TCR_Public/010116.MBX          T R O U B L E D   C O M P A N Y   R E P O R T E R

            Tuesday, January 16, 2001, Vol. 5, No. 11


AIR CANADA: Moody's Downgrades Long-Term Senior Debt To B1
ALLIANCE LAUNDRY: S&P Places Low-B Credit Ratings on Watch
ALLOY WHEEL: Canadian Wheelmaker Shutters Barrie Plant
ARMSTRONG HOLDINGS: Hires Buchanan Ingersoll as Corporate Counsel
ARYAN NATION: Compound to be Sold via

BENNINGTON COLLEGE: Moody's Sees Improvements But Holds B2 Rating
BTI TELECOM: S&P Hangs Junk Rating on Senior Unsecured Debt
BURLINGTON INDUSTRIES: Moody's Stops Debt Downgrades at Low-B
BUSINESSMALL.COM: Involuntary Petition Dismissed, But Shuts Down
CONCORD-ASSABET: Moody's Assigns B2 Debt Rating

CYBERBUCK CORP.: Files Chapter 7 Petition in Santa Ana
DE V&P: Taps Newmark to Orchestrate Adrienne Vittadini Asset Sale
EMPIRE DISTRICT: Moody's Reviews Electric Utility for Downgrade
EXIDE CORP: S&P Takes Negative View After Looking at Sears Fiasco
GOVWORKS INC: Files for Chapter 11 Protection in New York

GOVWORKS INC: Case Summary & 20 Largest Unsecured Creditors
HARNISCHFEGER INDUSTRIES: Strikes Back at State of Wisconsin
HILLCREST HEALTHCARE: HSR Waiting Period Catches Moody's Attention
ICG COMMUNICATIONS: Wants to Continue Employee Retention Program
JCC HOLDING: Files Disclosure Statement with Creditor Support

LERNOUT & HAUSPIE: Court Allows Vendors to Supply Goods & Services
LEVI STRAUSS: $500 Million 7-Year Rated Take S&P's BB- Rating
LEVI STRAUSS: $500 Million 7-Year Rated Take Moody's Ba3 Rating
LOEWEN GROUP: Roundtree-Bowen-Taylor Selling Assets for $300,000
LOEWS CINEPLEX: Prepares for Chapter 11 Filing This Week or Next

LTV CORPORATION: Representative Kucinich Appears as Amicus Curiae
PACIFIC GAS: Bankruptcy Risk Increases as Liquidity Contracts
PACIFIC GAS: Moody's Junks Ratings on Preferred Issue
PEP BOYS: Moody's Lowers Senior Implied Rating to B1
PILLOWTEX CORPORATION: Asks for More Time to Decide on Leases

SAFETY-KLEEN: Ryder Wants Immediate Decision on Ecogard Agreement
SUN HEALTHCARE: Consents to Modification of Stay for Insured Claim
TYSON FOODS: Moody's Favors IBP Acquisition But Notes Credit Risks
TWA: Taps Into AMR-Backed DIP Facility Without a Moment's Delay
WHEELING-PITTSBURGH: Retains Kirkpatrick as Environmental Counsel


AIR CANADA: Moody's Downgrades Long-Term Senior Debt To B1
Moody's Investors Service downgraded Air Canada, Inc.'s long-term
debt rating to B1 from Ba3. The outlook is stable. The downgrade
concludes Moody's rating review and reflects Moody's concern that
the combined effects of a potentially weaker business environment
during 2001, capital investment requirements and the ongoing
financial and operating risks associated with the company's
acquisition of Canadian Airlines will result in lower debt
protection measurements for the intermediate term. The rating is
supported by Air Canada's premier position in Canada's airline
industry, its increasingly strong route structure, it's
affiliation with the Star Alliance which has provided financial
support, and the relatively efficient integration of Canadian
Airlines achieved thus far.

Rating affected are:

     * Senior Implied Rating to B1 from Ba3

     * Revolving Credit Facility to B1 from Ba3

     * C$175 million 6.75% Debentures due 2004 to B1 from Ba3

     * DM200 million 6.625% Eurobonds due 2005 to B1 from Ba3

     * DM250 million 7.125% Eurobonds due 2001 to B1 from Ba3

     * SwFr200 million 5.75% Perpetual Subordinated Bonds to B1
       from Ba3

     * US$300 million Series A floating rate Euronotes due 2005 to
       B1 from Ba3

     * US$ 5.7 million Industrial Revenue Bonds, Series 1994 due
       2014 to B1 from Ba3

The ratings downgrade reflects the stress placed on debt
protection measures as a result of increasing costs and the
prospect for weak revenues in the intermediate term. Air Canada
has seen its costs increase substantially since the acquisition of
Canadian Airlines. Some of this cost increase is due to the rising
cost of fuel. However, increased staffing to implement the
integration of Canadian Airlines and a series of one time costs
associated with the merger have negatively impacted earnings. Air
Canada has indicated that it has already incurred approximately
half of the anticipated integration costs. The company anticipates
approximately C$700 million per annum of integration synergies but
to date much of this benefit has been offset by higher fuel costs.
Despite recent fare increases, Moody's anticipates that the weak
economy, higher fuel costs, higher interest and lease expenses and
the full cost of the integration of Canadian will constrain Air
Canada's earnings and cash flow throughout 2001 and perhaps into

Air Canada has, as part of its equipment rationalization plans,
announced the addition of 14 Airbus aircraft to its fleet. Funding
has been arranged but their addition results in continued high
lease adjusted leverage for the intermediate term. With
expectations for internally generated cash flow and orders for the
additional aircraft, it is Moody's expectation that leverage will
remain at its present level or increase in the near term.

During 2000, Air Canada's defense of its independence in the face
of an unsolicited takeover bid and its subsequent acquisition of
Canadian Airlines placed strains on the company's debt protection
measures from three quarters. First, Air Canada, as part of its
defense, repurchased C$1.1 billion of its own stock, reducing book
net worth to approximately C$736 million as of September 30, 2000.
Second, the company incurred substantial additional on and off
balance sheet debt to accomplish the stock buyback and the
acquisition. The result is an adjusted debt to adjusted capital
ratio of approximately 93% as of September 30, 2000 compared to
approximately 82% as of the same date in 1999. Lastly, cash flow
coverage ratios have deteriorated due to increased costs
associated with the integration of Canadian Airlines and the
higher level of debt. While, one time expenses are partially
responsible for lower levels of cash flow protection, coverage,
adjusted for these costs, remains weak and Moody's anticipates
that expenditures related to the integration will continue to
constrain this measure of debt protection.

In Moody's opinion, Air Canada will benefit from increasingly
efficient asset utilization and its enhanced route structure as
the integration of Canadian Airline's routes, staff and equipment
is implemented. After an initial period of uncertainty, the
integration has been remarkably smooth by historic airline
standards with deadlines met without significant passenger

In its position as Canada's largest airline, the company will have
the benefit of not only its extensive route network within Canada
but a strong and growing international route system as well.
International flying has been expanded in the US and the Pacific
using resources made available from the rationalization of the
company's newly combined domestic operations. Membership in the
Star Alliance and a bilateral agreement with Delta Airlines, Inc.
will provide Air Canada with code sharing and access to major hubs
in the US and globally. However, Moody's believes that such a
strong position of dominance is a mixed blessing and will require
the company to moderate its pricing policies. For example, during
2000, the year of the acquisition and initial integration of Air
Canada, the company held domestic fares unchanged in the face of
increased fuel costs in order to not "abuse" its industry
position. Moody's believes there will be subtle but significant
ongoing demands on the company to keep fares low order to serve a
broader role in Canadian society. These demands could, over time,
lead to a less than optimal return on assets.

Air Canada based in Saint-Laurent, Quebec, is Canada's largest

ALLIANCE LAUNDRY: S&P Places Low-B Credit Ratings on Watch
Standard & Poor's placed its single-'B'-plus corporate credit
rating and bank loan rating, and single-'B'-minus subordinated
debt rating for Alliance Laundry Systems LLC on CreditWatch with
negative implications.

Total debt as of Sept. 30, 2000 was about $340 million.

The CreditWatch placement reflects Alliance Laundry Systems'
weaker-than-expected operating performance and increased debt
levels resulting from the March 2000 acquisition of Ajax, the
pressing and finishing equipment division of American Laundry
Machinery Inc. The current rating incorporated a modest decline in
fiscal 2000 revenue due to the discontinuation of the consumer
laundry business in September 1999, partially offset by the
implementation of a price increase, the introduction of a new
product line, organic growth, and the contribution of Ajax.
However, fiscal 2000 revenues, operating earnings, and credit
measures will likely be below Standard & Poor's expectations.

Standard & Poor's will continue to monitor developments and meet
with Alliance Laundry's management to discuss its ongoing business
and financial strategies.

Alliance Laundry is a leading manufacturer and marketer of stand-
alone commercial laundry equipment in North America to three
distinct customer groups: laundromats, multi-housing laundries,
and on-premise commercial laundries, Standard & Poor's said.

ALLOY WHEEL: Canadian Wheelmaker Shutters Barrie Plant
Alloy Wheels International (Canada) Ltd. shut down and handed
layoff notices to hundreds of workers last week as the company
seeks to restructure under bankruptcy protection. The plant in
Barrie, Ontario, the Financial Post and other Canadian news
sources report, employs about 505 workers producing aluminum
wheels and is one of the city's largest employers.  The shutdown
is temporary, news reports indicate.

AWIC is restructuring under Canadian federal bankruptcy protection
and presented a new business plan in an Ontario court yesterday
that would allow the company to continue its manufacturing
operations in Barrie.  On Dec. 15, AWIC obtained a court order to
stay legal proceedings against it until Jan. 15 and was authorized
to file a compromise plan for its creditors.

Last week, AWIC obtained a one-week extension of the court order
and will appear in court again Friday. "Discussions will be going
on during the week with the union, customers and creditors,"
spokesman Warren Weeks told the Post.

ARMSTRONG HOLDINGS: Hires Buchanan Ingersoll as Corporate Counsel
For more than one hundred years prior to the Petition Date,
Buchanan Ingersoll PC has served Armstrong Holdings Inc. as
general corporate and securities counsel, giving advice with
respect to corporate matters, securities disclosures and
reporting, divestitures, mergers and acquisitions, and counseling
the Board of Directors with regard to fiduciary duties, decision-
making and corporate governance, general corporate tax, ERISA and
employee benefit plans, and on Pennsylvania legal issues

The Debtors ask the Bankruptcy Court for authority to continue
that relationship with Pittsburgh-based Buchanan Ingersoll as
outside corporate and Pennsylvania counsel to the Debtors.

JoEllen Lyons, Esq., a member of Buchanan Ingersoll, avers that
the Firm has no interest adverse to the Debtors or these estates
on the matters for which approval of employment is sought. While
the firm does not represent any party interested in these estates
in any matters connected or related to these Chapter 11
proceedings, the firm has represented, or continues to represent,
certain parties such as Bank of America, Chase Manhattan Bank,
Citibank, Deutche Bank, Donaldson Lufkin & Jenrette Securities,
First Union National Bank, Fleet Capital Corporation, and others.

The standard hourly rates of the principal counsel expected to
work for the Debtors is:

          V. C. Deluzio      $ 415
          S. W. Johnson      $ 350
          G. R. Walker       $ 275
          J. E. Lyons        $ 275
          G. L. Cass         $ 305
          S. Yorsz           $ 325
          S. H. Kline        $ 330
          V. L. Archer       $ 255
          B. S. Novesel      $ 160
          R. G. Kress        $ 145

Other attorneys and paralegals may work for the Debtors from time
to time.

Within one year prior to the Petition Date, Buchanan Ingersoll
received from the Debtors and their affiliates approximately
$2,186,805.32 for services rendered and expenses incurred. As of
the Petition Date, the Debtors were obligated to Buchanan
Ingersoll for unpaid fees in the amount of approximately $4,500.
(Armstrong Bankruptcy News, Issue No. 3, Bankruptcy Creditors
Service Inc, 609/392-0900)

ARYAN NATION: Compound to be Sold via
The 20-acre Aryan Nation Compound in Northern Idaho will be sold
at public auction through the Bankruptcy Court on Feb. 13,
according to a Elsasser Jarzabek Anderson Marks & Elliot Chtd.
press release. Rev. Richard Butler, the Aryan Nations' leader,
filed for bankruptcy in October after a mother and son obtained a
$5.8 million judgment against Butler and the Aryan Nations'
church. The judgment was the result of an assault that took place
adjacent to the compound. The property, which includes Butler's
interest in the Aryan Nations name, will be sold by chapter 7
trustee and past ABI president Ford Elsaesser. The property will
be listed on the joint ABI/National Association of Bankruptcy
Trustees web site at (ABI 12-Jan-

BENNINGTON COLLEGE: Moody's Sees Improvements But Holds B2 Rating
Moody's Investors Service has affirmed a B2 rating on Bennington
College's $8.2 million of Series 1999 Revenue Bonds issued through
the Vermont Educational and Health Buildings Financing Agency
(VEHBA). The credit outlook is stable.

Moody's has been informed that the College has settled its last
remaining lawsuits stemming from the 1994-95 college restructuring
that included, among other things, the termination of more than 20
faculty. The cost of the settlements totals approximately $1.9
million, the large majority of which will be paid by the College's
insurer resulting in a relatively minor impact on the College's
thin cash reserves. We expect the settlement will have a
stabilizing influence on Bennington's credit position. Currently
the College is facing no outstanding lawsuits. The B2 rating and
stable outlook are based on the College's:

     -- Recovering student demand, following sharp declines in    
        enrollment earlier this decade;

     -- Likely gains in market position generated by new student
        residence construction;

     -- Limited financial reserves and continued heavy reliance on
        philanthropic support to cover annual operating costs.

The stable outlook on the rating anticipates continued progress
toward enrollment stabilization combined with no significant
deterioration in operating performance. Elimination of all pending
lawsuits will also have a stabilizing effect.

KEY FACTS (Fall 2000 or Fiscal Year 2000 data):

     Total Enrollment: 631 students
     Freshman Selectivity: 65.9%
     Freshman Matriculation: 35.8%
     Net Tuition Per Student: $18,287
     Total Debt: $12.7 million
     Expendable Resources to Debt: -0.2 times
     Expendable Resources to Operations: - 0.2 times
     Total Resources per Student: $10,169
     Operating Margin: - 3.4%
     Return of Net Assets: 14.4%

BTI TELECOM: S&P Hangs Junk Rating on Senior Unsecured Debt
Standard & Poor's has lowered corporate credit, senior unsecured,
and senior secured bank loan ratings on BTI Telecom Corp. The
ratings remain on CreditWatch with negative implications, where
they were placed on Sept. 13, 2000.

The ratings downgrade reflects Standard & Poor's concerns
regarding near-term liquidity issues, since the company does not
yet have funding it needs to support its business plan.

The ratings remain on CreditWatch because, if the company does not
receive additional funding in the very near term, they will be
downgraded further. At Sept. 30, 2000, BTI's cash balance was $6

The unsecured debt rating is two notches lower than the corporate
rating because the amount of priority obligations as a percentage
of asset valuation exceeds 30%. The bank loan rating is one notch
higher than the corporate credit rating because, under Standard &
Poor's simulated default scenario, the resulting asset valuation
should be sufficient to provide full recovery of the outstanding
approximately $90 million of secured bank debt.

BTI Telecom is a facilities-based, integrated communications
provider, serving primarily small and medium-size business
customers in the southeastern United States.

As of September 30, 2000, total debt outstanding was about $316

In order to diversify its revenue mix and offset price declines in
the wholesale and retail long-distance segments, the company has
been bundling voice and data products. In addition, BTI Telecom
has accelerated the pace of its infrastructure expansion to
support the facilities-based provisioning of its services. During
the third-quarter 2000, approximately 41% of the company's 115,000
access lines in service were on-switch. Consequently, gross margin
has increased to 39% in the third-quarter 2000, from 37% in the
first quarter. In addition, BTI has successfully negotiated an
amended interconnection agreement with BellSouth
Telecommunications Inc., which allows BTI to provide local service
over an unbundled network-element platform. This amendment should
provide the opportunity for future margin improvements. However,
because of the expansion of its fiber-optic network, which totaled
about 3,800 route miles at Sept. 30, 2000, and increased marketing
and staff costs associated with new sales offices and new
products, EBITDA remained negative in the third quarter. EBITDA
coverage of interest expense could reach the one time area in
2002, Standard & Poor's said.

                              To                    From

   Corp. credit rating       CCC+/Watch Neg/--     B/Watch Neg/--
    Senior unsecured         CCC-                  B
    Senior secured BLR       B-                    B+

BURLINGTON INDUSTRIES: Moody's Stops Debt Downgrades at Low-B
Moody's Investors Service downgraded the debt ratings of
Burlington Industries Inc. The affected ratings include:

     * The 1988 amended and restated $600 million senior secured
       revolving credit facility due April 2003, downgraded from
       B1 to B3

     * $150 million issue of 7.25% senior unsecured debentures due
       2027, downgraded to Caa2 from B1

     * $150 million issue of 7.25% senior unsecured notes due
       2005, downgraded to Caa2 from B1

     * $100 million senior unsecured shelf registration rated to   
       (P) Caa2 from (P) B1

     * Senior implied rating was lowed to B3 from B1

     * Issuer rating was lowed to Caa1 from B1.

The ratings outlook is stable.

This concludes the rating review for possible downgrade that was
initiated on October 31, 2000.

The downgrade reflects the company's continued weak operating
performance in almost all of its business units; weak cash flow
generation coupled with very high leverage and weak interest
protection measurements; and a weak return on assets necessitating
further asset restructuring. Moody's is concerned about the
company's ability to meet all of its fixed charge obligations in
2001, including a scheduled $75 million commitment reduction, due
to the risks associated with slowing consumer consumption as well
as any shortfall in planned cash generation from announced

The B3 rating on the secured bank facility incorporates the
benefits of the collateral package in a distressed scenario. As
the total secured debt (including the $225 million accounts
receivable purchase facility) represents the preponderance of the
capital structure, the bank loan was not notched up from the
senior implied rating.

The downgrade of the senior unsecured notes reflects both the
effective subordination to all secured lenders as well as the
potential severity of loss to the note holders in a distressed

The credit agreement dated September 30, 1988, was amended and
restated on December 5, 2000. The facility now consists of a 2.5-
year, $600 million revolving credit that is guaranteed by all
domestic subsidiaries. The security will be evidenced by a first-
priority, perfected lien on substantially all of the assets of
Burlington, including all inventory, property, plant and
equipment, and the stock of its domestic subsidiaries and 65% of
foreign subsidiaries. The security package excludes accounts
receivable securing the Receivables Purchase Facility due December
2002. The credit facility requires two commitment reductions of
$75 million on September 30th of both 2001 and 2002. The proceeds
of the facility were used to refinance existing bank debt in the
US and in Mexico.

At fiscal year end September 30, 2000, the company's leverage was
very high, at 20.8 times EBITA before restructuring charges (or
8.2 times EBITDA), and interest protection measurements (excluding
depreciation) were below 1 times. Further, return on assets as
measured by EBITA to Total Assets, for fiscal 2000 was well below
the industry average. Adjusted for the $463 million goodwill
write-off in the 4th quarter, the EBIT return on assets in fiscal
2000 was only 2.4%, down from a weak 4.1% a year ago.

Even though the extraordinary charge recorded in the 4th quarter
2000 severely impacted the fiscal quarter and the full year 2000
financial results, Moody's believes that earnings improvements
from the year 2000 restructurings may not impact the company's
earnings immediately. Industry-wide challenges and overall
economic conditions may hinder the company's turnaround. Moody's
concerns also include Burlington's ability to meet its fixed
charge coverage this year (inclusive of rents and the current
portion of the long-term debt). The company's future earnings and
cash generation are dependent upon the company's achievement of
its operating goals which include improved segment performance,
lower working capital needs, anticipated receipts from potential
asset divestitures, and debt reduction.

Burlington Industries, Inc., headquartered in Greensboro, North
Carolina, is one of the largest and most diversified soft goods
manufacturers in the world.

BUSINESSMALL.COM: Involuntary Petition Dismissed, But Shuts Down
Clearwater, Florida-based, Inc, (OTCBB:BMAL)
announced that the United States Bankruptcy Court has dismissed
the involuntary petition for relief under Chapter 11 of the US
Bankruptcy Code filed in September by ITS Billing and Damian
Freeman. The Company has also reached a separate settlement with
ITS Billing and Damian Freeman.

"This settlement is a strategic step taken by the Company as part
of its on-going efforts to restructure and ultimately strengthen
the Company," said John Scafidi, Chairman and CEO. "We believe
we'll be able to reposition BusinessMall to be a profitable and
competitive company well into the future. Under the release of the
bankruptcy petition, BusinessMall will be able to proceed with the
necessary steps in order to satisfy the interest of our

The Company also announced that it has discontinued its e-commerce
operations. "It has become apparent that the prospect for
profitability of a company engaged in the e-commerce industry is
not assured," stated Scafidi.  "Our intentions are to put the
focus back on telecommunications. The decision to shut down our
Internet business was difficult, however, we feel that changing
our focus at this time will protect the interest of our many
shareholders and should ensure that our business has an
opportunity to develop and move forward."

CONCORD-ASSABET: Moody's Assigns B2 Debt Rating
Moody's Investors Service has downgraded Concord-Assabet Family
and Adolescent Services' (now known as Concord Family and Youth
Services, Inc. (CFYS)) debt rating to B2 from Ba2. In conjunction
with the rating revision, CFYS's B2 rating is placed on Watchlist
for further possible downgrade. This action affects $6.9 million
of Series 1998 bonds issued through the Massachusetts Development
Finance Agency. The downgrade and subsequent Watchlist action
follows a marked deterioration of the organization's financial
performance in fiscal years 1999 and 2000, which shows an
operating loss of $1.7 million and $1.9 million, respectively, and
a declined in the organization's already weak liquidity levels to
$1.2 million, or 37 days cash on hand. We believe these
significant changes have resulted in a much weaker risk profile,
prompting our rating revision and Watchlist action.

Moody's review will consider management's plans to reverse the
organization's operations and our assessment of the sustainability
of such improvements, address issues regarding tax-exempt status
of bonds following the sale of bond financed properties, and
assess the likelihood of obtaining external governmental support.
We expect to conclude our analysis within the next several weeks.

CYBERBUCK CORP.: Files Chapter 7 Petition in Santa Ana
Cyberbuck Corp., an online shopping fraud prevention company whose
former top executive turned out to be a convicted felon, announced
that it has filed for bankruptcy protection, according to a
newswire report.  The Santa Ana, Calif. start-up listed $150,000
in debts and no assets in its chapter 7 liquidation petition filed
in U.S. Bankruptcy Court in Santa Ana.

The company's chief executive, Tony Mazzamuto, resigned in June
after the firm's directors learned he had fabricated parts of his
background and failed to disclose two criminal convictions.

Backed by $1 million in private financing, Cyberbuck hoped to
sell consumers prepaid cards for online shopping, thus
safeguarding their regular credit. The company hired away staffers
from Western Digital Corp. and other well-established firms,
expanding to about 40 employees.

Once Mazzamuto's lies were exposed, however, the company
floundered.  The company ran out of cash before completing its web
site and Cyberbuck shut down on Dec. 1.  (ABI 11-Jan-2001)

DE V&P: Taps Newmark to Orchestrate Adrienne Vittadini Asset Sale
Newmark Retail Financial Advisors LLC has been retained as the
financial, restructuring and real estate advisor to de V&P, Inc.
in connection with a possible sale of its assets including the
sale of the Adrienne Vittadini name, trademarks and ten license

All the assets of de V&P Inc. will be offered for immediate sale
subject to Bankruptcy Court approval. The Trademark Assets will be
offered via an auction under Chapter 11 of the United States
Bankruptcy Code. The Company has entered into a contract to sell
the Trademark Assets for $8 million in cash, subject to higher or
better offers to qualified parties at an auction, and subject to
Bankruptcy Court approval. Bids for the Trademark Assets only,
with a minimum initial bid of $8.5 million are due no later than 4
p.m. EST on January 26. The auction date is scheduled for January
28 and a sale motion hearing for January 30.

Information on the assets involved in this action, including the
sale of certain leases at 234 West 39th Street, are available by
calling Robert Hellman, Senior Managing Director of Newmark Retail
Financial Advisors, at 212-372-2019.

Newmark Retail Financial Advisors LLC advises and represents
retailers, owners, lenders, creditors, debtors, and others in
mergers and acquisitions, restructurings, investments, and
financial and operational strategies affecting the retail industry
nationally. Newmark Retail Financial Advisors represents clients
on all retail financial matters including essential assets such as
real estate, inventory and accounts receivable, as well as
liability and risk management and operational assessment.

EMPIRE DISTRICT: Moody's Reviews Electric Utility for Downgrade
Moody's Investors Service maintained its review for possible
downgrade on the debt securities of The Empire District Electric
Company including the company's Prime-1 commercial papaer rating.
While the termination of the potenital merger with Utilicorp
United removes the potential negative impact on EDEC, the decline
is credit protection measures of the company warrant continued
review to determine whether the decline is permanent. Currently,
the cash flow coverage measures posted by the company are not
consistent with its rating category having fallen from around 4.0
times to just under 3.0 times. The deterioration in credit
measurers while a company is on review for downgrade is not
unusual espcially when a company is preparing to merge with a
lower-rated, more highly levered company. In the case of Empire
District the lovwer cash coverage of interest at the company seems
unrelated to the merger with Utilicorp and is related to increased
capital spending due to demand gowth in its service territory. The
review will focus on whether the costs being incurred by Empre
District will be recovered in rates and whether debt protections
measurers will improve as a result.

EXIDE CORP: S&P Takes Negative View After Looking at Sears Fiasco
Standard & Poor's affirmed its ratings on Exide Corp. and unit
Exide Holding Europe S.A. The outlook, however, is revised to
negative from stable.

The rating actions follow Exide's announcement that it is likely
to be indicted or required to enter into a plea agreement, which
could include a substantial fine, in connection with an
investigation by the U.S. Attorney for the Southern District of
Illinois into the company's past business relationship with Sears
Roebuck & Co.

The outlook revision reflects concerns that the outcome of this
investigation could reduce Exide's already-weak financial
flexibility, negatively affect its existing and future business
relationships, and prevent the company from achieving the
improvement in financial measures that is factored into the

Exide is a leading producer of automotive batteries and industrial
batteries in North America and Europe.

The ratings reflect the company's high level of financial risk,
offset somewhat by leading market positions and good geographic
diversity. Exide has achieved the leading market position through
a series of acquisitions, which have left the company highly
leveraged. Exide recently acquired GNB Technologies, a
manufacturer of automotive and industrial batteries in North
America, for $368 million ($333 million of which was paid in

The acquisition of GNB added about $1 billion to Exide's annual
revenue base and bolstered the company's business position by
giving it access to a new market (the industrial battery market in
North America) and new customers. The acquisition also increased
Exide's already-high financial risk. Exide's operating results
have been under pressure for the past several years due to
industry pricing tensions and costs associated with internal
restructuring activities and ongoing legal issues. Given the
company's depressed operating results and aggressive debt
leverage, cash flow protection measures have been very weak.
Adjusted for operating leases and accounts receivable sales and
nonrecurring items, debt to EBITDA was about 6 times (x) in fiscal
2000 (fiscal year ended March 31) and funds from operations (FFO)
to debt was less than 10%, which is weak for the rating category.

Credit protection measures are expected to remain weak in the near
term. Although Exide expects to achieve synergies in connection
with the integration of GNB, the company will incur various
charges and expenses to complete the integration. Moreover, Exide
has ongoing costs associated with restructuring actions of other
operations. In addition, the company faces significant legal
expenses, the prospect of a substantial fine, and declining
automotive original equipment demand. As a result, debt to EBITDA
is likely to remain elevated in the near term and to take some
time to approach 4x, which is more appropriate for the rating


The current ratings incorporate an expectation that credit
protection measures will improve from their depressed levels in
the next few years. Should it appear likely that business
pressures or legal expenses will prevent the company from
achieving the expected improvement, ratings could be lowered,
Standard & Poor's said.

     Exide Corp.
        Corporate credit rating                     B+
        Senior unsecured debt rating                B-
        Subordinated debt rating                    B-

     Exide Holding Europe S.A.
        Senior unsecured debt rating                B-

GOVWORKS INC: Files for Chapter 11 Protection in New York
The so-called E-government services portal, GovWorks Inc., filed
for Chapter 11 protection in Manhattan last week.  The Company
tells the Bankruptcy Court that it is a victim of the "growth-at-
any-cost craze" that ended many e-commerce ventures.  

GovWorks lists $8 million of assets in its petition available to
settle $40 million of debt.  In mid-November, press reports
relate, GovWorks reduced its staff to fewer than 60 people and
cut expenses in hopes of trimming its burn rate $1 million per

Dick Kelsey, writing for, Inc., relates that
business and information technology consulting firm American
Management Systems and emerging payment technologies developer
eOne Global LP on Wednesday disclosed plans to buy GovPay, the
transaction processing business of govWorks. Terms were not
revealed.  AMS and eOne signed a letter of intent for GovPay
because certain documents still need to be finalized by the
bankruptcy court. Last March AMS took an undisclosed equity stake
in govWorks, declining to release financial details of its
"significant minority position" in the company.

GOVWORKS INC: Case Summary & 20 Largest Unsecured Creditors
Debtor: GovWorks, Inc.
          384 Broadway
          New York, NY 10013

Type of Business: E-government services

Chapter 11 Petition Date: January 9, 2001

Court: Southern District of New York (Manhattan)

Bankruptcy Petition #: 01-10113-ajg

Judge: Arthur J. Gonzalez

Debtor's Counsel: Chester B. Salomon, Esq.
                  Nicholas F. Kajon, Esq.
                  Walter Benzija, Esq.
                  Salomon Green & Ostrow, P.C.
                  485 Madison Avenue
                  20th Floor
                  New York, NY 10022
                  (212) 319-8500
                  Fax : (212) 319-8505

     Total Listed Assets: $8 million
     Total Listed Liabilities: $40 million

List of the Debtor's 20 Largest Unsecured Creditors:

Creditor                      Nature of Claim        Claim Amount
---------                     ---------------        ------------
American Management Systems   Promissory Noteholder    $5,000,000
12601 Fair Lakes Circle      
Fairfax, VA 22033
Contact: Joe Figini             
4050 Legato Road, 9th Floor
Fairfax, VA 22033

Aurora Investments            Promissory Noteholder    $4,500,000
Henry Kravis
9 West 57th Street
New York, NY 10019

Richard Diehl                 Promissory Noteholder    $3,000,000
c/o Paul Kellner
Mountain Range Farm
Dales Bridge Road
Germantown, NY 12526

PT govWorks Acquisition LLC    Promissory Noteholder   $3,000,000
Paul Tumpowsky
666 Third Avenue
New York, NY 10017

govWorks Investor Trust        Promissory Noteholder   $3,000,000
c/o Theodore Klein
88 NE 168 Street
North Miami Beach, FL 33162

Hearst Communications, Inc.    Promissory Noteholder   $3,000,000
Kenneth Bronfin
959 Eighth Avenue
New York, NY 10019

Cartago Holding Limited        Promissory Noteholder   $2,000,000
101 East Hill Place
Market Street North
Nassau, Bahamas
c/o Wilder Penino
AV. Luis A. de llerrara
Uruguay, Montevideo 11300

Mecsa, S.A.                    Promissory Noteholder   $2,000,000
590 Madison Avenue
New York, NY 10022
c/o Wilder Penino
AV. Luis A. de llerrara
Uruguay, Montevideo 11300

Bayview (govWorks), LP         Promissory Noteholder   $2,000,000
Jennifer Sherrill
555 California Street
Suite 2600
San Francisco, CA 94104

American Management Systems    Trade Debt              $1,527,184
110 Wall Street, 3rd Floor
New York, NY 10005

Endeavor Fund Offshore Ltd     Promissory Noteholder   $1,000,000
c/o Pamela Cavanaugh
Strong Capital Mgmt, Inc.
100 Heritage Reserve
Menomonee Falls, WI 53051

Endeavor Fund, LLC             Promissory Noteholder   $1,000,000
c/o Pamela Cavanaugh
Strong Capital Mgmt, Inc.
100 Heritage Reserve
Menomonee Falls, WI 53051

Diego Herbstein                Promissory Noteholder     $625,000
390 West End Avenue
New York, NY 10021

Bayview 2000 II, LP             Promissory Noteholder    $500,000
Jennifer Sherrill
555 California Street
Suite 2600
San Francisco, CA 94104

Bayview 2000 I, LP              Promissory Noteholder    $500,000
Jennifer Sherrill
555 California Street
Suite 2600
San Francisco, CA 94104

Comsys                          Trade Debt               $485,039
c/o Albert Simmons
1 Penn Plaza, Suite 4115
250 W. 34th Street
New York, NY 10119

Halo-govWorks LLC               Promissory Noteholder    $250,000
Daryl Wash
61 West 62nd Street, #9D
New York, NY 10023

Robbins Family Partnership      Promissory Noteholder    $250,000
Clifton Robbins
3 Pickwick Plaza, Suite 20
Greenwich, CT 06830

Infospace, Inc.                 Trade Debt               $210,000

American Management Systems     Promissory Noteholder    $201,643

HARNISCHFEGER INDUSTRIES: Strikes Back at State of Wisconsin
Harnischfeger Industries, Inc. filed with the District Court for
the District of Delaware a Complaint arising from the The State of
Wisconsin, Department of Workforce Development's continuing
prosecution of an action against the Debtors under Chapter 109
Wisconsin Statutes and under the Wisconsin common law of torts,
for alleged nonpayment of certain severance pay, claimed to be
owing under an employment contract, agreement, or policy in effect
as of December 10, 1996, and tortuous interference with these
existing agreements, contracts and policies.

The Complaint, as amended in the First Amended Complaint and then
the Second Amended Complaint, alleges that the Debtors have a
cause of action under 42 U.S.C. section 1983, and under Article
VI, Sec. 2 of the United States Constitution (the Supremacy
Clause). The Debtors believe that the DWD's continuing prosecution
of such claims violates the Debtors' statutory right, secured by
Section 514(a) [29 U.S.C. section 1144(a)] of the federal Employee
Retirement Security Act, as amended (ERISA) to be free from
prosecution under state law, for nonpayment of severance payments
alleged to be owing, as a matter of state law. The Debtors assert
that such exemption from state law prosecution is required by
Section 514(a) of ERISA and by the Supremacy Clause of the U.S.

                      Bankruptcy Court Action

The State of Wisconsin, Department of Workforce Development filed
with the Bankruptcy Court a proof of claim (no. 11994) for $8.5
million for alleged severance claims against Beloit, a proof of
claim (no. 11995) for $10,000,000 for alleged severance Claims
against HII, and a Motion to Allow Administrative Expense Claim,
or in the alternative, to extend the time to file Proof of Claim.

The Debtors have voiced their objections to the Bankruptcy Court
against the DWD Admin. Motion alleging that any Claims under the
employment agreements are not administrative claims.

Specifically, the Debtors object on the bases that:

   (1) Chapter 109 is superseded by ERISA and the Supremacy

   (2) even if Beloit is liable for such claims, only a portion of
       such claims are entitled to administrative priority;

   (3) the penalties asserted by the DWD are not entitled to
       administrative expense priority;

   (4) the DWD did not timely file the prepetition severance pay

   (5) Beloit did not assume the Severance Agreement.

The Harnischfeger Creditors' Committee joins in the Debtors'
objection. The Committee notes that DWD's motion asserts that the
Department is entitled to an approximately $4.2 million
administrative claim against Beloit Corporation on behalf of
various former Beloit employees for unpaid wages, primarily for
severance pay, that allegedly accrued post-petition in connection
with the wind-down and sale of Beloit's papermaking machinery and
equipment business. The Committee tells the Court that it has
chosen to join in the Debtors' objection out of caution but the
Committee believes that DWD's motion involves claims asserted
exclusively against Beloit and does not involve any claim,
administrative or otherwise, against HII or any other Debtor.

                  Motion to Withdraw Reference

The Debtors move the Bankruptcy Court to withdraw the reference to
the United States Bankruptcy Court for the District of Delaware
with respect to the resolution of claims filed by the State of
Wisconsin, Department of Workforce Development and to have the DWD
Claims heard in the United States District Court for the District
of Delaware where Harnischfeger Industries Inc. and Beloit
Corporation v. James E. Doyle, Jr. [Civil Action No. 00-873 (RRM)]
is pending.

The Debtors believe that the liability and priority issues
involved in this matter should be decided together in the District
Court because the Debtors' liability, if any, with respect to the
DWD Claims, involves an analysis of ERISA, a federal statute.
Therefore, the liability issue should be withdrawn. Given this,
the priority of the DWD Claims should be withdrawn too, under the
standards of permissive withdrawal:

-- First, withdrawal to the District Court will promote uniformity
in bankruptcy administration because ERISA establishes standards
for all companies, including debtors in possession. A District
Court ruling, which will bind all bankruptcy courts within the
District of Delaware, will facilitate standard application of
ERISA law within the District. If the District Court finds that
the Debtors are liable with respect to the DWD Claims, then the
priority of the DWD Claims should also be withdrawn under the
standards for permissive withdrawal.

-- Second, forum shopping and confusion will be reduced because
all bankruptcy judges within the District will receive guidance
from the same Court on the issues to be resolved in this

-- Third, the relief sought will also foster judicial economy in
having one court, rather than two, determine issues involving many
of the same legal and factual issues.

-- Finally, the bankruptcy process will be expedited if the
District Court hears both the liability and the priority issues.

The Debtors express their awareness that the Bankruptcy Court is
already consumed with a great many issues involving the Debtors.
This being recognized, the Debtors tell Judge Walsh that they
believe that the alternative forum - the District Court - should
be utilized. (Harnischfeger Bankruptcy News, Issue No. 36,
Bankruptcy Creditors' Service Inc, 609/392-0900)

HILLCREST HEALTHCARE: HSR Waiting Period Catches Moody's Attention
Moody's Investors Service placed the B3 debt rating on Hillcrest
HealthCare System (OK) on Watchlist for possible upgrade. The
Watchlist action follows the recent signing of a Definitive
Agreement ("Agreement') with Triad Hospitals, Inc. to purchase
Hillcrest's 50% interest in Southcrest Hospital. SouthCrest
Hospital is a new 150-bed acute facility in southeast Tulsa which
opened as a joint venture between Hillcrest and for-profit Triad
(then HCA Health Care Corporation).

Following the 30-day waiting period required under the Hart-Scott-
Rodino AntiTrust Regulations, it is anticipated that Triad will
pay Hillcrest $44.6 million. Management anticipates using those
funds to pay down a like amount currently outstanding under
Hillcrest's line of credit from Bank of Oklahoma. Earlier this
week, Hillcrest drew $22.7 million on its line of credit to repay
its BankOne demand note ($22.7 million). (The Bank of Oklahoma
line expires on April 30, 2001.) Moody's believes that the
repayment of the BankOne demand note is significant and removes a
sizable 'pressure point' from Hillcrest's credit profile.
Furthermore, following the repayment of the Bank of Oklahoma line,
Hillcrest's unrestricted cash position will be unencumbered,
signifying a material improvement in credit quality.

Given the potential uncertainty of the outcome of the antitrust
regulatory review, Moody's will render its final outcome following
the passage of the 30-day period. If the review period concludes
without additional information requested by the federal
government, Triad is expected to make the $44.6 million payment to
Hillcrest. Management has indicated their intent to make a
repayment of the outstanding Bank of Oklahoma line. We note that
Bank of Oklahoma will provide a new $10 million line of credit to
Hillcrest secured by various properties in Tulsa.

Moody's anticipates final rating action to occur within 30 days.

ICG COMMUNICATIONS: Wants to Continue Employee Retention Program
David S. Kurtz, Esq., and Timothy R. Pohl, Esq., at Skadden, Arps,
Slate, Meagher & Flom, ask the Bankruptcy Court for an Order
authorizing ICG Communications, Inc., to continue an employee
retention program adopted and partially implement prior to the
commencement of these cases, and to continue in the ordinary
course of business the Debtors' corporate severance policy.

The Debtors' workforce consists of many highly skilled workers
many of which are virtually impossible to replace given the sate
of the marketplace. The telecommunications industry in which the
Debtors operate is highly competitive, with ample employment
opportunities for those individuals possessing the skills
associated with the Debtors' workforce. As a result, the Debtors'
workforce is one of the estates' most significant assets.

As a result of negative publicity surrounding the Debtors and
heightened uncertainty regarding the Debtors' future financial
prospects, employee morale deteriorated significantly, and many
employees began tendering their resignations. To stem the tide of
these resignations and maintain the Debtors' workforce,, the
Debtors, in the exercise of their business judgment, adopted the
Retention Program. The Program was announced to employees on
approximately October 4, 2000, and the first payments were made
under the program, as described below, prior to the Petition Date.
In this Motion, the Debtors sought judicial authority to make
further payments due under the Retention Program after the
Petition Date.

In addition to implementing this Retention Program, the Debtors
announced to employees their intention to continue their existing
Severance Policy. By this Motion, the Debtors also sought the
Court's authority to continue this program.

The Retention Program provides for distribution of pay-to-stay
bonuses, which are periodic cash payments made to employees based
on position and performance. Specifically, under the Retention
Program pay-to-stay bonuses are to be paid to employees at
specified dates if the employees remain in the Debtors' employ on
such dates. The pay-to-stay bonuses are calculated as a percentage
of an employee's base salary, or for sales employees, a percentage
of the sales representative's commission target. The Debtors'
Chief Executive Officer does not participate in the Retention

Under this Program the Debtors' President and Chief Operating
Officer are entitled to aggregate pay-to-stay bonuses equal to
150% of base salary; each Executive Vice President is entitled to
aggregate pay-to-stay bonuses ranging from 80 to 135% of base
salary; each Senior Vice President is entitled to aggregate pay-
to-stay bonuses ranging from 30 to 100% of base salary; each Vice
President is entitled to a bonus ranging from 21 to 73% of base
salary; and the balance of the employees are slated to receive
aggregate pay-to-stay bonuses ranging from 6% (with a minimum of
$3,000) to 66% of base salary. The bonuses for sales personnel
range from 46 to 82% of target commissions. Differing bonus levels
within each employee category were set by management based upon
individual merit. The Debtors estimate that the maximum cost of
the Retention Program (assuming all current employees remain in
the Debtors' employ through the full term of the program) will be
approximately $24.2 million, of which approximately $5.1 million
was paid in the ordinary course of business prior to the Petition
Date, leaving a maximum of approximately $19.1 million to be paid
after the Petition Date.

Under the Retention Program, the pay-to-stay bonuses described
above are to be paid in partial installments at specified dates.
For non-sales personnel, such bonuses are to be paid as follows:

20% of the total bonus was paid on October 27, 2000, with
additional 20% payments due to be paid on January 5, 2001, and
March 30, 2001, and a 40% payment due to be paid on July 6, 2001.
Sales personnel are to be paid as follows: 12.5% of the total
bonus was paid on October 27, 2000, with additional 12.5% payments
due to be paid on January 5, 2001, January 19, 2001, March 2,
2001, April 13, 2001, and May 25, 2001, and a 25% payment due to
be paid on July 6, 2001. The Retention Program also provides that
any employee terminated other than for "cause", death or
disability before the program ends will be entitled to receive
remaining pay-to-stay bonuses under the retention program in a
single lump-sum payment upon such termination.

If the Debtors are not authorized to continue the Retention
Program post-petition, employees will view such a decision as
taking away from them something promised to them and upon which
they relied in their decision not to seek other employment. In the
Debtors' business judgment, this could result in mass defections
and would have a devastating effect on the ability of these
estates to reorganize successfully, to the severe detriment of all
creditors and other parties in interest.

The Severance Policy is the Debtors' existing written policy in
effect prior to the Petition Date. Under the Severance Policy, the
Debtors make severance payments to employees that (a) are
terminated by the Debtors for any reason other than death,
disability, or "cause", or (b) resign for "good reason", which is
defined as (i) a reduction in base pay, target bonus percentage or
benefits, or (ii) a required change in working location that
exceeds forty miles. The Severance Policy does not cover employees
with written employment contracts.

Under the Severance Policy, severance payments are made to
employees based upon their length of service with the company. The
policy provides for severance equal to two weeks of base pay for
each year of service, with maximum payments of 26 weeks base pay
and minimum payments of (a) 12 weeks base pay for executives
without employment contracts, (b) 8 weeks base pay for exempt
employees, or those employees not protected by the provisions of
the Fair Labor Standards Act, and (c) 4 weeks base pay for non-
exempt employees. Payments are made in a lump sum upon
termination. Few, if any, of the Debtors' employees have accrued
severance benefits under the Severance Policy above the minimum
payment levels described above. The maximum hypothetical exposure
under the Severance Policy is approximately $15.4 million.

The Debtors stated they believed the Severance Policy is cost-
effective and within the bounds of severance programs utilized by
competitors and that have been approved in other large Chapter 11
cases. Employees simply will not remain with the Debtors absent
some form of severance protection. The Debtors' ability to
maintain their business operations and preserve value for their
estates is dependent upon the continued employment, active
participation, and dedication of their employees, who possess
knowledge, experience, and skills necessary to support the
Debtors' business operations, including their finances, systems,
operations, personnel and management. The Debtors' ability to
stabilize and preserve their business operations and assets would
be substantially hindered if the Debtors are unable to retain the
services of their key employees.

The Official Committee of Unsecured Creditors objected to this
Motion, stating that on December 4, 2000, the Debtors announced
the resignations of four key executives as part of its
restructuring efforts: William S. Bean, Jr., President and Chief
Operating Officer; Harry Herbst, Executive Vice President and
Chief Financial Officer; Cindy Schonhaut, Executive Vice President
of Government and External Affairs; and Carola J. Wolin, Executive
Vice President of People Services. Like other employees, these
former executives were granted the first 20% of the pay-to-stay
bonuses on October 6, 2000, receiving in the aggregate
approximately $332,000 in cash payments. The Committee argued that
if the former executives were allowed to remain in the retention
program, the pay-to-stay bonuses allocated to them would cost the
Debtors' estates an additional $1,330,000 in cash, even though the
former executives are no longer employed by the Debtors and
therefore provide no positive value to the Debtors' estates going
forward. The inclusion of these former executives is, the
Committee argued, inconsistent with the objectives of the
Retention Program since the former executives are no longer
employed by the Debtors are therefore are useless in the Debtors'
reorganization efforts. The Committee argued, through its
attorneys William H. Sudell, Jr., and Derek C. Abbott of the firm
of Morris, Nichols, Arsht & Tunnell of Wilmington, Delaware, and
Chaim J. Fortgage, Richard G. Mason and Sean Sullivan of the firm
of Wachtell, Lipton, Rosen & Katz of New York, that it would be
wasteful expense for the Debtors' estates to grant pay-to-stay
bonuses to former executives, and requested that the program be
modified to exclude them. (ICG Communications Bankruptcy News,
Issue No. 3, Bankruptcy Creditors' Service Inc, 609/392-0900)

JCC HOLDING: Files Disclosure Statement with Creditor Support
JCC Holding Company, the owner of Harrah's New Orleans Casino,
announced today that it has reached an agreement with Harrah's
Entertainment, Inc. (NYSE: HET), and its other principal creditors
represented by the Official Bondholders Committee
and the bank group to support the plan to restructure JCC's debt
and capital structure adopted by the JCC Board of Directors. The
agreement is based upon a proposal for restructuring originally
presented by Jefferies & Co., JCC's investment bank advisors, at
the November 13th meeting of the Casino Tax Advisory Committee
appointed by Mayor Marc Morial to study the casino issue.

The agreement, which was submitted today in a filing with the
Bankruptcy Court, will, if approved by the Court, reduce the
casino's debt from more than $500 million to approximately $125
million. The restructured company will be owned by current JCC
bondholders and the bank group (51%) and HET (49%).

The company also acknowledged that it has reached an agreement
with the Foster administration regarding certain other elements of
the proposed restructuring, including a reduction in the minimum
annual payment to the State and the guaranty required for these
payments. However, JCC cautioned that an early special session and
prompt legislative approval of the proposed State changes are
essential to the success of the restructuring plan.

On a related matter, JCC expressed its encouragement over the
announcement today of the support of the City of New Orleans
expressed in a press conference attended by Mayor Marc Morial and
members of the City Council.  The Mayor and the Council endorsed
JCC's efforts in restructuring, including a State minimum payment
reduction, and committed the City to a $5 million reduction in
certain payments made to the City and payments and expenses
required by the lease between JCC and the City.

JCC's Harrah's New Orleans Casino remains open and will continue
operations during the bankruptcy proceedings, subject to the goal
of consummation of the bankruptcy plan by March 31, 2001. No
disruptions in employment or operations are expected during this
time unless the relief sought by JCC is not obtained and a
bankruptcy plan cannot be timely approved by the Bankruptcy Court
and consummated by March 31, 2001.

Jazz Casino Company, LLC, a subsidiary of JCC Holding Company, has
the exclusive license to own and operate the only land-based
casino in Orleans Parish. Harrah's New Orleans Management Company,
a subsidiary of Harrah's Entertainment has the contract with Jazz
Casino Company to manage the casino. The casino directly employs
approximately 3,000 people earning wages, benefits and tips of
over $100 million annually. The 100,000 square foot casino is
located at Canal Street at the Mississippi River in downtown
New Orleans and is adjacent to the French Quarter, the Aquarium of
the Americas and the Ernest N. Morial Convention Center.

LERNOUT & HAUSPIE: Court Allows Vendors to Supply Goods & Services
As designers, developers and licensors of speech and language
technologies, Lernout & Hauspie's operations depend on a
continuous flow of goods and services. The Debtors purchase goods
and services from numerous vendors, both foreign and domestic.
These vendors provide the Debtors with, among other things, raw
materials used in manufacturing, goods and various technical
support without which the Debtors would be unable to operate their
businesses. In many instances, the vendors are one of a limited
number of the sole supplier of their respective goods and

Where feasible, and in the Debtors' business judgment when
appropriate, the Debtors proposed, and were granted the authority,
to satisfy pre-petition claims of certain of the vendors
conditioned upon a written agreement with each vendor holding a
critical vendor claim to provide the Debtors with post-petition
goods and services for the duration of their Chapter 11 cases on
credit terms and limits that are the same as or more favorable
than those previously provided to the Debtors over the twelve-
month period prior to the Petition Date. The Debtors were
authorized to, in the exercise of their business judgment, and
based on the liquidity available to the Debtors at the time the
determine is made, to determine which claims qualify as critical
vendor claims.

In support of this relief, the Debtors argued that payment of
critical vendor claims was essential to the ongoing operation of
their businesses. Without authority to pay critical vendor claims,
the Debtors believe that it is almost certain that some or many of
the critical vendors will refuse to continue providing it with
necessary goods and services except on a "cash before delivery" or
with order basis. Finding replacement vendors for essential goods
and services would be impossible because many of these goods are
only provided by a few suppliers and the inability to acquire
sufficient quantities of those products in a short period of time
would greatly diminish the Debtors' ability to rehabilitate its
businesses. Authorizing payment of critical vendor claims would
enable the Debtors to preserve valuable business relationships.
Based on their experience, the Debtors argued that the pre-
petition terms and levels of credit at which they did business
with the critical vendors until the last few months were
competitive and that continuation of business on the same or
better terms would stabilize the Debtors' businesses and provide a
platform for recovery. In this Motion, the Debtors sought
authority only to use $5 million for payment to critical vendors.

On this limited basis, the Court entered an Order granting the
requested relief. (L&H/Dictaphone Bankruptcy News, Issue No. 2,
Bankruptcy Creditors' Service Inc, 609/392-0900)

LEVI STRAUSS: $500 Million 7-Year Rated Take S&P's BB- Rating
Standard & Poor's assigned its double-'B'-minus rating to Levi
Strauss & Co.'s $500 million senior unsecured notes due 2008. The
proceeds will be used for refinancing bank debt and for other
general corporate purposes.

In addition, Standard & Poor's affirmed its double-'B' corporate
credit rating and its double-'B' bank loan rating for Levi
Strauss, as well as its double-'B'-plus rating on the company's
bridge loan facility. On Dec. 28, 2000, Standard & Poor's assigned
its double-'B' rating to the company's proposed $1.5 billion
credit facility, and the existing bank loan rating will be removed
once this facility is closed. The double-'B'-minus senior
unsecured debt rating on the company also was affirmed.

The company's outstanding debt totaled about $2.1 billion as of
Nov. 26, 2000.

The outlook is negative.

The ratings reflect Levi Strauss' leveraged financial profile and
the company's participation in the highly competitive denim and
casual pants industry. Support for the rating includes Levi
Strauss' well-recognized brand name in jeans and other apparel,
its new customer-focused strategy, and its good operating cash
flow generation.

New competitors that have more effectively met consumer
preferences during the past few years for both designer and
private-label jeanswear have challenged Levi Strauss' market
position. The company still holds the No. 2 market share in the
U.S. for jeans due to its core Levi's brand, but the firm has
suffered from a lack of product innovation, weak advertising, a
high-cost structure, and poor retail presentation. To improve its
competitive position, the company closed domestic manufacturing
facilities, reduced overhead costs, and refocused its marketing
organization to be more customer oriented.

The competition in the denim apparel industry remains intense, and
most participants experienced weakness in 2000 due to dampened
consumer spending. Levi Strauss' sales have declined significantly
in recent years, to $4.6 billion in fiscal 2000 from more than $7
billion in fiscal 1996. Sales, however, declined at a slower pace
in fiscal 2000, as U.S. consumers are shifting back to basic jeans
styles from more "fashion" styling. Also, the demand for khakis
remains healthy, which has helped the company's Dockers brand
maintain its strong market position. New management, as of
September 1999, has developed a more customer-focused strategy,
with an emphasis on improving product innovation, better product
presentation at retail, increased advertising (that positions
jeanswear as relevant to target consumers), and lowering costs
through better inventory and overhead expense management. As Levi
Strauss executes its current initiatives, Standard & Poor's
expects that sales will stabilize in the next year.

In fiscal 2000, increased foreign sourcing and better control of
operating expenses resulted in significant operating margin
improvement. In addition, modest capital expenditures and improved
working capital from inventory reduction increased the company's
free cash flow. Standard & Poor's expects Levi Strauss' sizable
cash flow to continue to be used for reducing currently high debt
levels; the company paid down more than $500 million of debt in
2000. Lease-adjusted EBITDA interest coverage, at about 2.5x for
fiscal 2000, is below average for the rating category. Standard &
Poor's expects credit measures to improve modestly in fiscal 2001
due to EBITDA growth and further debt reduction. Financial
flexibility for seasonal working capital purposes is provided by
the new credit facility.


Levi Strauss' credit ratios remain weak for the rating, and
Standard & Poor's expects the company to be challenged in
rebuilding its sales base and improving its operational
efficiency. If the company is successful in stabilizing its
revenue declines and improving its EBITDA coverage in the
intermediate term, the outlook could be revised, Standard & Poor's

LEVI STRAUSS: $500 Million 7-Year Rated Take Moody's Ba3 Rating
Moody's Investors Service assigned a (P) Ba3 rating to Levi
Strauss & Co.'s (LS&Co.) proposed $ 500 million issue of 7-year,
US dollar and Euro denominated senior unsecured notes. The rating
is contingent upon the receipt of final documentation that
conforms to the assumptions provided to Moody's. The purpose of
the new facility is to term out a similar amount of outstandings
under the company's loan facility.

At the same time, Moody's confirmed the existing ratings of LS&Co.
The affected ratings include: the (P) Ba2 rating on the $ 1.5
billion guaranteed senior secured credit facility due August 31,
2003; the Ba3 ratings on the senior implied rating, the senior
unsecured issuer rating and the ratings on the senior unsecured
Eurobonds due 2003 and 2006. The outlook on all LS&Co. ratings is

The ratings reflect positive developments at LS&Co including
improved gross profit margins from lower sourcing and overhead
costs; better product mix; increased cash flow; and debt
reduction. On the other hand, the ratings also reflect the
company's negative revenue generation pattern, particularly in
Europe, as well as a lower, but still significant 89 days of
inventory (normal for the company but high for the industry),
significant debt, and a large negative equity of $1.1 billion,
primarily due to the company's recapitalization dating from 1996
and from subsequent restructuring charges. The company continues
to be challenged to rebuild its brand equity and to demonstrate
the relevance of its product to its broad base of customers, to
excel in forecasting and in high quality, on time foreign
sourcing, and to continue to upgrade its retail presentation.

While the company's financial profile has improved, it is still
exposed to significant industry risks. These include the risks
that the weakening domestic retail environment pose to earnings,
especially the softness that exists in the department store
channel, the slowdown in European apparel sales (typically 25% of
sales) and the continued weakness in the Euro.

The company expects to place US$ 400 million in the domestic
market and an approximately $100 million equivalent of Euro-
denominated notes. The notes will be senior unsecured obligations
of LS&Co. and will rank pari passu with all other LS&Co existing
and future unsecured and unsubordinated debt.

Levi Strauss & Co., headquartered in San Francisco, California, is
one of the world's largest branded designers, manufacturers and
marketers of apparel, producing products under a variety of trade
names including Levi's(R), Dockers(R), and Slates(R).

LOEWEN GROUP: Roundtree-Bowen-Taylor Selling Assets for $300,000
Roundtree-Bowen-Taylor Funeral Home, Inc., a Loewen debtor-
affiliate, sought and obtained the Court's authority: (i) to sell
the funeral home business and related assets at Roundtree-Dixon-
Bowen Funeral Home (3435) to the Purchaser that Loewen Group Inc
determined has submitted the highest and best offer, free of all
liens, claims and encumberances; and (ii) to assume and assign to
the Purchaser the 6 executory contracts and unexpired leases,
pursuant to the Disposition Program and in accordance with section
363 of the Bankruptcy Code.

The Initial Bidder (Seven Pines Investment Company) and the
Debtors have entered an Asset Purchase Agreement under which Seven
Pines has agreed to purchase the property for $300,000 and the
Debtors to sell at this price, subject to higher and better
offers, and to the Court's approval. All accounts receivable,
transferable permits and goodwill relating to the businesses
conducted at the Sale Location will be transferred to the Initial
Bidder. The Initial Bidder agrees to pay, and to hold the Selling
Debtor harmless from, all costs and other expenses associated with
the sale, such as taxes, levies and license and registration fees.
The Initial Bidder paid the Selling Debtors a deposit of $15,000
upon the execution of the Purchase Agreement and agrees to pay the
remainder of the Purchase Price at the closing.

In connection with the proposed sale of the Sale Locations, Neweol
would sell and the Initial Bidder would purchase certain accounts
receivable related to the Sale Locations pursuant to a purchase
agreement between Neweol and the Initial Bidder. The amount of the
Neweol Allocation will be determined immediately prior to closing.

In accordance with the Net Asset Sale Proceeds Procedures, the
Debtors will use the proceeds generated to repay any outstanding
balances under the Replacement DIP Facility and deposit the net
proceeds into an account maintained by LGII at First Union
National Bank for investment, pending ultimate distribution on
court order. Funds necessary to pay bona fide direct costs of a
sale may be paid from the account without further order of the
Court. (Loewen Bankruptcy News, Issue No. 32, Bankruptcy
Creditors' Service Inc, 609/392-0900)

LOEWS CINEPLEX: Prepares for Chapter 11 Filing This Week or Next
Loews Cineplex Entertainment Corp. -- the No. 2 U.S. movie theater
operator -- appears to be putting the final piece in place for a
chapter 11 filing this week or next.  The latest key indicator is
that the Company is holding talks with General Electric Capital
Corp. about debtor-in-possession financing.  Neither GE Capital
nor Loews would make any on-point comment.  

Loews operates nearly 3,000 screens in the U.S. and Canada --
accounting for roughly 10% of the market.  

A spokeswoman for Loews, Mindy Tucker, told Reuters on Wednesday
that the company is "in conversations with our banks and other
stakeholders in our company to formulate a long-term financial
plan." She did not specify the nature of or participants in those

The Company's Secured Lenders have granted a waiver of existing
defaults through Jan. 26.  

LTV CORPORATION: Representative Kucinich Appears as Amicus Curiae
United States Representative Dennis J. Kucinich, appearing through
Martin D. Gelfand, Esq., Congressional Staff Counsel in Lakewood,
Ohio, sought and obtained permission from Judge Bodoh for leave to
appear as amicus curiae in support of the LTV Corporation in the
steel company's recently-filed chapter 11 cases.

Representative Kucinich told Judge Bodoh at the First Day Hearing
that he received an urgent message from William Bricker, LTV's
Chairman and Chief Executive Officer, saying that there is the
possibility of an imminent closure and cessation of operations at
LTV because of The Chase Manhattan Corporation's refusal to grant
LTV continued use of so-called cash collateral.

Representative Kucinich represents 570,000 resident constituents
in Ohio's 10th Congressional District who are or may be affected
by the imminent closing of LTV, and he has a keen interest in
these cases as matters which affect the needs of some 5,000
constituents in his, and adjacent, Congressional Districts.

Representative Kucinich also has an interest in the well-being of
another 20,000 constituents whose jobs are generated and supported
by economic activity at LTV's Cleveland facility, and another
18,000 employees who will lose their paychecks and health
insurance after shutdown, as well as some 100,000 people,
including 30,000 active employees and their dependents, and 70,000
retirees and their dependents who will lose their health care
benefits after shutdown. Representative Kucinich also is
interested in the lack of worker compensation payments, and
payment of state and local taxes, after any such shutdown, as well
as the economic blow to some 8,400 suppliers to LTV. Any immediate
and abrupt closing of the Debtors' manufacturing and other
facilities, without implementation of a shutdown strategy designed
to minimize damage to the facilities and the environment, could
pose a significant threat to public health and safety. (LTV
Bankruptcy News, Issue No. 2, Bankruptcy Creditors' Service Inc,

PACIFIC GAS: Bankruptcy Risk Increases as Liquidity Contracts
Pacific Gas & Electric Co. (PG&E) said the disparity between
wholesale power prices and the current utility rates has made
further borrowing impossible, according to a Form 8-K filed
Wednesday with the Securities and Exchange Commission. The utility
said it has been foreclosed from the capital markets because of
its financial condition, and without immediate regulatory,
legislative or judicial relief, it will default on its payment
obligations and risk being forced into bankruptcy. As of Dec. 31,
2000, the utility had an under-collected balance in its Transition
Revenue Account (TRA) of $6.6 billion, more than 100 percent of
its total stockholders' equity, the filing stated.

A recent rate increase approved by the California Public Utilities
Commission (CPUC) on Jan. 4 will raise about $70 million in cash a
month for three months. The utility said that even if all this
cash were made available to it immediately, $210 million
represents approximately one week's worth of net power purchases
at current prices. According to the filing, the rate increase
doesn't raise enough cash for the utility to pay its ongoing
procurement bills or make further borrowing possible.  (ABI 11-

PACIFIC GAS: Moody's Junks Ratings on Preferred Issue
Moody's Investors Service has lowered the preferred stock rating
of Pacific Gas and Electric Company to "caa" from "ba1" following
the January 10th announcement by the utility that it would not
declare the regular preferred stock dividend for the period ending
January 31, 2001, payable on February 15, 2001. The omission of
the preferred stock dividend could save the company approximately
$25 million annually.

Ratings lowered include the preferred stock of Pacific Gas and
Electric Company to "caa" from "ba1" and a shelf registration for
the preferred stock of Pacific Gas and Electric Company to
(P)"caa" from (P)"ba1".

Pacific Gas and Electric Company's decision to omit the preferred
dividend is a cash conservation measure by the utility as it
attempts to strengthen and extend its liquidity needs to meet
operating expenses, including the payment of power and natural gas
for customers.

The debt ratings of Pacific Gas and Electric Company and its
parent, PG&E Corporation, remain unchanged and are still under
review for possible downgrade due to the extremely fragile
liquidity situation at Pacific Gas and Electric and at PG&E
Corporation. Future rating actions will depend upon the ability of
the utility to quickly shore up its liquidity, which at this
point, depends upon the success of the ongoing discussions in
Washington, D.C. among the generators, the utilities and numerous
state and federal officials. Absent a quick resolution to these
discussions that fortifies Pacific Gas and Electric Company's and
PG&E Corporation's near-term liquidity, the debt ratings of
Pacific Gas and Electric Company and PG&E Corporation will be
downgraded to below investment grade.

Headquartered in San Francisco, California, PG&E Corporation is
the parent holding company of Pacific Gas and Electric Company.

PEP BOYS: Moody's Lowers Senior Implied Rating to B1
Moody's Investors Service lowered the ratings of The Pep Boys -
Manny, Moe & Jack, based on the company's weak debt protection
measures, the intense competition in the automotive aftermarket,
and the slow growth in the important Do-It-Yourself segment of the
industry. The ratings also recognize the company's solid
franchise, geographic diversity and service capabilities. The
rating outlook is stable. This rating action concludes the review
for possible downgrade begun on August 11, 2000.

Ratings lowered:

     * Senior implied to B1 from Ba2.

     * Senior unsecured issuer rating to B2 from Ba3.

     * Senior unsecured notes and medium term notes to B2 from

     * Convertible subordinated notes and debentures to B3 from   

Pep Boys sells retail automotive parts and accessories, and also
services and installs parts. Pep Boys is the largest retailer
serving all three segments of the automotive aftermarket: "do-it-
yourself", "do-it-for-me" and "buy-for-resale". However, about 47%
of the company's revenues are generated by the DIY segment, which
has experienced softness in demand, as time-pressed consumers
choose DIFM service for their increasingly complex cars.

Pep Boys' margins have lagged those of some competitors that are
entirely dependent on DIY. For the first three quarters of fiscal
2000, pre-tax income (adding back expenses associated with the
company's Profit Enhancement Plan) were only about $11.4 million
or 1% of sales, well below the $62.6 million or 3% of sales in the
prior year's period. The Profit Enhancement Plan, announced in
late October, includes the closure of 38 stores and 2 distribution
centers and a reduction in personnel and store operating hours.
The annual pre-tax savings from these initiatives is estimated at
about $70 million. Moody's believes, however, that Pep Boys' debt
protection measures may not materially improve in the near term
due to a slower growing economy and intense competition at retail.

In September 2000, Pep Boys replaced its $200 million senior
unsecured bank agreement with a new $225 million senior secured
revolving credit agreement expiring in September 2004. The new
bank agreement is secured primarily by inventory and receivables,
which are among the company's most desirable assets. Pep Boys also
replaced $143 million of operating leases with new leases maturing
in September 2004. The ratings of the senior notes and the
convertible subordinated notes reflect the fact that these
debtholders do not benefit from security.

The refinancings have added more stability to Pep Boys' capital
structure, by reducing short term payment obligations. Moody's
notes that the company's zero coupon convertible Liquid Yield
Option Notes (LYONs), which have a put option at the option of the
holder beginning in September 2001, can be repaid by the issuance
of common stock, although the company has announced its intention
to repurchase the LYONs with cash. Moody's expects that Pep Boys
will exercise prudent financial management in the use of its
limited excess liquidity sources.

Headquartered in Philadelphia, The Pep Boys - Manny, Moe & Jack
currently operates about 628 stores and nearly 6500 service bays
in 36 states and Puerto Rico.

PILLOWTEX CORPORATION: Asks for More Time to Decide on Leases
Pillowtex Corporation asks the Bankruptcy Court to enter an Order
extending the time during which they may decide whether to assume,
assume and assign, or reject unexpired leases of commercial and
nonresidential real property, to the date of confirmation of a
plan of reorganization in these Chapter 11 cases.

The present deadline of Tuesday, January 16, 2001, is set by
statute. Since the Petition Date, the Debtors have focused their
efforts principally on completing the smooth transition to
operations in Chapter 11. In light of the press of business
incident to the commencement of these cases, the Debtors told
Judge Robinson they simply have been unable to (a) evaluate the
leases thoroughly, (b) determine which of the Leases will
contribute to the Debtors' restructuring efforts, or (c) solicit
the views of the Creditors' Committee and other constituencies
regarding the appropriate treatment of each Lease. Given the
importance of the Leases to the Debtors' ongoing operations and
the number of issues that the Debtors must consider and resolve in
deciding whether to assume, assign and assign, or reject each of
the Leases, it would be impossible and imprudent for the Debtors
to elect whether to assume, assign and assign, or reject each of
the Leases within the 60-day period provided by statute. Moreover,
the Debtors argued that their business structure may significantly
impact whether certain Leases are valuable to the Debtors' ongoing
businesses, and believe it would be imprudent to make final
assumption or rejection decisions outside of the plan of
reorganization process. (Pillowtex Bankruptcy News, Issue No. 3,
Bankruptcy Creditors' Service Inc, 609/392-0900)

SAFETY-KLEEN: Ryder Wants Immediate Decision on Ecogard Agreement
Ryder Integrated Logistics, Inc., f/n/a Ryder Distribution
Resources, Inc., filed a Motion seeking an Order compelling
Ecogard, Inc., one of Safety-Kleen's 73 affiliates and
subsidiaries, to accept or reject a Transportation Agreement by
which RIL provides transportation services to the Debtors. Under
the Agreement, RIL provides two drivers and two vehicles for the
Debtors' use. Prior to the Petition Date, Ecogard had incurred
$27,747.19 of charges which remain unpaid, although post-petition
charges have been paid as due. The Transportation Agreement
provides that, upon termination, the Debtor is obligated to
purchase each vehicle for its Original Value, less total
depreciation, plus unamortized taxes and expenses. The total price
for the two vehicles is $118,268.78.

If the Debtor intends to assume the Transportation Agreement,
Ryder has asked that Judge Walsh require that the Debtor post a
cash bond equal to one month's payment, or $50,000, pay all pre-
petition charges, and be ordered to pay all post-petition charges
as and when due, failing which RIL should be allowed to terminate
the agreement and recover its vehicles without further Order of
the Court. If the Debtor rejects the Transportation Agreement, RIL
will incur damages representing the difference between the
Original Price of the vehicles and the fair market value of the
vehicles, estimated by RIL to be $ 80,000, leaving RIL damaged in
the amount of $38,112.86, and additional amounts for unpaid fuel
bills. (Safety-Kleen Bankruptcy News, Issue No. 12, Bankruptcy
Creditors' Service Inc, 609-392-0900)

SUN HEALTHCARE: Consents to Modification of Stay for Insured Claim
Sun Healthcare Group, Inc., consented to modification of the
automatic stay in its chapter 11 proceeding to permit the estate
of Clarence Frank Battles to file and serve a complaint on Sun and
to permit the prosecution and defense of the State Court Action
(whether filed in Federal or State Court) in connection with
Clarence Frank Battle's allegedly sustained injuries at Sun Bridge
Care and Rehabilitation of Mount Berry in Rome, Georgia. The
estate of Clarence Frank Battles and Thelma Battles notified the
Debtors of their claims.

The parties agree that Claimant may enforce settlement or
disposition in the court action to the extent such claims are
covered by proceeds from any applicable Sun liability insurance
policies and shall be entitled to assert a general unsecured claim
in the Bankruptcy Court for such amount of the self-insured
retention obligation of Sun, but Claimant shall not enforce to
collect any amount from Sun, Sun's current and former employees,
officers and directors, or any person indemnified by Sun or
listed as an additional insured under any of Sun's Liability

Judge Walrath has given her stamp of approval to the agreement.
(Sun Healthcare Bankruptcy News, Issue No. 17, Bankruptcy
Creditors' Service Inc, 609/392-0900)

TYSON FOODS: Moody's Favors IBP Acquisition But Notes Credit Risks
Moody's Investors Service downgraded Tyson Foods, Inc.'s senior
unsecured debt to Baa2 from A3, and confirmed its short term debt
at Prime-2. Moody's also downgraded IBP Inc.'s long term debt to
Baa2 from A3, and confirmed its short term debt at Prime-2. The
rating actions are in anticipation of Tyson's acquiring IBP in a
cash and stock transaction, and assume that the transaction is
consummated and financed in the manner proposed. The downgrades
reflect the significant increase in leverage and weakening of debt
protection measures in the years following the transaction, as
well as the significant integration challenges such a large
transaction poses.

Converesely, they also reflect the significant exposure to
volatile agricultural commodity markets. It also considers the
strong market position the combined Tyson/IBP organization will
hold, synergistic opportunities, and the diversification that the
transaction will create. The outlook on both Tyson's and IBP's
ratings are stable, reflecting Moody's anticipation that
management will work to pay down debt and improve debt protection
measures in the years following the acquisition. Ratings
downgraded and confirmed are as follows:

     Tyson Foods, Inc.

          Senior unsecured downgraded to Baa2 from A3

          Senior unsecured shelf downgraded to (P)Baa2 from (P)A3

          Senior unsecured MTN downgraded to Baa2 from A3

          Commercial paper confirmed at Prime-2

     IBP, Inc.

          Senior unsecured debt downgraded to Baa2 from A3

          Senior unsecured MTN downgraded to Baa2 from A3

          Commercial paper confirmed at Prime-2

     IBP Finance Company of Canada

          Senior unsecured downgraded to Baa2 from A3 based upon
          full guarantee of IBP, Inc.

Tyson Foods, Inc. has undertaken a tender offer to acquire all the
outstanding shares of IBP, Inc. for approximately $3.2 billion as
well as the assumption of approximately $1.5 billion of existing
IBP debt. The $3.2 billion purchase price will consist of equal
amounts of cash and Tyson stock. Of the $1.5 billion of existing
IBP debt, we expect Tyson to immediately refinance over $900
million of IBP bank debt and commercial paper, and fully guarantee
over $600 million of IBP long-term public debt.  Tyson will
finance the transaction with a $2.5 billion bank bridge
financing. Moody's expects Tyson to permanently refinance these
borrowings in the long-term capital markets within six months of

From a strategic standpoint, the combination of Tyson's and IBP's
businesses makes sense. Both companies have strong market
positions in their respective portions of the meat protein
markets, and together will be able to provide a complete range of
center-of-plate products to retailers. By being able to
offer chicken, beef, and pork, Tyson's product line is more
diversified, and the company improves its ability to effectively
deal with larger, more-powerful food retailers. The company will
seek to increase the branded nature of its beef and pork
offerings, and pursue higher margins by developing further
processed and fully cooked beef and pork products. Tyson
has successfully done this with its chicken offerings, and the
probability of success in the carrying this over to the beef and
pork side is good. It will also make significant investments in
its ability to provide case-ready beef and pork products to
retailers who no longer wish to have in-store butcher departments.

The transaction will more than triple Tyson's debt, and create
over $1.8 billion in incremental debt above what Tyson and IBP
currently have combined. This roughly 62% increase in aggregate
debt significantly weakens Tyson's post-transaction debt
protection measures in the years following the transaction. While
we expect Tyson to work to pay down debt from internal cash flow,
the company's financial flexibility at its new rating level will
be weak for several years.

Tyson will face significant challenges integrating IBP's  
operations, which are large with 60 production sites and over
50,000 employees. While Tyson does not intend to consolidate
manufacturing capacity into its own, it must integrate back office
and logistics systems, as well as integrate several smaller
acquisitions which IBP made but never fully integrated. It must
also achieve significant sales and marketing synergies in order to
gain the full advantage of this acquisition.

Tyson's operations will continue to face significant exposure to
volatile commodity agricultural markets for both grains used as
raw materials, as well as the finished chicken, beef, and pork
products they process. While Tyson is the leader in the US chicken
industry, its margins have suffered over the past few years as
industry oversupply conditions have compressed operating profits.
This situation is expected to continue in the near term.
IBP has been enjoying very favorable conditions in its beef and
pork markets, although a cyclical industry downturn in
profitability is expected in the near term. These cyclical factors
will continue to cause volatility in Tyson's operating margins
following the IBP acquisition. Although Moody's ratings account
for these cyclical variations, its results in Tyson's ratings
being lower than for some other food processors who face less
variation in profitability.

Tyson Foods, Inc., headquartered in Springdale, Arkansas, is the
world's largest producer of poultry and poultry products.

IBP, Inc., based in Dakota Dunes, South Dakota, is the worlds
largest producer of fresh beef and pork, and a diversified
producer of processed food products.

TWA: Taps Into AMR-Backed DIP Facility Without a Moment's Delay
TWA, in desperate need of cash to sustain operations, has already
tapped into debtor-in-possession (DIP) financing provided by
American Airlines, according to the Associated Press. Despite
assurances that TWA customers would not be affected by the
company's bankruptcy filing, TWA's chief financial officer Michael
J. Palumbo told U.S. District Judge Sue L. Robinson in a hearing
late Wednesday that the carrier had just $20 million in cash on
hand, and needed $40 million to operate a normal schedule on

Judge Robinson granted the request, allowing TWA to access $175
million of the $200 million in debtor financing offered by AMR
Corp.'s American. Earlier on Wednesday, American announced plans
to buy most of the bankrupt airline's assets for $500 million
cash. The debtor financing will allow the airline to continue
operating for the next several months while it proceeds through
bankruptcy court and the proposed sale of assets to American.

Judge Robinson's approval of the debtor financing was finalized
Thursday, despite the objections of billionaire corporate raider
Carl Icahn. Icahn, TWA's former owner, also offered to provide
debtor financing. TWA spokesman Mark Abels said Thursday that the
airline had not received any kind of written proposal for
financing from Icahn since the financier presented his offer to
the court, and because the deal with American has already been
negotiated, it was the best choice. Icahn has reportedly bought up
much of TWA's outstanding debt, although he was not listed among
the company's 20 largest unsecured creditors in TWA's chapter 11
filings.  (ABI 12-Jan-2001)

WHEELING-PITTSBURGH: Retains Kirkpatrick as Environmental Counsel
Wheeling-Pittsburgh Corporation seeks authority to employ
Kirkpatrick & Lockhart LLP in Pittsburgh, Pennsylvania, as its
special counsel with respect to compliance with various federal,
state and local environmental laws and regulations during the
pendency of its chapter 11 restructuring.   The services to be
rendered by the firm include:

   (a) Representation of the Debtors in various release matters,
including Unilateral Administrative Order issued Nov. 8, 2000,
under Section 311 of the Clean Water Act issued by the United
States Environmental Protection Agency, purportedly to address
alleged discharges of oil from WPSC's Mingo Junction, Ohio, plant.
The EPA has ordered WPSC to undertake certain response and removal
actions and to reimburse the United States for certain monitoring,
oversight, and removal costs.

   (b) Representation of the Debtors in United States EPA
Multimedia Investigation in connection with a prepetition review
and audit process for certain WPSC plants and facilities designed
to coordinate EPA's various authorities in assessing compliance
with federal environmental statutes and regulations.

   (c) Representation of the Debtors with regard to Consent Order
No. 4960 with the West Virginia Division of Environmental
Protection in response to its demand that WPSC remove certain coal
tar deposits from the bed of the Ohio River. Under the Consent
Order, WPSC has agreed to undertake certain actions commensurate
with timetables established in the Consent Order, including
monitoring, development of work plans, and removal of certain coal
tar deposits from the bed of the River.

   (d) Representation of the Debtors with regard to State of Ohio
ex rel. Montgomery v. Wheeling-Pittsburgh Steel Corp., commenced
by the State for civil enforcement against WPSC and based on
allegations that WPSC violated hazardous waste and water pollution
laws arising from WPSC's alleged generation and release of
hazardous wastes at its Yorkville, Ohio, and Steubenville, Ohio,

   (e) Representation of the Debtors with regard to WPSC v. Jones,
Director of Environmental Protection, Ohio. As part of its efforts
to reach settlement with the State of Ohio regarding the
enforcement issues discussed in (d), WPSC agreed to file with the
Ohio EPA a plan for closure of a ferrous chloride solution storage
and transfer system at WPSC's Yorkville, Ohio, plant. The Ohio EPA
approved the closure plan only after attaching conditions not
agreed to by WPSC, and WPSC appealed. The firm is not counsel of
record, but has been advising the Debtors.

   (f) Representation of the Debtors with respect to WPSC v.
Jones, Director of Environmental Protection, Ohio. In June 2000
WPSC filed an application for a Permit to Install with the Ohio
EPA in order to modify a natural gas fueled combustion source at
WPSC's Mingo Junction, Ohio, plant. The Ohio EPA issued a Final
PTI to WPSC in August 2000. Because the Final PTI contains
requirements that the Debtors assert are no longer applicable and
are excessive, unduly burdensome and unnecessarily cost-consuming,
and because the Final PTI contains what the Debtors assert are
confusing and improper citations to Ohio EPA rules, as well
as editorial errors, WPSC has appeal.

   (g) Representation of the Debtors with regard to environmental
matters associated with the purchase of former Brainard Scrapping
Facility, Warren, Ohio. This has been undertaken to complete
acquisition of real property and to satisfy certain financial
assurance requirements of the Ohio EPA related to maintenance of
the realty.

   (h) Providing advice with regard to miscellaneous environmental
matters, including advising WPSC regarding environmental statutes
and regulations applicable to certain activities, actions required
under those statutes and regulations, permits required for certain
activities, federal, state and local agency notifications, and
related matters.

   (i) Performing such other environmental law-related legal
services for the Debtors as may be necessary and appropriate.

Kenneth S. Komoroski, Esq., a partner in the firm, has advised
that the firm has represented, and continues to represent,
Allegheny Ludlum Corporation in a litigation matter in which WPSC
is also a defendant, although WPSC is represented by other
counsel. No cross-claims exist between these defendants at this
time, and both ALC and WPSC have waived any conflicts that might
arise out of K&L's representation of ALC in this matter. The firm
has also represented, and continues to represent, Weirton Steel
Corporation in connection with a possible business combination or
other transaction with WHX Corporation and its steel subsidiaries,
including certain of the Debtors. The firm has also represented
WHX and affiliated companies from time to time on various matters,
all of which are unrelated to such a possible business combination
or other transaction, and not in any matters in connection with
Weirton. WHX and WPSC have expressly confirmed in writing a prior
waiver of any conflicts that might arise out of K&L's
representation of Weirton, and a nondisclosure agreement has been

The attorneys and their hourly rates who are expected to render
services to these Chapter 11 estates are:

     Kenneth S. Komoroski      $ 300
     Paul K. Stockman          $ 225
     John P. Englert           $ 215
     William J. Labovitz       $ 200
     Daniel P. Trocchio        $ 200
     Melody A. Hamel           $ 190
     Richard D. Dworek         $ 180
     Bikram Bandy              $ 150
     Charles E. McChesney II   $ 150
     Arnnie Dodderer           $ 140
     Adam J. Fumarola          $ 140
     Keith Colamarino          $ 175

Other attorneys and legal assistants may from time to time render
services to the Debtors in connection with these cases. K&L
reserves the right to discount those rates for the Debtors.

Prior to the Petition, K&L was paid $256,270.87 in compensation
for services rendered and expenses on the various matters
described above. K&L is owed $7,629.64 in compensation for
services rendered and expenses prior to the Petition Date, and as
of December 2000, $46,502.86 for services rendered and expenses
incurred after the Petition Date. On November 13, 2000, K&L also
received a cash retainer in the amount of $80,000 by wire transfer
to secure K&L's services on the environmental matters described in
detail above. (Wheeling-Pittsburgh Bankruptcy News, Issue No. 4,
Bankruptcy Creditors' Service Inc, 609/392-0900)


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

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

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interest to troubled company professionals. All titles available
from -- go to
-- or through your local bookstore.

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


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

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

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