TCR_Public/010508.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

                Tuesday, May 8, 2001, Vol. 5, No. 90

                            Headlines

BIG CITY: Senior Discount Note Rating Cut To Caa3 From B3
C*STRATEGIC: S&P Lowers Rating on Class D Notes To B From BB
CAPITAL ENVIRONMENTAL: Reports 2000 and Fourth Quarter Losses
COLLABWARE CORP: Ceases Operations & Continues To Look For Buyer
COVENTRY HEALTH: Annual Shareholders' Meeting Is On June 7

DTE BURNS: S&P Lowers Senior Secured Note Rating to BB From BB+
EASTERN PULP: Reviewing U.S. Notice Of Claim
FRIEDE GOLDMAN: Moves To Reject Two Petrodrill Contracts
FRUIT OF THE LOOM: Creditors Seek Nod To File Records Under Seal
INTEGRATED PACKAGING: Shareholders' Meeting Set For May 29

KEY PLASTICS: Carlyle Management Group Completes Acquisition
LERNOUT & HAUSPIE: Wants To Assume ISI Stock Purchase Agreement
LOCALBUSINESS.COM: Files Chapter 11 Petition in Florida
LOCALBUSINESS.COM: Chapter 11 Case Summary
MARINER: Court Okays Transfer Agreement re Grancare HCC-Phoenix

MAXICARE HEALTH: Closing Indiana Unit to Stem Continuing Losses
MISSISSIPPI CHEMICAL: Fitch Cuts Senior Debt Ratings To Low-B's
NCS HEALTHCARE: Reports Fiscal 2001 Q3 Financial Results
NEXTAR FINANCE: Moody's Rates Senior Discount Notes at Caa1
PILLOWTEX: Moves To Pay-off Certain Revenue Bond Financings

RAYTHEON COMPANY: Discloses Pricing of Public Share Offerings
RAYTHEON COMPANY: SEC Subpoenas Documents
SAFETY-KLEEN: EQ Entities Ask For Stay Relief To Effect Setoff
SONG CORPORATION: Shuts Down & Liquidates Assets To Pay Debts
SPECTRANETICS: Stockholders To Convene In Colorado On June 12

SUN HEALTHCARE: Rejecting 9 NHP Healthcare Facilities Leases
SUNBEAM CORP.: Court Approves Chapter 11 Disclosure Statement
TANDYCRAFTS: Gets Delisting Notice From New York Stock Exchange
TOMANET: Appoints Consultants To Develop Reorganization Plan
URSUS TELECOM: Nasdaq Notifies of Possible Delisting of Shares

VALUE HOLDINGS: Names Alison Cohen As Interim President
VLASIC FOODS: Has Until September 30 To Make Lease Decisions
W.R. GRACE: U.S. Trustee Appoints Asbestos Claimants' Committee
WESTPOINT STEVENS: Moody's Slashes Senior Notes' Rating To Caa2
WHEELING-PITTSBURGH: Exclusive Period Extended To June 14

WICKES INC.: Stockholders To Meet In Illinois On May 23
WINSTAR COMMUNICATIONS: Paying Prepetition Tax Obligations
WORLD KITCHEN: Appoints Joseph McGarr As Senior VP & CFO
WORLDTEX: Court Okays Disclosure Statement Despite Objection

                            *********

BIG CITY: Senior Discount Note Rating Cut To Caa3 From B3
---------------------------------------------------------
Moody's Investor's Service downgraded the rating on Big City
Radio, Inc.'s $174 million of senior discount notes to Caa3 from
B3 and changed the outlook to negative. The ratings of Big
City's senior implied and senior unsecured issuer rating were
lowered to Caa3 as well. Approximately $174.0 million of debt
securities are affected.

According to Moody's, the downgrade and negative outlook reflect
Big City's significant liquidity shortfall for the year 2001,
its continued operating losses and the imminence of the notes
cash pay requirement.

Although Moody's sees a material asset value associated with the
company's portfolio of radio stations, the rating agency noted
that in a liquidation scenario, there might be distressed
pricing. Big City's senior discount notes become cash pay this
year with a payment of $9.8 million due September 15, 2001.
However, it lacks the funds to make the payment. The company,
since inception, has reportedly been operating with negative
cash flow. Moody's reported that the company's marketable
securities which had been funding the company are mostly
depleted at $1.9 million. While the company does not have any
outstanding bank debt, should it borrow in the future, it is
likely the senior notes would be subordinated to any future
outstandings, Moody's said.

Based in Hawthorne, New York, Big City Radio, Inc. owns and
operates radio stations.


C*STRATEGIC: S&P Lowers Rating on Class D Notes To B From BB
------------------------------------------------------------
Standard & Poor's lowered its rating on the class D1 and D2
floating-rate notes co-issued by C*STrategic Asset Redeployment
Program 1999-2 Ltd. and C*STAR 1999-2 Corp. Standard & Poor's
also affirmed its rating on C*STrategic 1999-2's class A1, A2,
B1, B2, C1, and C2 notes.

The rating actions on the notes follow the increase in the
expected default rate at the double-'B' level caused by the
deterioration in the credit quality of the portfolio, combined
with the expected reduction in credit enhancement following the
default of three reference entities that together make up 1% of
the portfolio.

The reference pool is a $4 billion revolving pool comprising
senior unsecured loan debt obligations originated by Citibank
N.A. and domiciled in the U.S. or Canada.

Under the terms of the credit default swap, the face amount of
the notes will be reduced as a result of cumulative losses in
the reference pool in excess of the loss threshold amount.
C*STrategic 1999-2's ratings continue to reflect the credit
quality of the reference credits, the level of credit
enhancement provided by subordination and the loss threshold,
and Citibank's ability to meet its payment obligations as
counterparty under the credit default swap, Standard & Poor's
said.

                Outstanding Ratings Lowered

C*STrategic Asset Redeployment Program 1999-2 Ltd.
Eur9 Million and $47 Million Floating-Rate Notes Due November
2009

           Class                   Rating
                            To               From
           D1               B                BB
           D2               B                BB


                  Outstanding Ratings Affirmed

C*STrategic Asset Redeployment Program 1999-2 Ltd.
Eur65 Million, $33 Million, Eur24 Million, $24 Million, Eur35
Million,  and $43 Million Floating-Rate Notes Due November 2009

           A1               AAA
           A2               AAA
           B1               AA
           B2               AA
           C1               A
           C2               A


CAPITAL ENVIRONMENTAL: Reports 2000 and Fourth Quarter Losses
-------------------------------------------------------------
Capital Environmental Resource Inc. (Nasdaq: CERI) reported
fourth quarter and fiscal year 2000 results. For the fourth
quarter, the Company reported a loss after certain one-time
items of $17.5 million or $2.43 per share (diluted) compared to
net income of $0.8 million or $0.11 per share for the comparable
period in 1999. Revenue for the quarter was $28.3 million,
compared with $28.0 million for the year earlier period.

Adjusted EBITDA in the fourth quarter of 2000 (after adjusting
for a $13.5 million provision for impairment of goodwill, $0.5
million of business interruption gain and a $0.2 million gain on
foreign exchange) was $4.8 million or 17.1% of revenue, a 1.1%
decrease from the comparable period in 1999 of $4.9 million or
17.5% of revenue (after adjusting for a $1.1 million gain on
fixed assets). EBITDA is defined as net income (loss) plus
income taxes, net interest expense, depreciation and
amortization. Operating loss for the fourth quarter of 2000 was
$12.2 million, compared to an income of $3.5 million or 12.4% of
revenue for the year earlier period. Adjusted for the unusual
items noted above in the fourth quarters of 2000 and 1999 and an
additional $1.1 million (for depreciation and amortization
expense related to a review of the Company's fixed assets in the
fourth quarter of 2000) produces operating income of
$1.8 million or 6.3% of revenue, a 25.5% decrease from the year
earlier period of $2.4 million or 8.5% of revenue.

As announced on April 2, 2001, the Company sold substantially
all of its assets in New York and Pennsylvania for a total cash
purchase price of approximately $21.0 million. The net cash
proceeds (after taking into account a holdback plus transaction
and other related costs) from the transaction of approximately
$16.4 million were used to repay indebtedness to the Company's
senior lenders. In connection with the sale of these assets, the
Company established a provision for impairment of goodwill of
$13.5 million in the fourth quarter of 2000.

Additional unusual charges in the fourth quarter of 2000
included approximately $2.3 million of a tax valuation allowance
and approximately $0.2 million of financing costs associated
with the third amendment to the Company's credit facility and
term loan agreements (Senior Debt) in December of 2000.

For the year ended December 31, 2000, losses were $18.3 million
or $2.54 per share (diluted), compared to a net income of $3.0
million or $0.51 per share for 1999. Revenue for 2000 increased
19.9% to $117.0 million from $97.6 million last year. Adjusted
EBITDA for 2000 (after adjusting for $2.1 million of selling
general and administrative expenses, $0.2 million of costs of
operations and the fourth quarter items noted above) increased
12.9% to $20.7 million, or 17.7% of revenue, from $18.3 million
or 18.8% of revenue for 1999. Operating loss for 2000 was $6.6
million compared to an income of $11.3 million or 11.6% of
revenue for the comparable period last year. Adjusting for
unusual items noted above, operating income for the years ended
December 31, 2000 and 1999 were approximately $9.6 million (8.2%
of revenue) and $10.2 million (10.5% of revenue) respectively.

The unusual selling, general and administrative expenses of $2.1
million primarily related to costs associated with restructuring
fees, failed acquisitions, severance costs, an employment
contract renegotiation, legal fees and various associated
accruals. The balance of the changes in operating results for
the year 2000 compared to 1999 were primarily a result of the
1999 acquisitions having a full year impact in 2000 and
additional cost associated with being a public company for a
full year.

As announced on March 15, 2001, the Company is in default of one
of its obligations under its Senior Debt facilities. In
conjunction with the sale of certain of the Company's United
States assets disclosed above, the senior lenders have agreed to
modifications to the Company's Senior Debt facilities to exclude
the effects of the transaction for the purposes of determining
the Company's compliance with its financial covenants. In
addition, the Senior Debt lenders have agreed that they will not
take action under the Senior Debt facilities with respect to
certain defaults by the Company provided that the Company
satisfies certain conditions, including that it continues to
make reasonable progress towards a transaction to reduce or
refinance the Senior Debt facilities by June 15, 2001. The
Company is in discussions with certain parties with respect to
possible transactions which would satisfy these conditions.

As a result of the Company being in default under its Senior
Debt facilities, and not withstanding the forbearance agreement
with the Company's senior lenders, the Company's December 31,
2000 financial statements are required to contain a going
concern note.

Capital Environmental Resource Inc. is a regional integrated
solid waste services company that provides collection, transfer,
disposal and recycling services in secondary markets in Canada.
The Company's web site is http://www.capitalenvironmental.com


COLLABWARE CORP: Ceases Operations & Continues To Look For Buyer
----------------------------------------------------------------
CollabWare Corporation disclosed it has ceased all regular
operations. The company has been unable to obtain the funding it
required to continue regular operations, but will continue to
seek potential buyers for the company and/or its assets on a
very limited basis.

On January 31, 2001, the company was compelled to terminate all
21 of its regular employees and cease all regular sales,
marketing and product development efforts. Since that time,
CollabWare's board of directors has been seeking buyers for the
company and/or its assets, as well as exploring options for
restructuring the company's trade obligations.

CollabWare's data center, which has remained operational, will
soon be shutdown and the company will migrate its customers to
other hosting service providers.


COVENTRY HEALTH: Annual Shareholders' Meeting Is On June 7
----------------------------------------------------------
The Annual Meeting of Shareholders of Coventry Health Care,
Inc., a Delaware corporation, will be held on Thursday, June 7,
2001, at 9:30 a.m., Eastern Daylight Saving Time, at the offices
of Epstein Becker & Green, P.C., Seventh Floor, 1227 25th
Street, N.W., Washington, D.C. 20037-1156, for the following
purposes:

      (1) To elect three Class I Directors to serve until the
          annual meeting of shareholders in 2004;

      (2) To ratify the selection of Arthur Andersen LLP,
          certified public accountants, as the Company's
          independent auditors for the year ending December 31,
          2001; and

      (3) To transact such other business as may properly come
          before the meeting or at any adjournment(s) thereof.

Only shareholders of record of the outstanding shares of the
Company's Common Stock, $ .01 par value per share, at the close
of business on Wednesday, April 11, 2001 are entitled to notice
of and to vote at the 2001 Annual Meeting or at any adjournment
thereof, notwithstanding the transfer of any stock on the books
of the Company after such record date.


DTE BURNS: S&P Lowers Senior Secured Note Rating to BB From BB+
---------------------------------------------------------------
Standard & Poor's lowered its rating on DTE Burns Harbor LLC's
(DTE LLC) $163 million senior-secured notes to double-'B' from
double-'B'-plus and placed the rating on CreditWatch with
negative implications.

The proceeds from the notes were used by DTE LLC to purchase the
No. 1 coke battery from Bethlehem Steel Corp. (single-
'B'/CreditWatch Negative/--). The rating downgrade and
CreditWatch listing follows the downgrade of Bethlehem Steel
Corp.'s rating to 'B' from 'B+' and similar placement on
CreditWatch with negative implications. It comes as a result of
DTE LLC's reliance on sales of coke to Bethlehem Steel for a
portion of its cash flow. Cash flow from other revenue sources,
specifically Section 29 tax credits, is not sufficient to
completely cover debt service.

The ability of the project, however, to sell coke on the spot
market if any of Bethlehem Steel Corp.'s facilities do not
require coke, combined with the acceptance of DTE Energy Co.
(triple-'B'/Stable/'A-2') of any changes in law, or later
disallowances with respect to Section 29 tax credits, provide
support for the rating. The project continues to operate well,
and is producing and selling coke to Bethlehem Steel and
realizing tax credits. The downgrade of Bethlehem Steel Corp.'s
rating comes as a result of substantial, unanticipated erosion
of the company's liquidity in the first quarter of 2001 and
concerns about near-term financial flexibility because of
difficult operating conditions within the steel industry. These
conditions remain weak due to high levels of imports, softening
demand, and soaring energy costs.

The current rating for Bethlehem Steel incorporates expectations
that the company will successfully increase availability under
its bank facility and complete asset sales by year end. Unless
the company resolves its liquidity issues by such means, the
rating could be lowered again in the near-term, resulting in a
similar deterioration in DTE LLC's credit rating. Standard &
Poor's will continue to monitor Bethlehem Steel's financial
flexibility, as well as developments in the steel industry and
their effect on DTE LLC's rating.


EASTERN PULP: Reviewing U.S. Notice Of Claim
--------------------------------------------
Eastern Pulp & Paper Corporation said that it is reviewing the
Notice of Claim filed by the United States government in
connection with the past discharge of dioxin into Maine's
Penobscot River.

U.S. officials recently told Eastern executives that the
government to date has not identified any significant or
immediate risks from the Lincoln, Maine, mill. Eastern
executives also said U.S. officials told them that the
government doesn't know the extent of possible claims--and that
the government was not prepared to make any specific factual
allegations against the company.

Eastern said government lawyers filed the Notice of Claim to
meet a procedural deadline established by the U.S. Bankruptcy
Court for filing claims, after which any potential claim may be
barred. The Notice of Claim is not a lawsuit, but rather a legal
filing to preserve the government's place for a possible claim.
U.S. officials have told Eastern that the government is still
conducting an environmental study of the Penobscot River--and
that it will continue to do so for some time. U.S. officials
have also told Eastern that they have not made any decisions on
what cleanup, if any, may be required.

The Notice of Claim said that the government believes there
could be a very wide range of future costs and damages and set
the range at between $400,000 and $60 million. The wide cost
range underscores the speculative nature of this matter, said
George Marcus, an attorney representing Eastern Pulp & Paper
Corp.

Eastern Pulp & Paper, which employs more than 900 people,
remains fully operational under Chapter 11 creditor protection
at its two manufacturing facilities in Lincoln and Brewer,
Maine. The company said it is now fully compliant or greatly
exceeding compliance with U.S. and State of Maine environmental
regulations governing pulp and paper manufacturing facilities.
Eastern Pulp & Paper has conducted several studies of its
Lincoln, Maine, facility over the past 10 years and is aware of
data gathered by the State of Maine and the U.S. Environmental
Protection Agency at the mill and on the Penobscot River. All of
that data shows there are no health or environmental risks of
significance from the Lincoln facility.

EPA's current data on Penobscot River sediment levels for dioxin
are below 1 part per trillion. This is more than 1,000 times
below the 1 part per billion standard the EPA uses as a cleanup
standard at other sites. Dioxin in sediments are also below
those found in other rivers in the U.S., and lower than those
found in other Maine rivers with kraft pulp mills, where no
claims have been brought.

Two previous independent health studies commissioned by the
Penobscot Indian Nation - including one conducted by the U.S.
Government Centers for Disease Control and Prevention--concluded
there was no link between dioxin and any Penobscot Indian Nation
health problems. The 1999 installation of Eastern's state-of-
the-art bleaching technology, enviro2, assures the complete
elimination of dioxin from the mill's discharge.


FRIEDE GOLDMAN: Moves To Reject Two Petrodrill Contracts
--------------------------------------------------------
Friede Goldman Halter, Inc. (OTCBB: FGHLQ) is filing with the
bankruptcy court a motion to reject the two contracts for the
construction of the two Amethyst offshore drilling rigs for
Petrodrill, a Brazilian company. These highly unprofitable
contracts caused substantial losses to the Company, and led to
the Company's recent Chapter 11 filing.

Unsuccessful negotiations for the terms of completion of these
two unprofitable contracts with the surety, Fireman's Fund
Insurance Company, a wholly owned subsidiary of the German
insurance company Allianz, led to the filing of this rejection
motion.

Friede Goldman Halter is a world leader in the design and
manufacture of equipment for the maritime and offshore energy
industries. Its operating units are Friede Goldman Offshore
(construction, upgrade and repair of drilling units, mobile
production units and offshore construction equipment); Halter
Marine (construction of vessels for commercial and governmental
markets); FGH Engineered Products (design and manufacture of
cranes, winches, mooring systems and other types of marine
equipment); and Friede & Goldman Ltd. (naval architecture and
marine engineering).


FRUIT OF THE LOOM: Creditors Seek Nod To File Records Under Seal
----------------------------------------------------------------
Kasowitz, Benson, Torres and Friedman, special counsel for the
Official Committee of Unsecured Creditors in Fruit of the Loom,
Ltd.'s chapter 11 cases, asked Judge Walsh for permission to
file its time records under seal. David M. Fournier Esq., of
Pepper Hamilton, relies on section 107(b), because Kasowitz
represents the committee in its suit against the prepetition
lenders. He asserts that the second interim allowance of
compensation contains detailed time entries and activity
descriptions. Revealing the time records could disclose
litigation issues and strategies to the committee's adversaries
to the detriment of all unsecured creditors. The sensitive
nature of the services provided and the privileged access to
confidential information makes the time record a document best
kept confidential. It should be available only to the Court and
the U.S. Trustee.

Kasowitz asserted that such relief will not prejudice any party
in interest as the allowance of fees remains subject to Court
approval.

On April 13, 2001, a certificate of no objection was filed by
Aaron A. Garber Esq., counsel for the committee. (Fruit of the
Loom Bankruptcy News, Issue No. 27; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


INTEGRATED PACKAGING: Shareholders' Meeting Set For May 29
----------------------------------------------------------
The Annual Meeting of Stockholders of Integrated Packaging
Assembly Corporation, a Delaware corporation, will be held on
Tuesday, May 29, 2001, at 10:00 a.m., local time, at the
Company's offices at 2221 Old Oakland Road, San Jose,
California, for the following purposes:

      (1) To elect five (5) directors to serve for the ensuing
          year and until their successors are duly elected and
          qualified.

      (2) To approve a change in the Company's name from
          "Integrated Packaging Assembly Corporation" to " OSE
          USA, Inc.".

      (3) To increase the number of authorized shares of common
          stock of the Company to 300,000,000, and to increase
          the number of authorized shares of preferred stock of
          the Company to 20,000,000.

      (4) To increase the number of shares in the Company's
          employee stock purchase plan by 3,000,000 to an
          aggregate of 5,000,000.

      (5) To ratify the appointment of Grant Thornton LLP as
          independent auditors for the Company for the 2001
          fiscal year.

      (6) To transact such other business as may properly come
          before the meeting or any adjournment thereof.

Only stockholders of record at the close of business on April 3,
2001 are entitled to notice of and to vote at the meeting.


KEY PLASTICS: Carlyle Management Group Completes Acquisition
------------------------------------------------------------
On April 26, 2001, Carlyle Management Group (CMG), the Dallas
based turnaround and management group, finalized and closed its
acquisition of Key Plastics from Chapter 11 bankruptcy
protection via a plan of reorganization.  Key Plastics,
headquartered in Novi, Michigan, is a leading global supplier of
highly engineered plastic components and assemblies to the
automotive and light truck Tier I suppliers and original
equipment manufacturers in North America and Europe.  The
company has 32 facilities located in nine countries and
generated revenues of over $550 million for calendar year ending
December 31, 2000.

With this acquisition, CMG now manages $1.4 billion in revenues
across several industrial sectors: defense, aerospace and
automotive.  Within this portfolio, CMG manages over 12,500
individuals in 9 countries and 17 states. This group of
companies generates over $175 million in operating cash flow
with a large portion of that cash flow used to retire
acquisition debt and fund ongoing operations.  The installation
of financial and operational discipline has been instrumental in
significantly improving the operating performance and
shareholder value creation of these companies.  CMG is part of
The Carlyle Group, a Washington, DC based private equity firm
with over $12 billion of equity capital under management.

With the closing of the transaction, B. Edward Ewing, Chief
Executive Officer of CMG, will assume the role of President and
CEO of Key Plastics. Commenting on the transaction Mr. Ewing
said, "I would like to thank the customers, employees, and
suppliers for standing by this company during this long and
difficult process.  With the bankruptcy now behind the company,
the focus of Key's management team will be to have the
customers, employees, and shareholders say that it is a great
management team."


LERNOUT & HAUSPIE: Wants To Assume ISI Stock Purchase Agreement
---------------------------------------------------------------
Lernout & Hauspie Speech Products, N.V., asked that Judge Wizmur
permit it to assume a Stock Purchase Agreement with Interactive
Systems, Inc. Through the assumption of this agreement, the
Debtor seeks to ensure the continued association of the ISI
Founders with ISI, a wholly owned subsidiary of the Debtor, and
a focal point of research and development within L&H and the
other Debtors. The ISI Founders are responsible for developing
advanced speech recognition technologies which insure to the
benefit of all members of the debtor group, not just L&H. The
technology developed by ISI not only exceeds industry standards,
but offers the added benefit of being compatible with various
product offerings through the Debtors.

ISI was founded by several professors associated with Carnegie
Mellon University in Pittsburgh, Pennsylvania. The company
specializes in the design and development of speech recognition
engines or "conversation systems", which use speech and language
technology to allow users to access information and accomplish
various tasks through speech and natural language interfaces.
The Debtor asserts that ISI developed these speech recognition
systems entirely as a result of its own research and development
effort.

L&H told Judge Wizmur that it is possible, however, that the ISI
Founders may discontinue their relationship with L&H if the
Stock Agreement is not assumed and L&H does not honor its
obligation under that agreement to make the First Earnout
Payment to the ISI Founders. Because the Stock Agreement
contains sensitive and confidential information regarding the
development of certain speech recognition technology which, if
disclosed to the public, might be misappropriated by the
Debtor's competitors, the Stock Purchase Agreement itself was
submitted to the Court under seal.

In March 2000 L&H acquired ISI under the Stock Agreement. The
parties to the Agreement are L&H, ISI, and the former
shareholders of ISI -- the ISI Founders. The terms of the
agreement include, among other nondisclosed terms:

      (a) Total Purchase Price: $12,900,000.

      (b) Payment Terms:

           (i) $200,000 paid by L&H to ISI in February 2000;

          (ii) $8,700,000 paid by L&H proportionately to each ISI
               Founder at closing;

         (iii) $2,000,000, being the First Earnout Payment, paid
               by L&H proportionately to each ISI Founder upon
               the first anniversary of the Stock Agreement upon
               the achievement of a specifically defined
               milestone; and

          (iv) $2,000,000, being the Second Earnout Payment, paid
               by L&H proportionately to each ISI Founder upon
               the second anniversary of the Stock Agreement in
               2002, upon the achievement of a specifically
               defined milestone.

      (c) The Milestones: The First and Second Milestones are
specifically defined in the Stock Agreement and relate to the
development of foreign language speech recognition technology.
The objective criteria which the speech recognition technology
must satisfy are articulated fully in the Agreement.

The ISI Founders have performed one of their obligations under
the Stock Agreement by developing certain foreign language
speech recognition technology, and the Debtor told Judge Wizmur
that it must satisfy one of its corresponding obligations and
provide the First Earnout Payment.

The Debtor argued that assumption of this agreement, which it
describes as an "executory" agreement as defined by the
Bankruptcy Code, represents a reasonable exercise of business
judgment. The Debtor assured Judge Wizmur that assumption of the
Stock Agreement and payment of the Earnout Payment are critical
to its reorganization efforts. Without the First Earnout
Payment, the ISI Founders may terminate their association with
ISI, which would strip the Debtor and the related debtors of
some of their most talented and critical members of the research
and development team.

Additionally, ISI and the ISI Founders have developed a speech
recognition system named "X Calibur" which the Debtor said
constitutes one of the most configurable systems of its kind
available. Indeed, the Debtor believes that X Calibur is more
advanced and provides more compatible applications than similar
products developed by the Debtor's competitors and is currently
being used in several product offerings throughout the debtor
group. The current speech recognition systems used by the
Debtors do not possess the same interchangeable characteristics
as X Calibur, which can be used to replace many of the existing,
incompatible speech recognition engines. The X Calibur system
insures to the benefit of all members of the Debtors, given its
universal application, including to the areas of automotive
information systems, medical transcription, desktop dictation,
audio data labeling and indexing (audiomining) and general
dialog systems. Widespread application of X Calibur reduces
research and development costs throughout the Debtors, while
providing a competitive advantage to various product offerings.
ISI, and the ISI Founders, are also developing products in the
emerging area of "Voice XML", an evolving industry standard for
the design of speech dialog systems for telephone voice portals.
As such, the Debtors say that ISI, and more specifically, the
ISI Founders, are a critical component of the Debtors'
reorganization efforts because ISI is becoming an innovation
center. Accordingly, assumption of the Stock Agreement and
payment of the First Earnout Payment to ensure the ISI Founders'
continued association with ISI constitutes a sound exercise of
business judgment. (L&H/Dictaphone Bankruptcy News, Issue No. 7;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


LOCALBUSINESS.COM: Files Chapter 11 Petition in Florida
-------------------------------------------------------
LocalBusiness.com, a business news site that employed more than
75 full-time journalists in some 28 U.S. cities, shut down
operations last week and filed for chapter 11 bankruptcy
protection in the U.S. Bankruptcy Court in Ft. Lauderdale, Fla.,
according to The Wall Street Journal. Most of the web
publisher's revenues were generated by advertising, and the news
web site had been wrestling with a weak advertising environment.
Charles Lunan, Localbusiness.com's managing editor, said he does
not know whether the company will be sold or if it will file for
bankruptcy. The company received $16 million in investment
capital from U.S. Equity Partners LP; Rustic Canyon Ventures;
and Tribune Ventures, an arm of the Tribune Co., last year. (ABI
World, May 4, 2001)


LOCALBUSINESS.COM: Chapter 11 Case Summary
------------------------------------------
Debtor: LocalBusiness.com, Inc.
         dba dbusiness.com, Inc.
         dba American Digital Media Services Inc.
         6440 NW 5 Way
         Ft. Lauderdale, FL 33309

Chapter 11 Petition Date: May 2, 2001

Court: Southern District of Florida (Broward)

Bankruptcy Case No.: 01-23262

Judge: Raymond B. Ray

Debtor's Counsel: Lawrence A Gordich, Esq
                   701 Brickell Ave #1900
                   Miami, FL 33131
                   305-789-2700


MARINER: Court Okays Transfer Agreement re Grancare HCC-Phoenix
---------------------------------------------------------------
Mariner Post-Acute Network, Inc.'s wholly-owned subsidiary
HOSTMASTER's, Inc. and the other MPAN Debtors sought and
obtained the Court's approval of:

      (1) the Lease Termination Agreement, including the
Operations Transfer Agreement by and between Imprimis Partners
Limited Partnership (the Landlord), and HOSTMASTER's as former
tenant, with respect to the Grancare HHC-Phoenix nursing home
facility located at 16640 North 38th Street, Phoenix, Arizona;

      (2) the rejection of certain executory contracts related to
the Facility;

      (3) the assumption and assignment to the Landlord of the
Medicare Provider Agreement between HOSTMASTER's and the Health
Care Financing Administration (HCFA) relating to the Facility;
and

The lease was rejected on or about January 15, 2001.
HOSTMASTER'S represented that to provide for an orderly
transition of operations at the facility, which will minimize
Landlord's damages and the costs of exiting the facility, while
at the same time minimizing or avoiding any disruption in
patient care, the parties have agreed to the Lease Termination
Agreement, subject to the Court's approval.

(A) The Lease Termination Agreement provides for:

     (1) The payment by HOSTMASTER'S of all administrative claims
owed to third parties and incurred in connection with the
operation of the Facility from the Petitiou Date to the date the
Landlord or its designee takes over operation of the Facility
(the Transition Date);

     (2) The payment to the Landlord of an amount equal to the
total liabilities assumed by the Landlord for outstanding claims
due to employees of the Facility for accrued vacation and sick
pay;

     (3) Payment of all rent and real property taxes due under
the Lease from the Petition Date through March 31, 2001;
provided, however, that such payments will thereafter cease if
operations of the Facility have not been transitioned to the
Landlord or its designee on or before April 5, 2001 through no
fault of HOSTMASTER'S; and

     (4) Payment of $45,000 in full and complete satisfaction of
any and all claims, including, without limitation,
administrative, priority, and prepetition claims, that the
Landlord may have against HOSTMASTER'S relating to the Lease,
its rejection by HOSTMASTER'S, or HOSTMASTER'S use or occupancy
of the Facility, including all maintenance claims, whether or
not entitled to administrative priority.

(B) The Operations Transfer Agreement generally governs the
     transition of operations at the Facility, including:

     (1) The transfer of supplies on hand at the Facility and the
facility transportation van, free and clear of liens and
encumbrances, all of which are believed to have nominal value.

     (2) The orderly transfer of Patient Trust Fund accounts;

     (3) The coordination of final cost reports;

     (4) The employment of all or virtually all of HOSTMASTER'S
employees at the Facility as of the Transition Date, thereby
avoiding any WARN Act and severance claims which might otherwise
be asserted if the Facility were to cease operations;

     (5) The assumption by the landlord of claims of employees
for accrued vacation and sick pay as a result of the payment of
such amounts to the Landlord by HOSTMASTER'S;

     (6) The assumption by Landlord of certain group health care
obligations;

     (7) The reconciliation of future amounts received from the
collection of accounts receivable;

     (8) Prorations as of the Transition Date;

     (9) The transfer of patient records and financial data; and

    (10) The assumption or rejection of certain executory
contracts.

(C) Assumption And Assignment Of The Medicare Provider Agreement

     HOSTMASTER'S will assume and assign to the Landlord the
Medicare Provider Agreement between HOSTMASTER'S and HCFA
relating to the facility on terms substantially identical to
terms which have been previously approved by HCFA and the Court
with respect to dispositions of similar facilities. HOSTMASTER'S
will seek HCFA's approval of such terms.

Notwithstanding the assumption and assignment of the Medicare
Provider Agreement, any claim of Medicare, the applicable fiscal
intermediary, the Department of Human Services (HHS), or any
other party against the Debtors under the Medicare Provider
Agreement arising prior to the petition date will continue to be
treated as a prepetition claim and will not be offset against
any of the Debtors' claims arising after the Petition Date.

Instead, HCFA will be allowed to offset all such claims (to the
extent valid, and without prejudice to the Debtor's right to
dispute such claim) against any prepetition underpayment claim
of the Debtors against Medicare, even if the claim and debt are
not "mutual," as ordinarily required by 11 U.S.C. Section 553
and without further order of the Court, provided that to the
extent HCFA's claim is not satisfied in full via exercise of the
offset right, the United States will have an administrative
expense claim pursuant to 11 U.S.C, which will be capped at an
amount presently under discussion with HCFA, but which the
Debtors believe will not exceed $50,000 with respect to the
facility. The rights accorded the United States under the
Approval Order will constitute "cure" under 11 U.S.C. Section
365 so that the Landlord will not have successor liability for
any claim against any Debtors under the Medicare Provider
Agreement arising prior to the effective date of the assignment
of such Medicare Provider Agreement to the Landlord.

However, the Landlord (or its designee) will succeed to the
quality of care history of HOSTMASTER'S as to the Facility,
except that the assignee will not be liable to pay any civil
monetary penalty accruing prior to the Transition Date.

(D) Rejection of the Service Contracts

     Because HOSTMASTER'S intends to cease doing business at the
Facility, the service contracts related to the Facility will be
unnecessary and burdensome to HOSTMASTER'S estate upon the
Transition Date. Accordingly, HOSTMASTER'S and the Landlord have
agreed that HOSTMASTER'S is not and will not be obligated to
assume or assign to the Landlord the Service Contract, except as
designated by Landlord and presented to the Court on the exhibit
to the motion, and that the Service Contracts not so designated
by the Landlord will instead be deemed rejected effective as of
the Transition Date. (Mariner Bankruptcy News, Issue No. 14;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


MAXICARE HEALTH: Closing Indiana Unit to Stem Continuing Losses
---------------------------------------------------------------
Maxicare Health Plans Inc. (Nasdaq:MAXI) announced that due to
continuing losses in the managed care business of Maxicare
Indiana Inc., its Indiana subsidiary, the subsidiary has
determined to close its business operations in the state of
Indiana.

The Indiana Department of Insurance filed for rehabilitation of
Maxicare Indiana on May 4, 2001. Maxicare Indiana has conferred
and is working with the Commissioner of the Indiana Department
of Insurance in the interest of members receiving the
continuation of their medical benefits.

The company emphasized that Maxicare, its California managed
care subsidiary, which is totally separate from Maxicare
Indiana, is financially sound and operated profitably in the
first quarter of 2001. The company also stated that Maxicare is
in full compliance with California's tangible net equity
requirements.

The company further stated that, excluding the operations of
Maxicare Indiana, it expects to report earnings of approximately
$1 million for the first quarter of 2001 when results are
announced this week.

Due to a difficult health care provider and pricing environment
in the Indiana market, the company has concluded, after
investigating all reasonable alternatives, to cease operations
of Maxicare Indiana, said Maxicare's chairman and chief
executive officer, Paul Dupee. "We are working with the
Commissioner of the Indiana Department of Insurance so that our
members receive continuity of care to the greatest extent
possible during this difficult transition.

At the same time, we are encouraged by the recent improvements
in the operating performance of Maxicare, our California HMO.
And we plan to take steps to make sure that Maxicare continues
to operate as a viable, sustainable business in the California
markets.

                         About Maxicare

Maxicare Health Plans Inc., with headquarters in Los Angeles, is
a managed health care company with operations in California. In
August 2000, Maxicare received the status of Accredited from the
National Committee for Quality Assurance (NCQA) for its
California HMO product and California Medicare HMO Plan. NCQA is
an independent, nonprofit organization dedicated to measuring
the quality of managed care organizations nationally.
Maxicare has been serving the health care needs of families
through managed health care plans since 1973. Maxicare offers a
variety of health programs including various employee benefit
packages through its subsidiaries, Maxicare Life and Health
Insurance Co. and HealthAmerica Corp.


MISSISSIPPI CHEMICAL: Fitch Cuts Senior Debt Ratings To Low-B's
---------------------------------------------------------------
Fitch has downgraded Mississippi Chemical's senior secured debt
rating to 'BB-' from 'BB' and downgraded the company's senior
unsecured debt rating to 'B+' from 'BB-'. The senior secured
debt rating of 'BB-' applies to the company's $200 million
senior secured bank facility due 2002 and the senior unsecured
debt rating of 'B+' applies to the company's $200 million of
outstanding senior unsecured notes due 2017. Both debt ratings
are on Rating Watch Negative.

The one notch differential between the senior secured credit
facility and the unsecured notes is based on the limited nature
of assets pledged under the company's credit facility. The
credit facility has been secured as permitted under the senior
note indenture.

Mississippi Chemical continues to experience poor operating
margins primarily due to high natural gas costs that have
largely offset improvements in product prices. A wet spring
planting season has resulted in weak sales volumes during the
third fiscal quarter. For the quarter ending March 31, 2001,
Mississippi Chemical generated net sales of $147.5 million with
an EBITDA of $18.1 million.

The company's total debt as of March 31, 2001, was approximately
$360 million, up from $330 million at June 30, 2000. The company
had $44 million available under the secured credit facility down
from $74 million at fiscal year-end 2000 (ended June 30).
Inventory builds have resulted in higher debt levels than would
have been expected if sales volumes had been closer to typical
results.

Credit protection measures, particularly EBITDA coverage, have
improved recently, however, much of this improvement was the
result of the realization of gains from selling natural gas
hedges. Approximately $3 million in gains from natural gas
hedges sold remain on the balance sheet to provide additional
EBITDA in future quarters. The credit facility contains
covenants related to EBITDA coverage.

As a result of high domestic natural gas costs, flat
agricultural demand and rising fertilizer imports, the U.S.
fertilizer market is likely to continue to experience trough
cash margin levels. Shorter term, a decline in operating rates
could provide some support for higher pricing levels, however
high natural gas costs are likely to offset pricing strength.
With few signs of a substantial near term improvement in the
cyclical fertilizer business given the ramp-up of new offshore
capacity and sustained high natural gas costs, Fitch maintains a
Negative Rating Watch on the debt ratings.


NCS HEALTHCARE: Reports Fiscal 2001 Q3 Financial Results
--------------------------------------------------------
NCS HealthCare, Inc. (Pink Sheets: NCSS) announced financial
results for its fiscal third quarter ended March 31, 2001.

For the three months ended March 31, 2001, revenues decreased
9.1% to $154,890,000 from $170,462,000 in the third quarter of
the previous fiscal year.  Net loss for the quarter, excluding
bad debt expense for non-core businesses which had been either
sold or shut down (exited businesses), fixed asset impairment
and restructuring charges, was $7,624,000 or $0.32 per diluted
share as compared to net loss, excluding restructuring, other
related charges, and a non-cash charge related to a valuation
allowance recorded against the Company's net deferred tax
assets, of $3,555,000 or $0.16 per diluted share for the third
fiscal quarter of the previous year.

For the nine months ended March 31, 2001, revenues decreased
11.7% to $471,373,000 from $533,976,000 recorded in the
comparable period of the previous fiscal year.  Net loss,
excluding bad debt expense for exited businesses, fixed asset
impairment and restructuring charges, was $21,940,000 or $0.93
per diluted share as compared to net loss, excluding
nonrecurring, other special charges, and a non-cash charge
related to the deferred tax asset valuation allowance, of
$2,810,000 or $0.13 per diluted share, in the comparable prior-
year period.

During the last several quarters, NCS has continued to execute
its strategic restructuring plan, which has included the
shutdown, restructuring or sale of certain non-core ancillary
lines of business.  Of the $15.6 million and $62.6 million
revenue decline for the three and nine month periods ended
March 31, 2001, the sale or shutdown of these businesses
accounted for approximately $7.7 million and $34.9 million,
respectively, as compared to the previous fiscal year.  The
remainder of the decline in revenues for the current quarter and
year to date periods was partially due to the termination by the
Company of marginal contracts and those with unacceptable credit
risk.

Results for the three and nine month periods ended March 31,
2001 include incremental default interest expense of $1.0
million and $3.1 million, incremental professional fees related
to restructuring activities of $1.5 million and $4.2 million,
and higher bad debt expense on continuing businesses of $3.3
million and $9.0 million for the three and nine month periods,
respectively.  These additional costs were partially offset by
operating improvements in selling, general and administrative
expenses.

Kevin B. Shaw, President and Chief Executive Officer of NCS
commented, "We have made significant progress in the
restructuring of our operations.  By closing marginal sites,
eliminating certain business lines and terminating uneconomic
customers we have re-established a strong foundation on which to
build.  Looking forward, we believe that the essential mandate
for NCS HealthCare is to address our customers' most pressing
need -- providing uncompromised care to patients in the most
cost efficient manner.  In the post-PPS environment nursing
homes need to save money on their pharmacy bills. To do so,
nursing homes need more timely information and greater clarity
as to the actions they can take to reduce costs while
maintaining or improving clinical outcomes.  We have developed
tools, such as eAstral, and we look forward to distributing them
widely in the coming quarters."

During the fiscal 2001 third quarter, the Company recorded
$10,043,000 of additional bad debt expense to fully reserve for
remaining accounts receivable of non-core and non-strategic
businesses exited during the past twelve months. These
businesses were ancillary to the core pharmacy operations and as
part of the restructuring activities were either sold, if there
was an available buyer, or shut down.

During the fiscal 2001 third quarter, the Company recorded
restructuring and other related charges of approximately $1.0
million before taxes associated with the continuing
implementation and execution of strategic restructuring and
consolidation activities.  Also during the quarter, in
accordance with Statement of Financial Accounting Standards No.
121, "Accounting for the Impairment of Long Lived Assets and for
Long Lived Assets to be Disposed Of" (SFAS No. 121), the Company
recorded a fixed asset impairment charge of $2.1 million before
taxes.  This charge relates primarily to changes in asset values
resulting from the impact of restructuring activities and
changes in operational processes under restructured operations.

NCS' core pharmacy business represented 85.5% of revenues for
the quarter just ended as compared to 84.8% in the previous
quarter.  Intravenous solutions revenues were 3.8% of the total
as compared to 3.3% in the previous quarter.  Other revenues
declined to 10.7% of the total versus 11.9% in the previous
quarter.

Gross margin for the three months ended March 31, 2001 was 17.9%
as compared to 18.2% for the previous quarter ended December 31,
2000.  The decline in gross margin was due primarily to a
continued shift toward lower margin payer sources such as
Medicaid and insurance.  Medicaid and insurance revenues
accounted for approximately 58.5% of revenues in the fiscal 2001
third quarter versus 57.0% in the previous quarter and 51.7% in
the prior fiscal year third quarter.  In addition, the decrease
in gross margins in the current quarter reflected the full
quarter impact of the implementation of the Health Care
Financing Administration Federal Upper Limits (FUL's).  The
FUL's were implemented in December 2000 and reflected lower
reimbursement from State Medicaid programs.

Selling, general and administrative expenses, excluding bad debt
expense for exited businesses, fixed asset impairment and
restructuring charges, were $27.3 million for the third fiscal
quarter, compared to $27.4 million during the previous quarter.
Depreciation and amortization for the three months ended March
31, 2001 was $5.9 million as compared to $6.3 million during the
previous quarter.  Net interest expense was $7.9 million for the
most recent quarter as compared to $8.4 million for the quarter
ended December 31, 2000 due primarily to lower interest rates.

NCS' cash position at March 31, 2001 was $42.2 million as
compared to $36.0 million at December 31, 2000 due primarily to
a reduction in accounts receivable during the most recent
quarter.  Kevin B. Shaw, President and Chief Executive Officer
commented, "As we reported above, NCS has succeeded in a key
objective: conserving and growing our cash position, despite the
difficult nursing home operating environment.  We believe that
credit discipline is an essential requirement for success and we
have strengthened our credit processes and our collection rates.
In this area, we are committed to improving our credit quality,
while being creative in finding win-win solutions to assist our
customers.  At the end of the day, we must help improve their
performance as well as our own."

As previously reported, net losses incurred during fiscal 2000
resulted in certain covenant defaults under the Company's bank
credit facility.  The Company has engaged Brown, Gibbons, Lang &
Company L.P. (BGL&C) to act as NCS' sole financial advisor in
its continuing discussions with the bank group with respect to
these defaults.  During the quarter, the Company elected to not
make a $2,875,000 interest payment due February 15, 2001 on its
5 3/4% Convertible Subordinated Debentures due 2004.  As a
result of the non-payment of interest, the Company received a
formal Notice of Default and Acceleration and Demand for Payment
from the indenture Trustee.  BGL&C is also serving as NCS' sole
financial advisor in its continuing discussions with an ad hoc
committee of holders of the Company's 5 3/4% Convertible
Subordinated Debentures due 2004 with respect to the defaults
and a possible restructuring of the indebtedness.  NCS can give
no assurance with respect to the outcome of these discussions or
negotiations.

NCS HealthCare, Inc. is a leading provider of pharmaceutical and
related services to long-term care facilities, including skilled
nursing centers, assisted living facilities and hospitals.  NCS
serves approximately 210,000 residents of long-term care
facilities in 33 states.


NEXTAR FINANCE: Moody's Rates Senior Discount Notes at Caa1
-----------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to Nexstar
Finance Holdings' 16% senior discount notes. The rating agency
also confirmed the following:

      * the B3 rating on the $150 million of 12% senior
        subordinated notes due 2008 of Nexstar Finance L.L.C.

      * the Ba3 ratings of the combined $275 million of senior
        secured credit facilities of Nexstar and the Bastet Group
        (Bastet Broadcasting and Mission Broadcasting.

      * The senior implied B1 rating and

      * the B2 senior unsecured issuer rating.

The outlook is stable.

Moody's said the ratings continue to reflect the limited
operating history of Nexstar Broadcasting, the likelihood of
additional leveraged acquisitions, the integration risk
associated with its potential acquisitions, and the impending
capital expenditures for digital readiness. Accordingly, Nexstar
is highly leveraged and as a result has limited financial
flexibility.

However, Moody's said that Nexstar's ratings benefit from the
company's history of rapidly improving the cash flow and margin
performance of its acquired stations and its diversification by
number of stations, network affiliations, and region.

The stable outlook incorporates the expectation that cash flow
should benefit from operating efficiencies despite the weaker
advertising environment, according to Moody's. The rating agency
is comfortable that Nexstar is likely to meet its budget for
2001.

Nexstar Broadcasting owns or operates 17 stations in 13 markets.
It is headquartered in Clarks Summit, Pennsylvania.


PILLOWTEX: Moves To Pay-off Certain Revenue Bond Financings
-----------------------------------------------------------
Gold Kist, Inc., predecessor-in-interest to Opelika Industries,
Inc. of the Pillowtex Corporation Debtors, entered into a
revenue bond financing with Macon-Bibb County Industrial
Authority. The financing documents for the bond facility
indicates that Macon-Bibb, (a) authorized the issuance of
$2,600,000 in aggregate principal amount of its revenue bonds
and (b) loaned Gold Kist the bonds' proceeds to finance Gold
Kist's acquisition and renovation of warehouse and distribution
facilities in Bibb County, Georgia.

A loan agreement between Macon-Bibb and Gold Kist, which Gold
Kist subsequently assigned to the Debtor, requires the Debtor to
make loan repayments at the times and in the amounts sufficient
to pay the principal of, and premium if any, and interest on,
the bonds. As required by the bond facility and, as a security
for loan repayment, Gold Kist granted a mortgage on the
warehouse and distribution facility acquired and renovated with
the proceeds of the bonds in favor of Macon-Bibb. Macon-Bibb
subsequently assigned its mortgage interest to the bondholders'
trustee, as security for the payment of the bonds. As additional
security for the bonds' payments, Gold Kist executed a guaranty
agreement with the trustee and unconditionally guaranteed
payment of the bonds' principal, and premium if any. At the time
the Debtor assumed Gold Kist's obligations, agreements and
liabilities under the loan agreement, the Debtor also assumed
Gold Kist's obligations, agreements and liabilities under the
mortgage and guaranty, and Leshner Corp., the Debtor's parent
company, executed a guaranty agreement in favor of the trustee.

William H. Sudell, Jr., Eric D. Schwartz, and Michael G.
Busenkell, at Morris, Nichols, Arsht & Tunnell, in Delaware,
explained to Judge Robinson that a final principal installment
on the bonds in the amount of $173,333.38 is due and payable on
March 1, 2001, together with all accrued and unpaid interest on
the bonds, which interests accrues at the annual rate of about
5.75%. By motion, the Debtor seeks Court authority to make final
payment on the bond facility, including all accrued interest and
any reasonable fees and costs due.

Pillowtex Corp. claimed that, in the exercise of business
judgment, the Debtor has determined that making the final
principal and interest payment on the bond facility, is in the
best interests of its estates and creditors. The value of the
collateral securing the bonds greatly exceeds the amount owed
under the bond facility. Until the bond facility is paid off,
the trustee and Macon-Bibb will be entitled to all interest and
reasonable fees and costs to the extent provided for under the
loan agreement.

The Debtors maintained that they have more than sufficient
operating funds to make the final principal payment, and by
making payment rather than waiting for confirmation of a
reorganization plan, will:

      (a) Avoid the continuing accrual of interest and potential
fees and costs;

      (b) Eliminate the administrative burden of dealing with the
debt under the bond facility in any reorganization plan; and

      (c) Avoid any dispute regarding the trustee's and Macon-
Bibb's entitlement to fees and costs incurred during the
bankruptcy proceedings. (Pillowtex Bankruptcy News, Issue No. 6;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


RAYTHEON COMPANY: Discloses Pricing of Public Share Offerings
-------------------------------------------------------------
Raytheon Company (NYSE: RTNA, RTNB) announced the public
offerings of 12.5 million shares of Class B common stock at
$27.50 per share and 15 million, 8.25 percent equity security
units at $50 per unit. The company has also granted the
underwriters an option to purchase up to an additional 1.875
million shares to cover over- allotments of Class B common
stock, if any and an option to purchase up to an additional 2.25
million equity security units to cover over-allotments of equity
securities units, if any.

Each equity security unit will initially consist of a contract
to purchase shares of common stock of Raytheon Company and $50
in principal amount of a trust preferred security of RC Trust I,
a Delaware Business Trust formed by Raytheon with a stated
liquidation amount of $50. The offerings were priced yesterday
and are expected to close on May 9, 2001. The net proceeds of
the offering will be used to reduce debt and for general
corporate purposes.

With headquarters in Lexington, Mass., Raytheon Company is a
global technology leader in defense, government and commercial
electronics, and business and special mission aircraft.


RAYTHEON CO.: SEC Subpoenas Documents
-------------------------------------
Raytheon Co. said that the Securities and Exchange Commission
subpoenaed documents related to the engineering and construction
unit that it sold to Washington Group International last year,
according to The Wall Street Journal. The subpoena came after
months of fighting between the two companies over a final
purchase price. The Boise, Idaho-based Washington Group, which
has said the controversy may force it into bankruptcy, maintains
the defense contractor withheld financial information.

In March, Washington Group filed an amended complaint against
Raytheon claiming that the defense contractor grossly overstated
the assets and understated the liabilities of the unit. Raytheon
has denied the allegations. Washington Group paid $50 million
for the division last year and assumed $450 million in
liabilities. Washington Group maintains the liabilities were as
high as $700 million. (ABI World, May 4, 2001)


SAFETY-KLEEN: EQ Entities Ask For Stay Relief To Effect Setoff
--------------------------------------------------------------
The EQ Entities consisting of (i) The Environmental Quality Co.,
(ii) EQ Industrial Services, Inc., (iii) Michigan Recovery
Systems, Inc., and (iv) Wayne Disposal, Inc., seek relief from
stay to effect setoff. Gail A.  Eynon, at Honigman Miller
Schwartz and Cohn LLP, told Judge Walsh that the EQ Entities
have purchased goods and services from the Debtor Safety-Kleen
Corp., pursuant to the General Terms and Condition of the EQ
Entities' purchase orders and the common and statutory laws of
the State of Michigan. The Debtor also purchased goods and
services from the EQ Entities.

Ms. Eynon contended that as of Petition Date, the Debtor and its
Canadian affiliate owe the EQ Entities EQ $160,365.65 on open
account for goods and services. Meanwhile, as of Petition Date,
the EQ Entities owe the Debtor and its Canadian affiliate
$324,281.91 on open account for goods and services provided to
them. However, since Petition Date, the EQ Entities have paid
$173,700.50 to the Debtors. She claimed that applicable state
law and the terms of the purchaser order grant the EQ Entities
the right to setoff the remaining $150,581.41 they owed the
Debtor on open account from the $160,365.65 the Debtor owed EQ
on open account.

In pleading for the EQ Entities, Ms. Eynon asserted that
bankruptcy law does not impair the right of a creditor to offset
a mutual debt owing by such creditor to the Debtor that arose
before the commencement of the bankruptcy proceedings against a
claim of such creditor against the Debtor that arose before the
commencement of the bankruptcy case. She assured the Court that
the EQ Entities do not seek relief from automatic stay to setoff
or recoup any amount that has accrued on or after the Petition
Date.

                     The Debtors respond

Gregg M. Galardi, at Skadden, Arps, Slate, Meagher & Flom LLP,
in Delaware, said that the Debtors never consented to this
Motion or the proposed setoff, and pointed out to the Court
that, in the motion, the EQ Entities allege prepetition business
dealings with the Debtors and one of the Debtors' Canadian
affiliates. He averred that the EQ Entities seek to effectuate a
single setoff between and among (a) one or more of the Debtors
and a Canadian affiliate of the Debtors, a non-Debtor entity, on
the one hand, and (b) EQ Entities, consisting of four separate
and distinct legal entities, on the other. With further
elaboration, Mr. Galardi indicated several reasons why the EQ
Entities' request is flawed.

                       Lack of mutuality

The EQ Entities appear to treat all 74 Debtors, together with a
non-Debtor Canadian affiliate, as a single "obligor" for setoff
purposes. Consolidation of multiple Debtors' obligations, let
alone a non-Debtor affiliate's obligations, into a single
obligation in order to effectuate a setoff is not permitted
because the Debtors' bankruptcy cases are consolidated only for
procedural purposes. In like manner, the EQ Entities, four
separate legal entities, inexplicably seek to treat themselves
as a single "obligor" for purposes of the setoff they seek to
effectuate.

                 No right to setoff by State law

The law of the State of Michigan does not provide the EQ
entities with a right to setoff. The law merely states that for
purposes of Michigan law, the term 'counterclaim' includes
rights of setoff and recoupment. This provision is definitional
in nature and confers no setoff right. The EQ Entities have
failed to establish their right to setoff, if any, under
applicable non-bankruptcy law.

                  Prohibition by Credit Agreement

The credit agreement governing the Debtors' postpetition
financing facility specifically prohibits the Debtors from
satisfying any prepetition claims, which, of course, would
include those asserted by the EQ Entities. The Debtors submitted
that, even if the EQ Entities could establish their entitlement
to setoff, which they have not, absent the consent of the
Debtors' postpetition lenders the setoff would result in a
default by the Debtors under the DIP Agreement.

                  Insufficiency of Information

The Debtors protested that the EQ Entities, in their motion,
have not provided sufficient information, such as copies of
purchase orders, invoices, correspondence, and ledger entries,
for the Debtors to confirm either the nature and amount of the
obligations, if any, between the Debtors and the EQ Entities, or
the exact identity of the obligors on both sides of the
transactions. Mr. Galardi informed Judge Walsh that,
notwithstanding the lack of information, the Debtors have
undertaken to analyze their business relationships with each of
the EQ Entities, and verify the prepetition amounts due and
owing, if any, between each of the EQ Entities and each of the
Debtors. As yet, the Debtors have been unable to complete these
analyses and so the Debtors cannot consent to the relief
requested in the lift stay motion.

Mr. Galardi explained to the Court that, prior to filing their
objection, the Debtors requested an adjournment of the hearing
on the lift stay motion until the next omnibus hearing date to
afford the Debtors time for a comprehensive review of all of
their accounts with the EQ Entities, but the EQ Entities
refused. The Debtors submit that, until such a review can be
completed, it would be premature to lift the automatic stay to
permit the EQ Entities to effectuate a setoff. The Debtors
reserve the right to amend or supplement their objection at any
time prior to a hearing on the lift stay motion, and requested
that the motion be denied in its entirety or, alternatively,
adjourned to the next omnibus hearing date.

                       The EQ Entities respond

The EQ Entities contended that the Debtors' bare denial of
having consented to the filing of a motion for relief from stay
pales, in light of the fact that the Debtor's counsel, Chip
Duff, and a business person, David Sprinkle, participated in a
conference call with the EQ Entities' counsel and Thomas Schuck,
the EQ Entities' business person, in which the subject of the
motion for relief from stay and the facts underlying the motion
were discussed for approximately one hour. The EQ Entities
reiterated that during that call, Mr. Duffy and Mr. Sprinkle
stated that the Debtors would not object to the motion for
relief from stay. The EQ Entities claimed that their counsel's
notes indicate that the Debtor's counsel Joseph Miller also
participated in that call.

               Propriety of Consolidation for Setoff Purposes

Gail A. Eynon, at Honigman Miller Schwartz and Cohn, in Michigan
and Edward J. Kosmowski, at Young Conaway Stargatt & Taylor,
LLP, in Delaware, argued that it is due to the Debtor's own
wrongful misrepresentations that the EQ Entities are entitled to
have the Debtors and the Canadian affiliate treated as a single
entity for purposes of the motion for relief from stay. Having
acted as a single entity, the Debtors cannot now proceed
separately.

                  Sufficient Basis to Right to Setoff

The EQ Entities refuted the Debtor's argument that they have
failed to establish the right to setoff. Ms. Eynon and Mr.
Kosmowski asserted that the following contentions against the
Debtors' objection illustrate the EQ Entities' legal and
equitable rights of setoff and recoupment which, under Michigan
laws, are treated as counterclaims:

      (a) A secured creditor with priority over other creditors
of the estate remains subject to setoff or recoupment as a
counterclaim;

      (b) Michigan law also recognizes that courts of equity have
independent jurisdiction to compel offset as an equitable
remedy;

      (c) Bankruptcy courts sitting in Michigan recognize that
setoff is an equitable right of a creditor to deduct a debt it
owes from a claim it has against the Debtor, arising out of a
separate transaction; and

      (d) Setoff occupies a favored position in our history of
jurisprudence. Courts should interfere with a creditor's rights
of setoff "only under the most compelling circumstances."

            The Credit Agreement's Prohibition of Setoff

The EQ Entities assailed the Debtor's assertion that the
prohibition imposed by the Debtors' postpetition financing
prevent the Debtors from satisfying the EQ Entities' prepetition
claims and effectively suppresses the EQ Entities right to
setoff. The EQ Entities countered that the Debtors have not
offered any authority for the proposition that the Debtor and
its lenders can defeat the EQ Entities' prepetition statutory
and equitable right of setoff and/or recoupment by way of their
loan agreement, whether attached to the DIP Financing Order or
not, any more than they could strip a properly perfected
purchase money security interest of its property rights.

              Alleged Insufficiency of Information

Based upon the telephone conference between the EQ Entities and
the Debtors and the continued business relationship between the
parties, it was the EQ Entities' understanding that the Debtors
had all the factual information necessary to determine the
validity of the EQ Entities' setoff rights and amounts at issue.
Counsel for the EQ Entities complain that, prior to receiving
the Debtors' objection, the Debtors had not made any request for
information from the EQ Entities, which information appears to
be the proper subject of discovery.

The Debtors charged that the EQ Entities refused a request for
adjournment of the hearing on the motion for relief from stay.
The EQ Entities explained that their bankruptcy counsel received
a call from their local counsel to discuss the Debtors' request
for an adjournment and objection to the motion for relief from
stay. The EQ Entities submitted that they were not inclined to
grant the requested adjournment considering (i) the 30-day
notice period provided since filing, (ii) the expense of mailing
its notice to so many creditors, (iii) that it is unlikely that
the court would hear evidence at the preliminary hearing, and
(iv) that it is likely that the parties will need time to
conduct discovery and/or reach a consensual resolution. (Safety-
Kleen Bankruptcy News, Issue No. 15; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


SONG CORPORATION: Shuts Down & Liquidates Assets To Pay Debts
-------------------------------------------------------------
The Song Corporation announced that due to its failure to raise
additional equity financing it has made an assignment under the
Canadian Bankruptcy and Insolvency Act for the benefit of its
creditors. The Corporation's wholly-owned subsidiaries, Song
Entertainment Distribution Inc., Song Publishing Inc., Song
Recordings Inc. and Attic Music Limited, also made assignments
for the benefit of their creditors.

All directors of The Song Corporation and the four above-named
subsidiaries have resigned.

The Song Corporation has advised the Canadian Venture Exchange
(CDNX) of these developments.

It is anticipated that Mintz & Partners Limited, in its capacity
as Trustee in Bankruptcy of The Song Corporation and its
subsidiaries, will liquidate the assets of The Song Corporation
and its subsidiaries, and that the respective proceeds of
liquidation will be applied toward the payment of the
corporations' respective creditors. The Song Corporation does
not anticipate that the proceeds of liquidation will be
sufficient to pay all of its debts, and therefore it is unlikely
that there will be any funds or distributions available for
shareholders.


SPECTRANETICS: Stockholders To Convene In Colorado On June 12
-------------------------------------------------------------
The Annual Meeting of the Shareholders of The Spectranetics
Corporation will be held at the Sheraton Colorado Springs Hotel,
2886 South Circle Drive, Colorado Springs, Colorado on June 12,
2001, at 9:00 a.m. (MDT) for the following purposes:

      (1) To elect three members of the Board of Directors to
serve three-year terms until the 2004 Annual Meeting of
Shareholders, or until their successors are elected and have
been duly qualified.

      (2) To ratify the appointment of KPMG Peat Marwick LLP as
independent auditors for the current fiscal year.

Only shareholders of record as of the close of business on April
19, 2001, the record date, will be entitled to notice of and to
vote at the Annual Meeting and any adjournments or postponements
thereof.


SUN HEALTHCARE: Rejecting 9 NHP Healthcare Facilities Leases
------------------------------------------------------------
In connection with nine of Sun Healthcare Group, Inc.'s
healthcare facilities that together continue to lose money, the
Debtors seek the Court's authority to

      (a) reject certain real property leases entered into with
Nationwide Health Properties, Inc. and the Medicare and Medicaid
provider agreements;

      (b) transition and/or wind up operations of the Divesting
Facilities in accordance with relevant state law transition
procedures. The Debtors also seek approval of the Implementation
Procedures governing the transfer of the Divesting Facilities
and the treatment of related claims.

Of the nine facilities under the same Master Lease with NHP, six
are underperforming facilities that have been identified for
divestiture. During 2000, three of these facilities incurred net
losses in excess of $1 million, the other three incurred
approximately $1.2 million of negative EBITDA and actual net
income for the six Facilities exceeded negative $3.5 million.
The 2001 budget indicates possible improvement in financial
performance, but still an aggregate negative EBITDA of
approximately $450,000. The remaining three operated with a
positive EBITDA but their economic performance is only marginal.
The marginal facilities are included in the motion because the
Debtors have determined that any benefit arising from the
retention of the three marginal Master Lease Facilities is
greatly outweighed by the expenditure of time, effort and
monetary resources necessary to litigate the issue of whether
the Master Lease prevents the Debtors' assumption of individual
leases under the Master Lease.

However, even for the six Divesting Facilities, the Debtors
believe that if sufficient rent concessions were obtained, these
would then become economically viable. However, in prior
dealings, NHP indicated no willingness to provide rent
concessions. After consultation with the Committee, the Debtors
do not believe it would be a sound business judgment to continue
to operate the Divesting Facilities indefinitely. Instead, they
would have to embark on a course for disposition of the
facilities, the Debtors believe.

The Debtors remain hopeful that an agreement can be reached with
NHP regarding going concern transfers of the Divesting
Facilities, which is a preferred course of action. Therefore,
the Debtors seek to pursue a dual track, whereby they will
continue to engage in discussions with NHP while seeking
authorization to initiate state law governed Transition
procedures should those discussions fail to reach a mutually
agreeable outcome.

Accordingly, the Implementation Procedures include an opt-out
mechanism which enables the Debtors to transfer a Divesting
Facility as a going concern, upon the consent of NHP, if a new
operator is identified during the Transition Process.
Additionally, in order to maintain operations for the benefit of
the residents in the Debtors' Divesting Facilities, the
Implementation Procedures also provide that the requested
rejection of the Leases and Provider Agreements become effective
as of the actual date of divestiture of such facilities.

                The Implementation Procedures

The proposed Implementation Procedures provide that:

      (1) Each Divesting Facility will be subject to divestiture
in accordance with the applicable state laws that set forth the
Transition Procedures for such healthcare facilities;

      (2) Within three business days after the completion of the
divestiture of a Divesting Facility, the Debtors will file with
the Court and provide the Transition Notice to the Creditors'
Committee, the DIP lenders, NHP, HHS/DOJ and the relevant state
Medicaid agency of the date of the completion of the state-law
Transition Process (the Transition Date);

      (3) The rejection of any Lease or Provider Agreement with
respect to a Divesting Facility shall be effective as of the
Transition Date;

      (4) In the absence of an agreement to the contrary, NHP or
a state Medicaid agency shall have 30 days from the date of the
Transition Notice to submit a proof of claim for rejection
damages; and

      (5) In the event that during the state-law Transition
Process the Debtors and NHP agree on the transfer of a Divesting
Facility as a going concern, the Debtors shall be entitled to
opt out of the Transition Procedures with respect to such
Divesting Facility (subject to any applicable state law), in
which case the Debtors shall proceed in accordance with the
Transfer Procedures.

   Rejection of the Medicare and Medicaid Provider Agreements

The Debtors also seek to reject the Medicare and Medicaid
Provider Agreements related to the operations at the Divesting
Facilities because the Debtors are planning disposition of the
Divesting Facilities and the Provider Agreements are
consequently of no benefit to their estates.

                 The Cross Default Provisions

Certain of the Leases included in the motion contain provisions
pursuant to which a default under one of those Leases
constitutes a default under one or more leases with NHP that the
Debtors are not presently seeking to reject. The Debtors believe
that the cross default provisions are ineffective to bar a
subsequent assumption of such other leases.

In the event such cross-default provisions are found to be
enforceable, the Debtors would need to reassess their business
decision to reject certain of the Divesting Facilities' Leases
because a rejection under those circumstances would jeopardize
the Debtors' ability to assume certain other leases with NHP of
facilities that the Debtors may wish to retain upon an emergence
from chapter 11.

Accordingly, the Debtors requested that the Court, as a
condition to the rejection of such Leases, find to be
unenforceable any cross-default provisions contained in any
other leases between the Debtors and NHP.

                          * * *

The Debtors believe that the Implementation Procedures are fair
and appropriate under the circumstances, represent a valid
exercise of the Debtors' business judgment, and are an
appropriate means to permit the Debtors to conclude their
operational and financial responsibility for the Divesting
Facilities.

Accordingly, the Debtors requested that the Court enter an
Order, pursuant to sections 363 and 365 of the Bankruptcy Code,
(i) approving the rejection of the Leases, Medicare Provider
Agreements and Medicaid Provider Agreements, effective as of the
Transition Date, (ii) authorizing the commencement of the
Transition Process, (iii) approving the Implementation
Procedures, and (iv) granting the Debtors such other and further
relief as is just. (Sun Healthcare Bankruptcy News, Issue No.
20; Bankruptcy Creditors' Service, Inc., 609/392-0900)


SUNBEAM CORP.: Court Approves Chapter 11 Disclosure Statement
------------------------------------------------------------
Judge Arthur J. Gonzalez of the U.S. Bankruptcy Court in
Manhattan approved Sunbeam Corp.'s chapter 11 reorganization
disclosure statement, according to Dow Jones. Gonzalez dismissed
objections to the statement that weren't withdrawn or rendered
moot by the modifications. A confirmation hearing will be held
on July 17 and objections to the plan are due by June 28. The
Boca Raton, Fla.-based company and its affiliates filed for
chapter 11 protection on Feb. 6, listing assets of about $3
billion and liabilities of about $3.2 billion. (ABI World, May
4, 2001)


TANDYCRAFTS: Gets Delisting Notice From New York Stock Exchange
---------------------------------------------------------------
Tandycrafts, Inc. (NYSE: TAC) has been advised by the New York
Stock Exchange (NYSE) that the Company's plan for compliance
with continued listing standards has not been accepted by the
NYSE and that the NYSE has determined that the Company's stock
should be suspended prior to the opening on May 14, 2001. The
Company has a right to a review of this determination and is
evaluating this right. The Company is also evaluating its
alternative trading options, including the pink sheets.

The NYSE stated that this action was taken due to the Company's
failure to meet the NYSE's continued listing standards requiring
total global capitalization of not less than $50 million and
total stockholder's equity of not less than $50 million, average
market capitalization of not less than $15 million over a thirty
(30) day trading period, and a 30-day average share price of not
less than $1.00.

Tandycrafts, Inc. (www.tandycrafts.com ) is a maker and marketer
of picture frames and wall decor. Tandycrafts' products are sold
nationwide through wholesale distribution channels, including
mass merchandisers and specialty retailers.


TOMANET: Appoints Consultants To Develop Reorganization Plan
------------------------------------------------------------
TomaNet Inc. (CDNX: Common Shares: YTI; Class A Shares: YTI - A)
announced the appointment of a team of management consultants to
develop a reorganization plan for the Company.

The consulting team is comprised of Rod MacDonald, Bill Love and
Patrick McDougall. MacDonald and Love are the principals of YNN
Holdings Inc., which holds a 53% interest in Athena Educational
Partners (AEP) Inc. Patrick McDougall is a Toronto businessman.

The consulting team was appointed on April 2, 2001 by the
Company's then CEO with the mandate to: (1) manage the day-to-
day affairs of the Company on an interim basis; (2) develop a
reorganization plan for the Company; and (3) cause a meeting of
shareholders to be called.

The consulting team also has been appointed to carry out a
similar mandate on behalf of SKG Interactive Inc., which holds
approximately a 54.2% interest in the Company. SKG Interactive
currently holds a convertible debenture of Athena in the
principal amount of $3.65 million. The current outstanding
amount of the debenture is approximately $4.0 million.

The Company also announced that a meeting of TomaNet
shareholders is expected to be called within approximately three
weeks for the purpose of electing a new Board of Directors. The
shareholders meeting is expected to take place approximately
during the last week of June, 2001.

Moreover, two Company directors, Bernard G. Abrams and Charles
T. Newman, both resigned on March 5, 2001, leaving the Company's
board of directors without a quorum. Paul S. Romanchuk
subsequently submitted his resignation as CEO and as the sole
remaining director of the Company on April 26, 2001. Alan
Magnacca resigned as president of the Company effective March
16, 2001 but is continuing to assist the Company on a consulting
basis.

The consulting team intends to present a reorganization and
restructuring plan to the Company's new Board of Directors.


URSUS TELECOM: Nasdaq Notifies of Possible Delisting of Shares
--------------------------------------------------------------
Ursus Telecom Corporation (Nasdaq:UTCCQ), an international long
distance carrier that provides VoIP, long distance, direct dial,
value added and Internet based services, had been notified by
the Nasdaq Listing Qualification Department the Ursus's
securities would be delisted from the Nasdaq National Market for
the Company's inability to maintain its net tangible assets
above the minimum requirement of $4 Million, required for the
continued listing on the Nasdaq National Market in accordance
with the National Association of Securities Dealers, Inc.'s Rule
4450(a)(3).

                     About Ursus Telecom

Ursus, a specialist in carrier grade VoIP solutions worldwide,
is an international long distance carrier that provides VoIP,
long-distance, direct-dial, value-added and Internet-based
services. Ursus has retail operations throughout Latin America,
the Middle East, Africa and Europe, along with wholesale and
retail operations in the United States. Ursus is also a licensed
national and international long-distance carrier in Argentina
and Peru.


VALUE HOLDINGS: Names Alison Cohen As Interim President
-------------------------------------------------------
Value Holdings, Inc. (OTCBB:VALH) announced that Alison Cohen, a
director and past president of the company, has been named as
interim president.

I have accepted the resignations of Mr. Ziner and Mr. Maker and
have rejoined the board of directors of Value Holdings, Mrs.
Cohen said. "I shall serve as interim president and Value
Holdings is committed to staying in business.

Value Holdings will continue as a holding company seeking to
acquire businesses with secure market niches and the potential
for significant growth, she continued. "We will seek to utilize
the tax loss carry-forwards in the company to attract profitable
businesses and attempt to restore shareholder value. We will
review opportunities presented to us by Gemini Integrated
Financial Services Corp., our financial and investor-relations
advisors.

I have been advised that the receiver has now put Network Forest
Products into bankruptcy, and Value Holdings will most likely
write off its entire investment in Network and its subsidiaries.
While Harron Hardware and Building Supplies and Cutler Forest
Products are viable businesses, they are considered assets of
Network by the receiver and while not in receivership at this
time appear to be assets of Network's bankruptcy estate."


VLASIC FOODS: Has Until September 30 To Make Lease Decisions
------------------------------------------------------------
Vlasic Foods International, Inc. sought and obtained an order
extending their time to decide whether to assume, assume and
assign, or reject unexpired non-residential leases of real
property for the earlier of a period of six months to and
including September 30, 2001, or the date of confirmation
of the Debtors' plan of reorganization, subject to the rights of
each lessor to request, upon appropriate notice and motion, that
the Court shorten the extension period and specify a period of
time in which the Debtors must determine whether to assume or
reject an unexpired lease.

In support of this request, the Debtors told Judge Walrath that
they are lessees under a number of unexpired leases of
nonresidential real property, the majority of which are leases
used by the Debtors to operate corporate offices, sales offices,
and warehouse space. All of these leases are assets of the
Debtors' estates, and are integral to the Debtors' continued
operations as they seek to reorganize.

Although the Debtors expect that they ultimately may seek the
Court's permission to reject some of the unexpired leases prior
to the conclusion of these Chapter 11 cases, many, if not most,
of the unexpired leases will prove to be desirable -- or
necessary -- to the continued operation of the Debtors'
businesses and thereby enhance the value of the Debtors'
business. Still other unexpired leases, while not necessary for
the Debtors' ongoing operations, may prove to be "below market"
leases that may yield value to the estates through their
assumption and assignment to third parties. Until the Debtors
have had the opportunity to complete a thorough review of all of
the unexpired leases, however, they cannot determine exactly
which unexpired leases should be assumed, assigned or rejected.

Although the Debtors have made progress in their evaluation of
these leases, the Debtors simply have not yet been able to
assess the value or marketability of all of the leases and
therefore cannot make determinations with respect to which
leases should be assumed and which, if any, should be rejected.
Indeed, the Debtors told Judge Walrath they believe that, due to
the importance of the task, and the Debtors' immediate and
primary focus on stabilizing their businesses in the early
stages of their Chapter 11 cases, it will be impossible for
them to adequately assess whether to assume or reject the
unexpired leases within the period specified by statute.

The Debtors' decision to assume, assign or reject particular
unexpired leases, as well as the timing of such assumption,
assignment or rejection, depends in large part on the Debtors'
business plans for the future. At this early juncture in these
Chapter 11 cases, it is not yet possible for the Debtors to
determine whether or not each of the locations covered by the
unexpired leases will play a party in the Debtors' businesses
going forward. (Vlasic Foods Bankruptcy News, Issue No. 4;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


W.R. GRACE: U.S. Trustee Appoints Asbestos Claimants' Committee
---------------------------------------------------------------
Pursuant to 11 U.S.C. Sec. 1102(a)(1), the United States Trustee
for Region III appointed these creditors and plaintiff-lawyers
to serve on an 11-member Official Committee of Asbestos Personal
Injury Claimants in W. R. Grace & Co.'s chapter 11 cases:

        Anthony Angiuli
        c/o Weitz & Luxenberg
        180 Maiden Lance
        New York, NY 10038
        (212) 558-5500

        Harvey Blair
        C/o Goldberg, Persky, Jennings & White, P.C.
        1030 Fifth Avenue
        Pittsburgh, PA 15219
        (412) 471-3980

        Roberta Jeffery, Esq.
        C/o Kazan, McClain, Edises, Simon & Abrams
        171 Twelfth Street, Third Floor
        Oakland, CA 94607
        (510) 465-7728

        Steven Jones, as Personal Representative of
        The Estate of Barbara Ellen Hammack
        C/o Barron & Budd
        The Cantrum
        3102 Oak Lawn Avenue, Suite 1100
        Dallas, TX 75219
        (214) 523-6265

        Thomas J. Jones
        C/o Kelley & Ferraro
        Attention Michael Kelley, Esq.
        1300 East Ninth St.
        1901 Panton Media Building
        Cleveland, OH 44114
        (216) 575-0777

        Beverly Mauldin, as Personal Representative of
        The Estate of John Wesley Mauldin
        C/o Silber Pearlman
        2711 North Haskell Ave., 5th Floor, LB 32
        Dallas, TX 75204
        (214) 874-7000

        Jeanette Parent, as Personal Representative of
        The Estate of Thomas Parent
        C/o Ness, Motley, Loadholt, Richardson & Poole
        28 Bridgeside Blvd.
        P.O. Box 1792
        Mt. Pleasant, SC 29464
        (843) 216-9545

        Nathan O. Phillips, Jr.
        C/o Robins, Cloud, Greenwood & Lubel, L.L.P.
        910 Travis, Suite 2020
        Houston, TX 77002
        (713) 650-1200

        John Russell
        C/o Jacobs & Crumplar, P.A.
        2 East 7th Street
        P.O. Box 1271
        Wilmington, DE 19899
        (302) 656-5445

        Royce N. Ryan
        C/o McGarvey, Heberling, Sullivan & McGarvey, PC
        Attention John L. Herberling, Esq.
        745 South Main St.
        Kalispel, MT 59901
        (406) 752-5566

        John Smutko
        C/o Cooney & Conway
        Attention John D. Cooney
        120 North LaSalle St., 30th Floor
        Chicago, IL 60602
        (312) 236-3029

Frank J. Perch, III, Esq., is the attorney assigned to monitor
and represent the interests of the U.S. Trustee in W.R. Grace's
chapter 11 cases. (W.R. Grace Bankruptcy News, Issue No. 4;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


WESTPOINT STEVENS: Moody's Slashes Senior Notes' Rating To Caa2
---------------------------------------------------------------
Moody's Investors Service downgraded the long-term debt ratings
of WestPoint Stevens, Inc., which include:

      * $525 million issue of 7.875% senior unsecured notes due
        2005, to Caa2 from B1

      * $475 million issue of 7.875% senior unsecured notes due
        2008, to Caa2 from B1

      * Senior implied rating was lowered to Caa1 from Ba3, and

      * Issuer rating to Caa2 from B1.

The rating outlook is negative while approximately $1.0 billion
of debt securities are affected. Accordingly, this concludes
Moody's rating review initiated on February 13, 2001.

Moody's said the rating action is a result of WestPoint's weak
balance sheet with debt levels approximating revenues; weak
profit margins due to the loss of sales, higher raw material and
energy costs and under-absorption of fixed costs; a significant
de-capitalization of the company over the last couple of years
which, coupled with adverse industry fundamentals, has decreased
WestPoint's financial flexibility as well as debt protection
measurements. Further, the ratings reflect WestPoint's weak
returns on assets, poor cash generation and inventory management
challenges, related Moody's.

The negative outlook reflects Moody's belief that the company's
sales will not materially improve this year and that, in fact,
the company's core product sales may actually decline as vendors
look to streamline their category presentation and continue
promotional activity to stimulate weak sales. The company may be
unable to improve capacity utilization and to reduce unit
variable cost, as uncertain demand creates challenges in
production and inventory management which continue to stress
operating margins and cash generation, Moody's said.

WestPoint Stevens Inc. is located in West Point, Georgia. It is
a vertically integrated manufacturer and marketer of bed linens,
towels, blankets, comforters, and accessories that are sold
across multiple price points through each major retail
distribution channel.


WHEELING-PITTSBURGH: Exclusive Period Extended To June 14
---------------------------------------------------------
Wheeling-Pittsburgh Steel Corp. sought and obtained extensions
of their exclusive periods during which to file a plan of
reorganization and solicit acceptances of that plan.

James M. Lawniczak, Esq., and Scott N. Opincar, Esq., at Calfee,
Halter & Griswold LLP, explained to the Court that, since the
petition date, the Debtors have been dealing with a multitude of
complex supply, employee and contract issues common to
complicated bankruptcy cases, issues that justify the requested
extension so that the Debtors could draw up the proper
reorganization plan. Debtors' counsel argued that the request
should be granted considering that the Debtors, (a) have not had
sufficient time to negotiate and prepare an acceptable plan, (b)
are making a good faith effort towards reorganization, (c) are
paying their postpetition debts as they become due, (d) are
negotiating in good faith with their creditors and have kept the
Committees fully apprised of their work and progress towards
reorganization and (e) are not seeking the extension to pressure
creditors into accepting an unsatisfactory plan.

           Noteholders' Committee's Partial Opposition

Jean R. Robertson, Esq., at Hahn Loeser & Parks LLP, in Ohio,
clarified for Judge Bodoh that the Noteholders' Committee is not
opposed to an extension of the exclusivity periods, since the
committee recognizes that the Debtors' bankruptcy cases are
large and complicated and this is the Debtors' first request for
an extension. However, the Noteholders' Committee believes that
the requested extension is too lengthy and, there is no reason
to allow the Debtors' control over the plan process to remain
unchecked for another six months considering that the state of
the steel industry is uncertain as is the direction in which
these cases will proceed. By way of counterproposal, the
Noteholders' Committee submits that the exclusive periods be
extended for a period of 90 days without prejudice to the
Debtors' right to seek further extension, if warranted, at the
expiration of that time.

               Agreed Order by and between Parties

In accord with the agreement between the Debtors and the
Noteholders' Committee, Judge Bodoh granted the Debtors' motion
and extends (a) the period within which the Debtors may
exclusively file a reorganization plan for an additional 90
days, to and including June 14, 2001, and (b) the period in
which the Debtors may solicit acceptances of the reorganization
plan is extended, to and including August 13, 2001. (Wheeling-
Pittsburgh Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


WICKES INC.: Stockholders To Meet In Illinois On May 23
-------------------------------------------------------
The Annual Meeting of Stockholders of Wickes Inc. will be held
on Wednesday, May 23, 2001, at 10:00 a.m., Central Daylight
Time, at the executive offices of the Company, 706 North
Deerpath Drive, Vernon Hills, Illinois.

The meeting will be held for the following purposes:

      (1) To elect three members of the Board of Directors for
          three-year terms and until their successors have been
          elected and qualified.

      (2) To approve the appointment of Deloitte & Touche LLP as
          independent auditors for the Company.

      (3) To transact such other business as may properly come
          before the meeting.

Stockholders of record at the close of business on April 6,
2001, will be entitled to vote at the Annual Meeting.


WINSTAR COMMUNICATIONS: Paying Prepetition Tax Obligations
----------------------------------------------------------
Winstar Communications, Inc. asked the Court for permission to
pay, in their discretion, the prepetition tax and fee
obligations owed to domestic and foreign governmental entities,
unless subject to dispute, in the ordinary course of business
and on their normal due dates. Such obligations include
assessments, charges, interest, penalties, fines, settlements,
judgments and similar tax or fee related obligations. Winstar
makes this request pursuant to 11 U.S.C. Sec. 105(a).

The prepetition tax and fee obligations at issue are appropriate
for payment to the extent that they are priority or secured
claims that are payable in full or, alternatively under the
doctrine of necessity. A substantial number of the obligations
will be coming due shortly after the commencement of these cases
and Winstar desires to avoid disputes with governmental entities
and the attendant expenditures that accompany such disputes.
Such expenses are imminent if Winstar delays payment because
governmental entities typically attempt to enhance their rights
to payment. Winstar estimates the prepetition tax and fee
obligations at $3,850,000, exclusive of federal income taxes.
Winstar has sufficient resources to make such payments, Pauline
K. Morgan, Esq., at Young Conaway Stargatt & Taylor, LLP,
indicates.

Ms. Morgan told the Court that prior to the petition date,
Winstar incurred obligations to the international, federal,
state and local governments in which it conducted business. As
of the petition date, Winstar was current on all undisputed and
known tax obligations.

The payment of tax obligations will ultimately preserve the
resources of the estates, thereby promoting their
rehabilitation. If they are not paid in a timely manner, Winstar
will be required to expend resources to resolve a multitude of
issues related to such obligations. For example, issues that
will be argued include:

      (a) whether the obligations are priority, secured or
          unsecured in nature,

      (b) whether they are proratable, prepetition or
          postpetition in full, and

      (c) whether penalties, interest and attorney's fees and
          costs are priority, secured or unsecured in nature.

Delayed payment may also subject Winstar to actions by the
governmental entities to revoke licenses and other privileges.
Moreover, certain taxes are sales or use taxes, which may be
considered to be trust funds that are not included in property
of the Winstar estates, or as to which officers and directors
may be held personally liable in the event of nonpayment.
Collection efforts would pose an obvious distraction to
management and others during these Chapter 11 proceedings.

Ms. Morgan informed the Court that protections afforded to
Winstar by the U.S. Bankruptcy Code are unavailable in foreign
countries. Thus, delayed payment of obligations may result in
forfeiture of rights to conduct business in respective
jurisdictions, seizure or impoundment of assets, and possible
civil and criminal liability.

Becoming technical, Ms. Morgan informed those who will listen
that, to the extent the prepetition tax and fee obligations are
priority claims pursuant to section 507(a)(8) of the Code, or
secured claims pursuant to section 506(a) of the Code, their
payment should be authorized on the basis that they are required
to be paid in full in any event as a condition to satisfying the
plan confirmation requirements contained in section 1129 of the
Code. Alternatively, payment of prepetition tax obligations is
appropriate for authorization under the "doctrine of necessity,"
which is grounded in section 105(a). This Court "may issue any
order, process or judgment that is necessary or appropriate to
carry out the provisions of this title." Thus, "the ability of a
Bankruptcy Court to authorize the payment of prepetition debt
when such payment is needed to facilitate the rehabilitation of
the debtor is not a novel concept." In re Ionosphere Clubs,
Inc., 98 B.R. 174, 175 (Bankr. S.D.N.Y. 1989).

The focus of these cases should be on restructuring the massive
amount of obligations relating to unsecured bank loans and debt
securities, Ms. Morgan suggests. This makes the obligations owed
to governmental authorities insignificant and will have a
negligible effect on the recoveries of the major creditors in
these cases. Moreover, the amount of the payment will likely be
offset by the amount of resources not required for disputes that
are unnecessary and wasteful.

Finding that the Debtors' Motion is well taken, Judge Farnan
granted the request in all respects. (Winstar Bankruptcy News,
Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-0900)


WORLD KITCHEN: Appoints Joseph McGarr As Senior VP & CFO
--------------------------------------------------------
World Kitchen, Inc. announced the appointment of Joseph W.
McGarr to the position of Senior Vice President and Chief
Financial Officer, effectively immediately. Mr. McGarr will
report to Steven G. Lamb, president and CEO.

In this new position, Mr. McGarr will be responsible for leading
all finance activities at World Kitchen, including: worldwide
financial control & reporting, tax, treasury, credit &
collection, audit, business analysis, and institutional
relationships. He will also play a key role in ensuring that the
company's previously announced restructuring program meets all
of its key financial objectives. This program, announced on
April 3, 2001, is aimed at improving the cost structure of the
organization through consolidation of manufacturing capacity,
outsourcing of certain operations, and reduction in inventories
and distribution costs.

Joseph McGarr, 49, joins World Kitchen from Fort James
Corporation, Deerfield, Illinois, where he served as Executive
Vice President and Chief Financial Officer. In addition to
providing worldwide financial leadership, he was also
responsible for leading the $11 billion acquisition of Fort
James by Georgia-Pacific Corp.

During his 19-year career with Fort James, Mr. McGarr served in
a variety of strategic, finance, supply chain and marketing
positions with a focus on process improvement, cost reduction
and operational streamlining.

From 1995 to 1999 he served as Vice President of System
Effectiveness, Vice President of Productivity and Senior Vice
President of Productivity and Strategy. In these roles he
implemented a successful company-wide productivity program,
rationalized the firm's business portfolio to sharpen their
consumer products focus, and led the post-merger integration of
James River Corporation's $5.6 billion acquisition of Fort
Howard.

Joe's 26 years experience in strategic financial management,
productivity enhancement, and business integration will be a
wonderful asset to us as we complete the operational
transformation necessary to meet our aggressive corporate goals,
said Mr. Lamb. Given his strong skills and action-oriented
management style, I expect Joe to quickly become a key
contributor to our leadership team.

Mr. McGarr earned a Bachelor of Science degree from The Cooper
Union, New York, New York in 1973. After completing his MBA in
Finance and Economics from the University of Rochester,
Rochester, NY in 1975, Mr. McGarr began his career as a capital
analyst with General Foods Corporation. In 1978 he joined
American Can Corporation as Senior Project Analyst and the
following year assumed responsibility as Associate Director of
Strategic Planning. He joined Fort James Corporation in 1982 as
Director, Manufacturing Planning.

World Kitchen's principal products are glass, glass ceramic and
metal cookware, bakeware, kitchenware, tabletop products and
cutlery sold under well-known brands including CorningWare,
Pyrex, Corelle, Visions, Revere, EKCO, Baker's Secret, Chicago
Cutlery, Regent Sheffield, OXO and Grilla Gear. World Kitchen
has been an affiliate of Borden, Inc. and a member of the Borden
Family of Companies since April 1998.

World Kitchen currently has major manufacturing and distribution
operations in the United States, Canada, United Kingdom, South
America and Asia-Pacific regions. Additional information can be
found at: www.worldkitchen.com.


WORLDTEX: Court Okays Disclosure Statement Despite Objection
------------------------------------------------------------
Despite an objection from the U.S. Trustee assigned to its case,
Worldtex Inc. received bankruptcy court approval of its
disclosure statement last week. Judge Sue L. Robinson of the
U.S. District Court in Wilmington, Del., signed the order on
Monday. A plan confirmation is scheduled for July 30, and
objections are due July 16. (ABI World, May 4, 2001)

                            *********

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

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