TCR_Public/010322.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 22, 2001, Vol. 5, No. 57

                           Headlines

AMERICAN TEL/CLEARPOINT: File Chapter 7 Petitions in M.D. Florida
ARMSTRONG WORLD: Exclusive Period Extended Through October 5
BRIDGE INFORMATION: Proposes Key Employee Bonus Program
CHRIS-CRAFT: Boat Maker Sold To Stellican Ltd.
COMPLETE WELLNESS: Files for Chapter 7 Bankruptcy

DURANGO APPAREL: Case Summary and 20 Largest Unsecured Creditors
EMPRESSA ELECTRICA: S&P Slashes Senior Debt Ratings to CCC
FINOVA GROUP: Honoring Loan Servicing Obligations
FITZGERALDS GAMING: Majestic Buys Three Casinos For $149 Million
FRUIT OF THE LOOM: Ki Young Lee Moves for Adequate Protection

GC COMPANIES: Reports First-Quarter Fiscal 2001 Results
GLOBAL HEALTH: Selling American Ingredients To Pharmachem  
HARNISCHFEGER: Beloit Seeks To Clarify Dalton Real Estate Taxes
HEILIG MEYERS: B & C Investments Reports 9.8% Equity Stake
INDYMAC: Fitch Downgrades Manufactured Housing Securitization Notes

LATTICE SEMICONDUCTOR: State Farm Mutual Reports 6% Equity Stake
LERNOUT & HAUSPIE: Selling C-REC Technology To Visteon For $13MM
LOEWEN: Court Grants William Elridge Relief From Automatic Stay
LTV CORPORATION: Moves To Comply With & Settle Union Grievances
MARINER POST-ACUTE: Selling Four Ciena Facilities For $9 Million

MEDIQ INC.: Files First Amended Plan And Disclosure Statement
NATIONAL HEALTH: IPA Investors & Gary Davis Add To Equity Stake
OWENS CORNING: Assumes Prosecution Agreement & Hires Forman Perry
PAXSON COMM.: Landmark Group Owns Over 4 Million Shares of Stock
PHYCOR INC.: Asks Convertible Noteholders to Forebear After Default

PILLOWTEX CORP.: Taps Interbrand As Brand Management Consultant
PNV INC: Randall Publishing Acquires PNV.com Unit
SAFETY-KLEEN: PRP Group Moves To File Late Proof Of Claim
SUN HEALTHCARE: Asks To Extend Rule 9027 Removal Period To Jul 22
TELEX: Moody's Cuts Senior Notes to Ca & Secured Bank Debt to B3

TOROTEL: Management Exploring Alternatives To Improve Cash Flow
UCAR INTERNATIONAL: Moody's Changes Outlook to Negative
UTILITY.COM: Cuts Jobs & Shuts Down Due To Rising Debts
VENCOR INC.: Posts $53.6 Million Net Loss For FY 2000
VENCOR INC.: Seeks To Extend Rule 9027 Removal Period To June 11

VENCOR: Transitional Hospital Settles Civil Liabilities For 1.5MM
VLASIC FOODS: Engages Skadden Arps As Lead Bankruptcy Counsel
WCI STEEL: Senior Secured Notes Rating Dips to B3
WHEELING-PITTSBURGH: There's No Separation Between Church & Steel
XPEDIOR INC.: May Sell Assets Under Bankruptcy To Pay Debts

XPEDIOR INC: Fails To Meet Nasdaq's Listing Requirements

                           *********

AMERICAN TEL/CLEARPOINT: File Chapter 7 Petitions in M.D. Florida
-----------------------------------------------------------------
FDN, Inc. (OTCBB:FDNI) said it reduced its overall debt burden when two
subsidiaries, American Tel Communications, Inc. and ClearPoint
Communications, Inc., f/k/a FON Digital Network, Inc., filed for
protection from their creditors under Chapter 7 of the United States
Bankruptcy Code. The filing was made in the U.S. Bankruptcy Court in the
Middle District of Florida on the 16th of March, 2001.

"The bankruptcy of these subsidiaries allows FDN, Inc. to continue
serving its customers and distributors without interruption of its
services," stated Paul Matthews, Chief Executive Officer. "This
voluntary filing seeks relief to the overwhelming debts of the
subsidiaries. Potentially $10,000,000 of debt, from prior management,
may be discharged. FDN, Inc. plans to continue its own operations, while
concluding the operation of these two subsidiaries, American Tel
Communications, Inc. and ClearPoint Communications. Inc., f/k/a FON
Digital Network, Inc."

FDN, Inc. is an industry leader in providing integrated and enhanced
telecommunication and Internet services to consumers and small business
customers. FDN, Inc.'s product line includes: residential long-distance,
nationwide ISP, Internet services including web hosting and web
development, domestic and international prepaid carrier services, and
wire services, for international wire transfers and U.S. funds transfers
via terminals and debit cards.


ARMSTRONG WORLD: Exclusive Period Extended Through October 5
------------------------------------------------------------
A court granted Armstrong World Industries Inc.'s request for a six-
month extension of its exclusive chapter 11 plan filing period, further
barring third parties from filing competing plans in the case through
Oct. 5, according to Dow Jones. Judge Joseph J. Farnan Jr. of the U.S.
District Court in Wilmington, Del., also extended through Nov. 4 the
time during which Armstrong would maintain its exclusivity to solicit
votes to any plan filed by the Oct. 5 deadline, according to an order
obtained Monday by Federal Filings Business News.

The company, the chief operating subsidiary of nonbankrupt floor
manufacturer Armstrong Holdings Inc. (ACK), said that it hasn't yet had
a chance to develop a business plan because it has devoted its time to
stabilizing operations and addressing emergencies that must be attended
to during the early stages of a chapter 11 case. The company also said
it needs time to negotiate a plan with its creditors and other parties
in interest and to assess creditor claims. Armstrong World and two of
its wholly owned subsidiaries filed for chapter 11 bankruptcy protection
on Dec. 6, 2000, listing assets of $4 billion and liabilities of $3.3
billion. (ABI World, March 20, 2001)


BRIDGE INFORMATION: Proposes Key Employee Bonus Program
-------------------------------------------------------
The commencement of Bridge Information Systems, Inc.'s Chapter 11
proceedings, Gregory D. Willard, Esq., told Judge McDonald, has caused
the Debtors' Key Employees -- a group consisting of 4 chief executive
officers of Bridge, 9 senior managers of Bridge; and an unstated number
of other employees who are "critical to preservation of enterprise
values" -- to have heightened concerns regarding continued employment
and receipt of compensation."

Bridge's ability to preserve and protect their businesses and ultimately
reorganize, will depend in large part upon the dedication of the Key
Employees. Key Employees are and will remain vulnerable to solicitation
by Debtors' competitors for employment elsewhere. Many Debtors conduct
business in markets where competitors continually attempt to solicit Key
Employees to terminate employment with the Debtors. This is especially
true during times of economic uncertainty which the Debtors are
experiencing. The Debtors cannot afford to lose Key Employees at this
time. If Key Employees leave, it is not only difficult but very
expensive for the Debtors to obtain, train and retain able replacements.

To provide Key Employees with an economic incentive to remain in
the Debtors' employ, Bridge proposed to provide Retention Payments to
its Key Employees. Bridge asked for authority to create an $8,500,000
aggregate pool of funds for Retention
Payments plus an additional $3,000,000 for contingent payments
based upon the successful outcome of this reorganization
proceeding.

Bridge explained that the Key Employee Bonus Program designed to
supplement base salaries and severance policies of the Key Employees
with the goal of retaining valuable employees who might
otherwise seek higher compensation or greater security with other
employers. Prior to commencing these cases, many Key Employees
witnessed restructuring and downsizing of various operations.

Bridge needs to counteract the period of instability and
uncertainty experienced during the period preceding the filing of
these Chapter 11 cases. The Program is also designed to provide
the Key Employees with incentives to remain loyal despite the
additional burdens imposed upon the Debtors by filing these
Chapter 11 cases and any perceived limitations upon the Key
Employees' career opportunities.

The Debtors proposed to dole the $8,500,000 out in installments
through December 31, 2001, subject to acceleration in the event
of (i) confirmation of a plan of reorganization pursuant to 11
U.S.C. Sec. 1129; (ii) sale of all or substantially all of the
assets of the Debtors pursuant to 11 U.S.C. Sec. 363; (iii)
termination by the Debtors of employment of a Key Employee; or
(iv) with respect to the chief executive officers and senior
managers of Bridge, 90 days after appointment of a Chapter 7
trustee, if appointed, pursuant to 11 U.S.C. Sec. 701; provided,
however, that such appointment is not initiated pursuant to a
motion by the Debtors requesting that these Chapter 11
proceedings be converted to a case under Chapter 7 of the
Bankruptcy Code, unless such motion is requested or consented to
by the Lenders.

The Debtors said that the Retention Payments are structured to
maximize the likelihood that the Key Employees remain in the
employ of the Debtors for the requisite period to maximize the
opportunity to obtain a successful outcome in these proceedings.

The identity of the individual Key Employees and all information
relating to compensation, bonuses, benefits, etc., as well as
detailed financial and timing information about the payments to
be made are under wraps. "Disclosure of [this] Confidential
Information would be materially detrimental to the Debtors'
businesses and the relationships with the Key Employees, as well
as the relationships with the remainder of the Debtors'
workforce," Mr. Willard argued to Judge McDonald. The Court
agreed and directed that the details be held under seal pursuant
to 11 U.S.C. Sec. 107 and withheld from public review.

Due to the sensitivity of the Confidential Information, Judge
McDonald directed that (A) Disclosure of the Confidential
Information shall be limited to the Court, attorneys and
representatives of the Debtors, and, in camera, (i) attorneys for
the Lenders; (ii) attorneys for the U.S. Trustee; and (iii)
attorneys representing the duly appointed members of the
unsecured creditors' committee appointed in these proceedings;
and (B) any person to whom any such documents are shown or with
whom any information contained in those documents is discussed
shall first be shown a copy of the Court's protective order and
must agree in writing to abide by its provisions. (Bridge Bankruptcy
News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900)


CHRIS-CRAFT: Boat Maker Sold To Stellican Ltd.
----------------------------------------------
Chris-Craft, a maker of boats, has been bought from its owner, Genmar
Holdings Inc. of Minneapolis, Mn., by Stellican Ltd., an investment
company, for an undisclosed amount. It's not certain whether, Chris-
Craft, which shut down operations at its facility in Bradenton, Fl. last
December, will restart operations in the near future. (New Generation
Research, March 20, 2001)


COMPLETE WELLNESS: Files for Chapter 7 Bankruptcy
-------------------------------------------------
Complete Wellness Centers, Inc. (OTC Bulletin Board: CMWL) has filed for
Chapter 7 bankruptcy liquidation. The company has attempted on two
occasions to enter into merger agreements with similar operations along
with financing plans, neither of which have been successful. The major
problem has been the inability to attract new capital investors
sufficient to restructure the debt to the satisfaction of the majority
of the creditors. The creditors did not agree in sufficient numbers to
restructure their debt to allow a successful financing in the public or
private capital markets. The company has ceased the management of its
clinic operations and has contracted out the consulting effort.

Over the past few weeks, the company has closed its offices and prepared
for the bankruptcy filing.

In a separate but related event, the company's independent auditors,
Amper, Politziner & Mattia P.A., ceased their relationship as of
February 14, 2001.

Chairman Jack Pawlowski stated, "The board of directors of CWC is
extremely disappointed that its efforts to restructure the debt and
equity to strengthen its business condition and financial position in
order to enhance shareholder value and to satisfy the continued listing
requirements of the Nasdaq Stock Market have been unsuccessful."

Complete Wellness Centers, Inc. is a nationwide organization that
endeavors to provide member healthcare practices with administrative,
developmental, financial and practice management consulting assistance,
as well as to provide consumers access to traditional and alternative
health information, products and services. Inquiries may be directed to
the company at 407-673-3073.


DURANGO APPAREL: Case Summary and 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Durango Apparel Manufacturing, Inc.
        989 Avenue of the Americas
        New York, NY 10018
        (212) 302-6400

Debtor affiliates filing separate chapter 11 petitions:

             Durango Apparel Inc.
             Durango Holdings Corp.
             Durango Apparel Limited
             Durango Kentucky Inc.
             Durango Licensing Corp.

Type of Business: The company is engaged in the business of
manufacturing denim jeans and pants.
   
Chapter 11 Petition Date: March 19, 2001

Court: Southern District of New York

Bankruptcy Case Nos.: 01-11512
                      01-11510
                      01-11513
                      01-11516
                      01-11518
                      01-11520

Debtors' Counsel: Sherri D. Lydell, Esq.
                  Platzer, Swergold, Karlin, Levine     
                  Goldberg & Jaslow, LLP
                  150 East 52nd Street
                  New York, NY 10022
                  (212) 593-3000
                  Fax : (212) 593-0353
                  Email: slydell@platzerlaw.com

Total Assets: $30,918,557

Total Debts: $288,950,473

List of Debtors' 20 Largest Unsecured Creditors:

Entity                        Nature Of Claim   Claim Amount
------                        ---------------   ------------
Henry I. Siegel               Pension Plan      $ 11,015,902
c/o Wilmington Trust
1100 North Market Street
Wilmington, DE 19890-0001
Contact: Nancy Gray
(302)651-1900

Universal Uniforms, Inc.      Trade and alleged  $ 9,689,637
1721 S. Seventh St.           breach of contract
Louisville, KY 40208
Contact: John Egan, Esq.
Frost Brown Todd, LLC
400 W. Market, St., 32nd Fl
Louisville, KY 40202
(502)568-0224/(f):(502)581-1087


BNY Trust Co. of Missouri     Bond Debt          $ 6,450,000
911 Washington Street
Saint Louis, MO 63101
Contact: John Tishler, Esq.
Waller, Lansden et al.
511 Union Street, Suite 2100
Nashville, TN 37219
615-744-7756 (f)244-6804

Mount Vernon Mills            Trade              $ 1,422,285
P.O. Box 101732
Atlanta, GA 30392-1732
Contact: Hank Leonard
55 Beattie Place, Suite 700
Greenville, SC 29602
(864)233-4151 (f)467-1705

Amodeo Petti, Inc.            Trade                $ 607,222
156 5th Avenue
New York, NY 10010
Contact: Alan Schmaruk, Esq.
525 Broadway, 6th flr
New York, NY 10012

S.L. Green Management         Rent/alleged         $ 415,272
Contact: Richard Claiman, Esq.
Stempel, Bennett et al.
655 3rd Ave.
New York, NY 10017

Fruit of the Loom             Trade                 $ 407,084
P.O. Box 70016
Chicago, IL 60673-0016
(312)899-1320

International Business        Trade                 $ 395,998
Machine
27 Commerce Drive
Cranford, NJ 07016
(877)426-6006

Granitville Fabrics           Trade                 $ 390,947
133 Marshall Street
Granitville, SC 29829
(212)869-8700


Orix Financial Services,      Equipment Lease       $ 316,627
Inc.
P.O. Box 1669
Pittsburgh, PA 15230
Contact: 45 Rockefeller Plaza
7th Fl. New York, NY 10111

Galey & Lord Inc.             Trade                 $ 295,968
980 6th Avenue
New York, NY 10018
(212)465-3037

Computer Associates           Services              $ 214,764
International Inc.

1411 Trizechahn-Seing, LLC    Rent/alleged          $ 152,116
                              breach of contract

Thomaston Mills Inc.          Trade                 $ 117,068

International Paper Co.       Trade                 $ 114,753

Paxar Corporation             Trade                 $ 100,228

Twin Dragon Marketing, Inc.   Trade                  $ 86,875

Sun Trust Leasing             Equipment Lease        $ 86,140

Universal Fastners            Trade and              $ 83,156
                              equipment lease

Dorothy Sullivan              Alleged Wrongful       $ 74,999
                              Discharge


EMPRESSA ELECTRICA: S&P Slashes Senior Debt Ratings to CCC
----------------------------------------------------------
Standard & Poor's lowered its senior-unsecured debt and corporate credit
ratings on Empresa Electrica del Norte Grande S.A. (Edelnor) to triple-
'C' from single-'B', and placed the ratings on CreditWatch with negative
implications. Standard & Poor's may further lower Edelnor's ratings
pending ongoing conversations with Edelnor's management.

Edelnor generates and transmits electricity in the northern
interconnected system (SING), Chile's second largest electrical grid.
Mirant Corp. (triple-'B'-minus/Stable/'A-3'), a subsidiary of Southern
Co. (single-'A'/Stable/'A-1') owns 82% of Edelnor.

The downgrade reflects:

    --  Debt financing at the NorAndino gas pipeline project did
        not take place as forecasted (anticipated US$30 million
        cash flow to Edelnor);

    --  Uncertainty over Edelnor's ability to meet its financial
        obligations in 2001;

    --  The likelihood of default in the first quarter of 2002;

    --  Worse-than-anticipated operating performance resulting in
        coverage ratios below expectations;

    --  The anticipated loss of significant contract revenue at
        the end of 2001;

    --  Uncertainty about Edelnor's ability to keep and attain
        new sales contracts or sell into the spot market
        considering the competitive disadvantage generated by
        regulatory prohibitions on the use of petroleum coke
        fuel; and

    --  The entry of gas and gas-fired plants, which has created
        overcapacity in the SING grid.

Edelnor was to receive US$30 million from a debt issuance at its gas
pipeline subsidiary, NorAndino, and in this way reduce Edelnor's equity
investment in the project. However, this financing did not take place.
The elimination of this expected cash influx is pivotal to Edelnor's
current cash flow crunch, and makes Edelnor even more vulnerable in 2002
as it will lose the Emel distributors' contracts at the end of 2001. The
Emel contracts account for roughly one-half of contracted capacity.

The loss of these contracts coincides with the entry of lower marginal
cost, gas-fired facilities, which have doubled installed capacity in the
SING. Because most large customers have already procured firm supply,
there is little opportunity for Edelnor to replace these customers in
the SING.

While Edelnor is expected to be able to meet its financial obligations
in the first half of 2001, this will only be possible with the aid of a
US$6 million fund set aside for Edelnor, and made available by its
Chilean parent, Mirant Chile S.A. The purpose of this fund is to help
Edelnor work through minor cash flow difficulties due to timing. Edelnor
recently accessed the fund for the first time (approximately US$1.5
million). Mirant Corp., the U.S. parent, has stated its willingness to
provide minor amounts to cover timing issues during the year, but has no
plans to inject long-term funding. It is not clear whether Edelnor will
be able to meet its financial obligations in the second half of the year
without the aid of Mirant. Furthermore, without revenues from the Emel
contracts and expected narrowing margins on sales of coal-powered
energy, and barring any additional aid from its parent, it will be
exceedingly difficult for Edelnor to meet its scheduled interest
payments in March 2002. This assumes Edelnor does not win its appeal to
the national environmental regulator (CORAMA) to use pet coke, a more
efficient fuel, in its coal plants, which might enable the coal plants
to be dispatched more often. Even if Edelnor wins its appeal, however,
which may take place in the second half of 2001, it will only marginally
improve Edelnor's ability to meet its financial obligations in March
2002, Standard & Poor's said.


FINOVA GROUP: Honoring Loan Servicing Obligations
-------------------------------------------------
To the extent that The FINOVA Group, Inc.'s honoring or servicing of
obligations in the ordinary course of business requires the Debtors to
pay prepetition claims or take other action requiring approval of the
Bankruptcy Court, the Debtors sought and obtained authority to pay those
claims and authority to take all actions necessary to honor their
servicing obligations.

Continuing servicing obligations in the ordinary course of
business, Jonathan M. Landers, Esq., at Gibson, Dunn & Crutcher
LLP told Judge Wizmur, will help to ensure the continuation of
those servicing relationships and result in enhancement,
preservation and maximization of the value of the estates.

Consequently, honoring prepetition servicing obligations and
paying prepetition claims relating to servicing obligations are
necessary to the Debtors' on-going business operations in
chapter 11. (Finova Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


FITZGERALDS GAMING: Majestic Buys Three Casinos For $149 Million
----------------------------------------------------------------
Majestic Investor, LLC, a wholly owned subsidiary of Majestic Star
Casino located in Gary, Ind., cleared another hurdle in its recently
announced purchase agreement with Fitzgeralds Gaming Corporation to
purchase three of Fitzgeralds casinos. On Monday, a U.S. Bankruptcy
Court in Reno, Nev., approved the sale and transfer of Fitzgeralds'
assets at the three properties to Majestic.

Majestic's planned purchase of Fitzgeralds' casinos in Las Vegas;
Tunica, Miss.; and Black Hawk, Colo., for $149 million in cash plus
assumption of certain liabilities is contingent on licensing and
financing. Majestic is in the process of applying for licensing in each
of the gaming jurisdictions where Fitzgeralds operates and anticipates
that appropriate approvals will be received later this year.

Majestic currently operates a casino riverboat on Lake Michigan in Gary,
Ind., and is one of only a handful of privately held casino companies in
the United States. Majestic's owner, Detroit businessman Don H. Barden,
is the only African American in the world who wholly owns a casino
company.

"With the addition of these three casinos, Majestic will operate in
three of the top five gaming markets in the country," said Barden. "The
Fitzgeralds purchase is the first step in our plan to grow Majestic
beyond our home in Indiana. And, Monday's court approval of the sale
brings us one step closer to that goal."

The Majestic Star Casino, LLC was founded in December 1993 as an Indiana
limited liability company, to develop a riverboat casino in the City of
Gary. The Company's operations began on June 7, 1996.


FRUIT OF THE LOOM: Ki Young Lee Moves for Adequate Protection
-------------------------------------------------------------
Robert Dehney Esq., of Morris, Nichols, Arsht and Tunnell, asked Judge
Walsh for an Emergency Motion for adequate protection and limited relief
from automatic stay on behalf of his client, Ki Young Lee.

Mr. Dehney wrote that Judge Walsh recently vacated the automatic stay
against Mr. Lee. However, Fruit of the Loom, Ltd. continues to raise
issues with the Court that was supposedly resolved. It is a clear delay
tactic. Mr. Dehney asserted that this motion "represents Mr. Lee's
ongoing struggle to protect his interests against the shameless and
contemptuous actions of Fruit of the Loom." He holds that Fruit of the
Loom purposely let a bond mature that was supposed to provide security
for Mr. Lee.

Ms. Stickles responded with a request for an order setting forth the
extent of relief granted by the Court to eliminate the continuing
confusion. She stated that the Court initially ruled that Mr. Lee was
permitted to file counterclaims in his prepetition action. Fruit of the
Loom consented to Mr. Lee's action in New Jersey to go to judgment, but
not to attempt to collect against assets or property of the estate.

Ms. Stickles holds that Mr. Lee tried to assert priority interests in
Fruit of the Loom property, senior to other creditors. Mr. Lee agreed to
refrain from this and sought to do so before determination on the merits
of his case.

Ms. Stickles asserted the relief is justified because a) the funds are
property of Fruit of the Loom and subject to the jurisdiction of the
Court, b) Mr. Lee previously expressly disclaimed interest in the funds,
c) this Court's previous ruling specifically limited relief to Mr. Lee,
d) neither the Court nor Fruit of the Loom anticipated Mr. Lee's recent
actions.

Fruit of the Loom continues to approve of relief for Mr. Lee. However,
Debtor wants assurances that the funds will remain subject to the
automatic stay, not to be disbursed without further notice of this
Court.

Ms. Stickles objected to Mr. Lee's emergency request for relief from the
automatic stay. She stated the Mr. Lee filed two proofs of claim,
numbered 2689 and 2690; each asserting unliquidated claims in excess of
$17,000,000. However, by his own admission, those claims are no more
than general unsecured claims without priority.

Ms. Stickles holds that Mr. Lee's claim should not be granted priority
status. First, Mr. Lee has not met his burden of establishing a
constructive trust. A constructive trust is an extraordinary remedy,
which provides that even though Debtor has possession of the property,
legal title is actually vested with another party. Francois v. Francois,
599 F.2d 1286, 1291 (3rd Cir. 1979).

Second, Mr. Lee has no legal right to the bank collateral. The bond is
property of the estate and is for the benefit of all creditors, not just
Mr. Lee. He has the burden of showing that property rightfully belonging
to him is being wrongfully withheld.

Next, Mr. Lee is not entitled to his 1998 bonus. If Mr. Lee cannot prove
he is entitled to the 1998 bonus, he has no right to any payment from
anyone at anytime. Thus, even if the bond is viewed as an asset outside
the estate. Mr. Lee has submitted no proof that he is entitled to the
1998 bonus. Moreover, it is undisputed that Mr. Lee was not an employee
at year-end 1998, as required by the employment agreement.

Also, the New Jersey Court should resolve any dispute as to the 1998
bonus. That Court has greater familiarity with the facts concerning Mr.
Lee's fraudulent conduct, Fruit of the Loom's allegations, evidence
previously presented, and the various rulings of the action. Mr. Lee
must have a favorable ruling on all these issues before this Court
should impose a constructive trust on the estate.

Last, Mr. Lee has unclean hands. It is axiomatic that a constructive
trust is an equitable remedy and that the party seeking such a remedy
must have clean hands. In re McKay, 110 B.R. at 770-71. After all, the
primary basis for Mr. Lee's termination was a broad fraudulent scheme
that included bribing Pro Player's largest customer, Foot Locker. Paul
Morieko, the Foot Locker employee at issue has entered into an agreement
with the U.S. Attorney's office in New Jersey to plead guilty to
receiving bribe payments from Mr. Lee. Ms. Stickles further asserts that
Mr. Lee received kickbacks from various suppliers
and vendors of Pro Player while he managed the unit for Fruit of the
Loom.

Last, Fruit of the Loom has done nothing wrong. In fact, Mr. Lee has
been his own worst enemy. Rather than attempt to proceed against the
bond, Mr. Lee and his counsel took no action from the time the Judge
stayed the district court action in February 2000 until August 2000. The
delay-solely attributable to Mr. Lee-resulted in his inability to make a
claim against the bond prior to its expiration. (Fruit of the Loom
Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


GC COMPANIES: Reports First-Quarter Fiscal 2001 Results
-------------------------------------------------------
GC Companies, Inc. (NYSE: GCX), a national and international motion
picture exhibitor, reported financial results for its first quarter of
fiscal 2001. On October 11, 2000, the Company and a number of its
domestic subsidiaries filed petitions to reorganize under Chapter 11 of
the United States Bankruptcy Code, and certain of its domestic theatre
subsidiaries filed petitions to liquidate under Chapter 7 of the United
States Bankruptcy Code. The Company's international operations, which
are operated through a joint venture, did not file to reorganize and,
therefore, are not subject to the jurisdiction of the United States
Bankruptcy Court.

GC Companies reported a net loss for the first quarter of fiscal 2001 of
$3.4 million, or $0.44 per diluted share, which includes charges of
approximately $3.2 million relating to the reorganization of the
domestic theatre business, compared with a net loss of $0.9 million, or
$0.12 per diluted share, which included the impact of a charge for an
accounting change of $2.8 million, after taxes, for the first quarter of
fiscal 2000.

Revenues for the first quarter of fiscal 2001 were $86.3 million,
compared with $97.9 million in the same period last year.
The Company reported first-quarter operating earnings of $0.4 million
compared to an operating loss of $0.3 million for the first quarter of
2000. Operating earnings before gains on the disposition of theatre
assets, impairment, restructuring and reorganization charges were $3.5
million for the first quarter of 2001, compared with an operating loss
of $2.0 million for the same period in 2000.

This improvement in operating earnings before disposition of theatre
assets, impairment, restructuring and reorganization charges was
primarily due to the elimination of the losses incurred last year on
theatres closed during 2000, improved box office results during the
first quarter of 2001 compared to the previous year due to strong film
product and reduction of certain operating expenses as a result of
management initiatives.

GC Companies' theatre subsidiary, General Cinema Theatres, Inc.,
reported first-quarter fiscal 2001 operating earnings of $0.8 million,
compared with operating earnings of $0.6 million in the first quarter of
fiscal 2000. General Cinema Theatres' operating earnings for the first
quarter of 2001 before disposition of theatre assets, impairment,
restructuring and reorganization charges were $3.9 million compared with
an operating loss of $1.0 million for the same period last year.

As of January 31, 2001, General Cinema Theatres, Inc. operated 675
screens at 75 locations in 20 states compared with a total of 1,041
screens at 134 locations in 24 states as of January 31, 2000. As of
January 31, 2001, the Company operated 160 screens at 17 locations in
South America compared to 132 screens at 14 locations in South America
as of January 31, 2000.

The Company's investment portfolio at January 31, 2001 included
publicly- held investments in GrandVision, S.A.; El Sitio, Inc.;
MotherNature.com and privately-held minority investments in FleetCor
(formerly known as Fuelman), VeloCom, Vanguard Modular Building Systems
and American Capital Access. The aggregate carrying value of this
investment portfolio at January 31, 2001 was approximately $70.0
million.


GLOBAL HEALTH: Selling American Ingredients To Pharmachem  
---------------------------------------------------------
Global Health Sciences, Inc. announced that Kearny, NJ-based Pharmachem
Laboratories, Inc. has signed a contract to acquire substantially all
the assets of American Ingredients, Inc., a wholly owned subsidiary of
Global.

Both American Ingredients and Global are debtors in Chapter 11
proceedings in the United States Bankruptcy Court for the Central
District of California (Santa Ana Division). The transaction will be
conducted pursuant to Section 363 of the Bankruptcy Code and will be
subject to overbid. The closing on the transaction will occur as soon as
all necessary approvals are obtained.

In a joint statement, Pharmachem President David Holmes, and Howard
Simon, President of American Ingredients, commented, "This transaction
enables us to bring our customers a much broader spectrum of value added
products and unique services in a manner consistent with the needs of an
evolving industry."

Global Health Sciences, Inc. is a developer and custom manufacturer of
dietary and nutritional supplements. The Company develops and
manufactures vitamins, minerals, herbs, teas and other supplements in
tablet, capsule and powder form in a variety of shapes, sizes, colors,
flavors and textures designed to meet customers' specifications.

Pharmachem Laboratories, Inc. offers application-specific process
technologies for value-added nutritional ingredients.


HARNISCHFEGER: Beloit Seeks To Clarify Dalton Real Estate Taxes
---------------------------------------------------------------
Among the assets that Beloit Corporation has sold is real property
situated in the Town of Dalton, County of Berkshire, Massachusetts. In a
motion about the insurance company's coverage of prepetition taxes and
prepetition assessments, Beloit briefed the Court that the property was
sold to Crane & Co., Inc. at a
purchase price of $1,400,000, free and clear of all liens, claims and
encumbrances pursuant to 11 U.S.C. Section 1146.

The Property consists of three tax parcels with respect to which there
are unpaid prepetition real estate property taxes.

At the closing of the sale of the Property, the title insurance company
refused to cover the Prepetition Taxes and Prepetition Assessments
without placing approximately 180% of the amount in escrow, taking the
position that it was unclear whether they were covered by the definition
of "Encumbrances" in the Sale Motion and, accordingly, whether the
Dalton Order authorized the sale of
the Property free and clear of the Prepetition Taxes and the Prepetition
Assessments.

In connection with the Prepetition Taxes and the Prepetition
Assessments, Harnischfeger Industries, Inc. told Judge Walsh that:

     -- The Town of Dalton, Massachusetts levied taxes in the amount of
$39,400.02 (excluding interest and penalties), covering the third and
fourth quarters of such municipality's fiscal year 1999 (i.e. January 1,
1999 through June 30, 1999) and filed proof of claim # 2496 for
$40,680.79.

     -- The City of Pittsfield, Massachusetts levied tax in the amount
of $12,723.04 (excluding interest or penalties), covering the fourth
quarter of such municipality's fiscal year 1999 (i.e, April 1, 1999
through June 30, 1999), which corresponds to scheduled claim # s2240 for
$14,387.24. The aggregate amount of such taxes is $52,123.06 (the
Prepetition Taxes).

     -- In addition, the Town of Dalton, Massachusetts has levied
certain assessments against the Property for water, fire protection and
other unenumerated municipal services in the amount of approximately
$1,280.70, which corresponds to scheduled claim # si 16996 for $1,123.15
(the Prepetition Assessments). The Prepetition Assessments cover the
third and fourth quarters of
such municipality's fiscal year 1999 (i.e., January 1, 1999 through June
30, 1999).

Accordingly, at the Closing, $93,000 was placed in escrow with Land
America Commercial Title Services Corporation.

At the Closing, Beloit paid all post-petition taxes that accrued on the
Property through the Closing.

Beloit drew the Court's attention to Section 363(f) of the Bankruptcy
Code which authorizes a debtor-in-possession to sell property of the
estate "free and clear of any interest in such property of an entity
other than the estate" if (1) applicable non bankruptcy law permits sale
of such property free and clear
of such interest; (2) such entity consents; (3) such interest is a lien
and the price at which such property is to be sold is greater than the
aggregate value of all liens on such property; (4) such interest is in
bona fide dispute; or (5) such entity could be compelled, in a legal or
equitable proceeding, to accept
money satisfaction of such interest.

Beloit argued that the term "interest" has universally been interpreted
very broadly, and there is no dispute that it includes liens. See e.g.
Collier on Bankruptcy, 363.07, 363-35 (15th Ed. 1999). See also 11
U.S.C. Section 363(3). See, e.g., In the Matter of Tabone. Inc., 175
B.R. 855 (Bankr. D. N.J. 1994)
(the court applied section 363(f) in evaluating the liens created by the
outstanding real estate taxes).

Furthermore, section 363(f) is written in the disjunctive. Beloit
concluded that because at least one of the five conditions has been met
with respect to the sales of the Property, it may sell the Property free
and clear of encumbrances.

Accordingly, Beloit submitted that, the Property was properly sold free
and clear of all liens of the Taxing Authorities, including their
respective liens for the Prepetition Taxes and Prepetition Assessments.

Thus, in a motion, Beloit sought an order from the Court ordering that:

     (a) the Property was sold free and clear of the Prepetition Taxes
and Prepetition Assessments;

     (b) the Taxing Authorities' claims for such Prepetition Taxes and
Prepetition Assessments (where relevant) shall attach exclusively to the
proceeds of the relevant sale;

     (c) any interest and/or penalties levied by the Taxing Authorities
with respect to the Prepetition Taxes and Prepetition Assessments are
invalid;

     (d) the Taxing Authorities are directed to remove the Prepetition
Taxes and Prepetition Assessments from their respective tax rolls;

     (e) proof of claim # 2496 shall be reduced and allowed as a
priority claim  under section 507(a)(8) of the Bankruptcy Code in the
amount of $39,400.02;

     (f) proof of claim # s2240 shall be reduced and allowed as a
priority claim under section 507(a)(8) of the Bankruptcy Code in the
amount of $12,723.04;

     (g) proof of claim # sI 16996 shall be allowed as a priority claim
under section 507(a)(8) of the Bankruptcy Code in the amount of$
1,280.70;

     (h) Beloit shall pay the allowed priority claims in the respective
amount listed in (e) - (g) above (exclusive of any interest and/or
penalties) pursuant to the terms of any plan confirmed in the Beloit
case;

     (i) the Taxing Authorities are barred from filing any additional
claims against Beloit relating to the Property and are further barred
from asserting that the buyer of the Property is liable for any taxes or
assessments that accrued on the Property before the Closing; and

     (j) the escrow agent shall deliver to Beloit the amount placed in
escrow at the Closing, plus interest. (Harnischfeger Bankruptcy News,
Issue No. 38; Bankruptcy Creditors' Service, Inc., 609/392-0900)


HEILIG MEYERS: B & C Investments Reports 9.8% Equity Stake
----------------------------------------------------------
The following named persons, having sold some of their Heilig Meyers
Company common stock, currently retain: B & C Investments, LLC owns
5,442,200 shares of the common stock of Heilig Meyers Company with sole
voting and dispositive powers, and 525,000 shares with shared voting and
dispositive powers, representing 9.8% of the outstanding shares of
commons stock of the company.  Of this number the 5,442,200 shares are
owned directly by B & C Investments, LLC and 525,000 shares are owned by
Barney D. Visser.  

Mr. Visser is a 50% controlling member of Furniture Row, LLC, the sole
member of B & C Investments, LLC, and may be deemed to beneficially own
the shares of common stock owned by B & C Investments, LLC.  Furniture
Row, LLC's principal business is acting as a holding company for
numerous subsidiaries which are engaged in the retail home furnishings
business. Furniture Row, LLC is also the sole member of B & C
Investments, LLC.

Daniel J. Visser owns 5,000 shares of Heilig Meyers commons stock with
sole voting and dispositive powers.  This amount represents less than 1%
of the outstanding common stock of the company.   Mr. Visser is an
officer of Denver Mattress Company, a subsidiary of Furniture Row, LLC,
which is the sole member of B & C Investments, LLC.  Additionally, Mr.
Visser is the son of Barney D. Visser.

Gerald W. Meyering holds no Helig Meyers common stock.  Mr. Meyering is
an officer of Furniture Row Companies, a group of companies that
includes Furniture Row, LLC, the sole member of B & C Investments, LLC.

B & C Investments, LLC and Barney D. Visser may be deemed to
beneficially own, in the aggregate, 5,967,200 shares of the company's
common stock.

Daniel J. Visser may be deemed to beneficially own, in the aggregate,
5,000 shares of the company's common stock.  Mr. Visser disclaims any
beneficial ownership of any other person's securities.

Gerald W. Meyering has sold all 236,000 shares of Heilig's common stock
which he beneficially owned.

The trading dates, number of shares sold and the price per share for all
transactions related to the shares of common stock owned and effected in
the past sixty (60) days are set forth below.  All sales were made in
the open market. There were no purchases of the Heilig's common stock  
effected in the past sixty (60) days by the above cited persons.

Each of the above has the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale, the shares of
common stock owned directly by it/him.


                      Date of           Number of        Price   
Reporting Person     Transaction       Shares Sold      Per Share
----------------     -----------       -----------      ---------
Barney D. Visser       2/1/01            20,000          $0.0775
                       2/2/01            45,000          $0.0775
                       2/2/01            15,000          $0.075
                       2/5/01            50,000          $0.07
                       2/6/01            25,000          $0.07
                       2/7/01            25,000          $0.07
                       2/8/01           100,000          $0.069
                       2/8/01            50,000          $0.065
                       2/8/01            70,000          $0.07
                       2/9/01            50,000          $0.062
                       2/9/01            25,000          $0.065
                       2/15/01          175,000          $0.064
                       2/16/01           43,600          $0.063
                       2/21/01           50,000          $0.066
                       2/21/01           50,000          $0.067
                       2/22/01           50,000          $0.066
                       2/23/01          125,000          $0.069
                                        -------
                                        968,600
                                        =======


Daniel  J. Visser     2/21/01            35,000          $0.066
                       2/21/01            5,000          $0.0675
                                         ------
                                         40,000
                                         ======


Gerald W. Meyering    1/24/01            26,000          $0.13
                      1/25/01            20,000          $0.085
                      1/25/01            40,000          $0.095
                      1/25/01            70,000          $0.10
                      1/25/01            80,000          $0.0825
                                        -------
                                        236,000
                                        =======

B & C Investments, LLC - no transactions effected in the past 60 days.


INDYMAC: Fitch Downgrades Manufactured Housing Securitization Notes
-------------------------------------------------------------------
IndyMac manufactured housing contract pass-through certificates, series
1997-1, class B-1 was lowered by Fitch to BB from BBB and class B-2 was
lowered to CCC from BB.

Additionally, series 1998-1, class B-1 was lowered to BB from BBB and
class B-2 is lowered to CCC from BB. Class B-1 for series 1997-1 will
remain on Rating Watch Negative and class B-1 for series 1998-1 is
placed on Rating Watch Negative.

The actions reflect the deteriorating performance of the underlying
manufactured housing loans in both transactions. Higher than expected
losses have resulted in principal shortfalls to the senior certificates
and a reduction in the amount of overcollateralization (OC).

In February 1999, Fitch placed class B-1 and B-2 of series 1997-1 on
Rating Watch Negative.

As of the distribution date in February 2001, the overcollateralization
amount for both series 1997-1 and 1998-1 is equal to $0.00 (0.00%). The
original OC target for series 1997-1 and 1998-1 is equal to $1,864,155
(1.25%) and $1,827,861 (1.25%) respectively.

On the other hand, as of the February 2001 distribution date, the
cumulative loss percentages on series 1997-1 and 1998-1 are 6.31% and
5.14% respectively. The class A certificates in series 1997-1 and 1998-1
have Unpaid Certificate Principal Shortfalls totaling $2,209,165 and
$2,206,912 respectively as of February 2001.

Although the company exited the manufactured housing origination
business in mid-1999, it continues to service its loans from Pasadena
where the company's mortgage loan servicing operation is located.

During the past 12 months the level of repossessed homes has increased
at a considerably rapid pace.

For series 1997-1, the inventory of repossessed homes has grown from
5.02% at the end of January 2000, to 7.79% for the period ending January
2001.

For series 1998-1, repossession inventory levels have increased from
4.24% at the end of January 2000, to 6.53% at the end of January 2001.

The lack of dealer relationships (as a result of exiting the origination
business) coupled with the oversupply of new and repossessed homes in
the marketplace, has put significant pressure on recovery rates.

As a result, over the past few months there has been a significant
increase in losses.

The current credit support for class B-1 is 7.65% and 6.57% for series
1997-1 and for 1998-1 respectively. The credit support for class B-2 is
0.00% for both series.


LATTICE SEMICONDUCTOR: State Farm Mutual Reports 6% Equity Stake
----------------------------------------------------------------
State Farm Mutual Automobile Insurance Company owns 6,500,000 shares of
the common stock of Lattice Semiconductor Corporation with sole voting &
dispositive powers. 6,500,000 shares represents 6.04% of the outstanding
common stock of the company. State Farm Investment Management Corp. owns
3,900 shares of Lattice Semiconductor with sole voting & dispositive
powers, however, this relatively small amount represents less than 1% of
Lattice's outstanding common stock.

State Farm Mutual Automobile Insurance Company is the parent of wholly
owned subsidiaries, State Farm Life Insurance Company, which is the
parent of the wholly owned subsidiary State Farm Life and Accident
Assurance Company; State Farm Fire and Casualty Company; and, State Farm
Investment Management Corp. State Farm Investment Management Corp. acts
as the investment advisor to State Farm Growth Fund, Inc. and State Farm
Balanced Fund, Inc., State Farm Variable Product Trust, and State Farm
Mutual Fund Trust.

The Investment Committees of the Board of Directors of each of the
insurance companies and of the State Farm Investment Management Corp.
and the Trustees of the State Farm Insurance Companies Employee
Retirement Trust, State Farm Insurance Companies Savings and Thrift Plan
for U.S. Employees, State Farm Variable Product Trust, and State Farm
Mutual Fund Trust are vested with the responsibility for investing the
assets of the companies, the Funds, the Trusts, and the Equities Account
and the Balanced Account of the State Farm Insurance Companies Savings
and Thrift Plan for U.S. Employees.

State Farm Mutual Automobile Insurance Company employs all personnel of
the Investment Department. State Farm Investment Management Corp. has a
written agreement with State Farm Mutual Automobile Insurance Company
whereby the Investment Department personnel assist State Farm Investment
Management Corp. in its duties as investment advisor to the Funds, State
Farm Variable Product Trust, and State Farm Mutual Fund Trust.
Investment actions taken by the Investment Department are ratified by
the Investment Committees of the Boards of Directors of the insurance
companies and State Farm Investment Management Corp. and by the Trustees
of the Trusts and the Plan. Certain members of the Investment Department
also execute voting proxies from time to time but in situations where a
vote contrary to that of management on a major policy matter is under
consideration, approval of the Investment Committees of the Boards of
Directors of the Companies involved is first obtained.


LEISURE TIME: Files Chapter 11 Petition in N.D. Georgia
-------------------------------------------------------
Leisure Time Casinos & Resorts, Inc. (LTCR) said that on Friday March
16, 2001 it filed with the United States Bankruptcy Court, Northern
District of Georgia, Atlanta Division to seek protection under the
chapter 11 of the bankruptcy code. Leisure Time Technology, Inc. (LTT) a
wholly owned subsidiary of LTCR has also filed for chapter 11
protection.

Mr. Johnson, President and CEO of Leisure Time, stated, "although I
regret that it has become necessary to initiate this step, The Boards of
Directors of LTCR and LTT concur that this is the proper course of
action to take at this time. The decision of the South Carolina Supreme
Court in October 1999 to no longer allow video gaming has had a
significant impact on our ability to maintain profitable operations and
we have not been able to open replacement markets in sufficient numbers
to reduce operating losses. The protection provided under Chapter 11
will provide us an opportunity to focus on restructuring the business
and pursuing new markets. We are actively developing products for the
European and South American markets and will continue to seek additional
outlets for our domestic products."

Leisure Time Casinos & Resorts is a diversified gaming company that
develops, manufactures and sells multi-game, touchscreen video gaming
machines and software upgrades. The company also generates recurring
revenue via its recent entrance into the video pulltab market.


LERNOUT & HAUSPIE: Selling C-REC Technology To Visteon For $13MM
----------------------------------------------------------------
Lernout & Hauspie Speech Products N.V. (EASDAQ:LHSP; OTC: LHSPQ), a
world leader in speech and language technology, products and services,
and its US-based subsidiary L&H Holdings USA, Inc. (formerly Dragon
Systems, Inc.), is seeking approval from the US Bankruptcy Court for the
District of Delaware to conclude the sale of L&H's C-REC(TM) and SDX
technologies to US-based Visteon Corporation. The former technology is a
speech recognition system developed by Dragon Systems, Inc. (a company
purchased last year by L&H) and customized for Visteon by Dragon under a
1997 services agreement. The sale calls for the exchange of $13.1
million in cash and other considerations.

A significant aspect of the agreement is the resolution of L&H's
outstanding legal disputes with Visteon. L&H, along with L&H Automotive,
Inc. and Dragon Systems UK Research & Development Ltd., two of the
Company's subsidiaries, will be released from any and all obligations to
Visteon in connection with the aforementioned services agreement.
Pursuant to the settlement agreement, L&H will also be released from all
claims asserted by Visteon in a lawsuit commenced in October 2000 in the
Suffolk County Superior Court Department of the Commonwealth of
Massachusetts concerning a disputed joint venture between the parties.

                      About Lernout & Hauspie

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


LOEWEN: Court Grants William Elridge Relief From Automatic Stay
---------------------------------------------------------------
The Court has granted William Eldridge's motion for modifying the
automatic stay so as to allow Mr. Eldridge to exercise his full rights
as the owner of the Property at the corner of Novi Road and Twelve Mile
Road that has been used as the entrance to Oakland Hills Cemetery in
Novi, Michigan.

Mr. Eldridge is the sole shareholder of Service Corporation of
Southeastern Michigan, the successor in interest to Michigan Cemetery
Management, Inc. (MCM). Pursuant to an Asset Purchase Agreement, MCM
sold on or about October 21, 1996, certain of the assets, rights and
property in connection with its operation of the three cemeteries that
it owned in Michigan to Loewen or MCM Acquisitions, Inc. (MCM
Acquisitions), a wholly-owned subsidiary or nominee corporation of The
Loewen Group, Inc. The cemeteries sold included the Oakland Hills
Cemetery in Novi, Michigan.

MCM did not sell to MCM Acquisitions approximately 1.15 acres at the
corner of Novi Road and Twelve Mile Road (the subject Property).
However, pursuant to an Easement Agreement, MCM Acquisitions was allowed
to use the Property as an entrance to the Cemetery until the earlier of:

     (a) October 21, 1998, or

     (b) the completion of an alternative main entrance to the
         Cemetery by MCM Acquisitions.

On October 26, 1996, MCM Acquisitions sold its assets acquired from MCM,
including the Easement Agreement, to Siena Group, L.L.C. It is
Eldridge's understanding that Siena presently is still the owner of the
assets, rights and property that MCM sold to MCM Acquisitions. Mr.
Eldridge also told the Court that, to date, Siena has not constructed an
alternative main entrance to the Cemetery, and it and others have been
trespassing on the Property for over two years without compensating
Eldridge.

During the interim period, MCM quit claimed the Property to Eldridge.

In October, 2000, the Property was for sale and an offer to purchase was
received. Eldridge's counsel informed Siena about that in a letter dated
October 11, 2000. In the letter, Eldridge's counsel also advised Ciena
that the Easement Agreement had expired on October 21, 1998 and he would
restrict access to the Property on October 18, 2000.

The Debtors, not Siena, responded to this letter. Debtors asserted that
any action to block access to the Property would violate section 362 of
the Bankruptcy Code because the Debtors, "through a variety of
agreements with limited liability companies [such as Siena]," have an
"economic interest" in the Cemetery which would be harmed by Eldridge's
contemplated actions.

In his motion for modification of the automatic stay, Mr. Eldridge
asserted that the automatic stay provisions of the Bankruptcy Code are
not implicated by Bidridge's contemplated actions because: (1) Eldridge
and Siena are not debtors in any bankruptcy proceedings; (2) no debtor
has a legal or possessory interest in the Property; (3) an economic
benefit derived from a
continuous trespass on the Property does not give rise to an interest in
the Property; and (4) an asserted claim of equitable ownership under
Michigan law is not an interest protected by the automatic stay.

By filing the motion and obtaining the stamp of approval from the Court,
Mr. Eldridge has saved risking a violation of the automatic stay.
(Loewen Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


LTV CORPORATION: Moves To Comply With & Settle Union Grievances
---------------------------------------------------------------
As of the Petition Date, The LTV Corporation Debtors were parties to
numerous collective bargaining agreements with various unions, including
the United Steelworkers of America. Nearly two-thirds of the Debtors'
workforce is represented by the unions. As of the Petition Date, a
significant percentage of the Debtors' employees and former employees
were subject to, and entitled to various benefits under, the collective
bargaining agreements. The Debtors told Judge Bodoh that their
relationships with the unions and union employees will have a
significant impact on their ongoing operations and ability to
reorganize. The Debtors therefore asked Judge Bodoh for entry of an
Order authorizing them, in their sole discretion for a period of 60 days
after entry of an Order, to:

     (a) comply with existing grievance procedures under collective
bargaining agreements;

     (b) satisfy arbitration awards arising from prepetition and
postpetition grievances;

     (c) settle prepetition and postpetition grievances;

     (d) satisfy certain additional benefits under collective
bargaining agreements; and

     (e) implement existing agreements and enter into and implement
ongoing agreements with unions in connection with collective bargaining
agreements.

However, the Debtors expressly said they are not seeking to assume,
modify or reject any collective bargaining agreements or related
agreements, or modify retiree benefits, and reserve all of their rights
with respect to the final treatment of their collective bargaining
agreements, and to seek further extensions of the 60-day period.

Generally, the CBAs provide for certain procedures designed to foster
the expeditious, consistent and fair resolution of disputes that arise
between the union employees or the unions on the one hand, and the
Debtors on the other. Grievances typically involve claims for compliance
with, or requests to determine the meaning and proper application of,
the CBAs and address matters of pay and benefits under the CBAs. In the
absence of immediately resolution, the assertion of a grievance
typically involves a multi-step adjustment process subject to detailed
rules and deadlines under the applicable grievance procedures specified
in the governing CBA. AS the grievance progresses through the steps of
the grievance procedures, additional persons or parties at higher levels
in the Debtors and the unions generally may become
involved. Ultimately, grievances may be resolved by final and binding
arbitration. A grievance may be resolved consensually by settlement
between the parties. Entering into grievance settlements is encouraged
under the CBAs, which expressly provide that the parties must address
possible settlement before proceeding to arbitration. Thus in compliance
with the CBAs the Debtors, the unions and union employees regularly have
entered into grievance settlements to resolve grievances. Moreover, the
Debtors believe that settlement of union grievances in this manner is
well established among other unions and employers in the Debtors'
businesses.

If the parties do not enter into a grievance settlement, resolution of a
grievance may result in an arbitration award to the union employees or
the union. An arbitration award may include, among other things, back
pay or changes in future pay, incentives or benefits, reinstatement of
employment or revision of job assignments or work shifts.

Grievances of varying degrees of scope, urgency and importance arise
regularly in the ordinary course of the Debtors' businesses. The
Debtors, the unions and union employees are accustomed to the regular
processes by which grievances are commenced, administered and resolved
under the CBAs. Thus, maintaining and following the established
grievance procedures without interruption, including the ability to
enter into grievance settlements and satisfy arbitration awards, during
the interim period will help sustain the Debtors' relationships with the
unions and union employees while the Debtors begin the process of
addressing union issues on a global basis. Moreover, maintaining the
status quo with respect to the grievance procedures pending any final
determination to assume, modify or reject the CBAs arguably is
consistent with the Debtors' obligations under the Bankruptcy Code and
in any event is prudent. Furthermore, a grievance procedure is an
essential part of a collective bargaining agreement and is viewed under
federal labor law as a quid pro quo for a no-strike clause.

As of the Petition Date, approximately 4,200 prepetition grievances were
pending. Collectively, the prepetition grievances represent claims for
an estimated $12 million in monetary relief. In addition, approximately
$500,000 in arbitration awards were issued prior to the Petition Date
but remain unpaid. Further, based on the Debtors' past experience, the
Debtors believe that grievances will be initiated in the normal course
of business based on prepetition and postpetition issues. It is
anticipated that only a portion of the pending grievances will be
resolved during the Interim Period.

Notwithstanding this, the Debtors proposed that they will not pay
prepetition arbitration awards or prepetition grievance settlements in
an aggregate amount exceeding $4 million in monetary awards for
grievances resolved during the Interim period without further approval
of the Court. This places reasonable parameters on the proposed payments
for prepetition grievances.

The CBAs also provide for certain prepetition benefits and payments
which are not directly within the scope of the previously entered wage
and benefit Order, being supplemental unemployment benefits, and
severance allowances. The former are weekly payments to certain laid-off
union employees and are paid from the Supplemental Unemployment Benefits
Plan which is funded by contributions made by the Debtors according to
an established contractual formula. The amount of supplemental
unemployment benefits paid to each applicable union employee is based on
the employee's years of service, certain credits accrued at layoff, and
the financial wherewithal of the SUB plan. As of the Petition Date,
approximately $4.1 million in Debtor contributions to the SUB plan had
accrued. Since the Petition Date, approximately $325,000 in prepetition
supplemental unemployment benefits have been paid inadvertently and in
error, although the Debtors say there are appropriate business
justifications to make these prior SUB payments, and the Debtors also
ask that these be retroactively authorized. Severance allowances are
payable to certain union employees whose employment has been terminated
in connection with the shut-down of a work location. Severance
allowances are calculated based on the applicable union employee's years
of service and vacation allowances. Severance allowances may be reduced
by other benefits that the applicable union employee receives under a
CBA, such as the supplemental unemployment benefits. The Debtors
estimate that, after applicable setoffs for payments of supplemental
unemployment benefits, approximately $16,000 in severance allowances
have accrued but remain unpaid in connection with the shut-down of
Debtor LTV Steel Mining Company.

These additional CBA benefits constitute ordinary, recurring payments in
the nature of compensation and benefits to union employees and other
payments arising under the CBAs. Satisfying these payments during the
Interim Period is appropriate and beneficial, so the Debtors asked that,
in their sole discretion during the Interim Period, they be authorized
to satisfy these benefits.

The Debtors also asked that Judge Bodoh authorize them to implement
prepetition agreements with the unions related to the CBAs and enter
into and implement ongoing agreements during the Interim Period. In the
ordinary course of the Debtors' operations and in connection with day-
to-day labor relations, numerous issues arise that either: (a) are not
specifically addressed in the CBAs to the satisfaction of the Debtors
and the unions, typically due to either changed or unanticipated
circumstances, or (b) are subject to further agreements of the parties
by the express terms of the CBAs. These issues typically involve
relatively narrow subjects for small numbers of union employees. For
example, these issues may include the establishment of transition or
termination benefits for certain individual union
employees or small groups of union employees, the resolution of issues
related to the physical characteristics of certain workplace locations,
such as available equipment or amenities, or modifications to worm terms
at a limited number of locations, for a limited period of time or
impacting a small or discrete group of union employees.

To address these issues, the usual and historical practice of the
Debtors and the unions has been to enter into side agreements governing
these matters, as supplements to the CBAs. These side agreements are
essential because the CBAs do not specifically address each day-to-day
issue arising in the Debtors' businesses. Indeed, prior to the Petition
Date, the Debtors and the unions entered into several of such side
agreements that remain partially or fully unperformed by the Debtors.
The Debtors therefore sought authority, in their sole discretion during
the Interim Period, to implement the terms of the prepetition side
agreements. Uninterrupted performance of these side agreements during
the Interim Period is appropriate to resolve the business issues covered
by these agreements and to promote the smooth
operation of the Debtors' businesses while the Debtors begin the
process of addressing union issues on a global basis.

The Debtors also asked that Judge Bodoh authorize them to implement a
mining shut-down agreement during the Interim Period. Steel Mining owns
mining facilities in Hoyt Lakes, Minnesota, which have ceased production
and are winding down other business operations. In connection with the
shut-down of these mining  operations, the Debtors entered into a
memorandum of agreement regarding the shutdown of LTV Steel Mining
Company in December 2000 with USWA. This agreement was negotiated to
resolve USWA's dispute and grievances over the Debtors' rights under the
CBAs to effectuate the shut-down, which is estimated to save the Debtors
approximately $60 million on an annual basis. The Debtors agreed to take
certain actions and provide certain benefits to affected union
employees, which include understandings to implement provisions already
present in the CBAs and certain new benefits, and USWA agreed to settle
its grievances protesting the shut-down.

The terms of the Shut-Down Agreement include:

     (a) The Debtors will credit affected union employees with certain
additional years of service in connection with the
calculation of pension benefits;

     (b) The Debtors will make a benefits representative available, if a
reasonable need exists, until March 1, 2003, during certain times;

     (c) The Debtors will provide "payment in lieu of time off" for
affected union employees who choose such payments in lieu of
vacation time attributable to years 2001 and 2002;

     (d) Certain affected union employees will be eligible for certain
expense reimbursements and special transfer relocation
allowances;

     (e) Certain affected union employees will be entitled to keep work
tools received from the Debtors;

     (f) The Debtors and USWA will establish a displaced employees
issues coordinator to address the concerns of affected union employees;
and

     (g) The Debtors will reimburse certain actual union expense up to
$10,000 incurred in connection with negotiating the Shut-Down Agreement.

The Debtors thus sought authorization, in their sole discretion
during the Interim Period, to implement the terms of the Shut-Down
Agreement. The Debtors estimate that the aggregate costs of
implementing this agreement will be approximately $1.4 million, in
addition to other payments to be made pursuant to the CBAs in
connection with the shut-down. The Debtors estimate that approximately
$40,000 of these costs will be incurred by the conclusion of the Interim
Period. (LTV Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., 609/392-00900)


MARINER POST-ACUTE: Selling Four Ciena Facilities For $9 Million
----------------------------------------------------------------
Certain Mariner Post-Acute Network, Inc. Debtors wish to divest
themselves of four Ciena Facilities, which are the poorest performing
Facilities within the portfolio of certain Debtors. The matter involves
different Debtors, some of which lease certain Facilities to certain
other Debtors. It also involves Omega Healthcare Investors, Inc. which
holds a mortgage on the Ciena Facilities related to a loan made to
certain of the Debtors, evidenced by a mortgage note guaranteed by
certain other Debtors.

The Subject Debtors are:

     -- Cambridge Bedford, Inc.; Cambridge East, Inc.; Cambridge North,
Inc.; Cambridge South, Inc.; ClintonAire Nursing Home, Inc.; Crestmont
Health Center, Inc.; Heritage Nursing Home, Inc.; Nightingale East
Nursing Center, Inc.; Middlebelt-Hope Nursing Home, Inc.; Frenchtown
Nursing Home, Inc.; St. Anthony Nursing Home, Inc.; Madonna Nursing
Home, Inc.; and Middlebelt Nursing Home, Inc. (13 Michigan Subsidiaries)

     -- Professional HealthCare Management, Inc., Living Centers-PHCM,
Inc. (LC-PHCM) (these, together with the Michigan Subsidiaries, are
referred to as the PHCM Debtors)

     -- Mariner Post-Acute Network, Inc. (MPAN), GranCare, Inc. (these,
together with the PHCM Debtors, are referred to as the Subject Debtors)

               The Subject Facilities

PHCM and the Michigan Subsidiaries operate a total of sixteen skilled
nursing care facilities with approximately 1,668 beds. PHCM leases 13 of
the Facilities, which are located in Michigan, each to a Michigan
Subsidiary under a separate facility lease. LC-PHCM owns three of the
Facilities, which are located in North Carolina and leases those
facilities to PHCM, which operates those facilities.

The performance of the Facilities varies significantly. Some of the
Facilities generate substantial operating losses, while others are
profitable.

The four Ciena Facilities that the Subject Debtors would like to divest
themselves of collectively generated a negative EBITDA in the amount of
approximately $3.87 million during the fiscal year ended September 30,
2000. These are the poorest performing Facilities within the PHCM
Debtors' portfolio.

                   The Omega Debt

Omega and PHCM are parties to the Michigan Loan Agreement dated as of
June 7, 1992 (as amended, the Omega Loan Agreement), pursuant to which
Omega made a loan to PHCM in the original principal amount of $58.8
million in 1992, evidenced by a mortgage note, dated August 14, 1992, in
the same amount issued by PHCM and payable to the order of Omega (the
Omega Note). Interest at the nondefault rate under the Omega Note is
currently payable at the rate of 15.48% per annum plus certain
additional amounts (with an additional accrual of 1% per annum).

As of the Petition Date, the unpaid principal balance and accrued but
unpaid interest on the Omega Note at the nondefault rate totaled
approximately $62.2 million, which includes the $58.8 million original
principal, less approximately $1.56 million of cash collateral applied
against the Omega Loan in December 1999, plus approximately $5 million
of deferred interest that has accrued under the terms of the Omega Note.
PHCM also owed Omega
approximately $456,000 on account of the unpaid collateral of Omega in
1997, resulting in a total debt of approximately $62.7 million. In
addition, Omega claims approximately $1.25 million in late charges and
additional interest of $105,000 on account of the contractual default
interest rate.

Pursuant to various agreements, the Omega Note is guaranteed by LCPHCM
and the Michigan Subsidiaries and is secured by the Facilities and by
substantially all of the tangible and intangible personal property of
the PHCM Debtors.

In addition, GranCare, Omega, PHCM and the Michigan Subsidiaries entered
into a Second Amendment to Michigan Loan Agreement, dated as of February
12, 1997, under which GranCare became obligated to provide additional
capital to PHCM to the extent necessary to enable PHCM to remain in
compliance with the minimum tangible net worth test contained in the
Omega Loan. The agreements include, among others:

     (a) the Mortgage, Security Agreement, Assignment of Rents and
Leases, and Fixture Filing dated as of August 14, 1992 (as amended, the
Omega Mortgage), executed by PHCM in favor of Omega and encumbering,
among other things, the real and certain personal property constituting
the Michigan Facilities;

     (b) the Security Agreement dated as of August 14, 1992 (as amended,
the PHCM Security Agreement), executed by PHCM in favor of Omega;

     (c) a Letter of Credit Pledge Agreement dated as of August 14, 1992
(as amended, the Deposit Agreement), between Omega and PHCM;

     (d) a Cash Collateral Escrow Agreement dated as of August 14, 1992
(the Escrow Agreement) by and among Omega, PHCM and LaSalle National
Trust, N.A., as escrow agent;

     (e) a Assignment of Leases dated as of August 14, 1992 (as amended,
the "Assignment of Leases") given by PHCM to Omega;

     (f) a Supplementary Letter of Credit and Cash Collateral Escrow
Agreement dated as of March, 1996 (as amended, the Supplementary
Collateral Agreement) by and among Omega, PHCM and GranCare;

     (g) the Omega-PHCM Subsidiary Guaranty dated as of February 12,
1997 (as amended, the Subsidiary Guaranty) executed by each of the
Michigan Subsidiaries in favor of Omega and joined in by LC-PHCM;

     (h) the Omega-PHCM Subsidiary Security Agreement dated as of
February 12, 1997 (as amended, the Subsidiary Security Agreement),
executed by each of the Michigan Subsidiaries in favor of Omega;

     (i) a Fee Simple Deed of Trust, Security Agreement, and Fixture
Filing dated as of July 31, 1998 (as amended, the LC-PHCM Mortgage) from
LC-PHCM in favor of David J. Witheft, Esq., as Trustee for the benefit
of Omega;

     (j) a Security Agreement dated as of July 31, 1998 (as amended, the
LC- PHCM Security Agreement) from LC-PHCM in favor of Omega; and

     (k) a Leasehold Interest Deed of Trust, Security Agreement, and
Fixture Filing dated as of July 31, 1998 (as amended, the NC Leasehold
Mortgage) from PHCM in favor of David J. Witheft, Esq., as Trustee for
the benefit of Omega, conveying security title to PHCM's leasehold
interest in the North Carolina Facilities.

Omega Note, the Omega Loan Agreement and the related mortgages, security
agreements, guaranties and other related agreements are referred to
collectively as the Omega Loan Documents.

No payments have been made on or with respect to the Omega Loan since
December 14, 1999, and various disputes have arisen between Omega and
the Subject Debtors. These disputes relate, among other things, to:

     (i) whether Omega is entitled to obtain relief from the automatic
stay arising under 11 U.S.C. Section 362 and to foreclose on the
Facilities; and

    (ii) whether and on what terms the PHCM Debtors may restructure the
Omega Loan and related mortgages and security interests in a manner that
would enable the PHCM Debtors to retain those Facilities which they
would like to retain, divest the remainder of the Facilities, modify the
debt to Omega (including a substantial reduction in the interest rate
and modification of the current principal payment schedule) and service
the restructured debt to Omega.

The Subject Debtors and Omega are in the process of attempting to
structure and document a comprehensive settlement but that process has
not yet been completed. Given the substantial losses being suffered by
the Ciena Facilities, the parties agree it would be in their mutual best
interests for PHCM to sell those facilities before the completion of
their overall settlement and restructuring efforts.

               The Ciena Buyer Purchase Agreement

By this Motion, the Subject Debtors sought authorization to sell the
Ciena Facilities to Ciena Buyer for a purchase price of $9 million, free
and clear of all liens, claims, interests and encumbrances, pursuant to
the Ciena Buyer Purchase Agreement. The sale will include the real
property comprising the Ciena Facilities and certain related personal
property, but will exclude certain assets such as the accounts
receivable relating to the Ciena Facilities.

Payment will be in the form of a promissory note (the Ciena Buyer Note)
in the principal amount of $9 million, subject to adjustments, in
accordance with the terms of a loan agreement between PHCM and Ciena
Buyer and will be secured by a mortgage on the Ciena Facilities and a
security agreement on related personal property.

Payment of the Ciena Buyer Note will be guaranteed by Mohammed Qazi (the
principal of Ciena) for the greater of (i) $2 million or (ii) 25% of the
outstanding principal and interest under the Ciena Buyer Note.

Additionally, payment of the Ciena Buyer Note will be guaranteed by
Ciena.

PHCM and Ciena Buyer will make various representations and warranties to
one another.

The Ciena Buyer Note will be further secured by a $540,000 liquidity
deposit in the form of a letter of credit for a term of one year
(renewable automatically) issued by an "A"-rated financial institution.

PHCM and Ciena Buyer will indemnify one another against certain matters
as described in the Ciena Buyer Purchase Agreement. PHCM's indemnity
will include, inter alia, potential successor liability of Ciena Buyer
with respect to pre-Effective Time Medicare liabilities.

The Subject Debtors, in their business judgment, have determined that a
prompt closing of the transactions proposed in the Ciena Buyer Purchase
Agreement is the best way to maximize value for their estates and
creditors.

                   The Omega Agreement

Because Omega holds a mortgage on the Ciena Facilities, and the
consideration for the sale will take the form of a note, the Debtors
believe it is necessary and appropriate that the Subject Debtors and
Omega agree on various matters pertaining to the sale of the Ciena
Facilities.

The Omega Agreement provides for:

     (1) Assignment of 50% of Ciena Buyer Note to Omega

         Concurrently with the closing of the sale of the Ciena
Facilities to Ciena Buyer, PHCM will assign an undivided 50% interest in
the Ciena Buyer Note and related financing documents (collectively, the
Ciena Financing Documents) to Omega, without recourse of any kind, in
consideration for which PHCM will receive a $4,500,000 credit first
against the outstanding nondefault pre-Petition Date interest on, and
the balance against the outstanding principal amount of, the Omega Loan.

     (2) Pledge of Ciena Financing Documents

         PHCM will pledge its 50% undivided interest in the Ciena Buyer
Note and the other Ciena Financing Documents to Omega, as security for
the Omega Loan and the Maintenance Obligation Note. In effect, the lien
which Omega now has in the four Ciena Facilities will be transferred to
the 50% of the Ciena Buyer Note that is not used to pay down the Omega
Loan, subject to the payment of the Maintenance Obligation Note to
Omega, as described below.

     (3) Deferred Maintenance Contribution for Ciena Facilities

         PHCM has agreed to reimburse Ciena for the cost of certain
deferred maintenance repairs required at the Ciena Facilities. Because
PHCM does not have the funds to cover the cost of the deferred
maintenance repairs, Omega has agreed to assume PHCM's obligations to
Ciena with respect to the deferred maintenance repairs; and PHCM has
agreed to pay Omega for such assumption and for the other obligations of
Omega under the Omega Agreement the sum of $1,000,000, to be paid:

         (a) (i) if the applicable governmental authority of the
                 State of Michigan has not issued the Final Audit
                 Report for the Michigan Facilities with respect
                 to Medicaid cost reports for the years 1998 and
                 1999, PHCM will pay Omega $300,000 in
                 immediately available funds at the Ciena
                 Closing, or

            (ii) if the Final Audit Report has been issued, PHCM
                 will pay Omega in immediately available funds at
                 the Ciena Closing an amount equal to the greater
                 of (x) $300,000, and (y) the amount (not to
                 exceed $600,000) by which the Net Lowest Daily
                 Cash Balance exceeds $850,000; and

         (b) at the Ciena Closing, PHCM will deliver to Omega the
Maintenance Obligation Note.

     (4) Maintenance Obligation Note to Omega
  
         The Maintenance Obligation Note to be delivered to Omegashall

         (a) be in the original principal amount of $1,000,000, less the
amount paid to Omega as described in (3) above,

         (b) bear interest at the rate of eleven and one-quarter percent
(11.25%) per annum;

         (c) provide that PHCM's obligation to pay Contingent Principal
and interest shall be contingent on the consummation,
on or before May 31, 2001, of a restructuring of the rest of the
Subject Debtors' obligations to Omega either as part of a restructuring
or a plan of reorganization approved by the Court;

         (d) be payable from PHCM's share of payments under the Ciena
Buyer Note (Purchase Money Note Payments) if, as and when they are
received;

         (e) be subject to mandatory prepayment in an amount equal to
the amount by which the Net Lowest Daily Cash Balance for the second
preceding calendar month exceeds $850,000 on each Mandatory Prepayment
Date (defined as the 15th day of the second calendar month after the
calendar month in which PHCM receives the Final Audit Report, and the
15th day of each successive calendar month thereafter until the
noncontingent portion of the Maintenance Obligation Note (and the
contingent portion of the Maintenance Obligation Note if the contingency
has been satisfied) shall have been paid in full);

         (f) in any event be due and payable in full on the earlier of
(x) the tenth (10th) anniversary of the Ciena Closing, or (y) payment in
full of the Omega Loan.

[Note: The term Contingent Principal shall mean a portion of the
principal amount of the Maintenance Obligation Note equal to
$400,000. The term Net Lowest Daily Cash Balance means:

             (i) at the time of the closing of the Ciena  
                 Transaction, the amount determined by deducting
                 Medicaid Overpayment Claims from the lowest
                 daily consolidated cash balances of PHCM and the
                 Michigan Subsidiaries for the 31-day period
                 immediately preceding the date of the Ciena
                 Closing, and

            (ii) at any other date, the amount determined by
                 deducting the Medicaid Overpayment Claims from
                 the lowest daily consolidated cash balances of
                 PHCM and the Michigan Subsidiaries for the
                 second preceding calendar month ending prior to
                 that date.

The term Medicaid Overpayment Claims means all claims for overpayment
under the State of Michigan Medicaid program asserted by any
governmental authority of the State of Michigan against PHCM or the PHCM
Debtors in the Final Audit Report, whether or not such overpayment
claims are allocable to the Ciena Facilities, less any amount thereof
which has been waived or forgiven by the applicable governmental
authority or repaid by PHCM or the Michigan Subsidiaries.]

     (5) Servicing of Ciena Loan

         For the administrative convenience of PHCM, Omega will
administer and service the loan evidenced by the Ciena Buyer Note (the
Ciena Loan). In that connection, among other things, Omega will maintain
custody of the Ciena Financing Documents, and receive and apply the
Purchase Money Note Payments. As between PHCM and Omega, the co-holders
of the Ciena Buyer Note, each Purchase Money Note Paymcnt will be
applied as follows:

         (a) 50% of each Purchase Money Note Payment will be retained by
Omega, and

         (b) the balance of each Purchase Money Note Payment will be
applied first against the outstanding indebtedness under the Maintenance
Obligation Note, until all principal and interest thereunder have been
paid in full, and thereafter against the outstanding principal balance
of the Omega Loan.

     (6) The Omega Improvement Loan

         At the Ciena Closing, and to induce the Ciena Buyer to close
the Ciena Transaction, Omega will enter into the Improvement Agreement
with the Ciena Buyer, pursuant to which Omega will agree to lend the
Ciena Buyer up to Five Hundred Thousand Dollars ($500,000) (the Omega
Improvement Loan) to be used to make certain repairs and improvements to
the Ciena Facilities, all on the terms and conditions set forth in the
Improvement Agreement.

The Omega Improvement Loan will be secured by the same security
documents as the Ciena Buyer Note. Repayment of the Ciena Buyer Note is
subordinate and junior to repayment of the Omega Improvement Loan. So
long as no Event of Default under the Improvement Agreement
("Improvement Loan Even of Default") exists, payments received by either
PHCM or Omega from the Ciena Buyer will be applied to the Ciena Buyer
Note and the Omega Improvement Loan as designated by the Ciena Buyer.

However, from and after the occurrence of any Improvement Loan Event of
Default, and so long as the Improvement Loan Event of Default continues
in effect, as between Omega and the PHCM Debtors, any payment received
from the Ciena Buyer by either Omega or PHCM on either the Ciena Buyer
Note or the Omega Improvement Loan shall be applied first to the Omega
Improvement Loan until the Omega Improvement Loan is paid in full, and
then to the non-contingent portion of the indebtedness evidenced by the
Maintenance Obligation Note (and to the contingent portion as well, once
the contingency is satisfied), and finally to the Omega Loan.

              Medicare Provider Agreements

The applicable Michigan Subsidiaries will assume and assign to Ciena
Buyer (or its designee(s)) the respective Medicare Provider Agreements
with the Health Care Financing Administration (HCFA) and provider
numbers relating to the Ciena Facilities after Ciena Buyer obtains HCFA
approval of a change of ownership of the agreements, subject to the
terms and conditions as described below.

Any claim of Medicare, the applicable fiscal intermediary, HHS, or any
other governmental entity against the applicable Subject Debtor arising
prior to the January 18, 2000 petition date by reason of such assumption
and assignment shall be treated as an expense of administration of such
Debtor, and any such claim by any other party may not be offset against
any claim of any Debtor arising after the filing of these chapter 11
cases (except that
the United States reserves all rights set forth in the stipulation
between the United States and Debtors approved by the Court on January
18, 2000).

Ciena Buyer will not be released from any otherwise applicable successor
liability under such assumed and assigned Provider Agreement, but Ciena
Buyer shall have an administrative claim for indemnification against
PHCM with respect to any such successor liability.

Any claim for such successor liability or request for payment of
administrative claim shall not be made until the earlier of:

     (a) the confirmation of a plan of reorganization for the applicable
Subject Debtor;

     (b) the conversion of such Subject Debtor's chapter 11 case to a
case under chapter 7 of the Bankruptcy Code; or

     (c) an agreement by the Debtors and HCFA to resolve the claims
which HCFA has asserted against the Debtors.

However, Ciena Buyer shall succeed to the quality of care history of the
applicable Michigan Subsidiary at each Ciena Facility.

Should HCFA proceed against Ciena Buyer to recoup any amounts for
Medicare overpayments for services rendered prior to the Effective Time,
PHCM will indemnify Ciena Buyer from such claim, loss, cost or damage
and the related indemnification obligation will constitute an
administrative claim in PHCM's Bankruptcy Case.

From the Subject Debtors' standpoint, the Ciena Buyer Purchase Agreement
and the Omega Agreement, when taken together, will enable them to divest
themselves of the Ciena Facilities, improve their operating income and
cash flow, facilitate an overall settlement and debt restructuring with
Omega, which is by far the principal creditor of the PHCM Debtors.

The Subject Debtors believe that the Ciena Buyer Purchase Agreement and
the Omega Agreement are a necessary step toward a reorganization plan
and, accordingly, should be exempt from stamp tax or similai taxes under
1146(c) of the Bankruptcy Code.

The Subject Debtors believe that the only entities holding a lien on any
of the Ciena Facilities or personal property used in connection with
these, other than Omega and the holders of encumbrances which are
permitted under the Ciena Buyer Purchase Agreement, are the DIP Lenders.
The Subject Debtors anticipate that they will have received the consent
of the DIP Lenders on or
before the hearing date, thereby satisfying Code Section 363(0(2).

The Ciena Buyer has indicated that it does not wish to assume liability
under an executory contract of the PHCM Debtors relating to the Ciena
Facilities. Accordingly, the PHCM Debtors seek to reject the contracts
and leases pertaining solely to the Ciena Facilities as of the Closing
Date under the Ciena Buyer Purchase Agreement or at such time as may be
agreed to by the Subject Debtors and Ciena Buyer. The PHCM Debtors have
not concluded their analysis of the contracts and leases. Accordingly,
the PHCM Debtors expressly reserve their rights to make changes to the
tentative list of contracts and leases to be rejected.

In this motion, the Subject Debtors sought the Court's order, pursuant
to sections 105, 363, 365 and 1146(c) of the Bankruptcy Code and Rules
6004, 6006 and 9019 of the Federal Rules of Bankruptcy Procedure:

     (1) authorizing the sale of the Ciena Facilities and related
personal property to Ciena Buyer pursuant to the Ciena Buyer Purchase
Agreement, free and clear of liens, claims and interests;

     (2) approving the Omega Agreement and authorizing the Subject
Debtors to proceed with the matters contained in the Agreement;

     (3) determining that such sale is exempt from any stamp, transfer,
recording, or similar tax;

     (4) authorizing the assumption and assignment or rejection of
executory contracts to Ciena Buyer. (Mariner Bankruptcy News, Issue No.
13; Bankruptcy Creditors' Service, Inc., 609/392-0900)


MEDIQ INC.: Files First Amended Plan And Disclosure Statement
-------------------------------------------------------------
According to documents obtained by BankruptcyData.com, Mediq, Inc. filed
a First Amended Joint Plan of Reorganization and related Disclosure
Statement with the U.S. Bankruptcy Court. The Court subsequently
approved the Disclosure Statement. The Company has been operating under
Chapter 11 protection since January 24th. (New Generation Research,
March 20, 2001)


NATIONAL HEALTH: IPA Investors & Gary Davis Add To Equity Stake
---------------------------------------------------------------
IPA Investors, LP holds sole voting and dispositive powers over
15,000,000 shares of the common stock of National Health & Safety
Corporation, which it beneficially owns. This amount represents 6.05% of
the outstanding common stock of the Company.

Gary J. Davis owns 8,399,982 shares of the common stock of the Company
with sole voting and dispositive powers, representing 3.39% of the
outstanding common stock of the Company.

In January 2001, National Health & Safety Corp. issued shares of common
and preferred stock to the above, and to others, under its confirmed
Plan of Reorganization dated August 21, 2000, as confirmed by the U.S.
Bankruptcy Court, Eastern District, Pennsylvania on November 27, 2000.
Under the Plan, National Health & Safety, which had approximately 58
million shares of common stock outstanding prior to confirmation of the
Plan, issued 130,000,000 shares of new common stock to acquire all of
the outstanding stock of MedSmart Healthcare Network, Inc., and
45,000,000 shares of new common stock to investors for $600,000 cash.
National Health & Safety also issued preferred stock to claimants and
interest holders in exchange for their claims and interests. As a result
of these transactions, IPA Investors, LP and Gary J. Davis became the
owners of more than 5% of the voting equity securities of National
Health & Safety Corp.

IPA Investors, LP, a Texas limited partnership, was formed to act as an
investment partnership. Its first investment was the purchase of
National Health & Safety Corporation common stock under the Plan.

Gary J. Davis is a private investor in Austin, Texas. Mr. Davis is an
officer of the general partner of the Partnership, Investment Property
Advisors, Inc., and an officer of one of the initial limited partners,
FAI Capital, LP. Mr. Davis also acquired shares of National Health &
Safety stock individually as a result of the exchange offer by National
Health & Safety for shares of MedSmart.

IPA Investors, LP, purchased 15,000,000 shares of National Health &
Safety's common stock for $200,000 ($0.0133 per share) cash. The source
of the consideration was a loan to the Partnership by two of its limited
partners, Sam Alianell, individually and as trustee for the Alianell
Group, and John P. Fitzpaterick, an individual.

Gary J. Davis under the Plan, acquired 8,399,982 shares of National
Health & Safety in exchange for 370,149 shares of MedSmart.

The implementation of the National Health & Safety Plan resulted in a
change of control in National Health & Safety, because the Plan resulted
in the issuance of shares of new shares of common stock of National
Health & Safety to new investors who invested cash (as did IPA
Investors, LP) or exchanged their common stock in another company,
MedSmart Healthcare Network, Inc (as did Mr. Davis). The new shares
issued pursuant to the reorganization constituted a majority of the
outstanding National Health & Safety common stock after completion of
the transaction.

Mr. Davis is an officer of the general partner of the Partnership,
Investment Property Advisors, Inc. Mr. Davis disclaims beneficial
ownership of the National Health & Safety shares owned by the
Partnership to the extent of partnership interests in the Partnership
held by persons other than Mr. Davis, Investment Property Advisors, Inc.

Mr. Davis believes that he will be elected to the board of directors of
National Health & Safety by National Health & Safety's current
directors, to fill a vacancy created by the expansion of the number of
directors pursuant to the Plan.

However, Mr. Davis and IPA Investors, LP, indicate they have no formal
or informal agreements or understandings with any other directors or
shareholders of National Health & Safety regarding his election or the
future plans or management of National Health & Safety.


OWENS CORNING: Assumes Prosecution Agreement & Hires Forman Perry
-----------------------------------------------------------------
Owens Corning and its related Debtors asked that Judge Fitzgerald permit
them to assume a Joint Prosecution Agreement and Fee Agreement. The
parties to this Agreement are Owens Corning, Ezell Thomas, and
approximately 15 other personal injury plaintiffs currently involved in
the pending case of Ezell Thomas v. R.
J. Reynolds Tobacco Company in the Circuit Court of Jefferson County,
Mississippi, and Pritchard Law Firm, Grenfell Sledge & Stevens, Maples &
Lomax, Cox and Cox LLP, Baldwin & Baldwin Inc., Robert G. Taylor II,
P.C., Langston Sweet & Freese PA, and Williams & Bailey, and that the
latter Joint Plaintiff Counsel's employment by the Debtors be authorized
as joint special counsel for the Debtors. In addition, the Debtors
propose to employ Forman, Perry, Watkins, Krutz & Tardy PLLC as special
counsel for the Debtors. All of the individual personal injury
plaintiffs assert claims related to exposure to tobacco products. Owens
Corning asserted claims against tobacco companies arising in
part from Owens Corning's payments to asbestos claimants for medical
conditions which were allegedly the result of, in whole or in part,
exposure to tobacco products. Owens Corning asserted that the proper
measure of these damages is in the billions of dollars. Under the terms
of the Joint Prosecution Agreement, Owens Corning, Forman Perry, the
Joint Plaintiff Counsel, and the individual personal injury plaintiffs
agreed to jointly prosecute and cooperate in the Thomas litigation
against tobacco companies to recover damages.

         The Joint Prosecution Agreement and Fee Agreement

The Joint Prosecution Agreement provides in pertinent part that:

     (a) The individual personal injury plaintiffs and Owens Corning
will join in the Thomas litigation against tobacco companies in which
Owens Corning may assert claims for damages arising from, among other
things, asbestos-related settlements. All parties will cooperate in the
Thomas litigation and treat
communications among themselves as confidential.

     (b) The parties may jointly retain experts and consultants to
assist in the prosecution of the Thomas litigation and Owens Corning
will pay the reasonable fees and expenses of such experts and
consultants.

     (c) The parties will conduct settlement negotiations jointly, and
share communications regarding settlement offers. The parties also agree
to use their best efforts to reach a settlement of all claims, but
reserve each party's right to reach, in good faith, a separate
settlement.

     (d) In the event Owens Corning settles its claims with, or collects
a judgment against, the defendant tobacco companies, Owens Corning will
pay 15% of the settlement or judgment to Joint Plaintiff Counsel and
Forman Perry in recognition of their contribution to securing such
settlement or judgment. Forman Perry and each of the eight Joint
Plaintiff Counsel shall be
entitled to an equal share of the contingency fee, provided, however,
that Baldwin & Baldwin, Inc.'s chare shall be 1-1/2 times that of the
other eight participants. This means that Baldwin & Baldwin, Inc. will
receive approximately 16% of the
contingency fee, and the remaining eight law firms, including Forman
Perry, will receive approximately 10.5% of the contingency fee. Owens
Corning will be entitled to credit all legal fees (but not expenses)
paid to Forman Perry for services performed after the Petition Date in
connection with the Thomas litigation against Forman Perry's share of
the contingency fee, such that
Owens Corning will not be paying Forman Perry an hourly fee in addition
to the contingency fee. If Forman Perry's share of the contingency fee
is less than the legal fees for postpetition services in the Thomas
litigation, Forman Perry shall receive no portion of the contingency
fee. All payments under the fee
agreement with Forman Perry will be treated as administrative expenses.

     (e) In the event that the individual personal injury plaintiffs
obtain a settlement or judgment, and Owens Corning's claims are
dismissed and/or no settlement is obtained by Owens Corning, the
individual personal injury plaintiffs agree to reimburse Owens Corning
for its expenses in jointly prosecuting the Thomas litigation in an
amount up to $5 million from any fees in excess of $20 million received
by the individual personal injury plaintiffs in any settlement or
judgment.

        Services of Joint Plaintiff Counsel and Forman Perry

The Joint Prosecution Agreement, including the Fee Agreement, arose from
Owens Corning's desire to pursue litigation against tobacco companies in  
Mississippi. As an alternative to commencing a new health-related action
in Mississippi, Owens Corning decided to joint the existing Thomas
litigation, which at the time was being prosecuted by certain of the
Joint Plaintiff Counsel on behalf of the individual personal injury
plaintiffs. Owens Corning determined that combining the expertise and
experience of the Joint Plaintiff Counsel with its resources
and expertise significantly enhanced the company's prospects for a
successful recovery. The act of joining an existing action also allowed
Owens Corning to transition more quickly into the tobacco litigation.
The agreement to join forces against the tobacco companies was codified
in the Joint Prosecution Agreement. In October 1998 Owens Corning filed
its suit against the tobacco
companies and joined the Thomas litigation.

The professional services that the Joint Plaintiff Counsel will render
include all work regarding Owens Corning's claims against the tobacco
companies in the Thomas litigation. Richard L. Forman advises Judge
Fitzgerald that the professional services that Forman Perry is to render
include:

     (a) Representation of Owens Corning in its action against tobacco
companies in the Thomas litigation;

     (b) Representation of Owens Corning in its action against the MIGA
litigation; and

     (c) Preparation of all motions, applications, orders, complaints,
answers, briefs and pleadings and other papers, appearances at
depositions, before referees and masters, and in court, as necessary to
accomplish the activities identified in (a) and (b)

The Debtors sought to continue the joint prosecution of the Thomas
litigation on a unified front by assuming the Joint Prosecution
Agreement and continuing to cooperate with the individual personal
injury plaintiffs. The Debtors and the
individual personal injury plaintiffs recognize that litigation against
tobacco companies is an arduous process, requiring expertise and
experience in complex litigation as well as a tremendous outlay of legal
resources. The Debtors therefore feat that, absent a cooperative effort
between Owens Corning and the
individual personal injury plaintiffs, neither would be able to mount an
offensive against the unlimited resources of the defendant tobacco
companies.

The Thomas litigation is at an advanced stage, and trial is currently
scheduled for June 2001. Abandoning the Thomas litigation at this
critical point likely will result in the loss of any real potential for
a recovery against the defendant tobacco companies. Assuming the Joint
Prosecution Agreement and
continuing the Thomas litigation on a unified front will preserve the
potential for recovering billions of dollars against the defendant
tobacco companies to the benefit of the Debtors' estates and their
creditors.

                   Forman Perry's Role

Owens Corning selected Forman Perry, along with Joint Plaintiff Counsel,
to prosecute the Thomas litigation against the tobacco companies and
share in any contingent recovery because Forman Perry has considerable
experience and knowledge in Mississippi mass tort litigation, including
litigation of claims such as those asserted by Owens Corning against the
tobacco companies.
Likewise, other national asbestos companies have selected Forman Perry
and Joint Plaintiff Counsel as counsel for similar claims against the
tobacco companies.

The professional services provided to Owens Corning by Forman Perry have
included all legal work relating to Owens Corning's claims in the Thomas
litigation that has been undertaken by Forman Perry at Owens Corning's
direction in conjunction with Joint Plaintiff Counsel. Specifically,
Forman Perry has acted as coordinating counsel for Owens Corning in the
Thomas litigation. Also, Forman Perry attorneys and Joint Plaintiff
Counsel have conducted extensive discovery against the tobacco
companies, have prepared and litigated all motions on discovery and
dispositive issues, have hired local and national experts, have attended
and/or conducted all depositions related to the Thomas litigation, have
provided strategic advice to Owens Corning regarding that litigation and
the potential settlement of Owens Corning's claims, have successfully
litigated the remand issue, and have secured a June trial date. Forman
Perry and Joint
Plaintiff Counsel are now proceeding with discovery and dispositive
motion hearings as the Thomas litigation nears its trial date.

         Forman Perry and MIGA Litigation

In addition to representation in the Thomas litigation, Forman Perry
also represents Owens Corning in litigation in the Circuit Court of
Madison County, Mississippi, against the Mississippi Insurance Guaranty
Association. The Madison litigation is a declaratory judgment action
concerning the obligations of MIGA to assume all of the duties and
obligations of Southern American insurance Company, an insolvent insurer
which issued Owens Corning policies totaling $17 million in coverage. In
particular, Owens Corning sought a declaratory judgment confirming that
MIGA is obligated by statute to pay indemnity and defense costs
associated with certain asbestos-related personal injury claims brought
against Owens Corning. Owens Corning also sought monetary
damages for MIGA's breach of its statutory obligation to pay indemnity
and defense costs as if it were Southern American.

                    Forman Perry Fees

The current standard hourly rates for Forman Perry attorneys who may
represent the Debtors range from $200 to $300 for partners, $110 to $195
for associates and contract attorneys, and $50 to $100 for paralegals.
These hourly rates are adjusted on at least an annual basis, and
increases in rates have been the norm throughout the firm's
representation.

                   Forman Perry Disclosures

Richard L. Forman, a member of Forman Perry, averred to Judge Fitzgerald
that certain of the firm's members, counsel and associates may
represent, may have in the past represented, and may in the future
represent the Debtors, entities related to the Debtors, creditors or
stockholders of the Debtors, persons or
entities providing services to the Debtors, and other parties in
interest in matters unrelated to these cases. Specifically, Forman Perry
represents Bank of America, Chase Manhattan Bank NA, Robert B. Jones &
Co., Kaiser Aluminum & Chemical Corporation, KPMG Peat Marwick, Marathon
Ashland Petroleum Company, Minnesota Mining & Mfg. Co., Morgan Stanley &
Company, NationsBank, Nova
Chemicals Canada, Ltd., Parkway Properties, Inc., Prudential Ins. Co. of
America, and Societe Generale, but only in matters unrelated to Forman
Perry's representation of Owens Corning. Forman Perry also represents A.
P. Green Industries, Inc., Asbestos Claims management Corporation, fka
National Gypsum
Company, Combustion Engineering Inc., Gasket Holdings Inc. fka
Flexitallic Inc., Kaiser Aluminum & Chemical Corporation, Owens-Illinois
Inc., T&N Ltd., Uniroyal Holdings, Inc. in matters related to Owens
Corning litigation against tobacco companies, but this representation is
not adverse to Owens Corning or any
of the related debtors. Mr. Forman also discloses that the firm may from
time to time act as co-counsel with other attorneys for the Debtors and
the attorneys for other interested parties in matters unrelated to these
bankruptcy cases.

Mr. Forman advised Judge Fitzgerald that from October 1999 to October
2000, Owens Corning paid Forman Perry $196,156.01 for prepetition
services connected with the Thomas litigation. Also, in that same period
Owens-Illinois provided compensation to Forman Perry in the amount of
$2,271,249.56 for services rendered on behalf of Owens Corning. At the
time of the filing of the
Petition, Owens-Illinois owed Forman Perry $264,174.72. After the
Petition Date, Owens Corning paid Forman Perry $69,009.40 for
prepetition services in full and final satisfaction of a $98,584.85
prepetition claim under the critical vendor orders
by this Court in October 2000. As of January 31, 2001, Forman Perry has
performed hourly fee work on behalf of Owens Corning totaling
approximately $578,358.71 for services rendered on and after October 5,
2000. In connection with the MIGA litigation, Owens Corning paid Forman
Perry $15,919.24 from October 1999 to October 2000, and was indebted to
Forman Perry in the amount of
$1,087.59 on the Petition Date. (Owens Corning Bankruptcy News, Issue
No. 10; Bankruptcy Creditors' Service, Inc., 609/392-0900)


PAXSON COMM.: Landmark Group Owns Over 4 Million Shares of Stock
----------------------------------------------------------------
Landmark Communications, Inc., Landmark Broadcasting, Inc., Landmark
Television, Inc., and BBTC, Inc. (formerly known as The Travel Channel,
Inc.) own 4,007,297 shares of the common stock of Paxson Communications
as of the end of January 2001. Each of these entities may be deemed the
beneficial owner of the 4,007,297 shares of Class A common stock
(approximately 7.2% of the total number of shares of Class A common
stock outstanding as of October 30, 2000). The shares represent
approximately 2.9% of the aggregate voting power of Paxson's outstanding
common stock, which currently consists of Class A Common Stock and Class
B common stock, par value $0.001 per share.

Travel, as beneficial owner of record, may exercise sole power to vote
and dispose of the 4,007,297 shares of Class A common stock. Each of
Landmark, Broadcasting and Television, as direct or indirect owner of
all equity interest in Travel, may be deemed to have sole power to
direct the voting and disposition of the 4,007,297 shares of Class A
common stock held by Travel.



PHYCOR INC.: Asks Convertible Noteholders to Forebear After Default
-------------------------------------------------------------------
A Tennessee-based medical network management services company may be on
the verge of bankruptcy.

PhyCor Incorporated filed last Monday a notice with the Securities and
Exchange Commission that it has entered into limited forbearance
agreements with the holders of its outstanding 4.5% convertible
subordinated notes, TheDeal.Com reports.

In its notice, the company said it needs to get a waiver from its bank
lenders. A default on the above notes allows the company's creditors to
require all outstanding letters of credit to be collaterized with cash.
The company needs about $6 million to meet this obligation, in case.

If the company's noteholders accelerate the payment of principal,
another default would occur, PhyCor said in its notice. The company,
however, have until March 31 to settle the matter as it has successfully
persuaded its noteholders not to take any action until then.

It has already started discussions with an informal committee of
noteholders for a possible restructuring, relates TheDeal.Com.

PhyCor Inc. manages multi-specialty medical clinics and provides
contract management services to physician networks owned by health
systems.

Its most recent quarterly SEC file reveals that it manages physician
practice associations containing roughly 18,000 physicians in 17
markets. It also manages 17 clinics in 11 states, with 1,145 physicians.

In recent years, however, the company has been fiscally challenged. Last
year, it recorded a revenue decline of $401.7 million for the first nine
months of 2000. This was lower than the $1.1 billion sales for the same
period the year before.
The company has also posted a steadily increasing operating loss since
1998. Its interest expenses rose to $40 million in 1999 from $36.2
million in 1998.

During the third quarter of 2000, the company sold 10 clinics to pay
debts. This generated $60.8 million in cash and $4.9 million in notes
receivable. This asset sales, however, did not keep the company from
missing an interest payment in February on $196.5 million in 4.5%
convertible subordinated notes due on 2003. It also failed to pay
another note last March 17.

PhyCor's last quarterly SEC filing states that the company only had $6.1
million in cash on-hand versus $175 million of long-term debt, including
a $25 million bank revolver.

Its convertible subordinated notes outstanding were valued at $303.8
million at the time of the filing, according to TheDeal.Com.


PILLOWTEX CORP.: Taps Interbrand As Brand Management Consultant
---------------------------------------------------------------
Pillowtex Corporation and its related Debtors market their products
under several well-recognized brand names, such as Cannon, Charisma,
Fieldcrest, and Royal Velvet. While the home textile business is not
currently consumer- or brand-driven, the Debtors believe that, by taking
a leadership position in changing he dynamic of how brands are managed
in the home textile industry, they can expect to realize significant
rewards.

Undertaking a project to value these brand names and develop
a new strategy for their cultivation and use will considerably
strengthen their brand portfolio, one of what Mr. William Suddell,
representing Pillowtex, described as the Debtors' most valuable assets,
to the benefit of the Debtors' estates and creditors. But the Debtors
require a knowledgeable corporate brand management firm to successfully
accomplish the goals of this project, they told Judge Robinson. To that
end, the Debtors want to employ Interbrand Corporation as a brand
management consultant under the terms of a proposal deemed proprietary,
and not disclosed to the Court or otherwise.

Interbrand will render corporate brand management services to the
Debtors, in particular performing services by:

     (a) Valuing the Cannon, Charisma, Fieldcrest, and Royal Velvet
brands in the United States;

     (b) Researching consumer attitudes and behaviour by conducting a
quantitative internet study, a brand mapping study, and several visual
ethnography interviews; and

     (c) Crating a brand opportunity model after (i) reviewing the
research it will conduct, as well as the research that the
Debtors already have on hand, and (ii) conducting interviews
with management members, trade customers, and industry
experts.

Interbrand will charge a flat fee of $310,000 for maximizing the value
of the brand portfolio, including development of guides, interviewing,
interviewee honoraria (up to $200 for experts and $100 for consumers),
questionnaire development, online fieldwork, brand mapping fieldwork,
analysis, photos or diagrams of retail audits, written summaries,
strategy development, and presentation of the brand model opportunity.

Interbrand will also receive third-party costs of $70,000 to be
directly billed by vendors to the Debtors for internet mapping, brand
mapping, and visual ethnography, and (iii) other third-party
reimbursables of $40,000 to be advanced by Interbrand and billed by
Interbrand to the Debtors. The $310,000 in fees, and the $40,000 in
third-party reimbursables advanced by Interbrand, are payable by the
Debtors to Interbrand by payment of $100,000 prior to the commencement
of Interbrand's services, $150,000 no later than 30 days after the
commencement of Interbrand's services, and $100,000 no later than 60
days after the commencement of Interbrand's services. It is anticipated
that Interbrand's services will be completed in 60 days. The $70,000 of
direct-billed third-party costs will be paid in the ordinary course
under the terms agreed to with those third parties.
If any changes are made to the scope, timing, or deliverables for the
project, the fees and expenses will change accordingly, but will require
the written agreement of the party to be charged if the fees and
expenses vary plus or minus ten percent of the estimates.

After the research, valuation, and brand opportunity are complete,
Interbrand will propose additional fees and expenses to implement its
strategic recommendations for the Debtors' brands. At such time, if any,
that the Debtors decide to request that Interbrand help with
implementation, the Debtors will seek further approval from the Court.

               The U.S. Trustee Objects

Patricia A. Staiano, the United States Trustee for Region 3, objected to
the employment of Interbrand because it has not met all of the statutory
and case law requirements to be employed as a "professional person" as
that term is used in the Bankruptcy Code. Since Interbrand is to manage
assets which are significant to the Debtors' reorganization, and its
proposed scope of employment gives it autonomy to exercise its
professional judgment to maximize the value of the brands, the Trustee
concludes that Interbrand meets the definition of a professional person,
and must make application as such. The Trustee believes that Interbrand
is performing valuation services, which makes
it an "appraiser". The Trustee then rather airily said that she leaves
the Debtors to their burden to prove that Interbrand should not be
retained as a professional person. (Pillowtex Bankruptcy News, Issue No.
5; Bankruptcy Creditors' Service, Inc., 609/392-0900)


PNV INC: Randall Publishing Acquires PNV.com Unit
-------------------------------------------------
Randall Publishing Company, publisher of Overdrive, Truckers News,
Trucking Co. and its "everything trucking" information and service
website, eTrucker.net, acquired PNV.com, a division of PNV, Inc., of
Coral Springs, Florida.

PNV.com is a leading website for the trucking industry boasting more
than 50,000 registered users and featuring a variety of unique services.
It will merge with Randall's eTrucker.net. The new site, eTrucker.com,
will be the industry's foremost information and service portal with the
largest number of registered users in the trucking community.

"With this merger, PNV.com brings our current Web-development team
additional insight and talent solidifying our place as the leader in
trucking information services," explains Jeff Mason, vice president and
group publisher of Randall's Trucking Media Group. "This combination
will not only create the trucking industry's largest database of
registered users on one site, eTrucker.com, but will also feature
advanced technologies, services, programs and news far superior to what
is available online today."

Mason says that all technical and infrastructure operations will move
from New York to Tuscaloosa. Randall's eTrucker team will work with
PNV.com throughout the transition and will begin merging the two sites
immediately. No date has been set for completion of the transition.

"We are excited about combining our information leadership and their
communities into one super-site for our industry," says Randy
Schwartzenburg, eTrucker general manager and publisher. "For users of
the new site, eTrucker.com will keep the core editorial features from
our site, and offer even more in-depth industry news, research and
services such as load matching, routing, weather, equipment auctions and
business and financial planning."

According to Schwartzenburg, eTrucker.com will combine information and
services from both sites, introducing a new look and numerous new and
improved features. The first of PNV.com's features to be incorporated
into the new site are its routing, chat-rooms and shopping-cart, which
will expand to give users more products and choices. The message board
and its extensive editorial coverage will be integrated from the
eTrucker.net site.
Randall's purchase of the PNV.com assets was approved by the U.S.
Bankruptcy Court during PNV Inc.'s chapter 11 hearing on March 7, 2001.
PNV Inc. made headway in the trucking industry by offering cable and
wireless services to trucking companies, drivers and truck stops all
over America. The acquisition of PNV.com does not include other assets
of PNV Inc. such as its cable television and telephony services, which
were recently purchased by TTI Holdings, Inc.

About Randall

Founded in 1934, Randall Publishing Co. now publishes more than 30
magazines, directories and periodicals, and maintains more than 25
websites. Randall operates the Trucking Media Group (Overdrive, Trucking
Co. and Truckers News magazines), the Construction Media Group
(Equipment World, and RentSmart! magazines) and the Industrial Media
Group (Pumps & Systems and Modern Woodworking magazines). Randall also
owns and operates several online media entities (including
www.eTrucker.net, www.e-worldconstruction.com, www.pump-zone.com, and
www.modernwoodworking.com), trade shows (PumpUsers Expo and the Great
American Trucking Show), radio programs, a billboard company, a company-
sponsored publication division serving Fortune 500 companies, a UCC
filing database and research group, and other media oriented services.


SAFETY-KLEEN: PRP Group Moves To File Late Proof Of Claim
---------------------------------------------------------
Mark Minuti and Adam Isenberg of the firm of Saul Ewing L.L.P., together
with Mary Johnson and Dena Olivier of the firm of Liskow & Lewis,
representing Combustion, Inc. Site PRP Group, asked Judge Peter Walsh
for authorization to file its proof of claim and have it deemed timely
despite the fact that the bar date
for filing proofs of claim has passed.

Combustion is an unincorporated association under Louisiana law and is
an unsecured creditor of Safety-Kleen Corporation by reason of the
Debtor's liability under a Final Combustion, Inc. Site Participation
Agreement effective February 1, 1996 and amended July 1, 1996.
Combustion, Inc. Site PRP Group was
formed by certain corporations which are identified by the Louisiana
Department of Environmental Quality as being potentially responsible
persons for the cleanup of the Combustion, Inc site located in
Livingston Parish, Louisiana.
These PRPs became members of the PRP Group upon their execution of the
Site Agreement. Safety-Kleen became a PRP Group Member as a result of
its merger with PRP Group member Laidlaw Environmental Services, Inc.,
which executed the Site Agreement. Accordingly, Safety-Kleen is liable
for the obligations of Laidlaw.

Under the terms of the Site Agreement, Laidlaw agreed to pay its
allocated share of all response costs incurred by the PRP Group after
February 1, 1996; that is, 2.1037% of future response costs up to
$30,000,000.00, and 1.9361% of future response costs in excess of
$30,000,000. Laidlaw has paid the agreed-upon amount
for the past response and agreed that it would pay all future
assessments made to it under the provisions of the Site Agreement.

In her affidavit, Mary Johnson, counsel for the PRP Group, told Judge
Walsh that Safety-Kleen had actual knowledge of the claim and creditor
status of the PRP Group no later than February 1, 1999, when Raeford
Craig Lackey, Corporate Counsel for Safety-Kleen, corresponded with
Thomas McNamara, counsel to the PRP
Group. In accordance with Safety-Kleen's request in its correspondence
of February 1, 1999, status reports to the PRP Group dated March 3,
1999, July 17, 2000, and November 17, 2000, were sent to Chip Duffie,
Safety-Kleen's Corporate Counsel.

Mark Minuti told Judge Walsh that the PRP Group was not aware that the
Debtor had filed a bankruptcy case until after the proof of claim
deadline had passed. The PRP Group was not included in the Debtor's
mailing matrix for service of notices, pleadings, and orders until the
PRP Group filed a Notice of Appearance
and Request for Notices, also after the proof of claim deadline had
passed. Accordingly, the PRP Group did not receive any notice of the bar
date for filing proofs of claim.

Courts have previously held that a creditor in a Chapter 11 proceeding
who is not apprised with reasonable notice of the bar date is not bound
by the legal effects of the confirmation of the plan and should be
allowed to file a late proof of claim. This is particularly true when
the debtor was aware of the creditor's claim but did not provide
reasonable notice of the bar date to such creditor. A creditor is deemed
to be "known" to the debtor if the debtor has either actual knowledge of
its existence or if its identity can be identified through reasonably
diligent efforts. In this particular instance, the PRP Group:

     (a) Is an unsecured creditor of the Debtor;

     (b) Is known to the Debtor; and

     (c) Did not receive any notice of Safety-Kleen's bankruptcy filing
or the bar date for filing proofs of claim.

Furthermore, jurisprudence provides that when a debtor fails to provide
a known creditor with proper notice of the bar date for claims under a
chapter 11 plan, the creditor is entitled to request permission to file
a late proof of claim and should receive such permission absent evidence
that the creditor failed to act promptly and diligently upon receiving
notice. (Safety-Kleen Bankruptcy News, Issue No. 14; Bankruptcy
Creditors'  Service, Inc., 609/392-0900)


SUN HEALTHCARE: Asks To Extend Rule 9027 Removal Period To Jul 22
-----------------------------------------------------------------
Sun Healthcare Group, Inc. sought the Court's approval, pursuant to
Bankruptcy Rule9006 (b), further extending the time within which they
must file notices of removal of civil actions and proceedings under
Bankruptcy Rule 9027(a) until the earlier of (a) July 22, 2001, or (b)
thirty days after the conclusion of the
confirmation hearing.

The Debtors again reminded the Court that they continue to review their
records to determine whether they should remove any claims or civil
causes of action among the hundreds of actions and proceedings in a
variety of state and federal courts pending on the Petition Date, and
the key personnel assessing these lawsuits are also actively involved in
the reorganization efforts and the mediations arising from the
alternative dispute resolution procedure ordered by the Court.
Therefore, they require additional time to consider filing notices of
removal if the claims are not successfully mediated. The Debtors noted
that it would be a waste of effort to undertake that analysis now since
most of the claims will be resolved through the ADR.

The proposed extension, the Debtors believe, will provide sufficient
additional time for them to consider, and make decisions concerning the
removal of actions on the Petition Date. (Sun Healthcare Bankruptcy
News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 609/392-0900)


TELEX: Moody's Cuts Senior Notes to Ca & Secured Bank Debt to B3
----------------------------------------------------------------
A burgeoning debt coupled by a steadily declining profitability has
caused Moody's Investors Service to downgrade Telex Communications'
senior subordinated notes and senior secured credit facility.

The company's 10.5% Senior Subordinated Notes due 2007 is now rated Ca
from B2, while the 11% Senior Subordinated Notes originally issued by EV
International was lowered to Ca from B3.

In addition, Moody's also downgraded the company's senior secured credit
facility to B3 from Ba3. The Senior implied rating is now Caa1, and the
ratings outlook is negative.

Analysts at Moody's say what caused the downgrade was the recent
announcement by the company that it does not have the cash sufficient to
make the interest payments on the two subordinated notes and that it is
seeking an additional $20 million of debt that will rank ahead of the
sub notes.

Telex is also in technical default of a number of the covenants in its
senior credit facility, the analysts noted.

Although Telex is addressing its liquidity concerns, in Moody's opinion
there is diminished value available to the bondholders after the claims
of the lenders under the senior credit facility have been satisfied, due
to its declining sales and profitability.

At December 2000, Telex had over $115 million in outstanding bank debt
and only $160 million of tangible assets.

Telex Communications designs, manufactures and markets sophisticated
audio and other communications equipment. Its main office is in
Minneapolis


TOROTEL: Management Exploring Alternatives To Improve Cash Flow
---------------------------------------------------------------
Torotel specializes in the custom design and manufacture of a wide
variety of precision magnetic components, consisting of transformers,
inductors, reactors, chokes and toroidal coils. Approximately 90% of
Torotel's sales are derived from domestic customers.

For the three months ended January 31, 2001 net sales increased 2% from
$2,485,000 (in the period ended January 31, 2000), to $2,537,000. The
increase was due to higher sales of the potted coil assembly for the
Hellfire II missile system. There were no shipments of these assemblies
during the first and third quarters last year, since sales are limited
to the number of Hellfire II missiles sold to foreign countries by the
prime contractor. Torotel presently has a $111,000 backlog for this
product, which is scheduled to ship over the next three quarters.
Torotel has experienced a 43% increase in order bookings for its
magnetics products during the first nine months of fiscal 2001, which
has Torotel's magnetics backlog at its highest level in nearly three
years.

The consolidated pretax earnings increased from breakeven to $84,000.
The pretax loss of Torotel, Inc. decreased from $43,000 to $30,000. The
pretax earnings of Torotel Products increased from $43,000 to $114,000.

Torotel has operated without a revolving credit line since December
1998. Since that time, Torotel has relied on funds generated internally
to meet its normal operating requirements and to service bank
indebtedness. While continuing operations have provided cash in the last
three years, the uncertainty surrounding the outstanding liabilities
associated with (i) a terminated merger in fiscal 1999; (ii) the trade
debt of a discontinued subsidiary; and (iii) the note and interest
payable to a former officer, raises doubt about Torotel's ability to
continue as a going concern. While there is no immediate plan to secure
any new financing or capital, management continues to evaluate ways of
improving Torotel's liquidity.


UCAR INTERNATIONAL: Moody's Changes Outlook to Negative
-------------------------------------------------------
Due to a declining cash flow and diminished debt protection measures
caused by a slumping steel industry, Moody's Investors Service has
changed its outlook of UCAR International Inc. to negative. A downgrade
is likely to happen next.

The current downturn in steel demand and prices continues to put
pressure on the prices UCAR receives for its graphite electrodes, which
are used by steel makers employing electric arc furnaces.
In addition, its international sales have been impacted by the strength
of the US dollar versus the Euro and other currencies.
Its graphite electrode prices in 4Q00 only averaged $2,260 per metric
ton, compared to $2,607 in 4Q99. In 2000, UCAR was not able to fully
offset the impact of lower graphite electrode prices with cost savings.

As a result, its gross margin declined from 32% in 1999 to 27.8% in
2000, and its EBITDA to interest ratio was 2.2 in the third and fourth
quarters of 2000.

UCAR's credit measures are weak for its rating category and an increase
in leverage or decrease in profitability could lead to a downgrade.

At present, Moody's assigns a Ba3 rating for UCAR's senior implied, and
B1 for its senior unsecured issuer. The agency rates the company's $900
million senior secured credit facility Ba3.
A deterioration in financial profile could also put UCAR at risk of
exceeding financial covenants in its senior secured credit facility.

As of December 31, 2000, UCAR had net debt amounting to $688 million, or
4.2 times EBITDA (and stockholders' deficit of $316 million).

Last fall, UCAR amended the credit facility's leverage ratio, which
raised the leverage test to 4.5 times for the periods through June 30,
2001, after which it will revert to the former 4.0 times level.

The credit facility's minimum coverage ratio is set at 2.5 times through
September 30, 2001. Coverage, as defined, was 2.57 times for the period
ending on December 31, 2000.

The credit facility is guaranteed by UCAR and UCAR Global and its US
subsidiaries, and secured by a pledge of substantially all of each
guarantor's assets, including 65% of the stock of directly owned foreign
subsidiaries.

Approximately $88 million of the $250 million revolver was drawn at the
end of December 2000.

Prior to the current downturn in steel markets, Moody's had anticipated
UCAR making sizable debt repayments beginning in the second half of
2001, following the completion of the majority of its antitrust fines,
settlements and related expenses.

Debt repayments are now expected to be modest given the state of the
steel industry, the current graphite electrode pricing environment, and
higher energy and needle coke costs.

For all of 2000, UCAR reduced its net debt by $14 million. In part, this
was made possible by careful management of working capital, which
generated $43 million of cash during 2000. This is unlikely to be
duplicated in 2001.

Tight cost controls, a high proportion of variable costs, and a 21%
worldwide market share position favor UCAR when the graphite electrode
business strengthens.

UCAR International Inc. is a leading global manufacturer of graphite and
carbon electrodes, cathode blocks, and other graphite and carbon
products. It is based in Nashville, Tennessee.


UTILITY.COM: Cuts Jobs & Shuts Down Due To Rising Debts
-------------------------------------------------------
Just months after changing its business model, online discount energy
provider Utility.com is going out of business, according to CNET
News.com. The three-year-old company will abandon its recently adopted
ASP (application service provider) business model, as well as its
consumer services: energy, general Internet access and DSL, and long-
distance telephone.

Utility.com General Counsel Ben Reyes said although the ASP business
looked promising, the company simply racked up too much debt from the
skyrocketing energy prices that have plagued Californians in recent
months.

"Although we didn't declare any formal bankruptcy proceedings, our
finances were such that we had to start immediate action to stay the
process," Reyes said. Rising debt forced the company to exit all of its
businesses. The staff, once a bustling 130 employees, has been whittled
down to 15, and Reyes expects these final positions, including his own,
will be terminated in the next few weeks. (ABI World, March 20, 2001)


VENCOR INC.: Posts $53.6 Million Net Loss For FY 2000
-----------------------------------------------------
Vencor, Inc. announced its operating results for the fourth quarter and
year ended December 31, 2000.

For the year ended December 31, 2000, the Company reported a net loss
from operations of $53.6 million, or $0.78 per share, compared to a loss
from operations of $683.2 million, or $9.72 per share, for 1999.
Revenues for 2000 totaled $2.9 billion compared to $2.7 billion in 1999.
Operating results for 2000 included $4.7 million of unusual pretax
charges related to certain property and investment transactions and
$12.6 million of costs associated with its restructuring activities.
Operating results for 1999 included $412.4 million of unusual pretax
charges, most of which were recorded in the fourth quarter, and
restructuring costs of $18.6 million.

Operating results in both years reflected provisions for loss related to
deferred income taxes. As a result of significant operating losses, the
Company recorded charges of $7.9 million in 2000 and $146.4 million in
1999 to write down net deferred tax assets which may not be realized in
the future.

Effective January 1, 1999, the Company changed its method of accounting
for start-up costs, resulting in a charge of $8.9 million or $0.13 per
share.

For the fourth quarter of 2000, the Company reported a net loss from
operations of $6.1 million, or $0.09 per share, compared to a net loss
of $585.6 million, or $8.32 per share, for the fourth quarter of 1999.
Operating results for the fourth quarter of 1999 included significant
charges related to certain unusual transactions and year-end
adjustments. Revenues for the quarter totaled $742.4 million compared to
$594.6 million for the same period a year ago. Fourth quarter 1999
revenues were reduced by $80.4 million as a result of an increase in the
provision for loss related to third-party reimbursements. There were no
unusual transactions or material year-end adjustments in the fourth
quarter of 2000.

Operating results for the fourth quarter of 1999 included pretax charges
of $391.6 million related to certain unusual transactions. The most
significant of these charges related to long-lived asset impairments
($330.4 million), including goodwill, for 71 nursing centers and 21
hospitals. Other unusual charges included costs associated with the
realignment of the Company's Vencare ancillary services division ($56.3
million), including $42.3 million of goodwill, curtailment costs for a
supplemental executive retirement plan ($7.3 million) and a credit of
$2.4 million related to certain corporate properties.

Fourth quarter 1999 results also included pretax charges aggregating
$167.1 million recorded in connection with certain year-end adjustments.
These adjustments included, among other things, additional provisions
for loss related to doubtful accounts ($82.4 million), third-party
reimbursement allowances ($80.4 million) and professional liability
risks ($11.4 million), all of which resulted from changes in estimates.

Costs incurred by the Company in connection with its restructuring
activities totaled $2.3 million and $6.3 million in the fourth quarter
of 2000 and 1999, respectively.

Provisions for loss related to the write-down of deferred taxes totaled
$116.6 million in the fourth quarter of 1999. In the fourth quarter of
2000, the Company recorded a credit of $5.5 million to adjust its net
deferred tax assets.

Vencor and substantially all of its subsidiaries filed voluntary
petitions for reorganization under Chapter 11 with the United States
Bankruptcy Court for the District of Delaware on September 13, 1999.

On March 1, 2001, the Court approved the Company's fourth amended plan
of reorganization filed with the Court on December 14, 2000, as modified
at the confirmation hearing. The order confirming the Amended Plan was
entered on March 16, 2001. The Company is proceeding expeditiously to
implement the Amended Plan which, under the terms of the Amended Plan,
must be effective no later than May 1, 2001.

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


VENCOR INC.: Seeks To Extend Rule 9027 Removal Period To June 11
----------------------------------------------------------------
Vencor, Inc. reminded the Court that as of the Petition Date, they were
party to various civil actions and proceedings in a variety of fora.
Since the Petition Date, the Debtors reiterated, they have focused their
efforts on minimizing any disruptive effect of the bankruptcy
proceedings on their businesses, and matters related to negotiating and
formulating a plan of reorganization. In addition, they have focused a
large portion of their resources and staffing to the reporting
requirements of the Office of the United States Trustee, the Debtors
told the Court.

Simply put, the Debtors find that they will not be able to make an
informed decision regarding the removal of any claims, proceedings or
civil causes of action prior to the current deadline.

Accordingly, the Debtors sought the Court's authority, pursuant to
Bankruptcy Rule 9006(b), further enlarging the time within which they
may file notices of removal of these civil actions and proceedings under
Bankruptcy Rule 9027 through June 11, 2001. (Vencor Bankruptcy News,
Issue No. 26; Bankruptcy Creditors' Service, Inc., 609/392-0900)


VENCOR: Transitional Hospital Settles Civil Liabilities For 1.5MM
-----------------------------------------------------------------
United States Attorney Donald K. Stern announced that Transitional
Hospital Corporation (THC), formerly headquartered in Las Vegas, Nevada,
has agreed to settle a civil action filed by the United States
Attorney's Office alleging that THC conspired with others to defraud the
United States and to knowingly submit false and fraudulent claims to
Medicare in connection with medically unnecessary laboratory tests and
medically unnecessary blood draws performed on terminally ill dialysis
patients.

THC was acquired by Vencor Inc., one of the nation's largest nursing
home chains, and Vencor has agreed to pay $1,561,267 to the United
States as part of its bankruptcy reorganization to resolve THC's civil
liabilities in connection with the Government's lawsuit pending in the
United States District Court in Boston.

As alleged in the Government's civil complaint, in 1987, THC, through
its predecessor corporation, Community Psychiatric Centers, Inc. (CPC),
entered into a joint venture agreement with Damon Clinical Laboratories
to operate an independent clinical laboratory in Smyrna, Georgia. Damon,
formerly headquartered in Needham, Massachusetts, pleaded guilty to
conspiracy to defraud the Medicare program in October, 1996, paid $119
million to resolve its criminal and civil liabilities with the
Government, and was excluded from further participation in the Medicare
program. CPC was a provider of dialysis services to thousands of
patients afflicted with end stage renal disease who required dialysis
treatments, usually three times a week, to survive. In 1989, CPC spun
off its dialysis business to Vivra Incorporated which continued to
participate in the joint venture laboratory with Damon. In 1998, Vivra's
dialysis business was purchased by Gambro Healthcare, Inc. which is now
one of the largest providers of dialysis services in the country.

Medicare, the largest government payer for health care services,
reimburses laboratories for clinical laboratory testing services only if
those services are medically necessary for the diagnosis and treatment
of illness or injury to Medicare beneficiaries.

Medicare pays for all medically necessary laboratory tests for persons
of all ages suffering from ESRD after a brief qualifying period. The
government alleges that CPC, and later Vivra ("the dialysis companies")
participated in the joint venture laboratory with Damon for the illegal
purpose of sharing the profits from monies paid by Medicare for
laboratory tests run on ESRD patients. The Government alleges that Damon
and the dialysis companies conspired to run medically unnecessary tests
and to take unnecessary blood draws from these dialysis patients for the
sole purpose of increasing the profits of the joint venture laboratory.

The United States alleged that the scheme to defraud Medicare by the
joint venture laboratory consisted of two primary areas of misconduct.
First, the United States alleges that the dialysis companies abused
their unique position of trust with respect to their terminally ill
dialysis patients by regularly and unnecessarily drawing blood from them
with no medical justification whatsoever, and over the objections of
their own medical staff, to create thousands of referrals of additional
tests for which the companies expected to illegally share in the profits
of the joint venture laboratory. In particular, the United States
alleged that Damon and the dialysis companies split an automated
chemistry panel of nineteen blood tests into two separate tests run on
blood draws taken on two separate days to avoid a new Medicare
reimbursement rule designed to control laboratory costs for automated
testing provided to ESRD patients for chemistry panels. To circumvent
the new Medicare payment rule, the Government alleges that the business
executives of the dialysis companies deliberately misled the patients'
treating physicians and the laboratory employees into unknowing
participation in this scheme, and deceived the Medicare carrier into
paying claims for laboratory tests that the carrier otherwise would not
have paid. Te Government alleges that while all nineteen tests had
previously been performed on one blood draw and paid for as one test,
the dialysis companies now split the panel in two, drawing blood a
second time each month on these very sick patients for no purpose other
than to increase their profits.

In addition, the government alleged that the dialysis companies
conspired with Damon to conduct medically unnecessary lab testing on
dialysis patients. The Government alleged that the business executives
added laboratory tests to the weekly and monthly panels of tests offered
dialysis physicians, not because physicians requested or needed the
tests, but solely because the additional testing increased the revenues
of the joint venture laboratory.

This $1.5 million settlement with THC under the civil False Claims Act
resolves the government's allegations against one of the two remaining
defendants in this civil action. The litigation by the government
continues against the remaining defendant, Vivra Incorporated, now owned
by Dialysis Holdings, Inc., a subsidiary of Gambro Healthcare, Inc. The
government previously settled its civil claims against Damon in
connection with this misconduct. A portion of the THC settlement will be
paid to a whistleblower, the former general manager of the joint venture
laboratory, who brought this conduct to the attention of the government
by filing suit under the provisions of the False Claims Act.

The settlement of THC's civil liabilities in connection with this matter
is part of a larger resolution of all of THC's corporate parent Vencor,
Inc.'s civil liabilities for health care violations in connection with
its bankruptcy reorganization.

Vencor filed for protection under the federal bankruptcy laws in
September, 1999. This settlement is part of Vencor's plan of
reorganization which was entered last Friday with the U.S. Bankruptcy
Court for the District of Delaware.

The investigation leading to this settlement was conducted by the
Inspector General's Office of the Department of Health and Human
Services, the Federal Bureau of Investigation, and the Defense Criminal
Investigative Service. The case is being litigated by Assistant U.S.
Attorney Susan G. Winkler.


VLASIC FOODS: Engages Skadden Arps As Lead Bankruptcy Counsel
-------------------------------------------------------------
Joseph Adler, an authorized officer of Vlasic Foods Brands, sought Judge
Mary Walrath's authority to retain and employ the firm of Skadden, Arps,
Slate, Meagher & Flom, LLP, with offices in New York and Wilmington,
Delaware, as their lead bankruptcy counsel in these cases.

Skadden Arps has represented the Debtors since 1998. The firm has
rendered extensive services to Vlasic in connection with general
corporate, securities offering, financing, and restructuring matters. As
a result, Skadden Arps is knowledgeable about the Debtors' business
affairs and many of the potential legal issues that may arise in the
context of these cases. Because of the firm's familiarity with the
Debtors' business and legal affairs, Mr. Adler told Judge Walrath he
believes that the continued representation of the Debtors by their
restructuring and bankruptcy counsel Skadden Arps is critical to the
success of the Debtors' reorganization.

The Debtors have entered into an Engagement agreement with Skadden Arps
dated as of January 19, 2001. The services of Skadden Arps under this
general engagement are necessary to:

     (a) Advise the Debtors with respect to their powers and duties as
debtors-in -possession in the continued management and operation of
their businesses and properties;

     (b) Attend meetings and negotiate with representatives of creditors
and other parties-in-interest and advise and consult with the on the
conduct of the cases, including all of the legal and administrative
requirements of operating in Chapter 11;

     (c) Take all necessary action to protect and preserve the Debtors'
estates;

     (d) Prepare all motions, applications, and other papers necessary
to the administration of their estates;

     (e) Negotiate and prepare a plan or plans of reorganization,
disclosure statements, and other related documents. The firm will also
take necessary actions to obtain confirmation of such plans;

     (f) Advise the Debtors on any sale of assets;

     (g) Appear before the courts and protect the interests of the
Debtors' estates; and

     (h) Perform all other necessary legal services and provide all
other necessary legal advise to the debtors in connection with these
cases.

Before entering into the Engagement Agreement, the Debtors provided
Skadden Arps with retainers on the various matters for which it was
engaged. With respect to the Debtors' restructuring efforts, Skadden
Arps was paid a pre-petition retainer of $200,000.00 for professional
services to be rendered and expenses to be charged by the firm.

As of the Petition Date, after application of all pre-petition fees,
charges, and disbursements incurred and posted as of that date, the Pre-
Petition Retainer still totaled $107,485.77. Skadden Arps and the
Debtors agreed that the firm will hold such amount as a retainer for and
applied against post-petition fees and expenses that are allowed by the
Court. To the extent, if any, that any amounts remain due and owing for
pre-petition fees or expenses in excess of the Pre-Petition Retainer,
the firm has agreed to waive such fees and expenses.

Within the year prior to the Petition Date, the firm invoiced the
Debtors for the sum of $3,391,390 for services rendered in connection
with the Debtors' efforts to sell their businesses, preparation for
these cases, and related matters, and as reimbursements for charges and
disbursements. Historically, the firm sent the Debtors invoices at least
once a month for services rendered and charges and disbursements
incurred. The Debtors promptly paid such amounts as invoiced.

For professional services, the firm's fees are based in part on its
guideline hourly rates, which are periodically adjusted. Skadden Arps
and the Debtors have agreed that the firm will use it bundled rate
structure for these cases. The firm's guideline hourly rates will be
adjusted by an additional increment to incorporate certain staff,
clerical and resource charges that are otherwise billed on an incurrence
basis in accordance with the firm's charges and disbursement policy. The
hourly rates for the
firm's bundled rate structure are:

     Partners                           $445 to $670
     Special counsel and counsel        $415
     Associates                         $230 to $415
     Legal assistants and support staff $ 80 to $160

These rates are subject to periodic increases in the normal course of
the firm's business, often due to the increased experience of a
particular professional.

Sally McDonald Henry, a member of the firm Skadden, Arps, Slate, Meagher
& Flom, LLP, assured Judge Walrath that the firm is a disinterested
person within the meaning of the Code. However, in the interest of full
disclosure, Ms. McDonald Henry discloses certain relationships of the
firm with potentially interested parties in these cases:

     (i) Skadden Arps may have provided legal advice and representation
to certain non-debtor affiliates of the Debtors. The firm has acted and
may continue to render services to the non-debtor affiliates when the
interests of such affiliates do not conflict with the interests of the
Debtors.

    (ii) Under a certain Amended and Restated Credit Agreement,
dated as of September 30, 1998, among 18 financial institutions, VFI, as
borrower, and the remaining Debtors as guarantors, and on which Morgan
Guaranty Trust Company of New York serves as the Administrative Agent
and Collateral Agent and The Chase Manhattan Bank, as Syndication Agent,
both Bank Agents are also the agents for financial institutions that
will participate in the DIP facility, for which J.P. Morgan Securities,
Inc. and Chase Securities Inc. are the joint lead arrangers and joint
book
managers. Skadden Arps has represented or represents the Bank Agents or
their affiliates, some of the other Pre-Petition Lenders or their
affiliates, and the DIP Bank Managers or their affiliates, on matters
unrelated to the Debtors' Chapter 11 cases.

    (iii) Prior to the commencement of these cases, Skadden Arps
reviewed Uniform Commercial Code lien searches of the Pre- Petition
Lenders' collateral position in the Debtors' assets. The lien searches
were provided by counsel for the Bank Agents. This analysis did not
reveal any apparent infirmity in the perfection of the Pre-Petition
Lenders' security interest. Thus, Sk adden Arps advised the Debtors on
the validity and perfection of the Pre-Petition Lenders' security
interest in the Debtors' assets.

Skadden Arps believes that its representation of Chase, Morgan, Chase
Securities or their affiliates, and certain of the pre-petition lenders
or their affiliates, has not, and will not, in any way affect the firm's
representation of the Debtors in their Chapter 11 cases.

    (iv) Among the firm's former clients is Campbell Soup Company. The
Dorrance Family Participants are substantial equity holders of Campbell
Soup Company. Although the Dorrance Family Participants are not present
or former clients of the firm, certain of the Dorrance Family
Participants are executives, officers, or directors for certain of the
firms' clients or other related entities.

     (v) VFI is party to a single issuance of 10% Senior Subordinated
Debentures due 2009. Skadden Arps does not represent the indenture
trustee, The Bank of New York. However, Skadden Arps represents or has
represented an entity related to The Bank of New York on matters
unrelated to the Debtors.

    (vi) Skadden Arps represents the Safety-Kleen debtors in their
Chapter 11 cases. Although the Debtors have not yet filed their
schedules of assets and liabilities, Safety-Kleen appears to be a trade
creditor of the Debtors, holding an unsecured claim of approximately
$5,000. Safety- Kleen also appears to be party to one or more executory
contracts with the Debtors for hazardous waste removal and parts washing
services at one or more of the Debtors' plants. Skadden Arps will not
represent the Debtors or Safety-Kleen in connection with the other's
bankruptcy cases.

In addition, although Skadden Arps has in the past represented,
currently represents, and likely in the future will represent certain of
the Debtors' fifty largest unsecured creditors, equity holders and other
parties-in-interest, the firm assures the Judge that none of these
representations pertain to matters related to the Debtors and the
Debtors' reorganization cases, or such entities' claims against or
interest in the Debtors.

Ms. McDonald Henry further told Judge Walrath that other than these
relationships, she is not aware of any claim that the Debtors have
against these entities. If the firm should come into possession of
information that would suggest the existence of potential claim against
one or more of the interested parties, the firm will advise the Debtors
of such information. When appropriate, the firm shall either seek a
waiver from the interested party or have the Debtors retain special
counsel to investigate and pursue any such claim. (Vlasic Foods
Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


WCI STEEL: Senior Secured Notes Rating Dips to B3
-------------------------------------------------
Substantial losses and poor financial performance brought down the bond
ratings of WCI Steel and its holding company Renco Steel Holdings.

Analysts at Moody's Investors Service also see a negative outlook for
the two companies within the next four to six months. This is primarily
due to the present slump in the steel industry.

WCI Steel Inc.'s $300 million of 10% senior secured notes due on 2004 is
now rated B3, a notch lower from the previous rating.

Meanwhile, Moody's also downgraded Renco Steel Holdings, Inc.'s $120
million of 10.875% senior secured notes due on 2005 to Ca from Caa2.

This is due to concerns that WCI's poor financial performance will
preclude for some time dividend payments to Renco Steel, thereby
imperiling the holding company's ability to make interest payments on
its 10.857% notes.

Renco Steel's source of cash for making the coupon payments on its
10.875% notes is mainly through distributions from WCI. But the steel
company's recent and projected net losses will restrict its ability to
pay dividends to Renco Steel for the foreseeable future.

As of January 31, 2001, WCI had a restricted payments basket of negative
$20 million, meaning it must earn $40 million before it can pay any
dividends from earnings.

It is possible that this will not occur over the four-year term of the
holding company notes. Renco Steel had only about $2 million of cash
remaining after making its $6.5 million February 1, 2001 semiannual
interest payment.

WCI continues to be negatively affected by poor industry and economic
conditions, as low sales volumes, depressed steel prices, and high
energy costs have severely impacted its performance.

In its first fiscal quarter that ended on January 31, 2001, WCI reported
negative gross profit and EBITDA for the first time ever, as net sales
decreased 30% and operating costs per ton increased $65 from the prior
year.

Its first quarter net loss was $20 million after adding back $12.5
million in non-operating charges.

Liquidity, however, is not an immediate problem for WCI. At January 31,
2001, it had $65 million in cash and a borrowing limit of $82 million
under its revolving credit facility, which was undrawn.

The revolver is secured by eligible receivables and inventories. The
revolver's tightest financial covenant is a minimum net worth covenant
of negative $150 million.

At January 31, 2001, WCI had deficit equity of $113 million. Its debt
totaled $301 million.

WCI's senior notes are secured by a second priority lien (junior to $0.3
million of WCI's 10.5% senior notes due 2002) on substantially all the
fixed assets of the company, which have a net book value of around $200
million.

Moody's acknowledges that WCI holds a solid market position as a
producer of value-added, custom flat-rolled products, which has
historically lessened its vulnerability to industry cyclicality and
pricing pressures.

Although WCI announced an increase in transaction prices ranging from
$30-$40 per ton on its products, it is unlikely that these increases
will be realized under present market conditions.
Furthermore, WCI is expecting a slight decrease in average selling
prices in the second quarter compared to the first quarter, due to sales
contracts that became effective January 1, 2001.

Meanwhile, Moody's also lowered Renco Steel's senior unsecured issuer to
Ca from Caa2, but its B2 senior implied rating was unchanged.

On the other hand, the B1 rating for WCI's $100 million secured bank
credit facility was confirmed, based on the facility's collateral
coverage and dynamic borrowing base.

These changes conclude Moody's review of WCI and Renco Steel's ratings,
which were placed under review with direction uncertain on September 11,
2000.

This after the company announced it was exploring a potential
acquisition of Acme Steel Company. While WCI continues to have an
interest in the Acme Steel assets, the ultimate outcome and structure of
an acquisition is uncertain at this time.

The negative rating outlook for both companies reflects Moody's
expectation that steel market conditions will remain weak for another
four to six months, and only slowly recover.


WHEELING-PITTSBURGH: There's No Separation Between Church & Steel
-----------------------------------------------------------------
Weirton Steel Corp. (NYSE: WS) and Wheeling-Pittsburgh Steel Corp. have
organized the "Kneel Down and Pray, Stand Up for Steel" interfaith
service to focus on the effect illegal steel imports are having on Upper
Ohio Valley communities and families.

The service will be held March 27 from 7 p.m. to 8 p.m. at the Finnegan
Field House, Franciscan University of Steubenville (Ohio), and will
feature six members of the clergy representing various denominations.

"A minister recently suggested to me that while the steel industry's
efforts in Washington to end the steel import crisis are very important,
perhaps a little divine intervention was in order. That's what led us to
organize the interfaith service," said Gregg Warren, Weirton Steel Corp.
director - corporate communications.

"We're encouraging the employees from the local steel companies to
attend with their families. We also invite concerned citizens,
government officials and community leaders to join us. Perhaps this will
start a national movement for similar services."

Jim Kosowski, Wheeling-Pittsburgh corporate communications director,
explained that for the past three years domestic steel has participated
in the Stand Up for Steel campaign. He said the interfaith service is a
welcomed addition to the campaign.

"We've been involved in marches, rallies, lobbying and government
hearings in an attempt to end the problem. The service is an opportunity
for the faith community to come together and add another strong voice
speaking out for our industry and our communities," commented Kosowski.

"The managements and unions of both companies have stood together in
this fight and on March 27, we will again join as one people and one
voice."

Wheeling-Pittsburgh Steel's hourly employees are members of the United
Steelworkers of America while Weirton Steel's hourly personnel are
represented by the Independent Steelworkers Union.

Since the import crisis began in late 1997, 16 domestic steel companies
have filed bankruptcy and 15,000 steel jobs have been lost because of
foreign steel sold in U.S. markets at illegal prices.

Both companies operate within several miles of one another in the Upper
Ohio Valley. Wheeling-Pittsburgh Steel is headquartered in Wheeling,
W.Va., with the majority of its operations located in Eastern Ohio.
Weirton Steel is situated in Weirton, W.Va.

Weirton Steel and Wheeling-Pittsburgh Steel are the eighth and ninth
largest domestic steel producers, respectively.


XPEDIOR INC.: May Sell Assets Under Bankruptcy To Pay Debts
-----------------------------------------------------------
Xpedior Incorporated (Nasdaq: XPDR) announced the closing of four
unprofitable offices and a substantial reduction in force affecting
approximately 300 employees or 42% of the Company's workforce.

Citing continuing significant declines in revenue, Xpedior is closing
unprofitable offices in New York City, San Jose, Denver, and Dallas, and
reducing its workforce at both its Alexandria, Virginia office, and
staff functions within its corporate headquarters.

The Company's actions do not affect Xpedior's Chicago, Illinois and
Bedford, New Hampshire offices, which have been operating profitably.
The Company also announced that Anthony G. Capers, President, Mark D.
Hansen, Executive Vice President of Operations, and Robert D. Whitehead,
Senior Vice President of Sales have resigned. No replacements have been
named.

The Company anticipates that its current cash, cash equivalents and cash
that may be generated from operations should be sufficient to meet its
anticipated operating requirements through June 30, 2001, although there
can be no assurance in this regard.

In order to continue operations in 2001, the Company will require an
additional, substantial capital infusion. Xpedior said that it will be
difficult or impossible for the Company to obtain such additional
working capital. Accordingly, Xpedior will continue to explore strategic
alternatives for the sale of all or part of its remaining operations.

Even if Xpedior is successful in one or more of these efforts, it is
likely that the common stock of the Company will have no value. It is
the Company's current intention to dispose of its assets in an orderly
manner, and apply the proceeds to the payment of the Company's
obligations in accordance with applicable law. In the event a bankruptcy
proceeding is deemed appropriate to achieve this objective, the Company
may commence such proceedings.


XPEDIOR INC: Fails To Meet Nasdaq's Listing Requirements
--------------------------------------------------------
Xpedior Incorporated (Nasdaq: XPDR) stated that it has received a notice
from Nasdaq that its common stock has failed to maintain the required
minimum bid price of $1.00 over a period of 30 consecutive trading days.
As a result, Nasdaq has provided the company with 90 calendar days, or
until April 17, 2001, to regain compliance with this requirement. The
Company does not anticipate that it will be able to regain compliance
with this Nasdaq listing requirement.

The Company also announced that, in conjunction with the audit of its
financial statements for the year ended December 31, 2000, it has been
advised that it will receive a going concern qualification in its audit
opinion from its independent auditors.

In addition, the Company stated that it has been advised that it will
receive a notice of default under certain covenants of its senior
secured credit facility with Comerica Bank, N.A., and has requested
waivers and adjustments to those covenants, although there can be no
assurance in this regard.


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

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

Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are available at
your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.

For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                          *********

S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard Group,
Inc., Washington, DC USA. Debra Brennan, Yvonne L. Metzler, Larri-Nil
Veloso, Aileen Quijano and Peter A. Chapman, Editors.

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

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic re-
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permission of the publishers.  Information contained herein is obtained
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