TCR_Public/010625.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Monday, June 25, 2001, Vol. 5, No. 123

                            Headlines

ADVANCE AGRO: S&P Cuts Corporate Credit Rating to SD from CCC
ALGOMA STEEL: Has Until August 24 To File Plan of Arrangement
ATLANTIC TECHNOLOGY: Shares Subject To Nasdaq Delisting
AUREAL INC: Plan Confirmation Hearing Set For July 19
BREAKAWAY SOLUTIONS: Nasdaq Delists Shares

BRIDGE INFORMATION: Sprint Moves To Terminate Pact With Savvis
BRIDGE INFORMATION: Telerate Sale Postponed To June 27
CAREMATRIX: Exclusive Period To File Plan Extended To August 31
CATHAYONE INC.: Files Chapter 11 Petition in S.D. New York
CATHAYONE INC.: Case Summary & 20 Largest Unsecured Creditors

COAST DENTAL: Shares Face Delisting From Nasdaq
COLOR SPOT: Moody's Drops Senior Sub Note Rating to Ca From Caa2
DAYTON MINING: Andacollo Mine Begins Formal Liquidation
ELDER BEERMAN: Releases First Quarter 2001 Earnings
EXODUS COMMUNICATIONS: S&P Cuts Credit Ratings To B- & CCC

FRUIT OF THE LOOM: Trustee Objects To Jay Alix's Fee Application
FULL MOON: Defaults Payment On Promissory Notes
GOLDEN BOOKS: Seeks Approval of Retention Plan For Managers
GORGES HOLDING: Auctioning Substantially All of Its Assets
HEILIG-MEYERS: Moody's Cuts Ratings On 2 Senior Classes of Notes

ICG COMMUNICATIONS: Telecom Wants To Exercise CIT Buyout Rights
INTERNATIONAL KNIFE: Sells German Subsidiary For $11.7 Million
INT'L KNIFE: Moody's Lowers $90MM Senior Sub Note Rating to Ca
K2 DIGITAL: Receives Nasdaq's Notice Of Delisting
KENTUCKY ELECTRIC: Appeals Nasdaq's Move To Delist Shares

MAXICARE HEALTH: Shares Knocked Off Nasdaq Today
MICROAGE: Creditors Vote to Accept Debtors Liquidating Plan
NATIONWIDE COMPUTERS: Files Chapter 11 Petition in New York
NATIONWIDE COMP.: Case Summary & 20 Largest Unsecured Creditors
NETSOL INT'L: Postpones Shareholders' Meeting Indefinitely

NORTHPOINT COMMUNICATIONS: Converts Bankruptcy Case To Chapter 7
OWENS CORNING: Reaches Settlement With Siam Cement
PACIFIC GAS: Asks For More Time To Assume And Reject Leases
PAKISTAN INVESTMENT: Sets June 27 Liquidation Distribution Date
PHAR MOR: Avatex Corporation Reports 48% Equity Stake

PHILIPS INTERNATIONAL: Completes $7.6 Mil Sale Of Florida Site
PILLOWTEX CORP.: Wants To Reject Lease With Festival Developers
PRECISION PARTNERS: Debt Ratings Fall To Low-B & Junk Levels
PSA INC: Seeks Fourth Extension Of Time To Assume/Reject Leases
PSINET INC.: Seeks Okay To Continue Using Existing Bank Accounts

RELIANCE GROUP: Asks Court For More Time To File Schedules
UNITED COMPANIES: Fitch Downgrades Manufactured Housing Bonds
UNIVERSAL BROADBAND: Seeks Short Extension of Exclusive Periods
VALLEY MEDIA: Fiscal Year 2001 Net Loss Amounts To $29,500,000
WARNACO GROUP: Moves To Pay $14,800,000 To Critical Vendors

WINSTAR COMMUNICATIONS: Hires Swidler Berlin As Special Counsel
WOLF CAMERA: Files Chapter 11 Petition in N.D. Georgia
WOLF CAMERA: Case Summary & 20 Largest Unsecured Creditors

BOND PRICING: For the week of June 25 - 29, 2001

                            *********

ADVANCE AGRO: S&P Cuts Corporate Credit Rating to SD from CCC
-------------------------------------------------------------
Standard & Poor's lowered the corporate credit rating on Advance
Agro Public Co. Ltd. to 'SD' (selective default) from triple-
'C', and, at the same time, removed the rating from CreditWatch.

This action follows the company's failure to make payment of
US$28 million on the maturity date of June 17, 2001, on its
convertible bond issue (not rated). The rating on the US$48.7
million senior unsecured notes issued by Advance Agro Capital
B.V. and guaranteed by Advance Agro remains at double-'C' and on
CreditWatch with negative implications. The convertible bond
issue provides for a grace period of seven days. However,
weakened cash flows caused by the soft operating environment and
the company's inability over the past few months to realize
proceeds through the sale of its excess pulp inventory, make
payment within the grace period a challenge to the company.

The CreditWatch placement reflects Advance Agro's lack of
financial flexibility. In the event Advance Agro does not cure
its payment default within the grace period, an acceleration of
debt in the company could result, which would seriously
exacerbate its liquidity problems. Besides a deficiency of
working capital facilities, its cash is minimal at about US$7
million currently. The company also remains reliant on
continuing financial support from its bankers, despite its
breach of certain event-of-default clauses in its loan
agreements. It will be a challenge for the company to raise
sufficient funds from alternative sources, including from its
major shareholder, the Soon Hua Seng group, which is facing
financial pressures of its own. Advance Agro is currently
meeting its other debt obligations on time.

The company's ability to realize adequate cash by reducing its
high finished goods inventories, which stood at about Thai baht
2.2 billion (about US$50 million) at year-end 2000, will depend
on pricing and size of the sales volumes. In addition to Advance
Agro's inability to comply with financial covenants stipulated
in its loan documents for Dec. 31, 2000, its 100%-owned
subsidiary, Hi-Tech Paper Co. Ltd., also is negotiating with a
domestic bank to restructure debt totaling about US$15 million.
As these events could accelerate other group debt, Advance Agro
will need continued financial support from its bankers to
maintain its operations. The company so far has been able to
obtain waivers from the bankers for its nonfinancial events of
default.

Advance Agro is a fully integrated pulp and paper company,
selling market pulp and coated and uncoated printing and writing
paper made from plantation eucalyptus. Exports currently
contribute about 60% of sales volumes, Standard & Poor's said.


ALGOMA STEEL: Has Until August 24 To File Plan of Arrangement
-------------------------------------------------------------
Algoma Steel Inc. (TSE:ALG.) has been granted an extension of
its protection under the Companies' Creditors Arrangement Act
(CCAA) and the time for the filing of a Plan of Arrangement to
August 24, 2001.

The current order was to expire on June 22, 2001. The extension
was supported by all of Algoma's stakeholders.

Hap Stephen, Algoma's Chief Restructuring Officer, said, "The
two-month extension is a positive development. It provides time
for Algoma and its stakeholders to address a number of issues
and develop a restructuring plan."

Algoma Steel Inc., based in Sault Ste. Marie, Ontario, is
Canada's third largest integrated steel producer. Revenues are
derived primarily from the manufacture and sale of rolled steel
products including hot and cold rolled sheet and plate.


ATLANTIC TECHNOLOGY: Shares Subject To Nasdaq Delisting
-------------------------------------------------------
Atlantic Technology Ventures, Inc. (Nasdaq: ATLC) received a
Nasdaq Staff Determination indicating that the Company fails to
comply with the one-dollar minimum bid price requirement for
continued listing set forth in Marketplace Rule 4310 (c)(4), and
that its securities are, therefore, subject to delisting from
The Nasdaq Small Cap Market.

Prior to the June 28, 2001 Nasdaq deadline, the Company plans to
request a hearing before a Nasdaq Listing Qualifications Panel
to review the Staff Determination. This hearing request will
stay the delisting of the Company's securities pending the
Panel's decision. The hearing will be scheduled within 45 days
of the date that the request for a hearing is filed. During the
hearing, the Company intends to request, based on its particular
circumstances, an extension of the time allotted to raise its
share price. There can be no assurance the Panel will grant the
Company's request for continued listing.

We expect that if the Panel determines to delist the Company's
common stock, the Company's common stock will trade on the OTC
Bulletin Board's electronic quotation system, and shareholders
will still be able to obtain current trading information,
including the last trade bid and ask quotations and share
volume.

          About Atlantic Technology Ventures, Inc.

Atlantic Technology Ventures, Inc. is a publicly held venture
capital company specializing in early-stage, breakthrough
technologies and rapidly incubating these through a definitive
proof-of-principle. Atlantic currently has investments in
Catarex, a device for cataract removal; CT-3, a synthetic
derivative of marijuana for treating pain and inflammation; and,
superconducting electronics for telecommunications.


AUREAL INC: Plan Confirmation Hearing Set For July 19
-----------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of
California, Oakland Division, will hold a hearing to consider
confirmation of the Plan and Disclosure Statement of Aureal Inc.
on July 19, 2001 at 3:00 PM in Judge Tchaikovsky's courtroom.
Any objection to the confirmation of the plan and Disclosure
Statement must be filed with the Bankruptcy Court and served
upon the "Notice Parties" by July 9, 2001.

The plan provides that all assets of the estate shall be vested
in the Reorganized Debtor. Class 4 under the plan consists of
Unsecured Claims. Class 4 is impaired under the plan, and
provides that holders of the Allowed Class 4 claims will share
pro rata in distributions in cash from the estate after payment
in full, or reserve for payment in full. Approximately 48
claimants filed proofs of claim for unsecured claims in the
aggregate of over $18 million. The debtor believes that, after
objections to disallow all or a portion of the disputed claims
in Class 4 are resolved, the allowed amounts of such claims will
be in the range of approximately $4.6 million to approximately
$10.2 million. Based on the estimated range of Allowed Claims,
the debtor estimates that distributions on behalf of Allowed
Class 4 claims may be in the range of 75% to 100% depending on,
among other things, the successful defense of Dispute Claims,
the collection of the debtor's accounts receivable, and the
value of the Creative Stock.

Counsel to the debtor is Hennigan, Bennett & Dorman of Los
Angeles, California. Counsel to the Committee is McCutcheon,
Doyle, Brown & Enersen, LLP, San Francisco, California. Counsel
to the Prepetition Secured Lenders is the firm of McDermott,
Will & Emery, Los Angeles California.

Following a review of the plan and Disclosure Statement, Judge
Tchaikovsky entered an order conditionally approved the
Disclosure Statement and form, scope, and nature of
solicitation, balloting, tabulation and notices with respect to
the plan of reorganization of the debtor.

A hearing will be held on July 19, 2001 at 3:00 PM to consider
confirmation of the Plan and Disclosure Statement. The plan
provides that all assets of the Estate shall be vested in the
Reorganized Debtor.


BREAKAWAY SOLUTIONS: Nasdaq Delists Shares
------------------------------------------
Breakaway Solutions, Inc. (Nasdaq: BWAYE), announced that the
Company's Common Stock has been delisted from the Nasdaq
National Market. The Company expects to be eligible to trade
through Pink Sheets effective on June 21, 2001.

The Company anticipates that one or more market makers will
apply to have the Common Stock traded on the Pink Sheets. The
Company does not expect Nasdaq's determination to have any
impact on its day-to-day operations.


BRIDGE INFORMATION: Sprint Moves To Terminate Pact With Savvis
--------------------------------------------------------------
The dispute between Sprint Communications Company and Savvis
Communications Corporation is not yet over.

Sprint wants to end its earlier agreement with Savvis where
Sprint had agreed to permit the continuation of an injunction
order after Bridge Information Systems, Inc. and Savvis
committed to share the responsibility of making stipulated
payments to Sprint. The injunction prevented Sprint from
collecting Savvis' $7 million debt, pending the sale of the
Debtors' assets.

Savvis accumulated over $7 million in obligations after it
failed to pay Sprint three months worth of services. Under their
Network Management Agreement (NMA), Sprint provided various
telecommunications and network services to Savvis.

Now, James M. Meister, Esq., at Stinson, Mag & Fizzell, in St.
Louis, Missouri, says, Savvis is not entitled to the protection
of the automatic stay after all, because Savvis is not a
bankruptcy debtor. In effect, Mr. Meister contends, the Court
made a mistake when it extended the protection of the automatic
stay to Savvis and deprived Sprint from enforcing their rights
under the NMA.

By this motion, Sprint asks Judge McDonald to rectify the
Court's error and issue an order clarifying that Sprint is not
prohibited from enforcing its rights against Savvis under the
NMA. (Bridge Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


BRIDGE INFORMATION: Telerate Sale Postponed To June 27
------------------------------------------------------
Bridge Information Systems, the financial news and data
provider, filed papers with U.S. Bankruptcy Court on Wednesday
to extend the deadline to sell its Telerate business by one
week, according to Reuters. The troubled privately-held company,
which is seeking chapter 11 bankruptcy protection, had
originally slated Wednesday as the deadline for bids for assets
that have not already been claimed by Bridge's competitor,
Reuters Group PLC. The new deadline is June 27.

In addition to the Telerate news and data business, Bridge is
also soliciting bids for its news gathering unit BridgeNews, a
data processing business it bought from Automatic Data
Processing, and Bridge's stake in BridgeDFS, an Australian news
and data service. Dow Jones & Co., AFX News, a subsidiary of
Agence France Presse, and MoneyLine Network Inc., each confirmed
interest in parts of the businesses. Bridge said a month ago
that 35 companies submitted indications of interest, although it
was not clear how many of them submitted formal bids. Reuters
won the auction for the data and trading units of Bridge in
April with a cash bid of $275 million. Earlier this month, the
U.S. Justice Department requested more information regarding its
review of the transaction. (ABI World, June 21, 2001)


CAREMATRIX: Exclusive Period To File Plan Extended To August 31
---------------------------------------------------------------
By court order entered on June 1, 2001, the Honorable John C.
Ackard granted the motion of CareMatrix Corporation to extend
the Exclusive Filing Period to and including August 31, 2001.
The debtors' Exclusive Solicitation Period is extended to 60
days after the filing of a plan within the Exclusive Filing
Period. The debtors and the Creditors' Committee shall have the
exclusive right to file a joint plan of reorganization for the
debtors through July 16, 2001. If a joint plan shall not have
been filed by the debtors and the Committee on or before July
16, 2001, the Committee may elect to immediately file its own
plan of reorganization.


CATHAYONE INC.: Files Chapter 11 Petition in S.D. New York
----------------------------------------------------------
On June 15, 2001, CathayOne, Inc. filed a voluntarily Chapter 11
petition in the United States Bankruptcy Court for the Southern
District of New York, Case No. 01-41726(cb). The company is
continuing as a debtor in possession with its prior management,
except as noted in Item 6, pursuant to Section 1107 of Title 11
of the United States Code. The Company intends to file a plan of
reorganization as provided by Chapter 11 of the United States
Bankruptcy Code as soon as practicable. CathayOne does not
intend to continue its existing business. (New Generation
Research, June 21, 2001)


CATHAYONE INC.: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: CathayOne, Inc.
         2100 Pinto Lane
         Las Vegas, NV 89106
         aka Brands Premier

Type of Business: The nature of the Debtor's business was to
                   manage, take a majority position in, and/or
                   make strategic investments in technological
                   and service companies in the entertainment
                   industry.

Chapter 11 Petition Date: June 15, 2001

Court: Southern District of New York (Manhattan)

Bankruptcy Case No.: 01-41726-cb

Judge: Cornelius Blackshear

Debtor's Counsel: Laurence J. Kaiser, Esq.
                   Fisher, Fisher & Berger
                   One Whitehall Street
                   New York, NY 10004
                   (212) 514-8888

Total Assets: $400,000

Total Debts: Approximately $2 million

List of Debtor's 20 Largest Unsecured Creditors:

Entity                       Category Of Claim     Claim Amount
------                       -----------------     ------------
CathayOnline, Inc.           Affiliate account       $822,377
Attn: Brian Ransom           payable
Chairman of the Board
543 Granville Street, Suite 1103
Vancouver BC, V6C IX8
Canada

Davies Ward Phillips         Account payable         $593,419
& Vineberg LLP
Attn: Guy P. Lander
430 Park Avenue
10th Floor
New York, NY 10022

Capital Lake SL              Account payable         $300,000
C/o Shaw, Pittman
Attn: Charles G. Berry, Esq.
335 Madison Avenue
New York, NY 10017

Phillip Lee Flaherty         Unpaid compensation     $130,000
                              And business expenses

Peter S. Lau                 Unpaid compensation     $110,000
                              And business expenses

S. David Cooperberg          Unpaid compensation     $110,000
                              And business expenses

Peter Chin                   Consultancy Fee         $ 62,000

V. a division of Walker      Account payable         $ 59,697
Group/CNI

Sage Realty Corporation      Rental Fee              $ 27,788

Dorsey & Whitney LLP         Account  payable        $  8,812

Barbara Manui                Consultancy Fee         $  7,500

Business Wire PC             Account payable         $  5,801

Penn Proefriedt              Account  payable        $  4,053
Schwarzfelf & Schwartz

Merrill Communications       Account  payable        $  4,000

The Depository Trust         Account  payable        $  2,105
Company

CT Corporation System                                $  2,000

Silverman Perstein           Account  payable        $  1,745
& Acampora

Jeff & Mary Albregts         Rental Fee              $  1,500

CT Corporation               Account  payable        $  1,291

Janis Cernese                Salary payable          $  1,166


COAST DENTAL: Shares Face Delisting From Nasdaq
-----------------------------------------------
Coast Dental Services, Inc. (Nasdaq:CDEN) announced that on
June 14, 2001 it received a Nasdaq Staff Determination,
indicating that the Company's common stock is subject to
delisting from the Nasdaq National Market because the Company
has failed to maintain a minimum market value of public float of
$5,000,000 over the previous 30 consecutive trading days, as
required by Marketplace Rule 4450(a)(2). The Company also does
not meet the continued listing requirements under the Nasdaq
National Market's Maintenance Standard No. 2.

The Company intends to request a hearing before the Nasdaq
Listing Qualifications Panel to review the Staff Determination.
The appeal will stay the delisting of the Company's common
stock, pending the decision of a Nasdaq Listing Qualifications
Panel, which is expected to hear the appeal within 45 days.
While the Company awaits notification from Nasdaq with regard to
this appeal, the Company also intends to conduct a reverse stock
split so as to comply with the minimum listing requirements of
The Nasdaq Small Cap Market and to apply for listing on the
Small Cap Market. The Company's annual meeting is schedule for
July 16, 2001. At the annual meeting, the Company's shareholders
will be asked to approve an amendment to the Company's
Certificate of Incorporation to authorize the reverse stock
split of the Company's Common Stock at a ratio between one-to-
three and one-to-five to be determined at the discretion of the
Board of Directors.

There can be no assurance that the Listing Qualifications Panel
will grant the Company's request for continued listing or that
the Company will be able to successfully complete the reverse
stock split or qualify for listing on the Small Cap Market.

Coast Dental Services, Inc. is a dental service organization
providing management and support services to the general
dentistry practices in its Dental Centers located in Florida,
Georgia, Tennessee, and Virginia. As of March 31, 2001, the
Company had 125 Dental Centers, consisting of 62 internally
developed and 63 acquired Dental Centers, and 115 Coast dentists
were employed by the Coast P.A.


COLOR SPOT: Moody's Drops Senior Sub Note Rating to Ca From Caa2
----------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Color Spot
Nurseries, Inc. and concurrently, withdrew the B3 rating of its
$70 million secured revolving credit facility.

The outlook remains negative while approximately $152.7 million
of debt securities are affected.

Downgraded ratings are:

                                          To       From
                                          --       ----
      * $100 million of senior            Ca       Caa2
        subordinated notes (due 2007)

      * $40.0 million ($52.7              C        Ca
        million accreted value)
        of redeemable preferred stock

      * senior implied rating             Caa2     B3

      * unsecured issuer rating           Caa3     Caa1

The rating action reflects Color Spot's continued losses,
inadequate interest coverage, and repeated covenant violations
under its secured credit facility, Moody's said.

The negative outlook reflects Moody's belief that a
comprehensive debt restructuring is likely to happen. It takes
into account the potential for losses, should a restructuring
occur, Moody's said.

Color Spot Nurseries, Inc. is a wholesale nursery that provides
an assortment of plants and merchandising services, primarily to
home centers and mass merchants. The company is located in
Pleasant Hill, California.


DAYTON MINING: Andacollo Mine Begins Formal Liquidation
-------------------------------------------------------
Mr. Fred Earnest, General Manager of Compania Minera Dayton
("CMD"), a wholly owned subsidiary of Dayton Mining Corporation
(AMEX, TSE: DAY) announces that the CMD and its creditors have
reached a court approved agreement, which gives CMD protection
from bankruptcy proceedings for a period of four years.

In a special judicial hearing on May 15, 2001 the creditors of
CMD unanimously accepted the Creditors Agreement with
essentially the same terms and conditions that had been
originally proposed by CMD. The Court of Andacollo approved the
agreement in a resolution dated May 31, 2001. According to the
Creditors Agreement, CMD will maintain control of the operation
and continue normal business activities with the oversight of a
mutually agreed upon three member commission.

The Creditors Agreement obligates CMD to sell the mine equipment
fleet, the three-stage crushing plant, the overland
conveying/stacking system and other assets as required in an
orderly and efficient manner. Proceeds from the sale of assets
in excess of amounts owed (in the case of the mining fleet) will
pass directly to the creditors. Proceeds in excess of operating
costs will be paid to the creditors on a quarterly basis. The
creditors of CMD have agreed to a four-year period to repay all
outstanding obligations with interest adjustments to be made on
the outstanding balance on May 15th of each year.

As reported on April 19, 2001, CMD has contracted Henry Butcher
International Ltd. to manage the marketing and sale of the
mining fleet, crushing plant and conveying/stacking system
located at the Andacollo Mine in northern-central Chile. Henry
Butcher has completed the first mass mailing and has a full-time
representative on site in Andacollo.

The Andacollo Mine suspended mining and crushing activities on
September 29, 2000. For the period October 1, 2000 through May
31, 2001, the Andacollo Mine has produced a total of 35,600
ounces of gold, well ahead of the projections made at the time
of the shutdown. Leaching of the heap continues and at present
results in daily production of 105 ounces of gold is being
achieved.


ELDER BEERMAN: Releases First Quarter 2001 Earnings
---------------------------------------------------
Elder Beerman Stores Corporation's net sales for the first
quarter 2001 decreased by 1.5% to $139.5 million from $141.6
million for the first quarter 2000. Comparable store sales
decreased by 2.9%. Ladies' better and moderate sportswear,
junior sportswear, furniture, and shoes had the best
performance.

The Company's principal sources of funds are cash flow from
operations and borrowings under the Revolving Credit Facility
and Receivable Securitization Facility. The Company's primary
ongoing cash requirements are to fund debt service, make capital
expenditures, and finance working capital.

Net cash provided by operating activities was $0.3 million for
the first quarter 2001, compared to $3.9 million used in the
first quarter 2000. A net loss of $0.2 million was recorded in
the first quarter 2001, compared to a net loss of $3.1 million
in the first quarter 2000. In addition, the depreciation and
amortization component of the net losses increased $1.0 million
to $4.7 million for the first quarter 2001, compared to $3.7
million for the first quarter 2000.

For the first quarter 2001, net cash provided by financing
activities was $4.1 million compared to $7.0 million for the
first quarter 2000, which represents reduced borrowing required
for operating and investing activities.

The Company believes that it will generate sufficient cash flow
from operations, as supplemented by its available borrowings
under the Credit Facilities, to meet anticipated working capital
and capital expenditure requirements, as well as debt service
requirements under the Credit Facilities.

The Company may from time to time consider acquisitions of
department store assets and companies. Acquisition transactions,
if any, are expected to be financed through a combination of
cash on hand from operations, available borrowings under the
Credit Facilities, and the possible issuance from time to time
of long-term debt or other securities. Depending upon the
conditions in the capital markets and other factors, the Company
will from time to time consider the issuance of debt or other
securities, or other possible capital market transactions, the
proceeds of which could be used to refinance current
indebtedness or for other corporate purposes.


EXODUS COMMUNICATIONS: S&P Cuts Credit Ratings To B- & CCC
----------------------------------------------------------
Standard & Poor's lowered its ratings on Exodus Communications
Inc. and placed them on CreditWatch with negative implications
(see list below). The rating actions are based on Exodus'
significantly lower expectation of EBITDA and sales for the
second half of 2001. Management expects EBITDA for the year to
be $80 million down from its prior guidance of $270 million in
May 2001. The company expects sales to fall in the current
quarter from the first quarter level due to a decrease in the
rate of new customer installations, an increase in the rate of
cancellations, reductions of orders from existing customers, and
an increase in reserves related to dot-com failures.

Exodus is highly leveraged with more than $3 billion of debt and
sales of just over $1 billion and has yet to achieve sustained
operating profitability. Management has indicated that it will
repay the $150 million outstanding under its senior credit
facility and eliminate the facility under which it had limited
availability due to its financial performance. Standard & Poor's
will withdraw its rating on the credit facility at that point.

The company intends to reduce both costs and capital
expenditures in line with lower revenue expectation and expects
to end the year with about $200 million of cash after repaying
the credit facility. Given its current performance, debt service
requirements, and expected capital expenditures in 2002, the
company will likely need additional financing.

Standard & Poor's will meet with management and assess its plans
to address its limited financial flexibility and deteriorating
operating performance prior to resolving the CreditWatch.

Ratings Lowered And Placed On CreditWatch Negative:

                                            To       From
Exodus Communications Inc.
   Corporate credit rating                   B-        B
   $600 million senior secured bank loan     B         B+
   $275 million sr unscd notes due 2008      B-        B
   $375 million sr unsecd notes due 2009     B-        B
   $1 billion sr unsecd notes due 2010       B-        B
   200 million euro sr unscd notes due 2008  B-        B
   $250 million conv sub notes due 2006      CCC       CCC+
   $400 million conv sub notes due 2008      CCC       CCC+
   $500 million conv sub notes due 2008      CCC       CCC+


FRUIT OF THE LOOM: Trustee Objects To Jay Alix's Fee Application
----------------------------------------------------------------
Patricia A. Staiano, U.S. Trustee, takes issue with the
fourteenth application of Jay Alix & Associates. Ms. Staiano, an
attorney who is either of few words pr does not bill by the
hour, tells Judge Walsh that paragraph 7 of the application
requests payment of $171,276.12 for travel time and/or expenses
allegedly not billed for from the outset of the case through
September 30, 2000. She asserts that the factual and legal basis
for entitlement to payment for this travel time "is unclear. The
UST leaves Jay Alix & Associates to its burden."

Melvin R. Christiansen, principal at Jay Alix, responds that the
basis for the request is that his firm inadvertently failed to
bill for travel time and expenses in its earlier applications.
The firm's policy is to bill a reduced amount (i.e. 50%) for
travel time in bankruptcy cases. Mr. Christiansen points the
U.S. Trustee to JA&A's engagement letter with Fruit of the Loom,
Ltd. which provided for compensable travel time, and to In re
Yankton College, 101 B.R. 151 (Bankr. D.S.D. 1989), which
recognized that travel time is compensable in bankruptcy cases.
(Fruit of the Loom Bankruptcy News, Issue No. 31; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


FULL MOON: Defaults Payment On Promissory Notes
-----------------------------------------------
Full Moon Universe, Inc. (OTC-BB: MOON) reported operations for
its first quarter ended March 31, 2001.

For the three months ended March 31, 2001, revenues totaled
$930,459. In the same three months in the previous year,
revenues totaled $535,649. Earnings for the latest period were
$159,730, vs. $ 187,376, a year ago.

The Company also reported that it defaulted on its June 21, 2001
payments due to a secured creditor under the terms of three
secured promissory notes. Under the terms of the notes, payment
of $2,245,000 and $160,825 of accrued interest is accelerated
and is now immediately due.

The Company is putting forth all effort to negotiate an
extension of the notes now in default.


GOLDEN BOOKS: Seeks Approval of Retention Plan For Managers
-----------------------------------------------------------
Golden Books Family Entertainment Inc. is seeking court approval
of a key employee retention plan for 20 of its managers to
ensure that they remain with the company while it tries to
complete the sale of its assets. The U.S. Bankruptcy Court in
Wilmington, Del., is scheduled to consider the request at a
hearing June 28. (ABI World, June 22, 2001)


GORGES HOLDING: Auctioning Substantially All of Its Assets
----------------------------------------------------------
Gorges/Quik-to-Fix Foods, Inc., seeks entry of an order
approving the sale of substantially all of its assets. The
debtor asserts that an expedited sale of the assets is necessary
to minimize administrative expenses of the bankruptcy estate.
Selling the assets as a going concern likely will maximize the
recovery to the estate. Third, Quik-to-Fix does not have
sufficient funding to continue operating in bankruptcy and
satisfy its restructuring expenses for a protracted period, and
has not been successful in finding DIP financing.

The debtor states that CGW Southeast III, LP, the debtor's post-
petition lender (in the amount of $2.5 million) may be a bidder,
however the debtor will use an open auction process.


HEILIG-MEYERS: Moody's Cuts Ratings On 2 Senior Classes of Notes
----------------------------------------------------------------
Moody's Investors Service downgraded two senior classes of
securities issued out of the Heilig-Meyers Master Trust (the
Trust). The downgraded ratings are:

      * $176.8 million Class A 6.125% Asset Backed Certificates,
        Series 1998-1 downgraded to Caa2 from B3 and remains on
        review for possible downgrade

      * $126.3 million Class A Floating Rate Asset Backed
        Certificates, Series 1998-2, downgraded to Caa2 from B3
        and remains on review for possible downgrade

The rating agency said that the downgrades consider the
persisting decline in the collateral performance since its last
rating action in February 2001. According to OSI Portfolio
Services, Inc., the servicer, monthly collections have continued
to recede.

Heilig-Meyers Company, headquartered in Richmond, Virginia is a
publicly held retailer of home furnishings.


ICG COMMUNICATIONS: Telecom Wants To Exercise CIT Buyout Rights
---------------------------------------------------------------
In the ordinary course of business before the Petition Date, ICG
Communications, Inc. leased personal property from third-party
vendors, including CIT Communications Finance Corporation. Often
these leases were used as a vehicle to finance equipment that,
for varying reasons, the Debtors preferred not to purchase
outright at the time of delivery. Instead, the leases, including
the leases subject to this Motion, contain buyout provisions
which allow the Debtors to purchase the equipment for pre-set
prices at or near the conclusion of the lease term. By this
Motion, Telecom Group seeks authorization to exercise its
purchase options in the CIT Agreement and thus purchase the
equipment leased from CIT under the CIT Agreement as modified by
agreement of the parties.

The Debtors advise Judge Walsh that exercise of the switch
buyout constitutes a transaction in the ordinary course of
business. However, the Debtors determined to seek judicial
authority to exercise the switch buyout in an abundance of
caution. Further, the Debtors and CIT are of differing opinions
as to whether each Schedule constitutes separate and distinct
agreement, or whether all related documents constitute a single
agreement.

The Debtors believe that the leased switches are necessary,
indeed critical, to the Debtors' telecommunications network.
Without the switches, the Debtors would be unable to provide
service to their customers in the areas where the switches are
located. In addition, due to the size and nature of the
switches, the Debtors are unable to move the switches or to
install replacements in a timely manner. Therefore, the Debtors
are, in very real terms, bound to continue using the switches,
whether they are purchased outright or continue to be leased.
The Debtors believe that the early buyout price provides a
substantial savings when compared to the Debtors' only other
options for continued use of the switches.

                Summary of the CIT Agreement

Telecom Group entered into the CIT Agreement in October 1994.
This agreement is comprised of a master equipment lease and
related schedules which were executed on various dates. Under
the agreement, Telecom Group leases six telecommunications
switches and certain ancillary equipment. The switches are used
by the Debtors to provide telecommunications services to their
customers. The leases run for 7 years and contain an option for
Telecom Group to purchase the switches for a fair market value
price at the end of the term. Under an amendment dated November
7, 1994, Telecom Group also has the option to purchase the
switches six months before the end of the lease term, as an
early buyout, for a price equal to 30.44% of the total purchase
price of the equipment. After careful and diligent review of
possible courses of action, the Debtors have determined to
exercise the early buyout.

In accordance with the terms of the lease, Telecom Group gave
Cit notice of its intention to exercise the early buyout with
respect to each switch. CIT responded to the notices by
contending that Telecom Group is precluded from exercising the
early buyout because of alleged defaults under the leases. The
Debtors contest CIT's assertion that the early buyout may to be
exercised. CIT and the Debtors have now agreed to resolve this
dispute by having the switches purchased on terms substantially
as provided in the leases.

Under the leases, Telecom Group has the right to purchase the
switches, under the early buyout, for an aggregate price,
including property taxes, late fees, and pre- and postpetition
rent owed, of $5,318,836.14. In settlement of the dispute with
CIT, and so long as payment is made on or before a date certain,
CIT and Telecom Group have agreed to reduce the buyout price by
$315,361.41, thereby bringing the total buyout price for the
switches to $5,003,474.73. CIT will waive the balance of the
$315,361.41 amount owed. In addition, upon presentation of proof
satisfactory to CIT prior to payment of the buyout price,
Telecom Group will receive a dollar-for-dollar credit against
the buyout price, in an aggregate amount not to exceed
$108,038.61, for any property taxes that it paid for the years
1997, 1998 and 1999 with respect to the switches.

The Debtors say that Judge Walsh should approve the switch
buyout if the Debtors can demonstrate a sound business reason
for doing so. Once the Debtors articulate a sound business
reason, there is a presumption that, in making that business
decision the directors of the Debtors acted in good faith, on an
informed basis, and in the honest belief that the action was in
the best interests of the Debtor. This business judgment rule
shields a debtor from judicial second-guessing. The Debtors have
determined, in their business judgment, that it is in the best
interests of these estates and creditors to exercise the early
buyout and purchase the switches for the agreed price. The
Debtors believe that the buyout terms, as modified, are fair,
reasonable, and the best option available to the Debtors
regarding the switches. In sum, the Debtors assure Judge Walsh
that granting this Motion is in the best interest of these
estates and their creditors. (ICG Communications Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


INTERNATIONAL KNIFE: Sells German Subsidiary For $11.7 Million
--------------------------------------------------------------
On June 6, 2001, International Knife & Saw, Inc., a Delaware
corporation, sold all of the issued and outstanding capital
stock of IKS Klingelnberg GmbH, a wholly-owned German subsidiary
of the Company, to Diether Klingelnberg and TKM GmbH i.G., a
company organized under the laws of Germany, for approximately
$11.7 million in cash. The Company expects to record a loss on
the sale of IKSK of approximately $7.9 million. The loss is
subject to adjustment based on final closing values and
transaction expenses. The proceeds from the sale were
immediately applied to repay all indebtedness and other
obligations owed by the Company to Deutsche Bank AG, the
Company's senior lender.

Mr. Klingelnberg and Thomas W.G. Meyer are managing directors
and stockholders of TKM. Mr. Meyer is a minority stockholder of
IKS Corporation, a Delaware corporation and the parent of the
Company. In addition, until April 20, 2001 Mr. Klingelnberg
served as a director of the Company and Parent, and until May
31, 2001 Mr. Meyer served as an Executive Vice President
of the Company and Parent. At the time of the sale, Mr. Meyer
was the Chief Executive Officer of IKSK. The amount of
consideration paid to the Company for the issued and outstanding
capital stock of IKSK was determined by arms-length negotiation
between the Board of Directors of the Company and the
Purchasers.

In connection with the sale, the Purchasers agreed that, for a
period of 18 months and subject to certain conditions, IKSK
would continue the existing trading arrangements between the
Company and IKSK with respect to current products manufactured
by IKSK and purchased by the Company.

Prior to the sale, the holders of a majority in aggregate
principal amount of the Company's Series B 11-3/8% Senior
Subordinated Notes due 2006 consented to the sale and waived
compliance by the Company with the provisions of Section 4.14
(Limitation on Transactions with Affiliates), Section 4.15
(Change of Control), Section 4.16 (Limitation on Asset Sales)
and Article Five of the Indenture governing the Notes, as well
as any other relevant provisions of the Indenture, to the extent
applicable to the transaction.


INT'L KNIFE: Moody's Lowers $90MM Senior Sub Note Rating to Ca
--------------------------------------------------------------
Moody's Investors Service downgraded the ratings of
International Knife and Saw, Inc. as follows:

                                       To        From
                                       --        ----
      * $90 million of 11 3/8%         Ca        Caa1
        senior subordinated notes
        (due 2006)

      * senior implied rating           Caa2     B2

      * unsecured issuer rating         Caa3     B3

The rating agency said that the Ca rating on the senior
subordinated notes reflects a probable restructuring with severe
principal loss.

The downgrades reflect a likely restructuring of the company's
debt, following the missed May 15th payment the 11 3/8% senior
subordinated notes, Moody's stated.

The outlook is negative while approximately $90.0 million of
debt securities are affected.

International Knife & Saw, is a worldwide manufacturer,
marketer, and servicer of industrial and commercial machine
knives and saws. The company's headquarters is in Erlanger,
Kentucky.


K2 DIGITAL: Receives Nasdaq's Notice Of Delisting
-------------------------------------------------
K2 Digital, Inc. (NASDAQ: KTWO), a strategic digital services
company, announced that it received a Nasdaq Staff Determination
on June 14, 2001 indicating that the Company fails to comply
with the minimum bid price requirement for continued listing set
forth in Marketplace Rule 4310(c)(4), and that its securities
are, therefore, subject to delisting from The Nasdaq SmallCap
Market.

The Company has requested a hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination. There
can be no assurance that the Panel will grant the Company's
request for continued listing.

                   About K2 Digital

K2 Digital (NASDAQ: KTWO, KTWOW), a strategic digital services
company, provides consulting and development services including
analysis, planning, systems design, creative, and
implementation. Ranked by Deloitte & Touche among the fastest
growing technology companies in both 1999 and 2000, K2
constructs user-centric digital channels that map to corporate
goals. K2's process-driven approach utilizes the strategic,
conceptual, technical and marketing experience it has developed
since 1993 to help multi-divisional and global companies
maximize their Internet opportunities. Clients include ABB,
Bristol-Myers Squibb, ING Aetna Financial Services, Morgan
Stanley, Preferred Hotels & Resorts, Silversea Cruises and
WorldCom. For more information, visit: www.k2digital.com.


KENTUCKY ELECTRIC: Appeals Nasdaq's Move To Delist Shares
---------------------------------------------------------
Kentucky Electric Steel, Inc. (Nasdaq:KESI) announced that on
June 14, 2001, it received a determination letter from the
Nasdaq Stock Market indicating that, absent a successful appeal
by the Company, the Company's common stock will be removed from
listing on the Nasdaq National Market. The determination was
made based on the Company's common stock not maintaining a
public float market value of $5,000,000 as required under Nasdaq
Marketplace Rule 4450(a)(2).

The Company has filed an appeal of this determination to the
Nasdaq Listing Qualifications Panel. The Company's common stock
will continue to be traded on the Nasdaq National Market pending
a final decision by the Panel. If the Panel makes a final
determination to delist the Company's common stock from
the Nasdaq National Market, the Company intends to apply for
transfer to the Nasdaq Small Cap Market.

Kentucky Electric Steel, Inc. operates a specialty steel mini-
mill manufacturing special quality steel bar flats for the leaf-
spring suspension, cold drawn bar conversion, truck trailer
support beam, and steel service center markets.


MAXICARE HEALTH: Shares Knocked Off Nasdaq Today
------------------------------------------------
Maxicare Health Plans Inc. (MHP) (Nasdaq:MAXIQ) announced that
the company's common stock will be delisted from the Nasdaq
National Market at the opening of business on June 25, 2001.
The company's stock will begin trading on the Pink Sheets under
the ticker symbol MAXIQ. Quotes and trading information can be
accessed at www.pinksheets.com. Maxicare Health Plans Inc. is
current with its filings with the SEC and it is hopeful that its
stock will be quoted on the OTC Bulletin Board in the near
future.

MHP is the parent company of Maxicare (California), a health
maintenance organization serving approximately 254,000 members
in the state of California. Maxicare (California) filed under
Chapter 11 with the Federal Bankruptcy Court in Los Angeles
following the California Department of Managed Health Care's
appointment of a conservator of Maxicare (California) on May 25,
2001. MHP is not a party to the bankruptcy proceedings.
Trading in Maxicare Health Plans' stock on the Nasdaq National
Market was halted at the request of the company on May 25, 2001,
and was suspended by Nasdaq subject to the provision of
additional information regarding the parent company's financial
condition, which the company was unable to provide.


MICROAGE: Creditors Vote to Accept Debtors Liquidating Plan
-----------------------------------------------------------
An initial review of ballots cast by creditors in the MicroAge
Inc. bankruptcy case indicates they approve of the company's
chapter 11 liquidation plan, said James Domaz, an in-house
attorney for MicroAge, reported Dow Jones. Domaz said the
creditors who were owed the most money cast votes in favor of
the plan. A final count may not be filed with the U.S.
Bankruptcy Court in Phoenix until early next week, said Don
Gaffney, an attorney with the firm Snell & Wilmer, who also
represents MicroAge.

Two objections were filed against the plan by parties that
earlier objected to MicroAge's initial disclosure statement.
They were Electronic Data Systems Corp. (EDS) and the U.S.
Trustee acting in the case. Creditors' votes and objections were
due to be filed by Tuesday. A hearing on the plan is scheduled
for next Tuesday. MicroAge is seeking to depose Electronic Data
regarding its objection on Friday. EDS claims that confirmation
of the plan would effectively disallow certain EDS claims
against former MicroAge subsidiary Pinacor Inc. EDS asserts
claims in excess of $25 million. (ABI World, June 21, 2001)


NATIONWIDE COMPUTERS: Files Chapter 11 Petition in New York
-----------------------------------------------------------
Nationwide Computers and Electronics, Inc. filed for Chapter 11
protection with the U.S. Bankruptcy Court in White Plains, New
York. The Company is represented by Jonathan Pasternak.
According to Pasternak, Company sales fell to $40 million in
2000, from approximately $100 million in 1999.  (New Generation
Research, June 21, 2001)


NATIONWIDE COMP.: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Nationwide Computers & Electronics, Inc.
         691 Central Park Avenue
         Scarsdale, NY 10583

Type of Business: The company is engaged in the business of
                   retail distribution of home computer,
                   electronic and entertainment inventory.

Chapter 11 Petition Date: June 14, 2001

Court: Southern District of New York (White Plains)

Bankruptcy Case No.: 01-21241-ash

Judge: Adlai S. Hardin Jr.

Debtors' Counsel: Jonathan S. Pasternak, Esq.
                   Rattet & Pasternak, LLP
                   550 Mamaroneck Avenue
                   Suite 510
                   Harrison, NY 10528
                   Tel: (914) 381-7400
                   Fax: (914) 381-7406
                   Email: jsp@rattetlaw.com

Total Assets: $8,316,574

Total Debts: $15,441,401

List of Debtor's 20 Largest Unsecured Creditors:

Entity                                 Claim Amount
------                                 ------------
Hitachi Home Electronics                $2,220,124
1855 Dornoch Court
San Diego, CA 92173

Thompson Multimedia, Inc.               $1,054,631
10330 N. Meridian Drive
Indianapolis, IN 46290

The Star Ledger                           $809,818
Star Ledger Plaza
Newark, NJ 07101

E-Machines                                $546,362
14350 Myford Road
Suite 100
Irvine, CA 92606

Gateway                                   $523,504
610 Gateway Drive
North Sioux City, SD 57049

Direct Communications, Inc.               $520,866
120 McGaw Drive
Edison, NJ 08837

Everex Systems, Inc.                      $401,000
5020 Brandin Ct.
Freemont, CA 94538

Canon USA, Inc.                           $391,235
100 Jamesburg Road
Jamesburg, NJ 08837

Olympus Corporation                       $345,251
Two Corporate Center Drive
Melville, NY 11747

Altech Group, Inc.                        $347,453
90 Adams Avenue
Hauppage, NY 11788

Acer America, Corp.                       $317,970
2641 Orchard Parkway
San Jose, CA 95134

Avatar Technology, Inc.                   $293,383
339 S. Cheryl Lane
City of Industry, CA 91789

PC Connection, Inc.                       $285,117
730 Milford Road, Route 101A
Merrimack, NH 03054

EZC International, Inc.                   $275,000
C/o Michael Kogan Arter & Haddon
725 South Figueroa St., Suite 3400
Los Angeles, CA 90017

Journal News                              $242,678

Wynit, Inc                                $197,298

Merisel America, Inc.                     $182,826

Envision Peripherals                      $159,320

Likorn, USA                               $152,942

American Express, Corp.                   $142,200


NETSOL INT'L: Postpones Shareholders' Meeting Indefinitely
----------------------------------------------------------
NetSol International Inc.'s shareholders meeting, scheduled for
June 19, 2001, was postponed indefinitely following the
appointment of a receiver to take control of the money-losing
software development company.

Nevada District Court Judge James Mahan placed NetSol in
receivership on Friday, June 15, 2001, appointing Las Vegas
accountant George Swarts to manage its affairs. The company
is incorporated in Nevada.

Swarts was said to be going to NetSol's headquarters in
Calabasas, California, on June 18, 2001, to begin sorting out
the company's affairs.

A new management team appointed by dissident shareholders took
physical control of the company's headquarters last week, after
saying they won 55 percent of the vote in a proxy fight. The
insurgents, led by money manager Jonathan Iseson, hired armed
security guards to prevent executives they fired from returning.
Najeeb Ghauri was replaced as chief executive by dissident Cary
Burch, a member of the previous board of directors. Also fired
were Salim Ghauri as president and Naeem Ghauri as chief
operating officer, both brothers of the dismissed CEO.

Last week, the Ghauris persuaded Judge Mahan to issue a
temporary restraining order preventing the insurgents from
taking any action on behalf of the company. Ghauri and his
supporters say their group won the shareholder vote.
John Kirkland, attorney for the insurgents, charged last week
that the Ghauri brothers illegally removed company records and
computers from headquarters.

Laptop computers and documents that were removed from NetSol's
office by the Ghauris will be turned over to the receiver, said
Syed Husain, a spokesman for the brothers.

Kirkland and Husain said in separate interviews that the meeting
of shareholders has been postponed. Judge Mahan has scheduled
another hearing for June 26.


NORTHPOINT COMMUNICATIONS: Converts Bankruptcy Case To Chapter 7
----------------------------------------------------------------
Bankrupt NorthPoint Communications Group Inc. has converted its
voluntary chapter 11 petition to a chapter 7 case because the
company no longer has any operating capital or operations
following an asset sale to AT&T Corp., according to Dow Jones.
The conversion came during a June 12 hearing before the U.S.
Bankruptcy Court in San Francisco. NorthPoint attorney Gregory
O. Lunt told Dow Jones Newswires Wednesday that the AT&T asset
sale was a major catalyst in dissolving the company. He said
NorthPoint's $38 million debtor-in-possession loan led by
Canadian Imperial Bank of Commerce was primarily issued to
facilitate NorthPoint's asset sale. Once AT&T purchased the
company's holdings in May for $135 million, there wasn't much of
NorthPoint remaining. NorthPoint and its subsidiaries filed for
chapter 11 protection on Jan. 16 listing $642.6 million in
assets and $587 million in debts as of Nov. 30, 2000. (ABI
World, June 21, 2001)


OWENS CORNING: Reaches Settlement With Siam Cement
--------------------------------------------------
Owens Corning asks Judge Fitzgerald for an Order authorizing
Owens Corning to enter into and consummate a deed of settlement
with The Siam Cement Public Company Limited, Siam Fiberglass
Co., Ltd., and IPM, Inc. The Debtor tells Judge Fitzgerald that
approximately 9 years ago, Owens Corning and Siam Cement entered
into a joint venture for the manufacture of fiberglass
reinforced pipe, resulting in the formation of Siam Fiberglass.
The joint venture later began manufacturing glass wool and
corrugated FRP panels. Owens Corning subsequently transferred
its shares in Siam Fiberglass to IPM, a non-debtor, wholly-owned
subsidiary of Owens Corning. IPM's approximately 27% equity
interest in Siam Fiberglass has a book value of approximately $2
million.

In connection with the Siam Fiberglass joint venture, under a
Wool License Agreement between Owens Corning and Siam Fiberglass
dated December 13, 1993, Owens Corning licensed to Siam
Fiberglass certain patents and Owens Corning technology relating
to the manufacture of glass wool products. The Wool License
Agreement has a ten-year term and provides for the payment of
royalties to Owens Corning for the use of its intellectual
property.

Due to the continuing recession in Thailand and Siam Fiberglass'
recurring losses, Siam Fiberglass requires additional financial
capital from its shareholders or other third parties to sustain
its operations and continue as a going concern. While Siam
Cement has decided to make additional capital contributions to
Siam Fiberglass, thereby making Siam Fiberglass more attractive
to potential purchasers, such as Micro Fiber Industries, Owens
Corning and IPM have determined that additional capital
investments in Siam Fiberglass would not be in their best
interests. If no additional capital is contributed by Owens
Corning or IPM, IPM's equity interest in Siam Fiberglass will be
reduced form approximately 17% to approximately 1% after Siam
Cement's capital contributions to Siam Fiberglass. Owens Corning
and IPM believe that it is in their respective best interests to
transfer this remaining capital interest in Siam fiberglass to
Siam Cement upon the terms and conditions set forth in the Deed.
Transfer of IPM's interest in Siam fiberglass will allow Siam
Fiberglass to pursue a proposed business combination between
Siam Fiberglass and MFI, or another entity agreeable to Owens
Corning and IPM, and thereby will minimize any loss that Owens
Corning and IPM may otherwise incur.

                   The Deed of Settlement

Under the terms of the Deed, Owens Corning and IPM will transfer
to Siam Cement the 580,000 shares in Siam fiberglass held by IPM
in exchange for a payment from Siam Cement in the amount of
$300,000. Upon execution of the Deed, the Shareholders Agreement
between Owens Corning, IPM and Siam Cement shall be deemed
automatically terminated, including the rights and obligations
of Owens Corning and IPM thereunder.

The Deed also provides that Owens Corning acknowledges that Siam
Fiberglass has paid to Owens Corning all royalties due and
payable through June 30, 2000 under the terms of the Wool
License Agreement and that there is no outstanding unpaid
balance in relation to the royalties under the Wood License
Agreement.

The Deed requires that the Wool License Agreement be amended.
The agreement as amended provides, in material part, that Owens
Corning agrees to grant to Siam Fiberglass (i) a royalty-free,
exclusive license to make wool products using Owens Corning
patents and technology, (ii) a royalty free non-exclusive
license to use and sell such wool products through out Thailand,
and (iii) a royalty-free non-exclusive license to sell such wool
products throughout the world. The Wool License Agreement
Amendment leaves in place a non-royalty earning license
arrangement between Owens Corning as licensor, and Siam
Fiberglass as licensee, which places Siam Fiberglass in a
technology position similar to MFI. This non-royalty bearing
license arrangement is viewed as necessary for the successful
execution of a business combination between Siam Fiberglass and
MFI. Under the terms of the Deed and the Wool License Amendment,
Owens Corning is entitled to terminate the Wool License
Agreement when Siam Fiberglass combines with specified business
entities.

By executing the Deed, Owens Corning acknowledges that there may
be a business combination between Siam Fiberglass and MFI or
another business entity, and that such combination will not
affect the rights and obligations of the parties under the Wool
License Agreement, except for Owens Corning's right to
termination the Wool License Agreement upon Siam Fiberglass'
combination with specified business entities. Owens Corning
acknowledges that it is aware that MFI or such other business
entity may have access to the intellectual property of Owens
Corning being licensed to Siam Fiberglass under the Wool License
Agreement, and that such access is deemed approved by Owens
Corning under the Wool License Agreement; provided, however,
that MFI or such other business entity agrees in writing to be
bound by all confidentiality provisions of the Wool License
Agreement. Owens Corning further agrees that if Siam Fiberglass
is not a surviving entity of the contemplated business
combination between Siam Fiberglass and MFI, all rights granted
under the Wool License Agreement shall be deemed automatically
transferred to the surviving entity under such business
combination, but only to the extent that the license rights
under the Wool License Agreement as are used for and in
connection with the operation and use of the facility currently
owned and operated by Siam Fiberglass.

Owens Corning and certain of its subsidiaries are prohibited
under the Deed from selling in Thailand wool products or other
products similar to wool products during the term of the Wool
License Agreement.

Owens Corning also agrees to supply to Siam fiberglass, upon its
request and subject to availability, spare parts for the
equipment and machinery owned by Siam fiberglass, including
materials as needed for the manufacture of wool products, at
Owens Corning's normal international pricing for similarly-
situated licensees and affiliates.

             The Debtor's Business Reasons

Siam Fiberglass has been an unprofitable enterprise since its
inception, and Owens Corning and IPM have concluded that it is
not in their respective best interests to contribute additional
financial capital to Siam Fiberglass. In their sound business
judgment, Owens Corning and IPM believe that selling IPM's
interest in Siam Fiberglass will allow Owens Corning and IPM to
minimize financial losses from their investment in Siam
Fiberglass. If Owens Corning and IPM maintain IPM's investment
in Siam Fiberglass, IPM's current 17% interest will be
substantially diluted by the infusion of capital by Siam Cement
and the potential merger with MFI. As a result of this dilution,
IPM's interest would be effectively reduced to approximately 1%,
thereby resulting in a corresponding decrease in the fair market
value of IPM's equity interest in Siam Fiberglass. Owens Corning
and IPM have concluded that they have no strategic business
interest in remaining a shareholder in Siam Fiberglass in this
scenario. In conjunction with the share transfer, Owens Corning
has agreed to amend the Wool License Agreement to provide for
royalty-free use of the subject patents and Owens Corning
technology in an effort to maintain key business relationships.
These factors demonstrate a sound business purpose.

Owens Corning believes that the purchase price to be received by
Owens Corning and IPM upon executing the Deed is fair and
reasonable, taking into consideration Siam Fiberglass' history
of poor performance - and that such purchase price will serve to
minimize the losses that Owens Corning and IPM will otherwise
likely incur in connection with the joint venture. As such, the
consideration that Owens Corning and IPM will receive in the
proposed transaction is fair and reasonable under the
circumstances. (Owens Corning Bankruptcy News, Issue No. 12;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


PACIFIC GAS: Asks For More Time To Assume And Reject Leases
-----------------------------------------------------------
Pursuant to Bankruptcy Code Section 365(d)(4), all of Pacific
Gas and Electric Company's real property leases will be deemed
rejected by June 5, 2001 unless the Court grants PG&E's motion
for assumption of the Leases, or for an extension of the time to
assume or reject the Leases.

PG&E moves the Court to extend the time for PG&E to assume,
assume and assign or reject unexpired leases as identified and
presented to the Court until the date of confirmation of the
chapter 11 Plan in this case, or such other date as the Court
may order. In the first motion, PG&E seeks such an extension for
240 real property leases to which PG&E is a lessee. In the
second motion, PG&E seeks extension for 17 more unexpired real
property leases. Judge Montali will hear the second motion on
July 5, 2001.

To the extent any leases will expire by their own terms prior to
confirmation date of PG&E's Chapter 11 Plan, PG&E seeks to
extend the time to assume or reject such leases until such
expiration date.

PG&E represents that, the requested extension is a proper
exercise of PG&E's business judgment, and there is cause to
granted the request because, inter alia,

      (a) the Leases are essential to PG&E's operation;

      (b) PG&E continues to comply with its post-petition
obligations under the Leases;

      (c) this case is exceptionally complex and involves a
relatively large number of leases;

      (d) There is no evidence indicating that the lessors under
the Leases will be subject to damages beyond compensation
available under the Bankruptyc Code due to PG&E's continued
occupation of the premises during the requested extension;

      (e) The Court's granting of the motion will not prejudice
any lessor or other party in interest from seeking to compel
PG&E to assume or reject a lease prior to confirmation of PG&E's
Chapter 11 Plan. (Pacific Gas Bankruptcy News, Issue No. 9;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


PAKISTAN INVESTMENT: Sets June 27 Liquidation Distribution Date
---------------------------------------------------------------
The Pakistan Investment Fund, Inc. (NYSE: PKF) will send its
stockholders a liquidating distribution pursuant to the Fund's
Plan of Liquidation and Distribution on or about June 27, 2001.

Stockholders of record on June 22, 2001 will be entitled to
receive all liquidation proceeds distributed pursuant to the
Fund's Plan of Liquidation and Distribution, which was approved
by the Fund's stockholders on June 12, 2001. The Fund also
anticipates that the Fund's shares will be suspended from the
New York Stock Exchange effective prior to the opening of
trading on the New York Stock Exchange on June 25, 2001.

The Fund's liquidating distribution, which represents all of the
assets of the Fund less amounts the Fund believes necessary to
discharge any unpaid liabilities of the Fund, will be
approximately $2.92 per share.


PHAR MOR: Avatex Corporation Reports 48% Equity Stake
-----------------------------------------------------
Avatex Corporation beneficially owns an aggregate of common
stock shares representing 48.0% of the outstanding common stock
of Phar Mor Inc. The holdings are made up of 91,902 shares upon
which Avatex Corporation exercises sole voting and dispositive
powers, and 5,826,033 shares with shared voting and dispositive
powers.

Avatex Funding, Inc. shares voting and dispositive powers over
4,704,033 shares of Phar Mor's common stock, representing 38.1%
of the outstanding common stock of the Company.

M&A Investments, Inc. beneficially owns 1,122,000 shares of Phar
Mor's common stock, with shared voting and dispositive powers.
This amount represents 9.1% of the outstanding common stock of
the Company.


PHILIPS INTERNATIONAL: Completes $7.6 Mil Sale Of Florida Site
--------------------------------------------------------------
Business Wire, June 21, 2001

Philips International Realty Corp. (NYSE-PHR), a real estate
investment trust, has completed the sale of a redevelopment site
(Palm Springs Plaza in Lake Worth, Florida) to a group including
Philip Pilevsky, the Company's Chairman and Chief Executive
Officer for approximately $7.6 million in cash.

Pursuant to the plan of liquidation, the Company's Board of
Directors declared the second liquidating distribution of $1.00
per share which will be payable on July 9, 2001. The record date
is July 2, 2001. However, shareholders must continue to own
their shares up to and including July 9, 2001 in order to be
entitled to the liquidating distribution of $1.00 per share.
Effective June 28, 2001, the Company's shares will be traded on
the New York Stock Exchange with due bills which will entitle
the owner of the stock to receipt of the distribution. The
Company's stock will be traded ex-dividend after the payment
date of July 9, 2001. The Company has approximately 7.4 million
shares of common stock and common stock equivalents which will
participate in this distribution.

On October 10, 2000, the stockholders approved the plan of
liquidation, which is estimated to generate approximately $18.25
in the aggregate in cash for each share of common stock in two
or more liquidating distributions. On December 22, 2000, the
initial liquidating distribution of $13.00 was paid. The
Company's seven remaining assets are currently being offered for
sale.


PILLOWTEX CORP.: Wants To Reject Lease With Festival Developers
---------------------------------------------------------------
Encee, Inc. leases a 4,320 square-foot shopping center space at
the Savannah Festival Factory Stores in Savannah, Georgia, from
Festival Developers, Ltd. under a June 1999 lease agreement.

The lease agreement allowed Encee to sell Fieldcrest Cannon
brand products such as sheets, towels, pillows, linen products,
home furnishings, and other products from any manufacturer with
whom Fieldcrest Cannon has a licensing agreement.

The lease has yet to expire on July 2003. But the Pillowtex
Corporation Debtors ask Judge Robinson for authority to reject
the lease because Encee no longer needs its space at the
Shopping Center.

Daniel P. Winikka, Esq., at Jones, Day, Reavis & Pogue, contends
that the rejection of the lease is in the best interests of the
Debtors to ensure that no further administrative expense
liability to Festival is incurred.

As of the Petition Date, Encee was current on its rent payments
to Festival Developers.

Under the lease agreement, Encee is required to pay Festival a
minimum monthly guaranteed rent of $3,060. On top of that, Encee
is also obligated to pay a percentage rent of four percent of
Encee's gross annual sales at the Shopping Center in excess of
$756,000. Encee is also required to pay additional rent
payments, comprised of a fraction of the expenses incurred by
Festival in maintaining the Shopping Center such as repairs,
common area maintenance, landlord insurance, and real estate
taxes. (Pillowtex Bankruptcy News, Issue No. 8; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


PRECISION PARTNERS: Debt Ratings Fall To Low-B & Junk Levels
------------------------------------------------------------
Moody's Investors Service downgraded the following ratings of
Precision Partners Inc.:

     * senior subordinated notes to Caa2 from B3

     * senior credit facility to B2 from Ba3

     * senior implied rating to B3 from B1

     * unsecured issuer rating to Caa1 from B2

Moody's said that the downgrades reflect poor financial results
in the first quarter of 2001, limited financial flexibility, and
an increasing debt burden.

Moody's anticipates a possible debt restructuring resulting in
significant principal impairment, thus the Caa2 on the company's
senior subordinated notes.

The outlook is stable while approximately $148.0 million of debt
securities are affected. The stable outlook reflects the
company's limited liquidity and uncertainty over the length of
the economic recession, offset by the recent equity show of
support from management and SKM, Moody's said.

Precision Partners, located in Irving Texas, is a manufacturer
and supplier of complex precision metal parts, tooling and
assemblies for OEMs.


PSA INC: Seeks Fourth Extension Of Time To Assume/Reject Leases
---------------------------------------------------------------
PSA, INC., ETS Payphones, Inc. and certain of their affiliates
request an order pursuant to section 365(d)(4) of the Bankruptcy
Code, granting a fourth extension of the date by which the
debtors must assume or reject their unexpired leases of
nonresidential real property.

As of the Petition Date, the debtors were parties to
approximately 15,000 unexpired leases of nonresidential real
property. The debtors previously rejected approximately 5,000 of
these leases. The unexpired leases are an integral part of the
debtors' business operations. By far, the largest portion of the
debtors' business involves the operation and management of
payphones. The Unexpired Leases relating to these payphones are
critical assets of the debtors and are integral to any
reorganization of the debtors. Without the site leases, the
debtors will have no physical locations on which to place the
payphones. Without the Office Leases, the debtors will not have
the necessary office and warehouse space from which to conduct
their operations. While the debtors have been analyzing their
leases, they have been unable to make a reasoned determination
as to all unexpired leases within the period specified in
section 365(d)(4) of the Bankruptcy Code.

The debtors seek an extension to the later of August 31, 2001 or
the date an order confirming or denying confirmation of the
Joint Plan is entered. The debtors are represented by E. Penn
Nicholson and Shannon Lowry Nagle of Powell, Goldstein, Frazer &
Murphy LLP and Brendan Linehan Shannon of Young Conaway,
Stargatt & Taylor LLP.

A hearing on the motion will be held on July 17, 2001 at 9:00
AM.


PSINET INC.: Seeks Okay To Continue Using Existing Bank Accounts
----------------------------------------------------------------
PSINet Inc. and the affiliated Debtors tell the Court that a
waiver of the account closing requirements established by the
Office of the United States Trustee is necessary and appropriate
in their chapter 11 cases. The guidelines established by the
U.S. Trustee require chapter 11 debtors to, among other things:

      (a) close all existing bank accounts and open new debtor-
in-possession bank accounts;

      (b) establish one debtor-in-possession account for all
estate monies required for the payment of taxes, including
payroll taxes; and

      (c) maintain a separate debtor-in-possession account for
cash collateral.

The Debtors tell Judge Gerber if they were required to establish
new bank accounts according to the guidelines established by the
UST, disruption to their financial affairs and business
operations would result causing adverse impact on their
reorganization efforts, thus prejudicing their creditors and
estates.

The Debtors maintain bank accounts at various banks for
different purposes. From time to time and in the ordinary course
of business, the Debtors may open or close accounts as their
business needs change. These Bank Accounts, together with the
Cash Management System, enable the Debtors to monitor, regulate
and allocate their funds in an efficient, centralized and secure
manner. The Debtors believe that they should be allowed to keep
their existing Bank Accounts.

The UST guidelines, the Debtors note, are designed to provide a
clear line of demarcation between prepetition and postpetition
transactions and operations and prevent the inadvertent
postpetition payment of prepetition claims. The Debtors tell
Judge Gerber they have instructed their banks not to honor any
checks issued before the Petition Date unless payment is
authorized by Order of the Court. The Debtors further assure
Judge Gerber they have developed procedures to control all
postpetition disbursements from the Bank Accounts and will
cooperate with their banking institutions to ensure that no
postpetition disbursements are made on account of prepetition
liabilities in the absence of this Court's prior approval. These
alternative procedures, the Debtors submit, will serve the same
purposes as the Trustee's account-closing requirements, while
allowing the Debtors and their creditors to retain the benefits
obtained from continuation of their existing Bank Accounts and
Cash Management System.

Accordingly, the Debtors request,

      (1) that the existing Bank Accounts be deemed to be Debtors
in Possession accounts, subject to a prohibition against
honoring pre-Petition Date checks unless specifically authorized
by the Court, and

      (2) that the Court authorize their maintenance and
continued use of existing bank accounts in the same manner and
with the same account numbers, styles, and document forms as
those employed before the petition date. (PSINet Bankruptcy
News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


RELIANCE GROUP: Asks Court For More Time To File Schedules
----------------------------------------------------------
It will be impossible, Reliance Group Holdings, Inc. tells Judge
Gonzalez, to prepare comprehensive statements of their assets
and liabilities and statements of their financial affairs, as
required by 11 U.S.C. Sec. 521 and Rule 1007 of the Federal
Rules of Bankruptcy Procedure, within 15 days following the
Petition Date.

RGH has over 2000 equity security holders. The Debtors seek an
additional 45 days to file their list of creditors and their
list of equity security holders, for a total of 60 days from the
petition date. They also request an additional 60 days to file
all other required schedules and statements without prejudice to
their rights to seek any further extensions from the Court.
(Reliance Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


UNITED COMPANIES: Fitch Downgrades Manufactured Housing Bonds
-------------------------------------------------------------
Fitch has downgraded the ratings of 9 classes of United
Companies Financial Corporation's (UCFC) manufactured housing
transactions. Additionally, 2 classes of bonds are placed on
Rating Watch Negative.

In October 1998, UCFC first announced it would sell or close its
manufactured housing operation. Subsequently, in March 1999, the
company filed for Chapter 11 bankruptcy protection. Since these
events, Fitch has taken numerous rating actions on the company's
manufactured housing bonds (see Fitch press releases dated Oct.
30, 1998, Feb. 4, 1999, June 24, 1999, and Sept. 8, 2000). The
rating actions reflected the poor performance of the pools as
well as the uncertainty surrounding the status of the servicing
operation due to the bankruptcy.

In December 2000, the manufactured housing portfolio, residual
interests and servicing rights were sold to EMC Mortgage Corp.
(EMC), a wholly owned subsidiary of the Bear Stearns Companies
Inc. EMC's acquisition of UCFC's manufactured housing and home
equity portfolios (EMC acquired the home equity portfolio in
August 2000) resulted in a doubling of the size of EMC's
servicing portfolio. Fitch has monitored the loan transition as
well as the company's ability to handle the increased volume. On
April 17, 2001, Fitch conducted an onsite review of EMC's
servicing operation and found that there was a sufficient level
of staffing and servicing capability. However, due to the unique
nature of the manufactured housing asset with regard to
liquidation, concerns still remain surrounding recovery rates.
Currently, recovery rates are running at approximately 15% and
Fitch does not expect there to be a significant improvement with
regard to liquidations.

The poor performance has caused considerable interest shortfalls
on a number of transactions. The most recent rating actions took
place in September 2000. At that time Fitch downgraded and/or
placed on Rating Watch Negative a number of bonds until more
information became available as to the outcome of the servicing
and the impact on pool performance, particularly with regard to
interest shortfalls.

Since the December 2000 transfer of servicing to EMC, there has
been no significant improvement in performance. As a special
servicer, EMC adds value with its aggressive collection efforts
and its workout tactics, however, delinquencies on the portfolio
have remained high. This is partially due to EMC's focus on work
out options with borrowers, primarily through repayment plans
intended to eventually return loans to performing status. Given
the high loss severity on sold repossessions, this may help to
mitigate losses in the long term to some extent.

At this time, Fitch expects the subordinate bonds to experience
prolonged disruptions in interest payments. Additionally, a
number of `AA-` rated bonds have experienced interest shortfalls
as well. The rating on these securities address the likelihood
of receipt of distributions according to their terms. Since the
financial structures provide for repayment of interest
shortfalls which Fitch believes may be recoverable, these bonds
were placed on Rating Watch Negative in September 2000 to inform
investors of the cash flow status. At that time it was unclear
whether those shortfalls would be short term or would occur over
a prolonged period of time. Given the current collateral and
servicing performance, coupled with the significant amount of
outstanding unpaid interest shortfalls, these bonds can no
longer maintain their `AA-` ratings.

The affected securities are:

UCFC Manufactured Housing Contract Trust's pass-through
certificates:

      * Series 1996-1, class B-1, downgraded to `B' from `BB-`
        and will remain on Rating Watch Negative;

      * Series 1997-1, class M, downgraded to `BBB-` from `AA-`
        and will remain on Rating Watch Negative;

      * Series 1997-2, class M, downgraded to `BBB-` from `AA-`
        and will remain on Rating Watch Negative;

      * Series 1997-2, class B-1, downgraded to `B` from `BB` and
        will remain on Rating Watch Negative;

      * Series 1997-3, class B-1, downgraded to `B` from `BB` and
        will remain on Rating Watch Negative;

      * Series 1997-4, class B-1, downgraded to `B` from `BB` and
        will remain on Rating Watch Negative;

      * Series 1998-1, class M, downgraded to `BBB-` from `AA-`
        and will remain on Rating Watch Negative;

      * Series 1998-1, class B-1, downgraded to `B` from `BB` and
        will remain on Rating Watch Negative;

      * Series 1998-2, class B-2, downgraded to `CCC` from `B`
        and will remain on Rating Watch Negative.

Additionally, the following securities are placed on Rating
Watch Negative:

      * Series 1996-1, class B-1 and B-2.

Fitch will continue to monitor the performance of the collateral
pools backing the securities as well as the status of the
servicing platform.


UNIVERSAL BROADBAND: Seeks Short Extension of Exclusive Periods
---------------------------------------------------------------
Universal Broadband Networks, Inc. filed a motion seeking an
order extending for an additional 46 days the exclusivity
periods of 11 USC 1121(b) and (c)(3) by which the debtors have
the exclusive right to propose and obtain acceptance of their
Chapter 11 plan. The debtors assert that they have acted
diligently in attempting to reorganize and to find a source of
capital infusion. The debtors state that they have made
significant progress in this case in reducing the number of
staff, consolidating and liquidating assets, marketing UBN's
corporate shell and negotiating with potential purchasers.
In addition, the debtors have worked closely with their counsel
and accountants to meet SEC and FCC requirements and prepare
UBN's quarterly 10Q statements. The debtors are seeking
additional time to obtain the maximum sales price for the assets
(either through a sale or reverse merger) thereby providing the
greatest distribution to the creditors. The debtors are actively
negotiating and soliciting offers to maximize recovery. UBN has
recently received a letter of intent from a third party seeking
to enter into the reverse merger transaction with the debtor for
a significant cash payment. The debtor will need approximately
30 days to finalize the documentation. UBN has continued to
monitor its application and file all necessary papers with the
FCC sop that the debtor's frequency licenses can be assigned. It
is estimated that the licenses could net the estate as much as
$600,000. The Official Creditors' Committee supports the
extension. The debtors request an extension of the debtors'
exclusive right to propose a plan and obtain confirmation of the
plan for an additional 46 days, through the end of July.
Attorney for the debtors is Evan D. Smiley, Albert, Weiland &
Golden LLP.


VALLEY MEDIA: Fiscal Year 2001 Net Loss Amounts To $29,500,000
--------------------------------------------------------------
Valley Media, Inc. (Nasdaq:VMIX), a recognized leader in the
full-line distribution of audio and video home entertainment
products, announced its financial results for the fiscal year
ended March 31, 2001. Barney Cohen, Chairman of the Board,
reported net sales of $803,738,000 for the year compared to
$914,299,000 for the previous year, a decrease of 12.1%. Cohen
said the company would post a net loss of $29,500,000 ($3.47 per
share), compared to a net loss of $4,604,000 ($0.54 per share)
in the prior year. Peter Berger, Chief Executive Officer,
pointed out that before additions to its bad debt reserve and
costs associated with severance and other downsizing
initiatives, Valley's pre-tax operating loss would have been
approximately $19,423,000.

"Fiscal 2001 was just plain ugly," according to Cohen. "The
reasons are numerous but can be best described as a failure to
focus on core activities," he noted. "Valley invested time,
money, and talent on Internet-related activities which did not
pay off. And it wasn't the only company that did so," Cohen
added.

The company added over $12 million to its bad debt reserves in
the fourth quarter, bringing the total costs for bad debt to
over $17 million for the year. The reserves recognize several
large customer bankruptcies as well as disputed balances that
may yet be collected. Severance and other downsizing costs
during the year totaled $10.3 million, including the previously
reported $3.9 million charge which resulted from Valley's
restructuring of its agreement with amplified.com.
While gross profit dropped from 10.7% of net sales in fiscal
2000 to 8.5% in fiscal 2001, Berger stated, "We have been fixing
the basics of the business and we expect to see steady
improvement as a result. We hope to have put the bad news behind
us and can now concentrate on our core strengths."

Berger reported that full-line distribution sales decreased 8.3%
from fiscal 2000, mirroring the weakness in audio retail
markets, although sell-through video showed solid volume
improvement during the year. Reduced revenue was also the result
of a light audio and video sell-through release schedule during
the year. E-fulfillment sales decreased 22.4% from the prior
year primarily due to turmoil in the Internet market generally,
as well as failure of several customers, flat or declining sales
with other existing customers, and the lack of e-tail startups.
Independent distribution sales increased 8.9% from fiscal 2000
due to the acquisition of new labels and growth with existing
labels.

As was previously released, the company received a notice from
Nasdaq that it failed to meet the minimum listing requirements
for the Nasdaq National Market and that its securities were
therefore subject to delisting. The company has appealed that
determination. The hearing for the appeal is being held on June
21, 2001. There can be no assurance that the Panel will grant
the company's request for continued listing.

                    About Valley Media, Inc.

Valley Media, Inc. is a distributor of music, video and DVD
product, offering full-line distribution, independent
distribution and new media fulfillment services for e-commerce,
in addition to publications and proprietary database products.
Valley Media operates facilities in seven states with primary
distribution facilities in Louisville, KY and Woodland, CA where
its corporate headquarters are located.


WARNACO GROUP: Moves To Pay $14,800,000 To Critical Vendors
-----------------------------------------------------------
The Warnaco Group, Inc. wants to pay approximately $10,000,000
of prepetition claims held by certain essential trade creditors
and up to $4,800,000 of prepetition obligations to certain
licensors.

The Debtors request authority to determine the identity of each
essential trade creditors without further court oversight,
intervention or approval.  Identifying the essential trade
creditors now would likely cause such creditors to demand
payment in full.  The Debtors tell the Court that when
determining whether a creditor is an essential trade creditor,
the Debtors will consider:

       (a) Whether the goods or services the creditor provides
can be replaced;

       (b) Whether failure to pay any particular pre-petition
Trade Claim will require the Debtors to incur higher costs for
good or services post-petition; and

       (c) Whether failure to pay a particular Trade Claim will
cause the Debtors to lose sales or future revenue in excess of
the amount of such claim.

In order to operate their businesses, Warnaco argues, the
Company must have a continuing flow of raw materials and
finished goods, in-process inventory to the Debtors'
manufacturing distribution and warehousing facilities throughout
the world.  The Debtors' businesses are dependent upon a
continuous and timely supply of goods.

The Debtors' strong relationships with major stores and mass
merchandisers are based on their reputation for reliability,
dependability, and customer responsiveness.  In order to
maintain that strong relationship with these customers and
improve the Debtors ability to achieve a successful
restructuring, the Debtors must be able to make timely delivery
of their products. The Debtors' ability to make timely delivery
is dependent on:

       (1) An efficient transportation and logistics system;

       (2) A smooth and efficient supply of raw materials, in-
           process inventory, and finished goods; and

       (3) Interruption-free manufacturing operations.

These three factors are dependent upon a number of third-party
vendors that the Debtors believe critical to their business.

More particularly, some of the essential trade creditors are
among only a few such suppliers in the world.  Others offer
products that are far superior to those available elsewhere,
that the Debtors cannot practicably replace.  IF the Debtors
lose those relationships, their ability to generate future
revenues would suffer greatly.

Other essential trade creditor provide goods or services for a
reduced cost.  If the Debtors cannot continue to benefit from
future low costs, it may be prudent for the Debtors to pay these
selected essential trade creditors their pre-petition claims,
provide that such vendors sell their goods or services at a
reduced cost going forward.

The count of the essential trade creditor's estimated pre-
petition trade claims, account for any set-offs, other credits
and discounts thereto, shall be mutually determined in good
faith by each essential trade creditor, and the Debtors (but
such amount shall be used only for the purposes of this motion
and shall not be deemed to constitute a claim allowed by the
court and the rights of all interested persons to object to such
claim shall be fully preserved until further order of the
Court.)

The Debtors propose to pay the Trade Claims of each essential
trade creditor that agrees to continue to supply goods or
services to the Debtors on such essential trade creditor's
customary trade terms.  However, in determining the Trade Claims
Cap, the Debtors were careful to include only such payments that
the debtors, in their best estimate, determined would be
required at a minimum to continue the supply of critical goods
and services as a condition of continued sales.  It may also be
necessary to pay certain essential trade creditors a portion of
such creditors' claim in return for the continued supply of
critical goods and services - even if not only the essential
trade creditor's customary trade terms.  The Debtors thus seek
approval to enter into a separate agreement, at the Debtors'
discretion, with each such essential trade creditor on a case by
case basis.

If an essential trade creditor later refuses (unless such
refusal is based on the Debtors' failure to make timely payments
subsequent to the Petition Date contrary to the customary trade
terms) to continue to supply goods or services to the Debtors on
customary trade terms during the pendency of these Chapter 11
cases (or on such terms as were individually agreed to between
the Debtors and such essential trade creditor), then the Debtors
may, in their discretion, and without further order of the
Court, declare that:

       (a) Any payment of a trade claim made by the Debtors under
the order granting this motion shall be deemed to be a post-
petition advance that the Debtors may recover from such
essential trade creditor in cash or in goods or services; and

       (b) Upon any such recovery by the Debtors, the trade claim
of such essential trade creditor paid after the Petition Date
shall be reinstated in the amount so recovered.

To ensure the essential trade creditor deal with the Debtors on
customary trade terms, the Debtors request authority, but not
direction, to:

       (a) Send a letter substantially in the form attached to
the essential trade creditors along with a copy of the order
granting the motion and

       (b) Include on the check used to pay trade claim of an
essential trade creditor, a legend substantially in the
following form:

           By accepting this check, the payee agrees to the terms
       of the order of the U.S. Bankruptcy Court for the Southern
       District of New York, dated _________, 2001, in the
       Company's chapter 11 case (Case No._______), entitled
       "Order Granting Debtors Authority for provisional payment
       of prepetition claims of essential trade creditors" and
       submits to the jurisdiction of that Court for enforcement
       thereof.

The Debtors suggest that they may return to Court at a later
date asking for authority to increase the Trade Claims Cap.
(Warnaco Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


WINSTAR COMMUNICATIONS: Hires Swidler Berlin As Special Counsel
---------------------------------------------------------------
Winstar Communications, Inc. sought and obtained an order
authorizing them to retain and employ Swidler Berlin Shereff
Friedman, LLP, as special telecommunications regulatory counsel,
nunc pro tunc to April 18, 2001.

The Debtors will pay Swidler Berlin its customary hourly rates
ranging from:

                 $310 to $420 - Partners
                 $125 to $340 - Counsels and Associates
                  $90 to $150 - Legal assistants and Clerks

Swidler Berlin will also charge the Debtors for all
disbursements and expenses incurred in the performance of
services such as: costs for telephone and facsimile charges,
photocopying, travel, business meals, computerized research,
messengers, couriers, postage, witness fees, and other fees
related to trials and hearings.

Swidler Berlin attorneys have a history with the Debtors since
Swidler Berlin had represented the Debtors in a variety of
matters such as, in the appeal in the United States District
Court for the Northern District of California from a California
Public Utility Commission ruling on reciprocal compensation,
etc. Swidler Berlin has also represented the Debtors are
plaintiffs in a lawsuit against Pacific Bell Inc. (Pacbell) in
the U.S. District Court for the Central District of California.
The Debtors seek damages for Pacbell's alleged breach of duty to
provide adequate security for Centrex Equipment used in services
sold to Winstar.

As special counsel, Swidler Berlin will help debtors by:

       (a) Providing legal advice and performing legal services
with respect to the Debtors' regulatory affairs (other than
regulatory matters associated with Debtors' FCC radio licenses
and spectrum isues being handled by Debtors' other special
counsel) in the continued operation of their businesses and
management of their properties;

       (b) Continued representation of Debtors in the Reciprocal
Compensation Appeal and Pacbell Lawsuit and any related
settlement negotiations.

With Swidler Berlin retention, the Debtors believe it will be
easier for them to respond to the legal issues that are likely
to arise in connection with the regulatory aspects of their
businesses.

Andrew D. Lipman, a partner in the firm of Swidler Berlin and
head of its Telecommunications Practice Group, assures Judge
Farnan that Swidler Berlin's partners and attorneys do not have
any connection with the Debtors', their creditors, or any other
party-in-interest.  Neither do they represent or hold any
interest adverse to the Debtors with respect to matters for
which Swidler Berlin is to be retained in these cases, Mr.
Lipman adds.

Swidler discloses that it is currently representing the Debtors
and certain subsidiaries, @link, ABN/AMRO Bank, Alex Brown
Investment Management, American Fiber Systems, ARC/Info Highway,
Bank of New York, Barclays Bank PLC, BTI, Cable and Wireless,
CAIS, Centurytel, Centurytel of Washington, CIBC World Markets,
Cignal Global Communications, Citibank Global Asset Management,
Citibank N.A., Citicorp N.A., Commonwealth Tel. Co., Covad
Communications Group, Credit Suisse First Boston, CTC
Communications, Enron, Focal, Frontier Comm. of Minnesota,
General Electric Capital Corporation, Global Crossing, ICG
Communications, ITC Delta Com, JH Whitney, Level 3
Communications, Lucent Technologies, Mass Mutual Financial
Group, McLeod USA, Merrill Lynch Asset Management, MGC
Communications, NEES Communications, Oppenheimer Funds, Oracle
Corporation, Progress Telecom, Teleglobe, Telergy, UBS AG,
United States Trust Company of New York, UUNET, Velocita, Welsh
Carson Anderson & Stowe VIII LP, W.L. Pritchard & Co. LLC,
Williams Communications Inc., and WorldCom in matters totally
unrelated to these cases.

As of April 18, 2001, Mr. Lipman relates, Swidler Berlin holds a
pre-petition general unsecured claim against the Debtors in the
approximate amount of $230,287.52 for legal services.  Mr.
Lipman says they plan to file a timely proof of claim against
the Debtors. (Winstar Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


WOLF CAMERA: Files Chapter 11 Petition in N.D. Georgia
------------------------------------------------------
Wolf Camera, Inc. filed a petition for reorganization under
Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy
Court for the Northern District of Georgia. The company has
arranged post-petition financing from its existing bank
syndicate. All store locations are open and conducting business
as usual with no impact on customer service or photo-finishing
services.

"Our commitment to Wolf customers and employees and our belief
in the future of the photography specialty retail business is
unwavering," said Chuck Wolf, founder and CEO of the Atlanta-
based company. "The reality is we have been unable to digest our
1998 acquisition of Fox Photo, and we believe the Chapter 11
process will provide us with the best opportunity to implement
our strategic reorganization plan and return the business to
profitability. The filing was a tough decision but the right one
in order to allow us to create a new and improved Wolf Camera.
The Fox Photo acquisition was a mistake, and I take full
responsibility for the decision and for moving our company
forward starting today."

Atlanta-based Wolf Camera has been in business for more than 27
years and is the nation's second largest photo retailer, with
more than 500 stores in more than 20 states and more than 5,000
employees. The company has processed more than three billion
rolls of film since its founding in 1974.

According to Executive Vice President for Corporate Strategy
Stephen LaMastra, the company is well on its way to formulating
its reorganization plan, and expects the reaction from creditors
and vendors to be supportive.

"Our vendor relationships have been exceptional for 27 years,
and we expect this to continue," said LaMastra. "It is very
heartening that our bank syndicate is squarely behind us as is
Kodak, our largest vendor. We expect it will be business as
usual for our customers and associates. We do plan to close
underperforming stores and anticipate some minimal layoffs. Once
our reorganization is complete, we expect to become a healthier,
more focused company with similar momentum to what we had
established before the Fox Photo acquisition."

Chuck Wolf founded privately held Wolf Camera in 1974. Wolf
Camera locations offer a complete inventory of traditional
photography and digital imaging products and services, frames,
albums and accessories. Each Wolf Camera store is staffed by
trained experts and features on-site, one-hour film developing.
Digitizing services, which allow consumers to transfer images to
a floppy disk, CD or have them uploaded to the Internet are also
available. For more information about Wolf Camera, visit
http://www.wolfcamera.com


WOLF CAMERA: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Lead Debtor: Wolf Camera, Inc., a Georgia Corporation
              4955 Marconi Drive
              Alpharetta, GA 30005

Debtor affiliates filing separate chapter 11 petitions:

              wolfxpress.com,llc
              Fox Photo Partner, Inc.
              Texas Photo Finish, L.P.

Type of Business: Offers a complete inventory of traditional
                   photography and digital imaging products and
                   services, frames, albums and accessories

Chapter 11 Petition Date: June 21, 2001

Court: Northern District of Georgia (Atlanta)

Bankruptcy Case Nos.: 01-83470; 01-83472; 01-83474; 01-83475

Judge: C. Ray Mullins

Debtors' Counsel: David A. Geiger, Esq.
                   Jeffrey W. Kelley, Esq.
                   Shannon Lowry Nagle, Esq.
                   Powell, Goldstein, Frazer & Murphy, LLP
                   Sixteenth Floor
                   191 Peachtree Street
                   Atlanta, GA 30303
                   (404) 572-6600
                   Email: jkelley@pgfm.com

Estimated Assets: More than $100 Million

Estimated Debts: More than $100 Million

List of Debtor's 20 Largest Unsecured Creditors:

Entity                       Category Of Claim     Claim Amount
------                       -----------------     ------------
Eastman Kodak                Trade debt            $49,906,374
Dan Palumbo
343 State Street
Rochester, NY 14650
Tel: 716/724-3518
Email: daniel.palumbo@kodak.com

Traveller's Insurance        Trade debt            $20,000,000
Company
Tess Torrey
One Tower Square, 9PB
Hartford, CT 06183
Tel: 860/277-5952
Fax: 860/954-5243
Email: ttorey@travelers.com

Picture Vision, Inc.         Contract               $5,464,148
David McWhorter
520 Herndon Parkway
Herndon, VA 20170
703/326-1343

Canon USA, Inc.              Trade debt             $4,787,482
Patricia Festa
100 Jamesburg Road
Jamesburg, NJ
Tel: 732/521-7515
Fax: 732/521-7508
Email: pfesta@cusa.canon.com

Nikon, Inc.                  Trade debt             $3,382,758
Paul D'Aversa
1300 Walt Whitman Road
Melville, NY 11747
Tel: 631/547-6630
Email: daversa@nikonincmail.com

Sigma Corporation of         Trade debt             $2,147,410
America
Vicky Schwarting
15 Fleetwood Court
Ronkonkoma, NY 11779
Tel: 631/585-1144
Fax: 631/585-1895
Email:vschwarting@sigmaphoto.com

Pentax Corporation           Trade debt             $1,906,755
Jim Leffel
35 Inverness Drive
East Englewood
CO 80112
800/729-1419 Ext. 336

Minolta Corporation          Trade debt             $1,576,999
Howard Kocmond
P.O. Box 191185
Atlanta, GA 31119
Tel: 404/842-1953
Fax: 404/842-3843
Email: hkocmond@minolta.com

Olympus America, Inc.        Trade debt             $1,430,958
Mark Gumz
Two Corporate Drive
Mellville, NY 11747
Tel: 631/844-5010
Fax: 631/844-5021
Email: gumzm@olympus.com

T.R.W. Construction          Contract               $1,083,456
Thomas R, Wojtczak
275 Satellite Boulevard
Suwanee, GA 30024
Tel: 678/482-9717
Fax: 678/482-9707

Sony Electronics             Trade debt               $993,041
Ken Frisco
1 Sony Drive
Park Ridge, NJ 76560
Sony Electronics
Tel: 201/930-6910
Fax: 201/930-6390
Email: ken.frisco@am.sony.com

Ross A. Leher               Loan                      $750,000
14 Huntwick Lane
Englewood, CO 80110
Tel: 303/761-8216
Fax: 303/893-1574
Email: rleher@wand.com

In Focus, Inc.               Trade debt               $588,913
Annie Sunseri
3556 Piedmont Raod
Suite 201
Atlanta, GA 30305
503/685-8736

Tocad America, Inc.          Trade debt               $569,003
Richard Darrow
300 Webro Road
Parsippany, NJ 07054
Tel: 800/886-2236
Fax: 973/887-2438
Email: rdarrow@tocad.com

Prudential Securities        Trade debt               $524,165
Simon Gill
Timothy Pellgrin
One New York Plaza
18th Floor
New York, NY 10292
Tel: 212/778-4251
Fax: 212/778-4788

JVC Company of America       Trade debt               $498,586
Wilson Lee
1500 Lakes Parkway
Lawrenceville, GA 30043
Tel: 770/339-2582
Fax: 770/339-2500
Email: wlee@jvc.com

Orix                         Lease                    $426,151
Steven L. Enyeart
550 South Hope Street
Suite 1600
Los Angeles, CA 90071
Tel: 213/955-6543
Fax: 213/955-6530
Email: steven.enyeart@orixlease.com

Meade Instruments Co.        Trade debt               $416,024
Joseph Gordon, Jr.
6001 Oak Canyon Road
Irvine, CA 92620
Tel: 800/755-3854
Email: joe.gordon@meade.com

Tamron USA, Inc.             Trade debt               $400,757
John Van Steenberg
125 Schmitt Boulevard
Farmingdale, NY 11735
Tel: 800/827-8880
Fax: 631/694-1414

Tamrac, Incorporated         Trade debt               $398,368
John Mozzone
4776 Carlene Way
Lilburn, GA 30247
Tel: 770/972-6969
Fax: 770/972-3232


BOND PRICING: For the week of June 25 - 29, 2001
------------------------------------------------
Following are indicated prices for selected issues:

Algoma Steel 12 3/4 '05              18 - 20 (f)
Amresco 9 7/8 '05                    57 - 59
Arch Communications 12 3/4 '05        8 - 11 (f)
Asia Pulp & Paper 11 3/4 '05         25 - 27 (f)
Chiquita 9 5/8 '04                   66 - 68 (f)
Friendly Ice Cream 10 1/2 '07        55 - 58
Globalstar 11 3/8 '04                 6 - 7 (f)
Level III 9 1/8 '04                  52 - 54
PSINet 11 '09                         7 - 9 (f)
Revlon 8 5/8 '08                     47 - 50
Trump AC 11 1/4 '06                  66 - 68
Weirton Steel 10 3/4 '05             38 - 40
Westpoint Stevens 7 3/4 '05          40 - 42
Xerox 5 1/4 '03                      81 - 83

                            *********

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

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Wednesday's edition of the TCR. Submissions about insolvency-
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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
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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
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                      *** End of Transmission ***