TCR_Public/010626.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Tuesday, June 26, 2001, Vol. 5, No. 124


BRIDGE INFORMATION: Euronext Demands Payment Of Obligations
CMI INDUSTRIES: Creditors Agree to Dismiss Involuntary Petition
DANKA BUSINESS: Issues Update Regarding Exchange Offer
EDISON INT'L: SCE Responds to FERC Price Mitigation Decision
EDISON: Mission Energy to Pay Steep Price on $1.2 Billion Bonds

eLEC COMMUNICATIONS: Receives Nasdaq's Delisting Notice
FINOVA GROUP: Offering 70% for Unsecured Claims
FRANK'S NURSERY: Names Lakin & Szopinski as Co-Chief Executives
FRUIT OF THE LOOM: Court Okays Miscellaneous Asset Sale Protocol
FURRS SUPERMARKETS: Bankruptcy Auction Set For Tomorrow

GMX RESOURCES: Files Statement for Planned Preferred Offering
GORGES HOLDING: Seeks to Extend Exclusive Period To September 13
HAMILTON BANCORP: Defers Payment on Trust Preferred Securities
HARNISCHFEGER: Hires Donald C. Roof As New CFO and Treasurer
HAWKER SIDDELEY: Shareholders Approve Liquidation Plan

HEILIG-MEYERS: Completes Homemakers Stores' Sale To Rhodes Inc.
ICG COMMUNICATIONS: Has Until October 10 To Remove Litigation
ICON CAPITAL: Fitch Downgrades Equipment Lease Securitizations
INTERNET PICTURES: Falls Short of Nasdaq's Listing Requirement
LATTICE SEMICONDUCTOR: Revenues Fall By $15MM In Q1 2001

LEVEL 3 COMMUNICATIONS: S&P Junks Senior Debt Ratings
LINC EQUIPMENT: Fitch Cuts Ratings on Lease-Backed Certificates
LOEWEN GROUP: Disclosure Statement Hearing Set For August 16
LTV CORP.: Professionals Ask for $5,700,000 in Interim Fees
M GROUP: Employs Ernst & Young as Accountants

MONTGOMERY WARD: Final Two-Day HQ Public Auction Starts Today
NATIONAL AIRLINES: Carl Icahn Drops Bid for Bankrupt Carrier
NETROM INC: Sets Shareholders' Meetings To Present $3MM Offering
NETSILICON: Considers Selling Securities To Raise Needed Funds
OWENS CORNING: Settles Patent Dispute With CGI Silvercote

PACIFIC GAS: Seeks To Continue Environmental Cleanup Programs
PILLOWTEX CORPORATION: State Farm Presses to Liquidate Claim
PRIME FINANCE: Fitch Downgrades Lease Securitizations
PSINET INC.: Asks Court to Continue Using Current Business Forms
RELIANCE GROUP: Moves To Retain Ordinary Course Professionals

ROBERDS, INC: Seeks to Extend Exclusive Period To December 11
SWT FINANCE: Moody's Cuts Senior Sub Note Rating to Caa2
TELEGEN CORP.: Needs To Raise Capital To Sustain Operations
TOWER RECORDS: Optimistic Despite Moody's Downgrade
WARNACO GROUP: Paying $2,000,000 to Foreign Vendors

WASHINGTON GROUP: Asks Court To Establish August 15 Bar Date
WINSTAR COMMUNICATIONS: Retains Nixon Peabody As Special Counsel
WORLD AIRWAYS: Shares Face Delisting From Nasdaq Market


BRIDGE INFORMATION: Euronext Demands Payment Of Obligations
Euronext N.V. provides Bridge Information Systems, Inc. critical
financial data about certain European stock markets and market

The relationship between Euronext and the Debtors began when
Euronext acquired the total shareholdings of the former
ParisBourse SA, the former Amsterdam Exchanges N.V. and the
Brussels Exchange, which became wholly-owned operating
subsidiaries of Euronext on September 2000.

The former Paris, Amsterdam, and Brussels exchanges provided the
Debtors with copyrighted securities market information from
various European markets, pursuant to various contracts. The
copyrighted services were provided to the Debtors on a non-
exclusive and non-assignable basis.

Effective January 1, 2001, Euronext assumed the rights and
obligations of the various exchanges under the pre-merger
contracts. Months before, Euronext and the Debtors already
agreed to supplement and amend the pre-merger contracts pursuant
to the Euronext Market Databases Distribution Agreement, which
Euronext sent to the Debtors on September 28, 2000 for
execution. Although Euronext and the Debtors have operated under
the terms of the Distribution Agreement since its effective date
of January 1, 2001, the Debtors have yet to sign the contract.

The Distribution Agreement was intended to be the successor
contract to the pre-merger contracts, embodying all rights,
duties and allegations of all parties.

As of Petition Date, the Debtors had failed to make payments
under the terms of the pre-merger contracts and the Distribution
Agreement. As of December 31, 2000, the Debtors owe Euronext
$1,138,227,20. Because the Debtors have failed to comply with
their reporting requirements under the Distribution Agreement,
Euronext is unable to determine the amounts owed by the Debtors
since the Petition Date. However, Euronext estimates the
postpetition dues to be in excess of $700,000 through April 30,
2001. These administrative expenses continue to accumulate at a
rate of approximately $230,000 per month.

Euronext hasn't seen a dime from the Debtors since October 2000.

Michael A. Clithero, Esq., at Blackwell Sanders Peper Martin, in
St. Louis, Missouri, argues that since the Debtors continue to
utilize Euronext's valuable proprietary information, it is only
fair for Euronext to be paid of its services.

By this motion, Euronext asks Judge McDonald to:

      (a) Compel the Debtors to pay them $700,000 estimated post-
petition charges under the Distribution Agreement through April
30, 2001;

      (b) Permit Euronext to immediately exercise its audit
rights under the Distribution Agreement to determine the amounts
due for the period of February 15, 2001 (Petition Date) to the
date of entry of the proposed order (Audit Period);

      (c) Compel the Debtors to pay Euronext the full amounts due
for the Audit Period within 10 business days after the
conclusion of such audit;

      (d) Find that Euronext's claim for the Debtors' continued
usage of the Copyrighted Services is reasonable and necessary
expense of administration pursuant to 11 U.S.C 503; and

      (e) Order the Debtors to immediately pay Euronext at the
full contract rate pending their assumption or rejection of the
Distribution Agreement

Mr. Clithero relates that Euronext was compelled to file this
motion based on its financial relationships with the Debtors and
the significant delays and uncertainty surrounding the Debotrs'
sale of their assets and payment of their administrative claims.

The Reuters/Bridge Purchase Agreement, Mr. Clithero notes,
limits the buyer's cure amounts to pre-petition claims with all
postpetition, pre-closing liabilities to remain with the
Debtors. The purchase agreement is also vague, Mr. Clithero
adds, because it is not specify whether the Debtors will assume
or assign the contract to Reuters or any other bidder,
considering that the Euronext contract is important to the
future operations of the Debtors' businesses. Mr. Clithero says,
it is unfair of the Debtors to continue using Euronext's
services without committing to either assume the contract or pay
for postpetition use of the proprietary information. This should
not be tolerated, Mr. Clithero tells Judge McDonald.

Euronext is also entitled to audit the records of the Debtors
and to receive the contractual required payments as adequate
protection of its interest in the copyrighted services that the
Debtors continue to use, Mr. Clithero notes. Euronext needs to
determine the exact amounts that accumulated and is accumulating
as administrative expenses. An audit will also verify the pre-
petition amounts due to enable Euronext to file an accurate
proof of claim by the June 29, 2001 bar date. (Bridge Bankruptcy
News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 609/392-

CMI INDUSTRIES: Creditors Agree to Dismiss Involuntary Petition
CMI Industries, Inc. and the creditors who filed an involuntary
bankruptcy petition against the Company on May 3, 2001, have
filed a joint motion to dismiss the bankruptcy petition. The
parties have agreed to use their best efforts to obtain the
entry of a final order granting such relief on or before July

In conjunction with the joint dismissal motion, the parties have
also agreed to an interim order outlining the terms and
conditions for the parties to continue working together to
develop a cooperative approach to restructure the Company's debt
structure outside of bankruptcy.

Said Joseph L. Gorga, President of the Company, "The Company
continues to express its appreciation to all of its customers,
vendors and associates for their continued support over the last
few weeks. The Company, its petitioning bondholders and non-
petitioning bondholders are committed to restructure the
Company's capital structure outside of bankruptcy in a
cooperative and time efficient manner. I believe the framework
for achieving this goal is now in place. We continue to have
access to significant borrowing capacity under our secured
credit facility with Fleet Capital. The Company expects to
continue operating in the ordinary course and today's
announcement will enable the Company to aggressively move
forward with its strategic initiatives to grow its Elastics

Said Daniel J. Arbess of Triton Partners (Restructuring) which
is assisting the petitioning creditors, "The agreement creates
the basis for an orderly restructuring of CMI's capital
structure for the benefit of the creditors and other relevant
stakeholders. We are now looking forward to moving ahead to
achieve an acceptable restructuring as quickly as possible and
without disruption of the Company's commercial operations."

CMI Industries, Inc., and its subsidiaries manufacture textile
products that serve a variety of markets, including the home
furnishings, woven apparel, elasticized knit apparel and
industrial/medical markets. Headquartered in Columbia, South
Carolina, the Company operates manufacturing facilities in
Clarkesville, Georgia; Clinton, South Carolina; Greensboro,
North Carolina; and Stuart, Virginia. The Company had net sales
from continuing operations of $194.7 million in 2000.

DANKA BUSINESS: Issues Update Regarding Exchange Offer
Danka Business Systems PLC (Nasdaq:DANKY) has received tenders
from approximately 92% of its outstanding 6.75% convertible
subordinated notes due April 1, 2002 (CUSIP Nos. G2652NAA7,
236277AA7, and 236277AB5), has extended the expiration of the
exchange offer for the notes and has amended the conditions to
closing the exchange offer as described below.

The Company said that as of 5:00 p.m., New York City time, on
June 22, 2001, it had received tenders from holders of a total
of $183,957,000 in aggregate principal amount (approximately
92%) of the 6.75% convertible subordinated notes. Of the notes
tendered pursuant to the exchange offer, $118,484,000 in
principal amount (approximately 59.2%) has been tendered for the
limited cash option, $1,015,000 in principal amount
(approximately 0.5%) has been tendered for the new senior
subordinated note option and $64,458,000 in principal amount
(approximately 32.2%) has been tendered for the new 10% note

The exchange offer is subject to certain conditions, including
the closing of the purchase of Danka's outsourcing division,
Danka Services International ("DSI"), by Pitney Bowes Inc., the
consent of Danka's senior bank lenders, the consent of parties
to Danka's tax retention operating leases and other customary
conditions. The Company has amended the exchange offer to reduce
the condition requiring minimum tenders from 95% to 92%.
However, Danka's senior lenders and parties to Danka's tax
retention operating leases have not consented to the exchange
offer. Accordingly, the Company is continuing to seek tenders
from holders who have not yet participated in the exchange offer
with the goals of obtaining at least 95% participation in the
offer and obtaining the consent to the exchange offer from
Danka's senior bank lenders and parties to Danka's tax retention
operating leases.

Danka's Chief Executive Officer, Lang Lowrey, commented "We are
very pleased with the progress made in our exchange offer over
the past several days. A number of additional holders have
elected to tender into the exchange offer. Their participation,
along with those holders who had already tendered, is essential
to the successful conclusion to our three-part restructuring
plan. We continue to work towards our goal of receiving 95%
participation, obtaining the consent of our senior lenders, and
closing the sale of DSI by June 29."

The new expiration date of the exchange offer is Friday, June
29, 2001, at 8:00 a.m. New York time, unless extended.
The cash option will likely be oversubscribed. In that case,
Danka will purchase a total of $60 million principal amount of
old notes for cash and will exchange $800 in principal amount of
new senior subordinated notes for every additional $1,000 in
principal amount of the balance of old notes tendered for cash.
All holders who elect to receive cash will be treated equally in
this process.

Danka is seeking an agreement with its senior bank lenders not
to prohibit the repayment of any 6.75% convertible subordinated
notes that remain outstanding after the exchange offer is
completed, provided that Danka is not then in default under any
of the terms of the new credit facility and further provided
that a sufficient minimum number of notes to satisfy the banks
have been tendered under the exchange offer. Currently, the
senior bank lenders have advised Danka that such minimum is 95%
of all outstanding notes, and no assurances can be given that
the senior bank lenders will agree to a threshold lower than
95%. Further, there can be no assurance that Danka will be in
compliance with the terms of the new credit facility or have
sufficient funds to repay any 6.75% convertible subordinated
notes that remain outstanding when they become due. In addition,
if Danka is not in compliance with the terms of the new credit
facility when such payments become due, it will be prohibited
from making such payments to the holders of the 6.75%
convertible subordinated notes, which notes will be subordinated
to Danka's obligations to its senior bank lenders and to Danka's
obligations to the holders of the new notes to be issued under
the exchange offer.

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

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

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

EDISON INT'L: SCE Responds to FERC Price Mitigation Decision
Southern California Edison (SCE) commends the Federal Energy
Regulatory Commission (FERC) for its decision expanding its
April 26 electricity spot market price mitigation plan to cover
all 11 western states and all hours of trading.

"We have long advocated price constraints as one of several
emergency regulatory measures needed to stabilize California's
wholesale energy markets," said SCE Chairman, President & CEO
Stephen E. Frank. "We now urge the commission to follow through,
making certain that the necessary refunds of unjust and
unreasonable wholesale power prices are made promptly."

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

EDISON: Mission Energy to Pay Steep Price on $1.2 Billion Bonds
An Edison International holding company is being forced to pay a
steep price on $1.2 billion of junk bonds so that Edison can
stay out of bankruptcy, according to Reuters. Mission Energy
Holding Co. is preparing to pay yields as high as 13 percent on
its seven-year secured notes, market sources said. That is two
to five percentage points higher than yields on most junk bonds
sold in recent months and higher than recent yields on similar
energy bonds.

Analysts said Mission Energy may pay up because Rosemead,
Calif.-based Edison needs cash this month. The parent of
Southern California Edison, which is also trying to avoid
bankruptcy, is trying to refinance a fully drawn down $618
million bank credit line that expires June 30. (ABI World,
June 22, 2001)

eLEC COMMUNICATIONS: Receives Nasdaq's Delisting Notice
eLEC Communications (NASDAQ:ELEC), an integrated communications
provider of voice, data and broadband services, has received a
Nasdaq Staff Determination on June 19, 2001, indicating that
eLEC fails to comply with the minimum bid price requirement for
continued listing, set forth in Marketplace Rule 431(c)(4) and
that its common stock is 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. eLEC's stock will continue to be
listed on The Nasdaq SmallCap Market pending the panel's
decision. If eLEC Communications' stock is delisted, it will be
eligible for quotation on the OTC Bulletin Board.

eLEC Communications Corp. is a publicly-traded integrated
communications provider that is taking advantage of the
convergence of the current and future competitive technological
and regulatory developments in the Internet and
telecommunications markets. eLEC provides an integrated suite of
communications services to small and medium-sized business
customers, including voice, data and broadband services.

FINOVA GROUP: Offering 70% for Unsecured Claims
Looking for a quick cash-on-cash return, is
offering unsecured creditors 70 cents-on-the-dollar in exchange
for an assignment of their claims against FINOVA Capital Corp.
If FINOVA's latest plan is confirmed and declared effective by
the August 31 drop-dead date imposed by Berkadia,
will realize an annualized rate of return topping 250% for
claims it acquires in June.

"Trade-Debt.Net buys many claims in a variety of bankruptcy
cases throughout the US. We are able to employ our legal
resources for all claims purchased and realize great 'economies
of scale,'" Claims Administrator Timothy McGuire
tells FINOVA creditors.  "Finova Capital Corp. can't make any
payments on account of your claim until a confirmed Plan of
Reorganization has been made 'effective' or through a court
order," Mr. McGuire stresses, assuring that creditors accepting's discounted cash offer will receive checks
within one week's time. offers this disclosure in its solicitation
materials about the status of FINOVA's fast-track Berkadia-
backed plan offering a 100% recovery to unsecured creditors: "If
you wish to review the status of the Plan of Reorganization or
any other issues regarding this matter you can contact the
debtor, debtors [sic.] counsel or the unsecured creditors [sic.]

FRANK'S NURSERY: Names Lakin & Szopinski as Co-Chief Executives
FNC Holdings, Inc., parent of Frank's Nursery & Crafts, Inc.,
the nation's leading specialty retailer of lawn and garden
products, announced that its Board of Directors has named Larry
T. Lakin and Adam Szopinski as Co-Chief Executive Officers,
effective July 2, 2001. Mr. Lakin serves as the Company's Vice-
Chairman of the Board, Chief Financial Officer and Treasurer.
Mr. Szopinski serves as the Company's Chief Operating Officer
and President. Each will retain his current responsibilities
while assuming the added role of Co-CEO.

Messrs. Lakin and Szopinski replace Joseph R. Baczko, who has
held the positions of Chairman and CEO of FNC Holdings, Inc. and
Frank's since 1997. The Board and Mr. Baczko have mutually
determined that it is in the best interests of the Company as it
prepares its reorganization plan to seek new leadership now,
given Mr. Baczko's intentions not to play a role on emergence
from Chapter 11. Mr. Baczko has stated his intentions to pursue
other interests in the private sector.

The Board is grateful to Joe for his leadership and many
contributions to Frank's, said Jim Stern, a member of the FNC
Holdings Board. Joe brought state-of-the-art technology and
merchandising practices to Frank's, significantly advancing the
Company's operations and market position. Under Joe's direction,
Frank's successfully developed its growing home and garden decor
segments as a complement to the Company's core lawn and garden
business. Joe also introduced Frank's larger and highly popular
new store model. We especially thank him for his leadership
during what has been a highly challenging period for the Company
since its filing, said Stern.

We are pleased that Larry Lakin and Adam Szopinski have agreed
to serve as Co-CEOs of Frank's, Jim Stern continued. Both Larry
and Adam have substantial experience in the retail sector and a
comprehensive knowledge of Frank's, making them the right team
to provide stability, expertise and leadership in the near term
as Frank's continues to rebuild its business. Given their
backgrounds, the board anticipates a seamless transition and is
confident that the Company is well positioned to make continued
progress on its reorganization in the coming months. A formal
search process has been undertaken by the Board to identify
candidates to lead the Company on a permanent basis.

Larry T. Lakin joined Frank's in December 1997 as Executive Vice
President and Chief Financial Officer and a member of the Board
of Directors. In June 1998 he was made the Company's Treasurer,
and in April 1999 he assumed the role of Vice Chairman. Prior to
joining FNC Holdings, Mr. Lakin served as the Chief Financial
Officer and a principal of Shiara, Inc., a private fragrance and
cosmetics company, from 1994 until 1997.

Adam Szopinski joined Frank's in December 1997 as Executive Vice
President, Chief Operating Officer and a member of the Board of
Directors. In April 1999, he assumed the role of President.
Prior to joining Frank's, Mr. Szopinski had served as the Vice
President of Operations of Toys R Us International since 1989.

Frank's Nursery & Crafts, Inc. operates the nation's largest
specialty retail chain in the lawn and garden market with 195
stores in 14 states. The Company is a leading retailer of green
and flowering plants for outdoor and indoor use, live landscape
products such as trees and shrubs, fertilizers, seeds, bulbs,
gardening tools and accessories, planters, watering equipment,
garden statuary and furniture, wild bird food and feeders,
mulches and specialty soils. Frank's also is a leading retailer
of Christmas Trim-A-Tree merchandise, artificial flowers and
arrangements, garden and floral crafts and home decorative
products. In its fiscal year ending January 28, 2001,
Frank's had sales of approximately $437 million and employed
approximately 1,650 full-time and 4,250 part-time employees. The
company voluntarily filed for Chapter 11 protection on February
19, 2001.

FRUIT OF THE LOOM: Court Okays Miscellaneous Asset Sale Protocol
J. Kate Stickles Esq., at Saul Ewing, reminded the Court that
Fruit of the Loom, Ltd. has achieved significant operational
improvements in all areas of manufacturing. Management has
disposed of non-productive assets, consolidated production
facilities to improve capacity utilization, reduced fixed costs,
eliminated and reduced of product lines, simplified
manufacturing processes and improved production efficiencies. In
connection with these operational improvements, Union Underwear
closed ten of its yarn and textile manufacturing facilities and
distribution centers. As a result, Fruit of the Loom intends to
transfer certain of the non-operating equipment to its other
operating facilities and liquidate the rest. The expeditious
liquidation of the surplus or obsolete non-operating equipment
that is not transferred would best maximize value for the

Ms. Stickles says it is not practical, efficient nor cost-
effective to comply with the cumbersome noticing requirements or
to seek Court approval of each equipment sale on an individual
basis. Accordingly, the Debtors, with the support of the
Official Committee, propose that Union be permitted to conduct
asset sales equal to or less than $100,000 per item, up to an
aggregate amount of $5,000,000, using its own business judgment
and without further Court intervention. Fruit of the Loom will
provide reports to the Core Parties-in-Interest detailing the
basics of each transaction.

Finding the reasoning compelling, Judge Walsh gives his consent
to this streamlined protocol. (Fruit of the Loom Bankruptcy
News, Issue No. 31; Bankruptcy Creditors' Service, Inc.,

FURRS SUPERMARKETS: Bankruptcy Auction Set For Tomorrow
Bankrupt Furrs Supermarkets will hold an auction for its assets
on Wednesday, June 27, according to The Daily Deal. Albuquerque-
based Furrs filed for bankruptcy protection on Feb. 8, listing
$280 million in debt. (ABI World, June 22, 2001)

GMX RESOURCES: Files Statement for Planned Preferred Offering
Ken L. Kenworthy, Sr., Executive Vice President of GMX RESOURCES
INC. (Nasdaq: GMXR; Warrants: GMXRW, GMXRZ) (website: says it filed a registration statement on
June 21, 2001 for its previously announced planned public
offering of $10 million of a new Series A Cumulative Convertible
Preferred Stock to be offered by the Company in an offering to
be underwritten by a syndicate managed by Paulson Investment
Company, Inc. and I-Bankers Securities Incorporated. The
Preferred Stock is expected to have a liquidation and redemption
value of $25.00 per share, plus accrued but unpaid dividends.
Cumulative dividends will be payable semi-annually at the rate
of $1.50 per share (equivalent to 6%). The Preferred Stock is
expected to be convertible into two shares of Common Stock at
the option of the holder at any time (equivalent to a conversion
price of $12.50 per share of Common Stock) and will be
automatically convertible into Common Stock if the Common Stock
trades for a period of four consecutive days at a price of at
least $18.75 per share.

The offering will be conducted upon the completion of marketing
efforts and review by the Securities and Exchange Commission.

GORGES HOLDING: Seeks to Extend Exclusive Period To September 13
Gorges Holding Corporation and Gorges/Quik-To-Fix Foods, Inc.
seek entry of an order granting an extension of their exclusive
period within which they may file a Chapter 11 plan or plan
through and including September 13, 2001 and the exclusive
period within which they may solicit acceptances of any such
plan through and including November 12, 2001. This is the
debtors' second request for an extension of their Exclusive
Periods within which to file a Chapter 11 plan or plans and
solicit acceptances thereto.

Due to their impending liquidity crisis, the debtors are seeking
a sale of the assets of Quik-to-Fix as a going concern. The
debtors are hopeful that a successful sale of the assets will be
completed promptly. Until the sales process is completed and the
outcome is known, the debtors will not be in a position to
prepare a plan and disclosure statement providing for the
disposition of estate assets remaining after the satisfaction of
secured debt obligations. In the event a sale is not
consummated, the debtor swill need additional time to determine
the future direction of the company and to negotiate and draft
any Chapter 11 plan associated therewith.

HAMILTON BANCORP: Defers Payment on Trust Preferred Securities
Hamilton Bancorp Inc. (Nasdaq: HABKE) received a Nasdaq Staff
Determination on June 15, 2001 indicating that the Company is
subject to delisting pursuant to Marketplace Rule 4310(c)(14)
because its Form 10-Q for the quarter ended March 31, was not
reviewed by an independent public accountant. The Company filed
an amended March 2001 10-Q, which has been reviewed by its
independent auditors.

The Company had earlier received Nasdaq Staff Determinations on
April 19, 2001 and on May 22, 2001, indicating that the Company
was subject to delisting unless and until it filed its Form 10-K
for the year ended December 31, 2000 and its March 2001 10-Q,
respectively. The Company was present for an oral hearing with
respect to these filings on May 31, 2001 and filed the 2000 10-K
and March 2001 10-Q on June 8, 2001. As indicated, the Company
amended the March 2001 10-Q earlier today to indicate that it
had been reviewed by the Company's independent auditors.

In the June 15 letter, Nasdaq staff also noted that the
Company's Form 10-K for the year ended December 31, 2000
contained a "going concern" opinion from the Company's
independent auditor. Nasdaq invited the Company to make a
written submission by June 22, 2001 outlining both the Company's
plan for addressing the auditor's review of the March 2001 10-Q
and discussing any impact the facts underlying the "going
concern" language of its auditor's opinion may have on the
Company's ability to achieve and sustain long term compliance
with Nasdaq's listing requirements. The Company responded by
updating Nasdaq about the filing of the amended Form 10-Q and to
advise Nasdaq, that the Company believes that it will achieve
and sustain long term compliance with Nasdaq listing

The Company also announced that, pursuant to the terms governing
the 9.75% Beneficial Unsecured Securities, Series A (Trust
Preferred Securities) issued by Hamilton Capital Trust I (The
Trust), the Company and the Trust have deferred dividends
payable on the Trust Preferred Securities commencing with the
dividend payable on June 30, 2001 and until further notice.
Under the terms of the Trust Preferred Securities, the Company
and the Trust have the right to defer payments up to 20
consecutive quarters. Any payments deferred will continue to
accumulate. As previously announced, the Company must obtain the
prior approval of the Federal Reserve Bank of Atlanta, its
primary regulator, to make any payments relating to the Trust
Preferred Securities. There can be no assurance when or if such
approval for future payments will be granted and when payments
to holders of the Trust Preferred Securities will resume.

Established in 1998, Hamilton Bancorp, through its subsidiary
Hamilton Bank, N.A., is a full service commercial bank
specializing in worldwide trade finance. Hamilton Bank offers
commercial banking services to the area's business community as
well as Harmoney(R), an internet-based online banking system
tailored to the needs of businesses with unique features to
address trade, such as issuing letters of credit online.
Hamilton has nine FDIC-insured branches -- eight Florida
branches and one in Puerto Rico -- all located in areas that are
active in trade.

HARNISCHFEGER: Hires Donald C. Roof As New CFO and Treasurer
Harnischfeger Industries, Inc. (OTC Bulletin Board: HFIIV)
announced that Donald C. Roof has joined the Company. He will
serve as Executive Vice President, Chief Financial Officer and
Treasurer. Mr. Roof will also become a member of the Company's
Management Policy Committee (MPC). He will report directly to
John Nils Hanson, Chairman, President and Chief Executive
Officer of Harnischfeger Industries.

Most recently, Mr. Roof served as the President and Chief
Executive Officer of Heafner Tire Group, Inc. Formerly, Mr. Roof
also served as Heafner Tire Group's Chief Financial Officer.
Prior to joining Heafner, he served in a variety of finance-
related positions with Yale International/Spreckels Industries
including Senior Vice President and Chief Financial Officer. Mr.
Roof holds a B.B.A. from Eastern Michigan University and is a
Certified Public Accountant.

John Nils Hanson, Harnischfeger's Chairman, President and Chief
Executive Officer remarked: "Don is a seasoned financial
executive with extensive experience in the manufacturing sector.
I am extremely enthusiastic about Don joining our management
team, and I am confident that he will be a key contributor to
the success of our Company as we complete our financial

Kenneth A. Hiltz, the current Chief Financial Officer at
Harnischfeger, joined the Company as a non-employee officer in
June, 1999, from Jay Alix & Associates, to assist the Company in
managing through the reorganization process. Mr. Hiltz will
continue his responsibilities at Harnischfeger for the next
month as Mr. Roof transitions into his new position. Thereafter,
Mr. Hiltz will continue his career as a principal of Jay Alix &

John Nils Hanson, Harnischfeger's Chairman, President and Chief
Executive Officer remarked: "We are deeply appreciative of the
exceptional job Ken has done for us during our reorganization.
His continued commitment to supporting our emergence ensures
that Don will get a strong start in his position."

As previously announced, the Company's plan of reorganization
was confirmed on May 18, 2001, clearing the way for the Company
to emerge from bankruptcy as soon as its exit financing is
complete. Confirmation of the plan of reorganization was the
final court approval required for the Company's emergence from
Chapter 11.

Harnischfeger Industries Inc. is a worldwide leader in
manufacturing, servicing and distributing equipment for surface
mining through its P&H Mining Equipment division and underground
mining through its Joy Mining Machinery division.

HAWKER SIDDELEY: Shareholders Approve Liquidation Plan
The board of directors of Hawker Siddeley Canada Inc. (TSE: HSC)
announced that at the annual and special meeting of shareholders
held on June 22, 2001, approximately 85% of shareholder votes
cast at the meeting were in favour of adjourning the
consideration of the special resolution authorizing the
voluntary liquidation and dissolution of the Corporation. The
reconvened meeting to consider the special resolution will be
held at 10 a.m. EDT on Friday, August 10, 2001 in the Amsterdam
Room, Novotel Mississauga Hotel, 3670 Hurontario Street,
Mississauga, Ontario. The adjournment will allow shareholders
time to consider the offer by Glacier Ventures International
Corp. to acquire 45% of the outstanding shares of the
Corporation before voting on the special resolution and the
liquidation proposal.

Prior to the adjournment of the meeting, shareholders dealt with
the regular annual meeting business of receiving the report of
the directors and the financial statements of the Corporation
for the fiscal year ended December 31, 2000 and the report of
the auditors thereon; electing the directors of the Corporation;
and appointing the auditors of the Corporation.

              About Hawker Siddeley Canada Inc.

Hawker Siddeley is a company whose assets consist primarily of
cash and the potential realization of pension fund surpluses and
insurance premium refunds. The Corporation commenced the
disposal of its operating assets to strategic buyers in 1995 and
has substantially completed that process.

HEILIG-MEYERS: Completes Homemakers Stores' Sale To Rhodes Inc.
Heilig-Meyers Company completed the sale of certain assets of
its John M. Smyth's Homemakers stores and distribution center
located in Chicago, IL. to Rhodes, Inc.

The Company previously announced that it had filed a motion with
the United States Bankruptcy Court for the Eastern District of
Virginia seeking authorization to liquidate the inventory and
other assets of these stores and distribution center. The
Company determined that a competing bid received from Rhodes,
Inc. subsequent to the filing of the motion was the best offer
for the Homemakers assets. The Bankruptcy Court approved the
sale to Rhodes, Inc. on June 21, 2001 and the sale was closed on
June 22, 2001. Rhodes, Inc. plans to operate the stores as an
on-going business.

The Company filed voluntary Chapter 11 petitions in the U.S.
Bankruptcy Court for the Eastern District of Virginia in
Richmond for Heilig-Meyers Company on August 16, 2000.

ICG COMMUNICATIONS: Has Until October 10 To Remove Litigation
Eric M. Davis of Skadden Arps asks, on behalf of the ICG
Communications, Inc. Debtors, that Judge Walsh further extend
the time during which the Debtors move remove pending litigation
and administrative actions to the Delaware courts to and
including October 10, 2001, or 30 days after entry of an
Order terminating the automatic bankruptcy stay with respect to
any particular action for which removal is sought. As of the
Petition Date, the Debtors were parties to hundreds of civil
actions pending in various jurisdictions around the United
States and involving a variety of claims, including claims
sounding in contract and tort, as well as claims arising under
federal, state, and/or local regulatory laws.

The Debtors tell Judge Walsh a further extension is warranted.
Since the commencement of these cases the Debtors' focus has
been, first, on stabilizing their businesses and second, on
formulating a business plan that will ultimately form the basis
for a plan or plans of reorganization for the Debtors.
Consequently, the Debtors have not yet been able to conclude the
monumental task of analyzing the merits of removing each of the
hundreds of actions to which they are a party. The proposed
extension will afford the Debtors the chance to make an informed
decision with respect to the benefits, if any, to be derived
from removal of some or all of the actions.

The Debtors submit that a further extension of the removal
period will not prejudice the non-debtors parties to these
actions. Each non- debtor party to an action which is ultimately
removed will have the right to seek remand. Further, an
additional extension of the removal period will not delay the
prosecution of the actions, as most, if not all, of the actions
remain subject to the automatic bankruptcy stay.

In short, a further extension of the removal period simply will
permit maintenance of status quo while the Debtors review,
analyze and consider their options with respect to the actions.

Agreeing, Judge Walsh grants the requested extension. (ICG
Communications Bankruptcy News, Issue No. 7; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

ICON CAPITAL: Fitch Downgrades Equipment Lease Securitizations
Fitch downgrades the ICON Equipment Lease Grantor Trust 1998-A
transaction as follows:

    * Class A certificates are downgraded from 'BBB-' to 'B';
    * Class B certificates are downgraded from 'BB-' to 'CCC';
    * Class C certificates are downgraded from 'CCC' to 'C'.

Fitch also withdraws the rating on the class D certificates due
to the fact that it has been written down to zero.  All
certificates remain on Rating Watch Negative.

These rating actions are the result of continuing adverse
collateral performance and further deterioration of asset
quality outside of Fitch's original base case expectations.
Losses from defaulted leases have significantly reduced the
remaining credit enhancement available for all classes of
securities. Several large obligor defaults have occurred and
delinquencies have also been significantly higher than
historical levels.

Fitch has taken previous rating actions on the certificates.
Fitch will continue to closely monitor this transaction and may
take additional rating action in the event of further

INTERNET PICTURES: Falls Short of Nasdaq's Listing Requirement
Internet Pictures Corporation (Nasdaq: IPIX) reported receipt of
a Nasdaq Staff Determination on June 19, 2001, indicating that
the Company's common stock does not comply with the Nasdaq
Marketplace Rule 4450(a)(5) minimum bid price requirement for
continued listing, and that its securities are, therefore,
subject to delisting from the Nasdaq National Market. The
Company intends to request a hearing before a Nasdaq Listing
Qualifications Panel to appeal the Nasdaq Staff Determination.
The appeal will stay the delisting of the Company's common stock
pending the decision of the Panel. The Panel is expected to hear
the appeal within 45 days; however there is no assurance that
the Listing Qualifications Panel will grant the Company's
request for continued listing.

                        About iPIX

Internet Pictures Corporation (iPIXr) provides Internet imaging
solutions to facilitate commerce, communication and
entertainment. The Company's end-to-end solutions include the
capture, processing, management and distribution of digital
imaging and the associated data to make the images meaningful.
iPIX's solutions encompass many types of rich media content,
including still images, 360 degrees by 360 degrees immersive
images, video, animation, text and audio. A broad array of
industries -- including real estate, auctions, travel,
government, education, automotive, sports and entertainment --
are capitalizing on iPIX dynamic imaging to give viewers
more information, more interaction and a richer online
experience. Twenty-two of Media Metrix's top twenty-five web
sites use iPIX to make their sites more dynamic. The company is
headquartered in Oak Ridge, Tennessee, with co-headquarters in
San Ramon, California.

LATTICE SEMICONDUCTOR: Revenues Fall By $15MM In Q1 2001
Lattice Semiconductor Corporation's revenue for the first
quarter of 2001 decreased $15.0 million, or 12%, as compared to
the first quarter of 2000. This revenue decrease is said by the
Company to be attributable to decreased end customer demand for
its products, including its high density products. Revenue
declined across all geographies and the communications end
market was particularly weak. The Company's net gain for the
three months ended March 31, 2001 was $ 11,276 as compared to
the same period of 2000 when the net gain was $104,821.

In April 2001, Lattice Semiconductor announced that it expected
a significant sequential decline in revenue in the second
quarter of 2001. The Company believes that this shortfall is the
result of a general decline in PLD consumption. The extent of
this decline and whether this decline will continue is not known
at this time.

LEVEL 3 COMMUNICATIONS: S&P Junks Senior Debt Ratings
Standard & Poor's lowered its ratings on Level 3 Communications
Inc. and removed them from CreditWatch (see list below), where
they had been placed June 19, 2001.

The outlook is negative.

The downgrade reflects weakened near-term operating
fundamentals, particularly in the collocation business; poor
visibility on the demand, timing, and pricing for transport
services (i.e., wavelengths); and concerns regarding the
company's ability to service its heavy debt burden once its cash
position is exhausted.

The previous ratings on Level 3 reflected the significant
execution risks in transitioning to an operating company from a
construction company, increasing the quality of its customer
base and building market share, and rolling out new products and
generating a recurring revenue base over time. In addition, the
level of demand for bandwidth-related services from newer Web-
centric companies and rapidly declining prices for these
services have been overriding risks. However, it is apparent
from the company's recent announcements that deteriorating
capital market and economic conditions have impacted Level 3's
business to a greater extent than Standard & Poor's had
anticipated just a few months ago. A good portion of the
company's existing customer base is churning off or
disconnecting. Although the sales force is now focused on
providing transport services for large enterprise and carrier
customers, as opposed to emerging carriers and Web-centric
customers, the transition is difficult and will take time. In
addition to realigning its sales force, management has announced
significant workforce reductions as well as reductions in
capital spending activity over the next two years.

The company's senior unsecured debt is rated one notch below the
corporate credit rating, reflecting the dramatic decline in the
value of Level 3's asset base. The book value of the company's
net property plant and equipment was previously $10.1 billion,
but current market conditions suggest that the value of the
company's assets is in a distressed scenario and is
substantially less than this amount, including current cash
balances. At the end of the first quarter of 2001, $1.125
billion of term credit facilities were drawn, which are
structurally senior to the unsecured note holders.

Level 3 reported communication cash revenue for the first
quarter ended March 31, 2001, of $657 million, while cash EBITDA
was $240 million. These figures reflect cash received up-front
for indefeasible rights of use sales, primarily dark fiber, but
that is recognized in the income statement for accounting
purposes over the life of the contract. Gross margins improved
to 42%, as expenses declined due to the migration of leased
traffic onto the Level 3 network. Management has indicated that
it expects about $600 million of cash EBITDA for the full year
of 2001. Debt at March 31, 2001, was about $7.8 billion. While
the company had significant cash balances totaling $3.8 billion
at March 31, 2001, this is expected to be largely exhausted by
capital spending through 2002.

                       Outlook: Negative

The recent revenue and adjusted EBITDA revisions, while not
overly severe, highlight the lack of visibility into future
forecasts. Level 3's recent capital spending and operating
expense reductions will help conserve cash, and current cash
balances provide near-term coverage of debt obligations. Yet
Level 3 will have to ramp its recurring cash flow base rapidly
to service debt obligations beyond 2002, Standard & Poor's said.

Ratings Lowered & Removed From Credit Watch

Level 3 Communications Inc.           TO                 FROM
   Corporate credit rating             B-                 B
   Senior unsecured debt               CCC+               B
   Subordinated debt                   CCC                CCC+
   Shelf registration:
    Senior unsecured debt  preliminary CCC+   preliminary B
    Preferred stock        preliminary CCC-   preliminary CCC

LINC EQUIPMENT: Fitch Cuts Ratings on Lease-Backed Certificates
Fitch downgrades the LINC Equipment Receivables Trust 1999-1
transaction as follows:

      * Class B-1 subordinated lease-backed certificates are
        downgraded from `BBB' to `B';

      * Class B-2 subordinated lease-backed certificates are
        downgraded from `BB' to `CC'.

Both classes of certificates remain on Rating Watch Negative.

These rating actions are the result of adverse collateral
performance and further deterioration of asset quality outside
of Fitch's original base case expectations. Losses from
defaulted leases have significantly reduced the remaining credit
enhancement available for both classes of securities. US Bank
Portfolio Services replaced LINC Capital, Inc. as the servicer
of the transaction in August 2000.

Fitch will continue to closely monitor these transactions and
may take additional rating action in the event of further

LOEWEN GROUP: Disclosure Statement Hearing Set For August 16
The Loewen Group Inc. reported that the United States Bankruptcy
Court for the District of Delaware has set a hearing for August
16, 2001 on the Company's Disclosure Statement relating to its
Plan of Reorganization.

The Company earlier reported that its progress toward emergence
from creditor protection under Chapter 11 of the U.S. Bankruptcy
Code and the Canadian Companies' Creditors Arrangement Act
("CCAA") was being blocked by an inter-creditor dispute as to
whether certain portions of the Company's debt were entitled to
be treated as secured under the terms of the Company's
Collateral Trust Agreement ("CTA").

Referring to the U.S. Bankruptcy Court's order setting a
Disclosure Statement hearing, John Lacey, Chairman of the
Company's Board, stated that "we earlier expressed management's
view that, operationally, the Company has been ready to emerge
from the Chapter 11 and CCAA proceedings since at least as early
as October, 2000. We are pleased that the Bankruptcy Court has
now authorized us to proceed toward confirmation of the
Company's Plan of Reorganization. This significant step toward
emergence is the result of long and difficult negotiations
involving the Company and the principal creditor groups. There
are issues that will still need to be addressed as we move
forward with this process, and it is not impossible that further
delays could result, but we are optimistic that the widespread
support for now scheduling a Disclosure Statement hearing, from
principal creditors including the Official Unsecured Creditors
Committee and the CTA creditors, signals that disputes
concerning the CTA will no longer impede our progress toward
emergence. We are encouraged, too, by the indications from a
number of our principal creditors - representing various
positions on the CTA issue - that they also believe that there
is now a foundation for moving expeditiously toward emergence."

The Company, on or before June 29, 2001, will file a Third
Amended Plan of Reorganization and Disclosure Statement that
will incorporate understandings reached in recent negotiations.
Like the previous Plan submitted by the Company, the Third
Amended Plan will provide for treatment of the CTA debt based
upon the midpoint of the range recommended by the court-
appointed mediator. The Third Amended Plan will include modest
adjustments to proposed cash distributions and the principal
amount of the new seven-year notes to be issued by the
reorganized company in order to permit the payment of certain
fees and legal costs of principal creditors and creditor
representatives. Other changes include modifications to certain
corporate governance provisions.

Based in Toronto, The Loewen Group Inc. currently owns or
operates approximately 970 funeral homes and 350 cemeteries
across the United States, Canada and the United Kingdom. The
Company employs approximately 11,000 people and derives
approximately 90 percent of its revenue from its U.S.

LTV CORP.: Professionals Ask for $5,700,000 in Interim Fees
Lawyers and consultants advising LTV Corp. through bankruptcy
proceedings have submitted bills for $5.7 million, according to
court records, the Associated Press reports.  The fees cover
everything from legal advice to travel and expenses.  All of the
expenses must be approved by the bankruptcy judge before they
are paid. LTV spokesman Mark Tomasch said one of the points
under negotiation between LTV and the union involves increasing
the company's payments to the union's financial adviser. "They
want us to increase the money we pay for their consultants,'' he
said. LTV is in negotiations with creditors and the union over a
new labor contract that could keep the company afloat. LTV
officials have said that if they don't have a new contract in
place by September, they will be forced to liquidate the
company. (ABI World, June 22, 2001)

M GROUP: Employs Ernst & Young as Accountants
By order entered on June 8, 2001, the Honorable Judith K.
Fitzgerald entered an order authorizing the debtors, M Group,
Inc., et al. to employ and retain Ernst & Young as accountants
to the debtors.

MONTGOMERY WARD: Final Two-Day HQ Public Auction Starts Today
On June 26 & 27, a major auction will be conducted of the
contents of the Ward's Corporate Tower in downtown Chicago. The
auction, open to the public, will feature 26 floors loaded with
high quality office furnishings, computers, and other office

The Tower was remodeled approximately two years ago, which will
enable bidders to acquire contemporary furnishings in great
condition.  Over 4,000 lots will be offered over a two day
period and will include approximately 500 Mac, IBM and Compaq
computers, a complete video editing suite, 9 executive office
suites, a large inlaid 30 ft. marble conference table, a large
amount of Knoll modular workstations, ergonomic chairs, big
screen TV's, fax machines, copiers, refrigerators, microwaves,
file cabinets and HON bookcases, lobby furniture, and equipment
from the former restaurant located in the Tower.

Richard Reese, President of Rabin Worldwide said, "There is
literally something for everyone. It's a great opportunity for
the public to purchase high quality items at a fraction of their
original price."

The liquidation of Montgomery Wards started last April with the
sale of fixtures, furnishings and equipment from over 240 retail
stores, warehouse distribution centers and product service
outlets. A marathon auction run was conducted with simultaneous
auctions that took place across the United States, all within a
month's period. The Corporate Tower is now the last to go.

Montgomery Ward closed its doors after 126 years of business.
Starting as a mail-order catalog business in 1872, the company
grew to be one of the largest, privately owned retailers in the
United States. Efforts to reformat stores and revitalize
merchandise were not enough to beat sluggish sales, forcing
Wards to finally succumb to fierce competition.

NATIONAL AIRLINES: Carl Icahn Drops Bid for Bankrupt Carrier
Financier Carl Icahn ended his negotiations for bankrupt
National Airlines Inc. after the carrier's board told him that
his $76 million bid was too low. The Las Vegas-based airline
asked Icahn to raise his bid because it was insufficient to
repay administrative expenses incurred since National filed for
chapter 11 protection in Nevada in December, said Ed Weisfelner,
Icahn's attorney. Weisfelner said Icahn will now restart
negotiations with another undisclosed airline that he was
interested in before breaking off talks with National. (ABI
World, June 22, 2001)

NETROM INC: Sets Shareholders' Meetings To Present $3MM Offering
Netrom Inc., (Pink Sheets: NRRM) said it will conduct special
shareholders' meetings to present a private offering of up to $3
million by BigRebate, its recently acquired subsidiary.

The offering will be restricted to accredited investors who are
current shareholders of Netrom Inc. or others who are qualified
under prevailing securities law.

The offering features venture capital level yields -- returning
$3 pre-tax for each $1 invested subject to limitations on lawful
distributions. This high rate of return is made possible by the
exceptional cash flow BigRebate receives from direct sales of
financial products such as life insurance and annuities to
consumers. Historically, the company has achieved more than a
doubling of back-to-back quarterly revenues, with operating
margins in excess of 50%. BigRebate's sales are powered by a
proprietary marketing system that utilizes the latest
technologies in customer resource management (CRM) and direct

This private offering consists of "mandatorily redeemable
convertible preferred stock," an investment vehicle which
management believes ensures investor liquidity regardless of the
condition of the stock market. The company must redeem or
convert the stock by January 2003.

Jim Toreson, CEO of Netrom stated: "We selected this instrument
with the goal of providing the investor with venture capital-
type returns without having to depend on the fluctuations of the
stock market." He further added: "If the market is cooperative
at the time of redemption, the investor will reap additional
gains by converting the preferred stock to common stock, instead
of redeeming it for cash."

Netrom intends to schedule several shareholder meetings to
present this offering and discuss the business, the management
and the details of the securities being offered. The initial
meetings will be held in California, where Netrom has a
significant shareholder base. Attendance will be strictly
limited to invited guests.

This announcement may not be considered and is not intended as
an offer to sell or a solicitation of an offer to purchase
securities of Netrom Inc. or its subsidiary BigRebate. Complete
details of the offering are contained in the company's private
offering prospectus. Distribution of the prospectus will be
limited to certain persons who meet the investment criteria for
the offering. No subscriptions will be accepted without an
executed subscription agreement verifying investor suitability.
Anyone interested in attending these any of these meetings
should contact Ron Clark at: 949/481-7782, fax 208/977-9083, or

Netrom Inc. (Pink Sheets: NRRM), Founded in 1996, is a
development stage company, headquartered in Orange County,
Calif. Since its inception, Netrom has been involved with the
development of technologies that are related to the Internet, as
well as developing new eBusiness models. In the first quarter of
2000 Netrom became insolvent and was forced into a major
reorganization. The company's short-term mission has been to
complete a turnaround of its business, restore trading of its
stock to the OTC BB and fuel the growth of the company through
strategic acquisitions.

NETSILICON: Considers Selling Securities To Raise Needed Funds
NetSilicon Inc. develops and markets embedded Ethernet
networking solutions, which combine advanced microprocessors and
software, to manufacturers building intelligent, network-enabled
devices. The Company commenced its operations in 1984 as Digital
Products, Inc. From inception, it has developed and marketed
networking products for embedded systems that enable the
connection of electronic devices to networks.

Net sales of the Company decreased to $7.0 million for the three
months ended April 28, 2001 from $9.0 million for the three
months ended April 29, 2000, representing a decrease of 22.6%.
The decrease in net sales, according to the Company, was due
primarily to an economic slowdown that has affected its imaging
customers. Revenue from imaging customers decreased to $5.6
million for the three months ended April 28, 2001 from $7.6
million for the three months ended April 29, 2000. Backlog for
products and services was approximately $4.6 million and $9.5
million at April 28, 2001 and April 29, 2000, respectively, all
of which was scheduled to be shipped within 12 months.

The net loss to the Company for the quarter ended April 28, 2001
was $(2,058,400) as compared to a net gain in the same quarter
of 2000 of $780,600.

Prior to NetSilicon's public offering in September 1999, the
Company financed its operations through advances from Sorrento
and borrowings under a short-term bank line of credit. The
Company received proceeds, net of offering costs, of
approximately $22.2 million as a result of the initial public
offering and sale of its stock. At April 28, 2001, the Company
had working capital of $17.0 million and cash and cash
equivalents of $8.0 million.

NetSilicon anticipates that its available cash resources will be
sufficient to meet its presently anticipated capital
requirements through the next 12 months. Nonetheless, the
Company indicates that it may elect to sell additional equity
securities or obtain additional credit. Its future capital
requirements may vary materially from those now planned and will
depend on many factors, including, but not limited to, the
levels at which it maintains inventory and accounts receivable;
the market acceptance of its products; the levels of promotion
and advertising required to launch products or enter markets and
attain a competitive position in the marketplace; volume pricing
concessions; its business, product, capital expenditure and
research and development plans and technology roadmap; capital
improvements to new and existing facilities; technological
advances; the response of competitors to its products; and its
relationships with suppliers and customers.

In addition, NetSilicon may require an increase in the level of
working capital to accommodate planned growth, hiring and
infrastructure needs. Additional capital may be required for
consummation of any acquisitions of businesses, products or
technologies. The company may need to raise additional funds
through public or private financings or borrowings if existing
resources and cash generated from operations are insufficient to
fund future activities. No assurance can be given that
additional financing will be available or that, if available,
such financing can be obtained on terms favorable to its
shareholders, as well as the Company. If additional funds are
raised through the issuance of equity securities, the percentage
ownership of then current stockholders will be reduced and such
equity securities may have rights, preferences or privileges
senior to those of holders of its common stock. If adequate
funds are not available to satisfy short- or long-term capital
requirements, the Company indicates it may be required to limit
its operations significantly.

OWENS CORNING: Settles Patent Dispute With CGI Silvercote
Owens Corning asks Judge Fitzgerald to approve a settlement
agreement between Owens Corning, Owens-Corning Fiberglas
Technology, Inc., and CGI Silvercote, Inc., telling Judge
Fitzgerald that in connection with certain of the Debtors'
business operations, Owens Corning licenses to insulation
contractors and builders a series of machines, known as
Elaminators machines, and methods for installing roofing and
insulation material in buildings. As a leader in this industry,
Owens Corning has developed a significant patent portfolio
related to the basic equipment used in installing roofing and
insulation and numerous improvements to these.

On August 5, 1997, United States Letters patent No. 5,653,081
was duly and legally issued to Owens-Corning Fiberglass
Technology, Inc. Since that tine, OCFT has been and still is the
exclusive licensee of the '081 patent. This patent relates to
the method for paying out an insulation support sheet for use
with an insulated roof structure.

CGI Silvercote, an Ohio corporation, markets itself as a
national supplier of insulation and insulation systems. In
connection with its business operations, Silvercote markets the
"Perfect R" machine, which is designed to install insulation.

In July 1998 the Debtors began a civil action against
Silvercote, currently pending in the United States District
Court for the Northern District of Ohio, wherein the Debtors
alleged that the "Perfect R" machine has been used to infringe
the '081 patent. In this lawsuit, the Debtors requested damages
for Silvercote's infringement of one or more claims of the '081
patent, and that Silvercote be preliminarily and permanently
enjoined from further infringement of the '081 patent. CGI
expressly denied any liability of the claims asserted in this

                The Settlement Agreement

To avoid the cost, delay and risk attendant to litigating the
patent infringement lawsuit, the Debtors and Silvercote have
agreed to a settlement of their dispute, subject only to
approval by this Court, the terms of which are set forth in the
Settlement Agreement. Due to the confidentiality provisions
contained in the Settlement Agreement, the agreement has been
filed under seal.

As part of the Settlement Agreement the parties agreed to enter
a consent judgment and permanent injunction and further agreed
to the publication of a press release. The parties have agreed
to the disclosure of the consent judgment and permanent
injunction and the press release.

The principal terms of the Settlement Agreement provide for: (a)
all claims arising out of the patent infringement lawsuit will
be dismissed with prejudice; (b) Owens Corning will receive a
monetary payment from Silvercote; (c) the parties will mutually
release each other from claims relating to the '081 patent; (d)
the consent judgment and permanent injunction will be entered;
and (e) the press release will be published.

The principal terms of the consent judgment and permanent
injunction are: (a) Silvercote is enjoined, during the life of
the '081 patent, from infringing inducing infringement of, or
contributorily infringing upon any of claims 1-20 of the '081
patent; and (b) Silvercote is enjoined, during the life of the
'081 patent, from using, inducing the use of, or contributing to
the use of "folded facing" in conjunction with any machine,
including Silvercote's "Perfect R" and/or "Deep R" machines, or
machine-assisted process, including Silvercote's "Perfect R"
and/or "Deep R" process.

The Debtors believe that the above-mentioned factors weigh in
favor of approval of the Settlement Agreement because: (a) the
probability of the Debtors' success in litigating the patent
infringement lawsuit is uncertain; (b) certain of the issues in
the patent infringement lawsuit are factually complex and would
require significant litigation between the parties to resolve
with a substantial investment of time and effort, which would
cause the Debtors to incur potentially substantial legal fees,
costs and other expenses; (c) the prompt resolution of this
dispute, without resort to costly litigation, is in the best
interest of the Debtors' estates and its creditors. Moreover,
the Debtors believe that the permanent enjoining of Silvercote
from infringing on the '081 patent and from using "folding
facing" in conjunction with any machine or machine-assisted
process, as provide under the terms of the consent judgment and
permanent injunction, will be significant benefit to the Debtor
and its estates in that it will enable Owens Corning to protect
its patent portfolio in connection with the licenses it issues
to builders and contractors. Under these circumstances, the
Debtors believe that it is prudent to settlement the patent
infringement lawsuit on the terms set out in the Settlement
Agreement. (Owens Corning Bankruptcy News, Issue No. 12;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

PACIFIC GAS: Seeks To Continue Environmental Cleanup Programs
Pacific Gas and Electric Company proposes, without further Court
order, to expend up to $22 million in each calendar year during
the pendency of their chapter 11 case, retroactive to January 1,
2001, to continue its hazardous substance remediation programs
and procedures.  Specifically, the money is to be expended
towards the cost of investigating and responding to instances of
environmental contamination caused by, or alleged to be caused
by, releases from the operations of PG&E or its predecessor

Pursuant to 11 U.S.C. Sections 105(a) and 363, the Debtor seeks
authority to expend the money whether the releases of substances
occurred prior to or occur after the filing of this case,
whether such releases occur on property owned or operated by
PG&E or by third parties, and whether such investigation and/or
response actions are mandated by orders issued by state or
federal environmental regulatory agencies, are required by
third-party agreements, or are initiated by PG&E.

PG&E seeks the Court's authorization to exceed such $22 million
annual limitation, in emergency situations involving new post-
petition releases or threatened releases of hazardous
substances, as necessary. PG&E covenants to seek the Court's
approval of such emergency expenditures at the earliest
practicable time.

The Debtor tells the Court that the Official Committee of
Unsecured Creditors agrees to PG&E's request for authorization
to expend up to $22 million annually.

For several reasons, PG&E believes that it is appropriate for
the Court to grant the relief sought.

First, the law in this area is in many respects unclear. Because
the law in this area is in many cases unclear, PG&E may be
required to expend considerable resources and time defending
itself against proceedings brought by governmental agencies.

It is unclear how the Unites States Court of Appeals for the
Ninth Circuit and Federal Courts within the Ninth Circuit would
approach many of PG&E's hazardous substances cleanup programs in
the bankruptcy context. The law is relatively clear at the
margins, but there is a large gray area in the middle. Thus, the
law strongly suggests that on property owned by the estate and
from which the estate currently derives a benefit, PG&E will be
required to comply with applicable laws and governmental orders
respecting environmental cleanup. With respect to properties not
owned by PG&E from which PG&E derives no benefit, it is unlikely
that PG&E would be required to expend funds towards
environmental cleanup. However, with respect to all other
situations, including non-operational properties owned by PG&E
and even operational properties owned by PG&E where all
contaminants occurred pre-petition, it is uncertain if and to
what extent PG&E would be required to pursue cleanup activities
on such sites.

In addition, it is uncertain whether the automatic provision of
the Bankruptcy Code applies to bar the enforcement of an
injunction requiring a debtor to clean up a site. Under Section
362(a), a bankruptcy petition stays the commencement or
continuation of judicial, administrative or other actions or
proceedings against the debtor. Section 362(b) on the other hand
exempts from this stay any proceeding by a governmental unit to
enforce its police or regulatory power. Also, assuming that an
environmental obligation has been found to be a "claim" under
the Bankruptcy Code, the next question that arises is whether
the claim should be classified as an administrative expense,
which would entitle the claim to be paid before any other
unsecured claims.

Second, because many of PG&E's cleanup programs are the subject
of governmental orders and consent decrees, the failure to
comply with the same could result in fines the treatment of
which in bankruptcy is uncertain. Governmental agencies will
argue that they are exempt from the automatic stay. If such
agencies seek to clean up sites on their own, they may assert
the costs they incur are entitled to administrative expense
priority. The ultimate outcome of these actions is uncertain.

Third, there is a benefit to the estate in avoiding a prolonged
work stoppage at its cleanup sites. A prolonged stoppage may
result in the loss of important consultants and contractors. It
may also increase the costs of cleanup, particularly where the
contamination is migrating. Environmental contamination problems
simply do not go away, sooner or later many of the problems will
have to be dealt with, and they are likely to get more expensive
and difficult to deal with as time goes by, the utility says.

Fourth, the amount of funds for which authorization is sought
(i.e., $22 million annually) is relatively modest. Further,
PG&E's request for authorization to expend up to $22 million
annually in environmental remediation costs has been reviewed
and approved by the Committee.

Fifth and finally, there are obvious social benefits in allowing
PG&E's cleanup activities to continue, including the prevention
of further dispersal of contaminants into the environment,
benefits to the health and safety of the public and to the
environment. Cleaning up the property also minimizes the
potential for a lawsuit from the buyer or subsequent owners of
the property in the future. By cleaning up its non operating
properties, PG&E will be able to sell such properties at a
higher price in the future.

PG&E does not intend to use the authorization granted by the
Court as a mandate to perform all cleanup actions regardless of
the degree to which PG&E is responsible. Instead, cost-
effectiveness will be a factor for consideration in proceeding
with investigations and remedial measures, and the degree of
cleanup actions, the utility notes. However, it will continue to
respond without hesitation to address ongoing acute hazardous
substance exposure risks which may occur at sites for which PG&E
has or shares responsibility, the utility assures.

As legal basis for granting the authorization, PG&E argues that
cleanup activities on operating property owned by the estate
arise in the ordinary course of the Debtor's business and can be
authorized by the Court pursuant to Section 363(b). To the
extent cleanup is conducted on non-operating property owned by
the estate, or on property not owned by the estate on which PG&E
has caused contamination, or with respect to pre-petition
contamination caused by PG&E on owned or unowned property, the
Court can and should grant the requested authorization pursuant
to Section 105(a) and the Court's inherent equitable powers.

In the present case, PG&E tells Judge Montali, it is eminently
sensible and appropriate for the Court to authorize
environmental remediation activities within reasonable dollar
limits. In allowing it to continue its cleanup programs with
minimal interruption, the company not only can avoid
unproductive and lengthy squabbles with governmental agencies
and third parties, it can better control the costs of the
cleanup, PG&E tells the Court. Otherwise, the estate could end
up consuming far more in litigation over environmental matters.

                  PG&E's Cleanup Programs

PG&E has a long history of operations. PG&E or its predecessors
have been in existence since the mid-1850s. Its operations
include or have included manufactured gas plant sites, natural
gas gathering system sites, natural gas compressor station
sites, electric transmission and distribution facilities, steam-
electric power plant sites, hydroelectric power plant sites.
PG&E owns numerous separate parcels of real property and is a
tenant under more than 250 leases.

As a necessary part of it business, PG&E has used and continues
to use a variety of different hazardous materials in a number of
its sites. Given the size and nature of PG&E's business
operations, its long operating history, and the many properties
PG&E owns and leases, the cleanup of sites containing hazardous
substances is an ordinary and recurring part of PG&E's business
and will be for many years to come.

The development of PG&E's hazardous substances cleanup programs
largely parallels, and is in response to, the emergence of
environmental laws which govern the management and cleanup of
hazardous wastes and hazardous substances.

With the promulgation of federal Resource Conservation and
Recovery Act regulations in 1979, PG&E began an overall
examination of its operations to determine which facilities may
contain historic sites of waste disposal. This effort was
intensified in the early 1980s upon discovery of residues from
gas manufacturing operations at two PG&E properties. During the
same period, the promulgation of a major regulatory program
under the Toxic Substances Control Act regarding the use and
disposal of polychiorinated biphenyls ("PCBs") led to PG&E's
implementation of voluntary programs to replace the two major
categories of PCB-containing electrical equipment on its system,
and placed increasing emphasis on the cleanup of releases from
in-service equipment and from historic discharges.

California's regulations regarding testing, upgrading and
cleanup of releases from underground tanks which store hazardous
substances led to a major PG&E program to remove over 500 such
tanks from service, and to conduct investigations and, where
appropriate, remedial actions to mitigate the effects of any
historic leaks or releases from the tanks.

Finally, the development of regulatory programs under the
Federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (commonly referred to as "CERCLA" and the
Federal "Superfund" statute) and similar state statutes enacted
under the California Health and Safety Code have led PG&E to
develop a comprehensive program, operating under state and
federal regulatory oversight, to evaluate known sites of'
historical operations and potential releases, and to perform
remedial measures at sites where necessary to address ongoing or
potential exposure risks.

PG&E maintains a staff of environmental professionals to manage
its hazardous substance cleanup programs. These include
professional engineers, registered geologists, certified
engineering geologists, and personnel with training or
certification in related environmental fields. The large number
of sites involved, as well as the specialized expertise mandated
in site investigations, requires that the PG&E staff serve as
"project managers," setting the technical framework for site
investigations, serving as the liaison with regulatory agencies,
local officials and the public, directing the performance of the
investigations and remedial actions, and managing all aspects of
contracting, budgeting and cost reporting. By and large, PG&E
uses the Services of environmental consulting firms to perform
site investigations, conduct human health and ecological
assessments, and to design and implement any required remedial
measures. From time to time, specialized environmental services
are obtained, such as studies of biological habitat and
development of measures to provide protection of endangered or
threatened species, or forensic analyses of residues to obtain
information on their possible sources.

PG&E's environmental professionals are supported in these
programs by internal PG&E legal counsel, who assist in the
development of environmental policies, provide guidance and
direction on legal and regulatory issues, and manage regulatory
and third-party claims with respect to environmental issues.
Where appropriate, PG&E counsel utilize the services of outside
legal firms to assist in responding to claims.

Sites which present an ongoing exposure risk to human health or
the environment are, of course, given first priority in
investigation and remedial action. PG&E's policy is to provide
full notice to all involved regulatory agencies of the existence
of such sites, and to work cooperatively with the agencies, and
under their oversight, throughout all phases of investigation
and cleanup.

PG&E's approach to hazardous substance cleanup claims made by
third parties is to first ascertain whether it is responsible,
and if yes, to work cooperatively with the claimant in
investigating site conditions and developing a mutually
agreeable plan for remedial actions. Under certain
circumstances, PG&E will agree to share in financing the costs
of investigation and cleanup that meet the requirements of the
overseeing environmental agency, or will agree to a negotiated,
fair and equitable allocation of costs already incurred. In
those instances where an equitable allocation based on currrent
California and federal law cannot be reached, PG&E will litigate
the claim.

      Components of a Typical Site Investigation and Cleanup

Although sites rarely qualify as "typical" in all respects,
there are common study and mitigation elements of a cleanup
program at sites where releases of hazardous substances have

(1) Preliminary Studies

     These are termed "preliminary assessments" or "Phase 1
environmental site assessments" in which site operations are
summarized and the potential for chemical release is evaluated,
spills or other known releases are identified, known disposal
repositions are identified and described, interviews are
conducted with former employees or local officials to determine
the likelihood that a release of a hazardous substance occurred
on the site, and nearby sites of known hazardous substance
releases are identified. These assessments generally include a
review of public documents in the files of environmental
regulatory agencies.

(2) Sampling Of Environmental Media

     The chemical data that forms the core of the site
investigation process is obtained through remedial, or "Phase
2,"investigations, which involve the sampling of environmental
media (soils, sediments, groundwater, surface water, air) to
determine the nature and extent of chemical contamination on a
site. These investigations also require that site hydrologic,
geologic and geochemical conditions are defined, so that the
fate and transport of chemical contaminants can be assessed.

(3) Human Health And Environmental Risk Assessments

     Using data obtained during the remedial investigation, an
assessment may be made of the extent of risk posed by chemicals
present at a site to human health or to ecological receptors,
such as indigenous plant or animal species. These assessments
seek to determine the theoretical increase in the probability of
developing disease from exposure to the chemical at the site
under study. The use of theoretical risk studies to assess the
likelihood of adverse human health effects is widely accepted in
both federal and state regulatory programs. So-called "risk-
based cleanups" represent a scientifically defensible, and
health-protective, means of establishing how "clean" a site must
be made for a given purpose.

(4) Other Specialized Studies

     The investigation of a site may involve the conduct of
highly specialized studies necessary to establish the historical
framework for site responsibility or to ascertain specific data
on biological or cultural resources. Historical studies of all
site operations, as well as site ownership, are often necessary
to determine whether or not, or to what extent, materials
present at a site are the responsibility of PG&E, and whether
operations of others may be responsible for Site conditions.
Forensic chemical analysis is often useful in establishing the
likely origins of hazardous substances, particularly organic
substances. Species diversity and habitat studies help identify
sites where threatened or endangered species issues may arise.

(5) Feasibility Studies

     A feasibility study is a formal evaluation of all
alternatives (including taking no action), which may be employed
at a site to achieve remedial goals. Remedial goals may include
the reduction of human health risk to a level below an
established threshold and/or the reduction in concentration of a
chemical to a level below an adopted standard. The feasibility
study concludes with a description of the recommended remedial

(6) Remedial Action Plans

     A remedial action plan is a conceptual design-level plan for
responding to exposure risks posed by hazardous substances at a
site. When prepared following a feasibility study, a remedial
action plan will be concerned with the recommended remedial
option identified in the feasibility study. In cases where no
feasibility study has been prepared (as in the case of
relatively uncomplicated sites where cleanup is expected to be
below certain statutorily established cost thresholds) a
"remedial action workplan" may be prepared, which combines a
brief analysis of a limited range of remedial measures with the
identification and conceptual design of a preferred alternative.

Remedial action plans are adopted as part of a public notice and
hearing process conducted by environmental regulatory agencies.
Following a public hearing to introduce and receive comments on
a remedial action plan, a formal comment and response period
will commence. At the conclusion of that period, the plan may be
adopted by the agency as a final plan.

(7) Remedial Design Documents

     Upon adoption of a final remedial action plan, a detailed
engineering design must be prepared to implement the approved
remedial measures. In addition, and depending on the types of
remedial measures proposed, workplans may be required for
various elements of the remedial measures, including the
transportation of wastes and materials to or from the site, the
protection of on-site workers and the public during
implementation of the remedial measures, and the monitoring of
ambient air, water or soil during the remedial actions to ensure
that hazardous substances are not dispersed by the remedial

(8) Remedial Actions

     Upon the conclusion of the investigation phase, remedial
measures are implemented in accordance with the approved plans.
The basic remedial options are:

      * containment of hazardous substances to eliminate future
        human health or environmental exposure risks,

      * removal of hazardous substances to an appropriate
        disposal or treatment facility, and

      * treatment of hazardous substances in-situ to reduce their
        quantity, mobility, or toxicity.

(9) Post-Remedial Measures

     Following implementation of remedial measures at a site, a
number of post-remedial actions are generally required. Active
remedial systems, such as groundwater control, extraction and
treatment systems, must be maintained throughout their operating
lives (which can range to 30 years or more). Passive remedial
facilities, such as soil caps or hydraulic slurry walls, must
undergo regular inspections to ensure their continued efficacy.
Groundwater monitoring often must continue at a site, and in the
vicinity of that site, to ensure the containment and/or
reduction of groundwater contamination continues according to
the remedial plans. Access restrictions must be maintained at
sites where such restrictions are a feature of the remedial

       Categories Of Hazardous Substances Cleanup Sites

PG&E's hazardous substances cleanup programs generally involve
sites that can be broadly grouped into the following three

      (1) PG&E-owned sites at which there are active operations;

      (2) PG&E-owned sites at which there are no active
operations; and

      (3) Third-party owned sites.

Pending the Court's hearing and ruling on the Motion, PG&E has
suspended its hazardous materials cleanup programs on properties
falling within the third category referenced above due to the
concern that continuing with such programs may involve the
payment of a prepetition claim and may be deemed not to benefit
the bankruptcy estate.

                  Forecasted Expenditures
          At Hazardous Substances Cleanup Sites

PG&E incurred expenditures of approximately $16 million for its
hazardous substances cleanup programs in calendar year 1999 and
approximately $18.5 million in calendar year 2000. PG&E has
budgeted expenditures of approximately $20.6 million for its
hazardous substances cleanup programs in calendar year 2001, of
which $2.3 million has been spent to date.

As may be expected, the anticipated costs for these programs
overall can be highly variable. Unanticipated discoveries at
sites not currently in the programs, or new claims relating to
formerly owned sites, can add significant costs to a given
year's budget.

Information gathered during site investigations and from
historical or forensic studies can affect dramatically the
degree to which PG&E's operations can be considered to have
resulted in the presence of hazardous materials at a site, and
thus may necessitate a revision of PG&E's estimated cleanup
liability at that site. (Pacific Gas Bankruptcy News, Issue No.
9; Bankruptcy Creditors' Service, Inc., 609/392-0900)

PILLOWTEX CORPORATION: State Farm Presses to Liquidate Claim
Four years ago, a fire struck Mavis Biller's residence in
Snohomish County, Washington.

Lisa C. McLaughlin, Esq., at Phillips, Goldman & Spence, in
Wilmington, relates that the fire was caused by a malfunction in
an electric blanket or, because Fieldcrest Cannon, Inc. or
Sunbeam Corporation failed to warn Ms. Biller regarding how to
properly use the electric blanket.

The blanket was manufactured by Fieldcrest Cannon, Inc. and sold
under its trade name.

State Farm Insurance Companies, which had issued an insurance
policy to Mavis Biller, paid for some damages to Ms. Biller's
real and personal property. State Farm now holds a subrogated
interest in recovering the sums it paid to Ms. Biller. Ms.
Biller had also sustained other damages that were not covered by
her insurance contract.

On January 1999, State Farm and Ms. Biller filed a complaint in
the United States District Court Western District of Washington
at Seattle against Sunbeam. The Federal Court Action seeks
compensatory damages for products liability and breach of
implied warranty of merchantability against Fieldcrest, among
other things. A year later, they amended the complaint to
include Fieldcrest Cannon as a defendant. The amount in
controversy exceeds $75,000 exclusive of interest and costs and
complete diversity exists between the plaintiffs and defendants.

By this motion, State Farm and Ms. Biller ask Judge Robinson to
issue an order granting them relief from the automatic stay for
the limited purpose of liquidating their claims against
Fieldcrest, its insurance companies and the other Defendants,
while the case in Seattle is pending.

State Farm and Ms. Biller understand that Fieldcrest, its
affiliated entities and co-debtors, have sufficient insurance
coverage to defend State Farms' claims.

Ms. McLaughlin relates that State Farm will take no action to
collect against the Debtor and, provided there is sufficient
insurance coverage, will seek to collect only against the
Debtor's insurance companies.

Furthermore, Ms. McLaughlin notes, the Pillowtex Corporation
Debtors do not have any interest in the insurance proceeds since
it can't be used for its reorganization process.

Moreover, Ms. McLaughlin adds, the mere liquidation of State
Farms' and Ms. Biller's claims is a limited remedy that will not
prejudice the Debtors. Until there is some closure to this case,
State Farm and Ms. Biller will continue to suffer hardship.
(Pillowtex Bankruptcy News, Issue No. 8; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

PRIME FINANCE: Fitch Downgrades Lease Securitizations
Fitch downgrades the following classes of securities as follows:

* Prime Finance Corp. 1996-A
      - Class A-3 notes are downgraded from `CCC' to `CC';
      - Class B notes are downgraded from `CC' to `C';

Both classes remain on Rating Watch Negative.

* Prime Finance Corp. 1997-B
      - Class A-4 notes are downgraded from `BBB' to `BB';
      - Class B notes are downgraded from `CCC' to `CC';

Both classes remain on Rating Watch Negative.

* Prime Finance Corporation 1998-A-1
* Prime Finance Corporation 1998-A-2

      - Class A-1 notes are downgraded from `BB' to `CCC';
      - Class A-2 notes are downgraded from `B' to `CC';
      - Class A-3 notes are downgraded from `CCC' to `C';
      - Class A-4 notes are downgraded from `CC' to `C';

All classes remain on Rating Watch Negative.

* Prime Finance Corporation 1999-A-1
* Prime Finance Corporation 1999-A-2

      - Class A notes are downgraded from `AA' to `A';
      - Class B notes are downgraded from `BBB' to `BB';
      - Class C notes are downgraded from `B' to `CC';

All classes remain on Rating Watch Negative.

These rating actions are the result of continuing adverse
collateral performance and deterioration outside of the Fitch
original base case expectations. As mentioned in previous press
releases, Fitch did not receive servicing reports for four
consecutive months during the transfer of servicing to US Bank
Portfolio Services.

Upon receipt of the first servicing report since the completion
of the transfer, Fitch was disturbed to note serious collateral
deficiencies resulting in a dramatic loss of credit enhancement.
Despite efforts to identify and resolve collateral shortfalls,
overall performance has not improved. Fitch will continue to
closely monitor these notes and may take additional rating
action in the case of further deterioration.

PSINET INC.: Asks Court to Continue Using Current Business Forms
In order to minimize expenses to the estate, the PSINet, Inc.
Debtors request that they be authorized to continue to use all
correspondence, checks and business forms (including, but not
limited to, letterhead, purchase orders, and invoices) existing
immediately prior to the Petition Date, without reference to the
Debtors' status as Debtors in Possession.

Parties doing business with the Debtors undoubtedly will be
aware, the Debtors observe, as a result of the size and
notoriety of the PSINet Chapter 11 cases, of the Debtors' status
as Chapter 11 Debtors in Possession. Changing correspondence and
business forms would be unnecessary and burdensome to the
Debtors' estates and expensive and disruptive to the Debtors'
business operations, the Debtors argue. For these reasons, the
Debtors request that they be authorized to use existing checks
and business forms without being required to place the label
"Debtors in Possession" on each form or check. (PSINet
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

RELIANCE GROUP: Moves To Retain Ordinary Course Professionals
Prior to the petition date, Reliance Group Holdings, Inc.
employed many professionals in the ordinary course of business.
These services provided include documentation of financing
transactions, asset acquisition activities, construction
monitoring, servicing of loans and leases and preservation of
collateral and owned assets. The professionals will be required
throughout the Chapter 11 proceedings. The amount of fees and
expenses incurred by such professionals represents only a small
fraction of the value of the estates, while their work, even
though ordinary course, is directly related to the preservation
of such value. Pursuant to sections 105(a) and 327, RGH seeks
authorization to retain and compensate ordinary course
professionals without the necessity of formal retention motions
and fee applications.

It would severely hinder the administration of the estate if RGH
were required to submit applications, affidavits and retentions
for each ordinary course professional, wait until the order is
approved and then, withhold payment until the professionals
comply with reimbursement procedures applicable to Chapter 11
professionals. There is a risk that some professionals would
suspend services under such conditions. In addition, the process
would burden the related offices of the bankruptcy establishment
that RGH must answer to.

Steven R. Gross, Esq., at Debevois & Plimpton, says that in many
instances it is not clear who qualifies as a "professional." It
uses a host of service providers that perform jobs including
environmental assessment, actuarial consulting, survey,
auditors, translators, IT service providers, sales and leasing
agents, appraisers, public relations firms and the like. The
sheer number of service providers presents problems. RGH asks
that if it is unclear whether any is considered an ordinary
course professional, they be retained and paid in the ordinary
course of business.

The professionals listed in the filing are:

      * AON Consulting-pension plan consulting services and
        administration of flexible spending account;

      * Dewey Ballantine-legal services relating to employee
        benefit plans;

      * Gavin Anderson & Company-public relations services;

      * Jackson Lewis Schnitzler & Krupman-legal services in
        connection with various employment termination disputes;

      * Paul, Weiss, Rifkind, Wharton & Garrison- legal services
        in connection with various litigation matters; and

      * Resource Connections-accounting consultancy services.

RGH recognizes that the requested limitation amounts exceed
those approved in other cases, but states that this case is
unique, in that it is one of the largest filed in the history of
the United States. However, such procedures are not unusual
given the size of RGH's estates and the magnitude of its
business. Similar relief has been granted in other large
bankruptcy cases around the country. (Reliance Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900)

ROBERDS, INC: Seeks to Extend Exclusive Period To December 11
Roberds, Inc., debtor, seeks an order further extending the
periods during which the debtor has the exclusive right to file
a plan of reorganization and the exclusive right to solicit
acceptances of a plan.

The debtor requests that the Exclusive Filing Period be extended
for a 120 day period through and including December 11, 2001,
and the Exclusive Solicitation Period be extended to February
11, 2002.

The debtor believes that it may be able to file a plan within
the next 120 days. At first the debtor closed stores in Florida
and Cincinnati. After trying to formulate and implement a
business plan focusing on its remaining locations, the debtor
concluded that it should immediately commence a plan of
liquidation for its remaining assets to preserve the value of
its assets. The debtor then close remaining stores in Georgia,
Indiana and Ohio and court appointed liquidator conducted going-
out-of-business sales at those locations. Subsequently,
remaining real property leases and owned real property were
offered for sale at public auction. Closings for sales of
several real property sites have not yet been held.

Several preference actions have already been filed by the
debtor. Other assets are being pursued, such as money due from
Hilco Retail Trading, LLC as liquidators in this estate and
monies due from vendors on credit memoranda, on claims against
Lumbermens Mutual Casualty Co. relative to a certain insurance
policy, and on certificates of deposit possible held as security
deposits for state obligations of the debtor. In addition,
Debtor is dealing with administrative claim issues, warranty
service contract issues, and employee medical plan issues.
Consequently, the facts necessary to develop a plan are not yet
fully known. In addition the debtor states that it is premature
for a plan to be formulated and filed in the immediate future,
as the debtor does not have sufficient funds on hand at this
time to pay administrative expenses on the Effective Date.

SWT FINANCE: Moody's Cuts Senior Sub Note Rating to Caa2
Moody's Investors Service downgraded the ratings of SWT Finance
B.V. (Netherlands) and most operating subsidiaries.

The rating agency said that the downgrade is based on the
company's tight financial standing, especially its weak interest
coverage as well as the marginal flexibility provided by the
covenant structure.

In view of the slow and uncertain economic environment, strong
competition as well as the cyclical, mature and highly
fragmented nature of WT's markets, the return to more
comfortable performance levels might be difficult to achieve,
Moody's said.

The ratings downgraded are as follows:

      * Senior Subordinated Notes guaranteed by the parent
        company Weigh- Tronix, LLC (WT) to Caa2 from Caa1

      * Senior Implied Rating for the parent company Weigh-Tronix
        LLC to B3 from B2

      * Issuer Rating of Weigh-Tronix LLC to Caa1 from B3

The outlook for the ratings is negative and approximately $90
million of debt securities are affected.

Moody's stated that the negative outlook reflects the company's
considerable challenges to deliver its forecasted performance
improvements and remain covenant compliant.

The ratings take into consideration certain positive signs
including an increasing order book, announced capital
expenditure programs by the UK retail industry, as well as the
positive feed back for WT's newly launched product line despite
weakening economic trends, Moody's said

Weigh-Tronix's major markets are the United Kingdom, North
America and to a lesser extent Continental Europe. Weigh-Tronix
is the guarantor and parent company of SWT Finance B.V.,
headquartered in Providence, RI.

TELEGEN CORP.: Needs To Raise Capital To Sustain Operations
Telegen Corporation, through its subsidiary and predecessor
corporation, Telegen Communications Corporation, was organized
and commenced operations in May 1990. From inception until 1993,
Telegen was principally engaged in the development and testing
of its telecommunications products. Telegen's first product
sales and revenues were realized in 1991. Revenues from 1991
through 1995 were derived primarily from sales of Telegen's
telecommunications products. In 1996, revenues were derived
primarily from the operations of Morning Star Multimedia, Inc.,
then a subsidiary of the Company. In 1997, revenues were derived
from the operations of Morning Star Multimedia, Inc. and Telegen
Communications Corporation, a subsidiary of the Company. In
1998, revenues were derived from the operations of Telegen
Communications Corporation. In 1999, 2000, and during the first
quarter of 2001, Telegen had no operating revenues.

Telegen has incurred significant operating losses in every
fiscal year since its inception, and, as of March 31, 2001, had
an accumulated deficit of $37,151,058. As of March 31, 2001,
Telegen had $2,805,542 in working capital.  Telegen expects to
continue to incur substantial operating losses through 2001. In
order to become profitable, Telegen must successfully develop
commercial products, manage its operating expenses, establish
manufacturing capabilities, create sales for its products and
create a distribution capability.

Telegen has made significant expenditures for research and
development of its products. In order to become competitive in a
changing business environment, Telegen must continue to make
significant expenditures in these areas. Therefore, Telegen's
operating results will depend in large part on development of a
revenue base.

Telegen's future capital requirements will depend upon many
factors, including the extent and timing of acceptance of
Telegen's products in the market, the progress of Telegen's
research and development, Telegen's operating results and the
status of competitive products. Additionally, Telegen's general
working capital needs will depend upon numerous factors,
including the progress of Telegen's research and development
activities, the cost of increasing Telegen's sales, marketing
and manufacturing activities and the amount of revenues
generated from operations. Although Telegen believes it will
obtain additional funding in 2001, there can be no assurance
that Telegen will be able to obtain such funding or that it will
not require additional funding, or that any additional financing
will be available to Telegen on acceptable terms, if at all, to
meet its capital demands for operations. Telegen believes it
will also require substantial capital to complete development of
a finished prototype of the flat panel display technology, and
that additional capital will be needed to establish a high
volume production capability. There can be no assurance that any
additional financing will be available to Telegen on acceptable
terms, if at all. If adequate funds are not available as
required, the results of operations from the flat panel
technology will be materially adversely affected.

Telegen does not have a final estimate of costs nor the funds
available to build a full-scale production plant for the flat
panel display and will not be able to build this plant without
securing significant additional capital. Telegen plans to secure
these funds either (1) from a large joint venture partner who
would then be a co-owner of the plant or (2) through a future
public or private offering of stock. Even if such funding can be
obtained, which cannot be assured, it is currently estimated
that a full-scale production plant could not be completed and
producing significant numbers of flat panel displays before
early 2003. Telegen is also currently contemplating entering
into license agreements with large enterprises to manufacture
the displays. The manufacturers would also have the attributes
of established manufacturing expertise, distribution channels to
assure a ready market for the displays and established
reputations, enhancing market acceptance. Further, Telegen might
obtain front-end license fees and ongoing royalties for income.
However, Telegen does not currently expect to have any such
manufacturing license agreements in place before 2002, or any
significant production of displays thereunder before early 2003.

Telegen is currently planning to establish a limited
production/prototype line in early 2002, which will have the
capacity to manufacture a limited number of marketable displays
to produce moderate revenues. The cost of that production line
is estimated to be about $10 million.

Telegen's future capital infusions will depend entirely on its
ability to attract new investment capital based on the appeal of
the inherent attributes of its technology and the belief that
the technology can be developed and taken to profitable
manufacturing in the foreseeable future. Telegen's actual
working capital needs will depend upon numerous factors
including the progress of Telegen's research and development
activities, the cost of increasing Telegen's sales, marketing
and manufacturing activities and the amount of revenues
generated from operations, none of which can be predicted with

Telegen anticipates incurring substantial costs for research and
development, sales and marketing activities. Management believes
that development of commercial products, an active marketing
program and a significant field sales force are essential for
Telegen's long-term success. Telegen estimates that its total
expenditures for research and development and related equipment
and overhead costs will aggregate over $7,000,000 during 2001.

Telegen estimates that its total expenditures for sales and
marketing will aggregate over $1,000,000 during 2001. Telegen
has had no revenues since the year ended 1998. The Company has
been engaged in lengthy development of its flat panel display
technology since 1995 and has incurred significant operating
losses in every fiscal year since its inception. The cumulative
net loss for the period from inception through March 31, 2001 is
$37,151,058. The Company will continue to incur operating losses
through 2001. In order to become profitable, the Company must
successfully complete development of its HGED flat panel display
technology, develop new products, establish a volume production
line, successfully market and sell its display products, expand
its distribution capability and manage its operating expenses.
There can be no assurance that the Company will meet and realize
any of these objectives or ever achieve profitability.

TOWER RECORDS: Optimistic Despite Moody's Downgrade
MTS, Incorporated dba Tower Records announced its confidence in
the strategic initiatives it has undertaken to increase long
term profitability, reduce working capital and increase cash

Following Moody's downgrading of the company's senior
subordinated notes to Ca, based on uncertainty about the
company's ability to sustain adequate operating liquidity during
the fourth calendar quarter of 2001, as well as current weakness
in the music retailing segment, Tower Records' President and
CEO, Michael Solomon said, "In our most recent filing with the
Securities and Exchange Commission, we were encouraged to report
revenue stability for the quarter ended April 30, 2001 at a time
when the revenue trend in retail is down. We are on-target with
our restructuring plan and continue to execute the redeployment
strategy endorsed by our board of directors late last year. We
expect positive contributions from that strategy in the quarters

Tower Records' restructuring plan focuses on a set of strategic
initiatives designed specifically to streamline operations,
reduce working capital and increase the company's long term
profitability, performance and cash flow. Since the plan was
implemented, the company has closed several under performing
stores and lowered its operating costs by addressing a number of
inefficiencies in its operations.

The company further confirmed its commitment to improved
inventory management and planning with the implementation of a
new inventory management system developed by Nordic Information
Services. In addition, Tower Records has adopted an auto
replenishment system designed to increase customer selection and
improve inventory turns and profit margins. The company believes
that implementation of these new systems is integral to its
business strategy and its on-going dedication to cater to the
musically diverse and ever changing tastes and demands if its

Tower successfully extended its credit facility on April 23,
2001 for a period of one year. The amended credit facility
initially provides the company with available borrowings of
approximately $225 million, which amount will decline by $15
million in each of July and October 2001 and by an additional
$95 million in December 2001. The company confirmed that it is
actively seeking further external financing to reduce the
principal balance under the credit facility in accordance with
the terms of the amended credit facility.

As part of the retailer's plan to restructure global operations,
the company currently reports that it is negotiating the sale of
its operations in Argentina, Taiwan and Hong Kong. In order to
deplete net operating losses in these territories, the company
intends to spin off these operations to local investors,
enabling the conversion of eight international stores to
franchise locations.

Tower Records' President and CEO, Michael Solomon, also
commented on the retailer's share of the market, which, "has
remained stable at 4% over the last three years." He added, "We
believe that Tower continues to hold its own and we are
encouraged by a more promising album release schedule starting
in June, which we anticipate will favorably impact sales."

Since 1960 Tower Records has been recognized throughout the
world for its unique brand of retailing and music community.
Founded in Sacramento, California the company's growth over four
decades has made Tower Records a household name across the

As of April 30, 2001, the company owns and operates 187 stores
worldwide. The organization opened one of the first Internet
music stores on America Online in June 1995 and followed a year
later with the launch of Relaunched late last
summer with an emphasis on search, selection, simplicity and
service, the site was named "Best Music Commerce Site" by
Forrester Research in Fall 2000. Tower Records and partnerships include Muze, AOL, Yahoo, Liquid
Audio and Student Advantage. Tower Records maintains it
commitment to providing the deepest selection of packaged
entertainment in the world.

WARNACO GROUP: Paying $2,000,000 to Foreign Vendors
The Warnaco Group, Inc. seeks a Court order authorizing Warnaco
Canada to pay certain pre-petition obligations incurred for
goods and services, accrued advertising, license fees and
royalties, utilities, freight and shipping, obligations to real
and personal property leases, taxes and fees owed to
governmental authorities, etc.

The term "foreign vendors" specifically excludes the claims of
the Pre-Petition Lenders and the claims of creditors of Warnaco
Canada who have rights under any Letters of Credit or Trade
Acceptances issued by such Pre-Petition Lenders. Payments under
this motion are limited to $2,000,000 -- which represents the
Debtors' current estimate of the claims of the foreign creditors
to be paid under this motion. Furthermore, checks issued post-
petition as payments under this motion to trade creditors or
vendors shall be condition upon the agreement of the foreign
creditor to continue to provide goods and services to Warnaco
Canada on normal and customary credit terms or such other terms
and conditions as are acceptable to Warnaco Canada. The
authorization to make payments under this motion shall not
obligate the debtors to pay any particular claim, and the
Debtors shall retain the discretion to condition the payment of
pre-petition claims of foreign creditors upon such other terms
as the Debtors deem in the best interests of the estates.

This relief, the Debtors note, will place Warnaco Canada
creditors on the same footing as foreign creditors of all of
Warnaco's non-debtor foreign subsidiaries. Warnaco Canada does
not believe that it can rely solely on the automatic stay to
protect its assets and operations from actions in foreign
jurisdictions. Many foreign courts don't recognize the automatic
stay under U.S. bankruptcy law. Paying a mere $2,000,000 of
prepetition claims, the Debtors suggest, will avert substantial
delay, added expenses and confusion created by efforts to
enforce the provisions of the Bankruptcy Code against Foreign

Absent payment of pre-petition claims owing to foreign
creditors, the Debtors caution, Warnaco Canada's foreign
business operations could be severely disrupted. Foreign
suppliers of goods and service may refuse to engage in any
further transactions with Warnaco Canada or potentially, with
the other Debtors or Warnaco's non-filed foreign subsidiaries.
certain foreign creditors may assert reclamation claims with
respect to goods shipped to Warnaco Canada pre-petition or may
stop goods in transit which were ordered pre-petition but which
had not been delivered to Warnaco Canada as of the Petition
Date. Moreover, Warnaco Canada will be at risk that the foreign
creditors will seize or impound assets within their respective
jurisdictions and seek to invoke civil or criminal penalties
against Warnaco Canada and their employees and agents in the
area. The operations and management of Warnaco Canada are
integrated with both the U.S. operations of Warnaco as well as
certain of the other foreign operations of Warnaco's non-debtor
foreign subsidiaries (including in particular, Hong Kong).
Disruption to Warnaco Canada's business whether through the
potential actions of Warnaco Canada's non-US creditors or
otherwise would be harmful to Warnaco's operations as a whole,
both in the US and elsewhere.

The Debtors estimate that the pre-petition trade payable owing
by Warnaco Canada to foreign creditors on the Petition Date will
not exceed $400,000. That amount is de minimis in the context of
these chapter 11 cases. (Warnaco Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

WASHINGTON GROUP: Asks Court To Establish August 15 Bar Date
Washington Group International, Inc. and certain of its
subsidiaries and affiliates seeks entry of an order establishing
August 15, 2001 as the last date for all holders of Impaired
Claims to file proofs of claim in the Chapter 11 cases.

The debtors have a prenegotiated plan providing that the Bank
Group will receive 100% of the equity of the reorganized debtors
and that most creditors, including substantially all of the
debtors' vendors, suppliers and subcontractors on go-forward
projects, will be unimpaired and, thus, be unaffected by the
Chapter 11 cases. The prenegotiated plan further provides that
the debtors will fund a liti8gtion trust to pursue litigation
commenced against Raytheon in the District Court for the fourth
Judicial District of the State of Idaho with $20 million, and
that the net proceeds from the Raytheon Litigation will be used
to pay recoveries to impaired creditors, which creditors will
include the holders of the Senior Notes. In order to quickly
emerge from Chapter 11, the debtors ask that the court approve
August 15, 2001 as the Bar Date.

WINSTAR COMMUNICATIONS: Retains Nixon Peabody As Special Counsel
Winstar Communications, Inc. sought and obtained an order to
retain and employ Nixon Peabody LLP as their special real estate

Nixon Peabody will charge the Debtors a 10%-discounted hourly
rates (from their standard rates) ranging from:

      $385 to $285 per hour - Partners
      $290 to $185 per hour - Counsels and Associates.

But the paralegals' rate charged is the standard rate of $100 to
$130 per hour. The rates will be adjusted from time to time.
Nixon Peabody will also be reimbursed for all expenses and
charges incurred while they are representing the Debtors, such
as: travel costs, telecommunications, express mail, messenger
service, photocopying costs, document processing, temporary
employment of additional staff, overtime meals, court fees,
transcript costs, etc. Nixon Peabody intends to apply to the
Court for allowance of compensation and reimbursement of

Nixon Peabody's services to the Debtors will include, but not
limited to:

      (a) Performing legal services and advice relating to real
estate law;

      (b) Providing general real estate advice concerning the
Debtors' numerous leases;

      (c) Providing general real estate advice concerning any
other real estate assets of the Debtors or other real estate
matters involving the Debtors; and

      (d) Performing all other legal services, as requested by
the Debtors, which may be necessary and proper in furtherance of
the foregoing duties.

Before Winstar's filing of Chapter 11 cases, Nixon Peabody had
been representing the Debtors since March 1998 and its attorneys
are already familiar with the Debtors' business operations and
affairs. Last year, Nixon Peabody received $417,971.79 from the
Debtors for compensation for legal services, disbursements, and
charges. Debtors still owe Nixon Peabody a total amount of
$100,788.31 for pre-petition fees, disbursements and charges.

Nixon Peabody intends to work closely with the Debtors' other
attorneys to ensure that there will be no duplication of
services performed or charged to the Debtors' estates.

Richard F. Langan, Jr., an attorney of the Nixon Peabody law
firm, assures Judge Farnan that Nixon Peabody does not hold or
represent any interest adverse to the Debtors in respect of the
matters for which Nixon Peabody is to be employed.

Nixon Peabody discloses they may have represented or currently
representing claimants or security holders of the Debtors in
matters totally unrelated to these Chapter 11 cases. These
clients are: ABN-AMRO Bank, Advanced Communications Group,
Alliant Capital, Allstate Life Insurance Company, Arthur
Andersen, AT&T, AT&T Systems Leasing Corp., AT&T Credit Corp.,
CIT Small Business Lending Corp. (formerly known as AT&T Small
Business Lending Corp.), Bank of Montreal, Bank of New York,
Bank of Nova Scotia, Bell South, Bell South Enterprises Inc.,
Blackstone Benefit Corp., Blackstone Realty, Blackstone Arms
Associates, Blackstone Webbing Inc., Ceragon Networks Ltd., CIBC
World Markets, Citibank N.A., Citibank Midwestern, Citicorp
North America Inc., Citizens Telecommunications Company, Compaq,
Credit Suisse First Boston, Dominion Magnesium, Dominion Capital
Corp., Toronto-Dominion Bank, Nesbitt Thompson Inc./RBC Dominion
Securities Inc., Dominion Energy, United Dominion Industries,
Old Dominion Enterprises, Earthlink, Eaton Vance Management,
Enron, Fidelity Investments, Fleet National Bank, Fleet Bank of
Maine, Fleet Securities, Fleet Bank of New York, Fleet Services
Inc., Fleet Bank M.A.D., Fleet Financial Group, Fleet Boston
Financial Corporation, Fleet Capital Corporation, Fleet Credit
Corporation, Fleet National Bank Private Banking, Fleet National
Bank of Boston, Fleet Management and Recovery Corp., Fleet PGC-
Termination Unit, Fleet Bank-ESOP, Frontier Communications of
Minnesota, General Electric Capital Corp., General Electric
Company/GE Corporate Research and Development, General Electric
Company, General Electric Plastics, General Electric Power
Systems, General Electric Capital Asset Management Corp., Caribe
GE Puerto Rico Ops., General Electric Credit Corp., Genuity,
Global Crossing, Asia Global Crossing, Global Communications,
GTC Inc., GTE Service Corp., GTE Realty Corp., GTE Spacenet,
General Telephone and Electronic, GTE Government Systems Corp.,
IBM Credit Corp., IBM Corp., IBM (EDC), Island Telephone,
Interstate Fibernet, Lucent Technologies, Massachusetts Mutual
Life Insurance Company, Merita Bank PLC New York Branch, Merrill
Lynch & Co., Merrill Lynch Relocation Management Inc., Merrill
Lynch Pierce Fenner, Merrill Lynch Bank & Trust, Metromedia
Fiber Network Service, Metromedia Inc., Metromedia Paging
Services Inc., Microsoft Corp., J.P. Morgan & Co., J.P. Morgan
Securities Inc., Chase Manhattan Bank, Chase Regional Bank,
Chase Home Mortgage Corp., Chase Manhattan Mortgage Corp., Chase
Securities Inc., Chase Miscellaneous Trust Accounts, The
Committee of Bondholders of Chase REIT, Chase Middle Market,
Chase Manhattan Common Trust Funds, Chase Manhattan Leasing Co.,
Chase Real Estate Finance, Chase Manhattan Bank of Florida, NA,
CME N.A. Equity Loan Closing Home Equity Credit Acquisition,
Chase Small Business Retainer, Morgan Stanley Dean Witter, IBS
International Corp., Oppenheimer Funds, Oppenheimer & Company
Inc., Oppenheimer Funds Distributor Inc., Oppenheimer Holdings
Inc., PriceWaterhouseCoopers, Qwest, Royal Bank of Canada,
Shearman & Sterling, Siemens Power Ventures Inc., Siemens Power
Ventures-Brooklyn Project, Siemens Electromechanical Components
Inc., Siemens Information and Communication Networks Inc., SNET,
Societe Generale, Southwest Bell, Southwestern Bell
Communications Services-Rhode Island, Southwestern Bell Mobile
Systems Inc., Southwestern Bell Communications Services-
Connecticut Inc., Southwestern Bell Communications-Vermont Inc.,
Southwestern Bell Communications-Maine Inc., Southwestern Bell
Communications Service, Sprint Spectrum, Sprintcom, Sprint Inc.,
Sumitomo Corp., Time Warner, Telemedia Fund LLC, TMI Associates,
Toronto-Dominion Bank, Triangle Telephone, UBS Warburg, Union
Bank of Switzerland, Paine Webber, Van Kampen American Capital,
Verizon, Upstate Cellular Network Utica Rome, Syracuse SMSA Ltd
Partnership, Upstate Cellular Network NY RSA, Upstate Cellular
Network Buffalo, New York RSA 2 Cellular Partnership, NYNEX
Mobile of NY IP (Elmira), Binghamton MSA Ltd Partnership, St.
Lawrence Seaway RSA, PA-S2, Pennsylvania 4 Sector 2 Ltd.
Partnership, NY RSA #3 Cellular Partnership, Verizon Capital
Corp., Verizon New York Inc., Weil Gotshal & Manges, Wilkie Farr
& Gallagher, Williams Communications Solutions Inc., Worldcom
Inc., and Young Conaway Stargatt & Taylor.

Nixon Peabody is conducting a continuing inquiry into any
matters, which would affect the firm's disinterested status. In
the event additional disclosure is necessary, Mr. Langan
promises to file a supplemental affidavit. (Winstar Bankruptcy
News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-

WORLD AIRWAYS: Shares Face Delisting From Nasdaq Market
World Airways, Inc. (Nasdaq: WLDA) has been notified by Nasdaq
that its common stock has not maintained a closing bid price of
$1.00 for thirty consecutive trading days as required by a
Nasdaq SmallCap Market rule. According to Nasdaq, World Airways
needs to meet the $1.00 price requirements within 90 days (by
September 18, 2001). If the closing bid price for the stock is
$1.00 for ten consecutive trading days anytime before September
18, 2001, Nasdaq will determine if compliance with continued
listing requirements has been achieved. If by September 18,
2001, the Company is unable to demonstrate compliance, and has
not requested a hearing before Nasdaq on a proposed delisting,
the stock will be delisted from the SmallCap Market. In such a
case, the Company will seek to be listed on the OTC Bulletin

Hollis Harris, World Airways Chairman and CEO said, "The
economic downturn and its impact on the stock market has
affected many companies, and World Airways' stock is no
exception. However, we remain confident that we will make a
profit in the third and fourth quarters of 2001."

Utilizing a well-maintained fleet of international range, wide-
body aircraft, World Airways has an enviable record of safety,
reliability and customer service spanning 53 years. The Company
is a U.S. certificated air carrier providing customized
transportation services for major international passenger and
cargo carriers, the United States military and international
leisure tour operators. Recognized for its modern aircraft,
flexibility and ability to provide superior service, World
Airways meets the needs of businesses and governments around the


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

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

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

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


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

Troubled Company Reporter is a daily newsletter co-published by
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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