and reimbursing court-approved professionals on
an interim basis similar to those established in other large
Chapter 11 cases.

The Debtors maintain that the Compensation Procedures would reduce
the burden imposed on the Court, enable key parties-in-interest to
monitor more closely professional fees and costs, and diminish
undue financial burdens on the Professionals.

Pursuant to the Procedures, the Debtors require each Professional
after the end of each applicable month, to file with the Court and
serve to certain notice parties a Notice of Monthly Fee and
Expense Invoice, together with its monthly invoice, for interim
approval of compensation for services rendered and reimbursement
of expenses incurred during the immediately preceding month.  The
notice parties will have 20 days to object.

The Debtors will pay (i) 80% of the fees and 100% of the expenses
requested in the Monthly Statement or (ii) 80% of the fees and
100% of the expenses not subject to an objection.

The Debtors also require each Professional to file with the Court
and serve upon the notice parties an interim application for
allowance of compensation and reimbursement of expenses sought in
the Monthly Statements.  The Interim Fee Request will cover four
calendar months and must be filed no later than 45 days after the
end of the period.

The pendency of an objection to payment of compensation or
reimbursement of expenses would not disqualify a Professional from
future payment of compensation or reimbursement of expenses,
unless the Court orders otherwise.  All fees and expenses paid to
Professionals would be subject to disgorgement until final
allowance by the Court.

The Debtors also ask the Court to permit each member of any
official committee appointed in their Chapter 11 cases to submit
statements of expenses, excluding committee member counsel
expenses, and supporting vouchers to counsel for any committee,
which will collect and submit the committee members' request for
reimbursement in accordance with the Compensation Procedures.

The Debtors will include all payments made to Professionals in
their monthly operating reports, identifying the amount paid to
each Professional.

Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings,
Inc. -- http://www.osullivan.com/-- designs, manufactures, and  
distributes ready-to-assemble furniture and related products,
including desks, computer work centers, bookcases, filing
cabinets, home entertainment centers, commercial furniture, garage
storage units, television, audio, and night stands, dressers, and
bedroom pieces.  O'Sullivan sells its products primarily to large
retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and
Office Depot.  The Company and its subsidiaries filed for chapter
11 protection on October 14, 2005 (Bankr. N.D. Ga. Case No. 05-
83049).  On September 30, 2005, the
Debtor listed $161,335,000 in assets and $254,178,000 in debts.  
(O'Sullivan Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 215/945-7000)


OAK CREEK: Gibson Dunn Approved as Bankruptcy Counsel
-----------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
authorized Oak Creek Park, LLC, to employ Gibson, Dunn & Crutcher
LLP as its general bankruptcy counsel.

Gibson Dunn will:

   a) advise the Debtor of its rights, powers and duties as
      debtor-in-possession under chapter 11 of the Bankruptcy
      Code;

   b) prepare, on behalf of the Debtor, all necessary and
      appropriate applications, motions, proposed orders, other
      pleadings, notices, schedules, and other documents and
      review all financial and other reports to be filed in this
      chapter 11 case;

   c) advise the Debtor concerning and preparing responses to,
      applications, motions, other pleadings, notices, and other
      papers that may be filed and served in this chapter 11
      case;

   d) advise the Debtor with respect to assistance in the
      negotiation and documentation of, financing agreements and
      related transactions;

   e) review the nature and validity of any liens asserted
      against the Debtor's property and advise the Debtor
      concerning the enforceability of such liens;

   f) advise the Debtor regarding its ability to initiate actions
      to collect and recover property for the benefit of its
      estate;

   g) counsel the Debtor in connection with the formulation,
      negotiation and promulgation of a plan of reorganization
      and related documents;

   h) advise and assist the Debtor in connection with any
      potential property dispositions;

   i) advise the Debtor concerning executory contract and
      unexpired lease assumptions, assignments and rejections and
      lease restructurings and recharacterizations;

   j) assist the Debtor in reviewing, estimating, and resolving
      claims asserted against the Debtor's estate;

   k) commence and conduct any and all litigation necessary or
      appropriate to assert rights held by the Debtor, protect
      assets of the Debtor's chapter 11 estate, or otherwise
      further the goal of completing the Debtor's successful
      reorganization;

   l) provide corporate, real estate and other general
      non-bankruptcy services to the Debtor to the extent
      requested by the Debtor; and

   m) perform all other necessary or appropriate legal services
      in connection with this chapter 11 case for or on behalf of
      the Debtor.

Desmond Cussen, Esq., a Gibson Dunn associate, is the lead
attorney in the Debtor's case.  Mr. Cussen disclosed his
firm's professionals current hourly rates:

      Attorney                Designation           Hourly Rate
      --------                -----------           -----------
      Fred Pillon             Partner                  $675
      Oscar Garza             Partner                  $595
      Desmond Cussen          Associate                $495
      Eric J. Fromme          Associate                $475
      Kenneth A. Glowacki     Associate                $395
      Helen Canafax           Paralegal                $225

To the best of the Debtor's knowledge, Gibson Dunn does not
represent any interest adverse to the Debtor's estate.

Headquartered in San Francisco, California, Oak Creek Park, LLC,
filed for chapter 11 protection on Sept. 21, 2005 (Bankr. N.D.
Calif. Case No. 05-56102).  When the Debtor filed for protection
from its creditors, it listed estimated assets and debts of
$10 million to $50 million.


PERKINELMER INC: Moody's Withdraws Ba1 Corporate Family Rating
--------------------------------------------------------------
Moody's Investors Service assigned a Baa3 debt rating to
PerkinElmer, Inc.'s new $350 million five year senior unsecured
bank revolving credit facility.  The rating agency also upgraded
the company's senior subordinated notes and shelf registration.
The rating outlook is stable.  The rating actions reflect:

   * the sustainability of PKI's improvement in operating margins;

   * free cash flow generation and return on assets;

   * the company's steady debt reduction; and

   * its establishing an unsecured bank facility, replacing the
     existing secured facility.

The stable outlook incorporates Moody's expectation of favorable
growth prospects in PKI's ongoing business segments (Life Sciences
and Analytical Sciences and Optoelectronics), as well as continued
debt reduction from free cash flow generation and net proceeds
from the sale of the Fluid Sciences business segment, now a
discontinued operation.

The Baa3 long-term debt rating reflects:

   * that the company benefits from a high quality, diverse
     customer base that generates a recurring revenue stream
     approaching 50% of total revenues;

   * organic revenue growth of 4-6%;

   * strong free cash flow generation; and

   * an improving capital structure, evidenced by its new
     $350 million unsecured revolver and the announced tender for
     its outstanding senior sub notes.

Moody's noted, however, that the ratings upgrade is prospective in
nature.  While some credit metrics like free cash flow to debt
have Baa3 characteristics, operating margins and return on assets
need further improvement.  The rating also recognizes that PKI
will continue to make "niche" acquisitions or may need to enhance
return to shareholders, however, the rating agency expects that
these activities would be prudently funded

With some of PKI's global end markets historically cyclical,
sustainable improvement in credit metrics is key to maintaining
upward rating momentum.  The rating agency adds that based on
Moody's adjusted credit metrics, EBITA-to-average assets
approaching 8-10% and free cash flow generation consistently in
excess of $170 million could also have a positive effect on the
rating.  However, should the company take on a more aggressive
financial policy in the form of large debt-financed acquisitions
or substantial share repurchases or any combination thereof that
would cause credit metrics to deteriorate, the rating and/or
outlook could face downward pressure.

Ratings assigned with stable outlook:

  PerkinElmer, Inc.:

   * Baa3 for $350 million five year senior unsecured bank
     revolving credit with a final maturity of October 31, 2010

Ratings upgraded with a stable outlook include:

  PerkinElmer, Inc.:

   * Senior subordinated notes to Ba1 from Ba2 and securities to
     be issued pursuant to a 415 shelf registration to
     (P)Baa3/(P)Ba1/(P)Ba2 from (P)Ba1/(P)Ba2/(P)Ba3

Ratings withdrawn:

  PerkinElmer, Inc.:

   * Ba1 corporate family rating (formerly senior implied rating)
  
   * Baa3 rating for $100 million secured bank revolving credit
     agreement with a final maturity of 2007

PKI, with operations divided into:

   * Life & Analytical Sciences,
   * Optoelectronics, and
   * Fluid Sciences,

is experiencing positive trends in the first two business
segments.  

The Fluid Sciences segment will be sold.  The aerospace portion,
the largest, is under contract to be sold to Eaton Corporation for
approximately $333 million.

Using Moody's adjusted credit metrics for the latest twelve months
ended October 2, 2005, organic revenue growth of 6% and expanding
margins (EBIT margin of 11.1%) led to free cash flow of $177
million.  Debt-to-EBITDA was 2.1x versus 2.8x in 2004, EBITA-to-
average assets strengthened to 7.8% from 6.9% in 2004 and free
cash flow-to-debt improved to 29.5% from 24% the previous year.

With attractive growth opportunities emerging in its residual two
operating segments and net proceeds of approximately $300 million
from the Fluid Sciences sales, Moody's anticipates further
improvement in credit metrics during the remainder of 2005 and
into 2006.  The rating agency noted that by year end, the company
is expecting to have approximately $400 million in cash and
roughly $200 million of bank debt and $45 million under its asset
securitization outstanding.

PKI's liquidity is sound. At the end of the first nine months of
2005, balance sheet debt levels are below $275 million while cash
on hand is about $166 million.  In 2002, the company entered into
a secured credit facility consisting of a $315 million six-year
term loan and a $100 million five-year revolving credit facility.
The term loan has been paid off this year.  The $100 million
revolver, which is subject to several covenants including minimum
interest coverage, minimum fixed charge coverage, maximum senior
leverage and maximum total leverage, had no borrowings at
September 30, 2005.  Moody's expects that PKI was in compliance
with these covenants in the third quarter of 2005.

The company's new $350 million five-year senior unsecured bank
revolving credit facility, which replaces the five-year revolving
credit facility, is subject to several covenants including
consolidated interest coverage and consolidated leverage ratios.
Moody's anticipates PKI will be in compliance with these covenants
at close of the facility.

In addition, the company has $20 million in availability under its
$65 million accounts receivables securitization facility that has
been renewed until January 2006.  The facility has a rating
trigger if PKI's unsecured debt rating falls below Ba2 at Moody's
and BB at S&P.

PerkinElmer, Inc. headquartered in Wellesley, Massachusetts, is a
$1.7 billion diversified high-technology company operating in two
business segments:

   * Optoelectronics, and
   * Life and Analytical Sciences.


PONDERLODGE INC: Arthur Abramowitz Named as Chapter 11 Trustee
--------------------------------------------------------------
The Hon. Gloria M. Burns of the U.S. Bankruptcy Court for the
District of New Jersey authorized the appointment of Arthur
Abramowitz as chapter 11 Trustee in Ponderlodge, Inc.'s bankruptcy
case on Oct. 17, 2005.

Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, appointed
a chapter 11 trustee because of the numerous fiduciary breaches
committed by William Plaumer, the Debtor's principal and sole
shareholder.

Steamboat Capital III, LLC, which holds a first priority security
interest in all of the Debtor's assets on account of a $2.2
million prepetition loan, supported the appointment.

                U.S. Trustee's Contentions

Ms. Stapleton raised substantial concerns about Mr. Plaumer's
fiduciary obligation to faithfully serve the estate because of
his:

    a) lack of knowledge regarding financial transactions and
       inability to file operating reports and schedules required
       by the Bankruptcy Court;

    b) failure to maintain accurate books and records of the
       Debtor's transactions and general lack of control over
       the Debtor's assets and affairs;

    c) failure to adequately disclose his involvement in the sale
       and transfer of property from the separate bankruptcy case  
       of Beer World, Inc., to the Debtor; and

    c) failure to sell the Debtor's business in order to realize a
       substantial distribution to creditors.

These factors, Ms. Stapleton concluded, show a complete breakdown
in the internal controls and financial infrastructure of the
Debtor to the detriment of the estate and its creditors.

              Steamboat Capital's Investigation

The Bankruptcy Court had authorized Steamboat Capital to
substantially monitor the Debtor's affairs through New Vistas, its
property advisor.  The agreement with Steamboat Capital required
the Debtor to cooperate with the property advisor.  The Debtor
failed to adhere to the terms of the agreement and intentionally
impeded New Vistas' ability to carry out its duties.

After the default, Steamboat Capital obtained sworn testimony from
Mr. Plaumer detailing his gross mismanagement of the Debtor's
affairs, including its failure to:

    a) maintain complete and accurate and financial records;

    b) review bank account statements;

    c) employ generally acceptable accounting principles to record
       its transactions; and

    d) document intercompany transfers.

Steamboat Capital told the Bankruptcy Court that Mr. Plaumer's
actions warrant the appointment of a chapter 11 Trustee.

Headquartered in Villas, New Jersey, Ponderlodge, Inc. --
http://www.ponderlodge.com/-- operates a golf course.  The    
Company filed for chapter 11 protection on July 13, 2005 (Bankr.
D. N.J. Case No. 05-32731).  D. Alexander Barnes, Esq., at
Obermayer, Rebmann, Maxwell & Hippel LLP represents the Debtor in
its chapter 11 case.  When the Debtor filed for protection from
its creditors, it estimated assets of $10 million to $50 million
and debts of $1 million to $10 million.


PONDERLODGE INC: Chapter 11 Trustee Hires Murtaugh as Accountants
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey gave
Arthur J. Abramowitz, the chapter 11 Trustee appointed in
Ponderlodge, Inc.'s bankruptcy proceeding, permission to employ
Murtaugh & Petree as his accountant, nunc pro tunc to Oct. 14,
2005.

Murtaugh & Petree will:

  (a) assist in the preparation of financial information for
      distribution to creditors and others, including, but not
      limited to:
  
        * cash flow projections and budgets,
        * cash receipts and disbursement analysis,
        * analysis of various asset and liability accounts, and
        * analysis of proposed transactions
  
      for which Court approval is sought;
  
  (b) assist in the development of business plans and a plan of
      reorganization, including evaluation of the capital
      structure;
  
  (c) attend meetings and assist in the negotiations with banks
      and other lenders, noteholders, the creditors' committee,
      the U.S. Trustee, other parties in interest and
      professionals hired by the same, as required;
  
  (d) assist in the preparation of Monthly Operating Reports, and
      all other financial reports as required by the Court or the
      U.S. Trustee;
  
  (e) assist with the identification of executory contracts and
      leases and performance of cost/benefit evaluation with
      respect to the assumption or rejections of each;
  
  (f) provide valuation services as requested by the Trustee and
      his counsel;
  
  (g) assist the Trustee in the discharge of his duties and
      functions;
  
  (h) consult with the Trustee in connection with operation,
      financial, and other business matters relating to Debtor's
      ongoing activities;
  
  (i) assist in the preparation of liquidation and feasibility
      analyses;
  
  (j) assist with the analysis of alternative restructuring
      scenarios and the evaluation of various tax matters
      affecting Debtor's reorganization, including cancellation of
      debt, net operating loss carry forwards and other factors,
      if applicable;
  
  (k) analyze creditor claims by type, entity and individual
      claim, including assistance with a database to track such
      claims;
  
  (l) assist in the evaluation and analysis of avoidance actions,
      including fraudulent conveyances and preferential transfers;
  
  (m) assist in the preparation and evaluation of any potential
      litigation or claim objections;
  
  (n) provide expert testimony as required;
  
  (o) interact with accountants and other financial consultants
      for committees and other creditors' groups;
  
  (p) analyze potential sales of Debtor's assets;
  
  (q) assist, coordinate, and advise on the sale of Debtor's
      assets;
  
  (r) render tax advice; and
  
  (s) assist with other matters as may be requested from time to
      time.
  
The Firm's professionals bill:

        Designation           Hourly Rate
        -----------           -----------
        Partner               $250
        Manager               $180 - $200
        Senior                $150
        Staff                 $100 - $125
        Para/Clerical          $65
        
To the best of the Trustee's knowledge, Murtaugh & Petree does not
hold any interest adverse to the Debtor or its estate.

Headquartered in Villas, New Jersey, Ponderlodge, Inc. --
http://www.ponderlodge.com/-- operates a golf course.  The   
Company filed for chapter 11 protection on July 13, 2005 (Bankr.
D. N.J. Case No. 05-32731).  D. Alexander Barnes, Esq., at
Obermayer, Rebmann, Maxwell & Hippel LLP represents the Debtor in
its chapter 11 case.  When the Debtor filed for protection from
its creditors, it estimated assets of $10 million to $50 million
and debts of $1 million to $10 million.


PRIMUS TELECOMMS: Balance Sheet Upside-Down by $220M at 3rd Qtr.
----------------------------------------------------------------
PRIMUS Telecommunications Group, Incorporated (NASDAQ: PRTL)
reported its results for the quarter ended September 30, 2005.

Business Performance Highlights:

   * New Initiatives Continue Strong Sequential Growth;  
   * 115,000 DSL Customers in Australia (up 21%);  
   * 100,000 VOIP/Lingo Customers (up 18%);  
   * 73,000 Local Lines in Canada (up 22%);  
   * Revenue and Adjusted EBITDA Stable Over Prior Quarter;  
   * $293 Million Net Revenue;  
   * $33 Million Loss From Operations;  
   * $2 Million Adjusted EBITDA (Including $1 Million in Severance
     Charges)  

PRIMUS reported third quarter 2005 net revenue of $293 million,
flat compared to the prior quarter, and down from $334 million in
the third quarter 2004.  The Company reported a net loss for the
quarter of ($51) million compared to net income of $16 million in
the third quarter 2004.  As a result, the Company reported basic
and diluted loss per common share of ($0.51) in the third quarter
2005, as compared to basic and diluted income per common share of
$0.18 and $0.16, respectively, in the year-ago quarter.

"Progress in the third quarter was encouraging and in our view
provides preliminary validation of our strategy announced in 2004
to invest in transforming PRIMUS into a fully integrated service
provider of voice, broadband, voice-over-Internet protocol (VOIP),
wireless and data services.  Revenue from the new initiatives grew
to $26 million in the third quarter, an increase of 31% over the
prior quarter.  In light of this strong sequential revenue growth
from the new initiatives, together with the operating performance
highlighted below, PRIMUS now expects its fourth quarter 2005
revenue run rate from the new initiatives to exceed comfortably
the previously announced goal of a $100 million annual run rate,"
said K. Paul Singh, Chairman and Chief Executive Officer of
PRIMUS.

"With most of the planned new products successfully launched and
gaining traction, and with our cost reduction initiatives taking
hold, PRIMUS expects substantial quarterly improvement in Adjusted
EBITDA in the fourth quarter of 2005," Mr. Singh stated.  "The
improved operational performance, continued cost reduction
efforts, and our ability to moderate capital expenditures,
combined with potential financing alternatives and/or interest
expense savings, should allow us to meet our cash needs in 2006."

                 Liquidity and Capital Resources

PRIMUS ended the third quarter 2005 with a cash balance of
$80 million, including $11 million of restricted funds.  During
the quarter, $21 million in cash was used in operating activities.
Capital expenditures for the quarter were $12 million and Free
Cash Flow, as calculated in the attached schedules, was negative
($33) million.

PRIMUS's long-term debt obligations as of September 30, 2005, were
$642 million, down $4 million from June 30, 2005.  This reduction
includes exchanges of $12 million principal amount of the
Company's 5.75% convertible subordinated debentures due
February 15, 2007, for 7.0 million shares of common stock of the
Company, and scheduled principal amortization of $5 million.  
This decrease was offset in part by an initial $13 million
(CAN$15 million) borrowing by Primus's Canadian subsidiary under
the Company's existing CAN$42 million loan agreement with a
Canadian financial institution.

PRIMUS Telecommunications Group, Incorporated (NASDAQ:PRTL) is an  
integrated communications services provider offering international  
and domestic voice, voice-over-Internet protocol (VOIP), Internet,  
wireless, data and hosting services to business and residential  
retail customers and other carriers located primarily in the  
United States, Canada, Australia, the United Kingdom and western  
Europe.  PRIMUS provides services over its global network of owned  
and leased transmission facilities, including approximately 250  
points-of-presence (POPs) throughout the world, ownership  
interests in undersea fiber optic cable systems, 18 carrier-grade  
international gateway and domestic switches, and a variety of  
operating relationships that allow it to deliver traffic  
worldwide.  Founded in 1994, PRIMUS is based in McLean, Virginia.

As of September 30, 2005, the Company's balance sheet reflects a
$220,344,000 stockholders' deficit.


QUEBECOR WORLD: Low 3rd Quarter Results Spur S&P to Shave Ratings
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings, including
its long-term corporate credit rating, on printing company
Quebecor World Inc. by one notch to 'BB' from 'BB+'.  The outlook
is negative.

"The ratings were lowered following Montreal, Quebec-based
Quebecor World's third-quarter earnings release, in which
financial results were weaker than Standard & Poor's expected,"
said Standard & Poor's credit analyst Lori Harris.  "Furthermore,
we believe a recovery to the company's performance is not expected
for some time, which will result in soft operating performance
through 2006," Ms. Harris added.

The reported operating margin before depreciation, amortization,
and nonrecurring charges declined to 11.3% for the three months
ended Sept. 30, 2005, down from 12.6% for the same period last
year and 12.8% for the same period in 2003.  With the company's
weakness in operating performance expected to continue and
significantly higher capital expenditures forecasted to improve
Quebecor World's manufacturing platform, Standard & Poor's does
not expect material debt reduction in the medium term.  In this
regard, credit protection measures are expected to remain below
average during this period.

The ratings on Quebecor World reflect the company's relatively
aggressive financial profile and policy, weakness in earnings
despite restructuring efforts, and difficult industry conditions.  
Furthermore, the company's manufacturing platform will require
significant investments over the medium term to be competitive,
which will negatively impact free cash flow.  These factors are
partially offset by Quebecor World's position as one of the
world's largest printers, supported by its product and global
diversity.

Quebecor World is partially owned by Quebecor Inc., holding about
a 25% economic stake, yet has 83% voting power.  This controlling
interest gives rise to a linkage of these two separate legal
entities.  If Quebecor Inc. were ever to experience deterioration
in its credit profile, Standard & Poor's would attribute greater
risk to Quebecor World as a result.  This linkage could affect the
ratings on Quebecor World even in the absence of any adverse
developments at Quebecor World itself.

The negative outlook reflects our ongoing concerns regarding the
challenges faced by the company given its weak operating
performance, including lower earnings and reduction in free cash
flow because of increased capital expenditure requirements, and
difficult industry fundamentals.  Downward pressure on the ratings
could come from the continued deterioration in Quebecor World's
operations and/or weakness in credit protection measures or
liquidity.

In the medium term, there are limited prospects for the ratings to
be raised.  The outlook could be revised back to stable if the
company demonstrates improved operating performance.


QWEST COMMUNICATIONS: Prices $1.1 Billion Convertible Senior Notes
------------------------------------------------------------------
Qwest Communications International Inc. ((NYSE:Q) priced its $1.1
billion aggregate principal amount convertible senior notes due
2025, which was upsized from the previously announced amount of $1
billion.

The notes will bear an interest rate of 3.50% per annum, payable
semi-annually on May 15 and Nov. 15, commencing on May 15, 2006.
The notes are convertible, on or after Nov. 15, 2024, and also
under certain circumstances before Nov. 15, 2024, into common
stock at an initial conversion rate of 169.4341 shares of common
stock for each $1,000 principal amount (which represents a
conversion price of $5.90 per share).

The initial conversion price represents a premium of 30% over
Nov. 2, 2005's closing price of $4.54.  Upon conversion of the
notes a holder will receive an amount in cash equal to the
principal amount of his note plus shares of Qwest Communications
stock (or cash in lieu of stock at Qwest Communications's option)
to the extent the conversion value of the notes exceeds the
principal amount.  Qwest Communications has also granted the
underwriters an option to purchase up to an additional $165
million aggregate principal amount of the notes solely to cover
over-allotments, if any.  The closing of the offering is expected
to occur on Nov. 8, 2005, subject to the satisfaction of customary
closing conditions.

Qwest Communications may redeem some or all of the notes at any
time on or after Nov. 20, 2008 and before Nov. 20, 2010, if the
closing price of its common stock exceeds the conversion price by
130% for a period of 20 trading days in a consecutive 30 day
trading period.  The redemption price will be 100% of the
principal amount of the notes being redeemed together with a make-
whole premium based on the present value of the remaining payments
through November 20, 2010.  At any time on or after November 20,
2010, QCII has the right to redeem some or all of the notes at a
redemption price equal to 100% of the principal amount of the
notes being redeemed together with accrued and unpaid interest.

Holders of the notes have the right to require Qwest
Communications to repurchase their notes at 100% of the principal
amount thereof plus accrued and unpaid interest on Nov. 15, 2010,
Nov. 15, 2015 and Nov. 15, 2020 or in the event of certain
fundamental changes, including change in control transactions.

"We're pleased with the strong demand from fundamental investors
that enabled us to upsize the convertible offer above our
expectations to $1.1 billion from $1 billion," said Oren G.
Shaffer, Qwest vice chairman and CFO.  "This transaction is a step
function in the company's transformation.  It accelerates our
operational momentum by significantly reducing interest expense
and moving us closer to profitability."

Qwest Communications intends to use the net proceeds from this
offering, together with existing cash and cash equivalents, to
fund a tender offer for the 13.00% Senior Subordinated Secured
Notes due 2007, 13.50% Senior Subordinated Secured Notes due 2010
and 14.00% Senior Subordinated Secured Notes due 2014 issued by
its wholly-owned subsidiary, Qwest Services Corporation.  Any
remaining net proceeds will be used for other general corporate
purposes and potential future refinancing of indebtedness.

Goldman, Sachs & Co. is acting as sole bookrunner for the
offering.  Co-lead managers are Credit Suisse First Boston and
Morgan Stanley.  Citigroup, Lehman Brothers and Wachovia
Securities are co-managers.

Copies of the prospectus for the offering may be obtained by
contacting Goldman, Sachs & Co., 85 Broad Street, New York, NY
10004, Attn: Prospectus Department, telephone: 212-902-1171.

Qwest Communications International Inc. -- http://www.qwest.com/-  
- is a leading provider of high-speed Internet, data, video and
voice services.  With approximately 40,000 employees, Qwest is
committed to the "Spirit of Service" and providing world-class
services that exceed customers' expectations for quality, value
and reliability.

                        *     *     *

As reported in today's Troubled Company Reporter, Fitch has placed
Qwest Communications International's 'B' Issuer Default Rating,
along with each of the issue ratings assigned to Qwest and its
wholly owned subsidiaries outlined below, on Rating Watch
Positive.  Approximately $17.2 billion of debt as of Sept. 30,
2005 is affected.

Fitch's action follows Qwest's announcement that its wholly owned
subsidiary Qwest Services Corporation has commenced a $3 billion
cash tender offer and consent solicitation for its 13.5% senior
subordinated secured notes due 2010, 14.0% senior subordinated
secured notes due 2014, and the 13.0% senior subordinated secured
notes due 2007.  Qwest intends to fund the tender offer with
approximately $2 billion of existing cash and proceeds from a
proposed $1 billion offering of senior convertible notes through
Qwest.


QWEST COMMS: Moody's Rates Newly Launched Senior Notes at B3
------------------------------------------------------------
Moody's Investors Service upgraded Qwest Communication
International, Inc.'s (QCII or Qwest) corporate family rating to
B1 from B2 and confirmed Qwest Corporation's (QC) senior unsecured
ratings.  Qwest intends to issue the convertible security under a
universal shelf put in place in August of 2005.

In addition, Moody's narrowed the notching between ratings on debt
of Qwest Service Corporation (QSC), Qwest Capital Funding (QCF),
and QCII, as detailed below.  This rating action concludes the
review initiated on October 19, 2005.  The outlook on all ratings
is stable.

Moody's also assigned a B3 rating to Qwest's newly launched senior
convertible note issue maturing in 2025.  Moody's expects Qwest to
use the proceeds from this issue together with about $2.0 billion
in cash to redeem high cost debt at QSC.

As part of this rating action, Moody's has assigned these ratings
at QCII:

   * Convertible Senior Notes due in 2025 -- B3
   * $2,500 million universal shelf registration -- (P)B2 / (P)B3

These ratings have been upgraded:

  At QCII:

     * Corporate Family Rating -- to B1 from B2

     * $800 million 7.5% senior notes due in 2014 - to B2 from B3
       (guaranteed by QSC)

     * $525 million 7.25% senior notes due in 2011- to B2 from B3
       (guaranteed by QSC)

     * $500 million 7.5% senior notes due in 2014 -- to B2 from B3
       (guaranteed by QSC)

     * $750 million floating rate notes due in 2009 -- to B2
       from B3 (guaranteed by QSC)

     * $62 million 7.5% senior unsecured notes due in 2008
       (guaranteed by QSC and secured by second priority lien on
       QC stock) -- B3 from Caa1

     * $8 million 7.25% senior unsecured notes due in 2008
       (guaranteed by QSC and secured by second priority lien on
       QC stock) -- B3 from Caa1

     * $11 million 9.47% senior unsecured notes due in 2007-- B3
       from Caa2

     * $22 million 8.29% senior unsecured notes due 2008 -- B3
       from Caa2

  At QCF:

     * Senior unsecured long-term ratings -- B3 from Caa2

  At QSC:

     * Senior secured bank facility -- B1 from B2
     * Senior subordinated notes -- B3 from Caa1

Moody's confirmed these ratings at QC:

     * Senior unsecured long-term ratings -- at Ba3

     * Senior unsecured long-term ratings (former obligor:
       Northwestern Bell Telephone Co.) - at Ba3

     * Senior unsecured long-term ratings (former obligor:
       Mountain States Telephone and Telegraph Co.) -- at Ba3

As part of this action, Moody's affirms Qwest's SGL-1 speculative
grade liquidity rating.

The rating upgrade is based on expectations for continued
improvements in Qwest's balance sheet and free cash flows as well
as the elimination of some of the litigation overhang in light of
the recently announced shareholder litigation settlement.  Moody's
believes that Qwest's recently announced tender offer for high
coupon QSC senior subordinate notes will yield significant cash
interest savings (estimated at about $300 million annually) and
demonstrates the company's commitment to debt reduction.

In addition, Moody's also expects a continued strengthening of
Qwest's operations from in-region LD growth, as penetration and
usage increase, and reduced losses at Qwest Communications Corp.,
mainly because of the roll-off of uneconomical unconditional
purchase obligations and improved business conditions.  Strong
pre-dividend free cash flow generated by local operations of QC
also supports the corporate family rating.  Moody's estimates
these operations will enable Qwest to produce average annual free
cash flow of roughly $950 million compared to current net debt of
$20.2 billion (all metrics adjusted per Moody's published
methodology).

The ratings of QC and QCII are constrained by continued assess
line losses and QC margin pressure, which Moody's expects will
increase as competition, especially from cable telephony
providers, expands.  In addition, Moody's believes that Qwest's
conservative approach to fiber buildout and a facility based video
offering will sustain its credit profile only to the extent that
it uses cash savings to further reduce debt.

The rating outlook is stable.  Moody's believes that additional
improvements in free cash flow and leverage, though harder to
realize than recent improvements, will offset the increasing
business risk associated with rapidly increasing competitive
challenges at QC.  In addition, the DoJ investigation is still
ongoing and ERISA lawsuits are still pending, and their ultimate
financial impact is uncertain.  The company currently has $100
million reserved for potential settlements (after accounting for
the recent $400 Million shareholder litigation settlement).  At
the current B1 rating level, Moody's does not believe that actual
settlements will impair the company's credit metrics to a point
that would generate additional rating pressure.

Qwest's ratings are unlikely to rise further without:

   * significant improvement in revenues in its core strategic
     businesses;

   * sustainable margin improvement driving improved earnings and
     cash flow at Qwest's long haul operations in the intermediate
     term; and

   * substantial deleveraging, such that consolidated free cash
     flow consistently exceeds 7.5% of debt.

Qwest's ratings could fall if QC, the primary cash flow producer,
weakens such that its pre-dividend free cash flow falls below 10%
of total debt.  Moody's believes that this is most likely to occur
if QC suffers accelerated access line erosion and subsequent cash
flow deterioration, particularly from cable VoIP competition.

Moody's believes the company will continue to evaluate investment
opportunities, and will remain concerned about the company's prior
willingness to pay a premium for MCI's assets.  Rating pressure
would likely increase if the company depletes its cash reserves or
incurs meaningful incremental debt in an M&A transaction.

Moody's views the QSC tender offer and $1.0 billion convertible
debt issuance at QCII as a continuation of Qwest's strategy to
simplify its capital structure and reduce leverage.  As a result
of this simplification and expectations for improved cash flow
generating ability, Moody's is narrowing the notching between the
different classes of debt in the Qwest corporate structure.  The
senior unsecured debt rating at QCF and the non-guaranteed senior
unsecured debt rating at QCII have risen two notches to B3 in
acknowledgement of the reduction of structurally senior debt at
QSC, a lower corporate interest burden, and strong asset coverage.
The upgrade from the Caa rating category reflects Moody's view
that Qwest's significant debt reduction to date meaningfully
reduces the likelihood of impairment in the event of a distressed
scenario.

Moody's also confirms QC's senior unsecured ratings at a Ba3, one
notch above the corporate family rating.  The relative narrowing
in notching between the ratings of QC and the corporate family
rating reflects:

   * the simplification of the capital structure;

   * the relative size of the debt at QC; and

   * the expectation that Qwest will use cash flow generated at QC
     to service all other debt in the corporate structure.

The current notching assumes that Qwest will successfully tender
for public debt at QSC.  In the event that the tender offer fails
to redeem the vast majority of the high-coupon debt at QSC,
Moody's will reconsider the multiple notch upgrade of certain QCF
and QCII debt.  In addition, should the terms and conditions of
the remaining 14% notes due in 2014 issued at QSC change as part
of the tender offer, Moody's will likely revisit the rating on
this issue.

Qwest is an integrated telecommunications company headquartered in
Denver, Colorado.


QWEST COMMS: Spin-Off Plans Cue Fitch to Put Ratings at Low-B
-------------------------------------------------------------
Fitch has placed Qwest Communications International's 'B' Issuer
Default Rating, along with each of the issue ratings assigned to
Qwest and its wholly owned subsidiaries outlined below, on Rating
Watch Positive.  Approximately $17.2 billion of debt as of
Sept. 30, 2005, is affected.

Fitch's action follows Qwest's announcement that its wholly owned
subsidiary Qwest Services Corporation has commenced a $3 billion
cash tender offer and consent solicitation for its 13.5% senior
subordinated secured notes due 2010, 14.0% senior subordinated
secured notes due 2014, and the 13.0% senior subordinated secured
notes due 2007.  Qwest intends to fund the tender offer with
approximately $2 billion of existing cash and proceeds from a
proposed $1 billion offering of senior convertible notes through
Qwest.

Fitch believes that the tender for the high-cost debt at QSC will
generate annual cash interest savings of approximately $300
million, reduce leverage to 3.9 times on a pro forma basis as of
Sept. 30, 2005, and simplify Qwest's debt structure.  Going
forward Fitch expects that the debt tender combined with the
convertible notes will generate approximately $250 million of
incremental free cash flow, which together with anticipated free
cash flow growth stemming from operational gains is expected to
yield total free cash flow generation of between $1.0 billion and
$1.3 billion during 2006.

Qwest's credit profile has benefited from stabilizing access line
erosion, margin improvements derived from ongoing cost reductions
and the reduction of unconditional purchase obligations and
positive free cash flow generation that has resulted in a gradual
improvement in overall credit protection metrics.  In addition the
company's credit profile is further stabilized by the elimination
of the overhang on the credit related to shareholder litigation.

Overall, Fitch's ratings for Qwest and its subsidiaries
Incorporate the scope, scale, and relatively stable cash flow
generated by Qwest Corporation's local exchange business, the
company's stable liquidity position, and the expectation of
positive free cash flow generation.  Fitch's ratings also
recognize that QC's local exchange business faces the ongoing
challenges from competition and product substitution that have
negatively affected the company's access line portfolio and
operating margins.  The high business risk and cash requirement of
Qwest's out-of-region long haul business is also reflected in
Fitch's ratings.

Lastly, Fitch believes that the company's operating profile,
relative to its Regional Bell Operating Companies peer group, is
limited with the lack of significant growth opportunities.

Fitch intends to resolve the Rating Watch Positive pending the
results of the tender offer and expects that any rating upgrade of
the IDR will be limited to one notch.  Fitch notes that this
transaction will have a favorable impact on recovery ratings that
could result in individual issues being upgraded by more than one
notch.  Additionally Fitch anticipates assigning a 'B' rating to
the proposed $1 billion issuance of senior unsecured convertible
notes by Qwest.

Fitch has placed these ratings on Rating Watch Positive:

   Qwest Communications International

     -- Senior Unsecured* 'B+'/'R3'
     -- Senior Unsecured 'B-'/'R5'

   Qwest Capital Funding

     -- Senior Unsecured 'B-'/'R5'

   Qwest Services Corporation

     -- Senior secured revolver 'BB'/'R1'
     -- Subordinated secured notes 'B+'/'R3'

   Qwest Communications Corporation

     -- Senior unsecured 'B-'/'R5'

   Qwest Corp.

     -- Senior unsecured 'BB'/'R1'
     -- Term loan 'BB'/'R1'


RED TAIL: Court Okays Hiring of Cable Huston as Bankruptcy Counsel
------------------------------------------------------------------          
The U.S. Bankruptcy Court for the District of Oregon gave Red Tail
Canyon LLC permission to employ Cable Huston Benedict Haagensen &
Lloyd LLP, as its general bankruptcy counsel.

Cable Huston will:

   1) advise the Debtor of its rights, powers and duties as a
      debtor and debtor-in-possession in the continued operation
      and management of its business and properties under chapter
      11 of the Bankruptcy Code;

   2) assist the Debtor in taking all necessary actions to protect
      and preserve its estate, including:

      a) the prosecution of actions on the Debtor's behalf and the
         defense of any action commenced against the Debtor, and

      b) with negotiations concerning all litigation in which the
         Debtor is involved and objections to claims filed against
         the its estate and the compromise and settlement of those
         claims;

   3) prepare on behalf of the Debtor all necessary applications,
      motions, memoranda, responses, complaints, answers, orders,
      notices reports and other papers and review all financial
      and other reports required by the Debtor in compliance with
      its duties and obligations as a debtor-in-possession;

   4) assist and advise the Debtor in the negotiation and
      documentation of financing agreements, cash collateral
      orders and related transactions;

   5) review the nature and validity of any liens asserted against
      the Debtor's property and advise the Debtor regarding the
      enforceability of those liens;

   6) advise the Debtor regarding possible actions to collect and
      recover property for its estate and in potential
      dispositions of parcel of its real property, and the
      assumption or rejection of tenant leases or executory
      contracts, or the rejection, assignment or restructuring of
      tenant leases and real estate sales agreements;

   7) prepare and file a plan of reorganization and an
      accompanying disclosure statement and required supporting
      documents and assist the Debtor in confirming and
      implementing that plan and negotiate with creditors
      concerning that plan; and

   8) provide all other necessary legal services to the Debtor in
      connection with its chapter 11 case.

J. Stephen Werts, Esq., a Partner at Cable Huston, is one of the
lead attorneys for the Debtor.  Mr. Werts discloses that his Firm
received a $84,766 retainer.  Mr. Werts charges $275 per hour for
his services.  

Mr. Werts reports Cable Huston's professionals bill:

      Professional         Designation      Hourly Rate
      ------------         -----------      -----------
      Laura J. Walker      Partner             $275
      Lindsay R. Kandra    Associate           $150
      Michele Bradley      Paralegal           $100
      Donna Harris         Legal Assistant      $80

Cable Huston assures the Court that it does not represent any
interest materially adverse to the Debtor or its estate.

Headquartered in Portland, Oregon, Red Tail Canyon LLC owns and
operates the Red Tail Canyon townhouse apartments located in South
Aspen Summit Drive, Multnomah County, Portland, Oregon.  The
Company filed for chapter 11 protection on Sept. 19, 2005 (Bankr.
D. Ore. Case No. 05-41235).  When the Debtor filed for protection
from its creditors, it listed estimated assets and debts of $10
million to $50 million.


RED TAIL: Court Approves Hiring of Lane Powell as Special Counsel
-----------------------------------------------------------------          
The U.S. Bankruptcy Court for the District of Oregon gave Red Tail
Canyon LLC permission to employ Lane Powell PC as its special
corporate and regulatory counsel.

Lane Powell will:

   1) render legal advice to the Debtor with respect to general
      corporate and land use regulatory issues;

   2) assist and advise the Debtor with the conversion of its Red
      Tail Canyon Property to condominiums or separately salable
      townhouses and assist the Debtor in forming the owner's
      association for the converted development; and

   3) perform all other legal services to the Debtor as maybe
      required and appropriate in the Debtor's interest.

Dean N. Alterman, Esq., a Partner at Lane Powell, and Dianne
Kimmel, a Legal Assistant at Lane Powell, will be performing
services for the Debtor.

Mr. Alterman charges $295 per hour for his services, while Ms.
Kimmel charges $140 per hour.

Lane Powell assures the Court that it does not represent any
interest materially adverse to the Debtor or its estate.

Headquartered in Portland, Oregon, Red Tail Canyon LLC owns and
operates the Red Tail Canyon townhouse apartments located in South
Aspen Summit Drive, Multnomah County, Portland, Oregon.  The
Company filed for chapter 11 protection on Sept. 19, 2005 (Bankr.
D. Ore. Case No. 05-41235).  J. Stephen Werts, Esq., at Cable
Huston Benedict Haagensen & Lloyd LLP, represents the Debtor in
its restructuring efforts.  When the Debtor filed for protection
from its creditors, it listed estimated assets and debts of $10
million to $50 million.


RITE AID: Names Kevin Twomey CFO & Doug Donley as Chief Accountant
------------------------------------------------------------------
Rite Aid Corporation (NYSE, PCX: RAD) has promoted Kevin Twomey,
formerly Senior Vice President, Chief Accounting Officer and
Acting Chief Financial Officer, to Executive Vice President and
Chief Financial Officer.  He reports to Mary Sammons, Rite Aid
President and CEO.

The company also promoted Doug Donley, formerly Group Vice
President and Corporate Controller, to Senior Vice President and
Chief Accounting Officer, and Robert Sari, formerly Senior Vice
President and General Counsel, to Executive Vice President and
General Counsel.  Mr. Donley reports to Mr. Twomey, and Mr. Sari
reports to Sammons.  All three promotions are effective
immediately.

"These three executives have made significant contributions to our
company and are important and valuable members of our management
team," Mr. Sammons said.  "Rite Aid is fortunate to have such
talented and experienced professionals to promote into such key
positions."

                     Chief Financial Officer

In his new position, Mr. Twomey, 55, has overall responsibility
for finance, accounting, financial reporting, budgeting and
planning, treasury, tax and investor relations.  He has served as
Acting Chief Financial Officer for Rite Aid since August of 2005,
while he also continued to serve as Chief Accounting Officer.  He
joined Rite Aid in 2000 as Senior Vice President and Chief
Accounting Officer and prior to that, served as senior vice
president, finance and control for Fleming Companies, Inc., a food
marketing and distribution company.  He joined Fleming in 1989
after 17 years with Deloitte & Touche, where he was a partner.

                    Chief Accounting Officer

In his new position, Mr. Donley, 43, is responsible for
accounting, treasury and financial reporting.  He joined Rite Aid
in 1996 as a financial analyst, serving as Director of Financial
Analysis and Assistant Controller before being named Vice
President and Corporate Controller in 1999 and Group Vice
President and Corporate Controller in 2000.  Prior to Rite Aid,
Donley served as an internal auditor for Harsco Corporation from
1994 to 1996 and an auditor for KPMG Peat Marwick from 1992 to
1994.

                         General Counsel

With his promotion, Sari, 49, continues to be responsible for the
company's legal matters and oversees regulatory compliance,
internal audit and loss prevention.  He joined Rite Aid in 1997 as
Associate Counsel, serving as Vice President of Law before being
promoted to Senior Vice President and Deputy General Counsel in
2000 and then to Senior Vice President and General Counsel in
2002.  His previous experience includes serving as Vice President,
Legal Affairs for Thrifty/Payless, Inc., a West coast drugstore
chain acquired by Rite Aid in 1996.

Rite Aid Corporation is one of the nation's leading drugstore
chains with annual revenues of $16.8 billion and approximately
3,350 stores in 28 states and the District of Columbia.

                         *     *     *

As reported in the Troubled Company Reporter on Sept. 1, 2005,
Moody's Investors Service lowered the Speculative Grade Liquidity
Rating of Rite Aid Corporation to SGL-3 from SGL-2, affirmed all
long-term debt ratings (Corporate Family Rating of B2), and
revised the rating outlook to negative from stable.  The downgrade
of the Speculative Grade Liquidity Rating reflects Moody's
expectation that mediocre operating cash flow and planned capital
investment increases over the next twelve months will require the
company to rely on external financing sources to cover the cash
flow deficit.

While liquidity over the next twelve months is adequate, revision
of the outlook to negative on Rite Aid's long-term debt ratings
reflects Moody's concern that operating results have stabilized at
a level insufficient to fully fund fixed charges such as debt
service, cash preferred stock dividends, and capital investment,
as well as the company's weak operating performance relative to
higher rated peers.

This rating is lowered:

   -- Speculative Grade Liquidity Rating to SGL-3 from SGL-2.

Ratings affirmed are:

   -- $860 million 2nd-lien senior secured notes (comprised of 3
      separate issues) at B2;

   -- $1.28 billion of senior notes (comprised of 8 separate
      issues) at Caa1;

   -- $250 million of 4.75% convertible notes (2006) at Caa1; and

   -- Corporate Family Rating (previously called the Senior
      Implied Rating) at B2.


ROCKLAND TOBACCO: Fitch Rates Settlement Bonds Series 2005B at BB
-----------------------------------------------------------------
Fitch Ratings assigns a 'BBB-' rating to Rockland Tobacco Asset
Securitization Corporation's issuance of tobacco settlement  
asset-backed bonds, series 2005A, and a rating of 'BB' to series
2005B.  The series 2005C will not be rated.  The series 2005 bonds
will total approximately $24.9 million and comprise tax-exempt
capital appreciation bonds due on Aug. 15, in years 2045, 2050,
and 2060.  The expected ratings of the above-referenced bonds
address the issuer's ability to make timely payments of each
bond's accreted value by their respective maturity dates.  The
series 2005 bond proceeds will be used to provide funds to
Rockland County as sole beneficiary of the residual trust,
reacquire a 20% portion of the tobacco settlement revenues sold to
Rockland Second Tobacco Asset Settlement Corporation, and pay
certain costs of issuance.

The collateral securing the series 2005 bonds consists of the
Rockland County Tobacco Securitization Corporation's tobacco
settlement revenues received under the New York Consent Decree.  
The County of Rockland has sold all its rights, title, and
interests in the TSRs to the corporation.

Rockland Tobacco Asset Securitization Corporation is a         
not-for-profit local development corporation organized by the
County of Rockland, New York, under Not-for-Profit Law of the
State of New York.  The corporation is an instrumentality of, but
separate and apart from, the county and state, and the rated bonds
are obligations of the corporation and not of the county or state.

The ratings are based on the senior subordinate structure of the
2001 and 2003 senior bonds and among the classes of 2005 bonds
being issued, and the credit quality of the collateral securing
the bonds, which consists of annual payments and strategic
contribution payments by the three largest domestic tobacco
manufacturers: Philip Morris Inc., R.J. Reynolds Tobacco Co., and
Lorillard Tobacco Co. -- the original participating manufacturers,
under a master settlement agreement entered into with the
attorneys general of 46 states, the District of Columbia, the
Commonwealth of Puerto Rico, the U.S. Virgin Islands, the
Commonwealth of Northern Mariana Islands, American Samoa, and
Guam.

Fitch's view of the credit quality of the collateral takes into
account two fundamental characteristics of the MSA: since payments
under the MSA are based on the relative market share of the
domestic tobacco manufacturers, the payment obligation can be
considered an industry obligation which Fitch currently deems to
be rated 'BBB-' on an unsecured basis; and the MSA should survive
the bankruptcy of a domestic tobacco manufacturer, making it more
likely that the manufacturer would continue to make payments under
the MSA ahead of its unsecured indebtedness.  These are the major
characteristics of the MSA that support and, at the same time,
limit the expected rating of the tobacco settlement senior bonds
to 'BBB'.

Accordingly, the rating on this transaction is linked to and will
move with Fitch's future assessment of the tobacco industry's
overall credit quality.  The credit quality of the industry, in
turn, will be significantly influenced by the underlying ratings
of the three major domestic tobacco manufacturers and Fitch's view
of the relative strength of those three manufacturers within the
overall domestic tobacco industry.

For a more detailed discussion of the industry, see Fitch Research
on 'U.S. Tobacco Industry Report - On the Verge of Industry
Altering Decisions' dated Oct. 10, 2005, and available on the
Fitch Ratings Website at http://www.fitchratings.com/

In addition, since payments under the MSA are subject to various
adjustments and offsets based on several factors, including
cigarette consumption, Fitch developed a series of cash flow
stresses to determine the transaction's ability to make timely
payments of each bond's accreted value on their respective
maturity dates.

Therefore, the expected rating is also based on the transaction's
ability to withstand cash flow stresses commensurate with a 'BBB-'
rating for the series 2005A bonds, and a 'BB' rating for the
series 2005B bonds.  No cash flow stresses were run for series
2005C bonds, as they were not rated.  Finally, the expected
ratings reflect the transaction's sound legal and financial
structures.


ROOMLINX INC: Michael S. Wasik Appointed as New Company CEO
-----------------------------------------------------------
RoomLinX, Inc. (OTC Bulletin Board: RMLX.OB) appointed Michael S.
Wasik as Chief Executive Officer, effective immediately.  Outgoing
CEO Aaron Dobrinsky will remain an executive member of the board
of directors, and will continue to work with Wasik on executing
RoomLinX's business strategy.

Mr. Wasik joined the RoomLinX Executive Management team in August
of 2005 after completing the merger of his company, SuiteSpeed, a
wireless Internet provider within the hospitality market, with
RoomLinX.  At SuiteSpeed, Wasik was responsible for defining
technology architecture, market direction, and the overall vision
for that WiFi company.  SuiteSpeed's customer brands include
Renaissance by Marriott, Marriott Courtyard, Holiday Inn, Best
Western, Radisson, Embassy Suites, Days Inn, TownePlace Suites by
Marriott, and Hampton Inn & Suites, as well as many boutique
hotels.

"Since Mike Wasik joined the executive management team at
RoomLinX, we have been consistently impressed with his vision and
ability to lead," said Peter Bordes, chairman of RoomLinX's board
of directors.  "He has a clear vision for the future of the
Company which the board fully supports."

Mr. Wasik is also the founder and chairman of the board of TRG
Inc., an IT consulting company.  Having launched TRG in late 1997
with no outside funding, Wasik has been responsible for the
overall sales and marketing effort, and has defined TRG's overall
vision.  Under his leadership, the company achieved average growth
of 300% per year over the first four years with positive EBITDA.
Since starting TRG, Wasik has expanded the company's billable
resources from 6 consultants in 1997 to 60 consultants in 2000,
serving Fortune 500 corporations across the U.S.  Mr. Wasik has
managed over 60 people in 4 offices throughout the United States,
and has been nominated for the 2005 Ernst & Young Entrepreneur of
the Year award.

"Since the merger of RoomLinX and SuiteSpeed earlier this year, I
have worked diligently to identify opportunities and synergies
within the organization which would help move the Company toward
profitability," said Mr. Wasik.  "With the support of Aaron and
the rest of the board, I believe that we can execute on a strategy
that is aimed at increasing revenue and growing the bottom line.
We expect to move forward with the acquisition of DISC Wireless,
and are actively seeking other opportunities to expand our reach
and increase our bottom line within our existing customer base."

                    CFO Leaves Company

The Company also reported that Chief Financial Officer Frank
Elenio would be leaving the Company and its board to pursue other
professional interests.  A search for a new CFO has been
initiated, and Mr. Elenio will serve as a financial consultant to
the Company until his replacement is hired.

"Frank has been an integral part of RoomLinX's executive
management team and has built a strong platform of financial
reporting and controls," said Mr. Wasik. "We are grateful for his
contributions, and wish him success in his future endeavors."

RoomLinX also said that it would be moving its corporate
headquarters from Hackensack, New Jersey to Denver, Colorado.  The
Company will maintain an office in New Jersey to ensure continuity
of service to its customers on the East Coast.

SuiteSpeed is a provider of high-speed wireless Internet access
solutions to hotels. SuitesSpeed's results of operations for the
periods on and after the closing will be included in the Company's
results.

RoomLinX, Inc., is a pioneer in Broadband High Speed Wireless
Internet connectivity, specializing in providing advanced WI-FI
Wireless and Wired networking solutions for High Speed Internet
access to Hotel Guests, Convention Center Exhibitors, Corporate
Apartments, and Special Event participants.  Designing, deploying
and servicing site-specific wireless networks for the hospitality
industry is RoomLinX's core competency.

                        *     *     *

                      Going Concern Doubt

RoomLinX, Inc., delivered its quarterly report on Form 10-QSB for
the quarter ending June 30, 2005, to the Securities and Exchange
Commission on Sept. 13, 2005.  

The Company reported a $1,380,378 net loss on $499,569 of net
revenues for the quarter ending June 30, 2005.  At June 30, 2005,
the Company's balance sheet shows $584,909 in total assets and a
$1,808,354 capital deficit.  The notes to the Company's financial
statements indicate (i) there's doubt about the company's ability
to continue as a going concern, and (ii) that the company is in
default of its 10% promissory notes.


ROYAL GROUP: Expects Sales Decline in Third Quarter Results
-----------------------------------------------------------
Royal Group Technologies Limited (RYG-TSX; RYG-NYSE) advised that
its 2005 third-quarter financial results were adversely affected
by a number of factors.  As a result, the company expects that it
will report a decline in sales compared with the 2004 period, with
a net loss in the range of $0.05 per share to $0.10 per share.  

The decline in sales reflects reduced demand for Outdoor Products,
and the products of certain non-core businesses slated for
disposition.  EBITDA is expected to be $40 million to $45 million
less than in the same quarter in the previous year.

Approximately $17 million of the EBITDA decline results from
expenses related to the engagement of consultants to assist with
development of the management improvement plan, other expenses
related to the sale process, expenses related to on-going
regulatory investigations, executive search costs, accruals for
retention bonuses and a write-down of the accounts receivable from
the former Mexican subsidiary divested of during the second
quarter of 2005.  Approximately $15 million of the EBITDA decline
can be attributed to raw material cost increases net of selling
price increases, with approximately $9 million of the decline
related to unfavorable currency exchange.

                        Lender Talks

The decline in EBITDA may result in the Company being marginally
offside on one of the covenants of its revolving credit facility.  
As a result, the Company has approached its bank group for an
amendment or waiver in order to ensure that it continues to comply
with the terms of the facility.  Management believes that the
amendment or waiver will be granted prior to the Company's release
of its third quarter earnings.

"Our third quarter results continue to underscore the need for
change, which our recently announced 'Management Improvement Plan'
will drive," said Lawrence J. Blanford, who was appointed
President and Chief Executive Officer of Royal Group near the end
of the second quarter.  On Sept. 22, 2005, Royal Group disclosed
that its board had approved a comprehensive management plan
involving business unit portfolio restructuring, actions to
improve profits and strategic initiatives aimed at attaining the
full potential of its core products.  Mr. Blanford noted that
"improvement initiatives are now being aggressively implemented,
which we believe will generate improved financial results over
time."

Royal Group Technologies Limited -- http://www.royalgrouptech.com/        
-- manufactures innovative, polymer-based home improvement,  
consumer and construction products.  The company has extensive  
vertical integration, with operations dedicated to provision of  
materials, machinery, tooling, real estate and transportation  
services to its plants producing finished products.  Royal Group's  
manufacturing facilities are primarily located throughout North  
America, with international operations in South America, Europe  
and Asia.  

                       *      *      *  

As reported in the Troubled Company Reporter on May 11, 2005,  
Standard & Poor's Ratings Services lowered its long-term
corporate  credit and senior unsecured debt ratings on Royal
Group Technologies Ltd. to 'BB' from 'BBB-'.  At the same time,
Standard & Poor's removed its ratings on Royal Group from
CreditWatch, where they were placed with negative implications
Oct. 15, 2004.  S&P said the outlook is currently negative.


SALOMON BROTHERS: Fitch Affirms Low-B Ratings on Two Cert. Classes
------------------------------------------------------------------
Fitch Ratings has taken rating actions on these Salomon Brothers
Mortgage Securities VII, Inc. mortgage pass-through certificates:

   Series 1992-6

     -- Class A-1 affirmed at 'AAA';
     -- Class M affirmed at 'AAA'.

   Series 1994-19

     -- Class A affirmed at 'AAA'.

   Series 2002-1

     -- Classes A-1 to A-3 and PO affirmed at 'AAA';
     -- Class B-1 upgraded to 'AA' from 'A'.

   Series 2003-1

     -- Classes A-1 to A-2 and PO affirmed at 'AAA';
     -- Class B-1 affirmed at 'A'.

   Salomon Brothers Sovereign, Series 2002-1

     -- Classes A-1 to A-4 affirmed at 'AAA';
     -- Class B-1 upgraded to 'AAA' from 'AA';
     -- Class B-2 upgraded to 'AA' from 'A';
     -- Class B-3 affirmed at 'BBB';
     -- Class B-4 affirmed at 'BB';
     -- Class B-5 affirmed at 'B'.

The upgrades, affecting approximately $21.9 million of outstanding
certificates, are being taken as a result of low delinquencies and
losses, as well as increased credit support levels.

The affirmations, affecting approximately $152.33 million of
outstanding certificates, are due to credit enhancement and
collateral performance generally consistent with expectations.

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


SEARS ROEBUCK: Liquidity Prompts S&P to Lift Low-B Ratings
----------------------------------------------------------
Standard & Poor's Ratings Services raised its short-term and
commercial paper ratings on Sears Roebuck Acceptance Corp., a
wholly owned subsidiary of Sears Holdings Corp., to 'B-1' from
'B'.  All other ratings were affirmed.  The upgrade reflects our
greater confidence that the company has and will maintain very
adequate levels of liquidity for the short-term, despite ongoing
business pressures.  The outlook continues to be negative.

On March 24, 2005, Sears, Roebuck and Co. completed its merger
with Kmart Holding Corp. to form a new company, Sears Holdings
Corp.  The rating on Sears Holdings reflects the relatively high
business risk for the combined company, as both Sears and Kmart
will continue to be challenged to improve store productivity and
profitability.  Sears Holdings' financial profile is solid for the
rating, providing an offset to some of the uncertainties of its
business prospects.  Each business has struggled with intense
competition over a number of years from companies like J.C. Penney
Co. Inc., Kohl's Corp., Wal-Mart Stores Inc., and Target Corp.

Moreover, Standard & Poor's Ratings Services believes that the
combined company will face difficulties in integrating different
corporate cultures while trying to make Sears and Kmart stores
more relevant to consumers in terms of convenience, merchandising,
and value.


SILICON GRAPHICS: NYSE Delists Common Stock & Sr. Sec. Notes
------------------------------------------------------------
The New York Stock Exchange (NYSE) advised Silicon Graphics, Inc.,
that the Company's common stock -- ticker symbol SGI -- and its
6.5% Senior Secured Convertible Notes due June 1, 2009 -- ticker
symbol SGI 09 -- will longer be traded on the NYSE beginning with
the opening of business on Monday, November 7, 2005.  The Company
expects its common stock will be quoted on the OTC Bulletin Board.

SGI received notice from the NYSE on May 9, 2005, that SGI's
common stock had fallen below the NYSE's minimum share price
standard for continued listing.  The NYSE's standard requires that
a company's common stock trade at a minimum average closing share
price of $1.00 during a consecutive 30-day trading period.  SGI's
common stock has not returned to compliance with this standard.

On November 1, 2005, the NYSE notified SGI of its decision to
suspend trading and stated that an application to the Securities
and Exchange Commission to delist these securities from the NYSE
is pending the completion of applicable procedures.

Silicon Graphics, Inc. -- http://www.sgi.com/-- is a leader in    
high-performance computing, visualization and storage.  SGI's
vision is to provide technology that enables the most significant
scientific and creative breakthroughs of the 21st century.
Whether it's sharing images to aid in brain surgery, finding oil
more efficiently, studying global climate, providing technologies
for homeland security and defense or enabling the transition from
analog to digital broadcasting, SGI is dedicated to addressing the
next class of challenges for scientific, engineering and creative
users.

At Sept. 30, 2005, Silicon Graphics, Inc.'s balance sheet showed a
$222,501,000 stockholders' deficit.


SIRIUS SATELLITE: Incurs $180.4 Million Net Loss in Third Quarter
-----------------------------------------------------------------
SIRIUS Satellite Radio (NASDAQ: SIRI) reported strong third
quarter financial and operating results, driven by subscriber
growth in its retail and automotive OEM distribution channels, and
continued demand for its superior programming.

As of September 30, 2005, SIRIUS had 2,173,920 subscribers.  The
third quarter subscriber figure reflects net additions of 359,294
subscribers, a 97% increase over the year-ago figure of 181,948
net subscriber additions.

The company raised its year-end 2005 subscriber guidance to over
3 million, and reaffirmed its previous guidance on all other key
metrics.  SIRIUS expects its subscriber growth will be driven by
traditionally strong consumer demand in the fourth quarter, and by
SIRIUS' exclusive programming as well as the continued appeal of
its commercial-free music.

"The third quarter represented another quarter of solid execution
by our management team," said Mel Karmazin, CEO of SIRIUS.  "We
continued to gain retail and overall market share in the quarter,
while meeting our guidance for third quarter net subscriber
additions.  As we move into the important fourth quarter, we
believe that our mix of innovative and competitively-priced
products at retail, combined with more SIRIUS factory
installations by our automotive partners, will yield strong
year-end results, and we are raising our subscriber guidance to
over 3 million to reflect this expectation.  The introduction of
Martha Stewart Living Radio and the anticipation of Howard Stern's
arrival in January 2006 should also generate unprecedented
excitement for our service."

SIRIUS reported revenue of $66.8 million for the third quarter of
2005, a 250% increase over the $19.1 million reported for the
year-ago quarter.  Average monthly churn during the third quarter
of 2005 was 1.8%.  Average monthly churn is expected to be
approximately 1.5% for the full year.

The company reported subscriber acquisition costs (SAC) per gross
subscriber addition of $149 for the third quarter of 2005, a 35%
improvement over SAC per gross subscriber addition of $229 in the
year-ago quarter.  SIRIUS continues to project SAC per gross
subscriber addition of under $145 for the year.

During the third quarter of 2005, SIRIUS added 209,920 net
subscribers from its retail channel, a 56% increase over 134,442
retail net subscriber additions in the year-ago quarter.  The
company also added 149,000 net subscribers from its automotive OEM
channel, a 230% increase over 45,196 net subscriber additions from
that channel in the third quarter of 2004.

SIRIUS reported a net loss of ($180.4) million for the third
quarter of 2005 compared with a net loss of ($169.4) million for
the third quarter of 2004.

                  Notes Offering and Redemption

During the third quarter of 2005, SIRIUS completed an offering of
$500 million in aggregate principal amount of 95/8% Senior Notes
due 2013.  SIRIUS used approximately $63.1 million of the proceeds
of this offering to redeem all of its outstanding 15% Senior
Secured Discount Notes due 2007 and 14-1/2% Senior Secured Notes
due 2009, and will use the balance of the net proceeds for general
corporate purposes.

                        Guidance for 2005

The company raised its year-end subscriber guidance and reaffirmed
its previous guidance on all other key guidance metrics for the
full year 2005.  After adding over one million new subscribers in
the first nine months of the year, SIRIUS expects continued strong
subscriber growth in the traditionally busy fourth quarter and
raised its previous year-end 2005 target to over 3 million
subscribers.

Average monthly churn is expected to be approximately 1.5% for
full year 2005, in line with previous guidance, given continued
high levels of customer satisfaction.  The company continues to
expect SAC per gross subscriber addition to be under $145 for the
full-year 2005, with further declines expected in 2006.

SIRIUS expects to generate $230 million of total revenue and an
adjusted loss from operations of approximately ($540) million in
2005.  Total operating cash uses, capital expenditures and
restricted investment activity are expected to be approximately
($375) million in 2005.

SIRIUS ended the third quarter of 2005 with approximately
$934 million in cash, cash equivalents and marketable securities.   
SIRIUS' first quarter of positive free cash flow could be reached
as early as the fourth quarter of 2006, and the company continues
to expect to generate positive free cash flow for the full-year
2007.

SIRIUS Satellite Radio Inc. delivers more than 120 channels of the
best commercial-free music, compelling talk shows, news and  
information, and the most exciting sports programming to
listeners  across the country in digital quality sound.  SIRIUS
offers 65 channels of 100% commercial-free music, and features
over 55 channels of sports, news, talk, entertainment, traffic and
weather for a monthly subscription fee of only $12.95.  SIRIUS
also broadcasts live play-by-play games of the NFL and NBA, and is
the Official Satellite Radio partner of the NFL.

                         *     *     *

As reported in the Troubled Company Reporter on Aug. 4, 2005,  
Standard & Poor's Ratings Services assigned its 'CCC' rating to
Sirius Satellite Radio Inc.'s $500 million Rule 144A senior
unsecured notes maturing in 2013.   At the same time, Standard &
Poor's affirmed its existing ratings on the New York,
New York-based satellite radio broadcasting company, including its
'CCC' corporate credit rating.  S&P said the outlook remains
stable.


SOUPER SALAD: Court Confirms Plan of Reorganization
---------------------------------------------------
The Honorable Sarah Sharer Curley of the U.S. Bankruptcy Court for
the District of Arizona confirmed, on October 31, the Plan of
Reorganization filed by Souper Salad Inc.

Judge Curley determined that the Plan satisfies the 13 standards
for confirmation required under Section 1129(a) of the Bankruptcy
Code.

                     Summary of the Plan

Prior to the Effective Date, the Debtor will form Merger Sub as a
Delaware entity wholly owned by the Debtor.  On the Effective
Date, after the cancellation of the Equity Interests in the Debtor
and the Convertible Subordinated Notes and the issuance of the
Reorganized Debtor Common Stock to the holders of the Allowed
Senior Lender Claims, the Debtor will merge with Merger Sub
pursuant to the Plan of Merger for the purpose of changing its
domicile to Delaware.  

Merger Sub, the surviving entity, will change its name to Souper
Salad, Inc., pursuant to amendments to its certificate of
incorporation in the Plan of Merger, and will continue as the
Reorganized Debtor and be the successor to the Debtor.

Pursuant to the Merger, each share of the Reorganized Debtor
Common Stock will be converted into one fully paid and non-
assessable share of common stock of Merger Sub and all of the
common stock of Merger Sub owned by the Debtor at the Effective
Date of the Merger will be cancelled.  The former holders of the
Allowed Senior Lender Claims will own all of the issued and
outstanding common stock of Merger Sub, which common stock will
after the Merger constitute the Reorganized Debtor Common Stock.

All allowed Administrative Expense Claims, Priority Tax Claims,
Other Priority Claims, and Perishable Agricultural Commodities Act
Claims will be paid in full.

All Equity Interests in the Debtor will be cancelled on the
Effective Date and the Debtor's separate legal existence will
terminate upon the effectiveness of the merger of the Debtor into
the Reorganized Debtor.

Unsecured Claims, totaling approximately $6.3 million will receive
their Pro Rata Portion of the Unsecured Claims Cash in full
satisfaction, settlement, release, and discharge of those Claims.

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

  http://www.researcharchives.com/bin/download?id=051011030304

Headquartered in San Antonio, Texas, Souper Salad Inc., --
http://www.soupersalad.com/-- operates an all-you-care-to-eat    
soup and salad bar restaurant chain.  The Debtor filed for chapter
11 protection (Bankr. D. Ariz. Case No. 05-10160) on June 6, 2005.  
Daniel Collins, Esq., at Collins, May, Potenza, Baran & Gillespie,
P.C., and Mark W. Wege, Esq., at Bracewell Giuliani, represent the
Debtor in its restructuring efforts.  When the Debtor filed for
protection from its creditors, it listed $16,115,715 in assets and
$50,383,179 in debts.


SUN HEALTHCARE: Equity Deficit Narrows to $109.5 Mil. at Sept. 30
-----------------------------------------------------------------
Sun Healthcare Group, Inc. (NASDAQ: SUNH) reported results for the
third quarter ended Sept. 30, 2005.

For the quarter ended Sept. 30, 2005, Sun reported total net
revenues of $216.3 million and net income of $7.3 million, which
included income of $8.3 million on discontinued operations.  For
the comparable quarter ended Sept. 30, 2004, total net revenues
were $200.9 million with a net loss of $11.1 million, which
included a $7.8 million loss on discontinued operations.  Net
revenues for the quarter ended Sept. 30, 2005, increased
$15.4 million, or 7.7 percent, as compared to net revenues for the
quarter ended Sept. 30, 2004.

For the quarter ended Sept. 30, 2005, Sun reported a loss from
continuing operations of $0.9 million, as compared to a loss from
continuing operations of $3.2 million, for the same period in
2004.  The 2005 third quarter EBITDAR from continuing operations
was $14.4 million as compared to $13.5 million from continuing
operations for the same period in 2004, an improvement of
$0.9 million, or 6.7 percent.  EBITDA from continuing operations
for the third quarter of 2005 was $4.5 million as compared to
$3.9 million for the same period in 2004, an improvement of
$0.6 million, or 15.4 percent.

"The current growth reflects well on the execution of the
Company's initiatives while at the same time preparing for the
close of the acquisition of Peak Medical Corporation, the
Company's first meaningful acquisition since its reorganization,"
said Richard K. Matros, Sun's chairman and chief executive
officer.  "The Company has established a strong platform for
continued growth," Mr. Matros continued.

For the nine months ended Sept. 30, 2005, Sun reported total net
revenues of $636.2 million and net income of $13.1 million, which
included income of $13.8 million on discontinued operations,
compared with total net revenues of $608.7 million and a net loss
of $14.2 million, for the nine months ended Sept. 30, 2004, which
included a loss of $18.6 million on discontinued operations.  Net
revenues for the nine months ended Sept. 30, 2005, increased
$27.5 million or 4.5 percent as compared to the nine months ended
Sept. 30, 2004.

For the nine months ended Sept. 30, 2005, Sun reported a loss from
continuing operations of $0.7 million, as compared to income from
continuing operations of $4.4 million, for the same period in
2004.  EBITDAR from continuing operations for the nine months
ended Sept. 30, 2005, decreased $3.5 million, or 7.2 percent, to
$44.8 million from $48.3 million for the same period in 2004, and
EBITDA from continuing operations for the nine months ended
Sept. 30, 2005, decreased $3.4 million, or 18.2 percent, to
$15.3 million from $18.7 million for the same period in 2004.  The
2004 net income, EBITDAR and EBITDA from continuing operations
included the forgiveness of $3.7 million of debt related to the
refinancing of six inpatient facility mortgages, $0.5 million of
restructuring-related vendor discounts, and other items discussed
in previous quarters such as general and professional, workers'
compensation and health insurances.

A full-text copy of the Company's quarterly report in Form 10-Q
filed with the Securities and Exchange Commission are available
for free at http://ResearchArchives.com/t/s?2bc

Headquartered in Albuquerque, New Mexico, Sun Healthcare Group,
Inc., with executive offices located in Irvine, California, owns
SunBridge Healthcare Corporation and other affiliated companies
that operate long-term and post-acute care facilities in many
states.  In addition, the Sun Healthcare Group family of companies
provides therapy through SunDance Rehabilitation Corporation,
medical staffing through CareerStaff Unlimited, Inc., home care
through SunPlus Home Health Services, Inc., and medical laboratory
and mobile radiology services through SunAlliance Healthcare
Services, Inc.  The Company filed for chapter 11 protection on
Oct. 14, 1999 (Bankr. D. Del. Case No. 99-03657).  Mark D.
Collins, Esq., and Christina M. Houston, Esq., at Richards, Layton
& Finger, P.A., represent the Debtor.  The Court confirmed the
Debtor's chapter 11 Plan on Feb. 6, 2002, and the Plan took effect
on Feb. 28, 2002.  

At Sept. 30, 2005, Sun Healthcare's balance sheet showed a
$109,509,000 stockholders' deficit, compared to a $123,380,000
deficit at Dec. 31, 2004.


TOM'S FOODS: Exclusive Plan Filing Period Extended Until Dec. 2
---------------------------------------------------------------          
The U.S. Bankruptcy Court for the Middle District of Georgia
further extended, through and including Dec. 2, 2005, the time
within which Tom's Foods Inc., has the exclusive right to file a
chapter 11 plan.  The Debtor also retains the exclusive right to
solicit acceptances from their creditors, through and including
Jan. 31, 2006.

The Debtor gave the Court three reasons in support of the
extension:

   1) its chapter 11 case is large and complex, with its business
      operations servicing 43 states through more than 2,000 sales
      routes and it has approximately 1,378 employees located at
      the company's headquarters in Columbus, Georgia and in
      facilities in Tennessee, Florida, Texas, and California;

   2) it has made progress in resolving a variety of issues facing
      its estate, including:

      a) stabilizing its business operations and finalizing issues
         in connection with post-petition financing,

      b) analyzing claims and examining various complicated issues
         impacting on reorganization alternatives in its chapter
         11 case, and

      c) consummating the sale of substantially all of its assets
         to Lance, Inc., for $37.9 million; and

   3) the extension of time will not harm its creditors because
      the it has been involved in ongoing discussions with its
      major creditor constituencies in connection with all aspects
      of its chapter 11 case and it is paying its ongoing
      administrative expenses as they become due.

Headquartered in Columbus, Georgia, Tom's Foods Inc. manufactures
and distributes snack foods.  Its product categories include
chips, sandwich crackers, baked goods, nuts, and candies.  The
Company filed for chapter 11 protection on April 6, 2005 (Bankr.
M.D. Ga. Case No. 05-40683).  David B. Kurzweil, Esq., at
Greenberg Traurig, LLP, represents the Debtor in its restructuring
efforts.  When the Debtor filed for protection from its creditors,
it listed total assets of $93,100,000 and total debts of
$79,091,000.


TORCH OFFSHORE: Court Approves Energy Partners Settlement Pact
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Louisiana
approved a settlement agreement between Torch Offshore, Inc., and
its debtor-affiliates, and Energy Partners, Ltd.

The parties entered into a Pipeline Installation Agreement dated
Oct. 18, 2004, as amended.  Energy Partners owes the Debtors
approximately $3.1 million for work performed under the Pipeline
Installation Agreement.

Prior to the chapter 11 filing, the Debtors retained certain
subcontractors as suppliers of some materials and services in
connection with the Agreement.  Some of the subcontractors allege
that they have not been paid for those materials and services
provided.  They have asserted liens against Energy Partners'
property and its co-working interest owners' property.  The exact
amount of the alleged liens is unknown with certainty and some
liens may not have not been properly asserted or perfected.

Pursuant to negotiations between the Debtors and Energy Partners,
the primary terms and conditions of the settlement include:

   1) Energy Partners will pay the Debtors $3.1 million, less
      $1,038,212, which will be retained for payment of liens
      against Energy Partners' property;

   2) The Debtors will prepare and file all pleadings necessary to
      approve the settlement and to terminate and reject the
      Pipeline Installation Agreement;

   3) Energy Partners will agree and waive any and all claims for
      rejection damages or postpetition administrative expense
      claims;

   4) The Debtors will continue to negotiate in good faith with
      subcontractors asserting liens and Energy Partners will be
      authorized to pay lien claims as directed by the Debtors;

   5) Both parties will enter into reciprocal releases for any and
      all claims related to the Pipeline Installation Agreement;

   6) The Debtors, to the extent necessary or required, will
      assign any and all of their claims against any applicable
      insurance policies to EPL regarding Builder's Risk Insurance
      Claim; and

   7) Energy Partners reserves its recoupment rights until all
      liens are released.

The settlement agreement will resolve the Debtors' substantial
claims against Energy Partners and potential liabilities of the
Debtors' estates to Energy Partners.

Headquartered in Gretna, Louisiana, Torch Offshore, Inc., provides  
integrated pipeline installation, sub-sea construction and support  
services to the offshore oil and gas industry, primarily in the  
Gulf of Mexico.  The Company and its debtor-affiliates filed for  
chapter 11 protection (Bankr. E.D. La. Case No. 05-10137) on  
Jan. 7, 2005.  When the Debtors filed for protection from their  
creditors, they listed $201,692,648 in total assets and  
$145,355,898 in total debts.


TORCH OFFSHORE: Can Walk Away from Pipeline Installation Pact
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Louisiana
gave Torch Offshore, Inc., and its debtor-affiliates permission to
reject a Pipeline Installation Agreement with Energy Partners,
Ltd.

The parties entered into a Pipeline Installation Agreement dated
October 18, 2004, as amended.

Under a settlement agreement with the Debtors, Energy Partners
agreed that it will waive any and all claims for rejection damages
and any postpetition administrative expenses claims arising out of
or related to the Pipeline Installation Agreement.

The settlement also provides that Energy Partners will have no
further obligation to make additional payments pursuant to the
said Agreement.  The Debtors will have no further claims against
Energy Partners.

The Debtors believe their decision to reject the agreement is an
appropriate exercise of their business judgment.

Headquartered in Gretna, Louisiana, Torch Offshore, Inc., provides  
integrated pipeline installation, sub-sea construction and support  
services to the offshore oil and gas industry, primarily in the  
Gulf of Mexico.  The Company and its debtor-affiliates filed for  
chapter 11 protection (Bankr. E.D. La. Case No. 05-10137) on  
Jan. 7, 2005.  When the Debtors filed for protection from their  
creditors, they listed $201,692,648 in total assets and  
$145,355,898 in total debts.


TRC COMPANIES: Delays Filing of Form 10-K to December 31
--------------------------------------------------------
TRC Companies Inc., (NYSE:TRR) reported that it has not filed its
Annual Report on Form 10-K for the fiscal year ended June 30, 2005
with the Securities and Exchange Commission by the Company's
previously stated Oct. 28, 2005, target.

The filing will be made as soon as practicable, and the Company
believes it will be made by Dec. 31, 2005.  The delay in filing
will permit the Company to complete its assessment of the
effectiveness of its internal controls over financial reporting,
as required by Section 404 of the Sarbanes-Oxley Act and to
complete its financial statements.  In addition, as previously
disclosed, the Company continues to evaluate the accounting for
certain elements of Exit Strategy contracts.  The impact on
current and prior years' revenue and earnings, if any, and the
need for restatement is unknown at this time.

                   Credit Facility Waiver

The Company maintains a revolving credit facility relationship
with Wachovia Bank, National Association, in syndication with
three additional banks, that supports the Company's operating and
investing activities.  The Company disclosed in its Quarterly
Report on Form 10-Q for the fiscal quarter ended March 31, 2005,
that it was not in compliance with the coverage ratio requirement
under the credit facility, that it had obtained a waiver of this
non-compliance from the banks for the period ended March 31, 2005,
but that it did not expect to be in compliance with this
requirement or the leverage ratio requirement for the subsequent
four fiscal quarters.

                    Forbearance Agreement

On Nov. 2, 2005, the Company entered into a Forbearance Agreement
with the banks under which the banks have agreed not to take any
action with respect to the enforcement of their rights under the
credit facility through Jan. 15, 2006, provided the Company
remains in compliance with other terms of the credit facility and
the Forbearance Agreement.  The Company has also engaged the
services of Glass & Associates, Inc., to assist it with compliance
under the credit facility.  Additionally, the available credit
under the facility has been limited to $62 million and the Company
has agreed not to incur any additional indebtedness without the
consent of the banks.  

                       NYSE Noncompliance

Because the Company has not filed its Form 10-K within 120 days of
the fiscal year end, the Company is not in compliance with NYSE
Rule 203.01.  The Company has provided notice to the NYSE and
indicated that the Company expects to deliver its Annual Report to
its stockholders promptly following the filing of its Form 10-K
with the SEC.

Chris Vincze, COO, stated, "While we are disappointed by the
delay, our business is strong in all of our markets, and we are
optimistic about the future."

TRC Companies Inc. -- http://www.TRCsolutions.com/-- is a  
customer-focused company that creates and implements sophisticated
and innovative solutions to the challenges facing America's
environmental, infrastructure, power, and transportation markets.
The Company is also a leading provider of technical, financial,
risk management, and construction services to commercial and
government customers across the country.


TRIGEM COMPUTER: Chapter 15 Petition Summary
---------------------------------------------
Petitioner: Il-Hwan Park
            Foreign Representative
            201-404 Shinshigsji Apartment
            Mok 6-dong, Yangchun-gu
            Seoul, Republic of Korea

Debtor: TriGem Computer Inc.
        1125-1 Shingil-dong
        Danwon-gu
        Ansan City Kyunggi-Do 425-839
        Korea

Case No.: 05-50052

Type of Business: The Debtor manufactures desktop PCs, notebook
                  PCs, LCD monitors, printers, scanners, other
                  computer peripherals, and PIDs and supplies over
                  four million PCs a year to clients all over the
                  world.  The Debtor has a global network of
                  production, research, marketing, logistics and
                  service centers in major markets in the U.S.,
                  Japan, China, Europe, Australia and Mexico.  
                  See http://www.trigem.com/

                  TriGem America Corporation, an affiliate of the
                  Debtor, filed for chapter 11 protection on
                  June 3, 2005 (Bankr. C.D. Calif. Case No.
                  05-13972).  TriGem Texas, Inc., another
                  affiliate of the Debtor, also filed for
                  chapter 11 protection on June 8, 2005 (Bankr.
                  C.D. Calif. Case No. 05-14047).

Section 304 Petition Date: November 3, 2005

Korean Court: Suwon District Court
              Bankruptcy Division

U.S. Court: Central District Of California (Los Angeles)

U.S. Judge: Thomas B. Donovan

Petitioner's Counsel: Charles D. Axelrod, Esq.
                      Stutman Treister & Glatt, P.C.
                      1901 Avenue of the Stars, 12th Floor
                      Los Angeles, California 90067
                      Tel: (310) 228-5600

Financial Condition as of March 31, 2005:

      Total Assets: KWR872.3 Billion

      Total Debts:  KWR774.6 Billion


TRONOX INC: S&P Assigns BB- Rating to $450-Mil Sr. Secured Loans
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB-' corporate
credit rating to Oklahoma City, Oklahoma-based Tronox Inc.  The
outlook is positive.

At the same time, Standard & Poor's assigned its 'BB-' rating and
its recovery rating of '3' to Tronox's proposed $450 million
senior secured credit facilities, based on preliminary terms and
conditions.  The rating on the senior secured credit facilities is
the same as the corporate credit rating; this and the recovery
rating of '3' indicate that bank lenders can expect a meaningful
recovery of principal in the event of a payment default.

In addition, Standard & Poor's assigned its 'B+' rating to the
company's $350 million senior unsecured notes due 2012 to be
issued under Rule 144a with registration rights.  The rating on
the unsecured notes is one notch below the corporate credit rating
based on Standard & Poor's expectation that the level of Tronox's
priority obligations will place holders of the unsecured notes at
a material disadvantage in terms of recovery prospects in a
bankruptcy scenario.

Tronox has filed an S-1 registration statement with the SEC
relating to a proposed initial public offering of its common
stock.  The net proceeds from the IPO, along with $550 million of
term loan and unsecured note borrowings, will be used to fund a
dividend payment to Tronox's parent, Kerr-McGee Worldwide Corp.

"The ratings on Tronox reflect the company's limited business
diversity, exposure to cyclical end markets and commodity product
cycles, and an aggressive financial profile including significant
environmental liabilities," said Standard & Poor's credit analyst
George Williams.  "These weaknesses are only partially offset by
Tronox's good geographical diversity, solid market positions
within the titanium dioxide markets, access to environmentally
compliant and proprietary process technology, and competitive cost
positions."

With about $1.4 billion in sales, Tronox is the third largest
global producer of TiO2, behind industry leader E.I. DuPont de
Nemours & Co. and Millennium Chemicals Inc.


TXU CORP: Earns $565 Million of Net Income in Third Quarter
-----------------------------------------------------------
TXU Corp.  (NYSE:  TXU) reported consolidated results for the
third quarter ended September 30, 2005.

TXU reported net income available to common shareholders of
$565 million for the third quarter of 2005 compared to reported
net income available to common shareholders of $665 million for
the third quarter 2004, a 72 percent increase on a per share
basis.

Reflecting the successful execution of its restructuring program
and in spite of challenging commodity and retail markets,
quarterly operational earnings, which exclude special items and
discontinued operations, were $574 million during the third
quarter of 2005 compared to $388 million for the third quarter
2004, a 78 percent increase in per share earnings.

For the nine months ended (year-to-date) September 30, 2005,
TXU reported net income available to common shareholders of
$1.356 billion compared to reported net income of $239 million for
year-to-date September 30, 2004.

Year-to-date operational earnings were $1.2 billion compared to
$704 million for year-to-date 2004, a 131 percent increase on a
per share basis.

TXU's outlook for operational earnings for 2005 has been increased
by $0.25 to $6.50 to $6.70 per share of common stock, reflecting
solid execution on the previous outlook and increased wholesale
market prices net of actions taken to mitigate the effect of
increased prices on customers.

                        Reported Earnings

In 2004, TXU launched a comprehensive restructuring program, which
included the disposition of non-core businesses, increased
investments in customer service and reliability, and a broad-based
operational improvement program.  The continuation of the
successful execution of this ongoing restructuring program is
evident in the company's quarterly results.  For the third quarter
of 2005, TXU's reported earnings of $565 million decreased 15
percent as compared to reported earnings of $665 million in the
third quarter of 2004, which included income from discontinued
operations of $287 million.  Income from continuing operations
was $571 million for the third quarter of 2005 compared to
$383 million for the comparable prior-year period.  

TXU's reported earnings for the third quarter of 2005 included a
loss from discontinued operations of $6 million and special
charges of $3 million after tax associated with transitional costs
related to TXU's outsourcing agreement with Capgemini Energy.  For
purposes of calculating the third quarter 2004 reported earnings
per share, the positive reported net income available to common
shareholders of $665 million is reduced by $268 million due to the
convertible senior notes adjustment.  For the third quarter of
2004, income from continuing operations included special charges
totaling $10 million primarily related to TXU's restructuring and
operational improvement program.

Reported earnings for year-to-date 2005 were $1.356 billion
compared to reported earnings of $239 million for the comparable
2004 period.  For the 2005 and 2004 year-to-date periods,
reported earnings include income from  discontinued  operations
of $6 million and $666 million.  Year-to-date 2004 reported   
earnings also include a $16 million extraordinary gain and an
$849 million buyback premium on exchangeable preferred membership
interests repurchased in April 2004.  Year-to-date 2005 income
from continuing operations was $1.360 billion compared to
$422 million for the comparable prior-year period.  Income from
continuing operations for year-to-date 2005 included special
credits, primarily associated with reductions in tax reserves and
insurance proceeds associated with litigation settlement expenses
net of transitional Capgemini outsourcing costs and other
restructuring-related expenses, totaling $150 million.  

For the comparable 2004 period, income from continuing operations
included special charges totaling $298 million primarily related
to TXU's restructuring and operational improvement plan
implemented in 2004.  For purposes of calculating the 2005
year-to-date reported earnings per share, net income available to
common shareholders  was  reduced by $498  million, due to the
true-up of the company's accelerated share repurchase program.
This amount represented the difference between the initial price
of the shares and the actual cost of the shares repurchased by the
counterparty under the program.  The actual cash true-up of
$523 million, including fees and expenses, was paid in May upon
completion of the program.  For purposes of calculating 2004
year-to-date reported earnings per share, reported net income
available to common shareholders was reduced by $268 million due
to the convertible senior notes adjustment.

                      Operational Earnings

Third quarter operational earnings increased from $1.32 per share
in 2004 to $2.35 per share in the third quarter of 2005, an
increase of 78 percent.  This strong growth rate reflected
improvements in contribution margins and reductions in operating
costs and selling, general and administrative (SG&A) expense in
TXU's core businesses, demonstrating the continued successful
implementation of TXU's restructuring program.  The earnings per
share improvement also shows the impact of fewer average common
shares outstanding, partially offset by increased corporate and
other expenses.

"TXU had a strong quarter overall, although performance across our
business was mixed.  We faced many challenges in delivering solid
results this quarter, but none as daunting as the volatile
commodity prices," said C. John Wilder, chairman and CEO of TXU
Corp.  Retail headroom reached negative levels during the quarter
as wholesale power prices increased and ultimately forced TXU
Energy to request a price-to-beat increase.  At the same time, we
saw exceptional results from the TXU Operating System with record
production from our baseload generation.  TXU Electric Delivery
responded exceptionally well to the vast hurricane relief,
restoring power to more than 600,000 customers in Texas, Louisiana
and Florida.  On balance, the continued success of the
restructuring and operational improvement program substantially
offset the impact of the negative headroom in our retail
operations.  

To reduce future losses in a market with historically low
headroom, TXU Energy will continue to focus on its cost management
initiatives and introduce new products to protect customers from
these volatile prices through 2006.  The first set of these new
products, including low-income assistance and a price protection
offering, was announced previously and more will be offered soon.  
These new products, along with having one of the lowest prices of
any incumbent in the market, are part of TXU's drive to continue
to provide exceptional customer service to existing and potential
TXU Energy customers."

Operational earnings of $4.94 per share for the 2005 year-to-date
period increased $2.80 per share compared to 2004.  The improved
results reflect improved performance from the TXU Energy Holdings
and TXU Electric Delivery segments, reduced preference stock
dividends, and fewer average common shares outstanding, partially
offset by increased corporate interest expense.

TXU Corp. -- http://www.txucorp.com/-- a Dallas-based energy   
company, manages a portfolio of competitive and regulated energy
businesses in North America, primarily in Texas.  In TXU Corp.'s
unregulated business, TXU Energy provides electricity and related
services to 2.5 million competitive electricity customers in
Texas, more customers than any other retail electric provider in
the state.  TXU Power has over 18,300 megawatts of generation in
Texas, including 2,300 MW of nuclear and 5,837 MW of lignite/coal-
fired generation capacity.  The company is also one of the largest
purchasers of wind-generated electricity in Texas and North
America.  TXU Corp.'s regulated electric distribution and
transmission business, TXU Electric Delivery, complements the
competitive operations, using asset management skills developed
over more than one hundred years, to provide reliable electricity
delivery to consumers.  TXU Electric Delivery operates the largest
distribution and transmission system in Texas, providing power to
more than 2.9 million electric delivery points over more than
99,000 miles of distribution and 14,000 miles of transmission
lines.

                         *     *     *

As reported in the Troubled Company Reporter on Feb. 1, 2005,
TXU Corp. securities rated by Fitch Ratings remain unchanged
following the announcement that TXU reached a comprehensive
settlement agreement resolving potential claims relating to TXU
Europe.  The ratings are:

   -- Senior unsecured 'BBB-';
   -- Preferred stock 'BB+';
   -- Commercial paper 'F3'.


U.S. REMEDIATION: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: U.S. Remediation Services, Inc.
        6583 Merchant Place, #303
        Warrenton, Virginia 20187

Bankruptcy Case No.: 05-15785

Chapter 11 Petition Date: October 16, 2005

Court: Eastern District of Virginia (Alexandria)

Judge: Robert G. Mayer

Debtor's Counsel: Richard J. Stahl, Esq.
                  Stahl, Forest & Zelloe, P.C.
                  11350 Random Hills, Road, Suite 700
                  Fairfax, Virginia 22030
                  Tel: (703) 691-4940
                  Fax: (703) 691-4942

Estimated Assets: $0 to $50,000

Estimated Debts:  $1 Million to $10 Million

Debtor's 20 Largest Unsecured Creditors:

   Entity                                   Claim Amount
   ------                                   ------------
NC-WC, L.P.                                   $1,353,728
Assigneee for Washovia Bank
P.O. Box 1068
Stafford, TX 77497

American Guarantee & Liability                  $225,000
c/o Mark Brennan, Sr., Esq.
Vandeventer Black, LLP
707 East Main Street, #700
Richmond, VA 22321

Aramsco                                         $135,145
P.O. Box 18
Thorofare, NJ 08086

Jeffrey A. Sullivan                             $105,000

Anita VanSice                                   $100,000

Bullseye                                         $85,152

Zurich American Insurance Company                $82,646

W. Boling Izard                                  $75,000

Victoria L. Sullivan                             $70,877

TES Environmental Corp.                          $66,549

Hertz Equipment Rental                           $45,136

Fred Neithamer                                   $40,000

Contract Carpet Systems, Inc.                    $36,953

Waste Mngt-Hampton Roads                         $35,751

David J. Fudala, Esq                             $34,167

International Aademy, Inc.                       $31,000

Ashley Sullivan                                  $30,000

Capital Clean-Up                                 $29,918

Case Credit Corporation                          $29,453

Ramada Limited                                   $28,654


U.S. STEEL: Fitch Rates $600 Million Senior Secured Loan at BB+
---------------------------------------------------------------
Fitch Ratings has affirmed the ratings of United States Steel
Corporation securities:

     -- Senior unsecured debt 'BB';

     -- $600 million senior secured revolving credit facility
        'BB+'

     -- Series B mandatory convertible preferred shares 'B+'.

     -- Issuer default rating 'BB'.

Fitch also revises U.S. Steel's Rating Outlook to Positive from
Stable.

The ratings reflect permanent improvements to U. S. Steel's assets
and capital structure afforded by extraordinarily robust market
conditions.  Earnings will continue to be affected by the cyclical
nature of the steel market as well as high natural gas prices.

U. S. Steel's performance for the first nine months has exceeded
expectations on operating flexibility and discipline in the face
of temporarily high inventories.  The outlook for domestic steel
pricing is supported by tight raw materials supply and high
natural gas prices each of which constrains production as well as
high transportation costs and the weak U.S. dollar, which
discourages imports.

Last twelve months EBITDA topped $2 billion and covered interest
expense by 12.5 times.  While fourth quarter 2005 results are
expected to be below results for the fourth quarter of 2004, U.S.
Steel should be in a net cash position at year-end.  In the near
term, Fitch expects leverage as measured by EBITDA to Total Debt
to remain in the 1x range.  Liquidity is very strong with cash on
hand of $1.4 billion and availability under facilities of $1.1
billion.

The Outlook revision to Positive reflects Fitch's view that U.S.
Steel will continue to improve its asset base while preserving its
strong liquidity and conservative capital structure over the next
twelve to eighteen months.

U. S. Steel is the second largest integrated producer of steel in
the United States and has a worldwide raw steel capability of
nearly 27 million tons per year.  U.S. Steel produces a wide
variety of steel products, is a leading supplier of carbon sheet
to the automotive and appliance industries, and is the second
largest tin mill product producer in North America.  U. S. Steel
is the largest domestic producer of seamless oil country tubular
goods used in oil/gas drilling.


UBIQUITEL INC: Earns $6.2 Million of Net Income in Third Quarter
----------------------------------------------------------------
UbiquiTel Inc. (Nasdaq: UPCS), a PCS Affiliate of Sprint Nextel
Corporation (NYSE: S), reported financial and operating results
for the quarter ended Sept. 30, 2005.

Net income for the third quarter 2005 was $6.2 million, compared
to $1.5 million, in the third quarter 2004.   In the third quarter
2005, the company incurred $1.7 million of expense associated with
litigation against Sprint Nextel and $800,000 for restructuring
charges relating to its sales organization.  Excluding these
charges, net income was $8.7 million.

Adjusted EBITDA in the third quarter 2005 grew 29% to
approximately $29.9 million from the same period a year ago.
Excluding the above charges, Adjusted EBITDA in the third quarter
2005 grew 40% to approximately $32.4 million from the same period
a year ago.

Service revenues in the third quarter 2005 grew 11% to
approximately $105.0 million from the same period a year ago.

Net subscriber additions for the quarter were approximately
10,700, bringing total subscribers, excluding resellers, to
approximately 434,300.  Churn was 2.6% in the third quarter 2005
compared to 2.9% in the third quarter 2004.

"Excluding Sprint Nextel litigation expense and restructuring
charges, our Adjusted EBITDA margin grew to 31% compared to 29% in
the second quarter 2005 and 25% in the third quarter 2004," said
Donald A. Harris, chairman and CEO of UbiquiTel Inc. "During the
third quarter 2005, we completed a restructuring of our sales
organization and re-focused our marketing towards our fastest
growing segments, markets and products.  We expect our new plans
to pay dividends in the fourth quarter in terms of improved
subscriber growth and lower CPGA."

Total revenues were approximately $108.8 million for the third
quarter 2005, comprised of $71.7 million of subscriber revenues,
$33.3 million of roaming and wholesale revenues and $3.8 million
of equipment revenues.  Subscriber revenues increased 10% from the
third quarter 2004. Roaming and wholesale revenues increased 15%
over the same period.  Operating income grew 36% to $16.4 million
in the third quarter 2005.

UbiquiTel is the exclusive provider of Sprint digital wireless
mobility communications network products and services under the
Sprint brand name to midsize markets in the Western and Midwestern
United States that include a population of approximately 10.8
million residents and cover portions of California, Nevada,
Washington, Idaho, Wyoming, Utah, Indiana, Kentucky and Tennessee.

                          *     *     *

As reported in today's Troubled Company Reporter, Standard &
Poor's Rating Services placed its ratings on Conshohoken,
Pennsylvania-based UbiquiTel Inc. and its operating subsidiaries,
including the 'CCC+' corporate credit rating, on CreditWatch with
positive implications.


UBIQUITEL INC: Wireless Unit Returns Spur S&P to Review Ratings
---------------------------------------------------------------
Standard & Poor's Rating Services placed its ratings on
Conshohoken, Pennsylvania-based UbiquiTel Inc. and its operating
subsidiaries, including the 'CCC+' corporate credit rating, on
CreditWatch with positive implications.

The action is based on steady improvement in the company's
wireless business, including continued subscriber growth,
increased roaming and wholesale revenues, and improved operating
efficiencies that have resulted in better EBITDA margins and
strengthening credit measures.  Debt outstanding at           
Sept. 30, 2005, totaled approximately $424 million.

"We will resolve the CreditWatch listing upon further review of
UbiquiTel's business and financial prospects," said Standard &
Poor's credit analyst Susan Madison.  Specific areas of review
will include the long-term subscriber growth trends, recent sales
and marketing changes, and the company's plans for capital
deployment over the next few years.

Upgrade potential likely will by limited to one notch because of
concerns about slower subscriber growth going forward and the
significant capital program currently underway at the company to
upgrade its network and launch evolution data optimized
capabilities in certain markets.

S&P's review will not be contingent on the outcome of the
company's pending litigation with Sprint Nextel Corp.


UQM TECHNOLOGIES: Losses Continue in FY 2006 2nd Quarter
--------------------------------------------------------
UQM Technologies Inc. delivered its financial results for the
quarter ended Sept. 30, 2005, to the Securities and Exchange
Commission on Oct. 27, 2005.

UQM reported a $576,708 net loss on $884,000 of revenues for the
three months ended Sept. 30, 2005, compared to a $380,251 net loss
on $1,234,477 of revenues for the same period in 2004.  The
Company had incurred net losses of $1,868,896, $4,786,953 and
$3,598,650, for the fiscal years ended March 31, 2005, 2004 and
2003, respectively.  At Sept. 30, 2005, the Company had
accumulated deficit of $55,319,390.

Loss from continuing operations for the quarter ended Sept. 30,
2005 was $543,438 versus a loss from continuing operations of
$378,461 for the comparable period last year.  Management
attributes the increase in losses to higher expenditures for
production engineering and internally funded research and
development expenses.

Loss from discontinued operations for the quarter and six months
ended Sept. 30, 2005 was $33,270 and $43,701, respectively,
compared to a loss from discontinued operations of $1,790 and
$18,972 for the comparable prior year periods

UQM's balance sheet showed $15,601,850 of assets at Sept. 30,
2005, and liabilities totaling $1,818,097.  Cash and cash
equivalents and short-term investments at Sep. 30, 2005, were
$10,629,581.  At Sept. 30, 2005, the Company had working capital
of $11,582,587.

                   Hussmann Litigation

UQM previously reported a claim filed by Hussmann Corporation
filed in the Circuit Court of St. Charles County, Missouri.  On
December 17, 2004, the Court dismissed with prejudice all of
Hussmann's claims against.  Hussmann subsequently filed an appeal
with the Missouri Court of Appeals.

On Oct. 4, 2005 the Missouri Court of Appeals rejected Hussmann's
appeal. Hussmann did not file a motion seeking a rehearing within
the 15-day deadline, resulting in a final adjudication by the
appellate court denying Hussmann's claims against the Company, and
thereby concluding the litigation.

                  About UQM Technologies

Headquartered in Frederick, Colorado, UQM Technologies, Inc. --
http://www.uqm.com/-- is a developer and manufacturer of power  
dense, high efficiency electric motors, generators and power
electronic controllers for the automotive, aerospace, medical,
military and industrial markets.  A major emphasis of the Company
is developing products for the alternative energy technologies
sector including propulsion systems for electric, hybrid electric
and fuel cell electric vehicles, 42-volt under-the-hood power
accessories and other vehicle auxiliaries and distributed power
generation applications.  The Company generates revenue from two
principal activities: 1) research, development and application
engineering services that are paid for by its customers; and 2)
the sale of motors, generators and electronic controls.


USEC INC: Posts $5.2 Million Net Loss in Third Quarter
------------------------------------------------------
USEC Inc. (NYSE:USU) reported that its business fundamentals
continued to improve.  The impact of spending on the American
Centrifuge resulted in GAAP-basis net losses of $5.2 million for
the third quarter of 2005 and $7.3 million for the nine-month
period of 2005.  Pro forma net income before American Centrifuge
expenses was $7.2 million for the third quarter and $33.4 million
for the nine-month period ended September 30, 2005.  Pro forma net
income before American Centrifuge expenses in the same periods of
2004 was $7.9 million and $17.9 million for the quarter and nine-
month period, respectively.

Several financial measures showed significant improvement in the
first nine months as revenue increased by $240.9 million, gross
profit improved by $22.7 million and cash flow from operations
improved by $182.4 million dollars compared to the same period in
2004.

"The strength of our core business has been clearly evident in
2005," said John K. Welch, USEC president and chief executive
officer. "Revenue from all business segments, gross profit and
cash flow are all substantially higher year over year through the
third quarter.  Customer orders indicate strong revenue again this
year in the fourth quarter and we expect a solid finish to 2005.

"In my first month as CEO, I have visited all of USEC's facilities
to learn more about our business. I 've been impressed with the
management team, the professionalism and enthusiasm of our
employees, and the exciting potential of the American Centrifuge
technology.  I'm also in the process of reviewing the overall
goals and schedules for the American Centrifuge.  My experience
with major projects and complex technical deployments gives me
confidence that the American Centrifuge technology will perform as
expected."

As planned, American Centrifuge expenses have increased year over
year as more employees and contractors become involved in
demonstrating the advanced uranium enrichment technology and
preparing the American Centrifuge Plant.  USEC is currently
expensing most of its spending related to the American Centrifuge,
and this accounting treatment directly reduces net income.

On a GAAP basis, USEC reported a net loss of $5.2 million for its
third quarter ended Sept. 30, 2005, compared to a loss of $2.3
million in the same quarter of 2004.  In the nine-month period,
the Company reported a net loss of $7.3 million compared to a loss
of $4.7 million in the same period of 2004.  USEC substantially
completed a corporate headquarters restructuring during the third
quarter that resulted in a charge of $4.5 million ($2.8 million
after tax).  USEC previously restated quarterly results for 2004.

Revenue for the third quarter was $421 million, an increase of
$165.1 million or 65% over the same quarter last year.  The
improvement was due to higher SWU sales volumes offset by a
slightly lower average price billed to customers.  Uranium revenue
nearly tripled compared to the same quarter last year when sales
volume was low.  Revenue in the nine-month period was $1,009.6
million, a 31% increase over the same period of 2004.  The
improvement in the nine-month period reflects a 30% increase in
SWU sales volume, a 34% increase in uranium sales volume, and a 29
percent increase in revenue from U.S. government contracts, which
includes NAC International activities.

Much of the natural uranium delivered during the third quarter was
contracted several years ago at prices well below today's market
indicators while uranium generated more recently through
underfeeding the enrichment process at the Paducah plant is being
sold at today's higher prices.  Under the Company's revenue
recognition policy, USEC transfers title and collects cash from
customers for uranium sales but does not recognize the revenue
until the uranium leaves USEC property as low enriched uranium.  
At Sept. 30, 2005, $133 million in revenue has been deferred until
subsequent quarters with an expected gross profit of $64 million.

At Sept. 30, 2005, USEC had a cash balance of $147.3 million
compared to $15 million one year earlier.  Cash flow from
operations was $182.4 million more than the comparable nine-month
period of 2004.  Because about one-third of the Company's annual
SWU deliveries will occur in the fourth quarter of 2005, USEC
expects substantial cash flow from operating activities in the
fourth quarter and the first quarter of 2006 from customer
collections.

USEC expects to initially repay the $325 million 6.625% senior
notes due January 20, 2006 with a combination of cash on hand and
borrowings under the revolving credit facility.  USEC also expects
to file a shelf registration statement with the U.S. Securities
and Exchange Commission in the first half of 2006 to enable the
Company to sell various securities, including debt and equity.

                    American Centrifuge Update

As expected, demonstration costs for the American Centrifuge
increased 80 percent to $65.6 million ($40.7 million after tax) in
the first nine months of 2005, compared to $36.4 million ($22.6
million after tax) in the same period last year.  The higher costs
reflect an increased number of employees and specialized outside
contractors working on demonstrating the technology and
refurbishing the American Centrifuge Plant, as well as equipment
purchases and centrifuge manufacturing activities.  Spending that
was capitalized in the nine-month period totaled $11.9 million.  
In addition, Advanced Technology costs include $1.5 million of
research and development by NAC on MAGNASTOR(TM), its spent fuel
storage product.

USEC is in the process of demonstrating its next-generation
American Centrifuge uranium enrichment technology.  Progress has
been made in addressing performance and component material issues
reported in August, and the Company remains on track to meet all
milestones established in the DOE-USEC Agreement.  The next
milestone - satisfactory reliability and performance data obtained
from the lead cascade - is in October 2006.

USEC is currently testing individual prototype machines in special
test equipment located in Oak Ridge, Tennessee.  Testing at this
facility allows for modifications to be made to centrifuge
components before a group of centrifuge machines are constructed
and configured into the Lead Cascade of the American Centrifuge
Demonstration Facility, which is expected to begin operating in
the first half of 2006. USEC continues to confirm the performance
metrics previously demonstrated by DOE and these metrics'
relationship to schedule and cost.  The Company believes the
effort taken now will allow USEC to optimize the machines and
cascade configuration for the commercial plant.

During the quarter, the process to license the American Centrifuge
Plant continued as the U.S. Nuclear Regulatory Commission held a
public hearing on the draft environmental impact statement.  The
NRC is expected to release the final environmental impact
statement in April 2006.  In addition, the NRC's Atomic Safety and
Licensing Board denied the petitions of the only two interveners
seeking to participate in the hearing process for the plant's
license application.  The licensing board reviewed and found
inadmissible each of the more than 25 individual contentions
submitted by the petitioners concerning USEC's application to
build and operate the uranium enrichment plant.  The interveners
have appealed the decision.

                     Credit Facility

In August 2005, USEC entered into a five-year, $400 million
revolving credit facility that replaced an expiring three-year,
$150 million credit facility.  The credit facility provides
financial flexibility and is available to finance working capital
needs, refinance existing debt and fund capital programs,
including the American Centrifuge Plant.  Borrowings under the new
facility are subject to limitations based on established
percentages of eligible accounts receivable and inventory.  USEC
has not borrowed on its credit facilities in 2005 and does not
expect to borrow for the remainder of this year.

                 Electric Power Arrangements

Discussions regarding electric power arrangements continue between
USEC and the Tennessee Valley Authority, as well as other energy
providers.  Capacity and prices under the Company's 10-year
contract with TVA are fixed through May 2006, and power
arrangements beyond that time are being discussed.  The Company
purchased approximately $305 million in electricity in 2004.

                         Staff Reduction

As part of its workforce realignment, USEC has initiated a staff
reduction of approximately 200 employees at its field operations
in Paducah, Kentucky and Piketon, Ohio.  A severance benefits
charge in a range of $2 to $3 million is expected in the fourth
quarter.  The reductions are expected to result in approximately
$10 million in annual production costs savings beginning in 2006.

USEC Inc., -- http://www.usec.com/-- a global energy company, is  
the world's leading supplier of enriched uranium fuel for
commercial nuclear power plants.

                        *     *     *

As reported in the Troubled Company Reporter on Aug. 12, 2005,
Standard & Poor's Ratings Services lowered its corporate credit
rating on USEC Inc. to 'B+' from 'BB-'.  The outlook is negative.
     
"The rating action reflects our concern about substantial power
cost increases expected in May 2006 when the company's current
below-market electricity supply contract expires," said Standard &
Poor's credit analyst Dominick D'Ascoli.  "We estimate that USEC's
electricity costs could increase by well over $100 million
annually considering current power rates.  We are also concerned
about potential delays in achieving full production at USEC's
proposed commercial facility by 2010, given the scope of this
project and commercialization of unproven technology.  Delays in
securing financing and construction could give a potential
competitor, Louisiana Energy Services, an advantage in the market,
as LES plans to build its own enrichment facility in the U.S."


VITAMIN SHOPPE: Moody's Lowers $116 Mil. Bank Loan's Rating to B2
-----------------------------------------------------------------
Moody's Investors Service downgraded the Corporate Family Rating
of Vitamin Shoppe Industries, Inc. to B2 and assigned a B2 rating
to the proposed $165 million senior secured note issue.  The
outlook remains stable.  Together with initial borrowings of about
$12 million on the proposed unrated $50 million asset-based
revolving credit facility being simultaneously arranged with the
senior notes, net proceeds will refinance all existing debt
including the rated bank credit facility, $52 million of unrated
senior subordinated notes, and $19.5 million of unrated Holding
Company notes.

The lower Corporate Family Rating reflects:

   * the weak revenue trends confronting the vitamin industry;

   * the less flexible post-transaction capital structure with
     respect to debt reduction; and

   * Moody's opinion that debt protection measures will remain
     near current levels for the medium-term.

Lease-adjusted leverage increases to about 6.1 times from 5.9
times as a result of the proposed transaction.

These ratings are downgraded:

   * Corporate Family Rating (previously called the Senior Implied
     Rating) to B2 from B1; and

   * $116 million secured bank loan to B2 from B1.

This rating is assigned (subject to review of final
documentation):

   * $165 million senior secured notes at B2.

The rating on the secured bank loan will be withdrawn following
completion of this proposed transaction.

The ratings reflect:

   * Moody's expectation that Vitamin Shoppe's higher financial
     leverage and lower fixed charge coverage will not
     substantially improve in the near-term;

   * the decelerating growth pace of overall vitamin, mineral, and
     nutritional supplement ("VMS") sales; and

   * the high degree of competition from traditional and non-
     traditional VMS retailers.

The new capital structure constrains debt reduction with
discretionary cash flow (even though the weighted average cost of
debt will be lower).  Sales attrition in the direct sales segment
and the need for continuous product innovation given the short
life cycle of many VMS products also limit the ratings.

However, the ratings recognize:

   * the good average unit volume and solid store level margin of
     Vitamin Shoppe relative to other chain VMS retailers;

   * the positive contribution to corporate overhead from all
     stores that have been open for more than six months;

   * the revenue diversity from several geographies;

   * the wide and deep product offering; and

   * the sizable direct sales segment.

The personal lifestyle commitment of many customers to the
company's products and Moody's belief that capital investment is
flexible over the medium-term also support the ratings.

The stable rating outlook reflects Moody's expectations that the
company's financial profile will modestly improve as it:

   1) increases revenue mostly from new store openings; and
   2) reduces leverage through growing free cash flow.

Ratings would be lowered if performance declines at the new and/or
existing stores such that EBIT margin falls below 3.5% or EBITDA
fails to cover interest expense and capital expenditures.
Improvement of ratings from current levels will require
sustainable improvement in operating cash flow such that EBIT
margin approaches 6% and lease adjusted leverage falls below 5
times on a sustainable basis.

The B2 rating on the senior secured notes considers the security
pledge of all assets of the company and its operating subsidiaries
and the guarantees provided by the operating subsidiaries.  These
notes have a subordinate claim on collateral relative to the
unrated $50 million asset based revolving credit facility.  The
collateral does not result in notching above the corporate family
rating because all long-term debt in the company's capital
structure is secured.  Moody's believes that most recovery for
these secured notes would result from residual enterprise value
given that intangible assets comprise about 62% of the post-
transaction balance sheet.

Pro-forma for this financing transaction, lease adjusted debt
equals 6 times EBITDAR and fixed charge coverage is about 1 time.
Average store revenue of about $1.5 million and store margin have
stabilized (following years of improvement) over the previous year
as the abrupt decline in popularity of the low-carbohydrate
category has adversely impacted the entire VMS industry.

Over the next few years, the company intends to invest most excess
cash flow for new store development largely in higher-growth
regions outside of the Northeast.  Consequently, Moody's
anticipates that operating statistics and debt protection measures
will not significantly change from current expected levels.
Moody's anticipates that the company will have about $28 million
of revolving credit availability per the borrowing base formula
and that the revolver will only be used for temporary working
capital purposes.

Vitamin Shoppe Industries, Inc, headquartered in North Bergen, New
Jersey, retails vitamins, minerals, and nutritional supplements
through direct marketing activities and 260 retail locations.  The
company generated revenue of $416 million for the twelve months
ending September 2005.


W.R. GRACE: Futures Rep. Says Asbestos Bar Date is Useless
----------------------------------------------------------
David T. Austern, the legal representative for future asbestos
claimants, objected to W.R. Grace & Co. and its debtor-affiliates'
request to set January 12, 2006, as the deadline for asbestos
personal injury claimants to file a proof of claim.

Mr. Austern asserts that the Debtors' imposition of a bar date for
asbestos personal injury prepetition litigation claims should be
denied.  The parties have already addressed the same issue before
and the Court had rejected the Debtors' previous request.  There
is no good reason for the U.S. Bankruptcy Court for the District
of Delaware or the parties to spend any more time on the bar date
question, Mr. Austern says.

According to the Futures Representative, a bar date for PI Claims
would serve no useful purpose as the Debtors do not propose to
pay these claims during their Chapter 11 cases.  "The Debtors are
not even proposing to process any such claims during these cases;
review, processing and determination of eligibility for payment
are all to be conducted, following the effective date of a
confirmed plan, pursuant to Trust Distribution Procedures to be
approved by the Court," Mr. Austern contends.

The Debtors cannot seriously contend that they do not know the
identity of the personal injury claimants whom they seek to bar,
the Futures Representative asserts.  The Debtors' request applies
solely to those personal injury claimants who filed suit against
the Debtors prior to the Petition Date.  A debtor concerned about
the level of asbestos claims already should have conducted
discovery or performed due diligence with respect to those long-
known claims.

The Futures Representative believes that the Debtors' goal "is
simply to make it more difficult for asbestos personal injury
claimants to preserve their clams against a futures trust and
effectively cause an artificially lower future claims forecast."  
The Futures Representative asserts that there is no basis for
imposing a bar date.

The Debtors had indicated that they are concerned that claimants
will not respond to the Questionnaire, which the Court had
previously approved.  The Futures Representative points out that,
as the Court has already ruled, that concern is more
appropriately addressed by means other than a claims bar date.

Mr. Austern notes that when considering approval of the
Questionnaire, the Court included this language in the approved
Questionnaire:

    The Court has ordered that, as part of the discovery process,
    all holders of prepetition asbestos personal injury claims
    must complete and return this questionnaire.  Thus, failure
    to timely return the questionnaire as completely and
    accurately as possible may result in sanctions and other
    relief available under applicable rules.

The Futures Representative says that this approach vests
discretion in the Court to fashion an appropriate remedy if there
turns out to be a real problem.  Moreover, the various parties'
experts are free to take the level of responses to the
Questionnaire into account in formulating their projections.  
These remedies are more appropriate, and more equitable, than the
Debtors' proposed penalty of permanently barring any recovery for
as many claimants as possible.

Furthermore, the Futures Representative argues that the Debtors'
proposed claim estimation process is just an estimation of the
projected aggregate level of present and future claims for
purposes of funding the Debtors' proposed plan trust.  This
process is not, and constitutionally cannot be, the means by
which any individual asbestos claim is determined.

"There is no place in this process for a determination of whether
any specific asbestos should be allowed.  Neither the Court nor
any of the parties need to preclude individual claims
permanently, in order to develop reasonable estimate in the
aggregate," Mr. Austern asserts.

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


WATERMAN INDUSTRIES: Court Approves Amended Disclosure Statement
----------------------------------------------------------------
The Honorable W. Richard Lee of the U.S. Bankruptcy Court for the
Eastern District of California approved, on October 27, Waterman
Industries, Inc.'s Amended Disclosure Statement explaining its
Amended Plan of Reorganization.

Judge Lee is satisfied that the Disclosure Statement contains
adequate information -- the right amount of the right kind of
information -- that would enable a hypothetical investor to make
an informed judgment about the Plan.

With a Court-approved Disclosure Statement in hand, the Debtor can
now solicit acceptances of the Plan from its creditors.

The Court will convene a hearing on December 1, 2005, at 3:00 p.m.
to discuss the merits of the Plan.

                         Plan Funding

The Plan provides for the sale of all of the Debtor's assets,
except for real property, and certain litigation and account
receivables, to an entity formed by Galena National Investments
LLC.  Galena National is a successor in interest to Wells Fargo
Bank and asserts a first priority lien in a majority of the
Debtor's assets.  

Galena National's purchase proposal includes:

    a) a $1.25 million cash payment;
    
    b) the assumption of all of the Debtor's debt to Galena;

    c) the assumption of ordinary course post-petition trade
       payables and ordinary course employee expenses not paid   
       prior to the effective date of the Plan; and

    d) the lease of a portion of the Manufacturing Facility for an
       amount necessary to cover all payments to San Joaquin Bank.

As part of the sale agreement, Galena National agrees to forego
any deficiency unsecured claims it has against the Debtor.

The $1.25 million cash received from Galena National, the proceeds
from litigation to be filed by the Debtor and the proceeds from
certain accounts receivable will be used to pay the Debtor's
remaining creditors.  The Debtor estimates the total amount
available for distribution to general unsecured creditor at
$739,200 to $2,839,000.  Clifford Bressler, the Plan General
Manager, will manage all collections and distributions to be made
under the Plan.   

The Debtor's receivables include tax refunds totaling $55,922 and
trade receivables with a collectible value between $450,000 to
$650,000.  The Debtor is entitled to retain the first $450,000
from the proceeds of the trade receivable and any excess will be
shared with Galena National.

The Debtor expects to collect approximately $2 million from a
lawsuit it intends to pursue against certain parties.  The Plan
sets aside $200,000 to pay costs associated with the litigation.

                      Treatment of Claims

Approximately $1.6 million of San Joaquin Bank's $2.3 million
claim will be treated as a secured claim.  The claim, secured by a
mortgage lien on the Debtor's Manufacturing Facility and Foundry,
will bear a 7% interest and will be paid in monthly installments
beginning at $12,500 per month and gradually increasing to $16,500
monthly. The Debtor allows San Jaoquin to foreclose on the
Manufacturing Facility if the Lease with Galena National
terminates prior to the full payment of its claim.

The estimated unpaid priority wage claims of $100,000 and health
and benefit claims of $400,000 will be paid in full on the
effective date of the Plan.     

Priority tax claims will be paid, with statutory interest, either
on the effective date of the Plan or by deferred payments for a
period not exceeding six years after the date of the claim
assessment.

Oil City Iron Works, which holds a $210,000 secured claim, will be
allowed to foreclose on certain patterns that secure its claim.  
Any deficiency amounts will be allowed as a general unsecured
claim.

General Unsecured Claims will receive pro rata distributions from
any proceeds of Plan Assets after payment of all other secured and
priority claims.  The General Manger will schedule the payments.

Unsecured Convenience Class Claims will receive the lesser of 50%
of the allowed claim or $250.  Holders of General Unsecured Claims
equal to or less than $500 are automatically included under this
class. The General Manger will schedule the payments.

Equity holders will get nothing under the Plan.

Headquartered in Exeter, California, Waterman Industries, Inc.
-- http://www.watermanusa.com/-- provides water and irrigation    
control services.  The Company filed for chapter 11 protection on
February 10, 2004 (Bankr. E.D. Calif. Case No. 04-11065).  Riley
C. Walter, Esq., at Walter Law Group, represents the Debtor in its
restructuring efforts.  When the Debtor filed for protection from
its creditors, it listed more than $10 million in estimated assets
and debts.


WENDY'S INT'L: Continued Decline Cues Moody's to Review Ratings
---------------------------------------------------------------
Moody's Investors Service placed all ratings of Wendy's
International, Inc. on review for possible downgrade.  The review
was prompted by continued deterioration in same store sales at the
Wendy's and Baja Fresh concepts that have not decelerated as
previously expected, largely due to competitive pressures, in
addition to a continued erosion of operating margins driven by the
negative sales trend and exacerbated by historically high
commodity prices.

The review also reflects concerns related to continued poor
operating performance at the Wendy's concept in the context of
Wendy's previously announced strategic initiatives, which:

   * over the near term (6 to 12 months) include:

     -- the sale of up to 18% of Tim Horton's,
     -- the sale of real estate assets, and
     -- the repayment of approximately $100 million of debt; and

   * over the longer-term the potential spin-off of Tim Horton's
     entirely.

These ratings were placed on review for possible downgrade:

* Senior unsecured notes rated Baa2
* Senior unsecured shelf registration rated (P)Baa2
* Subordinated shelf registration rated (P)Baa3
* Preferred stock shelf registration rated (P)Ba1
* Commercial Paper rating of P-2

In the third quarter of 2005 the Wendy's brand reported a decline
in same store sales of 5% for owned stores and 5.5% for franchised
units extending the deterioration of same store sales for this
core concept to four consecutive quarters.  As a result of
continued weakness at the Wendy's brand, ongoing challenges at the
Baja Fresh concept, and higher commodity costs, the company
reduced expected earnings guidance for the full year 2005.
However, Moody's notes that the Tim Horton's concept continues to
perform well and represented approximately 60% of consolidated
operating income in the quarter ending September 30, 2005, which
is up from about 44% for the same period 2003.

Moody's review will focus on Wendy's operational plan to improve
the performance of the Wendy's and Baja Fresh brands and the
potential deterioration in consolidated credit metrics that could
result from Wendy's various strategic initiatives.

Wendy's International, Inc., headquartered in Dublin Ohio, owns
and franchises restaurants, including:

   * Wendy's Old Fashion Hamburgers,
   * Tim Hortons, and
   * Baja Fresh Mexican Grill.

Total revenues in 2004 were approximately $3.6 billion, while the
Wendy's, Tim Hortons, and developing brands represented about 57%,
51%, and -7%, respectively, of segment operating income.


WILLIAMS COS: Partners Units Post $2.9MM Net Loss in 3rd Quarter
----------------------------------------------------------------
Williams Partners L.P. (NYSE:WPZ) reported an unaudited
third-quarter 2005 net loss of $2.9 million compared with a net
loss of $1.7 million for the same period a year ago.  Year-to-date
through Sept. 30, Williams Partners reported a net loss of
$0.7 million, compared with a net loss of $1.2 million for the
first nine months of 2004.

Distributable cash flow for Williams Partners and its 40 percent
interest in Discovery pipeline totaled $1.8 million for
third-quarter 2005.  That amount compares with $4.3 million
during the same quarter in 2004. For the first nine months of
2005, the partnership's distributable cash flow amounted to
$15 million, an 11 percent decrease versus the $16.8 million
reported during the first three quarters of 2004.

Adjusted EBITDA for Williams Partners and its 40 percent interest
in Discovery pipeline totaled $2.8 million for the third quarter
of 2005, down from $4.6 million for the same period a year ago.   
For the first nine months of 2005, adjusted EBITDA remained
virtually unchanged at $17.3 million, compared with $17.6 million
for the first three quarters of 2004.

The unfavorable quarter-over-quarter results for distributable
cash flow and adjusted EBITDA are primarily related to inventory
valuation adjustments in the NGL Services segment and higher
general and administrative expenses.  These factors were offset
partially by increased storage revenues, and higher gains
recognized from the emptying of storage caverns in 2005 versus the
gains recognized from emptying caverns in 2004.  Additionally, the
net loss was unfavorably affected by a decrease in equity earnings
from Discovery because of temporary shutdowns for recent
hurricanes.  The net loss was reduced by decreased interest
expense resulting from the forgiveness of the advances from
Williams in conjunction with the closing of the initial public
offering on Aug. 23.

Year-to-date through the end of the third quarter, the
partnership's net loss decreased primarily because of higher
storage revenues and lower interest expense.  Those benefits were
offset by the higher inventory valuation adjustments in the third
quarter and higher general and administrative expenses.

"During the quarter, we announced our initial cash distribution to
unitholders and received approval to utilize certain of our assets
in a manner that should help improve the nation's natural gas
deliverability picture.  Today, we are announcing a substantial
suite of assets the partnership expects to acquire," said Alan
Armstrong, chief operating officer.

"Certainly, the quarter also was characterized by unprecedented
weather-related events and related challenges," Armstrong said.
"Through it all, our employees met customer obligations, ensured
the partnership's assets became fully operational as soon as
possible and created solutions to move stranded natural gas to
market in preparation for the upcoming heating season."

              Initial Acquisition Assets Identified

Williams Partners and The Williams Companies, Inc. (NYSE:WMB), the
parent of the partnership's general partner, have identified
Williams' existing gathering and processing assets in the Four
Corners area as the initial asset to be acquired by Williams
Partners.  The partnership plans to acquire an approximately
25 percent interest in the Four Corners assets.  On a 100 percent
basis, the unaudited operating income plus depreciation from these
assets has been $154 million, $151 million and $165 million for
2002, 2003 and 2004 respectively.  The same measure for the first
nine months of 2005 is $136 million.

The terms of this proposed transaction, including price, will be
subject to approval by the boards of directors of both Williams
Partners' general partner and Williams.  Assuming such approvals
are obtained, it is expected that the transaction would be
completed during the second quarter of 2006.

Williams Partners L.P. -- http://www.williamslp.com/-- primarily  
gathers, transports and processes natural gas and fractionates and
stores natural gas liquids.  The general partner is Williams
Partners GP LLC.

The Williams' Companies, Inc. -- http://www.williams.com/--      
through its subsidiaries, primarily finds, produces, gathers,  
processes and transports natural gas.  The company also manages a  
wholesale power business.  Williams' operations are concentrated  
in the Pacific Northwest, Rocky Mountains, Gulf Coast, Southern  
California and Eastern Seaboard.  

                          *     *     *

As reported in the Troubled Company Reporter on Jan. 24, 2005,  
Standard & Poor's Ratings Services assigned its 'B+' rating to The
Williams Cos., Inc., Credit-Linked Certificate Trust IV's
$100 million floating-rate certificates due May 1, 2009.

The rating reflects the credit quality of The Williams Cos., Inc.,
('B+') as the borrower under the credit agreement and Citibank
N.A. ('AA/A-1+') as seller under the subparticipation agreement
and account bank under the certificate of deposit.

The rating addresses the likelihood of the trust making payments
on the certificates as required under the amended and restated
declaration of trust.


WILTEL COMMS: Moody's Affirms $100 Million Term Loan's Caa1 Rating
------------------------------------------------------------------
Moody's Investors Service affirmed all ratings for WilTel
Communications LLC ("WilTel", a wholly-owned subsidiary of WilTel
Communications Group, Inc.) following the company's announcement
that its ultimate parent, Leucadia National Corporation (Ba2,
senior unsecured debt), has entered into a definitive agreement to
sell WilTel to Level 3 Communications, Inc. (Caa2, corporate
family rating) for 115 million shares of Level 3 common stock
(roughly $340 million) plus $370 million of cash.

These ratings were affirmed:

  WilTel Communications, LLC:

    * Corporate Family Rating -- B3

    * $25 million Revolving Senior Secured Credit Facility
      due 2009 -- B2

    * $260 million First-Priority Senior Secured Term Loan
      due 2010 -- B2

    * $100 million Second-Priority Senior Secured Term Loan
      due 2011 -- Caa1

Moody's has changed the outlook to developing from negative.

As part of the transaction, Leucadia, which wholly owns WilTel
Communications Group, Inc., will retain the bank debt along with
certain assets of WilTel that will not be included in the sale to
Level 3.  The bank debt is secured by liens on and a pledge of
substantially all assets of WilTel.  Therefore, Moody's expects
that Leucadia will fully repay the bank debt principal, which it
must do in order to transfer assets to Level 3, and terminate the
credit agreement prior to the closure of the merger transaction.

Moody's anticipates that all ratings for WilTel will be withdrawn
at that time.  If this proposed transaction is not consummated,
however, WilTel's rating outlook would return to negative.

WilTel Communications is a long distance carrier headquartered in
Tulsa, Oklahoma.


WINN-DIXIE: Will Pay $2.75 Mil. to CLC to Settle Lease Dispute
--------------------------------------------------------------
On April 22, 1982, Computer Leasing Corporation of Michigan,
Inc., and Winn-Dixie Stores, Inc., and its debtor-affiliates
entered into a master lease agreement pursuant to which the
Debtors leased information technology equipment and related
peripheral equipment under separate equipment schedules.  On
Nov. 1, 2003, the parties executed an amendment to the original
lease.

Pursuant to the Master Lease, as amended, the Debtors currently
lease over 38,000 individual pieces of equipment from CLC under
6,000 separate equipment schedules.  The Equipment includes
printers, servers, desktop PCs, monitors, laptops, cash registers
and other point of sale equipment.

Cynthia C. Jackson, Esq., at Smith Hulsey & Busey, in
Jacksonville, Florida, reports that as of the Petition Date, the
Debtors were current on all monthly rental payments due to CLC.  
The Debtors continued to make postpetition monthly rental
payments billed by CLC through July 2005, aggregating $6,712,846.

However, the Debtors have not paid CLC's August invoice of
$1,227,787, and the September and October invoices, each for
$1,317,855.  Thus, CLC sought to require the Debtors to pay, as
an administrative expense, these unpaid postpetition invoices.

Winn-Dixie objected to CLC's Request, contending that the
payments due under the Lease are excessive and asserting a
counterclaim against CLC seeking refund of their postpetition
lease payments.  The Counterclaim alleges that CLC's lease is
inequitable and unenforceable because it does not provide the
Debtors the right to purchase all of the leased equipment at fair
market value at the end of the scheduled lease term.

To settle matters, the Debtors and CLC have agreed that the
Debtors will pay CLC $2,750,000 in full satisfaction of all of
their obligations under the leases, and CLC will withdraw its
claims in their Chapter 11 cases.  The parties further agree that
the leases will be terminated and the Debtors will retain all
Equipment currently under lease and in their possession free and
clear of any claims or interest.  The parties will exchange
general releases.

The Debtors ask the Court to approve the Settlement.

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


WORLDCOM INC: Lerach Firm Says Investors Win $651MM in Lawsuits
---------------------------------------------------------------
Lerach Coughlin Stoia Geller Rudman & Robbins LLP, the nation's
leading law firm representing institutional investors in
securities litigation, reported it recovered more than $651
million for institutional investors in individual non-class action
lawsuits arising out of the financial collapse of WorldCom Inc.,
to compensate them for losses on purchases of WorldCom bonds and
stock during 1998-2001.

"These recoveries are unprecedented," said William S. Lerach. "Our
clients' net recoveries on their WorldCom bond losses are
substantially higher than the estimated recovery for the same bond
losses in the WorldCom class action.  Our clients are also
recovering millions of dollars for December 2000 bond offering
claims the class action did not pursue.  They will also get a
higher recovery than what class members are estimated to receive
for their WorldCom stock losses," he said.  See Exhibit A at
http://bankrupt.com/misc/lerach_exhibitA.pdf

The litigation recoveries on the WorldCom bonds are in addition to
a significant recovery to bondholders in the WorldCom bankruptcy
in which Lerach Coughlin's clients shared.

The $651 million recovery is not reduced by Lerach Coughlin's
fees, as counsel fees and expenses were paid by defendants in
addition to this recovery.  Clients include public and private
pension and benefit funds, joint employer-employee funds,
insurance companies and other institutional investors.  (A list of
these clients is attached at Exhibit B at
http://bankrupt.com/misc/lerach_exhibitB.pdf

Lerach Coughlin's clients are also getting their money now, while
class members will have to wait for up to two years to receive
payment, due to claims processing and pending resolution of any
appeals. (A list of general counsel at certain WorldCom clients
who are available for comment is attached at Exhibit C at
http://bankrupt.com/misc/lerach_exhibitC.pdf

The defendants in the suits were CitiGroup, J.P. Morgan, Deutsche
Bank, Tokyo-Mitsubishi, ABN AMRO, WestLandes, BNP Paribas, Caboto,
Mizuho, Bank of America, CSFB, Lehman, Goldman Sachs, UBS Warburg,
Arthur Andersen and certain WorldCom officers and directors.

CitiGroup and J.P. Morgan have agreed, as part of the settlement,
to petition the Securities and Exchange Commission jointly with
some of the plaintiffs to issue rules requiring increased
disclosures in future securities offerings, including more
information about loans to issuers and the issuers' officers,
increased information regarding allocation of IPO shares to the
issuers' insiders, and more information about research coverage
underwriters will provide about issuers.  "Our clients commend
CitiGroup and J.P. Morgan for taking a leadership position and
seeking increased disclosures which will benefit investors going
forward. Our clients view this responsible action taken by these
banks favorably," said Lerach.

"We are very proud of these results," Lerach added.  "It shows how
institutional investors can, in certain instances, use vigorously
prosecuted individual actions to greatly enhance their recoveries
beyond those obtained by passive reliance on class action suits.  
These actions also show how securities litigation can be
effectively used to obtain business practice changes to benefit
investors."

Lerach Coughlin Stoia Geller Rudman & Robbins LLP, with over
160 lawyers in San Diego, Los Angeles, San Francisco, Seattle,
Houston, Boca Raton, Philadelphia, Washington D.C. and New York
City, is the nation's leading law firm specializing in
representing institutional investors in shareholder suits.  The
firm has recovered billions of dollars for its clients.  Most
recently, the firm has, to date, recovered $7.1 billion for
damaged Enron investors, the largest securities class action
recovery in history.

          Lawyer Distorts Results of WorldCom Class Action
             to Make Himself Look Better, Hevesi Says

The settlements in the WorldCom case have produced excellent
returns for investors, especially considering that the company was
bankrupt.  The cases established that corporate executives and
directors would be held personally liable for gross misconduct and
that underwriters and accountants would be held accountable for
failure to perform thorough due diligence and sufficient audits.

The New York State Common Retirement Fund's role as lead plaintiff
in the WorldCom class action suit and in spearheading efforts on
behalf of defrauded WorldCom investors has been well documented.  
Unfortunately, one of the beneficiaries of the Fund's success,
attorney William Lerach, was not satisfied with just announcing
his own good settlement, but chose in a conference call today to
distort and disparage the Class' achievements.

"We got a good return.  Mr. Lerach got a good return.  It's sad he
has to distort what we accomplished to try to promote himself,"
New York State Comptroller Alan G. Hevesi said.

There were several major inaccuracies in Lerach's presentation in
his conference call. In sum, he manipulated the amount of the
Class' damages and the anticipated claims rate for the Class, and
he presented figures for his own group's damages that are a
fraction of what he has previously claimed in court and in
writing.  Lerach also plays games about where his fees come from.
For instance:

      * Lerach substantially inflated the damage numbers for the
        Class Action in order to make the $6.15 billion class
        recovery look lower and his look better.

      * For the 2000 and 2001 bonds, Lerach says the Class Action
        damages were $12.3 billion. This is false. That number
        includes the damages for all WorldCom bond investors:
        those who opted out and those who remained in the Class.
        The Class Action did not seek recovery for investors not
        in the Class suit. The real 2000 and 2001 bond damages
        for the Class are $10.6 billion.

      * On that basis, the recovery for bond holders in the Class
        after costs is about 43 percent-assuming every Class
        member files a claim. Historically, not every Class
        member files a claim, meaning that those who do file will
        recover more.  While we expect that the claims rate will
        be higher than usual, given the size of the Class
        recovery and the publicity about it, we note that in
        order to draw his comparison, Lerach makes the absurd
        assumption that virtually every Class member filed a
        claim.

      * Since Lerach distorts the Class damages, there is no
        reason to believe what he says today about his own
        damages, especially since it is so at odds with what he
        has said in the past.  In a May 2003 letter soliciting
        clients, for example, Lerach claimed that his group had
        bond losses of $1.4 billion.  Today, he claims only $1
        billion in bond damages. The lower the damages, the
        better his recovery looks.  In December 2002, Mr. Lerach
        told U.S.  District Judge Denise Cote in open court that
        his clients had $3 billion in claims, presumably
        including bond and stock damages.  Today, he claims his
        total bond and stock damages are $2 billion.  Claiming
        lower damages today inflates his purported recovery rate.

      * If the $1.4 billion for bond damages Lerach represented
        before today is accurate, his recovery of $620 million
        for bond damages is about 43 percent, about the same as
        the Class recovery, assuming a 100 percent claim rate by
        all Class members.

      * Lerach's manipulation of the stock damages is even more
        egregious.  While he cited the Class' expert report for
        the bond damages, he ignored the same report for the
        stock damages.  In the conference call he claimed Class
        stock damages were $160 billion.  In the table attached
        to his press release, he says $100 billion.  The expert
        report and court testimony put the damages at $30 billion
        for all WorldCom investors, including those who opted out
        of the Class.  The stock damages actually claimed by the
        Class are $24 billion.  Correcting this one distortion
        alone would result in a Class recovery on its stock
        damages that is four times what Lerach falsely reports
        and is then higher than his claimed stock recovery.

      * Lerach's claim that his group would only receive $352
        million if it were in the Class, compared to the $651
        million it actually received, is based on all these and
        other distortions.  It uses a low recovery percentage for
        the Class by assuming his inflated Class damages and is
        based on his unreasonably high claims percentage and his
        shrunken damage figure.  In sum, the $352 million is a
        made-up number designed to make Lerach look good.

      * What Lerach is pulling is best demonstrated by the way he
        treats his fees.  He says his clients didn't pay his
        fees, the banks did.  That is pure spin.  The banks
        agreed to a total payout, in this case $745 million.  
        Lerach took his fee of $85 million and costs of $9
        million out of that total.  It is simply not true that
        the banks added more for Lerach.  By the way, the Class
        paid its lawyers 5.5 percent, while Lerach is getting
        twice that in attorney's fees.

      * Lerach was so obsessed with attacking the $6.15 billion
        Class Action settlement that he claimed that it amounts
        to $5.6 billion after costs.  In fact, after costs and
        including $100 million interest to date, it is $300
        million more than $5.6 billion.

      * It should be noted that the recovery Lerach will obtain
        from the former WorldCom directors, comes solely from a
        small insurance fund that the Class agreed to leave
        behind for other litigation when the Class settled and
        obtained the bulk of the insurance.  In addition, the
        Class obtained almost $25 million in personal payments
        from the former board.  Lerach's settlement has no
        personal payment.

      * It should also be noted that any recovery that Lerach
        obtains from former executives Ebbers and Sullivan comes
        not from some "government proceeding" as Lerach
        represented, but from the liquidation trust set up by the
        Class when it settled with the two former executives.  
        The Class set up a 5 percent set-aside that other
        litigants,  including Lerach, were permitted to share.
        Lerach is apparently unable to credit the Class with any
        of the accomplishments that helped him.

"Mr. Lerach's use of numbers would not meet any standard of
accuracy, transparency or professional integrity. If this were an
audit, his facts and figures would be dismissed as lacking a sound
foundation," Hevesi said.

                   Assertion of Premium Recovery
                     by Institutional Investors
                in WorldCom Settlements is Accurate,
                        William Lerach Says

Lerach Coughlin Stoia Geller Rudman & Robbins LLP, the nation's
leading law firm representing institutional investors in
securities litigation, earlier today announced it had recovered
more than $651 million for institutional investors in individual
non-class action lawsuits arising out of the financial collapse of
WorldCom Inc.  Following this announcement and subsequent
conference call, the lead plaintiff in the class action lawsuit
issued a press release attacking the firm's analysis of its
clients' recovery.

"We were saddened to read the attacks on our analysis of the
unprecedented recovery for our clients in the WorldCom matter by
the class action lead plaintiff," said William S. Lerach.  "We
went out of our way in the press conference this morning to
compliment the class on their excellent recovery.  However, when
the numbers are properly understood, our clients' recovery is
substantially better than what they would have recovered in the
class action.  We have attempted to be as transparent and accurate
in our analysis as possible."

In a response to each of the issues raised in the New York State
Retirement Fund's press release, Lerach Coughlin notes the
following:

       1. The statement that we inflated the damage numbers for
          the class action in order to make the class recovery
          look lower.

          Our response: The damage numbers for the class action
          set forth in Exhibit A to our press release (the
          comparison chart) were taken directly from the expert
          report of the lead plaintiff's damage expert -- Blaine
          Nye.

       2. The statement that the damage number of $12.3 billion
          for the May 2000 and May 2001 offerings in our chart
          for the class action was inaccurate because it includes
          damages for our clients that opted out of the class.

          Our response: The purpose of the comparison chart in
          Exhibit A was to simply show what our clients would
          have received if they had remained in the class action
          versus their actual recovery.  Our clients are
          receiving a premium to their imputed class recovery by
          getting a 45-67% recovery net of fees and expenses on
          these two bonds.

       3. The release attacks our assumption of a 90% claim rate
          in the class action with the implication being that a
          lower claim rate will yield the class a greater
          recovery.

          Our response: That is true except for the fact that we
          have been told by one of the defendants' counsel that
          they expect the claim rate to be 95%, which means we
          were being conservative in our calculations.  Since the
          claim date has passed and all claims have been filed,
          if we were so far off in our assumption of a 90% claim
          rate you would expect class counsel to provide that
          information to the State of New York to include in its
          press release.  The WorldCom bonds were held by
          sophisticated institutions, it was a highly publicized
          fraud and settlement, and it is not surprising that
          almost 95% of institutions that bought the bonds would
          be claiming on the settlement fund.

       4. The release attacks our prior statements about our
          clients' bond losses.

          Our response: The May 2003 letter referred to in the
          release which discusses our clients having $1.4 billion
          in bond losses was accurate at the time.  Some of our
          clients had claims that were dismissed by Judge Cote
          and they decided to dismiss their private actions and
          go back into the class after May 2003.  These clients
          had bond losses of at least $150 million which were
          included in the $1.4 billion number.  Our bond losses
          for the August 1998, December 2000, May 2000, and May
          2001 offerings now total $1.25 billion.  Of that
          amount, approximately $1 billion is for the May 2000,
          May 2001 and December 2000 bonds and the remainder is
          for the August 1998 offering, which was treated like
          the common stock by the class action.  Our current
          overall total of $2 billion for bond and stock claims
          is accurate.

       5. The release claims that our recovery of $620 million
          (it is actually $644 million excluding interest per the
          comparison chart) is a recovery of 43% based on bond
          claims of $1.4 billion which is the same as the class
          recovery.

          Our response: Our bond claims are $1 billion for the
          May 2000, May 2001 and December 2000 bonds.  For these
          bonds we recovered a total of $610 million ($482
          million for the May 2001 bonds, $103 million for the
          May 2000 bonds, and $24.5 million for the December 2000
          bonds).  A recovery of $610 million based on total bond
          claims of $1 billion is approximately 60%. As set forth
          on the comparison chart attached to our press release,
          our clients' recovery on the May 2000 and May 2001
          bonds is 62-67% for most clients, and 45% for some
          clients on the May 2000 bonds.  The August 1998 bonds
          were treated the same as common stock by the class and
          we also treated them the same and included them in the
          comparison chart as part of the common stock recovery.
          There is no reason to lump those bonds in with the
          other bonds for the purposes of this comparison.

       6. The release claims we have manipulated the stock
          damages.

          Our response: The market capitalization losses for the
          class were $160 billion based on 2.97 billion shares
          outstanding and a stock decline from the $50-$60 per
          share range to as low as $0.06 per share.  We used $100
          billion in the comparison chart to give the class the
          benefit that only approximately 62% of class members
          would file a claim.  Footnote 5 to the chart reflects
          this assumption and reduces the market cap losses to
          $100 billion.  Unlike the bond claimants who are highly
          sophisticated and we expect will file a very high rate
          of claims, the common stock holders are a more diverse
          lot and it is possible the claim rate will be around
          60%, which is the average for stock claims in class
          actions.  The class claims it has common stock damages
          of $30 billion.  We calculated our clients' losses
          based on market losses and for comparison purposes
          calculated the class losses in the same manner.  Had we
          reduced our clients' losses in a fashion similar to the
          class, our clients' losses would be substantially lower
          than the $720.9 million presented and the recovery
          percentage would have been substantially higher than
          2.97%.

       7. The class action lead plaintiff claims our clients'
          overall recovery if they had stayed in the class is
          understated.

          Our response: The points above addressed these issues.
          We have not inflated the class loss numbers and have
          used a realistic claim rate for the bonds for the
          class.  The comparison chart lays out what our clients
          would have obtained in the class assuming they remained
          in the class versus what they are receiving in their
          private action.

       8. The release attacks our presentation of our fees.

          Our response: We presented the recovery net of fees
          because we thought that was a fairer presentation than
          the gross number other firms present.  The net figure
          presented is the amount the clients will receive,
          rather than a gross-up number as used by other
          individual action settlements and even the class
          action.

       9. The release claims we understated the class settlement
          and did not include interest.

          Our response: Exhibit A to the press release shows the
          class recovery of $5.841 billion.  We did not add
          interest to the class recovery because its not added to
          the private recovery in Exhibit A, which shows a $645
          million recovery.  For consistency purposes, interest
          was not included in either amount.

      10. The release claims we misstated the source of the
          recovery from Ebbers and Sullivan.

          Our response: Our understanding is that the government
          negotiated as part of the Ebbers and Sullivan
          sentencing an agreement for those individuals to
          forfeit most of their personal assets.  The class had a
          role in working with the government to set up the
          trust.  Our clients will get a portion of that fund.

Lerach Coughlin Stoia Geller Rudman & Robbins LLP, with over
160 lawyers in San Diego, Los Angeles, San Francisco, Seattle,
Houston, Boca Raton, Philadelphia, Washington D.C. and New York
City, is the nation's leading law firm specializing in
representing institutional investors in shareholder suits.  The
firm has recovered billions of dollars for its clients.  Most
recently, the firm has, to date, recovered $7.1 billion for
damaged Enron investors, the largest securities class action
recovery in history.

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


XOMA LTD: Sept. 30, 2005 Balance Sheet Upside-Down by $10.99 Mil.
-----------------------------------------------------------------
XOMA Ltd. (Nasdaq:XOMA) reported financial results for the quarter
and year to date ended Sept. 30, 2005.

For the third quarter of 2005, the Company reported a net loss of
$9.0 million compared with a net loss of $20.1 million in the
third quarter of 2004.  These results reflect higher revenues,
reduced R&D expenses and the elimination of losses from the
RAPTIVA(R) collaboration agreement with Genentech, Inc. (NYSE:
DNA) that was restructured in January of 2005.

For the first nine months of 2005, XOMA recorded net income of
$12.5 million, a figure that includes a non-recurring gain of
$40.9 million, recognizing the extinguishment of a long-term loan
due to Genentech as part of the January 2005 restructuring.

As of Sept. 30, 2005, XOMA held $45.8 million in cash, cash
equivalents and short-term investments, compared with $24.3
million at December 31, 2004, primarily due to proceeds of a
financing completed in February of 2005.

"The new contract with Cubist, along with the NIAID agreement,
increases utilization of our antibody development and
manufacturing infrastructure and brings in revenues," said David
Boyle, XOMA's chief financial officer.  "With the higher revenues
and reduced spending in the first nine months of 2005, XOMA has
cut its operating loss to less than half of levels for the same
period in 2004, demonstrating continued progress towards our goal
of sustainable profitability."

"I'm pleased with the progress of our two multiple-antibody
collaborations, with Chiron and Lexicon, as well as with signing a
second antibody development and manufacturing contract, with
Cubist," said John L. Castello, president, chairman and CEO of
XOMA.  "Through such strategic collaborations and manufacturing
contracts, XOMA continues to fill the product development pipeline
and strengthen our financial position."

Revenues for the three months ended September 30, 2005 were $4.4
million, compared with $600,000 for the three months ended
September 30, 2004.  Revenues for the first nine months of 2005
increased to $12.6 million from $1.5 million in the first nine
months of 2004.

License and collaborative fee revenues increased to $0.9 million
in the third quarter, compared with $0.5 million for the same
period of 2004.  These include upfront and milestone payments
related to the outlicensing of XOMA products and technologies and
other collaborative arrangements.

Contract revenues increased to $1.9 million for the third quarter
of 2005, compared with zero in the third quarter of 2004,
primarily due to clinical trial services performed on behalf of
Genentech and recognition of revenues for contract manufacturing
services performed under the NIAID contract that began in March of
2005.

Royalties recorded for the three months ended September 30, 2005
increased to $1.7 million, compared with $29,000 for the 2004
quarter, primarily reflecting RAPTIVA(R) royalties earned under
the restructured arrangement with Genentech.  Beginning on
Jan. 1, 2005, XOMA earns a mid-single digit royalty on sales of
RAPTIVA(R) worldwide.

Revenues for the next several years will be largely determined by
the timing and extent of royalties generated by worldwide sales of
RAPTIVA(R) and by the establishment and nature of future
manufacturing, outlicensing and collaborative arrangements.

Cash, cash equivalents and short-term investments at Sept. 30,
2005 were $45.8 million, compared with $24.3 million at Dec. 31,
2004.  The $21.5 million increase primarily reflects cash proceeds
of $56.6 million from the February 2005 financing plus a June 2005
drawdown of $8.8 million under the Chiron loan, partially offset
by cash used in operations of $41.1 million.  Cash used in
operations for the nine months ending Sept. 30, 2005 include a
$14.3 million decrease in accrued liabilities and a $3.5 million
increase in accounts receivables.

                       Long-term Debt

At Dec. 31, 2004, XOMA's balance sheet reflected a $40.9 million
long-term note due to Genentech, which was extinguished under the
restructuring of the Genentech agreement announced in January
2005.

In Feb. of 2005, XOMA issued $60 million of 6.5% convertible
senior notes due in 2012, which is shown on the Sept. 30, 2005
balance sheet as convertible long-term debt.

Under its collaborative arrangement with XOMA, Chiron has made
available a $50.0 million credit facility under which XOMA can
receive financing for up to 75% of its share of development
expenses.  In June of 2005, XOMA drew down an initial $8.8 million
under this facility.

XOMA Ltd. -- http://xoma.com/-- is a pioneer and leader in the  
discovery, development and manufacture of therapeutic antibodies,
with a therapeutic focus that includes cancer and immune diseases.
XOMA has a royalty interest in RAPTIVA(R) (efalizumab), a
monoclonal antibody product marketed worldwide (by Genentech, Inc.
and Serono, SA) to treat moderate-to-severe plaque psoriasis.
XOMA's discovery and development capabilities include antibody
phage display, bacterial cell expression (BCE), and Human
Engineering(TM) technologies, plus a fully integrated drug
development infrastructure.  XOMA's development collaborators
include Aphton Corporation, Chiron Corporation and Lexicon
Genetics Incorporated. The company pipeline also includes
proprietary programs in preclinical and clinical development.

At Sept. 30, 2005, XOMA Ltd.'s balance sheet showed a $10,990,000
stockholders' deficit compared to a $24,610,000 deficit at
Dec. 31, 2004.


* BOOK REVIEW: THE FAILURE OF THE FRANKLIN NATIONAL BANK:
               Challenge to the International Banking System
------------------------------------------------------------
Author:     Joan E. Spero
Publisher:  Beard Books
Paperback:  235 Pages
List Price: $34.95

Order your personal copy at
http://www.amazon.com/exec/obidos/1893122344/internetbankrupt

In 1974 the international financial system faced its most serious
crisis since the 1930s.  The stresses and shocks of that year,
including the failure of the Franklin National Bank, led to a
crisis of confidence that brought the International banking system
dangerously close to disaster.  Franklin's failure forced United
States and foreign regulatory authorities to devise new ways to
avert an international banking crisis, and served as a catalyst
for later efforts to bring international banking under public
management.

The author's case study, first published in 1979 when events were
very fresh, examines the failure of the Franklin -- once the
twentieth largest bank in the United States -- within the context
of the bank crisis.  Franklin's collapse was both cause and
effect; changes in banking regulation and practice contributed to
the bank's problems, while its collapse forced bank regulators and
policymakers to address the new international nature of banking
and to cooperate in addressing dramatic changes in international
financial markets, and, hopefully, avoiding a repeat of the
crisis.

The book begins by reviewing the economic and political factors
that led to the internalization of American banks, as many banks
became multinational corporations.  This phenomenon surged during
the 1960s and 1970s, carrying the Franklin (which even acquired a
foreign owner, Italian financier Michele Sindona) with it.  The
work then examines the extent to which the Franklin's demise was
caused by its international activities and, in turn, the manner in
which Franklin's insolvency threatened the international banking
system.

After analyzing the crisis's antecedents, the book moves to a
discussion of United States regulatory responses to control it,
and explains how American authorities were forced to take
innovative steps to manage the international dimensions of the
Franklin crisis.  Those steps included a massive Federal Reserve
loan and the use of that loan to cover foreign branch outflows,
assistance in managing foreign exchange operations and the
eventual purchase of Franklin's foreign exchange book, and the
FDIC sale.

Not even those bold regulatory approaches sufficed to stem the
crisis, however, United States regulators were obliged to seek
assistance from other nations' financial authorities.  The
cooperative approach not only prevented the crisis from devolving
into a crash, but also laid groundwork for increased cooperation
in the future.  This achievement, the author concludes, was the
lasting (and beneficial) effect of the failure of the Franklin
National Bank.

The Franklin Episode, thus, revealed both the weaknesses and the
strengths of the United States' regulatory system as it applies to
international banking.

                          *********

Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par.  Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable.  Those sources may not,
however, be complete or accurate.  The Monday Bond Pricing table
is compiled on the Friday prior to publication.  Prices reported
are not intended to reflect actual trades.  Prices for actual
trades are probably different.  Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind.  It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets.  At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.  
Don't be fooled.  Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets.  A company may establish reserves on its balance sheet for
liabilities that may never materialize.  The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com.

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition
of the TCR.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                          *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published by  
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,  
USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L.  
Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Jazel P.
Laureno, Cherry Soriano-Baaclo, Marjorie Sabijon, Terence Patrick
F. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo Pinili,
Jr., Tara Marie Martin, and Peter A. Chapman, Editors.

Copyright 2005.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

The TCR subscription rate is $675 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each.  For subscription information, contact Christopher Beard
at 240/629-3300.

                *** End of Transmission ***