TCR_Public/000526.MBX T R O U B L E D   C O M P A N Y   R E P O R T E R

    Friday, May 26, 2000, Vol. 4, No. 104


AAMES FINANCIAL: In Violation Of Financial Covenants
ACCESSAIR: Bar Date Notice; Increase In Borrowing Limit
AMERISERVE: Probe Initiated By SEC
BARNEYS NEW YORK: Comment Letter From SEC Regarding Statements
BRAZOS SPORTSWEAR: Hearing on Approval of Disclosure Statement

CKE RESTAURANTS: Moody's Lowers Ratings
DIAGNOSTIC HEALTH: Seeks To Reject 28 Leases
DIGITAL WIRELESS: Confirmation of Plan
DLS MANAGEMENT: Case Summary and 16 Largest Unsecured Creditors
EMPLOYEE SOLUTIONS: Reports Progress With Bondholder Negotiations

FIDELITY BANCORP: Reports Second Quarter Earnings of $1.1MM
FRUIT OF THE LOOM: Committee To Examine Farley Under Rule 2004
GLOBAL OCEAN: Seeks To Retain Valuation Consultants
GST TELECOMMUNICATIONS: Postpones Annual Shareholders' Meeting
HARNSICHFEGER: Application To Employ Piper Marbury

HARVARD PILGRIM: Court Ensures To Pay Creditors
LIL' THINGS: Order Approves Final Distribution; Case Dismissed
MARINER: Omnibus Motion To Settle Prepetition PI Claims
MEDICAL SPECIALISTS: Files for Bankruptcy

MICROAGE: Final Approval For $210MM DIP Financing
NANTUCKET INDUSTRIES: Deadline For Filing Proofs of Claim
NEW YORK BAGEL: New World Completes Acquisition of Stores
NOXSO CORP: Completes Implementation of Confirmed Plan
NTT DATA CORP.: Posts 18B Yen group net loss

OXFORD HEALTH PLANS: Revenues For Quarter Down 3.6%
PACIFIC GATEWAY: Class Action on Behalf of Shareholders
PETSEC: Worried Shareholders Grill Board
SAMSONITE: Annual Meeting Will Be Held On June 22, 2000
SUN HEALTHCARE: Application To Employ KPMG LLP as Consultants

THERMATRIX INC: Results For Fiscal Year Ended December 31, 1999
VENCOR: Ventas/Vencor Form Tax Agreement


AAMES FINANCIAL: In Violation Of Financial Covenants
Aames Financial Corp. said it is in violation of financial
covenants following a $61.5 million fiscal third-quarter loss,
jeopardizing its ability to continue loan production. In a
Securities and Exchange Commission filing, the Los Angeles home-
equity lender said it failed to meet covenants at March 31
and April 30 and doesn't expect to meet them at May 31. The
company is seeking amendments from its lenders to bring itself
into compliance. Without the amendments, the lenders can declare
a default, which could "jeopardize the company's ability to
continue to operate as a going concern," Aames said in the
filing. Aames also isn't in compliance with its insurer's net-
worth and cash- liquidity requirements, and is seeking amendments
from the insurer. Obtaining the amendments is a condition for
Aames to receive an additional equity investment of $50 million
from its lead stockholder, Capital Z Financial Services Fund II

ACCESSAIR: Seeks Increase In Borrowing Limit
AccessAir, Inc., debtor is seeking an order increasing the amount
that AccessAir is authorized to borrow from Ruan, Inc. or its
designee from $1.6 million to $4 million.  AccessAir further
requests that the court hold an expedited preliminary hearing in
order to consider an increase in authorization of $500,000 in the
immediate future as necessary to avoid immediate and irreparable
harm to the bankruptcy estate.

AMERISERVE: Probe Initiated By SEC
According to an article in The Wall Street Journal on May 25,
2000, the Securities and Exchange Commission has begun an
informal inquiry into events surrounding AmeriServe Food
Distribution Inc.'s Chapter 11 bankruptcy- reorganization filing,
including a September 1999 bond offering underwritten by
Donaldson, Lufkin & Jenrette Inc.

However, the article points out that if the SEC decides a case is
worth pursuing, DLJ would enjoy a significant legal shield
because the bonds were private placements, or unregistered
securities sold only to "qualified institutional buyers" under
the SEC's Rule 144a. Therefore, the bonds aren't subject to all
the securities laws designed to protect investors in public

Reportedly, the SEC has asked parties involved for information
about the $200 million bond offering for AmeriServe; about
AmeriServe's communications with DLJ; about AmeriServe's
relationship with Burger King Corp., a crucial customer; and
about financial transactions in the year prior to the filing.

AmeriServe and DLJ have been accused by bondholders of failing to
fully disclose AmeriServe's problems at the time of the $200
million bond issue led by DLJ. Those bonds are now trading at
about 16 cents on the dollar.

DLJ and AmeriServe founder and former Chief Executive John Holten
both maintain that they provided the proper level of disclosure.
They also say that money they put into AmeriServe several weeks
prior to the reorganization filing shows they had confidence in
the company's ability to survive.

A $100 million loan DLJ made to AmeriServe in December was senior
to the junk bond DLJ underwrote in September, meaning DLJ gets
repaid $100 million before the bondholders get anything. The
bondholders are pushing for "equitable subordination," arguing
that the DLJ loan should be reduced to below the seniority of the
bond, so the bondholders would get paid first.

BARNEYS NEW YORK: Comment Letter From SEC Regarding Statements
Barneys New York, Inc., a Delaware corporation, is the parent
company of Barney's, Inc., a New York corporation, which together
with its subsidiaries, is a leading upscale retailer of men's,
women's and children's apparel and accessories and items for the
home. The company is engaged in three distribution channels which
encompass its various product offerings: the full-price stores,
the outlet stores and the warehouse sale events. In addition, the
company is involved in licensing arrangements under which the
"Barneys New York" trade name is licensed for use in Asia.

Barneys operates seven full-price stores (three of which are
flagship stores located in New York, Chicago and Beverly Hills
and four of which are regional stores) and eight outlet stores
throughout the United States under the "BARNEYS NEW YORK" trade
name. Barneys merchandise is priced at the upper end of the
market and appeals to sophisticated customers whose income levels
are above average. Its merchandising philosophy stresses a
variety of fashion viewpoints. It offers a mix of merchandise,
including men's, women's and children's clothes and accessories
plus decorative items for the home and gifts. The merchandise is
from a variety of resources including established designers, new
designers, branded goods and private label goods. The company
purchases merchandise from a broad range of vendors, domestic and
foreign, including designers, manufacturers of branded goods and
private label resources. Major designers include Giorgio Armani,
Prada, Jil Sander, Donna Karan, Comme des Garcons, Robert
Clergerie and Ermenegildo Zegna. Major branded goods include
Oxxford and Hickey Freeman, and major cosmetics lines including
but not limited to Chanel, Francois Nars and Kiehls. A
significant portion of the merchandise is manufactured in Europe
(primarily Italy). The flagship stores in New York and Beverly
Hills also include restaurants managed by third party
contractors. In addition to its full-price retail business, the
company has developed two operations which focus on outlet stores
and warehouse sale events.

On April 21, 2000, Barneys New York, Inc., in response to
comments of the staff of the Securities and Exchange Commission,
filed amendment no. 3 to its financial information statement. On
April 27, 2000, the company received an additional comment letter
from the staff of the Securities and Exchange Commission, asking
the company to respond to matters related to the financial

Because the financial statements contain information required in
the company's annual report, and due to the timing of the comment
letter and the desirability of completing pending discussions
with the SEC staff and responding to their comment letter,
Barneys indicates it will not be able to timely file selected
financial data on an annual report in a timely fashion.

BRAZOS SPORTSWEAR: Hearing on Approval of Disclosure Statement
A hearing will be held before the Honorable Peter J. Walsh, US
Bankruptcy Court, District of Delaware, on June 15, 2000 at 3:00
PM to consider the adequacy of the information contained in, and
approval of, the Disclosure Statements of the debtors, Brazos
Sportswear, Inc. and its affiliates.

CKE RESTAURANTS: Moody's Lowers Ratings
Moody's Investors Service lowered the ratings on CKE Restaurants,
Inc's debt as follows:

$370 million revolving credit facility to B1 from Ba3,

$200 million senior subordinated notes, due 2009, to B3 from B2,

$160 million convertible subordinated notes, due 2004, to Caa1
from B3.

Moody's also lowered the company's senior implied rating to B1
from Ba3 and its unsecured issuer rating to B2 from B1. The
rating outlook is stable. This rating action concludes the review
that commenced on January 26, 2000.

The rating action reflects the ongoing challenges associated with
turn around of the Hardee's chain and moderating operating
results at the Carl's Jr. subsidiary, both of which have caused a
reassessment of future bondholder protection measures. The depth
of problems at Hardee's unexpectedly threatened the company's
compliance with bank loan financial covenants, and has led the
company to alter its strategy of owning significant Hardee's
restaurants. Consequently, the company is attempting to sell a
significant number of Hardee's units to franchisees over the next
several months. A performance turnaround at the company's
hamburger restaurants, especially Hardee's, is further away than
we had previously anticipated. The historically strong operating
performance at the Carl's Jr. subsidiary is likely to be more
moderate going forward, given increased competitive pricing
pressure and rising restaurant labor and training costs.

The stable outlook contemplates that meaningful leverage
reduction will occur in the near term from Hardee's asset sales,
but that overall operating performance remain moderately lower
than results achieved prior to the Hardee's acquisitions in 1997.
We continue to expect that a performance recovery at Hardee's is
at least a year away, but that CKE will maintain satisfactory
access to liquidity under its recently revised bank facility.

The ratings continue to reflect the challenges that management
faces in turning around Hardee's as well as the additional burden
in restoring profitability at Carl's Jr. to it's prior level,
which by most measures is still superior relative to industry
peers. The ratings also recognize the intense competition in the
quick service segment of the restaurant industry, the moderate
geographic diversity of the Carl's Jr. system, and the effective
marketing programs of direct competitors such as McDonald's and
Jack In The Box.

However, the ratings also consider that CKE is one of the largest
quick service hamburger operators, that the Hardee's operations
improves its geographic diversity, and that Carl's Jr. remains
one of the better performing quick service hamburger concepts
within the industry. Management's recent efforts to sell Hardee's
units also supports the ratings, as does the solid performance at
Taco Bueno with good restaurant margins and growing comparable
store sales.

The B1 rating on the $370 million revolving credit facility
recognizes that the banks do not have a perfected interest in
company-owned real estate, which would result in only moderate
protection in a distressed scenario. The facility is secured by
the capital stock of the company's operating subsidiaries,
guaranteed by the operating subsidiaries, and secured by the
operating subsidiaries non-real estate assets. We expect that
availability under the facility will decline to roughly $225
million after the proposed asset sales, and that outstanding
draws will approximate $100 million given the corresponding
reduction in capital outlays needed at remaining Hardee's units.

The B3 rating on the $200 million senior subordinated notes
recognizes that these notes are guaranteed by the company's
operating subsidiaries, but are contractually subordinated to the
bank facility. The Caa1 rating on the $160 million convertible
subordinated notes considers that these notes are structurally
subordinated to all of the company's other obligations, since
they are not guaranteed by the company's subsidiaries.

Within the past few months, CKE has embarked on a plan to sell
about 500 Hardee's restaurants to franchisees by October 2000.
With net sale proceeds estimated by Moody's at $200 million, this
should significantly reduce leverage from the $285 million
currently outstanding under the bank facility. We believe that
such asset sales will moderate the need to incur additional debt
to effect management's remodeling plans for Hardee's. CKE has
completed the conversion of more than 500 of its 1,354 owned
restaurants from Hardee's to Star/Hardee's. Along with a revamped
advertising campaign, the conversion of remaining owned and
substantially all franchised Hardee's restaurants is designed to
add popular Carl's Jr. offerings to the Hardee's lunch and dinner
menu, while keeping the strong Hardee's breakfast menu.

Net debt was 4.2 times trailing EBITDA, excluding $42 million of
restructuring costs, while adjusted debt to EBITDAR reflected the
company's higher effective leverage from leased properties at 5.7
times. Adjusted EBITDA was only 2.7 times interest for the twelve
months ending January 31, 2000. We expect modest performance
improvement over the near term, with debt to EBITDA declining
below 4 times, but adjusted debt to EBITDAR remaining above 5
times. Consolidated EBITDA is expected to improve from an
adjusted 9.3% in fiscal 2000 to approximately 11% in fiscal 2001,
excluding realized losses on the sale of Hardee's units.

CKE Restaurants, Inc., headquartered in Anaheim, California,
operates or franchises 934 Carl's Jr. and 2,788 Hardee's quick
service hamburger restaurants, and 121 Taco Bueno quick service
Mexican restaurants.

DIAGNOSTIC HEALTH: Seeks To Reject 28 Leases
Diagnostic Health Services, Inc. and its various subsidiaries
request that the court enter an order authorizing the debtors to
reject 28 leases of non-residential real property.  The debtors
have either made arrangements to close their operations on the
leased premises or have already vacated the premises and
therefore no longer need the real property referenced in the
leases for business purposes.

The leases are not necessary to the debtors' reorganization, and
rejection of the leases is in the best interests of the debtors,
their creditors and other interested parties.  The leases cover
premises located in Alabama, Arizona, New Mexico, Georgia,
Nevada, California, Texas, Missouri, Louisiana and Oklahoma.

DIGITAL WIRELESS: Confirmation of Plan
Advanced Wireless Systems, Inc. (OTC Bulletin Board: AWSS)
announced the confirmation of the Plan of reorganization of
Digital Wireless Systems, Inc., which occurred Tuesday in the
Federal Bankruptcy Court, Middle District of Tennessee.  Under
the Plan, Advanced Wireless, as the Successor to the Debtor,
will acquire all assets of Digital Wireless in exchange for
Advanced Wireless common stock and stock purchase warrants, which
will be distributed to Digital Wireless' creditors and equity
security holders.

The Digital Wireless acquisition will increase Advanced Wireless'
Broadband wireless (MMDS) holdings by over 700% and will triple
its monthly gross revenues.  The closing of the sale is expected
to occur at the end of June 2000.

Digital Wireless owns and/or leases multiple Broadband MMDS
frequencies in each of its four markets: Baton Rouge, LA;
Shreveport/Bossier City, LA; Clarksville, TN; and Reading, PA.  
While these frequencies are currently used to provide 'wireless
cable' television programming, Advanced Wireless plans to
convert the stations' assets to the emerging field of Broadband
Access, similar to the services already provided by Advanced
Wireless in Mobile, AL.

Broadband Access is the ability to deliver a wide variety of
telecommunications products and services with a single delivery
technology. Advanced Wireless' near future plan is to offer a
wide variety of products, including web hosting, web page design,
merchant services, E-commerce and T-1 speed Internet access, as
well as television and special interest programming, on a
wireless basis.

Digital Wireless is currently a full-service commercial and
residential provider of subscription television and DBS-Internet
services in each of its four markets.  Television programming is
provided primarily through agreements with DirecTV and Dish
Network (via direct broadcast satellite transmission) and
World Satellite Network (WSNet).

DLS MANAGEMENT: Case Summary and 16 Largest Unsecured Creditors
Debtor: DLS Management, Inc.
        524 East 73rd Street
        New York, NY 10021

Petition Date: May 24, 2000      Chapter 11

Court: S. District of New York

Bankruptcy Case No.: 00-12349

Debtor's Counsel: Joseph Thomas Moldovan, (0232)
                  Fischbein Badillo Wagner Harding
                  909 Third Ave
                  New York, NY 10022
                  Tel: (212) 453-3773
                  Fax: (212) 644-7485
Total Assets: $ 3,115,051
Total Debts:  $ 1,118,330

16 Largest Unsecured Creditors

Nancy Esteva
60 Compo Mill Cove        Sh Adv & Salary
Westport, CT 06880        Owed                 $ 355,000

Hudson United Bank
1000 MacArthur Blvd.
Mahwah, NJ 07430          Bank Loan            $ 350,000

Stanley Muss              Rent                 $ 174,648

Rosa Santoro              Loan                  $ 87,630

Rosenman & Collin         Legal Fees            $ 40,000

Stephen P. Shea           Legal Fees            $ 16,645

Local 348-S F.C.W.                              $ 13,538

Mandel & Resnick, PC      Legal Fees            $ 12,500

NCRI Solutions            Trade Debt             $ 7,808

Kemper Insurance          Insurance premiums     $ 4,123

Colonial Elevator         Elevator maintenance   $ 3,734

Park Plus                 Trade debt               $ 405

Eastcoast Uniforms        Uniform services         $ 172

PAYCHEX                   Payroll services         $ 167

Little Johns Warehouse    Doc storage              $ 145

New York City Department
of Finance                Tax in illum. sign       $ 100

EMPLOYEE SOLUTIONS: Reports Progress With Bondholder Negotiations
Employee Solutions, Inc. ("Company")(OTCBB:ESOL) announced that
negotiations with its bondholders have progressed to the next
step in its efforts to complete a restructuring plan.

The Company reports that it has presented a term sheet to the
bondholders and has fully cooperated with the bondholders'
advisors, who have completed their own independent evaluation of
the Company's financial condition and future outlook. As a
result, the bondholders have granted the Company forbearance on
the April 15, 2000, interest payment to allow sufficient time to
complete the negotiations currently underway.  

"We are pleased with the current progress being made, and
everyone is seeking a successful resolution to this restructuring
effort. The Company's restructuring plan remains on schedule, and
we hope to be able to include a restructuring proposal in the
proxy statement to be mailed to shareholders by mid-June. The
annual shareholders' meeting is scheduled for mid-July," said
Sara Dial, Chairman of the Board of Employee Solutions.

FIDELITY BANCORP: Reports Second Quarter Earnings of $1.1MM
Fidelity Bancorp Inc.'s results of operations are dependent on
net interest income which is the difference between interest
earned on its loan and investment portfolios, and its cost of  
funds, consisting of interest paid on deposits and borrowed
money.  The company also generates non-interest income such as
transactional fees, loan servicing fees, and fees and commissions
from the sales of insurance products and securities through its
subsidiary. Operating expenses primarily consist of employee
compensation, occupancy expenses, federal deposit insurance
premiums and other general and administrative expenses.

The company reported earnings for the second fiscal quarter ended
March 31, 2000 of $1.1 million, compared with $994,000 for the
same quarter a year ago, an increase of 13.5%.  Earnings for the
six-month period ended March 31, 2000 were $2.2 million, compared
with $1.9 million for the same six-month period a year ago.

FRUIT OF THE LOOM: Committee To Examine Farley Under Rule 2004
The Official Committee of Unsecured Creditors sought and obtained
an order from Judge Walsh, pursuant to Rule 2004 of the Federal
Rules of Bankruptcy Procedure, directing William Farley to
furnish all documents relating to the Loan Guaranty and his
claimed expenditures of the proceeds.  In addition, the
committee wants Farley's personal financial statements from
February 1, 1999, to December, 1999, documents that relate to his
communication with a financial advisor, and documents pertaining
to loan collateral.  They also want the right to review any
papers from meetings of the Board of Directors, or any
subcommittees, at which the Loan Guaranty was discussed.  
Additionally, pursuant to Rule 2004 and Rule 30(b)(6), the
Committee is authorized to depose Mr. Farley.   

The Committee served a Subpoena on Mr. Farley, commanding his
appearance at a deposition to commence, in Chicago, on June 8,
2000, and continue from day to day until the Committee's
questions about the Farley Loan and other matters
are answered.  Bank of America and representatives of the
Informal Committee of Secured Bondholders are invited to
participate.  The proceedings may be videotaped, the Official
Committee indicates. (Fruit of the Loom Bankruptcy News Issue 6;
Bankruptcy Creditors' Services Inc.)

GLOBAL OCEAN: Seeks To Retain Valuation Consultants
The debtors, Global Ocean Carriers Limited, et al. seek court
authority to retain, employ and pay Jacq. Pierot Jr. & Sons, Inc.
as valuation consultant with respect to dry bulk carrier vessels.  
Compensation will be $10,000 for the firm's valuation report plus
$1,000 per certificate for each vessel.  Further, Pierot will be
paid at the rate of $7,500 per day for providing testimony, plus
reimbursement of expenses and other charges incurred by Pierot.

The debtors also seek to retain, employ and pay The Commonwealth
Group as valuation consultant with respect to container vessels,
to provide appraisal and valuation services.  Compensation for
services to be rendered by Commonwealth will be $12,500 for its
valuation report.  Further, Commonwealth will be paid at the rate
of $2,000 per day for providing testimony, plus reimbursement of
expenses and other charges incurred by Commonwealth.

GST TELECOMMUNICATIONS: Postpones Annual Shareholders' Meeting
GST Telecommunications, Inc. (Nasdaq: GSTXQ) today announced that
it has obtained an order of the Ontario Superior Court under the
Companies' Creditors Arrangement Act (Canada) recognizing the
Chapter 11 proceedings initiated by the Company in the U.S. As a
result of these proceedings, the Company will defer its annual
shareholders' meeting and hold the meeting in the course of the
Company's restructuring.

GST Telecommunications, Inc., an Integrated Communications
Provider (ICP) headquartered in Vancouver, Wash., provides a
broad range of integrated telecommunications products and
services including enhanced data and Internet services and
comprehensive voice services throughout the United States, with a
significant presence in California and the West.  Facilities-
based GST continues to focus on its western regional strategy by
anchoring its next generation networks in local markets and
connecting them via long haul fiber networks.

HARNSICHFEGER: Application To Employ Piper Marbury
In response to an adversary proceeding brought by Omega Papier
Wernshausen GmbH against HII, Beloit and three officers, Mark E.
Readinger, Ross J. Altman, and Scott T. Baker, the Debtors seek
the Court's approval to employ and retain Piper Marbury Rudnick &
Wolfe as Special Counsel to represent the three officers, nunc
pro tunc to March 1, 2000.

The Debtors and the individual defendants believe that the
individual defendants need counsel in the litigation separate
from counsel to HII and Beloit. HII and Beloit have notified the
insurance company concerned accordingly and requested that the
insurer pay PMRW's fees with respect to this matter.

Piper Marbury Rudnick & Wolfe was formerly known as Rudnick &
Wolfe, who the Court authorized the Debtors to retain and employ
as Special Counsel for Real Estate and Certain Corporate Matters.  
Considering PMRW's previous experience in working with the
Debtors, that the attorneys at PMRW are well qualified, are
disinterested parties in the Debtors' chapter 11 cases, and do
not represent any interest adverse to the Debtors or their
estates, the Debtors ask Judge Walsh to authorize them to employ
and retain PMRW to represent the three officers in the Omega
litigation. (Harnischfeger Bankruptcy News Issue 23; Bankruptcy
Creditors' Services, Inc.)

HARVARD PILGRIM: Court Ensures To Pay Creditors
Judge Michael Silverstein in a Massachusetts Supreme Judicial
Court approved an agreement to ensure the failed HMO in Rhode
Island, Harvard Pilgrim Health Care for its creditors
to be paid in full, including doctors, hospitals, and former
Harvard employees which estimates to a total of $50 - 60 million.

LIL' THINGS: Order Approves Final Distribution; Case Dismissed
LiL' Things, Inc., debtor is authorized to make final pro rata
distributions to all administrative claimants.  After such
distributions are made to creditors holding allowed claims, the
remaining assets of the debtor are de minimis and the case is
dismissed by order of the Honorable Harold C. Abramson on March
17, 2000.

Overwhelmed by several pending lawsuits, the Marine Military
Academy in Harlingen has filed for bankruptcy protection.

The private, all-male institution, founded in 1965, filed for
Chapter 11 bankruptcy protection in Arizona, where it was

"We filed for bankruptcy protection to ensure the continued
normal operation of school in the face of several burdensome
lawsuits," said academy president Wayne F. Rollings, a retired
major general with the U.S. Marines.

The families of several former students have filed at least three
lawsuits against the academy alleging the all-male institution
inadequately supervised cadets and knew of alleged hazing
incidents that took place between 1993 and 1997.

MARINER: Omnibus Motion To Settle Prepetition PI Claims
The Debtors tell the Court they face 850 personal injury claims
as at petition, 590 against MPAN, and 260 against Mariner Health,
arisen over periods dating back to 1986. To deal with such a
large number of claims as quickly and efficiently as possible,
the Debtors ask the Court to authorize a streamlined settlement
process for these pre-petition claims, and to dispense the
Debtors with the requirement to seek court approval for
settlement consummation for each respective claim.

The Debtors explain that generally speaking, claims have three

(i) the deductible or self-insured portion, which should be
treated as a general unsecured claim and receive distribution
in accordance with the plan;

(ii) the portion covered by insurance which should be paid by the  
insurer; and

(iii) the portion that is not covered by insurance, either
because it exceeds policy limits, is not covered by the express
terms of the policies, or is otherwise subject to coverage

Prior to the Petition Date, the Debtors settled claims in the
ordinary course of their business with the assistance of either a
Third Party Administrator or the insurer, depending upon the year
in which the claim arose, and on the applicable insurance policy.


The Debtors propose to continue with their pre-petition process
except that:

(i) instead of paying the deductible or self-insured portion of
a  settled claim for which the Debtors are liable, to allow a
general unsecured claim for an agreed amount up to that portion;

(ii)  to authorize non-debtor parties to pay any settlement
amount in excess of the deductible or self-insured portion for
which the Debtors are liable without further order of the Court.

The Debtors promise they will submit quarterly status reports to
the Agent for the Senior Secured Prepetition Lenders and
Postpetition DIP Lenders and the Creditors' Committee,
indicating: (i) the number of settled claims; (ii) the amount of
allowed unsecured claims; (iii) the aggregate number of the
settled actions for which payment has been made by the respective
non-Debtors; and (iv) the aggregate amount of the payments made.

The Debtors contend that continuing with the settlement process
may enable them to avoid making substantial cash outlays to
litigate personal injury claims when these can be satisfied by
the allowance of general unsecured claims. The Debtors remind the
Judge that the attorneys' fees and other expenses associated with
litigation will be substantial, given that claims of this kind
which are the subject of actions pending in state and federal
courts throughout the country.

The Debtors further assert that with the extensive experience of
the parties involved in settling claims, there is no reason to
impose on them the burden of seeking court approval on a
settlement-by-settlement basis for the large number of claims.

The Debtors steer Judge Walrath's attention to Rule 9019(b) of
the Federal Rules of Bankruptcy Procedure which provides for the
compromise and settlement of creditors' claims.  The
authorization sought in this Motion is also appropriate, the
Debtors contend, because it applies only to the Debtors'
liability under the respective deductible or self-insured
portion, but does not provide for the payment of such amounts in
cash at the time the motion is submitted.

The Debtors assure the Court they have ample incentive to attempt
to settle claims for as little as possible, without the need for
notice and a hearing on a settlement-by-settlement basis. They
tell Judge Walrath that they are fully aware that settlements of
existing Claims may have repercussions in post-petition or post-
plan confirmation personal injury claims. They are also cognizant
of the effect that the size of their claims settlements may have
on their future relationship with liability insurers.

In the present cases, the Debtors tell Judge Walrath that the
potential benefits of streamlining the settlement process are
great considering the large volume of claims against the Mariner
Group.  A hearing on the Motion is scheduled for May 24, 2000.
(Mariner Bankruptcy News Issue 5; Bankruptcy Creditors' Services,

MEDICAL SPECIALISTS: Files for Bankruptcy
The Richmond Times Dispatch reports on May 19, 2000 that Medical
Specialists Inc., a West End medical practice with 13 physicians
and 54,000 active patients, has filed for bankruptcy protection
and plans to go out of business in about two months.

Papers filed in U.S. Bankruptcy Court here say the practice wants
to keep operating long enough to liquidate assets and smoothly
transfer patients to other health care providers. If they desire
it, patients would be able to stay with their current doctor when
he or she moves to another practice.

All the physicians will continue working for the practice, whose
offices are at 7229 Forest Ave. in Henrico County, for about 60
days. The specialties of the doctors in the practice include
dermatology, gastroenterology, hematology-oncology, internal
medicine and obstetrics-gynecology.

Medical Specialists Inc. listed assets of nearly $ 3.6 million
and liabilities of nearly $ 3.2 million when its lawyers filed
for reorganization May 9. Its reorganization plan must still be
approved by the court, but it appears likely most creditors will
be paid.

MICROAGE: Final Approval For $210MM DIP Financing
MicroAge Inc. announced that it has received final approval from
the Bankruptcy Court of its $210 million debtor-in-possession
(DIP) financing agreement.

Under the DIP agreement, a group of financial institutions led by
Citibank, N.A. will provide post-petition financing to MicroAge
to purchase goods and services and fund the company's ongoing
operations during its voluntary restructuring under Chapter 11.
Initially the company had requested and received interim approval
from the Court for$225 million in debtor-in-possession (DIP)

Since the initial date of Chapter 11 filing on April 13, 2000,
the company has re-assessed its needs, and requested and received
approval on $210 million in DIP financing. The revised terms of
the agreement also provide for greater availability of funds for
product purchases and reduced fees.

"The DIP financing facility will provide adequate financial
resources to fund our post-petition vendor and employee
obligations and other operating requirements as MicroAge moves
forward with its restructuring," said Jeffrey D. McKeever,
MicroAge chairman and chief executive officer.

To facilitate the previously announced restructuring necessary to
continue its transformation into a business-to-business (B2B)
provider of technology procurement solutions, MicroAge and
certain subsidiaries filed voluntary Chapter 11 petitions in the
U.S. Bankruptcy Court for the District of Arizona in Phoenix
on April 13, 2000.

MicroAge Inc., a Fortune 500 company, provides B2B technology
solutions and infrastructure services. The company is composed of
information technology businesses, delivering ISO 9001-certified,
multi-vendor integration services and solutions to large
organizations and computer resellers worldwide.

The company does business in more than 40 countries and offers
over 250,000 products from more than 1,000 suppliers backed by a
suite of technical, financial, logistics and account management
services. More information about MicroAge is available at

NANTUCKET INDUSTRIES: Deadline For Filing Proofs of Claim
Pursuant to an order of the court dated May 4, 2000, the time
within which all creditors of Nantucket Industries, Inc.  who
have not already done so, may file their proof of claim against
the above named debtor's estate to and including the 19th day of
June, 2000.

NEW YORK BAGEL: New World Completes Acquisition of Stores
New World Coffee-Manhattan Bagel, Inc. (Nasdaq: NWCI) announced
that it has completed the acquisition of the leases and store
operating assets of 17 company-owned New York Bagel stores in
Oklahoma and Kansas from New York Bagel Enterprises, Inc., a
Chapter 11 debtor.  New World intends to sell these stores
to third parties as Manhattan Bagel branded franchised locations.

In addition, New World acquired Bank of America's lien rights to
substantially all of the remaining assets of New York Bagel
Enterprises, Inc. and its affiliate, Lots 'A Bagels, Inc., which
is also a Chapter 11 debtor. As a result, New World now controls
the liens on two other company-owned New York Bagel stores in
Oklahoma, and on the seven company-owned Lots 'A Bagels stores
located in Colorado.  New World expects to acquire those stores
through the respective bankruptcy cases of New York Bagel
Enterprises, Inc. and Lots 'A Bagels, Inc., both of which are
pending in the District of Kansas, in Wichita.

The acquisition is expected to be accretive to earnings

In addition to the leases, store operating assets and lien
rights, New World also acquired all rights to the New York Bagel
tradename and trademarks, and may take ownership of New York
Bagel Enterprises, Inc.'s rights under its franchise agreements
with approximately 13 franchisees.

All told, these transactions will add approximately 26 company-
owned bagel shops to New World's existing store network, and
potentially an additional 13 franchised stores.

All of the New York Bagel stores will use frozen dough and cream
cheese produced in Manhattan Bagel's Eatontown, NJ factory and
coffee roasted at the New World plant in Branford, CT.

"The New York Bagel acquisition represents the latest phase of
our growth plan," said Ramin Kamfar, New World's Chairman and
CEO. "In addition to expanding to three new Midwestern markets,
these transactions solidify our position as the No. 1 franchisor
in the industry and further leverage our investment in Manhattan
Bagel's infrastructure."

New World Coffee-Manhattan Bagel, Inc. currently franchises,
licenses or owns stores under its four brands in 28 states and
Washington, D.C. The Company is vertically integrated in bagel
dough and cream cheese manufacturing, and coffee roasting, with
plants in New Jersey, California and Connecticut.

NOXSO CORP: Completes Implementation of Confirmed Plan
Noxso Corporation, (OTC: NOXOQ) announced the completion of the
implementation of the company's confirmed reorganization plan.  
The company's confirmed reorganization plan authorized the sale
of the company to an investor group and the sale of the company's
main asset, the Noxso Technology.  Both sales have taken place
and are complete as of may 25, 2000.  As part of the sale of the
company, the current shareholders of record as of the end of
business yesterday, May 24, 2000 will cease to have an equity or
any interest in the company. Pursuant to the plan, proceeds from
the asset sales will be used to pay administrative expenses and
to the extent possible, to retire debt.  The investor group that
purchased control of the company will be distributing 10% of the
company's fully diluted equity to the company's unsecured
creditor class as part of the confirmed plan.  Additionally, as
part of the plan the investor group is empowered to elect a new
board of directors.

NTT DATA CORP.: Posts 18B Yen group net loss
Japan's NTT Data Corp. (9613) Monday reported a group net
loss of Y18.11 billion for the year ended March 31,
compared with net profit of Y16.31 billion the previous
fiscal year.

Extraordinary losses totaling Y63.8 billion dragged Japan's
largest data network services provider into the red. The
losses stemmed from payments to cover pension liabilities
and the writeoff of expenses related to software systems
The company's group pretax profit amounted to Y34.70
billion, an 8.1% on-year decline. NTT Data also reported
group operating profit slipped 10.7%, to Y50.74 billion,
while group revenue edged 2.1% higher to Y725.35 billion.

The company's results for this fiscal year were in line
with earning forecast revisions made on March 31. The
absence of extraordinary losses following this year's big
write-offs, combined with an increase in overall group
revenues, will help the company move back into the black
for the current fiscal year ending March 31, 2001, it said.

NTT Data forecasts group net profit of Y21 billion in the
current fiscal year. It estimates group pretax profit will
amount to Y38 billion.  NTT Data sees group revenues for
the current fiscal year of Y774 billion, an 6.7% on-year
increase. Overall revenue growth is likely to be supported
by 8% growth in orders for its system integration (SI)

NTT Data also forecasts 8% growth in revenues from its
network system services boosted by new Internet-related
business. However, the company anticipates that revenue
from some systems maintenance services will likely fall.
The company also unveiled its mid-term business targets. In
the fiscal year ended March 2003, NTT Data aims to generate
group pretax profit of Y50 billion on group revenues of
Y900 billion.

By fiscal 2002, the company also hopes to raise return on
equity (ROE) to 7.0% and bring its free cashflow into the
black, it said.  At a press conference in Tokyo Monday,
senior company executives said that the company is planning
to improve its cashflow situation by liquidating some of
its assets.  (Nikkei  22-May-2000)

OXFORD HEALTH PLANS: Revenues For Quarter Down 3.6%
Oxford Health Plans Inc.'s revenues consist primarily of
commercial premiums derived from its Freedom Plan, Liberty Plan
and health maintenance organizations ("HMOs") and reimbursements
under government contracts relating to its Medicare+Choice
programs, third-party administration fee revenue for its self-
funded plan services and investment income.

Total revenues for the quarter ended March 31, 2000 were $1.02
billion, down 3.6% from $1.06 billion during the same period in
the prior year. Net earnings for the first quarter of 2000
totaled $28.8 million, compared to $3.2 million, for the first
quarter of 1999.

PACIFIC GATEWAY:  Class Action on Behalf of Shareholders
Goodkind Labaton Rudoff & Sucharow LLP and Girard & Green LLP
hereby announce that, pursuant to Section 21(D)(a)(3)(A)(i) of
the Securities Exchange Act of 1934, notice is given that a
complaint has been filed by in the United States District Court
for the Northern District of California against Pacific Gateway
Exchange (NASDAQ: PGEX), ("Pacific") and certain directors and
senior officers, charging the commission of securities fraud.
That lawsuit was filed on Thursday May 18, 2000, on behalf of all
persons who purchased Pacific common stock from May 13, 1999
through March 31, 2000.

The complaint charges the defendants with manipulating Pacific's
stock price by improperly accounting for certain expenses and
misleading the public about the Pacific's ability to continue
operating as a going concern, resulting in the material
misstatements contained in Pacific's financial and operating
results from May 1999 through March 2000.

The complaint further alleges that the individual defendants
sought to profit from their accounting manipulations by selling
Pacific's stock at prices artificially inflated by their illegal

PETSEC: Worried Shareholders Grill Board
In Sydney, Australia, angry investors directed a barrage of
questions at the board of Petsec Energy Ltd. over the future of
Petsec's troubled US subsidiary.             

Last month, Petsec Energy Inc (PEI) - which is the core business
of oil exporation company Petsec Energy Ltd - filed a voluntary
bankruptcy petition in the Louisiana Federal Court under Chapter
11 of the US Bankruptcy code.
The court procedure followed negotiations in January between PEI
and its US unsecured noteholders, so that the company could
reconstruct its balance sheet.  Petsec Energy Ltd was ordered not
to extend loans to the US company, which owes $107 million to the
noteholders. "The outcome of this process is unpredictable and
may result in the sale of all of Petsec Energy Inc's assets,"
Petsec chairman and managing director Terrence Fern told
shareholders at the meeting. "A plan of reorganisation is
required by the courts within three months. At that time you
company will be in a better position to assess its future
operating strategy. "Be assured your board and management are
dedicated to achieving both a satisfactory resolution and
rebuilding of Petsec Energy," he said.

One shareholder demanded to know whether the sale of the US
assets would impact the Australian company's already troubled
balance sheet, and the future proftability of the company.

"No, the noteholders only have recourse to the US assets," Mr
Fern said. Mr Fern earlier told shareholders that the company's
1999 performance had been insufficient to rectify balance sheet
damage borne by the company in 1998.

Petsec posted a net loss of $42.098 million for the year ended
December 31 1999, which included an abnormal loss of $16.62
million due to impairment of permits and exploration and

Another shareholder proposed to the board that they should buy
back all its shares and then ask shareholders to re-subscribe.
"Well, considering that the entire business is based on the US
subsidiary...that's one of the options that the board of
directors will have before them - to give funds back," Mr Fern

Petsec's shares closed at 9.7 cents today, down 0.4 cents, from
around 46.3 cents a year ago.

SAMSONITE: Annual Meeting Will Be Held On June 22, 2000
The annual meeting of stockholders of Samsonite Corporation will
be held June 22, 2000 at the Hilton Garden Inn, Denver Airport,
16475 East 40th Circle, Aurora, Colorado.  The meeting will
convene at 10 A.M., Mountain Time.

In addition to the regular business of the meeting there will be
a report on the company's operations during fiscal 2000, which
ended January 31, 2000.  Scheduled items on the agenda are:

1)  Election of three Class II Directors for a term of three
years and until their successors are elected and qualified;

2) Approval and ratification of the appointment of KPMG LLP as
auditors for fiscal 2001.

The Board of Directors has declared only stockholders of record
as of the close of business on April 20, 2000 shall be entitled
to receive notice of, and to vote, at the meeting.

SUN HEALTHCARE: Application To Employ KPMG LLP as Consultants
Judge Walrath approved the Debtors' employment of KPMG LLP, to
render tax, accounting, and reimbursement consulting services for
the first few months of Sun Healthcare's chapter 11 cases.  
Around December or early January, KPMG expanded its services to
the Debtors to include those services formerly rendered by Ernst
& Young, LLP.  Accordingly, the Debtors sought and obtained the
Court's authorization to employ KPMG, nunc pro tunc to October
14, 1999, as their state and local tax consultants, and Medicare
and Medicaid reimbursement and regulatory compliance consultants
and assistants for the Debtors.

For the provision of state and local tax refund services, KPMG
will bill the Debtors a contingent fee of 33% of state and local
tax refunds. Whether KPMG determines that a transaction is
eligible for a refund or not, KPMG will inform the Debtors of any
relevant findings or recommendations for improving state sales
and use tax reporting procedures.

KPMG will also provide Medicare and Medicaid reimbursement and
regulatory compliance assistance and consulting services to the
Debtors and to the Debtors' special litigation counsel at the
firms of Sidley & Austin and Murtha, Cullina, Richter and Pinney,
L.L.P. The services provided to the Firms will consist of
litigation support and reimbursement and regulatory compliance

KPMG's fees for providing tax consulting services will be based
on actual amount of time of work plus reasonable out-of-pocket
expenses. KPMG's professionals who will be assigned to this
engagement will charge hourly rates of:

                   $195         Senior Manager
                   $150         Manager
                   $125         Senior Staff
                   $100         Staff

For the provision of gross receipts/sales and use tax compliance
services for subsidiaries of Sun, KPMG will charge hourly rates

                   $125         Organization
                   $75          Compliance
                   $125         Registration
                   $125         Due Diligence

In providing service to the Debtors' special litigation counsel,
KPMG will charge hourly rates of:

                   $325 - 375  Partner
                   $250 - 300  Managing Director
                   $225 - 275  Senior Manager
                   $225 - 250  Clinical Manager
                   $175 - 250  Reimbursement Manager
                   $200 - 250  Clinical Senior Consultant
                   $125 - 175  Reimbursement Senior Consultant
                   $175 - 200  Clinical Consultant
                   $125 - 150  Reimbursement Consultant
                   $100 - 150  Loaned Assurance Staff
                   $100 - 140  Staff Analyst

With respect to a subpoena, KPMG's service will be an hourly rate
of $375 per hour inclusive of attorneys' fees.

Prior to the Petition Date, the Debtors paid KPMG a retainer in
the amount of $25,000.00. As of the Petition Date, the Debtors
owed KPMG $225,246.00 for prepetition services.  Upon approval of
the employment of KPMG, KPMG will apply the prepetition retainer
to prepetition debt and waive the deficiency.

Each of the Debtors shall be jointly and severally liable for
fees and expenses of KPMG since each of the Debtors will benefit
from the services to be provided.

The Debtors tell Judge Walrath that the services to be rendered
by KPMG are not duplicative with the services of other
professionals retained by the Debtors and KPMG will undertake
every reasonable effort to avoid any duplication of services.

THERMATRIX INC: Results For Fiscal Year Ended December 31, 1999
For fiscal year 1999 revenues of Thermatrix, Inc. increased to
$21.7 million from $5.9 million in the prior year, primarily as a
result of the January 1999 acquisition of Wahlco Environmental
Systems, Inc. The revenue figures have been restated to account
for discontinued operations as a result of the appointment by
Wexford Management LLC of an administrative receiver in the
United Kingdom for all of the assets of the Company's U.K.
subsidiaries. The Company expects the administrative receiver
to dispose of all of such U.K. assets.

The Company recorded a net loss of $20.6 million, or $2.65 per
share for fiscal year 1999 compared to a net loss of $7.9
million, or$1.03 per share for fiscal year 1998. The basic net
loss per share of common stock from continuing operations is
$2.25 for fiscal year 1999 compared to $0.87 for fiscal year
1998. The basic net loss per share of common stock from
discontinued operations is $ 0.40 for fiscal year 1999 compared
to $0.16 for fiscal year 1998.

A number of unusual and one-time charges were incurred during
1999 that resulted in the net loss per share of $2.65. These
included losses on discontinued UK operations of $3.1 million;
the write down of goodwill related to the Wahlco acquisition that
resulted in an impairment loss of $5.8 million; accretion of
expenses related to the June 1999 issue of the Series E preferred
shares totaling $3.1 million; and interest expenses related to
the Wexford debt and Series E preferred stock totaling
approximately $2.3 million. The Company believes that all of
these charges will be significantly lower in future periods.

The Company's Form 10-K for the fiscal year ended December 31,
1999 is on file with the U.S. Securities and Exchange Commission.

Thermatrix is an industrial company primarily serving the global
market of continuously operating facilities for a broad range of
industries that include refining, chemical, steel,
pharmaceutical, pulp and paper, electric utility, co-generation,
and industrial manufacturing. Thermatrix provides a wide variety
of air pollution control solutions, including its unique
flameless thermal oxidation technology, as well as a wide range
of engineered products and services to meet the needs of its

VENCOR: Ventas/Vencor Form Tax Agreement
Ventas Inc., a real estate investment trust, formed a "tax
stipulation" agreement with health care  company Vencor Inc. that
includes $26.6 million in refunds drawn by Ventas from a 1998 tax
return, according to a Dow Jones newswire report. The agreement
follows negotiations with  Vencor over certain disputed refunds,
Ventas said yesterday. Vencor, the primary tenant of Ventas,
filed for bankruptcy with several of its units on Sept. 13. The
agreement calls for each company to hold tax proceeds received on
or after Sept. 13 in segregated interest-bearing accounts and
contains notice provisions related to the withdrawal of funds
from the aforementioned accounts by either company. Each company
will reserve all rights and claims to amounts covered by the
agreement, Ventas said. In April, Vencor reported that its
lenders agreed to amend its debtor-in-possession financing,
primarily to revise a financial covenant regarding minimum net
amount of accounts receivable.


S U B S C R I P T I O N   I N F O R M A T I O N

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Copyright 2000.  All rights reserved.  ISSN 1520-9474.

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