TCR_Public/010119.MBX         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Friday, January 19, 2001, Vol. 5, No. 14

                            Headlines

AINSWORTH LUMBER: Moody's Downgrades Debt Ratings to Caa1
ARMSTRONG HOLDINGS: Taps McDermott Will & Emory as Labor Counsel
ARMSTRONG HOLDINGS: Asbestos Claims Committee Objects to Law Firm
BAZILLION: Shuts Down Operations and 150 Lose Jobs
CHANCELLOR OF PENNINGTON: Involuntary Case Summary

CROWN VANTAGE: Court Approves Sale of Crown Paper Assets to KPS
DIMAC HOLDINGS: Sells AmeriComm Assets to Former CEO
EDISON FUNDING: Fitch Lowers Utility-Affiliate's Ratings to CC
EDISON FUNDING: Moody's Lowers Senior Unsecured Debt Rating to B2
EDISON MISSION: Off CreditWatch; S&P Lowers Ratings

eMUSIC: Job Cuts Include 3 Executives and 66 Workers
FAMILY GOLF: Puts All Assets On Auction Block
GARDEN.COM: Releases Details of Asset Sale to Walmart and Burpee
GLOBALSTAR: Suspends Debt Payments Indefinitely
GRAHAM FIELD: Planning to Move Headquarters to Atlanta

HARNISCHFEGER INDUSTRIES: Beloit Repudiates Iron Mountain Contract
ICG COMMUNICATIONS: Trustee Balks at Zolfo's Engagement
INTELLIGENT DETECTION: Sells Assets to Pay Defaulted Debts
IMPERIAL SUGAR: Bankruptcy Court Approves First Day Motions
LERNOUT & HAUSPIE: Dictaphone Noteholders Press for Committee

LERNOUT & HAUSPIE: Can't Make Belgium Court's March 1 Deadline
LERNOUT & HAUSPIE: Asks for Extension on Shareholder Meeting
LOEWEN GROUP: Settles Dispute with Davis Park on Texas Lease
LTV CORPORATION: Gets Okay to Pay Prepetition Customer Claims
MUSICMAKER.COM: Appoints 3 New Board Members and New CEO

NBCI: As Many as 140 Heads to Roll
NC SYSTEMS: Texas Judge Dismisses Bankruptcy Case
OWENS CORNING: Nixes Plastic Recycling Contract
PACIFIC GAS: S&P Lowers Ratings to CC
PACIFIC GAS: Moody's Lowers Unsecured Debt Ratings to Caa2

PACIFIC GAS: Defaults on Commercial Paper Obligations
PACIFIC GAS: Dynegy May File Involuntary Petition
PETS.COM: Shareholders Approve Complete Liquidation Plan
PNV INC: Nasdaq Delists Shares
PRO AIR: Gets Ready to Fly Again

SAFETY-KLEEN: Resolves Claims Asserted by Geosyntec
SERVICE MERCHANDISE: Landlord Won't Take Rent from Burlington
SOUTHERN CALIFORNIA: Utility Moves to Preserve Cash Position
SUN HEALTHCARE: Permits Mabel Ann Cogdill to File Injury Suit
TOYSMART.COM: Court Approves Disclosure Statement

VENCOR INC: Inks Agreement with Mr. Barr re SERP and Other Claims
WHEELING-PITTSBURGH: Asks for More Time to Decide on Leases

* BOOK REVIEW: The Turnaround Manager's Handbook

                            *********

AINSWORTH LUMBER: Moody's Downgrades Debt Ratings to Caa1
---------------------------------------------------------
Moody's Investors Service downgraded the senior secured debt
ratings of Ainsworth Lumber Company, Ltd. from B2 to Caa1. The
downgrade is based on Ainsworth's tight liquidity position and the
weak outlook for pricing of its core products, which Moody's
believes will cause the company to default on interest payments on
its senior secured notes.

The ratings action also reflects Moody's expectation that markets
for Ainsworth's key product Oriented Strand Board (OSB) will
remain depressed for the next 12 - 18 months.
  
Ratings downgraded are:

     * Senior secured notes, to Caa1 from B2;
     * Senior implied rating, to Caa1 from B2; and  
     * Issuer rating, to Caa3 from Caa1

Ainsworth participation in the joint venture mill at High Level,
Alberta required a capital investment of about C$100 million,
Moody's states.  Attempts to secure additional funding have not
met with success, forcing the company to use cash balances and
availability under its revolving credit facility.

Moody's expects pressure on liquidity and debt measurements to
continue over the near and intermediate term due to the following:
     - North American OSB capacity is increasing by nearly 20%;
     - housing starts and usage has dipped;
     - pricing is expected to remain at very low levels for the
       next 12 - 18 months.

The Caa1 rating on the senior secured notes reflects Moody's view
that holders will realize high recovery in a liquidation scenario.
  
Ainsworth Lumber Co., Ltd is an integrated lumber producer
headquartered in British Columbia, Canada, with operations in OSB,
lumber, and plywood.


ARMSTRONG HOLDINGS: Taps McDermott Will & Emory as Labor Counsel
----------------------------------------------------------------
Armstrong Holdings, Inc., requested Judge Farnan to allow them to
employ the law firm of McDermott, Will & Emory as special employee
relations and employee benefits counsel to the Debtors.  Subject
to the Court's Order, the firm has provided, and will continue to
provide if approved, services described as defense of the Debtors
in litigation and class actions in state and federal courts,
including every conceivable type of workplace issue.  In addition,
the firm would handle discrimination charges before federal and
state fair employment practice agencies.  The labor practice
of McDermott Will includes giving the Debtors advice concerning
union election petitions, conducting and giving advice with
respect to collective bargaining negotiations and strikes,
defending the Debtors against unfair labor practice allegations
before the National Labor Relations Board, and handling grievance
and arbitration proceedings.  

McDermott Will also provides the Debtors with day-to-day legal
advice, management and supervisory training, and on-site
counseling with respect to legal issues during union organizing,
handbilling, picketing, and related activities.  On the "benefits"
side, McDermott Will provides a broad range of advice with regard
to the increasingly complex array of laws regulating employee
benefits.  With the exception of possible applications regarding
collective bargaining agreements, the firm will not be active in
the reorganization proceedings under Chapter 11 of the Debtors.

Within one year prior to the Petition Date, McDermott Will
received $427,592.31 from the Debtors for services rendered and
expenses incurred.

The attorneys and their respective hourly rates which would be
applicable to these Chapter 11 proceedings are:

                  Larry E. Shapiro          $ 475
                  Paul M. Hamburger         $ 455
                  Stephen Pavlick           $ 440
                  Jan C. Stewart            $ 360

Other attorneys may perform services for the Debtors from time to
time.

By affidavit, Larry E. Shapiro, a partner in the firm, averred to
Judge Farnan that the firm does not hold or represent any interest
adverse to the estates on the matters for which employment is
sought.  However, in the interests of full disclosure, Mr. Shapiro
advises that Joseph Rubinelli, a partner at McDermott Will,
represents Donald C. Clark, a director of Armstrong Holdings, in
connection with matters involving Mr. Clark's personal estate
planning.  Lewis Rosenbloom, a partner of McDermott Will,
represents the board of directors of Holdings in connection with
the board's investigation and review of the financial and legal
condition of the Debtors and the board's exploration of strategic
alternatives.  The firm has also represented Magnatek and certain
other companies in asbestos-related litigation in which AWI was
also a defendant.  In no event does the firm represent any party
in matters which are connected with or related to the
administration of these Chapter 11 proceedings.

Within one year prior to the commencement of these Chapter 11
proceedings, the Debtors had paid to McDermott Will the sum of
$363,378.31 for services rendered and expenses. (Armstrong
Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


ARMSTRONG HOLDINGS: Asbestos Claims Committee Objects to Law Firm
-----------------------------------------------------------------
The Asbestos Claimants Committee asked the U.S. Bankruptcy Court
to deny Armstrong World Industries Inc.'s proposal to keep using a
law firm to lobby Congress to pass asbestos-lawsuit relief
legislation, according to the Lancaster New Era. The committee
also has asked the court to deny Armstrong's proposal to keep
using a second law firm that has handled Armstrong's past
negotiations and settlements with asbestos claimants. Armstrong's
bid to retain the firms, and the committee's opposition, are an
early key joust for positioning in the bankruptcy case. The
outcome will help determine who's on Armstrong's team of experts
and their roles. U.S. District Judge Joseph J. Farnan Jr., who is
overseeing the case in Wilmington, Del., is scheduled to hear the
objections today. Also during today's hearing, Armstrong's new
$400 million loan from Chase Manhattan Bank will come before
Farnan for final approval. He granted preliminary approval on Dec.
7.

The Asbestos Claimants Committee was appointed by the U.S.
Trustee's Office to represent the interests of people suing
Armstrong for alleged injury from Armstrong's asbestos insulation.
Lancaster, Penn.-based Armstrong faces 173,000 such claims, filed
in numerous federal and state courts nationwide. The company
blamed their growing number, the soaring cost of settling them and
the dim prospect of prompt relief from Congress for its bankruptcy
filing on Dec. 6. Without the filing, Armstrong-a floors and
ceilings maker-figured on spending up to $1.4 billion to settle
asbestos claims over the next six years. With the filing, the
asbestos claims against Armstrong are frozen for now meaning the
company is not paying settlements at this time-and its ultimate
expense remains to be determined by a single court, the bankruptcy
court. (ABI 16-Jan-2001)


BAZILLION: Shuts Down Operations and 150 Lose Jobs
--------------------------------------------------
Bazillion (www.bazillion.com), a Seattle-based broadband
communications company, apparently shut down Thursday night,
leaving 150 employees without a job, according to
LocalBusiness.com. When reached at the Bazillion offices, chief
executive officer, Jamie Howard said, "That's something I can't
really comment on right now." Prior to Howard's comment,
LocalBusiness.com had received a message stating that the company
had closed, 150 employees had been laid off and that the company
was $20 million in debt. Company officials did not return calls
seeking to confirm or deny this information. Bazillion's e-mail,
web site and customer service lines also appeared to be
inoperable. Its corporate phone number is dead and its toll-free
number has been disconnected.

Bazillion had sought to break into what has become an increasingly
difficult market for start-ups, hoping to make headway in the
competitive digital subscriber line (DSL) or broadband space. The
company said it was dealt a harmful blow earlier this month when
Santa Clara, Calif.-based Covad Communications Group listed
Bazillion as one of its "distressed partners." (ABI 16-Jan-2001)


CHANCELLOR OF PENNINGTON: Involuntary Case Summary
--------------------------------------------------
Alleged Debtor: Chancellor of Pennington, Inc.
                c/o Sabal Investors, LLC
                98 West Street
                Needham, MA 02494

                      or
                
                143 West Franklin Avenue
                Pennington, New Jersey

Involuntary Petition Date: January 16, 2001

Case Number: 01-0017                Chapter: 11

Court: District of Delaware

Petitioners' Counsel: Duane Morris & Heckscher LLP
                      1100 N. Market St., Suite 1200
                      Wilmington, DE 19801
                      302-657-4900


Petitioners:

   Entity                        Nature of Claim      Claim Amount
   ------                        ---------------      ------------

CareMatrix of                    Unpaid development     $1,430,813
Massachusetts, Inc.              and management fees
197 First Avenue                     
Needham, MA 02494
Attention: General Counsel

National Environmental           Unpaid charges for         $1,545
Consulting                       services
60 Rockwood Road
Norfolk, MA 02056
Attention: Mr. Greg Schneider

Mr. John, Inc.                   Unpaid Charges for         $3,060
200 Smith Street                 services
P.O. Box 130
Keasbay, NJ 08832
Attention: Mr. Gary Weiner


CROWN VANTAGE: Court Approves Sale of Crown Paper Assets to KPS
---------------------------------------------------------------
Crown Vantage Inc. (OTC Bulletin Board: CVANQ) announced that the
Bankruptcy Court approved the sale of substantially all of the
specialty, packaging, text and cover papers business of Crown
Paper to a wholly owned subsidiary of KPS Special Situations Fund,
LLC.  The sale includes the name "Curtis Papers, Inc." which shall
be the KPS subsidiary name after the sale closes. As previously
announced, Crown Paper and KPS had signed a Definitive Asset
Purchase Agreement on December 28, 2000, relating to the sale of
these assets.

The Definitive Asset Purchase Agreement contemplates that a
closing on the sale would take place on or before Feb 28 2001,
subject to the satisfaction or waiver of the conditions to closing
contained in the Definitive Asset Purchase Agreement.


DIMAC HOLDINGS: Sells AmeriComm Assets to Former CEO
----------------------------------------------------
DIMAC Holdings, Inc. completed the sale of certain assets of its
AmeriComm Direct Marketing Inc. subsidiary to a group headed by J.
David Craig, former President and Chief Executive Officer of the
AmeriComm Direct Marketing Division of AmeriComm Direct Marketing
Inc., former key managers, and a group of private investors.

The sale was consummated on December 29, 2000, when Craig's group
assumed certain liabilities and purchased substantially all of the
assets of AmeriComm's operations in Norfolk, VA, Louisville, KY,
Denver, CO, Mountainside, NJ, Clifton, NJ, and Ft. Lauderdale, FL.

The new owner will retain the same trade names and has agreed to
hire substantially all of the Company's employees.

Robert "Kam" Kamerschen, Chairman and Chief Executive Officer,
said: "The completion of this sale is an important achievement and
reflects our ongoing activities to substantially improve
profitability, eliminate excess debt on our balance sheet, and
position the Company to lead the value-added direct response
marketing services industry as we prepare to emerge from Chapter
11."

DIMAC's Plan of Reorganization, which involved the sales of
DIMAC's non-core assets, was approved by the U.S. Bankruptcy Court
in Wilmington, Delaware, on December 19, 2000 and is expected to
become effective in early February, at which time the Company
would formally exit Chapter 11. The Plan was consensual, having
received the support of all major constituencies, including the
Company's secured bank lenders and its Official Unsecured
Creditors Committee.

DIMAC Marketing Corporation provides a comprehensive range of
integrated and insightful direct response marketing solutions,
which are supported by creative strategy/agency services, database
strategy/ management services, value-added direct response
management and fulfillment services, and "Total Program
Management" direct mail services and products.


EDISON FUNDING: Fitch Lowers Utility-Affiliate's Ratings to CC
--------------------------------------------------------------
Fitch lowered Edison Funding Co.'s (EFC) senior debt rating to
`CC' from `CCC' following similar actions by Fitch for Southern
California Edison Co. (SCE) and Edison International (EIX) based
on nonpayment of certain debt (which was lowered to `D') and trade
obligations. A `CC' rating indicates that default of some kind
appears probable. The rating remains on Rating Watch Evolving.

Edison Funding Co. is an indirect, wholly owned non-regulated
subsidiary of Edison International. EFC's ultimate parent, EIX,
does not guarantee EFC's debt; however, under tax-sharing
agreements with EIX, EFC receives payments for tax benefits used
by EIX and pays EIX for tax liabilities. EFC relies on significant
cash tax benefit payments from its parent EIX that may be
jeopardized in the current operating environment affecting SCE and
EIX.

SCE has significant cash needs almost daily. The next series of
debt coming due includes certain commercial paper notes maturing
this week. Given today's announcement, it is unlikely this debt
will be paid on a timely basis.

Great uncertainty remains, even if a deal is brokered with large
power suppliers and acted upon by the California legislature. If a
deal is reached, there is no guarantee that SCE will receive
sufficient cash to make timely debt and trade payments. Further, a
small group of unpaid suppliers could file a petition for an
involuntary bankruptcy, even if the principal group of creditors
reaches an agreement. Unless a rescue package emerges to provide
immediate cash, a voluntary filing may become SCE's (and as a
result EIX's) most expedient option.

Negotiations to structure long-term purchase and supply agreements
continue in Washington and California. The California legislature
is also attempting to remedy California's dysfunctional market and
facilitate any long-term deal reached with suppliers.

Key issues to be resolved within an extremely tight time frame
include the future cost of procuring power, recovery of past and
future costs for the utilities, recovery of Qualifying Facility
costs, and the valuation and ownership of generation within the
state. Resolution will likely need to come within the next two
weeks.


EDISON FUNDING: Moody's Lowers Senior Unsecured Debt Rating to B2
-----------------------------------------------------------------
Moody's Investors Service lowered the senior unsecured rating of
Edison Funding Company from Baa3 to B2.  It also lowered the
commercial paper rating from P3 to Not Prime.  B2 senior unsecured
rating remains under review for possible downgrade.

The rating action came after affiliate company Southern California
Edison Company (SCE) decided to temporarily suspend payment on a
$200 million principal repayment obligation due January 17.  It
also suspended payment on $30 million of associated interest.  The
action constitutes an event of default under SCE's unsecured
indenture, and immediately triggers a cross default to credit
facilities at SCE and its parent company Edison International
(EIX), Moody's said.  These actions resulted in Moody's lowering
the senior unsecured debt rating for SCE to Caa2 and the senior
unsecured debt rating for Edison International to Caa3.  Both
ratings are under review for possible downgrade.

An SCE or EIX default does not trigger a default at Edison Funding
Company, Moody's said, but there Edison Funding Company, EIX, and
SCE are linked through their tax sharing agreement, which provided
Edison Funding with a material portion of its cash flow in recent
years. Edison Funding Company has independent sources of liquidity
on its balance sheet including approximately $100 million of cash
as well as liquid investments, including its investments in
affordable housing projects, Moody's said.

Headquartered in Irvine, California, Edison Funding Company is an
indirect subsidiary of EIX and an affiliate of SCE.


EDISON MISSION: Off CreditWatch; S&P Lowers Ratings
---------------------------------------------------
Business Wire, January 17, 2001

Standard & Poor's lowered its ratings on Edison Mission Energy
Co.(EME) as follows:

     * EME's issuer credit rating to triple-'B'-minus from single-
       'A'-minus;

     * EME's senior unsecured debt to triple-'B'-minus from
       single-'A'-minus;

     * EME's commercial paper program to 'A-3' from 'A-2'; and

     * EME's preferred securities to double-'B' from triple-'B'.

The ratings were removed from CreditWatch Negative where they were
placed on Dec. 13, 2000. The outlook is stable.

Standard & Poor's also today lowered its ratings on EME
subsidiaries as follows:

     * Midwest Generation LLC's (MG) series A, $333.5 million
       pass-through certificates due 2009, and series B, $813.5
       million pass-through certificates, due 2016, to triple-'B'-
       minus from single-'A'-minus;

     * Edison Mission Midwest Holdings Co.'s (EMMH) issuer credit
       rating to triple-'B'-minus from triple-'B', and EMMH's
       revolving credit facilities to triple-'B'-minus from
       triple-'B';

     * Midwest Funding LLC's senior-secured bank notes rating to
       triple-'B'-minus from triple-'B'.

The ratings were removed from CreditWatch Negative where they were
placed on Dec. 13, 2000. The outlook is stable.

At the same time, Standard & Poor's removed its triple-'B'-minus
rating on Edison Mission Energy Funding Corp. from CreditWatch
Negative where it was placed on Dec. 21, 2000. The outlook is
stable

The rating actions follow the revision of EME's company structure
into a special-purpose entity that is bankruptcy remote from its
parent, Edison International (EIX). On Jan. 16, 2001, Standard &
Poor's downgraded its issuer credit rating on Edison International
to double-'C' from triple-'B'-minus (see related article) and
placed it on CreditWatch with negative implications. This new
structure is designed to ring-fence EME and affiliates from the
possible bankruptcy or further credit downgrade of EIX. The EME
ratings are based primarily on the stand-alone creditworthiness
and the perceived disincentives of the parent or its creditors of
attempting to file EME into bankruptcy. EME has also adopted
certain legal clauses to its constituent documents that permit a
single-purpose entity classification.

Though ring-fenced subsidiaries are often not rated appreciably
higher than their parents for various economic and legal reasons,
the extraordinary circumstances surrounding the California
electricity market, the economic self-sufficiency of EME, the
rationale for implementing the ring-fencing structure, and the
ring-fencing provisions themselves allow Standard & Poor's more
flexibility in this case.

Standard & Poor's has assigned EME a rating higher than that of
EIX primarily because of Standard & Poor's conclusion that
creditors to EIX, and EIX itself, have numerous economic
incentives not to file EME into bankruptcy following a EIX
bankruptcy filing. This conclusion is based on the incremental
liabilities that EME would incur from a bankruptcy filing that
would materially reduce its value to EIX creditors, the potential
loss of value of the going concern, and the fact that generally
all of EME's assets are already encumbered with senior liens at
the project level. These liabilities would be substantial and
would likely include damages due to breach of energy trading and
marketing hedges, equity commitment guarantees, debt service
reserve replenishment obligations, lease guarantee obligations
related to EME Midwest assets and general re-organizational costs.
Moreover, an EME bankruptcy event would require EIX to cover
additional material obligations of EME that would further dilute
the financial resources available to EIX creditors. Standard &
Poor's concluded that were an otherwise financially sound EME to
file for bankruptcy, the adverse financial and contractual
consequences of such a filing would likely outweigh any perceived
advantages.

As part of the ring-fencing restructuring, EME has adopted a
restriction limiting its ability to declare dividends to EIX, and
has appointed an independent manager whose assent is required for
EME to file itself into bankruptcy. The dividend restriction can
both protect and improve EME's financial position and its ability
to meet its obligations under its guarantees.

The ring-fenced structure should protect EME in all but extreme
cases from rating downgrades that Standard & Poor's may take with
respect to EIX.

The EME rating reflects the following risks:

    --  Project risk concentration from four major merchant
        investments: Homer City (Edison Mission Holdings: issue
        rating triple-'B'-minus/Stable); EMMH; First Hydro (U.K.);
        and the Fiddler's Ferry and Ferrybridge (FFF: U.K.). These
        entities account for about 62% of cash flow.

    --  Cash flows to EME are structurally subordinate to project
        level debt and exposed to any potential re-leveraging of
        that debt.

    --  The increased scope of EME's business, which now includes
        large coal-fired generation, electricity trading and
        marketing, and the supply and distribution business may
        stretch existing core competencies.

    --  An aggressive asset acquisition strategy over the past two
        years may result in a debt burden that may be difficult to
        cover comfortably in the long run.

Nonetheless, the following strengths adequately offset the risks:

    --  A portfolio of investments, including many well-performing
        contract-revenue projects, which will tend to minimize
        volatility of cash flow from growing merchant investments.

    --  A cash balance, as of Nov. 30, 2001 of $699 million that
        gives EME some financial flexibility;

    --  A corporate total recourse debt-to-adjusted capitalization
        ratio, as of Dec. 31, 2001, of 47-49%;

    --  EME's long-term excellent management record of project
        development and operations, which continue to limit       
        operations risk;

    --  Continued strong performance of Homer City (17% of cash
        flow) due in part to capacity shortages in the
        Pennsylvania-New Jersey-Maryland markets and high gas
        prices that have driven electricity prices up;

    --  Continued strong performance of the First Hydro hydro
        project, which provides about 10% of cash flow; and


    --  The 2000 acquisition of Citizens Power that should provide
        EME with a much needed centralized, electricity marketing
        organization to manage EME's U.S. merchant operations.

EME is an international power developer, based in Irvine, Calif.,
with investments in 77 projects totaling 28,827 MW of generation
capacity (22,693 net MW).

                         OUTLOOK: STABLE

A record of receiving predictable cash distributions from a broad
portfolio of well-operating projects, moderate corporate recourse
debt, and expectations that distributions will continue to support
a stable outlook. Moreover, the only fundamental change in EME's
credit profile comes from the loss of its parent support.
Nonetheless, should underlying project cash flows become more
volatile, or if merchant risk increases, or trends downward, or
both, a ratings downgrade could follow, Standard & Poor's said.


eMUSIC: Job Cuts Include 3 Executives and 66 Workers
----------------------------------------------------
Paid download site Emusic.com said Friday that it cut a third of
its staff as part of a sweeping restructuring, according to a
newswire report. The job cuts-which affected about 66 workers-came
about eight months after 20 percent of the Redwood City, Calif.,
company's workforce was slashed last June. EMusic also announced
that three executives, including the company's CFO and acting COO,
would leave the company, and that its two New York City offices
would be consolidated into one. The company said the moves would
save it $16 million yearly. EMusic said it would take charges in
both the fourth and first quarters in connection with the
reorganization, totaling about $1 million. The firm said it had
$16 million in cash on hand at the end of 2000 but lost $17
million in the third quarter alone. (ABI 16-Jan-2001)


FAMILY GOLF: Puts All Assets On Auction Block
---------------------------------------------
Family Golf Centers Inc. (FGC), the leading operator of full-
service golf centers and ice-skating facilities, announced its
intention to sell its businesses in whole or in parts, according
to a newswire report. The company is using its consultant, Keen
Realty Consultants Inc., to handle the marketing and auction
process.

FGC's assets consist of a portfolio of income-producing driving
ranges, golf courses, ice rinks and family entertainment centers
in the United States and Canada. Additionally, FGC is selling its
interest in four distinct businesses, including Confidence Golf,
Pardoc Vending, Pinnacle Entertainment, and the Campgaw Ski Area.

An auction has been scheduled for Feb. 5, with a qualifying bid
deadline of Feb. 9. Offers are now being accepted. Inquiries
regarding the availability of the Family Golf Center locations
should be addressed to Keen Realty Consultants Inc., 60 Cutter
Mill Road, Ste. 407, Great Neck, NY 11021-3104, phone: (516) 482-
2700 ext. 228, fax: (516) 482-5764, e-mail:
krc@keenconsultants.com, Attn: Harold Bordwin and Craig Fox. (ABI
16-Jan-2001)


GARDEN.COM: Releases Details of Asset Sale to Walmart and Burpee
----------------------------------------------------------------
Garden.com (Nasdaq: GDEN) announced the completion of the sale of
its content and brand assets, transferring ownership of these
assets to industry-leading Walmart.com and the Burpee Holding
Company, the parent company of W. Atlee Burpee & Co.,
respectively.  Garden.com was previously a leading provider of
online gardening content, information and services.  This release
comes approximately two months after Garden.com's announcement
that it was unable to raise additional funding to continue
operations and it would conduct a phased shut-down and company
asset sale.

"While all of us at Garden.com deeply regret that we will not
personally be able to see through our original vision, we are
particularly excited that Garden.com will have a chance to 'live'
through two of the most highly respected companies existing
today," remarked Cliff Sharples, chief executive officer and
president of Garden.com. "We are confident that through these
acquisitions, gardening enthusiasts everywhere will continue to
have access to and benefit from the valuable assets the company
has developed over the last five years."

Walmart.com, the e-commerce site for the nation's largest
retailer, has acquired all of Garden.com's major content assets,
including editorial, interactive and film content. In a related
release, Walmart.com announced that it will look for ways to
integrate parts of the content into Wal-Mart's garden centers
nationwide as well as, on a limited basis, into the Walmart.com
site this year, with fuller integration into the site next year.

Burpee Holding Company, the parent company of W. Atlee Burpee &
Co., America's oldest and one of the most trusted names in
gardening for the last 125 years, has purchased Garden.com's brand
assets, including the company's url (www.garden.com), and certain
assets relating to customer information. The transfer of an
individual's customer/member information is subject to providing
prior notice and providing the individual the right to exclude his
or her individual information. Burpee plans to continue to provide
Garden.com customers with the same high-level of service, high-
quality products and up-to-date gardening content necessary to
achieve success in all their gardening endeavors.

Garden.com received an aggregate amount of $4,425,000 for these
two asset groups, of which approximately $800,000 was deposited in
escrow and is subject to a possible reduction based on a post-
closing adjustment, and $500,000 of which had been previously
deposited with the Company

Garden.com plans to continue to evaluate bids and other strategic
alternatives for its other assets, including its hardware and
equipment, TRELLIS, its supply chain technology, and Green
Cheetah, its 80% owned subsidiary which is developing software
designed to enhance database performance.

Assuming that the Company receives total proceeds of $4,425,000
from its completed sales to Walmart.com and Burpee, and depending
on the amount of proceeds that the Company may receive from sales
of its other assets, the Company currently estimates that it will
distribute between $0.10 per share and $0.25 per share to its
stockholders. However, the Company at this time cannot predict the
ultimate nature, amount or timing of any distributions. If the
Company is unable to settle its liabilities as currently
contemplated or to achieve a sufficient value for its remaining
assets or fails to adequately reserve for the remaining costs of
its Plan of Liquidation, the Company's stockholders could receive
a distribution less than the range indicated above or no
distribution.

The company calculated the estimated distribution range to
stockholders by estimating the value of its remaining assets,
including cash and the assumed proceeds from the anticipated sale
of remaining assets, less amounts owed to creditors and amounts
reserved to execute on the Plan of Liquidation. Garden.com
reported a balance of approximately $12.3 million for cash and
cash equivalents and investments at September 30, 2000. The
company also reported approximately $5.5 million in current
liabilities on that same date. In addition to the satisfaction of
some of these liabilities, the Company has incurred certain cash
related expenses and payments subsequent to September 30, 2000.
These unaudited estimates include operating costs of $4.5 million
incurred both before and after the Company announced its phased
shut-down on November 15, 2000, severance payments of $2.7
million, contractual payments for its system architecture upgrade
of $1.2 million, and costs related to the termination of certain
marketing programs of $300,000. On an unaudited basis and prior to
the closing of the above referenced asset sales, the Company
estimates its current cash position at approximately $2.8 million
with estimated current liabilities of $2.7 million, including a
reserve to execute on the Plan of Liquidation. The amount of the
ultimate distribution to stockholders will be affected by certain
factors, including, without limitation, the successful sale of the
Company's remaining assets, the satisfaction of outstanding
liabilities and the adequacy of the reserve for the Plan of
Liquidation. Please see the Company's prior press releases and SEC
filings, including, without limitation, its Form 10-K for the year
ended June 30, 2000, Form 10-Q for the quarter ended September 30,
2000 and Proxy Statement filed in connection with the annual
meeting of stockholders held on January 15, 2001 for additional
detail of certain of these payments.

Additionally, Garden.com announced that it filed a Certificate of
Dissolution with the Delaware Secretary of State, effective
January 16, 2001. The Certificate of Dissolution effects the Plan
of Liquidation and Dissolution approved at Garden.com's annual
stockholders meeting on January 15, 2001. At the annual meeting,
10,198,970 shares, or approximately 57.5% of the outstanding
shares, were voted in favor of the Plan of Liquidation and
Dissolution and 358,000 shares were voted against the Plan of
Liquidation. Also at the annual meeting, two directors were
elected for terms expiring at the 2003 annual meeting and the
appointment of Ernst & Young LLP as the company's auditors for
fiscal 2001 was ratified.

Garden.com also filed to terminate its reporting obligations with
the SEC. As a result, Garden.com no longer will be required to
file reports on Form 10-K, Form 10-Q or Form 8-K with the SEC.

Effective upon the filing of the Certificate of Dissolution and
the filing of the notice to terminate its reporting obligations
with the SEC, Garden.com closed its stock record books and
discontinued recording transfers of its common stock. Only holders
of record of the Common Stock as of the close of business on
January 17, 2001 will be entitled to receive any liquidating
distributions pursuant to the Plan of Liquidation and Dissolution.

About Garden.com

Founded in December of 1995, Garden.com has been a leading
resource for consumers in the $47 billion home gardening market.
Through its flagship website, garden.com, and a company branded
catalog, Garden.com has provided consumers a one-stop-shop through
which they can access a wide variety of gardening information and
services, purchase gardening and garden-related products, and
interact with an online gardening community.


GLOBALSTAR: Suspends Debt Payments Indefinitely
-----------------------------------------------
Globalstar (GSTRF:NASDAQ) announced that it suspended indefinitely
principal and interest payments on all of its funded debt,
including its credit facility, vendor financing agreements and
Senior Notes, as well as dividend payments on its preferred stock.  
The debt suspensions, which were endorsed by Globalstar's
partners, are designed to give the company sufficient funds for
the continuation of its marketing and service activities, and to
ensure uninterrupted continuation of its satellite-based
communications services.

The company's service provider partners have reaffirmed their
confidence in Globalstar's business and technology, as well as
their commitment to maintain and expand operations in their own
territories.  

The partners further believe that Globalstar's superior technology
and flawless operation underscore its long-term value as a system
that provides high quality voice and data services around the
world. Since Globalstar's service introduction in 2000, Globalstar
and Qualcomm engineers have developed a number of new data
applications which are well-suited to the Globalstar system,
holding further promise for Globalstar's future growth.

Globalstar is continuing to meet its obligations to its employees,
customers, and trade suppliers in the normal course, and believes
it has sufficient cash on hand ($195 million as of December 31,
2000) to meet these obligations on an ongoing basis. The
suspension of principal and interest payments on its funded debt
will conserve approximately $400 million of the company's cash for
the year 2001.

Globalstar believes that the suspension of these payments will
enable the company to have sufficient cash to fund its operations
into the year 2002, giving its partners additional time to
implement their new marketing initiatives, including new vertical
market sales programs and expanded marketing of data services.  

Globalstar did not make the $45 million interest and principal
payments due yesterday on its Loral credit facility and under its
vendor financing agreements with Qualcomm and Loral.  

Globalstar has retained The Blackstone Group as its financial
adviser to assist in developing initiatives as the company moves
forward, including restructuring Globalstar's debt, identifying
funding opportunities and pursuing other strategic alternatives.  

Globalstar, led by founding partner Loral Space & Communications,
is a partnership of the world's leading telecommunications service
providers and equipment manufacturers, including co-founder
Qualcomm Incorporated, Alenia, China Telecom (HK), DACOM,
DaimlerChrysler Aerospace, Elsacom (a Finmeccanica Company),
Hyundai, TE.SA.M (a France Telecom/Alcatel company), Space
Systems/Loral, and Vodafone Group Plc. For more information, visit
Globalstar's web site at www.globalstar.com.


GRAHAM FIELD: Planning to Move Headquarters to Atlanta
------------------------------------------------------
Graham Field Health Products Inc., which 13 months ago filed for
bankruptcy after a major acquisition spree, announced on Monday
that it would relocate its corporate headquarters to Atlanta later
this year. The company, which began operating on Long Island,
N.Y., two decades ago, said about 100 jobs at its corporate
offices in Bay Shore, N.Y., would be moved and combined with an
existing sales office in Atlanta by the end of April. The company
said it plans to maintain its manufacturing facility in Bay Shore,
where patient walkers and bathroom safety devices are made.  

The move is being made to further consolidate the company and save
money as Graham-Field struggles to emerge from chapter 11
bankruptcy, which it entered in December, 1999. Company Chief
Executive Officer David Hilton said he did not know when the
company would emerge from bankruptcy. Graham-Field, once one of
Long Island's largest companies with sales as recently as 1998 of
about $400 million, as well as one of the country's largest
manufacturers of wheelchairs, currently employs about 1,500 people
nationwide. In 1998, its stock price was as high as $20 a share.
The company has laid off about 250 to 300 people in the last year
or so. (ABI 16-Jan-2001)


HARNISCHFEGER INDUSTRIES: Beloit Repudiates Iron Mountain Contract
------------------------------------------------------------------
Beloit Corporation asks the Court to authorize Beloit to reject
the Records Management and Service Agreement between Beloit
Pulping and Iron Mountain under which Beloit secured space for
hard copy retention of files on an as-needed basis.

Beloit tells the Court it no longer needs the services under the
Agreement because substantially all Beloit's operating assets have
been sold and substantially all of its operations have terminated.
In the absence of rejection, Beloit's estate would be needlessly
saddled with administrative liabilities under section 365(d)(10)
of the Bankruptcy Code.  

Beloit asks that the rejection be effective as of August 31, 2000.
(Harnischfeger Bankruptcy News, Issue No. 36, Bankruptcy
Creditors' Service, Inc., 609/392-0900)


ICG COMMUNICATIONS: Trustee Balks at Zolfo's Engagement
-------------------------------------------------------
The U. S. Trustee, through Assistant U. S. Trustee Frank J. Perch,
objected to ICG Communications, Inc.'s application to employ Zolfo
Cooper LLC as bankruptcy consultant and special financial advisor
to these Chapter 11 estates. The Application proposes a flat bonus
or transaction fee of $1.5 million to be payable upon virtually
any outcome of these cases, without regard to return to creditors,
the benefit of Zolfo's services to the estate, or the extent of
any value added by those services.

The U. S. Trustee also objected to the provisions of the
engagement letter and application which, in effect, pre-approves
the fee to be received by Zolfo. The U. S. Trustee took the
position that these fees should be judicially reviewed and
approved only at the time of the final fee application by Zolfo.

Mr. Perch also pointed out that the U. S. Trustee believes Zolfo
is not "disinterested" in these cases due to its connections with
Chase and/or Catalyst Equity Fund. The U. S. Trustee argued that
the disclosures in the application are vague and ambiguous, and as
a result, further discovery and disclosure were appropriate before
this employment could be approved.

Finally, the U. S. Trustee objected to the proposed retention of
three financial advisors (Wasserstein, Gleacher and Zolfo) whose
services would overlap, as the U. S. Trustee claimed was apparent
from a facial comparison of the applications, and who will charge
overlapping and excessive fees to the estate, including
transaction or success fees more payable to more than one entity
for the same transaction or event. (ICG Communications Bankruptcy
News, Issue No. 3; Bankruptcy Creditors' Service, Inc.,609/392-
0900)


INTELLIGENT DETECTION: Sells Assets to Pay Defaulted Debts
----------------------------------------------------------
Intelligent Detection Systems, Inc. told Reuters Wednesday it sold
its Caduceon breath analysis unit, and is in talks to sell its
mining-company Internet marketplace unit GeoCommerce to a publicly
traded company to raise funds for the repayment of C$3.6 million
($2.4 million) in debt. IDS is also in default of its C$1.6
million bank credit and C$2 million in loans from Research
Corporation Technologies, Inc.

IDS is also in talks to sell its analytical and security division
unit, Reuters relates.  It plans to keep and expand its
instrumentation, survey and power control divisions, which
represents 80% of revenues.  The company develops and manufactures
sensory technology such as explosives detectors.


IMPERIAL SUGAR: Bankruptcy Court Approves First Day Motions
-----------------------------------------------------------
Imperial Sugar Company (AMEX:IHK) announced it obtained approval
from the U.S. Bankruptcy Court in Delaware regarding various
motions it filed in connection with its chapter 11 bankruptcy
petition filed yesterday. At the same time, the Company filed both
its Plan of Reorganization ("Plan") and Disclosure Statement. The
hearing on confirmation of its Plan is set for May 2, 2001.

The Company was authorized by the Bankruptcy Court to pay all pre-
petition employee compensation and to continue its employee
compensation and benefit plans. In addition, the Company received
limited approval to pay pre-petition trade claims of its necessary
on-going suppliers and trade creditors who agree to extend credit
on ordinary terms. The Company is also authorized to honor its
contracts with growers who supply sugarbeets to the Company and
complete the contract payments due growers for sugarbeets
delivered pre-petition. Finally, the Bankruptcy Court approved the
motion for the Company to honor pre-petition contracts, agreements
and payment obligations to customers and to continue customer
programs post-petition.

The Bankruptcy Court approved the Company's request for interim
debtor-in-possession financing ("DIP") of $30.0 million and
accounts receivables securitization financing of $110.0 million,
pending a final hearing on the Company's $85.0 million DIP and
accounts receivables securitization program set for February 6,
2001. The Company's current unused availability under the interim
DIP facility, combined with cash on hand and availability under
other facilities totals approximately $40.0 million.

Imperial Sugar Company is the largest processor and marketer of
refined sugar in the United States and a major distributor to the
foodservice market. The Company markets its products nationally
under the Imperial(TM), Dixie Crystals(TM), Spreckels(TM),
Pioneer(TM), Holly(TM), Diamond Crystal(T) and Wholesome
Sweeteners(TM) brands. Additional information about Imperial Sugar
may be found on its web site at www.imperialsugar.com.


LERNOUT & HAUSPIE: Dictaphone Noteholders Press for Committee
-------------------------------------------------------------
Conseco Capital Management, Inc., Magten Asset Management Corp.,
and Green & Smith Investment Management LLC told the Court that
the Dictaphone case may be required to proceed independently, and
may even be adverse to, the Lernout & Hauspie Speech Products
case. The three companies are holders of Dictaphone Corp. 11-3/4%
Senior Subordinated Notes due 2005.

This Ad Hoc Noteholders' Committee, represented by Bruce R.
Zirinsky, Esq., and Gregory M. Petrick, Esq., of Calwalader,
Wickersham & Taft in New York, ask Judge Judith Wizmur to either
appoint an official committee of unsecured creditors for
Dictaphone Corporation independently of the other cases, or in the
alternative, to appoint an official committee of the holders  
of Dictaphone Corporation's 11-3/4% Senior Subordinated Notes due
2005.

The members of the Noteholders' Committee hold in excess of $56
million in the principal amount of the Dictaphone Notes
outstanding, and may comprise one of the largest groups in the
Dictaphone case.

Since the inception of these cases, the Noteholders' Committee
stated they have urged the Court, the Office of the United States
Trustee, and the Debtors that the interests of justice, fair play,
and public perception require that the Dictaphone creditors have
separate official representation in these cases. The Committee
gave the following reasons:

     (a) Dictaphone is a one hundred and twenty-five year old,
United States- based corporation that has its own operations and
creditors independent of L&H;

     (b) The businesses of L&H and Dictaphone are not integrated,
but L&H management intends to pursue a consolidation of the
businesses in spite of the Chapter 11 filings and potential damage
to Dictaphone creditors;

     (c) Noteholders and other creditors of Dictaphone have
substantial claims against L&H;

     (d) L&H filed for Chapter 11 in the United States to obtain
the benefit of the automatic stay, but its Belgian assets are not
pledged to secure the financing obtained under the auspices of
this Court, and it is clear that both L&H and the Belgian courts
intend to administer its assets in some significant manner under
Belgian law;

     (e) None of Dictaphone's assets are in Belgium or are subject
to the Belgian proceeding;

     (f) Dictaphone creditors have significant derivative claims  
against L&H that will not be pursued by the Debtors;

     (g) The ability to contest the enforceability of the
Dictaphone Guaranty is of critical importance to the Dictaphone
creditors and cannot be adequately investigated by the L&H debtors
and their joint counsel;

     (h) L&H and its management face substantial allegations of
fraud and mismanagement;

     (i) All three Debtors are currently jointly represented by
counsel who is inherently conflicted in serving different clients
with conflicting interests; and

     (j) The Creditors' Committee is dominated by L&H Creditors
and cannot be relied upon to adequately represent Dictaphone's
interests.

On May 5, 2000, Dictaphone was acquired by L&H. At the time of the  
acquisition L&H obtained financing in the amount of approximately
$450 million from a group of European banks. The business plan for
L&H and Dictaphone contemplated the integration of L&H's software
and development expertise with Dictaphone's products and customer
base. However, efforts to integrate the business and operations of
Dictaphone and L&H never advanced in any meaningful way. Each
Debtor has its own workforce, accounting records, products, and
business facilities, and essentially operate independently of each
other. In short, the Committee asserts that these are stand-alone
companies which are easier to sever than to integrate at this
point.

In particular, the Committee is concerned about the discovery that  
Dictaphone has purportedly guaranteed $200 million of the debt
owed by L&H under the L&H Credit Facility. According to the
Committee, there had been no prior disclosure of this guaranty,
and the validity of the Dictaphone guaranty and its enforceability
is a central issue for Dictaphone's creditors.

The Committee asserted its belief that the primary thrust of the  
strategy of filing for Chapter 11 was to enable L&H to gain the
benefit of the automatic stay. However, having obtained the
benefit of the automatic stay, the Committee believes there
remains little, if any, reason for L&H's bankruptcy case in the
United States as L&H's operations are primarily based in Belgium,
and its only claimed asset in the United States are stock
ownership of its subsidiaries and certain contract and licensing
rights.

The Committee reviewed the appointments of the United States
Trustee to a single committee of unsecured creditors to represent
the interests of unsecured creditors in all three jointly
administered cases. Of the nine entities appointed to this
Committee, six are creditors of L&H alone, three are creditors of
both L&H and Dictaphone, and three are creditors of Dictaphone
only. None are creditors of L&H USA. In light of this, the
Committee asks the Court to appoint the moving parties as either
an official committee for unsecured creditors of Dictaphone only,  
or in the alternative, as an official noteholders' committee.
(L&H/Dictaphone Bankruptcy News, Issue No. 3; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


LERNOUT & HAUSPIE: Can't Make Belgium Court's March 1 Deadline
--------------------------------------------------------------
Lernout & Hauspie Speech Products NV (L&H) won't be able to
organize an extraordinary shareholders meeting by the March 1
deadline set by the Ieper, Belgium, commercial court, the court-
appointed administrators told regional Flemish Radio yesterday,
according to The Wall Street Journal. The three administrators
told the radio station, "Because of the many practical, logistical
and legal complications, it won't be possible to meet that
deadline."

The law grants shareholders some time to respond to an invitation
to a general assembly, and the applicable Nasdaq rules make the
March 1 deadline unlikely, the administrators said. L&H was
ordered to organize an exceptional shareholders meeting by Judge
Michiel Handschoewerker of the Commercial Court in Ieper, as part
of a package to obtain bankruptcy protection. Potentially
thousands of shareholders are expected to attend. They all have to
be notified and a venue decided. A court official said that if the
company isn't able to meet the deadline it should apply for an
extension. (ABI 16-Jan-2001)


LERNOUT & HAUSPIE: Asks for Extension on Shareholder Meeting
------------------------------------------------------------
In Brussels, Belgian speech technology company Lernout & Hauspie
asked the Commercial Court in Ieper, where L&H is headquartered,
for an extension until early June of a court-ordered extraordinary
shareholders meeting, the court's head clerk Patrick Cauwelier
told Reuters Wednesday. The court had originally scheduled the
meeting to be held by March 1 as part of a grant of protection
from creditors for 6 months.  

Mr. Cauwelier said L&H cited logistical problems as one reason for
the extension request, and revealed the court was scheduled to
rule on the request today.


LOEWEN GROUP: Settles Dispute with Davis Park on Texas Lease
-------------------------------------------------------------
On or about August 20, 1999, LGII and Davis Park entered into an
Office Lease for the real property located at 3205 West Davis in
Conroe, Texas. The Office Lease was amended pursuant to a
Modification and Ratification of Lease dated September 14, 1999.
Under the Lease, LGII agreed to lease the Leased Property from
Davis Park from September 1, 1999 through August 31, 2002. The
base rent under the Lease is $15,586 per month.

In connection with their efforts to streamline administrative
structure and consolidate offices to reduce operating expenses,
The Loewen Group, Inc., relocated the functions performed at the
Leased Property and turned over possession of the Leased Property
to Davis Park on or before October 31, 2000. The Debtors tell the
Court that LGII has satisfied its obligations under the Lease  
through that date.  

However, the Lease provides that, in the event of a breach of the
Lease, Davis Park shall have the right to terminate the Lease and
recover from LGII rental loss from the breach less any amount that
could have been reasonably avoided, plus attorneys' fees, broker's
commission or finder's fees etc. Under the Lease, the base rent
owed by LGII from November 1, 2000 through August 31, 2002, the
term of the Lease, is $342,892.

After possession of the Leased Property was returned to Davis
Park, LGII and Davis Park began negotiating a consensual
termination of the Lease. The parties have since agreed to a
settlement. LGII has agreed, subject to Bankruptcy Court approval,
to pay Davis Park $190,000 in full satisfaction of LGII's
obligations under the Lease. The Settlement Agreement terminates  
the Lease and resolves the amounts payable by LGII under the
Lease.  

Because LGII and Davis Park entered into the lease after the
petition date, LGII is not able to reject the lease under section
365 of the Bankruptcy Code. In the circumstance, Davis Park is
entitled to assert an administrative expense claim for the amount
of its damages caused by LGII's breach of the lease. Moreover,
even if the lease was subject to such rejection, Davis Park's
claim would be approximately $187,000, the amount equal to one
year's rent as limited by section 502(b)(6) of the Bankruptcy  
Code. The Debtors reckon that the amount payable under the
Settlement Agreement is only slightly more than the amount of
claim under rejection.  

Based upon the existing market conditions, a real estate broker's
analysis and its own evaluation of the circumstances, LGII has
determined that its ability to assign or sublet the lease is
practically nonexistent.  

Therefore, the Debtors conclude, in the exercise of their business
judgment, that entry into the Settlement Agreement is in the best
interests of its estate and creditors. (Loewen Bankruptcy News,
Issue No. 32; Bankruptcy Creditors' Service, Inc., 609/392-0900)


LTV CORPORATION: Gets Okay to Pay Prepetition Customer Claims
-------------------------------------------------------------
The LTV Corporation received deposits or prepayments before the
Petition Date from certain customers for goods and services that,
as of the Petition Date, have not been delivered or provided to
such customers in full or in part. In addition, certain of the
Debtors' customers hold continent prepetition claims against the
Debtors for (a) rebates, discounts, contras, refunds, adjustments
9including adjustments to billing) and other credits relating to
sales made prior to the Petition Date; and (b) obligations arising
under existing warranties to replace goods sold prior to the
Petition Date that are defective, nonconforming or otherwise  
unacceptable to the Debtors' customers. The Debtors estimate that,
as of the Petition Date, the aggregate sum of the Deposits,
Credits and Warranty Claims was approximately $10,000,000.  

The success and viability of the Debtors' businesses are totally  
dependent upon the loyalty and confidence of their customers. The  
continued support of this constituency is absolutely essential to
the survival of the Debtors' businesses and the Debtors' ability
to reorganize. Any delay in honoring the Customer Obligations will  
severely and irreparably impair the Debtors' customer relations at
a time when the loyalty and support of those customers are
extremely critical. By contrast, honoring these prepetition
obligations will require minimal expenditure of estate funds and
will assist the Debtors in preserving key customer relationships
to the benefit of all parties in interest. Accordingly, to
preserve the value of their businesses, the Debtors sought and
obtained Judge Bodoh's authority to continue honoring all Customer
Obligations without interruption or modification. In addition, to
provide unnecessary assurances to the Debtors' customers on an on-
going basis, the Debtors also requested and obtained Judge's
Bodoh's authorization to continue honoring all obligations to
customers that arise from and after the Petition Date in the
ordinary course of their business. (LTV Bankruptcy News, Issue No.
2; Bankruptcy Creditors' Service, Inc., 609/392-0900)


MUSICMAKER.COM: Appoints 3 New Board Members and New CEO
--------------------------------------------------------
musicmaker.com, Inc. (NASDAQ NM: HITS) announced the appointment
of three new additional members to its Board of Directors, Seymour
Holtzman, James Mitarotonda and Joseph Wright, Jr., bringing the
total number of directors to seven. The company also said BCG
Strategic Investors and their affiliates have agreed to withdraw
their consent solicitation which had sought to, among other
things, elect a majority of the company's Board of Directors.

In addition, Mr. Holtzman will become Chairman of the Board, and
Mr. Mitarotonda will become President and Chief Executive Officer
following the resignation of the company's current Chairman, CEO,
and President, Devarajan Puthukarai, on January 18, 2001. As part
of this agreement, BCG also entered into a standstill agreement
with the company, pursuant to which BCG and its affiliates will
not purchase any additional shares of musicmaker stock or take any
other action to change the composition of musicmaker's board of
directors for a period of ninety days.

Commenting on the agreement, Mr. Puthukarai, who will remain on
the Company's Board of Directors stated, "This resolution is in
the best interests of the company and all of its stockholders. It
will allow us all to focus on our common goal of maximizing value
in the liquidation process for stockholders."

Mr. Mitarotonda stated, "We are pleased with this result. We look
forward to working together with the current directors, for the
benefit of all stockholders."


NBCI: As Many as 140 Heads to Roll
----------------------------------
NBCi will announce that it is laying off 100 to 140 staffers in
San Francisco, New York and Burbank, California, in an effort to
cut costs, a report from The Industry Standard said.  The report
said company representatives at NBCi neither confirmed nor denied
the information.  NBCi is the publicly-traded Internet joint
venture between NBC, CNET and others.

The Standard's sources, which were not identified, said the
layoffs will not be the last round of cuts as the company girds
for potential liquidation or acquisition. NBCi CEO William Lansing
had said August last year that the company planned to cut 20% of
800 employees by the end of 2000.  

The company's portal Snap.com was reborn as NBCi.com in September.  
In October, co-founder and president Edmond Sanctis resigned.  


NC SYSTEMS: Texas Judge Dismisses Bankruptcy Case
-------------------------------------------------
U.S. Bankruptcy Court Judge Robert Jones dismissed NC Systems,
Inc.'s bankruptcy case December 19, Jim McBride, writing for the
Amarillo Globe-News, relates.

The Amarillo U.S. District Court also issued a court order January
3 that allows NC Systems to sell $22,609 worth of equipment in
order to settle a Labor Department dispute over unpaid minimum
wages and overtime compensation.  The report by the Globe-News
said the Labor Department alleged that NC failed to pay minimum
wage and overtime to employees since October 16 last year.

NC Systems president Bob Bennett, whose family owns the business,
told the Globe-News, " Basically the company is closed and it's
not going to reopen."   NC Systems ceased operations the week
before Thanksgiving.


OWENS CORNING: Nixes Plastic Recycling Contract
-----------------------------------------------
Owens Corning sought and obtained permission from Judge Walrath to
reject and terminate a contract with Plastic Recycling Technology,
Inc. entered into in May 2000 for the sale by PRT and the purchase
by Owens Corning of Falcon pellets reclaimed polystyrene,
retroactive to December 31, 2000.

Under the terms of this agreement, Owens Corning agreed to ship
certain raw materials to PRT, PRT was to manufacture the raw
materials into pellets, and Owens Corning was to purchase the
pellets from PRT. Owens Corning purchases the raw materials used
in the manufacture of pellets from various third-party suppliers.
Approximately 80% of the raw materials consist of compressed bales
of expanded polystyrene which Owens Corning has historically
purchased from Falcon Foam Manufacturing, a division of Atlas  
Roofing Corporation. An agreement between Owens Corning and Falcon
under which Falcon supplied EPS to Owens Corning expired in August
2000.

Although the parties attempted to negotiate a new agreement for
Falcon's supply of EPS to Owens Corning, the negotiations failed
and Falcon informed Owens Corning that Falcon would dramatically
reduce the quantity of EPS supplied to Owens Corning, possibly
terminating Falcon's supply of EPS to Owens Corning altogether.

Owens Corning is not aware of any other suppliers that would
supply Owens Corning with the quantities of EPS needed by PRT to
produce the quantity of pellets specified in the contract.
Falcon's determination to reduce its supply of EPS to Owens
Corning makes the terms of the contract with PRT economically
disadvantageous to Owens Corning. While Owens Corning has the  
internal capacity and capability to produce limited quantities of
pellets and has always manufactured limited quantities of pellets
for its own use, Owens Corning believes that it will be able to
use its own production facilities to fully utilize any EPS
received from Falcon to produce pellets.

While Owens Corning can produce pellets for approximately $0.05
per pound, it is obligated under the contract to purchase pellets
for $0.13 cents per pound - a price more than double Owens
Corning's production cost. Accordingly, the Debtors have urged
Judge Walrath to permit then to reject the agreement with PRT as
in the best interests of their estates, creditors and interest
holders. (Owens Corning Bankruptcy News, Issue No. 8; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


PACIFIC GAS: S&P Lowers Ratings to CC
-------------------------------------
Standard & Poor's lowered its long-term corporate credit ratings
on PG&E Corp. and wholly owned utility subsidiary Pacific Gas &
Electric Co. to double-'C' from triple-'B'-minus. Additional
affected ratings are identified in the list below. The downgrades
reflect the heightened probability of the utility's imminent
insolvency and the resulting negative financial implications for
affiliated companies because:

-- Some of Pacific Gas & Electric's principal trade creditors are
demanding that sizable cash payments be made as a precondition to
the purchase of commodities necessary for ongoing business
operations;

-- Neither legislative nor negotiated solutions to the state's
utilities' financial meltdown appear to be forthcoming in a timely
manner, which continues to impede access to financial markets for
the working capital needed to avoid insolvency;

-- Southern California Edison Co.'s decision to default on its
obligation to pay principal and interest due on Jan. 16, 2001
diminishes the prospects for Pacific Gas & Electric's access to
capital markets; and

-- Pacific Gas & Electric, as a participant in California's
generation markets, may be obligated by the California Power
Exchange's tariff to absorb a portion of Southern California
Edison's defaulted Jan. 16 payment to the Power Exchange following
that utility's decision to suspend Power Exchange payments.

Each of the affected ratings is on CreditWatch with negative
implications. The negative CreditWatch listing reflects
expectations that the ratings will be further downgraded as PG&E's
financial condition deteriorates.

Standard & Poor's also downgraded the rating on Pacific Gas &
Electric Co.'s preferred stock series A-E, G-I, U, Y and Z, to 'D'
from 'BB' following the company's announcement that it will not
declare the regular preferred stock dividend that would have been
payable on Feb. 15, 2001.

Although there is still a possibility that federal or state
officials will act to rehabilitate the state's utilities'
financial health, such prospects appear increasingly remote.
California's governor is opposed to providing Pacific Gas &
Electric and Southern California Edison with rate relief beyond
the nominal one cent per kWh rate increase adopted by the Public
Utilities Commission at its Jan. 4, 2001 meeting.

The legislature is in special session to address the state's power
crisis and its utilities' weak financial condition. To date,
however, the legislature has prioritized long-term solutions for
California's power markets ahead of the utilities' immediate
financial needs. Consequently, capital markets remain unwilling to
advance funds to the utilities, which could scuttle the
legislature's long-term plans.

Pacific Gas & Electric's risk of insolvency is directly related to
the mechanisms underlying California's restructuring of its
electric industry. The legislative and regulatory framework for
that restructuring led to sizable imbalances between Pacific Gas &
Electric's operating expenses and revenues. An immediate plan that
provides sufficient confidence to the capital markets that lenders
will be repaid for existing and future debt obligations remains
the only way to restore the state's utilities to a sound financial
footing, Standard & Poor's said.

    RATINGS LOWERED                        TO           FROM
    PG&E Corp.
      Corporate credit rating              CC/C         BB-/A-3
      Commercial paper rating              C            A-3
    Pacific Gas & Electric Co.
      Corporate credit rating              CC/C         BBB-/A-3
      Commercial paper                     C            A-3
      Senior secured debt                  CCC          BBB
      Senior unsecured debt                CC           BBB-
      Preferred stock                      D            BB
      Shelf senior secured/unsecured
        (prelim)                           CCC/CC       BBB/BBB-
      Shelf debt pfd stock (prelim)        D            BB
    PG&E Capital I, II, III, IV
      Corporate credit rating              CC           BBB-
      Preferred stock                      C            BB


PACIFIC GAS: Moody's Lowers Unsecured Debt Ratings to Caa2
----------------------------------------------------------
Moody's Investors Service lowered the security ratings of Pacific
Gas and Electric Company's senior unsecured debt from Baa3 to
Caa2, and the security ratings of PG&E Corporation from Baa3 to
Caa3.  The ratings remain under review for possible downgrade.  
The ratings reflect Moody's concern about the company's tight
liquidity position in light of large wholesale power payments that
are due beginning February 1 for Pacific Gas and Electric Company.

Moody's also holds the opinion that credit agreements at the
utility and at the parent company which are currently in default
due to ratings downgrades increases the possibility of the company
not making interest and principal payments on maturing debt due
the next few weeks.  
  
Moody's holds the view that key constituencies, which include the
governor and the legislature of California, would not find the
company's bankruptcy a reasonable alternative for the following
reasons:
     1) a Pacific Gas and Electric bankruptcy would reduce the
        role of the Governor, the legislature, and the CPUC, as
        many substantive actions would be under the direction of
        the bankruptcy court;

     2) a Pacific Gas and Electric bankruptcy would do little to
        fix the underlying problem which relates to a
        dysfunctional market and a suppy-demand imbalance. Moody's
        believes a bankruptcy would complicate California's power
        problems;

     3) a utility bankruptcy may cause customers' rates to rise
        above the current level and may raise reliability issues
        for the state making rolling brownouts a common occurrence
        for some period of time.

A Pacific Gas and Electric Company bankruptcy filing may lead to a
bankruptcy filing by PG&E Corporation, Moody's believes.

Ratings downgraded and under review for possible downgrade
include:
     a) the first mortgage bonds and the secured pollution control
bonds of Pacific Gas and Electric Company, lowered to B3 from
Baa2;

     b) the issuer rating, the senior unsecured notes, the
unsecured debentures, and the unsecured pollution control bonds of
Pacific Gas and Electric Company, lowered to Caa2 from Baa3;

     c) the preferred stock of PG&E Capital I, lowered to "caa"
from "ba1"; and

     d) a shelf registration for Pacific Gas and Electric
Company's issuance of senior secured debt and senior unsecured
debt lowered to (P)B3 and (P)Caa2, from (P)Baa2, (P)Baa3, and
(P)"ba1", respectively.

Pacific Gas and Electric Company's preferred stock and a shelf for
preferred stock rated "caa" and (P)"caa", respectively, remain
under review for possible downgrade.

Moody's also lowered Pacific Gas and Electric Company's short-term
rating for commercial paper and extendible commercial notes from
Prime-3 to Not Prime.  The rating for its unenhanced variable rate
demand bonds was lowered to Speculative Grade from VMIG-3. Moody's
lowered PG&E Corporation issuer rating to Caa3 from Baa3, and its
commercial paper Not Prime from Prime-3.

Headquartered in San Francisco, California, PG&E Corporation is an
energy services company and the parent holding company of Pacific
Gas and Electric Company, an operating public utility engaged
principally in the business of providing electricity and natural
gas distribution and transmission services throughout most of
Northern and Central California.


PACIFIC GAS: Defaults on Commercial Paper Obligations
-----------------------------------------------------
PG&E Corporation (NYSE:PCG) and its utility subsidiary, Pacific
Gas and Electric Company, will not make payments of commercial
paper obligations due this week nor will upcoming scheduled
payments be made to power generators in excess of the revenues
received from customers. These circumstances were precipitated by
the downgrade of both entities' credit ratings by Standard &
Poor's and Moody's and the resulting defaults that the downgrades
caused under the entities' financing arrangements.

PG&E stated that it is focused on conserving the nearly depleted
cash reserves at both the holding company and the utility in an
effort to continue meeting critical operational expenses,
including employee payroll, payments to trade vendors, and normal
payments to natural gas suppliers.

Standard & Poor's provided the following reasons, among others,
for its downgrade:

    --  "Some of the Pacific Gas and Electric's principal trade
        creditors are demanding that sizeable cash payments be
        made as a precondition to the purchase of commodities
        necessary for ongoing business operations;

    --  "Neither legislative nor negotiated solutions to the
        state's utilities' financial meltdown appear to be
        forthcoming in a timely manner, which continues to impede
        access to financial markets for the working capital needed
        to avoided insolvency; and

    --  "Southern California Edison Co.'s decision to default on
        its obligation to pay principal and interest due on
        January 16, 2001 diminishes the prospects for the Pacific
        Gas and Electric's access to capital markets."

Among other things, the downgrades constitute a default under the
utility's $850 million revolving credit facility and entitle the
banks to refuse a loan request under this facility. The default
also precludes PG&E Corporation from making further draws under
its facilities, including further draws to repay maturing
commercial paper. PG&E Corporation has $501 million of commercial
paper outstanding, of which $263 million will mature by January
31, 2001.

"We are taking these steps reluctantly," said PG&E Corporation
Chairman, CEO and President Robert D. Glynn, Jr. "But it is
critical that we extend our existing cash reserves in order to
meet the basic expenses that are essential to providing safe and
reliable services to customers."

Upcoming payments to power generators include $583 million due to
the California Independent System Operator on February 1 for real-
time energy purchases, and an estimated payment of more than $100
million to the California Power Exchange due February 15. Another
payment to the ISO, of approximately $1.2 billion, will come due
on March 2. The utility also has payments of $420 million due to
qualifying generators (QF's) in early February 2001 and estimated
payments of $410 million due to these QF's in early March 2001.
These amounts far exceed the utility's current cash reserves of
$700 million. PG&E Corporation currently has cash reserves of
approximately $347 million.


PACIFIC GAS: Dynegy May File Involuntary Petition
-------------------------------------------------
Dynegy Corp., a Houston-based natural gas and power provider,
reportedly is considering filing bankruptcy proceedings against
Southern California Edison (SoCal Edison) and Pacific Gas &
Electric (PG&E) if they fail to pay for their electricity
supplies, according to The Los Angeles Times. Dynegy said time was
running out and that a joint petition by three creditors would be
enough to start involuntary bankruptcy proceedings.

"When and if they (Edison) default on Thursday, it puts us in a
position where we have to take them into bankruptcy and I'm sure
others will be right beside us," said Dynegy President Stephen
Bergstrom. Bergstrom refused to say how much money Dynegy was
owed. California Gov. Gray Davis has been racing against the
clock, trying to broker a deal with the utilities, their suppliers
and state lawmakers under which the state would buy power cheaply,
using its good credit, then sell it to the utilities at cost. But
Dynegy's Bergstrom told the Los Angeles Times, "If we can't get
this bill through in the next two days, this will start to
unravel." (ABI 17-Jan-2001)


PETS.COM: Shareholders Approve Complete Liquidation Plan
---------------------------------------------------------
Pets.com, Inc. (now IPET Holdings, Inc.) (Nasdaq: IPET) said
stockholders approved the Plan of Complete Liquidation and
Dissolution of the Company at a special stockholder meeting.  The
Plan was previously mailed to stockholders.  The company also
announced the change of corporate name from Pets.com, Inc. to IPET
Holdings, Inc.

The Board of Directors on November 4, 2000 unanimously voted to
discontinue the operation of Pets.com and liquidate and dissolve
the Company. On November 7, 2000 the Company announced that it
would begin the orderly wind down of its operations to include
laying off most of its employees, negotiating the sale of the
majority of its assets, and paying off its outstanding
liabilities. The Company is proceeding with the sale of all of its
assets, and thereafter intends to make an initial distribution of
net liquidation proceeds, if any, to the stockholders.

Today, the Company also filed with the Delaware Secretary of State
an amendment to the Company's Certificate of Incorporation to
effect the name change and a Certificate of Dissolution. The
Certificate of Dissolution will take effect on Thursday, January
18, 2001. At the close of business on Thursday, January 18, 2001,
the Company will close its stock transfer books, discontinue
recording transfers of Common Stock (the "Final Record Date"), and
the Company's Common Stock will be delisted from the Nasdaq Stock
Market. Thereafter, certificates representing the Common Stock
shall not be assignable or transferable on the books of the
Company. The proportionate interests of all of the stockholders of
the Company shall be fixed on the basis of their respective stock
holdings at the close of business on the Final Record Date, and,
after the Final Record Date, any distributions made by the Company
shall be made solely to the stockholders of record at the close of
business on the Final Record Date.

In addition, all officers and directors of the Company resigned
today, effective immediately after the stockholder meeting.
Richard G. Couch of Diablo Management Group ("DMG") was retained
by the former board of Pets.com, Inc. to act as sole director of
the Company and Chief Executive Officer for IPET Holdings, Inc.
Going forward, Richard Couch, through DMG, will handle all
remaining affairs for IPET Holdings, Inc.


PNV INC: Nasdaq Delists Shares
------------------------------
PNV (Nasdaq: PNVN) announced that effective as of the close of
business Wednesday, January 17, it has been delisted from the
Nasdaq National Market for failing to comply with its listing
criteria.  As reported yesterday's edition of the Troubled Company
Reporter, the Company has entered into an agreement to sell
substantially all of its assets in a chapter 11 case pending in
Florida.  

PNV (www.pnv.com), based in Coral Springs, FL, is a full-service
Cisco Powered Network certified communications and information
provider to the long haul trucking industry -- a $500 billion
market. PNV provides bundled communications, cable TV and Internet
services to professional truck drivers, operators, and fleets
through the company's private, integrated facilities- based
network deployed at nearly 300 truck stops in 43 states. PNV also
provides cable TV and Internet services to the participants in the
trucking community including families of professional drivers,
trucking industry suppliers and manufacturers.


PRO AIR: Gets Ready to Fly Again
--------------------------------
Discount airline Pro Air has begun recalling executives and
employees in anticipation of getting permission from the Federal
Aviation Administration to fly passengers.  Kevin Stamper, the
carrier's founder, chairman and chief executive, said that about a
dozen key executives have been recalled and will show up for work
at Detroit City Airport as early as Wednesday. They include the
vice presidents of flight operations, maintenance and customer
service employees.   Pro Air filed for bankruptcy in September
2000, surrendering its three Boeing 737 aircraft to creditors and
laid off all but about 25 staffers.  Both the FAA and the airline
confirm that the government is close to returning Pro Air's
operating certificate and project that could happen this month.
(New Generation Research 17-Jan-2001)


SAFETY-KLEEN: Resolves Claims Asserted by Geosyntec
---------------------------------------------------
Safety-Kleen Corp. agreed to pay Geosyntec $44,581 as a retainer
for post-petition services rendered.  Both parties entered into an
agreement under which Safety-Kleen will pay any additional post-
petition charges within 45 days of presentation of an invoice for
services rendered.

In addition, The Debtors agreed to pay Geosyntec $105,000 on the
date of delivery of the Final Report, Construction Quality
Assurance, Waste Management Unit 28, or the Final Report,
Construction Quality Assurance, Waste Management Unit 33,
whichever is last delivered.

Geosyntec will be granted an allowed, unsecured claim against SK  
Services in the amount of $36,820.93 in connection with pre-
petition services and Geosyntec agreed it will not make any other
claim for pre-petition damages, or assert any lien rights, and its
Motion is withdrawn.

Upon presentation of this Stipulation, Judge Walsh approved it by
Order. (Safety-Kleen Bankruptcy News, Issue No. 12; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


SERVICE MERCHANDISE: Landlord Won't Take Rent from Burlington
-------------------------------------------------------------
Burlington Coat Factory Warehouse of Massapequa, Inc. says that
since the closing of the sale and assignment of the Massapequa
Interests to Burlington, the landlord Nemeroff Realty Corporation
has refused to accept rent and related payments and has rejected
and returned such payments on two occasions. For the months of
September and October, 2000, the sublessor, Kamal Oyster bay, Ltd.
agreed to accept rent from Burlington refused by the Landlord and
issue its own checks to Landlord for such amounts. Burlington
believes Karmal has paid the rent that it received to the
Landlord. However, Kamal has notified Burlington that it will not
accept any further rent payments due under the Ground Lease or
Massapequa Interests from Burlington, but that Burlington must
directly pay such amounts to the Landlord. Burlington believes
Kamal has also notified the Landlord to invoice Burlington
directly for all rents and related amounts due under the Ground
Lease but the landlord has continued to invoice Kamal for the rent
under the Ground Lease.  

Burlington believes that the Landlord's refusal to accept rent
payments from Burlington is an attempt by the Landlord to
circumvent the Court's sale approval order and create a default
under the Ground Lease, so as to threaten Burlington's right and
interests to the Property.

Burlington tells Judge Paine that Landlord's refusal to accept
rent and related payments for the Property from Burlington is in
direct violation of the Sale Approval Order.

                         Background

S.P. Massapequa LLC is the current owner of the fee title to the
Property and landlord under a Ground Lease, dated February 24,
1978, that Nemeroff Realty Corporation, as landlord, entered into
pursuant to which it leased the Massapequa Property to Service
Merchandise Company, Inc.  The Debtor assigned its interest in the
Ground Lease to Kamal. Kamal leased the Property back to the
Debtor pursuant to an Amended and Restated Sublease Agreement
dated January 15, 1980 (the Massapequa Lease).

The Debtors believe that Key Bank National Association may hold a
mortgage on the interest of the Landlord in the Property, and
Union Mutual Life Insurance Company may hold a mortgage on or
collateral assignment of the interest of Kamal.

As part of a strategic plan to improve operations and financial  
performance, prior to the commencement of these cases the Debtors  
implemented a comprehensive review and analysis of their store
operations to identify consistently underperforming stores. As a
result of such review, the Debtors identified and commenced store
closing sales at approximately one-third of their 365 store
locations, including Store No. 60.

After the commencement of the chapter 11 cases, the Debtors
obtained the Court's approval of Bidding Procedures, conducted an
auction, and selected W XI/SMC Real Estate LLC, a Delaware limited
liability company, with its bid of $1,000,000 as the Purchaser of
certain Designation Rights with respect to Store Number 0060. The
Debtors subsequently obtained the Court's approval of an Asset
Purchase Agreement pursuant to the transaction. Under the
Agreement, W XI purchased free and clear of all liens, other than
Permitted Exceptions the right to designate the disposition of the
Leasehold Interests. The Designation Rights permit the Purchaser
to designate the party to whom the Massapequa Lease and the  
easements, licenses, rights-of-way, permits, and other
appurtenances, agreements, and documents relating to the Property
(the Massapequa Interests) may be assigned free and clear of all
monetary liens and defaults other than Permitted Exceptions as
such terms are defined in the Agreement.

By letter dated January 21, 2000, Purchaser notified the Debtors
of its election to designate Assignee to the Massapequa Interests.
The Debtors, in their business judgment, moved the Court for
authorization for the assumption and assignment of the Massapequa
Interests pursuant to section 365 of the Bankruptcy Code. The
Purchaser, Kamal and the landlord filed objections to the Motion.
The Debtors then filed an amended motion. In support of the
amended motion, the Purchaser filed a Joinder and Memorandum of
Law, and both Kamal and the Purchaser later withdrew their  
initial objections after Court hearings and in view of a proposed
form of Court order acceptable to them.

In the Joinder, the Purchaser relates that at the Auction,
Landlord bid $700,000 on the designation rights relating to
Debtors' interests in the Property. However, Purchaser outbid the
landlord with a higher bid of $1,000,000 and as a result was
awarded the designation rights.

Purchaser said that Landlord sought to gain control over the
Property by its refusal to honor the rights of Purchaser and
Debtor with respect to the Property, notwithstanding that
Purchaser was the high bidder and that its bid was approved by the
Court. According to the Purchaser, Landlord made it clear that it
would not cooperate with Purchaser's right to designate a tenant
for the Property, and would not approve any tenant for the
Property without the payment of funds by Purchaser to Landlord.  
Additionally, the Purchaser alleged, Landlord repeatedly
threatened to terminate the Debtor's interest in the Property
based upon false claims that the tenant under the Ground Lease was
in default of its obligations under the Ground Lease.

Purchaser told the Court that it was able to locate an assignee
for the Property, i.e. "Toys R Us," which wanted to operate a
"Babies R Us" store on the Property. However, Landlord refused to
approve Toys R Us as a tenant unless the parties agreed to
increase the rent of $65,000 per year by $100,000 per year.
Landlord argued that the Ground Lease contained a provision
restricting the use of the Property for the sale of toys.  
Purchaser pointed out that the toys restriction was, however,
inserted into the Ground Lease for the benefit of Toys R Us, which
already operates a Toys R Us store in a different part of the
Landlord's property. Toys R Us agreed to waive that provision so
that it could lease the Property for the use of a Babies R Us
store, but Landlord continued to object to the Babies R Us store.

The Purchaser accuses that the Landlord was refusing in bad faith
to approve Toys R Us, and continued to threaten to terminate the
Ground Lease in an effort to scare off any potential tenants that
might agree to take an assignment of the Sublease. Landlord's
apparent motive in refusing to approve Toys R Us, the Purchaser
believed, was its desire to deprive Purchaser of its designation
rights and its desire to effectively acquire the Debtor's valuable
interest in the Property for itself without paying for those
rights.

Toys R Us subsequently decided not to lease the Property. The
Purchaser complained that this caused it injury as a result of the
actions of the landlord.  

The Purchaser then proposed Burlington as a potential tenant in
the Property. Landlord has also refused to approve Burlington as a
tenant. Burlington at one time indicated that because of
Landlord's obstinacy, it would not purchase the Debtor's interest
in the Property without knowing for certain what uses of the
Property are prohibited.  

The Purchaser further accused that the landlord was trying to
block the Burlington deal by refusing to provide an estoppel
letter or other evidence on prohibited uses under the Ground Lease
from the Debtors' standpoint.

Purchaser thus joined in the Debtors' request for the Court to
approve Burlington as a tenant for the Property and make findings
as to the prohibited uses under the Ground Lease.

Following the Court's Hearing, the Debtors prepared a Form of
Order that the Purchaser had agreed to. The landlord objected to
the submission of the form and attached its own two forms of
order. The only substantive changes among the Forms of Order
pertain to the Court's rulings with respect to the permitted uses
of the premises.

At the Debtors' behest, the Court has authorized the Debtors to
assume and assign the subject leases and agreement to Burlington,
or if an agreement to assign to Burlington has not been executed
on or before June 13, 2000, or such later date as maybe agreed to
by and between Purchaser and Landlord, to assume and assign the
leases and agreement to the Assignee subject to the satisfaction
or waiver of any conditions to closing in favor of Burlington. The
Debtors have filed a notice with the Court setting forth
Burlington as the Assignee, in accordance with the Court's order.
Nevertheless, in consideration for the Debtors' agreement for the  
Purchaser to designate the Assignee at a later date in the event
that the Burlington closing conditions are not satisfied or waived
by July 30, 2000, the Purchaser has agreed to pay to the Debtors
the sum of $50,000.  

The Court finds that the Ground Lease and the Massapequa Interests
do not prohibit the use of the Property for the sale of items
typically sold in Burlington's stores. The Court further finds
that, to the extent enforceable under applicable nonbankruptcy
law, the provisions of the Ground Lease tbat probibit the use of
the Property to "any other uses now found and being conducted by
other occupants within the shopping center of which the Demised
Premises constitutes a part" refers only to uses "found and being
conducted" at the time the Ground Lease was executed in 1978.

The Court finds that the section of the Ground Lease, which
restricts assignment and subletting of the Property is
unenforceable as to the assignment of the Massapequa Interests of
the Property to Assignee pursuant to the Court's Order.

The Court also finds that the Assignee is a qualified purchaser
and has bid in good faith for the Massapequa Interests as a result
of arm's length bargaining between sophisticated commercial
entities represented by counsel.

The Court concurs that the assumption and assignment of The
Massapequa Interests to Assingee is in the best interest of the
Debtors' estates and creditors and is appropriate under sections
363 and 365 of the Bankruptcy Code.  

In this motion, Burlington asks that the Court direct SP
Massapequa LLC and its agents as landlord of SMC store No. 0060 in
Massapequa, New York to (i) comply with the Court's Order entered
July 13, 2000 authorizing the Debtors to assume and assign its
lease agreements related to Burlington and (ii) accept payment
from Burlington of the rents and other charges due Landlord
related to the Property. (Service Merchandise Bankruptcy News,
Inc., Issue No. 15; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


SOUTHERN CALIFORNIA: Moves to Preserve Cash Position
----------------------------------------------------
Southern California Edison (SCE) announced it is taking additional
steps to preserve its cash position in order to ensure it can
maintain customer service. The company filed an 8-K with the
Securities and Exchange Commission Tuesday morning prior to the
opening of the market.  SCE has temporarily suspended payment of
certain of its debt obligations and purchased-power obligations.

The company says its current actions are intended to allow SCE to
continue to maintain customer service while a legislative and
regulatory solution, which involves both state and federal
authorities, is finalized. SCE is working aggressively to cut
costs and conserve cash until a permanent solution can be
developed among the parties. The company earlier announced it has
begun cost-cutting measures aimed at reducing general operating
costs by $465 million annually.  This plan will ultimately result
in about 1,450 to 1,850 job cuts and will reduce near-term capital
expenditures to levels that are unsustainable in the long term.
The company also suspended its fourth quarter dividend to
shareholders.

The company said it takes these steps only reluctantly, and noted
that the energy crisis requires a regulatory solution, which is
not likely to occur immediately. While SCE is appreciative of and
somewhat encouraged by directional progress made during the
ongoing power negotiations involving state and federal officials,
unfortunately, no definitive agreements have resulted to preclude
the necessity of the debt and power payment suspension. Time has
simply run out. Nevertheless, the company said it would continue
to cooperate fully in the state and federal discussions until such
time as a successful conclusion is reached.

Due to exponentially rising power costs governed by the Federal
Energy Regulatory Commission, and the artificially low customer
rate structure governed by the California Public Utilities
Commission, SCE continues to generate significant losses in its
electricity purchasing account. Clearly, the California energy
market in its current form is dysfunctional. For example, in
December 2000, the average price per megawatt-hour increased 900%
compared to the same month the year before. With power prices at
current levels and lenders now no longer willing or able to extend
credit, SCE and the state's other investor-owned public utilities
have used an enormous amount of cash just to keep the lights on.

The company reiterated it is doing everything possible to work
closely with all the parties involved to resolve this crisis. SCE
intends to pay its creditors, vendors and suppliers once a
permanent solution to the energy crisis is developed. SCE will
then immediately endeavor to create a plan to pay its obligations.

An Edison International company (NYSE: EIX), Southern California
Edison is one of the nation's largest electric utilities, serving
a population of more than 11 million people via 4.3 million
customer accounts in a 50,000-square-mile area within central,
coastal and Southern California.


SUN HEALTHCARE: Permits Mabel Ann Cogdill to File Injury Suit
-------------------------------------------------------------
Sun Healthcare Group, Inc., agreed to lift the automatic stay to
let Mabel Ann Cogdill pursue her State Court Action on injuries
allegedly sustained at Marshall Voss Healthcare Rehabilitation
Center.

The parties agree that Claimant may enforce settlement or judgment
in the court action to the extent such claims are covered by
proceeds from any applicable Sun liability insurance policies 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 policies and any Bankruptcy Claim is  
waived and to the extent already filed is withdrawn. The parties
agree that any settlement of the State Court Action will include a
mutual general release.  

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)


TOYSMART.COM: Court Approves Disclosure Statement
-------------------------------------------------
The U.S. Bankruptcy Court in Boston approved the disclosure
statement of bankrupt Internet toy retailer Toysmart.com LLC,
despite objections to and clarification requests for the company's
disclosure statement submitted by several parties, according to
The Wall Street Journal.

Judge Carol J. Kenner approved the disclosure statement in an
order Friday that describes the company's plan for liquidation, as
well as how classes of creditors will be compensated. Kenner acted
despite a letter from the Department of Labor asking the company
to include a warning that the department may charge it with
violations of federal employee retirement-plan regulations and the
U.S. Trustee's letter that he was unable to "evaluate the
adequacy" of the plan. Toysmart's plan confirmation hearing is
scheduled for Feb. 20.

Judge Kenner is also expected to rule soon on a motion submitted
by Toysmart and BVIG, a subsidiary of The Walt Disney Co., in
which BVIG will pay Toysmart $50,000 to destroy its customer list.
According to court documents, the Federal Trade Commission and the
attorneys general of 47 states and three territories have agreed
to the motion. BVIG holds a 61 percent interest in Toysmart.

During the chapter 11 proceedings, Toysmart paid BVIG's $265,025
secured claim in full from about $5 million in proceeds from the
sale of Toysmart's inventory and other assets. Toysmart said in
its motion that it had received a "preliminary proposal" from an
unnamed third party to purchase the list for $100,000, but
determined that its deal with BVIG "would provide a greater
benefit to the estate and creditors." (ABI 16-Jan-2001)


VANALCO: Aluminum Smelter Files for Chapter 11 Protection
---------------------------------------------------------
Vanalco, the Vancouver, Wash.-based aluminum smelter that was
forced to shut down last year because of high electricity prices,
has filed for chapter 11 bankruptcy protection, according to a
newswire report.

The petition filed this week in U.S. Bankruptcy Court in Tacoma,
Wash. listed $58.8 million in liabilities, the largest of which is
a $27.1 million loan with Bank of America in Seattle. The
smelter's real and personal property assets total $55.6 million.

Vanalco's general manager, Chuck Reali, held out hope Friday that
the company, which once employed 650 workers, would reopen one
day. "The best thing to do is to wait and see if the electricity
situation turns around," he said. Last June, Vanalco shut down
four of its five potlines as it worked to find an inexpensive
source of electricity and laid off 450 employees. Reali said
Friday there were no employees in the plant. (ABI, 16-Jan-01)


VENCOR INC: Inks Agreement with Mr. Barr re SERP and Other Claims
-----------------------------------------------------------------
Michael R. Barr filed six proofs of claim on December 30, 1999,
and an amended proof of claim on January 6, 2000 in Vencor, Inc.'s
Bankruptcy Cases.

The parties agree and stipulate that:

     (1) As sole and exclusive distribution from the Debtors on
account of, and in full satisfaction of, the Barr Claims, and any
claim that Barr could have asserted in the Bankruptcy Cases:

         (a) Upon Vencor's assumption of the SERP, including the
SERP Amendments in accordance with the Plan on the
Effective Date, all payments owed to Barr under the
SERP shall be made in accordance with the terms of
the SERP; and
    
         (b) In respect of Barr's Old Preferred Stock (as defined
in the Second Amended Plan), Barr will be given an
allowed Put Right (as defined in the Second Amended
Plan) which shall receive the treatment provided in
paragraph 5.08 of the Plan, under which monetary
damages in respect of Barr's allowed Put Right shall
be canceled in exchange for the cancellation of all
obligations of Barr arising under the Nontransferable
Full Recourse Note in the original principal amount
of $1,296,000 dated April 30, 1998 (the Barr
Preferred Equity Interest Loan).

     (2) Barr expressly consents to and agrees to abide by the
SERP Amendments, including any future amendment eliminating or
modifying any change in control provision under the SERP (the
Change In Control Amendment) and any other future amendment to the
SERP, provided, however, that no such future amendment (except the
Change In Control Amendment) shall defer the commencement of
payments to Barr under the SERP, or reduce the present dollar
value of Barr's claim under the SERP, determined based on the
actuarial assumptions that the SERP and other provisions of the
SERP refer to.

(3) Barr expressly waives any claim under the SERP except as
provided in the Stipulation and Order, and expressly waives any
claim in respect of any change in control provision under the
SERP.

(4) Except as set forth in the stipulation, Barr expressly
waives any claim under the Separation Agreement and Release of
Claims between Barr and Vencor, Inc., executed on or about October
31, 1998.

(5) All payments currently being made by Vencor in respect
of any benefits under the Separation Agreement shall continue
until the Effective Date but shall cease as of the Effective Date.

(6) Barr's Indemnification Claim shall be allowed subject to
the conditions of the stipulation and all rights of
indemnification, contribution and/or other similar relief of Barr
against the Debtors or any of them shall be preserved, provided,
however, that,

          (i)  Debtors shall use their commercially reasonable
               efforts to continue and maintain Barr's present
               rights to insurance coverage under any so-called
               directors' and officers' policy (a D&O Policy), and
               will afford Barr the same treatment afforded all
               ex-officers and directors respecting renewal or
               acquisition of insurance coverage; and

          (ii) any and all obligations of the Debtors to provide
               indemnification, contribution and/or other similar
               relief to Barr, including, without limitation, all
               obligations in respect of the Indemnification
               Claim, shall be satisfied only through payments
               made or funded under any available present or
               future D&O Policy.

     (7)  The Debtors reserve all rights, claims and causes of
action (the Debtors' Reserved Note Claims) in respect of the
Promissory Note by Barr as maker and Vencor, Inc. as payee, dated
June 15, 1998, in the original principal amount of $l,025,000 (the
Barr Note), and Barr reserves all rights to raise any defenses
that he may have under the terms of the Barr Note to the Debtors'
Reserved Note Claims.

     (8)  Except as provided in the Stipulation, the Barr
Releasors release, discharge and acquit forever the Barr Releasees
from all claims, causes of action, liabilities, etc. provided that
such action shall not be deemed to limit Barr's rights to coverage
under any insurance maintained by the Debtors or any of them. (The
Barr Releasors refer to Barr, and his heirs, executors, agents,
attorneys, administrators, successors and assigns, and such other
persons or entities who or which may make any claims derived under
or through them; the Barr Releasees refer to the Debtors, and
their affiliates, subsidiaries, corporate parents, and each of
their present and former officers, directors, managing directors,
control persons, stockholders, employees, agents, attorneys,
administrators, successors and assigns.

(9)  The Barr Releasors release, discharge and acquit
forever Ventas in respect of any claims arising under the SERP,
the Deferred Compensation Plan, the Old Preferred Stock, the Barr
Note, the Put Right, the Barr Preferred Equity Interest Loan, the
Barr Employment Agreement, any options to acquire Old Common
Stock, and the Separation Agreement.

     (10) The Barr Releasors, and each of them, reserve all other
claims and rights against Ventas, including, without limitation,
any and all claims to indemnification, contribution and/or other
or similar relief against Ventas.

     (11) The Debtor Releasors release, discharge and acquit the
Barr Releasees from all claims, causes of action liabilities, etc.
(Vencor Bankruptcy News, Issue No. 23; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


WHEELING-PITTSBURGH: Asks for More Time to Decide on Leases
-----------------------------------------------------------
Wheeling-Pittsburgh Steel Corp. asked for an extension of the time
within which to decide whether they should assume, assume and
assign, or reject their unexpired leases of nonresidential real
property. These decisions, the Debtors tell Judge Bodoh, are
central to any plan of reorganization, and the Debtors have not
yet had the time necessary to intelligently appraise their
financial situation and the potential value of their assets in
terms of the formulation of a plan of reorganization. In addition,
the Leases constitute a number of business properties and the
Debtors need additional time to determine whether to assume or
reject the leases. The Debtors advise that they have complied with
all their post-petition obligations under the leases.

The Debtors ask for an additional one hundred eighty days,
extending the deadline under 11 U.S.C. Sec. 365(d)(4) through July
15, 2001. (Wheeling-Pittsburgh Bankruptcy News, Issue No. 4;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


* BOOK REVIEW: The Turnaround Manager's Handbook
------------------------------------------------
Author:  Richard S. Sloma
Publisher: Beard Books
Soft cover: 226 pages
List Price:  $34.95

Review by Gail Owens Hoelscher

In the introduction to this book, the author suggests that an
accurate subtitle could be "How to Become a Successful Company
Doctor."  Using everyday medical analogies throughout, he targets
"corporate general practitioners" charged with the fiscal health
of their companies.  

As with many human diseases, early detection of turnaround
situations is critical. The author describes turnaround situations
as a continuum differentiated by length of time to disaster: "Cash
Crunch," "Cash Shortfall," "Quantity of Profit,"  and "Quality of
Profit."  

The book centers on 13 steps to a successful turnaround. The steps
are presented in a flowchart form that relates one to another.  
Extensive data collection and analysis are required, including the
quantification of 28 symptoms, the use of 48 diagnostic and
analytical tools, and up to 31 remedial actions.  (In case the
reader balks at the effort called for, the author points out that
companies that collect and analyze such data on a regular basis
generally don't find themselves in a turnaround situation to begin
with!)

The first step is to determine which of 28 symptoms are plaguing
the company. The symptoms generally pertain to manufacturing
firms, but can be applied to service or retail companies as well.  
Most of the symptoms should be familiar to the reader, but the
author lays them out systematically, and relates them to the
analytical tools and remedial actions found in subsequent
chapters. The first seven involve the inability to make various
payments, from debt service to purchase commitments.  Others
include excessive debt/equity ratio; eroding gross margin;
increasing unit overhead expenses; decreasing product line
profitability;  decreasing unit sales;  and decreasing customer
profitability.

Step 2 employs 48 diagnostic and analytical tools to derive
inferences from the symptom data and to judge the effectiveness of
any proposed remedy.  The author begins by saying "...if the only
tool you have is a hammer, you will view every problem only as a
nail!"  He then proceeds to lay out all 48 tools in his medical
bag, which he sorts into two kinds, macro- and micro-tools.  
Macro-tools require data from several symptoms or assess and
evaluate more than a single symptom, whereas micro-tools more
general-purpose in function. The 12 macro-tools run from "The Art
of Approximation" to "Forward-Aged Margin Dollar Content in Order
Backlog."   The 36 micro-tools include "Product Line Gross Margin
Percent Profitability," "Finance/Administration People-Related
Expenses As Percent Of Sales," and "Cumulative Gross $ by Region."

Next,  managers are directed to 31 possible remedial actions,
categorized by the four stage turnaround continuum described
above.  The first six actions are to be considered at the Cash
Crunch stage, and range from a fire-sale of inventory to factoring
accounts receivable.  The next six deal with reducing people-
related expenses, followed by 13 actions aimed at reducing
product- and plant-related expenses.  The subsequent five actions
include eliminating unprofitable products, customers, channels,
regions, and reps.  Finally, managers are advised on increasing
sales and improving gross margin by cost reduction in various
ways.

The remaining steps involve devising the actual turnaround plan,
ensuring management and employee ownership of the plan, and
implementing and monitoring the plan. The advice is comprehensive,
sensible and encouraging, but doesn't stoop to clich, or empty
motivational babble.  The author has clearly operated on patients
before and his therapeutics have no doubt restored many a firm's
financial health.




                          *********

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

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

Each Friday's edition of the TCR includes a review about a book of  
interest to troubled company professionals.  All titles are
available at your local bookstore or through Amazon.com.  Go to  
http://www.amazon.com/exec/obidos/ASIN/189312214X/internetbankrupt  
to order any title today.   

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


                          *********


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

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

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

This material is copyrighted and any commercial use, resale or
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                     *** End of Transmission ***