TCR_Public/010103.MBX            T R O U B L E D   C O M P A N Y   R E P O R T E R

               Wednesday, January 3, 2001, Vol. 5, No. 2

                               Headlines

ANICOM INC: Shareholders Seek Damages for April-to-July Purchases
APPLIED MAGNETICS: Court Establishes March 5 Bar Date
BETHLEHEM STEEL: Moody's Drops Rating to B1 & Says Outlook is Negative
BRADLEES, INC: Outlines Payment & Return Rules Liquidators will Follow
CORAM HEALTHCARE: Confirmed Plan Converts $122 Million of Debt to Equity

DORSEY TRAILERS: Negotiates for Extension of Cash Collateral Agreement  
DRYPERS CORPORATION: Court Approves $70.2 Million Sale to Paragon
FINOVA GROUP: Warren Buffet Buys Junk Bonds for Millions, Paper Says
INTERNET SPORTS: Unable to Secure New Financing, Operations Halt
LERNOUT & HAUSPIE: Proposes New Employee Benefit Program

LTV CORPORATION: Judge Bodoh Approves Debtors' First Day Motions
LTV CORPORATION: Cleveland-Cliffs Waits for Effects of LTV Actions
METAL MANAGEMENT: Nasdaq Delists Common Stock from Small Cap Market
MIDLAND FOOD: Employs PricewaterhouseCoopers as Accountants
MONTGOMERY WARD: Little Will be Worth Salvaging, Analysts Say

MONTGOMERY WARD: GE Capital Sees "No Material Effect" on Earnings
PACIFIC GAS: Bad Credit Makes February Supplies Uncertain
PACIFIC GAS: Has 3 to 7 Weeks of Cash Left, Spokesman Says
PACIFIC GATEWAY: Files for Chapter 11 Protection in San Francisco
PINACLE BRANDS: Resolves Disputes With San Jose Sales

SPREE.COM: Asset Sale Set for $615,000, Subject to Higher Offers STAGE
STORES: Closes 121 More Stores in 14 States
SUN HEALTHCARE: Committee & Lenders Decry Need for an Examiner
T&W FINANCIAL: Confirmation Hearing on Liquidating Plan Set for Jan. 24
US AIRWAYS: Moody's Review Flies in an Uncertain Direction

                               *********

ANICOM INC: Shareholders Seek Damages for April-to-July Purchases
-----------------------------------------------------------------
A consolidated complaint has been filed in the Anicom Securities Class
Action, pending before Judge John Darrah of the U.S. District Court in
Chicago.  The present defendants include Anicom Inc. (NASDAQ:ANIC) and
several former individual officers and/or directors of Anicom, including
Scott Anixter, Alan Anixter, Carl Putnam, and Don Welchko.  The case
involves, among other things, Anicom's recent admission of an
overstatement of net profits and revenues of at least $35 million over a
period of just over two years. There are approximately 25 million common
shares of Anicom stock outstanding. Many may have been purchased during
the class period.

Anicom has just issued a press release stating that it does not now
expect Anicom shareholders who continue to hold Anicom common stock to
receive any of the proceeds from an anticipated bankruptcy. (See Dec.
22, 2000 Anicom press release.) This lawsuit seeks damages for those who
purchased during the class period of April 29, 1998 through July 18,
2000.

Judge Darrah has appointed Kenneth McNeil and the law firm of Susman
Godfrey LLP in Houston, Texas, as lead counsel in this class action. The
law firm of Susman Godfrey has played a leadership role in a number of
class actions.  Liaison counsel in Chicago is Foley & Lardner,
represented by Doug Hagerman.  Assisting trial counsel is Lynn Sarko and
the law firm of Keller Rohrback in Seattle, Washington. Special advisory
counsel on the matter is the law firm of Wolff Popper in New York City.
Lead plaintiff in the case is the State of Wisconsin Investment Board.
Inquiries about the case should be directed to 800/776-6044, or any of
the following:

     Kenneth McNeil, Esq. -- Lead Counsel
     Susman Godfrey LLP
     1000 Louisiana, Suite 5100
     Houston, TX
     (713) 653-7814

     Doug Hagerman, Esq. -- Liaison Counsel
     Foley & Lardner
     One IBM Plaza, Suite 3300
     330 North Wabash Avenue
     Chicago, IL 60611
     (312) 755-1900

     Lynn Sarko -- Assisting Trial Counsel
     Keller Rohrback LLP
     1201 Third Avenue, Suite 3200
     Seattle, WA 98101
     (206) 623-1900

    
APPLIED MAGNETICS: Court Establishes March 5 Bar Date
-----------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California, Santa
Barbara Division, directs that creditors of Applied Magnetics
Corporation, must file their proofs of claim by March 5, 2001.  Applied
Magnetics filed for chapter 11 protection nearly a year ago.  The case
number is ND 00-10066 RR.  Theodore B. Stolman, Esq., as Stutman,
Treister & Glatt represents the Company.  


BETHLEHEM STEEL: Moody's Drops Rating to B1 & Says Outlook is 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 negative.

Ratings downgraded are:

Bethlehem Steel Corporation:

     * senior implied rating to B1 from Ba3,
     * debentures and notes (including assumed obligations of Lukens,
       Inc.) to B2 from Ba3,
     * preferred stock to "caa" from "b2",
     * 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: Outlines Payment & Return Rules Liquidators will Follow
----------------------------------------------------------------------
Bradlees, Inc. issued a statement last week giving customers the payment
and merchandise return rules that will be followed during the Going Out
of Business Sales being run by a joint venture comprised of Gordon
Brothers Retail Partners LLC, The Nassi Group, LLC, The Ozer Group, LLC,
Hilco Trading Company, Inc., and Garcel, Inc. d/b/a Great American
Group:

    * effective December 30, 2000 the Company will continue to honor
      Bradlees cash cards in all stores for a period ending January 15,
      2001 at the close of business;
    
    * the Company will honor merchandise exchanges of non-defective
      merchandise during this same period;

    * exchanges will only be honored for merchandise purchased prior to
      December 26, 2000.

    * all merchandise exchanges must be accompanied by the original
      receipt.

"[A]s a result of the change in policy, there is no need for customers
to file creditor claims to the extent that they take advantage of this
opportunity . . . although customers may assert claims in the Chapter 11
cases," Bradlees explained.  

Bradlees, Inc. announced on December 26, 2000 that it had filed for
protection pursuant to Chapter 11 of the United States Bankruptcy Code
in order to conduct an orderly liquidation of its business and sale of
its assets. The Company expressed apologies to customers for the
inconvenience it had caused while initially trying to balance the
interests of all of the Company's creditors.

In its petition, the Company cited a general economic downturn,
including rising interest rates and higher gas and heating oil prices,
as factors which have reduced the disposable income available to
Bradlees' core customers. In addition, the filing stated that new
competition, unseasonable weather in the first half of 2000, and more
recently, the tightening of trade credit and curtailment of inventory
shipments had an adverse affect on the Company's ability to continue to
operate.

Bradlees operates 105 stores and three distribution centers in seven
Northeast states with sales of $1.5 billion in 1999. Bradlees offers an
assortment of merchandise focused on basic and casual apparel, basic and
fashion items for the home, and commodity and convenience products. The
Company employs approximately 9,800 employees.



CORAM HEALTHCARE: Confirmed Plan Converts $122 Million of Debt to Equity
------------------------------------------------------------------------
Judge Mary Walrath of the U.S. Bankruptcy Court for the District of
Delaware approved Denver-based Coram Healthcare Corporation and Coram
Inc's request to allow note holders to convert about $122 million of the
principal and unpaid accrued interest of their Series A and B notes into
preferred stock, Primezone said.  

The preferred stock, which subject to the court's approval may be
restructured under a plan of reorganization, will pay a cumulative
compounding annual dividend at 15% payable quarterly in arrears.  
Payments made before the reorganization will be made in additional
shares of preferred stock, while those made after the effective date
will be made in cash or in shares of common stock equal to the fair
market value of the dividend payment, Primezone said.  The stock will be
subject to the same covenants as Coram's A and B notes.  Holders of the
stock will have 47.5% of voting rights and may select at least 3 of 7
members of Coram Inc's board of directors, but stockholders have agreed
to suspend their corporate governance rights while the Chapter 11
process is going on.  

The company's remaining Series A and B notes, worth about $136 million,
will have an annual interest rate of 9% payable quarterly and will
reflect an amended maturity date of June 30, 2001.  

Walrath has also extended Coram's exclusive right to submit a plan of
reorganization to the Court for 90 days.  Coram Healthcare Corporation
chairman, president and CEO Daniel D. Crowley said, "We are very pleased
with these timely decisions.  This will allow us to work on the debt
restructuring process in an orderly fashion."  He also said that Coram's
operating subsidies were generating adequate cash flow and were meeting
all obligations to patients, vendors and employees.  

Coram, which provided quality home infusion therapies and support for
clinical trials, had sought voluntary Chapter 11 protection on August
last year with the U.S. Bankruptcy Court for the District of Delaware.  
It had debts of $251 million.  


DORSEY TRAILERS: Negotiates for Extension of Cash Collateral Agreement  
----------------------------------------------------------------------
As previously announced on December 5, 2000, Dorsey Trailers, Inc. (OTC
Bulletin Board: DSYT) filed a voluntary petition for Relief under the
provisions of Chapter 11 of the U.S. Bankruptcy Court for the Middle
District of Alabama, Montgomery, Alabama (Bankruptcy Case No. 00-6792-
WRS).  Chapter 11 allows the Company to remain debtor-in-possession of
its assets and business while being subject to the supervision and
orders of the Bankruptcy Court for certain transactions or actions.
Pursuant to the Bankruptcy Code, the Company, as debtors and debtors-in-
possession, will continue to manage and operate the assets and business,
pending the confirmation of a plan of reorganization and subject to the
supervision and orders of the Bankruptcy Court.

Since filing for bankruptcy, the Company has entered into successive
two-week agreements with Foothill Capital Corporation, the lender under
the Company's existing working capital credit facility for use of cash
collateral to fund on-going operations. The current agreement is limited
in duration until January 3, 2001. Management of the Company and its
representatives are currently negotiating with Foothill Capital
Corporation for an extension of the cash collateral agreement. No
assurances can be given that the Company and its representatives will be
successful in obtaining approval for the extension of the cash
collateral agreement.

Marilyn R. Marks, Chairman of the Board of Directors of the Company
issued the following statement: "As we begin the process of complying
with the requirements of the Bankruptcy Code under Chapter 11, it has
become clear to the Company that if there is no approved plan of
reorganization in which the Company continues as an ongoing operation
thus requiring a sale of the assets of the Company, it is unlikely that
the Company will be able to obtain a true market value for the Company's
assets due to the severe downturn in the trailer manufacturing industry.
Accordingly, the proceeds from a sale of the assets of the Company after
payment of secured creditors and administrative claims would not be
sufficient to satisfy all of the unsecured creditors of the Company. As
such there would be nothing available for the distribution to the
Company's stockholders.

Dorsey Trailers, Inc. -- http://dorseytrailers.com-- was in the  
business of designing, manufacturing, and marketing one of the broadest
lines of high quality, customized truck trailers through three plants
located in Alabama, Georgia, and South Carolina.


DRYPERS CORPORATION: Court Approves $70.2 Million Sale to Paragon
-----------------------------------------------------------------
Drypers Corporation (OTC Bulletin Board: DYPR) received approval from
the United States Bankruptcy Court for the Southern District of Texas
for Paragon Trade Brands, Inc. (OTC Bulletin Board: PGTR) and/or its
nominees or business affiliates to be the stalking horse bidder for the
sale or other acquisition of Drypers' business. The proposal approved by
the Court calls for an acquisition price of $70.2 million, which is
comprised of $62.1 million in cash and the assumption of an estimated
$8.1 million of subsidiary debt.

The Court also approved Paragon to be the lender in connection with a
proposed additional $5 million postpetition credit facility.

Additionally, the Company received approval of certain bidding
procedures for the sale of its business and retention plans for non-
executive and executive employees. The bidding procedures approved by
the Court will govern the timing and consideration of competing bids for
the business of Drypers or discrete parts thereof. Pursuant to the
Bankruptcy Court's approval, Paragon will have until January 12, 2001 to
complete its limited confirmatory due diligence and to sign definitive
agreements.

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


FINOVA GROUP: Warren Buffet Buys Junk Bonds for Millions, Paper Says
------------------------------------------------------------------
Paul M. Sherer and Devon Spurgeon writing for The Wall Street Journal,
relate that billionaire Warren E. Buffett has turned his attention to
the battered junk-bond market.  Specifically, through his Berkshire
Hathaway Inc. investment vehicle, Mr. Buffett has recently paid several
hundred million dollars to buy the junk bonds of Finova Group Inc.

Finova, the Scottsdale, Ariz., commercial lender, recently announced it
had signed a securities-purchase agreement with Leucadia National Corp.
under which New York-based Leucadia would invest as much as $350 million
in Finova in return for voting control of the company. The Leucadia deal
is subject to Finova restructuring its bank and public debt outstanding.

Finova said a debt restructuring was necessary "to avoid the possibility
of reorganization under protection of the courts." Finova, with $6.3
billion in bonds and $4.69 billion in bank debt, has $1.6 billion of
principal payments due in May 2001.

Though Mr. Buffett's purchases were made before Leucadia stepped in, the
Journal reporters note, he may now be in a position to affect Leucadia's
deal, explaining that the proposed restructuring must be approved by
two-thirds of the bondholders and all of the bank lenders. Mr. Buffett
hasn't spoken to Finova about his actions or intentions, according to
people familiar with the situation.  Market watchers tell the Journal
that Leucadia will face an uphill battle getting the unanimous approval
it needs from the banks.

There has been heavy trading in Finova bonds in recent months,
particularly in Finova's benchmark $1.1 billion 7.25% bond maturing in
2004, with a number of distressed-debt investors taking positions. One
distressed-debt investor who owns some Finova bonds, which are now
trading at about 59 cents on the dollar, figures that in a liquidation
bondholders could recover more than 80 cents on the dollar, though he
thinks a restructuring is more likely.


INTERNET SPORTS: Unable to Secure New Financing, Operations Halt
----------------------------------------------------------------
J. Thomas Murray, President and CEO of Internet Sports Network, Inc.
(OTCBB:ISPS), announced that the Company failed to secure additional
funding and therefore will be ceasing operations effective immediately.

As previously disclosed in the Company's Form 10-Q for the quarter ended
September 30, 2000 filed with the SEC on November 20, 2000, the Company
had been in default with three loans, its promissory note and its Series
1 convertible debentures since the quarter ending June 30, 2000. The
Company previously stated in such Form 10-Q that it would need to cease
operations and seek protection under federal bankruptcy laws if the
Company was unable to obtain equity or debt financing or generate
additional cash through the sale of assets by November 30, 2000. The
Company was unable to obtain funding through any of these three sources.
As a result, the Company was forced to release all employees on December
21, 2000.

J. Thomas Murray will continue to serve as the Company's Chief Executive
Officer and will supervise the analysis of the Company's financial
position and implementation of subsequent action plan.


LERNOUT & HAUSPIE: Proposes New Employee Benefit Program
--------------------------------------------------------
Lernout & Hauspie Speech Products and Dictaphone Corporation have
presented a Motion to Judge Wizmur seeking an Order freezing the
existing Dictaphone Pension Plan, and implementing a new employee
benefit program.

The L&H Group offers its employees various benefits in addition to
salary, including, but not limited to, medical benefits, dental
benefits, life insurance, accidental death and dismemberment insurance,
short-term disability, long-term disability, tuition reimbursement,
flexible spending accounts and 401(k) plans. In an effort to decrease
the economic and administrative burdens associated with offering the
employee benefits, the L&H Group decided in October 2000, and notified
its employees at the same time, that it would offer a new program which
modifies the terms and conditions of the existing employee benefits and
makes such programs more uniform throughout the L&H group.

The current employee benefits programs cost approximately $15.7 million
per year.  The new benefits program will save the L&H Group an estimated
$600,000 in gross costs on medical and dental alone.  The Debtors intend
to offer the new benefits programs to its employees beginning on or
after January 1, 2001.  The existing benefits programs have been
cancelled and will expire on December 31, 2000.  If the new program is
not implemented, the L&H Group's employees could be left without
coverage.  Although the L&H Group believes that the implementation of
the new benefits program is a transaction in the ordinary course of its
business, the L&H Group nonetheless seeks judicial review and approval
of these changes.

The changes are described below:

     (a)  Medical Benefit Program.  

          Eligibility:  First of month following date of hire; if hired
on the first day of the month, employee is eligible on that date.  This
program is for active, regular, full-time employees who work 30 or more
hours per week.

          Plan Administrator:  Blue Cross/Blue Shield of Massachusetts

          Preferred Provider:
               a) In network and out-of-network benefits
               b) No deductible for in-network
               c) $10 co-pay for doctor's office visits
               d) $50 emergency room visit (waived if admitted)
               e) $250 out-of-network deductible per covered person (not
                  to exceed $500 per family)

          Vision Service:
               a) One routine exam each year
               b) Discounts on eyewear

           Fitness Reward Program: Reward toward membership at any
                  health club

           Prescription Drugs
               a) $5 generic
               b) $10 brand name
               c) Mail order program available

           Employee Contribution (monthly)
               a) $29.10 employee only
               b) $58.05 employee plus one
               c) $87 family

     (b) Dental benefit program

           Plan administrator: Metlife

           Deductible:
               a) $50 individual annual deductible
               b) $150 maximum family annual deductible
               c) $1,500 calendar year maximum

           Employee Contribution (monthly)
               a) $4.42 employee only
               b) $9 employee plus one
               c) $13.95 family

     (c) Life and AD&D Insurance:

           Plan administrator: Fortis Benefits Insurance Co.

           Life:  One times base earnings to a maximum of $150,000
                 (minimum $50,000).

           AD&D: Matching coverage for employee by company

           Employee Contribution (monthly): None; entire cost paid by
           company.

     (d) Supplemental Life Insurance:

           Plan Administrator: Fortis Benefits Insurance Co.

           Coverage: Up to five times base salary (not to exceed
           $500,000).

           Guaranteed amount: $150,0000 (proof of good health required
           for additional amounts)

           Three-year limit on portability for employees or dependents
           with conversion option at end of three-year period.

           Coverage available for spouse and dependents.

           Employee Contribution (monthly): Entire cost to be paid by
           employee.

     (e) Supplemental AD&D Insurance

           Plan Administrator: Fortis Benefits Insurance Co.

           Benefits: Up to five times base salary (not to exceed
           $500,000)

           Employee Contribution (monthly): Entire cost to be paid by
           employee.

     (f) Short-term Disability Program:

           Eligibility: After 6 months of continuous service; includes
           non-work related illness or injury.

           Benefits: Payments of 66-2/3% of base salary up to $1,000
           per week, starting on 8th day of disability and up to13 weeks
           with medical certification.

           Employee Contribution (monthly): Entire cost to be paid by
           company.

     (g) Long-term Disability Program:

           Plan Administrator:  Fortris Benefits Insurance Co.

           Benefits: Starts 91st day of disability; 60% of base salary
           up to $7,500 per month.

           Employee Contribution (monthly): Entire cost to be paid by
           company.

     (h) 401(k) Plan:

           Eligibility: First month following 30 days of continuous
           service.

           Plan Administrator: Fidelity

           Benefits: Pre-tax savings up to 15% of yearly salary;
           company match is 50% of first 6% of savings.  Vesting is
           100% after two years, 0 if employment terminated prior to
           two years.

      (i) Tuition Reimbursement Program:

           Eligibility: After 90 days of continuous service.

           Benefits: Up to 100% of tuition costs (based on grades) and
           payment of other costs, such as parking, lab and
           registration fees, for up to two courses per semester, with
           reimbursement up to $5,250 or IRS limit, whichever is
           higher.  Any reimbursement made during prior 12-month period
           is repayable upon employee termination.  Reimbursement for
           graduate studies is taxable.

     (j) Vacation Days:

            Eligibility:  For full-time employees, prorated at 1.25
            days per month for the first calendar year; part-time
            employees prorated based on hours worked per week.

            Benefits: Based on 40-hour week, 15 days during 2d to 4th
            calendar years; 5+ years earns 20 days.  Up to five days
            may be carried over to the following period.  No vacation
            day payouts for unused vacation days during the year, or
            for carryovers upon termination.

     (k) Flexible Spending Accounts:

            Eligibility: First of month following date of hire.

            Plan Administrator: Cafeteria Plan Advisors

            Benefits: Healthcare FSA - $3,000 annual maximum; dependent
               care FSA - $5,000 annual maximum.

            Employee Contribution (monthly): equal amounts deducted
            from employee's paycheck.

The Debtors noted that only Dictaphone offered a pension plan, while L&H
and L&H Holdings do not.  As part of the new benefits program, the L&H
Group seeks to freeze the pension plan offered by Dictaphone as of
January 1, 2001.  Specifically, the Debtors do not propose to modify the
terms of the existing Dictaphone Plan, but instead have asked that the
Court permit them to freeze the Plan with respect to the number of
participants in the plan, and the benefits which have accrued under the
plan.  Existing participants still will be eligible to receive benefits
as early as age 55, or at normal retirement, as currently provided under
the plan, and their years of service still will count toward early
retirement eligibility.  For participants who have not vested, years of
service still will count toward vesting.  The Debtors have represented
that freezing the Dictaphone Pension Plan could product an estimated
savings of $1.8 million per year.  At the same time, the Debtors will
improve the existing 401(k) plan for all employees, which would include
Dictaphone employees.

In drafting the new benefits program, the Debtors compared the previous
benefits offered by each Debtor and attempted to strike a balance
between refining the terms and conditions of the employee benefits to
meet the individual requirements of the Debtors, while concomitantly
making the employee benefits more uniform in an effort to lower costs.

(L&H/Dictaphone Bankruptcy News, Bankruptcy Creditors' Service, Inc.,
609/392-0900).


LTV CORPORATION: Judge Bodoh Approves Debtors' First Day Motions
----------------------------------------------------------------
The LTV Corporation (NYSE: LTV) received Court approval last week of an
interim order authorizing LTV use of its cash collections from accounts
receivable and to obtain post-petition financing.  This cash will allow
LTV to maintain normal operations of LTV Steel, VP Buildings and LTV
Copperweld.  The Company will pursue post petition Debtor-in-Possession
financing immediately.  The Court also approved LTV's requests to honor
all current hourly and salaried employee paychecks, expense checks and
health benefit claims. Retiree health care benefits continue.

"We are very encouraged by the Court's approval of this order and our
first day motions. We now have the funds to continue the normal
operation of our businesses and develop of a restructuring plan that
will result in a viable, successful LTV," said William H. Bricker, LTV's
chairman and chief executive officer.

Bricker said that LTV's businesses were operating as usual, producing
and delivering high quality products to its customers throughout North
America.

The Company is continuing talks with the United Steelworkers of America,
as well as elected federal, local and state legislators to find a
solution to the high fixed costs that threaten its survival in this
import-saturated market. In addition, the Company made a formal request
of both the Clinton and Bush administrations to address the inadequate
enforcement of the foreign import laws.


LTV CORPORATION: Cleveland-Cliffs Waits for Effects of LTV Actions
------------------------------------------------------------------

Iron ore producer Cleveland-Cliffs Inc. said Friday the effect of
Cleveland-based steelmaker and metals fabricator LTV Corporation's
bankruptcy filing will depend on "specific actions undertaken by LTV,"
Reuters reports.

Cleveland-Cliffs said it expects LTV, which had filed for bankruptcy
under Chapter 11, to be a major customer this year and beyond.  The 2
companies had signed a multi-year sales contract early last year.  

Cleveland-Cliffs chairman and CEO John Brinzo told Reuters, "There are
substantial contractual obligations and management relationships between
Cliffs and LTV.  At this time, it is premature to speculate on the
impact on Cliffs or the Empire Mine."  LTV has a 25% stake in the
Cliffs-managed Empire Mine in the Upper Peninsula of Michigan.

Brinzo said that non-performance by LTV on its obligations could have "a
significant impact" on Cliffs and/or the Empire Mine.  


METAL MANAGEMENT: Nasdaq Delists Common Stock from Small Cap Market
-------------------------------------------------------------------
Metal Management, Inc. (Nasdaq Smallcap: MTLM), announced that it has
been notified by the Nasdaq Stock Market that it has delisted the
Company's common stock from the Nasdaq Smallcap Market effective
immediately.  

The Company is currently operating its business as a debtor-in-
possession under Chapter 11 of the United States Bankruptcy Code. Upon
confirmation of the Company's plan of reorganization, the post-
bankruptcy Company intends to apply for listing of its new common stock
on the Nasdaq Stock Market or other national stock exchange.


MIDLAND FOOD: Employs PricewaterhouseCoopers as Accountants
-----------------------------------------------------------
Midland Food Services, L.L.C., sought and obtained Judge Walrath's
permission to employ PricewaterhouseCoopers, LLP, as its accountants
during the course of its chapter 11 restructuring. James E. Wilcosky is
the PwC partner leading the engagement. In her written order, Judge
Walrath directs that "PricewaterhouseCoopers shall keep proper time
records to be submitted with any application for compensation in
accordance with the provisions of the Meade Land & Development Company
decisions, 527 F.2d 280 (3d Cir. 1975) and 577 F.2d 858 (3d Cir. 1978)
and rules of this Court." Judge Walrath's order gives no reasons for
this unusual language.

    
MONTGOMERY WARD: Little Will be Worth Salvaging, Analysts Say
-------------------------------------------------------------
Analysts and retailers say there will be little left to salvage of
Chicago-based 128-year-old department store operator Montgomery Ward,
which announced Thursday that it would cease operating.  

Monica Summers, writing for Reuters, said stores in prime locations may
find retailers who are willing to take on their leases or hire small
groups of staff.  But the future does not appear to be that bright.  As
Barnard's Retail Trend Report president Kurt Barnard puts it, "I
wouldn't put $5 down for Montgomery Ward.  You would inherit nothing but
monumental headaches."  He said however that sites in good locations may
"ultimately be parceled out to other retailers."

General Electric Co.'s financial services arm GE Capital, which owns the
store group, had announced that it was pulling back on funding for
Montgomery, prompting the announcement Thursday last week from
Montgomery that it would file for bankruptcy protection under Chapter 11
of the U.S. Bankruptcy Code for the 2nd time in 3 years.  Montgomery
blamed weak holiday sales and a difficult U.S. retail environment, which
may be due in part to tough competition from the likes of Sear Roebuck &
Co., J.C. Penney Co. Inc, and Wal-Mart, for the decision.  

Montgomery is immediately cutting 450 jobs from its national
headquarters.  It plans to close down 250 retail stores and 10
distribution centers in the next 6 months, which will affect 28,000
store staff.

Merrill Lynch analyst Peter Caruso said home electronics and
entertainment retailers such as Best Buy Co., Inc. and Circuit City
Stores, Inc. will benefit from Montgomery's exit, Reuters said.  "Now,
Best Buy and Circuit City will be able to recoup some of their losses in
regions that are losing Montgomery Ward stores," he said.


MONTGOMERY WARD: GE Capital Sees "No Material Effect" on Earnings
-----------------------------------------------------------------
General Electric Co financial services arm GE Capital says it sees no
material effect on its earnings from Montgomery Ward's recent bankruptcy
filing.

In a prepared statement, GE Capital said, "With our company-wide
strength and the previously disclosed one-time gain from the PaineWebber
transaction, today's filing by Montgomery Ward of a voluntary petition
for Chapter 11 protection will have no material effect on GE Capital
Services' ability to meet our anticipated earnings.  We are on plan to
achieve our numbers."



PACIFIC GAS: Bad Credit Makes February Supplies Uncertain
----------------------------------------------------------
Company spokesman Ron Low revealed that between 15 to 20 suppliers to
Pacific Gas and Electric, which Standard & Poor's last week indicated
was one of two California utilities that risked running out of cash
"within a matter of weeks", have declined to sell to the utility unless
payment is made up front, Reuters reports.  S&P had also warned to
downgrade debt ratings to junk status unless urgent action was taken.  

"The month of January we have enough natural gas... to meet customer
needs.  For February the question is whether suppliers will continue to
sell to us because of creditworthiness," Low said.  The disclosure was
made at a hearing called by the California Public Utilities Commission
which is investigating whether utilities should be allowed to raise
electricity rates.  The commission is due to remove a rate freeze on the
price of electricity billed to consumers and decide on the increase in
the rates tomorrow, January 4.

Utilities have been pushed to the point of bankruptcy by the price
freeze which has not allowed utilities to pass on to consumers power
costs, which as of November last year had reached $7.7 billion,
comprising $3.2 billion for Southern California and $4.5 billion for
Pacific Gas and Electric.  Southern California is a unit of Edison
International (EIX.N), while Pacific Gas is a subsidiary of PG&E Corp
(PCG.N).

The California Public Utilities Commission is holding the hearings in
preparation for a meeting on January 4 when they are expected to lift
the price freeze and decide the level of any increase in electricity
rates.

Low said Pacific has 2.1 billion cubic feet of natural gas in storage
and in pre-purchased long-term contracts per day for the month of
January, and noted that average usage is predicted at 1.5 billion cubic
feet per day.


PACIFIC GAS: Has 3 to 7 Weeks of Cash Left, Spokesman Says
-----------------------------------------------------------
Pacific Gas and Electric spokesman Ronald Low said the utility company
has "virtually exhausted our ability to borrow money.  We have 3 to 7
weeks of cash available."  

Pacific is one of California's two biggest utilities and is seeking to
implement massive price increases for electricity it supplies to
consumers, saying that the rate hikes are needed to stave off
bankruptcy, Reuters said.  Pacific is working for a rate hike of 26%
while Southern California Edison is asking for 30%.  At a California
Public Utilities Commission hearing Friday, Pacific Gas and Electric
director of business and financial planning Walt Campbell said, "The
utility is in dire financial straits."  

Consumer groups have however voiced skepticism.  Consumer advocacy group
Office of Ratepayer Advocates regulatory analyst Robert Kinosian said,
"We don't think they're in nearly the financial difficulty that they
portray themselves to be."  

Consumer group The Utility Reform Network senior attorney Mike Florio
cautions about passing costs directly to California consumers, saying,
"It will bankrupt the whole state."  He noted that Pacific was trying to
separate itself from its holding company which was in better shape.  
"They are in a pretty tight spot... but they are pulling up the
drawbridge at the holding company," he said.

Pacific's holding company is PG&E Corp, which spends $35 million a year
on de-commissioning nuclear facilities, an overfunded area according to
Kinosian.


PACIFIC GATEWAY: Files for Chapter 11 Protection in San Francisco
-----------------------------------------------------------------
Pacific Gateway Exchange, Inc. (Nasdaq: PGEX) filed a voluntary Chapter
11 petition with the U.S. Bankruptcy Court for the Northern District of
California, San Francisco Division.  The Chapter 11 case has been
assigned to the Honorable Dennis Montali, United States Bankruptcy
Judge. The Board of the Company determined that it was in the best
interests of the Company and its constituents that this action be taken.

The Company is in discussions with Bank of America and Bankers Trust
Company, its current lenders, regarding a debtor in possession financing
arrangement and hopes to finalize such financing and seek Bankruptcy
Court approval for the financing within the next few days.
The Company is represented in connection with its Chapter 11 case by
Klee, Tuchin, Bogdanoff & Stern and Pachulski, Stang, Ziehl, Young &
Jones.


PINACLE BRANDS: Resolves Disputes With San Jose Sales
-----------------------------------------------------
Prior to its chapter 11 filing in Wilmington, San Jose Sales &
Distribution, Inc., Fourth-N-Goal Sportscards, Inc., and Gary Brison
sued Pinnacle Brands, Inc., and Pinnacle Trading Card Company in a Texas
state court and in a California federal court. San Jose sought millions.
The allegations of wrongdoing ranged from simple claims on account to
complex antitrust issues. Pinnacle filed counterclaims alleging its own
litany of misdeeds. Pinnacle wants millions in return.

To resolve the morass of litigation, Mitchel H. Perkiel, Esq., at Kay,
Scholer, Fierman, Hays & Handler, LLP, counsel to Pinnacle explains to
the Bankruptcy Court, Pinnacle and San Jose undertood extensive
negotiations. Those efforts culminated in agreement for each patry to
exchange a mutual release with every other party and voluntarily dismiss
all litigation. Pinnacle is convinced that this is the best course of
action and asks Judge Walrath for her stamp of approval on a settlement
agreement memorializing this compromise and settlement of these
litigation claims.


SPREE.COM: Asset Sale Set for $615,000, Subject to Higher Offers
----------------------------------------------------------------
Having called it quits and joining the trail of failed dot.com ventures,
Spree.com Corporation is selling its assets at auction in the U.S.
Bankruptcy Court in Philadelphia.  Subject to higher and better offers
and further subject to Bankruptcy Court approval, BTF PA Corp. has a
$615,000 offer on the table.  Pursuant to various sale procedures
established by Judge Sigmund, competing bids must start at $690,000 and
the auction will be conducted in $50,000 bidding increments.  Provided
that a final bid exceeds the amount owed to Spree's DIP Lender by more
than $100,000, BTF will collect a $50,000 break-up fee if its bid is
topped.  Michael H. Reed, Esq., of Pepper Hamilton LLP (215/981-4416)
serves as counsel to Spree.com.


STAGE STORES: Closes 121 More Stores in 14 States
--------------------------------------------------
Stage Stores Inc. announced that it filed a motion with the U.S.
Bankruptcy Court for the Southern District of Texas to close an
additional 121 stores as a part of its restructuring process.

Jim Scarborough, chief executive officer and president, commented, "As a
part of our ongoing restructuring process, we have identified 348 stores
in 14 states which will serve as our base for returning the company to
profitability. These stores fit the geographic and demographic profiles
we have identified as our niche markets. The majority of these stores
are in markets where we have a long history of operating profitably. In
fact, the performance of this core group of stores has improved
significantly since we began our restructuring process in June."

Scarborough continued, "In order to focus all of our efforts on our core
operations, we have engaged The Ozer Group and Hilco Merchant Resources
to manage the liquidation of the stores scheduled for closure, subject
to Bankruptcy Court approval. Under our agreement, we will receive a
guaranteed recovery for the inventory, net of related expenses."

Stage Stores Inc. brings nationally recognized brand name apparel,
accessories, cosmetics and footwear for the entire family to small towns
and communities throughout the south central and midwestern United
States. The company currently operates stores under the Stage, Bealls
and Palais Royal names.


SUN HEALTHCARE: Committee & Lenders Decry Need for an Examiner
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of Sun Healthcare Group,
Inc., and Bank of America, N.A. as Administrative Agent of the Senior
Lenders and the Debtors object to a motion brought by Peter C. Kern for
appointment of an Examiner.  The United States Trustee opposes the
Motion too.

In separate filings, both the Committee and the Administrative Agent
remind the Court that the Debtors are hopelessly insolvent, as
recognized in the Court's earlier order of denial of Peter Kern's motion
for an equity committee after the United States Trustee rejected Kern's
request to appoint an equity committee.

                 Objection of the Creditors' Committee

The Committee reveals that under the unfortunate realities of the
Debtors' debt structure, substantial liabilities have been asserted
against the Debtors:

        mortgages and other secured debt        $115 million
        senior bank debt                        $900 million
        senior subordinated notes               $432 million
        junior convertible subordinated notes   $430 million
        general unsecured claims                $125 to $200 million
        governmental claims                       undetermined, but
                                                  allegedly significant
        DIP lender claims                       $60 to $200 million

Based on these, the Committee infers that the reorganized value of the
Debtors must substantially exceed $2 billion before there is any value
for Kern and the existing equity. The Committee believes that certain
senior and partially secured creditors will receive only partial
recoveries on their claims, while senior subordinated creditors will
likely receive minimal recoveries, and junior subordinated creditors
will likely receive no recovery. Therefore, the Committee does not
expect adequate reorganization value to make a distribution to equity
holders even under the best scenario.

The Committee relates that in 1999, before the filing of the Chapter 11
cases, the Debtors implemented an overhead reduction plan, eliminating
approximately $200 million of cost savings per year. The current Cost
Reduction Plan submitted by the Debtors anticipates an additional total
annualized savings of approximately $25.4 million, $15.4 million in
regional and corporate overhead reductions and an additional $10 million
in operating expense reductions. As the Committee understands, the
Debtors expect to realize savings of $8.5 million from the divestiture
of underperforming facilities and the sale of non-core subsidiaries,
significant savings in purchasing ($6.2 million), management information
systems ($6.0 million), employees reductions ($1.6 million) and finance
and accounting savings ($1.5 million). Implementation of the Cost
Reduction Plan, the Committee believes, will take approximately six to
eighteen months, with expected savings of $11.4 million by March 31,
2001.

The Committee argues that because the Debtors have undertaken an
extensive cost cutting program, no cause exists to justify Kern's
motion. The Committee also points out that Kern's request for the
appointment of an Examiner is made after significant delay and made with
no regard to the Debtors' cost reduction plan. The Committee believes
that any appointment of an examiner will further increase costs for the
Debtors. Therefore, in the Committee's opinion, if Mr. Kern is truly
concerned with the matters he proposes an examiner to investigate, he
will accept these proposals and withdraw his Motion; if he declines, he
will inflict additional costs on Sun's estates and show his motivation
as being an attempt to extract nuisance value from creditors. The
Committee cites that In re Bradlees, the Court stated that "[the]
appointment of an examiner to conduct a new investigation at this time
would be duplicative, needless and wasteful."

The Committee makes downright comment that the motion for the
appointment of an examiner is a negotiation ploy by Kern to pressure the
Debtors, considering his earlier motion to appoint an equity committee
for the purpose of negotiating a recovery for shareholders. The
Committee asks the Court to consider Mr. Kern's present Motion in the
context of his continuing litigation efforts to extract value for
equity. The Committee believes that in light of the reasons, Kern's
motion should be denied.

                  Objection of the Bank of America

The objection made by the Bank of America is largely along the similar
line as that of the Creditors' Committee. The Bank of America tells the
Court that, as Administrative Agent for the Senior Lenders under the
Credit Agreement dated as of October 8, 1997, the Bank would be ecstatic
if there were sufficient value to satisfy all creditors in full, or even
satisfy the Senior Lenders in full, but unfortunately, the Debtors are
insolvent by a wide margin and any recovery for equity (or subordinated
debt) would be a pure nuisance value recovery.

The Administrative Agent asserts that the Senior Lenders need to make
one fact abundantly clear - they are dedicated to ensuring that the
Debtors' costs are reduced to an appropriate minimum and no opportunity
for revenue enhancement is let pass. The Agent reminds the Court that
the Senior Lenders have every incentive to insure that the debtors'
operating performance is improved as much as possible, in order to
insure a successful reorganization and to maximize the amount of
reorganization debt and cash that can be distributed to the Senior
Lenders. Towards this end, the Senior Lenders have been working
assiduously with their professionals, the Debtors' professionals, the
Committee's professionals, and the Debtors, the Bank of America relates.

Accordingly, the Bank opines that an examiner would duplicate the
efforts of numerous other professionals and the Debtors' management.

Drawing upon reasons largely similar to those cited by the Committee,
the Administrative Agent asserts that no examiner should be appointed.

                        The Debtors' Objection

The Debtors draw the Court's attention to four main factors for which
Peter Kern's motion should be denied:

(1) Kern's objective in seeking an examiner is suspect. Given Kern's
    lack of an economic interest, he should not be able to command an
    investigation not supported by the real parties in interest.

(2) The motion is filed too late, almost a year after Kern sought the
    appointment of an equity committee.

(3) Nobody with an economic interest in the Debtors supports the
    appointment of an examiner. The Lenders and the Committee,
    collectively representing creditors holding in excess of $1.8
    billion in claims, are opposing the proposal.

(4) Numerous professionals retained in Sun's chapter 11 cases are
    already examining the issues that Kern believes require examination
    and the Debtors are willing to provide Kern with the results of  
    those investigations, subject to the execution of a confidentiality
    agreement. Any investigation of an examiner, as proposed by Kern,
    would duplicate what is done by the professionals.

                The United States Trustee's Response

Patricia A. Staiano, the United States Trustee for Region 3, draws Judge
Walrath's attention to 11 U.S.C. section 1104(c) which `authorizes the
appointment of an examiner at any time before the confirmation of a
plan, on request of a party in interest or the U.S. Trustee, after
notice and a hearing, "if the court does not order the appointment of a
trustee".'

The appointment of an examiner under section 1104(c)(2) is mandatory, as
opposed to discretionary, the UST point out. Morgenstern v. Revco D.S.
Inc. (In re Revco D.S., Inc.), 898 F.2d 498 (6th Cir. 1990). The UST
cites that the Court in Revco, noting the difference between subsection
(b)(1)(now (c)(1)), which is discretionary, and subsection (b)(2)(now
(c)(2)), which is mandatory, stated:

     "Section 1104(b)(1), which governs the appointment of an examiner
      when the total unsecured debt is less than $5 million, follows
      the language of section 1104(a) [relating to the appointment of a          
      trustee]; in both cases the appointment is left to the bankruptcy
      court's discretion. The contrast with section 1104(b)(2) could
      not be more striking. When the total "fixed, liquidated,
      unsecured" debt is greater than $5 million, the statute requires
      the court to appoint an examiner."

The UST remarks that the order submitted by Kern is incorrect and
outside the clear language of the statute. The UST says that "11 U.S.C.
section 1104(d) clearly states that when the court orders the
appointment of an examiner, ". . . then the United States trustee, after
consultation with parties in interest, shall appoint, subject to the
court's approval, one disinterested person . . . to serve . . . examiner
. . . " However, the language in the proposed order submitted in Kern's
motion", the UST notes, "would require the UST to consult with certain
specified parties." In this regard, the UST finds that the proposed
order is not consistent with the statute in section 1104(d) which among
other things, controls, and governs the UST's actions, duties and
responsibilities.  (Sun Healthcare Bankruptcy News, Bankruptcy
Creditors' Service, Inc., 609/392-0900)


T&W FINANCIAL: Confirmation Hearing on Liquidating Plan Set for Jan. 24
-----------------------------------------------------------------------
T&W Financial Corporation (Nasdaq:TWFCQ) announced that the Company and
its subsidiary, T&W Financial Services Company L.L.C. have filed a joint
Plan of Liquidation in their bankruptcy proceedings, jointly
administered, in the United States Bankruptcy Court for the Western
District of Washington at Tacoma under Case No. 00-39007.

On December 21, 2000, the Honorable Paul B. Snyder approved the
Company's Disclosure Statement associated with the plan and provided
that notice to Company shareholders be given by press release and the
filing of a Securities and Exchange Commission Form 8-K. Shareholders
are deemed to have rejected the plan and will not be required to vote.

The Plan of Liquidation provides for appointment of a plan administrator
to liquidate assets and provides for payments to priority and general
unsecured creditors from proceeds of specified assets pursuant to
settlement with certain financial institutions. These financial
institutions hold large secured and unsecured claims against the
debtors. The bankruptcy estates of the Company and its subsidiary hold
disputed bankruptcy litigation claims against these financial
institutions. Under the plan, the estates will release claims against
the financial institutions in exchange for contribution of assets,
partial release of security and other interests, and assignment of
proceeds of certain causes of action by the financial institutions.

Although the plan is expected to generate a partial distribution to
general unsecured creditors, the plan expressly provides for no
distribution to shareholders of the Company and all stock will be
cancelled as of the effective date of the plan.

The hearing on confirmation of the plan will be held in the Courtroom of
the Bankruptcy Judge commencing on January 24, 2001, at 8:30 a.m.
Pacific Standard Time, and continuing, if necessary, on January 25,
2001, at 8:30 a.m. Pacific Standard Time, and on continued dates if so
ordered by the Court without further notice. Any objections to the plan
must be in writing, filed pursuant to Federal Rules of Bankruptcy
Procedure 3020(b) with the Clerk, United States Bankruptcy Court,
Western District of Washington, 1717 Pacific Avenue, Tacoma, Washington
98402, and served on the United States Trustee, 600 Park Place Building,
1200 Sixth Avenue, Seattle, Washington 98101, and counsel for the
debtor, Marc Barreca, Preston Gates & Ellis LLP, 701 Fifth Avenue, Suite
5000, Seattle, WA 98104, no later than 4:30 p.m. Pacific Standard Time,
on or before January 16, 2001.

US AIRWAYS: Moody's Review Flies in an Uncertain Direction
----------------------------------------------------------
Moody's Investors Service revised its pending review of the debt ratings
of US Airways Group to a review with direction uncertain from a review
for possible upgrade. The revision considers the weak operating
performance of US Airways, the limited outlook for improved cash flow
generation over the near term, and the potential for weaker debt holder
protection measures. The revision also considers the ongoing discussions
regarding the proposed purchase by United Airlines, Inc. (UAL) of US
Airways and the potential benefits of that acquisition to US Airways
debt holders if US Airways were to become part of the larger UAL group.

Moody's noted that it originally placed US Airways' debt ratings under
review for possible upgrade in May of this year following the announced
plan for United to acquire US Airways. Since that time, US Airways has
faced a combination of significantly higher fuel costs, intensified
competition in its primary markets and continued weak earnings
performance. While the merger plan has been approved by the boards of
both United and US Airways, it remains subject to regulatory approval
from both US and European regulators, and it is uncertain whether the
deal will be completed in a timely fashion under its present terms or
whether concessions or other changes will be needed. As the economic
environment softens, we expect further pressure on US Airway's cash flow
and debt protection measures.

US Airways' performance is generally strongest in the summer travel
season and weakest in the first calendar quarter of the year.
Unexpectedly poor operating performance in either the fourth quarter of
2000 or the first quarter of 2001 combined with the company's
expenditures for refleeting would continue the deterioration of debt
protective measures and could lead to a ratings downgrade. The company
has restructured and reduced its aircraft orders in the medium term but
near term deliveries remain significant. Moody's noted that US Airways
has prefunded a portion of its 2001 aircraft deliveries and remains
liquid with a reported $1.2 billion in cash and short term investments
and an unused bank line of $500 million as of September 30, 2000.

Debt affected by the ratings review includes:

     Senior Implied Rating                         B2
     Senior Unsecured Rating                       B3
     Issuer Rating                                 Caa1
     Senior Secured Bank Lines                     B1
     All Pass Thru Trust Ratings                   Ba3 to A2
        (except those guaranteed as noted below)
     Industrial Revenue Bonds                      B3
        (except those guaranteed as noted below)

Not affected by the review are certain guaranteed industrial revenue
bonds ('IRB's') and certain of the company's Enhanced Equipment Trust
Certificates, Series 2000-1, Series 2000-2 and Series 2000-3. The IRB's
and Certificates issued under these transactions are guaranteed by
monoline insurance companies and remain Aaa and are not on review.

Moody's review will continue to focus on the potential benefits of the
acquisition by UAL, should the merger be approved but will add a
consideration of the potential for a deterioration in debt protective
measures sufficient to warrant a negative ratings action

US Airways Group, Inc., with 1999 revenues of $8.6 billion, is a major
US carrier headquartered in Arlington, Virginia.


                           *********

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