TCR_Public/010122.MBX          T R O U B L E D   C O M P A N Y   R E P O R T E R

             Monday, January 22, 2001, Vol. 5, No. 15

                            Headlines

1-800-AUTOTOW: Files for Protection Under Chapter 11
ALGOMA STEEL: Moody's Downgrades First Mortgage Notes to Caa1
ANICOM INC: Case Summary & 20 Largest Unsecured Creditors
ARMSTRONG HOLDINGS: Retaining Foley Hoag as Legislative Counsel
BAZILLION.COM: In Talks With Strategic Partners

BUSINESS TELECOM: Moody's Downgrades Ratings to Low-B's
CHIQUITA BRANDS: Bondholders Expected to Approve Restructuring
CHIQUITA BRANDS: Moody's Downgrades Senior Notes and Debentures
CLASSIC CABLE: Moody's Junks Senior Subordinated Debt Rating
COUNTRYCOOL.COM: On-Line Country Music Site Shuts Down Operations

DENMANS.COM: On-Line Jeweler Shuts Down Website & Directors Resign
DESTINY RESOURCE: Obtains Bride Financing to Pay Past-Due Payables
EDISON MISSION: S&P Continues CreditWatch & Negative Outlook
GLOBALSTAR: Moody's Lowers Senior Unsecured Debt Ratings to Ca
ICG COMMUNICATIONS: Engages Logan as Claims & Noticing Agent

JCC HOLDING: Casino Restructuring Takes Toll on Harrah's Earnings
KEYSTONE CONSOLIDATED: Moody's Downgrades Ratings to Junk Status
LANGUAGEWARE.NET: Shuts Down Operations & Pares to Skeleton Staff
LERNOUT & HAUSPIE: UST Appoints Official Creditors' Committee
LERNOUT & HAUSPIE: Establishes New Credit Line with Banking Group

LERNOUT & HAUSPIE: Reuters Says DaimlerChrysler Shows Interest
LERNOUT & HAUSPIE: Shareholders Eye Auditors as Target Defendants
LERNOUT & HAUSPIE: Chairman Roel Pieper Resigns
LERNOUT & HAUSPIE: Judge Allows AllVoice Computing to File Suit
LOEWEN GROUP: Resolves Claims Asserted by American Commercial Bank

LTV CORPORATION: Judge Issues Vendor & Supplier Comfort Order
MEDICAL ARTS: Sells Assets and Lab Operations to Dynacare
NORTHPOINT COMMUNICATIONS: Case Summary
NORTHPOINT COMMUNICATIONS: Moody's Issues Further Downgrades
OWENS CORNING: Walks Away from Burdensome Warehouse Leases

PACIFIC GAS: S&P Assigns BBB Rating to PG&E National Energy Group
PACIFIC GAS: Fitch Cuts Preferred Securities' Rating to C
SAFETY-KLEEN CORPORATION: Seeks Extension of 9027 Removal Period
SERVICE MERCHANDISE: Landlord Delivers Non-Disturbance Agreement
SUN HEALTHCARE: Finalizes Agreement on Johnson Injury Claims

U.S. FURNITURE: Closes Down Operations
VENCOR INC: Settles SERP and Other Claims with W. Earl Reed
VENCOR INC: Court Approves Extension of DIP Financing Maturity
WHEELING-PITTSBURGH: Wants to Assume General Electric Contract
WEC COMPANY: Moody's Junks Bond Ratings & Says Outlook Negative

BOND PRICING: For the week of January 22 - 26, 2001

                            *********

1-800-AUTOTOW: Files for Protection Under Chapter 11
--------------------------------------------------------
Leonard D. Levin, as acting President and CEO of 1-800-AUTOTOW,
Inc. (OTCBB:AUTWE), www.1800autotow.com, an operator of vehicle
towing companies, announced last week that the Company filed for
protection and Reorganization under Chapter 11 of the Bankruptcy
Code.


ALGOMA STEEL: Moody's Downgrades First Mortgage Notes to Caa1
-------------------------------------------------------------
Moody's Investors Service downgraded ratings for Algoma Steel Inc.
as follows:

      * US$350 million of 12.375% first mortgage notes due 2005,
        from B2 to Caa1

      * C$200 million secured revolving credit facility from B1 to
        B3

      * senior implied rating from B2 to Caa1

      * senior unsecured issuer rating from B3 to Caa2

The rating outlook remains negative.  The rating actions are a
reflection of Moody's concerns about weak steel market conditions
and the related impact on the company's operating performance,
cash flow, and liquidity.

Moody's expects steel market conditions to remain weak for the
entire first half of 2001, and only slowly recover in the second
half of the year. Moody's believes weaker automobile production
and manufacturing activity will impact Algoma's sheet and plate
orders and prices, resulting in reduced production, negative cash
flow, and diminished liquidity.

The downgrades are based on an assumed 2001 EBITDA of C$30
million, yielding a ratio of EBITDA to interest of 0.3, and free
cash flow of approximately negative C$100 million. If correct,
Algoma will deplete its existing sources of liquidity in 2001, as
unused availability under its revolving credit facility was C$90
million on September 30, 2000. This facility matures on December
31, 2001.

Algoma had C$626 million of debt as of September 30, 2000. The
credit facility is secured by accounts receivable and inventories.
The first mortgage notes are secured by substantially all the
company's fixed assets, which had a net book value of C$869
million on September 30.

Algoma Steel Inc. is headquartered in Sault Ste. Marie, Ontario.
It produces 2 million tons per year of sheet and plate products
and had sales of C$1.1 billion in 1999.


ANICOM INC: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Anicom, Inc.
         6133 N River Road Suite 1000
         Rosemont, IL 60018

Type of Business: Distribution specialist of multimedia technology

Chapter 11 Petition Date: January 5, 2001

Court: Northern District of Illinois

Bankruptcy Case No.: 01-00485

Judge: Susan Pierson Sonderby

Debtor's Counsel: John Robert Weisman, Esq./
                   Mark K. Thomas, Esq.
                   Katten Muchin Zavis
                   525 West Monroe Street STE 1600
                   Chicago, IL 60661
                   312-902-5200

Total Assets: $348,394,362
Total Debts: $206,146,120

20 Largest Unsecured Creditors:

Entity                          Nature of Claim       Claim
Amount
------                          ---------------       ------------
Microwave Tower Service, Inc.        Trade            $6,090,903
Attn: Donna Gronowski
562 Captain Neville Drive
Waterbury, CT 06705
800-545-9014

Superior Essex Comm                  Trade            $4,446,453
Attn: Officer, Manager, Director
150 Interstate North Parkway
Suite 300
Atlanta, GA 30339-2101
770-953-8338

Amp Incorporated                     Trade            $2,978,641
Attn: Carole Anderson
P.O. Box 91869
Chicago, IL 60693
717-564-0100

Comm/Scope, Inc.                     Trade            $2,290,896
Attn: Theresa Munsey
1375 Lenoir Rhyne Blvd.
Hickory, NC 28603
800-982-1702

Belden Wire and Cable                Trade            $2,117,027
Attn: Daniel Nunez
Box 101297
3585 Atlanta Avenue
Atlanta, GA 30354
800-235-3361

Optical Cable Corp.                  Trade            $1,793,852
Attn: Chuck Neely
5290 Concourse Drive
Roanoke, VA 24002
800-622-7711

Decibel Products                     Trade            $1,535,250
Attn: Officer, Manager, Director
8635 Stemmons Freeway
Dallas, TX 75247
214-631-0310

Nordx/CDT                            Trade            $1,269,729

Attn: Officer, Manager, Director
3701 Algonquin Road
Suite 260
Rolling Meadows, IL 60008
800-331-0779

Rome Cable/BSCC                      Trade            $1,153,468
Attn: Helen
680 Mechanics Street
Suite 1201
Leominster, MA 01453
800-366-9473

Alcoa Fujikura                       Trade              $994,294
Attn: Dottie
150 Ridge View Circle
Duncan, SC 29334
800-866-3953

Siemon Company                       Trade              $919,569
Attn: Sharon
76 Westberry Park Road
Watertown, CT 06795
860-274-2523

BICC Gen. Ind n/k/a                  Trade              $914,238
General Cable
Attn: Dawn Campo
4 Tesseneer Drive
Highland Heights, KY 41076
888-593-3355

Austin Cable                         Trade              $797,883
Attn: Eric Swanson
115 E. Saint Elmo Road #C
Austin, TX 78716
800-875-8112

Americable                           Trade              $666,383
Attn: Officer, Manager, Director
P.O. Box 70649-T
Cleveland, OH 44190
800-643-1516

Mohawk/CDT                           Trade              $664,324
Attn: Sharon Cardinal
835 W. University Drive
Arlington Heights, IL 60004
800-422-9961

Hubbell Premise Wiring               Trade              $620,248
Attn: Paula
14 Lords Hill Road
P.O. Box 901
Stonington, CT 06378
800-626-0005

General Wire Products                Trade              $572,099
Attn: Officer, Manager, Director
425 Shrewsbury Street
Worcester, MA 01684
508-752-8260

Molex Premise Networks               Trade              $416,075
Attn: AnnMarie Cummings
8 Executive Drive
Hudson, NH 03051
603-324-0214

Carlon Telecom Services              Trade              $409,003
Attn: Officer, Director, Manager
3715 Powderhorn Drive
The Lamson & Sessions Co.
Okemos, MI 48864
517-337-7777

Realm Communications Group           Trade              $338,899
Attn: Officer, Manager, Director
2181 Del Franco Street
San Jose, CA 95161
408-944-9090


ARMSTRONG HOLDINGS: Retaining Foley Hoag as Legislative Counsel
---------------------------------------------------------------
Armstrong Holdings, Inc., asks Judge Farnan for an Order
authorizing it to employ the law firm of Foley, Hoag & Eliot LP in
Boston, Massachusetts, as special legislative counsel during the
course of its chapter 11 cases.

As legislative counsel, Foley Hoag has provided and will continue
to provide the Debtors with a wide range of representation in the
legislative area. Specifically, the Debtors propose to engage
Foley Hoag to secure Congressional passage of global asbestos
settlement legislation. Foley Hoag also provides, and will
continue to provide, the Debtors with advice concerning health
care, energy, international trade, tax, environmental, and
technology issues.

Dennis R. Kanin, Esq., a partner of Foley Hoag, tells Judge Farnan
that, while the firm neither holds nor represents any interest
adverse to these estates on the matters for which employment is
sought, the firm also represents, or continues to represent,
parties in interest such as Chase Manhattan Bank, Bank of America
National Trust & Savings, Deutsche Bank, Citibank, Exxon
Corporation, Occidental Chemical Company, PNC Bank, Owens Corning
Fiberglass, KPMG, Union Carbide Corporation, E.I. DuPont deNemours
Company, Ferro Corporation, and others, but only in matters
unrelated to these Chapter 11 cases.

Within the year prior to the commencement of these Chapter 11
cases, Foley Hoag received payments from the Debtors in the amount
of $250,000 for services rendered and expenses incurred. As of the
Petition Date, the Debtors were obligated to Foley Hoag in the
amount of $23,895 in unbilled fees and $12,362.16 in billed, but
unpaid, fees.

Mr. Kanin further discloses that he will the primary professional
responsible for the services performed for the Debtors, and his
standard hourly rate in these cases is $ 391.50. Mr. Kanin avers
that this amount represents a 10% discount from his usual hourly
rate. Other attorneys and paraprofessionals may perform services
for the Debtors from time to time. (Armstrong Bankruptcy News,
Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-0900)


BAZILLION.COM: In Talks With Strategic Partners
-----------------------------------------------
Bazillion.com, which closed its doors last week after failing to
secure more financing, said yesterday it was in talks with
strategic partners who might be interested in its business.
However, the provider of high-speed Internet services dismissed
its remaining 125 employees without severance pay after it failed
to secure additional funding, according to the Seattle Times.
The start-up, which had spent $50 million in venture capital since
its inception, was seeking an additional $35 million to $50
million from Dallas-based investment firm Hicks, Muse, Tate &
Furst. Another $6 million was available from an unnamed source if
those discussions progressed, said Bazillion Chairman Vern
Fotheringham. Internet hardware maker Cisco Systems also had
pledged an additional $60 million contingent on the Hicks Muse
funding. But those hopes collapsed when Hicks Muse refused to
agree to initial terms for an investment, forcing Bazillion to
close quickly.

What happens next depends largely on whether any companies are
interested in parts of the business. If not, Bazillion could file
for bankruptcy protection. Fotheringham did not name potential
partners he is talking to. "We're looking at all the alternatives
that would be available to protect creditors, employees and
stakeholders," Fotheringham said. "That includes the possibly of a
chapter 11 filing. However, that's not been decided yet." (ABI 18-
Jan-2001)


BUSINESS TELECOM: Moody's Downgrades Ratings to Low-B's
-------------------------------------------------------
Moody's Investors Service downgraded ratings of BTI Telecom Corp.
as follows:

      * $250 million 10 1/2% Senior Notes due 207 to Caa1 from B3

      * issuer rating to Caa1 from B3

      * senior implied rating to B3 from B2

      * Business Telecom, Inc.'s $60 million senior secured bank
        facility to B2 from B1.

All ratings are on review from possible further downgrade.

The action reflects Moody's view on the company's liquidity
situation.  It is also concerned that the $20 million capital
infusion from BTI's chairman and Welsh, Carson, Anderson and
Stowe, which it received January 12, may be insufficient to fund
the capital requirements and debt service obligations for this
year.

BTI Telecom Corp., headquartered in Raleigh, NC, is a leading
provider of telecommunications services in the southeastern United
States.


CHIQUITA BRANDS: Bondholders Expected to Approve Restructuring
--------------------------------------------------------------
Chiquita Brands International Inc.'s bondholders are expected to
go along with plans for a restructuring because they stand to
recover more that way than with a traditional chapter 11
bankruptcy, according to the Wall Street Journal.

The Cincinnati-based fruit and vegetable distributor has said it
cannot pay its debts and will stop making payments, starting with
an $87 million payment due March 28. It has hired the Blackstone
Group to negotiate a restructuring plan with its creditors. If
successful, Chiquita's restructuring plan would result in
converting a large portion of its $862 million of public debt into
common equity.

"Bondholders have an incentive to negotiate a settlement in which
they receive equity for debt rather than force a traditional
bankruptcy, which could turn into a more expensive proposition,"
said Andrew Ebersole, high-yield bond analyst at KDP Investment
Advisors. Blackstone's negotiations with bondholders by late fall
could produce a deal to be presented for court approval by the end
of the year, Ebersole said.

Chiquita has also said that it has a commitment for an $85 million
bank loan to repay maturing debt at its subsidiaries and to fund
working capital needs. Analysts said the loan should be enough to
finance Chiquita for at least nine months as it tries to
restructure. Chiquita has said its restructuring plans won't
impact day-to-day operations. (ABI 18-Jan-2001)


CHIQUITA BRANDS: Moody's Downgrades Senior Notes and Debentures
---------------------------------------------------------------
Moody's Investors Service downgraded ratings of Chiquita Brands
International, Inc. as follows:

      * $775 million senior note issues to Ca from Caa1.  The
        maturities for the notes range from 2004-09.

      * $87 million 7% convertible subordinated debentures due
        3/28/01 to C from Caa3

      * its $245 million preferred stock (series A, B and C) to "c"
        from "ca"

The senior implied rating was downgraded to Caa3 from B3, and the
senior unsecured issuer rating from to Ca from Caa1.

The downgrades came after Chiquita's announcement January 16 that
it intends to restructure its debt at CBII, the parent holding
company, with the objective of converting a significant portion of
that debt into equity. Chiquita has decided not to make interest
or principal payments on the senior note issues or the convertible
subordinated debentures, aggregating $862 million of debt, which
constitute CBII debt. Payments affected include $87 million of
principal due March 28, and coupon payments on the senior notes,
the first of which was due January 16 (and has a 30 day grace
period).

Chiquita has approximately $400 million of debt, primarily
secured, in its operating subsidiaries and intermediate holding
company. Chiquita believes the payment defaults at CBII should not
impact the continuing business of its operating subsidiaries, nor
cause any material defaults of subsidiary indebtedness.

The Ca ratings on the senior notes reflect the likely recovery
values, given their unsecured position at CBII, whose primary
asset would be equity in an intermediate holding company. The
senior note issues downgraded to Ca include:

      * $175 million 9 1/8% notes, due 2004;

      * $250 million 9 5/8% notes, due 2004;

      * $200 million 10% notes, due 2009; and

      * $150 million 10 1/4% notes, due 2006.

The C rating on the convertible subordinated debenture and "c"
rating on the preferred stock reflect their subordinated position
at CBII.

Chiquita Brands International, Inc. is based in Cincinnati, Ohio.
The company is a leading global producer of bananas, and marketer
and processor of fruits and vegetables.


CLASSIC CABLE: Moody's Junks Senior Subordinated Debt Rating
------------------------------------------------------------
Moody's Investors Service lowered the debt rating for Classic
Cable, Inc. as follows:

      * $375 million of senior subordinated notes from B3 to Caa1

      * B1 senior implied lowered to B2

      * B2 senior unsecured issuer ratings lowered to B3

All ratings remain under review for possible further downgrade.

Moody's action reflects Classic's weaker than expected operating
performance relative to original expectations, along with a very
tight liquidity position and related revisions to Moody's expected
loss assumptions for senior subordinated noteholders. Moody's
believes the prospect of a near-term event of default, and
potentially an interest payment default, is increasingly likely.

The continuing review started on November 27 last year, and will
focus management's ability to effect certain asset sales and/or
monetization activities that are deemed necessary to preclude what
in Moody's estimation are near-certain financial covenant
violations at the end of the first quarter, and the likely
ramifications of such an event of default in their absence.

Moody's will also evaluate the longer-term viability of the
company, and management's ability to improve the operating profile
by abating further subscriber erosion to competing multichannel
video service providers and enhancing the economic returns from
the retained subscriber base, as balanced by the capital
requirements to do so and the ability of the cable operations to
adequately support and service the company's debt load.

Classic Cable is a domestic multiple cable system operator with
approximately 404,000 subscribers. The company is relocating its
headquarters to Tyler, Texas.


COUNTRYCOOL.COM: On-Line Country Music Site Shuts Down Operations
-----------------------------------------------------------------
CountryCool.com Inc., an online country music site that last year
significantly reduced its presence in Nashville, Tenn., will cease
operating its web site at the end of this month due to financial
difficulties, according to a newswire report. CountryCool.com
initially secured $2 million in start-up financing from Nashville-
based Gaylord Entertainment Co. and the Next Generation Fund, a
Fairfax, Va.-based high-tech venture capital fund. But last year
the company ran into financial problems and a lack of funding
forced it in June to temporarily shut down its Nashville office,
just three months after moving into a $810,000 Music Row office.
(ABI 18-Jan-2001)


DENMANS.COM: On-Line Jeweler Shuts Down Website & Directors Resign
------------------------------------------------------------------
Denmans.com, the online jeweler, yesterday closed down its web
site and ceased operations due to a lack of additional funding,
according to a newswire report. While the company looks for a
strategic partner and/or a possible sale of its operation, four of
its directors - Terry Bowering, Nancy Pier Sindt, Brigette von
Engelbrechten and Drew Parker - have resigned, as has Kurt Dohlen,
the firm's chairman. The board of directors said they had ceased
web site operations in the company's best interests and are now
seeking strategic alternatives.  (ABI 18-Jan-2001)


DESTINY RESOURCE: Obtains Bride Financing to Pay Past-Due Payables
------------------------------------------------------------------
Destiny Resource Services Corp. announced it has obtained working
capital financing. Destiny is immediately applying over $4 million
to accounts payable, including all accounts over 60 days.

Bruce Libin, Chairman and Managing Director of Destiny, said that
"the matters announced today, together with the strong environment
for Destiny's operating businesses, make Destiny's management and
Board very confident that 2001 will be a strong year for the
Company. Our operations have been hampered by our corporate
liquidity problems. The support announced today by our major
shareholder, our Board, our senior management and our principal
lenders puts Destiny in a position to seize the many opportunities
in front of us to provide quality and value to our customers,
stability in our relationships with our suppliers and meaningful
returns to our shareholders."

"This support, together with the sale or discontinuation of
certain businesses by Destiny at year end, recent management
changes and the provision for the prudent valuation of non-core
assets, establishes the basis for a strong, focused operation in
2001. I am confident that our operations will generate cash and
profits to let Destiny be viewed by our suppliers as a preferred
customer and by our customers as a preferred supplier. Our
continuing businesses, Wolf Survey and Mapping, Destiny Line
Clearing, Double R Drilling, Battle River Construction, the
McConnell Group of Companies and Destiny Drilling Overseas,
collectively had a strong year in 2000, and are positioned to
deliver sustainable earnings and cash flow in 2001 and beyond."

Destiny also announced that it has entered into agreements with
its largest shareholder and with its two principal lenders in
relation to a bridge loan in anticipation of a rights offering,
decreasing its near-term obligations to its major equipment
financier and the previously announced conversion of accrued
interest to equity.

First Reserve Fund VIII, L.P. has advanced $3.5 million to Destiny
as a bridge loan, the proceeds of which are immediately being
applied to the payment of accounts payable. The loan bears
interest at 13% per annum, is due June 30, 2001 and is secured by
a subordinated debenture. Destiny has agreed to conduct a rights
offering to its shareholders, entitling them to purchase
additional Common Shares at $0.28 per share, with potential
proceeds of almost $4 million. The proceeds will be used to repay
the loan. If the proceeds are not sufficient to repay principal
and interest on the loan, the unpaid balance will be converted to
Common Shares at $0.28 per share. First Reserve and certain
directors and officers of Destiny have committed to fully
subscribe rights issued to them.

First Reserve has converted interest on an existing debenture
accrued to December 31, 2000 in the amount of $1,257,032 into
Common Shares of Destiny at $0.25 per share (the closing price of
Destiny shares on the date the conversion was approved by the
Board of Directors of Destiny). Interest accruing from January 1,
2001 to June 30, 2001 will be converted to Common Shares on a
monthly basis at a weighted average trading price, calculated
monthly. As a result of the interest conversion, GMAC Commercial
Credit Corporation - Canada, the Company's working capital lender,
has released reserves of $900,000. Over $500,000 of this amount is
being applied to the payment of accounts payable.

RoyNat Inc., the Company's principal equipment lender has agreed
to an amortization schedule for the payment of Destiny's
approximately $8,000,000 obligation to RoyNat that provides for
Destiny to repay RoyNat over 54 months, instead of approximately
30 months as per the prior arrangement. The impact of this is to
reduce Destiny's debt service obligations to RoyNat by
approximately $1.5 mm per year.

Destiny also announced that it expects to report a net loss for
2000 of approximately $7 million. This amount includes
approximately $5.9 million of losses from operations that were
closed or sold in 2000 and provisions against the carrying value
of non-core assets. The Company expects that it will report cash
flow for 2000 from on-going operations of approximately $4.8
million and EBITDA for 2000 from on-going operations of
approximately $9 million. The operations that were closed or sold
in the fourth quarter of 2000 are Sharp Environmental, Destiny
Oilfield Construction (formerly Fitzpatrick Contracting) and JD &
ME Oilfield Construction.

Mr. Libin expressed the appreciation of Destiny to First Reserve
for, in effect, backstopping the planned rights offering. "The
bridge loan enables us to move past some liquidity pressures while
permitting all shareholders to equitably participate in the share
issue we are planning." With the conversion of the accrued
interest owed to First Reserve and the conversion of interest for
the first half of 2001, and in the event of full conversion of the
bridge loan principal and interest to Common Shares, First
Reserve's ownership interest in Destiny would increase from
approximately 34% to approximately 61%. "Like First Reserve, I and
other members of Management have committed to fully exercise our
rights. I anticipate other shareholders will as well as they
understand Destiny's capacity and ability to produce sustainable
earnings and cash flow" said Mr. Libin. Destiny expects to issue
the rights, with accompanying disclosure material, to its
shareholders in late first quarter or early second quarter 2001.

The financing transactions described above were approved by
Destiny's Board of Directors, with the representatives of First
Reserve abstaining. The Board of Directors noted that Destiny had
minimal availability on its credit lines, had a working capital
deficiency and was in need of an immediate cash injection to meet
its obligations to its customers and suppliers. The Board also
noted that other alternatives such as monetization of non-core
assets could not be accomplished on a timely basis.

The Company relied on the "financial hardship" exemption from the
valuation and minority approval requirements of OSC Rule 61-501.
The Rule states that the exemption is available where: (1) the
Company is in serious financial difficulty; (2) the transactions
are designed to improve the financial position of the Company; (3)
the "bankruptcy, insolvency or reorganization" exemption under the
Rule is not applicable; and (4) the Board of Directors and not
less than two-thirds of the independent Directors of the Company
acting in good faith determine that paragraphs (1) and (2) are
applicable and that the terms of the transactions are reasonable
given the Company's circumstances. The material change report for
the transactions will be filed less than 21 days before the
expected date of closing of the transactions given the Company's
immediate need for financing.

First Reserve has advised Destiny that it has acquired the bridge
loan convertible debenture and the 5,028,128 Common Shares of
Destiny on the conversion of the accrued interest (and will
acquire Common Shares on the further conversion of interest during
the first six months of 2001) for investment purposes only and
that unless Destiny requires additional financing, First Reserve
has no immediate intention to acquire additional securities of
Destiny except by virtue of the exercise of rights and conversion
of the bridge loan convertible debenture. The number of shares to
be issued on future interest conversion is dependent upon the
price of Destiny's Common Shares on The Toronto Stock Exchange for
each month through June, 2001. The number of shares that will be
issued if the average price is $0.40, $0.35, $0.30 or $0.25 is
approximately 992,000, 1,113,000, 1,322,000 and 1,587,000,
respectively.

Destiny is the only service company in Canada and internationally
providing geophysical survey, line clearing and shothole drilling
services from a single source, thereby offering its clients
greater convenience and accountability in a complete front-end
package. With over 25 years of operating experience in front-end
services, together with a strategic presence in oilfield
construction and maintenance, Destiny provides quality, integrated
services to the oil and gas exploration and production industry in
Canada and internationally.


EDISON MISSION: S&P Continues CreditWatch & Negative Outlook
------------------------------------------------------------
In a press release issued last week, Standard & Poor's incorrectly
reported that Edison Mission Energy Funding Corp.'s triple-'B'-
minus rating had been removed from CreditWatch with negative
implications. The rating is still on CreditWatch negative.

Standard & Poor's on January 18 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 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.

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.


GLOBALSTAR: Moody's Lowers Senior Unsecured Debt Ratings to Ca
--------------------------------------------------------------
Moody's Investors Service performed the following ratings
downgrades:

      * senior unsecured debt ratings of Globalstar, LP from Caa1
  to Ca

      * preferred stock rating of Globalstar Telecommunications
  Ltd. from "caa" to "c"

The ratings action concludes Moody's review for possible downgrade
initiated in November.  It reflects Globalstar's announcement that
it suspended payments on all its funded debt obligations, and has
hired The Blackstone Group to assist in restructuring efforts.

Moody's says the ratings reflect limited prospects for recovery
for Globalstar creditors in a restructuring given the company's
very low subscriber levels and very modest growth.

Globalstar, a joint venture between Loral Space & Communications,
Qualcomm and other international satellite and telecommunications
companies, is a global mobile satellite telephony provider.


ICG COMMUNICATIONS: Engages Logan as Claims & Noticing Agent
------------------------------------------------------------
The large number of creditors and other parties in interest
involved in ICG Communications, Inc.'s chapter 11 cases, the
company tells the U.S. Bankruptcy Court in Wilmington, may impose
heavy administrative and other burdens upon the Court and the
Office of the Clerk of the Court.  To relieve the Court and the
Clerk's Office of these burdens, the Debtors propose to engage
Logan & Company as a claims processing and noticing agent in these
chapter 11 cases.  Logan is a data processing firm that
specializes in claims processing, noticing and other
administrative tasks in Chapter 11 cases.

The Debtors anticipate, as the Claims and Noticing Agent, that
Logan will, at the request of the Debtors or the Clerk's Office:

      a. prepare and serve required notices in these chapter 11
         cases, including:

         *  a notice of the commencement of these chapter 11 cases
            and the initial meeting of creditors under the Code;

         *  notice of claims bar dates;

         *  notices of objections to claims;

         *  notices of any hearings on a disclosure statement and
            confirmation of a plan of reorganization;

         *  such other miscellaneous notices as the Debtors or the
            Court may deem necessary or appropriate for an orderly
            administration of these chapter 11 cases;

      b. within five business days after the service of a
         particular notice, file with the Clerk's Office a
         certificate or affidavit of service that includes:

              (i)  a copy of the notice served;

              (ii) an alphabetical list of persons upon whom the
                   notice was served, along with their addresses;
                   and

              (iii) the date and manner of service;

      c. maintain copies of all proofs of claim and proofs of
         interest filed in these cases;

      d. maintain official claims registers in these cases by
         docketing all proofs of claim and proofs of interest in a
         claims database that includes the following information
         for each such claim or interest asserted;

         * the name and address of the claimant or interest holder
           and any agent thereof, if the proof of claim or proof of
           interest was filed by an agent;

         * the date the proof of claim or proof of interest was
           received by Logan and/or the Court;

         * the claim number assigned to the proof of claim or proof
           of interest;

         * the asserted amount and classification of the claim; and

         * the applicable Debtor against which the claim or
           interest is asserted.

      e. implement necessary security measures to ensure the
         completeness and integrity of the claims registers;

      f. transmit to the Clerk's Office a copy of the claims
         registers on a weekly basis, unless requested by the
         Clerk's Office on a more or less frequent basis;

      g. maintain an up-to-date mailing list for all entities that
         have filed proofs of claim or proofs of interest and make
         the list available upon request to the Clerk's Office or
         any party in interest;

      h. provide access to the public for examination of copies of
         the proofs of claim or proofs of interest filed in these
         cases without charge during regular business hours;

      i. record all transfers of claims pursuant to Bankruptcy Rule
         3001(e) and provide notice of the transfers as required by
         Rule 3001(e);

      j. comply with applicable federal, state, municipal and local
         statutes, ordinances, rules, regulations, orders and other
         requirements;

      k. provide temporary employees to process claims, as
         necessary;

      l. promptly comply with such further conditions and
         requirements as the Clerk's Office or the Court may at any
         time prescribe; and

      m. provide such other claims processing, noticing and related
         administrative services as may be requested from time to
         time by the Debtors.

In addition, the Debtors seek to employ Logan to assist them
with, among other things:

      a. the preparation of their schedules, statements of
         financial affairs and master creditor lists and any
         amendments thereto;

      b. the reconciliation and resolution of claims; and

      c. the preparation, mailing and tabulation of ballots for the
         purpose of voting to accept or reject a plan or plans of
         reorganization.

The Debtors have agreed to make an advance payment to Logan to be
applied to the final billing in an amount equal to $50,000.  The
Debtors have agreed to compensate Logan according to this fee
schedule:

                    INTERNAL RECONCILIATION REPORTING

    Claim Variance Reports, Claim Workbook, etc.
        Report Processing & Print               $100 Per Request
        Customized Layout                        $90 Per Hour

                                CONSULTING

    Account Executive Support                   $145 Per Hour
    Statement & Schedule Preparation            $200 Per Hour
    Programming Support                         $100 Per Hour
    Project Coordinator                         $105 Per Hour
    Data Entry                                   $50 Per Hour
    Clerical                                     $35 Per Hour

                             CLAIMS DOCKETING

    Claims Date Stamped, Mylar Label
      Affixed, and Input to Database             $50 Per Hour

    Claims Microfilmed For the Court             $0.25 Per Image

                             TELECOMMUNICATIONS

    On-site Connection to Mainframe              $0.30 Per Minute

                               OTHER SERVICES

     Copies                                      .15 Each
     Newspaper and Legal Notice Publication    Quoted As Required
     Fax                                       $1.00 Per Page

(ICG Communications Bankruptcy News, Issue No. 3; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


JCC HOLDING: Casino Restructuring Takes Toll on Harrah's Earnings
-----------------------------------------------------------------
Harrah's Entertainment, Inc. (NYSE: HET), said it expects to
report a net loss of $1.36 to $1.40 per diluted share for the
fourth quarter of 2000.

The company said the net loss is due primarily to certain
restructuring and other special charges that were recorded in the
quarter:

     --  Reserves of approximately $220 million related to the
previously announced bankruptcy reorganization of JCC Holding
Company, which is approximately 43 percent owned by Harrah's
Entertainment.  The impact of the reserves on the fourth-quarter
results is estimated to be approximately $1.25 per share after
tax.

     --  Reserves of approximately $39 million related to the
previously announced bankruptcy reorganization of National
Airlines, which is approximately 48 percent owned by Harrah's
Entertainment, in addition to its share of fourth-quarter
operating losses, which approximate $2 million.  The impact of
these losses on Harrah's Entertainment's fourth-quarter earnings
per share is estimated to be 23 cents after tax.

     --  Losses and reserves of approximately $16 million, or 9
cents per share after tax, related to other write-offs and
reserves, net of recoveries; project opening costs, and
incremental depreciation related to assets to be removed from
service in 2001.

     Harrah's operating results also were impacted by the:

     --  Lower than normal hold percentage at the Rio.  The hold
percentage was low in  October and November, but December's hold
percentage was above normal.  The impact on the quarter as a whole
was an estimated 4 cents per share after tax.

     --  Weather-related disruptions affected results at Eastern
and Central Region casinos, reducing per-share earnings by an
estimated 7 cents after taxes.  Harsh winter weather throughout
the Central Region affected patronage during the key Christmas to
New Year's holiday period.

     --  Losses arising from mark-to-market adjustment of insurance
contracts held by the company amounted to approximately $5
million, or an estimated 3 cents per share after tax.

Fourth-quarter diluted earnings per share, adjusted for the impact
of the items discussed above, is expected to range from 31 to 35
cents.

"Due to the expected reduction of losses associated with Harrah's
New Orleans, which assumes a successful reorganization of JCC
Holding by March 31, and the expected reduction of losses related
to National Airlines, we believe the strong performances of our
core Harrah's brand properties should enable Harrah's
Entertainment to meet or exceed analysts' current consensus
estimates for year 2001 earnings per share," said Phil Satre,
Chairman and Chief Executive Officer.

"The year 2000 was disappointing for us," he said. "Stellar
operating results at most of our properties were offset by issues
in New Orleans, National Airlines and the Rio. But I believe we
are about to put those issues behind us.

"We are looking at a very stable competitive supply situation in
most markets for 2001," Satre said. "Demand appears to be firm and
our consumer marketing-based strategy is firing on all cylinders.
I believe Harrah's has an excellent opportunity to grow revenues
and earnings organically by capitalizing on our geographic
distribution, brand strategy, Total Rewards player-loyalty
program, information technology capabilities and emphasis on
customer service. We also are making carefully targeted capital
investments at some of our existing locations where we can see the
opportunity for appropriate returns.

"We believe we are ahead of competing casino operators in using
our investment in technology to build strong customer
relationships. Aside from weather problems, the fourth-quarter
performances at key Harrah's brand properties provide a compelling
example of the power of Total Rewards in convincing customers to
consolidate their casino play at our properties," he said.

"The year 2001 will be the first year Total Rewards is integrated
into all of our properties, and we expect it will help drive
continued same-store sales growth."

Founded more than 60 years ago, Harrah's Entertainment, Inc. is
the most recognized and respected name in the casino-entertainment
industry, operating 21 casinos in the United States under the
Harrah's, Showboat, Rio and Players brand names. With a combined
database of more than 19 million players, Harrah's Entertainment
is focused on building loyalty and value with its target customers
through a unique combination of great service, excellent products,
unsurpassed distribution, operational excellence and technology
leadership.


KEYSTONE CONSOLIDATED: Moody's Downgrades Ratings to Junk Status
----------------------------------------------------------------
Moody's downgraded ratings for Keystone Consolidated Industries,
Inc., as follows:

      * $100 million of 9.625% senior secured notes from B3 to
        Caa3.  The notes are due 2007.

      * $60 million senior secured revolving credit facility from
        B2 to Caa1

      * senior implied rating from B3 to Caa2

      * senior unsecured issuer rating from Caa1 to Ca

The outlook remains negative.

The downgrades reflect continuing weak market conditions for wire
products, Keystone's negative free cash flow, and its very limited
liquidity.  Moody's believes there is a heightened potential of
Keystone defaulting on its debt, and that the company will have
nearly used up its liquidity in February.  The $4.8 million
semiannual interest payment on its 9.625 senior secured notes is
due February.

For the first nine months of 2000, Keystone earned EBITDA of $12.6
million, which did not cover interest and capex of $21.2 million.
While Keystone has taken steps to reduce its losses, no
significant change in its free cash flow is likely in the near
term, as the ongoing weakness in US fabricated wire and rod
markets could well continue through at least the first half of
2001.

Keystone Consolidated Industries, Inc., headquartered in Dallas,
manufactures fabricated wire products, industrial wire, and carbon
steel rod for the agricultural, industrial, construction, OEM, and
retail consumer markets.


LANGUAGEWARE.NET: Shuts Down Operations & Pares to Skeleton Staff
-----------------------------------------------------------------
LanguageWare.net, parent company of multilingual, multicultural
B2B technology firm Wholetree.com, is shutting down, according to
a newswire report. On Jan. 5, the company said that unless it
received offers or funding for the business, it would be forced to
commence the dissolution of the business. LanguageWare.net is,
however, still looking to sell its core technology. Seventeen of
its 23 U.S. employees have been laid off, leaving a skeleton staff
to wind up operations. (ABI 18-Jan-2001)


LERNOUT & HAUSPIE: UST Appoints Official Creditors' Committee
-------------------------------------------------------------
Patricia A. Staiano, the United States Trustee for Region III, has
confirmed the appointments to the Official Committee of General
Unsecured Creditors of the following institutions and their
respective representatives or counsel:


                       Fortis Bank N.V./S.A.

                       KBC Bank N.V.

                       Deutsche Bank N.V.

                       State Street Bank & Trust Company
                         as Indenture Trustee

                       Wilmington Trust Company
                         as Indenture Trustee

                       U. S. Trust Company of New York
                         As Indenture Trustee

                       JVC Americas Corporation

                       Studio Tognini B.V.

By letter directed to Ms. Staiano, Bradley J. Lucido, Vice
President for Merrill Lynch Investment Managers, announced that
Merrill Lynch Corporate Bond Fund, Inc. - High Income Portfolio,
resigned immediately after its appointment.  Mr. Lucido says that
the Committee, as currently composed, is controlled by creditors
of Lernout & Hauspie Speech Products N.V. and L&H Holdings USA,
with conflicting interests to those of the Dictaphone creditors.
As a result, Merrill Lynch believes that the Committee cannot
adequately represent the interests of the holders of the holders
of the Dictaphone 11-3/4% Senior Subordinated Notes due 2005.  Mr.
Luciso urges the U.S. Trustee to appoint a separate unsecured
committee in the Dictaphone case, or alternatively, a separate
committee of Dictaphone bondholders. (L&H/Dictaphone Bankruptcy
News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


LERNOUT & HAUSPIE: Establishes New Credit Line with Banking Group
-----------------------------------------------------------------
Belgian banking group KBC Bancassurance spokesman Piet Jaspaert
told Reuters Wednesday they were currently negotiating with
Lernout & Hauspie Speech Products N.V. to establish a new credit
line, but did not provide any details.  L&H, which has $489.6
million in debt, claimed earlier this month to be in talks to
acquire $60 million debtor-in-possession financing.

Mr. Jaspaert added that negotiations could be completed soon, and
that Philippe Bodson's appointment Tuesday as L&H's new CEO would
"absolutely" help negotiations, Reuters said.

Belgian-Dutch financial services group Fortis is also involved in
the negotiations, according to Belgian newspaper De Financieel
Economische Tijd.

KBC and Fortis were part of a syndicate of five banks that had
lent L&H about $430 million to finance its acquisition last year
of Dictaphone Corp. The banks called in their loans in November
after L&H missed a payment and talks to reschedule the debt broke
down. The move forced L&H to file for bankruptcy protection in the
United States and in Belgium.


LERNOUT & HAUSPIE: Reuters Says DaimlerChrysler Shows Interest
--------------------------------------------------------------
An "unidentified industry source" told Reuters late last week that
DaimlerChrysler may be interested in buying the speech-recognition
developer's technology part of Belgium's Lernout & Hauspie Speech
Products N.V. while it goes through the bankruptcy restructuring
process.

The source said the German-American auto group's interest was very
tentative, and that the acquisition would be of minor significance
to DaimlerChrysler and would be more of an opportunity purchase
than a strategic move, Reuters relates.  The technology allows
drivers to make phone calls or surf the Internet through voice
commands.

A DaimlerChrysler spokeswoman called the information "pure
speculation" and declined to comment, Reuters said. Officials at
L&H also declined to comment.


LERNOUT & HAUSPIE: Shareholders Eye Auditors as Target Defendants
-----------------------------------------------------------------
Michael Lange, representing shareholders of bankrupt speech
recognition software company Lernout & Hauspie Speech Products
N.V. and Dictaphone Corp., said shareholders plan to sue the
company's auditors KPMG International, Reuters relates.  Mr. Lange
is a partner at Boston law firm Berman, DeValerio & Pease.  The
firm is handling one of the shareholder lawsuits seeking class-
action status against L&H.

"Whenever you have a massive accounting fraud like this one when
the fraud is pervasive, the question is not if you're going to sue
the auditors but when you sue the auditors," Mr. Lange told
Reuters Thursday. He added, "Lead counsel has not been appointed.
Once that happens KPMG will be front and center."  The case was
filed in U.S. District Court in Boston.


LERNOUT & HAUSPIE: Chairman Roel Pieper Resigns
-----------------------------------------------
The Board of Directors of Lernout & Hauspie Speech Products N.V.
(EASDAQ: LHSP, OTC: LHSPQ), a world leader in speech and language
technology, products and services, announced that Roel Pieper
resigned his position as Chairman of the Board of Directors. A new
board of directors will be elected, and a new chairman will be
appointed, following an upcoming extraordinary shareholders
meeting.

Roel Pieper said, "I want to give L&H's new CEO, Philippe Bodson,
complete latitude to form a new management team that will guide
the company through the next stage of its recovery plan and
beyond. I fully support and have the utmost confidence in
Philippe, who is well qualified to lead this effort. In addition
to making room for new leadership, I wish to dedicate more of my
time to my position at Insight Capital and to my professorship at
the University of Twente in the Netherlands."

Philippe Bodson, President, Chief Executive Officer and Managing
Director, said, "Roel played a leading role in securing
reorganization protection for L&H in Europe and the U.S., which
has enabled our company to proceed with a recovery plan. We thank
Roel for his invaluable contribution toward rebuilding L&H and
understand his wishes to focus his energies on his venture capital
projects and teaching."

Separately, the Company also announced that board member Bernard
Vergnes, former President of Microsoft Europe, resigned two weeks
ago.

                     About Lernout & Hauspie

Lernout & Hauspie (L&H) is a global leader in advanced speech and
language solutions for vertical markets, computers, automobiles,
telecommunications, embedded products, consumer goods and the
Internet. The company is making the speech user interface (SUI)
the keystone of simple, convenient interaction between humans and
technology, and is using advanced translation technology to break
down language barriers. The company provides a wide range of
offerings, including: customized solutions for corporations; core
speech technologies marketed to OEMs; end user and retail
applications for continuous speech products in horizontal and
vertical markets; and document creation, human and machine
translation services, Internet translation offerings, and
linguistic tools. L&H's products and services originate in four
basic areas: automatic speech recognition (ASR), text-to-speech
(TTS), digital speech and music compression (SMC) and text-to-text
(translation).

For more information, please visit Lernout & Hauspie on the World
Wide Web at www.lhsl.com.

L&H is a trademark of Lernout & Hauspie Speech Products N.V. in
the United States and/or other countries. All other product names
or trademarks referenced herein are trademarks of their respective
owners.


LERNOUT & HAUSPIE: Judge Allows AllVoice Computing to File Suit
---------------------------------------------------------------
U.S. Bankruptcy Judge Judith Wizmur granted British company
AllVoice Computing Plc a preliminary injunction to prevent Lernout
& Hauspie Speech Products N.V. and Dictaphone Corp. from selling a
voice recognition software product called NaturallySpeaking,
Reuters relates.

AllVoice claims in its patent-infringement lawsuits, filed in a
U.S. district court and at the First U.S. Circuit Court of
Appeals, that the 3.25 and 5.0 versions of NaturallySpeaking
infringe on its U.S. patent of WordExpress. WordExpress is a
dictation software product that converts speech into written
words.  An automatic bankruptcy court stay prevented AllVoice from
pushing through with its lawsuits.

L&H attorneys told the judge that NaturallySpeaking was a mainstay
among the company products and would affect the reorganization if
subject to injunction, Reuters said.


LOEWEN GROUP: Resolves Claims Asserted by American Commercial Bank
------------------------------------------------------------------
To resolve the Stay Relief Motion and related matters, The Loewen
Group, Inc. and American Commercial Bank agree and stipulate that:

      (1) The Debtor shall make a Catch-Up Payment to ACB in the
amount of $22,861.77 on the Agreement Effective Date, that is, the
date that the Agreement becomes a final, nonappealable order of
the Court; such amount is equal to the amount of interest accrued
from March 1, 2000 through September 30, 2000, calculated at the
appplicable non default rates.

      (2) The Debtor shall make monthly Future Payments to ACB in
the amount of $3,307.63 on the first business day of each month
beginning on November 1, 2000, provided that the Agreement
Effective Date has occurred, until a plan of reorganization is
confirmed by the Court or any other further order of the Court
addressing the obligations arising under the 1999 Agreement; such
amount is the amount of interest that would have accrued during
the month prior to payment on the outstanding principal balance
under the 1999 Agreement at a non-default interest rate of 12% per
annum.

          (a) To the extent that the amount of any Future Payment
              is greater than the Actual Amount of interest, the
              difference shall be applied to reduce the outstanding
              principal balance under the 1999 Agreement.

          (b) To the extent that the amount of any Future Payment
              is less than the Actual Amount, the difference shall
              be payable, without interest, pursuant to the terms
              of the Confirmation Order or such other further order
              of the Court addressing the obligations under the
              Loan Documents.

      (3) Future Payments shall be considered timely so long as
they are received by ACB on or before the 10th calendar day of the
applicable month; if a Late Fee Amount, Catch-Up Payment or Future
Payment required under the Stipulation and Order is not received
by ACB by the 10th calendar day of the applicable month, then:

          (a) ACB or its counsel shall provide notice of the non-
              receipt of such payment by telecopier to the counsel
              to the Debtors.

          (b) The Debtors shall have 10 days after its counsel
              receives such a notice to cure any such late payment.
              If the Debtors fail timely to exercise their cure
              right, ACB may schedule a hearing in the Court with
              respect to the relief requested in the Motion on not
              less than 30 days' notice and provide notice to the
              counsel to the Debtors with the date of such hearing.

      (4) The Catch-Up Payment and the Future Payments shall be
credited first to interest and then to principal under the 1999
Agreement.

      (5) The Debtors' obligation in respect of the late payment of
installments up to the time of the Stipulation is agreed to he
equal to the amount of $3,100 (the Late Fee Amount); the Debtors
shall pay one-half of the Late Fee Amount to ACB on the Agreement
Effective Date and the remaining one-half in accordance with the
Confirmation Order or such other further order of the Court
addressing the issue.

      (6) The parties agree that the amount of interest that
accrued under the 1999 Agreement for the period from July 11, 1999
through and including February 29, 2000 is $23,563.25 which shall
be payable, without interest, pursuant to the terms of the
Confirmation Order or such other further order of the Court
addressing the matter.

      (7) Other than the Late Fee Amount, so long as the Catch-Up
Payment, the First Late Fee Amount Payment and the Future Payments
are made in a timely fashion as contemplated in the Stipulation,
ACB waives any right that it may have under the Loan Documents to
a claim for late fees or charges, prepayment premiums,
acceleration fees, premiums or penalties or "interest on interest"
on account of untimely payments under the Loan Documents.

      (8) ACB waives any right that it may have under the Loan
Documents to a claim for interest on account of untimely payments
at any "default" or "penalty" rate exceeding the applicable
nondefault rate.

      (9) ACB and the Debtors reserve their rights concerning:

          (a) a determination of the value of ACB's collateral; and

          (b) any contractual or statutory rights that ACB may have
              under section 506(b) of the Bankruptcy Code or other
              applicable law to assert and be paid a claim for
              reasonable fees (including attorneys' fees), costs or
              charges under the Loan Documents. (Loewen Bankruptcy
              News, Issue No. 32; Bankruptcy Creditors' Service,
              Inc., 609/392-0900)


LTV CORPORATION: Judge Issues Vendor & Supplier Comfort Order
-------------------------------------------------------------
Judge Bodoh issued an order at the Debtors' behest confirming the
statutory administrative expense priority status of The LTV
Corporation's undisputed obligations to suppliers for the
postpetition delivery of goods and provisions of services.

In the ordinary course of the Debtors' businesses, numerous
suppliers and service providers provide the Debtors with goods and
services that are integral to the Debtors' on-going operations. In
addition, as of the Petition Date, the Debtors had outstanding
prepetition purchase orders with numerous suppliers, including
outstanding orders for a variety of raw materials and supplies
that the Debtors require to produce finished goods for their
customers and maintain current production schedules.

As a result of the commencement of these Chapter 11 cases, the
Debtors believe that the suppliers may perceive a risk that they
will be treated as prepetition general unsecured creditors for the
invoiced cost of any supply shipments made or services provided
after the Petition Date pursuant to outstanding orders. In
particular, certain suppliers may incorrectly assess their risk of
non-payment based upon prior unfavorable experiences in the steel
industry, including losses incurred (a) in other steel
manufacturer reorganizations, and (b) in connection with the
failures of certain steel-related businesses under current
adverse market conditions. As a result, the suppliers may refuse
to ship raw materials and supplies to the Debtors or provide
essential services to the Debtors unless the Debtors issue
substitute postpetition purchase orders or provide other
assurances of payment.

Issuing substitute purchase orders on a postpetition basis would
be administratively burdensome, time consuming and
counterproductive to the Debtors' reorganization efforts. Such a
requirement imposed by suppliers - or other request for assurance
of payment - inevitably will lead to delays in the Debtors'
receipt of essential goods and services, ultimately (a) resulting
in the disruption of established production schedules and "just in
time" distribution systems, and (b) hindering the Debtors' ability
to fulfill their obligations to their customers. Moreover, even if
new postpetition purchase orders are issued, there is no assurance
that suppliers will feel sufficiently confident of the Debtors'
ability to pay for new goods and services to continue doing
business with the Debtors without interruption.

Under these circumstances, Judge Bodoh confirmed that the Debtors'
undisputed obligations to suppliers arising from (a) shipments of
goods delivered to and accepted by the Debtors following the
Petition Date and (b) the provision of services to the Debtors
following the Petition Date at the Debtors' request will be
entitled to administrative expense priority status under the
Bankruptcy Code. (LTV Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


MEDICAL ARTS: Sells Assets and Lab Operations to Dynacare
---------------------------------------------------------
Dynacare Inc. (NASDAQ: DNCR), a leading provider of clinical
laboratory services in North America, said it signed an agreement
to purchase the laboratory operations and assets of Medical Arts
Laboratory, Inc. and Southern Medical Arts Laboratory, Inc.

Medical Arts Laboratory, Inc., Southern Medical Arts Laboratory,
Inc., and the parent company, Southern Medical Arts Companies,
Inc., filed for protection under Chapter 11 of the U.S. Bankruptcy
Code in October of 2000.  Since then, all three companies have
continued to operate under Chapter 11. This agreement is subject
to the approval of the Bankruptcy Court for the Western District
of Oklahoma.

Dynacare's expertise in target regional markets and hospital
partnerships allow the company to provide innovative and trusted
clinical laboratory services to its clients, their patients and
professional partners. Dynacare provides services in 18 U.S.
states, with a significant presence in Canada. Dynacare's
laboratory partners include: Memorial Hermann Healthcare System
in Houston, TX, University Health System, Inc. in Knoxville, TN
(Owner/Operator of the University of Tennessee Medical Center),
Froedtert Memorial Lutheran Hospital in Milwaukee, WI, and
Allegheny General Hospital, a member of the West Penn Allegheny
Health System in Pittsburgh, PA.


NORTHPOINT COMMUNICATIONS: Case Summary
---------------------------------------
Debtor: NorthPoint Communications Group, Inc.
         fka Northpoint Communications Holdings, Inc.
         303 2nd St. S Tower
         San Francisco, CA 94107-1366

Debtor affiliates separately filing for chapter 11 petitions in
the same court:

         NorthPoint Communications of Virginia
         NorthPoint Communications, Inc.
          aka Firstmile Communications, Inc.
         NorthPoint International, Inc.
          fka Northpoint Europe, Inc.

Type of Business: Provides dedicated Internet access service via
DSL technology.

Chapter 11 Petition Date: January 16,2001

Court: Northern District of California (SanFrancisco)

Bankruptcy Petition Nos.: 01-30125 through 01-30128

Judge: Thomas E. Carlson

Debtors' Counsel: Michael S. Lurey, Esq.
                   Law Offices of Latham and Watkins
                   633 W 5th St. #4000
                   Los Angeles, CA 90071
                   213-485-1234


NORTHPOINT COMMUNICATIONS: Moody's Issues Further Downgrades
------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Northpoint
Communications Group, Inc. as follows:

      * $400 million senior unsecured notes due 2010 from Caa2
        to Ca

      * senior implied rating from Caa1 to Caa3

      * issuer rating from Caa2 to Ca

This concludes the review for possible downgrade initiated
November 30 last year.

Northpoint announced January 16 that it had filed a voluntary
petition for bankruptcy under Chapter 11 of the US bankruptcy
code. The company also announced it would proceed with a
structured sale of substantially all business and assets.

Northpoint intends to seek approval of open bid procedures from
the U.S. Bankruptcy court.  The company has received conditional
commitment for Debtor-in-Possession financing for up to $38
million to allow it to continue operations.

Northpoint is based in San Francisco, California and provides
dedicated Internet access service via DSL technology.


OWENS CORNING: Walks Away from Burdensome Warehouse Leases
----------------------------------------------------------
Owens Corning moved for an Order authorizing the rejection of
leases of nonresidential real property effective as of January 17,
2001. The lessors, the property, and the rental and expiration
date of these leases are:

      Location: Norandex Bowling Green, Bowling Green, Kentucky
      Landlord: Blue Ridge Group, Inc.
                1953 Scottsville Rd, Ste. 201
                Bowling Green, KY 42104
      Expiration: 7/31/01
      Base Rent: $ 4,781.25 monthly

      Location: Norandex Buffalo NY DC-016, Cheektowago, NY
      Landlord: Commercial Properties Associates
                P. O . Box 391440
                Solon, Ohio 44139
      Expiration: 3/31/01
      Base Rent: $6,029.32 monthly

      Location: OEM Columbus Fab Warehouse, Grove City, Ohio
      Landlord: Accurate Logistics, Ltd.
                3330 Urbancrest Industrial Drive
                Grove City, Ohio 43123
      Expiration: 3/31/01
      Base Rent: $11,400 monthly

      Location: OEM Oklahoma City Plant, Oklahoma City, OK
      Landlord: Crossroads Distribution Center LLC
                6403 N. Grand Blvd., Ste. 200
                Oklahoma City, OK 73116
      Expiration: 12/31/04
      Base Rent: $14,750 monthly

These locations were previously leased by the Debtors for use as
warehouses. In addition to the obligation to pay rent, the leases
in general also obligate the Debtors to maintain insurance,
perform certain property maintenance and incur other related
charges. The Debtors have determined, in their business judgment,
that these substantial costs constitute an unnecessary drain on
their cash resources. By rejecting these leases now, the Debtors
will avoid incurring unnecessary administrative charges that
provide no tangible benefit to the Debtors' estates, creditors or
interest holders. The Debtors believe these leases are either at
or above market rental rates and therefore that the Debtors
would be unable to obtain any value for the leases through
assumption and assignment. According, the Debtors have asked Judge
Walrath to permit their rejection in the best interests of these
estates. (Owens Corning Bankruptcy News, Issue No. 8; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


PACIFIC GAS: S&P Assigns BBB Rating to PG&E National Energy Group
-----------------------------------------------------------------
Standard & Poor's assigned its triple-'B' corporate credit rating
to PG&E National Energy Group Inc. (NEG). At the same time,
Standard & Poor's raised its ratings on PG&E Generating Co. L.L.C
(PGen) and USGen New England Inc. (USGenNE), wholly owned
subsidiaries of NEG, to triple-'B' from triple-'B'-minus. The
ratings on NEG, PGen, and USGenNE reflect the consolidated
strength of the group owned by NEG. Standard & Poor's also
removed the ratings of PGen and USGenNE from CreditWatch Negative
where they were placed on Dec. 13, 2000. The outlooks are stable.

Standard & Poor's also affirmed its ratings on NEG's subsidiaries
as follows:

      * PG&E Gas Transmission-Northwest (GTN) at single-'A'-minus;

      * PG&E Energy Trading Holdings Co. (ETH) at triple-'B'-plus;

      * Indiantown Cogeneration Funding Corp. at triple-'B'-minus;

      * Selkirk Cogen Funding Corp. at triple-'B'-minus;

      * Northampton Generation Co. L.P. at triple-'B'-minus; and

      * Panther Creek Partners at triple-'B'-minus.

The outlooks are stable.

The rating actions follow the formation of a new special-purpose,
bankruptcy-remote entity, NEG Holdings LLC (NEG Holdings), and the
contribution by PG&E Corp. to NEG Holdings of 100% of the issued
and outstanding shares of NEG. PG&E Corp. will own all of the
membership interests of NEG Holdings while the latter will hold
all of the outstanding shares of NEG. PG&E Corp. (double-
'C'/CreditWatch Negative/'C') is also the parent of Pacific Gas &
Electric Co. (Pacific Gas & Electric), a regulated utility
(double-'C'/CreditWatch Negative/'C').

NEG, a wholly owned subsidiary of PG&E Corp., has ownership and
management responsibilities in 30 power plants in 10 states, with
a combined generating capacity of nearly 7,700 MW and more than
10,000 MW under construction or in advanced development. NEG is
also engaged in wholesale energy marketing and risk management,
which is conducted by ETH and owns GTN, a 612-mile Federal
Energy Regulatory Commission regulated pipeline, which extends
from the Canadian border to the California/Oregon border and
transports 2.7 bcf/day of natural gas.

The triple-'B' rating on NEG reflects the following risks:

-- Asset concentration in the Northeast region of the U.S., which
is expected to contribute about 40% of the overall corporate 10-
year average cash flow;

-- Concentration in natural gas-fired generating stations, which
are expected to comprise more than 50% of overall corporate cash
flow;

-- Debt at PGen is structurally subordinated to more than $1
billion of debt at the project level;

-- Over the next 10 years, NEG will rely on merchant generation
for more than 30% of its overall cash flow;

-- An aggressive construction program with more than 30% of the
10-year average cash flow contributed by projects currently under
construction;

-- Use of Siemens Westinghouse 501G and ABB GT24B turbines in its
construction program, which use less commercially proven
technology; and

-- Bullet maturities and significant guarantees that will have to
be financed.

However, the following strengths offset the risks:

-- Strong quality of cash flow-18% of NEG's 10-year average cash
flow coming from PG&E Gas Transmission, a single-'A'-minus rated
regulated pipeline.

-- A portfolio of operating power projects, of which more than 50%
of the cash flow is contributed by investments that have
investment-grade characteristics.

-- Over the past three years, NEG demonstrated a strong operating
record with availability averaging 94%.

-- Strong projected consolidated funds-from-operations interest
coverage at more than 4 times for the five-year period through
2005.

Standard & Poor's has assigned NEG's rating based primarily on
NEG's stand-alone creditworthiness. NEG's rating is higher than
PG&E Corp.'s because of the perceived economic disincentives of
PG&E Corp. or its creditors to file these subsidiaries into
bankruptcy. Though ring-fenced subsidiaries are often not rated
appreciably higher than their parents for a number of economic and
legal reasons, the extraordinary circumstances of the California
problem, the economic self-sufficiency of NEG, the rationale for
implementing the ring-fencing structure, and the ring-fencing
provisions themselves allow Standard & Poor's more flexibility in
this instance.

Along with certain other considerations, the interposition of NEG
Holdings between PG&E Corp. and NEG structurally insulates, or
ring-fences NEG from the possible bankruptcy or further credit
downgrade of PG&E Corp. GTN and ETH, which were previously ring-
fenced from PG&E Corp., remain ring-fenced from both PG&E Corp.
and NEG and therefore carry higher ratings than NEG.

As part of this restructuring, NEG will assume a significant
amount of guarantees currently provided by PG&E Corp. to various
subsidiaries of NEG. With respect to such guaranteed obligations,
NEG will substitute its own creditworthiness for that of PG&E
Corp. The rating of NEG incorporates the assumption of these
guarantees by NEG. Standard & Poor's also notes that, as part of
the ring-fencing restructuring, NEG has adopted a restriction
limiting its ability to declare dividends. Standard & Poor's views
this dividend restriction as improving NEG's financial position
and its ability to meet its obligations.

In Standard & Poor's opinion, the ring-fenced structure should
protect NEG and its subsidiaries in all but extreme cases from
rating downgrades that Standard & Poor's may take with respect to
either PG&E Corp. or Pacific Gas & Electric. Standard & Poor's
concludes that if an otherwise healthy NEG is filed into
bankruptcy, the adverse financial and contractual consequences of
such a filing would likely outweigh any advantages. While the
asset base of NEG is large (more than $10 billion), a large
proportion of these assets are pledged to secure project-financed
debt. In addition, should NEG be consolidated in a bankruptcy of
PG&E Corp., a significant amount in contingent liabilities may
become immediately due and payable. In Standard & Poor's view,
NEG's value as a going concern (not included in any bankruptcy
proceedings of PG&E) is greater than if it was part of a
consolidated bankruptcy filing; outside of bankruptcy, a large
portion of NEG's contingent liabilities (those relating to the
energy marketing and trading) probably would not be called.
Moreover, the effect of the ring-fencing should, at worst, be
neutral to PG&E Corp. creditors because NEG contributed a small
amount of cash flow to PG&E Corp.--less than 10% of PG&E Corp.'s
cash flow -- and PG&E Corp. is being relieved of its obligations
under significant guarantees. Standard & Poor's believes any loss
of liquidity resulting from the implementation of the dividend
restriction is outweighed by the benefit of transferring the
guarantees to NEG.

                       OUTLOOK: STABLE

The stable outlook reflects the strong, stable and predictable
cash flow contributed from NEG's investments. Further, the outlook
anticipates a financial profile that remains strong in comparison
with its peers and demonstrates only gradual improvement. A
demonstrated ability to operate in a restructured power market
will be needed for any ratings upgrades, Standard & Poor's said. -
--CreditWire


PACIFIC GAS: Fitch Cuts Preferred Securities' Rating to C
---------------------------------------------------------
Fitch lowered its ratings of Pacific Gas and Electric Company (Pac
Gas) preferred securities based on nonpayment of maturing
commercial paper.

Pac Gas has not paid its $33 million of commercial paper which
matured January 17, and omitted dividends on its preferred stock
last week. The utility maintains cash reserves of approximately
$700 million, but has stated it is not in a position to pay
maturing or accelerated obligations.

Fitch initially lowered the ratings of Pac Gas below investment
grade on January 4, reflecting Fitch's view that default on this
debt is a real possibility. Because Pac Gas' first mortgage debt
has a healthy margin of collateral relative to outstanding secured
debt, Fitch is not changing the rating for that security class.
The Rating Watch remains at Evolving. The new ratings are:

     Pacific Gas and Electric Company:

     --  First mortgage bonds remain at 'B-'.

     --  Preferred securities lowered to 'C' from 'CC';

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 Pac Gas 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 Pac Gas' 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.

Pacific Gas and Electric Company is a wholly owned subsidiary of
PG&E Corp., and is based in San Francisco, Calif.


SAFETY-KLEEN CORPORATION: Seeks Extension of 9027 Removal Period
----------------------------------------------------------------
The Safety-Kleen Corporation is seeking to extend the time,
pursuant to Rule 9027 of the Federal Rules of Bankruptcy
Procedure, during which the bankruptcy estates may remove actions
pending as of the commencement of these Chapter 11 cases to the
District of Delaware for continued litigation and resolution.  As
of the Petition Date, Safety-Kleen reminds Judge Walsh, the
Debtors were parties to hundreds of civil actions pending in
various jurisdictions in the United States involving a variety of
claims in contract or tort, as well as claims arising under
federal, state, and local environmental laws.

The Debtors have requested an extension of the removal period to
the earlier to occur of (i) July 5, 2001, or (ii) 30 days after
the entry of an Order terminating the stay with respect to any
particular action sought to be removed. (Safety-Kleen Bankruptcy
News, Issue No. 12; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


SERVICE MERCHANDISE: Landlord Delivers Non-Disturbance Agreement
----------------------------------------------------------------
After the Court gave its approval for Service Merchandise Company,
Inc. to sublease space at certain designated stores to TJX, the
Debtors delivered to Melaver, Inc. (landlord of Store No. 157
located at Savannah, Georgia), a non-disturbance agreement (NDA).

In response, the landlord sent the Debtors a letter advising that,
despite the Court's ruling that the proposed transaction with TJX
was a sublease, the landlord believed it to be an assignment. In
the letter, the landlord enclosed a form of NDA acceptable to the
landlord.

The Debtors found that the form of NDA supplied by the Landlord
does not comply with the Primary Lease because, other than by
name, it is not an NDA. Specifically, this Landlord-proposed NDA
provides that the Landlord's non-disturbance obligations terminate
if the Debtors' interest in the Savannah Store is terminated. For
the Debtors, this negates the protection of the NDA at the precise
moment when it is most needed. In light of that, TJX advised the
Debtors that it would not consummate the sublease transaction for
the Savannah Store, the Debtors related.

The Debtors explain that an NDA is an agreement whereby a party
with a senior interest in real estate agrees not to disturb the
rights of the holder of a junior interest in the same real estate.
According to the Debtors, such an agreement is most commonly found
where the party with the junior interest intends to make a
substantial investment in the real estate or will otherwise
generate value for the holder of the senior interest. Such an
agreement, the Debtors opin, is particularly important
where the holder of the senior interest and the holder of the
junior interest are not in privity because in such circumstance,
the holder of the junior interest has no contractual rights it can
rely on to protect its investment.

The Debtors remind the Court that in the case with the Savannah
Store, TJX intends to invest substantial sums in the Store. In
approving the TJX Sublease, the Court has found that this
investment will benefit the Landlord.

The Debtors advise that in the event that they continue their
business, remain in the Savannah Store and otherwise comply with
the Primary Lease, the Landlord would have no ability to interfere
with TJX's interests. However, in the event that the Debtors'
interest in the Savannah Store are terminated, the Primary Lease
is rejected or, in the extreme case where the Debtors successfully
emerge from chapter 11, the Landlord would be able to interfere
with TJX's right to possess the Savannah Store.

The Debtors complain that as a result of the landlord's actions
regarding the NDA, the Debtors have been prevented from
consummating the proposed transaction with TJX.

Accordingly, the Debtors moved the Court to compel Melaver, Inc.
to deliver an NDA in a form satisfactory to the Debtors. In the
motion, the Debtors indicated that they remain willing to work
with the Landlord to agree to an acceptable NDA.

Following the Debtors' motion for compelling the landlord to
deliver the NDA in compliance with the TJX Sublease order,
Melaver, Inc. filed a motion requesting that the Court alter or
amend its memorandum because Melaver believed that the Court had
incorrectly characterized the TJX transaction on the Savannah
Store as a "sublease" instead of an "assignment". Melaver also
appealed under 28 U.S.C. section 158 to the United States District
Court against the Bankruptcy Court's judgment authorizing "Debtors
and the TJX Companies, Inc. to Enter into Sublease With Respect to
Debtors' Store No. 157 and For Related Relief . . ."

Subsequently, by way of an agreed order signed by Mr. Paul G.
Jennings of Beth A. Dunning, the Debtors' local counsel and by Mr.
Robert C. Goodrich of Farris, Warfield & Kanaday, Plc.,
representing Melaver, Judge Paine authorized that the Landlord
shall execute the NDA as attached to the agreed order and the
Landlord's Motion to Alter or Amend the Court's Memorandum as well
as the Landlord's Notice of Appeal shall each be deemed withdrawn
with prejudice. The agreed order was later superseded by a
corrected agreed order with a slightly amended form of NDA agreed
by both parties and approved by the Bankruptcy Court. (Service
Merchandise Bankruptcy News, Issue No. 15; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


SUN HEALTHCARE: Finalizes Agreement on Johnson Injury Claims
------------------------------------------------------------
Monique Wood Faulkner, as personal representative for the estate
of Betty E. Johnson, filed claims (no. 4928 and 98) each in the
amount of $10 million against Sun Healthcare Group, Inc. Ms.
Faulkner agrees that she only has one claim against the Debtors,
which arises out of a personal injury lawsuit against the Debtors.
In connection with the matter, Claimant agreed to assert a claim
of $100,000 against the Debtors' bankruptcy estates, and to
collect insurance proceeds for the remainder of the settled
amounts, which has in fact been paid by the insurance companies.

The parties agree and stipulate that:

      (1) Claim No. 4928 is disallowed and expunged in its
entirety.

      (2) Claim No. 98 is allowed in the amount of $100,000

      (3) Claimant shall not assert any other proof of claim in
connection with these bankruptcy cases. (Sun Healthcare Bankruptcy
News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


U.S. FURNITURE: Closes Down Operations
--------------------------------------
U.S. Furniture Industries, a High Point, N.C.-based manufacturer
and employer for decades, has gone out of business after 53 years,
according to a newswire report. The company closed its doors
officially on Monday, said David Lees, president of U.S.
Furniture. Lees said a financial problem with a sister
manufacturing division in Malaysia led to the decision to shut
down assembly operations in North Carolina.

"Lang Furniture became financially unable to manufacture the
product, and the parent company (Malaysian-based Land & General
Berhad) didn't have the cash flow to bail them out," he said.
"Without the ability to manufacture the product as needed, there
was no need to keep the assembly and sales end of the business
open." While U.S. Furniture already is beginning to liquidate
assets, Lees stressed that the company is not expected to enter
into bankruptcy and will meet its financial obligation. (ABI 18-
Jan-2001)


VENCOR INC: Settles SERP and Other Claims with W. Earl Reed
-----------------------------------------------------------
On January 6, 2000, W. Earl Reed filed a proof of claim (as
amended or supplemented by additional proofs of claim by Reed) 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 Reed Claims, and any
claim that Reed could have asserted in the Bankruptcy Cases:

          (a) upon Vencor's assumption, pursuant to the Plan, on
              the Effective Date, of the SERP including the SERP
              Amendments, all payments owed to Reed under the SERP
              shall be made in accordance with the terms of the
              SERP; and

          (b) an allowed Put Right in respect of Reed's Old
              Preferred Stock shall receive the treatment provided
              in paragraph 5.08 of the Plan, under which monetary
              damages in respect of Reed's allowed Put Right shall
              be canceled in exchange for the cancellation of all
              obligations of Reed arising under that certain
              Nontransferable Full Recourse Note in the original
              principal amount of $990,000 dated April 30, 1998
              (the Reed Preferred Equity Interest Loan).

      (2) Reed expressly consents to and agrees to abide by the
SERP Amendments, including, without limitation, any future
amendment to the SERP, ncluding any future amendment eliminating
or modifying any change in control provision under the SERP (the
Change In Control Amendment); provided, however, that no such
future amendment (except the Change In Control Amendment) shall
defer the commencement of payments to Reed under the SERP, or
reduce the present dollar value of Reed's claim under the SERP,
determined based on the actuarial assumptions that the SERP and
other provisions in effect refer to.

      (3) Reed 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, Reed expressly
waives any claim under the Separation Agreement and Release of
Claims between Reed and Vencor, Inc., executed on or about
September 30, 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) Reed's Indemnification Claim shall be allowed subject to
the conditions of the stipualtion and all rights of
indemnification, contribution and/or other similar relief of Reed
against the Debtors or any of them shall be preserved; provided,
however, that

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

          (b) any and all obligations of the Debtors to provide
              indemnification, contribution and/or other similar
              relief to Reed, 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 Reed as maker and Vencor, Inc. as payee, dated
June 15, 1998, in the original principal amount of $623,500 (the
Reed Note), and Reed reserves all rights to raise any defenses
that he may have under the terms of the Reed Note to the Debtors'
Reserved Note Claims.

      (8) Except as provided for in the stipulation, the Reed
Releasors release, discharge and acquit forever the Debtors and
other from all claims, causes of action, liabilities, etc.,
provided that such release shall not be deemed to limit Reed's
rights to coverage under any insurance maintained by the Debtors
or any of them.

      (9) Except as set forth in the stipulation, the Reed
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 Reed Note, the Put Right, the
Reed Preferred Equity Interest Loan, the Reed Employment
Agreement, any options to acquire Old Common Stock, and the
Separation Agreement.

      (The Reed Releasors refer to Reed, 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 Reed 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.)

      (10) The Reed 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
similar relief against Ventas in respect of claims made against
any Reed Releasor by reason of any action of Reed which is or may
be the basis of a claim for indemnification, contribution and/or
other similar relief, whether arising under any of the foregoing
agreements or otherwise.

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


VENCOR INC: Court Approves Extension of DIP Financing Maturity
--------------------------------------------------------------
Vencor, Inc. announced that the United States Bankruptcy Court for
the District of Delaware approved an amendment to the Company's
debtor-in-possession financing to extend its maturity until March
31, 2001. The Amendment also revises and updates certain financial
covenants. In addition, the Amendment extends through March 31,
2001, the period of time for the Company to file the appropriate
pleadings to request confirmation and consummation of its plan of
reorganization.

The DIP Financing and existing cash flows will be used to fund the
Company's operations during its restructuring. As of January 17,
2001, the Company had no outstanding borrowings under the DIP
Financing.

The Company is currently soliciting approval of the Company's
fourth amended plan of reorganization filed with the Court on
December 14, 2000 (the "Amended Plan"). The Court has scheduled a
confirmation hearing on the Amended Plan for March 1, 2001.

Vencor and its subsidiaries filed voluntary petitions for
reorganization under Chapter 11 with the Court on September 13,
1999.

Vencor, Inc. is a national provider of long-term healthcare
services primarily operating nursing centers and hospitals.


WHEELING-PITTSBURGH: Wants to Assume General Electric Contract
--------------------------------------------------------------
Wheeling-Pittsburgh Steel Corporation requested the Court to allow
it to assume a contract with General Electric Industrial Systems
and to use escrow funds to replace and/or retrofit certain PCB
transformers and PCB capacitors.

The Debtors explain that the United States and WPSC are parties to
a stipulation approved by the Bankruptcy Court for the Western
District of Pennsylvania on May 11, 1989, and amended on April 26,
1991.  The Stipulation, entered in WPSC's previous Chapter 11
case, resolved claims made by the United States on behalf of the
Environmental Protection Agency involving the civil penalty
provisions of a Consent Decree.  Under the Stipulation an escrow
fund was established and funded by an initial deposit by WPSC in
April 1991.  The Escrow Agreement permits WPSC to request approval
from the EPA to withdraw funds from the escrow account for
projects that are beneficial to the environment, but that are not
required by law.  Any funds remaining in the escrow account after
nineteen years must be turned over to the United States.  The
escrow account has a current balance of approximately $4,000,000.

In November 1999 WPSC requested approval from the EPA to withdraw
funds from the escrow account for three environmentally beneficial
projects.  This request included funds for the replacement or
retrofit of twenty-two PCB transformers and thirty PCB capacitors;
the purchase and installation of a SODAR meteorological station;
and the partial funding of an environmental education center at
Oglesbay Park.  The EPA has approved WPSC's application to
withdraw funds from the escrow account for these three projects.

To carry this out, WPSC entered into a contract with General
Electric to replace or retrofit the relevant PCB transformers and
capacitors.  The total cost of equipment and services for this
project was bid by GE at $1,064,785 for equipment, and $556,860
for labor:

           Location            Equipment costs     Labor costs
           --------            ---------------     -----------
        Allenport plant         $ 414,375          $ 251,090
        Mingo Junction          $ 631,350          $ 269,120
        Mingo Junction          $  19,060
        Yorkville               None               $ 28,700
        Yorkville                                  $  7,950

The Debtor argued that the estate will benefit by the replacement
of these aging PCB transformers, and these benefits will be
provided at virtually no cost to the WPSC estate since the costs
for the performance of the GE contract will be drawn from the
escrow account. (Wheeling-Pittsburgh Bankruptcy News, Issue No. 4;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


WEC COMPANY: Moody's Junks Bond Ratings & Says Outlook Negative
---------------------------------------------------------------
Moody's Investors Service downgraded the ratings on WEC Company's
and Woods Equipment Company's as follows:

   WEC Company:

      - $130 million of 12% senior unsecured notes, due 2009, to
        Caa3 from B2;

      - $40 million secured credit facility to B3 from Ba3;

   Woods Equipment:

      - $25 million of senior discount notes, due 2011 to Ca from
        Caa1.

Moody's lowered the senior implied rating from B1 to Caa2, and the
unsecured issuer rating from B3 to Ca.  The outlook is negative.

Moody's foresees a delay in the payment of the coupon on the 12%
senior unsecured notes.  The ratings are also a reflection of the
company's weak overall performance caused primarily by a
significant decline in demand in the construction segment (23% of
sales).

Moody's says the negative outlook is a reflection of the
likelihood of continued weakness in the construction segment in
2001 which could drain the company's cash.

Since WEC was operating under tight credit measurements as a
result of its 1999 recapitalization, it had no cushion to absorb
lower results. In an 8-K filed on 1/12/01, the company stated it
would not make the interest payment due 1/16/01 under its 12%
senior notes because of working capital constraints. ( WEC's
working capital requirements reach a seasonal peak in the first
quarter due to increases in accounts receivable). In addition, the
company stated it is currently negotiating a new, asset-based
senior credit facility for up to $50 million, to be used for
general corporate purposes, including working capital. The new
facility is expected to be in place by the end of January.
Following the closing on the new facility, WEC intends
to pay the coupon on the senior notes, which it believes will be
within the 30-day grace period before nonpayment becomes an event
of default. Failure to pay the coupon would place the company in
default.

Moody's noted the company violated bank covenant requirements for
two consecutive quarters through 9/30/00 (for which it obtained
waivers), and will likely fail to meet covenants for the fourth
quarter ended 12/31/00. The new credit facility will incorporate
revised covenant tests.

At the direction of its majority equity holder, Madison Dearborn
Capital Partners L.P. II ("MDCPII") - which owns approximately 92%
of the company - WEC has installed new operating management,
specifically, Ed Olson as Chairman of the Board of Directors and
Mike Goldberg as acting Chief Financial Officer. Both executives
have considerable experience in restructuring troubled companies.

WEC Company, the operating subsidiary of Woods Equipment Company,
is located in Rockford, Illinois, and is a leading manufacturer of
attachments for a variety of mowing, cutting and clearing,
construction, material handling, landscaping and grounds
maintenance applications under the brand names "TISCO," "Tru-
Part," "TRUPOWER," "CALCO," "WoodsCare," "Woods," "Gannon,"
"Wain-Roy," "Central Fabricators," "Gill," and "Alloway" brand
names.


BOND PRICING: For the week of January 22 - 26, 2001
---------------------------------------------------
Following are indicated prices for selected issues:

AMC Ent 9 1/2 '09                  66 - 69
Amresco 9 7/8 '05                  54 - 56
Asia Pulp & Paper 11 3/4 '05       36 - 38
Chiquita 9 5/8 '04                 48 - 50
Conseco 9 '06                      82 - 84
Federal Mogul 7 1/2 '04            29 - 31
Globalstar 11 3/8 '04              10 - 12
Oakwood Homes 7 7/8 '04            35 - 38
Owens Corning 7 1/2 '05            26 - 28(f)
PSI Net 11 '09                     33 - 36
Pacific G & E 6 1/4 '04            84 - 86
Revlon 8 5/8 '08                   48 - 51
Saks 7 '04                         77 - 79
Sterling Chemical 11 3/4 '06       50 - 52
Teligent 11 1/2 '07                16 - 18
Tenneco 11 5/8 '09                 56 - 58
TWA 12 '02                         77 - 80(f)


                           *********

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,
Aileen Quijano and Peter A. Chapman, Editors.

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

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                      *** End of Transmission ***