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          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 10, 2001, Vol. 5, No. 7

                              Headlines

AMERICAN AIRCARRIERS: Extending 365(d)(4) Deadline to Feb. 27
BANYAN STRATEGIC: Sells Assets to Denholtz & Will Liquidate
CALECA USA: Moves to Dismiss its Chapter 11 Case
CANFIBRE OF RIVERSIDE: Committee Taps Richards, Layton as Counsel
CARMIKE CINEMAS: NYSE Will Suspend Share Trading Tomorrow

CE GENERATION: Senior Secured Bonds Placed On Creditwatch Negative
COMMODORE CRUISE: Advises Federal Maritime Commission of Bankruptcy
COMMODORE CRUISES: Case Summary
CONDOR TECHNOLOGY: Fails to Make Interest Payment & Requests Waiver
COVAD COMMUNICATIONS: Shares Various Operating Statistics

DORSEY TRAILERS: Foothill Cash Collateral Pact Runs through March 3
DRYPERS CORP: Court Approves Paragon Trade as Initial Bidder
eCITYDEALS.COM: Bid4Assets Selling Computer Equipment Online
HARNISCHFEGER: Erects Ethical Wall to Insulate Morris Attorney
ICG COMMUNICATIONS: Proposes Adequate Assurance for Utilities

INTEGRATED HEALTH: Provides Adequate Assurance to W. Kentucky Rural
JUMBOSPORTS: Bondholders Attorneys Relocate to Bilzin Sumberg Dunn
LANGSTON CORP: Seeks An Order Extending Exclusivity
LERNOUT & HAUSPIE: Cash Management System Remains Intact
MUSICMAKER.COM: Board Approves Liquidation Plan

MUSICMAKER.COM: Urges Stockholders to Reject Dissident Proposal
OWENS-CORNING: Asbestos Committee Chooses Ashby as Local Counsel
PACIFIC GAS: S&P Lowers Pacific Gas Ratings to BBB-
PACIFIC GAS: Conserves Scarce Funds & Freezes Management Salaries
PILLOWTEX, INC: Brings E&Y Aboard as Restructuring Advisors

PILLOWTEX, INC: Look for Schedules & Statements in Late February
PSEUDO PROGRAMS: Looking for Bids to Top $2 Million Offer
RELIANCE GROUP: S.D.N.Y. Temporarily Blocks Ichan's Tender Offer
SAFETY-KLEEN: Wants Okay to Pay Officer & Director Defense Costs
SERVICE CORPORATION: Plans to Dispose of 431 Properties

SHAMAN PHARMACEUTICALS: Case Summary
SUN HEALTHCARE: 15 Facility Transfers to Save $6.6 Mil Annually
USA BIOMASS: Meeting of Creditors Scheduled for January 31
USA CAPITAL: Court Designates Nassau Asset to Work with Trustees
WEST LUMBER: Universal Capital Handling 13 GOB Sales in 5 States

WHEELING-PITTSBURGH: DIP Financing Pact Meets Resistance
XEROX: Art Newman and The Blackstone Group Arrive on the Scene

* Meetings, Conferences and Seminars

                                 *********

AMERICAN AIRCARRIERS: Extending 365(d)(4) Deadline to Feb. 27
-------------------------------------------------------------
American Aircarriers Support, Inc., et al., seeks a court order
extending the time within which the companies must decide whether
to assume, assume and assign, or reject unexpired leases of
nonresidential real property to which they are parties.

A hearing with respect to the motion will be held before the
Honorable Peter J. Walsh, US Bankruptcy Court, Wilmington, Delaware
on January 19, 2001.

The debtors submit that they have had insufficient time to appraise
the value of the leases in the context of developing its strategic
plan going forward and that granting the extension of time through
February 27, 2000 will provide them with sufficient time to do so.


BANYAN STRATEGIC: Sells Assets to Denholtz & Will Liquidate
-----------------------------------------------------------
Banyan Strategic Realty Trust (Nasdaq: BSRTS) entered into a
binding contract with Denholtz Management Corporation.  Denholtz
Management Corporation conducts business as Denholtz Associates.
Under the terms of the contract, Denholtz will acquire all of
Banyan's real estate assets for a price of $226 million. The
contract includes a provision requiring Denholtz to pay all
prepayment penalties and assumption fees on Banyan's real estate
debt.

The contract contains standard conditions to closing including a
due diligence period during which Denholtz may terminate the
contract for any reason without penalty. The due diligence period
ends March 30, 2001. The Closing is scheduled for April 30, 2001,
unless extended in accordance with the contract.

Banyan also announced that it has adopted a Plan of Liquidation
pursuant to which Banyan will be dissolved and the proceeds from
the sale of its real estate assets distributed to the holders of
Banyan's beneficial interest.  Banyan's board anticipates making
the first of at least two liquidating distributions shortly after
closing the Denholtz transaction. The final distribution is
expected to occur prior to the end of 2001. Banyan announced
that based on the purchase price of the assets being sold to
Denholtz (assuming no adjustments) reduced by the costs of paying
or reserving for Banyan's liabilities and the costs of liquidating
and dissolving Banyan, it expects to make total distributions to
the holders equal to approximately $6.20 per share.

The contract results from a marketing effort initiated in August of
2000 by CFC Advisory Services Limited Partnership, an affiliate of
Chicago based Cohen Financial. Cohen was retained by Banyan to
provide financial advisory services and ultimately to market the
Trust or its assets for sale.

Denholtz Associates is a privately-held development, investment and
management company active in office, industrial, flex and retail
real estate in the United States. The company targets value-added
real estate whereby its substantial in-house resources and
financial strength can capitalize on opportunities that exist in
the marketplace.  Arthur Andersen LLP is acting as financial
advisor to Denholtz Associates.

Banyan Strategic Realty Trust is an equity Real Estate Investment
Trust (REIT) that owns primarily office and flex/industrial
properties. The properties are located in certain major
metropolitan areas of the Midwest and Southeastern United States,
including Atlanta, Georgia and Chicago, Illinois, and smaller
markets such as Huntsville, Alabama; Louisville, Kentucky; Memphis,
Tennessee; and Orlando, Florida. The Trust's current portfolio
consists of 27 properties totaling 3.5 million rentable square
feet. As of this date the Trust has 14,282,065 shares of beneficial
interest outstanding.


CALECA USA: Moves to Dismiss its Chapter 11 Case
------------------------------------------------
A hearing has been scheduled for January 19, 2001 at 9:45 AM on an
application dated December 28, 2000 of Caleca USA Corp, seeking the
issuance and entry of an order dismissing the debtor's Chapter 11
case.

Any objections must be served upon and received by Kenneth M.
Lewis, Roosevelt, Arfa & Benowich, LLP, counsel for Caleca, by no
later than 4:00 PM on January 12, 2001.


CANFIBRE OF RIVERSIDE: Committee Taps Richards, Layton as Counsel
-----------------------------------------------------------------
The Official Unsecured Creditors' Committee of Canfibre of
Riverside selected Richards, Layton & Finger, PA as its legal
counsel.  Richards Layton is expected to render such legal services
as the Committee may require to represent its interest, but not
limited to the following:

     * Consult with the Committee, the debtor and the US Trustee
       concerning the administration of the case;

     * Review, analyze and respond to motions and pleadings filed
       by the debtor with this court and to participate in hearings
       on such matters;

     * Investigate the acts, conduct assets, liabilities and
       financial condition of the debtor, the operation of the
       debtor's businesses and the desirability of continuance of,
       or proposals to restructure, such businesses, and any
       matters relevant to this case in the event and to the extent
       required by the Committee;

     * Take all necessary action to protect the rights and
       interests of the Committee and unsecured creditors of the
       debtor, including, but not limited to, the negotiation and
       preparation of documents relating to a Chapter 11 plan,
       disclosure statement and confirmation of such plan;

     * Represent the Committee in connection with the exercise of
       its responsibilities and duties under the Bankruptcy Code
       and in connection with this Chapter 11 case; and

     * Perform all other necessary legal services in connection
       with this Chapter 11 case.

The principal professionals and paraprofessionals designated to
represent the Committee and their current standard hourly rates
are:

          Mark D. Collins      $340 per hour
          John H. Knight       $240 per hour
          Paul N. Heath        $180 per hour
          Yvonne A. Dalton      $95 per hour


CARMIKE CINEMAS: NYSE Will Suspend Share Trading Tomorrow
---------------------------------------------------------
The New York Stock Exchange has determined that the Class A Common
stock of Carmike Cinemas, Inc. -- ticker symbol CKE -- should be
suspended prior to the opening on Friday, January 12, 2001.  The
Company has a right to a review of this determination by a
Committee of the Board of Directors of the Exchange.  Application
to the Securities and Exchange Commission to delist the issue is
pending the completion of applicable procedures, including any
appeal by the Company of the NYSE staff's decision.

The Exchange's action is being taken in view of the fact that the
Company is below the NYSE's continued listing criteria relating to:
average global market capitalization over a consecutive 30 trading-
day period less than $15 million; and 30 day average share price
less than $1.00. Additionally, on August 8, 2000, the Company
announced that it had filed for protection under Chapter 11 of the
U.S. Bankruptcy Code.

The Company submitted a plan to demonstrate compliance with the
NYSE's continued listing standards; however, the plan was found not
acceptable by the NYSE.


CE GENERATION: Senior Secured Bonds Placed On Creditwatch Negative
------------------------------------------------------------------
On January 8, 2001, Standard & Poor's placed its triple-'B'-minus
rating on CE Generation LLC's $400 million senior secured bonds,
due 2018, on CreditWatch Negative.

This rating action reflects last week's rating downgrade of
Southern California Edison Co. (SoCalEd: triple-'B'-minus/Watch
Neg/'A-3') to triple-'B'-minus as a result of the extraordinary
events in California's power markets, which have brought the
state's two largest investor-owned utilities to the brink of
bankruptcy (see related stories). SoCalEd is a primary counterparty
to Salton Sea Funding Corp., which is a wholly owned subsidiary of
CE Generation LLC. CE Generation is owned 50% by MidAmerican Energy
Holdings Co. (MEC, triple-'B'-minus/Watch Pos/--) and 50% by El
Paso Energy Corp. (triple-'B'-plus/Stable/'A-2').  Salton Sea
accounts for 40%-50% of CE Generation's cash flows.
       
Salton Sea Funding is the financing vehicle for MEC's Southern
California-based geothermal power projects, which total about 304
gross MW.

SoCalEd is facing imminent default unless California regulators and
politicians can immediately craft a viable financial solution that
restores liquidity to the utility. Because SoCalEd is a
counterparty to long-term contracts indirectly associated with CE
Generation, a bankruptcy filing by the utility could trigger a
default under these offtake contracts or a stay of payments, which
in turn could weaken the credit worthiness of CE Generation.

Standard & Poor's notes that the CE Generation does not face
immediate liquidity problems because it has a six-month debt
service reserve in place. In addition, in the unlikely event of a
complete loss of distributions from Salton Sea, CE Generation would
still be able to meet debt service obligations from distributions
from its other project holdings.

Total capacity of CE Generation's 13-project portfolio, which
includes 2 combined-cycle gas generation plants in Texas and New
York, is about 745 MW. It is concentrated in the Southern
California, New York and Texas markets. As part of the financing
of CE Generation, MEC also carved out $140 million of the series F
Salton Sea Funding Corp. debt that was issued in 1998, and
guaranteed it through a separate debt service agreement in
connection with the zinc recovery operation at Salton Sea.

Over the next few weeks, Standard & Poor's will be assessing each
of the underlying project contracts and long-term equilibrium
economic positions of the plants, as well as the potential for
selling into alternative offtake arrangements that may protect the
projects' credit positions


COMMODORE CRUISE: Advises Federal Maritime Commission of Bankruptcy
-------------------------------------------------------------------
New Commodore Cruise Lines Limited advised the Federal Maritime
Commission that it filed for bankruptcy under Chapter 11 of the
U.S. Bankruptcy Code on December 27, 2000 in the U.S. Bankruptcy
Court for the Southern District of Florida.  

Commodore operates Commodore Cruise Line and Crown Cruise Line,
both of which have suspended their cruise operations.  Commodore
participates in the Commission's Public Law 89-777 program and has
been issued Certificates (Performance) covering the affected
vessels Enchanted Capri, Enchanted Isle, and Crown Dynasty.

The Commission makes it clear in a statement that it is not
involved in processing refunds.  Commodore has advised that at this
time all requests for refunds should be faxed to Commodore's
offices at 954-967-2148 or mailed to Commodore/Crown, 4000
Hollywood Boulevard, Suite 385 South, Hollywood, Florida 33021.

As additional pertinent information may develop on this matter, the
Commission will post materials on its Web site at
http://www.fmc.gov


COMMODORE CRUISES: Case Summary
-------------------------------
Debtor: Commodore Cruises, Ltd., a Bermuda Corp., as General
        Partner of Capri Cruises, a Florida General Partnership
  c/o NCCL
  4000 Hollywood Blvd #385-S
  Hollywood, FL 33021

Type of Business: Wwns and operates cruise ships

Chapter 11 Petition Date: December 29, 2000

Bankruptcy Case No.: 00-28040

Court: Southern District of Florida (Tampa)

Judge: Raymond B. Ray

Debtor's Counsel: Chad P. Pugatch, Esq.
                  Law Offices of Chad P. Pugatch, P.A.
                  Northmark Building
                  33 Northeast 2nd Street, Suite 101
                  Fort Lauderdale, Florida 33301
                  Telephone: 954-462-8000
                  Fax: 954-462-4300


CONDOR TECHNOLOGY: Fails to Make Interest Payment & Requests Waiver
-------------------------------------------------------------------
Condor Technology Solutions Inc. (OTC Bulletin Board: CNDR), a
provider of interactive and eBusiness technology solutions,
discloses that it failed to make a $10 million debt reduction
payment to its Lender Group, led by First Union National Bank,
which was due to be paid on December 31, 2000.  In view of the
current termination date of the entire credit facility on February
28, 2001, Condor has requested the Lender Group to extend its
credit facility and waive the non-payment.  Condor and First Union
are currently in discussions regarding a restructuring of the
credit facility and the terms of an extension.

Kennard F. Hill, Chairman and Chief Executive Officer of Condor,
stated, "While the outcome of those discussions is unknown, Condor
management will be working to achieve a continuing credit facility
on satisfactory terms."

Condor also announced the resignation of Michael Paglaiccetti as
Vice President and Chief Operating Officer of Condor. The functions
of the Chief Operating Officer will be assumed, on an interim
basis, by Mr. Hill.

Condor Technology Solutions Inc., a leader in Internet/eBusiness
development, interactive communications and technology solutions,
provides eBusiness solutions to commercial and government clients.


COVAD COMMUNICATIONS: Shares Various Operating Statistics
---------------------------------------------------------
Covad Communications (Nasdaq:COVD), the leading national broadband
services provider utilizing DSL (Digital Subscriber Line)
technology, reported various operating statistics for the fourth
quarter and 2000.

Covad ended the year with the following operating results:

    Lines in Service

    --  274,000 total lines in service
    --  Approximately 50 percent of total lines were business lines
        and 50 percent were consumer lines
    --  3 percent of total lines were sold directly to end users
        and 97 percent were sold through Covad resellers

    Line Sharing

    --  Over 17,000 line shared lines were installed this quarter
        compared to 400 line shared lines installed in the third
        quarter
    --  Covad expects the number of line shared lines to increase
        as operational processes continue to improve with the
        incumbent local telephone companies
    --  Success in installing line shared services varies
        significantly with the different incumbent local telephone
        companies

    Non-Revenue Generating ISPs

    --  The number of lines that Covad is not recognizing revenue
        on is approximately 92,000
    --  The number of ISPs for which Covad is not recognizing
        revenue has increased to 19
    --  Four of the 19 ISPs have filed for bankruptcy protection

    Covad Safety Net Program

    --  In less than three weeks, approximately 1,500 lines
        (representing 30 percent of lines from two ISPs) were
        transitioned to Covad.net or another ISP through the Covad
        Safety Net program
    --  Covad will be working with additional ISPs in the first
        quarter to transition more lines in an effort to maintain
        end user's broadband connections

"We continue to excel operationally on many fronts. We beat line
expectations for the quarter, we have transitioned to a line shared
process in our consumer business and we are converting distressed
lines through our Covad Safety Net program," said Chuck McMinn,
chairman of Covad. "This continued strong operational performance
combined with a strict focus on maximizing efficiency in the
business, will help us demonstrate significant progress along our
new plan for 2001."

Covad's bonds continue to trade at distressed levels in the low
30's.  None of Covad's operating statistics prompted Moody's to
revise their Caa1 Senior Unsecured Debt or other ratings.  


DORSEY TRAILERS: Foothill Cash Collateral Pact Runs through March 3
-------------------------------------------------------------------
As previously announced on December 5th and 29th of 2000, Dorsey
Trailers, Inc. 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 debtor and debtor-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.

The Company has reached an agreement with Foothill Capital
Corporation, the lender under the Company's existing working
capital credit facility for limited use of cash collateral to fund
on-going operations as allowed in the agreement. The current
agreement was accepted on January 3, 2001 and expires on March 3,
2001. The cash collateral agreement provides certain measurements
that the Company must meet in order for the agreement to continue
until March 3, 2001; the conditions include but are no limited to
meeting certain dollar amount loan balances with Foothill Capital
Corporation during the duration of the agreement. The prior cash
collateral agreement with Foothill Capital Corporation expired on
January 3, 2001.

On December 28, 2000, the Company entered into an exclusive
agreement with Equity Partners of Maryland, an enterprise
specializing in turnarounds, sales and refinancings, and
liquidations of financially troubled companies. The agreement
provides for EPI to assist the Company in refinancing or efforts to
seek a joint venture partner, sell, lease or otherwise dispose of
the Company's business as a going concern and/or some or all of the
Company's interest in the assets of the debtor's estate. This
exclusive agreement expires sixty days from its approval by the
U.S. Bankruptcy Court.

Marilyn R. Marks, Chairman of the Board of Directors of the Company
issued the following statement: "We are pleased that the Company
was able to reach an agreement with Foothill Capital for limited
use of the cash collateral to fund on-going operations. The Company
believes that this agreement will provide the best method to
maximize the value of the Company and its assets. Additionally,
although our desire was to continue the Company as an on-going
operation, we must explore all aspects of maximizing the value of
the Company; as such, the Company believes the best method to do
this is the retention of EPI to explore the sale of the Company in
whole as an on-going operation or to sale the individual assets of
the Company. As we have previously stated, if a sale of the
Company's assets is required, it is unlikely that the Company will
be able to obtain their true market value due to the severe
downturn in the trailer manufacturing industry. Accordingly the
proceeds of 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. As such, there would
then be nothing available for distribution to the Company's
stockholders."

Dorsey Trailers, Inc. 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 CORP: Court Approves Paragon Trade as Initial Bidder
------------------------------------------------------------
By court order entered December 22, 2000, the US Bankruptcy Court,
Southern District of Texas, Houston Division, approved Paragon
Trade Brands, Inc., as the initial bidder for the sale of Drypers'
Business.  The Paragon proposal is premised upon an Enterprise
Valuation for the assets of approximately $70.2 million, which is
comprised of the purchase price of the assets of $62.1 million in
cash and the assumption of the subsidiary debt of an estimated $8.1
million.

Drypers may choose to accept a firm purchase offer for Drypers
Malaysia from a bona fide third party purchaser so long as the
purchase price for Drypers Malaysia is in excess of $19 million,
among other conditions.


eCITYDEALS.COM: Bid4Assets Selling Computer Equipment Online
------------------------------------------------------------
Bid4Assets, the leading full-service asset disposition firm
specializing in assets from distressed situations, announced on
January 8, 2001 that it has been commissioned to auction the
remaining assets of defunct eCitydeals, Inc.  The assets include
servers, laptops, desktops, monitors, printers and other equipment
from Sun, HP, IBM, Compaq, Dell and more.  The auction will be held
online from Jan. 22 to 25, 2001 at http://www.bid4assets.com/ecit

Asset inspection will be held on, Jan. 16 and 18 from 9 a.m. to 6
p.m. PT in Irvine, Calf. Inspections are by appointment only and
can be arranged by calling Bid4Assets at (877) 427-7387 or by email
at service@bid4assets.com.

eCitydeals.com was a Los Angeles-based Internet company that
provided auction services to local government agencies. The
company launched in January 2000, and raised a total of $2 million.
In September 2000, the company filed under Chapter 7 of the U.S.
bankruptcy code in U.S. Bankruptcy Court in the Central District of
California.

eCitydeals.com joins the growing list of failed Internet companies
and technology companies that have been liquidated by Bid4Assets,
making the company a leader in maximizing the return to the seller
on the sale of failed dot.coms. Sales have included Value America,
Boo.com, Broadband Infrastructure Group, Civiczone.com and
many other companies that have chosen to remain anonymous.


HARNISCHFEGER: Erects Ethical Wall to Insulate Morris Attorney
--------------------------------------------------------------
Laura Davis Jones, Esq., a shareholder in the firm of Pachulski,
Stang, Ziehl, Young & Jones, P.C., discloses in a Fifth
Supplemental Affidavit that Mary F. Caloway, Esq., became a member
of PSZY&J on November 17, 2000 and is resident in the Firm's
Delaware office.

Ms. Caloway was formerly an associate with Klett Rooney Lieber &
Schorling.  Klett Rooney represents Morris Material Handling, a
party-in-interest in the Debtors' chapter 11 cases.  Klett Rooney
also represents Morris in its own bankruptcy proceeding pending in
the District of Delaware.  Ms. Caloway participated in both aspects
of Klett Rooney's representation of Morris Material.

PSZY&J, Ms. Jones says, has taken measures to eliminate any
potential conflicts and remains disinterested within the meaning of
11 U.S.C. section 101(14), as modified by 11 U.S.C. section
1107(b).  Ms. Jones tells the Court that, to avoid any potential
conflict of  interest:

(1) The Firm will circulate a memorandum to all Firm personnel
    advising of the potential conflict of interest and the
    procedures implemented to screen Ms. Caloway from
    Harnischfeger's cases in all respects;

(2) Firm personnel will not communicate with Ms. Caloway regarding
    Harnischfeger's cases; and

(3) Ms. Caloway will be prohibited access to the Firm's files
    relating to Harnischfeger's cases.

(Harnischfeger Bankruptcy News, Issue No. 36; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


ICG COMMUNICATIONS: Proposes Adequate Assurance for Utilities
-------------------------------------------------------------
ICG Communications asks the Bankruptcy Court in Wilmington to enter
an order determining that the Debtors' history of prompt and full
payments to the gas, water, electric, telephone and other utility
companies providing service to the Debtors, the Debtors'
demonstrable ability to pay future utility bills, the
administrative priority status afforded the Utility Companies'
post-petition claims and any existing cash security deposits held
by certain of the Utility Companies" together constitute adequate
assurance of payment for future utility services.

The Debtors explain that they currently utilize gas, water,
electric, telephone and other utility services provided by a large
number of Utility Companies. Because a substantial portion of the
Debtors' revenues is derived from the operation of telecom
connections for which the Utility Companies provide essential
services, any interruption in such services could prove
devastating.

The Debtors suggested that the temporary or permanent
discontinuation of utility services at any of the Debtors' business
locations could irreparably disrupt the Debtors' business
operations and, as a result, fundamentally undermine the Debtors'
reorganization efforts."

The Debtors tell the Court that they have an excellent prepetition
payment history with each of the Utility Companies. Other than
utility bills not yet due and owing as of the Petition Date, which
the Debtors are prohibited from paying as a result of the
commencement of these chapter 11 cases, the Debtors historically
have paid their prepetition utility bills in full when due."

The Debtors also represent that they have sufficient cash reserves,
together with anticipated access to sufficient debtor in possession
financing, to pay promptly all of their respective obligations to
the Utility Companies for postpetition utility services on an
ongoing basis and in the ordinary course of their businesses.
Moreover, all such claims will be entitled to administrative
priority treatment under the Code, providing additional assurance
that future obligations to the Utility Companies will be satisfied
in full. Finally, "in addition, certain of the Utility Companies
currently may hold cash security deposits or other forms of
security to insure the Debtors' payment of future utility bills,"
assert the Debtors.

The Debtors believe that their prepetition history of prompt and
full payment of outstanding utility bills (to the extent due and
owing), their demonstrated ability to pay future utility bills, the
administrative priority status afforded the Utility Companies'
postpetition claims and any existing cash security deposits (and
other forms of security) held by certain of the Utility Companies
together constitute adequate assurance to each of the Utility
Companies of payment for all future services.

Thus, the Debtors also request that they not be required to make
any postpetition deposits with the Utility Companies and that the
Utility Companies be prohibited from drawing upon any existing cash
security deposit, surety bond or other form of security to secure
future payment for utility services. (ICG Communications, Issue No.
2; Bankruptcy Creditors' Service, Inc., 609/392-0900)


INTEGRATED HEALTH: Provides Adequate Assurance to W. Kentucky Rural
-------------------------------------------------------------------
West Kentucky Rural Electric Cooperative Corporation provides
utility services to the Debtors at Holland Medical Pulmadose,
located at P.O. Box 1600, Muray, Kentucky 42071, account no. 439-
1720-2.  In compliance with the Court's Utilities Order, West
Kentucky Rural has timely requested post-petition security
deposits.  In consideration of issues relating to adequate
assurance of payment of post-petition charges, the Debtors and West
Kentucky agree that:

(1) As adequate assurance of payment for post-petition charges
    relating to the Pulmadose Account, the Debtors shall pay to W.
    Kentucky Rural a deposit in the amount of $ 1,500;

(2) The Pulmadose Account Security Deposit shall bear interest in
    accordance with W. Kentucky Rural's governing tariffs and
    regulations and shall be returned to the Debtors, together with
    interest accrued upon closure of account, provided that the
    post-petition balances owing on such accounts are paid in full,
    or sooner, if otherwise provided for under governing tariffs
    and regulations;

(3) Any undisputed charge for utility services furnished by W.
    Kentucky Rural to the Debtors post-petition shall constitute an
    administrative expense of the Debtors' chapter 11 cases in
    accordance with sections 503(b) and 507(a)(l) of the Bankruptcy
    Code;

(4) If there a default by the Debtors in the absence of a good
    faith dispute, and the default is not cured within 10 business
    days after written notice, then W. Kentucky Rural may terminate
    post-petition services to the Debtors without further order of
    the Court in accordance with its governing tariffs and
    regulations.

(Integrated Health Bankruptcy News, Issue No. 12; Bankruptcy
Creditors Service, Inc., 609/392-0900)


JUMBOSPORTS: Bondholders Attorneys Relocate to Bilzin Sumberg Dunn
------------------------------------------------------------------
The Official Committee of Holders of 4.25% Subordinated Convertible
Debentures issued by JumboSports asks the Bankruptcy Court for
permission to employ Bilzin Sumberg Dunn Baena Price & Axelrod LLP
as their new bankruptcy counsel.  As of September 1, 2000, the
attorneys from Stroock & Stroock & Lavan LLP primarily responsible
for the representation of the Bondholders' Committee moved their
entire practice group to Bilzin.

To maintain continuity of representation and to substitute and
replace Stroock, the Bondholders' Committee desires to employ
Bilzin as their attorneys in this case.

As the Committee's counsel, Bilzin will, among other services, be:

     (A) Providing the Bondholders' Committee with legal advice
with respect to its rights, duties and powers in this case;

     (B) Assisting the Bondholders' Committee in its investigation
of the acts, conduct, assets, liabilities and financial condition
of the debtors, the operation of the debtors' businesses and the
desirability of the continuance of such businesses and any other
matter relevant tot he case or to the formation of a plan;

     (C) Preparing pleadings and applications as may be necessary
in furtherance of the Bondholders' Committee's interests and
objectives;

     (D) Participating in the formulation of a plan or plans or
reorganization and advising the Bondholders' Committee regarding
the same;

     (E) Assisting the Bondholders' Committee in considering and
requesting the appointment of a trustee, examiner or financial
advisor, should such action become necessary;

     (F) Consulting with the debtors and their counsel and the US
Trustee concerning the administration of this estate;

     (G) Representing the Bondholders' Committee in hearings and
other judicial pleadings.


LANGSTON CORP: Seeks An Order Extending Exclusivity
-------------------------------------------------------
(debbie)
The Langston Corporation seeks entry of an order extending the
exclusive periods during which the debtor may file a plan of
reorganization and solicit acceptances thereof.

A hearing on the motion will be held on January 18, 2001 at 4:00 PM
before the Honorable Peter J. Walsh, US Bankruptcy Court,
Wilmington, Delaware.

The debtor requests entry of an order extending the Plan Filing
Period and the Solicitation Period to and including March 30, 2001
and May 29, 2001,respectively.

The debtor previously informed the court that it intends to sell
substantially all of its assets as soon as possible. The debtor has
actively sought an initial or "stalking horse" bidder. On December
22, 2000, the debtor and Groupe Laperriere & Verreault executed a
letter of intent which contemplates the sale of substantially all
the assets of the debtor to GLV. The sale will occur after an
auction is conducted. Consistent with the Letter of Intent, the
debtor intends to ask the court to schedule the sale to take place
on or about February 23, 2001.

In addition, GLV will not be acquiring the debtor's interest in its
over funded pension plan. The ultimate disposition of this asset,
which may have significant value, is still being explored. Until
there is greater certainty concerning the disposition of this asset
and the parties' rights therein, a plan of reorganization would be
premature.

Due to the time consuming process leading to the signing of the
Letter of Intent, the debtor has had little time to formulate and
negotiate the terms of a bankruptcy plan of reorganization.


LERNOUT & HAUSPIE: Cash Management System Remains Intact
--------------------------------------------------------
The Debtors have presented an application to the Bankruptcy Court
seeking authority to maintain and continue using the Debtors'
existing bank accounts, business forms, and cash management system.
The Debtors noted that the United States Trustee has established
operating guidelines for debtors-in-possession who continue to
operate their businesses. These guidelines require Chapter 11
debtors-in-possession to, among other things, close all existing
pre-petition bank accounts and open new, post-petition bank
accounts. This requirement is designed to provide a clear line of
demarcation between pre-petition and post-petition transactions and
operations, and to help prevent an inadvertent post-petition
payment of a pre-petition claim by preventing banks from
honoring checks drawn prior to the filing of the petition.

Before the Petition Date, the Debtors, in the ordinary course of
their business, maintained a variety of bank accounts including,
but not limited to, payroll accounts, concentration accounts, and
operating accounts. For Lernout & Hauspie Speech Products N.V.,
these accounts included operations accounts at Artesia, Dexia, KBC
Bank, and Generale Bank. For Dictaphone Corporation, these Accounts
included concentration, letter of credit, and overnight sweep
accounts at Bankers Trust, international accounts receivable,
sterling disbursing, and dollar disbursing accounts at Deutsche
Bank London, a depository and payroll account at NationsBank,
payroll, concentration and dental claims accounts at Chase
Manhattan, concentration, disbursement, 401(k) and
flexible benefit plan accounts at Fleet/Shawmut, and a lockbox
deposit account at National City Bank. For L&H Holdings USA, Inc.,
the accounts included a zero-balance payroll account, credit card,
and operating account with Fleet, and a brokerage account with
Morgan Stanley Dean Witter.

To guard against improper transfers resulting from the post-
petition honoring of pre-petition checks, the Debtors propose that,
with limited court-approved exceptions, the banks named not honor
any checks drawn on these accounts prior to the commencement of the
case. The Debtors also asked that these accounts be deemed debtor-
in-possession accounts, and that the Debtors be authorized to
continue use of these accounts without the appellation of "Debtor
in Possession".

To minimize the expenses to these estates, the Debtors also asked
that they be authorized to continue to use all correspondence,
business forms, including letterhead, purchase orders and invoices,
and checks existing immediately prior to the Petition Date without
reference to the Debtors' status as debtors-in-possession. The
Debtors urged that parties doing business with them would
undoubtedly be aware, as a result of the size of these cases, of
the Debtors' bankruptcy status. Changing correspondence and
business forms would therefore be unnecessary, burdensome to the
Debtors' estates, expensive, and disruptive to business operations.

Finally, the Debtors asked for authority to continue to use their
decentralized cash management system for all its business
operations. Under the system as it currently exists, while
reporting is centralized, the Debtors' individual cash management
systems are different. Furthermore, the Debtors transfer cash to
non-debtor affiliates. Requiring the Debtors to adopt a new,
segmented cash management system at this critical stage of these
cases would be expensive, create unnecessary administrative
problems, and be much more disruptive than productive. With respect
to Dictaphone, the cash management system works by channeling
incoming cash primarily from a lockbox in Louisville, Kentucky.
Information relating to receipts in the lockbox is then transmitted
to Stratford, Connecticut. The accounts payable module produces
checks twice a week to pay vendors. Wire transfers are used to pay
rent for headquarters monthly, and automated clearinghouse
transactions are set up one day in advance and used for federal
withholding, state income taxes, state sales taxes, social security
payments, flex spending accounts, medical claims, and freight
bills. Dictaphone only maintains one investment account in which
amounts that are in excess of any regular accounts are transferred
and deposited overnight. The money then is transferred back into
the regular account the following morning to be used for
disbursements.

L&H Holdings has three main bank accounts with Fleet Bank, as
described above. L&H Holdings also has the ability to wire funds
from the operating accounts to pay foreign vendors and certain
employee benefits, such as 401(k) plans, dental benefits, and
health benefits. The practices employed by the Debtors in
administering the cash management system constitute ordinary, usual
and essential business practices. Funds move quickly and
efficiently, ensuring their availability. To avoid a disruption in
the ordinary and usual conduct of the Debtors' financial affairs
and cash management, the Debtors argued that it was essential that
they be permitted to continue these practices, and the requested
relief was granted.

Judge Judith Wizmur granted the Debtors' request.  (L&H Dictaphone
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


MUSICMAKER.COM: Board Approves Liquidation Plan
-----------------------------------------------
The Board of Directors for Musicmaker.com (Nasdaq: HITS), a
provider of custom music CDs on the Internet and of digital
downloadable music, unanimously voted to liquidate and dissolve the
Company.

The Board approved a Plan of Complete Liquidation and Dissolution
which will be submitted to the Company's stockholders for their
approval.  Once the Plan of Liquidation has been approved by the
stockholders, the Company will prepare an information statement
describing the Plan of Liquidation to be filed with the Securities
and Exchange Commission and mailed to stockholders.

The Board of Directors believes the Plan of Liquidation is in the
best interests of the Company and its stockholders. In determining
to liquidate the Company, the Board considered a number of factors
including that the music industry and e-commerce in general are in
a period of rapid change and uncertainty; the potential for growth
and availability of financing this environment is extremely
limited; the Company's inability, despite significant efforts, to
in identify a buyer or strategic partner willing to offer greater
value than that expected to be derived from liquidation; and
the Company's stock has traded well below the net asset value of
its shares. Based on this information, the Board of Directors
believes that distributing the Company's net assets will return the
greatest value to stockholders as compared to examined
alternatives.

Shortly after the announcement, Musicmaker.com clarified certain
remarks by Mark Fowler, the Chief Financial Officer, which appeared
in the January 4 edition of the Washington Post regarding the
Company's cash value.

Mr. Fowler correctly stated that the current cash value of the
Company is between $7 and $9 per share, the Company says.  However,
uncertainties as to the net value of the Company's non-cash assets,
the price that can be obtained for such assets and the ultimate
amount of liabilities, including liabilities and expenses incurred
in the future, make it impossible to predict the aggregate
net cash value that would ultimately be distributable to
stockholders if they approve the Company's proposed plan of
liquidation. Claims, liabilities and expenses will be significantly
reduced in light of the Company's decision to cease operations, but
will continue to be incurred until the Company is formally
dissolved. Such liabilities and expenses could significantly reduce
the amount of any distributions to stockholders.


MUSICMAKER.COM: Urges Stockholders to Reject Dissident Proposal
---------------------------------------------------------------
Musicmaker.com, Inc. (Nasdaq NM: HITS) issued the following letter
to its stockholders on January 8, 2001:

Dear musicmaker.com, Inc. stockholder:

     You may receive a communication called a "consent
solicitation" from an insurgent stockholder group comprised of BCG
Strategic Investors, LLC, Barrington Capital Group, L.P.,
Barrington Companies Equity Partners, L.P., dot com Investment
Corporation and their affiliates, collectively referred to in this
letter as the Insurgents.

     PLEASE DO NOT RETURN ANY CONSENT CARDS SENT TO YOU BY THE
INSURGENTS.

     We urge you NOT to sign any consent solicited by the
Insurgents without first having received and considered the
material your Board of Directors will send to you in the near
future, so that you can make an informed decision. If you have
already signed the Insurgent's consent card, we urge you NOT TO
RETURN IT, or, if you have already, to read the Company consent
revocation material carefully when it becomes available.

     THE CURRENT MUSICMAKER BOARD OF DIRECTORS HAS UNANIMOUSLY
DETERMINED THAT THE PROPOSALS OF THE INSURGENTS ARE NOT IN THE BEST
INTEREST OF MUSICMAKER AND ITS STOCKHOLDERS.

     On January 5, 2001, the Insurgents publicly stated their
intention to seek written consents to take certain actions to take
control of the musicmaker board of directors, including amending
the bylaws to increase the number of directors to fifteen and to
nominate eight individuals, including James Mitarotonda and Seymour
Holtzman, to the board of directors of musicmaker.com, Inc. The
musicmaker board of directors unanimously believes these proposals
are not in the best of the Company or its stockholders.

     The musicmaker board of directors has adopted a Plan of
Complete Liquidation and Dissolution which, if approved by the
Company's stockholders, will provide for an orderly liquidation of
the company's assets. Your Board of Directors has taken substantial
steps in the liquidation process, including closing the company's
New York City office, terminating all unnecessary employees leaving
a minimal staff to wind-up the affairs of the Company and
closing down all operations and the Company's website. We believe
your current musicmaker board of directors is in the best position
to complete the liquidation of musicmaker in an efficient manner
and to decide on the courses of action that are in the best
interests of the stockholders and musicmaker. We are concerned that
the Insurgent's proposals may disrupt the orderly completion of the
liquidation of musicmaker.

     In contrast, the Insurgents have failed to identify all but
two of their nominees to the Board of Directors, have failed to
identify their proposed plans for liquidation of the Company and
failed to disclose all of their contacts, arrangements and
understandings with third parties.

     THERE IS ABSOLUTELY NO NEED FOR YOU TO TAKE ANY ACTION AT THIS
TIME.

     We are confident in our strategy and reaffirm our
determination to act in your best interests in the liquidation
process. Your board of directors greatly appreciates your continued
support.

                                  Very truly yours,

                                  THE BOARD OF DIRECTORS OF
                                  MUSICMAKER.COM, INC.

                                  Devarajan S. Pathukarai
                                  Chairman


OWENS-CORNING: Asbestos Committee Chooses Ashby as Local Counsel
----------------------------------------------------------------
The Official Committee of Asbestos Claimants of Owens Corning and
its subsidiaries, has applied for judicial authority to employ the
Wilmington, Delaware, law firm of Ashby & Geddes as their Delaware
attorneys. The services which the Asbestos Claimants' Committee
anticipates that Ashby & Geddes will render include, but are not
limited to:

(a) Providing legal advice as Delaware counsel regarding the rules
    and practices of this Court applicable to the Asbestos  
    Claimants' Committee's powers and duties as an official
    committee under the Bankruptcy Code;

(b) Providing legal advice as Delaware counsel regarding the rules
    and practices of this Court applicable to any disclosure
    statement and plan filed in this case and with respect to the
    process for approving or disapproving disclosure statements and
    confirming or denying confirmation of a plan;

(c) Preparing and reviewing as Delaware counsel applications,
    motions, complaints, answers, orders, agreements and other
    legal papers filed against or on behalf of the Asbestos
    Claimants' Committee for compliance with the rules and
    practices of this Court;

(d) Appearing in Court as Delaware counsel to present necessary
    motions, applications, and pleadings and otherwise protecting
    the interests of the Asbestos Claimants' Committee and
    asbestos-related personal injury creditors of the Debtors;

(e) Investigating, instituting and prosecuting causes of action on
    behalf of the Asbestos Claimants' Committee and/or the Debtors'
    estates; and

(f) Performing such other legal services for the Asbestos   
    Claimants' Committee as the Asbestos Claimants' Committee
    believes may be necessary and proper in these proceedings.

The attorneys with the primary responsibility of representation of
the Asbestos Claimants' Committee, and their respective hourly
rates, are:

     Professional          Position             Rate
     ------------          --------             ----
   William P. Bowden        Partner        $ 300 per hour
   Phillip Trainer          Partner        $ 260 per hour
   Christopher S. Sontchi   Associate      $ 240 per hour
   Matthew G. Zaleski, III  Associate      $ 200 per hour
   Gregory A. Taylor        Associate      $ 125 per hour
   Cathie J. Boyer          Paralegal       $ 90 per hour
   Stephanie L. Peterson    Paralegal       $ 90 per hour

The Committee advises that this list is not exclusive, and that
other professionals at Ashby & Geddes may perform services for the
Asbestos Claimants' Committee. Further, the firm stated that the
rates it quoted are adjusted upward on an annual basis.

The Committee asks the Court to approve this appointment
retroactive to October 26, 2000, since it was necessary for Ashby &
Geddes to begin work on behalf of the Asbestos Claimants' Committee
immediately after the Asbestos Claimants' Committee formally
authorized employment of the firm.

William P. Bowden, a member on behalf of Ashby & Geddes, states
that the firm has no conflict of interest in the Debtors or the
estates, or the Asbestos Claimants' Committee on the matters upon
which it will be employed; however, Mr. Bowden discloses that the
firm has represented Kenneth Bargatze, Bill Boone, William Clark,
and Robert Wagner, each of whom hold asbestos-related claims
against the Debtors, but has ceased this representation when
employed by the Asbestos Claimants' Committee. Further, Mr. Bowden
disclosed that Ashby & Geddes formerly represented Chase Manhattan
Bank, a secured creditor of these estates, in an adversary
proceeding commenced in the bankruptcy proceedings of Lomas
Financial Group, and also represented Bank One Corporation in
bankruptcy proceedings of Just for Feet, Inc., which pends in the
Delaware court.

Mr. Bowden further disclosed that the firm formerly presented
Credit Suisse First Boston as Delaware counsel in connection with
the bankruptcy proceedings of ICO Global Communications Services,
and Wells Fargo Bank in the bankruptcy proceedings of Lomas
Financial Group. Ashby & Geddes also represented Wachovia Bank in
the bankruptcy cases of The Loewen Group, and Prime Succession,
both currently pending in the Delaware court.

Ashby & Geddes formerly represented Highwoods/Forsyth, LP, a lessor
of the Debtors, as Delaware counsel in the bankruptcy proceedings
of Brothers Gourmet Coffees currently pending in Delaware, and
other creditors in other bankruptcy cases, such America
International Group and certain of its affiliates, LaSalle National
Leasing Corporation, an equipment lessor of the Debtors, Travelers
Insurance Co., which may be a party in interest in these cases,
Fleet Capital Corporation and Fleet Business Credit Corporation,
NationsBank, Exxon Company, Deutsche Bank, and others.
However, in no instance did the firm represent these clients in any
matter adverse to the estate or the Asbestos Claimants' Committee
on the matters for which approval of their employment is sought.


PACIFIC GAS: S&P Lowers Pacific Gas Ratings to BBB-
---------------------------------------------------
Standard & Poor's lowered its ratings on bonds issued by various
issuers for the benefit of Pacific Gas & Electric Co. (PG&E) to
triple-'B'-minus from single-'A'-plus and placed the ratings on
CreditWatch with negative implications. PG&E is the obligor for
each bond issue. The bonds are secured by payments from PG&E.

The downgrade on theses issues reflects Standard & Poor's Jan. 4,
2001,downgrade on PG&E. That rating action reflected the failure of
the California Public Utilities Commission's (CPUC) Jan. 4, 2001,
rate order to meaningfully address a market structure that compels
the utility to serve customers at prices that are substantially
below the cost of procuring wholesale power. The utility's
resulting heavy debt burden and dearth of liquidity are
inconsistent with a higher rating and may lead to further rating
downgrades unless state or federal officials act quickly to remedy
the utility's financial integrity. Yet, Standard & Poor's has
concluded that while lower ratings may soon result, they are
premature at this juncture because the California Legislature is in
special session and is endeavoring to craft a timely solution to
the financial crisis of the state's utilities.

It is precisely the potential dire consequences of inaction that
leads Standard & Poor's to conclude that there is a reasonable
chance that action is forthcoming.

The ratings are additionally placed on CreditWatch with negative
implications, reflecting the potential for the ratings to be
further downgraded if the utility's financial condition is
permitted to continue to deteriorate. Downward pressure on the
rating might ease if federal or state officials create a definitive
and comprehensive framework for shoring up the utility's financial
health. There is evidence of momentum among California legislators
to create the consensus necessary to craft a solution to the
utility's financial crisis. By contrast, prospects for meaningful
state regulatory relief were exhausted with the issuance of the
CPUC's Jan. 4, 2001, order. The temporary one cent per kWh rate
increase adopted by the CPUC at its Jan. 4 session is not
sufficient to cover more than a nominal fraction of the cost of
future power purchases if current wholesale market
prices persist. The minuscule rate increase also does nothing to
address the multibillion dollar sums of purchased-power expenses
that have already been incurred by the utilities and that have not
been recoverable from customers.

Over the course of several months, utility representatives have
held numerous and extensive discussions with California's governor,
state legislators, and state and federal regulators in an effort to
address the rapidly escalating financial burdens caused by PG&E's
inability to recover large portions of its purchased-power costs.
Despite these efforts, neither the legislators nor the regulators
have thus far mustered the political will to create a solution that
obviates the risk of a utility insolvency. The prospects for a
favorable resolution of this financial crisis now lie with the
California Legislature and other governmental bodies. Consequently,
if state or federal officials do not act quickly to preserve the
financial viability of the utility, its ratings and the ratings of
related entities are likely to be further downgraded substantially
to reflect the highly speculative nature of investments in these
companies' securities, given the risk of the utility's insolvency.

The risk of insolvency is an outgrowth of certain provisions of
California's legislative and regulatory framework for the
restructuring of its electric utilities. These provisions led to
sizable imbalances between PG&E's operating expenses and revenues
because California's sustained extraordinarily high wholesale power
prices have, and continue to, significantly exceed legislatively
frozen retail electric rates.

The revenue shortfall at the utility is staggering. Because of
frozen rates, the cost of PG&E's wholesale power purchases over the
past six months exceeded revenues by more than $5 billion. Funding
purchased-power obligations impaired liquidity and continues to
produce negative cash flow. The utility remains dependent upon
capital markets and the banking sector to provide monies needed to
satisfy operating and debt obligations.

In the absence of a clear signal of support for the utility's long-
term viability from government officials and regulators, it is
improbable that PG&E will be able to access necessary capital.
Consequently, further negative rating action will occur unless
state or federal officials implement a timely plan that restores
the utility's financial integrity and provides sufficient
confidence to the markets that lenders will be repaid for existing
and future debt obligations, Standard & Poor's said.

RATINGS LOWERED TO 'BBB-' FROM 'A+' AND
PLACED ON CREDITWATCH NEGATIVE:

ISSUER: Solano Irrigation District, Calif.
        $24.91 million bonds (Monticello Power Project)

ISSUER: Yuba County Water Agency, Calif.
        $85.14 million bonds (Yuba River Development Project)

ISSUER: Nevada Irrigation District, Calif.
        $30.29 million bonds (Yuba-Bear River Development Project)

ISSUER: Placer County Water Agency, Calif.
        $53.83 million first-lien bonds (Middle Fork Project)

ISSUER: Oroville-Wyandotte Irrigation District, Calif.
        $35.84 million bonds (Sly Creek & South Fork Power Project)


PACIFIC GAS: Conserves Scarce Funds & Freezes Management Salaries
----------------------------------------------------------------
In its effort to fight bankruptcy amid increasing power prices,
Pacific Gas and Electric and Southern California Edison, decided
not to implement merit pay increases to management for and froze
their salaries at December 2000 levels, Reuters reports.  It is not
known whether the decision will affect the performance incentive
plan or bonus program for management employees.

The salary freeze, Reuters says, is expected to save less than $20
million.  The company has said that they might run out of money in
less than a month because under the 1996 deregulation law they
cannot recover soaring power costs from their customers.

The company has about 4,000 management workers and some 14,000
union employees.


PILLOWTEX, INC: Brings E&Y Aboard as Restructuring Advisors
------------------------------------------------------
Pillowtex Corporation and its debtor-affiliates ask Judge
Robinson for an Order authorizing the employment of E & Y Capital
Advisors LLC, formerly known as E&Y Restructuring LLC, an affiliate
of Ernst & Young LLP, as financial and restructuring advisors in
these Chapter 11 cases, and for approval of the proposed fee
structure.

Specifically, Pillowtex wants E&Y to:

(a) Advise the Debtors' management with respect to available  
    capital restructuring and financing alternatives, including
    recommending specific courses of action and assisting with the
    design, negotiation and implementation of alternative
    restructuring or transaction structures;

(b) Advise Management with respect to the development of their
    business and strategic plans, including financial projections
    and short-term liquidity forecasts;

(c) Advise Management with respect to the value of the Debtors'
    assets and operations;

(d) Advise Management with respect to the development of an
    appropriate capital structure for the Debtors' business;

(e) Assist Management in their discussions with, and in preparing
    proposals and other information for, the Debtors' creditors,
    employees, shareholders and other parties in interest in these
    Chapter 11 cases in connection with any restructuring
    transaction contemplated by the Debtors;

(f) Provide testimony, if required, with respect to any matter as
    to which E&Y is rendering services to the Debtors; and

(g) Provide such other financial and restructuring advisory
    services as the Debtors may request in these Chapter 11 cases.

Subject to the Court's approval and pursuant to the terms and
conditions of the engagement letter, E&Y intends to charge for its
professional services rendered to the Debtors in these Chapter 11
cases on the following terms:

(a) Advisory Fee. A monthly advisory fee of $150,000 per month
    (prorated for any partial month period);

(b) Transaction Fee. A transaction fee equal to 0.45% of the sum
    of the face amount of the Debtors' outstanding indebtedness
    (including all senior debt, secured debt, revolving loans, term
    loans, letters of credit, subordinated debt and convertible
    debt) that existed on the Petition Date, less 50% of the
    Monthly Advisory Fees earned by E&Y under the engagement letter
    and payable upon the earlier of (i) the effective date of a
    plan of reorganization of the Debtors under Chapter 11 of the
    Bankruptcy Code or (ii) the closing of a sale of significantly
    all of the Debtors' assets under the Bankruptcy Code; and

(c) The reimbursement of actual and necessary out-of-pocket  
    expenses incurred by E&Y in rendering services to the Debtors.

The Debtors or E&Y may terminate the engagement at any time, but in
any event the engagement letter will terminate upon the effective
date of a plan of reorganization of the Debtors under Chapter 11 of
the Bankruptcy Code. Upon termination of the engagement letter by
the Debtors, however, the Debtors will remain obligated to pay (a)
any accrued Monthly Advisory Fees as of the effective date of the
termination and (b) any Restructuring Transaction Fee owed in
accordance with the terms described above. In addition, the
engagement letter provides that all controversies arising from the
engagement letter must be brought in the Bankruptcy Court or the
District Court for the District of Delaware, should the reference
be withdrawn. Should either of these courts not retain
jurisdiction, any such controversy shall be subject to non-
binding and then binding mediation.

As part of the fee structure, the Debtors proposed that any
Restructuring Fee will be paid to E&Y as described above; provided,
however, that (a) the Restructuring Fee and the other fees and
expenses described above will be subject to approval of the Court
upon proper application by E&Y; (b) the Monthly Advisory Fees and
any other fees and expenses in addition to any Restructuring Fee
will be paid to E&Y only upon judicial approval or in accordance
with any other procedures for the compensation of professionals
established by the Court in these cases; and (c) any fees or
expenses paid to E&Y but not approved by the Court will be promptly
returned by E&Y to the Debtors.

Prior to the Petition Date, on November 3, 2000, the Debtors paid
$225,000 to E&Y as a retainer for services rendered or to be
rendered by E&Y. As of the Petition Date, all $225,000 of the
retainer remained unapplied. In addition to the retainer, the
Debtors have made a total of $1,788,108 in payments to E&Y within
the year immediately preceding the Petition Date.

Mr. Alan D. Holtz, a managing director of E&Y, averred on behalf of
the firm that it was a disinterested party within the meaning of
the Bankruptcy Code and had no interest adverse to the Debtors on
the matters for which employment was sought. However, in the
interests of full disclosure, Mr. Holtz stated that Jones, Day,
Reavis & Pogue, proposed counsel for the Debtors, Arthur Andersen
LLP, proposed business consultants for the Debtors, KPMG LLP,
proposed independent auditors and tax, accounting and compensation
advisors for the Debtors, and PricewaterhouseCoopers, accountants
for the Debtors' pre-petition bank lenders, have provided services
to E&Y in the past and continue to provide services to E&Y. E&Y has
likewise provided, and continues to provide, services to these
professionals. In addition, E&Y has provided, or continued to
provide services unrelated to the Debtors' estates to the following
parties having an interest in these Chapter 11 proceedings: Mike
Tierney, an officer of the Debtors, Paul G. Gillease, a director of
the Debtors through Galey & Lord, Inc., and Guilford Mills, Inc.,
and William B. Madden, another director, each of Apollo
Investment Fund III L.P. and affiliates, major shareholders of the
Debtors, Bank of America, Bank One, Texas, NA, Chase Manhattan
Bank, CIBC, Inc., CIT, Comerica Bank, Credit Lyonnais-NY Branch,
Finova Capital Corp., First Union National Bank, Fleet Bank NA,
General Electric Capital Corp., Guaranty Federal Bank and others.
However, such representations are on matters unrelated to these
estates or the Debtors in the areas for which employment is sought.
(Pillowtex Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


PILLOWTEX, INC: Look for Schedules & Statements in Late February
----------------------------------------------------------------
Pillowtex, Inc. seeks an order granting a further extension of time
for filing schedules and statements.  The debtors request an
extension through and including February 23, 2001 to file their
Schedules of Assets and Liabilities and Statements of Financial
Affairs.  The Company's efforts to complete the schedules and
statements have been hindered by the transition of the debtors'
finance and accounting functions and by year-end accounting tasks.
The debtors indicate that the US Trustee has not agreed on an
appropriate extension for the filing of schedules and statements.


PSEUDO PROGRAMS: Looking for Bids to Top $2 Million Offer
---------------------------------------------------------
              United States Bankruptcy Court
               Southern District of New York

In re:                       )      Chapter 11
PSEUDO PROGRAMS, INC.,       )      Case No. 00 B 14633 (ALG)
               Debtor.       )

     NOTICE OF (1) INTENDED AUCTION SALE OF SUBSTANTIALLY
      ALL OF THE DEBTOR'S ASSETS, INCLUDING VALUABLE REAL
    PROPERTY LEASES, FREE AND CLEAR OF ALL LIENS, CLAIMS,
    ENCUMBRANCES AND INTERESTS PURSUANT TO ASSET PURCHASE
      AGREEMENT, (2) DEADLINE FOR SUBMITTING OBJECTIONS,
       (3) PROCEDURES FOR SUBMITTING HIGHER AND BETTER
       OFFERS, AND (4) DEBTOR'S MOTION TO APPROVE THE
   SALE TO PURCHASER SUBJECT TO HIGHER AND BETTER OFFERS

TO ALL CREDITORS AND PARTIES IN INTEREST:

     PLEASE TAKE NOTICE that on January 24, 2001 at 10:00 a.m., or
as soon thereafter as counsel may be heard, a hearing (the "Sale
Hearing") will be held before the Honorable Allan L. Gropper,
United States Bankruptcy Judge, Alexander Hamilton United States
Custom House, One Bowling Green, New York, New York 10004, in a
courtroom to be determined, to consider the Motion (the "Motion")
of Pseudo Programs, Inc., debtor and debtor-in-possession herein
(the "Debtor"), for an order, pursuant to 11 U.S.C. Sections 363
and 365 and Rules 2002, 6004 and 6006 of the Federal Rules of
Bankruptcy Procedure, authorizing and approving an asset purchase
agreement (the "Agreement") between the Debtor and INTV, Inc., a
Delaware Corporation (the "Purchaser"), or a higher or better
bidder, for the sale of substantially all of the Debtor's assets
(excluding certain specified assets, including the Debtor's lease
of the 3rd floor only at 600 Broadway, New York, NY and its equity
interest in Space.com) free and clear of all liens, claims,
encumbrances and interests, with such liens, claim, encumbrances or
interests, to the extent valid, to attach to the proceeds of the
sale according to the priorities established by applicable law,
authorizing the assumption and assignment of certain executory
contracts and unexpired leases of the Debtor, and authorizing the
rejection of leases not assumed and assigned, in the Debtor's sole
discretion. Pursuant to the Agreement, the Purchaser has agreed to
pay a purchase price of $2,000,000.00 cash (the "Purchase Price").

     The Bankruptcy Court for the Southern District of New York has
issued an order dated December 22, 2000 (the "Order to Show Cause")
approving the form, manner and notice of the Motion, and scheduling
the Sale Hearing on the Motion, and a second order dated January 4,
2001 (the "Auction Order") scheduling an auction for January 18,
2001 at 10:00 a.m. at the offices of Debtor's counsel, Salomon
Green & Ostrow, P.C., 485 Madison Avenue, 20th Floor, New York, New
York 10022, approving certain bidding procedures, i.e., fixing
certain Auction Procedures, and approving a breakup fee for the
Purchaser. Copies of the Motion and its exhibits, the Order to Show
Cause and the Auction Order may be obtained electronically by
accessing the Court's website at: http://www.nysb.uscourts.gov.
Copies of the Motion and exhibits may also be obtained from the
undersigned upon written request.

     PLEASE TAKE FURTHER NOTICE that the Debtor is a privately-held
company, formed in 1994 to create a new form of entertainment media
-- fully interactive television via the Internet.  At one time, the
Debtor produced forty original shows every week, pursuant to which
the Internet audience could tune in to the show from a chat room
and interact not only with other audience members, but also with
the hosts and performers appearing onscreen. The Debtor has its
studio and its executive offices in New York City.

     As is more fully described in the Agreement, the Debtor is
selling or assigning substantially all of its assets, including its
studio and computer equipment; furniture and fixtures; trademarks,
trade names and other intellectual property; its interest in
certain executory contracts and unexpired leases (including leases
of real property); and all right, title and interest in all
software licenses utilized by the Debtor in its business to the
extent assignable (collectively, the "Acquired Assets").

     PLEASE TAKE FURTHER NOTICE that bidders interested in making
higher and better bids must adhere to the Auction Procedures
approved in the Auction Order. All parties interested in making
bids should contact the Debtor's brokers, Thomas Laczay, DJM Asset
Management, 445 Broad Hollow Road, Melville, New York 11747, (631)
752-1100 or Ken Ruderman, Julien J. Studley, 300 Park Avenue, New
York, New York 10022, or the Debtor's counsel, David M. Green,
Esq., Salomon Green & Ostrow, P.C., 485 Madison Avenue, New York,
New York 10022, (212) 319-8500.

     All bidders shall have and be deemed to have had the
opportunity to examine and review the Acquired Assets, the Auction
Procedures and the documents relating to the Acquired Assets prior
to making offers, and shall be deemed to acknowledge that they rely
solely upon their own independent review, investigation and
inspection of the documents and the Acquired Assets in making
offers. No bidder shall be entitled to make any claim against the
Debtor or the estate for such bidder's fees, expenses or costs or
to assert any claim that it is entitled to any payment or claim by
reason of its having made a bid or participated in the auction.

     PLEASE TAKE FURTHER NOTICE that all parties to the so-called
"Section 365 Assumed Rights" must file with the Court and serve
upon the Debtor's counsel at the address set forth below, a
statement of the amount, if any, necessary to cure any pre- or
post-petition default under the respective Section 365 Assumed
Right, including all available supporting documentation and
calculations, so as to be received no later than January 16, 2001
at 5:00 p.m. Any such party that fails to timely file and serve
such a statement will be deemed to have consented to the assignment
of its respective Section 365 Assumed Rights without the need to
cure arrearages, if any.

     PLEASE TAKE FURTHER NOTICE that all parties asserting a
security interest in any of the Acquired Assets are required to
file with the Court and serve upon the Debtor's counsel at the
address set forth below, a detailed statement of the nature of
their security interest, the specific statement of their
collateral, and proof thereof, so as to be received no later than
January 17, 2001 at noon. Any such party that fails to timely file
and serve such a statement will be deemed to have consented to the
transfer of the Acquired Assets free and clear of all liens, claims
and encumbrances and waived the right to assert any security
interest in the alleged collateral.

     PLEASE TAKE FURTHER NOTICE that objections, if any, to the
relief to be sought at the Sale Hearing, shall be served and filed
in accordance with the Local Bankruptcy Rules regarding electronic
filing, with a copy delivered to the chambers of the Honorable
Allan L. Gropper, and (a) Debtor's counsel, Salomon Green & Ostrow,
P.C., 485 Madison Avenue, New York, New York 10022, attn: David M.
Green, Esq.; (b) counsel to the Purchaser, Latham & Watkins, 885
Third Avenue, New York, New York 10022, attn: Roland S. Young,
Esq.; and (c) counsel to the Creditors' Committee, Winick & Rich,
P.C., 919 Third Avenue, New York, New York 10022, attn: Jeffrey
Rich, Esq., so as to be received no later than close of business on
January 19, 2001 (the "Objection Deadline"). If no objection to the
Motion is filed and served on or before the Objection Deadline, or
if no higher or better offer is timely made, the Court, in its
discretion, may cancel the Auction, approve the sale to the
Purchaser and grant all or any portion of the relief requested in
the Motion. The Court may further adjourn the Sale Hearing without
any further notice other than an announcement at the Sale Hearing.

Dated: New York, New York
       January 4, 2001
                           SALOMON GREEN & OSTROW, P.C.
                           General Bankruptcy Counsel to the Debtor
                           By: David M. Green, Esq. (DG-7206)
                               A Member of the Firm
                           485 Madison Avenue, 20th Floor
                           New York, New York 10022
                          (212) 319-8500


RELIANCE GROUP: S.D.N.Y. Temporarily Blocks Ichan's Tender Offer
----------------------------------------------------------------
The Honorable Alvin K. Hellerstein issued a temporary restraining
order after Reliance Group Holdings, Inc., filed suit against Carl
Ichan and High River LP to bring a tender offer for $40 million of
RGH's 9% Senior Notes to a halt.  Judge Hellerstein will convene a
hearing on Friday to consider entry of an injunction requested by
RGH.  Judge Hellerstein holds court in Courtroom 14D at the Daniel
Patrick Moynihan United States Courthouse, 500 Pearl Street in
Manhattan.  


SAFETY-KLEEN: Wants Okay to Pay Officer & Director Defense Costs
----------------------------------------------------------------
Safety-Kleen Corp. asks Judge Walsh for authority to pay, on behalf
of certain officers and directors, defense costs in pending or
threatened litigation.  The Debtors request only authority to pay
the defense costs, and do not seek authority to make any payments
in connection with any underlying liability. The Debtors stated
that the purpose of this Motion is to retain the continued loyalty
and morale of the Debtors' current officers and directors who have
been named or may be named as defendants in various litigations.

The law firms of Brobeck, Phleger & Harrison LLP, Brouchard,
Margules & Friedlander, and Nelson, Mullins, Riley & Scarborough
L.L.P. have been retained by certain of the current officers and
directors in connection with pending litigation against them. It is
estimated that the monthly fees for such representation is, and
will continue to be, approximately $50,000 unless a stay of the
actions is granted. The Debtors do not believe it is necessary to
retain these firms as professionals under the Bankruptcy Code
because their representation is for officers and directors, not the
bankruptcy estates.

Concurrently the Debtors have filed an adversary proceeding seeking
an injunction against the pending and threatened litigation. If an
injunction is granted, the amount requested to be paid under this
motion will be reduced. The Debtors believe it is of great
importance that the current officers and directors not be
distracted by litigation from their first priority: completion of
the Debtors' business plan and formulation of a plan or plans of
reorganization.

Even if the injunction is granted, the Debtors believe to the
extent that officers and directors have incurred defense costs, it
is equitable for the Debtors to advance these payments to alleviate
the financial burdens on these officers and directors who, the
Debtors believe, have valid defenses and have acted in good faith
and with the understanding that their defense costs would be borne
by the Debtors under their insurance policy.

The Debtors maintain that the current officers and directors should
not be simply left on their own to bear these costs. The Debtors'
by-laws provide indemnification to any person who is, or who is
threatened to be made, a witness or party to certain proceedings.
The indemnification provisions provide for payment of attorneys'
fees and costs when the person has acted in good faith and in a
manner he reasonably believed to be in, and not opposed to, the
best interests of the Debtors.

The Debtors alleged that no harm would be suffered by the
bankruptcy estates if these costs were advanced because payment of
these defense costs is without prejudice to the Debtors' ability to
make a claim or seek reimbursement of the defense costs through an
applicable insurance policy currently held by the Debtors with
National Union Fire Insurance Company of Pittsburgh, Pennsylvania.
The Debtors have already paid out sufficient monies to meet the
deductible under this policy and believe National Union is
obligated to meet the rest of these costs.

The Debtors have notified National Union of their position and made
demand for payment of these defense costs. However, National Union
has raised issues contesting its obligations to provide insurance
coverage under the policy, including an assertion that National
Union may rescind the policy, and that the pending litigation
asserts claims which predate the policy. The Debtors strongly
believe this is an attempt by National Union to shirk their
contractual responsibilities, but are attempting to amicably
resolve the matter with National Union. Until such time as this
dispute with National Union is resolved or litigated the Debtors
believe it is in the best interests of these estates to continue to
advance defenses costs as needed. (Safety-Kleen Bankruptcy News,
Issue No. 12; Bankruptcy Creditors' Service, Inc., 609/392-0900)


SERVICE CORPORATION: Plans to Dispose of 431 Properties
-------------------------------------------------------
Service Corporation International (NYSE: SRV), the world's largest
funeral and cemetery company, completed its comprehensive facility
review performed on its funeral and cemetery operations in North
America.

Robert L. Waltrip, Chairman and Chief Executive Officer, commented:
"In 2000, we communicated our Company's long-term strategy to focus
on internal growth within our Company's funeral and cemetery
businesses. Central to this internal growth strategy are our
initiatives to focus on customer satisfaction, prearranged funeral
sales and leveraging our unparalleled network through affinity
relationships and the continued development and implementation of
the Dignity Memorial(TM) Plan funeral packages and the Dignity
Memorial(TM) brand name. In December 2000, we completed a
comprehensive facility review of all of our funeral and cemetery
operations in North America. During this review, certain funeral
and cemetery operations were identified as not being well aligned
with our long-term growth strategy primarily because of their lack
of geographic proximity to the major population areas in North
America. While these operations are generating earnings and cash
flows, we determined it would be more prudent to hold these
operations for sale and use the net cash proceeds from such sales
to reduce our debt."

As a result of this facility review, the Company is planning to
divest 228 funeral locations anticipated to be sold as funeral
businesses, 203 funeral locations anticipated to be sold as real
estate due to their underlying real estate values exceeding their
funeral business values and 105 cemeteries. Included in the 203
funeral locations expected to be sold as real estate are 67 funeral
businesses that will be merged into other existing Company owned
funeral businesses. All locations being divested represent
approximately $150 million of revenues, $18 million of EBITDA,
34,000 funeral services performed and 12,000 interments performed
on an annual basis. These locations are geographically dispersed
throughout North America in 42 states and 3 Canadian Provinces.

The Company expects to receive net pretax cash proceeds of
approximately $200 to $250 million from the divestiture of all
these operations over the next 24 months. The net pretax cash
proceeds expected from selling the 228 funeral locations as funeral
businesses and the 105 cemeteries are based on a 5 to 7 times
multiple of EBITDA adjusted for non-recurring expenses and certain
overhead expenses historically allocated to these locations. The
net pretax cash proceeds expected from selling the 203 funeral
locations as real estate are based on current appraised values of
such real estate.

As a result of this plan to sell certain operations which will
generate losses, the Company will record in the fourth quarter of
2000 an expected pretax loss of approximately $425 to $475 million.
The remaining operations sold under this plan are expected to
generate pretax gains of approximately $60 to $75 million which
will be recognized in subsequent periods. These estimated pretax
losses and gains are calculated using the net assets of these
businesses prior to the implementation of SAB No. 101. As a result
of the implementation of SAB No. 101, the above estimated pretax
losses could be significantly lower than currently projected. The
Company is not able to estimate the implementation effect of SAB
No. 101 on each of these locations at this time. A more detailed
analysis of the implementation of SAB No. 101 is discussed later in
this release.

Mr. Waltrip added: "This plan to divest certain funeral and
cemetery operations in North America is consistent with our
internal revenue growth initiatives, our goal to increase cash flow
in our core businesses and our goal of continued debt reduction. On
an ongoing basis, the divestiture of these operations is projected
to be cash flow positive to our Company due to the reduction of
interest payments offsetting the loss of the annual cash flows
produced by these operations. While we substantially reduced our
debt in 2000, our goal over the next 24 months is to reduce our
debt to within the range of $2.0 to $2.5 billion and to improve our
recurring operating free cash flow from our funeral and cemetery
operations to approximately $200 to $250 million on an annual
basis. We are currently developing detailed plans to accomplish
these goals."

As a component of its comprehensive facility review in North
America, the Company examined all aspects of its operations in
conjunction with its internal growth strategy, including equity
investments in certain funeral home and cemetery operations. As a
result of this review, the Company has reduced the carrying value
through a non-cash charge in the fourth quarter of 2000 of its
equity investment in Arbor Memorial Services Inc. by approximately
$95 million on a pretax basis. The Company will seek to restructure
this equity investment in 2001.

The Company and other participants in the funeral and cemetery
industry are continuing discussions with the Securities and
Exchange Commission regarding the implementation of SAB No. 101,
"Revenue Recognition in Financial Statements." The implementation
of any changes in accounting policies required by SAB No. 101 will
not impact the cash flows of the Company. While the Company has
arrived at some preliminary conclusions with the SEC concerning
accounting practices within the funeral and cemetery industry, a
final agreement covering all material accounting practices has not
been reached with the SEC. As a result of the preliminary
conclusions reached with the SEC, the Company estimates the
implementation of SAB No. 101 will result in a one time, non-cash
charge of $800 to $950 million as of January 1, 2000 for the
cumulative effect of these accounting changes. The implementation
of these revised accounting practices will result in an additional
backlog of approximately $1.7 to $1.9 billion of deferred revenues
which will be recognized in future periods. The implementation of
these changes in accounting practices is also estimated to
negatively affect diluted earnings per share from operating results
for the year 2000 by approximately $.29 to $.37 per diluted share,
but as indicated above will have no cash flow affect on these
operating results. At the time the impact of implementing SAB No.
101 is reported for 2000, all quarterly financial results
previously reported in 2000 will be restated to reflect these
changes in accounting practices.

The non-cash charges recorded in the fourth quarter of 2000 as a
result of the Company's North America facility review and any
impact on the Company's financial statements as a result of the
implementation of SAB No. 101 will not have a material impact on
the Company's compliance with the covenants contained in the
Company's bank credit facility agreements. These agreements were
amended in November 2000 to give the Company the financial
flexibility to execute its strategic plan which includes the North
America facility review.


SHAMAN PHARMACEUTICALS: Case Summary
------------------------------------
Debtor: SHAMAN PHARMACEUTICALS, INC.
        213 E. Grand Ave.
        South San Francisco, CA 94080

Type of Business: Discovery, development and commercialization of
                  proprietary botanical dietary supplements as well
                  as novel pharmaceutical products
    
Chapter 11 Petition Date: January 5, 2001

Bankruptcy Case No.: 01-30035

Court: Northern District of California (San Francisco)

Judge: Thomas E. Carlson

Debtor's Counsel: Stephen D. Finestone, Esq.
                  Law Offices of Stephen D. Finestone
                  456 Montgomery St. 20th Fl.
                  San Francisco, CA 94104
                  415-421-2624


SUN HEALTHCARE: 15 Facility Transfers to Save $6.6 Mil Annually
---------------------------------------------------------------
Pursuant to the Court's authorization of Procedures for the
Disposition of Certain Healthcare Facilities and the Related Leases
and Provider Agreements, Sun Healthcare Group, Inc., sought and
obtained approval for the transfer of another 15 facilities, all
originally operated by SunBridge Healthcare Corporation:

(1) SunBridge Care and Rehabilitation Woodland Village, located in
    New Orleans, Louisiana

* Annual savings from transfer: $1,182,452
* Sales price of inventory: $0 - to be removed
* Lease rejection damage claim: $1,882,694
* Pre-petition employee claims: Debtors shall pay directly to
                                employees
* Landord: Health Care Capital of Louisiana, Inc.
* Proposed New Operator: LaSalle Bank National Association
* Effective Date: December 15, 2000
* Treatment of Medicare Provider Agreement: reject and terminate
* New Operator's Share of HCFA Global Settlement: 12,500

(2) SunBridge Care & Rehab for New Orleans a/k/a Easthaven Care
    Center, located in New Orleans, Louisiana

* Annual savings from transfer: $1,084,096
* Sales price of inventory: $0 - to be removed
* Lease rejection damage claim: $2,288,767
* Pre-petition employee claims: Debtors shall pay directly to
                                employees
* Landord: Health Care Capital of Louisiana, Inc.
* Proposed New Operator: LaSalle Bank National Association
* Effective Date: December 15, 2000
* Treatment of Medicare Provider Agreement: reject and terminate
* New Operator's Share of HCFA Global Settlement: $12,500

(3) SunBridge Care and Rehabilitation-Sycamore View (f/k/a Sycamore
    View Nursing Home), located in Memphis, Tennessee

* Annual savings from transfer: $681,702
* Sales price of inventory: $0 - to be removed
* Lease rejection damage claim: $1,938,068
* Pre-petition employee claims: Debtors shall pay directly to
                                employees
* Landord: Health Care Capital of Louisiana, Inc. as successor in
           interest to HCC of Tennessee, Inc.
* Proposed New Operator: LaSalle Bank National Association
* Effective Date: December 1, 2000
* Treatment of Medicare Provider Agreement: assume and assign
* New Operator's Share of HCFA Global Settlement: $12,500

(4) SunBridge Care and Rehabilitation for DeSoto, located in
    DeSoto, Texas

* Annual savings from transfer: $564,020
* Sales price of inventory: $5,000
* Lease rejection damage claim: $965,747
* Pre-petition employee claims: Debtors shall pay directly to
                                employees
* Landord: HCC/Park Manor, Inc.
* Proposed New Operator: HCC/Park Manor, Inc.
* Effective Date: December 1, 2000
* Treatment of Medicare Provider Agreement: reject and terminate
* New Operator's Share of HCFA Global Settlement: None

(5) SunBridge Care and Rehabilitation for Abbeville (f/k/a Heritage
    Manor of Abbeville), located in Abbeville, Louisiana

* Annual savings from transfer: $458,116
* Sales price of inventory: $0 - to be removed
* Lease rejection damage claim: $1,255,130
* Pre-petition employee claims: Debtors shall pay directly to
                                employees
* Landord: Health Care Capital of Louisiana, Inc.
* Proposed New Operator: LaSalle Bank National Association
* Effective Date: December 15, 2000
* Treatment of Medicare Provider Agreement: reject and terminate
* New Operator's Share of HCFA Global Settlement: $12,500

(6) SunBridge Care and Rehabilitation for Springhill
    (f/k/a Fountain View Nursing Home), located in Springhill,
    Louisiana

* Annual savings from transfer: $421,376
* Sales price of inventory: $0 - to be removed
* Lease rejection damage claim: $1,882,694
* Pre-petition employee claims: Debtors shall pay directly to
                                employees
* Landord: Health Care Capital of Louisiana, Inc. as successor in
           interest to HCC of Springhill, Inc.
* Proposed New Operator: LaSalle Bank National Association
* Effective Date: December 15, 2000
* Treatment of Medicare Provider Agreement: reject and terminate
* New Operator's Share of HCFA Global Settlement: $12,500

(7) SunBridge Care and Rehab for South Pittsburg, Tennessee

* Annual savings from transfer: $350,372
* Sales price of inventory: $0 - to be removed
* Lease rejection damage claim: $2,077,055
* Pre-petition employee claims: Debtors shall pay directly to
                                employees
* Landord: Health Care Capital of Louisiana, Inc. as successor in
           interest to HCC of Tennessee, Inc.
* Proposed New Operator: LaSalle Bank National Association
* Effective Date: December 1, 2000
* Treatment of Medicare Provider Agreement: assume and assign
* New Operator's Share of HCFA Global Settlement: $12,500

(8) SunBridge Care and Rehabilitation for Springhill (f/k/a
    Fountain View Nursing Home), located in Lake Charles, Louisiana

* Annual savings from transfer: $347,564
* Sales price of inventory: $0 - to be removed
* Lease rejection damage claim: $1,118,162
* Pre-petition employee claims: Debtors shall pay directly to
                                employees
* Landord: Challenge Homes, Inc.
* Proposed New Operator: Challenge Homes, Inc.
* Effective Date: December 15, 2000
* Treatment of Medicare Provider Agreement: reject and terminate
* New Operator's Share of HCFA Global Settlement: $20,000

(9) SunBridge Care and Rehabilitation for Springhill (f/k/a
    Fountain View Nursing Home), located in Springhill, Louisiana

* Annual savings from transfer: $421,376
* Sales price of inventory: $0 - to be removed
* Lease rejection damage claim: $1,882,694
* Pre-petition employee claims: Debtors shall pay directly to
                                employees
* Landord: Health Care Capital of Louisiana, Inc. as successor in
           interest to HCC of Springhill, Inc.
* Proposed New Operator: LaSalle Bank National Association
* Effective Date: December 15, 2000
* Treatment of Medicare Provider Agreement: reject and terminate
* New Operator's Share of HCFA Global Settlement: $12,500

(10) SunBridge Care and Rehabilitation for Belen, New Mexico

* Annual savings from transfer: $347,030
* Sales price of inventory: $0 - to be removed
* Lease rejection damage claim: $3,018,704
* Pre-petition employee claims: Debtors shall pay directly to
                                employees
* Landord: Health Care Capital of the Rockies, Inc.
* Proposed New Operator: LaSalle Bank National Association
* Effective Date: December 1, 2000
* Treatment of Medicare Provider Agreement: reject and terminate
* New Operator's Share of HCFA Global Settlement: $12,500

(11) SunBridge Care and Rehabilitation for Panola (f/k/Panola
     Nursing Home), located in Carthage, Texas

* Annual savings from transfer: $349,720
* Sales price of inventory: $0 - to be removed
* Lease rejection damage claim: $885,974
* Pre-petition employee claims: Debtors shall pay directly to
                                employees
* Landord: Health Care Capital of Louisiana, Inc. as successor in
           interest to HCC Enterprises of LA, Inc.
* Proposed New Operator: LaSalle Bank National Association
* Effective Date: December 1, 2000
* Treatment of Medicare Provider Agreement: reject and terminate
* New Operator's Share of HCFA Global Settlement: $12,500

(12) SunBridge Care and Rehabilitation for Jonesboro (f/k/a Jackson
     Manor Nursing Home) located in Jonesboro, Louisiana

* Annual savings from transfer: $238,062
* Sales price of inventory: $0 - to be removed
* Lease rejection damage claim: $756,769
* Pre-petition employee claims: Debtors shall pay directly to
                                employees
* Landord: Health Care Capital of Louisiana, Inc.
* Proposed New Operator: LaSalle Bank National Association
* Effective Date: December 15, 2000
* Treatment of Medicare Provider Agreement: reject and terminate
* New Operator's Share of HCFA Global Settlement: $12,500

(13) SunRise Care and Rehabilitation for Monterey (a/k/a Standing
     Stone Health Care Center), located in Monterey, Tennessee

* Annual savings from transfer: $149,732
* Sales price of inventory: $0 - to be removed
* Lease rejection damage claim: $1,217,038
* Pre-petition employee claims: Debtors shall pay directly to
                                employees
* Landord: Heritage Health Group, Inc.
* Proposed New Operator: LaSalle Bank National Association
* Effective Date: December 1, 2000
* Treatment of Medicare Provider Agreement: assume and assign
* New Operator's Share of HCFA Global Settlement: $12,500

(14) SunBridge Mission Manor Care and Rehabilitation, located in
     Albuquerque, New Mexico

* Annual savings from transfer: $79,318
* Sales price of inventory: $5,000
* Lease rejection damage claim: $1,485,093
* Pre-petition employee claims: Debtors shall pay directly to
                                employees
* Landord: HCC of Albuquerque, Inc.
* Proposed New Operator: HCC of Albuquerque, Inc.
* Effective Date: December 1, 2000
* Treatment of Medicare Provider Agreement: reject and terminate
* New Operator's Share of HCFA Global Settlement: None

(15) SunBridge Care and Rehabilitation for Pickett County (f/k/a
     Pickett County Nursing Home), located in Brydstown, Tennessee

* Annual savings from transfer: $27,898
* Sales price of inventory: $0 - to be removed
* Lease rejection damage claim: $780,484
* Pre-petition employee claims: Debtors shall pay directly to
                                employees
* Landord: Heritage Health Group, Inc.
* Proposed New Operator: LaSalle Bank National Association
* Effective Date: December 1, 2000
* Treatment of Medicare Provider Agreement: assume and assign
* New Operator's Share of HCFA Global Settlement: $12,500
(Sun Healthcare Bankruptcy News, Issue No. 17; Bankruptcy
Creditors' Servvice, Inc., 609/392-0900)


USA BIOMASS: Meeting of Creditors Scheduled for January 31
----------------------------------------------------------
A Chapter 11 bankruptcy case concerning the debtor USA BIOMASS
Corporation was filed on /December 8, 2000. Attorney for the debtor
is Alan Friedman of Marshack, Shulman & Hodges, LLP, Newport Beach,
CA. A meeting of creditors is scheduled for January 31, 2001 at
1:45 PM, 221 N. Figueroa St., Ste. 104, Los Angeles CA.


USA CAPITAL: Court Designates Nassau Asset to Work with Trustees
----------------------------------------------------------------
The United States Bankruptcy Court for the District of Colorado
accepted Nassau Asset Management (NAM) as the designated third-
party provider to work with the Trustees of USA Capital Holdings.
By doing so, the Court recognized that NAM has the experience and
expertise to assist the creditors in maximizing the value of the
accounts receivable they hold, and the leased equipment that is in
the field.

"We are gratified that the Court displayed such confidence in us,"
said Ed Castagna, Senior Vice President of NAM. "Bankruptcies like
these are unfortunate events, but we have the resources and market
sensitivity to enable the creditors to come as close to being made
whole as is possible. NAM has national scale, and is a trusted
resource for buyers nationwide; our state-of-the-art Website is an
additional distribution platform for the leased portfolio."

Nassau Asset Management -- http://www.nasset.com-- is a full-
service asset management company, handling every aspect of
collections, including recovery, equipment remarketing and
appraisals. For over 26 years, we have proved that responsiveness,
integrity and confidentiality can be primary values in the
secondary market.


WEST LUMBER: Universal Capital Handling 13 GOB Sales in 5 States
----------------------------------------------------------------
Universal Capital Partners, LLC, a Minneapolis-based retail
consulting and liquidation firm, confirmed on January 5, 2001 that
it has been retained by West Lumber Company to conduct going out of
business sales for 13 West Lumber retail stores in five states.

West Lumber has operated successfully for more than 100 years,
first as an independent regional lumber mill until the 1940s, and
then as a leading retailer of building and home improvement
supplies. At its peak, the Company operated as many as 72 retail
outlets and employed more than 3,000 associates in ten states.
Unfortunately, hard times have befallen West Lumber, as have many
independent retail chains, as a result of stiff competition from
formidable global competitors with stronger purchasing
power and the ability to leverage fixed costs across a broader
sales base. In the case of West Lumber, those competitors include
Lowe's Home Improvement Warehouse and The Home Depot, which
collectively operate more than 1,300 retail outlets.

With the assistance of Universal Capital Partners, West Lumber
began evaluating its retailing strategy and closing unprofitable
stores in late 1997 and has since closed its Georgia locations in
Athens, Cartersville, Stone Mountain and its W.D.S. (Atlanta)
stores. As of June 2000, the number of West Lumber employees had
declined to 1,800 and the number of stores to 31, including
locations in Alabama, Louisiana, Florida, Georgia, Mississippi
and North Carolina. The Company currently maintains its corporate
headquarters in Atlanta and operates a warehouse/ distribution
center in Plainville, Georgia.

Mike Catain, UCP President and Chief Executive Officer, said, "It's
very unfortunate when a retailer like West Lumber, with a rich
history spanning more than 100 years, has to cease some of its
operations. It is a challenge for independent regional chains to
successfully compete with the global retail giants during a robust
economic period, much less during an economic slowdown precipitated
by higher interest rates and rising energy prices. However, our job
is to assist West Lumber in returning its remaining business to
profitability, while treating its employees with the highest
regard in obtaining new employment. Our management team, with years
of merchandising experience, has strong capabilities in valuing and
liquidating inventory in a very cost-effective manner, thereby
maximizing the proceeds for our clients. Yet, at the same time, we
offer great discounts to bargain conscious shoppers and we provide
tremendous job placement assistance to employees at the closing
stores. In short, we are proven experts in the retail consulting
industry."


WHEELING-PITTSBURGH: DIP Financing Pact Meets Resistance
--------------------------------------------------------
Donald M. Robiner, the United States Trustee for Ohio/Michigan
Region 9, through his counsel Andrew R. Vara, Esq., objects to
entry of a final order authorizing Wheeling-Pittsburgh Corporation
and its debtor-affiliates to obtain post-petition secured
superpriority financing and entry into a receivables termination
agreement. The U. S. Trustee objects on each of the following
bases:

(1) The interim financing order contains no procedures providing
    for judicial review and approval of the fees and expenses to be
    charged by Citibank which include "professional" fees. The
    Bankruptcy Code does not authorize immediate payment of fees
    and other charges to a creditor who may be oversecured by the
    value of underlying collateral. Such amounts are only to be   
    added to any outstanding prepetition claim. The U.S. Trustee
    asked that the Court establish a procedure for presentation
    and payment of Citibank's expenses as part of any final order.

(2) The Interim Order extends various benefits and remedies to
    Citibank which would, if approved, strip the trustee in any
    subsequent Chapter 7 case from:

     (i) receiving payment of fees and expenses ahead of Chapter 11
         costs;

    (ii) surcharging the Bank's collateral for necessary costs;

   (iii) obtaining emergency funds;

    (iv) reviewing or challenging any claim or right to payment
         asserted by Citibank; or

     (v) contesting payment of Citibank's claims.

The U. S. Trustee asserted that there is no statutory basis in the
Bankruptcy Code for binding a non-party Chapter 7 trustee as a
condition of extending post-petition credit or granting adequate
protection to a secured lender. If approved a Chapter 7 trustee
would be unable to carry out his or her fiduciary functions because
of a lack of certainty that the trustee would or could ever be
compensated. The Interim Financing Order, the U. S. Trustee told
the Judge, "abrogates the priority distribution scheme established
by Congress".

The Official Committee of Unsecured Noteholders, represented by
Lawrence Handelsman, Esq., at Stroock, Stroock & Lavan, objects to
entry of a final Order on these grounds:

The first basis for the Committee's objection is that the DIP
Credit Facility is to be secured by all of the assets of the
Debtors, including inventory and accounts receivable, which were
already subject to security interest, but also by heretofore
unencumbered property, plant, machinery and equipment. This
previously unencumbered collateral includes assets of WPC such as
WPC's interests in Wheeling-Nisshin and OCC. The Committee believes
that, after entry of the Interim Order, the Debtors have
consummated the borrowings under the DIP Credit Facility,
have terminated the prepetition receivables facility, and have
repaid the borrowings under the Prepetition Credit Agreement. This
pledge of previously unencumbered assets is made to the detriment
of WPC's creditors without any realistic consideration in return.

The Committee also objects to the termination of the WHX obligation
to maintain a $10 million liquidity level at WPSC, essentially in
return for giving its guaranty; however, WPX has received secured
subrogation rights, thus improving its position at the expense of
unsecured creditors. WHX ha also been given the right to setoff
amounts it owes to WPC against its obligations under the guaranty
of the DIP Credit Facility without regard to the requirement of
mutuality, once again improving its position at the expense of WPC.
Finally, the DIP Credit Facility limits the Carve-out for
professionals to one official creditors' committee, despite the
fact that the United States Trustee has appointed two committees.
(Wheeling-Pittsburgh Bankruptcy News, Issue No. 4; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


XEROX: Art Newman and The Blackstone Group Arrive on the Scene
--------------------------------------------------------------
Speculation about a bankruptcy filing was fueled after the New York
Post ran an article saying that Xerox Corp. has hired The
Blackstone Group as an advisor.  An unnamed investor with knowledge
of the bankruptcy business told Robert Klow at the Post that hiring
Art Newman, head of Blackstone's bankruptcy practice, was an
ominous move.  "I don't know if he's ever done a restructuring
outside a bankruptcy," the unnamed investor said.

Reuters placed a call to Xerox yesterday seeking comment.  "Xerox
has no plans to file for bankruptcy," Xerox spokeswoman Christa
Carone told Reuters.  "As we said last month, Xerox as of December
20 has $1.4 billion of cash on hand," Ms. Carone contiued. "We
believe our liquidity remains sufficient to meet our current and
anticipated needs.

"It is commonly known that Xerox has engaged a number of advisors,
including Blackstone, as general financial advisors."  Ms. Carone
declined to elaborate.


* Meetings, Conferences and Seminars
------------------------------------
January 9-14, 2001
   LAW EDUCATION INSTITUTE, INC.
    National CLE Conference on Bankruptcy Law
     Marriott, Vail, Colorado
      Contact: 1-800-926-5895 or www.lawedinstitute.com

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

February 25-28, 2001
   NORTON INSTITUTES ON BANKRUPTCY LAW
    Norton Bankruptcy Litigation Institute I
     Marriot Hotel, Park City, Utah
      Contact: 770-535-7722 or Nortoninst@aol.com

February 28-March 3, 2001
   TURNAROUND MANAGEMENT ASSOCIATION
    Spring Meeting
     Hotel del Coronado, San Diego, CA
      Contact: 312-822-9700 or info@turnaround.org

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

March 28-30, 2001
   RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC.
    Healthcare Restructurings 2001
     The Regal Knickerbocker Hotel, Chicago, Illinois
      Contact: 1-903-592-5169 or ram@ballistic.com

March 29-April 1, 2001
   NORTON INSTITUTES ON BANKRUPTCY LAW
    Norton Bankruptcy Litigation Institute II
     Flamingo Hilton; Las Vegas, Nevada
      Contact: 1-770-535-7722 or Nortoninst@aol.com

April 19-21, 2001
   ALI-ABA
    Fundamentals of Bankruptcy Law
     Pan Pacific Hotel, San Francisco, California
      Contact: 1-800-CLE-NEWS

April 26-29, 2001
   COMMERCIAL LAW LEAGUE OF AMERICA
    71st Annual Chicago Conference
     Westin Hotel, Chicago, Illinois
      Contact: Comlawleag@aol.com

May 17-18, 2001
   RENAISSANCE AMERICAN MANAGEMENT & BEARD GROUP, INC.
    Bankruptcy Sales & Acquisitions
     The Renaissance Stanford Court Hotel,
      San Francisco, California
       Contact: 1-903-592-5169 or ram@ballistic.com

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

June 28-July 1, 2001
   NORTON INSTITUTES ON BANKRUPTCY LAW
    Western Mountains, Advanced Bankruptcy Law
     Jackson Lake Lodge, Jackson Hole, Wyoming
      Contact: 770-535-7722 or Nortoninst@aol.com

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

                           *********

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
conferences@bankrupt.com.

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles available
from Amazon.com -- go to
http://www.amazon.com/exec/obidos/ASIN/189312214X/internetbankrupt
-- 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
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained herein
is obtained from sources believed to be reliable, but is not
guaranteed.

The TCR subscription rate is $575 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are $25
each.
For subscription information, contact Christopher Beard at 301/951-
6400.

                     *** End of Transmission ***