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        T R O U B L E D   C O M P A N Y   R E P O R T E R

              Friday, July 6, 2001, Vol. 5, No. 131

                            Headlines

360NETWORKS INC.: Retains Willkie Farr As Bankruptcy Counsel
AMF BOWLING: S&P Drops Senior Unsecured Debt Rating to D
AMRESCO INC.: Fitch Cuts Senior Sub Debt Rating to D From CCC
BETHLEHEM STEEL: Lenders Grant Waiver of Net Worth Covenant
BRIDGE INFORMATION: Proposes Second Severance & Retention Plan

CABLEVISION S.A.: S&P Junks Short-Term Ratings
CARDIAC CONTROL: Now Known As Renaissance Acceptance Group, Inc.
CHROMATICS COLOR: Falls Short Of Nasdaq's Listing Requirement
COHO ENERGY: Intends To Sell Position In Tunisia For $7 Million
COPYTELE, INC.: Appeals Nasdaq Compliance Ruling

CORNERSTONE FAMILY: S&P Lowers Bank Loan Rating to B+ From BB-
DIMAC MARKETING: Explores Strategies & Considers Selling Assets
E-SYNC NETWORKS: Securities Face Delisting From Nasdaq
EMPIRE OF CAROLINA: Sells All Toy Operations To Alpha Int'l
FIRST WAVE MARINE: Files Plan of Reorganization in S.D. Texas

FRUIT OF THE LOOM: Committee Serves Notices Of Rule 2004 Exams
GENESIS HEALTH: Files Revised Chapter 11 Plan
GLOBAL TELESYSTEMS: Gives Update On Recapitalisation Programme
ICG COMMUNICATIONS: Settles Disputes With Preferred Noteholders
ILM I LEASE: Court Gives Go Ahead For Liquidation & Dissolution

IMPROVENET, INC.: Shares Kicked-Off Nasdaq National Market
INDUSTRIAL RUBBER: Now Trades on OTCBB After Nasdaq Delisting
LAIDLAW INC.: Paying Prepetition Employee Obligations
LERNOUT & HAUSPIE: Belgium Creditors Approve Plan To Sell Assets
LERNOUT & HAUSPIE: Selling Mendez to Lionbridge For $27 Mil Cash

METRICOM INC.: S&P Slashes Ratings to D In Wake Of Bankruptcy
LOEWEN GROUP: Settles Aniss Cherkaoui's Sales Commission Claims
MEDCOM USA: Nasdaq Delists Shares From Trading
MESA OFFSHORE: PCX Equities Delists Units
MICROLOG CORPORATION: Receives Nasdaq's Notice of Delisting

MICROS-TO-MAINFRAMES: Shares Face Delisting from Nasdaq
N2H2 INC.: Requests Nasdaq Hearing Regarding Delisting of Shares
NETZERO INC.: Shares Subject To Delisting From Nasdaq Market
NEXTWAVE TELECOM: BFD Capital Extends US$200 Million DIP Loan
ORGANIC, INC.: Appeals Nasdaq Delisting Determination

OWENS CORNING: Court Dismisses Suit Against Tobacco Industry
PACIFIC GAS: Asks Court To Extend Exclusive Period To December 6
PRO NET: Files Chapter 7 Petition in S.D. New York
PRO NET: Case Summary & List of Creditors
PSINET INC.: Moves To Pay Global Crossing's Prepetition Claim

SERVICE MERCHANDISE: Removal Period Extended to Jan. 31, 2002
SITEL CORPORATION: S&P Downgrades Ratings To Low-B's
SUN HEALTHCARE: Wants to Divest Two THCI Facilities
TCPI, INC.: Files Chapter 11 Petition in S.D. Florida
UNIVERSAL AUTOMOTIVE: Nasdaq Plans To Delist Shares On July 9

US DIAGNOSTIC: Fails to Make $10 Million Payment Under Notes
USG CORPORATION: Court Okays Continued Use of All Business Forms
VLASIC FOODS: Taps Arthur Andersen As Internal Auditors
WARNACO GROUP: Moves To Establish Reclamation Claims Program
WASTE SYSTEMS: Terminates Public Company Status

WASTE SYSTEMS: Completes Sale of New Hampshire Transfer Station
WINSTAR COMMUNICATIONS: Rejecting Seven Executory Contracts

BOOK REVIEW: AS WE FORGIVE OUR DEBTORS: Bankruptcy and Consumer
              Credit in America

                            *********

360NETWORKS INC.: Retains Willkie Farr As Bankruptcy Counsel
------------------------------------------------------------
Since 1997, Willkie Farr & Gallagher has been among 360networks
inc.'s regular outside counsel providing corporate, tax and
regulatory services.  In May 2001, the Debtors contacted WF&G to
assist in negotiating and implementing a debt restructuring and,
if necessary, to file cases under chapter 11 of the Bankruptcy
Code. Ultimately, the Debtors' out of court restructuring
efforts proved unsuccessful and the Debtors determined the most
prudent course of action was to file these cases.  Accordingly,
the Debtors expanded the scope of WF&G's services to include the
preparation of and, subject to entry of an order approving the
retention of WF&G, the prosecution of these chapter 11 cases.

By this Application, pursuant to 11 U.S.C. Sec. 327(a) as
modified by 11 U.S.C. Sec. 1107(b), the Debtors seek to employ
Willkie Farr as their attorneys (subject to the allocation of
assignments among co-counsel) to:

       (1) provide advice, representation, and preparation of
           necessary documentation regarding financing,
           securities law, real estate, employee benefits,
           business and commercial litigation, tax, debt
           restructuring, bankruptcy and, if requested, asset
           dispositions;

       (2) take all necessary actions to protect and preserve the
           Debtors' estates during the pendency of their chapter
           11 cases, including the prosecution and defense of
           actions in which the Debtors are parties, negotiation
           concerning all litigation in which the Debtors are
           involved, and prosecution of objections to claims
           filed against the estates;

       (3) prepare necessary motions, applications, answers,
           orders, reports and papers in connection with the
           administration of these chapter 11 cases;

       (4) assist in the negotiation and preparation of a plan of
           reorganization and accompanying disclosure statement;

       (5) counsel the Debtors with regard to their rights and
           obligations as debtors in possession; and

       (6) perform all other necessary legal services.

Alan J. Lipkin, Esq., and Shelley C. Chapman, Esq., lead the
engagement from Willkie Farr's New York office.

WF&G will bill for its legal services on an hourly basis.  The
WF&G attorneys that are likely to represent the Debtors in these
cases, Mr. Lipkin related, charge between $265 and $615 per hour
and the paralegals that likely will assist the attorneys bill
$100 per hour.

Mr. Lipkin discloses that WF&G received a $500,000 retainer in
contemplation of these chapter 11 cases.

Mr. Lipkin is convinced that WF&G is a "disinterested person" as
that term is defined in 11 U.S.C. Sec. 101(14) and is unable to
identify any actual or potential conflict of interest.

Nevertheless, in the interest of full disclosure, Mr. Lipkin
points-out various relationships for review by the Court, the
Office of the United States Trustee, and other parties in
interest:

       (a) WF&G's Prior Representation of the Debtors:

           Since 1997, WF&G has been among the Debtors' regular
outside counsel providing corporate, tax and regulatory
services. In May 2001, the Debtors contacted WF&G to assist in
analyzing, negotiating, and implementing a debt restructuring
and, if necessary, in filing cases under chapter 11 of the
Bankruptcy Code. WF&G may continue to represent certain of the
Debtors' 100% owned non-debtor affiliates, but WF&G will cease
any such representation to the extent it becomes adverse to the
Debtors in these cases.

       (b) WF&G's Unrelated Representation of Certain Members of
the Debtors' Prepetition Secured Lender Group:

           Approximately 60 lenders participate in the Debtors'
$1.2 billion prepetition secured debt facility.  WF&G
represented the Debtors in the negotiation of that facility with
the lenders. WF&G has in the past represented and currently
represents certain individual members or affiliates of
individual members of that lending group in matters unrelated to
the Debtors.  Those members of the lending syndicate (some of
whom also may be Equity Holders of 360networks inc.), include,
inter alia, three of the Arrangers of that facility:

       Allstate Life. Insurance Company
       Bank of Nova Scotia
       Bear Stearns - Investment Products, Inc.
       BNP Paribas
       Centurion CDO II, Ltd.
       Chase Manhattan Bank
       Credit Suisse First Boston Corp.
       DLJ
       Export Development Corp.
       General Electric Capital Corporation
       Goldman Sachs Credit Partners L.P.
       HSBC Bank Canada
       IBM Credit Corporation
       Keyport Life Insurance
       Merrill Lynch Pierce Fenner & Smith Incorporated
       Osprey Investments Portfolio, by Citibank N.A. as manager
       Pilgrim Prime Rate Trust I
       Royal Bank of Canada
       Stein Roe Floating Rate Limited Liability Company
       Liberty - Stein Roe Advantage Fund
       The Bank of New York
       The Bank of Tokyo- Mitsubishi Trust

Mr. Lipkin says that WF&G may continue its representation of
such parties or their affiliates, but has not and will not
represent any of them in any matter relating to the Debtors or
these chapter 11 cases.

       (c) WF&G's Unrelated Representation Of Certain Other
Creditors of the Debtors:

           WF&G has represented and continues to represent
certain other creditors of the Debtors or their affiliates in
matters unrelated to the Debtors, including:

       AT&T
       BNP Securities (USA), Inc.
       Carrier 1 International
       Caterpillar Financial Services
       Cisco Systems
       Comcast Corporation
       Deutsche Bank
       Fujitsu Communications
       Lafarge Construction
       LD COM
       Level 3 Communications Inc.
       MCI Worldcom
       Mitsubishi International Corp.
       Morgan Stanley
       Nippon Telegraph & Telephone Corp.
       Nortel Networks
       Oak Hill Advisors, Inc.
       Pirelli Deutschland AG
       Sprint
       Turner Construction Company
       XO Communications

Mr. Lipkin says that WF&G may continue its representation of
such parties, but has not, and will not, represent such parties
in any matter relating to the Debtors or these chapter 11 cases.
Further, Mr. Lipkin relates, none of these Firm clients
accounted for more than 1.85% of WF&G's revenue for the year
2000.

       (d) WF&G's Unrelated Representation Of Certain Competitors
of the Debtors:

            * Level 3 Communications is a competitor of the
Debtors. WF&G has represented Level 3 and certain of its
affiliates with respect to certain corporate and real estate
matters wholly unrelated to the Debtors. Level 3 has been and
may continue to be, a trade creditor of one or more of the
Debtors in these cases.  Further, as of April 30, 2001, Level 3
owed certain of the Debtors approximately $24,000,000, of which
a portion may remain outstanding.  WF&G intends to continue to
represent Level 3 and its affiliates, but will not represent
them in any matters related to the Debtors or these cases.

            * XO Communications is a competitor of the Debtors.
WF&G has represented XO with respect to matters wholly unrelated
to the Debtors. XO has been and may continue to be, a trade
creditor of one of the Debtors' non-debtor affiliates. WF&G
intends to continue to represent XO but will not represent
XO in any matters related to the Debtors or these cases.

       (e) WF&G's Unrelated Representation of Certain Equity
Holders of the Debtors' Parent Corporation:

           Numerous individuals and corporate entities are
holders of the equity securities of 360networks inc., the
ultimate Canadian parent of the Debtors in these cases.  WF&G
has represented and continues to represent certain minority
equity holders of 360networks inc. in matters unrelated to the
Debtors. Those matters include the following:

            * According to the form 20-F filed by 360networks
inc. with the Securities and Exchange Commission, dated May 20,
2001, as of April 2001, Boston Venture Management held
approximately 1.04% of the stock of 360networks, inc. on a non-
diluted basis. WF&G has represented BVM with respect to matters
wholly unrelated to the Debtors. BVM was a significant
shareholder of a predecessor in interest of one of the Debtors'
non-debtor affiliates, GlobeNet Communications Group Limited,
prior to its acquisition by 360networks inc. WF&G represented
BVM in its acquisition of GlobeNet stock. WF&G, however, did not
advise or represent either BVM or the Debtors or their
affiliates in connection with the acquisition of GlobeNet by
360networks inc. While WF&G intends to continue to represent
BVM, WF&G will not represent BVM in any matters related to the
Debtors or these cases.

            * According to the 20-F, as of April 2001 Providence
Equity Partners and certain of its affiliates held approximately
4.67% of the stock of 360networks inc. on a non-diluted basis.
WF&G has represented Providence with respect to matters wholly
unrelated to the Debtors. Providence was a shareholder in
GlobeNet prior to its acquisition by 360networks inc. WF&G
represented Providence in its acquisition of GlobeNet stock.
WF&G, however, did not advise or represent either Providence or
its affiliates, or the Debtors or their affiliates in connection
with the acquisition of GlobeNet by 360networks inc., except for
some post-closing tax and indenture advice. While WF&G intends
to continue to represent Providence, WF&G will not represent
Providence in any matters related to the Debtors or these cases.

            * According to the 20-F, Alcatel N.V. is the holder
of less than 1% of the equity 360networks inc., consisting of
100% of the Series 1 Convertible Preferred Shares issued by
360networks inc. In addition, certain Alcatel affiliates, none
of which are represented by WF&G, have contractual relationships
with certain nondebtor affiliates of the Debtors. During 2000,
WF&G represented a French affiliate of Alcatel in connection
with its acquisition of an entity unaffiliated with the Debtors.
While WF&G intends to continue to represent such Alcatel
affiliate in the future, WF&G will not represent Alcatel or any
of its affiliates in any matters related to the Debtors or these
cases.

            * According to the 20-F, DLJ Merchant Banking
Partners, L.P. beneficially owns approximately 4.13% of the
stock of 360networks inc. on a non-diluted basis.  WF&G has
never represented DLJ Merchant Banking Partners, L.P.  Upon
information and belief, DLJ and its affiliates have been
acquired by Credit Suisse First Boston and its affiliates. WF&G
has in the past represented and intends to continue to represent
Credit Suisse First Boston in matters unrelated to the Debtors
or these cases.

            * According to the Form 20-F, Goldman, Sachs & Co. is
the beneficial owner of approximately 4% of the stock of
360networks inc. on a non-diluted basis. As stated, WF&G has in
the past represented and currently represents Goldman Sachs,
Inc. and various of its affiliates.  WF&G has not represented
Goldman, Sachs & Co. or any of its affiliates in matters related
to the Debtors or their affiliates.  While WF&G intends to
continue to represent Goldman, WF&G will not represent Goldman
in any matter relating to the Debtor or these cases.

            * As of April 30, 2001, Ledcor Inc. indirectly held
38.2% of the capital stock of 360networks inc., which entitles
Ledcor Inc. to a 63.0% voting interest in 360networks inc. WF&G
does not represent Ledcor Inc. or any affiliate thereof (other
than the Debtors or certain other wholly owned direct or
indirect subsidiaries of 360networks inc. to the extent, if any,
any such entities are considered to be affiliates of Ledcor
Inc.).  Also, WF&G represented a predecessor of 360networks inc.
when such predecessor was an affiliate of Ledcor Inc.

            * A WF&G partner resident in New York, Bruce Kraus,
purchased 1000 shares of 360networks inc. in an initial public
offering in 2000.  Simultaneously with his purchase, he
transferred 200 of those shares.  Since then, Mr. Kraus has
neither bought nor sold any other securities in the Debtors or
in its affiliated entities.

       (f) Other Relationships With The Debtors:

            * In November 2000, and prior to joining WF&G,
Francois Bloch, who subsequently joined WF&G as a partner
resident in Paris, represented LDCOM Networks, a
competitor/trade creditor of the Debtors, in connection a
transaction involving a contract between LDCOM and 360networks
(UK) limited, a non-debtor affiliate of the Debtors. On
information and belief, that contract is still in effect.
Neither Mr. Bloch nor WF&G has represented LDCOM in any other
matter. WF&G has taken appropriate measures to ensure that Mr.
Bloch will not have any contact with these cases.

       (g) Certain WF&G partners and associates and certain of
their relatives, may have business, contractual, economic,
familial or personal relationships with creditors of the Debtors
and/or other parties in interest or such entities' respective
officers, directors or shareholders.  "Insofar as I have been
able to ascertain, none of these officers, directors and/or
shareholders has any substantial or direct involvement in this
case or, alternatively, such relationships are insignificant. I
do not believe these familial or personal relationships,
considered separately or collectively, are material," Mr. Lipkin
says.

       (h) Certain WF&G partners and associates and certain of
their relatives may hold equity or debt securities of one or
more of the Potential Parties In Interest.  "Insofar as I have
been able to ascertain, no such partner, associate or relative
of either has a major or controlling stake in any Potential
Party In Interest. I do not believe these shareholders'
interests, considered separately or collectively, affect WF&G's
disinterestedness or would give rise to a finding that WF&G
holds an interest adverse to the Debtors' estates," Mr. Lipkin
says.

       (i) WF&G regularly represents the American Institute of
Certified Public Accountants and certain members thereof. The
AICPA is not, to WF&G's knowledge, a party in interest in this
case.  Due to WF&G's representation of the AICPA, however, WF&G
has adopted policies respecting WF&G's representation of parties
in actions or proceedings against accounting firms.  Thus, WF&G
would need to determine, under the facts and circumstances then
present, whether it could represent the Debtors in any such
action or proceeding. WF&G is not aware of any claims against
any accounting firms that have been asserted or that are the
subject of any investigation with respect to the Debtors.

       (j) WF&G partners and associates and certain of their
relatives may have personal relationships with officers,
directors and/or shareholders of creditors of the Debtors,
competitors of the Debtors and/or other parties in interest in
this case. As of the date thereof, WF&G is not aware of any such
relationship that is material.

Mr. Lipkin relates that WF&G has not reviewed the relationship
its partners and employees have with the United States Trustee
or any person employed in the office of the United States
Trustee, but will do so upon being provided with a list of such
persons by the office of the United States Trustee.

In the unlikely event any matter were, in the future, to give
rise to a potential conflict with respect to matters that
otherwise would have been handled by WF&G, Mr. Lipkin relates
that Cahill Gordon & Reindel (assuming it had no conflict) or
one of the Debtors' ordinary course counsel will handle the
matter and WF&G will not be involved. (360 Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900)


AMF BOWLING: S&P Drops Senior Unsecured Debt Rating to D
--------------------------------------------------------
Standard & Poor's lowered its senior unsecured debt rating on
AMF Bowling Inc. to D from single-C and removed the rating from
CreditWatch. The downgrade follows AMF Bowling Worldwide Inc.'s
voluntary filing for reorganization under Chapter 11 of the U.S.
Bankruptcy Code. AMF Bowling Worldwide is the principal
operating subsidiary of AMF Inc. and its principal source of
funds.

The corporate credit and other debt ratings on AMF Bowling Inc.
and AMF Bowling Worldwide were lowered to D on Sept. 18, 2000,
following AMF Bowling Worldwide's failure to make its interest
payment on its senior subordinated notes.


AMRESCO INC.: Fitch Cuts Senior Sub Debt Rating to D From CCC
-------------------------------------------------------------
Fitch lowers AMRESCO, Inc.'s (AMRESCO) senior subordinated debt
to 'D' from 'CCC' following the company's announcement that it
has filed a voluntary petition under Chapter 11 of the
Bankruptcy Code. The company's two operating subsidiaries,
AMRESCO Commercial Finance, Inc. and AMRESCO Independence
Funding, Inc. are not included in the bankruptcy filing.

As part of the filing, AMRESCO has entered into an asset
purchase agreement with a group of investors, whereby, subject
to bankruptcy court approval and a mandatory auction process,
the company will sell substantially all of its assets, exclusive
of cash and cash equivalents, for a purchase price of $309
million, subject to certain adjustments. The purchase price is
comprised of $151 million cash, subject to adjustment, a $25
million six month note and the replacement of current warehouse
indebtedness of $133 million.


BETHLEHEM STEEL: Lenders Grant Waiver of Net Worth Covenant
-----------------------------------------------------------
Bethlehem Steel Corporation (NYSE: BS) announced that its banks
and other lenders have waived compliance with the consolidated
tangible net worth covenant contained in its $320 million
Inventory Credit Agreement until January 30, 2002.

As previously announced, Bethlehem has three other secured
financing agreements that include the same adjusted consolidated
tangible net worth covenant contained in Bethlehem's Inventory
Credit Agreement. The lenders in those agreements have also
agreed to a waiver on similar terms. In addition, the lenders to
Columbus Coatings Company and Chicago Cold Rolling, in which
Bethlehem is a joint venture partner, have agreed, subject to
certain conditions, to a standstill agreement relative to their
rights against Bethlehem as guarantor of the loans to those
joint ventures until January 30, 2002.

Gary Millenbruch, Bethlehem's vice chairman and chief financial
officer, said, "Securing these waivers and standstill agreements
is an important step. I'm pleased with the support of our banks
and other lenders in providing their consent and agreement." Mr.
Millenbruch also said, "Bethlehem is continuing to take all
appropriate actions to manage through this period of extremely
competitive market conditions. In this regard, Bethlehem will
continue its efforts to replace its existing credit facilities
with new financing arrangements and will continue to
aggressively reduce costs, sell certain non- core assets, make
further reductions in inventories, and implement other actions
to improve cash flow."

Bethlehem said that it expects to report liquidity, comprising
cash and available borrowings under its existing Credit
Agreements, to be in excess of $100 million at June 30, 2001.
Bethlehem's future liquidity will remain dependent upon its
sources of financing, completion of asset sales, business
conditions and operating performance.


BRIDGE INFORMATION: Proposes Second Severance & Retention Plan
--------------------------------------------------------------
Despite the successful sale of its assets, Bridge Information
Systems, Inc. and its debtor-affiliates have not yet ruled out
the possibility of another forced reduction in their workforce.

By motion, the Debtors seek the Court's authority to establish
and implement a severance and retention plan for employees that
have been terminated or may be terminated, pursuant to a forced
reduction.

The Debtors offer to provide up 3 weeks salary per employee,
subject to an aggregate cap of $1,200,000 for all employees.
This is available to employees who were terminated last January
2001 when the Debtors were forced to trim down their manpower.
Current employees, who may be affected by a future reduction,
will also be benefit from the plan.

Sean A. O'Neal, Esq., at Clearly, Gottlieb, Steen & Hamilton, in
New York, explains it is important for the Debtors to keep their
workforce in place while they continue to work on completing the
sale of their various businesses. And the Debtors believe that a
severance and retention plan is one way to maintain employee
morale. Such plan also provides an incentive to the employees to
continue working with the Debtors through the completion of the
sale process.

The failure to establish and implement a severance and retention
plan, Mr. O'Neal notes, would impair employee morale and risk
interruptions of employment services at a time when employee
dedication, confidence and cooperation are critical. It would
ultimately result in a disruption of the Debtors' operations and
reduce the value of the Debtors assets, Mr. O'Neal adds. (Bridge
Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


CABLEVISION S.A.: S&P Junks Short-Term Ratings
----------------------------------------------
Standard & Poor's affirmed its single-'B' long-term foreign and
local currency corporate credit ratings on CableVision S.A.

At the same time, Standard & Poor's lowered the short-term
ratings on CableVision to single-C from single-B, the same level
as the Republic of Argentina (single-B long-term foreign and
local currency rating/Negative/single-C short-term foreign and
local currency rating).

The outlook is negative.

The ratings on CableVision, one of the two largest cable-
television providers in Argentina, with about 1.44 million
subscribers as of March 2001, reflect the company's aggressive
financial profile, deteriorated cash flow protection measures,
and its dependence on the level of economic
activity in the country. The ratings also incorporate the
company's strong market position and the operational and
financial support of its shareholders.

CableVision faces the maturity payment of a $100 million
floating-rate notes issue in February 2002. Although financial
flexibility is limited by current market conditions, the current
rating incorporates Standard & Poor's expectations that
CableVision will be able to refinance its short-term debt and
the maturity mentioned above. The floating-rate note issue is
held by Bank Boston, JP Morgan Chase, Citibank, and Deutsche
Bank, which are among CableVision's relationship banks.
Nevertheless, given Cablevision's short-term maturities and
continued financial flexibility concerns for Argentine
corporates, Standard & Poor's does not believe the short-term
rating should be higher than that of the Republic of Argentina.

CableVision is equally owned by a subsidiary of Hicks, Muse,
Tate and Furst, and Liberty Media Corp. Shareholders have shown
financial support with the capitalization (between December 2000
and February 2001) of $250 million in senior subordinated loans
and $53 million in accrued interest.

                   Outlook: Negative

The outlook on Cablevision reflects the outlook on the ratings
of the Republic of Argentina. The outlook is based on Standard &
Poor's persistent concern that the absence of an economic
recovery and the long-lasting high interest rate environment
could continue to affect financial flexibility and heighten
refinancing risk. In addition, the depressed economic activity
hinders production and revenue growth and contributes to higher
demand volatility, Standard & Poor's said.


CARDIAC CONTROL: Now Known As Renaissance Acceptance Group, Inc.
----------------------------------------------------------------
Cardiac Control Systems, Inc. has closed its acquisition of
Nineteenth Investment Corporation, by merger through a
subsidiary of Remodelers Holdings, Inc. ("RHI") and
simultaneously changed its name to Renaissance Acceptance Group,
Inc. Shares of Renaissance, representing approximately 94.6% of
its common stock, were issued to the stockholders of RHI in the
merger. Shares of Renaissance will trade on the OTC Pink Sheets
under the ticker symbol "RNAG" effective on the opening of
business today, July 6, 2001.

On May 24, 2001, Cardiac obtained the approval of the United
States Bankruptcy Court, Middle District of Florida,
Jacksonville Division, for the transaction in its confirmed
Second Amended Chapter 11 Plan of Reorganization relating to In
re: Cardiac Control Systems, Inc., Case No. 99-06852-3P1.
Pursuant to the Plan, all of Cardiac's remaining assets and
liabilities were transferred and assigned to a liquidating
trust. The liquidating trustee will liquidate the assets and
distribute the proceeds to creditors in accordance with the
distribution method set forth in the Plan. As a result of the
Plan confirmation, none of Cardiac's pre-confirmation creditors
or stockholders, nor the liquidating trust, has recourse against
Renaissance, even in the event of default under the Plan. The
merger was effected in connection with the Plan confirmation.

At the effective time of the merger, each then outstanding share
of Cardiac's existing capital stock, conversion rights, warrants
and options to purchase any share of Cardiac's capital stock,
and other equity interests issued and outstanding (or held in
its treasury) were automatically canceled and extinguished
without conversion and no payment was or shall be made in
respect to those shares.

Following the Plan confirmation, merger and name change,
Renaissance became a holding company and RHI became a wholly
owned subsidiary. Renaissance has 5.00 million outstanding
shares of common stock and 2,136.5 outstanding shares of
preferred stock. As noted above, the stockholders of RHI own
4.73 million shares of the Renaissance outstanding common stock
(approximately 94.6%) and all of the Renaissance outstanding
preferred stock.

Through its subsidiaries, Renaissance operates in the real
estate, real estate consulting and mortgage banking industries.
Its primary business "Assistance for America" (AFA) educates and
assists consumers who have minimal financial resources in owning
their own home.


CHROMATICS COLOR: Falls Short Of Nasdaq's Listing Requirement
-------------------------------------------------------------
Chromatics Color Sciences International, Inc. (Nasdaq: CCSI)
received a determination letter from the staff of The Nasdaq
Stock Market on June 27, 2001 that the Company fails to comply
with the minimum bid price requirement for continued listing set
forth in Nasdaq's Marketplace Rules 4310(c)(4) and 4310(c)(8)(B)
and that its securities are therefore subject to delisting from
The Nasdaq SmallCap market.

The Company has appealed the staff's determination and requested
a hearing before the Nasdaq Listing Qualifications Panel to
review the determination of the Nasdaq staff pursuant to the
NASDQ Marketplace Rule 4800 Series. The Company's hearing
request has stayed the delisting of the Company's securities
pending the Panel's decision. There can be no assurance that the
Qualifications Panel will grant the Company's request for
continued listing.

Chromatics Color Sciences is in the business of color science
and has developed technologies and intellectual properties in
this field. The Company has received clearance from the Food and
Drug Administration (FDA) for the commercial use of its medical
device for the non-invasive monitoring of bilirubinemia in
newborn infants by healthcare professionals in hospitals,
clinics, pediatrician offices and the home environment. The
Company believes its technologies and intellectual properties
may also have medical applications in the detection and
monitoring of other chromogenic diseases which the Company
defines as those diagnosed or monitored by the coloration of the
human skin, tissue or fluid being affected. Medical
applications, in addition to the non-invasive monitoring of
bilirubinemia in newborns, will require clinical trials and FDA
clearances for commercial use.


COHO ENERGY: Intends To Sell Position In Tunisia For $7 Million
---------------------------------------------------------------
Coho Energy, Inc. (Coho Energy) (OTCBB:CHOH) said that one of
its subsidiaries, Coho Anaguid, Inc. (Coho Anaguid), has entered
into a definitive agreement with Pioneer Natural Resources
Company (NYSE:PXD), Anadarko Tunisia Anaguid Company, an
indirect wholly-owned subsidiary of Anadarko Petroleum Corp.
(NYSE:APC), and Nuevo Energy Company (NYSE:NEV) to sell all of
its interest in the Anaguid permit in Tunisia for cash proceeds
of approximately $200,000 and the assumption of Coho Anaguid's
obligations under the permit totaling in excess of approximately
$7 million. This sale was approved by the United States
Bankruptcy Court but is still subject to approval by the
Tunisian government. Coho Anaguid filed for protection under
Chapter 11 of the United States Bankruptcy Code in February
2001.

Under Coho Energy's plan of reorganization that was consummated
on March 31, 2000, the holders of Coho Energy's old common stock
would be entitled to 40% of the net proceeds from the
disposition of Coho Anaguid. Since the estimated cash proceeds
of $200,000 are less than amounts expended by Coho to pay
obligations under the permit subsequent to March 31, 2000 while
Coho Energy was marketing the permit for sale, no net proceeds
remain for distribution to holders of Coho Energy's old common
stock.

Coho Energy is a Dallas-based oil and gas producer focusing on
the exploitation of underdeveloped oil properties in Oklahoma
and Mississippi.


COPYTELE, INC.: Appeals Nasdaq Compliance Ruling
------------------------------------------------
CopyTele, Inc. (Nasdaq: COPY) said that on June 28, 2001, it
received a Nasdaq Staff Determination indicating that CopyTele
fails to comply with the minimum bid price requirements for
continued listing set forth in Marketplace Rule 4450(a)(5) and
that its securities are, therefore, subject to delisting from
The Nasdaq National Market.

CopyTele is requesting a hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination. There
can be no assurance that the Panel will grant CopyTele's request
for continued listing. During the appeal process, CopyTele's
securities will remain listed on The Nasdaq National Market.

CopyTele has been engaged in the development of flat panel
display technology since its inception and more recently has
concentrated its activities on the development, production and
marketing of multi-functional, high-grade, hardware-based,
voice, fax and data encryption solutions featuring a diversified
product line which is being marketed through a worldwide network
of dealers and distributors. For additional information, visit
CopyTele's website at http://www.copytele.com.


CORNERSTONE FAMILY: S&P Lowers Bank Loan Rating to B+ From BB-
--------------------------------------------------------------
Standard & Poor's lowered its bank loan rating on Cornerstone
Family Services Inc. to single-'B'-plus from double-'B'-minus.
At the same time, Standard & Poor's affirmed its single-'B'-plus
corporate credit rating on Cornerstone.

The outlook remains negative.

The rating action on the secured bank rating reflects Standard &
Poor's revised estimation of the value of the collateral package
in the event of a payment default. The facility is secured by
substantially all of the company's assets. Standard & Poor's
simulated default scenario suggests the strong possibility of a
full recovery, however Standard & Poor's confidence in that
outcome is not quite sufficient to warrant notching up the
rating considering Cornerstone's less-than-expected return on
assets.

The speculative-grade ratings on Cornerstone Family Services
Inc. reflect the company's property diversification, strong
operating margins, and well-disciplined growth strategy. These
factors are offset by the company's limited size, and its
significant leverage.

Bristol, Pa.-based Cornerstone owns and operates a network of
132 cemeteries and five funeral homes in 11 eastern states.  It
has grown from 123 cemeteries and four funeral homes previously
owned by the financially troubled Loewen Group Inc., which
Cornerstone had at its formation in March 1999.  The largest
property accounts for less than 7% of net revenues.  The company
sells both at-need and preneed services.

Management had sought to capitalize on the relatively
predictable demand for its services, and build future market
share with aggressive preneed sales efforts. However, preneed
sales have lagged behind expectations. While a required
accounting change will not impact cash flow, it will likely
result in a significant reduction in reported revenues, because
preneed sales, which are a large component of total revenues,
will now be considered deferred revenues. Debt leverage is
expected to increase from the current 62% level, due to a likely
negative one-time adjustment to the company's equity as a result
of this change in revenue reporting requirements. Still, funds
from operations to lease-adjusted debt of about 10% are expected
to remain consistent with the rating.

                   Outlook: Negative

The rating could be lowered if the company's performance
continues to be adversely affected by the industry's limited
pricing flexibility, and weak preneed sales, Standard & Poor's
said.


DIMAC MARKETING: Explores Strategies & Considers Selling Assets
---------------------------------------------------------------
DIMAC Marketing Partners, Inc., the direct response marketing
solutions provider, announced that its Board of Directors and
senior management have decided to explore strategic
alternatives, including a new equity investor and/or sale of the
Company and its core assets.

This process is intended to enable DIMAC Marketing Partners and
three of its core subsidiaries -- DMW Worldwide (agency
services); MBS (information and insight services); and Palm
Coast Data (direct response management and value-added
fulfillment services) -- to accomplish several key objectives.
It will result in an expanded investor base, make available the
capital necessary to meet its obligations and fund the
businesses' growth initiatives, and will allow the Company and
its strategic businesses to move beyond any lingering
associations from its recent Chapter 11 case.

DIMAC Marketing Partners has retained Veronis Suhler &
Associates, the leading independent merchant bank dedicated to
the direct marketing services and media industries, to assist
with the exploration process and sale effort.

"In looking for new equity investors, our objective will be to
identify buyers who recognize the strategic benefits of keeping
the parent company and its businesses intact and who are
committed to growing the businesses and valuing their
employees," said Chairman and CEO Robert "Kam" Kamerschen.

"We have worked very hard over the last 14 months to put the
Company in a better position by reducing debt, enhancing the
management team, consolidating operations, repositioning it into
a customer-centric solutions provider, adding online and offline
capabilities, and taking steps to improve profitability and
long-term growth prospects. DIMAC Marketing Partners and its
core businesses today are well positioned to provide clients a
full range of value-added direct response marketing services or
a customized combination to meet their needs. However, the
global economic outlook has changed. It makes sense for us to
seek a new equity investor for the Company and its core assets,
which can provide the necessary capital and support the
Company's growth objectives, as well as help to remove any
lingering associations with our recent C-11 case," he concluded.

Separately, the Company said it is winding down the business of
its DIMAC Direct subsidiary and pursuing a prompt sale or other
disposition of that unit's assets, in order to stop its
operating losses and maximize the value of that business.

DIMAC Marketing Partners, Inc. provides a comprehensive range of
integrated and insightful direct response marketing solutions,
which are supported by creative strategy/agency services,
database strategy and management services and "Total Program
Management" direct marketing services and products.


E-SYNC NETWORKS: Securities Face Delisting From Nasdaq
------------------------------------------------------
E-Sync Networks, Inc. (NASDAQ: ESNI; www.esyncnetworks.com), a
leading provider of e-business infrastructure products and
services, received a Nasdaq Staff Determination on June 29, 2001
indicating that the Company fails to comply with the minimum bid
price requirement for continued listing set forth in Marketplace
Rule 4310(c)(4), and that its securities are, therefore, subject
to delisting from The Nasdaq SmallCap Market.

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

                 About E-Sync Networks, Inc.

Headquartered in Trumbull, CT with offices in New York and the
U.K., E-Sync Networks, Inc. (NASDAQ: ESNI) provides an array of
e-business infrastructure products and services, including: B2B
integration solutions; IT infrastructure and network design and
implementation; reliable, high-quality messaging; and, secure,
high-performance hosting. E-Sync Networks has an extensive
corporate client base, including Briggs & Stratton, Discover
Financial Services, Ford(TM), IVANS, Johnson & Johnson,
Pepsi(TM), Perkin Elmer, Purdue Pharma, Ralston Purina and
Travelers Insurance. The company's largest stockholder is New
York-based venture fund Commercial Electronics Capital
Partnership, LP (CECAP). CECAP (www.cellc.com) is a partner of
TRW, Inc. (NYSE: TRW) established solely to create independent
businesses founded on TRW technologies in markets outside of
TRW's strategic interests. More information can be found on the
Internet at www.esyncnetworks.com


EMPIRE OF CAROLINA: Sells All Toy Operations To Alpha Int'l
-----------------------------------------------------------
Empire of Carolina, Inc. (OTC Pink Sheets: EMPIQ) announced that
on June 29, 2001, it and two of its subsidiaries, Empire
Industries, Inc. and Empire Toys (HK), Ltd., sold substantially
all of the Company's toy operations to Alpha International,
Inc., including the "Buddy L," Grand Champions, Big Wheels, Yo-
Yo Balls, D-Cell Ride On's and Crocodile Mile Waterslides and
Sprinklers product lines. Alpha also acquired various licenses,
intellectual property, executory contracts and existing
inventory located in the United States and Hong Kong and all of
its right, title and interest to the capital stock of Empire
Toys (HK), Ltd. The purchase price for the assets was $6.25
million paid in cash to the Company and the assumption by Alpha
of certain related liabilities in the approximately amount of
$1.5 million. Alpha also provided substitute cash collateral and
a substitute letter of credit to replace Empire Toys (HK)'s
existing $3,000,000 (HKD) credit facility. The proceeds of sale
will be used to partially satisfy the secured debt of La Salle
National Bank, N.A., as agent for itself and certain other
banks, partially fund a distribution to unsecured creditors, and
allow for the payment and performance of the remaining
administrative claims and obligations in the Chapter 11 Cases.

Empire of Carolina and Empire Industries filed for
reorganization under Chapter 11 on November 17, 2000 and have
continued operations on a debtor-in- possession basis. On May
25, 2001, they filed an emergency motion with the Bankruptcy
Court for the Southern District of Florida (Judge Paul G. Hyman)
seeking court authorization to sell substantially all of their
assets to Alpha. On June 1, 2001, the sale was preliminarily
approved by the U.S. Bankruptcy Court contingent upon receipt of
higher bids. The final hearing on the proposed sale was held
before Judge Hyman on Wednesday, June 27, 2001. At the hearing,
Alpha submitted the highest and best offer for the assets, with
a bid of $6,250,000.00 and an obligation to assume certain
liabilities of the Company. One other company submitted a lower
bid at the hearing for substantially all of the Company's
assets, and two other bidders submitted "partial" competing bids
(i.e., bids for less than substantially all of the Company's
assets) that also were not accepted.

Empire Toys (HK), Ltd. has not filed for relief under the U.S.
Bankruptcy Code


FIRST WAVE MARINE: Files Plan of Reorganization in S.D. Texas
-------------------------------------------------------------
First Wave Marine, Inc. has filed with the U.S. Bankruptcy Court
for the Southern District of Texas, a Plan of Reorganization in
the Company's Chapter 11 proceeding. The filing of the Plan
should pave the way for the Company's emergence from bankruptcy
in early fall after requisite Bankruptcy Court approvals can be
obtained. The Plan calls for an exchange of all of First Wave's
11% Senior Notes for 96.7% of the common stock of the Company
which will significantly improve the balance sheet and financial
strength of the Company. The Committee of Unsecured Creditors
has stated that it will support the Plan.

On February 5, First Wave filed for relief under Chapter 11 of
Title 11 of the United States Code in the Southern District of
Texas. Immediately after filing, the Company secured $20 million
in post petition financing to provide working capital during its
restructuring. At the same time, First Wave obtained Bankruptcy
Court authority to pay employees and certain qualifying critical
vendor and subcontractor pre-petition payables on an
uninterrupted basis. Since its Chapter 11 filing, First Wave has
successfully maintained normal operations.

First Wave President Grady Walker said, "filing this Plan
represents the achievement of a major milestone in our efforts
to restructure the Company and paves the way for a speedy
emergence from bankruptcy. Additionally, the Plan dramatically
reduces the long term indebtedness of the Company, thus
improving its financial and competitive strength. Thanks to the
hard work of our employees and the loyalty and support of our
customers, vendors and lenders, First Wave's operations have
performed well throughout this Chapter 11. Now as we move
towards the conclusion of this restructuring, First Wave will
redouble its focus on core businesses and prepare to exploit its
new financial strength in order to better serve the evolving
needs of its customers."

The original majority shareholders, Messrs. Sam Eakin, Frank
Eakin and David Ammons, have elected to resign their positions
as officers and directors upon Bankruptcy Court approval to
pursue their interests in other companies. Upon approval, H.
Grady Walker III, Frank R. Pierce and Suzanne B. Kean will be
appointed as directors of the Company. Messrs. Walker and Pierce
and Ms. Kean will also continue in their current respective
management positions.

First Wave is a leading provider of shipyard and related
services, with five shipyards in the Houston-Galveston area. The
Company provides repair, conversion, new construction, and
related services for barges, boats, ships, offshore rigs, and
other vessels in the offshore and inland marine industries.


FRUIT OF THE LOOM: Committee Serves Notices Of Rule 2004 Exams
--------------------------------------------------------------
The Official Committee of Unsecured Creditors in Fruit of the
Loom, Ltd.'s chapter 11 cases gives notice that, pursuant to
Rule 2004, it will conduct examinations of certain witnesses.
Through its co-counsel Otterbourg, Steindler and Pepper
Hamilton, the following witnesses will be examined:

       (A) Henry A. Johnson at the Trianon Bonita Bay,
           in Bonita Springs, Florida;

       (B) Brian Wolfson, at the offices of Otterbourg,
           Steindler, in New York City; and

       (C) A. Lorne Weil, also at the offices of Otterbourg,
           Stiendler, in New York City;

The Committee intends to examine the witnesses with respect to
the oversight of Fruit of the Loom management and operation by
the Board of Directors.  It wants answers in relation to issues
including, but not limited to:

       * the Board's decisions with respect to the authorization
         for payment of compensation, incentives, stock options
         and other benefits;

       * the Board's authorization to grant guarantees of
         personal loans to William F. Farley and to secure these
         guarantees with Debtor's assets;

       * the Board's decision regarding consideration for the
         disposition of corporate assets;

       * the existence of financial and other relationships
         between Debtor and its directors;

       * the existence of any related-party transactions with
         respect to the Board and any of the directors;

       * the financial condition of Debtor prior to and after the
         petition date;

       * the preparation of a business plan in the context of the
         Chapter 11 cases;

       * consideration and approval by the Board of the joint
         plan of reorganization and proposed disclosure
         statement;

       * and such other matters as are properly within the scope
         of an examination under Bankruptcy Rule 2004.

(Fruit of the Loom Bankruptcy News, Issue No. 32; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


GENESIS HEALTH: Files Revised Chapter 11 Plan
---------------------------------------------
Genesis Health Ventures, Inc. (GHVIQ.OB) and the Multicare
Companies, Inc. filed a revised joint plan of reorganization in
U.S. Bankruptcy Court for the District of Delaware. On June 5,
Genesis and Multicare filed an initial plan of reorganization
calling for the merger of the two companies under the Genesis
banner.

The revised plan--which is supported by both Genesis and
Multicare senior bank lenders and the official statuary
committees of unsecured creditors--provides for the issuance of
new notes and new common and preferred stock. Under the revised
plan, approximately 93% of the new common stock will be issued
to the Genesis and Multicare senior secured creditors and
approximately 7% of the new common stock to the Genesis and
Multicare unsecured creditors. Genesis unsecured creditors will
also receive warrants to purchase approximately 7% of the new
common stock and Multicare unsecured creditors will receive
warrants to purchase approximately 4% of the new common stock.
Existing holders of Genesis preferred stock and Genesis and
Multicare common stock would receive no distribution under the
revised plan.

The plan is subject to approval by certain creditor classes. A
disclosure statement, voting instructions and other solicitation
materials will be mailed following Bankruptcy Court approval.
Bankruptcy Court has set a July 6 hearing to consider approval
of these materials.

Genesis and Multicare voluntarily filed for Chapter 11
protection on June 22, 2000 after drastic cuts in Medicare
reimbursement and continued underpayment by most State funded
Medicaid systems resulted in inadequate earnings to continue to
satisfy payments under the companies' current capital
structures.

Copies of the revised plan, disclosure statement and a summary
of those documents will be posted in the restructuring section
of Genesis web site at www.ghv.com after July 6.

Genesis Health Ventures provides eldercare in the eastern US
through a network of Genesis ElderCare skilled nursing and
assisted living facilities plus long term care support services
nationwide including pharmacy, medical equipment and supplies,
rehabilitation, group purchasing, consulting and facility
management.


GLOBAL TELESYSTEMS: Gives Update On Recapitalisation Programme
--------------------------------------------------------------
Global TeleSystems, Inc. (OTC: GTLS; NASDAQ EUROPE: GTSG;
Frankfurt: GTS) announced that representatives of informal
committees representing holders of public debt and preferred
stock securities issued by GTS and its Global TeleSystems Europe
BV subsidiary have retained independent advisors; the advisors
have begun their due diligence investigations, and GTS plans to
make a formal recapitalisation proposal to these representatives
in the near future. This is a continuation of the process that
began last month when the Companies announced plans to
recapitalise their balance sheets by launching consensual
discussions with the holders of these securities in order to
eliminate or reduce the EUR 158 million in annual cash interest
payment obligations of these companies.

Consistent with these plans, GTS announced that it did not make
the cash interest payment due on July 1, 2001 on its 5-3/4%
Convertible Senior Subordinated Debentures due 2010, or the
dividend payment due June 15, 2001 on its depositary shares. The
non-payment of cash interest on the convertible debentures will
not constitute an event of default under indenture governing
those debentures unless interest is not paid by 31 July 2001.

GTS also announced that Deutsche Bank, Dresdner Bank and Bank of
America, which are providing financing to GTS' Global
TeleSystems Europe Holdings B.V. subsidiary, have agreed to
extend for the month of July the waiver of any defaults under
their facility caused by GTS' election to not pay the June 1
interest payment on GTS Europe's public debt. The failure to pay
interest on GTS' public debt or preferred shares is not a
default under the bank financing agreement. Pursuant to the
agreement between GTS and the Bank Group, the banks' consent
will be required for future funding requests, but the company
announced that it does not currently foresee making such
requests pending its reaching an agreement with informal
committees representing its public debt and preferred
shareholders. GTS and the Bank Group continue their discussions
aimed at replacing the current financing agreement with a
longer-term financing facility.

GTS has retained Houlihan Lokey Howard & Zukin as its investment
banker to assist in developing a financial restructuring plan
and undertaking discussions with GTS and GTS Europe bondholders
and preferred stockholders.

                    About GTS (www.gts.com)

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


ICG COMMUNICATIONS: Settles Disputes With Preferred Noteholders
---------------------------------------------------------------
The ICG Communications, Inc. Debtors ask Judge Walsh to approve
their settlement with the Plaintiffs, the Unofficial Committee
of Holders of Preferred Securities of ICG Funding, LLC, and co-
defendant Wells Fargo Bank West.

The Debtors advise Judge Walsh that they believe they have a
meritorious defense to all allegations made by the plaintiffs,
and that ICG Communications has a valid claim against ICG
Funding with regard to the advance. In addition, the Debtors
believe that the contested funds constitute property of the
estate.

That said, however, the Debtors say that, in light of the costs,
risks and delays associated with litigation, and after extensive
negotiation, examination and analysis of available evidence, and
the applicable law, the parties to the adversary proceeding have
agreed to settle:

      (a) Distribution of Contested Funds. Wells Fargo will
distribute the contested funds within 10 business days after
entry of an Order approving the Motion to:

          (i) Plaintiffs' reasonable attorney fees and costs. The
Plaintiffs' reasonable attorney fees and costs associated with
the adversary proceeding totaling approximately $35,000 will be
paid from the contested funds. The remaining contested funds
will be distributed to:

         (ii) ICG Distribution. ICG Communications will receive
one-third of the remaining contested funds totaling
approximately $859,999.

        (iii) Shareholder Distribution. The Plaintiffs and non-
plaintiff preferred shareholders who are holders of the
preferred securities as of November 15, 2000, shall receive
their pro rata share of two-thirds of the remaining contested
funds, totaling approximately $1,719,982.80; provided, however,
that for any non-plaintiff shareholder to receive its pro rata
share of the remaining contested funds, the non-plaintiff
shareholder must opt into the settlement by executing a mutual
release form. If this Motion is granted, the non-plaintiff
preferred shareholders will be notified of the settlement and
be given an opportunity to opt into it. Any funds not claimed by
the non-plaintiff shareholders within 6 months of the date of
entry of the Order approving this settlement will be distributed
to ICG Communications.

      (b) Release by Debtors. Under the Order approving this
settlement, the Debtors will be deemed to release, acquit, and
forever discharge the Plaintiffs and the Plaintiffs' officers,
directors, employees, agents, successors, predecessors, assigns,
affiliates, executors, legal representatives and trustees from
any and all manner of suits, claims, demands, debts, sums of
money, costs, expenses, or compensations arising from or
relating to the adversary proceeding or the contested funds.

The Debtors will undertake to notify the non-plaintiff
shareholders of the terms of this settlement and provide them
with an opportunity to participate. Because of the complexity
and difficulty associated with reaching beneficial owners of
publicly traded securities, many of which hold their securities
through several layers of ownership, the Debtors propose that
banks and brokerage firms either (a) be required to provide the
official noticing agent Logan & Co. with addresses of the
beneficial owners of the preferred securities in electronic
format in a timely manner, or (b) be required to send promptly
the materials described below to the beneficial owners in a
manner customary in the securities industry. Logan will be
responsible for transmission to each holder of record of the
preferred securities as of the record date, and each bank and
brokerage firm or agent identified by Logan as an entity through
which beneficial owners hold or held the preferred securities
and from which Logan has not received addresses in electronic
format, the materials as:

      (a) a copy of the Order approving this Motion;

      (b) the Mutual Release Form;

      (c) a return envelope provided by and addressed to the
Debtors; and

      (d) instructions for opting into the settlement and
returning the mutual release.

The Debtors submit that these procedures are fair and reasonable
under the circumstances.

In response, Judge Walsh enters a simple order approving the
settlement and notice procedures as stated in the Motion. (ICG
Communications Bankruptcy News, Issue No. 7; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


ILM I LEASE: Court Gives Go Ahead For Liquidation & Dissolution
---------------------------------------------------------------
ILM I Lease Corporation announced that on June 15, 2001, upon a
motion for judicial dissolution brought by it, a Virginia
Circuit Court residing in Fairfax County, Virginia granted such
motion and ordered that ILM I Lease Corporation immediately be
liquidated, dissolved and its affairs wound up, all pursuant to
the Virginia Stock Corporation Act. ILM I Lease Corporation
sought this relief because since August 15, 2000, ILM I Lease
Corporation's operations permanently ceased, it no longer is a
going concern and is nearly insolvent. In addition, ILM I Lease
Corporation lacks financial, administrative and other resources
sufficient to seek shareholder approval of such liquidation,
dissolution and winding-up.

ILM I Lease Corporation believes that, upon liquidation, it will
be able to pay in full all of its creditors and, to the extent
any assets are then remaining (which ILM I Lease Corporation is
unable to ascertain at this time), would seek to pay to its
shareholders a liquidating distribution. However, ILM I Lease
Corporation believes that after the payment of creditors, the
amount of the per share liquidating distribution would be
nominal.

Upon the winding up of ILM I Lease Corporation's affairs, ILM I
Lease Corporation intends to seek a court order terminating its
corporate existence.


IMPROVENET, INC.: Shares Kicked-Off Nasdaq National Market
----------------------------------------------------------
ImproveNet Inc., a leading Internet-based home improvement
services company, has been informed by Nasdaq that ImproveNet's
common stock would no longer trade on the Nasdaq National Market
effective June 29, 2001.

ImproveNet was delisted because the company failed to meet the
Nasdaq National Market's minimum trading price requirements set
forth in Nasdaq Marketplace Rules 4450(a)(5) and 4310(c)(8)(B).

ImproveNet's common stock is eligible for quotation on the
electronic bulletin board of the over-the-counter quotation
system.

"While we are obviously disappointed by Nasdaq determination, it
does not interfere with our business charter or our leadership
position in the marketplace," said Ron Cooper, ImproveNet
chairman and chief executive officer. "We are making steady
progress toward profitability and we believe that we have
sufficient cash on hand to reach profitability."

ImproveNet leverages personalized service and Internet
technology to provide successful home improvement projects on
behalf of homeowners, contractors, architects, designers,
manufacturers, lenders and real estate professionals. ImproveNet
content and services are provided on more than 380 partner and
affiliate sites, including GE Appliances, DuPont Corian, Owens
Corning, Dow, Yahoo!, Ask Jeeves, Knight-Ridder and Cox
Interactive. For more information, visit www.ImproveNet.com,
www.ImproveNetPRO.com


INDUSTRIAL RUBBER: Now Trades on OTCBB After Nasdaq Delisting
-------------------------------------------------------------
Industrial Rubber Products, Inc. (OTC Bulletin Board: INRB) said
that its common stock, as of July 2, 2001, is no longer traded
on the Nasdaq Small Cap Market, due to a decision by a Nasdaq
Listing Qualifications Panel to delist the Company's securities.
The Company was informed of this decision on June 29.

The Company's common stock now trades on the Over-the-Counter
(OTC) Bulletin Board under the symbol "INRB." The OTC Bulletin
board is a regulated quotation service that displays real-time
quotes, last sales prices and volume information in over-the-
counter equity securities.

The Company believes that this change will not adversely affect
the ability of shareholders and potential investors to buy and
sell the Company's stock.

Industrial Rubber Products, Inc. designs, manufactures and
distributes abrasion-resistant products and equipment,
protective linings and proprietary products to a variety of
industries, including mining, aggregate, power, paper,
aerospace, military, transportation, agriculture and
construction. The Company's facilities include its headquarters
and two manufacturing plants in Hibbing, Minn., and one
manufacturing plant each in West Jordan, Utah, and Sudbury,
Ontario, Canada.


LAIDLAW INC.: Paying Prepetition Employee Obligations
-----------------------------------------------------
The Laidlaw Inc. U.S. Debtors sought and obtained authority from
Judge Kaplan to honor and pay all prepetition employee-related
claims in accordance with the Company's stated policies, as such
policies may be modified from time to time, and in their sole
discretion. Judge Kaplan makes it clear that nothing in the
Debtors' Motion or his Order shall be construed as an assumption
of any executory contract pursuant to 11 U.S.C. Sec. 365.
(Laidlaw Bankruptcy News, Issue No. 1; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


LERNOUT & HAUSPIE: Belgium Creditors Approve Plan To Sell Assets
----------------------------------------------------------------
Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy advised
Judge Wizmur that in the proceedings in the Ieper Commercial
Court in Belgium the creditors of Lernout & Hauspie Speech
Products NV overwhelmingly approved, by a vote of 98% in dollar
amount and 88% in the number of claimants voting, the Belgium
reorganization plan. The Ieper Court took the issue of
confirmation of the plan under advisement. (L&H/Dictaphone
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


LERNOUT & HAUSPIE: Selling Mendez to Lionbridge For $27 Mil Cash
----------------------------------------------------------------
Lernout & Hauspie Speech Products NV (OTC:LHSPQ), a world leader
in speech and language technology, products and services, has
reached an agreement to sell Mendez SA to Lionbridge
Technologies, Inc. for $27 million in cash. Mendez, a wholly-
owned subsidiary of L&H, provides localization and language
translation services.

The agreement is subject to approval by the U.S. Bankruptcy
Court for the District of Delaware and the Ieper Commercial
Court of Belgium, a process that entails, among other
procedures, a public auction of Mendez that would allow third
parties to make competing bids to acquire the subsidiary. After
approval by the U.S. Bankruptcy Court of the bidding procedures
to be followed, the Company will organize a public auction in
early August under the supervision of this court. The agreement
with Lionbridge, or with another bidder making a higher or
otherwise better offer at the auction, will be subject to final
approval by both the U.S. Bankruptcy Court and the Ieper
Commercial Court of Belgium.

Upon the courts' approval of the sale, the pending transaction
between L&H and Lionbridge (or another bidder submitting a
higher or otherwise better offer at the auction) is expected to
be consummated during the third quarter of 2001. Under the terms
of the agreement, Lionbridge will co-own with L&H certain
language translation technologies, such as iTranslator(TM), that
are related to Mendez's core business activities. In addition to
the $27 million cash transaction, L&H will receive a separate
payment of approximately $6 million, upon consummation of the
agreement, from Mendez to satisfy all outstanding inter-company
liabilities due the Company.

          About Lernout & Hauspie Speech Products

L&H is a global leader in advanced speech and language
solutions. L&H is making the speech user interface (SUI), the
keystone of simple, convenient interaction between humans and
technology, and is using advanced translation technology to
break down language barriers. L&H provides a wide range of
offerings, including customized solutions for corporations; core
speech technologies marketed to OEMs; end user applications for
continuous speech products; and document creation, human and
machine translation services, Internet translation offerings,
and linguistic tools. L&H's products and services originate in
the following four basic areas: automatic speech recognition
(ASR), text-to-speech (TTS), digital speech and music
compression (SMC) and text-to-text (translation). For more
information, please visit Lernout & Hauspie on the World Wide
Web at www.lhsl.com.

                 About The Mendez SA Group

Mendez is an industry-leading provider of integrated
translation, localization and documentation solutions, services
and technologies for businesses and the Internet. Mendez enables
global companies to adapt products, technical information and
corporate messages to international markets. Mendez offerings
include software localization, document translation, web site
globalization, and the iTranslator product family that combines
advanced machine translation technology with high-quality human
translation. Employing more than 950 full time staff and 5,000
consultants, Mendez operates on a worldwide basis with offices
in 19 countries. For more information, visit www.mendez.com.

Mendez and Mendez iTranslator are trademarks or registered
trademarks of Mendez N.V. or its affiliated companies, in the
U.S. and/or in other countries.


METRICOM INC.: S&P Slashes Ratings to D In Wake Of Bankruptcy
-------------------------------------------------------------
Standard & Poor's lowered its ratings on Metricom Inc. and unit
Metricom Finance Inc. to D and removed them from CreditWatch
negative (see list below).

The rating action follows Metricom's announcement that it filed
for Chapter 11 bankruptcy protection on July 2, 2001.

Metricom is a wireless data provider that operates in 13
markets. Its primary product, Ricochet, is able to deliver user
speeds of up to 128 kilobits per second, but the number of
subscribers has been constrained because the service is only
available in select markets. The company recently began scaling
back its business plan and reducing its workforce.

Ratings Lowered And Removed From CreditWatch Negative:

Metricom Inc.                            TO            FROM
   Corporate credit rating                D              CCC
   Senior unsecured debt
    (Co-issued by Metricom Finance Inc.)  D              CCC
   Shelf registration:
    Senior unsecured debt         prelim. D      prelim. CCC
    Preferred stock               prelim. D      prelim. C


LOEWEN GROUP: Settles Aniss Cherkaoui's Sales Commission Claims
---------------------------------------------------------------
The Loewen Group, Inc. sought and obtained the Court's
authority, pursuant to section 363 of the Bankruptcy Code and
Rule 9019 of the Bankruptcy Rules, for LGII's to enter into a
Settlement Agreement and Mutual Release with Aniss Cherkaoui, a
sales mananger employed by LGII, regarding the amount of
commission for a sale of property (the Hotung Transaction).

Cherkaoui originally claimed commission at the amount of
$353,100. The Debtors, on the other hand, consented to a far
lower amount of approximately $110,000. Cherkaoui complained to
the State Court. The Settlement provides for, among other
things, that LGII will pay Cherkaoui the total sum of $150,000
and Cherkaoui has agreed to dismiss the State Court Action, and
release and indemnify Covered Parties on LGII's side.

         Events Giving Rise to the Dispute and Settlement

Cherkaoui was employed by LGII as a sales manager at a cemetery
operated by the Debtors -- the Valley of the Temples Cemetery, a
cemetery in Honolulu, Hawaii.

The Debtors have adopted guidelines that govern the commissions
to be paid to preneed sales counselors and sales managers based
upon their sales of "approved cemetery products" that are
"acceptable contracts."

Broadly speaking, the Guidelines provide for base commissions in
accordance with revenue generated by the sale, less costs
incurred for perpetual care. In certain circumstances, sales
managers are entitled to certain other "overrides" and
"enhancements". The Debtors have also paid bonuses to certain
sales counselors and sales managers. A significantly different
commission structure applies to "bulk sales."

During May 2000, Cherkaoui began to negotiate the sale of an
approximately one-acre plot within the Cemetery with Eric Hotung
for a proposed purchase price of $1.1 million. In June 2000,
Hotung agreed to the $1.1 million purchase price and executed
certain transactional documents but these documents were not
entered into by LGII at that time. In addition, Hotung provided
the Debtors with a down payment in respect of the proposed
transaction. The Debtors reviewed the proposed sale on a
preliminary basis and determined that further analysis of the
adequacy of the sale price was required. Accordingly, the
Debtors deferred final internal approval of and entry into the
Hotung Transaction pending further review.

As part of their review of the Hotung Transaction, the Debtors
sought to determine the net amount that would be realized from
the transaction after commissions were paid. Cherkaoui and the
Debtors, however, disagreed over the amount of the commission.
Cherkaoui asserted that the total commission would be
approximately $353,100. The Debtors, however, believed that the
Hotung Transaction constituted a "bulk sale" under the
Guidelines, giving rise to a far lower commission of
approximately $110,000.

After engaging in negotiations, Cherkaoui and the Debtors were
unable to resolve their dispute.

On or about August 14, 2000, Cherkaoui filed a complaint against
LGII in the Circuit Court of the First Circuit of the State of
Hawaii in the matter captioned as Aniss Cherkaoui v. The Lowen
[sic] Group International. Inc. Civil No. 00-1-2477-08 (the
"State Court Action"). By the Complaint, Cherkaoui asserts
causes of action against LGII for breach of contract and
promissory estoppel. Cherkaoui seeks compensatory damages in the
amount of $353,100, which is the amount of commission claimed by
Cherkaoui, plus punitive damages, attorneys' fees and other
amounts.

On or about September 8, 2000, LGII filed its answer to the
Complaint. After filing the Answer, the Debtors completed their
analysis of the Hotung Transaction, as well as Cherkaoui's
claims in the State Court Action, and determined that it was in
the best interests of LGII's estate to consummate the Hotung
Transaction as an ordinary course business transaction.
Accordingly, the Debtors have consummated the Hotung Transaction
and also have negotiated the terms of the Settlement Agreement
to resolve their dispute with Cherkaoui.

                        The Settlement

(A) Settlement Amount

      The total sum of $150,000 that LGII has agreed to pay
      Cherkaoui will be allocated to three different components:

             (1) $110,000 in commission;
             (2) $25,000 in general damages; and
             (3) $15,000 in attorneys' fees.

      The Settlement Amount is to be paid within 14 days after
      the Court's approval of the Settlement Agreement.

(B) Employment of Cherkaoui

      Cherkaoui and LGII have agreed that, under certain
      conditions, Cherkaoui would remain employed by LGH through
      at least March 31, 2001 and LGII will have no obligation to
      employ Cherkaoui after that date.

(C) Release By Cherkaoui

      Cherkaoui has agreed:

      (1) to release LGII and its former and present employees,
          officers, agents, attorneys, subsidiaries, affiliates,
          successors and assigns (collectively, the "Covered
          Parties") from any and all claims or causes of action,
          including the claims and causes of action asserted in
          the State Court Action. This release, however, relates
          only to the Hotung Sale.

      (2) not to sue the Covered Parties in any forum with
          respect to the matters released in the Settlement
          Agreement.

      (3) to indemnify, defend and hold LGII harmless from and
          against any claim based upon certain acts or omissions
          of the Covered Parties described in the Settlement
          Agreement.

      (4) to dismiss the State Court Action with prejudice.

(D) No Admission of Liability

      The Settlement Agreement and the payment of the Settlement
      Amount shall not constitute an admission of liability by
      LGII in respect of the causes of action asserted in the
      State Court Action.

(Loewen Bankruptcy News, Issue No. 41; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


MEDCOM USA: Nasdaq Delists Shares From Trading
----------------------------------------------
MedCom USA (OTC Bulletin Board: EMED), a leader in the
healthcare information technology field, has received a notice
of delisting from Nasdaq and is now trading on the OTC Bulletin
Board.

The decision to delist MedCom's securities was based on the
Company's failure to comply with Nasdaq's bid price requirement,
as set forth in Nasdaq Marketplace Rule 4310(c)(04). MedCom
will, within 15 days, appeal the decision to the Nasdaq Listing
and Hearing Review Council, as allowed under Nasdaq Marketplace
Rule 4860.

                    About MedCom USA:

MedCom USA, Inc. provides innovative technology-based solutions
for the healthcare industry that help the users to efficiently
collect, utilize, analyze and disseminate data from payors,
providers and patients. The Company's healthcare business units
include: The Internet Healthcare Solutions (IHS) Center which
provides ASP (Application Service Provider) through the Health
Information Gateway (HIG) as well as SSP (Storage Service
Provider) solutions that meet the information outsourcing needs
of healthcare provider and payor organizations, and MedCard, an
easy to use, cost-effective solution for physicians, clinics and
hospitals that offers on-line verification of insurance
eligibility, electronic referrals, 100% paperless claims
processing, patient easy pay and credit and debit card
processing. MedCom's corporate web address: www.medcom.net.
MedCom and MedCard are trademarks of MedCom.


MESA OFFSHORE: PCX Equities Delists Units
-----------------------------------------
Mesa Offshore Trust (OTCBB:MOSH) announced the Trust has been
advised by the Equity Qualification Department ("EQD") of PCX
Equities, Inc. ("PCXE") that the units of beneficial interest in
the Trust have been delisted from the Pacific Exchange, Inc.
effective May 18, 2001.

The EQD's determination was based upon the Trust's deficiencies
with respect to the net tangible assets and share bid price
components of PCXE's Tier II listings maintenance requirements.

The Trust Units are now eligible for trading on the OTC Bulletin
Board under ticker symbol MOSH. Absent trading on the OTC
Bulletin Board, the Trust Units may be traded on pink sheets.
Persons desiring to effect purchases or sales of Trust Units may
continue to contact their brokers for such purposes.


MICROLOG CORPORATION: Receives Nasdaq's Notice of Delisting
-----------------------------------------------------------
Microlog Corporation (Nasdaq:MLOG) has received notification
from Nasdaq that it has not maintained a minimum net tangible
assets/market capitalization/net income requirement as required
by Nasdaq Marketplace Rule 4310(c)(02)(B), and the Company's
securities are proposed to be delisted from the Nasdaq SmallCap
Market.

Microlog is appealing the decision and requesting a 90-day
extension. The Company also has appealed the previously
announced Nasdaq decision related to share price at a formal
hearing on June 1. The Company requested a 90-day extension of
the compliance period at the June 1st hearing, and will
reiterate this request today in a written response to this
latest notification.

John Mears, President and CEO, stated "We have appealed to
Nasdaq on the basis that events in the next two to three months
may have the potential to resolve their concerns. The Company
desires to maintain its Nasdaq listing, and believes that
Nasdaq's delaying action in this matter will best serve the
interests of all concerned."

Microlog Corporation is an interactive communications software
company that provides leading-edge Web-based customer
interaction management products and services for businesses
seeking to better serve their customers.

Microlog offers uniQue, an integrated suite of products and
services that blend with existing corporate applications and
infrastructure to accomplish both automated response functions
(IVR, e-mail, and Web), as well as intelligent interactions
between customers and contact center agents.

Interactions today include telephone, e-mail, Web chat, Web
callback, Web collaboration, Web bulletin board, voice over IP,
Fax, and even scanned hardcopy mail. For additional information,
call 301/540-5500 or visit its Web site at www.mlog.com.


MICROS-TO-MAINFRAMES: Shares Face Delisting from Nasdaq
-------------------------------------------------------
Micros-to-Mainframes, Inc. ("MtM") (NASDAQ:MTMC), a leading
computer and communications technology management company
providing network consulting, engineering, and related services,
has been notified by NASDAQ that its common stock has failed to
maintain a minimum market value of public float of $5,000,000 as
required by the NASDAQ National Market under Marketplace Rule
4450(a)(2).

Accordingly, the Company's securities were scheduled to be
delisted from the National market as of July 5th, 2001.

MtM has filed an appeal by an oral hearing with the NASDAQ
Listing Qualifications Panel. A hearing request will stay the
delisting of the Company's securities pending the panel's
decision. There can be no assurance that the panel will grant
the Company's request for continued listing.

Micros-to-Mainframes can apply to list its securities on the
NASDAQ SmallCap Market. MtM feels that it would meet the
requirements for the SmallCap market at this time, should it
make application for such a listing.

Micros-to-Mainframes is a premier provider of network analysis &
diagnostics, management, architecture, design, implementation
and support services, as well as technology acquisition and
deployment workflow management systems serving the New York Tri-
State area since 1986. Micros-to-Mainframes' practices in
Network Analysis, Network & Systems Management, Internet
Services, IT Consulting, Data & Network Security, Network
Infrastructure Engineering, Integrated Communications,
Technology Acquisition and Deployment Workflow Automation and
Enterprise LifeCycle Managed Services create a comprehensive
computer and communication services suite. The Company maintains
sales, technology labs, help desk, network management operation
centers, training and service facilities in Valley Cottage, New
York, New York City, and Connecticut. Micros-To-Mainframes is
an authorized reseller/partner for Intel Corp, IBM, Dell
Computer, Compaq Computer, Hewlett Packard, Cisco Systems,
Citrix, Axent Technologies, AT&T, Level 3, Microsoft, and
Novell. For more information visit our web sites at www.mtm.com,
www.orderpc.com, www.1director.com and www.pivottech.com


N2H2 INC.: Requests Nasdaq Hearing Regarding Delisting of Shares
----------------------------------------------------------------
N2H2, Inc. (Nasdaq: NTWO), an Internet access management company
specializing in fast and scalable filtering solutions, has
requested a hearing before a Nasdaq Listing Qualification Panel
to review the scheduled delisting of N2H2's common stock from
the National Market System. N2H2 received a Nasdaq Staff
Determination notice dated March 26, 2001, indicating that its
common stock had failed to maintain a minimum bid price of at
least $1.00 as required for continued listing by Nasdaq
Marketplace Rule 4450(a)(05), and that its securities are,
therefore, subject to delisting. Under the Nasdaq rules, the
scheduled delisting is stayed pending the outcome of the
hearing, which is scheduled for August 2, 2001. N2H2 is actively
pursuing measures to bring it back into compliance with the
Nasdaq rules.

"With more than 16 million current users, a growing worldwide
customer base and rapidly evolving filtering technology, N2H2 is
on track to make some remarkable gains in the coming year
regardless of the outcome of our stock listing," said Philip
Welt, president and CEO of N2H2. "Our focus right now is on
guiding this company to profitability, delivering innovative
filtering technology and service to our customers and growing
our business to accommodate the rising Internet filtering
demands of the enterprise, ISP and school markets."

In recent company developments:

N2H2 is on track to exceed third quarter revenue forecasts by
more than 10 percent N2H2 has achieved more than 65 percent
customer conversion rate to its fee-for-service subscription
model -- generating more than $2.5 million in revenue The
company has transitioned its worldwide sales operations to an
indirect sales model intended to dramatically expand N2H2's
presence in the enterprise and ISP markets, and N2H2 has
recently appointed 13-year Microsoft veteran Philip Welt to
President and CEO of N2H2.

                     About N2H2, Inc.

N2H2 Inc. is an Internet access management company specializing
in fast and scalable filtering solutions. N2H2 Internet
filtering optimizes Web access, enabling organizations of any
size to conserve bandwidth, increase user productivity and limit
potential legal liability. In addition, N2H2's customizable
Internet filtering software enables enterprise organizations,
government institutions, ISPs and schools to control Internet
usage costs and deliver the most relevant content to Web users.

Founded in 1995, N2H2 has more than 16 million users and a
network of more than 1,800 filtering-enabled servers in the
U.S., Canada, Australia, UK, Germany, Japan, Chile, Mexico,
India and Bermuda. Additional information about the company,
which is based in Seattle, Washington, is available at
http://www.n2h2.com


NETZERO INC.: Shares Subject To Delisting From Nasdaq Market
------------------------------------------------------------
NetZero Inc. (Nasdaq:NZRO), one of the nation's leading Internet
access providers, received a Nasdaq Staff Determination on June
27, 2001, that it has not maintained compliance with the minimum
bid price requirement for continued listing set forth in
Marketplace Rule 4450(a)(5), and that its common stock is,
therefore, subject to delisting from the Nasdaq National Market.

NetZero has requested a hearing before a Nasdaq Listing
Qualifications Panel to appeal the Staff Determination. Nasdaq
is required to grant NetZero a hearing within 45 days of
receiving the request, and NetZero's listing status will not
change until a final determination has been issued by the Panel
following the hearing. NetZero is currently in compliance with
all other continued listing requirements. There can be no
assurance, however, that the Panel will grant the company's
request for continued listing on the Nasdaq National Market.


NEXTWAVE TELECOM: BFD Capital Extends US$200 Million DIP Loan
-------------------------------------------------------------
On June 13, 2001, the federal bankruptcy court supervising
NextWave Telecom Inc's Chapter 11 reorganization, approved a
$200 million debtor-in-possession convertible financing facility
from BFD Communications Partners, L.P., a fund managed by BFD
Capital, one of the leading private equity firms in Germany.

The loan includes $90 million to finance deployment of
NextWave's nationwide wireless network. "Having this financing
on hand enables us to resume critical construction activities.
The funds give us the capability to jump start our overall
network deployment effort while we put the finishing touches on
a reorganization plan that will fund a full scale network build-
out," said Allen Salmasi, the Chairman of NextWave's Board of
Directors.

"We are excited and pleased to be part of the evolution of
NextWave into one of the major wireless operators in the US",
said Peter Duerr, Managing Director of BFD Capital.

Last Friday, the US appeals court in Washington D.C. ruled in
favor of NextWave to re-instate the licenses that the Federal
Communications Commission attempted to cancel from NextWave
while the Company was in the process of reorganizing its
business affairs in bankruptcy. John D. Viener of Salans
Hertzfeld Heilbronn Christy & Viener and Emanuel C. Grillo of
Torys, BFD's co-counsel, jointly observed that - "the decision
is a strong affirmation of NextWave's rights and it is
consistent with earlier determinations that the FCC cannot
terminate these licenses". NextWave now owes the FCC roughly
$4.7 billion, but will be in possession of licenses that
garnered almost $17 billion in January 2001. NextWave shares
have gone up to $8 from $3 before the ruling. Some analysts are
predicting the stock could double from here.

                    About BFD Capital

Headquartered in Munich, BFD Capital invests primarily in
privately held companies in the US and Europe that operate in
focused high growth markets of converging information and
communication technology. Specific target markets are: optical
networking technologies, mobile internet, streaming media,
wireless services and infrastructure.

BFD credits its success to its ability to bring together some of
the most reputable and experienced industry leaders with
strategic insight to provide advice and direction to rapidly
growing companies as well as access to unique deal
opportunities.

                About NextWave Telecom Inc.

NextWave Telecom Inc was formed to build and operate personal
communications services ("PCS") networks. It intends to operate
primarily as a wholesaler, or "carriers' carrier", selling high-
quality digital wireless voice and data services to a broad
range of service providers. The company holds PCS licenses in
all top 10, 28 of the top 30 and 40 of the top 50 markets in US.


ORGANIC, INC.: Appeals Nasdaq Delisting Determination
-----------------------------------------------------
Organic, Inc. (Nasdaq: OGNC), an international Internet
professional services firm, received a Nasdaq Staff
Determination on June 27, 2001 indicating that the Company
failed to comply with the minimum bid price requirement for
continued listing under Marketplace Rule 4450(a)(5) and that
its securities are therefore subject to delisting from The
Nasdaq National Market. The Company has requested a hearing
before the Nasdaq Listing Qualifications Panel to appeal the
Staff Determination. The Company's common stock will continue to
trade on The Nasdaq National Market pending the Qualifications
Panel's final decision. There can be no assurance that the
Qualifications Panel will grant Organic's request for continued
listing. If the Company's stock is delisted from The Nasdaq
National Market, the Company may apply for listing on The Nasdaq
SmallCap Market, the OTC Bulletin Board or another quotation
system or exchange on which the Company could qualify. There can
be no assurance, however, that the Company will apply for
listing on another quotation system or exchange if its
securities are delisted from The Nasdaq National Market or that
if the Company does apply for listing that it would be eligible
initially for such listing or that if the Company does become
listed, that it would be able to maintain eligibility.

                  About Organic, Inc.

Organic, Inc., is a global digital services firm providing
premium business solutions, resulting in a positive measured
impact for a client's business. Professional services include
multi-platform user interface design and marketing, online media
buying and management, software engineering and technical
program management, systems integration, data analysis and
reporting, inventory and supply change management and customer
relationship management. Organic has gained significant
experience working with leading companies in the automotive,
retail, financial services, media, and telecommunications
industries, and has performed award-winning work for
DaimlerChrysler, Washington Mutual and Target Corp. Other
industry leading clients include Federated Department Stores,
Inc., British Telecommunications plc, General Electric Financial
Assurance Holdings, Inc. and PlayStation.com (America), Inc. In
the Internet professional services industry, Organic
(www.organic.com) has a history as an innovator. Having
developed a number of Web sites that were the first in category,
Organic also created Yahoo!'s user interface and logo, and
contributed to the development of Apache, the leading Web
serving application. Founded in 1993, Organic is headquartered
in San Francisco with offices in the U.S., Canada, Asia, Europe
and Latin America.


OWENS CORNING: Court Dismisses Suit Against Tobacco Industry
------------------------------------------------------------
Continuing a series of recent legal victories for the tobacco
industry, a Jefferson County, Miss., circuit court judge
dismissed all claims by Owens Corning (NYSE: OWC) seeking
reimbursement of funds the asbestos manufacturer has paid to
former asbestos workers.

In dismissing Owens Corning's claims, Judge Lamar Pickard
affirmed the recommendation of Special Master Robert W. Sneed.
In his report, Sneed recommended that the court find, "that
under Mississippi law, and the prevailing law in virtually all
jurisdictions, Owens Corning is prohibited by the remoteness
doctrine from recovering from the Tobacco Defendants for an
'indirect injury' sustained by Owens Corning."

Owens Corning, an asbestos manufacturer, had asserted various
claims based largely on the theory that they had "overpaid"
injury claims brought against them by asbestos workers. Owens
Corning claimed that tobacco use, not asbestos exposure, was the
cause of the alleged personal injuries. The company further
claimed that failure to warn asbestos workers who smoked of the
substantially increased risk of developing lung cancer caused
Owens Corning both to pay for more lung cancer claims, and to
pay more on individual claims.

"We believe the recommendation by the special master and the
decision by the judge are correct and consistent with the
overwhelming weight of authority from virtually every
jurisdiction that has considered third-party claims against the
tobacco industry, including eight U.S. courts of appeals," said
Daniel W. Donahue, senior vice president and deputy general
counsel for R.J. Reynolds Tobacco Company.

Donahue noted that the U.S. Court of Appeals for the District of
Columbia Circuit has dismissed a similar suit by a union health-
and- welfare fund because these types of claims against the
tobacco industry are: "too remote, contingent, derivative and
indirect to survive."

R.J. Reynolds Tobacco Company (RJRT) is a wholly owned
subsidiary of R.J. Reynolds Tobacco Holdings, Inc. (NYSE: RJR).
R.J. Reynolds Tobacco Company is the second-largest tobacco
company in the United States, manufacturing about one of every
four cigarettes sold in the United States. Reynolds Tobacco's
product line includes four of the nation's 10 best-selling
cigarette brands: Camel, Winston, Salem and Doral. In December
2000, Reynolds Tobacco was recognized by Fortune magazine as one
of the "100 Best Companies to Work For." For more information
about RJRT, visit the company's web site at www.rjrt.com. (Owens
Corning Bankruptcy News, Issue No. 12; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


PACIFIC GAS: Asks Court To Extend Exclusive Period To December 6
----------------------------------------------------------------
Pacific Gas and Electric Company filed a request with the U.S.
Bankruptcy Court to extend until December 6, 2001, the period
during which the Company has the exclusive right to file a plan
of reorganization in its Chapter 11 case. Under the current
timeline, the exclusivity period is set to end on August 6, 120
days after the Company's April 6 Chapter 11 filing.

The Company made the following statement regarding its request:
"Developing and filing a sound, comprehensive and feasible plan
of reorganization is the most important step we can take toward
completing the Chapter 11 process as expeditiously as possible.
Our request for an extension is intended to allow us the time
necessary to ensure that the plan we present is the appropriate
blueprint for meeting our obligations to creditors and emerging
from Chapter 11 with our financial strength reaffirmed. The
development of this plan is a top priority and our objective is
to file it as soon as practicable.

"We are well under way with this effort and are engaged in
productive discussions with creditors that are helping to inform
our development of the most feasible plan of reorganization.
"In the event further analysis is needed or additional meetings
with our creditors are desired in order to ensure that the plan
we file has their support, this extension provides extra time
for these efforts.

"We look forward to continuing our progress toward this goal and
to working with the creditors to reach resolution as soon as
possible."


PRO NET: Files Chapter 7 Petition in S.D. New York
--------------------------------------------------
Pro Net Link Corp. filed a voluntary petition for bankruptcy
under Chapter 7 of the United States Bankruptcy Code in the
United States Bankruptcy Court for the Southern District of New
York, according to its Form 8-K filing with the Securities and
Exchange Commission.

Pro Net Link, which is a development stage corporation, elected
to file for Chapter 7 bankruptcy due to: 1) Pro Net Link's
inability to meet its financial obligations as said obligations
become due, 2) the continued absence of any significant revenue
from business operations or otherwise, and 3) Pro Net Link's
inability to obtain new investment capital or to find a merger
or acquisition partner to allow operations to continue.

Under Chapter 7 of the United States Bankruptcy Code, a trustee
will be appointed to liquidate the assets of Pro Net Link and to
distribute proceeds, if any remain after payment of
administrative expenses, to the creditors of Pro Net Link, in
accordance with the Bankruptcy Code.


PRO NET: Case Summary & List of Creditors
-----------------------------------------
Debtor: Pro Net Link Corp.
         645 Fifth Avenue
         Suite 303
         New York, NY 10022

Chapter 11 Petition Date: July 2, 2001

Court: Southern District of New York (Manhattan)

Bankruptcy Case No.: 01-41827-reg

Judge: Robert E. Gerber

Debtor's Counsel: Michael E. Norton, Esq.
                   Robinson Murphy & McDonald
                   100 Park Avenue
                   New York, NY 10017
                   (212) 297-0100

Estimated Assets: $50 to $50,000

Estimated Debts: $1 million to $10 million

Debtor's List of Creditors (no claim amounts are disclosed):

      ADP
      PO Box 23487
      Newark, NJ 07189

      AST
      59 Maiden Lane
      New York, NY 10007

      Anchin Block Anchin
      1375 Broadway 18th Fl
      New York, NY 10018

      AT & T
      PO Box 277019
      Atlanta, GA 30384-7019

      Bowne
      345 Hudson Street
      New York, NY 10014-4502

      Business Wire
      44 Montgomery Street
      39th Floor
      San Francisco, CA 94104

      Cananwill
      1234 Market Street
      Suite 340
      Philadelphia, PA 19107

      Casella Hespos
      274 Madison Avenue
      New York, NY 10016

      Collardeau Jean Pierre
      58 W 58th Street
      New York, NY 10023

      Commerce One
      75 Remittance Drive
      Suite 3083
      Chicago, IL 60675-3083

      Comvision
      71 West 23rd Street
      New York, NY 10010

      Corpfin
      101 Barclay Street
      Suite 7W
      New York, NY 10286

      Corporate Accents
      307 West 38th Street
      New York, NY 10018

      Depository Trust Co.
      300 Waters Street
      New York, NY 10041

      Desktoplive Inc.
      32 Melrose Terrace
      Middletown, NJ 07748

      Dow Jones & Co.
      PO Box 4137
      New York, NY 10261-4137

      Dun & Bradstreet
      PO Box 75949
      Chicago, IL 60675-5949

      Federal Express
      PO Box 1140
      Memphis, TN 38101-1140

      Feldman Sherb
      805 Third Avenue
      New York, NY 10022-7153

      Gilbert Displays Inc.
      140 Cantiague Rock Road
      Hicksville, NY 11801

      IOS Capital
      PO Box 9115
      Macon, GA 31208-9115

      Keycommerce Inc.
      61 Spit Brook Rd.
      Nashau, NH 03060

      Kronish Lieb Wiener
      1114 Avenue of Americas
      New York, NY 10036

      Mackenzie Partners
      156 Fifth Avenue
      New York, NY 10010

      Manchester
      PO Box 18042
      Hauppage, NY 11788

      MCI
      PO Box 856053
      Louisville, KY 40285-5042

      MCS Business Solutions
      One International Blvd.
      Mahwah, NJ 07430-0631

      Mindcast Software
      700 SE Shoreland Drive
      Bellevue, WA 98004

      Network Solutions, Inc.
      PO Box 17305
      Baltimore, MD 21297-0525

      Olympic Tower Associates
      645 5th Ave.
      Suite 301
      New York, NY 10022

      Orkin Exterminating, Inc.
      106-01 101st Street
      Brooklyn, NY 11231

      PJ Mechanical
      135 West 18th Street
      New York, NY 10011

      Pitney Bowes
      PO Box 85042
      Louisville, KY 40285-5042

      Purchase Power
      PO Box 856042
      Louisville, KY 40285

      Realty Online
      1000 Madison Ave
      Norristown, PA 19403

      Savvis Communications Corp.
      PO Box 502880
      St. Louis, MO 63150-2880

      Scott Printing Corp.
      700 Central Avenue
      New Providence, NJ 07974

      Staples
      PO Box 9027
      Des Moines, IA 50368-9027

      United Healthcare of NY
      PO Box 740800
      Atlanta, GA 30374-0800

      Utog
      25-20 39th Avenue
      Long Island City
      NY 11101-3616

      Verizon
      PO Box 15124
      Albany, NY 12212-5124

      Weathernews Inc.
      333 W. El Camino Real
      Sunnyvale, CA 94087-1307


PSINET INC.: Moves To Pay Global Crossing's Prepetition Claim
-------------------------------------------------------------
PSINet, Inc. seeks authority to pay prepetition unsecured claims
of Global Crossing USA Inc. relating to capacity that the
Debtors acquired from Global Crossing pursuant to certain
indefeasible right to use ("IRU") agreements for service between
Miami and Buenos Aires, Buenos Aires and Rio De Janiero, and
Buenos Aires and Sao Paulo (the "Capacity"). The Debtors seek
authority to pay Global Crossing's outstanding prepetition
unsecured claim relating to the Capacity in the amount of
$2,033,577.

The PSINet Entities purchased from Global Crossing certain IRUs
of network capacity in fiber optic cable. These IRUs provide
part of the backbone of the Debtors' worldwide
telecommunications network. Global Crossing also provides
operational and maintenance support for the fiber backbone.
Because Global Crossing owns and controls the fiber optic cable,
PSINet cannot provide service over the Capacity without Global
Crossing's cooperation; and no other vendor can provide
operational and maintenance support for the IRUs.

Thus, Global Crossing is the Debtors' only viable source for the
Capacity. Suspension or loss of the Capacity would have a
significant adverse effect on the Debtors' ability to continue
to operate their business and maintain uninterrupted service to
their customers. This in turn will adversely impact the value of
the Debtors' assets and the likelihood of a successful
reorganization. Thus, in order to obtain and facilitate
essential postpetition support on acceptable terms, and pursuant
to an agreement between the parties, the Debtors seek to pay
Global Crossing as a Critical Trade Vendor to assure a
continuing supply of the Capacity.

                 The Dispute and Agreement

On September 28, 2000, PSI Networks Company and certain other
PSINet Entities (the PSINet Parties) entered into an agreement
with Global Crossing for the purchase of an IRU serving
Argentina and Brazil (the "Latin America Agreement"). Under the
terms of the Agreement, the PSI Parties were obligated, inter
alia, to make 12 equal quarterly payments of $2,033,577 on the
27th day of the first month of each quarter (January 27, April
27, July 27 and October 27) (each a "Quarter Day"), beginning
with the first Quarter Day after the activation of the IRU. Such
payments, however, were to be made on the later of (a) the date
the payment was due, or (b) 15 days after the receipt of an
invoice. The Latin America Agreement was subject to a Master
Agreement between PSINetworks Company and Global Crossing (the
"Master Agreement").

The PSI Parties and Global Crossings dispute whether the IRU was
activated within the meaning of the Agreement by January 27,
2001. Global Crossing, however, sent PSI Networks Company an
invoice, dated March 5, 2001, stating that payment on the first
quarterly payment due under the Latin America Agreement would be
due on March 27, 2001. Because the PSI Parties dispute that the
IRU was activated by January 27, 2001, they dispute any
obligation to make such payment.

Under the terms of the Master Agreement, a Notice of Default may
be issued if a monetary default continues unremedied for five
days. The PSI Parties received a notice of default, dated April
4, 2001, listing, inter alia, the PSI Parties' failure to make
the March 27, 2001 payment on the March 5, 2001 invoice as an
event of default under the Master Agreement.

Under the terms of the Master Agreement, the PSI Parties had 45
days from receipt of the notice of default to cure the alleged
payment default. In the event that such a default is not cured
in that period, Global Crossing may (i) suspend service provided
under the Agreement "until such payment default . . . has been
cured," and (ii) pursue any and all rights and legal and
equitable remedies, including its rights . . . to enforce [the]
. . . Agreement, and the right to terminate or cancel [the]
Agreement." The Master Agreement further provides that each
"notice, demand, certification or other communication given or
made under this Agreement shall be in writing and shall be
delivered by hand or sent by registered mail or by facsimile
transmission."

The PSINet Parties received a letter, dated May 30, 2001,
stating that the defaults declared in the April 4, 2001 notice
had not been cured, and demanding that the past due balance of
$2,033,577 be paid: "Should PSINetworks, Inc. not cure this
breach by making payment in full of the outstanding amounts due
by 12:00 noon (EDT) on May 31, 2001, we may suspend all circuits
relative to these invoices." (emphasis added). Global Crossing
did not provide the PSI Parties with any notice of an intent to
terminate the Master Agreement.

The Debtors attempted to pay Global Crossing's claim -- thereby
curing the alleged default -- at approximately 4:00 p.m. EDT on
May 31, 2001 by transmitting $2,033,577, by electronic means,
following the wire instructions set out on the invoices. That
wire transfer was rejected by Global Crossing.

At approximately the same time that the wire transfer was
rejected, the Debtors learned that Global Crossing had suspended
the provision of service to the PSINet Parties under the Latin
America Agreement.

The Debtors filed voluntary bankruptcy petitions with the Court
at 6:55 p.m. on May 31, 2001. After the filing of these
bankruptcy petitions and the entry of an Order for Relief by the
Court, Global Crossing informed the Debtor that the Latin
America Agreement was not "suspended," as the May 30, 2001
letter indicated, but rather had been "terminated."

In order to induce the Global Crossing Parties to restore
service to the PSI Parties under the Latin America Agreement,
and avoid the harm that would ensue if the Capacity were
terminated, the Debtors agreed to seek relief from this Court
for authority to pay the prepetition amounts due relating to the
Capacity on the ground that Global Crossing is a critical
vendor. In exchange for the Debtors' agreement to seek such
relief from this Court, Global Crossing agreed to restore (and
did in fact restore) the Capacity under the Latin America
Agreement.

                         *   *   *

The payment requested, the Debtors indicate, is subject to
Global Crossing's agreeing to supply the Debtors with the
Capacity on supply and credit terms that are the same or better
than those provided to the Debtors during the first quarter of
2001. The Debtors believe that Global Crossing will continue to
provide the Capacity on Acceptable Supply and Credit Terms if
the relief is granted and prepetition amounts are paid to Global
Crossing accordingly. In this regard, the Debtors reserve the
right to obtain written confirmation of the Acceptable Supply
and Credit Terms prior to paying any claim by Global Crossing.

The Debtors also request that all applicable banks and other
financial institutions be authorized and directed to receive,
process, honor and pay checks drawn on the Debtors' accounts
related to Global Crossing's prepetition claim, whether
presented prior to or after the petition date, provided that
sufficient funds are on deposit in the applicable accounts to
cover such payments. (PSINet Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


SERVICE MERCHANDISE: Removal Period Extended to Jan. 31, 2002
-------------------------------------------------------------
Service Merchandise Company, Inc. sought and obtained the
Court's approval, pursuant to Fed. R. Bankr. P. 9006, for a
further extension of the time period within which they may
remove pending proceedings, pursuant to 28 U.S.C. section 1452
and Fed. R. Bankr. P. 9027 through the longer of (a) January 31,
2002 or (b) 30 days after entry of an order terminating the
automatic stay with respect to any particular action sought to
be removed.

The Debtors remind Judge Paine that they are parties to numerous
judicial and administrative proceedings pending in various
courts or administrative agencies throughout the country, some
of which are extremely complex. Simply put, the Debtors need the
extension to give them additional time to determine, which, if
any, of the actions should be removed and, if appropriate,
transferred to the Bankruptcy Court for the Middle District of
Tennessee Nashville Division.

The Debtors submit that the extension will afford them a
sufficient opportunity to make fully informed decisions
concerning the possible removal of the actions, so as to protect
their valuable right economically to adjudicate lawsuits
pursuant to 28 U.S.C. section 1452 if the circumstances warrant
removal. (Service Merchandise Bankruptcy News, Issue No. 18;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


SITEL CORPORATION: S&P Downgrades Ratings To Low-B's
----------------------------------------------------
Standard & Poor's lowered its ratings on SITEL Corp. and placed
them on CreditWatch with negative implications.

The rating actions reflect negative revenue trends and weakening
profitability that are reducing financial flexibility and
pressuring covenants under the company's credit agreement. In
addition, SITEL has announced a restructuring plan that will
result in a pre-tax charge in the second and third quarters of
2001 of roughly $30 million. The charge includes asset write-
downs, severance costs, expenses to close or reduce facilities
and other related costs. The reduction of employees and excess
capacity is expected to yield annual savings of more than $20
million. However, EBITDA growth continues to be constrained by
the current general economic slowdown, operating issues in some
European markets, fairly significant declines in customer
acquisition revenue, and weakening margins.

SITEL is a worldwide leader in executing electronic customer
relationship management (eCRM) solutions for large corporations.
The company is attempting to transition to higher value-added
businesses, which could provide more profitable and stable
revenue streams than the company's historical focus on providing
out-sourced telephone-based customer service and sales programs.

For the quarter ended March 31, 2001, total revenue declined
7.4% to $184 million. Operating margins were 2.4% in the 2001
first quarter compared with 4.7% in the same period the previous
year. For the 12 months ended March 31, 2001, EBITDA plus rent
coverage of interest plus rent expense was 2.7 times (x). Total
revenue for fiscal 2001 is expected to be between $770 million
and $800 million, compared with $765 million in 2000, but EBITDA
is likely to be lower even on a pre-restructuring basis.
However, forecasts could be revised downward because of the
challenges related to bringing in new business and tangible
demand trends.

At March 31, 2001, total debt outstanding was about $125.3
million, and total debt to EBITDA was about 1.7x. Positive free
cash flow generation, borrowing availability under a $75 million
credit facility, and lack of significant near-term maturities
provide modest financial flexibility. Pressure on covenants
remains a concern given the challenges to revenue growth and
weakening operating performance.

The bank loan rating is rated the same as the corporate credit
rating. The facility is secured by substantially all of the
assets of the company and its subsidiaries. Still, the credit
cushion represented by the collateral has shrunk amid difficult
business conditions, negative revenue momentum, and margin
pressure. Although the credit facility is secured, based on
Standard & Poor's simulated default scenario, it is not clear
that a distressed enterprise value would be sufficient to cover
the entire loan facility.

Standard & Poor's will meet with management to discuss the
company's plans for improving profitability and enhancing
flexibility under its credit agreement.

Ratings Lowered And Placed On CreditWatch With Negative
Implications:

                                                 Ratings
SITEL Corp.                                 To            From
    Corporate credit rating                  B+            BB-
    Senior secured bank loan rating          B+            BB
    Subordinated debt rating                 B-            B


SUN HEALTHCARE: Wants to Divest Two THCI Facilities
---------------------------------------------------
On July 13, 2001, there may be an outcome on the argument
between Sun Healthcare Group, Inc. and the landlord Meditrust
over the requested divestiture of two facilities (the Divesting
Facilities). The names and information of these two facilities
cannot be reported here because the Debtors have only provided a
copy of the exhibit containing such information to the Landlord
and the Creditors' Committee for reason of sensitivity of the
information and any party in interest can only obtain a copy of
the exhibit from the Debtors or their counsel subject to
executing a confidentiality agreement

These facilities are among the approximately 81 facilities that
the Debtors identified for divestiture because they lose in the
aggregate approximately $2,496,660 per month, as previously
reported. They are among the weakest performing of the Debtors'
facilities and those over which the Debtors could not reach
agreement with the landlord for a going concern transfer. The
landlord is THCI Company LLC, f/k/a New Meditrust Company
(THCI), a Massachusetts business trust. According to the
Debtors' analysis, the Divesting Facilities constitute a
substantial ongoing economic liability for the Debtors,
aggregating in excess of approximately $3,640,000 of negative
yearly EBITDA, annualized based on the six months ending June
30, 2000. Therefore, the Debtors have determined that the
Facilities are unequivocally facilities that the Debtors must
divest in order to successfully reorganize.

The Debtors tell Judge Walrath that they have attempted to
negotiate mutually agreeable going concern transfers of the
Divesting Facilities on terms that are economically viable for
the Debtors and have engaged the Landlord in discussions with
respect to restructuring the entire portfolio of healthcare
facilities that the Debtors lease from the Landlord. The
Landlord, however, has indicated that it is not interested in
negotiating a going concern transfer of the Divesting Facilities
and has similarly refused to even discuss any changes to the
Debtors' remaining leases.

Because the Divesting Facilities constitute an ongoing economic
burden to the Debtors' estates, the Debtors simply cannot afford
to retain and continue to operate the Divesting Facilities any
longer. Therefore, the Debtors have determined to reject the
Leases and Provider Agreements associated with the Divesting
Facilities and commence the Transition Process pursuant to
applicable state law. Accordingly, the Debtors seek authority
to:

      (1) reject the real property leases entered into with
Meditrust and the Medicare and Medicaid provider agreements
relating to the Facilities;

      (2) transition and/or, if necessary, wind up operations of
the Divesting Facilities in accordance with relevant state law
transition procedures (the "Transition Procedures" or
"Transition Process").

By Motion, the Debtors also seek approval of the
Implementation Procedures governing the transfer of the
Divesting Facilities as that of other facilities previously
divested, and the treatment of related claims. The Debtors
remind Judge Walrath that the Implementation Procedures include
an opt-out mechanism which enables the Debtors to transfer a
Divesting Facility as a going concern, upon the consent of the
Landlord, if a new operator is identified during the Transition
Process.

                  The Landlord's Objection

THCI tells Judge Walrath that the only purpose of the Debtors'
Motion is to obtain a declaratory judgment from the Court as to
the enforceability of cross-default provisions in the 35 leases
between THCI and the Debtors, which should be pursued in an
adversary proceeding in accordance with Bankruptcy Rule 7001. To
circumvent procedural requirements, the Debtors have attempted
to disguise the true purpose of the Motion by crafting the
Motion as a motion to reject two Leases, the landlord accuses.
If the Debtors only are seeking to reject the Leases, the
landlord notes, the Debtors should develop and present for
approval a detailed divestiture plan for approval by the Court
but there is no transition plan in place and the Debtors are not
even in a position to reject the Leases.

Furthermore, with the sole exception of their request to proceed
with a closing of the Facilities in accordance with applicable
state and federal law, the relief sought by the Debtors in the
Motion is either contrary to or not authorized by the Bankruptcy
Code, THCI contends.

The landlord represents that, while Debtors seek to have the
Court treat the Leases as independent obligations to be assumed
or rejected, the Leases are, in fact, parts of a single
integrated transaction. Permitting the Debtors to reject the
Leases would amount to permitting the Debtors to reject the
Consent Agreement entered into by and between Meditrust, THCI's
predecessor in interest, and the Debtors in 1994, the landlord
contends.

The grouping of the lease obligations (including the Leases) and
the cross default provisions, THCI says, were expressly
negotiated by Meditrust and were critical to Meditrust' s
decision to consent to the Debtors' substituting for Mediplex.
The purpose and intent of the grouping arrangement, THCI tells
Judge Walrath, was to assure that less profitable facilities
were grouped with more profitable facilities so that each
grouping would remain profitable, with any acquiring entity
having to accept the "good with the bad." The further goal of
the grouping arrangement and cross-default provisions, THCI
remarks, was to avoid precisely what the Debtors are attempting
to accomplish with the instant motion --"cherry picking" the
profitable Facilities in a particular group and rejecting the
underperforming Facilities.

The landlord tells the Court that, pursuant to the Consent
Agreement, Meditrust consented to the Debtors' acquisition of an
integrated portfolio of leases, including the Leases, in
exchange for the Debtors' agreement to (a) integrate the leases
into groups with uniform durations and terms, to be transferred
or renewed together and (b) amend all leases to include agreed
upon universal terms, including cross default language.

Since the Consent Agreement is no longer "executory" (the
Debtors have received the agreed upon consideration from
Meditrust) and THCI's rights thereunder are vested, the Debtors
should not be permitted to reject that Agreement, the landlord
argues.

The starting point for analysis is the Consent Agreement itself,
THCI opines -- it is a single integrated document; it
restructures the entire Meditrust lease portfolio to (i)
coordinate lease durations; (ii) restrict rights to extend,
renew or assign leases within particular groups to an "all or
nothing" basis; (iii) provide for uniform rent increases and
(iv) require the amended and restated leases to include cross-
default provisions.

To permit the Debtors to break up this integrated arrangement
would deprive THCI of precisely the "benefit of the bargain" it
sought as consideration for permitting the Debtors to acquire
the Leases. The Debtors may not use the provisions of Section
365 of the Bankruptcy Code to deprive the non-Debtors of the
"essential part of their bargain."

           Background Regarding the THCI Leases

According to the landlord,

      -- THCI owns and leases 35 healthcare facilities with one
or more of the Debtors, including the Facilities. The Debtors
have neither assumed nor rejected these leases. THCI also holds
mortgages against the Debtors' interest in four other healthcare
facilities.

      -- Most of the leases or loans mentioned were originally
between Meditrust and subsidiaries of the Mediplex Group, Inc.
which was acquired by and merged into Sun Healthcare Group, Inc.
in 1994,

      -- In connection with Sun's acquisition of Mediplex, Sun
was required to obtain Meditrust's consent to the Merger under
the terms of existing agreements between Meditrust and Mediplex.
In a Consent Agreement dated January 27, 1994, Sun acknowledged
that Meditrust's consent to the acquisition was required.

      -- In late 1993, Meditrust was reluctant to give the
requested consent. The Mediplex portfolio involved a significant
portion of Meditrust's assets and Meditrust believed that Sun's
financial condition and operating experience were not as solid
as Mediplex's. Meditrust was understandably reluctant to have a
weaker and less experienced party responsible for the operation
of the healthcare facilities in which it had such a substantial
investment.

     -- In order to address the greater risk posed by Sun's
substitution for Mediplex as lessee, Meditrust required, among
other things, that the leases and loans governing the Mediplex
facilities be amended and restated. In particular, Meditrust
insisted that each of the leases and loans with Sun be cross-
defaulted, so that a default under any one lease or loan was a
default under all leases and loans. Meditrust also required that
the leases in the Mediplex portfolio be amended to assemble the
leased facilities into groupings. The leases within each group
would terminate at the same time and Sun's ability to purchase a
facility within a group, or to extend the term of a lease within
a group, required the same action be taken with respect to each
lease within the group. By grouping the leases, Meditrust would
be assured that any acquiror would be obligated to assume less
desirable facilities together with more desirable ones. Without
these agreements and acknowledgments, Meditrust would not have
consented to the Merger.

      -- Accordingly, Meditrust and Sun entered into the Consent
Agreement in January, 1994.

THCI asserts that the Consent Agreement is a fully integrated
agreement pursuant to which (a) Meditrust agreed to give its
consent to the Merger in exchange for these agreements set forth
in the Consent Agreement, (b) the parties agreed, after
extensive negotiation, on the specific grouping of facilities,
and (c) the parties agreed on a variety of modifications to the
leases to assure that the groups remained intact by
synchronizing termination dates.

The landlord contends that the Motion should be denied. As basis
for this contention, THCI argues that:

      -- "The leases are part of an integrated transaction and
cannot be rejected piecemeal";

      -- "Section 365 of the Bankruptcy Code does not allow the
Court to modify the terms of the Consent Agreement by severing
the leases from their integrated groups or by invalidating
cross- default provisions";

      -- "The lease grouping arrangements established in the
Consent Agreement constitute an integrated business transaction;

      -- Whether the leases between Meditrust and the Debtors
compromise one single integrated transaction is a question of
intent;

      -- The court in Kopel v. Pasquale Campanille, 232 B.R. 57
(Bankr. E.D.N.Y. 1999) has ruled that the enforcement of a
cross-default provision should not be refused where to do so
would thwart the non-debtor party's bargain.

      -- Meditrust would not have been willing to consent to
Sun's acquisition of Mediplex without recognition from Sun that
the cross-default provisions were part and parcel of each lease.
Further, each of the leases was amended and restated such that
Meditrust had a specific understanding with each of the Debtors
that the lease had a cross-default provision.

      -- Another approach to the cross-default analysis was
articulated by the court in In re Madison's Partner Group, Inc.,
67 B.R. 633 (Bankr. D. Minn. 1986) in which the court explained:

"A cross-default provision in a nonresidential real estate
lease that obligates a lessee to perform a contract that
the lessor is not a party to, should not be subject to cure
on assumption of the lease under 365 unless the lessor can
show either: (1) special consideration furnished by the
lessor in connection with the provision; or (2) prejudice
to the lessor's bargain by its nonperformance."

Here, THCI has established that Meditrust (1) furnished special
consideration in connection with the cross-default provisions,
and (2) that Meditrust's bargain would be prejudiced if the
cross-default provisions were dishonored.

      -- there is simply no provision in the Bankruptcy Code that
invalidates cross-default provisions.

      -- The cross-default provisions at issue were supported by
specific consideration - Meditrust's consent to the Mergers.

      -- to permit the Debtors to reject the Leases and to
declare the cross-default provisions unenforceable would be to
permit the Debtor to have the full benefit of the bargain struck
in the Consent Agreement, while stripping THCI of the benefit of
its bargain in the Consent Agreement. Such a result is contrary
to the principles of the Bankruptcy Code as well as general
equitable considerations.

Thus, THCI contends that the cross-default provisions are
enforceable.

The landlord also cautions that the impact of the rejection of
the two Leases, however, goes far beyond the enforceability of
cross-default provisions. These leases, THCI advises, contain
put options, extension options, purchase options and many other
requirements - all of which are premised on the existence of the
groupings of leases established in 1994. By rejecting two Leases
and notwithstanding the enforceability of the cross-default
provisions, the remaining leases will have non-curable defaults,
and, thus, the Debtors will be unable to assume those leases
under section 365(b)(l) of the Bankruptcy Code, the landlord
tells the Court. In addition, THCI says, even if the leases were
assumable, there would be certain conditions precedent to
various obligations and rights under the leases which could not
be exercised in light of the rejection of the two Leases.

Furthermore, the termination of the businesses at the Facilities
may create substantial liabilities against Sun Healthcare Group,
Inc., as guarantor, and the Debtors' other estates, depending
upon the reorganization structure, THCI notes. For example, Sun
Healthcare Group, Inc., as guarantor, may be responsible for
purchasing 33 facilities from THCI if the Motion is granted.
Thus, THCI notes, the Debtors' ability to develop a confirmable
plan may be hindered.

THCI cautions that, if the Court grants the motion, the Debtors'
ability to assume the other 33 leases with THCI and the Debtors'
ability to confirm a Plan would be severely impacted. In order
to reject the leases under the Bankruptcy Code, the landlord
notes, the Debtors must either (a) transition the Facilities to
new operators acceptable to THCI and to state and federal
authorities or (b) close down the Facilities, the Debtors must
comply with extensive federal and state healthcare regulations.
The end result will be termination of the Debtors' ongoing
business operations at the Facilities.

THCI cautions that the Debtor's termination of their business
operations at the 2 Divesting Facilities may create non-curable
defaults under the other 33 leases with THCI. The landlord
reminds the Court that unlike instances in which the Court has
been presented with and approved transition agreements
negotiated between the Debtors and a landlord, there is no
transition agreement here. The impact of the rejection of the
two leases, THCI tells the Court, goes far beyond the
enforceability of cross-default provisions. The THCI leases, the
landlord advises, contain put options, extension options,
purchase options and many other requirements, all of which are
premised on the existence of the groupings of leases established
in 1994; by rejecting two leases, the remaining leases will have
non-curable defaults, and the Debtors will be unable to assume
those leases under section 365(b)(1) of the Bankruptcy Code.
Even if the leases were assumable, there would be certain
conditions precedent to various obligations and rights under the
leases which could not be exercised in light of the rejection of
the two leases.

Furthermore, the termination of the businesses at the facilities
may create substantial liabilities against Sun, as guarantor,
and the Debtors' other estates, depending upon the
reorganization structure, THCI reminds. For example, Sun
Healthcare Group, Inc. as guarantor, may be responsible for
purchasing 33 facilities from THCI if the motion is granted, the
landlord cautions.

THCI also asserts that the Debtors must pay rent until the
leases are rejected in accordance with the Plain language of
Section 365(d)(3) of the Bankruptcy Code. (Sun Healthcare
Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


TCPI, INC.: Files Chapter 11 Petition in S.D. Florida
-----------------------------------------------------
TCPI, Inc. (OTCBB:TCPI), a worldwide marketer of point-of-care
medical diagnostic products and skin permeation enhancers, filed
a voluntary petition under Chapter 11 of the U.S. Bankruptcy
Code with the U.S. Bankruptcy Court in the Southern District of
Florida. TCPI is seeking immediate authority from the court to
pay in the ordinary course of business, as to its pre-filing
obligations, all vendors, brokers and employees. As in all
Chapter 11 cases, post-petition obligations to vendors,
employees and others will be honored and satisfied in the normal
course of business without the need to obtain court approval.

The Company intends to file with the court a plan of
reorganization for TCPI to emerge from bankruptcy in the future.
Elliott Block, Ph.D., President & Chief Executive Officer of
TCPI, said, "Chapter 11 reorganization provides a legal
framework that allows us to keep the business running normally
while we put our finances in order. Our intent is to emerge from
the proceedings as a stronger company."

Dr. Block continued, "This was a difficult, but absolutely
necessary, decision for TCPI to make. It is the only option that
will free TCPI from its overwhelming burden of debt and
litigation expenses incurred over the past years. TCPI has
already reduced its workforce by 58% since last September in
addition to other cost reductions. With a new capital structure
and the commitment of our management team and employees to
execute our strategy, I believe TCPI will become a viable
company marketing diagnostic products and licensing skin
permeation enhancer and drug delivery technologies."

     No Interruption in Production or Distribution Planned

All vendors of TCPI will continue to be paid, as to post-
petition obligations, in the normal course of business. Subject
to the court's approval, vendors of TCPI will be paid as to
their pre-petition obligations in the normal course of business.
TCPI continues to be committed to, and fully in support of, all
sales plans and programs with its customers. The Company will
continue to operate from its Pompano Beach headquarters.
Dr. Block said, "Over the past year, we struggled to find a
different solution for all our stakeholders. However, the depth
of the problems facing TCPI did not allow for any realistic
choice other than pursuing the necessary restructuring under
Chapter 11. While the Company did have in place financing
facilities to cover working capital, those facilities could not
be accessed because our shareholders did not authorize
additional common stock."

Dr. Block concluded, "We intend for this restructuring of our
financial obligations to free TCPI from its debt burden and
litigation expenses and put the reorganized TCPI on track for
economic viability and successful operations. I look forward to
working with our dedicated management team and employees, as
well as our suppliers and customers, to continue to build on
TCPI's foundation and reputation for quality and dependability."

                      About TCPI

TCPI, Inc. markets point-of-care medical diagnostic products,
including its pregnancy and ovulation detection tests, for use
at home, in physician's offices, and other healthcare locations
and distributes them worldwide through multiple marketing
channels. The Company also markets its patented SR-38(TM) skin
permeation enhancer and owns a patent-protected, proprietary
portfolio of transdermal and dermal drug delivery technologies.


UNIVERSAL AUTOMOTIVE: Nasdaq Plans To Delist Shares On July 9
-------------------------------------------------------------
Universal Automotive Industries, Inc. (Nasdaq: UVSL), a
manufacturer and distributor of brake parts for the automotive
aftermarket, announced that on June 29, 2001 it received
notification from Nasdaq that the Company did not sustain
compliance with Nasdaq's $2,000,000 minimum net tangible assets
requirement pursuant to Rule 4310(c)(2)(B). As a result, Nasdaq
intends to delist the Company's common stock and convertible
warrants effective July 9, 2001, subject to the appeal process
below.

The Company has submitted an appeal with Nasdaq's Hearing Panel
requesting a hearing into this matter. Once officially received
by Nasdaq, the hearing request will automatically defer the
delisting until the Panel makes a ruling. The Company will be
presenting its business plan to the Hearing Panel and will seek
to put in place steps to avoid delisting prior to any delisting
of its shares of common stock and convertible warrants. Included
in this plan will be presentation of the letter of intent
executed on July 3, 2001 between the Company and a US division
of a major foreign corporation primarily engaged in automotive
OEM and aftermarket calling for the issuance of $2,800,000 of
Preferred Stock, convertible into 1,400,000 shares of common
stock, subject to certain anti-dilution adjustments. The letter
of intent calls for a closing within 30 days of execution and is
subject to completion of due diligence and preparation of
mutually satisfactory definitive documentation.


US DIAGNOSTIC: Fails to Make $10 Million Payment Under Notes
------------------------------------------------------------
US Diagnostic Inc. (OTCBB:USDL) announced that it had failed to
pay the $10 million principal amount of its 6-1/2 percent
Convertible Notes that matured on June 30, 2001. This failure
constitutes a default under these notes and may also constitute
a cross default under other of the Company's debt instruments
which could entitle the holders of such instruments to
accelerate their maturity. As previously announced, the Company
is seeking to restructure its indebtedness, including the 6-1/2
percent Notes and is currently engaged in negotiations with its
secured and unsecured lenders.

Unless the Company can successfully restructure its
indebtedness, sell additional imaging centers or otherwise
obtain liquidity in the short term, the failure to make the
payments described above and other payments that are due, the
related defaults and potential cross defaults, the lack of
working capital and the inability to incur additional debt will
have a material adverse effect on the Company's ability to
maintain its operations, as well as its financial condition.
Moreover, if these matters cannot be resolved successfully, the
Company would be required to pursue other options, which could
include seeking a reorganization under the federal bankruptcy
laws.

US Diagnostic Inc. is an independent provider of radiology
services and owns, operates or manages 37 fixed site diagnostic
imaging facilities.


USG CORPORATION: Court Okays Continued Use of All Business Forms
----------------------------------------------------------------
USG Corporation uses numerous checks and a multitude of
stationery and other business forms. Brad B. Erens, Esq., at
Jones, Day, Reavis & Pogue notes that it's no secret USG filed
for bankruptcy protection -- it's on the front page of The Wall
Street Journal. It would be unduly burdensome and costly to
replace all of the Debtors' checks, stationery and other
business forms before they are exhausted.

By Motion, USG sought and obtained Judge Farnan's permission
to continue using all of their Prepetition Business Forms
(including, without limitation, letterheads, purchase orders,
invoices and checks) without the requirement that they bear a
"Debtor-in-Possession" legend. (USG Bankruptcy News, Issue No.
2; Bankruptcy Creditors' Service, Inc., 609/392-0900)


VLASIC FOODS: Taps Arthur Andersen As Internal Auditors
-------------------------------------------------------
By application, Vlasic Foods International, Inc. asks Judge
Walrath for authority to employ and retain Arthur Andersen as
internal auditors.

Joseph Adler, an officer of Vlasic Foods, relates that the
Company used to have an internal auditing department.  But some
time prior to Petition Date, Mr. Adler says, Vlasic outsourced
their internal auditing operations to Arthur Andersen.  The
Debtors want to continue this practice during the pendency of
these Chapter 11 cases.

Arthur Andersen is a firm of certified public accountants
operating throughout the United States since 1913.  It is one of
the 5 largest accounting and auditing, tax and consulting firms
in the United States. Arthur Andersen accountants have
significant experience in troubled and restructuring companies.

To avoid duplication of services, Mr. Adler tells the Court,
Arthur Andersen will solely provide internal auditing services
to the Debtors: (i) at the request of the Debtors; and (ii)
appropriately directed by the Debtors.

John V. Mckee, a partner in Arthur Andersen, assures Judge
Walrath that the firm holds no adverse interest against the
Debtors, its estates, creditors, shareholders, or any other
party-in-interest.

Mr. Mckee acknowledges that Arthur Andersen may have business
associations with certain parties-in-interest but it has no
connection with the Debtors' chapter 11 cases.  If the Court
approves the Debtors' application for Arthur Andersen's
employment, Mr. Mckee says, they will not accept any additional
engagements or perform any service in these cases for any entity
or person other than the Debtors.

Aside from compensation for professional services rendered, Mr.
Mckee adds, Arthur Andersen will seek reimbursement for
reasonable and necessary expenses incurred in connection with
their engagement by the Debtors, including but not limited to,
transportation, lodging, food, telephone, copying, messenger,
computer rental, etc.

Under a Letter Agreement dated August 1998, outlines the
professional service fee payment terms to Arthur Andersen:

Period Start Date:  8/1/1998        8/1/1999          8/1/2000

Period End Date:    7/31/1999       7/31/2000         7/31/2001

Estimated Hours:      4,000           4,300             4,300

Payment Dates and amounts within Period:

October 1st         $75,000           $85,000           $85,000
January 2nd          70,000            80,000            85,000
April 1st            70,000            80,000            85,000
July 1st             80,000            80,000            85,000
                    --------          --------          --------
Total:             $295,000          $325,000          $340,000

Hourly rates for discretionary and additional audit services
are:

                                              Staff   Partner/
                                                      Manager
                                              -----   --------
Routine Operational/compliance audits        $70      $150
Business Fraud Investigations                 90       175
Merger and Acquisition Consulting             90       175
IS/IT Controls Audit and Controls Consulting  85       150
Tax Consultation                             100       175
Due Diligence Investigations                  *         *
Other Services                                *         *

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


WARNACO GROUP: Moves To Establish Reclamation Claims Program
------------------------------------------------------------
J. Ronald Trost, Esq., at Sidley Austin Brown & Wood, in New
York, relates that The Warnaco Group, Inc. Debtors receive
sizeable shipments of inventory and supplies at various
locations throughout the United State and around the world
everyday.

Since it is highly possible that vendors may send reclamation
demand notices and file reclamation claims against them, the
Debtors believe it is critical to establish a streamlined
process for handling reclamation issues.

So, the Debtors sought and obtained an order establishing the
procedures for the processing and treatment of reclamation
demand notices and reclamation claims made against them in these
Chapter 11 cases:

      (a) The Debtors will file a report, on notice to parties-
in-interest, listing those reclamation claims, if any, that they
deem to be valid pursuant to the order requested herein;

      (b) Absent further order of the Court, such report will be
filed by the Debtors within 90 days after the day the Order
granting this motion is final;

      (c) If the Debtors fail to file such a report within the
required period of time, any holder of a reclamation claim may
bring a motion on its own behalf, but may not bring such a
motion earlier than 90 days after the day the Order granting
this motion is final;

      (d) All parties-in-interest shall have the right and
opportunity to object to the inclusion or omission of any
asserted reclamation claim in connection with such motion;

      (e) All reclamation claims allowed pursuant to the motion
will be treated as administrative expenses of the Debtors'
estates pursuant to section 503(b) of the Bankruptcy Code, which
the Debtors are authorized to pay prior to confirmation of a
plan of reorganization; and

      (f) In the event that the Debtors determine that particular
goods not necessary for the Debtors' business operations, the
Debtors request that the Court authorize the Debtors, pursuant
to section 546(g) of the Bankruptcy Code, in their sole and
absolute discretion, to make available goods for pick-up by any
reclaiming seller:

          (i) Who timely demands in writing reclamation of goods
pursuant to section 546(c)(I) of the Bankruptcy Code and section
2-702 of the Uniform Commercial Code as enacted in the
applicable state.

         (ii) Whose goods the Debtors have accepted for
delivery, and

        (iii) Who properly identified the goods to be
reclaimed. (Warnaco Bankruptcy News, Issue No. 3; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


WASTE SYSTEMS: Terminates Public Company Status
-----------------------------------------------
Waste Systems International, Inc. announced that the termination
of its registration as a public reporting company has become
effective. The Company will no longer be required to file public
reports, such as Forms 10-K and 10-Q. Waste Systems believes
that the costs and resources required to maintain public company
status outweigh any current benefit. As previously announced,
the Company filed for termination of its public company status
with the Securities and Exchange Commission on April 2, 2001.
The termination is now effective, following the end of a
statutory 90 day waiting period. As previously announced, Waste
Systems had filed for bankruptcy protection under Chapter 11 of
the U.S. Bankruptcy Code on January 11, 2001 and the Company's
common stock was delisted from the Nasdaq National Market at the
opening of business on February 20, 2001.


WASTE SYSTEMS: Completes Sale of New Hampshire Transfer Station
---------------------------------------------------------------
Waste Systems International, Inc. announced the successful
completion of the sale of its Londonderry, New Hampshire
transfer station, a non-core asset. The proceeds of that sale,
combined with available borrowing capacity under the Company's
revolving Debtor-in-Possession credit facility, provide the
Company with the liquidity necessary to complete all of its
anticipated capital projects in 2001.

WSI is a non-hazardous solid waste management company. The
Company currently has operations in Vermont, Central
Pennsylvania, Eastern New England, Upstate New York, and
Washington D.C. which serve commercial, industrial, and
residential customers.


WINSTAR COMMUNICATIONS: Rejecting Seven Executory Contracts
-----------------------------------------------------------
Winstar Communications, Inc. asks Judge Farnan for authority to
reject seven executory contracts:

      (1) Agreement for Technology Services with Affiliated
Computer Services;

      (2) Retainer Agreement with Dutko Group under which Winstar
hired a public policy management corporation to provide
professional services relating to the U.S. Congress, the
Executive Branch and other organizations;

      (3) Master Agreement with Media On Demand.com Inc.,
pursuant to which Winstar agreed to acquire encoding, switching
and application development services from MOD;

      (4) Master Service Order Agreement with Reflex
Communications where Reflex agreed to acquire certain wireless
fiber services from WinstarWireless. Reflex, Winstar notes,
filed its own bankruptcy case in March;

      (5) Master Purchase Agreement with Speedera Services under
which Winstar agreed to acquire certain broadband wireless
services from Speedera to service its web hosing and the
Office.com businesses;

      (6) Speedera Reseller Agreement with Speedera Networks,
Inc. relating to the resale of the Speedera services; and

      (7) Telecommunications Services Agreement with Teleglobe
USA Inc. under which Winstar agreed to acquire certain
telecommunications switching services in order to service
Winstar's international network.

James Patton, Esq., at Young Conaway Stargatt & Taylor, in
Wilmington, Delaware, explains that these contracts are no
longer beneficial or necessary to the Debtors or their estates.
The burdens outweigh the benefits and the contracts should be
rejected pursuant to 11 U.S.C. Sec. 365, Mr. Patton says. Even
if the Debtors were to assign their rights under these
contracts, Mr. Patton notes, no value would flow to Winstar's
estates. And, if the Debtors continue to maintain these
contracts, Mr. Patton adds, it would only needlessly consume
their scarce financial resources. (Winstar Bankruptcy News,
Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-0900)


BOOK REVIEW: AS WE FORGIVE OUR DEBTORS: Bankruptcy and Consumer
              Credit in America
---------------------------------------------------------------
Authors:    Teresa A. Sullivan, Elizabeth Warren, & Jay
             Westbrook
Publisher:  Beard Books
Softcover:  370 Pages
List Price: $34.95
Review by:  Susan Pannell
Order your personal copy today at
http://amazon.com/exec/obidos/ASIN/1893122158/internetbankrupt

So you think you know the profile of the average consumer
debtor: either deadbeat slouched on a sagging sofa with a three-
day growth on his chin or a crafty lower-middle class type
opting for bankruptcy to avoid both poverty and responsible debt
repayment.

Except that it might be a single or divorced female who's the
one most likely to file for personal bankruptcy protection, and
her petition might be the last stage of a continuum of crises
that began with her job loss or divorce. Moreover, the dilemma
might be attributable in part to consumer credit industry that
has increased its profitability by relaxing its standards and
extending credit to almost anyone who can scribble his or her
name on an application.

Such are among the unexpected findings in this painstaking study
of 2,400 bankruptcy filings in Illinois, Pennsylvania, and Texas
during the seven-year period from 1981 to 1987. Rather than
relying on case counts or gross data collected for a court's
administrative records, as has been done elsewhere, the authors
use data contained in the actual petitions. In so doing, they
offer a unique window into debtors' lives.

The authors conclude that people who file for bankruptcy are, as
a rule, neither impoverished families nor wily manipulators of
the system. Instead, debtors are a cross-section of America. If
one demographic segment can be isolated as particularly debt-
prone, it would be women householders, whom the authors found
often live on the edge of financial disaster. Very few debtors
(3.7 percent in the study) were repeat filers who might be
viewed as abusing the system, and most (70 percent in the study)
of Chapter 13 cases fail and become Chapter 7s. Accordingly, the
authors conclude that the economic model of behavior--which
assumes a petitioner is a "calculating maximizer" in his in his
decision to seek bankruptcy protection and his selection of
chapter to file under, a profile routinely used to justify
changes in the law--is at variance with the actual debtor
profile derived from this study.

A few stereotypes about debtors are, however, borne out. It is
less than surprising to learn, for example, that most debtors
are simply not as well-off as the average American or that while
bankrupt's mortgage debts are about average, their consumer
debts are off the charts. Petitioners seem particularly
susceptible to the siren song of credit card companies. In the
study sample, creditors were found to have made between 27
percent and 36 percent of their loans to debtors with incomes
below $12,500 (although the loans might have been made before
the debtors' income dropped so low). Of course, the vigor with
which consumer credit lenders pursue their goal of maximizing
profits has a corresponding impact on the number of bankruptcy
filings.

The book won the ABA's 1990 Silver Gavel Award. A special 1999
update by the authors is included exclusively in the Beard Book
reprint edition.

                            *********

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

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

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

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

                           *********

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

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

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

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
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contained herein is obtained from sources believed to be
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