TCR_Public/001227.MBX         T R O U B L E D   C O M P A N Y   R E P O R T E R

          Wednesday, December 27, 2000, Vol. 4, No. 252


ALBERTSON'S INC: S&P Affirms Short-Term Ratings; Outlook Negative
AMERICAN AIRCARRIERS: Nasdaq Decides to Delist Shares
ARMSTRONG WORLD: Pays Common Carrier & Warehouse Charge Claims
ASCHE TRANSPORTATION: Trucking Business Files Chapter 7 Bankruptcy
BRIGGS & STRATTON: Moody's Confirms Baa2 Rating; Outlook Negative

CROWN CORK: Announces Promotion of T.J. Kreider to Corporate VP
DYNEX CAPITAL: Releases Update on California Investment Merger
FINOVA GROUP: Leucadia National Signs Agreement to Invest $350MM
GEAC COMPUTER: $225MM Credit Facility Expires & Talks Underway
GLOBE MANUFACTURING: Spandex-Maker Faces Involuntary Petition

GRAPHICS TECHNOLOGIES: Files Chapter 11 Petition in Minnesota
HARNISCHFEGER: Beloit Committee Says March Confirmation Impossible
ICG COMMUNICATIONS: Creditors Convene for First Meeting on Jan. 12
INNOVATIVE CLINICAL: Releases 1st Post-Emergence Financial Report
LAIDLAW INC: Bottom-Line Loss for Fiscal 2000 Tops $2.2 Billion

LUCENT TECHNOLOGIES: S&P Lower Ratings; CreditWatch Still Negative
MEDITRUST COMPANIES: No Dividend Will be Paid on Common Stock
NEWCOR, INC: Truck Market Decline Takes Toll This Year
NORTHROP/LITTON: Moody's Reviewing Debt Ratings for Downgrade
OUTBOARD MARINE: Boat Maker Proposes Asset Sale Under Chapter 11

OUTBOARD MARINE: Moody's Downgrades Senior Notes to C
PILGRIM AMERICA: S&P Puts CBO I Class B Ratings on Negative Watch
POTLATCH CORP: Rise in Debtload Prompts Moody's to Start Review
PRIME RETAIL: Financing & Asset Sales Provides $174 Million
PSINET, INC: Ex-Metamor Shareholders Renew Class Action Suits

RELIANCE GROUP: Ichan's Dec. 21 Letter to the Board of Directors
SOTHEBY'S HOLDINGS: Moody's Cuts Senior Notes to Ba2, For Now
SOUTHERN MINERAL: Executes Merger Agreement with PetroCorp Inc.
U.S. TRUCKING: Posts $27 Million Loss through Sept. 30, 2000
VENCOR, INC: Proposes New Workers' Compensation Insurance Program

WHEELING-PITTSBURGH: Hires PwC Securities as Financial Advisor

* Meetings, Conferences and Seminars


ALBERTSON'S INC: S&P Affirms Short-Term Ratings; Outlook Negative
Standard & Poor's lowered its long-term ratings on Albertson's
Inc. and American Stores Co. and removed the ratings from
CreditWatch negative (see list below), where they had been placed
Dec. 6, 2000.

Standard & Poor's also affirmed the short-term ratings on
Albertson's (see list). These ratings were not on CreditWatch.
The outlook is negative.

The downgrade is based on continued operating difficulties and a
much more aggressive financial policy, which together are expected
to result in weakened credit protection.

Albertson's performance since its acquisition of American Stores
Co. has been disappointing, reflecting both integration issues and
problems in its core business. Increased competition from
traditional supermarkets and supercenters has compounded the
challenge of operating the combined company. Moreover, the company
has expanded its share repurchase program to $1.5 billion from
$500 million, to be completed at management's discretion through
Dec. 6, 2001. The share buyback is expected to result in higher
debt levels and diminished cash flow protection. Through the third
quarter of fiscal 2000, the company had repurchased $350 million
under the program.

A difficult sales environment and the company's slow response to
increased price competition are resulting in less improvement in
sales and profitability than had been anticipated. The company
still needs to regain customers that may have been lost in the
conversion of California's Lucky Stores to the Albertson's format,
and costs for the combined company are higher than originally
expected. For the third quarter ended Nov. 2, 2000, same-store
sales fell 0.2% versus the company's goal of positive 3.0%, and
operating profit grew only 4.0%. Operating profit was flat for the
first nine months of 2000, and the fourth quarter is expected to
be disappointing. To address the operating issues, management
announced a strategic plan in mid-2000 to grow market share
through increased promotional activity, to lower inventory by $500
million in 2000, to reduce costs by $250 million in 2001, and to
lower capital spending by $500 million in 2001 and 2002. Although
the company is on track to reduce inventory as planned, sales
results have not yet shown the gains anticipated, and cost
reductions are proving more difficult to implement. Plans now call
for a total capital spending reduction of $1.5 billion over the
next five years, with a focus on remodels and stores in existing

The ratings are supported by Albertson's position as one of the
leading operators in the U.S. supermarket industry and its broad
geographic diversity. The 1999 purchase of American Stores made
Albertson's the second-largest supermarket operator in the U.S.,
behind Kroger Co. The combined company operates nearly 2,500
stores in 37 states throughout the Midwest, West, South, and East.

Sales totaled $37.5 billion in 1999. The acquisition provided
entry into Philadelphia and Chicago and increased share in
northern and southern California. In addition, as a result of the
acquisition, Albertson's entered the stand-alone drug store
business, which has strong growth potential and complements the
company's core supermarket and combination-store operations.
Total debt to capital is expected to rise to more than 60% pro
forma for the share repurchase, up from 55% at the time of the
American Stores acquisition. EBITDA interest coverage could fall
below 5.0 times (x) including the share repurchase in fiscal 2001,
down from 5.6x in 1999 and 6.4x in 1998. Return on permanent
capital is satisfactory at about 14%.


The company will be challenged to build its market position and
improve profitability in the face of intense competition.
Albertson's must also complete its integration of American Stores,
and successfully manage a larger, more complex company involving
various store formats. Moreover, Albertson's more aggressive share
repurchase may divert funds that could be used for investment in
the business or debt reduction. Ratings could be lowered if
management is unable to meet its operating and financial goals
over the next few years, Standard & Poor's said. -- CreditWire


Albertson's Inc.                       TO           FROM
  Long-term corporate credit rating    BBB+          A-
  Senior unsecured debt                BBB+          A-
  Senior unsecured bank loan           BBB+          A-
American Stores Co.
  Corporate credit rating              BBB+          A-
  Senior unsecured debt                BBB+          A-
  Shelf registration:
   Senior unsecured debt       prelim. BBB+  prelim. A-
   Subordinated debt           prelim. BBB   prelim. BBB+


Albertson's Inc.                       RATING
  Short-term corporate credit rating    A-2
  Commercial paper rating               A-2

AMERICAN AIRCARRIERS: Nasdaq Decides to Delist Shares
American Aircarriers Support, Incorporated announced that the
company has received notice from The Nasdaq Stock Market that the
company's securities have been delisted as of the opening of
business on December 22, 2000.

American Aircarriers Support filed a voluntary petition to
reorganize under Chapter 11 of the Bankruptcy Code in the United
States Bankruptcy Court for the District of Delaware on October
31, 2000. Nasdaq subsequently halted trading of the company's
stock pending the receipt and review of the company's plan of
reorganization. The company was unable to negotiate a
reorganization budget with its current lenders and announced that
the company was committed to proceed with liquidation of its
business. Therefore, in addition, the company has been
unable to supply a plan of reorganization to the Nasdaq Stock
Market and the company has been unable to file its Form 10-Q for
the quarter ended September 30, 2000. As a result, under
Marketplace Rules 4450(f) and 4330(a)(b), the Nasdaq Stock Market
has delisted the company's securities.

American Aircarriers Support, Incorporated founded in 1985,
provides integrated aviation services, including maintenance,
repair and overhaul services and spare parts sales for commercial
airlines, cargo operators and maintenance and repair facilities
worldwide. The company offers engine and aircraft management
services, as well as heavy maintenance for complete aircraft,
maintenance, repair and overhaul of flight controls, landing gear
systems and jet engines at its FAA licensed facilities. For more
information about American Aircarriers Support visit

ARMSTRONG WORLD: Pays Common Carrier & Warehouse Charge Claims
In the ordinary course of their businesses involving the design,
manufacture, and sale of interior finishings, floor coverings and
ceiling systems, Armstrong World Industries uses the services of
various companies, such as DeBoer, Inc., and other commercial
common carriers to ship, transport and deliver goods from its
plants or warehouses either to Sales Service Centers with which
AWI has distribution contracts, or to customers and buyers beyond,
and in addition to, those serviced by the Sales Service Centers.

These common carriers are compensated based upon the corporate
rates charged by individual carriers, and are paid directly by
AWI. The Debtors estimated that as of the commencement of these
proceedings, the common carriers were owed approximately
$4,700,000 million for prepetition charges.

AWI also uses the services of certain third-party warehouses as a
supplement to its own on-site storage facilities and the
warehousing arrangements provided by the Sales Service Centers.
Certain of the warehouses are used by AWI for the storage of
products prior to, or in anticipation of, their delivery to
customers such as developers, builders, and retailers. Moreover,
nine other warehouses are utilized by AWI exclusively in
connection with the distribution and delivery of various
components manufactured by AWI that are sold to certain
customers involved in he production of manufactured homes and

AWI pays storage charges to the operations of the warehouses

   (a) based upon the square footage of the warehouse facility or
other form of monthly rental fee; or

   (b) in the case of those warehouses servicing manufactured
homes and housing customers, based upon service fees, including
handling fees, storage fees and delivery (to customers) fees,
which ordinarily total approximately $700,000 per quarter with
respect to all nine of these warehouses.

The Debtors estimated that as of the petition dates, the
warehouses are owed approximately $264,000 for prepetition
warehouse charges.

Similarly, in instances where a mechanic has performed repair,
construction, installation, or similar services on behalf of AWI,
applicable state law may grant such mechanic a lien against the
real or personal property of AWI that was the subject of such
services, whether or not that property is still in the possession
or control of the mechanic, to secure payment of the prepetition
amounts owed by AWI to the mechanic. Although AWI is not aware of
any specific mechanic lien charges, AWI believes that such
charges, if they exist, are de minimus and certainly do not exceed
the value of the property that is in the possession of any
mechanic asserting such a lien charge.

Through this Motion, the Debtors sought and obtained authority to
pay any undisputed amounts owed by AWI on account of outstanding
prepetition common carrier charges, warehouse charges, and
mechanics' charges, and to discharge the liens, if any, that such
carriers, warehouses, and mechanics may have on AWI's property.
(Armstrong Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

ASCHE TRANSPORTATION: Trucking Business Files Chapter 7 Bankruptcy
Asche Transportation Services, Inc. (formerly ASHE Nasdaq)
announced that it filed for protection under Chapter 7 of the
Bankruptcy Code. Along with the parent company filing, Asche
Transfer, Inc. of Shannon, Illinois and AG Carriers, Inc. of
Tavares, Florida, wholly owned subsidiaries, also filed Chapter 7

The operating subsidiaries, Asche Transfer, Inc. and AG Carriers,
Inc., operated long-haul temperature controlled trucking
businesses. A number of factors contributed to the Chapter 7
filings, including the economic slowdown, driver shortages, higher
fuel prices, increased insurance rates and higher interest rates.
Efforts to restructure the businesses, which included attempts to
sell the businesses, restructure the debt or obtain additional
equity capital, were unsuccessful.

Specialty Transportation Services, Inc. (STS), a waste hauling
company affiliated with Asche Transportation Services, Inc., will
not be affected by the Chapter 7 filings since approximately 76%
of STS is owned directly by a private institutional investor.

BRIGGS & STRATTON: Moody's Confirms Baa2 Rating; Outlook Negative
Moody's Investors Service assigned a Prime-2 rating to Briggs &
Stratton Corporation (B&S) for its $250 million commercial paper
program and confirmed the company's Baa2 long-term rating.

However, B&S's outlook is changed to negative from stable. The
Prime-2 short-term and Baa2 long-term ratings are supported by
B&S's position as the world's largest producer of air cooled gas
engines in the 3 to 22 horsepower range, and by the company's
strong debt protection measures. The negative outlook reflects the
highly seasonal nature of B&S's shipments, its expanding need for
short-term debt to support the seasonal build up of working
capital, and the fact that the current build-up is occurring at
the same time that the U.S. economy is softening.

B&S has more that a 60% share of the U.S. market for engines used
in residential lawn and garden equipment; this sector accounts for
the majority of the company's revenues and earnings. The quality
and strong brand name of it products have enabled B&S to maintain
high operating margins, attractive returns on investment, and
strong cash generation. These operating characteristics, in
combination with prudent financial policies, have contributed to
relatively strong debt protection measures. For the fiscal year
ended June 30, 2000, fixed charge coverage exceeded 10 times,
operating margins were 12.9%, and the ratio of average debt to
EBITDA was 0.9 times. Despite these operating and financial
strengths, B&S faces a number of near-term challenges that are
likely to reduce debt protection measures during the coming year.
It also faces longer-term hurdles that the company will have to
address in order to preserve the company's competitive position.

During the past two years, U.S. manufacturers (OEMs) of lawn and
garden equipment began taking delivery of engines earlier than
they had in previous seasons. This accelerated purchasing pattern
resulted from OEM concerns about the availability of engines. In
anticipation of the 2001 season, engine producers have stepped up
production and increased inventory levels. Consequently, engine
availability is less of a concern, and OEMs have reverted to
historic purchasing levels - they are taking delivery of engines
later than they have in the past two seasons. Moreover, in order
to insure availability of engines for their customers, B&S has
stepped up production levels. As a result of this reversion to
historic purchasing levels, and B&S's more aggressive production
schedule, the company's inventory levels through 2001 are likely
to remain much higher than levels maintained during the previous
two years. The company is relying on short-term borrowings to fund
this inventory buildup. Consequently, short-term borrowing levels
that were only $44 million at the end of September 1999 have risen
to $198 million at the end of September 2000. If B&S achieves the
expected level of sell through to customers during the January to
April time frame, short-term debt will be reduced in a manageable
fashion. The principal near-term risk, however, is that sell
through levels might not be as strong as anticipated due to the
softening of the U.S. economy or to unfavorable weather
conditions. This would reduce B&S's earnings, cash flow, and
ability to reduce its seasonal working capital borrowings.

The higher borrowing levels anticipated for fiscal 2001 will
marginally weaken B&S's debt protection measures. In addition, a
shift in product mix from high horse power engines to lower horse
power engines will likely result in a modest narrowing of
operating margins. Nevertheless, debt protection measures would
remain strong if the company is able to maintain historic levels
of sell through to customers as the season progresses. Moody's
will closely monitor B&S's sell through rate and its ability to
adjust production levels to any shifts in demand as the season
progresses. In order to insure funding of its short-term working
capital requirements, B&S can rely on a $250 million multi-year
revolving credit facility and a $140 million 364-day facility.

B&S's U.S. markets are mature. In addition, mass merchandisers of
home improvement, hardware, and lawn and garden equipment have
significant market leverage, and are likely to put increasing
pressure on B&S's margins. These factors represent significant
long-term challenges for the company. B&S may attempt to address
these challenges by further growth of its international
operations, or through the expansion other non-lawn and garden

Briggs & Stratton, headquartered in Milwaukee, WI, is the world's
largest producer of air cooled gasoline engines for outdoor power

CROWN CORK: Announces Promotion of T.J. Kreider to Corporate VP
Crown Cork & Seal Company, Inc. (NYSE: CCK; Paris Bourse)
announced that Torsten J. Kreider, 36, has been promoted to
Corporate Vice President, Planning & Development.  He continues to
report to Timothy J. Donahue, Senior Vice President, Finance.

Mr. Kreider was most recently Director, Planning & Analysis with
responsibilities in the worldwide planning process as well as the
Company's business development efforts and has participated in
many of the transactions completed since joining the Company in
1992.  In his new position, he will have an expanded role in
identifying and implementing strategic alternatives.

Prior to joining the Company, Mr. Kreider was employed by Shearson
Lehman Brothers' Middle Market Group, a company providing
investment banking services to diverse industries.  Mr. Kreider
holds a B.S. degree in Economics from The Wharton School at the
University of Pennsylvania.  He is a Board Member and Treasurer of
The William Penn Charter School Alumni Society.

Crown Cork & Seal is the leading supplier of packaging products to
consumer marketing companies around the world.  World headquarters
are located in Philadelphia, Pennsylvania.

DYNEX CAPITAL: Releases Update on California Investment Merger
Dynex Capital, Inc. (NYSE: DX) announced that in a letter to
California Investment Fund, LLC ("CIF") dated December 22, 2000,
the Company declared CIF in breach of the terms of the merger
agreement entered into between the parties on November 7, 2000.
The breach relates to CIF's obligation to provide certain evidence
of financing in accordance with the terms of the merger agreement.
In the letter, Dynex reserved the right to terminate the merger
agreement with CIF for such breach if CIF does not agree to and
satisfy certain conditions relating to obtaining financing and
other matters. CIF has until 5:00 PM Eastern Time on Wednesday,
December 27, 2000 to agree to the terms of the letter.

Separately, as previously reported, the Company's credit facility
agented by Chase Bank of Texas, related to the letters of credit
on its multifamily tax-exempt bonds, expired as of the end of
October. The Company has been unable to secure a formal extension
of such agreement, but the lenders thereunder have not taken any
adverse actions at this time.

The Company also announced that it will not declare a dividend to
the Series A, Series B and Series C preferred shareholders for the
fourth quarter of 2000. Dividends on the preferred stock are
cumulative and the Company is not permitted to pay any dividends
on its common stock until the cumulative preferred dividends have
been declared and paid in full. The preferred stock dividends are
current through the July 31, 1999 payment date. The Company also
reported that it will not pay a dividend on its common stock for
the quarter.

Dynex Capital, Inc. is a financial services company that elects to
be treated as a real estate investment trust (REIT) for federal
income tax purposes.

FINOVA GROUP: Leucadia National Signs Agreement to Invest $350MM
The FINOVA Group Inc. (NYSE: FNV) and Leucadia National
Corporation (NYSE: LUK; PCX) announced that they signed a
Securities Purchase Agreement under which Leucadia National
will invest up to $350 million in FINOVA.  Leucadia will pay $250
million to acquire newly issued 14% cumulative convertible
preferred stock with an initial aggregate liquidation preference
of $250 million, as well as a 10-year warrant to acquire 20% of
FINOVA's common stock, subject to anti-dilution adjustments, for
an aggregate exercise price of $125 million.  The preferred stock
will be convertible into common stock from June 30, 2006 to the
tenth anniversary of issuance, based on the liquidation preference
of the preferred stock (which will accrete as dividends accrue),
at a rate of one share per $2.50 of liquidation preference,
subject to anti-dilution adjustments.  The preferred stock will
vote with common stock on a converted basis, receiving two votes
per share of common stock.

After closing the Leucadia transaction, FINOVA will conduct a
rights offering to its current shareholders for convertible
preferred stock with an initial aggregate liquidation preference
of up to $150 million.  The convertible preferred stock to be
issued in the rights offering will have identical terms as the
Leucadia shares.  Leucadia has agreed to act as standby purchaser
of the first $100 million of the rights offering.

The agreement supercedes the letter agreement dated November 10,
2000 and is subject to reaching mutually satisfactory arrangements
with FINOVA's bank group and public debt holders, as well as
certain other customary conditions, including regulatory

The Securities Purchase Agreement and other transaction documents
are being filed as exhibits to a Form 8-K that will be filed by
FINOVA with the Securities and Exchange Commission on December 22,

FINOVA and Leucadia intend to propose a comprehensive
restructuring to FINOVA's bank group and public debt holders.  
This restructuring will likely entail a principal reduction in the
form of debt forgiveness, an extension of some maturities and the
granting by FINOVA, of security.  It is expected that
substantially all of the company's lenders will have to agree to
this restructuring in order for it to be effective and to avoid
the possibility of reorganization under protection of the courts.  
The company is already meeting with a steering committee of its
bank lenders and expects that its public debt holders will want to
form a similar committee.

FINOVA President and Chief Executive Officer Matt Breyne said, "We
are pleased to move our association with Leucadia forward.  We,
together with Leucadia and Jay Alix & Associates, are working to
develop comprehensive plans for restructuring our debt."

The FINOVA Group Inc., through its principal operating subsidiary,
FINOVA Capital Corporation, is one of the nation's leading
financial services companies focused on providing a broad range of
capital solutions primarily to midsize business.  FINOVA is
headquartered in Scottsdale, Ariz., with business development
offices throughout the U.S. and London, U.K., and Toronto, Canada.
For more information, visit the company's website at

Leucadia National Corporation is a holding company for its
consolidated subsidiaries engaged in property and casualty
insurance (through Empire Insurance Company and Allcity Insurance
Company), manufacturing (through its Plastics Division), banking
and lending (principally through American Investment Bank, N.A.)
and mining (through MK Gold Company).  Leucadia also currently has
equity interests of more than 5% in the following domestic
public companies:  Carmike Cinemas, Inc. (6% of Class A Shares),
GFSI Holdings, Inc. (6%), Jordan Industries, Inc. (10%) and
PhoneTel Technologies, Inc. (7%).

GEAC COMPUTER: $225MM Credit Facility Expires & Talks Underway
Geac Computer Corporation Limited (TSE: GAC.) announced that its
$225 million US syndicated revolving credit facility expires at
the end.

After the repayment of $5 million US, approximately $60 million US
remains outstanding under the facility. The Company and its
banking syndicate have agreed to continue discussions during the
month of January with a view to reaching mutually satisfactory
terms for this facility.

"In the month ahead, the Company plans no further acquisitions and
will focus its efforts on meeting the expectations of its
customers," said John E. Caldwell, President and Chief Executive

Geac Computer Corporation Limited is a provider of mission
critical software and systems solutions to corporations around the
world. Geac solutions include cross-industry enterprise business
applications for financial administration and human resources
functions, and enterprise resource planning applications for
manufacturing, distribution, and supply chain management. Geac
also provides industry applications to the hospitality, property
and publishing marketplaces, as well as a wide range of
applications for libraries and public administration.

Headquartered in Toronto, Canada, Geac ranks as one of the world's
largest software companies. Further information is available on
the World Wide Web at,or through e-mail at

GLOBE MANUFACTURING: Spandex-Maker Faces Involuntary Petition
Globe Manufacturing, a worldwide maker of Glospan(R) spandex,
announced that an involuntary petition for relief under Chapter 11
of the United States Bankruptcy Code was filed in the United
States Bankruptcy Court for the Eastern District of Massachusetts
by a group of holders of the 10 percent Senior Subordinated Notes
due August 2008.

The Company said that it has for the last several months been in
discussions with such holders, as well as its other creditor
groups regarding a restructuring of its debt. Globe said that
discussions with its bank lenders are ongoing. The Company also
said that it continues to explore a number of strategic
alternatives, including the potential sale of the Company and an
operational restructuring. Globe said it is in discussions with
potential purchasers regarding the possible acquisition of its

Richard Heitmiller, chief executive officer of Globe
Manufacturing, said "We have been making steady progress in our
development of a financial and operational restructuring of the
Company when this action was taken by certain bondholders. We
believe this action was premature and are currently evaluating our
options. Our objective remains clear, however, that we intend to
develop a restructuring plan that substantially reduces our debt
and places the Company on firmer financial footing."

Globe said that it has sufficient liquidity to carry it through
the restructuring process and will continue operations. The
Company said that it will continue to fulfill obligations to
customers and vendors throughout the reorganization.

Heitmiller continued, "This involuntary petition will not affect
our ability to meet our obligations to customers and vendors. We
will continue to operate our business while we examine strategic
alternatives as to how to implement our restructuring plan."

Established in 1945, Globe Manufacturing Corp. produces Glospan(R)
and Cleerspan(R) Spandex Performance Fibers and is a premier
worldwide spandex fiber supplier. Available in a range of deniers
from 20 through 5040 and various packaging put-ups, Glospan(R) is
distributed to over 40 countries through five major distribution
channels. Globe is registered under the internationally recognized
ISO 9000 standard as an ISO 9001 manufacturer.

GRAPHICS TECHNOLOGIES: Files Chapter 11 Petition in Minnesota
Graphics Technologies, Inc. (OTCBB:VTCO) (formerly known as
Virtual Technology Corporation and Netdirect Corporation
International) announced that, to facilitate restructuring into a
business-to-business (B2B) wholesale technology provider, it filed
a voluntary petition for reorganization under Chapter 11 of the
U.S. Bankruptcy Code on December 20, 2000, with the U.S.
Bankruptcy Court for the District of Minnesota.

Greg Appelhof, Chief Executive Officer, commented, "Our GTI
business unit formerly was profitable. We believe the
reorganization will enable us to focus on this business. Despite
tremendous efforts by our employees and the loyalty of our vendors
and customers, we were unable to make the retail e-commerce model
work. It is now imperative that we concentrate all of our efforts
on competing in the wholesale technology marketplace."

"During the past few months," Appelhof continued, "we have taken
steps to consolidate operations and reduce staff. As a result, we
have significantly lowered our cash operating expenses. We expect
to drive more efficiency through this reorganization."

Appelhof also said that GTI has restructured its management team,
appointing Kent Hjerpe as President to head sales and strategic
development and John Harvatine to the additional post as Chief
Operating Officer to direct GTI through its financial
restructuring process.

"Our focus on the traditional GTI model, along with added
infrastructure and fulfillment capabilities we're planning, will
allow us to return to profitability," Hjerpe stated. "The evolving
wholesale technology marketplace needs a company such as GTI to
partner with customers and vendors to bring increased supply chain
efficiencies. We believe that our 13 years of knowledge and
leadership will allow us to deliver technology products more
efficiently and effectively than ever before."

Appelhof said that GTI has begun discussions with its major
vendors and expects them to support GTI during the reorganization
process. He also reported that GTI is negotiating the terms of
debtor-in-possession (DIP) financing that, subject to court
approval, he expects will fund GTI's planned post-petition trade
and employee obligations, as well as its ongoing operating needs
during the restructuring process.

HARNISCHFEGER: Beloit Committee Says March Confirmation Impossible
The Official Committee of Unsecured Creditors of Beloit
Corporation object to the adequacy of the First Amended Disclosure
Statement prepared by Harnischfeger Industries, Inc., et al.,
because, they say, it describes a plan of reorganization that
cannot be confirmed in March 2001. Confirmation of the Plan, the
Beloit Committee explains, is conditioned on certain cash reserve
requirements and final resolution of the Committee Settlement
Agreement. Those conditions won't occur, so the Plan is incapable
of confirmation.

Attorneys at Strook & Strook & Lavan representing the Beloit
Committee make it clear to Judge Walsh that they do not object to
the Plan per se. Rather, they point out at this early juncture
that the Plan cannot be confirmed, realistically, until April 2001
or later.

The Beloit Committee relates that Merrill Lynch is having
difficulty selling the APP Note. The Beloit Estates are short by
$20,000,000 and administratively insolvent unless full and fair
value is obtained on the APP Note. The likelihood of selling the
APP Note by March is slim. By waiting until April, Beloit will
have received the first installment of principal and interest on
the APP Note.

To provide creditors with a disclosure statement containing
adequate information, information about the conditions to
confirmation and the Debtors' inability to satisfy those
conditions by March should be disclosed. (Harnischfeger Bankruptcy
News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 609/392-

ICG COMMUNICATIONS: Creditors Convene for First Meeting on Jan. 12
The United States Trustee for Region III has called for a meeting
of the Debtor's Creditors pursuant to 11 U.S.C. Sec. 341(a) to be
held on January 12, 2001, at 10:00 a.m.. in Room 2313 of the U.S.
Courthouse at 844 King Street in Wilmington. All creditors are
invited, but not required, to attend. This Official Meeting of
Creditors offers the one opportunity in a bankruptcy proceeding to
question a responsible office of the Debtor under oath. (ICG
Communications Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

INNOVATIVE CLINICAL: Releases 1st Post-Emergence Financial Report
Innovative Clinical Solutions, Ltd. (OTC Bulletin Board: ICSN.OB)
announced the results for the third quarter ended October 31,
2000. This announcement represents the first set of financial data
issued since the completion of the Company financial restructuring
on September 21, 2000.

The Company adopted fresh-start reporting on September 21, 2000,
the effective date of its restructuring plan. Under fresh-start
reporting, the final consolidated balance sheet as of September
20, 2000 became the opening consolidated balance sheet of the
reorganized Company. Due to the Company's utilization of fresh-
start reporting, the Company's consolidated balance sheet for
October 31, 2000 is not comparable in certain material respects to
balance sheets for any prior date or for any prior period.

Successor Company revenues for the 5 weeks ended October 31, 2000
were $8.9 million. Operating costs and administrative expenses
(excluding reorganization items associated with the restructuring)
for the 5 weeks ended October 31, 2000 were $10.1 million. Net
loss for the 5 weeks ended October 31, 2000, was approximately
$(1.4) million, or ($.12) per share. Operating results for periods
prior to September 20, 2000 are for the predecessor company and
are not comparable to the reorganized company, which reflects the
exchange of New Common Stock for the Debentures and old Common
Stock pursuant to the restructuring plan.

The Company continues to make progress in expanding its ICSL
Clinical Studies division. For the quarter ended October 31, 2000,
the Company has signed 7 new staffed-model sites. Subsequent to
October 31, 2000, the Company signed 2 additional staffed-model
sites, bringing the total number of new sites signed to date for
the year to 17, with a grand total of 51 clinical research

Michael Heffernan, president and CEO, commented, "We have made
significant progress towards improving our financial positioning
with the completion of the recapitalization of our $100 million
debt into common equity, allowing the Company to significantly
strengthen its balance sheet, and in securing a $10 million credit
line, providing the Company with financial flexibility required to
execute our growth strategy. We will continue to improve the
profitability of our core business units by both growing the
revenue and continuing to reduce overhead expenses. We will also
continue to explore opportunities to improve profitability and
market valuation within our current operations and growth
strategy. Our business operating units, ICSL Clinical Studies and
ICSL Network Management, have shown continued improvement in
profitability for the period ended October 31, 2000, as compared
with the previous quarter."

Innovative Clinical Solutions, Ltd., headquartered in Providence,
Rhode Island, provides services that support the needs of the
pharmaceutical and managed care industries. The Company integrates
its pharmaceutical services division with its provider network
management division to create innovative solutions for its
customers. The Company's services include clinical and economic
research and disease management, as well as managed care functions
for specialty and multi-specialty provider networks including
approximately 5,000 providers and close to 8 million patients
nationwide. The Company's components include ICSL Clinical
Studies, ICSL Healthcare Research and ICSL Network Management.

LAIDLAW INC: Bottom-Line Loss for Fiscal 2000 Tops $2.2 Billion
Laidlaw Inc. (NYSE:LDW; TSE:LDM) announced its results for its
fiscal year ended August 31, 2000 and the direction of its
financial restructuring process. For fiscal 2000, revenue
from the company's continuing Education Services and its Transit &
Tour Services operations increased 29.3% to $2.926 billion from
$2.263 billion reported for fiscal 1999. Earnings before interest,
taxes and amortization (EBITA) were $189.5 million, a decline of
29.4% from the $268.4 million reported for fiscal 1999. This
decline was principally attributable to increased insurance costs
as well as higher labor and fuel costs due to prevailing economic
conditions. The increase in insurance costs primarily resulted
from the adoption in fiscal 2000, of a more conservative insurance
reserve policy resulting in an increase of $48 million in the
insurance reserve.

For fiscal 2000, the company had a net loss of $2.237 billion, or
$6.84 per diluted share compared with a net loss of $1.119
billion, or $3.39 per diluted share for the prior year. There were
325.9 million shares outstanding at August 31, 2000 compared with
330.2 million at the end of fiscal 1999.

The net loss was primarily attributable to the $1.276 billion
write-down in the company's carrying value of its healthcare
businesses as a result of their continued erosion in value, and
the $604 million write-off of the company's 44% ownership interest
in Safety-Kleen Corp. relating to Safety-Kleen's financial
reporting and resulting liquidity problems that resulted in
its filing for bankruptcy protection. Additional provisions of $67
million related to Safety-Kleen were expensed during the year. The
consolidated financial statements include the company's share of
net earnings or losses of Safety-Kleen. As a result of the Safety-
Kleen matters, the accuracy of the income and losses relating to
Safety-Kleen has not been verified and further adjustments might
be necessary to the company's historical financial statements.

The net loss for fiscal 2000 also included $102 million in
expenses relating to the company's defaults under its credit
agreement and bond indentures, losses on the termination of
interest rate swap contracts, professional fees and costs relating
to the company's restructuring efforts and the write-off of
previously deferred costs of issuing and administering the bonds.

Interest expense related to continuing operations for fiscal 2000
was $207 million compared to $92 million for fiscal 1999.

                      Education Services

Revenue from Education Services, Laidlaw's school bus
transportation unit, increased 7.6% to $1.428 billion for fiscal
2000 from $1.327 billion for fiscal 1999. For fiscal 2000,
reported EBITA for the unit was $133.6 million compared with
$185.0 million for the prior year. Expenses related to driver
shortages and increased fuel costs offset the contribution from
the increased revenue. A $21 million increase in insurance reserve
costs and expenses associated with exiting unfavorable contracts
combined to result in a lower overall contribution.

                    Transit & Tour Services

Revenue from Transit & Tour Services, the company's intercity,
public transit and tour services unit, increased 60.2% to $1.498
billion from $935 million for fiscal 1999. This increase was
primarily attributable to the inclusion, for full fiscal 2000, of
Greyhound Lines, Inc., which was acquired in March 1999. The
increase in revenue is also due to more customers taking the bus
in reaction to higher fuel prices for auto transportation. EBITA
for the unit declined to $55.9 million for fiscal 2000 from $83.4
million for fiscal 1999. The decline in EBITA includes a $27
million increase in insurance reserves.

                    Financial Restructuring

As a consequence of violations of certain financial covenants
under its bank credit agreement and bond indentures and the
previously announced interest payment moratorium, substantially
all of the company's long-term debt is due on demand and
classified as current liabilities. The company continues
to seek to negotiate a resolution to its long-term capital
structure and liquidity issues.

Mr. John R. Grainger, Laidlaw's president and CEO, stated "We and
our advisors have been working over the past several months with
the lenders under our credit facilities, and with an informal
committee of our bondholders, to develop a plan that will enable
us to restructure Laidlaw Inc.'s balance sheet and capitalize on
the strengths in each of our transportation businesses.

"These discussions have been constructive and we intend, through
appropriate restructuring procedures, to put in place during
fiscal 2001 a plan to restore our balance sheet and financial
strength," Mr. Grainger continued. "As we continue our discussions
with our creditor constituencies, we remain committed to making
certain that the operating companies are able to honor all
contractual obligations with no disruption in services to their
customers and communities."

Laidlaw Inc. will hold a conference call on January 5, 2001 to
discuss the status of the company's progress on the issues
discussed in this release.

Details of the timing of the call will be announced in a news
release January 2, 2001.

Laidlaw Inc. is a holding company for North America's largest
providers of school and intercity bus transportation, municipal
transit, patient transportation and emergency department
management services. All dollar amounts are in U.S. dollars.

LUCENT TECHNOLOGIES: S&P Lower Ratings; CreditWatch Still Negative
Standard & Poor's lowered Lucent Technologies Inc.'s short term
ratings to 'A2' from 'A1' and senior ratings to 'BBB+' from 'A'.
Ratings remain on CreditWatch with negative implications where
they were placed on October 23, 2000. The actions reflect S&P's
preliminary assessment that senior ratings will be in the triple-
'B' category when the full review is completed in January or
February of 2001. S&P's current view of the commercial paper
rating is that it is most likely to remain at the 'A-2' level,
however it remains on CreditWatch with negative implications until
the review is completed.

The downgrade reflects inconsistent operating performance in
fiscal 2000, ended Sept. 30, significant anticipated losses in the
fiscal first quarter of 2001, as well as reduced profitability for
2001. The operational challenges are partly offset by planned
restructuring actions and asset sales, which in combination are
expected to provide a financial cushion as the company repositions
itself for profitable growth.

Cost savings from the restructuring actions are targeted to result
in more than $1 billion in annual savings but will entail a
significant charge, further affecting fiscal 2001 financial
results. Lucent will aim to bring its costs in line with its
current revenue base and redesign internal systems and processes.

Also, the company is selling its power systems business to Tyco
International Ltd. for $2.5 billion and is spinning off its
microelectronics business, Agere Systems Inc., to shareholders in
2001. In addition to receiving proceeds generated from Agere
Systems' initial public offering, Agere is projected to assume
about $2.5 billion of Lucent short-term debt.

Lucent's challenge is to restore revenue growth and profitability,
which have been declining for several quarters, as the company
missed a major for generation of new optical transmission
equipment revenue opportunity. In addition, sales in the core
central office equipment product line have been declining more
rapidly than anticipated. Moreover, management has also reassessed
and increased its reserves for bad debt in its vendor financing
program, particularly due to difficulties faced by its
speculative-grade competitive local exchange carrier customers.

Lucent had earlier expected pro forma net income from continuing
operations for the December quarter to be about breakeven with a
7% revenue decline, compared to earnings of $1.18 billion in the
prior year quarter. Instead, pro forma revenues will decline about
20% and, as a result, Lucent expects a loss of about $800 million-
$1 billion in the period. In addition to operational issues, an
investigation of revenue recognition practices resulted in
downward revisions to revenues of $700 million and reduced
earnings by more than $250 million for the September quarter.

Standard & Poor's will assess Lucent's market position in key
areas, its plans to restore sales growth and improve operating
profitability, its vendor finance criteria, and the impact of its
restructuring efforts before resolving the CreditWatch.

MEDITRUST COMPANIES: No Dividend Will be Paid on Common Stock
Meditrust Corporation announced that the Company will not pay a
dividend on its common shares for the year ending December 31,
2000. This announcement follows an analysis of the Company's
ordinary REIT taxable income for the year 2000 and the minimum
dividend required to maintain REIT status.

This decision is consistent with the Five Point Plan of
reorganization announced in January 2000 in which the Company
stated that it would distribute the minimum dividend required to
maintain REIT status. It is also consistent with the Company's
September 8, 2000 announcement, in which the Company stated that
it was unlikely to pay a dividend on its common shares for the
year ending December 31, 2000.

During the first three quarters of 2000, Meditrust sold
approximately $959 million of assets on which it recorded
approximately $244 million of losses. Due to the amount of these
losses, the Company's ordinary REIT taxable income will reflect a
loss for the year 2000 and therefore no common share dividend is
required to be paid to maintain REIT status. The minimum dividend
calculation is defined as 95% of ordinary REIT taxable income for
the year ending December 31, 2000 and, effective for taxable years
after December 31, 2000, 90% of ordinary REIT taxable income. The
Board of Directors continues to evaluate The Meditrust Companies
progress in successfully implementing the Five Point Plan, as well
as the results of the lodging and healthcare operations. This
evaluation, in conjunction with the minimum REIT dividend
distribution requirement and other factors, will assist the
Company in establishing a common share dividend policy for 2001.

The decision to not pay a dividend on the Company's common shares
for the year ending December 31, 2000 will not impact the
dividends payable on the Company's cumulative preferred stock.
Accordingly, the Company expects that the preferred dividend will
remain at 9% and will continue to be declared and paid quarterly.

The Meditrust Companies, (NYSE: MT), a real estate investment
trust headquartered in Dallas, Texas, consists of Meditrust
Corporation, a REIT, and Meditrust Operating Company. Meditrust
Corporation's portfolio consists of 300 lodging facilities, 94
long-term care facilities, 94 retirement and assisted living
facilities, five medical office buildings, and seven other
healthcare facilities. Meditrust Operating Company operates all of
the lodging facilities under the La Quinta brand name. Today's
news release as well as other news about The Meditrust Companies
is available on the Internet at

La Quinta Inns, Inc. owns and operates 230 Inns and 70 Inn &
Suites in 28 states. La Quinta is the lodging division of The
Meditrust Companies and is also headquartered in Dallas. For more
information about La Quinta, please visit its Web site at

NEWCOR, INC: Truck Market Decline Takes Toll This Year
Newcor, Inc. (Amex: NER) announced that it is experiencing worse
than anticipated financial performance for the year ended December
31, 2000.  The shortfall in expectations is primarily due to the
downturn in the heavy-duty truck market, the softening in the
automotive and light truck market and the costs associated with
the closure of one of its operations.

Revenues from the heavy-duty truck sector are anticipated to be
down approximately 50% in the fourth quarter 2000 compared to the
fourth quarter 1999.  Revenues from the automotive and light truck
sector are anticipated to be down approximately 25% in the fourth
quarter 2000 compared to the fourth quarter 1999.  These factors
will adversely affect financial results for both the fourth
quarter and the full year ended December 31, 2000.

In addition, as part of its ongoing cost reduction efforts, the
company closed its Turn-Matic operation during the fourth quarter
of this year.  The non-recurring costs associated with the closure
are primarily non-cash and estimated to be $1.4 million.  This
will adversely impact operating results in the fourth quarter and
the full year.  Net proceeds from the sale of the assets of the
Turn-Matic operation will generate positive cash flow in 2001.
The consolidation of the business of this facility into other
Newcor operations will provide the company with a more competitive
cost position in the marketplace and enhance operating

The company expects earnings before interest, taxes, depreciation
and amortization (EBITDA) before non-recurring items to be
approximately $21 to $22 million for the year ended December 31,
2000.  Non-recurring costs for the period include the closure
costs for Turn-Matic and an estimated $2.5 million for
professional fees.  Net loss for the year ended December 31, 2000
including these non-recurring costs is anticipated to be between
$1.20 and $1.33 per share.

"The weak heavy-duty truck market continues to decline and
currently the automotive and light truck market is showing signs
of further softening in 2001.  We continue our efforts to minimize
the impact of these events.  These efforts include ongoing
headcount reductions, administrative expense reductions and
productivity improvements.  Despite the weak market, the
company continues to reduce its bank debt, while maintaining
positive cash flows," stated James J. Connor, President and Chief
Executive Officer of Newcor.

Newcor, headquartered in Bloomfield Hills, Michigan, designs and
manufactures precision machined and molded rubber and plastic
products as well as custom machines and manufacturing systems.  
Newcor is listed on the Amex under the symbol NER.

NORTHROP/LITTON: Moody's Reviewing Debt Ratings for Downgrade
Moody's Investors Service placed the debt ratings of Northrop
Grumman Corporation (Northrop) and Litton Industries, Inc.
(Litton) under review for possible downgrade following the
announcement that the two companies have reached a definitive
agreement under which Northrop will acquire, for cash, all of the
outstanding shares of Litton for $80 per share. The transaction is
valued at approximately $5.3 billion including the assumption of
about $1.3 billion of Litton debt, and is expected to close within
the first quarter of 2001 pending regulatory review. Moody's noted
that the proposed transaction represents an opportunity for
Northrop to advance its position in several key business areas and
offers potential for important operating synergies. Nevertheless,
the rating review considers the uncertainties attendant to
executing the proposed transaction, including a planned equity
issuance to reduce acquisition debt, and the higher degree of
operating and financial risk that Northrop will incur.

Moody's review will focus on the strategic fit between the two
companies and the potential synergies available in the form of
revenue generation from a broadened portfolio of businesses and
cost reduction opportunities. The review will also consider the
implications for the transaction of the regulatory review process,
both in the US as well as in Europe. Moody's will assess the
ultimate structure of the transaction, the outlook for earnings
and cash flow over the intermediate term and the implications for
debt protection measurements for the combined entity. The rating
agency will consider the material increase in overall indebtedness
of the combined group, and the potential for Northrop to rapidly
reduce debt, as it has in past transactions, through equity
issuance, potential asset sales and cash flow from operations. The
new company's future acquisition strategy will also be examined,
as well as the future funding requirements for the $1.0 billion
tax payment due in 2002 associated with the wind-down of the B-2
Stealth Bomber program. The rating agency will also assess the
treatment of existing Litton debt within the capital structure of
the new group. Finally, Moody's noted that any potential for a
confirmation of the rating will be heavily reliant upon the rapid
reduction of acquisition debt through near term equity issuance,
as well as through potential proceeds from asset sales and cash
flow from operations.

Ratings under review are:

Northrop Grumman Corporation -- Baa3 senior debt rating; and its
shelf registration for debt securities rated (P)Baa3 for senior
obligations, (P)Ba2 for subordinated obligations, and (P)"ba2" for
preferred stock.

Litton Industries, Inc. -- Baa2 senior debt rating; its shelf
registration for debt securities rated (P)Baa2 for senior
obligations, (P)Baa3 for subordinated obligations, and (P)"baa3"
for preferred stock; the Prime-2 short-term rating; and the Baa2
rating on IRBs

Litton Industries, Inc., headquartered in Woodland Hills,
California, is an aerospace/defense, information systems, and
commercial electronics company.

Northrop Grumman Corporation, with headquarters in Los Angeles,
California, is a major defense aircraft and electronics

OUTBOARD MARINE: Boat Maker Proposes Asset Sale Under Chapter 11
Outboard Marine Corporation (OMC) and several of its subsidiaries
filed for voluntary reorganization under Chapter 11 of the US
Bankruptcy Code in US Bankruptcy Court in Chicago. OMC has sought
protection under Chapter 11 so that the company can implement its
plans to sell some or all of its engine and boat operations. OMC
also announced a significant reduction in its North American
workforce affecting salaried and hourly employees at all of its

OMC stressed that the company expects to continue operations
during the reorganization process.

OMC has requested that the Bankruptcy Court allow the company to
continue compensation and benefit plans for its remaining
employees, maintain customer sales, support and service
activities, and make post-petition payments due to suppliers in
the ordinary course of business.

OMC said it has received a commitment from its bank group to
provide debtor-in-possession financing totaling $35 million, which
is expected to be sufficient to permit the company to operate
while it implements its restructuring plan.

The company has the support for this course of action from its
major investors.

The company said the filing has been made in order to enable OMC
to complete the sale of its boat and engine operations under Court
supervision. OMC said it intends to do everything it can to
expedite this process and to consummate a beneficial transaction
as quickly as possible.

OMC said that the reduction in force affects approximately 4,000
employees at its boat and engine operations in North America.

Outboard Marine Corporation is a leading manufacturer and marketer
of internationally-known boat brands, including Chris-Craft(R),
Four Winns(R), Seaswirl(R), Javelin(R), Stratos(R), Lowe(R),
Hydra-Sports(R) and Princecraft; marine accessories and marine
engines, under the brand names of Johnson(R) and Evinrude(R); and
Ficht Ram Injection(R) -- the world's premier low-emission two-
stroke outboard engine technology.

OUTBOARD MARINE: Moody's Downgrades Senior Notes to C
Moody's Investors Service lowered the following debt and corporate
ratings of Outboard Marine Corporation (Outboard):

   * $160 million 10.75% Guaranteed (by four of its operating
subs.) Senior Unsecured Notes, due 2008, to C from Caa1;

   * $65.2 million 9.125% Senior Unsecured Sinking Fund
Debentures, due 2017, to C from Caa1;

   * $5 million Medium Term Notes, due 2001, to C from Caa1;

   * $150 million Senior Secured Revolving Credit Facility, as
amended, due 12/31/01, Tranche A to B3 from B2 and Tranche B to
Caa2 from B3.

   * Tranche B, funded by the sponsor in October 2000, shares a     
security interest in the same collateral package (all assets of
Outboard and the guarantees of four operating subsidiaries)), but
its priority is subordinated to that of the other lenders.

   * Outboard Marine's senior implied rating was also lowered to
Caa3 from B3 and the unsecured issuer rating was lowered to C from
Caa2. The ratings outlook remains negative.

The new ratings reflect a low level of tangible asset coverage to
debt and other obligations and the uncertainty about the viability
of the company given the recent announcements on its decision to
discontinue operations.

Based in Waukegan, Illinois, Outboard Marine Corporation is a
leading manufacturer and marketer of marine engines, boats and
accessories under the brand names of Johnson, Evinrude, Chris-
Craft, Four Winns, Stratos, Lowe and Princecraft.

PILGRIM AMERICA: S&P Puts CBO I Class B Ratings on Negative Watch
Standard & Poor's placed its rating on the class B notes issued by
Pilgrim America CBO I Ltd. and co-issued by Pilgrim America CBO I
Corp. on CreditWatch with negative implications.  The rating on
the class B notes had been previously lowered to triple-'B'-minus
from single-'A' on Oct 25, 2000.

The rating on the class A notes remains on CreditWatch with
negative implications, where it was placed on Oct. 17, 2000.
The CreditWatch placements reflect the significant deterioration
in credit quality and an approximate 4.4% increase in the default
rate of the underlying collateral pool since the Oct. 25, 2000
rating action. According to the Nov. 20, 2000 trustee report, a
total of $56 million, or approximately 19% of the total collateral
pool, is in default.

These defaulted securities have resulted in the violation of all
the overcollateralization tests because defaults are required to
be carried at 30% of their par values for the purpose of
calculating the overcollateralization ratios. The class A
overcollateralization test (currently 134.02% vs. the required
minimum of 135%) is failing for the first time as of Nov. 20,
2000. The class B overcollateralization test (currently 110.5% vs.
the required minimum of 118%) and total overcollateralization test
(currently 94% vs. the required minimum of 107%) have been out of
compliance since June 2000 and April 1999, respectively.

In the previous three payment dates, more than $14 million in
principal has been paid to the class A noteholders because of the
mandatory redemption triggered by overcollateralization test
failures. However, the improvement to the overcollateralization
ratios from the redemption has been offset by the subsequent
increase in defaulted assets.

On the positive side, the weighted average coupon, currently at
9.94%, is passing the minimum requirement of 9.65%. The industry
concentration is also in compliance with the maximum requirement
of 8%.

Over the next three weeks, Standard & Poor's will perform a cash
flow analysis, and review the results from the cash flow model
runs and Standard & Poor's default model to evaluate the impact of
the credit deterioration on the current ratings for the class A
and B notes, Standard & Poor's said.--CreditWire


Pilgrim America CBO I Ltd./Pilgrim America CBO I Corp.

          Class    To                From
          B        BBB-/Watch Neg    BBB-

POTLATCH CORP: Rise in Debtload Prompts Moody's to Start Review
Moody's Investors Service placed Potlatch Corporation's Baa1
senior unsecured debt ratings and its Prime-2 short-term ratings
for commercial paper under review for possible downgrade. The
review is prompted by the company's weaker than expected financial
performance, and the possibility that the company may be slower in
paying down debt and restoring debt protection measurements than
previously anticipated.

Ratings on review for downgrade are:

     Senior unsecured notes and debentures; Baa1
     Industrial and pollution control revenue bonds; Baa1
     Medium term notes; Baa1
     Short term rating for commercial paper; Prime-2.

Potlatch's debt has risen over the past several years, with the
completion of several capital projects occurring during a period
of relatively weak pricing. The company had originally projected
that free cash flow would increase significantly in 2000 and 2001
as capital spending declined and price for its pulp and paper
products improved. However, a sharper than anticipated downturn in
lumber and panel prices, combined with higher energy costs and a
relatively weak coated paper market have prevented improvement in
cash generation and debt reduction.

As part of our review, we will assess the company's plans for
improving near-term performance and debt protection measurements.
In addition, we will consider the company's long term strategic
direction, and management's guidelines on future capitalization of
the company.

Potlatch, headquartered in Spokane, Washington, is a diversified
forest products company with timberlands in Arkansas, Idaho, and

PRIME RETAIL: Financing & Asset Sales Provides $174 Million
Prime Retail, Inc. (NYSE: PRT, PRT.PRA, PRT.PRB) announced that it
has closed a major refinancing of its assets and the sale of four
of its outlet centers through a series of transactions that
provided the Company an aggregate of $174 million of net proceeds.
The lenders are an affiliate of Fortress Investment Fund LLC;
Greenwich Capital Financial Products, Inc.; and Mercantile-Safe
Deposit and Trust Company. The sale of its outlet centers was to
Fortress and Chelsea GCA Realty, Inc.

Fortress and Greenwich (the "Lending Group") provided a mezzanine
loan in the amount of $90 million. Greenwich provided a $20
million first mortgage loan on the Company's outlet center which
recently opened in Puerto Rico and Mercantile provided a $10
million second mortgage loan on the Company's outlet center in
Hagerstown, Maryland. The Company also extended the maturities of
two existing loans, the $112 million first mortgage loan from
Nomura Asset Capital Corporation and the $20 million first
mortgage loan from KeyBank National Association.

The sale to Fortress and Chelsea of four of the Company's outlet
centers was for a total consideration of $240 million, including
the assumption of $174 million of first mortgage debt. The net
proceeds from the sale, after closing costs and fees and the
required purchase by the Company of land in the amount of $7
million related to the outlet center in Gilroy, California, was
$54 million. The four outlet centers which were sold are located
in Gilroy, California; Michigan City, Indiana; Waterloo, New York;
and Kittery, Maine and total 1.5 million sq. ft. of gross leasable

The $90 million mezzanine loan is secured by pledges of equity
interests in certain outlet centers. The loan is for a term of
three years, requires fixed amortization each month and is pre-
payable at any time after one year, subject to the payment of
certain exit fees. The interest rate is a floating rate based on
one-month Libor plus 950 basis points. The loan contains financial
and other covenants that restrict, among other things, the ability
of the Company to incur additional indebtedness or pay dividends
(other than dividends needed to maintain the Company's status as a
REIT). In connection with the financing the Company issued
warrants to the Lending Group to purchase one million shares of
the Company's common stock at an exercise price of $1.00 per

The $20 million non-recourse first mortgage loan secured by the
Company's outlet center in Puerto Rico is for a term of three
years, requires monthly amortization based upon a 25-year schedule
for the first year and a 15-year schedule thereafter. The loan is
pre-payable at any time subject to certain prepayment and exit
fees. The interest rate is floating based on one-month Libor plus
350 basis points.

The $10 million second mortgage loan secured by the Company's
outlet center in Hagerstown, Maryland is for a term of 30 months
co-terminus with Mercantile's existing $49 million first mortgage
loan. The loan requires monthly amortization starting in the
seventh month of $164,000 per month and is pre-payable at any time
without penalty or fee. The interest rate is floating based on one
month Libor plus 250 basis points.

The proceeds from the mezzanine loan, the Puerto Rico mortgage
loan, the Hagerstown mortgage loan and the sale of the four outlet
centers were used to pay off $125 million of short-term debt. The
remainder of the proceeds will be used for general corporate
purposes, including the funding of certain programs to attract and
retain tenants through increased marketing and capital

The Company also executed agreements to extend the terms of two
loans. The term of the $112 million loan from Nomura, which was to
mature on June 11, 2001, was extended until December, 2003. In
consideration for the extension, the interest rate was increased
to 13.0%, the monthly amortization was adjusted to the greater of
50% of excess cash flow or $50,000, and a loan extension fee of
$1.1 million was paid. The loan may be prepaid at any time. The
term of the $20 million first mortgage loan on the Company's
outlet center in Lebanon, Tennessee from KeyBank, which was to
mature on December 31, 2000, was extended for a period of six
months until June 30, 2001, with an additional three-month
extension available if certain conditions are met. In
consideration for the extension, the interest rate was increased
by 125 basis points to one-month Libor plus 300 basis points and
the loan balance was reduced to $19 million by the payment of $1.0
million toward principal. The loan may be prepaid at any time.
Commenting on today's announcement, Prime Retail Chairman and CEO
Glenn D. Reschke expressed optimism regarding the future of the
Company, "Today's transactions are the culmination of nearly seven
months of effort to complete a complex refinancing of the
Company's debt, including the extension of two near-term
maturities. These transactions mark the critical first step toward
Prime Retail's return to financial stability."

Reschke added, "These transactions should stabilize the Company's
financial condition, eliminate the threat of bankruptcy, and
strengthen the Company's balance sheet by reducing our overall
level of debt and extending certain loan maturities. This, in
turn, provides the Company with the opportunity to use cash flow
from the projects to reduce the new debt over time. The Company
intends to continue to pursue, on a selective basis, the sale of
ahe Company with the capital needed to increase sales and traffic
for our tenants through additional marketing initiatives and
physical improvements and enhancements at our outlet centers."

As previously announced, the Company was in default of the $20
million subordinated loan made by FBR Asset Investment Corporation
("FBR-AIC") that matured August 14, 2000. The default under the
FBR-AIC loan triggered cross- default provisions with respect to
other Company debt facilities. In addition, as previously
announced, the Company was not in compliance with financial
covenants contained in certain of its debt facilitirelated to
projects in which the Company owns joint venture interests that
have matured remain in default: a $10 million first mortgage loan
on Phase I of the outlet center in Bellport, New York, held by
Union Labor Life Insurance Company; a $30 million first mortgage
loan on the Company's outlet center in New River, Arizona held by
Fru-Con Development Corporation ("Fru- Con"); and a $13 million
first mortgage loan on the outlet center in Oxnard, California,
also held by Fru-Con. Fru-Con is also the Company's 50% partner in
both New River and Oxnard. As of this date only Union Labor Life
Insurance Company has filed for foreclosure. None of the three
loans is recourse to the Company. The Company does not believe the
existing defaults under these loans or any related foreclosures on
the mortgaged properties represent a material financial risk to
the Company.

Prime Retail is a self-administered, self-managed real estate
investment trust engaged in the ownership, leasing, marketing and
management of outlet centers throughout the United States and
Puerto Rico. After the effect of the sale of four centers, Prime
Retail's outlet center portfolio consists of 48 outlet centers in
25 states and Puerto Rico totaling 13.5 million square feet of
GLA. The Company also owns three community shopping centers
totaling 424,000 square feet of GLA and 154,000 square feet of
office space. As of November 30, 2000, Prime Retail's outlet
center portfolio (excluding the four sold projects) was 92.7%
occupied. Prime Retail has been an owner, operator and a developer
of outlet centers since 1988. For additional information, visit
Prime Retail's web site at

PSINET, INC: Ex-Metamor Shareholders Renew Class Action Suits
Wechsler Harwood Halebian & Feffer LLP has been engaged to file a
class action lawsuit against PSINet, Inc. and certain other
defendants in the United States District Court for the Eastern
District of Virginia on behalf of all investors who acquired the
common stock of PSINet, Inc. (Nasdaq: PSIX) through the Company's
merger with Metamor Worldwide Inc. which was consummated on or
about June 16, 2000.

Plaintiffs charge that PSINET and certain other defendants
violated Sections 11, 12(a)(2) and 15 of the Securities Act of
1933, by issuing a materially false and misleading registration
statement and prospectus in connection with the Merger.  
Plaintiffs allege that defendants overstated PSINet's results of
operations and financial condition for the year ended December 31,
1999.  Plaintiffs also allege that defendants failed to disclose
the incomparability of the operations of Metamor and the state of
the Company's true financial position and liquidity.   Finally,
plaintiffs allege that defendants misrepresented PSINet's overall
revenue growth rate and business prospects particularly in regard
to the Company's international web-hosting presence.

On November 2, 2000, PSINet issued a press release announcing the
resignation of its president, a planned dramatic restructuring of
the Company, and fourth quarter results well below its prior
guidance.  In response to this announcement the price of PSINet
common stock plummeted by more than 55%.

RELIANCE GROUP: Ichan's Dec. 21 Letter to the Board of Directors
                  High River Limited Partnership
                    c/o Icahn Associates Corp.
                         767 Fifth Avenue
                     New York, New York 10153

                                   December 21, 2000

Board of Directors
Reliance Group Holdings, Inc.
Park Avenue Plaza
55 East 52  d  Street
New York, New York


We are the owners of a significant amount of Reliance Group
Holdings, Inc. ("RGH") outstanding bonds and of the secured debt
of Reliance Financial Services ("RFSC").  In addition, we have
announced our intention to conduct a tender offer for RGH bonds in
which we would buy tendered bonds at approximately a 100% premium
to the market on the day of the announcement.

We continue to be perplexed concerning the way that RGH has acted,
and is continuing to act, in the negotiations relating to the
outsourcing of the claims department at Reliance Insurance and its
subsidiaries ("RIC").  It leads one to suppose that there is a
hidden agenda, which is being given much higher priority than your
concern for the holders of Reliance securities at all levels.  
Your fiduciary duty should compel you to consider all available
alternatives, including unsolicited ones, to weigh them against
each other, to discard considerations which might be in
management's best interest but not those of its constituencies,
and then to make the proper decision.  There are billions of
dollars of claims and assets that hang in the balance.  If they
are not properly managed any recovery for stakeholders could be

As you know, the leverage on the components of value at RIC, is
such that small swings in recovery percentages (on reinsurance
receivables) and claims payment arrangements (both on direct and
indirect reinsurance claims) can and will have a significant
impact on the capital surplus at the insurance company level and
could obliterate any potential for a recovery for either the
senior bank lenders or the bondholder groups.  As we have stated
previously, we believe that the inherent conflicts that exist
between a third party claims service provider and a related major
insurance industry broker, if not in fact then at least in
perception, could cause this deterioration to become a reality.

I find it interesting that the management of RGH keeps advising us
as to the correct course of action that should be undertaken and
that the advisors to the senior bank lenders and bondholder
committee keep listening.  Isn't this the same RGH management and
board that has managed the company during the time when the
trading value went from in excess of 93 cents on the dollar to
less than 10 cents and bank debt that has gone from par to 50
cents on the dollar[?]

We continue to express our strong opposition to the way that RGH
and its subsidiaries are conducting their affairs, especially
concerning the arrangements that are apparently being made for
claims department.  You will recall that in mid-November when RGH
was about to finalize a previous iteration of the claims
management contract, we voiced our strong objection, even in the
face of management's scare tactics and threats that the only
alternative then available was the taking of control by the
insurance regulators of the assets of RIC.  We felt then as we do
now that even rehabilitation by the regulators would be far
superior to an arrangement which we feel is destined to cause both
the lenders to RFSC and the bondholders at RGH to fail to receive
repayment of your obligations to them.  Following our objections,
the insurance regulators held a meeting to discuss the situation.

Subsequently, when we met with the insurance regulators,
bondholders and holders of the secured debt, we again voiced our
strong opposition to the proposed arrangements, citing exorbitant
fees, inherent conflicts and the absence of any coherent
expression of the circumstances for termination of the arrangement
so that RIC could again control its own destiny.  We made clear
our understanding that in seeking a claims management services
arrangement, RGH did not actually seek other bids or put in place
a competitive process that would provide it a significant
advantage.  The insurance regulators strongly suggested that a
competitive process be undertaken.  Thereafter, you received a
proposal from Risk Enterprise Management.  You now appear
determined to finalize the arrangement with Cambridge without
fully exploring, considering and negotiating the proposal
submitted by Risk Enterprise Management.  We believe that the
process you have invoked is flawed and outrageous.  You are
conducting an auction in which you, as the auctioneer, fail to
recognize one of the bidders.  Thus, the natural bidding process
that would make the transaction more advantageous to Reliance is
not taking place.  As you realize, any recovery to bondholders or
even bank lenders is currently highly questionable at best.  To
pursue the Cambridge transaction in the way you are doing, we
believe, could literally put the last nail in the coffin and
obliterate any chance of recovery for these constituencies.

You determined in late November to exclude us entirely from the
process even though we had been a party to the discussions during
the weeks prior to the meeting with the insurance regulators and
even though we were instrumental in creating the impetus for the
Company to lower its costs in connection with the transfer of the
claims department by millions of dollars.  Your purported reasons
for excluding us are, in our opinion, unwarranted and designed to
frustrate our efforts to help you maximize the values available
for Reliance security holders at all levels.  In excluding us you
have caused us to consider alternatives available to us,
including, but not limited to, participating in the filing of an
involuntary proceeding against Reliance.  At this time, we have
not yet chosen that alternative.

As you are aware, we have announced our intention to commence a
tender offer for RGH bonds.  Given our views regarding the
arrangement you are considering entering into, you obviously know
that the consummation of the tender offer would be conditioned on
your not entering into any arrangement or agreement involving the
sale, lease, management, transfer or other disposition of
substantial rights, properties or assets, such as claims
department arrangements which you were and are considering.  While
we can waive that condition, your failure to enter into an
acceptable arrangement may cause those bondholders who wish to
take advantage of our tender offer to be denied the opportunity to
take advantage of our above market offer.

You have issued a release urging holders of the bonds to wait
before tendering their bonds to see your restructuring plan that
you indicate you are working towards.  Unfortunately, we have no
confidence that the plan, if any, will be beneficial to all of
your constituencies, including the bondholders, to whom you have a
fiduciary duty and we are specifically concerned that you will
embark on an ill-advised plan in which you commit to third parties
in a manner that will be irrevocable or expensive to fix.  By that
time, you may well have forced the tender offer off the table as a
result.  We hope you will be mindful of your fiduciary duties in
making this crucial final decision.

                                   Very truly yours,

                                   High River Limited Partnership

SOTHEBY'S HOLDINGS: Moody's Cuts Senior Notes to Ba2, For Now
Moody's Investors Service lowered the rating of Sotheby's
Holdings, Inc. ("Sotheby's") $100 million senior notes, due 2009,
to Ba2 from Baa3, assigned a Ba1 senior implied rating to
Sotheby's, and lowered the short-term debt rating of its
subsidiary, Sotheby's, Inc., to Not Prime from Prime-3. The senior
note and senior implied ratings remain under review for further
possible downgrade. The downgrade reflects concerns over the
financial and business impact of Sotheby's pending antitrust
litigation settlements and its substantially increased reliance on
secured bank debt (not rated by Moody's). The rating review will
focus on: 1) the final terms of the settlement of its pending
antitrust cases; 2) Sotheby's financial flexibility in addressing
the scheduled maturity of its bank facility; and 3) progress in
realizing operating result improvements from recent strategic

The Ba2 rating reflects Sotheby's solid franchise within the
auction services and art-related secured lending businesses.
Moody's cited the company's strong reputation, long history, and
commanding share in a near-duopoly industry as credit strengths.
Moody's also views Sotheby's progress toward settling its United
States civil and criminal price-fixing lawsuits as a positive step
under the circumstances.

Nevertheless, Sotheby's net cash payments under the lawsuits and
related litigation expenses are material, and coupon redemptions
could have an additional meaningful adverse impact on cash flow
and profitability. Moody's believes that the final settlement
terms will broadly track the current preliminary terms, although
further modifications, particularly for the civil suits, are
possible and will be a factor in the rating review.

The rating agency also noted that the company's recent
expenditures to develop an Internet business and to improve its
York Avenue facilities, coinciding with the litigation payments,
have weakened its balance sheet, with debt levels at historical
highs for the company. With work near complete on its York Avenue
facilities and the internet business now operational, the company
projects decreased investment spending requirements for 2001, but
operating cash flow is likely to remain weak. The proximity of the
bank loan maturity also exposes Sotheby's to refinancing risk.

Moody's indicated that Sotheby's ability to pledge its York Avenue
property and secured art loans strengthens its bargaining position
with the bank group, although simultaneously subordinates

The company's Internet venture, although costly to start up, and
other reorganization efforts offer avenues for improving operating
performance, if successful. Still, Moody's cited the potential
volatility of the industry over shorter time periods as a risk.

There is uncertainty regarding several key business determinants,
such as the relative strength of demand for live and electronic
art auctioning services, and the availability of art for
consignment in any period. This volatility could prove
particularly stressful in what may be a period of slower economic
growth and while the company's debt levels are high. An additional
area of focus will be the incidental impact of the litigation on
Sotheby's franchise value over the long term.

The Ba1 senior implied rating reflects Moody's fundamental credit
assessment of the Sotheby's enterprise, without regard to priority
of claims to collateral. The Ba2 senior note rating reflects the
priorities of the senior secured bank debt in the capital
structure. In addition, the notes are obligations of the holding
company and do not benefit from subsidiary guarantees, in contrast
to the positioning of the senior secured bank debt.

Sotheby's Holdings, Inc., through its operating subsidiaries,
engages in auction activities, art sales, and residential real
estate, primarily in New York and London, and in several locations
worldwide. Sotheby's Holdings, Inc., headquartered in Bloomfield
Hills, Michigan, reported approximately $443 million of revenue
for calendar 1999.

SOUTHERN MINERAL: Executes Merger Agreement with PetroCorp Inc.
Southern Mineral Corporation (OTC Bulletin Board: SMOP) and
PetroCorp Incorporated (Amex: PEX) announced they have executed a
definitive agreement regarding Southern Mineral's merger into
PetroCorp. In the merger, shareholders of Southern Mineral will,
at their election, receive for each share of Southern Mineral
stock $4.71 per share in cash, PetroCorp common stock or a
combination of cash and stock, subject to certain adjustments. For
both companies, the merger provides strategic and economic
benefits. The operations of the two companies are very
complementary, with PetroCorp primarily operating in the Gulf
Coast and Mid-continent areas of the United States and Southern
Mineral primarily operating in the Gulf Coast of the United
States. PetroCorp and Southern Mineral both have significant oil
and gas interests in the province of Alberta, Canada.

Additionally, the combined company will benefit by having a
substantially greater critical mass and the cost savings resulting
from the consolidation of operations.

Steven H. Mikel, President and CEO of Southern Mineral, said of
the merger: "Our patience and focus have been rewarded. PetroCorp
and Southern Mineral make a perfect fit for each other.

PetroCorp's business platform provides the ready-made operating
resources and experience, inventory of properties, and strategic
plan for Southern Mineral, which recently restructured its
operations. In turn, Southern Mineral provides PetroCorp with
additional high-quality properties and related cash flow."

Gary R. Christopher, President and CEO of PetroCorp stated: "This
transaction is a combination of two 'small cap' exploration and
production companies each with excellent asset bases in similar
areas of operation. This combination is a first step in
PetroCorp's goal of growing its asset and shareholder base, while
still maintaining a low cost of general and administrative expense
through PetroCorp's management agreement with Kaiser- Francis Oil
Company. The new PetroCorp will be larger, have stronger cash
flow, greater shareholder liquidity and be poised to be even more
aggressive in seeking additional merger, acquisition and/or
exploration partners."

In connection with the merger, PetroCorp will not be obligated to
issue more than four million or less than three million shares of
common stock. The merger is subject to customary conditions to
closing, including obtaining shareholder and regulatory approvals
and, consents having shareholders elect to receive at least three
million shares of PetroCorp stock, which is expected to result in
a tax free reorganization. The transaction is anticipated to close
by April 30, 2001.

Frederic Dorwart, LLP served as legal advisor to PetroCorp. Petrie
Parkman and Co. acted as financial advisor to Southern Mineral and
provided a fairness opinion to Southern Mineral and Akin, Gump,
Strauss, Hauer and Feld, LLP provided legal counsel to Southern

Southern Mineral Corporation is an independent oil and gas company
engaged in the acquisition, exploitation, exploration and
operation of oil and gas properties, primarily along the Gulf
Coast of the United States, in Canada and in Ecuador. The
Company's common stock and perpetual warrants are quoted on the
OTC Bulletin Board under the trading symbols "SMOP.OB" and
"SMOPW.OB", respectively.

PetroCorp Incorporated is an independent energy company engaged in
the acquisition, exploration and development of oil and gas
properties, and in the production of oil, natural gas liquids and
natural gas in North America.

Southern Mineral Corporation and PetroCorp Incorporated will file
a proxy statement/prospectus and other relevant documents
concerning the proposed merger transaction with the SEC. INVESTORS
to obtain the documents free of charge at the web site maintained
by the SEC at In addition, you may obtain documents
filed with the SEC by Southern Mineral free of charge by
requesting them in writing from Southern Mineral Corporation Attn:
Investor Relations, 1201 Louisiana Street, Suite 3350, Houston, TX
77002. You may obtain documents filed with the SEC by PetroCorp
free of charge by requesting them in writing from PetroCorp
Incorporated, Attn: Investor Relations, P.O. Box 21298, Tulsa,
Oklahoma 74121-1298, or by telephone, (918) 491-4500.

U.S. TRUCKING: Posts $27 Million Loss through Sept. 30, 2000
U.S. Trucking, Inc. (OTCBB:USTK) announced results from operations
for the third quarter of 2000.

The Company reported revenues for the three months ending Sept.
30, 2000 of $ 16.5 million and for the nine months ending Sept.
30, 2000 of $56.8 million. Net loss for the three months ending
Sept. 30, 2000 was $21,528,689 and net loss for the nine months
ending Sept. 30, 2000 was $26,962,388. The basic earnings per
share for the nine months ending Sept. 30, 2000 was a loss of$1.16
per share and the basic earnings per share for the three months
ending Sept. 30, 2000 was a loss of $2.10 per share.

Commenting on the filings, Dan L. Pixler, Chairman and sole
Director of U.S. Trucking, Inc. stated, "We have taken every
charge against earnings as possible including the write down of
goodwill on discontinued operations, increased reserves for bad
debts, loss from discontinued operations and the loss on sale
of equipment."

In further comments, Pixler stated, "Taking all of the accounting
charges was the prudent thing to do. Considering the recent
bankruptcy filings on the Company's operating subsidiaries and the
fact that our publicly traded holding company is not involved in
the bankruptcies, we wanted to make sure we created a clean base
for the rebuilding that we are going through at this time. We are
currently negotiating with several small transportation companies
and hope some movement will occur in the near future."

U.S. Trucking, Inc. is a publicly traded transportation services
holding company.

VENCOR, INC: Proposes New Workers' Compensation Insurance Program
At the outset of Vencor's chapter 11 cases, the Debtors sought and
obtained the Court's authority to make payments necessary to
maintain certain insurance coverage, bonds and related
administration procedures, and specifically to make payments on
the prepetition insurance arrangements with Vencor's captive
insurance company, Cornerstone Insurance Company and various third
party insurers.

Previously, by way of an Assumption and Renewal Motion in
December, 1999, the Debtors sought and obtained the Court's
authority to

   (i)   assume certain third party insurance agreements with AIG

   (ii)  enter into new insurance agreements with AIG, including
          an insurance premium finance agreement, and to

   (iii) renew, if necessary, the AIG Insurance Agreements during
          the pendancy of their chapter 11 cases.

Pursuant to the Assumption and Renewal Order, the Debtors have
current arrangement with AIG covering their potential workers
compensation liabilities (the AIG Workers Compensation Coverage).
Pursuant to the arrangement, the Debtors paid AIG, at the
Inception of such coverage, a premium of approximately $31 million
which is primarily a Forecasted Amount reflecting a discounted
actuarial forecast of the Debtors' workers compensation liability
during the policy period. A three tiered insurance coverage
structure for workers compensation is established whereby,

   (1) AIG served as the primary insurer for the first $3l million
of such workers compensation liability,

   (2) AIG and the Debtors equally shared all liability which
exceeded $31 million up to $36.4 million, and

   (3) AIG exclusively insured all such liability in excess of
$36.4 million.

In addition, AIG provided a wide range of administrative services
related to workers compensation claims. Under this current
coverage structure, AIG keeps the entire amount of the $31 million
premium plus any interest earned thereon, except that, if the
Debtors' actual workers compensation losses for the policy period
are below $23.2 million, then AIG will refund fifty percent of the
difference between $23.2 million and the Forecasted Amount.

The Assumption and Renewal Order authorizes the Debtors to renew
the AIG Workers Compensation Coverage as their terms expire,
without further order of the Court. The AIG Workers Compensation
Coverage is due to expire as of January 1, 2001. With the intent
for renewal, the Debtors investigated and negotiated with AIG the
most cost effective structure for such insurance.

As a result, the Debtors desire a slightly modified arrangement
which will provide added financial flexibility, by way of three
tiered coverage but shifts the Debtors' responsibilities to the
Debtors' captive wholly owned non-debtor affiliate Cornerstone,
pursuant to the Proposal of Risk Management Program. The modified
structure remains subject to further negotiation between the
Debtors, Cornerstone and AIG. The Debtors note that the
description of the modified structure in the motion is subject to
change, but any material variance between the actual renewed and
modified AIG Workers Compensation Coverage shall be either within
the authority encompassed under the Assumption and Renewal Order,
or on terms no less favorable to the Debtors than those described
in the motion.

Pursuant to the Modified Structure,

(1) AIG provides primary insurance up to a fixed amount, currently
     approximately $40 million, subject to Cornerstone's
     obligation to reinsure AIG for such liabilities.

(2) AIG shoulders the exclusive burden for aggregate liabilities
     in excess of $40 million but less than $50 million, and

(3) AIG provides primary insurance for aggregate liabilities
     exceeding $50 million, subject to Cornerstone's and Vencor
     Inc.'s joint and several obligation to reimburse AIG for such

The Debtors shall pay a premium, with a loss provision of
approximately $30 million, for such modified coverage with one
half of such premium to be paid at inception and the remainder to
be paid over the following nine months.

To meet AIG's requirements for security, all collateral provided
by the Debtors or Cornerstone in connection with the AIG Insurance
Agreements, as such agreements may be amended and renewed from
time to time, shall be security for any and all obligations of the
Debtors or Cornerstone arising from such agreements.

Under this modified structure, AIG essentially holds the premium
as security for Cornerstone's reinsurance obligation to AIG for
the first tier of coverage. This difference from the current AIG
Workers Compensation Coverage structure provides two significant
financial benefits to the Debtors. First, if the Debtors' actual
workers compensation liabilities during the policy period are
lower than the Forecasted Amount for the new policy period, then
one hundred percent of the amount by which actual liabilities fall
short of such Forecasted Amount shall be refunded to the Debtors.
Second, so long as the Forecasted Amount is not exceeded, interest
earned on the premium deposit shall be paid by AIG to the Debtors.
At interest rates comparable to those earned and retained by AIG
under the current structure, the Debtors estimate that they could
earn up to $5.1 million in interest under this modified structure.

In the exercise of their business judgment, the Debtors have
determined that renewal and modification of the AIG Workers
Compensation Coverage is in the best interests of the Debtors,
their estates and their creditors, and is amply justified. First,
the Debtors are required to maintain insurance covering workers
compensation liabilities pursuant to federal or state statutory
requirements. Second, workers compensation insurance structures
such as the modified AIG Workers Compensation Coverage have become
standard practice among large nursing home companies. The Debtors
submit that such industry wide practice evidences the efficacy of
the Debtors' business judgment to adopt a similar insurance
regime. Third, the AIG Workers Compensation Coverage carries the
potential for the Debtors to realize significant financial
benefits of up to $5.1 million in interest on the premium and
possible premium refunds that exceed any similar financial
benefits provided under the current structure. Fourth, the Debtors
have a long standing business relationship with AIG which has
resulted in AIG consistently providing the Debtors with the lowest
cost insurance programs suitable for the Debtors' needs and often
providing the Debtors with insurance coverage when other insurers
were unwilling or unable to do so.

Accordingly, the Debtors, by and through their attorneys, Cleary,
Gottlieb, Steen & Hamilton and Morris, Nichols, Arsht & Tunnell,
move the Court for authorization to renew and modify their
insurance arrangement with American International Group and its
affiliates, and to provide insurance covering the Debtors'
potential workers compensation liabilities. (Vencor Bankruptcy
News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 609/392-

WHEELING-PITTSBURGH: Hires PwC Securities as Financial Advisor
Wheeling-Pittsburgh Corporation and its debtor-affiliates
submitted an Application to Judge Bodoh requesting that he
authorize their employment of the firm of PricewaterhouseCoopers
Securities LLC as investment bankers and financial advisors for
the Debtors. PwC Securities will provide such specific services
for the Debtors as PwC Securities and the Debtors shall deem
appropriate and feasible in order to advise the Debtor in the
course of these Chapter 11 cases, including:

   (a) Advising the Debtors generally on strategic and financial
alternatives, including specific courses of action and assisting
the Company with the design of alternative transaction structures
and any debt and equity securities to be issued in connection with
such reorganization;

   (b) Assisting the Debtors in obtaining debtors-in-possession

   (c) Analyzing the Debtors' business plan and financial

   (d) Assisting the Debtors with the development, negotiation and
implementation of a restructuring transaction with creditors and
other parties involved in the reorganization of the Debtors;

   (e) Assisting the Debtors in valuation estimates of the
Debtors' assets and operations; provided that any real estate and
fixed asset appraisals will be executed by outside appraisers;

   (f) Providing expert advice and testimony relating to financial
matters related to a restructuring transaction, including the
feasibility of any restructuring transaction, the valuation of any
securities issued in connection with a restructuring transaction,
and any other matters as to which PwC Securities is rendering
services hereunder;

   (g) To the extent requested by the Debtors, advising the
Debtors as to potential mergers or acquisitions, and the sale or
other disposition of any of the Debtors' assets or businesses;

   (h) Advising the Debtors as to any potential financings, either
debt or equity other than with respect to any financings by any of
the Lenders under Debtors' existing credit facility or the
provision of additional capital by Debtors' shareholders;

   (i) Assisting the Debtors' management with presentations made
to the Boards of Directors of the Debtors regarding potential
restructuring transactions and/or other issues related to the
Debtors' contemplated reorganization; and

   (j) Rendering such other financial advisory and investment
banking services as may be mutually agreed upon by the Debtors and
PwC Securities.

The types of transactions contemplated by the Debtors' retention
of PwC Securities include, but are not limited to, a transaction
in which the Debtors' debt is restructured, substantially all of
the Debtors' assets are sold, or a plan of reorganization is
confirmed by the Bankruptcy Court. PwC Securities, at the request
of the Debtor and with the required court approvals, may provide
additional financial advisory services which are deemed
appropriate and necessary for the Debtors' cases. A restructuring
transaction is a restructuring of the Debtors' liabilities that
includes, but is not limited to, unsecured debt, employee and
union liabilities, other unsecured claims, preferred stock,
and common stock consummated either out-of-court or through a
Chapter 11 process.

PwC Securities will be compensated by these estates on the
following basis:

   (a) Advisory Fee. The Debtors will pay PwC Securities a cash
fee of $150,000 per month;

   (b) Additional Fee. The Debtors will pay PwC Securities an
Additional Fee at the completion of the engagement. The amount of
the Additional Fee will be determined by a qualitative assessment
determined by mutual agreement of PwC Securities and the Debtors
and will be based on several factors, including:

        (1) the complexity of the consummated transaction;

        (2) the creativity and quality of advice provided by PwC;

        (3) the efficiency with which PwC rendered professional

        (4) the value added to the engagement by PwC Securities;

        (5) the current market compensation for these types of

Based on the experience of PwC Securities with similar
engagements, this Additional Fee is expected to be between
$3,500,000 and $4,500,000; and

   (c) Other Services. To the extent that the Debtors request PwC
Securities to perform additional services not contemplated by the
descriptions set forth above, the Debtors will pay PwC Securities
such fees as may be mutually agreed upon by the Debtors and PwC
Securities, in writing, in advance, subject to further court
approval as required.

   (d) Indemnity. Recognizing that PwC Securities' role is
advisory, and in partial consideration for the investment banking
services to be rendered to the Debtors, the Debtors have agreed to
indemnify and hold harmless PwC Securities and associated or
affiliated firms, partners, principals, directors, officers,
officers, employees, affiliates, agents or any other persons
retained in connection with the performance of these financial
advisory services harmless from any and all claims, losses,
damages, deficiencies, joint or several liabilities, lawsuits,
judgments, costs, and expenses which arise out of, or are based
upon, PwC Securities' engagement in these cases or the financial
advisory services performed by PwC Securities. However, damages,
fees or settlement payments are excluded if a court of competent
jurisdiction determines that the damages resulted from willful
malfeasance or gross negligence of any of the indemnified parties.

Mr. Sudhin Roy, a Managing Director of PwC Securities, disclosed,
on behalf of PwC Securities, that the firm has received a payment
of $185,000 in fees and $15,000 in related expenses for pre-
petition services rendered the Debtors. PwC Securities is not owed
any further payments for pre-petition services rendered to the
Debtors or expenses incurred.

On behalf of PwC Securities, Sudhin Roy stated to the Bankruptcy
Court that the firm is disinterested and has no conflicts in its
representation of these estates. However, in the interests of
complete disclosure, Mr. Roy stated that estate professionals such
as Jay Alix is a recurring client of PwC Securities, and that both
of D&P and Calfee, Halter are non-recurring clients, as is Bank
One, an indenture trustee in these estates. Donaldson, Lufkin is a
recurring client, as is Crestar Bank (now Sun Trust), and DLJ
Capital Funding, while each of Citicorp Securities, Citibank NA,
Citicorp USA, National City Bank, and First Union National Bank is
a non-recurring client. Bank of America NT&SA and Heller Financial
are recurring clients, while American Bank & Trust Company is a
non-recurring client. In these and other instances described by
Mr. Roy, the firm did not and does not represent these parties in
any matters adverse to these estates.

Upon this disclosure and after finding proper notice, Judge Bodoh
granted the Application (Wheeling-Pittsburgh Bankruptcy News,
Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-0900)

* Meetings, Conferences and Seminars
January 9-14, 2001
          National CLE Conference on Bankruptcy Law
             Marriott, Vail, Colorado
                Contact: 1-800-926-5895 or

February 22-23, 2001
          Commercial Real Estate Defaults, Workouts,
          and Reorganizations
             Wyndham Palace Resort, Orlando
             (Walt Disney World), Florida
                Contact: 1-800-CLE-NEWS

February 25-28, 2001
          Norton Bankruptcy Litigation Institute I
             Marriot Hotel, Park City, Utah
                Contact: 770-535-7722 or

February 28-March 3, 2001
          Spring Meeting
             Hotel del Coronado, San Diego, CA
                Contact: 312-822-9700 or

March 8-9, 2001
          Corporate Mergers and Acquisitions
             Renaissance Stanford Court, San Francisco, California
                Contact: 1-800-CLE-NEWS

March 28-30, 2001
          Healthcare Restructurings 2001
             The Regal Knickerbocker Hotel, Chicago, Illinois
                Contact: 1-903-592-5169 or

March 29-April 1, 2001
          Norton Bankruptcy Litigation Institute II
             Flamingo Hilton; Las Vegas, Nevada
                Contact: 1-770-535-7722 or

April 19-21, 2001
          Fundamentals of Bankruptcy Law
             Some Hotel in San Francisco, California
                Contact: 1-800-CLE-NEWS

April 26-29, 2001
          71st Annual Chicago Conference
             Westin Hotel, Chicago, Illinois

May 17-18, 2001
          Bankruptcy Sales & Acquisitions
             The Renaissance Stanford Court Hotel,
             San Francisco, California
                Contact: 1-903-592-5169 or

June 13-16, 2001
       Association of Insolvency & Restructuring Accountants
          Annual Conference
             Hyatt Newporter, Newport Beach, California
                Contact: 541-858-1665 or

June 28-July 1, 2001
          Western Mountains, Advanced Bankruptcy Law
             Jackson Lake Lodge, Jackson Hole, Wyoming
                Contact: 770-535-7722 or

July 26-28, 2001
          Chapter 11 Business Reorganizations
             Hotel Loretto, Santa Fe, New Mexico
                Contact: 1-800-CLE-NEWS

The Meetings, Conferences and Seminars column appears
in the TCR each Wednesday. Submissions via e-mail to are encouraged.


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

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles available
from -- go to
-- or through your local bookstore.

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


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

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

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

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained herein
is obtained from sources believed to be reliable, but is not

The TCR subscription rate is $575 for six months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher Beard
at 301/951-6400.

                * * * End of Transmission * * *