TCR_Public/010413.MBX          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Friday, April 13, 2001, Vol. 5, No. 73

                            Headlines

AMAZON.COM: Moody's Junks Senior Debt Ratings
ARMSTRONG WORLD: Hires Dechert As Special Tax Counsel
BUGLE BOY: Completes Sales of Trademarks & Licensing Operations
CHIQUITA BRANDS: New EU Accord Doesn't Solve Debt Problems
CONFEDERATION TREASURY: Creditors to Get 2nd Fund Distribution

CYBEX INTERNATIONAL: Obtains Waiver Of Covenant Defaults
E.SPIRE COMMUNICATIONS: Court Okays Plan To Borrow $25 Million
EQUALNET: Completes Sale Of Selected Assets To CCC GlobalCom
FARMLAND INDUSTRIES: Fitch Cuts Senior Implied Rating To `BB-'
FMAC: Fitch Downgrades Certain Transactions To D From C

FRUIT OF THE LOOM: Proposes Key Employee Incentive Program
GENESIS HEALTH: Court Allows Manor Care To Enforce Arbitration
GREAT LAKES: Case Summary & 20 Largest Unsecured Creditors
HARBOR GLOBAL: Raises $8.5 Million From Sale of Russian Business
HARNISCHFEGER: Beloit Settles P&G Administrative Claim Dispute

HEILIG-MEYERS: Focusing on RoomStores Operations, Closing Others
ICG COMMUNICATIONS: NetAhead Junks ThinkLink's Service Contract
IMPERIAL SUGAR: Asks For More Time To Decide On Property Leases
IMPROVENET: Fails To Comply With Nasdq's Listing Requirement
INTEGRATED HEALTH: Bates, Campbell & Amerimed Seek Stay Relief

iNTELEFILM: Receives Notice of Non-Compliance From Nasdaq
KRAUSE'S FURNITURE: Accountants Issue Qualified Opinion
LERNOUT & HAUSPIE: Names Tim Ledwick as Chief Financial Officer
LIFE FINANCIAL: Nasdaq Intends To Delist Shares On April 16
LOEWEN GROUP: Agrees With Nix To Catch-Up Mortgage Payment

LSI LOGIC: Closing Colorado Springs Factory in August
LTV CORPORATION: Judge Okays New DIP Facility Despite Objections
LTV CORP: Restructuring Kicks Off With Closure Of Steel Facility
MEADOWBROOK: Obtains Waiver of Bank Loan Covenant Violations
NORTHPOINT: Cypress Comm. Agrees To Assist Former Customers

OPUS360: Falls Short of Nasdaq's Minimum Bid Price Requirement
PACIFIC GAS: Designates Gordon Smith As Responsible Individual
PACIFIC GAS: Fitch Says Partial Tax Payment Won't Impact Ratings
PUTNAM: Commerce Proposes Alternative To Liquidation of Fund
RAPID LINK: Files for Chapter 11 Bankruptcy Protection

SERVICE MERCHANDISE: Modifies Employee Retention Program
SPAR GROUP: Shares Subject To Delisting From the Nasdaq Market
SYNBIOTICS CORPORATION: Appeals Nasdaq Decision To Delist Shares
TRADEREACH: Unable To Raise Needed Funds To Continue Operations
UNICAPITAL CORP.: Exclusive Period Extended To June 5

VAST SOLUTIONS: Files Chapter 7 Petition in N.D. Texas
VENCOR: Agrees TO Maintain $6,000,000 On Deposit With PNC Bank
VIATEL INC.: Intends To Default Interest Payment On Senior Notes
W.R. GRACE: Honoring Customer Obligations
WORLD ACCESS: TelDaFax To Liquidate As DT Refuses Cash Payment

WORLD ACCESS: Noteholders Consent to Stay Involuntary Petition

BOOK REVIEW: Law and the Lawyers

                            *********

AMAZON.COM: Moody's Junks Senior Debt Ratings
---------------------------------------------
Moody's Investors Service confirmed the debt ratings of
Amazon.com, Inc., and changed the rating outlook to positive
from stable. With approximately $2.2 billion of debt securities
affected, the following ratings were confirmed:

      * Senior implied rating and senior issuer rating of Caa1;

      * Senior unsecured debt ratings of Caa1;

      * Subordinated convertible note ratings of Caa3.

The risk of Amazon's business model and capital structure
remains high, states Moody's. But the rating agency believes
that management's focus on achieving profitability, and a
clearer strategy to harvest the investment in existing
operations rather than expend capital on new businesses, holds
the potential for positive cash flow within the medium term.

Moody's is also in the opinion that Amazon is unlikely to grow
sales rapidly enough to cover the costs of carrying its current
infrastructure, but that it may be able to generate cash from
sources other than retailing.

Accordingly, future rating actions will depend on Amazon's
ability to demonstrate financial discipline and operating
performance consistent with its goals of achieving operating
profitability and positive cash flow.

Moody's further states that the ratings reflect the expectation
that Amazon.com will continue to report operating losses and
negative net operating cash flow for the next 18 - 24 months;
uncertainty about the near term performance of new products and
sites rolled out during late 2000, and continuing uncertainty
about the ultimate success of Amazon's business model; the
equity-like risk assumed by debtholders as a result of the
company's financing strategy; and the intense competitive risks
faced in all of Amazon's product categories.

Amazon.com Inc., headquartered in Seattle, Washington, is the
world's largest Internet-based retailer.


ARMSTRONG WORLD: Hires Dechert As Special Tax Counsel
-----------------------------------------------------
Walter T. Gangl, vice-president and assistant secretary of
Armstrong World Industries, Inc., on behalf of the Debtors,
asked the Court for authorization to employ Dechert as special
tax counsel for the Debtors retroactively to the Petition Date.

The Debtors have retained Dechert as their counsel to handle tax
matters since September 30, 1993. The Debtors ask the Court to
approve the continued employment of Dechert as their special
counsel to perform the tax-related legal services required to
effectively and efficiently operate their businesses during the
pendency of these Chapter 11 cases. Dechert is thoroughly
familiar with the Debtors' business affairs and tax issues. Thus
the Debtors believe that the continued employment of Dechert is
in their best interest and in the best interest of their
creditors and all other parties-in-interest.

In their application, the Debtors stated to Judge Farnan that,
within one year prior to the Petition Date, Dechert received
approximately $150,000 from the Debtors for services rendered
and related expenses. However, Lee A. Zoeller, a partner at
Dechert, advised under oath that " Within one year prior to the
Petition Date, Dechert received from the Debtors approximately
$360,000 for services rendered and related expenses. In
addition, the Debtors have accumulated approximately $25,000 in
unbilled fees and Dechert has devoted approximately $95,000 in
time to matters which are being handled on a contingent fee
basis."

As tax counsel, Dechert has provided and continues to provide
the Debtors with legal services consisting of:

      (a) Representation in a variety of matters within the tax
          field;

      (b) Defense in assessment appeals in state courts involving
          tax issues;

      (c) Routine handling of matters before taxing authorities;

      (d) Advice to the Debtors concerning tax appeals in various
          states; and

      (e) Provision of day-to-day legal advise, management, and
          supervisory training and on-site counseling with
          respect to tax issues concerning acquisitions,
          dispositions, and tax planning.

Dechert has manifested its intent to apply to the Court for
allowance and compensation with respect to professional services
to be rendered following the Petition Date.

Dechert will be entitled to receive compensation based on its
customary hourly rates, subject to change from time to time. The
standard hourly rates for the principal attorneys expected to
work on the Debtors' matters are:

          Mazzola, Francis            $440
          Zoeller, Lee A.             $390
          Kariss, Richard C.          $385
          Kraus, David R.             $385
          Blazick, Stephen J.         $215
          Bogar, Jennifer M.          $165
          Gallo, Frank J.             $230
          Gutowski, David J.          $165
          Newman, Randall S.          $215
          Riscili, Michael R.         $215
          Roberts, Ronald G.          $175
          Shipley, David J.           $300
          Soles, Steven G.            $165
          Sollie, Kyle O.             $250
          Van Allen, John E.          $230
          Young, Aaron M.             $300

In addition, on two matters, the Debtors proposed to pay Dechert
under a contingent fee arrangement whereby Dechert's fee is 35%
of any tax and interest recovered for the Debtors in refund
claims that are pending. The tax refunds relate to refund claims
for Pennsylvania sales tax paid by the Debtors on certain
purchases and a Pennsylvania corporate tax refund claim.

In his affidavit, Lee A. Zoeller, a partner in Dechert, stated
that the firm is a disinterested person within the meaning of
the Code. Mr. Zoeller further assured the Court that neither
Dechert, nor any partner or associate of the firm, represents in
these cases any entity having an adverse interest to the Debtors
and in their estates.

Additionally, Mr. Zoeller stated that Dechert has represented,
currently represents, and may represent in the future entities
that are creditors or equity holders in these cases. However,
Mr. Zoeller assured the Court that Dechert has not, and will
not, represent any of such entities in relation to the Debtors
or these cases.

Upon these assurances, Judge Farnan authorized the Debtors'
employment of Dechert retroactively to the Petition Date on the
terms stated in the Application. (Armstrong Bankruptcy News,
Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900)


BUGLE BOY: Completes Sales of Trademarks & Licensing Operations
---------------------------------------------------------------
On April 11, 2001, Bugle Boy Industries, Inc., which filed for
chapter 11 bankruptcy protection on February 1, 2001, completed
the sale of its interests in the assets which made up its
wholesale business and licensing operations, comprised
principally of certain trademarks and tradenames, and its
remaining inventory of casual apparel bearing those marks.  The
sale to Official Bugle Boy, LLC, a consortium of buyers led by
Shottenstein Stores Corporation, yielded approximately $65
million in cash to the bankruptcy estate.

Upon the sale and, in conjunction with the transfer of its
rights in trademarks and tradenames, Bugle Boy Industries, Inc.
affected a name change to Bluegrass Liquidating Corporation.
Bluegrass will be winding up its going-out-of-business sales at
the remaining "Bugle Boy" retail outlet stores within the month
and anticipates filing a liquidating chapter 11 plan, outlining
its proposed disposition to secured and unsecured creditors,
shortly thereafter.

Questions or comments should be directed to Kenneth C. Henry of
BDO Seidman, LLP the Debtor's acting Chief Executive Officer.
Paul S. Aronzon, Thomas R. Kreller and Scott F. Gautier of
Milbank Tweed Hadley & McCloy LLP are counsel to the Debtor,
Jeff Pomerantz of Pachulski Stang Ziehl Young & Jones represents
the Official Committee of Unsecured Creditors and Peter Gilhuly
of Latham & Watkins represents Official Bugle Boy, LLC.


CHIQUITA BRANDS: New EU Accord Doesn't Solve Debt Problems
----------------------------------------------------------
Chiquita Brands International, Inc. (NYSE: CQB) commented this
week on an agreement between the U.S. Government and the
European Commission regarding their long-standing dispute over
the European Union's banana import regime. Chiquita stated that
this agreement is expected to result in a partial recovery in
future periods of the EU market opportunities previously
available to Chiquita and Latin American producing nations.

However, the Company still intends to proceed with the proposed
restructuring of its parent company debt announced earlier this
year. This restructuring initiative is necessitated by the
cumulative effect on Chiquita of the EU's discriminatory banana
import regimes over the past eight years, as well as the
accelerated weakening of European currencies in recent years.
The announced agreement will provide no compensation to
Chiquita for past damages attributable to previous EU regimes.

The U.S.-EU agreement contemplates a partial redistribution of
licenses for the import of Latin American bananas under a tariff
rate quota system for historical operators that would take
effect on July 1, 2001 and continue through the end of 2005. It
also contemplates movement to a tariff-only system starting in
2006, which will require future consultations between the EU and
banana supplying interests.

Steven G. Warshaw, President and Chief Operating Officer of
Chiquita, said: "Subject to establishment of definitive
regulations for the new regime, we are pleased with this
positive development for Chiquita and Latin American banana
interests. We are grateful to those within the Office of the
U.S. Trade Representative and the affected Latin American
governments who have worked tirelessly to bring about a banana
import regime that is compatible with the EU's international
trade obligations."

Chiquita is a leading international marketer, producer and
distributor of quality fresh fruits and vegetables and processed
foods.


CONFEDERATION TREASURY: Creditors to Get 2nd Fund Distribution
--------------------------------------------------------------
Richter & Partners Inc., in its capacity as Administrator of the
Plan of Compromise and Arrangement concerning Confederation
Treasury Services Limited ("CTSL"), and in its capacity as
Trustee in Bankruptcy of the Estate of CTSL, announced that the
sum of $50,000,000 (Cdn) will be received, on or about April 17,
2001, by The Trust Company of the Bank of Montreal, the
Indenture Trustee, to effect a second distribution to the
holders of Class A Certificates. The receipt of the funds is
subject to the expiration of the applicable appeals period.

"When this matter was settled in 1998, creditors received a
dividend of 72%, in addition to Residue Certificates that would
allow creditors to participate in any surplus that might be
available in the estate," explained Peter Farkas, Vice-
President, Richter & Partners Inc. "As a result of this very
positive development, each creditor to date will have received
112% of the face value of the claims."

The Indenture Trustee will specify April 17, 2001 as the Record
Date for determination of Residue Certificate holders entitled
to receive the distribution. The Indenture Trustee will also set
May 1, 2001 as the Distribution Date for the disbursement of the
funds.

Richter & Partners Inc. is a leader in the field of financial
reorganization and insolvency, with offices in Toronto, Montreal
and Calgary. It is part of Richter, Usher & Vineberg, one of
Canada's largest independent accounting, business advisory and
consulting firms.


CYBEX INTERNATIONAL: Obtains Waiver Of Covenant Defaults
--------------------------------------------------------
Cybex International, Inc. (AMEX: CYB), a leading exercise
equipment manufacturer, reported that it has reached an
amendment with its banks which, among other things, waives the
company's previously announced failure to meet certain financial
covenants.

Mr. John Aglialoro, Chairman and acting Chief Executive Officer
of the company, stated: "Fleet Boston, First Union and Summit
Banks, have stepped up and given Cybex a great deal of new
incentive. We are confident that the Credit Agreement will
provide adequate liquidity to maximize growth for the balance of
2001."

The company also reported that it will be profitable for its
first quarter ended March 31, 2001. Mr. Aglialoro stated: "First
quarter results will illustrate that our restructuring plan has
already achieved substantial cost savings, producing a more
efficient company. We are now enacting initiatives which will
rebuild the company, including aggressive marketing of new
product introduction in the fourth quarter, and two new profit
centers: Cybex Capital Corporation, (CCC), which provides
equipment funding for customers, and Cybex Service Corporation,
(CSC), which will restructure service and parts activities to
provide 24/7 service directly to the end-user. The company
expects to report full first quarter results April 27, 2001."

Cybex International, Inc. is a leading manufacturer of premium
exercise equipment for consumer and commercial use. Cybex and
the Cybex Institute, a training and research facility, are
dedicated to improving exercise performance based on an
understanding of the diverse goals and needs of individuals of
varying physical capabilities. Cybex designs and engineers each
of its products and programs to reflect the natural movement of
the human body, allowing for variation in training and assisting
each unique user -- from the professional athlete to the
rehabilitation patient -- to improve their daily human
performance. For more information on Cybex and its product line,
visit the company's web site at www.eCybex.com.


E.SPIRE COMMUNICATIONS: Court Okays Plan To Borrow $25 Million
--------------------------------------------------------------
U.S. Bankruptcy Judge Peter J. Walsh approved a plan by E.Spire
Communications Inc. to borrow $25 million to fund operations,
according to the Washington Times. Another hearing will be held
on May 16, when the judge could allow E.Spire to borrow an
additional $60 million. Bradley E. Sparks, E.Spire's chief
financial officer, said the $85 million in debt financing that
the company expects to gain access to will last until it emerges
from bankruptcy. "That's our source of cash for operating
through bankruptcy," he said.

E.Spire, based in Herndon, Va., will use the court-approved
financing to pay expenses incurred since it filed for chapter 11
protection on March 22. When it filed for bankruptcy, the
company had secured a line of credit for up to $85 million from
a group of lenders led by Foothill Capital Corp., Ableco Finance
LLP and E.Spire Chairman and Acting Chief Executive George F.
Schmitt. E.Spire listed $911.2 million in assets and $1.47
billion in debts, according to documents filed with the
bankruptcy court. Chase Manhattan Bank is E.Spire's largest
creditor, and the company owes the bank $905 million. It owes
Metromedia Fiber Network Services Inc. about $6.7 million and
telecommunications-equipment maker Lucent Technologies about
$6.4 million. (ABI World, April 11, 2001)


EQUALNET: Completes Sale Of Selected Assets To CCC GlobalCom
------------------------------------------------------------
Equalnet Communications Corp. (OTC Bulletin Board: ENET)
completed the sale of selected assets to CCC GlobalCom
Corporation (OTC Bulletin Board: CCGC). The assets sold
represented substantially all of the operating assets of
Equalnet and its operating subsidiaries, but excluded certain
items such as capital stock of subsidiaries and certain
litigation matters. The Sale was conducted pursuant to an Order
of the U.S. Bankruptcy Court. Consideration for the Sale
included a cash payment of $500,000 and the assumption of
approximately $7,500,000 of indebtedness owed by Equalnet to RFC
Capital.

Equalnet currently has no operations and no employees. The
company intends to seek buyers for its remaining assets and to
perform other tasks necessary to wind up its business, including
filing a Plan of Liquidation with the Bankruptcy Court. In
connection with its plan of liquidation, Equalnet may seek
investors to contribute operating assets to EqualNet in exchange
for newly-issued shares of Equalnet securities. Equalnet
believes that any such transaction may greatly dilute the
percentage ownership of existing shareholders and will likely
result in the investor owning substantially all of Equalnet's
then outstanding equity securities. Equalnet does not currently
expect that shareholders of the company will receive any
distributions under a Plan of Liquidation.

Prior to the Sale, Ron Salazar resigned as a director of
Equalnet and Steven R. Fredrich was appointed to the Board of
Directors. At the time of the Sale, Equalnet received the
resignations of its Chief Operating Officer and of its Executive
Vice President, General Counsel and Secretary.


FARMLAND INDUSTRIES: Fitch Cuts Senior Implied Rating To `BB-'
--------------------------------------------------------------
Fitch downgrades its rating of Farmland Industries, Inc.'s
senior implied rating to `BB-' from `BB+' and its cumulative
preferred stock rating to `B-' from `BB-'.

The company's ratings were also placed on Rating Watch Negative.
The Rating Watch status will be resolved following the
consummation of several strategic actions and initiatives
planned by the company and Fitch's assessment of the impact of
those actions on the company's operations and capital structure.

The rating downgrade reflects the decline in the company
operating earnings, cash flow, and credit statistics due
primarily to a severe cyclical decline in its crop nutrients
business. Over the past 36 months, Farmland's crop nutrient
operations was negatively impacted by a long-term global demand
and supply imbalances that has resulted in an extended cyclical
trough in margins. In fiscal 1997, the company's crop nutrient
division generated $200 million of operating income contributing
approximately 70% of the company's total operating income. That
same division generated operating income of $20 million for the
2000 fiscal year. Fitch believes that any potential industry
restructuring will impact those companies at the lower end of
the credit spectrum disproportionately.

The company strategic plan is to restructure its asset base,
which among other things include the divestiture of non-core
assets with the proceeds to be used to pay down debt. Farmland
intends to sell its Coffeyville refinery and divest of its
interest in other assets. The company estimates that these
transactions will close within its third and fourth quarter.
Nonetheless, the timing transactions and the amount are
uncertain. Further debt reduction is also anticipated through a
permanent reduction of inventories.

Farmland's debt structure is primarily comprised of a $750
million credit facility that expires May 9, 2001, and
subordinated debt certificates. Borrowings under the credit
facility are secured by a substantial portion of the company's
account receivable, inventories, and fixed assets. Furthermore,
allowable borrowings under the revolver are determined through
an asset-based formula and derived in part by a percentage of
accounts receivable and inventory. Debt levels at Nov. 30, 2000,
were approximately $1.4 billion, of which approximately $760
million is short-term. In the near term the company is likely to
face heightened refinancing risk. For the 12 months ended Nov.
30, 2000, the company's EBITDA-to-interest was 1.4 times (x) and
its total debt-to-EBITDA was 8.4x. EBDITA includes cash
distributions from joint ventures.

Farmland is the largest farmer-owned regional cooperative in the
United States with sales of approximately $12.2 billion in
fiscal 2000. The company operates five main businesses including
crop production, petroleum refining and marketing, feed, beef
and pork processing, and grain marketing. Based on total
production capacity, the company is one of the largest producers
of anhydrous ammonia fertilizer in the United States. Other
businesses include pork and beef processing in which the company
is the sixth largest pork processor in United States in terms of
daily slaughter capacity and the fourth largest beef processor.


FMAC: Fitch Downgrades Certain Transactions To D From C
-------------------------------------------------------
Fitch downgrades class E of FMAC Loan Receivables Trust 1997-C
and FMAC Loan Receivables Trust 1998-B class E from 'C' to 'D'.
The rating action is a direct result of a missed interest
payment, which Fitch has been informed, will occur on the next
payment date. Fitch's rating scale addresses timely interest and
ultimate principal on the bonds and the missed interest payment
will cause an automatic default to the affected class or
classes.

Fitch continues to be concerned with the performance of all the
FMAC transactions and is closely monitoring their performance.


FRUIT OF THE LOOM: Proposes Key Employee Incentive Program
----------------------------------------------------------
Fruit of the Loom, Ltd.'s Joint Plan of Reorganization proposes
that, after the Effective Date, 6% of the new common stock, on a
fully diluted basis, will be reserved for certain key employees.
The Board of Directors will establish a program to identify key
employees, make option allocations and implement the
distributions within six months of the effective date. The
options will:

      (a) vest three years from the date of issuance, subject to
          certain triggering events,

      (b) have a term of ten years, and

      (c) be priced in accordance with the fair market value of
          the reorganized firm as determined by the Board. (Fruit
          of the Loom Bankruptcy News, Issue No. 26; Bankruptcy
          Creditors' Service, Inc., 609/392-0900)


GENESIS HEALTH: Court Allows Manor Care To Enforce Arbitration
--------------------------------------------------------------
Previously, to offer NeighborCare Pharmacy Services, Inc. of the
Genesis Health Ventures, Inc. & The Multicare Companies, Inc.
debtors a "breathing space" to focus on initial reorganization
activities, Judge Walsh denied Manor Care's motion to enforce
arbitration. Manor Care refiled its motion within the 90 days'
period of leave granted pursuant to Judge Walsh's oral decision.

After hearing, Judge Judith H. Wizmur of U.S. Bankruptcy Court
for the District of New Jersey, sitting by Designation, issued
an Opinion marked "Not for Publication" granting Manor Care's
motion to enforce the mandatory arbitration between the parties
and also relief from the stay to complete arbitration. Judge
Wizmur directed that the Debtor's motion to assume the Master
Service Agreements will be considered by the Bankruptcy Court
following the completion of the arbitration proceeding.

In her Opinion and Order, Judge Wizmur drew attention to the
Federal Arbitration Act, 9 U.S.C. Section 1 et seq, which
declares that arbitration agreements are "valid, irrevocable,
and enforceable, save upon such grounds as exist at law or in
equity for the revocation of any contract." 9 U.S.C. section 2.
The United States Supreme Court, Judge Wizmur notes, has
affirmed that the Arbitration Act requires rigorous enforcement
of agreements to arbitrate, a requirement that is "not
diminished when a party bound by an agreement raises a claim
founded on statutory rights." Shearson/American Express. Inc. v.
McMahon, 482 U.S. 220, 226, 107 S. Ct. 2332, 2337, 96 L.Ed.2d
185 (1987). The Judge further notes that a party opposing
arbitration may overcome the mandate to enforce arbitration
agreements by showing "contrary congressional command", either
from a statute's text or legislative history, or from an
"inherent conflict between arbitration and the statute's
underlying purposes." Id. at 226-27, 107 S. Ct. at 2337-38.

Judge Wizmur also drew attention to In Hays and Co. v. Merrill
Lynch. Pierce. Fenner & Smith, Inc., 885 F.2d 1149 (3d Cir.
1989), where the Third Circuit granted a motion brought by
certain defendants to compel arbitration of claims asserted by a
Chapter 11 trustee in a pending district court proceeding. The
court held that in a non-core proceeding brought by a Chapter 11
trustee to enforce a claim of the bankruptcy estate, the
district court lacks authority and discretion to deny
enforcement of a mandatory arbitration clause, absent a showing
by the trustee that the text, legislative history, or purpose of
the Bankruptcy Code conflicts with the enforcement of the
arbitration clause. The Judge further cites In re
Crysen/Montenay Energy Co., 226 F.3d 160, 166 (2nd Cir. 2000)
(petition for cert. filed Jan. 11, 2001), and In re National
Gypsum Co., 118 F.3d 1056, 1066 (5th Cir. 1997) (bankruptcy
courts "must stay non-core proceedings in favor of
arbitration").

Judge Wizmur pointed out that the burden is on the party
opposing arbitration to show that Congress intended to preclude
arbitration to enforce a specific statutory right under the
Bankruptcy Code. Id. at 1156.

The Judge further cited:

"In Hays, the Chapter 11 trustee failed to identify any text or
legislative history of the bankruptcy laws evidencing
congressional intent to override the Federal Arbitration Act in
the context of a pre-petition non-core adversary suit brought to
enforce a claim of the bankruptcy estate. As to the purpose of
the Bankruptcy Code, the court also rejected the trustee's
contention that the Code's design to consolidate jurisdiction
and supervision of the debtor and the debtor's estate in the
bankruptcy court conflicts with arbitration, reflecting that
"Congress did not envision all bankruptcy related matters being
adjudicated in a single bankruptcy court." Id. at 1157. Any
adverse impact on related core proceedings, including the
trustee's non-arbitrable avoidance actions against the same
defendants, such as inefficient delay, duplicative proceedings
or collateral estoppel effect, was not shown by the trustee to
be substantial enough to override the policy favoring
arbitration. Id. at 1158."

Judge Wizmur opined that Manor Care successfully contended that
the pre-petition contract claims at issue in the pending
arbitration are unquestionably non-core, meaning that the claims
did not arise under Title 11, and did not arise in a case under
Title 11. 28 U.S.C. section 157(b)(1). The claims, the Judge
finds, are based solely on state law, arose prior to and
independent of NeighborCare's bankruptcy case, do not involve
substantive rights created by the bankruptcy court and would
exist outside of bankruptcy. See. E.g., In re Wood, 825 F.2d 90,
97 (5th Cir. 1987). As such, the parties' respective Master
Agreement claims are analogous to the non-core contract claims
at issue in Hays, the Judge observes, and the application of
Hays to require enforcement of the contractual arbitration
clause is compelling

Judge Wizmur agreed to the debtor's contention that its motion
to assume the Master Service Agreements, which are critical
revenue sources for the debtor and are of extraordinary value to
the debtor's estate, is a core proceeding requiring adjudication
by the bankruptcy court. According to the debtor, because many
of the issues that the court must determine on the assumption
motion, such as whether there are any breaches or defaults, and
if so, the amount needed to cure, overlap with the arbitration
issues, the court need not and should not defer to arbitration
on these issues.

However, the Judge finds that the debtor misapprehends the
nature of the necessary adjudicative process to resolve the
disputes between the movant and the debtor. A resolution of such
issues as whether the agreements between the parties terminated
pre-petition, whether the contracts were breached or in default,
and the extent of default, if any, requires exclusive focus on
the contract terms and applicable state law, the Judge said. The
Judge noted that protection of bankruptcy constituencies or the
"global prospective" of the bankruptcy court cannot be factored
in to resolve these questions but issues to be resolved in the
context of the section 365 assumption motion, such as prompt
cure, compensation for actual pecuniary loss, and adequate
assurance of future performance, do require "a global
perspective on the bankruptcy case", and should be resolved by
the bankruptcy court.

The Judge finds that as in Weinstock, the debtor has failed to
present any facts or circumstances to show how arbitration of
the contract disputes would conflict with the provisions or
purpose of the Bankruptcy Code. The contract disputes, the Judge
said, must be resolved by arbitration, whereupon the debtor's
motion to assume the Master Service Agreements will be
considered by the bankruptcy court. Entitlement to Relief from
Stay.

With respect to relief from the automatic stay requested by
Manor Care, Judge Wizmur said that she can readily conclude that
the balancing test customarily performed in these circumstances
dictates the conclusion that cause has been established to
justify Manor Care's request. In the opinion of the Judge, the
hardship to Manor Care caused by maintenance of the stay
considerably outweighs the hardship to the debtor caused by
modification of the stay, and the non-debtor party has a
probability of prevailing on the merits of its case. The Judge
noted that arbitration was the chosen forum of adjudication by
the debtor prior to the filing of the petition, that the
discovery in the case, as well as pretrial matters such as
dispositive motions, are nearly complete, and that the matter is
nearly ready for trial. Moreover, the debtor has had the benefit
of a "breathing spell" from the date of filing, June 22, 2000.

Although the debtor, together with related entities, is now
poised to undertake negotiations with parties in interest
regarding a reorganization plan, and a significant arbitration
hearing may distract NeighborCare's management somewhat, it
should be noted that special trial counsel, Paul Weiss of
Rifkind, Wharton and Garrison, who represented the debtor at
arbitration proceedings pre-petition, was retained by debtor to
continue to litigate the arbitration matter against Manor Care,
the Judge said. The issues to be resolved are a predicate to the
resolution of debtor's quest to assume the Master Agreements, as
well as to resolve Manor Care's administrative claims, rather
than prejudice the debtor, the Judge opined.

The Judge acknowledged that certain issues in dispute between
the parties, such as pricing methodology and Vitalink's option
to service other Manor Care facilities, may have post-petition
implications, but points out that there should be no perceived
limitation to a resolution of these issues in arbitration,
subject to enforcement, implementation and assumption issues to
be subsequently addressed in the bankruptcy court. The Judge
further noted that resolution of these issues may substantially
benefit the debtor going forward reminding that the relief
sought by Manor Care in the context of the arbitration
proceeding is simply to adjudicate the parties' Master Agreement
claims. Any enforcement or implementation questions will abide
by further bankruptcy court order, the Judge said.

Addressing the issue of pre-petition termination, over which the
debtor fears that if the arbitrator "allow[ed] Manor Care to
terminate the Master Service Agreements, the Debtors and their
estates stand to be deprived of valuable contract rights which
are otherwise protected by section 365." Judge Wizmur pointed
out that the arbitrator will presumably decide whether the
contracts actually terminated pre-petition. If so, then there is
nothing for the debtor to assume. If not, then the debtor's
motion to assume the agreements must be considered. The
arbitration, the Judge pointed out, is not "an attempt to strip
the debtors of their rights under section 365 to cure and assume
long-term contracts," as the debtor suggests, but rather an
expeditious and efficient forum for the resolution of the non-
core contract disputes between the parties, which will serve as
the basis for resolution of the debtors' assumption motion.

Given the hardship cited by Manor Care, Judge finds that Non-
Debtor Hardship Outweighs Debtor Hardship.

With respect to a third balancing factor cited by the movant in
favor of arbitration is judicial economy, Judge Wizmur pointed
out that Judge Renfrew, a former district court judge, has
managed the case for more than a year, and is "well along the
judicial learning curve in the proceeding." No special
bankruptcy expertise is required, Judge Wizmur said.

On the issue of the balancing of the positions of both parties,
Judge Wizmur noted that the most persuasive here is the basic
need, acknowledged by both parties, to resolve the underlying
contract issues between the parties expeditiously, for the
benefit of both sides.

The opportunity to adjudicate the matter promptly, the Judge
concluded, is greater in arbitration than in the bankruptcy
court. Moreover, a well-qualified former district court judge,
serving as arbitrator, has stewarded this complex case from its
inception, through fact and expert discovery, and through
dispositive motions. Because a trial date had been set pre-
petition, the prospect of prompt adjudication and resolution by
arbitration is strong, Judge Wizmur opined. Granting relief from
the stay to permit the parties to resolve the state law
questions in dispute in arbitration, the Judge is convinced, is
the most expeditious and sensible solution.

                Debtors' Motion for Reconsideration

NeighborCare Pharmacy Services, Inc., in its motion for
reconsideration of the Court' Opinion on Manor Care's Motion to
enforce arbitration clause and to grant relief from the
automatic stay, contends that the Court's Opinion can be
construed to have given the arbitrator the power to make a
determination that would preclude the Debtors from exercising
their rights under section 365 of the Bankruptcy Code to assume
three large, long-term supply and service agreements. The Debtor
submits that if this interpretation of the Opinion is what the
Court intended, an order implementing this portion of the
Opinion would constitute a clear error of law.

The Debtor argued that because the contract was in existence on
the petition date and continues in full effect, granting the
arbitrator unreviewable power conclusively to determine
prepetition termination deprives the Debtors of rights
prescribed by section 365 of the Bankruptcy Code.

Further, giving arbitral findings of termination preclusive
effect on a prospective basis violates controlling United States
Supreme Court and Third Circuit precedent, NeighborCare
believes. That precedent, NeighborCare noted, requires the
Bankruptcy Court to consider whether to give preclusive effect
to an arbitration proceeding after the arbitration takes place
in light of the bankruptcy rights at stake at that time.

The Debtor also raised the point that, were the arbitrator to
determine that breaches or defaults occurred, the Debtors have
an express statutory right to attempt to cure them but no forum
exists in arbitration for the Debtors to avail themselves of
this right. Moreover, the arbitrator lacks jurisdiction to hear
a motion to assume the contracts by Debtors, or to address
integral issues such as compensation, cure and adequate
assurance of future performance under the contract, NeighborCare
said in the motion.

      Response of HCR Manor Care to Debtor's Motion for
                    Reconsideration

In response, HCR Manor Care requested that the Court deny
Debtor's motion for reconsideration.

With regard to resolution of the parties' Master Agreement
claims having post-petition implications, Manor Care drew
attention to the Court's statement in Judge Wizmur's Opinion,
that "there should be no perceived limitation to a resolution of
these issues in arbitration ... "

Manor Care also referred to what the Court stated, as mentioned
before, that "The relief . . . is simply to adjudicate the
parties' Master Agreement claims. Any enforcement or
implementation questions will abide by further bankruptcy court
order."

Manor Care noted that by stating this, the Opinion established
the outer bounds of the Arbitrator's adjudicative authority and
delineated the role the Court would play in disposing of
Debtors' Assumption Motion following the completion at the
Arbitration.

Manor Care also pointed out that reconsideration of a previous
judicial decision is an extraordinary remedy that should be
granted only when necessary to correct manifest errors of law or
fact upon which such decision is based. The Opinion, Manor Care
said, which reflects the Court's careful consideration and
proper application of relevant statutory and common law
authority, does not contain any legal error, let alone the
required manifest legal error.

Manor Care further noted that in issuing the Opinion, the Court
is fully in accord with other bankruptcy courts that have
properly recognized that predicate state law determinations by
non-bankruptcy tribunals are entitled to preclusive effect in
the bankruptcy court when deciding core bankruptcy issues. Here
Manor Care cited the case of King David Restaurant, 154 B.R. at
428-29.

                      The Court's Order

The Court granted motion Of Manor Care to enforce arbitration
clause & to grant relief from the automatic stay & denied
Debtors' motion For reconsideration of the Court's Opinion.
(Genesis/Multicare Bankruptcy News, Issue No. 8; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


GREAT LAKES: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Great Lakes Metals, L.L.C.
         4407 Railroad Avenue
         East Chicago, IN 46312

Chapter 11 Petition Date: April 11, 2001

Court: District of Delaware

Bankruptcy Case No.: 01-01367

Debtor's Counsel: Laura Davis Jones, Esq.
                   Pachulski, Stang, Ziehl, Young & Jones, P.C.
                   P.O. Box 8705
                   Wilmington, DE 19899-8705
                   (302) 652-4100


Estimated Assets: $10 Million To $50 Million

Estimated Debts: $10 Million To $50 Million

Debtor's 20 Largest Unsecured Creditors:

Entity                             Claim Amount
------                             ------------
Samuel Son & Company               $2,500,000
345 Salmon Drive
Portage, IN 46368
Fax No. 219-787-8137

Blue Star Funding                   2,209,997
McCook Metals
4900 First Avenue
McCook,IL 60525
Fax No. 708-387-8919


East Chicago Enterprises              582,783
4527 Columbia Avenue
Hammond, IN 46327
Fax No. 773-221-8638

Metalwest                             450,980
210 Leawood Drive
New Century, KS 66031
Fax No. 303-654-0404

Michael Lynch                         429,420
4900 First Avenue
McCook, IL 60525-9838
Fax No. 708-387-8919

Samuel Son & Company                  309,510
345 Salmon Drive
Portage, IN 46368
Fax No. 219-787-8137

Hercules Incorporated                 250,192
P.O. Box 281729
Atlanta, GA 30384-1729
Fax No. 302-594-7660

Great Lakes Processing LLC            230,951

Edgcomb Metals                        224,124

Englewood Electric                    183,405

John Kolleng                          170,850

Lake County Treasurer                 162,500

Crown E.S.A. Inc.                     158,499

McCook Metals                         150,000

Matt Ochalski                         146,030

Noranda Sales, Inc.                   121,940

Nipsco                                 91,180

Amplicon Financial                     80,640

RS Used Oil Services Inc.              80,640

Inland Cutting Products                71,247


HARBOR GLOBAL: Raises $8.5 Million From Sale of Russian Business
----------------------------------------------------------------
Harbor Global Company Ltd. (OTC BB:HRBG) related that its wholly
owned subsidiary, Harbor Far East Exploration, L.L.C., has
entered into a definitive sales agreement with respect to its
gold exploration business conducted by "Tas-Yurjah" Mining
Company, located in the Khabarovsk Territory of the Russian Far
East. Under the terms of the agreement, Harbor Far East
Exploration has agreed to sell its entire 94.5% direct interest
in "Tas-Yurjah" Mining Company to a Russian gold mining and
exploration company for an aggregate purchase price of $8.5
million. Harbor Global expects the transaction to close during
the second quarter of 2001, subject to completion of financing
by the purchaser through a Russian bank.

Harbor Global also announced that it intends to liquidate its
Polish real estate fund, the Pioneer Polish Real Estate Fund,
S.A.. In connection with the liquidation, Harbor Global's wholly
owned subsidiary, PREA, L.L.C., has entered into definitive
agreements with the Fund's unaffiliated investors to purchase
all of the shares held by such investors for an aggregate
purchase price of $1.59 million. The purchase, which is expected
to close during April 2001, and subsequent liquidation will
relieve Harbor Global of its obligation to make capital
contributions to the Fund in the amount of approximately $5.4
million pursuant to the Subscription and Shareholders' Agreement
dated as of October 20, 1999 by and among the Fund and the
investors. The Fund's only asset at the time of liquidation is
expected to consist of cash in the approximate amount of
$250,000, which will be distributed to PREA.

Harbor Global announced further that it has received a payment
in the amount of approximately $2.5 million from Ashanti
Goldfields Teberebie Limited related to the May 2000 sale of the
Teberebie gold mine. The payment represents the first
installment under the promissory note issued in connection with
the purchase agreement between Harbor Global's wholly owned
subsidiary, Pioneer Goldfields II Limited, and Ashanti
Goldfields Teberebie Limited. Under the terms of the purchase
agreement and promissory note, Ashanti Goldfields Teberebie
Limited is obligated to make additional payments to Harbor
Global in the amount of $11.3 million over the next 4 years.
Stephen G. Kasnet, President and Chief Executive Officer of
Harbor Global, stated "We are aggressively pursuing our strategy
of realizing maximum value for our shareholders."

Harbor Global Company Ltd., a Bermuda limited duration company,
was formed in 2000 to liquidate certain assets held by the
former The Pioneer Group, Inc. Harbor Global, which was spun-off
to Pioneer shareholders in October 2000, is headquartered in
Boston, Massachusetts and has operations and assets in Russia
and Poland. Harbor Global seeks to liquidate its assets in a
timely fashion on economically advantageous terms. It will
continue to operate its assets as going concern businesses until
they are liquidated.


HARNISCHFEGER: Beloit Settles P&G Administrative Claim Dispute
  -------------------------------------------------------------
Beloit Corporation and Proctor & Gamble Paper Products Company
wish to resolve the dispute over administrative claim filed by
P&G Paper arising from Beloit's proposed rejection of the P&G
Paper agreement. Accordingly, the parties sought the Court's
approval to their Settlement which provides that:

      (1) P&G Paper will be allowed an Administrative Claim
          against Beloit in the amount of $650,000, payable in
          full upon the earlier of (a) the effective date of a
          confirmed plan for Beloit or (b) 60 days from the
          date of the entry of the Court's Order;

      (2) P&G Paper will be allowed a Pre-Petition Unsecured
          Claim against Beloit in the amount of $6 million;

      (3) all other claims that P&G Paper has asserted or could
          assert against Beloit related to the Claim or the
          Complaint are barred;

      (4) Beloit and P&G grant each other mutual releases of all
          obligations related to the matters covered by the
          Settlement;

      (5) P&G Paper covenants and agrees never to file any action
          or actions for performance or seek any damages,
          redress, or recovery of any kind against Valmet
          Corporation relating to the Claim or the Complaint or
          in any way relating to the Non-exclusive Equipment;

      (6) the Non-exclusive Equipment is deemed to have been
          transferred to Valmet Corporation on May 11, 2000, free
          and clear of all claims, liens, encumbrances,
          liabilities, debts, or obligations of any kind.

      (7) Nothing in the Settlement or the order approving the
          Settlement shall be deemed to limit or affect the
          ownership or other rights or claims of P&G Paper with
          respect to the Exclusive Equipment, as defined in the
          Agreement; and

      (8) P&G Paper shall withdraw its Objection to Confirmation
          of the Plan. (Harnischfeger Bankruptcy News, Issue No.
          40; Bankruptcy Creditors' Service, Inc., 609/392-0900)


HEILIG-MEYERS: Focusing on RoomStores Operations, Closing Others
----------------------------------------------------------------
Heilig-Meyers announced that in order to achieve its
restructuring initiatives and maximize creditor recoveries, it
will concentrate on its RoomStore operations and close all
remaining Heilig-Meyers furniture stores. The Company filed a
motion with the Bankruptcy Court seeking the authorization to
close and liquidate the inventory in approximately 375 remaining
Heilig-Meyers stores.

"Since the Company's voluntary Chapter 11 filing in August 2000,
management and the Board of Directors have been exploring
various restructuring alternatives that would result in maximum
recovery to our creditors," said President and Chief Executive
Officer Donald S. Shaffer. "After extensive review of our
operations, in what has proved to be an extremely challenging
retail environment, it was determined that our RoomStore format
should be the centerpiece of our ongoing reorganization
efforts."

Mr. Shaffer said that since the filing the Company completed
various strategic initiatives at the Heilig-Meyers stores aimed
at reducing working capital requirements and improving cash
flow, including the closing of over 400 underperforming stores
and the outsourcing of the Company's customer credit operations.

"Despite our significant progress, we determined that based on
the slowing of the economy and considerable weakening of the
retail market, a successful reorganization of the traditional
Heilig-Meyers furniture stores could not be completed within a
timeframe that would allow us to fulfill our fiduciary
responsibility to our creditors and other stakeholders," he
said.

"The RoomStore format, under which customers may purchase entire
rooms of furniture, complete with accessories and decor items,
has been successful for the Company," Mr. Shaffer said, noting
that the 54 traditional RoomStores are concentrated in
metropolitan markets in Texas, Maryland and Washington D.C. and
generate annual revenues of approximately $300 million. "As we
finalize our restructuring plans and restore the confidence of
our associates and those vendors which supply the RoomStore, we
firmly believe these stores will be well positioned to
effectively compete in today's retail furniture industry. We are
encouraged by the success of our RoomStore operations and the
continued good prospects for the RoomStore format, and will work
diligently to keep them operating at the highest level possible
while we complete our restructuring," said Mr. Shaffer.

He said that 16 traditional Heilig-Meyers stores were converted
to RoomStores since the filing, and the Company is studying the
conversion of additional stores in selected markets. The Company
plans to maintain its regional offices in Dallas, Texas and
Landover, Maryland to support RoomStore operations in those two
markets.

The Company is in the process of finalizing an arrangement with
a third party to conduct going-out-of-business sales at the
remaining Heilig-Meyers stores. Current Heilig-Meyers employees
are expected to staff the stores during the process. The Company
anticipates that the closing sales will be completed by mid to
late summer. The Heilig-Meyers headquarters office in Richmond,
Virginia will continue to provide various support functions for
the ongoing RoomStore operations following the wind-down of
tasks associated with the liquidation of the Heilig-Meyers
stores.

In connection with the restructuring, Mr. Shaffer said the
Company is also involved in discussions with various interested
parties for the sale of its three Homemakers stores.
The Company filed voluntary Chapter 11 petitions in the U.S.
Bankruptcy Court for the Eastern District of Virginia in
Richmond for Heilig-Meyers Company, Inc., on August 16, 2000.


ICG COMMUNICATIONS: NetAhead Junks ThinkLink's Service Contract
---------------------------------------------------------------
ThinkLink Corporation is a communications service provider that
distributes integrated internet and telephone-based messaging
services. By virtue of the ThinkLink contract with ICG NetAhead,
Inc., ThinkLink accesses and utilizes the ICG Communications,
Inc. Debtors' telecommunications network to support the
distribution of its messaging services. The Debtors told
Judge Walsh that they have determined that their contract with
ThinkLink is unprofitable and unnecessary to their
reorganization, and should be rejected in the Debtor's business
judgment.

The pricing structure under the contract is:

                                     Unit of        Billing
Service                   Rate      Measure        Unit
-------                   ----      -------        -------
Inbound calls (DID only) $0.005     Per Minute     6 second
Outbound calls on VolP   $0.025     Per Minute     6 second
Outbound calls on PSTN   $0.045     Per Minute     6 second
8xx (Circuit-switched)   $0.045     Per Minute     6 second
8xx Pay Telephone Access $0.240     Per call       Each

By contract, the Debtor is obligated upon termination to provide
commercially reasonable assistance to ThinkLink in the migration
of its messaging services from the Debtors to other service
providers, and pay for all such migration services until the
migration is complete. Despite the proposed rejection of the
ThinkLink contract, the Debtor will, if requested by ThinkLink,
provide the migration services, provided that ThinkLink agrees
to pay for such services and provides the Debtor with acceptable
assurances of payment.

The Debtor said that this contract is costly to maintain and
unnecessary to its ongoing businesses and operations. Moreover,
the ThinkLink contract is not a source of potential value for
this estate. Therefore, simple rejection will most benefit the
estate and its creditors and parties in interest.

Upon consideration of the Debtor's Motion, Judge Walsh granted
it and authorized the rejection of the ThinkLink contract. (ICG
Communications Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


IMPERIAL SUGAR: Asks For More Time To Decide On Property Leases
---------------------------------------------------------------
Imperial Sugar Company requested Judge Robinson to extend the
time for them to assume or reject their non-residential real
property leases. They admitted that they are parties to various
real non-residential real property leases ranging in size from
single-floor office spaces to leases spanning well over 100
acres. Real property leases, the Debtors claimed, are utilized
for a variety of purposes, including, but not limited to, office
space, warehouse space, building leases, and acreage used for
piling ground. The Debtors allege that they are current on all
postpetition obligations under the leases and will remain so
until these leases are either assumed or rejected.

M. Blake Cleary at Young Conaway Stargatt & Taylor, LLP, in
Delaware, informed Judge Robinson that the Debtors are still in
the process of determining whether to assume or reject the
leases. Because the Debtors have focused their efforts on
various other demands inherent in a large reorganization case,
such as developing a viable reorganization plan, they have not
yet been able to accurately evaluate and weigh the benefits or
burdens to their estates of assuming or rejecting the leases.
Counsel warned that absent such an evaluation, the Debtors would
be unable to articulate factors sufficient to make the required
showing to the Court that they have exercised their reasonable
business judgment in determining whether to assume or reject the
leases. The Debtors assured Judge Robinson that this process of
determining whether to reject or assume the leases will be
completed shortly, in time for the hearing on confirmation of
the Debtors' reorganization plan scheduled for May 2, 2001.

The Debtors believe that they have sufficiently shown to the
Court that cause exists for the extension of the 60-day period
under bankruptcy law, within which they must assume or reject
the leases to and through confirmation of a reorganization plan.
They are convinced that an extension through such time period is
both necessary and in the best interest of the Debtors' estates.

Judge Robinson agreed, and granted the requested extension.
(Imperial Sugar Bankruptcy News, Issue No. 4; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


IMPROVENET: Fails To Comply With Nasdq's Listing Requirement
------------------------------------------------------------
ImproveNet Inc., (NASDAQ: NM: IMPV), a leading Internet-based
home improvement services company, received notification from
the Nasdaq Stock Market, Inc. that it has not maintained the
minimum bid price of at least $1.00 for 30 consecutive trading
days and has not regained compliance during the 90 days provided
under the Nasdaq Marketplace Rules. The minimum bid price
requirements are set forth in Nasdaq Marketplace Rules
4450(a)(5) and 4310(c)(8)(B).

The notice of non-compliance subjects ImproveNet to delisting
from the Nasdaq National Market. The Company, however, has
requested a hearing before a Nasdaq Listing Qualifications Panel
to review the Staff Determination. During such review process,
the Company's securities will continue to be listed on The
Nasdaq National Market.

ImproveNet recently announced a major restructuring to improve
operating efficiencies and support new revenue growth
initiatives to drive profitability, as well as a plan to
repurchase up to $2 million worth of the company's common stock
through public trading. New initiatives to drive revenue growth
in 2001 include an Installed Sales service for home improvement
retailers; a Managed Repair Program to extend the company's
capabilities to service insurance and warranty claims; and
Contractor Marketing services to ImproveNet's network of 30,000
contractors on behalf of manufacturer and retailer partners.


INTEGRATED HEALTH: Bates, Campbell & Amerimed Seek Stay Relief
--------------------------------------------------------------
After Integrated Health Services, Inc. filed an objection to the
motion claiming, among other things, that the proceeds of the
D&O insurance policy are property of the estate, the Claimants
(Timothy O. Bates, Michael Campbell and Amerimed Healthcare,
Inc.) requested, and were provided with a copy of the insurance
policy.

It appears to the Claimants that not only is there insurance
coverage for the claims against Mr. Kovinsky, but also coverage
for the claims asserted against the Debtor in the Florida
Action. In light of that, the Claimants filed an amended motion
to seek relief from the automatic stay to also pursue the claims
against the Debtor in the Florida Action.

The Claimants again asserted that there is no order extending
the automatic stay to the officers of the Debtors. Accordingly,
they do not believe that relief from the automatic stay is
necessary to pursue their claims against Mr. Kovinsky. The
Claimants told Judge Walrath that, in order to avoid any
potential of violating the automatic stay, they move for relief
from the automatic stay to allow them to proceed against Mr.
Kovinsky to judgment and collect on such judgment to the extent
of insurance proceeds or Mr. Kovinsky's personal assets.
(Integrated Health Bankruptcy News, Issue No. 15; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


iNTELEFILM: Receives Notice of Non-Compliance From Nasdaq
---------------------------------------------------------
iNTELEFILM Corporation (Nasdaq:FILM) received notice from Nasdaq
that it is not in compliance with Nasdaq's minimum tangible net
worth requirement and that iNTELEFILM's eligibility for
continued listing of its shares on the Nasdaq National Market is
being reviewed. iNTELEFILM intends to supply the Nasdaq staff
with a specific plan to achieve and sustain compliance with the
listing requirement. If, after the conclusion of the review, the
Nasdaq staff determines that iNTELEFILM's plan does not
adequately address the issues noted, the staff could issue a
decision that iNTELEFILM's shares could be delisted. At that
time, iNTELEFILM would consider appealing the decision to a
Nasdaq Listing Qualification Panel and iNTELEFILM's Nasdaq
listing will continue until all such appeals are exhausted.

"Our non-compliance with Nasdaq's minimum net worth requirement
has been caused by the significant amount of goodwill associated
with our production company acquisitions, operating losses and
write-offs recently taken associated with our corporate
restructuring, and in closing down non-profitable operations. We
intend to vigorously pursue continued listing of our shares on
Nasdaq by presenting a solid case for the future of the company.
We are currently exploring numerous opportunities to maximize
shareholder value and are exploring the possibility of moving to
the Nasdaq small cap exchange," said Christopher T. Dahl, CEO of
iNTELEFILM.

If iNTELEFILM shares do not continue to be listed on the Nasdaq
Stock Market, trading, if any, would be conducted in the over-
the-counter market in the so-called "pink sheets" or on the OTC
Bulletin Board, which was established for securities that do not
meet the Nasdaq Stock Market listing requirements. Consequently,
selling iNTELEFILM shares would be more difficult because
smaller quantities of shares could be bought and sold,
transactions could be delayed, and security analyst and news
media coverage of iNTELEFILM may be reduced. These factors could
result in lower prices and larger spreads in the bid and ask
prices for iNTELEFILM shares. There can be no assurance that
iNTELEFILM shares will continue to be listed on the Nasdaq Stock
Market.

                     About iNTELEFILM

iNTELEFILM Corporation FILM, based in Minneapolis, is a service
provider for the television commercial production industry,
offering extensive production capability and the exclusive
services of established industry talent. Individual companies
managed under the iNTELEFILM umbrella include Chelsea Pictures,
New York, Los Angeles and Sydney, Australia; Curious Pictures,
New York and San Francisco; DCODE, New York; and webADTV, Inc.,
Minneapolis. iNTELEFILM trades on the Nasdaq National Market
under the symbol "FILM." Additional information on the company
can be found in the company's filings with the Securities and
Exchange Commission and on its Web site: www.intelefilm.com.


KRAUSE'S FURNITURE: Accountants Issue Qualified Opinion
-------------------------------------------------------
Krause's Furniture Inc. (Amex: KFI) filed an amendment to its
Form 10-K filed on April 10, 2001.

On April 10, 2001, the company filed a Form 10-K with the
Securities and Exchange Commission for its fiscal year ended
December 24, 2000, which omitted an independent public
accountant's opinion.

Up to the time of the filing the company was seeking an
additional capital investment and waivers and consents from
certain of its creditors which would improve the company's
liquidity and prevent the holders of certain of the company's
long term indebtedness from having the current right to
accelerate payments.

The waivers were required to allow the company to continue to
classify certain of its indebtedness as long term, and the
additional investment and waivers were required to satisfy the
company's auditors that they need not qualify their opinion with
a statement as to the company's ability to continue as a going
concern.

At the time of the filing, the company had an oral commitment to
make the additional investment and the creditors had agreed in
principle to the waivers and consents, but despite every effort
on behalf of all of the parties, the parties had not completed
all necessary documentation.

The company amended its 10-K filing to include the accountants
qualified opinion, a statement on the negotiations of
documentation of the waivers and consents and additional
investment, and a reclassification of certain of the company's
long term debt as current liabilities.

When the waivers and consents are completed, the company plans
to reissue its financial statements with its long term debt
reclassified as originally stated and will request its auditors
to reissue their opinion without the going concern
qualification. The company's auditors, however, have made no
commitments to the company concerning the reissuance of their
opinion and have only indicated that they will review the final
documentation, if and when it is available.

On April 11, 2001, the American Stock Exchange halted trading of
the company's Common Stock because the company's Form 10-K filed
on April 10, 2001 lacked an independent public accountant's
opinion. The company has been in discussions with officials of
the AMEX to have AMEX resume trading of the company's Common
Stock.

Krause's Furniture Inc., with headquarters in Orange County,
California, is a leading manufacturer and retailer of custom-
crafted furniture which it sells under the names KRAUSE'S(R) and
CASTRO CONVERTIBLES(R) through 98 company-owned retail showrooms
in 14 states. The company also operates a division, under the
name CastroContract, that specializes in sales to institutional
customers. Further information may be found at either
www.krausesfurniture.com or www.castroconvertibles.com.


LERNOUT & HAUSPIE: Names Tim Ledwick as Chief Financial Officer
---------------------------------------------------------------
Lernout & Hauspie Speech Products N.V. (EASDAQ: LHSP, OTC:
LHSPQ), a world leader in speech and language technology,
products, and services, announced that Tim Ledwick has been
appointed Chief Financial Officer of the Company, reporting to
President and Chief Executive Officer Philippe Bodson. Mr.
Ledwick will assume immediate responsibility for managing the
global financial operations of L&H, including financial planning
and reporting, tax, treasury, risk management, investor
relations and mergers and acquisitions.

Mr. Ledwick joins L&H from Cross Media Marketing Corporation, a
New York-based direct marketing company, where he served as
Chief Financial Officer. Prior to Cross Media Marketing
Corporation, Mr. Ledwick was Senior Vice President and Chief
Financial Officer of Cityscape Financial Corporation. He has
also held financial and accounting positions at River Bank
America, GTE Corp. and KPMG.

Philippe Bodson, Lernout & Hauspie's President and CEO, said:
"Tim brings over two decades of domestic and international
financial management experience, as well as significant
expertise in the area of corporate reorganizations. He also
brings with him invaluable leadership as well as team-building
and technical skills, which will be instrumental in helping
restore L&H to financial health and to continue leading the
speech and language technology marketplace."

"I'm excited to be joining a leader in the promising speech and
language technology industry," said Mr. Ledwick. "I welcome the
opportunity to address the challenges, financial and otherwise,
that L&H faces today, and look forward to assisting Philippe and
the rest of the management team in developing and implementing
L&H's recovery plan."

Mr. Ledwick holds an M.S. degree in Finance from Fairfield
University, and a B.S. degree in Accounting from George
Washington University. He is a Certified Public Accountant and
is a member of the Connecticut Society of Certified Public
Accountants and the AICPA.


LIFE FINANCIAL: Nasdaq Intends To Delist Shares On April 16
-----------------------------------------------------------
LIFE Financial Corporation (Nasdaq:LFCO), announced that on
April 6, 2001, Nasdaq notified the Company that the Company did
not demonstrate its ability to sustain compliance within the 90
day grace period referred to in their notification on January 5,
2001.

On January 5, 2001, Nasdaq notified the Company that its common
stock failed to maintain a minimum bid price of $1.00 over the
previous 30 consecutive trading days as required by the Nasdaq
National Market under the Marketplace Rules. In accordance with
the Marketplace Rules, the Company was provided 90 calendar
days, or until April 5, 2001, to regain compliance with the
Rules. The Company was notified that its securities will be
delisted from the Nasdaq National Market at the opening of
business on April 16, 2001.

The Company intends to appeal Nasdaq's determination to the
Nasdaq Listing Qualifications Panel. The appeal will stay the
delisting of the Company's securities pending the Panel's
decision.

In addition, Nasdaq had previously notified the Company on March
20, 2001 that the Company's common stock has failed to maintain
a minimum market value of public float of $5,000,000 over the
last 30 consecutive trading days. The Nasdaq notification stated
the Company has until June 18, 2001 to regain compliance with
the minimum market value of public float rule. If at anytime
before June 18, 2001, the market value of the public float of
the Company's common stock is at least $5,000,000 for a minimum
of 10 consecutive trading days the Nasdaq staff will make a
determination as to compliance with the rule. If the Company is
unable to demonstrate compliance with the rule on or before June
18, 2001, or has not submitted an application to transfer to The
Nasdaq SmallCap Market, Nasdaq will provide the Company with
written notification that its securities will be delisted. At
that time the Company may appeal the decision to the Nasdaq
Listing Qualifications Panel.


LOEWEN GROUP: Agrees With Nix To Catch-Up Mortgage Payment
----------------------------------------------------------
The Loewen Group, Inc. and James P. Nix and Nix Realty sought
and obtained the Court's approval of the agreement between them,
by way of a Stipulation and Order, with respect to a Mortgage
and Promissory Note on which Loewen (Alabama) ceased making
payments after the Petition Date. On the Petition date, the
outstanding balance under the Note was $179,665.46.

The Promissory Note, dated April 8, 1994 was delivered by RFH,
Inc., predecessor in interest to Debtor Loewen (Alabama), L.P.
in connection with an Asset Purchase Agreement among LGII,
Memory Gardens, Inc. d/b/a Fairhope Memory Gardens and James P.
Nix pursuant to which LGII purchased the assets of a cemetery
business owned and operated by James P. Nix.

The Note was in the original principal amount of $371,721.00 and
bearing interest at a rate of 8% per annum, payable to Memory
Gardens, Inc., predecessor in interest to Nix Realty, Inc., and
James P. Nix (the Movants). The Promissory Note obligates Loewen
(Alabama) to make monthly payments of principal, in the amount
of $3,097.67, and accrued interest to the Movants through April
2004. In addition, LGII entered into a guaranty, pursuant to
which it guaranteed the payments to be made to the Movants under
the Promissory Note. In order to secure the payment obligations
under the Promissory Note, RFH executed a mortgage on certain
real property in favor of the Movants.

On or about December 8, 1999, James P. Nix filed proof of claim
numbered 2442 against the chapter 11 estate of LGII asserting a
secured claim in the amount of $179,665.46 plus an unliquidated
amount under the Promissory Note, the Mortgage and the
Promissory Note Guaranty. In addition, also on or about December
8, 1999, Nix Realty filed proof of claim numbered 2440 against
the chapter 11 estate of LGII asserting a secured claim in the
amount of $179,665.46 plus an unliquidated amount under the
Promissory Note, the Mortgage and the Promissory Note Guaranty.
In Claim No. 2440 and Claim No. 2442, the Movants each asserted
an entitlement to interest, legal fees and costs incurred after
June 1, 1999, along with interest that accrued during May 1999.
The Movants have not filed a proof of claim against Loewen
(Alabama) in respect of claims under the Promissory Note.

On or about December 17, 1999, the Movants filed their Motion
for Relief from the Automatic Stay or in the Alternative, for
Adequate Protection. By the Motion, among other things, the
Movants sought relief from the automatic stay to allow them to
pursue their remedies under the Promissory Note and the
Mortgage.

To resolve the matters, the Stipulation Order provides that:

      (1) Catch-Up Payment will be made by the Debtors to the
Movants in the amount of $7,310.52, which is equal to the amount
of interest at the applicable non-default rate for the period
from August 1, 2000 through and including January 31, 2001.

      (2) Future Payments will be made by the Debtors, beginning
on March 1, 2001, on the first business day of each month, each
in the amount of $1,218.42, representing the amount of the
interest for the preceding month on the outstanding principal
balance, calculated at the applicable non-default rate until the
entry of an order of the Court confirming a plan or plans of
reorganization in the Debtors' chapter 11 cases.

      (3) Future Payments shall be considered timely so long as
they are made on or before the 10th calendar day of the
applicable month.

      (4) The Catch-Up Payment and the Future Payments
(collectively, the Payments) shall be credited to the Debtors'
obligations to the Movants under the Promissory Note and the
Promissory Note Guaranty.

      (5) The Movants waive any right that they may have under
the Loan Documents to calculate, on account of late payment of
installment:

          (a) interest at any "default" or "penalty" rate
              exceeding the applicable non-default rate; and

          (b) any late fees or charges, prepayment premiums,
              acceleration fees, premiums or penalties or
              "interest on interest."

      (6) The Movants and the Debtors reserve their rights
concerning:

          (a) a determination of the value of the Movant's
              collateral; and

          (b) any contractual or statutory rights that the
              Movants may have under section 506(b) of the
              Bankruptcy Code or other applicable law to assert
              and be paid a claim for reasonable attorneys' fees,
              costs or charges.

      (7) The parties agree that:

          (a) the outstanding principal balance under the
              Promissory Note is $179,665.46; and

          (b) the interest that has accrued under the Promissory
              Note for the period from June 1, 1999 through and
              including July 31, 2000 is equal to $17,057.88. The
              June 1999 - July 2000 Interest will be payable,
              without interest, pursuant to the Confirmation
              Order or such other further order of the Court
              addressing the obligations arising under the
              Promissory Note.

      (8) Claim No. 2440 is deemed asserted by James Nix and Nix
Realty jointly against Loewen (Alabama) as a secured claim in
respect of the P Promissory Note and the Mortgage in the amount
of $196,723.34 (that is, the aggregate agreed amount of the
outstanding principal balance under the Promissory Note and the
June 1999 - July 2000 Interest), plus any amounts to which the
Movants are or become entitled under the documents, section
506(b) of the Bankruptcy Code and other applicable law.

      (9) Claim No. 2442 is deemed asserted by James Nix and Nix
Realty jointly against LGII as an unsecured, nonpriority claim
in respect of the Promissory Note Guaranty in the amount of
$179,665.46 (that is, the agreed amount of the outstanding
principal balance under the Promissory Note).

     (10) The Debtors' tights to object to Claim No. 2440 and
Claim No. 2442 on any and all applicable factual or legal
grounds, other than that such claims were not timely filed, are
expressly preserved.

     (11) So long as the Debtors are in compliance with the terms
of this Stipulation and Agreed Order, the Movants shall not seek
any other or further relief under section 362 of the Bankruptcy
Code.

     (12) Notwithstanding the above, after January 1, 2002, the
Movants may seek further relief from the automatic stay in
respect of the obligations under the Promissory Note by the
filing of a motion with the Court, to be heard on not fewer than
30 days' notice. Upon the filing of such a motion, the Debtors'
obligation to continue to make Future Payments to the Movants
shall cease. (Loewen Bankruptcy News, Issue No. 36; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


LSI LOGIC: Closing Colorado Springs Factory in August
-----------------------------------------------------
In response to the adverse economic climate and the widespread
inventory correction in worldwide communications and storage
markets, LSI Logic (NYSE: LSI) plans to close its Colorado
Springs manufacturing facility.

The closure of the 1635 Aeroplaza Drive factory will take place
in August. The facility, which commenced manufacturing in 1983,
uses mature process technologies. Approximately 500 employees
will be impacted by the decision. Many of these employees will
be offered transfers and the balance will receive a competitive
severance package.

"This decision is precipitated by the weakening national
economy, sharp decline in end-demand and the build-up of
inventory in the supply chain," said Wilfred J. Corrigan, LSI
Logic chairman and chief executive officer. "The mature
technologies utilized by the Colorado Springs facility have been
particularly impacted by the decline in the overall economy. We
are consolidating our manufacturing capacity at our two major
sites in Gresham, Oregon and Tsukuba, Japan."

The company estimates it will record restructuring and other
charges of approximately $120 million to $150 million for fixed
asset write-downs, severance, direct exit costs and other
expenses associated with the closure of the Colorado Springs
facility. The company is in the process of refining its
estimates for the charges. The restructuring charge will be
recognized in the second quarter, and other related charges will
be incurred in the second and third quarters of 2001.

Joe Zelayeta, LSI Logic executive vice president for Worldwide
Operations, said that LSI Logic will have more than adequate
world-class capacity to meet the anticipated demand for its ASIC
and standard product solutions.

The affected employees will be provided with a competitive
severance package and outplacement assistance. Some employees
will be offered relocation to the company's manufacturing
facility in Gresham, Oregon.


LTV CORPORATION: Judge Okays New DIP Facility Despite Objections
----------------------------------------------------------------
The Debtors, LTV Steel Company, VP Buildings, Inc., Georgia
Tubing Corporation, and Copperweld Corporation, through their
counsel Bruce Bennett, Bennett J. Murphy, and Kirk D. Dillman of
the Los Angeles firm of Hennigan, Bennett & Dorman, have brought
a second, separate Motion seeking Judge Bodoh's approval of a
proposed DIP facility, including repurchases of inventory and
accounts receivable from nondebtor affiliates, and settlement of
adequate protection claims of the receivables lenders and the
inventory lenders.

The purpose of the replacement DIP facility is to provide
financing to enable the Debtors to continue operations, and also
to provide vehicles for the Debtors and the Inventory Lenders
and the Receivables Lenders, including Abbey, to resolve the
contentious disputes that have arisen in these bankruptcy cases
regarding the Debtors' rights in the inventory and receivables
generated by the operating Debtors. After reviewing for Judge
Bodoh the respective positions taken by the Debtors and the
Lenders, Mr. Bennett reminded Judge Bodoh that, as a practical
matter, the Debtors need additional postpetition financing to
meet their working capital requirements during these cases, and
told Judge Bodoh the proposed facility meets those needs. One
facility, to be funded by the Inventory Lenders and the
Receivables Lenders, will be used by the Debtors to repurchased
the Receivables and Inventory that the Inventory Lenders and the
Receivables Lenders assert were sold and used by the Debtors,
along with provision for letters of credit for working capital
needs. A second facility, to be provided by Abelco Finance LLC,
will be in an amount necessary to meet the Debtors' incremental
working capital requirements.

Mr. Bennett asserted that Judge Bodoh's approval of these
facilities will provide a substantial benefit to the Debtors,
their estates, and the creditors by permitting the Debtors to
achieve their immediate and short-term business objectives
through (i) enabling the Debtors to use existing account
receivables and inventory to operate the Debtors' business so as
to avoid a shutdown of the companies and the resulting loss of
17,500 jobs, and (ii) providing the Debtors with more tine to
implement measures designed to improve the long-term financial
health of the company. Mr. Bennett announced that these are the
very objectives which the Debtors sought to achieve in the cash
collateral litigation against the new Lenders under the
replacement facility.

Mr. Bennett advised that the Debtors' financial advisors, The
Blackstone Group, have contacted several potential lenders
regarding postpetition financing. The Receivables Lenders and
the Inventory Lenders were among the group of parties that
responded with interest. Based on this interest, negotiations
began and have led to the presentation of the present Motion,
which resolves all matters presently in dispute, as well as
replaces the final approval of the previous Motion to use cash
collateral which was opposed by Abbey.

                Terms of the Replacement Facility

The Commitment: The total commitment for the Replacement
Facility is equal to the aggregate principal amount outstanding
(including outstanding letters of credit) under both the
existing Receivables Facility and the existing Inventory
Facility, together with any accrued and unpaid interest, fees,
and expenses. The Replacement Commitment contains a sublimit of
$103 million for standby letters of credit that were issued
under the prepetition Receivables Facility and Inventory
Facility, and that will be treated as usage of the Replacement
Commitment, a further sublimit of $20 million which shall apply
to the letters of credit upon the termination of the working
capital facility.

The Replacement Commitment will be used to repurchase the
Inventory Portfolio and Receivables Portfolio, to settle unpaid
adequate protection claims and administrative claims that were
incurred and unpaid under the Court's Interim Order on the prior
Motion, and to the extent that, following the repurchase of the
inventory portfolio and the receivables portfolio there are
voluntary prepayments of the principal of the Replacement
Commitment, the Replacement Commitment may be used for working
capital purposes through letters of credit.

Term of Commitment: The Replacement Commitment shall run until
the earliest of:

      (i) June 30, 2002;

     (ii) the substantial consummation of a confirmed plan of
          reorganization; and

    (iii) the acceleration of he loans and the termination of
          the Replacement Commitment in accordance with the
          Replacement Facility Agreement.

Letters of Credit: Letters of credit will expire no later than
60 days after the applicable maturity date. Drafts drawn under
letters of credit will be reimbursed not later than the first
business day following the date of draw. If a terminate date
occurs prior to the expiration of any letter of credit, the
letter of credit shall be returned canceled, and if the Debtors
are unable to do so the letter of credit shall be:

      (a) Secured by a letter of credit that is in an amount
          equal to 105% of the face amount of the letters of
          credit; or

      (b) cash collateralized in an amount equal to 105% of the
          face amount of the letters of credit by deposit of cash
          in such amount into an account established by the
          Debtors under the sole and exclusive control of the
          Agent.

Priority and Liens: To secure the borrowings and reimbursement
obligations under the Replacement Facility the Debtors shall
grant the following priority and liens to the lenders under the
Replacement Facility:

      (a) Superpriority claims pari passu with the superpriority
claims with respect to the obligations under the Working Capital
Facility, and with respect to Copperweld Corporation and its
domestic subsidiaries, also pari passu with the superpriority
claims granted to certain creditors of Copperweld under the
adequate protection stipulation;

      (b) The Replacement Facility will be secured by:

          (i) a perfected first-priority lien on all present
              and future inventory and receivables of LTV Steel
              and Georgia Tubing Corporation, and all present and
              future receivables of Copperweld (including,
              without limitation, the inventory and receivables
              that are repurchased from Steel Products and Sales
              Finance);

         (ii) a perfected first--priority lien on the
              "Hennepin Works" to secure a portion of the
              Replacement Facility equal to 28 million; and

        (iii) a perfected first-priority lien on all cash
              maintained in the letter of credit account,
              provided that following a termination date, amounts
              in the letter of credit account shall not be
              subject to the carve-out.

         (iv) a junior lien on all property of the Debtors
              that was subject to valid and perfected liens in
              existence on the Petition Date, and substantially
              all of the assets of VP Buildings, Inc., and all
              other unencumbered assets of the Debtors. These
              liens will be junior to the liens granted to secure
              the Working Capital Facility.

      (c) Carve-out: Subject in each case to the occurrence and
during the continuance of an event of default, or an event that
would constitute an event of default with the giving of notice
or lapse of time or both, the payment of allowed and unpaid
professional fees and disbursement incurred by the Debtors and
any statutory committees appointed in these cases in an
aggregate amount not in excess of $5,000,000, and the payment of
fees to the United States Trustee and the Clerk of the Court,
together the carve-out fees. In the event that the Court
approves a retention and severance program, the claims and
liens securing the Replacement Facility will not apply to a
segregated or escrow account established by the Debtors to fund
such a program in an aggregate amount not to exceed the lesser
of the authorized amount, or $8 million.

      (d) Fees: The Replacement Facility requires that the
Debtors pay:

          (i) an Advisory Fee in the am0unt of $500,000 to the
              Agent;

         (ii) a Facility Fee of one-half of one percent of the
              Replacement Commitment to Chase for the lenders
              upon the making of the initial loan;

        (iii) an Administrative Agent Fee of $250,000 per quarter
              payable to the Agent;

         (iv) a Structuring Fee to the Co-Agent in the amount of
              $250,000, plus a Co-Agent Fee of $75,000 per
              quarter payable to the Co-Agent;;

          (v) a Commitment Fee of one-half of one percent per
              annum of the unused amount of the Replacement
              Commitment;

         (vi) Letter of Credit Fees equal to 2-1/2% per annum on
              the outstanding face amount of the letters of
              credit, plus in each case, customary fees for the
              issuance, amendments, and processing, and a
              Fronting Fee of one-quarter of one percent per
              annum of each letter of credit.

      (e) Interest rates: The Replacement Commitment will bear
interest at Chase's Alternate Base Rate, plus one and one-half
percent, or at the Debtors' option, LIBOR plus two and one-half
percent, for interest periods of one or three months. Interest
is payable monthly in arrears and on the termination date. Upon
the occurrence and during the continuance of any default in the
payment of principal, interest, or other amounts due under the
credit agreement, interest will be payable on demand at two
percent above the then applicable rate.

      (f) Borrowing Base: The Debtors and the Replacement
Facility Lenders have not yet agreed upon an exact formula;
however, the Replacement Facility will include the aggregate
existing Receivables Portfolio and Inventory Portfolio, as well
as postpetition Receivables and Inventory owned by the
Receivables Sellers and the Inventory Sellers under the existing
receivables facility and the existing inventory facility, and in
each case that meet certain eligibility requirements and a
component attributable to the Hennepin lien in an amount equal
to the lesser of $28 million, or the appraised value of the
Hennepin Works. Although the Debtors and Chase subsequently
submit a copy of the proposed financing agreement, the borrowing
base section remains incomplete.

      (g) Minimum Borrowing: The Debtors will borrow at least $1
million for direct borrowing of ABR loans, and $5 million for
direct borrowing of LIBOR, with no more than ten borrowings
outstanding at any one time.

      (h) Mandatory prepayments, commitment reductions and cash
collateral: The Replacement Commitment will be automatically and
permanently reduced on September 30, 2001, by $200 million, and
again on March 31, 2002, by $200 million, as well as to the
extent that the Replacement Facility borrowings exceed the
Replacement Commitment. These reductions will take into account
and credit all prior reductions, including those that result
from the sale of assets.

      (i) Prepayments upon asset dispositions: With respect to
          assets other than inventory and receivables, the
          Debtors will be permitted to sell or otherwise dispose
          of these assets (subject to the rights of the lenders
          to object to such sales or dispositions after the
          payment of the Working Capital Facility), provided that
          50% of the net proceeds thereof are applied as a
          prepayment of the outstanding amounts under the
          Replacement Facility. In the case of a sale for non-
          cash consideration, 100% of such consideration will be
          pledged to the Agent, with 50% to be applied to the
          prepayment of outstanding amounts under the Replacement
          Facility and the reduction of the Replacement
          Commitment when the proceeds of such non-cash
          consideration are received. New borrowings secured by
          liens on such assets will be permitted, provided that
          50% of the proceeds thereof are applied to the
          prepayment of outstanding amounts under the Replacement
          Facility and the reduction of the Replacement
          Commitment. As to any disposition of the Hennepin
          Works, the lenders will receive the first $28 million
          in disposition proceeds, after which the 50/50 split
          will apply, and the 50/50 split will also be subject to
          other valid and perfected prior liens, provided that
          each case will be subject to the prior payment of the
          Working Capital Facility (except as to the first $28
          million of the Hennepin proceeds).

     (ii) Other mandatory prepayments: When the Debtors have
          cash on hand greater than $40 million, plus the amount
          of the segregated or escrow account reserved for any
          approved retention or severance plan, the excess cash
          will be applied to the prepayment first of the Working
          Capital Facility, and then to the Replacement Facility.
          The reductions of the Replacement Facility will not
          permanently reduce the Replacement Commitment.

      (i) Optional prepayments: The Debtor may prepay the
Replacement Facility without any penalty provided the
prepayments are made in multiples of $1 million, and that if the
prepayment is of a LIBOR loan, and LIBOR loans remain
outstanding, after crediting the prepayment there are LIBOR
loans in excess of $5 million outstanding.

(j) Miscellaneous conditions:

     (i) The Debtors must withdraw with prejudice the previous
         cash collateral motion.

    (ii) At the time of extension of credit, there must be paid
         in full the aggregate principal amounts outstanding
         under the existing receivables facility and the existing
         inventory facility, together with accrued and unpaid
         interest and unpaid fees and expenses.

   (iii) The Debtors must authorize the repurchase of inventory
         and accounts receivables under the existing inventory
         facility and the existing receivables facility. The
         purchase price for the inventory portfolio and
         receivables portfolio will be equal to the outstanding
         principal amount (excluding all letters of credit) under
         the existing receivables facility and the existing
         inventory facility, together with unpaid interest, fees,
         and expenses. Payment of the purchase price will be in
         full satisfaction of any and all claims of the Inventory
         Lenders and the Receivables Lenders for adequate
         protection or claims under the Interim Order for the
         period commencing with the Petition Date, until entry of
         a final order on this Motion.

    (iv) The Court's Order must expressly find that the sales
         effectuated under the existing inventory facility and
         the existing receivables facility were "true sales".

     (v) All fees and charges of the Agent, the Co-Agent, and
         any of the lenders are paid in full.

    (vi) The Agent, the Co-Agent, and the Replacement Facility
         Lenders will each receive a satisfactory draft of the
         Debtors' audited consolidated financial statements for
         the fiscal year ended December 31, 2000.

    (vi) The Agent and the Replacement Facility Lenders are to
         receive copies of the letters previously received by the
         Debtors expressing interest in an acquisition of the
         stock or assets of VP Buildings or its subsidiaries.

   (vii) The Debtors must adhere to affirmative and negative
         covenants, such as minimum EBITDA level and minimum cash
         on hand. The Debtors, the Agent, the Co-Agent, and the
         Replacement Facility Lenders will continue to refine the
         precise requirements of the covenants to be included.

                Terms of Working Capital Facility

      (a) Borrowers: LTV Corporation, VP Buildings, Inc.,
Copperweld, LTV Steel, and the other subsidiaries of LTV Corp.,
as required by Abelco.

      (b) Guarantors: All subsidiaries of LTV Corp. required by
Abelco.

      (c) Agents and Lenders: Abelco will serve as collateral
agent, the CIT Group/Business Credit, Inc., will serve as
administrative agent, and Abbey National Treasury Service plc
will serve as syndication agent.

      (d) Commitment: An aggregate commitment of $100,000,000,
composed of a $65,000,000 revolving credit facility and a
$35,000,000 term loan facility. The revolving loans will have a
sublimit of $20,000,000 for the issuance of letters of credit.
The aggregate amount of revolving loans and working capital
letters of credit will not exceed the lesser of $65,000,000 and
the borrowing base.

      (e) Letters of Credit: Each working capital letter of
credit will have an expiration date that is not later than 15
days before the maturity date, unless prior to the maturity date
such letter of credit is cash-collateralized in an amount equal
to 105% of the face amount of the working capital letter of
credit.

      (f) Term: The Working Capital Facility will terminate upon
the earliest of:

          (i) June 30, 2002;

         (ii) the substantial consummation of a confirmed plan of
              reorganization; or

        (iii) the sale of the capital stock or all or
              substantially all of the assets of VP Buildings.

      (g) Priority and Liens: To secure the borrowings and
reimbursement obligations under the Working Capital Facility the
Debtors will grant the following priorities and liens to the
enders under the Working Capital Facility:

          (i) Superpriority claims, pari passu with the
              superpriority claims granted with respect to
              obligations under the Replacement Facility, and
              with the superpriority claims granted to certain
              creditors of Copperweld under the adequate
              protection stipulation.

         (ii) A security interest in and lien on all now owned
              and hereafter acquired assets and property of the
              estate, real and personal, of the Debtors,
              including all avoidance actions, 100% of the
              capital stock of each domestic subsidiary of LTV
              Corp., and 65% of the stock of each foreign
              subsidiary of LTV Corp. The security interests in
              and line on all assets and property of the Debtors
              will be perfected, first-priority security
              interests in and liens, not subject to
              subordination, on all assets of VP Buildings and
              all other unencumbered assets (prior to the grant
              of liens to secure the Replacement Facility) of the
              Debtors, and junior security interests and liens
              with respect to all assets of the Debtors subject
              to a perfected security interest and lien as of the
              Petition Date, including the security interests and
              liens of the Replacement Facility Lenders with
              respect to all present and future inventory and
              receivables of LTV Steel Company, Inc., and Georgia
              Tubing Corporation, and all present and future
              receivables of Copperweld (including, without
              limitation, the inventory portfolio and receivables
              portfolio), provided, however, that the liens on
              the Hennepin Works will be junior to the security
              interests and liens in favor of the lenders under
              the Replacement Facility only to the extent of the
              amount of $28,000,000. No liens will be released
              until all amounts due under the Working Capital
              Facility are paid in full in cash.

        (iii) Subject in each case to the payment of allowed
              professional fees and disbursements incurred by the
              Debtors and any official committees appointed in
              these cases, in an aggregate amount not in excess
              of $500,000 at any time outstanding, and the
              payment of fees of the United States Trustee and
              the Clerk of the Court.

              Furthermore, in the event that the Court approves a
              retention and  severance program, the claims and
              liens described above will not apply to a
              segregated or escrow account established by the
              Debtors to fund such a program, provided that the
              amount deposited in such account is acceptable to
              the Working Capital Facility Agents.

      (h) Fees: The Working Capital Facility requires that the
Debtors pay:

          (i) a Commitment Fee of $750,000;

         (ii) a Funding Fee on the closing date equal to
              $1,583,000;

        (iii) an Administration Fee of $500,000 payable on the
              closing date and the first anniversary of the
              closing date;

         (iv) an Unused Line Fee equal to one-half of one percent
              per annum of the unused portion of the revolving
              credit facility, payable monthly in arrears;

          (v) Working Capital letter of credit fees of two and
              one- half percent per annum on the stated amount of
              each Working Capital letter of credit, plus
              customary charges of the issuing bank; and

         (vi) a Monitoring Fee of $50,000 per quarter, payable
              quarterly in advance.

      (i) Interest rates: Revolving loans will bear interest at a
rate per annum equal to ABR plus two percent, payable monthly in
arrears. The term loan will bear interest at a rate per annum
equal to ABR plus three and one-quarter percent, payable monthly
in arrears. In no event will ABR be less than nine percent. If
any event of default occurs and is continuing, interest will
accrue on all outstanding advances at a rate per annum equal to
two percent above the rate otherwise applicable to the
obligation, payable on demand.

      (j) Borrowing base: The borrowing base will be equal to the
sum of:

          (i) the lowest of (x) the sum of (1) eighty percent of
              eligible accounts receivable of VP Buildings; (2)
              sixty percent of eligible raw materials inventory
              of VP Buildings; and (3) an overadvance of up to
              $10,000,000; (y) the aggregate amount of the
              immediately preceding sixty days' accounts
              receivable collections of VP Buildings; and (z) two
              times the previous twelve months' EBITDA of VP
              Buildings and

         (ii) $25,000,000.

Eligible accounts receivable and eligible raw materials
inventory will be determined by the Working Capital Facility
Collateral Agent and Administrative Agent under their field
examination and the due diligence of VP Buildings. In addition,
the Working Capital Facility Administrative Agent and Collateral
Agent will have the right to establish reserves to the Borrowing
Base in the business judgment of the Administrative Agent and
Collateral Agent.

      (k) Cash Management: All proceeds of accounts receivable of
VP Buildings will be deposited in lockbox accounts under the
sole dominion and control of the Working Capital Facility
Administrative Agent. All funds deposited in these lockbox
accounts will be transferred to the Working Capital Facility
Administrative Agent on each business day and applied to repay
the outstanding obligations of the Debtors under the revolving
loans. Collections will be credited to the obligations on the
day received in the lockbox accounts conditional on final
payment to the Administrative Agent, and the Administrative
Agent will charge two collection days for interest calculation
purposes with respect to all collections. No funds of any
subsidiary or affiliate of the Debtors will be deposited in
these lockbox accounts or commingled with the funds contained in
these accounts.

      (l) Mandatory and optional prepayments: Customary mandatory
prepayments will be included in the definitive documentation
when completed, including without limitation, issuances of
indebtedness, non-ordinary course sales of assets, tax refunds,
casualty events, and so on, and shall be allocated between the
revolving loans and the term loan. In addition, excess cash on
hand (to be defined) in excess of an amount to be agreed shall
be applied to the revolving loans. The Debtors will be entitled
to prepay the Working Capital Facility in whole or in part at
any time without penalty or premium.

      (m) Miscellaneous provisions: The Court must approve these
terms, grant the requested superpriority liens and claims, and
be a final Order. The Working Capital Facility Collateral Agent
and Administrative Agent must be satisfied with the cash
management system of the Debtors, including the establishment of
the lockboxes and cash concentration accounts for VP Buildings.
The Agents and Lenders under the Working Capital Facility must
receive a satisfactory draft of the Debtors' audited
consolidated financial statements for the fiscal year ended
December 31, 2000. The Debtors must have a minimum of $65 of
unused and available borrowing capacity under the revolving
loans after the payment of all fees and expenses then owing to
the Working Capital Facility Agents and the Facility Lenders.
Finally, the Collateral Agent must enter into an intercreditor
agreement in form and substance satisfactory to the Working
Capital Facility Collateral Agent and the Working Capital
Facility Administrative Agent.

In support of this substituted Motion, the Debtors argued that
the proposed financing is permissible under the Bankruptcy Code
as the Debtors, through their financial agents Blackstone, have
been unable to obtain unsecured credit in the amounts required
to resolve the cash collateral dispute and provide additional
working capital financing, and the Replacement Facility Lenders
will not make the loans on terms other than described in the
Motion. The Debtors assured Judge Bodoh that these facilities
offer them sufficient working capital to continue to operate for
a sufficient period of time to permit the Debtors to market and
sell, at fair market value, certain of their assets which will,
in turn, generate proceeds sufficient to reduce their long-term
borrowings and the debt service associated with those
borrowings. This reduction, Mr. Bennett said, is consistent with
the Debtors' long-term business plan that the Debtors will seek
to implement through a plan of reorganization. In addition, the
proposed financings resolve the existing dispute between the
Debtor and the Replacement Facility Lenders concerning the
Debtors' use of cash collateral. If the Lenders were to prevail
and preclude the Debtors' use of receivables and inventory, the
Debtors would have no funds to continue to operate and would
have no choice but to shut their doors. Instead, the Replacement
Facility financing provides the Debtors with the very benefit --
the ongoing use of the receivables and inventory -- that the
Debtors would obtain if they were to prevail at the cash
collateral hearing, but without the litigation risk and expense
and potential for delay related to such a controversy.

The Debtors assured Judge Bodoh that his making a finding that
the prepetition financing facilities provided for "true sales"
of inventory and receivables will not harm the estates. Once the
transaction has been consummated and the receivables and
inventory have been repurchased with the funds advanced under
the Replacement Facility, the prepetition facility will cease to
exist. Thus the characterization of the prepetition facilities
as "true sales" will not adversely affect the Debtors. In
contrast, the Debtors believe , based on the hard-fought
negotiations with the Replacement Facility Lenders, that the
absence of such a finding will cause the Replacement Facility
Lenders to refuse to provide the financing under the Replacement
Facility -- a result that would, in the Debtors' view, harm the
estates.

The repurchase of inventory held by Steel Products and
receivables held by Sales Finance as of the Petition Date, which
settles the adequate protection liens granted by the Interim
Order, also benefit the estate and are within the Debtors'
business judgment. The purpose of the transaction is to assure
the Debtors of the use of the receivables and inventory, without
which the Debtors could not continue to operate. That purpose
alone is sufficient to satisfy the requirements of the
Bankruptcy Code. In addition to obtaining clear title to the
inventory and receivables, the repurchase of those assets will
enable the Debtors to satisfy the adequate protection liens and
superpriority claims granted to the Replacement Facility Lenders
under the Interim Order. As a further benefit, the credit terms
under the facilities are more favorable than if the Debtors do
not repurchase the inventory and receivables. Finally, the
repurchase of these assets, by resolving the pending cash
collateral litigation, will provide greater assurance to
trade creditors that their postpetition claims will be paid in
the ordinary course of business, thereby enabling the Debtors to
obtain more favorable credit terms from the trade creditors.

           The Noteholders' Committee Objects

The Official Committee of Noteholders objected to the terms of
the proposed facilities, telling Judge Bodoh that the Court
should not approve the DIP facilities because they provide for
an inappropriate taking of value from other Chapter 11 Debtors,
incorporate overreaching terms tantamount to an unconstitutional
taking of property. Further, the Committee said that the Debtors
violate their fiduciary duties to these estates by agreeing to
such terms. The Committee, appearing through Lisa G. Beckerman
and Robert J. Stark of Akin, Gump, Strauss, Hauer & Feld LLP of
New York, and assisted by Joseph F. McDonough and James McLean
of Manion, McDonough & Lucas of Pittsburgh, Pennsylvania,
proposed counsel for the Noteholders' Committee, protested
specific terms, such as the requirement of a mandatory pay-down
that, the Committee said, will almost assuredly result in the
Debtor's near-term financial collapse. These loans are
"outrageously expensive", provide for liens on avoidance actions
which the Debtors are bound by their duties to bring for the
estates' benefits, and mention significant terms which remain
undetermined. Further, the Replacement Facility provides for an
inappropriate cross-collateralization of the prepetition debt.

           The Unsecured Creditors' Committee Objects

Paul Singer at Reed Smith LLP, on behalf of the Official
Committee of Unsecured Creditors, made a limited objection to
the Motion, telling Judge Bodoh that the term of the Replacement
Facility is too short. The Committee said it is far from clear
that the Debtors will have the financial ability to satisfy the
repayment requirements and schedule, and that the necessary
repayment efforts are likely to hamstring the Debtors' efforts
to reorganize.

The Committee also complained that the fees imposed by Abelco
are excessive. These fees actually associated with the Working
Capital Facility go far beyond the 0.75%, or $750,000 Commitment
Fee. The total fees associated with the proposed facility may
represent as much as 6.0% of $100 million. The fees are
particularly excessive in light of the anticipated sale of VP
Buildings, Inc. Under the terms of the Working Capital Facility,
the proceeds of this sale would be used to repay most or all of
that facility. In the context of a fully secured facility that
may exist for as little as three months, the lender would
receive an effective rate of return in excess of 20%, so that
the fees are unreasonable.

The fees for the Replacement Facility are likewise said to be
excessive. This loan, which is fully secured and for what the
Committee believes is a short term, does not involve any
significant new loans, but instead represent a rollover of
prepetition loans. Under the old loans, no mandatory repayments
were required, the grant of security interests was less
extensive, and the lenders were at risk on the "true sale"
issue. All those hazards are being removed, and there is no
justification for the payment of the proposed fees.

Finally, the Committee complained that the lien granted the
Working Capital Lenders should not include avoidance actions, as
such actions are to remain available to unsecured creditors.
Further, the Committee objected to any approval of these
facilities until the Committee has an opportunity to review the
complete loan documentations.

               Appaloosa Management Objects

Appaloosa Management, which holds approximately $130 million in
aggregate of the 8.2% senior notes due 2007 and the 11-3/4%
senior notes due 2009 appears through Kenneth H. Eckstein, David
M. Feldman, and Amy Caton of the New York firm of Kramer, Levin,
Naftalis & Frankel, aided by Michael Gallo of Nadler, Nadler,
Burdman Co., LPA of Youngstown, Ohio, and objects to the Motion.
Appaloosa proposed to backstop an alternative DIP facility that
would provide the Debtors with up to $125 million of new money
and give all creditors of the metal fabricating Debtors the
opportunity to participate in the facility, while limiting the
adverse impact on non-participating creditors. Appaloosa told
Judge Bodoh that the mandatory amortization provisions, and the
speed at which their payment is demanded, do not provide enough
time for the Debtors to credibly reorganize and may precipitate
a liquidity crisis that could force a liquidation of assets,
including non-steel assets, at fire sale prices to the detriment
of creditors. Appaloosa's proposal would eliminate the massive
cross-collateralization and enormous fees contemplated by the
two facilities, and prevent a liquidity crisis that could be
triggered by Chase's mandatory amortization requirements, while
preserving the ability of the Debtors to litigate or resolve on
more even-handed terms the "true sale" litigation. In short,
Appaloosa proposes $100 to $125 million in cash to the
integrated steel debtors on better terms than Ableco. These
improved terms include lower commitment and funding fees
payable only upon closing, significant rate reductions, the
elimination of a restrictive borrowing base revolver
availability, the exclusion of estate cause of action from the
collateral package, and an "evergreen" carve-out for
professionals. Further, Appaloosa said its facility provides the
opportunity to participate pro rata as lenders to all unsecured
creditors of the metal fabricating debtors, in exchange for
which participating creditors will receive the benefits of a
greater distribution.

           Morgan Stanley and Credit Suisse Object

Morgan Stanley Senior Funding, Inc., as Administrative Agent
under the credit agreement, lead arranger, book manager, and
syndication agent, and Credit Suisse First Boston as collateral
agent and administrative agent, for the prepetition lenders,
through James W. Ehrman and Philip E. Langer of the Cleveland
firm of Porter Wright Morris & Arthur, suggested to Judge Bodoh
that the motion provides no support whatsoever of the benefit of
the Working Capital Facility to the Copperweld entities. Morgan
Stanley and Credit Suisse were the beneficiaries of a
stipulation granting certain adequate protection to them which
includes, among other things, a first-priority replacement lien
on inventory acquired by the Copperweld entities after the
Petition Date, and superpriority claim status against the
Debtors' estates.

Morgan Stanley and Credit Suisse complained of any suggestion
that they should share superpriority status with the new lenders
pari passu or otherwise. Further, no information is provided as
to whether the proceeds of the facility are required by the
Copperweld entities. The Motion appears to these lenders to
provide benefits to the Debtors other than the Copperweld group,
yet "straddle" the Copperweld entities with the obligations to
pay for the benefits.

Morgan Stanley and Credit Suisse pointed out to Judge Bodoh that
the motion does not provide details of the terms of any
prepayment, nor are the details of which of the Debtors' estates
would provide cash for any prepayments. In particular, no
benefit to the Copperweld entities are shown. Morgan Stanley and
Credit Suisse also complain that the terms and identities of any
junior lienholders are not given, nor is it clear whether such
junior liens are applicable to the pre- and postpetition liens
held by Morgan Stanley and Credit Suisse, and therefore these
parties object unless they are paid in full.

      Abbey National Responds to the Noteholders' Committee

Abbey National Treasury Services plc, responding through Andrew
J. Dorman of the firm of Janik & Dorman in Cleveland, passed
over all of the objections in silence except for the objection
by the Noteholders' Committee. Abbey told Judge Bodoh that the
Noteholders ignore the fact that the Replacement Facility is
being proposed by the Debtors in the context of a settlement of
the cash collateral motion and the appeal relating to Abbey's
emergency motion, so that the standard to be applied is whether
the terms of the Replacement Facility in that context fall
within the range of reasonableness and are fair and equitable
based on the facts and circumstances extant here. The objection
also ignores, says Abbey,, the practical fact that the principal
source of cash to operate all of the Debtors in the first few
months of these cases were and are the accounts receivable on
the books and records of LTV Sales Finance Company, the status
of and the Debtors' rights in or lack thereof which are the
issues contested with respect to the cash collateral motion and
Abbey's appeal. Abbey told Judge Bodoh the terms of both of the
proposed DIP facilities are within the range of reason and
current market practices and have been negotiated at arm's
length, a conclusion which is bolstered by the settlement
context.

            Judge Bodoh Chooses Practicality

Finding that the Debtors have an immediate need to obtain
financing to permit the repurchase of inventory and receivables
from Steel Products and Steel Finance, and that the Debtors'
ability to obtain sufficient working capital and liquidity
through the incurrence of new debt for borrowed money and other
financial accommodations is vital to the Debtors to preserve and
maintain their going-concern values and a successful
reorganization, Judge Bodoh swept aside all objections and
emphasized the practical necessity for immediate approval of the
substituted Motion for approval of the two DIP facilities.
Saying simply that the Debtors cannot otherwise obtain adequate
unsecured credit, and that a facility in the amount provided by
the proposed financing is otherwise unavailable, Judge Bodoh
approved the Motion and granted all relief as requested by the
Debtors, permitting the Debtors to borrow under the DIP
agreements, and to the extent that sufficient funds are not
available under the Replacement Facility, to use cash on hand or
borrow under the Working Capital Facility to pay off the
prepetition credit facilities in full and repurchase inventory
and receivables.

With regard to the requested finding about true sales, Judge
Bodoh stated that "Effective as of the closing of the Financing,
the Debtors admit and the Court finds that the transactions
contemplated by and entered into pursuant to the Inventory Sales
Agreement and the Receivables Sales Agreement constitute "true
sales" of respectively, the inventory and accounts receivable
conveyed to Steel Products and Sales Finance."

Judge Bodoh ordered that upon closing the cash collateral motion
is deemed withdrawn with prejudice, and the parties are to take
such action as necessary to withdraw the pending appeal. (LTV
Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service,
Inc., 609/392-00900)


LTV CORP: Restructuring Kicks Off With Closure Of Steel Facility
----------------------------------------------------------------
The LTV Corporation (OTC Bulletin Board: LTVCQ) has begun to
implement a restructuring plan to restore its integrated steel
operations to viability and preserve high quality manufacturing
jobs within its communities.

"When fully implemented, the restructuring plan is designed to
enable LTV Steel to operate successfully in the real economic
world of both low-cost domestic and unfair foreign competition.
The future of our company, employees, retirees and communities
demands that we make the changes necessary to break out of the
exhausting cycle of crisis and failure which nearly caused the
permanent closure of our company less than four months ago,"
said William H. Bricker, chairman and chief executive officer of
The LTV Corporation.

As an initial step, LTV informed officials of the United
Steelworkers of America that it intends to permanently close the
Direct Hot Charge Complex (DHCC) and the associated C-1 blast
furnace, located on the West Side of the Cleveland Works. The
DHCC, which has an annual raw steel capacity of about 2 million
tons, consists of a basic oxygen furnace steelmaking shop, a
continuous slab caster and hot strip mill. The facilities employ
about 800 hourly and 100 salaried people. Approximately half of
the affected employees will be eligible to retire.

Closure of these facilities will result in cost savings of $700
million over the next five years.

"The hot rolled steel produced by the DHCC carries our lowest
selling prices and cannot compete in the marketplace," said John
D. Turner, executive vice president and chief operating officer.
Mr. Turner said that LTV couldn't justify investments in
facilities that do not generate a positive return on the
investment.

LTV said that it is prepared to meet with the USWA concerning
the effects of the intended shutdown. The company also said that
affected employees would be eligible for job opportunities at
other LTV Steel facilities.

LTV also announced that it has closed its $700 million debtor-
in-possession financing which will supplement current cash and
finance the company during the initial phases of the
restructuring.

"LTV has come a long way since December 27 when we faced the
shutdown of an entire company and economic devastation for over
100,000 people. As a result of the heroic efforts of our
employees, our communities, the Steelworkers and our elected
representatives, we now have the financial means to restructure
LTV Steel and create a stable, profitable and successful
company. Our goal is to continue to serve as a meaningful part
of our communities by providing high quality jobs and benefits
for our people and opportunities for the future," Mr. Bricker
said.

The LTV Corporation is a manufacturing company with interests in
steel and metal fabrication. LTV's Integrated Steel segment is a
leading producer of high-quality, value-added flat rolled steel,
and a major supplier to the transportation, appliance,
electrical equipment and service center industries. LTV's Metal
Fabrication segment consists of LTV Copperweld, the largest
producer of tubular and bimetallic products in North America and
VP Buildings, a leading producer of pre-engineered metal
buildings for low-rise commercial applications.


MEADOWBROOK: Obtains Waiver of Bank Loan Covenant Violations
------------------------------------------------------------
Meadowbrook Insurance Group, Inc. (NYSE: MIG) disclosed that the
pending obligation to cut its credit facility by $15 million on
or before April 30, 2001, has been permanently waived by its
banks. The banks have also agreed to waive all prior covenant
violations of the existing loan agreement and establish mutually
agreeable new covenants.

This revised agreement calls for the Company to begin a $5
million quarterly amortization of the principal of the credit
facility on September 30, 2001, absent an earlier voluntary
reduction. The quarterly amortization would then continue until
the facility is paid in full, expires in August 2002, is
renegotiated or extended.

As previously announced, Meadowbrook retained an investment
banking firm to assist in enhancing the Company's overall
capital position. Meadowbrook will continue to aggressively and
prudently pursue its capital raising efforts and reduce the
credit facility in due course.

"We are pleased that our banking partners have shown their
cooperation and support by recognizing the mutual benefit of
reaching this agreement. This serves to facilitate the on-going
improvement of Meadowbrook's balance sheet and the reduction of
the debt in a responsible and timely manner," commented Robert
S. Cubbin, Meadowbrook's President and Chief Operating Officer.
"The banks' decision to permanently waive the pending reduction
in the credit facility is indicative of a high confidence level
in our commitment to capital raising initiatives and our strong
resolve to swiftly return to profitability in the near term."

A leader in the alternative risk market, Meadowbrook is a
program-oriented risk management company, specializing in
alternative risk management solutions for agents, brokers, and
insureds of all sizes. Common shares of Meadowbrook Insurance
Group, Inc. are listed on the New York Stock Exchange under the
symbol "MIG." For further information, please visit
Meadowbrook's corporate web site at www.meadowbrook.com or
contact Karen M. Spaun, Vice President of Investor Relations at
248-204-8178.


NORTHPOINT: Cypress Comm. Agrees To Assist Former Customers
-----------------------------------------------------------
Cypress Communications, Inc. (Nasdaq: CYCO), a leading provider
of in-building broadband communications services, has signed
service agreements with more than 25 of NorthPoint
Communications' former business customers within the last two
weeks.

"We are doing everything we can to help former NorthPoint
customers get back on line as quickly as possible. Because we
own and operate our in- building fiber-optic infrastructure, we
can typically connect a new customer in a matter of days, unlike
many service providers that can take up to a month to provision
a new customer. This has been an enormous relief to many
businesses whose NorthPoint services have recently been
terminated," said Frank Blount, chairman and chief executive
officer of Cypress Communications.

In March, the United States Bankruptcy Court approved AT&T's
purchase of substantially all of NorthPoint's assets. AT&T chose
not to acquire NorthPoint's wholesale business, and without
enough funds to keep its network running, NorthPoint notified
service providers of an "imminent" shutdown.

"NorthPoint's troubles clearly were not the result of a lack of
demand for broadband services. Small and medium-sized businesses
continue to demand faster and better broadband communications
services. The number of calls we continue to receive from
customers of defunct service providers is evidence of this,"
added Mr. Blount.

Recently Cypress Communications announced a revised business
plan that is designed to fully fund the company's ongoing
business operations and eliminate the company's need to raise
additional capital.

"With this fully funded plan we are well positioned to reap the
benefits of the ongoing telecom sector shakeout, and we fully
intend to capitalize upon these opportunities to further expand
our customer base," Mr. Blount concluded.

                  Cypress Communications

Cypress Communications provides comprehensive broadband
solutions to businesses located in commercial office buildings
in major metropolitan markets throughout the United States. The
company offers a fully integrated, customized communications
package that typically includes high-speed, fiber optic Internet
connectivity, e-mail services, Web hosting services, remote
access connectivity, local and long distance voice services with
advanced calling features, feature rich digital telephone
systems and digital satellite business television. Cypress
Communications also wholesales components of its in-building
fiber optic network infrastructure to other licensed
communications providers.


OPUS360: Falls Short of Nasdaq's Minimum Bid Price Requirement
--------------------------------------------------------------
Opus360 Corporation (Nasdaq: OPUS), a leading provider of
eBusiness software for acquiring and managing skilled
professionals, received notice of a Nasdaq Staff Determination
on April 5, 2001, indicating that the Company failed to comply
with the minimum bid price requirement for continued listing,
and is subject to delisting from the Nasdaq National Market.

The Company is filing a request for a hearing before a Nasdaq
Listing Qualifications Panel to review the Staff Determination.
The request was based upon the transactions disclosed today as
well as other steps the Company has taken and is considering to
maximize shareholder value. The Company's stock will continue to
trade on the Nasdaq National Market pending a decision by the
Panel.

At this time, the Company is in compliance with all of Nasdaq's
continued listing requirements except for the minimum bid
requirement. There can be no assurance that the Company's
actions will prevent delisting of its common stock. The Company
will not be notified until the Panel makes a formal decision.
Until then, the Company's shares will continue to be traded on
the Nasdaq National Market. In the event the shares are delisted
from the Nasdaq National Market, it will attempt to have its
common stock traded on the NASD OTC Bulletin Board.

                About Opus360 Corporation

Opus360 provides eBusiness software that enables companies to
manage and acquire skilled professionals strategically. Named
one of the top 100 technology companies by Forbes magazine and
one of the top 100 eProcurement providers by iSource Business
magazine, Opus360's software enables businesses to get more work
done with the employees they have and reduce the cost of
acquiring skilled professionals.


PACIFIC GAS: Designates Gordon Smith As Responsible Individual
--------------------------------------------------------------
Pacific Gas and Electric Company told the U.S. Bankruptcy Court,
in accordance with Rule 4002-1 of the Local Bankruptcy Rules for
the Northern District of California that its President and Chief
Executive Officer, Gordon R. Smith, will be the individual
responsible for making sure that the Company fulfils its duties
and obligations as a so-called debtor-in-possession pursuant to
11 U.S.C. Secs. 1107 and 1108. "Mr. Smith is familiar with the
day-to-day operations of PG&E and is competent to perform the
duties and obligations of the debtor- in-possession," Roger J.
Peters, Senior Vice President and General Counsel for PG&E and
James L. Lopes, Esq., at Howard, Rice, Nemerovski, Canady, Falk
& Rabkin, told Judge Montali. (Pacific Gas Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900)


PACIFIC GAS: Fitch Says Partial Tax Payment Won't Impact Ratings
----------------------------------------------------------------
Pacific Gas and Electric's partial payment of its semiannual
property taxes will not impact local municipal short- or long-
term credit ratings, the international rating agency Fitch said.
While the utility is a major property taxpayer in several
cities, counties and school districts, the amount of the
shortfall is manageable in the short-run.

"The timing of the remaining tax payment is uncertain, as is the
municipalities' ability to collect penalties and interest
standard to delinquent taxes," said Amy S. Doppelt, Managing
Director, at Fitch. "While the dollar amount appears manageable
for most entities, any discretionary revenue delay or loss is
meaningful to overall spending plans."

PG&E paid 47% of the property taxes due to 49 counties and
numerous municipalities within these counties, or $37.3 million
of $79.0 million due. The payments represent taxes owed
beginning on the bankruptcy filing date, April 6, and continuing
through the end of the municipal fiscal year, June 30. The
utility stated that it couldn't pay taxes or any other costs
incurred prior to the Chapter 11-bankruptcy filing. Rather,
their bankruptcy counsel and possibly a bankruptcy court will
determine to what extent and when pre-petition costs will be
paid.

The non-payment will have the greatest impact on counties and
school districts given their reliance on property taxes for the
majority of their discretionary revenue. Select tax allocation
bonds and special districts also may be impacted, although no
rating changes are expected at this time. Both counties and
school districts also receive substantial state funding.
However, for counties in particular, much of the state money is
restricted for specific uses. Cities will be impacted to a
lesser degree because their revenues are more diverse, including
sales, utility user, and hotel taxes. PG&E has transferred all
utility user taxes to the respective city, since the utility is
only the collecting agent for this revenue.

Outstanding tax and revenue anticipation notes (TRANs) will be
able to be paid regardless of the reduced PG&E payment. While
the note repayment generally relies heavily on property tax
receipts, Fitch rated TRANs have significant coverage of note
repayment set-asides from all pledged revenue. Also, the issuing
entities have substantial other resources available for
borrowing. These borrowable funds are sizable relative to the
TRAN principal amount and are a significant rating factor.
As municipalities prepare their budgets for fiscal 2001- 2002,
Fitch expects to see caution in recognition of the delinquent
tax payments and the associated penalties and interest. If the
PG&E delinquency remains outstanding at fiscal year-end,
municipalities may need to increase their TRANs borrowing size.
Fitch will continue to monitor the PG&E bankruptcy and tax
payments for their credit implications for municipal debt.


PUTNAM: Commerce Proposes Alternative To Liquidation of Fund
------------------------------------------------------------
The Commerce Group, Inc. (NYSE: CGI) responded to the
announcement by the Trustees of the Putnam Dividend Income Fund
(NYSE: PDI) of their plan to liquidate that Fund. The Trustees
announced on Friday that they plan to liquidate the Fund and
force shareholders to redeem their shares, rather than permit
the shareholders to maintain their holdings in the Fund and
consider new nominees for the Board of Trustees. Today, Commerce
proposed in a letter to the Trustees that all Fund shareholders
be given the opportunity to remain invested in the Fund or be
redeemed as proposed by the Trustees.

In its proposal, included in a filing made with the Securities
and Exchange Commission, Commerce seeks to allow shareholders to
maintain their original investment and interest in the value of
the Fund. Commerce believes that Putnam's sudden decision to
liquidate the Fund is intended to dissolve the Fund before
shareholders can vote for independent trustees at its June
annual meeting. Commerce stated that shareholders could lose
millions of dollars in value, since the Putnam action calls for
an immediate sale or distribution of the Fund's portfolio,
regardless of current prices or market conditions. Commerce also
noted that the Trustees' action fails to distribute to the
shareholders fair value for their pro rata share of the
intangible assets of the Fund. Putnam's Trustees took the action
after Commerce had questioned the Fund's past performance, and
indicated that Commerce would consider seeking a change in Fund
management. Over the past several weeks, Commerce had sought a
meeting with those Trustees to discuss these issues but was not
given an opportunity to meet with them.

Commerce requested in its letter that the current Trustees
reconsider the liquidation and permit shareholders to retain
their interests and to do so before beginning to liquidate the
Fund's assets. Commerce also said in its filing that it was
considering other alternatives, as well as evaluating whether
Putnam's actions were permissible under applicable law.


RAPID LINK: Files for Chapter 11 Bankruptcy Protection
------------------------------------------------------
Rapid Link Communications, which offers international Internet-
based communications services, filed for bankruptcy and has laid
off more than 60 percent of its staff, according to
LocalBusiness.com. The Atlanta-based company filed for chapter
11 protection on March 13. Rapid Link Chief Financial Officer
Michael Lee said that the company has cut about 120 employees
since October 2000. He cited a tough market and difficulty
raising additional funding as the primary reasons for Rapid
Link's financial troubles. He also said that the company had
some major debts that it could not handle. Rapid Link now has
the option to either liquidate or restructure. As of now, Lee
said, the company is working on restructuring. (ABI World, April
11, 2001)


SERVICE MERCHANDISE: Modifies Employee Retention Program
--------------------------------------------------------
Fleet Retail Finance Inc., as Collateral Agent and
Administrative Agent of the DIP Lenders filed a Statement and an
Amended Statement in support of Service Merchandise Company,
Inc.'s motion, whereas the Committee expressed concern over the
implementation of a further stay bonus. The Debtors and the
Committee consensually resolved the matter. Accordingly, the
Debtors' proposal was modified on record at the omnibus hearing.
The Debtors' request in the motion for the implementation of a
further stay retention bonus is not approved and has been
withdrawn by the Debtors in its entirety.

The Debtors authorized to establish and implement the 2001
Employee Retention Program on the terms and conditions set forth
in the motion, as modified.

The Debtors are authorized to modify the 2001 Employee Retention
Program with supplemental incentive programs:

      (a) a Supplemental Key Management Incentive Program for
Tier IV and Tier V employees in a maximum amount not to exceed
$1 million;

      (b) a Supplemental Operations Group Incentive Program for
selected Tier VI employees in pay grades 13, 14 and 15 in a
maximum amount not to exceed $1.25 million; and

      (c) a Supplemental Field Management Incentive Program for
Tier VI employees who are store managers and Tier VII employees
in a maximum amount of $2.7 million.

Tiers I, II and III employees will not be entitled to
participate in any of the Supplemental Incentive Programs.

The maximum amounts payable under the Supplemental Programs will
be subject to adjustment based on the Company Performance
Factor.

The maximum payment to any one employee in any of the
Supplemental Incentive Programs will not exceed a percentage of
base salary:

          27.0% for Tier IV employees;
          22.5% for Tier V employees;
          18.0% for Tier VI employees and
           9.0% for Tier VII employees.

The Debtors will establish individual performance goals for each
participant in the Supplemental Incentive Programs. 50% of the
entitlement of any employee under the Supplemental Incentive
Programs will be determined by the Debtors based solely on each
individual's actual performance against the employee's
individual performance goals through August 31, 2001 and such
awards will be paid in two equal installments on the last
business day of September and December 2001. The remaining 50%
entitlement will be determined by the Debtors based on each
individual's actual performance against the employee's
individual performance goals through December 31, 2001 as
modified by multiplying the proposed award by the Company
Performance Factor and will be paid in a single installment on
the earlier of (a) the effective date of any plan of
reorganization or (b) the last business day of March 2002.

The Company Performance Factor will be a ratio for which the
numerator is the actual Continuing EBITDAR results for the
Debtors' 2001 fiscal year and the denominator is the Debtors'
Threshold Plan forecast for Continuing EBITDAR of $60.2 million.

No payment of any unpaid award under the Supplemental Incentive
Programs will be made to an employee who leaves the employment
of the Debtors prior to a payment date unless the employee is
terminated by the Debtors without cause in which case the
Debtors will pay to such employee on the applicable payment
dates the amounts otherwise payable under the Supplemental
Incentive Programs prorated for the actual days of service of
the employee for the Debtors' 2001 fiscal year.

With respect to the Annual Incentive Program (AIP), the
benchmarks for Continuing EBITDAR will be:

(I) for Tiers I, II, III and IV employees,

      (a) $100 million for Stretch Bonus,
      (b) $75.2 million for Target Bonus;
      (c) $60.2 million for Threshold Bonus all of which will be
          net of AIP bonuses due under AIP.

     -- Tier I employees shall be entitled to participate in AlP
        based on 30% of base salary.

(II) for Tiers V, VI and VII employees,

      -- calculated based upon a benchmark equivalent to 50% of
         net Target AIP threshold and is not self-funding (i.e.
         the benchmark includes Threshold amounts for Tiers V, VI
         and VII).

The payment to which any employee is entitled under the 2001
Employee Retention Program shall be deemed an allowed
administrative expense of the Debtors' estates under 11 U.S.C.
Section 503(b)(1)(A). (Service Merchandise Bankruptcy News,
Issue No. 17; Bankruptcy Creditors' Service, Inc., 609/392-0900)


SPAR GROUP: Shares Subject To Delisting From the Nasdaq Market
--------------------------------------------------------------
SPAR Group, Inc. (NASDAQ:SGRP) one of the leading marketing
service companies in the United States, requested a hearing from
Nasdaq to appeal the potential delisting of the company's common
stock from the Nasdaq SmallCap Market. A hearing date has not
been scheduled.

Nasdaq informed the company that it had failed to comply with
Marketplace Rule 4310(c) (4), which requires that the company's
common stock have a minimum bid price of $1.00 per share.
Therefore, its common stock is subject to delisting.

Pursuant to the rules of the appeals process, the company's
common stock will not be delisted pending the hearing's outcome.
The company noted that there can be no assurance as to when the
Nasdaq will reach a decision, or that such a decision will be
favorable to the company. An unfavorable decision would result
in the immediate delisting of the company's common stock from
the Nasdaq SmallCap Market. If the company's common stock is
delisted from Nasdaq SmallCap, the company will attempt to have
its common stock traded on the NASD OTC Bulletin Board.
SPAR Group, Inc. a diversified marketing services company,
provides a broad array of productivity enhancing products and
services to help Fortune 1000 companies improve their sales,
operating efficiency and profits. Organized into four operating
divisions, SPAR provides in-store merchandising, database and
research services through its Merchandising Division in general
retail, mass market, drug, and grocery chains. Through its
Incentive Division, the company provides a wide variety of
consulting, creative program administration, travel and
merchandising fulfillment services to companies seeking to
retain, train, and motivate employees to higher levels of
productivity. Through its Internet Division, the company
provides a series of Internet productivity improvement
applications designed to help companies increase operating
efficiencies and train employees in remote locations. SPAR's
International Division, through a joint venture with a large
Japanese wholesaler, is poised to provide in-store
merchandising, database and research services in general retail,
mass market, drug, and grocery chains.


SYNBIOTICS CORPORATION: Appeals Nasdaq Decision To Delist Shares
----------------------------------------------------------------
Synbiotics Corp. (Nasdaq:SBIO) filed an appeal with Nasdaq to
rescind the decision to delist the Company from The Nasdaq
National Market.

Nasdaq has confirmed that the request for a hearing suspends the
delisting action until the Nasdaq Listing Qualifications Panel
reaches a final decision on the Company's appeal. The Company
announced today that it received notification from Nasdaq on
April 4, 2001 that its common stock is subject to de-listing
from the Nasdaq Stock Market for failure to comply with
Marketplace Rule 4450(a)(5), requiring maintenance of a minimum
bid price of $1 per share.

The Company can provide no assurances that the Nasdaq Stock
Market will grant the Company's request. If denied, the Company
anticipates that its shares will be traded on the NASD OTC
Bulletin Board.

Synbiotics Corp. is a leading developer, manufacturer and
marketer of veterinary diagnostics, instrumentation and related
products.


TRADEREACH: Unable To Raise Needed Funds To Continue Operations
---------------------------------------------------------------
Kazakhstan Minerals Corporation ("KazMinCo") announced that
TradeReach Limited has advised KazMinCo that it has been unable
to obtain the necessary financing to continue operating. Since
KazMinCo's last advance to TradeReachof US$219,000 in October
2000, TradeReach has attempted various avenues of financing in
North America and Europe. However, due to the depressed
conditions of the capital markets TradeReach has been unable to
secure the required funding to conclude the merger with KazMinCo
and advance its business model. As a consequence, TradeReach has
initiated voluntary liquidation proceedings under English
creditor relief legislation. Although KazMinCo will be reviewing
what avenues are available to it to recover its investment in
TradeReach, management does not expect to realize any material
amount from TradeReach's liquidation. In light of these
circumstances, KazMinCo is writing off its entire US$2,990,000
investment in TradeReach (comprised of advances totalling
US$1,105,000 and an equity investment of US$1,885,000).


UNICAPITAL CORP.: Exclusive Period Extended To June 5
-----------------------------------------------------
UniCapital Corp. won an extension to June 5 from April 10 of the
exclusive period during which only it may file a chapter 11
plan. Both the creditors' committee and the company's lenders
consented to the company's exclusivity extension request,
according to an order signed last Wednesday by Judge Cornelius
Blackshear of the U.S. Bankruptcy Court in Manhattan. As
reported, the company revealed in its exclusivity motion that it
has already reached an agreement with its lenders on the
preliminary outline of a chapter 11 plan but must still resolve
issues regarding the scheme of distribution, plan structure and
tax issues before a plan can be finalized and filed. (ABI World,
April 11, 2001)


VAST SOLUTIONS: Files Chapter 7 Petition in N.D. Texas
------------------------------------------------------
Wireless communications software developer Vast Solutions Inc.
ceased operations and filed for chapter 7 bankruptcy protection
in the U.S. Bankruptcy Court for the Northern District of Texas,
according to LocalBusiness.com. The Dallas-based company's
operations apparently have been disbanded. Vast's web site notes
that it has ceased operations, filed for bankruptcy and that no
recovery is expected for Vast investors. Vast developed software
designed to connect mobile workers and customers with corporate
information systems and the Internet using handheld wireless
devices. (ABI World, April 11, 2001)


VENCOR: Agrees TO Maintain $6,000,000 On Deposit With PNC Bank
--------------------------------------------------------------
At the request of PNC Bank, National Association as a condition
for continued provision of services, the Debtors have agreed to
maintain on deposit with the Bank $6,000,000 to secure payment
of the Treasury Management Obligations subject to and as
provided in the Collateral Agreement. Accordingly, the Debtors
asked the Court to authorize the execution of the Collateral
Agreement and grant them further relief as is just and proper.

Vencor maintains accounts at PNC Bank, National Association
which provides treasury management services to the Company
governed by the Treasury Management Services Comprehensive
Agreement including cash concentration services utilizing
automated clearing house debit and credit services pursuant to
the Automated Clearing House Origination Service Terms and
Conditions effective June 15, 1999. With the Court's approval,
Vencor continues to utilize the Bank's services similar to those
prior to commencement of the bankruptcy cases.

The Bank has advised Vencor and the DIP Agent that it is not
willing to continue to provide the Services unless it is
provided collateral to secure payment of the Treasury Management
Obligations in view of its exposure to credit risk for: (i)
overdrafts; (ii) its granting the Company provisional credit for
items that are returned or for Funds Transfers for which the
Bank does not receive final credit; and (iii) fees due the Bank
for Services.

The Debtors have determined that the Bank's continued provision
of services on an uninterrupted basis is critical to them at
this time for their operations and reorganization efforts.
Therefore, the Debtors believe that it is in their best interest
to enter into the Collateral Agreement with the Bank. (Vencor
Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


VIATEL INC.: Intends To Default Interest Payment On Senior Notes
----------------------------------------------------------------
Viatel, Inc. (Nasdaq: VYTL) announced financial results for the
year-ended December 31, 2000(1).

Revenue for 2000 increased to $749.5 million from $333.1 million
for 1999(2). Revenue from advanced services for 2000, excluding
capacity sales, increased to $88.1 million from $7.1 million for
1999. Revenue from capacity sales was $103.0 million for the
year compared to $84.5 million for the prior year.

Revenue for the fourth quarter of 2000 was $165.2 million, an
increase from the $122.7 million reported in the comparable
quarter of 1999, but a decrease from the $200.5 million reported
in the prior quarter primarily due to the lack of capacity
sales. However, revenue from advanced services in the fourth
quarter, excluding capacity sales, was $27.9 million, a 601%
increase from the $4.0 million reported in the fourth quarter of
1999, and a 13% increase from the $24.6 million reported in the
third quarter of 2000.

The Company also announced that its Board of Directors has
decided not to pay the April 15, 2001 interest payment on its
12.75% senior notes due 2008 and that Viatel Financing Trust I
has decided not to pay the April 15 dividend payment on its
7.75% trust certificates. Both the Company and the Trust have
until May 15, 2001 to make such payments. Additionally, the
Company has been advised by its auditors that the audit opinion
on the consolidated financial statements will include an
explanatory paragraph which raises substantial doubt about the
Company's ability to continue as a going concern.

"Last year was both a year of significant progress and a year of
major transformation for Viatel," said Michael J. Mahoney,
Viatel Chairman and Chief Executive Officer. "First and
foremost, we continued to expand the scale and scope of our
network. Today, our network assets include a state-of-the-art,
multi-conduit, 10,400-route kilometer Pan-European Network, a
160-gigabit per second trans-Atlantic cable, and metropolitan
fiber networks under development in seven cities. In sum, we
have assembled a solid platform upon which to deliver today and
tomorrow's bandwidth intensive data, Internet and voice
services.

"We have also continued to evolve our business, realigning our
operations to focus principally on the high-growth, higher-
margin corporate and broadband businesses. With customer
contracts including AOL and EcosseTel, we are just beginning to
enjoy market share gains in advanced services. And, with our
significant infrastructure investments behind us, we can now
focus solely on growing these businesses and generating positive
cash flow."

"However, the past year also posed significant challenges, most
notably in the capital markets. In realization of these market
realities, we have retained Dresdner Kleinwort Wasserstein and
Credit Suisse First Boston as financial advisors to assist us in
exploring strategic relationships and restructuring alternatives
for the Company. Despite these challenges, we remain confident
in the long-term market opportunity and enthusiastic about our
business model."

SG&A expenses for the year were $354.3 million, or 47% of
revenue, compared to $100.6 million, or 30% of revenue, for the
corresponding period in 1999(2). The higher year-over-year SG&A
expense is primarily attributable to the Company's acquisitions.

As a direct consequence of the Company's realignment initiatives
-- exiting certain countries in Europe, closing certain
consumer-oriented businesses and scaling back its wholesale and
prepaid businesses -- SG&A expenses in the fourth quarter
included costs, primarily related to increased reserves for
doubtful accounts and venture investments, of approximately $60
million. The Company also anticipates that it will incur
approximately $80 to $100 million during 2001 in accelerated
depreciation on certain fixed assets related to its realignment
initiatives.

EBITDA(3) loss for 2000 was $156.9 million compared to a loss of
$18.0 million for 1999. Adjusted EBITDA(4) for the year was a
loss of $85.0 million compared to $12.3 million for 1999. Net
loss attributable to common stockholders for 2000 was $1,573.7
million, or $(31.53) per share, versus $219.2 million, or
$(7.43) per share for 1999. The substantial increase in net loss
per share reflects restructuring and impairment charges of
approximately $900.0 million consisting primarily of impairment
of goodwill and certain intangible assets, as well as the write-
down of certain fixed assets. These charges are attributable to
the Company's reassessment of its ability to recover certain
assets, reflecting changes in the Company's business and the
dynamics of the overall telecommunications landscape. Excluding
the effect of restructuring and impairment charges, net loss
attributable to common stockholders would have been $673.7
million, or $(13.50) per share.

At December 31, 2000, the Company had restricted and non-
restricted cash and cash equivalents, marketable securities and
cash securing letters of credit for network construction of
$397.0 million, and approximately $175.0 to $200.0 million at
March 31, 2001. The Company had gross property plant and
equipment of $1.6 billion, after taking into consideration the
asset impairment recognized in the fourth quarter of 2000.
For more information about Viatel and the products and services
it offers, visit http://www.viatel.com.


W.R. GRACE: Honoring Customer Obligations
-----------------------------------------
W. R. Grace & Co.  manufacture and sell a wide variety of
specialty products to many industries worldwide. The Debtors
sell their products to a wide range of customers, including oil
refiners, plastics manufacturers, paint producers, toothpaste
suppliers, ready-mix and pre-cast concrete producers,
fireproofing contractors, building materials distributors,
multi-national construction and engineering contractors, food
and beverage producers, canners and bottlers, and other
industrial manufacturers. The Debtors offer discounts and
rebates, on a customer-by-customer basis, with respect to many
of their products because many of their customers are large
consumers who order in large quantities. Further, competitive
pressures in many of the sectors in which the Debtors sell their
products necessitate that discounts and rebates are offered. The
Debtors also offer these discounts and rebates, in part, as an
incentive to their customers to purchase most, if not all, of
their product requirements from the Debtors.

Certain of the Debtors' customers also require that the Debtors'
products meet their specialized requirements. These requirements
omen relate to state-of-the-art specialty chemical technology
and competitive pricing. In order to meet such requirements, the
Debtors, on a case-by-case basis, (i) provide volume price
discounts or rebate programs, (ii) negotiate special warranties
or policy allowances and (iii) license, when necessary,
technology from third parties.

To develop and sustain positive reputations in the marketplace
for their products and services, the Debtors provide their
customers various discount, rebate and warranty programs, as
well as the licensing of intellectual property, among other
similar programs, practices and commitments. The common goals of
these Customer Practices have been to meet competitive
pressures, ensure customer satisfaction, and generate goodwill
for the Debtors thereby retaining current customers, attracting
new ones, and ultimately enhancing net revenue.

The great majority of the Customer Practices are provided to
customers under existing purchase orders and contracts. The
Debtors anticipate that they will continue to perform under and
perhaps seek to assume a number of the contracts underlying the
Customer Practices and, as a result, believe that it is the most
prudent and cost-efficient course of action to ensure that the
Debtors continue to perform under such contracts. Moreover, many
of the Customer Practices will not arise until after the
Petition Date, and therefore arguably constitute ordinary course
expenditures of the Debtors. However, out of an abundance of
caution and to give its customers assurances that the Customer
Practices will continue to be performed and honored by the
Debtors, the Debtors have filed this Motion to the extent that
the Customer Practices, as they relate to prepetition
agreements, orders, and sales regarding the Debtors' products
and services, may represent unperformed obligations of the
Debtors and may evidence prepetition claims against the Debtors.

David B. Siegel, the Debtors' Senior Vice President and General
Counsel, told the Court that, over the next year, the Debtors
estimate the aggregate cost of performing their obligations in
regard to the Customer Practices will approximate:

      Discounts and Rebates                    $18,000,000
      Warranties and Performance Guaranties      4,000,000
      Royalty Payments                          10,000,000
                                               -----------
                                               $32,000,000

Thus, the Debtors sought and obtained an order authorizing, but
not directing, them, in their business judgment, to (a) perform
such of their prepetition obligations related to the Customer
Practices as they see fit, and (b) continue, renew, replace,
implement new, and/or terminate such of the Customer Practices
as they see fit, in the ordinary course of business, without
further application to the Court.

Nothing in his order, nor the Debtors' decision to honor any
Customer Practice, Judge Newsome cautions, shall constitute (a)
an admission by the Debtors as to the validity of the underlying
obligation or a waiver of any rights the Debtors may have to
subsequently dispute such obligation or (b) assumption of any
agreement, contract or lease under 11 U.S.C. Sec. 365. (W.R.
Grace Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


WORLD ACCESS: TelDaFax To Liquidate As DT Refuses Cash Payment
--------------------------------------------------------------
World Access, Inc.'s (Nasdaq: WAXS) talks with Deutsche Telekom
AG ("DT") regarding the obligation owed to DT by World Access'
subsidiary, TelDaFax AG (Germany: TFX), have failed to reach a
satisfactory conclusion in spite of World Access' announced
commitment to fund that obligation. Following several days of
negotiations in which World Access indicated its intent to honor
TelDaFax's debt to DT, Deutsche Telekom disconnected TelDaFax's
circuits at mid-day on April 5, effectively cutting off service
to most of TelDaFax's German customers.

Over the course of the following days, World Access continued to
offer DT payment in exchange for restoration of TelDaFax's
circuits and pre-payments by TelDaFax for future services. The
Company was set to wire transfer DM 30 million to DT on Friday,
April 6, and was prepared to contractually commit to pay the
remaining outstanding balance by the end of May. An agreement
providing for these payments and for the restoration of TelDaFax
service was delivered to DT by the Company's German counsel on
the morning of April 6, and would have provided for service to
be restored by midday on Saturday, April 7. After delaying
discussion of the agreement until Friday evening, DT abruptly
suspended talks until Monday April 9, effectively eliminating
any opportunity for TelDaFax circuits to be restored before
Tuesday April 10.

As a consequence of DT's apparent lack of desire to reach an
agreement, and the resulting delay in reactivating TelDaFax
service, World Access' management concluded today that
irreparable harm has been caused to the commercial prospects of
TelDaFax. It is management's belief that the vast majority of
TelDaFax's long distance customers have switched to another
carrier, most likely DT itself, during the period that service
has been down. As a result of DT's actions, TelDaFax, which
filed for insolvency on April 2 in an attempt to avoid
cancellation of services with DT, is expected to be liquidated
by the insolvency administrator appointed by the court.

John D. Phillips, Chairman and Chief Executive Officer of World
Access said, "On March 31, World Access committed to Deutsche
Telekom that it would be in a position to guarantee funding of
TelDaFax's obligations to DT by Friday, April 6. We met that
commitment. Unfortunately, we now believe that it was never the
intention of DT to come to a good faith agreement on terms that
were in their financial interest as a creditor. As a creditor,
their interest was best served by full collection of past due
amounts and prepayment for services until such amounts were
collected. This is what we agreed to provide, including an
immediate payment of more than half of the outstanding balance.

"As a competitor, however, DT's financial interest was obviously
best served by recovering the vast majority of TelDaFax's
customer base, and earning gross margins on that business which
over time will be well in excess of the amounts owed by
TelDaFax. DT's actions clearly indicate to us that it would
prefer to have its former customers returned and its monopoly
position restored, rather than receive cash payments for
TelDaFax's debt.

"This is an obvious example of the failure of deregulation, when
a former monopolist is allowed to favor its interests as a
competitor over those as a creditor. As long as competitive
carriers are entirely dependent on interconnection with the
former monopoly, there must be protections against this sort of
self-serving anti-competitive behavior. This action has not only
destroyed the value created by the fine efforts of TelDaFax's
employees and the capital contributions of its investors, but it
has also dealt a serious blow to competition itself."

World Access has engaged its German and U.S. counsel to evaluate
potential claims to be brought against DT in Germany, Brussels
and/or the U.S.

                     About World Access

World Access is focused on being a leading provider of bundled
voice, data and Internet services to small- to medium-sized
business customers located throughout Europe. In order to
accelerate its progress toward a leadership position in Europe,
World Access is acting as a consolidator for the highly
fragmented retail telecom services market, with the objective of
amassing a substantial and fully integrated business customer
base. To date, the Company has acquired several strategic
assets, including Facilicom International, which operates a Pan-
European long distance network and carries traffic for carrier
customers, NETnet, with retail sales operations in 9 European
countries, and WorldxChange, with retail accounts in the U.S.
and Europe. World Access, branding as NETnet, offers services
throughout Europe, including long distance, internet access and
mobile services. The Company provides end- to-end international
communication services over an advanced asynchronous transfer
mode internal network that includes gateway and tandem switches,
an extensive fiber network encompassing tens of millions of
circuit miles and satellite facilities. For additional
information regarding World Access, please refer to the
Company's website at http://www.waxs.com


WORLD ACCESS: Noteholders Consent to Stay Involuntary Petition
--------------------------------------------------------------
World Access, Inc. (Nasdaq: WAXS) announced that it has filed
the Stipulation and Consent Order, executed last week by the
Company and its noteholders, with the United States Bankruptcy
Court for the District of Delaware to stay the bankruptcy case
against World Access commenced on April 4, 2001 by three holders
of World Access' 13.25% Senior Notes due 2008. A copy of the
Order has been filed on Form 8-K with the Securities and
Exchange Commission.

World Access has retained UBS Warburg to explore alternatives to
restructure its debt obligations and identify additional sources
of capital.  UBS Warburg is expected to initiate further
discussions with the holders of the Notes, evaluate the
restructuring of other obligations, and seek sources of new
private equity capital.  While World Access' management believes
that a significant restructuring is possible and in the best
interest of World Access shareholders and creditors, there can
be no assurance of a successful restructuring.



BOOK REVIEW: Law and the Lawyers
--------------------------------
Author: Edward S. Robinson
Publisher: Beard Books, $34.95
http://bankrupt.com/books/

Maybe there is more to legal decision-making than just "what the
judge had for breakfast."  Now the pendulum has swung the other
way. But in the 1930s, with Karl Llewellyn, Jerome Frank, and
Edward S. Robinson carrying the banner, the Legal Realists
sought to bring jurisprudence down from lofty realms into the
real world.  They challenged the notion of the law as a body of
"black letter" rules, arguing that jurists were influenced by
psychological and sociological forces of which they were not
aware.  They urged a jurisprudence based on precedent, rather
than code.  Here's a jingle Karl Llewellyn used to sing to his
students at the University of Chicago:

         Some say our Law's in a sorry plight; and folly its
          fruition.
         The answer to that is to set it right in the Common Law
          Tradition.

Edward S. Robinson was a leader of the Legal Realism movement.
Law and the Lawyers was originally published in 1935.  Robinson
said that "[w]hile the scientific method has been employed to
transform the face of the earth and the physical conditions of
life, and while that same method has been employed to develop
hardier bodies and to suppress at their sources many infectious
diseases, only slight application of this mode of thought has
been made to social control...We are no longer content to
classify the undernourished child as naturally puny.  Yet large
numbers of us are willing to say that recent economic conditions
were due to a depression, that Dillinger became troublesome to
society because of his hard character, that the old-time barroom
drunkard can be eliminated if tables are substituted for bars
and if saloons are called taverns."

Society had not adjusted to the onslaught of recent
technological advances, Robinson felt, and needed a profession
of "social engineers."  Jurists would fit the bill.  Robinson
argued for legal naturalism; distinctions between good and bad
could be reduced to nonnormative or factual terms and
statements.  He hoped that with the "development of a
thoroughgoing naturalistic jurisprudence we shall be able to
incorporate into the science of law a sympathetic and useful
understanding of the curious mental traits of judges, juries,
politicians, and laymen to the end that there may be a basis for
legal control comparable to that which already exists in the
more enlightened areas of education and psychiatry."  The
naturalistic student of the law, he claimed, will "abstain from
the common practice of wishing away the multifarious human
attitudes that determine social behavior. He will, as part of
his regular business, bring into the picture such objective
facts about crime and criminals as can be obtained.  He will not
give in to the ancient delusion that social reform will work if
it is logically sound.  He will always be embarrassingly
insistent that psychological forces are rarely to be set into
retreat by a volley of dialectic."

Okay, so the Realists were a little extreme.  But these legal
scholars made a great contribution to American jurisprudence
that affects us even today. They fought for New Deal legislation
to better the lives of working-class Americans caught in the
Depression, ended Jim Crow laws that prevented blacks from
voting, saw through Brown vs. Board of Education, and enthused
several generations of law students.

Edward S. Robinson was a professor of psychology at Yale
University and a lecturer at the Yale School of Law.

                            *********

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


                           *********


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

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

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