TCR_Public/010604.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Monday, June 4, 2001, Vol. 5, No. 108

                             Headlines

AMERIKING INC.: S&P's Junk Ratings Slip Even Further
BENEDEK COMMUNICATIONS: Moody's Cuts Senior Note Rating to Caa3
BIO-PLEXUS: Expects to Emerge From Bankruptcy by June 30
BRIDGE INFORMATION: McGraw-Hill Conducts Rule 2004 Exam
CHOICESEAT INC.: Files For Chapter 11 Bankruptcy Protection

CONTINUCARE CORP: Defaults Interest Payment on Convertible Notes
ENLIGHTEN SOFTWARE: Nasdaq Finds an Additional Deficiency
ENTRINGER BAKERIES: Files Chapter 11 Petition in New Orleans
ENTRINGER BAKERIES: Chapter 11 Case Summary
GENESIS HEALTH: Committee Objects To Motions For Stay Relief

GLENOIT: Court Okays Employee Retention Plan & Bonus Payments
GLOBAL TELESYSTEMS: Elects Not to Pay Interest On Certain Bonds
HORIZON PHARMACIES: Executes Standstill Agreement With McKesson
iBEAM BROADCASTING: Receives Nasdaq's Notice of Delisting
INTERNATIONAL KNIFE: S&P Slashes Debt Ratings to D

INTERNOS CORPORATION: May Close Asset Sales In Two Weeks
JORE CORP.: Postpones Annual Shareholders' Meeting To August 31
KAISER GROUP: Extends Offers to Purchase New Common Stock
LASER MORTGAGE: Board Okays Reincorporation Merger & Liquidation
LOEWEN GROUP: Memorial Gardens Moves To Sell Canton, IL Assets

LTV STEEL: Rejecting Hoyt Lakes Equipment Leases
MALIBU ENTERTAINMENT: Defaults on $6.5 Million Debt Payment
MKTG SPECIALISTS: Hearing On Acosta Agreement Set For This Week
OAN SERVICES: Inks Asset Sale Agreement With Avery Communication
PACIFIC GAS: Court Issues Order Disbanding Ratepayers' Committee

PACIFIC GAS: U.S. Trustee Asks Court to Reconsider Decision
PACIFIC GAS: Plans To Dole Out $17.5MM For Executive Bonuses
PARACELSUS HEALTHCARE: Set To Emerge From Bankruptcy
PRECEPT BUSINESS: Sells Remaining Transportation Subsidiaries
RAYTHEON CO.: Misses Court Deadline For Disclosing Information

SAFETY-KLEEN: Selling Pecatonica Real Property To McCornock
SOURCE MEDIA: Misses $5.3 Mil Interest Payment On Senior Notes
STAGE STORES: Court Orders Disclosure Statement Modification
SUN HEALTHCARE: Exclusive Period To File Plan Extended To July 9
TURBOCHEF TECHNOLOGIES: Shares Subject To Delisting From Nasdaq

VENCOR INC.: Agrees To Modify Automatic Stay For Insured Claim
VISTA EYECARE: Exits Chapter 11 Bankruptcy
VLASIC FOODS: Expects To File Bankruptcy Plan In Two Weeks
WINSTAR COMMUNICATIONS: Hires Young Conaway As Local Counsel
WR CARPENTER: Moody's Lowers Senior Note Rating to Ca from B3

XPERT TUNE: Files Chapter 11 Petition In W.D. Tennessee
XPERT TUNE: Chapter 11 Case Summary

BOND PRICING: For the week of June 4 - 8, 2001

                             *********

AMERIKING INC.: S&P's Junk Ratings Slip Even Further
----------------------------------------------------
Standard & Poor's lowered its ratings on AmeriKing Inc. and
placed them on CreditWatch with negative implications. These
are:
                                     To   From

      * Corporate credit rating      CC   CCC+
      * Senior secured bank loan     CC   CCC+
      * Senior unsecured debt        C    CCC-
      * Preferred stock              C    CC

The ratings downgrade is based on AmeriKing's inability, to
date, to renegotiate the bank agreement or obtain additional
sources of capital. The company is not currently in compliance
with financial covenants in its bank credit agreement. The
CreditWatch placement is based on Standard & Poor's expectation
that AmeriKing will not make the promised June 1, 2001, interest
payment on its $100 million 10.75% senior notes. A default on
the June 1, 2001, interest payment will lead to a lower rating.

AmeriKing's operating performance has been poor for the past two
years, in part due to the weakening competitive position of the
Burger King chain. Same-store sales have been declining since
early 1999, and comparable-store sales fell 5.8% in 2000 and
6.8% in the first quarter of 2001. The company's operating
margins deteriorated to 15.0% in 2000 from 18.7% in 1999.
AmeriKing's financial flexibility is limited, as it has no
additional borrowing capacity under its credit facility. The
company needs to obtain sources of capital to finance its cash
needs.

AmeriKing's interest and principal payments are expected to be
about $22.5 million in 2001, and it had cash of $13.9 million as
of March 31, 2001. The company believes it will not be in
compliance with existing financial covenants in the credit
agreement during 2001 unless the agreement is amended again or
the company secures other financing. AmeriKing had $119 million
outstanding on the $125 million facility as of March 31, 2001.
The company's debt burden is significant, with total debt to
EBITDA above 7.7 times (x), and EBITDA coverage of interest is
thin at about 1.4x. Standard & Poor's will continue to monitor
the situation and will discuss the company's financing plans
with management.


BENEDEK COMMUNICATIONS: Moody's Cuts Senior Note Rating to Caa3
---------------------------------------------------------------
Moody's Investors Service lowered the rating of Benedek
Communications Corp.'s $170 million (gross) of senior
subordinated discount notes due 2006 to Caa3. Other actions were
also taken:

      * confirmed the "ca" rating on the $139 million of senior
        exchangeable preferred stock due 2008

      * lowered the ratings on Benedek Broadcasting's $90 million
        revolving credit facility and $220 million senior secured
        term loan maturing in 2007 to B2 from B1

      * confirmed the senior implied and issuer rating of Benedek
        Communications at B3 and Caa2, respectively.

The outlook is negative while approximately $619 million of debt
securities are affected.

According to Moody's, Benedek's ratings reflect its severe cash
flow constraints in light of its impending debt service
obligations, weakened cash flow performance, deteriorating
operating margins as a result of higher expenses and the
company's operating loss of $1.5 million for the first quarter.

Reportedly, the company believes it will not be in compliance
with its bank agreement for the second quarter 2001 and
thereafter and as a result may request amendments for covenants.
The company's current ability to borrow under the revolver is
negligible, Moody's said.

The rating agency related that unless Benedek is successful in
raising capital through asset sales, the company is likely to
have insufficient funds for interest service and minimum capital
expenditures. Moody's also noted that Benedek has continued to
operate without a CFO since October 2000.

Benedek Communications Corporation, located in suburban Chicago,
Illinois, owns and operates 23 network affiliated television
stations in small-to-medium-size markets.


BIO-PLEXUS: Expects to Emerge From Bankruptcy by June 30
--------------------------------------------------------
Bio-Plexus, Inc.,(Pink Sheets: BPLX) a leader in the design,
manufacture and marketing of safety medical needles, announced
that shares of its common stock are now trading under the symbol
"BPLX." Quotes for the Company's common stock may be obtained
via the Pink Sheets at www.pinksheets.com.

The Company also announced progress in its reorganization
efforts resulting from its voluntary filing of a petition for
relief under Chapter 11 of the United States Bankruptcy Code.
Management expects to emerge from bankruptcy proceedings by June
30, 2001, as a stronger entity, with a restructured balance
sheet and the necessary capital to fund its future growth.

The Pink Sheets is a centralized quotation service that collects
and publishes market maker quotes for OTC securities in real
time. It is not an issuer listing service. In order to buy or
sell Pink Sheets securities, investors must contact a
broker/dealer. Companies that trade on the Pink Sheets are not
required to meet the listing requirements of the NASDAQ or other
exchanges. Shares of Bio-Plexus' common stock moved from the OTC
Bulletin Board to the Pink Sheets as a result of the Company's
delay in meeting the SEC reporting obligations for the period
ended December 31, 2000. Bio-Plexus expects that it will move
forward in meeting all required reporting obligations when it
emerges from ongoing bankruptcy proceedings.

John Metz, President and Chief Executive Officer of Bio-Plexus,
commented, "Management is concentrating its efforts on the
Company's ongoing bankruptcy proceedings, the outcome of which
will have a material effect on the Company and its operations. I
am happy to report that the proceedings are progressing as
planned, and as previously reported we expect to emerge from
bankruptcy by the end of our second quarter. We are continuing
to operate in a normal fashion and appreciate the continued
support of our customers, suppliers, employees and shareholders.
We are confident that Bio-Plexus will emerge from this period of
transition as a stronger Company poised for accelerated growth."

Bio-Plexus, Inc., designs, develops, manufactures and holds U.S.
and international patents on safety medical needles and other
products under the PUNCTUR-GUARD(R), DROP-IT(R), and PUNCTUR-
GUARD REVOLUTION(TM) brand names. For independent evaluations of
the PUNCTUR-GUARD(R) blood collection needle, refer to the
Centers for Disease Control (MMWR, January 1997) and ECRI
(Health Devices, June 1998 and October 1999) studies. Accidental
needlesticks number about one million per year in the United
States and can result in the transmission of deadly diseases
including HIV and Hepatitis B and C.


BRIDGE INFORMATION: McGraw-Hill Conducts Rule 2004 Exam
-------------------------------------------------------
Karen A. Giannelli, Esq., at Gibbons, Del Deo, Dolan Griffinger
& Vecchione, sought and obtained authority, ex parte, to serve
subpoenas on the Bridge Information Systems, Inc. Debtors on
behalf of her client, The McGraw-Hill Companies, Inc. (including
its Platts division and MMS International, Inc., affiliate).

Bridge, Ms. Giannelli related, is party to a 1995 agreement that
allows Bridge to redistribute Platts Proprietary Information to
authorized customers. Bridge also has permission to redistribute
MMS Proprietary Information that provides news, analysis,
research and commentary about government securities, equities,
bonds, money market instruments, commodities, foreign currencies
and fixed income information under the terms of a 1993 Telerate
Optional Service Delivery Agreement.

Specifically, McGraw-Hill wants up-to-date data about who
received what Platts information when, to the extent that
information has not already been supplied to McGraw-Hill by the
Debtors. With regard to MMS information, McGraw-Hill wants
information about what was supplied when to AIG Financial
Products Corp., AIM Advisors, Inc., Allstate Insurance Company,
Arbor Trading Group, Inc., Banca Di Roma, Bank Julius Baer &
Company, Ltd., Bank of New York, Banque Laurentienne du Canada,
Bear Stearns & Company, Inc., BraceBridge Captial, L.P.,
C.I.B.C. World Markets, Inc., California Public Employee
Systems, Canaccord Capital, Carty & Company, Compagnie
Financiere De Cic Et Del'union, Credit Union Central of
Saskatchewan, Data Resources, Inc., Dexia Public Finance Bank,
DLIBJ Asset Management USA, Inc., Dow Jones, Dow Jones &
Company, Export Development Corp., Federal Reserve Bank of
Atlanta, First Commercial Bank, First Union Corporation,
Frankwell Investment Services, Fuji Capital Markets Corp., Gest
Portfeuille Natcan, Indy Mac, ING Capital Holding Corp.,
Kirkpatrick Pettis Smith & Co., Laketon Investment Management
Ltd., Malayan Banking Berhad, Mellon Bank, N.A., Canada Branch,
Ministere Des Finances, Mizuho Bank (Canada), Natexis Bank,
National Bank for Cooperatives, New York Mercantile Exchange,
Nord/Lb Norddeutsche, The Norinchukin Bank, Ontario Hydro
Services Company, Inc., Robert W. Baird & Co., Incorporated,
Soros MBS Group, Telus Management Services, Inc., The Toronto
Dominion Bank, and West Deutsche Landes Bank. (Bridge Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


CHOICESEAT INC.: Files For Chapter 11 Bankruptcy Protection
-----------------------------------------------------------
ChoiceSeat Inc., the company the National Football League (NFL)
selected to help hook up its stadiums with interactive media
technology, filed for chapter 11 bankruptcy protection on
Tuesday, according to ISWire.  ChoiceSeat chief executive Mary
Frost said the company plans to reorganize but is unsure if they
will still be able to work with the NFL.  An NFL spokesperson
told ISWire that they would evaluate the situation and move
forward. ChoiceSeat provides stadiums with wireless service and
video coverage that fans can watch and use while they are at
their seats in the stadium. (ABI World, May 31, 2001)


CONTINUCARE CORP: Defaults Interest Payment on Convertible Notes
----------------------------------------------------------------
Continucare Corporation (AMEX:CNU), a leader in the field of
providing outpatient healthcare services through managed care
arrangements and home healthcare services in the Florida market,
reported that it did not make the semi-annual interest payment
on its Convertible Subordinated Notes due 2002 within the 30-day
grace period because the Company is continuing its discussions
to restructure the Notes.

If the Company fails to reach an agreement with the noteholders
and a related party regarding restructuring the Notes and the
event of default continues, the principal of all Notes may be
declared due and payable immediately, as well as any accrued and
unpaid interest.

Continucare Corporation, headquartered in Miami, Florida, is a
holding company with subsidiaries engaged in the business of
providing outpatient physician care and home healthcare
services.


ENLIGHTEN SOFTWARE: Nasdaq Finds an Additional Deficiency
---------------------------------------------------------
Enlighten Software Solutions, Inc. (Nasdaq: SFTW), a leading
provider of system management software for Linux, Unix, Windows
and FreeBSD, announced it received a letter from Nasdaq
indicating that the Company has been notified of an additional
deficiency and additional concern by Nasdaq.

Enlighten previously announced that it had received a Nasdaq
Staff Determination on April 26, 2001, indicating that Enlighten
is not in compliance with the minimum bid price requirement for
continued listing set forth in Marketplace Rule 4310 (c)(4) and
that its securities are subject to delisting on the Nasdaq
SmallCap Market. In response, Enlighten requested an oral
hearing before a Nasdaq Listing Qualifications Panel to review
the Staff Determination. The hearing is scheduled for June 8,
2001.

On May 25, 2001, Enlighten received an additional letter from
Nasdaq notifying Enlighten that it does not currently comply
with the net tangible assets/market capitalization/net income
requirement set forth in Marketplace Rule 4310(c)(2)(B). Nasdaq
has requested that Enlighten address this additional deficiency
at its scheduled hearing. In addition, Nasdaq has requested that
Enlighten be prepared to address at the June 8 hearing any
impact that the facts underlying the "going concern"
qualification in the opinion Enlighten received from its
independent auditors regarding Enlighten's audited financial
statements for the year ended December 31, 2000 may have on
Enlighten's ability to achieve and sustain long-term compliance
with Nasdaq's continued listing requirements.

Until the Panel reaches its decision, Enlighten's stock will
remain listed and will continue to trade on the Nasdaq SmallCap
Market. There can be no assurance as to when the Panel will
reach a decision, or that the decision reached will be favorable
to Enlighten. An unfavorable decision would result in the
immediate delisting of Enlighten's stock from the Nasdaq
SmallCap
Market.

"We fully anticipated these issues arising and in the last
several months have been re-positioning Enlighten by enhancing
the marketing and sales efforts, appointing four new board
members, and by my recent appointment as Enlighten's CEO," said
Omar Maden, CEO, Enlighten Software Solutions, Inc. "We are very
hopeful that we can demonstrate to Nasdaq how the results of
our new marketing efforts related to the Enlighten and Enlighten
WebDSM products will enable Enlighten to regain compliance with
the Nasdaq continued listing requirements."

                       About Enlighten

Enlighten Software Solutions, Inc. is a provider of single point
workgroup administration and event monitoring solutions for
Unix, Linux, Windows and FreeBSD within distributed and Internet
computing environments. The Company's award-winning EnlightenDSM
product suite provides cost-effective systems administration
solutions for Unix, Linux, Windows and FreeBSD. The EnlightenDSM
product suite provides comprehensive functionality with
unprecedented ease of installation and use. The EnlightenDSM
product suite conforms to industry standard frameworks yet
allows seamless integration with other vendors' point solutions.
For more information, please visit the company's web site at
http://www.EnlightenDSM.com


ENTRINGER BAKERIES: Files Chapter 11 Petition in New Orleans
------------------------------------------------------------
Entringer Bakeries, Inc., the parent company of McKenzie's
bakeries, filed for chapter 11 bankruptcy protection and said it
will close about half of its stores, according to
NewOrleans.com. Owners said that the closings will preserve jobs
and help the chain stay financially afloat. Owners also said the
move is an attempt to streamline the company. The move comes
almost a year to the day after it was announced that new owners
would save the McKenzie's bakery chain.  (ABI World, May 31,
2001)


ENTRINGER BAKERIES: Chapter 11 Case Summary
-------------------------------------------
Debtor: Entringer Bakeries, Inc.
         dba McKenzie's Pastry Shoppes
         3847 Desire Parkway
         New Orleans, LA 70126

Chapter 11 Petition Date: May 29, 2001

Court: Eastern District of Louisiana (New Orleans)

Bankruptcy Case No.: 01-14388

Debtor's Counsel: John M. Landis, Esq.
                   546 Carondelet Street
                   New Orleans, LA 70130
                   504-581-3200


GENESIS HEALTH: Committee Objects To Motions For Stay Relief
------------------------------------------------------------
The Committee has filed objections to all of the more than 35
Motions for relief from the automatic stay to allow personal
injury or employment law actions to proceed against Genesis
Health Ventures, Inc. & The Multicare Companies, Inc., except
the Stone and the Carpenter Motions. The Committee set forth its
position that the automatic stay should not be terminated
because, among other reasons, the harm to the Debtors from the
significant diversion of its resources at such an early stage in
these cases was not warranted.

In its omnibus objection filed April 18, the Committee noted
that the Court has denied all stay relief motions concerning
personal injury and employment law actions it has heard in these
cases. The Court based these denials on the test set forth in In
re Rexene Products Co., 141 BR. 574, 576 (Bankr. D. Del. 1992).
In simplest terms, the Court agreed that the harm to the movants
if the stay remained intact did not outweigh the harm to the
Debtors if the automatic stay were to be lifted in the hundreds
of personal injury and employment law claims against the
Debtors.

The Committee noted that the GHV cases have progressed
significantly -- a number of important benchmarks have been met,
without limitation, the filing of schedules and proofs of
claims. Preliminary plan negotiations have also been undertaken,
the Committee told the Court. However, the fundamental harm to
the Debtors by a lifting of the automatic stay remains
unchanged, the Committee represented.

The Court was apparently concerned with such a diversion of the
Debtors' attention, the Committee observes, as the Court
encouraged the Debtors to formulate the parameters of
alternative dispute resolution procedures for these claims.

The Committee also referred to the Court's denial of the
Pomerantz and Biletsky motions for relief from the automatic
stay in which the Court held that the stay ought not be lifted
pending its determination on the ADR Motion.

At this junction when the Debtors have filed the ADR motion and
resolving issues related to it, the Committee objected to 5 more
motions for relief from the automatic stay by

          * Iris Lang,
          * Florence McGuire,
          * Lois Hennessey,
          * Ruth Carpenter and Barbara Smith, and
          * Sue A. Stone

The Committee indicated their position that the Court should
deny the Motions for the reasons set forth when it denied the
Biletsky and Pomerantz motions. Indeed, the Committee opined, it
would defeat the purpose of the ADR Motion if motions for relief
from the stay were granted at this time and claimants were
allowed to proceed with prepetition personal injury or
employment law. (Genesis/Multicare Bankruptcy News, Issue No. 9;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


GLENOIT: Court Okays Employee Retention Plan & Bonus Payments
-------------------------------------------------------------
Glenoit Corp. received court authority to implement an employee
retention program and to provide bonuses to certain employees
based on the past financial performance of their divisions. In
general, the fabric, rug and textile manufacturer's retention
program will supercede the eligible employees' current severance
benefits, stay compensation benefits and other similar benefits.
Payments under the program, as well as the performance bonuses,
will be considered allowed administrative expenses of the
company's estate, meaning they must be given certain priority
under any chapter 11 plan confirmed in the case. (ABI World, May
31, 2001)


GLOBAL TELESYSTEMS: Elects Not to Pay Interest On Certain Bonds
---------------------------------------------------------------
Global TeleSystems, Inc. (NYSE: GTS; EASDAQ: GTSG; Frankfurt:
GTS) and GTS Europe BV, a wholly-owned subsidiary of GTS, has
announced plans to initiate discussions with the holders of
their public debt and preferred securities regarding a balance
sheet recapitalisation to reduce the debt and interest burden of
these companies. In view of these pending discussions, GTS
Europe has decided not to pay cash interest payments, due on 1
June 2001, of EUR 15.1 million on its GTS Europe BV 11% EUR 275
million Senior Notes due 2009 and EUR 11.8 million on its GTS
Europe BV 10.5% EUR 225 million Senior Notes due 2006. These
non-payments will not constitute events of default under the
indentures governing these notes unless interest is not paid by
1 July 2001.

Robert Amman, Chairman and CEO of GTS, said: "We are taking
these actions as a major step toward recapitalising the balance
sheets of these companies at a time when our liquidity has been
strengthened through our recent restructuring successes. We
intend to begin consensual discussions next week with the
holders of all of the public debt and preferred securities of
GTS and GTS Europe BV. In these discussions, we will explore
various options for reducing our EUR 1.65 billion total public
debt burden and the EUR 158 million in associated annual cash
interest obligations in an effort to provide greater upside
opportunities for all of our stakeholders."

He continued: "Ebone, GTS's core business unit and Europe's
leading provider of optical IP and broadband services, and all
other GTS operations, will continue to operate in the normal
course. Specifically, we will continue satisfying all
obligations to customers, suppliers, partners and staff,
consistent with our normal business practices."

He added: "Our restructuring programme has been successful to
date. Our accomplishments include reaching a consensual
agreement to divest our Business Service operations and
eliminate approximately $500 million of debt associated with our
former Esprit Telecom subsidiary; eliminating a further $104
million of debt through voluntary debt/equity conversions; and
raising $260 million of new cash through the sale of non-core
assets. Taking these actions to recapitalise the balance sheet
and strengthen the capital structure of GTS and GTS Europe are
the next logical steps in establishing Ebone as a strong, well
funded, EBITDA positive company that remains the market leader
for broadband services in Europe."

GTS has retained Houlihan Lokey Howard & Zukin as its investment
banker to assist in developing a financial restructuring plan
and undertaking discussions with GTS and GTS Europe bondholders
and preferred stockholders. The company plans to have an initial
telephonic discussion with all interested note holders on
Wednesday June 6th at 12:00 pm EDT. For further information,
contact David Hilty or Tanja Aalto at +1 212 497 4100.

                 About GTS (www.gts.com)

GTS is the parent company of Ebone, the original and most
experienced data-only broadband optical and IP networking
company in Europe. Its fibre network extends over 22,000
kilometres, reaching virtually all major European cities. The
Ebone network is Europe's leading broadband IP network, serving
25 percent of European Internet users and the first IP network
to operate at 10 Gbps. The network will be directly connected to
North America via Ebone's own trans-Atlantic fibre pair, which
will be initially provisioned with 80 Gbps of capacity and is
expected to be operational in the third quarter of 2001.With
operations in North America and in 50 European cities, Ebone
delivers tailored networking services to telecommunication
carriers, Internet service providers, Internet-centric and
multinational corporations. Ebone serves over 150 of the leading
telecommunication and data customers in Europe and North
America. The company is the original independent pan-European
broadband network service provider, making Ebone Europe's most
experienced broadband provider.


HORIZON PHARMACIES: Executes Standstill Agreement With McKesson
---------------------------------------------------------------
Horizon Pharmacies, Inc. (Amex: HZP) (Frankfurt: HPZ) has
entered into a standstill agreement with its senior creditor,
McKesson HBOC, Inc. (NYSE: MCK). Pursuant to such agreement,
McKesson has agreed to forbear exercising any rights to collect
the indebtedness owed by Horizon until the earlier of a
"Termination Event" or Monday, June 25, 2001. All third party
insurance payors of Horizon that were previously instructed to
make payments directly to McKesson will be issued instructions
jointly by Horizon and McKesson to immediately direct
outstanding payments to an existing Horizon lock-box. Both
McKesson and Horizon will deposit all receipts from all third
party insurance payors to such lock-box. McKesson has been
granted control of such lock-box pursuant to a separate account
control agreement. The Company can utilize the cash deposited
into the lock-box account consistent with cash flow projections
that have been submitted to McKesson.

During the forbearance period, the Company is obligated to
submit to McKesson a restructuring plan being prepared by
Corporate Revitalization Partners, LLC and provide certain
financial and operating information. McKesson may terminate the
Company's use of cash deposited into the lock-box account if
McKesson rejects Horizon's restructuring plan on or after the
close of business on June 4, 2001.

Rick McCord, President and CEO, comments, "This standstill
arrangement will give us additional time to work with our turn-
around specialists to formulate a restructuring plan and turn-
around strategy and begin negotiating a long-term forbearance
agreement. We will continue to work diligently to implement a
plan of restructuring Horizon's debt that is fair and equitable
to our lenders, vendors, and shareholders."

Horizon is a "brick and click" pharmacy company with over one
million customers that owns and operates 45 retail pharmacies in
16 states, 16 home medical equipment locations, five closed-door
institutional pharmacies, seven intravenous (IV) operations, one
home healthcare agency, one Internet pharmacy at
www.horizonscripts.com, and two mail order pharmacies. Horizon's
focus is to become an innovative leader in the healthcare
industry by providing total customer service and convenience for
its customers. Horizon's revenue growth comes from improvements
at existing brick and mortar stores, acquisitions of new stores,
implementation of Internet strategy, planned kiosk development
and strategic relationships.


iBEAM BROADCASTING: Receives Nasdaq's Notice of Delisting
---------------------------------------------------------
iBEAM Broadcasting(R) Corp. (Nasdaq:IBEM), the leading provider
of streaming communications solutions, announced that it has
received a letter from The Nasdaq Stock Market, Inc. on May 10,
2001 notifying the company that it is currently not in
compliance with Nasdaq's listing requirements as set forth
in Nasdaq Marketplace Rule 4450(a)(5). The letter indicated that
the company's common stock had traded below the $1.00 minimum
closing bid requirement for 30 consecutive trading days. Under
applicable Nasdaq rules, the company must demonstrate compliance
by maintaining a minimum closing bid of at least $1.00 for a
minimum of 10 consecutive trading days by August 8, 2001 or its
common stock may be delisted. An appeals process is available to
iBEAM through the Nasdaq Listing Qualifications Panel if a
delisting notice is issued.

              About iBEAM Broadcasting Corp.

iBEAM Broadcasting(R) Corp. (Nasdaq:IBEM), founded in 1998, is
the leading provider of streaming communications solutions. The
iBEAM end-to-end solutions for enterprise and media customers
include interactive webcasting, streaming advertising insertion,
syndication and pay-per-view management, and secure, licensed
download and geographical identification applications. iBEAM
currently delivers more than 100 million audio and video streams
per month across its intelligent distribution network of
satellite connected, high-performance servers located in more
than 210 networks around the world. More than 460 innovative
companies use iBEAM's global services including media leaders,
CNBC, MTVi, and LAUNCH.com, and enterprise customers, IBM/Lotus,
Bristol-Myers Squibb, and Merrill Lynch. iBEAM is headquartered
in Sunnyvale, California. For more information visit
www.ibeam.com


INTERNATIONAL KNIFE: S&P Slashes Debt Ratings to D
--------------------------------------------------
Standard & Poor's lowered its ratings on International Knife &
Saw Inc. as follows:

                                      To     From
      Corporate credit rating         D      B-
      Subordinated debt rating        D      CCC

About $90 million in debt securities is affected. The rating
action follows the company's failure to make the May 15, 2001,
interest payment on its 11.375% senior subordinated notes due
2006.

International Knife & Saw is a manufacturer of industrial and
commercial machine knives and saw products that are sold into
the wood, pulp and paper, packaging, and metal cutting markets.
The company has been experiencing significant earnings and cash
flow pressures over the past year, which has resulted in
severely constrained liquidity and questions about the company's
ability to continue as a going concern. In the quarter ended
March 31, 2001, and the year ended Dec. 31, 2000, it incurred
net losses of approximately $2.1 million and $15.5 million,
respectively, Standard & Poor's said.


INTERNOS CORPORATION: May Close Asset Sales In Two Weeks
--------------------------------------------------------
Internos Corp., a bankrupt Dulles, Va.-based company that sold
online business-to-business services, could be sold within the
next two weeks, the company's bankruptcy attorney said,
according to Washtech.com. Attorney David E. Lynn said Internos
is in discussions to sell its assets but declined to provide
further details.

Internos, which filed for chapter 11 bankruptcy protection in
November, originally planned to try to reorganize its finances.
Lynn said Internos also won a 60-day extension on Tuesday to
file its detailed bankruptcy plan with the U.S. Bankruptcy Court
for the Eastern District of Virginia. Internos provided business
services for the commercial and residential construction,
railroad and toy industries. (ABI World, May 31, 2001)


JORE CORP.: Postpones Annual Shareholders' Meeting To August 31
---------------------------------------------------------------
Jore Corporation (Nasdaq:JOREQ) has rescheduled its annual
shareholders meeting for August 31, 2001.

The meeting had originally been scheduled to occur June 4, 2001.

On May 22, 2001 Jore filed for voluntary reorganization under
Chapter 11 of the U.S. Bankruptcy Code. On that date the Company
also announced it had restructured its board of directors and
management team.

The agenda for Jore's annual meeting consisted solely of the
election of directors and ratification of its independent
auditors. A revised proxy statement will be issued to provide
current information on the Company's directors and notice of the
August 31, meeting date and location.

                   About Jore Corporation

Jore Corporation designs and manufactures innovative power tool
accessories and hand tools for the do-it-yourself and
professional craftsman markets. The Company relies on advanced
technologies and advanced equipment engineering in its
manufacturing processes to drive cost reductions and higher
quality in its products. Its products save users time by
offering enhanced functionality, increased productivity and ease
of use. Jore sells its products under the licensed Stanley(R)
brand, as well as under various private labels of the industry's
largest retailers and power tool manufacturers, including Sears,
The Home Depot, Lowe's, Menard's, Canadian Tire, Tru*Serv, Black
& Decker, Makita and more.


KAISER GROUP: Extends Offers to Purchase New Common Stock
---------------------------------------------------------
Kaiser Group Holdings, Inc. (OTC Bulletin Board: KGHI), the
successor issuer to its subsidiary, Kaiser Group International,
Inc., announced that it will extend its odd-lot offers to
purchase shares of its new common stock and related distribution
rights to that stock. Unless further extended by Kaiser Group
Holdings, the offers to purchase will expire at 5:00 p.m., New
York City time, on June 15, 2001.

Under the Second Amended Plan of Reorganization of Kaiser Group
International, Kaiser Group Holdings distributed new common
stock to the holders of allowed Class 4 Claims and allowed Class
5 Equity Interests as of April 17, 2001. The Plan is described
in detail in the Current Report on Form 8-K filed with the
Securities and Exchange Commission by Kaiser Group International
on December 14, 2000, and, in less detail, in the Annual Report
on Form 10-K filed with the SEC by Kaiser Group Holdings on
April 2, 2001.

Under the terms of the Offers to Purchase, Kaiser Group Holdings
has offered to purchase from stockholders that received 99 or
fewer shares of new common stock in the initial distribution
under the Bankruptcy Plan, all (but not a portion) of such
shares at a price of $4.50 per share. These offers were made to
all holders of new common stock that received 99 or fewer shares
whether they were a member of allowed Class 4 Claims or allowed
Class 5 Equity Interests.

In addition, the Kaiser Group Holdings also has offered to
purchase from holders of old common stock of Kaiser Group
International, all (but not a portion) of such holders' rights
to receive future distributions of new common stock pursuant to
the Bankruptcy Plan. The purchase price for these future
distribution rights is $.50 per share of new common stock that
such stockholder was entitled to receive in the initial
distribution under the Bankruptcy Plan.


LASER MORTGAGE: Board Okays Reincorporation Merger & Liquidation
----------------------------------------------------------------
LASER Mortgage Management, Inc. (NYSE: LMM) announced that its
Board of Directors unanimously approved the merger of the
Company with and into its wholly-owned Delaware subsidiary,
pursuant to which the Company's state of incorporation will be
changed from Maryland to Delaware. Upon completion of the
merger, the surviving Delaware entity will be liquidated and
dissolved. The merger, liquidation and dissolution and related
documents, including a plan of liquidation and dissolution, will
be submitted to shareholders for their approval at the annual
meeting scheduled to be held on July 27, 2001.

As presently envisioned, the plan of liquidation and dissolution
would provide for an initial cash distribution, after obtaining
approval of the Delaware Court of Chancery, of approximately
$3.00 per outstanding share of common stock, with additional
cash distributions resulting from the disposition of the
Company's remaining assets expected to occur within the
following three years, after providing for expenses. The total
amount of distributions to shareholders is estimated to range
between $4.15 and $4.35 per share, but this is subject to change
based on numerous factors, including future investment results
and operating expenses, the Delaware Court of Chancery modifying
the distribution amounts and timing currently envisioned under
the plan of liquidation and distribution, unanticipated claims
or expenses and income received, if any, from our pending
litigation against Asset Securitization Corporation, Nomura
Asset Capital Corp. and Nomura Securities International, Inc.

LASER Mortgage Management, Inc. is a specialty finance company
investing primarily in mortgage-backed securities and mortgage
loans. The Company has elected to be taxed as a real estate
investment trust under the Internal Revenue Code of 1986, as
amended. As of May 30, 2001, the Company estimates that its net
asset value per share was within the range of approximately
$4.30 to $4.40.


LOEWEN GROUP: Memorial Gardens Moves To Sell Canton, IL Assets
--------------------------------------------------------------
Memorial Gardens Association, Inc. d/b/a White Chapel Memory
Gardens seek the Court's authority,

      (1) to sell the funeral home business, and related assets
          at 24550 North Highway 6-RR3, Canton, Illinois 61520,
          free and clear of all liens, claims and encumbrances,
          to the entity that The Loewen Group, Inc. Debtors, in
          their sole business judgment, determine has submitted
          the highest and best offer (the Purchaser);

      (2) to assume and assign to the Purchaser the executory
          contracts and unexpired leases presented with the
          motion for the Court's approval.

pursuant to Sections 363 and 365 of the Bankruptcy Code, and the
Court's Disposition Order (A) Approving Global Bid Procedures
Program and (B) Authorizing the Debtors to Grant Pre-Approved
Bid Protections to Prospective Purchasers, dated January 21,
2000.

The Initial Bidder has agreed to pay an aggregate purchase price
of $140,000.00 for the Sale Locations, subject to higher and
better offer in accordance with the Bidding Procedures. The
Initial Bidder agrees to pay to the Selling Debtor a Deposit in
the amount of $7,000 upon the execution of the Purchase
Agreement and agrees to pay the remainder of the Purchase Price
at the closing.

               Liens, Claims and Encumbrances

The Selling Debtors believe that any and all liens, claims,
encumbrances and other interests in or against the Sale
Locations and the Businesses are subject to money satisfaction
in accordance with section 363(f)(5) of the Bankruptcy Code.
Accordingly, the Selling Debtors seek to sell the Sale Locations
and the Businesses free and clear of all Property Interests,
pursuant to sections 363(b) and 363(f) of the Bankruptcy Code,
with all such Property Interests to attach to the net proceeds
of the sale with the same validity and priority as they attached
to the Sale Locations and the Businesses.

               Transfer of Net Sale Proceeds

In accordance with the Net Asset Sale Proceeds Procedures, the
Debtors will use the proceeds generated to repay any outstanding
balances under the Replacement DIP Facility and deposit the net
proceeds into an account maintained by LGII at First Union
National Bank for investment, pending ultimate distribution on
court order. The Debtors advise that currently, there are no net
borrowings outstanding under the Replacement DIP Facility, so
theis provision is not presently operative. The Debtors covenant
to comply with this provision to the extent that it becomes
operative in the future. Funds necessary to pay bona fide direct
costs of a sale may be paid from the account without further
order of the Court. The Debtors will deposit the net proceeds
into an account maintained by LGII at First Union National Bank
for investment, pending ultimate distribution on court order.

          Executory Contracts and Unexpired Leases

The Debtors seek to assume and assign to the Purchaser 8
executory contracts/unexpired leases: 1 Central Monitoring
Agreement, 3 Leases, 1 Maintenance Agreement, 1 Oral Agreement,
1 Trust Agreement Establishing the Illinois Cemetery Association
Master Trust, and 1 Agreement with Temple B'Nai Israel.

The Debtors do not believe that they could market the Assignment
Agreements outside of the context of a sale of the Sale
Locations and the Businesses. The Debtors believe it is in the
best interest of the estates to assume and assign the
agreements.

The Debtors submit that, since the Petition Date, they have
continued to comply with their obligations under each of the
Assigmnent Agreements. As a result, the Debtors do not believe
that there are any monetary defaults or cure costs associated
with the assumption and assignment of the Assignment Agreements.
The Debtors, however, are continuing to review each of the
Assignment Agreements and will notify the nondebtor party to an
Assignment Agreement immediately if they identify any cure
obligation associated with that agreement.

                  Neweol Purchase Agreement

In connection with the proposed sale of the Sale Locations,
Neweol would sell and the Initial Bidder would purchase certain
accounts receivable related to the Sale Locations pursuant to a
purchase agreement between Neweol and the Initial Bidder. The
amount of the Neweol Allocation will be determined immediately
prior to closing.

                     Bidding Procedures

Any entity that desires to submit a competing bid for the Sale
Locations and Businesses may do so in accordance with the
Bidding Procedures approved by the Disposition Order, as in the
proposed sale of the assets in Indiana by Bicknell Memorial et
al mentioned above, except that in this proposed transaction,
the bid must exceed $147,500.00, i.e., 5% above the Purchase
Price plus the applicable Expenses and must be in increments of
3% (subject to rounding) of the Purchase Price. (Loewen
Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


LTV STEEL: Rejecting Hoyt Lakes Equipment Leases
------------------------------------------------
LTV Steel Company, Inc., asked that Judge Bodoh permit it to
reject unexpired leases for equipment located at a facility in
Hoyt Lakes, Minnesota, owned by the Debtor, nunc pro tunc to the
date on which the Motion seeking rejection was filed. LTV told
Judge Bodoh that Steel Mining is a Minnesota general partnership
with its principal place of business in Hoyt Lakes, Minnesota.
Steel Mining is a wholly-owned indirect subsidiary of LTV Steel.
The current partners in Steel Mining are Debtors Erie B
Corporation, Erie I Corporation, and Youngstown Erie
Corporation, all of which are wholly-owned subsidiaries of LTV
Steel.

Before January 2001, Steel Mining was engaged in the business of
mining iron ore and processing that ore into taconite pellets, a
key component in the manufacture of steel. Steel Mining ceased
production in January 2001, and began to wind down its business.

Prior to the Petition Date, on behalf of Steel Mining LTV Steel
entered into equipment leases with various leasors to provide
certain equipment to be used in Steel Mining's operations. These
leases, and their terms, are:

      (a) GECBAF Lease. LTV Steel as lessee, and General Electric
Capital Business Asset Funding Corporation, as successor in
interest to Metlife Capital, Limited Partnership, as lessor, are
parties to a Master Equipment Lease Agreement under which LTV
Steel leases equipment including two electric shovels and 93 ore
cars for use at the Steel Mining facility. Under the Master
Lease, LTV Steel and GECBAF have signed six separate schedules,
of which LTV Steel seeks to reject Nos. 1, 2, 3 and 5. The
aggregate quarterly rent reserved under the GECBAF Schedules is
$622,799.73, excluding any sales or use taxes, which the Debtors
also may be obligated to satisfy under the terms of the
applicable lease. The terms of the Schedules range from 7 to 8
years; accordingly, the GECBAF Schedules have not yet expired by
their terms and therefore are unexpired leases that may be
rejected under the Bankruptcy Code.

      (b) National City Lease. LTV Steel, as lessee, and National
City Leasing Corporation as lessor, signed a Master Equipment
Lease Agreement in September 1995, under which LTV Steel leases
equipment including 3 trucks, a forklift, and an electric spike
puller for use at the Steel Mining facility and its other
facilities. Under the Master Lease, LTV Steel and National City
have executed 31 separate schedules, of which Nos. 2, 3, 4, 13-
16, 23-25, 30 and 31 relate to equipment used at the Steel
Mining facility. The aggregate quarterly rent reserved under the
national City Steel Mining Schedules is $475,493.08. The terms
of these Schedules range from 5 to 7 years, and so have not yet
expired by their terms and are unexpired leases subject to
rejection under the Bankruptcy Code. Like the GECBAF lease, the
Debtor may be obligated to satisfy sales or use taxes under this
Lease.

      (c) Firstar Lease. LTV Steel as lessee, and Firstar Bank,
N.A. as lessor signed a Master Equipment Lease in July 1999, and
one equipment schedule under which LTV Steel leases a
trackmobile for use at the Steel Mining facility. The quarterly
rent reserved, exclusive of sales or use tax, is $9,877.08. The
term of the Firstar Lease is 4 years, so that it has not expired
according to its terms and may be rejected under the Bankruptcy
Code.

      (d) Cargill Lease. LTV Steel as lessee, and Cargill Leasing
Corporation as lessor signed a Master Equipment Lease dated May
1994, by which LTV Steel leases two trucks, a front end loader,
and a rotary blasthole drill for use at the Steel Mining
facility. Under this Master Lease, LTV and Cargill signed 10
separate schedules covering various items of equipment. The
aggregate quarterly rent reserved under the Cargill lease,
exclusive of sales or use taxes, is $934,128.17. The term of the
Cargill Lease is 7 years, so that it remains in force according
to its terms and may be rejected under the Bankruptcy Code.

Cargill has assigned its right, title and interest in
Cargill Schedule Nos. 1, 7 and 8 to Firstar. The aggregate
quarterly rent reserved under these assigned schedules is
$436,723.46.

In addition, at various times during 1994 Cargill and ITT
Commercial Finance Corporation entered into 7 Acknowledgement
and Consent to Purchase of Chattel Paper Agreements by which
Cargill assigned its right, title and interest in the Cargill
Schedules Nos. 2- 6, 9 and 10 to ITT. Subsequently, GECBAF
purchased ITT and succeeded to all of ITT's right, title and
interest under the Cargill ITT Schedules. The aggregate
quarterly rent reserved under the Cargill ITT Schedules,
exclusive of sales or use taxes, is $497,404.71.

      (e) Phoenixcor Schedules. LTV Steel as lessee and ICX
Corporation as lessor are parties to a Lease Agreement signed in
November 1995, by which LTV Steel leases rig trucks, bulldozers
and locomotives for use at the Steel Mining facility and other
facilities of the Debtors. Under the ICX Master Lease, LTV Steel
and ICX executed 14 schedules for equipment located at the Steel
Mining facility.

In 1998 and 1999 LTV Steel and ICX entered into 5 separate
Consent to Assignment Agreements under which LTV Steel consent
to ICX's assignment of its right, title and interest in ICX
Steel Mining Schedule Nos. 4 and 17-2o. GECBAF subsequently
purchased Phoenixcor and succeeded to all of Phoenixcor's right,
title and interest under the Phoenixcor Schedules. The aggregate
quarterly rent reserved under the Phoenixcor Schedules is
$142,750.99. The terms of the Phoenixcor Schedules are 7 years,
have not yet expired by their own terms, and are subject to
rejection under the Bankruptcy Code.

ICX and LTV Steel have agreed to enter into a stipulation
regarding the rejection of the ICX Steel Mining Schedules that
have not been assigned to GECBAF. According, LTV Steel does not
seek to reject these unassigned ICX Steel Mining Schedules, nor
does it seek authority to reject the other equipment schedules
under the ICX Master Lease pertaining to equipment located at
facilities other than Steel Mining (schedules other than the
Phoenixcor Schedules). However, LTV expressly reserves all of
its rights with respect to the ICX remaining schedules.

LTV cited to Judge Bodoh the business judgment rule, intended to
afford a debtor wide latitude in determining whether rejection
will benefit the estate. LTV reminded Judge Bodoh that the
debtor's sound business judgment enjoys a presumption of
correctness unless it can be shown to be "manifestly
unreasonable".

LTV reminded Judge Bodoh that the Steel Mining production
operations ceased in January 2001; accordingly, it no longer
utilizes the equipment leased under the leases for which
rejection is sought. The Debtors have no need for this equipment
in their other operations, nor does it appear that the equipment
could be assigned for value to any third-party purchasers. LTV
Steel thus has determined in the exercise of its business
judgment that the rejection of the Steel Mining equipment leases
is in the best interests of the estate and creditors.

                 Severability of the Leases

LTV is not seeking to reject the entire ICX Lease, GECBAF Lease,
or the National City Lease, believing that applicable law
governing the severability of separate lease documents permits
it to reject only the relevant schedules from such leases.
Specifically, the determination of whether a contract or lease
is severable is made by examining the intent of the parties as
shown in the contract or lease. In cases where the contractual
language is uncertain, the court should look to the subject
matter, the situation of the parties, and the circumstances
surrounding the transaction, and the construction placed on the
contract by the parties themselves.

The ICX Master Lease expressly provides that each equipment
schedule will constitute a separate and distinct lease.
Moreover, ICX has acknowledged the severability of the ICX Steel
Mining Schedules, and by their assignment, the Phoenixcor
Schedules, from the ICX Master Lease. Similarly, the GECBAF
Master Lease states that the Master Agreement contains general
terms and conditions applying to each equipment lease that
incorporate the Master Agreement by reference. This provision
clearly contemplates that the parties considered each GECBAF
Schedule to be a separate lease agreement. Moreover, GECBAF has
acknowledged and consented to the severability of the GECBAF
Schedules from the master Lease (although there is no
explanation in the Motion as to how this occurred).

The National City Master Lease does not contain explicit terms
addressing whether it is a single agreement or integrated
agreements, but does involve leases of different equipment
entered into over a period of more than 4 years by separate
pricing schemes with varying termination dates. The Debtor
believes this is similar to the facts in Stratemeyer v. West
decided by an Illinois state court in 1985 in which the Court
found that a series of invoices were different agreements based
on numerous segregated obligations of performance calling for
varied amounts of payment. Finally, by its Motion seeking to
compel the Debtors to accept or reject these Schedules National
City apparently has agreed that these Schedules constitute
severable leases.

                        Retroactive Rejection

LTV requested authority to reject these equipment leases
effective as of the date on which the Motion for the same is
filed. LTV asserted that courts have authorized retroactive
rejections of executory contracts and unexpired leases based on
the equities under the circumstances, citing as authority a
decision by the Court of Appeals for the First Circuit in
Thinking Machines Corp. v. Mellon Financial Services Corp, and
other decisions. Courts that permit retroactive rejection
generally permit the rejection to become effective as of the
date on which the nondebtor party to the executory contract or
unexpired lease was given definitive notice of the debtor's
intent to reject. In the instant case, Steel Mining notified the
lessor of the mine closing and indicated that LTV Steel likely
would reject these equipment leases. Thereafter, the lessor were
notified of LTV Steel's decision to reject these equipment
leases on the date this Motion was filed. The time lapse between
the date of closing of Steel Mining and the date of the formal
notification of rejection to the lessor resulted from LTV
Steel's attempts to negotiate an arrangement with a third party
under which the Steel Mining equipment leases would be assumed
and assigned to a third party, thereby minimizing the claims
that could be asserted by the lessor against LTV Steel's estate.
Only when it was clear that such an arrangement would not be
consummated did LTV Steel make a final determination to reject
these equipment leases. Accordingly, LTV Steel believes that the
equities under the circumstances weigh in favor of permitting it
to reject the Steel Mining equipment leases nunc pro tunc as of
the Motion date.

                 National City Leasing Responds

National City Leasing Corporation, appearing through Drew T.
Parobek and Robert J. Sidman of the Cleveland firm of Vorys,
Sater, Seymour & Pease LLP, stated that it does not oppose
rejection of its Schedules retroactive to the date of the filing
of the Motion, or the severability of those Schedules, but
states that the rejection can only be effective as of the date
of the order permitting rejection -- not the date on which the
Motion is filed. As to severability, Mr. Parabek pointed out
that severing the steel mining equipment from the mine will
result in additional disposition costs chargeable to LTV under
the Schedules as well as a diminution in the value of the mine
due to the fact that the equipment was designed for, and is
necessary to, the operation of the mine.

Mr. Parabek reminded Judge Bodoh that, prior to the filing of
this Motion by LTV, National City had filed its own Motion to
compel the Debtors to assume or reject the 12 Schedules under
its Master Equipment Lease. This was made necessary because LTV
failed to begin payments due under the national City Steel
Mining Schedules postpetition, and because LTV had not yet
declared its intentions to assume or reject these Schedules.

While National City does not oppose the rejection, the company
conditions that lack of opposition on the immediate payment of
all postpetition amounts due under the National City Steel
mining Schedules through the effective date of the rejection.
National City is owed the sum of $571,603.65, representing
rental of $536,719.61 through April 10, 2001, and taxes of
$34,884.04 for that same period. In addition to these charges,
National City reserves the right to assert claims for
maintenance, removal, transportation, insurance, and other
chares required by or permitted under the Schedules. National
City estimates that the aggregate outstanding maintenance costs
due on the equipment subject to Schedules 13-16 are $400,000.
Since these amounts are subject to variables not yet known,
National City will raise this issue by separate motion at the
appropriate time.

Mr. Parabek cited to Judge Bodoh's attention authority that the
obligation of a debtor to commence these payments is absolute,
and not excused by mere debtor inaction or neglect. LTV has not
made any payments on these Schedules since the inception of
these cases, and has advanced no reason why, during the 60-day
grace period provided by the Code, it could not have made its
rejection decision. Having not done so, and having prevented
National City from obtaining its leased property before the
expiration of the grace period, LTV is obligated to make lease
payments up to and including the date the leased property is
made available to National City (that is, the date this Court
approves LTV's intended rejection, and National City is advised
by LTV that it can pick up the leased property). Therefore, as a
condition to rejection of the National City Steel Mining
Schedules, LTV Steel must be required to immediately make the
payments mandated by the Bankruptcy Code.

       National City's Response to Retroactive Rejection

Further, rejection of the National City Steel Mining Schedules
should be effective as of the date of the order approving that
rejection - not the date of the Motion. Describing LTV Steel's
authority as "inapposite", Mr. Parabek said that in reality LTV
Steel is simply trying to shortchange the equipment lessor by
imposing an early rejection date which ignores contractual
obligations and Bankruptcy Code requirements.

LTV Steel's argument fails on three grounds. First, the cases
cited by LTV Steel generally involve situations in which the
leased property had been returned to the lessor prior to the
formal rejection of the lease. In the instant case, National
City have, in effect, seen their equipment held hostage -
without payment - for three months while the Debtor has been
mired in apparently fruitless negotiations to sell the Hoyt
Lakes facility. For this reason alone, the cases cited by LTV
Steel do not support the early rejection of the various leases.
Second, the majority of courts which have addressed this issue
have held that a lease is deemed rejected only upon the
Bankruptcy Court's entry of an order approving rejection, citing
In re Federated Department Stores, Inc., a decision by the
Bankruptcy Court for the Southern District of Ohio in 1991, and
others. In fact, the only case from this Court to address this
issue expressly found that rejection of an executory lease is
not effective until the date of the court's order permitting
rejection, citing In re Revco D.S., Inc., a 1989 decision by
the Bankruptcy Court for the Northern District of Ohio. While
the Revco decision deals with a real property lease, the court's
analysis rests on its interpretation of Code 365, not any
particular intricacy applicable only to real property leases.
The Code expressly provides that judicial approval is a
condition precedent to rejection of an unexpired lease or
executory contract, and therefore rejection cannot occur until
the date of the court's order. Third, the equities in this case
dictate that National City and the other lessor be paid all
post-petition amounts due under their respective leases until
such time as the leased equipment has been returned to them in
conjunction with the entry of an appropriate rejection order.
Without belaboring the point, Mr. Parabek told the Court that
LTV has used the leased equipment as an expensive bargaining
chip in its negotiations with various parties to sell the Hoyt
Lakes mining facility. Even if the evidence shows that LTV Steel
endeavored to have the leases assumed by the prospective
purchasers, one fact remains true: National City and certain of
the other lessor have not received lease payments required by
the Bankruptcy Code and have not been able to maintain, prepare
and market the leased equipment for sale or other disposition to
interested third parties. The substantial amounts owed under the
National City Steel Mining Schedules and incurred because of
LTV's unjustified delay only serve to further shift the equities
in favor of National City and the remaining lessor. In light of
these considerations, the effective date of lease rejection must
be the date upon which the Bankruptcy Court issues an order
authorizing the same.

          Agreed Turnover of Leased Property

As a final condition to permitting LTV Steel to reject the
National City Steel Mining Schedules, LTV must make the leased
equipment available to National City following entry of an order
authorizing rejection in a fashion and at such time as is
acceptable to National City. In addition, the equipment must be
in good working order commensurate with the standards set out in
the various lease documents, and must be stored and safeguarded
until turnover is arranged. National City reserves its right to
assert an administrative claim for any postpetition failure of
LTV to comply with its lease obligations to preserve, maintain
and protect the leased property under the National City Steel
Mining Schedules.

    General Electric Capital Business Asset Funding Responds

Appearing through Daniel R. Swetnam of the Columbus firm of
Schottenstein, Zox & Dunn Co., LPA, General Electric Capital
Business Asset Funding Corporation tells Judge Bodoh it does not
oppose this Mtoino, but that the effective date of rejection
should be the date an Order is entered approving the rejection,
not the date on which the Motion is filed.

The leases with GECBAF include 3 mining shovels, 93 iron ore
railroad cars, and certain railroad ties, all of which are the
subject of a separate motion by GECBAF to obtain payment of
postpetition rent. When the mine was closed, GECBAF understood
that LTV Steel was negotiating with Cleveland Cliffs, Inc., and
possibly others, concerning a sale of the Hoyt Lakes mine and an
assignment of the leases for equipment used at the mine. GECBAF
further understood that certain of the min assets, including the
ore deposits and a power generation plant, may have significant
value. As a result, GECBAF has attempted to remain informed, and
protect its interests, as these matters have proceeded.

First, GECBAF has been unable to obtain a commitment from LTV
regarding how the debtors intended to treat these leases. In the
meantime, the 60-day grace period expired. Payments of
$144,973.01 and $232,840.29 fell due and were not paid. Finally,
the Debtors have filed their Motion to reject these leases.

GECBAF does not oppose the rejection of Schedules 1, 2, 3 and 5
under the Master Lease, but does object to LTV Steel's request
to make the rejection effective as of the date on which the
Motion was filed. Citing the Revco decision, GECBAF repeats
National City's argument that the date of rejection may only be
the date on which an order is entered, not the date on which the
request for rejection is made. GECBAF also advised that there
are no equities favoring early rejection. LTV Steel has been in
control of GECBAF's property. Under LTV Steel's logic, it would
have obtained the upside had a deal been concluded, and now
wants GECBAF to bear the burden of that not having been
concluded. (LTV Bankruptcy News, Issue No. 9; Bankruptcy
Creditors' Service, Inc., 609/392-00900)


MALIBU ENTERTAINMENT: Defaults on $6.5 Million Debt Payment
-----------------------------------------------------------
Malibu Entertainment Worldwide, Inc. (OTC Bulletin Board: MBEW)
announced that the Company has failed to make a mandatory
payment of $6.5 million to its primary lender which was due May
31, 2001. The Company's primary lender has agreed to temporarily
forbear from exercising the remedies available to it under the
Company's credit agreement until the earliest to occur of (i)
June 30, 2001; (ii) the occurrence of any other event of
default; (iii) the failure of the Company to engage a
consultant, satisfactory to the lender, to advise the Company in
connection with their repayment obligations, and; (iv) the
failure of the Company to deliver a budget proposal to the
lender, in a form acceptable to the lender, by June 15, 2001.

As a result of the payment default, the Company is obligated to
pay the lender $167,000 upon execution of the forbearance
agreement and an additional $167,000 by August 31, 2001 pursuant
to the terms of the Company's existing credit agreement.

The Company is continuing to seek to divest certain assets in an
effort to generate cash to fund its ongoing obligations. There
can be no assurance that the Company will be able to complete
such divestitures, or, if so, as to the timing, terms or effects
thereof. If the Company is unsuccessful in selling these assets,
in securing certain sale-leaseback arrangements, in obtaining
other financing or in modifying the terms of its existing
indebtedness or if the proceeds of such sales are significantly
less than their estimated value or if these actions are not
sufficient to permit the Company to continue to operate, the
Company may seek or be forced to seek to restructure or
reorganize its liabilities, including through proceedings
under the federal bankruptcy laws.

Headquartered in Dallas, Texas, Malibu Entertainment Worldwide,
Inc. is a leader in the location-based entertainment industry,
operating 17 parks in 7 states under the SpeedZone, Malibu Grand
Prix and Mountasia brands, primarily clustered in Texas,
California, Georgia and Florida.


MKTG SPECIALISTS: Hearing On Acosta Agreement Set For This Week
---------------------------------------------------------------
Acosta Sales and Marketing Company and Marketing Specialists
Corporation (OTCBB:MKSP), two of the nation's largest sales and
marketing agencies serving the consumer packaged goods industry,
previously announced that they had reached a tentative agreement
to consolidate Marketing Specialists' business into Acosta.
Under the agreement, Acosta will assume no debt of Marketing
Specialists. Creditors of Marketing Specialists must pursue
recovery from Marketing Specialists through the bankruptcy
court.

The bankruptcy court in Texas, which must approve the
consolidation agreement, has not yet ruled on the pending motion
for approval. A hearing has been scheduled for next week at
which time, Acosta's senior management anticipates the
consolidation agreement will be approved.

In order to successfully transition the former Marketing
Specialists' business to Acosta, effective June 1, 2001 Acosta
has employed the necessary associates from Marketing Specialists
to manage the business transitioned to Acosta.


OAN SERVICES: Inks Asset Sale Agreement With Avery Communication
----------------------------------------------------------------
Avery Communications Inc. (OTCBB:ATEX), a provider of customer
care and billing services, announced that, through its wholly
owned subsidiary, ACI Telecommunications Inc., it has entered
into a management support and post-petition financing agreement
with OAN Services Inc. and has reached a definitive agreement to
acquire certain assets from OAN for $19.7 million.

Located in Northridge, Calif., OAN is a competitor of HBS
Billing Services Inc., Avery's local exchange carrier billing
clearinghouse operation in San Antonio. OAN Services filed a
petition for reorganization under Chapter 11 of the federal
Bankruptcy Code in the U.S. Bankruptcy Court on May 25, 2001.
Both the management support and the asset purchase agreements
are subject to Bankruptcy Court approval.

The management support agreement with OAN provides for ACI
management to assist OAN in operating its business during the
first 90 days of the bankruptcy period. Under this agreement,
OAN's customers are assured that there will be no disruption of
services during the post-petition period and that payments
relating to those services will be made promptly in the ordinary
course of business.

ACI has also agreed to provide debtor in possession financing to
OAN in order to maintain an orderly transition of the business.
Under the asset purchase agreement, ACI has agreed to pay
approximately $19.7 million consisting of a combination of
assumed liabilities, debtor in possession financing and cash.
OAN assets to be purchased include customer contracts, local
exchange carrier contracts for providing billing services,
certain hardware and software technology, and a customer care
call center.

"We are pleased to be able to assist OAN's management and
customers during this challenging period," commented Patrick J.
Haynes III, chairman of Avery. "Our focus in this transaction is
to provide financial stability for OAN's creditors and
continuity of services for their customers.

"The potential combination of OAN and HBS will position us as a
market leader in the LEC clearinghouse market with an unrivaled
depth of services and the highest quality of support for our
customers. The synergies created by the combination will reduce
overall operating costs and provide additional revenues to meet
our growth objectives. This transaction meets our investment
criteria for growth opportunities within the LEC billing
clearinghouse market."

"While we regret having to take this action, we believe it
ultimately will be in the best interests of all stakeholders,"
said Harvey Berg, president of OAN Services.

"OAN's primary concern remains continuity of service for its
customers, and Avery's involvement helps achieve that objective.
In addition, the OAN/Avery combination will be much stronger,
with the necessary resources that enable it to thrive in a
highly competitive environment."

                   About Avery Communications

Avery is a service company engaged in providing customer care
and billing services, including billing and collection
clearinghouse services for inter-exchange carriers and long-
distance resellers, through its operating subsidiary HBS Billing
Services.

HBS Billing Services' customers consist primarily of direct-dial
long-distance telephone companies. The company's clearinghouse
operations are based in San Antonio, where it maintains billing
arrangements with approximately 1,300 telephone companies that
provide access lines to, and collect for services from, end
users of telecommunication services.

HBS Billing Services processes transaction records and collects
the related end-user charges from local exchange carriers for
its customers. HBS also provides enhanced billing services for
transactions related to providers of premium services or
products that can be billed through the local exchange telephone
companies, such as Internet access, voice mail services and
other telecommunications charges.


PACIFIC GAS: Court Issues Order Disbanding Ratepayers' Committee
----------------------------------------------------------------
As previously reported, arguments ensued following the UST's
appointment of the Ratepayers' Committee and Pacific Gas and
Electric Company's motion for vacating the appointment. Having
entertained all these, Judge Montali reached the conclusion that
the UST abused her discretion by going beyond the authority
given her in the Bankruptcy Code, erring as a matter of law. The
Court reminded the parties that the Bankruptcy Code and the
bankruptcy court were designed to resolve debtor-creditor
problems; state agencies are where issues such as rates for
electricity are handled. Judge Montali noted that Congress, in
its wisdom, intended that the estate should pay for dealing with
those debtor-creditor issues in bankruptcy; it should not be
burdened with matters likely to be resolved elsewhere.

The Court therefore granted the Debtor's motion and issued an
order vacating the UST's appointment of the Ratepayers'
Committee.

Judge Montali's conclusion follows his findings/opinions that:

      (1) The Court has the authority and duty to review the
UST's appointment of the Ratepayers Committee under section
105(a) of the Bankruptcy Code, as evidenced in Bodenstein v.
Lentz (In re Mercury Finance Co.

      (2) The standard of review is "abuse of discretion". Judge
Montali pointed out that the Court cannot simply substitute its
judgment for that of the UST, but it can overturn a UST's
decision that is based on an erroneous interpretation of the
law.

      (3) There is no authority for creation of the Ratepayers
Committee.

      (4) The Ratepayers Committee is not representative of any
pre-petition creditors.

      (5) Ratepayers have options available to them to protect
their interests.

      (6) Section 105(a) is not available to save the Ratepayers
Committee.

A copy of Judge Montali's Memorandum Decision Regarding Motion
for Order Vacating Appointment of Committee of Ratepayers is
reprinted below:

            Memorandum Decision Regarding Motion for Order
            Vacating Appointment of Committee of Ratepayers

I. Introduction

    The court has considered the Motion for Order Vacating
Appointment by United States Trustee of Official Committee of
Ratepayers filed by Pacific Gas and Electric Company, the above-
named debtor, the opposition to the Motion filed by the United
States Trustee, the submissions of various parties in interest
in support of and in opposition to the Motion, all declarations,
requests for judicial notice, and other papers presented, and
the oral arguments presented at the hearing earlier today.
Appearances have been noted on the record. For the reasons set
forth below, the court determines that there is no authority in
the Bankruptcy Code (Footnote 1) for the appointment of the
Official Committee of Ratepayers. In addition, the court noted
that ratepayers have other means and other fora to protect their
interests. Accordingly, the court will grant the Motion and
vacate the UST's appointment of the Ratepayers Committee.

II. Discussion

     A. The court has the authority and duty to review the UST's
appointment of the Ratepayers Committee.

The UST relies on Smith v. Wheeler Technoloqy, Inc. (In re
Wheeler Technology, Inc.), 139 B.R. 235 (9th Cir. BAP 1992), for
the proposition that the court has no or limited jurisdiction to
review the UST's discretionary appointment of the Ratepayers
Committee under 11 U.S.C. section 1102(a)(2). PG&E counters with
a citation to In re Pierce, 237 B.R. 748, 755 (Bankr. E.D. Cal.
1999), which notes that review of action taken by the UST was
not the issue in Wheeler and that "the BAP commentary" regarding
section 1102 (and, in particular, section 1102(c)) was dicta.

This court believes that neither Wheeler nor Pierce applies
directly here, because neither case addressed a request to
disband a committee in its entirety where it is not authorized
by law. Nonetheless, this court agrees with the analysis of
Pierce - -which is consistent with that of the majority of cases
that have addressed the issue - - supporting the proposition
that a bankruptcy court may use section 105(a) to review the
UST's actions. Pierce, 237 B.R. at 753-54 (section 105 may be
utilized to review decisions of UST; "[a]ppointments by the UST
must, logically, be reviewable in some manner, by some forum").
See also Bodenstein v. Lentz (In re Mercury Finance Co.), 240
B.R. 270, 276-77 (N.D. Ill. 1999) ("The majority view is that
[section 105] both preserved and expanded the courts' equitable
power to review the [UST's] decisions about committee
membership. These courts hold that the bankruptcy court has the
inherent power to review acts of the [UST], as well as authority
under [section] 105 (a), and use an 'arbitrary and capricious'
or 'abuse of discretion' standard of review.") (citing numerous
other cases). Otherwise, there would be no means for judicial
review of the UST's actions, even if the UST exceeded her
authority and acted contrary to law. "The court finds that the
[UST] has failed to establish that Congress meant to completely
insulate the [UST's] decisions in this way. Specifically, there
is a strong presumption in favor of judicial review of
administrative action." Mercury Finance, 240 B.R. at 277.
(Footnote 2)

     B. The standard of review is "abuse of discretion."

The majority of courts have held that the bankruptcy court has
the power under section 105 to review. the acts of the UST under
an "arbitrary and capricious" or "abuse of discretion" standard
of review. Mercury Finance, 240 B.R. at 276 (citing numerous
authorities); Pierce, 237 B.R. at 753-54 (section 105 gives the
court power to review UST's actions under abuse of discretion
standard of review).

Courts have drawn from appellate practice in applying these
standards of review to UST decisions. See, e.g.., Pierce, 237
B.R. at 754. Applying these appellate standards, this court
cannot simply substitute its judgment for that of the UST, but
it can overturn a UST's decision that is based on an erroneous
interpretation of the law. Koon v. United States, 518 U.S. 81,
100 (1996) ("district court by definition abuses its discretion
when it makes an error of law"); United States v. Iverson, 162
F.3d 1015, 1026 (9th Cir. 1999) ("district court abuses its
discretion when it makes an error of law or rests its decision
on clearly erroneous findings of fact"); Natural Resources
Defense Council v. Houston, 146 F3d 1118, 1125 (9th Cir. 1998),
cert. denied, 526 U.S. 1111 (1999) (agency action is reversible
when it is arbitrary, capricious, an abuse of discretion or
otherwise not ac in accordance -with law).

While this court does not sit as an appellate court reviewing a
judicial decision by the UST, the standard of review is the
same. In other words, the court must decide whether the UST, in
exercising her discretion, disregarded controlling law.

     C. There is no authority for creation of the Ratepayers
Committee.

Section 1102(a)(1) authorizes the UST to appoint a committee of
creditors holding unsecured claims. It also authorizes the UST
to appoint additional committees of creditors as the UST deems
appropriate. Bankruptcy Code section 1102(a)(2) authorizes a
party in interest to request the court to order the appointment
of additional committees of creditors "... if necessary to
assure adequate representation of creditors ...." (emphasis
added). As noted by the court in In re Eastern Maine
Electric Cooperative, Inc., 121 B.R. 917, 927 (Bankr. D. Me.
1990): "Unless the interests of the cooperative's membership
[i.e., the ratepayers] can be characterized as those of
creditors or of equity security holders, [section] 1102(a)
grants no authority to establish a committee." (Emphasis added).

Section 1102(b) then directs that a committee of creditors
appointed under section 1102(a) "... shall ordinarily consist of
the persons, willing to serve, that hold the seven largest
claims against the debtor of the kinds represented on such
committee."

Section 101(10) defines "creditor" to mean an entity that has a
". . . claim against the debtor that arose at the time of or
before the order for relief. . . ." Thus, even though rights to
payment that arose after the order for relief may be encompassed
within the definition of "claim" (see 11 U.S.C. section 101(5)),
Congress had in mind that the creditors committees appointed in
Chapter 11 could consist only of holders of pre-petition claims,
not post-petition claims. (Footnote 3)

     D. The Ratepayers Committee is not representative of any
pre-petition creditors.

The UST and a pro se ratepayer argue that various situations may
arise giving rise to future claims, but no one is able to
articulate a particular claim of any ratepayer qua ratepayer
that existed on the petition date. Specifically:

        1. The point is made that past blackouts may have caused
damage to a ratepayer. That may be, and just as a non-rate payer
with a damage claim arising from a blackout, the interests of
those claimants are protected by the Official Committee of
Unsecured Creditors as pre-petition holders of unsecured claims
and some could also be protected by the Attorney General.
(Footnote 4). At oral argument PG&E's general counsel provided
the court with authority that PG&E, as a regulated utility,
would be insulated from liability because of problems
encountered by ratepayers as a result of rolling blackouts. That
authority was not questioned by counsel for the UST or others
appearing in opposition to the Motion. See also, Niehaus Bros.
Co. v. Contra Costa Water Co. 18 159 Cal. 305, 318-319 (1911);
Lowenschuss v. Southern California 19 Gas Co., 11 Cal.App.4th
496, 14 Cal.Rptr.2d 59 (1992).

        2. Whatever recoveries may eventually come from
activities involving PG&E's affiliates via the avoiding powers
of the Bankruptcy Code will redound to the benefit of the estate
generally, and not to a separate class of ratepayers. Whatever
benefits may be ordered by regulatory agencies such as the
California Public Utilities Commission ("CPUC") will no doubt
follow proceedings before such a body, and the right of
ratepayers or others to be heard there will be established under
applicable non-bankruptcy law.

        3. No one opposing the Motion could rebut PG&E's general
counsel's explanation that refunds ordered by the CPUC will take
the form of rate adjustments in the future.

        4. No authority has been presented which indicates that
any events occurring prior to the petition date give any
particular ratepayer a "right to payment" (section 101(5)) or
establish that PG&E owes a "debt" (section 101(12)) to such
ratepayer.

     E. Ratepayers have options available to them to protect
their interests.

As the parties well recognize, the Attorney General of the State
of California has been given access to the bankruptcy court in
Fed. R. Bankr. P. 2018(b). That rule permits the Attorney
General to appear and be heard on behalf of consumer creditors
as long as the court determines that the appearance is in the
public interest. (Footnote 5). For whatever reason, the Attorney
General has decided not to accept the invitation to this court,
apparently fearing that sovereign immunity protection will be
lost if the State of California takes advantage of this right.
The court expresses no opinion on whether that will occur or
whether it makes sense for the Attorney General (Footnote 6) to
explore the possibility of a stipulation that would preserve the
sovereign immunity defense for other matters. (Footnote 7).

Next, section 1109(b) gives a "party in interest," including
various enumerated entities, the right to appear and be heard on
any issue in a case. The list of those entities is not
exclusive. 1l U.S.C. section 102(3).

"Party in interest" is not defined in the Bankruptcy Code but it
appears in numerous instances. In re Public Service Co. of New
Hampshire, 88 B.R. 546, 551 (Bankr. D. N.H. 1988) ("There are
some 46 references to 'party in interest' within the Bankruptcy
Code and the Bankruptcy Rules."). Congress certainly knew the
difference between "parties in interest" and "creditors" when it
empowered the latter to organize as a committee and participate
in bankruptcy cases at the expense of the estate. It did not
extend that right to "parties in interest."

Finally, the UST argues that the ratepayers are greatly
interested in the outcome of this case and the financial affairs
of PG&E. That goes without saying. But having an interest in a
result (as all ratepayers do), does not rise to the level of
having a claim as defined in the Bankruptcy Code.

While regulatory agencies and ratepayers certainly are
"interested" in a utility, they do not have the same direct
financial investment in a utility as its creditors and
shareholders. Furthermore, it can be argued that ratepayers are
already protected, or at least represented, by the PUC with
respect to rate-related issues. . . . Although clearly
interested in the outcome of the Utility's organization [sic]
proceedings, ratepayers arguably lack a strong enough investment
in a utility to warrant an independent and unfettered voice in
the reorganization.

Public Service, 88 B.R. at 553, quoting Flaschen & Reilly,
Bankruptcy Analysis of a Financially-Troubled Utility, 22 Hous.
L. Rev. 965, 971-73 (1985).

When any particular ratepayer comes before the court to be heard
on any matter, the court will then decide whether, and to hat
extent, that ratepayer may be considered a party in interest and
be heard. Further, in the event the court is ever called upon to
exercise power and authority traditionally vested in any
regulatory agency, the status of a ratepayer as a party in
interest or the appropriateness of a committee consisting of
ratepayers may have to be revisited. (Footnote 8).

     F. Section l05(a) is not available to save the Ratepayers
Committee.

One might reasonably argue that the court, having used section
1O5(a) to review the UST's decision, should be consistent and
use the same section to serve the public interest and create a
ratepayers committee notwithstanding the limitations found in
Bankruptcy Code section 1102(a) discussed above. There is,
however, no inconsistency. The Code is silent on whether or not
the decision of the UST can be reviewed. That silence suggests
to this court that utilizing section 105 is proper because such
use does not conflict with any other provision of the Bankruptcy
Code. On the other hand, sec. 1102(a) preempts the issue of
committee formation, describing only two categories of entities
who may be organized as official committees, creditors and
equity security holders. The court will not use section 105 to
override the clear limitations of the statute, for to do so
would itself be an abuse of discretion. Missoula Federal Credit
Union v. Reinertson (In re Reinertson), 241 B.R. 451, 455 (9th
Cir. BAP 1999) ("Despite the broad grant of equitable powers
[under section 105], bankruptcy courts cannot use them 'to
defeat clear statutory language, nor to reach results
inconsistent with the statutory scheme established by the
Code.").

III. Conclusion

      In summary, the court reminds the parties that the
Bankruptcy Code, and the bankruptcy court, were designed to
resolve debtor-creditor problems; state agencies are where
issues such as rates for electricity are handled. In its wisdom,
Congress was correct: the estate should pay for dealing with
those debtor-creditor issues in bankruptcy. It should not be
burdened with matters likely to be resolved elsewhere.

For the foregoing reasons, the court concludes that, while
the UST no doubt acted with good intentions and with the
interests of ratepayers in mind, she abused her discretion by
going beyond the authority given her in the Bankruptcy Code,
erring as a matter of law. The Motion will be granted. The
court is concurrently issuing an order vacating the UST's
appointment of the Ratepayers Committee.

Because the court concludes that the Ratepayers Committee cannot
serve as an official committee, the court need not address
whether those entities selected by the UST could be
representatives of ratepayers nor whether the political
activities of any such member is at all relevant to issues
presented in the Motion.

Footnotes:

(1) Unless otherwise indicated, all section and rule references
are to the Bankruptcy Code, 11 U.S.C. ~ 101-1330 and the Federal
Rules of Bankruptcy Procedure, Rules 1001-9036.

(2) The UST cites one case in which a bankruptcy court was asked
to review the creation of a committee. That case, In re New Life
Fellowship, Inc., 202 B.R. 994 (Bankr. W.D. Okla. 1996),
involved the appointment of an official bondholders committee.
The case trustee, the unsecured creditors' committee and the
bondholders' indenture trustee requested that the court vacate
appointment of the bondholders committee, and the court held
that it lacked authority to review decisions of the UST
regarding appointment of committees. This court will not follow
New Life, because the reasoning of Pierce and the other
majority decisions is more persuasive, because New Life is not
binding, and because New Life involved the appointment of a
committee specifically authorized by law.

(3) For an instructive discussion on the interpretation of
"hold" and "holding" claims for the purposes of section 1102,
see 28 Mercury Finance, 240 B.R. at 279.

(4) See discussion at section E, infra.

(5) That would probably be the case here, but the court will
address that issue only if and when it is presented.

(6) If the ratepayers of PG&E believe they are entitled to the
assistance of the Attorney General they should resort to the
political arena to seek relief. The court cannot help them
because Congress has not provided a means for it to do so.

(7) Both PG&E and the Official Committee of Unsecured Creditors
have already agreed to this possibility on the record at the
hearing. In addition, both PG&E and the committee have agreed
that they are willing to stipulate that the Attorney General
can represent all ratepayers, notwithstanding the possible
limitation of Rule 2018 that the Attorney General can represent
only "consumer creditors."

(8) It should be obvious, but nothing in this order is intended
to or should affect the right of any ratepayer, or any member of
the Ratepayers Committee, to be heard anywhere other than in
the bankruptcy court.

(Pacific Gas Bankruptcy News, Issue No. 7; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


PACIFIC GAS: U.S. Trustee Asks Court to Reconsider Decision
-----------------------------------------------------------
The U.S. Trustee in charge of the administration of bankruptcy
cases in Northern California filed a motion asking the court to
reconsider its order vacating the U.S. Trustee's appointment of
the Official Committee of Ratepayers in Pacific Gas & Electric
(PG&E), according to a release from the Department of Justice.
The motion was based on the error of law made by PG&E's counsel
at the court hearing on PG&E's motion to vacate the Ratepayers
Committee about the legal rights of present and former PG&E
ratepayers to assert rights directly against PG&E. The U.S.
Trustee's discretion to appoint more than one unsecured
creditors committee was another reason the motion was made. The
final reason was the refusal of the bankruptcy judge to allow
counsel to appear on behalf of the Official Committee of
Ratepayers at the hearing. The U.S. Trustee said that it is
unjust to exclude the ratepayer/creditor perspective. (ABI
World, May 31, 2001)


PACIFIC GAS: Plans To Dole Out $17.5MM For Executive Bonuses
------------------------------------------------------------
Bankrupt Pacific Gas & Electric (PG&E) announced plans to award
about $17.5 million in bonuses to senior executives, according
to Reuters. The utility's "management retention" program was
included in a filing made last Friday to the federal bankruptcy
court and follows a $50 million round of bonuses handed out to
employees just days before it sought bankruptcy protection on
April 6.

Under the plan, company Chairman Robert Glynn and nearly two-
dozen other senior executives would receive 100 percent of their
base salaries. PG&E also hopes to award hundreds of other
managers between 25 and 75 percent of their salaries under the
proposal, which requires the approval of U.S. bankruptcy Judge
Dennis Montali. PG&E said that bonuses were necessary to ensure
that the bankruptcy proceedings were negotiated smoothly. The
new bonus request will be heard at a court hearing scheduled for
June 18. (ABI World, May 31, 2001)


PARACELSUS HEALTHCARE: Set To Emerge From Bankruptcy
----------------------------------------------------
Paracelsus Healthcare Corporation (OTC Bulletin Board: PLHCQ)
announced that it has received oral confirmation from the United
States Bankruptcy Court in Houston, Texas of its Chapter 11
Amended Plan of Reorganization and approval of the terms of its
previously announced $5.5 million settlement of government
claims. The plan of reorganization will become effective after
entry of the final order by the court, expiration of the normal
10 day appeal period, and satisfaction of various conditions
precedent to effectiveness contained in the Plan, which the
Company expects to occur in the next few weeks.

The confirmed reorganization plan provides, among other things,
that all principal and interest outstanding on the 10% Senior
Subordinated Notes and all allowed general unsecured claims will
be exchanged for a combination of cash, new debt and new common
stock of reorganized Paracelsus, which will reincorporate in
Delaware and change its corporate name to Clarent Hospital
Corporation. Upon the Effective Date of the Amended Plan, the
shares of the Company's common stock held by existing equity
holders will be canceled and rendered null and void. The former
equity holders will neither receive nor retain any interest in
the Company under the approved plan. The 6.51% Subordinated Note
and interest outstanding will be deemed to be exchanged for
existing equity, which will be concurrently eliminated under the
Amended Plan. The complete Amended Plan of Reorganization is on
file with the United States Bankruptcy Court.

Robert L. Smith, CEO, said, "The Company is glad to be nearing
the end of the bankruptcy restructuring process so we may fully
focus our resources on the operations of our hospitals and the
profitability of the Company as a whole. This process has been
very challenging, and we sincerely appreciate the loyal support
of our employees, members of our medical staffs, and our vendors
who stood by us patiently while we completed the reorganization
process."

The Company has retained an investment banking firm to review
its strategic alternatives following emergence from Chapter 11
bankruptcy protection. The investment banking firm is in the
preliminary stage of its work, and the Company cannot predict
the timing or ultimate outcome of this initiative.

Paracelsus Healthcare Corporation, a public company currently
listed on the OTC Bulletin Board, was founded in 1981 and is
headquartered in Houston, Texas. Including a hospital
partnership, Paracelsus presently owns the stock of hospital
corporations that own or operate 10 hospitals in seven states
with a total of 1,287 beds. Additional Company information may
be accessed through http://www.prnewswire.comunder the
Company's name.


PRECEPT BUSINESS: Sells Remaining Transportation Subsidiaries
-------------------------------------------------------------
Precept Business Services, Inc. (OTC: PBSI) announced that it
has sold the remainder of its transportation subsidiaries with
Bankruptcy Court approval.

Republic Transportation, Inc. has purchased the bulk of the
remaining assets of the Transportation Division consisting of
the following companies:

      * PTS-Texas, Dallas, TX
      * Garden State Limousine, N.Arlington, NJ
      * AAA On-Time Limousine, Clinton, NJ
      * Ambassador Limousine, East Hartford, CN


RAYTHEON CO.: Misses Court Deadline For Disclosing Information
--------------------------------------------------------------
Raytheon Co. missed a court-imposed deadline for turning over
information on the value of its construction division, leaving
Fourth District Judge Deborah Bail to select an independent
auditor to evaluate the business that is at the heart of its
legal battle with Washington Group International, according to
the Associated Press. Washington Group accused Raytheon of
defrauding it last year in the sale of Raytheon Engineers &
Constructors to the Boise, Idaho-based company for about $53
million and the assumption of an estimated $450 million of debt.

Washington Group claims that the liabilities were actually about
$700 million, and financing that amount pushed it to file for
bankruptcy, rendering 52 million shares of stock worthless.
Raytheon has denied the allegations. The independent auditor
will determine how much liability Raytheon's construction
division had when the sale occurred 13 months ago. (ABI World,
May 31, 2001)


SAFETY-KLEEN: Selling Pecatonica Real Property To McCornock
-----------------------------------------------------------
Safety-Kleen (Pecatonica), Inc., joined by the remaining debtors
and acting through Gregg M. Galardi of the Wilmington, Delaware
firm of Skadden, Arps, Slate, Meagher & Flom LLP, brought a
Motion seeking to sell SKP's interest in real property located
in Pecatonica, Illinois, to Marilyn McCornock, or the successful
bidder, free and clear of all liens, claims and encumbrances. In
addition, the Debtors asked that Judge Walsh determine that the
sale is free and clear of any stamp, transfer, recording or
similar tax, and authorizing the payment of a broker's fee of 6%
of the purchase price to Whitehead, Inc.

                  No Use for the Property

The Debtors told Judge Walsh that, as part of their plan to
restructure their operations, they have begun to identify and
divest themselves of underperforming or non-core assets. Toward
that end, the Debtors have determined that the Pecatonica
property is not essential to Systems' reorganization. The
Pecatonica property consists of approximately 105 acres of farm
land located at 6259 North Pecatonica Road in Winnebago County,
Illinois. This property was formerly used by SKP as a buffer
zone for a transfer facility. At present, however, neither
Systems nor the Debtors is using the property and it remains
vacant.

                       The Sale Terms

The Debtors proposed that SKP convey its interest in the
Pecatonica property to the Purchaser, for which the Purchaser
will pay Systems the sum of $226,900. However, this sale must
close by July 15, 2001, and the closing is conditioned upon
entry by the Court of an order approving this sale on or before
June 15, 2001. Further, SKP must pay all general real estate
taxes levied and assessed against the Pecatonica property, and
all installments of special assessments for the years prior to
the calendar year of closing, but only to the extent permissible
under the Bankruptcy Code. Further, the Purchaser has the right
of inspection of the property for a period of 30 days. At this
time, the Purchaser has paid the sum of $7,000 into escrow as a
deposit.

The Debtors are soliciting higher and better bids for the
Pecatonica property. A qualifying higher offer must be a minimum
of $241,900 - $15,000 higher than the purchase price at present,
and must propose a form of sale agreement whose terms are equal
to or more satisfactory than that from the Purchaser. If the
Debtors receive a timely higher offer, they will conduct an
auction at the office of Skadden, Arps in Wilmington, Delaware.
Bids will be made in increments of $15,000 until such time as
the buyers have submitted their highest and final bids. If no
higher or better bids are received, the Debtors will report the
same to the Court and proceed with the sale to the Purchaser. If
the Debtors receive one or more higher and better bids, and
conduct an auction sale of the Pecatonica property, the Debtors
will notify the Court of the results of the auction and request
authorization to proceed with a sale to the successful bidder.

The Debtors reserve the right to determine, in their sole
discretion, after consultation with the Creditors' Committee,
which offer, if any, is the highest or best offer, and to reject
any offer at any time prior to entry of an order of the Court
approving an offer, including any offer which the Debtors deem
to be inadequate or insufficient, or not in conformity with the
requirements of the Bankruptcy Code, the Bankruptcy Rules, or
the terms of this sale, or otherwise contrary to the best
interests of these estates and their creditors.

The proceeds of the sale will be applied in accordance with the
terms of the credit agreement governing the Debtors DIP
facility. The Debtors will record and account for such proceeds
on Systems' books and records, on a non-consolidated basis, so
that the proceeds may be readily traced, if necessary.

This sale, the Debtors told Judge Walsh, is in their sound
business discretion. The property is not in use at the present,
but the Debtors remain liable for the carrying costs of the
property, such as taxes and insurance. Neither SKP nor the
Debtors are deriving any benefit from the property, and believe
that this sale will maximize its benefit for these estates and
their creditors. The Debtors further believe that an expeditious
sale is necessary to assure that the greatest possible price is
received for this property.

The Debtors believe that any delay will jeopardize SKP's ability
to realize that value, which the Debtors describe as fair and
reasonable. Prior to entering into this sale agreement, the
Debtors, together with Cushman and Wakefield of Illinois,
marketed the Elgin property through the use of direct mailings
and advertising on the property. The offer from the Purchaser is
the highest and best received to date and the Debtors believe it
is extremely unlikely that additional marketing would result in
significantly greater net proceeds to Systems' estate. In
addition, this sale is subject to competing bids, thus ensuring
that Systems will receive the highest or best value for the
property.

The proposed sale has been negotiated in good faith, the Debtors
assured Judge Walsh. There is no connection or affiliation
between the Purchaser and the Debtors, and the ability of third
parties to make higher or better bids ensures that the Purchaser
has not exercised any undue influence over Systems or the
Debtors.

The Debtors told Judge Walsh they do not believe that any party
holds an interest in the Elgin property. If and to the extent
that the Debtors identify any party which does hold such an
interest, The Debtors will obtain all necessary consents prior
to the sale hearing, if any.

                           Tax Relief

The Third Circuit Court of Appeals has held that sales which are
outside of, but which are in furtherance of, the effectuation of
a plan of reorganization may not be taxed under any law imposing
a stamp or similar tax. The Debtors are seeking approval of this
sale to, among other things, facilitate the formulation and
ultimate confirmation of a plan of reorganization that will
yield the highest possible return to the Debtors' creditors.
Therefore, the sale of the Elgin property is a necessary step
toward a reorganization plan, and accordingly should be exempt
from any stamp or similar tax.

                        The Broker's Fee

It is normal and customary in this type of transaction, the
Debtors assured Judge Walsh, for the selling party to pay a
brokerage fee or commission. The ability of the debtor to offer
such a fee allows a debtor to sell its property for the benefit
of the estate and its creditors. Here, Whitehead assisted the
Debtors in their marketing with respect to the Pecatonica
property by advertising the property and listing the property in
local newspapers. The Debtors believe that payment of a broker's
fee of 6% of the purchase price, or $13,614 is warranted under
the circumstances, particularly in light of the efforts
undertaken by Whitehead to facilitate the sale of this property.
This fee will be split between Whitehead and the other broker
instrumental in this sale, Bix. Accordingly, the Debtors asked
that Judge Walsh permit the payment of the broker's fee on the
closing of the sale of the Pecatonica property. (Safety-Kleen
Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


SOURCE MEDIA: Misses $5.3 Mil Interest Payment On Senior Notes
--------------------------------------------------------------
Source Media, Inc. (OTC Bulletin Board: SRCM), a leading
provider of interactive digital cable TV applications and audio
and text applications for all digital media platforms, announced
that it has not made the approximately $5.3 million interest
payment on its 12% Senior Secured Notes due May 1, 2001 within
the 30-day grace period provided by the indenture governing the
Notes, and that an Event of Default has therefore occurred with
respect to the Notes. As a result, the holders of at least 25%
of the aggregate principal amount of Notes outstanding may
declare the entire unpaid principal amount of the Notes and all
accrued interest due and payable immediately. The Company has
engaged UBS Warburg as its exclusive financial advisor in
analyzing its strategic alternatives and will continue to review
all available options.

Source Media is a leader in the development, production and
distribution of new media content. Source Media's interactive TV
business is conducted through SourceSuite LLC, a 50/50 joint
venture with Insight Communications, which is managed by Source
Media. SourceSuite's products are SourceGuide, an interactive
program guide and LocalSource, a local interactive programming
service. Source Media's IT Network is the leading creator of
private label audio and text content. This content is designed
for universal distribution and access across all platforms,
including voice portals, wireless and wireline telephone,
Internet and digital cable television. For further information,
please visit our website at http://www.sourcemedia.com.


STAGE STORES: Court Orders Disclosure Statement Modification
------------------------------------------------------------
Stage Stores Inc. (OTCBB:SGEEQ) announced that the U.S.
Bankruptcy Court for the Southern District of Texas, Houston
Division issued a ruling on May 30, 2001, concerning the
adequacy of the Company's Amended and Restated Disclosure
Statement in Support of Third Amended Plan of Reorganization.

In its ruling, the Court instructed the Company to make certain
modifications and amendments to the Disclosure Statement by June
6, 2001, and scheduled a hearing for June 29, 2001, to rule on
the adequacy of the Disclosure Statement, as Modified. If the
Court approves the Disclosure Statement, as Modified, the
Company will commence with the solicitation of votes from
creditors for approval of the Third Amended Plan of
Reorganization, as Modified. The Court has tentatively scheduled
a hearing for Aug. 8, 2001, for consideration and confirmation
of the Plan.

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


SUN HEALTHCARE: Exclusive Period To File Plan Extended To July 9
----------------------------------------------------------------
Bankrupt long-term health care provider Sun Healthcare Group
Inc. announced that it won court approval for a 60-day extension
of its exclusive periods to file a reorganization plan and
solicit acceptance by creditors, according to Dow Jones. The
extension, granted on May 10, prevents other parties in Sun
Healthcare's bankruptcy proceedings from filing competing plans
for the company's reorganization. Under the new deadlines, Sun
Healthcare will have until July 9 to file a plan and until Sept.
7 to collect votes from creditors.

The Albuquerque, N.M., company, which operates long-term and
subacute care facilities, has been in talks with a number of
state Medicaid agencies, the Department of Justice and the
Department of Health and Human Services over various claims. Sun
Healthcare filed for chapter 11 bankruptcy protection on Oct.
14, 1999. (ABI World, May 31, 2001)


TURBOCHEF TECHNOLOGIES: Shares Subject To Delisting From Nasdaq
---------------------------------------------------------------
TurboChef Technologies, Inc. (Nasdaq: TRBO) announced that it
had received a Nasdaq Staff Determination letter on May 25,
2001, notifying the Company that it failed to comply with the
minimum $4,000,000 net tangible asset requirement for continued
listing of its common stock on the Nasdaq National Market under
Marketplace Rule 4450(a)(3). The Company intends to apply to
have its common stock listed on the Nasdaq SmallCap Market.
There can be no assurance that Nasdaq will approve the Company's
application for listing of its common stock on the Nasdaq
SmallCap Market.

              About TurboChef Technologies, Inc.

TurboChef is a leader in kitchen technology. Its proprietary
rapid-cook platform cooks faster than a microwave and produces
results superior to a conventional oven. Its existing commercial
technology cooks food seven to eight times faster than a
conventional oven, needs no ventilation, reduces labor costs,
increases menu flexibility and reduces equipment costs as well.
The Next Generation residential technology makes it possible to
cook a complete dinner to restaurant quality standards that
would ordinarily take 70 minutes in a conventional oven in as
little as 10 minutes.

The owner of nine patents, and fifty patents pending, including
patents regarding cooking technology and Internet business
processes; TurboChef is focused on creating shareholder value by
enhancing the restaurateur's bottom line and the consumers'
quality of life.

More information about the company and its products can be found
at www.turbochef.com


VENCOR INC.: Agrees To Modify Automatic Stay For Insured Claim
--------------------------------------------------------------
Mark Smith, as Personal Representative of the Estate of Richard
Smith and Helen Smith (the plaintiffs) has asserted claims
against one or more of the Vencor, Inc. Debtors alleging
negligence.

The Debtors agreed to modify the automatic stay to allow the
plaintiff in the underlying action to prosecute her claims to
final judgment. The agreement and stipulation between the
parties expressly provides that any settlement of or recovery of
a judgment for damages in the underlying action will be limited
to applicable insurance proceeds, if any, and plaintiff will not
be entitled to any other distribution from the Debtors' estates
on account of any judgment that may be entered against the
Vencor Defendants in the underlying action.

The stipulation further provides that the plaintiff will not
engage in any efforts to collect any amount from the Debtors or
any of the Debtors' current or former employees, current or
former officers and directors, or any person or entity
indemnified by the Debtors. The parties also specifically agree
that any settlement of the underlying action will include a
mutual general release.

Judge Walrath has given her stamp of approval to the agreement
and stipulation. (Vencor Bankruptcy News, Issue No. 30;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


VISTA EYECARE: Exits Chapter 11 Bankruptcy
------------------------------------------
National Vision, Inc., formerly known as Vista Eyecare, Inc.
(OTC Bulletin Board: VSTAQ), announced that its plan of
reorganization had become effective on May 31, 2001. The U.S.
Bankruptcy Court for the Northern District of Georgia had
previously entered an order confirming the Company's plan.

James Krause, President and Chief Executive Officer, said, "We
are pleased to have emerged from Chapter 11. Effectiveness of
our plan of reorganization is a critical and important milestone
in our efforts to return to financial viability and
profitability. We believe that our Company, as re-capitalized
and reorganized, will be poised to again become a leader in the
optical industry."

Mr. Krause added, "We wish to thank Wal-Mart Stores, Inc. for
the support they have shown our Company. We are pleased to
continue our long-term relationship with Wal-Mart."

The Company indicated that it had finalized a $10 million credit
facility with Fleet Capital Corporation.

The Company also indicated that effective May 18, 2001, the name
of the Company had been changed to "National Vision, Inc."


VLASIC FOODS: Expects To File Bankruptcy Plan In Two Weeks
----------------------------------------------------------
Vlasic Foods International (OTC Bulletin Board: VLFIQ), which is
a debtor-in possession under Chapter 11 of the U. S. Bankruptcy
Code, previously announced that on May 22, 2001 it consummated
the sale of its U.S. businesses to Pinnacle Foods Corporation.
Vlasic expects to file a bankruptcy plan with the United States
Bankruptcy Court in Wilmington, Delaware within two weeks. The
company previously announced that its bankruptcy plan would
provide for a distribution to unsecured creditors.

However, as proceeds of asset sales are not sufficient to pay
creditors in full, the bankruptcy plan will not provide for any
distributions to holders of Vlasic common stock.


WINSTAR COMMUNICATIONS: Hires Young Conaway As Local Counsel
------------------------------------------------------------
Winstar Communications, Inc. asked Judge Farnan to approve their
employment of the Wilmington law firm of Young, Conaway,
Stargatt & Taylor LLP as their local counsel, effective as of
the Petition Date. The principal attorneys and paralegals
presently designated to represent the Debtors, and their current
hourly rates, are:

         James L. Patton, Jr.       $440
         Pauline K. Morgan          $350
         Edwin J. Harron            $290
         M. Blake Cleary            $250
         Edward J. Kosmowski        $240
         Kimberly Beck              $100

These hourly rates are subject to periodic adjustments to
reflect economic and other factors. Other attorneys and
paralegals may from time to time serve the Debtors in connection
with the matters described in this application.

The professional services that Young Conaway will render to the
Debtors include, but are not limited to:

      (a) Provide legal services with respect to their powers and
duties as debtors in possession in the continued operation of
their businesses and management of their properties;

      (b) Prepare and pursue confirmation of a plan and approval
of a disclosure statement;

      (c) Prepare on behalf of the Debtors necessary
applications, motions, answers, orders, reports, and other legal
papers;

      (d) Appear in Court and protect the interests of the
Debtors before the Court; and

      (e) perform all other legal services for the Debtors which
may be necessary and proper in these proceedings.

Pauline K. Morgan, a partner in Young Conaway, advised Judge
Farnan that Young Conaway neither represents nor holds any
interest adverse to the Debtors or these estates in the matters
for which approval of the firm's employment is sought, and is
disinterested. However, in the interests of full disclosure, she
advises that Young Conaway received $47,610 in connection with
the planning, preparation of initial documents, and proposed
postpetition representation of the Debtors. A part of this
payment has been applied to outstanding invoices, and the
remainder constitutes a general retainer.

In addition, in recent weeks Young Conaway employed John D.
McLaughlin, who was formerly employed as an attorney advisor in
the United States Trustee's office for Region 3 from May 1992
through June 2000. Further, Young Conaway has been working in
the past with Shearman & Sterling in other cases and in matters
wholly unrelated to these Chapter 11 cases.

Young Conaway has represented and currently represents Lucent
Technologies in matters wholly unrelated to these cases.
Accordingly, the Debtors proposed to retain special counsel,
Connolly, Bove, Lodge & Hutz, to act as co-counsel to the
Debtors in connection with an adversary proceeding commenced by
the Debtors against Lucent.

Young Conway represents the Official Committee of Unsecured
Creditors in the American Metrocomm Corporation bankruptcies in
Delaware. Ace Comm Corp and Siemans Financial Services,
creditors of the Debtors, are also creditors in the American
Metrocomm case. Young Conway represents the Official Committee
of Unsecured Creditors in the Loewen Group cases, and UBS AG is
a creditor in those cases, and in these. To the extent that
Young Conaway's continued investigation discloses any further
relationships, this application and affidavit will be
supplemented as appropriate. (Winstar Bankruptcy News, Issue No.
4; Bankruptcy Creditors' Service, Inc., 609/392-0900)


WR CARPENTER: Moody's Lowers Senior Note Rating to Ca from B3
-------------------------------------------------------------
Moody's Investors Service lowered the following ratings of WR
Carpenter North America, Inc. as follows:

      * senior subordinated notes to Ca from B3

      * senior implied rating to Caa2 from B2

      * unsecured issuer rating to Caa3 from B1

The outlook is negative while approximately $78 million of long
term debt instruments are affected.

Moody's said that the downgrades reflect poor financial results
in the quarter and nine months ended April 1, 2001, weakening
credit statistics and limited financial flexibility. Moody's
added that the company's lone operating subsidiary, has been
negatively impacted by a general economic slowdown in North
America.

The negative outlook mirrors liquidity problems, doubt over the
company's ability to refinance senior secured outstandings, and
uncertainty as to the length of the economic downturn, according
to Moody's.

WR Carpenter North America, Inc., through its wholly owned
subsidiary Upright, is a manufacturer of the aerial work
platforms, including scissors lifts, boom lifts, portable lifts,
and aluminum scaffolding. The company is based in Fresno,
California,


XPERT TUNE: Files Chapter 11 Petition In W.D. Tennessee
-------------------------------------------------------
Memphis-based Xpert Tune Inc. filed for chapter 11 bankruptcy
protection in the U.S. Bankruptcy Court for the Western District
of Tennessee, according to The Commercial Appeal. The privately
owned company has 14 stores in Memphis, four in Florida, two in
Montgomery, Ala., and one in Knoxville, Tenn. Company Vice
President Hector Vega said the company filed for bankruptcy
because it has several long-term leases on stores that are in
unprofitable markets. He said the company expects to file a
reorganization plan with the court in 60 days.

The company listed assets of about $281,376 and debts of about
$3.57 million. Among the largest unsecured creditors are
Exchange Parts Warehouse of Memphis, which is owed $1.43
million; Tennessee Department of Revenue, owed $548,500; HSF
Inc. of Memphis, owed $340,665; Citgo Petroleum Corp. of Tulsa,
Okla., owed $279,288; and the Florida Department of Revenue,
owed $211,299. (ABI World, May 31, 2001)


XPERT TUNE: Chapter 11 Case Summary
-----------------------------------
Debtor: Xpert Tune, Inc.
         3540 Summer Avenue, Suite 411
         Memphis, TN 38122

Chapter 11 Petition Date: May 24, 2001

Court: Western District of Tennessee (Memphis)

Bankruptcy Case No.: 01-27685

Debtor's Counsel: John L. Ryder, Esq.
                   2700 One Commerce Square
                   Memphis, TN 38103
                   901-525-1455


BOND PRICING: For the week of June 4 - 8, 2001
----------------------------------------------
Following are indicated prices for selected issues:

Algoma Steel 12 3/4 '05             15 - 18(f)
Amresco 9 7/8 '05                   57 - 59
Arch Communications 12 3/4 '05      20 - 23
Asia Pulp & Paper 11 3/4 '05        21 - 25(f)
Chiquita 9 5/8 '04                  66 - 68(f)
Friendly Ice Cream 10 1/2 '07       50 - 55
Globalstar 11 3/8 '04                7 - 8(f)
Level III 9 1/8 '04                 61 - 63
PSINet 11 '09                        8 - 10(f)
Revlon 8 5/8 '08                    50 - 52
Trump AC 11 1/4 '06                 66 - 68
Weirton Steel 10 3/4 '05            39 - 40
Westpoint Stevens 7 3/4 '05         52 - 54
Xerox 5 1/4 '03                     82 - 84


                           *********


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

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

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

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


                           *********


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

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

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

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
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Information contained herein is obtained from sources believed
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