TCR_Public/001229.MBX         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Friday, December 29, 2000, Vol. 4, No. 254


APPLIED EXTRUSION: S&P Places Ratings on Watch Negative
ARMSTRONG WORLD: Proposes Adequate Assurance for Utilities
BETHLEHEM STEEL: Moody's Drops Debt Ratings & Outlook Negative
BRADLEES, INC: Case Summary
BRADLEES, INC: J. Baker Planned for Retailer's Liquidation

BRADLEES, INC: Nasdaq Halts Trading Pending Additional Information
BREED TECHNOLOGIES: Chapter 11 Plan Declared Effective Dec. 26
COMMODORE HOLDINGS: Cruise Operator Seeks Chapter 11 Protection
COMMODORE HOLDINGS: Nasdaq Halts Trading Pending More Information
DIAL CORP: Moody's Places Debt Rating on Review for Downgrade

DIGITAL BROADBAND: Case Summary and 20 Largest Unsecured creditors
FINOVA GROUP: Ratings Downgraded, May Seek Bankruptcy Protection
FRUIT OF THE LOOM: Puts Claims Objection Protocol on the Table
HARNISCHFEGER: Objects to Mitsui's "No Less than $29.99MM" Claim
HURRICANE HYDROCARBON: Says It'll Pay $30MM Interest Due Dec. 31

ICG COMMUNICATIONS: Hires Gleacher & Co. as Financial Advisors
INTEGRATED HEALTH: Lyric Health Care Defaults on Payments to IHS
LACLEDE STEEL: Leggett & Platt Inks $24.5MM Asset Purchase Deal
LERNOUT & HAUSPIE: GE Capital Extends $35 Million DIP Financing
MTS INC: S&P Places Ratings on Watch with Negative Implications

NORTHWESTERN STEEL: S&P Applies D Rating after Chapter 11 Filing
OUTBOARD MARINE: Case Summary and 5 Largest Unsecured Creditors
OUTBOARD MARINE: S&P Lowers Ratings to D after Chapter 11 Filing
OWENS CORNING: Files Schedules of Assets and Liabilities
OXFORD HEALTH: Buys-Back Texas Pacific Preferred Shares & Warrants

PAUL HARRIS: Flagship Indianapolis Store to Close
POLAROID CORP: S&P Lowers Ratings & Remains on CreditWatch
PONDER INDUSTRIES: Merger Plan with N-Vision Technology Approved
QUEPASA.COM: Board Approves Liquidation Plan for Hispanics Website
RECREATIONAL BOAT: Case Summary and 20 Largest Unsecured Creditors

RHYTHMS: Moody's Downgrades Senior Unsecured Debt Ratings to Caa1
U.S. TRUCKING: Changes Name to U.S. Holding & Relocates Offices
WHEELING-PITTSBURGH: Hiring PSG as Procurement Consultants
ZILOG INC: Moody's Mulls Downgrade of B2-Rated Senior Notes

* BOOK REVIEW: Merger: The Exclusive Inside Story of the Bendix-
               Martin Marietta Takeover War


APPLIED EXTRUSION: S&P Places Ratings on Watch Negative
Standard & Poor's today placed its ratings for Applied Extrusion
Technologies Inc. on CreditWatch with negative implications.

The CreditWatch placement reflects heightened concerns of tight
liquidity at a time when the company will have to address debt
repayment. As of Sept. 30, 2000, the company had only $12.7
million of availability under its revolving credit facility.
Borrowings have risen as a result of increased working capital
levels, partly driven by high raw material (namely resin) costs.
Although the company recently increased the size of the facility
to $90 million from $80 million, the company will most likely need
to increase borrowings under the facility to meet its semi-annual
interest payments ($8.6 million in both October and April), which
may further impair its liquidity. In addition, refinancing risk is
heightened by a meaningful debt maturity schedule, as the credit
facility comes due November 2001 and the public bonds are due
April 2002.

Applied Extrusion is a leading oriented polypropylene (OPP) films
producer in North America. The company benefits from a low cost
position due to its new, efficient production equipment. Although
capacity expansions have caused excess supply, the OPP market
should benefit from good growth prospects and moderating resin
prices. Standard & Poor's will continue to monitor developments,
Standard & Poor's said.


     Applied Extrusion Technologies Inc.
       Corporate credit rating                      B+
       Senior unsecured debt                        B

ARMSTRONG WORLD: Proposes Adequate Assurance for Utilities
In connection with the operation of their business and management
of their properties, Armstrong World Industries obtains
electricity, natural gas, water, sewer, telephone, communications,
television, trash collection, and other services of this general
character from approximately 140 different utility companies
throughout the United States. These utility services are said by
the Debtors to be essential to AWI's operation, and therefore must
continue uninterrupted during the pendency of AWI's Chapter 11

Generally AWI has a good payment history with the utility
companies for substantially all of its facilities. To the best of
the Debtors' knowledge, there are few defaults or arrearages, if
any, with respect to AWI's undisputed utility services invoices,
other than the payment interruptions that were caused by the
commencement of these chapter proceedings.

AWI proposes to provide the utility companies with adequate
assurance of future payment by rendering payment as administrative
expenses of these bankruptcy estates. This method of payment is
proposed, and was approved, without prejudice to the rights of any
utility company to request that the Court order additional
assurance, in writing, for itself within thirty days from the date
of the Motion, and that the burden of proof remain unaffected by
the Court's initial approval of AWI's proposal.

Prior to the Petition Date, the average monthly cost of AWI's
utility services was approximately $7,523,526.82. AWI expects that
there will be no material deviations from these monthly figures in
the future. The Debtors urged that adequate assurance of future
payment to utility companies was evident in these Chapter 11
cases, as AWI has more than sufficient availability of funds by
virtue of AWI's substantial liquidity, as well as the financing
available under the postpetition lending facility to be provided
by the Debtors' proposed lenders, with which to pay all
postpetition utility charges and other administrative expenses.

Upon these representations, the Court entered an Order finding
present adequate assurance of payment, without prejudice to the
right of any utility to present a request for further assurances
within thirty days of the Motion, and upon service of the same on
each utility. (Armstrong Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

BETHLEHEM STEEL: Moody's Drops Debt Ratings & Outlook Negative
Moody's Investors Service downgraded the ratings of Bethlehem
Steel Corporation (senior implied to B1 from Ba3). The downgrade
is based on the impact of steel market conditions on operating
performance, projected weakness in debt protection measurements,
the ongoing use of funds for shareholder enhancement activities,
and limited prospects for a near-term recovery in steel prices.
The rating also considers the company's position in the domestic
integrated steel sector, ongoing cost reduction and quality
improvement efforts, available near-term liquidity, and a growing
proportion of value-added shipments. The rating outlook is

Ratings downgraded are:

   * Bethlehem Steel Corporation:

      a) senior implied rating to B1 from Ba3,

      b) debentures and notes (including assumed obligations of
          Lukens, Inc.) to B2 from Ba3,

      c) preferred stock to "caa" from "b2",

      d) inventory secured bank credit agreement to Ba3 from Ba2.

Domestic steel producers have faced extremely difficult market
conditions during 2000. Prices have declined sharply in the past
six months. Imports are approaching the record level seen only two
years ago. Inventories throughout the supply chain are high.
Finally, industrial demand shows signs of weakness. Not
surprisingly in this environment, the industry's operating
performance has been dismal, and credit quality has suffered.
Bethlehem's performance thus far in 2000 has mirrored industry
trends, with operating margins declining from a slim 2.4% in the
second quarter to a negative 2.5% in the third. Debt protection
measures have also weakened. EBITDA interest coverage was
approximately 4x in the first half of 2000, but only 1.4x in the
third quarter. Given a further decline in pricing in the fourth
quarter, this measure could approach breakeven. The outlook for
pricing going into 2001 is also clouded. While prices appear to
have bottomed out, there are no signs that ongoing inventory
reduction, production curtailments and import reductions will
improve prices in the near term. Combined with potential demand
weakness from slowing economic activity, the prospects for
improvement in prices in the first half of 2001 are slim.
Moreover, contractual prices are expected to decline by at least
1-2% next year.

Bethlehem is addressing these market issues by reducing costs and
curtailing capital expenditures. Already-announced personnel
reductions, selective process improvement investments and
completion of the Sparrows Point cold mill project should improve
product quality and reduce costs, while capital expenditures will
decline toward maintenance levels. These measures, combined with
available cash and availability under the company's credit
facilities, should provide sufficient liquidity in the near term.
However, the company is pursuing additional share repurchases
which will utilize a portion of available funds. The two notch
downgrade for Bethlehem's unsecured debt reflects additional
notching relative to the senior implied rating given the company's
proportion of secured debt and the outlook for debt protection
measures given the trends in market conditions.

Bethlehem Steel Corporation, headquartered in Bethlehem,
Pennsylvania, is the second largest U.S. steel producer. Revenues
were $3.9 billion in 1999.

BRADLEES, INC: Case Summary
Debtor: Bradlees, Inc.
        One Bradlees Circle
        Braintree, Massachusetts 02184

Affiliate: New Horizons of Yonkers, Inc.

Type of Business: Holds real estate lease for a Bradlees
                   department store in Yonkers, New York.

Chapter 11 Petition Date: December 26, 2000

Court: Southern District of New York

Bankruptcy Case No.: 00-16036

Judge: Burton R. Lifland

Debtor's Counsel: Adam C. Rogoff, Esq.
                  Weil, Gotshal & Manges LLP
                  767 Fifth Avenue
                  New York, New York 10153
                  (212) 310-8000

Total Assets: $ 553,205,000
Total Debts : $ 525,836,000

BRADLEES, INC: J. Baker Planned for Retailer's Liquidation
J. Baker, Inc. (Nasdaq: JBAK) announced that it has reached an
agreement in principle with an affiliate of Bradlees, Inc. and
Gordon Brothers Retail Partners relating to the liquidation of the
footwear departments operated by the Company's Morse Shoe, Inc.
subsidiary in stores owned and operated by Bradlees (Nasdaq:

Bradlees announced that it had filed for protection under Chapter
11 of the U.S. Bankruptcy Code and had retained Gordon Brothers to
act as its agent to liquidate inventory in all of its 105 stores.

Pursuant to an Asset Purchase Agreement dated November 16, 2000
between the Company and Footstar Corporation, a subsidiary of
Footstar, Inc. (NYSE: FTS), by which the Company has agreed to
sell substantially all of the assets of its footwear businesses to
Footstar, Footstar received the option not to purchase the
licensed footwear departments in Bradlees and related assets in
the event that Bradlees publicly announced its intention to file
for bankruptcy protection or reduce its store count by 20% or more
prior to the closing date. Footstar has notified J. Baker that it
will exercise this right. The Company believes that the proceeds
it will receive for its inventory pursuant to the Bradlees
liquidation sale will be substantially the same as that which it
would have received from Footstar pursuant to the Asset Purchase
Agreement. The sale of J. Baker's ongoing footwear businesses to
Footstar is expected to close on or around February 3, 2001.

Alan I. Weinstein, President and Chief Executive Officer of J.
Baker commented, "We are very sad to note the demise of a long-
time licensor and a regional retail institution. We offer our best
wishes to our many friends at Bradlees on all future endeavors. At
the same time, we look forward to an orderly liquidation of the
footwear inventory associated with the Bradlees stores. We also
wish to reassure our investors that both J. Baker and Footstar
planned for this contingency in our Asset Purchase Agreement, and
we believe that this event will have no material impact on J.
Baker's plans and projections."

J. Baker operates retail businesses in large, under-served niche
markets. The company operates 600 retail stores, three catalog
titles and two commerce-enabled websites selling apparel and
accessories for big and tall men under the Casual Male Big & Tall,
Repp Ltd. Big & Tall and B&T Factory Stores trade names. The
company offers rugged workwear and healthcare apparel through its
70 Work 'n Gear stores, direct marketing offerings and e- commerce
initiatives. The company also operates 1,318 licensed footwear
departments in discount, department and specialty stores
nationwide through its JBI Footwear and Morse Shoe divisions.

BRADLEES, INC: Nasdaq Halts Trading Pending Additional Information
The Nasdaq Stock Market(SM) announced that trading was halted in
Bradlees, Inc. (Nasdaq: BRAD) for "additional information
requested" from the company at a last sale price of 7/32.  Trading
will remain halted until Bradlees, Inc. has fully satisfied
Nasdaq's request for additional information.

For news and additional information about the company, please
contact the company directly, or check under the company's symbol
using InfoQuotes(SM) on the Nasdaq(R) Web site.

For more information about The Nasdaq Stock Market, visit the
Nasdaq Web site at http://www.nasdaq.comor the Nasdaq  
Newsroom(SM) at

BREED TECHNOLOGIES: Chapter 11 Plan Declared Effective Dec. 26
Breed Technologies, Inc., a global producer of automotive safety
systems, announced its successful emergence from the Chapter 11
bankruptcy process it began on September 20, 1999. BREED's Plan of
Reorganization, confirmed by the United States Bankruptcy Court
for the District of Delaware on November 22, 2000, became
effective on December 26, 2000 and provides, among other things,
for the cancellation of all of BREED's common stock outstanding
prior to the effective date of the Plan. Under the Plan, BREED
will continue as a private corporation with new capital and
ownership structures. As previously announced, John Riess, the
former CEO of Gates Rubber Company, has been named BREED's Chief
Executive Officer. Additional details will be provided when the
company returns from its holiday shutdown on January 2, 2001.

COMMODORE HOLDINGS: Cruise Operator Seeks Chapter 11 Protection
Commodore Holdings Limited (Nasdaq:CCLN) announced that it must
suspend its cruise operations this weekend. The company has
cancelled cruises on the Enchanted Capri and on the Enchanted Isle
and Crown Dynasty. All passengers currently onboard the vessels
will be returned to their original ports of embarkation.

"We deeply regret having to take this action, but we had no other
choice," said Fred A. Mayer, chief executive officer of Commodore.
"Negotiations between the lenders holding our mortgages just could
not be resolved in time to avoid this consequence."

Commodore's troubles began with its ill-fated San Diego, Calif.
day cruises this past spring. The venture was plagued by
logistical difficulties and the passage of a state legislative
referendum favoring land-based gaming, which had a negative impact
on sales. Commodore decided to terminate the program last June,
but the heavy costs associated with the project continued to
affect its financial state.

Commodore has been working around the clock with its lenders
attempting to conclude a financing arrangement that would have
prevented the cancellation of these cruises but has been unable to
reach a final resolution. Commodore iled a petition for protection
under Chapter 11 of the United States Bankruptcy Laws. Pursuant to
such filing the company will develop a strategy to consolidate its
debts and then file its reorganization plan with the court.

The company is deeply sorry for the inconvenience the
cancellations of these cruises will cause its passengers.
Commodore is now making every effort to contact passengers on the
upcoming sailings to advise them of the cruise cancellations.

COMMODORE HOLDINGS: Nasdaq Halts Trading Pending More Information
The Nasdaq Stock Market(SM) announced that the trading halt status
in Commodore Holdings Limited (Nasdaq: CCLN) was changed to
"additional information requested" from the company.  Trading in
Commodore Holdings Limited had been halted.  Trading will remain
halted until Commodore Holdings Limited has fully satisfied
Nasdaq's request for additional information.

For news and additional information about the company, please  
contact the company directly, or check under the company's symbol
using InfoQuotes(SM) on the Nasdaq(R) Web site.

For more information about The Nasdaq Stock Market, visit the  
Nasdaq Web site at http://www.nasdaq.comor the Nasdaq  
Newsroom(SM) at

DIAL CORP: Moody's Places Debt Rating on Review for Downgrade
Moody's Investors Service downgraded the long term ratings of Dial
Corporation and placed the short term rating of Dial under review
for possible downgrade. The long term ratings of the company
remain under review for possible downgrade. The rating action
reflects the challenges resulting from Dial's position in the
consumer products marketplace, and the deteriorating financial
flexibility of the company due to the financial policy followed
over the last two years. In its review, Moody's will focus on the
extent to which the turnaround plan engaged by new management can
improve the financial leverage of the company.

Ratings placed under review for possible downgrade:

   a) commercial paper at Prime-2

Ratings downgraded and kept under review for possible downgrade:

   a) senior unsecured, to Baa2 from Baa1

   b) senior unsecured shelf, to (P)Baa2 from (P)Baa1

   c) subordinated shelf, to (P)Baa3 from (P)Baa2

Dial has five consumer products segments: detergents, soap and
body wash, canned meats, air fresheners and specialty personal
care. While category growth has been stagnant or declining in
powder detergents, bar soaps and canned meats, it has been
stronger in liquid detergents and body wash. However, Dial's
market shares -- while leading in categories such as soaps, air
fresheners and canned meats -- are never dominant. This places the
company at a disadvantage in its dealings with increasingly
powerful retail clients. Also, while brand equity is strong in
Dial (soaps) and Renuzit (air fresheners), its other brands are
value-oriented. As a result, the company must often compete on
price and offer significant discounts to retail. The strong power
of retail in its relationship with Dial and inventory buildup at
retail -- which was encouraged by Dial's trade loading practices -
- have led to significant margin pressure and operating
underperformance in 2000. The financial policy of Dial's prior
management over the last two years has also contributed to
significantly increased financial leverage. Acquisitions in the
specialty care segment (Freeman and Sarah Michaels) have proven to
be failures. Share buybacks accelerated over 1999 and the early
part of 2000.

The new management -- put in place in the middle of 2000 -- has
defined a turnaround plan made up of several components:
divestitures of cash-draining segments such as specialty care and
the international network; elimination of costly practices such as
trade loading; and a financial policy geared towards debt
reduction. The divestiture of specialty care would take place
after a profitability improvement that would be derived from the
elimination of unprofitable stock-keeping units. Management has
also indicated that it would not be opposed to divesting any
segment for which it could obtain an adequate price. While Dial's
new management strategy is clearly geared towards a reduction in
financial leverage, Moody's believes that the difficulty of the
turnaround task makes its outcome uncertain.

Commercial paper is fully backed up by a $180MM and a $270MM
facility, with maturities in July 2001 and July 2004,
respectively. There are no material adverse change clauses in the
credit agreements. The company is in compliance with its financial

Dial Corporation, based in Scottsdale, Arizona, manufactures and
markets leading consumer products such as Dial soaps, Purex
detergents, Renuzit air freshners, Nature's Accents and Armour
canned meats.

DIGITAL BROADBAND: Case Summary and 20 Largest Unsecured creditors
Debtor: Digital Broadband Communications, Inc.
        200 West Street
        Waltham, MA 02451

Chapter 11 Petition Date: December 27, 2000

Court: District of Delaware

Bankruptcy Case No.: 00-04650

Debtor's Counsel: Michael R. Lastowski, Esq.
                  Duane, Morris & Heckscher, LLP
                  1100 North Market Street
                  Suite 1200
                  Wilmington, DE 19801
                  (302) 657-4942

Total Assets: no assets listed
Total Debts : $ 50 Million above

20 Largest Unsecured Creditors:

Cisco Systems Capital Corporation
55 Hayden Street
Suite 4200
Lexington, MA 02421-7996                              $ 70,000,000          

P.O. Box 15124
Albany, NY                                        
P.O. Box 408
Cockeysville, MD 21030
P.O. Box 4832
Trenton, NJ 08650
P.O. Box 28001
Lehigh Valley, PA 18002                               $ 11,111,141

530 Preston Ave
Meriden, CT 06450
2180 Glenville 2nd Floor
Richardson, TX 75082                                   $ 1,633,216

Eftia OSS Solutions
360 Lisgar Street
Ottawa, Ontario K2P 2E4                                  $ 687,666

Cisco Systems, Inc.
55 Hayden Street
Suite 4200
Lexington, MA 02421                                      $ 524,509

Aztec Technology Partners NE
P.O. Box 5-0061
Woburn, MA 01815                                         $ 472,852

MCI WorldCom
6929 North Lakewood
Mail Drop 5.2-510
Tulsa, OK 74117                                          $ 462,623

Price Waterhouse Coopers
P.O. Box 3026
Boston, MA 02241                                         $ 435,245

Data General Div. of EMC
P.O. Box 651388
Charlotte, NC 28265-1388                                 $ 433,353

Realtech Systems Corporation
P.O. Box 26074
New York, NY 10087-6074                                  $ 289,323

Daleen Technologies, Inc.                                $ 240,846

Piper Marbury Rudnick & Wolfe                            $ 222,765

Andersen Consulting, LLP                                 $ 190,667

Quality Communication Construction                       $ 168,420

EGI                                                      $ 154,301

Global Crossing Telecom.                                 $ 115,656

Sullivan and McLaughlln                                  $ 107,760

Anixter, Inc.                                             $ 87,473

Response Electric Contracting                             $ 86,036

Sullivan & Cogllano                                       $ 83,252

FINOVA GROUP: Ratings Downgraded, May Seek Bankruptcy Protection
The credit ratings of Finova Group Inc. and its units were slashed
after the troubled lender said for the first time it may need to
seek bankruptcy protection if a plan that would excuse it from
paying back all of its own debt falls through, according to

Standard & Poor's (S&P) and Moody's Investors Service downgraded
Finova's ratings after the Scottsdale, Ariz.-based Finova raised
the possibility of a court-supervised "reorganization." Finova,
which lends mainly to small- and medium-sized businesses,
according to a recent securities filing, has about $11.3 billion
of bank and public bond debt.

Finova said that it and Leucadia National Corp. plan to propose a
"comprehensive restructuring" to Finova's bank lenders and public
debtholders. Leucadia, a New York-based holding company, agreed
last week to invest up to $350 million in Finova. The company said
substantially all of its lenders will have to agree to the
restructuring for Finova to avoid possible "reorganization under
protection of the courts." In a filing with the Securities and
Exchange Commission last Thursday, Leucadia said Finova has about
$4.7 billion of bank debt and about $6.6 billion of public bond
debt. (ABI, 27-Dec-00)

FRUIT OF THE LOOM: Puts Claims Objection Protocol on the Table
On June 5, 2000, the Court set August 15, 2000 as the general bar
date for creditors to file proofs of claim against Fruit of the
Loom. Debtor coordinated with Donlin, Recano & Company, its court-
appointed claims agent, to ensure that the claims forms and other
notices were mailed out in a timely fashion.

Approximately 13,000 proofs of claim have been filed including
trade claims, lease rejection claims, employee-related claims,
customer refund claims, warranty claims, tax claims and others.
Fruit of the Loom, with assistance from Donlin, Recano, has
identified thousands of objectionable claims and expects to
identify more as the claims reconciliation process continues.

Fruit of the Loom asks Judge Walsh to approve its procedure for
claims objection. Tara L. Lattomus Esq., of Saul, Ewing, says the
procedure is designed to ensure the efficient handling of numerous
objections that will be filed by Fruit of the Loom. The procedure
order provides for a simple and streamlined method for objecting
to claims and it avoids unnecessary hearings. It also authorizes
Fruit of the Loom to settle claims.

Once the procedure order is entered, Fruit of the Loom intends to
file a first omnibus objection to claims, to which various
schedules, a list of claimants, claims numbers and amounts claimed
will be attached. Each schedule will address a particular ground
of objection.

Fruit of the Loom will file the objections with the Clerk of the
United States Bankruptcy Court for the District of Delaware and
will serve objections upon the United States Trustee, counsel for
the Creditor's Committee and the claimants or their attorneys.

General Objections arise when there are claims that are not
allowable under applicable law, including state and federal law.
Each General Objection will specify the law upon which such
objection is based.

Fruit of the Loom will file Separate Objections or motions for
summary judgment when:

   * the claim was filed late
   * the claim is not entitled to the priority or secured status
   * the claim is amended
   * the claim is a duplicate
   * the description in the claim is insufficient
   * the claim is overstated
   * the claim should be reclassified as an equity interest
   * Debtors' books and records show no basis for allowance of the
   * the claim has been transferred

A response form will be sent to each claimant along with the
objection. The response forms will contain all information
necessary for completion. The procedure order provides that
claimants whose claims are objected to must file and serve
requests for a hearing within twenty-five days from the day Fruit
of the Loom provided service of the objection. If not, the
claims will be reconciled as set forth in the objection. If the
claimant requests a hearing, Fruit of the Loom will obtain a
hearing date from the Court and will mail a notice of the hearing
date to the claimant.

Relying on Federal Rule 42(b), the procedure order states that
separate hearings may be held on all objections on each of the
enumerated grounds. Fruit of the Loom argues that this should
reduce confusion and minimize the cost of responding to

Claims filed subsequent to the bar date will be disallowed and
expunged as per the procedure order.

In the case of claims not entitled to the priority asserted, Fruit
of the Loom will request entry of an order reclassifying the claim
in the correct priority. Claimants must then file a response form.
If the claimants are silent, they give tacit permission to place
their claim in the priority Debtor believes correct.

In cases of amended and superseded claims, Fruit of the Loom will
notify claimants that the claims will be disallowed and expunged
unless claimants file a response form.

In cases of duplicate claims, Fruit of the Loom will notify
claimants that redundant claims will be expunged and disallowed.
Remaining claims will be listed in a schedule that will survive
without further notice unless claimants return a response form.

Claims with inadequate information to support their validity will
be disallowed and expunged unless claimants file a repose form.
Fruit of the Loom will then request entry of an order expunging
the portion that exceeds the scheduled amount or that which is
inadequately supported.

Overstated claims will prompt a notice from Fruit of the Loom that
the claim has been reduced to the amount listed in the claims
schedule. Claimants must then file a response form.

Claims that should be reclassified as equity interests will
receive a notice from Fruit of the Loom stating that the claim is
not entitled to indebtedness. Debtor will request an order
reclassifying the claim. Claimants must then file a response form.

Fruit of the Loom will notify claimants in a schedule if they have
filed claims with no basis in Debtors' records and books. It will
attempt to have them expunged and disallowed. Claimants must then
file a response form.

If the claim has been transferred, Fruit of the Loom will notify
claimants that it is attempting to have the claim expunged and
disallowed. Claimants must then file a response form.

Fruit of the Loom outlines a settlement procedure. First, if the
disputed amount is less then $75,000, the claim may be settled by
notifying the U.S. Trustee and counsel for the creditor's
committee within three business days. Second, if the disputed
amount is greater than $75,000, Fruit of the Loom has ten business
days to notify the same parties of any settlement. (Fruit of the
Loom Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

HARNISCHFEGER: Objects to Mitsui's "No Less than $29.99MM" Claim
On or about February 28, 2000, Mitsui filed its Proof of Claim in
an amount stated as "an undetermined amount, but no less than
$29,996,168 . . . plus Warranty Claim amounts and interest and
penalties". The Claim is based on a contract dated September 15,
1992, between Mitsui and Harnischfeger Corporation d/b/a P&H
Mining Equipment. Pursuant to the Contract, Harnco sold to Mitsui
two electric draglines on crawler tracks as well as various other
equipment and parts for a total price of $9,470,308. The Draglines
were delivered as required and, on Harnco's information and
belief, continue to be used by OCP for the intended purpose.

The end user of the Draglines was Office Cherifien Des Phosphates
(OCP), a Moroccan entity.

Harnco tells Judge Walsh that in response to technical problems
communicated by OCP, including cracking of boom chord components,
Harnco responded under the normal course of solving machine
problems and even went beyond the normal course of contractual
warranty obligation in trying to resolve and satisfy OCP's issues
with the machine.

However, in a letter dated December 3, 1997 to Mitsui, OCP's
counsel alleged that OCP had suffered an estimated loss of
189,070,748 DH as of October 23, 1997, as a result of problems
with the Draglines. Mitsui forwarded that letter to Harnco.

Although Harnco believed the company had performed under the
provisions of the Warranty and even beyond that by continuing to
assist OCP after the Warranty had expired, it entered into
negotiations with Mitsui and OCP in an attempt to resolve the
disputes for the sake of the customer relationship with Mitsui. As
a result, Harnco, Mitsui and OCP signed an agreement for the
full settlement of OCP's claims concerning the Draglines.

The Debtor tells the Court that Harnco has fulfilled the
requirements under the settlement agreement, which is evidenced by
memo. Since that, Harnco has received no further reports of
cracking of the lower boom sections, nor other complaints from OCP
concerning the Draglines since the replacement of the boom
sections, and the Draglines continue to perform, the Debtor tells
the Court.

Mitsui, neverthesless, filed its Claim based upon the estimated
loss set forth in the December, 1997 letter, the full purchase
price of $9,470,308, contractual shipping charges of $1,028,000
and warranty claims.

The Debtor requests that the Mitsui claim be disallowed in full

(1) Mitsui has suffered no damages so there can be no claim.

(2) The Contract specifically limits remedies to breach of
     warranty claims and Harnco has performed pursuant to the

(3) The statute of limitations has expired on any cause of action
     presented in the Claim.

(4) The Claim has been settled and Harnco has performed pursuant
     to the terms of the Settlement Agreement.

               (1) Mitsui Has Suffered No Damages

Mitsui, in its Claim, admits that it is not the end user of the
Draglines. To Harnco's information and belief, OCP has not sued
Mitsui nor even made a demand on Mitsui since the Settlement
Agreement was executed. To Harnco's understanding, OCP has used
the Draglines since their installation and continues to do so.

               (2) The Contract Limits Liability

Harnco advises the Court that pursuant to paragraph 2 of the
Special Terms and Conditions of the Contract, Swiss law is the
governing law of the contract.

Given that, Harnco cites paragraph 6 of the Special Terms and
Conditions Section of the Contract on Limitation of Liability
which provides that:

   "Harnischfeger shall have no liability to Mitsui or O.C.P. for
lost profits, loss of use or for incidental or consequential
damages of any kind whether arising in contract, tort, product
liability or otherwise."

Harnco notes that under Swiss law, this contractual limitation of
damages and remedies is valid, and only remedies available are
remedies under the Warranty. Harnco asserts that it has performed
its obligations under the Warranty and no further damages claims
exist under the Contract.

            (3) The Statute of Limitation Has Expired

Under Swiss law, claims based on warranty for defects in the goods
supplied by the seller are time-barred within one year from
delivery to the buyer, even if the defects were only discovered at
a later date, unless the seller has assumed liability for a longer
period (Art. 210(l)CO).

Pursuant to the "Extended Warranty" dated June 25, 1990, which is
part of the Contract, Harnco gave Mitsui a specific warranty
regarding the Draglines which covers the Draglines for 10,000
operating hours or two years from initial operation, or thirty
months from date of shipment, whichever came first, and states
that "the warranty will be pro-rated between OCP and P&H from
10,000 to 20,000 operating hours from date of initial operation or
four years from initial operation or fifty-four months from date
of shipment, whichever comes first...."

On Harnco's information and belief, the initial operation of the
Draglines was November, 1994 and the date of shipment ex works was
around December, 1993. Accordingly, Warranty expired on or about
June, 1998 and the Statute of Limitations period expired as of
June, 1999. Harnco therefore concludes that the claim is time

Harnco recognizes that the period of limitation is interrupted
according to Art. 135 CO of Swiss law:

   -- By an acknowledgment of the debt on the part of the debtor,
particularly by the payment of interest and installments and by
the furnishing of a pledge or a guarantee,

   -- By the creditor's commencing proceedings, by bringing an
action or by making a plea before a court or arbitration court, as
well as an application in bankruptcy proceedings and by issuing a
summons before a justice of the peace for the conciliation of the

Harnco notes that under Swiss law, a simple letter sent to the
Seller cannot toll the Statute of Limitations period, regardless
of content. Accordingly, the letters referred to above that were
dated February 7, 1997 and December 7, 1997 were not sufficient to
do so. Harnco does not think the provision related to debt applies
for interruption of period of limitation because Harnco certainly
did not acknowledge any debt to Mitsui or OCP. Moreover, neither
Mitsui nor OCP take any actions to toll the Statue of Limitations

               (4) The Claim Has Been Settled

Even if Mitsui had a claim against Harnco, all possible claims by
Mitsui or OCP relating to the Draglines pursuant to the Contract
were fully settled when the parties entered into the Settlement
Agreement, Harnco asserts.

Harnco believes that the Settlement Agreement was validly entered
into by the parties, and is therefore binding on the parties.

To Harnco's understanding, under Swiss law, a settlement agreement
is a contract, through which the parties end a difference, a
dispute, a mere possibility of a dispute, or put an end, by means
of reciprocal concessions, to an uncertainty (whether subjective
or objective) touching upon the relevant factual background and
its legal qualification, or touching upon the existence, contents
or scope of a certain legal relationship. A settlement agreement
is not subject to any particular formal requirement, but requires
consideration (see Maier-Hayoz, Fiches Juridiques Suisses 463
at 1; Revue Suisse de Jurisprudence 1953 at 117; Semaine
Judiciaire 1975 at 104).

Thus, with the Settlement Agreement, Harnco and Mitsui put an end,
by means of reciprocal concessions, to any uncertainty or
differences they might have had as to lower boom section cracking.
Mitsui abandons any and every claim associated with lower boom
section cracking in exchange for Harnco's technical services
listed in the Settlement Agreement.

Harnco therefore requests that the Court estimate the Claim at $0
based upon the same facts and arguments stated above to the extent
the Court determines that the Claim is one that should be
estimated pursuant to 11 U.S.C. 502(c). (Harnischfeger Bankruptcy
News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 609/392-

HURRICANE HYDROCARBON: Says It'll Pay $30MM Interest Due Dec. 31
Hurricane Hydrocarbons Ltd. announces it will on December 31, 2000
make a principal repayment of US$30.0 million on its Canadian and
United States dollar denominated Senior unsecured notes. Including
US$2.2 million in interest, the total amount paid to the
noteholders will be US$32.2 million.

After the December 31, 2000 payment, the total principal
outstanding to the Company's noteholders will be US$23.9 million.
The Company is ahead of its repayment obligations and has the
right to prepay the balance of the principal at any time prior to
December 31, 2001 without penalty.

Details of the precise payment made on December 31, 2000 split
between principal repayment and interest will be forwarded by
Hurricane's trustees to the registered noteholders of record after
December 31, 2000.

Hurricane's Board of Directors has authorised management to spend
up to US$180 million in capital expenditures in the year 2001. The
execution of this authorised program remains subject to regulatory
approvals in Kazakhstan. The development of the "QAM" fields,
Qyzylkiya, Aryskum and Maibulak would account for approximately
50% of this capital program.

Hurricane's shares are traded on the Toronto Stock Exchange under
the symbol HHL.A and in the United States on the National
Quotation Bureau (NQB) under the symbol HHLF. The company's
website can be accessed at

The Toronto Stock Exchange has neither approved nor disapproved
the information contained herein.

Hurricane Hydrocarbons Ltd., Calgary, Alta., had reversed its
quarterly loss from a year earlier. The company purchased 88.36
percent of the refinery for $51 million and 33 percent of its
stock as part of its restructuring plan, which it completed in
late March; the arrangement enabled the company to emerge from

ICG COMMUNICATIONS: Hires Gleacher & Co. as Financial Advisors
The Debtors engaged Gleacher & Co. under a letter agreement dated
October 20, 2000, to provide financial advisor services to the
Debtors.  Pursuant to the Engagement Letter, G&C will provide the
Debtors with strategic and financial advice and assistance in
connection with:

   (a) A potential restructuring, including any restructuring,
refinancing, reorganization or recapitalization of the Debtors,

   (b) A potential asset sale, including any sale, or series of
sales, by ICG of less than a majority of its assets.

In particular, G&C will:

   (a) Assist and advise in development and review of ICG's
business plans and related financial projections;

   (b) Assist in the development of financial data and
presentations to ICG's creditors and other parties in interest and
negotiations with such creditors and parties in interest;

   (c) Evaluate ICG's capital structures and debt capacity;

   (d) Develop a financial foundation for a plan of reorganization
and analyze plan of reorganization alternatives;

   (e) In connection with any restructuring, advise and evaluate
on any securities to be issued or distributed in connection with
any reorganization; and

   (f) In connection with any asset sale, evaluate ICG's assets
and assist in negotiation and documentation.

G&C will be compensated by the Debtors on the following basis:

   (a) A monthly advisory fee of $250,000, of which the first four
months was paid in advance on September 26, 2000, and with
additional installments to be payable on each monthly anniversary;

   (b) Upon completion of any restructuring, a restructuring fee
of an amount equal to $4 million minus any asset sale fee actually
paid by the Debtors;

   (c) Upon completion of any asset sale, an asset sale fee equal
to 0.5% of the aggregate consideration received by ICG in each
individual sale, provided that the asset sale fees in the
aggregate, together with any restructuring fee, will not exceed $4
million; and

   (d) Reimbursement for all travel and other reasonable out-of-
pocket expenses, including all fees, expenses, and other charges
of counsel to be retained by G&C, and of other consultants or
advisors retained by G&C with the Debtors' consent, and any sales,
use or similar taxes incurred by G&C in connection with its

In addition to this compensation, the Engagement Letter provides
that the Debtors will indemnify G&C in certain circumstances, but
excludes indemnification for gross negligence or willful
misconduct by G&C.

Michael E. Garstin, a managing director of Gleacher & Co., averred
on behalf of G&C that it holds no interest adverse to the Debtors
on the matters on which it is employed, but has conducted business
with Leontis Teryazos, a director of ICG, and Randall Curran, an
officer of ICG, the Royal Bank of Canada, an agent for the
prepetition lenders, Bank of America, NA, Finova Capital Partners,
First Union National Bank, General Electric Capital Corporation,
and KZG Highland-2 LLC, all secured creditors of the Debtors,
Morgan Stanley & Co., an underwriter of ICG's bonds, Comdisco,
Inc., and UUNET, trade creditors of ICG, Hicks, Muse, Tate &
Furst, a major shareholder of ICG, and others who have an
interest in these estates. However, G&C does not have a commercial
or professional relationship with any of these entities, or any of
their respective affiliates or subsidiaries, with respect to any
matters in relation to the Debtors or these Chapter 11 cases.

In April, 2000, G&C purchased $20 million of 8% convertible
preferred stock in connection with a transaction in which ICG
raised $750 million of new capital from investors. Subsequently
these securities were sold to four members of G&C for an aggregate
of $8.2 million. In particular, Eric Gleacher, Chairman and CEO of
G&C, and Charles Phillips, a managing director, each paid $3.5
million, Michael E. Garstin, a managing director, invested $1
million, and Andrew Gilman, a director, invested $200,000.
However, each of these individuals has disposed of his interest in
ICG and retain no equity interest in the Debtors. In connection
with this transaction, G&C advised ICG and served as co-placement
agent to ICG, together with Morgan Stanley Group, Inc. In
addition, on October 12, 1997, G&C drafted a fairness opinion for
ICG in connection with ICG's acquisition of NetComm. (ICG
Communications Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

INTEGRATED HEALTH: Lyric Health Care Defaults on Payments to IHS
Integrated Health Services, Inc., sold five long-term care
facilities to Omega Healthcare Investors, Inc. for $44.5 million
in January 1998 and another five for $50.5 million in April 1998
(effective March 31, 1998 in the case of the April 1998. These
facilities were leased back by Lyric Health Care LLC, a newly
formed subsidiary of IHS, at an annual rent of approximately $4.5
million and $4.9 million, respectively.

IHS also entered into management and franchise agreements with
Lyric. The management and franchise agreements' initial terms are
13 years with two renewal options of 13 years each. The base
management fee was 4% of gross revenues in 1999 and 2000 pursuant
to the management agreement. In addition, the agreement provides
for an incentive management fee equal to 70% of annual net cash
flow. The duties of IHS as manager include: accounting, legal,
human resources, operations, materials and facilities
management and regulatory compliance. The annual franchise fee is
1% of gross revenues, which grants Lyric the authority to use the
Company's trade names and proprietary materials.

In a related transaction, TFN Healthcare Investors, Inc. purchased
a 50% interest in Lyric for $1.0 million, an amount equal to the
Company's initial investment in Lyric and IHS' interest in Lyric
was reduced to 50%. Lyric will dissolve on December 31, 2047
unless extended for an additional 12 months. The transactions with
Lyric were approved by the disinterested members of the Board of

On February 1, 1998 Lyric also entered into a five-year employment
agreement with Timothy F. Nicholson, the principal stockholder of
TFN and a director of the Company. Pursuant to Lyric's operating
agreement, Mr. Nicholson serves as Managing Director of Lyric and
has the day-to-day authority for the management and operation of
Lyric and initiates policy proposals for business plans,
acquisitions, employment policy, approval of budgets, adoption of
insurance programs, additional service offerings, financing
strategy, ancillary service usage, changes in material terms of
any lease and adoption/amendment of employee health, benefit and
compensation plans.

As a result of these transactions, IHS accounts for its investment
in Lyric using the equity method of accounting since IHS no longer
controls Lyric.

Effective January 1, 1999, the Company and various wholly owned
subsidiaries of the Company (the "Lyric Subsidiaries") transferred
27 long-term care facilities and five specialty hospitals to
Monarch Properties L.P. for $138 million plus contingent earn-out
payments of up to a maximum of $67.6 million. Net proceeds from
the transaction were approximately $131.24 million. The contingent
earn-out payments will be paid to the Company by Monarch L.P. upon
a sale, transfer or refinancing of any or all of the facilities or
upon a sale, consolidation or merger of Monarch L.P., with the
amount of the earn-out payments determined in accordance with a
formula described in the Facilities Purchase Agreement among the
Company, the Lyric Subsidiaries and Monarch L.P.

After the transfer of the facilities to Monarch L.P., the Company
retained the working capital of the Lyric Subsidiaries and
transferred the stock of each of them to Lyric. Monarch L.P. then
leased all of the facilities back to the Lyric Subsidiaries under
the long-term master lease and the Company is managing these
facilities for Lyric. Dr. Robert N. Elkins, Chairman of the Board,
Chief Executive Officer and President of the Company, beneficially
owns 28.6% of Monarch L.P. and is the Chairman of the Board of
Managers of Monarch Properties, LLC, the parent company of Monarch
L.P. The Company has accounted for this transaction as a

In September 1999, the Company transferred its Jacksonville,
Florida nursing facility to Monarch LP for net proceeds of $3.7
million. Monarch LP then leased this facility to a subsidiary of
Lyric, which the Company is currently managing. The Company has
accounted for the transaction as a financing.

As of September 30, 2000, Lyric's ability to borrow under its
revolving line of credit has been significantly restricted and its
vendors have imposed accelerated payment terms. IHS says that as a
result, it has not received payment for management fees or other
costs paid by IHS on Lyric's behalf (i.e., health and workers'
compensation insurance) of approximately $22.9 million for the
nine months ended September 30, 2000. The Company discontinued
revenue recognition on management fees from Lyric effective July
01, 2000, accordingly fees of $3.3 million were not recognized in
the third quarter. IHS is working with Lyric management and the
lender to increase Lyric's availability under the line of credit.
The Company tells investors it will continue to evaluate its
investment in Lyric and Lyric's ability to fund cash flows from
operations on an ongoing basis. (Integrated Health Bankruptcy
News, Issue No. 12; Bankruptcy Creditors' Service, Inc., 609/392-

LACLEDE STEEL: Leggett & Platt Inks $24.5MM Asset Purchase Deal
Laclede Steel Company announced that on Dec. 18, 2000, the
company's subsidiary, Laclede Mid America Inc., sold substantially
all of its assets to Leggett & Platt Inc. for $24.5 million. The
purchase price is subject to adjustment in certain circumstances.
The company also announced that on Dec. 15, 2000, the U.S.
Bankruptcy Court, Eastern District of Missouri Eastern Division,
confirmed the company's Restated Second Amended Joint Plan of
Reorganization, which calls for - among other things - all of the
company's currently outstanding preferred stock, no par value
(416,667 shares outstanding) and common stock, $0.01 par value
(4,056,140 shares outstanding) to be canceled on the effective
date of the plan with no payments to be made on claims arising
from or related to such equity interests.

After the effective date, the company, which has been operating
under chapter 11 protection since Nov. 30, 1998, will be
authorized by its amended and restated certificate of
incorporation to issue 8,000,000 shares of common stock, $0.01 par
value per share. In addition, 4,400,000 shares of new common stock
will be issued and outstanding immediately following the effective
date and 600,000 options for new common stock will be issued to
non-management employees one year after the effective date.(ABI,

LERNOUT & HAUSPIE: GE Capital Extends $35 Million DIP Financing
Lernout & Hauspie presented a Motion asking for judicial review
and approval of post-petition financing up to the aggregate
principal amount of $35 million from General Electric Capital
Corporation under a revolving note dated December 4, 2000. Twenty
Million of this financing was authorized under an interim Order,
granting security as super-priority claims against each of the
Debtors having priority over all other administrative expenses,
and further secured by a first-priority perfected lien on and
security interest in all present and after-acquired property of
the estate of each of the Debtors, except for any property of L&H
located in Belgium, including all proceeds, and all proceeds of
any avoidance actions brought by the estates in bankruptcy,
subject only to valid, enforceable, non-voidable and perfected
liens existing as of the Petition Date, and to be further secured
by a junior
priority perfected lien on and security interest in all present
and after-acquired property of the estates of each of the Debtors
except for any property of L&H located in Belgium, including all
proceeds and all proceeds of any avoidance action brought by the
estates in bankruptcy, subject only to valid, enforceable, non-
voidable and perfected liens existing as of the Petition Date.

The Debtors requested that in a final hearing the Court authorize
entry of a final Order permitting the Debtors to borrow an
additional $15.0 million for a total of $35 million, with the same
security and super-priority status as the preceding $20 million
authorized by interim order.

The borrowing is for a period of 90 days, and as described above,
is secured by a lien on substantially all of the Debtors' assets,
other than the property of L&H located in Belgium, and having
superpriority claim status. The Debtors asserted that this bridge
loan would give them sufficient time to assess their own financing
needs for the remainder of these Chapter 11 cases, and to
negotiate a long-term debtor-in-possession loan at market rates.

Prior to the commencement of these Chapter 11 cases, the Debtors'
unsecured pre-petition lenders had declared default and
accelerated the credit facilities of the Debtors, and had set off
certain funds of the Debtors held in banking institutions. These
setoffs deprived the Debtors of needed liquidity. Without the DIP
financing, the Debtors' business operations would be severely
interrupted, if not completely terminated, because the Debtors
will be unable to obtain the raw materials necessary to produce
their products, to employ the manpower necessary to operate its
business, or pay its utilities, rent, and other operating

Lack of liquidity had already started to affect the Debtors'
business operations, and upon this showing the interim Order was

The terms of the DIP Facility are as follows:

   (a) Facility: $35 million; $20 million available upon entry of
interim order; $15 additional funds after entry of final order;

   (b) Security: First lien on all unencumbered assets of the
Debtors, other than the L&H property located in Belgium, and a
subordinate lien on all encumbered assets, all liens subject to a
carve-out for professional fees not to exceed $1,500,000 and the
fees of the United States Trustee;

   (c) Priority: Superpriority administrative claim with priority
over any and all administrative expenses of these estates;

   (d) Maturity Date: Earliest of (i) March 4, 2001, or (ii) a
date that is 30 days after the Petition Date if no final order is
entered by such date, unless the interim order has been extended
with the lender's written consent, or (iii) the date on which the
interim order expires, unless the final order has been entered and
become effective by such date; (iv) the date a plan of
reorganization becomes effective; (v) the date of sale, transfer
or other disposition of all or substantially all of the assets of
any of the Debtors; or (vi) the date of which the loans
are accelerated after default;

   (e) Interest rate: LIBOR plus 3.5% or Prime plus 2%, at the
Debtors' option;

   (f) Default rate: Pre-default rate plus 2%;

   (g) Fees: Closing fee of 2% of the committed facility;
collateral monitoring fee of $30,000 per month; unused line fee of
.375% of unused line. (L&H/Dictaphone Bankruptcy News, Issue No.
2; Bankruptcy Creditors' Service, Inc., 609/392-0900)

MTS INC: S&P Places Ratings on Watch with Negative Implications
Standard & Poor's today placed its single-'B'-plus corporate
credit and senior secured bank loan ratings and its single-'B'
subordinated debt rating on MTS Inc. on CreditWatch with negative

The CreditWatch placement reflects deteriorating operating
performance, weakness in music industry sales, and near-term
financial pressure due to the expiration of its credit facility in
April 2001.

Sacramento, Calif.-based MTS, the primary operating subsidiary of
Tower Records Inc., operates 192 stores specializing in the sale
of recorded music and related items. The company's operating
performance has been weak since 1999, reflecting intense
competition in the industry as well as company-specific issues at
MTS. The company's return on permanent capital fell to 6.7% in
fiscal 2000 (ended July 31) from 8.3% in fiscal 1999, and is well
below the 14.5% recorded in fiscal 1995.

MTS has been hurt by its pricing strategy--holding firm on prices
believing its leading-edge music and broad catalog would maintain
customer loyalty. However, price is a key competitive factor in
the industry, and Tower generated weak comparable sales in fiscal
1999 despite improving industry fundamentals. During the first
quarter of fiscal 2000 (ended Sept. 30), MTS brought its prices in
line with its competitors. However, sales trends have not
improved. Comparable-store sales only increased 0.6% in fiscal
2000. Tower's same-stores sales declined 1.8% in its fiscal first
quarter ended Oct. 31, 2000, and Standard & Poor's does not expect
the sales trend to improve in the important holiday season due the
lack of "hot" music releases and the current tough retail
environment. The company's operating margin fell to 9.3% in its
fiscal first quarter from 10.9% in the same period the previous
year as a result of the decrease in comparable-store sales, start-
up costs related to establishing its international operations, and
costs associated with expanding its Internet site and on-line
presence. Furthermore, the deteriorating operating performance
could hinder the company's ability to renegotiate its $275 million
credit facility, which matures in April 2001. The company had $206
million outstanding under the facility as of Oct. 31, 2000.

Ratings could be lowered if the company's operating performance
weakens in the current quarter or if MTS has difficulty renewing
or amending the credit facility. Standard & Poor's will meet with
management to review its strategic plan for improving operations
and refinancing the company's bank debt.

NORTHWESTERN STELL: S&P Applies D Rating after Chapter 11 Filing
Standard & Poor's lowered its ratings on Northwestern Steel & Wire
Co. to a single-'D' from double-'C' after the company announced it
filed for protection under Chapter 11 of the Bankruptcy Code. At
the same time, the ratings were removed from CreditWatch negative,
where they were placed on Sept. 30, 1999.

The company was unsuccessful in attempts to locate a lender for
the $170 million it needed to fund its modernization program, even
though the federal government was willing to guarantee 85% of the
loan under the Emergency Steel Loan Guarantee Act. Northwestern
also disclosed that it was unable to make its $5.5 million
interest payment.

Northwestern Steel & Wire's financial performance deteriorated
significantly over the past couple of years, due to increased
competition from low-price imports. Lower volumes and pricing
pressures adversely affected profitability and cash flow. Poor
financial performance, heightened competition, and a highly
leveraged balance sheet impeded the company's ability to attract
financing for a new facility that was required for it to remain
competitive. Under the bankruptcy filing, the company bondholders
will receive equity in the company. - CreditWire

RATINGS LOWERED                      To             From

Northwestern Steel & Wire Co.

  Corporate credit rating.          D/NM           CC/NM
  Senior unsecured debt             D/NM           CC/NM

OUTBOARD MARINE: Case Summary and 5 Largest Unsecured Creditors
Debtor: Outboard Marine Transportation Corporation, an Illinois
         100 Sea Horse Drive
         Waukegan, Illinois 60085

Affiliates: Outboard Marine Corporation
             OMC Recreational Boat Group, Inc.
             OMC Fishing Boat Group, Inc.
             OMC Aluminum Boat Group, Inc.
             OMC Latin America/Carribean, Inc.
             Recreational Boat Group Limited Partnership
             Outboard Marine Transportation Corporation
             OMCEMA, Inc.
             OMC Nevada, Inc.

Type of Business: The Debtor is a large dedicated manufacturer of
                   outboard marine engines and boats and parts and
                   accessories therefor.

Chapter 11 Petition Date: December 22, 2000

Court: Northern District of Illinois

Bankruptcy Case No.: 00-37418

Judge: Jack B. Schemtterer

Debtor's Counsel: David S. Kurtz, Esq.
                   Skadden, Arps, Slate, Meagher & Flom (Illinois)
                   333 West Wacker Drive
                   Chicago, IL 60606
                   (312) 407-0700

Total Assets: $ 50 Million above
Total Debts : $ 50 Million above

5 Largest Unsecured Creditors

JB Hunt Transport Inc.  
P.O. Box 98545
Chicago, IL 60693-8545                                   $ 287,643

Penske Truck Leasing Chesterfield                        $ 204,933

Comdata Network Inc.                                      $ 30,992

Custom Permit Service Company                              $ 4,326

Fleet Cleaning Service                                       $ 324

OUTBOARD MARINE: S&P Lowers Ratings to D after Chapter 11 Filing
Standard & Poor's today lowered its ratings on Outboard Marine
Corp. following the company's recent voluntary reorganization
under Chapter 11 of the U.S. Bankruptcy Code. All ratings are
removed from CreditWatch where they were placed on Oct. 13, 2000.

Outboard Marine plans to sell some or all of its engine and boat
operations and expects to continue operations during the
reorganization process. The company has received a commitment from
its bank group to provide debtor-in-possession financing, which is
expected to be sufficient to permit the company to operate over
the near term while it implements its restructuring plan.


Outboard Marine Corp.                  To        From

   Corporate credit rating             D         CCC
   Senior secured debt                 D         CCC
   Senior unsecured debt               D         CCC-
   Subordinated debt                   D         CC

OWENS CORNING: Files Schedules of Assets and Liabilities
Due to the voluminous nature of the descriptions of the
prepetition unsecured obligations of Owens Corning and its related
subsidiaries and affiliates normally listed by debtors in Chapter
11 cases on Schedule F of the Schedules of Assets and Liabilities,
the Debtors are not at this time filing their Schedule F.  With
the agreement of the United States Trustee for these cases,
Schedule F is due to be completed and filed by year-end.

The Schedules are prepared by the Debtors' management and are
unaudited. The Debtors assure parties in interest that they have
made every effort to be accurate in these Schedules. If the
Debtors' management obtains any subsequent information which would
materially change the contents of the Schedules, an amendment will
be made at that time. Except as noted, the assets and liabilities
contained on the Schedules are reflected at net book value as of
October 4, 2000. Inventory is valued at the lower of cost or

These Debtors have been authorized to utilize a consolidated cash
management system. Therefore the Schedules may not reflect
payments by an affiliated Debtor on behalf of the Debtor.

Schedule A: Debtor's Interest in Real Property       $ 177,320,124

This Schedule includes owned properties in Arizona, Arkansas,
California, Colorado, Florida, Georgia, Illinois, Indiana, Kansas,
Maryland, Michigan, Minnesota, North Carolina, New Jersey, Ohio,
Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas,
and Utah, and the amount reflects net book value.

Schedule B: Personal Property                      $ 5,209,415,516

   Cash on hand                                  $261,314
   Commercial bank accounts                    43,744,675
   Restricted cash                            142,000,000
   Government securities                          107,816
   Marketable securities (DB Alex Brown)       96,356,391
   Marketable securities (CoAmerica)           73,711,529
   Marketable securities                       96,954,130
   Insurance policies (cash value-asbestos)    92,374,666
   Insurance policies (cash value life)         2,821,552
   Stocks (third-party companies)              11,635,446
   Stocks (affiliate OC companies)          1,938,938,680
   Stocks (partnership affiliates)             31,117,859
   Accounts receivable (trade)                129,671,658
   Allowance for doubtful accts               (9,894,650)
   Future discounts, special credits         (70,643,984)
   National Union Ins. receivable              13,000,000
   A/R Intercompany                           927,664,746
   Notes receivable                            16,470,597
   Income tax refund (1994-1997)                2,491,362
   Deferred income tax                        175,644,177
   Patents, purchased technology                3,173,138
   Goodwill (net of amortization)             105,082,286
   Non-compete agreements                       5,243,293
   Transportation equipment (net book value)      411,890
   Office furniture/equipment (book value)     98,578,586
   Machinery & equipment (net book value)     391,231,497
   Capital costs                              265,968,487
   Interest capitalization                     57,005,193
   Alloy metals                               180,989,190
   Inventory                                  297,667,160
   Prepaid expenses                            89,457,623

This Schedule does not include a net asset in the amount of
$462,055,912, representing an accumulation of ordinary course cash
sweeps received from certain affiliates of Owens Corning in the
time period subsequent to September 1995 net of (a) expenses paid
by Owens Corning on behalf of affiliates, and certain transfers of
cash to certain affiliates. The payments made by Owens Corning for
expenses of affiliates are reflected as expenses in the respective
affiliate's books and records. No corresponding asset or, if
applicable, claim for the net accumulation of such amounts in
the affiliate's books and records will be reflected in the
Schedules of the related entities because such amounts reflect
nothing more than a book entry to account for the net accumulation
of such transfers.

Schedule D: No secured creditors are listed by Owens Corning on
Schedule D.

Schedule E: Wages, salaries, commissions, and taxes   $ 63,348,686

Pursuant to this Court's Order, the Debtor was authorized to pay,
and did pay, all wages, salaries and commissions earned in the 90
days prior to the Petition Date. As a result, the Debtor's
Schedule does not include those obligations.

Schedule F: A complete listing of unsecured creditors will be
filed by December 24, 2000.

Schedule G: Executory contracts and leases

The Debtor states that some of these contracts and leases may be
in the nature of conditional sales agreements or secured
financing, and expressly reserved a right to dispute or challenge
the characterization of these agreements as contracts and leases.

Schedule H: Co-debtors

Name of co-debtor            Creditor
-----------------            --------
O.C. Funding, B.V.           Wesdeutsche Landesbank Girozentrale
O.C. Funding, B.V.           EBC Bank Nederland N.V.
O.C. Funding, B.V.           Bank of New York
Owens Corning (China)        Investment Standard Chartered Bank
Owens Corning (Shanghai)     Fiberglas Eredietbank N.V. (Shanghai
Owens Corning (Quanqzhou)    Fiberglas Societe General (Shanghai
Owens Corning (China)        Investment Standard Chartered Bank
Owens Corning (Shanghai)     Fiberglas Standard Chartered Bank
Owens Corning (Quanqzhou)    Fiberglas Standard Chartered Bank
Owens Corning (Nanjing)      Foamular Standard Chartered Bank
Owens Corning (Anshan)       Fiberglas Standard Chartered Bank
Owens Corning (India)        Limited Bank of Nova Scotia (Mumbai
Owens Corning Canada, Inc.   Le Fonds de Solidaritie des
                                Travailleurs Du Quebec (F.T.Q.)
Owens Corning Capital LLC    Harris Trust & Savings Bank
Owens-Corning Finance (U.K.) PLC Barclays de Zoete Wedd Securities

All debtors co-obligated on that certain Credit Agreement with
Credit Suisse First Boston As Agent. (Owens-Corning Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-

OXFORD HEALTH: Buys-Back Texas Pacific Preferred Shares & Warrants
Oxford Health Plans, Inc. (Nasdaq: OXHP) announced that it has
completed its obligations under the TPG Exchange and Repurchase
Agreement with Texas Pacific Group and other investors previously
announced on October 25, 2000, and has successfully closed the
related senior bank facilities.

Under the terms of the TPG Agreement, the Company paid $220
million to TPG and other investors for (i) certain preferred stock
and (ii) warrants for 11,543,545 common shares. TPG and other
investors simultaneously exchanged their remaining preferred stock
and remaining warrants for 10,986,455 newly issued shares of
common stock. As previously announced, the Company will record a
non-cash write-off of unamortized preferred stock discount and
unamortized expenses of approximately $38 million in the fourth
quarter. With the closing of this transaction, the 1998 Investment
Agreement between TPG and Oxford has been terminated.

Additionally, pursuant to a Lock-up Agreement, TPG and other
investors agreed not to sell the newly issued common shares until
after February 15, 2001.

The Company also announced that it has completed the closing of
new senior bank credit facilities totaling $250 million. The
credit facilities consist of a $175 million 5 1/2 year Term Loan
which was used to fund the closing, and a 5 year $75 million
Revolving Credit Facility, which was not drawn at closing.

"These transactions, together with the successful completion of
our Senior Note tender announced last week, conclude our efforts
to repurchase or restructure the turnaround financing obtained in
1998. We have significantly improved our capital structure and
strengthened our balance sheet as we enter 2001", said Kurt B.
Thompson, Oxford's Chief Financial Officer.

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

PAUL HARRIS: Flagship Indianapolis Store to Close
Women's clothier Paul Harris plans to close its flagship store in
downtown Indianapolis as part of its effort to emerge from
bankruptcy, according to the Associated Press. Paul Harris
executives announced this fall plans to close about 50 stores
nationwide, but had delayed making a decision about the store.
"The downtown Indy store was a significant store for us. We
thought it was a significant store to the community," said Richard
Hettlinger, the chain's chief financial officer. "This was
extremely difficult for us. We did not want to make that
decision." The Indianapolis-based company filed for protection
under chapter 11 of U.S. bankruptcy law in October after months of
watching its stock price and profits drop. (ABI, 27-Dec-00)

POLAROID CORP: S&P Lowers Ratings & Remains on CreditWatch
Standard & Poor's today lowered its ratings on Polaroid Corp.  The
ratings remain on CreditWatch with negative implications.

The downgrade reflects Standard & Poor's concerns about Polaroid's
earnings outlook following the company's recent announcement that
its earnings in the key fourth quarter will be substantially lower
than previously anticipated. In addition, Standard & Poor's is
concerned that the company's long-term business profile may be
weakening as sales of traditional, instant photography products
continue to decline and the company becomes more reliant on new
products that may have shorter life cycles.

The decline in fourth quarter earnings is attributed to the
slowing economy and deteriorating sales of traditional instant
products that are only partially offset by growth of new products.
The company's revised fourth quarter forecast is to break even on
an operating basis versus a $62 million operating profit in 1999.
In response, Polaroid is seeking to increase cash flow and reduce
debt by selling excess real estate, cutting manufacturing and
overhead costs, reducing working capital and capital expenditures,
reviving sales of core traditional products, and continuing to
grow the most profitable new products. The company's goal is to
generate enough cash to repay at least $100 million in debt in

Polaroid is the world leader in instant imaging, its core
business, and the only player in the U.S. Nonetheless, this small
market niche is mature and has questionable long-term prospects
due to the growing acceptance of digital photography, especially
in commercial markets. The rebound in operating performance and
credit measures in 1999 and the first half of 2000 were primarily
driven by cost savings resulting from substantial restructurings
in previous years, as well as the successful introduction of new
digital and instant consumer products. Nonetheless, new instant
consumer products aim for popular appeal in the youth market, and
Standard & Poor's is concerned that these products will have
shorter lives and greater sales volatility and inventory exposure
than traditional products. Also, in the highly competitive digital
camera segment, where Polaroid has some of the most popular
cameras, margins are much lower than the company's traditional
instant product lines and should remain so for the foreseeable
future. In addition, Polaroid faces maturities of two key short-
term credit agreements in December of 2001 and $150 million in
6.75% senior unsecured notes in January of 2002.

Over the long term, the company's success is contingent upon its
efforts to establish a strong link between its instant imaging
capability and new digital image products. In the near term,
Polaroid's performance and credit measures are dependent on
reviving flagging traditional product sales, sustaining positive
momentum for new products, cutting costs, raising cash from the
sale of real estate and other non-strategic assets, and paying
down debt.

In resolving the CreditWatch listing, Standard & Poor's will
monitor Polaroid's ability to reverse the recent deterioration of
sales and earnings and successfully refinance the pending debt
maturities. -- CreditWire


Polaroid Corp.                         TO             FROM

   Corporate credit rating             BB-            BB
   Senior unsecured debt               B+             BB-
   Senior secured bank loan            BB-            BB

   Shelf registration:

   Senior unsecured debt            prelim. B+      prelim. BB-
   Subordinated debt                prelim. B       prelim. B+

PONDER INDUSTRIES: Merger Plan with N-Vision Technology Approved
The Houston-based Ponder Industries Inc. announced in a company
press release that it has received confirmation of its plan of
reorganization from the U.S. Bankruptcy Court, Southern District
of Texas. Under the approved reorganization plan Ponder will
liquidate its remaining assets for the benefit of its creditors
through a continuing Liquidating Trust and be released and
discharged from any and all claims.

As part of the reorganization, the company will merge with N-
Vision Technology Inc., a Houston-based firm. Under the terms of
the merger, Ponder shareholders will receive one share of N-Vision
stock for every 20 shares of Ponder they currently own. Current
shareholders of N-Vision stock will receive one share of
reorganized company stock for every share they currently own. The
reorganized company will be a publicly traded company organized
and existing under Delaware law, known as N-Vision Technology Inc.
N-Vision Technology Inc. is a technology based company involved in
the development of oil and gas reserves as well as providing
geophysical services to the industry through its wholly owned
subsidiary Southern 3-D Exploration Inc. (ABI, 27-Dec-00)

QUEPASA.COM: Board Approves Liquidation Plan for Hispanics Website
------------------------------------------------------------------ (Nasdaq: PASA), the premier online community for U.S.
Hispanics, announced that the Company's Board of Directors had
approved the development of a plan of liquidation and sale of the
Company's assets with the proceeds to be distributed to the

The Company's principal assets for sale include the following: the website business, its three wholly-owned subsidiaries
-, and, and all other
furniture, fixtures and equipment. The plan will be subject to
shareholder approval. The meeting of quepasa's shareholders to
approve the plan is expected to be held in three to four months.
The Company will continue to operate the website and
the three subsidiary websites as it completes the liquidation

"After carefully evaluating every option to maximize shareholder
value over the past nine months, our Board of Directors has
determined that liquidation following the sale of our assets is
the best way to maximize value and provide liquidity to our
shareholders." said Gary L. Trujillo,'s Chairman and
Chief Executive Officer.

Quepasa reduced its workforce from 58 to 20 employees in November,
2000 and will further reduce its workforce throughout the
liquidation process. The Company will take a one-time
restructuring charge of approximately $880,000 in the fourth
fiscal quarter ending December 31, 2000 in connection with the
workforce reductions in this quarter.

About provides the rapidly growing U.S.
Hispanic market with information and interactive content available
in both Spanish and English. The site was founded in 1998 and
includes a search engine, free e-mail, Spanish-language news
feeds, worldwide weather information, chat rooms, games, maps and
message boards.

RECREATIONAL BOAT: Case Summary and 20 Largest Unsecured Creditors
Debtor: Recreational Boat Group Limited Partnership, a Delaware
         Limited Partnership
         100 Sea Horse Drive
         Waukegan, Illinois 60085

Affiliates: Outboard Marine Corporation
             OMC Recreational Boat Group, Inc.
             OMC Fishing Boat Group, Inc.
             OMC Aluminum Boat Group, Inc.
             OMC Latin America/Carribean, Inc.
             Recreational Boat Group Limited Partnership
             Outboard Marine Transportation Corporation
             OMCEMA, Inc.
             OMC Nevada, Inc.

Type of Business: The Debtor is a large dedicated manufacturer of
                   outboard marine engines and boats and parts and
                   accessories therefor.

Chapter 11 Petition Date: December 22, 2000

Court: Northern District of Illinois

Bankruptcy Case No.: 00-37415

Judge: Jack B. Schemtterer

Debtor's Counsel: David S. Kurtz, Esq.
                   Skadden, Arps, Slate, Meagher & Flom (Illinois)
                   333 West Wacker Drive
                   Chicago, IL 60606
                   (312) 407-0700

Total Assets: $ 50 Million above
Total Debts : $ 50 Million above

20 Largest Unsecured Creditors:

State Street Bank and
Trust Company as Indenture Trustee
for 10 _% Sr Notes Series A Due 2008
Steven Cimalore
Goodwin Square
225 Asylum Street, 23rd Flr
Hartford, CT 06103
Fax:(860) 244-1897                 Notes             $ 160,000,000

Transamerica Commercial Finance
5595 Trillium Boulevard
Hoffman Estates, Illinois 60192    Trade                 $ 480,825

Ashland Chemical Co., Inc.
P.O. Box 2219
Columbus, OH 43216-2219            Trade                 $ 467,664

Cook Composites and Polymers
P.O. Box 95928
Chicago, IL 60694-5928             Trade                 $ 411,349

FRP Supply
5200 Blazer Pkwy
Dublin, OH 43017                   Trade                 $ 327,838

Graham Creative Sales (USA) Inc.
16787 Hymus Blvd.
Kirkland, Quebec H9H3L4            Trade                 $ 259,708

Taylor Made Systems                Trade                 $ 229,564

Inland Plywood Company             Trade                 $ 216,149

Jaycor Inc.                        Trade                 $ 210,109

Alpha/Owens L.L.C. (IL)            Trade                 $ 203,843

Composites One, LLC                Trade                 $ 203,492

Ameritex Technologies, Inc.        Trade                 $ 193,153

Alpha Resins Supply Inc.           Trade                 $ 168,299

Portage Wiring Systems             Trade                 $ 164,407

G&T Industries, Inc.               Trade                 $ 154,593

Richland County Treasurer          Trade                 $ 136,926

Attwood Corporation                Trade                 $ 134,544

Teak Isle Mfg.                     Trade                 $ 127,087

Quality Running Gear, Inc.         Trade                 $ 126,971

Matrix Composits, Inc.             Trade                 $ 111,941

RHYTHMS: Moody's Downgrades Senior Unsecured Debt Ratings to Caa1
Moody's Investors Service today downgraded the senior unsecured
debt ratings of Rhythms NetConnections, Inc. to Caa1 from B3.
Moody's also lowered the senior implied and issuer ratings to Caa1
from B3. Moody's outlook at the new rating level is negative. The
ratings action follows the company's recent earnings announcement
and its guidance on future results that fall short of Moody's
expectations. The downgrade also reflects Moody's concern that
Rhythms lacks sufficient liquidity to sustain its capital needs in
the intermediate term.

As of September 30, 2000, Rhythms recorded unrestricted cash and
short-term investments of $670 million which it considers
sufficient to fund its business plan through approximately
December 2001. However, according to Moody's earlier calculations,
the company has a funding gap in excess of $1 billion before it
turns EBITDA positive. Public investor sentiment for the DLEC
sector has suffered substantially during the course of this year
without any indication of a rebound. Accordingly it may be
difficult for the company to access the public markets to fund its
growth. Rhythms is sponsored by a number of private equity
partners, including Hicks Muse Tate and Furst, Microsoft, WorldCom
and Cisco. There can be no assurance that these partners will
provide additional private equity.

Should Rhythms experience difficulty in obtaining additional
funding, it would likely elect to conserve liquidity by scaling
back its growth, however this course would probably have a
negative impact on the company's debt service coverage timetable.

In terms of line count, Rhythms is the smallest of the three major
DLEC's, moreover ISP's represent a relatively smaller proportion
(35% of total lines and 11% of revenues) of its customer base than
its peers. The bulk of Rhythm's consumer business, about 16,000
installed lines at the end of the third quarter 2000, is
distributed through two financially challenged ISP's, Flashcom
Inc. and Telocity Inc. Recently, Flashcom filed for bankruptcy
protection. In the case of Flashcom, Rhythms is attempting to
migrate those lines installed with Flashcom to financially
stronger ISPs or onto its own network. Telocity has recently
agreed to be acquired by Hughes Electronics Corporation. As of the
end of the third quarter of 2000, Rhythms stated that all customer
accounts were current.

The debt securities affected are:

   a) $300 million 14% senior notes due 2010, to Caa1 from B3

   b) $325 million 12.75% senior notes due 2009, to Caa1 from B3

   c) $290 million discount notes due 2008, to Caa1 from B3.

   d) $169 million 6.75% Cum. Conv. Preferred Stock, rated "ca"

Rhythms NetConnections is headquartered in Englewood, Colorado.

U.S. TRUCKING: Changes Name to U.S. Holding & Relocates Offices
U.S. Trucking Inc. (OTC BB:USTK) announced its plans to change its
name to U.S. Holding Corp., relocate its corporate offices to
Louisville, and effect a 1-for-100 stock split.

Subject to shareholder vote and acceptance, the company's board of
directors has approved the name change, the relocation of its
corporate offices, and a reverse split of its issued and
outstanding common shares on a 1-for-100 basis.

The name change clearly reflects the company's new focus on
purchasing, financing, managing, and growing non-asset-based
trucking operations. The relocation to Louisville centralizes
management and many corporate resources. The aggressive reverse
stock split is expected to enable greater marketability and
distribution of the company's securities in that the subdivision
creates a market valuation more in line with the company's
intrinsic and near-term value.

Commenting on the changes, Dan Pixler, chairman and chief
executive officer of U.S. Trucking, stated: "The changes announced
today were necessary to initiate the rebuilding of our public
holding company and begin its recapitalization. Since divesting
its non-profitable operating subsidiaries earlier this month and
taking significant accounting charges for them, the company is now
clearly poised for profitability. Given our new business strategy,
each of our current planned acquisitions should be profitable from
the start. With the management and financing resources we make
available, we expect to yield further growth and increased
profitability from these acquired companies. Details of our new
business plan shall be released to the public after the first of
the New Year.

"Once these issues are voted on and accepted by the shareholders,
we shall file for a change in our trading symbol and subsequently
announce that change to the public," Pixler concluded.

WHEELING-PITTSBURGH: Hiring PSG as Procurement Consultants
Wheeling-Pittsburgh Corporation applied for and was granted
authority to employ the firm of Procurement Specialty Group, Inc.,
to act as procurement consultants for the Debtors in their on-
going chapter 11 cases. The professional services which PSG will
render to the Debtors may include, but shall not be limited to,
the following:

   (a) Reviewing and analyzing the Debtors' procurement contracts,
including but not limited to contracts to purchase maintenance,
repair and operating supplies, raw materials, services,
construction and capital equipment, and advising the Debtors which
contracts can be renegotiated to reduce the cost to the Debtors;

   (b) Assisting the Debtors in negotiating procurement contracts,
including but not limited to contracts to purchase maintenance,
repair, and operating supplies, raw materials, services,
construction and capital equipment;

   (c) Reviewing and analyzing the Debtors' purchasing processes
to identify deficiencies and recommend improvements;

   (d) Reviewing and analyzing the Debtors' purchasing personnel
organizational charts to recommend improvements;

   (e) Working with Debtors' purchasing personnel to improve
vendor communications and relations;

   (f) Reviewing and analyzing all available data for possible
cost/price reductions in blanket orders and service contracts;

   (g) Assisting Debtors in the development and approval of
multiple vendor sources for critical materials; and

   (h) Performing such other procurement-related duties as PSG and
the Debtors shall deem appropriate and feasible.

John D. Fry, President of PSG, on behalf of PSG, discloses that
PSG has in the past and will likely continue in the future to
provide general consulting services to suppliers of the Debtors,
some of which are also creditors of the Debtors. PSG assists these
suppliers in negotiating lower prices for the commodities that the
suppliers purchase from other entities. PSG does not provide
advice to these suppliers in any way which relates to the prices
for which these suppliers sell their products to the Debtors;
therefore, PSG averred that its services to these suppliers does
not directly relate to the Debtors' estates, assets or businesses.
However, in the interests of full disclosure, Mr. Dry disclosed
that he, as President of Medical-Business Alliance, Inc., provided
management consulting services to Tube City, Inc., a creditor
of the Debtors.

The Debtors have proposed that PSG be compensated in the following
amounts for the services described:

   (a) Initial Fee. The Debtors will pay PSG an initial cash
retainer of $70,000 to be held pending completion of the

   (b) Project Fee. The Debtors will compensate PSG for the
services described above at its ordinary billing rates. PSG's
hourly rates are set at a level designed to fairly compensate the
firm for the work of its employees and to cover fixed and routine
overhead expenses. The current hourly rates of PSG employees who
are expected to render services to the Debtors in connection with
these cases and their hourly rates are as follows:

      Professional            $ 175.00 per hour
      Clerical                 $ 25.00 per hour

These hourly rates will be applied in full to travel time spent in
the performance of the services described above in exchange for
PSG's having agreed to a more favorable fee structure.

   (c) Percent of Savings. The Debtors will pay PSG an amount
equal to 17.5% of all savings which are realized as a result of
PSG's services.

   (d) Expenses. The Debtors will reimburse PSG for the costs of
all of its travel expenses, and the Debtors will further pay PSG a
flat fee of $50 per month to cover all administrative expenses,
including such items as postage, phone and fax charges, and office

As of November 10, 2000, PSG had received the initial fee of
$70,000. PSG also received from the Debtors $35,986.24 in fees for
services and expenses already performed and incurred and for
services expenses expected to be incurred and performed prior to
the filing date of these Chapter 11 cases. PSG is not owed any
amounts for prepetition obligations of the Debtors. (Wheeling-
Pittsburgh Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

ZILOG INC: Moody's Mulls Downgrade of B2-Rated Senior Notes
Moody's Investors Service placed under review for possible
downgrade the B2 rating on Zilog, Inc.'s $280 million 9-1/2%
guaranteed senior secured notes, due 2005. At the same time,
Moody's placed under review for possible downgrade the company's
B2 senior implied and B3 senior unsecured issuer ratings.

The review was prompted by Zilog's announcement of anticipated
sequential declines in revenue for FY2000Q4 and FY2001Q1 of 15%
and 10%, respectively. The company's $66.5 million revenues
recorded in FY2000Q3 imply current quarter sales of $56.5 million
and FY2001Q1 sales of about $51 million. FY2000Q4 revenues would
be also be about 15% lower on a year-over-year comparison,
although full-year revenues will approximate FY1999. Considering
Zilog's modest EBIT margins of 2.5% for FY2000Q3 and 6.4% for the
LTM ended October 1, 2000, adjusted for special charges taken in
FY2000, and increasing costs devoted to research and development
spending, it would appear likely that the company will report
operating losses for FY2000Q4 and the full fiscal year. EBITDA
coverage of interest expense for the LTM was just over 2 times.

Moody's review will take into account the market for Zilog's
serial communication controllers and various network processors, a
segment that had been gaining momentum for the company as it
shifted its emphasis away from its legacy embedded control devices
that had been the mainstay of the company's business for nearly
thirty years. The company's inability to sustain its top-line
growth after revenues initially collapsed during the 1998
recapitalization has become a concern, particularly in light of
the outstanding debt continuing to exceed annual revenues.
Furthermore, near-term uncertainty over customer inventory
positions and projected telecommunications service provider
capital spending commitments through 2001 could challenge the
company beyond the two fiscal periods that provide current

The review will additionally assess Zilog's liquidity position and
potential to secure additional resources. Cash and cash
equivalents of about $61 million at FY1999 year end had been drawn
down to approximately $35 million as of October 1. While
adjustments in working capital requirements could generate some
additional cash, the prospect of severance payments, anticipated
FY2000Q4 capital expenditures of about $10 million, and an
impending March 1, 2001 interest payment of nearly $13 million
could reduce this balance further. The company does have in place
a bank facility comprised of a $25 million revolving credit
facility expiring on December 30, 2001 and a $15 million credit
line that can be used for capital expenditures due in 2003. This
facility had not been drawn as of October 1, but borrowings are
subject to an advance formula and a borrowing base. As a means of
reducing operating expenses and buttressing margins, the company
is exploring the prospective sale of Mod 2, its five-inch wafer
fabrication facility in Nampa, Idaho. A shelf registration for an
initial public offering was filed by the company in August, 2000
but was withdrawn one month later. Texas Pacific Group, the
company's equity sponsor, invested $118 million in Zilog at the
time of the recapitalization.

Zilog, Inc., a designer, manufacturer and marketer of
semiconductor micro-logic devices for use in communications and
application standard products that target the embedded control
market, is headquartered in Campbell, California.

* BOOK REVIEW: Merger: The Exclusive Inside Story of the Bendix-
               Martin Marietta Takeover War
Author: Peter F. Hartz
Publisher: Beard Books
Softcover: 418 Pages
List Price: $34.95
Order a copy today from at

Review by Gail Owens Hoelscher

William Agee, the youngest man ever to head one of the top 100
American corporations, seemed unstoppable.  In 1977, at the age of
39, he took over Bendix Corporation, an aerospace, automotive, and
industrial firm, determined to diversity the company out of the
automotive industry.  In his words, "Automobile brakes are in the
winter of their life and so is the entire automobile industry."  
He sold off a few Bendix units, got some cash together, and began
to look for acquisitions.

Then Agee's relationship with Mary Cunningham burst into the news.  
Agee had promoted Cunningham from his executive assistant to vice
president, to the outrage of other Bendix employees.  Their
affair, replete with power, brains, youth, good looks, charm,
denial, and deceit, fascinated the American public.  Cunningham
was forced to leave Bendix to work for Seagrams, with the entire
country wondering just how well she would do.  The two divorced
their respective spouses and married soon thereafter.  To the
chagrin of many, Cunningham continued to play a pivotal role in
Bendix affairs.

Eager to regain his standing, Agee turned to acquisition as soon
as the gossip died down.  A failed attempt to acquire RCA left him
more determined than ever.  He then set his sights on Martin-
Marietta, an undervalued gem in the 1982 stock market slump.  Thus
began an all-out war of tenders and countertenders, egoism and
conceit, half-truths and dissimulation, and sudden alliances and
last-minute court decisions.

This is an exciting and detailed account of the war's scuffles,
skirmishes, and battles.  The author, son of a long-time Bendix
director, was able to interview some of the major participants who
most likely would have refused the requests of other authors.  
Some gave him access to personal notes from the various
proceedings.  His knowledge of not only the details of the deal,
but the personalities of the many and varied players is reflected
in the extensive dialogue that is woven throughout the narrative

In addition, it is obvious that Hartz thoroughly researched the
legal and other documents involved in the takeover war, as well as
news reports and press releases.  He explains the complicated
legal maneuverings very clearly, all the while keeping the reader
entertained with the personal lives and thoughts of the players.  
For example, in the Epilogue to the book, Hartz notes that in
1982, Bill Agee and Mary Cunningham were named that year's Most
Intriguing Couple by People magazine, noting that the photo that
appeared "provoked howls of derision in the business community"
because "the couple was pictured in their bedroom with Mary
wearing a cable knit sweater sitting on the edge of the bed.  Bill
was on his knees before her, holding her hands."

People love this book.  The New York Times Book Review said,
'Aggression and treachery, hairbreadth escapes and last-minute
reversals, 'white knights' and 'shark repellants' - all of these
and more can be found in the true-life adventure of the Bendix-
Martin Marietta merger war."  The Wall Street Journal said "Merger
brims with tension, authentic-sounding dialogue and insider

Peter F. Hartz was born in Toronto, Canada, in 1953, and moved to
the U.S. as a child.  He holds degrees from Colgate University and
Brown University.  He lives in Toluca Lake, California.


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

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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.

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