TCR_Public/000208.MBX         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Tuesday, February 8, 2000, Vol. 4, No. 27
  
                            Headlines

ACE BAKING CO: Files Chapter 11
AMERICAN ARCHITECTURAL PRODUCTS CORP.: S&P Cuts Rates
AMERISERVE: The Earthgrains Company Announces One-Time Charge
CELLNET DATA: Case Summary & 20 Largest Unsecured Creditor
CELLNET DATA SYSTEMS: Files Chapter 11

CRIIMI MAE: Criimi Mae Announces Agreement
GTS: Announces Sale of Phone Card Assets
ICO GLOBAL: Announces Definitive Agreement with McCaw
INCOMNET: Announces Filing of Reorganization Plan
IPM PRODUCTS: Case Summary

IPM SERVICE: Case Summary and 20 Largest Unsecured Creditors
IRIDIUM: McCaw Group Expected to Offer Financing for Iridium
KCS ENERGY: Court Sets February 25 as Hearing Date
KEY PLASTICS: Moody's Lowers Ratings(Senior Subordinated to Caa2)
MADISON RIVER CAPITAL, LLC: Moody's Assigns Caa1 To Senior Notes

NASHVILLE CABLE: Sprint Completes Purchase Of Nashville Cable
NATG HOLDINGS & ORIUS: Moody's Assigns B3 To Snr Sub Notes
NEXTWAVE: Asks Court To Reconsider
OMEGA HEALTHCARE: Moody's Lowers Ratings
POLARIS COMMERCIAL: 2 Classes Of Notes Trust On Review

PURINA MILLS: Motion To Pay Commitment Fees to GE Capital
READ-RITE CORPORATION: Moody's Lowers Ratings
RESOURCE BANCSHARES: Results For Fourth Quarter and Year End
RSL COMMUNICATIONS: Moody's Assigns B2 To Snr Nts
SAFELITE GLASS CORP.: Moody's Places Ratings On Review

TCC INDUSTRIES: DeRoeck and Thomajan Sell Shares of Stock
WESTERN DIGITAL: Reports Net Loss of $15M on Revenue of $560M

Meetings, Conferences and Seminars

                       *********

ACE BAKING CO: Files Chapter 11
-------------------------------
Ace Baking Company, the country's largest ice cream cone
manufacturer, has filed for chapter 11 bankruptcy protection.  
Ace had sales of approximately $ 50 million in 1999, short of its
projected goals, while its debts, according to Peter Blain, a
bankruptcy attorney representing the company, stood at $ 31.7
million to secured creditors and another $ 4 million in unsecured
debts.  The filing will give Ace protection while it reorganizes.  
Company owners had decided originally to sell all of the
company's assets, but the company's bankers would not agree to
provide financial support while buyers were identified.  Blain
said that the value of the company's assets has not yet been
determined, but that they are unlikely to be equal to or more
than the company's debt.

According to published reports, Ace will now focus on selling its
foodservices operation, which supplies cones under the Eat-It-All
brand to leading chains such as McDonald's, Baskin-Robbins, and
Dairy Queen.  Ace purchased the Eat-It-All brand two years ago
from sweetheart cup Company.  The company will look to come out
of the reorganization still owning its production operations that
manufacture cones for marketers in the frozen novelties industry.

Founded in 1948, Green Bay, WI-based Ace Baking Company has a
total of 300 employees at its cone manufacturing operations in
Chicago, Atlanta, and Dallas, and papermaking operations in
Owings Mills, MD.  Selling the foodservice operation may affect
the workers at the company's paper company, as the wrappings
produced there are for the foodservice cones made by Ace.  But
the 150 workers in the company's Green Bay facilities should
experience no changes as their production is for the novelties
business.


AMERICAN ARCHITECTURAL PRODUCTS CORP.: S&P Cuts Rates
-----------------------------------------------------
Standard & Poor's lowered its corporate credit and senior
unsecured debt ratings on American Architectural Products Corp.
to triple-'C'-minus from triple-'C'-plus. The ratings remain on
CreditWatch with negative implications where they were placed
Sept. 3, 1999. The rating actions were prompted by continued very
tight liquidity.

There is little availability under the company's bank credit
facility, and weak operating performance could cause the company
to again violate financial covenants. Proceeds from the sale of
Taylor Building Products helped American Architectural make the
December 1999 interest payment on its senior unsecured notes.

While the company has recently taken a number of steps to reduce
operating costs, such as downsizing and relocating its corporate
staff, it appears that further asset sales will be necessary to
meet operating needs and debt service requirements in the coming
months.

American Architectural manufactures windows and doors used
primarily in residential repair and remodeling and new
construction.

Formed in 1996 with the assets of several manufacturers, the
company expanded rapidly via acquisitions in 1997 and 1998, and
operations are yet to be fully integrated. Demand for the
company's products is cyclical, closely tied to the level of
interest rates and housing starts, and would be negatively
affected in an economic slowdown. Inability to improve liquidity,
or further deterioration in the financial profile during the next
few months, will result in another ratings downgrade, Standard &
Poor's said.


AMERISERVE: The Earthgrains Company Announces One-Time Charge
-------------------------------------------------------------
The Earthgrains Company (NYSE: EGR) announced that it will take
an unusual one-time charge in the fourth quarter of fiscal 2000
related to the bankruptcy filing of AmeriServe Food Distribution,
Inc.

The amount of the one-time pretax charge in the quarter ending
March 28, 2000, is $5.6 million.  AmeriServe distributes food,
including Earthgrains-produced bakery products, to leading fast-
food restaurants and foodservice operations in the United States.  
AmeriServe announced Feb. 1, 2000, that it had filed a voluntary
petition under Chapter 11 of the U.S. Bankruptcy Code.

Earthgrains is serving affected customers and expects that there
will be no material impact to ongoing operations.

Earthgrains, which had sales of $1.925 billion in fiscal 1999,
operates fresh-bakery and refrigerated-dough business in the
United States and Europe.


CELLNET DATA: Case Summary & 20 Largest Unsecured Creditor
---------------------------------------------------------
PARENT DEBTOR: CellNet Data Systems, Inc.
               125 Shoreway Road
               San Carlos, California 94070

DEBTOR AFFILIATES FILED SEPARATE 28 CHAPTER 11 PETITIONS

Bankruptcy Case Nos: 00-00845 to 00-00872

Type of Business: Parent company in the business of providing
utilities with local and wide area automated-meter-reading
networks, on a service contract basis, using low-cost fixed
wireless data communications networks.

Petition Date: February 4, 2000  Chapter 11

Court: District of Delaware      

Debtor's Counsel: Mark Thompson
                  Simpson Thacher & Bartlett
                  425 Lexington Avenue
                  New York, NY 10017
                  212-455-2000
    
                  Mark D. Collins
                  Richards, Layton & Finger, PA
                  One Rodney Square, PO Box 551
                  Wilmington, Delaware 19899
                  302-658-6541

Total Assets: $ 343,257,557
Total Debts:  $ 503,681,774

20 Largest Unsecured Creditors

HSBC Bank USA        Indenture Trustee    $ 377,333,227
Morgan Stanley Dean
Witter Funds        Sen Discount Note     $ 75,399,420
Putnam Funds         Sen Discount Note     $ 73,311,420
Merrill Lynch Funds  Sen Discount Note     $ 72,211,160
Fidelity Funds       Sen Discount Note     $ 56,631,200
VICTRON, INC.        Trade Debt             $ 3,097,680
AXONN CORP           Trade Debt               $ 576,685
TRIQUINT SEMI-
CONDUCTOR           Trade Debt               $ 488,118
United Healthcare    Employee Benefit         $ 428,774
PLEXTEK. LTD         Trade Debt               $ 315,958
SPECTRUM GEOPHYSICAL
INSTRUMENT          Trade Debt               $ 250,952
INTERCON SYSTEMS     Trade Debt               $ 224,171
AVNET ELECTRONICS    Trade Debt               $ 168,571
DELOITTE & TOUCHE    Professional Services    $ 144,671
SAP AMERICA, INC     Trade Debt               $ 125,504
AT&T                 Trade Debt               $ 120,615
CALIFORNIA CAPACITOR Trade Debt               $ 102,653
GREY ADVERTISING     Trade Debt               $ 101,929
JABIL CIRCUITS       Trade Debt                $ 86,474
BADGER METER INC     Trade Debt                $ 75,131
AROW COMPONENTS &
FASTENERS           Trade Debt                $ 71,893
PIONEER STANDARD
ELECTRONICS         Trade Debt                $ 65,005
DEL COLE MACHINING   Trade Debt                $ 62,197
DELL COMPUTER CORP   Trade Debt                $ 59,688
Penstock/Avnet       Trade Debt                $ 55,657


CELLNET DATA SYSTEMS: Files Chapter 11
--------------------------------------
CellNet Data Systems, Inc. (NASDAQ: CNDS) announced that it has
filed a voluntary petition for protection under Chapter 11 of the
United States Bankruptcy Code in the U.S. Bankruptcy Court in
Delaware.

As previously announced on February 1, 2000, CellNet's Board of
Directors approved a proposed asset acquisition by Schlumberger
Resource Management Services (RMS), a business unit of
Schlumberger Limited (NYSE: SLB), for $55 million in cash, the
repayment or assumption of certain secured financing in the
amount of approximately$120 million, and the assumption of
certain other liabilities. The Schlumberger RMS asset acquisition
of CellNet will be handled through the Chapter 11 filing and
should receive, subject to higher and better offers, final
approval by the Bankruptcy Court, a process that CellNet
anticipates completing by the end of April 2000.

If the Court approves the proposed transaction in its present
form, the CellNet 14% Senior Discount Notes and those liabilities
not assumed by Schlumberger RMS will share in the $55 million
cash noted above. Furthermore, there will be no value allocated
to the current equity of the CellNet common stock (NASDAQ: CNDS)
and the 7% Exchangeable Preferred Securities of CellNet Funding,
LLC (NASDAQ: CNDSP). The allocation of the distributions
(dividends)
held in escrow for CellNet Funding, LLC (NASDAQ: CNDSP) will be
subject to review by the Court.

In connection with the filing, Schlumberger RMS is providing
debtor-in-possession (DIP) funding to enable CellNet to continue
its ongoing operations, including, but not limited to, the
ongoing provision of network services, the deployment of networks
for its current customers, and the marketing of its network
services to prospective customers. Upon closing of the
acquisition, the DIP funding will be extinguished.


CRIIMI MAE: Criimi Mae Announces Agreement
------------------------------------------
Criimi Mae Inc., Rockville, Md., announced that it and Morgan
Stanley & Co International Ltd. have agreed to a final settlement
of an adversary proceeding brought by Criimi Mae in the
bankruptcy case involving it and its subsidiaries, according to a
newswire report. The agreement calls for the sale of seven
classes of subordinated commercial mortgage-backed securities
that were part of the financing by Morgan Stanley, together with
the related unrated bond. The agreement also calls for a final
settlement of all adversary proceedings between the two parties;
Criimi Mae has filed a motion with the bankruptcy court asking
Bankruptcy Judge Duncan W. Keir to approve the agreement. A
hearing is scheduled for. Feb. 28. (ABI 07-Feb-2000)


GTS: Announces Sale of Phone Card Assets
----------------------------------------
Global Telecommunications Solutions Inc. (GTS) announced that
certain of its subsidiaries involved in the traditional phone
card business and currently in bankruptcy have entered into an
agreement to sell all of their assets to JD Services Inc., a
prepaid phone card provider in Salt Lake City, according to a
newswire report. The sale of the assets is the final step in the
discontinuance of the company1s legacy phone card business. Upon
completing the sale, the company will focus on developing its
other subsidiaries. JD Services will pay an aggregate of $2.1
million as follows: (i) forgiveness of approximately $750,000 in
debtor-in-possession financing previously provided to the
subsidiaries, and (ii) an auction of about $1.35 million of the
company1s obligation to provide telecommunications services to
previously activated phone cards. (ABI 07-Feb-2000)


ICO GLOBAL: Announces Definitive Agreement with McCaw
-----------------------------------------------------
ICO Global Communications, the global mobile communications
company, announced that Eagle River Investments LLC,
telecommunications pioneer Craig McCaw's private investment
company, has entered into a definitive agreement with
ICO under which Eagle River, among other things, acknowledges the
completion of the due diligence in connection with the McCaw-led
investment in ICO and agrees that all conditions to the funding
of$275 million in Trance II funding have been waived.

The definitive agreement remains subject to U.S. Bankruptcy Court
approval.

On December 3, the U.S. Bankruptcy Court in Wilmington, Delaware,
granted final approval to ICO's debtor-in-possession, or DIP,
financing in the amount of $500 million. The first tranche of
$225 million was funded by a group of investors led by Craig
McCaw and Eagle River.

The $275 million second tranche from McCaw and his affiliates
Eagle River and Teledesic LLC was subject to the satisfaction of,
among other things, the completion of due diligence. These
conditions have now been satisfied, and due diligence has been
successfully completed. ICO may now begin drawing on the second
tranche of $275 million.

In October 1999, McCaw and his affiliates also agreed to
underwrite an additional $700 million for exit financing, to the
extent that this financing is not provided by other investors.
The exit financing is expected to be completed during the second
quarter of 2000, upon court approval and consummation of the ICO
reorganization plan. This portion of the financing plan will
include participation by ICO's existing creditors and
shareholders.

In connection with entering into the definitive agreement with
Eagle River, ICO has entered into memoranda of understanding with
Hughes Space & Communications and NEC, which would modify the
existing agreements with these vendors. These amendments also
remain subject to U.S. Bankruptcy Court approval.

The McCaw-led investment will be applied toward the completion of
the build-out of ICO's system and toward the company's working
capital requirements prior to the launch of its global mobile
satellite communications services.

Richard Greco, Chief Executive Officer of ICO, said: "Our
financing - and future - is secure. Now we can focus all of our
attention on completing what we set out to do - to develop a
system that will offer seamless, high-quality global
communications to customers worldwide. This is a great day for
ICO, and an even better day for the future of communications."


INCOMNET: Announces Filing of Reorganization Plan
-------------------------------------------------
Incomnet Communications Corp. ("ICC"), a wholly owned subsidiary
of Incomnet Inc., which was previously listed on the Nasdaq Small
Cap Market, Friday announced that it has filed a joint Plan of
Reorganization with the U.S. Bankruptcy Court.

According to company executives, the Plan will be reviewed and is
expected to be finalized over the next several months.

The Plan provides for ICC, a provider of long distance and other
telecommunications services, to emerge from Chapter 11 as a
privately held company.

"We're pleased to report that we are preparing to emerge from the
Chapter 11 process in the near future," said George Blanco, chief
operating officer and executive vice president of ICC. "We
believe that we have taken the necessary steps to stabilize and
improve ICC's performance, and that we are well positioned to
experience dramatic growth through the launch of new products and
an improved sales compensation plan."

As previously announced, ICC and its parent each filed for
Chapter 11 protection on Sept. 2, 1999. The turnaround and
reorganization plan focuses on the core business and lays out a
plan of action to achieve significantly improved financial
results, cash flow and long-term viability.

A new multilevel compensation program and a series of
telecommunications and Internet products were recently introduced
which the company anticipates will result in growth potential.
Specific cost reductions were implemented recently to reduce
ICC's operating losses and further process improvements and cost
rationalizations continue to be evaluated.

Incomnet's structural and product/services improvements include:

--   Restructured Independent Representative compensation plan:  
The new independent representative compensation plan incorporates
two elements:  

(1) front-end compensation focused on customer acquisition and
organizational growth development, and

(2) residual income based on customer product usage of products
including:  long distance, Internet, calling cards and Internet
product purchases.

--   Lower transmission costs through improved carrier pricing:  
The company continually seeks to reduce its transmission costs by
negotiating lower rates with carriers. The company has recently
renegotiated lower long-distance rates with WorldCom and will
continue to pursue lower rates through other strategic alliances.

--   Launch of DSL:  The company is introducing DSL service for
both business and residential customers. ICC guarantees fully
symmetric high-speed access for Internet home and business users,
with round-the-clock network monitoring. DSL provides optimum
direct access to the Internet without dial-up and disconnection.

--   Relaunch of Portfolio Business Product:  ICC is relaunching
Portfolio Business Product, a restructured package of
telecommunications products for small and mid-sized businesses,
including local and long distance, in and outbound 800 services,
Internet, paging and specialty services ("Virtual 1").

--   Agent Program:  ICC is initiating the development of an
indirect sales channel intended to attract agents and
associations as viable sales partners. The company is targeting
groups and associations interested in offering new benefits to
their members while earning competitive commissions.

--   Direct Sales Program:  ICC is actively pursuing other types
of direct sales, from establishing a direct sales team, to
training employees in the Customer Solutions department to be
competent in both in-bound and out-bound calling, and by
establishing agreements with outside telemarketing agencies.

"Overall, ICC has taken the necessary financial and structural
steps to emerge a much stronger company," said Blanco. "We intend
to resume our position as a telecommunications industry leader,
to provide entrepreneurial opportunities for our Independent
Representatives, and to provide a stable and profitable
environment for our employees. The year 2000 looks to be a banner
year for ICC."


IPM PRODUCTS: Case Summary
--------------------------
Debtor: IPM Products Co.
        2700 Lone Star Drive
        Dallas, TX 76212

Type of Business: Acts as a holding company for its wholly owned
subsidiary, IPM Service Corporation.

Debtor's Counsel: Michael L. Vild
                  The Bayard Firm
                  222 Delaware Ave.
                  Suite 900
                  Wilmington, DE 19899

                  Kenneth A. Rosen
                  Ravin Sarasohn Cook Baumgarten
                   Fisch & Rosen PC
                  103 Eisenhower Parkway
                  Roseland, NJ 07068
                  973-228-9600

Total Assets: 10 to 50 million(estimated)
              $ 17,582(listed)
Total Debts:  10 to 50 million(estimated)
              $ 17,582(listed)


IPM SERVICE: Case Summary and 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: IPM Service Corp.
        2700 Lone Star Drive
        Dallas, TX 75212

Type of Business: Business of manufacturing and distributing new
and rebuilt parts of the automotive after-market.

Petition Date: January 24, 2000   
Chapter 11
Court: District of Delaware       
Judge: Not Assigned Yet

Debtor's Counsel:

Michael L. Vild
The Bayard Firm
222 Delaware Ave.
Suite 900
Wilmington, DE 19899

Kenneth A. Rosen
Ravin Sarasohn Cook Baumgarten
Fisch & Rosen PC
103 Eisenhower Parkway
Roseland, NJ 07068
973-228-9600

Total Assets:
10 to 50 million(estimated)
$ 17,582 (listed)

Total Debts:  
10 to 50 million(estimated)
$ 17,582 (listed)

20 Largest Unsecured Creditors

Alacatel Canada
Wire Inc              Trade debt       $ 374,615
The Nippert Co.       Trade debt       $ 265,668
National De
Conductores           Trade debt       $ 264,316
Macallen Co           Trade debt       $ 261,363
Hurricane Machine
Co. LLC               Trade debt       $ 202,024
Magnekon SA De CV     Trade debt       $ 165,346
Metal Commodities
Inc.                  Trade debt       $ 163,691
Phelps Dodge
Magnet Wire           Trade debt       $ 128,010
Motorola Semi-
Conductor Products    Trade debt       $ 109,231
LIKW Enterprises
Corp                  Trade debt        $ 70,071
Ashville Shoonmaker  
Mica Co.              Trade debt        $ 67,694
Quick Harness         Trade debt        $ 66,059
Register USA Inc.     Trade debt        $ 63,000
Tuscon Corp.          Trade debt        $ 60,438
Fibre Materials Corp  Trade debt        $ 57,036
Fritz Companies Inc   Trade debt        $ 55,693
The Worthington Steel
Company               Trade debt        $ 54,264
AT&T Field Coils      Trade debt        $ 53,796
American Freightways                    $ 53,313
AMS                   Trade debt        $ 34,994


IRIDIUM: McCaw Group Expected to Offer Financing for Iridium
------------------------------------------------------------
A group of investors led by Craig O. McCaw, the cellular
telephone pioneer, is expected to provide at least $20 million of
emergency financing to Iridium L.L.C., the troubled global
satellite telephone company which filed for Chapter 11 bankruptcy
protection last August, according to people close to the talks.

The investment, which is expected to be announced early this
week, would allow Iridium to continue to operate its network of
66 low-orbit satellites for the next few months while Mr. McCaw
and his team of investors negotiate to take control.

The investment is part of Mr. McCaw's strategy to restore
confidence in the struggling satellite telephone industry and
create a consortium of huge global satellite companies that would
offer everything from telephone service in the most remote parts
of the globe to high-speed Internet access.

Mr. McCaw's planned investment in Iridium, which must be approved
by a federal bankruptcy judge, would amount to so-called debtor
in possession financing, or D.I.P. financing, to a company in
Chapter 11 reorganizaiton. It would come at a time when Motorola,
the telecommunications giant that helped conceive of the $5
billion global satellite telephone venture, moves to cut its own
financing of Iridium.

Two months ago, Motorola agreed to commit $20 million so that
Iridium could continue to operate through mid-February. At that
time, a spokesman for Motorola said the company would suspend
operations of the satellite service by Feb. 15 if a
reorganization plan was not in place. Motorola said it was
operating the
system at no charge. According to people close to the
negotiations, Iridium may not meet the Feb. 15 reorganization
deadline.

Although Motorola has been a backer of the Iridium system, the
company has taken charges against earnings in the last year
because of its exposure to the satellite venture. Now, Motorola -
- which also makes satellite phone handsets for Iridium -- is
trying to cut its losses and appease concerned shareholders.
      

KCS ENERGY: Court Sets February 25 as Hearing Date
--------------------------------------------------
KCS Energy, Inc. reports that the U.S. Bankruptcy Court in
Wilmington, Del., has signed an order granting the company and
its subsidiaries relief under Chapter 11 of the Bankruptcy Code.
The Court has set February 25 for a hearing to review the
required disclosure statement and has also set a tentative date
of April 6 for a confirmation hearing. KCS is proceeding under
Chapter 11 in connection with the company's previously announced
Restructuring Agreement which was approved by more than two-
thirds of the holders of the company's 8.875% Senior Subordinated
Notes due January 15, 2008 and by more than a majority of its 11%
Senior Notes due January 15, 2003. KCS is an independent energy
company engaged in the acquisition, exploration, development and
production of natural gas and crude oil with operations in the
Mid-Continent and Gulf Coast regions. The company also purchases
reserves (priority rights to future delivery of oil and gas)
through its Volumetric Production Payments (VPP) program.


KEY PLASTICS: Moody's Lowers Ratings(Senior Subordinated to Caa2)
-----------------------------------------------------------------
Moody's Investors Service lowered the rating of Key Plastics,
LLC's $125 million of 10.25% senior subordinated notes, due 2007,
to Caa2 from B3 and lowered the ratings of its Senior Unsecured
Issuer Rating to Caa1 from B2. Key Plastics' bank credit facility
ratings have been lowered to B3 from B1 including its $120
million secured revolving credit facility, the $77 million Term
Loan A, and the $99 million Term Loan B. The senior implied
rating has been lowered to B3 from B1. The outlook is negative.

The downgrades and negative outlook reflect Moody's significant
concerns regarding Key Plastics' liquidity in the near and
intermediate term. The company's ability to meet an amendment to
its credit agreement within its February 15th deadline is
uncertain. The amendment requires a contribution of $15 million
of equity or debt subordinated only to the senior credit
facilities (of which $4 million has already been contributed) as
well as a $10 million support agreement (of which $5 million
already exists). However, Key Plastics is also discussing
strategic alternatives as a substitute for the capital injection.

The rating actions also incorporate Key Plastics' increasingly
high leverage, negligible interest coverage and deteriorating
operating performance, exacerbated by integration difficulties
associated with its Foggini acquisition (acquired in March 1999).
Furthermore, during the fourth quarter, demands on Key Plastics'
cash flow have been particularly severe given the substantial
capital expenditures required for its Foggini-Key Europe
subsidiary as well as additional financing expenses including
sizeable and increasing interest costs, repayment of $14 million
of senior notes, and $6 million of principal and interest expense
associated with its bank facilities. In addition, Key Plastics
operates in a highly competitive and cyclical environment and is
susceptible to considerable customer concentration.

Moody's is concerned that without an infusion, Key Plastics'
creditors may prevent the company from servicing its senior
subordinated debt - although management believes this is not
likely. Moreover, the notes will become further subordinated if
the capital injection is in the form of debt which is senior to
the senior subordinated notes. Furthermore, if the company
continues to be cash constrained it may be unable to meet its
customer demands and therefore the bank debt and the notes risk
further deterioration in value. However, while the company is in
an extremely vulnerable position, should an equity infusion
materialize in the near future, the outlook for Key Plastics
could improve.

Key Plastics has been struggling for some time under high
leverage. As of September 30, 1999, the company's debt was $423
million and debt-to-EBITDA was high at 5.9 times. Cash flow
coverage of interest expense was marginal; while EBITDA covers
interest expense 2 times; EBITDA-less capital expenditures-to-
interest expense covers just under 1 times. Key's EBITA return on
assets is weak at 8.5%. Liquidity is extremely tight; as of
September 30, Key Plastics had only $6.8 million available under
its revolving credit facility.

Key Plastics, headquartered in Novi, Michigan, is a global
supplier of highly engineered plastic components and assemblies
to automotive OEMs and Tier I suppliers.


MADISON RIVER CAPITAL, LLC: Moody's Assigns Caa1 To Senior Notes
----------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to the proposed
$250 million senior notes of Madison River Capital, LLC and
Madison River Finance Corp., due 2010. Moody's has also assigned
a senior implied rating of B2 and a senior unsecured issuer
rating of Caa1 to Madison River Capital. The outlook is stable.
This is the first time that Moody's has assigned ratings to these
entities.

The ratings reflects the limited operating history of Madison
River, the challenge of expanding from an incumbent rural
telephone operator to include competitive services in neighboring
regions, the substantial leverage and the bonds' restricted
access to existing cash flows. The ratings also consider the
company's initial success in integrating and managing its rural
telephone properties and the stability of its established
business.

The Caa1 rating also takes into account the structural
characteristics of the senior notes. The proposed bonds will be
structurally subordinated to $478 million in senior secured debt
at the telephone operating companies. Additionally, the indenture
will contain the typical weak covenants, including a virtually
unlimited allowance for future senior secured debt for the
development of telecommunications assets. The bonds will have a
senior unsecured claim to the assets and cash flows of the new
competitive local exchange carrier (CLEC) business as it is
developed.

Madison River is a rural local exchange operator focusing on
markets in the Gulf Coast, Mid-Atlantic and Midwest regions of
the United States. Since 1998, the company has acquired and
successfully integrated the operations of three local exchange
providers and is expected to complete the acquisition of a fourth
next quarter. The company has grown access lines in its
territories at a rate of approximately 6% per year to the current
total of 189,000 (including the lines of Coastal). Madison's
management has good experience with rural incumbent carriers, as
reflected by Madison River's success at the telephone companies,
to date.

According to Moody's, Madison River has a very high financial
risk profile.

Madison River is a provider of integrated communications services
to business and residential customers. The company is
headquartered in Mebane, North Carolina.


NASHVILLE CABLE: Sprint Completes Purchase Of Nashville Cable
-------------------------------------------------------------
Sprint announced that it has completed the purchase of Nashville
Cable Joint Venture in Nashville, Tennessee.  Under the terms of
the agreement, Sprint paid $8 million for the company's assets,
which was in Chapter 11 bankruptcy proceedings.

Nashville Cable Joint Venture joins an impressive list of
broadband wireless companies that Sprint has purchased over the
last year.  Other acquisitions have included American Telecasting
Inc., People's Choice TV, Videotron USA and Wireless Broadcast
Services of America.  Together, the properties give Sprint
the rights to broadband wireless spectrum in over 90 markets that
serve up the potential for offering broadband communications
services to almost 30 million households nationwide without
leasing lines from local telephone companies. Major cities in
Sprint's portfolio now include Chicago, Cincinnati, Denver,
Detroit, Houston, Las Vegas, Milwaukee, Nashville, Phoenix,
Portland, San Francisco, San Jose, St. Louis, Sacramento and
Seattle.

In addition to high-speed Internet service, the broadband
wireless connections will serve as an enabler for Sprint's
revolutionary Integrated On- Demand Network (Sprint ION(SM)).  
Before the addition of broadband wireless to Sprint's arsenal,
the ION platform was limited to wired access only.  The fixed
wireless network will free Sprint from the limitation of copper
wire and allow it to roll out services independent of local
telephone companies, who control the copper telephone wires
leading to homes.  Sprint ION offers local and long-distance
voice service, high-speed Internet access and other data services
all over a single connection.

Sprint is a global communications company -- at the forefront of
integrating long-distance, local and wireless communications
services, and one of the largest carriers of Internet traffic.
Sprint built and operates the United States' first nationwide
all-digital, fiber-optic network and is a leader in advanced data
communications services. Sprint has $17 billion in annual
revenues and serves more than 20 million business and residential
customers.


NATG HOLDINGS & ORIUS: Moody's Assigns B3 To Snr Sub Notes
----------------------------------------------------------
Moody's Investors Service has assigned a B3 to the proposed $150
million senior subordinated notes, due 2010, of NATG Holdings,
LLC (NATG) and Orius Capital Corporation. Moody's has also
confirmed the B1 rating on NATG's existing $375 million in credit
facilities. The senior implied and senior unsecured issuer
ratings for Orius Corporation (Orius), NATG's parent holding
company, remain the same at B1 and Caa1, respectively. The
outlook remains stable.

The proceeds from the new issue will be used to refinance the
company's $100 million senior subordinated term loan rated B3, to
repay a portion of the company's outstanding credit facility and
to fund fees and expenses for the transaction.

The proposed senior subordinated notes are similar in structure
to the senior subordinated term loan, offering substantially the
same risk profile. The B3 rating on the senior subordinated notes
reflects their contractual subordination to all current and
future debt of NATG. As with the term loan, the rating recognizes
that the notes are guaranteed, on a subordinated basis, by the
Company's operating subsidiaries. It is important to mention that
since the ratings issued in December 1999, Orius has modified its
operating structure by merging its intermediate holding
companies, NATG Holding, LLC and LISN Holdings. Therefore, LISN
Holdings no longer exist as a legal entity and the surviving
entity has assumed the name of NATG. Orius Capital Corp. is a
subsidiary of NATG.


NEXTWAVE: Asks Court To Reconsider
----------------------------------
NextWave Telecom Inc. today asked the U.S. Court of Appeals for
the Second Circuit to reconsider its December 22, 1999, decision
on NextWave's fraudulent conveyance action against the Federal
Communications Commission. The Second Circuit's decision reversed
lower court determinations that the FCC engaged in a constructive
fraudulent conveyance by demanding $4.7 billion for PCS spectrum
licenses the agency granted to NextWave in 1997. NextWave's
request for reconsideration was necessitated by the FCC's refusal
to accept NextWave's recent offer to pay its remaining $4.3
billion license obligation in full and put the PCS spectrum
covered by those licenses into immediate use.

"The FCC's inexplicable decision to refuse NextWave's recent
offer has forced the Company to file this rehearing petition,"
said NextWave's spokesperson. "The Company would prefer to devote
its energies and resources to putting its spectrum licenses into
immediate and productive use. Nevertheless, our fiduciary
duty to our creditors and shareholders requires us to protect
their interests - in this instance, by proceeding with further
litigation."

"The need for reconsideration of the Second Circuit's decision
has become more compelling recently, due to the FCC's efforts to
distort that decision and make an end-run around Bankruptcy Code
protections that Congress unambiguously has provided to companies
reorganizing in bankruptcy," said NextWave's spokesperson. "Those
efforts, if allowed to succeed, would seriously undermine
the normal interaction of regulated companies and financial
markets."

NextWave's filing today presents several grounds for rehearing.
"Most significantly, the Second Circuit's decision overlooks
directly applicable provisions of the bankruptcy laws that grant
bankruptcy courts authority to conduct proceedings like that
brought by NextWave against the FCC in this case," said
NextWave's spokesperson. "The Second Circuit's decision in favor
of the FCC should be reconsidered in light of these controlling
provisions of federal law."

NextWave's petition asks the three-judge panel that originally
decided the appeal to reconsider its ruling in order to correct
the legal errors identified in the petition. NextWave has also
requested the full United States Court of Appeals for the Second
Circuit to hear the case if the three-judge panel does
not correct its decision.

NextWave Telecom Inc. (www.nextWavetel.com) was formed in 1995 to
become a leading provider of wireless telecommunications
services. The Company intends to build and operate a nationwide
PCS network to provide portable high-speed Internet access and
voice services to consumers and businesses. NextWave's unique
packet data wireless network will provide Americans with
untethered access to Internet content and applications via mobile
phones, handheld computing and PDA devices, notebook computers,
and next generation Internet appliances.


OMEGA HEALTHCARE: Moody's Lowers Ratings
----------------------------------------
Moody's Investors Service has lowered the securities ratings of
Omega Healthcare Investors, Inc., with the senior unsecured debt
rating lowered to B1, from Ba3. The outlook for the REIT's
ratings remains negative, reflecting continuing stresses on
Omega's portfolio and financial flexibility.

According to Moody's, these rating changes reflect increased
concern over Omega's imminent debt maturities; impairment charges
on properties identified for sale; and, significant concentration
of bankrupt operators and mortgagors. In general, the challenging
financial markets continue to make it difficult to refinance
debt, and bank line indices and spreads are increasing. Although
Omega received a temporary waiver of its recent bank line
covenant default, Omega will need to renegotiate its bank
facility, which could adversely impact unsecured debtholders.
Moody's expectation of further challenges stemming from changes
in federal Medicare payments and the REIT's focus on skilled
nursing facility finance are additional rating factors. According
to Moody's, these factors will constrain Omega's financial
flexibility. While the common stock dividend reduction will
provide cash, REIT rules limit Omega's ability to further reduce
the dividend. Investments in or mortgages on skilled nursing
facilities comprise 92% of Omega's asset base. In some cases,
this asset type is experiencing declines in market value.

The following ratings were changed:

Omega Healthcare Investors, Inc. -- Senior unsecured long-term
debt to B1, from Ba3; senior debt issuable under the shelf to
(P)B1, from (P)Ba3; subordinated debentures to B3, from B2;
cumulative convertible preferred stock to "b3", from "b2";
cumulative preferred stock issuable under the shelf to (P)"b3",
from (P)"b2"; and noncumulative and junior preferred stock
issuable under the shelf to (P)"caa", from (P)"b3".

Omega Healthcare Investors, Inc. [NYSE: OHI] headquartered in Ann
Arbor, Michigan, USA, is a Real Estate Investment Trust (REIT)
investing in and providing financing to the long-term healthcare
industry. Its portfolio includes 216 healthcare and assisted
living facilities with more than 23,000 beds that are located in
28 states and operated by 24 independent healthcare operating
companies. Omega Healthcare Investors, Inc. had total assets of
$1.0 billion (book value) and total equity of $457 million at
December 31, 1999.


POLARIS COMMERCIAL: 2 Classes Of Notes Trust On Review
------------------------------------------------------
Moody's Investor's Service announced that it is placing on review
for possible downgrade two Classes of Notes issued by Polaris
Commercial Loan Master Trust: (1) the U.S. $45,600,000 Class C-1
Asset Backed Notes, Series 1999-1 and the U.S. $30,400,000 Class
C-2 Asset Backed Notes, Series 1999-1 and (2) the U.S.
$26,400,000 Class D-1 Asset Backed Notes, Series 1999-1 and the
U.S. $17,600,000 Class D-2 Asset Backed Notes, Series 1999-1. The
rating agency noted that recent losses in the underlying
portfolio had reduced the Available Credit Enhancement Level and
significantly increased the possibility of an Early Amortization
Event. The Available Credit Enhancement Level consists of credit
enhancement provided by the Cash Collateral Account ($20 million)
and by the Class E-1 Asset Backed Certificates, Series 1999-1 and
Class E-2 Asset Backed Certificates, Series 1999-1 (together, $38
million). Moody's indicated that in this transaction an Early
Amortization Event is triggered when the Available Credit
Enhancement Level no longer exceeds the Required Credit
Enhancement Level ($18 million).

RATING ACTION: REVIEW FOR DOWNGRADE
Issuer:Polaris Commercial Loan Master Trust
Description:U.S. $45,600,000 Class C-1 Asset Backed Notes, Series
1999-1 and
U.S. $30,400,000 Class C-2 Asset Backed Notes, Series 1999-1
Rating:Baa2

RATING ACTION: REVIEW FOR DOWNGRADE
Issuer:Polaris Commercial Loan Master Trust
Description:U.S. $26,400,000 Class D-1 Asset Backed Notes, Series
1999-1 and
U.S. $17,600,000 Class D-2 Asset Backed Notes, Series 1999-1
Rating:Ba2


PURINA MILLS: Motion To Pay Commitment Fees to GE Capital
---------------------------------------------------------
The debtor, Purina Mills,Inc. and the Official Committee of
Unsecured Creditors seek authority for the debtors to pay certain
due diligence and commitment fees (approximately $300,000) to
General Electric Capital Corporation in connection with proposed
exit financing.

As described in the plan, the exit financing facility, if
implemented, would consist of a senior secured revolving credit
facility in the amount of approximately $50 million, including a
$30 million letter of credit sub facility.


READ-RITE CORPORATION: Moody's Lowers Ratings
--------------------------------------------
Moody's Investors Service lowered the ratings to C from Caa1 on
Read-Rite Corporation's outstanding $345 million 6-1/2%
convertible subordinated notes, due 2004, and to Caa2 from B2 on
the company's $100 million guaranteed senior secured bank credit
facility, due 2001, of which $36.5 million remains outstanding
under a term loan and $50 million has been borrowed under the
revolving loan facility. Read-Rite's senior implied and senior
unsecured issuer ratings have been lowered to Caa2 and Caa3,
respectively. The 6-1/2% convertibles, which are subject to
redemption at a price of 103.714 as of September 7, 2000, may be
converted at any time into shares of common stock at $40.24 per
share. The stock closed on Friday at about 4-1/4 per share. The
ratings outlook is negative.

According to Moody's, the ratings downgrade and negative outlook
are based on the bleak prospects for full recovery of bank
principal nor any principal recovery on the 6-1/2% convertibles,
in light of the continued losses and deterioration of Read-Rite's
net revenues during FY2000Q1; the company's strained liquidity,
which, upon the December 29, 1999 $25 million repayment on the
revolver, has been reduced to an estimated cash and short term
investment position of less than $80 million; the necessity of
maintaining the company's schedule of capital expenditures, pared
to $80 million in FY2000, of which an additional $55 million must
be met through September 30; management distraction in coping
with the company's mounting financial crisis; and the substantial
doubt, as expressed by the company's auditors, Ernst & Young LLP,
over the company's ability to continue as a going concern.

The company's PP&E, only 40% situated in the United States, is
comprised substantially of capital equipment employed in the
fabrication of magnetic recording heads for disk drives, much of
which have a relatively short three to five year replacement
cycle. Although accounts receivable and inventories were recorded
at $77 million and $42 million, respectively, as of December 26,
1999, Read-Rite's working capital requirements are likely to
absorb more funding, rather than provide a source for near-term
debt repayment, as its volume production of giant magneto-
resistive (GMR) heads for its customers' 9.1 and 10.2 gigabyte
(GB) drive platforms ramps upward in 2000H1.

On January 27, 2000 Read-Rite filed a registration statement
proposing an exchange of $172.5 million 10% convertible
subordinated notes, due 2004, or $1,000 for each $2,000 of the
$345 million 6-1/2% convertible subordinated notes outstanding.

At the same time, the company registered an additional $83.5
million 10% convertible subordinated notes, due 2004, of which
$50 million would be offered at par to those convertibles holders
participating in the exchange. Read-Rite has reserved the option
to pay interest on the exchange convertibles in either cash or
common stock.

Read-Rite's disk drive heads manufacturing has remained under
pressure from the industry's rapid platform transitions,
facilitated by a virtual annual doubling in areal density over
the past three years.

For FY2000Q1 ended December 26, 1999, Read-Rite's net sales of
$114 million were about half the $230 million sales recorded in
FY1999Q1. The company's cash used in operations was $45 million
while gross margin was a negative $31 million.

The difficulties stemmed from the company's limited participation
on its customers' first generation GMR products and a reduction
in the number of head gimbal assemblies per head stack assembly.
As a result, the company's GMR head ramp only began in earnest in
the November-December time frame, causing the company to miss the
December quarter's traditional surge in disk drive volume
shipments. Additionally, the modest $83 million of sales in GMR
heads was also attributed to sustained pressure on average
selling prices.

As of December 26, 1999, Read-Rite's debt totaled $477 million
against stockholders' equity of $28 million. The company had
accumulated an earnings deficit of $342 million.

Read-Rite's limited prospects hinge on a recovery in margins and
increased market shares with Western Digital, Maxtor and Samsung,
its three largest customers comprising 37%, 32% and 19%,
respectively, of FY1999 sales, and Quantum Corporation, with whom
the company attained qualification on its magnetic recording
heads for the first time since FY1997 last September.

Read-Rite Corporation, headquartered in Milpitas, California, is
a leading worldwide independent supplier and manufacturer of
magnetic recording heads for computer disk drives.


RESOURCE BANCSHARES: Results For Fourth Quarter and Year End
------------------------------------------------------------
Resource Bancshares Mortgage Group, Inc. (Nasdaq: RBMG) (the
Company), announced a $4.1 million ($0.22 per share) net loss
(before a workforce reduction and special charge) for the quarter
ended December 31, 1999.  Net income (before the workforce
reduction and special charge) for the year was $8.7 million
($0.42 per share).  Net income for the fourth quarter and prior
year ended December 31, 1998 was $12.7 million ($0.55 per share)
and $48.7 million ($ 2.07 per share), respectively.

The fourth quarter of 1999 included a $3.8 million ($2.4 million
after- tax) charge related to the Company's previously announced
workforce reduction, and a $0.6 million ($0.4 million after-tax)
charge related to the recruitment and hiring of the Company's new
CEO.  Including those charges, the net loss for the fourth
quarter was $6.9 million ($0.36 per share) while net income for
the year was $5.9 million ($0.28 per share).

In addition, during the quarter, the Company recognized a $1.9
million ($1.2 million after-tax) non-cash expense primarily
related to rising 30-day LIBOR rates which continued to impact
the value of retained residual interests.  The net loss for the
quarter exclusive of the impact of that expense, the workforce
reduction and the special charge would have been $2.9 million
($0.15 per share).


RSL COMMUNICATIONS: Moody's Assigns B2 To Snr Nts
-------------------------------------------------
Moody's Investors Service has assigned B2 ratings to RSL
Communications PLC's proposed $/Euro 200 million senior notes due
2010 and to the existing $175 million 9.875% senior notes due
2009. Both issues are guaranteed by the parent holding company,
RSL Communications, Ltd. Additionally, Moody's has assigned a
"caa" rating to RSL Communications, Ltd's. proposed $100 million
series A convertible preferred stock offering. Moody's has
confirmed the B2 ratings on RSL Communications PLC's existing
guaranteed senior unsecured notes and senior unsecured issuer
rating. Finally, Moody's has confirmed the company's senior
implied rating at B1. The outlook remains stable. Details of the
issues and ratings are listed separately below.

The ratings reflect the risks associated with a company in its
rapid growth phase including the rollout of new products and
services and the further development of networks, support systems
and sales channels; the challenges associated with assembling a
stable customer base in a competitive environment of rapidly
declining prices; and the dependence on governmental agencies to
further deregulate the telecommunications sector in various
markets. The rating also recognizes the company's business
strategy which is appropriately focused on providing integrated
voice, data and Internet services to end-users while continuing
to invest in network infrastructure to improve its cost
structure; and the company's sizable retail customer base in
certain strategic markets.

The ratings also take into account the structural characteristics
of the debt instruments. The issuer of the notes, RSL
Communications PLC, is an intermediate holding company, making
the notes structurally subordinated to debt at the operating
companies. Most notable at this time is a $75 million secured
vendor facility. The B2 rating on the notes reflects the
possibility of additional amounts of secured debt in the future,
as permitted by the indentures. The issuer of the convertible
preferred stock is RSL Communications, Ltd., the ultimate parent
holding company. The rating on the preferred stock reflects its
relative standing in the capital structure.

RSL is a facilities-based communications provider targeting small
and medium-sized businesses, communications carriers and
residential customers in markets throughout western Europe, North
America, the Asia/Pacific region and Latin America. Currently,
RSL has a presence in 22 countries supported by varying levels of
local management, distribution channels and network
infrastructure. It is the company's broad geographic presence and
sizable end-user customer base in certain markets that
distinguishes RSL from its peers.

Nevertheless, Moody's points out the challenges faced by the
company in effectively managing a collection of geographically
dispersed operations that are exhibiting fast growth concurrent
with rapid changes in market regulations, technology and
competition. Furthermore, management also faces significant
challenges in determining how best to leverage its collection of
various customer bases, network assets and services to create an
integrated communications company with economies of scale.

RSL reported annualized revenues of approximately $1.5 billion
for the period ending September 30, 1999. Furthermore, the
company expects to report normalized EBITDA (exclusive of the
results of deltathree and non-cash compensation expense) of $4 to
$6 million in the fourth quarter of 1999. In order for the
company to maintain its strong growth rates going forward it will
need to introduce and successfully cross-sell a broader set of
products and services to its various customer constituencies.
Margins should continue to improve based in part on additional
network investment offset to some degree by continued pricing
pressures in its markets. Given the successful execution of the
business plan, leverage (debt to EBITDA) could be reduced to 5
times in 2002.


Details of the rated issues are as follows:

Guaranteed Senior notes rated B2:
$172.5 million 12.25% senior notes due 2006
$200 million 9.125% senior notes due 2008
$328 million 10.125% senior discount notes due 2008

DM 296 million 10% senior discount notes due 2008
$100 million 12% senior notes due 2008
$200 million 10.5% senior notes due 2008
$175 million 9.875% senior notes due 2009
Proposed $/Euro 200 million senior notes due 2010
Preferred stock rated "caa":
Proposed $100 million Series A convertible preferred stock

RSL has its headquarters in Hamilton, Bermuda and also maintains
executive offices in New York.


SAFELITE GLASS CORP.: Moody's Places Ratings On Review
------------------------------------------------------
Moody's Investors Service placed Safelite Glass Corp.'s ratings
on review for possible downgrade including the B3 rating on its
$155 million of senior subordinated notes, due 2006; the B2
Senior Unsecured Issuer rating; the B1 rating on its $388 million
bank credit facility and its B1 senior implied rating.

The review for downgrade is prompted by the significant
deterioration in Safelite's profitability combined with the
expected loss of an extensive portion of business from its
largest customer, Allstate Insurance Co. (Safelite's contract
with Allstate which expires in October 2000 will not be renewed;
the business has been won by a competitor, Lynx Services, a
subsidiary of PPG Industries. During the fiscal year ended March
1999, revenues from the company's contract with Allstate totaled
$120 million, or 14% of total sales.) In addition, the company's
profitability is likely to continue to deteriorate due to intense
industry pricing pressures and weak demand. As a result of these
factors, the company's EBITA return on assets is weak at
approximately 9% (goodwill is 49% of total assets), leverage is
high at close to 7 times debt-to-EBITDA and interest coverage is
marginal. The Company also expects to record substantial
restructuring charges of between $25 and $30 million in the
quarter ended January 1, 2000. Given the soft industry pricing
and lower unit volume levels as well as Safelite's very high
level of debt, its future performance and ability to support its
capital structure (101% debt capitalization) is uncertain.

Safelite Glass Corp., headquartered in Columbus, OH, is the
largest provider of automotive glass and repair services in the
United States.


TCC INDUSTRIES: DeRoeck and Thomajan Sell Shares of Stock
---------------------------------------------------------
TCC Industries, Inc. reports that Walter A. DeRoeck and Robert
Thomajan, Chairman of the Board and President of TCC,
respectively, have sold all 465,700 shares of TCC stock
beneficially owned by them, including shares held by a family
limited partnership formed by Mr. Thomajan. The shares were sold
in a private transaction to Austin Airport Inn, L.C., a company
controlled by Michael Voticky, for a nominal aggregate price of
$46.57 (or $0.0001 per share). Mr. Voticky is an independent
businessman and lives in Austin, Texas. Messrs. DeRoeck and
Thomajan sold the shares in order to realize in 1999 the loss
from their investment in the shares, for tax purposes. Mr.
DeRoeck stated that he and Mr. Thomajan have not resigned from
the board of directors or as officers of TCC in connection with
the sale. TCC reported nearly one year ago that it had exhausted
its capital and borrowing capacity. Its only remaining operating
subsidiary, Allen-Lewis Manufacturing Company, has since disposed
of most of its assets and ceased operations. After applying the
proceeds from the sale of Allen-Lewis' assets to the payment of
expenses and indebtedness, TCC has no cash to continue any
activities. TCC was unable to pay for an audit of its financial
statements for the year 1998, and no annual meeting of
shareholders was held during 1999.


WESTERN DIGITAL: Reports Net Loss of $15M on Revenue of $560M
-------------------------------------------------------------
Western Digital Corporation reported revenue of $560.2 million
and a net loss of $15.2 million for its second quarter ended
December 31, 1999. The net loss includes restructuring charges of
$25.5 million, primarily related to the closure of the company's
hard drive manufacturing facility in Singapore, and an
extraordinary gain of $76.3 million relating to the redemption of
some of the company's debentures for common stock. Excluding the
restructuring charges and the extraordinary gain the net loss
would have been $66.0 million. In the year-earlier period,
Western Digital reported revenue of $738.6 million and a net loss
of $82.3 million.

For the six months ended December 31, 1999, revenue was $967.1
million and the net loss was $121.5 million, including non-
recurring charges of $95.5 million and extraordinary gains of
$166.9 million. This compares with year-earlier revenues and net
loss of $1.4 billion and $276.9 million respectively, including
special charges of approximately $85 million.

Commenting on the December quarter performance, Western Digital
president and chief executive officer Matt Massengill stated:
"Pricing and demand in the desktop hard drive industry showed
significant improvement in the December quarter. In addition to
market trends, there were several other key factors behind our
better-than-expected operating results, including greater
operational efficiencies, cost structure reductions, excellent
cash and inventory management, and our successful recovery from
the completed product recall. Each of the latter developments--
combined with time to market leadership with new WD-designed
desktop products--attest to the continued improvement in our core
desktop hard drive operations."

Western Digital shipped 5.3 million drives in the December
quarter, up sharply from unit shipments of 3.4 million in the
September quarter, including desktop share re-gains at a number
of major OEM and distribution customers. All of the increase in
units was attributable to the desktop recovery from the product
recall. Last week, the company announced its decision to cease
investments in enterprise hard drives and exit that business; it
will continue to support its installed base of enterprise drive
customers and ship its WD Enterprise and WD Vantage drives
through the remainder of the calendar year.

For the December quarter, the company achieved a positive gross
margin of 4%, reflecting the healthier desktop pricing
environment and significantly lower manufacturing costs resulting
from the transfer of all desktop production to a single, highly
utilized plant in Malaysia. Other noteworthy achievements in the
December quarter included:

o    Qualification completed and volume shipments underway to all
major OEMs of the WD Caviar 9.1 GB/platter and 10.2 GB/platter
5400 RPM
desktop series;

o    Production of the 10.2 GB/platter 7200 RPM WD Caviar desktop
HDD, and first to ship this mainstream, high performance platform
to the
distribution channel and retail customers (qualifications
completed, first-to-volume shipments to OEM customers commenced
in
early January);

o    Announcement of the N3000, the first product from Connex
addressing the network attached storage and storage area network
markets. Initial units of the N3000 were shipped this month.

o    First volume shipments of the WD Performer HDD series,
targeted at the emerging home entertainment market for digital
storage,
featuring the company's WhisperDrive acoustics technology; and

o    Development of the A/V StreamWeaver technology, which
supports multiple streams of data for simultaneous viewing and
recording
required for A/V programming and DVR recording. The StreamWeaver
technology specification is now being used as a base document for
industry standardization; WD is working with several customers
that plan to incorporate the technology into future products.

Massengill noted that the new markets or market segments being
addressed by Western Digital subsidiaries Connex and SageTree and
the company's home entertainment line are emerging high growth
segments without entrenched market share leaders. "Going forward,
Western Digital will participate in markets in the client and
enterprise segments where it can attain industry leadership share
and satisfactory rates of return for our shareholders," stated
Massengill.

"The growing amounts of data being stored on the Internet and the
increase in network bandwidth have established new high-growth
opportunities for companies that can help customers manage the
flow, security and the scaling of that information," said
Massengill. "We believe Western Digital's core competencies in
LSI and HDD design, systems expertise, and low-cost
manufacturing--leveraged with our brand, customer relationships,
and intellectual property--position us to establish market
leadership in selected segments of these new markets, as well as
in new client-side markets such as home entertainment."

Western Digital is a leading manufacturer of hard drives used for
information storage in desktop computers and home entertainment
electronic products. Long known for its involvement in hard drive
interface architecture, Western Digital created the Integrated
Drive Electronics (IDE) interface that became the personal
computer hard drive interface standard in 1986. Through its
Connex subsidiary, the company serves users of network-attached
storage systems and enterprise-wide storage area networks.
Western Digital was founded in 1970 and is well recognized for
its storage and end-market systems-level design knowledge. The
company's products are marketed to leading systems manufacturers
and selected resellers under the Western Digital brand name.


Meetings, Conferences and Seminars
----------------------------------
February 17, 2000
   ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS
      Lending to Distressed Businesses
      In & Out of Bankruptcy Conference
         Charlotte Hilton & Towers, Charlotte, North Carolina
            Contact: 1-541-858-1665 or aira@ccountry.net

February 24-26, 2000
   ALI-ABA
      Chapter 11 Business Reorganizations
         Walt Disney World, Orland, Florida
            Contact: 1-800-CLE-NEWS

February 27-March 1, 2000
   NORTON INSTITUTES ON BANKRUPTCY LAW
      Norton Bankruptcy Litigation Institute I
         Olympic Park Hotel, Park City, Utah
            Contact: 1-770-535-7722

March 2-5, 2000
   COMMERICAL LAW LEAGUE OF AMERICA
      1st Annual Winter Conference
         Radisson Resort Hotel, Scottsdale, Arizona
            Contact: 1-561-241-7301 or 1-213-487-7550

March 8-10, 2000
   RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC.
      Healthcare Restructurings: Successful Strategies
      for Managing Distressed Finances
         The Regal Knickerbocker Hotel, Chicago, Illinois
            Contact: 1-903-592-5169 or ram@ballistic.com   
   
March 10, 2000
   AMERICAN BANKRUPTCY INSTITUTE
      Bankruptcy Battleground West
         Century Plaza Hotel. Los Angeles, California
            Contact: 1-703-739-0800

March 10 & 11, 2000
   NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES
      Spring Seminar
         Hotel Monteleone, New Orleans, Louisiana
            Contact: 1-803-252-5646 or info@nabt.com

March 23-25, 2000
   SOUTHEASTERN BANKRUPTCY LAW INSTITUTE, INC.
      26th Annual Southeastern Bankruptcy Law Institute
         Marriott Marquis Hotel, Atlanta, Georgia
            Contact: 1-770-451-4448

March 23-25, 2000
   ALI-ABA
      Partnerships, LLCs, and LLPs -- Uniform Acts,
      Taxation, Drafting, Securities and Bankruptcy
         Doubletree Paradise Valley Hotel,
         Scottsdale, Arizona
            Contact: 1-800-CLE-NEWS

March 30-April 2, 2000
   NORTON INSTITUTES ON BANKRUPTCY LAW
      Norton Bankruptcy Litigation Institute II
         Flamingo Hilton Hotel, Las Vegas, Nevada
            Contact: 1-770-535-7722

April 3-4, 2000
   PRACTISING LAW INSTITUTE
      22nd Annual Current Developments in
      Bankruptcy and Reorganization Conference
         PLI Conference Center, New York, New York
            Contact: 1-800-260-4PLI

April 5-8, 2000
   TURNAROUND MANAGEMENT ASSOCIATION
      Spring Conference
         The Pointe Hilton Squaw Peak Resort
         Phoenix, Arizona
            Contact: 1-312-822-9700 or info@turnaround.org
         
April 6-7, 2000
   ALI-ABA
      Commercial Securitization for Real Estate Lawyers
         Walt Disney World, Orlando, Florida
            Contact: 1-800-CLE-NEWS

April 10-11, 2000
   PRACTISING LAW INSTITUTE
      22nd Annual Current Developments in
      Bankruptcy and Reoorganization Conference
         Grand Hyatt Hotel, San Francisco, California
            Contact: 1-800-260-4PLI

April 27-30, 2000
   AMERICAN BANKRUPTCY INSTITUTE
      Annual Spring Meeting
         J.W. Marriott, Washington, D.C.
            Contact: 1-703-739-0800

May 4-5, 2000
   RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC.
      Bankruptcy Sales & Acquisitions
         The Renaissance Stanford Court Hotel
         San Francisco, California
            Contact: 1-903-592-5169 or ram@ballistic.com   

May 15, 2000
   AMERICAN BANKRUPTCY INSTITUTE
      2nd Annual New York City Bankruptcy Conference
         Association of the Bar of the City of New York,
         New York, New York
            Contact: 1-703-739-0800

May 26-29, 2000
   COMMERCIAL LAW LEAGUE OF AMERICA
      52nd Annual Meeting of the New England Region
         Colony Hotel, Kinnebunkport, Maine
            Contact: 1-617-742-1500 or richard@landayleblang.com

June 8-11, 2000
   AMERICAN BANKRUPTCY INSTITUTE
      7th Annual Central States Bankruptcy Workshop
         Grand Traverse Resort, Traverse City, Michigan
            Contact: 1-703-739-0800
   
June 14-17, 2000
   ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS
      16th Annual Bankruptcy and Restructuring Conference
         Swissotel, Chicago, Illinois
            Contact: 1-541-858-1665 or aira@ccountry.net

June 29-July 2, 2000
   NORTON INSTITUTES ON BANKRUPTCY LAW
      Western Mountains Bankruptcy Law Institute
         Jackson Lake Lodge, Jackson Hole, Wyoming
            Contact: 1-770-535-7722

July 13-16, 2000
   AMERICAN BANKRUPTCY INSTITUTE
      7th Annual Northeast Bankruptcy Conference
         Doubletree Hotel, Newport, Rhode Island
            Contact: 1-703-739-0800
            
August 3-5, 2000
   ALI-ABA
      Fundamentals of Bankruptcy Law
         Somewhere in Boston, Massachusetts
            Contact: 1-800-CLE-NEWS

August 9-12, 2000
   AMERICAN BANKRUPTCY INSTITUTE
      5th Annual Southeast Bankruptcy Workshop
         Hyatt Regency, Hilton Head Island, South Carolina
            Contact: 1-703-739-0800

August 14-15, 2000
   TURNAROUND MANAGEMENT ASSOCIATION
      Advanced Education Workshop
         Loewes Vanderbilt Plaza, Nashville, Tennessee
            Contact: 1-312-822-9700 or info@turnaround.org
         
September 12-17, 2000
   NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES
      Convention
         Doubletree Resort, Montery, California
            Contact: 1-803-252-5646 or info@nabt.com

September 15-16, 2000
   AMERICAN BANKRUPTCY INSTITUTE
      Views From the Bench 2000
         Georgetown University Law Center, Washington, D.C.
            Contact: 1-703-739-0800

September 21-22, 2000
   RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC.
      3rd Annual Conference on Corporate Reorganizations
         The Regal Knickerbocker Hotel, Chicago, Illinois
            Contact: 1-903-592-5169 or ram@ballistic.com   

September 21-23, 2000
   AMERICAN BANKRUPTCY INSTITUTE
      Litigation Skills Symposium
         Emory University School of Law, Atlanta, Georgia
            Contact: 1-703-739-0800

September 21-24, 2000
   AMERICAN BANKRUPTCY INSTITUTE
      8th Annual Southwest Bankruptcy Conference
         The Four Seasons, Las Vegas, Nevada
            Contact: 1-703-739-0800

November 2-6, 2000
   TURNAROUND MANAGEMENT ASSOCIATION
      Annual Conference
         Hyatt Regency, Baltimore, Maryland
            Contact: 312-822-9700 or info@turnaround.com

November 30-December 2, 2000
   AMERICAN BANKRUPTCY INSTITUTE
      Winter Leadership Conference
         Camelback Inn, Scottsdale, Arizona
            Contact: 1-703-739-0800

The Meetings, Conferences and Seminars column appears
in the TCR each Tuesday.  Submissions via e-mail to
conferences@bankrupt.com are encouraged.

                   *********

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, and Beard
Group, Inc., Washington, DC. Debra Brennan, Yvonne L. Metzler,
Edem Alfeche and Ronald Ladia, Editors.

Copyright 2000.  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 $575 for six 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 301/951-6400.

                 * * * End of Transmission * * *