TCR_Public/001012.MBX              T R O U B L E D   C O M P A N Y   R E P O R T E R

                Thursday, October 12, 2000, Vol. 4, No. 200

AMERICAN METROCOMM: Seeks Court Approval To Abandon Faulty Equipment
C.T. PRODUCE: Case Summary
CMS ENERGY: Fitch Assigns BB+ Rating To 9-7/8% Senior Notes Due 2007
DAEWOO INTERNATIONAL: Seeks Extension of 365(d)(4) Deadline to Dec. 12

DRYPERS CORPORATION: Diaper Maker Files Chapter 11; $25M DIP Pact Obtained
EAGLE FOOD: Moody's Assigns B2 Rating To $85 Mln 11% Senior Unsecured Notes
EDWARDS THEATRES: Asks for More Time to Make Lease Disposition Decisions
ELDER-BEERMAN: Revises Dutch Auction Purchase Price to $5.00 per Share
FARMERS COOPERATIVE: Case Summary and 20 Largest Unsecured Creditors

GENESIS/MULTICARE: Enters Into Fund Calculation Agreement with Fireman's
GRAHAM-FIELD: Committee Retains Houlihan Lokey as Financial Advisors
HARNISCHFEGER INDUSTRIES: What's a Debtors to do with Blank Claim Forms?
HEILIG-MEYERS: Asks Court to Approve Bidding Procedures for 302 Leases
HOME HEALTH: Obtains Extension of Exclusive Period through January 29, 2001

ICG COMMUNICATIONS: Wolf Haldenstein Files Securities Class Action Suit
INVESTCORP: Fitch Affirms Long & Short Term BBB Rating With Neg. Outlook
LOEHMANN'S, INC: Reorganization Plan Confirmed & Emerges from Chapter 11
LOEWEN GROUP: Mercedes-Benz Credit Corporation Seeks Relief From Stay
NEVADA BOB: Golf Retailer Suffers Cash Squeeze & Considers Bankruptcy

NSC CORPORATION: With No Assets Left, Seeks Dismissal of Chapter 11
NUTRAMAX PRODUCTS: Miza Pharmaceuticals Objects to Plan Confirmation
OWENS CORNING: Court Restrains Lenders from Attacking Foreign Entities
PACIFICARE HEALTH: Announces 3Q Earnings Lower Than Analysts Expected
QUALITY VENEER: Sawmill Operator Files for Bankruptcy Protection

RECYCLING INDUSTRIES: Judge Brooks to Consider Disclosure Statement Oct. 23
RITE AID: Announces Improved Store Sales and Earnings in Second Quarter
SAFETY-KLEEN: Judge Walsh Moves Hearing on Landfill's Plan to Oct. 17
SIGNAL APPAREL: Announces Corporate Officers Leaving Their Posts
STEWART ENTERPRISES: Fitch Lowers Bank Facility & Senior Unsecured Ratings

STROUDS, INC: Great American Gets Okay to Liquidate Nine Stores
SUN HEALTHCARE: Debtors Move to Divest 22 Underperforming Facilities
TEXFI INDUSTRIES: Requests Exclusivity Extension through February 9
VENCOR, INC.: Agreed to Modify Stay to Liquidate Claim & Pursue Insurance


AMERICAN METROCOMM: Seeks Court Approval To Abandon Faulty Equipment
Dow Jones reports on the recent squabble between American MetroComm Corp.,
and Cisco Systems Inc.  AMC seeks authority from the bankruptcy court to
abandon the gear it acquired from the telecommunications and network
equipment firm.  "The failure of the Cisco equipment to perform properly
not only substantially delayed and hindered the (AMC's) deployment efforts,
it ultimately threatened their very existence," AMC stated in its recent
filing with the U.S. Bankruptcy Court in Delaware.  Cisco filed a lawsuit
against AMC for refusing to pay the phone and data switching equipment
amounting to $47.8 million.

The Company, together with its affiliates, is a Digitally-based Competitive
Local Exchange Carrier (DLEC) headquartered in New Orleans, Louisiana
providing corporate-class, fully integrated voice and data services in the
southeastern United States. The Company utilizes digital subscriber line
(DSL) technology and unbundled network elements on the "last mile
connection" and the latest soft-witch technologies to provide local and
long-distance services. AMC filed for Chapter 11 in Delaware having $110
million in assets over a $96 million of debt.

C.T. PRODUCE: Case Summary
Debtor: C.T. Produce, Inc.
         2225 Avenida Costa Este
         Suite 1100
         San Diego, CA 92173

Chapter 11 Petition Date: October 2, 2000

Court: Southern District of California

Bankruptcy Case No.: 00-09608

Judge: James W. Meyers

Debtor's Counsel: Jeffrey D. Schreiber, Esq.
                   Schreiber and Shiff
                   4130 La Jolla Village Dr., Ste #201
                   La Jolla, CA 92037
                   (858) 643-1100

Total Assets: $ 10 Million Above
Total Debts : $ 10 Million Above

CMS ENERGY: Fitch Assigns BB+ Rating To 9-7/8% Senior Notes Due 2007
Fitch has assigned a rating of 'BB+' to CMS Energy's (CMS) $500 million 9
7/8% senior notes due 2007. All of the proceeds from the offering will
initially be used to reduce outstanding bank loans, and some of the
proceeds will ultimately be used to refinance $300 million of maturing
senior notes. CMS' rating outlook remains negative, pending the successful
implementation of debt reduction initiatives described below. Fitch also
affirmed ratings of outstanding CMS securities as follows: senior notes,
general term notes, and CMS X-TRAS Pass Thru Trust I notes at 'BB+'; and
CMS Energy Trust I and CMS Energy Trust II convertible trust securities at

The company successfully sold some non-core assets earlier this year,
producing $853 million cash proceeds or transfer of debt related to the
assets sold. Nonetheless, consolidated debt remains extremely high, with
financial leverage of around 70% at present; the ratio of EBITDA to
consolidated interest expense is around 2.7 times. Furthermore, the company
is burdened by approximately $3 billion of debt at the CMS parent. CMS
announced this week a new program to reduce debt leverage via the sale of
$300 million of new issue CMS common stock and an initial public offering
of shares representing a 50% ownership stake in CMS Oil & Gas, now a wholly
owned subsidiary. Management projects that these two initiatives can
produce proceeds of $800 million before mid-2001 to be used to reduce CMS
debt and improve CMS's capitalization. Successful implementation of these
initiatives depends on favorable common equity market conditions for CMS
and CMS Oil & Gas. Additionally, CMS management foresees some more asset
sales for 2001.

All together, CMS management forecasts that the initiatives outlined above
will reduce the ratio of debt to capital to 63-64% by year-end 2001 and to
60% by year-end 2002. While CMS has announced several prior plans to reduce
leverage, the current initiatives do not depend on regulatory approval and
are more within CMS's management discretion. Also, recent increases in oil
and gas prices are a favorable factor for valuing the shares of CMS Oil &
Gas. CMS' credit profile will hinge on near-term progress toward the
successful execution of its debt reduction program.

Positively, CMS' credit profile benefits from the solid credit quality of
its two principal regulated subsidiaries, Consumers Energy Co. (Consumers)
and Panhandle Eastern Pipe Line Co. (PEPL). Consumers and PEPL are a stable
foundation for CMS Energy's asset and cash flows, offsetting some higher
risk unregulated independent power projects and the oil and gas E&P
businesses. Consumers and PEPL account for approximately 80% of CMS'
EBITDA; distributions from these operations also provide relatively stable
sources of cash for CMS' fixed obligations. The sale of some investments in
less developed countries and of half of the oil and gas exploration and
production business should also reduce the risk profile and volatility of
the remaining business portfolio.

While Consumers' cash flow and earnings have generally been a stabilizing
element for CMS, the current high natural gas price environment is
substantially reducing cash flow of Consumers Energy's gas distribution
business. Consumers is in the final six months of a special three-year
program at fixed tariffs without adjustment for gas commodity prices. The
tariff incorporates a fixed commodity price of $2.84 per thousand cubic
feet (mcf) for three years, while current wholesale market prices of gas
are in excess of $5.00 per mcf. Consumers did not fully hedge its gas
supply requirement, and as a result of the substantial increase in natural
gas market prices this year, the utility's gas tariff will not cover the
higher commodity cost of gas it purchased to meet its supply requirement.
Consumers recorded a loss of $45 million in the second quarter of 2000 to
reverse the prior earnings recorded under this tariff. Consumers has now
hedged a large part of its exposure at a loss, and the fixed gas tariff
will expire at the end of March 2001. It should be noted that high gas and
oil prices are beneficial for the cash flow produced by CMS Oil & Gas and
by CMS's LNG terminal operation, and this acts as a partial hedge at the
parent level for the adverse impacts on cash available to CMS from

Fitch rates Consumers' senior secured debt 'BBB+' and preferred stock/trust
originated preferred securities at 'BBB-'. CMS Panhandle Holding Co. senior
notes and Panhandle Eastern Pipe Line senior unsecured debentures are rated
'BBB'. The outlook for Consumers, CMS Panhandle Holding Co., and PEPL is

CMS Energy is an international energy company with businesses in electric
and natural gas utility operations; independent power production; natural
gas pipelines and storage; oil and gas exploration and production; and
energy marketing, services and trading.

DAEWOO INTERNATIONAL: Seeks Extension of 365(d)(4) Deadline to Dec. 12
Daewoo International (America) Corp. seeks an extension of time within
which it must decide whether to assume, assume and assign, or reject its
unexpired nonresidential real property leases.  

The debtor, in consultation with the Committee is continuing to analyze the
leases to determine whether they are needed in the context of the debtor's
reorganized operations.  Specifically, the debtor seeks an extension of its
time to assume or reject the leases for an additional sixty days to
December 12, 2000.

Togut, Segal & Segal LLP represent Daewoo International (America) Corp.
The debtor is a wholly owned subsidiary of Daewoo Corporation, a company
formed under the laws of the Republic of Korea.

Debtor: Dickinson Theatres, Inc.
         5913 Woodson Road
         Mission, Kansas 66202

Chapter 11 Petition Date: October 2, 2000

Court: District of Kansas

Bankruptcy Case No.: 00-42170

Debtor's Counsel: Paul M. Hoffmann, Esq.
                   Morrison & Hecker L.L.P.
                   2600 Grand Avenue
                   Kansas City, Missouri 64108
                   (816) 691-2600

Total Assets: $ 50 Million Above
Total Debts : $ 50 Million Above

DRYPERS CORPORATION: Diaper Maker Files Chapter 11; $25M DIP Pact Obtained
Drypers Corporation (Nasdaq: DYPR) announced that it has filed a voluntary
petition for reorganization under Chapter 11 of the United States
Bankruptcy Code. The petition was filed with the bankruptcy court in
Houston in the Southern District of Texas. Under Chapter 11, the Company is
able to continue to conduct business in the ordinary course, while it
devotes efforts to develop a reorganization plan. The Company also
announced it has reached an agreement with Procter & Gamble providing
Drypers with the necessary intellectual property licenses to continue
manufacturing its products and, subject to bankruptcy court approval,
entering into a payment plan which resolves the outstanding disputes and
litigation between the companies.

Along with its Chapter 11 petition, the Company immediately sought
preliminary court approval for a new $25.0 million debtor-in-possession
financing facility provided by Fleet Capital Corporation. The new facility
will provide an immediate source of funds to the Company, enabling it to
satisfy the customary obligations associated with the daily operation of
its business.

"The decision to file Chapter 11 was difficult but necessary in order to
protect our ability to meet our obligations to our customers," stated
Walter V. Klemp, Chairman and Chief Executive Officer of Drypers
Corporation. We are committed to providing our customers with superior
products and high quality customer service. Protecting customer interests
and providing them with premium quality, value-branded products has been
and remains one of our top priorities."

"It was a long hard battle to build the strong branded and private label
business we now have in the US," Klemp continued. "The dedication of our
people has been unwavering and this step finally clears the way to better
match our financial structure with the business they have fought so hard to

Drypers Corporation manufactures and markets premium quality disposable
diapers, training pants and pre-moistened wipes under the Drypers(TM) brand
and is a major provider of private label disposable baby diapers and
training pants. Drypers Corporation is committed to the development of
value brands and to building lasting global brand equity through product
innovation and differentiation in a vital category. Headquartered in
Houston, Texas, the Company operates in North America, Latin America,
Southeast Asia, and other international markets.

EAGLE FOOD: Moody's Assigns B2 Rating To $85 Mln 11% Senior Unsecured Notes
Moody's Investors Service assigned a B2 rating to the $85.0 million 11%
senior unsecured notes due 2005 of Eagle Food Centers, Inc. The senior
implied rating is B2, and the senior unsecured issuer rating is B2. The
rating outlook is stable. Moody's had rated the debt of Eagle Food Centers
prior to its February 29, 2000 Chapter 11 bankruptcy filing.

The rating action follows the August 7, 2000 emergence of the company from
bankruptcy protection. The company had filed for Chapter 11 protection
after being unable to refinance the 8 5/8% $100 million senior unsecured
notes due April 15, 2000. The pre-bankruptcy notes were exchanged for $85
million of post-bankruptcy replacement notes, $15 million in cash, and up
to 15% of the company's common stock.

The ratings reflect the company's leveraged financial condition when
including adjustments for off balance sheet debt, the store concentration
in rural Central and Northern Illinois and adjoining regions of Iowa, and
the company's small size relative to efficient national supermarket chain
competitors. The ratings also consider that, while the pace of competitive
new store openings has slowed from 15 to 20 annually in recent years, we
believe that larger supermarket competitors still intend to open at least
10 new stores per year within Eagle Food Centers' trade area.

However, the ratings recognize the relatively modern condition of the
company's post-bankruptcy store base (average of three years since
construction or major remodel), the elimination of 20 lower performing
stores as part of the reorganization plan, and the relatively short
distance from the Milan, Illinois distribution center to the stores. The
ratings also recognize that the company's stores are often the only
convenient supermarkets for residents of some rural areas.

All ratings recognize the simple organizational structure in which all debt
is issued by the operating company; there is no holding company or
significant operating subsidiaries. The B2 rating on the senior unsecured
notes considers that the unsecured debt is effectively subordinate to other
debt collateralized by specific company assets. The borrowing base for the
unrated $40.0 million revolver is comprised of eligible inventory, while
the bulk of the company's real estate has been sold and leased back to
provide funds for further capital expenditures. However, we anticipate that
the company will draw on the revolver only for temporary cash flow timing
differences. Barring a significant setback, we believe that the senior
unsecured notes would achieve full recovery in a distressed scenario.

The stable rating outlook reflects our opinion that the company will be
able to cover interest expense and capital expenditures from operating cash
flow and that the company's post-bankruptcy store base will adequately
confront strong competitive challenges.

As part of the reorganization plan, the company closed 20 stores and
rejected the associated leases. The closed stores, smaller, older, and less
productive than the average Eagle Food Center store, did not generate
significant store level profits. We believe that Eagle Food Centers can
improve margins by maintaining the same absolute level of operating profit
on a 15% revenue reduction. Going forward, we anticipate that moderate
investments in capital expenditures, largely for remodels and replacement
stores (in contrast to stores in new markets), will be partially offset by
selling and leasing back the newly constructed stores.

The environment in which the company operates continues to be intensely
competitive. While competitors such as Hy-Vee, Wal-Mart Supercenters,
Dominick's (Safeway), and Meijer have cut in half the number of new store
openings in the company's trade area compared to recent years, we expect
that the company will still face considerable challenges in responding to
the larger and financially stronger competition. However, we believe that
Eagle Food Centers has become more proficient in preparing for and
combating a new competitive store in a particular market. In addition, a
substantial fraction of the company's stores are in relatively isolated
rural towns that will not support another full-service supermarket.

Total debt fell to $124 million on July 29, 2000 versus $145 million on
January 29, 2000 as the company paid down the senior unsecured notes by $15
million and rejected $10 million of store leases. For the twelve months
ending July 29, pro-forma EBITDA (one-time reorganization charges added
back) covered interest by 2.1 times and adjusted debt equaled 5.9 times
EBITDAR. With slightly less debt, about the same level of cash flow, and
resumption of standard vendor support, we anticipate debt protection ratios
will approximate historical norms including interest coverage of 2.5 to 3.0
times and adjusted debt to EBITDAR of less than 5 times within the next 12

Eagle Food Centers, Inc., headquartered in Milan, Illinois, operates 64
supermarkets in Illinois and Iowa.

EDWARDS THEATRES: Asks for More Time to Make Lease Disposition Decisions
Edwards Theaters Circuit, Inc. and its debtor-affiliates seek an extension
of the time to assume, assume and assign, or reject unexpired leases of
non-residential real property.  A hearing will be held on October 19, 2000
at 3:00 PM, US Bankruptcy Court, Central District of California, Santa Ana

The motion seeks an extension of time for the leases covering 63 parcels of
real property upon which the debtors operate theatres and their corporate
headquarters. Five parcels of real property are development projects in
various stages of construction; and 2 parcels of real property that are
used for non-theatre screen purposes. The debtors are requesting an
additional six months, to and including April 23, 2001, to evaluate the
leases and re-negotiate with the landlords of the leases.

The debtors have been handling the pressing problems of obtaining authority
to use cash collateral and meeting with their lenders and creditors'
committee counsel to begin the process of presenting a plan of
reorganization. The debtors are in the process of completing their 59 sets
of schedules and statements of financial affairs, and have had to sort
through a number of on-going legal and business issues.

ELDER-BEERMAN: Revises Dutch Auction Purchase Price to $5.00 per Share
The Elder-Beerman Stores Corp. (Nasdaq:EBSC) announced updated preliminary
results of its self-tender offer, which expired at 12:00 midnight, New York
City time, on Thursday October 5, 2000.

Elder-Beerman commenced the tender offer on September 8, 2000 to purchase
up to 3,333,333 shares of its common stock at a price between $4.50 and
$6.00 per share, net to the seller in cash, without interest.

Based on an updated preliminary count by the depositary for the tender
offer, Elder-Beerman expects to purchase 3,333,333 shares at $5.00 per
share from the shares tendered at or below $5.00. Elder-Beerman also
expects to purchase an additional 129,285 shares, or approximately 0.9
percent of the outstanding shares, which is the maximum additional amount
that may be purchased without amending or extending the tender offer. The
total number of shares Elder-Beerman expects to purchase is 3,462,618
shares. Shares tendered at prices higher than $5.00 will be promptly
returned. No proration of the shares tendered at or below $5.00 will be

The actual number of shares to be purchased and the purchase price are
subject to final confirmation and the proper delivery of all shares
tendered and not withdrawn, including shares tendered pursuant to the
guaranteed delivery procedure. Payment for shares accepted and return of
all shares tendered but not accepted will occur as soon as practicable
after determination of the number of shares properly tendered. After
completion of the tender offer, Elder-Beerman will have approximately
11,210,068 shares of common stock outstanding.

The dealer-manager for tender offer was Wasserstein Perella & Co.
The nation's ninth largest independent department store chain, The Elder-
Beerman Stores Corp. is headquartered in Dayton, Ohio and operates 62
department stores in Ohio, West Virginia, Indiana, Michigan, Illinois,
Kentucky, Wisconsin and Pennsylvania. Elder-Beerman also operates two
furniture superstores. Elder-Beerman has announced it will open a new
concept store in Jasper, Indiana in November of 2000.

FARMERS COOPERATIVE: Case Summary and 20 Largest Unsecured Creditors
Debtor: The Farmers Cooperative Association
         2121 Moodie Road
         P.O. Box 687
         Lawrence KS 66044-0687

Chapter 11 Petition Date: September 27, 2000

Court: District of Kansas

Bankruptcy Case No.: 00-22385

Debtor's Counsel: John J. Cruciani, Esq.
                   Lentz & Clark, P.A.
                   9260 Glenwood
                   P.O. Box 12167
                   Overland Park, KS 66282-12167
                   (913) 648-0600

Total Assets: $ 10 Million Above
Total Debts : $ 10 Million Above

20 Largest Unsecured Creditors:

Jean A. Knipp Trust
23575 Sandusky Road
Tonganoxic KS
66086                                             $ 363,909

Country Energy LLC                                $ 238,039

Arthur Queen                                      $ 201,282

Carroll Eva                                       $ 191,576

Burlington Northern and
  Santa Fe Railway Co                              $ 179,411

John and Judy Pierson                             $ 124,712

Richard Knabe                                     $ 122,280

Winzer Bros                                        $ 91,814

Edwin and Marcene Longanecker                      $ 90,055

David Badger                                       $ 88,054

John Winchester                                    $ 86,554

Country Energy                                     $ 83,999

John and Faye Hadley                               $ 83,138

Robert Robe                                        $ 78,359

Corporate Credit LLC                               $ 75,162

Llloyd Rissen                                      $ 74,648

Ira Fausi                                          $ 71,470

Ruth Stocbener                                     $ 70,915

Wilbur or Curtis Wright                            $ 66,990

Agrilance LLC                                      $ 65,227

GENESIS/MULTICARE: Enters Into Fund Calculation Agreement with Fireman's
Prior to the commencement of the GHV Debtors' chapter 11 cases, Fireman's
Fund Insurance Company provided workers compensation insurance coverage to
Debtors Meridian Healthcare, inc., Meridian, Inc., Meridian Valley Limited
Partnership, et. al., and Meridian Healthcare Growth and Income Fund
Limited Partnership for the period September 1, 1987 through June 1, 1994.

The Debtors tell the Court that the Policies are subject to a large
deductible endorsement and retrospectively rated premium endorsement,
which provide for periodic premium calculations and billings by FFIC.

The Policies are subject to:

    * a Master Premium Financing Agreement, dated September 1, 1989;

    * a Security Agreement for Workers Compensation and Employers Liability
      Large Deductible Policy Provisions, dated September 1, 1991; and

    * a Security Agreement for Deductible Policy Provisions, dated as of
      September 1, 1992, as amended and supplemented;

between Meridian Healthcare, Inc. and/or Meridian Inc. and Fireman's Fund
Insurance Company or its named affiliates.

The Financing Agreements specify the retrospectively rated premium cash
flows or collateral requirements for the Policies. Under the terms of the
Retro Endorsements, FFIC may continue to make premium calculations and
billings until such time as the respective Debtors and FFIC agree that a
certain premium calculation is the final calculation for the Policies.

Pursuant to the Financing Agreements, Meridian furnished FEIC with a
$1,000,000 letter of credit. After the Debtors commenced their chapter 11
cases, FFTC exercised its rights under the Financing Agreements to draw
the entire balance of the $1,000,000 Letter of Credit.

              The Retro Programs Final Calculation Agreement

The Debtors and FFTC have agreed that, as set forth in the Retro Programs
Final Calculation Agreement dated August 30, 2000, upon the Insured's
payment the Final Calculation Amount of $500,000, the retrospective
premium calculations valued as of June 1, 2000 shall constitute the final
calculation of the retrospective premiums under the Policies, and the
insured will no longer be liable to FF1C for any further sums with respect
to the Policies under the applicable Retro Endorsements and/or Financing
Agreements. FFIC will (i) retain $342,296 in return premium due the
Insured as of the March 1, 2000 valuation, and $157,704 of the $1,000,000
it previously drew on the Letter of Credit, and (ii) return the remaining
proceeds of $842,296 to Mellon Bank, the issuer of the Letter of Credit,
for the account of the Insured.

The Debtors submit that the agreement is in the best interest of the
Debtors and their estates. First, FFIC will no longer calculate any future
annual adjustments of the Policies, and thus the Insured will not be
obligated for any further amounts with respect to the Policies under the
applicable Retro Endorsements and/or Financing Agreements. Second, the
amount FFIC is retaining is marginal when compared to the amount of risk
it is assuming because the Debtors concur that the estimated
outstanding~liabilities under the Policies will be approximately $500,000
and FFIC will be assuming liabilities for the seven year period covered by
the Policies for any amount in excess of $500,000. Third, with FFIC's
return of $842,296, the Debtors will reduce the amount outstanding under
their DIP Facility, which, in turn, will reduce interest of approximately

The Agreement covers insurance policies:

                 KWP 80275760         09-01-87/88
                 KWP 80275776         09-01-87/88
                 KWP 80353404         09-01-88/89
                 KWP 80353405         09-01-88/89
                 KWP 80416779         09-01-89/90
                 KWP 80416781         09-01-89/90
                 KWP 80479469         09-01-90/91
                 KWP 80479471         09-01-90/91
                 KWP 80532373         09-01-91/92
                 KWP 80545199         09-01-91/92
                 KWP 80579208         09-01-92/93
                 KWP 80579210         09-01-92/93
                 KWP 80620210         09-01-93/06-01-94

Accordingly, the Debtors seek the Court's approval of the Final
Calculation Agreement, including the retention of the Final Calculation
Amount by FFIC, pursuant to section 363(b) of the Bankruptcy Code.
(Genesis/Multicare Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

GRAHAM-FIELD: Committee Retains Houlihan Lokey as Financial Advisors
The Official Committee of Unsecured Creditors of Graham-Field Health
Products, Inc. and its affiliated debtors seeks to retain Houlihan Lokey
Howard & Zukin as financial consultants to the Official Committee of
Unsecured Creditors. The Committee anticipates that Houlihan Lokey will
provide financial advisory services to the Committee in connection with the

    a) Analyzing and reviewing the financial and operating statements of the
        debtors and their subsidiaries;

    b) Analyzing the business plans and forecasts of the debtors and their

    c) Evaluating the assets and liabilities of the debtors and their

    d) Providing such specific valuation analyses as the Committee may
        require in connection with the cases;

    e) Devising appropriate strategies to maximize the value to be received
        by the unsecured creditors in the debtors' cases;

    f) Assessing the financial issues and options concerning the debtors'
        plan of reorganization;

    g) Preparation, analysis and explanation of the plan to various
        constituencies; and

    h) providing testimony in court if necessary.

The debtors shall pay Houlihan Lokey a cash fee of $80,000 per month
together with out-of-pocket expenses.

HARNISCHFEGER INDUSTRIES: What's a Debtors to do with Blank Claim Forms?
Creditors and potential creditors not included in the Schedules of Assets
and Liabilities filed by Harnischfeger Industries, Inc., were each sent a
General Proof of Claim form with no pre-printed claim amount and every
creditor listed on the Schedules was sent a Customized Proof of Claim with
a pre-printed claim amount in accordance with the Schedules.

Some creditors that received Customized Proofs of Claim merely signed and
returned their proof of claim form without completing the rest of the form
which requests the creditor to indicate the claim amount which may or may
not be the same as the pre-printed amount. The Debtors believe that the
creditors that filed Blank Claims, that is, those without the Additional
Information, did so to indicate their agreement with the Scheduled Amount.

Accordingly, the Debtors sought and obtained the Court's authority to
treat each of the Blank Claims as if the claim had been filed in an amount
equal to the scheduled amount. Altogether there are 122 such claims
involving an amount of $1,184,147. The Debtors, however, expressly reserve
their right to object to any of the claims on any grounds. (Harnischfeger
Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc.,

HEILIG-MEYERS: Asks Court to Approve Bidding Procedures for 302 Leases
Heilig-Meyers Company and its debtor-affiliates seek approval of certain
bidding procedures designed to allow bidding on certain leases subject to
proposed sales at auctions calculated to procure the highest or
otherwise best offers.

On or about August 16, 2000, the debtors publicly announced their intention
to close 302 of their store locations. Since such announcement, the debtors
have, pursuant to the Going Out of Business Order, engaged the Liquidation
Agents to sell off the merchandise at these locations. The Liquidation
Agents will be closing the stores in stages upon completion of the GOB

To maximize the value of the leases for the debtors and their creditors,
currently pending before the court is the debtors' application seeking
authority to retain DJM Asset Management and Trammell Crow Company, as real
estate agents to assist in marketing the leases.

The debtors seek the right, upon selection of a Stalking-Horse Bid, if any,
to offer, in consultation with the Creditors' Committee, such bidder
protections. Specifically, the bidding procedures provide a break-up fee of
up to 2% of the proposed purchase price received from the selected bid,
payable only if the relevant Stalking Horse Bid is ultimately not the
assignee of the leases as the result of approval of better/higher offers,
and an expense reimbursement up to $100,000. The debtors also seek
authority to reject those leases that are not sold.

The debtors detail the procedures for anticipated bidding, and file with
the court a sample agreement to be used in the event of a purchase.

HOME HEALTH: Obtains Extension of Exclusive Period through January 29, 2001
By order entered on September 27, 2000 by Judge Mary F. Walrath, US
Bankruptcy Court, District of Delaware, Home Health Corporation of America,
Inc., et al. was granted an extension of the exclusive periods during which
the debtors may file and solicit acceptances of a plan or plans of

The debtors are granted a further extension of time during which they have
the exclusive right to file a plan or plans of reorganization through
November 28, 2000; and the debtors are granted an extension of time to
solicit acceptances of their plan or plans of reorganization through
January 29, 2001.

ICG COMMUNICATIONS: Wolf Haldenstein Files Securities Class Action Suit
Wolf Haldenstein Adler Freeman & Herz LLP commenced a class action lawsuit
in the United States District Court for the District of Colorado on behalf
of all purchasers of ICG Communications, Inc. (NASDAQ: ICGX) securities
during the period between December 20, 1999 and September 18, 2000.  A copy
of the complaint may be viewed on the firm's website at

The Complaint alleges that ICG and its executives violated Sections 10(b)
and 20 of the Securities Exchange Act of 1934 by issuing a series of false
and misleading statements and/or failing to disclose information regarding,
among other things, ICG's revenue growth and the Company's equipment
failures and technical problems. It is further alleged that throughout the
Class Period, the Company falsely portrayed ICG as a rapidly growing
provider of communications services which had developed a stable and
substantial customer base on the basis of its purportedly superior customer

On September 18, 2000, ICG revealed to the market the Company's true
financial condition. In sharp contrast to its prior representations, the
Company announced that it had experienced serious customer service
deficiencies, and that as a result, several customers had dramatically
scaled back on their commitments with ICG and some were threatening to
terminate their ties altogether. ICG further revealed that the Company
expected to report EBITDA of $17 million for 2000, as compared to its own
estimate of $105 million made a few weeks earlier. The following day, the
Company further shocked the market when it announced the resignations of
its Chief Executive Officer and two of its directors. Following these
announcements, the price of ICG's common stock fell 96% from its Class
Period high of $39.00.

INVESTCORP: Fitch Affirms Long & Short Term BBB Rating With Neg. Outlook
Fitch, the international rating agency, has affirmed Investcorp S.A.'s
(ISA) long- and short-term ratings at 'BBB' and 'F2', respectively. At the
same time, its ratings have been removed from Rating Watch Negative where
they were placed on Aug. 31, 2000. Additionally, Fitch has assigned
individual and support ratings of 'B/C' and '5', respectively to ISA. The
long-term Outlook is Negative. These ratings apply to ISA, Investcorp Bank
EC, Investcorp Capital Limited (ICL) and Investcorp Holdings LTD as ISA
guarantees the bonds and private placement issued by ICL.

ISA's ratings reflect its generally favorable track record as one of the
leading private equity investors operating in the United States and Europe,
demonstrated skills in placing investments with Arabian Gulf investors,
moderate leverage targets, and access to on- and off-balance sheet
liquidity. In addition, ISA's recent diversification effort focused on the
development and expansion of its asset management capabilities, creating a
source of more stable recurrent revenues. Fitch has embedded an expectation
that growth in these fee-based revenues should assist in counterbalancing
expected volatility elsewhere in the business given limited correlation
with the core equity portfolio. Earnings for 2000, moreover, are projected
to be only slightly below 1999 despite the company, in the first half of
2000, realizing a significant loss within its private equity investment
portfolio. The loss was material relative to 1999 fiscal year-end earnings.
While the present rating category recognizes that a certain degree of
volatility is embedded within ISA's performance measures, the recent loss
stemming from the equity investment portfolio underscored its higher risk
profile relative to institutions of similar size and rating. This
nevertheless, is offset to some degree by the firm's solid knowledge in key
industry sectors as well as its appropriate risk management standards.

Fitch recently adopted an outlook for its long-term ratings that is
designed to provide an indication of the potential direction of the rating
over a two-year time frame. In this case, the negative outlook results from
ongoing concerns related to certain problem credits still held within the
private equity portfolio, the dependence on performance of investments
related to the telecommunications and technology industry and a decline in
specific provisions relative to historic levels. An increase in earnings
volatility could negatively impact ISA's financial flexibility going
forward. While growth in fee-based revenues has been good, increased
competition within the asset management arena with particular focus on high
net worth individuals could prevent ISA from reaching the necessary scale
to make this business line a meaningful source of recurrent revenue.

LOEHMANN'S, INC: Reorganization Plan Confirmed & Emerges from Chapter 11
Loehmann's, Inc. announced that the Company has formally emerged from
Chapter 11 bankruptcy protection.

The Company's Second Amended Plan of Reorganization, which was filed on
July 28, 2000 and confirmed by the U.S. Bankruptcy Court for the District
of Delaware on September 6, 2000, set forth the terms for the Company's
exit from Chapter 11 and will be effective immediately. The Company also
announced that in conjunction with its Chapter 11 emergence, it has closed
on a $75 million Senior Secured Exit Financing facility provided by Bankers
Trust Company and arranged by Deutsche Banc Alex. Brown.

In accordance with the terms of the approved Plan of Reorganization, the
Company has formed a new holding company, Loehmann's Holdings, Inc. New
common stock, along with Loehmann's Holdings Inc.'s new senior notes, will
be distributed to the Company's creditors who have allowed claims in the
Company's Chapter 11 case. Distributions of stock, notes and cash will
depend on elections that were made by such eligible creditors. The Company
expects to make these initial distributions in the near term. The Company's
old common stock (OTC: LOEHQ) is being canceled and the holders of such
stock will receive no distributions.

Robert N. Friedman, Loehmann's Chairman and Chief Executive Officer,
commented, "We are very pleased that we have reached this key milestone.
Loehmann's successful emergence from Chapter 11 is a testament to the
underlying strengths of the Company and is also largely attributable to the
dedication of our management team and the support of our employees,
vendors, and customers."

Mr. Friedman concluded, "While a difficult process, this reorganization has
enabled us to effectively move past a number of challenges and establish a
strong foundation for solid performance and growth going forward. Looking
ahead, we believe Loehmann's is positioned to be a stronger, more
competitive company, and we are very excited about the future of our

Loehmann's, Inc. is a leading specialty retailer of well known designer and
brand name women's and men's fashion apparel, accessories and shoes at
prices that are typically 30% to 65% below department store prices.
Loehmann's operates 44 stores in major metropolitan markets located in 17

LOEWEN GROUP: Mercedes-Benz Credit Corporation Seeks Relief From Stay
Mercedes-Benz Credit Corporation tells the Court that Debtor Cusimano &
Russo, Inc., an affiliate of Loewen Group International, Inc., purchased a
1995 Mercedes-Benz S420V in 1997 for the amount of $57,160 to be paid in
equal monthly installments of $1,191 commencing September, 1997, but has
failed to make payment since December, 1999. According to Mercedes-Benz
Credit Corporation, the payoff on the account amounts to $24,523 plus
interest at the rate of 9.75% per annum. The vehicle credit company tells
the Court that the National Automobile Dealer's Association Official Guide
places a wholesale value of $34,150 on the vehicle and a retail value of
$38,200 as of May, 2000. Therefore, there is equity in the vehicle in
excess of the vehicle credit company's lien, the company says. Mercedes-
Benz Credit Corporation does not expressly state what action it desires to
take. However, the company seeks relief from the automatic stay in
connection with the matter. Mercedes-Benz Credit Corp. asserts that there
is cause for granting such relief because Cusimano has failed to provide
adequate protection of the company's security interest in the vehicle by
failing to maintain monthly payments, and because the vehicle is
unnecessary to an effective reorganization. (Loewen Bankruptcy News, Issue
No. 27; Bankruptcy Creditors' Service, Inc., 609/392-0900)

NEVADA BOB: Golf Retailer Suffers Cash Squeeze & Considers Bankruptcy
Calgary-based golf retailer Nevada Bob's Canada Inc., Reuters reports,
might consider seeking bankruptcy or selling its stores, if it can't secure
financial support.  Tony Loth will be assuming the role of CFO Allen Smith,
who recently left that post.  Nevada Bob's has considered selling its 80
stores to reduce debts and provide working capital.  The company's total
debts has exceeded its total assets by C$30 million ($20 million), and is
in default of "certain loan covenants with its senior secured lender," the
company related.  Nevada Bob's said in a statement that it may "be forced
to seek protection under the Companies' Creditors Arrangement Act in Canada
and under Chapter 11 or Chapter 7 of the United States bankruptcy code."

NSC CORPORATION: With No Assets Left, Seeks Dismissal of Chapter 11
NSC Corporation, Dow Jones reports, which filed for Chapter 11 on July 17
asks the Manhattan Bankruptcy Court to dismiss its bankruptcy case now that
it no longer has anything.  During a hearing held on Aug. 22, lender Finova
Capital Corp., which NSC owes $11 million, disallowed further use of its
cash collateral and urged that the case to be converted to a Chapter 7
proceeding.  NSC obtained authorization from the Manhattan court on Sept. 8
to dispose all contracts and projects and all of its equipment leases. NSC
was also granted authority to sell personal property, but the proceeds
derived from the sale were not divulged in the motion.

NSC filed for Chapter 11 protection along with affiliates National Surface
Cleaning Inc., National Service Cleaning Corp., NSC Energy Services Inc and
Olshan Demolishing Management Inc. The bankruptcy filing posted assets of
$37 million and liabilities of $34.6 million.  

NUTRAMAX PRODUCTS: Miza Pharmaceuticals Objects to Plan Confirmation
Miza Pharmaceuticals USA Inc., an unsecured creditor and party-in-interest,
filed an objections to the first amended Chapter 11 plan of reorganization
of Nutramax Products Inc., et al.

Under the plan, Miza is classified as a member of Class 4, which includes
all general unsecured creditors. Without including Miza's claims, the
debtors estimate that the allowed claims in Class 4 would be approximately
$11 million. The plan provides for $2.75 million in distributable cash for
Class 4.

Miza objects to broad releases to non-debtors, current officers, directors,
agents and employees of the debtor. Miza states that the third party
releases are invalid because thy are not supported by consideration. Miza
also points out that the court does not have jurisdiction to approve the
plan's nonconsensual third-party release provisions and the court does not
have jurisdiction to approve the plan's third-party releases because they
are not necessary to the reorganization.

OWENS CORNING: Court Restrains Lenders from Attacking Foreign Entities
Delaware Bankruptcy Judge Mary Walrath, Reuters reports, granted Owens
Corning an emergency restraining order temporarily preventing its bank
lenders from attacking 47 overseas affiliates not included in the
bankruptcy filing.  Judge Walrath was informed by attorney Charles Monk on
how vital the affiliates were to Owens which, "play an important role in
providing raw materials." "This order is designed to have the banks dealing
with the non-debtor affiliates to stand still and not grab cash to set off
claims against Owens Corning," Monk added.  Vice president and treasurer
Steven Strobel told Reuters that he was pleased with the agreement.  

PACIFICARE HEALTH: Announces 3Q Earnings Lower Than Analysts Expected
PacifiCare Health Systems, Inc. (Nasdaq: PHSY) announced that it expects to
report results ranging from a loss of up to $0.10 per share to break-even
for the quarter ended September 30, 2000, based on preliminary data showing
higher-than-anticipated commercial and Medicare health care costs. These
costs reflect the impact of providers operating under non-capitated
agreements, and amounts incurred to improve network stability and maintain
member continuity of care. For the quarter ended September 30, 1999, the
company reported earnings of $1.54 per share. Shared-risk contracting
conversions and provider instability are expected to continue at least for
the remainder of the year. As a result, earnings per share for 2000 will
not meet the company's expectations set forth in its previous public

Higher health care costs will decrease third quarter pretax earnings by
$120-$130 million. As a result, the third quarter medical care ratio could
range from 88-89 percent for the company's commercial business, and from
91-92 percent for Medicare. Medical claims and benefits payable reserves
will be higher than previously expected.

Unanticipated third quarter shared-risk costs reflect higher inpatient
utilization and outpatient surgery and are estimated to range from $70-$75
million. Additionally, medical claims and benefits payable reserves will
increase by approximately $25-$30 million for changes in estimates of
medical expenses related principally to the quarter ended June 30, 2000 and
prior periods. The company also expects to incur approximately $25 million
in the current period for reserves for insolvent providers and the write-
off of capitation advances, loans and other settlements.

The company's experience year-to-date indicates that daily hospital costs
under the new shared-risk arrangements are consistent with expectations.
However, member utilization is considerably higher than in calendar year
1999 and the number of members covered by shared-risk hospital contracts
has increased from more than 800,000 on December 31, 1999 to approximately
1.9 million as of today. The combination of these factors more than offset
the ability of the company's increased medical staffing in 2000 to manage
health care costs.

The company's third quarter results will also be reduced due to an expected
increase in the effective tax rate for 2000. Because earnings expectations
have decreased, non-deductible goodwill amortization expense is expected to
be a higher percentage of pretax income, causing the year-to-date tax rate
to rise from 41.8 percent to approximately 44.1 percent.
Looking ahead, the 2001 gross margin for PacifiCare's Medicare+Choice
product is expected to decrease significantly compared with the year ended
December 31, 2000. The medical care ratio for Medicare+Choice could
increase from approximately 89 percent in 2000 to up to 93 percent in 2001,
excluding the benefits of corrective actions relating to enrollment,
network management and medical management. Current benefit reductions and
increases in premiums, both from members and from the U.S. Health Care
Financing Administration under the Balanced Budget Act of 1997 (BBA), as
amended, are not expected to be sufficient to offset the health care costs
under the evolving shared-risk delivery model for PacifiCare's nearly one
million members. While legislation to partially restore Medicare+Choice
reimbursement is under consideration in Congress, the company cannot assure
that financial relief will be provided or legislation enacted.

"Since current conditions are not at all reflective of PacifiCare's
historical growth rate and targeted future growth, our new management team
is undertaking a broad-reaching, in-depth analysis of these third quarter
developments," said Robert W. O'Leary, PacifiCare president and chief
executive officer.

"While we are evaluating each of our businesses individually and in the
context of their contribution to the whole, we are temporarily suspending
new membership enrollment in our Medicare+ Choice program in selected
markets. In evaluating our businesses, we will not act without thorough
analysis and consideration of all constituencies, from customers to
shareholders to employees. But when we do act, we will act decisively to
bolster PacifiCare's strength and earnings power.

"PacifiCare owns one of the best brands known to seniors, America's fastest
growing population segment, and prides itself in providing valuable
programs to four million members of all ages. Since the company's inception
25 years ago, PacifiCare has prevailed through a number of challenging
periods, evolving into a substantial corporation generating more than $11
billion in annual revenue."

The company will discuss this press release in a conference call for
investors and other interested parties beginning at 9 a.m. Eastern time
tomorrow, October 11th. To participate, dial (800) 230-1093 or (612) 332-
0107 to access the call. The call will also be broadcast live on the
internet through PacifiCare's website at Click on About
the Company, go to the Investor Relations page and choose Conference Calls.
Additionally, a replay of the call will be available beginning at 12:30
p.m. (Eastern time) on Wednesday through Friday, October 13, by calling
(800) 475-6701.

The company intends to announce third quarter financial results on
November 9, 2000.

PacifiCare Health Systems is one of the nation's largest health care
services companies. Primary operations include managed care products for
employer groups and Medicare beneficiaries in nine states and Guam serving
approximately 4 million members. Other specialty products and operations
include behavioral health services, life and health insurance, dental and
vision services, pharmacy benefit management and Medicare+Choice management
services. More information on PacifiCare Health Systems can be obtained at or by calling 1-877-PHS-STOCK. (1-877-747-7862).

QUALITY VENEER: Sawmill Operator Files for Bankruptcy Protection
Quality Veneer & Lumber, The Associated Press reports, filed for bankruptcy
protection under Chapter 11 on September 29.  Tom Mayr, the lumber
company's vice president did not return a phone call seeking inquiries
about the filing.  Quality Veneer owns three Mayrs Bros. sawmills in
Hoquiam, Omak and Hood River, Oregon.   Mayr Bros. was founded by Tom's
father and uncle.  "We just wish (Quality Veneer president) Stu Young or
Tom Mayr would get a hold of us and at least communicate with us," said
Dave Rux, business representative for Woodworkers Local Lodge W-2 of the
International Association of Machinists.

Quality Veneer bought the mills two years ago. Tom Mayr had aided Mayr
Bros. through the previous Chapter 11 filing, and believed the deal would
stabilize the mills. Now, all three mills has shut down and laid off all of
its workers. "This is real bad for the community if they don't get back to
work," Rux said. "The mill is shut down and I don't think anyone remains on
payroll, including Tom Mayr."  Further information on the filing was not
available during press time.

RECYCLING INDUSTRIES: Judge Brooks to Consider Disclosure Statement Oct. 23
On September 20, 2000, The Official Committee of Unsecured Creditors, an ad
hoc group of certain former owners of the debtors' operations, and Credit
Suisse First Boston Corporation and Commercial Company filed their second
amended joint plan of reorganization and an accompanying Disclosure

A hearing will be held on October 23, 2000 at 10:00 AM before the Honorable
Sidney B. Brooks in Courtroom E of the US Bankruptcy Court for the District
of Colorado to consider the adequacy of the information contained in the
Disclosure statement.

Mark K. Thomas, Harley J. Goldstein of Katten Muchin Zavis, Chicago,
Illinois and Craig A. Christensen and Shaun A. Christensen of Lindquist,
Vennum & Christensen PLLP Denver, Colorado represent Recycling Industries,
Inc. and its affiliated debtors.

RITE AID: Announces Improved Store Sales and Earnings in Second Quarter
Rite Aid Corporation (NYSE, PSE: RAD) announced unaudited financial results
for the second quarter, ended August 26, 2000. All financial information
presents PCS Health Systems, Rite Aid's former pharmacy benefits management
subsidiary, as a discontinued operation.

During the quarter, Rite Aid completed a significant refinancing of the
Company, including reducing debt by $462.6 million; reached a definitive
agreement to sell PCS; completed the restatement of its historical
financial statements; increased same store sales by nearly 10 percent and
improved earnings before interest, taxes, depreciation, amortization and
non-recurring expenses (EBITDA) by 24.4 percent as compared to the prior
quarter. The sale of PCS to Advance Paradigm, Inc. was completed on October

"We're very pleased with all that we've accomplished in the second quarter,
and we continue to make good progress," said Bob Miller, Rite Aid chairman
and chief executive officer. "We've seen a dramatic turnaround in same
store sales, and as we've said previously, we see significant opportunity
to improve cash flow in the coming quarters."

Revenues for the 13-week quarter were $ 3.4 billion, up 7.4 percent from
$3.2 billion in the same period a year ago.

Same store sales increased 9.9 percent during the second quarter as
compared to the year-ago period, reflecting prescription sales growth of
10.9 percent and an 8.5 percent increase in front-end same-store sales.
Prescription revenue accounted for 59.3 percent of total drugstore sales,
and third party prescription sales represented 90.0 percent of total
pharmacy sales. In last year's second quarter, prescription revenue
accounted for 58.8 percent of drugstore sales, and third party prescription
revenue represented 87.6 percent of pharmacy sales.

Interest expense for the quarter was $182.1 million, consisting of $144.2
million of interest on indebtedness and capital lease obligations and $37.9
million of non-cash interest related to the amortization of debt issue
costs and accretion of interest on closed store and other reserves.

Proforma cash interest expense for the quarter would have been $120.9
million, or $23.3 million lower, had the sale of PCS and the related $575.0
million paydown of debt, the refinancing activities of the Company and the
debt for equity exchanges occurred at the beginning of the quarter.

Second quarter EBITDA amounted to approximately $90.7 million or
approximately $117.6 million when including PCS. This compares to EBITDA
for the first quarter of this fiscal year of approximately $63.0 million or
approximately $95.0 million when including PCS. Excluding PCS and a $12.3
million settlement from litigation with certain drug manufacturers, EBITDA
improved 24.4 percent in the second quarter as compared to the first
quarter of this fiscal year.

Net loss from continuing operations for the second quarter was $425.0
million or a loss per diluted share of $1.87 compared to a net loss of
$154.4 million or a loss per diluted share of $0.60 in the year-ago period.
Including PCS as a discontinued operation, the Company reported a second
quarter net loss of $456.5 million or a loss per diluted share of $1.97.

Contributing to the net loss from continuing operations were non-cash
charges of $210.6 million, including an $83.8 million loss related to the
conversion of $462.6 million of the Company's debt into equity and other
debt modifications, $77.2 million for impairment of the Company's
investment in, $12.5 million representing the Company's share
of's losses and $11.1 million for store closing and
impairment; and a cash charge of $26.1 million related to the cost of
restating the Company's historical financial statements.

During the quarter, the Company opened one new drugstore, relocated 19
stores and closed 13 stores. Stores in operation at the end of the quarter
totaled 3,767. The Company has revised the number of its planned
new/relocated stores for fiscal 2001 from approximately 90 to approximately
75 new/relocated stores.

Rite Aid Corporation is one of the nation's leading drugstore chains with
annual revenues of more than $14 billion and approximately 3,800 stores in
30 states and the District of Columbia. Rite Aid owns approximately 15
percent of, a leading online source for health, beauty and
pharmacy products. Information about Rite Aid, including corporate
background and press releases, is available through the company's website

SAFETY-KLEEN: Judge Walsh Moves Hearing on Landfill's Plan to Oct. 17
Judge Peter Walsh recently approved a "bridge order," which extends Safety-
Kleen Corp.'s deadline for filing its reorganization plan until a hearing
on Oct. 17, The Associated Press reports. The Columbia-based, waste
management firm asks for six more months to restructure its finances.  
Safety-Kleen is asking for an extension through April 30, 2001.  

Safety-Kleen filed for bankruptcy protection on June 9, posting assets and
liabilities of $ 4.5 billion and $ 3.1 billion respectively. The company
which recently closed its landfill near Lake Marion, is still under
investigation for accounting irregularities.

SIGNAL APPAREL: Announces Corporate Officers Leaving Their Posts
Signal Apparel Company, Inc. (OTC BB:SIAY) announced that Michael Harary
has resigned from his position as Executive Vice President of the Company
and Zvi Ben-Haim has resigned from his position as President of the
Company. In connection with their resignations, each of Mr. Ben-Haim and
Mr. Harary has claimed certain rights and remedies under his respective
Employment Agreement based on (i) an alleged "financing default" under the
Asset Purchase Agreement pursuant to which the Company acquired the
business and assets of Tahiti Apparel, Inc. from Messrs. Ben-Haim and
Harary and one other shareholder in March 1999 and (ii) an alleged
constructive termination by the Company. Mr. Harary has also resigned as a
director of the Company. The Company also announced that Donald R. Rose has
been elected to its Board of Directors.

New York-based, Signal Apparel deals with sales and marketing apparel
primarily to the retail trade. The company filed for Chapter 11 in New York
on Sept. 22 having assets of $ 40.9 million and debts of $ 153.8 million.

STEWART ENTERPRISES: Fitch Lowers Bank Facility & Senior Unsecured Ratings
Fitch lowered the bank credit facility and senior unsecured ratings of
Stewart Enterprises, Inc. to 'BB' from 'BBB-'. The Rating Outlook for
Stewart Enterprises is Negative. The company has been removed from Rating
Watch Negative where it was placed on July 14, 2000. In addition to the
$600 million bank credit facility, debt securities affected include $100
million 6.7% notes due 2003 and $200 million 6.4% Remarketable Or
Redeemable Securities (ROARS) due 2013.

The rating action recognizes Stewart's position as the third largest
funeral home and cemetery operator-with a broad franchise base focusing on
various cluster markets in order to gain synergies and operating
efficiencies. While management has been diligent in recent years in
maintaining prudence in acquiring new companies, Stewart is competing in a
highly difficult operating environment. With both of Stewart's larger
competitors in the death care industry facing liquidity issues, Stewart's
ability to raise capital via the equity markets has been curtailed. Issues
surrounding the near term impact of SAB 101 have limited the company's
ability to grow cemetery revenues and the company's operating margins are
below historical levels. These events combined with a highly leveraged
balance sheet more accurately reflect a 'BB' credit.

Flat top line revenues combined with lower operating margins will likely
bring EBITDA to roughly $230 million for fiscal-year 2000, slightly below
last year's figure of $250 million. Nonetheless, Stewart's average interest
costs of 6.7% should produce EBITDA/total interest expense of about 3.8
times (x) for 2000. However, interest expense will likely increase in the
intermediate term as the company's current rates are extremely favorable
and more indicative of an investment-grade company. Stewart is currently in
a cash conservation mode whereby the company has ceased all acquisitions,
is limiting capital expenditures and has suspended the payment of
dividends. With a cash and marketable securities balance of approximately
$90 million, Stewart has sufficient near-term liquidity given that the
majority of its debt matures in 2002 and 2003. The company recently
announced that it has entered into discussions about the sale of its
European operations for an undisclosed sum. Proceeds will likely be used in
conjunction with its cash balance to retire a portion of its $600 million
revolving credit facility prior to its April 2002 maturity date. Fitch
anticipates minimal cash flow impact from the sale of its European

STROUDS, INC: Great American Gets Okay to Liquidate Nine Stores
A Joint Venture comprised of Great American Group and Gordon Brothers
Retail Partners, LLC was approved by the U.S. Bankruptcy Court in Delaware
to dispose of the inventory in 9 (nine) Strouds' locations. "We are pleased
to have been chosen as the firm to help close these 9 Strouds' locations
and assist the Company in its reorganization efforts." stated Brian Yellen,
Vice-President, Great American Group. The liquidation sales at the 9 stores
will start at once.

List of locations:

    Rowland Heights, California
    Fresno, California
    Schaumburg, Illinois
    Roseville, Minnesota
    Vernon Hills, Illinois
    Reno, Nevada
    Skokie, Illinois
    Oakbrook, Illinois
    Santa Barbara, California

SUN HEALTHCARE: Debtors Move to Divest 22 Underperforming Facilities
The Debtors have identified approximately 81 underperforming facilities
which lose, in the aggregate, approximately $2,496,660 per month. These
facilities must be disposed of, the Debtors say, because they represent a
huge drain on economic resources which threatens the viability and vitality
of SunHealth's businesses and reorganization.

While the Debtors expect to be able to transfer more than 60 of the
facilities as a going concern pursuant to the Court-approved Transfer
Procedures described in the Government Stipulation arrived at after
negotiations with HHS/DOJ, they have been unable to reach accord with the
Health Care Capital Consolidated, Inc. (HCC), Landlord with respect to 18
of the Debtors' weakest facilities, and the Landlord of four additional
underperforming facilities.

Fifteen of these HCC Facilities constitute a substantial economic liability
aggregating a negative EBITDA estimated to be in excess of $7.6 million
over the twelve month period ending June 30, 2000. The other three
facilities have operated with a positive EBITDA over the six months ending
June 30, 2000 but their economic performance is only marginal. The Debtors
have indicated to HCC their possible desire to retain the three marginal
facilities but HCC has rejected that notion, based on the existence of
certain cross-default provisions contained in the HCC Leases. The Debtors
have determined that since the marginal facilities give no guarantee of
continued economic viability, it is not worthwhile to litigate the issue of
whether the cross-default provisions actually prevent the Debtors'
assumption of individual HCC Leases while rejecting others. Therefore, the
Debtors have determined to reject the Leases and Provider Agreements
associated with all 18 of the HCC Facilities, and commence the Transition
Process for those HCC Facilities.

Of the remaining four underperforming facilities, two are leased from
Beverly Enterprises and the other two each from Ventas Realty, LP and
University Center Hotel, Inc. These four together result in negative EBITDA
of approximately $3,309,261 accrued during the twelve months ending June
30, 2000. For the same reasons as with the HCC Facilities, the Debtors have
determined that, these too, should be disposed of through the rejection of
leasess and Provider Agreements.

Through lease termination and the cessation of operational and financial
responsibility, the Debtors expect to realize annual savings of
approximately $10,401,055. The landlords' rejection claims subject to the
limitations provided by section 502(b)(6) of the Bankruptcy Code, in the
Debtors' estimation would be in excess of $30 milllion, in the absence of
mitigation, based on 15% of the rental obligations remaining under the
leases, not exceeding three years of the remaining term following the
petition date.

The Debtors do not anticipate rejection damages for rejecting the Medicare
Provider Agreements, given that the Government Stipulation contemplates
divestiture of these particular Divesting Facilities.

Much as they would prefer to transfer facilities as going concerns, the
Debtors tell Judge Walrath, they recognize that landlords are not required
to enter into OTAs and LTAs. Indeed, HCC has previously asserted in court
that it does not wish to, and it is HCC's prerogative not to, enter into
the Debtors' proposed froms of OTAs or LTAs. After consultation with the
Creditors' Committee, the Debtors do not believe it would be a responsible
exercise of sound business judgment to enter into OTAs and LTAs on terms
that are substantially more onerous than those agreed to by numerous other

Therefore, in the Debtors' business judgment, the way to stop the drain on
the estates' value would be to reject the leases and provider agreements.

To divest the Facilities, the Debtors also seek approval of the
Implementation Procedures which provide that:

    (1) Each Divesting Facility will be subject to divest in accordance with
        applicable state laws;
    (2) Within three days of the completion of divestiture of a Divesting
        Facility, the Debtors will file with the Court and provide the
        Transition Notice to the Committee, the DIP Lenders, the landlord,
        HHS/DOJ and the relevant state Medicaid agency of the completion of
        the state-law Transition Process (the Transition Date);

    (3) The rejection of Lease or Provider Agreement will be effective as of
        the Transition Date;

    (4) The landlord or state Medicaid agency will have thirty days from the
        date of the Transition Notice for submitting rejection damages

    (5) Rent and other obligations accrued from the date the Court approves
        the motion to the Transition Date shall be treated as administrative
        expense, payable on the effective date of any plan of reorganization
        confirmed in the chapter 11 cases;

    (6) If the Debtors and the landlord agree on the transfer of a Divesting
        Facility as a going concern during the state-law transition process,
        the Debtors can opt out of the Transition Procedures.

The Debtors draw Judge Walrath's attention to the opt-out provision in the
Implementation Procedures the provision for the effective date for the
rejection of the lease or provider agreement to be on the Transition Date.
The opt-out mechanism enables the Debtors to transfer a Divesting Facility,
upon the consent of the landlord, if a new operator is identified during
the Transition Process, the Debtors submit. It also gives the Debtors an
added window of opportunity to negotiate with the landlords regarding
consensual transfer of the Divesting Facilities on economic terms that are
beneficial to the Debtors, their estates and their creditors, the Debtors
tell the Judge. With the effective date of the rejection of the Leases and
Provider Agreements to be of the actual date of divestiture of the
facilities, the Debtors can maintain operations for the benefit of the
residents in the Divesting Facilities, the Debtors observe.

The Debtors submit that the determination to reject the Leases and Provider
Agreements and commence the Transition Process was arrived at in good
faith, is based upon the sound business judgment of the Debtors, and should
therefore be approved and authorized by this Court. The Debtors believe
that establishing the Implementation Procedures are in the best interests
of the Debtors, their estates and their creditors.

Accordingly, the Debtors seek the Court's approval of: (1) the divestiture
of 22 of the SunHealth Facilities in accordance with state law; (2) the
rejection of the related real property leases and the Medicare and Medicaid
Provider Agreements, effective as of the date of divestiture, pursuant to
11 U.S.C. section 365(a); and (3) the Implementation Procedures governing
the transfer of the divesting facilities and the treatment of claims in
connection with the divestiture, pursuant to section 363(b).

                  Americorp Financial's Limited Objection

Americorp Financial filed a limited objection with the Court voicing its
objection to the extent that the Debtors have not specified whether they
intend to retrieve equipment in the facilities and whether any of such
equipment is Americorp's equipment. Americorp reminds the Court that the
status of Americorp's interest in the equipment is an issue that need to be
taken care of. (Sun Healthcare Bankruptcy News, Issue No. 15; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

TEXFI INDUSTRIES: Requests Exclusivity Extension through February 9
Texfi Industries, Inc., seeks an extension of its exclusive periods
to file a plan of reorganization and to solicit acceptances thereof through
and including February 9, 2001 and April 10, 2001, respectively.
The debtor, represented by Stephen B. Selbst and Barbra R. Funt of
McDermott, Will & Emery, states that is has shown sufficient "cause"
warranting the requested 120-day extension of its exclusivity periods, and
is continuing to make significant progress in its Chapter 11 case.

The debtor retained Atlas Partners, LLC as special real estate agent and
Hart Corporation and Coldwell Banker as special marketing agents for the

They are currently assisting the debtor in the sale of its real property in
Fayetteville, North Carolina and Olanta, South Carolina. The debtor sold
certain timber property at auction and substantial amount of unused
located at its Fayetteville plant. The proceeds of these sales have been
used to pay down debtor's outstanding obligations under its term loan from
Back Bay Capital LLC, which has a first priority security interest and lien
in debtor's real estate, machinery and equipment. The debtor also awaits
approval of its CIT Financing, post-petition financing.
The debtor is seeking to extend exclusivity so that it may achieve
confirmation of a consensual plan. It has made a concerted effort
throughout its proceedings to maintain an open dialogue with he principal
constituencies, cooperate with them, and to respond to any concerns that
they may have.

The debtor's post-petition earnings are 197% of those forecasted pre-
petition and debtor is current on all of its post-petition obligations. The
debtor continues to explore alternative strategic partners and alliances
regarding a plan.

VENCOR, INC.: Agreed to Modify Stay to Liquidate Claim & Pursue Insurance
The Debtors consent to modification of the automatic stay to permit
the plaintiff to prosecute her claims against the Debtors to final
judgment in the action captioned, Rosetta Angelita Simon v. Alta Vista
Health Care, et al., Case No. 342772 in the Superior Court of the State of
California for the County of Riverside.

The Debtors have determined that there is an insurance policy in favor of
the Debtors relating to the allegations made by the plaintiff. The lift
of automatic stay is limited to the sole purpose of determining all issues
of liability and damages, if any, against the Debtors. Any settlement of
recovery is limited to applicable insurance proceeds. The Debtors do not
consent to any further distribution from the Debtors' estates on account
of the judgment that may be entered, or to any collection from the Debtors
or the Debtors' current and former employees, directors and officers.

The plaintiff waives any and all claims for punitive damages and for
recovery against Vencor and their present or former employees, officers
and directors, any person or entity indemnified by the Debtors, and the
Debtors' insurers. The Debtors agree that any settlement of the underlying
action will include a general release of the plaintiff. (Vencor Bankruptcy
News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 609/392-0900)


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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
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DC. Debra Brennan, Yvonne L. Metzler, Ronald Ladia, Zenar Andal, and Grace
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Copyright 2000. All rights reserved. ISSN 1520-9474.

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