TCR_Public/001107.MBX              T R O U B L E D   C O M P A N Y   R E P O R T E R

                 Tuesday, November 7, 2000, Vol. 4, No. 218


AMERICAN PAD: American Tissue Completes Acquisition of Two Divisions
AMERICAN QUANTUM: Baseball Player & Creditors File Involuntary Petition
AVADO BRANDS: Moody's Downgrades All Ratings & Says Outlook is Negative
CENDANT CORP: Moody's Confirms Baa1/Baa2 Ratings & Says Outlook's Negative
CLARIDGE HOTEL: Announces $2.6 Million of Net Income in the Third Quarter

GEAC COMPUTER: Appoints Charles Jones as New Interim President and CEO
HARNISCHFEGER INDUSTRIES: Fixes Currency Conversion Rates For Claims
INTEGRATED HEALTH: Employs Broker to Market & Sell $12MM Maryland Property
J.C. PENNEY: Moody's Concludes Ratings Review & Cuts Ratings One Notch
KCS ENERGY: Drilling Success To Enhance Fourth Quarter Financial Results

LOEWEN GROUP: Appoints Kenneth Sloan As New CFO; Reaffirms Plan on the Way
MONEY'S FOODS: U.S. Companies File Chapter 11 Petitions in Delaware
NATIONAL ENERGY: $25 Million Secured Debt Holder Gets 4,656,889 Shares
NEVADA BOB'S: Two Directors & Officers Resign; Marketing Majority of Stores
NEVADA BOB'S: Retains The Ozer Group As Restructuring Agent & Asset Broker

OWENS CORNING: Obtains Sec. 366 Injunction Against Utility Companies
RENAISSANCE HOMES: Home Builder Seeks To Reorganize Under Chapter 11
SAKS INCORPORATED: Moody's Places Ratings on Review for Possible Downgrade
SEA DOG: Brewer Restaurant Files Chapter 11; President Won't Leave Bangor
SIGNAL APPAREL: Finding No Buyer, Apparel Maker Considers Liquidation

SUN HEALTHCARE: Medicare Reimbursements Improves 2Q Financial Results
TULTEX INC: Clothing Firm in Talks On $1.3MM Sale To Cohen Asset Management
U.S. TIMBERLANDS: Moody's Reviews B2 Senior Note Rating for Downgrade
URBAN BOX: Files for Chapter 11 in New York, Sends Home 300 Workers
URBAN BOX: Case Summary and 20 Largest Unsecured Creditors

WISCONSIN CENTRAL: Moody's Confirms Baa2 Senior Unsecured Rating


AMERICAN PAD: American Tissue Completes Acquisition of Two Divisions
American Tissue Inc. (ATI) announced that one of its affiliate companies
has completed the acquisition of the assets of the Ampad and the Shade
Allied divisions from American Pad & Paper (AP&P).  Ampad is one of North
America's largest suppliers of writing pads, filing supplies and retail
envelopes and is the 118-year-old company that invented the legal pad.  The
Shade Allied division is one of the four largest forms suppliers in North
America.  The Ampad division will operate under the name American Pad &
Paper LLC and will be headquartered in Plano, Texas.

"The acquisition of Ampad and Shade Allied by its affiliates will provide
the ATI family of companies with a significant position in these important
markets and allow us to complete key pieces of American Tissue's vertical
integration strategy," stated Mehdi Gabayzadeh, American Tissue's President
and Chief Executive Officer.  "The combined affiliated American Tissue
Group of companies will now have an annual sales volume of approximately $1
billion and 4,000 employees."

Mark Lipscomb, Vice President of AP&P, has been named as President and CEO
of the new affiliate under which Ampad will be organized.  Mr. Lipscomb
joined AP&P in 1998 and has been Acting COO of Ampad for the last several

Ampad will continue to market a full line of products under the industry
respected Ampad label and will remain focused on the highest levels of
customer service and vendor support during and beyond the transition of
this acquisition.  Additional information about Ampad can be found on its
web site at

The Shade Allied division will operate under the leadership of Al Vosper,
President and CEO of American Forms LLC.  This new larger forms business
will have an expanded product line in the custom cut and cut size business.
Additional information about American Forms LLC can be found on its web
site at

Founded in 1981, with headquarters in Hauppauge, New York, ATI has
quickly become one of the country's largest manufacturers and distributors
of consumer private label and away from home tissue paper products.  
American Tissue has domestic tissue facilities located strategically from
coast to coast as well as facilities in Mexico.  Additional information on
the company can be found at

AMERICAN QUANTUM: Baseball Player & Creditors File Involuntary Petition
Baseball player Jose Canseco and creditors filed for an involuntary
petition against American Quantum Cycles Inc. asking that the Company be
placed into Chapter 11 bankruptcy.  The petition was filed on Oct. 27 in
U.S. Bankruptcy Court in Orlando. The Melbourne-based motorcycle maker owes
$1.5 million in under-secured loans to McCarthhy Group, $1.3 million in
unsecured loans to Jose Canseco and $200,000 in senior notes to Persphone
Enterprises Ltd.  Attempts by to contact Richard Hagen,
Quantum's president and CEO, failed.  The company has indicated that it
can't pay its debts and it lacks the funding to continue its day-to-day
operations.  The Honorable Judge Arthur B. Briskman will oversee the

AVADO BRANDS: Moody's Downgrades All Ratings & Says Outlook is Negative
Moody's Investors Service downgraded all ratings of Avado Brands, Inc.
Ratings lowered are as follows:

    a) $105.0 million senior secured revolving credit facility to B2 from

    b) $116.5 million 9.75% senior unsecured notes (2006) to Caa1 from B1,

    c) $100.0 million 11.75% senior subordinated notes (2009) to Caa3 from

    d) $115.0 million 7% convertible preferred TECONS (2027) issued by Avado
        Financing I to "ca" from "caa",

    e) Senior implied rating to B3 from B1,

    f) Issuer rating to Caa2 from B2.

The rating outlook is negative.

The rating action was prompted by concerns over the company's liquidity
position, further declines at Don Pablo's (the company's largest concept)
after attempting a turnaround over the past several quarters, and the
company's increasingly leveraged financial condition. While we believe that
the company's operating plans will permit payment of all obligations going
forward, the lack of a liquidity cushion will not allow the company to
absorb any unforeseen events or results otherwise falling short of current

The ratings consider the company's highly leveraged financial condition,
the intense competition within the casual dining segment of the restaurant
industry, and our concern about the probable consequences if the company
fails to fully meet current operating targets and asset disposition goals.
Our opinion that significant steps remain to revive Don Pablo's, including
the establishment of a cost-effective marketing program, also restrain the

Benefiting the ratings are the company's ownership of a significant portion
of restaurant real estate and the performance at two of the company's
concepts, Hops and McCormick & Schmick's.

The B2 rating on the senior secured revolving credit facility considers
that this bank loan is secured by the company's real estate and enjoys the
guarantees of the company's subsidiaries (except for Hops). The bank
facility, which formerly had been unsecured, became collateralized in
December 1999 and February 2000 by virtually all of the company's owned
real estate (except for the 20 Hops restaurants sold and leased back in
October 2000). In April 2000, the bank syndicate and the company agreed to
reduce facility capacity in quarterly installments through the maturity
date in 2002. We believe that, given the state of Don Pablo's and Canyon
Cafe, the company will be hard pressed to meet these reduction commitments
using cash generated from operations.

The Caa1 rating on the senior unsecured notes reflects their effective
subordination to a significant amount of secured debt, but considers the
guarantees provided by the company's subsidiaries (except for Hops). We
expect that these notes would achieve substantial recovery in a distressed
scenario through enterprise value in excess of the bank loan, but
impairment is likely. The Caa3 rating on the senior subordinated notes
recognizes their subordination to the revolving credit facility and the
senior notes, but considers the guarantees provided by the company's
subsidiaries (except for Hops). However, we anticipate that these
subordinated notes would be significantly impaired in a distressed

The "ca" rating for the convertible preferred TECONS (Avado Financing I, a
business trust formed by Avado to issue the TECONS, used the proceeds to
purchase convertible subordinated debentures issued by Avado) recognizes
that these convertible debentures are contractually subordinated to $321.5
million of more senior securities. Avado has exercised the right to defer
convertible debenture cash distributions for up to 20 consecutive quarters.
We deem it reasonable to treat these securities as junior subordinated debt
because the current equity value is a small fraction of the conversion
price. In a distressed scenario, we believe that the TECONS would achieve
virtually no recovery.

Besides the risks inherent in operating the company without a cash cushion,
the negative outlook considers the probable rating effects if a recovery at
Don Pablo's is not visible within two quarters or the company cannot sell
sufficient assets to meet bank facility reduction commitments. We note that
the company's trade accounts payable was unusually high at the end of third
quarter 2000 while waiting for proceeds from the sale and leaseback of 20
Hops restaurants.

Total debt (including the convertible secured securities) equaled 7.0 times
trailing EBITDA through October 1, 2000. EBITDA covered interest and
convertible security distributions by approximately 1.4 times, while
capital expenditures equal to EBITDA did not leave sufficient operating
cash flow to cover interest expense. Going forward, the company has taken
steps to improve short term liquidity including deferring interest on the
convertible secured securities (saving about $1.7 million a quarter),
drastically scaling back capital expenditures through ceasing construction
of new restaurants (expected 2001 capital expenditures of $20 million
versus 2000 capital expenditures of $49 million), and selling non-
productive assets. Nevertheless, we believe that the company will not be
able to absorb an adverse event given the current liquidity situation.

Avado Brands Inc, headquartered in Madison, Georgia, operates 139 Don
Pablo's Mexican themed restaurants, 72 Hops micro-breweries, 31 McCormick &
Schmick's seafood restaurants, and 17 Canyon Cafe Southwestern themed

CENDANT CORP: Moody's Confirms Baa1/Baa2 Ratings & Says Outlook's Negative
Moody's Investors Service confirmed the ratings of Cendant Corporation and
PHH Corporation, following Cendant's recent announcement that it will
purchase Fairfield Communities, divest its individual membership business,
and sell  The confirmation of ratings is based upon the stability
of the cash flow from Cendant's retained businesses, limited asset risk,
and the expectation that the Fairfield transaction will be entirely
financed directly or indirectly with equity. The rating outlook remains
negative due to continued uncertainty regarding the company's strategic
direction and business model.

Ratings Confirmed:

    * Cendant Corporation

        a) Senior Unsecured at Baa1

        b) Senior Unsecured Shelf at (P) Baa1.

        c) Growth Prides at A3

        d) Subordinated debt at (P) Baa2

        e) Preferred shelf at (P)"baa2"

        f) Short-term at Prime-2

    * Cendant Capital I

        a) Guaranteed FELINE PRIDES at "baa1"

    * Cendant Capital II and Cendant Capital III

        a) Guaranteed Preferred stock at (P) "baa2"

    * HFS Inc.

        a) Senior unsecured at Baa1 (Assumed by Cendant Corporation)

    * CUC International, Inc.

        a) Subordinated debt at Baa2 (Assumed by Cendant Corporation)

    * Sierra On-Line, Inc.

        a) Subordinated debt at Baa2

    * PHH Corporation

        a) Senior unsecured at Baa1

        b) Senior unsecured shelf at (P) Baa1.

        c) Senior unsecured MTN at Baa1.

        d) Issuer Rating at Baa1

        e) Short-term at Prime-2

Cendant has signed a definitive agreement to acquire Fairfield Communities
at $15 per share or $635 million. The final acquisition price may increase
to a maximum of $16 per share depending on a formula based on the average
trading price of Cendant stock over a 20 day period prior to the closing of
the transaction.

The confirmation recognizes that the loss of the EBITDA contribution from
the individual membership segment will be largely replaced by the positive
contribution from Fairfield, as well as the elimination of losses generated
by Since the acquisition of Fairfield is expected to be financed
directly or indirectly with equity, debt protection measures should remain
unchanged. Although the addition of Fairfield complements Cendant's
existing participation in the vacation ownership industry through its
timeshare exchange company, RCI (Resort Condominiums International), it
also adds new operating risks. Specifically, Cendant will be exposed to
property development risk, despite the likelihood that Fairfield's property
development company will be spun-off, as well as to consumer receivable
underwriting risk to finance the purchase of vacation ownership units. The
company intends to continue Fairfield's use of off-balance sheet funding
vehicles to support this activity. Moody's notes that Fairfield has a good
development track record and the performance of its receivable portfolio
has been above average. Since Fairfield will represent only about 5% of
Cendant's total EBITDA, Moody's believes that these risks are manageable.

The ratings also consider the company's obligation to pay $2.85 billion to
settlement shareholder lawsuits. Moody's includes the tax adjusted
settlement liability into its leverage calculations. Given the high
probability that the appeals process will move slowly, Moody's believes
that Cendant will have sufficient time to pre-fund the settlement from its
substantial recurring earnings stream and so avoid a sharp increase in debt
levels. Moody's notes that debt protection measures could be stressed if
the appeals process moves more quickly than the company's ability to fund
the Trust, particularly if acquisition activity continues. The negative
outlook reflects the high level of event risk resulting from the company's
return to acquisition mode, as well as continuing uncertainty regarding the
company's strategic direction.

Cendant Corporation, headquartered in Parsippany, New Jersey is a leading
provider of real estate, travel and direct marketing related consumer and
business services.

PHH Corporation, a wholly owned subsidiary of Cendant Corporation, provides
relocation and mortgage banking services.

Fairfield Communities is one of the largest independent vacation ownership
companies with 33 resorts in 12 states and the Bahamas.

CLARIDGE HOTEL: Announces $2.6 Million of Net Income in the Third Quarter
The Claridge Hotel and Casino Corporation, operator of the Claridge Casino
Hotel here, reported net income of $2.6 million for the third quarter of
2000, compared to net income of $2.5 million in the third quarter of 1999.
For the nine months ended September 30, 2000, the Corporation reported net
income of $4.0 million compared to net income of $1.0 million in the same
period last year.

Earnings before interest, taxes, depreciation and amortization, when
adjusted to eliminate the effects of Claridge's related limited partnership
structure, were $4.2 million for the quarter ended September 30, 2000, and
$8.9 million for the nine months ended September 30, 2000, compared to
Adjusted EBITDA of $4.6 million for the third quarter in 1999 and $10.3
million for the first nine months in 1999.

On August 16, 1999, the Corporation and The Claridge at Park Place,
Incorporated filed voluntary petitions under Chapter 11 of the U.S.
Bankruptcy Code in order to facilitate a financial restructuring.

Therefore, beginning on August 16, 1999, the Corporation ceased to record
interest expense related to its 11 3/4% First Mortgage Notes. Contractual
interest for the period June 1, 2000 to September 30, 2000 and January 1,
2000 to September 30, 2000, would have been $3.0 million and $9.0 million,

Net income and Adjusted EBITDA for the third quarter and the first nine
months of 2000 included, respectively, a net $1.4 million and a net $3.0
million expense for reorganization items related to the Corporation's
Chapter 11 proceedings. Net income and Adjusted EBITDA for the first nine
months of 1999 include the effect of the receipt of the settlement of
Claridge's claim against the contractor and architect that built its self-
parking garage. Net expense for reorganization items for the third quarter
of 1999 and the first nine months of 1999 was $797,000.

Third quarter 2000 casino revenues of $44.5 million decreased $1.9 million
from prior year levels. This decrease, which is primarily attributed to
table games revenues, was more than offset by a decrease in related

"We continue to show significant improvements in operating results on a
year-to-year basis," stated Frank Bellis, chief executive officer.
"However, due to our ownership structure, expenses related to the Chapter
11 proceedings and the garage settlement last year it is difficult to
appreciate this improvement when comparing year-to-year results. We saw a
$500,000 year-to- year improvement in Adjusted EBITDA in the third quarter
of 2000 after eliminating the effect of reorganization items in 2000, and
1999 and the effect of a $1 million contractual annual increase in payments
to the limited partnership which factor into the calculation of Adjusted
EBITDA. More significantly, for the first nine months of 2000, Adjusted
EBITDA increased $3.9 million (43%) on a year-to-year basis after
eliminating the effect of the garage settlement last year, reorganization
items, and the increase in contractual rent payments to the limited

The Corporation, through its subsidiary, The Claridge at Park Place,
Incorporated, operates the Claridge Casino Hotel in Atlantic City. The
casino hotel opened in July 1981 and has 59,000 square feet of casino
gaming space. The Claridge Hotel and Casino Corporation is a closely-held
public corporation.  Its Corporate Bonds are publicly traded on the New
York Stock Exchange under the symbol of CLAR02.

GEAC COMPUTER: Appoints Charles Jones as New Interim President and CEO
Reuters reports on Canada's software company appointing a new chairman and
an interim president and chief executive. Geac Computer Corp.'s board
appointed Charles Jones as non-executive chairman of the board and John
Caldwell as interim president and chief executive. Geac did the executive
transition, after William Nelson left his post as chairman and interim
chief executive officer. Even though Mr. Nelson is no longer in the board
he still remains a director of the company.

As previously reported, Geac will send home 500 of its workers and faces an
accounting charge of $28 million.  Company stocks traded very low that
nudged CEO Douglas Bergeron off his seat. Geac sells enterprise resource
planning tools that help firms integrate planning, marketing and human
resources files.

HARNISCHFEGER INDUSTRIES: Fixes Currency Conversion Rates For Claims
Section 502(b) of 11 U.S.C. of the Bankruptcy Code provides that for filed
claims, the court "shall determine the amount of such claim in lawful
currency as of the date of the filing of the petition. . . ." The Debtors
infer that this would mean that the appropriate date for conversion of
claims denominated in a foreign currency is the date on which the petition
is filed. Caselaw also supports this notion, the Debtors say, directing
Judge Walsh's attention to Finanz AG Zurich v. Banco Economico S.A. 192
F.3d 240, 250 (2nd Cir. 1999) and In re Axona International Credit &
Commerce Limited, 88 B.R. 597, 608 (Bankr. S.D.N.Y. 1988).

Accordingly, Harnischfeger Industries, Inc., sought and obtained an order
from Judge Walsh stating that any claim asserted in a currency other than
U.S. dollars shall be automatically deemed converted to equivalent U.S.
dollar value using the mid-range spot rate of exchange for the applicable
currency as published in the June 8, 1999 Wall Street Journal, National
Edition, which published rates for the June 7, 1999 petition date.
(Harnischfeger Bankruptcy News, Issue No. 29; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

INTEGRATED HEALTH: Employs Broker to Market & Sell $12MM Maryland Property
The Debtors intend to sell land known as The Highlands At Hunt Valley, of
approximately 79.88 acres, of which approximately 50.25 is suitable for
commercial use and the remainder consists of primarily of woodlands and
land unsuitable for commercial development. If sold, the Debtors anticipate
to realize proceeds of approximately $12,562,500.

To secure a price commensurate with the Debtors' estimates, the Debtors see
the need of the services of a sophisticated commercial real estate estate
broker. The Debtors believe that TriAlliance is such a broker and have
entered into an agency agreement with TriAlliance under which TriAlliance
will be employed by the Debtors as exclusive sales agent for the Property,
subject to the Court's approval. TriAlliance will be compensated a
commission by the Debtors only if TriAlliance procures a buyer other than
one of the Excluded Purchasers, defined in the TriAlliance Agreement as
potential purchasers previously introduced to the Property by MacKenzie
Commercial Real Estate Services, LLC, pursuant to an expired pre-petition
exclusive agency agreement between MacKenzie and the Owner, which has not
been assumed by the Debtors. If TriAlliance earns this Commission, the rate
will be 4% of the actual sale price of the Property. The Debtors submit
that such commission is standard in the commercial real estate brokerage

The TriAlliance Agreement provides that the Owner may terminate the
Agreement by written notice in the event of a default not cured within five
days after written notice, or in the event of TriAlliance's failure to make
its best efforts to procure a buyer. Additionally, the Owner may terminate
the TriAlliance Agreement for any reason or no reason upon thirty days
written notice to TriAlliance.

The Debtors have also entered into a post-petition agency agreement with
MacKenzie, pursuant to which MacKenzie will be employed by the Debtors as
non-exclusive real estate broker, subject to the Court's approval. In
connection with this, MacKenzie may consummate a sale of the Property only
to the Prior Customers, a term used in the MacKenzie Agreement to mean
those previously introduced potential purchasers referred to as Excluded
Purchasers in the TriAlliance Agreement. If MacKenzie so consummates a
sale, MacKenzie will receive a commission of 3% of the actual sale price of
the Property. The Debtor submits that such commission is below the standard
commission for the commercial real estate brokerage industry.

Accordingly, the Debtors seek the Court's authority for the employment of
(i) TriAlliance Commercial Real Estate Services, LLC, and (ii) MacKenzie
Commercial Real Estate Services, LLC as real estate brokers for the purpose
of procuring a buyer for the Property in Sparks, Maryland. (Integrated
Health Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc.,

J.C. PENNEY: Moody's Concludes Ratings Review & Cuts Ratings One Notch
Moody's lowered the long and short-term ratings of J.C. Penney Company,
Inc. based on the continuing difficulty in improving sales and
profitability at the department store group, as well as the uncertainty
surrounding a return to profitability at the Eckerd drug store division.
The rating outlook is negative reflecting the uncertain prospects and
timing for turning around the declining operating performance of both
divisions, as well as the potential impact of strategic initiatives that
may be required to resolve these issues. This rating action concludes the
rating review begun on August 23, 2000.

Ratings downgraded are:

    * J.C Penney Company, Inc.

       a) senior unsecured debt and medium term notes to Baa3 from Baa2;

       b) issuer rating to Baa3 from Baa2, and

       c) senior unsecured shelf registration to (P) Baa3 from (P) Baa2.

    * J.C. Penney Funding Corporation

       a)  the company's rating for commercial paper to P-3 from P-2.

For several years Penney's comparable store sales have declined at the
department stores. The reasons for this decline are many and reflect a
combination of external and internal factors. Penney, like other mid-priced
department stores, continues to face fierce competition that reflects not
only a change in consumer buying habits, but also improved execution by
retailers on both the higher and lower end of the apparel and home
furnishings spectrum. As a result, shoppers have more choices than ever and
thus are less loyal to a given retailer that does not consistently create a
new reason for visiting the store. Penney's has maintained a loyal customer
base and retains a strong franchise value. However, the customer
demographic that is most receptive to Penney's, an older female consumer,
is not the demographic group that will enable Penney's to regain lost
market share and sales volumes. Penney's will need to attract a younger,
more fashion conscious consumer if it is to regain its lost position. This
process of attracting a younger customer has begun and is evident in
several of the merchandising initiatives and in new advertising campaigns.

Moody's believes this customer base transition will take time and real
improvement will have to be at the expense of other retailers if it is to
be successful. Initially, this may require a highly promotional environment
in order to generate a level of consumer interest that is required to
execute the turnaround. Additionally, Moody's believes that despite the
valuable experience of the new senior management team, progress could be
uneven and take longer than anticipated.

The steps that will be needed to return Eckerd to profitability are more
uncertain in terms of the solution and timing. Until the first quarter of
the current fiscal year, Eckerd had generated substantial, although
diminished, profitability. In the first quarter Eckerd generated $108
million of LIFO operating profit. By the second quarter that diminished to
$2 million. Eckerd is now expected to generate a significant loss in the
recently concluded third quarter. At the same time, Eckerd continues to
show a healthy increase in comparable store sales driven by strong results
in the prescription drug portion of the business. Moody's believes that the
decline in sales and profits on the non-pharmacy segment indicates poor
execution of merchandising strategies, distribution, logistics and store
operations. Additionally, Moody's expects that it will take time to sort
through the underlying problems and to offer solutions that will enable a
return to past levels of profitability.

Penney's franchise benefits from its nationwide network of department
stores, as well as its catalog operations, which have provided a useful
platform for its growing Internet business. The economic value of the DMS
group and the company's real estate portfolio are additional positives.

J.C. Penney Company, Inc. headquartered in Plano, Texas is one of the
largest retailers in the United States.

KCS ENERGY: Drilling Success To Enhance Fourth Quarter Financial Results
KCS Energy, Inc. (NYSE: KCS) announced financial and operating results for
the third quarter and nine months ended September 30, 2000.

Commenting on the Company's performance, KCS President and Chief Executive
Officer James W. Christmas said, "We are pleased to report that for the
second straight quarter the Company has achieved the highest net income and
cash flow in its history. Strong market prices for the Company's natural
gas and oil production, the results of our cost-reduction and property
rationalization programs and a successful drilling program were all
contributing factors to our record performance. We have continued to
implement a meaningful capital expenditure program while also reducing bank
debt and increasing cash. For the nine months ended September 30, 2000, we
carried out a $53 million capital expenditure program, paid down over $22
million of bank debt bringing total debt repayments since April 1999 to
nearly $66 million and increased cash balances by $15.7 million to $26.3
million. With the success of our drilling program and the current market
prices for oil and natural gas, we expect higher production, earnings and
cash flow in the fourth quarter."

KCS is an independent energy company engaged in the acquisition,
exploration and production of natural gas and crude oil with operations in
the Mid-Continent and Gulf Coast regions. The Company also purchases
reserves (priority rights to future delivery of oil and gas) through its
Volumetric Production Payment program. For more information on KCS Energy,
Inc., please visit the Company's web site at

LOEWEN GROUP: Appoints Kenneth Sloan As New CFO; Reaffirms Plan on the Way
The Loewen Group Inc. (TSE: LWN), announced the appointment of Kenneth
Sloan, 51, of Toronto, as its new Chief Financial Officer. Mr. Sloan was
most recently Senior Executive Vice President, Finance and Planning and
Chief Financial Officer at Shoppers Drug Mart Ltd.

In announcing the appointment, Loewen President and Chief Executive
Officer, Paul Houston said "Ken Sloan brings to Loewen more than 20 years
experience in multi-unit, consumer focused businesses. This background is
an ideal fit with Loewen's goal of becoming a superior operating company
and the leader in the field of funeral and cemetery services." Mr. Sloan
will commence his duties on November 6 and will be located at Loewen's
newly established Executive Office in Toronto. A Chartered Accountant, Mr.
Sloan also holds an M.B.A. from York University. Prior to joining Shoppers
Drug Mart Ltd., he held senior financial positions with Loblaw Companies
Ltd., National Grocers Co. Ltd., and The Quaker Oats Company.

Mr. Houston added "the appointment of Ken Sloan comes at an important time
for Loewen; the Company will soon file its Plan of Reorganization and Ken's
skills will be extremely helpful in preparing for emergence. Ken's
experience includes internal restructuring of large retail business with
multiple locations to provide both bottom line gains and consumer service
improvements. Ken is not only a proven senior finance executive; he also
brings to Loewen highly specialized information technology talent."

Paul Houston, President of The Loewen Group stated "I wish to thank Michael
Cornelissen for his exceptional service as Chief Financial Officer. In July
1999 Michael was asked to assume the role of Chief Financial Officer of the
Company and become a key member of the Executive management team. Michael
has been invaluable in helping the Company during the emergence process.
Michael has chosen not to join the relocation of the Executive offices to
Toronto. Michael will continue to assist the Company as we work through the
final stages of the Chapter 11/CCAA process."

Based in Vancouver, The Loewen Group Inc. owns or operates more than 1,100
funeral homes and more than 400 cemeteries across the United States,
Canada, and the United Kingdom. The Company employs approximately 13,000
people and derives approximately 90 percent of its revenue from its U.S.

MONEY'S FOODS: U.S. Companies File Chapter 11 Petitions in Delaware
Money's Mushrooms Ltd. announced that its US operation, Money's Foods U.S.
Inc, is seeking court protection under Chapter 11 of the U.S. Bankruptcy
Code. This filing was made in the Bankruptcy Court for the District of
Delaware.  A summary of the filing in the Delaware Court appeared in
yesterday's edition of the Troubled Company Reporter.  The chapter 11
filing in the U.S. does not affect the Canadian company's operations,
Money's Mushrooms Ltd.

Following the recent announcement of the closure of 4 farms in the US the
decision to file under chapter 11 was based on the inability of Money's
Foods U.S. Inc to restructure its financial obligations to secured and
unsecured creditors. This filing allows Money's Foods U.S. Inc to operate
while it restructures and reorganizes its obligations under the U.S.
Bankruptcy Code. In connection with the filing, The Bank of Nova Scotia
will provide debtor in possession financing to enable continued operation
of the company during the chapter 11 process.

As part of the restructuring process, Jack McGregor, a principal of the
turnaround management firm, Crossroads, LLC, has been appointed as
President and Chief Executive Officer of Money's Mushrooms Ltd. and Money's
Foods U.S. Inc, replacing Len Bykowski. Yee Mah, Senior Vice President of
Corporate Development is also leaving the company.

Tim Adlington has been named Chief Operating Officer of Money's Foods U.S.
Inc and Jim Taggart has been appointed Chief Operating Officer of the
Canadian companies.

"We have faced some challenging times and our focus is on taking the steps
necessary to ensure we have a viable company. We will continue to need the
support and hard work of all our employees to do this," said Jack McGregor,
the new President and Chief Executive Officer of Money's Mushrooms Ltd and
Money's Foods U.S. Inc.

Money's Mushrooms Ltd. is a North American producer and marketer of fresh
mushrooms and mushroom products. The privately held company is
headquartered in British Columbia and has 3,000 employees across North
America. The US company operates under the name of Money's Foods U.S. Inc.
Information about the company and its products is available at

NATIONAL ENERGY: $25 Million Secured Debt Holder Gets 4,656,889 Shares
National Energy Group, Inc. (OTC Bulletin Board: NEGI) announces issuance
of 4,656,889 shares of its common stock to Arnos Corp, which is also the
holder of the Company's $25 million secured debt and $165 million 10-3/4%

In compliance with the terms of the Company's Joint Plan of Reorganization
as confirmed by the United States Bankruptcy Court for the Northern
District of Texas, Dallas Division, effective as of August 4, 2000, the
Company has issued 4,656,889 shares of its common stock to Arnos Corp. in
consideration of a cash payment in the amount of $2.0 million.

In addition to the delivery of additional shares of common stock to Arnos
Corp., other equity interest provisions of the Plan provided that as of the
Effective Date (i) all preferred stock shall be deemed cancelled and each
holder of a preferred equity interest shall receive its pro rata share of
714,286 newly issued shares of common stock in the reorganized Company;
(ii) each common stock shareholder of record as of the Effective Date shall
retain his/her interest; provided that all common stock certificates of the
Company shall be deemed cancelled and exchanged by the Company's Transfer
Agent (Wells Fargo Bank Minnesota, N.A.) for newly issued shares of common
stock in the reorganized Company which shall be issued to common stock
shareholders at a ratio of one (1) share of common stock in the reorganized
Company for every seven (7) shares cancelled as a result of the
reorganization; and (iii) all other equity interests in the Company are
deemed to be cancelled. All the common shares issued pursuant to the Plan
shall be issued pursuant to a registration exemption under Section 1145 of
the United States Bankruptcy Code and will include a restrictive legend
mandated by the Plan which prohibits transactions in the Company's common
stock by anyone who is or will become a "5 percent shareholder" within the
meaning of Section 382 of the Internal Revenue Code. On October 19, 2000,
the Company's Transfer Agent commenced the mailing to shareholders of
record the new certificates evidencing their common equity interest in the
reorganized Company and requesting return of the old certificates.

As provided in the Plan, the issued and outstanding shares of common stock
in the reorganized Company held by Arnos Corp. and its affiliates is
5,584,044 shares, or 49.9% of the total issued and outstanding shares of
the Company's common stock. The reorganized Company currently has
11,190,650 shares of common stock issued and outstanding.

The foregoing is presented for summary purposes only and reference is made
to the Company's Joint Plan of Reorganization and applicable Bankruptcy
Court orders for the complete details of the transactions described above.

National Energy Group, Inc. is a Dallas, Texas based independent oil and
gas exploration and production company. The Company's principal properties
are located onshore in Texas, Louisiana, Oklahoma and Arkansas.

NEVADA BOB'S: Two Directors & Officers Resign; Marketing Majority of Stores
Nevada Bob's Golf Inc. announces that Mr. Robert C. Duncan and Mr. Dan R.
Duncan have resigned as directors and officers of the Company and all of
its subsidiaries, effective immediately.

The Company also announces that it continues to work closely with its
primary secured lender and its financial advisors in structuring and
executing a revitalization and restructuring plan. As part of the
revitalization plan, the Company is marketing for sale the majority of its
corporate stores, which stores are to be operated as "Nevada Bob's"
franchises by any purchasers. Further announcements respecting the
Company's revitalization plan, including any finalized asset dispositions,
shall be made as developments occur.

Nevada Bob's Golf Inc. corporate offices are located in Calgary, Alberta,
Canada. The Company's stock trades under the symbol "NBC" on The Toronto
Stock Exchange.

The Toronto Stock Exchange has neither approved nor disapproved of this

NEVADA BOB'S: Retains The Ozer Group As Restructuring Agent & Asset Broker
The Ozer Group of Needham, Mass., announced that it has been retained by
Nevada Bob's Golf, Inc., to act as its restructuring consultant and its
agent to sell all or part of the Company in connection with Nevada Bob's
recently filed Chapter 11 case. Ozer is orchestrating a process that could
result in the transfer of the Company intact to an ongoing business buyer,
or alternatively could involve selling assets to one or more parties, with
the possibility of a reorganized Nevada Bob's retaining ownership of
certain assets.

The Company's assets include Nevada Bob's corporate-owned stores'
inventory, intellectual property, real estate, franchise business,
manufacturing/wholesale business, furniture, fixtures, and equipment.
As part of their effort, The Ozer Group has placed personnel in Nevada
Bob's corporate office to evaluate the assets involved. At the time of this
release, Ozer has prepared and is currently distributing a confidential
memorandum to parties from all over the world that have expressed interest
in the assets, either for the purpose of liquidating them or utilizing them
as part of an ongoing concern.

"We have been charged with creating a forum for a competitive bidding
process, under which we intend to maximize the return to the debtor for its
assets" said Stephen Miller, Principal of The Ozer Group. "Part of our
challenge is to evaluate ongoing business buyers along with protecting the
integrity of ongoing franchise stores."

Nevada Bob's system of company-owned and franchised golf specialty retail
stores is the largest in the world. The Company consists of 82 corporate
and more than 150 franchise locations, operating in countries around the

Based on research performed by independent consultants, the Nevada Bob's
brand is easily the most recognized retail name in the golf business today.
The Company's stores offer a full line of golf products and accessories
including clubs, balls, bags, footwear, various accessories, and apparel
which include brands such as Titleist, Callaway, Taylor Made, Spalding,
Cleveland, Maxfli, Alien, Adams, Orlimar, MacGregor, Mizuno, Hogan,
Footjoy, Tommy Armour, Cobra, and Wilson.

In addition to its retail operations, Nevada Bob's manufactures and
distributes golf products and accessories through its Alien Sport brand.
The original Alien Ultimate Wedge was one of the most successful specialty
clubs ever made and is one of the primary reasons the Alien brand has
remained strong in the golf industry for several years.

Based in Needham, Mass., The Ozer Group is one of the country's leading
retail consulting, business evaluation and asset disposition firms. Ozer is
quick, flexible and creative in offering solutions to retailers of all
sizes throughout North America and Europe. In addition to helping companies
maximize realization for their assets, Ozer manages human resources issues,
real estate relationships and other critical areas that are affected when
companies undergo change. Ozer's management and partners are retailers who
have managed thousands of stores and billions of dollars in inventory.
Ozer's partners are directly involved in every project. To learn more about
The Ozer Group, visit

OWENS CORNING: Obtains Sec. 366 Injunction Against Utility Companies
Owens Corning sought and obtained an interim and final order prohibiting
its hundreds of Utility Service Providers from altering, refusing or
discontinuing services on account of pre-petition invoices, considering
that ininterrupted gas, water, electric, telephone and other utility
services are critical to the Debtors' ability to sustain their operations
during the pendency of their Chapter 11 cases.

Judge Walrath concurred that the Debtors' payment history with respect
to prepetition utility bills, their demonstrated ability to pay future
utility bills, and the administrative expense priority afforded under
sections 503(b) and 507(a) (1) of the Bankruptcy Code, together constitute
adequate assurance of payment for future utility services as described in
11 U.S.C. Sec. 366, without the need for additional assurance in the form
of a deposit.

Pursuant to the Court's order, utility companies have 30 days to make a
request for additional adequate assurance. If the debtors are unable to
resolve any such request consensually with the utility company, the
debtors can file a motion for the court to hear the case. Any Utility
Company that does not timely and properly request for additional
adequate assurance of payment shall be deemed to be adequately assured
of payment under section 366(b) of the Bankruptcy Code. (Owens-Corning
Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-

RENAISSANCE HOMES: Home Builder Seeks To Reorganize Under Chapter 11
Renaissance Homes and The Genesis Group, sought bankruptcy protection under
Chapter 11, The Orlando Sentinel reports.  It was a month ago when the home
builder's operations ceased, leaving 30 home-buyers dazzled.  The
bankruptcy filing that was made in Orlando did not have specifics on the
assets and debts of the company.  Renaissance attorney Frank M. Wollf says,
negotiations with lenders continue and the Company is hopeful it can obtain
new cash to complete unfinished houses.  The two companies have been in
business about a dozen years.  Both Renaissance and Genesis built houses
ranging in price from $125,000 to about $600,000.

SAKS INCORPORATED: Moody's Places Ratings on Review for Possible Downgrade
Moody's Investors Service placed the ratings of Saks Incorporated on review
for possible downgrade based on the continued soft operating performance of
the company's department store chains and the increased challenge of
appropriate merchandising in the currently unforgiving macro-environment.
The prospective senior implied rating of Ba1 for Saks Fifth Avenue
Enterprises, assigned in July 2000, is confirmed, based on its premier
luxury brand, successful editing of its merchandise assortments, and the
quality of its store base, all tempered by its high adjusted leverage, more
limited size and scale, and some degree of concentration of sales and
earnings in a single store; the rating outlook remains stable. Moody's
review of the ratings of Saks Incorporated will assess the company's plans
for improving its operating performance in the context of a difficult,
highly competitive environment, including the likely timing and pace of any
such improvement, and the impact of adjusting its merchandising efforts.
The review will also consider the impact that the proposed spin-off of Saks
Fifth Avenue will have on the ability of the Department Store Group to
position itself to meet the competitive and business challenges that it

Ratings on review for possible downgrade:

    * Saks Incorporated:

       a) Senior unsecured bank and public debt ratings (guaranteed by
           operating subsidiaries) at Baa3.

       b) Senior unsecured shelf at (P)Baa3.

       c) Subordinated shelf at (P)Ba2.

       d) Preferred stock shelf at (P)"ba2".

       e) Junior preferred stock shelf at (P)"ba3".

    * Proffitt's Capital Trust I, II, III, IV and V:

       a) Preferred stock shelf at (P)"ba2"

Rating confirmed:

    * Saks Fifth Avenue Enterprises (to be spun-off):

       a) Prospective senior implied at Ba1

In July 2000, Saks Incorporated announced that it would spin-off Saks Fifth
Avenue to create two separate public companies, "SFA Enterprises" and "DSG"
(the department store group). SFA Enterprises will be comprised of Saks
Fifth Avenue full line stores, the Off 5th outlet stores and Saks Direct
(catalog and electronic commerce). DSG will be comprised of stores
operating under the Parisian, Carson Pirie Scott, Bergner's, Boston Store,
Herberger's, Younkers, Proffitt's and McRae's nameplates. Many senior
managers of the two companies will be executives who currently serve in
some capacity at Saks Incorporated, with the exception of the Chief
Executive Officer position at DSG, which has not yet been filled. The spin-
off was originally expected to be effective in November 2000, but was
subsequently delayed until the first half of 2001.

DSG, like many department stores, has been negatively impacted by the
limited consumer appeal of some key collections. A rapid increase in the
penetration of private label goods (expected to be about 10% of sales in
2000) has not compensated for the softness in national brands, as the
initial private label offerings were not optimum in terms of style and
quality. Saks Inc. has edited its merchandise and cleared excess apparel
inventory. However, the results of these efforts have not yet improved
comparable store sales, which fell 3.1% at DSG for the four weeks ended
October 28, 2000 and were down 2.5% for the quarter. In addition, coverage
ratios are not strong for the company's rating category, and adjusted
leverage is moderately high.

SFA Enterprises will operate the 61 Saks Fifth Avenue luxury department
stores, 46 Off 5th Outlet stores and Saks Direct (Folio catalog and The comparable store sales of SFA Enterprises, while
basically flat for October, were up 4.7% in the most recent quarter and up
6.5% of the fiscal year to date. This business has benefitted from SFA
Enterprises' recognizable retail brand name, and its reputation for luxury
and high quality. SFA Enterprises' upscale customer base attracts designers
and vendors, some of whom are prepared to offer exclusive, fashion-forward
products. There is some sales and earnings concentration in the New York
flagship store. In terms of number of stores, retail square footage and
sales, SFA Enterprises is not a large retailer. The need to protect its
premium image precludes aggressive store expansion. Since its acquisition
by Saks Incorporated, SFA Enterprises has divested under-performing stores,
and improved operating efficiency and inventory management. SFA Enterprises
also successfully edited the full line merchandise to offer more upscale
casual apparel. The Off 5th concept has also proved successful, both in
selling sourced goods and serving as an outlet for clearance merchandise.
As a result, SFA Enterprises' profit margins and leverage have strengthened
and sales have grown. However, SFA Enterprises' EBIT margin is not high for
a specialty apparel retailer, and its fixed charge coverage and adjusted
leverage ratios are more in line with highly rated speculative grade
companies. Investment to develop electronic commerce will pressure margins
in the short term. Moody's anticipates that SFA Enterprises' financial
policy will target the application of free cash flow to debt reduction.

Headquartered in Birmingham, Alabama, Saks Incorporated currently operates
361 department stores and specialty apparel stores. Saks also operates Saks
Direct, a direct response business.

SEA DOG: Brewer Restaurant Files Chapter 11; President Won't Leave Bangor
Seeking to resolve its financial woes, Sea Dog Brewing Co., filed for
Chapter 11 in Portland, Bangor Daily News reports.  President A. Scott
Johnson of Sea Dog didn't reveal any specifics during the filing.  "We're
not going to get into those kind of details," Johnson told the Bangor
Daily. "It doesn't serve any purpose to do that." Pres. Johnson strongly
intends to remain open during the reorganization, and isn't planning on
leaving Bangor.  The brewer-restaurant owns four locations statewide, in
Bangor, South Portland, Camden and Topsham.  Those restaurants will remain
open under the reorganization, Johnson said.

SIGNAL APPAREL: Finding No Buyer, Apparel Maker Considers Liquidation
Signal Apparel Co., Dow Jones reports, plans to liquidate its assets and
properties after it failed to capture a buyer for its business.  According
to a press release, the apparel maker got limited DIP financing for
salaries and other expenses acquired from the asset liquidation. The
company also stated that it fears losing its transfer agent because it can
no longer pay its fees.

Signal Apparel filed for Chapter 11 in Southern District of New York on
Sept. 22. The men's and women's apparel maker had debts of $153.8 million
over assets of $40.9 million at the time of the filing.  The company
recently obtained court approval to borrow $2.75 million from GMAC
Commercial Credit LLC.  Signal also got permission to borrow $300,000 for
salaries and other expenses.

SUN HEALTHCARE: Medicare Reimbursements Improves 2Q Financial Results
A recent SEC filing states that net losses for the second quarter results
of Sun Healthcare Group has decreased, The State and Regional reports.
Losses as of June 30 totaled to $197.1 million compared to last years
$701.74 million. Revenues jumped from $ 600.9 million to $ 620.9 million
today.  Higher Medicare and improved reimbursements contributed to the
positive results for the second quarter, Matt G. Patrick said, Sun's vice
president and treasurer. "We can expect that trend to probably hold,"
Patrick added.

Sun Healthcare filed for bankruptcy protection under Chapter 11 in October
of 1999. The company posted assets of $1.2 billion and liabilities of $2.1

TULTEX INC: Clothing Firm in Talks On $1.3MM Sale To Cohen Asset Management
Almost a year in bankruptcy, Tultex Corp. is now talking about selling its
main property in Martinsvile/Henry County, The Roanoke Times reports.
Tultex is presently negotiating with Cohen Asset Management of Beverly
Hills, California.  A sale is expected to fetch $1.3 million for Tultex's
estate.  "The ball's in their court.  We've sent them a formal contract
they are now reviewing," says Tultex CFO Cliff Campbell.  "We just like to
buy undervalued real estate and turn it around," Bradley Cohen added.  Mr.
Cohen is the president of Cohen Asset Management, who owns other properties
in Martinsville. The plans for the site to be purchased were not specified.

Due to slow responses in the clothing industry in the U.S., Tultex incurred
too much debt and that pushed it to file for bankruptcy.  When the company
filed for bankruptcy protection, Tultex had no cash and was flat broke.

U.S. TIMBERLANDS: Moody's Reviews B2 Senior Note Rating for Downgrade
Moody's Investors Service placed the B2 rating of a senior note issued
jointly and severally by U.S. Timberlands Klamath Falls, L.L.C. - an
operating company - - and its wholly-owned finance subsidiary, U.S.
Timberlands Finance Corporation, under review for possible downgrade. This
rating action is prompted by Moody's on-going concerns regarding the
operating fundamentals and adequacy of liquidity of the US Timberlands MLP
relative to distribution payouts, as well as by the uncertainties regarding
U.S. Timberlands recent announcement that it is exploring the possibility
of taking the limited partnership private.

Ratings under review for possible downgrade are:

    a) U.S. Timberlands Klamath Falls L.L.C.- B2 for senior notes, senior
         implied, and issuer rating

    b) U.S. Timberlands Finance Corporation - B2 for senior notes

Moody's notes that declining timber prices have led to a weakening of
operating cash flow at the U.S. Timberlands M.L.P.such that it has been
insufficient to cover U.S. Timberlands distributions to unitholders; also
cash at the partnership has continued to decline. Cash at the end of third
quarter was less than $2 million and the sole liquidity facility available
to the partnership is an agreement provided by an affiliate. The
partnership has announced that it is exploring options regarding taking the
MLP private. Our review will focus on the implications of continuing short-
falls in cash flow relative to distributions to public unitholders of the
U.S. Timberlands M.L.P and the potential for rising timber prices to
alleviate these pressures. We will also consider the ramifications of any
steps that management will take to restructure the M.L.P.

U.S. Timberlands Klamath Falls, L.L.C, headquartered in New York City, is
an owner of 615,000 fee acres of timberland with cutting rights on an
additional 3,000 acres

URBAN BOX: Files for Chapter 11 in New York, Sends Home 300 Workers
After filing for Chapter 11 in New York, Urban Box Office Network has
finally said goodbye to their 300 workers, reports.
Having the inability to pay its debts UBO decided to file for bankruptcy  
last week. This year, UBO may be considered as the largest layoff in
Silican Alley. Michael V. Blumenthal of Baer Marks & Upham LLP will be
representing UBO. Mr. Blumenthal was unavailable for inquiries during press
time. relates that UBO was founded in 1999 with the hope of
helping to bridge the digital divide, the gap between technology have's and
technology have-nots. A network of 11 Websites targeting urban youth, Urban
Box Office featured various artistic genres ranging from music to
performance art and literature.

URBAN BOX: Case Summary and 20 Largest Unsecured Creditors
Debtor: Urban Box Office Network, Inc.
         875 Avenue Of The Americas
         New York, NY 10001

Type of Business: The debtor is a start-up multimedia company, developing
                   cutting edge content for distribution to the
                   international urban market via cable, satellite and the

Chapter 11 Petition Date: November 2, 2000

Court: Southern District of New York

Bankruptcy Case No.: 00-42468

Judge: Jeffry H. Gallet

Debtor's Counsel: Michael V. Blumenthal, Esq.
                   Baer Marks & Upham LLP
                   805 Third Avenue
                   New York, New York 10022
                   (212) 702-5700
Total Assets: $ 9,937,000
Total Debts: $ 13,888,934

20 Largest Unsecured Creditors

Alex Dryden
1888 Emery Street, NW
Building 1900
Atlanta, GA 30318                    Trade                    $ 1,302,101

1195 West Fremont Avenue
Sunnyvale, CA 94087                  Trade                      $ 424,359

Weil, Gotshal & Manges
767 Fifth Avenue
New York, NY 10153                   Legal Fees                 $ 393,084

Irell & Manella LLP
1800 Avenue of the Stars
Los Angeles, CA 90067                Legal Fees                 $ 275,000

Research Foundation of
  Cunytrade                           Trade                      $ 209,613

Vitessa                              Trade                      $ 100,178

Quokka                               Trade                      $ 100,000

Teen Magazine                        Trade                       $ 94,000

Sitesmith, Inc.                      Trade                       $ 84,226

The Sloan Group                      Trade                       $ 78,034

M. Jones & Associates, Inc.          Trade                       $ 75,000

Aetna/US Healthcare                  Health Insurance            $ 73,003
                                       premiums of former carrier

The Princeton Group Ltd              Trade                       $ 69,890

Abacus Security                      Trade                       $ 65,328

Sun Microsystems, Inc.               Trade                       $ 62,814

WDDG.Com                             Trade                       $ 62,260

Brunswick Group Inc.                 Trade                       $ 61,797

New York Outdoor, Inc.               Trade                       $ 61,078

Screenvision Cinema
  Promotion                           Trade                       $ 55,201

The Office for Fun &
  Profit                              Trade                       $ 51,100

WISCONSIN CENTRAL: Moody's Confirms Baa2 Senior Unsecured Rating
Moody's Investors Service confirmed the Baa2 senior unsecured rating of
Wisconsin Central Transportation Corporation (Wisconsin Central) debt, but
changed the outlook to negative. The outlook change is prompted by the
company's announcement of its intent to consider a range of strategic
alternatives to maximize shareholder value which could include a sale of a
significant part of its operations, or the entire company. After
considering the possible outcomes, Moody's believes that there is a
reasonable probability of a significant transaction which could be negative
to bondholders. This is because the company's intent is to enhance
shareholder value. Moody's also notes that certain alternatives could be
positive to the debt ratings, including the sale of the company to a higher
rated entity, and the ratings implications will be considered as
developments unfold.

Ratings confirmed are:

    -- Wisconsin Central Transportation Corporation:Senior Notes, Medium
         Term Note program Baa2.

Moody's notes that Wisconsin Central's announcement is in response to a
recent effort sponsored by the former Wisconsin Central Chairman to replace
the existing management and Board of Directors and pursue alternatives to
increase shareholder value. This effort is supported by one of Wisconsin
Central's largest individual shareholders, according to a recent SEC
filing, and this shareholder together with the shares controlled by the
former Chairman amount to nearly 22% of the company's outstanding shares.

Moody's believes that a significant increase in Wisconsin Central's
leverage, including the acquisition of the company through a leveraged
buyout, is a lower probability outcome because of the significant ongoing
capital needs of running the railroad as well as the unsettled conditions
in the leveraged finance market. However, an increase in financial risk
through an acceleration of the existing share repurchase program is
possible, which could place downward pressure on the rating. The rating
implications of an outright sale of the company, if that alternative is
pursued, would depend on the financial profile of the ultimate buyer as
well as the position of the debt within any acquirors capital structure.
The existing moratorium on review of railroad mergers by the Surface
Transportation Board may limit that alternative, however.

Moody's notes that Wisconsin Central's domestic rail operations are highly
efficient, and have regularly posted one of the better operating ratios in
the industry. Wisconsin Central's success relies on an exceptional level of
customer service for revenue growth and flexibility to control its cost
structure, as its short lengths of haul compete more directly with trucks
than the large Class I railroads. The company also has significant
investment interests in TranzRail, which is the New Zealand railroad, as
well as English, Welsh & Scottish (EWS), which operates the freight rail
system in the UK. Either TranzRail, EWS or the domestic rail operation
could be sold separately, although Moody's anticipates that any proceeds
would likely be returned to shareholders. Such a transaction would weaken
Wisconsin Central's cash flow and capital base and likely to pressure the
rating down.

The Wisconsin Central Transportation Corporation, headquartered in
Rosemont, Illinois, is a holding company which operates the largest
regional railroad in the United States through four principal subsidiaries,
and has investments in railroads in New Zealand, Great Britain, and


Bond pricing, appearing in each Monday's edition of the TCR, is provided by
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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.


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