TCR_Public/010105.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, January 5, 2001, Vol. 5, No. 4


ACCESSAIR: Judge Hill Questions Ruan's Commitment
ADATOM.COM: Mantle of Responsibility Passes to Gordon Lee
AMERICAN AIRCARRIERS: Asks for Extension of Lease Decision Period
APPLE ORTHODONTIX: Expects to File a Plan by January 20
BAYOU STEEL: Slashes Production and Cuts Jobs in Effort to Survive

BOO.COM: Judge Rules That Failed Dot-Com Can Resell Its Lease
BRADLEES: Backs Down, Agreeing to Honor Gift Certificates & Exchanges
CRAY RESEARCH: Moody's Lowers 6-1/8% Convertible Rating to Caa2
DOG N SUDS: Franchisee Closes 5 Restaurants & Files Chapter 7 Petition
FEDERAL-MOGUL: Secures $550 Million of Additional Bank Financing

FOODLINE.COM: Files For Bankruptcy
FRONTIER INSURANCE: Moody's Junks Trust Securities Rating
GENEVA STEEL: Plan Consummated & Declared Effective Jan. 3
HARNISCHFEGER: Joy's Resolves Ohio EPA Remediation Claim
LAROCHE INDUSTRIES: Enters into Asset Purchase Deal with Gramercy

LTV CORPORATION: Ceases Minnesota Iron Mine Production
METAL MANAGEMENT: Committee Taps Milbank Tweed as Lead Counsel
MONTGOMERY WARD: All Stores Start Going-Out-Of-Business Sales
OUTBOARD MARINE: Court Approves $10 Million of Interim DIP Financing
PACIFIC GAS: Utility Commission Proposes Short-Term Rate Hike

PROLIANCE INSURANCE: Regulators Urge Court-Supervised Rehabilitation
PSA, INC.: Opposes Appointment of a Chapter 11 Trustee
READ-RITE: Moody's Raises Ratings on Subordinated Notes to Caa3
SOLAR FINANCIAL: Sloppiness & Stupidity is Not Negligence
STAN LEE: SEC Launches Securities Trading Investigation

TULTEX CORPORATION: Jan. 31 Administrative Claims Bar Date Fixed
TUMBLEWEED COMMUNICATIONS: Restructuring Includes 74 Job Cuts

* BOOK REVIEW: WHY COMPANIES FAIL: Strategies for Detecting,
               Avoiding and Profiting from Bankruptcy


ACCESSAIR: Judge Hill Questions Ruan's Commitment
A bankruptcy court judge on Thursday questioned whether Des Moines-based
Ruan Companies are reconsidering their commitment to AccessAir airline,
which is back in the air after shutting down for nearly a year,
according to the Des Moines Register.  Ruan representatives said the
family-owned companies and John Ruan III, president of Ruan Financial
Corp., are committed to a reorganization plan designed to keep the
airline in business.

The Des Moines-based airline resumed regular passenger service last
month after filing for bankruptcy court protection from creditors in
November 1999. The Ruan family and businesses tried to save AccessAir
after the two-plane airline suspended flights.

Judge Russell Hill questioned Ruan's commitment during a court hearing,
which was scheduled for arguments on whether to confirm AccessAir's
bankruptcy reorganization plan.  Michael Pankow, Esq., an AccessAir
lawyer, asked for a postponement of up to 45 days.  He said the
postponement was needed to resolve remaining disputes with creditors, to
work out details on some agreements related to the plan and to review
final financial details.

Judge Hill questioned the need for the delay, noting that the case is 13
months old and no creditors object to the proposal.  He asked Pankow
whether the Ruan organization is "backing out" of the plan.  "No,
they're not," Pankow said.  Pankow said that the Ruan family and
businesses have invested $6 million into the airline since AccessAir
filed for bankruptcy court protection, and continues to put more money
into the operation. Hill agreed to give the airline until Jan. 31 to
make final changes in the plan.  The confirmation hearing was
rescheduled for Feb. 20.  (ABI 03-Jan-2001)

ADATOM.COM: Mantle of Responsibility Passes to Gordon Lee
---------------------------------------------------------, Inc. (OTC:ADTM) entered into a Definitive Agreement
transferring the operational and governance responsibilities for the
company to Mr. Gordon Lee.  Adatom's current Officers and Directors have
determined the company is insolvent and have not been successful in
their attempts to procure additional working capital to sustain daily
operations. The agreement requires Mr. Lee to put forth an operating
plan to reduce Adatom's debt and enhance shareholder value, preserving
the company's value for the benefit of the creditor and shareholders.

Mr. Lee has extensive experience in the legal rights and
responsibilities of partnerships and corporations, knowledge of the
global securities and investment industry and is a sought after
specialist and consultant in national and international trade. Mr. Lee
has been a partner, officer and director of such companies as USA Video
Corporation, Laser Vision, Inc., Corp., Future Media
Technologies and Rose & Ruby Film Productions.

Mr. Lee is currently Chairman and CEO of Bentley Communications Corp.
(OTC Bulletin Board: BTLY) and American IDC Corp. (OTC: ACNI), publicly
traded companies on the NASD OTCBB exchange.

Mr. Lee stated, "Aside from the opportunity to 'clear the slate' and
rebuild shareholder value for Adatom, I believe we can bring financial
fruition to the various 'transaction fee based' informational type
technologies we plan to deploy throughout Asia based on Adatom's
foundation and my own experiences in the 'New West.'"

AMERICAN AIRCARRIERS: Asks for Extension of Lease Decision Period
American Aircarriers Support, Inc., AAS Aircraft Services, Inc., AAS
Landing Gear Services, Inc., AAS Complete Controls, Inc., and AAS Amjet,
Inc., ask Judge Walsh for an extension of time within which to decide
whether they should assume, assume and assign, or reject their non-
residential real property leases. Specifically, the Debtors ask that
their time to make those decisions be extended through February 27,

In order to supply aircraft component parts and provide maintenance,
repair and overhaul services to their customers throughout the United
States and worldwide, Albert F. Durham, Esq., of Rayburn Cooper &
Durham, P.A., explains, the Debtors lease numerous warehouses, machine
shops, offices and other facilities located in Florida, Arizona and
California. The Debtors tell Judge Walsh that they have had
"insufficient time . . . to appraise the value of the Leases in the
context of developing [their] strategic plan going forward. . . .
Without an extension . . . the Debtors risk prematurely and
improvidently assuming Leases that they could later discover to be
burdensome or rejecting Leases that could prove to be critical to their
reorganization efforts."

APPLE ORTHODONTIX: Expects to File a Plan by January 20
"The Debtor is in the process of finalizing a consensual plan and
disclosure statement that it expects to file [by January 20, 2001],"
Apple Orthodontix, Inc., tells the U.S. Bankruptcy Court in Houston.
Apple says it has worked diligently with its Lenders (Chase Bank of
Texas, N.A. and BNP Paribas) and its Creditors Committee to finalize a
Settlement Agreement with respect to the disputes among those parties
over the Lenders' liens and claims. That Settlement Agreement has been
finalized and the Court will be asked to bless it, John P. Melko, Esq.,
at Verner Lipfert Bernhard McPherson & Hand, Chartered, and Jeff J.
Marwel, Esq., of Katten Muchin Zavis relates, adding that the Settlement
Agreement is a cornerstone of the consensual plan.

Against that backdrop, Apple asks for a fifth extension of its exclusive
period during which to file a plan of reorganization through January 23,
2001, and a concomitant extension of its exclusive period during which
to solicit acceptances of that plan through the conclusion of a
confirmation hearing.

The lawyers give no hint about whether the Official Committee of
Practitioners supports the Settlement Agreement or the Plan, or whether
their support is even necessary for confirmation.

BAYOU STEEL: Slashes Production and Cuts Jobs in Effort to Survive
S&P Ratings Service associate director Paul Vastola said a 7-year low in
domestic steel prices pushed financially troubled Bayou Steel Co. to
lay-off 35% of its workforce and cut capacity down to 60%, The Daily
Deal relates.  Bayou Steel had 520 employees as of September 30 at 2
locations, in LaPlace, La., and Harriman, Tenn.

"It's a tenuous situation for Bayou Steel after they had to cut capacity
and lay off staff because they can only return to full production if
steel prices come back up.  What Bayou Steel needs more than anything
right now is for pricing to return, and that's really beyond the
company's control," Vastola said.

The company's efforts highlight the struggle to survive in the
beleaguered steel industry which has seen at least 9 U.S. steelmakers
file for protection under Chapter 11 of the U.S. Bankruptcy Code in the
past 2 years.  Moody's Investors Service senior mining and metals
analyst Steven Oman said Bayou Steel expects losses to continue into the
first quarter of this year, the Deal said.  

Oman said the company amended its $50 million credit facility in October
with a group of lenders, which included Chase Manhattan Bank.  The
amendment requires Bayou Steel to increase its Ebitda/interest ratio to
1.3:1.0 for the quarter ending March 31 and 1.5:1.0 for the quarter
ending June 30.  The ratio in December 31 prior to the amendment was
1.0:1.0, Oman said.

Despite the amendment, S&P's Ratings Service has not changed its
November 21 negative outlook on Bayou Steel.  Moody's Investors Service
had on September 28 last year downgraded its ratings for Bayou Steel's
9.5% guaranteed first mortgage notes worth $120 million.  The notes are
due in 2008.

According to Oman, the company's EBITDA for the fiscal year ending
September 30 was $13.2 million, with an annual interest expense of $11.4
million.  Debt was at about $120 million, and assets at $243 million.  
Bayou Steel reported a net loss of $45.6 million on sales of $202.5
million for the quarter ending September 30, versus a profit of $6.1
million on sales of $206.3 million for the same period the year before.

BOO.COM: Judge Rules That Failed Dot-Com Can Resell Its Lease
A decision by a federal bankruptcy judge in Manhattan could be a blow to
Silicon Alley landlords who try to profit from reselling the leases of
bankrupt Internet companies, according to the New York Times. Judge
Richard L. Bohanon ruled on Dec. 15 that North America, a unit
of the British online fashion retailer, could keep the proceeds of the
resale of its lease for a 9,054-square-foot space.

The decision invalidated a provision in the lease that the space would
revert to the landlord, Trinity Church, in the event of's
bankruptcy. Lawyers for argued that the company could resell the
lease for $50 per square foot annually, compared with the $27.50 per
square foot it was paying Trinity, and that the profits would help pay
off's creditors. Trinity Church appealed the ruling last week.
Judge Bohanon noted that federal bankruptcy courts have ruled that
companies under bankruptcy protection could be held liable for paying
the remainder of their leases. Those rulings came in the early 1990's,
when many Lower Manhattan landlords fought tenants' efforts to break
leases out of fear of not being able to find a new tenant willing to pay
the same rate. But today the situation is different. Real estate prices
in Silicon Alley, loosely defined as the area between Wall Street and
the Flatiron district, have soared as dot-com companies, drawn to the
area's high-speed Internet connections, have snapped up spaces. Real
estate agents say some Silicon Alley landlords have tried to break
leases to take advantage of the increases in prices.

Judge Bohanon's decision could influence judges overseeing similar cases
involving Silicon Alley companies, several of which filed for bankruptcy
protection over the summer. The judge wrote that while Trinity is owed
money by, it does not deserve all the proceeds from the sale of
any asset. "Such an outcome would clearly be contrary to bankruptcy
policies, which try to balance the interests of all involved," Judge
Bohanon said. North America is a unit of Group Limited, a London-based
fashion retailer that went out of business in October. The American unit
owes millions to its own creditors, which include MCI WorldCom, the
online magazine Salon and another Silicon Alley company, the Globix
Corp.  (ABI 03-Jan-2001)

BRADLEES: Backs Down, Agreeing to Honor Gift Certificates & Exchanges
Bradlees Inc., the Massachusetts-based retailer, which announced last
week that it is going out of business, has agreed to honor gift
certificates at their full face value until Jan. 15, according to a
newswire report. Bradlees also agreed to accept merchandise exchanges
for the six to eight weeks its stores are expected to remain open while
liquidation sales are completed.

Bradlees sold about $2 million worth of gift certificates by Dec. 20 but
when going-out-of business sales began Dec. 27, employees refused to
make good on gift certificates and exchanges, even though a federal
bankruptcy court judge allowed the chain to honor those commitments. In
the face of threats of legal action from Connecticut Attorney General
Richard Blumenthal and Massachusetts Treasurer Shannon P. O'Brien,
Bradlees changed its policy. Blumenthal said he welcomed the company's
decision, but warned that his office will continue to watch the retailer
closely as it winds down its operations. "This welcome reprieve - only
under pressure from my office - will help holders of Bradlees' gift
certificates and goods to exercise their rights in the immediate
future," Blumenthal said.

Andrew Parker, a spokesman for O'Brien, said honoring gift certificates
through Jan. 15 is not enough, and that consumers deserve to be
reimbursed past that date. "Any gift certificate not redeemed is still
considered consumer credit," said Parker. O'Brien's office planned to
file a petition in the bankruptcy court that would allow the state to
reimburse consumers, Parker said. Those petitions will not be accepted
until February.  (ABI 03-Jan-2001)

CRAY RESEARCH: Moody's Lowers 6-1/8% Convertible Rating to Caa2
Moody's Investors Service lowered its rating from B2 to Caa2 on $47
million worth of outstanding 6-1/8% convertible subordinated debentures,
which are due 2011 and may be converted at any time into shares of SGI
common stock at an adjusted price of $39.17 per share, of SGI subsidiary
Cray Research Inc.  Mountain View, California-based SGI, formerly
Silicon Graphics, Inc., sold Cray to Tera Computer Company in March of
last year.

Moody's also lowered the rating on SGI's outstanding $231 million 5-1/4%
convertible notes due 2004, which may be converted at any time into
shares of common stock at an adjusted price of $18.70 per share, and
lowered its senior implied rating from Ba3 to B2.  It lowered SGI's
senior unsecured issuer rating from B1 to B2.  SGI's ratings outlook
remained negative as of January 2.

Moody's based the ratings downgrade on:

    (a) the continued decline of SGI's revenue and its operating loss in
        the first quarter of fiscal year 2001, ended September 30;

    (b) mounting leverage based on a total debt of $350 million, and an
        additional $336 million, equivalent to 58.7% of total
        capitalization, representing capitalized operating leases; and

    (c) negative EBITDA in fiscal year 2000 extending through the first
        quarter of fiscal year 2001

Fiscal year 2001 is SGI's third loss-making year in a row.  Moody's has
raised concerns that expenditure reductions may prevent the company from
keeping up with technological innovations exhibited in products by
competitors Sun Microsystems, Hewlett-Packard, IBM, Compaq and Dell.  

Moody's also noted a decrease in SGI's liquidity, as evidenced by the
decrease in working capital from $870 million on as of June 30, 1999 to
$54 million as of September 30, 2000, from:

    (a) operating losses;

    (b) the implementation of corporate restructurings and divestitures;

    (c) adjustments to the company portfolio of property, plant and

DOG N SUDS: Franchisee Closes 5 Restaurants & Files Chapter 7 Petition
Dog N Suds Restaurants of Evansville, Ill., filed for chapter 7
bankruptcy Friday in the U.S. District Court in Evansville, saying it
has closed its five area restaurants, according to the Courier & Press.
The five franchises are part of a midwestern chain that includes
restaurants in Indiana, Illinois, Kentucky, Arkansas, Missouri,
Michigan, Ohio and Wisconsin. Other franchises owned by other companies
are unaffected by the filing. The company listed assets of $25,450 and
liabilities of $1.1 million. Dog N Suds of Evansville began operating in
1998 and ceased operations in November.

The chief owners of the company, Kenneth Schroering, Timothy S. Flick
and Michael C. Owen each own 32 percent of the company. Another company
owned by the three men, DNS Properties, which leases real estate and
equipment to Dog N Suds, has also filed for chapter 7. Another company
owned by the group, KTM Management Inc., which provided management
advice to Dog N Suds of Evansville, has ceased its operations.

The Dog N Suds filing follows the chapter 7 bankruptcy of owner Kenneth
Schroering and his wife. The couple listed $361,860 in assets and $8.7
million in liabilities.

FEDERAL-MOGUL: Secures $550 Million of Additional Bank Financing
Federal-Mogul Corporation (NYSE: FMO) entered into a Fourth Amended and
Restated Credit Agreement, which provides $350 million in additional
financing to its pre-existing $1.7 billion senior credit facilities.  
Federal-Mogul has also solidified its European financing with committed
lines targeted to approximately $200 million.

"We are very pleased to expand our credit lines by $550 million in a
very difficult market," said Robert S. (Steve) Miller, chairman and
chief executive officer.  "With the new agreement, we have significantly
increased our financial flexibility and eased the covenant restrictions
on our existing credit facilities.  The covenant relief should provide
great assurance for our customers, creditors and employees as it allows
Federal-Mogul to continue its preeminent role in providing customer

The amended and restated credit facility provides for a $200 million
supplemental revolving credit line and a $150 million term loan.  The
senior lenders, led by JP Morgan Chase as arranger, agreed to loosen the
financial covenant ratios beginning in the fourth quarter of 2000.  The
company retained the ability to reinvest $500 million of the first $700
million in net proceeds from asset sales.  Federal-Mogul agreed to grant
to the lenders providing new funds a first priority security interest in
its U.S. property, plant and equipment; inventories; intellectual
property and general intangibles; and unencumbered accounts receivable.  
Pre-existing lenders were given a second security interest in these

The pricing on the pre-existing $1.7 billion facility was increased by
50 basis points.  Pricing on the supplemental revolving credit line is
LIBOR plus 300 basis points, and the new term loan is priced at LIBOR
plus 375 basis points.  The amended and restated credit facility expires
in February, 2004.

"We have been able to provide ourselves with financial flexibility for
the intermediate term," said Miller.  "We have bought ourselves some
time.  We can now focus on implementing our six global initiatives for
operational improvement while working toward a more successful
litigation environment or a legislative solution for our continuing
asbestos situation."

Headquartered in Southfield, Michigan, Federal-Mogul is an automotive
parts manufacturer providing innovative solutions and systems to global
customers in the automotive, light trucks, heavy duty, farm and
industrial markets.  The company was founded in 1899.  For more
information on Federal-Mogul, visit the company's web site at

FOODLINE.COM: Files For Bankruptcy
---------------------------------- filed for bankruptcy protection on December 29, and the
online restaurant-reservation company is laying off all employees and is
ceasing its operations, CEO Paul Lightfoot tells The Industry Standard

New York City-based, which once employed about 150 workers,
amassed over $13 million in funding from investors, which included
American Express, Zagat Survey, Ticketmaster Online-CitySearch, and
Kestrel Venture Management.  The company is selling-off its assets.

Mr. Lightfoot, a corporate attorney by training, said, "The main asset
of is its suite of software solutions, which enable
restaurants to use simple data-mining techniques to treat guests more
personally, based on frequency and spending habits."  He added the
company may sell its software to more than one buyer, the Standard said.

Mr. Lightfoot and chef Robert Thomas founded in 1998.

FRONTIER INSURANCE: Moody's Junks Trust Securities Rating
Moody's Investors Service has downgraded its rating on the Frontier
Insurance Group Inc.'s special-purpose capital funding vehicle Frontier
Financing Trust from "caa" to "c", following a downgrade in March 2000
after Frontier announced the company would defer payment on its trust
preferred securities.  

Moody's said it believes improvements to Frontier's operating
performance will be difficult to achieve.  Rock Hill, New York-based
Frontier has shown poor performance in the past several years in the
following areas:

     (a) its medical malpractice business;
     (b) its limited future business prospects; and
     (c) its severely strained financial flexibility

Frontier Insurance Group Inc, through its subsidiaries, is into
underwriting specialty lines of insurance which include professional
liability and specialty programs.  Frontier Insurance Group reported
earning net premiums of $398 million, a net loss of $147 million, and
negative shareholders' equity of $12 million for the 9 months ending
September 30, 2000.

GENEVA STEEL: Plan Consummated & Declared Effective Jan. 3
Geneva Steel Holdings Corp. (NASDAQ: GNVH), a newly formed Delaware
corporation, announced today that the Plan of Reorganization for Geneva
Steel Company, which was confirmed by the United States Bankruptcy Court
for the District of Utah, has been consummated. With consummation of the
Plan, the successor to Geneva Steel Company has emerged from Chapter 11
bankruptcy. The objectives of the Plan include to (i) significantly
strengthen Geneva's balance sheet; (ii) fund required capital
expenditures and working capital needs; and (iii) fulfill all other
obligations associated with emergence from Chapter 11. The Plan was
proposed jointly by Geneva and the Official Committee of Bondholders in
the Chapter 11 case. It was also supported by the Official Committee of
Unsecured Creditors.

In connection with consummation of the Plan, Geneva Steel Company
effected a corporate restructuring. Pursuant to the Plan, Geneva Steel
Holdings Corp., a NASDAQ-listed, publicly-traded company was formed.
Through a series of mergers with newly formed entities, Geneva Steel
Company was transformed from a Utah corporation into a Delaware limited
liability company wholly-owned by Geneva Steel Holdings Corp. In
addition, Geneva Steel Holdings Corp. owns certain subsidiaries
previously owned by Geneva Steel Company and two newly formed Delaware
limited liability companies that hold, respectively, certain undeveloped
real property and the iron ore mines previously owned by Geneva Steel
Company. Geneva Steel Holdings Corp. and Geneva Steel LLC have
interlocking boards of ten members, seven of whom have not previously
served on Geneva Steel Company's board.

Consummation of the Plan involved two new debt financings at Geneva
Steel LLC in the form of a $110 million term loan that is eighty-five-
percent guaranteed by the United States government, and a $125 million
revolving line of credit. The Plan also contemplates an offering of $25
million in convertible preferred stock of Geneva Steel Holdings Corp. to
prebankruptcy unsecured creditors.  As part of consummation of the Plan,
Geneva released a standby purchaser for $10 million of the offering.  
The standby purchaser for the remaining $15 million has previously
informed Geneva that it believes it is released from its standby
commitment. Consequently, there can be no assurance that any proceeds
will be raised through the convertible preferred stock offering.

Geneva Steel Company, with Citicorp USA, filed an application on January
31, 2000, for a U.S. government loan guarantee under the Emergency Steel
Loan Guarantee Program. The application sought an eighty-five-percent
guarantee for the $110 million term loan incorporated into the Plan. The
Emergency Steel Loan Guarantee Board extended an offer of guarantee to
Citicorp USA on June 30, 2000, which the board confirmed just prior to
consummation of the Plan.

The Plan significantly reduces Geneva's debt burden and provides
additional liquidity. The Plan gives prebankruptcy unsecured creditors,
in lieu of cash payments, substantially all of the common stock of
Geneva Steel Holdings Corp. and the right to purchase convertible
preferred stock of Geneva Steel Holdings Corp. The elimination of
substantially all of Geneva's prepetition debt will significantly
deleverage Geneva. The prebankruptcy holders of Geneva's common and
preferred stock did not receive a distribution under the Plan.

"We believe that the Plan can achieve our stated objectives and position
Geneva as a strong competitor. Although the Chapter 11 process has been
difficult, it has allowed the Company to address many of the financial
issues that made us vulnerable to market disruptions," said Joseph A.
Cannon, chairman and chief executive officer of the Company.

There can be no assurance that the Plan will be successful or that it
will achieve the objectives described above. This press release may be
deemed to contain certain forward-looking statements with respect to
Geneva that are subject to risks and uncertainties that include, but are
not limited to, those identified in the Geneva's press releases, the
Disclosure Statement submitted with respect to the Plan, or Geneva's
Securities and Exchange Commission filings. Actual results may vary

Geneva Steel Holdings Corp., through Geneva Steel LLC, owns an
integrated steel mill operating in Vineyard, Utah. The mill manufactures
steel plate, hot-rolled coil, pipe and slabs for sale primarily in the
western and central United States.

HARNISCHFEGER: Joy's Resolves Ohio EPA Remediation Claim
Joy Technologies Inc. is to perform a remedial investigation/feasibility
study (RI/FS) of a manufacturing facility located at 338 South Broadway
in New Philadelphia, Ohio and to reimburse the Ohio EPA up to $15,000
per year for the Ohio EPA's oversight and response costs, pursuant to
The Ohio EPA Director's Final Findings and Orders, issued May 21, 1990.
The Debtor advises that Court that, as of the Petition Date, Joy had
completed the RI/FS, and was engaged in negotiations with the Ohio EPA
regarding a remediation order for the Facility, which continued through
October 2000.

Oversight and Response Costs had accrued in the amount of $50,000 pre-
petition and $17,925 post-petition. The Ohio EPA has filed Claim No.
5691 in the amount of $1,580,000 against Joy.

Joy and Ohio EPA seek the Court's approval of their agreement and
stipulation which provides that Claim 5691 be allowed in the amount of
$50,000 and shall be treated as a pre-petition, non-priority, general
unsecured claim. Payment on Claim 5691 will be made pursuant to the
final order of the Court regarding the payment of general unsecured

The Stipulation further provides that Joy's liability to remediate the
Facility and to reimburse the Ohio EPA's Post-Petition Oversight and
Response Costs is not discharged, reduced, or diminished by the
bankruptcy proceeding or any plan confirmed in Joy's case, but Joy will
make such remediation and reimbursement upon entry into any agreement
between the Ohio EPA and Joy on the Ohio EPA Director's Consent
Remediation Order, subject to Joy's right to object to such costs.
(Harnischfeger Bankruptcy News, Issue No. 35, Bankruptcy Creditors'
Service, Inc., 609/392-0900)

LAROCHE INDUSTRIES: Enters into Asset Purchase Deal with Gramercy
LaRoche Industries entered into an Asset Purchase Agreement with
Gramercy Chlor-Alkali Corporation, to purchase its Chlor-Alkali
business, located in Gramercy, LA.  Additionally, on December 29, 2000,
LaRoche filed its Amended Notice of Sale and Hearing with the U.S.
Bankruptcy Court indicating that a public sale of the Assets, pursuant
to Sale Procedures, will be held on January 12, 2001 and that a
hearing on the Motion to approve the Agreement and sale will be
held on January 16, 2001 in the Bankruptcy Court in Delaware
before the Honorable Peter J. Walsh.

LaRoche Industries is a global manufacturer of chlor-alkali chemical
products and provider of Industrial Ammonia products and services,
with operations in the United States, Germany and France.

Neil Batson, Esq., at Alston & Bird in Atlanta represents LaRoche in its
chapter 11 cases, assisted by Joel A. Waite, Esq., at Young Conaway
Stargatt & Taylor LLP in Wilmington.  Chaim Fortgang, Esq., at Wachtell,
Lipton, Rosen & Katz represents the Creditors' Committee and lawyers at
Davis, Polk & Wardwell represent LaRoche's Lenders.  

The proceeds of the Chlor-Alkali business sale will be distributed
directly to the Laroche's DIP and Pre-Petition Lenders.  

LTV CORPORATION: Ceases Minnesota Iron Mine Production
LTV Steel says it will immediately cease production at the LTV Steel
Mining Company in Hoyt Lakes Minnesota.  LTV Steel previously announced
plans to close the facility on February 22, 2001.  However, continued
difficult conditions in the steel market and accelerated cost reduction
efforts related to LTV's recent Chapter 11 bankruptcy filing made it
necessary to cease production earlier than planned.  Approximately 1,000
people are currently employed at the facility.  LTV said that it would
begin immediately to winterize the facility.

The LTV Corporation (NYSE: LTV) is a manufacturing company with
interests in steel and metal fabrication. LTV's Integrated Steel
segment is a leading producer of high-quality, value-added flat rolled
steel, and a major supplier to the transportation, appliance, electrical
equipment and service center industries. LTV's Metal Fabrication segment
consists of LTV-Copperweld, the largest producer of tubular and
bimetallic products in North America and VP Buildings, a leading
producer of pre-engineered metal buildings for low-rise commercial

METAL MANAGEMENT: Committee Taps Milbank Tweed as Lead Counsel
The Official Committee of Unsecured Creditors of Metal Management, Inc.,
and its debtor-subsidiaries met on December 1, 2000, and voted to retain
the law firm of Milbank, Tweed, Hadley & McCloy LLP as its counsel in
the Debtors' chapter 11 cases. Prior to MMI's Petition Date, Milbank
represented certain holders of the Debtors' 10% Senior Subordinated
Notes and the 12-3/4% Senior Secured Notes. Those Noteholders formed a
prepetition noteholders committee and entered into a Lockup Agreement
with the Debtors under which they agreed to support a proposed plan of
reorganization consistent with the terms of the Lockup Agreement. The
members of the ad hoc committee included Alliance Capital Management
Corporation, Grandview Capital Management LLC, Goldman Sachs & Co., MFS
Investment Management, Trust Company of the West (TCW) and SunAmerica
Investments, Inc.

Robert J. Moore, Esq., leads the team of lawyers representing the
Committee from Milbank's Los Angeles office, assisted by Fred Neufeld,
Esq., Matthew McDonald, Esq., and Scott Gautier, Esq. Milbank will bill
for its services at its customary $145 to $540 hourly rates. Mr. Moore
discloses that, prior to the chapter 11 filing, Milbank received
$286,973 from the Debtors, in addition to a $50,000 retainer which
Milbank proposes to hold and apply against its allowed fees and expenses
in the chapter 11 cases.

Michael A. McNamara at ScudderKemper Investments chairs the Committee.
The other committee members are SunAmerica Asset Management, National
Metals Co., Republic Technologies, and Bank One, N.A.

Separately, the Committee voted to retain Morris, Nichols, Arsht &
Tunnel as its local counsel.

MONTGOMERY WARD: All Stores Start Going-Out-Of-Business Sales
Montgomery Ward, which filed for bankruptcy liquidation last week, will
commence a chain-wide "going-out-of-business sale" starting tomorrow,
with store-wide discounts in every department of up to 40%, at each of
the chain's 258 stores across 30 states. The sale is expected to
continue until all merchandise is sold. The amount of inventory to be
sold is estimated at more than $1.8 billion at retail.

The prices on the chain's entire stock at every Montgomery Ward store
have been reduced up to 40% off Montgomery Ward's everyday low prices,
including: men's, women's and children's apparel, electronics,
appliances, furniture, fine jewelry, health and beauty aids, and
automotive products. Every item is reduced for immediate liquidation,
and ten distribution centers are being emptied into the stores to create
the best selection possible for customers.

The "going-out-of-business sale" was authorized by the U.S. Bankruptcy
Court for the district of Delaware and announced today by the group of
liquidating companies that will jointly conduct the sale for Montgomery
Ward, which will be closing all stores as part of its final liquidation.

With the "going-out-of-business sale" set to begin tomorrow,
representatives from the group of liquidating companies are working
quickly to ready the stores, including re-stocking shelves, ensuring
proper pricing and creating new signage and advertisements.

Montgomery Ward announced on December 28 that it would conduct an
orderly wind down of its business, subject to Bankruptcy Court approval.

One of the largest privately owned retailers in the United States,
Montgomery Ward was founded 128 years ago by Aaron Montgomery Ward, as
the nation's first dry-goods mail-order business. The flourishing
business that the company developed through its mail-order business led
to the company's opening of its first store in 1926, in Plymouth,
Indiana. By 1930, the company operated 550 stores across the country. An
important part of America's business history, Montgomery Ward played an
integral role in America's communities and culture through much
of the twentieth century, with one of its copywriters creating the
universally-beloved character of "Rudolph the Red-Nosed Reindeer" in a
Christmas poem that was handed out to the children of shoppers in 1939.

OUTBOARD MARINE: Court Approves $10 Million of Interim DIP Financing
Outboard Marine Corp. received bankruptcy court approval to borrow up to
$10 million from its pre-petition lenders led by Bank of America N.A.
pending a final hearing on the full $35 million debtor-in-possession
(DIP) financing facility. The recreational boat and engine maker asserts
that it has an emergency need for financing to facilitate the orderly
wind-down of its operations and sale of its assets. Following an interim
hearing, the U.S. Bankruptcy Court in Chicago authorized the company to
borrow up to $10 million under the DIP facility pending a Jan. 22 final
hearing.  If no objections are filed by Jan. 15, the interim order will
automatically become a final order.  (ABI & Federal Filings, Inc. 03-

PACIFIC GAS: Utility Commission Proposes Short-Term Rate Hike
The California Public Utilities Commission on Wednesday proposed a
short-term rate hike for Pacific Gas and Electric Co. and Southern
California Edison, Reuters reports.  The proposal recommends a tiered
increase of 7 to 15% for residential, business and industrial customers.  
This is to last for 90 days while the CPUC waits for the results of an
independent audit of the electric utilities' books.

PG&E asked for an increase of 26% while Southern California asked for an
increase of 30%.  Both utilities, which claim they are on the brink of
bankruptcy, have asked regulators to lift the freeze imposed on retail

PG&E Corp CEO Robert Glynn said the proposed order could jeopardize the
utility's credit ratings and ability to raise cash, according to
Reuters.  Mr. Glynn told a CPUC hearing, "This decision sends us in the
direction of default."  PG&E Corp is the parent company of Pacific Gas
and Electric.

PROLIANCE INSURANCE: Regulators Urge Court-Supervised Rehabilitation
Standard & Poor's today assigned its 'R' financial strength rating to
Proliance Insurance Co.  The rating action follows the filing of a
complaint by Ohio Department of Insurance Director Lee Covington in the
Franklin County Court of Common Pleas requesting that Proliance, a
Columbus, Ohio, domiciled property/casualty company, be placed into
rehabilitation. The court granted the order on Dec. 28, 2000.

Proliance conducts business primarily in Ohio, writing an estimated $3
million in premiums per year. The company writes mainly preferred risk
homeowner's and automobile insurance. Proliance was placed into
rehabilitation after it was found to be insolvent, with a surplus
falling below the required statutory minimum.

An insurer rated 'R' is under regulatory supervision owing to its
financial condition. During the pendency of the regulatory supervision,
the regulators may have the power to favor one class of obligations over
others or pay some obligations and not others. The rating does not apply
to insurers subject only to nonfinancial actions such as market conduct
violations, Standard & Poor's said.

PSA, INC.: Opposes Appointment of a Chapter 11 Trustee
There is no fraud or defalcation, the Debtors officers are not
incompetent, and there is no credible evidence of mismanagement, the
legal team at Powell, Goldstein, Frazer & Murphy LLP representing PAS,
Inc., ETS Payphones, Inc., and their subsidiaries, tells Judge Walsh.
Accordingly, there is no basis to grant the Creditors' Committee's
Motion for appointment of a chapter 11 trustee in the Debtors' chapter
11 cases.

David Neier is already serving as an independent Examiner pursuant to 11
U.S.C. Sec. 1104(d), and his investigation of the Debtors' prepetition
and postpetition affairs is underway. There is no need and it is
imprudent, for reasons of cost among others, the Debtors suggest, to
have both a trustee and an examiner on the dole. The Debtors charge that
the Committee's Motion misinforms the Court, exaggerates alleged
conflicts of interest and erroneously characterizes the Committee's
responses to various information requests. The Debtors take exception
with the Committee's assertion that management is incapable of turning
the companies around.

What the Committee fails to recognize, E. Penn Nicholson, Esq., tells
Judge Walsh is that the payphone industry is similar to the nursing home
industry, as the payphone industry as a whole is in financial distress.
Competition from wireless communication devices and reduction in the
federally established rates for dial-around compensation have eroded
revenues of the top-three payphone service providers. The Debtors'
management isn't at fault, Mr. Nicholson suggests. Rather, they're
victims of a plagued industry. A chapter 11 trustee won't solve the
industry problems unless he can locate alternative sources of revenue.

"The appointment of a trustee will not add any value to the estates, but
will result in an intolerable delay and substantial increase in
administrative expenses, to the real and substantial detriment of the
creditors of these estate," the Debtors argue. "In fact," the Debtors
continue, "the appointment of a trustee will in all probability cause
the rapid demise of [the] Debtors' reorganization efforts, thereby
resulting in little or no recovery for the creditors in these cases."

READ-RITE: Moody's Raises Ratings on Subordinated Notes to Caa3
Moody's Investors Service raised the ratings of Read-Rite Corporation's
outstanding $19.8 million 6-1/2% convertible subordinated notes, which
are currently subject to redemption at a price of 103.714, due 2004 from
C to Caa3.  The notes may be converted at any time into shares of common
stock at $40.24 per share.

Moody's also withdrew the Caa2 rating on Read-Rite's guaranteed senior
secured bank credit facility due 2001.  

The withdrawal was based on:

    (a) the repayment in October and December of the remaining $28.8
        million outstanding under a term loan as of fiscal year end on
        September 30, 2000; and

    (b) the repayment of all outstanding borrowings under the revolving
        loan facility, which has been terminated, during fiscal year

Moody's raised Read-Rite's senior implied rating from Caa2 to Caa1.  It
also raised the company's senior unsecured issuer rating from Caa3 to

Ratings outlook for Read-Rite, which has headquarters in Fremont,
California, has been revised from negative to stable.  Read-Rite is a
leading worldwide independent supplier and manufacturer of magnetic
recording heads for computer disk drives.  

SOLAR FINANCIAL: Sloppiness & Stupidity is Not Negligence
A trustee who had brought a malpractice action against the Chapter 7
debtor's accountants did not act outside the scope of his authority, and
was not personally liable, for abandoning records that may have been
relevant to the malpractice claims without notice to the accountants.
The accountants never made an appearance in the bankruptcy case and
never requested service of pleadings. While the trustee's actions may
have been sloppy, stupid and negligent, they did not rise to the level
of gross negligence and were not sufficient to permit an award against
him. In re Solar Financial Services, Inc., 2000 WL 1769060 (Bankr. S.D.
Fla.). (West Group's CoreContent Bankruptcy Law newsletter 02-Jan-2001).

STAN LEE: SEC Launches Securities Trading Investigation
Stan Lee Media Inc. (Nasdaq:SLEE) received notice of an informal
inquiry by the Securities and Exchange Commission.  The inquiry seeks to
gather information regarding securities trading in the company's stock
by certain individuals and entities. In addition, during its internal
investigation, the company has discovered evidence of possible misuse of
company funds by some former members of the company's management team.

"The company plans to cooperate fully with the investigation and to turn
over to the SEC any information in its possession which may be helpful
to the investigators," stated Kenneth Williams, president and chief
executive officer, and Stan Lee, chief creative officer of the company.

"Management is continuing its discussions regarding strategic
alternatives for the company, and presently we do not believe that these
developments will adversely affect the company's near term strategic

Stan Lee Media also announced that it had terminated its consulting
agreement with Paraversal Inc., the consulting company through which
Stan Lee Media retained the services of Peter F. Paul, and the
employment agreement with Stephen Gordon, the former executive vice
president/Operations of Stan Lee Media.

TULTEX CORPORATION: Jan. 31 Administrative Claims Bar Date Fixed
Creditors holding Administrative Expense Claims against Tultex
Corporation, et al., whose chapter 11 cases pend before the U.S.
Bankruptcy Court in Lynchburg, Virginia, must file requests for payment
of those Administrative Expense Claims by January 31, 2001, or be
forever barred from asserting such claims. Claims should be delivered to
Tultex Corporation c/o Bruce H. Matson, Esq., at LeClair Ryan, P.C., in

TUMBLEWEED COMMUNICATIONS: Restructuring Includes 74 Job Cuts
Tumbleweed(R) Communications Corp. (Nasdaq:TMWD), a leading provider of
secure Internet messaging services, today announced preliminary
financial results for the quarter and year ending December 31, 2000. As
a result of what the company believes to be slower IT spending industry-
wide as well as delayed purchasing decisions, the company expects fourth
quarter revenue to be between $7.5 and $8.0 million, an increase of
between 65 - 76% over fourth quarter 1999 revenues of $4.54 million, but
lower than the company's previous expectation for the quarter. At the
end of the calendar year 2000, Tumbleweed's cash balance was
approximately $70 million.

For the quarter ending December 31, 2000, the company expects to report
a net loss, excluding expenses related to stock compensation expense,
amortization of goodwill and other intangibles and acquisition-related
charges, of between $17.0 and $18.1 million, as compared to $7.6 million
in the fourth quarter of 1999. For calendar year 2000, the company
expects to report total revenue in the range of $36.6 to $37.1 million,
compared to total revenue in 1999 of $15.3 million from continuing
product lines. Also for calendar year 2000, the company expects to
report a net loss, excluding expenses related to stock compensation
expense, amortization of goodwill and other intangibles and acquisition-
related charges, of between $39.9 and $41.0 million, as compared to
$20.6 million in calendar 1999. Actual results are expected to be
announced on January 25, 2001.

"Although we had a good start to the fourth quarter and continue to see
demand for our products, market conditions changed considerably in
December. We are proactively making changes in our organization to
operate more effectively in the new climate. We evaluated our product
and sales performance, and continue to see solid growth opportunities
for 2001. We've revised our growth targets accordingly, and now expect
revenue growth in 2001 to be in the range of 50-60% over 2000 revenue
based on our current pricing model, rather than our previous expectation
of 100% growth," said Jeffrey C. Smith, president and CEO, Tumbleweed
Communications Corp.

"We've concluded that the best path for Tumbleweed and its shareholders
is an emphasis on the markets and products where we've already achieved
the highest degree of success. We believe that our products, which
create significant cost-efficiencies, will appeal strongly to our
customers and prospects who are focusing more and more on the bottom
line in this new economic environment. By re-aligning our sales,
marketing, and engineering efforts to maximize these opportunities, our
objective is to achieve positive cash flow sooner than we had originally
planned," Smith continued.


In light of changing market conditions, Tumbleweed has thoroughly
reviewed its worldwide business unit and product performance. The
company is re-aligning resources to focus on the strongest opportunities
in 2001 and cutting operating expenses. As a result, Tumbleweed expects
to reduce total headcount by approximately 20% [74 employees] and to
recognize a one-time charge related to restructuring in the first
quarter 2001. The company will offer more detail on this charge in its
regularly scheduled quarterly conference call on January 25.

               Change to Subscription-based Pricing Model

The company also announced it intends to change to a subscription-based
pricing model in 2001. Under the subscription model, revenue from new
customer contracts will be recognized ratably over the life of the
contract, generally between 12-24 months. "Tumbleweed's customers have
expressed interest in subscription-based pricing," said Smith. "We're
also interested in this new model because it simplifies the contract
process, increases revenue visibility and improves our cash flow."

                    About Tumbleweed Communications

Tumbleweed Communications Corp. (Nasdaq:TMWD) is a leading provider of
secure Internet messaging services. Our products and services enable
businesses to create and manage secure online communication channels
that leverage established e-mail networks and enterprise applications.
Tumbleweed Integrated Messaging Exchange is a platform and set of
applications for creating secure communications channels between a
business and its customers, partners, and suppliers. Tumbleweed
Messaging Management System is a comprehensive solution that extends
internal email systems to the Internet through centralized security,
policy enforcement, filtering and archiving. Used together, Tumbleweed
IME and Tumbleweed MMS automatically apply security policies and
redirect sensitive email for secure, trackable delivery. Companies that
rely on Tumbleweed IME or MMS products include American Express, Chase
Manhattan Bank, Datek Online, the European Union's Joint Research
Council, the Food and Drug Administration, Northern Trust, UPS, Pitney
Bowes, TD Waterhouse, and the United States Postal Service.

* BOOK REVIEW: WHY COMPANIES FAIL: Strategies for Detecting,
               Avoiding and Profiting from Bankruptcy
Author: Harlan D. Platt
Publisher: Beard Books
Softcover: 142 Pages
List Price: $34.95
Order a copy today from at:

Review by Regina Engel

Originally published in 1985, Why Companies Fail remains a useful,
simple guide for the average business person to identify and avoid the
traps that lead to bankruptcy. Noting that libraries are full of books
containing prescriptions for financial success, the author chooses to
focus on failure so that it can be avoided and the number of
bankruptcies reduced. He also feels the book fills a gap in the
education of students and business people who are not otherwise
instructed in how to manage a company on the brink of failure. To aid in
understanding his analysis, he classifies businesses into four
categories depending on the strength or weakness of their product
and their financial condition, calling them eagles, tortoises, condors,
and dinosaurs. As he explains, "[e]agles have healthy products and
finances, tortoises have weak products, condors have weak finances, and
dinosaurs have weak products and finances." Condors and dinosaurs are
the primary focus of the book, since financial issues lead themselves
more to generalization.

The five chapters that are the heart of the book set out the specific
financial reasons for business failure, any or all of which could
precipitate the bankruptcy. Each contains actual cases of companies to
illustrate the type of problem. Problems in a company's cash-flow cycle
are discussed in Chapter 3. The author opines that mismanagement in this
area is probably the largest single cause of failure, but maintains that
staying on top of the problem can be accomplished with a good spread-
sheet program and that with the proper information "every worthy
business" should be able to obtain the funds it needs. In Chapter 4 the
topic is how to avoid "getting buried under current assets." The advice
here is to monitor both inventories and accounts receivable by comparing
their size to the company's investment in total assets and to analyze
carefully when that ratio rises whether that is the desired goal. In
Chapter 5, entitled "Getting Squeezed by Equipment," the author can only
warn of the risks involved in investing in long-term assets. He
concludes: "Unfortunately, there are no fail-safe methods for choosing
the right amount of fixed assets since the optimal quantity depends on
the unknown level of future sales." Chapter 6 deals with a company's
debt-to-equity ratio, emphasizing that a major disadvantage to debt
financing is that it limits alternatives, and a firm so burdened is
allowed fewer mistakes than one with sizable net worth. In Chapter 7,
entitled "Getting Pinched by Short-Term Debt," the author describes the
trap where management decides to speculate on lower future interest
rates and is wrong.

Chapter 8 sets forth methods of detecting bankruptcies to enable the
reader to identify the condors, and Chapter 9 aids failing companies by
an examination of how other companies in similar situations have
extricated themselves. Chapter 10 contains advice on investing in
bankrupt companies. Following a concluding chapter summarizing his
concepts, the author includes two appendices, one setting forth tables
of failure rates, which, of course, does not include what has happened
in the last fourteen years, and the second providing basic accounting
for non-financial readers. A glossary is also included for those whose
background in the field is limited.

Harlan D. Platt is Professor of Finance in the College of Business
Administration of Northeastern University.


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

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

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

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


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

Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard Group,
Inc., Washington, DC USA. Debra Brennan, Yvonne L. Metzler, May Guangko,
Aileen Quijano, Peter A. Chapman, Editors.

Copyright 2001.  All rights reserved.  ISSN: 1520-9474.

This material is copyrighted and any commercial use, resale or
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