TCR_Public/010213.MBX          T R O U B L E D   C O M P A N Y   R E P O R T E R

             Tuesday, February 13, 2001, Vol. 5, No. 31

                             Headlines

ARMSTRONG WORLD: Publishes Schedules Of Assets & Liabilities
ARMSTRONG WORLD: Obtains Court Approval for $300MM DIP Financing
ATLANTIC & PACIFIC: New Revolver Tightens Grocer's Liquidity
AUSTIN HOUSING: Moody's Cuts Mortgage Revenue Bond Rating To C
BOSTON CHICKEN: Plan Trustee Prepares for High-Stakes Litigation

BYEBYENOW.COM: Receives Interim Approval on DIP Loan
CALL-NET: Moody's Downgrades Senior Unsecured Notes to Ca
CAREMATRIX CORP: Creditors Committee Hires Akin Gump as Counsel
CKE RESTAURANTS: Bank Waives EBITDA Covenant through April 30
DIMAC HOLDINGS: Court Okays Asset Sale To Label Art

FINOVA GROUP: Goldman & GE Capital Make $2B Bid to Control Assets
FRUIT OF THE LOOM: Leesburg Swaps Equipment with Gibbs Int'l
GEORGIA INTERNATIONAL: Plans To Sell Medical Unit To Tenet
HARNISCHFEGER INDUSTRIES: Wants Until Apr. 18 to Solicit Votes
HARRY'S FARMERS: Retains Houlihan Lokey to Explore Alternatives

IMPERIAL SUGAR: Has Until March 2 to File Schedules & Statements
INTEGRATED HEALTH: Amends Special Customer Arrangement With MCI
J. SILVER CLOTHING: Hopes To Emerge From Bankruptcy By Summer
KCS ENERGY: Marks Feb. 2 As Record Date for Plan Distributions
LOEWS CINEPLEX: Schwartz & Winnick Seen As Top Bidders for Assets

LOGOATHLETIC INC.: Seeks Court's Nod To Sell Assets To Reebok
LTV CORPORATION: Paying Critical Vendors And Service Providers
M GROUP INC: Court Approves Extension of Exclusivity To March 9
MARINER POST-ACUTE: Living Centers Renews Lease For Belmont Lodge
OTR EXPRESS: Modifies Payment Terms with Equipment Lenders

PAYLESS CASHWAYS: Availability Under Revolver Dangerously Low
PENN OCTANE: Restructures Promissory Note Obligations
PILLOWTEX CORP.: Says Schedules Can Be Completed By Feb. 23
POCKET COMMUNICATIONS: Files Amended Joint Disclosure Statement
QUAD SYSTEMS: Creditors' Meeting To Be Held On March 13

QUENTRA NETWORKS, INC: Meeting of Creditors Set On March 5
RBX CORP.: Bankruptcy Case Moved From Delaware to Roanoke
SAFETY-KLEEN: Seeks To Cancel/Replace Reliance Insurance Policies
SUN HEALTHCARE: Agrees To Modify Stay For Insured Claims
TBS SHIPPING: Completes Chapter 11 Reorganization

UNITED HOCKEY: Files for Chapter 11 Protection in New York
VENCOR INC: Settles SERP and Other Claims with Michael Barr
VLASIC FOODS: Court Okays Use of Prepetition Business Forms
WSR CORP: Court Okays Extension Of Exclusive Periods to April 9
XEROX CORP.: Fitch Downgrades Senior Debt Rating To BB

                             *********

ARMSTRONG WORLD: Publishes Schedules Of Assets & Liabilities
------------------------------------------------------------
Armstrong World Industries, Inc., filed its Schedules of Assets
and Liabilities on a stand-alone basis from its debtor and non-
debtor affiliates. The Schedules are prepared by the Debtors'
management, as of the Petition Date, and are required of all U.S.
debtors pursuant to 11 U.S.C. Sec. 521 and Rule 1007 of the
Federal Rules of Bankruptcy Procedure. The Schedules conform to
the Official Bankruptcy Forms issued by the Administrative Office
of the U.S. Courts, following instructions promulgated by the
Judicial Conference of the United States. The Schedules do not
apply generally accepted accounting principles.

Armstrong cautioned that because it and its affiliates use a
consolidated cash management system, its Schedules may not
reflect payments by an affiliated Debtor on behalf of the Debtor.
Armstrong didn't explain who might be paying its prepetition
debts.

AWI listed all of its legal, equitable and future interests in
real property at $215,095,738.04 stated at estimated net book
value. This value includes land, acquisition costs, building
costs, construction costs, excavation costs, improvements, and
construction in progress. These properties, all of which are held
by the Debtor in fee simple and are shown as unencumbered, are:

      Site Name                    Value of Debtor's Interest
      ---------                    --------------------------
      Armstrong Manor                   $ 895,504.13
      2025 Lititz Pike
      Lancaster, PA 17601

      Beaver Falls Plant                4,338,298.40
      1018 Eleventh Street
      Beaver Falls, PA

      Beech Creek Plant                 1,871,430.09
      Route 150, Main Street
      Beech Creek, PA

      Hilliard Plant                    3,582,265.46
      4241 Leap Road, Bldg. A
      Hilliard, Ohio

      Jackson Plant                     3,908,440.62
      1085 Hwy 80 West
      Jackson, Mississippi

      Kankakee Plant                   13,492,461.22
      1401 N. Hobbie Avenue
      Kankakee, Illinois

      Lancaster General Office         87,717,243.54
      2500 Columbia Avenue
      Lancaster, Pennsylvania

      Lancaster Plant                  22,134,636.10
      401 West Liberty
      Lancaster, Pennsylvania

      Lancaster Plant 900 Building      7,790,209.47
      2913 Spooky Nook Road
      Manheim, Pennsylvania

      Lancaster Plant, Bldgs. 151 & 152    29,194.44
      401 West Liberty
      Lancaster, Pennsylvania

      Macon Plant                      10,604,650.03
      4520 Broadway
      Macon, Georgia

      Marietta Ceiling Plant            8,935,829.15
      Highway 441
      Marietta, Pennsylvania

      Mobile Plant                      4,318,438.95
      1251 Baker Street
      Mobile Alabama

      Pensacola Plant                   4,677,867.66
      300 South Myrick Street
      Pensacola, Florida

      South Gate Plant                  6,650,060.17
      5037 Patata Street
      South Gate, California

      St. Helens Plant                 10,363,822.96
      1645 Railroad Avenue
      St. Helens, Oregon

      Stillwater Plant                 22,195,378.82
      4115 North Perkins Road
      Stillwater, Oklahoma

      WAVE Sparrows Point               1,589,807.03
      5301 North Point Blvd.
      Baltimore, Maryland

AWI has also listed its personal property with a total value of
$6,235,657,751.68. These assets consist of:

      Cash on hand                               $18,078.46
      Commercial bank accounts                46,191,556.55
      Insurance policies                      29,070,867.27
      Stocks and interests in
        incorporated businesses            5,093,319.946.00
      Accounts receivable (trade)            214,116,603.80
      Other contingent and
        unliquidated claims                  196,000,000.00
      Transportation equipment                   275,593.25
      Office furniture & equipment            72,729,316.42
      Machinery & equipment                  454,285,921.16
      Inventory                              114,953,073.00
      Patents, copyrights, & intellectual
        property in general Unknown
        Licenses, fees & intangibles Unknown
        Misc. personal property               14,696,795.07
       (finished goods stock, raw materials
        stock, and general company supplies)

AWI therefore asserts that it owns property with a total value of
$6,450,753,289.72.

Checking accounts listed by the Debtor as comprising the balance
of $46,191,556.55 include:

      Bank                    Purpose of Account            Amount
      ----                    ------------------            ------
      Allfirst Bank             Checking                    $1,000
      York, Pennsylvania        Investments                 20,409

      Bank of America           Collection                 145,569
      Concord, California

      Barclays Bank PLC         Euro                       709.809
      Richmond, Surrey

      Chase Manhattan Bank      Cash concentration           1,161
      New York, New York        Overnight investments      465,000

      CreditSuisse/
      First Boston              Investment account      25,000,000

      First Union National Bank Collection                 702,748
      Lancaster, Pennsylvania

      Mellon Bank N.A.          Collection               3,605,247
      Pittsburgh, Pennsylvania

      Wachovia Bank             Collection                 399,934
      Atlanta, Georgia          General funding          4,940,696
                                Salary payroll           7,313,357
                                Hourly payroll                   0
                                Hourly payroll              99,598
                                Medical/dental trust             0
                                Debit & imprest            120,420
                                Disbursement             2,406,701
                                Corp.Ben.Serv.Med/Dental   259,901

The Debtor identifies three insurance policies it owns:

Insurance company            Type of insurance          Value
-----------------            -----------------          -----
Manufacturers Life Ins. Co. Life (net surrender)      $10,628,235
Pacific Life Ins. Co.       Life (net surrender)          339,040
Prudential                  Life (net surrender)       18,103,590

The Debtor's receivables are identified as:

      Receivable type                           Value
      ---------------                           -----
      Trade                                 $151,816,096
      Accrued interest                         1,964,915
      Travel advances                             17,633
      Rebate claims discount                     706,897
      Miscellaneous receivables                7,370,097
      American Express advances                  124,432
      American Express travel reimbursement      160,511
      Corporate air travel                     1,084,953
      Workers comp due from carriers              83,781
      Insurance receivables (settled
        asbestos claims)                      75,800,000
      Less reserve                           (25,012,715)
                                             ------------
                                            $214,116,603

The Debtor's explanation of contingent and unliquidated claims
owned by AWI is:

            Description                                   Value
            -----------                                   -----
Estimated insurance recoveries re asbestos claims   $192,400,000
Estimated insurance recoveries re environmental        3,600,000
Contingent post-closing working capital adjustment
   in connection with previous divestiture                Unknown
Claims, counter-claims and potential counter-claims
   In pending litigation                                  Unknown
Potential rights of contribution against co-debtors      Unknown

AWI owns numerous patents pending application, common law
trademarks, and pending trademarks in various countries, and
places an unknown value on these items of intellectual property.
The Debtor also has numerous licenses and general intangibles,
which are also assigned an unknown value by the Debtor.

Armstrong World Industries can quantify claims totaling
$1,956,313.61 against its estate. Creditors holding claims
secured by liens and security interests against the Debtor's
property total $170,659.06. Unsecured claims for which priority
of payment is accorded under 11 U.S.C. Sec. 507 total
$1,785,654.55. The Debtor lists 271 executory contracts and
unexpired leases to which it is a party. (Armstrong Bankruptcy
News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


ARMSTRONG WORLD: Obtains Court Approval for $ 300MM Financing
-------------------------------------------------------------
By court order entered on February 6, 2001, the U.S. Bankruptcy
Court, District of Delaware, entered a final order authorizing
the debtors, Armstrong World Industries, Inc., et al. to borrow
or obtain letters of credit pursuant to the DIP Credit Agreement
and the Guarantors may guaranty such borrowings, up to an
aggregate of $300 million, inclusive of amounts borrowed or
letters of credit issued pursuant to the Interim Order, which
shall be used for working capital and other general corporate
purposes of the Borrower and the Guarantors.  Chase Manhattan
Bank serves as the agent for the syndicate of post-petition
lenders.


ATLANTIC & PACIFIC: New Revolver Tightens Grocer's Liquidity
------------------------------------------------------------
A&P (Montvale, NJ) is negotiating a new, approximately $425
million senior secured revolving credit agreement, due December
2003, to replace its existing $500 million unsecured facility,
F&D Reports relates. At the close of the third quarter ended
December 2, 2000, availability under the existing facility was
$170 million. While the Company recently indicated that available
borrowings have since increased, the fact that the new facility
is smaller will make availability even tighter. Although the new
facility hasn't closed yet, Standard & Poor's assigned a
reliminary rating of BB+. It also affirmed the Company's other
ratings, and maintained its "negative" outlook. The borrowing
base on the new facility, which consists of a $300 million U.S.
facility and a $125 million Canadian facility, is equal to the
sum of 60% of eligible store inventory, 65% of eligible warehouse
inventory, and 50% of the aggregate appraised value of $120
million of real estate properties.

Meanwhile, F&D observes, president & CEO, Christian W. E. Haub,
recently stated that although the Company has no current plans
regarding asset sales, it would consider such alternatives if
they proved to be in the Company's best interests. While A&P's
Northeastern stores would be the most coveted, given the high
level of interest that acquisitive companies have been paying to
this region, any potential asset sales are more likely to involve
the Company's stores in secondary markets in the South, Midwest
or Mid-Atlantic.


AUSTIN HOUSING: Moody's Cuts Mortgage Revenue Bond Rating To C
--------------------------------------------------------------
Moody's Investors Service has downgraded the rating on the Austin
Housing Finance Corporation, Texas Single Family Mortgage Revenue
Bonds, Series 1984 to C from B3. The amount of debt affected by
this rating action is said to be approximately $1.7 million.

According to Moody's, the C rating reflects the continuance of
the program's deteriorating financial position, evidenced by a
program-asset-to-debt ratio (PADR) of 0.661 as of November 30,
2000, which represents a decline from the July 31, 1997 level of
0.90. The decline in the program's PADR is the result of the
negative spread between the interest rate earned on the mortgage
loans (11.5%) and reserves (10.98%), and the rate accruing on the
bonds (12%), Moody's says.

Moody's expects the erosion in the financial position will
continue, and has already led to the likely inability to make
full and timely payment on all of the remaining obligations when
the bonds come due. With the C rating, Moody's expects that a
significant portion of the remaining debt outstanding will likely
default. The amount of bonds likely to be affected by a default
is directly tied to the prepayment speed of the remaining 21
mortgage loans, Moody's relates.

The outlook on the bonds is negative. Due to the negative spread
between mortgage interest rates and reserve to bond interest
rates, the program is said to continue to deteriorate
financially. In Moody's opinion, without an infusion of moneys
from outside resources, which is unlikely, the bonds will default
on the payment of principal and interest on the bonds.


BOSTON CHICKEN: Plan Trustee Prepares for High-Stakes Litigation
-----------------------------------------------------------------
Gerald K. Smith, serving as the Trustee of the Boston Chicken,
Inc. Plan Trust created under the Plan of Reorganization
confirmed by the U.S. Bankruptcy Court for the District of
Arizona on May 15, 2000, has retained the Phoenix-based law firm
of Beus Gilbert, PLLC as his special litigation counsel and has
struck a deal with unnamed Boston Chicken creditors to fund (at a
20% annual interest rate) litigation against:

      * Boston Chicken's independent outside auditors;

      * Law firms who performed services for Boston Chicken;

      * Professionals and entities (like former officers and
        directors, financial advisors, accounting firms,
        investment banking firms, and law firms) involved with
        Boston Chicken in issuing securities or negotiating the
        sale of stock or assets; and

      * Current or former partners, officers, directors, agents or
        employees of Boston Chicken or any of the above-listed
        entities.

Beus Gilbert, Mr. Smith told Judge Case, has successfully pursued
many causes of action against accountants, underwriters, officers
and directors  and others for accounting malpractice, state and
federal securities law  violations and common law claims. In
addition, Beus Gilbert also has significant experience
representing bankruptcy trustees. Furthermore, Beus Gilbert has
had successful experience suing and collecting from large
accounting firms. Beus Gilbert agrees to work on a contingency
fee basis, receiving:

      * 20% of any gross recoveries up to $200 million recovered
        within 90 days of filing the complaint;

      * 33-1/3% of any gross recoveries up to $200 million
        recovered after the ninety-first day after the complaint
        is filed and before the jury is sworn;

      * 40% of any gross recoveries up to $200 million obtained
        from the day the jury is sworn; and

      * 25% of any recoveries in excess of $200 million no matter
        when the recoveries are obtained.

Beus Gilbert agrees that recoveries will first be used to
reimburse any costs paid out of the cost retainer advanced by the
unnamed creditors, together with 20% annual interest, before
payment of its legal fees.


BYEBYENOW.COM: Receives Interim Approval on DIP Loan
----------------------------------------------------
The U.S. Bankruptcy Court granted interim approval to
ByeByeNow.com, Inc.'s motion for up to $320,000 in financing,
allowing the Company to pay employees and phone and electric
bills. The interim financing will meet the Company's immediate
needs for an additional two weeks, as it seeks possible buyers
for certain Company assets. (ABI World, February 9, 2001)


CALL-NET: Moody's Downgrades Senior Unsecured Notes to Ca
---------------------------------------------------------
Moody's Investors Service downgraded the following senior
unsecured notes of Call-Net Enterprises Inc. to Ca from B2:

      * 8 3/8% senior notes due 2007,

      * 9.27% senior discount notes due 2007,

      * 8% senior notes due 2008,

      * 8.94% senior discount notes due 2008,

      * 9 3/8% senior notes due 2009,

      * 10.8% senior discount notes due 2009,

Also, Call-Net's senior implied rating is downgraded to Caa2 from
B1, and its senior unsecured issuer rating is downgraded to Ca
from B2. Moody's has also assigned a B3 rating to Call-Net's
proposed US$ 400 million Senior Secured Notes due 2006.

Moody's relates that the ratings reflect that Call-Net's present
liquidity position may not sustain the company's long term
business plan and absent additional funding. Moody's also
consider that the company lacks the financial profile and asset
base to afford sufficient protection to all debt-holders.
Accordingly, as of September 30, 2000, Call-Net recorded capital
assets of C$910 million to support long-term debt of C$2.3
billion. Present management has assumed responsibility for a
company burdened by an exceptionally high level of debt that
accounts for approximately 90% of its capital structure, negative
EBITDA margins (computed according to US GAAP), and constrained
liquidity, Moody's says.

Moreover, Call-Net reportedly sustained EBITDA losses of C$106
million and incurred capital expenditures of C$125 million and
cash interest expense of C$72 million for the first nine months
of 2000. Moody's believes that Call-Net will require significant
additional capital in the future to fund its operating and
capital expenditures, and will depend upon continued access to
external funding and the sale of remaining non-core assets.

In Moody's opinion, it will also be difficult for Call-Net to
access the public markets given present capital market
conditions, and the extent of the company's leverage in relation
to its asset base. There has been no indication that Sprint
Corporation (SR. at Baa1 with negative outlook), a 25% non-voting
shareholder, will provide additional funding to Call-Net, Moody's
says.

Call-Net is based in Toronto, Canada. It is a provider of long
distance, local and data communications services.


CAREMATRIX CORP: Creditors Committee Hires Akin Gump as Counsel
---------------------------------------------------------------
On January 26, 2001, the US Bankruptcy Court, District of
Delaware, entered an order approving the application of the
Official Committee of Unsecured Creditors of Carematrix
Corporation, et al., to retain Akin, Gump, Strauss, Hauer & Feld
LLP as lead counsel to the Committee, based upon the Affidavit of
Michael S. Stamer, a partner of the firm.


CKE RESTAURANTS: Bank Waives EBITDA Covenant through April 30
-------------------------------------------------------------
CKE Restaurants (Anaheim, CA) has amended its senior credit
facility, F&D Reports relates. Under the terms of the new
facility, (i) the Company must have $10 million in net proceeds
from asset sales by the end of February and $25 million by the
end of March, otherwise the interest rate payable on the
Company's outstanding borrowings will increase until they are
met; (ii) compliance with financial covenants, excluding EBITDA,
has been waived until April 30, 2001; and (iii) capital
expenditures are limited during the first quarter of fiscal 2002.
According to the Company, it will use the next three months "to
continue our debt reduction program as we work towards a partial
or complete refinancing of this credit facility as soon as
reasonably practicable."


DIMAC HOLDINGS: Court Okays Asset Sale To Label Art
---------------------------------------------------
The Honorable Mary F. Walrath, U.S. Bankruptcy Court, District of
Delaware, entered an order on February 6, 2001, approving that
certain Asset Purchase Agreement dated January 5, 2001 by and
between AmeriComm Direct Marketing, Inc. and Label Art, Inc.,
buyer.


FINOVA GROUP: Goldman & GE Capital Make $2B Bid to Control Assets
-----------------------------------------------------------------
Investment bank Goldman Sachs Group Inc. and General Electric
Co.'s GE Capital are proposing to take effective control of
troubled lender Finova Group Inc., according to The Wall Street
Journal. Citing people familiar with the situation, the paper
said the pair would invest $2 billion in Finova, a proposal that
is opposed by some of Finova's creditors. Under the proposal,
Goldman and GE Capital would buy $2 billion of Finova's debt and
the company would reorganize under chapter 11.

Goldman and GE Capital would take control of Finova's assets and
manage them, though the two were not trying to buy Finova. The
two companies would get interest on the debt they invested in and
also take in a management fee. Finova owes $1.6 billion in debt
due on May 15. Leucadia National Corp. agreed to invest $350
million in Finova in December, but that arrangement was
terminated last month, with both companies saying Finova's bank
lenders and bondholders were the roadblock to a deal. (ABI World,
February 9, 2001)


FRUIT OF THE LOOM: Leesburg Swaps Equipment with Gibbs Int'l
------------------------------------------------------------
Leesburg Yarn Mill Inc., a subsidiary of Fruit of the Loom, Ltd.
located in Leesburg, Alabama, sought and obtained the Court's
permission to swap equipment with Gibbs International Inc. The
equipment is called used cardroom equipment and is installed in
the Leesburg facility. Yarn Mills will swap the equipment for
$750,000 in trade-in-credit with Gibbs for new, modern cardroom
equipment from American Truetzschler Inc. Yarn Mills asked that
the transfer be free and clear of all liens, claims and
encumbrances.

Leesburg Yarn manufactures yarns that are used primarily by Fruit
of the Loom's related businesses to produce textile goods.
Leesburg Yarn is undertaking renovation projects at the Leesburg
plant to update and modernize its equipment to reduce operating
costs there and improve overall operating efficiencies.
Accordingly, Leesburg Yarn has entered into an agreement with
American Truetzschler for the purchase and installation of new
cardroom equipment to replace the old equipment.

The net purchase price of the new cardroom equipment is
$5,843,115. This amount reflects the trade-in-credit and is
within the allowed capital expenditures budget set forth in the
post-petition financing agreement.

Before American Truetzschler installs the new cardroom equipment
at the Leesburg facility, the old cardroom equipment must be
uninstalled and removed. American Truetzschler began shipping the
new cardroom equipment to the Leesburg plant in October. To
accommodate the deliveries, Gibbs, with Leesburg's consent, has
removed some of the used cardroom equipment.

American Truetzschler agreed to purchase the old cardroom
equipment from Leesburg Yarn for the trade-in value of the old
cardroom equipment, based on the purchase price as arranged
between Leesburg Yarn and a third party purchaser. Gibbs will
purchase the old cardroom equipment from American Truetzschler
for the aggregate price of $750,000. Although Leesburg Yarn is
trading-in the old cardroom equipment to American Truetzschler,
American Truetzschler specifically requested that Leesburg Yarn
transfer ownership directly to Gibbs. Gibbs paid $150,000 to
American Truetzschler and will pay the balance in six monthly
installments of $100,000 each. American Truetzschler will, in
turn, issue the trade-in credit to Leesburg Yarn.

To ensure that Leesburg Yarn obtained the highest trade-in value
for the old cardroom equipment, it conducted a bidding process.
By letter, dated August 14, 2000, Leesburg Yarn solicited offers
from four prospective purchasers. The four bids were:

      * $312,500 from Tex-Mach Inc., in Mayo, South Carolina;

      * $545,000 from International Textile Machinery Sales Inc.,
        in King Mountain, North Carolina;

      * $120,480 from Atkins Machinery Inc., in Spartanburg, S.C.;
        and

      * $750,000 from Gibbs International Inc.

Gibbs presented the highest and best offer and, the Debtors note,
provided for the orderly removal of the equipment at Gibbs'
expense. (Fruit of the Loom Bankruptcy News, Issue No. 21;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


GEORGIA INTERNATIONAL: Plans To Sell Medical Unit To Tenet
----------------------------------------------------------
Tenet Healthcare Corporation (NYSE: THC) has reached an agreement
with Georgia International Health Alliance Inc. (GIHA) to
purchase South Fulton Medical Center, a 369-bed acute care
hospital located in East Point, a suburb of Atlanta.

The agreement must still be approved by the U.S. Bankruptcy
Court, Northern District of Georgia -- Atlanta Division following
a hearing at which competing offers may be considered. That
hearing has not been scheduled.

GIHA, the parent company of South Fulton Medical Center, filed
for protection under Chapter 11 of the U.S. bankruptcy laws in
April 2000.

"We believe South Fulton Medical Center is a perfect fit to join
our four acute care hospitals in the greater Atlanta area," said
Reynold J. Jennings, executive vice president of Tenet's
Southeast Division. "We're excited at having the opportunity to
bring our national resources to help preserve this important
community asset and enhance South Fulton's ability to meet the
needs of the community it serves."

"South Fulton Medical Center is extremely pleased with the
prospects of being able to work with Tenet in bringing about this
transaction," said C. C. Martin, Chairman of the Board of South
Fulton Medical Center. "We think that Tenet offers significant
benefits to southwest Atlanta in ensuring the growth of needed
medical services in this area."

Tenet already operates four acute care hospitals in the greater
Atlanta area -- Atlanta Medical Center in downtown Atlanta; North
Fulton Regional Hospital in Roswell; Spalding Regional Hospital
in Griffin; and Sylvan Grove Medical Center in Jackson.

Tenet Healthcare, through its subsidiaries, owns and operates 110
acute care hospitals with 26,914 beds and numerous related health
care services. The company employs approximately 103,500 people
serving communities in 17 states and services its hospitals from
a Dallas-based operations center. Tenet's name reflects its core
business philosophy: the importance of shared values among
partners -- including employees, physicians, insurers and
communities -- in providing a full spectrum of health care. Tenet
can be found on the World Wide Web at www.tenethealth.com.


HARNISCHFEGER INDUSTRIES: Wants Until Apr. 18 to Solicit Votes
--------------------------------------------------------------
Harnischfeger Industries, Inc. asked the Court to approve for a
further extension of the period within which they have the
exclusive right to solicit acceptances of the Plan up to and
including April 18, 2001.

The Debtors drew Judge Walsh's attention to the current status of
their cases. Pursuant to the Court's approval of the Third
Amended Disclosure Statement for Third Amended Joint Plan of
Reorganization, the deadline to vote to accept or reject the
Third Amended Joint Plan of Reorganization was January 30, 2001.
Based on the Debtors' preliminary tabulation of the votes, it
appears that all voting classes of all 58 Subplans voted to
accept the Plan.

Originally, the confirmation hearing was set for March 5, 2001.
The Court, however, rescheduled the hearing to April 3, 2001. The
Debtors submitted that the Exclusive Solicitation Period must be
extended to accommodate this schedule change.

The Debtors represent that, while extension of the Exclusive
Solicitation Period requested will not harm the creditors or
other parties in interest, termination of this period at this
juncture would defeat the purpose of section 1121 of the
Bankruptcy Code of affording the debtor a meaningful and
reasonable opportunity to confirm a cohesive plan of
reorganization. Any such termination would likely cause a
deterioration in the Debtors' businesses and the value of their
assets to the detriment of the Debtors' estates and creditors.

The Debtors reiterated that they have made significant progress
in their efforts to emerge from chapter 11 and reminded the Court
that one of the last steps in this process is to confirm the Plan
at the April 3, 2001 confirmation hearing. If the Exclusive
Solicitation Period is not extended, the Debtors say, then all
the progress made over the last six months may be for naught.

Therefore, the Debtors asserted that granting the extension of
the Exclusive Solicitation Period as requested is reasonable and
appropriate and in the best interest of the estates.
(Harnischfeger Bankruptcy News, Issue No. 37; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


HARRY'S FARMERS: Retains Houlihan Lokey to Explore Alternatives
---------------------------------------------------------------
As part of an effort to maximize stockholder value, F&D Reports
says, the board of directors of Harry's Farmers Market (Roswell,
GA) has retained the investment banking firm of Houlihan Lokey
Howard & Zukin to assist it in exploring strategic alternatives,
which may include recapitalization, business combinations, joint
venture opportunities, and the sale or merger of the Company.
Although the news boosted the Company's stock price, its shares
continue to languish below the $1 per share mark, where they have
been since August.

In other news, F&D relates, Jim Drummond and Stephen Whitesmith
have been appointed COO and CIO, respectively. Both men had
previously been assisting the Company as consultants.


IMPERIAL SUGAR: Has Until March 2 to File Schedules & Statements
----------------------------------------------------------------
Imperial Sugar Company said that, because of (a) the substantial
size and scope of the Debtors' businesses, (b) the complexity of
their financial affairs, (c) the limited staffing available to
perform the required internal review of their accounts and
affairs and (d) the press of business incident to the
commencement of these cases, it was impossible to assemble, prior
to the Petition Date, all of the information necessary to
complete and file their Schedules of Assets and Liabilities and
Statements of Financial Affairs required under 11 U.S.C. Sec. 521
and Rule 1007 of the Federal Rules of Bankruptcy Procedure. The
Debtors note that they have thousands of vendors and other
potential creditors and employees. Further, they must ascertain
the pertinent information, including addresses and claim amounts,
for each of these parties to complete the Schedules and
Statements on a Debtor-by-Debtor basis.

Accordingly, the Debtors sought and obtained an extension of
their time within which to file their Schedules and Statements to
March 2, 2001. (Imperial Sugar Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


INTEGRATED HEALTH: Amends Special Customer Arrangement With MCI
---------------------------------------------------------------
In anticipation of RoTech's increased commitment for
telecommunication services, RoTech and MCI WorldCom have entered
into a First Amendment to Special Customer Arrangement for MCI
WorldCom On-Net Service, which provides for reduced rates at the
increased commitment.

The original three-year agreement stemmed from pre-petition
negotiations between RoTech and MCI Worldcom and was entered into
and approved by the Bankruptcy Court after the commencement of
the chapter 11 cases.

The Amendment provides that:

      (1) Annual minimum usage charges of $3,000,000 will be
amended to minimum charges of $5,000,000;

      (2) Domestic frame minimum of customer's recurring and port
and PVC charges of $960,000 will be amended to minimum charges of
$2,280,000;

      (3) The Additional Monthly Discount (AMD) for Dedicated to
Switched rate for Interstate Outbound Voice Service will be
increased to 45.81% from 42.53% and will be increased to 38.17%
from 36.15% for switched to switched rate;

      (4) With respect to Interstate Inbound Voice Service, the
AMD for Dedicated Access Service will be increased from 42.53% to
45.81% and the AMD for switched rate will be increased from
36.15% to 38.17%. (Integrated Health Bankruptcy News, Issue No.
13; Bankruptcy Creditors' Service, Inc., 609/392-0900)


J. SILVER CLOTHING: Hopes To Emerge From Bankruptcy By Summer
-------------------------------------------------------------
J. Silver Clothing Inc., a Norwalk, Ct. women's-fashion retailer
which filed Chapter 11 in December, is hoping to emerge from
bankruptcy protection in the summer as a more streamlined and
more focused company. J. Silver, which last year closed twenty-
five of its stores in the Midwest, hopes to focus on its core New
England operations, which include about thirty-five stores. The
firm once had about sixty-five locations. (New Generation
Research, February 9, 2001)


KCS ENERGY: Marks Feb. 2 As Record Date for Plan Distributions
--------------------------------------------------------------
KCS Energy, Inc. (NYSE: KCS) confirmed that February 2, 2001 is
the record date for payments or distributions to be made pursuant
to the order entered by the United States Bankruptcy Court for
the District of Delaware on January 30, 2001 confirming the KCS
Energy, Inc. plan of reorganization.

As previously announced, on the effective date of the plan, which
is anticipated to be in mid-February, current shareholders will
retain 100% (75% on a fully diluted basis) of the common stock,
all past due interest on the Senior Notes and Senior Subordinated
Notes will be paid, and the Company will repay $60 million of its
Senior Notes. The remaining $90 million principal amount of its
Senior Notes and $125 million principal amount of its Senior
Subordinated Notes will be renewed under amended indenture
provisions, but without a change in interest rates. In addition,
the maturity date of the Subordinated Notes has been amended from
January 15, 2008 to January 15, 2006. All other creditors will be
paid in full on the effective date or in the ordinary course of
business.

KCS is an independent energy company engaged in the acquisition,
exploration, development and production of natural gas and crude
oil with operations in the Mid-Continent and Gulf Coast regions.
The Company also purchases reserves (priority rights to future
delivery of oil and gas) through its Volumetric Production
Payment (VPP) program. For more information on KCS Energy, Inc.,
please visit the Company's web site at http://www.kcsenergy.com


LOEWS CINEPLEX: Schwartz & Winnick Seen As Top Bidders for Assets
-----------------------------------------------------------------
Canadian billionaire Gerald Schwartz and Los Angeles-based
financier Gary Winnick have emerged as front-runners in a race to
buy struggling Loews Cineplex Entertainment Corp. and are
negotiating to take control of North America's second-largest
theater circuit in a deal that could be worth more than $800
million, according to the Hollywood Reporter.

Schwartz and Winnick are the front-runners, but Loews Cineplex is
conducting still-unresolved discussions with several other
possible investors. Loews Cineplex executives declined to
comment. Sources familiar with the negotiations said there is, as
yet, no agreement but said the Schwartz-Winnick combination is
the leading contender to acquire the 2,790-screen Loews Cineplex
chain, which has hovered on the brink of bankruptcy for months.

Any deal would likely involve a voluntary chapter 11 filing to
enable Loews Cineplex to reorganize its finances. The company
moved a step closer to bankruptcy last week when its bank lenders
blocked a $13.3 million public-debt payment because the chain
failed to meet a fifth deadline to comply with conditions on its
$1 billion credit facility. (ABI World, February 9, 2001)


LOGOATHLETIC INC.: Seeks Court's Nod To Sell Assets To Reebok
-------------------------------------------------------------
LogoAthletic Inc. is asking a bankruptcy court to authorize the
sale of nearly all its assets to Reebok International Ltd.,
subject to higher and better offers at an auction. A hearing on
the auction procedures is scheduled tomorrow (Wednesday) before
the U.S. Bankruptcy Court in Wilmington, Del. Objections are due
today (Tuesday). Under the agreement, Reebok would pay $13.8
million plus 100 percent of the cost of inventory currently in
transit. This would include inventory that hasn't been shipped,
but which the company expects to deliver. (ABI World, February 9,
2001)


LTV CORPORATION: Paying Critical Vendors And Service Providers
--------------------------------------------------------------
By Order, Judge Bodoh authorized The LTV Corporation, in their
sole discretion, to pay critical vendor claims on the terms and
conditions described in the Motion. In addition, Judge Bodoh
authorized the Debtors to condition the payment of each critical
vendor claim on such terms, if any, as the Debtors deem
necessary, in their sole discretion, to ensure that the holder of
the claim will continue to supply goods or services to the
Debtors after the Petition Date on the terms and in the manner
that such goods or services were provided prior to the Petition
Date, or on such other terms as the Debtors determine are
appropriate. (LTV Bankruptcy News, Issue No. 3; Bankruptcy
Creditors' Service, Inc., 609/392-00900)


M GROUP INC: Court Approves Extension of Exclusivity To March 9
---------------------------------------------------------------
By order entered on January 29, 2001, the U.S. Bankruptcy Court,
District of Delaware, approved an extension of the exclusive
periods during which the debtors may file a plan of
reorganization and solicit acceptances thereof.

Pursuant to section 1121(d) of the Bankruptcy Code, the debtors'
exclusive filing period is extended to and including March 9,
2001 and the debtors' exclusive solicitation period is extended
to and including May 8, 2001.


MARINER POST-ACUTE: Living Centers Renews Lease For Belmont Lodge
-----------------------------------------------------------------
The Belmont Lodge Nursing Home skilled facility, which is
operated by one of Mariner Post-Acute Network, Inc.'s affiliated
debtors, Living Centers - Rocky Mountain, Inc. is currently
operating at an annualized positive EBITDA of approximately
$803,000.

Living Centers, a Nevada Corporation authorized to do business in
Colorado, has determined that continuing to lease the Facility
after the expiry of the original lease on January 31, 2001 will
provide significant economic benefit to its estate. The Debtor
believes it is highly unlikely to find a comparable lease.
Moreover, it would be impracticable to transfer the operations to
another location.

Living Centers has renegotiated for a New Lease at a daily charge
of $7.99 per available bed. The Debtor believes this compares
favorably to the current market range of rents from $3.35 to
$20.40 for similar facilities in Colorado, and the 2% annual rent
escalator under the Lease is also lower than that currently being
charged by other lessors.

Accordingly, the Debtor sought and obtained the Court's approval
for entry into the New Lease between Draw Investors, LLP, a
Colorado Limited Liability partnership, as lessor, and the Debtor
as lessee, with respect to the Facility known as Belmont Lodge
Nursing Home. (Mariner Bankruptcy News, Issue No. 12; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


OTR EXPRESS: Modifies Payment Terms with Equipment Lenders
----------------------------------------------------------
OTR Express, Inc. (Amex: OTR), a transportation and logistics
company, announced that it has reached agreement in principle
with its largest equipment lenders to modify their terms of debt
service to accommodate current business conditions. The agreement
is expected to provide some relief for the Company's cash flow
through April, giving OTR Express additional time to make changes
in operations to reduce fixed and variable costs.

The Company also announced its intention to reduce its fleet size
and payroll in the coming weeks, while focusing on offering
reliable service to OTR Express shipping customers. OTR Express
expects the reductions to eliminate more than 100 jobs, including
an undetermined number of driver-manager positions nationwide and
home-office positions in Olathe, Kansas. The Company expects some
of the jobs to be eliminated through normal attrition.

"We are taking difficult steps to address very tough business
conditions, including high fuel prices, soft demand in the
freight market, depressed values of tractors, and continued
economic uncertainty," said William P. Ward, chairman, president
and CEO. "These economic conditions have made it especially
challenging for us in light of our current capital structure.
Because we have had several unprofitable quarters, we need to
take further action. We appreciate the willingness of our
lenders, customers and employees to work with us as we work to
strengthen our core business."

According to Mr. Ward, "Our intention is to reduce the number of
trucks, consolidate some office functions, cut our reliance on
less profitable broker freight, and continue to deliver premium
service for OTR Express customers. The modified terms with our
lenders also will allow us to dispose of some trucks, reducing
fixed costs, a goal we previously announced."

The Company said it has agreed to provide additional collateral
to lenders in return for the modified payment terms and other
changes. The Company noted that it may be considered in technical
default on certain obligations, as previously disclosed, and
there is no assurance, going forward, that the Company will be
able to meet the terms of its financing agreements or receive
waivers on loan covenant violations if and when they arise. The
loan modification agreements with the Company's equipment lenders
are subject to final documentation and there can be no assurance
that a definitive agreement will be reached.

OTR Express, Inc., headquartered in Olathe, Kansas, is a dry van
truckload carrier and logistics company. The common stock is
traded on the American Stock Exchange under the symbol OTR.  For
further information, contact Steven W. Ruben, chief financial
officer, OTR Express, at (913) 829-1616, extension 3102, or visit
www.otrx.com.


PAYLESS CASHWAYS: Availability Under Revolver Dangerously Low
-------------------------------------------------------------
Payless Cashways (Kansas City, MO), F&D Reports observes, has
"seasonally expanded" borrowing availability under its existing
$260 million revolving credit facility by 5.6%, or approximately
$15 million, for a six-month time period. An additional
participation by Hilco Capital, LP will support the 5.6% advance
rate increase through July 31, 2001. At the close of the third
quarter ended August 26, 2000, availability under the revolver
was dangerously low at $5.3 million.


PENN OCTANE: Restructures Promissory Note Obligations
-----------------------------------------------------
Penn Octane Corporation (NASDAQ SmallCap market: POCC)reported
that the Company had successfully restructured $5,409,000 of the
$5,654,000 in principal amount of its promissory notes which were
originally due on December 15, 2000 to provide for a new maturity
date of December 15, 2001 (subject to earlier repayment under
certain specified circumstances).

Those notes which were not restructured have been repaid by the
Company. In connection with the restructuring of the promissory
notes, the Company is required to pay additional interest, issue
additional warrants, provide collateral to secure the Company's
repayment obligations under the restructured promissory notes
(including a security interest in substantially all of the
Company's assets, and, until such security interest is granted
and perfected, a pledge by the Company's President of 2,000,000
shares of common stock of the Company owned by the President),
register the shares to be acquired upon exercise of the newly
issued warrants under the Securities Act of 1933, as amended, and
reduce the exercise prices and extend the expiration dates of the
warrants that were issued to the holders of the notes in
connection with their original issuance.

Contemporaneously with the aforementioned restructuring, the
Company also completed a private placement of $991,000 in
principal amount of its promissory notes on similar terms.


PILLOWTEX CORP.: Says Schedules Can Be Completed By Feb. 23
-----------------------------------------------------------
William H. Sudell, Jr., Esq., at Morris, Nichols, Arsht & Tunnell
in Delaware responded to an objection by the United States
Trustee regarding the extension of time requested and obtained by
Pillowtex Corporation to file their Statement of Financial
Affairs and Schedules, and now advises Judge that the Debtors'
Schedules and Statements should be filed by February 23, 2001.

The Debtors had filed a first-day motion requesting a 105-day
extension to file their schedule of assets and liabilities,
schedule of current income and expenditures, executory contracts
and unexpired leases; and statement of financial affairs.

The date of March 14, 2001 was the deadline for the filing of the
Schedules and Statements granted by Judge Robinson based on this
request. However, Mr. Sudell advised Judge Robinson that before
the first-day hearings Debtors' counsel met with the United
States Trustee's counsel to discuss the Debtors' first-day
motions. They agreed that with respect to the motion for
extension of time to file schedules and statements that Debtors
would initially ask for a 30- day extension subject to a further
extension as would be agreed upon.

The Debtors engaged KPMG LLP and Logan & Co., Inc., to assist
them in completing their schedules and statements and have been
working full- time along with Debtors' personnel to complete the
schedules and statements.

He said that the additional three weeks in February are necessary
to:

      (a) complete the review and entry of data relating to
Debtors' thousands of contracts;

      (b) review initial compilation;

      (c) finalize the schedules and statements; and

      (d) properly reconcile the issues that will arise in
connection with such statements and schedules.

Mr. Sudell told Judge Robinson that the Debtors can finish their
schedules and statements by February 23, 2001, a month earlier
than what was estimated in the first day motion and that in fact
the collection and initial reconciliation of information will be
complete by end of January except for the schedule of executory
contracts and unexpired leases.  (Pillowtex Bankruptcy News,
Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900)


POCKET COMMUNICATIONS: Files Amended Joint Disclosure Statement
---------------------------------------------------------------
A fourth amended joint disclosure statement and a fourth amended
joint plan of reorganization under Chapter 11 was filed by Pocket
Communications, Inc., DCR, PCS, Inc., Siemens Information and
Communication Networks, Inc., Ericsson, Inc. and Pacific Eagle
Investments, Ltd., et al. on January 16, 2001.

The hearing to consider approval of the fourth Amended Disclosure
Statement shall be held at the U.S. Bankruptcy Court, Baltimore
Maryland, on February 26, 2001 at 2:00 PM.

February 22, 2001 is fixed as the last day for filing and serving
written objections to the Disclosure Statement.


QUAD SYSTEMS: Creditors' Meeting To Be Held On March 13
-------------------------------------------------------
A chapter 11 bankruptcy case concerning the debtor corporation,
Quad Systems Corporation, was filed on December 18, 2000.
Attorney for the debtor is James M. Matour, One Logan Square,
27th Floor, Philadelphia, PA. A meeting of creditors will be held
on March 13, 2001 at 2:00 PM.


QUENTRA NETWORKS, INC: Meeting of Creditors Set On March 5
----------------------------------------------------------
A chapter 11 bankruptcy case concerning the debtor, Quentra
Networks, Inc. was filed on December 14, 2000. The debtor is
represented by David Gould, of the law firm McDermott, Will &
Emery, Los Angeles, Calif. A meeting of creditors will be held on
March 5, 2001 at 9:45 AM, 221 N. Figueroa St., Suite 104, Los
Angeles, CA.


RBX CORP.: Bankruptcy Case Moved From Delaware to Roanoke
---------------------------------------------------------
U.S. Bankruptcy Judge Peter Walsh granted a motion to move the
chapter 11 bankruptcy proceedings of RBX Corp. from the U.S.
Bankruptcy Court in Wilmington, Del., to Roanoke, Va., according
to the Roanoke Times & World News. Judge William Stone is
scheduled to hear the case in the near future.

RBX Corp. opposed the change of venue from the Delaware district,
but the judge ruled in favor of the City of Bedford, Va., which
requested the change. "Bedford would be perhaps the only creditor
convenienced by such a transfer," argued an attorney for the
corporation. "Bedford is the only Virginia-based creditor among
the debtors' 35 largest unsecured creditors." The company also
argued "each of the debtors [including RBX and its subsidiaries]
is, and always has been, a Delaware corporation."

Chip Magee, a Roanoke lawyer, said that the change of venue
should be positive for area residents with ties to Rubatex and
RBX. "I think it's certainly important that the case gets moved
to the Western District because it affects the jobs and the
people in this area," he said. Joel Weiden, a spokesman for RBX
Corp., said the change of venue should not affect significantly
the company's reorganization efforts.

RBX Corp. filed for chapter 11 in Delaware last December. Parent
company Rubatex Corp., with headquarters in Roanoke and a
manufacturing plant in Bedford, is said to be Bedford's third-
largest employer. RBX manufactures closed cell foam and custom
mixed rubber compounds. RBX Corp. reported consolidated book
assets of about $134 million and consolidated liabilities of more
than $296 million. The corporation has attributed its financial
problems to long-term debt, sales decreases, foreign competition,
and labor strife at its Bedford plant. (ABI World, February 9,
2001)


SAFETY-KLEEN: Seeks To Cancel/Replace Reliance Insurance Policies
-----------------------------------------------------------------
Safety-Kleen Corp. requested approval of their entry into an
agreement with Reliance Insurance Company of Illinois for
cancellation of certain insurance policies. Upon this
cancellation, the Debtors will replace the policies with policies
issued by Indian Harbor Insurance Company, an indirect subsidiary
of XL Capital.

The Debtors, as owners and operators of hazardous waste
management facilities, are subject to certain financial assurance
requirements established under the federal and state
environmental statutes and regulations. The applicable
regulations provide several mechanisms from which the Debtors may
choose in order to establish Compliant Financial Assurance,
including corporate guaranties, letters of credit, surety bonds
and insurance products.

The Debtors previously obtained Complaint Financial Assurance
through a combination of two such mechanisms: surety bonds and
insurance products. Through the Reliance Policies, Reliance
provided certain closure and post-closure coverages required
under the applicable statutory financial assurance regimes.

In response to concerns voiced by the Environmental Protection
Agency and various states regarding the financial health and
stability of Reliance, the Debtors have agreed to seek proposals
for replacement of the Reliance Policies. Such agreement was
embodied in paragraph 83 of the consent agreement entered into by
certain debtors and EPA, which was specifically approved by
earlier Order of the Court.

Consistent with this obligation, and after negotiation with
several potential insurers, the Debtors have come to an agreement
with Indian Harbor, which has agreed to write policies that
provide the same closure and post-closure, coverage previously
provided by Reliance. Indian Harbor has agreed to provide such
coverage on substantially the same terms as did Reliance,
effective as of October 15, 2000.

Upon cancellation of the Reliance Policies, Reliance has agreed
to provide a credit to the underwriter for any remaining unearned
premiums with respect to the Reliance Policies. These unearned
premiums will then be credited against the Debtors, premium
obligation to Indian Harbor for the Indian Harbor Policies,
substantially funding the Indian Harbor Policies.

All other terms and conditions governing the Indian Harbor
Policies are the same as that of the Reliance Policies. The
Indian Harbor Policies terminate on November 17, 2002.

Indian Harbor has agreed to accept, as security for the Debtors'
performance under the Indian Harbor Policies, letters of credit
issued by The Toronto Dominion Bank on behalf of the Debtors and
currently held by Reliance as security for the Debtors'
performance under the Reliance Policies. In connection with the
cancellation of the Reliance Policies and commencement of the
Indian Harbor Policies, Reliance has agreed to assign such
letters of credit to Indian Harbor. Apart from the transfer of
these letters of credit, the Debtors are not required to post
additional security under the Indian Harbor Policies.

From the outset of these cases, the Debtors have acknowledged the
need to obtain and maintain Compliant Financial Assurance.
Compliance with applicable environmental statutes and
regulations, including financial assurance requirements, is a
vital function of the Debtors, business operations. Indeed, a
hallmark of the Debtors' marketing message is the safe
environmentally compliant disposal of waste. Without demonstrated
Compliant Financial Assurance, the Debtors' efforts to attract
new customers and maintain ongoing customer relationships will be
substantially impeded.

EPA and various states have expressed concern regarding the
financial health of Reliance. That concern is reflected in the
requirements instituted in the Consent Agreement, which require
the Debtors to actively seek a replacement insurer for the
coverages provided by Reliance.

In replacing the Reliance Policies with the Indian Harbor
Policies, the Debtors are retaining the same required coverages,
thereby ensuring the maintenance of Compliant Financial
Assurance. In contrast to Reliance, however, Indian Harbor has an
A+ (Superior) rating from A.M. Best Company, Inc., as does its
immediate parent, NAC Reinsurance Corporation, and its ultimate
parent corporation, XL Capital Ltd., a Cayman Island Corporation.

Replacement of the Reliance Policies with Indian Harbor Policies
ensures that a substantial portion of the Debtors' Compliant
Financial Assurance requirements will be satisfied for the
duration of these cases and sends a strong, positive message to
the competitors and customers of the Debtors regarding the
Debtors, financial health and reorganization prospects.

Moreover, the above will be accomplished without substantial
involvement of the Debtors' resources or liquidity. In essence,
the transfer of the unearned premiums under the Reliance Policies
substantially fund the Indian Harbor Policies. Finally, Indian
Harbor's acceptance of the security currently held by Reliance
obviates the need for the Debtors to encumber current assets of
the estate.

The Debtors believe that obtaining the replacement policies from
Indian Harbor and canceling the Reliance Policies is an act that
is within the Debtors' ordinary course of business and does not
require Court approval. The Debtors are required to acquire or
maintain appropriate insurance for the estates. In replacing the
Reliance Policies with substantially identical Indian Harbor
Policies, the Debtors are fulfilling that requirement and
substituting for the present insurer. Such action is in the best
interests of the Debtors, these estates, the creditors, and all
parties in interest. (Safety-Kleen Bankruptcy News, Issue No. 13;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


SUN HEALTHCARE: Agrees To Modify Stay For Insured Claims
--------------------------------------------------------
Sun Healthcare Group, Inc. agreed to lifting the automatic stay
to permit the parties to prosecute and defend the State Court
Actions filed by:

      * Davis Jackson Cobb in connection with his allegedly
sustained injuries as a result of services allegedly performed at
SunBridge Healthcare Corporation d/b/a SunBridge Care and
Rehabilitation for Sherman;

      * Victor Brancacci in connection with his allegedly
sustained injuries as a result of services allegedly performed at
Mediplex Management of Port St. Lucie d/b/a Savannas Hospital;

      * Gilbert Bass, Executor of the Estate of Jeanne Cohen in
connection with the decedent's allegedly sustained injuries as a
result of services allegedly performed at Randolph Crossing
Nursing Center;

      * Mary Simmons as next of friend to Bessie Buell in
connection with Bessie Buell's allegedly sustained injuries as a
result of services allegedly performed at SunBridge Healthcare
Corporation d/b/a SunBridge Post Oak Care and Rehabilitation;

      * Tola Hendrix in connection with her allegedly sustained
injuries as a result of services allegedly performed at SunBridge
Healthcare Corporation d/b/a SunBridge Care and Rehabilitation
for Whitewright;

      * Alta Morris in connection with her allegedly sustained
injuries as a result of services allegedly performed at SunBridge
Healthcare Corporation d/b/a SunBridge Care and Rehabilitation
for Whitewright;

      * Arthur Dillon in connection with his allegedly sustained
injuries as a result of services allegedly performed at Southside
Health Care Center, Inc. d/b/a SunBridge Southside Care and
Rehabilitation;

In each of the agreement between the Debtors and the claimants,
the parties agreed that the claimant may enforce or execute upon
any settlement or judgment or disposition in the State Court
Action only to the extent such claims are covered by proceeds
from any applicable Sun liability insurance policies.

Except as specifically provided in the stipulation, the Plaintiff
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.

Plaintiff waives any and all claims for recovery against the
Debtor Defendant and its present or former employees, officers
and directors, any person or entity indemnified by the Debtors,
and the Debtors' insurers.

Plaintiff further specifically agrees that any settlement of the
Underlying Action will include a general release of all claims
against the Debtors, their current and former employees, their
current and former officers and directors, their insurers, and
any person or entity indemnified by the Debtors. The Debtors
agree that any settlement of the Underlying Action will, include
a general release of the Plaintiff.

Plaintiff agreed not to name as a defendant and, if already so
named, to dismiss with prejudice from the State Court any of
Debtors' current and former employees, current and former
officers and directors, and any person or entity indemnified by
the Debtors or listed as an additional insured under any of the
Debtors' liability policies. (Sun Healthcare Bankruptcy News,
Issue No. 18; Bankruptcy Creditors' Service, Inc., 609/392-0900)


TBS SHIPPING: Completes Chapter 11 Reorganization
-------------------------------------------------
TBS Shipping International Limited completed its pre-negotiated
chapter 11 reorganization case providing for the restructuring of
its 10% First Preferred Ship Mortgage Notes Due 2005.

The restructuring is the culmination of a previously announced
agreement with holders of a substantial majority in principal
amount of the Notes. Highlights of the reorganization include the
issuance to existing noteholders of $51.25 million of amended and
restated First Preferred Ship Mortgage Notes Due 2008 (with
enhanced collateral and guarantor coverage) in addition to
preferred stock, common stock and common stock warrants. The
final form of the restructuring was approved by a U.S. Bankruptcy
Court on February 7, 2001.

The case, as well as a companion case in Bermuda (which was
approved by the Supreme Court of Bermuda on February 7, 2001),
covers the Company, its parent and only its vessel-owning direct
and indirect subsidiaries, none of which are involved in the
operations of TBS Pacific Liner, Ltd., TBS Latin America Liner
Ltd., and TBS North America Liner, Ltd. (the "Liner Companies").
The restructuring of the Notes did not negatively impact the
business of the Liner Companies, which continues on a normal
basis. Unsecured creditors were not affected by the restructuring
and were paid in full in the ordinary course.


UNITED HOCKEY: Files for Chapter 11 Protection in New York
----------------------------------------------------------
United Hockey League's Mohawk Valley Prowlers (Utica, NY) filed
Chapter 11 in the Northern District of New York on February 2,
2001. Players have announced they will not continue the season if
they do not receive back wages and the housing allowances they
are owed. Team captain Nic Beaudoin was scheduled to meet with
Prowlers president Jack Tompkins on February 9. (New Generation
Research, February 9, 2001)


VENCOR INC: Settles SERP and Other Claims with Michael Barr
-----------------------------------------------------------
Judge Walrath has given her stamp of approval for the Stipulation
between Michael R. Barr and Vencor, Inc. with respect to the six
proofs of claim filed by Mr. Barr on December 30, 1999, and an
amended proof of claim filed by him on January 6, 2000, as
previously reported at entry [00243].

The Stipulation provides that:

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

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

         (b) In respect of Barr's Old Preferred Stock (as defined
             in the Second Amended Plan), Barr will be given an
             allowed Put Right (as defined in the Second Amended
             Plan) which shall receive the treatment provided in
             paragraph 5.08 of the Plan, under which monetary
             damages in respect of Barr's allowed Put Right shall
             be canceled in exchange for the cancellation of all
             obligations of Barr arising under the Nontransferable
             Full Recourse Note in the original principal amount
             of $1,296,000 dated April 30, 1998 (the Barr
             Preferred Equity Interest Loan).

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

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

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

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

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

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

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

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

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

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

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

     (11) The Debtor Releasors release, discharge and acquit the
Barr Releasees from all claims, causes of action liabilities,
etc. (Vencor Bankruptcy News, Issue No. 24; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


VLASIC FOODS: Court Okays Use of Prepetition Business Forms
-----------------------------------------------------------
At Vlasic Foods International, Inc.'s behest, Judge Robinson
granted Vlasic authority to continue using their existing
supplies of business forms (including, but not limited to,
letterhead, purchase orders, invoices, contracts and checks),
without the need to follow the United States Trustee's operating
guideline that all business forms used by a chapter 11 debtor
bear a "debtor-in-possession" legend. Parties doing business with
the Debtors undoubtedly will be aware, Judge Robinson observed,
as a result of the size and notoriety of the Debtors and these
cases, of the Debtors' status as chapter 11 debtors-in-
possession. Changing Business Forms immediately would be
expensive and burdensome to the Debtors estates and extremely
disruptive to the Debtors' business operations. Accordingly,
until existing stock is depleted, the Debtors may continue
using their prepetition business forms. (Vlasic Foods Bankruptcy
News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


WSR CORP: Court Okays Extension Of Exclusive Periods to April 9
---------------------------------------------------------------
On February 1, 2001, the U.S. Bankruptcy Court, District of
Delaware, entered an order, granting an extension of the
exclusive period within which the debtors, WSR Corporation,
R&S/Liquidating Company, may file a plan or plans of
reorganization to and including April 9, 2001 and the exclusive
period within which the debtors may solicit acceptances of any
such plan through and including June 8, 2001.


XEROX CORP.: Fitch Downgrades Senior Debt Rating To BB
------------------------------------------------------
Fitch has downgraded Xerox Corp. and its subsidiaries' (see
below) senior unsecured debt rating to `BB' from `BBB-' and the
company's U.S. commercial paper (CP) program to `B' from `F3'.
The company's ratings are removed from Rating Watch Negative. The
Rating Outlook is Stable.

The rating actions reflect the company's declining financial
performance, limited financial flexibility, execution risk
surrounding the company's operating strategy and significant cost
reduction programs, and the prospect of overall weaker economic
conditions. The outlook reflects the company's improved liquidity
situation, which provides some cushion for operational shortfalls
as the company continues to execute on its turnaround strategy.
However, significant challenges remain in executing these plans.

Fitch does recognize the company's improved near-term liquidity,
the progress made in asset dispositions and its $1 billion cost
cutting program, its strong, technologically competitive product
line and business position, its effort to improve its working
capital management, and the company's commitment to continue its
turnaround program, including exiting the financing business,
which should benefit long-term cash flow.

Xerox reported a financial loss for the fourth quarter of 2000,
historically its strongest quarter, as gross margins and
operating expenses continued to be pressured. The company
experienced strong competition and pricing pressures as well as
lingering sales force productivity issues, resulting from the
1999 realignment from a geographic perspective to an industry
solutions focus. However, management has stated that sales force
turnover has decreased the last two quarters and 96% of all sales
territories have been filled. Ongoing customer administrative
issues as well as higher bad debt provisions for some of its
Latin America operations, including Mexico, continue to affect
the company. The Securities and Exchange Commission investigation
into Xerox's Mexican accounting issues and other accounting
matters is ongoing and remains a concern.

Credit protection measures for 2000 show Xerox's leverage,
measured by total debt (including the financing segment) to
EBITDA, increasing to greater than 10 times (x) compared to 4.6x
at Dec. 31, 1999. Similarly, Xerox's core net leverage (defined
as core non-financing debt minus cash divided by core EBITDA)
also increased for the year to more than 3.7x from 1.5x at year-
end 1999. The company's total and core leverage has been trending
upward since 1997. For the same time period, Xerox's interest
coverage ratio (including the financing segment) declined to less
than 2.0x from 4.2x at Dec. 31, 1999. The company's core interest
coverage (defined as core EBITDA divided by core interest
expense) is estimated to be less than 3.5x times at the end of
2000, compared to 8.8x at the end of 1999. Due to seasonally weak
results expected for the first half of 2001, Fitch anticipates
overall and core credit protection measures will continue to be
challenged for at least the next two quarters, despite the
benefits of potential asset dispositions and the anticipated cost
reductions from the company's ongoing restructuring programs.

The removal of the Rating Watch Negative is due to the
improvement in the company's near-term liquidity. A dividend
reduction of 75% resulting in annual cash savings of $400
million, the sale of its Xerox China operations for $670 million
(including the assumption of $120 million in debt), $435 million
in financing from General Electric Capital Corp. (GECC) secured
by a portfolio of Xerox lease receivables in the United Kingdom,
and the complete drawdown of its $7.0 billion committed bank
revolver has generated a cash balance of more than $1.7 billion
at year-end 2000. The company's revolver expires in October 2002
and Xerox is currently in compliance with all covenants. However,
based on preliminary fourth quarter financial results, the
cushion for the company's tangible net worth covenant has
declined from the $1.1 billion at the end of the third quarter of
2000. Xerox is expected to complete the sale of half of its stake
in Fuji Xerox in the first quarter, which should strengthen the
cushion and the company's liquidity. The company is also actively
working on the disposition of additional assets as part of its
turnaround strategy, including the sale of Xerox Engineering
Systems and certain manufacturing assets, equity investments in
Xerox PARC and the company's ink-jet division, and an alliance
for the company's European paper division. The ratings
incorporate the expectations that asset dispositions continue on
schedule, Xerox completes its restructuring programs without
interruption, and core EBITDA shows sequential improvement
(especially in the second half of 2001).

Fitch believes Xerox has sufficient liquidity for the near term
and the company has made strides in managing its working capital.
This improvement is expected to continue and should assist the
company in requiring less cash usage for the first half of 2001.
Approximately $2.6 billion of maturities are due in 2001, with
$500 million due in the first quarter and $900 million due in the
second quarter. However, with limited access to capital markets
Xerox is dependent on asset sales, securitizations, secured
loans, and operating cash flow to fund operations. Given this
limited financial flexibility, it is crucial that Xerox execute
its cost cutting programs in order to return to profitability.

In addition to Xerox Corp., the ratings affected are: Xerox
Credit Corp. and Xerox Capital (Europe) plc's rated senior debt,
Xerox Corp.'s $7.0 billion CP program, which is shared with Xerox
Credit Corp. and Xerox Capital (Europe) plc, and Xerox Capital de
Mexico, S.A. de C.V.'s $200 million U.S. CP program.

                           *********

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

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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
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Group, Inc., Washington, DC USA. Debra Brennan, Yvonne L.
Metzler, Aileen Quijano and Peter A. Chapman, Editors.

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

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