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        T R O U B L E D   C O M P A N Y   R E P O R T E R

              Monday, June 30, 2003, Vol. 7, No. 127   

                          Headlines

ABN AMRO MORTGAGE: Fitch Rates Class B-3 and B-4 Notes at BB/B
ADF GROUP: April 30 Working Capital Deficit Narrows to $40 Mill.
AIR CANADA: Flight Attendants Group Ratifies Agreement
ALLBRITTON: Narrowing Covenant Cushion Spurs Negative Outlook
ALLERGY IMMUNO: Brings-In Parks as New Independent Auditors

AMR CORP: S&P Equity Analyst Raises Opinion on Shares to 'Hold'
ASSOCIATE ESTATES: S&P Cuts Corp. Credit Rating a Notch to B+
BALTIMORE MARINE: Has Until July 11, 2003 to File Schedules
BETHLEHEM STEEL: Court Approves Rejection of MEDSTAT Contract
BION ENVIRONMENTAL: Sets Up New Texas Dairy Management System

BSI2000 INC: Closes Reverse Triangular Merger with Knowledge  
CALPINE CORP: Places Zion Energy Center Phase II in Operation
CALPINE CORP: Commencing $1.8 Billion Secured Note Offering
CANADIAN HYDRO: Files Final Prospectus for Equity Financing
CENDANT MORTGAGE: Fitch Rates Class B-4 and B-5 Certs. at BB/B

CIGNA COLLATERALIZED: S&P Downgrades Class I Note Rating to BB
CNH GLOBAL: S&P Places BB Corporate Credit Rating on Watch Neg.
CONSECO FINANCE: Selling Loan & Credit Accounts to EMCC, Inc.
CORAM: Working with Trustee's Advisors to Amend Valuation
COVANTA ENERGY: Gets Court's Blessing for Hennepin Transactions

CROWN CASTLE: Commences $200MM Senior Convertible Notes Offering
DEL MONTE FOODS: Fiscal Q4 2003 Results Show Marked Improvement
DELTAGEN INC: Files for Chapter 11 Protection in San Francisco
DELTAGEN INC: Voluntary Chapter 11 Case Summary
EL PASO CORP: Settles Western Energy Litigation & Most Claims

EL PASO ELECTRIC: Enters into Energy Agreement with Mexico's CFE
ELAN CORP: Wants More Time to File Annual Report on Form 20-F
ELAN CORP: Report Filing Delay Prompts S&P to Junk Rating at CCC
ELDER-BEERMAN: Takes Goldner Hawn's $6 Per Share Merger Offer
ENCOMPASS SERVICES: Wants Court to Okay Liberty Settlement Pact

ENERGY WEST: Credit Agreement Further Extended Until July 31
ENRON CORP: Asks Court to Extend Plan Exclusivity Until July 11
ENRON CORP: Wants Court Approval for San Juan Gas Asset Sale  
E.SPIRE COMMS: Storch Amini Investigating D&O & Auditor Claims
FLEMING COS: AFCO Seeks Stay Lift to Cancel Insurance Financing

GENTEK INC: Turns to O'Melveny for Special Litigation Advice
GLOBAL CROSSING: XO Offers 'Insurance' Policy for Restructuring
GLOBAL LEARNING: US Trustee Sets Sec. 341(a) Meeting on July 10
HEALTH CARE REIT: S&P Rates Planned Preferreds Issue at BB+
HEAVENEXPRESS.COM: Brings-In Perrella & Assoc. as New Auditors

HLM DESIGN: Initiates Action to Withdraw Listing on AMEX
HOST MARRIOTT: Will Publish Second Quarter Results on July 23
IMMTECH: Files Series C Preferred Certificate of Designation
IMCLONE SYSTEMS: Receives $3 Million Payment from Merck KGaA
INACOM: Delaware Court Confirms Amended Liquidating Ch. 11 Plan

INT'L MULTIFOODS: Selling Foodservice Pie Business for $2.3-Mil.
INT'L MULTIFOODS: Red Ink Continued to Flow in Fiscal Q1 2004
INT'L PROPERTIES: Reports Results for Fiscal Second Quarter 2003
LEVI STRAUSS: May 25 Balance Sheet Insolvency Widens to $1 Bill.
MDC CORP: Strikes Definitive Pact to Buy Maxxcom Minority Shares

MDC HOLDINGS: Expects Q3 Earnings to Exceed Consensus Estimate
MEDIA 100: Red Ink Continued to Flow in Second Quarter 2003
MERRILL LYNCH MORTGAGE: Fitch Rates Class B-4 and B-5 at BB+/B+
MERITAGE CORP: Fitch Assigns BB Senior Unsecured Debt Rating
MESA AIR GROUP: Completes $100 Mill. Convertible Debt Offering

MILLER INDUSTRIES: Fails to Maintain NYSE Listing Standards
MIRANT: Fitch Hangs Junk Ratings on Sr. Notes & Securities
MISSISSIPPI CHEMICAL: Employs Vinson & Elkins as Special Counsel
MOLECULAR DIAGNOSTICS: Financial Restructuring Nears Completion
MOONEY AEROSPACE: Makes All Required Report Filings with SEC

NATIONAL EQUIPMENT: Files for Chapter 11 Reorganization
NATIONAL STEEL: Joint Liquidating Chapter 11 Plan Overview
NEWPORT INTERNATIONAL: Auditor Rachlin Cohen Walks Away
NORTEL NETWORKS: Board Declares Preferred Share Dividends
NORTHWEST AIRLINES: S&P Equity Analyst Raises Opinion to 'Hold'

NRG ENERGY: Secures Interim Approval for Kirkland's Engagement
PRIMEDIA INC: Names Dave Ellett Pres./CEO of Workplace Learning
QWEST: Wins FCC Nod to Re-Enter Long-Distance Business in Minn.
READER'S DIGEST: Lending Syndicate Amends Credit Agreements
RELIANT RESOURCES: Prices $1.1 Billion of Senior Secured Notes

REMEE PRODUCTS: Bankruptcy Court Auction is Tomorrow Morning
REXNORD: Reports Slight Earnings Decline for Fiscal 4th Quarter
SEITEL: Wants More Time to Challenge Invol. Bankruptcy Petitions
SEQUOIA: Fitch Rates Class B-4 and B-5 P-T Certificates at BB/B
SHAW COMMS: Anticipates Closing US-Based Cable Asset Sale Today

SLATER STEEL: Obtains Court Order Delaying Annual Meeting
SMARTSERV ONLINE: Nasdaq Yanks Shares from SmallCap Market
SOLUTIA INC: Will Host Second Quarter Conference Call on July 25
SORRENTO NETWORKS: Inks Definitive Agreement to Acquire LxN Inc.
SPIEGEL GROUP: Seeks Approval of Excess Inventory Sale Protocol

SYMPHONIX DEVICES: Closes Sale of All Remaining Assets to MED-EL
TERRA INDUSTRIES: Suspends Production at Blytheville Facility
TIMCO AVIATION: Expects to Meet 2003 Working Capital Needs
TOUCH AMERICA: US Trustee Sets Creditors Meeting for July 21
TRAPEZA CDO: Fitch Assigns BB Rating to Class E Secured Notes

ULTRASTRIP: Seeks Additional Funds to Meet Working Capital Needs
UNITED AIRLINES: US Bank Demands Payment of Admin Expense Claim
U.S. CAN CORP: Plan to Issue 2nd Priority Senior Secured Notes
WATERLINK INC: Files for Chapter 11 Reorganization in Delaware
WATERLINK INC: Case Summary & Largest Unsecured Creditors

WEIRTON STEEL: President & CEO John H. Walker Resigns
WHEELING-PITTSBURGH: Reaches New Labor Agreement with USWA
WHEELING: USWA Says New Agreement will Set Stage for Emergence
WHEELING-PITTSBURGH: Amends Northrop Gruman Outsourcing Pact
WINSTAR: Chap. 7 Trustee Sues to Recover $49 Million Transfers

WORLDCOM: Shareholders Ask Sprint Shareholders to Join Boycott
WORLDCOM INC: Brings-In Stinson Morrison as Special Lit. Counsel
W.R. GRACE: Wants Nod for Voluntary Trust Fund Contributions
YELLOW PAGES: BB- Corp. Credit Rating Placed on Watch Positive

* BOND PRICING: For the week of June 30 - July 4, 2003

                          *********

ABN AMRO MORTGAGE: Fitch Rates Class B-3 and B-4 Notes at BB/B
--------------------------------------------------------------
ABN AMRO Mortgage Corporation's multi-class mortgage pass-through
certificates, series 2003-8, classes A-1 through A-35, A-X, A-P,
and R ($493.7 million) are rated 'AAA' by Fitch Ratings. In
addition, Fitch rates class M ($6.1 million) 'AA', class B-1 ($3.3
million) rated 'A-', class B-2 ($1.3 million) 'BBB-', class B-3
($709,322) 'BB' and class B-4 ($759,987) 'B'.

The 'AAA' rating on the class A senior certificates reflects the
2.55% subordination provided by the 1.20% class M, 0.65% class B-
1, 0.26% class B-2, 0.14% privately offered class B-3, 0.15%
privately offered class B-4 and 0.15% privately offered class B-5.
Classes M, B-1, B-2, B-3 and B-4 are rated 'AA', 'A-', 'BBB-',
'BB', and 'B', respectively, based on their respective
subordination.

Fitch believes the amount of credit enhancement will be sufficient
to cover credit losses, including limited bankruptcy, fraud and
special hazard losses. The ratings also reflect the high quality
of the underlying collateral originated by ABN AMRO Mortgage
Group, Inc., the integrity of the legal and financial structures
and the servicing capabilities of AAMG (rated 'RPS2+' by Fitch).

The mortgage pool consists of a group of recently originated, 30-
year fixed-rate mortgage loans secured by one- to four-family
residential properties. The mortgage loans have an aggregate
principal balance of $506.6 million as of the cut-off date and a
weighted average remaining term to maturity of 359 months. The
weighted average original loan-to-value ratio (OLTV) of the pool
is approximately 67.25%; approximately 1.30% of the mortgage loans
have an OLTV greater than 80%. The weighted average coupon of the
mortgage loans is 5.86%. The weighted average FICO score is 743.
The states that represent the largest geographic concentration are
California (49.41%), Illinois (7.38%), and New York (4.62%).

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

AAMG originated all of the loans. JPMorgan Chase Bank will serve
as trustee. AMAC, a special purpose corporation, deposited the
loans into the trust, which then issued the certificates. For
federal income tax purposes, the offered certificates will be
treated as ownership of debt.


ADF GROUP: April 30 Working Capital Deficit Narrows to $40 Mill.
----------------------------------------------------------------
For the three-month period ended April 30, 2003, ADF Group Inc.,
(ticker symbol DRX/TSX) recorded a net loss of $1.6 million
compared with net income of $3.5 million in the same quarter of
the previous year. Consistent with its main objective for fiscal
2004, which is to restore operating profitability, ADF achieved
EBITDA (earnings before depreciation, amortization, interest,
income taxes and non-controlling interest) of $2.1 million. This
compares with EBITDA of $9.5 million last year. This year's
results include non-recurring professional fees of $0.5 million
incurred as part of the Company's current restructuring.

ADF Group posted contract revenues of $63.0 million, compared with
$108.9 million in the same quarter of the previous fiscal year,
due to the sharp slowdown in non-residential construction activity
in North America since the fall of 2002, especially in the
Northeastern United States. ADF recorded a gross profit of $6.1
million, compared with $13.4 million last year. Of this amount, a
foreign exchange gain of $2.1 million was recorded in the first
quarter of fiscal 2003-2004, as opposed to a foreign exchange loss
of $0.4 million in 2002-2003. The foreign exchange gain is
attributable to the currency risk hedging program set up last
year, combined with a decrease in the value of the debt
denominated in U.S. dollars.

Selling and administrative expenses amounted to $4.0 million
versus $3.9 million in 2002. This slight increase reflects the
inclusion of the expenses of Owen Steel Company (acquired in March
2002) for the full three- month period this year, as opposed to a
single month the previous year. Excluding Owen Steel, selling and
administrative expenses actually decreased by $0.6 million or
16.6%, following the restructuring measures implemented in the
second half of the last fiscal year.

                         Financial Position

ADF has further reduced its debt since the end of fiscal 2003.
Operating activities provided cash flows of $21.0 million in the
first quarter, as opposed to a cash outflow of $15.2 million last
year. This improvement is mainly attributable to a $27.0 million
tax recovery. Consequently, the bank debt was lowered by $29.6
million during the period.

Considering the reduction in bank debt and a $10.2 million
decrease in cash, the total net debt (consisting of the short-term
and long-term debt, net of cash) amounted to $111.6 million as at
April 30, 2003, down $25.2 million from January 31, 2003. Besides
the tax recovery, this improvement can be attributed to the
increase in the Canadian dollar, which reduced the Canadian dollar
equivalent of the debt denominated in U.S. dollars.

As at June 25, 2003, the Company was still in discussion with its
financial partners to restructure part of its secured debt in
order to facilitate the transition of its business when the
economy recovers. Management hopes to finalize these negotiations
in the near future.

At April 30, 2003, the Company's balance sheet shows that its
total current liabilities outweighed its total current assets by
about $40 million.

               Outlook and Priorities for Fiscal 2004

ADF Group's backlog of signed orders totaled $130 million as at
June 25, 2003, up $10 million over the end of May. Recently, the
Company was notably awarded a fourth contract for Lester B.
Pearson International Airport in Toronto, worth $8.1 million. ADF
will supply the structural steel for a three-kilometer-long
elevated single and double guideway, the fabrication of which will
begin in the fall of 2003 while installation is scheduled for
March 2004.

However, given the market weakness, management does not foresee
any significant improvement in the level of activity for fiscal
2003-2004. ADF's short-term priorities are to complete the
extensive restructuring program underway in order to reduce fixed
costs and increase operating profitability, restructure its debt
and recover the amounts associated with the additional costs
incurred on certain contracts - all in order to improve the
Company's cash position and balance sheet.

As was previously announced, to carry out this restructuring ADF
has set up a Special Executive Committee reporting directly to the
Board of Directors and assisted by external advisors. Management
aims to present the broad outlines of the restructuring plan, as
approved by the Board of Directors, towards the end of July 2003.


AIR CANADA: Flight Attendants Group Ratifies Agreement
------------------------------------------------------
Members of the Air Canada Component of CUPE, have ratified by 88%
a memorandum of understanding reached with the national airline on
May 29, 2003. The settlement was negotiated under the CCAA  
Process.

"This concessionary round of bargaining was unlike any contract
talks we have ever participated in with Air Canada," said
Component President Pamela Sachs. "We were given a monetary target
to meet and ordered by the court to settle with the company, our
members have done more than their share."

"The low vote turnout of 48.5% should send a clear message to Air
Canada that its Flight Attendants have had enough. Many of the
membership detested this agreement and by abstaining, they avoided
voting against it," said Sachs.

The CUPE contract, while leaving key priorities that are important
to Flight Attendants such as sick time provisions, per diems,
draft premiums and pensions intact, contained work rule changes,
reduced vacations and reduced wages. In addition, up to 1750
members stand to lose their jobs in the coming months. This may be
significantly reduced by the utilization of 2500 Voluntary
Separation packages offered by the company.

"Our members are worried about their future," said Sachs. "Many
could be losing a job they love while others will be returning to
working conditions that we fought so hard to change many years
ago."

Total ballots cast were 3,892 with 3,435 voting yes. The Air
Canada Component represents approximately 8300 cabin personnel.


ALLBRITTON: Narrowing Covenant Cushion Spurs Negative Outlook
-------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Allbritton Communications Corp. to negative from stable, because
of a narrowing covenant cushion and a dividend policy that has not
been eased to improve net cash flow. At the same time, all
ratings, including the company's 'B+' corporate credit rating, are
affirmed.

The Washington, DC-based television station owner and operator had
total debt outstanding of approximately $481.7 million at
March 31, 2003.

The outlook revision recognizes that ongoing revenue softness
could pressure compliance with a leverage covenant that becomes
slightly more restrictive after Sept. 30, 2003.

"Slower than expected ad revenue growth, combined with tightening
financial covenants, are eroding the company's covenant cushion,"
said credit analyst Alyse Michaelson. Television ad demand
continues to be vulnerable to a weak economic outlook, the ABC-
Network's lackluster primetime ratings, and election cycles. Ms.
Michaelson added that, "distributions to Allbritton's parent
company have minimized the cash flow available for debt
reduction."

The ratings reflect Allbritton's high financial risk from debt-
financed acquisitions, cash flow concentration from limited
geographic and network diversity, and television advertising's
mature growth rates. These factors are somewhat offset by the good
margin potential and discretionary cash flow generation inherent
in the television broadcasting business, and station asset values.

Allbritton owns and operates a modest TV station portfolio in
large-and medium-size markets ranked 8 to 105, reaching 4.9% of US
television households. Cash flow is heavily concentrated in the
Washington, DC market. Allbritton is the third largest independent
owner of ABC-Network affiliates, and all of its stations are
affiliated with the ABC Network. This lack of operational
diversity has been of greater concern lately given ABC's soft
primetime ratings performance.  

In early 2003, Allbritton's local and national advertising revenue
increased in a majority of markets, benefiting from higher revenue
because of the Super Bowl broadcast by the ABC Network, and a
broad based improvement in television advertising. However,
favorable operating trends were dislocated by the war in Iraq,
which resulted in preemptions of regular programming and
advertising cancellations. Further covenant cushion erosion, debt-
financed acquisitions, or distributions to the parent that elevate
debt levels could pressure ratings.


ALLERGY IMMUNO: Brings-In Parks as New Independent Auditors
-----------------------------------------------------------
On June 10, 2003 Allergy Immuno Technologies Inc., engaged Parks,
Tschopp & Whitcomb, P.A., as its independent accountants to report
on the Company's balance sheet as of May 31, 2003, and the related
statements of income, stockholders' equity and cash flows for the
one year period then ended. The decision to appoint Parks, Tschopp
& Whitcomb, P.A. was approved by the Company's Board of Directors.  
Johnson CPA, PLLC & Consulting was dismissed as the Company's
auditors on June 10, 2003. Johnson CPA, PLLC & Consulting had
served as Allergy Immuno Technologies' independent accountants for
the past fiscal year.

Except for an explanatory paragraph concerning the Company's
ability to continue as a going concern, the accountant's report on
the Company's financial statements for the past two years did not
contain an adverse opinion or disclaimer of opinion.


AMR CORP: S&P Equity Analyst Raises Opinion on Shares to 'Hold'
---------------------------------------------------------------
Standard & Poor's airline equity analyst increased the equity
STARS ranking on the shares of AMR Corporation from a two-STARS
"Avoid" to a three-STARS "Hold": AMR Corporation (NYSE: AMR),
which is the parent company of American Airlines, at $10.56 per
share. A leading provider of independent research, indices and
ratings, Standard & Poor's made this announcement through Standard
& Poor's MarketScope, its real-time market intelligence service.

"With passenger demand picking up somewhat, we think investor
sentiment toward airline stocks has shifted, resulting in bargain-
hunting in the battered airline sector. We believe this is a big
part of the reason that the S&P Airline Index is up 15.3% this
year," says Jim Corridore, Airline Equity Analyst, Standard &
Poor's. "While we believe AMR, Northwest and Continental are
likely to continue to lose money and underperform better-
positioned, lower-cost competitors, the improved airfare
environment could lead to lower losses and upside to loss targets.
Also, AMR's liquidity position has stabilized; this should make
near-term bankruptcy less likely," concludes Corridore.

Standard & Poor's Stock Appreciation Ranking System (STARS), which
was first introduced on December 31, 1986, reflects the opinions
of Standard & Poor's equity analysts on the price appreciation
potential of 1,200 U.S. stocks for the next 6-12 month period.
Rankings range from five-STARS (strong buy) to one-STARS (sell).

Standard & Poor's analytic services are performed as entirely
separate activities in order to preserve the independence of each
analytic process. In this regard, STARS, which are published by
Standard & Poor's Equity Research Department, operates
independently from, and has no access to information obtained by
Standard & Poor's Credit Market Services, which may in the course
of its operations obtain access to confidential information.

Standard & Poor's has the largest U.S. equity coverage count among
equity research firms that are not affiliated with a Wall Street
investment bank, analyzing 1,200 U.S. stocks. Standard & Poor's, a
division of The McGraw-Hill Companies (NYSE: MHP), is a leader in
providing widely recognized financial data, analytical research
and investment and credit opinions to the global capital markets.
With 5,000 employees located in 19 countries, Standard & Poor's is
an integral part of the world's financial architecture. Additional
information is available at http://www.standardandpoors.com


ASSOCIATE ESTATES: S&P Cuts Corp. Credit Rating a Notch to B+
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Associated Estates Realty Corp. to 'B+' from 'BB-'. In
addition, the rating on the company's preferred stock was also
lowered to 'CCC+' from 'B-'. The outlook remains negative.

Richmond Heights, Ohio-based AEC owns, or is a joint-venture
partner in, 78 stabilized multifamily properties containing 18,277
units primarily in Midwest markets.

The lowered ratings follow deterioration at the property level
that in turn has weakened cash flow and already low coverage
measures. "The negative outlook remains in place due to the
persistent challenges the company faces in its portfolio and
markets. However, the company's current ratings do acknowledge a
very manageable near-term debt maturity schedule and largely
fixed-rate capital structure," said Standard & Poor's credit
analyst George Skoufis.

While the company's recent strategies appear to have stemmed the
downward property level trends, market conditions remain
challenging and it is unclear if portfolio performance and
coverage measures have reached a bottom. If operating performance
shows steady improvement over the next few quarters, a return to a
stable outlook would be warranted.


BALTIMORE MARINE: Has Until July 11, 2003 to File Schedules
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland granted
Baltimore Marine Industries, Inc., and its debtor-affiliates an
extension to file their schedules of assets and liabilities,
statements of financial affairs and lists of executory contracts
and unexpired leases required under 11 U.S.C. Sec. 521(1).  The
Debtors have until July 11, 2003, to prepare these documents and
deliver them to the Bankruptcy Clerk.  

Baltimore Marine Industries, Inc.'s main line of business is ship
repair.  The Company filed for chapter 11 protection on June 11,
2003 (Bankr. Md. Case No. 03-80215). Martin T. Fletcher, Esq.,
Cameron J. Macdonald, Esq., and Dennis J. Shaffer, Esq., at
Whiteford Taylor & Preston L.L.P., represent the Debtor in its
restructuring efforts.  When the Company filed for protection from
its creditors, it listed estimated debts and assets of over $10
million each.


BETHLEHEM STEEL: Court Approves Rejection of MEDSTAT Contract
-------------------------------------------------------------
Bethlehem Steel Corporation and its debtor-affiliates sought and
obtained the Court's authority to reject its contract with The
MEDSTAT Group, Inc.

George A. Davis, Esq., at Weil Gotshal & Manges LLP, in New York,
informs the Court that since 1998, Bethlehem has employed MEDSTAT
to create a consolidated database of Bethlehem's voluminous
medical and pharmaceutical claims data received in connection
with its healthcare plans.  Since that time, and through various
renewal agreements including a five-year MEDSTAT Advantage Suite
License Agreement between MEDSTAT and Bethlehem dated March 1,
2000, MEDSTAT has gathered and reviewed Bethlehem's incoming
medical and pharmaceutical data received from various vendors
including Blue Cross and Blue Shield, among many others, in order
to allow Bethlehem to:

    1) prepare a mandatory yearly actuarial evaluation of this
       data, and

    2) evaluate changes in its plan constituents and their needs,
       to improve those plans.

On March 3, 2003, Mr. Davis reminds the Court that the Debtors
filed a motion seeking authority to cease the provision of
retiree medical and life insurance benefits effective as of
March 31, 2003.  Continuation of the Debtors' obligations to
provide the Retiree Benefits past March 31, 2003 will likely
render the Debtors' estates administratively insolvent and force
the Debtors to convert their Chapter 11 cases to cases under
Chapter 7 of the Bankruptcy Code.  The Debtors project that their
costs in respect of the Retiree Benefits will be $238,000,000 in
2003, which is $19,800,000 per month.  By reason of its
determination and need to cease paying Retiree Benefits,
Bethlehem no longer requires MEDSTAT's services.

Thus, Mr. Davis believes that the MEDSTAT Contract is financially
burdensome to Bethlehem's estate.  Additionally, Bethlehem does
not believe that there is any potential economic value that could
be realized through an assignment of the MEDSTAT Contract since
the costs under the MEDSTAT Contract are at market rates.
Accordingly, Bethlehem has determined, in the sound exercise of
its business judgment, that the MEDSTAT Contract no longer serves
any useful purpose for Bethlehem, and Bethlehem' estate will be
benefited by immediately eliminating any obligations under the
MEDSTAT Contract.

By eliminating the ongoing administrative payment obligations,
Mr. Davis asserts that the rejection of the MEDSTAT Contract will
contribute to Bethlehem's reorganization efforts.  Under the
terms of the MEDSTAT Contract, Bethlehem has payment obligations
amounting to $39,266.67 per month or $471,200 per year.  As a
result of the rejection of the MEDSTAT Contract, Bethlehem's
estate will save over $1,300,000 in future administrative costs
associated with the MEDSTAT Contract. (Bethlehem Bankruptcy News,
Issue No. 38; Bankruptcy Creditors' Service, Inc., 609/392-0900)


BION ENVIRONMENTAL: Sets Up New Texas Dairy Management System
-------------------------------------------------------------
During the second half of May, 2003, Bion Environmental
Technologies commenced construction of a second generation Bion
Nutrient Management System on the Devries dairy in Texas (which
milks approximately 1150 cows) as a retrofit of the dairy's
existing lagoon. The Company anticipates start-up to occur during
the second half of June of this year. The purpose of this
installation is to demonstrate the capacity of Bion's second
generation NMS to remove nutrients (primarily nitrogen and
phosphorus) from the waste stream.  The Company considers the
success of this system at the Devries Dairy in Texas to be
extremely important in demonstrating the effectiveness of the Bion
NMS.

                          *   *   *

As previously reported, there is substantial doubt about the
Company's ability to continue as a going concern.  In connection
with their report on Bion's Consolidated Financial Statements as
of, and for the year ended, June 30, 2002, BDO Seidman, LLP, the
Company's independent certified public accountants, expressed
substantial doubt about the ability of Bion to continue as a going
concern because of recurring net losses and negative cash flow
from operations.


BSI2000 INC: Closes Reverse Triangular Merger with Knowledge  
------------------------------------------------------------
On March 31, 2003, the reverse triangular merger between Knowledge
Foundations, Inc. and BSI2000, Inc. closed.  Immediately prior to
the closing, KFI spun-off all of its assets and liabilities
(except for a $50,000 note payable and related accrued interest of
$6,825) to Dr. Richard Ballard, Jan Pettitt, Michael Dochterman,
Robert A. Dietrich, Joel Vest(directors, officers, and/or
principal shareholders of KFI) and certain other KFI shareholders.
In connection with  the spin-off, 34,105,900 shares of the common
stock of Knowledge Foundations, Inc. surrendered by the parties
mentioned  above were cancelled. After the spin-off 5,027,818
shares of KFI remained outstanding.

In closing the merger transaction KFI issued 45,122,570 shares of
its common stock for all of the outstanding 8,786,900  shares of
common stock of BSI2000, Inc. Immediately following the closing
KFI changed its name to BSI2000, Inc. and BSI2000, Inc. (a wholly
owned subsidiary of KFI as a result of the merger) changed its
name to BSI Operating, Inc.

As a result of the transactions KFI has divested itself of its
business and has acquired the business of BSI2000, Inc.  For
financial reporting purposes the transactions have been accounted
for as a e-capitalization of BSI2000, Inc. Accordingly the net
increase in the BSI2000, Inc. outstanding shares of 41,363,488
shares (from 8,786,900 to 50,150,388 shares of common stock) has
been reflected in the financial statements as shares issued in the
re-capitalization of BSI2000, Inc.  As a result of the accounting
method adopted to record the merger, for financial reporting
purposes the historical  financial statements of BSI2000, Inc.
have become the historical financial statements of the continuing
entity.

As of March 31, 2003, the company's working capital deficit tops
$10,000.


CALPINE CORP: Places Zion Energy Center Phase II in Operation
-------------------------------------------------------------
Calpine Corporation (NYSE: CPN) has placed in operation an
additional 150-megawatt generating unit at its Zion Energy Center
in Zion, Ill., just south of the Wisconsin/Illinois state line.
With the completion of Phase II, the Zion Energy Center can now
generate 450 megawatts of clean and reliable electricity to help
meet the region's growing need for power. All of the facility's
output is under long-term contract to Milwaukee-based We Energies.

According to Calpine Vice President Jim Shield, "Zion Phase II
continues our successful Midwest power program and demonstrates
our position as a supplier of choice to regional utilities." He
added that, "Calpine has a proven track record in Wisconsin, and
the Zion expansion demonstrates our ongoing ability and commitment
to be part of Wisconsin's energy future."

Zion Phase II includes installation of a third General Electric
7FA combustion turbine adjacent to the existing facility, which
went on line in June 2002. The facility is a peaking unit designed
to operate on either natural gas or distillate oil to ensure
maximum operational flexibility and reliability.
    
                        Calpine in Wisconsin

Calpine's Wisconsin portfolio currently includes approximately 900
megawatts of operating electric generating capacity, with an
additional 650 megawatts under construction - all of which is
under contract to Wisconsin utilities. In addition to the Zion
Energy Center, Calpine:
    
    -- Owns and operates the 460-megawatt Rockgen Energy Center in
       Cambridge, Wis., which provides power to Wisconsin Power &
       Light Company;

    -- Is currently constructing the 650-megawatt Riverside Energy
       Center in Beloit, which will provide power to Alliant
       Energy and Madison Gas & Electric;

    -- Recently acquired the fully permitted Fox Energy Center in
       Kaukauna, which will be used to fulfill an existing
       contract with Wisconsin Public Service;

    -- Developed and operated the 150-megawatt DePere Energy
       Center, which subsequently was sold to its customer,
       Wisconsin Public Service Corporation; and

    -- Has received all necessary regulatory approvals for its
       520-megawatt Fond du Lac Energy Center.
    
Calpine Corporation is a leading North American power company
dedicated to providing electric power to wholesale and industrial
customers from clean, efficient, natural gas-fired and geothermal
power facilities.  The company generates power at plants it owns
or leases in 22 states in the United States, three provinces in
Canada and in the United Kingdom.  Calpine is also the world's
largest producer of renewable geothermal energy, and it owns
approximately one trillion cubic feet equivalent of proved natural
gas reserves in Canada and the United States.  The company was
founded in 1984 and is publicly traded on the New York Stock
Exchange under the symbol CPN. For more information about Calpine,
visit http://www.calpine.com

As previously reported in Troubled Company Reporter, Calpine
Corp.'s senior unsecured debt rating was downgraded to 'B+' from
'BB' by Fitch Ratings. In addition, CPN's outstanding convertible
trust preferred securities and High TIDES were lowered to 'B-'
from 'B'. The Rating Outlook was Stable. Approximately $9.3
billion of securities were affected.


CALPINE CORP: Commencing $1.8 Billion Secured Note Offering
-----------------------------------------------------------
Calpine Corporation (NYSE: CPN), a leading North American power
company, intends to commence an offering of approximately $1.8
billion of second-priority senior secured notes and term loans.
The final principal amount and note maturities will be determined
by market conditions. The notes and term loans will be secured by
substantially all of the assets owned directly by Calpine
Corporation, including natural gas and power plant assets and the
stock of Calpine Energy Services and other subsidiaries.

The company intends to use the net proceeds from the offering to
repay existing indebtedness including approximately $950 million
of Term Loan B borrowings, $450 million outstanding under the
company's working capital revolvers, and outstanding public
indebtedness in open-market purchases, and as otherwise permitted
by the company's indentures. The company expects to establish a
$500 million working capital revolver, which will be secured by a
first-priority lien on the same assets that will secure the notes
and term loans.  This new revolver will replace the company's
existing $950 million working capital revolver.

The senior secured notes and term loans will be offered in a
private placement under Rule 144A, have not been registered under
the Securities Act of 1933, and may not be offered in the United
States absent registration or an applicable exemption from
registration requirements.


CANADIAN HYDRO: Files Final Prospectus for Equity Financing
-----------------------------------------------------------
Canadian Hydro Developers, Inc., announced that, in connection
with its previously announced common share offering, it has filed
a final prospectus and entered into an underwriting agreement with
a syndicate of underwriters led by FirstEnergy Capital Corp., and
including Acumen Capital Finance Partners Limited, and Canaccord
Capital Corporation, to issue 16,220,000 common shares at a price
of $1.85 per share for gross proceeds of $30 million, subject to
regulatory approval. It is anticipated that the sale will close on
July 11, 2003. Net proceeds from the offering will be used to fund
the construction of the 25 MW Upper Mamquam Hydroelectric Project
and the 15 MW (7.5 MW net to the Company's interest) Pingston
Expansion Hydroelectric Project, with the balance of the proceeds
being utilized for the development of prospects and for general
corporate purposes. The green power from these projects has been
contracted to BC Hydro for 20 years.

The completion of the equity financing is contingent upon the
Company entering into an amended credit agreement for additional
credit facilities in the amount of $59.4 million, which the
Corporation anticipates executing by June 30, 2003.  The proceeds
from these new credit facilities are to be utilized in the
construction of the 25 MW Grande Prairie EcoPower(TM) Centre, the
Upper Mamquam Hydroelectric Project and the Pingston Expansion
Hydroelectric Project.

Canadian Hydro Developers, Inc. is committed to the concept of
low-impact power generation. Through its wind and run-of-river
hydro facilities, Canadian Hydro is demonstrating that commitment
to the benefit of the environment and its shareholders.

Canadian Hydro's March 31, 2003 balance sheet shows that its
total current liabilities outweighed its total current assets by
about $1 million.

At March 31, 2003, the Company was not in compliance with one of
its Loan covenants, which requires the Company to maintain a
debt service ratio of not less than 1.3:1.0. The Company was not
in compliance with this covenant due to the Pingston
Hydroelectric Plant not being in operation in March 2003 as
originally expected. The Company's corporate bankers have waived
compliance for this covenant. Because the Pingston Hydroelectric
Plant became operational in early May 2003, management has
determined it is likely the Company will be in compliance with
all Loan covenant requirements at June 30, 2003 and will
continue to be for at least one year from the balance sheet
date. Accordingly, the Loan has been classified as a long-term
liability.

Subsequent to March 31, 2003, the Company accepted an offering
letter from its existing and two additional corporate bankers
for additional credit facilities in the amount of $63,900,000.
The credit facilities will consist of 364 day revolving
construction lines of credit in the amount of $59,400,000 and an
increase in the treasury risk line of credit by $4,500,000. The
credit facilities are to assist in the construction of the
Grande Prairie EcoPower(TM) Centre, Pingston Expansion and Upper
Mamquam Hydroelectric Projects. The Company expects to close
this financing by June 30, 2003.


CENDANT MORTGAGE: Fitch Rates Class B-4 and B-5 Certs. at BB/B
--------------------------------------------------------------
Cendant Mortgage Capital LLC's $175.9 million mortgage pass-
through certificates, series 2003-6 classes A-1 through A-7, A-P,
X, R-I and R-II certificates (senior certificates) are rated 'AAA'
by Fitch Ratings. In addition, Fitch rates the $2.4 million class
B-1 certificates 'AA', $1.1 million class B-2 certificates 'A',
$500,000 class B-3 certificates 'BBB', $400,000 privately offered
class B-4 certificates 'BB' and $300,000 privately offered class
B-5 certificates 'B'.

The 'AAA' rating on the senior certificates reflects the 2.75%
subordination provided by the 1.35% class B-1, 0.60% class B-2,
0.30% class B-3, 0.20% privately offered class B-4, 0.15%
privately offered class B-5 and 0.15% privately offered class B-6
(not rated by Fitch). Fitch believes the above credit enhancement
will be adequate to support mortgagor defaults as well as
bankruptcy, fraud and special hazard losses in limited amounts. In
addition, the ratings also reflect the quality of the underlying
mortgage collateral, strength of the legal and financial
structures and the servicing capabilities of Cendant Mortgage
Corporation, which is rated 'RPS1-' by Fitch.

The certificates represent ownership in a trust fund, which
consists primarily of 381 one- to four-family conventional, fixed
rate mortgage loans secured by first liens on residential mortgage
properties with original terms to maturity not greater than 30
years. As of the cut-off date (June 1, 2003), the mortgage pool
has an aggregate principal balance of approximately $180,823,428,
a weighted average original loan-to-value ratio (OLTV) of 67.18%,
a weighted average coupon (WAC) of 5.89%, a weighted average
remaining term (WAM) of 359 months and an average balance of
$474,602. The loans are primarily located in California (20.39%),
New Jersey (18.74%) and Massachusetts (9.98%).

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

All of the mortgage loans were either originated or acquired in
accordance with the underwriting guidelines established by Cendant
Mortgage Corporation. Any mortgage loan with an OLTV in excess of
80% is required to have a primary mortgage insurance policy.
Approximately 0.55% of the mortgage pool contains pledged asset
loans. These loans, also referred to as 'Additional Collateral
Loans', are secured by a security interest, normally in securities
owned by the borrower, which generally does not exceed 30% of the
loan amount. Ambac Assurance Corporation provides a limited
purpose surety bond, which guarantees that the Trust receives
certain shortfalls and proceeds realized from the liquidation of
the additional collateral, up to 30% of the original principal
amount of that Additional Collateral Loan.

Citibank N.A. will serve as trustee. For federal income tax
purposes, an election will be made to treat the trust fund as two
real estate mortgage investment conduits.


CIGNA COLLATERALIZED: S&P Downgrades Class I Note Rating to BB
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
I notes issued by CIGNA Collateralized Holdings 1999-1 CDO Ltd.
and removed it from CreditWatch with negative implications, where
it was placed Feb. 27, 2003.

The lowered rating reflects several factors that, during recent
months, have further negatively affected the credit enhancement
available to support the notes. These factors include par erosion
of the collateral pool securing the rated notes, a downward
migration in the credit quality of the assets within the pool, and
a decline in the weighted average coupon generated by the fixed-
rate assets in the pool.

Standard & Poor's notes that $18.37 million (or approximately 7%)
of the assets currently in the collateral pool come from obligors
rated 'D' or 'SD'. As a result of asset defaults and credit risk
sales at distressed prices, the par value ratios for the
transaction have deteriorated since the previous rating action. As
of the June 10, 2003 trustee report, the senior par value test was
failing, with a current ratio of 100.8% versus the minimum
required 127.0%, and an effective date par value of approximately
140%.

Currently, $33.75 million (or approximately 14%) of the performing
assets in the collateral pool come from obligors with ratings on
CreditWatch negative. Of the assets in the pool, $22.26 million
(or approximately 9%) come from obligors with ratings in the 'CCC'
range.

Furthermore, Standard & Poor's noted that CIGNA Collateralized
Holdings 1999-1 CDO Ltd. would trigger a technical event of
default if, on any measurement date, it failed to maintain an
aggregate principal balance of collateral debt securities and
eligible investments at least equal to 100% of the aggregate
outstanding amount of the senior notes (class I, IIa, and IIb).

Standard & Poor's has reviewed current cash flow runs generated
for CIGNA Collateralized Holdings 1999-1 CDO Ltd. to determine the
future defaults it can withstand under various stressed default
timing scenarios while still paying all of the rated interest and
principal due on the class I notes. Upon comparing the results of
these cash flow runs with the projected default performance of the
current collateral pool, Standard & Poor's determined that the
rating previously assigned to the class I notes was no longer
consistent with the credit enhancement currently available,
resulting in the lowered rating. Standard & Poor's will be in
contact with TimesSquare Capital Management Inc., the collateral
manager, and will continue to monitor the performance of the
transaction to ensure the rating assigned to the notes remains
consistent with the credit enhancement available.

       RATING LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE

            CIGNA Collateralized Holdings 1999-1 CDO Ltd.

        Class      Rating                  Balance ($ mil.)
                To        From            Original   Current
        I       BB        BBB/Watch Neg    240.000   217.609


CNH GLOBAL: S&P Places BB Corporate Credit Rating on Watch Neg.
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB' corporate
credit rating on CNH Global N.V. on CreditWatch with negative
implications, following the same action on parent company, Italy-
based Fiat SpA (BB+/Watch/B) and on 'BB'-rated Case Corp.

CNH, with executive headquarters in Lake Forest, Ill., is one of
the world's two leading agricultural equipment producers and the
third-largest manufacturer of construction equipment and had
consolidated debt of about $8.7 billion at March 31, 2003.

The ratings on CNH and Fiat are closely aligned because of Fiat's
strong liquidity support in the form of intracompany loans and
bank loan guarantees, joint bank borrowings, and large equity
investment. In April 2003, CNH closed on a $2 billion debt-for-
equity swap with Fiat in the form of convertible preferred stock,
lowering CNH's annual interest by $100 million and increasing
Fiat's ownership in CNH on a converted basis to 92%.

Fiat's management has announced additional efforts to improve the
profitability and the efficiency of Fiat Auto over the medium
term. This development increases the likelihood that the cash-
draining Fiat Auto division will remain a part of Fiat. Standard &
Poor's had previously assumed that Fiat would exercise its put
option to General Motors Corp. (BBB/Negative/A-2) or, through
other means, reduce its stake in Fiat Auto.

CNH, created in November 1999 though the merger of Case Corp. and
New Holland N.V. is part-way through a substantial rationalization
and integration program to improve profitability and cash flow
generation. Through year-end 2002, CNH had achieved nearly $600
million of cost reductions and is on target to achieve another
$500 million-$600 million by the end of 2005.

"We will review the details of Fiat's relaunch plan and CNH's
rationalization and operating plans prior to arriving at a ratings
decision. Ratings on CNH Global may or may not be lowered
depending on the extent of a potential downgrade of Fiat's
ratings," said Standard & Poor's credit analyst Daniel DiSenso.


CONSECO FINANCE: Selling Loan & Credit Accounts to EMCC, Inc.
-------------------------------------------------------------
The Conseco Finance Debtors have reached an Asset Sale Agreement
with EMCC, Inc. The assets to be purchased are:

    -- manufactured home loan and credit accounts with unpaid
       balances that have been charged off by the CFC Debtors as
       uncollectible obligations; and

    -- manufactured home loan and credit accounts with unpaid
       deficiency balances remaining after repossession and sale
       of the collateral securing the account with outstanding
       balances that remain obligations of the defaulting
       customers.

CFN Investment Holdings, proposed purchaser of the CFC Debtors'
assets, has given its required consent to this Transaction.  EMCC
will pay the sum of:

   (i) 0.0489125% of the aggregate of the unpaid balances for the
       Accounts as of May, 20, 2003; minus

  (ii) 100% of the collections net of third party collection costs
       and expenses; and minus

(iii) any adjustments.

The CFC Debtors preliminarily estimate that the price for these
assets will be $3,354,000. (Conseco Bankruptcy News, Issue No. 27;
Bankruptcy Creditors' Service, Inc., 609/392-0900)    


CORAM: Working with Trustee's Advisors to Amend Valuation
---------------------------------------------------------
Certain financial advisors to the Chapter 11 trustee overseeing
the jointly administered bankruptcy cases of Coram Healthcare
Corporation and its wholly-owned subsidiary, Coram, Inc.,
previously furnished an enterprise valuation analysis, dated
December 11, 2002, to Coram Healthcare Corporation and its
subsidiaries. Such enterprise valuation analysis was utilized in
the determination of the Company's goodwill impairment pursuant to
Statement of Financial Accounting Standards No. 142, Goodwill and
Other Intangible Assets.

In certain ongoing bankruptcy-related proceedings, the Company's
management, the Chapter 11 trustee and his financial advisors were
made aware of inaccuracies in the aforementioned enterprise
valuation analysis. In connection therewith, management estimates
that the Company's non-cash charge for the impairment of goodwill
and other long-lived assets during the year and quarter ended
December 31, 2002, was overstated by approximately $10 million to
$12 million; however,  management has not yet completed all of its
financial analyses relative to this matter. Because management
believes that there will be no related income tax effect, the
reported net income for the year and quarter ended December 31,
2002 is expected to be favorably impacted by an amount equivalent
to the correction of the overstated non-cash charge. There will be
no income statement impact for the quarter ended March 31, 2003.

Management is currently working with the Chapter 11 trustee's
financial advisors to complete an amended enterprise valuation
report whereupon the amount of the overstatement of the non-cash
charge for the impairment of goodwill will be determined.
Additionally, management expects to work with its independent
auditors to make the necessary adjustments to the Company's
consolidated financial statements included in its Annual Report on
Form 10-K/A Amendment No. 1 for the year ended December 31, 2002
and its Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 2003 as soon as practical. Management is not
currently aware of any other material adjustments that will be
required to the Company's consolidated financial statements;
however, it is possible that other adjustments may be identified
in the process of restating the Company's consolidated financial
statements.


COVANTA ENERGY: Gets Court's Blessing for Hennepin Transactions
---------------------------------------------------------------
Vincent E. Lazar, Esq., at Jenner & Block LLC, in Chicago,
Illinois, relates that Covanta Hennepin Resource Recovery
Company, LP presently operates a waste-to-energy facility
located in Hennepin County, Minnesota.

The Facility is owned by United States Trust Company of New York,
as Owner Trustee, pursuant to a Trust Agreement dated as of
November 15, 1988 between Owner Trustee  and General Electric
Capital Corporation, as Owner Participant. The Owner Trustee
leased the Facility to Covanta Hennepin pursuant to an Amended and
Restated Lease Agreement dated as of September 1, 1992.  The land
where the facility is located is owned by the County and leased to
the Owner Trustee under a Ground Lease dated as of October 1, 1986
and leased to Covanta Hennepin by the Owner Trustee to a Site
Sublease dated as of December 20, 1989. Covanta Hennepin's
obligations under the Facility Lease are guaranteed by CEC under a
Parent Company Guarantee.

In 1992, in order to finance part of the cost of constructing
and equipping the Facility, the County issued revenue bonds,
County's General Obligation Solid Waste Revenue Refunding Bonds,
Series 1992, in the remaining outstanding principal amount of
$62,955,000 -- the Outstanding Bonds -- pursuant to a Trust
Indenture dated as of September 1, 1992, as amended, between the
County and M & I Bank -- the Bond Trustee.

Moreover, Mr. Lazar continues, the County and Owner Trustee are
parties to a Loan Agreement dated as of September 1, 1992 under
which the Owner Trustee is obligated to make loan repayments to
the County sufficient to pay debt service on the Outstanding
Bonds. Under the Service Agreement, the County is obligated to
pay a service fee for the processing of solid waste delivered by
the County to Covanta Hennepin at the Facility.  The Service Fee
must be in an amount sufficient to pay, among other things, debt
service on the Outstanding Bonds.  Finally, under the Facility
Lease, Covanta Hennepin is obligated to pay rent to the Owner
Trustee in an amount that is sufficient to pay debt service on
the Outstanding Bonds.

In addition, under the existing terms, Covanta Hennepin is
obligated to pay rent over and above the amount necessary to
service the debt to the Owner Trustee under the Facility Lease.
The additional rent has been deferred until 2010, at which time
Covanta Hennepin must pay it in two installments totaling
approximately $36,000,000.  This obligation is secured by
existing letters of credit that were issued pursuant to the DIP
Facility, which now total $25,174,069 and increased by
approximately $2,200,000 each October before 2010.

In the event the confirmation of the Debtors' Plan does not occur
and Covanta Hennepin breaches its obligations under the New
Service Agreement, any claim for damages the County asserts
against Covanta Hennepin or CEC will be treated as a general
unsecured prepetition claim in the Bankruptcy Case.  On the other
hand, if a Plan is confirmed and Covanta Hennepin breaches its
obligation under the New Service Agreement, any claim for damages
the  County asserts against Covanta Hennepin or CEC will be
treated as claims against reorganized Covanta Hennepin and CEC
secured by the security interests.

Accordingly, pursuant to Sections 105(a), 363(b)(1) and 365(a)
and (f) of the Bankruptcy Code, the Debtors ask the Court to
authorize Covanta Hennepin or CEC to:

  (a) consent to the County's purchase of the interest of TIFD
      III-A, a wholly owned subsidiary of GECC, in the Facility;

  (b) terminate or consent to the termination of certain
      agreements, including certain leases between Covanta
      Hennepin and GECC, the existing Service Agreement for the
      Facility's operation and certain agreements relating to
      the financing of the Facility;

  (c) enter into a new service agreement with the County, issue
      a new parent company guarantee and deliver a Security
      Agreement with respect to certain spare parts and certain
      movable equipment; and

  (d) assume and assign to the County, Covanta Hennepin's
      interest in the Resource Recovery Electric Sale Agreement
      dated August 1, 1986, and Addendum I dated July 1, 1988,
      between Covanta Hennepin and Xcel Energy, successor to
      Northern States Power Company. (Covanta Bankruptcy News,
      Issue No. 30; Bankruptcy Creditors' Service, Inc., 609/392-
      0900)    


CROWN CASTLE: Commences $200MM Senior Convertible Notes Offering
----------------------------------------------------------------
Crown Castle International Corp. (NYSE: CCI) announced a public
offering of convertible senior notes expected to raise
approximately $200 million. Crown Castle intends to use the net
proceeds from this offering to fund a portion of the previously
announced redemption on July 7, 2003 of its 10-5/8% Senior
Discount Notes.  Further, this offering retains Crown Castle's
flexibility to utilize a portion of its existing cash balances to
purchase or redeem all of its outstanding 12-3/4% Senior
Exchangeable Preferred Stock due 2010, which had an aggregate
redemption value of $245.8 million as of March 31, 2003.  Crown
Castle currently expects to purchase or redeem the 12-3/4% Senior
Exchangeable Preferred Stock no later than December 15, 2003, the
first contractual optional redemption date for such securities.

"This offering is part of our continuing effort to reduce interest
costs, increase free cash flow and strengthen the balance sheet,"
stated John P. Kelly, Chief Executive Officer and President of
Crown Castle.  "As such, this offering provides us with additional
flexibility to utilize cash to repurchase certain debt and
preferred issues at attractive returns."

Copies of a prospectus supplement and the accompanying prospectus
will be available from J.P. Morgan Securities Inc., 277 Park
Avenue, New York, New York 10172 and Morgan Stanley & Co.,
Incorporated, 1585 Broadway, New York, New York 10036.

Crown Castle International Corp. engineers, deploys, owns and
operates technologically advanced shared wireless infrastructure,
including extensive networks of towers and rooftops as well as
analog and digital audio and television broadcast transmission
systems. Crown Castle offers near-universal broadcast coverage in
the United Kingdom and significant wireless communications
coverage to 68 of the top 100 United States markets, to more than
95 percent of the UK population and to more than 92 percent of the
Australian population. Crown Castle owns, operates and manages
over 15,500 wireless communication sites internationally. For more
information on Crown Castle, visit: http://www.crowncastle.com

As previously reported in Troubled Company Reporter, Standard &
Poor's lowered its corporate credit rating on wireless tower
operator Crown Castle International Corp., to 'B-' from 'B+', and
removed the rating from CreditWatch with negative implications.

The outlook is negative.

The downgrade was due to concerns that weak tower industry
fundamentals would make it unlikely for Crown Castle to reduce its
heavy debt burden in the foreseeable future and contribute to
increased liquidity risk starting in 2004.


DEL MONTE FOODS: Fiscal Q4 2003 Results Show Marked Improvement
---------------------------------------------------------------
Del Monte Foods Company (NYSE: DLM) reported net sales of $776.0
million and net income of $23.5 million for the fourth quarter
ended April 27, 2003, compared to reported net sales of $498.4
million and net income of $47.5 million in the prior year period.

Adjusting both quarters for the factors detailed in the charts
below, pro forma as adjusted diluted earnings per share for the
fiscal 2003 fourth quarter is $0.21, compared to $0.20 in fiscal
2002. The Company also announced that since the close of the
merger on December 20, 2002, it succeeded in paying down debt by
over $150 million, while increasing its cash balance by
approximately $30 million.

"We are pleased that our top and bottom-line results met our
overall expectations," said Richard G. Wolford, Chairman and Chief
Executive Officer. "This performance reflects solid execution in
our Consumer Products business while our significant cash-flow
enabled continued debt reduction. Our business segments are
performing largely as expected, as we are successfully integrating
our businesses and continue to generate strong cash flow. In
fiscal 2004, we look forward to our team's first full-year of
working together to implement our strategies to build our Company
and to substantially complete our integration, which is
progressing ahead of schedule due, in large part, to the
coordinated efforts and dedication of our entire organization."

The increase in reported net sales for the quarter, when compared
to reported net sales for the fourth quarter of fiscal 2002, was
due primarily to the inclusion of Del Monte Brands sales after the
completion of the merger. Adjusting both quarters for the factors
detailed in the charts below, pro forma as adjusted net sales were
$782.3 million for the fiscal 2003 fourth quarter, compared to
$850.1 million in the prior year period. This decrease in year
over year revenues is due primarily to a planned reduction in
sales of the private label and other non-core portions of the pet
products portfolio, the impact of our strategic decision not to
replicate prior year fourth quarter promotional programs and lower
sales of infant feeding products; partially offset by growth in
the Del Monte Brands business, and increased tuna pouch and soup
sales.

Reported diluted earnings per share were $0.11 for the quarter,
compared to $0.30 for the fourth quarter of fiscal 2002. Adjusting
both quarters for the factors detailed in the charts below, pro
forma as adjusted diluted earnings per share for the fiscal 2003
fourth quarter is $0.21, compared to $0.20 in fiscal 2002, due
primarily to decreased interest expense and increased operating
margins, partially offset by the impact of lower sales.

               Twelve Months Ended April 27, 2003

The Company announced reported net sales of $2,171.1 million and
net income of $133.5 million for fiscal 2003, compared to reported
net sales of $1,817.0 million and net income of $180.0 million in
fiscal 2002. Adjusting both years for the factors detailed in the
charts below, pro forma as adjusted diluted earnings per share for
fiscal 2003 is $0.85, compared to $0.80 in fiscal 2002.

The increase in reported net sales for fiscal 2003, when compared
to reported net sales for fiscal 2002, was due primarily to the
inclusion of Del Monte Brands after the completion of the merger.
Pro forma as adjusted net sales which were adjusted for the
factors detailed in the charts below, were $3,079.2 million for
fiscal 2003, compared to $3,185.3 million in fiscal 2002. The
decrease in year over year revenues is due primarily to a planned
reduction in sales of the private label and other non-core
portions of the pet products portfolio, the impact of our
strategic decision not to replicate prior year fourth quarter
promotional programs and lower sales of infant feeding products;
partially offset by growth in the Del Monte Brands business, and
increased tuna pouch and soup sales.

Reported diluted earnings per share for fiscal 2003 were $0.76,
compared to $1.15 for fiscal 2002. Adjusting both years for the
factors detailed in the charts below, pro forma as adjusted
diluted earnings per share for fiscal 2003 is $0.85, compared to
$0.80 in fiscal 2002, due primarily to decreased interest expense
and increased operating margins, partially offset by the impact of
lower sales.

                              Outlook

The Company also reiterated the financial guidance it provided in
its May 16, 2003 press release. It expects fiscal 2004 revenue
growth of 2 to 4% over pro forma fiscal 2003. The Company also
expects reported diluted earnings per share of approximately $0.80
to $0.84 for its fiscal year ending May 2, 2004. When adjusted for
integration and restructuring expenses of $0.08 per share, the
Company expects fiscal 2004 adjusted diluted earnings per share
growth of 6 to 9%, to approximately $0.88 to $0.92. The Company
also expects free cash flow, before merger-related, integration
and restructuring expenses, to be consistent with prior guidance.
Merger-related, integration and restructuring expenses for 2004
are expected to be approximately $26 million, approximately $17
million net of taxes. The Company expects to pay down debt by
approximately $175 million in fiscal 2004.

Del Monte Foods Company, with over $3 billion in pro forma net
sales, is the country's largest provider of premium-quality
processed fruits, vegetables, tomatoes, tuna fish and private
label soup and a leading marketer and producer of pet products and
baby foods. With a powerful portfolio of top-name brands including
Del Monte(R), Contadina(R), StarKist(R), S&W(R), Nature's
Goodness(TM), College Inn(R), 9Lives(R), Kibbles'n Bits(R), Pup-
Peroni(R), Snausages(R), and NawSomes!(R), Del Monte products are
found in 9 out of 10 American households. For more information on
Del Monte Foods Company (NYSE:DLM), visit the Company's Web site
at http://www.delmonte.com  

As reported in Troubled Company Reporter's January 2, 2003
edition, H.J Heinz and Company and Del Monte Foods Company
completed a transaction whereby Del Monte merged with SKF Foods,
Inc. SKF Foods businesses include the former Heinz U.S. Seafood,
North American Pet Food and Pet Snacks, U.S. Private Label Soup,
and U.S. Infant Feeding businesses.

Fitch's ratings reflected the consummation of this transaction.
Fitch continues to rate Heinz's, H.J. Heinz Finance Company's,
H.J. Heinz Finance UK Plc.'s, H.J. Heinz B.V.'s, and H.J. Heinz
Company of Canada Ltd's senior unsecured debt 'A' and commercial
paper 'F1'; and Del Monte Corporation's bank debt and senior
secured notes 'BB-' and subordinated notes 'B'.


DELTAGEN INC: Files for Chapter 11 Protection in San Francisco
--------------------------------------------------------------
Deltagen, Inc. (Nasdaq: DGEN) has filed a voluntary petition under
Chapter 11 of the federal Bankruptcy Code in the United States
Bankruptcy Court in San Francisco, California.

Given actions taken by Lexicon Genetics, Incorporated and the
inability to develop a sustainable revenue base that would support
its operational needs, the second tranche of its bridge loan and
its Series A preferred stock financing will not close. The Company
was unable to obtain alternative sources of capital and,
therefore, filed for bankruptcy while it had sufficient funds to
explore dispositions of its assets and other reorganization
transactions.

The Company also announced that it reduced its workforce to 28
employees.

Additionally, the Company announced the appointments of Mr. Larry
Hill as Chief Executive Officer and Mr. Daniel Ratto as Chief
Financial Officer. Mr. Hill will also serve as the Company's
responsible individual during the Company's reorganization
process. Mr. Hill is a principal with the firm Hickey & Hill,
Inc., which specializes in corporate restructuring and management.

Additionally, Deltagen, Inc. announced it has been notified by the
staff of the Nasdaq Stock Market that it has not regained
compliance with Marketplace Rule 4450(a)(5), related to the bid
price of Deltagen's common stock, and that it is not in compliance
with Rules 4350(c) and 4350(d)(2) related to independent director
and audit committee requirements for continued listing on the
Nasdaq Stock Market. The Company has decided not to appeal
Nasdaq's delisting determination. As a result, Deltagen's
securities will be delisted from the National Market at the
opening of business on July 3, 2003. The Company believes that it
should be eligible for trading on the OTC Bulletin Board. At least
one market maker must make application to the NASD in order for
trading to start on the OTC Bulletin Board.


DELTAGEN INC: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Deltagen, Inc.
        700 Bay Rd.
        Redwood City, California 94063

Bankruptcy Case No.: 03-31906

Type of Business: Provider of essential data on the in vivo
                  mammalian functional role of newly discovered
                  genes

Chapter 11 Petition Date: June 27, 2003

Court: Northern District of California (San Francisco)

Judge: Dennis Montali

Debtor's Counsel: Henry C. Kevane, Esq.
                  Pachulski, Stang, Ziehl, Young and Jones
                  3 Embarcadero
                  Center #1020
                  San Francisco, CA 94111
                  Tel: (415) 263-7000

Total Assets: $54,856,000 (as of March 31, 2003)

Total Debts: $41,173,000 (as of March 31, 2003)


EL PASO CORP: Settles Western Energy Litigation & Most Claims
-------------------------------------------------------------
El Paso Corporation (NYSE: EP) has executed two definitive
settlement agreements that resolve the principal litigation and
claims against El Paso relating to the sale or delivery of natural
gas and/or electricity to or in the Western United States. Parties
to the Master Settlement Agreement include private class action
litigants in California; the governor and lieutenant governor of
California; the attorneys general of California, Washington,
Oregon and Nevada; the California Public Utilities Commission; the
California Electricity Oversight Board; the California Department
of Water Resources; Pacific Gas and Electric Company and Southern
California Edison Company.  A separate settlement agreement was
simultaneously executed with five California municipalities and
six non-class private plaintiffs.

"One of the objectives in our 2003 Operational and Financial Plan
is to resolve the company's principal litigation and regulatory
matters," said Ronald L. Kuehn, Jr., chairman and chief executive
officer of El Paso Corporation.   "Finalizing this settlement is a
critical step in that effort and will help resolve the
uncertainties that have surrounded El Paso in the market relating
to the energy crisis in the Western United States.  The settlement
will allow us to focus our efforts on increasing the core value of
El Paso and maximizing shareholder value."

El Paso announced that it had reached an agreement in principle
relating to its Western Energy Crisis litigation on March 21,
2003.  The following provides more detail on the definitive
settlement agreements:

     --  El Paso has admitted to no wrongdoing;

     --  El Paso will make cash payments of $78.6 million that
         will be deposited into escrow for the benefit of the
         parties to the Master Settlement Agreement subsequent to
         the signing of the definitive agreements.  This amount
         represents the originally announced $102-million cash
         payment less credits for amounts paid to other parties;

     --  El Paso has agreed to issue approximately 26.4 million
         shares of common stock on behalf of the settling parties.  
         If such issuance is completed prior to final approval of
         the Master Settlement Agreement, the proceeds from any
         sale will be deposited into escrow for the benefit of the
         settling parties until final approval is received;

     --  El Paso will pay $45 million in cash per year over a 20-
         year period rather than deliver natural gas as originally
         contemplated.  This arrangement does not change El Paso's
         economic obligations under the settlement, permits El
         Paso to use its entire portfolio of gas reserves as a
         possible source of funding for the payments, and
         eliminates the obligations associated with delivery of
         natural gas over the period.  The substitution of cash
         for delivered gas also provides El Paso with the
         flexibility to prepay its obligations if it is
         economically advantageous to do so.  Upon final approval
         of the Master Settlement Agreement, El Paso will be
         required to provide collateral for this obligation in the
         form of oil and gas reserves, other assets (to be agreed
         upon) or cash and letters of credit.  The initial
         collateral requirement will be between $455 million and
         $600 million depending on the nature of the collateral
         provided;

     --  El Paso will reduce its prices under two power supply
         contracts with the California Department of Water
         Resources by a total of $125 million, pro rated on a
         monthly basis for the remainder of the term of the
         contracts.  The difference between the current prices and
         the reduced prices will be placed into escrow for the
         benefit of the settling parties on a monthly basis as
         deliveries are made under those contracts until final
         approval of the Master Settlement Agreement.  At that
         time, the actual prices for delivered power will be
         reduced; and

     --  El Paso will retire the 20-year obligation to pay $22
         million per year in cash by depositing $250 million into
         escrow for the benefit of the settling parties within 180
         days of the signing of the definitive agreements.  This
         prepayment eliminates any collateral that might have been
         required on the $22-million per year payment over the
         next 20 years.

The principal obligations under the Master Settlement Agreement
will be met as follows:

     -- El Paso Natural Gas Company will ultimately make the
        upfront cash payments and the $250-million payment into
        escrow.  In addition, El Paso Corporation will provide the
        proceeds from the issuance of its common stock to the
        settling parties through El Paso Natural Gas Company; and

     -- El Paso Merchant Energy, a subsidiary of El Paso
        Corporation, will make the $45-million per year payments
        and will deliver power under the power supply agreements
        at reduced prices.

The definitive settlement agreements modify the initial agreement
in principle in certain respects and as a result El Paso expects
to update its initial accrual for the cost of the settlement.  
Incremental charges will occur due to the increase in the
company's share price since the original accrual for the
obligation to issue approximately 26.4 million shares, and due to
the prepayment of the $22-million per year obligation.  The
company currently expects an additional pre-tax charge of between
$150 million and $200 million in the second quarter of 2003.

The Master Settlement Agreement is subject to approval by the
California Superior Court for San Diego County.  Earlier this
month, in anticipation of the execution of the Master Settlement
Agreement, El Paso, the Public Utilities Commission of the State
of California, Pacific Gas & Electric Company, Southern California
Edison Company, and the City of Los Angeles filed a Joint
Settlement Agreement with the Federal Energy Regulatory Commission
in resolution of certain specific proceedings before that agency.  
The Company currently expects final approval of the Master
Settlement Agreement by late 2003 or early 2004.

El Paso Corporation is the leading provider of natural gas
services and the largest pipeline company in North America.  The
company has core businesses in pipelines, production, and
midstream services.  Rich in assets, El Paso is committed to
developing and delivering new energy supplies and to meeting the
growing demand for new energy infrastructure.  For more
information, visit http://www.elpaso.com

                         *     *     *

As reported in Troubled Company Reporter's February 11, 2003
edition, Standard & Poor's lowered its long-term corporate credit
rating on energy company El Paso Corp., and its subsidiaries to
'B+' from 'BB'.

Standard & Poor's also lowered its senior unsecured debt rating at
the pipeline operating companies to 'B+' from 'BB' and the senior
unsecured rating on El Paso to 'B' from 'BB-', reflecting
structural subordination relative to the operating companies. All
ratings on El Paso and its subsidiaries were removed from
CreditWatch, where they were placed Sept. 23, 2002. The outlook is
negative.


EL PASO ELECTRIC: Enters into Energy Agreement with Mexico's CFE
----------------------------------------------------------------
El Paso Electric (NYSE: EE) and the Comision Federal de
Electricidad, the national electric utility of Mexico, have signed
a contract under which EPE will sell up to 100 MW of non-firm
power to the CFE, on a 24-hour basis, during the months of June,
July and August 2003.  Pricing and profitability of this sale is
expected to produce financial results similar to those generated
by the 2002 sale.

"We are pleased to continue our long-standing relationship with
the CFE," said Gary Hedrick, El Paso Electric President and CEO.  
"This contract serves as a confirmation of our continued
commitment to Mexico and allows us another opportunity to share
the benefits with our customers."

El Paso Electric is a regional electric utility providing
generation, transmission and distribution service to approximately
316,000 retail customers in a 10,000 square mile area of the Rio
Grande valley in west Texas and southern New Mexico, including
wholesale customers in New Mexico, Texas and Mexico.  EE has a net
installed generating capacity of approximately 1,500 MW.  EPE's
common stock trades on the New York Stock Exchange under the
symbol EE.

As reported in Troubled Company Reporter's April 28, 2003 edition,
Fitch Ratings withdrew the ratings of El Paso Electric Company. At
the time of withdrawal, the ratings were as listed below, and the
Rating Outlook was Stable.

         -- First mortgage bonds 'BBB-';

         -- Unsecured pollution control revenue bonds 'BB+'.


ELAN CORP: Wants More Time to File Annual Report on Form 20-F
-------------------------------------------------------------
Elan Corporation, plc (NYSE: ELN) intends to file with the
Securities and Exchange Commission a Form 12b-25 to extend to July
15, 2003, the filing date for Elan's Annual Report on Form 20-F
for fiscal 2002.

The delay in filing is the result of current discussions among
Elan and the Office of Chief Accountant and the Division of
Corporation Finance of the SEC regarding the appropriate
accounting treatment, under U.S. Generally Accepted Accounting
Principals, for Elan's qualifying special purpose entities, Elan
Pharmaceutical Investments, Ltd., Elan Pharmaceutical Investments
II, Ltd., and Elan Pharmaceutical Investments III, Ltd.

The delay in filing the 2002 Form 20-F may cause a technical
default under certain of Elan's debt covenants that require it to
provide audited consolidated financial statements to the holders
of the EPIL II and EPIL III notes and Elan's 7-1/4% Senior Notes.

G. Kelly Martin, President and Chief Executive Officer, said,
"Elan is fully cooperating with the SEC and is pursuing all
available options for quickly resolving the SEC discussions and
for addressing the impact of those discussions on Elan's
outstanding debt." Mr. Martin continued, "At Elan, we are
dedicated to continuing our efforts to deliver life-changing
solutions that enable people to live healthier, longer lives. As
one of the world's leading companies in research and development
for Alzheimer's disease, multiple sclerosis, Crohn's disease and
severe pain therapeutics, we take seriously our commitment to meet
the needs of patients and their families. With such obligations to
the world community at large, as well as our obligations to our
shareholders and employees, we remain highly focused on reaching
resolution with the SEC in a timely manner."

Absent Elan curing the technical defaults under its debt covenants
by filing with the SEC its 2002 Form 20-F or absent receiving
waivers from the applicable noteholders, these defaults would
become events of default on July 30, 2003 under the EPIL II and
EPIL III notes and on September 14, 2003 under the Senior Notes,
which could result in the requisite holders of those notes
declaring the applicable debt to become immediately due and
payable. In the event that the requisite holders of the EPIL II
notes, the EPIL III notes or the Senior Notes determined to
accelerate their debt in light of the technical nature of the
default, such acceleration would trigger the cross-acceleration
provisions of all of Elan's other outstanding indebtedness,
including its Liquid Yield Option(TM) Notes. Elan would not be
able to satisfy the acceleration of a significant amount of its
outstanding debt.

The proper accounting treatment for EPIL I, EPIL II and EPIL III
is also part of the previously announced investigation by the
Enforcement Division of the SEC. No assurance can be given as to
any issues that may arise as a result of that investigation.

Elan is focused on the discovery, development, manufacturing, sale
and marketing of novel therapeutic products in neurology, pain
management and autoimmune diseases. Elan shares trade on the New
York, London and Dublin Stock Exchanges.


ELAN CORP: Report Filing Delay Prompts S&P to Junk Rating at CCC
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Elan Corp. PLC to 'CCC' from 'B-'. Standard & Poor's
also lowered all of its other ratings on Elan, a specialty
pharmaceutical company, and its affiliates, and the ratings have
been placed on CreditWatch with negative implications.

The actions follow Dublin, Ireland-based Elan's announcement that
it is filing with the Securities and Exchange Commission (SEC) for
an extension to file its Form 20-F 2002 Annual Report by July 15,
2003. The delay is related to the company's ongoing discussions
with the SEC over appropriate accounting treatment, under U.S.
Generally Accepted Accounting Principals, for the company's
various special purpose entities (Elan Pharmaceutical Investments
I, EPIL II, and EPIL III).

"The delay in filing may cause the company to be in technical
default of its debt covenants, raising the possibility that
debtholders can demand immediate repayment," said Standard &
Poor's credit analyst Arthur Wong. "Without a waiver, the $572
million in outstanding EPIL II and EPIL III debt would be
considered in default on July 30, 2003, and Elan's $650 million in
senior unsecured notes would be in default on Sept. 14, 2003."

Elan is already facing a possible put on $494 million in
outstanding LYONs securities at the end of 2003. As of March 31,
2003, the company had $984 million in on-hand cash and has
received net proceeds of $315 million from the recently closed
sale of its primary care business. Elan will not be able to meet
its debt obligations given an acceleration of its debt maturities.

Standard & Poor's will continue to monitor developments in
resolving the CreditWatch.


ELDER-BEERMAN: Takes Goldner Hawn's $6 Per Share Merger Offer
-------------------------------------------------------------
The Elder-Beerman Stores Corp. (Nasdaq:EBSC) has entered into a
definitive merger agreement providing for the sale of the company
to Wright Holdings, Inc., a company formed by Goldner Hawn Johnson
& Morrison Incorporated. The merger agreement provides that the
shareholders of Elder-Beerman will receive $6.00 per share in cash
for their common shares.

The purchase price represents a 104% premium over the average
closing price of the company's common shares for the thirty days
prior to May 16, 2003. The company had announced on May 16, 2003
that it was entering into exclusive negotiations relating to the
sale of the company.

Wright Holdings was formed to carry out the merger and is
currently owned solely by Marathon Fund Limited Partnership IV, a
private investment fund managed by Goldner Hawn. Wright Holdings
has received written commitments from the Marathon Fund and
affiliates of Fleet Financial Group to fund the closing of the
merger transaction and provide working capital to support
operations. Completion of the merger is subject to the receipt by
Wright Holdings of the proceeds contemplated by these financing
commitments.

Elder Beerman's independent directors unanimously approved the
merger agreement and the merger, and have agreed to recommend its
approval by company shareholders. Nine of the company's ten
directors are independent and not employed by the company. RBC
Capital Markets served as Elder-Beerman's financial advisor in
connection with the proposed merger and has rendered an opinion to
the company's board that, subject to the qualifications set forth
therein and as of the date the board approved the merger
agreement, the cash consideration to be paid Elder-Beerman
shareholders was fair, from a financial point of view, to the
shareholders.

After completion of the proposed merger, Elder-Beerman will
continue to be headquartered in Dayton, Ohio, and will operate as
a private company. It is expected that the current Elder-Beerman
senior management team led by Byron (Bud) Bergren, President and
Chief Executive Officer, and Edward Tomechko, Executive Vice
President and Chief Financial Officer, will remain in place and
will have an opportunity to acquire an equity interest in Wright
Holdings. It is anticipated that immediately after the merger,
current management of the company will own 10% of Wright Holdings.

Steven C. Mason, Chairman of the Company, stated, "We are
enthusiastic about the merger. It provides shareholders a
liquidity event at prices substantially in excess of prices at
which Elder-Beerman has traded during the last two and a half
years prior to the announcement that the company was in exclusive
negotiations for the sale of the company. The merger price, I
believe, reflects the success of current management in its
restructuring initiatives, management of assets and execution of a
sound strategy and the Board's success in maximizing shareholder
value."

Bud Bergren commented, "We have been successful in a difficult
retail operating environment in reducing debt and building a
workable strategy for the future. I am delighted that current
shareholders will reap the benefits of our efforts. At the same
time, Elder-Beerman's current management welcomes the challenge,
in association with the company's new owners, to continue to
improve Elder-Beerman for our customers and employees. I am
delighted that our headquarters will remain in Dayton and that we
can continue to execute our new format store strategy which should
provide additional opportunities for our associates."

Michael Sweeney, Managing Director of Goldner Hawn said, "It is a
pleasure to invest with Bud Bergren and his management team. We
look forward to supporting the growth and development of Elder-
Beerman. This investment will represent our fourth public-to-
private transaction, an area in which we have developed a
particular interest." Sweeney is expected to serve as Elder-
Beerman's Chairman of the Board following completion of the
merger.

The transaction is subject to the satisfaction of customary
closing conditions, including receipt of the proceeds from the
financings and the approval by the holders of at least two-thirds
of Elder-Beerman's outstanding common shares.

Shareholder approval will be solicited by the Company by means of
a proxy statement, which will be mailed to shareholders upon the
completion of the required Securities and Exchange Commission
filing and review process. Elder-Beerman expects to hold a special
meeting of shareholders to vote on the merger agreement in
September of 2003. If Elder-Beerman's shareholders approve the
merger agreement and all of the other conditions to the merger are
satisfied, Elder-Beerman expects that the merger will be completed
as soon as possible after the special meeting of shareholders.

Elder-Beerman expects to file shortly with the Securities and
Exchange Commission a Current Report on Form 8-K containing a copy
of the merger agreement.

The nation's ninth largest independent department store chain,
Elder-Beerman is headquartered in Dayton, Ohio and operates 68
stores in Ohio, West Virginia, Indiana, Michigan, Illinois,
Kentucky, Wisconsin and Pennsylvania. In November 2003, Elder-
Beerman expects to expand operations to a ninth state with the
opening of its Muscatine, Iowa store. For more information about
the company, see Elder-Beerman's Web site located at
http://www.elder-beerman.com  

Goldner Hawn Johnson & Morrison Incorporated is a Minneapolis-
based private equity investment firm which was founded in 1989.
Since its establishment, Goldner Hawn Johnson & Morrison has
completed more than 20 acquisitions in a variety of industries
with a total transaction value in excess of U.S. $2 billion and
currently manages a U.S. $200 million investment fund.

Elder-Beerman and certain of its directors and officers may be
deemed to be participants in the solicitation of proxies for the
special meeting of shareholders relating to the merger agreement.
Elder-Beerman will file with the Securities and Exchange
Commission and mail to its shareholders a Proxy Statement for the
special meeting of shareholders. The Proxy Statement will contain
important information regarding the participants in the
solicitation and other important information about the merger
agreement and the proposed merger. Elder-Beerman will also file
with the Securities and Exchange Commission a Transaction
Statement on Schedule 13E-3 relating to the merger agreement and
the proposed merger.

Shareholders of Elder-Beerman are advised to read Elder-Beerman's
Proxy Statement for the special meeting of shareholders when it
becomes available because it contains important information.
Shareholders of Elder-Beerman may obtain, free of charge, when
they become available copies of Elder-Beerman's Proxy Statement
and other documents filed by Elder-Beerman with the Securities and
Exchange Commission at the Internet Web site maintained by the
Securities and Exchange Commission at http://www.sec.gov These  
documents may also be obtained free of charge by calling investor
relations at Elder-Beerman at 937/296-7339.


ENCOMPASS SERVICES: Wants Court to Okay Liberty Settlement Pact
---------------------------------------------------------------
Encompass Services Corporation and its debtor-affiliates ask the
Court to approve their settlement agreement with Liberty Mutual
Insurance Company and the bank lenders to a revolving prepetition
credit agreement.

Alfredo R. Perez, Esq., Weil, Gotshal, & Manges LLP Houston,
Texas, tells the Court that Bank of America, N.A., the issuing
bank for the Revolving Lenders to the Prepetition Credit
Agreement, issued a $22,000,000 letter of credit to Liberty in
accordance with the Lenders' Prepetition Credit Agreement with
the Debtors.

The Prepetition Lenders made loans to the Debtors to fund their
business operations under a February 22, 2000 credit agreement.
Under the Prepetition Credit Agreement, Bank of America acts as
the administrative agent and JP Morgan Chase Bank serves as
syndication agent.

The Letter of Credit was issued as a condition to Liberty's
agreement to continue providing bonding for the Debtors'
construction-related projects.  Under the terms of the Letter of
Credit and related agreements, Liberty is permitted to draw up to
$22,000,000 at any time in the event of a surety loss as defined
in an Indemnity and April 12, 2002 Security Agreement between the
Debtors and Liberty.  If Liberty makes the draw, the Debtors are
obligated to repay the Revolving Lenders all amounts paid to
Liberty pursuant to the Letter of Credit.

Unless the Revolving Lenders provide written notice of their
election not to renew at least 60 days in advance of the date on
which the Letter of Credit expires, the Letter of Credit
automatically renews for a one-year period beginning on the 18th
day of April each year.  However, if the Revolving Lenders elect
not to renew the Letter of Credit, Liberty may claim the full
$22,000,000 even absent the occurrence of a Surety Loss.

Mr. Perez relates that, recently, Liberty alleged that the Surety
Losses would result from certain construction projects being
performed by the Debtors, including those projects which are
being performed by Debtor Farfield Company.  Accordingly, Liberty
intends to draw upon the Letter of Credit and the Debtors will,
in turn, be liable to the Revolving Lenders for the amounts.

Absent Liberty's draw on the Letter of Credit, the Debtors have
reason to believe that the Revolving Lenders will not renew the
Letter of Credit.

In light of the events, and to eliminate the attendant risk of
costly, time-consuming, and distracting litigation, the Debtors,
the Revolving Lenders and Liberty have agreed to settle certain
obligations under the Prepetition Credit Agreement and the Letter
of Credit.

Pursuant to the Settlement, the parties agree that:

    (a) Liberty will return the Letter of Credit to Bank of
        America, thus releasing the Revolving Lenders from their
        obligations under the Letter of Credit.  The return of the
        Letter of Credit will reduce any liability, which the
        Debtors may owe to the Revolving Lenders as a result of a
        potential draw upon the Letter of Credit from $22,000,000
        to $17,000,000;

    (b) In exchange for the return of the Letter of Credit to Bank
        of America, the Revolving Lenders will pay Liberty
        $17,000,000; and

    (c) Bank of America, as agent for the Prepetition Lenders,
        will receive the proceeds from the sale of Farfield free
        and clear of all claims, rights or interests that Liberty
        may assert with regard to the proceeds.

Absent Court approval, Mr. Perez notes that the Debtors will be
required to repay the Revolving Lenders the entire $22,000,000.
Although this liability may potentially be reduced at some future
date, Mr. Perez says, this outcome is unlikely considering the
fact that Liberty alleges potential Surety Losses, which exceed
the $17,000,000 discounted price the Revolving Lenders have
agreed to pay for the Letter of Credit.

Furthermore, if the Parties do not enter into the Settlement, the
Debtors will be liable for any amounts, which Liberty draws on
under the Letter of Credit until Farfield's projects are
complete.  The Debtors estimate that it will take five years to
complete those projects.  Additionally, although the Debtors sold
Farfield and certain of their contract liabilities and
obligations were assumed by Farfield's buyer, the Debtors
continue to remain liable for all liabilities and obligations
which were not specifically assumed by the buyer.  The Debtors
submit that these obligations could potentially exist for an
extended period of time. (Encompass Bankruptcy News, Issue No. 15;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


ENERGY WEST: Credit Agreement Further Extended Until July 31
------------------------------------------------------------
Energy West Incorporated (Nasdaq: EWST), a natural gas, propane
and energy marketing company serving the Rocky Mountain states,
has agreed with Wells Fargo Bank Montana, N.A., on an additional
extension of its credit facility through July 31, 2003.  The Wells
Fargo credit facility was originally scheduled to expire on May 1,
2003 and previously was extended through June 26, 2003.  Under the
terms of the new extension, Energy West will have approximately
$6.9 million of total borrowing capacity through the end of the
extension period, and will not request new letters of credit
during the extension period.  Energy West currently has borrowed
approximately $6.1 million of the available capacity and
anticipates utilizing the additional $800,000 of capacity to pay
certain trade payables in the immediate future.  Such utilization
would reduce the amount of availability under outstanding letters
of credit.  Energy West believes it will have sufficient liquidity
to fund its operations during the extension period.

The current extension allows for the negotiation with Wells Fargo
of a potential secured interim credit facility expiring no later
than September 30, 2003.  It is contemplated that any potential
interim credit facility would be secured by the assets of Energy
West Development, Inc., Energy West Propane, Inc., Energy West
Resources, Inc. and certain Arizona assets of Energy West
Incorporated.  Under the terms of the current extension, Energy
West is obligated to seek financing commitments from other lenders
before July 31, 2003, which financing would be used to repay all
outstanding amounts to Wells Fargo. The Company's Web address is
http://www.energywest.com

As previously reported in Troubled Company Reporter, Energy West
retained D.A. Davidson & Co. and DAMG Capital as financial
advisers to advise the Company in connection with the Company's
financing needs and capital structure. Among other things, D.A.
Davidson and DAMG Capital are assisting the Company in
negotiations with its bank lender, Wells Fargo Bank Montana, N.A.,
concerning a restructuring and extension of the Company's credit
facility for a longer period. The Company's advisers are also
assisting the Company in its efforts to secure a replacement
credit facility and establish a capital structure to meet the
Company's long-term needs.

Energy West also announced the settlement of the lawsuit between
its subsidiary, Energy West Resources, Inc. and PPL Montana, LLC,
for a total of $3.2 million. After allowing for reserves
previously charged to income, and reversal and forfeiture of
accrued but previously deferred management bonuses, for financial
reporting purposes the impact of the settlement will be a
reduction of the Company's consolidated pre-tax income of
approximately $170,000 for Fiscal Year 2003.

Energy West's March 31, 2003 balance sheet shows that its total
current liabilities exceeded its total current assets by about
$2.4 million.


ENRON CORP: Asks Court to Extend Plan Exclusivity Until July 11
---------------------------------------------------------------
Enron Corporation, its Official Unsecured Creditors' Committee and
the Enron North America Examiner have filed a joint motion with
the Bankruptcy Court of the Southern District of New York
requesting an extension until July 11 to file the company's Plan
of Reorganization.

"This very short extension, if granted, will allow us to finalize
an agreement we have reached in principle between the official
representative of all our creditors and the court-appointed plan
facilitator of the Enron North America estate," said Stephen F.
Cooper, Enron acting CEO and chief restructuring officer. "We
believe that the extension will ultimately expedite our court
proceedings, and we are hopeful that the court will approve our
motion. We are very pleased with the prospect that the plan will
have the support of both the Creditors' Committee and the ENA
Examiner."

If the joint motion is granted by the Bankruptcy Court on June 30,
the company will file its plan of reorganization and disclosure
statement by July 11.

Enron's Internet address is http://www.enron.com


ENRON CORP: Wants Court Approval for San Juan Gas Asset Sale  
------------------------------------------------------------
Pursuant to Sections 105, 363(b), 363(f) and 363(m) of the
Bankruptcy Code and Rules 6004 and 6006 of the Federal Rules of
Bankruptcy Procedure, San Juan Gas Company, Inc., a debtor-
affiliate of Enron Corporation asks the Court to:

    (a) approve the terms and conditions of the Purchase and Sale
        Agreement it entered into with SJG Acquisition Corporation
        for the sale, free and clear of liens and claims, and the
        assumption and assignment of the Assets, the Assumed
        Contracts and Assumed Liabilities to SJG Acquisition; and

    (b) authorize the consummation of the transactions
        contemplated.

According to Martin A. Sosland, Esq., at Weil, Gotshal & Manges
LLP, in New York, San Juan Gas, in consultation with its
advisors, has determined that selling various assets will yield
more value to its estate than maintaining the assets.  Throughout
2002, San Juan Gas identified parties potentially interested in
purchasing its assets.

On October 7, 2002, San Juan Gas circulated an Information
Memorandum describing its assets.  San Juan Gas initiated and
conducted a structured auction process that was designed to
ultimately result in a Court-approved transaction involving the
sale and assignment of its assets.

Mr. Sosland reports that San Juan Gas initially contacted 30
potential bidders who had previously expressed an interest in
acquiring San Juan Gas.  Eighteen out of 30 potential bidders
executed and returned confidentiality agreements.  Accordingly,
San Juan Gas provided these bidders with the Information
Memorandum and the procedure for participating in the bidding
process.  San Juan Gas asked the bidders to submit on October 25,
2002 bids based solely on information contained in the
Information Memorandum.  However, upon the bidders' request, the
deadline was moved to November 1, 2002.

Mr. Sosland tells the Court that San Juan Gas received eight
preliminary bids for the Assets.  After which, the bidders were
given the opportunity to conduct further due diligence in San
Juan Gas' data room from November 20, 2002 to December 13, 2002.
On January 10, 2003, three companies submitted final bids.  Two
companies made offers for the entire asset package and one
company bid for the land only.  Thereafter, San Juan Gas selected
SJG Acquisition as the preferred bidder and commenced negotiation
of the Purchase Agreement.

Mr. Sosland notes that three parties approached San Juan Gas
outside the described process, signed confidentiality agreements
and received the Information Memorandum and draft Purchase
Agreement.  However, to date, none of the three has chosen to
proceed further.

Mr. Sosland informs Judge Gonzalez that the Assets to be sold
are:

A. All of the Assets including:

    (a) that real property, parcel number 485 with an area of
        16,028 square meters in the Municipality of San Juan and
        any and all buildings, structures and improvements
        located in the property;

    (b) all of San Juan Gas' right, title and interest in and to
        all of its personal property other than the identified
        Excluded Assets; and

    (c) all of San Juan Gas' right, title and interest in and to
        all of its intangible assets, including all trademarks
        and trademark rights, trade names and trade name rights,
        service marks and service mark rights, service names and
        service name rights, copyrights and copyright rights,
        patents and patent rights, brand names, trade dress,
        product designs, product packaging, business and product
        names, logos, slogans, rights of publicity, trade
        secrets, inventions, processes, formulae, industrial
        models, designs, specifications, data, technology,
        methodologies, computer programs, domain names, and any
        other confidential and proprietary right or information,
        whether or not subject to statutory registration, and all
        related technical information, manufacturing, engineering
        and technical drawings, knowhow and all pending
        applications for and registrations of patents, trademarks,
        service marks and copyrights, and the right to sue for
        past infringement, if any, and all documents, disks and
        other media on which any of the foregoing is stored;

B. All of San Juan Gas' right, title and interest in and to
    all of its inventory as of the Closing Date;

C. Except to the extent that they are non-transferable, all of
    San Juan Gas' rights and obligations under the governmental
    licenses, permits and authorizations including that certain
    Public Service Commission Franchise 0-264 and that certain
    Telecommunications Regulatory Board Certification
    JRT-1999-CER-0042;

D. All of San Juan Gas' right, title and interest in and to the
    accounts receivable; and

E. All of San Juan Gas' right, title and interest in and to:

    (a) 2000 Toyota Camry, silver color, $544 monthly payment
        through August 2004, then a $4,000 residual value.
        Insurance was paid only until August 2003;

    (b) Xerox Copier, $464 monthly payment through June 2003; and

    (c) Lanier fax machine, $109 monthly payment through June
        2003.

Excluded from the Assets to be transferred to SJG Acquisition
are:

    (i) all of San Juan Gas' rights, including rights to
        indemnification, and claims and recoveries against third
        parties;

   (ii) any and all amounts other than accounts receivable due
        and owing to San Juan Gas or its affiliates, or accrued
        in respect of the Assets, before the Closing Date;

  (iii) all cash and cash equivalents, in transit, on hand or in
        bank accounts;

   (iv) all non-transferable Permits issued to San Juan Gas by
        any governmental authority;

    (v) all of San Juan Gas' books and records, provided, that
        SJG Acquisition will be entitled to receive copies of
        San Juan Gas' books and records that relate to the
        Assets and the operation of San Juan Gas' business; and

   (vi) any Actions of San Juan Gas bankruptcy estates, or its
        affiliates, under Chapter 5 of the Bankruptcy Code.

San Juan Gas also proposes to sell, assume and assign the Assumed
Contracts and all of its liabilities and obligations under the
Assumed Contracts, other than those liabilities and obligations
that relate to its breach on or prior to the Closing Date;
provided that, with respect to the Construction Agreement between
San Juan Gas and Big River Construction, dated as of June 5,
2003, to be assumed and assigned to SJG Acquisition, SJG
Acquisition will only assume those liabilities and obligations
that arise from and after the Closing Date.

Furthermore, San Juan Gas proposes to assume and assign all of
its Environmental Liabilities.

On June 16, 2003, San Juan Gas and SJG Acquisition entered into
the Purchase Agreement, which contains these terms and
conditions:

A. Purchase Price

    In addition to SJG Acquisition assuming the Assumed
    Liabilities, the purchase price for the Assets is
    $4,350,000, subject to adjustment.

B. Deposit Escrow Arrangement; Payment of Purchase Price

    SJG Acquisition will execute and deliver to Banco Popular de
    Puerto Rico, as escrow agent, an escrow agreement and deposit
    by wire transfer in immediately available funds $465,000.

C. Closing Date Payment

    At the Closing, SJG Acquisition will pay to San Juan Gas by
    wire transfer an amount equal to the Purchase Price less the
    Deposit and $2,000,000 -- the Environmental Escrow Funds,
    which will be deposited by SJG Acquisition with the
    Environmental Escrow Agent.

D. Interest

    If SJG Acquisition does not fully and promptly pay either the
    Deposit, the Closing Date Payment or the Environmental Escrow
    Funds, the unpaid amounts will accrue interest on a daily
    basis at the Interest Rate, compounded quarterly until the
    unpaid amount has been paid in full.

E. Assumed Liabilities; Retained Liabilities

    As of the Closing, SJG Acquisition will assume and thereafter
    in due course pay and fully satisfy:

     (i) all  of San Juan Gas' Environmental Liabilities;

    (ii) all of San Juan Gas' liabilities and obligations under
         the Assumed Contracts -- other than the Big River
         Construction Agreement, other than those liabilities
         and obligations that relate to San Juan Gas' breach
         on or prior to the Closing Date; and

   (iii) all of San Juan Gas' liabilities and obligations under
         the Big River Construction Agreement that arise from
         and after the Closing Date.

    SJG Acquisitions will not assume or be liable for any other of
    San Juan Gas' obligations or liabilities.  Except for the
    Assumed Liabilities, San Juan Gas will retain all of its
    liabilities, obligations and claims.

F. Deposit and Disbursement of Environmental Escrow Funds

    On the Closing Date, SJG Acquisition will pay and deposit
    into escrow the amount of the Environmental Escrow Funds.
    The Environmental Escrow Funds will be held, maintained and
    disbursed by Banco Popular de Puerto Rico.  From and after
    the Closing Date until the date that is 18 months after the
    Closing Date -- the Reimbursement Period -- San Juan Gas
    agrees to reimburse SJG Acquisition out of the Environmental
    Escrow Funds the amount of any Environmental Losses, but only
    to the extent the Environmental Losses are directly
    attributable to San Juan Gas' Environmental Liability that
    existed or occurred on or prior to the Closing Date;
    provided, however, that:

     (i) San Juan Gas' reimbursement obligation to SJG
         Acquisition for Environmental Losses will be limited to,
         and will in no event exceed, the amount of the
         Environmental Escrow Funds; and

    (ii) no claim by SJG Acquisition for reimbursement out of the
         Environmental Escrow Funds may be asserted, nor may a
         Claim Notice be delivered by SJG Acquisition with
         respect thereto, for Environmental Losses paid or
         required to be paid, after the expiration of the
         Reimbursement Period.

    Provided that a Claim Notice is delivered to San Juan Gas
    prior to the end of the Reimbursement Period, reimbursement
    from the Environmental Escrow Funds will continue until the
    final resolution of the claim.  Notwithstanding, San Juan Gas
    will have no responsibility for and SJG Acquisition will have
    no access to the Environmental Escrow Funds for any
    Environmental Losses that arise out of or relate to any
    investigation, remediation, clean-up or similar activity that
    is voluntarily undertaken by SJG Acquisition at or on any of
    the Assets that is neither required by EPA, EQB or a
    Governmental Authority nor pursuant to a settlement of a
    Third Party Claim, including Remediation:

    (a) conducted by SJG Acquisition solely to discover or avoid
        potential liability under statutory provisions that
        generally prohibit Releases of materials that could
        affect the environment,

    (b) neither required by Environmental Laws nor pursuant to a
        settlement of a Third Party Claim, or

    (c) associated with improving any of the Assets'
        marketability or preparing any assets for sale to a third
        Person.

G. San Juan Gas' Closing Conditions

    San Juan Gas' obligation to proceed with the Closing
    contemplated by the Purchase Agreement is subject, at its
    option, to the satisfaction on or prior to the Closing Date
    of all of these conditions:

    (a) Representations, Warranties, and Covenants.  The
        representations and warranties of SJG Acquisition will
        be, subject to cure, true and correct in all material
        respects on and as of the Closing Date, except for those
        representations and warranties of SJG Acquisition that
        speak as of a certain date, which representations and
        warranties will have been true and correct as of that
        date, and SJG Acquisition's covenants and agreements to
        be performed on or before the Closing Date will have been
        duly performed in all material respects in accordance
        with the Purchase and Sale Agreement; provided, however,
        that this condition will be deemed to have been satisfied
        so long as any failure of any representations and
        warranties to be true and correct, individually or in the
        aggregate, would not reasonably be expected to result in
        a Buyer Material Adverse Effect;

    (b) No Action.  On the Closing Date, no Action will be
        pending or threatened before any Governmental Authority
        of competent jurisdiction seeking to enjoin or restrain
        the consummation of the Closing or recover damages from
        San Juan Gas or any of its Affiliate;

    (c) U.S. Bankruptcy Court Order.  The U.S. Bankruptcy Court
        will have entered an order approving the sale; and

    (d) Transfer Requirements.  All Transfer Requirements will
        have been satisfied.

H. SJG Acquisition's Closing Conditions

    SJG Acquisition's obligation to proceed with the Closing
    contemplated in the Purchase Agreement is subject, at its
    option, to the satisfaction on or prior to the Closing Date
    of all of these conditions:

    (a) Representations, Warranties, and Covenants.  San Juan
        Gas' representations and warranties will be, subject to
        cure, true and correct in all material respects on and as
        of the Closing Date, except for San Juan Gas'
        representations and warranties that speak as of a certain
        date, which will have been true and correct as of that
        date, and San Juan Gas' covenants and agreements to be
        performed on or before the Closing Date will have been
        duly performed in all material respects in accordance
        with the Purchase Agreement; provided, however, that
        this condition will be deemed to have been satisfied so
        long as any failure of any representations and warranties
        to be true and correct, individually or in the aggregate,
        would not reasonably be expected to result in a Seller
        Material Adverse Effect;

    (b) No Action.  On the Closing Date, no Action will be pending
        or threatened before any Governmental Authority seeking to
        enjoin or restrain the consummation of the Closing or
        recover damages from SJG Acquisition or any of its
        Affiliate;

    (c) U.S. Bankruptcy Court Order.  The U.S. Bankruptcy Court
        will have entered the Bankruptcy Court Order;

    (d) Transfer Requirements.  All Transfer Requirements,
        including the issuance by the PSC of a franchise, and the
        Telecommunications Board of a certification, to SJG
        Acquisition, in form and substance reasonably satisfactory
        to SJG Acquisition, will have been satisfied.  To the
        extent that the consent or approval of any Governmental
        Authority is required to transfer or amend any Permit the
        consent or approval will have been obtained or SJG
        Acquisition will in its discretion be satisfied that the
        consent or approval will be obtained within a reasonable
        time after the Closing Date;

    (e) Absence of Material Adverse Effect.  No event or
        circumstance will have occurred between the date of the
        Purchase Agreement and the Closing Date and is continuing
        on the Closing Date that would reasonably be expected to
        result in a Seller Material Adverse Effect;

    (f) Title Policy.  SJG Acquisition will have obtained at its
        expense, a title insurance policy with respect to the
        Owned Real Estate in customary ALTA form, in an amount
        Equal to the value it allocated in its reasonable opinion
        to the Owned Real Estate, issued by a title insurance
        company SJG Acquisition selected, and insuring its fee
        simple title to the Real Property, free and clear of any
        and all defects whatsoever, other than usual and ordinary
        title exceptions reasonably acceptable to SJG Acquisition,
        and that the Owned Real Estate is not subject to Liens
        other than customary easements that do not affect the full
        use and enjoyment thereof.

I. Closing

    Provided that the Purchase Agreement conditions are fulfilled
    or waived prior to the Closing, each Party agrees to close
    and consummate the transactions contemplated in the Purchase
    Agreement on the Closing Date at 10:00 a.m., Puerto Rico
    Time, at the offices of Cancio Covas & Santiago, LLP or at
    other time and place as the Parties agree.

J. San Juan Gas' Closing Obligations

    At Closing, San Juan Gas will execute and deliver, or cause
    to be executed and delivered, to SJG Acquisition:

    (a) a certificate, dated the Closing Date and executed by an
        authorized officer of San Juan Gas on its behalf, as to
        the matters set forth in the Purchase Agreement;

    (b) the Assignment and Assumption Agreement and the Bill of
        Sale to SJG Acquisition San Juan Gas duly executed;

    (c) the instruments, agreements and other documents identified
        in the Transfer Requirements, including the Deed of
        Purchase and all other deeds required to be executed by
        San Juan Gas that are necessary to consummate the transfer
        of all Real Estate Assets;

    (d) other certificates of resolutions or other action,
        incumbency certificates and other certificates of San
        Juan Gas officers of as SJG Acquisition may reasonably
        require to establish the identities of and verify the
        authority and capacity of the officers who are taking any
        action in connection with the Purchase Agreement,
        including the execution and delivery thereof;

    (e) the Environmental Escrow Agreement;

    (f) the Closing Date Accounts Receivable Schedule; and

    (g) Notice to the Deposit Escrow Agent San Juan Gas duly
        executed.

K. SJG Acquisition's Closing Obligations

    At Closing, SJG Acquisition will deliver, or cause to be
    delivered, to San Juan Gas:

    (a) the Closing Date Payment;

    (b) the Environmental Escrow Funds;

    (c) the Environmental Escrow Agreement;

    (d) a certificate, dated the Closing Date and executed by an
        authorized SJG Acquisition officer on its behalf, as to
        the matters set forth in the Purchase Agreement;

    (e) the Assignment and Assumption Agreement and the Bill of
        Sale, SJG Acquisition duly executed;

    (f) certificates of resolutions or other action, incumbency
        certificates and other certificates of SJG Acquisition
        officers of as San Juan Gas may require to establish the
        identities of and verify the authority and capacity of
        the SJG Acquisition officers who are taking any action
        in connection with the Purchase Agreement;

    (g) the instruments, agreements and other documents identified
        in the Transfer Requirements, including the Deed of
        Purchase, and all other deeds required to be executed by
        SJG Acquisition that are necessary to consummate the
        transfer of all real property included in the Assets; and

    (h) Notice to the Deposit Escrow Agent SJG Acquisition duly
        executed.

Mr. Sosland contends that the request is warranted because:

    (a) the terms and conditions of the proposed Purchase
        Agreement were negotiated by the Parties at arm's length
        and in good faith;

    (b) SJG Acquisition does not hold any material interest in
        any Enron companies and is not otherwise affiliated with
        any of the Enron Companies or their officers or directors;

    (c) San Juan Gas believes that the design and conduct of the
        sale process, the selection of SJG Acquisition as the
        successful bidder and the final terms reflected in the
        Purchase Agreement are fair;

    (d) other than those granted under the DIP Facility, San Juan
        Gas is not aware of liens on the Assets; and

    (e) the assignment of the Assumed Contracts to SJG
        Acquisition, in and of itself, will provide the
        non-debtor contracting party with adequate assurance of
        the future performance under the Assumed Contracts.

Furthermore, Mr. Sosland asserts that the transactions under the
Purchase Agreement should be approved as a private sale given
current circumstance and the extensive sales process San Juan Gas
underwent. (Enron Bankruptcy News, Issue No. 71; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


E.SPIRE COMMS: Storch Amini Investigating D&O & Auditor Claims
--------------------------------------------------------------
The Chapter 11 Trustee of the estates of e.spire Communications,
Inc., and its debtor-affiliates asks for permission from the U.S.
Bankruptcy Court for the District of Delaware to employ Special
Counsel to investigate potential causes of action involving the
Debtors' Board of Directors, Senior Management, and Auditors.

The Chapter 11 Trustee chose the law firm of Storch Amini &
Munves, PC, after consultation with the Secured Lenders.  
Accordingly, the Chapter 11 Trustee seeks for approval from the
Court for Storch Amini's retention.  The Trustee says that Storch
Amini is well qualified to advise and assist him in an effective
and efficient manner.

In this engagement, the Chapter 11 Trustee expects Storch Amini
to:

     a. investigate any actions of the Debtors' board of
        directors, senior management, and auditors which in
        Storch Amini's professional judgment could lead to a
        recovery for the Debtors' estates;

     b. investigate any potential causes of action that may
        arise under the Debtors' Executive and Organization
        Liability Policy; and

     c. file and prosecute any viable claims that may arise.

Bijan Amini, Esq., a shareholder of the firm, will be the attorney
primarily responsible in representing the Chapter 11 Trustee in
these matters.

Storch Amini will be compensated on a combination of fixed
retainer/contingency fee basis.  In this regard, Storch Amini will
be entitled to a fixed retainer of $300,000.  Any fees earned
thereafter will be on a 30% contingency fee basis based on any
recovery from any settlement or judgment in any case investigated.

e.spire Communications, Inc., is a facilities-based integrated
communications provider, offering traditional local and long
distance internet access throughout the United States. The Company
filed for chapter 11 protection on March 22, 2001 (Bankr. Del.
Case No. 01-974).  Domenic E. Pacitti, Esq., and Maria Aprile
Sawczuk, Esq., at Saul Ewing LLP represent the Chapter 11 Trustee
in this proceeding.


FLEMING COS: AFCO Seeks Stay Lift to Cancel Insurance Financing
---------------------------------------------------------------
Afco Credit Corporation asks the Court to lift the automatic stay
so it can cease financing insurance premiums for Fleming
Companies, Inc. and its debtor-affiliates.

Afco and the Debtors are parties to premium finance agreements
dated February 21, 2003 and August 23, 2003.  The Finance
Agreements are promissory notes obligating the Debtors to make
monthly payments to repay their debts.  The Debtors financed
$751,200 and $5,490,541.

Afco's payment records indicate that the Debtors are now in
default and that $680,316 and $1,534,161 inclusive of finance
charges are open.  The sum represents charges, which have been
earned and are to be earned over the life of the Debtors' loan.

Upon a default by a borrower, Afco normally cancels the
underlying insurance.  Both the Finance Agreements and Insurance
Code, Article 24.17 of the Texas Insurance Code, give Afco this
right.  Afco is licensed by the State Board of Insurance of Texas
as a premium financing company.  However, the automatic stay
imposed by virtue of the Debtors' Chapter 11 petition bars Afco
from taking such measure.

Sherry Ruggiero Fallon, Esq., at Tybout, Redfearn & Pell,
Wilmington, Delaware, argues that Afco's security interest
diminishes daily.  The amount of return premiums to be paid upon
the cancellation diminishes by $16,849 per day as the Debtors'
continue to default on their obligations.  Without immediate
relief, Afco's security interest will be dissipated.

Alternatively, Afco asks the Court to compel the Debtors to post
funds as adequate protection to secure their debt. (Fleming
Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


GENTEK INC: Turns to O'Melveny for Special Litigation Advice
------------------------------------------------------------
At the GenTek Inc. Debtors' request, the Court approves the
employment of O'Melveny & Myers LLP as special litigation counsel,
nunc pro tunc to April 1, 2003.

O'Melveny has previously been retained in these cases as an
ordinary course professional.  A Declaration of Proposed
Professional and Disclosure Statement by O'Melveny was filed with
the Court on February 13, 2003.

Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
in Wilmington, Delaware, recounts that subsequent to the filing
of the Declaration, the Debtors determined to expand the role of
O'Melveny and to seek its assistance with respect to the handling
of tort claims.  
  
O'Melveny has a nationally recognized litigation practice, with
expertise in complex litigation and mass tort claim proceedings,
and has represented the Debtors in related matters for a number
of years.

As special litigation counsel, O'Melveny will:

   (a) review proofs of claim filed by tort claimants and consult
       with Debtors' bankruptcy counsel regarding their
       responses;

   (b) review insurance issues for any tort claims;

   (c) consult with the Debtors' general bankruptcy counsel
       concerning tort claim treatment issues under the Debtors'
       reorganization plan;

   (d) assist the Debtors with any motions to lift stay filed by
       any tort claimants;

   (e) participate in communications with the tort claimants, the
       banks and the unsecured creditors' committee as to all
       issues involving tort claims;

   (f) participate in hearings before the Court concerning tort
       claim issues; and

   (g) assist in other issues assigned by the Debtors.

Mr. Chehi clarifies that O'Melveny's services are unrelated to
the day-to-day administration of the Debtors' Chapter 11 cases.  
O'Melveny will not be rendering services typically performed by a
debtor's general bankruptcy counsel.  The firm will not be
responsible for the Debtors' general restructuring efforts or
other matters involving the conduct of their Chapter 11 cases.  
However, given the importance of the tort claim issues facing the
Debtors and the impact of those matters on their reorganization
efforts, O'Melveny will be working closely with other
professionals engaged by the Debtors or other parties-in-interest
to the case.

O'Melveny intends to seek allowance of compensation for
professional services rendered and reimbursement of expenses
incurred in connection with its engagement from and after
April 1, 2003, in accordance with applicable provisions of the
Bankruptcy Code.  O'Melveny's current customary hourly rates
range from $190 to $600.

O'Melveny agrees not to assert a prepetition claim for $46,000,
representing compensation for services owed by the Debtors.  The
firm will withdraw its proof of claim.

Debra S. Belaga, a partner at O'Melveny, ascertains that the
firm's attorneys do not hold or represent any interest adverse to
the Debtors or their estates. (GenTek Bankruptcy News, Issue No.
15; Bankruptcy Creditors' Service, Inc., 609/392-0900)


GLOBAL CROSSING: XO Offers 'Insurance' Policy for Restructuring
---------------------------------------------------------------
XO Communications, Inc., has offered a revised proposal for a
bankruptcy restructuring of Global Crossing, Ltd. and Global
Crossing Holdings, Ltd., that would run in parallel with Global
Crossing's current efforts to emerge from bankruptcy under the
terms of its current Purchase Agreement with Singapore
Technologies Telemedia PTE.

XO's revised offer was prompted by Global Crossing's deteriorating
financial condition coupled with its pending request to extend,
until mid-October, STT's exclusive rights to close a deal with
Global Crossing.  If approved, Global Crossing's request would
prevent the bankrupt company from soliciting other potential
offers -- a circumstance that would likely prevent an alternative
plan from being presented, approved, and consummated until the
first quarter of 2004, at the earliest. During a court hearing
yesterday, Global Crossing's financial advisor, the Blackstone
Group, L.P., acknowledged the uncertainty regarding the company's
cash reserves and confirmed that Blackstone had recommended that
Global Crossing secure debtor-in-possession financing as early as
the end of the third quarter of 2003.

"The prospect of continued exclusivity and a failed STT deal could
result in Global Crossing running out of cash without having an
alternative restructuring plan in place -- a possibility that
requires Global Crossing to adopt a 'dual track' approach," said
Brian Oliver, Executive Vice President of Strategy and Corporate
Development.

"Global Crossing's prolonged bankruptcy and dwindling cash
reserves are expected to result in continued erosion of its
customer base unless an alternative offer is put in place," added
Oliver. "XO has been through the bankruptcy process and
understands the necessity of having at least two purchase plans in
place in order to retain existing customers and attract new
customers. An added benefit of accepting the XO plan is that
customers will be more confident that Global Crossing will survive
regardless of whether the STT plan is consummated."

The revised offer, which supersedes all prior XO offers with the
exception of its tender offer for the $2.25 billion of senior
secured bank debt made on June 24, 2003, was detailed in a term
sheet that accompanied a letter sent late yesterday by Carl Icahn,
XO's Chairman of the Board, to John Legere, CEO of Global
Crossing, Ltd. The revised offer contemplates that XO would be
authorized to propose and file by July 15, 2003 a Plan and
Disclosure Statement that includes the following terms:

-- XO will pay holders of the $2.25 billion senior secured Global
   Crossing bank debt $220 per $1,000 of principal, or
   approximately $495 million in the aggregate.

-- XO will pay holders of Global Crossing's pre-petition unsecured
   indebtedness $200,000,000 in cash in full satisfaction of all
   unsecured claims.

-- A disclosure statement hearing for the XO Plan must occur on or
   prior to August 16, 2003 and a confirmation hearing for the XO
   Plan must occur on or prior to September 30, 2003.

-- All allowed administrative and priority claims will be paid in
   full as and when allowed or on such other terms as holders of
   such allowed administrative and priority claims may agree but
   such allowed claims shall not exceed $195 million.

-- If the STT transaction receives all requisite regulatory
   approvals (including those required by the Committee on Foreign
   Investment in the U.S. and the Federal Communications
   Commission) prior to the confirmation hearing date, then the
   confirmation hearing for the XO Plan shall be canceled and
   Global Crossing shall proceed with the STT transaction.

-- If the STT transaction has not received all requisite
   regulatory approvals prior to the XO Plan confirmation hearing,
   then Global Crossing will terminate its Purchase Agreement with
   STT, pursuant to the terms of the Purchase Agreement and
   neither Global Crossing nor XO shall be liable for liquidated
   damages. Global Crossing shall then immediately proceed to
   confirmation of the XO Plan.

-- The XO offer is subject to the revision by Global Crossing of
   its pending request in U.S. Bankruptcy Court to extend
   exclusivity and approval by the Court of a revised motion that
   would permit Global Crossing to terminate its Purchase
   Agreement with STT, without incurring liquidated damages, on or
   after September 30, 2003.

-- This XO offer is not subject to due diligence or financing
   contingencies.

XO Communications is a leading broadband communications service
provider offering a complete set of communications services,
including: local and long distance voice, Internet access, Virtual
Private Networking, Ethernet, Wavelength, Web Hosting and
Integrated voice and data services.

XO has assembled an unrivaled set of facilities-based broadband
networks and Tier One Internet peering relationships in the United
States. XO currently offers facilities-based broadband
communications services in more than 60 markets throughout the
United States.


GLOBAL LEARNING: US Trustee Sets Sec. 341(a) Meeting on July 10
---------------------------------------------------------------
The United States Trustee will convene a meeting of Global
Learning Systems Inc., and its debtor-affiliates' creditors on
July 10, 2003, 10:00 a.m., at Room 619, Office of the United
States Trustee, 6305 Ivy Lane, Suite 600, Greenbelt, Maryland
20770. This is the first meeting of creditors required under 11
U.S.C. Sec. 341(a) in all bankruptcy cases.

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

Global Learning Systems, Inc., an improvement solutions company
headquartered in Frederick, Maryland, filed for chapter 11
protection June 6, 2003 (Bankr. Md. Case No. 03-30218).  Brent C.
Strickland, Esq., at Whiteford, Taylor & Preston LLP represents
the Debtors in their restructuring efforts. When the Company filed
for protection from its creditors, it listed assets of over a
million and debts of more than $10 million.


HEALTH CARE REIT: S&P Rates Planned Preferreds Issue at BB+
-----------------------------------------------------------   
Standard & Poor's Ratings Services assigned its 'BB+' rating to
Health Care REIT Inc.'s $100 million of proposed preferred stock
issuance. In addition, ratings are affirmed on the company's $615
million of existing unsecured notes. At the same time, the
corporate credit rating on Health Care REIT is affirmed at 'BBB-'.
The outlook remains stable.

The ratings reflect this Toledo, Ohio-based Health Care REIT's
good financial profile, including sufficient external liquidity
and stable debt coverage measures, as well as modestly
strengthened portfolio characteristics. "The company will continue
to be challenged by the difficult regulatory and competitive ope
rating environment facing health care facility operators, but
appears well-equipped to manage these challenges," said Standard &
Poor's credit analyst Scott Robinson.

Management's successful navigation of the challenges associated
with assisted living facilities overbuilding and the nursing home
prospective payment system changes in 2000, and corresponding
portfolio disposition efforts, have positioned the company to
pursue its modest growth objectives. Lingering reimbursement
uncertainties (particularly for nursing home operators) continue
to pressure the sector; however, if growth objectives can be
pursued while maintaining the current sound financial profile, an
outlook revision may be warranted.


HEAVENEXPRESS.COM: Brings-In Perrella & Assoc. as New Auditors
--------------------------------------------------------------
On June 7, 2003, HeavenExpress.com Inc. engaged Perrella &
Associates, P.A. as its independent auditors and dismissed
Bongiovanni & Associates, P.A. from such position. The decision to
change accountants was recommended and approved by the Company's
Board of Directors.  The reports of Bongiovanni & Associates, P.A.
on the financial statements of the Company for the past fiscal
year  contained an adverse opinion regarding a going concern
uncertainty.


HLM DESIGN: Initiates Action to Withdraw Listing on AMEX
--------------------------------------------------------
HLM Design, Inc. (Amex: HMD) initiated filings today with the
American Stock Exchange and the Securities and Exchange Commission
that will lead to its withdrawal as an AMEX listed company.

Regarding this action, Joseph M. Harris, AIA, RIBA, Chairman and
Chief Executive Officer of HLM Design, Inc. stated, "In 1998, when
we took the firm public, we were convinced that we had made the
right decision in order to obtain capital to facilitate the
company's growth. We have grown the company and we continue to
believe that was a good decision at the time. Times have changed,
however, and now we are faced with a lack of liquidity in the
public company shares, an undervaluing of the company with
reference to its quoted stock price, and an increased burden and
expense of being a public company in today's environment. Our
Board and management believe that with the delisting and
subsequent SEC deregistration we can achieve a higher shareholder
value in the future as a private company."

Firms managed by HLM Design, Inc. provide architecture,
engineering, and planning services that enhance the lives of those
who use the facilities they design while contributing to the
success of their client's businesses. Firms managed by HLM Design,
Inc. are located in fourteen cities and serve commercial and
institutional clients internationally. For additional information,
visit the HLM Design Web site at http://www.hlmdesign.com

                         *     *     *

                Liquidity and Capital Resources

In its latest SEC Form 10-Q filing, HLM Design Inc. reported:

"[C]ertain covenants in the Company's Whitehall Business Credit
Corporation loan agreement were modified. Also, the Company was in
default on certain covenants contained in its Bank of Scotland
loan agreement and was past due on certain payments on its notes
payable to former JPJ and BL&P shareholders. The Company obtained
the necessary waivers or modifications to cure these defaults. The
loan agreements contain financial requirements, which, if not
achieved, will cause the Company to be in default on the debt
agreement(s) and the lender(s) could demand payment of the
outstanding indebtedness. The Company's ability to comply with
these covenants and make required loan payments depends on it
achieving certain financial projections. An important component of
the Company's ability to meet these financial projections relate
to the Company's ability to begin engineering and design work and
generating billings for certain of the larger, more profitable
projects that are currently delayed. Although management believes
that the Company will be able to meet the loan covenants and make
the required loan payments, there can be no assurance that the
Company will be able to meet the loan covenants and make the
required loan payments. In the event that the Company does not
meet the covenants and make the required loan payments and the
lender(s) exercise their right to accelerate the loan maturity,
the Company would not have the ability to pay the lender(s) and
the Company would have to either renegotiate the loans or enter
into new loan agreements to sustain its current operations.

"In order for the Company to meet its liquidity needs over the
next twelve months, the Company will need to (i) obtain additional
equity investments through the sale of preferred stock, (ii)
extend the payment terms from consultants and other vendors, (iii)
renegotiate the JPJ and BL&P notes payable to extend payment
terms, (iv) increase the amount available under the revolving
credit facility by increasing the calculated aging of certain
domestic assets through the commencement of currently delayed
projects or new business and (v) delay of certain capital
expenditures. The Company believes that it will be able to achieve
all or some of the above sufficient to meet its liquidity needs
over the next twelve months. However, there is no assurance that
these objectives can be accomplished. In the event that the
Company is unable to achieve all or some of the above, management
plans to (i) reduce operating costs (i.e., salary and related
costs) in an effort to offset reduced domestic revenues, (ii)
increase the utilization of domestic professionals by having them
work on HLML projects, (iii) relocate or renegotiate certain
office leases which expire during fiscal 2004 to reduce rent and
occupancy costs, and (iv) continue additional reductions in non-
essential operating costs. If the Company is unable to achieve all
or some of the above sufficient to meet its liquidity needs, the
Company could be in default under its loan agreements and unable
to cure such default."


HOST MARRIOTT: Will Publish Second Quarter Results on July 23
-------------------------------------------------------------
Host Marriott Corporation (NYSE: HMT) will report financial
results for the second quarter 2003 on Wednesday, July 23, 2003
before the market opens.  Following the earnings release, the
Company will conduct its quarterly conference call for investors
and other interested parties on Wednesday, July 23, 2003 at 10:00
a.m. Eastern Time (ET).  Christopher Nassetta, president and chief
executive officer, and Edward Walter, executive vice president and
chief financial officer, will discuss the Company's second quarter
and its business outlook for 2003.

Interested individuals are invited to listen to the call on the
Internet at http://www.hostmarriott.comor by telephone at 913-
981-5509.  It is recommended that participants call 10 minutes
ahead of the scheduled start time to ensure proper connection.

A replay of the call will be available by telephone from
Wednesday, July 23, at l:00 p.m. Eastern Time, until Wednesday,
July 30, 8:00 p.m. Eastern Time.  To access the recording, call
719-457-0820 and request reservation number 480772.  A replay of
the call will also be available on the Internet at
http://www.hostmarriott.comduring the same time period.

Host Marriott Corporation (S&P/B+/Stable) is a lodging real estate
company, which owns 122 upscale and luxury full-service hotel
properties primarily operated under Marriott, Ritz-Carlton, Four
Seasons, Hyatt, Hilton and Swissotel brand names. For further
information on Host Marriott Corporation, visit the Company's Web
site at http://www.hostmarriott.com


IMMTECH: Files Series C Preferred Certificate of Designation
------------------------------------------------------------
On June 6, 2003, Immtech International, Inc. filed a Certificate
of Designation with the Secretary of State of the State of
Delaware designating 160,000 of its preferred stock as Series C
Convertible Preferred Stock and on June 6, 2003 through
June 10, 2003, the Company issued an aggregate of 117,152 shares
of its Series C Stock in private placements to certain accredited
and non-United States investors in reliance on Regulation D and
Regulation S, respectively, under the Securities Act of 1933, as
amended. To date, the gross proceeds of the offering are
$2,928,800. The securities were sold pursuant to exemptions from
registration under the Securities Act and have not been registered
under the Securities Act. They may not be offered, sold, pledged
or otherwise transferred by the purchasers in the absence of
registration or an applicable exemption. Pursuant to the terms of
the Series C Convertible Preferred Stock Regulation D Subscription
Agreement and the Series C Convertible Preferred Stock Regulation
S Subscription Agreement, the Company has agreed to prepare and
file with the Securities and Exchange Commission a registration
statement on Form S-3 covering the resale of the shares of the
Company's common stock issuable upon conversion of the Series C
Stock.

                        *   *   *

As previously reported, since inception, the Company has
incurred accumulated losses of approximately $41,466,000.
Management expects the Company to continue to incur significant
losses during the next several years as the Company continues
its research and development activities and clinical trial
efforts.  There can be no assurance that the Company's continued
research will lead to the development of commercially viable
products.  Immtech's operations to date have consumed
substantial amounts of cash.  The negative cash flow from
operations is expected to continue in the foreseeable future.
The Company will require substantial funds to conduct research
and development, laboratory and clinical testing and to
manufacture (or have manufactured) and market (or have marketed)
its product candidates.

Immtech's working capital is not sufficient to fund the
Company's operations through the commercialization of one or
more products yielding sufficient revenues to support the
Company's operations; therefore, the Company will need to raise
additional funds. The Company believes its existing unrestricted
cash and cash equivalents and the grants the Company has
received or has been awarded and is awaiting disbursement of,
will be sufficient to meet the Company's planned expenditures
through July 2003, although there can be no assurance the
Company will not require additional funds. These factors, among
others, indicate that the Company may be unable to continue as a
going concern.

The Company's ability to continue as a going concern is
dependent upon its ability to generate sufficient funds to meet
its obligations as they become due and, ultimately, to obtain
profitable operations. Management's plans for the forthcoming
year, in addition to normal operations, include continuing their
efforts to obtain additional equity and/or debt financing,
obtain additional grants and enter into various research,
development and commercialization agreements with other
entities.


IMCLONE SYSTEMS: Receives $3 Million Payment from Merck KGaA
------------------------------------------------------------
ImClone Systems Incorporated (NASDAQ: IMCLE) has received a $3
million payment from Merck KGaA for achieving a clinical
development milestone under the Companies' license agreement for
ERBITUX(TM). Upon payment, ImClone Systems issued 150,007 shares
of ImClone Systems' common stock to Merck KGaA, representing the
sale of these shares at a ten percent premium to market value as
provided in the license agreement. In December 1998, Merck KGaA
licensed from ImClone Systems the right to develop ERBITUX outside
of the U.S. and Canada and the co-exclusive right to develop
ERBITUX in Japan.

The milestone relates to Merck KGaA's ability to move forward with
the clinical development of ERBITUX in the area of non-small cell
lung cancer (NSCLC) based on data from four clinical studies of
ERBITUX in combination with chemotherapy in patients with NSCLC.
The data from these studies, which included the Merck KGaA-
sponsored Lung Cancer Cetuximab Study (LUCAS) randomized Phase II
study, were presented during this year's American Society of
Clinical Oncology Annual Meeting, held in Chicago. In the LUCAS
study, the addition of ERBITUX to cisplatin and vinorelbine
increased tumor response rates (53.3 percent vs. 32.3 percent) in
61 evaluable patients with chemotherapy-naive NSCLC.

"We are pleased that data from both ImClone Systems and Merck KGaA
Phase II studies of ERBITUX in combination with chemotherapy in
patients with non-small cell lung cancer have provided the
clinical evidence needed to further the drug development program
in this disease type," stated Daniel S. Lynch, Acting Chief
Executive Officer of ImClone Systems Incorporated.

ERBITUX(TM) is an investigational IgG1 monoclonal antibody
designed to target and block the Epidermal Growth Factor Receptor
(EGFR), which is expressed on the surface of certain cancer cells
in multiple tumor types. ERBITUX is designed to bind to EGFR and
prevent natural ligands called growth factors from binding to the
receptor and inducing phosphorylation, i.e., activation of
signaling to the tumor. The most common drug-related adverse
events reported in clinical trials of ERBITUX have been an acne-
like rash and asthenia. Severe allergic reactions may occur in a
small percentage of patients. Additional information about ERBITUX
can be found at http://www.cetuximab.com  

ImClone Systems Incorporated, whose December 31, 2002 balance
sheet shows a total shareholders' equity deficit of about $185
million, is committed to advancing oncology care by developing a
portfolio of targeted biologic treatments, designed to address the
medical needs of patients with a variety of cancers. The Company's
three programs include growth factor blockers, angiogenesis
inhibitors and cancer vaccines. ImClone Systems' strategy is to
become a fully integrated biopharmaceutical company, taking its
development programs from the research stage to the market.
ImClone Systems' headquarters and research operations are located
in New York City, with additional administration and manufacturing
facilities in Somerville, New Jersey.


INACOM: Delaware Court Confirms Amended Liquidating Ch. 11 Plan
---------------------------------------------------------------
On May 27, 2003, the United States Bankruptcy Court for the
District of Delaware entered an order confirming the Joint Plan of
Liquidation as amended of Inacom Corporation, pursuant to Chapter
11 of the United States Bankruptcy Code. Pursuant to the terms of
the Plan, Inacom will liquidate its remaining assets and
distribute the net proceeds thereof to its creditors. In addition,
under the Plan all shares of the Company's common stock, and all
other equity securities of Inacom, are to be cancelled. No
distribution to the shareholders or other equity security holders
of Inacom is expected.

Inacom has 46,948,808 shares of common stock issued and
outstanding as of the date of this report. No shares of the
Company have been reserved for future issuance in respect of
claims and interests filed and allowed under the Plan.

It is anticipated that the effective date of the Plan will occur
on or about June 9, 2003.  Shortly after the Effective Date,
Inacom will file a Form 15 with the Securities and Exchange
Commission to de-register its common stock under the Securities
Exchange Act of 1934, as amended.

Information as to the assets and liabilities of Inacom Corporation
as of the most recent practicable date prior to the Confirmation
Date is contained in its Monthly Operating Report for April 2003,
which was filed with the Bankruptcy Court on May 30, 2003.

Further inquiries regarding the Plan or the Confirmation Order
should be directed to:

          Executive Sounding Board Associates, Inc.
          Plan Administrator of InaCom Corp., et al.
          Attention: Neil Gilmour III
          1300 Market Street, Suite 506
          Wilmington, Delaware 19801
          Facsimile: (302) 573-6812


INT'L MULTIFOODS: Selling Foodservice Pie Business for $2.3-Mil.
----------------------------------------------------------------
International Multifoods Corp. (NYSE:IMC) announced that it has
reached an agreement to sell the inventory and other selected
assets of its foodservice pie business to a third party for
approximately $2.3 million in cash. The transaction is subject to
customary closing conditions and is expected to be completed by
the end of August.

Multifoods' foodservice pie business, which is part of the
company's Foodservice Products division, produces cream and fruit
pies for foodservice operators and in-store bakery customers in
North America. The business generated about $10 million in annual
sales in fiscal 2003. The net book value of the sold assets is
approximately $2 million.

In connection with this transaction, Multifoods will close its
Simcoe, Ontario, plant following a transition period of up to
five months. This sale and plant closure will result in an
unusual pre-tax charge of approximately $1 million to $2 million,
or 3 cents to 6 cents per share after taxes, which will be
recognized over the balance of the year. The Simcoe facility
employs about 135 people.

Multifoods will use the proceeds from the sale to reduce its
debt. The sale of the pie business is expected to be neutral to
Multifoods' fiscal 2004 earnings.

"This sale is part of our efforts to simplify our Foodservice
Products business and improve its cost structure," said Gary E.
Costley, Multifoods chairman and chief executive officer. "The
foodservice pie business does not fit our long-term growth
strategy. Its sale will allow us to further concentrate our
resources on our core brands and product lines."

                About International Multifoods

International Multifoods is a manufacturer and marketer of
branded consumer foods and foodservice products in North America.
The company's food manufacturing businesses have combined annual
net sales of about $940 million. Multifoods' brands include
Pillsbury(R) desserts and baking mixes; Hungry Jack(R) pancake
mixes, syrup and potato side dishes; Martha White(R) baking mixes
and ingredients; Robin Hood(R) flour and baking mixes; Pet(R)
evaporated milk and dry creamer; Farmhouse(R) rice and pasta side
dishes; Bick's(R) pickles and condiments in Canada; Softasilk(R)
premium cake flour; Red River(R) hot flax cereal; and Golden
Temple(R). Further information about Multifoods is available on
the Internet at www.multifoods.com.

                        *   *   *

As previously reported in Troubled Company Reporter, Standard &
Poor affirmed its double-'B' corporate credit rating as well as
its double-'B'-plus senior secured debt rating on International
Multifoods Corp. The ratings were removed from CreditWatch, where
they were placed on July 30, 2002. At the same time, the company's
single-'A'-plus senior unsecured debt rating was affirmed. The
rating was not on CreditWatch, and the senior unsecured debt issue
is unconditionally guaranteed by Diageo PLC.

The outlook is stable.


INT'L MULTIFOODS: Red Ink Continued to Flow in Fiscal Q1 2004
-------------------------------------------------------------
International Multifoods Corp. (NYSE:IMC) reported a first-quarter
fiscal 2004 net loss of $300,000 compared with a loss of $36.4
million in the first quarter of fiscal 2003. As previously
announced, first-quarter fiscal 2004 reported results included an
unusual pre-tax charge of $3.5 million for costs to restructure
and increase the competitiveness of its Canadian Foods division
and its Foodservice Products business in the United States. Last
year's first-quarter amounts reflect a loss of $39.7 million from
discontinued operations.

Excluding unusual items, first-quarter fiscal 2004 earnings from
continuing operations were $2 million compared with $3.3 million
in the year-earlier period. Overall, higher commodity costs and
lower pension income reduced results in this year's first quarter
by about 10 cents per share.

In addition, first-quarter fiscal 2004 results included a $1.7
million pre-tax charge, or about 6 cents per share after taxes,
for bad debt reserves associated with the bankruptcy of Fleming
Companies. The company also realized a pre-tax gain of $1.4
million, or about 5 cents per share after taxes, attributable to
foreign currency translation on a U.S. dollar-denominated
intercompany loan to its Canadian Foods division due to a stronger
Canadian dollar. This gain is recorded in the attached financial
tables under "Other income (expense), net."

Net sales for the quarter ended May 31 totaled $213.9 million,
compared with $210.4 million in the prior year.

"Our performance in the quarter was in line with expectations, and
we are on track to deliver earnings before unusual items of $1.70
to $1.75 per share for the full year," said Gary E. Costley,
Multifoods chairman and chief executive officer.

"We remain focused on strengthening our overall market positions
and driving efficiencies across the company," Costley said.
"During the quarter, we experienced solid performance in both the
U.S. and Canadian retail marketplaces, with consumer take-away as
measured by dollar volume up in nearly all key product lines. Our
strong commitment to brand-building and innovation will continue
to benefit us and positively impact our results long term."

Costley also noted that during the quarter, the company completed
the transition of its U.S. Consumer Products business processes
from General Mills. Key milestones in the quarter included the
successful implementation of a new SAP management information
system, and the start-up and certification of the company's baking
mix and ready-to-spread frosting plant in Toledo, Ohio.

In a separate announcement, the company said that it has agreed to
sell its foodservice pie business for approximately $2.3 million
in cash. Proceeds from the sale will be used to reduce debt. In
connection with this transaction and the resulting closing of
Multifoods' Simcoe, Ontario, foodservice pie plant, the company
expects to recognize an unusual pre-tax charge in the range of $1
million to $2 million, or 3 cents to 6 cents per share, over the
balance of the year. Excluding this charge, the transaction is
expected to be neutral to Multifoods' fiscal 2004 earnings.

Capital expenditures in the quarter were $12 million and included
the first of two payments to General Mills for the purchase of a
manufacturing plant in Toledo, Ohio. The former General Mills
plant was converted over the past 18 months to produce the
Pillsbury and Hungry Jack baking mixes, and Pillsbury ready-to-
spread frostings that Multifoods acquired from General Mills in
November 2001. The conversion process, which included cost and
quality guarantees, was overseen by an independent trustee
appointed by the Federal Trade Commission. The plant was fully
certified by the trustee in May.

Depreciation and amortization totaled $5.4 million, up from $3.7
million in the prior year. This increase was driven by the
purchase of the Toledo facility.

Debt at the end of the quarter was approximately $375.9 million,
down from $536.4 million a year ago. Since the end of the
company's fiscal year, debt was up about $32 million due to higher
working capital and infrastructure investments. During the
quarter, working capital increased approximately $20 million as
Multifoods purchased the raw materials inventory and accounts
receivable from General Mills that had been carried on General
Mills' balance sheet since Multifoods' November 2001 brand
acquisition under terms of a transition services agreement.

As a result of the purchase of working capital from General Mills,
Multifoods used $15.9 million of cash for operations. The company
expects to generate free cash flow (cash flows from continuing
operations less capital expenditures of approximately $40 million)
in the $20 million to $25 million range in its current fiscal
year, ending Feb. 28, 2004. Debt reduction remains the company's
priority for the use of its excess cash.

Net interest expense for the quarter was $6.2 million, down from
$6.5 million in the year-earlier period.

           Discussion of First-Quarter Operating Results

Costley noted that overall, the company's first-quarter fiscal
2004 results before unusual items were adversely affected by the
increase in bad debt reserves related to the bankruptcy of Fleming
Companies, higher commodity costs and lower pension income.

Following is a review of the company's first-quarter operating
results by segment:

U.S. Consumer Products. Net sales for the first quarter were $83.2
million, down slightly from $86 million in the same period a year
ago. Operating earnings were $6.6 million, compared with $10.5
million in the first quarter of fiscal 2003.

The decline in earnings was driven by the recognition of a $1.7
million bad debt reserve associated with the Fleming bankruptcy,
higher commodity costs, unfavorable product mix and lower shipment
volume. Total shipments in the first quarter were down about 8
percent, due primarily to lower volume to Fleming and the impact
of retailers reducing inventories that were built up at the end of
Multifoods' fiscal 2003 fourth quarter in advance of the company's
conversion in early March to its new SAP management information
system.

Consumer take-away as measured by dollar volume was up 6 percent
in the first quarter, compared with a year ago. This improvement
reflects the benefits of core distribution gains, new product
introductions, and strong marketing and merchandising programs.
Overall, distribution of the company's branded products was up
nearly 12 percent versus a year ago.

"From a marketplace standpoint, we had a solid quarter, and we are
encouraged by the increasing demand for our products," Costley
said. "This performance clearly demonstrates the benefits of the
investments we are making to build brand equity, develop and
launch new products, and expand distribution."

Costley added, "With our strong consumer brands and the continued
attention that we are bringing to them, we are well positioned for
the balance of the year."

The company continues to focus on brand-building initiatives and
new product innovation. New items include Pillsbury SnackBatch
baking mixes, Hungry Jack flavored mashed potatoes and Martha
White Cornbread Creations. During the quarter, the company also
benefited from a successful portfolio-wide marketing initiative in
March and from strong Easter merchandising.

Foodservice Products. First-quarter net sales in Foodservice
Products were $55.4 million, compared with $58.3 million in the
prior year. Excluding unusual items, operating earnings were
$900,000, down from $1.6 million in the first quarter of fiscal
2003. These results largely reflect continued volume declines in
the company's foodservice baking mix businesses, the
rationalization of some product lines and ongoing softness in the
foodservice industry.

"We are clearly disappointed with the performance of our
Foodservice Products business, and we are taking steps to improve
it," Costley said. "Our announcement today to sell the foodservice
pie business is in keeping with our strategy to simplify our
foodservice business and increase its profitability."

During the quarter, the company closed two small facilities,
exited an unprofitable account and discontinued some slower-moving
products. The company also expanded its frozen muffin product line
and introduced two new Pillsbury foodservice baking mix items.

Canadian Foods. Net sales in the first quarter were $75.3 million,
compared with $66.1 million in the first quarter of fiscal 2003.
This increase was largely attributable to favorable foreign
currency translation, 6-percent volume growth in Canadian consumer
products and the impact of higher selling prices resulting from
higher commodity costs.

Operating earnings before unusual items were $3.6 million, down
slightly from $3.8 million in the year-earlier first quarter, due
primarily to lower commercial baking mix volumes, and higher
commodity and manufacturing costs. The favorable impact of
currency translation on operating earnings was largely offset by
the negative effects of currency on U.S. dollar-denominated sales.

"Our first-quarter performance in Canada was in line with our
expectations," Costley said. "In April, we instituted significant
organizational changes to improve the focus, speed and processes
in our Canadian Foods business, and we are just beginning to see
the benefits of these actions."

During the quarter, shipments were up about 7 percent in consumer
condiments, primarily as a result of the company's continued
success with its Bick's Snack 'Ems pickles. Consumer take-away for
Bick's increased 8 percent for the 12-week period ending May 17.
Shipments in consumer grain-based products rose 6 percent in the
quarter. For the 12 weeks ending May 17, Robin Hood consumer flour
take-away was up 1 percent.

                              Outlook

For fiscal year 2004 ending Feb. 28, 2004, Multifoods expects
earnings before unusual items to be in the range of $1.70 to $1.75
per share. Including unusual items, reported earnings per share
are expected to be in the range of $1.52 to $1.60. These estimates
assume continued investments in marketing and R&D; higher
commodity costs, which will principally affect first-half
comparisons; higher depreciation expense; and lower income from
the company's pension plans, which were fully funded at the end of
fiscal 2003.

Multifoods' goal is to generate annualized operating earnings
growth of 5 percent to 7 percent and earnings per share growth of
9 percent to 11 percent over a three-year period beginning in
fiscal 2004. The company also said that it expects to exceed $100
million in free cash flow (cash flows from operations less capital
expenditures of $90 million to $100 million) over the same three
years.

"We are investing in our brands and partnering with our customers
to help them drive sales," Costley said. "With clearly defined
growth strategies and a stronger balance sheet, we are confident
that we will deliver our annual and three-year financial targets."

         Summary of First-Quarter Fiscal 2004 Unusual Items

The company's fiscal 2004 first-quarter results included a pre-tax
charge of $3.5 million associated with actions taken to reduce the
cost structure and improve the financial performance of its
Canadian Foods division and its Foodservice Products business in
the United States. These actions, which included significant
management changes in its Canadian Foods business, the
rationalization of its foodservice product line in the United
States, and the closing of two small U.S. foodservice facilities,
resulted in a net reduction of about 100 full-time positions.

International Multifoods is a manufacturer and marketer of branded
consumer foods and foodservice products in North America. The
company's food manufacturing businesses have combined annual net
sales of nearly $940 million. Multifoods' brands include
Pillsbury(R) baking mixes for items such as cakes, muffins,
brownies and quick breads; Pillsbury(R) ready-to-spread frostings;
Hungry Jack(R) pancake mixes, syrup and potato side dishes; Martha
White(R) baking mixes and ingredients; Robin Hood(R) flour and
baking mixes; Pet(R) evaporated milk and dry creamer; Farmhouse(R)
rice and pasta side dishes; Bick's(R) pickles and condiments in
Canada; Softasilk(R) premium cake flour; Red River(R) hot flax
cereal; and Golden Temple(R). Further information about Multifoods
is available on the Internet at http://www.multifoods.com  

                          *   *   *

As previously reported in Troubled Company Reporter, Standard &
Poor affirmed its double-'B' corporate credit rating as well as
its double-'B'-plus senior secured debt rating on International
Multifoods Corp. The ratings were removed from CreditWatch, where
they were placed on July 30, 2002. At the same time, the company's
single-'A'-plus senior unsecured debt rating was affirmed. The
rating was not on CreditWatch, and the senior unsecured debt issue
is unconditionally guaranteed by Diageo PLC.

The outlook is stable.


INT'L PROPERTIES: Reports Results for Fiscal Second Quarter 2003
----------------------------------------------------------------
International Properties Group Ltd. announced its operating
results for the second quarter and first half of fiscal 2003. The
Company recorded a net income of nil or nil per share for the
three months and the six months ended April 30, 2003 as compared
to a net loss of $3.5 million or $0.10 per share for the three
months ended April 30, 2003 and a net loss of $2.5 million or
$0.07 per share for the six months ended April 30, 2003.

                       Financial Results

The following selected financial information summarizes IPG's
interim unaudited financial results for the three months and six
months ended April 30, 2003. Unaudited financial statements will
be made available shortly and can be accessed on-line at
http://www.sedar.com  

                         Going concern

The Company, as a corporation, has as its principal asset, cash.
On September 17, 2002, shareholder approval was received at a
Special Meeting of Shareholders to sell the remaining assets of
the Company, including the assets of its subsidiaries, and
thereafter to wind-up and dissolve the Company. Based on these
facts, management does not consider the Company and its
subsidiaries to be going concerns since the entities are not
expected to continue operations for the foreseeable future.

As a result of the going concern assumption no longer being
appropriate, the carrying values of the Company's assets, on a
consolidated basis, were adjusted during fiscal 2002 by $626 to
reflect their estimated realizable liquidation values. In
addition, expenses incurred and estimates of future obligations
associated with the wind-up and dissolution of the Company, in the
amount of $3,632, were included in the operating results for
fiscal 2002. No such costs or expenses were recorded for the three
month or six month periods ended April 30, 2003. $3,083 of such
costs and expenses were recorded for the three month and six month
periods ended April 30, 2002.

Further, the Company is subject to a number of potential legal
actions, which although management believes are not significant or
are without merit, will require resolution. The likelihood and
potential outcome of these actions cannot be determined at this
time. Therefore, no amounts have been reflected in these financial
statements.

International Properties Group Ltd. owns InvestorPlus Ltd. There
is currently no market for the Class A Voting Shares or Redeemable
Preferred Shares.


LEVEL 3 COMMS: Will Publish Second Quarter Results on July 25
-------------------------------------------------------------
Level 3 Communications, Inc. (Nasdaq: LVLT) will release its
second quarter 2003 results on Thursday, July 24, 2003 and will
host a conference call at 11 a.m. Eastern time.

The second quarter conference call will be broadcast live on Level
3's Web site at http://www.Level3.com.  If you are unable to join  
the call via the web, you may access the call at 612-326-1003.  
You may also email questions to Investor.Relations@Level3.com

The call will be archived and available on the Company's Web site
at http://www.Level3.com, or you may access an audio replay until  
8 p.m. Eastern time on July 28, 2003 by dialing 320-365-3844,
access code 687821.  For additional information please call 720-
888-2502.

Level 3 (Nasdaq: LVLT) -- whose March 31, 2003 balance sheet shows
a total shareholders' equity deficit of about $58 million -- is an
international communications and information services company.  
The company operates one of the largest Internet backbones in the
world, is one of the largest providers of wholesale dial-up
service to ISPs in North America and is the primary provider of
Internet connectivity for millions of broadband subscribers,
through its cable and DSL partners.  The company offers a wide
range of communications services over its 20,000-mile broadband
fiber optic network including Internet Protocol (IP) services,
broadband transport, colocation services, Genuity managed
services, and patented Softswitch-based managed modem and voice
services.  Its Web address is http://www.Level3.com

The company offers information services through its subsidiaries,
(i)Structure and Software Spectrum.  For additional information,
visit their respective Web sites at
http://www.softwarespectrum.comand http://www.i-structure.com


LEVI STRAUSS: May 25 Balance Sheet Insolvency Widens to $1 Bill.
----------------------------------------------------------------
Levi Strauss & Co., announced financial results for the second
fiscal quarter ended May 25, 2003. Despite weak market conditions,
the company's sales trends improved in the second quarter from the
first quarter. The company also continues to expect growth in the
second half of the year.

Second-quarter net sales rose 1 percent to $930 million from $924
million in the second quarter of 2002. On a constant-currency
basis, net sales decreased approximately 5 percent for the period.

"The second quarter was difficult because of stagnant economies
and retail markets worldwide," said chief executive officer Phil
Marineau. "However, I'm very pleased with our revamped product
lines and our marketing strategies. Despite the persistently tough
market conditions, including deflationary apparel trends in the
United States and Europe, there is still an opportunity for modest
growth in the second half of this year.

"Our new Levi Strauss Signature(TM) brand will be a key driver of
growth as it rolls out to all 3,000 U.S. Wal-Mart locations. We'll
have full lines of men's, women's and kids' apparel in stores next
month," said Marineau. "Later this year, the brand will be
introduced into the mass channel in Canada and several countries
in the Asia Pacific region, and in 2004 we're launching in Europe.
In our core Levi's(R) and Dockers(R) businesses, we're continuing
to introduce new products and marketing programs globally,
including updated fits for our classic 501(R) jeans; new,
mainstream finishes and fabrics for Levi's(R) apparel in the
United States; and a new line of khakis for young men -- the
Dockers(R) D-Series."

Second-quarter gross profit was $385 million, or 41.3 percent of
sales, which compares to $370 million, or 40.0 percent of sales,
in the second quarter of 2002. Included in 2002 gross profit is
$30 million of restructuring-related expenses associated with the
closure of manufacturing plants. Excluding restructuring-related
expenses, gross profit in the second quarter of 2002 was $400
million, or 43.3 percent of sales.

Operating income for the quarter was $56 million, or 6.1 percent
of net sales, compared to an operating loss of $82 million, or 8.9
percent of net sales, in the second quarter of 2002. Included in
2003 operating income is a reversal of $6 million of restructuring
charges for prior years' restructuring initiatives. Included in
2002 operating income is $171 million of restructuring charges,
net of reversals and related expenses, primarily associated with
the closure of manufacturing plants that year. Second-quarter
operating income excluding restructuring charges, net of reversals
and related expenses, was $51 million, or 5.5 percent of net sales
in 2003 and $89 million, or 9.7 percent of net sales in 2002.

Net loss in the second quarter was $13 million compared to a net
loss of $76 million in 2002. Impacting the 2003 period are net
losses from the company's foreign exchange management activities
and higher interest expense. Excluding restructuring charges, net
of reversals and related expenses, net loss was $17 million in
2003 versus net income of $21 million in 2002.

As of May 25, 2003, total debt was $2.31 billion compared to $2.56
billion as of February 23, 2003 and $1.85 billion as of the fiscal
year ended November 24, 2002. At quarter-end, total debt, less
cash, stood at $2.17 billion compared to $1.94 billion as of
February 23, 2003 and $1.75 billion at the end of fiscal year
2002.

Also, the Company's May 25, 2003 balance sheet shows a total
shareholders' equity deficit of about $1 billion.

"The rise in net debt levels reflects higher inventories
associated with seasonal working capital needs and our entry into
the mass channel, as well as a scheduled tax payment," said Bill
Chiasson, chief financial officer. "Although we are expecting
modest growth in the second half, we're not anticipating
improvement in the external environment, so we're taking a more
conservative view of our full-year sales. We now expect to be
essentially flat versus 2002 on a constant-currency basis.
Nonetheless, we remain comfortable with our prior gross margin
guidance of 40-42 percent and expect operating margins to be in
the range of 8-10 percent. Additionally, we anticipate net debt
will peak in the third quarter, up $600 million from year-end, and
expect to close the year $250-$300 million above year-end 2002
levels. As a result, we have obtained an amendment to our senior
secured credit facility to reflect anticipated earnings and debt
levels."

Levi Strauss & Co. is one of the world's leading branded apparel
companies, marketing its products in more than 100 countries
worldwide. The company designs and markets jeans and jeans-related
pants, casual and dress pants, shirts, jackets and related
accessories for men, women and children under the Levi's(R),
Dockers(R) and Levi Strauss Signature(TM) brands.


MDC CORP: Strikes Definitive Pact to Buy Maxxcom Minority Shares
----------------------------------------------------------------
MDC Corporation Inc. of Toronto and Maxxcom Inc. have entered into
a definitive agreement under which MDC will acquire by way of plan
of arrangement all of the issued and outstanding shares of Maxxcom
not already owned by MDC in exchange for Class A subordinate
voting shares of MDC. The Board of Directors of Maxxcom, based on
a recommendation of its Independent Committee, has unanimously
determined that the transaction is in the best interests of
Maxxcom and is fair to shareholders of Maxxcom other than MDC, and
recommends to Maxxcom shareholders that they vote in favor of the
transaction.

Subsequent to the announcement by MDC and Maxxcom on June 5, 2003
of their agreement in principle respecting the proposed
transaction, MDC and its advisors had discussions with certain
investment managers administering funds holding Maxxcom Common
Shares concerning the transaction. As a result of these
discussions, MDC agreed with Maxxcom to increase the number of MDC
Class A Shares to be offered to Maxxcom Minority Shareholders on
the basis set out below.

Pursuant to the revised terms of the arrangement, Maxxcom Minority
Shareholders will receive a number of MDC Class A Shares based on
the "MDC Share Value", being the volume weighted average trading
price of the outstanding MDC Class A Shares on the Toronto Stock
Exchange for the 20 trading day period ending on the second
trading day preceding the date of the meeting of Maxxcom
shareholders to be held to consider the transaction, calculated as
follows:

    - if the MDC Share Value is greater than $9.71, Maxxcom
      shareholders will receive 1 MDC Class A Share for every 5.25
      Maxxcom shares they own;

    - if the MDC Share Value is equal to or greater than $9.25 and
      equal to or less than $9.71, Maxxcom shareholders will
      receive a number of MDC Class A Shares equal to $1.85
      divided by the MDC Share Value for every Maxxcom share they
      own; and

    - if the MDC Share Value is less than $9.25, Maxxcom
      shareholders will receive 1 MDC Class A Share for every 5
      Maxxcom shares they own.

The Maxxcom Independent Committee was formed to review and assess
the plan of arrangement and make a recommendation to the Board of
Directors of Maxxcom as to whether the transaction should be
recommended to Maxxcom Minority Shareholders. The Independent
Committee retained BMO Nesbitt Burns Inc. to provide Maxxcom with
a valuation of the Maxxcom Common Shares and a fairness opinion.
BMO Nesbitt Burns Inc. determined that, as of June 4, 2003, the
value of the Maxxcom Common Shares was within a range of $1.60 to
$2.10 per share. BMO Nesbitt Burns has also advised that, in its
opinion, as of June 4, 2003, the consideration offered under the
arrangement is fair, from a financial point of view, to the
Maxxcom Minority Shareholders.

At $1.85 per share, the mid-point of BMO Nesbitt Burns' valuation
range, the proposed transaction represents a premium of 41% to the
volume weighted average trading price of the common shares of
Maxxcom on the Toronto Stock Exchange of $1.31 for the period of
20 trading days prior to the announcement of the proposed
transaction on June 5, 2003.

The transaction will be implemented pursuant to a plan of
arrangement under the Business Corporations Act (Ontario), and
will require the approval of the Ontario Superior Court of Justice
and applicable regulatory authorities. A meeting of Maxxcom
shareholders to consider, among other matters, the plan of
arrangement has been called for July 30, 2003. A management
information circular describing the terms of the plan of
arrangement and setting out the recommendation and reasons of the
Board of Directors of Maxxcom will be mailed to Maxxcom
shareholders by no later than July 9, 2003. The closing of the
transaction will occur as soon as practicable following receipt of
Maxxcom shareholder and other required approvals, expected to be
on or about July 31, 2003.

MDC is a publicly traded international business services
organization with operating units in Canada, the United States,
United Kingdom and Australia. MDC provides marketing communication
services, through Maxxcom, and offers security sensitive
transaction products and services in three primary areas:
electronic transaction products such as credit, debit, telephone &
smart cards; secure ticketing products, such as airline, transit
and event tickets, and stamps, both postal and excise. MDC Class A
Shares are traded on the Toronto Stock Exchange under the symbol
MDZ.A and on the NASDAQ National Market under the symbol MDCA.

MDC, at March 31, 2003, disclosed a working capital deficit of
about CDN$4.6 million.

Maxxcom, a subsidiary of MDC, is a multi-national business
services company with operating units in Canada, the United States
and the United Kingdom. Maxxcom is built around entrepreneurial
partner firms that provide a comprehensive range of communications
services to clients in North America and the United Kingdom.
Services include advertising, direct marketing, database
management, sales promotion, corporate communications, marketing
research, corporate identity and branding, and interactive
marketing. Maxxcom common shares are traded on the Toronto Stock
Exchange under the symbol MXX.


MDC HOLDINGS: Expects Q3 Earnings to Exceed Consensus Estimate
--------------------------------------------------------------
M.D.C. Holdings, Inc. (NYSE: MDC) --
http://www.RichmondAmerican.com-- (S&P/BB+/Stable) announced, in  
preparation for the Company meeting with the investment community
this week, that it expects earnings per share for the three months
ended June 30, 2003 to exceed analysts' consensus estimate of  
$1.15.  The Company also expects net home orders for the second
quarter of 2003 to be higher than net orders for the same period
in 2002 by more than 20%.  The most significant increases in home
orders have been realized in Las Vegas, Phoenix, Virginia and
Maryland, where the Company has experienced its highest growth in
active subdivisions.  MDC's home orders in Colorado for the 2003
second quarter also are anticipated to increase from the same
period in 2002. Detailed information on home orders will be
provided when MDC releases its 2003 second quarter home orders,
home closings and quarter-end backlog during the first week of
July.

The Company plans to release its 2003 second quarter earnings and
hold its quarterly conference call and webcast on July 15, 2003.

MDC, whose subsidiaries build homes under the name "Richmond
American Homes," is one of the largest homebuilders in the United
States.  The Company also provides mortgage financing, primarily
for MDC's homebuyers, through its wholly owned subsidiary,
HomeAmerican Mortgage Corporation.  MDC is a major regional
homebuilder with a significant presence in some of the country's
best housing markets.  The Company is the largest homebuilder in
Colorado; among the top five homebuilders in Northern Virginia,
Phoenix, Tucson and Las Vegas; among the top ten homebuilders in
suburban Maryland, Northern California, Southern California and
Salt Lake City.  MDC also has a growing presence in Dallas/Fort
Worth and has recently entered the Houston and
Philadelphia/Delaware Valley markets.


MEDIA 100: Red Ink Continued to Flow in Second Quarter 2003
-----------------------------------------------------------
Media 100 Inc. (NASDAQ: MDEA), a leading developer of advanced
media systems, reported financial results for its second quarter
ending May 31, 2003.

Net sales for the second quarter were $5.1 million, versus $6.6
million reported in the second quarter of fiscal 2002. Net sales
for the second quarter increased compared to the $4.8 million
reported in the first quarter of fiscal 2003 - the second
consecutive quarter of revenue growth. On a generally accepted
accounting principles (GAAP) basis, the Company reported a net
loss of $1.3 million in the second quarter versus a net loss of
$3.7 million in the second quarter of 2002. Results for the second
quarter of fiscal 2003 include a one-time restructuring charge of
approximately $214,000.

During the second quarter the Company grew the installed base of
844/X end-user units by 34% over the first quarter of fiscal 2003.
This growth was driven in large part by the delivery of two major
new 844/X product advancements--The Version 2.0 Finishing Release
and XBLUR--that together represent the largest expansion of 844/X
features since first shipments of the system began a year ago.

In the second quarter of 2003 the Company also secured a $2.5
million investment by Coghill Capital Management, approximately $1
million of which was added to the balance sheet within the
quarter. Media 100 is currently seeking stockholder approval for
the remaining $1.5 million as required by The Nasdaq Stock Market,
Inc. The proceeds of the transaction are planned to provide
capital for the continued development and marketing of the
Company's 844/X products.

"Media 100 shipped more 844/X units to end users in May than in
any previous month - breaking our previous best monthly mark by
over 50%," said John Molinari, president and chief executive
officer for Media 100. "This was due in large part to our
successful attendance at the NAB tradeshow in Las Vegas where we
conducted more than 100 private demonstrations of our new 844/X
Version 2 software - dubbed The Finishing Release - and XBLUR -
the world's first real-time, multi-stream Gaussian Blur. These
significant product advancements, combined with the $2.5 million
investment from Coghill Capital Management, put Media 100 in a
strong position to drive continued growth."

Second Quarter 2003 Highlights

-- The Company announced the 200th 844/X installation;

-- Total installed 844/X end-user units grew 34% over the first
   quarter;

-- The Company began shipments of 844/X Version 2.0 - The
   Finishing Release - in May;

-- The Company began shipments of XBLUR for 844/X in May, one
   month earlier than initially announced;

-- At NAB in April, the Company conducted a technology    
   demonstration of Media 100 iHD, a Mac OS X-based solution that
   leverages HDX Technology, being developed for 844/X, to deliver
   unique, resolution-independent HD/SD editing;

-- Lewis Jaffe, an experienced digital media industry executive,
   joined the Media 100 Board of Directors;

-- The Company secured a $2.5 million investment from Coghill
   Capital Management;

-- The Company continued to ship 844/X to such flagship customers
   as Playboy TV and Abbey Road Interactive as well as several
   local CBS, FOX, WB, UNIVISION and PBS affiliates.

                    Forward Looking Guidance

Given the recent introduction of The Version 2.0 Finishing Release
and XBLUR for 844/X, it is difficult to predict the sales levels
for the second half of fiscal 2003. However recent expense
reduction actions taken by the Company will reduce operating
expenses in the third and fourth quarters of fiscal 2003. The
Company plans to achieve positive cash flow by the end of fiscal
2003.

Media 100 develops advanced media systems for content design,
enabling creative professionals to design highly evocative
effects-intensive work all on a personal computer. Creative
artists and content design teams around the world use the
Company's Emmy Award-winning solutions. Media 100 is headquartered
in Marlboro, Massachusetts. For more information, visit
http://www.media100.com  

Media 100 Inc.'s May 31, 2003 balance sheet shows that its
accumulated deficit increased to about $217 million, and its total
shareholders' equity further dwindled to about $1.2 million.

In its latest SEC Form 10-Q, the Company reported:

"Media 100 Inc., and subsidiaries design and sell advanced media
systems for content design.  In the case of the Company's newest
and most advanced development, 844/X(TM), we have integrated the
previously separate workflows of real-time video editing and the
compositing of layers of video, computer graphics, audio, and
metadata.  We believe this workflow integration is a technical
breakthrough that over time will attract existing and new video
editing users who wish to be able to design more complex content
that comprises dozens, even hundreds of distinct content layers.  
The Company has developed new technology-integrated software and
hardware, including Application-Specific Integrated Circuits-to
perform compositing in real time or at high speed to allow
compositing operations to be performed within an editing
environment and execute at high speed without host-based
rendering, which is slow and impedes productivity.

"The Company's products are personal computer-based workstations
configured with proprietary software and hardware that we engineer
and manufacture.  In some cases, particularly with 844/X, we sell
our products as fully integrated systems, meaning we configure and
ship the system to an end user, or reseller, with a host personal
computer, our software and hardware, and optional disk storage; in
other cases, we deliver only our software and hardware, typically
to an independent value-added reseller that configures the turnkey
system themselves on behalf of an end user.

"The Company has incurred an operating loss during the quarter
ended February 28, 2003 and operating losses in the past five
fiscal years. In addition, it has experienced negative cash flow
from ongoing operations during fiscal 2003, and expects to incur
operating losses and negative cash flows for at least the first
half of fiscal 2003. The Company incurred a net loss of
approximately $1.4 million for the quarter ended February 28, 2003
and as of February 28, 2003, the Company had an accumulated
deficit of approximately $215.7 million.

"The Company has already taken a series of actions to reduce the
negative cash flow it experienced in the past fiscal year
including the termination of employees, reductions in the salaries
paid to executives and certain other employees, relocation of its
facility to lower cost space and a reduction in the marketing
expenses for existing products.  However, these expense reductions
will not be enough to return the Company to profitability without
revenue growth.  The Company's current operating plan and cash
flow projections assume a certain level of revenue growth and
operating expenses. If the Company fails to achieve its revenue
plan then management will realign operating expenses consistent
with the revised revenue expectations at that time in order to
conserve cash.  The current cash flow projections also assume the
Company will not require substantial cash for capital purchases or
to fund substantial increases in inventory, accounts receivable or
other assets and the projections assume the Company will be able
to continue to collect accounts receivables and will not incur
substantial bad debts as a result of the failure of customers to
pay.

"The Company may need to raise additional capital within the next
twelve months through the sale of debt or equity securities to
fund future operations, develop new and enhance existing products
and services, or acquire complementary products, businesses or
technologies. At this time, the Company is in the process of
seeking additional capital.  However, additional capital might not
be available on terms favorable to the Company, or at all.

"At this time, management believes that the Company will be able
to operate as a going concern through at least the next twelve
months based upon the amount of its existing available capital,
its current operating plan and management's commitment to reduce
operating expenses further if the Company does not achieve the
revenues anticipated in its current operating plan."


MERRILL LYNCH MORTGAGE: Fitch Rates Class B-4 and B-5 at BB+/B+
---------------------------------------------------------------
Fitch rates Merrill Lynch Mortgage Investors, Inc.'s $1 billion
mortgage pass-through certificates, series MLCC 2003-C as follows.
The $973.8 million class A-1, A-2, X-A-1, X-A-2, X-A-3, X-B and A-
R (senior certificates) are rated 'AAA'; $10.6 million class B-1
certificates 'AA+', $8 million class B-2 certificates 'A+', $4.5
million class B-3 certificates 'BBB+', $2.5 million class B-4
certificates 'BB+' and $2 million class B-5 certificates 'B+'.

The 'AAA' rating on the senior certificates reflects the 3.10%
subordination provided by the 1.05% class B-1, 0.80% class B-2,
0.45% class B-3, 0.25% privately offered class B-4, 0.20%
privately offered class B-5 and 0.35% privately offered class B-6
certificates (not rated by Fitch). Classes B-1, B-2, B-3, B-4 and
B-5 are rated 'AA+', 'A+', 'BBB+', 'BB+' and 'B+', respectively,
based on their respective subordination.

Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults as well as bankruptcy, fraud and
special hazard losses in limited amounts. In addition, the ratings
also reflect the quality of the underlying mortgage collateral,
strength of the legal and financial structures and the servicing
capabilities of Cendant Mortgage Corporation, rated 'RPS1-' by
Fitch.

The trust consists of 2,552 conventional, fully amortizing,
primarily 25-year adjustable-rate mortgage loans secured by first
liens on one- to four-family residential properties with an
aggregate principal balance of $1,004,952,623 as of the cut-off-
date (June 1, 2003). Each of the mortgage loans are indexed off
the one-month LIBOR or six-month LIBOR, and all of the loans pay
interest only for a period of ten years following the origination
of the mortgage loan. The average unpaid principal balance as of
the cut-off-date is $393,790. The weighted average original loan-
to-value ratio (OLTV) is 66.49%. The weighted average effective
LTV is 63.64%. The weighted average FICO is 728. Cash-out
refinance loans represent 36.59% of the loan pool. The three
states that represent the largest portion of the mortgage loans
are California (24.98%), Florida (7.84%) and New York (6.20%).

All of the mortgage loans were either originated by Merrill Lynch
Credit Corporation pursuant to a private label relationship with
Cendant Mortgage Corporation or acquired by MLCC in the course of
its correspondent lending activities and underwritten in
accordance with MLCC underwriting guidelines as in effect at the
time of origination. Any mortgage loan with an OLTV in excess of
80% is required to have a primary mortgage insurance policy. There
are loans referred to as 'Additional Collateral Loans', which are
secured by a security interest, normally in securities owned by
the borrower, which generally does not exceed 30% of the loan
amount. Ambac Assurance Corporation provides a limited purpose
surety bond, which guarantees that the Trust receives certain
shortfalls and proceeds realized from the liquidation of the
additional collateral, up to 30% of the original principal amount
of that Additional Collateral Loan.

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

MLMI, the Depositor, will assign all its interest in the mortgage
loans to the trustee for the benefit of certificate holders. For
federal income tax purposes, an election will be made to treat the
trust fund as multiple real estate mortgage investment conduits
(REMICS). Wells Fargo Bank Minnesota, National Association will
act as trustee.


MERITAGE CORP: Fitch Assigns BB Senior Unsecured Debt Rating
------------------------------------------------------------
Fitch Ratings initiates coverage of Meritage Corp.  Fitch assigns
a 'BB' rating to the senior unsecured debt. The rating applies to
approximately $205 million in outstanding senior notes as well as
the company's $250 million revolving credit agreement. The Rating
Outlook is Stable.

Ratings for Meritage are based on the company's successful
execution of its business model, conservative land policies and
geographic and product line diversity. The company has been an
active consolidator in the homebuilding industry which has led to
above average growth during the past six years, but has kept debt
levels somewhat higher than its peers. Management has also
exhibited an ability to quickly and successfully integrate its
acquisitions. In any case, now that the company has reached
current scale there may be less use of acquisitions going forward
and acquisitions are likely to be smaller relative to Meritage's
current size.

Risk factors include the inherent (although somewhat tempered)
cyclicality of the homebuilding industry. The ratings also
manifest the company's aggressive, yet controlled growth strategy
and Meritage's capitalization and size.

The company's EBITDA and EBIT to interest ratios and inventory
turnover tend to be somewhat stronger than the average public
homebuilder, while its leverage is a bit higher and debt to EBITDA
ratio is average. Although the company has certainly benefited
from the generally strong housing market of recent years, a degree
of profit enhancement is also attributed to purchasing design and
engineering, access to capital and other scale economies that have
been captured by the large national and regional public
homebuilders in relation to non-public builders. These economies,
the company's presale operating strategy and return on equity and
return on assets orientation provide the framework to soften the
margin impact of declining market conditions in comparison to
previous cycles. Meritage's ratio of sales value of backlog to
debt, although lower than in the past, remains at roughly 2 times
- a comfortable cushion.

Meritage employs quite conservative land and construction
strategies. The company typically options or purchases land only
after necessary entitlements have been obtained so that
development or construction may begin as market conditions
dictate. Meritage extensively uses lot options. The use of non-
specific performance rolling options gives the company the ability
to renegotiate price/terms or void the option which limits down
side risk in market downturns and provides the opportunity to hold
land with minimal investment. At present almost 81% of its lots
are controlled through options - a higher percentage than most
public builders. Total lots, including those owned, were 26,854 at
March 31, 2003. This represents a 5.4 year supply based on current
production rates. Over 85% of its homes are pre-sold. The balance
are homes under construction or homes completed in advance of a
customer's order.

Roughly half of Meritage's growth has resulted from a series of
acquisitions (five during the past six years). The acquisitions
have enabled the company to build its position, often broadening
product and customer bases in existing markets. They have also
enabled the company to enter new markets. The combinations
typically were funded by debt and to a lesser degree by stock.
Frequently, there were earn-outs which reduced risk and served to
retain key management. Now that Meritage has reasonable scale
there may be less use of acquisitions going forward. On average
acquisitions are likely to be smaller relative to Meritage's
current size. Fitch believes that management would balance debt
and stock as acquisition currency to at least maintain current
credit ratios.

Meritage maintains a $250 million revolving credit facility of
which $110 million were available at the end of the first quarter.
The revolving credit agreement matures on December 12, 2005 (with
extension provisions). The company has irregularly purchased
moderate amounts of its stock in the past. Share repurchase
authorization of $10.7 million remains. The 9.75% senior notes
mature in 2011.


MESA AIR GROUP: Completes $100 Mill. Convertible Debt Offering
--------------------------------------------------------------
Mesa Air Group (Nasdaq: MESA) has completed its sale of $100
million issue price of convertible notes due 2023 which was
announced on June 11.  In addition to the original offering of $75
million of issue price, the Company announced that the initial
purchasers have exercised their option to purchase an additional
$25 million issue price of the notes for total proceeds of $100
million to Mesa.  The notes pay cash interest until June 16, 2008.  
Thereafter, the notes will cease paying cash interest and begin
accruing interest at a rate of 6.25% until maturity.  As a result,
the aggregate amount due at maturity, including interest accrued
from June 16, 2008, will be approximately $252 million.

Each note was issued at a price of $397.27 and is convertible into
Mesa common stock at a conversion ratio of 39.727 shares per
$1,000 principal amount at maturity of notes.  This represents an
equivalent conversion price of $10.00 per share (subject to
adjustment in certain circumstances).

Mesa may redeem the notes, in whole or in part, on or after
June 16, 2008. Holders of the notes may require Mesa to repurchase
the notes at a price of original issue price plus accrued interest
on June 16 of 2008, 2013 and 2018.

The offering was made only to qualified institutional buyers in
accordance with Rule 144A under the Securities Act of 1933.  Mesa
intends to use the net proceeds from the offering for working
capital and general corporate purposes.

The notes being offered and the common stock issuable upon
conversion of the notes have not been registered under the
Securities Act, or any state securities laws, and may not be
offered or sold in the United States absent registration under, or
an applicable exemption from, the registration requirements of the
Securities Act and applicable state securities laws.

Mesa currently operates 141 aircraft with 1,042 daily system
departures to 162 cities, 43 states, Canada and Mexico and the
Bahamas.  It operates in the West and Midwest as America West
Express; the Midwest and East as US Airways Express; in Denver as
Frontier JetExpress and, commencing July 6, United Express; in
Kansas City with Midwest Express and in New Mexico and Texas as
Mesa Airlines.  The Company, which was founded in New Mexico in
1982, has approximately 3,300 employees.  Mesa is a member of the
Regional Airline Association and Regional Aviation Partners.


MILLER INDUSTRIES: Fails to Maintain NYSE Listing Standards
-----------------------------------------------------------
Miller Industries, Inc. (NYSE: MLR) has received notification from
the New York Stock Exchange that, based on market information and
information in the Company's recent public filings, it is not in
compliance with the NYSE's continued listing standards. The NYSE
requires shareholders' equity of not less than $50.0 million and a
30-day average market capitalization of $50.0 million. The
Company's shareholders' equity was $40.1 million, as reported in
the Company's March 31, 2003 Form 10-Q filed with the Securities
and Exchange Commission on May 22, 2003. As of May 27, 2003, the
Company had a 30-day average market capitalization of $28.9
million.

The Company is currently working with the NYSE to develop a plan
that will bring the Company back into compliance with listing
criteria within 18 months. The Company has until July 19, 2003 to
submit its plan. The NYSE may take up to 45 days to review and
evaluate the plan after it is submitted. If the plan is accepted,
the Company will be subject to quarterly monitoring for compliance
by the NYSE. If the NYSE does not accept the plan, the Company
will be subject to NYSE trading suspension and delisting. In that
event, the Company would pursue listing on an alternative national
securities exchange

                           *    *    *

                    Going Concern Uncertainty

Primarily because of the potential default in July 2003, the
Company's independent auditors have included a "going concern"
explanatory paragraph in their annual audit report.  The Company
is therefore currently in default under both the Senior and Junior
Credit Facilities as a result of the "going concern" explanatory
paragraph as well as the failure to file its Annual Report prior
to April 30, 2003. Additionally, the Company is in default of the
EBITDA covenant under the Junior Credit Facility only for the
first quarter of calendar 2003.  The Company is currently not
pursuing a waiver of these defaults or an amendment to the Credit
Facilities to cure these defaults.  The Company has had informal
discussions with its creditors and believes based on these
discussions that the Senior and Junior lender agents will not take
action against the Company as a result of these defaults.  
However, there can be no assurance that they will not pursue
action in the future as a result of these defaults or any other
default under the Credit Facilities.

Miller Industries is the world's leading integrated provider of
vehicle towing and recovery equipment.  The Company markets its
towing and recovery equipment under a number of well-recognized
brands, including Century, Vulcan, Chevron, Holmes, Challenger,
Champion and Eagle.


MIRANT: Fitch Hangs Junk Ratings on Sr. Notes & Securities
----------------------------------------------------------
Fitch Ratings has downgraded the ratings of Mirant Corp. as
follows: senior notes and convertible senior notes to 'CCC' from
'B-', convertible trust preferred securities to 'CCC-' ('CCC
minus') from 'CCC+'. Ratings of Mirant affiliates Mirant Americas
Generation, LLC and Mirant Mid-Atlantic, LLC were also lowered as
follows: MAGI senior notes and senior bank facility to 'CCC' from
'B-' ('B minus'); and MIRMA pass-through certificates series A, B,
and C to 'CCC+' from 'B'. The Rating Watch for all entities has
been revised to Evolving from Negative.

The rating actions reflect the pending subordination of unsecured
creditors and the increased execution risk surrounding the
existing exchange offer for certain of the unsecured obligations
of MIR and MAGI. The exchange offer affects the $750 million
convertible debentures put-able in 2004, and $200 million 7.4%
senior notes due in 2004 at MIR and $500 million senior notes due
in 2006 at MAGI. At the same time, the exchange offer requires
agreement on a restructuring of bank facilities, to replace
existing facilities at MIR and MAGI with a total of $3.15 billion
in facilities at MIR and a total of $300 million at MAGI. A waiver
has been granted on existing facilities until July 14, 2003.

Within the speculative grade, Fitch ratings incorporate expected
levels of loss-given-default, or recovery. Since the announcement
of the exchange offer and bank refinancing proposals, Fitch has
concluded a preliminary assessment of the recovery expectations of
unsecured financial creditors to MIR and MAGI. The impact of the
resultant subordination of remaining unsecured creditor classes at
both entities, should the exchange offer and refinancing succeed,
would indicate a lower rating than previously assigned, reflecting
the reduction of collateral cover for unsecured creditors. As
previously noted, should the exchange offer or bank refinancing
not succeed, it is highly likely that MIR would enter bankruptcy,
and the current ratings would fall further.

In addition, though of secondary importance in the current rating
action, execution risk on the exchange offer and refinancing has
heightened, in Fitch's opinion, following the technical event of
default notice received by MAGI from Lehman Brothers Commercial
Paper, Inc. on June 6, 2003. The default notice relates to the
failure of MAGI to deliver financial statements and related
officer certificates for the financial quarter ended March 31,
2003, a requirement under two existing MAGI credit facilities.
Mirant has expressed confidence in its ability to deliver these
documents within the 30-day grace period.

A lawsuit has also been filed by a group of MAGI noteholders
objecting to the exchange offer. While the judge for the suit
declined to hold a hearing prior to the final date for the
exchange offer and stated that a trial date would be set later
this year, the filing of the suit indicates greater resistance on
the part of some creditors to the company's financial
restructuring plan.


MISSISSIPPI CHEMICAL: Employs Vinson & Elkins as Special Counsel
----------------------------------------------------------------
Mississippi Chemical Corporation and its debtor-affiliates sought
and obtained approval from the U.S. Bankruptcy Court for the
Southern District of Mississippi to employ Vinson & Elkins, LLP as
their Special Counsel.

The Debtors seek to employ Vinson & Elkins to continue its
prepetition work and:

     a. advise and consult with the Debtors concerning general
        corporate representation, including but not limited to
        matters involving asset dispositions, and negotiation
        and enforcement of leases and contracts, corporate
        financing issues, restructuring and tax advice,
        securities advice and other representation necessary to
        conducting business;

     b. appear in, prosecute or defend suits and proceedings,
        and to take all necessary and proper steps in other
        matters and things involved in or connected with the
        affairs of the estate of the Debtors;

     c. represent the applicants in court hearings and to assist
        in the preparation of contracts, reports, accounts,
        petitions, applications, orders and other papers and
        documents as may be necessary in this proceeding: and

     d. advise and consult with applicants in connection with
        any reorganization plans which may be proposed in these
        proceedings and any matters concerning applicants which
        arise out of or follow the acceptance or consummation of
        such reorganization or its rejection.

The primary Vinson & Elkins attorneys who are presently designated
to represent the Debtors and their current hourly rates are:

      Alan J. Bogdanow           $475 per hour
      William D. Young           $450 per hour
      A. Lamar Youngblood        $325 per hour
      Robert B. Little           $295 per hour

Mississippi Chemical Corporation, through its direct or indirect
subsidiaries and affiliates, produces and markets all three
primary crop nutrients (nitrogen-phosphorus and potassium-based
products), as well as similar chemicals for industrial uses. The
Company filed for chapter 11 protection on May 15, 2003 (Bankr.
S.D. Miss. Case No. 03-02984).  James W. O'Mara, Esq., at Phelps
Dunbar LLP represents the Debtors in their restructuring efforts.  
When the Company filed for protection from its creditors, it
listed $552,9342,000 in total assets and $462,496,000 in total
debts.


MOLECULAR DIAGNOSTICS: Financial Restructuring Nears Completion
---------------------------------------------------------------
Molecular Diagnostics, Inc. (OTC: MCDG) reiterated its schedule
for initiating the second stage of its clinical trial intended to
result in FDA submission for its groundbreaking InPath System
later this year. Largely predicated on the Company completing its
financial restructuring, the second stage of the clinical study is
an extension of the first stage that was completed in the 4th
quarter of 2002 that was based on over 3,000 patient samples. In
that study, the InPath System outperformed all alternative methods
of cervical cancer screening, including both manual and automated
Pap testing, HPV DNA testing, and visual inspection.

"Our preliminary study clearly demonstrated InPath's potential,"
stated Peter Gombrich, MDI's Chairman and CEO. He continued, "As a
fully automated, low-cost methodology to screen for cervical
cancer, we are ecstatic that our use of bio-molecular technology
is outperforming the best medicine has to offer today, and we look
forward to completing our clinical trial so as to submit the
system for FDA approval later this year. A low-cost, automated and
potentially point-of-care test for cervical cancer will go a long
way to eliminating this disease as a primary cause of death, as
discussed in this past Sunday's New York Times special insert
section on "Gynecological Cancer-What Every Woman Should Know."
The articles in this section can be found at http://www.wcn.org

In a related comment, Mr. Gombrich reiterated that the Company's
financial restructuring is proceeding towards completion in the
coming months, including filing of the Company's Form 2002 10-K
annual report with the SEC early next week and Form 10-Q Quarterly
Report for the three months ended March 31, 2003 soon thereafter.
He commented, "The economic climate we have been operating in for
the past year is the most difficult I've ever seen. The fact that
we are completing this fund-raising initiative is a testament to
the foundation of technology, and business design we have at MDI."

The Company also reiterated its planned expansion of the
commercialization of its proprietary AcCell microscopy platform
both with, and independent of its Samba software suite, and to
embark on launch of Samba's Telemedicine business in North
America.

The Company's technology portfolio is unique in that it not only
consists of the 3 critical elements necessary to automate
diagnostic testing - hardware, software, and biochemistry - but
also provides unique capabilities within each of those
technologies themselves. In the case of the AcCell microscopy
platform, it offers the most cost-effective automated microscopy
platform in the industry. "With the proprietary AcCell 3000
becoming available later this year, the industry will be even more
impressed by our price-performance metric," Mr. Gombrich added.

The Company also indicated that discussions with several potential
strategic partners to embark on Samba's launch of the Telemedicine
system in North America were progressing quickly. The Samba
Telemedicine system is unique in the industry. While Samba is
often compared to PACS solutions marketed for millions of dollars
in the radiology department, Samba offers a unique capability to
expand image capture, management, communication, and security
outside the radiology department, to the entire spectrum of care
via the Internet, or dedicated secure networks.

"The recent activity undertaken by both the government, and the
healthcare industry to expand Telemedicine nationally as a means
of reducing costs, and enhancing care delivery is perfectly timed
for Samba's launch," Mr. Gombrich mentioned. He continued, "With
over 100 users in Europe already utilizing Samba in real-time to
improve the effectiveness of care delivery, it is time we bring
these benefits to North America, and allow US and Canadian
healthcare enterprises to realize these benefits. We are excited
to commence this initiative with the right partner, with whom we
are in discussions now."

Molecular Diagnostics develops cost-effective cancer screening
systems, which can be utilized in a laboratory or at the point-of-
care, to assist in the early detection of cervical,
gastrointestinal, and other cancers. The InPath(TM) System is
being developed to provide medical practitioners with a highly
accurate, low-cost, cervical cancer screening system that can be
integrated into existing medical models or at the point-of-care.
Other products include SAMBA(TM) Telemedicine software used for
medical image processing, database and multimedia case management,
telepathology and teleradiology. Molecular Diagnostics also makes
certain aspects of its technology available to third parties for
development of their own screening systems.

More information is available at: http://www.Molecular-Dx.com  

As reported in Troubled Company Reporter's April 10, 2003 edition,
Molecular Diagnostics, Inc., signed an agreement with Greenwood
Village, Colorado based Bathgate Capital Partners LLC to provide a
broad range of financial and investment banking services. MDI has
worked with BCP previously on a project-to-project basis, and
based on that success, as well as BCP's experience in the in vitro
diagnostics industry, has opted to solidify the relationship for
the long term.

Molecular Diagnostics' September 30, 2002 balance sheet shows a
working capital deficit of about $12 million, and a total
shareholders' equity deficit of about $4 million.


MOONEY AEROSPACE: Makes All Required Report Filings with SEC
------------------------------------------------------------
Mooney Aerospace Group, Ltd (OTCBB:MASG) has brought current all
of its required filings with the Securities and Exchange
Commission, including its Form 10K for the year ending
December 31, 2002, and its Form 10Q for the quarter ending March
31, 2003. As a result, effective June 26, 2003, the OTCBB has
changed its symbol to: "MASG".

J. Nelson Happy, President of Mooney Aerospace Group, Ltd.,
stated: "It took a lot of hard work to get our financial filings
current. We had been delayed by the move from Long Beach,
California to Kerrville, Texas, and our change of audit firms.
However, we are now current and we plan to stay that way. Further,
our financial restructuring which was previously announced has
been completed, thus we feel we have accomplished two important
milestones in the past few weeks."

On June 12, 2003 the Company announced that it had reached
agreement and implemented a restructuring plan with all of its
convertible note holders to waive all outstanding defaults and set
fixed note conversion prices. The floating conversion features
have been deleted. In connection with the restructuring, the
Company has already received more than $5,000,000 of new funding
and has commitments for additional funding which the Company
intends to close in the near future.

The conversion price for the holders of secured notes is half of
the conversion price set for holders of unsecured convertible
notes and the holders of preferred stock. All of the convertible
note holders have waived all prior defaults, including all accrued
damages, and have also agreed to cancel all outstanding warrants
held by them. In addition, the unsecured note holders have
extended the maturity date of the unsecured notes by three years
to June 2006. The interest rate on the notes has been reduced from
8% to 3% that will result in substantial savings to the Company.

Mr. Happy stated: "We are pleased to have this restructuring
behind us, and gratified by the confidence shown by our investors,
both old and new, by taking this step. We believe that this
restructuring will go a long way to insure the company's future by
helping to clean up its capital structure. Not many companies get
a second chance from their investors like the one we have just
received, and we hope to make the most of this opportunity for the
Company and its shareholders." The Company has filed a Form 8-K
detailing the transaction.

Mooney Aerospace Group, Ltd. is a general aviation holding company
that owns Mooney Airplane Co., located in Kerrville, Texas. Mooney
currently sells three models; the highest performing four-place
single engine piston powered aircraft, the Bravo DX, and its
companions, the highly rated Ovation2 DX, and the economical
Ovation. Mooney is celebrating is 50th Anniversary in Kerrville,
Texas this year, where it has manufactured more than 10,000
aircraft which have been delivered worldwide. Complete information
about Mooney aircraft is available at http://www.Mooney.com  

As reported in Troubled Company Reporter's June 19, 2003 edition,
Mooney Aerospace Group reached agreement and implemented a
restructuring plan with all of its convertible note holders to
waive all outstanding defaults and set fixed note conversion
prices. The floating conversion features have been removed. In
connection with the restructuring, the Company has received more
than $5,000,000 of new funding.


NATIONAL EQUIPMENT: Files for Chapter 11 Reorganization
-------------------------------------------------------
National Equipment Services, Inc. (OTC Bulletin Board: NEQS), a
leading provider of specialty and general equipment to
construction and industrial end-users, said that in order to
reduce its debt and strengthen its competitive position, the
Company and its domestic subsidiaries have filed voluntary
petitions for a reorganization under Chapter 11 of the U.S.
Bankruptcy Code, and that the Company has received the support
from the Steering Committee of its existing bank group through an
agreement in principal with respect to the major elements of a
restructured credit facility to provide exit financing upon
emergence.

NES has also received a commitment for up to $30 million in
debtor-in-possession (DIP) financing led by Wachovia Bank,
National Association, that will be used, if necessary, to fund
post-petition operating expenses and to meet supplier and employee
obligations.

President and Chief Executive Officer Joseph Gullion said, "NES is
a solid company. It has a good portfolio of rental equipment, an
excellent group of employees, and plenty of opportunities to grow.
Unfortunately, it has too much debt and the balance sheet needed
to be fixed. While our company generates a lot of cash from
operations, it was not enough to repay our debt maturity
obligations under our existing Credit Agreement, which is
scheduled to mature in July 2003."

The principal elements of the exit facility include extending the
maturity of the bank debt for up to four years. The restructured
facility also contemplates the conversion of the outstanding
senior subordinated notes due 2004 into substantially all of the
outstanding equity, which will reduce the total debt of the
company by $275 million. The Company has been in discussions with
an ad hoc committee of holders of the senior subordinated notes,
which the Company intends to continue following the filing. The
Company expects to file a reorganization plan in the next few
weeks. The Company contemplates that the plan will provide that a
substantial portion of the Company's trade vendors will be paid in
full following completion of the bankruptcy proceedings.

NES is the fourth largest Company in the $25 billion equipment
rental industry. The Company focuses on renting specialty and
general equipment to industrial and construction end-users. It
rents more than 750 types of machinery and equipment, and
distributes new equipment for nationally recognized original
equipment manufacturers. NES also sells used equipment as well as
complementary parts, supplies and merchandise, and provides repair
and maintenance services to its customers. In addition to the
rental business NES is the second largest supplier of traffic and
safety services to the construction industry. The company is a
leading competitor in each geographic market it reaches, from its
approximately 180 locations in 34 states and Canada.


NATIONAL STEEL: Joint Liquidating Chapter 11 Plan Overview
----------------------------------------------------------
On June 20, 2003, National Steel Corporation and its debtor-
affiliates delivered to the Court their Joint Plan of Liquidation
under Chapter 11 and a Disclosure Statement, pursuant to Section
1125 of the Bankruptcy Code, explaining their Plan.

                  Overview and Summary of the Plan

The Plan provides for the Debtors' orderly liquidation, because
substantially all of their operating assets were sold as part of
the Sale.  There are 42 distinct legal entities that are being
liquidated pursuant to the Plan.  The Plan does not provide for
the consolidation of these entities, and accordingly, the Plan
comprises separate liquidating plans for each Debtor's Estate.

The Plan contemplates that all remaining assets will be disposed
of, all cash proceeds will be distributed to creditors, and all
administrative tasks required to complete the wind-down of the
Debtors' estates and their ultimate dissolution will be
completed.  In addition, the Plan sets forth how net Cash
proceeds available for distribution to various creditor
constituencies will be allocated and paid.

                   $1 Billion in Cash in the Bank

The Debtors received $1,000,500,000 from the sale of
substantially all of their assets to United States Steel
Corporation.  The Debtors' estates now consist of cash, certain
miscellaneous remaining assets, and causes of action against
third parties.

The vast majority of the assets and liabilities are owned by
three Debtors -- National Steel, National Steel Pellet Company
and ProCoil Corporation.  All other Debtors either have no
material assets to distribute to their creditors or have no
material prepetition creditors.

Under the Plan, the Debtors are divided into five groups for
classification, treatment and distribution purposes:

(1) National Steel Corporation

(2) NS Pellet

(3) ProCoil

(4) Inactive Debtors

     * D.W. Pipeline                   * National Ontario II
     * Granite Intake                  * National Pickle
     * Ingleside Dock                  * NC Operating
     * Ingleside Holdings              * NM Procurement Corp
     * Ingleside Point                 * NS Holdings
     * Natcoal                         * NS Land
     * Natland                         * NSC Realty
     * National Casting                * Rostraver
     * National Coating Limited        * Teal Lake
     * National Coating Line

(5) No Asset Debtors

     * American Steel                  * National Ontario I
     * Granite City Steel              * NC Acquisition
     * Great Lakes Steel               * NS Funding
     * Hanna Furnace                   * NSC (NY)
     * Hanna Ore                       * NSL
     * Liberty                         * NS Technologies
     * Mid-Coast Minerals              * Peter White Coal
     * Midwest Steel                   * Puritan
     * National Acquisition            * Skar-Ore
     * National Coal                   * National Mines

Inactive Debtors have some de minimis assets, but were never
operating companies or were operating companies which have not
had material operations for an extended period of time.  The
Debtors do not believe that any of the Inactive Debtors have any
material prepetition creditors with claims still unresolved by a
settlement.  The Debtors determined that claims filed against
each Inactive Debtor either were not proper or were being settled
outside the scope of the Plan.

The No Asset Debtors have no material distributable assets.  Some
of these Debtors have liabilities and creditors.  Because none of
them have any assets available for distribution under the Plan,
no holders of Claims against any of the No Asset Debtors will
receive any distribution under the Plan.

                     Cancellation of Securities

Under the Plan, the Debtors' securities are cancelled:

(1) Class A Common Stock

     As of the Petition Date, the Debtors had 30,000,000 shares of
     $0.01 par value Class A Common Stock authorized, of which
     22,100,000 shares were issued and outstanding and owned by
     NKK U.S.A. Corporation.  Each share of Class A Common Stock
     is entitled to two votes.  As a result of its ownership of
     the Class A Common Stock, NKK U.S.A. controls 69.7% of the
     voting rights of all National Steel common stock.  All of the
     equity will be cancelled under the Plan.

(2) Class B Common Stock

     The Debtors had 65,000,000 shares of $0.01 par value Class B
     Common Stock authorized, 21,188,240 shares issued and
     19,188,240 outstanding net of 2,000,000 shares of Treasury
     Stock.  All of the issued and outstanding shares of Class B
     Common Stock are publicly held and listed for trading on the
     New York Stock Exchange.  Each share of the Stock is entitled
     to one vote.  All equities will be cancelled under the Plan.

                       The Plan Administrator

From and after the Effective Date, an entity or person to be
designated by the Debtors before the Confirmation date will serve
as the Plan Administrator pursuant to a Plan Administrator
Agreement and the Liquidation Plan, until death, resignation or
discharge and the appointment of a successor Administrator.

The Reorganized Debtors will retain and have all the rights,
powers and duties necessary to carry out their responsibilities
under the Plan.  These rights and duties, which will be
exercisable by the Plan Administrator on behalf of a Reorganized
Debtor pursuant to the Plan and the Plan Administrator Agreement,
and as an estate representative pursuant to Section 1123(b) of
the Bankruptcy Code, will include:

(A) investing the Reorganized Debtors' Cash, including the Cash
     held in any operating account or segregated account in:

       (i) direct obligations of the United States or obligations
           of any agency which are guaranteed by the full faith
           and credit of the United States;

      (ii) money market deposit accounts, checking accounts,
           savings accounts or certificates of deposit, or other
           time deposit accounts that are issued by a commercial
           bank or savings institution organized under U.S. laws;
           or

     (iii) any other investments that may be permissible under
           Section 345 of the Bankruptcy Code or any order entered
           by Court in the Debtors' Chapter 11 cases;

(B) calculating and paying all distributions to be made under the
     Plan, the Plan Administrator Agreement and other orders of
     the Bankruptcy Court to holders of Allowed Claims;

(C) employing, supervising and compensating professionals
     retained to represent the interests of, and serve on behalf
     of, the Reorganized Debtors;

(D) making and filing tax returns for any of the Debtors or
     Reorganized Debtor;

(E) objecting to Claims or Interests filed against any of the
     Debtors' Estates on any basis;

(F) seeking estimation of contingent or unliquidated claims under
     Section 502(c) of the Bankruptcy Code;

(G) seeking determination of tax liability under Section 505 of
     the Bankruptcy Code;

(H) prosecuting avoidance actions under Sections 544, 545, 547,
     548, 549, 550 and 553;

(I) prosecuting turnover actions under Sections 542 and 543;

(J) prosecuting, settling, dismissing or otherwise disposing of
     the Litigation Claims;

(K) dissolving the Reorganized Debtors as and if necessary or
     appropriate;

(L) exercising all powers and rights, and taking all actions,
     contemplated by or provided for in the Agreement;

(M) coordinating, cooperating and reporting to the Plan
     Committee;

(N) filing any necessary post-confirmation reports with the
     Court, paying quarterly fees pursuant to 28 U.S.C. Section
     1930(a)(6) for each of the Debtors until a final decree is
     entered for each Debtor, and filing a final report pursuant
     to Rule-5009-1(c) of the Local Rules of the Northern District
     of Illinois Bankruptcy Court before the final decree for any
     Debtors is entered; and

(O) taking all other actions necessary or appropriate to
     implement or consummate the Plan and the provisions of the
     Agreement.

                       Creditor Settlements

In conjunction with the Sale, the Debtors and their creditors
reached agreements on the allocation and payment of Sale
proceeds, and proceeds to be obtained from the remaining assets,
to the Debtors' various creditor constituencies.

A number of settlements were negotiated to settle disputes
between the Debtors and the various Committees arising as a
result of the Sale process:

                 (1) The Intercreditor Settlement

Under this settlement, at the closing of the Sale:

    (a) the holders of the First Mortgage Bonds received
        $231,800,000 payment in cash;

    (b) Mitsubishi and Marubeni were paid, collectively on
        account of the M&M Secured Loans, $77,420,000 in cash;

    (c) Mitsubishi and Marubeni consented to the assumption and
        assignment of the M&M Leveraged Lease and payment of a
        1,000,000 cure claim to U.S. Steel; and

    (d) $25,000,000 was agreed to be set aside for holders of
        General Unsecured Claims.

The Debtors inform the Court that Cash proceeds were also
segregated on account of various tax and mechanic's lien claims
that the taxing authorities or claim holders have alleged are
secured claims that must be paid in full, pending either a
settlement or litigation of disputes.

The Debtors relate that these payments resulted in the
prepetition Claims of the First Mortgage Bond holders being paid
67% and the prepetition Claims of Mitsubishi and Marubeni being
paid 62% on the M&M Secured Loans.  Sale proceeds were also used
to repay the DIP Loan in full.  Remaining Sale proceeds retained
by the Debtors are sufficient to pay all remaining Secured
Claims, as well as all Administrative and Priority Claims, that
the Debtors estimate will become Allowed.

                     (2) The PBGC Settlement

The PBGC asserted claims in excess of $2,100,000,000 against each
Debtor.  The PBGC also asserted priority and Administrative Claim
status for all these Claims.  The PBGC had liens on assets of
certain non-Debtor affiliates, which assets were to be sold to
U.S. Steel.  To settle disputes regarding these issues, in full
settlement of all alleged PBGC Administrative and Priority
Claims, the PBGC was paid $30,000,000 in cash at the closing of
the Sale.

The parties also agreed that PBGC would be granted a single
Allowed General Unsecured Claim for 2,100,000,000 and would forgo
distributions under the Plan on account of the Claims until other
General Unsecured Claim holders received a 1.5% recovery.  This
agreement ensured that other General Unsecured Claimholders will
receive some initial recovery before the PBGC's Allowed Claim
begins to share ratably in the distribution of funds.

                      (3) The USWA Settlement

A key aspect of the Sale was that U.S. Steel was required to
reach agreement on a new collective bargaining agreement with the
United Steelworkers of America.  In conjunction with that
agreement, the USWA agreed to waive all Administrative Claims it
might assert under its collective bargaining agreements with the
Debtors.  It is anticipated that the USWA will have a significant
Allowed General Unsecured Claim, and will share ratably in
distributions available under the Plan to holders of General
Unsecured Claims against National Steel.

                      Dissolution of Committee

The Creditors' Committee will be dissolved on the Effective Date
and its members will be deemed released of all their duties,
responsibilities and obligations in connection with the Chapter
11 cases or the Plan.  In its place, the Plan provides for the
formation of an Unsecured Creditors' Representative on the
Effective Date, pursuant to 11 U.S.C. 1123(b)(3)(B).  The Estate
Representative will consist of not more than three Creditors'
Committee members who will be appointed by the Committee and
whose identities will be disclosed to the Court at or before the
Confirmation Hearing.  In the event that no one is willing to
serve on the Representative for a 30-day period, then the Plan
Administrator may ignore any references to the Unsecured
Creditors Representative's ongoing duties and rights found in the
Plan and will consider them null and void.

The Representative will be responsible for:

    (a) representing the General Unsecured Claim holders'
        interests in the wind-down of the Debtors' Estates;

    (b) reviewing the prosecution of adversary and other
        proceedings; and

    (c) reviewing objections to proposed settlements of disputed
        Claims.

The Representative will remain in existence until the final
distributions under the Plan have been made by the Debtors.  The
members will serve without compensation for their performance but
will be entitled to reimbursement of all reasonable expenses from
the Overall Unsecured Creditor Recovery Pool, which consists of
$25,000,000 plus 20% of the Reorganized Debtor Net Available
Cash.

                    Term of Injunctions or Stays

All injunctions or stays provided for in the Chapter 11 Case
under Section 105 or 362 of the Bankruptcy Code will remain in
full force and effect until the Effective Date.

                      Feasibility of the Plan

The Debtors assert that the Joint Plan meets the "feasibility
requirements" under Section 1129(a)(11) of the Bankruptcy Code.
The Debtors believe that the amount of proceeds from the U.S.
Steel Sale will be sufficient to pay all Administrative and
Priority Claims that become allowed, based on their estimates.

                    Disclosure Statement Hearing

Judge Squires will hold a hearing to consider the Plan Disclosure
Statement on August 19, 2003 at 8:30 a.m. in Chicago.  At the
hearing, Judge Squires will consider whether the Disclosure
Statement contains adequate information within the meaning of
Section 1125 of the Bankruptcy Code and gives creditors the right
amount of the right kind of information in order to make an
informed decision about whether to vote to accept or reject the
Plan. (National Steel Bankruptcy News, Issue No. 31; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


NEWPORT INTERNATIONAL: Auditor Rachlin Cohen Walks Away
-------------------------------------------------------
On May 29, 2003, Newport International Group Inc., received a
letter from Rachlin Cohen & Holtz LLP, its auditors, confirming
that the client-auditor relationship between the Company and
Rachlin Cohen & Holtz LLP had ceased. In addition, in a letter
addressed to the Company's Board of Directors, Rachlin Cohen &
Holtz LLP claimed that the Company's Form  10-QSB for the third
quarter of the year ended December 31, 2002 and the first quarter
of the year ended December 31, 2003 [sic] financial statements
were not reviewed by Rachlin Cohen & Holtz LLP.  In response, the
Company filed amendments to the respective Form 10-QSB to correct
the disclosure concerning the fact that the financial statements
were not reviewed by Rachlin Cohen & Holtz LLP.  The Company plans
to have another independent certified public accounting firm
conduct the  required review at a practicable date.

Rachlin Cohen & Holtz's report on the financial statements for the
past two years was modified for a going concern issue.

Due to the relatively short period of notice from Rachlin Cohen &
Holtz LLP, the Board of Directors of Newport International Group
has not had an opportunity to consider the resignation. Management
has had discussions with  and intends to retain new independent
accountants as soon as possible.


NORTEL NETWORKS: Board Declares Preferred Share Dividends
---------------------------------------------------------
The board of directors of Nortel Networks Limited declared 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 amount of which for each series will be
calculated by multiplying (a) the average prime rate of Royal Bank
of Canada and Toronto-Dominion Bank during July 2003 by (b) the
applicable percentage for the dividend payable for such series for
June 2003 as adjusted up or down by a maximum of 4 percentage
points (subject to a maximum applicable percentage of 100 percent)
based on the weighted average trading price of the shares of such
series during July 2003, in each case as determined in accordance
with the terms and conditions of such series. The dividend on each
series is payable on August 12, 2003 to shareholders of record of
such series at the close of business on July 31, 2003.

Nortel Networks is an industry leader and innovator focused on
transforming how the world communicates and exchanges information.
The company is supplying its service provider and enterprise
customers with communications technology and infrastructure to
enable value-added IP data, voice and multimedia services spanning
Wireless Networks, Wireline Networks, Enterprise Networks and
Optical Networks. As a global company, Nortel Networks does
business in more than 150 countries. More information about Nortel
Networks can be found on the Web at http://www.nortelnetworks.com  

As previously reported, Moody's Investors Service lowered the
senior secured and senior implied ratings on the securities of
Nortel Networks Corp., and its subsidiaries to B3 and Caa3 from
Ba3 and B3 respectively.

Outlook is negative.

Nortel Networks Ltd.'s 6.125% bonds due 2006 (NT06CAN1) are
trading at about 95 cents-on-the-dollar, says DebtTraders. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NT06CAN1for
real-time bond pricing.


NORTHWEST AIRLINES: S&P Equity Analyst Raises Opinion to 'Hold'
---------------------------------------------------------------
Standard & Poor's airline equity analyst increased the equity
STARS ranking on the shares of Northwest Airlines from a two-STARS
"Avoid" to a three-STARS "Hold": Northwest Airlines (Nasdaq: NWAC)
at $11.20. A leading provider of independent research, indices and
ratings, Standard & Poor's made this announcement through Standard
& Poor's MarketScope, its real-time market intelligence service.

"With passenger demand picking up somewhat, we think investor
sentiment toward airline stocks has shifted, resulting in bargain-
hunting in the battered airline sector. We believe this is a big
part of the reason that the S&P Airline Index is up 15.3% this
year," says Jim Corridore, Airline Equity Analyst, Standard &
Poor's. "While we believe AMR, Northwest and Continental are
likely to continue to lose money and underperform better-
positioned, lower-cost competitors, the improved airfare
environment could lead to lower losses and upside to loss targets.
Also, AMR's liquidity position has stabilized; this should make
near-term bankruptcy less likely," concludes Corridore.

Standard & Poor's Stock Appreciation Ranking System (STARS), which
was first introduced on December 31, 1986, reflects the opinions
of Standard & Poor's equity analysts on the price appreciation
potential of 1,200 U.S. stocks for the next 6-12 month period.
Rankings range from five-STARS (strong buy) to one-STARS (sell).

Standard & Poor's analytic services are performed as entirely
separate activities in order to preserve the independence of each
analytic process. In this regard, STARS, which are published by
Standard & Poor's Equity Research Department, operates
independently from, and has no access to information obtained by
Standard & Poor's Credit Market Services, which may in the course
of its operations obtain access to confidential information.

Standard & Poor's has the largest U.S. equity coverage count among
equity research firms that are not affiliated with a Wall Street
investment bank, analyzing 1,200 U.S. stocks. Standard & Poor's, a
division of The McGraw-Hill Companies (NYSE: MHP), is a leader in
providing widely recognized financial data, analytical research
and investment and credit opinions to the global capital markets.
With 5,000 employees located in 19 countries, Standard & Poor's is
an integral part of the world's financial architecture. Additional
information is available at http://www.standardandpoors.com

Northwest's latest balance sheet shows that the carrier is
insolvent, with liabilities exceeding assets by $2 billion.  


NRG ENERGY: Secures Interim Approval for Kirkland's Engagement
--------------------------------------------------------------
NRG Energy, Inc., and its debtor-affiliates obtained interim Court
approval on its motion to employ Kirkland & Ellis as their counsel
in connection with the commencement and prosecution of their
Chapter 11 cases and all related matters pursuant to Sections
327(a) and 328(a) of the Bankruptcy Code and Rule 2014(a) of the
Federal Rules of Bankruptcy Procedure.

As counsel, Kirkland will:

    (a) advise the Debtors with respect to their powers and
        duties as debtors in possession in the continued
        management and operation of their businesses and
        properties;

    (b) attend meetings and negotiate with representatives of
        creditors and other parties-in-interest;

    (c) take all necessary action to protect and preserve the
        Debtors' estates, including prosecuting actions on the
        Debtors' behalf, defending any action commenced against
        the Debtors and representing the Debtors' interests in
        negotiations concerning all litigation in which all the
        Debtors are involved, including, but not limited to,
        objections to claims filed against the estates;

    (d) prepare on the Debtors' behalf all motions,
        applications, answers, orders, reports, and papers
        necessary to the administration of the estates;

    (e) negotiate and prepare on the Debtors' behalf a plan of
        reorganization, disclosure and statement, and all
        related agreements or documents, and take any necessary
        action on the Debtors' behalf to obtain confirmation of
        the plan;

    (f) represent the Debtors in connection with obtaining
        postpetition loans;

    (g) advise the Debtors in connection with any potential sale
        of assets;

    (h) appear before this Court, any appellate courts and the
        United States Trustee and protect the interests of the
        Debtors' estates before those courts and the United
        States Trustee;

    (i) consult with the Debtors regarding tax matters, and

    (j) perform all other necessary legal services and provide
        all other necessary legal advice to the Debtors in
        connection with the Chapter 11 cases.

In exchange for the professional services, Kirkland will charge
the Debtors hourly rates consistent with the rates Kirkland
charges in bankruptcy and non-bankruptcy matters of this type.
Kirkland's hourly rates are set at a level designed to fairly
compensate the firm for the work of its attorneys and paralegals
and to cover fixed and routine overhead expenses.  Hourly rates
vary with the experience and seniority of the individuals
assigned.  The hourly rates are subject to periodic adjustments,
without further notice to the Court or any other entity, to
reflect economic and other conditions and are consistent with
the rates charged in non-bankruptcy cases.

Furthermore, it is Kirkland's policy to charge its clients in
all areas of practice for all expenses incurred in connection
with a client's case.  The expenses charged to clients include,
among other things, photocopying, witness fees, travel expenses,
including certain secretarial and other overtime expenses,
filing and recording fees, long distance telephone calls,
postage, express mail and messenger charges, computerized legal
research charges and other computer services, expenses for
"working meals" and telecopier charges.  Kirkland will charge
the Debtors for these expenses in a manner and at rates
consistent with those it generally charges its other clients.
(NRG Energy Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


PRIMEDIA INC: Names Dave Ellett Pres./CEO of Workplace Learning
---------------------------------------------------------------
PRIMEDIA Inc. (NYSE: PRM), the leading targeted media company, has
promoted Dave Ellett, currently Chief Operating Officer, to
President and CEO of PRIMEDIA Workplace Learning.  In his new
role, Ellett will lead the company and oversee PRIMEDIA's
integrated learning solutions for the industrial, healthcare,
banking, automotive, fire & emergency, government, law enforcement
and the private security markets. Ellett replaces former CEO Josh
Klarin, who is leaving the company.

Mr. Ellett has extensive experience in the training and education
field. He spent 13 years at EDS in the training and education
division and then at Oracle, he managed the company's worldwide
education business line as well as all internal training.  Before
joining PRIMEDIA, Dave was Chairman and CEO of Docent, Inc, a
leading e-learning company in the Global 2000 market.

"Dave brings the requisite skills and experience critical to
Workplace Learning and is the right executive to lead this
division forward," said Charles McCurdy, President and Interim CEO
of Primedia, Inc.  "We are excited about where the company is
headed and its prospects in the near and long term."

"Workplace Learning is perfectly positioned to be an even bigger
player in our market.  I am enthusiastic about the business and
our potential for growth," said Ellett.

For over 15 years, Workplace Learning has provided integrated
learning solutions for more than 8 million professionals in the
industrial, healthcare, banking, automotive, fire & emergency,
government, law enforcement and the private security markets.  
With innovative content, custom solutions, technology and "any
time/anywhere" delivery training programs, the company provides
the most comprehensive set of offerings including tape, live and
video-on-demand solutions in our markets today.  Workplace
Learning's programs have offered industry leading education
products and services since 1986.

PRIMEDIA is the largest targeted media company with leading
positions in consumer and business-to-business markets.  Our
properties deliver content via print, along with video, the
Internet and live events and offer highly effective advertising
and marketing solutions in some of the most sought after niche
markets.  With 2002 sales from continuing businesses of $1.6
billion, PRIMEDIA is the #1 special interest magazine publisher in
the U.S. with more than 250 titles.  Our well known brands include
Motor Trend, Automobile, New York, Fly Fisherman, Power &
Motoryacht, Ward's Auto World, and Registered Rep. The company is
also the #1 producer and distributor of free consumer guides,
including Apartment Guides.  PRIMEDIA Television's leading brand
is the Channel One Network and About is one of the largest sources
of original content on the Internet.  PRIMEDIA's stock symbol is:
NYSE: PRM.  More information about the company can be found at
http://www.primedia.com

As previously reported in Troubled Company Reporter, Standard &
Poor's Ratings Services revised its outlook on publisher PRIMEDIA
Inc., to stable from negative.

At the same time, Standard & Poor's assigned its 'B' rating to
PRIMEDIA's $300 million, privately placed, Rule 144A senior notes
due 2013. In addition, Standard & Poor's affirmed its 'B'
corporate credit and other outstanding ratings on New York City-
based PRIMEDIA. Total debt and preferred stock as of March 31,
2003, totaled about $2.4 billion.


QWEST: Wins FCC Nod to Re-Enter Long-Distance Business in Minn.
---------------------------------------------------------------
Qwest Communications International Inc. (NYSE: Q) -- whose
December 31, 2002 balance sheet shows a total shareholders' equity
deficit of about $1 billion -- received unanimous approval from
the Federal Communications Commission to re-enter the long-
distance business in Minnesota. Qwest provides local service to
nearly 2.2 million customer lines in the state. With Thursday's
action, Qwest has FCC approval to offer long-distance service
everywhere in its local service territory except Arizona.

"We're pleased that Minnesotans will soon join millions of other
customers in the Qwest region who are enjoying the benefits of
real long-distance competition," said Steve Davis, Qwest senior
vice president of public policy. "We've worked long and hard on
getting region wide approval to re-enter the long-distance
business and we're now one step away from success."

Qwest anticipates launching its long-distance calling plans and
taking customer orders in early July. With Qwest's new long-
distance offerings, the company continues to deliver the Spirit of
Service(TM) through simple pricing, the convenience of one bill
and additional savings for customers who purchase a package of
Qwest services.

"Qwest's competitive long-distance plans have been the clear
choice for over one-million customer lines in 12 states," said
Annette Jacobs, president of Qwest consumer markets group. "Now,
Minnesota customers can add Qwest Long Distance to their suite of
Qwest services; and benefit from the savings, service and
convenience they have come to expect from Qwest."

Qwest has spent more than $3 billion to open its local markets to
competitors and comply with the Telecommunications Act of 1996.
Under the act, Qwest can re-enter the long-distance business in
states in its local service territory once its application to the
FCC has been approved. Qwest plans to file an application for
long-distance authority in its final state, Arizona, within the
next few months.

"We commend the FCC for its comprehensive and exhaustive review of
our long-distance application," Davis added. "Today's approval
confirms that our local markets are open to competition and that
we have met the requirements of the Telecommunications Act of
1996."

Residential and business customers in Qwest's local service
territory could save more than $1 billion annually with Qwest's
re-entry into the regional long-distance business, based on a
study by Professor Jerry A. Hausman, director of the Massachusetts
Institute of Technology Telecommunications Research Program.

Qwest Communications International Inc. (NYSE: Q) is a leading
provider of voice, video and data services to more than 25 million
customers. The company's 50,000 employees are committed to the
"Spirit of Service" and providing world-class services that exceed
customers' expectations for quality, value and reliability. For
more information, visit the Qwest Web site at http://www.qwest.com  


READER'S DIGEST: Lending Syndicate Amends Credit Agreements
-----------------------------------------------------------
The Reader's Digest Association, Inc. (NYSE: RDA) and its
syndicate of lenders have amended its term loan and revolving
credit facility agreements to provide more flexible terms.

"We successfully amended our agreements to achieve greater
flexibility to pursue actions necessary to attain our long-term
financial objectives," said Michael S. Geltzeiler, Senior Vice
President and Chief Financial Officer. The amendments pertain
largely to the "leverage" covenant in both agreements, which
specifies the maximum ratio of the company's debt to EBITDA
(earnings before interest, taxes, depreciation, amortization and
other items specified in the credit agreements). In the third
quarter, EBITDA was adversely affected by restructuring charges
associated with actions taken by the company intended to
strengthen certain businesses.

Under the amended agreements, the company's interest rates are
tied to LIBOR, plus a mark-up. At the company's current credit
ratings, the revised interest rate paid on borrowings will become
LIBOR plus 2.75 percentage points. With LIBOR currently at about 1
percent, the company expects near-term interest rates will remain
considerably below the 5-to-6 percent level anticipated at the
time of the initial borrowing.

The original $950 million in term loan financing was arranged in
2002 in connection with the acquisition of Reiman Publications LLC
and the recapitalization of Reader's Digest stock. During Fiscal
2003, the company plans to repay $85 million in term loan
borrowing, more than twice the required payment of $32 million.
The company expects to pay down $50 million of that amount in the
fourth quarter alone. At year-end, outstanding gross debt is
expected to be approximately $865 million.

The Reader's Digest Association, Inc., is a global publisher and
direct marketer of products that inform, enrich, entertain and
inspire people of all ages and all cultures around the world. The
company's main Web site is at http://www.rd.com Revenues were  
$2.4 billion for the fiscal year ended June 30, 2002. Global
headquarters are located at Pleasantville, New York.

As reported in Troubled Company Reporter's May 2, 2003 edition,
Standard & Poor's Ratings Service placed its 'BB+' corporate
credit rating for Reader's Digest Association Inc. on CreditWatch
with negative implications.

Pleasantville, New York-based Reader's Digest Association
publishes one of the world's highest circulating paid magazines
and is a leading direct marketer of books. Total debt as of
March 31, 2003, was $917 million.


RELIANT RESOURCES: Prices $1.1 Billion of Senior Secured Notes
--------------------------------------------------------------
Reliant Resources, Inc. (NYSE: RRI) priced $1.1 billion of senior
secured notes in a placement with qualified institutional buyers
under rule 144A.  The notes will be placed in two issuances:  $550
million of 9.25% notes due July 15, 2010, and $550 million of
9.50% notes due July 15, 2013.  The notes due in 2010 will be
callable at the company's option beginning on July 15, 2007, and
the notes due in 2013 will be callable at the company's option
beginning on July 15, 2008.  The transaction is expected to close
on July 1, 2003.

The company intends to use the proceeds from the offering of the
notes to repay indebtedness under its existing credit facility.  
This repayment will fully satisfy the only mandatory principal
payment, a $500 million payment due in May 2006, required under
the company's bank refinancing prior to maturity in 2007.  
Additionally, the repayment will satisfy the "soft amortization
targets" in 2004 and 2005, allowing the company to avoid  
associated fees and warrants.

The notes will be offered in the United States to qualified
institutional buyers pursuant to Rule 144A under the Securities
Act of 1933, as amended, and outside the United States pursuant to
Regulation S under the Securities Act. The notes have not been
registered under the Securities Act and may not be offered or sold
in the United States without registration or an applicable
exemption from the registration requirements.

Reliant Resources, Inc., based in Houston, Texas, provides
electricity and energy services to retail and wholesale customers
in the U.S. and Europe, marketing those services under the Reliant
Energy brand name.  The company provides a complete suite of
energy products and services to approximately 1.7 million
electricity customers in Texas ranging from residences and small
businesses to large commercial, industrial and institutional
customers.  Its wholesale business includes approximately 22,000
megawatts of power generation capacity in operation, under
construction or under contract in the U.S.  The company also has
nearly 3,500 megawatts of power generation in operation in Western
Europe.  For more information, visit
http://www.reliantresources.com
    
As reported in Troubled Company Reporter's June 24, 2003 edition,
Standard & Poor's Ratings Services assigned its 'B' rating to
Reliant Resources Inc.'s proposed $350 million senior secured
notes and its 'CCC+' rating to RRI's $225 million convertible
senior subordinated notes. All other ratings on RRI and its
subsidiaries are affirmed.

The outlook is negative, reflecting the continued weak wholesale
power market characterized by low margins, overcapacity, lack of
liquidity, regulatory uncertainty, and uncertain cash flows from
its wholesale asset base, partially offset by its Texas retail
business. The continued negative trend in the wholesale operations
and potential for diminished gross margin in the retail segment
may put pressure on the rating in the foreseeable future.


REMEE PRODUCTS: Bankruptcy Court Auction is Tomorrow Morning
------------------------------------------------------------
Remee Products Corporation, pursuant to an Asset Purchase
Agreement, is selling substantially all of its assets, and
assuming and assigning certain executory contracts and unexpired
leases to Remee Acquisition, Inc., an entity controlled by Elias
Muhlrad, the President and shareholder of the Debtor. The sale is
subject to higher and better offers.   

The Debtor is soliciting higher and better offers by means of an
auction governed by the terms and conditions of the Auction and
Overbid Procedures approved by the U.S. Bankruptcy Court for the
Southern District of New York. The Auction Sale will be conducted
at the S.D.N.Y. Bankruptcy Court tomorrow, at 10:30 a.m. local
time.  A hearing to seek approval of the sale of the Assets will
take place after the Auction Sale.

Remee Products Corporation filed for Chapter 11 protection on
November 14, 2002, (Bankr. S.D.N.Y. Case No. 02-37706). Lawrence
M. Klein, Esq., at Drake, Sommers, Loeb, Tarshis, Catania &
Liberth, PLLC represents the Debtor in its liquidating efforts.   


REXNORD: Reports Slight Earnings Decline for Fiscal 4th Quarter
---------------------------------------------------------------
Rexnord Corporation, a leading manufacturer of highly engineered
mechanical power transmission components, reported its summary
results for the fourth quarter and fiscal year ended March 31,
2003. As noted in the Consolidated Financial Statements, the
acquisition of Rexnord on November 25, 2002, resulted in a new
basis of accounting for Rexnord. In some cases, for ease of
comparison purposes, financial data for the period from inception,
November 25, 2002, through March 31, 2003 has been added to
financial data for the period from April 1, 2002 through
November 24, 2002, to arrive at a 12-month combined period ended
March 31, 2003. This combined data may be referred to herein as
fiscal year 2003, fiscal 2003 or 2003.

Net sales for the fourth quarter of fiscal year 2003 were $189.9
million, a decrease of $5.5 million, or 2.8%, from the fourth
quarter of fiscal year 2002. Changes in exchange rates added $8
million to net sales as compared to the fourth quarter of the
prior year. The decline in net sales in the quarter was primarily
due to lower sales of aerospace products to a severely contracted
aerospace industry, and generally slowing economic conditions in
the manufacturing sector in the U.S.A. caused by low levels of
domestic capital spending and capacity utilization rates.
Partially offsetting the sales decline in the quarter was improved
sales to the food and beverage industry as compared to the fourth
quarter of 2002.

Net sales of $721.8 million for fiscal year 2003 were essentially
flat with prior year sales of $722.2. Fiscal 2003 sales were
favorably impacted by $23 million of changes in currency exchange
rates, principally related to the Euro, from those in effect
during fiscal 2002. Net sales of power transmission products
improved in fiscal 2003 as a result of higher replacement sales
activity and increased demand in the food and beverage industries
resulting from increases in capital spending. Offsetting this
increase, sales of aerospace products declined due to the
continued contraction in the commercial airframe industry and
sales of industrial chain products declined principally as a
result of a decision to discontinue the manufacture of
unprofitable products as well as a decline in the construction,
agricultural equipment and cement markets.

Income from operations (before restructuring charges) decreased by
$2.4 million, to $26.7 million for the fourth quarter of fiscal
year 2003 from $29.1 million for the fourth quarter of fiscal year
2002, primarily as a result of lower sales in the quarter. For the
fiscal year 2003, income from operations (before restructuring
charges) increased by $9.7 million on flat sales due primarily to
the elimination of goodwill amortization.

Net income decreased to $8.9 million for the fourth quarter of
fiscal year 2003 from $11.9 million for the fourth quarter of
fiscal year 2002. Interest expense increased by $8.0 million to a
total of $11.8 million for the current quarter as compared to $3.8
million in the fourth quarter of 2002 due to higher debt balances
incurred in the acquisition of the Rexnord Group on November 25,
2002. Net income for the fiscal year 2003 was $29.9 million, an
improvement of $38.4 million from the loss of $8.5 million for
fiscal year 2002.

Adjusted EBITDA for the fourth quarter of fiscal year 2003 was
$36.9 million, decreasing by $2.8 million from $39.7 million in
the fourth quarter of fiscal year 2002. Adjusted EBITDA of $125.6
million for fiscal year 2003 was comparable to the $126.4 million
for fiscal year 2002. The decrease in Adjusted EBITDA in the
fourth quarter is primarily attributable to lower sales in the
quarter on a currency-adjusted basis.

At March 31, 2003, total debt was $580.5 million and cash and cash
equivalents was $37.2 million. Capital expenditures in the fourth
quarter of fiscal year 2003 were $5.6 million versus $4.2 million
in the fourth quarter of fiscal year 2002. Capital expenditures in
fiscal year 2003 were $18.7 million versus $21.7 million in fiscal
year 2002. Capital spending in fiscal 2003 was primarily directed
toward businesses with higher growth potential.

"Despite a very difficult economic environment, our financial
performance in fiscal 2003 was essentially flat with that of
fiscal 2002 and was in line with our expectations. We believe we
are well positioned for an economic recovery. Since the
acquisition on November 25, 2002, we have reduced debt by $14.7
million" said Bob Hitt, Rexnord's CEO. "We have made progress in
implementing the operational excellence initiatives known as the
Rexnord Business System ("RBS") in fiscal year 2003. For fiscal
2004, we expect the difficult economic environment will continue,
and we will remain focused on free cash flow generation, building
upon our market leading positions, and executing RBS to drive
reductions in operating costs."

Headquartered in Milwaukee, Wisconsin, Rexnord is a leading
worldwide manufacturer of mechanical power transmission
components. The company has over 5,000 employees located at more
than 30 manufacturing facilities worldwide. Rexnord products are
sold around the world by over 200 direct sales representatives
through a network of multiple service centers and warehouses
backed by hundreds of independent stocking distributors. For more
information, visit http://www.rexnord.com  

As previously reported in Troubled Company Reporter, Moody's
Investors Service assigned initial ratings to Rexnord Corporation.
Outlook is stable.

                     Assigned Ratings:

      * B3 - proposed $225 million of senior subordinated
        notes, due 2012,

      * B1 - proposed $75 million senior secured revolving
        credit facility, due 2008,

      * B1 - proposed $360 million senior secured term
        loan, due 2009,

      * B1 - senior implied rating, and

      * B2 - issuer rating

The initial ratings reflect Moody's concerns on its highly
cyclical end-markets, fluctuating financial performance, slow cash
flow and the challenges Rexnord encounters in its economic
environment. However those issues are offset by the company's
strong market position, and the strong potential for a good
financial performance in the near future.


SEITEL: Wants More Time to Challenge Invol. Bankruptcy Petitions
----------------------------------------------------------------
Seitel, Inc. (OTC Bulletin Board: SEIE; Toronto: OSL) has reached
an agreement allowing it to extend until July 8, 2003 the time by
which the Company must respond to the involuntary bankruptcy
petitions originally filed against it by certain former holders of
its senior unsecured notes.

Since the date that the involuntary bankruptcy petitions were
filed on June 6, 2003, Ranch Capital L.L.C., a California based
private equity firm, has purchased all of the senior notes
originally held by the parties who filed the involuntary
petitions. As a result of these transactions and other similar
transactions both before and after the filing of the involuntary
petitions, Ranch Capital has purchased all $255 million of the
Company's senior unsecured notes.

The Company has scheduled meetings with Ranch Capital during the
next week to continue discussions regarding the framework for a
consensual restructuring of the Company's capital position,
including the senior notes. Although the Company is optimistic
regarding the ongoing discussions, there can be no assurance that
an agreement will be reached.


SEQUOIA: Fitch Rates Class B-4 and B-5 P-T Certificates at BB/B
---------------------------------------------------------------
Sequoia Mortgage Trust 2003-3 mortgage pass-through certificates,
classes A-1, A-2, X-1A, X-1B, X-2, X-B and A-R ($529,377,100) are
rated 'AAA' by Fitch Ratings. In addition, Fitch rates class B-1
($9,075,000) 'AA', class B-2 ($4,675,000) 'A', class B-3
($2,475,000) 'BBB', class B-4 ($1,650,000) 'BB', class B-5
($825,000) 'B'. The class B-6 ($1,925,608) certificates are not
rated by Fitch.

The 'AAA' rating on the senior certificates reflects the 3.75%
subordination provided by the 1.65% class B-1, 0.85% class B-2,
0.45% class B-3 and 0.30% privately offered class B-4, 0.15%
privately offered class B-5 and 0.35% privately offered class B-6
certificates. Classes B-1, B-2, B-3, B-4, and B-5 are rated 'AA',
'A', 'BBB', 'BB' and 'B', respectively, based on their respective
subordination.

The trust consists of two groups of adjustable-rate mortgage
loans, designated as group 1 loans and group 2 loans, with an
aggregate principal balance of $550,002,708. The certificates
whose class designation begins with '1' and '2' correspond to loan
groups 1 and 2, respectively.

The group 1 loans consist of 1,125 fully amortizing 25 and 30-year
adjustable-rate mortgage loans secured by first liens on one- to
four-family residential properties, with an aggregate principal
balance of $394,238,990. All of the loans have interest only terms
of either five or ten years, with principal and interest payments
beginning thereafter. The borrowers' interest rates adjust monthly
based on the one-month LIBOR rate plus a margin (26.57% of the
loan group) or semiannually based on the six-month LIBOR rate plus
a margin (73.43% of the loan group). Greenpoint Mortgage Funding,
Inc. and Morgan Stanley Dean Witter Credit Corporation originated
65.12% and 34.88% of the group 1 mortgage loans, respectively. The
group 1 mortgage loans have an average principal balance of
$350,435, a weighted average original loan-to-value ratio (LTV) of
68.16%, and a weighted average FICO of 735. Rate/term refinance
and cash-out refinance loans represent 45.70% and 27.59% of the
loan pool, respectively. Of the group 1 loans, 7.52% consist of
second homes and 2.47% consist of investment properties. The three
states with the largest concentration of mortgage loans are
California (29.62%), Florida (12.04%) and Arizona (5.20%).

The group 2 loans consist of 460 fully amortizing 25 and 30-year
adjustable-rate mortgage loans secured by first liens on one- to
four-family residential properties, with an aggregate principal
balance of $155,763,718. All of the loans have interest only terms
of either five or ten years, with principal and interest payments
beginning thereafter. All of the borrowers' interest rates adjust
semiannually based on the six-month LIBOR rate plus a margin.
Greenpoint Mortgage Funding, Inc. and Morgan Stanley Dean Witter
Credit Corporation originated 57.96% and 42.04% of the group 2
mortgage loans, respectively. The group 2 mortgage loans have an
average principal balance of $338,617, a weighted average original
LTV of 67.07%, and a weighted average FICO of 736. Rate/term
refinance and cash-out refinance loans represent 43.61% and 29.65%
of the loan pool, respectively. Of the group 2 loans, 9.21%
consist of second homes and 2.03% consist of investment
properties. The three states with the largest concentration of
mortgage loans are California (30.77%), Florida (7.79%) and
Georgia (7.30%).

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

Sequoia Residential Funding, Inc., a Delaware corporation and
indirect wholly-owned subsidiary of Redwood Trust, Inc., will
assign all its interest in the mortgage loans to the trustee for
the benefit of certificate holders. For federal income tax
purposes, an election will be made to treat the trust as two
separate real estate mortgage investment conduits. HSBC Bank USA
will act as trustee.


SHAW COMMS: Anticipates Closing US-Based Cable Asset Sale Today
---------------------------------------------------------------
Shaw Communications Inc. anticipates to close today its previously
announced transactions to sell its Florida- and Texas-based cable
assets to Bright House Networks, LLC and Cequel III, respectively.  
Gross proceeds amount to approximately U.S. $197 million.  The
combined assets represent approximately 71,000 subscribers and
contribute approximately U.S. $17 million of operating income
before amortization to Shaw.

Shaw currently intends to apply the net proceeds from the sales
to redeem U.S.$150 million of senior secured notes issued by Star
Choice Communications Inc. (Star Choice) and to pay down bank
debt.  The Star Choice notes, which were issued in December,
1997, bear interest at 13% per annum and are otherwise scheduled
to mature on December 15, 2005.  The notes are currently callable
at 106.5% of the issue price of U.S.$150 million. The effect of
receiving the sale proceeds and applying them to redeem the Star
Choice notes and bank debt will be to reduce Shaw's interest
expense by approximately Cdn. $26 million per year.  Star Choice
expects to issue formal notice of the redemption to the holders
of the Star Choice notes in mid-July.

Shaw Communications Inc. is a diversified Canadian communications
company whose core business is providing broadband cable
television, Internet and satellite direct-to-home services to
approximately 2.9 million customers.  Shaw is traded on the
Toronto and New York stock exchanges (Symbol: TSX - SJR.B,
NYSE - SJR).

                          *   *   *

As previously reported, Standard & Poor's Ratings Services
lowered its ratings on cable television provider Shaw
Communications Inc., and certain subsidiaries, including the
long-term corporate credit rating on Shaw, which was lowered to
'BB+' from 'BBB-'. The outlook is stable.


SLATER STEEL: Obtains Court Order Delaying Annual Meeting
---------------------------------------------------------
Slater Steel Inc. has obtained a Court Order which allows it to
delay holding its annual meeting pending a further order of the
Court. Slater Steel filed for creditor protection in Canada and
the United States on June 2, 2003. At that time, the Company
stated that the filings would allow it to develop a restructuring
plan to address its debt, capital and cost structures.

As Slater may not be issuing a management information circular in
respect of its 2002 fiscal year, Slater will prepare and file with
Canadian securities regulatory authorities a Form 28 (Annual
Filing of Reporting Issuer) and will also distribute the form to
its shareholders. The Form 28 will contain disclosure regarding
the board of directors and executive compensation, as well as a
statement of corporate governance practices as required under the
rules of The Toronto Stock Exchange. The document will be mailed
to shareholders together with Slater's second quarter financial
results.

Slater Steel is a mini mill producer of specialty steel products.
The Corporation manufactures and markets bar and flat rolled
stainless steels, carbon and low alloy steel bar products, vacuum
arc and electro slag remelted steels, mold, tool and die steels
and hollow drill and solid mining steels. The Corporation's mini
mills are located in Fort Wayne, Indiana, Lemont, Illinois,
Hamilton and Welland, Ontario and Sorel-Tracy, Quebec.


SMARTSERV ONLINE: Nasdaq Yanks Shares from SmallCap Market
----------------------------------------------------------
Nasdaq Listing Qualifications Panel determined to delist SmartServ
Online, Inc.'s (Nasdaq: SSOL) common stock from the Nasdaq
SmallCap Market effective with the open of business on Friday,
June 27, 2003. The Panel Decision stated that, "[T]he Company's
plan to regain compliance with the $2,500,000 shareholders' equity
requirement is not yet sufficiently definitive in nature and will
likely require significant additional time to implement."

SmartServ's common stock was immediately eligible for quotation on
the Over The Counter Bulletin Board effective with the open of
business on Friday, June 27, 2003, under the symbol "SSOL".

SmartServ also announced the completion of a $1,500,000 round of
financing, consisting of debentures convertible into common stock
and warrants to purchase common stock. Spencer Trask Ventures,
Inc., a New York investment bank, acted as SmartServ's advisor on
this transaction. The closing of this transaction completes the
first step of SmartServ's compliance plan referred to in Nasdaq's
Panel Decision. The next steps of the plan include potential
acquisitions along with equity financing. Spencer Trask Ventures
will continue to advise the Company on the execution of this plan.

Sam Cassetta, SmartServ's Chairman and CEO said that, "Although we
are obviously disappointed with Nasdaq's Panel Decision, our
priority continues to be long term growth and maximizing
shareholder value. We will continue our efforts to implement our
financing and business plans and hope to qualify for Nasdaq
relisting in the future."

There can be no assurance, however, that SmartServ will be able to
execute this plan or that such execution will result in the
listing of its common stock on Nasdaq or any exchange.

SmartServ (Nasdaq: SSOL) is a wireless applications service
provider offering applications, development and hosting services.
SmartServ's customer and distribution relationships exist across a
network of wireless carriers, strategic partners, and a major
financial institution. SmartServ offers mobile data solutions that
can generate additional revenue, increase operating efficiency,
and extend brand awareness for wireless carriers, enterprises and
content providers. We offer standard and custom-built applications
designed for a vast array of wireless platforms and devices. Our
applications can be delivered via Java(TM) 2 Platform, Micro
Edition (J2ME(TM)), QUALCOMM's Binary Runtime Environment for
Wireless(TM) (BREW(TM)) solution, WAP and SMS, as well as RIM
Blackberry and Pocket PC devices. For more information, please
visit http://www.SmartServ.com  

SmartServ Online's March 31, 2003 balance sheet shows a working
capital deficit of close to $3 million, and a total shareholders'
equity deficit of about $1 million.


SOLUTIA INC: Will Host Second Quarter Conference Call on July 25
----------------------------------------------------------------
Solutia Inc. (NYSE: SOI) will hold its second quarter earnings
conference call on Fri., Jul. 25, 2003 at 9 a.m. central time
(10 a.m. eastern).  The earnings report will be released at
approximately 6 p.m. eastern time on Thurs., Jul. 24, 2003.

A live, listen-only webcast of its conference call will be
available on the Company's Web site at http://www.solutia.com,  
under the presentation and speeches tab in the investor relations
section.  A replay of the conference call, as well as, the
question and answer session will be available at the site for
approximately five days following the call.

Solutia -- http://www.Solutia.com-- uses world-class skills in  
applied chemistry to create value-added solutions for customers,
whose products improve the lives of consumers every day.  Solutia
is a world leader in performance films for laminated safety glass
and after-market applications; process development and scale-up
services for pharmaceutical fine chemicals; specialties such as
water treatment chemicals, heat transfer fluids and aviation
hydraulic fluid and an integrated family of nylon products
including high-performance polymers and fibers. At March 31, 2003,
the Company's balance sheet shows a total shareholders' equity
deficit of about $232 million.


SORRENTO NETWORKS: Inks Definitive Agreement to Acquire LxN Inc.
----------------------------------------------------------------
Sorrento Networks Corporation (Nasdaq: FIBR), a leading supplier
of intelligent optical networking solutions for metro and regional
applications, has entered into a definitive agreement to acquire
LuxN, Inc. of Sunnyvale, California.

LuxN supplies intelligent optical access solutions for the network
edge. The acquisition expands Sorrento's addressable market by
adding "best-of-breed" optical access products, which combine
coarse and dense wavelength division multiplexing (CWDM and DWDM)
on the same platform and have patented in-wavelength management.
The merger also broadens Sorrento's blue-chip customer base by
adding 25 customers, including Time Warner Telecom, Hawaii I-Net,
Yipes Enterprise Services, and numerous universities.

The purchase price for the transaction will be a combination of
stock, warrants, and cash, including some of the cash currently
held by LuxN. The acquisition is contingent upon regulatory
approval and certain closing conditions, including a minimum
amount of net cash remaining in LuxN following distribution of the
merger consideration. Warrants to purchase 400,000 shares of
Sorrento will be issued to the Series A-1 Preferred stockholders
of LuxN upon the completion of the transaction, which is expected
to occur on or before August 8, 2003.

"We are delighted about our union with LuxN," stated Phil Arneson,
chairman and chief executive officer of Sorrento Networks. "Our
capital restructuring and its huge management distractions are
behind us. This merger with LuxN is merely the first step in our
growth strategy, which includes expanding our product line
breadth, adding new customers, and penetrating new markets. The
acquisition of LuxN provides Sorrento with complementary products,
intellectual property and employee talent to help execute our
business plan and increase shareholder value."

"In addition to the positive impact on future revenues, the
acquisition will enhance Sorrento's balance sheet with additional
cash, marketable inventory, and an increase in stockholders'
equity," remarked Joe Armstrong, chief financial officer of
Sorrento Networks. "Given the large investment that LuxN has made
to develop its products and customer base -- over $125 million in
the past five years -- Sorrento is fortunate to join with LuxN on
such attractive terms."

"Together, Sorrento and LuxN form a powerful combination," stated
Mitch Truelock, vice president of sales and marketing for Sorrento
Networks. "This acquisition enables us to provide more complete
solutions to a larger addressable market -- from the network edge
to the network core. We see immediate opportunities for LuxN's
integrated DWDM and CWDM optical access products, which nicely
complement Sorrento's JumpStart and GigaMux platforms."

Tom Alexander, president and chief executive officer of LuxN,
commented, "Joining forces with Sorrento Networks is absolutely
the right thing for our customers, employees and investors.
Sorrento and LuxN have complementary attributes: Sorrento is
strong in metro and regional core applications as well as the
storage area networking (SAN) market, while LuxN excels in optical
access and enterprise applications. The combined entity will be
better positioned to compete with larger vendors and win new
business as the telecom market recovers."

Arneson concluded, "One key to a successful merger is to have a
thoughtful and complete integration plan. LuxN and Sorrento both
have valuable intellectual, human capital and material resources.
Our comprehensive integration plan will help us to obtain the
'best blend' from the two companies."

LuxN provides intelligent optical access and transport solutions
for metropolitan service providers and major enterprises.
Supporting both CWDM and DWDM, LuxN's carrier-class, OSMINE-
certified systems offer manageability and service level assurance
for critical applications. LuxN's protocol-independent solutions
enable delivery of high-bandwidth data, storage, video, and voice
services for a diversified customer base including ILECs, CLECs,
MSOs, utilities, municipalities, and storage providers. An ISO
9001 certified company, LuxN has a diverse base of customers and
distribution partners spanning the North American, Asia-Pacific,
and European regions. For more information, visit the LuxN Web
site at http://www.luxn.com  

Sorrento Networks, headquartered in San Diego, is a leading
supplier of intelligent optical networking solutions for metro and
regional applications worldwide. Sorrento Networks' products
support a wide range of protocols and network traffic over linear,
ring and mesh topologies. Sorrento Networks' existing customer
base and market focus includes communications carriers and service
providers in the telecommunications, cable TV and utilities
markets. Recent news releases and additional information about
Sorrento Networks can be found at http://www.sorrentonet.com  

At April 30, 2003, Sorrento's balance sheet shows a total
shareholders' equity deficit of about $39 million.


SPIEGEL GROUP: Seeks Approval of Excess Inventory Sale Protocol
---------------------------------------------------------------
The Spiegel Group and its debtor-affiliates propose to establish
procedures for the periodic sale or auction of certain excess
inventory free and clear of liens, claims, interests and
encumbrances.

The Debtors anticipate that throughout the remainder of 2003,
certain Spiegel inventory will be rendered obsolete, excessive or
burdensome as a result of decisions to exit certain markets,
reduce warehouse space and vacate various locations where they
formerly conducted business.  In connection with the closing and
vacating of the stores and the consolidation of operations, the
Debtors find it is essential to sell excess inventory in the
manner which will maximize value for their estates.

The Debtors expect that "buckets" of Excess Spiegel Inventory
will become available for sale every four to five weeks.  They
anticipate that the recovery on the Excess Spiegel Inventory may
be only a fraction of its book value, and that any sales
consummated through the end of 2003 pursuant to the proposed
procedures would, in aggregate, yield several million dollars.

The Debtors propose a two-phase sales process to sell the Excess
Spiegel Inventory, on an "as is, where is" basis.  The Sale
Procedures would give the Debtors the option, but not impose the
obligation, to accept an offer for Excess Spiegel Inventory -- in
consultation with the Creditors' Committee -- without further
Court approval.  If the Debtors conclude that they have not
received a bid that is acceptable to them, then they would
proceed to sell the Excess Spiegel Inventory through a public
auction.

In lieu of a hearing, the Debtors will consummate the sale of
Excess Spiegel Inventory free pursuant to these procedures:

    -- First, the Debtors will send a list of Excess Spiegel
       Inventory by stock keeping units or SKUs for sale to
       potential purchasers.  Within three days after the list is
       sent, the potential purchasers have the right to inspect
       the warehouse where the Excess Spiegel Inventory is
       located.  Within two days after the inspection, the
       potential purchasers would have to bid on the Excess
       Spiegel Inventory.  The day after that deadline, the
       Debtors, in consultation with the Creditors' Committee,
       will evaluate which of the potential purchasers' proposals
       to accept, if any.  If a potential purchasers' proposal is
       accepted, the Debtors will provide notice of the proposed
       sale in accordance with an "Out-of-Court Sale Notice".

    -- The Debtors will give the Out-of-Court Sale Notice of each
       proposed sale to:

         (i) the Office of the United States Trustee,
        (ii) the Creditors' Committee's counsel,
       (iii) the postpetition lenders, and
        (iv) any known holder of a Lien on the property proposed
             to be sold

       The Debtors will also file electronically the Out-of-Court
       Sale Notice with the Clerk of the Bankruptcy Court.

    -- Out-of-Court Notices will be served by facsimile so as to
       be received by 5:00 p.m. (New York City time) on the same
       day.  The Notice will specify the:

         (i) identity of the seller;
        (ii) identity of the purchaser; and
       (iii) Debtors' marketing efforts for the Excess Spiegel
             Inventory proposed to be sold.

    -- The Notice Parties will have two business days after the
       Out-of-Court Sale Notice is sent to object or request
       additional time to evaluate the proposed transaction.

    -- If no written objection or request for additional time is
       received, the Debtors will proceed to consummate the
       sale transaction and to take necessary actions to close the
       transaction and obtain the sale proceeds.

    -- If a timely written request for additional time to evaluate
       the transaction is received, only the filing Notice Party
       will have an additional two business days to object to the
       proposed transaction.

    -- If a Notice Party timely objects to the transaction, the
       Debtors and that objecting Party will use good faith
       efforts to consensually resolve the objection.  If they are
       unable to reach a consensual resolution, the Debtors will
       not proceed with the transaction but will seek Bankruptcy
       Court approval of the transaction.

    -- Nothing in the procedures will prevent the Debtors, in
       their discretion, from seeking Bankruptcy Court approval at
       any time of any proposed sale upon notice and a hearing.

In the event that there are no acceptable bids from potential
purchasers at this juncture, the Debtors will resort to a public
auction and sale hearing in accordance with these procedures:

    -- The Debtors will give a notice of the auction via facsimile
       of each proposed sale auction to:

         (i) the Office of the United States Trustee,
        (ii) the Creditors' Committee's counsel,
       (iii) the postpetition lenders,
        (iv) potential purchaser that was sent a list of the
             Excess Spiegel Inventory offered for sale, and
         (v) any known holder of a lien on the property proposed
             to be sold.

       The Debtors shall also file electronically the Auction
       Notice with the Clerk of the Bankruptcy Court.

    -- The Auction Notices will specify the:

         (i) Excess Spiegel Inventory to be sold;
        (ii) identity of the Seller;
       (iii) purchase price;
        (iv) bid increment requirements;
         (v) bid deadline; and
        (vi) date, time and location of the Auction.

    -- Any party wishing to submit an offer must submit a bid
       within one day of receipt of a Liquidation Auction Notice.
       If no bid is received, the Debtors, in consultation with
       the Creditors' Committee, will have the discretion to hold
       the Auction to obtain a bid for the Excess Spiegel
       Inventory.

    -- If only one bid is received, the Debtors will have the
       discretion to determine that that bid will be confirmed as
       the highest and best bid for the Excess Spiegel Inventory.
       The Debtors will request that that offer be confirmed as
       the highest and best bid and approved by the Court at the
       applicable sale hearing.  In these circumstances, no less
       than two days before the scheduled Auction, the Debtors
       will notify the Court in writing that no Auction will take
       place.

    -- All competing bids must remain open and irrevocable until
       the Court enters an order approving the sale.

    -- Competing bids cannot be contingent on completion of due
       diligence, the receipt of financing or any board of
       directors, shareholder or other corporate approval or any
       other event expect Court approval. (Spiegel Bankruptcy
       News, Issue No. 7; Bankruptcy Creditors' Service, Inc.,
       609/392-0900)   


SYMPHONIX DEVICES: Closes Sale of All Remaining Assets to MED-EL
----------------------------------------------------------------
Symphonix(R) Devices Inc. (OTC Bulletin Board: SMPX) -- developers
of the world's first FDA-approved middle-ear implant for moderate
to severe sensorineural hearing loss -- has closed the sale of
substantially all its remaining assets to MED-EL, GmbH, an
Austrian manufacturer of cochlear implants.

"I'm very pleased that the transition process has gone so
smoothly," said Geoff Ball, inventor of the Vibrant(R)
Soundbridge(R) and Vibrant-MED-EL CTO, "It is a testament to both
the professionalism of the two companies and MED-EL's commitment
to assimilating the Vibrant Soundbridge technology into their
product offering."

MED-EL intends to keep the Vibrant Soundbridge name and offer the
product through its global distribution channels.

Wilmington Trust has been appointed to manage the winding down of
the affairs of Symphonix.  In conjunction with the move, each of
Symphonix' Board Members have resigned.

Additionally, Symphonix officially ceased trading on the Over-the-
Counter Bulletin Board (OTCBB) after the closing bell yesterday,
June 25, 2003.

The Vibrant Soundbridge product represents an innovative approach
to hearing improvement -- the first implantable middle ear hearing
device. Unlike conventional acoustic hearing aids, which increase
the volume of sound that goes to the eardrum, the Vibrant
Soundbridge bypasses the ear canal and eardrum by directly
vibrating the small bones in the middle ear. Because of its
design, no portion of the device is placed in the ear canal
itself. The Vibrant Soundbridge has been approved by the FDA as a
safe and effective treatment option for adults with moderate to
severe sensorineural hearing loss who desire an alternative to
acoustic hearing aids.

Symphonix Devices Inc. is a hearing technology company in the
process of dissolution. Symphonix' Vibrant Soundbridge is a
surgical implant designed to work with the natural structures of
the middle-ear to enhance hearing and communication ability for
people with hearing impairment. The device can be implanted during
a short, outpatient medical procedure. More information about
Symphonix Devices, Inc. can be found at http://www.symphonix.com

Over 25 years ago researchers who later founded MED-EL developed
one of the world's first cochlear implants. Today, MED-EL is
growing faster than any other cochlear implant company and is the
global leader in innovative technology in the field. MED-EL
products are the result of collaborative efforts by MED-EL
engineers, surgeons, audiologists, therapists, and of course,
implant users.

MED-EL has their worldwide headquarters in Innsbruck, Austria, a
North American headquarters in Durham, North Carolina and 13 other
subsidiaries worldwide. MED-EL has implanted their devices in over
400 clinics, in 70 countries worldwide. More information about
MED-EL can be found at http://www.medel.com

                            *    *    *

                  Liquidity and Capital Resources

In its SEC Form 10-Q filed on November 14, 2002, the Company
reported:

"Since inception, the Company has primarily funded its operations
and its capital investments from proceeds from its initial public
offering completed in February 1998 totaling $28.4 million, from
the private sale of equity securities totaling approximately $62.5
million, from an equipment lease financing totaling $1.3 million
and from bank borrowings totaling $2.0 million. At September 30,
2002, the Company had $3.0 million in working capital, and its
primary source of liquidity was $3.9 million in cash and cash
equivalents. Additionally, the Company had $0.7 million of short-
term and long-term restricted cash held in certificates of deposit
as collateral for a bank loan and letters of credit.

"Symphonix used $7.1 million in cash for operations in the nine
months ended September 30, 2002 compared to $13.9 million in the
nine months ended September 30, 2001 primarily in funding its
operating losses. This reduction is due to expense reductions
implemented by Symphonix in late 2001 and continued in 2002.

"Capital expenditures, primarily related to the Company's research
and development and manufacturing activities, were $17,000 and
$708,000 in the nine months ended September 30, 2002 and 2001,
respectively. The reduction in capital expenditures is due to the
completion of key milestones in research and development during
2001 and 2002. At September 30, 2002, the Company did not have any
material commitments for capital expenditures.

"The Company has a loan agreement with a bank that provided for
borrowings of up to $2.0 million and for the issuance of letters
of credit up to $250,000. At September 30, 2002, the Company had
borrowings outstanding of $625,000, outstanding letters of credit
in the amount of $59,000 and no amounts available for future
borrowings under the loan agreement. Borrowings under the loan
agreement are repayable over four years commencing in January
2000.

"In connection with the proposed liquidation, we expect to
liquidate our remaining assets, including property, equipment and
intellectual property. We also expect to incur and pay liquidation
expenses, in addition to payments of ongoing operating expenses
and settlement of existing and potential obligations. Liquidation
expenses may include, among others, employee severance and related
costs, customer warranty obligations and legal and accounting
fees. While we cannot currently make a precise estimate of these
expenses, we believe that most if not all of our current cash and
cash equivalents, together with proceeds from future sales of the
remaining assets may be required to pay for the above
expenditures."


TERRA INDUSTRIES: Suspends Production at Blytheville Facility
-------------------------------------------------------------
Terra Industries Inc. (NYSE: TRA) will suspend ammonia and urea
production at its Blytheville, Ark., facility at the end of June
2003.  The shutdown is due to expectations that the facility would
not cover its cash costs because of continuing high natural gas
costs and the seasonal decline in nitrogen fertilizer demand and
prices.

The facility will resume production when ammonia and urea selling
prices increase and/or natural gas costs decrease to the point
where the facility can operate with positive cash flow.  The
Blytheville facility's ammonia and urea manufacturing capacity
represent 14 and 73 percent, respectively, of Terra's total North
American ammonia and urea manufacturing capacity.  Terra will
continue to operate its Blytheville ammonia and urea storage and
shipping facilities.

Terra has notified about 60 employees, or nearly 65 percent, of
its Blytheville workforce that they will be laid off for an
indefinite period, currently expected to last three to five
months, depending on market conditions.

Said Terra's President and CEO Michael L. Bennett, "We're
extremely disappointed at having to lay off some of our
Blytheville employees.  However, we continue to hope that a
balance of natural gas costs and nitrogen products prices that
will allow us to restart production in Blytheville will be
achieved within the next several months."

Terra Industries Inc., with 2002 revenues of $1 billion, is a
leading international producer of nitrogen products and methanol.

For more information, visit http://www.terraindustries.com

As reported in Troubled Company Reporter's May 27, 2003 edition,
Fitch Ratings assigned a rating of 'B-' to Terra Industries' new
$200 million senior secured second priority notes and has affirmed
ratings at 'BB-' for the existing senior secured credit facility
and senior secured notes. Fitch has also affirmed the 'B-' rating
for the senior unsecured notes. The Rating Outlook is Stable.


TIMCO AVIATION: Expects to Meet 2003 Working Capital Needs
----------------------------------------------------------
On several occasions during fiscal 2002 Timco Aviation Sales was
out of compliance with certain of the covenants contained in its
credit agreement with its senior lenders and under its tax
retention operating lease financing arrangement. The Company's
senior lenders and the TROL financing lender waived all of the
events of default arising from the covenant violations which
occurred during fiscal 2002 and the Company was in compliance, as
waived and amended, with its credit agreement and TROL financing
arrangement at December 31, 2002. As of March 31, 2003, after
receiving a waiver of several covenant violations and establishing
new covenant requirements effective for the quarter ending
March 31, 2003, the Company was in compliance with all financial
covenant requirements under these agreements.

For the year ended December 31, 2002, the Company incurred losses
from continuing operations of $24,426. Additionally, as of
December 31, 2002 and March 31, 2003, the Company had net working
capital and stockholders' deficits and continued to require
additional cash flow above amounts currently being provided from
operations to meet its working capital requirements. Also, as a
result of the state of the domestic economy, the rising price of
jet fuel, a continuing decline in passenger airline travel, the
currently on-going war on terrorism, and a greater than 15%
reduction in airfare prices, the airline industry, and thus the
Company's customer base, has been significantly impacted. The
result for some carriers has been the filing for protection under
Chapter 11 of the United States Bankruptcy Code. These factors
have also resulted in some of the Company's competitors exiting
the maintenance, repair, and overhaul business.

The Company's ability to service its debt and note obligations, as
they come due, is dependent upon the  Company's  future financial
and operating performance. This performance, in turn, is subject
to various factors, including certain factors beyond the Company's
control, such as changes in conditions affecting the airline
industry and changes in the overall economy. Additionally, failure
to comply with the covenants and provisions under the Company's
debt and note obligations, unless waived by the lenders and
noteholders, would be an event of default and would permit the
lenders and noteholders to accelerate the maturity of these debts
and note obligations. It would also permit them to terminate their
commitments to extend credit under the financing agreements. The
Amended Credit Facility and the TROL financing agreement also
provide for the termination of the financing agreements and
repayment of all obligations in the event of a material adverse
change in the Company's business or change in control. These
actions would have an immediate material adverse effect on the
Company's liquidity. Further, although the Company expects to be
able to meet its working capital requirements during 2003 from its
available resources and from other sources, including funds
available under its revolving credit facility, from operations,
from sale of assets and further equity and/or debt infusions
(including the new loan from its principal stockholder described
below), there can be no assurance that the Company will have
sufficient working capital or that such other sources of funding
will be available to the Company to meet its obligations.

On May 14, 2003, the Company entered into an agreement with its
principal stockholder pursuant to which the principal stockholder
agreed to loan the Company $6,000 ($2,000 at closing and $2,000
within 30 days and within 60 days thereafter), which will be used
for working capital. Further, the $1,300 loan which was obtained
from the Company's principal stockholder in connection with the
October 2002 Brice Manufacturing acquisition has been combined
with this new $6,000 loan (aggregate obligation of $7,300). The
aggregate obligation of $7,300 will come due in May 2006. The new
note has a three-year maturity, is secured debt and bears a 16%
PIK interest coupon. In connection with the new loan, the Company
issued a warrant to its principal stockholder to acquire, for
nominal consideration, 30% of the Company's outstanding common
stock (on a fully-diluted basis) as of the day the warrant is
exercised. The warrant is exercisable on or before
January 31, 2007.

The Company's operating revenue for the three months ended March,
31 2003 decreased $6.3 million, or 10.9%, to $51.3 million, from
$57.5 million for the three months ended March 31, 2002. Operating
revenue for the first quarter of 2002 included $1.8 million in
revenues from the operation of Aerocell, which was sold in July
2002. Without the revenue from this facility, comparative 2002
three-month revenues would have been $55.7 million.  This
information is provided in order to compare the revenues derived
from facilities open in both the first quarter of 2002 and the
first quarter of 2003.

Gross profit decreased to $3.5 million for the three months ended
March 31, 2003, a 43.7% drop, compared with a gross profit of $6.2
million for the three months ended March 31, 2002.

Operating expenses for the first quarter ended March 31, 2003 were
$3.1 million compared to $3.6 million for the first quarter ended
March 31, 2002. Operating expenses as a percentage of revenues
were 6.0% and 6.2%, respectively, for the three month periods
ended March 31, 2003 and 2002.  

Loss from continuing operations before income taxes and
discontinued operations for the three months ended March 31, 2003
was $0.1 million, compared to income from continuing operations
before income taxes and discontinued operations of $16.8 million
for the three months ended March 31, 2002. Without the non-cash
charge relating to the settlement of class action litigation and
the gain on debt extinguishment, both of which management believes
are one-time and non-recurring items, the Company would have
reported a net loss from continuing operations before income taxes
and discontinued operations for the quarter ended March 31, 2002
of $2.5 million.


TOUCH AMERICA: US Trustee Sets Creditors Meeting for July 21
------------------------------------------------------------
The United States Trustee will convene a meeting of Touch America
Holdings, Inc., and its debtor-affiliates' creditors on July 21,
2003, at 2:00 p.m., in the J. Caleb Boggs Federal Building, 2nd
Floor, Room 2112, Wilmington, Delaware 19801.  This is the first
meeting of creditors required under 11 U.S.C. Sec. 341(a) in all
bankruptcy cases.

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

Touch America Holdings, Inc., headquartered in Butte, Montana,
filed for chapter 11 protection on June 19, 2003 (Bankr. Del. Case
No. 03-11915).  Touch America, through its principal operating
subsidiary, Touch America, Inc., develops, owns, and operates data
transport and Internet services to commercial customers. Maureen
D. Luke, Esq., and Robert S. Brady, Esq., at Young Conaway
Stargatt & Taylor, LLP represent the Debtors in their
restructuring efforts.  When the Company filed for protection from
its creditors, it listed $631,408,000 in total assets and
$554,200,000 in total debts.


TRAPEZA CDO: Fitch Assigns BB Rating to Class E Secured Notes
-------------------------------------------------------------
Fitch Ratings assigns the following ratings to Trapeza CDO III,
LLC as listed below:

-- $108,500,000 Class A1A First Priority Senior Secured Floating
   Rate Notes Due Jan. 2034 'AAA';

-- $71,500,000 Class A1B Second Priority Senior Secured Floating
   Rate Notes Due Jan. 2034 'AAA';

-- $25,000,000 Class B Third Priority Senior Secured Floating Rate
   Notes Due Jan. 2034 'AA+';

-- $31,250,000 Class C-1 Fourth Priority Secured Floating Rate
   Notes Due Jan. 2034 'A';

-- $31,250,000 Class C-2 Fourth Priority Secured Fixed/Floating
   Rate Notes Due Jan. 2034 'A';

-- $14,500,000 Class D Mezzanine Secured Floating Rate Notes Due
   Jan. 2034 'BBB';

-- $8,000,000 Class E Secured Notes Due Jan. 2034 'BB'.

The ratings on the class A1A, A1B and B notes address the
likelihood that investors will receive timely payment of interest
and ultimate payment of an amount equal to the original principal
amount of the respective Notes on the stated maturity date. The
ratings on the class C-1, C-2, D and E notes address the
likelihood that investors will receive ultimate payment of
interest and ultimate payment of an amount equal to the original
principal amount of the respective notes on the stated maturity
date. Payments on the notes will be paid semi-annually starting in
Jan. 2004.

The assets of Trapeza CDO III, LLC, a bankruptcy-remote special-
purpose corporation, primarily consist of a $300 million
diversified pool of trust preferred securities issued by bank and
thrift holding companies. The pool is diversified by geographical
region and obligor. Each of the underlying collateral security
obligors are FDIC-insured commercial banks and thrifts. As of the
closing date, the average size of the underlying issues is $6.54
million, while the largest obligor represents 3.00% of the pool.

Approximately 95.88% of the portfolio has been purchased as of the
closing date; the remaining 4.12% will be purchased during the
90-day ramp up period. Beginning on the ramp-up completion date
and ending July 2007, Trapeza CDO III, LLC will be permitted to
use sale proceeds from defaulted and credit risk securities to
reinvest in collateral in accordance with certain criteria and
conditions. Credit enhancement is provided via subordination,
excess spread and an interest reserve account. There are over-
collateralization and interest coverage triggers that perform the
same function as in other CDOs.


ULTRASTRIP: Seeks Additional Funds to Meet Working Capital Needs
----------------------------------------------------------------
UltraStrip Systems, Inc., a Florida corporation with executive and
sales offices in Stuart, Florida, was incorporated in April 1998.
The Company designs, develops and assembles an innovative
automated hydrojetting system that uses ultra-high water pressure
to remove coatings from steel surfaces, such as the hulls of large
cruise and cargo ships and the exterior surfaces of above-ground
storage tanks. The system consists of a robotic vehicle that
magnetically attaches to steel surfaces, an ultra-high pressure
pump, a vacuum system designed to aid in the capture and
containment of waste, and a waste filtration system.

The Company lacked assured available financial resources to meet
its December 31, 2002 working capital deficit of $5,449,648 and
future operating costs and currently does not have cash available
to pay its accounts payable and other liabilities. The Company is
actively seeking additional capital. Through March 2003, the
Company has generated approximately $1.0 million in net cash from
financing activities, entirely from the issuance of debt. While
management believes that resources may be available from private
sources in 2003 to carry out its business plan, no assurance can
be given that the Company will be able to raise such additional
capital.

The Company continues to incur losses from its operations. Loss
from operations for the year ended December 31, 2002 was
$1,973,823 as compared to $4,457,588 for the prior year. This
decrease in loss is primarily due to the increase in revenues and
decreases in cost of revenues and operating expenses.

Net loss was $2,317,631 for the year ended December 31, 2002,
compared to $4,503,590 for the year ended December 31, 2001.

Since inception, the Company has relied principally upon the
proceeds of private equity financings and loans to fund its
working capital requirements and capital expenditures. The Company
has generated only minimal revenues from operations to date. The
Company's net cash used in operating activities for the year ended
December 31, 2002 was $2,344,578, compared to $4,846,895 for the
year ended December 31, 2001, a decrease of $2,502,317. This
decrease resulted from decreases in the Company's net loss and
inventories and an increase in accounts payable and accrued
expenses, offset by decreases in accounts payable - related
parties and deferred revenue. Inventories decreased with the sale
of equipment to Metro in August 2002. The Company does not
maintain inventory for equipment sales, since, upon any future
sales order, the Company will require customer deposits to cover
all or most of the Company's manufacturing costs. The Company will
borrow against the sales order to complete the manufacture of
required inventory, if the customer deposits prove insufficient.
Accordingly, future equipment sales may be dependent upon the
Company's ability to obtain working capital to manufacture the
equipment. Accounts payable increased as the Company continued to
delay payment of many of its previously incurred obligations. At
December 31, 2002, over 70% of accounts payable were over 90 days
past due. Accrued expenses also increased, largely as a result of
salary deferrals by two officers and an employee, which reduced by
approximately $368,000 the net cash used in operating activities.


UNITED AIRLINES: US Bank Demands Payment of Admin Expense Claim
---------------------------------------------------------------
United Airlines Inc. and the Trustee established a Trust on
February 1, 1992. The Trust issued certificates, which were
purchased by investors. Proceeds from the certificates were used
by the trust to purchase equipment trust notes issued under an
indenture between United and the indenture trustee.  Equipment
Note No. 1 was issued to Pass Through Trust No. A1 and is payable
through 2008.  Equipment Note No. 2 was issued Pass Through Trust
No. A2 and is payable from 2009 through 2016.  United is the
lessor of Aircraft, which secures the Equipment Notes.  Lease
payments are passed through to pay the Equipment Notes.

Pursuant to Section 1110(a) of the Bankruptcy Code, United
elected to perform its obligations under the 1992-A PTC
Transactions.  However, the Debtors breached this commitment.  By
this motion, U.S. Bank, as Trustee under the Pass Through Trust
Agreement, asks Judge Wedoff to compel United to pay
administrative expenses due under the 1992-A PTC Transaction.
Approximately $7,700,000 remains due and outstanding.

Tail No.        Missed Payment     Grace Period Rent   Total
--------        --------------     -----------------   ------
N548UA          $1,615,750         $ 62,782            $1,678,532
N647UA           2,350,495          314,802             2,665,297
N549UA           1,615,750           62,782             1,678,532
N550UA           1,538,107           64,937             1,603,044
N646UA           3,528,854           98,024             3,626,878

But Ronald Barliant, Esq., at Goldberg, Kohn, Bell, Black,
Rosenbloom & Moritz, in Chicago, Illinois, reminds the Court that
on February 7, 2003, the Debtors agreed to perform all
obligations and cure any defaults under their existing aircraft
financing transactions, including aircraft that are the subject
of the 1992-A PTC Transaction.  The Debtors were required to make
scheduled payments to the PTC Trustee before March 22, 2003.  The
payments were not made and the Debtors continue to use the
Aircraft. (United Airlines Bankruptcy News, Issue No. 21;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   


U.S. CAN CORP: Plan to Issue 2nd Priority Senior Secured Notes
--------------------------------------------------------------
U.S. Can Corporation's wholly owned subsidiary, United States Can
Company, is considering an offering of up to $125 million of new
second priority senior secured notes. The offering would fund a
partial paydown of outstanding borrowings under the Company's
senior secured bank facility and increase availability under the
revolving portion of the facility for working capital and general
corporate purposes. The second priority senior secured notes to be
offered would be secured, on a second priority basis, by all of
the collateral that currently secures the Company's senior secured
bank facility.

The offering of the second priority senior secured notes would be
subject to market and other customary conditions, including
obtaining consent from the Company's lenders for certain
amendments to its senior secured credit facility to permit the
offering and adjust certain financial covenants. These amendments
also may permit, from time to time and subject to certain
conditions, the repurchase of a portion of our outstanding 12-3/8%
senior subordinated notes in open market or privately negotiated
purchases. In addition, these amendments may provide for
alternative terms, including with respect to financial covenants
and interest rates, in the event that the Company does not
complete the offering or a similar transaction.

The second priority senior secured notes would be offered in the
United States only to qualified institutional buyers pursuant to
Rule 144A under the Securities Act of 1933, as amended, and
outside the United States pursuant to Regulation S under the
Securities Act. The second priority senior secured notes would not
be registered under the Securities Act or any state securities
laws and therefore may not be offered or sold in the United States
absent registration or an applicable exemption from the
registration requirements of the Securities Act and any applicable
state securities laws. This announcement is neither an offer to
sell nor a solicitation of an offer to buy the second priority
senior secured notes.

U.S. Can Corporation, whose December 31, 2002 balance sheet shows
a total shareholders' equity deficit of about $344 million, is a
leading manufacturer of steel containers for personal care,
household, automotive, paint and industrial products in the United
States and Europe, as well as plastic containers in the United
States and food cans in Europe.


WATERLINK INC: Files for Chapter 11 Reorganization in Delaware
--------------------------------------------------------------
Waterlink, Inc., (OTCBB:WLKN) filed voluntary petitions for
reorganization under Chapter 11 of the United States Bankruptcy
Code in the United States Bankruptcy Court for the District of
Delaware. The Company also is seeking an order of the Court to
obtain the use of cash collateral which it expects will support
current operations. This cash collateral will be comprised of the
Company's collections of existing receivables. The Company's
international entity, Sutcliffe Speakman Limited, will not be
affected, as only Waterlink's U.S. operations have sought
protection under Chapter 11.

Chief Executive Officer William Vogelhuber said, "Given our
Company's current condition, we believe that this action will give
us the ability to preserve and maximize our value. With the hard
work and dedication of our employees and the support of our
customers and suppliers, we are confident that the business will
emerge from this process a stronger company."

In announcing the Company's Chapter 11 filing, Donald A. Weidig,
Chief Financial Officer, commented, "Our filing provides Waterlink
with the opportunity to position itself for a viable future. After
the filing, Waterlink will continue to operate without
interruption. We will be able to continue to supply our customers
with quality integrated water and air purification solutions and
build stronger relationships with our suppliers going forward."

FOCUS Management Group has been retained by the Company to
supervise and direct its reorganization efforts including all
capital transaction programs and activities. FOCUS Management
Group has offices in Chicago, IL, Los Angeles, CA, St. Louis, MO
and Tampa, FL.

Waterlink is an international provider of integrated water and air
purification solutions for both industrial and municipal
customers.


WATERLINK INC: Case Summary & Largest Unsecured Creditors
---------------------------------------------------------
Lead Debtor: Waterlink, Inc.
             835 North Cassady Avenue
             Columbus, OH 43219

Bankruptcy Case No.: 03-11989-PJW

Type of Business: The debtor is an international provider of
integrated water and air purification solutions for both
industrial and municipal customers.

Debtor affiliates filing separate chapter 11 petitions:

      Entity                                Case No.
      ------                                --------
      Waterlink Technologies, Inc.          03-11990-PJW
      C'Treat Offshore, Inc.                03-11991-PJW
      Waterlink Management, Inc.            03-11992-PJW
      Barnebey Sutcliffe Corporation        03-11993-PJW

Chapter 11 Petition Date: June 27, 2003

Court: District of Delaware

Judge: Peter J. Walsh

Debtors' Counsel: Kurt F. Gwynne, Esq.
                  Reed Smith LLP
                  1201 Market Street
                  15th Floor
                  Wilmington, DE 19801
                  usa
                  302-778-7550
                  Fax : 302-778-7575
                  Email: kgwynne@reedsmith.com

Total Assets: $36,719,000 (As of March 31, 2003)

Total Debts: $51,081,000 (As of March 31, 2003)

List of Debtors' Largest Unsecured Creditors:

     A. Waterlink, Inc.

Entity                                Claim Amount
------                                ------------
Douglas G. Dellmore                   $894,308
2 Wakerobin Court
The Woodlands, TX 77380

Norman E. Dupuis                      $894,308
9 Darling Street
Nantucket, MA 02554

T. Scott King                         $878,667
4571 Windstream Lane
Brecksville, OH 44141

Brantley Venture Partners III, LP     $500,000
20600 Chagrin Blvd.
Suite 1150
Cleveland, OH 44122

CID Equity Capital V, LP              $500,000
One American Square, Suite 2850
Box 82074
Indianapolis, IN 46282

Mark Brody                            $362,083
9355 Roryanna Drive
Chardon, OH 44024

Charles F. Bolin                      $298,103
623 Brook Hollow Drive
Conroe, TX 77385

Lionel M. Schooler                    $119,241

Gerry J. Schwartz                      $59,621

J. Scott Campbell                       $2,981


     B. Waterlink Management, Inc.

Entity                                Claim Amount
------                                ------------
Western Reserve Pension Services      $11,583

Burns Doane Swecker & Mathis LLP       $2,848

Business Wire                            $928

Intercall                                $920

American Stock Transfer                  $650

Professional Claims Management           $400

Graphic Enterprises- supplies            $338

Graphic Enterprises- copier              $289

Sand Rock Mineral Water Co.               $13


     C. Barnebey Sutcliffe Corporation

Entity                                Claim Amount
------                                ------------
Engelhard SC                          $277,543
22488 Network Place
Chicago, IL 60673

Carbon Activated                      $142,865

Envirotrol                            $104,829

Sutcliffe Carbons                     $100,907

Beijing Haijin Jie Chang Co.           $89,700

C&R Inc.                               $72,456

Zuoyun Hong Tai Environmental          $69,600

California Carbon Co., Inc.            $68,400

Valvax                                 $56,592

Nortis Americas                        $45,120

Storsach                               $35,609

Ashland Chemical Co.                   $31,250

Hexacomb Corporation                   $28,305

Performance Equipment                  $24,751

Base 2 Marketing                       $24,116

Laju Teknik SDN.BHD                    $17,400

Purolater Products-NV                  $15,895

Thermal Processing Solutions           $14,468

Berenfield Containers                  $13,127

Columbus Paper Box                     $13,000


WEIRTON STEEL: President & CEO John H. Walker Resigns
-----------------------------------------------------
John H. Walker announced his resignation as Weirton Steel Corp.
(OTC Bulletin Board: WRTL) president and chief executive officer.

Walker has agreed to remain in his position until the company's
board of directors names his successor. His future plans were not
disclosed.

"I've had several employment opportunities. But last year, I
decided to remain with the company to complete our out-of-court
restructuring program and this year, I remained to ensure the
company would move forward with its current in-court
reorganization. Now that the company has received its final court
approval for its debtor-in-possession financing facility, I am
confident it is headed in the right direction. Therefore, I've
decided it's now time for me to pursue other options," Walker
said.

On May 19, Weirton Steel filed a voluntary petition to reorganize
itself under Chapter 11 bankruptcy proceedings.

"Since 1998, given the steel import crisis and other major
challenges, 36 steel companies filed for bankruptcy before Weirton
Steel did. Therefore, no one should have been surprised by our
filing. I'm proud of our employees who helped us stay out of
bankruptcy for the three years prior to our filing - something
that has bewildered industry analysts and the competition. I'm
sure our employees will muster that same determination to
reorganize and emerge from bankruptcy," Walker commented.

"I sincerely appreciate the support I've received during my years
here. I wish the very best for the company, its employees and the
good people of the Upper Ohio Valley."

Walker, 45, was named president of Weirton Steel in March 2000. He
was appointed chief executive officer in January 2001, and shortly
thereafter, named to the company's board of directors, a position
he also has vacated.

"John has been an outstanding and decisive leader during difficult
times for Weirton Steel and the U.S. steel industry. He is
respected and supported by all of the company's stakeholders,"
said Richard R. Burt, Weirton Steel's chairman of the board.

"John earned a reputation on Capitol Hill and within the Bush
administration as an effective, no-nonsense advocate on behalf of
the domestic steel industry. He also had a good and constructive
rapport with the rank and file, something not seen in the
executive ranks for many years. We thank him for his service to
the company and the industry. We will miss John, but wish him the
very best in his future endeavors."

Among his accomplishments at Weirton Steel, Walker imposed a
business strategy focused on growing the company's tin mill and
value-added product lines while drifting away from commodity
products. The company is the second largest domestic tin mill
products producer.

Walker also guided the company through an out-of-court
restructuring process from 2001 through this year. The
restructuring dramatically enhanced the company's liquidity by
securing new bank and vendor financing, lowering employment costs
through new negotiated labor agreements and reducing its public
debt through public debt exchanges. This year, Walker led another
cost-containment campaign which reduced the company's expenses by
$38 million by addressing wage and pension issues.

In addition, Walker was instrumental in ensuring that TMP were
included under President Bush's current steel tariff relief
program which began last year.

Nearly one week before tariffs were imposed on various types of
steel products, Walker discovered that federal officials had not
recommended to Bush that a tariff be placed on TMP. Walker led an
eleventh-hour campaign to have the TMP issue brought before the
president which resulted in tariffs being placed on the products.

Walker originally joined Weirton Steel in 1988 when he was named
executive assistant to the president. In 1990, he became director
of operations planning before assuming subsequent positions as
general manager of operations in 1994 and vice president of
operations in 1995.

In 1996, Walker left Weirton Steel to accept the position of vice
president of operations at Kaiser Aluminum in Spokane, Wash., and
within one year was named president of its flat-rolled products
division. He remained in that role until returning to Weirton
Steel in 2000.

Walker, who also serves as a board member with United Airlines,
rejected an offer in 2002 to become UAL's chief executive officer.
Weirton Steel, which employs 3,500 workers, is the sixth largest
U.S. integrated steel company and produces hot-rolled, cold-
rolled, galvanized and TMP.


WHEELING-PITTSBURGH: Reaches New Labor Agreement with USWA
----------------------------------------------------------
Wheeling-Pittsburgh Corporation has reached agreement on a new
labor contract with the United Steelworkers of America, pending
ratification by the Union's membership.

"Achievement of this labor agreement is a significant step toward
our ultimate goal of emerging from bankruptcy as a competitive
steel products company," said James G. Bradley, President and CEO.
"Our agreement is consistent with the template that has been
established in the industry and will provide Wheeling-Pittsburgh
with the flexibility and cost savings associated with other
recently negotiated labor agreements."

A ratification vote involving the company's 3,200 USWA-represented
employees is expected in the near future. Details of the agreement
will not be released at this time.

A new labor agreement was one of the Emergency Steel Loan
Guarantee Board's conditions when it approved Wheeling-Pittsburgh
Steel's $250 million loan guarantee application in March. The
company's Plan of Reorganization calls for it to retire one of its
two existing blast furnaces and replace it with a state-of-the-art
electric arc furnace capable of using both scrap steel and molten
iron as raw material.

Wheeling-Pittsburgh is the nation's seventh largest integrated
steelmaker. It filed for bankruptcy protection in November 2000.


WHEELING: USWA Says New Agreement will Set Stage for Emergence
--------------------------------------------------------------
The United Steelworkers of America has reached a tentative
agreement on the terms of a new labor contract with Wheeling-
Pittsburgh Steel Corp. (NYSE:WHX), union negotiators announced.

"Steelworkers at Wheeling-Pitt have set a new milestone in the
reorganization of the American steel industry," said USWA
international president Leo W. Gerard.

"If the new agreement is ratified," he said, "Wheeling-Pittsburgh
will become the first major integrated steelmaker to successfully
reorganize and emerge from bankruptcy since the current steel
crisis began in 1998."

Some 3,200 Steelworkers at the company's operations in Ohio, West
Virginia and Pennsylvania will decide the fate of the tentative
agreement in a mail-ballot referendum over the next several weeks.

A new labor agreement was one of the conditions set by the federal
Emergency Steel Local Guarantee Board when it approved Wheeling-
Pittsburgh's application for a $250 million loan guarantee in
March. Both the loan guarantee and the new labor agreement are
necessary for Wheeling-Pittsburgh to emerge from bankruptcy. With
both of these conditions met, the company will be able to emerge
from bankruptcy and avoid liquidation and the shutdown of the
plants.

"This agreement will allow a restructured company to come out of
bankruptcy by the end of July with sufficient capital not only to
continue operations, but to make major improvements like the
construction of a new electric arc furnace," said Dave McCall,
Director of USWA District 1 and the union's chief negotiator at
Wheeling-Pittsburgh Steel.

McCall said that negotiators restructured the agreement consistent
with the industry standards established by the union's recently
ratified agreements with International Steel Group and U.S. Steel,
allowing Steelworkers at Wheeling-Pitt to be more productive and
effective.

The new agreement "is the only guarantee that steelmaking will
continue in the Valley both in the immediate future and for the
long term," he said.

Details of the new agreement will only be released after the
union's membership has been informed and has had the opportunity
to discuss its terms.


WHEELING-PITTSBURGH: Amends Northrop Gruman Outsourcing Pact
------------------------------------------------------------
Wheeling-Pittsburgh Steel Corp. asks Judge Bodoh to approve,
effective on consummation of the Plan of Reorganization, the
amendment of an Outsourcing Agreement between WPSC and Northrop
Gruman Space & Mission Systems Corp., formerly named TRW Inc., and
the assumption of the Outsourcing Agreement as amended.

In November 1998, WPSC signed an Outsourcing Agreement with NGMS
under which NGMS agreed to take over certain technology and
processing functions and to arrange significant upgrades in WPSC's
computer processing systems and software.  The Outsourcing
Agreement specified the services to be provided by NGMS and the  
monthly fees that were to be paid for those services.  WPSC and
NGMS have now negotiated an amendment to the Outsourcing Agreement
to extend its term and also to conform the provisions of the
agreement to WPSC's expected computer processing needs.

The Amended Outsourcing Agreement that WPSC and NGMS have
negotiated will alter the services that NGMS provides to WPSC, and
also will change the monthly fees to be paid by WPSC.  Since the
contract involves a substantial ongoing obligation, the parties
have further agreed that the assumption of the contract will be
conditioned upon consummation of WPSC's plan of reorganization.

The Amended Outsourcing Agreement will permit WPSC to continue to
receive essential services that will be better tailored to WPSC's
current needs, at costs that WPSC believes are lower than the
costs at which WPSC could provide such services itself or at which
WPSC could obtain services from others.  The assumption of the
Amended Outsourcing Agreement will be beneficial to the estate for
the same reasons, and will not require any payments other than the
specific payments set out in the Amended Outsourcing Agreement
itself.

The services performed and to be performed by NGMS arise from
responsibility for providing mainframe processing support services
for WPSC.  These include mainframe applications help desk,
printing, tape operations, DASD operations, job queue operations
support, data security, technical support, disaster recovery, and
facilities support. Furthermore, NGMS has and will provide server
operations, including server applications help desk, printing,
back-up operations, job queue operations support, data security,
technical support, disaster recovery planning, policy and
procedure support for NGMS-implemented applications, and
facilities support.

Under the amendment, NGMS will provide a mechanism allowing WPSC
to request or approve new Information Technology work,
enhancements or support activities involving efforts estimated to
exceed 20 hours of labor and the implementation of new Information
Technology or services that are otherwise not part of the work
under this agreement.

Monthly service charges are:

             Month                        Service Charge Amount
             -----                        ---------------------
     July 2000 to  July 2003                    $1,256,658
     August 2003 to November 2004               $1,242,483

Beyond November 2004, WPSC may further extend this agreement for
an additional year at the same monthly service charge applicable
to the period ending November 2004. (Wheeling-Pittsburgh
Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service,
Inc., 609/392-0900)  


WINSTAR: Chap. 7 Trustee Sues to Recover $49 Million Transfers
--------------------------------------------------------------
Chapter 7 Trustee Christine C. Shubert in the bankruptcy cases
Winstar Communications, Inc. and its debtor-affiliates, pursuant
to Sections 547, 548 and 550 of the Bankruptcy Code, wants to
recover prepetition payments totaling $49,208,084.44 made to 58
vendors within the 90-day period prior to the Petition Date.  Ms.
Shubert alleges that the payments were preferential because they
allowed the 58 Vendors to recover more than their fellow unsecured
creditors.

Sheldon K. Rennie, Esq., at Fox Rothschild O'Brien & Frankel LLP,
in Wilmington, Delaware, informs the Court that during the period
on or within 90 days before the Petition Date, the Debtors
issued and authorized payment to certain of their creditors by
check, wire transfer or otherwise.

During this Preference Period, the Debtors made transfers of
property to or for the benefit of these vendors:

     Vendors                                Transfer Amount
     -------                                ---------------
    Accusys International Corporation          $27,792.00
    American Express                           193,494.05
    Americon Management, LLC                    61,607.50
    Angstrom Networks, Inc.                  1,797,664.00
    Bechtel Group, Inc.                      2,319,943.77
    BTI                                        117,683.19
    Digital Microwave Corp.                  9,822,260.30
    Executive Search Group                      27,000.00
    Florida Power and Light Company             29,344.33
    Fortrex Technologies, Inc.                  88,864.96
    Free State Systems                          29,610.00
    G.S. Electric Co.                          117,364.00
    Gensler                                    101,782.49
    Georgetown Discoveries LLC                 100,232.00
    Gotech Consulting, Inc.                     41,520.00
    Graeff & Associates                         38,703.40
    Guild Technologies Ltd                   1,014,359.20
    Kaiser Foundation Health Plan, Inc.        228,911.26
    Kaye-Smith                                 123,282.26
    Kukulica Associates                         95,439.12
    Larkin, Hoffman, Daly & Lindgren, Ltd.       3,689.55
    Lucent Technologies, Inc.               28,908,624.46
    Marconi Communications, Inc.               810,092.55
    Met Life                                    55,500.00
    MIE Properties, Inc.                        11,432.50
    Productivity Management Associates          92,477.36
    Retail L.B.-WTIBU                            5,985.99
    RIA Group                                    3,343.43
    Rodney Lorimor                               4,050.00
    Roediger Construction, Inc.                 48,729.26
    Sales Talent, Inc.                           8,000.00
    Sibson & Company, LLC                      136,818.84
    Sneller Systems, Inc.                       16,131.62
    Specialized Products Company                40,161.07
    Sprint North Supply                          4,810.80
    Stackig/TMP                                 67,706.11
    Standard Sheet Metal                         8,600.00
    Strategic Tenant Services                    5,251.43
    Tech Data Corporation                        8,868.76
    TechPoint Solutions, Inc.                   35,729.92
    Temporary Excellence of New York, Inc.      14,777.00
    The Phillips Group                          10,000.00
    TMP Integrated Marketing Comm.              10,096.51
    Total Upgrade Solutions, Inc.                9,868.50
    T-Rex Productions                            2,650.00
    United Express Radio Group, Inc.           102,015.94
    United Express Radio Group, Inc.           177,015.94
    United Fire Protection Corp.                 5,806.12
    United States Company of New York           48,149.75
    Urban Data Solutions, LLC                2,025,951.42
    Utah Power                                  12,340.14
    Veca Electric Company, Inc.                 83,143.82
    Video Monitoring Services of America, L.P.  12,554.79
    Walter, Conston, Alexander & Green, P.C.     9,169.69
    White and Case                              13,473.40
    Wilmer, Cutler & Pickering                   4,056.00
    Wirtz Realty Corp.                           7,203.94
    Women's World News                           6,950.00
                                           --------------
                                           $49,208,084.44
(Winstar Bankruptcy News, Issue No. 44; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   


WORLDCOM: Shareholders Ask Sprint Shareholders to Join Boycott
--------------------------------------------------------------
A group of WorldCom/MCI, Inc. (OTC Bulletin Board: WCOEQ, MCWEQ)
stockholders is inviting stockholders of Sprint (NYSE: FON) to
join in a threatened boycott of the 'new MCI'.

"The WorldCom bondholders have created a bankruptcy reorganization
plan that would essentially eliminate WorldCom/MCI's debt," said
Neal Nelson, Spokesperson for the WorldCom/MCI Stockholders Group,
"but competition from this virtually debt free MCI could someday
force Sprint into bankruptcy."

"This reorganization plan would transfer ownership of the 'new
MCI' to the current bondholders and leave the current WorldCom and
MCI stockholders with nothing," continued Nelson. "The
stockholders favor an alternate plan with 50% debt reduction,
where the bondholders would get 50% ownership of the new company
and the current stockholders would be given 50% equity in the new
firm."

"Through total domination of the bankruptcy committees, the
bondholders have prevented consideration of a compromise plan,"
added Nelson. "The only avenue left for effective protest against
this plan is to threaten a boycott of the 'new MCI'".

Any current, or possible future, WorldCom/MCI customer can help
support the WorldCom/MCI stockholders by sending an empty email
message to: mailto:cancel.mci@nna.com

By sending an email, an individual would be stating that, if the
WorldCom bankruptcy plan is approved in its current form, that
individual would not intend to do business with the "new MCI".

More information about this threatened boycott can be found on the
WorldCom/MCI Stockholder Web Site at http://www.wcom-iso.com

Stockholders that are interested in the group, but do not have
access to the World Wide Web, can contact the group's
spokesperson, Neal Nelson, at (847) 851-8900, email: neal@nna.com

The WorldCom/MCI stockholder group is totally independent and is
not sponsored by, associated with or endorsed by WorldCom/MCI,
Inc., any of its officers or affiliated companies.


WORLDCOM INC: Brings-In Stinson Morrison as Special Lit. Counsel
----------------------------------------------------------------
Worldcom Inc. and its debtor-affiliates ask the Bankruptcy Court
for permission to employ and retain Stinson Morrison Hecker LLP as
special litigation counsel to prosecute claims objections in the
Debtors' Chapter 11 cases, nunc pro tunc to April 4, 2003, the
date that the Firm began working on claims objections.  The
Debtors have previously employed Stinson as an ordinary course
professional regarding commercial and employment-related civil
litigation.  The Debtors now seek to modify Stinson's employment
to include the role of special counsel to prosecute claims
objections.

Alfredo R. Perez, Esq., at Weil Gotshal & Manges LLP, in New
York, explains that the Debtors have selected Stinson as special
counsel because of the Firm's knowledge and expertise.  Stinson
has substantial bankruptcy experience and has litigated in many
bankruptcy courts.  In addition, as special counsel for the
Debtors, the Firm is familiar with the Debtors' businesses,
practices and personnel.  As a result, the Debtors believe that
Stinson is both well-qualified and able to represent them in a
most efficient and timely manner.  Stinson has the necessary
background to deal effectively with all of the potential legal
issues and problems associated with the claims objection process
in these cases.

Stinson Partner Mark A. Shaiken, Esq., assures the Court that the
Firm is a "disinterested person" as that term is defined in
Section 101(14) of the Bankruptcy Code, as modified by Section
1107(b) of the Bankruptcy Code.  In addition, Stinson does not
hold or represent an interest adverse to the Debtors' estates
that would impair the Firm's ability to objectively perform
professional services for the Debtors, in accordance with Section
327 of the Bankruptcy Code.  Moreover, Stinson has not provided,
and will not provide, professional services to any of the
creditors, other parties-in-interest, or their attorneys with
regard to these Chapter 11 cases.  However, Stinson represents or
has represented certain parties that are or were adverse to the
Debtors and the Debtors' bankruptcy estates in unrelated
transactions or matters, including:

    A. Top Creditors: Verizon Wireless, Sprint, Qwest, Cisco Inc.,
       AT&T, E.spire Communications Inc., CenturyTel of Washington
       Inc., Nortel Networks Inc., Compaq Computer Corp., American
       Airlines, CTI, Florida Dept. of Revenue, Williams
       Communications Inc., Modis Professional Services, Sun
       Microsystems Inc., Nationwide Credit Inc., York
       International Corp., Covad Communications, KMC Telecom II
       Inc., and Accenture LLP;

    B. Unsecured Creditors: Deutsche Bank, ABN Amro, Citibank,
       Fleet National Bank, SunTrust Bank, Bank of Nova Scotia,
       Bank One, Mellon Bank, Wells Fargo, Embratel Participacoes,
       AMR Corp., and Hewlett-Packard;

    C. Bondholders: JP Morgan/Chase, State Street, Morgan Stanley,
       Goldman Sachs & Co., Northern Trust Bank of Arizona,
       Salomon Smith Barney, Lehman Bros., Banc of America, Merill
       Lynch, UMB Bank, United Bank of Missouri, American Express,
       UBS Warburg LLC, PNC Bank, Prudential Securities, Suntrust
       Bank, Fleet National Bank, First Union, AG Edwards & Sons
       Inc., and LaSalle Bank.

The Debtors have been informed that Stinson requested
compensation for the professional services rendered to the
Debtors based on the time actually expended by each assigned
staff member at each staff member's customary daily billing rate.
The Debtors have agreed to compensate Stinson for professional
services rendered at a blended billing fee rate of $195 per hour.
In addition to discharging its duties at the Blended Rate,
Stinson charges for reimbursement of out-of-pocket expenses
including secretarial overtime, travel, copying, outgoing
facsimiles, document processing, court fees, transcript fees,
long distance telephone calls, postage, messengers, and
transportation, and other similar expenses. (Worldcom Bankruptcy
News, Issue No. 30; Bankruptcy Creditors' Service, Inc., 609/392-
0900)   


W.R. GRACE: Wants Nod for Voluntary Trust Fund Contributions
------------------------------------------------------------
The W. R. Grace Debtors ask Judge Fitzgerald to authorize -- but
not require -- them to make annual contributions of approximately
$40,000,000 in both 2003 and 2004 into a trust that funds the
defined benefit retirement plans covering their employees, in
accordance with a specific "funding strategy."

The Grace Retirement Plans currently consist of 19 funded,
defined benefit pension plans, each of which is qualified under
Section 401(k) of the Internal Revenue Code.  In reviewing the
funding requirements for the Grace Retirement Plans, the Debtors
included these measures of liability:

       (a) the "actuarial present value of accumulated plan
           benefits" under Financial Accounting Standard 35;

       (b) the "accumulated benefit obligation" under FAS 87, and

       (c) the "projected benefit obligation" under FAS 87.

The most significant Grace Retirement Plan is the W. R. Grace &
Co. Retirement Plan for Salaried Employees, which comprises
approximately 83% of the assets, 85% of the Economic Obligation,
84% of the ABO, and 85% of the PBO.

All of the assets of each Grace Retirement Plan are held in a
master trust at The Northern Trust Company.  Within that trust,
Northern Trust separately accounts for assets allocated to each
Grace Retirement Plan.

            Employees Covered by Grace Retirement Plans

The Debtors have a long history of providing employees with
defined benefit pension plans.  For instance, the Grace Salaried
Plan has been in existence since at least 1959.  Virtually all
active employees of the Debtors are currently covered by one of
the Grace Retirement Plans and have been accruing benefits under
a Grace Retirement Plan for their entire period of employment
with the Debtors and expect to continue to accrue such benefits
throughout their employment with the Debtors.  The Grace Salaried
Plan alone covers over 2,160 active salaried employees -- of a
total U.S. workforce of approximately 3,400 employees -- or 64%
of the Debtors' domestic workforce.

Many of the Grace Retirement Plans are maintained pursuant to
collective bargaining agreements.  Unions representing the
Debtors' employees consistently for many years have placed a high
priority upon the continuation and protection of accruals under
the Grace Retirement Plans and the periodic enhancement of
benefits under those Plans.  Virtually all of the Debtors'
employees consider continued benefit accruals under the Grace
Retirement Plans and the continued financial viability of those
Plans important aspects of their employment relationship with the
Debtors and a key component of their financial plan for
retirement.

Employers that are considered competitors or peers of the
Debtors' businesses with respect to recruitment and retention of
employees, generally maintain defined benefit pension plans for
their employees.  According to Hewitt Associates LLC, a
nationally recognized benefits consulting firm, 23 of 26 (or 88%)
of the companies identified by the Debtors for purposes of
employee benefit comparisons maintained one or more defined
benefit plans during 2002.  As a result, the Debtors believe that
continued coverage under, and the financial viability of, the
Grace Retirement Plans are vital components to maintain
competitive retirement benefits, which is key to attracting and
retaining high-quality employees for the Debtors' businesses.

During recent months, as a result of the current underfunded
status of certain Grace Retirement Plans including the Grace
Salaried Plan, the Debtors' employees have expressed concerns
regarding the continued viability of the Grace Retirement Plans.
The Debtors' management, therefore, believes that failure to
restore the funded status of the Grace Retirement Plans will have
a substantial negative impact on the morale of the Debtors'
workforce, and thereby the productivity of the Debtors' business.

             Funded Status Of The Grace Retirement Plans

The decline in the global equity markets over the past three
years has had a substantial impact on the funding status of the
Grace Retirement Plans.  As of January 1, 2003, the Grace
Retirement Plans were underfunded, in the aggregate, by over
$120,000,000.  The range of underfunding of the Salaried
Retirement Plan alone is over $110,000,000.

To make up for this significant underfunding consistent with the
Debtors' business objectives, the Debtors have developed a
strategy for funding the Grace Retirement Plans.  The Overall
Funding Strategy satisfies each of these objectives:

       (a) contribute at least the annual required minimum for
           each Grace Retirement Plan;

       (b) avoid the requirement to provide an Underfunding
           Notice to Grace Retirement Plan participants;

       (c) accomplish these objectives through generally level
           contributions;

       (d) eliminate the underfunded status of the Grace
           Retirement Plans by 2007; and

       (e) allow for re-evaluation of all aspects of the funding
           strategy in early 2005, prior to making any
           contribution in that year.

Ann Rachel Quesada of AON Consulting, the "enrolled actuary" of
the Grace Retirement Plans, estimates that the Debtors will be
required to contribute approximately $500,000 in 2003 and
approximately $81,100,000 in 2004 to comply with the minimum
funding requirements under 26 U.S.C. Sec. 412.  The Grace Actuary
has also determined that, even if the Debtors satisfy the Minimum
Funding Requirements of approximately $500,000 in 2003, the
Debtors will still be obligated, pursuant to Section 4011 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C. Sec.
1311), to inform the participants in the Grace Salaried Plan and
several other Grace Retirement Plans in writing that their Plan
is underfunded for the 2004 plan year.

To avoid the requirement to provide the Underfunding Notice for
the 2004 plan year, the Debtors would need to make a minimum
contribution of approximately $16,000,000 prior to September 15,
2003.  If required, the Underfunding Notice would be sent to
approximately 2,500 or 75% of the Debtors' active employees.  If
the Debtors make the minimum contribution in 2003, to avoid the
requirement to provide the Underfunding Notice for the 2005 plan
year, the Debtors would need to make a minimum contribution
totaling approximately $63,400,000 during 2004.

                     2003-2004 Funding Strategy

To implement the Overall Funding Strategy, the Debtors will
contribute $40,000,000 to the Grace Retirement Plans during 2003
and anticipate contributing approximately $40,000,000 in 2004.
The 2003 Funding will:

       (a) satisfy the Minimum Funding Requirement for 2003,

       (b) avoid the need to provide the Underfunding Notice for
           the 2004 plan year, and

       (c) begin to satisfy the Minimum Funding Requirement
           for 2004.

                  Debtors' Sound Business Judgment

The Debtors currently expect that the 2004 Funding will satisfy
the Minimum Funding Requirement for 2004 and avoid the need to
provide the Underfunding Notice for the 2005 plan year.  The
2003-2004 Funding Strategy will permit the Debtors to begin the
process of fully funding the Grace Retirement Plans by 2007,
until at least the re-evaluation of the Overall Funding Strategy
in early 2005.

The Debtors have determined that the 2003-2004 Funding Strategy
is an effective approach to funding the Grace Retirement Plans
because the legal funding requirements will be satisfied in a
manner that will also address the employee morale and
competitiveness issues.  In particular, the 2003-2004 Funding
Strategy represents the beginning of a systematic method to
eliminate the underfunding of the Grace Retirement Plans within a
reasonable period of time and demonstrates a commitment by the
Debtors to fund those Plans by making significant contributions
in the current year.

The Debtors have also determined that the 2003-2004 Funding
Strategy is effective from a cash flow management perspective
because it provides for making legally required contributions to
the Grace Retirement Plans and avoiding the Underfunding Notice
through level contributions over the period 2003-2004, and
providing for flexibility as a result of a scheduled re-
evaluation of all aspects of the Overall Funding Strategy in
early 2005.

The Debtors have determined that merely satisfying the Minimum
Funding Requirements each year would not address the concerns of
employees because no significant contributions would be made to
the Grace Retirement Plans for at least one year.  Moreover, only
satisfying the Minimum Funding Requirements would cause the
Debtors to incur the obligation to provide the Underfunding
Notice to Grace Retirement Plan participants.  In addition, the
Debtors' management has determined that implementing a strategy
that would merely satisfy the Minimum Funding Requirements each
year is not consistent with the Debtors' overall cash management
approach because of the potential for substantial variability in
required contributions from year to year.

The Debtors argue that, in their sound business judgment, the
implementation of then 2003-2004 Funding Strategy is the most
effective approach to funding the Grace Retirement Plans,
including the Minimum Funding Requirement.  The 2003-2004 Funding
Strategy allows for the funding of the Grace Retirement Plans in
a manner consistent with the Debtors' cash management approach,
while maintaining or improving the morale and productivity of the
Debtors' employees throughout the United States, as well as
maintaining competitive employee benefits vis-.-vis the Debtors'
competitors and peers.  The employees' morale, continued loyalty
to the Debtors and faith in the Debtors' management will be
greatly enhanced by the implementation of the 2003-2004 Funding
Strategy.  In the Debtors' business judgment, the implementation
of the 2003-2004 Funding Strategy is key to maintaining a
dedicated, motivated and loyal workforce in the Debtors' business
judgment.

In evaluating options with respect to funding the Grace
Retirement Plans, the Debtors have determined that:

       (a) the morale of the Debtors' employees is adversely
           affected by the current financial status of the Grace
           Retirement Plans and not addressing these employee
           concerns will lead to further erosion of morale and
           productivity and thereby have a negative impact on
           the Debtors' ability to successfully reorganize;

       (b) merely satisfying the Minimum Funding Requirements on
           an ongoing basis will not alleviate the employees'
           concerns, and

       (c) providing the Underfunding Notice to Grace Retirement
           Plan participants would heighten employees' concerns
           regarding the financial status of the Grace Retirement
           Plans, as well as the financial situation of the
           Debtors.

The Debtors have determined that a funding strategy that results
in level annual contributions would be a better cash flow
management strategy than an approach whereby contributions would
vary widely from year to year.  The Debtors have also determined
that a funding strategy should provide the ability to make
adjustments in future years through periodic re-evaluation.

Additionally, given the current status of the Chapter 11 cases,
the Debtors' management believes that it will be difficult to
maintain employee morale and loyalty if it does not continue to
meet the Minimum Funding Requirement and avoid sending the
Underfunding Notice.  The employees' morale, continued loyalty to
the Debtors and faith in the Debtors' management will be
furthered by implementing the 2003-2004 Funding Strategy because
it clearly signals the Debtors' commitment to continuing to
profitably grow their businesses for the benefit of the Debtors'
stakeholders, including their employees.

Clear business reasons exist to justify, under Section 363(b) of
the Bankruptcy Code, the Debtors' 2003-2004 Funding Strategy.
Continuing accruals under the Grace Retirement Plans and
addressing the underfunded status of those Plans are vital to
maintaining a focused and motivated domestic workforce. (W.R.
Grace Bankruptcy News, Issue No. 42; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


YELLOW PAGES: BB- Corp. Credit Rating Placed on Watch Positive
--------------------------------------------------------------
Standard & Poor's Ratings Services said it placed its 'BB-' long-
term corporate credit rating on Montreal, Quebec-based Yellow
Pages Group Inc. (YPG; formerly Bell Actimedia Inc.) on
CreditWatch with positive implications.

"The CreditWatch placement follows the filing of a preliminary
prospectus by the Yellow Pages Income Fund that will see the
current private equity holders' spin off a portion of YPG via a
publicly listed income fund," said Standard & Poor's credit
analyst Joe Morin. Assuming the transaction is concluded as
contemplated, YPG will see its consolidated debt balance reduced
to C$1.25 billion from about C$2.1 billion currently,
with the proceeds of the public equity offering as well as an
infusion of cash from the current private equity holders, being
used to reduce debt at the operating company level.

The debt will be held at a newly formed holding company, Yellow
Pages Group Holdings Inc., which will be rated following the IPO.
Standard & Poors expects to assign its 'BB+' long-term corporate
credit rating to YPG Holdings, assuming the transaction closes as
contemplated. In addition, Standard & Poor's expects to assign its
'BB+' rating to the company's proposed C$1.25 billion senior
unsecured credit facility.

The expected ratings on YPG Holdings reflect the company's leading
market position as Canada's largest directory publisher; its
strong brand equity and intellectual property ownership; its
exclusivity arrangements with incumbent telecom operator Bell
Canada; predictable revenue and EBITDA streams; and minimal
capital expenditures. The proposed transaction will result in a
significant reduction in pro forma leverage (debt to EBITDA)
to about 3.5x from about 6.25x currently, with a corresponding
improvement in debt service protection measures. The expected
improvement in the company's financial risk profile drives the
higher 'BB+' rating. These strengths are mitigated by the
company's limited operating experience as an independent company,
the lower growth industry in which it operates, and potentially
increasing competition in future.

YPG's predecessor company, Bell Actimedia, was spun out from Bell
Canada and BCE Inc. in November 2002, in a private equity sale to
Kohlberg Kravis Roberts & Co. and Teacher's Merchant Bank, with
BCE retaining a 10% interest. The company is the largest telephone
directories publisher in Canada, dominating the market in Ontario
and Quebec, where YPG has a 30-year exclusive arrangement as the
official directories' publisher for Bell Canada. It publishes more
than 200 directories with a circulation of about 17 million
reaching 97% of the population in its markets, and about 70% of
the population of Canada. Other markets include areas covered by
incumbent telephone companies in Atlantic Canada through its 12.9%
ownership in Aliant Actimedia Inc., as well as rural areas:
NorthwesTel Inc. (Yukon, Northwest Territories, and Nunavit),
NorthernTel Ltd. (Ontario), and Telebec Ltd. (Quebec). Following
completion of the IPO of the fund, ownership of the equity
investors will be reduced on a pro rata basis of the portion
offered to the public.


* BOND PRICING: For the week of June 30 - July 4, 2003
------------------------------------------------------

Issuer                                Coupon   Maturity  Price
------                                ------   --------  -----
Adelphia Communications               10.875%  10/01/10    60
Advanced Micro Devices                 4.750%  02/01/22    75
American Cellular                      9.500%  10/15/09    55
American and Foreign Power             5.000%  03/01/30    74
AMR Corp.                              9.000%  08/01/12    63
AMR Corp.                              9.000%  09/15/16    66
AnnTaylor Stores                       0.550%  06/18/19    66
Best Buy Co. Inc.                      0.684%  06/27/21    73
Burlington Northern                    3.200%  01/01/45    59
Calpine Corp.                          8.500%  02/15/11    71
Calpine Corp.                          8.625%  08/15/10    71
Charter Communications, Inc.           4.750%  06/01/06    67
Charter Communications, Inc.           5.750%  01/15/05    72
Charter Communications Holdings        8.625%  04/01/09    73
Charter Communications Holdings        9.625%  11/15/09    73
Charter Communications Holdings       10.000%  04/01/09    74
Comcast Corp.                          2.000%  10/15/29    33
Conseco Inc.                           8.500%  10/15/49    30
Conseco Inc.                           8.750%  02/09/04    28
Conseco Inc.                           9.000%  04/15/08    52
Continental Airlines                   6.748%  03/15/17    74
Continental Airlines                   7.033%  06/15/11    74
Cox Communications Inc.                0.348%  02/23/21    72
Cox Communications Inc.                2.000%  11/15/29    38
Cubist Pharmacy                        5.500%  01/01/08    74
Cummins Engine                         5.650%  03/01/98    74
Dynex Capital                          9.500%  02/28/05     2
Elwood Energy                          8.159%  07/05/26    72
Enron Corp.                            7.000%  08/15/23    20
Federal-Mogul Corp.                    7.500%  11/15/09    44
Finisar Corp.                          5.250%  10/15/08    74
Finova Group                           7.500%  11/15/09    44
Gulf Mobile Ohio                       5.000%  12/01/56    67
Health Management Associates Inc.      0.250%  08/16/20    64
HealthSouth Corp.                      7.625%  06/01/12    73
International Wire Group              11.750%  06/01/05    64
Kmart Corp.                            9.375%  02/01/06    20
Level 3 Communications Inc.            6.000%  09/15/09    73
Lehman Brothers Holding                8.000%  11/13/03    71
Liberty Media                          3.750%  02/15/30    65
Liberty Media                          4.000%  11/15/29    67
Loral Cyberstar                       10.000%  07/15/06    50
Lucent Technologies                    6.450%  03/15/29    68
Lucent Technologies                    6.500%  01/15/28    68
Magellan Health                        9.000%  02/15/08    42
Mirant Americas                        7.200%  10/01/08    61
Mirant Americas                        8.300%  05/01/11    59  
Mirant Americas                        8.500%  10/01/21    56
Mirant Americas                        9.125%  05/01/31    56
Mirant Corp.                           2.500%  06/15/21    70
Mirant Corp.                           5.750%  07/15/07    62
Missouri Pacific Railroad              4.750%  01/01/20    74
Missouri Pacific Railroad              4.750%  01/01/30    74
Missouri Pacific Railroad              5.000%  01/01/45    70
NTL Communications Corp.               7.000%  12/15/08    19
Northern Pacific Railway               3.000%  01/01/47    57
Southern Energy                        7.900%  07/15/09    52
United Airlines                       10.670%  05/01/04    11
Universal Health Services              0.426%  06/23/20    59
US Timberlands                         9.625%  11/15/07    58
Westpoint Stevens                      7.875%  06/15/08    21
Xerox Corp.                            0.570%  04/21/18    65

                          *********

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.

Bond pricing, appearing in each Thursday's edition of the TCR, is
provided by DebtTraders in New York. DebtTraders is a specialist
in global high yield securities, providing clients unparalleled
services in the identification, assessment, and sourcing of
attractive high yield debt investments. For more information on
institutional services, contact Scott Johnson at 1-212-247-5300.
To view our research and find out about private client accounts,
contact Peter Fitzpatrick at 1-212-247-3800. Real-time pricing
available at http://www.debttraders.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.

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., Trenton, NJ USA, and Beard
Group, Inc., Washington, DC USA. Yvonne L. Metzler, Bernadette C.
de Roda, Donnabel C. Salcedo, Ronald P. Villavelez and Peter A.
Chapman, Editors.

Copyright 2003.  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 ***