TCR_Public/010522.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

               Tuesday, May 22, 2001, Vol. 5, No. 100

                             Headlines

BIG V: Proposes $1.27 Million Retention Inventive Plan Seeks
BPI PACKAGING: Primary Lenders Postpone Foreclosure To May 25
BRIDGE INFORMATION: Bids For Remaining Assets Due By June 20
CASUAL MALE: Files For Chapter 11 Protection in S.D. New York
CASUAL MALE: Case Summary & 25 Largest Unsecured Creditors

DADE BEHRING: Moody's Junks Senior Debt Ratings
EDUCATIONAL INSIGHTS: Reports Progress on Restructuring
E.SPIRE COMM.: Quarterly Report Delayed By DIP Loan Discussions
eTOYS INC.: KB Toys Bids $3.35 Mil for Intellectual Property
FINE AIR: Files Plan of Reorganization in S.D. Florida

GENESIS HEALTH: UST Amends Multicare Committee Membership
HYBRID NETWORKS: Receives Delisting Notice From Nasdaq
INFU-TECH: Reports Deteriorating Results for Q3 & Year-End
INTEGRATED HEALTH: Moves To Take Over Jacksonville Facility
LASON INC.: Sells U.K. Subsidiary to TNT Post Group NV

LBP INC.: Stockholders Approve Plan of Liquidation
LERNOUT & HAUSPIE: Voluntarily Delists From Nasdaq Europe
LOEWEN GROUP: Asks Court To Set Disclosure Statement Hearing
LTV CORP.: Seeks To Reject Electronic Data Systems Contract
MARINER HEALTH: Resolves Office Lease Issues With Gainesville

MCCLAIN INDUSTRIES: Waste Equipment Concern Posts Q2 Losses
PACIFIC GAS: Creditors' Committee Backs Ratepayers' Committee
POLAROID: Debt Ratings Stay on Watch With Negative Implications
POWERCERV CORP.: Nasdaq Consents to SmallCap Listing for Shares
PREVIEW SYSTEMS: Intends to Wind-Down Remaining Operations

SOTHEBY'S HOLDINGS: Fitch Downgrades Senior Note Rating To BB+
SPINCYCLE: Extends Sr. Discount Note Exchange Offer to May 21
SUNBLUSH: Reports Year End and Q1 Results
UNITED AMERICAN: Revenues Rise, Losses Mount & Plan's Underway
W.R. GRACE: Rejects Vacant Property Lease in Mesquite, Texas

                             *********

BIG V: Proposes $1.27 Million Retention Inventive Plan Seeks
------------------------------------------------------------
Big V Holdings Corp. et al seeks authority to adopt and
implement a Retention Incentive Plan for certain employees of
the debtors.

The program provides for incentives to a variety of key
management and staff employees, store managers and assistant
managers of the debtors to reward high performance by
individuals who contribute to the debtors' financial success.

The Retention Incentive Plan is based on 90% of the bonuses
most covered employees would have received under the previous
existing Incentive Program had the debtors' earnings targets
been fully achieved.  The debtors estimate that payments under
the Retention Incentive Plan would approximate $1.27 million.
The debtors propose that 50% of the payments be paid
immediately with the remaining 50% payable only upon
consummation of a plan in the debtors' cases.

Co-counsel for the debtors are James L. Patton, Robert S. Brady
and Joseph Malfitano of Young Conaway, Stargatt & Taylor and
Myron Trepper and Matthew A. Fledman of Willkie Farr &
Gallagher.


BPI PACKAGING: Primary Lenders Postpone Foreclosure To May 25
-------------------------------------------------------------
BPI Packaging Technologies, Inc. (OTC BB:BPIE), previously
announced that each of the Company's primary secured lenders
gave notice of a public sale of the Company's assets pursuant
to Section 5/9-504 of the Illinois Commercial Code. The sale
was originally scheduled for Monday, May 14, 2001, at 10:00
a.m. Central Daylight Savings time at the offices of LaSalle
Business Credit, Inc., 135 South LaSalle Street, Suite 400,
Chicago, Illinois 60603 and has been continued to May 25, 2001
at the same time and address. A purchaser has submitted an
offer to purchase the equipment from DGJ the primary secured
creditor.

The Company continues to service its customers as it searches
for a purchaser. However, in the event the May 25th sale takes
place, the Company forecasts that there will be insufficient
proceeds to satisfy our secured debt holders in full. In such
an event, unsecured creditors will receive no payment against
their claims and no equity will remain for the stockholders.

The Company also received and accepted the resignations of Gary
Edidin, Allen Gerrard and Theodore L. Koenig from it's Board of
Directors which became effective May 3, 2001.

The Company converts commercially available high molecular
weight, high density polyethylene resins into thin film, which
is either sold directly into industrial or packaging
applications or converted in-house into carryout bags of "T-
shirt sack" design for supermarkets, convenience stores and
other retail markets. The Company utilizes advanced, high
quality extrusion, printing and bag making equipment, which was
installed between 1990 and 1999.


BRIDGE INFORMATION: Bids For Remaining Assets Due By June 20
------------------------------------------------------------
Companies interested in purchasing the remainder of Bridge
Information Systems Inc.'s assets need to notify the company by
May 23, and all formal bids are due by June 20, according to
Dow Jones.  Requests must include what assets the party is
interested in, due diligence requirements, financing sources
and other information.  Interested parties have from May 30
until June 13 to conduct their due diligence on the assets they
are interested in and must also provide a cash escrow deposit
of 10 percent of its proposed purchase price. Bankruptcy Judge
David P. McDonald signed an order on May 11 laying out the
timeline for the sales procedure for the rest of the bankrupt
company's assets. Bridge Information, a financial information
and related services provider, filed for chapter 11 bankruptcy
protection on Feb. 15. (ABI World, May 18, 2001)


BYEBYENOW.COM: Court Clears Way for Carlson to Acquire Assets
-------------------------------------------------------------
A Florida bankruptcy court overseeing the sale of the travel
agency franchise operations of ByeByeNOW.com approved Carlson
Travel Network Associates, Inc. as the highest and best bid.
Carlson is the largest travel agency franchiser in the United
States including Entrepreneur magazine's top U.S. travel
franchise group Carlson Wagonlit Travel.

Carlson Leisure Group President Michael Batt welcomed the
franchisees from ByeByeNOW's portfolio -- including Cruise
Holidays International (CHI), First Discount Travel (FDT),
Travel Professionals International (TPI) and ByeByeNOW (BBN) --
into the Carlson fold by stating his desire to provide existing
franchisees with a secure and stable organization, while
working with them to increase sales, profitability, and market
share.

The purchase provides Carlson with a larger network of
agencies, including in key domestic markets where it has
traditionally had a limited presence. The acquisition adds
approximately 250 agencies and $350 million in annual sales
volume to the more than 1,100 locations currently part of the
Carlson family of franchised travel agency brands, which also
includes Carlson Wagonlit Travel Associates and Results Travel.

Batt stated that every franchisee will be warmly welcomed into
the Carlson family; a series of town hall meetings is currently
being scheduled to enable franchisees to meet and interact with
its new management team.  Batt said that Carlson will listen
carefully to each agency owner and take their individual needs
and concerns into consideration as plans are completed for
their integration with Carlson.  However, Batt noted that
specific plans are already underway to further enhance and grow
the CHI franchise brand.

"Cruise Holidays is already a potent force with an established
brand, a devoted clientele, and professional franchisees who
believe in the power of its name," Batt explained.  "This
acquisition also delivers significant extra volume to Carlson,
and brings us closer to our goal to be the undisputed leader in
cruise sales.  Given the long-term prospects for cruising, we
believe we can leverage our distribution strength to the
benefit of our customers, our franchisees, and our selected
preferred suppliers."

"We hope that the newest members of our Carlson family will
view this as mutually beneficial," stated Carlson's Executive
Vice President Roger E. Block.  "We look forward to getting to
know each franchisee personally, taking the time to listen to
their needs so that we can build a Cruise Holidays
infrastructure that delivers against their expectations.  At
the same time, we are proud to provide some outstanding travel
agencies with the support, strength and stability that Carlson
provides."

The acquisition of the franchise portion of ByeByeNOW comes as
the former company is splitting three ways.  While the travel
agency business will be purchased by Carlson, the other two
business areas encompassing technology and television are not
included in the Carlson acquisition.

"I believe that we have found the best possible home for all of
our franchisees," stated Peter Kowal, President of Cruise
Holidays International. "This acquisition truly creates a win-
win situation for everyone involved. Cruise Holidays offers a
sixteen year history as the largest cruise-only franchise
system in North America, while Carlson is a long-term and
leading travel franchiser with skills and resources that will
enhance our franchisees' ability to grow and prosper."

Batt said that the acquisition provides a tremendous
opportunity for Carlson to realize several long-term
objectives.  "While Cruise Holidays will be operated separately
from Carlson Wagonlit Travel and Results Travel, the combined
buying power of all three brands will benefit all Carlson
franchisees," Batt explained.  "The acquisition delivers
substantial extra volume to our network and will sharply
enhance our ability to deliver better marketing, pricing,
technology and support to all Carlson franchisees."

It is expected that the acquisition will be completed by
May 31, 2001.

Carlson Travel Group, Inc., is a subsidiary of Minneapolis-
based Carlson Companies, Inc.  Brands include: Carlson Wagonlit
Travel Associates, Results Travel, Travel Agents International,
Neiman Marcus Travel Services, Carlson Leisure Fulfillment
Services and Carlson Destination Marketing Services.  In 2001
for the fifth consecutive year, Entrepreneur named the Carlson
Wagonlit Travel Associate Program as the top travel business
franchise; Franchise Times ranked the program as the 6th best
franchise overall.


CASUAL MALE: Files For Chapter 11 Protection in S.D. New York
-------------------------------------------------------------
Casual Male Corp. (NASDAQ: CMAL) and certain of its
subsidiaries have filed voluntary petitions to reorganize their
businesses under Chapter 11 of the United States Bankruptcy
Code.

The filings were made in the United States Bankruptcy Court for
the Southern District of New York. In its filings, the Company
reported total assets of approximately $299 million and total
liabilities of approximately $244 million as of February 3,
2001.

The Chapter 11 Cases are designed to enable the Company to
restructure its debt and operations and help the Company emerge
from Chapter 11 with renewed financial health.

Alan Weinstein, Chairman and Chief Executive Officer of Casual
Male, said, "The voluntary filing, together with our plans to
de-lever our balance sheet, will give us the opportunity to
return Casual Male to financial health." Mr. Weinstein
explained that the reason for the Company's filing stems from a
need to restructure its long-term indebtedness. He noted that
the Company had pursued a number of potential capital market
transactions to provide the necessary financing and avoid the
bankruptcy filing; however, in the end, the Company was unable
to secure financing and ultimately concluded that the
reorganization process was the only viable alternative. Mr.
Weinstein added that it is his expectation that during the
Chapter 11 Case and upon emergence, the Company will remain the
leading multi-channel specialty retailer of apparel for big and
tall men.

The Company expects to have the necessary financing to continue
operations while it restructures. It has signed a $135 million
post-petition credit facility with a lending group, led by
Fleet Retail Finance, Inc. and Back Bay Capital Funding LLC.
The credit facility, upon court approval, will provide loans to
the Company to fund the Company's ongoing operations.

Employees will continue to be paid and vendors will be paid for
post-petition purchases of goods and services in the ordinary
course. The Company intends to seek Court approval to honor
policies regarding gift certificates and other customer
programs, as well as continue its employee benefit programs.
Mr. Weinstein added that he is "grateful to the customers,
vendors, lenders and, of course, the employees during this
challenging period."

The Company has also filed a motion to enable the Company to
take full advantage of the automatic injunction (that commences
immediately upon the Chapter 11 filings) to protect its
substantial net operating loss carryforward. This motion seeks
to limit the buying and selling of the Company's equity and
Convertible Subordinated Notes and the trading of claims that
could effect an "ownership change" for tax purposes, thereby
adversely affecting the Company's valuable NOL tax asset. In
order to make sure that no violations of the automatic stay
occur by claims or securities trading, the Company has
requested approval of certain procedures to govern and restrict
trading.

Casual Male Corp. and its subsidiaries operate businesses
engaged in the retail sale of apparel through its Casual Male
Big & Tall, Repp Big & Tall and B&T Factory Store businesses,
which offer fashion, casual, dress clothing and footwear to the
big and tall man and through its Work n' Gear subsidiary which
sells a wide selection of workwear, health-care apparel and
uniforms for industry and service businesses. The Company's
businesses offer their merchandise to customers through diverse
selling and marketing channels including retail stores,
catalog, direct selling work forces and e-commerce websites.


CASUAL MALE: Case Summary & 25 Largest Unsecured Creditors
----------------------------------------------------------
Lead Debtor: Casual Male Corp.
              dba J. Baker, Inc.
              555 Turnpike Street
              Canton, MA 02021

Debtor affiliates filing separate chapter 11 petitions:

              TCMB&T, Inc.
              Buckmin, Inc.
              Elm Equipment, Inc.
              ISAB, Inc.
              JBI Apparel, Inc.
              JBI Holding Company, Inc.
              JBI, Inc.
              LP Innovations, Inc.
              Morse Shoe, Inc.
              Morse Shoe International, Inc.
              Spencer Companies, Inc.
              TCM Holding, Company, Inc.
              The Casual Male, Inc.
              WGS Corp.
              White Cap Footwear, Inc.

Type of Business: A national specialty retailer that, through
                   its subsidiaries, currently operates 662
                   stores in forty-seven stores.

Chapter 11 Petition Date: May 18, 2001

Court: Southern District of New York

Bankruptcy Case Nos.: 01-41403 to 01-41418

Judge: Robert E. Gerber

Debtors' Counsel: Adam C. Rogoff, Esq.
                   Weil, Gotshal & Manges, LLP
                   767 Fifth Avenue
                   New York, NY 10153
                   (212) 310-8000
                   Fax : (212) 310-8007
                   Email: adam.rogoff@weil.com

Total Assets: $299,341,332

Total Debts: $244,127,198

Consolidated List of Debtors' 25 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim
Amount
------                        ---------------       -----------
State Street Global           Indenture Trustee     $70,000,000
Investors Services Group      (7% Convertible
Stephen Quigley               Subordinated Notes
Corporate Trust               Notes Due 2002)
Department, 6th Floor
PO Box 778
Boston, MA 02102
617-662-1740

DLJ Fund Investment           Noteholder (13%        $6,607,000
George Varughese              Senior Subordinated
277 Park Avenue               Notes)
New York, NY 10172
212-892-3643

The CIT Group                 Trade Debt             $5,496,789
PO Box 1036
Charlotte, NC 28201
Jeff Heller
1211 Ave. of Americas
New York, NY 10019
212-382-6911

GMAC                          Trade Debt             $3,545,980
PO Box 19352
Newark, NJ 07195
Cedric Williams
One Pennsylvania Plaza
New York, NY 10019
212-884-7401

Levi Strauss                  Trade Debt             $2,226,258
Lisa Smith
3125 Chad Drive
Eugene, OR 97408
541-242-7124

GB Investment, LLC            Noteholder             $2,000,000
Mathew Khan                   (13% Senior
40 Broad St., 11th Floor      Subordinated
Boston, MA 02109              Notes)
617-422-7801

HSBC Business Credit, Inc.    Trade Debt             $1,531,316
PO Box 7777-W8720
Philadelphia, PA 19175
John Alfarone
452 5th Ave., 4th Floor
New York, NY 10018
212-525-5132

Century Business Credit       Trade Debt             $1,436,404
PO Box 360815
Pittsburgh, PA 15250
Mike Parks
119 West 40th Street
10th Floor
New York, NY 10018
212-703-3971

Sun Apparel                   Trade Debt             $1,203,776
111 West 40th Street
New York, NY 10018
Joe Zuffalo
180 Ritterhouse Circle
Bristol, PA 19007
215-781-5271

Nautica/Nautica Int'l         Trade Debt             $1,140,755
Iris Barr
3rd Floor, 40 West
57th Avenue
New York, NY 10019
212-841-7122

Quick Response                Trade Debt             $1,060,481
Randy Nevil
4050 Cedar lake
Goddard, KS 67052
800-652-7015

MJ Witman Pilot Fish          Trade Debt             $1,000,000
Peter Faulkner
Opportunity Fund, LP
767 Third Avenue 5th Floor
New York, NY 10017
212-906-1155

Supreme Int'l.                Trade Debt               $978,896
Mike burke
3000 NW 107 Avenue
Miami, FL 33172
305-418-1464

Rosenthal & Rosenthal         Trade Debt               $893,036
Larry Bianco
1370 Broadway
New York, NY 10018
212-356-1400

Tiger Accessories             Trade Debt               $773,547
107 West Golzalez Street
Yoakum, TX 77995
Rosie Iglesias350 Fifth Ave.
Suite 4800
New york, NY 10018
212-563-4567

Big Dog                       Trade Debt               $716,121
Mike Bowe
121 Gray Avenue
Santa Barbara, CA
93101
805-373-5300

Quad Graphics                 Trade Debt               $650,000
PO Box 930505
Atlanta, GA 31193
Nina Smith
N. 63 W. 23075 Main St.
Sussex, WI 53089
414-566-2792

The PVH Combo                 Trade Debt               $640,960
200 Madison Avenue
14th Floor
New York, NY 10016
1001 Frontier Road
Suite 100
Bridgewater, NJ 08807
908-685-0050

Harte Hanks                  Trade Debt                $618,000
Sue Kristin
6701 Baymeadow Drive
Suite E
Glen Burnie, MD 21060
570-826-1172

Mootsie Totsie               Trade Debt                $616,044
Maggie Harkins
101 Sprague Street
Hyde PArk, MA 02136
617-333-4037

Shepard Clothing             Trade Debt                $554,618
Bob Chitel
1350 Ave. of America
Suite 2000
New York, NY 10019
212-582-1005

Capital Mercury              Trade Debt                $540,686
Richard Waskewicz
1372 Broadway
New York, NY 10018
212-704-4820

Wolverine Worldwide          Trade Debt                $518,276
Tony Smith
9341 Courtland Drive
HC 1-24
Rockford, MI 49351
800-748-0455

RGIS                         Trade Debt                $497,569
Bill McGaughey
805 Oakwood
Rochester, Mi 48308
800-382-0710

TKO Apparel                 Trade Debt                 $463,678
Jim Tate
1175 NE 125th St.
Suite 102
N. Miami, FL 33161
305-891-1107


DADE BEHRING: Moody's Junks Senior Debt Ratings
-----------------------------------------------
MMoody's Investors Service downgraded the ratings of Dade
Behring, Inc. These are as follows:

      * $350 million 11.125% senior subordinated notes due 2006
        to C from Caa2,

      * senior implied rating to Caa3 from B3, and

      * senior unsecured issuer rating to Ca from Caa1.

Outlook is negative while approximately $350.0 million of debt
securities are affected.

Moody's related that the company's bankers have blocked the
interest payment on the company's senior subordinated notes due
May 1, 2006. If the interest payment is not made within 30
days, the noteholders will have the ability to accelerate
payment on the notes, Moody's said. The rating agency expects
the company to restructure its capital structure as current
operating results and cash flow are inadequate to sufficiently
pay its debt. Reportedly, the company is currently negotiating
with its financial stakeholders to determine the best long-term
solution to its capital structure.

Dade Behring, Inc. is located in Deerfield, Illinois.  It
supplies vitro products and services to clinical laboratories
worldwide.


EDUCATIONAL INSIGHTS: Reports Progress on Restructuring
-------------------------------------------------------
In the wake of five straight quarters of operating losses,
Educational Insights, Inc. (OTC: EDIN) has completed the first
steps in its internal restructuring.

Reid Calcott, the Company's President and CEO, announced that
the sale of the Company's headquarters building closed on May
11, 2001 producing approximately $1.4 million in additional
cash for operations.  He stated that this, combined with
renewal of the Company's line of credit with Wells Fargo
Business Credit, should provide sufficient cash to allow the
Company time to return to profitable operations.

He added that most of the Company's cost reduction activities
are now in place.  Overall staffing has been reduced from 134
to 98.  The Company's order entry, customer service and
credit/collection activities have been relocated to the
Company's facility in Tennessee where the Company had excess
space.

This permits the relocation of the Company's headquarters
activities into smaller, less expensive space.  In addition,
the Company has reduced other operating expenditures considered
non-essential.  Mr. Calcott reported that through April of this
year these steps had saved the Company approximately $1.4
million.

Mr. Calcott also stated that by 2002, the Company's new product
introductions will be concentrated more in the school market
where products tend to have better margins and longer life-
cycles.

In closing his remarks, Mr. Calcott stated that although he was
pleased with the progress the Company was making in raising
working capital, reducing expenses and returning to an emphasis
on educational products, he was concerned about weakness in the
specialty retail toy trade.  He noted that a number of the
larger retailers such as Store of Knowledge and Zainy Brainy
had recently filed for court protection under Chapter 11 of the
Federal Bankruptcy Code in order to reorganize.  He stated that
the specialty toy business had over-expanded during the prior
decade and this correction was inevitable.  "It will not change
our strategy or where we are going to end up, but it may delay
the speed with which we get there."

Educational Insights, Inc. designs, develops and markets a
variety of educational products, including electronic learning
aids, electronic games, activity books, science and nature
products, board games and other materials for use in both
schools and homes.  The Company's product line, including its
most popular product, GeoSafari(R), appeals to children as well
as students ranging mainly from pre-kindergarten to eighth
grade and is designed to make learning fun.


E.SPIRE COMM.: Quarterly Report Delayed By DIP Loan Discussions
---------------------------------------------------------------
E.spire Communications Inc. won't file its report for the
quarter ended March 31 on time at least in part because the
company is trying to finalize the terms of its debtor-in-
possession (DIP) financing. In a not-timely Form 10-Q filed
Wednesday with the Securities and Exchange Commission, the
Herndon, Va.-based telephone service provider says it's in
discussions with its lenders and bondholders over amendments to
its senior secured credit facility and long-term debt
obligations. (ABI World, May 18, 2001)


eTOYS INC.: KB Toys Bids $3.35 Mil for Intellectual Property
------------------------------------------------------------
KB Toys, the nation's largest combined mall-based and online
specialty toy retailer, announced that it has successfully bid
approximately $3.35 million for certain eToys intellectual
property assets and services as part of the auction process in
eToys' bankruptcy proceedings. The assets include eToys' trade
names, logos, URLs and trademarks.  eToys also has agreed to
provide certain e-mail services, including contacting its
customers with information about how they can continue their
online toy shopping experience through KBkids.com, KB Toys'
online presence.

KB Toys will continue online operations in Denver, Colorado as
KBkids.com. It will integrate the acquired assets into
KBkids.com as part of its ongoing strategy to provide customers
with the most convenient shopping experience both in stores and
online. This transaction follows KB Toys' successful bid on
April 26, 2001, for a substantial portion of eToys' inventory,
which will be offered at KBkids.com as well as in KB Toy Works,
KB Toy Outlet and KB Toy Liquidator stores at great value
prices.

"In four short years, eToys built the most visible and
operationally sound online retail toy site in the world," said
Michael L. Glazer, KB Toys' CEO. "KBkids.com has enjoyed its
own success providing customers with exceptional customer
service and fulfillment. We will use these new assets to
further enhance the customer convenience of shopping through
KBkids.com."

Fully integrated with KB Toy stores, KBkids.com offers the best
return policy of all online toy retailers. Consumers can shop
online at KBkids.com and return or exchange their purchases at
any of the more than 1,300 KB Toy stores nationwide. KB is the
only toy retailer to offer this convenient option for its
customers.

Glazer continued, "Without question, eToys created a unique
shopping environment that customers responded to very
favorably.  We have maintained all along that the "bricks and
clicks" formula, which offers customers both store and online
shopping options, would allow customers the most flexibility
and be the most successful in the long term."

In January, KBkids.com received high marks for customer service
and site performance from Forrester Research and Keynote, both
highly respected authorities in online retail performance.
Forrester's PowerRankings called KBkids.com's customer service
the "fastest" of e-commerce toy sites tested and Keynote ranked
KBkids.com as one of the top five most accessible sites during
the 2000 holiday season.  KBkids.com also opened its own
dedicated fulfillment center in Danville, Kentucky, last year
allowing for faster and more reliable order processing.

KB Toys is the nation's largest combined mall-based and online
specialty toy retailer, operating more than 1,300 stores in all
50 states, the American Territory of Guam and the Commonwealth
of Puerto Rico, doing business as KB Toys, KB Toy Works, KB Toy
Outlet, KB Toy Liquidators, KB Toy Express and with online
shopping at KBkids.com (http://www.kbkids.com). Offering a
wide and competitively priced selection of toys and video
games, commitment to customer service, convenient mall
locations and a growing online shopping site, including the new
KBwholesale.com, KB Toys combines the speed of the Internet
with the convenience of returns at any store.  KB Toys is
headquartered in Pittsfield, Massachusetts, and employs more
than 13,000 associates nationwide.

KB Toys became a privately held company in December 2000
through a management buyout in partnership with Bain Capital
Inc.


FINE AIR: Files Plan of Reorganization in S.D. Florida
------------------------------------------------------
Fine Air Services Corp. filed its Plan of Reorganization with
the U.S. Bankruptcy Court for the Southern District of Florida.
The Plan, filed jointly with all the Fine Air subsidiaries
involved in the Chapter 11 reorganization, has the support of
the Company's senior lender and majority bondholder.

"We are very pleased with both the Plan and the spirit of
cooperation that made its filing possible," said Barry H. Fine,
Fine Air's President.  "We are hopeful that the Court will
confirm the Plan by July, and look forward to emerging from
Chapter 11," said Fine.  The Plan proposes that continued
financing be provided by Bank of America, a payment plan to
trade creditors, and conversion of the Company's bonds to
equity and performance notes.  The plan will be submitted to
Fine Air's creditors for voting, and presented to the
Bankruptcy Court for confirmation in July.

Since 1994, Fine Air has been the largest scheduled air cargo
carrier serving Miami International Airport, based on tons of
international freight.

The Company's scheduled cargo services provide seamless
transportation through its Miami International Airport hub,
linking North America, Europe, Asia and the Pacific Rim with 28
South and Central American and Caribbean cities.  Fine Air's
1,200 customers worldwide include international and domestic
freight forwarders, integrated carriers, passenger and cargo
airlines, major shippers, the United States Postal Service, and
the U.S. Military.


GENESIS HEALTH: UST Amends Multicare Committee Membership
---------------------------------------------------------
Frederick J. Baker, Esq., Senior Assistant U.S. Trustee,
announced that he has appointed the following to represent the
body of unsecured creditors in The Multicare Companies, Inc.
chapter 11 cases:

      (1) Chase Manhattan Trust Company, N.A.
          Attention: Francis J. Grippo, VP
          450 West 33rd Street, New York, NY 10001-2697
          Phone: (212) 946-3558, Fax: (212) 946-8157

      (2) Mackay Shields, LLC as Investment Advisor
          Attention: Donald E. Morgan, III
          9 West 57th Street, 33rd Floor, New York, NY 10019
          Phone: (212) 230-3849, Fax: (212) 758-4077

      (3) Gulfsouth Medical Supply, Inc.
          Attention: Matthew N. Adkins
          4345 Southpoint Blvd., Jacksonville, FL 32256
          Phone: (904) 332-3287, Fax: (904) 332-3223

American Express Financial Corporation has resigned from the
Multicare Committee. (Genesis/Multicare Bankruptcy News, Issue
No. 9; Bankruptcy Creditors' Service, Inc., 609/392-0900)


HYBRID NETWORKS: Receives Delisting Notice From Nasdaq
------------------------------------------------------
Hybrid Networks Inc. (Nasdaq: HYBR), the worldwide leader in
high-capacity MMDS fixed broadband wireless Internet access
systems, announced that it has received letters from the Nasdaq
National Market indicating that the company no longer complies
with the $50 million market capitalization and $5 minimum bid
price requirements stated in Marketplace Rule 4450.

The letters indicated that Hybrid Networks has until June 6,
2001, to comply with the market capitalization requirement rule
and that the company must sustain a market cap of at least $50
million for a minimum of 10 consecutive days. In addition,
Hybrid has until July 2, 2001, to satisfy the $5 minimum price
rule and it must maintain this price for 10 consecutive days.

According to the letters, the company will be subject to
delisting from the Nasdaq National Market if it fails to meet
either of these requirements. If this occurs the company can
appeal the delisting to a Nasdaq Listing Qualifications Panel
and seek to list its shares on the Nasdaq Small Cap Market.

                  About Hybrid Networks

Headquartered in San Jose, Calif., Hybrid Networks Inc.
designs, develops, manufactures and markets fixed broadband
wireless systems that enable telecommunications companies,
wireless systems operators and network providers to offer high-
speed Internet access to businesses and residences. Hybrid was
first to market with patented two-way wireless products that
focus on the MMDS and WCS spectrum in the United States. The
company has also deployed systems in the 3.5 GHz band and
similar spectrum abroad.

Hybrid's customers include Sprint, WorldCom, Look
Communications, Thomcast Communications and Andrew Corp. With
systems in use in 75 markets across six continents, Hybrid is
part of more fixed broadband wireless deployments than all of
its competitors combined.

For more information, visit http://www.hybrid.com


INFU-TECH: Reports Deteriorating Results for Q3 & Year-End
----------------------------------------------------------
Infu-Tech, Inc. (Nasdaq: INFU), a leading specialty
pharmaceutical company pursuing wireless health commerce
activities via its Smartmeds.com subsidiary, today reported
fiscal 2001 financial results for the period ending March 31,
2001.

The net loss for the quarter was ($1,946,000), compared with
net loss of ($751,000) reported for the third quarter of fiscal
2000.  Revenues for the third quarter were $1,695,000, as
compared with $4,350,000 reported for the same period last
year. The decrease in revenue was primarily due to the phasing
out of some business categories and the loss of Ceredase
business, as the company continues to direct resources toward
its specialty pharmaceuticals and wireless businesses.

Included in the operating loss was a write-off of a receivable
from affiliates of $635,000. The Company was 38% owned by Kuala
Healthcare, Inc. ("KUAL"). The remaining 62% of the Company's
equity was publicly traded. The Company has a security interest
in all or most of its shares which are owned by KUAL, to
collateralize indebtedness of KUAL or its subsidiaries to the
Company which totaled $2,610,000 at March 31, 2001. That
indebtedness is also secured by a mortgage on a property owned
by a KUAL subsidiary.

In April 2001, KUAL commenced a proceeding under Chapter 7 of
the Bankruptcy Code. Due to these proceedings, the Company is
entitled to exercise its' rights to foreclose the security
interest in its shares and the mortgage on the property. It is
likely that the trustee in the KUAL bankruptcy proceeding will
challenge the mortgage.

In its financial statements for the quarter ended March 31,
2001, the Company (i) reflected as contra-equity the notes
secured by the market value of the Company's stock on April 27,
2001, the day on which KUAL commenced proceedings under Chapter
7 of the Bankruptcy Code of the shares which secure that
indebtedness and (ii) wrote off the balance of the indebtedness
from KUAL and its subsidiaries.

The net (loss) in the third quarter of 2001, before the write
off due to the KUAL bankruptcy, was ($1,311,000) or ($.41) per
share compared to a net (loss) in the third quarter of 2000 of
($751,000) or ($0.22) per share. After the write off, the loss
for the 2001 period was ($1,946,000) or ($0.61) per share.

Edward Letko joined Infu-Tech in late April as President and
Chief Executive Officer. Mr. Letko's executive leadership in
sales and marketing for the healthcare industry is a valued
addition to the future direction of the firm.

Commenting on the Company's results, Letko stated, "The results
reflect the Company's concentrated efforts to develop and
launch its wireless healthcare subsidiary, Smartmeds.com. In
the short time I've been here, I have focused my efforts to a
returned emphasis on our core business and to review our
managed care contracts for profitability."

                    About Infu-Tech, Inc.

Infu-Tech, Inc. is a leading provider of high-quality, cost
efficient specialty pharmaceuticals and medical services to
patients in their homes, ambulatory infusion suites and in
long-term care facilities. Via its subsidiary Smartmeds.com,
the company operates the Smartmeds.com Web site, which includes
an online pharmacy and interaction with medical professionals,
offers the convenience and consistency of ordering specialty
medications and other medical products with a simple mouse
click. With more than 15 years of clinical experience and
managed care relationships with enrollees of large employer
groups, Medicare and Medicaid, Infu-Tech has earned a
reputation
for patient satisfaction and clinically proven success in
delivering high levels of service to special need patients.
Infu-Tech is accredited by the Joint Commission on
Accreditation of Health Care Organizations (JCAHO) and the
company's products and services are marketed in 27 states.
Infu-Tech is a publicly traded company, Nasdaq: INFU.


INTEGRATED HEALTH: Moves To Take Over Jacksonville Facility
-----------------------------------------------------------
Integrated Health Services, Inc. seeks the Court's authority,
pursuant to Sections 105 and 363 of the Bankruptcy Code and
Rule 6004 of the Bankruptcy Rules, for Debtor Integrated Health
Services of Jacksonville, Inc. (IHS-Jacksonville) to take over
operation of a facility which is being managed by IHS-
Jacksonsville on behalf of the operator and owner Dunns Creek,
Ltd.

Specifically, the Debtors ask Judge Walrath to approve an
Operations Transfer Agreement by and between IHS-Jacksonville
and Dunns Creek dated March 1, 2001. For the purposes of the
motion, Transfer Agreement includes not only the Transfer
Agreement itself, but, in addition, all accompanying documents
and related transactions, including, but not limited to, the
Lease and the Purchase Option Agreement.

The facility is a 120-bed skilled nursing facility, known as
Lanier Manor, located in Jacksonville, Florida. The Facility is
managed by IHS-Jacksonsville on behalf of Dunns Creek pursuant
to a Management Agreement, dated as of May 13, 1994, between
IHS-Jacksonsville and Dunns Creek.

Dunns Creek desires to cease operating the Facility, and
transfer the Facility's operations and certain assets related
to the operation of the facility to IHS-Jacksonville. IHS-
Jacksonville desires to takeover the Facility's operations and
accept transfer of the Facility related assets.

Subject to the terms and conditions of the Transfer Agreement,
Dunns Creek will transfer and IHS-Jacksonville will takeover
the Facility's operations and take title to certain assets
related to the operation of the Facility. In addition, at
Closing, the Management Agreement will terminate and the
Parties will enter into the Lease and Purchase Option
Agreement. Pursuant to the Lease and Purchase Option Agreement,
Dunns Creek will lease the Facility to IHS-Jacksonville and
grant IHS-Jacksonville an immediately exercisable option to
purchase the Facility and underlying real properly.

The Debtors submit that the Debtors' estates and creditors will
benefit from the transactions contemplated in the Transfer
Agreement:

      -- Subsequent to Closing, IHS-Jacksonville will he free
from the obligations and limitations of the Management
Agreement;

      -- At Closing, the Debtors will be granted an immediately
exercisable option to purchase the Facility and underlying real
property, which, if exercised, will enrich the Debtors' estates
to the extent of the fair market value of the assets;

      -- Subsequent to exercising the purchase option, the
Debtors may dispose of the Facility for the benefit of their
estates and creditors, subject to applicable state and federal
regulations. (Integrated Health Bankruptcy News, Issue No. 16;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


LASON INC.: Sells U.K. Subsidiary to TNT Post Group NV
------------------------------------------------------
Lason, Inc. (OTC:LSONE) announced that its wholly-owned
subsidiary, Lason International, Inc. has completed the sale of
its U.K. based, Lason U.K. Limited, subsidiary to TNT Post
Group NV (TPG). Terms of the sale were not released.

Ronald D. Risher, President and Chief Executive Officer said,
"The completion of this transaction represents the achievement
of another milestone in the execution of our restructuring plan
that has been underway since the fall of 2000. We are pleased
with this accomplishment. The transaction provides the Company
with additional working capital, resources for the Company's
earnout creditors, and the continuation of the Company's
efforts to de-leverage its balance sheet. The Company remains
focused and committed to executing its restructuring plan and
providing superior service to our customers."

The sale of the U.K. subsidiary, which provides a variety of
data and document management services from its primary
locations in the United Kingdom, is consistent with the
Company's strategic announcement in December 2000 to focus on
core markets in North America. Mr. Risher noted however that
the Company fully intends to continue supporting its North
American customers' needs for image and data capture and output
services in Europe through a services agreement negotiated as
part of the aforementioned transaction.

                      About the Company

LASON is a leading provider of integrated information
management services, transforming data into effective business
communication, through capturing, transforming and activating
critical documents. LASON has operations in the United States,
Canada, Mexico, India, and the Caribbean. The company currently
has over 85 multi-functional imaging centers and operates over
60 facility management sites located on customers' premises.
LASON is available on the World Wide Web at
http://www.lason.com/.


LBP INC.: Stockholders Approve Plan of Liquidation
--------------------------------------------------
LBP, Inc. (OTC Bulletin Board: LBPI) announced that, at its
Annual Meeting held on May 16, 2001, stockholders approved the
Plan of Liquidation previously adopted by the Board of
Directors.

The Board instructed management to immediately begin the
dissolution and liquidation process in accordance with Delaware
law. In this connection, the Board approved an initial
liquidating distribution in the approximate amount of $5.50 per
share, subject to the Plan of Liquidation and compliance with
Delaware law.

The time for payment of the initial distribution is determined
by the dissolution requirements of Delaware law. Although the
dissolution procedure could delay payment for up to 8 months,
the Company will request the Delaware Chancery Court to permit
payment of the initial liquidating distribution at an earlier
date.

LBP's book value per share at March 31, 2001 was $5.81.


LERNOUT & HAUSPIE: Voluntarily Delists From Nasdaq Europe
---------------------------------------------------------
Bankrupt Belgian speech technology company Lernout & Hauspie
(L&H) has voluntarily delisted from Nasdaq Europe, according to
Reuters. L&H requested the delisting because it did not meet
Nasdaq Europe's listing requirements, including sufficient
market capitalization. The U.S. Nasdaq delisted L&H in
December. The company is operating under bankruptcy protection
both in the United States and in Belgium. (ABI World, May 18,
2001)


LOEWEN GROUP: Asks Court To Set Disclosure Statement Hearing
------------------------------------------------------------
In anticipation of the filing of their Second Amended Plan, The
Loewen Group, Inc. ask the Court to set a hearing on the Second
Amended Disclosure Statement that will accompany this Second
Amended Plan.

The Debtors desire that the Second Amended Plan that they are
going to file will reflect an agreement with the Creditors'
Committee and certain other key parties on nearly all plan
issues, and will adopt the recommendations of Professor James
J. White, the mediator appointed by the Court in the adversary
proceeding involving the Debtors' collateral trust agreement
(the "CTA"), regarding creditor recoveries based upon his
objective evaluation of the CTA dispute.

The Debtors are eager to proceed to a vote on the Second
Amended Plan and to a hearing on the adequacy of the Second
Amended Disclosure Statement.

In particular, the Debtors are eager that the recommendations
by Professor White that will be set forth in the Second Amended
Plan are submitted to a vote, to determine whether his
recommendations will be acceptable to creditors. The Debtors
note that such recommendations by Professor White reflect an
objective, independent assessment of the merits of the CTA
dispute by one of the leading experts in bankruptcy and
commercial laws.

The alternative of waiting many months -- possibly years -- for
a final ruling by the Court or an appellate court that would
resolve the CTA dispute before moving forward with the plan
process is not in the interests of the Debtors' estates or the
creditors, the Debtors contended.

The Debtors told Judge Walsh they have been prepared
operationally to emerge from bankruptcy for some months. They
believe that they are well-positioned to emerge from chapter 11
with fresh momentum, as a result of their business
restructuring efforts.

Proceeding with the plan process and, ultimately, emergence
from chapter 11 as soon as possible is in the interests of all
parties, the Debtors represented.

First, in light of the Debtors' positive recent financial
performance, the value of the enterprise that will be
distributable to interested parties will be relatively
favorable.

Moreover, an early emergence from chapter 11 will result in
earlier distributions, of property to creditors under the plan
of reorganization that ultimately is approved. In addition,
emergence from chapter 11 as soon as possible will help
minimize the ongoing costs associated with remaining in
bankruptcy. Finally, failure to proceed with the plan process
at this time will place at risk the significant progress that
the Debtors have made to date in plan negotiations with the
Creditors' Committee and other key parties.

In contrast, further delay in the plan process could result in
significant setbacks from the progress that has been made with
these parties, the Debtors cautioned. To give some examples of
what might happen, the Debtors reminded Judge Walsh that,

      -- if litigation of the CTA dispute continues to be
pursued, there is no assurance, the Debtors note, that the
agreement with the Creditors' Committee and certain CTA parties
can be preserved either from a negotiation standpoint or as a
practical matter;

      -- as market conditions change for debt and equity
securities and the value of the Debtors' business assets,
longer delays will increase the likelihood that the value and
capitalization of the reorganized company and the terms of the
securities to be issued under the plan will need to be
revisited;

      -- in the instance of the Blackstone Agreement, the
agreement specifically provides that it is conditioned on the
confirmation of a plan of reorganization prior to / the end of
the year 2001.

In short, the Debtors believe that the Second Amended Plan will
present the best available opportunity to determine whether the
parties to the CTA Proceeding will accept a non-litigated
resolution of the CTA dispute, on terms that Professor White
considers to be fair and reasonable. Indeed, the Debtors
believe that the only way to accurately determine whether the
parties will accept the proposed resolution is to submit the
proposal to a vote. In the Debtors' view, until the Second
Amended Plan is submitted to a vote, there simply is no way to
determine whether the parties' actions amount to negotiating
tactics or their actual positions.

In light of the above matters, the Debtors requested that a
hearing be set on the adequacy of the Second Amended Disclosure
Statement. The Debtors assured Judge Walsh that, in accordance
with Rules 2002(b)(1) and 3017(a) of the Federal Rules of
Bankruptcy Procedure and Rule 3017-1 of the Local Rules, at
lease 25 days' written notice by mail of the hearing on the
Second Amended Disclosure Statement will be provided to the
United States Trustee, creditors, equity security holders and
other parties in interest, together with such additional
provisions for notice as the Court may direct.

The motion has been scheduled to be heard by the Court on May
25, 2001. (Loewen Bankruptcy News, Issue No. 39; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


LTV CORP.: Seeks To Reject Electronic Data Systems Contract
-----------------------------------------------------------
Appearing through Jeffrey B. Ellman of the Columbus branch of
Jones, Day, Reavis & Pogue, and David G. Heiman, Richard M.
Cieri, and Carl E. Block of Jones Day in Cleveland, The LTV
Corporation presented a Motion seeking Judge Bodoh's authority
to reject all of the Debtors' executory contracts with
Electronic Data Systems Corporation as burdensome to the
estates.

                    The Payroll Contract

The Debtors tell Judge Bodoh that in December 1996, EDS and LTV
Steel entered into a payroll contract under which EDS agreed
to:

      (a) Develop and implement a new computerized payroll
system to replace LTV Steel's existing computerized payroll
system; and

      (b) Provide administrative services to LTV Steel with
respect to its existing computerized payroll system.

Each of these functions have separate terms and conditions, and
were included in one agreement for purposes of convenience
only.

In April 2001 LTV and EDS modified the Payroll Contract by
segregating the Payroll Project Component and the Payroll
Service Component of the Payroll Contract into two separate
agreements: (1) the Agreement for Payroll Business
Administration System, and (2) the Agreement for Payroll
Business Process Services. The parties have agreed that this
modification merely separated severable contractual components,
and therefore the Payroll System Agreement and the Payroll
Service Agreement each remain prepetition executory contracts
rather than new postpetition agreements.

Despite EDS's efforts to date, the new payroll system has not
been completed. The Debtors told Judge Bodoh they would be
required to pay EDS an additional $3.5 million to complete the
new payroll system. Moreover, EDS has informed the Debtors
that, upon completion, the new payroll system would require
substantially more personnel and money to operate on a going-
forward basis than the Debtors originally anticipated.
Accordingly, the Debtors have determined that the completion
and implementation of the new payroll system would not be cost-
effective.

                    The Benefits Contract

In September 1997 EDS and LTV Steel entered into a contract
under which EDS agreed to:

      (a) Develop and implement a new computerized health,
welfare and pension benefits system to replace LTV's existing
computerized health, welfare and pension benefits system; and

      (b) Provide administrative services to LTV with respect to
its existing computerized health, welfare and pension benefits
system.

This Benefits Project Component and the Benefits Service
Component of the Benefits Contract each have separate terms and
conditions and were included in one agreement for purposes of
convenience only.

In April 2001 LTV and EDS modified the Benefits Contract by
segregating the Benefits Project Component and the Benefits
Service Component of the Benefit Contract into two separate
agreements: (1) the Agreement for Health and Welfare and
Pension Administration System, and (2) the Agreement for Health
and Welfare and Pension Benefits Services. The parties have
agreed that this modification merely separated severable
contractual components, and therefore the Benefits System
Agreement and the Benefits Service Agreement each remain
prepetition executory contracts rather than new postpetition
agreements.

Despite EDS's efforts to date, the new benefits system has not
been completed. The Debtors told Judge Bodoh they would be
required to pay EDS an additional $3.3 million to complete the
new benefits system. Moreover, EDS has informed the Debtors
that, upon completion, the new benefits system would require
substantially more personnel and money to operate on a going-
forward basis than the Debtors originally anticipated.
Accordingly, the Debtors have determined that the completion
and implementation of the new benefits system would not be
cost-effective.

By Motion the Debtors sought authority to reject the Payroll
System Agreements and the Benefits System Agreements as
burdensome to these estates. In the exercise of its business
judgment, LTV has determined that the rejection of these
agreements is in the best interests of its estate and
creditors. The costs associated with implementing the systems
would be substantially higher than LTV originally anticipated,
thereby eliminating the intended benefits of the systems. In
particular, LTV originally understood that the systems would be
largely automated and could be operated efficiently with a few
people. By contrast, EDS now has informed LTV that the proper
operation of the systems will require at least 17 individuals,
and has requested that LTV agree to amend the systems agreement
so that LTV would bear the cost of additional EDS personnel. As
a result, LTV has determined that the completion and
implementation of the systems would not be cost- effective in
the long term. (LTV Bankruptcy News, Issue No. 8; Bankruptcy
Creditors' Service, Inc., 609/392-00900)


MARINER HEALTH: Resolves Office Lease Issues With Gainesville
-------------------------------------------------------------
Mariner Health Care, Inc. dba Mariner Rehabilitation (a debtor-
affiliate of Mariner Post-Acute Network, Inc.) is the lessee
and sublessor with respect to office space located at 1856 1-F
Thompson Bridge Road, Gainesville, Georgia. The lease term
extends from August 1, 1996 to July 31, 2003 with monthly
payments in the amount of $3,329 which were to increase
throughout the term of the lease. The Debtor also gave the
lessor Gainesville Developments, Ltd. a security deposit in the
amount of $3,329.

The Sublease, at a monthly payment of $3,670, was for a one-
year term commencing on August 1, 1998 with an option to renew
from year to year for the remaining term of the Lease. The
sublessee Hall County Board of Health/Children Medical Services
exercised the option once, and the sublease terminated on July
31, 2000.

In or about July 2000, Gainesville, without notifying the
Debtor, entered into an independent verbal lease agreement with
the Subtenant and has been collecting rent directly from the
Subtenant since July, 2000. Unaware of the New Lease, the
Debtor also continued to make regular monthly payments to the
Lessor, in the amount of $3,780, for the months of July,
August, and September 2000, for a total of $11,340.

Therefore, the Lessor owes to the Debtor $11,340 for the double
rent collected and $3,329 on account of the Deposit, for a
total obligation of $14,669.

The Parties agreed that:

      (1) The Lease is hereby deemed rejected as of July 31,
          2000;

      (2) Within ten days of the entry of the Order approving
          this Stipulation, the Lessor shall pay to the Debtor
          the sum of $14,669 on account of amounts owed to the
          Debtor for overpaid rent, and for the Deposit;

      (3) The Lessor waives any and all prepetition and
          administrative claims against the Debtor's estate
          arising under or relating to the Lease, and the
          Debtor's use or occupancy of the Premises.

Judge Walrath gave her stamp of approval to the agreement and
stipulation between the parties. (Mariner Bankruptcy News,
Issue No. 14; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


MCCLAIN INDUSTRIES: Waste Equipment Concern Posts Q2 Losses
-----------------------------------------------------------
McClain Industries, Inc. (Nasdaq: MCCL) announced its sales and
a loss for the second quarter and six months ended March 31,
2001.

Sales for the second quarter ended March 31, 2001 were
$24,748,635 compared to $38,334,080 for the same quarter a year
earlier. The net loss for the quarter was ($1,326,926) or
($.29) a share compared to net income of $799,614 or $.17 a
share for the quarter ending March 31, 2000. Sales for the six
months ended March 31, 2001 were $45,836,321 compared to
$67,926,698 for the six months ended March 31, 2000. The net
loss for the six months ended March 31, 2001 was ($2,449,790)
or ($.54) a share compared to net income of $1,277,884 or $.28
a share for the same period in the prior year.

"The sales decrease of 32% from the previous year was due
primarily to an abrupt slowdown in the manufacturing sector of
the economy," said Kenneth D. McClain, President and Chief
Executive Officer. "The restructuring charges and investing
writedowns were the result of an evaluation of our current
operating systems and certain inventory levels in order to make
the necessary reductions to bring operating costs and inventory
levels into line with the current sales volume."

McClain Industries is one of the nation's leading manufacturers
of solid waste handling and transportation equipment for the
solid waste disposal and recycling industry and of a
diversified line of dump truck bodies.


PACIFIC GAS: Creditors' Committee Backs Ratepayers' Committee
-------------------------------------------------------------
While Judge Montali ruled that ratepayers are not creditors
and, therefore, have no role in bankruptcy proceedings, the
Creditors Committee, as stated in its motion, believes that
ratepayers can and should have their voices heard in
appropriate venues such as the California Public Utilities
Commission and the state legislature.

We look forward to working with all involved participants as we
move through the bankruptcy process in the most fair and
expedient manner possible.

The Official Committee of Unsecured Creditors of PG&E
(Creditors Committee) is appointed by the Bankruptcy Court and
the U.S. Trustee as required by the Bankruptcy Code to
represent the interests of all unsecured creditors of Pacific
Gas and Electric (PG&E). These creditors consist of
approximately 30,000 claimants, including individuals, small
and large businesses, state and municipal governments, lenders
and others.


POLAROID: Debt Ratings Stay on Watch With Negative Implications
---------------------------------------------------------------
Standard & Poor's ratings for Polaroid Corp. remain on
CreditWatch with negative implications, where they were placed
on Oct. 20, 2000. These are:

      * Corporate credit rating                B-
      * Senior secured debt                    B-
      * Senior unsecured debt                  CCC+
      * Senior unsecured shelf debt (prelim.)  CCC+
      * Subordinated shelf debt (prelim.)      CCC


On May 16, 2001, Polaroid announced its second real estate sale
in the past week, which should generate over $100 million in
gross proceeds and approximately $61 million in net cash
proceeds. At least $30 million will be used to reduce debt,
consistent with the company's stated objectives of maximizing
cash flow and reducing debt. Also, Polaroid obtained additional
temporary waivers of various covenant violations on its lines
of credit through July 12, 2001. While positive, these actions
are not sufficient to resolve the CreditWatch listing.

Resolution will depend on Polaroid's refinancing of debt
maturities due in December 2001 and January 2002, securing
sufficient liquidity to manage its business, and stabilizing
operating performance. Failure to resolve these issues in the
short term would likely lead to a downgrade.


POWERCERV CORP.: Nasdaq Consents to SmallCap Listing for Shares
---------------------------------------------------------------
PowerCerv Corporation (Nasdaq:PCRV) announced that on May 16,
2001, a Nasdaq Listing Qualifications Panel issued its decision
with regard to PowerCerv's request for continued inclusion on
The Nasdaq National Market pursuant to an exception from
Nasdaq's minimum bid price, market value of public float and
net tangible assets requirements. The decision followed an oral
hearing before the hearing panel on April 6, 2001.

The hearing panel determined to transfer the listing of
PowerCerv's common stock to The Nasdaq SmallCap Market,
effective with the open of trading on Friday, May 18, 2001,
pursuant to a temporary exception from the listing
requirements. The exception is subject to PowerCerv meeting
certain conditions, including:

    (1) On or before June 5, 2001, PowerCerv must demonstrate a
        closing bid price of at least $1.00 per share and,
        immediately thereafter, a closing bid price of at least
        $1.00 per share for minimum of 10 consecutive trading
        days.

   (2) PowerCerv must be able to demonstrate compliance with all
       requirements for continued listing on The Nasdaq SmallCap
       Market.

PowerCerv currently satisfies all requirements for continued
listing on The Nasdaq SmallCap Market, with the exception of
the $1.00 per share minimum bid price requirement. To address
this requirement, PowerCerv has included a proposal in its
proxy statement for its annual meeting of shareholders,
scheduled for June 1, 2001, to amend its articles of
incorporation to effect a reverse stock split. It is hoped that
a reverse stock split, if approved by shareholders, will
increase the trading price of PowerCerv's common stock above
the $1.00 minimum bid price requirement. The proposal provides
for a split ratio range of between 1-for-3 and 1-for-9.

PowerCerv's Board of Directors is to determine the split ratio
within that range at the time of filing the amendment to the
articles of incorporation based on a number of factors, with
the goal of enhancing the likelihood that the per share trading
price following the reverse stock split is well above the $1.00
level. If shareholders fail to approve the proposed amendment
to
the articles of incorporation, it is unlikely PowerCerv will
satisfy the hearing panel's condition by June 5, 2001. In such
case, PowerCerv's common stock would be subject to delisting.

The exception will expire on June 5, 2001. For the duration of
the exception, PowerCerv's Nasdaq symbol will be "PCRVC." In
the event PowerCerv is deemed to have met the terms of the
exception prior to the expiration of the exception period,
PowerCerv's common stock will continue to be listed on The
Nasdaq SmallCap Market.

Subject to obtaining shareholder approval of the proposed
amendment to its articles of incorporation to effect a reverse
stock split, PowerCerv believes it can meet these conditions.
However, there can be no assurance that it will do so. If at
some future date the PowerCerv's common stock should cease to
be listed on The Nasdaq SmallCap Market, the stock may be
eligible for quotation by market makers on the Over-the-Counter
Bulletin
Board.

                        About PowerCerv

PowerCerv provides Integrated Enterprise Response to companies
around the globe. Featuring fully integrated enterprise
applications with innovative e-business capabilities, PowerCerv
solutions enable companies to completely integrate and extend
the management of front-office and back-office operations. With
Integrated Enterprise Response, companies extend their
enterprise operations across the virtual supply chain and
successfully respond to customers, suppliers, partners and
employees around the world. For more information visit
http://www.powercerv.com


PREVIEW SYSTEMS: Intends to Wind-Down Remaining Operations
----------------------------------------------------------
Preview Systems, Inc. (Nasdaq:PRVW), a commerce platform and
services provider for the secure delivery of digital goods over
the Internet, announced that it intends to adopt a plan to wind
down the surviving elements of its business for the purpose of
returning the company's remaining capital to stockholders. This
plan is expected to be adopted by the company's board of
directors following the announcement regarding the sale of
Preview's electronic software distribution (ESD) business to
Aladdin Knowledge Systems (Nasdaq:ALDN).

In addition to the sale of the ESD business, Preview Systems is
currently in negotiations with other third parties for the sale
of its remaining assets, including the technology related to
electronic music distribution (EMD) and other non-software
digital products. If, and when, concluded, Preview Systems
expects that the financial impact will not be material to its
overall cash position.

Since its announcement in February 2001 that it was exploring
strategic alternatives, the company's board of directors, with
the assistance of its advisors, has undertaken considerable
efforts to explore many strategic alternatives to maximize
stockholder value. It has concluded that the best interests of
its stockholders will be served by selling its assets to
Aladdin, winding down the remaining business of the company and
distributing the available cash to its stockholders.

"As indicated in our prior communications this year to
stockholders, we believe that the value of our technology may
be better leveraged when combined with that of another
company," said Vincent Pluvinage, CEO and President of Preview
Systems. "Because the overall market has evolved more slowly
than originally forecasted, our solution may be more viable as
a product line of a larger company than as a stand-alone public
entity."

Between now and the conclusion of the sale of its assets and
the winding down of its business, Preview Systems will operate
its business in a manner consistent with providing ongoing
support for its customers while minimizing all other cash
expenditures. Preview Systems and Aladdin will immediately
begin to work cooperatively in the areas of research and
development, customer support, sales and marketing. At the end
of the second quarter of 2001, Preview Systems anticipates it
will employ approximately 30 people, of which 20 are expected
to be retained by Aladdin upon closing of the transaction.

Consistent with the company's current financial guidance,
operating expenses for the second quarter are expected to be
between $4.5 million and $5.0 million exclusive of any one-time
restructuring charges, and any acquisition related costs or
stock based compensation charges. In addition, a restructuring
charge for the second quarter is expected to be between $4.5
million and $5.0 million, reflecting costs associated with our
further reductions in force and the costs of retention and
severance packages for remaining employees and executives.
Approximately $1.0 million of this charge is non-cash related.
Preview Systems currently projects that its cash and marketable
securities balance will be between $65 million and $66 million
at the end of the second quarter, excluding any proceeds from
its sale of assets.

Preview Systems expects to submit to its stockholders for their
approval a plan to sell substantially all of the assets of the
ESD business to Aladdin and subsequently wind down the
remaining business. Upon stockholder approval and after the
closing of the Aladdin asset sale, Preview Systems will
adequately provide for its debts and liabilities, and then
distribute the remaining capital to its stockholders in one or
more cash distributions. At the time of the distribution of
cash, it is anticipated that a total of approximately 18.2
million shares will be outstanding, 17.3 million of which are
outstanding today plus approximately 900,000 vested "in the
money" stock options that are likely to be exercised prior to
any distribution.

                  About Preview Systems

Preview Systems' digital rights commerce platform enables
service providers and content producers to sell digital goods
over the Internet legally and securely. Preview Systems also
ensures the protection, delivery and management of the rights
associated with the usage of digital products. Headquartered in
Sunnyvale, Calif., the company counts as its customers a
network of software publishers, record labels, distributors,
service providers, resellers and hardware manufacturers. For
more information, visit the Preview Systems Web site at
http://www.previewsystems.com


SOTHEBY'S HOLDINGS: Fitch Downgrades Senior Note Rating To BB+
--------------------------------------------------------------
Sotheby's Holdings, Inc.'s $100 million 6.875% senior notes are
downgraded to `BB+' from `BBB-` by Fitch. Sotheby's, Inc.'s
bank credit facility and commercial paper program are also
downgraded to `BBB-` from `BBB' and `F3' from `F2'
respectively. All ratings are removed from Rating Watch
Negative. The Rating Outlook is Stable.

The revised ratings reflect Sotheby's significantly weakened
operating performance during 2000 and the anticipation that the
improvement in operating results during 2001 will be slower
than previously expected. Also considered in the ratings are
the sensitivity of demand to the wealth effect of equity
markets and the increasingly competitive auction market given a
new market entrant as well as the company's strong market
position and restructuring efforts. The ratings are removed
from Rating Watch Negative as the civil suit, shareholder
litigation, and Department of Justice (DOJ) lawsuit have been
finalized, eliminating the related uncertainty from the rating.
While the European Commission investigation and certain
lawsuits remain unresolved Fitch does not expect additional
material charges.

In 2000, Sotheby's revenues declined about 10% to $398 million
from $443 million in 1999 due to lower than anticipated auction
sales and the unfavorable impact of the new commission
structure. In 2000, there were fewer single owner sales, which
contributed to the 7.9% decline in lots sold and the 3.3% lower
average selling price. At the same time, EBITDA declined
significantly to $2.5 million from $72 million in 1999 as a
result of higher than expected costs primarily related to the
company's Internet auction business.

Sotheby's has taken several steps to reduce costs through
consolidating resources and reducing staff, particularly in
lower-end markets. As a result, Sotheby's will manage certain
live auction businesses on a global basis and it will eliminate
staff, reduce marketing programs, and limit consigned property
in its Internet business. Fitch expects these cost saving
initiatives to have a positive impact on Sotheby's 2001 results
however, the improvement will be slower than previously
expected. Also, cash flow generation will remain weak despite
lower capital spending requirements from the Internet business
and as improvements to the company's York Avenue, New York
headquarters building have been completed. Total debt
outstanding, which was about $254 million at March 31, 2001 is
not expected to decline significantly in 2001.

The ownership structure of Sotheby's remains uncertain as Mr.
Taubman, the majority owner of the company's outstanding voting
stock, has hired Credit Suisse First Boston to evaluate
strategic alternatives regarding his Sotheby's holdings. In
addition, Sotheby's has retained investment advisors to help
assess its options regarding the ownership of the company.
Fitch will monitor this situation as it develops.


SPINCYCLE: Extends Sr. Discount Note Exchange Offer to May 21
-------------------------------------------------------------
SpinCycle, Inc. announced that it has elected to extend the
expiration date of its exchange and consent offer until May 21,
2001 at 5:00 p.m. (Eastern time). The expiration date is being
extended in order to permit holders of notes that have not yet
done so to offer their notes for exchange.

On April 6, 2001, SpinCycle, Inc. commenced an exchange offer
to the holders of its senior discount notes due 2005 and a
consent solicitation to a prepackaged plan of reorganization to
holders of record of the notes as of April 2, 2001 as described
in
SpinCycle's confidential restructuring memorandum dated April
6, 2001. In April 1998, SpinCycle sold the notes in a 144A
offering to qualified institutional buyers.

As of May 1, 2001, the notes represent $144,990,000 in accreted
principal amount. Pursuant to the same memorandum, SpinCycle
simultaneously solicited the consent of its common and
preferred stockholders to the exchange and prepackaged plan of
reorganization.

As of 5:00 p.m. (Eastern time) on May 18, 2001, holders of
notes representing $104,650,000 (approximately 72%)
in accreted principal amount had consented to the exchange
offer and prepackaged plan. As of that time SpinCycle had also
received the requisite vote of each class of its stockholders
to the exchange and prepackaged plan.


SUNBLUSH: Reports Year End and Q1 Results
-----------------------------------------
The SunBlush Technologies Corporation (CDNX:SBT.) is pleased to
announce that, subject to final regulatory approval, it has
completed its corporate reorganization, restructuring and
financing, and now is strongly positioned to continue to pursue
opportunities in technology licensing - with a particular focus
on technology applications to the flower industry.

The Company has completed the following activities:

Private Placements: The Company recently announced a series of
private placements, subject to final regulatory approval, for
an approximate value of $6.1 million through an issuance of
approximately 18 million units at (pounds sterling) 0.2225
(Cdn$0.50) and 750,000 units at (pounds sterling) 0.2358
(Cdn$0.53) each consisting of one Common Share, and one half
Share Purchase Warrant.  One whole purchase warrant, will be
exercisable at the holders' option into one common share at
(pounds sterling) 0.3338 (Cdn$0.75) per share at anytime up to
the expiry date of June 25th, 2001. In conjunction with the
placements, subject to regulatory approval, the Company issued
733,758 broker warrants exercisable at any time until March 31,
2003, at an exercise price of Cdn$0.60.

Access Flower Trading: The Company increased its equity
position in Access Flower Trading Inc. ("Access") from 30.57%
to 50%, for consideration of approximately Cdn$2.0 million
(US$1.3 million) in working capital to support Access's
continued growth and the issuance of $1.6 million in Series E
Convertible Preferred Shares of the Company to a third party to
settle an Access debt. The Preferred Shares have a term of five
years and a dividend
rate of 8% per annum and are convertible into Common Shares at
a price of Cdn$1.00 per share at any time during the five year
period. Access is a leading e-commerce provider of North
American floral product auctions and purchasing services.
Access is currently introducing SunBlush's technologies for use
with flowers, which is expected to be completed by the end of
the
year. These transactions have been closed in escrow and await
final regulatory approval.

FreshSpan Europe: The acquisition of the remaining 24% minority
interest of FreshSpan Europe was completed through the issuance
of 1,498,499 Common Shares. FreshSpan Europe holds the rights
to the MAP and Nitric Oxide technologies in Europe and Africa.
This transaction is subject to final regulatory approval.

Board of Directors: The Company has changed the composition of
its Board of Directors to reflect the strong shareholder base
in the UK and its increased position in Access. John Gunn and
Matt McBride, both UK-based, have joined the SunBlush Board.

CFO: Deborah Battiston, formerly the Director of Finance of the
Company, has been appointed as CFO.

As a result of the disposal of the processing operations, the
financial statements have been reclassified to reflect the
continuing operations of the Company. Revenue for the 12 months
ended December 31, 2000 was $1.7 million, versus $1.4 million
for the year ended December 31, 1999. The loss for the year
from continuing operations was $7.8 million ($0.50 per share)
versus $3.6 million ($0.33 per share) for 1999. The total loss,
which
includes discontinued operations of $14.4 million, was $22.2
million ($1.43 per share) for the year ended December 31, 2000.
The total loss for the previous year, including discontinued
operations of $865,000, was $4.5 million ($0.42 per share).
During 2000, management spent a large proportion of its time
and resources disposing of the processing operations and
restructuring the Company, which diverted attention away from
technology licensing. However, in the last quarter of the year,
SunBlush completed a number of licensing agreements from which
revenue will begin to flow in 2001 and subsequent years.

For the three months ended March 31, 2001, revenues were
$744,000 up 90.3% from revenues of $391,000 for the three
months ended March 31, 2000.The increase over last year is
attributable to the addition of a number of new licensees in
the latter part of 2000, including EnzaFoods New Zealand
Limited, Sigma Alimentos of Mexico, Speirs Foods and Frutera de
San Carlos.  The loss from continuing operations for the
quarter was $446,000 ($0.02 per share), compared to a loss of
$813 million ($0.07 per share) during the three months ended
March 31, 2000. The improvement is due to the Company's
continued efforts to reduce overhead costs.

"We are a new Company," said Nigel Lees, President and CEO. "We
now have the time and resources to focus our energies on
building the licensing business and support the strong growth
in Access. The results of the restructured organization will
not be reflected in the financial statements until the second
quarter of this year when we will see the impact of our 50%
interest in Access and the financing on our financial
statements."


UNITED AMERICAN: Revenues Rise, Losses Mount & Plan's Underway
--------------------------------------------------------------
United American Healthcare Corporation (OTC Bulletin Board:
UAHC) posted a third-quarter increase in revenues to $34.0
million for the three months ended March 31, 2001 from $27.1
million for the comparable quarter last year, but the company's
decision to record bad-debt expense of $10.5 million at March
31, 2001 resulted in a net loss of $5.8 million for the quarter
ended March 31, 2001, equivalent to 86 cents per share,
compared with net income of $3.4 million, equivalent to 50
cents per share, for the prior year's comparable quarter.

Chairman William C. Brooks and President and Chief Executive
Officer Gregory H. Moses, Jr. said that the decision to record
the $10.5-million bad-debt expense was based on significant
losses of OmniCare Health Plan of Michigan (OmniCare-Michigan),
a health-maintenance organization (HMO) managed by the company,
coupled with OmniCare-Michigan's significant working capital
and
net worth deficiencies and an evaluation of its future cash
lows.

As a step toward curing such deficiencies, United American
Healthcare entered into a letter of intent with OmniCare-
Michigan and The Detroit Medical Center (DMC) on March 29, 2001
under which, subject to the DMC's completion of a due-diligence
investigation and the execution of definitive contracts,
OmniCare-Michigan would become a wholly owned subsidiary of the
DMC.

It is contemplated by the letter of intent that if the
transaction is consummated, as part of the capital
contributions necessary to cure OmniCare-Michigan's current
capital deficiencies, United American Healthcare will forgive,
or convert to a surplus note, $2.6 million owed by OmniCare-
Michigan to United American Healthcare for accrued management
fees and a previous $2.0-million advance provided to OmniCare-
Michigan.

In recent years, United American Healthcare funded OmniCare-
Michigan to enable it to meet minimum statutory requirements
for net worth and working capital. It funded unsecured loans to
OmniCare-Michigan of $7.7 million in fiscal 2000 and $4.6
million in fiscal 1998, evidenced by surplus notes. Impairment
losses recorded on such notes resulted in bad-debt expense of
$3.1 million and $2.3 million for the years ended June 30, 2000
and 1998, respectively. The remaining carrying value of the
surplus notes of $6.9 million and the $2.6 million and $2.0
million amounts described above, net of a prior reserve of $1.0
million, comprise the $10.5 bad-debt expense at March 31, 2001.

Brooks and Moses noted that last year's third quarter ended
March 31, 2000 benefited from a $5.6-million reduction in a
medical-claims liability established in December 1997 for the
company's discontinued Ultramedix Florida operation and this
year's third-quarter loss ended March 31, 2001 was reduced
slightly by $800,000 from reduction of the remaining Ultramedix
liability.

Revenues rose 26 percent in the third quarter ended March 31,
2001 from the prior year's quarter. This resulted from an
increase in medical premium revenues from $22.4 million last
year to $26.3 million this year at OmniCare Health Plan Inc. of
Tennessee (OmniCare-Tennessee), a managed-care organization 75
percent owned by a wholly owned subsidiary of United American
Healthcare, and an increase in management fees from $4.3
million to $7.1 million, mostly at OmniCare-Michigan. Both
OmniCare-Michigan and OmniCare-Tennessee benefited from
membership growth since last year and higher premium rates.

OmniCare-Tennessee has a pending application with the State of
Tennessee to expand its service area to Western Tennessee and
withdraw from Davidson County. If the application is granted,
United American Healthcare expects greater membership growth
for OmniCare-Tennessee.

Total revenue for the nine months ended March 31, 2001 rose 21
percent from $77.9 million last year to $98.2 million this
year. However, as a result of the bad-debt expense in
connection with OmniCare-Michigan, the company posted a net
loss of $3.2 million, equivalent to 48 cents per share for the
nine months ended March 31, 2001, compared with net income of
$3.4 million, equivalent to 50 cents per share, for last year's
comparable period.

Brooks and Moses noted that United American Healthcare's
present relationship with OmniCare-Michigan may change or end
based on the outcome of negotiations with the DMC.

"It is not possible to predict the outcome of the present
negotiations," they said, "but any reduction in or end to
future management fees from OmniCare-Michigan would be
mitigated by significant reductions in our costs and expenses,
as well as eliminating the future funding of OmniCare-Michigan
by United American Healthcare."


W.R. GRACE: Rejects Vacant Property Lease in Mesquite, Texas
------------------------------------------------------------
W. R. Grace & Co. lease property located at 2041 Town E. Blvd.,
in Mesquite, Texas, from Jim Dandy's Fast Food, Inc. The lease
is a burden to their estates because the property is vacant. By
Motion, the Debtors sought authority to reject the Lease
Agreement immediately. The Debtors sought additional authority
to reject an Assignment Agreement with Jim Dandy to the extent
that contract is executory in nature. The Debtors indicate that
they've already returned the keys to the facility to Jim Dandy.
(W.R. Grace Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

                            *********

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

                           *********

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Troubled Company Reporter is a daily newsletter co-published by
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Chapman, Editors.

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

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