TCR_Public/010315.MBX          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Thursday, March 15, 2001, Vol. 5, No. 52


ARIES VENTURES: Deadline For Securities Exchange is April 10
ART VAULT: Makes Assignment in Bankruptcy in Canada
BIBELOT: Baltimore Book Retailer Plans to Liquidate
BRIDGE INFORMATION: Obtains Injunction against Utility Companies
BRUNSWICK CORP.: Under FTC Investigation re Outboard Marine Deal

BUENOS AIRES: S&P Rates Province's US$100MM Treasury Notes at B
CALIFORNIA POWER: Files for Chapter 11 Bankruptcy Protection
CLARIDGE HOTEL: Reports $38.2 Million Net Loss in 2000
CROWN BOOKS: Taps Hilco Merchant to Manage 43-Store GOB Sale
EDWARDS THEATRES: Court Approves Sale of Two Parcels for $741,500

ENCRYPTIX INC.: Subsidiary Calls it Quits
FINOVA GROUP: Court Okays Continued Use Of Cash Management System
HARNISCHFEGER: Equity Committee Draws Confirmation Battle Line
HARNISCHFEGER: Moves To Estimate Potlatch Claim Against Beloit
HVIDE MARINE: Loomis Sayles Discloses 60.7% Equity Stake

INTERNATIONAL THERMAL: Needs More Funds To Continue Operations
LACLEDE STEEL: Secures New $61.5MM Credit Facility for 3 Years
LASON INC.: Selling Assets of Marketing Associates Division
LERNOUT & HAUSPIE: Seeks Court's Nod On Premium Finance Agreement
LOEWEN GROUP: Settles Disputes With Rafelson Heirs & Insurer

LTV CORP.: Objects To Bethlehem's Motion re Columbus Coating
METROCALL INC.: Moody's Slashes Senior Subordinated Notes To Caa3
NATIONAL HEALTH: Engages Sprouse & Winn as New Public Accountants
NC INC.: On-Line Event Promoter Cuts Jobs & Shuts Down Sites
OPTEL INC.: Asks for Extension to July 31 to Decide on Leases

OWENS CORNING: Seeks Okay For Employee Compensation Programs
OXFORD HEALTH: Completes Execution Of Turnaround Plan
PACIFIC AEROSPACE: Planning To Sell British Unit
PAUL HARRIS: Terminating Business Operations
PAUL HARRIS: Eyes Filing Plan of Liquidation Plan within 45 Days

PAWNMART INC.: Embarks On Operational and Financial Restructuring
PSINET INC.: Inks $300MM Sale Agreement to Raise Needed Funds
RAYTHEON CO.: First Union Ups Rating To Buy From Market Perform
SAFETY-KLEEN: Seeks Order Compelling PwC To Produce Documents
STAR TELECOM: Files for Bankruptcy & Top Level Executives Resign

STAR TELECOM: Case Summary & 20 Largest Unsecured Creditors
SUMMIT CBO: S&P Puts A and B Notes Ratings on Credit Watch
SUN HEALTHCARE: Amends $200,000,000 DIP Facility for Second Time
VALUE AMERICA: Proposes Plan Of Liquidation
VALUE AMERICA: Hewlett-Packard Objects to Disclosure Statement

VIDEO CITY: Wants More Time To Assume and Reject Property Leases
VLASIC FOODS: Posts Second Quarter 2001 Results
VLASIC FOODS: Agrees to Sell Two U.K. Businesses
WORK.COM: Plans to Shut Down By Month's End


ARIES VENTURES: Deadline For Securities Exchange is April 10
Aries Ventures Inc., a Nevada corporation, the successor to
Casmyn Corp., a Colorado corporation (OTC: ARVT), as previously
announced, had its Second Amended Chapter 11 Plan of
Reorganization confirmed by the United States Bankruptcy Court on
March 31, 2000.

Pursuant to Court order, all certificates for old preferred stock
and common stock must be presented to the Company's transfer
agent by the close of business on April 10, 2001 in order to
receive the cash or new securities authorized by the Plan.

Holders of old securities that miss this deadline will not be
entitled to receive any distributions under the Plan, and the
Company will automatically cancel such old securities without any
further notice or action. Only shareholders of record at the
close of business on April 11, 2000 (the effective date for the
Plan) are entitled to receive the cash or the new securities
pursuant to the Plan.

In order not to miss this critical deadline, as previously
announced, shareholders who hold their share certificates
directly should immediately send them to the Company's transfer
agent, Computershare Investor Services, 12039 West Alameda
Parkway, Suite Z-2, Lakewood, Colorado 80228 (telephone: 303-986-
5400; fax: 303-986-2444). Shareholders who hold their shares
through brokerage accounts should immediately contact their
brokers to arrange for their share certificates to be sent to the
Company's transfer agent prior to the April 10, 2001 deadline.

ART VAULT: Makes Assignment in Bankruptcy in Canada
Due to market conditions leading to the inability to obtain
financing, The Art Vault International Limited (CDNX:ARV.) and
its subsidiary, The Art Vault Limited, are unable to meet their
obligations as they generally become due.

Therefore, pursuant to a unanimous resolution passed at a duly
convened meeting of the Board of Directors, it has been resolved
that The Art Vault International Limited and its subsidiary, The
Art Vault Limited file an Assignment in Bankruptcy and for that
purpose Schwartz Levitsky Feldman Inc. has been appointed

BIBELOT: Baltimore Book Retailer Plans to Liquidate
Bankrupt Bibelot, the second Baltimore-area book chain to file
for bankruptcy in a month, seeks court's approval for plans to
shut its doors under a chapter 11 liquidation, according to The Baltimore-based Bibelot, a four-store mom-and-
pop outfit battling increasing industry domination by giant
chains, will ask Judge James Schneider to approve plans to
liquidate its assets so it can cease operations in about three
months, said Richard Goldberg, lead debtor counsel at Shapiro
Sher & Guinot.

Bibelot listed $15 million in assets and liabilities of $15
million to $20 million when it filed as Bloomsbury Group Inc. on
Friday in U.S. Bankruptcy Court in Baltimore.  The Weese family-
owned mini-chain defaulted in May 2000 on its $17 million major
credit facility with Bank of America NA and plans to keep its two
Baltimore stores, and two others in Canton and Pikesville, Md.,
open during bankruptcy proceedings. The company plans to lay off
its 150 full- and part-time employees when liquidation is
completed. Bibelot opened its first store in Pikesville in 1995
and grew into a four-outlet chain as one of a dwindling number of
independent booksellers that expanded in the face of growing
competition from giant nationwide chains such as Barnes & Noble
Inc. and Borders Group Inc. (ABI World, March 13, 2001)

BRIDGE INFORMATION: Obtains Injunction against Utility Companies
Scores of Utility Companies provide electricity, telephone
service and data transmission services to Bridge Information
Systems, Inc. which allow the Company to disseminate their
financial information and news products to over a quarter-million
users in over 65 countries.

Customers, Bridge reminded the Court, enter into contracts with
the Debtors in reliance on the Debtors' ability to provide
constant and up-to-the-minute financial information through these
services. "Even the temporary failure of the Debtors to provide
immediate information to Customers would cause irreparable harm
to the Debtors' relationships with its Customers and to the
Debtors' business," Gregory D. Willard, Esq., at Bryan Cave LLP
says. "The Debtors would not be able to operate their businesses
without these services from Utility Companies."

Pursuant to 11 U.S.C. Sec. 366, if the Debtors do not provide
each Utility Provider with "adequate assurance of payment" for
post-petition utility service within 20 days of the Petition
Date, the Utility Companies may elect to "alter, refuse or
discontinue service." Ordinarily, a chapter 11 debtor provides
"adequate assurance" in the form of a cash deposit. That, Bridge
argued to Judge McDonald, would be an improvident of Bridge's
cash in these chapter 11 cases.

The Debtors told the Court that they have an excellent
prepetition payment history with each of the Utility Companies.
Other than utility bills not yet due and owing as of the Petition
Date, which the Debtors are prohibited from paying as a result of
the commencement of these chapter 11 cases, the Debtors
historically have paid their prepetition utility bills in full
when due. The Debtors also represent that they have sufficient
cash reserves, together with anticipated access to sufficient
debtor in possession financing, to pay promptly all of their
respective obligations to the Utility Companies for postpetition
utility services on an ongoing basis and in the ordinary course
of their businesses. Moreover, they note, all such claims will
be entitled to administrative priority treatment under the Code,
providing additional assurance that future obligations to the
Utility Companies will be satisfied in full. Finally, certain of
the Utility Companies currently may hold cash security deposits
or other forms of security to insure the Debtors' payment of
future utility bills. These facts, the Debtors say, show that
the Utility Companies already have adequate assurances that
post-petition invoices will be paid.

Based on this evidentiary record, Judge McDonald entered an Order
finding that the Utility Companies are adequately protected and
prohibiting Utility Companies from altering, refusing or
discontinuing service to Bridge. If a Utility Company believes
that it does not have adequate assurance within the meaning of
Sec. 366, Judge McDonald's order is without prejudice to the
right of the Utility to ask for a determination hearing on the
subject with the next 30 days. (Bridge Bankruptcy News, Issue No.
2; Bankruptcy Creditors' Service, Inc., 609/392-0900)

BRUNSWICK CORP.: Under FTC Investigation re Outboard Marine Deal
Brunswick Corp., one of the world's largest boat and marine
engine makers, is under investigation by the Federal Trade
Commission (FTC) for possible antitrust violations, according to
Reuters. The FTC is investigating whether Brunswick's bidding for
certain assets of Outboard Marine Corp.'s engine business as a
part of Outboard's bankruptcy is a violation of U.S. antitrust
laws, Brunswick said in its annual report filed on Friday with
the Securities and Exchange Commission (SEC). The FTC began an
investigation in 1997 of some of Brunswick's marketing practices
concerning the sale of sterndrive marine engines to boat builders
and dealers, according to the SEC filing. Brunswick moved last
December to get the FTC to close that probe after the company
received a favorable ruling in a separate litigation involving
the same marketing practices, Brunswick said. (ABI World, March
13, 2001)

BUENOS AIRES: S&P Rates Province's US$100MM Treasury Notes at B
Standard & Poor's assigned its single-'B' short-term foreign
currency rating and its 'raA-1' short-term national scale rating
to the Province of Buenos Aires' US$100 million treasury notes
due in March 2002. The outlook is stable.

The rating reflects the following credit pressures:

      -- A deterioration of the province's finances over the past
three years and a significantly greater-than-anticipated fiscal
deficit for 2000;

      -- Reliance on economic growth to re-establish a fiscal
balance given the province's very limited ability to cut

      -- The expectation that the province will produce wide
operating and fiscal deficits during 2001, and quite likely,
through at least 2003; and

      -- A rapidly growing debt burden that will continue to
accumulate through at least 2001.

The ratings remain supported by the following credit strengths:

      -- The province's large and diverse economic base,
representing 35% of Argentina's GDP and 39% of the country's

      -- The province's relatively low, although rising, debt
ratios compared to GDP, even after three years of fiscal
weakening; and

      -- Access to capital from a large number of sources.

After two years of financial stress, the province forecasts an
improvement in fiscal performance in 2000. The slow pace of the
economic recovery and the inability of the province to reduce
operating expenditures, however, have negatively affected
operations. The results throughout the year were disappointing
and underscored the likelihood of a considerably greater-than-
expected fiscal deficit for 2000. Up until November 2000, the
province's finances showed an operating deficit of US$1.1 billion
and a fiscal deficit (including capital revenues and
expenditures) of US$1.5 billion. The original budget projected an
improvement in fiscal performance relative to 1999, with the
full-year operating deficit forecast at US$734 million and the
fiscal deficit at US$1.36 billion. According to provincial
officials, the end of the year fiscal deficit will be about US
$1.83 billion while the official final number might be higher
than that (for instance, including a transfer of US $100 million
in late December to Banco Provincia due to capitalization agreed
between the province and its fully owned bank).

Even though the province maintained current spending in 2000 at
1999 levels, revenues, in particular those taxes collected
directly by the province (50% of operating revenues), were lower
than they were in 1999 and significantly below the 2000 forecast.
For 2001, the province does not forecast a reversal of the
negative fiscal performance, estimating a fiscal deficit of
US$1.45 billion.

To fund the growing deficits, the province has assumed additional
debt in recent years. As of November 2000, the province's
outstanding debt reached US $3.28 billion, or a still moderate
36% of total revenues and 3.2% of the province's GDP. This
figure, however, excludes certain outstanding obligations,
including short-term issues and debt the province owes to its own
bank. If these liabilities are included, along with a new
borrowing done before the end of 2000, the debt burden would
increase significantly to US $4.7 billion, which is equivalent to
49% of total revenues and 4.7% of GDP -- a growing but still
moderate level.

The stable outlook acknowledges the province of Buenos Aires'
economic strength and diversity and assumes a slow but steady
decline in operating and fiscal deficits. Furthermore, Standard &
Poor's expects the province to maintain a moderate debt burden.

CALIFORNIA POWER: Files for Chapter 11 Bankruptcy Protection
The California Power Exchange (CalPX), the electricity auction
market established by the state's flawed deregulation scheme,
filed on Friday for chapter 11 bankruptcy protection in the U.S.
Bankruptcy Court in the Central District of California, according
to Reuters. The move was widely anticipated in the electricity
industry after the Exchange warned on Jan. 19 that California's
chaotic power market had made it "no longer possible to
deliver... services" and said it was unwinding its affairs.

The Exchange, based in Pasadena, Calif., ran the state's power
marketplace from March 31, 1998, until Jan. 30, 2001, when it
halted operations after the state's near-bankrupt utilities
stopped making payments of hundreds of millions of dollars for
power bought through the Exchange and its credit ratings were
slashed. "With the suspension of the CalPX's markets and due to
the multiplicity of litigation that has followed, the chapter 11
filing will allow for better handling of services that the
corporation still provides," the Exchange said.

On Friday, the Federal Energy Regulator Commission (FERC) ordered
CalPX to refund $378,614 as part of an order directing 13 energy
suppliers to refund $69 million in overpriced power sales or to
justify their high prices for electricity. FERC chairman Curt
Hebert said the refund order, issued late on Friday, was intended
to ensure appropriate and reasonable prices for wholesale power
in the California market. (ABI World, March 13, 2001)

CLARIDGE HOTEL: Reports $38.2 Million Net Loss in 2000
The Claridge Hotel and Casino Corporation, operator of the
Claridge Casino Hotel here, announced its 2000 financial results.

The Corporation reported a Net Income for the year ended December
31, 2000, of $516,000. The Corporation's Income Before
Reorganization Items and Income Taxes was $4.2 million.
Reorganization Items included an expense of $4.5 million for
professional fees and $860,000 of interest income from
accumulated cash. For the year ended December 31, 1999, the
Corporation reported a Net Loss of $38.2 million and Income
Before Reorganization Items and Income Taxes of $531,000. In 1999
Reorganization Items included an expense of $1.3 million in
professional fees, $142,000 of interest income from accumulated
cash and a $37.6 million provision for impairment of the
Expandable Wraparound Mortgage receivable which was written down
to its estimated realizable value in light of the bankruptcy
filings of the Corporation, its subsidiary The Claridge at Park
Place, Inc., and Atlantic City Boardwalk Associates, L.P., the

Earnings before interest, taxes, depreciation and amortization,
when adjusted to eliminate the effects of the related limited
partnership structure ("Adjusted EBITDA"), was $6.9 million for
the full year of 2000 compared to $10.7 million for 1999.

On August 16, 1999, The Corporation and The Claridge at Park
Place, Incorporated filed voluntary petitions under Chapter 11 of
the U.S. Bankruptcy Code in order to facilitate a financial
restructuring. On October 5, 1999, Atlantic City Boardwalk
Associates, L.P., a related limited partnership, filed a
voluntary petition under Chapter 11 of the U.S. Bankruptcy Code.
Due to the bankruptcy filing, the Corporation ceased to record
interest expense.

"We are pleased to report improved operating results in 2000. The
improvement was achieved despite the distractions of our
bankruptcy filing and the impending sale of the company as the
result of our employees' focus on serving our customers. We saw a
$2.1 million (21.7%) year-to-year improvement in Adjusted EBITDA
in 2000 after eliminating the effect of reorganization items in
2000 and 1999, the effect of a $1 million contractual annual
increase in payments to the limited partnership in 2000 and the
effect of the garage settlement in 1999."

The Claridge Hotel and Casino Corporation, through its
subsidiary, The Claridge at Park Place, Incorporated, operates
the Claridge Casino Hotel in Atlantic City. The casino hotel
opened in July 1981 and has 59,000 square feet of casino gaming
space. The Claridge Hotel and Casino Corporation is a closely
held public corporation. Its Corporate Bonds are publicly traded
on the New York Stock Exchange under the symbol CLAR11B02.

CROWN BOOKS: Taps Hilco Merchant to Manage 43-Store GOB Sale
Hilco Merchant Resources related that the  U.S. Bankruptcy Court
in Delaware approved the selection of Hilco Merchant Resources to
manage the liquidation process in 43 stores operated by Crown
Books. Going out of business sales have just started at the 43
Crown Book Stores that are located in California, Illinois,
Maryland and Virginia.

Hilco Merchant Resources was instrumental in facilitating Books-
A-Million Inc., obtaining nineteen stores as going concern
stores. These stores will continue in operation. Hilco Merchant
Resources have back stopped the nineteen store transaction. In
the event that any of the lease assignments are not transferable
to Books-A-Million, then Hilco Merchant Resources will liquidate
those additional stores.

"We are extremely pleased to have been selected to lend our
expertise in this situation", said Mike Keefe President and Chief
Executive Officer of Hilco Merchant Resources, LLC., a subsidiary
of Hilco Trading Co., Inc. "our group is the foremost specialist
in helping retailers realize value."

"This will be an excellent opportunity for consumers to find some
outstanding values. The forty-three stores will be closing
forever with some of the lowest prices ever seen at a Crown or
any other book store," stated Cory Lipoff, Executive Vice
President of Hilco Merchant Resources.

Hilco Merchant Resources is the foremost industry expert in the
conversion of books into cash. Hilco and its principals have
assisted a number of retailers and distributors in the book

Hilco a Chicago based firm with offices in Boston, Toronto and
London is a broad-spectrum financial resource with unparalleled
asset knowledge and expertise.

Hilco is composed of the top people in the fields of inventory,
machinery, equipment and real estate appraisal services,
machinery & equipment auction services, real estate services,
merchant resources for the redeployment of inventory, acquisition
of receivables and junior secured debt financing. This senior
management team has an average of 20 years in their respective
business area and Hilco has done in excess of $15 Billion in

With Hilco, you get the benefit of working with an experienced,
entrepreneurial organization that's dedicated to providing
creative financial solutions.

                     List of Crown Book Stores
                         That are Closing

Store Name
   Address                                 City            State
El Segundo
  2041 Rosecrans Avenue               El Segundo              CA
Fountain Valley
  18309 Brookhurst St. #5             Fountain Valley         CA
Granada Hills
  16836 Devonshire St.                Granada Hills           CA
La Canada
  475 Foothill Blvd.                  La Canada               CA
La Jolla
  8657 Villa La Jolla Drive           La Jolla                CA
Laguna Niguel
  32411 Street of the Golden Lantern  Laguna Niguel           CA
  765 Broadway                        Millbrae                CA
Mountain View
  590 Showers Drive                   Mountain View           CA
  108 Vintage Way B1                  Novato                  CA
  2180 Vista Way                      Oceanside               CA
Palm Desert
  72-359 Highway #111                 Palm Desert             CA
Palm Springs
  333 S. Palm Canyon Drive            Palm Springs            CA
  3725 E. Foothill Blvd.              Pasadena                CA
Rancho Santa Margarita
  30622 Rancho Santa Margarita Pky.   Rancho Santa Margarita  CA
  3790 Tyler St.                      Riverside               CA
Rolling Hills Estates
  51 B. Peninsula Center              Rolling Hills Estates   CA
San Diego
  4711 A Clairemont Drive             San Diego               CA
San Diego
  1640 Camino De La Reina, Bldg. A    San Diego               CA
San Diego
  1776 Garnet Ave.                    San Diego               CA
San Diego
  3309 Rosecrans St.                  San Diego               CA
San Dimas
  810 West Arrow Highway              San Dimas               CA
San Jose
  910 El Paseo De Saratoga            San Jose                CA
San Jose
  858 Blossom Hill Rd.                San Jose                CA
San Pedro
  806 N. Western Ave.                 San Pedro               CA
San Ramon
  2005 Crow Canyon Place              San Ramon               CA
Santa Monica
  2800 Wilshire Blvd.                 Santa Monica            CA
Santa Rosa
  2080 Santa Rosa Ave.                Santa Rosa              CA
Sherman Oaks
  4454 Van Nuys Blvd.                 Sherman Oaks            CA
Simi Valley
  1281 East Los Angeles Avenue        Simi Valley             CA
South Pasadena
  900 Fairoaks Ave.                   South Pasadena          CA
  789 E. El Camino Real               Sunnyvale               CA
  2070 Harbison Drive                 Vacaville               CA
  15619 Whittwood Lane                Whittier                CA
  1714 Sheffield Ave.                 Chicago                 IL
  6557 Grand Avenue, Suite # 100      Gurnee                  IL
  476 South Rte  #59                  Naperville              IL
West Dundee
  310 N. Eighth Street                West Dundee             IL
  165 Jennifer Road.                  Annapolis               MD
  295 Kentlands Blvd.                 Gaithersburg            MD
  7495 Greenbelt Road                 Greenbelt               MD
  11921-11935 Georgia Ave.            Wheaton                 MD
  13005 Lee Jackson Mem. Hwy. #H      Fairfax                 VA
  9508 Main Street, #22-B             Fairfax                 VA

EDWARDS THEATRES: Court Approves Sale of Two Parcels for $741,500
Debtor Edwards Theatres Circuit, Inc., a California corporation
and Debtor San Carlos Amusement Co., a California corporation are
record owners of two parcels of real property both located in Los
Angeles, California, both located in the Tujunga section of the
city. The debtors have received and accepted an offer of $741,500
from Setrag Karadolian and Sarkis Gumrikyan, Buyer. The Buyer
acknowledges that other bidders are authorized to submit bids on
or before the hearing on this motion, and the court may approve a
higher and better bid to purchase the Tujunga property.

ENCRYPTIX INC.: Subsidiary Calls it Quits
EncrypTix Inc., a majority-owned subsidiary of Inc.
(STMP), announced that its board of directors has voted to adopt
a plan of liquidation and that the company has ceased its

The privately held EncrypTix has received all necessary
shareholder approvals and has effected an assignment of its
assets for the benefit of creditors. EncrypTix has taken this
action due to the inability to secure additional funding.

In April, 2000, Inc. sold approximately 42% of
EncrypTix, Inc., in a $35.8 million private financing deal from a
group of financial and strategic investors that includes Vulcan
Ventures, American Express Travel Related Services Company, Inc.,
Galileo International,, Inc., Loews Cineplex
Entertainment Corporation, Mail Boxes Etc. USA, Inc., Mitsubishi
International Corporation, Sabre, Inc., SunAmerica Investment
Inc. and, Inc.

The proceeds of that financing were used by EncrypTix for
research and development, sales and marketing and general working
capital purposes. was hopeful that EncrypTix would
leverage many of the proprietary, Internet-based technologies
developed by in the events, travel and financial
services industries, enabling sellers and distributors of tickets
and financial instruments to deliver value-bearing instruments
such as tickets, vouchers, boarding passes and gift certificates
over the Internet.

FINOVA GROUP: Court Okays Continued Use Of Cash Management System
The FINOVA Group, Inc., employs an integrated centralized cash
management system to collect, transfer and disburse funds
generated by their operations and to accurately record all such
transactions as they are made. This Cash Management System is
managed by FINOVA's Treasury Department and includes, among other
things, centralized cash forecasting and reporting, collection
and disbursement of funds and administration of the company's
Bank Accounts required to effectuate the Debtors' collection,
disbursement and movement of cash.

William J. Hallinan, FINOVA's President, Chief Executive Officer,
General Counsel, told the Court the Debtors obtain cash
management services primarily through Citibank. On a daily
basis, substantially all of the cash remaining in the Debtors'
Cash Management System is consolidated into Concentration
Accounts and then disbursed as necessary to fund operations.

The Debtors have used this Cash Management System for years,
Janet M. Weiss, Esq., at Gibson, Dunn & Crutcher LLP relates.
The Cash Management System is highly automated and computerized
and includes the necessary accounting controls to enable the
Debtors, as well as creditors and the Court, if necessary, to
trace funds through the system and ensure that all transactions
are adequately documented and readily ascertainable. The Debtors
will continue to maintain detailed records reflecting all
transfers of funds including, but not limited to, intercompany

The Debtors' cash management procedures are ordinary, usual and
essential business practices, and are similar to those used by
other major corporate enterprises. The Cash Management System
provides significant benefits to the Debtors, including the
ability to (a) control corporate funds centrally, (b) invest idle
cash, (c) ensure availability of funds when necessary and (d)
reduce administrative expenses by facilitating the movement of
funds and the development of more timely and accurate balance and
presentment information. In addition, the use of a centralized
Cash Management System reduces interest expenses by enabling the
Debtors to better utilize funds within the system rather than
relying upon short-term borrowing to fund cash requirements.

The operation of the Debtors' businesses requires the continued
use of the Cash Management System during the pendency of these
chapter 11 cases. Requiring the Debtors to adopt new, segmented
cash management systems at this critical stage of these cases
would be expensive, would create unnecessary administrative
burdens, and would be much more disruptive than productive,
adversely impacting the Debtors' ability to confirm a
reorganization plan. Consequently, maintenance of the existing
Cash Management System is in the best interests of all creditors
and other parties-in-interest.

Considering the merits of the Debtors' arguments, Judge Wizmur
granted the Debtors' request to maintain their existing cash
management system. (Finova Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

HARNISCHFEGER: Equity Committee Draws Confirmation Battle Line
The Official Committee of Equity Security Holders of
Harnischfeger Industries, Inc., tells Judge Walsh that it will
prove at the confirmation hearing that the value of the
Reorganized Debtors is higher than $1.6 billion.

The facts, Erica M. Ryland, Esq., and Andrew S. Dash, Esq., at
Berlack, Israels & Liberman LLP, explain, belie Harnischfeger
management's projections and the resulting less-than-$1.6 billion
valuation because:

      (a) Joy is the global market leader in its business;

      (b) Joy has always generated a substantial, positive EBITDA;

      (c) Joy has experienced improving profit margins since a
          cyclical low in 1999; and

      (d) experts say that demand for coal will grow more rapidly
          than in the past, and more significantly than previously

The Equity Committee contends that management has premised its
plan of reorganization on flawed financial projections showing
that Joy's sales will rise this year and next and then suffer
from an inexplicable substantial and permanent diminution in
profitability and demand for its products.

The Equity Committee asserts that Harnischfeger's plan can't
achieve confirmation because it is not fair and equitable as
required under 11 U.S.C. Sec. 1129(b).  Creditors, the Equity
Committee charges, will walk away under Harnischfeger's plan with
a recovery in excess of 100% of their claims.

The Equity Committee is ready for a contested confirmation
hearing on April 3, 2001, and ready to teach Judge Walsh more
about the future of coal production than he ever suspected. Total
enterprise value will be the issue of the day. The Equity
Committee is on one end of the spectrum and the Debtors and their
creditors are on the other. The parties see a $627 million
difference in the value of Reorganized HII attributable to
assumptions about Joy and coal production.

As previously reported in the Troubled Company Reporter and
detailed in Harnischfeger Bankruptcy News, the Debtors filed
their Third Amended Plan of Reorganization and a Third Amended
Disclosure Statement in support of that plan on December 26,
2000. That Third Amended Plan is premised on a valuation report
prepared by The Blackstone Group. Blackstone estimates that the
enterprise value of the New Company falls between $925 million
and $1.115 billion, with a pinpoint value of $1.02 billion.
Blackstone further estimates that the aggregate value
attributable to the New HII Common Stock to be issued under the
plan falls between $598 and $783 million, with a pinpoint value
of $688 million.

The Debtors' best estimate of unsecured claims against its
estates is $1.162 billion.  Because the absolute priority rule
buried in Section 1129(b)(2)(B) of the U.S. Bankruptcy Code
requires full payment of all creditors' claims plus post-petition
interest before any shareholder could collect a dime, the plan
must deliver $1.315 billion (assuming a 7.5% interest rate
applied over a 21 month period) to the Debtors' unsecured
creditors or shareholders, plainly and simply, are out of the
money. Blackstone's valuation leaves a $627 million shortfall.
Black letter bankruptcy law based on Blackstone's valuation says
shareholders take nothing when Harnischfeger emerges from
chapter 11.

Houlihan Lokey Howard & Zulkin, representing the Official
Committee of Unsecured Creditors appointed in HII's chapter 11
cases, undertook its own independent valuation and reviewed
Blackstone's valuation. Houlihan reached the same material
conclusions as did Blackstone.

The Equity Committee, however, is convinced that the Debtors,
Blackstone, the HII Creditors' Committee and Houlihan are wrong
because their assumptions are flawed. Goldin Associates, L.L.C.,
representing the Equity Committee, points to two things that
boost the value of Reorganized HII by at least $627 million:

      (1) the outlook for coal production has materially improved
          during the past year; and

      (2) President-elect Bush has pledged to reverse the policies
          of the Clinton Administration that discouraged domestic
          coal production and use of coal.

James H.M. Sprayregan, Esq., at Kirkland & Ellis in Chicago, says
that the Debtors have asked the Equity Committee to quantify how
the outlook for coal production changes the Blackstone's analysis
and to explain their speculative assertion that the new President
will be able to change policies that affect the coal industry,
but they've not received a complete answer. Seymour Preston, Jr.,
the Managing Director at Goldin who leads the Harnischfeger
Engagement at a cost of $54,000 per month did share a copy of a
four-page article entitled, "A Comeback for Coal; With Oil Prices
High, It's Looking Cheap -- And It's Abundant" appearing in the
December 11, 2000, edition of Business Week, with the Debtors,
the Committees, and their professionals.

Each side has lined-up a coal market expert:

      (a) Mark T. Morey at Resource Data International, Inc. --
          billing $275 per hour -- is ready to debunk the Equity
          Committee's fantasies and testify that the Debtors'
          assumptions are rock solid; and

      (b) Seth Schwartz at Energy Ventures Analysis, Inc. --
          billing $230 an hour -- will champion the Equity
          Committee's views about the favorable macroeconomic
          climate for coal demand, production and related mining

The Official Committee of Equity Security Holders tells
Harnischfeger that it will show all of its cards at the hearing
before Judge Walsh to consider confirmation of the Third Amended

Ms. Ryland says her team of lawyers representing the Equity
Committee will put Goldin professionals and a parade of other
experts on the witness stand to testify that the projections and
macroeconomic assumptions contained in the Debtors' business plan
are flawed and to prove that the demand for coal has changed
dramatically due to rapidly rising prices (and threats of
shortages) of alternative energy sources such as natural gas and

Blackstone's valuation "is premised on a business plan developed
by the Debtors nearly a year ago," Ms. Ryland explains. "The
business plan and the derivative valuation fail to reflect that
the outlook for coal production (a key driver of the Debtors'
business plan) has changed dramatically over the past year
because of a growing energy crisis in this country and around
the world," Ms. Ryland continues. Additionally, the Equity
Committee will argue at the confirmation hearing that HII has
understated projected sales to growth markets such as China,
Russia, India and Poland will be materially higher than
what management told Blackstone.

The HII Creditors' Committee, represented by Lindsee P.
Granfield, Esq., at Cleary, Gottlieb, Steen & Hamilton, will
likely lend its support to the argument that, while the value of
Reorganized HII might be higher than what Blackstone concludes,
the suggestion that the value is 60% higher is ludicrous. The
Beloit Creditors' Committee, represented by Wendell H. Adair,
Esq., at Stroock & Stroock & Lavan LLP, would be expected to
provide a measure of harmony to that refrain.

Procedurally, Laura Davis Jones, Esq., at Pachulski, Stang,
Ziehl, Young & Jones P.C., serving as local counsel to the
Debtors, relates, Harnischfeger obtained Judge Walsh's approval
of their Third Amended Disclosure Statement on December 20, 2000.
The Court found that the Disclosure Statement provides creditors
with information of kind, and in sufficient detail, to enable a
hypothetical reasonable investor to make an informed judgment
about the plan and to decide whether they should vote to accept
or reject the plan. Copies of the Plan and Disclosure Statement
were mailed to all of the Debtors' creditors together with
customized ballots and solicitation letters from the various
constituencies. Although the official tally is still under wraps,
it is more probable than not that creditors voted to accept the
Debtors' plan by a wide, wide margin. That fact, of course, cuts
both ways. The Debtors and the Creditors' Committees would say
that creditors have consented to the debt-compromising haircut
the plan calls for while the Equity Committee would say that the
creditors have banded together in a conspiracy to steal value
from HII shareholders.

HARNISCHFEGER: Moves To Estimate Potlatch Claim Against Beloit
Potlatch Corporation filed two proofs of claim based on alleged
breach of warranty and breach of contract by Beloit in connection
with the sale to Potlatch of seven pulp washers under contract
dated August 22, 1989:

      (a) No. 5722 in the amount of $117,636,248 against Beloit
          (the  Potlatch Claim); and

      (b) No. 5723 in the amount of $117,636,248 against HII
          (deemed to be zero by Court order).

Fo this matter, Harnischfeger Industries, Inc. asked the Court to
approve: (1) estimation of the Potlatch Claim at zero for all
purposes; and (2) Estimation Procedures.

As previously reported, Potlatch's claim is the subject of an
action pending in the District Court of Nez Perce County, Idaho.
The proceeding is captioned Potlatch Corporation v. Beloit
Cortoration, Index No. 95-01992.

The case was tried by a jury in Lewiston, Idaho. The Debtors told
Judge Walsh that Potlatch was the largest employer in Idaho and
the case was tried there despite a venue provision in the written
contract that any court action would be resolved in a San
Francisco, California court.

After a three month trial, the jury awarded Potlatch every penny
it asked for, the Debtors related. An amended judgment after jury
verdict was entered by the trial court against Beloit together
with over $4.6 million in costs on December 16, 1997 in the
amount of $95,058,764. The judgment was reversed by the Idaho
Supreme Court in a 5-0 decision dated April 2, 1999, and remanded
back to the trial court for a new trial on all issues, the
Debtors say. Before the Idaho trial court acted on the remand,
HII, Beloit, and other subsidiaries filed for bankruptcy on June
7, 1999. As a result, there has been no determination of
liability of any sort, by an Idaho Court.

                Beloit's Position on Damages

Beloit believes that, if it is liable to Potlatch at all, it is
in an amount for less than the amount asserted in the Potlatch
Claim. Specifically, Beloit objects to:

      -- pre-judgment interest in the amount of $ 12,794,808.

      -- Potlatch's lost profits because the contract agreement
provides that Beloit is not liable for consequential damages.

      -- damages asserted by Potlatch at the first trial related

        * replacement costs of $53,122,379 and prejudgment
          interest of $4,365,229

        * bypass piping costs of $965,467 and interest of $401,729

        * damages of $2,278,593 for materials and labor to replace
          wires and seals on washers

        * damages (including interest) of $6,721,337 for alleged
          losses attributable to deficiencies in the Beloit

        * damages attributable to the loss of the fuel value of
          the black liquor of $381,815

        * damages of $444,854 allegedly attributable to overtime
          due to Beloit washer deficiencies claimed

        * damages of $7,820,607 allegedly attributable to the cost
          of buying baled pulp that should have been produced by
          the pulp mill

        * damages (including interest) of $560,444 for inspecting
          the welding associated with welds on the washers

        * damages for lost profits of $15,246,730 and interest of

The Debtors argued that the Potlatch Claim should be estimated at
zero because it is contigent and unliquidated and would unduly
delay administration of the case, given the substantial amount of
$117 million claimed.

                Approval of Estimation Procedures

The Debtors proposed that estimation of the Potlatch Claim follow
procedures whereby:

(1) Beloit and Potlatch are each granted four hours to present
     their evidence and/or cross-examine the adverse witness,
     during the hearing.

(2) With the exception of one damage witness for each side, all
     evidence is presented in written form-either by
     declaration/affidavit, briefing, or by documents in the case.

(3) No later than three weeks before the hearing date, the
     written Record shall be exchanged between the parties.

(4) No later than two weeks before the hearing date, all
     evidentiary challenges to the Record should be resolved
     between the parties, and/or determined by the bankruptcy

(5) No later than one week before the hearing date, each party is
     allowed to depose the other party's expert witness. Such
     depositions shall last no more than four hours per side.

(6) At the hearing, the expert witness for each side is allowed
     to testify for no more than two hours; cross-examination of
     each such witness is limited to 45 minutes.

         Potlatch's Objections - Estimation is Unnecessary

Potlatch contends that the Debtors' estimation motion should be

First, estimation of Potlatch's claim is not necessary now and
may never be necessary, Potlatch argued. Potlatch pointed out
that the reorganization plan in the Beloit case is a straight
liquidating plan, contemplating the liquidation of the assets of
the Debtor and the distribution to proceeds of that liquidation
to creditors as their interests appear. Estimation of Potlatch's
claim is not required for the Plan to be confirmed, Potlatch
said, because Potlatch does not object to Plan confirmation and,
indeed, is prepared to vote in favor of the Plan.

Nor is estimation of Potlatch's claim necessary for the Plan to
be administered, Potlatch asserts. The plan contemplates the
claims allowance and liquidation process continuing post
confirmation under the direction of a Plan Administrator, and
provides for appropriate reserves to be established on account of
disputed claims if and when distributions are made to creditors.

Moreover, given the financial status of the Beloit estate, it is
highly unlikely that any significant distribution will be made to
prepetition unsecured, non-priority creditors like Potlatch for
some time after confirmation. The only real asset available for
payment of such distributions, Potlatch observes, is the APP Note
which does not come due for two years, until December 31, 2002.

Potlatch argued that if the Potlatch claim is to be estimated, it
should be estimated in its full amount. Potlatch tells Judge
Walsh that, following a ten-week trial and a jury verdict in the
Idaho Proceeding, judgment was entered in Potlatch's favor in the
amount of $99,699,487. Based on this, Potlatch included post-
judgment interest to the date of the Debtors' bankruptcy filing
and filed the claims of $117,636,248.

Potlatch pointed out that although the Idaho Supreme Court
reversed its decision, its reversal was based upon the
determination that the trial court's admission of evidence
relating to a single aspect of Potlatch's claim (the claim for
lost profits) was improper. That ruling, Potlatch argued, should
not affect any of Potlatch's other claims. Potlatch said its
claim for lost profits constituted approximately $18 million of
Potlatch's total claim.

Potlatch also noted that the Debtor concedes liability to
Potlatch in an amount in excess of $40,000,000.

Potlatch also criticizes the Debtors' Proposed Estimation
Procedures as being inadequate. Potlatch points out that, the
trial of Potlatch's claim against Beloit in the Idaho Proceeding
consumed over ten weeks of the presentation of evidence and
included the testimony of 54 witnesses and the consideration of
some 647 documentary exhibits, but the Debtors propose to
compress the Court's consideration of the complex issues to one
eight hour trial, limited to a single damage witness for each
side plus documentary exhibits. Potlatch believes that the
procedures proposed by the Debtors are not appropriate to the
disputes at issue.

In conclusion, Potlatch Corporation requested that the Debtors'
motion to estimate its claim be denied or, in the alternative,
that Potlatch's claim be estimated in its full, subject to
reduction if Beloit or the Plan Administrator is able to persuade
a finder or fact, after consideration of all relevant evidence,
that the claim should be allowed in a lesser amount.
(Harnischfeger Bankruptcy News, Issue No. 38; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

HVIDE MARINE: Loomis Sayles Discloses 60.7% Equity Stake
The investment adviser firm of Loomis Sayles & Co., L.P. holds
5,624,472 shares of the common stock of Hvide Marine Inc. with
sole voting power, and 6,201,369 shares with sole dispositive
power, representing 60.7% of the outstanding common stock of
Hvide Marine Inc. Loomis, Sayles & Company, L.P. disclaims any
beneficial interest in any of the securities.

INTERNATIONAL THERMAL: Needs More Funds To Continue Operations
International Thermal Packaging Inc. is a development-stage
enterprise and has had minimal revenue to date. The company
remains dependent on continued sales of common stock to fund its
research and development efforts. In the three months ended April
30, 2000 the company received proceeds for the sale of common
stock of $1,753,661 net of issuance costs. In the three months
ended April 30, 1999 the company received proceeds for the sale
of common stock of $1,040,248 net of issuance costs.

Additional sources of liquidity in the next fiscal year are
expected to be additional proceeds from the company's exclusive
option and license agreement and the proceeds from repayment of a
real estate loan the company made in February 1999. Proceeds from
the license agreement are expected to be $1,085,257 during the
fiscal year ended January 31, 2001 and $625,000 from the real
estate loan during this same period. Although there is no
assurance that funds will be available from any of the above
sources, the company expects that sufficient resources will be
obtained to fund ongoing research and development expenses.

The company expects to expend at least $1,000,000 in the fiscal
year ended January 31, 2001 for ongoing research and development
efforts. These expenditures are required to complete the
prototype of the self-cooling beverage can.

For the three months ended April 30, 2000 the company had
operating losses of $1,275,556.  There was no revenue recorded
during these periods as the company has deferred the income from
its licensing agreement until the successful completion of a
prototype self-cooling beverage can.  Research and development
expenditure was $514,007 in the same period.

The Company failed to make federal and state payroll tax deposits
totaling $212,651 through October 1992. Penalties and interest
totaling $ 388,889 and $ 377,639 were accrued through April 30,
2000 and January 31, 2000, respectively creating a total
outstanding liability of $ 601,540 and $ 590,290. The company has
had discussions with Internal Revenue Service and State of
California to pay off the outstanding balances, which total but
to date the company has not paid any of these outstanding

The company's ability to continue as a going concern is dependent
upon management obtaining the necessary funding to operate the
business, and to successfully complete a working prototype, gain
necessary government approvals for its products, establishment of
successful commercial products, develop marketing channels and
ultimate product acceptance in the marketplace. The company has
an accumulated deficit and no established product or marketing
channels. These factors raise a substantial doubt about the
company to continue as a going concern.

LACLEDE STEEL: Secures New $61.5MM Credit Facility for 3 Years
On December 15, 2000 the Bankruptcy Court entered an order
confirming Laclede Steel Company's Plan of Reorganization. On
December 18, 2000 the company's subsidiary, Laclede Mid-America
Inc., completed the sale of substantially all of its assets. On
December 29, 2000 the company finalized a new $61.5 million
revolving credit and term loan facility for exit financing to
fund its operations and capital improvement program.

With the completion of the sale of Laclede Mid-America, Inc. and
the agreement for exit financing, the company completed all of
the steps required for reorganization, and emerged from
bankruptcy on December 29, 2000.

Net proceeds from the sale of Laclede Mid-America, Inc. were
$23.3 million, and were applied to reduce borrowing under the
company's Debtor in Possession Financing Facility (DIP Facility)
and notes payable. On December 29, 2000 the company entered in a
new three-year $61.5 million Credit Agreement replacing the DIP
Facility. The new Agreement will finance the company's future
operations and its planned capital expenditure program. Capital
expenditures under the program are estimated to be $4.0 million
in the fiscal year ended September 30, 2001.

The Credit Agreement contains a number of financial covenants,
including requirements for minimum levels of EBITDA, fixed charge
coverage, minimum levels of revolving loan availability, and
limits on capital expenditures. The company is presently in
compliance with all financial covenants in the Agreement. The
company had unused availability under the Credit Agreement of
$14.3 million at December 31, 2000.

However, conditions in the markets for the company's products,
and in the steel industry in general, have deteriorated since the
Bankruptcy Court confirmed the Plan of Reorganization. Revised
projections for the calendar year 2001 indicate that, after
completion of the quarter ended March 31, 2001, the company may
not satisfy financial covenants related to EBITDA, but will
remain in compliance with the requirements to maintain minimum
revolving loan availability and limit capital expenditures.

The company has reviewed its updated financial projections for
2001 with its lenders. Based on these discussions Laclede expects
to receive waivers of violations related to EBITDA.

Net sales decreased by $8.4 million or 14.1% in the quarter ended
December 31, 2000 compared to the same period of the prior year.
Steel shipments declined by 28.1%, while average sales prices for
steel products increased slightly. Chain product sales increased
29.6% in 2000 reflecting higher sales of anti-skid devices for
trucks and automobiles. Such sales in the quarter ended December
31, 1999 were adversely affected by a mild winter.

Net income for the quarter ended December 31, 2000, was $73,113
as compared to a net loss in the same quarter of 1999 of $4,216.

LASON INC.: Selling Assets of Marketing Associates Division
Lason, Inc. (OTCBB: LSON) announced the sale of the assets of the
Marketing Associates Division of Lason Systems, Inc. to Marketing
Associates LLC, a newly created corporation. Terms of the sale
were not disclosed.

"The sale of the assets of the Marketing Associates division is
part of our rationalization strategy to focus on our core
integrated information management services for image and data
capture, data management and output processing," stated Ronald D.
Risher, Executive Vice President and Chief Financial Officer of
Lason. "We intend to continue working with Marketing Associates
to provide marketing related services to our joint customers,"
Risher continued. Proceeds of the asset sale will be used to
reduce debt and strengthen the company's working capital

Marketing Associates, founded in 1967, provides marketing
services, including creative services, MIS marketing related
services, database development and management, web-site
development and hosting, event management, and program
management. The Company is located in Bloomfield Hills, Michigan.

                     About the Company

LASON is a leading provider of integrated information management
services, transforming data into effective business
communication, through capturing, transforming and activating
critical documents. LASON has operations in the United States,
Canada, Mexico, India, Mauritius and the Caribbean. The company
currently has over 85 multi-functional imaging centers and
operates over 60 facility management sites located on customers'
premises. LASON is available on the World Wide Web at

LERNOUT & HAUSPIE: Seeks Court's Nod On Premium Finance Agreement
As required by state and federal law, Lernout & Hauspie Speech
Products N.V. and Dictaphone Corp. maintains several policies
for general liability and property insurance on all its

In December, 2000, the Debtor received a notice of cancellation
of its property insurance policy but obtained a replacement
insurance coverage. In the aggregate, the insurance policies
provide a $175,000,000 in coverage.

Under the Insurance Policy, the Debtor is required to make lump
sum premium payments of $1,621,176.87. To finance these premium
payments, the Debtor proposed to enter into an Agreement with
Cananwill. The significant terms of the proposed Agreement are:

      (a) L&H grants a lien to Cananwill on all sums payable to
          the Debtor under the insurance policies, including any
          gross unearned premiums and any payment on account of

      (b) L&H makes a cash down payment of $408,070.50 and
          finances the remaining balance of $1,213,106.37 in eight
          monthly installments at an annual interest rate of

The Debtor requested that Cananwill's security interest be deemed
duly perfected without further action by Cananwill.

Cananwill has informed the Debtor that it will not provide the
financing unless the Debtor obtains an Order:

      (a) Authorizing the Debtor to execute and deliver the
          Agreement or any amendment thereto, as necessary;

      (b) Providing that if the Debtor defaults on any premium
          payment, then upon ten days' written notice to the
          Debtor, the automatic stay shall be lifted without
          further action or order unless the Debtor cures the
          default within such ten-day period.

Additionally, in case of default in premium payments, Cananwill
shall have the right to cancel the insurance policies and obtain
all unearned and return premiums. If the funds obtained after
default and cancellation are insufficient to pay for all the
Debtor's obligations under the Agreement, the deficiency amount
will constitute an administrative expense of the estate.

Although the Code provides that a final hearing on a motion to
obtain credit may not be commenced earlier than fifteen (15) days
after service of the motion, the Debtor requested that an
expedited hearing be conducted on this motion to avoid immediate
and irreparable harm to the Debtor's estate. This is necessary to
ensure that the insurance policies will not be cancelled and so
that Cananwill will finance the lump sum premium payments due,
while Final Hearing is still pending. (L&H/Dictaphone Bankruptcy
News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-

LOEWEN GROUP: Settles Disputes With Rafelson Heirs & Insurer
Jack Rafelson and Laura Pohl are the natural children and heirs
to the estate of their father, Irving Rafelson (the Decedent) who
died on April 3,1995.

After that Laura and William Pohl (the Pohls) contracted with
Davis Funeral Home, Inc. (DFH) for the disposition of the
Decedent's remains by cremation. The Pohls later brought a
lawsuit alleging, among other things, the negligent handling of
the remains of the Decedent. Prior to the Petition Date, The
Loewen Group, Inc. entered into a settlement of the lawsuit
brought by the Pohls pursuant to which the Debtors paid the Pohls
$200,000 (the Original Rafelson Settlement). In connection with
the Original Rafelson Settlement, Ms. Pohl executed a release
indicating that she had full authority to resolve this matter on
her own behalf and on behalf of her brother, Mr. Rafelson.
However, Ms. Pohl actually did not have the authority to resolve
this matter on behalf of Mr. Rafelson.

Upon learning of the Original Rafelson Settlement, Ms. Pohl's
brother, Jack Rafelson filed a complaint (the Rafelson Complaint)
against LGII, DFH and Gary Davis, the former owner of DFH, in
respect of the events giving rise to the Pohls' lawsuit. In his
Complaint, Mr. Rafelson asserted causes of action based on
various tort and contract theories.

DFH and Mr. Davis then filed a third-party complaint against Ms.
Pohl for declaratory relief, breach of contract for
misrepresenting her authority to enter into the Original Rafelson
Settlement on behalf of Mr. Rafelson and unjust enrichment.

The Debtors submitted claims to the Insurance Companies under
their general liability insurance policies in effect during the
time period in question in respect of the claims asserted by the
Claimants (Jack and Virginia Rafelson, and Laura and William

                Dispute over Insurance Claims

The Insurance Companies disputed that the claims asserted by the
Claimants were covered under the relevant general liability
insurance policies.

The dispute with the Insurance Companies involve another case -
the Roth Complaint and Settlement. On April 4, 1995, Irving Roth
died and the Roth heirs contracted with DFH for the burial of Mr.
Roth. The Roth Heirs later brought a lawsuit alleging, among
other things, the negligent handling of the remains of Mr. Roth.
Also prior to the Petition Date, the Debtors entered into the
Roth Settlement Agreement with the Roth Heirs pursuant to which
they paid the Roth Heirs $1.5 million.

The Debtors submitted a claim to the Insurance Companies in
respect of the Roth Settlement Agreement. The Debtors contributed
$250,000, which represents their deductible under their general
liability insurance policies, and CNA contributed $750,000. The
Debtors sought payment of the remaining $500,000 from Lombard.
Because Lombard refused to pay, the Debtors contributed an
additional $500,000 and reserved their rights to pursue
reimbursement from Lombard at a later date.

                The Settlement Agreements

The Claimants, the Debtors and the Insurance Companies have
agreed, pursuant to the terms of the Settlement Agreements and
subject to the Court's approval, to resolve all disputed matters
among the Claimants, the Debtors and the Insurance Companies with
respect to the Debtors' handling of the remains of the Decedent.

* Rafelson Settlement Agreement

Pursuant to the terms of the Ralelson Settlement Agreement, the
Debtors, Mr. Davis and the Rafelsons have agreed that:

      (1) Mr. Davis will pay to Mr. Rafelson the $50,000 deposited
in trust pursuant to the Pohl Settlement Agreement within 30 days
of the execution of the Rafelson Settlement Agreement.

      (2) Mr. Rafelson will have an allowed general unsecured
claim in the amount of $300,000 against the Debtors, to be
satisfied jointly from the estates of LGII and DFH.

      (3) The Rafelsons will grant the Debtors a complete release
from any and all liability (other than the Debtors Settlement
Amount) associated with the subject matter of the Rafelson
Settlement Agreement.

      (4) Upon Mr. Rafelson's receipt of the Davis Settlement
Amount and the approval of the Rafelson Settlement Agreement by
the Court, the Rafelsons and the Debtors shall file a stipulation
and order of dismissal with prejudice with respect to the state
court action initiated by the filing of the Rafelson Complaint,
and Mr. Rafelson and his heirs shall amend their proofs of claim
filed against LGII and DFH to reflect the Debtors' Settlement

      (5) The Debtors and the Rafelsons agree to hold each other
harmless and indemnify the other for any loss or damage to any
property right arising in connection with the implementation of
the Rafelson Settlement Agreement.

      (6) The Debtors agreed to pay the Rafelsons a pro rata share
of the Insurance Proceeds recovered from the Insurance Companies
in respect of their liabilities under the Roth Settlement
Agreement, the Rafelson Settlement Agreement and the Pohl
Settlement Agreement.

[The Debtors recovered $580,000 of the $1.1 million they sought
from the Insurance Companies, and have agreed to pay to the
Rafelsons $163,636.35 of the Insurance Proceeds leaving them with
an allowed general unsecured claim of $136,363.65 against the
Debtors in their chapter 11 cases.]

* Pohl Settlement Agreement

Pursuant to the Pohl Settlement Agreement, the Debtors and the
Pohls have agreed that:

      (1) Ms. Pohl will pay $50,000 into a trust account for the
benefit of Mr. Davis in full satisfaction of any and all
liability with respect to the representations that she made and
the funds that she received in connection with the Original
Rafelson Settlement. This $50,000 will then be used by Mr. Davis
to satisfy his obligations under the Rafelson Settlement

      (2) The Debtors will grant the Pohls a complete release from
any and all liability associated with the subject matter of the
Pohl Settlement Agreement.

      (3) The effectiveness of the Pohl Settlement Agreement is
expressly contingent upon the execution of the Rafelson
Settlement Agreement.

      (4) The Debtors and the Pohls agree to hold each other
harmless and indemnify the other for any loss or damage to any
property right arising in connection with the implementation of
the Pohl Settlement Agreement.

* The Insurance Settlement Agreement

Pursuant to the Insurance Settlement Agreement,

      (1) Lombard has agreed to pay TLGI $420,000 and CNA has
agreed to pay TLGI $160,000 in respect of the Debtors'
obligations under the Roth Settlement Agreement, the Pohl
Settlement Agreement and the Rafelson Settlement Agreement.

      (2) CNA will bear the cost of all payments it had previously
made in connection with the defense of the Rafelson Complaint
without seeking reimbursement from the Debtors, DFH or Mr. Davis.

      (3) The Debtors and the Insurance Companies will release
each other with respect to all claims arising from, or in
connection with, the Rafelson Complaint.

      (4) TLGI will not take any action with respect to the
subject matter of the claims asserted by Mr. Rafelson that would
in any way result in a claim for indemnification or contribution
against the Insurance Companies; in the event TLGI commences such
an action, then TLGI will indemnify and hold harmless the
Insurance Companies for any claims levied against them on account
of such action.

The Debtors believe that the resolution of the disagreements with
the Claimants and the Insurance Companies pursuant to the terms
of the Settlement Agreements is in the best interests of the
Debtors' estates and creditors.

Accordingly, the Debtors sought the entry of an order, pursuant
to Bankruptcy Rule 9019, approving the terms of the Settlement
Agreements. Specifically, the Debtors asked the Court to approve:

      (a) a Final Release and Global Settlement Agreement, Hold
Harmless Agreement and Agreement to Indemnify (the Rafelson
Settlement Agreement) with Jack and Virginia Rafelson;

      (b) a Final Release and Global Settlement Agreement, Hold
Harmless Agreement and Agreement to Indemnify (the Pohl
Settlement Agreement) with the Rafelsons and Laura and William
Pohl (the Pohls); and

      (c) a Settlement and Release Agreement (the Insurance
Settlement Agreement) with The Continental Insurance Company, its
subsidiaries and affiliates operating under the name of the CNA
Insurance Companies and Lombard Canada Ltd., on its own behalf
and on behalf of Lombard Canada Ltd. and Lombard General
Insurance Company of Canada. (Loewen Bankruptcy News, Issue No.
34; Bankruptcy Creditors' Service, Inc., 609/392-0900)

LTV CORP.: Objects To Bethlehem's Motion re Columbus Coating
"The Motion, and the way that it has been pursued, has not only
harmed LTV and CCC, but also may constitute a self-inflicted
would for the Movants themselves since it seems likely that the
pendency of the motion itself may give rise to Lender concerns
and trigger adverse action by the Lender under the Modernization
Loan." This is the core of The LTV Corporation's lengthy and
detailed arguments asking Judge Bodoh to refuse to lift the
automatic bankruptcy stay, to refuse to compel the Debtors to
immediately assume or reject the Columbus Coating and Columbus
Processing agreements, or grant Bethlehem, Alliance and Ohio
Steel any administrative claim for expenses. The Debtors say
Bethlehem's motion is "clearly premature and unsupported by law".

Saying the moving papers offer mainly hyperbole and rhetoric
rather than competent evidence, and rest almost entirely on
speculation about events that might or might not happen in the
future, LTV says Bethlehem conceals the true current state of
affairs in a thicket of possibilities and hypotheticals, and make
"blatant misstatements of fact".

While ordinarily LTV says it would be reluctant to question
Bethlehem's motives in filing the motion, Bethlehem's own public
statements make it clear, at least to LTV, that actually
obtaining the requested relief is not what Bethlehem has in mind.
LTV refuses to speculate on what these objectives might be, but
say Bethlehem is motivated more by a desire to take competitive
or tactical advantage of the Debtors' chapter 11 cases or to
secure windfall possession of a valuable asset of the estate,
than by legitimate, current concerns about the finances or
operations of the entities in question.

LTV notes that to date the Lender has not provided a default
notice or advised LTV of an intention to do so. LTV does not
believe such an action is likely or imminent. However, even if
such a notice was given, LTV says that action would not justify
the relief sought by Bethlehem. The Modernization Loan
contemplates a sale-leaseback transaction between CCC and the
Lender when the facility's conversion is complete. This would in
effect convert the Loan to permanent financing. LTV says
Bethlehem's stated concerns that the Debtors' bankruptcy filings
would preclude exercise of this conversion is unfounded since
there is no evidence that the Debtors' bankruptcy filings have
had, or are likely to have, any impact on the timing of the
conversion or compliance with specifications.

LTV says that Dearborn Leasing Company is not a "derelict
partner" under the CCC agreement. The phrase is used in
connection with cash calls on the partners by CCC, and applies
only in the case of a default. To date, no such demand for
payment has been made. Bethlehem's speculation about what
Dearborn or LTV might do, if at some point in the future Dearborn
becomes a derelict partner, is idle and unproductive and provides
no basis for relief.

Bethlehem also calls Dearborn a "non-performing partner" and says
it has failed to pay certain amounts due. LTV points out these
obligations are not identified, and says that LTV has fully paid
all obligations and amounts owed to CCC.

At present, LTV says that CCC continues to operate as it did
before the Chapter 11 filings. LTV says there's no evidence that
the value of its interest in CCC is rapidly deteriorating.
Further, Bethlehem's contention that LTV has no ability as a
matter of practical economics to assume the relevant agreements
is described by LTV as premature and without foundation, as is
Bethlehem's statement that LTV is manifestly incapable of
rendering the performance required of it. LTV is in the early
stages of its reorganization process, and a determination today
that it will be incapable of performing its CCC-related
obligations in the future would be entirely speculative.

In light of what it described as the lack of any apparent
emergency, Bethlehem's own public statements, and the "entirely
speculative" nature of the Motion, LTV says it has no alternative
but to question Bethlehem's true motivation in filing the motion.
The CCC Partnership Agreement requires that the moving parties,
in exercising any rights, "at all times act reasonably and in
good faith so as to minimize any damages to the Non-Performing
Partner". LTV says it's clear that Bethlehem has not done so.

In short, LTV says that the stay should not be lifted as the ipso
facto provisions on which Bethlehem relies are invalid and
unenforceable because the partnership has not been dissolved and
the bankruptcy-related dissolution and buyout provisions of the
agreements are not "personal". To Bethlehem's argument that the
CCC Partnership Agreement cannot be assumed or assigned, LTV says
they don't accept this notion, and describe this as grounded in a
minority view which "has been flatly rejected by persuasive
authority in this Circuit, a fact which Movants again bury in a
dense and opaque footnote". Bethlehem's arguments really go to
whether the Debtors could assign the relevant contracts under
Ohio partnership law and the agreements. LTV says this is
irrelevant as to whether a debtor in bankruptcy can assume the

Continuing to sound the twin themes of prematurity and
speculative argument, LTV says that since there is no assumption
motion before the Court any argument on this point is premature
and irrelevant. This is not the time, LTV told Judge Bodoh, to
determine whether LTV can satisfy the cure and adequate assurance
requirements if it decides to assume the agreements. It is surely
not the time to conclude or predict -- on a scant and undeveloped
record -- that the Debtors could not meet these requirements. LTV
describes the Bethlehem request as precipitous, and inconsistent
with the Bankruptcy Code and with principles of sound judicial

As to the claim for administrative expense status, LTV's reply is
short - All costs and expenses are being paid on a current basis
and there's no need for such an action.

         The Unsecured Creditor's Committee Says Bethlehem
                     Is Taking Advantage of LTV

In essence, the Bethlehem Motion appears to be an attempt to take
advantage of LTV's bankruptcy filing to force a buy-out of LTV's
50% partnership in CCC and CCP. The Committee seconds the
Debtors' suggestion that any determination of whether LTV can
assume the partnership agreements is premature, that Bethlehem
hasn't shown any real basis, other than speculation about what
might occur in the future, for any relief, and says LTV should
not be compelled to assume or reject the partnership or operating
agreement at this time. The Committee notes that the fundamental
flaw in Bethlehem's argument is that even if the future events
giving rise to an event of default under the Modernization Loan
occur, relief from the stay will not cure those events of default
and Bethlehem may still be called upon to meet its obligations
under its guaranty. The only effect of granting relief from the
stay would be to enable Bethlehem to enforce certain rights and
remedies under the agreements which would permit Bethlehem to
eliminate LTV's interest in CCC and CPC to the detriment of these
estates. (LTV Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
Service, Inc., 609/392-00900)

METROCALL INC.: Moody's Slashes Senior Subordinated Notes To Caa3
Moody's Investors Service downgraded the senior subordinated debt
issues of Metrocall, Inc. to Caa3 from B3. The company's senior
secured credit facility has also been downgraded to B3 from B1,
while the senior implied rating is now placed at Caa1. Outlook
for the said ratings is negative while approximately $825 million
of debt and credit facilities are affected.

Affected ratings are as follows:

      * Senior Implied  Caa1

      * $200 million Secured Credit Facility  B3

      * 11.875% Sr Sub Notes due 2005 Caa3

      * 10.375% Sr Sub Notes due 2007 Caa3

      * 9.75% Sr Sub Notes due 2007 Caa3

      * 11% Sr Sub Notes due 2008 Caa3

According to Moody's the downgrades reflect the deteriorating
fundamentals of the traditional paging industry, and the
company's lack of financial flexibility. The traditional one-way
paging business has suffered significant price erosion as the
unit growth has stopped despite the exit of many paging carriers
from the market, Moody's says. Accordingly, while profitability
has declined, capital expenditures have not and Metrocall has
continued to consume cash. Availability under its bank credit
facility is said to be limited, and Moody's believes that a
restructuring of the company's subordinated notes is likely.

Virginia-based Metrocall is a wireless messaging company with
over 6 million units in service at September 30, 2000.

NATIONAL HEALTH: Engages Sprouse & Winn as New Public Accountants
Effective February 14, 2001, the board of directors of National
Health & Safety Corporation dismissed HJ & Associates, LLC
(formerly, Jones, Jensen, & Company) of Salt Lake City, Utah, as
its independent public accountants.

HJ & Associates audited and reported on the company's financial
condition for the fiscal years ended December 31, 1995 through
1999. Their reports for each fiscal year contained a
qualification regarding the company's ability to continue as a
going concern, in light of its history of recurring losses from

Effective February 14, 2001, the company engaged Sprouse & Winn,
LLP, Austin, Texas, as its principal accountant to audit the
National Health & Safety Corporation's financial statements.

NC INC.: On-Line Event Promoter Cuts Jobs & Shuts Down Sites
NC Inc., an Arlington, Va.-based company that provides
information about local events such as concerts, sporting events,
art exhibits, and wine tastings through the Internet, has laid
off much of its workforce and shut down two of its web sites,
according to Washtech. Among the sources of NC's travails: one of
the company's investors, Texas-based PopMail Inc., is ailing,
hurting NC's ability to continue raising money to support itself.

"A fourth-quarter investment did not turn out the way we expected
it to turn out," said NC's chief executive Edward Neumann.

At least one-fourth of NC's employees have been laid off since
December. One of its Rosslyn, Va., office suites visited this
week was unmanned except for the company's chief operating
officer. Two web sites operated by the company to showcase its
technology, and the Daily Drill
(, have been taken out of operation and are
behind schedule in relaunching. Neumann said the Daily Drill
should relaunch within two weeks, but in a far more scaled-back
version that deletes the content that was unpopular in a previous
version. Neumann declined to provide more details on the
company's current workforce, the status of its web sites, or the
cash position of the company, stating that "major developments"
are pending for NC. (ABI World, March 13, 2001)

OPTEL INC.: Asks for Extension to July 31 to Decide on Leases
OpTel, Inc. sought and obtained an order granting the debtors an
extension of time through and including July 31, 2001 to assume
or reject their unexpired non-residential real property leases.

The debtors requested an extension of time so as to allow them to
conduct a further evaluation of the leases in connection with the
plan of reorganization that will be filed within the next thirty
days. Additional time is necessary to accumulate data on the
viability of the leased locations to help determine the ultimate
configuration of the soon to be reorganized debtors. The debtors
are in the process of negotiating the terms and conditions of the
plan of reorganization with parties-in-interest. Until the plan
negotiations are finalized, it would be improvident for the
debtors to assume leases which may no t be needed or to reject
leases which the reorganized debtors may desire for themselves.

There are approximately 91 leases, including leases for office
space, warehouses, storage facilities, rooftop antenna sites,
antenna towers and cable television headends. Co-counsel for the
debtors are James A. Beldner and Richard S. Kanowitz of Kronish
Lieb Weiner & Hellman LLP and Brendan Linehan Shannon of Young
Conaway Stargatt & Taylor LLP.

OWENS CORNING: Seeks Okay For Employee Compensation Programs
Owens Corning is seeking court approval today, March 13, 2001, of
the employee compensation programs it had shelved temporarily to
allow the official committees of asbestos claimants and unsecured
creditors time to review certain financial information. The
principal concern of the committees has been addressed, and the
compensation programs are now "ripe for approval" by the U.S.
Bankruptcy Court in Wilmington, Del., the building products
manufacturer said in a recently obtained filing. The company won
court approval of employee retention and severance programs
following a Jan. 17 hearing, but it agreed to defer consideration
of its four compensation programs until mid-March. (ABI World,
March 13, 2001)

OXFORD HEALTH: Completes Execution Of Turnaround Plan
Commencing in May 1998, Oxford Health Plans. Inc., implemented a
major restructuring effort designed to reduce medical and
administrative costs, strengthen computer systems, reduce claims
payment delays, shed unprofitable lines of business, exit
businesses not related to its core Tri-State market area and
increase premium yields on its products. As a result of the
Turnaround Plan, the company realized net income attributable to
common shares of $274.4 million in 1999 (including the
recognition of deferred tax assets of $225 million) and $191.3
million in 2000 (net of $61.4 million, after tax, of charges
related to recapitalization transactions), and produced operating
cash flow of $95 million in 1999 and $404.7 million in 2000. The
company considers the Turnaround Plan to have been substantially

The results of the Turnaround Plan permitted the company to
effect several capital restructuring transactions in 2000 that
began in February 2000 with the repurchase of (i) $130 million of
Series D and E Preferred Stock and (ii) $19 million of loans
outstanding under the Term Loan. In May 2000, the company prepaid
the remaining $131 million balance of the Term Loan, including
pre-payment premiums, for a total amount of $134.3 million.

Following several open market purchases, in December 2000, the
company tendered for the remaining $193.5 million of its Senior
Notes, plus $22.4 million in tender and consent premiums. On
December 22, 2000, the company consummated an exchange and
repurchase agreement pursuant to which, among other things, (i)
the company paid $220 million to TPG Investors to repurchase
certain of the shares of Preferred Stock and certain of the
Warrants and (ii) TPG Investors exchanged their remaining shares
of Preferred Stock and remaining warrants for 10,986,455 newly
issued shares of common stock. In connection with the
Recapitalization in the fourth quarter of 2000, the company
incurred costs of approximately $38.5 million related to the
write-off of unamortized Preferred Stock discount and costs from
the original issuance in 1998 and related transaction fees.

Simultaneously with the consummation of the Recapitalization, the
company entered into new senior bank facilities totaling $250
million, $175 million of which is a 5 -1/2 year term loan and $75
million of which is a 5 year revolving credit facility. The
proceeds of the New Term Loan were used, along with available
company cash, to fund the recapitalization. The company has not
drawn on the revolving credit facility. The results of the
capital restructuring were to decrease the company's financing
costs by reducing the amounts owed under term loans and to
eliminate dividend and interest payments on the Series D and E
Preferred Stock and Senior Notes.

Having completed the capital restructuring which was identified
as one of the company's goals for 2000 and 2001, the company
intends to focus its strategy for the years 2001 and 2002 on
three main areas: (1) expanding its business through additional
market penetration in the Tri-State market area or contiguous
markets, (2) continuing to increase administrative efficiencies
by, among other things, enhancing the functionalities of its
Internet offerings, and (3) continuing its efforts to make
quality healthcare affordable.

PACIFIC AEROSPACE: Planning To Sell British Unit
Pacific Aerospace & Electronics Inc., struggling to stay alive on
a high-interest $15 million bridge loan, now believes it must
sell off its Aeromet International PLC unit in the United Kingdom
if it wants to keep operating. The Wenatchee, Wa.-based
manufacturer bought Aeromet three years ago for $68 million, only
to find that interest payments related to the acquisition have
resulted in $13 million losses in each of the past two years,
despite a doubling in revenue--to about $113 million. If Pacific
Aerospace can sell the British unit, analysts believe, it will
have a reasonable chance to recover, especially if it focuses its
efforts on its core operations of making components for fuel-
cell, medical-equipment and telecommunications manufacturers.
(New Generation Research, March 13, 2001)

PAUL HARRIS: Terminating Business Operations
Paul Harris Stores, Inc., who filed for reorganization under
Chapter 11 of the United States Bankruptcy Code on October 16,
2000, announced that it was terminating its business operations.

On March 5th the Bankruptcy Court authorized the Company to begin
store closing sales for the benefit of its secured creditor.
Because Paul Harris does not know if there will be sufficient
assets to pay the secured creditor, the Company is not in a
position to honor gift certificates, accept returned merchandise,
honor store credits, or other such requests. Customers seeking
payment may file an administrative expense request with the
United States Bankruptcy Court, Southern District of Indiana.

Request forms are available at Paul Harris stores, in PDF format
from and at . The Company anticipates
that it will be several months before all claims, including
administrative expense requests, will be resolved.

PAUL HARRIS: Eyes Filing Plan of Liquidation Plan within 45 Days
In a filing made Monday with the Securities and Exchange
Commission (SEC), Paul Harris Stores Inc. said that it expects to
file its liquidation plan within the next 45 days, according to
Dow Jones. The company said it can't file its Form 10-K for
fiscal 2001 ended Feb. 3 with the SEC by the May 4 deadline
because it won't be able to complete its financial statements by
then. The company cited lack of sufficient funds and adequate
number of accounting personnel as well as the expected closing of
its operations as the reasons for the delay.

Paul Harris Stores said the liquidation budget didn't provide for
funds to compensate its president and chief executive Glenn S.
Lyon and senior vice president and chief financial officer
Richard R. Hettlinger. Their employment has been terminated as of
March 9. The company's reorganization plan-filed with the U.S.
Bankruptcy Court for the Southern District of Indiana on Feb. 13-
called for the closing of 100 stores. The company will liquidate
its chain of women's clothing stores because it failed to obtain
the necessary financing and vendor support to emerge from
bankruptcy proceedings. Paul Harris Stores also said its
principal secured creditor is unlikely to approve the
disbursement of funds necessary for the preparation of the Form
10-K or any subsequent periodic reports. The company didn't
identify its principal secured creditor in the filing. (ABI
World, March 13, 2001)

PAWNMART INC.: Embarks On Operational and Financial Restructuring
PawnMart, Inc., (Nasdaq: PMRT; BSE: PWT, PWTA and PWTB) announced
that its Board of Directors has approved the final terms of its
restructuring plan.

The restructuring plan includes reductions in store operations
and the financial restructuring of approximately $13 million of
unsecured debt and preferred stock. The Company has suspended
interest payments on its 12% Subordinated Notes and dividends on
the 8% Convertible Preferred Stock during the restructuring
process. Estimated operational restructuring charges of $3
million will affect the results for fiscal years 2000 and 2001.

The operational restructuring will result in the closing or sale
of 15 stores, reducing the number of stores for continuing
operations to 30 stores. Reductions in operating personnel and
related overhead expenses will be realized as the store sales or
closings are completed during the first and second fiscal
quarters of fiscal 2001. Excluding restructuring charges, the
Company believes it will achieve positive EBITDA for fiscal year
2001. If the proposed debt restructuring is achieved, the Company
believes it can achieve positive cash flow beginning in fiscal
year 2002.

The financial restructuring plan includes a modification of the
Company's line of credit, a proposed exchange offer to holders of
its 12% Subordinated Notes and a restructuring of its 8%
Convertible Preferred Stock. The line of credit lender has
approved a modification of the Company's revolving credit
facility providing short-term additional financing to assist the
Company in the restructuring process. The modifications are
contingent on the Company's successful restructuring of the 12%
Subordinated Notes, and includes a reduction in the overall
credit facility to $8 million with revised financial covenants.

The proposed exchange offer to holders of the 12% Subordinated
Notes would provide for a conversion of one-half of each holder's
notes to a new 9% Senior Subordinated Note and one-half into a
new issue of 9% Convertible Preferred Stock. The new 9% Senior
Subordinated Notes will be exchanged at face value for one-half
of the 12% Subordinated Notes plus accrued interest. Interest
will be paid semiannually beginning October 31, 2001. The Company
would have the option to pay the initial interest installment in
cash or Common Stock. Interest payments thereafter would be
payable in cash. The new 9% Convertible Preferred Stock to be
exchanged would be based on the face value of one-half of the 12%
Subordinated Notes plus accrued interest. Each share of 9%
Convertible Preferred Stock would be convertible into Common
Stock based on a per share price for the Common Stock of $1.00
per share.

If all bondholders accept the proposed exchange offer, the
Company would issue 5,222,000 shares of 9% Convertible Preferred
Stock which would be convertible into 5,222,000 shares of Common
Stock. The 9% Convertible Preferred Stock can be converted into
Common Stock annually on April 30 at the option of the holder.
The 9% dividend would be payable semiannually in cash or Common
Stock at the option of the Company beginning October 31, 2001.
The Company will use its best efforts to obtain listing for the
9% Convertible Preferred Stock within two years after issuance.
If either the interest or dividends are paid in Common Stock, the
issue price will be based on the average closing sale price of
the Common Stock for the immediately preceding 15 days prior to
the due date.
The 8% Convertible Preferred Stock will be exchanged one-half for
Common Stock and one-half for a new 8% Convertible Preferred
Stock. Based on the exchange agreement, the current 8%
Convertible Preferred Stock will be exchanged for 4,535,655
shares of Common Stock and 1,250,000 shares of new 8% Convertible
Preferred Stock. The new 8% Convertible Preferred Stock will be
convertible into 3,650,701 shares of the Company's Common Stock
at a conversion price of $.3424 per share. Dividends on the new
8% Convertible Preferred Stock will be payable semiannually in
cash or Common Stock at the option of the Company beginning
October 31, 2001. Common Stock dividends will be based on a per
share price of $.3424.

Carson Thompson, Chairman and Chief Executive Officer, stated,
"This comprehensive operational and financial restructuring is
critical to the Company's financial viability. We are pleased
with the impact on operations that have already been achieved
with the downsizing and refocusing of efforts on the continuing
stores. Under the direction of Mike Musgrove, our new President,
we are focusing on increasing pawn loan volume and improved yield
on the loans, increasing merchandise sales volume and margins,
tightening inventory controls and on the development of our store
operations team members." Mr. Thompson concluded, "We plan to
increase shareholder value by resuming growth through acquisition
of stores after the operational and financial restructuring is
successfully completed."

"The cooperation of our lender, landlords, representatives of the
12% Subordinated Noteholders and 8% Convertible Preferred
shareholder has been very encouraging. We now have agreements
with our lender and the 8% Convertible Preferred shareholder,"
reported Robert Schleizer, the Company's Senior Vice President
and Chief Financial Officer. "If we are successful in completing
the proposed exchange offer with the holders of the 12%
Subordinated Notes, in conjunction with the other components of
our restructuring plan, we believe the Company will have a strong
foundation for future financial success."

PSINET INC.: Inks $300MM Sale Agreement to Raise Needed Funds
PSINet Inc. (NASDAQ:PSIX), the Internet Super Carrier, entered
into a definitive agreement for the sale of PSINet Transaction
Solutions ("PTS") to an investment group led by GTCR Golder
Rauner, LLC for a cash purchase price of $0.3 billion, subject to
certain adjustments.

The parties anticipate that the transaction will be completed
prior to April 30, 2001. PTS is a leading worldwide provider of
e-commerce data communications that transports point-of-sale
transactions. Closing of the transaction is subject to a number
of conditions, and there can be no assurance that the transaction
will be completed. For financial reporting purposes, PTS will be
treated as a discontinued operation, and PSINet will have a loss
on disposal of $0.3 billion.

Separately, PSINet announced that it had completed the sale of
PSINet Global Solutions, an operating unit of PSINet Consulting
Solutions that provides 24-hour onsite and offsite systems
maintenance, application development from technology centers in
the U.S. and India, as well as the sale of a San Francisco
facility that it had previously intended to develop into a web
hosting center. The terms of these transactions were not

As of March 2, 2001, PSINet had $0.3 billion of cash, cash
equivalents, short term investments and marketable securities,
including approximately $27 million in restricted amounts. As
previously announced, the Company determined that the capital
requirements under its business plan for fiscal year 2001 were
greater than currently available capital resources, and began
exploring, among other things, the sale of certain non-strategic
assets and reductions in capital expenditures. Despite the
anticipated sale of PTS and other efforts currently underway, the
Company believes it is likely that it will need to restructure or
renegotiate some of its obligations to third parties, certain of
which, if not resolved, could result in defaults under indentures
for the Company's debt securities. Despite these facts, the
Company believes that the proceeds from the anticipated sale of
PTS will increase the Company's financial flexibility as it
evaluates its financial and strategic options.

Headquartered in Ashburn, Virginia, PSINet is the Internet Super
Carrier offering global e-commerce infrastructure, end-to-end IT
solutions and a full suite of retail and wholesale Internet
services through wholly-owned PSINet subsidiaries. Services are
provided on PSINet-owned and operated fiber, satellite, web
hosting and switching facilities, providing direct access in more
than 900 metropolitan areas in 28 countries on five continents.

RAYTHEON CO.: First Union Ups Rating To Buy From Market Perform
First Union Securities Inc. raised its rating on Raytheon Co. to
buy from market perform Monday, citing recent declines in the
company's stock price amid concerns over potential cost increases
associated with a sale of a unit to troubled Washington Group
International Inc., according to Dow Jones. The class B Raytheon
stock recently traded up 64 cents, or 2.1 percent, at $30.41,
bucking the broader market's downturn. The stock has lost 17
percent from a 12-month high of $36.68 reached on Feb. 1.

First Union analyst Sam Pearlstein said, "We believe the stock
price more than adequately reflects the potential liability"
arising from the 2000 sale of Raytheon Engineers & Constructors.
Raytheon, the third-largest U.S. defense contractor, in July sold
the unit to Washington Group for $53 million in cash and $450
million in assumed liability-a transaction that Washington says
may force it to seek bankruptcy protection. The Lexington, Mass.-
based Raytheon said earlier this month that it might have to
incur additional costs of up to $450 million over several years
if Washington Group files for chapter 11 and fails to complete
any of the 12 projects it guaranteed. Washington Group, which
formerly operated as Morrison Knudsen Corp., has filed a lawsuit
against Raytheon, seeking to cancel the purchase and to collect
unspecified damages for breach of contract. (ABI World, March 13,

SAFETY-KLEEN: Seeks Order Compelling PwC To Produce Documents
Safety-Kleen Corp. asked Judge Walsh to direct
PricewaterhouseCoopers, LLP, its former outside auditor for
fiscal years 1997, 1998 and 1999, to appear for examination and
to produce documents that:

      (1) Relate to the Debtor's financial condition;

      (2) Will affect the administration of the Debtor's
reorganization and restatement of its financial statements; and

      (3) Relates to a source of money or property that can be
potentially obtained by the Debtor for its and its creditors'

The Debtor requested this discovery through subpoena to assist it
in the process of restating its financial statements for the
years that PwC served as auditor, and to determine the
appropriateness of PwC's financial services. Concurrently,
the Official Committee of Unsecured Creditors issued a subpoena
for the same documents. PwC did not object to issuance of the
requested subpoenas.

The Debtor and the Official Committee agreed with PwC that, for
purposes of simplifying PwC's compliance with the subpoenas, PwC
was authorized to interpret the two subpoenas as being
coextensive and requiring production of the same universe of
documents, so that PwC would produce identical sets of responsive

PwC did not file any motion to quash or modify the subpoenas but
did make objections to the document requests. Subsequently PwC
produced to the Debtor and the Official Committee some -- but not
all -- documents that were responsive to the subpoenas.

Michelle McMahon at Connolly, Bove, Lodge & Hutz LLP in Delaware
told Judge Walsh that despite the Debtor's good faith efforts to
resolve these disputes PwC has:

      (1) Interposed meritless objections to producing documents
responsive to the subpoenas; and

      (2) Failed to produce its work papers and other responsive
documents and files in the electronic form in which they were
created, compiled, organized and used by PwC personnel in
conducting the audit of Safety-Kleen's financial statements.

The Debtor asked Judge Peter J. Walsh to direct PwC to produce
all documents that are responsive to the subpoena. The Debtor
contends that PwC's objection to the request for production which
asks for all evaluations, assessments, critiques, analyses or
reviews of PwC's services or other accountants or auditors with
respect to the Debtor, including peer evaluations and second
partner reviews, are relevant to Debtor's inquiry as to whether
the audit and financial review services performed on its behalf
conformed to applicable standards or were instead deficient.

Ms. McMahon told Judge Walsh that PwC does not challenge the
documents' relevance but objects based only on the policies
protecting self-critical reviews or evaluations from disclosure.
Ms. McMahon asserts that PwC has failed to state the legal bases
of its protection policies.

PwC objects to a second request, the Debtor told Judge Walsh,
which seeks all documents prepared or disseminated by PwC that
describe the purpose, function, form, nature or contents of
working papers, and a third request which seeks all documents
prepared or disseminated by PwC relating to its policies,
procedures or practices in providing accounting and financial
review services on identical grounds. PwC alleged that the
requests are overly broad, unduly burdensome, harassing,
irrelevant and beyond the permissible scope of discovery.

The Debtor told Judge Walsh that it intends to discover PwC's
guidance, policies and customary practices regarding:

      (1) How to conduct an audit or financial review;

      (2) Compliance with requirements of Generally Accepted
Accounting and/or Auditing Standards in performing audit or
financial review services;

      (3) How to address specific accounting and auditing issues
and determine appropriate accounting treatment;

      (4) Work papers' function and purpose;

      (5) What materials should be included in work papers;

      (6) How work papers and/or desk files should be prepared,
compiled and/or organized;

      (7) Internal procedures in an audit or financial review or
in preparing, compiling or organizing work papers; and

      (8) Compliance by PwC personnel who participated in the
Debtor's audit and/or financial review with internal guidance,
policies and procedures.

The Debtor declared that PwC invokes the same litany of
objections in response to a fourth request, which seeks the
personnel files of all PwC accountants or auditors who conducted
or participated in the Debtor's accounting or financial review.
The Debtor finds PwC's objections frivolous and contends that the
request is relevant to whether PwC had conformed to generally
accepted accounting and audit standards.

Ms. McMahon told Judge Walsh that although PwC used a paperless,
computerized system to create, compile, organize and use its work
papers and to conduct its financial audits for Safety-Kleen, PwC
has not shared its work papers in the electronic form in which
they were created, organized and used in the usual course. PwC,
she added, has produced only paper printouts of some of these
files in violation of the rule that a person responding to a
subpoena should produce them as they are kept in the usual course
of business or organize and label them to correspond with the
categories in the demand.

Ms. McMahon assailed as inadequate PwC's production of the files
in the form of paper printouts, saying numerous documents and
files are incomplete, illegible or missing. This despite the fact
that PwC agreed to produce legible, complete paper copies of all
requested documents and files. The Debtor, she informed Judge
Walsh, awaits production of these documents.

She reminded Judge Walsh that even if PwC's production of the
files in paper printout forms was complete, it would be
impossible to understand PwC's work papers or to access, review
or analyze the underlying data in the same way a PwC personnel
did during the audits. It also would be impossible, she goes on,
to reconstruct or evaluate how PwC conducted the audits by
reviewing only the printouts totaling almost 90,000 pages.
Accordingly, the Debtor asked Judge Walsh to direct PwC to

      (1) its work papers in the same electronic form as they were
organized and used by PwC personnel during the audits in

      (2) the software that PwC personnel used to access, read or
otherwise use the work papers and their data; and

      (3) all written instructions on the use of the software.

(Safety-Kleen Bankruptcy News, Issue No. 14; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

STAR TELECOM: Files for Bankruptcy & Top Level Executives Resign
STAR Telecommunications Inc. (Nasdaq:STRX) announced that Brett
S. Messing, chief executive officer, Allen Sciarillo, chief
financial officer, Timothy F. Sylvester, executive vice president
and general counsel, and David Vaun Crumly, executive vice
president - sales and marketing, resigned from their respective
management positions effective March 8, 2001.

In addition, Steve Carroll, Alan Rothenberg, Paul Vogel and Mr.
Messing resigned from STAR's board of directors effective March
8, 2001. At the request of the current members of STAR's board of
directors, Gordon Hutchins, Jr., a member of STAR's board of
directors, has agreed to serve as STAR's acting chief executive

STAR also disclosed the termination of its receivables factoring
arrangement with RFC Capital Corporation and a demand for payment
by MCI WorldCom Network Services. On March 5, 2001, RFC Capital
Corporation terminated its receivables factoring arrangement with
STAR citing an event of default on the part of STAR.

On March 8, 2001, MCI WorldCom Network Services demanded payment
in full of the amounts owed to it by STAR. MCI WorldCom Network
Services declared an event of default on the part of STAR
resulting from a material adverse change in the financial
condition of STAR and its wholly owned subsidiary, PT-1
Communications Inc., including the termination of STAR's
agreement with RFC.

Pursuant to the terms of a workout agreement between STAR and MCI
WorldCom Network Services, MCI WorldCom Network Services has
assumed control of the operations of PT-1 and has installed new

STAR has determined that its liabilities substantially exceed its
assets and as a result, STAR decided to file for U.S. Bankruptcy
Code Chapter 11 bankruptcy protection Tuesday.

About STAR Telecommunications

STAR Telecommunications provides global telecommunications
services to consumers and long distance carriers. STAR provides
international and national long distance services, international
private line, dial around services and international toll-free

STAR TELECOM: Case Summary & 20 Largest Unsecured Creditors
Debtor: Star Telecommunications, Inc.
         223 East De La Guerra
         Santa Barbara, CA 93101

Debtor affiliates filing separate chapter 11 petitions in the
U.S. Bankruptcy Court in the Eastern District of New York:

      PT-1 Long Distance Inc. (Case # 01-12658-CBD)
      PT-1 Technologies, Inc. (Case # 01-12660-CBD)
      PT-1 Communications     (Case # 01-12655-CBD)

      *** Date Filed: March 9, 2001

Type of Business: Provider of telecommunications services

Chapter 11 Petition Date: March 13, 2001

Court: District of Delaware

Bankruptcy Case No.: 01-00830

Judge: The Honorable Mary F. Walrath

Debtor's Counsel: Laura Davis Jones, Esq.
                   Pachulski, Stang, Ziehl, Young & Jones
                   919 North Market Street, 16th Floor
                   Wilmington, DE 19801
                   (302) 652-4100

Total Assets: $630,065,000

Total Debts: $284,634,000

List of Debtor's 20 Largest Unsecured Creditors:

Entity                        Nature Of Claim     Claim Amount
------                        ---------------     ------------
Wiltel (COGS)                                     $65,531,937
One Williams Center
Tulsa, OK 74172

AT&T                          Trade               $11,578,010
300 Atrum Dr.
Somerset, NJ 08873

World Access                  Trade                $9,055,568
945 East Paces Ferry Road
Suite 2000
Atlanta, GA 30326

Sprint Corporation            Trade                $8,725,165
Wachovia Lockbox #101465
3585 Atlanta Avenue
Atlanta, GA 30354

Global Crossing               Trade                $4,844,840
20 Oak Hollow Ste.300
Southfield, MI 48034

Global Connect Partners       Trade                $2,974,139
5808 Lake Washington Bl
Suite 101
Kirkland, WA 98033

RSLCOM                        Trade                $2,312,299
1001 Brinton Road
Pittsburgh, PA 15221

ITXC                          Trade                $2,228,365
Attn: Ed Jordan
600 College Road East
Princeton, NJ 08540

Qwest                         Trade                $1,638,970
Attn: Lockbox Express
1231 Durrett Lane
Louisville, KY 40285

New Global Telecom Inc.       Trade                $1,357,916
1600 Jackson St., #300
Golden, CO 80401

Cable & Wireless                                   $1,238,272
8219 Leesburg Pike
Vienna, VA 22182

AT&T Private 300              Trade                $1,205,721
P.O. Box 10262
Van Nuys, CA 91410-0262

Telia North America Inc.      Trade                $1,143,788
8133 Leesburg Pike
Suite 400
Vienna, VA 22182

Codetel International         Trade                $1,129,069
Attn: Barbara Bailey
700 Plaza Drive, 2nd Fl
Secaucus, NJ 07904

Tricom USA Inc.               Trade                  $934,074
One Exchange Place
Suite 400
NJ 7302

China Motion                  Trade                  $666,453
40 Des Voeux Road West
Hong Kong

Tele Danmark- Accts           Trade                  $517,957
Sletvej 30 A233
Tranbjerg J, Denmark

VIP Calling IBASIS            Trade                  $496,008
20 Second Avenue
Burlington, MA 01803

Telia UK Ltd                  Trade                  $269,869
95 Cromwell Road
London, SWL 4DL

Swisscom, NA                  Trade                   $26,480
2001 L. Street NW
Suite 750
Washington, DC 20036

SUMMIT CBO: S&P Puts A and B Notes Ratings on Credit Watch
Standard & Poor's placed its ratings on the class A and B notes
issued by Summit CBO I Ltd and co-issued by Summit CBO I Funding
Corp. on CreditWatch with negative implications.

The CreditWatch action reflects a significant deterioration in
the collateral pool credit quality and the recent increase in the
pool default rate. According to the Feb 28, 2001 trustee report,
a total of $41.7 million, or approximately 12% of the total
collateral pool is in default.

Due to the rapid increase in the default rate, all of the
overcollateralization tests (the class A/B, C, and D) are
currently in violation. The class A/B overcollateralization test
(currently 117% versus the required minimum of 120%) has been out
of compliance for the past two months.

Standard & Poor's will be performing a cash flow analysis, and
reviewing the results from the cash flow model runs and Standard
& Poor's default model to evaluate the impact of the credit
deterioration on the current ratings for the class A and B notes,
Standard & Poor's said.

SUN HEALTHCARE: Amends $200,000,000 DIP Facility for Second Time
During the first quarter of 2001, Sun Healthcare Group, Inc.
notified the Agents of the occurrence of certain defaults and/or
events of default under the amended Financing Agreement and
requested that the Lenders waive such defaults. In particular,
the Debtors informed the Agents that they (1) permitted
cumulative EBITDA for the months ending November 2000 and January
2001 to be less than the amount specified in Section 6.05 of the
Financing Agreement, and (2) failed to deliver to the Agents the
financial statements and certificates required by Sections
5.01(b) and (c) of the Financing Agreement.

As a result of negotiations, pursuant to a Forbearance Agreement
by letter, the Lenders agreed to (1) forbear from exercising any
remedies available to them under the Financing Agreement and (2)
continue to extend credit to the Debtors in accordance with the
terms and conditions of the Financing Agreement on the condition
that the Lenders, the Agents, and the Debtors enter into a second
amendment to the Financing Agreement in accordance with the
provisions of the Forbearance Agreement.

As consideration for the Lenders' agreement, the Debtors agreed,
subject to Bankruptcy Court approval, to pay to Lenders' Agent a
forbearance fee of $150,000 for pro rata distribution to the

The parties also agreed to the terms of the proposed Second
Amendment to the Financing Agreement which provide that:

      (1) The Lenders will waive the DIP Defaults upon and subject
to the occurrence of the Second Amendment Closing Date through
the satisfaction of the conditions set forth in the Second

      (2) The amount of the Commitment will be reduced from
$200,000,000 to $170,000,000 and the Commitment Fee will be
increased from 0.375% to 0.50%;

      (3) The interest rate on both ABR Loans and Eurodollar Loans
set forth in 2.08 will be increased by one percent as of February
15, 2001. To the extent that the Debtors achieve EBITDA of at
least $7 million for each of two consecutive months, the increase
in the interest rate for the following calendar month will be
reduced to 0.5%. If the Debtors achieve EBITDA of at least $9
million for each of two consecutive months, there will be no
increase in the interest rate for the next calendar month. In the
event of default, the interest rate in effect will be increased
by one percent.

      (4) The time period within which the Debtors are obligated
to provide audited annual reports required by Secion 5.01(a) will
be increased to 135 days following the end of the Debtors' fiscal
year. In addition, the Debtors will be obligated to report to the
Agents and the Lenders monthly on their progress in (a) divesting
assets identified for divestiture, (b) selling the Debtors'
headquarters building, and (c) selling its ancillary businesses.

      (5) The EBITDA covenant in Section 6.05 will be modified to
reflect the lower EBITDA projections estimated by the Debtors;

      (6) New covenants will be added which require the Debtors to
maintain certain average Credit Availability on a bi-weekly and
monthly basis and to have at all times, cash on hand of at least
$20 million.

      (7) Upon approval of the Second Amendment by the Bankruptcy
Court, the Debtors will pay to Lenders Agent the Forbearance Fee
and an Amendment Fee in the amount of $350,000 for pro rata
distribution by Lenders' Agent to the Lenders in accordance with
each Lenders' commitment.

      (8) The Debtors will obtain an order of the Bankruptcy Court
by no later than March 15, 2001 approving the Second Amendment
and authorizing the payment of the Forbearance Fee and the
Amendment Fee.

By this motion, the Debtors sought the Court's approval, pursuant
to sections 363 and 364 of the Bankruptcy Code, of the Second
Amendment to the Financing Agreement, and the authority to pay to
the Lenders' Agent the Forbearance Fee and the Amendment Fee. The
Debtors believe that the relief requested is necessary and will
inure to the benefit of their estates and creditors. (Sun
Healthcare Bankruptcy News, Issue No. 19; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

VALUE AMERICA: Proposes Plan Of Liquidation
Value America, Inc., tells the U.S. Bankruptcy Court that its
proposed plan of liquidation is the culmination of six months of
consensual, good faith negotiations among the major
constituencies in the case, including the debtor and the Official
Committee of Unsecured Creditors.  The debtor believes that the
best way to achieve the maximum value possible for its creditors
is to liquidate and distribute its assets under Chapter 11 as
soon as possible with a feasible plan of liquidation. With this
in mind, the debtor negotiated with the Creditors' Committee to
formulate a plan that protected the rights of all parties
concerned and could be confirmed without unreasonable delay. The
plan is a liquidation plan and does not contemplate the financial
rehabilitation of the debtor or the continuation of its business.
The debtor has liquidated substantially all of its operating

VALUE AMERICA: Hewlett-Packard Objects to Disclosure Statement
The Hewlett-Packard Company objects to the First Amended
Disclosure Statement for the plan of liquidation of Value
America, Inc., dated December 18, 2001.

HP is a creditor and party in interest. HP has filed a
prepetition claim in the amount of $2.8 million which consists of
its lease rejection damages and unpaid lease and consulting
payments as of the petition date. In addition, the debtor seeks
payment of $330,890 in pre-rejection postpetition rent which has
not been paid by the debtor.

According to HP, there is not adequate information in the
Disclosure statement to determine if he case should be converted
to Chapter 7 or whether the debtor should be liquidated in
Chapter 11. HP states that the Amended Disclosure statement
contains a confusing description of the debtor's existing cash.
The reference to some $6 million as "restricted", an undefined
term, is, to HP, confusing.

VIDEO CITY: Wants More Time To Assume and Reject Property Leases
A hearing will be held on March 21, 2001 at 10:00 AM before the
Honorable Thomas B. Donovan, US Bankruptcy Judge, Los Angeles
California, to consider the motion filed by Video City, Inc. and
its affiliated debtors to extend the time within which the
debtors are required to assume or reject their nonresidential
real property leases pertaining to the debtors' administrative
offices, warehouses and retail locations, for a period of one
hundred and twenty days, from February 23, 2001, through and
including June 25, 2001.

The debtors require more time to formulate a plan of
reorganization. The debtors devoted the initial months of their
bankruptcy case stabilizing their business, obtaining Court
approval of the use of cash collateral, calming and maintaining
their business relationships with their suppliers, many of whom
are creditors, complying with reporting requirements,
implementing and consummating a sale of their assets and the
closure of stores. The debtors also successfully consummated a
sale of the debtors' east coast operations to M.G.A.

The debtors claim that if they were forced to assume or reject
the leases at this time, it could have severely negative
ramifications for the debtors and their estates because the
leases still need to be evaluated and/or renegotiated.

VLASIC FOODS: Posts Second Quarter 2001 Results
Vlasic Foods International (OTC Bulletin Board: VLFIQ) announced
its second quarter 2001 results for the period ending January 28,

Second quarter operating earnings before interest expense and
taxes for the Frozen Foods segment, which consists of the
Company's various frozen foods businesses in North America, were
$5.2 million versus a loss of 6.0 million a year ago.

Sales for the second quarter were $119 million versus $131
million a year ago. Sales were impacted by the continued
reduction of retail inventories by customers as well as a 3
percent decline in consumption.

Net earnings including discontinued operations showed a loss of
$22.2 million or a loss of $0.49 per share versus a loss of $21.7
million or $0.48 per share a year ago.

Vlasic Foods completed the quarter with more than $27 million of
cash on- hand. David Pauker, managing director of Goldin
Associates, a nationally recognized turnaround manager retained
by Vlasic Foods said, "We are in an even stronger cash position
today than when we closed the quarter in January as we now hold
more than $50 million of cash."

Sales for the first six months were $254 million versus $271
million a year ago. Excluding impairment charges of $21 million
recorded in the first quarter, operating earnings before interest
expense and taxes for the Frozen Food segment for the first six
months were $11.5 million versus $9.2 million a year ago.
Including the impairment charges, operating earnings before
interest expense and taxes for the Frozen Food segment for the
first six months showed a loss of $9.5 million. First half net
earnings including discontinued operations showed a loss of
$171.1 million or a loss of $3.77 per share versus a loss of
$17.6 million or $0.39 per share a year ago. Fiscal 2001 includes
impairment charges of $117 million recorded in the first quarter.
Excluding these charges, first half net earnings including
discontinued operations showed a loss of $54 million or a loss of
$1.19 per share.

VLASIC FOODS: Agrees to Sell Two U.K. Businesses
Vlasic Foods International (OTC Bulletin Board: VLFIQ) announced
that is has agreed to sell its two businesses in the United
Kingdom - "Freshbake" frozen foods and SonA canned and jarred
fruits, vegetables and beans - to separate parties, subject to
bankruptcy court approval. These businesses are now reported as
discontinued operations, as are the Company's pickle and barbecue
sauce businesses which the Company previously announced it has
agreed to sell to H.J. Heinz, subject to standard government and
regulatory clearances and bankruptcy court approval.

On January 29 Vlasic Foods and its domestic subsidiaries
announced that it voluntarily filed petitions under Chapter 11 of
the U.S. Bankruptcy Code in order to implement the terms of the
Heinz sale pursuant to section 363.

David Pauker, managing director of Goldin Associates, a
nationally recognized turnaround manager retained by Vlasic Foods
to assist in implementing a financial restructuring, said, "We
are continuing to consider all of our options regarding the
reorganization or sale of our various North American frozen foods
businesses. And as we announced earlier this month, all
competitive bids are due on March 27th regarding the pickle,
condiments and barbecue sauce businesses."

Further information regarding the sale of the U.K. businesses
will be made available upon completion of those transactions,
which is expected by the end of April.

WORK.COM: Plans to Shut Down By Month's End
Dow Jones & Co. and Excite@Home are pulling the plug on,
their jointly owned online business news and applications site,
according to The site will close on March 31.

A majority of the site's 113 employees in Redwood City, Calif.,
and in the editorial office in New York will lose their jobs this
week. The rest will work to close the business and shut down the
site. "The market for such a service has not developed as quickly
as expected," said Mark C. Stevens, executive vice president of
Excite@Home and a director. "The current decline in
online advertising spending, the challenges of securing further
funding, and an accelerated focus on profitability for the
venture necessitated this decision."

Earlier last week, Dow Jones warned investors that its first-
quarter earnings would plunge because of a sharp drop in
advertising at The Wall Street Journal. The company also said it
would make an unspecified number of job cuts. was
launched last April when Dow Jones folded its year-old news site into Excite's The aim was to
create a business-to-business portal and a site for business news
and information that targeted small business - a sector crowded
with the likes of and (ABI World,
March 13, 2001)


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

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

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 Go 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
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