TCR_Public/010427.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 27, 2001, Vol. 5, No. 83

                            Headlines

ARMSTRONG: Transport Int'l Moves for Relief from Automatic Stay
AXXENT INC.: Creditors File Involuntary Petition in Ontario
CALPINE CORP.: S&P Rates $850MM Convertible Debentures at BB+
COLE COMPUTER: Recurring Losses Raise Going Concern Doubts
CORMAX BUSINESS: Needs More Funds To Sustain Operations

DOW CORNING: Reports First Quarter 2001 Financial Results
DRUG EMPORIUM: Hires Keen Realty To Sell Retail Leases
ECO SOIL: Posts $11.3 Million Net Loss In 2000
EMPRESA ELECTRICA: Moody's Cuts Loan Certificates Rating To Caa1
FINOVA GROUP: Holiday Inn Seeks Relief From Automatic Stay

FLOWER FOODS: Fitch Rates Senior Secured Credit Facilities BB+
GREYSTONE DIGITAL: Securities Subject to Nasdaq Delisting
HEALTH CARE: Year-End Loss Triggers Going Concern Doubts
HEILIG-MEYERS: Home Furnishing Retailer Begins Liquidation Sales
HOLT GROUP: Judge Grants Interim Okay For DIP Financing

ICG COMMUNICATIONS: Court Fixes April 30 Bar Date
IGI INC.: Robert McDaniel Steps Down As Chief Executive Officer
LASER MORTGAGE: Board Endorses Liquidation and Dissolution Plan
LERNOUT & HAUSPIE: Korean Unit Files For Bankruptcy Protection
@LINK HOLDINGS: Case Summary & 21 Largest Unsecured Creditors

MARINER: NovaCare Moves To Modify Court's Financing Orders
OWENS CORNING: NLRB Gives Notice Of Pendency Of Labor Litigation
OWENS CORNING: Provides Update On Restructuring Activities
PACIFIC GAS: Seeks Okay To Honor Low-Cost Power Contracts
PHELPS DODGE: Fitch Cuts Long-Term Debt Rating To BBB from BBB+

PILLOWTEX CORP.: Closing North Carolina Plants In June
PLANETGOOD TECH: Selling All Assets To TechInvest for $390,000
RUSSELL-STANLEY: Moody's Slashes Senior Sub Debt Rating To C
SAFETY-KLEEN: Exclusive Period Further Extended To October 30
SECURITY ASSOCIATES: Looking For Funds To Meet Debt Obligations

SILVER CINEMAS: Wins Court Nod For $40 Million Asset Sale
STAGE STORES: Files Reorganization Plan and Disclosure Statement
STELLAR FUNDING: S&P Downgrades Ratings On Two Classes of Notes
SUN HEALTHCARE: Hires Bouchard As Special Litigation Counsel
UNITEL VIDEO: Sells Studio Business Assets For $23 Million

VELOCITYHSI INC.: Completes $2.5 Million Financing
VENCOR INC.: Settles Ogden Environmental's Claims
W.R. GRACE: Court Okays Payment Of Corporate Representation Fees
WINSTAR: Obtains Nod To Continue Using Current Business Forms
WINSTAR: Shares Knocked Off the NASDAQ Market

BOOK REVIEW: GOING FOR BROKE: How Robert Campeau Bankrupted the
              Retail Industry, Jolted the Junk Bond Market, and
              Brought the Booming 80s to a Crashing Halt

                            *********

ARMSTRONG: Transport Int'l Moves for Relief from Automatic Stay
---------------------------------------------------------------
Prior to the commencement of its chapter 11 cases, Armstrong
Holdings, Inc. entered into a Vehicle Lease Agreement with
Transport International Pool Inc., leasing six vehicles from
Transport International. Under the terms of the lease, the
Debtor agreed to make 24 consecutive monthly payments of
$282 per vehicle to Transport International, with the first
installment due on December 1, 1998 and subsequent payments due
on the first of each and every month thereafter, through and
including November 1, 2000, the maturity date of the Lease. The
leased vehicles are:

Vehicle No.     SLA No.       Description      Date of Delivery
----------      ------        -----------      ----------------
   530698        782493    53' Dry Freight Van      10-23-98
   534174        782599    53' Dry Freight Van      10-23-09
   531466        790869    53' Dry Freight Van      11-03-98
   532768        790860    53' Dry Freight Van      11-03-98
   530882        789211    53' Dry Freight Van      11-13-98
   534924        789212    53' Dry Freight Van      11-16-98

Transport International alleged that the Debtor defaulted
prepetition, having failed to make payments to it commencing
with the installment due in November 2000. Since the Petition
Date, the Debtor has failed to make any payment to Transport
International, and has failed to return the vehicles to
Transport International, despite the expiration of the lease by
its own terms. Transport International believes that the Debtor
is still in possession of the vehicles subject of the Lease, and
is using them in the operation of its business. Transport
International asserted that, as a result of such usage, its
interest in, and the value of the vehicles, is decreasing.

By motion, Transport International sought relief from the
automatic stay with respect to its interest in, and to the
vehicles, and authorize Transport International to take any, and
all actions necessary and/or proper to enforce its rights with
respect to the vehicles, including but not limited to, taking
possession of and selling the vehicles. Kevin J. Mangan, at
Walsh Monzack and Monaco, P.A., in Delaware, told Judge Farnan
that Transport International is entitled to the requested
relief, taking into account that: (a) the Debtor does not have
any equity in the vehicles; (b) the vehicles are not necessary
to an effective reorganization; and (c) Transport
International's interest in, and to the vehicles, is not
adequately protected. He added that, as of the date of the
Motion, the Debtor owes Transport International $15,458.64, not
including attorneys' fees and costs. (Armstrong Bankruptcy News,
Issue No. 6; Bankruptcy Creditors' Service, Inc., 609/392-0900)


AXXENT INC.: Creditors File Involuntary Petition in Ontario
-----------------------------------------------------------
AXXENT Inc. a Canadian local exchange carrier (CLEC) disclosed
that the holders of its senior notes have applied to the Ontario
Superior Court of Justice for an order putting the Company under
the protection of the Companies' Creditors Arrangement Act and
for the appointment of Ernst & Young Inc. as monitor. The
Company also announced that all of the directors and officers of
AXXENT Inc. have resigned and that all of the directors of
AXXENT Corp. have resigned. (New Generation Research, April 25,
2001)


CALPINE CORP.: S&P Rates $850MM Convertible Debentures at BB+
-------------------------------------------------------------
Standard & Poor's assigned its double-'B'-plus rating to Calpine
Corp.'s $850 million convertible debentures (CARZ).

In addition, Standard & Poor's affirmed all of its ratings on
Calpine and its debt. The ratings include: Calpine's double-'B'-
plus corporate credit rating, its double-'B'-plus rating on the
company's $3.7 billion senior-unsecured debt, and its single-
'B'-plus rating on Calpine's $1.12 billion convertible preferred
securities and its double-'B'-plus rating on Calpine Canada's
$1.5 billion of senior-unsecured debt. The outlook is stable.

The issuance of the bonds will have a slightly negative effect
on Calpine's credit profile. Calpine will use $717 million of
the $850 million CARZ to refinance existing project finance debt
at 10 of its generation facilities. The remaining $133 million
will be used to prefund existing construction projects and for
other corporate purposes. The additional debt should not
adversely affect Calpine's interest coverage ratios from 2001-
2003 because of the zero coupon feature. However, interest can
begin to accrue at 7.25% in 2004, or at any later put date, if
Calpine's stock price causes the convertible bond price to trade
at 98% of accreted value. Yet, the convertible bonds stop
accruing interest if they subsequently begin trading at 98% of
accreted value or more. If the bonds begin to accrue interest,
average interest coverage in 2004-2005 would drop from 2.95
times (x) to 2.80x. The change is due to the additional $850
million of corporate level debt at Calpine.

Currently, Standard & Poor's does not consolidate the project
finance debt for use in interest coverage calculations because
of the nonrecourse nature of the debt and Calpine's ability to
walk away from a project if financial difficulties arise. The
bonds also add significant refinancing risk because of the put
option of bondholders, which includes accrued interest, in years
1,3,5,7,10 and 15.

Calpine's double-'B'-plus corporate credit rating reflects the
following risks:

      -- Calpine's risk profile continues to increase as it
pursues an extensive U.S. merchant power plant development
strategy. Cash flows exposed to long-term, market-based energy
prices will likely increase to about 80% by 2004 from 60% in
2000. A sudden drop in energy prices could also impair financial
flexibility.

      -- Calpine's base case forecast minimum and average
consolidated funds from operations (FFO) interest coverage
ratios are 2.5x and 2.8x, respectively, over the next five
years. When Standard & Poor's considers the potential effects of
lower energy prices, minimum and average consolidated funds from
operations interest coverage ratios drop to 2.3x and 2.4x,
respectively, over the next four years. Standard & Poor's
adjusts the coverage ratios to account for guarantees on lease
payments and partial debt treatment of the convertible
preferred stock.

      -- Calpine must also acquire about 8-11 trillion cubic feet
of natural gas reserves at below market costs in order to attain
its forecast high gross margins--a task that could become
expensive ($2 billion a year), if not riskier than generation.

      -- Calpine's rapid and aggressive growth strategy is
predicated on it being able to develop and manage 70,000 MW of
operating generation by 2005--just under 6,000 MW is in
operation today.

      -- Calpine is still developing the expertise to market
power from what will be a large asset pool in geographically
diverse power markets--markets that in general are just
beginning to face deregulation and competition.

      -- Calpine's rapid growth forecast assumes that its focus
on gas-fired, F-generation technology will produce operating
margins of about 30%--a strategy that could come under pressure
if high margins attract other new entrants, or if technology
more efficient than the F-turbine erodes Calpine's market share,
or margin, or both.

      -- Calpine's target of 65% leverage to total capitalization
will tend to make the company more exposed to electricity price
volatility, or even a price collapse, than more conservatively
leveraged generation companies. The 65% leverage ratio includes
lease obligations and partial debt treatment of the convertible
preferred stock.

      -- Significant revenue exposure to PG&E Corp. and
California--About 1,325 net MW (23%) of Calpine's total 5,849
net MW of generation is exposed to California-based counterparty
risk, but only 575 net MW (9.8%) is under contract to PG&E. As
of March 31, 2001, unpaid receivables from PG&E totaled about
$297 million.

However, the following strengths adequately mitigate the above
risks at the double-'B'-plus rating level:

      -- Less than half of the existing portfolio of operating
power projects has project level debt, some in the form of
leases, which should provide adequate cash flow to service
Calpine's senior-debt obligation.

      -- The company's pro forma portfolio interest in 74 power
plants and steam fields, representing 19,900 net MW of capacity
creates a true portfolio effect because no single project
contributes more than 10% of cash flow.

      -- Calpine's existing projects all have excellent operating
histories with an average availability for gas-fired and
geothermal plants of 95.7% and 98.9%, respectively, through
1998.

      -- To date, all of Calpine's construction projects have
been built on time and within budget.

      -- Early financial results indicate that Calpine has sited
its new plants in areas where it can take advantage of capacity
shortages or transmission constraints, thus allowing its plants
to earn above-average returns in the near term.

      -- Calpine has successfully raised the capital and
assembled the human resources needed to manage its 44%
annualized growth in the electricity generation business over
the past few years.

Calpine, a San Jose-based corporation founded in 1984, is
engaged in the development, acquisition, ownership, and
operation of power generation facilities, principally in the
U.S. Calpine's current portfolio consists of 50 operating
projects, with a net ownership interest in about 5,800 MW.
Calpine's development and growth strategy seeks to capitalize on
opportunities in the power market through an ongoing program to
acquire, develop, own, and operate electric power generation
facilities or interests in such facilities, and marketing power
and energy services to utilities and other end users.

                       Outlook: Stable

Continued efficient operation of existing plants, an efficient
construction program and the financial performance of the
merchant facilities within expected tolerance limits indicate a
stable outlook. Sustained weak performance at the facilities or
merchant electricity pricing levels that are significantly lower
than forecast could lead to a downgrade. Reduced debt to total
capitalization levels, higher debt service coverage levels, or a
demonstrated ability to manage the exponential growth of the
company over the next three years could lead to an upgrade,
Standard & Poor's said.


COLE COMPUTER: Recurring Losses Raise Going Concern Doubts
----------------------------------------------------------
Electronic Service Co., Inc. was formed in November 1991 as an
Oklahoma corporation for the purpose of acquiring and operating
an electronics repair business. In 1996, the Company adopted the
dba Computer Masters and changed its business to personal
computer "clone" hardware assembly, sales, and repair, utilizing
both Intel and AMD microprocessors. The Company changed its name
to Cole Computer Corporation and its state of incorporation
(Nevada) incident to its reverse acquisition ("reorganization")
in 1998. Electronic Service Co., Inc. is now a wholly-owned
subsidiary of the Company. The Company has thirteen retail
stores in Oklahoma, Arkansas and Texas, and sells to area
government agencies and military installations.

Company revenue for the year 2000 was $10,940,140; in the year
1999, revenue was $8,737,770. The Company experienced net losses
in 2000 of $(1,788,710); net loss in 1999 was $(659,293).
The auditing firm of Malone & Bailey, PLLC, of Houston, Texas,
said, in its Auditors Report to the Board and Stockholders on
March 9, 2001:

"[T]he Company's negative working capital position, losses
incurred for the last three years, and dependence on outside
financing raise substantial doubt about the Company's ability to
continue as a going concern."


CORMAX BUSINESS: Needs More Funds To Sustain Operations
-------------------------------------------------------
Revenue for the year consisted of the following components:

      Website development and Programming     $105,565
      Business Services                       $ 89,055
                                             ---------
                                              $194,620

General and Administrative expense and selling and marketing
expenses totaled $2,410,428 for the year. The expenditures were
incurred as follows:

Watchout! Inc. prior to its acquisition of

      Cormax Business Solutions Ltd.       $1,330,514
      Cormax Business Solutions Ltd.       $1,079,914
                                           ----------
                                           $2,410,428

The corporation recognized a loss of $291,720 in the value of
its investment in Micromatix.net by reducing its investment to
the quoted market value at December 31, 2000.

The Company's auditing firm, Michael Johnson & Co., LLC, of
Denver, Colorado, stated in its March 28, 2001 Auditors Report
that, "conditions exist[] which raise substantial doubt about
the Company's ability to continue as a going concern unless it
is able to generate sufficient cash flows to meet its
obligations and sustain its operations."

Net loss for the year 2000 was $(1,570,017) as compared with the
net loss for 1999 of $ (46,198).


DOW CORNING: Reports First Quarter 2001 Financial Results
---------------------------------------------------------
Still stuck in the chapter 11 restructuring process and multiple
appeals from Judge Spector's confirmation order, Dow Corning
Corp. reports consolidated net income of $27.7 million for the
first quarter of 2001, 18 percent lower than the $33.9 million
reported in Q1 of 2000. First quarter 2001 sales were $646.7
million, a 7 percent decline from sales of $694.7 million in
last year's first quarter.

Many of our markets were significantly affected by the global
slowdown in industrial activity and by adverse foreign exchange
rate movements, Dow Corning's vice president for planning and
finance and chief financial officer Gifford Brown said.
Restructuring and continuing expense reduction are creating a
leaner cost structure and a streamlined supply chain that will
make us more competitive and responsive to customer needs."

Dow Corning, which develops, manufactures and markets diverse
silicon-based products, currently offers more than 7,000
products to customers around the world. Dow Corning is a global
leader in silicon-based materials with shares equally owned by
The Dow Chemical Company (NYSE: DOW) and Corning Incorporated
(NYSE: GLW). More than half of Dow Corning's sales are outside
the United States.


DRUG EMPORIUM: Hires Keen Realty To Sell Retail Leases
------------------------------------------------------
Drug Emporium Inc. has hired Keen Realty LLC to sell the
company's excess retail leases, according to Dow Jones. Parent
company Keen Consultants said a bankruptcy auction is scheduled
for May 16 with the sealed-bid deadline set for May 14. Drug
Emporium has 33 retail sites available in nine states, most of
which are located in Georgia and Ohio. Drug Emporium filed for
chapter 11 on March 26. (ABI World, April 25, 2001)


ECO SOIL: Posts $11.3 Million Net Loss In 2000
----------------------------------------------
Eco Soil was incorporated under Nebraska law in November 1987.
The Company initially marketed a program that developed blended
fertilizers and soil amendments to golf courses and to other
residential and commercial customers in the Lincoln, Nebraska
area. In 1991, the Company decided that it needed a broader
strategic vision and, consequently, concentrated on the
development of biological inoculation service and nutrient
programs. In the next several years, the Company developed its
BioJect, CleanRack(TM), CalJect(TM) and SoluJect(TM) systems for
distribution to the turf maintenance industry. More recently,
the Company has added its FreshPack products to its line of
microbial-based programs.

In 2000, revenues from continuing operations were $34.4 million,
an increase of 2.9% versus $33.5 million in 1999. However, in
2000, net loss from continuing operations was $11.3 million or
$0.60 per share versus a net loss of $12.3 million or $0.70 per
share in 1999.

McGladrey & Pullen, LLP, of San Diego, California, Company
auditors state in their letter to the Board and Stockholders
under date of March 14, 2001: "...the Company has incurred
recurring operating losses and has limited working capital. In
addition, the Company is currently seeking a new credit facility
to replace the expired facility with the current lender. These
conditions raise substantial doubt about the Company's ability
to continue as a going concern."


EMPRESA ELECTRICA: Moody's Cuts Loan Certificates Rating To Caa1
----------------------------------------------------------------
Due to the tight liquidity position of Empresa Electrica del
Norte Grande S.A. (EDELNOR) caused by continued softness in
electric prices in Northern Chile, Moody's Investors Service
downgraded its rating on the company's loan participation
certificates to Caa1 from B1. The rating outlook is negative.

Specifically, downgraded ratings include:

      * US$90 Million 10.5% Senior Loan Participation
        Certificates due June 15, 2005 and

      * US$250 Million 7.75% Senior Loan Participation
        Certificates due March 15, 2006.

Moody's relates EDELNOR's liquidity position is weak. It expects
cash coverage of debt service obligations to hover around 1.0x
during each of the next four years. Moody's believes that the
company has sufficient cash resources to meet all obligations
over the next two years due to asset sales currently
contemplated and access to funds at an intermediate holding
company.

Accordingly, the weak operating environment is a direct
outgrowth of an extreme excess capacity that exists in Northern
Chile, which is not likely to materially improve for about five
years. EDELNOR's plan for improving its competitive position had
been focused on burning a blend of petroleum coke (pet coke) and
coal at Mejillones I and II , which under certain scenarios,
could result in improving the competitiveness of EDELNOR's coal
assets, Moody's says. However, EDELNOR is reportedly still
seeking approval to burn pet coke and the price of pet coke has
increased materially such that the pet coke option at current
prices is less attractive. EDELNOR continues to pursue this
option since the ability to burn this fuel source will improve
the plant's flexibility. The company has completed its test burn
with pet coke and intends to submit a new environmental impact
study in May or June, reports Moody's.

Headquartered in Santiago, Chile, EDELNOR is a utility engaged
in electricity generation and transmission in Northern Chile.


FINOVA GROUP: Holiday Inn Seeks Relief From Automatic Stay
----------------------------------------------------------
FINOVA Capital Corporation, as the successor in interest to
FINOVA Realty Corporation which in turn is the successor in
interest to Belgravia Capital Corporation, provided financing to
Old Town Hotel L.L.C. which became the licensee of a Holiday Inn
hotel located at 7353 E. Indian School Road, Scottsdale, Arizona
85251 by way of an Addendum to the License Agreement between H-W
Hotel Investors Limited Partnership and Holiday Hospitality
Franchising, Inc. f/k/a Holiday Inns Franchising, Inc.

Pursuant to the action brought by FINOVA Capital Corporation
against Old Town Hotel, L.L.C., (No. CV 2001-000043), the
Superior Court of Arizona for the Maricopa County appointed
Lodging, Inc., an Arizona Corporation, Receiver of the premises
of the subject Holiday Inn hotel.

Holiday complained to the Court that the Receiver has operated
the Hotel without a license agreement with Holiday, or a valid
agreement of any kind, has not accepted Holiday's proposals
including that for a temporary license agreement but continues
to represent the Hotel to the public as affiliated with Holiday,
"through prominent signs on the Hotel property, fully visible to
the public, identifying the Hotel as a Holiday Inn. In addition,
the Receiver has continued to use Holidays' Marks (trademarks
and/or service marks) and System in the operation and
advertising of the Hotel.

The Marks and the System, Holiday asserted, are owned and
licensed by Holiday and/or its affiliates. Holiday averred that
the products and services of Holiday and/or its affiliates,
through its authorized licenses and otherwise, have been
extensively advertised and offered within the state of Arizona
and throughout the United States and the world, and have earned,
as a result of the expenditure of vast amounts of money,
corporate energy and hard work, enormous commercial success,
favorable recognition and acceptance by the traveling public.
Holiday and/or its affiliates have employed the Marks to
distinguish their products and services from others. These
Marks, Holiday pointed out, are duly registered in the United
States Patent and Trademark Office. These, together with the
goodwill of the business associated with them, Holiday said, are
of great and inestimable value.

Holiday also complained that although the Receiver has
maintained a general liability insurance at the Hotel for the
benefit of Holiday, it has refused to indemnify or otherwise
guarantee Holiday against liability for uninsured or uninsurable
claims, which is a typical requirement of principals of
Holiday's licensees. This, Holiday complained, unlawfully and
unjustifiably exposes Holiday to significant liability not
contemplated under Holiday's standard license agreements or the
terminated Old Town License Agreement.

Holiday has depicted a situation whereby the Receiver is using
the Holiday Marks and System that were used by Old Town in
operating the hotel but in the absence of a licenser-licensee
agreement and without carrying out the obligations of a
licensee. Moreover, the Receiver has allegedly unlawfully
solicited and sold its products and services to customers and
potential customers of Holiday in violation of the Lanham Act,
and has represented such products and services to be Holiday's
products and services.

Pursuant to the Old Town License Agreement, Old Town agreed,
among other things:

      -- to pay certain monthly royalty fees to Holiday;

      -- to conduct the operation of the Hotel in accordance with
the Old Town License Agreement and the Holiday Inn(R) Standards
Manual;

      -- to pay to Holiday certain damages in the event the Old
Town License Agreement was terminated due to a default by Old
Town; and,

      -- upon termination of the Old Town License Agreement,
immediately cease using, the Holiday Inn(R) name, the Marks and
signage.

FINOVA Capital, too, has refused to indemnify or otherwise
guarantee Holiday against liability for uninsured claims or the
Receiver's unauthorized operation of a Holiday Inn, the movant
tells the Court. FINOVA Capital has asserted that Section 108(b)
of the Bankruptcy Code affords it sixty days from the petition
date to satisfy all of the conditions contained in the Comfort
Letter which was issued by Holiday to Belgravia at the request
of the then licensee Old Town in order to induce Belgravia to
provide financing for the hotel.

                       The Comfort Letter

Among other things, the Comfort Letter provides for FINOVA to
enter into a new license, under certain conditions, for a term
equal to the balance of the original, in the event of
foreclosure. It specifies that the License is not assignable but
the rights under the letter are assignable for the balance of
the term of the original term of the License to a Real Estate
Mortgage Investment Conduit (REMIC), or a Financial Asset
Securitization Investment Transaction (FASIT) or similar vehicle
capable of performing its financial and other obligations under
the license agreement as determined by HHFI in its sole
reasonable discretion for pooling or securitization of the
mortgage loan.

Certain paragraphs from the letter are reprinted below:

      "2. (A) In the event you acquire the Hotel by foreclosure
or deed in lieu of foreclosure, either: (1) while the License is
in full force and effect; or (2) within 60 days following the
date of HHFI's termination of the License; you shall have 30
days from such acquisition to elect, by written notice to HHFI
accompanied by a non-refundable processing charge of $5,000.00,
to obtain a new License in the form and specifying the royalty
and other fees then being used or charged by HHFI and for a term
equal to the balance of the original term under the License,
except that you shall not be charged the initial fee (as same as
described in HHFI's then current Uniform Franchise Offering
Circular for prospective franchisees), provided: (a) that you
are not in receivership or conservatorship; (b) that you have
not been taken over by any state or federal regulatory agency;
and (c) that neither you nor any of your institution's directors
or officers have entered into any cease and desist order or any
other formal or informal written agreement with a federal or
state regulatory agency.

          (B) All defaults and breaches under the License must be
cured by you within 30 days from the date of your election to
obtain a new license including, but not limited to any monies
due with respect to the Hotel, to HHFI, or its parent,
subsidiaries, divisions or affiliates. With respect to any
defaults or breaches of a non-monetary nature which are not
reasonably capable of being cured within said 30 day period,
HHFI may extend, for such time as it in its sole discretion may
determine, the period of time in which such default(s) or
breaches may be cured. You shall have no obligation to cure
defaults that are due to a prior change in the legal or
financial status of the Licensee and are not capable of being
cured (e.g. bankruptcy, assignment for the benefit of creditors,
or the appointment of a receiver or trustee, etc.). In
particular, in the event Licensee is not meeting HHFI's then
minimum requirements for product and service quality (currently
measured by CQI scores, or any such changes of designation) at
the hotel even if the License is not in a default status, you
will not be issued a license hereunder until HHFI has determined
that the Hotel is meeting HHFI's minimum requirements using the
then current measure of quality (such as CQI scores) or such
other measure as HHFI deems an appropriate substitute if the
current measure is not available for the Hotel. A new license
will not be issued to you until all defaults and breaches are
cured. You shall further comply with Holiday Hospitality
Corporation's then-current procedures concerning the issuance of
a license.

          (C) In the event that you acquire the Hotel as set out
in paragraph 2 above, you shall furnish HHFI with reasonably
satisfactory evidence of such acquisition.

       3. In executing this document, you acknowledge that
neither the Licensee nor you has any right to assign, transfer,
sell, or otherwise convey the License, and any license that may
be issued to you pursuant to the terms of this letter shall not
be assignable. However, you may assign your rights under this
letter agreement, and a new License may be issued, for the
balance of the term of the original term of the License to a
Real Estate Mortgage Investment Conduit ("REMIC"), or a
Financial Asset Securitization Investment Transaction ('FASIT')
or similar vehicle for pooling or securitization (collectively
"Securitization") of your mortgage loan provided that (i) you
submit to HHFI the name of the REMIC or the FASIT by no later
than twelve (12) months from the date hereof; and (ii) provided
that any entity to which a license agreement may be issued
pursuant to this comfort letter is capable of performing its
financial and other obligations under the license agreement as
determined by HHFI in its sole reasonable discretion. Otherwise,
your rights under agreement, and such application will be
processed in accordance with Holiday Hospitality Corporation's
then current requirements and procedures.

       4. By its signature below, Licensee acknowledges that this
letter was provided to you at Licensee's request in order to
induce you to provide financing for the Hotel, and in
consideration thereof, Licensee hereby releases you and HHFI, as
well as each of our respective subsidiaries, parents, divisions,
successors, assigns, heirs and representatives, including but
not limited to our respective employees, agents, officers,
directors and stockholders of and from any and all actions,
causes of action, suits, claims, demands, contingencies, debts,
accounts and judgments whatsoever, at law or in equity, whether
known or unknown, arising from the exercise by you of any of the
rights granted hereunder and the recognition and compliance with
such exercise by HHFI. It is further acknowledged and agreed
that HHFI shall be entitled to rely upon any written notice or
request by you made pursuant to the provisions hereof without
requirement of necessitating the accuracy or authenticity of
such written notice or any facts or allegations contained
therein.

       5. (A) You agree to notify HHFI, by mail, concurrently
with any action to: (a) commence foreclosure proceedings
regarding the Hotel; or (b) petition for appointment of a
receiver, obtain the entry of an order for relief or take any
action under federal or state bankruptcy laws or similar laws
with regard to the Hotel; or (c) accept a deed for the Hotel in
lieu of foreclosure; or (d) take ownership or possession of the
Hotel in any manner.

          (B) You agree to notify HHFI promptly upon: (a) any
change in your address; or (b) the satisfaction, cancellation,
sale or assignment of your mortgage on the Hotel.

       6. The provisions of this letter are not intended to and
do not in any way alter, modify or amend the License or assign
any rights thereunder . . ."

                     Holiday's Argument

In addition, Holiday argued that:

      (1) The Old Town License terminated on March 16, 2001.

          Holiday told the Court that:

          -- On February 2, 2001, the Arizona Court, without
notice to Holiday, appointed Lodging as Receiver for the hotel.

          -- On February 2, 2001, Old Town lost control of or
otherwise abandoned its Holiday Inn License. This Act and/or
failure to act is a direct violation of the Old Town License
Agreement, and constitutes grounds for immediate termination of
the same.

          -- On February 15, 2001, Holiday sent a letter to the
Receiver which notified the Receiver of Holiday's termination of
the Old Town License Agreement effective at 5:00 p.m. Eastern
Standard Time on March 16, 2001. Pursuant to the Receiver
Notice, Holiday demanded that the Receiver take all necessary
steps to de-identify the Hotel of any association with the
Marks, the System, and the Holiday Inn(R) License.

          -- On March 8, 2001, the Receiver filed a Request for
Expedited Instructions concerning Holiday's termination of the
Old Town License Agreement questioning the validity of Holiday's
termination of the Old Town License Agreement and requesting
directions from the Arizona Court on how to proceed or otherwise
respond to the Receiver Notice.

          -- On March 12, 2001, Holiday filed its Response to the
Request for Instructions which, among other things,
substantiates the validity of Holiday's termination of the Old
Town License Agreement.

          -- On March 13, 2001, FINOVA Capital filed its Response
to the Request for Instructions which asserts, among other
things, that FINOVA Capital's bankruptcy filing on Mrch 7, 2001
extended the time for FINOVA Capital to satisfy all of the
conditions in the Comfort Letter to 60 days after the Petition
Date and further asserts that FINOVA Capital may have a property
interest in the Old Town License Agreement.

          -- On March 19, 2001, the Arizona Court conducted a
hearing on the Receiver's Request for Instructions, and entered
an order, which, among other things, directed the Receiver to
use its reasonable business judgment concerning any disputes
associated with the Hotel.

      (2) The Receiver is operating the hotel in violations of
Federal Trademark Law and has not accepted any of Holiday's
proposa1s despite Holiday's good faith effort to negotiate a
temporary license with the Receiver.

      (3) FINOVA Capital is not a party to the terminated Old
Town License Agreement. Thus, any interest that FINOVA Capital
may have in the terminated Old Town License Agreement is
entirely derivative of the Comfort Letter. In order to exercise
its rights under the Comfort Letter, FINOVA Capital would have
to enter into a new license agreement under the same terms and
conditions as the terminated Old Town License Agreement, and
satisfy the conditions contained in the Comfort Letter.

      (4) The automatic stay does not apply to stop Holiday from
removing the hotel from the Holiday Inn System and Requiring De-
identification.

Holiday argued that because the appointment of the Receiver
constituted a default under the Old Town License Agreement,
neither Old Town nor the Receiver (vis-a-vis Old Town) had a
property interest in the Old Town License Agreement. FINOVA
Capital has never had a property interest in the Old Town
License Agreement albeit a property interest in the Comfort
Letter; the Comfort Letter merely permits FINOVA Capital to
enter into a new license agreement under the same terms and
conditions as the terminated Old Town License Agreement, upon
satisfying all of the conditions contained in the Comfort
Letter.

Even assuming that FINOVA Capital had an interest in the Old
Town License Agreement, FINOVA Capital's bankruptcy did not
stop the Old Town License Agreement from terminating of its own
accord on March 16, 2001 because all that is required for a
franchise agreement to be terminated is the passage of time,
Holiday asserted, citing:

      -- Lipscomb Farms, Inc. v. Michigan Millers Mutual Ins. Co.
(In re Lipscomb Farms, Inc.), 90 B.R. 422 (Bankr. W.D. Mo. 1988)
("[I]f the agreement is cancelable by the terms contained
therein and one of the parties properly initiates such
cancellation pre-petition and nothing remains to be done except
wait for the passage of time, the mere filing of a petition for
relief neither halts nor stays the cancellation.");

      -- Days Inn of America Franchising. Inc. v. Gainesville P-H
Properties. Inc. (In re Gainesville P-H Properties. Inc.), 77
B.R. 285, 296 (Barikr. M.D. Fla. 1987) ("Where pre petition
notice of termination was the last affirmative act required to
effect termination, nothing remains to be done except to wait
for the passage of time") (citations omitted);

      -- Hazen First State Bank v. Speight, 888 F.2d 574 (8th
Cir. 1989) ("The automatic stay provided for by Section 362(a)
does not enlarge the rights of individuals under a contract nor
does it toll the running of time under a contract. It will not
prevent the automatic termination of a contract by its own
terms").

Moreover, the Bankruptcy Code stays only proceedings against a
"debtor", Holiday argued, it does not contemplate the same
effect on the obligations and liabilities of third parties to a
creditor.

Holiday contended that it is not seeking to obtain possession or
control over property of the bankruptcy estate but rather to
obtain control of the Marks, the System, and Holiday Innr
License, none of which are property of FINOVA Capital's
bankruptcy estate.

      (5) In the Alternative, if the Court decides that the
automatic stay does apply to prevent Holiday, the movant goes
on, Holiday is entitled to relief from the automatic stay for
"cause" pursuant to Section 362(d) of the Bankruptcy Code to
prevent irreparable harm to Holiday's Marks, the System, and the
Holiday Inn(R) License by allowing Holiday to remove from the
System, and then require re-identification of the Hotel and to
enforce its rights against Old Town and the Receiver. Such
action, Holiday asserted, will not cost FINOVA Capital any
interest in property holding any value for FINOVA Capital's
bankruptcy estate the denial of such action will cause Holiday
great harm.

Holiday noted that cause can include adequate protection and
trademarks and service marks are forms of property that would
certainly justify this sort of adequate protection. Adequate
protection, Holiday notes, can be provided by FINOVA entering
into a new license agreement under the same terms and conditions
as the terminated Old Town License Agreement, and satisfying all
conditions in the Comfort Letter. Holiday further noted that if
Old Town or the Receiver was a debtor in possession, Holiday
could seek adequate protection payments in their cases, but they
are not, so if the requested relief is not granted in the
present case, Holiday will have nowhere to look for relief from
the situation.

                  Holiday's Request

Holiday moves the Bankruptcy Court to determine that the
automatic stay of Section 362 of the Bankruptcy Code does not
apply to stay the de-identification of the Hotel by Holiday
pursuant to its rights under the Old Town License Agreement, the
Receiver Notice, and applicable non-bankruptcy law.

In the alternative, if the Court does determine that the
automatic stay applies, Holiday requests relief from the
automatic stay pursuant to Section 362(d)(l) of the Bankruptcy
Code to allow Holiday to terminate the Comfort Letter to allow
it to pursue its non-bankruptcy remedies against the Hotel and
the Receiver, or in the alternative provide Holiday with
adequate protection for its interest in the Marks, the System,
and the Holiday Innr License.

Holiday submitted that adequate protection can only be provided
by FINOVA Capital entering into a new license agreement under
the same terms and conditions as the terminated Old Town License
Agreement, and satisfying each and every condition contained in
the Comfort Letter.

                          Hearing

As the hearing was originally scheduled for May 11, 2001, by
separate motion, Holiday requested for an expedited hearing on
April 12, 2001. The Debtors objected. "Incredibly, barely three
weeks into one of the largest chapter 11 cases in history, the
Movant is demanding that the Debtors divert their resources from
the critical early stages of the bankruptcy process to respond
to a non-emergency matter on 14 days notice," the Debtors
contest against the request.

Richards, Layton & Finger, P.A. told the Court that although the
Debtors' counsel has had little time to collect the facts and
analyze the legal issues underlying the Stay Relief Motion, it
appears to them that the Movant is seeking a judicial
determination that could significantly impact the interests of
the Debtors in certain of their property. It appears to the
Debtors' counsel, based on a preliminary review, that the final
hearing on the motion will require review and analysis of
substantial documentation, significant discovery and briefing,
and a protracted, highly contested hearing.

Debunking the lack of basis for a compressed time frame, the
Debtors and their counsel suggested that the next omnibus
hearing date of May 11, 2001 is the more appropriate time to
schedule a final hearing on the motion, or alternatively a date
between April 12, 2001 and May 1, 2001.

A hearing has been scheduled for May 2, 2001 at 10:00 a.m. at
Courtroom #2. (Finova Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


FLOWER FOODS: Fitch Rates Senior Secured Credit Facilities BB+
--------------------------------------------------------------
Fitch has assigned a `BB+' rating to the new $380 million senior
secured credit facilities of Flowers Foods, Inc. The Rating
Outlook is Stable.

The Facilities consist of a $130 million four-year revolving
credit facility, a $100 million four-year term loan A, and a
$150 million 6-year term loan B. The Facilities are secured by
all assets and subsidiary stock excluding real estate and
leasehold interests and are guaranteed by subsidiaries. Flowers
is a holding company that produces frozen and non-frozen bakery
and dessert products through two operating subsidiaries; Flowers
Bakeries (Bakeries) and Mrs. Smith's Bakeries (Mrs. Smith's).
Fiscal year 2000 sales and EBITDA were $1.6 billion and $77.2
million (after corporate expenses), respectively. In providing
the rating, Fitch considered the Company's business strategy,
historical performance, and market position.

On March 26, 2001, Flowers Industries, Inc. completed the spin-
off of Flowers into a newly created publicly traded company. In
connection with the spin-off transaction, the Facilities were
put in place. The Facilities were used to redeem $193.2 million
of 7.15% debentures, purchase $77.9 million of distributor notes
that were formerly financed off-balance sheet, and pay
transaction fees and expenses. The $130 million Revolving Credit
Facility was not drawn at closing and is available to fund
working capital, capital expenditures and for other general
corporate purposes.

Bakeries produces and markets fresh baked goods, including
bread, pastries, snacks and muffins, in a 16 state region in and
around the Southeastern United States. Fiscal year 2000 segment
sales and EBITDA totaled about $1 billion and $101.1 million,
respectively. Historical operating margins have been generally
stable and reflect the mature nature of the fresh bakery market.
Bakeries ranks as the No. 1 fresh baking company within its
operating region, and No. 3 on a national basis. Major Company-
owned brands include Natures Own, Cobblestone Mill, Blue Bird,
and franchised brands include Sunbeam and Bunny. Company-owned
brands had a No. 1 fresh bakery retail sales market share within
the 22 major metropolitan markets served as of December 2000.
Additionally, Bakeries produces private label brands, including
Winn-Dixie and Kroger, and various products for the foodservice
market, such as sandwich buns for Burger King. Baking is done at
27 modern facilities located throughout the operating region and
distribution is done through over 3,200 independent
distributors.

Mrs. Smith's is a manufacturer of frozen bakery products,
including pies, cobblers, bread and rolls. Fiscal year 2000
segment sales and EBITDA were about $604 million and $0.4
million, respectively. Baking is done at 9 facilities and
products are distributed nationally to the foodservice, frozen
retail, and retail in-store bakery markets. Mrs. Smith's has a
leading share of the total retail frozen dessert market and a
dominant share of the frozen pie market. This division spent
$183.3 million over the past three years to expand production
capacity and increase operating efficiencies. This capital
expenditure program was fraught with problems, including delays
in the receipt of new equipment and software, mechanical
breakdowns and cost over-runs. Lost sales and product damage
ensued. The production problems have been resolved and
divisional EBITDA has been restored to slightly positive levels,
however, the breakeven production level has risen due to the
addition of incremental plant capacity that lowered capacity
utilization.

In rating the Facilities, Fitch favorably viewed the Company's
strong market positions and consumer brand awareness, state of
the art production facilities, efficient distribution system,
well entrenched customer relationships, conservative financial
strategy and seasoned management team. Flowers has a leading
presence in each of its major categories and brands that are
well recognized by consumers. Over the past three years, in
excess of $320 million has been invested to build and upgrade
baking facilities, and as a result, no significant new capital
projects are anticipated over the near term (maintenance capital
expenditures are approximately $35 million per annum). The
senior management team intends to focus on a strategy of
improving EBITDA margins at existing operations and reducing
debt. There are no plans to make significant acquisitions or
share repurchases over the next year.

Fitch's primary credit concerns were the uncertainty over the
timing and extent of a sales and earnings recovery at Mrs.
Smith's as well as the weak fixed charge coverage and high
operating lease adjusted leverage. Although EBITDA at Mrs.
Smith's has recovered to positive levels, a further recovery in
sales and profits at Mrs. Smith's will challenge management to
increase sales outside of the traditional holiday selling season
and reduce production and distribution costs. If Mrs. Smith's
continues to underperform, consolidated EBITDA margins will be
impaired. The Facilities' relatively rapid principal
amortization schedule, combined with payments required to meet
interest expense, lease payment obligations and capital
expenditure requirements will result in a fixed charge coverage
level that is weak for the rating category.

Additional concerns included the risk of raw material price
fluctuations and the highly competitive nature of the industry.
Principal raw materials include flour, natural gas, gasoline,
sugar, shortening, and fruit. The Company's ability to pass raw
materials price increases through to consumers in a timely
manner may be limited, which could squeeze margins. Flowers
faces competition from large, national producers, small local
bakeries and grocery stores with their own baking operations.
The loss of a key customer could have a material impact on
financial results, and competitor promotional campaigns may
result in pricing pressure for Flowers.


GREYSTONE DIGITAL: Securities Subject to Nasdaq Delisting
---------------------------------------------------------
GreyStone Digital Technology, Inc. (Nasdaq: GSTN) announced that
the Company received a Nasdaq Staff Determination on 18 April
2001 indicating that the Company fails to comply with the net
tangible assets requirement for continued listing set forth in
Marketplace Rule 4310c(2)(B), and that its securities are,
therefore, subject to delisting from The Nasdaq SmallCap Market.
The Company has requested a hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination. There
can be no assurance the Panel will grant the Company's request
for continued listing. The Company understands that if the
request for hearing is granted, the stock will continue to trade
on The Nasdaq SmallCap Market until a final determination is
made to delist the Company, at which point the Company's common
stock will begin trading on the Over-the-Counter Bulletin Board.

In addition, on 4 April 2001, Nasdaq Staff notified the Company
that its stock price had been below $1.00 for 30 consecutive
days and no longer complied with Marketplace Rule 4310c(4). The
Company was granted 90 days, or until July 3, 2001, to achieve
compliance or request a hearing.

Based in San Diego, California, GreyStone Digital Technology's
goal is to position itself as a leading provider-D digital
immersion software and systems for defense customers and has
applied this experience in the development of products for
entertainment markets. GreyStone's products and services address
a demand from military, entertainment, law enforcement, and
other markets such as education, wireless communications, the
Internet, e-commerce, and e-services for improved ways to access
and use digital information.


HEALTH CARE: Year-End Loss Triggers Going Concern Doubts
--------------------------------------------------------
HealthCare Integrated Services, Inc. (prior to August 1, 1999
known as HealthCare Imaging Services, Inc.) and its subsidiaries
is a multi-disciplinary provider of healthcare services which
currently specializes in diagnostic imaging, physician
management and consulting services, and clinical research
trials. It presently operates seven diagnostic imaging
facilities located in New York City, New York; and Edgewater,
Ocean Township, Bloomfield, Voorhees (two facilities) and
Northfield, New Jersey, and provides exclusive management,
consulting and/or clinical research services to several
physician practices in New Jersey, comprised of an aggregate of
over 100 physicians, with 20 offices, treating over 160,000
patients.

The Company's net revenue for the year 2000 was $ 17,324,853, as
compared to its net revenue of $ 21,952,284 in the prior year,
1999. Net loss was experienced in the year 2000 in the amount of
$(17,628,886), while the Company had had a net income of $
232,139 for the year 1999.

The company indicates that as a consequence of its substantial
year-end loss its auditors have issued a "going concern"
statement which casts substantial doubt as to the company's
ability to continue as a "going concern".


HEILIG-MEYERS: Home Furnishing Retailer Begins Liquidation Sales
----------------------------------------------------------------
Liquidation sales of Richmond, Va.-based Heilig-Meyers will
begin this week and should end by Aug. 30, according to the
Richmond Times-Dispatch. The nation's largest home furnishings
retailer filed for bankruptcy last August. The company will lay
off about 3,200 employees and none of them will receive
severance pay. The company chose to liquidate rather than
reorganize the chain because it continued to post significant
losses. There is a possibility that 30 of the 375 Heilig-Meyers
stores may be excluded from the sales. Those locations may be
sold to other furniture retailers or be converted to The
RoomStore format, but a list of those locations was not
available. (ABI World, April 25, 2001)


HOLT GROUP: Judge Grants Interim Okay For DIP Financing
-------------------------------------------------------
U.S. Bankruptcy Judge Mary Walrath signed an interim order
authorizing Holt Group Inc. to enter into a post-petition
financing agreement with Fleet National Bank, Wilmington Trust
of Pennsylvania and MBC Leasing Corp., and First Union National
Bank as agent. A final hearing is scheduled for April 30 before
the U.S. Bankruptcy Court in Wilmington, Del. The order provides
that the company may only incur $3.5 million in debt until Judge
Walrath signs a final order approving the facility. Under the
terms of the proposed debtor-in-possession (DIP) loan, $10
million will be available as a revolving line, and the rest will
be used to pay the company's pre-petition debts. The company's
pre-petition debt totals about $62.5 million. (ABI World, April
25, 2001)


ICG COMMUNICATIONS: Court Fixes April 30 Bar Date
-------------------------------------------------
Judge Walsh has ordered that all entities and persons that are
creditors holding or wishing to assert claims arising before the
Petition Date against any of the ICG Communications, Inc.
Debtors are required to file, on or before 4:00 p.m. Eastern
Daylight Time, on April 30, 2001, a separate, completed and
executed proof of claim form conforming substantially to
Official Bankruptcy Form No. 10, on account of any such claim.

However, creditors holding or wishing to assert certain claims
need not file a proof of claim. These claims are:

      (a) claims with respect to which the holders do not dispute
the claim's amount or characterization as listed on the
Schedules and that are not listed in the Schedules as
"disputed", "contingent", or "unliquidated";

      (b) claims that have been previously allowed or paid by
Order of the Court;

      (c) claims that belong to another Debtor (i.e.,
intercompany claims); or

      (d) claims that are based solely on the holder's holding or
ownership of Senior Discount Notes issued by ICG Holdings, Inc.,
or ICG Services, Inc. (although this exception does not apply to
the respective indenture trustees of the Senior Discount Notes).

Proofs of claim for damages arising from the Debtors' rejection
of a contract or lease must be filed by the later of (i) thirty
days after the date of any order authorizing the Debtors to
reject the contract or lease, or (ii) the bar date set above.
Proofs of claim for any other claims arising before the Petition
Date respecting any leases or contracts of the Debtors, such as
claims for unpaid prepetition rent, unpaid prepetition real
estate taxes, and prepetition breaches of contract, must be
filed by the bar date.

Holders of the Debtors' equity securities (whether preferred or
common stock) need not file a proof of interest solely on
account of the holder's ownership interest in or possession of
equity securities.

Judge Walsh has ordered that all proofs of claim be filed with
ICG Communications, Inc., Claims Processing Department, c/o
Logan & Company, Inc., 615 Washington Street, Hoboken, New
Jersey 07030. Any creditor holding or wishing to assert claims
against more than one debtor must file a separate proof of claim
in the case of each debtor.

Any creditor that fails to follow the terms of Judge Walsh's
Order, and who is required to file a proof of claim and does not
do so, will be forever barred, stopped and enjoined from
asserting such claim against the Debtors, and the Debtors and
their property will be forever discharged from any and all
indebtedness or liability with respect to such a claim, and the
holder shall not be permitted to vote on any plan or participate
in any distribution in the Debtors' Chapter 11 cases on account
of the claim.

In the event that the Debtors amend their Schedules hereafter,
the Debtors are ordered by Judge Walsh to give notice of the
amendment to the holders of claims affected by the amendment,
and if the amendment reduces the unliquidated, noncontingent and
liquidated amount or changes the nature or classification of a
claim against the Debtor, the holders are given the later of (a)
the bar date, or (b) thirty days from the date the notice is
given or any other time period set by the Court to file proofs
of claim with respect to the affected claim, if necessary, upon
penalty of being forever barred from doing so. (ICG
Communications Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


IGI INC.: Robert McDaniel Steps Down As Chief Executive Officer
---------------------------------------------------------------
On April 16, 2001, Robert E. McDaniel submitted his resignation
as Chief Executive Officer and Secretary of IGI, Inc. Mr.
McDaniel will provide consulting services to the Company and
will remain as a nominee to serve on the Company's Board of
Directors.

The Executive Committee of the Board of Directors has designated
John Ambrose, President, to serve as Interim Chief Executive
Officer, pending action by the full Board of Directors on a
permanent Chief Executive Officer. The Board is expected to
consider the matter following the annual meeting of shareholders
on May 16, 2001.

Separately, American Capital Strategies, Ltd. is the holder of
subordinated notes and warrants for the purchase of Company
common stock. The agreements relating to these notes and
warrants currently allow American Capital Strategies, Ltd. to
designate one person as a nominee to serve on the Company's
Board of Directors. American Capital Strategies, Ltd. has now
made such a designation, and the Company intends to implement it
by action of the Board of Directors after the annual meeting of
shareholders.


LASER MORTGAGE: Board Endorses Liquidation and Dissolution Plan
---------------------------------------------------------------
LASER Mortgage Management, Inc.'s Board of Directors unanimously
approved the liquidation and dissolution of the Company. The
Company expects that a plan of liquidation and dissolution will
be submitted to shareholders for approval at the annual meeting
scheduled to be held during the next three months. As presently
envisioned, the plan of liquidation and dissolution would
provide for an initial cash distribution, after obtaining
approval of the Delaware Court of Chancery, of approximately
$3.00 per share, with additional cash distributions resulting
from the disposition of the Company's remaining assets expected
to occur within the following three years, after providing for
expenses.

Mariner Mortgage Management, L.L.C. (Mariner) will continue to
serve as the Company's manager pursuant to the existing
management agreement. The term of the management agreement ends
on November 1, 2001, however, the Company has the right to
terminate the management agreement with 30 days notice and
Mariner has the right to terminate the management agreement with
90 days notice without cause or penalty. The Board of Directors'
adoption of the resolutions approving the liquidation and
dissolution of the Company triggered the payment of a fee based
on the Company's stock price to Mariner under the management
agreement, which the Company expects to be approximately
$1.2 million. Mariner will continue to receive its base fee
under the management agreement of $50,000 a month until the
management agreement ends or is terminated.

LASER Mortgage Management, Inc. is a specialty finance company
investing primarily in mortgage-backed securities and mortgage
loans. The Company has elected to be taxed as a real estate
investment trust under the Internal Revenue Code of 1986, as
amended. As of March 31, 2001, the Company estimates that its
net asset value per share, after an accrual for the fee payable
to Mariner, was within the range of approximately $4.35 to
$4.40.


LERNOUT & HAUSPIE: Korean Unit Files For Bankruptcy Protection
--------------------------------------------------------------
Lernout & Hauspie Speech Products NV (EASDAQ: LHSP, OTC: LHSPQ),
a world leader in speech and language technology, products and
services, announced that its wholly-owned subsidiary L&H Korea
Co., Ltd. (LHK) (formerly Bumil Information and Communication)
has voluntarily filed a petition for bankruptcy protection under
the Bankruptcy Act of Korea. The bankruptcy filing was made
Tuesday in Seoul, Korea.

Concurrently, L&H and LHK filed with the Seoul Prosecutors
Office a criminal complaint against Ju Chul Seo (also known as
John Seo), the former president of LHK. The complaint requests a
thorough investigation into Mr. Seo's activities as an officer
of LHK between September 1999 and November 2000. The Company
believes that certain actions by Mr. Seo amount to criminal
fraud and breach of trust in office, among other criminal
activities. Other defendants named in the complaint, who L&H
believes abetted these activities, include former LHK employees
Sam Cho, Henry Oh and J.H. Kim, as well as current and former
officials of ChoHung Bank, Hana Bank, Hanvit Bank, and Shinhan
Bank.

                     About Lernout & Hauspie

Lernout & Hauspie Speech Products N.V. (L&H) is a global leader
in advanced speech and language solutions for vertical markets,
computers, automobiles, telecommunications, embedded products,
consumer goods and the Internet. The company is making the
speech user interface (SUI) the keystone of simple, convenient
interaction between humans and technology, and is using advanced
translation technology to break down language barriers. The
company provides a wide range of offerings, including:
customized solutions for corporations; core speech technologies
marketed to OEMs; end user and retail applications for
continuous speech products in horizontal and vertical markets;
and document creation, human and machine translation services,
Internet translation offerings, and linguistic tools.


@LINK HOLDINGS: Case Summary & 21 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: @Link Holdings, Inc./A Delaware Corporation
         361 Centennial Parkway, Suite 380
         Louisville, CO 80027

Debtor affiliate filing separate chapter 11 petition:

         @Link Networks, Inc./ A Wisconsin Corporation

Chapter 11 Petition Date: April 25, 2001

Court: District of Delaware

Bankruptcy Case Nos.: 01-01540 and 01-01541

Debtors' Counsel: Cynthia A. Kuno, Esq.
                   Crocker Kuno LLC
                   1325 4th Avenue, Suite 940
                   Seattle, WA 98101
                   T: 206-624-9894
                   F: 206-624-8598

Estimated Assets: $10 Million to $50 Million

Estimated Debts: More than $100 Million

Consolidated List of 21 Largest Unsecured Creditors:

Entity                        Nature of Claim     Claim Amount
------                        ---------------     ------------
Nortel                        Guaranty of Secured  $45,013,399
Contact: Accounts Payable     Liability of @Link
5975 S. Quebec Street         Networks, Inc.
Suite 300
Englewood, CO 80111
T: 1-800-466-7835

AmeriTech                     Trade Payable         $7,781,663
Contact: Accounts Receivable
30 South Wacker, 34th Fl
Chicago, IL 80808
T: 800-650-3000

Lucent Technologies           Unsecured Note &      $5,441,188
Contact: Accounts Receivable  Trade Payable
1701 Harbor Bay Parkway
Alameda, CA 94502
T: 510-475-5000

Verizon North                 Trade Payable         $2,839,877
Contact: Billing Dept.
1255 Corporate Drive
Irving, TX 75083
T: 972-507-5000

Teldordia Technologies        Trade Payable         $2,813,757
Contact: Accounts Receivable
Church Street Station
P.O. Box 6334
New York, NY 10249
T: 973-740-3000

Southwestern Bell             Trade Payable         $2,681,738
Contact: Billing Dept.
P.O. Box 630047
Dallas, TX 76283-0047
T: 214-530-3434

COMPLAS                       Trade Payable         $1,588,104
Contact: Accounts Receivable
1858 Johns Dr.
Glenview, IL 80025
T: 414-257-3359

ADC DSL Systems               Trade Payable         $1,529,657
22138 Network Place
Chicago, IL 606073
T: 1-800-366-3891

MCI Worldcom                  Trade Payable         $1,416,771
Contact: Billing Dept.
MFS Telecom
P.O. Box 96023
Charlotte, NC 28296-0029
T: 843-661-7204

Pacific Bell                  Trade Payable         $1,021,029
Payment Center
Van Nuys, CA 93188
Contact: Billing Dept.
T: 800-750-2356

Norlight Telecommunications   Trade Payable           $878,880
275 N. Corporate Dr.
Brookfield, WI 53045-5818
Contact: Accounting
T: 282-792-9700

SAIC                          Trade Payable           $846,736
4001 Olde Towne Pkwy
Marietta GA 30088-5821
Contact: Accounting
T: 770-579-4400

Bechtel                       Trade Payable           $762,358
S275 Westview Dr
Frederick, MD 21700-8304
Contact: Accounts Receivable
T: 301-228-6000

Accelerated Networks          Trade Payable           $581,308
1850 N. Greenville Avenue
Richardson, TX 75081
T: 805-553-9680

MASTEC                        Trade Payable           $561,572
3156 NW 77th Avenue
Miami, FL 33122
Contact: Billing Dept.
T: 305-588-1800

SPRINT                        Trade Payable           $531,533
3100 Cumberland CIR SE #800
Atlanta, GA 30392
Contact: Billing Dept.
T: 404-849-8000

RCM Technologies              Trade Payable           $446,482
Corporate Headquarters
2500 McClellan Avenue
Pennsauken, NJ 08109
Contact: Accounts Receivable
T: 856-486-1777

Inflow Inc.                   Trade Payable           $393,742
1880 Lincoln Suite 305
Dept. 237
Denver, CO 80271
Contact: Accounts Receivable
T: 302-832-4420

Cerida Corporation            Trade Payable           $315,581
c/o Silicon Valley Bank
3003 Tasman Dr
Santa Clara, CA 95054
Contact: Accounts Receivable
T: 408-654-7400

Qwest                         Trade Payable           $301,855
1299 Farnam St. #900
Omaha, NE 68103
Contact: Billing Dept.
T: 402-346-1222

BoldTech Systems              Trade Payable           $271,779
1075 Larimer St., Suite 460
Denver, CO 80202
T: 720-931-0995


MARINER: NovaCare Moves To Modify Court's Financing Orders
----------------------------------------------------------
The security interest under the DIP Facility with respect to
assets referred to as "Prudent Buyer Appeal Monies" has been a
subject of contention in an Adversary Proceeding filed by
NovaCare Holdings, Inc. naming as defendants Mariner Post-Acute
Network, Inc. and certain of its affiliates, Chase, Omega
Healthcare Investors, Inc. and pursuant to an amendment also
LaSalle National Bank, N.A. (Adversary Proceeding No. 00-1577).

Chase and MPAN asserted that MPAN, together with the other
Debtor-Defendants, granted to Chase, as collateral agent for the
Lenders, a security interest in substantially all of the
Debtors' assets, that the Chase Security Interest is properly
perfected, and is entitled to first priority over any other
security interests or liens granted by the Debtor-Defendants, in
accordance with the terms and provisions of the Uniform
Commercial Code. Chase and the MPAN Debtor-Defendants assert
that this has been authorized by the Court by way of the
Financing Orders.

NCH, on the other hand, sought a determination that certain
Prudent Buyer Appeal Monies are not property of the bankruptcy
estates of several of the Debtor-Defendants under Section 541 of
the Bankruptcy Code or of the Facilities owned, leased, and/or
managed by them.

NovaCare explained that Prudent Buyer Appeals refer to appeals
against the disallowance of certain costs for Therapy Services
provided by NovaCarePA during certain cost-report periods to
patients at facilities owned, leased, and/or managed by several
of the Debtor-Defendants which are in turn owned by GranCare,
Inc., a wholly-owned subsidiary of MPAN.

In NovaCare's estimation, the Pruduent Buyer Appeals will result
in monies in excess of $27 million being due and owing to the
Debtor-defendants from the United States Department of Health
and Human Services (HHS), from the Health Care Financing
Administration (HCFA) and/or from Mutual of Omaha or United
Health Care, who are fiscal intermediaries with whom HCFA
contracts to carry out certain administrative responsibilities
on behalf of HHS and HCFA (all of which are sometimes
collectively referred to as HCFA).

NovaCare told the Court that it owns the right, title and
interest in and to certain assets of NovaCarePA including the
right of NovaCarePA to the Prudent Buyer Appeals, pursuant to a
series of agreements that NovaCarePA entered into with GranCare
on its own behalf and on behalf of the Section 541 Facilities
throughout the l990s.

NovaCare further explained that Medicare laws and regulations
prescribe a procedural framework through which a participating
facility is reimbursed by the fiscal intermediary assigned to it
for the reasonable costs of services rendered to Medicare
program patients. In practice, a participating facility receives
estimated periodic payments and is then required to submit an
annual cost report to its fiscal intermediary within 5 months
after the end of the participating facility's fiscal year.
Relying on the cost report, the fiscal intermediary then
conducts an audit of the participating facility, generally
completed within 18 months of the submission date of the cost
report. The purpose of this audit is to reconcile the amount due
to the participating facility under the Medicare laws and
regulations with the amount of the periodic payments already
received by such facility. The end result of this protracted
cost-report/audit procedure is a determination of the exact
amounts due to the participating facility based on, among other
things, the actual cost the participating facility incurs to
provide Therapy Services to Medicare program patients.

The Medicare laws and regulations further provided that, if it
was later determined that the costs were not actually incurred
by the participating facility, such facility was obligated to
disclose this error, to correct its cost report, and to return
the non-incurred costs to HCFA. Failure to comply with this
obligation would subject the participating facility to, among
other things, serious sanctions, civil penalties, and criminal
fines.

Pursuant to the Agreements, NovaCarePA agreed to provide Therapy
Services to patients at the Section 541 Facilities which agreed
to compensate NovaCarePA for such Therapy Services within a
certain period of time from the date of the invoice for such
Therapy Services. The Section 541 Facilities would seek
reimbursement for such Facility's payment to NovaCarePA from the
patient, or from federal, state or private health insurance
programs, or from third-party payees. In the event any amount
paid for Therapy Services rendered by NovaCarePA to the Section
541 Facilities was disallowed and the Facility timely notified
NovaCarePA of such disallowance, NovaCarePA agreed to reimburse
such disallowed amount to the Section 541 Facility and/or to
permit an offset of such disallowed amount against any amounts
then due to NovaCarePA. In the event of a disallowance,
NovaCarePA had the right at its own expense to appeal the
disallowance in its own name or in the name of the Section 541
Facility.

Pursuant to the Agreements, NovaCare said, when a disallowance
was reversed on appeal, the Section 541 Facility was required to
promptly turn over to NovaCarePA any funds recovered as a result
of the appeal within 30 days after the receipt of such funds,
although amendments to some of the Agreements extended this time
frame to 60 days.

Beginning in 1996, GranCare/MPAN notified NovaCarePA that Mutual
and United disallowed certain costs for the Therapy Services
provided by NovaCarePA to the Section 541 Facilities. As a
result, NovaCarePA was required to reimburse the Section 541
Facilities or permit offsets in the amount of such disallowances
against any monies due to NovaCarePA. In exchange for such
reimbursements or offsets, the Section 541 Facilities were
required to turn over and, in fact, did turn over the appeals of
such disallowances to NovaCarePA.

Therefore, in the Adversary Proceeding, NovaCare sought a
determination that certain Prudent Buyer Appeal Monies that may
be due and owing to certain of the Debtor-Defendants as
reimbursement for the costs of Therapy Services provided by
NovaCare, Inc. are not property of the bankruptcy estates of the
Section 541 Defendants (and their Section 541 Facilities) and
requested an order requiring the immediate turnover of such
Monies to NCH.

The Debtor-Defendants, Chase, and Omega filed motions to
dismiss, primarily asserting that the Complaint (as amended)
constitutes an impermissible collateral attack on the Financing
Orders. NCH filed an objection to the Motions to Dismiss. The
Parties are in the process of preparing post-hearing briefs.
NovaCare also files a Memorandum of Law in support of its Motion
to Modify the Court's Financing Orders with respect to Prudent
Buyer Appeal Monies.

In its Memorandum of Law, NCH contended that the issue was not
placed before the Court and the Court never intended to decide
it. NCH pointed out that buried within the three Financing
Orders entered by the Court among other First Day Orders are
ambiguous provisions which purport to transfer to The Chase
Manhattan Bank, N.A., as "additional adequate protection" for
the use of cash collateral, certain funds which are expected to
be paid by HCFA as a result of "prudent buyer" appeals being
pursued by NCH. Although the Debtors were aware that NCH had an
interest in these Prudent Buyer Appeal Monies, they never
brought this to the Court's attention, and never highlighted in
their motion papers what they purported to do with these Monies,
NCH accused. Simply put, NovaCare charged, the Debtors and Chase
are attempting to succeed at litigation by ambush.

NovaCare argued that it is the discretion of the Court under the
Federal Rules to remedy the situation by modifying the Financing
Orders to reflect the Court's true intent. Accordingly, NCH
asserted that the first day financing motion did not determine
the issue of ownership of the prudent Buyer Appeal Monies.

Specifically, NovaCare drew the Court's attention to Rule 60 of
the Federal Rules of Civil Procedure, which allows the Court to
modify an existing order where justice requires. With exceptions
not applicable in the present issue, NCH argued, Rule 9024 of
the Federal Rules of Bankruptcy Procedure provides that Rule 60
of the Federal Rules of Civil Procedure applies in bankruptcy
cases, and Rule 60 of the Federal Rules of Civil Procedure
provides in turn for the modification of a final order in
appropriate circumstances. NCH therefore concludes that its
requested relief is permitted and appropriate.

           Stipulation between and among the Parties
             to Allow for Filing of Reply Papers

In view of the complexity and importance of the issues presented
in the Rule 60 Motion, NovaCare Holings, Inc., Omega Healthcare
Investors, Inc., LaSalle National Bank and the Chase Manhattan
Bank agree and stipulate that, any objection or response of the
Debtors, Omega, LaSalle or Chase to the Rule 60 Motion shall be
in writing, filed with the Clerk of the Bankruptcy Court and
served upon and received by the parties to this Stipulation. If
any objections or responses to the Rule 60 Motion are filed,
NovaCare is permitted to file reply papers provided that such
papers are in writing, filed with the Clerk of the Bankruptcy
Court, and served upon and received by the parties to this
Stipulation.

The hearing on the Rule 60 Motion is currently scheduled to take
place on May 2, 2001 at 11:30 a.m. (Mariner Bankruptcy News,
Issue No. 14; Bankruptcy Creditors' Service, Inc., 609/392-0900)


OWENS CORNING: NLRB Gives Notice Of Pendency Of Labor Litigation
----------------------------------------------------------------
Through Edward B. Valverde, the National Labor Relations Board
for Region 16 in Fort Worth, Texas, presented a Notice of the
pendency of unfair labor practice litigation against Owens
Corning, including a settlement agreement signed by Owens
Corning in March 2001, agreeing that the national Labor
Relations Board is the proper forum in which to liquidate the
amount of this debt. Anyone who becomes a successor to the
debtor with knowledge of the unfair labor practice litigation
may be required to remedy the unfair labor practices by, inter
alia, making employees Edward De La Garza, Jonathan Cornwell,
Adam Jason Miller, and Gerald Ray Pena, whole for any loss of
wages and benefits and interest on any loss of wages and
benefits suffered due to the Debtor's unfair labor practices.
The Notice is intended to advise potential purchasers of the
Debtor's assets and any appointed trustee in bankruptcy of their
potential liability, so that the price paid for any of the
Debtor's assets may reflective of these liabilities. (Owens
Corning Bankruptcy News, Issue No. 11; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


OWENS CORNING: Provides Update On Restructuring Activities
----------------------------------------------------------
Owens Corning (NYSE: OWC) reported on its financial
reorganization activities, six months after the Company and 17
of its domestic subsidiaries filed for protection under Chapter
11 of the US Bankruptcy Code, and reaffirmed its commitment to a
number of long-planned initiatives designed to support the
Company's growth.

Owens Corning said it is proceeding smoothly with the Chapter 11
reorganization process, led by Maura Abeln Smith, senior vice
president, chief restructuring officer, general counsel and
secretary, and a reorganization team pulled from a variety of
departments throughout the Company. The sole focus of this team
is to manage the Chapter 11 process, enabling Owens Corning to
meet all requirements of financial restructuring as efficiently
and thoroughly as possible.

Our chief responsibility is to manage the Chapter 11 process and
develop a plan of reorganization to restructure the Company
while resolving, once and for all, our asbestos liability, said
Maura Abeln Smith. Financial reorganization entails a
comprehensive review of every aspect of our business. We are on
track to complete this task, and develop and obtain approval for
a comprehensive Plan of Reorganization, Smith said.
The Company expects that a Futures Representative for asbestos
claimants will be selected in the second quarter. This is the
next important step in achieving our restructuring goals, Smith
said.

In addition, the Company outlined and reaffirmed its commitment
to several long-planned initiatives designed to support its
growth:

      * In January of this year, Owens Corning completed the
        installation of a  proprietary technology at its Delmar,
        NY, fiberglass insulation plant. This technology
        represents the Company's most productive and lowest
        cost technical platform for the manufacture of fiberglass
        insulation. Since its installation in the Delmar
        facility, new records for productivity and quality have
        been achieved.

      * In May 2001, Cultured Stone, an Owens Corning business
        and the world's leading producer of manufactured stone
        veneer and related trim products, will open a new
        facility in Chester, SC. The 200,000-square-foot plant
        will be the most advanced facility in the world for the
        production of manufactured stone veneer and will employ
        up to 300 people.

      * In the third quarter of 2001, Owens Corning will open its
        new Fiberteq  LLC facility. Formed as a joint venture
        with Canada's IKO Industries, Fiberteq will employ the
        latest technology to manufacture high quality wet-formed
        glass fiber mat used primarily in the production of
        asphalt roofing shingles. Located in Danville, IL, the
        facility will employ up to 70 people.

      * A new production line at the Irving, TX, Roofing Plant
        provides a state-of-the-art manufacturing process for
        laminated shingles.

      * Owens Corning announced its intent to renovate the
        Company's oldest fiberglass insulation facility, located
        in Newark, OH. The "Newark Reinvention" involves
        significant investment by the Company to upgrade Newark's
        facilities to world-class capabilities. Infrastructure
        will be improved, outdated buildings and equipment torn
        down, and a complete program of modernization undertaken.
        It is expected that the Reinvention Plan will not only
        improve Newark's cost position, but also enhance quality
        control, productivity and safety.

      * The Company is also generating a clear focus on
        innovation and speed to market. Its Basement Finishing
        System, Visionaire FX? and HOMExperts? are gaining
        momentum and positioning the Company for future growth
        and profitability. Its Composites business, with
        operations around the world, has been working closely
        with the major automotive companies to provide composite
        solutions. For example, the new composite pick-up truck
        box as well as the Silentex? muffler system are leading
        the way to future global growth.

Owens Corning is a world leader in building materials systems
and composites systems. The Company has sales of $5 billion and
employs approximately 20,000 people worldwide. For more
information, please visit Owens Corning's Web site at:
www.owenscorning.com

On October 5, 2000, Owens Corning and 17 United States
subsidiaries filed voluntary petitions for relief under Chapter
11 of the U. S. Bankruptcy Code in the U. S. Bankruptcy Court
for the District of Delaware. The Debtors are currently
operating their businesses as debtors-in-possession in
accordance with provisions of the Bankruptcy Code. The Chapter
11 cases of the Debtors are being jointly administered under
Case No. 00-3837 (JKF). The Chapter 11 cases do not include
other U. S. subsidiaries of Owens Corning or any of its foreign
subsidiaries. The Debtors filed for relief under Chapter 11 to
address the growing demands on Owens Corning's cash flow
resulting from its multi- billion dollar asbestos liability.

Owens Corning is unable to predict at this time what the
treatment of creditors and equity holders of the respective
Debtors will be under any proposed plan or plans of
reorganization. Pre- petition creditors may receive under a plan
or plans less than 100% of the face value of their claims, and
the interests of Owens Corning's equity security holders may be
substantially diluted or cancelled in whole or in part. It is
not possible at this time to predict the outcome of the Chapter
11 cases, the terms and provisions of any plan or plans of
reorganization, or the effect of the Chapter 11 reorganization
process on the claims of the creditors of the Debtors, or the
interests of Owens Corning's equity security holders.


PACIFIC GAS: Seeks Okay To Honor Low-Cost Power Contracts
---------------------------------------------------------
Pacific Gas and Electric Company filed a motion with the U.S.
Bankruptcy Court asking the court to authorize it to pay past
due amounts for low-cost hydroelectric power purchased under
contracts with several California irrigation districts and water
agencies. Approval would also allow Pacific Gas and Electric
Company to clarify with the irrigation districts and water
agencies that these contracts are to be honored and retained for
the benefit of Pacific Gas and Electric Company's customers
going forward.

These long-term contracts account for 1,036 megawatts of
generation that is provided to Pacific Gas and Electric
Company's electric customers at an average cost of 1.15
cents/kWh. They represent some of the lowest-cost power
available to Californians. The benefits of these contracts are
passed on to customers with no profit retained by Pacific Gas
and Electric Company.

If approved by the court, Pacific Gas and Electric Company's
motion will enable the company to continue making monthly and
semiannual payments to six California irrigation districts and
water agencies for operations and maintenance (O&M) and
construction payments of their hydroelectric power generating
facilities.

Prior to filing the Chapter 11 petition on April 6, 2001, the
company had made all regular payments due to these irrigation
districts and water agencies. However, as a result of general
bankruptcy law prohibitions against post-petition payment for
services rendered but not yet paid for prior to the bankruptcy
filing date, Pacific Gas and Electric Company was unable to make
$1.6 million in payments due since April 6. Once the bankruptcy
court approves this motion, Pacific Gas and Electric Company
will be authorized to pay these entities any amounts due for the
period prior to its bankruptcy filing.

Specifically, the motion seeks to preserve six major long-term
agreements: (1) Tri-Dam project executed with the Oakdale and
South San Joaquin Irrigation Districts in 1952; (2) South Fork
Project executed with the Oroville-Wyandotte Irrigation District
in 1960; (3) Yuba-Bear Project executed with the Nevada
Irrigation District in 1963; (4) Middle Fork Project executed
with the Placer County Water Agency in 1963; (5) Merced River
Development Project executed with the Merced Irrigation District
in 1964; (6) Yuba River Development Project executed with the
Yuba County Water Agency in 1966. The motion also seeks to
preserve two smaller scale agreements both of which involved
adding new facilities onto existing projects: (1) Rollins
Project executed with the Nevada Irrigation District in 1978;
and (2) Sly Creek Project executed with Oroville-Wyandotte
Irrigation District in 1981.


PHELPS DODGE: Fitch Cuts Long-Term Debt Rating To BBB from BBB+
---------------------------------------------------------------
Fitch has downgraded the senior unsecured long-term debt of
Phelps Dodge to `BBB' from `BBB+' and has affirmed the ratings
on Phelps Dodge's short-term debt at `F2'.

The acquisition of Cyprus Amax in 1999 together with the
assumption of approximately $1.6 billion in debt significantly
changed the profile of the company's business and its source of
cash flow. The capital structure of the company, however, has
not significantly changed since the acquisition. Neither the
copper markets nor the energy markets of late have allowed
Phelps Dodge the opportunity to re-address its capital
structure. Profits are being squeezed from both sides. Spot
copper prices have been languishing at around $.76/lb. while
higher energy prices, especially purchased electricity and
natural gas, have been pushing up the company's cost of
production. Phelps Dodge has retained the services of Goldman
Sachs and J.P. Morgan to explore strategic alternatives for,
including the potential sale of, the PD Wire & Cable Group and
Columbian Chemicals. If this were to result in a reduction of
debt, Phelps Dodge would still have significant debt, a less
diverse earnings profile and a debt profile highly dependent on
cash flows determined by commodity prices not within the control
of the company.

The adjustment to Phelps Dodge long-term debt rating is more
appropriate for the larger role that copper prices have in
determining the company's fortunes, allowing for a fair amount
of debt capacity over the course of the copper cycle.


PILLOWTEX CORP.: Closing North Carolina Plants In June
------------------------------------------------------
Bankrupt Pillowtex Corp. said it would close plants in Newton
and Rocky Mount, N.C., by the end of June, according to the
Associated Press. The Dallas-based textile company's brands
include Fieldcrest, Cannon and Royal Velvet. The Newton plant
makes blanket yarn and the plant in Rocky Mount makes decorative
bedding exclusively for Ralph Lauren. That contract expires June
30. Bob Haase, Pillowtex's director of operations, attributed
the plant's closing to the pending sale of the company's blanket
division. The Kannapollis, N.C.-based Pillowtex makes household
textiles, including towels, sheets, rugs, blankets, pillows,
mattress pads, feather beds, comforters and decorative bedroom
and bath accessories. (ABI World, April 25, 2001)


PLANETGOOD TECH: Selling All Assets To TechInvest for $390,000
--------------------------------------------------------------
PlanetGood Technologies, Inc. (OTCBB:PGPG) announced that the
U.S. Bankruptcy Court for the Southern District of Indiana has
approved a purchase and sale agreement for the sale of
substantially all of the debtor's assets. An order was entered
in U.S. Bankruptcy Court approving the sale of substantially all
of the assets of the Company to TechInvest LLC for $390,000.
This was done in accordance with the bidding procedures as
established by the U.S. Bankruptcy Court. Whereby interested
parties had the opportunity to purchase the assets of the
Company. The approval was granted on April 24, 2001.

In February, the Company and its subsidiary filed voluntary
petitions with U.S. Bankruptcy Court for the Southern District
of Indiana under chapter 11 of the U.S. Bankruptcy Code. In the
time since the filing the Company has continued to seek
additional funding or a buyer to purchase the on-going
operations and assets of the Company. The U.S. Bankruptcy Court
received and accepted an offer from TechInvest, LLC on March 29,
2001, to purchase the Assets of the company for $390,000.


RUSSELL-STANLEY: Moody's Slashes Senior Sub Debt Rating To C
------------------------------------------------------------
Moody's Investors Service downgraded Russell-Stanley Holdings,
Inc.'s ratings as follows:

      * senior subordinated notes to C from Caa3

      * senior implied rating to Caa2 from B3 and

      * unsecured issuer rating to Caa3 from Caa1.

Moody's also confirmed the senior secured debt rating at B3.

The outlook is negative while approximately $150.0 million of
debt securities are affected.

According to Moody's, the downgrade reflects the company's
failure to make interest payment on its senior subordinated
notes within the 30-day grace period expiring March 15, 2001,
which resulted in a default under the bond indenture and also
constituted an event of default under the company's senior
credit facility. Consequently, all of the company's long-term
debt is said to be callable and has been classified as current
liabilities on the company's balance sheet as of December 31,
2000. Moody's relates that the company has entered into a 60-day
forbearance agreement with it lenders, which expired April 17,
2001 and then further extended to June 15, 2001, in which it's
lenders have agreed not to call the senior credit facility and
allow the company to continue to draw on its revolver. As part
of the forbearance agreement the revolver was reduced to $60
million from $75 million. Accordingly, the company has $20
million available under its revolver as of December 31, 2000.

The B3 rating on the senior secured debt reflects tangible book
assets of $141 million available to cover $65 million of senior
secured outstanding, according to Moody's.

Russell-Stanley Holdings, Inc., is based in Bridgewater, New
Jersey. It manufactures plastic and steel industrial containers
and provides related services in the United States and Canada.


SAFETY-KLEEN: Exclusive Period Further Extended To October 30
-------------------------------------------------------------
Appearing through Patricia A. Widdoss and Gregg M. Galardi of
the Wilmington branch of Skadden, Arps, Slate, Meagher & Flom,
Safety-Kleen Corp. have requested a further extension of the
time during which they have the exclusive right to present and
plan and to seek acceptances of any plan filed. The Court had
previously extended these two periods to April 30, and June 29,
2001, respectively. The Debtors now requested a further
extension of six months to October 30, 2001, for plan
presentation, and December 28, 2001, for solicitation of plan
acceptances.

In support of this request, the Debtors told Judge Walsh that
they need a further extension of these periods to determine the
most effective way to maximize the value of their estates for
the benefit of all creditors; to formulate, negotiate and file a
plan that achieves that goal; and to solicit acceptances of that
plan. Ms. Widdoss reminded Judge Walsh that in determining
whether to grant an extension the Court may consider, among
other factors:

      (a) The size and complexity of the Debtors' cases;
      (b) The existence of an unresolved contingency, and the
          need to resolve claims that may have a substantial
          effect on a plan;
      (c) The Debtors' progress in resolving issues facing
          their estates; and
      (d) Whether an extension of time will harm the Debtors'
          creditors.

However, Ms. Widdoss said that the most important factor to be
considered is whether the Debtors have had a reasonable
opportunity to (a) negotiate an acceptable plan with their
creditor constituencies and other interested parties; and (b)
prepare adequate financial and non-financial information
concerning the ramifications of that plan for disclosure to
creditors.

In this case, a further six-month extension is warranted
because:

      (1) The size and complexity of the Debtors' Chapter 11
cases alone constitutes sufficient cause to further extend the
exclusivity periods. The Debtors' have described assets worth
more than $4.45 billion, and debts of more than $3.14 billion.
The 74 debtors whose jointly administered cases are pending
constitute the largest hazardous and industrial wastes company
in North America, collectively employing more than 10,000, and
serving 400,000 customers in 47 states through a network of
almost 300 operating facilities. The Debtors' cases are also
complex.

The Debtors' current business operations are the product of
numerous acquisitions and other business consolidations, some of
which were not fully assimilated prior to the filing of these
cases. The success of the Debtors' business plan involves, among
other things, completion of the assimilation of these varied
enterprises into a cohesive unit, and/or divestiture of those
operations that do not, and will not, provide a strategic fit or
advantage for the Debtors on a going-forward basis. The
finalization of a business plan to implement these goals,
however, cannot occur until after the Debtors restate their
1997, 1998, and 1999 financial results, a task described by Ms.
Widdoss as "Herculean".

      (2) The Debtors have made significant progress in resolving
issues facing their estates, Ms. Widdoss claimed. Ms. Widdoss
cited as a primary example of that progress the procurement of
postpetition financing and the Debtors' continued satisfaction
of postpetition obligations.

          (a) As owners and operators of hazardous waste
management facilities, the Debtors are subject to various
financial assurances requirements under state and federal law.
Through the financial difficulties of the two insurance
companies the Debtors had previously utilized to provide these
assurances, the Debtors were faced with the daunting task of
replacing more than $400 million in compliant financial
assurances with new coverage. To date, Ms. Widdoss told Judge
Walsh the Debtors have successfully replaced more than $130
million in coverage previously provided by Reliance Insurance
Company of Illinois with new coverage provided by Indian Harbor
Insurance Company, rated A.M. Best A+ (Superior) as an
underwriter. In addition, the Debtors have been diligently
exploring all available alternatives to replace - and have made
progress toward replacing - the surety bonds issued by Frontier
Insurance Company, a company which had been declared by the
Environmental Protection Agency as no longer qualified as an
acceptable surety, the Frontier bonds. However, Ms. Widdoss
pointed out that the Frontier bonds, although no longer
qualifying as acceptable federal bonds, remain in place and
effective until they are replaced.

          (b) The Debtors' restatement of its financial
statements is described as a "critical step" in the formulation
of a reorganization plan. The plan has been both hampered and
complicated by the Debtors' need to restate three years of its
financial statements through 1999, and complete the audit of the
year 2000. Although the Debtors' management and professionals
have devoted significant amounts of time to these problems, they
still require additional time to complete the project. Once a
plan is finalized, the Debtors will still need to assess their
actual and projected financial performance under the plan, and
discuss the results with their major creditor constituencies.
The requested extension of time is intended to give the Debtors
sufficient time to complete this process, and permit them to
formulate, negotiate and propose a reorganization plan or plans.

          (c) The Debtors have streamlined many of their
operations by divesting themselves of non-core assets, such as
those associated with their discontinued harbor dredging
operations. In addition, the Debtors have divested themselves of
a minority interest in SK Europe, Ltd., a European joint
venture, and have sold, or are in the process of selling,
underutilized or unprofitable real properties, and by shedding
burdensome real and personal property leases and executory
contracts. While they have made significant progress, given the
enormous number of leases and contracts to which they are a
party the Debtors reasonably require additional time to complete
this task. The Debtors assured Judge Walsh that extending the
exclusivity periods will permit them to complete this task. The
Debtors further report that since the bar dates of last year
more than 16,000 claims have been filed against these estates
for a total of $176 billion. The Debtors have begun the
"monumental" task of analyzing the validity, nature and amount
of these claims. This analysis is critical to the Debtors'
preparation of a plan and their ability to determine the
appropriate treatment of claims under a plan. The requested
extension is necessary to complete this process - a prerequisite
to the formulation of a plan.

          (d) The requested extension will not prejudice any
party in interest. The Debtors have timely met, and continue to
timely meet, their postpetition obligations. Further the Debtors
continue to work closely with their various creditor
constituencies to develop a consensual plan. The Debtors told
Judge Walsh these facts strongly militate in favor of granting
the requested extensions.

Persuaded by these arguments, Judge Walsh ordered the requested
extensions of time for the Debtors' exclusive rights to the
filing of a plan, and to the solicitation of acceptances for
such a plan. (Safety-Kleen Bankruptcy News, Issue No. 15;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


SECURITY ASSOCIATES: Looking For Funds To Meet Debt Obligations
---------------------------------------------------------------
Security Associates International, Inc. provides security and
fire alarm monitoring services for both residences and
businesses. In this capacity it acts as subcontractor for
independent alarm dealers who have contracted to provide alarm
monitoring services to their subscribers. Independent alarm
dealers are primarily owner-operated companies with less than
10,000 subscribers. The Company's ability to attract new
monitoring business is enhanced and supported by a network of
over 2,500 independent alarm dealers, to whom Security
Associates also provide industry-related education in the areas
of technology, finance, management and marketing.

The Company sustained net losses from continuing operations of
$4.0 million for the year ended December 31, 1997, $6.8 million
for the year ended December 31, 1998, $4.0 million for the year
ended December 31, 1999, and $5.8 million for the year ended
December 31, 2000. On a pro forma basis after giving effect to
the potential merger with KC Acquisition Corp., the Company
would have incurred a loss from continuing operations of $10.6
million for the year ended December 31, 1999 and $12.6 million
for the year ended December 31, 2000. These losses reflect,
among other factors, the substantial non-cash charges for
amortization of purchased subscriber accounts and goodwill
associated with acquired central monitoring station businesses
and the interest on indebtedness. Security Assoiciates expects
to incur significant additional losses during the next several
years. The Company says it cannot assure that it will achieve or
sustain profitability.

The Company has approximately $18,152,000 of consolidated
indebtedness and stockholders' equity of approximately
$10,268,000 at December 31, 2000. On a pro forma basis adjusted
for the completion of the potential merger with KC Acquisition
Corp., it would have had approximately $55.5 million of
consolidated indebtedness and stockholders' equity of $35.1
million at December 31, 2000. In addition, it may incur
additional indebtedness in the future as part of its business
strategy. If the Company incurs additional debt, the risks could
intensify.

This large amount of indebtedness could, for example:

      - limit its ability to obtain additional financing for
working capital, capital expenditures, acquisitions and other
general corporate activities;

      - limit its flexibility in planning for, or reacting to
changes in its business and the industry in which it operates;

      - detract from the Company's ability to successfully
withstand a downturn in business or the economy generally; and

      - place it at a competitive disadvantage against other less
leveraged competitors.

The occurrence of any one of these events could have a material
adverse effect on the Company's business, financial condition,
results of operations and prospects. There can be no assurance
that additional funding can be secured on acceptable terms, if
at all.

Security Associates' ability to obtain sufficient cash to make
payments on scheduled and contingent obligations as they come
due will depend on future cash flow from operations and its
financial performance, which will be affected by a range of
economic, competitive and business factors. If the Company does
generate sufficient cash flow from operations to service its
debt, it may be required to undertake alternative financing
plans, such as refinancing or restructuring its debt, selling
assets, reducing or delaying capital investments or seeking to
raise additional capital.

The Company states that it cannot assure that any refinancing
would be possible, that any assets could be sold, or, if sold,
of the timing of the sales and the amount of proceeds realized
from those sales, or that additional financing could be obtained
on acceptable terms, if at all. The Company's inability to
obtain sufficient cash to satisfy its obligations, or to
refinance its indebtedness on commercially reasonable terms,
would have a material adverse effect on its business, financial
condition, results of operations and prospects. Moreover, its
failure to pay certain obligations when due could result in the
acceleration of its debt. The debt under its credit facilities
is secured by liens on substantially all of its assets and, if
that debt were accelerated, the lenders could seek to foreclose.

The Company's executive offices are located at 2101 South
Arlington Heights Road, Arlington Heights, Illinois. Its central
monitoring stations and Dealer Support Centers are located at:

      - 2101 South Arlington Heights Road Arlington Heights,
        Illinois
      - 1471 S.W. 12th Avenue, Pompano Beach, Florida;
      - 1514 East 191 Street, Euclid, Ohio;
      - 9750 Brockbank, Dallas, Texas;
      - 12610 Richmond Avenue, Houston, Texas;
      - 4507 North Channel Avenue, Portland, Oregon;
      - 1249 N.E. 145th, Seattle, WA; and
      - 2178 Washington Boulevard, Ogden, Utah.

The Company's net revenues for 2000 were $22,215,282 compared to
$22,689,132 for the same period in the prior year, a decrease of
2.0%.

Net loss for the year 1999 was $ (4,046,635), while net loss for
2000 was $ (5,752,424).


SILVER CINEMAS: Wins Court Nod For $40 Million Asset Sale
---------------------------------------------------------
Silver Cinemas International Inc. received bankruptcy court
approval Friday to sell its assets for about $40 million to an
affiliate of Oaktree Capital Management LLC, according to Dow
Jones. Oaktree is the motion picture theater owner and
operator's largest unsecured creditor. The sale consists of
about 72 theaters located throughout the United States. It is
assumed that Oaktree will continue to operate the theatres,
which the company used mainly to show independent, specialty and
foreign films.

The Addison, Texas-based Silver Cinemas will use proceeds of the
sale to cure lease defaults, to pay employee retention and
severance benefits and various professional fees, and to pay
amounts owed to debtor-in-possession (DIP) lenders Foothill
Capital Corp. and Ableco Finance LLC. Silver Cinemas filed for
chapter 11 protection on May 16, 2000. (ABI World, April 25,
2001)


STAGE STORES: Files Reorganization Plan and Disclosure Statement
----------------------------------------------------------------
Stage Stores Inc. (OTCBB:SGEEQ) and its wholly-owned
subsidiaries, Specialty Retailers Inc. and Specialty Retailers
Inc. NV, today announced that they have filed a consolidated
Plan of Reorganization and Disclosure Statement with the U.S.
Bankruptcy Court for the Southern District of Texas. The
Companies expect the Bankruptcy Court to conduct a hearing on
May 21, 2001 for the purpose of making a determination as to the
adequacy of the Disclosure Statement. Once approval is received
from the Bankruptcy Court, the Companies will commence
solicitation of votes from creditors for approval of the Plan of
Reorganization.

Under the terms of the proposed Plan of Reorganization, pre-
petition unsecured creditors will principally receive common
stock in a reorganized holding company, Stage Stores Inc., in
settlement of their claims. The holders of existing common stock
of the Company will receive no distribution under the proposed
Plan of Reorganization and it is anticipated that the existing
shares of common stock will be cancelled. The reorganized Stage
Stores Inc. will continue to operate stores under the Stage,
Bealls and Palais Royal names.

The Company has focused intently over the last year on
identifying and operating its core store base of 347 stores
located primarily in the south central states. Jim Scarborough,
chief executive officer and president, commented, All of our
associates have worked hard at restoring customer relationships.
Recent operating results indicate we are regaining the
customer's confidence with significant sales gains being
achieved. We believe we have accomplished the goals we set forth
in filing for Chapter 11 protection and believe the Plan of
Reorganization will allow the Company to operate as a profitable
entity going forward.

Stage Stores Inc. brings nationally recognized brand name
apparel, accessories, cosmetics and footwear for the entire
family to small towns and communities throughout the south
central United States. The Company currently operates stores
under the Stage, Bealls and Palais Royal names.


STELLAR FUNDING: S&P Downgrades Ratings On Two Classes of Notes
---------------------------------------------------------------
Standard & Poor's lowered its ratings on the class A-3 and A-4
notes issued by Stellar Funding Ltd. and co-issued by Stellar
Funding CBO Corp.

The rating on the A-3 notes was lowered to triple-'B'-minus from
single-'A'-minus, and the rating on the class A-4 notes was
lowered to single-'B' from double-'B'. Concurrently, both
ratings were removed from CreditWatch with negative
implications, where they were placed on April 9, 2001.

The ratings actions reflect the continuing deterioration in the
collateral pool credit quality and an increase in the pool
default rate since Feb. 13, 2001, when the rating on the class
A-3 notes was lowered to single-'A'-minus from triple-'A', and
the rating on the class A-4 notes was lowered to double-'B' from
single-'A'.

According to the April 10, 2001 trustee report, $45.4 million,
or approximately 17% of the total collateral pool, is in
default. Out of the $45.4 million, approximately $13 million was
reported to be in default following the February 13 ratings
actions. In addition, due to the significant credit
deterioration in the collateral pool, the transaction is
currently failing three out of four categories in Standard &
Poor's issuer rating distribution test.

In reaching its rating actions, Standard & Poor's reviewed the
results of recent cash flow model runs. These runs stressed
various parameters that are instrumental in the performance of
the transaction, and are used to determine the transaction's
ability to withstand various levels of defaults. The stressed
performance of the transaction was then compared to the
projected default performance of the current collateral pool.
Standard & Poor's found that the projected performances of the
class A-3 and A-4 notes, given the current quality of the
collateral pool, was not consistent with its prior ratings.
Consequently, Standard & Poor's has lowered its ratings on the
class A-3 and A-4 notes to the new levels.

The new defaults have resulted in the continuing violation of
the overcollateralization test, where defaults are immediately
excluded from the collateral pool for the calculation of the
overcollateralization ratio. The overcollateralization test
(currently 82.38% versus the required minimum of 116.0%) has
been out of compliance since April 2000.
Standard & Poor's will continue to monitor its ratings on the
class A-3 and A-4 notes.--CreditWire


SUN HEALTHCARE: Hires Bouchard As Special Litigation Counsel
------------------------------------------------------------
Sun Healthcare Group, Inc. sought and obtained the Court's
approval, pursuant to sections 327(a) and 329 of the United
States Bankruptcy Code, and Rules 2014 and 2016 of the
Bankruptcy Rules for their employment and retention of Bouchard
Margules & Friedlander as their Conflicts and Special Litigation
Counsel with respect to certain discrete matters, and
specifically for each of them to employ and retain Bouchard
Margules & Friedlander as their conflicts and special litigation
counsel.

The Debtors told Judge Walrath they need to retain Bouchard
Margules as conflicts and special litigation counsel with
respect to discrete legal issues and matters where Richards,
Layton & Finger, P.A. may have a conflict.

Mr. David J. Margules and Ms. Joanne P. Pinckney of the firm
Bouchard Margules & Friedlander are experienced practitioners in
the Delaware courts. The Debtors believe Mr. Margules and Ms.
Pinckney are well qualified to act as Conflicts And Special
Litigation Counsel on their behalf.

The Debtors assured the Court that they will take appropriate
steps to avoid unnecessary and wasteful duplication of legal
services among Bouchard Margules & Friedlander and Richards,
Layton and Finger.

As Ms. Pinckney indicated in her Affidavit, Bouchard Margules &
Friedlander will seek compensation for legal services rendered
in these cases at the then-current rate charged for such
services on a non- bankruptcy matter. Ms. Pinckney advises the
Court that the current standard hourly rate for her legal
services is $225 per hour and the hourly rate for Mr. David
Margules' services is $330 per hour. These rates may change from
time to time in accordance with the Firm's established billing
practices and procedures. Bouchard Margules & Friedlander
intends to apply to the Court for allowance of compensation for
professional services rendered and reimbursement of expenses
incurred in accordance with applicable provisions of the
Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, the
Local Bankruptcy Rules, and the orders of this Court.

Ms. Pinckney revealed that in January 2000, Bouchard Margules &
Friedlander was retained to represent a potential ad hoc
committee of equity security holders in the Sun cases. On
February 2000, Bouchard Margules & Friedlander entered its
appearance on behalf of the ad hoc committee. Although no
substantive work was performed for this committee and Bouchard
Margules & Friedlander subsequently withdrew its appearance on
March 21, 2000, Bouchard Margules & Friedlander contacted
Michael Lederman, the primary representative of the ad hoc
committee, and advised him that Bouchard Margules & Friedlander
was seeking to be employed as Debtors' conflicts and special
litigation counsel in these cases. Mr. Lederman advised that he
perceives no conflict or other bar to the appointment of
Bouchard Margules & Friedlander as such counsel and has no
objection to such appointment.

Ms. Pinckney submitted that to the best of her knowledge and as
her research of the firm's client base shows, Bouchard Margules
& Friedlander is a "disinterested person," as defined in Section
101(14) of the Bankruptcy Code. (Sun Healthcare Bankruptcy News,
Issue No. 20; Bankruptcy Creditors' Service, Inc., 609/392-0900)


UNITEL VIDEO: Sells Studio Business Assets For $23 Million
----------------------------------------------------------
Unitel Video Inc. sold the assets of its studio production
business to All Mobile Video Inc. for about $23 million,
according to Dow Jones. Unitel said the sale is pursuant to an
asset purchase agreement approved by order of the U.S.
Bankruptcy Court in Delaware, where the company's chapter 11
case is pending. Last January, Unitel agreed to sell the assets.
In May 2000, the company sold its mobile production unit's
assets to NEP Supershooters Inc. for $6 million, which is also
part of its bankruptcy case. Unitel filed for chapter 11
bankruptcy in September 1999. (ABI World, April 25, 2001)


VELOCITYHSI INC.: Completes $2.5 Million Financing
--------------------------------------------------
VelocityHSI, Inc. (OTCBB:VHSI), a provider of high-speed
Internet services to the apartment industry announced the
completion of a private placement of Series A Convertible
Preferred Stock to Banc of America Mortgage Capital Corporation
(BAMCC) resulting in gross proceeds to the company of $2.5
million.

Pursuant to the financing, the company issued 2,083,333 shares
of Series A Convertible Preferred Stock, par value $.01 per
share, at a price of $1.20 per share. The Series A Preferred
Stock ranks prior to the company's common stock with respect to
dividends and upon liquidation, dissolution, winding up or a
change of control of the company. The preferred stock was issued
in a private placement without registration and may not be
offered or sold absent registration or an applicable exemption
to such requirements. The company has granted BAMCC certain
registration rights in connection with the Series A Preferred
Stock. The private placement resolves all issues between BAMCC
and the company with respect to earlier financing arrangements
between them that were not consummated.

The company has previously stated that in light of its current
cash flow and funding commitments and its current lack of other
funding sources, the company anticipates that cash currently
available will permit continued operations only through the
second quarter of 2001, although there can be no assurance in
this regard. In order to continue operations beyond that period,
the company will require an additional, substantial capital
infusion. Although the $2.5 million in proceeds from the
completed financing will assist the company to continue
operating while seeking strategic alternatives, the company does
not expect that these proceeds alone will enable the company to
continue operations beyond the second quarter of 2001.

The company is actively exploring strategic alternatives, which
might include a merger, asset sale, or another comparable
transaction or a financial restructuring. However, in the event
the company is unsuccessful in completing one of these strategic
alternatives, the company will likely be unable to continue
operations beyond the second quarter of 2001. In that case, the
company's securities are expected to have no value. Potential
investors in the company's securities should consider the risk
that, even if the company is successful in completing a
strategic transaction as described above, the company's
securities may nonetheless have no value. In addition, if the
company is able to complete a financing through the issuance of
equity, equity-linked or debt securities, those securities may
have rights, preferences or privileges senior to those of the
rights of our existing securities and the company's stockholders
will likely experience significant dilution.


VENCOR INC.: Settles Ogden Environmental's Claims
-------------------------------------------------
Vencor, Inc. and Ogden Environmental & Energy Services Company
sought and obtained the Court's approval of the agreement
between them to consolidate three previously settled claims into
one Ogden Claim in the amount of $171,477.00.

Prior to Vencor's petition date, Ogden agreed to render certain
services to several facilities now owned by the Debtor or
Ventas, Inc. Subsequently, also before the petition date, Ogden
entered into a sub- contract with RAH Environmental, Inc. for
the provision of the Ogden Services.

In connection with the services provided, Ogden filed a proof of
claim (no. 5148) in the amount of $730,028.68.

Pursuant to the Court's approval of the Debtors' Settlement
Procedures to resolve, Mediate, Compromise or Otherwise Settle
Certain Claims, the parties entered into a Settlement Agreement
whereby the parties agreed for Ogden to have itemized claims of:

      $ 86,111    for work performed at the Los Angeles facility
      $ 63,042    for work performed at the Sacramento facility
      $ 7,680     for work performed at the Reno facility
      $ 7,200     for work performed at the Las Vegas facility
      $ 7,444     for work performed at the Illinois facility
      ----------
      $171,477

As to the status of the claim, Ogden asserted that Claim No.
5148 is a secured claim in that Ogden claims a mechanic's lien
on the real property on which the facilities are located, which
is a perfected claim pursuant to section 546(b) of 11 U.S.C. The
Debtors take no position as to the purposes of this Stipulation
with respect to this.

To minimize the administrative burden on the Debtors in their
claims reconciliation process, the Debtors and Ogden agreed
that:

      (1) the Itemized Claims will constitute one claim in the
aggregate amount of $171,477;

      (2) Claim No. 5148 will be accordingly reduced from the
original amount of $730,028.68 to the reduced amount of
$171,477.00.

      (3) The Debtors' rights to object to the alleged secured
status of the Ogden Proof of Claim, as reduced by this
Stipulation, on any legal or factual grounds are expressly
preserved;

      (4) Ogden's rights to assert that the Ogden Proof of Claim,
as reduced by this Stipulation, is a secured claim on any legal
or factual grounds, are expressly preserved. (Vencor Bankruptcy
News, Issue No. 29; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


W.R. GRACE: Court Okays Payment Of Corporate Representation Fees
----------------------------------------------------------------
United States Corporation Company provides W. R. Grace & Co.
with corporate representation services in approximately 300
jurisdictions throughout the United States, including, but not
limited to, state and local governments. Specifically, USCC:

      (a) accepts service of process;

      (b) obtains incorporations and qualifications, dissolutions
and withdrawals (providing and filing forms and gathering
background data, such as certified corporate charters, good
standing certificates, etc., to be filed with the
documentation);

      (c) making "urgent" tax and annual report filings (securing
same-day or next-day clearance) with the appropriate
Authorities;

      (d) obtaining from the appropriate Authorities certificates
of corporate good standing; and

      (e) obtaining legalizations and apostilles required by
foreign governmental authorities.

USCC, David B. Siegel, Grace's Senior Vice President and General
Counsel, told Judge Newsome, provides the Representation
Services more efficiently and effectively than the Debtors can
because USCC has detailed knowledge of each jurisdiction's
relevant regulations. Retaining a new Representative would be
nearly impossible. Without USCC's services, the Debtors would
miss many important filing deadlines, penalties would result,
and the cost of doing USCC's work in-house would be far higher
than what USCC's owed.

By Motion, predicated upon a "necessity of payment doctrine"
argument, the Debtors sought and obtained authority from Judge
Newsome to pay up to $450,000 that they estimate owed to USCC on
account of pre-petition charges and reimbursable expenses. (W.R.
Grace Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


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


WINSTAR: Shares Knocked Off the NASDAQ Market
---------------------------------------------
Winstar Communications, Inc. (NASDAQ: WCIEQ) said that NASDAQ
has informed Winstar that the company's securities were to be
delisted from the NASDAQ Stock Market at the opening of business
on April 26, 2001.

NASDAQ halted trading of Winstar's common stock, at last price
of .14 on April 18, 2001, when Winstar filed for relief under
Chapter 11 of United States Bankruptcy Code in the United States
Bankruptcy Court of the State of Delaware.

The company does not plan to appeal NASDAQ's decision.


BOOK REVIEW: GOING FOR BROKE: How Robert Campeau Bankrupted the
              Retail Industry, Jolted the Junk Bond Market, and
              Brought the Booming 80s to a Crashing Halt
---------------------------------------------------------------
Author:  John Rothchild
Publisher:  Beard Books
List Price:  $34.95
Review by Gail Owens Hoelscher

Robert Campeau, one of 14 children born to a French Canadian
mechanic and blacksmith, invested $5,000 in a modest house under
construction in Ottawa in 1949, doing most of the carpentry work
himself.  Foreseeing the post-war suburb boom, and virtually
creating the Ottawa skyline, he went on to build a successful,
sprawling $200 million real estate corporation.

Then, riding the tidal wave of leveraged buyouts of the late
1980s, he borrowed $11 billion from Wall Street to acquire
Allied Stores and Federated Department Stores, both successful
and relatively debt-free retail conglomerates, in hostile
takeovers.  Fortune magazine called the Federated buy "the
biggest, looniest deal ever."  Two years later, Allied,
Federated, and Campeau Corporation were plunged into Chapter 11
receivership.

Campeau was so many things:  risk-taker extraordinaire,
charming, earnest, eccentric, endearing, cocky, extravagant,
persistent, impetuous, commanding, frenetic, and capricious.  He
shocked the conservative Canadian business community with his
brazenness, flamboyance and quirky ways.  In 1980, he showed up
at the home of the CEO of Royal Trustco, Canada's largest trust
company and real estate brokerage, at breakfast time.  His
English only passable, Campeau told the astonished CEO that he
was taking over Royal Trustco that very day.  Campeau was
summarily thrown out and the major business players in Canada
quickly got together and bought up all the outstanding shares of
Royal Trustco to thwart his plan.

Campeau was a total stranger to the U.S. investment banking
world.  His quest had begun with the intention of buying a U.S.
bank or S&L.  Reading about the hostile takeover of Macy's,
however, he abruptly ordered his Canadian financiers to look for
a retail company instead.  Once in contact with Wall Street, he
bemused them with his picturesque and baffling ways of doing
business.  He invited them moose-hunting and called them at 5:00
a.m.  He disappeared without warning to get a facelift in
Brazil, only to reappear months later, calling one banker down
from the ski slopes. He sported jaunty hats with feathers and
brought his chef to meetings.  He was discovered to have two
families, a wife and three children in Ottawa, a mistress and
two children in Montreal.

Blinded or dazzled by all this, enticed by the prospect of
colossal fees, and caught up in their times, investment bankers
assembled the funds needed for Campeau's adventure into
retailing.  He drastically overbid for both companies.  In the
case of Federated, Campeau paid a little over $8 billion for the
company, which had had a market value of $3 billion, and
borrowed about $7 billion.  Allied was worth about $2 billion,
but he paid more than $4 billion.

Campeau never found the "synergy between real estate and retail"
he promised the shocked and angry management and employees of
the two companies.  Saddled with enormous debt, Campeau's
complete ignorance of the retail industry, his ridiculously high
expectations and broken promises, the companies went into a
free-fall.  Casualties included upward of 10,000 employees laid
off at Federated and Allied alone, junk-bond investors,
brokerages stuck with bridge loans, other retailers forced to
lower their prices as Allied and Federated unloaded inventory,
and creditors with claims of over $8 billion.

The first line of Going for Broke reads "This is the story of a
marvelous financial calamity."  Read on and be amazed, amused
and saddened.

John Rothchild is a well-known journalist and writer.  He has
authored and co-authored eight books, including three co-
authored with Peter Lynch.

                            *********

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

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

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

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


                           *********


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

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

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

This material is copyrighted and any commercial use, resale or
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