TCR_Public/010621.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Thursday, June 21, 2001, Vol. 5, No. 121

                            Headlines

360NETWORKS: S&P Downgrades Credit Ratings to D
AMERICAN ECO: Disclosure Statement Hearing Set For August 3
AMERICA WEST: Standard & Poor's Revises Outlook to Negative
ARMSTRONG: Court Fixes August 31 General Claims Bar Date
BURKE INDUSTRIES: Senior Notes' Ratings Drop to Ca From Caa1

COLO.COM: Retains Development Specialists To Manage Asset Sale
CONSUMERS PACKAGING: Court Extends CCAA Protection To August 15
CRIIMI MAE: Chairman Purchases 100,000 Shares of Common Stock
DANKA BUSINESS: Amends Terms Of Pending Exchange Offer
DERBY CYCLE: S&P Withdraws All D Ratings Following Default

EDISON: SCE Reaches Agreement With Alternative Energy Generators
EINSTEIN/NOAH: Completes $190 Million Asset Sale To New World
EL COMANDANTE: Moody's Lowers First Mortgage Note Rating to Ca
ESSEX CORP.: Shareholders To Convene On July 12 in Baltimore, MD
FAMILY GOLF: Creditors Panel Won't Oppose Liquidating Plan

FINOVA GROUP: Deadline For Filing Proofs of Claim Is July 13
FRANCHISE MORTGAGE: S&P Lowers Ranking to Below Average
FRUIT OF THE LOOM: Seeks More Time To Act On Unexpired Leases
GLOBAL TELESYSTEMS: Decides Not to Sell Central European Unit
HARVARD INDUSTRIES: Enters Into New Secured Credit Facilities

INDEPENDENT INSURANCE: S&P Revises Ratings to R From BB
INOTEK TECHNOLOGIES: Board Endorses Davis' Acquisition
LUBY'S INC.: Reports 3rd Quarter Losses & Discloses Bank Talks
NEWCARE HEALTH: Examiner & Committee File Joint Liquidation Plan
NEWCARE: Court Denies Motion To Convert Case To Chapter 7

OWENS CORNING: Moves To Defend & Indemnify Employee Defendants
OXFORD AUTOMATED: S&P Cuts Ratings To Low-B's, Outlook Negative
PACIFIC GAS: Judge Gives Tentative Okay For Executives' Bonuses
PSINET INC.: Court Allows Continuance Of Investment Practices
PURINA MILLS: Inks $23 per Share Cash Deal with Land O'Lakes

PURINA MILLS: Board Amends Stockholder Rights Plan
RELIANCE GROUP: Employs Bankruptcy Services LLC As Claims Agent
SENIOR HOUSING: Fitch Rates Preferred Offering At BB-
SOURCE MEDIA: Defaults on Payment of 12% Senior Secured Notes
THOMASTON MILLS: Files Chapter 11 Petition in M.D. Georgia

TOKHEIM CORP: Engages Ernst & Young As New Certifying Accountant
TRANS WORLD: Court Says No To Creditor's Demand For Payment
W.R. GRACE: Committees Hot on Fresenius & Sealed Air Recoveries
WALL STREET DELI: Taps Liuzza To Explore Strategic Alternatives
WARNACO GROUP: Engages Alvarez & Marsal As Restructuring Officer

WASHINGTON GROUP: Dennis Washington to Participate in DIP Pact
WESTPOINT STEVENS: Moody's Cuts Long Term Debt Ratings to Ca
WINSTAR COMMUNICATIONS: AT&T Broadband Seeks Relief From Stay

                            *********

360NETWORKS: S&P Downgrades Credit Ratings to D
-----------------------------------------------
Standard & Poor's lowered its corporate credit rating on
360networks Inc. to 'D' from single-'B'-plus and lowered its
rating on the company's US$175 million 12.5% senior unsecured
notes due 2005 to 'D' from single-'B'. The ratings were removed
from CreditWatch, where they were placed May 3, 2001.

At the same time, all outstanding ratings on 360networks and its
subsidiaries were lowered and remain on CreditWatch with
negative implications. (See below for a complete list of ratings
actions.)

The ratings actions follow 360networks' announcement that it
will not make its scheduled US$10.9 million interest payment due
today on its US$175 million 12.5% senior unsecured notes. The
ratings were originally placed on CreditWatch amid concerns
about the company's funding position and near-term liquidity
prospects, including its ability to obtain additional funding.

The ratings downgrades reflect the increased likelihood that
360networks could defer its next scheduled interest payment on
its US$500 million 12.0% senior unsecured notes due 2009.

The bank loan ratings on the company were lowered to the same
level as the corporate credit ratings on 360USA and GlobeNet
Communications Holdings Ltd., reflecting Standard & Poor's view
that asset protection is not considered adequate to recover bank
obligations under a bankruptcy scenario.

At May 17, 2001, 360networks had cash and unused bank facilities
of US$596 million, which could fund the company through the
second quarter of 2001. It is unclear if 360networks will be
able to obtain additional funding in the near term to sustain
its operations given the failure of discussions with existing
shareholders to resolve the company's funding needs.

Standard & Poor's will continue to monitor the situation.

Ratings Lowered And Removed From CreditWatch Negative

                                                  To     From
      360networks Inc.
        Corporate credit rating                   D      B+
        US$175 mil 12.5% sr unsecd nts due 2005   D      B

      Ratings Lowered And Remaining On CreditWatch Negative

                                             To     From
      360networks Inc.
        US$600 mil 13.0% sr unsecd nts due 2008   CC     B
        US$500 mil 12.0% sr unsecd nts   due 2009 CC     B

      360USA
        Corporate credit rating                   CCC-   B+
        Senior secured bank loan                  CCC-   BB-

      GlobeNet Communications Group Ltd.
        Corporate credit rating                   CCC-   B+

      GlobeNet Communications Holdings Ltd.
        Corporate credit rating                   CCC-   B+
        Senior secured bank loan                  CCC-   BB-


AMERICAN ECO: Disclosure Statement Hearing Set For August 3
-----------------------------------------------------------
According to documents obtained by BankruptcyData.com, American
Eco Corp. filed a Liquidating Plan of Reorganization and related
Disclosure Statement with the U.S. Bankruptcy Court. The Court
scheduled an August 3, 2001 hearing to consider approving the
Disclosure Statement's adequacy. (New Generation Research, June
19, 2001)


AMERICA WEST: Standard & Poor's Revises Outlook to Negative
-----------------------------------------------------------
Standard & Poor's revised its outlook on America West Holdings
Corp. and subsidiary America West Airlines Inc. to negative from
stable (see list below).

The outlook revision is based on weaker-than-anticipated
earnings since mid-2000, expected to continue through 2001. In
addition to pressure on earnings from a weaker economy and
higher labor and fuel prices, the company will incur a $30
million pretax charge in the second quarter of 2001 related to
returns of leased aircraft and work force reductions. Fuel costs
continue to remain at high levels and the company has filed for
federal mediation with its pilots union, likely to result in
higher labor costs (which the rest of the industry is also
experiencing). As a result, America West's financial profile,
which weakened in 2000, is expected to weaken further in 2001.

However, the company has taken steps to improve its
profitability, including a cost-reduction program of $75 million
a year. America West, traditionally among the lowest cost
providers in the industry, should also benefit from improved
performance in its operating statistics and customer service
from depressed 2000 levels. The company also has the flexibility
to reduce its fleet if economic conditions warrant due to the
relatively large number of aircraft it leases on a short-term
basis.

America West Holdings is the parent of America West Airlines,
the eighth-largest airline in the U.S.; and The Leisure Company,
one of the nation's larger tour packagers. Its ratings reflect
the airline's favorable operating costs, among the lowest in the
airline industry, offset by strong competition in its major
markets and a substantial operating lease burden. America West
competes at its two major hubs--Phoenix and Las Vegas--against
Southwest Airlines Co., the other major low-cost operator in the
industry and financially the strongest. America West also faces
considerable competition from large airlines offering discount
fares. America West is a partner in the marketing alliance
between Continental Airlines Inc. and Northwest Airlines Inc.

                     Outlook: Negative

If America West's earnings do not recover, ratings could be
lowered, Standard & Poor's said.

      Outlook Revised To Negative:

           America West Holdings Corp.
                Corporate credit rating at B+

           America West Airlines Inc.
                Corporate credit rating at B+
                Equipment trust certificates at BB
                Senior unsecured debt at B


ARMSTRONG: Court Fixes August 31 General Claims Bar Date
--------------------------------------------------------
Nitram Liquidators, Armstrong World Industries, Inc., and
Desseaux Corporation of North America told Judge Farnan that, to
confirm a plan of reorganization, they need to possess complete
and accurate information regarding the nature, amount and status
of all claims against them that will be asserted in these
Chapter 11 cases. In particular, the development of a long-term
business plan and a plan of reorganization - and the creditors'
ability to evaluate meaningfully the Debtors' plan proposals -
depend on the Debtors' ability to prepare thorough estimates of
the aggregate amounts of claims held against the Debtors'
estates. By Motion, the Debtors asked that Judge Farnan:

      (a) establish the General Claims Bar Date of August 31,
          2001,

      (b) approve a proof of claim form for claims other than
          "excluded claims",

      (c) approve the form and manner of notice of the general
          claims bar date and

      (d) approve special procedures relating to certain employee
          and environmental claims.

Fixing of the General Claims Bar Date and approval of the
procedures described in the Motion will enable the Debtors to
begin the analysis of prepetition claims in a timely and
efficient manner and will give all creditors ample opportunity
to file proofs of claim.

          Creditors Who Must File Proofs of Claim

The Debtors reminded Judge Farnan that Fed R Bankr Pro 3003
provides that the Court will fix the time within which proofs of
claim must be filed in a Chapter 11 case. Moreover, this Rule
states that a creditor whose claim is not scheduled, or whose
claim is scheduled as disputed, contingent or unliquidated must
file a proof of claim.

By Motion, the Debtors asked that the Court establish August 31,
2001, at 5:00 p.m. Eastern time as the last date and time by
which any entity holding a prepetition claim (whether secured,
priority or general unsecured) against one or more of the
Debtors, other than an "excluded claim".

The Debtors suggested that Judge Farnan order that any entity
that holds a claim arising from, or as a consequence of, the
rejection of an executory contract or unexpired lease must file
a proof of claim based upon rejection on or before the later of
(a) 30 days after service of an order of he Court approving the
rejection, or (30 days after service of notice of the rejection,
if the rejection occurs by expiration of time fixed by the
Court, or (b) the General Claims Bar Date.

In addition, the proposed General Claims Bar Date Order should
provide that the trustee or administrative agent for any debt
issued by AWI is authorized, but not obligated, to file a master
proof of claim on behalf of the debtholders for which it acts,
in lieu of, or in addition to, any proof of claim that may be
filed by an individual debtholder. The proposed General Claims
Bar Date Order should further provide that individual
debtholders shall retain the exclusive right to vote on any plan
or plans of reorganization of AWI with respect to their
respective claims.

Under the proposed Order, each entity that asserts a claim
against any of the Debtors that arose prior to December 6, 2000
(other than an Excluded Claim) must file an original, written
proof of the claim that substantially conforms to the Proof of
Claim form proposed to be used by the Debtors, or Official Form
No. 10, so as to be received on or before the General Claims Bar
Date by Trumbull Services LLC, the official claims agent in
these cases, either by mailing or delivering by messenger or
overnight courier, the original proof of claim to: AWI
Claims Processing Center c/o Trumbull Services LLC, Griffin
Center, 4 Griffin Road North, Windsor, Connecticut 06095. The
proposed Order further provides that the AWI Claims Processing
Center will not accept proofs of claim sent by facsimile or
telecopy transmission, and that proofs of claim are deemed
timely filed only if such claims are actually received by the
AWI Claims Processing Center on or before the General Claims Bar
Date.

                       Excluded Claims

Entities are not required to file a proof of claim on or before
the General Claims Bar Date with respect to:

      (a) any claim that has already been properly filed with the
          Clerk of the United States Bankruptcy Court for the
          District of Delaware on a claim form that substantially
          conforms to Official Form No. 10;

      (b) any claim that (i) is listed on the Schedules, (ii) is
          not described as "disputed", "contingent" or
          "unliquidated" on the Schedules, and (iii) that is in
          the same amount and of the same nature as set out in
          the Schedules;

      (c) an administrative expense of any Debtor's Chapter 11
          case under Sections 503(b) or 507(a) of the Bankruptcy
          Code;

      (d) any claim of a Debtor or subsidiary of a Debtor against
          another Debtor or another subsidiary of a Debtor;

      (e) a claim that has been allowed by an order of this Court
          entered on or before the General Claims Bar Date;

      (f) an asbestos-related personal injury claim (other than a
          claim for contribution, indemnity, reimbursement, or
          subrogation); and

      (g) any claim of a current employee of AWI for prepetition
          benefits or deferred compensation.

            Asbestos-Related Personal Injury Claims

By this Motion, the Debtors did not seek to establish a bar date
for asbestos-related personal injury claims, and such claims are
treated as Excluded Claims. Excluded Claims do not include
however, claims for property damage or claims for contribution,
indemnity, reimbursement or subrogation, even tough such claims
may or might arise directly or indirectly as a result of
exposure to asbestos or asbestos-containing products. Subject to
the approval of this Motion, all claims for property damage or
contribution, indemnity, reimbursement or subrogation are
subject to, and governed by, the General Claims Bar Date and the
procedures set out in the notice.

         Consequences of Failure to File Proof of Claim

The Debtors proposed that any holder of a claim against one or
more of the Debtors who is required, but fails, to file a proof
of claim in accordance with the General Claims Bar Date Order on
or before the General Claims Bar Date shall be forever barred,
stopped and enjoined form asserting such claim against the
Debtor (or filing a proof of claim with respect thereto), and
the Debtor and its property shall be forever discharged from any
and all indebtedness or liability with respect to such claim and
the holder will not be permitted to vote on any plan or plans of
reorganization or participate in any distribution in the
Debtor's chapter 11 case on account of the claim or to receive
further notices regarding the claim.

                    Form of Proof of Claim

Due to the size and complexity of these Chapter 11 cases, the
Debtors, with the help of Trumbull, have prepared a "customized"
proof of claim form for use in these cases. For each creditor
whose claim has been listed in the Schedules, the Debtors
propose to include on the proof of claim form sent to the
creditor a description in the upper right hand corner of he form
of (a) the amount of the creditor's claim against a specific
Debtor, as reflected in the Schedules, (b) the type of claim
held by the creditor (i.e., non-priority unsecured, priority
unsecured, or secured), and (c) whether the claim is disputed,
contingent or unliquidated. This will permit the creditor to
readily ascertain how its claim is scheduled against a specific
Debtor without having to examine the Schedules.

If a creditor holds a claim or claims against more than one
Debtor, the creditor will receive a separate proof of claim form
for each Debtor against which it may have a claim. Each proof of
claim form will reflect he claim of the creditor against each
Debtor, as listed in the Schedules.

The Debtors proposed that each Proof of claim filed must (i) be
written in English, (ii) be denominated in lawful currency of
the United States, (iii) conform substantially with the proof of
claim form provided or Official Form No. 10, and (iv) indicate
the Debtor against which the creditor is asserting a claim. The
Debtors asked Judge Farnan to review and approve the proposed
particularized proof of claim form.

           Notice of the General Claims Bar Date Order

Within 30 days from the date of the entry of the General Claims
Bar Date Order, the Debtors propose to mail, in addition to a
Proof of Claim form, a notice of the General Claims Bar Date
Order to:

      (a) the Office of the United States Trustee for the
          District of Delaware;

      (b) the members of the Committees and their attorneys;

      (c) all known prepetition debtholders and the abents and
          trustees for the prepetition debtholders;

      (d) the postpetition lenders and their attorneys;

      (e) all known holders of claims listed on the Schedules at
          the addresses stated therein;

      (f) all counter-parties to executory contracts and
          unexpired leases listed on the Schedules at the
          addresses stated therein;

      (g) the District Director of Internal Revenue for the
          District of Delaware;

      (h) the Securities and Exchange Commission; and

      (i) all entities that requested notices under Fed R Bankr
          Pro 2002 as of the entry of the Order approving this
          Motion.

The proposed General Claims Bar Date Order Notice informs the
parties of the General Claims Bar Date and contains detailed
information regarding who must file a proof of claim, the
procedure for filing a proof of claim, and the consequences of
failing to timely file a proof of claim. The proposed Notice
includes a toll-free telephone number that potential creditors
may call to obtain a proof of claim form and information
concerning the procedures for filing a proof of claim, as well
as the address of the website established by Awi that potential
claimants may visit to obtain information and download proof of
claim forms.

The Debtors further proposed, out of an abundance of caution, to
send the Notice and a blank proof of claim form to any entity
not listed on the Schedules, but from whom any of the Debtors
had purchased goods or service in the several years preceding
the Petition Date. The Debtors, in generating this list, told
Judge Farnan they have relied exclusively upon their
computerized vendor data base and have to reviewed any
additional records. Providing this notice will enable any
creditor inadvertently excluded from the Schedules to receive
notice of the General Claims Bar Date and to file a proof of
claim, if necessary. The Debtors requested that Judge Farnan
approve the form and use of the Notice.

                    Publication Notice

The Debtors have determined that it would be in the best
interest of their estates to give notice by publication to
potential creditors, including (a) those creditors to whom no
other notice was sent and who are unknown or not reasonably
ascertainable by the Debtors, and (b) known creditors whose
addresses are unknown to the Debtors. The publications in which
the Debtors propose to publish the Notice include (i) national
publications; (ii) trade publications in the industries I which
the Debtors do, or formerly did, business, and (iii) regional or
local publications in the areas in which AWI currently has
manufacturing facilities, all at least 30 days before the
General Claims Bar Date. As with the mailed Notice, the
Publication Notice includes a toll-free telephone number that
potential creditors may call to obtain a Proof of Claim form and
information concerning the procedures for filing a proof of
claim, as well as the website address that potential claimants
may visit to obtain information and download Proof of Claim
forms.

                 Employee Notification

As to AWI's current employees and retirees, in lieu of providing
notice to these employees via the General Claims Bar Date Notice
procedures described in the Motion, the Debtors proposed to use
other procedures to notify the employees of the General Claims
Bar Date. The Debtors reminded Judge Farnan that by a "first
day" order, AWI was authorized to pay, and has paid, its
employees' prepetition wages and has continued to honor its
employees' prepetition benefits, as well as other employment-
related obligations (including deferred compensation), in a
manner that is consistent with AWI's prepetition business
practices and policies. AWI has not scheduled deferred
compensation claims of current employees because AWI is
authorized to continue paying such amounts and has every
intention of doing so. If AWI hereafter changes its policy with
respect to the payment of deferred compensation claims, AWI will
file a supplemental schedule listing he amounts owed to current
employees for deferred compensation and providing such employees
the opportunity to file proofs of claim if they disagree with
the scheduled amounts.

Although AWI does not believe that its current employees hold
claims for prepetition wages, AWI intends to notify such
employees of the General Claims Bar Date so that employees who
believe they have claims for unpaid prepetition wages or other
claims against AWI can obtain information regarding when and how
to file a proof of claim and the consequences of failing to
timely file a proof of claim. The notice expressly provides that
current employees are not required at this time to file a proof
of claim with respect to prepetition benefits or deferred
compensation; if they believe, however, that they have other
claims against AWI, they must file a proof of claim asserting
such claims on or before the General Claims Bar Date.
Specifically, AWI will distribute a notice to their employees
and will conspicuously post a notice in all of AWI's offices,
warehouses and facilities within five business days after the
Court's entry of an order approving this Motion.

As with current employees, AWI is authorized to pay, and has
continued to pay, its retirees' post-employment benefits
(including any deferred compensation). In contrast with current
employees, though, AWI has scheduled the amounts it believes it
owes to retirees with respect to post-employment benefits. AWI
intends to notify retirees of the General Claims Bar Date so
that retirees who disagree with the scheduled amounts or believe
they have other claims against AWI can obtain information
regarding when and how to file a proof of claim and the
consequences of failing to timely file a proof of claim. The
Debtors argue that this employee notification procedure is
adequate and sufficient in light of the circumstances.

        Environmental Claims Notification Procedures

Since the Petition Date the Debtors told Judge Farnan they have
engaged in an extensive examination of their own records as well
as public documents in order to locate (a) all facilities
presented owned or operated by AWI, (b) all sites where AWI, or
a hauler on behalf of AWI, may have disposed of AWI's hazardous
wastes, (c) all state or federal Superfund sites at which AWI
has been identified as a potentially responsible party for
environmental liability, (d) all facilities owned or operated by
an affiliate of AWI where AWI may have contractually guaranteed
such affiliate's environmental obligations, and (e) all
facilities formerly owned or operated by AWI. This examination
is intended to enable the Debtors to identify entities that may
wish to assert potential environmental claims against the
Debtors with respect to such sites, whether for remedial or
other costs claimed by governmental agencies or for contribution
or indemnification amounts asserted by other potentially
responsible parties.

The identification and notification of potential creditors of
the Debtors with respect to potential environmental claims is
complicated by the Debtors' extensive history of operations and
the potential for environmental claims to exist as a result of
property that the Debtors may have owned or operated at any time
in their history. Although the Debtors have identified a
substantial number of sites to date, the identification of all
possible sites and potential claimants through out the Debtors'
operating history is difficult, if not impossible.

To the extent the Debtors are able to currently identify
potential claimants, the Debtors propose to furnish such parties
with notice of the General Claims Bar Date in accord with the
common procedures. In addition, the Debtors will provide special
notice of the General Claims Bar Date to state and federal
governmental agencies, the owners of facilities formerly owned
or operated by AWI, and the owners of offsite disposal
facilities.

If, subsequent to the mailing of notices, the Debtors locate any
additional entities to which they would like to provide actual
notice of the Debtors' potential environmental liability, the
Debtors proposed to use special procedures to notify such
additional potential environmental claimants of their right to
file a proof of claim in the Debtors' Chapter 11 cases.
Specifically, the Debtors proposed that (a) the Debtors will
provide written notice to any additional potential environmental
claimants with respect to newly located potential environmental
liabilities, and (b) these additional potential environmental
claimants will be accorded the later of the General Claims Bar
Date and 60 days from the date of the notice to file any proof
of claim to assert potential environmental claims against any of
the Debtors.

Since it is extremely expensive, inefficient and burdensome for
the Debtors to amend their Schedules each and every time they
discover a potential environmental claimant, the Debtors propose
that the environmental claims notification procedure supersede
any obligation the Debtors would have to amend their Schedules
with respect to potential claims and would supersede any other
right a potential environmental claimant would have to file a
proof of claim to assert any potential environmental claim it
may have against the Debtors. The Debtors requested that Judge
Farnan approve this procedure of notice and an absence of the
requirement of amendment and rights to file proofs of claim
otherwise.

             Reasonable Notice and Bar Date

The Debtors believe that the notice procedures described in the
Motion are "reasonably calculated under the circumstances to
apprise an interested party of the pendency of the bankruptcy
case" and the requirement of filing a proof of claim by the
General Claims Bar Date. Recognizing that this could be argued
to be a short bar date for filing proofs of claim, the Debtors
argued that as Trumbull is the authorized claims agent with
respect to these cases, it is responsible for mailing the notice
of the claims bar date and proof of claim forms. Each creditor
who is listed on the Schedule will receive a customized and
particularized Proof of Claim form printed with the appropriate
Debtors' name checked off and the creditor's name, address, and
information regarding the nature, amount and status of its claim
as reflected in the Schedules. Each creditor will also receive
instructions for filing a proof of claim form.

The Debtors have been advised by Trumbull that, based on the
number of parties to whom the Debtors propose to provide notice,
including those entities having obtained notice under Fed R
Bankr Pro 2002 (collectively in excess of 30,000), Trumbull will
be able to complete the mailing within thirty days after the
Court enters its order. By establishing August 31, 2001, as the
general claims bar date, general creditors will have several
months' actual notice of the bar date. This period of time
appears to the Debtors to be clearly adequate as Fed R Bankr Pro
2002(a)(7) only requires 20 days' notice.

            Amendment to Schedules and Objections to Claims

In the event that the Debtors amend their Schedules to (a)
designate a claim as disputed, unliquidated, contingent or
undetermined, (b) change the amount of a claim reflected in the
Schedules, or (c) add a claim that was not listed in the
Schedules, then and in such an event the Debtors propose that
the affected claimant be notified of the amendment and be
granted 60 days from the date of the notification within which
to file a proof of claim or be forever barred from doing so.

The Debtors reserve their right to object to any claim, whether
filed or scheduled, on any grounds. The Debtors also reserve
their right to dispute, or to assert offsets or defense to, any
claim reflected on the Schedules or any amendments to the
Schedules, as to amount, liability, classification or otherwise,
and to subsequently designate any claim as disputed,
unliquidated, contingent, or undetermined.

                     Judge Farnan Agrees

Judge Farnan agreed with the Debtors that the notice procedures
proposed are reasonable and adequate, and that the General
Claims Bar Date of August 31, 2001, is reasonable. Claims
described in the Motion as having to be filed by that date must
be, or the claims holder will be forever barred from asserting
the claim against the Debtors, voting on the plan, or receiving
any distribution under the plan on account of the claim.
(Armstrong Bankruptcy News, Issue No. 7; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


BURKE INDUSTRIES: Senior Notes' Ratings Drop to Ca From Caa1
------------------------------------------------------------
Moody's Investors Service lowered Burke Industries, Inc.'s
ratings due to its deteriorating financial condition with losses
in 1999 and 2000, strained liquidity, highly leveraged balance
sheet, and the recent delays in filing its 2000 10-K and March
2001 10-Q.

Moody's related that the reason for the delay is that there are
likely errors in its reported inventory valuation and that
operating profit have been pointed out and are being
investigated.

The rating agency also noted that the company was in covenant
violation of its bank facility at the end of the third quarter
of fiscal 2000 but obtained a waiver to maintain access for
liquidity.

The ratings that were downgraded are as follows:

      * $30 million of floating rate senior notes, due 2007, to
        Ca, from Caa1,

      * $110 million senior notes, due 2007, to Ca, from Caa1,

      * $20 million senior secured revolving credit facility,
        maturing August 2002, to Caa2, from B2,

      * senior implied rating to Caa3, from B3, and

      * issuer rating to C, from Caa2

The rating outlook is negative while approximately $160.0
million of debt securities are affected.

Burke Industries, Inc., through its subsidiaries, is a maker of
rubber, silicone and vinyl-based products for the commercial
construction (flooring), aerospace and defense, and other
industrial markets. The company is based in Santa Fe Springs,
California.


COLO.COM: Retains Development Specialists To Manage Asset Sale
--------------------------------------------------------------
COLO.COM(SM) has retained Development Specialists, Inc. (DSI) a
prominent national/international workout and turnaround firm, to
organize, manage and negotiate the sale of COLO.COM.

In light of the strong level of interest in the Company and the
Bankruptcy Court's recent entry of an order establishing bidding
procedures, Development Specialists, Inc. has been retained
(subject to Bankruptcy Court approval) to manage, coordinate and
complete the sale process in as efficient and timely manner as
possible.

The engagement of Development Specialists, Inc. has been
supported by both the Debtor and the Counsel for the Official
Creditors' Committee. DSI expects to work closely with both
groups in order to coordinate the flow of information and to
maximize the value of the Company. "We are pleased that we were
able to obtain the assistance of an organization with the
experience and expertise of DSI. Their participation in the sale
process will assure buyers and help us get the best possible
result," said David Stanley, chief restructuring officer of
COLO.COM.

On May 8, 2001 COLO.COM filed Chapter 11 in the United States
Bankruptcy Court Northern District of California. COLO.COM has
21 operational co-location sites located across the United
States. These sites total approximately 650,000 gross square
feet of rented space with an average site size of 25,000 square
feet. With over 170 customers, COLO.COM has monthly recurring
revenues of approximately $2.2 million. The average number of
Carriers per site is 5.5.

Development Specialists, Inc. was selected due to its national
presence, its experience in the industry and its proven ability
to manage rapid and complex sales within the context of
distressed situations including bankruptcy. DSI's experience and
capabilities become particularly imperative given the
technological scope of COLO.COM, the large number of interested
parties, and the broad geographic dispersion of the sites.
Interested buyers should note that the Due Diligence phase of
the process will continue through July 9, 2001 with opening
bids, financing proposals and marked-up asset purchase
agreements due by 5:00 PM PST. On July 9, 2001. The selection of
the lead bidder will be completed on July 11, 2001 and
Bankruptcy Court approval of Successful Bid or Bids will be held
on August 2, 2001. The closing of any and all transaction(s) is
to be completed by August 10, 2001.


CONSUMERS PACKAGING: Court Extends CCAA Protection To August 15
---------------------------------------------------------------
Consumers Packaging Inc. announced that it has received an
extension until August 15, 2001 pursuant to an Initial Order
dated May 23, 2001of the Ontario Superior Court of Justice made
under the Companies' Creditors Arrangement Act (CCAA).

The extension of the Order continues the stay from legal
proceedings against the Company in respect of its Canadian
operations, and allows it to continue work to develop a
restructuring plan. The Toronto office of KPMG Inc. has been
appointed Monitor under the CCAA and is assisting the Company
in formulating its restructuring plan.

"Consumers Packaging continues to operate on a 'business as
usual' basis during this restructuring period," said Brent
Ballantyne, Chief Restructuring Officer and Chief Executive
Officer. "Our plants continue to operate and we are meeting our
customer requirements."

Mr. Ballantyne said good progress is being made on developing a
restructuring plan. "Our key stakeholders are fully co-operating
as we work with a number of third parties to develop a plan that
will address the Company's current financial needs."

The Court Order establishes June 29 as the deadline for the
submission of restructuring or purchase proposals by third
parties.

Consumers Packaging employs approximately 2400 people in Canada.
It manufactures and sells glass containers for the food and
beverage industry. It commenced operations in 1917 and supplies
approximately 85% of the glass containers used by the Canadian
juice, food, beer, wines and liquor industries. In Canada, the
company operates six facilities, three in Ontario (Toronto,
Brampton and Milton), and one each in Quebec (Montreal), New
Brunswick (Scoudouc) and British Columbia (Lavington). In the
United States, it operates a plant in Glenshaw, Pennsylvania
through its wholly owned subsidiary, GGC LLC (Glenshaw Glass).

Consumers Packaging also owns 60% of Anchor Glass Container
Corporation, which is the third largest manufacturer of glass
containers in the United States. It employs approximately 4,000
persons and operates nine glass manufacturing plants in the
United States.


CRIIMI MAE: Chairman Purchases 100,000 Shares of Common Stock
-------------------------------------------------------------
CRIIMI MAE Inc. (NYSE: CMM) announced that its chairman, William
B. Dockser purchased a total of 100,000 shares of the Company's
common stock. The purchases occurred on June 14, 2001 at prices
ranging from 59 to 61 cents per share.

Mr. Dockser said, "In light of the recent developments of the
Company's emergence from bankruptcy and reinstatement of the
servicing ratings for CRIIMI MAE's servicing affiliate by
Standard and Poor's, I believe that the current market value of
CRIIMI MAE's common stock makes the shares an attractive
investment."


DANKA BUSINESS: Amends Terms Of Pending Exchange Offer
------------------------------------------------------
Danka Business Systems PLC (Nasdaq: DANKY) has amended two of
the conditions of its pending exchange offer for its outstanding
$200 million of 6.75% convertible subordinated notes due 2002
(CUSIP Nos. G2652NAA7, 236277AA7, and 236277AB5) in response to
comments made by the Securities and Exchange Commission. Danka
said that, in response to comments made by the Securities and
Exchange Commission, the following changes have been made:

      * The exchange offer is now conditioned on the consent of
        Danka's senior bank lenders. Previously, the exchange
        offer was conditioned on the refinancing of Danka's
        senior bank debt.

      * In addition, the exchange offer is now conditioned on the
        closing of the purchase of DSI by Pitney Bowes Inc.
        Previously, the exchange offer was conditioned on closing
        of the sale of DSI. Danka and Pitney Bowes entered into
        an agreement for the purchase of DSI by Pitney Bowes on
        April 9, 2001 and Danka anticipates that the purchase by
        Pitney Bowes of DSI will close by June 29, 2001.

All other terms of the exchange offer remain in effect as
previously announced.

Banc of America Securities LLC is the exclusive dealer manager
for the exchange offer. D.F. King & Co., Inc. is the information
agent and HSBC Bank USA is the exchange agent. Additional
information concerning the terms and conditions of the offer may
be obtained by contacting Banc of America Securities LLC at
(888) 292-0070.

Danka Business Systems PLC, headquartered in London, England and
St. Petersburg, Florida, is one of the world's largest
independent suppliers, by revenue, of office imaging equipment
and related services, parts and supplies. Danka provides office
products and services in approximately 30 countries around the
world.

Danka Services International, the outsourcing division of Danka
Business Systems PLC, provides on- and off-site document
management services, including the management of central
reprographics departments, the placement and maintenance of
photocopiers, print-on-demand operations and document archiving
and retrieval services.


DERBY CYCLE: S&P Withdraws All D Ratings Following Default
----------------------------------------------------------
Standard & Poor's withdrew its 'D' corporate credit and senior
secured debt ratings on U.K.-based bicycle manufacturer Derby
Cycle Corp., as well as its 'D' senior unsecured debt rating on
guaranteed subsidiary, Lyon Investments B.V.

All ratings on Derby and Lyon were revised to 'D' on May 15,
2001, after Derby's announcement that it would not be making the
scheduled interest payment on both the $100 million 10% senior
notes issue due 2008 and the DM110 million ($53 million) 9.375%
senior notes issue due 2008, Standard & Poor's said.


EDISON: SCE Reaches Agreement With Alternative Energy Generators
----------------------------------------------------------------
Southern California Edison (SCE) announced it has reached an
agreement with most of its renewable Qualifying Facilities (QF)
power producers that addresses past payment issues and future
pricing considerations, and creates a mechanism for ending
numerous lawsuits.

"We believe this agreement will help bring stability to an
important segment of California's energy market," said SCE
Chairman, President & CEO Stephen E. Frank.

The plan was negotiated between the utility and key
representatives of the QF industry and facilitated by Governor
Gray Davis' office.  To date, SCE has received signed agreements
from QFs representing approximately 95% of its renewable energy
capacity and today executed those contracts.  The company hopes
that the small number of remaining producers will also agree.
Certain elements of the agreements are subject to the approval
of the California Public Utilities Commission.

The plan calls for generators to provide power at a fixed price
-- 5.37 cents/kWh -- over the next five years, eliminating some
of the price volatility that has plagued California's energy
markets during the current crisis.  The plan stays all existing
legal action, and assures that no new legal action will be
initiated unless the terms of the agreement are not met.

"The people of Edison are committed to pursuing the benefits of
negotiated practical solutions to California's energy crisis,"
said Frank.  "The QF agreement and the MOU, if approved, are
critical steps toward resolving the crisis.  A bankruptcy, in
contrast, would lead to years of delay and uncertainty for our
customers and raise serious questions about the business climate
in California."

An Edison International company, Southern California Edison is
one of the nation's largest electric utilities, serving a
population of more than 11 million via 4.3 million customer
accounts in a 50,000-square-mile service area within central,
coastal and Southern California.


EINSTEIN/NOAH: Completes $190 Million Asset Sale To New World
-------------------------------------------------------------
Einstein/Noah Bagel Corp. completed the sale of substantially
all the assets of the Company and its majority owned subsidiary,
Einstein/Noah Bagel Partners, L.P. to Einstein Acquisition
Corp., an affiliate of New World Coffee - Manhattan Bagel, Inc.,
for approximately $160 million in cash and the assumption of up
to $30 million in liabilities. New World was the successful
bidder in an auction that was conducted on June 1, 2001 in the
U.S. Bankruptcy Court in Phoenix, Arizona.


EL COMANDANTE: Moody's Lowers First Mortgage Note Rating to Ca
--------------------------------------------------------------
Moody's Investors Service cut the rating of El Comandante
Capital Corporation's 11.75% $68 million first mortgage notes
due 2003 to Ca from Caa1. Approximately $68 million of debt
securities are affected.

Other ratings lowered are as follows:

      * senior implied rating to Ca from Caa1

      * long-term unsecured issuer rating to C from Caa2

Moody's said that the downgrade considers the company's failure
to make the June 15, 2001 scheduled interest payment on the
first mortgage notes. Reportedly, El Comandante is currently
pursuing ways to remedy the interest default during the 30-day
default period but so far has not been able to arrange the
necessary financing.

The rating agency said that it does not anticipate the company
to fulfill the required maturity dates of the first mortgage
notes without seeking additional financing, thus the downgrade.
Moody's also stated that the Ca rating reflects the limited
recovery prospects to the first mortgage noteholders.

El Comandante Capital Corporation, a wholly-owned subsidiary of
Housing Development Associates S.E. (HDA), is headquartered in
Puerto Rico. HDA owns and operates Puerto Rico's only
thoroughbred racing facility, the El Comandante Racetrack.


ESSEX CORP.: Shareholders To Convene On July 12 in Baltimore, MD
----------------------------------------------------------------
The Annual Meeting of Stockholders of Essex Corporation, a
Virginia corporation, will be held at 9:30 a.m., Thursday, July
12, 2001, at Oriole Park at Camden Yards, 555 Russell Street,
6th Floor Banquet Room, Baltimore, Maryland, for the following
purposes:

      (1) To elect nine (9) directors to serve until the next
          Annual Meeting of Stockholders or until their
          successors are duly elected and qualified;

      (2) To approve the adoption of the Essex Corporation 2001
          Stock Option and Appreciation Rights Plan;

      (3) To ratify the appointment of independent auditors; and

      (4) To transact such other business as may properly come
          before the Annual Meeting.

The Board of Directors fixed the close of business on May 21,
2001, as the record date for the determination of Stockholders
entitled to notice of, and to vote at, the Annual Meeting.


FAMILY GOLF: Creditors Panel Won't Oppose Liquidating Plan
----------------------------------------------------------
Despite no recovery for general unsecured creditors under the
liquidating chapter 11 plan that Family Golf Centers Inc.
recently filed, the creditors' committee won't challenge the
plan. Melville, N.Y.-based Family Golf has already sold most of
its assets, and only a few odds and ends remain, according to
company counsel. While a portion of the roughly $125 million in
sale proceeds has already been distributed to certain secured
creditors, counsel said the bulk of the funds will be paid out
following court approval of the plan. (ABI World, June 19, 2001)


FINOVA GROUP: Deadline For Filing Proofs of Claim Is July 13
------------------------------------------------------------
To administer their cases efficiently and to protect their
interests and those of creditors and other parties in interest,
The FINOVA Group, Inc. sought and obtained the Court's approval,
pursuant to Rule 3003(c)(3) of the Bankruptcy Rules, fixing July
13, 2001, 4:00 p.m. (Mountain Standard Time) as the Bar Date by
which proofs of claim against the Debtors that arose before the
petition date are to be received; otherwise the creditors, with
the exception of the following entities, will be forever barred
from asserting such claim against the Debtors:

      (a) government units for which the Bar Date is September 3,
2001;

      (b) any person or entity that has already properly filed a
proof of claim against any of the Debtors in the form and manner
required by Bankruptcy Rules 3003 and 9009 and substantially
conforming to Official Bankruptcy Form No. 10;

      (c) any person or entity whose claim is listed on the
Schedules and the claim is not "disputed," "contingent," or
"unliquidated,";

      (d) any person having a claim under sections 503(b) or
507(a) of the Bankruptcy Code as an administrative expense of
the Debtors' chapter 11 cases;

      (e) any person or entity whose pre-petition claim has been
paid in full post-petition by the Debtors as authorized by the
Court;

      (f) any of the Debtors or their affiliates making an
intercompany claim;

      (g) holders of claims in respect of principal and accrued
interest arising under any public debt securities of the
Debtors;

      (h) holders of equity interests in The FINOVA Group Inc.
provided, however, that any person or entity who wishes to
assert a claim against the Debtors that is not based solely upon
ownership of such equity interest, including, without limitation
any claims or interest as asserted in, or holders who are or may
be members of the putative classes alleged in, the cases listed
below (the "Securities Actions") must file a proof of claim on
or before the Bar Date:

          * In re FINOVA Group Inc. Securities Litigation,
currently pending in the United States District Court for the
District of Arizona, No. CIV 00-619-PHX-SMM;

          * Cartwright v. Sirrom Capital Corp., et al., No. CIV
01-158-PHX-SMM, currently pending in the United States District
Court for the District of Arizona, consolidated for all purposes
with In re FINOVA Group, Inc., Securities Litigation;

          * Sirrom Partners and Sirrom G-l v. The FINOVA Group
Inc., et al., No. CIV Ol-l52-PHX-SMM, currently pending in the
United States District Court for the District of Arizona,
consolidated for all pretrial purposes with In re FINOVA Group
Inc. Securities Litigation;

          * William Kass v. Matthew M. Breyne, et al., currently
pending in the Court of Chancery in New Castle County, Delaware,
No. 18306-NC;

          * Cindy Burkholder, et al. v, Samuel L. Eichenfield, et
al., currently pending in the United States District Court for
the District of Arizona, No. CIV 00-1737-PHX-LOA; and,

          * Ronald Benkler v. Geosge M. Miller II, et al.,
currently pending in the Circuit Court for the State of
Tennessee, 20th Judicial District, No. 00C22630, or

          (i) any person or entity that holds a claim that has
been allowed by an order of the Court entered on or before the
Bar Date.

The Bar Date order specifies that:

      (1) each proof of claim shall

          (i) be written in the English language,

         (ii) be denominated in lawful currency of the United
              States as of the Petition Date, and

        (iii) conform substantially with the Proof of Claim form
              as approved by the Court, or in conformity with
              Official Form No. 10, and the original must be
              filed so as to be received on or before the Bar
              Date either (x) by mail to FGI, Claims
              Administration Center, P.O. Box 8980, Scottsdale,
              Arizona 85252-8980, or (y) by messenger or
              overnight courier to FGI, Claims Administration
              Center, 4800 N. Scottsdale Road, 6th Floor,
              Scottsdale, Arizona 85251-7623 (tel: (480) 636-
              4800) (the "Claims Administration Center"); and

         (iv) a separate proof of claim must be filed with
              respect to each Debtor against which a claim is
              asserted;

      (2) proofs of claim arising from rejection of executory
contract or lease or stock or option authorized after the Bar
Date must be filed on or before the later of (i) 30 days after
service of the applicable rejection order or (ii) the Bar
Date;

      (3) the Debtors may rely on the proofs of claim filed by
the indenture trustee of the Debtors' bond issues, and
bondholders are not required to file proofs of claim to evidence
claims for the principal and interest due on the bonds;

      (4) the records of the Debtors' stock transfer agent will
provide prima fade evidence of the amount and validity of stock
ownership interests in the Debtors, and stockholders are not
required to file proofs of interest or proofs of claim to
evidence their stock ownership interests in the Debtors;

      (5) the Bar Date Notice in its approved form will be deemed
good, adequate and sufficient notice if it is served by being
deposited in the United States mail, first class postage
prepaid, on or before May 14, 2001, upon:

          * the Office of the United States Trustee for the
            District of Delaware;
          * each member of the official committee of unsecured
            creditors and the official committee of equity
            security holders and the attorneys for such
            committees;
          * all known holders of claims listed on the Schedules
            at the addresses stated;
          * all counter parties to executory contracts and
            unexpired leases listed on the Schedules at the
            addresses listed;
          * all known bondholders of the Debtors and the agents
            and/or trustee's as of the Petition Date;
          * all known stockholders of the Debtors as of the
            Petition Date;
          * all current and recent former employees of the
            Debtors;
          * all persons or entities with whom the Debtors have
            done business in the two years preceding the Petition
            Date;
          * the District Director of Internal Revenue for the
            District of Delaware;
          * the Securities and Exchange Commission;
          * all persons and entities requesting notice pursuant
            to Bankruptcy Rule 2002 as of the entry of the order
            approving this Motion;

      (6) so long as the initial mailing of the Bar Date Notice
occurs on or before May 14, 2001, the Debtors may make
supplemental mailings of the Bar Date Notice up to 25 days in
advance of the Bar Date, as may be necessary in situations where
(a) notices are returned, (b) certain parties acting on behalf
of parties in interest decline to pass along notices to such
parties, and (c) additional potential claimants become known;

      (7) with respect to claimants identified within or after 25
days of the Bar Date, the Debtors may establish special bar
dates that would each be at least 20 days after the date on
which Debtors effect mailing of notice of each special bar date.

      (8) pursuant to Bankruptcy Rule 2002(l), the Debtors shall
publish a bar date notice in The Wall Street Journal (National
Edition), The New York Times (National Edition), and USA Today
(National Edition) on at least one occasion at least 45 clays
prior to the Bar Date or, depending upon the publishing deadline
and frequency of publication of a particular newspaper or
periodical, as soon as practicable after the entry of the Bar
Date Order;

      (9) Pursuant to Local Rule 1009-2, in the event that the
Debtors amend their schedules, the Debtors will within 10 days
transmit notice of the amendment to the creditor, and notice of
the creditor's right to file a Proof of Claim by the later of
the Bar Date or 20 days from the notice date.

     (10) King & Associates, Inc. is authorized to retain and pay
third party service providers, subject to approval from the
Debtors, to the extent necessary to insure proper preparation
and distribution of the Bar Date Notice and Proof of Claim and
is authorized to be reimbursed by the Debtors;

     (11) the Bar Date Order is without prejudice to the right of
the Debtors to seek a further order of the Court fixing the date
by which a holder of a claim not subject to the Bar Date must
file such claim against the Debtors;

     (12) the rights of all holders of claims, creditors and
parties in interest are reserved to challenge the Debtors'
designation of claims scheduled against a particular Debtor as
set forth on the Schedules, as well as any designations by
creditors on the proof of claim form of a particular Debtor
against which their claims are asserted. (Finova Bankruptcy
News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


FRANCHISE MORTGAGE: S&P Lowers Ranking to Below Average
-------------------------------------------------------
Standard & Poor's lowered its ranking to Below Average from
Average on Franchise Mortgage Acceptance Co. (FMAC) as a
Franchise Loan Servicer. Concurrently, the ranking is removed
from CreditWatch, where it had been placed with negative
implications on Oct. 6, 2000, following a downgrade in the
credit rating of the parent, Bay View Bank N.A. Subsequently, on
Jan. 8, 2001, FMAC's ranking was lowered to Average from Above
Average, kept on CreditWatch with negative implications, and
removed from Standard & Poor's Select Servicer List.

The ranking action is based on various issues surrounding FMAC's
delivery and disclosure of information to Standard & Poor's,
concerns regarding the company's operational capabilities to
service its portfolios in a sufficiently proactive manner, and
Standard & Poor's eroded confidence in the company's ongoing
stability. Simultaneously, FMAC has been stressed with the
challenge of maintaining staffing levels and resources to
address the demands presented from its surge in loan
delinquencies that have well exceeded its industry peers. Based
on these combined factors, Standard & Poor's finds that the
status of FMAC's servicing operation is not consistent with an
Average ranking.


FRUIT OF THE LOOM: Seeks More Time To Act On Unexpired Leases
-------------------------------------------------------------
Fruit of the Loom, Ltd. is party to approximately 30 leases that
it has not moved on to assume or reject. The leases relate to
Debtor's corporate offices and various manufacturing,
distribution and other facilities. Since the petition date, the
leases have remained in effect and have not expired or
terminated. The Debtors do not want to find themselves in the
position of (a) prematurely assuming a lease that is
inconsistent with their long-term business plan or (b)
prematurely rejecting a lease that could deliver value to their
estates and their creditors. Accordingly, the Debtors asked
Judge Walsh for a further extension, pursuant to 11 U.S.C.
Sec. 365(d)(4), of the time within which they must make lease
disposition decisions through December 31, 2001.

Fruit of the Loom told the Court that it has been re-evaluating
every aspect of its business, including its leases. As a result
of this review, Fruit of the Loom has either assumed or assumed
and assigned certain leases. This evaluation is substantially,
but not fully, complete. It must be completed for the remaining
leases so management can intelligently decide what action to
take with each lease in the context of Fruit of the Loom's
overall business plan. In addition, Fruit of the Loom has been
working diligently to steward its submitted plan of
reorganization.

Give the size and complexity of Fruit of the Loom's operations,
the evaluation will not be complete before the June 30, 2001
deadline. Ms. Stickles told the Court that without further
extension, Fruit of the Loom risks prematurely and improvidently
assuming leases that could later prove burdensome, thus creating
large uncapped potential administrative claims against the
estates. J. Kate Stickles, Esq., at Saul Ewing, directed Judge
Walsh's attention to Nostas Associates v. Costich, et al. (In re
Klein Sleep Products, Inc.), 78 F.3d 18, 28 (2d Cir. 1996).
Fruit of the Loom also risks rejecting leases that management
could later discover to be critical to its reorganization
efforts.

Ms. Stickles informed the Court that one of the most extensive
lists of factors to consider in determining whether cause exists
for an extension was formulated in In re Wedtech Corp., 72 B.R.
464 (Bankr. S.D.N.Y. 1987). According to Ms. Stickles, the
Wedtech Court held that the following factors, among others,
tend to indicate that cause exists to extend the statutory
period:

      * where the leases are an important asset of the estate
such that the decision to assume or reject would be central to
any plan of reorganization;

      * where the case is complex and involves large numbers of
leases;

      * where the debtor has had insufficient time to
intelligently appraise each lease's value to a plan of
reorganization.

Ms. Stickles asserted that under the Wedtech criteria, cause
clearly exists to extend the period within which Fruit of the
Loom must assume or reject the leases. She told Judge Walsh that
the above criteria are clearly met and, therefore, the deadline
should be extended. The relief sought by Fruit of the Loom is
without prejudice to the right of lessors to seek a reduction of
the time to assume or reject the leases.

A hearing on this fourth request for an extension is set for
June 22, 2001, at 2 p.m. in Wilmington. (Fruit of the Loom
Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


GLOBAL TELESYSTEMS: Decides Not to Sell Central European Unit
-------------------------------------------------------------
Global TeleSystems, Inc. (GTS) (OTC:GTLS; NASDAQ EUROPE:GTSG;
Frankfurt:GTS) has terminated discussions to sell its Central
European Division because of unfavorable market conditions for
the sale of telecommunications businesses. GTS had announced in
November 2000 that it would consider selling its Central
European unit as a part of its ongoing restructuring effort, but
determined to take the unit off the market in light of its
recent sale of its majority interest in Golden Telecom, Inc. The
investment bank Credit Suisse First Boston (CSFB) had been
managing the sale process on GTS's behalf.

Robert Amman, GTS chairman and CEO, said: "GTS Central Europe is
an extremely well-performing business with EUR 3.6 million in
EBITDA last quarter and with EUR 15 -20 million in anticipated
EBITDA this year on expected 2001 revenues of about EUR 100-110
million. It has a young, focussed and experienced management
team and a strong, early position in each of the key countries
in the region. While there have been a number of interesting
proposals made for our Central European unit, we thought it best
to take the asset off the market in light of relatively
unattractive current market conditions and the liquidity
provided from our recent sale of our interest in Golden
Telecom."

In a related development, GTS announced that it had initiated
discussions with the holders of public debt and convertible
preferred stock issued by it, and holders of public debt issued
by its Global TeleSystems Europe BV subsidiary, with a view
toward developing a consensual financial restructuring plan
involving an exchange of non-cash paying securities for those
outstanding securities. The Company also announced that it had
met with legal and financial advisors representing informal
committees of those bondholders, and that further discussions
have been scheduled.


HARVARD INDUSTRIES: Enters Into New Secured Credit Facilities
-------------------------------------------------------------
Harvard Industries, Inc. entered into a new senior secured
credit facility dated May 31, 2001 with The CIT Group/Business
Credit, Inc. and Citicorp USA, Inc. of up to $65 Million,
secured by substantially all of the assets of the Company and
its domestic and foreign subsidiaries. The credit facility
provides for up to $45 million of revolving credit borrowings
with a $15 million sub-limit letter of credit facility, and two
$10 million term loans. The amount that may be borrowed under
the credit facility from time to time will be based on the value
of the Company's accounts receivable, inventory, and equipment,
among other things. The proceeds of the revolving credit
borrowings will be used to finance working capital and other
general corporate purposes. The proceeds of the term loans and a
portion of the revolving credit borrowings were used to satisfy
obligations under its former credit facility with General
Electric Capital Corporation ("GECC").

The Company also entered into a new $10 million junior secured
credit facility dated May 31, 2001 with Hilco Capital LP,
secured by substantially all of the assets of the Company and
its domestic and foreign subsidiaries. The credit facility
provides for a $10 million term loan. The proceeds of the term
loan were used to partially satisfy obligations under its credit
facility with General Electric Capital Corporation ("GECC").
Hilco also acquired 500,596 shares of Harvard Industries, Inc.
common stock representing approximately 5% of the issued and
outstanding shares on the closing date and the right to purchase
additional shares in the future in order to maintain its
interest in the Company's common equity.

The Company used of the proceeds of the term loans and
borrowings under the revolving credit facility from The CIT
Group/Business Credit, Inc., Citicorp USA, Inc. and Hilco
Capital LP, to satisfy all obligations under its $45 million
senior secured revolving credit facility with General Electric
Capital Corporation ("GECC").

"We are very pleased with this outcome," said Roger Pollazzi,
Chairman & Chief Executive Officer. "The management team has
worked extremely hard to restructure Harvard operationally and
financially due to recent trends in the auto industry and the
economy in general."

"With our financing in place, we are now concentrating on
implementing our business strategy of entering new market
segments that complement our traditional core businesses and
exiting unprofitable businesses," added Pollazzi.

Harvard Industries, Inc. designs, develops, and manufactures a
broad range of components for OEM manufacturers and the
automotive aftermarket, as well as aerospace and industrial and
construction equipment applications worldwide. The Company has
approximately 2,000 employees at 9 plants in the United States
and Canada.


INDEPENDENT INSURANCE: S&P Revises Ratings to R From BB
-------------------------------------------------------
Standard & Poor's revised its counterparty credit and insurer
financial strength ratings on U.K.-based insurer Independent
Insurance Co. Ltd. (Independent) to 'R' from double-'B'. The 'R'
rating is applied to insurers that have experienced a regulatory
or similar action relating to their solvency.

This rating action follows the company's placement into
provisional liquidation at the request of its directors
following their conclusion that there was insufficient certainty
that the company's insurance operations could be run off on a
solvent basis. Accordingly, the company, and its parent,
Independent Insurance Group PLC, are now under the management of
the Provisional Liquidators, PricewaterhouseCoopers.

The uncertainty surrounding the adequacy of existing claims
reserves has been exacerbated recently by press reports of
unrecorded claims. Additional uncertainty has been created by
the disclosure of the existence of alleged reinsurance
irregularities. It is probable that the Provisional Liquidators
will put forward a Scheme of Arrangement, which will mean that
claim obligations may not be settled in full, and if they are
ultimately settled in full, they are unlikely to be settled in a
timely manner.

This rating action updates Standard & Poor's previous press
release when Independent's ratings were lowered to 'BB' and
CreditWatch implications on the company were revised to negative
from developing, following the failure to complete the capital
raising exercise being pursued by its parent company and the
subsequent temporary suspension of business pending the
ascertainment of the appropriate level of technical provisions
and the reinsurance position. The company's ratings were
originally placed on CreditWatch Developing on May 24, 2001.
Standard & Poor's expects to update this rating action shortly,
following further discussions with the liquidators.


INOTEK TECHNOLOGIES: Board Endorses Davis' Acquisition
------------------------------------------------------
Inotek Technologies Corporation has sent an information
statement to its stockholders (holders of common stock, par
value $0.01 per share), in connection with the proposed
acquisition of the company by Davis Instruments, LLC. The
acquisition will be effected by the merger of a wholly-owned
subsidiary of Davis with Inotek under an Agreement and Plan of
Merger dated May 15, 2001, between Inotek, Davis and the
stockholders named therein.

Under the merger agreement, at the effective time of the merger,
each outstanding share of Inotek common stock, other than
treasury shares and shares as to which appraisal rights have
been properly exercised, will be converted into the right to
receive $0.65 in cash.

The Board of Directors of Inotek unanimously support the merger.
In addition, Neal E. Young, David L. White and Dennis W. Stone,
stockholders of Inotek holding 72.2% of the outstanding voting
stock of Inotek, have consented in writing to the merger and
adopted the merger agreement and have executed and delivered
irrevocable proxies in favor of Davis to vote their shares of
Inotek in favor of the adoption of the merger agreement and
approval of the merger.

This action by controlling stockholders is sufficient to ensure
that a majority of the stockholders of Inotek adopt the merger
agreement and approve the merger without the vote of any other
stockholder of Inotek. Accordingly, approval is not required and
is not being sought from other holders of Inotek's common stock.


LUBY'S INC.: Reports 3rd Quarter Losses & Discloses Bank Talks
--------------------------------------------------------------
Luby's, Inc. (NYSE: LUB) announced the results of operations for
the quarter ended May 31, 2001. Sales were $122 million compared
to $126 million in the corresponding quarter last year, a
decline of 3.65%. Due to store closings over the past nine
months, the Company operated 17 fewer restaurants during this
quarter compared to the same quarter of the previous year; after
adjusting to a same-store basis, sales declined 0.44%. The net
loss for the quarter was $1.1 million, or $(0.05) per share
compared to net income of $5.8 million, or $0.26 per share for
the same period last year.

Sales for the nine months ended May 31, 2001, were $348 million
compared with $371 million for the same period last year, a
decline of 6.34%. The net loss was $12.5 million, or $(0.56) per
share, for the first nine months of fiscal 2001, compared to net
income of $17.6 million, or $0.79 per share, for the first nine
months of fiscal 2000.

The Company has a signed commitment letter with its bank group
to amend its existing credit facility. The amendment will cure
the default status that occurred in the second quarter. It is
expected that the amendment will be formally executed before the
issuance of the third quarter 10-Q.

Chris Pappas, Luby's new President and CEO, commented, "We are
making foundational changes and operational improvements that
are driven by a systematic and contagious focus on excellence.
We reinforce this every day and at every opportunity. The road
to improved financial performance will not be easy, but Harris
Pappas, our COO, and I are investing significant effort and
resources in Luby's in a concerted effort to reach this
objective."

The San Antonio-based company operates 215 Luby's restaurants in
ten states, and its stock is traded on the New York Stock
Exchange (NYSE: LUB).


NEWCARE HEALTH: Examiner & Committee File Joint Liquidation Plan
----------------------------------------------------------------
According to documents obtained by BankruptcyData.com, Court-
appointed Examiner William Brandt and the official committee of
unsecured creditors filed a Joint Liquidating Plan of
Reorganization and related Disclosure Statement for the NewCare
Health Corp. case with the U.S. Bankruptcy Court. (New
Generation Research, June 19, 2001)


NEWCARE: Court Denies Motion To Convert Case To Chapter 7
---------------------------------------------------------
The U.S. Bankruptcy Court denied without prejudice Heller
Healthcare Finance, Inc.'s motion to convert NewCare Health
Corp.'s Chapter 11 reorganization to a Chapter 7 liquidation.
(New Generation Research, June 19, 2001)


OWENS CORNING: Moves To Defend & Indemnify Employee Defendants
--------------------------------------------------------------
Acting for Owens Corning, J. Kate Stickles, joined by Norman L.
Pernick and Jeremy W. Ryan of the Wilmington firm of Saul Ewing
LLP, tell Judge Fitzgerald that the Debtors are concerned about
the effect on the morale of their employees who are being named
as defendants in various litigation matters, and want to provide
a fund to pay the costs of those employees' defenses and
indemnify them.

In October 2000 the Debtors filed a Motion seeking judicial
approval and authorization to pay prepetition employee wages,
salaries, commissions, business expenses, and other accrued
compensation, and to continue employee benefit plans and
programs postpetition. The Debtors said the primary purpose of
this Motion was to protect the Debtors' business operations form
the disruption that would result if certain basic protections
were not provided to the Debtors' current and former employees.
These protections were intended to maintain employee morale and
facilitate the Debtors' ability to retain the employees during
the Chapter 11 process. Judge Walrath entered an Order granting
this Motion on the same day it was filed.

As the Debtors' bankruptcy cases have progressed, the Debtors
have come to understand that the employee Motion did not address
the ability of the Debtors to defend and indemnify present and
former employees who are individually named as defendants in
lawsuits for acts perform while in the ordinary course and scope
of their employment.

At this time, the Debtors said they are aware of six lawsuits,
all of which relate to underlying events which occurred prior to
the Petition Date. Should the Debtors not be allowed to defend
and indemnify the employees with respect to these and similar
actions, the employees will be forced to bear their own defense
costs and potentially have their own personal assets be at risk
to satisfy any judgment rendered. More significantly, should the
Debtors not be permitted to defend and indemnify employees, the
morale of the Debtors' employees is likely to suffer severe
damage, and the Debtors' ability to retain quality personnel
will be jeopardized. The Debtors simply cannot risk the
disruption and failure of employee morale that would result if
the Debtors are not authorized to defend and indemnify their
employees. Citing the "necessity of payment" rule first
enunciated by the Supreme Court in "Miltenberger v. Logansport,
C. & S. W. R. Co.", the Debtors asked that Judge Fitzgerald use
her equitable powers to authorize the Debtors to assume the
costs of defense of their employees and indemnify them against
any judgment for acts performed while in the ordinary course and
scope of their employment, as the continued service and
dedication of all of the Debtors' employees is critical to the
Debtors. (Owens Corning Bankruptcy News, Issue No. 12;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


OXFORD AUTOMATED: S&P Cuts Ratings To Low-B's, Outlook Negative
---------------------------------------------------------------
Standard & Poor's lowered the following ratings of Oxford
Automotive Inc.:
                                       To            From
                                       --            ----
      * Corporate credit rating        B+            BB-
      * Senior secured debt            B+            BB-
      * Subordinated debt              B-            B


The ratings are removed from CreditWatch, where they were placed
on March 30, 2001.

The rating actions reflect Standard & Poor's expectation that
Oxford's credit protection measures will remain below previously
expected levels and that continuing industry pressures and heavy
capital spending requirements will prevent the company from
significantly reducing debt leverage over the next two years. In
addition, the rating actions take into account the company's
reduced liquidity. The outlook is now negative.

Oxford is a Tier I supplier of engineered metal components,
assemblies, and modules for the original equipment automotive
industry. Core products include closure systems, suspension
systems, and complex structural subsystems.

Oxford's operating performance has deteriorated over the past
year as a result of the weakening in North American automotive
demand and increased costs associated with the launch of new
business. As a result, credit protection measures have
deteriorated and are well short of expectations. Debt/EBITDA is
currently estimated to be in the 6.5 times (x) area (adjusting
for restructuring charges and other one-time factors). Previous
ratings had incorporated an expectation that debt/EBITDA would
fall to the 4x area and remain below 4x (except for temporary
spikes immediately following an acquisition). Given Oxford's
significant investment requirements this year and the likelihood
of continued industry pressures over the near term, the
company's debt leverage is likely to remain above previously
expected levels over the near to intermediate term.

Current ratings assume that ongoing cost-cutting actions will
enable the company to improve credit protection measures
somewhat over the next year, with debt/EBITDA falling below the
6x area and approaching the 5x area by the end of the current
fiscal year.

Earnings pressures and tooling requirements for new business
have, together, reduced the company's flexibility for dealing
with current industry pressures. Oxford recently amended its
credit agreement to relax covenants over the next year. However,
it did not increase the size of its $175 million bank facility
and, given the company's diminished near-term cash flow outlook,
availability under the facility is likely to be less than
previously expected. As of Dec. 31, 2000, the company had $62
million of availability under its bank line and availability is
expected to decline from that level during fiscal year 2002 (FYE
is March 31).

                    Outlook: Negative

Ratings assume that cost-containment efforts will enable the
company to mitigate current industry pressures and generate
improved credit protection measures over the next year. Should
earnings pressures or investment requirements lead to a weaker-
than-expected liquidity position, ratings are likely to be
lowered, Standard & Poor's said.


PACIFIC GAS: Judge Gives Tentative Okay For Executives' Bonuses
---------------------------------------------------------------
A federal bankruptcy judge tentatively approved Pacific Gas &
Electric's plan to award $17.5 million in bonuses to top
executives, saying he did not want to interfere in the day-to-
day business dealings of the shattered utility, according to
Reuters. But Judge Dennis Montali said that before giving the
final okay to the plan he would need more information, including
which executives would receive bonuses, how much they would be
paid and why stock options were not considered as ways to keep
these employees from jumping ship.

The bonuses, dubbed a management-retention program, have been
one of the more contentious issues involved in the bankruptcy of
Pacific Gas & Electric, which filed for chapter 11 protection in
April after racking up some $9 billion in debt during
California's energy crisis. The payout proposal, which was first
floated last month, earmarks a total of $17.5 million for
payments to about 200 top utility executives. Some of the most
lavishly rewarded include the top six officers of the utility
and 17 other senior managers, who would see their salaries
doubled under the plan. Montali told the utility he wanted to
know the names of the top six recipients of the bonuses and how
much they would receive, as well as the titles and dollar
amounts of the 17 executives below them. (ABI World, June 19,
2001)


PSINET INC.: Court Allows Continuance Of Investment Practices
-------------------------------------------------------------
At PSINet, Inc.'s behest, Judge Gerber authorized the Debtors:

      (A) to deposit and invest the money of their estates in the
manner proposed in its motion, which in essence is a continuance
of their existing deposit and investment practices or
commercially comparable practices, in lieu of the requirements
of Section 345 of the Bankruptcy Code and the U.S. Trustee's
Guidelines;

      (B) to sell certain marketable securities representing
minority interests in a number of publicly traded enterprises
(the "Public Venture Investments"), in the manner the Debtors
were doing prior to the Petition Date, without having to attempt
to auction or privately negotiate the sale of these interests.

                 (A) Investment Practices

Prior to the commencement of their bankruptcy cases and in the
ordinary course of business, the Debtors deposited their money
in 31 bank accounts at 17 different financial institutions.
Except as described below, these accounts are ordinary
depository accounts, maintained for operational and not
investment purposes. To the extent they bear interest, it is at
nominal rates. At times the individual balances in these
accounts will exceed the current limits of governmental
insurance. Were it not for the waiver granted by the Court,
these deposits would otherwise be subject to the bonding or
collateralization requirements of Section 345(b) and the U.S.
Trustee's Guidelines unless those requirements are waived.

Other than the Venture Investments, the only investments the
Debtors presently make are:

      (a) overnight investments of the funds that are swept from
the Debtors' main concentration account with Fleet Bank N.A. to
the Fleet overnight investment sweep account at the close of
business each day,

      (b) investments in certificates of deposit held in accounts
with Bank of America N.A., JP Morgan Chase Bank and United Bank
(the "Collateral Accounts") to secure letters of credit and

      (c) investments of excess amounts not needed for daily
operations through two investment accounts with Donaldson,
Lufkin & Jenrette and Merrill Lynch (the "Investment Accounts").

Funds in the Overnight Investment Account are invested in a
Fleet money market account that complies with the Debtors'
Investment Guidelines. The Overnight Investments mature the next
business morning and are returned to the Fleet Concentration
Account; earned interest is credited on a monthly basis.

Funds in the Collateral Accounts are invested in certificates of
deposit ("CDs") that comply with the Debtors' Investment
Guidelines. Interest income from the CDs in the Collateral
Accounts is transferred to the Fleet Concentration Account, or
if not needed for daily operations, transferred to the
Investment Accounts for investment therein. Existing CDs in the
Collateral Accounts are usually rolled over into new CDs as they
mature.

The great bulk of the Debtors' aggregate cash reserves are held
in the Investment Accounts and invested therein in compliance
with the Debtors' Investment Guidelines.

The Overnight Investment Account, the Collateral Accounts, the
Investments Accounts and the investments therein are largely
uncovered by governmental insurance. They will therefore be
subject to the bonding and collateralization requirements of
Section 345(b) and the U.S. Trustee's Guidelines unless those
requirements are waived.

The Debtors believe that, with very little risk differential,
their existing practices are significantly less burdensome and
more appropriately tailored to their business needs than the
practices otherwise required under the Bankruptcy Code and by
the U.S. Trustee.

The Debtors' Investment Guidelines apply to all deposits and
investments. The Investment Guidelines call for (i) compliance
with the financial covenants of the indentures governing the
various senior notes issued by PSINet Inc. and (ii) maximum
reasonable net return on investment of the Debtors' funds,
consistent with the Debtors' needs for safety and liquidity.

Under the Investment Guidelines, the Debtors' deposits and
investments are limited to the following:

(a) any evidence of Indebtedness, maturing not more than one
     year after the date of acquisition,

     (1) issued by the United States of America, or an
         instrumentality or agency thereof, and guaranteed fully
         as to principal, premium, if any, and interest by the
         United States of America or

     (2) which is denominated in euros and is issued by the
         Federal Republic of Germany, the Federal Republic of
         France or the United Kingdom, or any instrumentality or
         agency thereof, and guaranteed fully as to principal,
         premium, if any, and interest by the issuing government;

(b) any certificate of deposit, maturing not more than one year
     after the date of acquisition, issued by, or time deposit
     of,

     (1) a commercial banking institution that is a member of the
         Federal Reserve System, or

     (2) a bank or trust company organized under the laws of any
         member of the European Union whose long-term debt is
         rated "A-" or higher according to S&P or "A-3" or higher
         according to Moody's,

and such banking institution, bank or trust company also has
(i) combined capital and surplus and undivided profits of not
less than $500 million, and (ii) short term debt with a rating,
at the time as of which any investment therein is made, of "P-1"
or higher according to Moody's Investors Service, Inc. or any
successor rating agency or "A-1" or higher according to Standard
& Poor's Corporation or any successor rating agency;

(c) commercial paper, maturing not more than 270 days after the
     date of acquisition, issued by a bank or corporation, other
     than an Affiliate or Subsidiary of PSINet, with a rating, at
     the time as of which any investment therein is made, of "P-
     1" or higher according to Moody's or "A-1" or higher
     according to S&P and which is organized under the laws of
     (1) the United States of America or (2) any member of the
     European Union provided that such member's long-term debt is
     rated "A-" or higher according to S&P or "A-3" or higher
     according to Moody's; and

(d) any money market accounts or funds at least 95% of the
     assets of which constitute cash equivalents of the kinds
     described in (a), (b) or (c) above.

As of May 23, 2001, the Investment Account with Donaldson,
Lufkin & Jenrette held cash and investments with an approximate
value of $268.0 million, virtually all of which was invested in
commercial paper of banks and corporations meeting the
requirements of the Debtors' Investment Guidelines. As of April
30, 2001, the Investment Account with Merrill Lynch held cash
and investments with an approximate value of $34.0 million,
virtually all of which was invested in time deposits with banks
meeting the requirements of the Debtors' Investments Guidelines.
The Debtors estimate that the approximate value and investment
of funds in the Investment Accounts as of the Petition Date do
not vary substantially from the amounts and types of investments
held as of May 23, 2001 and April 30 2001, respectively.

The Debtors believe that their investments and deposits in the
Accounts, the Overnight Investment Account, the Collateral
Accounts and the Investment Accounts are commercially reasonable
and appropriate and consistent with the intent of Section 345 of
the Bankruptcy Code, and the Investment Practices developed by
them are very conservative. The Investment Practices permit
investments only in high grade securities. Such investments, the
Debtors note, provide the PSINet estates with the benefit of a
reasonable rate of return, while at the same time providing
safety and liquidity. Although largely not insured by the
government, a surety or collateralized, the deposits and
investments are among the safest types available and bear
practically no risk to principal from market fluctuations, the
Debtors represent. The Debtors believe that, as long as cash is
available in amounts sufficient to permit adequate
diversification of investments and investments are restricted in
accordance with the Investment Practices, no corporate surety or
collateralization is required to afford protection to creditors
comparable to or greater than that afforded by use of a
corporate surety or collateralization when a smaller amount of
cash is invested in a less diversified portfolio. The yield on
deposits and investments under the Investment Practices, the
Debtors note, will be greater than if the Debtors are restricted
solely to direct investment in government securities.

As to investments in securities of private entities, the Debtors
believe that any corporate surety that might be obtained to
guarantee the safety of the investment would likely not have
significantly greater financial strength than the private
entities in which they could invest under the Investment
Practices. Moreover, a bond secured by the undertaking of a
corporate surety would be unduly expensive, even if such a bond
were available, and could offset much of the financial gain
derived from investing in private as well as government or
government guaranteed securities.

Therefore, the Debtors believe it would be in the best interest
of the creditors of the estate for the Debtors to continue to
follow the Investment Practices, notwithstanding the
requirements of Section 345(b) and the U.S. Trustee's
Guidelines.

                (B) Public Venture Investments

These marketable securities representing minority equity
interests in approximately 16 public companies with a market
value of approximately $10 million, were acquired prepetition by
the Debtors as part of their venture capital and/or services-
for-equity program.

The Debtors believe that the returns to the estate will be
maximized if these securities are disposed of when market
conditions are favorable, as the Debtors were doing prior to the
Petition Date.

Because none of these interests convey control or other
management rights, the Debtors do not believe that attempting to
auction or privately negotiate the sale of these interests would
improve recoveries for the estates. Any proceeds of the
disposition of the Public Venture Investments will be deposited
in the Fleet Concentration Account, or if not needed for daily
operations, invested in the Investment Accounts in compliance
with the Debtors' Investment Guidelines. (PSINet Bankruptcy
News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


PURINA MILLS: Inks $23 per Share Cash Deal with Land O'Lakes
------------------------------------------------------------
Land O'Lakes, Inc. and Purina Mills, Inc. (Nasdaq: PMIL)
announced jointly that they have signed a definitive merger
agreement, under which Land O'Lakes will acquire Purina Mills.
Under terms of the agreement, Land O'Lakes will acquire all of
Purina Mills' stock at a price of $23 per share in cash.

Land O'Lakes President and Chief Executive Officer Jack Gherty
said the acquisition makes sense in terms of both feed industry
trends and the future of Land O'Lakes feed operations. Purina
Mills will become part of Land O'Lakes Farmland Feed LLC
following the acquisition.

"We are bringing together well-recognized brands in different
product categories, as well as complementary geography and
product lines," Gherty said. "At the same time, we are building
the economies of scale and critical mass necessary to compete
nationally in the consolidating feed industry. This transaction
clearly has positive implications for the long-term success of
our farmer-owned feed system."

The Purina Mills product lines, brands, nationwide dealer
network and checkerboard trademark logo will be maintained,
Gherty said. The Purina Mills organization will continue to be
based in St. Louis, Mo., with its own sales and marketing team.
Purina Mills Chief Executive Officer Brad Kerbs said the
proposed acquisition has positive implications for Purina
dealers and customers.

"Our focus has consistently been on positioning our organization
and our dealers for long-term success. While pursuing that
strategic intent, discussions with Land O'Lakes revealed our two
organizations have a number of very valuable synergies," Kerbs
said. "This transaction will create a more competitive national
feed system, well-positioned to contribute to the long- term
success of Purina dealers and customers."

The acquisition will deliver additional value through increased
efficiency in such areas as production, distribution and
purchasing, Gherty said, adding that little change is
anticipated at the dealer and customer levels.

"The key to this acquisition is the fact that it brings together
two organizations and two leading brands with a proven record of
quality and service and a high level of customer recognition and
acceptance," Gherty said. "As we work to preserve and build upon
that record, we will focus on making the transition to the new
organization as seamless and as smooth as possible."

The acquisition of Purina Mills by Land O'Lakes is subject to
certain conditions, including approval by the shareholders of
Purina Mills, Inc. and receipt by Land O'Lakes of financing for
the acquisition. Land O'Lakes was advised by, and has received a
commitment for financing, subject to customary conditions, from
JPMorgan.

In connection with the execution of the definitive merger
agreement, GSCP Recovery, Inc., which beneficially owns
approximately 28 percent of the outstanding shares of Purina
Mills' common stock, has entered into a voting agreement
pursuant to which, among other things, such stockholder has
agreed (and has granted a proxy) to vote its shares of Purina
Mills' common stock in favor of the acquisition.

Land O'Lakes ( http://www.landolakesinc.com) is a national,
farmer-owned food and agricultural cooperative, with sales
approaching $6 billion. Land O'Lakes does business in all fifty
states and more than fifty countries. It is a leading marketer
of a full line of dairy-based consumer, foodservice and food
ingredient products across the U.S.; serves its international
customers with a variety of food and animal feed ingredients;
and provides farmers and local cooperatives with an extensive
line of agricultural supplies (feed, seed, crop nutrients and
crop protection products) and services.

Purina Mills (http://www.purinamills.com),based in St. Louis,
Mo., has 48 plants and approximately 2,300 employees nationwide.
Purina Mills is permitted, under a perpetual, royalty-free
license agreement from Ralston Purina Company, to use the
trademarks "Purina" and the nine-square Checkerboard logo.
Purina Mills is not affiliated with Ralston Purina Company,
which distributes Purina Dog Chow and Purina Cat Chow brand pet
foods.


PURINA MILLS: Board Amends Stockholder Rights Plan
--------------------------------------------------
Purina Mills, Inc. (Nasdaq: PMIL) announced that its Board of
Directors amended Purina Mills' stockholder rights plan to make
the provisions of the plan inapplicable to the Land O'Lakes
merger agreement. The amendment also provides that a person or
entity (other than GSCP Recovery, Inc., Purina Mills' largest
stockholder) will become an "acquiring person" under the rights
agreement if such person or entity becomes the beneficial owner
of 10% or more of the outstanding common stock of Purina Mills.
If any person or entity (other than GSCP Recovery) already owns
10% or more of the outstanding Purina Mills common stock, that
person or entity will not be considered an "acquiring person"
unless and until such time as that person or entity acquires
additional shares of Purina Mills' common stock.


RELIANCE GROUP: Employs Bankruptcy Services LLC As Claims Agent
---------------------------------------------------------------
Reliance Group Holdings, Inc. said that the parties in interest
in its chapter 11 cases include customers, employees, taxing
authorities, bank lenders, bondholders, trade creditors and
stockholders, among others. They number well in excess of 1,000.
All such parties must be included in the noticing and claims
process. Neither the Clerk nor the Company has the equipment or
staff to docket and maintain the large number of proofs of claim
that will be filed.

Reliance told the Court that the most effective and efficient
manner to handle proofs of claim is to engage an independent
third party to act as claims processing agent.

Bankruptcy Services LLC ("BSI") is a firm specializing in claims
management, consulting and computer services. It has been
engaged in this business for several years and is one of the
pioneers of the bankruptcy claims processing business. BSI has
considerable experience as a claims agent and has acted as the
official claims agent in numerous large cases.

In Reliance's cases, BSI will:

      (a) Establish the address where all proofs of claims should
be filed;

      (b) Relieve the Clerk's Office of notice responsibility
relating to the bar date and claims processing;

      (c) Assure the Court that it has the ability to notice,
docket and maintain proofs of claims;

      (d) Furnish a bar date notice and proof of claim form to
creditors;

      (e) Serve notices to creditors regarding meetings and
deadlines;

      (f) File with the Clerk's Office a certificate of service
which includes a copy of the notice served, a list of recipients
and the mailing date;

      (g) Receive, docket, maintain, photocopy, and transmit all
proofs of claim filed;

      (h) Maintain and protect the original proofs of claim;

      (i) Provide access to the claims without charge during
regular business hours;

      (j) Make all original documents available to the Clerk's
Office on an expedited, immediate basis;

      (k) Maintain a proof of claim docket in sequential order,
which specifies the claim number, date received, name and
address of claimant and agent, amount of claim and
classification;

      (l) Transmit to the Clerk's office a copy of the register
every month;

      (m) Maintain a mailing list for all entities that have
filed a proof of claim;

      (n) Record all transfers of claims pursuant to rule 3001(e)
and provide notice of the transfer;

      (o) Comply with applicable state, municipal and local laws
and rules, orders, regulations and requirements of federal
government departments and bureaus;

      (p) Comply with further conditions as the Clerk's Office
may prescribe;

In addition, Reliance wants BSI to assist in fulfilling claims-
related obligations including:

      (1) Assist with schedules of assets and liabilities,
statements of financial affairs, schedule of executory contracts
and unexpired leases;

      (2) Provide training and consulting support to manage
claims reconciliation;

      (3) Assist with the objection process;

      (4) Assist with preparation, mailing and tabulation of
ballots to the plan of reorganization;

      (5) Provide requisite notices throughout the Chapter 11
proceedings;

      (6) Any other administrative services requested by RGH.

Kathy Gerber, director of operations at BSI declared that BSI is
a disinterested party. Section 156(c) gives the Court power to
utilize outside agents provided that Debtor pays the costs.
Debtors proposed to pay BSI a retainer of $5,000 out of their
estates.

BSI does not consider itself to be a "professional" for purposes
of the Bankruptcy Code. Therefore, to reduce expenses, RGH
proposed that the fees of BSI be treated as an administrative
expense and be paid on a monthly basis. RGH informed the Court
that BSI meets the legal definition of a "disinterested party."
(Reliance Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


SENIOR HOUSING: Fitch Rates Preferred Offering At BB-
-----------------------------------------------------
Fitch has assigned its 'BB-' rating to a recent offering of $25
million trust preferred securities by SNH Capital Trust I, a
newly-formed financing subsidiary of Senior Housing Properties
Trust (SNH). Proceeds will be used to reduce bank borrowings of
SNH. Fitch has also assigned an issuer rating of 'BB+' to SNH
and affirmed the company's 'BBB-' rating assigned to its $270
million secured revolving credit agreement expiring Sept. 15,
2002. The Rating Outlook is Stable.

SNH is a $440 million (current market capitalization) equity
health care REIT with investments in 85 properties in 23 states.
By value, the SNH portfolio is weighted toward 14 high-quality
senior living properties operated and leased by Marriott Senior
Living Services, which provide approximately 65% of SNH's net-
lease revenues. The portfolio also includes 71 skilled nursing
and assisted living facilities, including a group of 57
properties that SNH has taken back from distressed operators.
Because the majority of SNH's portfolio value is concentrated
within the Marriott pool, which serves as collateral for the
secured bank credit facility, the 'BB-' trust preferred rating
assigned by Fitch recognizes the relatively high structural and
economic subordination of the preferred to senior secured
lenders. Partially mitigating this issue is SNH's current
moderate use of debt leverage of 26% on a market basis as of
March 31, 2001, and solid fixed charge coverage estimated by
Fitch at 3.5 times (x) on a pro forma basis for the current
offering.

The 14 properties operated by Marriott Senior Living Services
($325 million book value, 55% of total investments) consist of
stabilized (92% weighted average occupancy for 2000) congregate
care and assisted living facilities with a total of 4,030 units.
The majority of the units consist of independent living and
assisted living units, resulting in a relatively high 88%
percentage of revenues from private pay sources. Skilled nursing
beds account for approximately 20% of total units. The portfolio
continues to perform well, overall, resulting in a 6.6% increase
in percentage rent paid to SNH during 2000. While the pool
includes two weaker facilities (each with a high proportion of
assisted living units) that do not cover their allocated rent,
concerns associated with these properties are mitigated by
cross-default of these leases to the other 12 properties, and
are further backstopped by a guarantee of lease revenues from
Marriott International Inc.

The remainder of SNH's portfolio consists primarily of nursing
home properties, including 14 facilities that are operated by
independent health care operators generating annual rent of
approximately $17 million, and 57 properties currently operated
by SNH for its own account. The group of 57 nursing home
properties represent approximately $145 million of book asset
value or 25% of total investments. In order to stabilize
facility-level operations (which have suffered from the combined
impact of lower Medicare reimbursement rates, lower occupancies
and operator bankruptcies), SNH's management company has formed
its own nursing home operating company to manage these assets.
So far, free cash flow is running at a break-even level after
capital expenditures for physical plant and information systems.
SNH's strategy is to stabilize and ultimately re-lease or sell
these properties to independent operators, although Fitch
cautions that high labor rates, increasing insurance costs and
competition from the assisted living sector will challenge
management to restore historical profitability and value to
third-party operators.

As of March 31, 2001, SNH's total debt leverage consisted of
$105 million of borrowings under the $270 million secured
revolving credit facility. During 2000, borrowings were reduced
nearly 50% through the sale of four properties back to operator
Brookdale Living Communities for $123 million. As a result of
SNH's moderate overall leverage, consolidated interest coverage
from EBITDA is above average at 4.5x for 1Q'01, and SNH does not
currently foresee the need for significant incremental
borrowings beyond maintenance capital expenditures at the
foreclosure properties. While financing options remain limited
for the health care REIT sector generally, Fitch believes that
the collateral value of the Marriott properties combined with
SNH's other assets should allow it to comfortably refinance
outstanding borrowings when the bank facility matures in 2002.

SNH was formed in October 1999 when HRPT Properties Trust
(senior debt rated 'BBB/Stable' by Fitch) spun-off 51% of its
ownership in SNH to shareholders. Both SNH and HRPT are
externally managed by REIT Management and Research, a privately
held real estate advisory and property management company.


SOURCE MEDIA: Defaults on Payment of 12% Senior Secured Notes
-------------------------------------------------------------
Source Media, Inc. (OTC Bulletin Board: SRCM), a provider of
interactive digital cable TV applications and audio and text
applications for all digital media platforms, has announced that
the indenture trustee of its 12% Senior Secured Notes due May 1,
2001 declared the entire principal amount of the Notes and all
accrued interest due and payable immediately, due to the
company's failure to make the current interest payment. As a
result, Source Media will record the entire principal amount of
the Notes as short-term indebtedness rather than long-term
indebtedness. Source Media and its financial advisor, UBS
Warburg, continue to analyze Source Media's strategic
alternatives and options, and hold discussions with the
unofficial committee of holders of the Notes. Source Media is
conducting its business as usual.

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,
you may visit its website at www.sourcemedia.com


THOMASTON MILLS: Files Chapter 11 Petition in M.D. Georgia
----------------------------------------------------------
Thomaston Mills, Inc. (OTC Bulletin Board: TMSAE.OB, TMSBE.OB)
filed a voluntary petition for reorganization under Chapter 11
of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the
Middle District of Georgia at Macon. During the bankruptcy
proceedings, the Company expects to continue certain operations
while seeking a purchaser for all or part of its assets under
court protection from creditors.

"The decision to file a Chapter 11 petition was an extremely
difficult one, but we believe it is the only alternative that
may provide the breathing space and relief necessary to find a
purchaser for the Company, or, if none can be found, an orderly
wind-down of the Company's operations," said A. William Ott,
Acting President and Chief Executive Officer of Thomaston Mills.
As part of recent efforts to reduce the Company's operating
expenses and overhead costs during its search for a purchaser,
the Company last week ceased operations at its Peerless
manufacturing facility in Thomaston, Georgia, thereby
discontinuing the spinning and weaving operations for its home
furnishings lines. This shut-down has resulted in the furlough
of approximately 540 employees who worked at the Peerless
facility. "We deeply regret the hardship that these changes will
cause to many of our employees who have been loyal to Thomaston
Mills over the years," said Mr. Ott.

Thomaston Mills operates three textile plants in the Thomaston,
Georgia area with approximately 900 employees. The Company
produces sheets, pillowcases and comforters for retail
customers, and also produces textiles for the home furnishings
and piece dyed markets.


TOKHEIM CORP: Engages Ernst & Young As New Certifying Accountant
----------------------------------------------------------------
Tokheim Corporation has indicated a change in its certifying
accountant having engaged Ernst & Young LLP as its independent
public accountants, effective June 12, 2001.


TRANS WORLD: Court Says No To Creditor's Demand For Payment
-----------------------------------------------------------
The U.S. Bankruptcy Court in Wilmington, Del., ruled Monday that
Trans World Airlines Inc. (TWA) doesn't have to immediately pay
off a $507,000 administrative expense claim to a creditor,
according to Dow Jones. Swissport Puerto Rico, which provided
ground and baggage handling services to TWA at the San Juan
Airport, said it would have difficulty operating its business if
it had to wait for TWA to get its reorganization plan approved
and to finish liquidating before it gets repaid. Judge Peter J.
Walsh said he would allow the administrative claim to be entered
but couldn't approve an immediate payment unless Swissport
submits evidence of its financial straits. Judge Walsh denied
Swissport's motion without prejudice, giving the company the
opportunity to come back to the court with proof of its
situation. Judge Walsh said that if Swissport could prove its
case at a later date, he could possibly order TWA to pay a
portion of the debt before a plan effective date. TWA filed for
chapter 11 bankruptcy protection on Jan. 10, listing assets of
$2.1 billion and liabilities of $2.3 billion. (ABI World, June
19, 2001)


W.R. GRACE: Committees Hot on Fresenius & Sealed Air Recoveries
---------------------------------------------------------------
Justice and equity require that the Official Committee of
Asbestos Property Damage Claimants and the Official Committee of
Personal Injury Claimants be empowered to prosecute W. R. Grace
& Co.'s fraudulent conveyance claims arising out of the Sealed
Air Corporation and Fresenius Transactions.  Those transactions
stripped billions of dollars of value from W.R. Grace & Co.,
through complex schemes that worked a fraud on Grace's asbestos
claimants, Scott L. Baena, Esq., at Bilzin Sumberg Dunn Baena
Price & Axelrod LLP, and Elihu Inselbuch, Esq., at Caplin &
Drysdale, Chartered, told Judge Farnan.

The Debtors and their legal team at Kirkland & Ellis suffer from
debilitating conflicts of interest, the Asbestos Committees
assert, making them unable to pursue recovery of the assets
spun-out in the Sealed Air and Fresenius Transactions.
Moreover, the Debtors are unwilling to pursue those fraudulent
conveyance claims and have done everything in their power thus
far to safeguard their fraud by seeking injunctive relief to
bring pending actions in other courts to a screeching halt.  The
Unsecured Creditors Committee's "wait and see" approach baffles
the Asbestos Committees.  Waiting, as the Unsecured Creditors'
Committee suggested, to see whether the Debtors are solvent and
capable of paying all creditors' claims without the need for
prosecuting fraudulent conveyance claims -- determinations that
could take years -- runs too high a risk.  Evidence will be
lost, witnesses' memories will fade, new statute of limitation
or repose defenses may arise, and subsequent transfers of the
assets could place them further out of reach.  The time to
assert the claims is now, Messrs. Baena and Inselbuch argue, and
the Asbestos Committees are the right parties to prosecute the
claims.

The Asbestos Committees step the Court through their rendition
of the facts underpinning the fraudulent conveyance claims:

                   The 1996 Fresenius Transaction

        In 1996, the operating assets of the Grace corporate
group were owned by W.R. Grace & Company -- Conn ("Grace I")
through various divisions and direct and indirect subsidiaries.
One of its most profitable subsidiaries was National Medical
Care, Inc. ("NMC"), a health care business.  In 1996, Grace I
divested itself of NMC, thereby purporting to insulate NMC
assets from the asbestos liability confronting Grace I.  Grace
I, however, did not receive adequate consideration for NMC, and
the transfer appears tainted by intent to defraud asbestos
creditors.  The Asbestos Committees understand the transfer
happened this way:

            * Grace I transferred NMC to the ultimate parent of
the Grace corporate group, a publicly-owned New York holding
company known as W.R. Grace & Company ("Grace II").  The
consideration for this transfer was $2,262,000,000 in cash
borrowed by NMC, about half of which went to reduce Grace I's
debt.  The $2,262,000,000 consideration was much less than the
$3,175,000,000 to $4,000,000,000 value that the Grace group
ascribed to NMC on a stand-alone basis in reports to
shareholders.

            * Grace II created a new Delaware subsidiary also
named W.R. Grace & Company ("Grace III"), and then transferred
the stock of Grace I to that new corporation.  Grace I thus
ceased to be a direct subsidiary of Grace II and became a direct
subsidiary of Grace III.

            * The stock of Grace III was spun-off to the public
shareholders of Grace II.  This step ostensibly ended the formal
affiliation between Grace III (with its subsidiary, Grace I) and
Grace II ) with its subsidiary, NMC).

            * Grace II was renamed Fresenius National Medical
Care Holding Company ("FMC Holding").  It then merged into a
subsidiary of Fresenius A.G. ("Fresenius"), a German company
operating a worldwide dialysis business.  As part of the same
plan, Fresenius contributed its U.S. subsidiary, Fresenius
U.S.A., to FMC Holding.

In sum, the Asbestos Committees charge, these complex maneuvers
stripped NMC out of Grace I and turned Grace II, renames as FMC
Holding, into a subsidiary of Fresenius holding two
subsidiaries, Fresenius U.S.A. and NMC. As a result, the public
shareholders of Grace II received 44.8% of the combined
NMC/Fresenius business, plus preferred stock of FMC Holding.  In
all, the Asbestos Committees calculate, those shareholders
received approximately $4,500,000,000 in value, yet the
consideration paid to Grace I was only $2,262,000,000.

                    The 1998 Sealed Air Transaction

       The Fresenius transaction left Grace I as a subsidiary of
Grace III operating a flexible packaging business and a
specialty chemicals business.  In 1998, Grace disposed of the
packaging business in a series of maneuvers evidently modeled on
the Fresenius transaction.  The Asbestos Committees understand
the transfer happened this way:

            * Grace III separated its packaging business and
specialty chemicals business into separate subsidiaries,
creating "Cryovac" as a new subsidiary to receive the packaging
business. As consideration for the packaging business, Grace I
received $1,200,000,000.  That money was borrowed by the
transferred business and was used to pay down Grace I's debt.

            * Grace III proceeded to sin-off Grace I, which
became the subsidiary of a new company known as Grace Specialty
Chemicals. Grace Specialty Chemicals was later renamed as yet
another iteration of W.R. Grace & Company ("Grace IV").

            * Grace III then merged its Cryovac subsidiary with
Sealed Air Corporation U.S., a subsidiary of the company then
known as Sealed Air Corporation, producers of bubble wrap and
other packaging.  In connection with this merger, Grace III
changed its name to Sealed Air Corporation.

In short, the Asbestos Committees charge, Grace I was divested
of the packaging business and $1,200,000,000 in debt was removed
from Grace I's books and placed on the books of the packaging
business as transferred.  Public shareholders of Grace III, now
known as Sealed Air Corporation, received 63% of the combined
packaging/bubble wrap business.

                                *   *   *

These fraudulent conveyance claims, the Asbestos Committees
contended, may well constitute the most substantial asset of the
Debtors' estates.  The claims engender numerous complex issues,
including the transfer of venue of litigation pending in San
Francisco; Spokane County, Washington; Massachusetts and
elsewhere, the assertion of state law fraud claims and causes of
action arising under Chapter 5 of the Bankruptcy Code.  These
matters, the Asbestos Committees said, require prompt attention
and decisive action to ensure that W.R. Grace's estates and
their creditors realize full value.

Accordingly, the Asbestos Committees asked Judge Farnan for
permission to step into the Debtors' shoes and prosecute these
fraudulent conveyance claims without further delay.

Objections to the Asbestos Committees' Joint Motion must be
filed with the Court by June 29, 2001.  Judge Farnan will
convene a hearing on the matter on July 19, 2001. (W.R. Grace
Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


WALL STREET DELI: Taps Liuzza To Explore Strategic Alternatives
---------------------------------------------------------------
Wall Street Deli, Inc. (OTCBB:WSDI) reported that it has engaged
Liuzza Management Consulting, L.L.C. to advise the Company on
strategic alternatives for enhancing shareholder value and to
coordinate a series of activities on behalf of the Board. In
view of increasing losses and adverse trends, the Company is
actively pursuing a number of alternatives. In addition to
accelerated closings or sale of unprofitable units already being
undertaken, the Company is considering seeking additional short-
term or long-term capital in the form of either debt or equity,
a possible merger or sale of part or all of the company, other
forms of reorganization of the Company's capital structure, and
the development of other forms of strategic alliances with
outside parties. The Company has previously cautioned that
unless one or more of these alternatives is successful, it may
be unable to continue as a going concern.

The Company expects to report a loss for the fourth fiscal
quarter ending June 30, 2001, based on continuing declines in
sales volume, as well as losses associated with sold and closed
units and recently flooded units in Houston, Texas. These losses
will result in significant additional impairments of long-term
assets including leasehold improvements and the deferred tax
asset though the extent of the additional impairments is not yet
determinable. The Company has sold seven units and closed seven
restaurants during the fourth quarter and may also franchise or
close up to five additional ones in the balance of the fourth
fiscal quarter. Fourth quarter results will also be affected by
the recent flooding in Houston that has disrupted operations at
three company-owned restaurants. Two of the Houston units are
still under water and the extent of the losses cannot be
determined at this time.

The Company also reported that its primary lender has extended
its line of credit through July 5, 2001, and waived compliance
with financial covenants as of the end of the third quarter. It
is expected that at the end of the fourth quarter, the Company
will continue to be in non-compliance with the financial
covenants. The Company is in the process of requesting
additional extensions and waivers, but it is not known whether
or how long the lender will continue to grant additional
extensions and/or waivers of noncompliance with financial
covenants.

Wall Street Deli currently operates 74 company-owned and 21
franchised restaurants. Two additional restaurants are closed
due to flooding. The Company's stock is traded on the OTC
Bulletin Board under the symbol WSDI.


WARNACO GROUP: Engages Alvarez & Marsal As Restructuring Officer
----------------------------------------------------------------
The Warnaco Group, Inc. sought the Court's authority to enter
into an employment agreement with Antonio Alvarez, a founding
managing director of Alvarez & Marsal Inc., as their Chief
Restructuring Officer. A&M is a consulting firm that specializes
in crisis management and the restructuring of troubled
companies.

Beginning late April through the Petition date, Mr. Alvarez and
members of the Debtors' senior management devoted extraordinary
amounts of time and effort to:

      (i) Prepare a detailed analysis of the Debtors' operations
and financial condition;

     (ii) Prepare short-term cash flow forecasts and other
detailed financial analyses;

    (iii) Meet and negotiate with the Debtors' Pre-Petition
Lenders, including obtaining an additional 30-day waiver of the
outstanding defaults under the Pre-petition Credit Agreements
through June 15, 2001;

     (iv) Prepare for and attend meetings of the Debtors' Board
of Directors;

      (v) Coordinate the Debtors' efforts to prepare for a
possible Chapter 11 filing in the event that the Debtors were
unable to accomplish an out-of-court restructuring or
refinancing, including without limitation, analyzing the
Debtors' cash flow requirements in a chapter 11 proceeding and
arranging for a $600-million post-petition financing facility
for the Debtors.

The Debtors believe that Mr. Alvarez's efforts have been
extremely valuable to the Debtors and that they will greatly
benefit from his full-time involvement going, they believe Mr.
Alvarez's experience and services are important to the Debtors'
operational and reorganizing efforts.

Under the Employment Agreement, Mr. Alvarez services as Chief
Restructuring Officer for the Debtors include:

      (a) Oversee, with the approval of the CEO and the Board,
all restructuring and refinancing related efforts of the
company, including:

          (1) The activities of all professionals retained to
assist in the marketing and sale of assets, the recapitalization
of the Company or otherwise retained as part of the
restructuring efforts;

          (2) The preparation and presentation of reports and
other general communications with the Company's creditors and
shareholders; and

          (3) At the Board's request, the development of a
restructuring plan for the Company.

      (b) Assist the CEO and other senior management in the
preparation of an operating plan and cash flow forecast;

      (c) Assist the CEO and other senior management in the
identification of cost reduction opportunities and working
capital opportunities;

      (d) Assist the CEO and other senior management with other
operational issues as requested; and

      (e) Engage in such other activities as are approved by the
Board or the CEO.

Other principal terms of the Employment Agreement are:

      (a) Term: April 30, 2001 through October 31, 2002, unless
sooner terminated pursuant to the provisions of the Employment
Agreement.

      (b) Base Salary: $175,000 per month

      (c) Severance: In the event that Mr. Alvarez's employment
is terminated by the Debtors other than for cause or by Mr.
Alvarez for a good reason, Mr. Alvarez will receive a severance
payment equal to $175,000 time the lesser of 12 or the number of
months remaining until the expiration date.

      (d) Incentive Compensation: Mr. Alvarez will be entitled to
incentive compensation equal to 90% the cash value of the annual
bonus, including any incentive based bonus, discretionary bonus
and supplemental incentive plan bonus, paid to the highest paid
senior officer of the Debtors, payable on the same terms and at
the same time, as to such officer, but in any event not less
than 120 days after the Debtors' fiscal year end.

      (e) Restructuring Compensation: Upon the occurrence of the
earlier to occur "trigger events":

          (i) The consummation of a sale, lease, transfer or
other disposition of all or substantially all of the assets of
the Debtors in one or more transactions,

         (ii) The merger or consolidation of the Debtors with or
into any other entity or any combination, including a joint
venture, of all or substantially all of the Debtors' assets in
one or more transactions,

        (iii) A substantial restructuring of the Debtors' debt,
either through a restructuring or refinancing of the existing
bank debt, new investments, sales of assets combined with a
material modification of debt documents, or a combination of any
or all of the foregoing in one or more transactions, the effect
of which is to provide the Debtors with an amount of liquidity
and flexibility which is anticipated to be sufficient to allow
them to operate without default under the Debtors' operating
plan to be formulated by senior management under Mr. Alvarez's,
or

         (iv) The expiration of Mr. Alvarez's employment upon
the conclusion of the Employment Period or its termination by
the Debtors without cause or by Mr. Alvarez for a good reason,
Mr. Alvarez will be entitled to a restructuring fee equal to 5%
of the improvement of value; provided however, that in no even
shall the restructuring fee be less than $3,000,000 and,
provided further, that any amounts payable as incentive
compensation will be credited against the amounts, if any, that
become payable as a restructuring fee.

      (f) Expense Reimbursement: Mr. Alvarez will be reimbursed
for all reasonable, ordinary and necessary travel, entertainment
and other expenses, as well as for the reasonable fees and
expense, as well as for the reasonable fees and expenses of his
counsel incurred in connection with the preparation, negotiation
and approval of the Employment Agreement.

      (g) Advance: Mr. Alvarez will be entitled to a payment of
$100,000 as an advance against the last sums payable to him
under the terms of the Employment Agreement.

      (h) Indemnification: Mr. Alvarez will be entitled to the
benefit of the most favorable indemnities provided by the
Debtors to its officers and directors, whether under the
Debtors' by-laws, certificates of incorporation, by contract or
otherwise. The Debtors also will use commercially reasonable
efforts to arrange to add Mr. Alvarez as an additional insured
party under the Debtors' existing director and officer liability
insurance policy.

Prior to Petition Date, A&M held a retainer of $100,000. If this
motion is granted, A&M will return the retainer to the Debtors
since the Debtors will advance $100,000 to Alvarez. (Warnaco
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


WASHINGTON GROUP: Dennis Washington to Participate in DIP Pact
--------------------------------------------------------------
Washington Group International, Inc. (NYSE:WNG) announced that
its Chairman, Dennis R. Washington, has reached an agreement
with the company's bank group to invest new capital in the
company by participating in the debtor-in-possession financing
facility being provided by the bank group and to serve as
Chairman through the company's financial restructuring and for
at least two years thereafter.

Under terms of the agreement, which is subject to Court
approval, Mr. Washington will provide at least $10 million of
the debtor-in-possession credit facility. The agreement also
provides Mr. Washington the right to purchase, through stock
options, up to 15 percent of the new common stock of the
reorganized company over five to seven years following
confirmation of the company's Plan of Reorganization. In
addition, the agreement allows Mr. Washington to purchase, in
open-market or privately negotiated transactions, new common
stock of the reorganized company, which taken with any common
stock purchased through stock options, would give Mr. Washington
up to a 40 percent ownership interest in the reorganized
company.

Mr. Washington has been Chairman of the Board since the
company's acquisition of Morrison Knudsen Corporation in 1996.
Through his leadership and strategic vision, the company
acquired Westinghouse Government Services in partnership with
BNFL in 1999 and forged a leadership position in the power
industry through the acquisition of Raytheon Engineers &
Constructors last year. Under Mr. Washington's strategic plan,
the company is now a national leader in the fastest growing
segments of the industry: power, government services, and
infrastructure, and a premier provider of industrial / process
services. In addition to his duties as Chairman, Mr. Washington
will continue to lead the company's strategic development.

"This agreement underscores my commitment to the future success
of this company," said Mr. Washington. "I've been in this
business for 50 years and I built this company from my own
company and through acquisitions. Our employees are the best in
the engineering and construction industry and we will deliver
results to our clients around the world that are second to
none."

Mr. Washington also announced that the Washington Group Board of
Directors has elected company President Stephen G. Hanks to the
additional position of Chief Executive Officer, a position
previously held by Mr. Washington. Mr. Hanks also has been
elected to the company's Board of Directors.

Washington Group International, Inc. is a leading international
engineering and construction firm with more than 35,000
employees at work in 43 states and more than 35 countries. The
company offers a full life-cycle of services as a preferred
provider of premier science, engineering, construction, program
management, and development in 14 major markets.


WESTPOINT STEVENS: Moody's Cuts Long Term Debt Ratings to Ca
------------------------------------------------------------
Moody's Investors Service downgraded the long-term debt ratings
of WestPoint Stevens, Inc. Approximately $1.0 billion of debt
securities are affected.

Given the very weak retail environment, the downgrade reflects
Moody's concerns regarding the company's liquidity position, the
company's approach in the traditional peak borrowing season and
the high inventory days level. Moody's also said that the
mandatory quarterly $25 million principal reduction on the
senior credit facility commencing August 1st also affected the
rating as well as the company's negative cash generation in the
first quarter.

The affected ratings are as follows:

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

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

      * senior implied rating to Caa3 from Caa1

      * senior unsecured issuer rating to Ca from Caa2.

The rating agency said that based upon the current retail
environment, they expect that sales and operating profits for
the second half will be below their previous expectations.

WestPoint Stevens Inc. is a manufacturer and marketer of bed
linens, towels, blankets, comforters, and accessories that are
sold through each major retail distribution channel. The company
is based in West Point, Georgia.


WINSTAR COMMUNICATIONS: AT&T Broadband Seeks Relief From Stay
-------------------------------------------------------------
By motion, AT&T Broadband seeks an order from the Court granting
it relief from the bankruptcy stay in order to cancel a purchase
order with Winstar Communications, Inc. for sixteen 8x radios at
$50,000 each, or a total of $800,000.

AT&T Broadband is a provider of broadband services, which
include telephony, high-speed data, and video. AT&T Broadband
Financial Operations Director Francis Brown relates that in
February and March 2001, they had discussions with Winstar
Wireless to determine whether Winstar Wireless could provide a
wireless "solution" for AT&T Broadband customers at multiple
dwelling unit facilities (MDU facilities). During their talks,
Winstar Wireless offered to sell to and install radios for AT&T
Broadband.

However, Mr. Brown told Judge Farnan, AT&T found it difficult to
find MDU facilities suitable for the wireless proposal that
Winstar Wireless was selling because:

      (i) The number of individual dwellings at the MDU
facilities;

     (ii) The age of the MDU facilities, the construction
materials used at the MDU facilities;

    (iii) The need for approval by the MDU facility owners for
installation of the equipment; and

     (iv) The relative costs for installing the equipment versus
other available technologies.

In March, Winstar Wireless investigated a specific MDU facility
in Florida, called the Wynmoor, and surveyed that site. Shortly
thereafter, Winstar Wireless made a proposal for the Wynmoor
facility. Under the proposal, AT&T Broadband would have to
purchase a spectrum, engineering, and installation from Winstar
Wireless aside from purchasing radio equipment for the site.
Spectrum is the radio frequency over which video and data is
transmitted. But AT&T Broadband rejected the proposal citing
technical and economic reasons. Still, Winstar Wireless insisted
that it could provide a wireless solution if more suitable MDU
facilities could be identified.

Although no facility suitable for the equipment had been
located, Winstar Wireless requested AT&T Broadband to send a
purchase order for the radio equipment in order to lock in the
price for the radio equipment. AT&T Broadband and Winstar still
had to find suitable MDU facilities and negotiate the terms of
the purchase of the spectrum, engineering, and installation.

AT&T Broadband was strained to send Purchase Order #414353 to
Winstar Wireless for 16 8x radios at $50,000 each for a total
purchase price of $800,000 in the event the parties agreed on
the terms of a wireless proposal. But after sending the purchase
order, AT&T Broadband determined that they could not use the
Winstar Wireless radios because, among other reasons, the radios
could not be placed on tiled rooftops.

So, Mr. Brown said, they advised Winstar Wireless last April 20,
2001 that they are canceling the purchase order because they
could not use the radios Winstar Wireless was selling.

This prompted Winstar Wireless to object. Responding by e-mail,
Winstar Wireless Vice-President for Commercial Legal Operations
Colleen R. Jones advised AT&T Broadband that they had filed for
a Chapter 11 bankruptcy protection. Ms. Jones also informed AT&T
Broadband that the purchase order they sent was a binding
contract, and therefore, it could not be canceled. Winstar
Wireless was determined to proceed with the contract despite
AT&T's Broadband's refusal that it could not use the radios.

But Stephen W. Spence, Esq., at Phillips, Goldman & Spence,
P.A., in Wilmington, Delaware, argued that a provision in
purchase order gave AT&T Broadband an absolute, unconditional
right to cancel since AT&T Broadband cannot use the equipment
identified in the purchase order. As of this motion, Mr. Spence
notes, AT&T Broadband has not yet received any of the equipment
described in the purchase order.

AT&T Broadband asked Judge Farnan to annul the bankruptcy stay
in order to make the cancellation of the purchase order
effective as of April 20, 2001. In the alternative, AT&T
Broadband requests a relief from the automatic stay so it can
terminate the purchase order effective as of the date of this
motion. (Winstar Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

                            *********

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

A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
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, electronic
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contained herein is obtained from sources believed to be
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                      *** End of Transmission ***