TCR_Public/000804.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, August 4, 2000, Vol. 4, No. 152

                               Headlines

ALL STAR: Moody's Assigns Junk Ratings to Senior and Subordinated Debt Issues
AMERICAN ARCHITECTURAL: Ad Hoc Committee Agrees to Consensual Restructuring
AMERICAN PAD: Sells Ampad and Forms Divisions To American Tissue for $67.1MM
ANACOMP, INC.: Moody's Lowers Rating on 10-7/8% Subordinated Notes To Caa3
ANACOMP, INC.: Phil Smoot Appointed New CEO; Lloyd Miller Resigns from Board

FOAMEX INTERNATIONAL: Shareholder Suits Settled for Board Seats & Legal Fees
GENESIS/MULTICARE: U.S. Trustee Appoints Official Creditors' Committees
GEOTELE.COM: Judge Lifland Approves Debtor's Chapter 11 Plan
HARNISCHFEGER INDUSTRIES: Selling BWRC's Interest in Beloit Italy
HAWORTH HOME: Louisiana Home Healthcare Concern Files for Bankruptcy

HEALTHSOUTH CORPORATION: Moody's Lowers Senior & Senior Sub Debt Ratings
HECLA MINING: Outlook is Negative, Moody's Says, Announcing Junk Debt Ratings
HEILIG-MEYERS: Moody's Downgrades Debt Ratings on MacSaver Notes to Caa1
HEILIG-MEYERS: Fitch Lowers MacSaver Note Ratings To CCC
HEILIG-MEYERS: S&P Assigns "D" Rating to Furniture Retailer's Unsecured Debt

KMART CORPORATION: Indicates Intent to Close 66 Stores by November 1
MARQUIP INC: Common Wealth Offers $7.4 Million for Wisconsin Real Estate
MONARCH DENTAL: Lenders Agree to Waive Defaults through August 11, 2000
NATIONAL PICTURE: Obtains Financing & 400 Employees to Report Back to Work
ORCONET.COM: Internet Company in Orange County Files for Chapter 11

P&O PRINCESS: Moody's Assigns Baa1 Rating to Cruise Line's New Bond Issue
PAGING NETWORK: Reaffirms that Talks with Metrocall Are Off & Arch Deal Is On
PLATINUM ENTERTAINMENT: Illinois-Based Music Company Files Chapter 11
PLAY BY PLAY: Dismisses PricewaterhouseCoopers in Favor of Ernst & Young
SAFETY-KLEEN: Court Permits Prepetition Product Liability Suit to Proceed

TITAN ENERGY: AES Purchases Stock for $6MM & Will Pay All Creditors' Claims
TRI VALLEY: Gets New Contracts to Supply 486,000 Cases of Peaches for $9.5MM
WARNACO GROUP: Moody's Downgrades Sr. Unsecured Debt One More Notch to Baa1
ZENITH ELECTRONICS: LG Designee Woo-Hyun Paik Resigns from Board of Directors

Bond pricing for week of August 3, 2000

                               *********

ALL STAR: Moody's Assigns Junk Ratings to Senior and Subordinated Debt Issues
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Moody's confirmed the ratings on All Star Gas Corporation's 12-7/8% senior
secured notes at Caa3 and 9% subordinated debentures at C.  All Star Gas had
planned to use proceeds from asset sales to redeem the senior secured notes
which matured on July 31, 2000.  The Company was unable to finalize those
sales.  Consequently, All Star is prohibited from making the interest payment
due on the subordinated debentures.

All Star Gas, located in Lebanon, Missouri, is engaged primarily in the retail
marketing of propane and propane related appliances, supplies and equipment.


AMERICAN ARCHITECTURAL: Ad Hoc Committee Agrees to Consensual Restructuring
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American Architectural Products Corp. (OTC BB: AAPCE) said it has reached
agreement in principle for a consensual restructuring with an Unofficial
Committee of Noteholders representing the company's $125 million Senior Notes
due 2007.  This agreement stipulates that by January 31, 2001 (subject to
certain extensions):

      (1) The Company will pay the Noteholders a fixed cash settlement amount
          of 57.5% of the outstanding principal amount of the Senior Notes. The
          Company believes that this settlement will be approved by a
          substantial majority of the remaining Noteholders.

      (2) Management intends to fund the cash payment to the Noteholders
          through the sale of the Eagle Window and Door, Inc. division to an
          outside buyer as an operating concern. The Company may also sell
          other assets as necessary to generate the necessary proceeds. In the
          event the Company does not make the cash payment by January 31, 2001
          (subject to certain extensions), then the Noteholders would receive
          100% of the Company's equity in lieu of the cash payment.

      (3) All trade vendors of AAPC will continue to be paid in full and in the
          ordinary course of business. Additionally, there are no employee
          layoffs planned.

"The understanding that we have agreed to with the Unofficial Committee of
Noteholders is a critical element to a sensible, workable restructuring plan
that will place AAPC on solid financial footing," said Joseph Dominijanni,
Interim President and CEO of AAPC. "We believe that this is a fair settlement
under the present circumstances, and it will allow us to more fully focus on
finalizing and executing a turnaround plan that will improve operations and
profitability. We are appreciative of the cooperation of the Unofficial
Committee of Noteholders and their advisors during this process."

The terms of the agreement are subject to execution and delivery of mutually
acceptable definitive documentation. Definitive documentation is now being
prepared, with execution by members of the Unofficial Committee anticipated to
take place in the next week. Subsequently, the Agreement will be circulated to
all other Noteholders in the interest of securing their approval.

Samuel McNeil (704-386-1758) at Banc of America Securities LLC is advising
AAPC regarding options relating to refinancing, raising new capital,
restructuring existing funded debt obligations and potential sales of non-core
assets.

AAPC is a manufacturer and distributor of a broadly diversified line of
windows, doors and related products designed to meet a variety of consumer
demands in both the new construction and repair/remodel markets, primarily for
residential uses. The Company has been formed through the consolidation of a
number of well-established companies, with varying manufacturing histories
dating back to 1946. AAPC distributes its products regionally throughout the
United States under a number of well-established brand names that are
recognized for their quality, value engineering and customer service.


AMERICAN PAD: Sells Ampad and Forms Divisions To American Tissue for $67.1MM
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American Pad & Paper Company (OTCBB:AMPPQ) (AP&P) announced that it has signed
a definitive agreement to sell its Ampad and Forms divisions to an affiliate
of American Tissue Inc. for $67.1 million subject to final closing
adjustments. AP&P's Ampad division is one of North America's largest suppliers
of writing pads, filing supplies and retail envelopes. The Company's Forms
division is one of the four largest suppliers in the forms industry today. The
sale is subject to a number of conditions including bankruptcy court approval.

"We are pleased that a buyer of American Tissue's caliber has agreed to
purchase both Ampad and Forms," stated James W. Swent III, AP&P's chief
executive officer. "American Tissue's presence in the marketplace and
financial strength will provide significant benefits for both our customers
and employees."

"Acquiring Ampad and Forms will provide important pieces of American Tissue's
vertical integration strategy and will afford synergies with our existing
operations," stated Mehdi Gabayzadeh, American Tissue's president and chief
executive officer. "Ampad and Forms have strong brand recognition and will
help expand our product offerings from the mill to the consumer." The vertical
integration of American Tissue's printing and writing paper business has been
a focus of the company since the acquisition of the Berlin-Gorham mills in
July 1999, the launch of American Tissue's affiliate, American Paper Mills of
Vermont in December 1999 and the purchase of CST/Star Inc. in May 2000.

Founded in 1982, with headquarters in Hauppauge, New York, American Tissue
Inc. has quickly become one of the country's largest manufacturers and
distributors of consumer private label paper products as well as a major
supplier of commercial and industrial paper products for the away from home
market. American Tissue has domestic facilities located strategically from
coast to coast as well as facilities in Mexico. Additional information on the
company can be found at http://www.americantissue.com.

AP&P has been pursuing the sale of various business assets in order to reduce
its debt.  On May 9, AP&P concluded the sale of its Chicago-based Creative
Card division to Taylor Corporation and on July 17 signed a letter of intent
with Saratoga Partners for the sale of its other major business asset, the
Williamhouse division. Once the sale processes for Ampad, Forms and
Williamhouse are completed, AP&P and its advisors will review options for
finalizing the Chapter 11 process.

American Pad & Paper Co., which invented the legal pad in 1888, is a leading
manufacturer and marketer of paper-based office products in North America.
Product offerings include envelopes, writing pads, file folders, machine
papers, greeting cards and other office products. The key operating divisions
of the Company are Williamhouse, AMPAD and Forms. AP&P has been operating
under Chapter 11 protection since January 10, 2000 and has secured debtor-in-
possession (DIP) financing adequate for its operations while in Chapter 11.
Company revenues in 1999 were $573 million, additional information is
available on the Company's Website at http://www.americanpad.com.


ANACOMP, INC.: Moody's Lowers Rating on 10-7/8% Subordinated Notes To Caa3
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Moody's Investors Service lowered to Caa3 from B3 the rating on Anacomp,
Inc.'s $310 million 10-7/8% senior subordinated notes, due 2004. At the same
time, Moody's lowered to B3 from B1 its rating on the company's $75 million
guaranteed senior secured revolving credit facility, due 2003, of which $51
million had been drawn as of April 30, 2000. The company's senior implied
rating has been lowered to Caa1 from B1, while its senior unsecured issuer
rating has been lowered to Caa2 from B2. The ratings outlook is negative.

The ratings downgrade is based on Anacomp's continuing losses and diminution
of revenues and EBITDA in FY2000Q3, and, as anticipated, its violation of
certain of the covenants under the revolving credit facility. While
discussions with the company's bank group are ongoing, the company's
announcement of its retention of Donaldson, Lufkin and Jenrette to advise it
on various options, including a possible debt restructuring and prospective
additional funding sources, does not augur well for note holders. Anacomp
recorded about $331 million of debt on its March 31, 2000 balance sheet
against a negative consolidated tangible net worth of $267 million. The
company has been struggling to transition its Document Solutions business,
which has been based on the high-speed conversion of computer-generated
documents directly from computer or magnetic tape to microfilm or microfiche,
to a digital platform in the guise of docHarbor, an application service
provider which provides customized Internet-based document-management
services. However, the start-up costs of this service, as in any Internet
venture, are steep. Anacomp does not anticipate the business breaking even
prior to FY2001Q4.

During FY2000H1, Anacomp recorded an operating loss of $715,000, adjusted for
restructuring charges, and a net loss of $27.4 million on revenues of $207
million. EBITA of $36.8 million covered interest expense by 1.9 times.
However, FY2000H1 revenues decreased about 9% from FY1999H1. Moreover,
revenues from the company's computer output to microfiche (COM) services
declined precipitously to $148 million from $193 million, or by 23.3%, but
were only partially offset by the increase in digital products and digital
outsourcing services to $59 million from $34 million (71.2%). Reporting
separately from the company's traditional business lines, docHarbor
contributed only $1.8 million in revenues and accounted for $12 million
negative EBITDA. The remaining Document Solutions, Field Service and
Datagraphix businesses generated EBITDA of $52.5 million.

docHarbor, launched in October, 1999, is a compliant, archival-based service
which transforms electronic documents of virtually any type to a web-
compatible format, indexes them for easy retrieval, and hosts them in secure
customer storage centers in Herndon, Virginia and Dallas, Texas where they can
be accessed by customers over private intranets from the company's integrated
storage systems and web servers. Operation of the company's document-
processing facilities is enhanced by software technology for document
ingestion, index, compression and storage developed by Litton Adesso Software,
Inc., which was acquired by Anacomp in 1999.

Poway, California-based Anacomp, Inc. provides a broad range of document
management outsourcing solutions for the storage and distribution of, and
access to, computer-generated documents utilizing micrographics, magnetic
media and, to an increasing extent, digital technologies.


ANACOMP, INC.: Phil Smoot Appointed New CEO; Lloyd Miller Resigns from Board
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Anacomp, Inc. (Nasdaq: ANCO), announced this week that its Board of Directors
has named Edward (Phil) Smoot chief executive officer, effective immediately.
Smoot brings more than 30-years experience in the technology sector and in
acquisitions, start-ups, and turn-around situations.

Smoot joins Anacomp after almost 20 years with Nelco International, a wholly
owned subsidiary of Park Electrochemical Corporation, where he served as
president and chief executive officer from 1993 to 1999. In addition, Anacomp
said that Donald W. Thurman will be resigning as Chief Operating Officer of
Anacomp effective August 31, but will continue to work closely with the
company for an additional 60-day transition period.

The company also previewed fiscal third-quarter results and reported that, as
anticipated, it will be in violation of certain debt covenants set forth in
its senior revolving credit facility. In addition, Anacomp has retained
outside financial advisors to assist it in financial restructuring
initiatives.

Anacomp announced that, because of its continuing investment in docHarbor(SM)
and the decline in its legacy COM businesses, as well as the impact of its
previous announcement regarding the closure of its manufacturing operations,
fiscal third-quarter performance was disappointing. Revenues for the three
months ended June 30 were under $90 million and EBITDA was substantially lower
than EBITDA as reported in each of the prior two quarters. The company also
announced that it would record additional charges in the third quarter related
to the restructuring of its business and to write down the value of certain
assets. The company expects to report a net loss that is significantly larger
than the losses reported in each of the prior two quarters. The complete
earnings release will be issued on August 14.

As the company anticipated in its second quarter report on Form 10-Q filed
with the Securities Exchange Commission, it will be in violation of certain of
the financial covenants set forth in its senior revolving credit facility. The
company has been in communication with its senior lenders and is continuing to
work with them to explore alternatives to address the situation.

The company also noted it has retained Donaldson, Lufkin & Jenrette Securities
Corporation (DLJ) to advise it regarding a possible debt restructuring and to
raise new capital to fund docHarbor, Anacomp's document application service
provider (ASP).

Anacomp said that it has also retained Crossroads, Inc., a Newport Beach,
California advisory firm to assist in working with its bank group and with
other operational restructuring activities.

The company also announced that Lloyd Miller resigned from the Board of
Directors effective July 27. Miller is a private investor who joined the Board
of Directors earlier in the summer.

"We are clearly facing some serious issues, but we believe we are taking the
necessary and appropriate steps, including appointing a new CEO and retaining
outside advisors, to address Anacomp's long-term financial health," said
Richard D. Jackson, co-chairman of the board of Anacomp. "Phil brings
extensive and relevant experience, a record of success, and a fresh
perspective to our business. He recognizes both our challenges and
opportunities and is working closely with our advisors and the executive
management team to move ahead with important actions we need to address as we
reposition this company for financial success in the future."


FOAMEX INTERNATIONAL: Shareholder Suits Settled for Board Seats & Legal Fees
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Foamex International Inc. (Nasdaq: FMXI), the leading manufacturer of flexible
polyurethane and advanced polymer foam products, announced today that it had
reached agreements in principle to settle all lawsuits brought by stockholders
of the company during the past two years in Delaware state court and federal
court in New York City.

The Delaware litigation relates to the unsuccessful attempts by Trace
International Holdings, Inc. to acquire Foamex in 1998 and 1999, as well as to
certain transactions entered into between Trace or Trace's affiliates and the
company. The federal lawsuit alleges that Foamex and certain of its directors
and officers misrepresented and/or omitted material information about the
company's financial condition between May 1998 and April 1999.

Under the terms of the settlement of the federal court litigation, members of
the class of shareholders who purchased Foamex shares between May 7, 1998 and
April 16, 1999 will receive payments as defined in the agreement. Payment to
class members in the federal action, along with plaintiffs' lawyers' fees in
the federal and Delaware actions, will be paid by Foamex's insurance carrier
on behalf of the company.

Under the terms of the settlement of the Delaware litigation, Foamex agreed
that a special nominating committee of the Foamex Board of Directors,
consisting of Robert J. Hay as chairman, Stuart J. Hershon, John G. Johnson,
Jr., and John V. Tunney, will nominate two independent directors to serve on
the Foamex Board. The terms of the settlement also establish the criteria for
the independence of the new directors and require that certain transactions
with affiliates be approved by a majority of the disinterested members of the
Foamex Board.

Both settlements are subject to final documentation and court approvals,
which, if obtained, will resolve all outstanding shareholder litigation
against Foamex and its directors and officers. The settlements involve no
admissions or findings of liability or wrongdoing by Foamex or any individual.
Details about the terms of the settlements, including estimates of the amounts
payable to members of the class in the federal action, will be mailed to
affected stockholders by this Fall.

Foamex, headquartered in Linwood, Pennsylvania, is the world's leading
producer of comfort cushioning for bedding, furniture, carpet cushion and
automotive markets. The company also manufactures high-performance polymers
for diverse applications in the industrial, aerospace, electronics and
computer industries as well as filtration and acoustical applications for the
home. For more information visit the Foamex web site at http://www.foamex.com.


GENESIS/MULTICARE: U.S. Trustee Appoints Official Creditors' Committees
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The United States Trustee for Region III invited Genesis Health's and
Multicare's largest creditors and other parties-in-interest to organizational
meetings for the purposes of receiving indications of interest and statements
of willingness to serve on one or more official committees of unsecured
creditors to be appointed pursuant to 11 U.S.C. Sec. 1102(a)(1).

In both cases, scores of creditors stepped forward, jockeying for seats on the
committees and lobbying for the appointment of multiple committees.

    I. Genesis Health's Committee

Frederick J. Baker, Esq., Senior Assistant U.S. Trustee, announced at the
organizational meeting for Genesis Health Ventures, Inc., that the body of
unsecured creditors will be represented in its chapter 11 cases by one 7-
member Official Committee of Unsecured Creditors by:

    (1)  State Street Bank and Trust Company
         Attention: Laura I, Morse, Assistant Secretary
         2 Avenue de Lafayette, 6th Floor, Boston, MA 02111
         Phone: (617) 662-1753, Fax: (617) 662-1456.

    (2)  The Bank of New York, as Indenture Trustee
         Attention: Gary S. Bush
         101 Barclay Street, Floor 21W, New York, NY 10286
         Phone: (212) 815-3964, Fax: (212) 815-5915.

    (3)  GMS Group, LLC,
         c/o Timothy W. Walsh, Esquire,
         LeBouf, Lamb, Greene & MacRae
         125 West 55th Street, New York, NY 10019-5389
         Phone: (212) 424-8000, Fax: (212) 424-8500.

    (4)  American General Investment Management, L.P.,
         Attention: H. Rey Stroube, IV, Esq.,
         2929 Allen Parkway, Houston, TX 77019
         Phone: (713) 831-1239, Fax: (713) 831-1072.

    (5)  Blue Cross/Blue Shield
         Attention: Kevin O'Neill
         100 S, Charles Street, Tower 2, 6th Floor, Suite 700,
         Baltimore, MD 21201-2725
         Phone: (410) 528-7092, Fax: (410) 528-7013

    (6)  Service Employees International Union AFL-C10,
         c/o Cohen, Weiss and Simon, LLP,
         Attention: Babette Ceccotti
         330 W, 42nd Street, 25th Floor, New York, NY 10036,
         Phone: (2)2) 563-4100, Fax: (212) 695-5436.

    (7)  Abbott Laboratories
         Attention: Ralph D. Devine
         625 Cleveland Avenue, Columbus, OH 43215
         Phone: (614) 624-5693, Fax: (614) 727-5693.

    II. Multicare's Committee

In the MultiCare cases, Frederick J. Baker, Esq., Senior Assistant U.S.
Trustee, announced at the organizational meeting that the body of unsecured
creditors will be represented in these chapter 11 cases by one 5-member
Official Committee of Unsecured Creditors by:

    (1)  Chase Manhattan Trust Company, N.A.
         Attention: Francis J. Grippo, VP
         450 West 33rd Street, New York, NY 10001-2697
         Phone: (212) 946-3558, Fax: (212) 946-8157

    (2)  Mackay Shields, LLC as Investment Advisor
         Attention: Donald E. Morgan, III
         9 West 57th Street, 33rd Floor, New York, NY 10019
         Phone: (212) 230-3849, Fax: (212) 758-4077

    (3)  American Express Financial Corporation
         Attention: Kirstin A. Pumper
         25613 AXP Financial Center, Minneapolis, MN 55474
         Phone: (612) 671-0858, Fax: (612) 547-2704

    (4)  Zurich U.S.
         Attention: Joseph G. DiSessa
         3910 Keswick Road, Baltimore, MD 21213
         Phone: (410) 261-5220, Fax: (410) 554-1600

    (5)  Gulfsouth Medical Supply, Inc.
         Attention: Matthew N. Adkins
         4345 Southpoint Blvd., Jacksonville, FL 32256
         Phone: (904) 332-3287, Fax: (904) 332-3223

(Genesis/Multicare Bankruptcy News, Issue No. 3; Bankruptcy Creditors Service
Inc., 609/392- 0900)


GEOTELE.COM: Judge Lifland Approves Debtor's Chapter 11 Plan
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Geotele.com, Inc. (OTC:GEOLQ) announced that its plan of reorganization was
approved by the Hon. Burton R. Lifland, Judge in the Bankruptcy court for the
Southern district of New York, which allows Geotele.com to successfully emerge
from Chapter 11 on August 11, 2000.  Unsecured creditors, as previously
reported in the TCR, see a recovery of 4 cents-on-the-dollar.  Now that the
company is no longer burdened by debt, it is hopeful that it can soon resume
operations and start deploying a network of VoIP gateways, which will allow
termination of international Voice traffic.


HARNISCHFEGER INDUSTRIES: Selling BWRC's Interest in Beloit Italy
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Beloit Italy, 99.98% owned by Debtor BWRC, is engaged in the manufacture,
sales, service, and supply of pulping equipment and paper-making machinery.

Beloit and BWRC, in Harnischfeger Industries, Inc.'s jointly administered
chapter 11 cases, tell Judge Walsh that Beloit Italy is in a precarious
financial situation and it is sound business judgment to sell the company. If
not sold, Beloit Italy will have to be liquidated through Italian insolvency
proceedings. Should this occur, the Debtors would receive little, if anything,
on account of Intercompany Receivables and an Italian liquidator would press
to collect on Beloit Italy's Intercompany Receivables. In addition, under
Italian insolvency laws, the moving Debtors and ultimately HII might be
exposed to claims of Beloit Italy's creditors including claims for
considerable employee severance payments.

An international search produced two prospective purchasers. Beloit has
determined that the offer by Romano Nugo is the highest and best offer for
Beloit Italia's shares.

Accordingly, the Debtors ask the Court to authorize BWRC to sell its shares of
Beloit Italia S.p.a. pursuant to a Shares Sale Agreement between BWRC and
Romano Nugo S.p.A., a corporation orgainized under the laws of Italy, or, to
sell to a party that makes a bona fide overbid at least two days prior to the
Court's hearing on this Motion, and to authorize Beloit to waive certain
intercompany claims and take other actions to effectuate the Agreement.

Under the Shares Sale Agreement, the Buyer will:

    (a)  pay BWRC $50,000 as consideration for the purchase;

    (b)  cause Beloit Italy to assign to BWRC certain Beloit Italy
         Intercompany Receivables as agreed, in the aggregate amount of
         $6,238,844 estimated as of April 30, 2000;

    (c)  pay BWRC an amount of $1,600,000;

    (d)  use its best efforts to keep Beloit Italy in good operational,
         financial and cash condition so that it remains solvent for three
         years after the Closing;

    (e)  provide BWRC with a three-year personal guaranty of Mr. Romano Nugo,
         the principal of the Buyer, for obligations of the Buyer arising
         under the Agreement, initially in the amount of $3,000,000 gradually
         diminishing to $2,000,000 for the second year, and to $1,000,000 for
         the third year;

    (f)  manage Beloit Italy in a prudent way and fund its Interim Costs for
         operation from the date of the execution of the Agreement through the
         Closing (the Management Period);

    (g)  cease using the company name Beloit or any name or trade mark of HII
         and the Harnischfeger Group, as well as any other intellectual
         property of the Harnischfeger Group that had been used by Beloit
         Italy upon the expiry of the IP License on October 31, except for
         Technology of the Site, which according to the Agreement refers to
         "information in non-tangible form that, without the intent to use the
         Harnischfeger Group's or a third party's intellectual property for a
         purpose not permitted by the Agreement, ... is retained in the
         memories of those persons who have had authorized access to such
         intellectual property or industrial property."

BWRC agrees to:

    (a)  cause Beloit to pay or relieve the Buyer of the liability for certain
         specified Beloit Italy Intercompany Payables in the aggregate amount
         of $8,625,823 estimated as of April 30, 2000; and

    (b)  cause Harnischfeger ULC, a solvent non-debtor entity that has
         continued to repay its obligations to Beloit Italy, to repay Beloit
         Italy the balance of the intercompany loan that is due and owing to
         Beloit Italy in the principal amount of $2,545,284, plus $253,418 of
         accrued interest;

    (c)  stop actively soliciting an Alternative Offer after the execution of
         the Agreement, and in the event BWRC accepts an Alternative Offer, to
         remimburse all of the Interim Costs to the Buyer;

The Buyer is purchasing the shares of Beloit Italy without any representations
or warranties, except as to title, and the parties also agree that, if the
transactions contemplated in the Agreement do not take place by August 31,
2000, the Agreement will become null and void.

Beloit and BWRC represent that the consideration to BWRC proposed under the
Agreement is fair and reasonable, the Agreement is the product of good faith,
arm's-length negotiations between Beloit and the Buyer.

Beloit and BWRC also tell the Court that the proposed sale of the shares of
Beloit Italy is "under a plan" within the meaning of section 1146 of the
Bankruptcy Code. The consideration to be paid under the Agreement will be
required to fund administrative and other claims under such plan.

Consummation of the sale is essential to the preparation and consummation of a
liquidating plan for the Moving Debtors. Therefore, the sale of BWRC's shares
of Beloit Italy should be exempt from the imposition of any stamp or similar
tax.

Accordingly, Beloit and BWRC sought and obtained the Court's authority for:

    (a)  BWRC to sell its shares in Beboit Italy pursuant to the Agreement
         free and clear of transfer taxes;

    (b)  Beloit (on behalf of itself and its non-debtor affiliates) to release
         certain claims against Beloit Italy;

    (c)  BWRC to sell the shares or assets of Beloit Italy to another third
         party who, at least two days prior to the hearing on the Motion,
         submits an Alternative Offer for such shares or assets that, in
         Beloit's business judgment, is a higher and better offer than that
         reflected in the Agreement;

    (d)  the Moving Debtors to take all actions necessary to effectuate the
         closing of the Agreement.

(Harnischfeger Bankruptcy News, Issue No. 25; Bankruptcy Creditors Service
Inc., 609/392-0900)


HAWORTH HOME: Louisiana Home Healthcare Concern Files for Bankruptcy
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Haworth Home Health, the AP reports, filed for bankruptcy protection in a U.S.
Bankruptcy Court in Louisiana after giving out bouncing checks to employees.  
Haword Home whose home office is in Vicksburg, also has operations covering
Mississippi and Louisiana, and is considered of those unlucky bunch which was
hit by low Medicare refunds.  According to owner Ida Haworth, "We're
rebuilding, cutting back, that's what this reorganization is all about," and
he hopes to be back in business before Sept. 1.


HEALTHSOUTH CORPORATION: Moody's Lowers Senior & Senior Sub Debt Ratings
------------------------------------------------------------------------
Moody's Investors Service lowered the ratings of HealthSouth Corporation.  The
downgrade is due to the company's weakened debt protection measures combined
with our outlook for less favorable prospects for cash flow improvement and
debt reduction over the near to intermediate term. This concludes our review
which was initiated on July 10, 2000.

Although second quarter results show the company's accounts receivable days
have improved, we believe that absent the benefit of acquisitions,
HealthSouth's cash flow capability, relative to prior years, has diminished.
This is due largely to managed care pricing pressures which are expected to
continue. In addition, debt reduction associated with monetization of
medcenterdirect.com appears less certain given current valuations of similar-
type companies. As a result, Moody's believes that significant incremental
working capital improvements will be necessary to assist the company in near-
term deleveraging. Furthermore, although management has specifically stated
its intent to discontinue share repurchase activity, we believe that over
time, the company may need to consider additional initiatives to improve
shareholder value which may require greater capital investments.

Moody's notes that recent improvement in volume trends should help to provide
some stability to the company's performance. However, prices are still below
1998 levels and we believe that recent renewal pricing does not yet indicate
that HealthSouth has substantial leverage in all of its markets. We believe
that the managed care industry, which itself is battling rising medical cost
trends, will continue to focus on reducing expenses associated with outpatient
services, forcing HealthSouth to be competitive, not only from a cost
perspective, but more importantly, from a pricing standpoint.

Cash flow for the first half of 2000 was not sufficient to fund capital
expenditures, resulting in additional draws on the company's revolvers. Absent
major acquisitions, the company's ability to repay debt will depend largely on
its ability to improve operating cash flow or limit capital expenditures.
However, while certain capital expenditures are discretionary, we believe
HealthSouth will need to continue investing in development capital to achieve
earning targets. In addition, substantial payments to physician partners are
required. With more limited liquidity, a maturing $250 million revolver and
$250 million note, HealthSouth is contemplating financings which should help
to provide the company with additional debt capacity along with funds to
refinance upcoming maturities. Despite the company's commitment to repaying
debt, Moody's believes that the possibility of material acquisitions cannot be
fully ruled out.

On the positive side, HealthSouth continues to maintain a leading position in
rehabilitative services and outpatient surgery. In addition, we believe that
improved volume trends and pricing stability should help contribute to more
predictable cash flow, albeit at lower levels relative to debt than in prior
years. As a result, the rating outlook is stable.

Ratings downgraded:

    HealthSouth Corporation: a) Ba1 from Baa3 senior notes and                   
                                revolving credit facility;

                             b) Ba3 from Ba2 senior subordinated notes and                  
                                convertible subordinated debentures.

HealthSouth Corporation, based in Birmingham, Alabama, is a leading provider
of rehabilitative, diagnostic and outpatient surgery services.


HECLA MINING: Outlook is Negative, Moody's Says, Announcing Junk Debt Ratings
-----------------------------------------------------------------------------
Moody's Investors Service downgraded, to "caa" from "b3", its rating for Hecla
Mining Company's $115 million of 7% convertible preferred stock.  Moody's
lowered the company's senior implied rating to B3 from B1 and its senior
unsecured issuer rating to Caa1 from B2.  Hecla's rating outlook is negative.
  
The downgrades reflect Hecla's high leverage, weak interest coverage, the
April 2001 maturity of its $55 million term loan, sizable environmental
expenditures and liabilities, and the potential for Hecla's risk profile to
increase should it divest its Kentucky-Tennessee Clay Company (K-T Clay)
industrial minerals subsidiary and concentrate on growing its precious metals
business. Over the last five years, Hecla has had success with several small
gold mines like Rosebud and La Choya in Mexico, and the company continues to
pursue long-lived, low-cost precious metal opportunities to solidify its
future.

Hecla is highly leveraged, with debt as of March 31, 2000 of $190 million,
including the $115 million of convertible preferred stock on which Hecla pays
$8 million a year in dividends. Hecla's shareholders' equity, net of the
preferred stock, was $9 million. In the last 10 years, Hecla has recorded $245
million in asset writedowns and provisions for closed operations and
environmental matters. Hecla's operating income, even before taking the
writedowns, has not covered interest in recent years. Similarly, operating
cash flow has been inadequate to fund capex and the preferred dividend.

Earlier this year, Hecla replaced its multi-year $55 million bank credit
facility with a $55 million term loan maturing April 2001. This leaves the
company with $10 million of cash and no committed sources of external
liquidity. The ability of Hecla to retire or refinance the term loan is
uncertain given its negative cash flow and the subdued outlook for precious
metal prices. The term loan is principally secured by the stock of K-T Clay
and Hecla's 30% ownership interest in the Greens Creek joint venture.

Divesting K-T Clay is one possible means of raising cash to repay the term
loan. Hecla announced in July that it had hired an investment bank to assist
in evaluating avenues for growth and other strategies for the company,
including the potential sale of K-T Clay. Sale proceeds could be used to repay
the term loan and for strategic opportunities. While debt retirement would
eliminate the near-term liquidity issue, reduce interest expense, and improve
the balance sheet, divestiture of K-T Clay will impact Hecla's income and cash
flow, based on recent results, and may increase Hecla's overall risk profile.
Operating income from Hecla's industrial minerals segment has ranged from $4
to $9 million over the last six years and capital expenditures have been
modest. The metals segment has been unprofitable, has greater capex
requirements, and arguably higher environmental exposure.

Sale proceeds could also be used to expand Hecla's precious metals reserves
and production. One possible property that could be the recipient of
exploration and development spending is its Saladillo property, which was
acquired in 1999 as part of the Monarch Resources acquisition. Exploration
drilling and trenching samples have yielded encouraging results and Hecla
believes there is excellent potential for discovery and definition of ore
reserves at several target zones on the Saladillo property. While Saladillo
may prove to be the company-making property Hecla needs, its development would
subject Hecla to additional risks and may require incremental debt, probably
in the form of project financing.

Hecla's environmental remediation expenditures over the next several years are
anticipated to be at least comparable to recent levels of approximately $10
million per year. Its environmental liabilities could be higher, however, upon
resolution of the U.S. government and Coeur d'Alene Indian Tribe lawsuits. The
company is working toward a negotiated settlement of these lawsuits comprised
of low annual payments over a number of years.

Hecla Mining Company, headquartered in Coeur d'Alene, Idaho, produces silver,
gold, and industrial minerals from operations in the U.S., Venezuela, and
Mexico. It had sales of $164 million in 1999.


HEILIG-MEYERS: Moody's Downgrades Debt Ratings on MacSaver Notes to Caa1
------------------------------------------------------------------------
Moody's Investors Service downgraded all the outstanding debt of MacSaver
Financial Services, guaranteed by its parent, Heilig-Meyers, to Caa1 from Ba2
following the news that the company will defer interest payments due August
1and August 15th.  Moody's also lowered the senior implied and senior
unsecured issuer ratings of Heilig-Meyers to Caa1.  The ratings have been on
review for possible downgrade since April 2000 due to longer term liquidity
concerns.

The ratings remain on review for possible further downgrade pending resolution
of the current liquidity issues and determination of potential loss severity
in case of default. Moody's believes that Heilig-Meyers' ability to remain an
ongoing concern is dependent on its ability to maintain its consumer financing
program either through its own arrangements or by having them taken over by a
third party. Moody's believes that its consumer finance portfolio has
continued to perform as expected.


HEILIG-MEYERS: Fitch Lowers MacSaver Note Ratings To CCC
--------------------------------------------------------
Fitch has lowered the ratings on the bank credit rating of Heilig-Meyers
Company (HMY) to 'CCC' from 'B+' and the senior note rating of HMY's MacSaver
Financial subsidiary to 'CCC' from 'B'. The action reflects the company's
announcement that it will defer its scheduled August 1, 2000 interest payment
and has hired an investment banking firm to assist in the exploration of
strategic alternatives. In addition, Fitch has placed the debt securities of
HMY on Rating Watch Negative. In the event the company does not make an
interest payment within the 30-day grace period, the ratings will be lowered
to 'DD'.

Fitch lowered the ratings of HMY to the 'B' category in May 2000 following the
company's announcement that its bank credit agreement had been extended one
year. However, the terms and conditions of the new bank credit agreement
required certain real estate assets as partial security, subordinating the
senior notes which had formerly been pari passu with the bank debt. The short-
term liquidity situation, sharply reduced financial flexibility and the need
to meet sizable debt maturities in 2002 and 2003 were meaningful factors
leading to this downgrade.

Heilig-Meyers is a furniture retailer operating more than 873 stores under the
names of Heilig-Meyers and The RoomStore.


HEILIG-MEYERS: S&P Assigns "D" Rating to Furniture Retailer's Unsecured Debt
----------------------------------------------------------------------------
Standard & Poor's today lowered its corporate credit rating on Heilig-Meyers
Co. to `D' from double-`B'-minus and its senior unsecured debt rating on
MacSaver Financial Services Inc. to `D' from double-`B'-minus, which is
guaranteed by Heilig-Meyers. The preliminary rating on Heilig-Meyers' senior
unsecured shelf registration was also lowered to `D' from double-`B'-minus.

All ratings are removed from CreditWatch, where they had been placed with
negative implications on July 28, 2000.

The rating action reflects Heilig-Meyers' announcement that it will defer the
scheduled Aug. 1, 2000, payments on MacSaver's 7.60% unsecured notes due 2007
and 7.88% unsecured notes due 2003. The company also plans to defer its
scheduled Aug. 15, 2000, payment on MacSaver's 7.40% unsecured notes due 2002.

Standard & Poor's had placed the company's ratings on CreditWatch with
negative implications following Heilig-Meyers' disclosure that it could
violate bank covenants unless it was able to restructure an $8 million
severance package owed to William DeRusha, Heilig-Meyers' former chief
executive officer, and amend existing bank covenants.

Heilig-Meyers also announced that it has hired Lazard, Freres & Co. LLC to
assist in exploring strategic alternatives, including reorganization,
restructuring, sale, divestitures, or recapitalization.


KMART CORPORATION: Indicates Intent to Close 66 Stores by November 1
--------------------------------------------------------------------
Kmart Corporation has undertaken a series of strategic actions aimed at
strengthening the company's financial performance by enhancing the
productivity of its store base, inventory and information systems. These
initiatives include closing stores, accelerating certain inventory
reductions and redefining Kmart's information technology strategy. As a
result of these initiatives, Kmart will record a pretax charge of $740
million.

Kmart also anticipates that its earnings for the second quarter 2000 and
for the year, excluding the $740 million pretax charge, will be below
expectations.

"A non-competitive customer experience, supply chain and store execution
have led to inadequate financial performance. To make Kmart a stronger and
more competitive business model, we must take swift and decisive action to
improve our return on invested capital and create a heightened sense of
urgency around asset productivity," said Chuck Conaway, Chairman and CEO.
"With these actions behind us in 2000, we can focus our resources and
energies on expediting supply chain infrastructure improvements, building a
customer-focused culture, and developing new marketing initiatives so that
we can create a new position in the marketplace and develop a sustainable
bond with our customers."

Applying more rigorous competitive standards that reflect customer
expectations and return on invested capital, Kmart management has
identified 72 stores that do not fit the company's long-term plans. While
in most cases these stores are marginally profitable, it was determined
they did not justify the related capital investment due to a variety of
factors such as their location and their suitability for expansion. A total
of 66 traditional Kmart and 6 Super Kmart stores will close, most by
November 1, 2000. These closing stores are listed below.

Kmart will take a pretax charge of $300 million in the second quarter to
record a reserve related to store closing costs, and a pretax charge of $75
million to reflect the anticipated value of inventory at the closed
locations.

Kmart management also has set more aggressive performance levels for its
inventory. An assessment of inventory productivity during the second
quarter indicated that certain inventories should be reduced significantly
to improve Kmart's return on investment. To achieve this objective, Kmart
will accelerate planned inventory reductions through chain-wide clearance
sales and liquidation sales at the stores slated to be closed. A pretax
charge of $290 million will be taken to state the inventory at its net
realizable value.

As a result of an ongoing assessment of its information technology
infrastructure, Kmart determined in the second quarter that certain systems
previously under development and related hardware are no longer applicable.
This action and others will result in a pretax charge of $75 million.

In 2000, Kmart will invest a total of $460 million to upgrade its
information systems and $210 million to improve its distribution and
logistics network. Major initiatives underway include the installation of
new scanners in all stores to dramatically speed-up the check-out process;
new registers in the company's 300 highest volume stores; and new systems
to help Kmart's merchants monitor and manage inventory. Kmart is also
enlarging two distribution centers, and installing new sorting equipment
and expanding the number of shipping and receiving doors.

Full-year earnings from operations for 2000, excluding the $740 million pretax
charge, will likely be lower than last year and below expectations, Kmart
says.  Kmart will report its second quarter results on August 10, 2000.

Following are 66 stores, listed by state, most of which will be closed as
of November 1, 2000. Additionally, there are six other stores in the states
of California, Ohio and New York which will be closed later this year.
Employees of the stores will have the opportunity to apply for jobs at
other Kmart locations.

Alabama         727 North 9th Ave., Bessemer
                 1840 Douglas Ave., Brewton

Arizona         8515 N W Grand Ave., Peoria

Arkansas        4124 East McCain Blvd., North Little Rock

California      5400 Auburn Blvd., Sacramento
                 510 E. Virginia Way, Barstow
                 150 Beach Rd., Marina
                 1095 South Pulllman, Anaheim
                 2761 Jensen Ave., Sanger
                 1388 East Main St., Woodland
                 910 N. Main St., Bishop

Florida         13355 US Hwy. 1, Sebastian
                 945 West Hwy. 436, Altamonte Springs
                 1200 Homestead Rd., North, Lehigh Acres
                 3701 Tamiami Trail East, Naples
                 13100 66th Street N, Largo
                 3941 Cattleman Rd., Sarasota
                 1280 Palm Coast Pkwy, SW, Palm Coast

Georgia         240 Banks Crossing, Fayetteville
                 1701 Mountain Industrial, Stone Mountain
                 1106 North St. Augustine, Valdosta

Illinois        6435 W. Diversey, Chicago
                 17W734 22nd Street, Oakbrook Terrace
                 21000 S. Cicero Ave., Matteson
                 1500 S. Elmhurst Rd., Mount Prospect
                 1050 North Rte. 53, Addison
                 510 South Rte. 59, Naperville
                 450 Airport Rd., Elgin
                 1555 South Lake St., Mundelein
                 750 East Rand, Arlington Heights

Indiana         750 Clifty Dr., Madison
                 305 E. Hwy. 131, Clarksville

Kansas          4301 State Ave., Kansas City
                 13110 W. 62nd Terr., Shawnee

Kentucky        400 Campbellsville Bypass, Campbellsville

Louisiana       St. Charles Plaza, 12717 Hwy. 90, Luling
                 2800 S. MacArthur Dr., Alexandria

Maryland        744 Cambridge Plaza, Cambridge

Michigan        3900 E. Outer Dr., Sherwood Plaza, Detroit
                 3175 Alpine Ave. NW, Walker

Minnesota       5930 Earle Brown Dr., Brooklyn Center

Mississippi     3174 Bienville Blvd., Ocean Springs
                 597 Beasley Rd., Jackson

Missouri        1717 Rangeline Rd., Joplin
                 915 S. Jefferson Ave., Lebanon
                 1225 S. Kirkwood Rd., Kirkwood
                 3200 Laciede Station Rd., Maplewood
                 3861 Gravois Ave., St. Louis

Montana         611 S. Haynes St., Miles City
                 4400 Tenth Ave. S, Great Falls

New Hampshire   Mountain Valley Mall, Rte. 16, North Conway

New York        4930 State Hwy. 30, Amsterdam

North Carolina  1402 Western Blvd., Parkhill Shopping Center, Tarboro

Ohio            1830 E. Main St., Kent
                 445 Midway Blvd., Elyria
                 2500 W. State St., Carnation Mall, Alliance

Oregon          1475 Mount Hood Hwy., Woodburn
                 63455 Hwy. 97N, Bend

Pennsylvania    70 98 E. Forrest Ave., Shrewsbury
                 24 Airport Square, North Wales
                 2400 Rte. 61, Coal Township

Rhode Island    288 E. Main Rd., Main Shopping Plaza, Middletown

Texas           4902 Fredericksburg Rd., San Antonio

Washington      1015 S. Boone, Aberdeen

West Virginia   701 Oakvale Rd., Princeton

Wisconsin       2400 W. College Ave., Appleton

Kmart Corporation serves America with 2,165 Kmart, Big Kmart and Super
Kmart retail outlets. In addition to serving all 50 states, Kmart
operations extend to Puerto Rico, Guam and the U.S. Virgin Islands.


MARQUIP INC: Common Wealth Offers $7.4 Million for Wisconsin Real Estate
------------------------------------------------------------------------
The Wisconsin Journal reports on the buyout between Marquip Inc. and the
Common Wealth Development (CWD) for $7.4 million.  Marquip filed for
protection under Chapter 11 in April and Common Wealth is a nonprofit
community development corporation which is interested in occupying the
245,000-square-foot space at 1245 and 1301 E. Washington Ave. and transforming
it to high tech businesses, facility manager of CWD, Richard Slone relates.
The sale will be submitted to bankruptcy court in Eau Claire on Aug. 28.


MONARCH DENTAL: Lenders Agree to Waive Defaults through August 11, 2000
-----------------------------------------------------------------------
Monarch Dental Corporation (Nasdaq: MDDS), announced that, in accordance with
The terms of the amended loan agreement with its lenders, its lenders have
provided that the period of time during which the Company will not be in
default under its credit facility will expire on August 11, 2000, unless the
Company satisfies the conditions and agreements contained in the amended loan
agreement.

As previously announced, the Company and its lenders entered into the
agreement to provide the Company with additional time to complete the process
of exploring strategic alternatives, including the possible sale or merger of
the Company. In the event that such conditions and agreements are not
satisfied by such date, management anticipates that it would enter into
discussions with its lenders to seek additional time to complete its process.
No assurances can be given that the Company will be able to satisfy such
conditions and agreements by such date or that the Company will be successful
in obtaining such additional time from its lenders. However, the Company's
lenders have been supportive of the process to date and the Company has
continued to make payments of principal and interest on its debt obligations
under its credit facility.

Monarch Dental Corporation currently manages 190 dental offices serving 20
markets in 14 states.


NATIONAL PICTURE: Obtains Financing & 400 Employees to Report Back to Work
--------------------------------------------------------------------------
The 400 employees, The Associated Press reports, will return to work at the
Mississippi-based, National Picture & Frame Co.  NPFC recently filed for
Chapter 11 protection.  

The Bankruptcy Court Judge for Northern Mississippi in Aberdeen, allowed the
decor-maker to receive funds to continue operating.  Only thirty of the 450
NPFC employees worked, while others continue to have their forced day-offs.

National Picture & Frame Company is one of the three largest domestic
manufacturers of home decorative accessories consisting of picture frames,
framed art, cork products, and framed mirrors. Based in Greenwood,
Mississippi, National manufactures all its products in the USA and sells to
major retail chains throughout the country and in Canada and Mexico.


ORCONET.COM: Internet Company in Orange County Files for Chapter 11
-------------------------------------------------------------------
OrcoNet.com, a fiber-optic Internet-service company, the Orange County
Register reports, filed for bankruptcy protection under Chapter 11, listing
$1.6 million in assets and $4.9 million in liabilities.  The private Internet-
service company based in Orange County, California filed for bankruptcy after
the launching of its $7 million fiber-optic network that gives customers
faster access thru the internet.

Officials from the private Internet-service company declined comment to OC
Register reporters.  OrcoNet was founded in 1995 by its present chairman,
Marvin Bain. The company hoped to provide high-speed Internet access to
customers at savings of 40-50%.  At the time, Mr. Bain said he anticipated
revenues to hit $15 million this year.


P&O PRINCESS: Moody's Assigns Baa1 Rating to Cruise Line's New Bond Issue
-------------------------------------------------------------------------
Moody's Investors Service today assigned a Baa1 rating to the proposed US$500
million bonds of P&O Princess Cruises plc ('P&O Princess'), a new company to
be formed by the planned de-merger of the Princess Cruise business from The
Peninsular and Oriental Steam Navigation Company ('P&O') in the fourth quarter
of 2000. The rating outlook for P&O Princess is stable. Holders of existing
P&O bonds will be offered the ability to exchange their securities for the
proposed P&O Princess bonds. According to P&O, bondholders who do not agree to
the exchange will no longer benefit from cash flows and asset of P&O Princess'
cruise business. In a related action, Moody's downgraded to Baa1 from A3 its
rating for the outstanding notes of P&O and left this rating under review for
possible further downgrade.

The Baa1 rating assigned to the debt of P&O Princess is based on the company's
strong market position and brand recognition in the cruise industry and its
international diversification strategy. It also reflects the potential for
further growth due to shifts in demographic patterns favourable to the cruise
line industry. The rating also reflects the expectation that without the
stabilising effects of the logistics and real estate businesses the company
will be more exposed to potential downturns caused by over-capacity in the
competitive and capital-intensive cruise industry. Moody's also took into
account P&O Princess' large investment programme with several committed orders
for new vessels, which will have to be financed by additional debt reducing
the company's financial flexibility over time.

Moody's believes that P&O Princess, the world's third largest cruise operator,
will benefit over the medium-term from economies of scale arising from the
investment programme, which will lead to competitive cost advantages. A yield
management system targeting different types of customers with a flexible
pricing policy - depending on utilisation rates - is designed to keep the
fleet at a high utilisation rate even in economic downturns. Moody's believes
that P&O Princess' strategy to develop 'under-penetrated markets' and to
increase geographic diversification will provide some protection in case of
weaknesses of local markets.

However, the significant capacity expansion by all major players of the
industry is expected to increase pressure on fare prices and yields,
especially if worldwide demand does not keep pace. Competitive fare pressure
and increasing fuel costs will have to be counterbalanced by rigid adjustments
to service and strict cost-cutting in order to protect P&O Princess'
profitability and cash flow generation.

In addition, because of the investment programme, the company will face
significant funding requirements between 2000 and 2004, which could include
additional debt. Moody's believes, however, that the company's strong
operating cashflow and conservative financial profile will enable it to fund
these requirements satisfactorily.

The securities will be sold in privately negotiated transactions without
initial registration under the Securities Act of 1933 (the Act) under
circumstances reasonably designed to preclude a distribution thereof in
violation of the Act. The issuance has been designed to permit resale under
rule 144A. Subsequent registration is planned.

The downgrade of P&O's senior debt rating to Baa1 from A3 reflects the
company's concentration on mature, low margin businesses after the cruise-
business spin-off and the disposal of real estate property investment. The
rating also reflects the consolidation trend in the industry with a potential
for debt funded acquisitions.

Moody's will finalise the review process once it can be determined how much
debt will remain at P&O. The review will focus on the expected balance sheet
and the future cash-flow generation ability of the remaining company. It will
also take into consideration the potential impact of proceeds from asset sales
on leverage and debt protection measures.

The ratings downgraded to Baa1 are for the US$300 million global bonds due
2007 and US$200 million global bonds due 2027.

P&O Princess, headquartered in London, following its de-merger from P&O will
be the world's third largest cruise operator with estimated annual sales of
app. US$2.1 billion.

P&O, headquartered in London, is a major concern with leading market positions
in the Northern European ferry, ports and logistics business and global
passenger cruises. The company generated sales of app. GBP 7.6 billion in
1999.


PAGING NETWORK: Reaffirms that Talks with Metrocall Are Off & Arch Deal Is On
-----------------------------------------------------------------------------
Paging Network, Inc. filed a voluntary reorganization under Chapter 11 in
the U.S. Bankruptcy Court for the District of Delaware to help expedite its
proposed merger with Arch Communications Group, Inc. In doing so, PageNet
has voluntarily consented to the involuntary petition filed July 14 by
three affiliated noteholders and has asked the court to set an early date
to consider PageNet's plan of reorganization. PageNet believes it can
expedite the process through an immediate Chapter 11 filing with the goal
of emerging as quickly as possible with the approvals required to confirm
the plan and close its merger transaction.

PageNet said it has filed its plan of reorganization with the court and
that it is consistent with its previously announced merger agreement with
Arch Communications Group, Inc., with minor modifications to facilitate the
PageNet restructuring. PageNet has received indications of support for the
plan and this course of action from the substantial majority of its
bondholders. PageNet also has the support of the required majority of its
banks in initiating the Chapter 11 filing.

The company also said its Board of Directors has concluded that the
proposal received from Metrocall, Inc. was not a "superior proposal"
to the Arch merger under the terms of the merger agreement, and the Board
will not discuss the proposal further with Metrocall.

The Chapter 11 filing will permit PageNet to complete its reorganization in
an orderly process under court supervision. Confirmation of the plan will
permit PageNet and Arch to consummate their merger, and permit the
combined company to emerge with a substantially enhanced balance sheet
reflecting the conversion of approximately $1.5 billion in debt and accrued
interest into common stock of the combined company. The company stressed
that all services provided to PageNet's customers will not be interrupted
by this action.

PageNet announced it has received a commitment from its bank group to
provide debtor-in-possession (DIP) financing totaling $50 million, which is
expected to be sufficient to enable PageNet to operate its business without
interruption pending confirmation of the plan of reorganization. The
company said it has requested that the Court allow PageNet to continue all
employee compensation and benefits plans; customer sales, support and
service activities; and payment of funds due to suppliers.

"This Chapter 11 filing has been made in order to expedite the completion
of our merger with Arch. We believe the plan we have filed has the support
of our lenders and our bondholders, and this represents one of the most
significant steps toward completing this transaction, " said John P.
Frazee, Jr., PageNet chairman and chief executive officer. "We intend to do
everything we can to expedite this process with the goal of closing our
merger with Arch as soon as possible."

C. Edward Baker, Jr., Arch's chairman and chief executive officer, said,
"We are eager to see PageNet complete the plan confirmation process so
that we can finalize the merger of our two companies."

Under the proposed plan of reorganization and merger as revised in
connection with the filing, owners of PageNet's senior subordinated notes
will receive 46.6 percent of the combined company's common stock, and
owners of PageNet's common stock will own 5.0 percent of the combined
company's common stock. Owners of PageNet's senior subordinated notes will
also receive 60.5 percent of PageNet's interest in Vast Solutions, which
will be spun-off as part of the merger. Owners of PageNet's common stock
will receive 20.0 percent of PageNet's interest in Vast. The combined
company also will retain an interest of up to 19.5 percent in Vast. Under
the merger agreement prior to its revision, PageNet common stockholders
would have received 7.5 percent of the combined company's common stock and
11.7 percent of Vast.

Vast and PageNet's Canadian subsidiary have not filed Chapter 11 petitions
and are not debtors under Paging Network, Inc.'s bankruptcy case.
The merger agreement calls for owners of Arch common stock to own 31.4
percent of the combined company's common stock, and owners of Arch Senior
Discount Notes will own approximately 17.0 percent of the combined
company's common stock.

PageNet is a leading provider of wireless messaging with subscribers in
all 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto
Rico and Canada. The company offers a full range of paging and advanced
messaging services, including guaranteed-delivery messaging and two-way
wireless e-mail. Arch Communications Group, Inc., Westborough, MA, is a
leading U.S. wireless messaging company. It provides local, regional and
nationwide wireless communications services to customers in all 50 states,
the District of Columbia and in the Caribbean. Arch operates approximately
300 offices and company-owned stores across the country. Arch's pending
merger with Paging Network, Inc. will create one of the leading wireless
messaging companies in North America.


PLATINUM ENTERTAINMENT: Illinois-Based Music Company Files Chapter 11
---------------------------------------------------------------------
The Chicago Sun-Times reports that Platinum Entertainment filed for
bankruptcy.  The music company's assets is $15.7 million and with liabilities
reaching $52.1 million.  Since 1995, the company has been losing $75 million
and was not able to recuperate especially when its distribution deal with
Polygram Records failed.  Founded in 1992 by Steve Devick, Platinum
Entertainment is a large local record group based in Downers Grove, Ill., and
the parent company for numerous national indies.  Platinum's artists ran to
pop, rock, blues and gospel, including Dionne Warwick, Peter Cetera, John
Denver, Kansas, Cissy Houston and Otis Rush.


PLAY BY PLAY: Dismisses PricewaterhouseCoopers in Favor of Ernst & Young
------------------------------------------------------ -----------------
At a special meeting held on July 24, 2000, the Audit Committee of the
Board of Directors of Play By Play Toys & Novelties, Inc. approved the
dismissal of PricewaterhouseCoopers LLP as the company's principal
accountant to audit the company's financial statements and approved the
engagement of Ernst & Young LLP as its principal accountant to audit
its financial statements for the fiscal year ending July 31, 2000.


SAFETY-KLEEN: Court Permits Prepetition Product Liability Suit to Proceed
-------------------------------------------------------------------------
Judge Walsh approved a Stipulation granting Jesus Delaluz relief from the
automatic stay imposed in Safety-Kleen's chapter 11 cases to permit a jury
trial in progress at the Petition Date to continue in the Los Angeles Superior
Court without interruption and any appeals from that litigation to proceed.
Mr. Delaluz is the plaintiff in a products liability lawsuit against Safety-
Kleen. Mr. Delaluz agrees to waive all claims for punitive damages and will
seek to collect on any judgment in his favor only from available insurance
proceeds, one of Safety-Kleen's co-defendants or by filing a proof of claim
against Safety-Kleen. The Debtors signed onto the Stipulation based on their
reasoning that a jury trial is the cheapest way to liquidate Mr. Delaluz'
claim. Brian A. Sullivan, Esq., of Werb & Sullivan in Wilmington presented the
Stipulation to Judge Walsh for his consideration and Raphael Metzger, Esq.,
of Long Beach, California, represents Mr. Delaluz in the Los Angeles jury
trial. (Safety-Kleen Bankruptcy News, Issue No. 5; Bankruptcy Creditors
Service Inc., 609/392- 0900)


TITAN ENERGY: AES Purchases Stock for $6MM & Will Pay All Creditors' Claims
---------------------------------------------------------------------------
The Atlanta Journal and Constitution reports that Atlanta Gas Light Co. and
other creditors of bankrupt Titan Energy will be paid in full.  AES Corp.
stepped forward has stepped forward with an offer to pay $6 million for Titan
Energy's stock and will pay all debts owed to major creditors.  

Both Titan Energy and its subsidiary, Titan Energy of Georgia, filed for
Chapter 11 in July.  Titan Energy supplies natural gas to consumers using
seven utilities in California, Georgia, Maryland, Ohio, Pennsylvania and
Virginia.  They provide service to both residential and commercial consumers.


TRI VALLEY: Gets New Contracts to Supply 486,000 Cases of Peaches for $9.5MM
----------------------------------------------------------------------------
Following the recent approval of $270 million in financing, the Associated
Press reports, Tri Valley Growers has secured two new contracts.  The bankrupt
grower has new contracts in hand to supply 486,000 cases of canned peaches --
worth nearly $9.5 million, according to the Dept. of Agriculture.  The grower
encountered problems in processing which caused the nose-dive of its finances,
such as produce packed in the wrong cans, in the wrong syrup and in the wrong
mixture.  Tri Valley Growers filed for bankruptcy protection in Chapter 11 in
July of this year.


WARNACO GROUP: Moody's Downgrades Sr. Unsecured Debt One More Notch to Baa1
---------------------------------------------------------------------------
Moody's Investors Service lowered the ratings on the senior unsecured debt of
The Warnaco Group, Inc. to Ba1 from Baa2 and continued the review for possible
downgrade. The rating action reflects the decline in Warnaco's debt protection
measures as a result of higher acquisition-related debt and soft operating
performance. The ongoing review will focus on whether performance is likely to
turn around quickly and the extent to which certain brands are vulnerable to
ongoing erosion. The review will evaluate the potential impact of margin
pressure on the company's ability to reduce debt, and will consider the
ultimate capital structure of the company after it updates its bank financing
package, which is expected to become secured.

Ratings Lowered:

        1)  Warnaco Group Inc. -- Senior Unsecured Bank Credit Facility due    
                                  2002 to Ba1 from to Baa2

        2)  Designer Holdings, Ltd. -- 6% Convertible Subordinated Debentures  
                                       due 2016 to B1 from Ba2

        3)  Designer Finance Trust -- 6% Convertible Trust Preferred
                                      Securities at to "b1" from "ba2"

Ratings Assigned:

        1)  Warnaco Group, Inc. -- Senior Implied rating at Ba1 and Issuer
                                   Rating at Ba2.

Moody's noted that Warnaco benefits from a diverse array of brands,
historically good cash flow and a strong management team, which is taking
necessary steps to cut costs and reduce inventories. However, the downgrade is
predicated on the view that high leverage and sharply reduced coverage ratios
have limited Warnaco's financial flexibility, and that debt protection
measures are no longer consistent with an investment grade rating. This
situation is the result of acquisitions and share buybacks and leaves the
company more vulnerable at a time of greater uncertainty in the retail market
given the industry's consolidation, heavily promotional pricing, declining
same store sales and Warnaco's difficult relationship with a key designer.

To demonstrate its commitment to reducing debt levels, Warnaco has indicated
that it will suspend share buybacks. Moody's nevertheless views the current
low level of the stock price and diminished return on assets as creating a
higher degree of event risk for the company. Meanwhile, the lawsuits between
Calvin Klein and Warnaco will not come to trial until January, 2001. Moody's
will continue to assess the likely impact of Warnaco's relationship with
Calvin Klein Inc., given the importance of this brand for its business.

The issuer rating of Ba2 is one notch below the senior implied or enterprise
rating, because it reflects the risk at the holding company only, Warnaco
Group Inc., without the benefit of the guarantees of the operating companies.
Headquartered in New York, Warnaco Group is a major designer, manufacturer,
and marketer of women's intimate apparel, menswear and accessories and
designer jeans and jeans related sportswear for men, women, juniors and
children under a variety of brand names.


ZENITH ELECTRONICS: LG Designee Woo-Hyun Paik Resigns from Board of Directors
-----------------------------------------------------------------------------
On July 18, 2000, Woo-Hyun Paik, Ph. D., President, U.S. Operations & Chief
Technology Officer of LG Electronics Inc. tendered his resignation from the
Board of Directors of Zenith Electronics Corporation, effective as of July
21, 2000. As of the end of July the Board of Directors had not appointed a
successor to fill the vacancy left by Dr. Paik's resignation.



Bond pricing for week of August 3, 2000
=======================================
Data is supplied by DLS Capital Partners, Inc.

Following are indicated prices for selected issues:

Acme Metal 10 7/8 '07                      13 - 15 (f)
Advantica 11 1/2 '08                       67 - 69
Asia Pulp & Paper 11 3/4 '05               67 - 69
Conseco 9 '06                              66 - 67
E & S Holdings 10 3/8 '06                  40 - 43
Fruit of the Loom 6 1/2 '03                50 - 52 (f)
Genesis Health 9 3/4 '05                    9 - 11 (f)
Globalstar 11 1/4 '04                      25 - 27
GST Telecom 13 1/4 '07                     48 - 51 (f)
Iridium 14 '05                              4 - 5 (f)
Loewen 7.20 '03                            33 - 35 (f)
Paging Network 10 1/8 '07                  38 - 40 (f)
Revlon 8 5/8 '08                           51 - 53
Service Merchandise 9 '04                   7 - 9 (f)
Trump Atlantic 11 1/4 '06                  71 - 73
TWA 11 3/8 '06                             38 - 40

  
                               *********

A list of Meetings, Conferences and seminars appears in each Tuesday's edition
of the TCR.  Submissions about insolvency-related conferences are encouraged.

Bond pricing, appearing in each Friday's edition of the TCR, is provided by
DLS Capital Partners in Dallas, Texas.

For copies of court documents filed in the District of Delaware, please
contact Vito at Parcels, Inc., at 302-658-9911.  For bankruptcy documents
filed in cases pending outside the District of Delaware, contact Ken Troubh at
Nationwide Research & Consulting at 207/791-2852.

                               *********

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

Troubled Company Reporter is a daily newsletter, co-published by Bankruptcy
Creditors' Service, Inc., Trenton, NJ, and Beard Group, Inc., Washington, DC.
Debra Brennan, Yvonne L. Metzler, Ronald Ladia, Zenar Andal, and Grace Samson,
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.

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