TCR_Public/010201.MBX          T R O U B L E D   C O M P A N Y   R E P O R T E R

             Thursday, February 1, 2001, Vol. 5, No. 23

                            Headlines

ALLIED PRODUCTS: Completes $21.5 Million Asset Sale to Enprotech
AMC ENTERTAINMENT: Plans to Shut Down 80 Movie Theaters
APPLE ORTHODONTIX: Files Plan of Liquidation
BIG PARTY: Asks for Extension of Exclusive Period to April 23
C14NET.COM: Needs More Funds To Sustain Operations

CALIFORNIA POWER: Moody's Withdraws Short-Term Issuer Rating
CARMIKE CINEMAS: With Strings, Exclusivity Extended to Sept. 28
COMPUTER.COM: Sells Assets to 4Sure.com
DIMAC HOLDINGS: Selling Transkrit Unit to Raise $34 Million More
ELDERVISION CORP.: Looks for Partner To Supply $5MM of Funding

F5 NETWORKS: Reports Q1 Results & Expects Poor 2Q Results
GC COMPANIES: Fourth Quarter Loss Tops $118 Million
GENESIS HEALTH: Rejects Congregate Care Lease with Mountain Crest
GO.COM: Walt Disney Pulling the Plug on this Internet Portal

HEDSTROM HOLDINGS: Wants Until May 8 to Make Decisions on Leases
ICG COMMUNICATIONS: Rejecting 12 Leases to Save $276,000 Monthly
INTEGRATED HEALTH: Court Approves CEO Dr. Elkins Termination Pact
LATINO.COM: Lays Off Most Of Staff
LERNOUT & HAUSPIE: Wins Two-Month Extension from Belgian Court

LTV CORPORATION: Cash Collateral Fight Brews
MICROPORTAL.COM: Files Chapter 7 Petition in Manhattan
OFFICELAND INC.: Files Assignment in Bankruptcy in Canada
OWENS CORNING: Seeks To Buy Miles Fiberglass & Composites Assets
PACIFIC AEROSPACE: Delays Interest Payment

PAUL HARRIS: Proposes $2 Million KERP to Keep Officers on Board
PRANDIUM, INC.: Hires Crossroads as New Financial Advisor
RBX CORPORATION: Creditors Object to Kirkland & Ellis' Employment
REGENT LAS VEGAS: Court Approves $20MM of Interim Financing
RELIANCE INSURANCE: A.M. Best Assigns E Rating

REUTER MANUFACTURING: Virchow Replaces PricewaterhouseCoopers
SENETEK PLC: Says It'll Shut Down if Operating Losses Continue
SIMITAR ENTERTAINMENT: Mar. 7 Disclosure Statement Hearing Set
SUN HEALTHCARE: Inks Management Buy-Out Pact for U.K. Operations
THROTTLEBOX MEDIA: Files For Chapter 11 Protection in New York

TRANS WORLD: Seeks Court's Nod to Nix Icahn Ticket Deal
VENCOR, INC.: Agrees To Modify Stay For Insured Litigation Claim
W.R. GRACE: Eyes Chapter 11 After 81% Rise in Asbestos Claims
WASTE SYSTEMS: Court Gives Go Ahead For Interim Financing
XEROX CORP.: $119 Million Loss Exceeds Expectations

                            *********

ALLIED PRODUCTS: Completes $21.5 Million Asset Sale to Enprotech
----------------------------------------------------------------
Allied Products Corp. announced that on January 24, 2001, the
Company completed a transaction involving the sale of a
substantial majority of the assets of its Verson and Verson
Standard Products divisions. The purchaser is Enprotech Corp. of
New York, and the purchase price was $21.5 million, less certain
adjustments. Allied Products has been operating under Chapter 11
protection since October 2, 2000. (New Generation Research,
January 30, 2001)


AMC ENTERTAINMENT: Plans to Shut Down 80 Movie Theaters
-------------------------------------------------------
AMC Entertainment Inc. (AMC) will close as many as 548 screens,
or about 80 of its 186 theaters, becoming the second big movie
exhibitor to announce massive shutdowns, according to Reuters.
The fourth-ranked U.S. theater operator, based in Kansas City,
Mo., said during an investor-conference call that it has targeted
307 mostly underperforming screens for disposal by early 2004 and
is putting another 241 on watch for possible closure.

The company will shut down 40 of the 307 targeted screens by the
end of February and perhaps 70 to 75 in each of the next three
years, Chief Financial Officer Craig Ramsey said. AMC said it
would take charges of about $4 million to $4.5 million in each of
the next three fiscal years as a result. AMC said it faces no
cash crunch. The amounts available under its credit lines and
elsewhere, according to Ramsey, are sufficient to fund its future
capital expenditure commitments. On Jan. 24, AMC reported a
fiscal third-quarter loss of $8.2 million on revenues of $305.4
million. (ABI World, January 30, 2001)


APPLE ORTHODONTIX: Files Plan of Liquidation
--------------------------------------------
Apple Orthodontix, Inc. filed a Plan of Liquidation and related
Disclosure Statement with the U.S. Bankruptcy Court. The Court
scheduled a hearing on January 31, 2001 to consider approving the
adequacy of the related Disclosure Statement. The Company has
been operating under Chapter 11 protection since January 27,
2000. (New Generation Research, January 30, 2001)


BIG PARTY: Asks for Extension of Exclusive Period to April 23
-------------------------------------------------------------
The Big Party Corporation, debtor, sought court authority to
extend its exclusive periods to file a plan of reorganization and
solicit acceptances thereto.

The debtor is represented by Paul Traub and Steven E. Fox of the
firm Traub, Bonacquist & Fox LLP, New York and Laura Davis Jones
and Bruce Grohsgal, of the firm Pachulski, Stang, Ziehl, Young &
Jones, Wilmington, DE.

The debtor sought an extension of the debtor's exclusive period
and acceptance period to an including April 23, 2001 and June 22,
2001, respectively.

On August 8, 2000, the court approved the comprehensive asset
acquisition proposal submitted by a joint venture formed by
iParty Retail Store Corp., Hilco Trading Co., Inc. and The Ozer
Group, LLC, which transaction provides for iParty's acquisition
of substantially all of the debtor's assets at 33 retail
locations and at the debtor's existing corporate offices. The
debtor's 21 remaining locations will be closed and the leaseholds
for the closing locations will be marketed by Hilco/Ozer. Since
the closing, a variety of post-closing disputes have arisen
between the debtor, iParty and Hilco/Ozer. The ultimate outcome
of these disputed matters will have material affect on creditor
distributions and on the debtor's ability to confirm a plan
herein. The debtor and its representatives have and continue to
face a number of challenging issues and overcome a variety of
hurdles which must be conquered before a plan can be formulated,
proposed and confirmed. The debtor believes that given the
additional time, a consensual plan of reorganization/liquidation
for the debtors is achievable.


C14NET.COM: Needs More Funds To Sustain Operations
--------------------------------------------------
CI4NET.com Inc. is a U.S. publicly held holding company whose
principal business is acquiring and developing early stage
Internet and communications/wireless applications businesses with
a European and Pacific Rim focus.

Recent market conditions have heavily affected the Internet and
Technology sectors, making it very difficult for companies within
those sectors to raise either public or private financing.

The Company posted a $43.4 million net loss for the three months
ended October 31, 2000 compared to net loss of $0.9 million for
the three months ended October 31, 1999 and was $112.9 million
for the nine months ended October 31, 2000 compared to net loss
of $1.8 for the nine months ended October 31, 1999. The net loss
was due to increases in cost of revenue, general and
administration expenses, sales and marketing expense and
amortization expense.

Although the company has reduced its operating costs consistent
with market conditions, C14NET.COM requires funding to
financially support their Partner Companies and to cover the
overhead of the company. These funding requirements, in
aggregate, are expected to be significant and there can be no
assurance that the currently projected requirements will remain
the same. As of October 31, 2000, the company had approximately
$1.1 million in cash and cash equivalents. These funds, and the
funds subsequently received from Kevin Leech and the purchasers
of bridge notes, have largely been expended. The company's
overdraft facility with HSBC was anticipated to provide it with
sufficient proceeds to fund negative cash flow through to mid-
January 2001, but the company requires significant additional
financing in the very near future to fund operations. It is
presently pursuing a permanent financing but have not completed
it and cannot provide assurance as to whether it will be
completed. The permanent financing being pursued could consist of
common stock or debt securities. If additional funds are raised
through the issuance of equity securities, the existing security
holders may experience substantial dilution. Alternatively,
C14NET.COM may seek to obtain bank financing or other sources of
credit for purposes of funding future operations, although there
can be no assurance that such funds will be available on
acceptable terms. Unless the company's financing requirements are
met there will be substantial doubt as to the company's ability
to continue as a going concern.


CALIFORNIA POWER: Moody's Withdraws Short-Term Issuer Rating
------------------------------------------------------------
Moody's Investors Service has withdrawn the Not Prime short-term
issuer rating of California Power Exchange Corporation (CalPX).

According to Moody's, the rating action reflects the CalPX's
recent announcement that it was winding down its business and
would be terminating operations by no later than April 2001.

CalPX's decision to terminate its operations follows the December
15, 2000 ruling by the Federal Energy Regulatory Commission,
which called for an immediate end to the purchase requirement by
the three California investor owned utilities and terminates the
CalPX's tariff on April 1, 2001, Moody's relates.

With the passage of AB1890, CalPX was established in 1997. It
serves as a non-profit public benefit corporation that is said to
have restructured the electric utility industry within the state
of California. CalPX serves to provide an auction and
clearinghouse for buyers and sellers of electricity within
California.


CARMIKE CINEMAS: With Strings, Exclusivity Extended to Sept. 28
---------------------------------------------------------------
Carmike Cinemas, Inc., sought and obtained an extension of its
exclusive period during which to propose a plan of reorganization
through September 28, 2001.  Judge Sue L. Robinson accepted
Carmike's argument that a long extension is necessary to allow
the company to operate through the summer months and determine
whether last summer's dismal results were an aberration or will
be the norm.

The extension is not absolute.  Carmike's Official Committee of
Unsecured Creditors and the Debtors' Senior Lenders retain the
right to deliver a written notice to Carmike and its lawyers at
Weil, Gotshal & Manges LLP any time after April 11, 2001,
"requiring Carmike to file a motion, within two weeks of receipt
of such Notice, pursuant to which Carmike shall have the burden
of demonstrating 'cause' pursuant to section 1121(d) of the
Bankruptcy Code for a continuation of their exclusive right to
file a chapter 11 plan [through September 28, 2001]." Judge
Robinson indicates that she will entertain such a motion
promptly. In the event that the Committee or the Senior Lenders
deliver a Notice and no motion is filed, then the Debtors'
Exclusive Period will be deemed terminated without further
action. All of this, of course, is without prejudice to Carmike's
right to request further extensions of its Exclusive Period.


COMPUTER.COM: Sells Assets to 4Sure.com
---------------------------------------
Computer sales firm 4Sure.com yesterday announced that it has
purchased the assets of Maynard, Mass-based Computer.com for an
undisclosed sum, according to LocalBusiness.com. Word of the
agreement between the privately held companies comes almost a
year to the day after Computer.com grabbed headlines by spending
nearly half of its first venture capital round on a Super Bowl
advertising blitz. Trumbull, Conn.-based 4Sure said Computer.com
would become a key part of its plan to expand into the small and
home office market. The two-year-old 4Sure, which employs about
160 people, also sells computer equipment and services directly
to medium-sized businesses, government agencies and educational
institutions. (ABI World, January 30, 2001)


DIMAC HOLDINGS: Selling Transkrit Unit to Raise $34 Million More
----------------------------------------------------------------
AmeriComm Direct Marketing, Inc. and the other Chapter 11 debtors
in the case of Dimac Holdings Inc., et al. sought a court order
approving the sale of substantially all of the assets of the
debtors' Transkrit business unit pursuant to an asset purchase
agreement.  The purchasers are Poser Business Forms, Inc. and
Mail-Well, Inc.

The court confirmed the debtors' second amended joint Chapter 11
plan on December 19, 2000.  The effective date of the plan is
currently awaiting the generation of at least $58.2 million of
asset sale proceeds from the sales of the debtors' non-core
businesses.  To date, the debtors have consummated the sale of
their AmeriComm Direct Marketing non-core business resulting in
gross sale proceeds of $12 million, and received approval to sell
their Double Envelope and Convertagraphics non-core businesses by
order dated January 10, 2001 that will result in gross sale
proceeds of $31.6 million, before capital adjustments. The
proposed sale of Transkrit and Label Art will generate an
estimated $13 million and $21 million in gross sale proceeds,
respectively.

The sale of Transkrit and related assets is subject to higher or
better bids submitted at or prior to an auction to be held on
January 23, 2001 at 2:30 PM at the offices of Weil, Gotshal and
Manges LLP, New York. If the purchaser is outbid, the purchaser
will be paid $50,000 for expenses incurred.

Any entity, other than the purchaser, that wishes to submit a
competing offer must offer at least $100,000 in excess of the
purchase price. All subsequent bids shall be made in increments
of no less than $50,000.


ELDERVISION CORP.: Looks for Partner To Supply $5MM of Funding
--------------------------------------------------------------
ElderVision Corp., an Oakmont, Pa. firm which recently suspended
its operations after running out of cash, is fishing around for a
financial partner to help it with its problems. The company,
which makes laptop computers for retirement communities,
reportedly needs about $5 million to get around its current cash
shortfall. But with venture capital not likely to be forthcoming,
ElderVision is considering putting its operations on the selling
block. (New Generation Research, January 30, 2001)


F5 NETWORKS: Reports Q1 Results & Expects Poor 2Q Results
---------------------------------------------------------
In line with its December 27 announcement, F5 Networks, Inc.
(Nasdaq:FFIV) reported revenue of $24.7 million for the first
quarter of fiscal 2001, ended December 31, 2000. The company also
reported a loss of $10.3 million before tax benefits and a one-
time restructuring charge of $1.1 million related to headcount
reductions and other measures aimed at streamlining the company's
operations.  Including the restructuring charge and tax benefits,
the net loss for the quarter was $8.9 million.

Robert Chamberlain, senior vice president and chief financial
officer, said that all of the actions related to the company's
restructuring charge reflected in the December quarter were
completed in January.  As a result of those actions, which
included a 17 percent reduction in the company's workforce,
Chamberlain said the company expects to reduce its operating
expenses by $7 million to $8 million over the remainder of the
current fiscal year. In addition, he said the company is pursuing
other means to reduce its expense structure and improve its
operational efficiency.

John McAdam, president and chief executive officer, emphasized
that reducing the company's cost structure is just one element of
management's plans to reposition the company and enable it to
compete successfully in a slower-growing economy.

"It's painfully obvious to everyone, including our customers and
partners, that the business climate today is very different from
what it was a year or even six months ago," McAdam said. "At that
time, F5's biggest challenge was to acquire the people and
resources necessary to stay ahead of demand for our products and
services.

"In the December quarter, the sudden economic downturn and the
resulting drop-off in revenue forced us to re-examine our entire
business model and address issues that had arisen. Our just-
completed restructuring -- both the reduction in headcount and
the subsequent realignment of groups and priorities within the
remaining organization -- resolved many of those issues. In
addition, we are taking a number of other steps to adapt our
business model to the realities of the current economic
environment and position the company to catch the first wave of
economic recovery.

"During the next six months our product initiatives will be aimed
at improving the functionality of our current offerings and
delivering complementary products that will enable us to sell
into a broader segment of the market. We are also turning up our
investments in product integration that will allow us to enhance
functionality across our entire suite of traffic and content
management products.

"Despite the slowdown in our sales growth, the company's relative
market position remains strong and we continue to win significant
business against our larger competitors. With several product
upgrades scheduled to roll out over the next two quarters, we
believe we can continue to widen our competitive edge and further
strengthen our market position. As we shift the focus of our
sales and marketing efforts to large enterprise customers, we
also believe the superior functionality and reliability of our
products will become an even more important differentiator
against our competition.

"With that in mind, I'm confident the company is well-positioned
to succeed in the current market and show steady improvement
throughout the remainder of this year. Our target is to break
even in Q3 of the current fiscal year and return to solid
profitability in Q4. For the current quarter, our goal is revenue
in the range of $26 million to $28 million with a loss before
taxes and any one-time charges of $0.22.

F5 Networks is the leader in Internet Traffic and Content
Management (iTCM). Our award winning integrated suite of high-
performance best of breed products provides an end-to-end
solution for automatically and intelligently managing Internet
content and traffic -- globally. Our products remove bandwidth
congestion and optimize the availability and speed of mission-
critical Internet servers and applications, including web
publishing, content delivery, e-commerce, caching, firewalls and
more. F5 Networks helps companies avoid the risk of being
burdened with ill-performing networks that do not meet end user
expectations, while enabling network administrators to better
control and predict the performance of their e-Business
infrastructure. Our products are widely deployed in large
enterprises, the top service providers, financial institutions,
government agencies, healthcare, and portals throughout the
world. The company is headquartered in Seattle, Washington, and
has offices throughout North America, Europe and Asia Pacific. F5
Networks is located on the web at www.f5.com.


GC COMPANIES: Fourth Quarter Loss Tops $118 Million
---------------------------------------------------
GC Companies, Inc. (NYSE: GCX), a national and international
motion picture exhibitor, reported financial results for its
fourth quarter and fiscal year ended October 31, 2000. On October
11, 2000, the Company and a number of its domestic subsidiaries
filed petitions to reorganize under Chapter 11 of the United
States Bankruptcy Code, and certain of its domestic theatre
subsidiaries filed petitions to liquidate under Chapter 7 of the
United States Bankruptcy Code. A principle reason for the
Company's bankruptcy filings was to permit the Company to reject
real estate leases that were, or were expected to become,
burdensome due to cash losses at these locations. The Company's
international operations, which are operated through a joint
venture, did not file to reorganize and, therefore, are not
subject to the jurisdiction of the United States Bankruptcy
Court.

GC Companies reported a net loss for the fourth quarter of fiscal
2000 of $118.6 million, or $15.29 per diluted share, which
includes charges of approximately $70.0 million relating to the
restructuring and reorganization of the domestic theatre business
in this quarter, compared with a net loss of $4.6 million, or
$0.59 per diluted share, for the fourth quarter of fiscal 1999.
Revenues for the fourth quarter of fiscal 2000 were $72.2
million, compared with $92.5 million in the year-earlier quarter.
For fiscal year 2000, GC Companies reported a net loss of $135.6
million, or $17.49 per diluted share, compared with a net loss of
$2.3 million, or $0.30 per diluted share, for fiscal 1999.
Revenues for fiscal 2000 were $358.0 million compared with $386.2
million last year.

The Company's investment portfolio at October 31, 2000 included
publicly-held investments in GrandVision, S.A.; El Sitio, Inc.;
MotherNature.com and privately-held minority investments in
Fuelman (now known as FleetCor), VeloCom, Vanguard and American
Capital Access. During the quarter, the Company sold its
remaining investment in Global TeleSystems at an average share
price of $6.00 realizing proceeds of $18.4 million. The aggregate
carrying value of this investment portfolio at October 31, 2000
was approximately $73.5 million.

GC Companies' theatre subsidiary, General Cinema Theatres, Inc.,
reported a fourth quarter fiscal 2000 operating loss of $67.5
million, which includes restructuring and reorganization charges
as discussed above, versus an operating loss of $0.5 million in
the fourth quarter of fiscal 1999. General Cinema Theatres had an
operating loss of $73.9 million for fiscal 2000 compared with an
operating loss of $6.2 million for fiscal 1999.

As of October 31, 2000, General Cinema Theaters operated 685
screens at 78 locations in 20 states compared with a total of
1,052 screens at 138 locations in 23 states. During the year,
General Cinema Theaters opened four theatres with 50 screens and
closed 64 theatres with 417 screens. As of October 31, 2000, the
Company operated 143 screens at 15 locations in South America
compared to 127 screens at 13 locations in South America as of
October 31, 1999. The Company sold its interest in its Mexican
theatre joint venture during the year.

The Company has been notified by the New York Stock Exchange
("NYSE") that the Company is below the NYSE's continued listing
standards and that the Company's current listing with the NYSE is
subject to review by the NYSE in accordance with its continued
listing procedures. Accordingly, while an established public
trading market exists, with respect to the Company's Common
Stock, there can be no assurance that the Company's Common Stock
will remain listed on the NYSE or otherwise be subject of an
established trading market.


GENESIS HEALTH: Rejects Congregate Care Lease with Mountain Crest
-----------------------------------------------------------------
Genesis Health Ventures, Inc. & The Multicare Companies, Inc.
told the Court that, for the fiscal year ending September,
2000, Mountain Crest, a 52 unit congregate care facility for
elderly residents known located in Franklin, New Hampshire
recorded an annual unaudited net operating income of $185,941.
After payment of the $414,731 annual rent, the Facility recorded
a loss of $228,790. The projections for fiscal year 2001 indicate
a projected annualized loss of $196,211 after rent expense. The
Debtors have determined in the exercise of their business
judgment that the Lease should be rejected.

The Debtors explain that their estates will benefit more form the
immediate elimination of costs and risks associated with the
lease than to continue to operate the Facility, incurring
administrative costs, or to market the lease with the associated
costs and payment of cure amounts.

GHV, through its wholly-owned affiliate, McKerley Health Care
Centers, Inc., d/b/a Mountain Crest Inc. (MHCC), one of the
Debtors in the cases, is the tenant under the Lease Agreement
with Mountain Crest Associates, as landlord. Pursuant to the
Lease, MHCC leases 42 condominium units and the common areas
associated with those units in the 52 unit congregate care
facility. MHCC also owns 9 units in the Facility. The remaining
unit is owned by Inza Giles and is currently vacant. The Lease
expires on June 30, 2004, with two options to extend or renew the
Lease for five years each. The rent per annum under the Lease is
calculated in accordance with a formula set forth in the Lease,
and currently averages $414,590 per year.

As part of the Lease, Forest D. McKerley, James P. McKerley, and
Matthew McKerley jointly and severally unconditionally agreed to
guarantee all obligations of MHCC under the Lease, including
without limitation all obligations of both payment and
performance.

In connection with the Facility, MHCC is a party to certain
residential care facility agreements (the Residency Agreements)
with residents of the Facility, pursuant to which the Facility
agrees to provide the residents with room, meals, and other
services in consideration for the residents' payment of a daily
rate for such services.

The Debtors note that although they intend to reject the lease,
because the Facility provides essential services to frail,
elderly residents and operates under various state and federal
regulations, they also seek authorization, in their sole
discretion and without creating any obligation on their part, to
assist the Landlord or its designee, to the extent necessary to
protect the health and welfare of the Facility's residents, with
either (i) the transition of the operation of the Facility to the
Landlord or its designee, or (ii) the wind down of operations of
the Facility in coordination with proper federal and state of New
Hampshire authorities and in accordance with applicable law.

The Debtors told the Judge that once they determine whether to
(i) make the transition of the Facility's operations to the
Landlord or its designee, or (ii) wind down the Facility's
operations, the Debtors shall notify the proper federal and state
of New Hampshire authorities in accordance with applicable law.
Moreover, in the event the Facility's operations are wound down,
the Facility shall give at least 30 days notice to the residents
of the Facility of the termination of the Residency Agreements in
accordance with the terms of such agreements.

By this Motion, the Debtors seek to reject the Lease pursuant to
section 365(a) of the Bankruptcy Code. (Genesis/Multicare
Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


GO.COM: Walt Disney Pulling the Plug on this Internet Portal
------------------------------------------------------------
Walt Disney said on Monday that it would close down its money-
losing Internet operation, Go.com, a move that will result in
about 400 layoffs and fold shares of its Internet tracking stock
back into Disney shares, according to CNN Financial News. Disney
said it would convert all shares of Go.com, now officially known
as the Walt Disney Internet Group, to Disney common stock,
effective March 20, and focus on its content sites and their
commercial aspects.

"The Internet environment has continued to shift and change, and
therefore our strategies must also change," said Steve Bornstein,
Walt Disney Internet Group chairman. Until a few weeks ago,
Michael Eisner, Disney chairman and CEO had said he intended to
stand behind the Internet investments even while others were
shrinking their operations. The Burbank, Calif.-based company
said a streamlined version of GO.com will operate for a period of
time to allow for the transition of its users and will also
operate the Infoseek search engine during this period. (ABI
World, January 30, 2001)


HEDSTROM HOLDINGS: Wants Until May 8 to Make Decisions on Leases
----------------------------------------------------------------
Hedstrom Holdings, Inc. et al. sought a court order further
extending the period within which the debtors may assume or
reject unexpired leases of nonresidential real property with the
U.S. Bankruptcy Court, Wilmington, Delaware.

The debtors requested entry of an order extending for an
additional 90 days to and including May 8, 2001 the period within
which they may assume or reject the unexpired leases, subject to
the debtors' right to seek other and further extensions.

The debtors have begun the analyses and negotiations toward a
plan of reorganization. The debtors claim that the extension will
permit them the optimum flexibility in preserving business
alternatives available to the debtors and their constituencies in
respect of their leases without foreclosing alternatives before
the opportunity for full and complete analysis in the context of
a plan.


ICG COMMUNICATIONS: Rejecting 12 Leases to Save $276,000 Monthly
----------------------------------------------------------------
ICG Communications, Inc. et al. sought to reject certain
unexpired leases of nonresidential real property. A hearing to
consider the application was scheduled on January 31, 2001 at
2:30 PM.

By the motion the debtors sought to reject a total of twelve
leases. The sites are warehouse and office sites that the debtors
have determined are not necessary to their operations. The total
rent for the twelve spaces aggregates approximately $276,000 per
month.

The debtors are represented by David S. Kurtz, Esq., and Timothy
R. Pohl, Esq., of Skadden, Arps, Slate, Meagher & Flom, Chicago,
Illinois and Gregg M. Galardi, Esq., of the same firm, Wilmington
office.  The sites are located in Colorado, Texas, California,
Maryland, and Nevada.


INTEGRATED HEALTH: Court Approves CEO Dr. Elkins Termination Pact
-----------------------------------------------------------------
The Court approved Integrated Health Services, Inc.'s Application
for Termination Agreement with Dr. Robert N. Elkins.

Pursuant to the Court's order, all Entities are permanently
barred, enjoined and restrained from commencing, prosecuting or
asserting any Released Claim against any of the Elkins Released
Parties in any court, arbitration, administrative agency or
forum, or in any other manner, and that all Released Claims
against any of the Elkins Released Parties are extinguished,
discharged, satisfied and unenforceable. Vice versa, the Court's
order also bars, enjoins and restrains any such actions by the
Elkins Released Parties against the Debtors.

It is also specified in the Court's order that, effective on the
occurrence of the Closing, to the extent any Debtor sues an
Entity and in connection with such suit, such Entity asserts a
Contribution Claim against any Elkins Released Party that is not
precluded by the Court's order, then such Debtor shall
automatically credit against any judgment it may obtain against
such Entity by an amount determined by trial or a Final Order to
be the amount due to the Entity from an Elkins Released Party in
excess of any amounts payable by any Insurer under any of the D&O
Policies.

The Court makes it clear that nothing in the order shall be
construed as a release of the Debtors' claims against any of the
Elkins Related Parties to the extent of amounts actually paid by
any Insurer under any of the D&O Policies.

It is also specified in the Court's order that Released Claims
shall not include Claims, if any, held by Entities (other than
the Debtors or their estates, to the extent provided in the
Elkins Agreement) against the Elkins Released Pastes.

The Court's order also makes it clear that Dr. Robert N. Elkins,
in providing certain services to the Debtors consistent with the
Elkins Agreement, is not and shall not act or be deemed to be a
"professional person" within the scope and meaning of section 327
of the Bankruptcy Code. (Integrated Health Bankruptcy News, Issue
No. 13; Bankruptcy Creditors' Service, Inc., 609/392-0900)


LATINO.COM: Lays Off Most Of Staff
----------------------------------
Struggling web site Latino.com has fired most of its staff last
week and now only the two founders, CEO Lavonne Luquis and Max
Ramirez, remain, according to LocalBusiness.com. The latest
layoffs, announced last week, come after a year of setbacks for
the San Francisco-based web portal and similar downsizing at
other minority-oriented web portals. Latino.com workers had hoped
their business would grow as competitors dropped out.

"When we saw what was happening to our most immediate competitor
(Quepasa.com), half of us were saying, 'Great, we don't have a
competitor anymore, and the other half were saying, 'What does
that mean for us?'" said Nadya Tan, a design producer at
Latino.com who was among those fired. Latino.com provides news,
entertainment and other online content about Hispanic-focused
products. (ABI World, January 30, 2001)


LERNOUT & HAUSPIE: Wins Two-Month Extension from Belgian Court
--------------------------------------------------------------
Ailing speech recognition software maker Lernout & Hauspie Speech
Products (L&H) won a two-month extension from a Belgian
bankruptcy court in its home town of Ieper, Belgium to better
prepare for a special shareholders meeting, according to
TheDeal.com. The shareholders meeting was originally scheduled
for March 1, by Judge Michel Handschoewerker as a contingency of
L&H's bankruptcy protection in Belgium. The special meeting,
which was ordered to clarify its financial accounts and appoint a
new board of directors, will now take place May 1.
Handschoewerker turned down a previous request for an extension
by L&H on technical grounds. L&H lawyers filed another request
Monday morning and the judge ruled in favor of it later in the
day.

Last week, the company signed an agreement with Ceberus Capital
Management and Gabriel Capital Group, two New York financial
firms, for $60 million of debtor-in-possession (DIP) financing so
that the company could continue operations. Approval of the
financing by the U.S. bankruptcy court is expected on Feb. 7.
(ABI World, January 30, 2001)


LTV CORPORATION: Cash Collateral Fight Brews
--------------------------------------------
Judge Bodoh considered The LTV Corporation's Motion for Interim
Authority to Use Cash Collateral and granted the same on an
interim and emergency basis, providing for a substituted
postpetition lien in favor of Chase as agent in all of the
Debtors' accounts receivable and inventory, but reserved a period
during which affected creditors and parties interested in these
Chapter 11 estates might present objections to the Motion or its
terms, with a final hearing on the Motion at a later date.

Under the Interim Order, the Debtors are permitted to use cash
collateral of LTV Steel Products LLC, LTV Sales Finance Company,
and The Chase Manhattan Bank, in its capacities as Inventory
Agent and Receivables Agent for the syndicates of financial
institutions who were prepetition lenders. The Court found that
due and sufficient notice under the circumstances of the Motion
was given by the Debtors to the twenty largest unsecured
creditors of the Debtors, the Agent and the Lenders Steel
Products and Steel Finance, and the United States Trustee.

The Lenders asserted to Judge Bodoh that, under a Contribution
and Sale Agreement regarding inventory among LTV Steel Company,
Inc., Georgia Tubing Corporation, and Steel Products, the Debtor
Inventory Sellers sold, assigned and transferred to Steel
Products all of their respective rights in and to the inventory
each acquired. The Lenders further assert that Steel Products
financed its purchases of the inventory under a Trust Agreement
between Steel Products and Chase, as Collateral Agent, and that a
Note Purchase and Letter of Credit Agreement among LTV Steel (for
itself and as agent for Georgia Tubing), the lenders, Chase
Securities, Inc., as Placement Agent, and Case, as Administrative
and Collateral Agent, Steel Products assigned to the Inventory
Agent on behalf of the Inventory Lenders all of its right, title
and interest in and to the Inventory Sale Agreement and granted
to the Inventory Agent on behalf of the Inventory Lenders a
security interest in all of the inventory purchase by Steel
Products from the Inventory Sellers and the proceeds thereof.

The Debtor Inventory Sellers replied that the transactions
contemplated by the inventory sale agreement constitute secured
financings under which the Debtor Inventory Sellers were
"borrowers" and Steel Products was a "lender", that such
transactions were not "true sales", that the interest of Steel
Products in the inventory purchased form the Debtor Inventory
Sellers is that of a secured party, and that, accordingly, the
proceeds of such inventory constitute cash collateral.

The Inventory Agent and the Inventory Lenders responded that the
transactions constituted "true sales" of the inventory and the
Debtor Inventory Sellers have no further interest in the
inventory or the proceeds.

Under a Receivables Purchase and Sale Agreement among LTV Steel,
Georgia Tubing, certain subsidiaries of Copperweld Corporation,
certain subsidiaries of Welded Tube Holdings, Inc., Steel
Products, and Sales Finance, the Debtor Receivables Seller and
Steel Products sold, assigned and transferred to Sales Finance
all of their right, title and interest in and to the accounts
receivables. The same arrangements and the same arguments about
"true sales" versus loan collateralization is made in connection
with the Receivables.

On an interim basis, Judge Bodoh approved the Debtors' use of
cash collateral constituting the cash proceeds of inventory and
receivables to provide working capital for the Debtors.

If Judge Bodoh ultimately determines that the financings are true
sales, the Agents and the Lenders collectively are granted an
allowed claim, against the Debtors having priority over any and
all administrative expenses, subject only to (1) in the event of
the occurrence of a termination, the payment of accrued and
unpaid and future fees and disbursements theretofore and
thereafter incurred by the Debtors' professionals and
professionals for any statutory committee appointed in the
Debtors' Chapter 11 cases, and allowed by an order of the court
in an aggregate amount not in excess of $2,000,000, and (2) the
payment of fees to the United States Trustee and the Clerk of the
Court. So long as no terminate occurs, the Debtors are permitted
to pay administrative expenses as the same may be due, and such
payments shall not be applied against the Carve-Out described
above.

In the event the transactions are true sales, Judge Bodoh granted
the lenders perfected first-priority senior security interests in
and liens upon (1) all unencumbered pre- and postpetition
accounts receivable, and proceeds thereof of the Debtor
Receivable Sellers, and (2) all postpetition inventory and
proceeds thereof of the Debtor Inventory Sellers, and all right,
title and interest of the Debtors in Steel Products and Sales
Finance and in any trust formed by either of them, and (3)
perfected junior priority security interests in and liens upon
the collateral, in each case subject only to the Carve-Out.

If Judge Bodoh ultimately determines that the financings are not
true sales, as adequate protection for any diminution in the
value of the Lenders' interests in prepetition collateral
resulting from use by the Debtors of cash collateral and any
other prepetition collateral, and the imposition of the automatic
stay, the Agent on behalf of the Lenders (1( are granted,
effective upon the date of the Interim Order, a replacement
security interest and lien upon all of the collateral, subject to
the carve-out, (2) are granted a superpriority claim, and (3)
shall receive for the period ending upon any terminate date
current cash payments from the Debtors in an amount equivalent to
(i) the reasonable fees and disbursements of counsel, financial
advisors, and any other third-party consultants incurred by the
Agents through the termination date, and (ii) on a weekly basis,
interest on the indebtedness outstanding under the prepetition
financings at rates per annum equal to non-default rates
applicable thereunder. Notwithstanding anything to the contrary
in the Order, the payments described in this paragraph shall be
made from the entry of the Interim Order through any terminate
date and shall be equally applicable if it is finally determined
that the prepetition financings are true sales.

Judge Bodoh also ordered certain daily reporting concerning the
collateral affected by the Interim Order.

Judge Bodoh expressly held that nothing in his Interim Order
shall be deemed an admission or acknowledgement by any party or a
finding of fact or conclusion of law by the Court as to the
nature of the prepetition financings.

As between the Inventory Agent on behalf of the Inventory Lenders
and the Receivables Agent on behalf of the Receivables Lenders,
the collateral shall be deemed to have the same priority and
shall be allocated between such parties as their respective
interests may appear.

             Objections to Entry of a Final Order

                  Abbey National's Objection

Abbey National Treasury Services PLC is the non-retail banking
subsidiary of Abbey national plc, a bank authorized under the
laws of the United kingdom. Abbey told Judge Bodoh it follows a
conservative investment strategy. At present, 60% of its
portfolio exposures are rated AA or better, and prior to the
filing, the debt held by Abbey at issue was rated AAA by Standard
& Poors. Abbey has brought an Emergency Motion seeking
modification of the Interim Order, has objected to this Order,
and seeks to have it modified nunc pro tunc to the entry date to
restore certain of Abbey's rights to certain collateral
consisting of accounts receivables and proceeds therefrom
owned by non-debtor LTV Sales Finance Company, a wholly owned
subsidiary of LTV, and to insure that the assets of Sales
Finance, including those receivables, are not treated in any
respect as though they are part of the bankruptcy estate of LTV
Steel Company and the other debtors.

At the Petition Date, Abbey had outstanding loans to Sales
Finance of approximately $225 million, and had "not loaned one
penny to any of the Debtors". Abbey made these loans to Sales
Finance as part of an arrangement whereby Abbey committed to loan
up to $270 million to Sales Finance under a revolving credit
agreement which provided for interest at what Abbey describes as
the modest rate of 60 basis points above LIBOR. Abbey says Sales
Finance was able to obtain the benefit of such a large amount of
low-cost funds, despite its previous filing in bankruptcy,
because the loans to Sales Finance were secured by the
receivables sold to Sales Finance by the Debtors. In connection
with the loan commitment made by Abbey to Sales Finance, LTV's
counsel, Davis Polk & Wardwell, opined on four separate occasions
that the sales of receivables were true sales and that the assets
of Sales Finance would not be part of the Debtors' estates in the
event of a bankruptcy.

Sales Finance used loans from Abbey to purchase all outstanding
receivables on a daily basis from certain affiliates of LTV,
including LTV Steel Products, LLC. This purchase obligation was
automatically terminated in the event of a bankruptcy filing.
Sales Finance pays a cash purchase price of 100% of the
outstanding balance on the receivables, minus a discount based on
the historical collection and loss rates for accounts receivable
generally. LTV agreed to service the receivables and collect all
amounts due in exchange for a servicing fee. Sales Finance held
the receivables as its own assets, used the receivables to secure
its loans from Abbey, and used the cash collected on those
receivables to pay Abbey interest and principal on those
loans.

As of the Petition Date, The Chase Manhattan Bank served as agent
for Abbey as a lender to Sales Finance. Unbeknownst to Abbey,
Chase had been negotiating with LTV for several weeks to loan to
LTV additional funds which it sought in order to continue
operating. Chase eventually concluded that it was unwilling to
provide the additional financing that LTV sought. Thereafter,
Chase learned that LTV intended to file a voluntary Chapter 11
petition, and LTV and Chase began to negotiate an interim order
that they would jointly present to the Bankruptcy court. The
order that they negotiated provided LTV with the additional
financing that it sought by permitting LTV to take for its own
use cash proceeds from the receivables owned by non-debtor Sales
Finance which served as Abbey's collateral. By this arrangement,
Abbey tells Judge Bodoh it was converted, without its consent,
from a secured lender to a non-debtor corporation which held
assets sufficient to collateralize the loan in full, to a DIP
financer.

Abbey told Judge Bodoh it first learned of LTV's intention to
file this proceeding from a news story released on December 29,
the very day that LTV filed. Abbey "tracked down" a Chase
businessperson and Chase's outside counsel as they were on their
way to the Court on December 29, where it was planned that LTV
would file its petition and LTV and Chase would jointly present
to the Court the interim order they had negotiated. During the
ensuing discussion, Chase asked Abbey if it would consent to
having the assets of Sales Finance used to provide cash to LTV,
with Abbey taking a new security position in both receivables and
inventory of LTV on a pari passu basis with certain inventory
lenders. Abbey responded unequivocally that it would not consent
to the proposal Chase had made.

Abbey claims Chase then proceeded to a hearing before this Court
where, contrary to Abbey's specific objections, Chase, while
acting as Abbey's agent, presented the proposed interim order to
the Court jointly with LTV and stated that it had no objection to
its entry, and that it believed the interim order was "fair". The
Court then entered the interim order, which provided for the very
arrangement to which Abbey had objected - allowing the Debtors to
use Abbey's collateral in exchange for, among other things, a
lien on the post-petition inventory and receivables shared pari
passu with the Inventory Lenders.

Abbey asked that Judge Bodoh restore the Revolving Credit
Facility to its status and position as they existing prepetition.
Abbey does not seek to declare an immediate termination of the
Facility, and is willing to have the Facility continue to operate
as it did prepetition for a limited amount of time so long as a
borrowing base is in place which provides adequate margin to
ensure that Abbey does not incur a loss on its loans to Sales
Finance.

Abbey states that the Interim Order is unfair to the Receivables
Lenders in that:

      (a) It swept the Receivables Lenders' collateral, which was
held by non-debtor Sales Finance, into the Debtors' estates;

      (b) It provides that proceeds of the Receivables Lenders'
prepetition collateral will be transferred to the Debtors with no
replenishment by new, postpetition receivables;

      (c) The Receivables Lenders previously had a first priority
security interest in highly liquid, short-term receivables, while
the Inventory Lenders had a first-priority interest in illiquid
inventory, including work in progress, which would be more
difficult to realize value on. The Inventory Lenders now share in
the qualitatively more valuable receivables, and the Receivables
Lenders have been given an interest in the lower quality
inventory;

      (d) It provides for the continuation of a borrowing base for
the Inventory Lenders, but eliminates the borrowing base for the
Receivable Lenders, thereby causing the Receivables Lenders to
provide the Debtors' initial postpetition financing requirements;

      (e) It can be read to mean, though it would be grossly
unfair, that the postpetition proceeds of prepetition inventory
remain the collateral of the Inventory Lenders only;

      (f) There was no meaningful notice to Abbey of the Interim
Order prior to its entry, and consequently no opportunity to be
heard; and

      (g) Chase, while acting as Abbey's agent, presented the
Interim Order to the court jointly with LTV and, in effect,
supported its entry, thereby acting without Abbey's consent and
against its interests.

To the extent that these "inequities" are not rectified through
entry of the modified interim order proposed by Abbey, to which
Abbey would voluntarily consent, the Interim Order in its current
form was entered without due process to Abbey. In addition, Abbey
states that the Interim Order as entered by the Court is
"woefully inadequate" and does not form the basis for either a
finding by this Court that the receivables purchased by Sales
Finance, a non-debtor, are property of any bankruptcy estate of
the Debtors, nor that "adequate protection" to the Receivables
lenders has been granted, even if there was a basis for such a
"property of the estate" finding, which there is not. Abbey
asserts that the Debtors have presented no evidence to the Court
or to the Receivables Lenders about the expected run-off of the
receivables at Sales Finance, nor about the value of the
replacement liens and claims granted under the Interim Order.
Abbey has received reports from Sales Finance that as of January
5, 200[1], $37.5 million of Abbey's collateral at Sales Finance
has been consumed under the Interim Order just in the few days
since the Interim Order was entered. At this consumption rate,
Abbey's equity cushion is rapidly vanishing and its collateral at
Sales Finance will soon disappear. Finally, to the extent that
Abbey's collateral has been properly sold to Sales Finance, such
that those receivables are Sales Finance's property, and pledged
to the Receivables Lenders, they are not property of any Debtor's
estate, and given that there can be no dispute that Abbey did not
consent to the Interim Order in its current form, there is no
basis or justification for forcing Abbey to, in effect, by an
involuntary DIP lender to the Debtors through the forced release
under the Interim Order of the receivables collateral from non-
debtor Sales Finance to the Debtors.

Abbey told Judge Bodoh that the Interim Order should be modified
to provide, among other things, that:

      (a) The Debtors shall transfer to Sales Finance all
receivables created on or after December 29, 2000, and not
previously sold to Sales Finance, and that would have been sold
to Sales Finance were it not for the occurrence of the bankruptcy
filings;

      (b) Steel Products would continue to purchase inventory from
the special vehicle Inventory Vendors and Sales Finance would
continue to purchase receivables from the special vehicle
Receivables Sellers, each on the same basis and on the same terms
as existed prior to the Petition Date;

      (c) The respective Collection Accounts would be administered
by the Collateral Agent in the same manner as was administered
prior to the Petition Date. Therefore, notwithstanding the
occurrence of any termination date, collection on account of the
receivables would not be required to be applied to principal
payments or amortization payments (other than any payments
required in connection with the maintenance by the borrowers of
their respective borrowing bases);

      (d) Steel Products and the Collateral Agent under the
Inventory Facility would continue to automatically release all
liens against the Receivables purchased by Sales Finance from
Steel Products;

      (e) All minimum borrowing base and collateral value
requirements set forth in the Receivables Facility and the
Inventory Facility will continue in full force and effect;

      (f) In all other respects, the Receivables Facility and the
Inventory Facility will continue to operate as required after the
occurrence of a liquidation event, including without limitation
the reimbursement of all expenses of each Receivables Lender and
Inventory Lender.

In addition, Abbey tells Judge Bodoh that the Interim Order
should be modified to provide, among other things, that:

      (a) In the event it is finally determined that the sales of
receivables and inventory constitute true sales, (1) the
receivables purchased by Sales Finance shall be deemed to be the
sole property of Sales Finance and the inventory purchased by
Steel Products shall be deemed to be the sole property of Steel
Products, (2) the Receivables Lenders and the Collateral Agent
for the Receivables Lenders should be granted an allowed
superpriority claim, and (3) the Inventory Lenders should be
granted an allowed superpriority claim.

      (b) In the event it is finally determined that the sales are
not true sales, as adequate protection for the diminution in
value of collateral securing the loans of the Receivables Lenders
and the Inventory Lenders, a superpriority claim shall be
granted, and (1) the Collateral Agent on behalf of the
Receivables Lenders shall be granted a replacement security
interest and lien in all receivables and proceeds thereof and any
other assets necessary to provide adequate protection to the
Receivables Lenders, and (2) the Collateral Agent on behalf of
the Inventory Lenders shall be granted a replacement security
interest and lien in all inventory and proceeds thereof that do
not constitute accounts receivable.

Abbey tells Judge Bodoh that failure to grant the requested
relief could cause severe disruptions in the United States
securitization market and could result in the loss of financing
for many industries which rely heavily on financing from similar
transactions. The structure of the Receivables Credit Facility,
which is known as an asset-backed security, or ABS, is very
common in the bank loan and capital markets. A key feature of the
ABS is that the asset serving as collateral for the loan is
remote or segregated from the company originating the asset in
the event of a bankruptcy. Abbey asserts that this case will be
closely watched by the ABS market, and if the Interim Order is
allowed to stand, a substantial portion of the ABS market in
the United States could be severely disrupted. A decision to
ignore the true sale aspect of a securitization will rightly
concern ratings agencies and investors as to the soundness of
such investments. Without the ability to rely on the bankruptcy-
remote structure of a securitization, the result could well be a
major loss of investment in the United States, particularly in
those industries - like the steel industry and other basic
industries such as heavy industry manufacturers and energy
producers - that rely on low-cost financing from these types of
secured financings.

                   Precision Strip Objection

Precision Strip, Inc., which stores and processes steel coil on
behalf of the Debtors at its facilities in Ohio and Kentucky.
Precision Strip also delivers the finished product to a customer
of LTV or some other end user. Precision Strip then bills the
Debtors for the processing work, storage, and shipping charges.
As of the Petition Date, the Debtors owe Precision Strip
approximately $600,000, for which Precision Strip asserts various
liens, including an artisan's lien, a warehouseman's lien, and a
bailee's lien.

Precision Strip, through Daniel R. Swetnam of the Columbus Ohio
firm of Schottenstein, Zox & Dunn Co., L.P.A., has filed a
limited objection to the Motion. Precision Strip asserts that it
has a Permitted Lien within the meaning of the Motion for which
payment is permitted, and presents a letter from Chase Manhattan
Bank expressly acknowledging the lien rights of Precision Strip
for warehousing and processing charges. However, the terms of the
Motion and the Interim Order appear to grant security interests
in favor of Chase on all pre-petition and post- petition
inventory, including that held or delivered by Precision Strip.
Precision Strip objects to the Motion and Interim Order to the
extent that they impair, in any way, the existence and priority
of Precision Strip's lien rights. Through counsel, Precision
Strip states that the Order's wording, and any final Order,
should be revised to provide that common law, statutory or other
lien rights in favor of Precision Strip are senior in priority to
any security interest granted to Chase. Precision Strip told
Judge Bodoh that as the Motion and Interim Order are now drafted,
Chase may contend that the Interim Order displaces the lien
rights of Precision Strip.

                      Trico Steel Objection

In addition to the above, Trico Steel Company, L.L.C.,
represented by H. Jeffrey Schwartz and Michael D. Zaverton of the
Cleveland Ohio firm of Benesch, Friedlander, Coplan & Aronoff
L.L.P., and James L. Patton, Jr., and Micahel R. Nestor, of the
Wilmington Delaware firm of Young, Conaway, Stargatt & Taylor,
L.L.P., has objected to the Motion and Interim Order.

LTV-Trico, Inc., SMI-Trico, Inc., and British Steel Trico
Holdings, Inc., entered into a Limited Liability Company
Agreement, as amended and restated, culminating the joint venture
efforts of LTV, Sumitomo Metal USA Corporation, and British Steel
plc, to enter the mini-mill industry for flat rolled steel. Under
this agreement, LTV, through its wholly-owned subsidiary LTV-
Trico, received a 50% equity interest in Trico LLC, while
Sumitomo and British Steel each retained 25% interests through
their respective wholly owned subsidiary members, SMI-Trico and
British Steel Trico. Concurrently, the parties entered into a
Supply and Marketing Agreement, and a Transaction Agreement
Relating to the Formation of Trico Steel Company LLC. Under these
agreements, Trico INC was formed for the sole and exclusive
purpose of providing marketing and resale services to Trico LLC.
Trico LLC pays all costs and expenses of Trico INC, without
limitation.

Trico LLC objects to the proposed cash collateral financing and
the imposition of superpriority, secured and/or subordinated
liens on the estate of Trico INC because:

      (a) Trico INC is not a party to the prepetition financing
arrangements with the Debtors' prepetition lenders. In addition,
a preliminary search of the public records in Alabama reflect
that the Lenders have not filed or perfected any liens with
respect to Trico INC.

      (b) Trico LLC funds all of the operating expenses of Trico
INC, without exception. Since Trico INC does not and will not use
any of the Lenders' cash collateral postpetition, and since its
estate will not benefit at all from the use of such funds, there
is no justification for the imposition of any of the cash
collateral liens on the Trico INC estate. (LTV Bankruptcy News,
Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-00900)


MICROPORTAL.COM: Files Chapter 7 Petition in Manhattan
------------------------------------------------------
Microportal.com filed a Chapter 7 bankruptcy petition this week
in the U.S. Bankruptcy Court Southern District of New York after
WorldSpy, one of its major customers, went out of business,
AtNewYork reports.  The company, based in the White Plains, sold
ISP-related technology to WorldSpy.

Dubbed as the engine behind free ISPs, Microportal reportedly
accumulated losses of $8.1 million in 2000.  Court documents
reveal that MicroPortal has until February 5 to provide details
about its creditors, AtNewYork relates.


OFFICELAND INC.: Files Assignment in Bankruptcy in Canada
---------------------------------------------------------
Officeland Inc. (OTCBB;OFLD.BB) announced that it had been unable
to make a proposal acceptable to its creditors by Monday, January
29, 2001 pursuant to the Notice of Intention to Make a Proposal
filed on December 28, 2000. Consequently the Company filed an
Assignment in Bankruptcy pursuant to the Bankruptcy and
Insolvency Act in Canada. As a result, the duties and obligations
of the Board of Directors shall be taken over by the Trustee in
Bankruptcy.

      Contact: Horwath Orenstein Inc.
               Ms. Janet Humes, 416-285-6767
               Trustee in Bankruptcy


OWENS CORNING: Seeks To Buy Miles Fiberglass & Composites Assets
----------------------------------------------------------------
Owens Corning brought a Motion before the Bankruptcy Court asking
Judge Walrath to approve the purchase by Exterior Systems, Inc.,
of certain assets from Miles Fiberglass & Composites, Inc.,
related to Fabwel's business of producing sidewall panels for the
recreational vehicle industry, and by which Fabwel, Miles and
certain Miles' executives will enter into noncompete agreements
with Fabwel, as well as consulting agreements with Fabwel.

Fabwel produces and distributes sidewall panels for the RV
industry, primarily in the Midwestern United States. As a number
of Fabwel's customers have expanded their operations into the
northwestern United States, they have requested that Fabwel meet
their increased production needs by supplying sidewall panels in
that area. To meet these needs, Fabwel seeks to acquire certain
assets of Miles, which is in the business of producing and
distributing various molded fiberglass panels in the RV industry,
primarily in the northwestern United States. In particular,
Fabwel proposes to acquire Miles's customer lists, files and
agreements for past and current customers to the extent that such
lists, files and agreements pertain to the sale of sidewall
panels. Fabwel will acquire no other assets of Miles and will
assume no liabilities of Miles.

As part of this transaction, Miles and three of its executives,
Lowell Miles, Joseph A. Luchak, and Craig Hinkle, will enter into
noncompete agreements with Fabwel for a period of five years in
the sidewall panel business in the states of Oregon, Washington,
Idaho, Utah, Nevada, California, Arizona and Montana. Similarly,
Fabwel will enter into an agreement not to compete with Miles
during the five-year period within the states of Oregon,
Washington and Idaho in the manufacture, marketing, sale and
distribution of fiberglass motor coach roofs, skirts, front and
rear caps, floor and ceiling panels and shower stalls,
collectively called the Motor Parts, but specifically excluding
sidewall panels and any and all other parts, products and
components other than the Motor Parts.

Additionally, certain of the ancillary agreements provide that
Messrs. Miles, Luchak and Hinkle will enter into three-year
consulting agreements with Fabwel, under which these men will
perform certain tasks as necessary or appropriate to assist
Fabwel in transitioning customer relationships from Miles to
Fabwel.

Finally, the asset purchase agreement provides that Owens Corning
will guarantee payment and performance of the obligations of
Fabwel under the purchase agreement, the noncompetition
agreements, and the consulting agreements. As additional
consideration, Fabwel will pay to Miles and its principal
executives an aggregate of $2 million over a period of three
years. The Purchase Price will be allocated as follows:

      (1) $350,000 for the transfer of the acquired assets;

      (2) $1,050,000 payable under the terms of the Miles
          noncompete agreement; and

      (3) $600,000 payable under the terms of the consulting
          agreements.

Beyond enabling Fabwel to support its existing customers that are
expanding into the northwestern United States, and thereby
creating additional revenue from Fabwel's existing customer base,
the proposed transaction will increase Fabwel's revenues by
adding to its customer base. Fabwel estimates that immediately
following the projected transaction, it will gain increased sales
revenues of approximately $5 million from Miles' two largest
sidewall panel customers. This proposed transaction will also
increase Fabwel's production volume, improving economies of scale
for Fabwel which currently operates with excess production
capacity. (Owens Corning Bankruptcy News, Issue No. 8; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


PACIFIC AEROSPACE: Delays Interest Payment
------------------------------------------
Pacific Aerospace & Electronics, Inc. (Nasdaq: PCTH), a
diversified manufacturing company specializing in metal and
ceramic components and assemblies, announced that it will not
make a scheduled $3.6 million interest payment on its outstanding
senior subordinated notes on February 1, 2001. Under the terms of
the indenture governing the notes, the Company has a 30-day grace
period in which to make the interest payment before an event of
default occurs.

"We are working aggressively to obtain a replacement credit
facility or other financing so that we will have sufficient cash
to make the February 1 payment before the 30-day grace period
expires," said Don Wright, President and CEO of the Company.
"Although we would greatly prefer being in a position to make the
interest payment on time, we hope that the actions being taken
now will put us in a position to make the payment before an event
of default occurs."

If the Company determines that it will not be able to make the
interest payment by the end of the 30-day grace period, the
Company may be forced to seek protection from creditors under the
bankruptcy laws. In that event, the Company would use its best
efforts to negotiate with its creditors and to reorganize the
Company quickly, efficiently, and in a manner aimed at obtaining
a positive outcome and preventing disruption for the Company's
customers, suppliers, and employees.

Pacific Aerospace & Electronics Inc. is an international
engineering and manufacturing company specializing in technically
demanding component designs and assemblies for global leaders in
the aerospace, defense, electronics, medical, telecommunications,
energy and transportation industries. The Company utilizes
specialized manufacturing techniques, advanced materials science,
process engineering and proprietary technologies and processes to
its competitive advantage. Pacific Aerospace & Electronics has
approximately 1,000 employees worldwide and is organized into
three operational groups -- U.S. Aerospace, U.S. Electronics and
European Aerospace. More information may be obtained by
contacting the company directly or by visiting its Web site at
www.pcth.com.


PAUL HARRIS: Proposes $2 Million KERP to Keep Officers on Board
---------------------------------------------------------------
Paul Harris Stores Inc., the bankrupt Indianapolis, Indiana,
apparel retailer, has proposed a $2 million Key Employee
Retention Program aimed at keeping top management on board as it
continues its restructuring efforts.  Some top executives receive
bonuses of up to 150% of their annual base salary as an incentive
to stay with the company.  Paul Harris, which listed assets and
liabilities of $116 million and $60 million respectively in its
October Chapter 11 filing, has already closed down several of its
stores as part of its efforts to consolidate. (New Generation
Research, January 30, 2001)


PRANDIUM, INC.: Hires Crossroads as New Financial Advisor
---------------------------------------------------------
Prandium, Inc. (OTC Bulletin Board: PDIM) announced that
Crossroads, LLC of Newport Beach, California, has been engaged as
a financial advisor, primarily to assist in strategic discussions
with the company's note holders.

Prandium also reported that, in conjunction with its Crossroads
advisors, it has elected to delay the semi-annual interest
payments due (i) January 31st on its subsidiary's 15% Senior
Discount Notes maturing January 24, 2002 and 14% Senior Secured
Discount Notes maturing January 24, 2002 and (ii) February 1st on
Prandium's 9.75% Senior Notes maturing February 1, 2002 and
10.875% Senior Subordinated Discount Notes maturing February 1,
2004.

Prandium anticipates taking full advantage of the grace periods
allowed under the terms of the applicable indentures and note
agreements to allow Crossroads to continue to carry on
discussions with the appropriate note holders to determine an
acceptable capital restructuring for Prandium and its
subsidiaries. There are no assurances that Prandium will be able
to successfully resolve its capital structure. Under the terms of
the note agreements, the grace period for the subsidiary's notes
will expire on February 15, 2001 and under the terms of the
indentures, the grace period for the Prandium notes will expire
on March 3, 2001 after which Prandium's nonpayment of interest
would become an "Event of Default" under the respective
indentures and note agreements entitling the holders to certain
rights.

Prandium Chairman, CEO and majority shareholder Kevin S. Relyea
commented, "We want to take this time to work out a plan that
will satisfy all the parties concerned and move on. We believe
that Crossroads will be instrumental in resolving the go-forward
capital structure. With a cash balance in excess of $50 million
at the end of fiscal 2000, we expect to continue meeting our
other financial obligations."

Crossroads, LLC is a national consulting firm with a demonstrated
record of achievement in a variety of industries including
extensive restaurant segment experience. Crossroads is an
industry recognized provider of financial advisory services and
is further dedicated to utilizing its operational knowledge in
maximizing value to all constituencies during the restructuring
process.

Prandium(TM) operates a portfolio of full-service and fast-casual
restaurants including Koo Koo Roo(R), Hamburger Hamlet(R), and
Chi-Chi's(R) in the United States and also licenses its concepts
outside the United States. Prandium, Inc. is headquartered in
Irvine, California.


RBX CORPORATION: Creditors Object to Kirkland & Ellis' Employment
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors of RBX Corporation,
et al. objects to the application of the debtors to employ
Kirkland & Ellis as their counsel.  The Committee charges that
the firm represents an interest adverse to the bankruptcy estates
and is not "disinterested" as a result of the firm's prior
representation of and extensive connections with American
Industrial Partners and its affiliates.

The Committee explains that American Industrial Partners and its
insiders have extensive economic and other interests in the
debtors.  Among other things, AIP entities are the majority
shareholders of the debtors; they assert a questionable $3
million unsecured claim against the debtors, making it the
largest alleged non-noteholder unsecured creditor.  AIP is a
party to an executory "management services agreement" with the
debtors; and AIP controls two or more seats on the debtors' four-
person board of directors.

Kirkland & Ellis represented AIP in connection with AIP's 1995
leveraged acquisition of the debtors and in connection with all
related acquisition transactions; prior to the Petition Date, the
firm provided restructuring and bankruptcy counseling to both the
debtors and AIP in regard to the debtors' financial difficulties;
and the firm receive more than $2.5 million in revenue from work
for AIP in 1998 and 1999 alone.

According to the Committee, the firm has extensive and elaborate
connections to AIP.  Given the firm's connections to AIP,
Kirkland & Ellis will be unable to serve the estates with
undivided loyalty as required under Section 327 of the Bankruptcy
Code, Bennett J. Murphy, Esq., and James O. Johnston, Esq., at
Hennigan, Benneyy & Dorman in Los Angeles, argue to Judge Peter
J. Walsh.

Mark S. Kenney, Esq., a Trial Attorney for the United States
Trustee for Region III, also questions Kirkland's
disinterestedness.

"K&E remains disinterested within the meaning of 11 U.S.C. Sec.
101(14), as modified by 11 U.S.C. Sec. 1107(b)," James H.M.
Sprayregen, Esq., leading the team of lawyers at Kirkland & Ellis
that represent RBX maintains.  "[K&E] neither holds nor
represents interests adverse to the Debtors or the Debtors'
estates.  Mr. Sprayregen explains that while K&E represented both
RBX and AIP, AIP executed and delivered a conflict waiver on
November 20, 2000, in which AIP says it understands that (i) K&E
will serve as bankruptcy and reorganization counsel to RBX, (ii)
K&E can take positions adverse to AIP, and (iii) K&E can
prosecute RBX claims against AIP.


REGENT LAS VEGAS: Court Approves $20MM of Interim Financing
-----------------------------------------------------------
Still operating under bankruptcy protection, the Regent Las Vegas
plans to use $20 million in interim financing it received from
creditors last week to help it withstand projected future cash
shortfalls while the northwest Las Vegas property is shopped to
potential buyers, according to The Las Vegas Review-Journal. The
Review-Journal erroneously reported Wednesday that the interim
financing plan approved by U.S. Bankruptcy Court Judge Robert
Jones ended the Regent's chapter 11 bankruptcy protection. Jones'
approval of the $20 million loan leaves the resort's bankruptcy
protection intact.

The interim financing will provide $20 million in three
installments. The Regent plans to use the funds to withstand
potential cash shortfalls. A group, largely made up of the hotel-
casino's first mortgage noteholders, provided the financing. The
group is owed about $90 million of the more than $300 million the
Regent owes creditors. The creditors were willing to loan more
money to the property to protect their assets, according to the
lawyer for both the first mortgage note-holders and the creditors
who made the loan. The Regent filed for chapter 11 bankruptcy
protection on Nov. 21. (ABI World, January 30, 2001)


RELIANCE INSURANCE: A.M. Best Assigns E Rating
----------------------------------------------
A.M. Best Co. has downgraded the financial strength rating of
Reliance Insurance Company, Pennsylvania, and its property
casualty subsidiaries to E (Under Regulatory Supervision) from D
(Poor).

This rating action reflects the announcement that Reliance
Insurance Company was placed under regulatory supervision by the
Pennsylvania Department of Insurance. This regulatory action
supercedes the agreement reached with the department in August
2000 under which Reliance was required to file periodic reports
and obtain prior approval of certain financial transactions.

In addition, Reliance Group Holdings, Inc., the parent company,
has not resolved the debt restructuring which could ultimately
cause a filing for protection under the Federal Bankruptcy Code.
While banks and regulators have agreed to forbear on the filing
of any bankruptcy for the time being, the debt, due in November
2000, has technically matured without payment and the forbearance
could change at any time.

The following financial strength ratings were downgraded:

     --  Sable Insurance Company - E
     --  Reliant Insurance Company - E
     --  United Pacific Insurance Company of NY - E
     --  United Pacific Insurance Company - E
     --  Reliance Insurance Company of IL - E
     --  Reliance Insurance Company - E
     --  Reliance Direct Insurance Company - E
     --  Reliance Universal Insurance Company, Inc. - E
     --  Reliance Lloyds - E
     --  Reliance Surety Company - E
     --  Reliance National Indemnity Company - E
     --  Reliance National Insurance Company - E
     --  Reliance National Insurance Company (Europe) - E
     --  Reliance Insurance Company CAB - E

A.M. Best Co., established in 1899, is the world's oldest and
most authoritative insurance rating and information source. For
more information, visit A.M. Best's Web site at www.ambest.com.


REUTER MANUFACTURING: Virchow Replaces PricewaterhouseCoopers
-------------------------------------------------------------
On January 16, 2001, Reuter Manufacturing, Inc., dismissed
PricewaterhouseCoopers LLP, which had previously served as the
company's independent accountants.

An excerpt from the reports of PWC on the financial statements of
the company for the past two fiscal years contained the
following:

      (A) The 1999 report contained an emphasis of a matter
          paragraph regarding the troubled financial condition of
          the company.

      (B) The 1998 report was modified to express substantial
          doubt as to the company's ability to continue as a going
          concern.

Reuter's Audit Committee and Board of Directors participated in
and approved the decision to change independent accountants on
January 15, 2001. On January 17, 2001, it engaged Virchow, Krause
& Company, LLP as its new independent accountants.  That
engagement was approved by the company's Audit Committee and
Board of Directors when it had met on January 15, 2001.


SENETEK PLC: Says It'll Shut Down if Operating Losses Continue
--------------------------------------------------------------
Senetek is a science-driven biotechnology company that develops,
manufactures and markets proprietary products for the enhancement
of quality of life, primarily products for the diagnosis and
treatment of aging-related healthcare problems. It is a public
limited company that was registered in England in 1983
(registration number 1759068). The company has two wholly-owned
subsidiaries, Senetek Drug Delivery Technologies Inc. and Carme
Cosmeceutical Sciences Inc., both of which are Delaware
corporations. The principal executive offices are located in
Napa, California.

Senetek cautions that if it continues to incur operating losses
for a period longer than anticipated, it may be unable to
continue operations.

Although the company began operating almost 16 years ago in
October 1983, its type of business is subject to the risks
inherent in the establishment of a relatively new business
enterprise in the field of biopharmaceuticals. Potential
investors are advised to consider the likelihood of the success
of the business in light of the problems, expenses, difficulties
and delays frequently encountered in connection with the
development of new products and the competitive and regulatory
environment in which it operates.

Since the inception of the company, it has produced $31,352,000
in gross revenues and has had cumulative losses of $87,956,000
(including net losses of $11,862,000 for the year ended December
31, 1999 and $4,126,000 for the nine month period ended September
30, 2000, respectively).

As a result of these losses, the company's independent auditors
have added an explanatory paragraph to their report on the
December 31, 1999 financial statements that these losses raise
substantial doubt about Senetek's ability to continue as a going
concern.


SIMITAR ENTERTAINMENT: Mar. 7 Disclosure Statement Hearing Set
--------------------------------------------------------------
A hearing to consider approval of a disclosure statement in the
case of Simitar Entertainment, Inc. will be held on March 7, 2001
at 10:00 AM, U.S. Bankruptcy Court, District of Minnesota. The
proposed disclosure statement and plan were filed on January 11,
2001.


SUN HEALTHCARE: Inks Management Buy-Out Pact for U.K. Operations
----------------------------------------------------------------
Sun Healthcare Group, Inc.'s operations in the United Kingdom
have experienced difficult operating conditions and regulatory
uncertainty. The company has been and continues to generate
negative cash flows. In addition to the substantial operating
liabilities of the U.K. operations, Sun UK and Sunscript UK owe
intercompany debts to Sun in excess of approximately $27 million,
collectively. The Debtors believe that their U.K operations
currently have no equity value.

The Debtors cannot find any buyer for the UK business in light of
the trading performance, corporate structure and lease
guarantees.

Sun does not believe that it has the resources, both in terms of
personnel as well as the ability to maintain sustained financial
support, to devote to the turnaround of its U.K. operations.
Instead, Sun believes that its resources are better spent
focusing Sun's efforts on its core businesses in the U.S. Sun
faces substantial potential liabilities so long as Sun either
continues to own (albeit indirectly) the U.K. operations or
attempts to liquidate them, due to the existence of certain
prepetition guarantees and letters of credit issued and
outstanding for the benefit of Sun UK.

In consultation with the Committee and advisors, Sun has
concluded that liquidation of the U.K. operations is not likely
to yield any significant value to Sun and, in fact, may expose
Sun to additional claims or adversely affect Sun's ability in the
chapter 11 cases to seek an estimation of such claims at less
than the full amount asserted against Sun. These claims include
claims arising out of (i) Sun's execution and delivery of
guarantees to Principal Healthcare Finance Limited, Nursing
Home Properties plc (NHP), and Red Mountain Funding, LLC, three
of the companies that provided funding for sale-leaseback
transactions in the U.K., and (ii) the issuance of certain
letters of credit by Bank of America for the benefit of Principal
and Red Mountain under Sun's prepetition bank facility.

Although the letters of credit have not yet been drawn, Principal
and Red Mountain have each filed, on account of the guarantees,
proofs of claim in Sun's chapter 11 cases for $261,355,871 and
$33,083,669, respectively. Thus, in the event of a liquidation of
Sun BV and its assets (including the U.K. operations), Sun
potentially faces substantial additional liability on account of
the Principal, NHP and Red Mountain guarantees.

In contrast, however, if the U.K. operations continue to operate,
Sun will minimize its exposure under these guarantee claims as a
result of the satisfaction by the U.K. operations of their
underlying obligations under these leases. Moreover, one of the
conditions precedent to a closing of the sale of Sun is the
agreement by Principal to release its guaranty claim against Sun
in exchange for drawing on the letter of credit issued under the
Bank of America facility. If Sun is successful in negotiating
this compromise, it will result in the replacement of Principal's
guarantee claim against Sun for a substantially lower
reimbursement claim by Sun's prepetition lenders.

To continue the operations of the U.K. entities, but terminate
the Debtors' ongoing relationship with, and need for continued
oversight of, the U.K. operations, the Movants have reached an
agreement for the sale of the stock of Sun BV (which necessarily
will include its subsidiaries and the assets relating to the U.K.
operations) to K W Holdings Limited, a company incorporated in
England and formed for the purpose of acquiring the U.K.
operations by (i) Warren H. Mclnteer, CFO of International and
head of the management team for Sun's European operations, (ii)
Kent Phippen, another officer in Sun's international operations,
and (iii) certain members of their management group.

Details of the sale will involve Sun's international entities.

        Ownership Structure of International Operations

As previously reported, as of the Commencement Date, the Debtors
have International Operations, through certain of their
nondomestic, nondebtor affiliates, in the United Kingdom, Spain,
Germany, Israel and Australia.

As of the Commencement Date:

      -- Sun directly held (and still holds) 100% of the common
stock of International;

      -- International, in turn, held (and still holds) 100% of
the common stock of Sun Healthcare (Europe) BV (Sun BV), a
Netherlands holding company for the Debtors' European and Israeli
operations (i.e. United Kingdom, Spain, Germany and Israel) and a
non-debtor in the Sun chapter 11 proceedings;

      -- Sun BV, in turn, owned non-debtor operations in:

         Spain: 100% of Sun Healthcare Spain, S.L., a Spanish
                holding company that, in turn, owned approximately
                85% of Eurosar, S.A., a Spanish company that owns
                and operates 11 nursing homes in Spain.

         U.K.: 100% of Sun Healthcare Group UK Ltd. and Sun
               Healthcare Group (GB) Ltd., holding companies
               incorporated in England that, in turn, own,
               collectively, 100% of various subsidiaries that

               (a) own and operate 147 long-term care facilities
                   in England, Scotland, Wales, and Northern
                   Ireland,

               (b) provide, ancillary services to the long-term
                   care operators, including rehabilitation
                   therapy, pharmaceutical products and services
                   and disposable medical supplies (through two
                   wholly-owned, direct subsidiaries, Sunscript UK
                   Ltd. and Sunchoice UK Ltd.,

               (c) operate a supply distribution center.

         Germany: 100% of Sun Healthcare (Deustschlarid) GmbH, a
                  German holding and operating company that, in
                  turn, owns, among other things,

                  (a) 100% of PROCEDO Stocker GmbH, a German
                      company that provides medical supplies to
                      the German long-term care facilities, and

                  (b) 91.67% of Heimplan Dienstleistung GmbH, a
                      German company that owns and operates 17
                      nursing homes in Germany.

         Israel: 50% of Maccabi-Sun Health Services Ltd., an
                 Israeli joint venture that operates one nursing
                 home in Israel.

         Australia: Sun and International, collectively, owned as
                    of the Commencement Date (and still own), 100%
                    of SHG Holdings Pty Ltd., an Australian
                    holding company that owns various subsidiaries
                    that own and operate numerous nursing homes in
                    Australia.

           Divestiture of the International Operations

As previously reported, two non-debtor affiliates of the Debtors,
Sun BV and SHG Holdings (collectively, the International Holding
Companies) previously retained, with the Bankruptcy Court's
approval, as to Sun's obligations under such retention, Lazard
Freres & Co. LLC, Lazard Brothers & Co. Ltd., a U.K. affiliate,
and Caliburn Partnership Pty. Limited, an Australian affiliate,
to render investment banking and financial advisory services to
the International Holding Companies in connection with the
divestiture of the Debtors' inernational operations.

Since the retention, Lazard has assisted Sun in exploring options
for the European operations. As a result, Sun BV, a non-debtor,
has divested its interest in the operations located in Spain and
Israel.

With respect to the Israeli operations, Sun BV reached an
agreement with Maccabi Makif, Ltd., an affiliate of the Maccabi
Group (the other partner in the Sun-Maccabi joint venture), for
Maccabi's purchase of Sun BV's 50% interest in Sun-Maccabi for
US$ 50,000. On or about October 2, 2000, this proposed sale to
Maccabi was closed and consummated.

With respect to the Spanish operations, Sun BV reached an
agreement with Confide Residencias, S.L., a Spanish limited
liability company controlled by Higinio Raventos (Eurosar's
president), for the sale of Sun Spain and its wholly-owned
subsidiaries, including Eurosar, for cash proceeds of ?8,715,000
and the assumption of debt and lease obligations. On or about
October 3, 2000, this proposed sale to Confide was closed and
consummated.

The proceeds from the Maccabi and Confide sales have been
retained by Sun BV, which has used, and will continue to use,
such proceeds to fund the ongoing operations of Sun UK and its
direct and indirect subsidiaries.

           Transfer of the German Operations to Sun

With respect to the German operations, no formal sale agreement
has been executed. However, the books and records of Sun reflect
an intercompany payable from GmbH to Sun in excess of US$ 12
million, and Sun received an offer to purchase GmbH for
approximately US$ 4.5 million for the intercompany debt and DM 1
for the shares.

Therefore, Sun and Sun BV believe that GmbH currently has no
equity value.

Accordingly, and in order to accommodate the sale of Sun BV and
the U.K. operations, Sun BV entered into a transaction with Sun
in October of 2000, pursuant to which Sun BV transferred its 100%
ownership interest in GmbH to SHG International Holdings, Inc.,
one of the Debtors, in exchange for DM 1. Such transaction did
not involve the assumption by Sun or any of the Debtors of any
GmbH liabilities.

Lazard is continuing to market the German operations, and the
Movants believe that they are likely to enter into a definitive
agreement to sell the GmbH equity prior to year end. Because the
stock of GmbH is now held by one of the Debtors, the Debtors
indicate that they will seek approval of the Bankruptcy Court of
any such sale once the parties agree upon definitive
documentation.

Following the above transactions, Sun BV's sole remaining asset
was its 100% interest in the U.K. operations.

Sun BV has been able to use the proceeds from the Confide and
Maccabi sales to support operations, and those proceeds will
remain with Sun BV so that Sun BV can continue to provide
economic support to the U.K. operations.

          Agreement for the Sale of the U.K. Operations

The sale agreement contemplates the sale by International of the
stock of Sun BV free and clear of all liens, claims and
encumbrances to K W Holdings for:

      (1) US$1,

      (2) the payment to Sun of certain contingent payments, up to
          a maximum of 3,225,000 sterlings, which are payable, in
          essence, in the event of a bankruptcy filing within a
          specified period of time, if the U.K. operations exceed
          certain EBITDAR or Profit Before Tax projections, or
          there is a sale or other change of control of Sun BV,
          and

      (3) the partial satisfaction of the intercompany debt owed
          by Sun UK and Sunscript UK to Sun through:

          (a) the assignment to Sun of 1,581,343 sterlings
              (equivalent to US$2,308,761) in intercompany debt
              currently owed by Heimplan to Sun UK,

          (b) the assignment to Sun of 179,758 sterlings
              (equivalent to US$262,447) in intercompany debt
              currently owed by Stocker to Sunscript U.K., and

          (c) the assignment to Sun of A$1,501 ,080 (equivalent to
              US$900,000) in intercompany debt currently owed by
              SHG Holdings to Sun UK.

After the partial satisfaction of the intercompany indebtedness
owed by Sun UK and Sunscript UK to Sun, Sun will, in turn, assign
the remaining indebtedness to Sun BV for consideration equal to
US$1.

Accordingly, the Sun Debtors sought and obtained the Court's
approval, pursuant to sections 363(b) and 363(t) of the
Bankruptcy Code, and Rule 6004 of the Bankruptcy Rules, for the
sale of their U.K. operations, and for International's sale of
its interest in Sun B.V., free and clear of all liens, claims and
encumbrances, and for Sun's assignment of the remaining
intercompany indebtedness owed to Sun by Sun UK and Sunscript UK
to Sun BV, pursuant to a Sale Agreement and related transaction
documents.

The Debtors believe that in light of the situation, the sale of
the U.K. operations as contemplated in the Sale Agreement and the
related transactional documents is in the best interests of the
Debtors' estates and is, quite possibly, necessary to divest the
Debtors of substantial liabilities that would continue to drain
their valuable cash resources. (Sun Healthcare Bankruptcy News,
Issue No. 18; Bankruptcy Creditors' Service, Inc., 609/392-0900)


THROTTLEBOX MEDIA: Files For Chapter 11 Protection in New York
--------------------------------------------------------------
New York-based ThrottleBox Media, Inc. (formerly Spectra.Net
Communications) filed for Chapter 11 bankruptcy protection this
week, according to AtNewYork.  Its creditors include UUNET
Technologies.

ThrottleBox develops and markets downloadable multimedia services
for the Internet/intranet market. The company's clients include
the National Golf Foundation, Telebrands/As Seen on TV, Madison
Square Garden, AIG Life, Dow Jones, Combe Inc. and the National
Mentoring Partnership, AtNewYork reports.


TRANS WORLD: Seeks Court's Nod to Nix Icahn Ticket Deal
-------------------------------------------------------
Trans World Airlines (TWA) asked a bankruptcy judge to approve
ending former TWA president Carl Icahn's cheap-ticket deal with
the airline, which it called a "financial sinkhole" that could
jeopardize its plans to be acquired by American Airlines,
according to Reuters. The deal between Icahn and TWA goes through
2003. TWA stressed to the court that the Icahn contract is an
obstruction to a March 12 assets auction deadline to American
Airlines parent AMR Corp., or a higher bidder, and could force
TWA into liquidation. But Icahn's attorney has defended the
contract, saying that it should remain in place even if TWA is
taken over by another carrier. In papers filed late on Friday,
St. Louis-based TWA said it intended to reject the contract
valued at $200 million by Icahn.

"A speedy rejection of the ticket agreement is essential to
preserve the value of its assets," TWA said. "The proposed sale
to American Airlines, or such higher bidder as may emerge, may be
jeopardized should the rejection process be unduly delayed; the
ticket agreement is disadvantageous for TWA and would be
repellent to any other bidder." On Saturday night, a federal
judge handed TWA a significant victory when she approved an
auction process for selling the airline either to American or a
bidder with a higher and better offer. (ABI World, January 30,
2001)


VENCOR, INC.: Agrees To Modify Stay For Insured Litigation Claim
----------------------------------------------------------------
Vencor Nursing Centers East, L.L.C., d/b/a Rehabilitation and
Health Care Center of Cape Coral, is a defendant in the action
captioned Louis A. Dorto, as Attorney in Fact For Louis J. Dorto
vs. Vencor Nursing Centers East, L.L.C., d/b/a Rehabilitation and
Health Care Center of Cape Coral, Case No. 00-101 CA LG, In the
Circuit Court of the Twentieth Judicial Circuit In and For Lee
County, Florida.

Vencor, Inc. consented to and have obtained Judge Walrath's stamp
of approval for lifting the automatic stay to permit the
plaintiff in the action to prosecute her claim and to collect any
judgment in respect of any recovery of damages in the action from
any available insurance proceeds.

The Debtors have determined that there is an insurance policy
issued in favor of Vencor. Any settlement of or recovery of a
judgment for damages in the Underlying Action will be limited to
applicable insurance proceeds, and the plaintiffs will be
permitted to continue to assert an unsecured perpetition claim in
the Debtors' chapter 11 cases solely for the portion of the
judgment that cannot be satisfied by available insurance
proceeds.

Except as specifically provided in the stipulation, the
Plaintiffs shall not engage in any efforts to collect any amount
from the Debtors or any of Debtors' current and former employees,
officers and directors, or any person or entity indemnified by
Debtors.

The parties also agree to mutual general release of claims over
the matter. (Vencor Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


WASTE SYSTEMS: Court Gives Go Ahead For Interim Financing
---------------------------------------------------------
A bankruptcy court recently approved Waste Systems International
Inc.'s request for interim use of post-petition financing and
cash collateral, according to documents recently obtained by DBR.

A hearing has been scheduled for Thursday in the U.S. Bankruptcy
Court in Wilmington, Del. Objections are due today. The post-
petition financing and cash collateral will enable the non-
hazardous solid waste management company to continue operations
throughout the pending reorganization and maximize the value of
their business and properties, the company said. The court
authorized Waste Systems to get up to $5 million in post-petition
secured financing from B III Partners L.P. (ABI World, January
30, 2001)


W.R. GRACE: Eyes Chapter 11 After 81% Rise in Asbestos Claims
-------------------------------------------------------------
Shares of chemical company W.R. Grace & Co. dropped almost 30% on
Tuesday after it announced that it was considering Chapter 11
bankruptcy protection due to a rising number of asbestos-related
injury suits, Reuters relates.

According to Reuters, Grace shares dropped 80 cents, or 28.57
percent, to $2.00 on the New York Exchange a day after the
company's first announced that it would consider bankruptcy
protection and that it had taken a $132.5 million fourth-quarter
charge to increase its reserves for resolving asbestos cases.
Reportedly, this extra money is meant to fund the company's $1.11
billion liability payments, including insurance proceeds and tax
benefits over the next 40 years.

The company previously reported that asbestos-related claims rose
81 percent in 2000. It is confronted with a total of seven
property damage lawsuits, nine attic insulations class action
lawsuits, and 124,907 bodily injury claims pending as of Dec. 31.

Grace also faces possible non-renewal of a $250 million credit
line that expires in May due to rising concerns regarding
asbestos litigation, Reuters says. If it isn't renewed, $150
million of the debt will be due.


XEROX CORP.: $119 Million Loss Exceeds Expectations
---------------------------------------------------
Fourth-quarter losses at Xerox Corp. were slightly wider than
Wall Street analysts had expected, and the business machines
maker warned to expect at least one more quarter of the same this
year before things get better, according to the Associated Press.
For the three months ended Dec. 31, Xerox lost $119 million
compared with profits of $294 million in the year-ago period, the
company said Monday. For all of 2000, the company lost $384
million on revenues of $18.63 billion. Xerox earned $1.42 billion
on 1999 revenues of $19.55 billion.

Chairman Paul Allaire told Wall Street analysts that the company
expects a similar loss in the first quarter, then sequential
progress throughout the year. Allaire said a primary goal of
generating cash is being achieved, in large part through the sale
of its Chinese operations. The company also has a financing
commitment from GE Capital and is negotiating with GE Capital to
provide financing for some Xerox customers in Europe. He also
said that the company's senior management has spent a lot of time
reassuring customers that Xerox has no plans to file for
bankruptcy protection and that its turnaround plan is on track.
(ABI World, January 30, 2001)

                           *********

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.bankrupt.com/books/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.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.  Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.

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

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