TCR_Public/010227.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 27, 2001, Vol. 5, No. 40

                            Headlines

A-1 SPECIALTY: SouthTrust Wins Contempt Ruling against Principals
AMES DEPARTMENT: Inking New $800MM Financing Pact with GE Capital
ARMSTRONG: Asbestos Committee Balks at Lazard's Employment
BK ENTERTAINMENT: Case Summary & 20 Largest Unsecured Creditors
BLUELIGHT.COM: Kmart Says Put Up or Shut Down

BROCKER TECHNOLOGY: Taps PwC to Review Accounting Irregularities
CROUSE HOSPITAL: Files Chapter 11 Petition in New York
EDWARDS THEATRES: Reviews Anschutz & Oaktree Capital Proposal
eFANSHOP: e-Tailer Closes Doors
EQUALNET: CCC GlobalCom To Acquire Selected Assets

FIRST ALLIANCE: Court Disallows Borrowers' Class Proofs of Claim
FIRST DATA: Plans to Sell $525MM of New Notes to Refinance Debt
FRUIT OF THE LOOM: Seeks Court's Nod To Sell Equipment To Gibbs
GREAT BASIN: Agrees To Sell Assets To Volvo Truck For $40 Million
HARNISCHFEGER: Beloit Seeks To Reject Proctor & Gamble Agreement

HEILIG-MEYERS: Fitch Slashes Receivable Securitization Ratings
HOMEPLACE: DJM Asset Management to Dispose of 38 Store Leases
ICG COMMUNICATIONS: Moves to Hire Arthur Andersen as Consultants
IMPERIAL SUGAR: Wells Fargo Asks for Protection of Set-Off Right
INTEGRATED HEALTH: Rejects 7 Rotech Real Property Leases

INTERNATIONAL MENU: Selling Operating Subsidiaries After Default
INVESTAMERICA: Looks for New Funding to Continue as Going Concern
LEGEND AIRLINES: FAA Nixes Auction of Operating Certificate
LERNOUT & HAUSPIE: AllVoice Pursues Patent Infringement Lawsuit
LETSBUYIT.COM: Says It Has Enough Cash to Reach Break-Even

LOEWEN GROUP: Selling Macer-Hall Funeral Home For $550,000
LUCENT TECHNOLOGIES: Secures New $6.5 Billion Credit Facilities
NORD RESOURCES: Files Chapter 11 Petition in Albuquerque
OMEGA HEALTHCARE: S&P Rates Preferred Stock in Default
OWENS CORNING: Wants More Time To Decide On New York Lease

PEAPOD.COM: Foresees Cash Shortfall By Year's End
PETMED EXPRESS: Plans Asset Sales to Obtain More Funds
PILLOWTEX: Creditors' Committee Hires Akin Gump as Lead Counsel
PLAYDIUM ENTERTAINMENT: Applies for CCAA Protection in Ontario
PRECEPT BUSINESS: Files for Chapter 11 Protection in N.D. Texas

RITE AID: AdvancePCS Sale Proceeds Approach $300 Million Mark
SAFETY-KLEEN: Enters Into Marketing Agreement With SystemOne
SMITH CORONA: Court Approves First Amended Disclosure Statement
STAMPEDE WORLDWIDE: Specialized Solutions Picks-Up a Piece
SUNTERRA CORP.: Fitch Places Receivable-Backed Notes on Watch

VISTA EYECARE: Inks Deal to Sell Freestanding Centers & N.Y. Lab
WATERLINK INC.: Working to Restructure Senior Credit Facility
WHEELING-PITTSBURGH: Makes Bid to Assume MPS Engineering Contract
YORK FUNDING: Moody's Downgrades Securitized Notes to Junk

                            *********

A-1 SPECIALTY: SouthTrust Wins Contempt Ruling against Principals
-----------------------------------------------------------------
SouthTrust Bank announced that it had successfully argued for the
imposition of contempt charges and sanctions against the
principals of A-1 Specialty Gasolines, a chapter 11 debtor, for
their repeated flagrant violations of both applicable bankruptcy
law and orders of the U.S. Bankruptcy Court prohibiting it from
using cash on which SouthTrust had a lien.

A-1 Specialty Gasolines, a large supplier of fuels in West Palm
Beach, Fla., filed for chapter 11 protection last year. The case
was later converted to chapter 7.

"The principals repeatedly used monies which secured the debtor's
obligations to SouthTrust prompting us to take the highly unusual
step of seeking to hold the debtor's principals in contempt,"
said SouthTrust Bank attorney Scott L. Baena.

After conducting a two-part trial, Judge Steven Friedman found
the debtor's principals to be in contempt of court and entered an
order determining that the bank was entitled to recover $590,979
from the principals. As a result, Judge Friedman has jurisdiction
to incarcerate the principals until they have paid the award to
SouthTrust. (ABI World, February 23, 2001)


AMES DEPARTMENT: Inking New $800MM Financing Pact with GE Capital
-----------------------------------------------------------------
Ames Department Stores, Inc., has been working to finalize a
commitment for a three-year, $800.0 million senior secured
financing agreement with GE Capital. In a recent conversation
with the Company, Analysts at F&D Reports confirmed that the
agreement is expected to be completed this week. This new
facility replaces Ames' existing $650.0 million senior credit
facility (under which GE Capital is a lender) led by Bank of
America.


ARMSTRONG: Asbestos Committee Balks at Lazard's Employment
----------------------------------------------------------
The Official Committee of Asbestos Claimants objected to the
employment of Lazard Freres & Co., LLC, as investment bankers to
these estates.

Lazard claims entitlement to a Sales Fee upon the completion of
certain contemplated transactions, and a Restructuring Fee of
$9.0 million upon completion of other defined transactions, are
payments in addition to the $200,000 Monthly Financial Advisory
Fee. While Lazard states that the Monthly Financial Fee will be
credited in full toward the Restructuring Fee, the Committee
believes this monthly fee should be credited against either the
Sales Fee or the Restructuring Fee, as applicable, and asked that
debtors Armstrong Holdings, Inc. and Lazard affirm that intent.

Further, neither the Sales Fee nor the Restructuring Fee should
be paid to Lazard without prior application and order, in the
same manner as every other professional employed by this estate.

Elihu Inselbuch, Esq., and Peter Van N. Lockwood, Esq., at Caplin
& Drysdale, Chartered, told Judge Farnan that the Asbestos
Committee thinks any Order approving Lazard's employment should
contain express language embodying these restrictions and
requirements. (Armstrong Bankruptcy News, Issue No. 4; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


BK ENTERTAINMENT: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: BK Entertainment Inc.
              f/k/a Stuart Entertainment Inc.
              8200 Normandale Boulevard
              Suite 400
              Minneapolis, MN 55437

Debtor affiliates filing separate chapter 11 petitions:

              Bingo Systems and Supplies, Inc.
              Video King Gaming Systems, Inc.
              Western Bingo Supplies, Inc.

Type of Business: Manufactures bingo paper, pulltabs, and related
                   electronic gaming equipment and supplies, with
                   facilities and operations in the U.S., Canada
                   and Mexico.

Chapter 11 Petition Date: February 16, 2001

Court: District of Minnesota

Bankruptcy Case Nos.: 01-40638 through 01-40641

Judge: Nancy C. Dreher

Debtors' Counsel: Clinton E. Cutler, Esq.
                   Fredrikson & Byron, P.A.
                   1100 International Centre
                   900 Second Avenue South
                   Minneapolis, MN 55402
                   612-347-7000

Total Assets: $126,897,472

Total Debts: $82,980,791

Debtor's 20 Largest Unsecured Creditors:

Entity                        Nature Of Claim     Claim Amount
------                        ---------------     ------------
Wasserstein Perella & Co.     Goods and/or        $1,500,000
K. Devecchis                  services
31 West 52nd Street
New York, NY 10019

Kyle Fields                   Notes payable         $593,262
1042 Upland Drive
El Dorado Hills, CA 95762
(916)363-5591

Aurthur Andersen LLP          Goods and/or          $530,840
Michael Altschaefl            services
100 East Wisconsin Avenue
Suite 1900
Milwaukee, WI 53202
(414)283-3235

Squire Sanders & Dempsey LLP  Goods and/or          $466,167
Craig Hanson
Two Renaissance Square
Phoenix, AZ 85004
(602)528-4000

Melange Computer Services     Notes Payable         $322,904
Bill Wai
808 Century Boulevard
Suite 100
Lansing, MI 48917-9231
(800)572-1497

Grupo Pipsamex                Notes Payable         $244,002

QAD Inc.                      Notes Payable         $224,364

Milbank Tweed Hadley          Goods and/or          $195,000
                               services

Banner Fibreboard             Notes Payable         $182,860

Potlach Corporation           Notes Payable         $136,490

United Parcel Service         Goods and/or          $116,467
                               services

US Printing Ink               Notes Payable         $116,224

Deloitte & Touche LLP         Goods and/or          $105,260
                               services

Colle & McVoy Incorporated    Goods and/or           $93,184
                               services

Cunningham Group              Notes Payable          $90,460

Maria Antonieta Fitzmaurice   Notes Payable          $78,733

Litho Development & Research  Notes Payable          $68,870

American Express              Goods and/or           $44,665
                               services

Welsh Companies LLC                                  $35,727

Deloitte & Touche             Goods and/or           $35,677
                               services


BLUELIGHT.COM: Kmart Says Put Up or Shut Down
---------------------------------------------
Mark H. Goldstein, president & CEO of BlueLight.com, which is 59%
owned by Kmart (Troy, MI), recently mandated that if the e-tailer
was not "operational break-even" by the fourth quarter ending
January 2002, "it's just not going to happen," according to an
article appearing in an F&D Reports trade publication last wee.
Mr. Goldstein also noted that in a worst-case scenario, the unit
would be absorbed by Kmart if it fails to meet its goals, which
include generating $100 million in annual sales. BlueLight.com
has also abandoned any thoughts of going public during 2001, but
may try to do so in 2002.


BROCKER TECHNOLOGY: Taps PwC to Review Accounting Irregularities
----------------------------------------------------------------
Brocker Technology Group Ltd. (Nasdaq:BTGL, TSE:BKI,
http://www.brockergroup.com),is undertaking a corporate-wide
restructuring and has appointed PricewaterhouseCoopers (PwC) to
review the accounting irregularities uncovered within the
Company's Australian distribution subsidiary formerly known as
Sealcorp (Australia) Pty Ltd.

Brocker's internal audit activities have determined that there
has been improper application of accounting procedures in the
Australian operation, resulting in the over-statement of net
income (loss), by an amount estimated by management to be
approximately CDN$4.5 million. This estimate is subject to change
as PricewaterhouseCoopers proceeds through the review process.

The improper invoicing resulted in a shortfall of about $1.2
million in the lending facility collateralized by the invoices.
Brocker rectified this shortfall earlier in the week, and the
lending facility remains in place. After allowing for these
adjustments, management estimates that Brocker's shareholders'
equity will remain in excess of CDN$21 million.

Although Brocker is confident that the irregularities are
confined to the Australian subsidiary, PwC will conduct a review
of the Group accounts for corporate governance and bank security
purposes. This review is expected to be completed within two
weeks.

"We are taking action immediately, rather than waiting for the
investigation to be completed," said CEO, Richard Justice. "The
company has taken appropriate disciplinary action, immediately
terminating the employment of the manager of the Australian
operation. We are also reviewing all aspects of our business and
will take all appropriate actions suggested by that review."

The focus of Brocker's restructuring is to eliminate non-
performing businesses by March 31, 2001 and reduce costs
throughout the remaining businesses, with the goal of rapidly
reaching positive cash flow.

The Australian distribution business will be wound down, while
the Professional Services and Datec operations in Australia
(which are under separate management in separate companies) will
continue. As part of cost cutting, Brocker's staff will be
reduced from a high last year of about 250 to about 90 positions.
This will reduce Brocker's staffing costs by about CDN$6.8
million per year.

Thirty positions have already been eliminated as part of the
strategic review and restructuring, begun late last year. The
elimination of non-performing businesses may result in the write
down of some or all of the goodwill and deferred development
costs presently carried on Brocker's balance sheet, and other
one-time restructuring costs.

After the restructuring is completed, Brocker will comprise four
business units: Vendor Services (distribution of wireless
products), Online Telecommunications (telco service provision);
Professional Services (e-commerce consulting and solutions); and
Datec (technology provider).

The Australian irregularities were discovered by Brocker's CFO,
Grant Hope and CEO, Richard Justice. Brocker voluntarily and
immediately brought the irregularities to the attention of Nasdaq
and the TSE, and issued a public statement on Thursday, February
15.

Trading in the common shares of Brocker has been halted on Nasdaq
and the TSE, pending the announcement of further details to be
revealed by the investigations of the audit committee and the
independent accountants.

It has not yet been determined whether previously reported
results will be affected by the accounting matters being
reviewed. Completion of the investigation by PwC may delay the
completion and release of the Corporation's December 31, 2000
financial statements. Shareholders will be kept appraised of
information concerning these matters as it becomes known.

Brocker will promptly announce the results of the independent
accountant's review once it is complete.
In other news, Brocker's Board announced the departure of Board
member Julie Clarkson. Ms. Clarkson resigned effective February
15, 2001. The Board appreciates her efforts on behalf of Brocker,
and her service on the Compensation Committee.

                About Brocker Technology Group

Brocker Technology Group Ltd. (http://www.brockergroup.com)is a
communications company focused on improving information flows by
delivering innovation and market leadership in telecommunication
services, e-commerce strategies and information management
technologies. Brocker subsidiary, Datec also provides a broad
range of IT and communications solutions to companies across the
South Pacific.


CROUSE HOSPITAL: Files Chapter 11 Petition in New York
------------------------------------------------------
Syracuse, NY based Crouse Hospital and six entities filed
February 21 for Chapter 11 bankruptcy protection from creditors
while they reorganize their finances. Crouse owes money to big-
time organizations such as Time Magazine, IBM and the Drug
Enforcement Administration in Washington, D.C. But the filing
also affects many small businesses in Central New York, including
florist shops, cleaning companies and hardware stores.

The paperwork filed in U.S. Bankruptcy Court in Utica, NY list
debts of approximately $110 million, including about $20 million
owed to suppliers. Crouse owes Upstate Medical University $1.96
million, BlueCross BlueShield of Central New York $1.23 million
and Medtronic USA of Dallas $1.14 million. (New Generation
Research, February 23, 2001)


EDWARDS THEATRES: Reviews Anschutz & Oaktree Capital Proposal
-------------------------------------------------------------
Edwards Theatres Circuit Inc. said that it is analyzing and
evaluating an investment proposal from Philip Anschutz and
Oaktree Capital that-if approved by the U.S. Bankruptcy Court-
would provide for a substantial investment in Edwards Theatres
and its affiliates, according to a press release from Irell &
Menella LLP. The Newport Beach, Calif.-based Edwards has
previously announced that it would accept terms outlined in the
letter of intent from Anschutz and Oaktree Capital regarding
their proposed movie theater chain investment as part of Edwards'
bankruptcy restructuring. (ABI World, February 23, 2001)


eFANSHOP: e-Tailer Closes Doors
-------------------------------
Online retailer eFanshop has admitted defeat little more than a
month after it said it would continue business as usual after
laying off 20 workers, according to LocalBusiness.com. Callers to
the company received a message saying that the company had closed
down. "Unfortunately, we have closed our doors and ceased all
operations," the recording said. "All open orders have been
cancelled. Thanks for your call." eFanshop's business was to help
sports-oriented web sites generate revenue by selling sports-
themed merchandise. The sites were designed to blend in with each
affiliate site's look and feel, but eFanshop operated the
technology and logistics. The sites got a cut of the revenue
generated by sales through their sites.

The Dallas-based company had only 10 employees after last month's
layoffs, but founder and Chief Executive Officer Marc Andres said
at the time that the company's existing web stores would not be
affected. News of eFanshop's demise caught some of the company's
partner sites by surprise. An executive at one of the companies,
who requested anonymity, expressed shock at learning that
eFanshop had shut down. "I just tried to connect to our [online
shop], and I can't get there," she said. "We're still a small
startup, and this is not good for us." (ABI World, February 23,
2001)


EQUALNET: CCC GlobalCom To Acquire Selected Assets
--------------------------------------------------
CCC GlobalCom Corporation (OTCBB:CCGC) said it has executed an
Asset Purchase Agreement, to acquire selected assets of Equalnet
Communications Corp. (OTCBB:ENET). Equalnet is in a Chapter 11
Bankruptcy proceeding and the completion of CCC GlobalCom's
purchase of the Equalnet assets is subject to approval of the
bankruptcy court. The assets to be acquired include: a customer
base of approximately 30,000 long distance customers, employees
and telecommunication hardware switching equipment and networks.
The operations of Equalnet will be integrated into CCC
GlobalCom's existing organization.

According to Mr. Z.A. Hakim, chairman and CEO of CCC GlobalCom
Corporation, "This asset purchase is a significant stride in the
corporation's merger and acquisition strategic plan. The plan
focuses on building an expedient revenue model through the
acquisition of domestic and international customers including the
deployment of state of the art telecommunication equipment. The
plan objective is to implement CCC GlobalCom's own Virtual
Private Telecommunications Network first in the Western
Hemisphere and globally thereafter. This acquisition, combined
with the two previous acquisitions since going public last June,
provides a fully integrated facilities-based, competitive local
exchange service provider. The acquisition specifically will add
approximately 30,000 long distance customers giving CCC GlobalCom
a customer base in all 50 States. In addition, the acquisition
includes the purchase of two Class four switches and two enhanced
(debit card) platforms from d-Tel Networks, L.L.C. to add to the
CCC GlobalCom network. The equipment will change the current
operations from a "Switchless Reseller" to a facilities-based
service provider. Equalnet is currently generating approximately
$1,400,000 in monthly revenue. CCC GlobalCom will immediately
market to the Equalnet customers a bundle of communication
services (local, long distance, etc.) and provide them with one
point of contact for all their communication needs. In achieving
this objective, operating margins are expected to be increased."

CCC GlobalCom Corporation is a telecommunications company
headquartered in Houston. The corporation is an integrated
communications provider offering a full range of communications
services to commercial and residential customers, while providing
for a single point of contact through bundled billing services.
The corporation provides its' services as a Competitive Local
Exchange Carrier (CLEC). The corporation provides local, long
distance, high speed data, Internet, paging, cellular and other
enhanced communications services in the Southwest Region of the
United States and plans to offer similar services to more than
thirty (30) U.S. markets over the next 12 months. In addition,
the corporation is finalizing certain agreements for
telecommunications services in Latin America and Indonesia. The
corporation is actively engaged in discussions, negotiations and
has executed Letters of Intent to acquire existing
telecommunication service providers, customer bases and major
telecommunication switching equipment to be deployed worldwide.


FIRST ALLIANCE: Court Disallows Borrowers' Class Proofs of Claim
----------------------------------------------------------------
In a ruling regarding multi-million dollar claims against the
estate of Irvine, Calif.-based First Alliance Mortgage Company,
U.S. Bankruptcy Court Judge Lynne Riddle held that class-action
proofs of claim filed on behalf of certain borrowers would be
disallowed, according to Irell & Menella LLP. Judge Riddle based
her decision on the failure of the class-action claimants to
satisfy the standards applicable to class certification as well
as the unfairness to those borrowers who had filed timely proofs
of claim. The ruling eliminates millions of dollars in claims
from First Alliance's bankruptcy estate. (ABI World, February 23,
2001)


FIRST DATA: Plans to Sell $525MM of New Notes to Refinance Debt
---------------------------------------------------------------
First Data Corp., one of the largest U.S. credit card processors,
disclosed its plans to publicly sell $525 million of its seven-
year senior convertible notes, mainly to refinance short-term
debt, according to CollectionIndustry.com. The Atlanta-based
company said that it will use sale proceeds to repay outstanding
commercial paper and for general corporate purposes. It said its
debt load will not change, and the sale will slightly increase
its per-share earnings in 2001. (ABI World, February 23, 2001)


FRUIT OF THE LOOM: Seeks Court's Nod To Sell Equipment To Gibbs
---------------------------------------------------------------
Winfield Cotton Mill Inc., a subsidiary of Fruit of the Loom,
Ltd., is a leading international, vertically integrated, basic
apparel manufacturer operating in over sixty countries worldwide.
Winfield emphasizes branded products for consumers ranging from
children to senior citizens. The subsidiary is owner and former
operator of a yarn-manufacturing mill located in Winfield,
Alabama. In October of 2000, the Winfield plant ceased operations
in order to improve the rationalization of Fruit of the Loom's
yarn manufacturing capabilities. Since Winfield no longer
requires use of its yarn-manufacturing equipment, a sale would
maximize value and benefit the creditors and the estates.

Winfield Cotton Mill is currently seeking a purchaser for the
plant. Therefore, Winfield must conclude the sale, dismantling
and removal of the equipment so as to effectuate a sale of the
plant. Due to these time restraints, the current market for used
yarn equipment and the large quantity of equipment being
liquidated, Winfield solicited bids from equipment brokers that
specialize in the sale of used textile manufacturing equipment.

By letter, Winfield Cotton Mill solicited offers from four
prospective purchasers. Winfield received three legitimate offers
and one that was not seriously considered. Gibbs International
offered $795,000 for the equipment and committed to an
expeditious removal schedule, which ensures that Winfield will
not encounter occupancy problems in connection with the sale of
the plant. International Textile Machinery offered $900,000 to
purchase the specified equipment, plus other items Winfield did
not intend to sell. The offer was conditioned on obtaining nine
months to remove and liquidate the equipment. Atkins Machinery
Inc., offered $708,000 for the equipment. Therefore, Winfield
determined that Gibbs' offer was the best.

The $795,000 is payable in cash, check or wire transfer. Gibbs
will pay Winfield a good faith deposit of $95,000, which will be
credited against the purchase price at the closing of the sale.
Gibbs will also provide Winfield with a letter of credit to
guarantee payment of the balance. Upon Court approval, Gibbs may
request a $25,000 breakup fee.

Ms. Stickles told the Judge that the equipment sale is a
reasonable business decision and is in the best interests of the
estate and creditors. She also requested that the sale be free
and clear of liens, claims and encumbrances and that it be exempt
from tax of any sort. (Fruit of the Loom Bankruptcy News, Issue
No. 22; Bankruptcy Creditors' Service, Inc., 609/392-0900)


GREAT BASIN: Agrees To Sell Assets To Volvo Truck For $40 Million
-----------------------------------------------------------------
Great Basin Trucks Inc., which filed Chapter 11 in the U.S.
Bankruptcy Court in Utah listing liabilities of about $59
million, has now reached an agreement to sell nearly all of its
assets to Volvo Trucks North America.  The $40 million deal must
be approved by the U.S. Bankruptcy Court.  (ABI World, February
23, 2001)


HARNISCHFEGER: Beloit Seeks To Reject Proctor & Gamble Agreement
----------------------------------------------------------------
The Proctor & Gamble Paper Products Company filed an adversary
proceeding (Case No. 00-02065) against Beloit Corporation seeking
a declaratory judgment in P&G Pape r's favor, recovery for $4.5
million on various common law theories, and an order that P&G
Paper's claim be allowed as an administrative expense priority
claim.

Defendant Beloit Corporation moved the Court to dismiss P&G's
complaint pursuant to Fed.R.Civ.P.12(b)(6). Beloit asserted that,
once the claims are dismissed, the administrative claim that P&G
Paper has asserted against Beloit should correspondingly be
disallowed and expunged for all purposes pursuant to 11 U.S.C.
section 502(b)(1).

P&G Paper makes 5 counts in its complaint:

      -- Count I seeks a declaratory ruling that the Agreement is
         a lease arrangement and not a financing transaction;

      -- Count II alleges that Beloit was unjustly enriched by its
         sale of the Non-exclusive Equipment;

      -- Count III alleges that Beloit converted the Non-exclusive
         Equipment to its own use by selling it;

      -- Count IV seeks to hold Beloit liable on a claim of money
         had and received;

      -- Count V alleges that Beloit breached the Agreement by
         selling the Non-exlusive Equipment.

Beloit debunks P&G Paper's charges.

With respect to Count I, Beloit argued that the Agreement is a
financing arrangement that created a security interest in favor
of P&G Paper as opposed to a true lease because of the inclusion
of the language that Beloit "shall purchase the Non-exclusive
Equipment" and the "purchase price shall be the Fair Market Value
of the Non-exclusive Equipment as at the expiry of the term of
the Agreement." Beloit asserted that Illinois law, the governing
law of the Agreement, requires that the Agreement be deemed a
financing transaction and not a lease. The Debtors cited Uniform
Commercial Code Section 1-207(37), codified in Illinois at 810
ILCA 5/1-201(37), which provides that:

      "Whether a transaction creates a lease or security interest
       is determined by the facts of each case; however, a
       transaction creates a security interest if the
       consideration the lessee is to pay the lessor for the right
       to possession and use of the goods is an obligation for the
       term of the lease not subject to termination by the lessee,
       and . . . the lessee is bound to renew the lease for the
       remaining economic life of the goods or is bound to become
       the owner of the goods, . . .

In this regard, Beloit contended that the Agreement unambiguously
states that Beloit was bound to become the owner of the Non-
exclusive Equipment either upon default or after the ten-year
term.

Count II, Beloit contended, must fail as a matter of law because
the Non-exclusive Equipment was Beloit's property subject to P&G
Paper's security interest. Because P&G Paper failed to perfect
its security interest, Beloit told Judge Walrath, it is now
unenforceable puruant to the strong arm provision of 11 U.S.C.
section 544 and as such, it would not violate the principles of
equity for Beloit to retain the benefits of the sale.

To refute Count III, Beloit again asserted that the Equipment was
Beloit's property. Thus, the sale of it was not, as a matter of
law, a conversion.

With respect to Count IV, Beloit again asserted that the
Equipment was Beloit's property and the money, in equity and good
conscience, belongs to Beloit.

Count V, Beloit said, must fail, also because the Non-exclusive
Equipment was Beloit's property subject to P&G Paper's security
interest. The provisions of the Agreement that P&G Paper asserts
Beloit breached are not material, Beloit contended, because the
Agreement was not a true lease.

Accordingly, Beloit requested that the Court estimate P&G Paper's
administrative claim at zero for all purposes in the case,
including for establishment of a reserve and distribution. Beloit
believes its request is reasonable because P&G Paper's
administrative claim are contrary to applicable Illinois law and
in any event must be disallowed under 11 U.S.C. section 502(d).
(Harnischfeger Bankruptcy News, Issue No. 37; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


HEILIG-MEYERS: Fitch Slashes Receivable Securitization Ratings
--------------------------------------------------------------
Fitch downgraded ratings on the asset-backed certificates issued
by Heilig-Meyers Master Trust as follows:

     -- Series 1998-1 6.125% class A asset-backed certificates to
        `BB' from `AAA';

     -- Series 1998-1 6.35% class B asset-backed certificates to
        `CCC' from `A';

     -- Series 1998-2 floating-rate class A asset-backed
        certificates to `BB' from `AAA';

     -- Series 1998-2 floating-rate class B asset-backed
        certificates to `CCC' from `AA-`.

All securities remain on Rating Watch Negative.

The ratings indicate that full repayment of the senior classes is
now speculative in Fitch's view and that the subordinate bonds
face a real possibility of default.

The downgrade is in response to severe deterioration in
collateral performance since Heilig-Meyers' bankruptcy filing in
August and the subsequent servicing transfer from Heilig- Meyers
to OSI Portfolio Services, Inc. (OSI) in October. In addition,
Fitch remains concerned with the quality and timeliness of
information available through First Union as trustee and OSI as
successor servicer. In particular, Fitch has not received a
monthly servicing statement since August.

However, delinquency data made available for the first time this
month confirmed Fitch's belief that the servicing transfer and
closing of a large portion of Heilig-Meyers' store base has had a
dramatic effect on portfolio credit quality and trust cash flows.
Fitch believes the uniqueness of Heilig-Meyers decentralized
servicing platform and the lack of a coherent backup plan prior
to Heilig-Meyers' unexpected resignation as servicer exacerbated
this deterioration.

Fitch will continue to monitor the ratings and take additional
actions if warranted. The ratings were originally placed on
Rating Watch Negative on Aug. 18, 2000 following Heilig-Meyers
Co. filing for Chapter 11 bankruptcy protection. The securities
are backed by a pool of finance contracts made through subsidiary
MacSaver Finance for purchases at Heilig-Meyers furniture stores.


HOMEPLACE: DJM Asset Management to Dispose of 38 Store Leases
-------------------------------------------------------------
DJM Asset Management, LLC, has been retained as real estate
advisor to HomePlace during its Chapter 11 bankruptcy
reorganization. DJM will market 38 retail leases in 17 states.

"The locations that we are marketing include properties of
between 21,150 s.f. to 133,500 s.f. in established strip-centers,
malls and freestanding buildings," said Andy Graiser, Principal
of DJM. "The leases available include properties in Arizona,
Colorado, Georgia, Illinois, Indian, Maryland, Minnesota, North
Carolina, New Jersey, New York, Ohio, Oklahoma, Oregon,
Pennsylvania, South Carolina, Tennessee and Texas. Bids are due
on or before March 30 and we welcome all inquiries."

HomePlace is a linens, housewares and home decor retailer with
122 stores in 27 states. It has been operating under bankruptcy
protection since January.

To obtain information on specific HomePlace locations contact Jim
Avallone or Andy Graiser at 631-752-1100. Store photos,
demographics, store plans and site can plans can be seen on DJM's
web site at www.djmasset.com.

Based in Melville, New York, DJM Asset Management, LLC, a Gordon
Brothers Group company, assists retailers nationwide with the
disposition of unwanted locations. DJM, whose clients have
included Roberds, Nobody Beats the Wiz, Hechinger's, Laura
Ashley, Charming Shoppes, Loehmann's, Elder Beerman, Jumbo Sports
and Pergament, has been involved in the disposition and
restructuring of over 45,000,000 s/f of retail space and over
4,500 properties during the past four years.


ICG COMMUNICATIONS: Moves to Hire Arthur Andersen as Consultants
----------------------------------------------------------------
A significant restructuring of ICG Communications, Inc.'s
operations is necessary to restore its profitability and emerge
from these chapter 11 cases as a healthy and viable business. To
reach that end, the Debtors are eyeing certain projects and tasks
designed to make the Debtors' operations more efficient and cost-
effective. The Debtors believe that their ability to develop and
implement those improvements will be greatly enhanced through
consulting services available from Arthur Andersen LLP.

David Kurtz, Esq., at Skadden, Arps, Slate, Meager & Flom, told
Judge Walsh that ICG wants to employ Arthur Andersen as an
independent consultant. ICG has determined that Arthur Andersen
specializes in working with companies to help identify areas
where operational improvements can be made and can help ICG
implement the operational improvements it needs in three key
areas of their business:

      (1) billing,

      (2) the monitoring of network performance, and

      (3) fulfillment of customer services.

Specifically, Arthur Andersen will:

      (i) evaluate the Debtors' billing, customer fulfillment and
          network monitoring processes;

     (ii) provide detailed evaluative data and improvement
          recommendations;

    (iii) develop and define policies and procedures to implement
          improvements; and

     (iv) assist in actually implementing improvements.

The objectives for this project are:

      (a) Evaluation of the "as is" fulfillment, assurance and
billing  processes for four selected on-net and hybrid products,
being (1) PRI, (2) Hybrid PRI, (3) PLRAS, and (4) IRAS using
cost, quality and time as performance metrics. Roughly 50% of
Andersen's efforts will focus on the fulfillment process, 30% on
assurance, and 20% on billing;

      (b) Documentation of the performance and first-pass yield
for each of the four products using data supplied by ICG;

      (c) Provision to ICG of "directionally correct" process
metrics based on Andersen's industry experience. Illustrative
examples include order processing times, FTEs required to install
an order, number of manual handoffs, and cost per order;

      (d) Definition of consistent policies and procedures for the
implementation of the in-scope process improvements (e.g.,
standardize procedures, performance measurements, etc.);

      (e) Utilization of Andersen's proprietary change enablement
tools to identify and overcome potential employee barriers to
process implementation;

      (f) Implementation of select process improvements.

The agreement with Arthur Andersen also allows the Debtors to
utilize certain of Arthur Andersen's proprietary change
enablement tools.

The individuals assigned to this project are:

      Ron Bose                 Engagement partner
      Raj Narula               Quality assurance partner
      Laddie Suk               Subject matter expert
      Chris Rodriguez          Engagement manager
      Ron Haas                 Project lead for billing
      Jennifer Gold            Day-to-day project manager
      Dan Avery                Evaluation of fulfillment processes
      Janette Bell             Process area team lead
      Brian Wilson             Lead re-engineering teams

Arthur Andersen will be paid an advance of $250,000, and
estimated total compensation for the project of $2,000,000.
Andersen's professional fees will be based on time actually spent
and materials actually provided at an approximate run rate of
$125,000 per week. Approximately twelve Andersen personnel will
be engaged on the project on a fulltime or close to fulltime
basis.

The agreement contains a "risk allocation" limiting Andersen's
total liability under the agreement to the fees it receives for
this engagement. The Debtor is to indemnify Andersen, its
affiliates, and their partners, principals and personnel against
all costs, fees, expenses, damages and liabilities (including
defense costs) associated with any third-party claim relating to
or arising from the services under this engagement, the Debtors'
use of delivered properties, or the Agreement. This includes any
damage or expenses relating to bodily injury or death of any
person, or damage to real or personal property, and to the extent
caused by the negligent or willful acts or omissions of
Andersen's personnel or agents in performing services under this
engagement.

The Debtors told Judge Walsh that they believe the estates will
benefit in the form of increased efficiency and reduced costs
through this contract. (ICG Communications Bankruptcy News, Issue
No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900)


IMPERIAL SUGAR: Wells Fargo Asks for Protection of Set-Off Right
----------------------------------------------------------------
Jeffrey C. Wisler, Esq., of Connoly Bove Lodge & Hutz LLP,
representing Wells Fargo Bank (Texas), N.A., asked Judge Robinson
to require Imperial Sugar Company to provide Wells Fargo Bank
with adequate protection of its right of setoff. The Debtors have
deposit accounts containing approximately $1,500,000 in funds at
Wells Fargo, and have requested the Bank continue honoring checks
postpetition for prepetition obligations until the funds in these
accounts have been exhausted. Wells Fargo has a right of setoff
against the funds contained in these accounts. However, the Bank
has agreed to the Debtors' request.

Wells Fargo is a party to a certain Interest Swap Agreement with
Imperial Holly, dated December 23, 1997, which provides a
mechanism for Wells Fargo and Imperial Holly to reduce their
exposure to interest rate fluctuations and reduce the cost of
actual or expected borrowing though Net Swap Settlement Payments,
which are calculated according to a formula provided for in the
Swap Agreement.

The funds in the deposit accounts at Wells Fargo give rise to a
right of setoff to secure the Debtors' obligations to Wells Fargo
under the Swap Agreement, and any other obligation existing on
the Petition Date. Mr. Wisler believes that Wells Fargo is
entitled to adequate protection of this setoff right, but in his
Motion only suggested that the Court award such adequate
protection as the Court deems appropriate. (Imperial Sugar
Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


INTEGRATED HEALTH: Rejects 7 Rotech Real Property Leases
--------------------------------------------------------
Integrated Health Services, Inc. sought and obtained the Court's
authority for the rejection of seven Rotech leases for
nonresidential real property because these leases:

      (a) are of no value to the Debtors or constitute a burden
          upon the Debtors' estates; and

      (b) are unnecessary for the Debtors' continued operations.

Two of these relate to currently vacant parcels of Leased
Property for which the Debtors would like to reject the
appurtenant lease. The other five relate to parcels of Leased
Property which are anticipated to be vacated shortly and as to
which the Debtors would also like to reject the appurtenant
leases.

The Debtors presented to the Court a brief description of each of
the Unwanted Leases and the reasons for the rejection:

      (1) Name: Rotech Managed Care
          Location: Neptune Beach, FL
          Lease Expires: 9/30/02
          Rent: $1302.51
          Reason for rejection: No longer needed; will be vacated
                                shortly

      (2) Name: Select Home Health Care, Inc. d/b/a Kelly's
                Home Health
          Location: Young Harris, GA
          Lease Expires: 11/30/01
          Rent: $1,500.00
          Reason for rejection: Vacant and not needed

      (3) Name: Premier Medical, Inc. d/b/a Hometown Oxygen
          Location: Silver City, NM
          Lease Expires: 1/31/02
          Rent: $1.000.00
          Reason for rejection: No longer needed; will be vacated
                                shortly

      (4) Name: Responsive Home Health Care, Inc. d/b/a Hooks
                Home Health Care
          Location: Fairfield, OH
          Lease Expires: 6/30/02
          Rent: $3,103.35
          Reason for rejection: Vacant and not needed

      (5) Name: CP02, Inc.
          Location: Hanover, PA
          Lease Expires: 1/1/02
          Rent: $1,300.00
          Reason for rejection: No longer needed; will be vacated
                                shortly

      (6) Name: Home Medical Systems, Inc. d/b/a Adaptive
          Medical Equipment
          Location: Charleston, SC
          Lease Expires: 3/31/02
          Rent: $1,071.00
          Reason for rejection: No longer needed; will be vacated
                                shortly

      (7) Name: Home Medical Systems, Inc. d/b/a Sunshine
                Medical
          Location: Mt. Pleasant
          Lease Expires: 10/31/02
          Rent: $2,300.00
          Reason for rejection: No longer needed; will be vacated
                                shortly

Mr. James A. McNabb, Jr., Corporate Counsel of Rotech, represent
that the Debtors have thoroughly reviewed each of the 10 unwanted
leases and have determined that the leases do not provide a
benefit but in many cases impose an economic hardship upon IHS.
Mr. McNaBB also believe that there is no reasonable likelihood
that the Debtors could sublet or assign any of the leaseholds on
advantageous terms. (Integrated Health Bankruptcy News, Issue No.
14; Bankruptcy Creditors' Service, Inc., 609/392-0900)


INTERNATIONAL MENU: Selling Operating Subsidiaries After Default
----------------------------------------------------------------
International Menu Solutions Corporation ("MENU") announced that
it is initiating a process to sell its operating subsidiaries. As
part of this process, MENU is in discussion with one of its major
shareholders and lenders with respect to such a sale.

In this regard, MENU has retained the services of professional
advisors and is working closely with its principal lender.

As indicated in its December 20, 2000 disclosure, MENU is and
continues to be in default of certain covenants with its lenders.
Notwithstanding recent progress in rationalizing and lowering the
cost structure of its operations, MENU's future cash requirements
exceed the availability of funds to the Company.

MENU further announced that it has accepted on February 22, 2001
the resignations of Mr. Reginald Petersen and Ms. Lynda King as
directors and officers of MENU effective February 13, 2001 and
Mr. Len Shiffman as a director effective February 22, 2001.


INVESTAMERICA: Looks for New Funding to Continue as Going Concern
-----------------------------------------------------------------
InvestAmerica, Inc., through its subsidiary, Zed Data Systems
Corp., provides public and private sector end users with data
communication solutions across North America. These services
primarily include system design and installation.

At December 31, 2000, the company had negative working capital of
$7,808,971. For the quarter ended December 31, 2000, the company
incurred a net loss of $2,311,209 and is reliant on current and
future stockholders' financial support to assist in meeting cash
flow needs.

Management has evaluated the company's alternatives to enable it
to pay its liabilities as they become due and payable in the
current year, reduce operating losses and obtain additional or
new financing in order to advance its business plan. Alternatives
being considered by management include, among others, obtaining
financing from new lenders, obtaining vendor financing, and
issuance of additional equity. The company believes these
measures will provide liquidity for it to continue as a going
concern throughout fiscal 2001, however, management can provide
no assurance with regard thereto. These factors, among others,
raise substantial doubt about the company's ability to continue
as a going concern.

Total revenues were $194,345 and $Nil for the quarters ended
December 31, 2000 and 1999, respectively. Total revenue for the
year ended September 30, 2000 was $1,293,690. InvestAmerica has
not generated any significant revenues and has incurred
significant net losses, including a net loss of $4,840,861 for
the year ended September 30, 2000. As of December 31, 2000, its
accumulated deficit was $7,156,628. The company expects to have
continuing net losses and negative cash flows for the foreseeable
future. The size of these net losses will depend, in part, on the
commencement of and the rate of growth in its revenues.


LEGEND AIRLINES: FAA Nixes Auction of Operating Certificate
-----------------------------------------------------------
Executives of Legend Airlines Inc., which is in bankruptcy court
proceedings, must surrender its operating certificate or face
legal action, federal regulators say.  Lawyers for the Dallas-
based startup airline had planned to ask U.S. Bankruptcy Judge
Robert McGuire Friday for permission to hold an auction for its
certificate, according to the Associated Press.  But the Federal
Aviation Administration (FAA) has notified Legend that it cannot
sell its operating certificate.  Creditors of the airline had
supported the idea, hoping to receive some money.

Friday's hearing has since been canceled, T. Allan McArtor,
Legend's chief executive and president, told The Dallas Morning
News.  Toby Gerber, Legend's bankruptcy lawyer, said the carrier
is exploring other ways of disposing of the certificate but he
declined to elaborate.  The airline filed for chapter 11
protection on Dec. 2. (ABI World, February 23, 2001)


LERNOUT & HAUSPIE: AllVoice Pursues Patent Infringement Lawsuit
---------------------------------------------------------------
On February 12, 1999 AllVoice PLC sued Dragon, now L&H Holdings
USA, Inc for infringement a patent for "Automated Proofreading
Using Interface Linking Recognized Words To Their Audio Data
While Text Is Being Changed", issued to AllVoice on August 25,
1998. AllVoice requested a preliminary injunction against further
infringement, and after hearing the District Court issued a
memorandum denying the preliminary injunction. AllVoice has
appealed this denial.

AllVoice again requested a preliminary injunction, alleging
continuing infringement based upon Holdings' newly-released
version 5 of its "Naturally Speaking" products. In December 2000
AllVoice moved to transfer the litigation before the
Massachusetts District Court to the District Court in Delaware
for purposes of consolidation with the pending bankruptcy
proceedings filed by L&H Holdings' affiliates. This motion upon
hearing was denied by the Massachusetts court on December 15,
2000.

William D. Sullivan, Esq., of the firm of Elzufon Austin Reardon
Tarlov & Mondell, PA, asked Judge Judith H. Wizmur to allow:

      (1) receipt of a Massachusetts District Court ruling on the
          fully- briefed and pending motion for a preliminary
          injunction regarding Holdings' alleged continuing patent
          infringement;

      (2) completion of the fully-briefed appeal of the denial of
          AllVoice's original motion for a preliminary injunction
          currently pending before the Federal Court; and

      (3) enforcement of any equitable remedies awarded by the
          District Court of Massachusetts and the Federal Court
          arising from the appeal.

Mr. Sullivan seeks relief from the automatic stay in order to
stop the continuing post-petition infringement of AllVoice's
patent. He reasoned that under the law post-petition infringement
claims are not stayed as they bear no relation to the bankruptcy
case or to the purpose of a stay. (L&H/Dictaphone Bankruptcy
News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


LETSBUYIT.COM: Says It Has Enough Cash to Reach Break-Even
----------------------------------------------------------
Internet retailer LetsBuyIt.com, which until recently was staring
bankruptcy in the face, said it did not expect to call on
additional funds as it reinvents its battered e-business model,
according to Reuters.

John Palmer, chief executive officer of the co-buying web site,
told Reuters in an interview that a comprehensive revamp would
help the company back into the black by the end of 2002 as it
slashes costs and pulls out of unprofitable operations. "We're
planning to break even in the fourth quarter of 2002," he said.

Shareholders have seen the value of their investment fall from
$3.18 per share at their July listing on Frankfurt's Neuer Markt
to just 74 cents on Thursday afternoon. Even this level
represents a welcome improvement from the level of 13 cents
reached in late January, when the market had all but given up
hope on LetsBuyIt as it battled for survival in an Amsterdam
bankruptcy court. But with little time to go before the court
deadline for a rescue, Palmer and his team received a fax from
German investor Kim Schmitz, pledging the four million euros
bailout. A debt moratorium was lifted as recently as Wednesday.
(ABI World, February 23, 2001)


LOEWEN GROUP: Selling Macer-Hall Funeral Home For $550,000
----------------------------------------------------------
As part of The Loewen Group, Inc.'s Disposition Program, and in
accordance with section 363 and 365 of the Bankruptcy Code,
Loewen (Indiana), L.P. sought and obtained the Court's authority:
(i) to sell the funeral home business and related assets at
Macer-Hall Funeral Home (2664) in New Castle, Indiana 47362-3315
to Samuel W. Hall, Inc. and Samuel W. Hall (collectively, the
Initial Bidder) free of all liens, claims and encumberances, at a
purchase price of $ 550,000 pursuant to the Asset Purchase
Agreement dated December 22, 2000, or to the Purchaser that the
Debtors determine has submitted the highest and best offer, free
of all liens, claims and encumberances.

Any Qualified competing bid must exceed $577,500 i.e. 5% above
the Purchase Price of the Initial Bidder. Any entity that desires
to submit a competing bid for the Sale Locations may do so in
accordance with the Bidding Procedures approved by the
Disposition Order.

The Selling Debtor does not anticipate assuming and assigning any
executory contracts or unexpired leases in connection with the
Transaction.

The Sale Location is subject to a right of first refusal granted
by Loewen Group International to Samuel W. Hall (the ROFR
Holder). The ROFR Holder, individually and combined with a
corporation of which he is the sole shareholder, is the Initial
Bidder and will be entitled to participate in the Auction. The
Debtors believe they have performed their obligations to the ROFR
Holders and may proceed with the saleof the ROFR Location.

Accordingly, the Debtors requested that in approving the motion,
the Court's order provide that the Debtors have complied with
their obligations under the ROFR and are authorized to sell the
Sale Locations to the Purchaser, and the ROFR Holders have no
further rights or interests in the ROFR Location or the related
business or assets in respect of the ROFR.

In accordance with the Net Asset Sale Proceeds Procedures, the
Debtors will use the proceeds generated to repay any outstanding
balances under the Replacement DIP Facility and deposit the net
proceeds into an account maintained by LGII at First Union
National Bank for investment, pending ultimate distribution on
court order.

Neweol would sell and the Initial Bidder would purchase certain
accounts receivable related to the Sale Locations, pursuant to a
purchase agreement between Neweol and the Initial Bidder. The
amount of the Neweol Allocation will be determined immediately
prior to closing. The Neweol Allocation will not be utilized or
deposited in the manner contemplated by the New Asset Sale
Proceeds Procedures. (Loewen Bankruptcy News, Issue No. 33;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


LUCENT TECHNOLOGIES: Secures New $6.5 Billion Credit Facilities
---------------------------------------------------------------
Lucent Technologies (NYSE: LU) announced that it has closed $6.5
billion in credit facilities.

The company successfully obtained $4.5 billion of new 364-day
credit facilities which were arranged by J. P. Morgan and Salomon
Smith Barney. A portion of these new credit facilities replaces a
$2 billion credit facility that expired February 22; the
remaining $2.5 billion will be assumed by Agere Systems at its
initial public offering. In addition to the new $4.5 billion
credit facilities, Lucent amended an existing $2 billion credit
facility due in 2003, for a total of $6.5 billion in credit
facilities.

"A critical element of our seven-point restructuring plan is now
in place with these new agreements," said Lucent's Chief
Financial Officer Deborah Hopkins. "We are now moving ahead
totally focused on executing the turnaround of our business."

Lucent Technologies, headquartered in Murray Hill, N.J., USA,
designs and delivers the systems, software, silicon and services
for next-generation communications networks for service providers
and enterprises. Backed by the research and development of Bell
Labs, Lucent focuses on high-growth areas such as broadband and
mobile Internet infrastructure; communications software;
communications semiconductors and optoelectronics; Web-based
enterprise solutions that link private and public networks; and
professional network design and consulting services. For more
information on Lucent Technologies, visit its Web site at
http://www.lucent.com.


NORD RESOURCES: Files Chapter 11 Petition in Albuquerque
--------------------------------------------------------
Nord Resources Corporation (OTC Bulletin Board: NRDS) filed a
reorganization case under Chapter 11 of the U.S. Bankruptcy Code
for the purpose of enabling it to develop its Johnson Camp Mine
near Benson, AZ. The reorganization was filed in the Bankruptcy
Court District of New Mexico, Case No. 11-01-11160 MA, in
Albuquerque.


OMEGA HEALTHCARE: S&P Rates Preferred Stock in Default
------------------------------------------------------
Standard & Poor's lowered its rating on the cumulative preferred
stock of Omega Healthcare Investors Inc. (Omega) to single-'D'
from single-'C'.

At the same time, the company's corporate credit rating was
affirmed at single-'B', and the rating on its senior unsecured
debt was affirmed at triple-'C'-plus. The outlook remains
negative.

On Feb. 2, 2001, Standard & Poor's had lowered the corporate
credit rating on Omega, as well as its ratings on the existing
senior unsecured debt and preferred stock. At that time, Standard
& Poor's stated that the rating on the company's two outstanding
publicly rated preferred stock issues would be lowered to single-
'D' once the payment date (Feb. 15) had passed, as Standard &
Poor's considers a deferred preferred dividend payment as
tantamount to a default on the issue.

Outlook: Negative

While Omega's dividend suspension will result in an increase in
retained cash flow, the company's overall financial flexibility
remains weak. While the company has no material debt maturities
remaining in 2001, the company faces relatively sizable
maturities in 2002. In addition, Standard & Poor's expects debt
coverage measures to remain very weak, given the vulnerable
financial profile of the majority of Omega's health care
operators, Standard & Poor's said.

      OUTSTANDING RATINGS LOWERED
                                                    Rating
          Omega Healthcare Investors Inc.         To      From

          $57.7 million 9.25% cumulative
           preferred stock series A               D        C

           50 million 8.625% cumulative
           preferred stock series B               D        C

      OUTSTANDING RATINGS AFFIRMED

          Omega Healthcare Investors Inc.           Rating

          Corporate Credit Rating                     B

          $100 million 6.95% senior unsecured
           notes due 2007                             CCC+

          $125 million 6.95% senior unsecured
           notes due 2002                             CCC+


OWENS CORNING: Wants More Time To Decide On New York Lease
----------------------------------------------------------
By earlier Order, Judge Walrath extended Owens Corning's time
period during which they must move to assume or reject Integrex's
unexpired leases of nonresidential real estate until June 4,
2001, except with respect to the New York lease for which the
Debtors' time period was extended until March 5, 2001. The
Debtors asked that Judge Walrath enter an order further extending
the time during which they may assume or reject the Manley lease
of commercial real property at 41 East 11th Street, New York, New
York.

The Debtors argued that the extension given to the Debtors with
respect to the Manley lease was different from the extension
given to the Debtors with respect to their other nonresidential
real estate leases because of a "last minute objection" by John
Manley, the landlord.

Manley argued that the reason he objected to an extension was
because he was dealing with a single tenant that has 20% of the
building. Manley argued in court that, while the current strong
market for commercial rentals in New York would let him find a
replacement tenant without difficulty, the extension proposed by
the Debtors put him in the position of having to seek bankruptcy
protection if the market turns down in the next six months, so
that the balance of the equities favored putting a short time
period on the Debtors' ability to accept or reject this lease.
The Court stated in court that a 90-day extension would be
granted, and at the end of that time the Court would "consider
whether another tenant has been found or whether, in fact,
the New York market has gone soft or if there is still some
reason to continue the marketing effort."

The Debtors argued in support of a further extension that in the
time period since this hearing the Debtors, with the assistance
of a broker, have made significant efforts to market the Manley
lease. Although the Debtors have not yet reached agreement
regarding an assignment of the lease, they have received over 80
inquiries about the subject premises. Thirteen prospective
tenants have inspected the premises and several have inspected
the premises more than once. Given this level of activity, which
is ongoing, the Debtors "firmly" believe that they will locate an
assignee for the space in issue. Second, the concerns raised at
the hearing about the condition of the New York commercial
leasing market have been dispelled by events. In fact, the New
York commercial leasing market has solidified and continues to
improve. When these circumstances are considered, together with
the significant value of the New York lease, a further three-
month extension of the Debtors' time to assume or reject the
Manley lease is, the Debtors say, warranted by the fair market
rental value of this lease at $30-35 per square foot. Based on
this figure, and taking into account the fact that the Manley
lease does not expire until 2008, and using a fair market value
of $32.50 per square foot, the mid-way point in he range between
$30 and $35 per square foot, the Manley lease has a value of
approximately $4.0 million, before discounting for present value.
This lease is therefore a valuable asset of the Debtors' estates
because it contains favorable terms which are significantly below
market rate.

The Debtors are current, and will remain current, on all of their
postpetition rent obligations under the Manley lease. Therefore,
the Debtors argued that a further extension does not prejudice
Manley. By contrast, if no extension is had, the Debtors will be
compelled prematurely to assume substantial, long-term
liabilities under the Manley lease, potentially creating
administrative expense claims, or forfeit the significant benefit
associated with the Manley lease, to the detriment of creditors
and parties in interest in these cases. The Debtors therefore
seek a further extension of three months during which they may
assume, assume and assign, or reject the Manley lease, without
prejudice to their seeking a further extension if circumstances
warrant. (Owens Corning Bankruptcy News, Issue No. 9; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


PEAPOD.COM: Foresees Cash Shortfall By Year's End
-------------------------------------------------
With record sales undermined by staggering losses, Internet
grocer Peapod.com has issued a warning that it would run out of
cash by the end of the year if it does not secure additional
financing, according to EcommerceTimes.com.

The e-tailer posted record fourth-quarter sales of $23.7 million
in its earnings report but also announced that it was hit with
its biggest quarterly loss to date. The Chicago-based company
said that its net loss for the quarter was $23.8 million, more
than double its net loss of $9.1 million for the same period in
1999.

Despite the steep losses, Peapod - which was pulled back from the
brink of bankruptcy last year by an infusion of capital from
European food giant Royal Ahold - reported that its fourth
quarter sales increased 11 percent over the same period the
previous year, and said the growth was significant because the
company closed four markets in September. As of Dec. 31, Peapod
said that it had about $14.7 million and a $20 million credit
from Royal Ahold available for funding its operations. Peapod
said that it expects it will need about $50 million to keep its
business up and running for the remainder of 2001, adding that it
is currently in discussions with Royal Ahold to receive
additional financing. (ABI World, February 23, 2001)


PETMED EXPRESS: Plans Asset Sales to Obtain More Funds
------------------------------------------------------
PetMed Express, Inc. and subsidiary is a direct marketer and
wholesaler of household pet medications and other pet products
and is located in the Ft. Lauderdale, Florida area. The company
takes orders by telephone, internet and mail. Almost all of its
sales are to residents of the United States.

For the three and nine months ended December 31, 2000, the
company has incurred significant operating losses and an
operating cash flow deficiency. The company had a net loss of
$1,700,748 for the nine months ended December 31, 2000 and
negative working capital of $2,278,270 at December 31, 2000. In
addition, the company was in violation of certain of its debt
covenants at December 31, 2000.

As a result, the company is dependent upon additional capital in
order to fund future operations. Management is also seeking to
raise additional capital through the sale and possible leaseback
its land and building. No assurances can be given that the
company will be successful in obtaining additional capital, or
that such capital will be available on terms acceptable to the
company. Further, there can be no assurances that even if such
additional capital is obtained, that the company will achieve
profitability or positive cash flow. These matters raise
substantial doubt about the entity's ability to continue as a
going concern.

Sales decreased by $1,436,577, or 44.4%, for the three months
ended December 31, 2000 from the three months ended December 31,
1999.

Net loss was $364,202 for the three months ended December 31,
2000 as compared to net loss of $326,293 for the three months
ended December 31, 1999.

Sales decreased by $4,497,594 or 38.8%, for the nine months ended
December 31, 2000 from the nine months ended December 31, 1999.
Net loss was $1,700,748 for the nine months ended December 31,
2000 as compared to a net loss of $472,563 for the nine months
ended December 31, 1999.


PILLOWTEX: Creditors' Committee Hires Akin Gump as Lead Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of Pillowtex, Inc.,
sought and obtained permission from Judge Robinson in Wilmington
to retain Akin, Gump, Strauss, Hauer & Feld of New York as its
lead counsel.  The Committee requested that the retention be made
to apply retroactively to the commencement of the Chapter 11
case.

The Committee told Judge Robinson it is necessary to retain the
services of Akin Gump to give the Committee:

      (a) Advice with respect to the Committee's rights, duties,
and powers;

      (b) Assistance and advice in its consultations with the
Debtors;

      (c) Assistance in analysing the claims of Debtors' creditors
and the Debtors' capital structure, and in negotiating with the
holders of claims and equity interests;

      (d) Assistance in the investigation of conduct, financial
condition, and operation of the Debtors;

      (e) Assistance in analysing and negotiating with the Debtors
or any third party regarding the assumption and rejection of
certain leases and executory contracts, asset dispositions,
financing, and the terms of the Debtors' plan of reorganization;

      (f) Assistance and advice as to its communications to the
general creditor body;

      (g) Representation at all hearings and other proceedings;

      (h) Assistance in the Committee's review and analysis of all
applications, orders, statements of operations, and schedules
filed in Court, and advice to the Committee as to their
propriety;

      (i) Assistance in the preparation of pleadings and
applications; and

      (j) Other legal services as may be necessary.

Akin Gump will request compensation based on its customary hourly
rates, subject to periodic adjustments to reflect economic and
other conditions.

The names, positions and standard hourly rates for Akin Gump
professionals retained by the Committee are:

      Fred S. Hodara           Partner           $550
      Charles R. Gibbs         Partner           $500
      Kirk Kennedy             Associate         $295
      Philip C. Dublin         Associate         $275

In his affidavit, Fred S. Hodara, a member of the firm, assured
the Court that Akin Gump is a "disinterested person" and does not
hold nor represent any interest adverse to the Committee with
respect to matters on which the firm is to be engaged.

Akin Gump has represented Pillowtex Corporation in connection
with two corporate matters. These matters were handled by Akin
Gump's Brussels office and were closed in 1996. The
representation was in connection with the defense of a preference
action in the Best Products bankruptcy proceeding and was
concluded in July 1998.

The firm also represented Apollo Investment Fund in the purchase
of preferred stock of Pillowtex Corporation. Apollo has since
released Akin Gump from any role in connection with its interest
in the Debtors.

Although Akin Gump may have represented, currently represents,
and may in the future represent other entities who may be
creditors of the Debtors in matters wholly unrelated to these
Chapter 11 cases, Mr. Hodara assured the Court that if the firm
discovers any such information, Akin Gump will promptly disclose
such information to the Court.

The Committee also requested that the retention of Akin Gump be
made to apply retroactively to November 29, 2000 because since
that date, the firm has been undertaking extensive work on behalf
of the Committee. The firm assisted the Committee in its review
and analysis of the Debtors' first day motions, DIP financing
documents, and motions for other relief. Additionally, the firm
participated in meetings and discussions with the Debtors
regarding post-petition financing. (Pillowtex Bankruptcy News,
Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900)


PLAYDIUM ENTERTAINMENT: Applies for CCAA Protection in Ontario
--------------------------------------------------------------
Playdium Entertainment Corporation (PEC) filed an application
under the Companies' Creditors Arrangement Act (CCAA) to
restructure its debt obligations.

PEC will continue to operate normally at its four major locations
in Toronto, Mississauga, Edmonton and Burnaby, and at its 50 game
centres across Canada.

PEC is currently in direct discussions with its lenders. An
independent committee of the Board of Directors is working with
PEC senior management on the restructuring process.
"The proposal aims to restructure debt largely incurred by PEC
during the development phase of the company. Ongoing operations
continue to generate significant cash flow," said Jon Hussman,
President and CEO of PEC.

Consistent with initial CCAA applications, the Ontario Superior
Court of Justice has granted PEC protection from creditors during
this restructuring period.

PricewaterhouseCoopers Inc. is the court-appointed monitor in the
CCAA proceedings.

Playdium Entertainment Corporation is the leader in the
introduction of location-based entertainment centres in Canada
andis dedicated to developing and operating entertainment centres
worldwide. Playdium operates Playdium Mississauga, Playdium
Burnaby, Playdium Toronto and Playdium Edmonton. In addition, PEC
has equipped and operates 50 game centres across Canada.


PRECEPT BUSINESS: Files for Chapter 11 Protection in N.D. Texas
---------------------------------------------------------------
Precept Business Services, Inc. (OTC Bulletin Board: PBSI) and
all of its wholly owned subsidiaries filed voluntary petitions
with the United States Bankruptcy Court for the Northern District
of Texas to reorganize their capital structure under Chapter 11
of Title 11 of the United States Code, 11 U.S.C. Sections 101 et
seq.

The filing was made after a creditor of one of the Company's
wholly owned subsidiaries, Precept Business Products, Inc., filed
an involuntary petition on January 26, 2001 against PBP in the
Bankruptcy Court under Chapter 7 of the Bankruptcy Code. The
Company intends to begin the preparation of a plan of
reorganization immediately and to file the plan as soon as
practicable. During the reorganization, the Company will conduct
business as usual. It plans to pay all obligations incurred
during the Chapter 11 period out of current operations. The
Company does not plan any changes to employee benefit programs
outside the normal course of business.

The Company has retained Kane, Russell, Coleman & Logan, P.C. as
its Chapter 11 counsel.

Precept Business Services, Inc. (www.preceptinc.com) is an
independent distributor offering single-source solutions for
automated document management services, inventory control and
order processing via the internet, as well as many other E-
commerce services, and provides custom and stock business
products to companies throughout the United States. The Company
also operates various corporate transportation services
companies, focusing on chauffeured town car and limousine
services. The Company is organized in two divisions: Business
Products and Transportation Services. The Company was founded in
1988 as a regional products distributor in Dallas, Texas.
This release includes forward-looking statements. These


RITE AID: AdvancePCS Sale Proceeds Approach $300 Million Mark
-------------------------------------------------------------
Rite Aid (Camp Hill, PA) plans to sell nearly all of its 23.3%
stake in AdvancePCS, the pharmacy benefits management company
formed when Advance Paradigm purchased PCS Health Systems from
Rite Aid in October 2000. Merrill Lynch & Co. and Banc of America
Securities LLC will serve as lead managers for the secondary
public offering. If all 6.3 million shares covered in the
registration are sold, Analysts at F&D Reports relate, Rite Aid
will receive proceeds of more than $300 million, based on the
near-$50 stock price, and its stake in the PBM will be reduced to
2.1%. So far, F&D says, it seems like Rite Aid picked a good time
to sell, as AdvancePCS' share price set a 52-week high on Friday.


SAFETY-KLEEN: Enters Into Marketing Agreement With SystemOne
------------------------------------------------------------
As part of their overall plan to restructure their operations,
Safety-Kleen Corp. have focused on, among other things,
identifying new business opportunities with the potential for
high rates of return. Toward that end, the Debtors asked that
Judge Walsh approve a marketing and distribution agreement
between Safety-Kleen Systems, Inc., and SystemOne Technologies,
Inc., under which Systems will purchase, market, and distribute
to Systems' current and potential customers parts washing
equipment manufactured by SystemOne.

The Debtors told Judge Walsh that the marketing agreement
presents Systems with a unique opportunity to bolster what
Systems describes as its position as a leader in the parts
cleaning market. With the marketing agreement in place, Systems
will have access to significant numbers of new customer
opportunities. Further, entry into the marketing agreement will
improve Systems' ability to retain its substantial existing share
of the parts cleaning market. Finally, performance under the
marketing agreement will afford Systems the opportunity to
realize significant returns on its capital investments.

In short, the Debtors' analysis shows that the marketing
agreement will be extremely beneficial to the Debtors, their
creditors, and their bankruptcy estates.

The significant terms of the marketing agreement are:

      (a) Marketing, Distribution and Service

          Systems will be the exclusive marketer and distributor
          of, and service provider for, SystemOne's parts cleaning
          equipment within the United States, Canada, Mexico, and
          Puerto Rico. SystemOne will retain the right to sell,
          lease, rent and service the equipment directly, and
          through other agents and distributors, in its sole
          discretion, outside the territory.

      (b) Term

          The Marketing Agreement provides for an initial term of
          five years following the Effective Date, which is the
          date all conditions precedent to entry into the
          marketing agreement have been met. The Marketing
          Agreement will be automatically extended for two
          additional five-year terms unless:

          (i) not less than one hundred eighty days prior to
              the end of the Initial Term or during the then
              current Renewal Term, as the case may be either
              party gives written notice to the other of its
              intent to terminate the Marketing Agreement;

         (ii) the Marketing Agreement is otherwise terminated
              in accordance with its terms, or

        (iii) the parties fail to reach an agreement in writing as
              to Systems' minimum purchase commitments for each
              contract year during a Renewal Term, prior to 185
              days before the date such Renewal Term would
              otherwise commence.

      (c) Early Termination

          In addition to the ability to terminate for "cause"
          under certain circumstances, Systems can terminate the
          marketing agreement for convenience, without cause,
          effective on the second anniversary of the Effective
          Date, by providing irrevocable written notice to
          SystemOne of such termination at any time prior to the
          180th day before the second anniversary of the Effective
          Date, and SystemOne may terminate the marketing
          agreement at any time if it has been approved by the
          Bankruptcy Court.

      (d) Minimum Purchase Commitment

          During each Contract Year, Systems will purchase as a
          minimum commitment from SystemOne not less than the
          following number of Series 500 Equivalent Units:

          Contract Year     Minimum Purchase Commitment
          -------------     ---------------------------
               1            10,000 Series 500 Equivalent Units
               2            10,000 Series 500 Equivalent Units
               3            12,500 Series 500 Equivalent Units
               4            15,000 Series 500 Equivalent Units
               5            18,000 Series 500 Equivalent Units

The Minimum Purchase Commitment for Contract Year 1 includes
SystemOne's inventory of equipment, including Demo Units, as of
the Effective Date. In addition, at SystemOne's option,
exercisable within 30 days after the Effective Date, Systems may
be required to purchase up to all the units of Equipment
currently rented by SystemOne, in which case SystemOne will
assign and delegate, and Systems will receive and assume, all
benefits and obligations arising under the rental agreements
related to such units. The purchase price would be at the book
balance, less $500 per Series 500 Equivalent Unit.

      (e) Purchase Pricing

          The standard price payable for each unit of Equipment
          during Contract Year 1 is set forth in Schedule 1 to the
          Marketing Agreement. Beginning in Contract Year 2, the
          standard price for each unit will be adjusted annually,
          based upon the pricing adjustments set forth in Schedule
          2 to the Marketing Agreement.

      (f) Royalty Payments

          Under the Marketing Agreement, Systems is required to
          make quarterly royalty payments in respect of each unit
          of equipment sold (other than rental units), in the
          amount of $7.00 per month per Series 500 Equivalent
          Unit, for the 36 months following the sale of such unit.

      (g) Assignments

          The Marketing Agreement may not be assigned, nor can the
          performance of any duties be delegated, by any party
          without the prior written consent of the other party,
          except:

          (i) to a direct or indirect parent or a direct or
              indirect wholly-owned subsidiary of a party or such
              parent, upon prior written notice to the other
              party, or

         (ii) to a successor to Systems' parts washer business
              as part of such successor's acquisition of all or
              substantially all of the assets of such business,
              whether by merger or other business combination,
              provided that (x) the assignee's or successor's
              financial strength is equal to or greater than that
              of the assignor and (y) the other party approves of
              the assignment, such approval not to be unreasonably
              withheld.

      (h) Warrants

          Under the marketing agreement, Systems will receive a
          five-year warrant to purchase 1,134,615 shares of
          SystemOne's common stock at an exercise price of $3.50
          per share.

The Debtors advised Judge Walsh that they believe entry into this
agreement is in the ordinary course of business for Systems and
no judicial review or approval is required; however, from an
abundance of caution and because the market agreement by its
terms is not effective until and unless the Court enters an Order
approving it, and Systems' opportunity to expand its lines of
business in the future is clearly important to the creditors of
these estates, the Debtor brought this Motion.

The Debtors cite four reasons why entry into this agreement
should be approved as an exercise of the Debtors' sound business
judgment:

      (1) Entry into the agreement will allow Systems to better
preserve its existing share of the parts washer equipment market;

      (2) The agreement will afford Systems an opportunity to
increase its market penetration by (i) converting current
SystemsOne customers into Systems customers; and (ii) attracting
new customers with SystemOne's state-of-the-art technology;

      (3) Approval of the agreement will permit Systems to provide
new and improved bundled services to its existing non-parts
washers customers; and

      (4) Implementation of the agreement will offer Systems the
chance to participate in any increase in SystemOne's enterprise
value through exercise of the warrant.

By Order, Judge Walsh authorized the Debtors to enter into this
agreement upon the terms and conditions stated above. (Safety-
Kleen Bankruptcy News, Issue No. 13; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


SMITH CORONA: Court Approves First Amended Disclosure Statement
---------------------------------------------------------------
Smith Corona Corp. received bankruptcy court approval of the
disclosure statement for its first amended joint reorganization
plan, as well as for the ballots and procedures for soliciting
creditor votes to accept or reject the plan. Judge Mary F.
Walrath of the U.S. Bankruptcy Court in Wilmington, Del.,
concluded that the disclosure statement contained "adequate
information" as defined by the Bankruptcy Code and scheduled a
plan confirmation hearing for March 16. Objections are due March
9. (ABI World, February 23, 2001)


STAMPEDE WORLDWIDE: Specialized Solutions Picks-Up a Piece
----------------------------------------------------------
Stampede Worldwide, Inc. has incurred substantial operating
losses since inception. Current liabilities exceed current assets
by $2,255,629 at December 31, 2000. These factors, combined with
the fact that the company has not generated positive cash flows
from operating activities since inception, raise substantial
doubt about its ability to continue as a going concern.

On February 12, 2001, the company entered into a non-binding
memorandum of understanding under which Specialized Solutions,
Inc., a Florida corporation, will acquire controlling interest in
i-Academy, Inc., a Florida corporation and a wholly-owned
subsidiary of Stampede Worldwide, Inc., by means of a reverse
merger and thereafter become a publicly traded company.

The Company showed a slight increase in revenues for the three
months ended December 31, 2000 in the amount of $3,801 or an
increase of 0.6% over the same period for 1999. The net loss for
the period was $716,494.


SUNTERRA CORP.: Fitch Places Receivable-Backed Notes on Watch
-------------------------------------------------------------
Fitch places the ratings of Signature Resorts Vacation
Ownership's receivables-backed notes 1998-A, class A-2 (rated
`A') and class A-3 (rated `BBB'); TerraSun LLC Vacation
Ownership's receivables-backed notes 1999-A, class B (rated `A'),
class C (rated `BBB') and class D (rated `BB'); and DutchElm LLC
Vacation Ownership's receivables-backed notes 1999-B, class B
(rated `A') and class C (rated `BBB') on Rating Watch Negative.

This rating action is a result of unusually high loan defaults
experienced by the three collateral portfolios.

Fitch will continue to monitor the performance of the trust
collateral for any signs of increasing delinquency or defaults.

It should be noted that the portfolio is serviced by Sunterra
Financial Services Inc., a subsidiary of Sunterra Corp., which
filed for bankruptcy in May 2000.


VISTA EYECARE: Inks Deal to Sell Freestanding Centers & N.Y. Lab
----------------------------------------------------------------
Vista Eyecare, Inc. (OTC Bulletin Board: VSTAQ) entered into a
purchase agreement to sell substantially all of the assets of its
freestanding Vision Centers and its Fullerton, California
Laboratory/Distribution Center to Vista Acquisition LLC,
Ronkonkoma, New York. Subject to Bankruptcy Court approval, the
transaction is expected to close in late March 2001 or early
April 2001.

Vista Acquisition LLC has an executive management team with an
aggregate of Optical Industry experience exceeding 100 years. The
retailing, managed vision care, and operations experience of the
team will direct the focus of the freestanding stores to
accomplish the initiatives of the company's long- term strategic
goals.

Following completion of the transaction, Vista will have 498
Vision Centers in host environments, including Wal-Mart, Wal-Mart
de Mexico, Fred Meyers, and selected Military locations. Vista
will retain two lab/distribution facilities to serve the host
vision centers.

Jim Krause, Chairman, President & CEO of Vista, commented "The
principals of Vista Acquisition have a very strong background in
the freestanding optical industry and we believe that this will
be a very positive event for our freestanding store associates
and customers. This transaction allows us to return to our roots
as a strong operator in the host environment. We can now finish
our plan of reorganization and file with the court in the next
few weeks. With court approval, we will emerge from bankruptcy
during the second quarter as a strong and focused company meeting
the needs of our customers".

Vista Eyecare, Inc. is an operator of Vision Centers in
freestanding and host department environments. The company filed
for protection under Chapter 11 of the Bankruptcy Code in April
2000.


WATERLINK INC.: Working to Restructure Senior Credit Facility
-------------------------------------------------------------
Waterlink Inc. is in violation of certain of its covenants under
its Senior Credit Facility. These covenant violations have
created an Event of Default under the Senior Credit Facility. At
December 31, 2000 the company had a working capital deficiency of
$24,714,000, which raises substantial doubt about its ability to
continue as a going concern for a reasonable period of time. The
company is in the process of discussing amendments to its Senior
Credit Facility with the objective of allowing the company to
operate while it continues with its previously announced
strategic alternative process. At this time, the company can give
no level of assurance that it will be able to negotiate
amendments to its Senior Credit Facility or what terms and
conditions will be required from its lenders.

Net sales for the three months ended December 31, 2000 were
$23,773,000, a decrease of $11,339,000, or 32.3%, from the
$35,112,000 in net sales reported in the comparable prior period.


WHEELING-PITTSBURGH: Makes Bid to Assume MPS Engineering Contract
-----------------------------------------------------------------
Wheeling-Pittsburgh Steel Corporation asked that Judge Bodoh
permit WPSC to assume and perform a contract with MPS Engineering
& Construction, Inc., to replace fume exhaust scrubbers at WPSC's
Allenport, Pennsylvania, facility. WPSC owns and operates a
rolling mill in Allenport that receives output form WPSC's hot
strip ill and processes it into a variety of "cold-rolled" steel
sheets of various widths and thickness. The Allenport facility
includes an acid cleaning or "pickling" facility, an annealing
facility to improve painting and coating capability, and a temper
mill that covers steel sheets with a coating of oil as a
protection against corrosion.

As part of the ordinary course of operations, the Allenport
facility must comply with environmental regulations. One such
requirement is that WPSC replace the existing pickle line fume
exhaust scrubber equipment at the Allenport facility and achieve
compliance with the new environmental standards by June 22, 2001,
or WPSC will face penalties and possible restrictions on the use
of the facility.

Prior to commencement of these cases, WPSC solicited competing
proposals to replace the fume exhaust scrubbers and MPS was the
winning bidder, having submitted the lowest bid and having been
determined by WPSC to have the capability of providing the
required services and equipment. Subsequently WPSC submitted
applications for environmental permits to allow the MPS equipment
to be installed at Allenport.

Although purchase orders were executed prior to the Petition
Date, and although MPS sent pre-petition invoices to WPSC in the
amount of $304,973, which have not been paid, MPS has retained
title to all of the relevant equipment, so that replacing MPS
with another contractor would mean that WPSC would still need to
bear the full cost of the project. Since MPS was the low
prepetition bidder, it is unlikely that WPSC could locate a
lower-priced contractor at this time. In addition, the project
must be completed by June 22, 2001, to avoid penalties and a
potential restriction in operation at the Allenport plant. The
MPS system is presently the only system that WPSC will have
permits to install at Allenport. WPSC is dubious that it could
solicit new proposals, choose a new contractor, obtain a new
permit and still complete installation of the required fume
exhaust scrubbers by the June 22 deadline.

The total price of the current MPS contract is $819m670. MPS and
WPSC have agreed that MPS will finish the project and submit
invoices to WPSC that would be payable on net 30 day terms from
the date of invoice, and that will be subject to a 10% retainage:

      Invoice Date   Invoice Amount   Retainage   Amount Due
      ------------   --------------   ---------   ----------
       01/17/01         $ 50,000      $ 5,000     $ 45,000
       02/15/01         $200,000      $20,000     $180,000
        3/15/01         $200,000      $20,000     $180,000
        4/15/01         $200,000      $20,000     $180,000
        5/15/01         $100,000      $10,000     $ 90,000
        6/15/01         $ 69,670      $ 6,967     $ 62,603
        7/15/01         $ 81,967     (retainage)
                                          Total $819,670

Notwithstanding this schedules, no payments have or will be made
until and unless Judge Bodoh first orders and approves the
assumption of this agreement.

WPSC also advised Judge Bodoh that it is not unusual, in
contracts of this type, for various change orders to be require
during the process of construction and installation. In order to
provide flexibility for such change orders, WPSC also sought
permission to implement change orders at an additional cost not
to exceed $60,000, without seeking further approval from the
Judge. (Wheeling-Pittsburgh Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


YORK FUNDING: Moody's Downgrades Securitized Notes to Junk
----------------------------------------------------------
Moody's Investors Service said that it downgraded three classes
of notes issued by York Funding Ltd. Series 1998-1. The affected
tranches are:

      * $51,000,000 Series 1998-1 Class III Notes from Baa3 to Ba1

      * $45,000,000 Series 1998-1 Class IV Notes from B1 to Caa2

      * $15,000,000 Series 1998-1 Class V Notes from B3 to Caa3

Moody's relates that the ratings downgrade result from (i)
significant defaults in the underlying reference pool and (ii)
significant deterioration in the credit quality of the reference
pool.

Moody's notes that since the transaction closed on June 18, 1998,
there have been several defaults within the reference pool and
that, since May of 1999, when the Class II, Class III, Class IV
and Class V were downgraded, there have been further defaults and
deterioration in pool quality. Accordingly, defaults within the
reference pool have been higher than anticipated at the time of
the rating agency's initial action of the transaction, while
recovery rates have been lower than anticipated. The reduction in
credit enhancement and the migration of the credit quality of the
reference assets has increased the expected losses associated
with the three classes of notes, Moody's says.

                           *********

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.

                      *** End of Transmission ***