TCR_Public/001226.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, December 26, 2000, Vol. 4, No. 251

                           Headlines

ALAMOSA PCS: S&P Lowers Senior Unsecured Debt Rating to CCC
AMERICAN TISSUE: S&P Affirms B+ Ratings & Still on CreditWatch
AMERICAN TOWER: S&P Places Senior Unsecured Debt on CreditWatch
ARMSTRONG WORLD: $5,000,000 Available to Pay Critical Vendors
AVADO BRANDS: Restaurant Operator's Same-Store Sales Slide

AVIVA PETROLEUM: Reorganization Wipes-Out $3.8 Million of Debt
BROADCASTAMERICA.COM: Seeks Financial Partner to Halt Foreclosure
CHORUS LINE: Sportswear Maker Files Chapter 11 in Los Angeles
CLASSIC COMMUNICATIONS: S&P Lowers Ratings & on CreditWatch
CORAM HEALTHCARE: Judge Walrath Declines to Confirm Plan

DADE BEHRING: S&P Lowers Subordinated Debt to CCC+
DERBY CYCLE: Losses Prompt S&P to Downgrade Debt Ratings to CCC
FEDERAL MOGUL: Chase Scours for $550MM to Avert Bankruptcy Filing
FEDERAL-MOGUL: Conference Call Scheduled for Jan. 3 at 10:00 a.m.
FRIENDLY ICE: Blake Family Increases Equity Stake to 11.4%

GRAPHICS TECHNOLOGIES: Case Summary & Largest Unsecured Creditors
HANGER ORTHOPEDIC: S&P Places Debt Ratings on CreditWatch Negative
HARNISCHFEGER: UST Attacks Jay Alix's Disinterestness, Again
ICG COMMUNICATIONS: Gets More Time to File Schedules & Statements
LERNOUT & HAUSPIE: Announces $277 Million Revenue Tallying Error

LEVITZ FURNITURE: Judge Walrath Confirms Third Amended Plan
MARINER POST: American Pharmaceutical Settles Litigation Claims
MASTER GRAPHICS: Delaware Court Approves Disclosure Statement
MCDERMOTT INT'L: S&P Lowers Debt Ratings & CreditWatch Continues
MICROAGE INC: Sells MicroAge Technology Assets to CompuCom Systems

NETTEL COMM: Court to Considers Vartec's $21.4MM Bid on Jan. 8
OXFORD HEALTH: Completes Cash Tender Offer for 11% Senior Notes
PACIFICARE HEALTH: Board Appoints Howard G. Phanstiel as New CEO
PSINET INC: Court Dismisses 14 Shareholder Class Action Complaints
RENT-WAY INC: S&P Lowers Senior Bank Loan Ratings to B-

SENDMYGIFT.COM INC: Case Summary & 18 Largest Unsecured Creditors
SPORTS CLUB: Noting Challenges, S&P Places Ratings on CreditWatch
STAGE STORES: Reports $138MM Net Loss for 9 Months Ending Oct. 28
THERMATRIX INC: Sells Wahlco Engineered Assets for $1.4 Million
TOWER TECH: Seeks Chapter 11 Bankruptcy Protection in Oklahoma

TREESOURCE INDUSTRIES: Posts $8MM Loss for 6 Months Ending Oct. 31
UNITED ARTISTS: Files Join Amended Plan of Reorganization
UNITED INDUSTRIES: S&P Lowers Subordinated Debt Rating to CCC
U.S. OFFICE: S&P Junks Senior & Subordinates Credit Ratings
VENCOR, INC: To Correct Property Records of Pima County, Arizona

VIDEO UPDATE: Court Transfers Case to Judge Judith H. Wizmur
WASTE MANAGEMENT: HK & Brazil Assets Sold to Vivendi for $136MM
WHEELING-PITTSBURGH: Employs Jay Alix as Turnaround Consultants
WICKES, INC: Repurchases $37 Million of 11-5/8% Notes
WILSHIRE FINANCIAL: Seeks Court Intervention to Halt Lawsuits

YOUNG AMERICA: S&P Places Ratings on CreditWatch Pending Review

                           *********

ALAMOSA PCS: S&P Lowers Senior Unsecured Debt Rating to CCC
-----------------------------------------------------------
Standard & Poor's lowered its rating on Alamosa PCS Holdings
Inc.'s senior unsecured debt to triple-'C' from triple-'C'-plus,
following the announcement that the company has arranged a new
$305 million senior secured credit facility. The lower unsecured
debt rating reflects the increased amount of secured debt in
Alamosa's capital structure, not a weaker overall credit profile.
At the same time, Standard & Poor's assigned its single-'B'-minus
rating to Alamosa's new $305 million senior secured credit
facility.

In addition, the single-'B'-minus corporate credit rating on
Alamosa was affirmed.

The outlook remains positive.

The new credit facility will replace an existing $175 million
credit facility and fund the acquisition and buildout of the
Roberts Wireless Communications (Roberts) and Washington Oregon
Wireless (WOW) operations. The bank loan facility is rated the
same as the corporate credit rating. This facility is secured by a
pledge of 100% of the capital stock of the borrower and its
subsidiaries and a perfected first priority lien on all tangible
and intangible, present and future assets of the borrower and its
direct and indirect subsidiaries. In the event of a default or
bankruptcy, based on Standard & Poor's simulated default scenario,
it is not certain that a distressed enterprise value would be
sufficient to cover the entire loan facility.

The senior unsecured debt is rated two notches lower than the
corporate credit rating, based on Standard & Poor's expectation
that total priority obligations as a percent of total assets will
be above than 30%.

Alamosa PCS is a Sprint PCS affiliate providing personal
communication services (PCS) in an area including 8.5 million
population equivalents (pops) in the Southwest and Midwest. Pro
forma for the Roberts and WOW acquisitions, Alamosa's service area
covers 12.5 million pops.

The ratings on Alamosa reflect the company's limited operating
history, weak financials near term, and competition from larger,
better-capitalized wireless service providers. These factors are
somewhat offset by the prefunding of the company's business plan,
specific benefits derived from its relationship with Sprint PCS,
and its experienced management.

Alamosa is highly leveraged, with debt per subscriber of $2,276 at
the end of September 2000. The company is not expected to generate
positive cash flow until 2002. In addition, Alamosa PCS faces
challenges from national wireless carriers in its markets, such as
Nextel Communications Inc., VoiceStream, AT&T Wireless Services
Inc., SBC Communications Inc., and Verizon. These established
carriers are likely to use vast financial resources to protect
their market positions in their respective markets.

Nonetheless, Alamosa benefits from its affiliate agreements with
Sprint PCS, which gives the company the exclusive right to provide
PCS services under the Sprint PCS brand name in its service area.
In addition, the affiliate agreements give Alamosa the right to
receive significant roaming revenues from Sprint PCS's contiguous
markets, use Sprint PCS's distribution channels, obtain Sprint PCS
volume-based pricing from vendors, and access Sprint PCS's back-
office operations for a negotiated price.

Alamosa launched service in June 1999, and by Sept. 30, 2000, the
company had 91,443 subscribers. Alamosa's monthly average revenue
per subscriber (ARPU) without roaming revenues was $63, falling in
the upper range for the Sprint affiliates. Monthly churn during
the same period was 3.3%, which was in line with the other
affiliates but above the national average. As the company improves
coverage, churn is expected to decrease somewhat, despite the
fierce competitive environment.

OUTLOOK: POSITIVE

The prefunding of the company's business plan and the buildout of
a significant percentage of the planned covered pops provide a
moderate degree of financial flexibility. In addition, Alamosa's
operating performance was sound in its first 18 months of
operation, with coverage improvement, sustainable subscriber
growth, and healthy ARPU levels. If the company continues to
execute its business plan well and cash flow measures improve, a
rating upgrade could occur within the next two years, Standard &
Poor's said. -- CreditWire


AMERICAN TISSUE: S&P Affirms B+ Ratings & Still on CreditWatch
--------------------------------------------------------------
Standard & Poor's affirmed its ratings on American Tissue Inc. and
placed them on CreditWatch with negative implications.

Although performance for the most recently reported quarter
remains in a range appropriate for the ratings, liquidity is
tight. The company currently has only about $3 million to $4
million of availability under its bank credit line.

American Tissue affiliates are reportedly in the process of
arranging financing through the sale and leaseback of recently
acquired assets, with proceeds expected to be lent to American
Tissue. In addition, the company plans to increase its revolving
credit facility to $200 million from $145 million (with
availability remaining subject to a borrowing base). Although
Standard & Poor's assumes the company will have adequate liquidity
to meet the Jan. 15, 2001, interest payment on its $165 million
12.5% senior secured notes, the CreditWatch listing reflects the
risk that it will not, or that borrowing capacity will remain
insufficient to meet the company's ongoing needs. Hauppauge, N.Y.-
based American Tissue is a privately held manufacturer of tissue,
uncoated free sheet, and pulp. The ratings reflect its modest
position in cyclical, highly competitive pulp and paper markets,
aggressive growth via acquisitions, and highly leveraged capital
structure. RATINGS PLACED ON CREDITWATCH WITH NEGATIVE
IMPLICATIONS Corporate credit rating B+ Senior secured debt B+


AMERICAN TOWER: S&P Places Senior Unsecured Debt on CreditWatch
---------------------------------------------------------------
Standard & Poor's placed its senior unsecured debt rating on
American Tower Corp. (AMT) on CreditWatch with negative
implications, following the company's announcement that it is
acquiring the rights to sublease ALLTEL Corp.'s 2,193-tower
portfolio.

At the same time, Standard & Poor's affirmed its double-'B'-minus
corporate credit and double-'B' bank loan ratings on AMT. These
ratings are not on CreditWatch.

The CreditWatch listing of the senior unsecured debt rating
reflects the potential for additional secured bank debt to enter
the company's capital structure. AMT has expanded its credit
facility by $500 million to $2.5 billion in conjunction with the
ALLTEL transaction. The ALLTEL transaction is expected to close in
tranches starting sometime in the second quarter of 2001.
Currently, the senior unsecured notes are rated one notch below
the corporate credit rating. Standard & Poor's will review AMT's
permanent financing plans and capital structure to determine if
the senior unsecured debt rating should be lowered an additional
notch.


ARMSTRONG WORLD: $5,000,000 Available to Pay Critical Vendors
-------------------------------------------------------------
The principal raw materials used by Armstrong World Industries'
floor covering segment include, among others, plasticizers, PVC
resins, materials used to formulate coatings, paper and felt
carriers, limestone, films, pigments and inks. AWI's building
products segment uses materials such as mineral fibers and
fillers, clays, starches, recycled newsprint, perlite, fiberglass,
materials to formulate coatings, and miscellaneous specialty
chemicals. In addition to raw materials, other items that are
essential to AWI's manufacture and sale of flooring and ceiling
products include, among others, packaging, complimentary products
out-sourced to third party suppliers such as trim, molding,
laminate flooring, adhesives, wall base, ceiling grid and floor
and ceiling accessory products, advertising and materials and
services, displays, product literature, samples and other
materials used to sell, market and promote AWI's products,
essential equipment and services related to information technology
and communications technology, materials, equipment and services
needed for capital projects, and financial services used for
purchasing goods and services.

AWI does not manufacture or provide itself the foregoing essential
materials and services, but rather purchases them on open credit
worldwide from numerous vendors in the ordinary course of AWI's
business. Some essential materials and services are available in
ample quantities from multiple suppliers at competitive prices and
could be obtained and used without any significant operational
down-time if AWI were forced to switch suppliers. This motion was
said by the Debtors not to pertain to such materials, services or
suppliers. However, other essential materials and services are
supplied by critical trade vendors, without which AWI would be
unable to maintain an uninterrupted supply of quality products to
its customers. Unless AWI was given the authority to pay the
prepetition claims of critical vendors and provide postpetition
deposits, its supply of essential raw materials, out-sourced
products, packaging, sales materials, IT materials, and
materials for capital products wil lbe disrupted. Such a
disruption in AWI's highly competitive businesses could lead to a
significant loss of customers, erosion of good will, and
deterioration in the value of AWI's business. In addition, the
Debtors argued that unless AWI was authorized to pay the
prepetition claims that it owes to critical vendors, the
businesses of certain of AWI's direct and indirect subsidiaries
and affiliates, such as WAVE, may be disrupted and injured.

This is because some critical vendors sell to AWI and its
subsidiaries and affiliates under joint contracts and, without
payment by AWI, are expected to cease supply to the subsidiaries
and affiliates as well.

By this motion, the Debtors requested and obtained authorization
for AWI, if AWI determines it is feasible and appropriate, to pay
the prepetition claims of critical vendors against AWI, including
those claims of entities that AWI may hereafter determine to hold
critical vendor claims, and to post deposits with critical vendors
or other suppliers to assure payment for postpetition materials or
services. Judge Farnan imposed a $5,000,000 cap on the aggregate
amount of all payments which the Debtors can make under this
Critical Vendor Program. (Armstrong Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


AVADO BRANDS: Restaurant Operator's Same-Store Sales Slide
----------------------------------------------------------
Avado Brands, Inc. (Nasdaq: AVDO) today announced consolidated
same-store sales decreased 1.9 percent for the eight-week period
ended November 26, 2000. The Company's Hops Restaurant-Bar-Brewery
and McCormick & Schmick's brands continued positive sales
performances with increases in same-store sales of 2.9 percent and
1.9 percent, respectively. However, Don Pablo's Mexican Kitchen
was 4.2 percent negative and Canyon Cafe was 11.5 percent
negative.

Commenting on the sales comparisons, Tom E. DuPree, Jr. Chairman
and Chief Executive Officer said, "Although we are pleased with
the performance at Hops and McCormick & Schmick's, representing
more than half of our business, the sales performance so far in
the quarter at Don Pablo's has not met our expectations. Harsh
winter weather conditions in the Midwest and Northeast at the end
of November severely impacted sales in many of our system's top-
performing markets. Sales trends also were weaker than expected
leading up to and following the presidential election. Also,
starting in mid-November, Don Pablo's began performing against a
deep-discount coupon campaign that was implemented system-wide
last year through December, which generated consumer trial and
positive same-store sales. The negative trend continues in
December due to last year's coupon campaign and due to continued
winter weather conditions that have affected sales in 53 percent
of our Don Pablo's restaurants.

"Also, Don Pablo's is closely trending each week in the fourth
quarter with the Knapp-Track Mexican segment casual dining
research index, which reflects consumer concerns over genetically
engineered yellow corn used in tacos and corn-tortilla products.
Don Pablo's has now switched to white corn in 100 percent of its
restaurants and is beginning to communicate its use of superior,
non-modified white corn to consumers to alleviate concerns and
bring more customers to our restaurants.

"Given the softness of sales so far this quarter, it will be
extremely difficult to obtain the $15.0 million of EBITDA
(earnings before interest, taxes, depreciation and amortization)
targeted for the quarter, but we believe our EBITDA will be
greater than the $7.0 million generated in the fourth quarter of
1999," said Mr. DuPree.

In the fourth quarter, Avado Brands is making progress on
improving its overall financial picture by paying significant
interest payments and through the sale of various assets.

                    Fourth Quarter Highlights
     *  During the quarter, the Company made interest payments of
nearly $12.0 million, including a $5.7 million payment on December
1 and a $5.9 million payment on December 15 on its 9 3/4 percent
Senior Notes and 11 3/4 percent Senior Subordinated Notes,
respectively.

     *  Avado continues to sell various assets to pay down debt
and increase liquidity.  Following the $27.7 million sale-
leaseback transaction closed in October, the Company has sold a
Hardee's location and two parcels of land originally purchased in
the Don Pablo's and Applebee's divisions for a total of $2.4
million.

     *  Also, the Company expects to close on the sale of its 20
percent stake in United Kingdom-based Belgo Group PLC for a total
of approximately $8.0 million by the end of December.  The shares
are to be repurchased by Belgo, subject to shareholder approval.

Mr. DuPree said, "With the proceeds from these asset sales, we
will have paid not only the principal payments of $20.0 million
due in 2000 but also the April 1, 2001 principal payment of $7.5
million and part of the $7.5 million July 1, 2001 payment on our
revolving credit facility.
"And, as we look ahead to 2001, we expect the Don Pablo's brand
will return to positive same-store sales due to our stronger
operations, culinary and purchasing programs as well as marketing
efforts. Adding to our confidence for Don Pablo's is the strength
of our brand team. For the first time in more than a year, the
brand has staffed substantially all functional areas. The team is
working diligently on its business operating plan for 2001 and we
have high expectations that the team will deliver sales growth and
operational excellence.

"Next year, we are optimistic that we will continue to reduce
debt, maintain positive sales in our Hops and McCormick &
Schmick's brands and vastly improve sales in our Don Pablo's
brand. I have no doubt that steps we have taken so far this year
have gone a long way to setting the stage for an ultimate recovery
in our overall business."

Avado Brands, Inc. owns four decentralized brands, operating 17
Canyon Cafe restaurants, 139 Don Pablo's Mexican Kitchens, 74 Hops
Restaurant-Bar- Brewery restaurants and 32 McCormick & Schmick's
seafood dinnerhouses.

For additional information, the "Management Q&A" section of the
Avado Brands web site will be updated on Wednesday, December 20.
The web site is located at www.avado.com . To access the updated
information on the site, click on "Management Q&A."


AVIVA PETROLEUM: Reorganization Wipes-Out $3.8 Million of Debt
--------------------------------------------------------------
Aviva Petroleum Inc. (OTC Bulletin Board: AVVPP.OB) announced that
it has, reacquired its remaining outstanding long-term debt ($2.75
million as of September 30, 2000) from the Company's senior
secured lender in exchange for a 15% net profits interest in any
new production at Breton Sound Block 31 field. This transaction
substantially completes the restructuring of the Company and
its wholly owned subsidiary Aviva America, Inc. ("AAI").

In addition to the $2.75 million extraordinary gain that will be
recognized on the above-stated debt retirement, the Company
expects to record a $1.05 million gain resulting from the
settlement of debts in connection with the AAI reorganization plan
that became effective on November 17, 2000.  The aggregate gain of
approximately $3.8 million will be recorded in the 4th quarter of
2000.

Ron Suttill, Aviva CEO stated "We are very pleased to be able to
move forward on a debt-free basis while retaining the majority of
our U.S. interests and, currently, 22% of our Colombian
interests."

"In the U.S., the farmout of our Breton Sound deep gas prospect
has progressed, despite delays resulting from the AAI
reorganization and increased industry activity in the Gulf of
Mexico.  Our farmee has asked for, and we have granted, an
extension to March 31, 2001, of the deadline to commence
drilling of the deep gas well.  This well is expected to encounter
the natural gas prolific "Hollywood" formation which has been
confirmed by drilling on adjacent leases."

"All in all, 2000 will be an extremely good year for Aviva, and we
are very excited to be able to proceed with our exploration plans,
both in the U.S. and Colombia, in a period of favorable oil and
gas prices."


BROADCASTAMERICA.COM: Seeks Financial Partner to Halt Foreclosure
-----------------------------------------------------------------
BroadcastAmerica.com is seeking a new financial partner while it
fends off a foreclosure attempt by another investor according to
the Portland Press Herald. A hearing held in the U.S. Bankruptcy
Court in Portland may help sort out a dispute between the Portland
Internet company and a white knight investor it had hoped would
rescue it from bankruptcy proceedings. The dispute reached a
crisis when two key telecommunications vendors, RealNetworks and
Worldcom, sought to cut off service to BroadcastAmerica.
Disconnection would cut off BroadcastAmerica.com from the web,
effectively preventing it from conducting business.

Roger Clement, BroadcastAmerica's attorney, said he has been
working to set up the new financing deal with a company he
declined to name. He said the deal would give the investing
company a majority stake in BroadcastAmerica and allow the
Portland-based company to pay its bills and fend off the
foreclosure attempt. The investment would be enough "to pay all of
our bankruptcy operating payments and emerge from chapter 11 a
financially healthy company," Clement said.

BroadcastAmerica filed for protection from creditors last month,
saying it needed time to work out a financing deal with the white
knight, SurferNETWORK.com, that could keep it operating. But the
deal has turned sour and BA Funding wants a federal bankruptcy
judge to give it the assets of BroadcastAmerica. The company
claims that it has advanced BroadcastAmerica $847,000 since Nov.
7, but the Portland company has failed to make payments to
vendors, prepare for future payrolls or provide financial
documents to BA Funding. (ABI, 21-Dec-00)


CHORUS LINE: Sportswear Maker Files Chapter 11 in Los Angeles
-------------------------------------------------------------
Chorus Line Corp., which owns well-known sportswear makers Chorus
Line and Carole Little, in the U.S. Bankruptcy Court in Los
Angeles filed for chapter 11, according to a newswire report.  The
Vernon, Calif.-based company closed last month after creditors
took legal action to force the troubled firm to reorganize or
liquidate. The shutdown has thrown 300 employees out of work and
sent suppliers and lenders scrambling to grab what's left of a
company flattened by an estimated $70 million to $80 million in
debt.

Mark Brutzkus, an attorney representing three of Chorus Line's
creditors, said company management has informed him that they are
attempting to secure financing to resurrect the closed firm. If
that proves fruitless, Brutzkus said the company would likely
arrange for an orderly liquidation of the assets. (ABI, 21-Dec-00)


CLASSIC COMMUNICATIONS: S&P Lowers Ratings & on CreditWatch
-----------------------------------------------------------
Standard & Poor's lowered its ratings on Classic Communications
Inc. and Classic Cable Inc. and placed them on CreditWatch with
negative implications.

The rating actions are based on the pending departure of the
company's chief executive and chief financial officers, weak
operating results for the third quarter ended Sept. 30, 2000, and
uncertainty regarding the timing of a potential tower sale.
Standard & Poor's had anticipated that Classic would announce a
tower sale by year-end 2000, which would reduce leverage and
increase financial flexibility. Based on current operating trends,
there is little room for increased leverage within Classic's bank
covenants.

Standard & Poor's will meet with the new management team to
discuss operating trends, asset sales, and liquidity before
resolving the CreditWatch listing.

RATINGS LOWERED AND PLACED ON CREDITWATCH NEGATIVE

Classic Communications Inc.             TO           FROM
  Corporate credit rating               B            B+

Classic Cable Inc.
  Corporate credit rating               B            B+
  Subordinated debt                     CCC+         B-
  Senior secured bank loan              BB-          BB


CORAM HEALTHCARE: Judge Walrath Declines to Confirm Plan
--------------------------------------------------------
Coram Healthcare Corporation (OTCBB:CRHEQ) and Coram, Inc., failed
in their attempt to obtain confirmation of their chapter 11 plan
of reorganization from Judge Mary Walrath of the U.S. Bankruptcy
Court for the District of Delaware.  

While the specific bases on which Judge Walrath withheld
confirmation were not available at press time, as previously
related in the Troubled Company Reporter, the Official Committee
of Equity Security Holders interposed an objection to the
restructuring plan on the eve of confirmation.  

Richard Levy, Esq., and his legal team at Altheimer & Gray, put
three weighty objections before Judge Walrath, arguing that:

     (A) under the Plan, the value of the distributions to be   
         received by the creditors, including the New Secured
         Notes and 100% of the equity in Reorganized Coram, will
         exceed the full amount of their claims;

     (B) the Plan was not proposed in good faith; and

     (C) the Plan proposes to improperly release non-debtor
         parties from any claims they may be subject to in  
         connection with the Debtors' cases.

"Federal Bankruptcy Judge Mary Walrath of Delaware cited a
business relationship between Coram Chief Executive Officer Daniel
Crowley and one of the company's lenders as a possible conflict of
interest," the Denver Rocky Mountain News reported on Christmas
Eve.

"We had hoped to get approval and be out of bankruptcy by the end
of the year," Coram spokesman Kurt Davis told the Denver
newspaper.  "So it's kind of back to the drawing board.  Another
plan, I expect, will be put together by the interested parties,
and we'll go from there."  An unnamed attorney representing Coram
told the business reporter for the DRMN that "the judge did not
conclude there was a conflict of interest but said she could not
determine whether the potential for a conflict of interest
influenced the reorganization plan."  David M. Friedman, Esq., at
Kasowitz, Benson, Torres & Friedman, LLP, serves as lead counsel
to Coram.  

Coram filed voluntary petitions with the U.S. Bankruptcy Court for
the District of Delaware under Chapter 11 of the U.S. Bankruptcy
Code on August 8, 2000 with the support of the lenders holding the
Company's principal debt.  Alan B. Miller, Esq., at Weil, Gotshal
& Manges in New York represents the Debtors' Lenders: Cerberus
Partners, L.P., Foothill Capital Corporation and Goldman Sachs
Credit Partners, L.P.  An Official Committee of Unsecured
Creditors is represented by Chaim J. Fortgang, Esq., at Wachtell,
Lipton, Rosen & Katz.  

Since the Petition Date, the Company's operating subsidiaries have
maintained normal patient services and business operations and
positive cash flow and have paid trade creditors currently.  Coram
sought voluntary Chapter 11 bankruptcy protection based upon its
inability to repay $251 million in debt due or redeemable in May
2001 and upon the need to remain in compliance with the physician
ownership and referral provisions of the Omnibus Budget
Reconciliation Act of 1993, commonly known as "Stark II." Despite
positive cash flow and improved results from operations, the
Company's three-year average balance sheet equity is expected, in
the first quarter of 2001, to fall below the level that Stark II
requires to satisfy the exception for ownership of stock in
publicly-traded companies by referring physicians or their family
members. While there can be no assurances, the Company is pursuing
all available options to remain compliant with Stark II.

Denver-based Coram Healthcare, through its subsidiaries, including
all branch offices, is a national leader in providing quality home
infusion therapies and support for clinical trials, medical
product development and medical informatics.


DADE BEHRING: S&P Lowers Subordinated Debt to CCC+
--------------------------------------------------
Standard & Poor's lowered its corporate credit, subordinated debt,
and bank loan ratings for Dade Behring Inc. (See list below.)

The ratings remain on CreditWatch with negative implications,
where they were placed on Oct. 19, 2000. About $1.6 billion of
rated debt is affected.

The downgrade and continued CreditWatch listing reflect Standard &
Poor's ongoing concern regarding Dade Behring's ability to improve
its operating performance and financial flexibility.

Notwithstanding the company's prominent position in the market for
medical diagnostic instruments, profitability is being affected by
adverse foreign currency swings and declines in its coagulation
business (a result of the company's decision to discontinue its
distribution business with Allegiance in the U.S.). While Dade
Behring recently disclosed that it was currently in compliance
with financial covenants under its credit agreement, the company
also intends to seek waivers or amendments from its bank group.
Moreover, the company engaged a financial advisor to explore
various strategic alternatives to provide further liquidity, which
could include partnerships, joint ventures, mergers, acquisitions,
divestitures, sales of assets, or direct investments.

Deerfield, Ill.-based Dade Behring is a leading provider of
diagnostic instruments and related products. Standard & Poor's
will monitor near-term developments, including discussions with
its banks, before taking further rating action. -- CreditWire

RATINGS DOWNGRADED, REMAINING ON CREDITWATCH

                                To                    From
Corporate credit rating     B/Watch Neg/--        B+/Watch Neg/--
Bank loan rating            B                     B+
Subordinated debt           CCC+                  B-


DERBY CYCLE: Losses Prompt S&P to Downgrade Debt Ratings to CCC
---------------------------------------------------------------
Reflecting uncertainty about the ability of Delaware-registered
Derby Cycle Corp. to improve its operating performance, Standard &
Poor's downgraded its long-term corporate credit and senior
secured debt ratings on Derby to triple-'C' from triple-'C'-plus.
At the same time, its triple-'C' senior unsecured debt ratings on
Derby and related entity, Lyon Investments B.V., were downgraded
to double-'C' from triple-'C', placing them two notches below the
corporate credit rating. In addition, the ratings were removed
from CreditWatch, where they were placed with negative
implications on Nov. 17, 2000.  The outlook is negative.
The rating actions on Derby reflect continued weak operating
performance for the cycle manufacturer.  The negative EBITDA of $3
million recorded in the first nine months of 2000 resulted from
continuing losses in the U.K. and U.S. These losses were
compounded by management problems in Germany, which in turn led to
operating losses in the German market and necessitated write-downs
for slow-moving inventory.

Derby has recently refinanced its $30 million peak working capital
requirement for the first quarter of 2001 through a combination
of: -- Additional availability under the existing bank facilities
($11.5 million); -- An injection of new equity ($11.5 million);
and -- The conversion of $7.4 million of subordinated debt into
preference shares.

These measures should ensure funding for the crucial manufacturing
period in the first quarter of 2001 and prepare the company for
the key trading period in quarters two and three. Derby's weak
operating record in the past two years, however, means that it is
not certain that the company will successfully withstand the
continuing challenges of its operating environment. Business
challenges for Derby have included slow growing demand and price
pressures in the mature and competitive markets for bicycles,
further complicated by the weakness of the euro.

Derby's financial profile remains very weak: EBITDA to total
interest coverage dropped below 1 times (x) to 0.9x in the 12
months to July 2, 2000. Ignoring the negative effects of the $15.7
million write-downs, coverage level of about 0.7x was seen in the
first nine months to 1 October 2000. Furthermore, the debt to
EBITDA ratio was very high at about 8x in the 12 months to July 2,
2000, and 10x in the 12 months to Oct. 1, 2000, even after
adjusting for the write-downs.

Derby's senior unsecured debt has been downgraded two notches
below the corporate credit rating (CCR) at double-'C', having been
only one notch below the CCR previously. This reflects a
contraction in the size of Derby's assets, caused by asset
disposals and widening shareholder deficit. As a result, there has
been an increase in the size of priority debt relative to total
assets. OUTLOOK: NEGATIVE The outlook remains negative due to
Derby's restricted financial flexibility, as well as continuing
uncertainty regarding its trading prospects.


FEDERAL MOGUL: Chase Scours for $550MM to Avert Bankruptcy Filing
-----------------------------------------------------------------
Chase Manhattan Corp. is trying to raise $550 million for Federal-
Mogul Corp. to keep the maker of Champion spark plugs from filing
for bankruptcy, according to a newswire report. Chase arranged a
$1.75 billion credit line in 1998 for the Southfield, Mich.-based
auto-parts maker and would be among the biggest losers if mounting
asbestos claims push the company to seek court protection from
creditors. The $550 million in loans would add to the earlier
credit line, for which Federal-Mogul provided no collateral. Chase
is asking the company's other U.S. lenders to put up $200 million,
institutional investors to inject $150 million and European banks
to add a further $200 million.

Should Chase fail to raise the new money, Federal-Mogul "will have
little choice but to seek bankruptcy protection sooner rather than
later," said Premila Peters, a fixed-income analyst with KDP
Investment Advisors. As of Sept. 30, Federal-Mogul provided a
total reserve for all of its subsidiaries and businesses with
potential asbestos liability of about $1.3 billion. (ABI, 21-Dec-
00)


FEDERAL-MOGUL: Conference Call Scheduled for Jan. 3 at 10:00 a.m.
-----------------------------------------------------------------
Federal-Mogul Corporation (NYSE: FMO) will host an analyst meeting
in New York on Wednesday, January 3, 2001 from 10:00 a.m. to 11:30
a.m. EST to discuss the following items: the status of the
Company's bank credit facilities; an updated view of its asbestos
situation; and the strategic global initiatives under way for
operating performance improvement.

The meeting will be web cast live on Federal-Mogul's site,
www.federal-mogul.com . Please sign on to this site fifteen
minutes prior to the scheduled start time.  (In case of difficulty
in signing on to this site,
http://fmftp.fmo.com/public/fmowebcast.htmhas been established as  
a back-up site for this presentation.)

In addition to the live web cast there will be a listen-only
conference call. In order to receive the conference call dial-in
number, domestic callers must RSVP to 800-289-0579 and
international callers must RSVP to 719-457-2550. The confirmation
code to RSVP is 430775.  Please dial into the conference call
fifteen minutes prior to the scheduled start time.

A recording of this call will be available from 1:30 P.M. EST
Wednesday, January 3 through Tuesday, January 9, 2001. To access
this recording dial 719-457-0820 (for both domestic and
international callers), then enter 430775 as the confirmation
code.

The web cast will be retained on Federal-Mogul's web site through
January 31, 2001.

Headquartered in Southfield, Michigan, Federal-Mogul is an
automotive parts manufacturer providing innovative systems and
solutions to global customers in the automotive, small engine,
heavy duty, agricultural and industrial markets. The company was
founded in 1899.


FRIENDLY ICE: Blake Family Increases Equity Stake to 11.4%
----------------------------------------------------------
In a regulatory filing with the Securities and Exchange
Commission, S. Prestley Blake discloses that he used his personal
funds to purchase 746,800 shares of Common Stock in Friendly Ice
Cream Corporation (NYSE:FRN) for $1,550,838.80; the SPB Family
Limited Partnership used its general funds to purchase 100,000
shares of Common Stock for $206,687.25; and the Helen D. Blake
1993 Trust used its general funds to purchase 10,000 shares of
Common Stock for $19,575.00.  This gives the Blake Family an 11.4%
interests in the restaurant chain.  

"Mr. Blake is discussing with management certain aspects of the
Issuer's business including possible cost cutting measures," the
filing states.  


GRAPHICS TECHNOLOGIES: Case Summary & Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Graphics Technologies, Inc.
         6690 Shady Oak Road
         Eden Prairie MN 55344

Type of Business: Resale and distribution of computer related
                   products

Chapter 11 Petition Date: December 20, 2000

Court: District of Minnesota

Bankruptcy Case No.: 00-45398

Judge: Nancy C. Dreher

Debtor's Counsel: William I. Kampf, Esq.
                   Kampf & Associates, P.A.
                   901 Foshay Tower
                   821 Marquette Avenue
                   Minneapolis MN 55402
                   (612) 339-0522

Total Assets: $  2,176,703
Total Debts : $ 14,146,172              

20 Largest Unsecured Creditors:

Lycos
P.O. Box 6255
Boston MA 02212                                        $ 2,250,000

Matrox Graphics
1055 St. REgis Blvd
Dorval, Quebec CANADA H9P2J4                           $ 1,564,877

Viewsonic
381 Brea Canyon Rd
Walnut CA 91789                                          $ 978,231

Ingram Micro
1700 East St. Andrew Place
Santa Anna CA 92799                                      $ 696,819

3D Labs
480 Potero Avenue
Sunnyvale CA 94086                                       $ 543,351

Nikon Inc.
1300 Walt Whitman Rd
Melville NY 11747                                        $ 342,611

Tech Data Corporation
5301 Tech Data Drive
Clearwater FL 34620                                      $ 323,726

Okidata
P.O. Box 8500-1485
Philadelphia PA 19178                                    $ 286,527

Mitsubishi Electronics                                   $ 212,987

Infocus                                                  $ 205,063

Hansol Multitech                                         $ 197,102

Ziff Davis                                               $ 195,517

Hitachi America Ltd                                      $ 187,530

Consan Storage Solutions                                 $ 159,912

Perry Judd's Inc.                                        $ 155,908

GDT                                                      $ 131,250

Price Waterhouse Coopers                                 $ 117,857

Tekgraf Inc.                                             $ 115,672

Wynit Inc.                                               $ 109,944

Merisel Inc.                                             $ 106,411


HANGER ORTHOPEDIC: S&P Places Debt Ratings on CreditWatch Negative
------------------------------------------------------------------
Standard & Poor's has placed its single-'B'-plus corporate credit
and senior secured bank loan ratings and its single-'B'-minus
subordinated debt rating for Hanger Orthopedic Group Inc. on
CreditWatch with negative implications.

The CreditWatch listing reflects Standard & Poor's increasing
concern with the firm's weaker-than-expected earnings and ability
to meet bank-financing commitments. Cash flow from operations has
continued to be weaker than expected after the company's major
acquisition in 1999. Ongoing performance shortfalls would limit
Hanger's ability to meet a challenging debt-maturity schedule over
the next few years. Although Hanger could be aided by the planned
sale of assets, the credit profile may be weaker than the current
ratings indicate.

Bethesda, Md.-based Hanger Orthopedic Group Inc. is the nation's
leading provider of prosthetic and orthopedic services, with 922
practitioners located at 627 patient-care centers. The company has
been challenged by rapid growth and integration issues stemming
from its debt-financed acquisition of NovaCare O&P in July 1999.

Standard & Poor's will monitor Hanger's ability to improve its
financial flexibility over the next few months before making a
determination on the company's rating. -- CreditWire


HARNISCHFEGER: UST Attacks Jay Alix's Disinterestness, Again
------------------------------------------------------------
Based upon a deposition taken by the United States Trustee for
Region III in In re Safety-Kleen, the UST believes that Jay Alix &
Associates may not be `disinterested' under 11 U.S.C. section
101(14) and may have or represent a disqualifying conflict or hold
an adverse interest.

Furthermore, on about May 18, 2000 the UST appointed a second
Official Committee of Unsecured Creditors in the jointly
administered case of Beloit Corporation.  Allegations and
statements made by creditors included the alleged existence of
substantial inter-company claims.  Based upon the Mr. Dangremond's  
testimony, Jay Alix may also be a person in control of one of
the debtor entities and/or the managing agent of one of the debtor
entities.

In light of these, the UST requests that the Court issue an Order
in Harnischfeger's cases (1) disqualifying Jay Alix from providing
services to the Debtors in the Harnischfeger chapter 11 cases, (2)
disgorging compensation and reimbursement paid to Jay Alix, and
(3) prospectively denying compensation and reimbursement accrued
but not paid to Jay Alix as appropriate under applicable law.

In a deposition taken by the UST in In Re Safety-Kleen Corp., Mr.
Robert N. Dangremond, a Jay Alix Principal gave this testimony in
response to the questions posed by Daniel Astin, Esq.:

   Q: Has any member of Jay Alix served as an officer or director
        of Harnischfeger before the filing, within the two (2)
        years prior to the filing? [By Mr. Astin]

   A: No. [By Mr. Dangremond]

   Q: How about after the filing?

   A: Yes.

   Q: Who served, currently serves as an officer of Harniscbfeger?

   A: Myself as Chief Restructuring Ornoer and Mr. Hiltz as Chief
        Financial Officer, Mr. Cohn until he resigned worked with
        me at Harnischfeger as the controller. I was also a
        Director and remain a Director of Beloit Corporation, a
        subsidiary of Harnischfeger, 80 percent subsidiary.

   Q: How long have you been a director of Beloit Corporation?

   A: I don't recall the appointment date.

   Q: Was it before or after the filing?

   A: It was after the filing. Our engagement commenced after the
        filing.

   Q: Did you file an affidavit in Harnischfeger?

   A: Yes.

   Q: In connection with your application?

   A: Um-hmm.

   Q: Did you represent to the Court that you believed that Jay
        Alix was disinterested?

   A: Yes.

   Q: Have you supplemented that application at any time after the
        filing?

   A: No.

   Q: Did you disclose in your initial affidavit your Director
        status to the Beloit Corporation?

   A: No. In Safety-Kleen? Which affidavit?

   Q: I'm talking about Harnischfeger.

   A: No, I was - I was - after our retention, I was asked by
        Harnischfeger, after our retention, post-petition, I was
        asked to go on the board of Harnischfeger. I don't recall
        the exact date.

   Q: So that was not disclosed in your initial affidavit
        obviously?

   A: That is correct.

   Q: And you haven't filed a supplemental affidavit since that
        time, since that appointment in Harnischfeger?

   A: That's my understanding.

(Harnischfeger Bankruptcy News, Issue No. 35; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


ICG COMMUNICATIONS: Gets More Time to File Schedules & Statements
-----------------------------------------------------------------
Randall E. Curran, the Debtors' Chief Executive Officer, avers
that, because of (a) the substantial size and scope of the
Debtors' businesses, (b) the complexity of their financial
affairs, (c) the limited staffing available to perform the
required internal review of their accounts and affairs and (d) the
press of business incident to the commencement of these cases, it
was impossible to assemble, prior to the Petition Date, all of the
information necessary to complete and file their Schedules of
Assets and Liabilities and Statements of Financial Affairs
required under 11 U.S.C. Sec. 521 and Rule 1007 of the Federal
Rules of Bankruptcy Procedure. The Debtors note that they have
thousands of vendors and other potential creditors and 2200
employees. Further, they must ascertain the pertinent information,
including addresses and claim amounts, for each of these parties
to complete the Schedules and Statements on a Debtor-by-Debtor
basis.

Accordingly, the Debtors sought and obtained an extension of their
time within which to file their Schedules and Statements until
December 31, 2000. (ICG Communications Bankruptcy News, Issue No.
2; Bankruptcy Creditors' Service, Inc., 609/392-0900)


LERNOUT & HAUSPIE: Announces $277 Million Revenue Tallying Error
----------------------------------------------------------------
John Duerden, chief executive of the Lernout & Hauspie Speech
Products, NV, announced that the audit committee determined that
as much as $277 million in revenue may have been improperly
recorded in recent years. Duerden further stated that the Company
was still missing approximately $100 million from accounts in
South Korea. The Company, which filed for Chapter 11 protection
with the U.S. Bankruptcy Court on November 29th, further stated
that the audit committee recommended that ''disciplinary action''
be considered against Company co-founders Jo Lernout and Pol
Hauspie. (New Generation Research, Inc., 21-Dec-00)


LEVITZ FURNITURE: Judge Walrath Confirms Third Amended Plan
-----------------------------------------------------------
Levitz Furniture Inc. received confirmation of its third amended
chapter 11 plan of reorganization, according to a newswire report.
U.S. Bankruptcy Judge Mary F. Walrath's order clears the way for
the Boca Raton, Fla.-based furniture retailer to emerge from
bankruptcy after operating under chapter 11 for more than three
years. The third amended plan, filed Oct. 13, is based on the
formation of a new holding company, Levitz Home Furnishing Inc.,
which will own 100 percent of the stock in reorganized Levitz and
privately held Seaman Furniture Co. The combination of Levitz and
Seaman is expected to allow the two companies to streamline
certain operations.

On Oct. 31, Judge Walrath approved the plan's disclosure
statement, allowing Levitz to solicit plan approvals from its
creditors. The plan confirmation hearing was held Dec. 8. Upon
emerging from bankruptcy, Levitz expects Levitz Home Furnishing to
enter into a senior-secured borrowing line that will provide a
maximum commitment of $100 million and a junior secured debt line
of at least $47 million. Levitz and 11 affiliates filed for
chapter 11 on Sept. 5, 1997. (ABI 21-Dec-00)


MARINER POST: American Pharmaceutical Settles Litigation Claims
---------------------------------------------------------------
American Pharmaceutical Services, Inc., one of Mariner Post-Acute
Network's debtor-affiliates, sought and obtained Bankruptcy Court
approval of various compromises of affirmative claims of APS
against third parties.

  Settlement with Fidelity and Deposit Company of Maryland (F&D)

Prior to the Petition Date, Tina Flores, represented by Jeffrey I.
Sandman a/k/a Law Offices of Jeffrey I. Sandman, sued APS in the
state court of Colorado and obtained a judgment in the amount of
$207,830. APS filed a notice of appeal of the Judgment, and as a
result, a supersedeas bond, Bond, No. 4002918, in the amount of
$311,745 was posted by F&D.

The Judgment was affirmed on appeal, and APS filed a writ of
certiorari with the Colorado Supreme Court on October 4, 1999,
Case No. 99 SC 779. Before the writ could be considered, the
filing of the APS Bankruptcy Case stayed further proceedings in
the State Court Litigation. However, before relief from the
automatic stay could be granted, the Colorado Supreme Court acted
and denied APS' writ of certiorari. Upon APS' Motion for Order
Modifying Automatic Stay subsequently, the automatic stay was
lifted nunc pro tunc. As a result, the Judgment became final.

On or about March 17, 2000, and acting under a mistaken belief
that it was required to pay the Judgment as a result of the action
taken by the Colorado Supreme Court, APS paid the sum of
$281,989.75 jointly to Flores and Sandman in satisfaction of the
Judgment. Absent the APS Payment, the Judgment would have been
paid in full by F&D as surety under the Bond.

F&D has filed contingent claims for $311,745 (the face amount of
the Bond) in the APS Bankruptcy Case, designated as Claim No.
7286, and in the MPAN Bankruptcy Case, designated as Claim No.
7315.

APS therefore made demand on F&D, Flores and Sandman to return the
$281,989.75 payment by APS, asserting rights under section 549 of
the Bankruptcy Code.

Pursuant to the F&D Settlement, F&D will pay APS an amount not
less than $256,989.75 (with the final amount yet to be agreed upon
by the parties) in full settlement of the APS' Section 549 claims
against F&D, Flores and Sandman, and F&D will be allowed a
general, unsecured non-priority claim against the APS estate in
the amount of the Settlement Amount.

APS will agree not to seek the recovery of the balance of the APS
Payment from Flores and Sandman.

                   Mississippi Collection Actions

In the ordinary course of its business, APS sells pharmaceutical
products to individual nursing home facilities not owned by the
Debtors. Presently, APS has five state-court collection actions
pending against customers in Mississippi:

  Defendant    Court                   Claim For Relief
  ---------    -----                   ----------------
Kare Centre    S.D. Miss.,             $342,380.86 plus
                Southern Division;1:0  late fees of 1.5% per month
                OCV18GR                on the outstanding balance

The Courtyards Circuit Court           $44,343.51 plus
                Itawamba Co.           late fees of 134% per month
                00-004(G)I             on the outstanding balance

Sunplex         S.D. Miss.,            $340,622.12 plus
Subacute        Southern               late fees of 134% per month
Center          Division;l:0           on the outstanding balance
                OCV17GR

Plaza          Circuit Court           $45,112.78 plus
Nursing        Jackson Co.             late fees of 154% per month
Center         CI2000-                 on the outstanding balance
               0009(2)

Pleasant Hill  Circuit Court           $38,936.90 plus
               Hinds Co                late-fees of 134% per month
               251-0O-39CIV            on the outstanding balance

The Defendants are affiliated entities, ultimately under common
ownership and are represented by the same attorney. The total
amount in controversy is $811,396.17, exclusive of late charges
and attorneys' fees. Pursuant to the Mississippi Collection
Actions Settlement, the actions will be settled for $620,000,
payable over 36 months.

                The Institutional Pharmacy Action

APS was, on the Petition Date, a party to a pharmacy lease with
Institutional Pharmacy. Under the terms of the lease, APS posted a
$50,000 security deposit and was obligated to sell its inventory
and equipment to IP at the conclusion of the lease term. The lease
terminated on January 31, 2000, at which time APS surrendered the
pharmacy to IP, including the inventory and related equipment.

In an action pending in the state court in Mississippi, APS is
seeking a return of the security deposit and the value of the
inventory and equipment delivered to IP, in amounts approximating
$457,000, plus attorneys' fees, interest, costs, expenses and
punitive damages. IP has denied liability to APS and intends to
raise offsets and defenses under the terms of the contractual
agreements between the parties.

APS has agreed to settle the IP Action for $320,000, payable over
24 months in full satisfaction of its claims against IP and IP's
asserted offsets and counterclaims against APS.

                            *   *   *

APS believes it is sound business judgment to enter into the
settlements. With respect to APS' Section 549 Claim, the discount
embodied in the F&D Settlement will be only $25,000 or less, which
is less than 10% of the amount in controversy and is based
primarily on the costs of litigation and collection. APS believes
any attempt to recover the APS Payment from Flores and Sandman
would result in more complex litigation involving cross-complaints
by such parties against F&D. F&D argues that it is not a
transferee of the APS Payment or "the entity for whose benefit
such transfer was made" within the provisions of section 550 of
the Bankruptcy Code. APS discounts these arguments, but recognizes
the costs of obtaining and enforcing a judgment against F&D.

The Debtors tell Judge Walrath that with respect to the
Mississippi Collection Actions and the IP Action, APS faces both
the risks of litigation and a significant risk of non-collection
because APS has been advised that entry of judgments and
subsequent collection activity would result in the filing of
bankruptcy petitions by the Defendants.

With respect to the IP Actions, ASP says it also faces the risks
of litigation and a significant risk of non-collectivity. IP has
indicated its intention to assert defenses and setoffs based on
APS' performance under the pre-Petition date lease, including a
counterclaim in the amount of $8,000,000 based on APS' alleged
exercise of an option to acquire the facility, and its alleged
non-performance after that.

Further, APS has been advised that entry of judgment and
subsequent collection activity would result in the filing of a
bankruptcy petition by IP, and APS has reason to believe that such
defensive action could be taken by IP delaying and adversely
affecting APS' recovery. (Mariner Bankruptcy News, Issue No. 11;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


MASTER GRAPHICS: Delaware Court Approves Disclosure Statement
-------------------------------------------------------------
Master Graphics, Inc. (OTC Bulletin Board: MAGRQ) reported that on
December 19, 2000 the Bankruptcy Court has approved the adequacy
of its Disclosure Statement for its Joint Plan of Reorganization.
In addition, the Court approved the sale of three non-core
divisions valued at approximately $18 million, the proceeds of
which will be used to reduce Master Graphics' secured bank debt.

The approval of the Disclosure Statement allows Master Graphics to
commence the solicitation of votes for approval of the Plan of
Reorganization. Plan materials and ballots are expected to be
mailed this week. The deadline for returning ballots is January
17, 2001 in accordance with instructions on the ballots. A hearing
to confirm the Plan is scheduled for January 25, 2001. In
addition, the Company is currently negotiating an exit facility to
replace its existing credit facility and expects to have the new
facility in place by late January.

"We are pleased to offer a Plan which has the support of the
Official Committee of Unsecured Creditors," said Michael B. Bemis,
chairman and chief executive officer. "Due to the service-based
nature of our business, Master Graphics has attempted to
accomplish our reorganization as quickly and efficiently as
possible. With the Court's approval of the sale of three non-core
divisions and our solicitation of acceptances of the plan of
reorganization underway, Master Graphics is significantly closer
to reaching its goal of emerging from Chapter 11 as a leaner, more
competitive company."

Under the terms of the Plan, the Company's secured bank debt will
be refinanced and the general unsecured creditors of Premier
Graphics -- the Company's wholly-owned operating subsidiary --
will receive all of the common stock of in the newly reorganized
Master Graphics. Existing Master Graphics' common stock will be
cancelled.

Master Graphics is currently searching for its chief executive
officer. The Company expects to announce the permanent CEO by late
January. Michael B. Bemis has served as CEO since June 2000. Over
the next several weeks, the Company intends to announce its CEO as
well as other officers and board members.


MCDERMOTT INT'L: S&P Lowers Debt Ratings & CreditWatch Continues
----------------------------------------------------------------
Standard & Poor's lowered its ratings on McDermott International
Inc. (MII) and related entities (see list below). The companies'
consolidated debt at Sept. 30, 2000, totaled about $450 million.

All ratings remain on CreditWatch, where they were placed Feb. 22,
2000, with negative implications, in connection with unit Babcock
& Wilcox Co.'s (B&W) filing for reorganization under Chapter 11 of
the U.S. Bankruptcy Code. Rising asbestos claims at B&W
precipitated the filing.

The downgrades reflect MII's reduced liquidity resulting from
diminished unencumbered cash and investment balances, and the
risks of refinancing its impending public debt securities.
Liquidity is still adequate to handle immediate funding needs,
however, refinancing risk is significant, as the firm's $225
million, 9.375% notes mature in March 2002. Moreover, cash flow
protection will remain thin, even when operations recover, as the
firm will need to fund the growth of the business while servicing
debt.

MII is the parent company of J. Ray McDermott S.A. (JRM),
McDermott Inc., BWXT Government Group, and B&W. Although JRM is
beginning to recover, the company is not expected to be a
meaningful cash generator until 2002. McDermott's government and
industrial operations are profitable and have some growth
potential. However, their limited cash flow-generating ability in
the near term reflects the firm's reinvestment requirements of the
naval reactors program.

Potential cash flow from B&W, a leading maker of power-generating
equipment, will not be available to McDermott while the company is
in reorganization. B&W's performance for the nine-month period
ended Sept. 30, 2000, was weak, as operating income dropped 64%
from the same period in 1999, to $9.5 million. The company
experienced lower volumes and increased margin pressures.

Standard & Poor's will continue to monitor developments of the
reorganization as they unfold, as well as MII's actions to reduce
refinancing risk. A preliminary injunction is in effect,
prohibiting asbestos liability lawsuits against nonfiling
entities. Credit quality could be impaired should the injunction
be lifted and other MII units be called into the bankruptcy, or if
the firm is unsuccessful in refinancing maturing debt issues. --
CreditWire

RATINGS LOWERED, REMAINING ON CREDITWATCH NEGATIVE

                                                   RATINGS
                                               To           From

McDermott International Inc.
   Corporate credit rating                      B            BB+


McDermott Inc.
   Corporate credit rating                      B            BB+
   Senior unsecured debt rating                 B            BB+
   Sr unsecured shelf regis rating (prelim.)    B            BB+


McDermott (J. Ray) S.A.
   Corporate credit rating                      B            BB+
   Senior unsecured credit facility             B            BB+


MICROAGE INC: Sells MicroAge Technology Assets to CompuCom Systems
------------------------------------------------------------------
MicroAge Inc. announced a definitive agreement last week to sell
the assets of MicroAge Technology Services, LLC, to CompuCom
Systems Inc. (Nasdaq: CMPC), a digital infrastructure solutions
provider.

CompuCom emerged as the successful bidder in a court auction to
sell the assets of MicroAge Technology Services through
competitive bidding procedures under Section 363 of the U.S.
Bankruptcy Code. The agreement was approved by the court and the
sale is expected to close within two to three weeks.

Under the agreement, CompuCom will pay MicroAge Inc.,
approximately $96 million and will acquire the assets of MicroAge
Technology Services, LLC. After adjustments such as transaction
fees, accrued expenses, and cure payments, the sale is expected to
have a value of approximately $85.5 million.

MicroAge Technology Services provides technology infrastructure
services and technology deployment for mid- and large-sized
organizations across the United States.

MicroAge Inc., will continue to operate Pinacor Inc., a data
communications company; Quality Integration Services, LLC, a
custom integrator for light manufacturing; and Eleris, a B2B
electronic procurement solutions integrator. All are based in
Tempe.

"The sale of MicroAge Technology Services to CompuCom positions
the company to continue to provide superior services to clients
without interruption, while offering significant value for
creditors," said MicroAge Inc. Chairman and Chief Executive
Officer Jeffrey D. McKeever.

"Through this process, we have been able to obtain maximum value
for MicroAge Technology Services -- underscoring the value of an
organization built through the efforts of hard-working and
dedicated MicroAge associates. We have also taken a significant
step toward providing a better recovery in the company's voluntary
Chapter 11 case," McKeever concluded.

On April 13, 2000, MicroAge and certain of its subsidiaries
commenced a voluntary Chapter 11 proceeding in order to facilitate
the restructuring of its business. MicroAge Technology Services
LLC was one of the named subsidiaries in the proceeding.

About MicroAge Inc.

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

The company does business in more than 20 countries and offers
over 250,000 products from more than 1,000 suppliers backed by a
suite of technical, financial, logistics and account management
services. More information about MicroAge is available at
www.microage.com.


NETTEL COMM: Court to Considers Vartec's $21.4MM Bid on Jan. 8
--------------------------------------------------------------
On Jan. 8, the U.S. Bankruptcy Court in Washington, D.C. will
determine whether or not to accept the $21.4 million bid made for
the bankrupt NETtel at a bankruptcy auction earlier this month,
according to a newswire report. The winning bid came from telecom
firms Dallas-based VarTec Telecom Inc. and Lightyear
Communications of Louisvillle, Ky. The two joined in the bid for
all of NETtel's assets. The minimum acceptable bid set by the
courts was $20 million. VarTec and Lightyear said they are
interested in acquiring NETtel's network, as well as equipment and
leases. NETtel's network delivers multiple data and voice services
over a single dedicated T-1 connector, as well as some digital
subscriber lines. (ABI, 21-Dec-00)


OXFORD HEALTH: Completes Cash Tender Offer for 11% Senior Notes
---------------------------------------------------------------
Oxford Health Plans, Inc. (Nasdaq: OXHP) announced that it has
successfully completed its cash tender offer for all of its
outstanding 11% Senior Notes due 2005.

The total face amount of Senior Notes tendered was $193.5 million.  
The tender premium paid of $22.4 million together with transaction
costs and the write-off of unamortized debt costs will be
reflected as an extraordinary charge, net of tax, in the Company's
annual financial statements.

Founded in 1984, Oxford Health Plans, Inc. provides health plans
to employers and individuals in New York, New Jersey and
Connecticut, through its direct sales force, independent insurance
agents and brokers.  Oxford's services include traditional health
maintenance organizations, point-of-service plans, third party
administration of employer-funded benefit plans and Medicare
plans.


PACIFICARE HEALTH: Board Appoints Howard G. Phanstiel as New CEO
----------------------------------------------------------------
PacifiCare Health Systems, Inc. (Nasdaq: PHSY), Chairman David A.
Reed announced that the company's board of directors has approved
the appointment of Howard G. Phanstiel, 52, as President and Chief
Executive Officer.  Phanstiel has been acting president and CEO of
the $11 billion managed health care services company since October
of this year.

Phanstiel joined PacifiCare Health Systems as executive vice
president and chief financial officer in July 2000.  As CFO,
Phanstiel was responsible for PacifiCare's corporate finance and
accounting, treasury and investor relations departments.

"Howie is well-grounded in the fundamentals of managed care with
the ability to immediately lead the company," said Reed.  "He is
well-suited to lead PacifiCare in a rapidly changing health care
environment, and his experience with strategic planning and
information technology will provide added value to the company.  
We look forward to his contributions and collaboration with the
PacifiCare board.

"The board has also been impressed with Howie's recent action in
formulating both an immediate action plan to address the critical
issues confronting PacifiCare as well as his ability to work with
the senior leadership team in forging a new strategic vision for
the company. PacifiCare, like many health services companies, must
change to meet the dynamic needs of today's and tomorrow's health
care marketplace.

"During the past few months, Howie has taken steps to restore its
strength and earnings power for the near- and long-term," Reed
added.  "Last week, PacifiCare further streamlined its corporate
and regional overhead and operations in concert with changes in
its Medicare+Choice business and implemented a 6 percent reduction
in force.  Key members of the senior management team are being
added, including a new Chief Medical Officer last week, and we
expect to announce other key appointments in January."

Reed said that the company has also made a number of decisions to
further enhance its business performance, including the exit of
selected commercial and Medicare+Choice markets in Colorado and
Texas.  "These activities, along with strategies Howie and the
leadership team are forming for technology, new product
development, as well as addressing the standing issues affecting
the company, are receiving focused attention and decisive
planning.  We look forward to his ongoing progress reports to the
board and shareholders."

"Despite the challenges facing today's health care system, I
believe that PacifiCare is well-positioned for the future," said
Phanstiel.  "I look forward to working with a talented senior
management team and a very strong and dedicated employee work
force.  The tasks before us are by no means easy, but we have a
corporate culture that has proved itself both resilient and at
the same time willing to change to meet the needs of the
marketplace.

"Our role must expand beyond our traditional focus," he added.  
"We must seek new answers to the challenges confronting the
company while striving to provide affordable quality health care
services to our customers.  In that regard, I look forward to
communicating our new vision, mission and strategy to all our
stakeholders in the upcoming quarter."

Prior to joining PacifiCare, Phanstiel was chairman and CEO of ARV
Assisted Living Inc., a $150 million public assisted living
company with 60 assisted-living communities in the United States
serving 8,000 residents. Prior to that, he gained his managed care
experience as the principal financial officer of WellPoint Health
Networks, serving as executive vice president of finance and
information services.  Previously he was chairman and CEO of
Prudential Bache International Bank, managing director of
Prudential Securities and director of the Office of Management and
Budget for the U.S. Health Care Financing Administration.

Phanstiel received his Bachelor of Arts degree in political
science from Syracuse University in New York, and a master's
degree from the university's Maxwell School of Public
Administration.

PacifiCare Health Systems is one of the nation's largest managed
health care services companies.  Primary operations include
managed care products for employer groups and Medicare
beneficiaries in nine states and Guam, serving approximately four
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
http://www.pacificare.com.


PSINET INC: Court Dismisses 14 Shareholder Class Action Complaints
------------------------------------------------------------------
PSINet Inc. (Nasdaq:PSIX), announced that The United States
District Court for the Eastern District of Virginia yesterday
dismissed, in their entirety, 14 purported class action complaints
filed in November 2000 against PSINet and certain of its officers
and directors alleging securities fraud under the Securities Act
of 1934.

In an oral ruling, Judge Leonie M. Brinkema held that the
complaints had failed to allege any facts that would support the
allegations of securities fraud.

In granting the plaintiffs' leave to amend their complaints within
30 days, the Court warned plaintiffs' counsel that they had a duty
to investigate their claims to determine if they had any factual
basis before filing complaints, and that the Court would impose
sanctions on plaintiffs if they filed amended complaints that did
not have an adequate factual basis.

In her ruling, Judge Brinkema also dismissed all of the claims
under the Securities Exchange Act of 1934 that had been included
in a 15th purported class action complaint, permitting only three
counts under the Securities Act of 1933 to proceed to discovery.
In so holding, the Court made no determination as to the merits of
these claims.

A press release issued by the law firm of Berger & Montague, P.C.
earlier misleadingly reported that the Court had "sustained" the
plaintiffs' claims, the Company made a point to say in a prepared
statement.  

Headquartered in Ashburn, VA, PSINet is an Internet Super Carrier
offering global eCommerce infrastructure and a full suite of
retail and wholesale Internet services through wholly-owned PSINet
subsidiaries.

Services are provided on PSINet-owned and -operated fiber,
satellite, Web hosting and switching facilities providing direct
access in more than 800 metropolitan areas in 28 countries on five
continents. PSINet information may be obtained by e-mail at
info@psi.com, by accessing the Web site at www.psinet.com or by
calling in the U.S., 800-799-0676.


RENT-WAY INC: S&P Lowers Senior Bank Loan Ratings to B-
-------------------------------------------------------
Standard & Poor's lowered its corporate credit and senior secured
bank loan ratings on Rent-Way Inc. to single-'B'-minus from
double-'B'-minus. The ratings remain on CreditWatch with negative
implications, where they were placed Oct. 31, 2000.

Rent-Way has announced that, following an investigation into
previously reported accounting irregularities, the company has
terminated its president and controller and now expects to take a
$65 million to $75 million pretax charge on fiscal 2000 earnings.
Management had originally expected a negative impact of between
$25 million and $30 million. Although the increased charge is not
expected to have a cash impact on Rent-Way, the lower rating
reflects a lack of adequate financial controls as well as the fact
that the company's waiver with its bank lenders has become
ineffective. Rent-Way must negotiate another waiver with its bank
lenders in order to borrow funds under its revolving credit
facility and thereby maintain adequate financial flexibility.

The company must also contend with a host of class-action lawsuits
alleging that it issued materially false and misleading financial
statements. Standard & Poor's believes that a future settlement
could affect the company's financial condition. Moreover, Rent-Way
has had difficulties integrating acquired stores, and is
undertaking a program to close, merge, or sell underperforming
stores.

Standard & Poor's will continue to monitor developments as Rent-
Way tries to restore liquidity.


SENDMYGIFT.COM INC: Case Summary & 18 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Sendmygift.com, Inc.
        1400 West Broadway
        Minneapolis, MN 55411

Type of Business: (1) Former operation of e-commerce website
                   SENDMYGIFT.COM; (2) development of Internet
                   security software products; (3) owns $4+ m                
                   million of condominium apartments in Rochester,
                   MN currently subject to a purchase agreement;
                   (4) operates jewelry store in downtown  
                   Minneapolis; and (5) owns two commercial office
                   buildings in metro area valued at $2+ million.

Chapter 11 Petition Date: December 20, 2000

Bankruptcy Case No.: 00-35021
                 
Judge: Gregory F. Kishel

Debtor's Counsel: David Jon Hoiland, Esq.
                  120 So. 6th St. #1100
                  Minneapolis, MN 55402
                  (612) 339-3100

Total Assets: $ 10,232,000
Total Debts : $  5,212,000

18 Largest Unsecured Creditors:

Premier Bank
Mike Reuther, President
2151 Third Street
White Bear Lake, MN 66110
(651) 426-7800                    Mortgage             $ 1,250,000

D&D Threads
Al Baumgartner
298 Coon Rapids Blvd.
Coon Rapids, MN 55433
(763) 784-2077                    Mortgage               $ 650,000

James R. Conway
912 Cheney Avenue
Marion, OH 43302-6208             Mortgage               $ 450,000

US West/Quest                                            $ 180,000

Don Traczyk                                              $ 150,000

American Express                                         $ 102,000

Joseph A. Burnett                                         $ 75,000

Ingram Micro                                              $ 73,758

Dell Computer                                             $ 70,896

Movado Watch Co.                                          $ 19,266

The Colibri Group                                         $ 16,450

Blue Cross/Blue Shield                                    $ 13,000

Midwest Real Estate Holdings LLC                          $ 10,996

Alpha Video & Audio, INc.                                 $ 10,000

Oberman Gem                                                $ 9,800

Star Tribune                                               $ 8,000

US West/quest Interprise                                   $ 8,000

Nextel Telephones                                          $ 5,600


SPORTS CLUB: Noting Challenges, S&P Places Ratings on CreditWatch
-----------------------------------------------------------------
Standard & Poor's placed its ratings on Sports Club Co. on
CreditWatch with negative implications.

The CreditWatch placement reflects Standard & Poor's expectation
of pressure on credit measures over the near term, primarily due
to the company's expansion plans and current operating challenges.
In addition, the company's fairly aggressive expansion plans that
require high capital expenditures relative to the company's cash
flow base, have resulted in free cash flow deficits, high debt
leverage, and limited financial flexibility. Liquidity is somewhat
enhanced by existing cash balances and availability under its
current credit facilities, although additional sources of capital
may be required to help finance club development.

The Sports Club operates seven upscale health and fitness clubs,
primarily under The Sports Club/LA brand. The company's mature
clubs include The Sports Club/LA located in Los Angeles, Irvine,
and Las Vegas, and the Reebok Sports Club in New York City. So far
in 2000, The Sports Club opened three Sports Club/LA facilities,
located in Rockefeller Center and the Upper East City in New York
City, as well as Washington, D.C. The Sports Club targets a more
upscale clientele by marketing its centers as "urban country
clubs" and emphasizing personalized services and amenities, as
well as fitness and social aspects. Initiation fees and monthly
membership dues at The Sports Club are higher than those charged
by most other sports and fitness clubs, helping to protect the
brand's more exclusive image. Clubs under development are located
in San Francisco and Boston, and are expected to open in fiscal
2001.

Operating performance is being affected by the company's growth
plans and the three years typically required for a new club to
reach profitability, in addition to some operating issues related
to the opening of the Rockefeller Center club. For the past 12
months ended Sept. 30, 2000, EBITDA plus rent expense coverage of
interest plus rent expense was thin, at about 1.3 times. For the
period, total debt was about $108 million, and leverage is high
due to capital spending for growth and asset maintenance.
Financial risk is further exacerbated by discretionary cash flow
deficits and the industry's competitive environment and capital
intensity.

At Sept. 30, 2000, the company had about $11 million of capital
available under existing credit facilities and cash balances
greater than $20 million. However, liquidity is somewhat
constrained, and the company is likely to seek alternative sources
of financing to help meet its cash requirements over the near
term. Somewhat weaker than expected financial performance is also
pressuring covenants in the company's credit agreement.

Standard & Poor's will meet with management to discuss its near-
term prospects for increasing liquidity and its plans for meeting
current operating challenges to resolve the CreditWatch listing.

RATINGS PLACED ON CREDITWATCH WITH NEGATIVE IMPLICATIONS

Sports Club Co.                                     Ratings
   Corporate credit rating                              B
   Senior secured debt                                  B


STAGE STORES: Reports $138MM Net Loss for 9 Months Ending Oct. 28
-----------------------------------------------------------------
Stage Stores, Inc. announced financial results for the nine months
ended October 28, 2000, reporting a net loss of $137.98 million on
total revenues of $662.39 million. The Company has been operating
under Chapter 11 protection since June 1, 2000.  (New Generation
Research, Inc., 21-Dec-00)

Stage Stores wants to dress small-town America in big-name
fashions. The company operates over 470 department stores, mainly
small stores in rural towns throughout about 20 central, southern,
and midwestern states. Through its Stage, Bealls, and Palais Royal
stores, the company offers moderately-priced fashion apparel,
accessories, cosmetics, gifts, and footwear. Brands such as Liz
Claiborne, Calvin Klein, and NIKE make up over 85% of sales; Levi
Strauss rings up about 9% of that total. Stage Stores also sells
private-label merchandise. Shoppers can charge items on the
company's private-label credit cards. Due to sluggish sales, the
company has filed for Chapter 11 and has begun closing more than
100 locations.


THERMATRIX INC: Sells Wahlco Engineered Assets for $1.4 Million
---------------------------------------------------------------
Thermatrix Inc. (OTC: TMXIQ) announced that the sale of
substantially all of the assets of Wahlco Engineered Products,
Inc. of Lewiston, Maine, was conducted yesterday in the United
States Bankruptcy Court, Central District of California pursuant
to a previously filed Motion.

The Court approved a winning bid of $1.4 million that is subject
to the usual conditions of closing. Closing is expected to occur
not later than January 15, 2001 with an effective date of December
31, 2000.  The acquiring party, comprised of the current WEP
management team, stated their intention to continue to operate the
business as it is currently configured without interruption.

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


TOWER TECH: Seeks Chapter 11 Bankruptcy Protection in Oklahoma
--------------------------------------------------------------
Tower Tech filed for chapter 11 bankruptcy protection in Oklahoma
City, according to a newswire report. The Oklahoma City-based
company said it hopes to continue operations while paying
suppliers on normal terms for goods delivered and services
provided after the chapter 11 filing. "The company has not been
able to meet its financial obligations for some time now and has
attempted to restructure its finances out of court," said Chief
Executive Robert Brink. "Unfortunately, the company's debt load
has prevented it from raising the amount of new funding needed to
accomplish an out-of- court restructuring. Given this, filing for
protection under chapter 11 was the best option."

Tower Tech reported that its total liabilities numbered $34.79
million on Aug. 31, with current maturities of long-term debt
accounting for $23.66 million. Current assets totaled $10.2
million, while the firm's total assets were $30.08 million. Tower
Tech said that it expects to receive debtor-in-possession (DIP)
financing from an undisclosed investor group that has provided
financing to the company on previous occasions. (ABI, 21-Dec-00)


TREESOURCE INDUSTRIES: Posts $8MM Loss for 6 Months Ending Oct. 31
------------------------------------------------------------------
TreeSource Industries, Inc. announced financial results for the
six months ended October 31, 2000, reporting a net loss of $7.8
million on total revenues of $86.2 million. The Company has been
operating under Chapter 11 protection since September 27, 1999.
(New Generation Research, Inc., 21-Dec-00)

TreeSource Industries doesn't own much timber, but it makes a lot
of lumber. Formerly known as WTD Industries, the company buys
trees from timber producers and turns them into softwood lumber
(Douglas fir, hemlock, white fir) and wood by-products. Its
primary lumber customers include distributors, wholesalers, and
retailers. TreeSource's other products include wood chips, which
it sells to pulp and paper manufacturers, and hardwood lumber,
which is produced for the furniture and cabinet markets. Larry
Black, owner of Quinault Logging Company, owns 29% of TreeSource.
Low lumber prices have forced TreeSource to file for Chapter 11
bankruptcy protection.


UNITED ARTISTS: Files Join Amended Plan of Reorganization
---------------------------------------------------------
United Artists Theater Company filed a Joint First Amended Plan of
Reorganization and related Disclosure Statement with the U.S.
Bankruptcy Court. The Company, which has been operating under
Chapter 11 protection since September 5th, then filed a Second
Amended Plan of Reorganization and related Disclosure Statement
with the Court on December 8th.  (New Generation Research, Inc.,
21-Dec-00)

One of the largest movie theater chains in the US, the operating
subsidiary of United Artists Theatre Company (88%-owned by Merrill
Lynch) runs more than 1,900 screens in about 270 theaters in 22
states. Its Satellite Theatre Network uses movie theaters during
off-hours for activities such as seminars and corporate
conferences. UATC is being crushed by debt from its renovation and
expansion efforts designed to keep up with the megaplexes of rival
theater chains. Now in Chapter 11 bankruptcy, the company plans to
sell or close about 20% of its theaters in 2000.


UNITED INDUSTRIES: S&P Lowers Subordinated Debt Rating to CCC
-------------------------------------------------------------
Standard & Poor's lowered its corporate credit and bank loan
ratings for United Industries Corp. to single-'B' from single-'B'-
plus, and its subordinated debt rating to triple-'C'-plus from
single-'B'-minus. The ratings are removed from CreditWatch, where
they were placed Aug. 9, 2000, reflecting concerns about the
ongoing business challenges facing the company, and the resulting
weak financial results.

The outlook is stable.

About $375 million of total debt was outstanding on Sept. 30,
2000.

The ratings action reflects Standard & Poor's expectations that
credit measures will remain weak over the near term, at levels
that are not consistent with the single-'B'-plus corporate credit
rating. Operating performance in 2000 has been negatively impacted
by: unfavorable weather conditions in some parts of the U.S.; the
loss of the lower-margin Kmart Kgro private label manufacturing
contract; a product mix shift at Home Depot from value to more
opening price point (OPP) brands; and lost sales and increased
costs associated with the voluntary phase out of retail sales of
Dursban between the Enviromental Protection Agency and the
manufacturer by December 2001. The company's recent amendments to
its bank credit facilities provided some covenant relief, reduced
the availability on its revolving credit agreement to $80 million
from $110 million, yet increased the company's borrowing costs.
Financial sponsor T.H. Lee provided a $15 million equity
contribution in the form of preferred stock, which was used to
reduce bank debt outstanding.

Ratings reflect United Industries Corp.'s high debt leverage and
continued weak cash flow coverage measures, seasonal business
characteristics, customer concentration, and competitive industry
dynamics. These factors are somewhat offset by the company's solid
market positions in the home center and mass merchandiser
channels, strong operating margins, and favorable industry growth
prospects.

St. Louis, Mo.-based United Industries manufactures and markets
consumer lawn and garden pesticides, household insecticides, and
water soluble fertilizers. Within the growing $2.7 billion North
American lawn and garden pesticides and household insecticides
markets, the company participates in the value and OPP categories.
There is some customer concentration, as four key retail customers
together account for just more than 70% of sales. However, the
company benefits from its ownership of the store brands at two of
these customers. United Industries is well positioned within its
product categories with the number-one position in home centers,
and number-two position within the mass merchandiser channel.
Industry dynamics remain competitive, with the company's primary
competition coming from premium manufacturer The Scotts Co.
However, United Industries' low cost structure and strong
distribution network enable it to provide a higher margin to
retailers, as well as generate consistently high operating margins
close to 20%. Business is highly seasonal, with about 70% of sales
and profitability occurring in the first half of the calendar
year, and sales also can be negatively impacted by unfavorable
weather patterns.

Future growth is expected to come from favorable demographics,
continued rapid new store growth within the home center and mass
merchandiser channels, new product introductions, and smaller
acquisitions. Leverage remains high and credit measures are weak.
For the last 12 months ended Sept. 30, 2000, total debt to EBITDA
was about 7 times (x), and EBITDA coverage of cash interest was
about 1.3x. Standard & Poor's expects credit measures will remain
in these areas for the full year and will only show some slight
improvement in 2001. Financial flexibility is afforded by the
company's $80 million revolving credit facility.

OUTLOOK: STABLE

Standard & Poor's expects that anticipated improvements in
operating performance would enable United Industries to sustain
credit measures appropriate for the revised rating category over
the outlook period. -- CreditWire


U.S. OFFICE: S&P Junks Senior & Subordinates Credit Ratings
-----------------------------------------------------------
Standard & Poor's lowered its corporate credit and senior secured
bank loan ratings on U.S. Office Products Co. (USOP) to triple-
'C'-minus from triple-'C'-plus. Standard & Poor's also lowered its
subordinated debt rating on the company to single-'C' from triple-
'C'-minus.

The outlook is negative.

The downgrade is based on Standard & Poor's expectation that the
company is unlikely to meet required term loan payments of $35
million by Jan. 8, 2001, and $150 million by Jan. 29, 2001. The
company has little cash and is not expected to be able to raise
funds through a debt refinancing. Therefore, USOP must rely on
asset sales or obtain a waiver from its banks to avoid a possible
bankruptcy filing. Standard & Poor's believes it is highly
unlikely that the company will be able to generate enough cash
from asset sales in time to meet these requirements.

USOP's operating performance has been dismal, with only $14
million of EBITDA generated in the second quarter ended October
2000, compared with $30 million in the same period in 1999. On a
trailing 12-month basis, EBITDA fell well below interest expense,
and this trend is not expected to reverse in the near term.

OUTLOOK: NEGATIVE

While Standard & Poor's believes the banks have supported USOP's
efforts to sell assets and reorganize the business, there is no
assurance that this will continue, nor is there any assurance that
the banks will waive or amend covenants and repayment schedules.


VENCOR, INC: To Correct Property Records of Pima County, Arizona
----------------------------------------------------------------
To correct real property records tainted with a series of
inadvertent entries of legal description mixing up an Assisted
Living Facility and a Nursing Home on a parcel of real property
located in the real property records of Pima County, Arizona (the
Record), the Debtors ask Judge Walrath to approve the Stipulation
and Order among:

   * Vencor;

   * Morgan Guaranty Trust Company of New York as Collateral Agent
      under the Pre-Petition Credit Agreement, dated as of April
      29, 1998 by and among Vencor Operating, Inc., Vencor
      Healthcare, Inc. (now known as Vencor, Inc.), the Lenders
      party, the Agents party, Morgan Guaranty Trust Company of
      New York, and Bank of America, N.A., as successor to
      Nationsbank N.A.;

   * Ventas, Inc., on behalf of itself and Ventas Realty, Limited
      Partnership;

   * Atria, Inc., formerly known as Atria Communities, Inc.;

   * A98 Senior LLC; and

   * The Royal Bank of Scotland, plc.

On August 23, 1993, First Healthcare Corporation, which was merged
into Ventas, Inc. on September 30, 1998, obtained and recorded in
the real property records of Pima County, Arizona (the Record) a
fee interest in a certain parcel of real property and all
improvements thereon in Pima County, Arizona. The improvements to
the Parcel include an Assisted Living Facility and a Nursing Home.
On August 9, 1996, FHC delivered a deed to Atria but the deed
delivered and recorded in the Record inadvertently contained a
legal description which described the Nursing Home instead of the
Assisted Living Facility.

Thereafter, inadvertent entries were made involving the Assisted
Living Facility and the Nursing Home in various transactions:

   -- on April 30, 1998, as a part of the 1998 Spin Off, Ventas
leased the Nursing Home and the related real property to Vencor,
Inc. and Vencor Operating, Inc.;

   -- on April 30, 1998, a leasehold mortgage and corresponding
UCCs were executed by Vencor Operating, Inc. for the benefit of
MGTC, as collateral agent, with respect to the leasehold interest
created pursuant to the Lease;

   -- on September 30, 1998, in a transaction between Ventas,
Inc., as successor in interest to FHC, and VRLP, Ventas, Inc.
delivered a deed to VRLP and recorded such deed in the Record on
December 21, 1998 (the VRLP Transaction).

   -- on December 23, 1998, in a transaction between Atria and
A98, Atria delivered a deed to A98 and recorded such deed in the
Record on January 13, 1999 (the A98 Transaction).

   -- on December 23, 1998, A98 executed a deed of trust,
assignment of leases and rents, UCCs and related financing
documents in favor of Archon Financial, L.P. (the A98 Financing).

Vencor Nursing Centers West, LLC, a Delaware limited liability
corporation, is currently in possession of the Nursing Home as
subtenant to Vencor, Inc. and Vencor Operating Inc., each of whom
are tenants to Ventas.

The Parties agree that it is in the interests of all of the
Parties to correct or reform the Record and Documents concerned to
ensure that the original intent of the parties is effectuated.
Each Party shall place in escrow the appropriate corrective
documents to implement the Corrective Actions no later than the
first business day that is 20 days after the Stipulation and Order
is approved. Such corrective documents shall then be released and,
if applicable, recorded in the Record or other applicable public
records in accordance with the Parties' joint instructions.

The Bank of America, N.A., as Administrative Agent and Issuing
Bank under the Amended and Restated Credit, Security, Guaranty and
Pledge Agreement, has acknowledged that Ventas has delivered into
escrow the Facility 436 Mortgage Documents, which documents
provide for liens and security interests in the Nursing Home and
the related real property and not to the Assisted Living Facility
and the related real property. Upon consummation of the
transactions described in the Stipulation and Order and the
release from escrow of the Facility 436 Mortgage Documents, Bank
of America, N.A., will hold liens and security interests relative
to the Nursing Home and the related real property and not relative
to the Assisted Living Facility and the related real property.

If approved by the Court, the Stipulation and Order also provides
that the parties will have authority to cause the County Recorder
of Pima County, Arizona to record a certified copy of the
Stipulation and Order in the Record. (Vencor Bankruptcy News,
Issue No. 22; Bankruptcy Creditors' Service, Inc., 609/392-0900)


VIDEO UPDATE: Court Transfers Case to Judge Judith H. Wizmur
------------------------------------------------------------
According to U.S. Bankruptcy Court dockets, the Bankruptcy Court
for the District of Delaware reassigned the Video Update, Inc.,
chapter 11 case to Judge Judith H. Wizmur from Judge Peter J.
Walsh.  The Company has been operating under Chapter 11 protection
since September 18, 2000. (New Generation Research, Inc., 21-Dec-
00)

A leading US and Canadian video retailer, the company runs about
650 stores (about 90% are company-owned; the rest are franchised).
Its stores offer rentals of videocassettes, VCRs, video games,
DVDs, and game consoles. Video Update also sells candy, blank
videos, and used videos and video games. The company has grown
through acquisitions, but it has struggled to digest the Moovies
chain (about 240 stores). The money-losing company, which lost
nearly $1 for every $2 it made in fiscal 1999, has been closing
underperforming locations.


WASTE MANAGEMENT: HK & Brazil Assets Sold to Vivendi for $136MM
---------------------------------------------------------------
Waste Management Inc. (NYSE:WMI) announced that its wholly owned
subsidiaries have completed the sale of its waste services
operations in Hong Kong and Brazil to waste services subsidiaries
of Vivendi Environnement S.A. for $136 million.

The sales include all of the Company's hazardous and solid waste
operations in both Hong Kong and Brazil and stem from Waste
Management's strategy to re-focus the Company on its North
American waste operations. Over the past year, Waste Management
has implemented a plan to divest international and non-core North
American assets. The Company noted that this sale brings the total
proceeds received from the divestiture program to approximately
$2.5 billion, and essentially completes the sale of its
international assets.

A. Maurice Myers, president and chief executive officer of Waste
Management, said: "With our stated goal of obtaining total
proceeds of $2.75 billion from the divestiture program, we have
now collected in excess of 90 percent of that targeted amount. The
remaining proceeds will largely come from the sale of some non-
core domestic assets, such as the previously announced sale of
several independent power plants. The asset sales have gone as we
expected and will allow the Company to move into 2001 focused on
its core North American solid waste business."

Waste Management Inc. is its industry's leading provider of
comprehensive waste management services. Based in Houston, the
Company serves municipal, commercial, industrial and residential
customers throughout North America.


WHEELING-PITTSBURGH: Employs Jay Alix as Turnaround Consultants
---------------------------------------------------------------
Wheeling-Pittsburgh Corporation and its debtor-affiliates ask
Judge Bodoh for authorization to employ the crisis management and
turnaround consulting firm of Jay Alix and Associates of
Southfield, Michigan, as restructuring consultants in these cases.
After consideration of the facts shown and arguments of counsel,
Judge Bodoh granted the Application.

Jay Alix will be performing the following services for the
Debtors:

   (a) Reviewing the Debtors' cash systems with a focus on
improving the Debtors' processes for cash receipts and
disbursements;

   (b) Reviewing the Debtors' business plan and projections in
conjunction with establishing the Debtors' post-filing cash
requirements;

   (c) Assisting the Debtors in negotiations with lenders;

   (d) Assisting the Debtors in improving the quality and
relevance of information that is reported about each Debtor both
internally and externally;

   (e) Assisting in the development and implementation of a vendor
management program consistent with the business plan;

   (f) Assisting in evaluating and implementing alternatives
related to certain non-core assets of the Debtors;

   (g) Assisting management and legal counsel in developing
processes to manage executory contracts and pre- and post-petition
liability evaluations and rendering assistance in connection with
reports requested by the Court;

   (h) Assisting the Debtors in developing and implementing a plan
of reorganization; and

   (i) Conducting such financial and operational reviews and
analyses of the Debtors as Jay Alix and the Debtors shall deem
appropriate and feasible.

On behalf of the firm, Robert N. Dangremond disclosed that the
firm does not hold or represent any interest adverse to these
estates and is a disinterested party. However, in the interests of
full disclosure, Mr. Dangremond states that Jay Alix has in the
past provided services to, and likely in the future will continue
to provide services to, creditors or equity security holders of
the Debtors in matters unrelated to these cases.

Mr. Dangremond discloses that Jay Alix, a principal in the firm,
is also the Managing Principal of Questor Partners Fund LP and
Questor Partners Fund II LP, a $300 million and $460 million fund
respectively, both investing in special situations and under-
performing companies. PricewaterhouseCoopers is the auditor for
funds related to these entities and in which Jay Alix and other
members of the firm hold equity interests. Citicorp Securities,
Inc., Citibank, N.A., and Citicorp USA are investors in these
funds, as is National City Bank and National City Bank Finance,
Inc., The Chase Manhattan Bank, and Saloman Smith Barney Inc.

Jay Alix, through Mr. Dangremond, also discloses that Bank One,
N.A. is a client of Jay Alix in matters unrelated to these cases.
The firm has performed services for Merrill Lynch Debt Strategies
Portfolio as a creditor in an unrelated bankruptcy proceeding.
Conseco Life Insurance Company is likewise a Jay Alix states that
its hourly rates are set at a level designed to fairly compensate
the firm for the work of its professionals and to cover fixed and
routine overhead expenses. The current hourly rates of the
principals, associates, accountants, and consultants who are
expected to render services to the Debtors in connection with
these cases are:

        Robert N. Dangremond Principal       $ 575
        Mark Toney Principal                 $ 530
        Senior Associates                    $ 360-495
        Associates                           $ 265-375
        Accountants and consultants          $ 190-290

Mr. Dangremond discloses that Jay Alix received from the Debtors a
retainer in the amount of $150,000 to be applied to time and
charges specific to the engagement. In addition, Jay Alix has been
paid $381,611.19 in compensation for services rendered and related
expenses. No amounts are owed for prepetition services.

In addition to these fees, the Debtors have agreed to pay Jay Alix
a Plan Confirmation Bonus. If the Debtors obtain confirmation of a
plan, the Debtors have agreed to pay Jay Alix a contingent success
fee of $2,500,000 upon confirmation or sale of substantially all
of the Debtors' assets. (Wheeling-Pittsburgh Bankruptcy News,
Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-0900)


WICKES, INC: Repurchases $37 Million of 11-5/8% Notes
-----------------------------------------------------
Wickes Inc. (Nasdaq: WIKS) announced the expiration of its offer
to purchase for cash and solicitation of consents with respect to
its outstanding $100 million principal amount of 11-5/8% Senior
Subordinated Notes due 2003 and the acceptance of all tendered
Notes for payment.

The offer expired at 12:00 midnight, New York City time, on
December 20, 2000. As of the expiration date, the Depositary for
the offer had received tenders with respect to $36.763 million
aggregate principal amount of Notes.

The Company has accepted all of the tendered Notes for payment.
Settlement of the offer and payment for the Notes is scheduled to
occur on Tuesday, December 26, 2000.

Commenting on the transaction, J. Steven Wilson, chairman and
chief executive officer of Wickes Inc., stated, "We are very
pleased to have completed this tender offer and to have provided
liquidity for many of our Noteholders. While economic and lumber
market conditions have recently challenged the Company, management
remains committed to achieving each of our Build 2003 objectives."
In accordance with the terms of the Offer, Holders of Notes that
were validly tendered and not withdrawn prior to 5:00 p.m., New
York City time, on December 12, 2000, will receive the purchase
price of $605.00 per $1,000, plus a consent payment of $30.00 per
$1,000, plus accrued and unpaid interest to the settlement date.
Holders of Notes that were validly tendered and not withdrawn
after 5:00 p.m., New York City time, on December 12, 2000, and
prior to the expiration date, will receive the purchase price of
$605.00 per $1,000, plus accrued and unpaid interest to the
settlement date.

Questions or requests for assistance concerning the offer should
be directed to Banc of America Securities LLC, the exclusive
Dealer Manager for the offer, at 704-386-1758 (collect), or 888-
292-0070 (toll free). Requests for documents may be directed to
the information agent, D.F. King & Co., Inc., at 800-488-8095
(toll free), or 212-269-5550 (banks and brokers - collect). The
depositary agent was Bankers Trust Company.

Wickes Inc. is a leading distributor of building materials and
manufacturer of value-added building components in the United
States, serving primarily building and remodeling professionals.
Wickes Inc.'s web site, Error! Bookmark not defined. offers a full
range of valuable services about the building materials and
construction industry. The company is traded on the Nasdaq stock
market under the stock symbol WIKS


WILSHIRE FINANCIAL: Seeks Court Intervention to Halt Lawsuits
-------------------------------------------------------------
Wilshire Financial Services Group of Portland has asked a
bankruptcy judge in Delaware to block lawsuits against it by labor
union trust funds, according to a newswire report. Wilshire, which
reorganized in a chapter 11 bankruptcy in June 1999, said the
union trusts are trying to collect on debts that were discharged
in the bankruptcy and that the lawsuits violate the court's
prohibition on further claims. Wilshire Financial contends in the
Dec. 8 filing that Capital Consultants officials signed documents
on behalf of its union clients pledging not to pursue claims
against Wilshire Financial or anyone else connected with the
company's reorganization.

Despite the ban imposed by the bankruptcy court, 28 union trusts
in recent weeks have filed three lawsuits against Wilshire
Financial, as well as against Capital Consultants and dozens of
connected companies and executives. Capital Consultants collapsed
in September as the U.S. Labor Department and the Securities and
Exchange Commission filed fraud suits in federal court in Portland
accusing the company of trying to conceal the loss of more than
$200 million of client money.

Capital Consultants' stake in Wilshire Financial, which it can
claim in 2001, is worth about $9.9 million. Kenneth R. Heitz, an
attorney representing Wilshire Financial, said that Capital
Consultants got the best deal available to it and that he believes
the trust fund's stake in Wilshire Financial could increase in
value. The only other alternative for the creditors, he said, was
to force Wilshire out of business and liquidate the assets. (ABI,
21-Dec-00)


YOUNG AMERICA: S&P Places Ratings on CreditWatch Pending Review
---------------------------------------------------------------
Standard & Poor's placed its single-'B' corporate credit, triple-
'C'-plus subordinated debt, and single-'B'-plus bank loan ratings
for Young America Corp. on CreditWatch with negative implications.

The CreditWatch listing reflects Young America's weak operating
results and their impact on the overall financial profile.
Operating cash flow to interest is in the low 1 times (x) area,
and debt to operating cash flow is in the low 8x area. In
addition, the company's $10 million credit facility (no borrowings
outstanding) matures in March 2001.

Standard & Poor's will review its ratings on Young America after
evaluating management's operating and financial strategies.
Headquartered in Chanhassen, Minn., the company provides a wide
range of consumer interaction processing services to large
consumer product and consumer service companies.





                           *********

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                           *********

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Troubled Company Reporter is a daily newsletter, co-published by
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Copyright 2000. All rights reserved. ISSN 1520-9474.

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