TCR_Public/010510.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Thursday, May 10, 2001, Vol. 5, No. 92


AMAZON.COM: Legg Mason Discloses 14.67% Equity Stake
AMEDISYS INC: Reports Improved First Quarter 2001 Results
BETHLEHEM STEEL: Moody's Puts Debt Ratings Under Review
CALIFORNIA PACIFIC: Rice Marketer Files For Bankruptcy
CALIFORNIA PACIFIC: Case Summary & Largest Unsecured Creditors

CMI INDUSTRIES: Responds To Noteholders' Involuntary Petition
FINOVA GROUP: Overview Of Joint Plan Of Reorganization
FRUIT OF THE LOOM: Selling Non-Operating Facilities & Equipment
FUSION NETWORKS: Initiates Assignment for Benefit of Creditors
GOLDEN STAR: Shareholders To Convene In Toronto On June 27

GROVE WORLDWIDE: Chapter 11 Case Summary
GROVE WORLDWIDE: S&P Slashes Credit Ratings To 'D'
HARNISCHFEGER: Identifies Members Of Advisory Committee
IGI INC: Names Earl Lewis As New Chairman of the Board
IMPERIAL CREDIT: Starts 12% Senior Note Exchange Offer Today

IMPERIAL SUGAR: Creditors Seek Order Disbanding Equity Committee
KOMAG INCORPORATED: Posts $51 Million Net Loss in Q1 2001
LERNOUT & HAUSPIE: Court Establishes June 11 Claims Bar Date
LOEWEN GROUP: Canadian Pref'd Shareholders Object To Joint Plan
LUCENT TECHNOLOGIES: CFO Shuffle Spooks Investors

LUZON SERVICES: Files Chapter 11 Petition in Oregon
LUZON SERVICES: Chapter 11 Case Summary
MARINER: Wants To Assume ACMS Sublease For California Facility
MOE GINSBURG: List of 20 Largest Unsecured Creditors
MORGAN GROUP: Progresses On Acquisition of New Credit Facility

PACIFIC GAS: Court Grants More Time To File Schedules
PILLOWTEX CORP: Wants To Assume Software Agreements With Camstar
REGAL CINEMAS: Says It's Unable to Cure Debt Covenant Defaults
RITE AID: Reports Fourth Quarter And Year-End Financial Results
SAFETY-KLEEN: Judge Approves Payment Of Superfund Obligations

SIMONDS INDUSTRIES: S&P Cuts Corporate Credit Rating to B
SUN HEALTHCARE: Transferring Five More SunBridge Facilities
TRANS ENERGY: Selling Debt Securities To Raise Needed Funds
TRANSPORTATION COMPONENTS: Files Chapter 11 Petition in Houston

USG CORPORATION: Moody's Downgrades Senior Note Rating To B2
VIDEO UPDATE: Movie Gallery Buys Senior Secured Bank Debt
W.R. GRACE: Moves To Withdraw Reference re Asbestos Claims
W.R. GRACE: Obtains Approval for $250 Million DIP Financing
WHEELING-PITTSBURGH: Proposes Workers' Income Protection Policy


AMAZON.COM: Legg Mason Discloses 14.67% Equity Stake
In a regulatory filing with the Securities and Exchange
Commission, Legg Mason, Inc., based in Baltimore, Maryland,
discloses that it beneficially owns 52,599,180 shares of common
stock in Inc.  This amount represents 14.67% of the
outstanding common stock of the company.

AMEDISYS INC: Reports Improved First Quarter 2001 Results
Amedisys, Inc. (OTC BB: "AMED"), one of America's leading home
health nursing companies, reported its financial results for the
first quarter of 2001.

The Company reported net income from continuing operations,
before income taxes, of $2.7 million for the three months ended
March 31, 2001. Net of income taxes, the Company reported income
from continuing operations of $2.4 million, or $0.32 per diluted
share, for the first quarter of 2001, on revenues of
approximately $26.2 million. These results compared with
revenues of approximately $23.4 million and a net loss, before
special items, of ($1.4 million), or ($0.42) per share, in the
first quarter of 2000. The significant improvement in operating
profitability was primarily attributable to the implementation
of Medicare's Prospective Payment System in the fourth quarter
of 2000.

"We are pleased to report that the earnings turnaround that
followed the implementation of Medicare's new Prospective
Payment System in October 2000 is continuing," stated William F.
Borne, Chairman and Chief Executive Officer of Amedisys, Inc. "A
revenue gain of 12% in the first quarter reflected growth in
patient admissions, contributions from acquired home nursing
agencies, and changes in the Medicare payment system. Operating
income for the quarter totaled $3.2 million, or 12% of net
revenue, as compared with an operating loss of ($816,000) for
the same quarter of last year."

"The recent acquisition of seven home care agencies from Seton
Home Health Services, Inc., as previously reported, should
contribute $12-$14 million to Amedisys' annualized revenues. We
are continuing to pursue an acquisition strategy that will
expand the geographic scope of our services and fill in coverage
gaps in our present market areas."

"We also believe that the managed care industry can benefit from
our ability to provide home nursing services on a cost-effective
basis," continued Borne. "Amedisys recently signed managed care
contracts with United Healthcare of Alabama and United
Healthcare of Georgia that cover approximately 650,000 residents
in those two states. We will continue to pursue managed care
contracts as we expand throughout our market areas."

"Patient admissions continued strong during the month of April,
and we expect to report a profitable second quarter, compared
with a loss from continuing operations in the prior-year period.
We believe that Amedisys is positioned for continuing
profitability as a cost-effective provider of nursing and
disease state management services in the home care environment.
Our strategy is to pursue both internal and external growth
opportunities within the home nursing industry. Consistent with
our goal of enhancing shareholder values, we are also applying
to have our common stock listed on Nasdaq or the American Stock
Exchange in the near future," concluded Borne.

BETHLEHEM STEEL: Moody's Puts Debt Ratings Under Review
Moody's Investors Service placed Bethlehem Steel Corporation's
ratings under review for possible downgrade. These are:

      * Senior secured credit facility rating of B2,

      * Senior implied rating of B3,

      * Senior unsecured issuer rating of Caa1,

      * Senior unsecured debentures and notes ratings of Caa1,

      * Preferred stock rating of "caa".

Approximately $900 million of debt securities are affected.

Moody's stated that the review is prompted by the unexpectedly
steep decline in the company's liquidity during the first
quarter, its having entered into negotiations to a modify
financial covenant in its existing credit agreement, and its
seeking a new and larger secured credit agreement. Accordingly,
the review will focus on Bethlehem's success with obtaining
modifications of its covenants and negotiating a new increased
credit facility, as well as on the company's progress with
lowering its working capital requirements.

Based in Bethlehem, Pennsylvania, Bethlehem Steel Corporation is
the second largest U.S. steel producer.

CALIFORNIA PACIFIC: Rice Marketer Files For Bankruptcy
Due to sharp losses incurred from the sale of rice to Japan a
year ago, California Pacific Rice Milling (Cal Pac) was prompted
to file for Bankruptcy Court protection from creditors. The
unexpected competition from China in 1999 apparently reduced
Japanese demand for U.S. short-grain rice, and Cal Pac proved to
be the most vulnerable marketer, The Sacramento Bee reported.

Cal Pac was forced to write down the value of the huge surplus.
According to Don Haywood, Cal Pac's chief executive, the company
ultimately sold some of it for feed.

Moreover, Mr. Haywood said that because of the company's
weakened financial position, Union Bank of California had frozen
all loans to Cal Pac nine months ago, forcing the company to
operate on its own cash since then.

Also, several rice growers filed a complaint recently with the
state Department of Food and Agriculture, claiming the company
still owes them about 25 percent of what they are due for rice
they delivered in 1999 for processing, according to The
Sacramento Bee. But Haywood claimed the company has met all its
contractual obligations to growers.

California Pacific Rice Milling, a Sacramento Valley business,
processes and markets nearly 20 percent of the state's rice
crop. It was founded in 1985 by a private partnership of rice
farmers, marketers and food distributors. The company is said to
rank alongside Sunwest Milling Co. of Davis as the state's third
largest rice milling and marketing firm.

CALIFORNIA PACIFIC: Case Summary & Largest Unsecured Creditors
Debtor: California Pacific Rice Milling Ltd.
         1603 Highway 99 West
         PO Box 725
         Arbuckle, CA 95912

Type of Business: The company is a rice milling and marketing
                   firm with market concentration in Sacramento

Chapter 11 Petition Date: May 03, 2001

Court: Eastern District Of California

Bankruptcy Case Nos.: 01-25416

Judge: Jane Dickson McKeag

Debtor's Counsel: Rober S. Bardwell, Esq.
                   555 Capitol Mall
                   Suite 640, Sacramento, CA 95814

Estimated Assets: $10 Million to $50 Million

Estimated Debts: $10 Million to $50 Million

Debtor's 13 Largest Unsecured Creditors:

Entity                               Claim Amount
------                               ------------
PM & O Line                          $ 5,114.14

Cornerstone Systems                  $ 4,847.00

San Joaquin Mercantile               $ 4,304.10

Three B's Toilet Rentals             $ 3,606.97

Canan Financial Services             $ 3,521.02

Associates Fleet Services            $ 3,268.24

EA Trucking, Inc.                    $ 3,150.00

English & Sons                       $ 2,541.00

Matson Navigation                    $ 2,529.31

Quezada & Sons Trucking              $ 2,041.50

Cintas Corporation                   $ 2,008.70

Wadham Energy                        $ 1,783.67

GE Capital                           & 1,721.75

CMI INDUSTRIES: Responds To Noteholders' Involuntary Petition
CMI Industries, Inc. announced that in response to the
involuntary petition reportedly filed against the Company under
the Bankruptcy Code late last week by certain holders of the
Company's 9 1/2% Senior Subordinated Notes due 2003, the Company
intends to continue to trade and operate in the ordinary course
and to work to achieve its strategic objectives; and the Company
is implementing a plan to do so.

Under the bankruptcy laws, CMI has full authority to continue to
operate its business and to carry out its other business plans
without court supervision unless and until a court hearing is
resolved adverse to the Company.  No such hearing is now
scheduled, and the Company will be able to respond beforehand.
CMI intends to vigorously seek the dismissal of this unwarranted
lawsuit if it is not first dismissed by the petitioning
bondholders.  Representatives of the petitioning bondholders are
currently discussing with the Company the basis for dismissing
the petition and a cooperative approach to restructuring the
Company's debt structure outside of the bankruptcy context.

In the meantime, all trade vendors are current and are being
paid in the normal course of business.  In addition, the Company
is joining its senior secured bank lender to file an emergency
motion to secure an order from the Delaware court that the
Company may continue to utilize the borrowing capacity that, but
for the bondholder's action, the Company would enjoy under its
existing senior secured bank facility.  At present, that
borrowing capacity under the existing senior secured bank
facility would allow additional borrowings of at least $12

CMI Industries, Inc., and its subsidiaries manufacture textile
products that serve a variety of markets, including the home
furnishings, woven apparel, elasticized knit apparel and
industrial/medical markets.

Headquartered in Columbia, South Carolina, the Company operates
manufacturing facilities in Clarkesville, Georgia; Clinton,
South Carolina; Greensboro, North Carolina; and Stuart,
Virginia.  The Company had net sales from continuing operations
of $194.7 million in 2000.

FINOVA GROUP: Overview Of Joint Plan Of Reorganization
The FINOVA Group, Inc.'s Reorganization Plan contemplates the
restructuring and payment of the bank, bond and other debt of
FNV Capital through implementation of a comprehensive
restructuring transaction with Berkadia LLC, a joint venture of
Berkshire Hathaway Inc. and Leucadia National Corporation, that
was first announced on February 27, 2001. Under the Plan,
Berkadia will make a $6,000,000,000 loan to FNV Capital that,
together with the Debtors' cash on hand and the issuance by FNV
Group of approximately $4,400,000,000 aggregate principal amount
of New Senior Notes, will enable the Debtors to restructure
their debt. In addition, the Plan contemplates that, upon the
Effective Date, Berkadia will designate a majority of the Board
of Directors of Reorganized FNV Group as of the Effective Date,
and that two members of the Board of Directors of Reorganized
FNV Group will be directors currently serving on FNV Group's
Board of Directors.

The Debtors expect to emerge from chapter l1 on or before August
31, 2001.

The plan constitutes separate plans of reorganization for each
of the nine Debtors. After implementation of the Plan, each
Debtor, other than FINOVA Finance Trust, will emerge from
chapter 11 as a separate corporate entity. Under the Plan, FNV
Trust will dissolve.

The Plan contemplates that all creditors of each of the Debtors,
other than general unsecured creditors of FNV Capital and
holders of Securities Litigation Claims, will receive
reinstatement of their Claims, surrender of collateral or
payment in Cash on the Effective Date of the Plan, unless they
agree with the Debtors to alternate treatment.

With respect to creditors with secured Claims, the Plan also
permits Debtors to surrender the assets securing the Claim.

The Plan further contemplates that general unsecured creditors
of FNV Capital will receive the proceeds of the Berkadia Loan,
the New Senior Notes and Cash in satisfaction of their Claims.

Under the Plan, equity Interest holders in each of the Debtors,
other than FNV Trust, will retain their Interests in the
applicable Reorganized Debtor, subject to dilution in certain
cases. The holders of preferred equity Interests in FNV Trust,
also called TOPrS, will receive a pro rata distribution of Group
Subordinated Debentures issued by FNV Group, which are the only
assets held by FNV Trust. Common equity Interests in FNV Trust
will be cancelled and FNV Group, as the holder thereof, will not
receive any distribution or retain anything on account of its

The Plan further provides for the treatment of claimants in
various Securities Litigation actions now pending against the
Debtors and others.

Specifically, the Plan contemplates the issuance of Preferred
Stock of FNV Group to satisfy any final judgments against FNV
Capital arising from an existing class action Securities
Litigation against FNV Capital and the issuance of Additional
Mezzanine Common Stock to satisfy any final judgments against
FINOVA Mezzanine Capital Inc. arising from an existing class
action Securities Litigation against FNV Mezzanine.

The Plan contemplates that all existing common stock of FNV
Mezzanine will be retained by FNV Capital as the existing
holder, but that Additional Mezzanine Common Stock may be issued
to satisfy final judgments, if any, for plaintiffs in an
existing Securities Litigation against FNV Mezzanine.

Further, the Plan contemplates that all existing common stock of
FNV Group will be retained by the existing holders, but that New
Group Preferred Stock will be issued to satisfy final judgments,
if any, for plaintiffs in an existing Securities Litigation
against FNV Capital.

Finally, the Plan contemplates the issuance of Additional Group
Common Stock to:

      (a) the Berkadia Parties, in an amount that will constitute
5l% or a lesser amount as may be agreed by the Berkadia Parties,
of the outstanding equity of FNV Group on a Fully Diluted Basis
as of the Effective Date; and

      (b) satisfy any final judgment against FNV Group arising
from an existing Securities Litigation against FNV Group.

For all issuances of stock in connection with the Securities
Litigation described, holders of Allowed Claims will receive
stock having a value as determined by Final Order equal to the
amount of such Claims that is not covered by applicable
insurance policies. In the event that any Additional Group
Common Stock is issued after the Effective Date, the Berkadia
Parties will contemporaneously receive additional FNV Group
common stock in the amount that they would have received if such
issuances had occurred before the Effective Date.

Berkshire has guaranteed 90% and Leucadia has guaranteed 10% of
Berkadia's commitment to make the Berkadia Loan. Berkshire has
secondarily guaranteed the 10% of Berkadia's commitment to make
the Berkadia Loan that is guaranteed by Leucadia. FNV Group and
all of its direct and indirect subsidiaries (other than (x) FNV
Capital, and (y) any special purpose subsidiary that is
contractually prohibited as of February 26, 2001 from acting as
a guarantor) will guarantee repayment by FNV Capital of the
Berkadia Loan. The guarantees will be secured by substantially
all of the Guarantors' assets.

The New Senior Notes:

      (1) will be issued by FNV Group;

      (2) will mature 10 years after the Effective Date;

      (3) will bear interest, payable semi-annually out of
'available cash" (as defined in the New Senior Notes Indenture),
at the weighted average interest rate (as of a date within five
business days prior to the Effective Date) on FNV Capital's bank
and bond debt outstanding on the Petition Date; and

      (4) will be secured by a security interest in all of the
capital stock of FNV Capital, which security interest will be
junior to the first priority security interest in the stock of
FNV Capital to be granted to Berkadia to secure FNV Groups
guarantee of the Berkadia Loan.

The holders of the New Senior Notes will have no right to
enforce this security interest until the Berkadia Loan is paid
in full. Under the New Senior Notes, "available cash," will be
used for paying or funding a reserve to pay accrued interest on
the Berkadia Loan, paying taxes, operating and other corporate
expenses (including interest on and principal of permitted
indebtedness as defined in the New Senior Notes Indenture), and
providing for reserves and paying or funding a reserve to pay
interest on Group Subordinated Debentures during any Extension
Period (as defined in the New Senior Notes Indenture). After all
these, it will be used to pay accrued interest on the New Senior

Other than this payment, no payments of principal will be made
on the New Senior Notes until the Berkadia Loan is paid in full,
and until accrued interest on the Group Subordinated Debentures
has been paid.

However, beginning with the first calendar quarter following the
Effective Date, FNV Group will spend up to $75,000,000 per
quarter, solely from "available cash" as defined in the New
Senior Notes Indenture, to purchase New Senior Notes, through
tender offers, open market purchases and/or privately negotiated
transactions or otherwise, at a price not to exceed par plus
accrued and unpaid interest, so long as there exists no event of
default under the Berkadia Loan (including an event of default
that would be caused by the making of the quarterly repurchase).
The obligation to make the quarterly repurchases will survive
until the earlier of (i) payment in full of the Berkadia Loan
and (ii) fifth anniversary of the Effective Date.

If permitted by Berkadia, and subject to cash being available
for this purpose, FNV Group may, in its discretion, spend more
than $75,000,000 per quarter to purchase New Senior Notes in a
quarterly period, in which case such purchases would be applied
to satisfy FNV Group's obligation to purchase New Senior Notes
in future quarterly periods.

Each quarter, Reorganized FNV Group will first purchase New
Senior Notes from holders other than Berkshire, up to an
aggregate amount equal to the percentage of $75,000,000 that is
equal to the percentage of New Senior Notes held by holders
other than Berkshire, and then will purchase the remaining
percentage of $75,000,000 from Berkshire at a price equal to the
average price paid by Reorganized FNV Group in that quarter to
holders other than Berkshire. Purchases in excess of $75,000,000
per quarter will be made in a similar fashion. The board of
directors of Reorganized FNV Group will adopt other procedures
that neither prefer nor discriminate against Berkshire if
required to address any circumstances not addressed by this

After payment in full of the Berkadia Loan, making payments or
funding reserves required prior to making an interest payment on
the New Senior Notes, paying accrued interest on the New Senior
Notes, and paying or funding a reserve to pay accrued interest
on the Group Subordinated Debentures, 95% of the remaining
"available cash" will be used to make semi-annual prepayments of
principal on the New Senior Notes and 5% will be used for
distributions to and/or repurchases of stock from FNV Group
stockholders. The board of directors of Reorganized FNV Group
will adopt procedures in connection with any non-pro rata
purchase of FNV Group common stock neither to prefer nor to
discriminate against the Berkadia Parties in any such purchases.

After payment in full of the outstanding principal of the New
Senior Notes and payments to FNV Group common stockholders in an
aggregate amount equal to 5.263% of the aggregate principal
amount of New Sensor Notes issued pursuant to the Plan, 95% of
any "available cash" will be used to pay Contingent Interest to
holders of New Senior Notes in an aggregate amount of up to $100
million (reduced pro rata to reflect New Senior Notes
repurchased, but not New Senior Notes prepaid or repaid at
maturity, by FNV Group) and 5% of such remaining "available
cash' will be used for distributions to and/or repurchase of
stock from FNV Group stockholders. Contingent Interest payments
will terminate 15 years after the Effective Date.

Pursuant to a Management Services Agreement, which was entered
into prior to these Chapter 11 Cases, and which was amended and
restated on April 3, 2001, Leucadia is providing advice and
assistance during the bankruptcy cases related to the
restructuring and the Debtors' asset portfolio, subject to
oversight by the FNV Group Board of Directors or a special
committee of the Board and will provide management functions to
the Reorganized Debtors upon the effectiveness of the Plan.

The Plan contemplates that the Debtors' businesses will be
operated after the Effective Date under the Management Services
Agreement with Lencadia, pursuant to which Leucadia will
designate its employees to act as Chairman of the Board and
President of Reorganized FNV Group.

The Debtors' post-confirmation business plan does not
contemplate any new business activities related to new
customers. While other activities may be initiated or undertaken
in the future, the main objective of the Debtors' post-
confirmation business plan is to maximize the value of their
portfolio through the orderly liquidation of the portfolio over
time. (Finova Bankruptcy News, Issue No. 7; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

FRUIT OF THE LOOM: Selling Non-Operating Facilities & Equipment
Pursuant to 11 U.S.C. Sec. 363, Fruit of the Loom, Ltd. wants to
auction off and sell certain real estate and other equipment.
The auction is in accordance with Debtors' move to streamline
operations and rationalize capacity. Judge Walsh has already
authorized the retention of three auctioneers to perform the
sale. The non-operating real properties of Fruit of the Loom and
a brief description are given below:

      (a) Campbellsville, Kentucky, 1101 Greensburg Road; former
          textile facility, distribution center, parts and
          machinery repair; closed since 1998;

      (b) Frankfort, Kentucky, U.S. 421 South; former embroidery
          and screen-printing facility and distribution center;
          closed since April 2000;

      (c) York, South Carolina, #7 Ross Cannon Street; former
          yarn mill; closed since July 1999;

      (d) Winfield, Alabama, 135 Mallard Road; former yarn mill;
          closed since November, 2000;

      (e) Aliceville, Alabama, 315 Alabama Street SW; former yarn
          mill; closed since November, 2000;

      (f) Osceola, Arkansas, 1425 Ohlendorf Road; textile plant;
          closed since November, 2000;

      (g) Greenville, Mississippi, One Fruit of the Loom Drive;
          former textile plant; closed since November 2000;

      (h) Jackson, Mississippi, 4350 Industrial Drive; former
          distribution center; closed since June 2000;

      (i) Jacksonville, Alabama, 404 Alexandria Road SW; former
          distribution center; closed since January/February

Union Underwear already filed a motion requesting the
authorization of the sale of its facility in Bowling Green,
Kentucky, mentioned above.

Except for the Jacksonville, Alabama facility, which Union
Underwear closed during the last month, the real properties have
been idle between 6 months and 2.5 years. During such periods,
Union has actively marketed each of the properties through asset
management consultants, Corporate Asset Advisors. Union also
listed two properties with industrial real property agents. In
each instance, the efforts did not yield any purchase offers
that constituted adequate value.

Union estimates that the aggregate annual holding costs
associated with the properties are $5,500,000. These costs
include minimal utility services, property taxes, site security
and insurance. Holding the facilities through the typical
marketing period for industrial property, estimated to be 18-24
months, may cost the estates approximately $7,500,000 to
$11,000,000. However, in light of previous unsuccessful
marketing efforts, which included a traditional sales approach,
there is no assurance that sales transactions would ultimately
be concluded.

Union states that there is sound business justification for the
auction and it is a reasonable business judgment. The sale is
fair and reasonable and the purchaser is proceeding in good
faith. The sale is in the best interests of creditors and the
estates. Union requests that the sale be free and clear of all
liens, claims, interests and encumbrances. (Fruit of the Loom
Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

FUSION NETWORKS: Initiates Assignment for Benefit of Creditors
Fusion Networks Holdings, Inc. (Pink Sheets:FUSN) and its wholly
owned subsidiary, Fusion Networks, Inc. announced that each
filed separate actions in Florida state court to assign their
respective assets for the benefit of their respective creditors
under Chapter 727, Florida Statutes.

GOLDEN STAR: Shareholders To Convene In Toronto On June 27
The Annual General and Special Meeting of Shareholders of Golden
Star Resources Ltd. will be held at 10:00 am (Toronto time) on
Wednesday, June 27, 2001, in the Calvin Room of the Ontario
Club, 30 Wellington Street West, Toronto, Ontario, Canada for
the following purposes:

      (1) to receive the report of the directors to the
shareholders and the consolidated financial statements of the
Company, together with the auditor's report thereon, for the
fiscal year ended December 31, 2000;

      (2) to elect directors until the next annual general

      (3) to appoint PricewaterhouseCoopers, Chartered
Accountants, as auditor to hold office until the next annual
general meeting at a remuneration to be fixed by the directors;

      (4) to approve the issuance of 3,000,000 common shares to
Anvil Mining NL, subject to all necessary regulatory approvals;

      (5) to approve in advance the issuance of a number of
common shares of the Company, by virtue of exemptions from
registration and prospectus requirements under applicable
securities legislation and transactions which may not be fully
marketed public offerings, that may exceed 25% of the Company's
issued and outstanding common shares, subject to all necessary
regulatory approvals;

      (6) to transact such other business as may properly come
before the meeting or any adjournment of it.

The Board of Directors has fixed the close of business on May 9,
2001, as the record date for the determination of shareholders
entitled to notice of and to vote at the meeting and at any
adjournment thereof.

GROVE WORLDWIDE: Chapter 11 Case Summary
Debtor: Grove Worldwide LLC
         PO Box 21
         Shady Grove, PA 17256

Chapter 11 Petition Date: May 07, 2001

Court: Middle District of Pennsylvania

Bankruptcy Case No.: 101-02611

Judge: Robert J. Woodside

Debtor's Counsel: Alan J. Carr, Esq.
                   Jay M. Fay Goffman, Esq.
                   4 Times Square
                   New York, NY 10036-6522
                   (212) 735-3000

                   Dino A. Ross, Esq.
                   213 Market St. PO Box 11844
                   Harrisburg, PA 17108
                   (717) 234-5988

GROVE WORLDWIDE: S&P Slashes Credit Ratings To 'D'
Standard & Poor's lowered its ratings on Grove Holdings
LLC/Grove Holdings Capital Inc. and Grove Worldwide LLC/Grove
Capital Inc. to 'D' (see list below). All ratings were removed
from CreditWatch, where they were placed on Feb. 20, 2001. Total
debt as of Dec. 30, 2000, was about $524 million.

The rating actions follow Grove Worldwide's filing of voluntary
petitions for reorganization under Chapter 11 of the U.S.
Bankruptcy Code. Grove has reached an agreement with its secured
lender bank group and is actively negotiating with its senior
bondholders on a financial restructuring of the company. Under
the terms of the proposed plan, members of the bank group
will be issued $125 million in promissory notes, $45 million in
debentures, and 75% of the common stock in a reorganized Grove.
Holders of the company's senior subordinated debentures will
receive 20% of the new common stock and warrants to purchase an
additional 10%. Interests of the holders of senior discount
notes will be cancelled. The company expects to achieve plan
confirmation and complete the reorganization within a matter of

Grove manufactures mobile hydraulic cranes, aerial work
platforms, and truck-mounted cranes. The company has reported
poor operating results during the past few years, which led to
high financial leverage and severely constrained liquidity.
Grove reported a $110 million net loss in fiscal 2000 and a $32
million net loss in fiscal 1999. The 2000 loss includes a $53
million goodwill impairment charge. In the first quarter of
fiscal 2001, EBITDA interest expense coverage was only 0.5 times
(x), and total debt to EBITDA was more than 10x on a last 12
months basis.

The company's 1999 operating performance was adversely affected
by difficulties in implementing an enterprisewide software
system, heightened competition as key competitors introduced new
products, and declining prices. Although sales increased in
2000, the company's operating performance weakened, primarily
due to heavy losses in its Manlift division, which reported
negative operating income of $22 million in fiscal 2000. Manlift
has lost market share due to its relatively weak position with
national rental equipment firms, which have become the dominant
purchasers of aerial work platforms. In addition, Manlift lacks
the scale of several of its larger competitors and has suffered
from a declining price environment. Grove has reduced the
operations of the unit.

Ratings Lowered And Removed From CreditWatch

                                       TO       FROM
Grove Holdings LLC/
Grove Holdings Capital Inc.
      Corporate credit rating          D        CCC+
      Senior unsecured debt            D        CCC-

Grove Worldwide LLC/
Grove Capital Inc.
      Corporate credit rating          D        CCC+
      Senior secured bank loan rating  D        CCC+
      Subordinated debt                D        CCC-

HARNISCHFEGER: Identifies Members Of Advisory Committee
As reported, on the Effective Date of Harnischfeger Industries,
Inc.'s chapter 11 plan, Beloit Corporation and the Liquidating
Trust shall be deemed to have executed the Plan Administrator
Agreement among them and the Plan Administrator. The Plan
Administrator will be authorized to act as a representative of
each Liquidating Debtor's estate, except as directed by the
Advisory Committee. The Plan Administrator Agreement describes
the rights, duties, and obligations of the Plan Administrator
and the Advisory Committee.

The Advisory Committee will consist of a representative of New
HII and of other representatives of Holders of Claims against
one or more Liquidating Debtors (Beloit Representatives).

The Debtors have identified the members of the Advisory
Committee as follows:

(A) Beloit Representatives

          John Hopp
          Franklin High Yield Tax-Free Income
          777 Mariners Island Boulevard
          San Mateo, CA 94404

          Charles Germain
          Rockwell International Corporation
          1201 S. Second Street
          Milwaukee, WI 53204

          Pamela A. Mull
          Potlatch Corporation
          601 West Riverside Avenue, Suite 1100
          Spokane, WA 99210

          Walzen Irle GmbH
          Attn: Tanya K. Dietrich
          Walzen Irle GmbH
          Postbox 31 61 D-57244

          M. Bruce Daiger
          SunTrust Bank
          225 East Robinson Street
          Suite 250
          Orlando, FL 32801

          Robert Morrish
          US Bancorp Libra
          11766 Wilshire Boulevard, Suite 870
          Los Angeles, CA 90025

          Nick Agopian
          3999 Cote Vertu
          Montreal (Quebec)
          CANADA H4R IR2

(B) HII Representative

     Kenneth A. Hiltz, the Senior Vice-President and Chief
Financial Officer of HII, will serve as the HII Representative
on the Advisory Committee on and after the Effective Date.
(Harnischfeger Bankruptcy News, Issue No. 42; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

IGI INC: Names Earl Lewis As New Chairman of the Board
On April 20, 2001, the Board of Directors of IGI, Inc.
designated director Earl R. Lewis as Chairman of the Board of
Directors. The Board also elected the Company's President, John
Ambrose, to be Chief Executive Officer of the Company.

IMPERIAL CREDIT: Starts 12% Senior Note Exchange Offer Today
Imperial Credit Industries, Inc. (Nasdaq: ICII) announced that
today, May 10, 2001, it will commence an offer to exchange all
of its outstanding senior notes, including securities issued
by a related trust, (the "Old Notes") for a combination of newly
issued 12% Senior Secured Notes due June 30, 2005, shares of
ICII Common Stock and warrants to purchase additional shares of
ICII Common Stock in the amount and manner set forth in the
Exchange Circular and Consent Solicitation to be distributed to
all registered holders.  The issuance and sale of Senior Secured
Notes will be made pursuant to an exemption from registration
under the Securities Act of 1933, as amended.

H. Wayne Snavely, ICII's Chairman, President and Chief Executive
Officer, stated: "The Exchange Offer represents the second phase
of our recapitalization plan, announced this past February.  The
exchange will reduce the amount of holding company debt and
assist the efforts of ICII to increase capital levels of its
principal subsidiary, Southern Pacific Bank."

Concurrently with the Exchange Offer, the Company is also
soliciting consents from the holders of certain of the Old
Notes to proposed amendments to the indentures under which the
Old Notes were issued.

The Exchange Offer and Consent Solicitation will expire at 5:00
P.M. New York City time on June 22, 2001 unless extended.

Each holder exchanging Old Notes in the Exchange Offer will
receive, in exchange for each $1,000 in aggregate principal or
liquidation amount of Old Notes exchanged: (i) Exchange Notes in
a principal amount equal to (a) the principal or liquidation
amount of Old Notes tendered multiplied by (b) the applicable
Old Note exchange multiple (as described below); (ii) 13.684163
shares of Common Stock for each $1,000 in aggregate principal
amount of Exchange Notes received in the Exchange Offer; and
(iii) Warrants to purchase, at a price of $2.15 per share,
47.894572 shares of Common Stock for each $1,000 in aggregate
principal amount of Exchange Notes received in the Exchange
Offer.  Exchange Notes will only be issued in denominations of
$1,000 or integral multiples thereof.  Any fractional portion of
Exchange Notes that would otherwise be issuable will be paid in
cash on the exchange date.  All calculations will be made in
accordance with standard market practice.

     --  The exchange multiple for the 9.75% Senior Notes due
         January 15, 2004 will be equal to .50.

     --  The exchange multiple for the 9.875% Series B Senior
         Notes due January 15, 2007 will be equal to .65.

     --  The exchange multiple for the 10.25% Remarketed
         Redeemable Par Securities ("ROPES") will be equal to

ICII will accept for exchange any and all Old Notes validly
tendered and not withdrawn prior to the expiration date. Old
Notes may be tendered only in multiples of $1,000 of principal
or liquidation amount.  The consummation of the Exchange Offer
is conditioned upon ICII obtaining the consent of its
shareholders (or its determination that such consent is not
necessary) to certain elements of the transactions contemplated
by the recapitalization plan ICII has previously adopted, and is
subject to certain other customary conditions.

The Exchange Notes will bear interest at the rate of 12% per
annum from and including the exchange date.  Holders of Old
Notes accepted for exchange will receive the amount of interest
accrued on the Old Notes to but not including the exchange date.

IMPERIAL SUGAR: Creditors Seek Order Disbanding Equity Committee
The Official Committee of Unsecured Creditors in Imperial Sugar
Company's chapter 11 cases informed Judge Robinson that it had
been opposed to the idea of an equity committee and had even
written the US Trustee not to appoint one citing various reasons
why the appointment of an equity committee would be unnecessary
and inappropriate. The Creditors' Committee added that the
Debtors had even made a similar request to the US Trustee. By
and through David M. Fournier, at Pepper Hamilton LLP, in
Delaware, the Creditors' Committee asked the Court to direct the
US Trustee to disband the Official Equity Security Holders
Committee, arguing that, while an equity committee may be
appointed by the US Trustee if necessary to assure adequate
protection, the Bankruptcy Code affords no test of adequacy of
representation and leaves the Court with the discretion to
determine if additional committees are warranted.

Mr. Fournier asserted that the Debtors are insolvent and their
stockholders are simply too far out of the money to be entitled
to official committee representation. Based upon the Debtors'
financial situation, it is clear that the equity holders would
not be entitled to receive anything unless each creditor class
is paid in full, which under the proposed reorganization plan
they are not. As a result, the equity holders are not entitled
to receive any distribution in the bankruptcy cases and any
distribution to them allowed under the plan would essentially be
a gift.

The Creditors' Committee insisted that time is another critical
factor bearing on whether it is appropriate to appoint a
committee. It submitted that a formation of an equity committee
after a reorganization plan has been filed is inappropriate and
can often cause delay and disruption in the reorganization
process. Since the primary function of a committee is to
negotiate a reorganization plan, the Equity Committee is
unnecessary considering that a plan has already been filed.
The Creditors' Committee continued that, since 25% of the equity
holders participated in the plan's formulation, the equity
holders' concerns were adequately represented and addressed.

Mr. Fournier warned the Court that the Equity Committee's
continued existence will result in substantial additional costs
and considerable financial drain on the Debtors' estates as well
as significant delay in the Debtors' reorganization process. He
supports this assertion by pointing out to Judge Robinson that
the Equity Committee has already filed applications seeking the
appointment of two sets of counsel, and has advised the Debtors
and the Creditors' Committee that the Equity Committee intends
to retain E&Y Capital Advisors as financial advisors. The
administrative burden associated with the Equity Committee
simply outweighs any concern for equity representation in the
Debtors' cases. The fact that the Equity Committee has presented
the Debtors with a lengthy and detailed information request list
and questions, is a perfect example of how the existence of an
equity committee also will require additional time and resources
dedicated by the Debtors, the Creditors' Committee and their
professionals toward educating and involving that committee in
all matters in the Debtors' bankruptcy cases.

                The Equity Committee's Response

The Official Committee of Equity Security Holders responded to
the Motion, asking it be denied. The Trustee has exercised her
discretion to appoint the Committee, and the Committee said that
under the plain language of the statute and its legislative
history, that decision is not reviewable as a matter of law.

Even if the Trustee's decision could be reviewed by a court, it
could only be under an abuse of discretion standard. Under that
standard, the Trustee's decision is appropriate. The Committee
pointed out that the Debtors' equity securities are widely held
and actively traded, these bankruptcy cases are large and
complex, and the appointment of the Equity Committee was not
made either prematurely or too late. Citing the Debtors' balance
sheet and its proposed plan, the Committee said both show that
there is a prospect of value for the equity holders.

The Debtors' insider management shareholders cannot adequately
represent the interests of the shareholders in general because
they will receive consideration in the form of stock options and
retention bonuses in excess of the consideration they propose to
provide to the Debtors' other shareholders.

Calling the Creditors' Committee's Motion only a "tactic to
impede and distract the Equity Committee", undertaken to prevent
it from carrying out its fiduciary duties in this case, and to
create a premature confirmation hearing on the ultimate issues
of value before relevant facts have been disclosed and analyzed,
the Equity Committee asked that the Motion be denied in its

                The United States Trustee Responds

Patricia A. Staiano, the United States Trustee for Region 3,
joined the Equity Committee in asking that the Creditors'
Committee's Motion to disband be denied. She stated that in
February 2001 she received three written requests for an equity
committee, setting forth reasons why the requesting parties
believed that the Debtors' management - despite the management's
own significant equity interests in the Debtors -- was not
representing and would not represent the interests of non-
management shareholders. After receiving these requests, the
Trustee reviewed the Debtors' plan and disclosure statement, SEC
filings, and audited financial statements. From this analysis,
the Trustee concluded that:

      (1) The Debtors' equity securities are widely held.
Approximately 32.4 million shares of outstanding publicly traded
stock are held by approximately 3,182 shareholders of record.
Information as to the specific number of beneficial owners is
not readily available because many shares are held in "street"

      (2) The Debtors' audited financial statements were prepared
based on a "going concern" method, and acknowledge the
negotiations between the Debtors and their creditors concerning
reorganization and a possible debt-to-equity conversion. These
statements indicated that the Debtors had a going-concern value
of $318.6 million.

      (3) Under the prospective plan the Debtors will cancel all
existing common stock and issue up to 10 million shares of stock
in the reorganized debtors to unsecured creditors on a pro rata
basis. The Debtors' management, who negotiated this plan without
input from the non-management shareholders, will receive options
to purchase approximately 1.25 million shares of the stock of
the reorganized Debtors at a as-yet-undisclosed strike price.
These management options are over and above any retention plan
payments, bonus payments, and severance payments that management
is already slated to receive, and over and above any
distribution that management personnel will receive on account
of their equity interests. If they vote as a class in favor of
the plan, existing equity security holders, including the
Debtors' management, will receive 200,000 shares of the
reorganized Debtors, plus warrants to purchase approximately 1.1
million shares of stock, again at a yet-undisclosed price.

At the conclusion of this review, the Trustee determined that
appointment of an equity committee was appropriate, and
following an accelerated identification, poll and solicitation,
appointed the existing committee.

The Trustee argued to Judge Robinson that her decision to
appoint the equity committee was within her discretion, and that
discretion should not be disturbed. The principal purpose of any
committee is to serve as an advocate and fiduciary for the
members of the committee's class or interests from which it is
selected. Legislative history of the Bankruptcy Code states
these committees are to be the primary negotiating bodies for
the formulation of a plan. Even though the Equity Committee was
appointed after a plan was filed, this case has moved quickly so
that the appointment was neither premature nor late. The
Creditors' Committee suggestion that a committee may never be
appointed after the filing of a plan "overstates" existing case
law, which does not establish any per se rule.

Finally, the Trustee stated that her decision is either
unreviewable, or is subject to review only for an abuse of
discretion. Her decision to appoint the Equity Committee
reflects her balancing of facts and exercise of her
Congressionally granted discretion. The Trustee therefore asked
that the Motion be denied. (Imperial Sugar Bankruptcy News,
Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900)

KOMAG INCORPORATED: Posts $51 Million Net Loss in Q1 2001
Komag, Incorporated (Nasdaq: KMAG), the largest independent
producer of media for disk drives, announced its financial
results for the first fiscal quarter of 2001.

As a result of a widespread slowdown in demand, especially in
the server segment of the data storage industry, net sales for
the first fiscal quarter of 2001 totaled $87.9 million, down 21%
from $111.2 million recorded in the fourth quarter of 2000. The
company's net loss for the first quarter of 2001 was $51.0
million, or $0.46 per share based on 111.6 million weighted
average shares outstanding, compared to a loss of $43.7 million,
or $0.40 per share based on 110.0 million weighted average
shares outstanding, in the fourth quarter of 2000.

Komag shipped 12.7 million disks during the first quarter of
2001, in line with the company's earlier forecast announced
earlier. During the first quarter of 2001, Komag also shipped
3.4 million nickel plated and polished ("NPP") substrates. First
quarter disk production was approximately 13.7 million units,
81% of which were made in the company's Malaysian factories.
First quarter average selling price for finished disks was $6.30
per disk compared with $6.40 in the fourth quarter of 2000. The
quarter-over-quarter decline of less than 2% was in line with
the company's expectation of relatively flat pricing stated in a
previous press release. Sales to Maxtor, Seagate and Western
Digital were 36%, 12%, and 46% of revenue, respectively.

Komag ended the quarter with a cash and short term investment
balance of $51.6 million. The decline from last quarter of $29.1
million was in line with the company's expectations. It resulted
from operating the company's U.S. factories at low utilization,
the continued cost of moving manufacturing equipment to Malaysia
to prepare for the cessation of U.S. manufacturing, a scheduled
payment of $7.5 million to reduce senior debt, and the $6.6
million semiannual interest payment on the HMT convertible
bonds. Earnings before interest, taxes, depreciation and
amortization, were a negative $3.3 million. The company expects
this measure of performance to improve substantially as Komag
completes its planned relocation of all U.S. manufacturing
operations to Malaysia. Komag's ending accounts receivable
balance improved to 30 days of sales outstanding compared with
33 days in the fourth quarter of 2000. Inventory turns declined
from 21 to 12 annualized turns due to changes in timing of
customer demand for disks in the first quarter.

Komag expects shipments for the second quarter of 2001 to be
approximately 14 million disks, up 10% from the first quarter,
and average selling prices to remain flat. The company currently
expects further modest increases in unit shipments with
continued flat pricing in the second half of 2001. Sales of NPP
substrates are expected to decline in the second quarter.

Komag's announced strategy has been to locate 100% of its
production capacity in Malaysia to achieve low manufacturing
costs. The company ceased manufacturing at its facilities
located in Fremont and Santa Rosa, California and Eugene, Oregon
within the last ten days. These closures are ahead of schedule,
accelerating the timing of expected cost savings. The three
production lines that have been moved to Malaysia already are
fully qualified and are producing disks at high yields.

"Now that all of our production comes from our Malaysian
facilities, our U.S. presence will be focused on research and
development. Our R&D team in San Jose will continue to develop
finished media and substrate development efforts will remain in
Santa Rosa," said T.H. Tan, Komag's chief executive officer.

By shifting all manufacturing offshore to Malaysia, Komag
expects to significantly reduce the cost of production. The
company's business model anticipates that fixed manufacturing
costs, including employee, factory and equipment expenses, will
be around $35 million per quarter compared with $52 million in
the first quarter of 2001. The variable cost of producing a disk
is approximately $2.70 to $2.80 per disk. "Our low cost
structure is a significant competitive advantage and will be
instrumental in returning the company to profitability. We are
moving Komag to the next phase. In spite of the current weakness
in demand, closing our U.S. manufacturing ahead of schedule
places us on track for a much healthier business in the second
half of this year," stated Mr. Tan.

Komag's technology continues to provide leading edge products to
disk drive customers. Currently the company is the only fully
qualified source shipping volume quantities of 30 gigabyte
("GB") per platter disks in the industry. These are the highest
storage density disks available in the market today. The company
continues to be on schedule in qualifications of 40 GB and 60 GB
per disk programs and is providing synthetic antiferromagnetic
(SAF) and perpendicular recording media samples for advanced
technology evaluations. The company is also engaged in
qualification of its low cost glass substrates and media.

On April 5, 2001 Komag filed a registration statement for a
proposed exchange offer to exchange the company's existing
convertible bonds for new convertible bonds. The proposed
exchange offer is part of a comprehensive restructuring plan
that also includes proposed new debt financing from Malaysian
sources and proposed use of cash proceeds and new convertible
bonds to settle the company's existing senior debt and a note
held by Western Digital Corporation. The registration statement
includes a more detailed description of the company's plan.
Komag expects to commence the exchange offer as soon as
practical. Currently, none of the parts of the restructuring
plan has been completed, and the terms are subject to change.

                       ABOUT KOMAG:

Founded in 1983, Komag completed a merger with HMT Technology
Corporation in October 2000. The combined company is the world's
largest independent supplier of thin-film disks, the primary
high-capacity storage medium for digital data in computers and
consumer appliances. Komag's advanced development capability and
high-volume, low-cost manufacturing expertise provide high
quality, leading-edge disk products at a low overall cost to its
customers. These attributes enable Komag to partner with
customers in the execution of their time-to-market design and
time-to-volume manufacturing strategies. Supplementing its core
disk business, Komag has launched a diversification program that
will leverage the company's knowledge of magnetic recording and
its ultra-high precision manufacturing capabilities.

LERNOUT & HAUSPIE: Court Establishes June 11 Claims Bar Date
Lernout & Hauspie Speech Products N.V. and Dictaphone Corp.
asked that Judge Wizmur establish June 11, 2001, at 4:00 p.m.
Eastern Time as the final date for all parties to file proofs
of claim asserting a claim against any of the Debtors that arose
prior to the commencement of these Chapter 11 cases. Judge
Wizmur is also asked to establish the later of (a) the bar date,
or (b) 30 days after the entry of any order authorizing a member
of the Debtors to reject an executory contract or unexpired
lease as the date on or before which a proof of claim relating
to the Debtor and arising from the rejection of the executory
contract or unexpired lease must be filed. The Debtors also
asked Judge Wizmur to establish the later of (a) the bar date,
or (b) 30 days after an entity is served with notice that the
Debtors have amended their Schedules to reduce the undisputed,
noncontingent, and liquidated amount, or to change the nature or
classification of a scheduled claim, as the date on or before
which a proof of claim relating to the amended scheduled claim
must be filed.

Certain groups need not meet this deadline:

      (a) Governmental units holding claims against any Debtor,
whether arising from prepetition tax years or periods of
prepetition transactions to which a Debtor was a party;

      (b) Entities whose claims against a member of the Debtors
arise out of the obligations of the entities under a contract
for the provision of liability insurance to the Debtor;

      (c) Entities who asserted a claim against L&H in
conjunction with its concordat proceeding in the Ieper, Belgium,
Commercial Court, and which filed a declaration of receivables
with the Ieper Commercial Court; and

      (d) Entities whose claims against a member of the Debtors
arise from or relate to the purchase or sale of a security
issued by the Debtor or an affiliate of the Debtor, including,
but not limited to, claims:

          (i) For rescission of a purchase or sale of a security
              of such Debtor;

         (ii) For damages arising from the purchase or sale of
              such a security; or

        (iii) For indemnification, reimbursement or contribution
              (or fees and costs in connection therewith) arising
              from or related to such a claim.

Other entities need not file any proof of claim against the
Debtors. These are:

      (a) Any entity that already has properly filed with the
Court a proof of claim against the Debtor or any one of them;

      (b) Any entity (i) whose claims against the Debtor or any
one of them is not listed as "disputed", "contingent", or
"unliquidated" in the Schedules for the Debtor against which the
claim is made, and (ii) who agrees with the nature,
classification and amount of the claims set out in the Schedules
and the identification of the Debtor liable for the claim;

      (c) Any entity whose claims against the Debtor have been
allowed by, or paid pursuant to, an order of this Court;

      (d) Any entity whose claim is limited exclusively to a
claim for the repayment by the applicable Debtor of principal
and interest on or under any of the 11-3/4% Senior Subordinated
Notes Due 2005 issued by Dictaphone, the 8% Convertible
Subordinated Notes Due 2001 issued by L&H, and the 4.75%
Convertible Junior Subordinated Debentures Due 2008 issued by
L&H, or the indenture in respect to each of the Notes, and each
such Indenture collectively with the Notes issued thereunder;
provided that this exclusion does not apply to the indenture
trustees under each such indenture. Each Indenture Trustee is
required to file a proof of claim on account of the applicable
debt claims on or under the applicable debt instruments for
which it is the Indenture Trustee on or before the bar date.
Each Indenture Trustee and any holder of Notes that wishes to
assert a claim arising out of or relating to a debt instrument,
other than a debt claim, is required to file a proof of claim on
or before the bar date, unless another of these exceptions

      (e) Any debtor in these Chapter 11 cases, or a wholly-owned
non-debtor subsidiary of any Debtor, having any claims against
any debtor in these Chapter 11 cases; and

      (f) Any entity owning or holding equity securities of a
Debtor asserting a claim solely on account of the holder's
ownership interest in or possession of the stock or equity
securities, other than those to which another exclusion or
exception is applicable.

In support of this request the Debtors told Judge Wizmur that
establishing filing deadlines for proofs of claim is necessary
to allow them to develop their plan. To develop that plan the
Debtors need complete and accurate information regarding the
nature, amount and status of all prepetition claims against each
member of the Debtors that will be asserted in these Chapter 11
cases. A prerequisite to developing a long-term business plan,
and ultimately a plan of reorganization, is the Debtors' ability
to prepare comprehensive and accurate estimates of the aggregate
amounts of claims held against each member of the Debtors.

By Order Judge Wizmur has set the bar date as requested by the
Debtors in their Motion. (L&H/Dictaphone Bankruptcy News, Issue
No. 7; Bankruptcy Creditors' Service, Inc., 609/392-0900)

LOEWEN GROUP: Canadian Pref'd Shareholders Object To Joint Plan
The Canadian Preferred Shareholders (Deutsche Bank Canada,
Sunrise LLC, and Amaranth Fund LLP) has interposed an objection
to The Loewen Group, Inc.'s Joint Plan complaining about:

(1) Change in Structure and Transfer of Assets

     The objectors pointed out that:

     -- the Plan will change the corporate structure of TLGI and
        its subsidiaries;

     -- under the Plan, TLGI will transfer substantially all of
        its assets from Canada to the United States by
        transferring them to LGII or subsidiaries of LGII;

     -- the existing stock of LGII owned by TLGI in turn will be
        cancelled, and the stock of reorganized LGII will be
        issued to its existing U.S. creditors;

     -- the Plan involves stripping all the Canadian assets and
        sending them to the United States to pay United States
        creditors of TLGI's current U.S. subsidiary, LGII;

     -- TLGI will become a worthless shell and the Canadian
        Preferred Shareholders, in turn, will receive nothing
        under the Plan, but will retain their ownership interest
        in the shell that TLGI will become.

(2) Treatment of The Nafta Claims In Contrast to That of CTA

     The objectors debunked that the Nafta Claims (the claims and
causes of action asserted by TLGI in the pending arbitration
matter entitled The Loewen Group, Inc. and Raymond L. Loewen v.
the United States of America, ICSID Case No. ARB (AF) /98/3) are
among the assets to be stripped out of TLGI and transferred to
reorganized LGII (or subsidiaries of LGII).

What the objectors see in the treatment of the Nafta Claims
under the Plan is that these will end up owned either by LGII
directly or by Nafcanco, a wholly-owned subsidiary of
reorganized LGII, with 25% of the "Nafta Net Proceeds" diverted
to the Liquidating Trust, where they are split up among the
holders of the O'Keefe Note (who got the judgment in the first
place that gives rise to the Nafta Claims) and other unsecured
U.S. creditors of existing LGII.

The Objectors also pointed out that, as defined in the Plan, the
"Nafta Net Proceeds" are the recoveries from the Nafta Claims
left to TLGI after splitting the net recovery with Raymond
Loewen, TLGI's principal common shareholder, pursuant to the
Nafta Arbitration Agreement. The Disclosure Statement alludes to
an agreement between Raymond Loewen and TLGI, defined as the
Nafta Arbitration Agreement, and described as a letter agreement
dated May 27, 1999, between TLGI and Raymond Loewen "to
apportion any recoveries obtained pursuant to binding
arbitration..." and to reimburse Mr. Loewen for certain legal
expenses in connection with the Nafta Claims. The objectors have
big question marks about this treatment, and they wonder why a
copy of the alluded letter agreement is not attached to the
Disclosure Statement.

The objectors also noted that the Plan says that the only unpaid
creditors of TLGI are the holders of "CTA Note Claims" who will
receive new notes and stock of reorganized LGII that pay at
least 68% of their claim under the Plan. These payments are also
tendered in full discharge and satisfaction of the Canadian
guaranties that the holders of the CTA Notes hold from TLGI of
the CTA debt, the objectors steered Judge Walsh's attention to
this part of the Plan.

The objectors contended that the Plan as proposed by the Debtors
should not be confirmed because the Plan conveys to creditors of
LGII that are not creditors of TLGI assets of TLGI of
substantial and significant value to which the Canadian
Preferred Shareholders are entitled. No substantive
consolidation has been ordered or found to be justified in this
case, the objectors reminded Judge Walsh, and the Bankruptcy
Code does not authorize the taking of the assets of a
corporation to pay the creditors of another affiliated corporate
entity. Therefore, the plan does not comply with the applicable
provisions of Title 11 and may not be confirmed pursuant to 11
U.S.C. 1129(a)(l), the objectors contended.

The Canadian Preferred Shareholders further objected to the Plan
conveying to or for the benefit of creditors assets of TLGI in
excess of the value of all the creditor claims against it, to
which value the Canadian Preferred Shareholders are entitled.

Specifically, the objectors noted that according to the
Disclosure Statement, the CTA Note Claims aggregate $2.04
billion and are paid 68 cents on the dollar under the Plan,
leaving no more than $650 million to be paid by TLGI on the
Series 5 Notes and its downstream guaranties of the CTA Note

The objectors further accused that, as the face value of the
Nafta Claims is in excess of $125,000,000, without even taking
into consideration the value of other TLGI assets in addition to
the Nafta Claims that are being conveyed out of TLGI to pay LGII
creditors, over US$75,000,000, or approximately Can $l17.2
million, that could potentially be available for the Canadian
Preferred Shareholders is being conveyed to LGII creditors.

By leaving intact the Nafta Arbitration Agreement, the Plan
conveys assets of TLGI to common shareholders that are
subordinate to the Canadian Preferred Shareholders in violation
of the absolute priority rule, the objectors charged.

Thus, the Plan is not fair and equitable within the meaning of
11 U.S.C. 1129(b)(2)(C)(i) with respect to the treatment of the
Canadian Preferred Shareholders of TLGI, the objectors told
Judge Walsh. (Loewen Bankruptcy News, Issue No. 37; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

LUCENT TECHNOLOGIES: CFO Shuffle Spooks Investors
Shares of Lucent Technologies Inc. fell more than 5% Monday
after the struggling telecommunications-equipment maker spooked
investors by firing its chief financial officer, Deborah
Hopkins, according to Reuters. The move brought up more
questions about the company's restructuring process and market
rumors that it may file for bankruptcy. On Sunday, Lucent fired
Hopkins, the high-profile executive it nabbed from Boeing Co.
just a year ago, and tapped company insider Frank D'Amelio as
her replacement to oversee its restructuring. Analysts and
investors doubted that Hopkins' removal would derail the Murray
Hill, N.J.-based company's recovery efforts. They said that
Lucent's problems began before Hopkins' arrival and that its
recovery efforts will depend on more than just one executive.
(ABI World, May 8, 2001)

LUZON SERVICES: Files Chapter 11 Petition in Oregon
Struggling fast food chain Luzon Services Inc. of Salem filed
for Chapter 11 bankruptcy protection from creditors. Stephen
Caroll of Eugene, the company's bankruptcy lawyer, disclosed
that the company has fallen behind on mortgage and other
payments for its eight restaurants and needs the protection in
order to restructure its debt, The Register-Guard reported.

Mr. Caroll related that the company is also considering selling
some of its stores, but nothing is quite definite yet. For now,
its 70 employees continue to be paid and the company's eight
outlets remain in business, Mr. Carroll said.

Owned by Luzviminda and Frank McKitrick of Salem, the company
reportedly has assets of $4.2 million and liabilities of $4
million. The biggest creditor is Bend-based Bank of the
Cascades, which is owed $2.8 million, most of it in the form of
mortgages on the company's stores in Lane, Marion and Deschutes
counties. Mr. Caroll said the company has fallen behind on the
loan payments but recently reached an agreement with the bank to
keep operating, according to The Register-Guard. Other creditors
include Margaret Houck of Salem, who has a $102,000 mortgage
claim against one of the company's two eateries in Salem, and
WRH Inc. of Bend, which has a $285,000 mortgage claim against
all of Luzon's properties.  Among food vendors, Sysco Food
Services was listed as being owed $82,819.

Luzon also reportedly fell behind on property tax payments in
Lane, Marion and Deschutes counties for a combined $69,654.
(The Register-Guard, May 7, 2001)

LUZON SERVICES: Chapter 11 Case Summary
Debtor: Luzon Services, Inc.
         a.k.a. Bob's Burger Express
         3379 Hawthorne NE
         Salem, OR 97303

Chapter 11 Petition Date: May 02, 2001

Court: District of Oregon

Bankruptcy Case No.: 01-63389

Judge: Albert E. Radcliffe

Debtor's Counsel: L E Ashcroft, Esq.
                   117 Commercial St NE #300
                   Salem, OR 97301

                   Stephen C.P. Carroll, Esq.
                   800 Willamete St #700
                   Eugene, OR 97401-1758

MARINER: Wants To Assume ACMS Sublease For California Facility
Mariner Post-Acute Network, Inc. and American-Cal Medical
services, Inc. (ACMS) seek to exercise the renewal option of a
sublease under which ACMS is the sublessee and Santa Monica
Rental Company is the subleasor pertaining to a facility that
has a proven track record of profitability as well as projected
profitability. The Facility, located at 1320 20th Street, Santa
Monica, California, is well-positioned competitively, has a
solid reputation in its local market, and has strong
relationships with key referral and payor sources.

Pursuant to an assignment of Thousand Oaks Convalarium's
leasehold interests, ACMS and SMRC are parties to the sublease
which commenced on November 1, 1961. Pursuant to the exercise of
the first twenty-year renewal option, it is currently set to
expire on October 31, 2001, subject to second twenty-year
renewal option without rental escalators. The only default of
which the Debtors are aware consists of uppaid real property
taxes in the amount of $8,338.59 plus interest and penalties,
occasioned by the timing of the filing of the Debtors' chapter
11 petitions.

The Debtors explained that the Motion has been filed at this
time because

      (a) by its letter of March 14, 2001, SMRC disputed the
validity of the exercise of the option, terming it a
"conditional exercise" not authorized under the terms of the
Sublease, and

      (b) the Debtors are now prepared to assume the Sublease as
extended by the Renewal.

By Motion, the Debtors seek to eliminate any ambiguity regarding
their continuing interest in the Sublease by the entry of an
order, pursuant to sections 105, 363 and 365 of the Bankruptcy
Code and Bankruptcy Rules 6004 and 6005.

Specifically, the Debtors seek an order by the Court:

      (1) confirming and approving the timely exercise of ACMS'
option to renew, as sublessee, its existing sublease with Santa
Monica Rental Company, as subleasor, or in the alternative, to
deem the motion, which seeks approval of the exercise of the
renewal option and the assumpton of the sublease, a valid
exercise of the renewal option; and

      (2) authorizing the assumption of the executory rights and
obligations of ACMS and all MPAN Debtors under the Sublease.
(Mariner Bankruptcy News, Issue No. 14; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

MOE GINSBURG: List of 20 Largest Unsecured Creditors
Entity                            Claim Amount
------                            ------------

Cantoni                             $515,000
Tony Meisto
30 West 57th Street
New York, NY 10019
(212) 245-4014

Media & Marketing                   $287,000
Marty Weissberg
1515 N. Federal Highway
Suite 200
Boca Raton, FL 33432
(561) 338-3333

HARTZ                               $233,000

Hugo Boss                           $153,000

Component By John McCoy             $125,000

Marzotto                            $110,000

Bill Blass                          $109,000

Novapparel                          $ 94,000

NYS Sales TAX                       $ 90,000

LUBIAM                              $ 87,000

GFT                                 $ 81,000

Murray Hill Property Management     $ 80,000

Hudson Paper                        $ 76,000

RAO & RAO LLC                       $ 76,000
(Promissory Note)

Korey Kay                           $ 75,000

PLAID                               $ 61,000

Kaye Scholer LLP                    $ 50,000

Chillingworth / Radding             $ 47,000

Hart Marx                           $ 38,000

BALLIN                              $ 34,000

MORGAN GROUP: Progresses On Acquisition of New Credit Facility
The Morgan Group, Inc. (AMEX:MG) reported continued progress in
obtaining a new credit facility to replace the Company's
facility that expired on January 28, 2001.

According to Anthony T. Castor III, President and Chief
Executive Officer of The Morgan Group, the Company has received
commitment letters from several financial institutions to
provide a replacement credit facility. Each of the commitment
letters is conditioned upon satisfactory completion of due
diligence procedures as well as the Company meeting various
financial covenants and requirements prior to closing. A
tentative agreement has been reached with the Company's major
shareholder Lynch Interactive Corp. (AMEX:LIC) to invest $2.0
million into Morgan, and this represents a key component in
obtaining the new credit facility. Subject to approval by the
Lynch Interactive Board, the new investment would involve the
purchase of 1.0 million newly issued Morgan Group `B' shares.
This would increase Lynch Interactive's ownership from 55.6% to

It is contemplated that The Morgan Group Board of Directors,
subsequent to the proposed share purchase by Lynch Interactive,
will grant to all shareholders a warrant providing the right to
purchase a share of Morgan Group stock at $9.00 per share for
each share held. In such event, Morgan Group `A' shareholders
would be provided a one-time 30 day window during which the `A'
shareholders only would have the right to reduce their strike
price by up to 1/3.

Although the Company had no borrowings against the credit
facility that expired on January 28, 2001, the facility is
necessary to collateralize letters of credit totaling $6.7
million that are outstanding primarily to secure losses on
liability insurance claims.

According to Castor, the Company's lack of a credit facility
since January caused a mandatory "Going Concern" qualification
in the Company's audit report on the financial statements for
the year ended December 31, 2000. "We believe that once a new
credit facility is in place, our auditors should be able to
remove the Going Concern qualification from their opinion",
noted Castor.

The Morgan Group, Inc., through its subsidiaries Morgan Drive
Away, Inc. and TDI, Inc., is the nation's largest company
managing the delivery of manufactured homes, commercial vehicles
and specialized equipment in the United States.

PACIFIC GAS: Court Grants More Time To File Schedules
Due to the complexity of Pacific Gas and Electric Company's
businesses and its significant assets, liabilities, financial
and transactional records, executory contracts and unexpired
leases Dinyar B. Mistry, Pacific Gas' Controller, told the
Court, the Debtor will be unable to complete and file their
Schedules of Assets and Liabilities, Schedules of Current Income
and Expenditures, Statements of Financial Affairs and Statements
of Executory Contracts by the deadline imposed under Rule 1007
of the Federal Rules of Bankruptcy Procedure.

The Company said that it expects to have all information
necessary to enable them to complete the preparation of its
Schedules and Statements by May 11, 2001.

Accepting the Debtor's arguments that extensions of time to file
Schedules and Statements are routinely granted in large chapter
11 cases and an similar extension of Pacific Gas' time is
warranted, Judge Montali granted the Debtors' request without
prejudice to the Company's right to seek further extensions if
necessary. (Pacific Gas Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

PILLOWTEX CORP: Wants To Assume Software Agreements With Camstar
Lockheed Martin Corporation entered into a software license
agreement and a software maintenance agreement with Camstar
System, Inc. Lockheed then assigned its interests in those
agreements to Pillowtex Corporation. Under the license
agreement, Camstar gives the Debtor a non-exclusive, multiple
use, non-transferable license to use certain production system
software, in exchange for an initial fee of $700,000. A
supplement to the agreement provides for an additional upgrade
fee of $600,000. The license's term is indefinite with no
further amounts owed or to become due unless the Debtor decides
to purchase further upgrades.

The maintenance agreement concurrently entered into with the
license agreement allows the Debtor to obtain Camstar's services
in maintaining and supporting the licensed software. The
agreement has an initial one-year term, renewable for additional
one-year terms if the Debtor notifies Camstar of its intent to
renew the maintenance agreement at least 30 days prior to the
renewal date. By a supplement to the agreement, the Debtor has
agreed to purchase, for an additional three years, support
services under the agreement consisting of:

      (a) Revision, updates, modifications and enhancements to
the licensed software as they become available, including
changes that correct defects as well as enhancements and
upgrades to update the licensed software to the software's most
current release being generally marketed for Camstar;

      (b) Corrections to any material programming errors in the
licensed software attributable to Camstar;

      (c) Telephone support pertaining to the licensed software's
operation and application; and

      (d) Special services requested by the Debtor for
maintenance and support services not specifically provided for
in the software maintenance agreement, to be provided at
Camstar's current service rates.

In return for the support services, the Debtor agrees to pay an
annual maintenance fee and, for the period of October 1, 2000
through September 30, 2001, the Debtor has been required to pay

William H. Sudell, Jr., Eric D. Schwartz, and Michael G. Wilson,
at Morris, Nichols, Arsht & Tunnell, in Delaware, told Judge
Robinson that the Debtors intend to continue with Camstar's
support services because they believe that the licensed software
is important to their operations. The Debtor has negotiated with
Camstar, and they have come up with a supplement to the
maintenance agreement providing for the terms of Debtor's
assumption of the agreement and Camstar's commitment to continue
providing support services.

By motion, the Debtors requested Judge Robinson to allow the
assumption of the maintenance agreement as modified by the
supplement, and, to the extent it is an executory contract, the
related license agreement. The Debtors believe it's a fair deal
because, while the supplement requires the Debtor to assume the
maintenance agreement, Camstar will not only continue to provide
support services to the Debtor, but will also give the Debtor
the licensed software's source code. There would be no need for
the Debtor to purchase future upgrades because, with the source
code, the Debtor would be able to customize to customize the
licensed software, without paying Camstar for it.

In connection with the assumption, the Debtor will pay Camstar
$59,515.88, the prorated amount due under the maintenance
agreement from the Petition Date through the beginning of March
2001. In addition, the Debtor will pay Camstar an additional
$100,484 for support services during the period April 1 through
December 31, 2001. For year 2002, the annual maintenance fee
would be $120,000 and $90,000 for the year 2003. The proposed
assumption of the maintenance agreement will require no cure
payments considering that Camstar has agreed to waive any fee
for the period of October 1, 2000 through the Petition Date.
(Pillowtex Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

REGAL CINEMAS: Says It's Unable to Cure Debt Covenant Defaults
Regal Cinemas, Inc. is the largest motion picture exhibitor in
the United States based upon the number of screens in operation.
At December 28, 2000, the Company operated 391 theatres, with an
aggregate of 4,328 screens in 32 states. Since its inception in
November 1989, the Company has achieved growth in revenues and
net income before interest expense, income taxes, depreciation
and amortization, other income or expense, extraordinary items,
non-recurring charges, impairment charges, and other theatre
closing costs including loss on disposal of operating assets
("EBITDA"). As a result of the Company's focus on enhancing
revenues, operating efficiently and strictly controlling costs,
the Company has achieved what management believes are among the
highest EBITDA margins in the domestic motion picture exhibition

The Company operates primarily multiplex theatres and has an
average of 11.1 screens per location, which management believes
is among the highest in the industry and which compares
favorably to an average of approximately 8.6 screens per
location for the five largest North American motion picture
exhibitors at June 1, 2000. The Company develops, acquires and
operates multiplex theatres primarily in mid-sized metropolitan
markets and suburban growth areas of larger metropolitan
markets, predominantly in the eastern and northwestern United
States. The Company seeks to locate each theatre where it will
be the sole or leading exhibitor within a particular geographic
film licensing zone. Management believes that at December 28,
2000, approximately 85% of the Company's screens were located in
film licensing zones in which the Company was the sole

The Company has historically upgraded its theatre circuit by
opening new theatres, adding new screens to existing theatres
and selectively closing or disposing of under-performing
theatres. The Company has also grown by acquiring eleven theatre
circuits during the last seven years. From its inception through
December 28, 2000, the Company has grown by acquiring 233
theatres with 1,905 screens (net of subsequently closed
locations), developing 158 new theatres with 2,255 screens and
adding 168 screens to existing theatres. This strategy has
served to establish and enhance the Company's presence in
selected geographic markets. In addition, as a result of this
strategy, the Company enjoys one of the most modern asset bases
in the industry with 44.3% of its circuit having been built
since 1997. Approximately 44.0% of the Company's screens are in
theatres with 15 or more screens.

As a whole, the film exhibition industry is in a period of
transition. Over the past several years, film exhibition
companies, including the Company, embarked on aggressive
programs of rapidly building state of the art theatre complexes
(complete with amenities such as stadium seating and digital
stereo surround-sound) in an effort to increase overall industry
attendance. However, these aggressive new building strategies
generated significant competition in once stable markets and
rendered many theatres obsolete more rapidly than anticipated.
This effect, together with the fact that many of the now
obsolete theatres are leased under long-term commitments,
produced an oversupply of screens throughout the exhibition
industry at a rate much quicker than the industry could
effectively handle. The industry overcapacity coupled with
declining national box office attendance during 2000 severely
impacted the operating results of the Company and many of its

The exhibition industry continues to report severe liquidity
concerns, defaults under credit facilities, renegotiations of
financial covenants, as well as many recently announced
bankruptcy filings.

These industry dynamics have severely affected the Company,
which has experienced deteriorating operating results over the
last fiscal year. Additionally, because the Company has funded
its expansion efforts over the past several years primarily from
borrowings under its credit facilities, the Company's leverage
has grown significantly over this time. Consequently, since the
fourth quarter of 2000, the Company has been in default of
certain financial covenants contained in its Senior Credit
Facilities and its Equipment Financing.

As a result of the default, the administrative agent under the
Company's Senior Credit Facilities delivered payment blockage
notices to the Company and the indenture trustee of its 9-1/2%
Senior Subordinated Notes due 2008 and its 8-7/8% Senior
Subordinated Debentures due 2010 prohibiting the payment by
Regal of the semi-annual interest payments of approximately
$28.5 million and $8.9 million due to the holders of the notes
on December 1, 2000 and December 15, 2000, respectively. As a
result of the interest payment defaults, the Company is also in
default of the indentures related to the Regal Notes and Regal
Debentures Accordingly, the holders of the Company's Senior
Credit Facilities and the indenture trustee for the Regal Notes
and Regal Debentures have the right to accelerate the maturity
of all of the outstanding indebtedness under the respective
agreements, which together totals approximately $1.82 billion.
The Company does not have the ability to fund or refinance the
accelerated maturity of this indebtedness.

The Company has engaged financial advisers and is currently
evaluating a longer-term financial plan to address various
restructuring alternatives and liquidity requirements. The
financial plan will provide for the closure of under-performing
theatre sites, potential sales of non-strategic assets and a
potential restructuring, recapitalization or a bankruptcy
reorganization of the Company.

Total revenues increased in 2000 by 9.0% to $1,130.7 million
from $1,037.1 million in 1999. This increase was attributable
primarily to increased ticket prices. Box office ticket prices
averaged $5.36 during 2000, which was 9.4% higher than the $4.90
average ticket price in 1999. Average concession per patron were
also higher in 2000 ($2.17) versus 1999 ($2.03). The higher
prices per patron increased revenue by $84.6 million. Also, the
slight increase in year over year admissions of 2.0 million
patrons contributed $14.2 million of the revenue increase. Such
increases were partially offset by declines in other operating

Operating loss for 2000 increased to $110.0 million, or 9.7% of
total revenues, from $2.4 million, or 0.2% of total revenues, in
1999. The increased loss is primarily due to the $70.7 million
increase in theatre closing costs, loss on disposals of assets,
and impairment charges over 1999. Before the $190.4 million and
$119.7 million of nonrecurring expenses for 2000 and 1999,
respectively, operating income was 7.1% and 11.3% of total
revenues for 2000 and 1999, respectively. The decrease is due to
increased direct theatre costs, depreciation, and amortization.

Prior to 2000 net loss in 1999 increased by 20.4% to $88.5
million from $73.5 million in 1998. Before nonrecurring expenses
and extraordinary items, net loss was $(14.9) million and net
income $29.6 million for 1999 and 1998, respectively, reflecting
a 150.3% decrease.

RITE AID: Reports Fourth Quarter And Year-End Financial Results
Rite Aid Corporation (NYSE, PSE:RAD) announced financial results
for its fourth quarter, ended March 3, 2001.

Revenues for the 14-week quarter were $4.1 billion, up from $3.5
billion in the 13-week period a year ago. Compared to the same
14-week period a year ago, sales increased 8.3 percent from $3.8

Same store sales increased 10.6 percent during the fourth
quarter as compared to the year-ago period, reflecting
prescription sales growth of 12.7 percent and a 7.7 percent
increase in front-end same-store sales. Prescription revenue
accounted for 58.8 percent of total drugstore sales, and third
party prescription sales represented 90.9 percent of total
pharmacy sales.

Fourth quarter earnings before interest, taxes, depreciation,
amortization and non-recurring expenses (EBITDA) amounted to
$179.2 million. Excluding non-operating income of $7.8 million
received in the fourth quarter from the settlement of litigation
with certain drug manufacturers, EBITDA was $171.4 million.
Excluding non-operating income, EBITDA was 4.2 percent of sales
for the fourth quarter as compared to EBITDA of 3.4 percent of
sales in the third quarter.

Our associates have made dramatic improvements in the operation
of our stores as part of our turnaround plan, said Mary Sammons,
Rite Aid president and chief operating officer. These
improvements have resulted in strong fourth quarter sales gains
and continuing increases in EBITDA.

Interest expense for the quarter was $150.1 million, consisting
of $140.6 million of interest on indebtedness and capital lease
obligations and $9.5 million of non-cash interest from
amortization of debt issue costs and the accretion of interest
on closed stores and other reserves.

Net loss from continuing operations for the fourth quarter was
$362.1 million or a loss per share of $1.07 compared to a net
loss from continuing operations of $730.6 million or a loss per
share of $2.82 in the year-ago period. The net loss from
continuing operations would have been $75.7 million or a loss
per share of $0.22 without non-cash and one-time charges of
$280.9 million and the $7.8 million litigation settlement
received. Non-cash charges included $207.0 million for store
closings and impairment, $38.2 million for stock-based
compensation, an $18.3 million LIFO charge on inventory, $8.5
million related to debt for equity exchanges and $6.1 million
from the company's share of's losses. The company
reported a cash charge of $8.7 million for accounting and legal
fees resulting from the restatement of the company's historical
financial statements.

During the quarter, the Company opened 4 new stores, relocated 4
stores and closed 98 stores. Stores in operation at the end of
the quarter totaled 3,648.

                         Year-End Results

For the fiscal year ended March 3, 2001, Rite Aid had drugstore
revenues of $14.5 billion as compared to drugstore revenues of
$13.3 billion for the 52 weeks in the year prior.

Same store sales increased 9.1 percent for the 53-week period
compared to the prior fiscal year, reflecting prescription sales
growth of 10.9 percent and a 6.5 increase in front-end same-
store sales. Prescription revenue accounted for 59.6 percent of
total drugstore sales, and third party prescription revenue
represented 90.3 percent of pharmacy sales.

For the fiscal year ended March 3, 2001, Rite Aid reported a net
loss from continuing operations of $1.4 billion or a loss per
share of $5.15 compared to a net loss from continuing operations
of $1.1 billion or a loss per share of $4.34 for fiscal year
2000. Included in the fiscal 2001 net loss from continuing
operations were non-cash charges of $645.8 million, including
$415.3 million for store closings and impairment, $100.6 million
related to debt for equity exchanges, $48.9 million for stock-
based compensation, a $40.7 million LIFO charge on inventory and
$36.7 million for the company's share of's losses.
During fiscal year 2001, the Company reported $473.2 million of

                     Further Debt Reduction

Rite Aid also announced that since fiscal year end, it completed
and has contracted to complete private exchanges of its common
stock for $219.4 million of its debt, primarily bank debt and
10.5% notes due in 2002. The company also said that it reduced
debt by approximately $157.6 million in the fourth quarter of
fiscal 2001 by retiring $76.9 million principal amount of its
6.7% notes due in December, 2000; applying $34.5 million
received from the final accounting of the sale of PCS Health
Systems, Inc.; and from $42.5 million of private exchanges of
common stock for debt.

These are in addition to the debt reductions of approximately
$763.5 million announced in March. At that time Rite Aid reduced
debt with $284.2 million in proceeds from the sale of AdvancePCS
common stock and with $200 million from the repayment by
AdvancePCS of senior subordinated notes, both of which it
received in October, 2000, when PCS was sold, and the exchange
of approximately $279.3 million of debt for common stock upon
completion of a public tender offer.

In addition to the improvement in our operations, we are pleased
by the substantial reduction in our debt, said Bob Miller, Rite
Aid chairman and chief executive officer. Both have placed the
company in a better position to refinance its debt obligations
due in August and September 2002.

The company estimated that the debt reductions since the start
of the fourth quarter, fiscal 2001 will reduce annual cash
interest costs by approximately $85 million.

Rite Aid Corporation is one of the nation's leading drugstore
chains with annual revenues of more than $14 billion and more
than 3,600 stores in 30 states and the District of Columbia.
Information about Rite Aid, including corporate background and
press releases, is available through the company's website at

SAFETY-KLEEN: Judge Approves Payment Of Superfund Obligations
Judge Walsh found that it is in the best interests of the
Debtors and their estates to grant Safety-Kleen Corp.'s request
for authority to pay, as may be appropriate and in their sole
and absolute discretion, the Superfund Obligations now due or
becoming due on or before December 31, 2001.

In addition, Judge Walsh directed that:

      (a) The Lenders and the Creditors shall be permitted the
Superfund Payment Review period of 14 days, from the date of the
Notification to review the proposed payments;

      (b) To the extent the Lenders or the Creditors' Committee
requests from the Debtors, during the Superfund Payment Review
Period, additional information with respect to the proposed
payments, the Superfund Payment Review Period shall be extended
until 7 days following the receipt of the additional information
by the requesting party; and

      (c) If either of the Lenders or the Creditors' Committee
timely objects to the payment of the obligations described in
the Superfund Payment Chart for the applicable period, or
requests additional information, and the objection and/or the
request for additional information is not resolved on a
consensual basis, the Debtors shall have the option of, (i)
foregoing the payment of the applicable Superfund Obligations
for the applicable quarter, or (ii) seeking Court order for
authority to pay the applicable Superfund Obligations over the
Lenders and/or the Creditors' Committee objection. (Safety-Kleen
Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

SIMONDS INDUSTRIES: S&P Cuts Corporate Credit Rating to B
Standard & Poor's lowered Simonds Industries Inc.'s corporate
credit rating to B from B+ and subordinated debt rating to CCC+
from B-, affecting $100 million in debt securities. The outlook
remains negative.

The rating downgrades reflect weaker-than-expected financial
performance, due to weak end-market demand, pricing pressures,
reduced customer capital spending, and challenges with the
integration of a recent acquisition.

The ratings reflect Simonds' weak financial profile, which
offsets the company's leading positions in mature, highly
fragmented, and competitive markets. Operating performance over
the past year has been subpar. For the last 12 months ending
March 31, 2001, EBITDA was approximately $15.8 million, compared
with $19.4 million for the same prior-year period. High
financial risk will likely persist for the foreseeable future,
reflecting the company's highly leveraged capital structure,
heavy debt burden, and soft end markets.

Simonds manufactures industrial cutting and sharpening tools,
including saw blades, files, knives, steel rule, and filing room
equipment. Products are sold to three end-user markets--metal
cutting (49% of sales), wood cutting (40%), and paper products
(11%). Simonds faces strong competition from several full-line
companies similar in size and numerous, smaller niche suppliers.
The company is one of the top three suppliers in each of the
market segments it serves. However, the scope of the company's
operations is relatively small, with 2000 sales of $127 million
and EBITDA of about $17.5 million.

Operating and financial performance during the last 12 months
has been negatively affected by several factors. The company has
experienced integration challenges with its recent acquisition
of Nicholson Band Saws from Cooper Industries Inc. Sales of the
company's machine tools and filing products have been affected
by soft industrial production and reduced capital spending. In
addition, demand for the company's wood-cutting products has
been adversely affected by the continued consolidation of lumber
mills and reduced production schedules as a result of weak pulp
and paper prices. In addition, pricing pressures have increased
as a result of foreign imports. To offset these pressures,
management continues to focus on improving profitability by
reducing costs, closing and consolidating facilities, and
reducing overhead.

As of March 31, 2001, total debt to EBITDA was about 6.8 (x)
times and EBITDA interest coverage was about 1.3x. Near term,
credit measures are expected to remain weak, with EBITDA
interest coverage ranging between 1x and 1.5x and total debt to
EBITDA between 6x and 7x. Significant improvement is not
expected in the short term as markets are expected to remain

Financial flexibility remains limited. In the near term, the
company has a $5.1 million interest payment associated with its
subordinated notes due July 15, 2001. As of March 31, 2001, the
company had approximately $1.3 million in cash and $26 million
of availability on its $40 million revolving credit facility.

                     OUTLOOK: NEGATIVE

The ratings assume that cost-reduction efforts will help offset
industry pressures. Further deterioration in operating results
as a result of weak market conditions could lead to liquidity
pressures and additional ratings downgrades, Standard & Poor's

SUN HEALTHCARE: Transferring Five More SunBridge Facilities
Pursuant to the Court's authorization of Procedures for the
Disposition of Certain Healthcare Facilities and the Related
Leases and Provider Agreements, Sun Healthcare Group, Inc.
sought and obtained approval for the transfer of another 5
facilities, 4 of which were originally operated by Debtor
Retirement Care Associates, Inc. (1 - 4 below) and facility
shown in (5) below was operated by SunBridge Healthcare

(1) SunBridge Care and Rehab for Coventry, located in Ocala,

     * Annual savings from transfer: $315,096
     * Sales price of inventory: Debtor's cost
     * Lease rejection damage claim: $837,534
     * Pre-petition employee claims: Debtors shall pay directly
       to employees
     * Landord: Ganot Corporation
     * Proposed New Operator: Prime Healthcare Services, LLC
     * Effective Date: upon satisfaction of conditions, the first
       to occur of the 1st or 16th of a calendar month
     * Treatment of Medicare Provider Agreement: reject
     * New Operator's Share of HCFA Global Settlement: $13,300

(2) SunBridge Care & Rehab for Reidsville located in Reidsville,

     * Annual savings from transfer: $200,356
     * Sales price of inventory: Debtor's cost
     * Lease rejection damage claim: $709,689
     * Pre-petition employee claims: Debtors shall pay directly
       to employees
     * Landord: Ganot Corporation
     * Proposed New Operator: Healthlink West, Inc.
     * Effective Date: upon satisfaction of conditions, the first
       to occur of the 1st or 16th of a calendar month
     * Treatment of Medicare Provider Agreement: reject
     * New Operator's Share of HCFA Global Settlement: $13,300

(3) SunBridge Care & Rehab for St. Cloud located in St. Cloud,

     * Annual savings from transfer: $473,260
     * Sales price of inventory: Debtor's cost
     * Lease rejection damage claim: $845,175
     * Pre-petition employee claims: Debtors shall pay directly
       to employees
     * Landord: Ganot Corporation
     * Proposed New Operator: Healthlink West, Inc.
     * Effective Date: upon satisfaction of conditions, the first
       to occur of the 1st or 16th of a calendar month
     * Treatment of Medicare Provider Agreement: reject
     * New Operator's Share of HCFA Global Settlement: $13,300

(4) SunBridge Care & Rehab for Coventry, located in Virginia
     Beach, VA

     * Annual savings from transfer: $ 1,168,126
     * Sales price of inventory: Debtor's cost
     * Lease rejection damage claim: $1,523,935
     * Pre-petition employee claims: Debtors shall pay directly
       to employees
     * Landord: Ganot Corporation
     * Proposed New Operator: Healthlink West, Inc.
     * Effective Date: upon satisfaction of conditions, the first
       to occur of the 1st or 16th of a calendar month
     * Treatment of Medicare Provider Agreement: reject
     * New Operator's Share of HCFA Global Settlement: $13,300

(5) SunBridge Care and Rehabilitation for Bay St. Joseph,
     located in Bay St. Joe, Florida, operated by SunBridge
     Healthcare Corporation:

     * Annual savings from transfer: $489,778
     * Sales price of inventory: $0 - to be removed
     * Lease rejection damage claim: $1,310,504
     * Pre-petition employee claims: Debtors shall pay directly
       to employees
     * Landord: Health Care Capital of Louisiana, Inc. as
       successor in interest to HCC Gulf, Inc.
     * Proposed New Operator: LaSalle Bank National Association
     * Effective Date: March 15, 2001
     * Treatment of Medicare Provider Agreement: reject and
     * New Operator's Share of HCFA Global Settlement: $12,500

(Sun Healthcare Bankruptcy News, Issue No. 20; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

TRANS ENERGY: Selling Debt Securities To Raise Needed Funds
Trans Energy, Inc., a Nevada corporation, is primarily engaged
in the transportation, marketing and production of natural gas
and oil, and also conducts exploration and development
activities. The Company owns an interest in three oil and gas
wells in West Virginia, owns and operates one oil well in
Wyoming, and owns an interest in seven oil wells in Wyoming that
it does not operate. The Company also owns and operates an
aggregate of over 100 miles of three-inch, four-inch and six-
inch gas transmission lines located within West Virginia in the
Counties of Ritchie, Tyler and Pleasants. This pipeline system
gathers the natural gas produced from these wells and from wells
owned by third parties. The Company also has approximately
18,000 acres under lease in the Powder River Basin in Campbell,
Crook and Weston Counties, Wyoming. In 2000, the Company
participated in the drilling of four drill downs to the Benson
Sand in West Virginia.

Total revenues of $1,125,257 for the year ended December 31,
2000 increased 3% when compared to $1,092,899 for the year ended
December 31, 1999. In 2000, oil made up 70% of total revenues
compared to 37% in 1999. Accordingly, gas sales decreased from
63% of sales in 1999 to 30% in 2000. This increase in oil
revenues was due to the Gulf Canada interests in Wyoming which
produces oil and not natural gas.

The Company had a net loss of $4,144,703 for 2000 compared to a
net loss of $6,298,333 in 1999. The Company's total costs and
expenses decreased 10% in 2000 and, as a percentage of revenues,
decreased from 392% in 1999 to 343% in 2000. The cost of oil and
gas decreased 33% in 2000 due to lower purchases and a set
price. As a percentage of revenues, cost of oil decreased from
46% in 1999 to 30% 2000 due to increased oil selling prices in
2000. Selling, general and administrative expenses increased
188% in 2000 when compared to 1999, primarily due to additional
amortization on pre-paid advertising and marketing. Salaries and
wages increased 41% in 2000 due to the exercise of options
granted to employees for services rendered. Depreciation,
depletion and amortization decreased 87% in 2000 from 1999 due
to the Company not having any prepaid marketing and advertising
costs. Interest expense in 2000 decreased 45% from 1999 due to
conversion of debentures during the year.

Historically, the Company's working capital needs have been
satisfied through its operating revenues and from borrowed
funds. Working capital at December 31, 2000 was a negative
$4,550,117 compared with a negative $9,115,862 at December 31,
1999. This change was primarily attributed to the conversion of
certain debentures into commons stock in 2000. The Company
anticipates meeting its working capital needs during the 2001
fiscal year with revenues from operations and possibly from
capital raised through the sale of either equity or debt
securities. The Company has no other current agreements or
arrangements for additional funding and there can be no
assurance such funding will be available to the Company or, if
available, it will be on acceptable or favorable terms to the

TRANSPORTATION COMPONENTS: Files Chapter 11 Petition in Houston
Transportation Components, Inc., which operates as TransCom USA,
and all of its domestic subsidiaries, have voluntarily filed to
reorganize under Chapter 11 of the United States Bankruptcy
Code.  The filings, made in federal bankruptcy court in Houston,
will enable the TransCom group to continue to operate their
businesses in the normal course, using their own internally
generated cash and the proceeds of debtor in possession
financing being arranged with the company's bank group.
TransCom's Canadian subsidiary, Wes-T-Rans, and its Amparts
operations in Mexico, are not included in the filings.

TransCom cited a prolonged industry slump, declining sales,
acute liquidity problems, and a heavy debt load as factors
prompting the need to reorganize.

In connection with the filing, TransCom's bank lenders, led by
Bank One, have allowed TransCom the use of their cash collateral
and have agreed in principle to extend the company up to $5.5
million in debtor in possession financing, including $3.5
million immediately and another $2 million to be made available
August 1 of this year if TransCom meets agreed milestones.

To guide it through the reorganization TransCom's Board of
Directors has hired the New York based crisis management and
bankruptcy consulting firm of Bridge Associates LLC.  Anthony H.
N. Schnelling, a managing director of Bridge Associates, will
head the Bridge team's efforts on behalf of the company.
Schnelling said, "The TransCom board decided the company's
financial and operational challenges could best be addressed
through a Chapter 11 reorganization.  We look forward to
assisting the TransCom board and management in the restructuring
of TransCom's financial obligations and operations."  According
to Mr. Schnelling, TransCom is already working toward that goal
on several key fronts, by moving to streamline management,
reduce costs, dispose of non-core businesses, and restructure
its long-term debt.

TransCom also announced that T. Michael Young has resigned as
the company's President and Chief Executive Officer.  Mr. Young
will remain a director and continue as Chairman of the Board of
TransCom as it transitions into the reorganization process.
David N. Phelps, previously a senior vice president of the
company, has been promoted to executive vice president. Mr.
Phelps, who will continue as TransCom's chief financial officer,
joins two other TransCom Executive Vice-Presidents, Dan Bucaro,
who heads operations, and David Olsen, in charge of sales, to
form TransCom's principal management team.  The three officers,
working with Bridge Associates, will report directly to the
TransCom board.

TransCom's shares stopped trading on the New York Stock Exchange
on April 12, after the company failed to comply with the
exchange's minimum continued listing requirements.  Trading in
the over-the-counter market may not begin until the company
files its 2000 annual report with the Securities and Exchange
Commission.  The report, due in April, has been deferred pending
clarification of the company's financial uncertainties.
Initiation of the reorganization process should enable TransCom
to complete its 2000 audit and file its annual report some time
in the near future, but TransCom is uncertain if and when
trading in its shares will resume.

Houston based TransCom is a nationwide distributor of heavy duty
truck parts.  It has 90 operating locations in the United
States, Canada and Mexico. TransCom's customer base includes
common carriers, private and rental fleets, independent repair
shops, specialty OEMs and others.

Lead Debtor: Transportation Components, Inc.
              Three Riverway, Suite 200
              Houston, TX

Debtor affiliates filing separate chapter 11 petitions:

              Transcom USA Management Co.
              Amparts International, Inc.
              Drive Line, Inc.
              Gear & Wheel, Inc.
              Perfection Equipment, Co.
              Transportation Component, Co.
              American Truck Transport Equipment, Inc.
              TUSA GP, Inc.
              TUSA LP, Inc.
              The Cook Brothers Companies, Inc.
              NEC Leasing, Inc.
              Plaza Automotive, Inc.
              Brake & Spring, Inc.
              Mobile Power & Hydraulics, Inc.
              Hardy's Truck Parts, Inc.
              Universal Fleet Supply, Inc.
              Charles W. Carter Co-Arizona
              Charles W. Carter Co-Hawaii, Inc.
              K.O.Y. Corp.
              Brake Service & Equipment Co. of Florida, Inc.
              JDK Industries, Inc.
              DSS/ProDiesel, Inc.

Type of Business: TransCom distributes replacement parts and
                   supplies for commercial trucks, trailers, and
                   other heavy duty vehicles and equipment
                   throughout North America and Mexico. The
                   company also performs parts installation and
                   repair, fleet maintenance management, machine
                   shop services, and remanufacturing of brake
                   shoes, fuel injectors and turbo chargers.

Chapter 11 Petition Date: May 07, 2001

Court: Southern District of Texas

Bankruptcy Case Nos.: 01-35158 through 01-35180

Debtors' Counsel: John F. Higgins, Esq.
                   Porter & Hedges, L.L.P.
                   700 Louisiana, Suite 3500
                   Houston, TX 77002
                   (713) 2260600

Total Assets: $211,603,000

Total Debts: $118,273,000

USG CORPORATION: Moody's Downgrades Senior Note Rating To B2
Moody's Investors Service downgraded the ratings of Chicago-
based USG Corporation and its subsidiary United States Gypsum
Company. Specifically, these are:

USG Corporation:

      - senior notes, debentures & industrial revenue bonds to B2
      - shelf registration for senior debt to (P)B2,
      - subordinated debt to (P)Caa1 and
      - preferred stock to (P)"caa".

United States Gypsum Company:

      - industrial revenue bonds to B2.

Approximately $740 million of debt securities are affected.

Accordingly, the downgrades reflects USG's ongoing exposure to
asbestos litigation and the continuing, accelerated downward
impact on operating performance caused by price deterioration in
the wallboard markets and higher fuel costs in the manufacturing
process. With respect to the asbestos litigation, sizeable
settlement payments are anticipated going forward, insurance
proceeds are likely to cover only a minor portion of expected
future payments and will be exhausted in the near term, Moody's
said. Moody's also expressed its concern over USG's ability to
renew its $200 million 364 day bank facility due June 29, 2001
on comparable terms, given the company's current operating
fundamentals. Moody's noted that USG may borrow under this
facility up to the expiry date and that such borrowings would
have an expiry date of June 29, 2002.

The outlook remains negative given the uncertainty surrounding
the extension of the maturing bank facility, the period of time
for capacity and price correction in the wallboard markets, and
the continuing asbestos exposure, Moody's reported. According to
the rating agency, how the Company addresses near term liquidity
availability requirements and debt maturities will be a critical
factor in its ongoing analysis of USG's ratings.

VIDEO UPDATE: Movie Gallery Buys Senior Secured Bank Debt
Movie Gallery, Inc. (Nasdaq/NM: MOVI) has purchased the senior
secured bank debt of Video Update, Inc. from a syndication of
financial institutions led by BNP Paribas. The bank debt, which
has a $121 million face value, was purchased at a discount of
greater than 90%. Video Update, Inc., which is currently
operating under Chapter 11 of the United States Bankruptcy Code,
owns and operates over 350 video specialty retail stores in the
United States and Canada.

Commenting on the purchase of the bank debt, Joe Malugen,
Chairman and Chief Executive Officer of Movie Gallery, stated,
We are excited about the opportunity of participating in the
reorganization of Video Update and having input in the
disposition of each of the Video Update stores over the next few

Movie Gallery, Inc. currently owns and operates a total of 1,036
video specialty stores located in 31 states. Movie Gallery is
the third largest video specialty retailer in the United States
and is the leading provider of movie and video game rentals and
sales in rural and secondary markets.

W.R. GRACE: Moves To Withdraw Reference re Asbestos Claims
W. R. Grace & Co.'s chapter 11 filing, David M. Bernick, Esq.,
at Kirkland & Ellis explained, is not driven by concerns over
its ongoing business operations. Rather, these are asbestos-
driven cases.  While the Debtors will take full advantage of
whatever benefits it can derive from the chapter 11 process on
an operational level, the main task of this restructuring is to
define the scope of the Company's asbestos-related personal
injury tort liability, contain it, and resolve it once and for

The Congress grants original and exclusive jurisdiction of all
bankruptcy cases under title 11 to the United States District
Courts pursuant to 28 U.S.C. Sec. 1334(a). Pursuant to 28 U.S.C.
Sec. 157(a), each Article III District Court may refer
bankruptcy cases to the Bankruptcy Court, which functions as a
unit of the District Court. W.R. Grace's chapter 11 cases were
referred to the Bankruptcy Court pursuant to a revived general
order of reference entered by the District Court on December 15,
2000. That reference, however, is not without limits. Core
proceedings, described at 11 U.S.C. Sec. 157(b)(2), specifically
exclude "personal injury tort or wrongful death claims."

W.R. Grace faces four types of asbestos-related claims:

(A) bodily injury claims alleging health effects from exposure
     to Grace's asbestos-containing products;

(B) claims alleging personal injury and property damage from
     exposure to naturally occurring asbestos in connection with
     the mining and processing of vermiculite at Grace's mine in
     Libby, Montana;

(C) property damage claims generally seeking payment for the
     cost of removing or containing asbestos in buildings; and

(D) claims for removal of vermiculite attic insulation seeking
     damages and other relief.

A significant portion of Grace's potential asbestos-related
liability stems from personal injury cases. Because
determinations about the validity of personal injury claims are
non-core proceedings, the Bankruptcy Court is not the forum in
which W.R. Grace can complete the main task of its restructuring

Mr. Bernick notes that the lawyers could argue about the
"coreness" of the asbestos-related claims for a long time,
pointing to case law:

      (i) expressly holding that such determinations are non-core
proceedings, see, e.g., In re Schepps Food Stores, Inc., 169
B.R. 374, 377 (Bankr. S.D. Tex. 1994) and In re UNR Indus., 74
B.R. 146, 147-48 (N.D. Ill. 1987);

     (ii) concluding that dispositions of personal injury claims
can be core proceedings within the jurisdiction of a bankruptcy
court, see, e.g., In re Aquaslide 'N' Dive Corp., 85 B.R. 545,
546 (9th Cir. B.A.P. 1987)(ruling on debtor's "product
identification" defense is "a core proceeding") and In re
Dow Corning Corp., 215 B.R. 346, 361 (Bankr. E.D. Mich.
1997)(debtor's motion for summary judgment seeking to disallow
silicone implant personal injury claims, on the ground that
claimants' causation evidence was insufficient under Daubert, is
a core proceeding which the bankruptcy court may hear and
determine); and

    (iii) in the case of the Third Circuit, taking middle-of-the-
road positions to side-step the issue. See, e.g., In re C&G
Excavating, Inc., 217 B.R. 64 n.1 (E.D. Pa. 1998).

W.R. Grace doesn't want to have "coreness" conversations.
Rather, it wants to define and resolve its asbestos-related
liability and get out of bankruptcy. The Debtors' liability is
presently uncontrolled and undefined.  In front of a District
Court, rather than a Bankruptcy Court, W.R. Grace believes that
it can put specific procedures in place to define its asbestos-
related liability. These procedures include:

      (1) the consolidation of all litigation in one court,
subject to the Federal Rules of Evidence and Civil Procedure;

      (2) the bar date procedure, which permits the
identification of all existing claims;

      (3) the claims allowance and disallowance procedure, which
can be used to gather the information necessary to litigate or
resolve claims on a consolidated basis;

      (4) the availability of standard litigation procedures
under the Federal Rules, including summary judgment motions
under Rule 56 and common issue trials under Rule 42; and

      (5) the ultimate ability to provide for the consolidated
payment (or litigation) of claims through a post- confirmation

No process, Mr. Bernick contends, could fit more squarely within
the purview of an Article III court and there are four clear
benefits to a partial withdrawal of the reference in the first

      (w) withdrawal will eliminate issues concerning the power
of the bankruptcy court to dispositively resolve issues
regarding personal injury liability. See In re Sevko, Inc., 143
B.R. 114, 117 (N.D. Ill. 1992);

      (x) the District Court's expertise in applying the Federal
Rules of Evidence, including Daubert precepts, can be fully
employed. See In re Dow Corning, 215 B.R. 526, 529 ("Judicial
expertise with respect to Daubert hearings is yet another factor
to consider. . . . [T]he District Court has far greater
expertise in handling such matters.");

      (y) the District Court can develop immediate and direct
control over a very complex bankruptcy that ultimately will come
before the District Court for confirmation of a plan of
reorganization to obtain the benefits of a discharge and
channeling injunction under 11 U.S.C. Sec. 524(g); and

      (z) the District Court can retain the flexibility to decide
that particular matters are better handled by the Bankruptcy
Court, thus mitigating any burden the District Court might sense
or fear.

Accordingly, the Debtors ask that the District Court take direct
control -- now -- over all issues concerning Grace's tort
liability and the allowance or payment of tort claims. While
these procedures arguably can be deployed -- at least to a point
-- initially in the Bankruptcy Court, W.R. Grace submits that
the more efficient and effective course is for the District
Court to take charge of all tort liability issues from the
beginning, in essence to set out the blueprint for how the case
is to proceed. Decisions can then be made on an issue-by-issue
basis or subject matter-by-subject matter basis as to whether
certain aspects of the litigation can be more appropriately
handled by the Bankruptcy Court. The Bankruptcy Court -- of
course, Mr. Bernick explained -- would retain jurisdiction over
all matters not related to Grace's tort liability.

Mr. Bernick assures the Court that W.R. Grace is not asking the
judiciary to venture into new and uncharted waters. The Kirkland
& Ellis legal team has already taken Babcock & Wilcox Co.,
another recently-filed chapter 11 case prompted by an
unmanageable avalanche of asbestos-related claims, down this
road. In that case, the District Court for the Eastern District
of Louisiana bought into a partial withdrawal of the reference,
recognizing that efficiency and judicial economy would be
served. See In re The Babcock & Wilcox Co., No. Civ. A. 00-0558,
2000 WL 422372 (E.D. La. Apr. 17, 2000).  The District Court in
Babcock & Wilcox's case contemplates entertaining motions for
summary judgment concerning, among other things, "the
appropriate standard of liability, the availability of punitive
damages, the validity of claims based on unreliable scientific
evidence of disease and causation, the appropriate statutes of
limitation, and the applicability of the sophisticated purchaser
and government contractor defenses." Id. at *4.

It appears that the Debtors' wish came true.  Judge Robinson
reassigned the case from visiting Bankruptcy Judge Randall
Newsome to District Court Judge Joseph J. Farnan.  (W.R. Grace
Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

W.R. GRACE: Obtains Approval for $250 Million DIP Financing
W. R. Grace & Co. (NYSE: GRA) announced that it has received
approval from the U.S. Bankruptcy Court in Wilmington, Delaware,
for its use of $250 million of debtor-in-possession financing
from Bank of America, N.A.  The Company will use these funds to
help it in meeting future needs and obligations associated with
operating its businesses.

Grace's Chairman, President and Chief Executive Officer Paul J.
Norris commented, "With this approved financing now in place,
Grace is solidly positioned to continue to meet all of its
future obligations to customers, employees, suppliers and
business partners.  This DIP financing package should serve as
further assurance that we have the means to continue our
businesses as usual and will continue to compete effectively as
a leader in our major markets.  Obtaining and receiving approval
for this financing facility is a positive signal that our
businesses will have sufficient liquidity as we work to resolve
our litigation issues."

On April 2, 2001, Grace and 61 of its United States subsidiaries
and affiliates filed voluntary petitions for reorganization
under Chapter 11 of the U.S. Bankruptcy Code in Wilmington,
Delaware.  Grace's non-U.S. subsidiaries were not part of the
filing.  The filing was made in response to a sharply increasing
number of asbestos-related claims.  Under Chapter 11, Grace
expects to continue to operate these entities as debtors-in-
possession under court protection from creditors and claimants,
while using the Chapter 11 process to develop and implement a
plan for addressing the asbestos-related claims and satisfying
obligations to other creditors.

Grace is a leading supplier of catalysts and silica products,
specialty construction chemicals and building materials, and
container products.  With annual sales of approximately $1.6
billion, Grace has over 6,000 employees and operations in nearly
40 countries.  For more information, visit Grace's web site at

WHEELING-PITTSBURGH: Proposes Workers' Income Protection Policy
James M. Lawniczak, Esq., at Calfee, Halter & Griswold LLP, in
Ohio, reminded Judge Bodoh -- like he could have forgotten --
that low steel prices have driven Wheeling-Pittsburgh Steel
Corp. and many other steel companies to the halls of the
Nation's bankruptcy courts. Continued low prices compel the
Debtors to save costs wherever possible, including permanent
severance of employees. WPSC and Pittsburgh-Canfield foresee
that they may be required to lay off some employees, a course of
action, which, although is necessary, would be a big blow on
employee morale. To cushion the severe detrimental impact of
layoffs, the Debtors proposed, and sought the Court's authority
to implement an income protection policy for salaried workers
who may be affected by the layoffs.

                    Income Protection Policy

The proposed policy provides supplemental payments to affected
employees equal to the difference between, (i) unemployment
benefits received by affected employees receive, and (ii) one-
half the affected employees' normal base salary. Payments to
individual affected employees would be subject to a cap of $500
per week and will not exceed 26 weeks in duration, except that
re-hired employees would be entitled to reestablish their
eligibility or one week of benefits for each two weeks of
permanent, continuous, full-time work occurring after the
initial layoff. Eligibility is strictly limited to full-time,
permanent management employees where:

      (a) Layoff is due to economic conditions resulting in lack
          of work;

      (b) Employee has no more than one week of vacation

      (c) Layoff is not due to plant or departmental permanent
          shutdown, government regulation or act of God;

      (d) Employee must be eligible to receive state unemployment

      (e) Employee has not refused a work assignment offered by
          the employer;

      (f) Employee is able and available for work, has registered
          at and reported to the state employment service and has
          not failed or refused to accept suitable employment or
          voluntarily left that suitable employment; and

      (g) Employee is not eligible for any subsistence benefit
          from any other source.

Amounts to be expended under the proposed plan, of which the
Debtors do not have an estimate yet, would depend on the number
of eligible employees who are laid off and the differences
between one-half their salaries and the benefits provided by
relevant state unemployment benefit programs. The Debtors
believe that, the amounts that would be paid under the proposed
plan would not be additional expenses to the estates, but
rather, a partial limitation on the amounts that the Debtors
would save through layoffs of management employees. While cost-
savings are important, the Debtors believe that it is also
critical to maintain employee morale and to provide employees
with necessary reassurances concerning the potential
consequences of layoffs, and that on balance the proposed plan's
adoption is appropriate and necessary.

                         Stock Redemptions

WPSC maintains an employee stock investment plan where eligible
employees originally were entitled to invest in stock issued by
Wheeling-Pittsburgh Corp., or WPC. This stock investment plan:

      (a) allowed employees to redeem the stocks, commonly
referred to by the Debtors as ESOP redeemable stocks, that
employees held at fixed prices, that is, $15 per share for
employees who have reached 30 years of services or $20 per share
upon qualified retirement; and

      (b) provides that WPC would repurchase stock from
participants in the plans.

When WHX Corp. was formed and became the ultimate parent
company, the WPC stocks were converted to WHX stocks. By a
contribution and assumption agreement between WHC and WHX,
various WPC assets and liabilities were transferred to WHX,
including all WPC rights and obligations under existing WPC
stock option plans and WPSC stock investment plans. WHX also
issued a proxy statement and prospectus confirming its
assumption of the obligation to purchase ESOP redeemable common
stock. From 1994 through 2000, the Debtors redeemed the ESOP
stocks and charged WHX for those amounts through inter-company
accounts. When WHX expressed its belief that WHX should not be
charged for the repurchase, the Debtors temporarily suspended
redemption of the ESOP stocks.

By motion, the Debtors asked Judge Bodoh to approve stock
redemptions by the Debtors in accordance with the stock
incentive plan, pending resolution of inter-company disputes
regarding legal liability for those redemptions. The Debtors
allege that the suspension of redemptions has imposed
significant hardships on numerous retired employees, including
many members of the Debtors' unions. The unions have asked the
Debtors to resume stock redemptions. In order to minimize
hardships on the affected employees, and to preserve good
relations with unionized employees and other employees, the
Debtors proposed, at their discretion, to resume redemptions of
redeemable stocks from eligible employees, while at the same
time preserving the Debtors' right to recover the costs of
redemptions from WHX.

The Debtors estimate that redemptions for January, February and
March 2001, will cost $85,128 for unionized employees and
$42,961 for other eligible employees, for a total of $128,089.
Further, the Debtors submit that ongoing monthly costs of
redemptions, while varying, will average about $50,000 per
month, representing the gross redemption price for the WHX stock
that is redeemed.  (Wheeling-Pittsburgh Bankruptcy News, Issue
No. 6; Bankruptcy Creditors' Service, Inc., 609/392-0900)


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

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

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

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


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

Troubled Company Reporter is a daily newsletter co-published by
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Group, Inc., Washington, DC USA. Debra Brennan, Yvonne L.
Metzler, Bernadette de Roda, Aileen Quijano and Peter A.
Chapman, Editors.

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

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to be reliable, but is not guaranteed.

The TCR subscription rate is $575 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are $25 each.  For subscription information, contact
Christopher Beard at 301/951-6400.

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