TCR_Public/010710.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Tuesday, July 10, 2001, Vol. 5, No. 133

                            Headlines

24/7 MEDIA: Plans to Appeal Nasdaq's Delisting Determination
360NETWORKS: Obtains Approval To Maintain Existing Bank Accounts
AMERICAN AIRCARRIERS: Asks For More Time To Decide On Leases
AMERICAN SKIING: Receives Extension of Debt Covenant Waiver
AMF BOWLING: Seeks Court Approval Of $75,000,000 DIP Financing

ARCH WIRELESS: Moody's Junks Debt Ratings, Outlook Is Negative
BRIDGE INFORMATION: Assumes And Rejects Madison Ave. Leases
BRISTOL RETAIL: Files for Chapter 11 Bankruptcy Protection
BROADBAND OFFICE: Sells Assets to Yipes Comm. For $5.5 Million
CENTRAL VERMONT: Says Funds May Be Insufficient To Pay Debts

CENTRAL VERMONT: Electric Utility Gets Nod For 3.95% Rate Hike
CONTINENTAL INVESTMENT: Shareholders Approve Liquidation
ENLIGHTEN SOFTWARE: Nasdaq Delists Securities
FACTORY CARD: Seeks to Extend Lease Decision Period to Aug. 20
FOAMEX INT'L: PricewaterhouseCoopers Resigns As Accountant

ICG COMM.: U.S. Trustee Balks at Committee Retaining Houlihan
LAIDLAW INC.: U.S. Debtors Hire Jones Day As Lead Counsel
LA ROCHE: Seeks Fourth Extension Of Time To Decide On Leases
LERNOUT & HAUSPIE: Bar Date Order Excludes Affiliates
LOEWEN GROUP: Rejecting Florida Office Lease

LOGOATHLETIC: Obtains Court Nod To Sell Inventory To Reebok Unit
LTV CORPORATION: Retains Kaye Scholer As Special Counsel
LTV CORPORATION: USWA And Unsecured Creditors Reach Agreement
MARINER POST-ACUTE: U.S. Trustee Amends Creditors' Committee
METAL MANAGEMENT: Will Not Make SEC Filings On Time

N U PIZZA: Accumulated Deficit for Q3 2001 Reaches $7.3 Million
PACE HEALTH: Considers Liquidating And Distributing Assets
PACIFICARE HEALTH: Discloses New Tender Offer Pricing Terms
PACIFIC GAS: Reaches Long-Term Agreement With Calpine Corp.
PACIFIC GAS: CA Attorney General Asks SEC To Probe Cash Transfer

PLANVISTA CORP.: Raises $3.3 Mil In Private Placement Funding
PLIANT SYSTEMS: mPhase Technologies Intends To Purchase Assets
PSINET INC. Verizon & Worldcom Challenge Utility Injunction
RANCH *1: Files for Chapter 11 Protection in Manhattan
RANCH *1: Case Summary & List of 20 Largest Unsecured Creditors

RESEARCH INC.: Major Customer Defers Orders For Transport Units
SERVICE MERCHANDISE: Agrees To Amend Lease Of Store #559 In IL
SUN HEALTHCARE: Public Notice of NeuroFlex Sale
SUN HEALTHCARE: Settles Gerald A. Martin's Construction Claim
TAPISTRON INTERNATIONAL: Files Chapter 11 Petition in Tennessee

TAPISTRON INTERNATIONAL: Chapter 11 Case Summary
TELESYSTEM INTERNATIONAL: Proposes Private Exchange Offer
THCG, INC.: Completely Liquidates THCG, LLC Subsidiary
USG CORPORATION: Paying Prepetition Customer Obligations
VIDEO UPDATE: Wants to Implement "Pay to Stay" Retention Program

VITTS NETWORKS: Court Okays Bidding Procedures And Breakup Fee
VLASIC FOODS: Lincoln Graphics Resigns From Creditors' Committee
WARNACO GROUP: Retains Rosenman & Colin LLP As Special Counsel
WEINER'S STORES: Court Grants More Time To Consider Leases
WINSTAR: Seeks Court Nod For Stock Purchase Agreement With Datco

YOUTHVILLE: Pays Debt After Bankruptcy Filing

                            *********

24/7 MEDIA: Plans to Appeal Nasdaq's Delisting Determination
------------------------------------------------------------
24/7 Media Inc. (Nasdaq:TFSM), a global leader in multi-platform
interactive marketing, intends to request a hearing to appeal a
Nasdaq Staff Determination that the Company no longer complies
with the $1.00 minimum bid price requirement for continued
listing and that the Company's common stock is, therefore,
subject to delisting from the Nasdaq National Market, pursuant
to Nasdaq Marketplace Rules 4450(a)(5) and 4310(c)(8)(B).

The Company received a letter from Nasdaq dated July 6, 2001
stating that the Company's common stock will be delisted as of
the opening of trading on July 16, 2001, unless the Company
requests a hearing by July 13, 2001. Under Nasdaq rules, the
scheduled delisting will be stayed pending the outcome of the
hearing. Until then, the Company's common stock will remain
listed and will continue to trade on the Nasdaq National Market.

The hearing is expected to be held within 45 days of the date
that the request for a hearing is filed with Nasdaq. At the
hearing, the Company intends to request an extension of the time
to raise its share price. There can be no assurance the Panel
will grant the Company's request for continued listing.

If the appeal is denied, the Company's common stock will be
delisted from the Nasdaq National Market. In such event, the
Company's common stock will trade on the OTC Bulletin Board's
electronic quotation system, or another quotation system or
exchange on which the shares of the Company may qualify. The
Company's shareholders will still be able to obtain current
trading information, including the last trade bid and ask
quotations and share volume.

                  About 24/7 Media, Inc.

24/7 Media Inc. is a leading provider of end-to-end interactive
technology and marketing solutions and services for Web
publishers, online advertisers, advertising agencies, e-
marketers and e-commerce merchants. 24/7 Media provides a
comprehensive suite of media and technology products and
services that enable these client groups to attract and retain
customers worldwide, and to reap the benefits of interactive and
other electronic media. 24/7 Media's solutions include
advertising and direct marketing sales, ad serving, promotions,
email list management, email list brokerage, data analysis,
loyalty marketing, wireless and convergence solutions, all
delivered from the Company's industry-leading data and
technology platforms. 24/7 Media's ad serving technology,
Connect, is designed specifically for the demands and needs of
advertisers and agencies, Web publishers and e-commerce
merchants. 24/7 Media is based in New York. For more
information, visit www.247media.com.


360NETWORKS: Obtains Approval To Maintain Existing Bank Accounts
----------------------------------------------------------------
Operating guidelines established by the United States Trustee
require 360networks inc. to close all pre-petition bank accounts
and open three new "Debtor-in-Possession" accounts -- one
general operating account, a payroll account and one account to
segregate tax payments. 360 can't run its multi-billion dollar
business from three bank accounts, Vanessa A. Wittman, the
Debtors' Chief Financial Officer, tells Judge Gropper. Closing
and reopening dozens of bank accounts won't work either. The
Debtors have no difficulty guarding against improper transfers
from a bank honoring pre-petition checks post-petition.

It is obvious, Judge Gropper observed at the First Day Hearing,
that the Debtors could not close their existing bank accounts
and open new "debtor-in-possession" accounts without causing
severe disruption to their normal operating procedures and to
their ability to pay normal post-petition operating expenses in
the ordinary course. Existing relations with vendors -- with
whom good relations are critical to the Debtors' ability to
continue to operate their businesses -- could be adversely
affected by the inevitable delays resulting from the Debtors'
need to establish new accounts from which post-petition payments
would be made after the Petition Date. "The Debtors' Motion is
granted," Judge Gropper ruled. (360 Bankruptcy News, Issue No.
2; Bankruptcy Creditors' Service, Inc., 609/392-0900)


AMERICAN AIRCARRIERS: Asks For More Time To Decide On Leases
------------------------------------------------------------
American Aircarriers Support, Inc. and its debtor affiliates
seek entry of an order pursuant to section 365(d)(4), extending
the time within which the debtors may assume or reject certain
unexpired leases of nonresidential real property for an
additional fifty-nine days, through June 26, 2001.

The debtors, in consultation with the lenders, are in the
process of winding down their operations and need additional
time to determine the potential consequences of assuming,
assuming and assigning, or reject the leases.


AMERICAN SKIING: Receives Extension of Debt Covenant Waiver
-----------------------------------------------------------
American Skiing Company (NYSE: SKI) received an extension of a
waiver regarding certain financial covenants to its senior
resort credit facility. The waiver will be effective through
July 9, 2001.

The company has completed negotiations with Fleet National Bank,
which serves as agent and lead underwriter of the facility. The
waiver was granted to allow time for final approval by other
banks in the credit facility syndicate.

Assuming completion of the approval process, the amended
facility is expected to include new covenants consistent with
the company's business plan, and retroactively amend certain
financial covenants with respect to the Company's recently
completed third fiscal quarter.

The company also said that it was nearing completion of
negotiations with its real estate lenders and is close to an
agreement of a new capital infusion into the company. No
assurance can be given at this time that these negotiations will
be successfully concluded. The inability to successfully
renegotiate the terms of the senior resort credit facility or
the real estate credit facilities would likely have a material
adverse effect on the Company. The Company's management
encourages interested parties to review its recently filed Form
10Q for a more complete discussion of these matters.

               About American Skiing Company

Headquartered in Newry, Maine, American Skiing Company is the
largest operator of alpine ski, snowboard and golf resorts in
the United States. Its resorts include Steamboat in Colorado;
Killington, Mount Snow and Sugarbush in Vermont; Sunday River
and Sugarloaf/USA in Maine; Attitash Bear Peak in New Hampshire;
The Canyons in Utah; and Heavenly in California/Nevada. More
information is available on the company's Web site,
www.peaks.com.


AMF BOWLING: Seeks Court Approval Of $75,000,000 DIP Financing
--------------------------------------------------------------
AMF Bowling Worldwide, Inc.'s $5,000,000 of cash on hand,
collections on prepetition accounts receivable created by the
sale of inventory, and Bowling Center receipts won't be
sufficient to fund all of AMF's post-petition working capital
needs, Stephen E. Hare, AMF Bowling Worldwide, Inc.'s Executive
Vice President, Chief Financial Officer and Treasurer, tells
Judge Tice.  The Debtors require additional liquidity.  In fact,
Mr. Hare says, AMF anticipate a brief and predictable cash flow
decline for a 3-4 month period beginning in the summer in which
receipts may be less than operating disbursements, reflecting
the fact that (i) AMF Centers' customers historically turn to
outdoor pursuits during the summer months, (ii) AMF Products
builds up its inventory levels in anticipation of the Summer MOD
selling season in the United States, and (iii) Bowling Centers
expends a significant portion of its budget on capital
expenditures during this traditionally slower period.

The Debtors have determined, in the exercise of their sound
business judgment, that a debtor in possession credit facility
allowing them to obtain up to $75,000,000 million in new working
capital is necessary.  While actual borrowing needs under the
DIP Facility are projected to peak at approximately $18,600,000
million, a $75,000,000 million facility, Mr. Hare suggests, will
instill confidence in customers and trade vendors and,
therefore, support the Debtors' ability to generate future cash
flow through continued sales.

Prior to the commencement of these chapter 11 cases, Mr. Hare
relates, AMF solicited postpetition financing from various
financial institutions, other than Citibank.  Due to Citibank's
knowledge of the Debtors' businesses and that of the Prepetition
Lenders, the fact that a substantial portion of the Debtors'
prepetition working capital assets are encumbered by liens held
by or on behalf of the Prepetition Lenders, the need for
expeditious relief, the magnitude of the proposed financing, the
extent and value of the Prepetition Lenders' collateral relative
to the amount of debt, and the "prenegotiated" Plan that has
been agreed upon, the Debtors ultimately concluded that it was
in their best interests to seek debtor in possession financing
from Citibank and certain other of the Prepetition Lenders.
Nevertheless, the Debtors made inquiries with two other
prospective lenders, each of which is a major financial
institution providing chapter 11 financing to assure that
postpetition financing was obtained on competitive terms, which
reflect current market conditions.

Discussions with these Major Institutions confirmed that the
Debtors would be unable to obtain financing by merely offering
such lenders an administrative expense claim or a junior lien.
Rather, the proposed lenders were not comfortable moving forward
with a loan that included a non-consensual priming of the
Prepetition Lenders. Put differently, the Major Institutions
generally were not willing to entertain the possibility of
extending financing to the Debtors in a manner hostile to the
Prepetition Lenders. Consequently, the Debtors focused their
efforts on Citibank and engaged in extensive negotiations with
it to obtain competitive terms, which reflected current market
conditions for the Debtors' postpetition financing.  Ultimately,
the Debtors were able to secure a commitment from Citibank to
arrange a debtor in possession financing facility that offers
the Debtors appropriate levels of borrowing and competitive
terms and conditions, including pricing. Citibank's proposal was
the most attractive in terms of fees and rates and the Debtors
strongly believe that the proposal negotiated with Citibank was
the best financing available.

By Motion, the Debtors seek entry of an order:

       (A) approving, on an interim basis, the terms of a
           $75,000,000 Senior Secured Priming Debtor-In-
           Possession Credit Agreement dated July [__] 2001;

       (B) granting AMF immediate authority to borrow up to
           $25,000,000; and

       (C) scheduling a final hearing to consider entry of a
           final order approving the financing pact and giving
           AMF access to the full $75,000,000 available under the
           DIP Facility.

It is essential to AMF's businesses that the Company obtain
postpetition financing.  Marc Abrams, Esq., at Willkie Farr &
Gallagher, told Judge Tice that Arthur B. Newman at The
Blackstone Group, L.P. is prepared to testify that he worked
with AMF to prepare detailed projections showing the Debtors'
proposed cash expenditures and expected cash receipts. Under
these projections, the Debtors cannot meet their ongoing
postpetition obligations if they are not given access to Cash
Collateral of the Prepetition Senior Lenders. In addition,
although there will be a sustained period where cash flow from
operations will be adequate to support daily cash requirements,
postpetition financing will enable the Debtors to (i) increase
their available financial resources, (ii) engender confidence in
their vendors such that the Debtors are able to purchase goods
and services on normal trade terms, (iii) fund the operations of
certain Subsidiary Debtors during the summer months when such
operations generate lower cash flow, (iv) fund the payments set
forth in their first day orders, and (v) pay non-default rate
interest under the Prepetition Credit Facility.  Indeed, Mr.
Hare stresses, absent immediate relief, the Debtors believe they
will be unable to maintain uninterrupted business operations.

Under the Senior Secured Priming Debtor-In-Possession Credit
Agreement dated as of July [_], 2001, AMF Bowling Worldwide,
Inc., is the Borrower.  WINC's obligations to repay amounts
borrowed under the DIP Facility are guaranteed by AMF Group
Holdings Inc., and each of the Debtor Subsidiaries.

The loan package consists of a non-amortizing revolving credit
facility in an aggregate principal amount of up to $75,000,000,
with a $15,000,000 sublimit for letters of credit to be issued
thereunder.  Citibank, N.A., serves as Collateral Agent and
Administrative Agent for a syndicate of Initial Lenders:

       * Citibank, N.A.
       * Bank of Scotland
       * Farallon Capital Partners, L.P.
       * Farallon Capital Institutional Partners, L.P.
       * Farallon Capital Institutional Partners II, L.P.
       * Farallon Capital Institutional Partners III, L.P.
       * RR Capital Partners, L.P.
       * Foothill Capital Corporation
       * SSF Investments, L.P.

The DIP Facility matures on the earliest of (i) July __, 2002;
(ii) the date of termination in whole of the Working Capital
Commitments and the Letter of Credit Commitments, and (iii) the
effective date of a plan of reorganization involving WINC or any
Material Subsidiary.

In general terms, the Loan Parties have agreed to secure the
Obligations with, inter alia, (i) first priority liens on and
security interests in (subject to Permitted Liens) all
unencumbered property and interests, real and personal, tangible
and intangible, of the Loan Parties, whether now owned or
hereinafter acquired, all on the terms and conditions set forth
in the Loan Documents, in accordance with Section 364(c)(2) of
the Bankruptcy Code, (ii) junior liens on all property (other
than Prepetition Collateral) of the Loan Parties that is subject
to valid and perfected liens in existence at the time of
commencement of the Cases, in accordance with Section 364(c)(3)
of the Bankruptcy Code or becomes subject to a valid lien
perfected (but not granted) after the Petition Date to the
extent such post-Petition Date perfection in respect of
prepetition claims is expressly permitted under the Bankruptcy
Code, and (iii) first priority, senior priming liens on all
Prepetition Collateral in accordance to Section 364(d)(1) of the
Bankruptcy Code, and all existing liens on the Prepetition
Collateral for the benefit of the Prepetition Lenders shall be
made subject and subordinate to the perfected first priority
senior liens to be granted to the Administrative Agent, in each
case subject and subordinate to a $2,500,000 Carve-Out for
payment of the fees and expenses of professionals employed and
retained by the Debtors and any Statutory Committees, any
Examiner appointed under 11 U.S.C. Sec. 1104 (but not one with
expanded powers), and fees payable to the U.S. Trustee and the
Bankruptcy Clerk.

The Debtors grant the DIP Lenders a package of Collateral
including:

       (a) All stock of the Borrower and Guarantors and their
respective present and future subsidiaries, provided that such
Liens, in the case of any foreign subsidiary, shall be limited
to 65% of the voting stock of such foreign subsidiary (to the
extent Liens on any greater percentage would result in adverse
tax consequences to the Borrower), and such other property and
interests, real and personal, tangible and intangible, whether
now owned or hereafter acquired, of the Borrower and the
Guarantors including, without limitation, all inventory,
accounts, general intangibles, investment property, chattel
paper, goods, furniture, fixtures, equipment, intellectual
property, contracts, books and records, cash (respectively if
and as defined in the Uniform Commercial Code), and causes of
action, rights to payment including tax refund claims, insurance
proceeds and tort claims (including, subject to entry of the
Final Order, actions for preferences, fraudulent conveyances,
and other avoidance power claims and any recoveries under
sections 506(c), 542, 544, 545, 547, 548, 549, 550, 552(b) and
553 of the Bankruptcy Code), now owned or in which the Debtors
have any interest or hereafter acquired or in which the Debtors
obtain an interest; all present and future leasehold interests
in which the Debtors have an interest; all intercompany
indebtedness arising from any transfer of funds between Debtors
on or after the Petition Date in accordance with the cash
management system of the Debtors (as approved by the Court by
separate order), all real estate owned by the Debtors or in
which the Debtors have an interest and the products and proceeds
thereof, (in each case without regard to whether acquired prior
or subsequent to the Petition Date).

Loans under DIP Facility accrue Interest, at the option of the
Borrower, at:

       (A) A rate per annum equal to the sum of

          (i)  a margin of 1.5% and

         (ii) a fluctuating interest rate based on the highest of

             (a) Citibank's applicable base rate,

             (b) a rate based on the three week moving average of
                 applicable interest rates for certification of
                 deposit adjusted for reserve requirements, plus
                 a premium of 50 basis points and

             (c) the three week moving average of the estimated
                 annual assessment rate payable by Citibank to
                 insure U.S. dollar deposits; or

       (B) A rate per annum equal to the sum of

          (i)  a margin of 2.5% per annum and

         (ii)  a variable rate based on the London interbank
               market rate applicable two days before the
               borrowing, as adjusted to account for specified
               reserve requirements.

If an Event of Default is triggered, the interest rate increases
by 2% per annum.

The Debtors pay a variety of Fees and Expenses under the DIP
Facility:

       * a $1,312,500 Arrangement Fee;

       * a $100,000 annual Agent & Collateral Monitoring Fee;

       * non-refundable fee of 0.5% per annum for every dollar
         not borrowed;

       * 2.50% letter of credit fronting fees; and

       * reimbursement of all costs and expenses of the
         Administrative Agent and the Arranger.

Under the DIP Facility, the Lenders and the Debtors agree -- and
Judge Tice is asked to so order -- that the Creditors' Committee
shall have 60 days from its appointment within which to file any
objection or commence any such action with respect to the
Prepetition Senior Lenders' Claim or the Prepetition Senior
Lenders' Liens on the Prepetition Collateral, including, but not
limited to: (i) disallow the Prepetition Senior Lenders' Claim;
(ii) avoid any lien, security or collateral interest in the
assets of the Debtors claimed by the Prepetition Senior Lenders
in Prepetition Collateral; (iii) otherwise challenge the
validity, priority or extent of the Prepetition Senior Lenders'
claim or the Prepetition Senior Lenders' liens on the
prepetition Collateral; (iv) obtain any other relief of any type
or nature whatsoever, legal or equitable, against the
Prepetition Senior Lenders, or otherwise recover from the
Prepetition Senior Lenders on account of their relationship with
the Debtors prior to the commencement of these proceedings; and
(v) challenge the application of any Monthly Interest Payment.
Thereafter, any and all challenges to the validity, sufficiency,
extent, perfection, refinancing or avoidance of the Prepetition
Senior Lenders' liens on the Prepetition Collateral or the
Prepetition Senior Lenders' claim shall be forever barred.

The Debtors covenant with the DIP Lenders, inter alia, that:

       (A) Asset Sales are limited to (i) sales of Inventory in
the ordinary course of its business; (ii) in a transaction
authorized by Section [4].02(d) of the Credit Agreement,
restricting merger transactions of non-debtor affiliates; (iii)
sales or dispositions of obsolete or worn-out equipment in the
ordinary course of business; (iv) dispositions constituting the
creation of leasehold interests in the ordinary course of
business and consistent with past business practices; (v) sales
or transfers of Inventory to Subsidiaries of the Borrower in the
ordinary course of business on pricing terms consistent with
past practice; and (vi) sales of assets for cash and for fair
value in an aggregate amount not to exceed $10,000,000 in any
Fiscal Year; provided that in the case, the Borrower shall
prepay the Advances from the Net Cash Proceeds from such sale to
the DIP Lenders.

       (B) Lease Obligations are restricted such that the Debtors
will not permit any Subsidiary to create, incur, assume or
suffer to exist, any obligations as lessee (i) for the rental or
hire of real or personal property in connection with any sale
and leaseback transaction, or (ii) for the rental or hire of
other real or personal property of any kind under leases or
agreements to lease (other than Capitalized Leases) having an
original term of one year or more that would cause the direct
and contingent liabilities of the Borrower and its Subsidiaries,
on a Consolidated basis, in respect of all such obligations to
exceed $40,000,000 payable in any period of 12 consecutive
months.

       (C) Capital Expenditures are limited to:

                     Period                         Amount
                     ------                         ------
           July 2001 through December 2001        $30,000,000
           January 2002 through July 2002         $18,000,000

provided, however, that if for the period from July 2001 through
December 2001, the amount specified above for such period
exceeds the aggregate amount of Capital Expenditures made by the
Borrower and its Subsidiaries during such period, the Borrower
and it Subsidiaries shall be entitled to make additional Capital
Expenditures in the period from January 2002 through July 2002
in an amount equal to the Excess Amount.

       (D) EBITDA will not fall below:

                Period                                Amount
                ------                                ------
      Fiscal Quarter ending September 2001         $13,000,000
      Two Fiscal Quarters ending December 2001     $45,000,000
      Three Fiscal Quarters ending March 2002      $91,000,000
      Four Fiscal Quarters ending June 2002       $104,000,000

Brian S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, and
Benjamin Ackerly, Esq., at Hunton & Williams, serve as counsel
to the Prepetition Senior Lenders.  Constance Fratianni, Esq.,
at Shearman & Sterling, and Stephan W. Milo, Esq., at Wharton
Aldhizer & Weaver PLC, represent the DIP Lenders.

Steven R. Gross, Esq., at Debevoise & Plimpton, told Judge Tice
at the First Day Hearing that the Informal Committee he
represents sees the need for the DIP Financing Facility finds is
amenable to entry of an Interim DIP Financing Order.

The evidence before the Court, Judge Tice observed at the First
Day Hearing, shows that the Debtors are unable to obtain
unsecured credit or debt allowable as an administrative expense
under section 503(b)(1) of the Bankruptcy Code in an amount
sufficient and readily available for them to maintain ongoing
operations.  Moreover, the Debtors are unable to obtain
financing (other than the limited financing pursuant to the
Interim Order, which will bear the security described above)
that does not provide for the granting of the liens as described
above. Without emergency approval of borrowings under the DIP
Facility and approval of the use of the Prepetition Senior
Lenders' Cash Collateral on the terms and conditions described
in the Interim Order, the Debtors' objective of prosecuting
these chapter 11 cases and restructuring their businesses as a
going concern, while maintaining the value of their businesses
and assets for the benefit of their creditors and employees, may
fail without a fair opportunity to achieve the purposes of
chapter 11.

Under the circumstances of these cases, Judge Tice held, the
Debtors' Motion for interim authority to borrow up to
$25,000,000 under the terms of the DIP Credit Agreement should
be granted. Observing that the interim relief requested by AMF
is necessary in order to maintain ongoing operations and avoid
immediate and irreparable harm and prejudice to the Debtors'
respective estates, Judge Tice granted the Debtors' Motion
pending a Final DIP Financing Hearing to be held at 2:00 p.m. on
August 8, 2001. (AMF Bankruptcy News, Issue No. 1; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


ARCH WIRELESS: Moody's Junks Debt Ratings, Outlook Is Negative
--------------------------------------------------------------
Moody's Investors Service downgraded the senior notes of Arch
Wireless Communications, Inc. as well as the senior discount
notes issued by Arch Wireless, Inc. The outlook for the ratings
is negative while approximately $600 million of debt securities
are affected.

The downgrades are as follows:

      Arch Wireless Communications, Inc.

                                      From       To
                                      ----       --
      * 9.5% Senior Notes due 2004     B3       Caa3
      * 14% Senior Notes due 2004      B3       Caa3
      * 12.75% Senior Notes due 2007   B3       Ca
      * 13.75% Senior Notes due 2008   B3       Ca

      Arch Wireless, Inc.

      * 10.875% Senior Discount       Caa3       C
        Notes due 2008

Moody's says that the ratings action is taken in response to the
company's recently disclosed plan to exchange these notes for a
basket of debt and equity securities either through a voluntary
exchange offer or through a prepackaged bankruptcy proceeding.

The rating agency relates that the negative ratings outlook
reflects its concerns about the paging industry and the
sustainability of the company's cash flows. According to
Moody's, earnings from the traditional one-way paging have been
decreasing for a number of quarters and their expected
replacement took longer than anticipated.

Arch Wireless is a paging carrier in the US headquartered in
Westborough, Massachusetts.


BRIDGE INFORMATION: Assumes And Rejects Madison Ave. Leases
-----------------------------------------------------------
Bridge Information Systems, Inc. sought and obtained an order
authorizing them to assume and assign certain prime leases of
nonresidential real property and to reject its subleases.

Leased Site      Landlord           Subtenant       Cure Amount
-----------      --------           ---------         ---------
380 Madison Ave. TAG 380, LLC       Brooks Brothers   $8,414.04
New York, NY     c/o Cushman &      380 Madison Ave.
                  Wakefield          2nd Floor
                  51 W 2nd Street    New York, NY 10017
                  New York, NY       Attn: Mindy Novak
                  Attn: Robert
                           Benedetto
330 Madison Ave. 330 Madison Co.    DS Wolf          $28,815.60
New York, NY     c/o Mendik Realty  Associates
                  Company, Inc.      516 Fifth Avenue
                  330 Madison Ave.   14th Floor
                  New York, NY       New York, NY
                  10017              10036

The Debtors were authorized to assume its prime lease agreements
with TAG 380 and 330 Madison Company, and then assign it to
Brooks Brothers and DS Wolf Associates, respectively.

Lloyd A. Palans, Esq., at Bryan Cave, in St. Louis, Missouri,
convinced the Court that the assumption and assignment of the
prime leases to the subtenants is in the best interests of the
Debtors because it will add value to their estates.

     (A) 380 Madison Avenue Leased Site

Judge McDonald ordered Brooks Brothers Inc. to pay to the
Debtors the amount of $33,414.04.  From the amount, the Debtors
will in turn pay $8,414.04 to TAG 380.  After these payments are
completed, the Debtors obligations to the prime lease with TAG
380 is considered satisfied.  The sublease is also rejected.

     (B) 330 Madison Avenue Leased Site

330 Madison Avenue Company earlier objected to the Debtors
motion.  They expressed apprehension over the assignment of the
prime lease to DS Wolf Associates.  The lease expires in
September 2006.  Among other things, the landlord doubted the
subtenant's capability of paying its obligations for the next 5
and 1/2 years.

But DS Wolf convinced Judge McDonald that they are more than
capable of meeting the lease obligations.  Robert E. Eggmann,
Esq., at Copleland Thompson & Farris, in St. Louis, Missouri,
relates that Wolf has been occupying the leased site for almost
five years now, has been paying its rent on time and has
fulfilled its obligations under the sublease.  Past performance
is perhaps, Mr. Eggmann contends, the best assurance of future
performance.

Judge McDonald also directed the subtenant to remit the amount
of $77,302.83 to, or on behalf of, the Debtors, on or before the
date on which the Court order becomes final:

       (i) Subtenant shall remit, on behalf of the Debtors, the
amount of $52,302.83 to the landlord, 330 Madison Company.  The
amount represents satisfaction in full of the Debtors' pre-
petition obligations the landlord under the Prime Lease; and

       (ii) Subtenant shall remit the amount of $25,000 to the
Debtors.

When the Court order becomes non-appealable, the law firm -
Bryan Cave LLP - shall be authorized to disburse to the parties
the amounts:

       (i) To the Debtors, a check payable to "Bridge Information
Systems America, Inc.' in the amount of $43,385.84; and

       (ii) To Subtenant, a check payable to "DS Wolf Associates,
Inc." in the amount of $35,632.50.

These amounts are currently held in escrow by Bryan Cave LLP and
represent the monthly installments of the rent due from
subtenant for the months of April 2001 and May 2001.

The court also ordered the subtenant to remit to the Debtors the
amount of $6,460.60, on or before the final determination date.
This amount, together with the $43,385.84 remitted to the
Debtors, shall satisfy all of subtenant's obligations under the
sublease through and including the effective date.

The Debtors are also directed to remit to landlord the amount of
$7,937.85 (post-petition amount).  Together with the cure
amount, this post-petition payment shall satisfy all of the
Debtors' obligations under the prime lease from February 15,
2001 to the effective date.

Effective as of the effective date, the Debtors are authorized
to reject the sublease.  Upon payment of the assignment fee, the
post-petition amount and all amounts:

       (i) The Debtors shall have no further obligations to
landlord with respect to the Prime Lease,

       (ii) The Debtors shall have no further obligations to
subtenant with respect to the Sublease, and

       (iii) Subtenant shall have no further obligations with
respect to the Sublease. (Bridge Bankruptcy News, Issue No. 10;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


BRISTOL RETAIL: Files for Chapter 11 Bankruptcy Protection
----------------------------------------------------------
Bristol Retail Solutions Inc. has voluntarily filed for
protection under Chapter 11, of the Federal Bankruptcy Code.
Bristol is a wholly owned subsidiary of VoiceFlash Networks Inc.

Mr. Lawrence Cohen, Chairman of VoiceFlash Networks, added, "The
company has initiated its reorganization and restructuring of
its recently acquired subsidiary, Bristol Retail Solutions." Mr.
Cohen also noted, "VoiceFlash's proprietary payment network is
the first secure wireless electronic payment network to allow
transactions to occur at the point of sale, and Bristol's
infrastructure, distribution and management team are a very
critical component enabling VoiceFlash to deploy this network."
Mr. Cohen also added "Our management is moving swiftly and
aggressively to properly reorganize Bristol, as we believe this
quick and decisive action will allow us to retain and reorganize
this key asset."

The company recently acquired Bristol Retail Solutions Inc. as
an essential component for the company's proprietary wireless
consumer payment network, which is being developed utilizing the
Blue Tooth wireless platform.

                 About VoiceFlash Networks, Inc

VoiceFlash Networks, Inc. is a leader in the commercialization
and integration of BlueTooth wireless technologies into legacy
point of sale software and hardware systems. The Company's
technologies are being developed to lead the wireless evolution
by linking independent mobile devices, on a unified platform for
the management of personal consumer data via point-of-sale and
an open standards-based Application Programming Interface (API).


BROADBAND OFFICE: Sells Assets to Yipes Comm. For $5.5 Million
--------------------------------------------------------------
Broadband Office Inc. received court approval to sell its assets
to Yipes Communications Inc., according to Dow Jones. The sale
is valued at $5.5 million. The assets consist of roughly 4,100
building access agreements that Broadband had with various
building owners. Under terms of the agreement, Yipes will pay
Broadband $2.1 million in cash, supply warrants to purchase up
to $2.5 million in company stock, and forgive $900,000 that
Broadband owes to Yipes under a debtor-in-possession financing
agreement.

A key element of the sale agreement mandates that Yipes provide
the cure payments to a group of nine real estate investment
trusts. Of the $2.1 million cash payment, roughly $1.2 million
will go to settle lien claims by vendors and contractors of
Broadband against the purchased assets relating to the buildings
owned by the various REITs. The remaining $900,000 will cover
any other cure payments that the company deems necessary.
Approval from Judge Gregory M. Sleet of the U.S. Bankruptcy
Court in Wilmington, Del., comes after Yipes submitted the
winning bid at a June 29 auction. Also, Broadband received
approval to institute an employee retention program, which could
cost up to $960,000. (ABI World, July 6, 2001)


CENTRAL VERMONT: Says Funds May Be Insufficient To Pay Debts
------------------------------------------------------------
Central Vermont Public Service recorded net income of $3.9
million for the first quarter of 2001, which equates to a 6.4 %
return on average common equity. This compares to net income of
$8.0 million, and a 5.3 % return on average common equity for
the corresponding period last year.

Lower first quarter 2001 earnings compared to last year resulted
primarily from the following factors:

      * lower utility revenues of $4.0 million after-tax,
primarily resulting from lower average retail revenues in the
first quarter of 2001 compared to the same period in 2000 as a
result of a Vermont Public Service Board Order which
deseasonalized or equalized the Company's winter/summer rates
beginning July 1, 2000;

      * lower utility revenues of $1.0 million after-tax,
        primarily resulting from a 2.1% (13,622 mWh) decrease in
        retail mWh sales;

      * higher operating and other costs of $1.6 million after-
        tax, primarily due to higher service restoration costs
        related to the severe storm activity in March 2001; and

      * lower net losses in the first quarter of 2001 at
        SmartEnergy Services, Inc. of $2.5 million after-tax.

In the quarter ended March 31, 2001 Central Vermont Public
Service, on revenues of $78,032, had a net gain of $3,897. In
the same period of 2000, on revenues of $99,949, the Company had
a net gain of $7,959.

The Company says that it cannot assure its business will
generate sufficient cash flow from operations or that future
borrowing will be available to the Company in an amount
sufficient to enable the Company to pay its indebtedness,
including the $75.0 million second mortgage bonds, due in 2004,
or to fund its other liquidity needs. The Company's ability to
repay its indebtedness is, to a certain extent, subject to
general economic, financial, competitive, legislative,
regulatory, weather and other factors that are beyond its
control. The type, timing and terms of future financing that the
Company may need will be dependent upon its cash needs, the
availability of refinancing sources and the prevailing
conditions in the financial markets. The Company cannot
guarantee that financing sources will be available to the
Company at any given time or that the terms of such sources will
be favorable.


CENTRAL VERMONT: Electric Utility Gets Nod For 3.95% Rate Hike
--------------------------------------------------------------
On June 26, 2001 the Vermont Public Service Board approved
settlement agreement between the Vermont Department of Public
Service and Vermont's largest electric utility, Central Vermont
Public Service Corporation (CVPS), and permits CVPS to increase
its retail rates by 3.95 percent above current temporary rates.
The rate increase, and the resolution of issues arising from
CVPS's 1991 decision to commit to purchase power from Hydro-
Quebec, will provide CVPS with financial stability necessary to
assure quality service for the Company's customers. The Board
concludes that the interests of Vermont electric ratepayers,
both in CVPS's service territory and elsewhere, will be best
served by approval of the settlement agreement.

In addition to ensuring the financial viability of CVPS, the
settlement agreement provides a number of benefits to the
Company's customers, including:

      * Establishment of service quality standards to assure
continued high quality electric service for ratepayers;

      * A rate freeze through the end of 2002, absent
extraordinary circumstances;

      * A cap on CVPS's earnings for 2001, 2002, and 2003;

      * Final approval of rates for 1999-2001 (recognizing
unrecovered costs of approximately $25 million associated with
the contract to purchase power from Hydro-Quebec);

      * A write-off of $9 million of expenses that CVPS could
otherwise have sought from ratepayers, and the agreement by CVPS
not to seek additional millions of dollars that it might
otherwise be entitled to recover from ratepayers; and

      * Assurance that any proceeds gained from CVPS's (and other
Vermont utilities') arbitration of the power purchase contract
with Hydro-Quebec arising from the 1998 ice storm will be passed
on to ratepayers.

In addition to these ratepayer benefits included in the
settlement agreement, the Board imposes one supplementary
condition to further protect CVPS's customers:

      * A requirement that CVPS return to ratepayers up to $16
million as a share of any premium realized by the Company in any
future merger, acquisition, or asset sale.

Ratepayers have also benefited materially from (1) the earnings
penalty imposed by the Board in 1994 (the total effect of which
was $2.9 million); (2) CVPS's write-off of approximately $25
million of its Hydro-Quebec costs during the period in which
temporary rates were in effect in 1999, 2000 and 2001; and (3)
certain strategic decisions made by CVPS's Board of Directors.
For example, in December 1994 the Board of Directors reduced the
Company's dividend; this decision has resulted in an additional
$43 million in earnings being available for reinvestment. These
benefits to ratepayers play a significant role both in the
Public Service Board's decision to accept the MOU and in the
terms and conditions it adopted. In addition, according to CVPS,
the benefits to ratepayers resulting from CVPS's Board of
Directors' decisions show the value of a diverse, competent, and
professional Board of Directors.

The fundamental issue posed by CVPS's current rate request and
the settlement agreement is the rate treatment of CVPS's
purchases from Hydro-Quebec. Uncertainty as to CVPS's ability to
recover all of its costs for these purchases has existed since
1994, when the Board concluded that CVPS's decision to lock-in
early to the Contract to purchase power from Hydro-Quebec had
been imprudent. This uncertainty has adversely affected the
Company's credit rating and ability to raise capital. Large cost
disallowances could imperil CVPS's financial viability.

In its Order, the Board grants the rate increase based upon the
conclusion that maintaining CVPS's financial viability will
benefit ratepayers by ensuring that CVPS has access to capital
and can maintain quality electrical service. In accepting and
supplementing the settlement agreement, the Board follows past
Vermont rulings that require consideration of the financial
viability of a utility in setting its rates, as long as the
final rates remain fair to the utility's customers. CVPS's
present financial situation means that, without the rate
increase granted today, the Company's credit rating would likely
be downgraded to below investment grade. This would severely
hamper CVPS's ability to obtain capital at reasonable cost,
which in turn would impair CVPS's ability to meet new demand for
service and to upgrade or replace existing facilities so that
customers will receive reliable service. The Board concludes
that the higher rates provided for in the settlement agreement
will provide CVPS with sufficient revenues to operate consistent
with its public service obligations, retain access to capital
markets, and have a reasonable opportunity to maintain its
financial viability. CVPS's financial stability also will
benefit other Vermont utilities, by removing the possibility
that they would have to purchase CVPS's share of the Hydro-
Quebec contract in the event of a default, and by removing the
potential that VELCO, the state's transmission-owning utility
(which is primarily owned by CVPS), will be unable to obtain
capital due to CVPS's health. Thus, the Board approves rates
that (while in excess of those that would be allowed under a
traditional review of the utility's allowed costs of providing
service) are necessary to protect the interests of ratepayers.

The Board's Order also concludes that CVPS has not mitigated the
above-market cost of that power arising from the Company's early
lock-in to the Hydro-Quebec power purchase contract.
Nonetheless, the Order determines that, considering CVPS's
financial situation, it is in the best interest of ratepayers to
resolve the uncertainty regarding CVPS's ability to recover its
costs for purchasing power from Hydro-Quebec, and therefore
imposes no further disallowances.

Overall, the Order maintains CVPS's financial viability,
providing ratepayers with the strong prospect of a stable
company capable of maintaining and improving the quality of
service to its customers. Chairman Michael Dworkin said, "This
proceeding takes place in the shadow of a major economic strain.
The Hydro-Quebec power purchase has many attractive elements but
it also has high financial costs. While CVPS's shareholders,
through penalties, foregone revenues, and disallowances, will
have born more than $37 million in costs, ratepayers also will
bear much of the burden of the Hydro-Quebec power purchase
contract. The settlement agreement presents many advantages as
well as costs, but the greatest benefit to ratepayers is the
ability to move on from shared pain to a future in which CVPS
can focus upon providing quality service to its customers at
least cost."


CONTINENTAL INVESTMENT: Shareholders Approve Liquidation
--------------------------------------------------------
At a Special Meeting of the stockholders of Continental
Investment Corporation (Pink Sheets: CONI) on July 3, 2001,
eighty-three percent of its stockholders approved a
recommendation of the Board of Directors for the liquidation and
dissolution of the Company.

Additionally, on July 5, 2001, an order was entered in the U.S.
Bankruptcy Court for the Northern District of Texas (Dallas
Division) to close the Chapter 11 Bankruptcy proceeding of the
Company and appoint a substitute disbursing agent to oversee the
liquidation process. This court order allows the Company to
proceed with its orderly liquidation.

As a result of the stockholders' vote for liquidation, the
remaining directors of the Company resigned effective close of
business, July 6, 2001. The operations of the Company and the
sale of the Company's assets will be managed by the Disbursing
Agent appointed by the Bankruptcy Court.


ENLIGHTEN SOFTWARE: Nasdaq Delists Securities
---------------------------------------------
Enlighten Software Solutions, Inc. (Nasdaq: SFTW), a leading
provider of system management software for Linux, Unix, Windows
and FreeBSD, has been informed by the staff of NASDAQ that its
securities will be delisted from the NASDAQ Stock Market at the
opening of business on July 6, 2001. The delisting determination
followed a previously announced NASDAQ hearing on that issue
held on June 8, 2001. The Company does not anticipate that it
will appeal the determination.

"We are disappointed in the delisting decision," said Omar
Maden, CEO, Enlighten Software Solutions, Inc. "However, we
continue to believe strongly in Enlighten products, and in
particular our latest Enlighten WebDSM release. The Nasdaq
delisting will have no effect on our refocused marketing and
development efforts, which we believe will be the key to the
company's future success."

                     About Enlighten

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


FACTORY CARD: Seeks to Extend Lease Decision Period to Aug. 20
--------------------------------------------------------------
Factory Card Outlet Corp., and its debtor affiliates seek
approval of an extension of the time within which they may
assume or reject unexpired leases of nonresidential real
property.

A hearing on the motion is scheduled to take place on July 19,
2001 at 9:00 AM before the Honorable John C. Akard.

To date, the debtors have assume one lease, assumed and assigned
one lease,  and have terminated or rejected 47 leases, out of
approximately 223 store leases that they were a party to as of
the Commencement Date and have exited the Texas, Kansas and
Arkansas markets entirely.

The debtors and their professionals are currently engaged in
negotiations with many of their landlords regarding possible
lease modifications, including rental reductions. While the
debtors have made substantial progress in those negotiations,
they are not complete.

The Confirmation Hearing is scheduled to be held on July 18,
2001. Under the terms of the plan, the occurrence of the
Effective Date is subject to a number of conditions including a
post-Chapter 11 working capital facility.

The debtors request that the Assumption/Rejection Period be
extended through the earliest to occur of the Effective Date and
August 20, 2001.


FOAMEX INT'L: PricewaterhouseCoopers Resigns As Accountant
----------------------------------------------------------
Foamex International Inc. (Nasdaq: FMXI), manufacturer of
flexible polyurethane and advanced polymer foam products in
North America, announced on June 28, 2001, that Pricewaterhouse
Coopers LLP, its independent accountant, advised the company
that it resigned, effective immediately. Since the ratification
of PricewaterhouseCoopers as Foamex's independent accountant for
the year ending December 31, 2001 was to have been considered at
the Annual Meeting of Foamex's Stockholders, to be held June 29
at 10:00 a.m., Foamex adjourned its Annual Meeting until July
27, 2001 in order to file with the Securities and Exchange
Commission required information and to distribute a proxy
supplement to stockholders.

Foamex has been informed by PricewaterhouseCoopers that its
resignation does not affect its report on the Company's
financial statements for the year 2000. The Audit Committee of
Foamex's Board of Directors expects to select a new independent
accounting firm as soon as possible.

Foamex, headquartered in Linwood, Pennsylvania, is the world's
leading producer of comfort cushioning for bedding, furniture,
carpet cushion and automotive markets. The company also
manufactures high-performance polymers for diverse applications
in the industrial, aerospace, electronics and computer
industries as well as filtration and acoustical applications for
the home. Revenues for 2000 were $1.3 billion.


ICG COMM.: U.S. Trustee Balks at Committee Retaining Houlihan
-------------------------------------------------------------
Patricia A. Staiano, United States Trustee for Region 3, objects
to the Committee's application to retain Houlihan, telling Judge
Walsh that the proposed compensation and retention does not
comply with the requirements of the Bankruptcy Code.

The Trustee argues that the compensation sought by Houlihan is
excessive. The requested monthly fee of $250,000 for the first
four months exceeds the prevailing rate for such services in
chapter 11 cases, including fees billed by nationally known
major investment banking houses in equally large or larger cases
pending in this District. Furthermore, Houlihan does not appear
to provide for a credit of even a part of these monthly billings
against any subsequent success fee or transaction fee.

The Trustee objects to any suggestion that entry of an Order
granting the application is a preapproval of any success or
transaction fee.

The Trustee objects to any provision of the engagement letter
that limits or purports to limit Houlihan's liability to the
fees received.

The Trustee also objects to employment of Houlihan nunc pro tunc
to December 1, 2000, because such approval is not warranted
under the standards in this jurisdiction for nunc pro tunc
approval set out in such cases as F/S Airlease v. Simon and In
re Arkansas Co. There were no emergent matters in the case
sufficiently long or continuous to account for a delay of four
months in moving for Houlihan's retention. With respect to the
allegation that it took that long to negotiate the terms of
retention, the Trustee says that the terms of the proposed
engagement, other than the dollar amount of the initial monthly
fee, are largely typical and customary and in fact are terms
that Houlihan has argued vigorously in other cases are standard
and basically nonnegotiable. (ICG Communications Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


LAIDLAW INC.: U.S. Debtors Hire Jones Day As Lead Counsel
---------------------------------------------------------
Laidlaw Inc. asks the U.S. Court for permission to employ Jones,
Day, Reavis & Pogue as their lead counsel to guide them through
the chapter 11 process and to prosecute their plan of
reorganization to confirmation.

Richard M. Cieri, Esq., leads the Debtors' legal team from Jones
Day's Cleveland office, assisted by Paul E. Harner, Esq., in
Jones Day's Columbus, Ohio, office.

Specifically, Laidlaw looks to Jones Day to:

       (a) advise the Debtors of their rights, powers and duties
as debtors and debtors in possession continuing to operate and
manage their businesses and properties under chapter 11 of the
Bankruptcy Code;

       (b) prepare on behalf of the Debtors all necessary and
appropriate applications, motions, draft orders, other
pleadings, notices, schedules and other pleadings, notices,
schedules and other documents, and review all financial and
other reports to be filed in these chapter 11 cases;

       (c) advise the Debtors concerning, and prepare responses
to, applications, motions, other pleadings, notices and other
papers that may be filed and served in these chapter 11 cases;

       (d) advise the Debtors with respect to, and assist in the
negotiation and documentation of, financing agreements, debt and
cash collateral orders and related transactions;

       (e) review the nature and validity of any liens asserted
against the Debtors' property and advise the Debtors concerning
the enforceability of such liens;

       (f) advise the Debtors regarding their ability to initiate
actions to collect and recover property for the benefit of their
estates;

       (g) counsel the Debtors in connection with the
formulation, negotiation and promulgation of a plan or plans of
reorganization and related documents;

       (h) advise and assist the Debtors in connection with any
potential property dispositions;

       (i) advise the Debtors concerning executory contract and
unexpired lease assumptions, assignments and rejections and
lease restructurings and recharacterizations;

       (j) assist the Debtors in reviewing, estimating and
resolving claims asserted against the Debtors' estates;

       (k) commence and conduct any and all litigation necessary
or appropriate to assert rights held by the Debtors, protect
assets of the Debtors' chapter 11 estates or otherwise further
the goal of completing the Debtors' successful reorganization;

       (l) provide general corporate, litigation and other
nonbankruptcy services for the Debtors to the extent that Jones
Day provided such services prior to the Petition Date or as
requested by the Debtors; and

       (m) perform all other necessary or appropriate legal
services in connection with these chapter 11 cases for or on
behalf of the Debtors.

Jones Day will charge for its legal services on an hourly basis
in accordance with its ordinary and customary hourly rates:

  Professional           Position        Office     Rate
  ------------           --------        ------     ----
  Richard M. Cieri       Partner         Cleveland  $550/hour
  Paul E. Harner         Partner         Columbus   $450/hour
  Lester Droller         Partner         Washington $450/hour
  Robert J. Graves       Partner         Chicago    $445/hour
  Richard A. Chesley     Partner         Chicago    $425/hour
  James D. Wareham       Partner         Washington $425/hour
  Karl Kellar            Counsel         Washington $410/hour
  Tom Daniels            Partner         Cleveland  $405/hour
  James Graham           Partner         Washington $400/hour
  John W. Edwards, II    Partner         Cleveland  $395/hour
  Adrian Wager-Zito      Partner         Washington $395/hour
  Robert W. Hamilton     Partner         Columbus   $370/hour
  Jeffrey B. Ellman      Partner         Columbus   $325/hour
  Joseph M. Witalec      Counsel         Columbus   $275/hour

Jones Day discloses that, prior to the Petition Date, on or
about August 22, 2000, Laidlaw paid a $250,000 Retainer for
services rendered or to be rendered.  On or about June 27, 2001,
Jones Day received an additional $750,000 retainer and Laidlaw
paid Jones Day $950,000 for unpaid prepetition services.  Within
the year prior to the Petition Date, Jones Day received
$10,302,882 from the Laidlaw Debtors and $716,658 from Laidlaw
Non-Debtor Affiliates.  Of the total Prepetition Payments,
$4,440,588 was paid during the 90 days prior to the Petition
Date.

Mr. Cieri assures the Court that neither he, nor Jones Day, nor
any partner or associate thereof, as far as he has been able to
ascertain, has any connection with the Debtors, their creditors,
the United States trustee or any other party with an actual or
potential interest in these chapter 11 cases or their respective
attorneys or accountants, but, in the interest of full
disclosure, relates that:

       (a) Jones Day does not represent, and has not represented,
any entity other than the Debtors in matters related to these
chapter 11 cases.

       (b) Prior to the Petition Date, Jones Day performed
certain legal services for the Debtors and provided legal advice
to LINC's board of directors generally (but not to any
individual, in their capacity as director of LILAC) and as the
governing body of LILAC. After Jones Day's application of funds
from the Estimated Payment and the completion of any necessary
adjustments to the application of Estimated Payment proceeds, as
described in paragraph 17 above, the Debtors do not owe Jones
Day any amounts for services performed prior to the Petition
Date.

       (c) Prior to the Petition Date, Jones Day represented
certain of the Debtors' Nondebtor Affiliates -- including
American Medical Response, Inc. and its subsidiaries and
affiliates; EmCare, Inc. and its subsidiaries and affiliates;
and Greyhound Lines, Inc. and its subsidiaries and affiliates --
in a number of litigation, regulatory and corporate matters
unrelated to these chapter 11 cases. As of the Petition Date,
these matters included:

            (i) federal investigations in Massachusetts and Texas
relating to the billing practices of AMR and its predecessor
companies during the 1990's and a related civil action,

           (ii) a federal investigation of AMR in Texas relating
to Medicare/Medicaid compliance issues,

           (iii) a federal investigation of AMR in South Carolina
relating to environmental compliance issues,

           (iv) a federal investigation in Illinois relating to
the billing practices of EmCare and certain residency programs
at twelve hospitals in the Chicago area and

           (v) certain corporate matters on behalf of Greyhound.

Jones Day anticipates that it will continue to represent AMR,
EmCare and Greyhound and the other Nondebtor Affiliates in these
and other matters unrelated to the Debtors' chapter 11 cases.
Moreover, from and after the Petition Date, Jones Day
anticipates that it will (i) issue separate invoices for all
work performed on behalf of the Nondebtor Affiliates and (ii)
seek payment for such services directly from the applicable
Nondebtor Affiliates without further application to or order of
the Court.

       (d) The Debtors acquired Greyhound in March 1999. Prior to
and after the Greyhound Acquisition, Jones Day has represented
Greyhound in a number of corporate transactions and related
matters. In particular, in its role as corporate counsel to
Greyhound, Jones Day represented Greyhound in negotiating the
terms of the Greyhound Acquisition and in preparing the
necessary documentation for that transaction. Accordingly, Jones
Day was adverse to the Debtors in connection with the
negotiation and implementation of the Greyhound Acquisition. As
a result of the consummation of the Greyhound Acquisition,
however, the interests of Greyhound and the Debtors have become
aligned, and Jones Day does not believe that its past
representation of Greyhound in the Greyhound Acquisition or its
current representation of Greyhound in other corporate matters
has resulted in or gives rise to any ongoing adversity with the
Debtors.

       (e) Prior to the Petition Date, Jones Day entered an
appearance on behalf of Martha O. Hesse, one of LINC's
directors, in a lawsuit brought against Ms. Hesse in her
individual capacity in the State of Texas.  The Texas Litigation
raises issues arising out of a personal real estate dispute
unrelated to the Debtors or these chapter 11 cases. Jones Day
appeared on Ms. Hesse's behalf in the Texas Litigation in
certain preliminary proceedings as an accommodation, while
assisting Ms. Hesse in identifying separate local counsel. Upon
Ms. Hesse's subsequent retention of separate counsel, Jones Day
withdrew its appearance in the Texas Litigation. As a result,
Jones Day no longer represents Ms. Hesse or any other party in
the Texas Litigation and will have no further involvement in
this matter.

       (f) Canadian Imperial Bank of Commerce; CIBC, Inc.; The
Toronto Dominion Bank; Bank of America Canada; The Bank of Nova
Scotia; The First National Bank of Chicago; Royal Bank of
Canada; and Bank of Montreal are Agent Banks for the Debtors'
$1.2 billion prepetition bank credit facility.  Jones Day
represents or has represented the Agent Banks and/or certain of
their affiliates (including certain committees in which these
entities are or were members) in numerous matters unrelated to
the Debtors or their chapter 11 cases.  In addition, Jones Day
represents or has represented certain other lenders under the
Bank Facility or their affiliates in matters unrelated to the
Debtors to such parties in connection with pending and future
matters. Jones Day will not represent these entities, however,
in any matters relating to the Debtors or their chapter 11
cases.

       (i) U.S. Bank National Association; Chase Manhattan Trust
Co., N.A.; Citibank, N.A.; Montreal Trust Company of Canada; and
State Street Bank and Trust Company are current or former
indenture trustees for certain of the Debtors' approximately
$2.2 billion in outstanding public notes.  Jones Day represents
or has represented the Indenture Trustees or their affiliates in
numerous matters unrelated to the Debtors or their chapter 11
cases.  In addition, Jones Day represents or has represented
certain other holders of the Notes or their affiliates in
matters unrelated to the Debtors or their chapter 11 cases.
Jones Day anticipates that it will continue providing services
to such parties in connection with pending and future matters.
Jones Day will not represent these entities, however, in any
matters relating to the Debtors or their chapter 11 cases.  Mr.
Cieri comments that, other than the members of the Noteholders'
Committee and certain other Noteholders, Jones Day has been
unable to identify all of the beneficial holders of the Notes.
The lists of Noteholders provided to Jones Day by the Debtors or
their agents identify certain institutions holding Notes in
street name.  From a review of this list, it appears that Jones
Day has numerous client relationships with the Registered
Holders.

       (j) John Hancock Life Insurance Company, New York Life
Insurance Company, Aid Association for Lutherans, American
General Annuity Insurance Company and the Variable Life
Insurance Company are plaintiffs in litigation against certain
of the Debtors in respect of certain Notes.  Jones Day
represents or has represented certain of the Noteholder
Plaintiff's or their affiliates in numerous matters unrelated to
the Noteholder Litigation, the Debtors or their chapter 11
cases.  Jones Day anticipates that it will continue providing
services to the Noteholders in connection with pending and
future matters. Jones Day will not represent these entities,
however, in any matters relating to the Noteholder Litigation,
the Debtors or their chapter 11 cases.

       (k) In addition to the relationships described above, from
time to time, Jones Day has represented, and likely will
continue to represent, certain creditors of the Debtors and
various other parties adverse to the Debtors in matters
unrelated to these chapter 11 cases.  As described below,
however, Jones Day has undertaken a detailed search to
determine, and to disclose, whether it represents or has
represented any significant creditors, equity security holders,
insiders or other parties in interest in such unrelated matters.

       (l) Certain other creditors of the Debtors are creditors
of existing debtor clients of Jones Day (e.g., Bank of Montreal,
an Agent Bank and unsecured creditor in these cases, also is a
secured creditor in the chapter 11 cases of Jones Day's client,
Loewen Group).  In addition, certain creditors and other parties
in interest in these cases (or their affiliates) are or were
members of official creditors' committees represented by Jones
Day in other chapter 11 cases (e.g., First Clearing Corporation,
a Noteholder in these cases, is affiliated with First Union
Corporation, a former member of the creditors' committee
represented by Jones Day in the AHERF chapter 11 cases).

       (m) In matters unrelated to these cases, Jones Day has
worked with certain of the Laidlaw Companies' other
professionals. For example, in other matters, Jones Day has
worked with (i) the Canadian Debtors' counsel, Goodmans (e.g.,
Jones Day represents the debtors in the Loewen Group chapter 11
cases, in which Goodmans serves as counsel to the Canadian
monitor in related Canadian insolvency proceedings); (ii) the
Debtors' restructuring accountants and financial advisors, Ernst
& Young Inc. and internal auditors, Ernst & Young LLP (e.g.,
Jones Day represented the debtors in the Imperial Home D‚cor
chapter 11 cases, in which an affiliate of EYI and EYLLP serves
as financial advisors to the official committee of unsecured
creditors); (iii) the Debtors' corporate communications
consultants, Sitrick And Company, Inc. (e.g., Jones Day
represents the debtors in the LTV Steel chapter 11 cases, in
which Sitrick serves as the debtors' corporate communications
consultants); and (iv) the Debtors' claims and noticing agent,
Logan & Company, Inc. (e.g., Jones Day represents the debtors in
the Loewen Group chapter 11 cases, in which Logan serves as the
debtors' claims and noticing agent).  In addition, (i) Jones Day
provides legal services to Ernst & Young LLP, a U.S. affiliate
of EYI and EYLLP; and (ii) E&Y U.S. has provided, and continues
to provide, services to Jones Day in matters unrelated to the
Debtors or their chapter 11 cases.  Finally, Jones Day has
worked with other professionals that the Laidlaw Companies may
seek to retain, including (i) Dresdner Kleinwort Wasserstein, as
investment bankers (e.g., Jones Day represents the debtors in
the Loewen Group Chapter 11 cases, in which Wasserstein serves
as the debtors' financial advisors); and (ii)
PricewaterhouseCoopers LLP, as external auditors (e.g., Jones
Day represents the debtors in the Loewen Group Chapter 11 cases,
in which PwC serves as accountants to the creditors' committee).

       (n) The Laidlaw Companies currently own approximately
43.6% of the equity in Safety-Kleen Corp., which operates a
hazardous waste service business through a number of affiliated
entities. On March 6, 2000, Safety-Kleen announced that it had
learned of possible accounting irregularities in prior Safety-
Kleen financial statements and that it had formed a special
committee of its board of directors to investigate the situation
and determine whether a restatement of its prior financial
statements might be needed. Safety-Kleen's announcement of
possible accounting irregularities resulted in the initiation of
several individual and class action lawsuits against Safety-
Kleen, its officers and directors and other parties alleging
certain violations of securities laws and other theories of
recovery as a result of the lost value of Safety-Kleen's common
stock.  Certain of the Securities Lawsuits have named LILAC and
certain of its current and former officers and directors as
defendants, asserting that the Laidlaw Defendants were involved
in the activities resulting in the alleged accounting
irregularities at Safety-Kleen. Jones Day has been assisting
LILAC in defending against the allegations asserted against the
Laidlaw Defendants in the Securities Lawsuits.  In connection
with litigation matters related to the Debtors' dealings with
Safety-Kleen, Jones Day has retained E&Y U.S. as financial and
accounting experts to provide forensic accounting and other
services to Jones Day in connection with legal proceedings
arising from the Debtors' dealings with Safety-Kleen.

       (o) Jones Day also has worked with the professionals
representing certain of the Debtors' major stakeholders in
numerous matters unrelated to these chapter 11 cases. For
example, Jones Day has worked on unrelated matters with the
professionals retained in these cases by: (i) the Bank Group
(e.g., Clifford Chance Rogers & Wells, LLP; KPMG Inc.; and
Stikeman Elliott); (ii) the DIP Lenders (e.g., Paul, Hastings,
Jenofsky & Walker LLP); and (iii) the Noteholders Committee
(e.g., Debevoise & Plimpton; Houlihan, Lokey, Howard & Zukin;
and McCarthy Tetrault).  In addition, Jones Day represents, or
has represented, KPMG and Houlihan Lokey in matters unrelated to
the Debtors or their chapter 11 cases.

       (p) On September 25, 2000, LINC and Jones Day executed an
engagement letter for Jones Day's ongoing pre- and post-petition
services on behalf of the Debtors.  The Engagement Letter
superseded the prior employment arrangements between LINC and
Jones Day. Pursuant to the Engagement Letter, (i) the parties
agreed that Jones Day will provide bankruptcy, restructuring,
litigation, corporate and related services to the Debtors and
charge for these services at Jones Day's regular hourly rates;
and (ii) the Debtors agreed to waive any conflicts of interest
or potential conflicts of interest arising from Jones Day's
representation of creditors and other parties in interest in
matters unrelated to the Debtors or their chapter 11 cases.

       (q) Richard A. Freling has held the position of Of Counsel
in Jones Day's Dallas office since 1996.  Prior to joining Jones
Day, Mr. Freling was a member of Greyhound's board of directors
during the 1980's.  Mr. Freling resigned his seat on Greyhound's
board of directors in 1989 and no longer maintains any position
with Greyhound.

       (r) Jones Day has approximately 1,200 attorneys and 2,000
other employees.  It is possible that certain Jones Day
attorneys or employees hold interests in mutual funds or other
investment vehicles that may own the Debtors' securities.
(Laidlaw Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


LA ROCHE: Seeks Fourth Extension Of Time To Decide On Leases
------------------------------------------------------------
La Roche Industries Inc. and LaRoche Fortier Inc., seek a fourth
order extending the time within which the debtors may assume or
reject their unexpired leases of nonresidential real property
under which one of the debtors is lessee, through and including
October 26, 2001.

The leases are among the primary operating assets of the
debtors. They lease their headquarters as well as some of their
distribution facilities and warehouse space. The debtors are
attempting to establish the continued viability of their
business operations in the short term while at the same time
analyzing business plans for their reorganization efforts. There
are approximately forty leases and/or executory contracts that
debtors must analyze. The debtors need additional time to
further analyze the profitability of each distribution facility
or warehouse location as well as the efficiency of maintaining
each of their sales and headquarters locations, and determine
whether each lease should be assumed or rejected. A confirmation
hearing on the debtors' second amended joint plan of
reorganization is scheduled for July 19, 2001.


LERNOUT & HAUSPIE: Bar Date Order Excludes Affiliates
-----------------------------------------------------
Lernout & Hauspie Speech Products N.V. and Dictaphone Corp. have
previously obtained a Bar Date Order setting the date of June
11, 2001, as the final date on or before which an entity holding
a prepetition claim against any member of the Debtors must file
a proof of claim, unless expressly excluded. The Bar Date Order
specifically excuses from the filing deadline, among others, any
debtor or debtor-in-possession in these chapter 11 cases, or a
wholly-owned non-debtor subsidiary of any debtor or debtor-in-
possession, having any claim against any debtor or debtor-in-
possession in these chapter 11 cases.

The Debtors state that certain entities are "affiliates", as
that term is defined in the Bankruptcy Code, but are not wholly-
owned subsidiaries of the debtors or debtors-in-possession in
these chapter 11 cases.

As currently worded, the Bar Date Order does not encompass these
L&H affiliates, so that any L&H affiliate holding a prepetition
claim against any member of the Debtors must file a proof of
claim on account of such claim against a member of the Debtors
on or before the filing deadline. In most instances, the members
of the L&H group would own 100% of the outstanding voting
securities of a particular affiliate, but for certain technical
reasons, including, among other things, (a) certain Belgian laws
requiring such member of the L&H group to share ownership of the
affiliate with one additional shareholder and (b) that their
ownership of the affiliate is held through several layers of
subsidiary corporations, do not.

A strict interpretation of the Bar Date Order would impose an
undue burden on the L&H group affiliates (and hence the Debtors)
by requiring them to file proofs of claim on account of
prepetition claims against the Debtors on or before the filing
date, when in fact the affiliates practically constitute wholly-
owned subsidiaries of the members of the Debtors and therefore
should be entitled to the exception granted in the Bar Date
Order. Amending this Order and expanding its scope would ease
this administrative burden. The Debtors therefore propose to
amend the Bar Date Order to include the affiliates and afford
them the filing reprieve granted to the wholly-owned
subsidiaries.

Judge Wizmur agrees, and so orders, exempting the subsidiaries
from any obligation to file a proof of claim, and ordering that
the filing deadline does not apply to these entities.
(L&H/Dictaphone Bankruptcy News, Issue No. 8; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


LOEWEN GROUP: Rejecting Florida Office Lease
--------------------------------------------
To reduce costs, The Loewen Group, Inc., et.al., have
consolidated administrative support functions previously
performed at 4580 S.W. 8th Street, Miami, Florida with those
performed at another location. The Debtors have concluded that
they will be unable to market the related lease successfully.
Accordingly, the Debtors seek the Court's authority to reject
the lease with Sol Klein and Elsa Klein.

The term of the lease is the 10-year period from May 1, 1992
through April 30, 2002. The initial monthly rent under the lease
was $4,000 subject to certain increases. The monthly rent paid
by the Debtors at the time of rejection is $5,130.30.

The Debtors have sent to the landlord notice of their intention
to reject the lease and have also served the motion on the
landlord. In addition, the Debtors waive their right to withdraw
the motion prior to the Court's ruling. Accordingly, the Debtors
request that the rejection of the lease be made effective as of
May 31, 2001. (Loewen Bankruptcy News, Issue No. 41; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


LOGOATHLETIC: Obtains Court Nod To Sell Inventory To Reebok Unit
----------------------------------------------------------------
A bankruptcy court has authorized LogoAthletic Inc. to sell
retained inventory to a wholly owned subsidiary of Reebok
International Ltd., according Dow Jones. Judge Mary F. Walrath
of the U.S. Bankruptcy Court in Wilmington, Del., signed an
order June 28 that allows the company to sell all of its
retained inventory, other than returns, to Reebok's Group
Athletica LLC unit for $881,921.

In its motion, Indianapolis-based LogoAthletic proposed to sell
the inventory to Group Athletica for a total of about $1.04
million. The motion said the retained inventory-any firm order
inventory or merchandise on order as of Feb. 22 that the buyer
elected not to purchase-was kept by LogoAthletic and its secured
lenders for eventual sale. The sale is subject to terms of the
company's prior sale pact with Reebok, the motion said.

LogoAthletic, which negotiates licenses with professional sports
leagues and colleges to design sportswear logos, filed for
chapter 11 protection Nov. 6, 2000, listing both assets and
debts of more than $100 million.


LTV CORPORATION: Retains Kaye Scholer As Special Counsel
--------------------------------------------------------
The LTV Corporation asks Judge Bodoh to permit them to employ
Kaye Scholer LLP as special counsel in these cases.  Kaye
Scholer, now known as Kaye, Scholer, Fierman, Hays & Handler,
LLP, was the Debtors' bankruptcy co- counsel throughout the
Debtors first bankruptcy case filed in the Southern District of
New York, which remains open due to the pendency of certain
adversary proceedings.  Kaye Scholer continued to represent the
Debtors after the Effective Date of the Plan in that first case
in a wide variety of bankruptcy-related matters, including (i)
implementation and consummation of the Plan; (ii) enforcement of
the Plan's discharge and injunctive provisions, and (iii)
insurance-related issues.  Since confirmation of the Plan, the
Debtors have been sued in at least 13 different courts
throughout the country with respect to numerous environmental,
asbestos, benzene and postal vehicle rollover claims that the
Debtors believed were discharged under the Plan in the first
bankruptcy case.  The Debtors have been threatened with
countless other similar lawsuits.  Kaye Scholer has represented
the Debtors in many such matters and, as co-counsel of record,
continues to do so as of the date of this Application.

Kaye Scholer was retained by the Debtors as an "ordinary course"
counsel by this Court's December Order.  Before April 2001, Kaye
Scholer's fees did not exceed the average monthly monetary cap
imposed on ordinary-course counsel.  However, for the month of
April, 2001, the level of compensation earned by Kaye Scholer on
behalf of the Debtors exceeded the cap.  As a result, Kaye
Scholer drafted an application to be retained under the
Bankruptcy Code in these cases, which it provided to the Debtors
in May of this year.  The Debtors therefore seek to retain Kaye
Scholer as special counsel without such restriction nunc pro
tunc as of April 1, 2001.

The Debtors tell Judge Bodoh that Kaye Scholer will render legal
advice and provide legal representation, as needed, with respect
to matters relating to the first bankruptcy case.  Most notably,
the Debtors anticipate that Kaye Scholer will provide, among
other things, ongoing advice and representation in connection
with a certain pending adversary proceeding commenced by LTV
Steel in the New York Bankruptcy court against The City of
Buffalo, New York, and the City of Buffalo Urban Renewal Agency.
The Buffalo proceeding began in September 1999, and LTV Steel is
seeking a declaratory judgment that (i) certain claims of the
City and BURA against LTV Steel have been discharged under the
Plan, the confirmation order, and the Bankruptcy Code, and (ii)
that the City and BURA are enjoined under the permanent
injunctions extant under the Plan, the confirmation order, and
the Bankruptcy Code from continuing the prosecution of such
claims against LTV Steel.  LTV began this proceeding because, in
the spring of 1999, representatives of the City contacted LTV
Steel and asserted that LTV Steel was financially responsible
for hazardous waste materials allegedly left behind on certain
property in Buffalo, New York.  Prior to the commencement of
these cases, the City and BURA moved to withdraw the reference
of the buffalo adversary proceeding to the United States
District Court for the Southern District of New York.  The
Debtors report that the parties are currently briefing the
issues concerning the withdrawal motion. The Debtors believe
that, given its extensive experience and prior involvement, Kaye
Scholer is best suited to represent the Debtors in the Buffalo
adversary proceeding.

Moreover, from time to time the debtors have called upon Kaye
Scholer to provide advice and representation in connection with
a variety of other matters, including those involving contract
disputes and insurance issues, among others.  The Debtors assure
Judge Bodoh that employment of Kaye Scholer is in the best
interests of these estates and their creditors.

Subject to the Court's approval, Kaye Scholer will charge for
its legal services on an hourly basis in accord with its
ordinary and customary hourly rates in effect on the date
services are rendered.  These rates may change from time to time
in accord with Kaye Scholer's established billing practices and
procedures.  The attorneys and paraprofessionals expected to
have responsibilities on behalf of the Debtor, and their
respective hourly rates, are:

           Edmund M. Emrich              Partner            $525
           Myron Kirschbaum              Partner            $510
           Scott I. Davidson             Associate          $360
           Keith Murphy                  Associate          $360
           Steven R. Wirth               Associate          $315
           Ronald Cappiello              Paraprofessional   $145
           Gurnel Jean Louis             Paraprofessional   $110

Edmund M. Emrich, a partner of Kaye Scholer LLP, avers to Judge
Bodoh that Kaye Scholer is a disinterested person and neither
holds nor represents any interests adverse to the Debtors on the
matters for which his approval of employment is sought.
However, in the interests of full disclosure he advises that
Kaye Scholer has represented, and likely will continue to
represent, certain creditors of the Debtors in matters unrelated
to the Debtors, these chapter 11 cases, and the first bankruptcy
case.

Prior to joining Kaye Scholer, certain current Kaye Scholer
attorneys represented Credit Agricole Indosuez, a party to the
Debtors' receivables and inventory credit facilities, in these
Chapter 11 cases, but upon joining Kaye Scholer's newly-formed
Chicago office, those attorneys no longer represent Credit
Agricole in these cases.

The Washington DC office of Kaye Scholer represents a number of
foreign steel concerns in various import relief actions in which
LTV Steel is or may be involved.  These foreign steel concerns
consist of: (i) Korea Iron & Steel Association, (ii) Pohang Iron
& steel Col., Ltd., (iii) Dongby Steel Col., Ltd., (iv) Union
Steel Co., Ltd., (v) SeAH Steel, (vi) SIDOR, (vii) Macronix
Stainless Steel, and (viii) SUNJU Special Steel Co.  Kaye
Scholer obtained an appropriate waiver letter from the Debtors
in March 1998.  In addition, the Washington office represents
the Foreign Ministry of Japan in various import relief actions
in which LTV Steel is or may be involved.  Kaye Scholer obtained
an appropriate waiver from the Debtors in July 2000.

The Debtors have also granted Kaye Scholer a waiver which is
being finalized for the purpose of providing antitrust advice
and counsel to MAGNATRAX Corporation, a subsidiary of Onex
Corporation, in connection with its potential bid for the assets
of VP Buildings, Inc., f/k/a VP Acquisition Company, one of the
Debtors.

Mr. Emrich discloses that, prior to the Petition Date, Kaye
Scholer performed certain legal services for the Debtors, for
which the Debtors owe Kaye Scholer approximately $185,000.

It is possible that certain Kaye Scholer attorneys or employees
hold interests in mutual funds or other investment vehicles that
may own debt or equity interests in the Debtors. (LTV Bankruptcy
News, Issue No. 11; Bankruptcy Creditors' Service, Inc.,
609/392-00900)


LTV CORPORATION: USWA And Unsecured Creditors Reach Agreement
-------------------------------------------------------------
The United Steelworkers of America and the Unsecured Creditors
Committee of the LTV Corporation have reached a tentative labor
agreement covering 9,000 steelworkers at operations of the
bankrupt steel producer

"This tentative agreement is a tribute to the spirit of
cooperation that both our Union and the Creditors Committee
maintained throughout the negotiations," said Leo Gerard,
president of the 700,000-member USWA. "It substantially
addresses the Company's expressed need for near-term relief
without the massive concessions LTV executives insisted were the
`only way' to restructure the Company."

"These were, without a doubt, tough negotiations," added David
McCall, Director of USWA District 1 (Ohio) and Chair of the
Union's LTV Negotiating Committee. "But because bargainers on
both sides of the table shared a fundamental interest in
restoring LTV as a viable integrated steel producer, we were
able to meet the Company's restructuring needs while preserving
the jobs and income of our active members and the standard of
living of our current and future retirees."

The pensions, health care and other benefits of approximately
65,000 LTV retirees and their dependents are covered by the new
agreement, which is contingent on approval by the Bankruptcy
Court and ratification by the Steelworkers membership at LTV. On
Friday, LTV local union presidents and unit chairs met to
discuss the proposal and unanimously recommended its approval by
the USWA International Executive Board and their respective
memberships.

The agreement includes innovative new work arrangements,
meaningful reductions in health care costs and loans from a
Union-negotiated benefit fund that will stabilize LTV and allow
the company to secure financing under the federal Emergency
Steel Loan Guaranty program.

"This agreement sets the stage for the government action," said
USWA President Leo Gerard, "particularly in the areas of import
restraint, legacy cost relief, and access to capital that are
absolutely essential for restoring LTV and the entire American
steel industry to profitability."

The tentative agreement will be presented to the federal
bankruptcy court in Youngstown, Ohio.

David McCall, Director of USWA District 1 (Ohio) and Chair of
the LTV Negotiating Committee, said that the Union's membership
would not vote on ratification until the court has decided
whether or not to accept the agreement.

The USWA said that the new pact derives millions in savings from
numerous innovations, among them:

     -   Restructuring work arrangements while maintaining limits
         on outside contracting, and revising manning levels to
         reduce the costs of production.

     -   Restructuring managed health care to meaningfully reduce
         costs without reducing benefits to either workers or
         current and future retirees.

     -   Providing millions in loans from the Union-negotiated
         Voluntary Employee Benefits Association (VEBA) in order
         to get LTV through its current difficulties, subject to
         repayment as the company's profitability returns.

     -   Working with all the parties to approach the Pension
         Benefit Guaranty Corporation (PBGC) about mutually
         acceptable ways for LTV to meet its obligations to the
         pension plan, consistent with its financial
         circumstances.

The USWA was especially encouraged that the agreement maintains
steelmaking capacity at LTV's Cleveland West facility, pending
the outcome of to a study of the economic viability of a
revitalization plan proposed by the Union. The study is expected
to be completed by September 15. The Union also said that the
new agreement "breaks new ground in providing our members with a
role in corporate governance.

"This agreement creates opportunities for our members to turn a
sow's ear into a bit of a silk purse," Gerard said. "It gives
them a voice in crucial corporate decisions and rewards their
contributions to renewed productivity with stock ownership in
the company and a very fair level of profit sharing, once LTV
gets back on its feet."

The agreement gives USWA members 20% ownership of the company,
two seats on LTV's Board of Directors, and profit sharing based
on net operating profits before taxes and interest payments.

"We're very confident that this agreement paves the way for LTV
to secure financing through the federal Emergency Steel Loan
Guaranty program," Gerard said. "Coupled with the temporary
import restraints that should result from the Bush
Administration's recent filing of a Section 201 petition, this
agreement will give LTV management both the near-term savings
and long-term financing crucial for a successful restructuring
of the company as an integrated steel producer."


MARINER POST-ACUTE: U.S. Trustee Amends Creditors' Committee
------------------------------------------------------------
The United States Trustee for Region III appointed, pursuant to
11 U.S.C. Sec. 1102(a)(1), the following persons to serve on the
Statutory Committee of Unsecured Creditors of Mariner Post-Acute
Network, Inc., and its direct and indirect wholly-owned
subsidiaries:

        (1)  The Bank of New York
                  Attn: Patricia Walsh, VP
                  101 Barclay Street, 21W
                  New York, NY 10286
                  Phone: (212)815-4249, Fax: (212)815-5915

        (2)  First Capital Alliance L.P.,
                  Attn: Richard J. Newman
                  One Financial Place
                  440 South LaSalle Drive, Suite 1614
                  Chicago, IL 60605
                  Phone: (312)362-2020, Fax: (312)362-2022

        (3)  Neighborcare
                  Attn: David Barr, Vice Chairman
                  101 E. State Street
                  Kennett Square, PA 19348
                  Phone: (610)915-6350, Fax: (610)925-4242

        (4)  Nationwide Health Properties, Inc.
                  Attn: Thomas A. Stokes, Senior VP
                  610 Newport Center, Suite 1150
                  Newport Beach, CA 92660
                  Phone: (941)718-4400, Fax: (949)759-6876

        (5)  Novacare Holdings, Inc.
                  Attn: Richard J. Zimmerman, Director of Finance
                  1016 West Ninth Avenue
                  King of Prussia, PA 19406
                  Phone: (610)992-7225, Fax: (610)878-8215

        (6)  PYA/Monarch, Inc.
                  Attn: Linda Fitzgerald, Corporate Credit
                        Manager
                  80 International Drive
                  Greenville, SC 29815
                  Phone: (864)676-8654, Fax: (864)676-8841

Accordingly, First Capital Alliance replaces SunAmerica, Inc.
Don A. Beskrone, Esq., is the Staff Attorney for the U.S.
Trustee assigned to Mariner's chapter 11 cases. (Mariner
Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


METAL MANAGEMENT: Will Not Make SEC Filings On Time
---------------------------------------------------
As a result of its reorganization in accordance with the
provisions of Chapter 11 of the United States Bankruptcy Code
and its subsequent emergence from bankruptcy on June 29, 2001,
pursuant to the First Amended Joint Plan of Reorganization of
Metal Management, Inc. and its Subsidiary Debtors, dated May 4,
2001, Metal Management, Inc., a Delaware corporation, is
determining the impact of the reorganization on its financial
statements for the year ended March 31, 2001, and on the related
disclosures that are required to be made in order to file its
year end financial statements. As a result, the filing of those
statements with the Securities and Exchange Commission will be
delayed.


N U PIZZA: Accumulated Deficit for Q3 2001 Reaches $7.3 Million
---------------------------------------------------------------
For the nine months ended March 31, 2000, N U Pizza Holding had
negative cash flow of $23,200. The Company has continued to make
some of the principal payments on its long-term debt. Cash and
cash equivalents at December 31, 2000 were $20,000.

For the nine months ended March 31, 2001, the Company recognized
initial franchise fees of $5,000 from one domestic license
agreement, an 85.4% decrease in fees from the same period in
2000.

The Company recognized $273,100 of royalty income during the
nine months ended March 31, 2001, a $42,500 (13.5%) decrease
from royalty income of $315,600 recognized for the comparable
period in 2000.

Interest income increased $16,900 (59.3%) to $45,400 for the
nine months ended March 31, 2001 as compared to $28,500 for the
nine months ended March 31, 2000. This increase is due to an
increase in interest bearing notes receivable outstanding during
nine months ended March 31, 2001.

Rebate income increased $300 (0.3%) to $91,100 during the nine
months ended March 31, 2001 as compared to the nine months ended
March 31, 2000. Other income decreased $3,900 (2.8%) to $136,200
for the nine months ended March 31, 2001.

The Company recognized $5,600 of forgiveness of debt income for
the nine months ended March 31, 2000 due to the write-off of
previously accrued accounts payable. There were no such write-
offs during the nine months ended March 31, 2001.

For the three months ended March 31, 2001, the Company
recognized no initial franchise fees as compared to $14,800 of
income recognized during the same period in 2000, a 100.0%
decrease in fees from the same period in 2000.

The Company recognized $88,000 of royalty income during the
three months ended March 31, 2000, a $51,400 (36.9%) decrease
from royalty income of $139,400 recognized for the comparable
period in 2000. The decrease was due to an overall decline in
system-wide sales.

Interest income increased $1,200 (11.8%) to $11,400 for the
three months ended March 31, 2001 as compared to $10,200 for the
three months ended March 31, 2000. This increase is due to an
increase in collections on notes receivable during the current
quarter.

Rebate income decreased $5,400 (23.7%) to $17,400 during the
three months ended March 31, 2001 as compared to the three
months ended March 31, 2000. The decrease is primarily related
to fluctuations in rebate payments.

N U Pizza Holding realized a net loss in the nine month period
ending March 31, 2001 of $(19,400), as compared to a net loss of
$(24,400) for the comparable period of 2000. Accumulated deficit
at the end of March 31, 2001 was $(7,320,600) as compared to
$(6,843,200) at the end of March 2000.


PACE HEALTH: Considers Liquidating And Distributing Assets
----------------------------------------------------------
While no revenue was generated by Pace Health Management
Systems, Inc. in the three month periods ended March 31, 2001
and 2000, the Company did realize net gain in the 2001 period of
$10,472, and in the 2000 period $11,017.

Net cash provided by operating activities for the three months
ended March 31, 2001 was $16,896. Net cash used in operating
activities for the three months ended March 31, 2000 was $1,487.
The Company has no ongoing operations and no revenues and has
minimal operating expenses. The Company's March 31, 2001 balance
sheet reflects cash of over $2 million and no liabilities.

Net cash provided by financing activities for the three months
ended March 31, 2001 and 2000 was $0 and $60,000, respectively.
Net cash provided by financing activities in 2000 was from the
exercise of stock options.

On October 7, 1998, the Company completed the sale of
substantially all of its assets to, and the assumption of
certain of its liabilities by, Minnesota Mining and
Manufacturing Company. The sale was made pursuant to an Asset
Purchase Agreement dated June 30, 1998. The net proceeds from
the sale will be retained by the Company pending a determination
of whether to engage in a follow-on transaction. The Company has
been seeking a business combination with another entity, before
considering possible liquidation and distribution of its assets.
No definitive agreement has been signed for a follow-on
transaction. If no suitable business combination is identified
within a reasonable period of time, the Company may elect to
liquidate and distribute the remaining net proceeds to
shareholders. If the Company liquidated at the present time, all
of the net assets of the Company would be paid to holders of the
Company's preferred stock.


PACIFICARE HEALTH: Discloses New Tender Offer Pricing Terms
-----------------------------------------------------------
PacifiCare Health Systems Inc.(Nasdaq:PHSY) announced the new
pricing terms for its cash tender offer for all of the
outstanding $100 million of 7% Senior Notes due 2003 of
PacifiCare Health Plan Administrators Inc., a wholly owned
subsidiary of the company, made pursuant to its Offer to
Purchase and Consent Solicitation Statement dated June 1, 2001.

The total consideration, determined according to a previously
announced pricing formula, is $1,046 per $1,000 principal
amount, plus accrued interest. This amount includes a consent
fee of $30 per $1,000 principal amount, payable to those holders
who validly tendered prior to 5 p.m., New York time, on June 14,
2001.

Previously, the company announced that at the Consent Time it
had received the noteholder consents required to enable the
elimination of substantially all restrictive covenants and
certain events of default provisions in the indenture governing
the Notes.

In addition, the company previously extended the tender offer
for the Notes, which is currently set to expire at noon, New
York time, on July 23, 2001, unless further extended or
terminated. For Notes tendered after the Consent Time and prior
to the Expiration Time, the tender offer consideration will be
$1,016 per $1,000 principal amount, plus accrued interest to the
settlement date of the tender offer.

If the tender offer is again extended for a period longer than
10 business days from the current Expiration Time, the company
will establish a new price determination date, which will be at
least 10 business days prior to the new expiration time, and the
pricing terms and consideration may change.

The tender offer is subject to a number of conditions which are
set forth in the Offer to Purchase, including without
limitation:

      -- holders of the Notes having validly tendered (and not
withdrawn) by the Expiration Time, Notes representing not less
than a  majority in aggregate principal amount of the Notes, and

      -- the company obtaining financing to pay the
consideration, costs and fees of the tender offer and consent
solicitation on terms acceptable to the company.

Morgan Stanley is acting as the Dealer Manager and Solicitation
Agent in connection with the tender offer and can be reached at
877/445-0397. Requests for assistance or additional copies of
the tender offer materials may be directed to Georgeson
Shareholder Communications Inc., the Information Agent, at
800/223-2064.

Dedicated to making people's lives better, PacifiCare Health
Systems is one of the nation's largest health-care services
companies with approximately $12 billion in annual revenues.
Primary operations include managed care and other health
insurance products for employer groups and Medicare
beneficiaries in eight western states and Guam, serving
approximately 3.7 million members.

Other specialty products and operations include behavioral
health services, life and health insurance, dental and vision
services and pharmacy benefit management. More information on
PacifiCare Health Systems can be obtained at www.pacificare.com.


PACIFIC GAS: Reaches Long-Term Agreement With Calpine Corp.
-----------------------------------------------------------
Pacific Gas and Electric Company announced a five-year agreement
with Calpine Corporation's qualifying facilities (QFs), ensuring
the utility receives a reliable supply of power at an average
energy price of 5.37 cents per kilowatt-hour.

Under the terms of the deal, Pacific Gas and Electric Company
will assume the 13 Calpine QF contracts and pay the
approximately $265 million in pre-petition debt on the effective
date of a confirmed plan of reorganization.

Calpine's 13 QFs provide an average of 450 megawatts of
delivered power to the utility. By locking into the fixed cost,
Pacific Gas and Electric Company will help protect its customers
from the market fluctuations in the wholesale market. A recent
CPUC decision (D.01-06-015) allowed QFs to enter into long-term
contracts at an average energy price of 5.37 cents per kilowatt-
hour.

"By insulating against volatile natural gas prices, this
agreement will help ensure our customers receive a reliable
source of power at reasonable prices over the next five years,"
said Kent Harvey, Pacific Gas and Electric Company's senior vice
president and chief financial officer. "We believe this plan can
serve as a framework for ongoing discussions with our QFs."

Pacific Gas and Electric Company is willing to enter into
similar type agreements for any of its other 300 QF contracts,
and is currently in discussion with some QFs. On June 29, the
company filed a statement with the U.S. Bankruptcy Court to make
its final decision on whether to assume or reject its QF
contracts in coordination with the plan of reorganization.

The agreement with Calpine is consistent with the filing because
the payment of the past costs will be made upon the effective
date of the plan of reorganization. A copy of the agreement will
be filed with the U.S. Bankruptcy Court, and a hearing on the
issue is scheduled for July 12.


PACIFIC GAS: CA Attorney General Asks SEC To Probe Cash Transfer
----------------------------------------------------------------
California's Attorney General asked the U.S. Securities and
Exchange Commission (SEC) to investigate PG&E Corp. for possible
holding company abuses, according to Dow Jones. State Attorney
General Bill Lockyer filed a petition requesting that the SEC
look into the transfer of billions of dollars from Pacific Gas &
Electric Co. to parent company PG&E Corp, prior to the utility's
filing for chapter 11 bankruptcy protection in April.

"Without meaningful review by the SEC, it can't be determined
what impact the transfer of assets to the holding company
operating in a dozen other states may have on the financial
conditions of the bankrupt utility or other utilities in
California," Lockyer said. The utility sent more than $4 billion
to its parent between 1997 and 1999, representing 69 percent of
cash flow to PG&E Corp. during this period, the release said.
The SEC hasn't examined these cash movements, because PG&E Corp.
claims it is exempt from the Public Utility Holding Company Act,
the release said. Under the Act, the SEC can review stock and
security transactions, inter-affiliate loans and sales of goods
and issuance of securities by holding companies and utilities.
PG&E Corp. said it's exempt from the Act because it is an
intrastate entity. (ABI World, July 6, 2001)


PLANVISTA CORP.: Raises $3.3 Mil In Private Placement Funding
-------------------------------------------------------------
PlanVista Corporation (NYSE: PVC), the rapidly growing medical
cost containment firm based in Tampa, Florida, has raised $3.3
million in a private placement. The purchaser of these
securities were certain investment funds managed by DePrince,
Race and Zollo, an investment management firm in which director
John Race is one of the principals. As previously announced,
this transaction is the first part of a private placement to
accredited investors identified by PVC's investment banker,
William Blair & Company, the balance of which will be used to
assist the Company in refinancing its credit facility currently
scheduled to term at the end of August. The new funding in the
transaction just completed will be used to satisfy certain pre-
closing obligations connected with PlanVista's recent
divestiture of HealthPlan Services, Inc. to HealthPlan Holdings
Inc. ("HHI"). In connection with the placement, the Company
issued unregistered shares of its common stock at a 15% discount
to the 10 day trading average through July 2, and has agreed to
register such shares during the next 30 days. Additionally, in
connection with extending certain payment obligations with its
lenders which were due June 30 and July 31 and certain payments
to HHI which were due shortly after Closing of the HHI
transaction, the Company issued 75,000 shares of its common
stock to HHI and 75,000 shares of its common stock to its
lenders and has agreed to register these shares. The Company has
also asked its investment bankers to evaluate all strategic
alternatives to maximize shareholder value over the short and
long term.

PlanVista is a leading health care technology and product
development company, providing medical cost containment for
health care payers and providers through PlanVista Solutions,
one of the nation's largest independently owned full-service
preferred provider organizations. PlanVista Solutions provides
network access, electronic claims repricing, and claims and
data management services to health care payers and provider
networks throughout the United States. Visit the company's
website at www.planvista.com.


PLIANT SYSTEMS: mPhase Technologies Intends To Purchase Assets
--------------------------------------------------------------
mPhase Technologies Inc. (OTCBB: XDSL) has agreed in principle
to purchase substantially all of the assets of Pliant Systems
Inc. (OTCBB: PLNS), subject to the negotiation and completion of
final documentation and the approval by the United States
Bankruptcy Court for the Eastern District of North Carolina,
where Pliant's Chapter 11 case is pending. Pliant is a leading
designer of multi-service integrated access platforms for the
telecommunications industry. The proposed transaction's purchase
price is approximately $3.6 million.

The proposed transaction includes the purchase by mPhase of all
tangible and intangible assets of Pliant Systems to be operated
as a going concern, including the intellectual property, but
excludes cash, certain accounts receivable and certain causes of
action. The proposed transaction is expected to be structured as
a sale by Pliant of its assets to mPhase pursuant to sections
363(b) and 365 of the United States Bankruptcy Code, free and
clear of all liens, claims and encumbrances. Pliant plans to
obtain approval of the proposed transaction from the Bankruptcy
Court by late July and, subject to receipt of such approval, the
transaction is expected to close by early August. Following
approval by the United States Bankruptcy Court, mPhase intends
to host a press conference detailing the strategy and synergies
driving the acquisition of Pliant Systems and an overview of its
plans going forward.

On May 1, 2001, Pliant Systems filed a voluntary petition under
Chapter 11 of the United States Bankruptcy Code. Pliant has
continued to operate the business and manage its assets as a
debtor in possession and no trustee or examiner has been
appointed in the case. Pliant Systems sought Chapter 11
protection in order to facilitate an orderly sale of its
business and assets to a third party.

                  About mPhase Technologies

mPhase Technologies, the leading designer of broadcast digital
television and high-speed data solutions for the
telecommunications industry, offers DSL-based services via its
Traverser(TM) Digital Video and Data Delivery System and
provides telcos worldwide with a complete line of DSL
components. The award-winning Traverser(TM) DVDDS enables
telephone companies worldwide to cost-effectively and reliably
transmit up to 400 channels of MPEG-2 quality, broadcast (real
time) digital television programming utilizing a NIP-based
platform, high-speed Internet access and traditional telephone
service, simultaneously, over existing copper telephone lines.
The Company believes that by avoiding transmission of video over
traditional IP- or ATM-based networks, it possesses the
capability to deliver a superior, more reliable and cost-
effective video experience to the end user. The comprehensive
package offered by mPhase and mPhaseTelevision.net provides
telcos with turnkey systems that couple technology with content,
thereby enhancing their revenue opportunities. The mPhase DSL
Components Line includes a full suite of products including the
mPhase iPOTS(TM)(Intelligent POTS Splitter Shelf), Test Access
Shelf, traditional POTS Splitter Shelf and In-Line Filters. More
information is available by calling mPhase Sales at 203.838.2741
or by writing to info@mPhaseTech.com. More information may also
be obtained by visiting the Company's web site at
www.mPhaseTech.com.

                     About Pliant Systems

Pliant Systems Inc. designs, manufactures and markets integrated
multi-service access platforms for the telecommunications
industry. The company provides Incumbent Local Exchange Carriers
(ILECs) and Competitive Local Exchange Carriers (CLECs) with
integrated access systems capable of delivering voice, data and
video services over diverse network topologies. The company's
primary product, the Pliant 3000 Integrated Access Platform, is
designed to relieve the strain on Digital Loop Carrier (DLC)
systems caused by the Internet explosion, utilizing a
distributed architecture to deliver traditional telephony and
merging high-bandwidth services deep into the access network.
The company's web site is www.pliantsystems.com.


PSINET INC. Verizon & Worldcom Challenge Utility Injunction
-----------------------------------------------------------
In the normal conduct of their businesses, PSINet, Inc. obtains
gas, water, electric, telephone and other related services. Such
utility services are essential to the operation of PSINet and
must continue uninterrupted during the Chapter 11 proceedings,
the Debtors tell the Court.

The Debtors sought and obtained an order prohibiting its
approximately 135 utility providers from altering, refusing or
discontinuing service solely on account of prepetition invoices
and authorizing PSINet to pay on a timely basis in accordance
with their pre-petition practices all undisputed invoices for
utility services provided by any utility company after the
petition date and prior to the termination and reliquishment of
a particular service provided by a utility company.

The Court's order provides that, beginning 60 days after entry
of the order, any utility company may bring a motion seeking a
determination of whether, in light of the Debtors' then existing
cash and cash-equivalent balances and monthly expenditures, such
utility company will remain adequately assured of payment for
utility services provided to the Debtors more than 90 days after
the entry of the Court's order.

In the event a Utility Company believes the administrative
priority and availability of cash does not provide adequate
assurance of future payment as described in 11 U.S.C. Sec. 366,
Judge Gerber ruled, the Utility Company may bring a motion
before Judge Gerber within 60 days seeking a separate
determination of what constitutes "adequate assurance."

In seeking the order, the Debtors cite Section 366 of the
Bankruptcy Code which generally prohibits utility companies from
terminating utility services on account of a debtor's bankruptcy
or failure to pay for prepetition utility services when due.
Specifically, Section 366 of the Bankruptcy Code provides for a
20-day standstill period following the date of a debtor's
petition. Section 366 of the Bankruptcy Code, the Debtors note,
provides that this prohibition against termination of utility
services remains in force so long as the debtor furnishes a
utility company with adequate assurance of payment for
postpetition services within the 20-day standstill period. The
Debtors are also aware that Section 366(b) of the Bankruptcy
Code protects such utility companies by providing in part that
such utility may "alter, refuse, or discontinue service if
neither the trustee nor the debtor, within 20 days after th date
of the order for relief, furnishes adequate assurance of
payment, in the form of a deposit or other security. . . .

In the PSINet cases, the Debtors have convinced Judge Gerber
that their approximately $324 million in cash, cash equivalents
and marketable securities on their balance sheets as of May 2,
2001, and the administrative expense priority accorded to the
utility companies under sections 503(b)(1)(A) and 507(a)(1) of
the Bankruptcy Code provide adequate assurance of payment under
Section 366(b) of the Bankruptcy Code for services rendered to
the Debtors during the period between the petition date and the
date that is 90 days after entry of the Court's order, given
that the Debtors use cash at an estimated rate of approximately
$15 million per month.

Section 503(b)(a)(A) of the Bankruptcy Code provides that any
unpaid post-petition date charges for utility services rendered
after the petition date and prior to the termination or
relinquishment of a particular service provided by a utility
company constitute actual and necessary expenses of preserving
the Debtors' estates, entitling the utilities companies to an
administrative expense priority.

The Debtors tell Judge Gerber that their unencumbered cash and
cash equivalent reserves, which is unusual in the context of a
chapter 11 filing, distinguishes their cases from the cases of
debtors which have been compelled by imperfect payment histories
to post cash deposits as adequate assurance of payment for
postpetition services.

The Debtors acknowledge that its payment history "is not
perfect". However, the late payments and less-than-full
payments, the Debtors argue, in many instances reflect the
Debtors' honest disputes of amounts billed by those utilities
companies. The Debtors also represent to the Court that they
have made great strides to meet their legitimate payment
obligations to the utility companies on a timely basis.

The Debtors mention in the motion that they had provided notice
of the motion to (a) the United States Trustee for the Southern
District of New York; (b) counsel to the Ad Hoc Committee of
Senior Noteholders of PSINet Inc., and (c) any other party who
has requested notice in the PSINet chapter 11 cases. The
utilities companies were not included.

Within five business days after the entry of the order, the
utilities companies were served with a copy of the motion and
the signed order of the Court.

                   Verizon Communications
               Seeks Reconsideration of Order

Verizon Communications Inc. f/k/a Bell Atlantic Corporation and
GTE Corporation, one of the twenty largest creditors holding
unsecured claims, asks the Court to reconsider the order
mentioned above and deny the Debtors' motion. Verizon tells the
Court that it provides the Debtors with an extraordinary high
volume of telephone service, as evidenced by the more than $13.9
million in pre-petition charges which puts Verizon on the Top
Twenty List.

Verizon says that the order for prohibition of utilities from
seeking adequate assurance for 90 days is in violation of
Verizon's rights under Section 366 of the Bankruptcy Code.
Verizon therefore seeks reconsideration of the order, pursuant
to Fed. R. Bankr. P. 9023 and S.D.N.Y. L.B.R. 9023-1, on the
bases that:

      -- the motion constituted a contested matter, and the
Debtors failed to provide adequate notice of this contested
matter as required by Fed. R. Bankr.P.9014 in the manner
required by Rule 7004;

      -- by not allowing Verizon any opportunity to request
adequate assurance for 90 days after entry of the order, the
order is contrary to Verizon's statutory rights under section
366 of the Bankruptcy Code;

      -- Verizon is entitled to a two-month deposit to adequately
protect Verizon against the significant risk of non-payment;

      -- notwithstanding the Debtors' contention that they use
cash at the rate of $15 million per month, actually they have
burned cash at a rate of over $60 million, based upon the
information that the Debtors have in excess of $300 million of
cash but they had approximately $900 million in cash in
September 2000, which indicates a burning rate of approximately
$600 million in 9 months - a rate of over $60 million per month;

      -- while the Debtors admit that their payment history is
less than perfect and attribute this to honest disputes, the
amount of $13,964,135 stated as pre-petition charges they owe
Verizon is not listed as a disputed claim;

      -- the large sums that the Debtors have been spending per
month, combined with their poor payment history, emphasize the
need to provide Verizon the immediate adequate assurance of
payment required by section 366 of the Bankruptcy Code.

Verizon draws Judger Gerber's attention to similar cases in
which courts have required the payment of a deposit, as in re
Hanratty, 907 F.2d 1418 (3d Cir. 1990), in re Norsal Indus,
Inc., 147 B.R. 85 (Bankr. E.D.N.Y. 1992), in re Northwest
Recreational Activities, Inc. 8 B.R. 7 (Bankr. N.D. Ga. 1980),
in re Smith, Richardson & Convoy, Inc. 50 B.R. 5 (Bankr. S.D.
Fla. 1985), in re Stagecoach Enters., Inc., 1 B.R. 732 (Bankr.
M.D. Fla. 1979) and I re Sun-Tel Communications, Inc., 39 B.R.
10 (Bankr. S.D. Fla. 1984).

As for the case that the Debtors rely upon to support their
argument, Virginia Elec. & Power Co. v. Caldor, 117 F.3d 646 (2d
Cir. 1997), Verizon notes several distinctions between Caldor
and PSINet. Most notably, Verizon says, the debtor in Caldor was
solvent and had a pre-petition history of making utility
payments on a timely and current basis. Furthermore, the Court
in Caldor imposed more safeguards to protect the utilities, in
requiring the debtor to provide each utility with copies of the
debtor's monthly operating statements, and most importantly, in
providing for an expedited process which allowed the utilities
to petition the court for immediate payment and for an
additional deposit in the event the debtor defaulted on any
post-petition utility payment, Verizon notes.

Verizon also points out that, while the Debtors contend that
utilities do not need any deposit, they paid their counsel in
excess of $1 million on the eve of filing, a portion of which
was to be used as a retainer.

                      Worldcom's Motion for
                 Reconsideration of Utility Order

Worldcom, Inc. tells the Court that the Debtors owed Worldcom
more than $1 million on the petition date for telecommunications
and related services, plus more than $700,000 accrued since the
petition date. Worldcom anticipates that service to the Debtors
at their historical usage rate will run approximately $1.8
million per month. None of these figures, Worldcom points out,
were made known to the Court for consideration of the utilities
motion.

Worldcom sees this payment history against the backdrop of
companies in a financial freefall, under substantial financial
obligations of approximately $3.7 billion, which the Debtors
candidly admit, and default on tens of millions of dollars due
under their senior notes and preferred stock obligations.
Worldcom points out that, notwithstanding the Debtors'
assertions of ready access to significant cash reserves, the
viability of these companies is far from decided. Moreover, a
level of uncertainty is inherent in any chapter 11 proceeding
and that uncertainty should be addressed and remedied, Worldcom
tells the Court.

Worldcom argues that the Utility Order entered by the Court
should be revisited in light of all of the facts because it was
against an incomplete background that the Court entered the
order.

Even if the Utility Order is allowed to stand, Worldcom
contends, the Debtors should be compelled, not merely timely pay
Worldcom for postpetition services in accordance with their
prepetition agreements. The utility tells the Court that, in
light of PSINet's precarious financial status and substantial
ongoing obligatioons to Worldcom, the parties agreed in March
2001 to an arrangement whereby PSINet would make weekly
prepayments for all services from Worldcom, to be applied as a
deposit that earned interest. Thus, in Worldcom's case, its
prepetition contract with PSINet provided adequate assurance of
performance by the Debtors, but the prepayments to date have
been completely or substantially exhausted due to default on
payment for services provided to PSINet. Because the Debtors are
not presently adequately protecting Worldcom's substantial
interests, Worldcom should be entitled to adequate assurance and
protection in the form of the agreed prepayments from the
Debtors, the utility argues.

Worldcom tells the Court that if the alleged adequate assurance
provided by the Utility Order is not modified and the Debtors
are permitted to continue to receive services from Worldcom
without abiding by their prepetition practice, the Debtors could
consume millions of dollars of Worldcom's services without
making payment for it. In other words, Worldcom would be
compelled to extend millions of dollars of unsecured credit to
the Debtors, with no substantial likelihood that such credit
would be repaid, the utility represents. Had Worldcom received
notice of the Utilities Motion, it would have argued before the
Court for its entitlement to adequate assurance, but it had no
prior opportunity to do so absent the notice to it, the utility
reminds the Court.

Based on these reasons, Worldcom submits that reconsideration of
the utility order is appropriate and that additional adequate
assurance should be accorded to it, considering the Debtors'
substantial defaults, their seven-figure monthly usage with
Worldcom and the prepayment agreement between the parties, none
of which were presented to the Court in connection with the
Utilities Motion. In the event that the Court declines to
reconsider the Utility Order and grant additional adequate
assurance to Worldcom, the Debtors should be required to make
weekly prepayments for Worldcom services as was agreed, the
utility submits. (PSINet Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


RANCH *1: Files for Chapter 11 Protection in Manhattan
------------------------------------------------------
Ranch *1, the New York-based fast-food chicken chain that has
been embroiled in scandal for the past year, filed for
bankruptcy protection this week. Reportedly, its total
(unaudited) assets as of April 22 were $6.8 million and its
total liabilities were about $12.4 million. The company, which
owns and operates four Ranch 1 chicken restaurants and
franchises 47 others, had planned a large-scale expansion. But
the firm had trouble raising money in the private equity
markets. Ranch 1 attributed the problems to market conditions as
well as to negative publicity surrounding the indictment last
June of its former CEO on charges of rigging a private placement
of Ranch 1 stock for his benefit. Ranch 1 says it hopes to
pursue its long-term strategic objectives as it seeks relief
under chapter 11. Its largest creditors include Global Alliance
Finance Co., an affiliate of Deutsche Bank Securities (owed $1.7
million); Brand Equity of Greenwich, Conn. ($597,313); New
Vision Foods of Taiwan ($457,143), where the company has a
franchise; the New York City Department of Finance ($340,000);
and David Sculley, a former top executive of H.J. Heinz Co.
turned private investor ($378,575). (ABI World, July 6, 2001)


RANCH *1: Case Summary & List of 20 Largest Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: Ranch *1, Inc.
              567 7th Avenue
              3rd Floor
              New York, NY 10018

Debtor affiliates filing separate chapter 11 petitions:

              Ranch *1 Metro, Inc.
              Ranch *1 Metro Tech, Inc.
              Ranch *1 Pearl, Inc.
              Ranch *1 Group, Inc.
              Moorghro, Inc.
              Ranch *1 of Eighth Avenue, Inc.
              Ranch *1 of America, Inc.
              Ranch *1 Fashion, Inc.
              Ranch *1 Number 0117, Inc.
              Ranch *1 Palisades, Inc.
              Dome Enterprises, Inc.
              Ranch *1 Number 0118, Inc.
              Ranch *1 Number 202, Inc.
              Ranch *1 Number 1701, Inc.
              Ranch *1 of Broadway
              Ranch *1 on 34th Street, Inc.
              Ranch *1 Number 0207, Inc.
              Ranch *1 Number 0112, Inc.
              Ranch *1 52nd, Inc.
              Ranch *1 Number 0137, Inc.
              Ranch *1 Number 0113, Inc.
              Ranch *1 Number 0135, Inc.
              Ranch *1 Number 0215, Inc.
              OME, Inc.
              Ranch *1 Number 1904, Inc.
              Ranch *1 Downtown, Inc.
              Ranch *1 Number 0150, Inc.
              Ranch *1 Number 0128, Inc.

Nature of Business: The company, along with its subsidiaries,
                     own, operate, franchise and license upscale
                     quick-service restaurants that specialize in
                     fresh-grilled skinless, boneless chicken
                     breast sandwiches, which are advertised as
                     "The Best Grilled Chicken Sandwich on
                     Earth", Famous Ranch*1 Fries and a variety
                     of freshly prepared healthy menu selections.

Chapter 11 Petition Date: June 3, 2001

Court: Southern District of New York (Manhattan)

Bankruptcy Case Nos.: 01-41853ajg through 01-41881ajg

Judge: Arthur J. Gonzalez

Debtors' Counsel: Alan J. Brody, Esq.
                   Buchanan Ingersoll
                   140 Broadway
                   New York, NY 10005
                   (212) 458-2380

Total Assets: $6,817,423

Total Liabilities: $12,381,680

List of Debtor's 20 Largest Unsecured Creditors:

Entity                                  Claim Amount
------                                  ------------
GAFCO (Deutsche)                        $1,687,804
c/o  International Franchise Co.
390 5th
San Diego, CA 92103

Brand Equity                              $597,313
Three Pickwick Plaza
Greenwich, CT 06830

New Vision Foods                          $457,143
Mr. Eton Huang
IF, 21 Chin Hu Road
Taipai 114
Taiwan

D. Sculley                                $378,575
301 Grant Street
Pittsburgh, PA 15219

Salvatore Rametta                         $367,403
2-Deercrest Drive
Holmdel, NJ 07733

NYC Dept. Of Finance                      $340,000
PO Box 3213
Church Street Station
New York, NY 10242-0323

FBE Enterprise                            $311,764
111 Broadway
New York, NY 10006

Ranch 1 Advertising Co-op                 $298,232
567 Seventh Avenue
New York, NY 10018

1333 Broadway Associates                  $229,166

Stroock & Stroock                         $222,284

Joseph Daprile                            $202,311

Greenberg Traurig                         $191,320

Winoker Realty Co. Inc.                   $135,893

New York State Tax Department             $132,000

FKF Holding Co., LLC                      $121,031

Bellevue Trust                            $119,867

Bellevue Trust                            $119,867

Joan S. Youngman                          $116,967

AFI Food Service Inc.                     $109,575

G. Naddaff                                $108,850


RESEARCH INC.: Major Customer Defers Orders For Transport Units
---------------------------------------------------------------
Research, Inc. (Nasdaq: RESR) announced that a major customer
has deferred orders for the company's ink drying and paper
transport units. The order flow is expected to resume in four to
six months, however at lower levels, pending a reduction in the
customer's current inventory of product. As a result of this
situation and the discontinuation of its reflow oven business,
announced on June 13, the company said that its quarterly
revenues going forward would be approximately 20 to 30 percent
of its average quarterly revenues in fiscal 2000.

In response, Research, Inc. said that it would pursue all
available means of cost reduction in the coming weeks, including
the possible sale of its discontinued reflow oven product line
and other product lines, to minimize the impact of this sales
reduction on its operating results and cash position.

Research, Inc. said that the cost containment measures currently
being pursued would result in additional charges against
earnings, to be reflected in its fourth quarter, ended September
30, 2001. Pre-tax charges of approximately $3,900,000, relating
to the discontinuation of the reflow oven business, are being
applied in the third quarter, ended June 30, 2001.

The company is continuing to work with its bank to resolve non-
compliance with the tangible net-worth covenant in its banking
agreement.

Research, Inc. designs and manufactures complete product
solutions based on its core competency: the precise control of
heat. The company targets high-growth markets worldwide
including printing (ink drying and paper transport systems) and
plastics extrusion. Research, Inc. is headquartered in Eden
Prairie, Minn. The company's common stock trades on the Nasdaq
SmallCap Market under the symbol: RESR. Additional news and
information can be found on the company's Web site at
http://www.researchinc.com


SERVICE MERCHANDISE: Agrees To Amend Lease Of Store #559 In IL
--------------------------------------------------------------
As a result of negotiations with the Landlord's Representative,
Service Merchandise Company, Inc. has agreed to the terms of a
Lease Amendment in the exercise of their reasonable business
judgment, and the Landlord's Representative has agreed to
withdraw the Complaint.

Under the Amendment, the Debtors will consent to the
construction whereby a Borders Books Store will be added in the
Shopping Center. The Debtors believe that this will result in a
refurbished shopping center which will attract more business.
The Debtors note that Borders Group Inc., through its
subsidiaries of Borders, Inc. and Walden Book Company, Inc., is
the second largest operator of book superstores and the largest
operator of mall-based bookstores in the world. As of January
28, 2001, the Company operated approximately 330 superstores and
870 mall-based and other bookstores in the United States, the
Debtors advise.

In consideration for the consent, the Debtors' annual rent under
the Lease will be reduced by $100,000 per year, including all
option years. The Landlord has agreed to accelerate the Rent
Reduction pursuant to the terms of the Amendment in the event
that the Debtors vacate the Premises for any reason.
Specifically, at the time the Debtors vacate the Premises or
otherwise reject the Lease, the Landlord will pay the Debtors a
lump sum that approximates the present value of the unamortized
Rent Reduction over the remaining term of the lease, in an
amount not to exceed $850,000. In order to approximate this
present value, the parties have agreed that the maximum amount
of the Rent Reduction payable in a lump sum will be reduced by
$50,000 per year during the remaining term of the lease. In
other words, after one year, the lump sum payable would be
$800,000; after two years, the maximum would be $750,000 and so
on.

The Landlord intends to construct a new two sided pylon sign at
the Shopping Center. SMCO as Tenant will have the right to place
its pylon sign panel on the new pylon sign in the secondary
position on both sides of such sign so long as the Premises is
being used as a Service Merchandise store.

The Debtors have determined, in their reasonable business
judgment, that entry into the Amendment is in the best interests
of the Debtors, their estates, creditors and interest holders
and is necessary to the Debtors' prospects for a successful
reorganization.

Accordingly, the Debtors sought and obtained the Court's
authority, for the Debtors and LaSalle Bank National
Association, formerly known as LaSalle National Bank, as
successor trustee to LaSalle National Trust, N.A., not
personally but as trustee under Trust Agreement dated February
1, 1974 and known as Trust No. 45786 to enter into an agreement
to amend the lease (the Amendment) with respect to the Debtors'
leased real property known as Store Number 559 located in
Norridge, Illinois. (Service Merchandise Bankruptcy News, Issue
No. 18; Bankruptcy Creditors' Service, Inc., 609/392-0900)


SUN HEALTHCARE: Public Notice of NeuroFlex Sale
-----------------------------------------------

                    UNITED STATES BANKRUPTCY COURT
                          DISTRICT OF DELAWARE

-------------------------------------x
In re                                :  Chapter 11 Case No.
                                      :
SUN HEALTHCARE GROUP, INC., et al.,  :     99-3657 (MFW)
                                      :
                   Debtors.           :  (Jointly Administered)
-------------------------------------x

                     NOTICE OF INTENTION TO SELL
                  CERTAIN ASSETS OF NEUROFLEX, INC.

      PLEASE TAKE NOTICE that Sun Healthcare Group, Inc. and
certain of its direct and indirect subsidiaries, related
partnerships and related companies (collectively, the "Debtors")
are offering to sell certain assets of NeuroFlex, Inc.
("NeuroFlex"), one of the Debtors.  NeuroFlex provides orthotic
braces for chronic join and spinal problems related to
immobility or neurological underlying disease states within the
orthotic marketplace, primarily in the long term care market.

      PLEASE TAKE FURTHER NOTICE that any party interested in
purchasing the NeuroFlex assets must contact the Debtors, c/o
John Driscoll, Sun Healthcare Group, Inc., 101 Sun Avenue, N.E.,
Albuquerque, NM 87109, telephone number (505) 821-3355, no later
than July 11, 2001 noon (Mountain time).

Dated:  June 28, 2001
         Wilmington, Delaware


SUN HEALTHCARE: Settles Gerald A. Martin's Construction Claim
-------------------------------------------------------------
Sun Healthcare Group, Inc. and Gerald A. Martin, Ltd. seek the
Court's approval to their agreement, as set forth in a
stipulation, which provides for, among other things, payment by
the Debtors of the outstanding amount of $505,374.00 for
construction of an office building and parking structure in New
Mexico at a contract price of $46,359,773.00.

On October 5, 1998, the Parties entered into a contract for the
construction of the property to be located at 101 Sun Avenue,
Albuquerque, New Mexico.

Subsequent to Sun cases' Petition Date on October 14, 1999, the
Parties entered into five separate contractual modifications
(the "Change Orders") each of which further reduced the Contract
Price. The most recent Change Order, dated March 16, 2001,
reduced the Contract Price from $46,359,773.00 to the aggregate
sum of $31,421,102.00. The Debtors have remitted payment of
$30,915,728.00 to GAM for pre-petition and post-petition
services performed pursuant to the Contract. The outstanding
balance due GAM, as modified by the March 16, 2001 Change Order,
is $505,374.00. This remaining amount represents fees due GAM
solely for services performed post-petition.

On February 1, 2001, construction of the Property was completed.
Shortly thereafter, GAM forwarded to the Debtors a Conditional
Waiver of Lien. Pursuant to the Waiver, upon the receipt of
$505,374.00, GAM will agree to waive any mechanic's or
materialmen's lien against the Property and indemnify, defend
and hold the Debtors harmless for any liability resulting from
the failure or refusal of GAM to pay and discharge in full any
claims for labor or materials furnished and contracted for by
GAM.

The Debtors agree to remit payment of $505,374.00 to GAM as
compensation for post-petition services provided to the Debtors
within five business days of the Effective Date, that is, the
date on which the Court's approval becomes final and
nonappealable.

The Parties agree that the Payment satisfies all outstanding
obligations the Debtor owes GAM pursuant to the October 5, 1998
Contract for the construction of the Property.

In return for the payment, GAM will waive and release any
mechanic's or materialmen's lien or claim or right of such lien,
express or implied, constitutional, statutory, contractual or
otherwise, against the Property or any improvements now or
hereafter located thereon.

GAM expressly warranties that all sums of money due for labor
and materials furnished and contracted for by GAM in connection
with the construction of the Property have been paid for. GAM
further warranties that there are no unpaid claims for labor or
materials against the Property.

GAM hereby agrees to indemnify, defend, and hold Debtors
harmless for any and all liability, loss or damage that Debtors
may suffer or sustain by reason or in consequence of, the
failure or refusal of GAM to pay and discharge in full any
claims for labor or materials furnished and contracted for by
GAM that may be made against the Property or against the
Debtors.

A hearing on the matter has been scheduled for July 13, 2001.
(Sun Healthcare Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


TAPISTRON INTERNATIONAL: Files Chapter 11 Petition in Tennessee
---------------------------------------------------------------
Tapistron International, Inc. filed a voluntary petition under
Chapter 11 of the U.S. Bankruptcy Code on July 2, 2001, in the
U.S. Bankruptcy Court located in Chattanooga, Tennessee.

Jack F. Godfrey has also resigned as a member of the Board of
Directors of Tapistron International, Inc. Mr. Godfrey is
President and CEO of Wayn-Tex, Inc., a company unrelated to
Tapistron International, Inc. Mr. Godfrey resigned because his
responsibilities at Wayn-Tex, Inc. made it difficult for him to
meaningfully contribute as a Board member. Mr. Godfrey is the
beneficial owner of 20,000 shares of the company's common stock.
His term would have expired at the 2002 annual meeting of the
company's shareholders. His position on the Board will remain
vacant at this time.

Moreover, Douglas H. Hoskins has also delivered his letter of
resignation as a member of the company's Board of Directors to
the Chairman of the Board. Mr. Hoskins explained that his
resignation was due to limitations on his time and his
unavailability to be a contributing member of the Board. Mr.
Hoskins is not a shareholder of the company. His term would have
expired at the 2003 annual meeting of the company's
shareholders. His position on the Board has been filled by Bruce
C. Elliston. Mr. Elliston also serves as the company's Executive
Vice President. Mr. Elliston is the beneficial owner of 39,600
shares of the company's common stock, and owns options to
acquire an additional 326,000 shares of the company's common
stock upon the exercise of options granted under the company's
1992 Stock Option Plan.

Based in Ringgold, Ga., Tapistron International manufactures a
machine for producing pattern-tufted carpets and rugs.


TAPISTRON INTERNATIONAL: Chapter 11 Case Summary
------------------------------------------------
Debtor: Tapistron International, Inc.
         P. O. Box 1067
         Ringgold, GA 30736

Chapter 11 Petition Date: June 02, 2001

Court: Eastern District of Tennessee (Chattanooga)

Bankruptcy Case No.: 01-14159

Judge: R. Thomas Stinnett

Debtor's Counsel: Thomas E. Ray, Esq.
                   Wooden, Ray, Fulton & Scarborough
                   737 Market Street, Suite 620
                   Chattanooga, TN 37402
                   423-756-9972


TELESYSTEM INTERNATIONAL: Proposes Private Exchange Offer
---------------------------------------------------------
Telesystem International Wireless Inc. (NASDAQ:TIWI) (TSE:TIW.)
(TIW) plans to make an offer to the holders of its outstanding
13 1/4% Senior Discount Notes due 2007 and 10 1/2% Senior
Discount Notes due 2007 to exchange for such Notes a combination
of cash and new 14% Senior Notes due December 30, 2003 to be
issued by TIW.

The total principal amount of new Senior Notes to be issued
would be up to US$195 million, prorated to the extent that less
than all of the outstanding Senior Discount Notes are tendered
in the exchange offer. Interest will be payable semi-annually
and the first two payments may be made in cash or additional
Notes at the option of TIW. The total amount of cash to be paid
in the exchange offer, including consent fees payable in the
related consent solicitation discussed below, is US$50 million,
which amount will not be subject to reduction regardless of the
principal amount of Senior Discount Notes tendered. As at June
30, 2001, the total accreted value of the two series of Senior
Discount Notes was US$480 million and the aggregate principal
amount at maturity is US$547 million.

The Senior Notes to be offered and exchanged in the exchange
offer will not be registered under the U.S. Securities Act of
1933 or offered by prospectus under Canadian securities laws.
The exchange offer will be made pursuant to a private placement
exemption under the Securities Act, and only "Qualified
institutional buyers" and "Accredited investors" (as these terms
are defined under the Securities Act) will be eligible to
participate in the exchange offer. The exchange offer will be
made only by means of a Confidential Offering Memorandum to be
prepared by TIW. The holders of a majority in principal amount
at maturity of each series of the Senior Discount Notes have
agreed with TIW to tender their Notes in the exchange offer,
subject to customary terms and conditions. The exchange offer
will also be subject to receipt by TIW of certain lenders
consents and satisfaction of other customary conditions.

The Senior Notes will be guaranteed by a wholly-owned subsidiary
of TIW. The guarantee will be secured by a lien on the capital
stock of a subsidiary holding TIW's Brazilian cellular
operations and, upon repayment by TIW of its bank borrowings but
no later than October 2002, by a lien on the capital stock of
ClearWave N.V. held by TIW. The guarantee and the liens will be
subordinated and subject to the security granted in favor of
TIW's bank lenders. The Senior Notes will be subject to
mandatory redemption with net proceeds, not used to repay the
bank borrowings, of any disposition by TIW of its interests in
the Brazilian A Band and in ClearWave N.V, but for ClearWave,
only up to US$125 million. The indenture governing the Senior
Notes will contain covenants substantially similar to the
covenants in the existing indenture but subject to some
additional limitations.

TIW also plans to seek consents from the holders of its Senior
Discount Notes to amend the existing indentures governing those
Notes in order to delete substantially all of the non payment-
related covenants in such indentures and the related events of
default. The indenture for the new Senior Notes will contain non
payment-related covenants and events of default substantially
similar to those currently in the Senior Discount Notes
indentures, modified to reflect the terms of the new Notes to be
issued in the exchange offer.


THCG, INC.: Completely Liquidates THCG, LLC Subsidiary
------------------------------------------------------
THCG, Inc. (OTC BB: THCG) said that its Board of Directors has
adopted a plan to completely liquidate its subsidiary, THCG,
LLC, through a liquidating trust for the benefit of the
Company's stockholders.

The Trust will own substantially all of the Company's current
assets (except for approximately $2.1 million in cash,
restricted cash and a note receivable), and the Company's
marketable and non-marketable securities.

The Company also announced that it has signed a definitive
agreement to acquire Donald & Co. Securities, Inc., a financial
services firm. The acquisition will be structured as a share
exchange with existing THCG holders retaining approximately 32%
of the combined company. The acquisition will close after the
distribution of the Trust and Donald & Co. shareholders will not
participate in that distribution. In order to complete these
transactions, the Company has also loaned Star Cross, Inc., the
sole stockholder of Donald & Co., $400,000 and granted Donald &
Co. a license to use part of the Company's premises upon payment
of an agreed upon license fee, and has entered into agreements
with its preferred stockholder to exchange its shares as
described below.

                         The Trust

The Company will enter into a liquidating trust agreement that
will create the Trust. The sole purpose of the Trust will be to
hold, conserve and protect its assets until they can be
liquidated. Joseph D. Mark and Adi Raviv, executive officers and
directors of the Company, will be the initial trustees of the
Trust. The Board of Directors believes this plan is necessary to
address business and market-related issues, including the
concern that the Company may be required to register as an
investment company under the Investment Company Act of 1940.
Holders of the Company's common stock will receive one unit of
beneficial interest in the Trust for each share of the Company's
common stock held on July 16, 2001, the record date for this
distribution. The Company estimates that the value of the
distribution will be between $0.12 and $0.18 per Trust Unit.

Stockholders of the Company that are entitled to receive Trust
Units will not be required to take any action to receive their
Trust Units, will retain their shares of the Company's common
stock and will continue to be stockholders of the Company. The
Trust Units will not be represented by certificates and will not
be transferable except upon death or by operation of law. There
will be no market for the Trust Units and the Trust will not be
subject to reporting requirements under the Securities Exchange
Act of 1934.

The Company will contribute to the Liquidating Trust its
membership interest in THCG, LLC, certain contract rights, its
accounts and certain notes receivable, and all of its cash and
cash equivalents on hand on the Record Date in excess of
approximately $1.7 million. The Company and its subsidiaries
will contribute to THCG, LLC all of their direct and indirect
rights and interests in any security acquired for investment, or
in connection with their provision of venture banking or venture
development services, including any related promissory notes,
contracts, agreements or instruments. In addition, the Company
will contribute to THCG, LLC its rights and interests in the
stock of its inactive subsidiaries and the promissory notes
executed by a former executive officer of THCG in the aggregate
principal sum of approximately $350,000.

As a result of the establishment of the Trust, the Company will
no longer own a substantial amount of the assets reflected on
its consolidated balance sheet as March 31, 2001, but will have
a net worth of approximately $2.6 million immediately after the
establishment of the Trust. This net worth will include
approximately $2.1 million in cash, restricted cash, and the
note receivable related to the loan to Star Cross.

The Trust will terminate on the earlier of the date of
distribution of all of its assets or July 16, 2004, except that
the Trustees may extend the Trust to a later date, but not later
than July 16, 2006, if they determine an extension is reasonably
necessary either to pay or make provision for then known
liabilities or to conserve and protect the Trust assets for the
benefit of the beneficiaries of the Trust.

                   Acquisition Transaction

The Company has signed a definitive agreement to acquire Donald
& Co. The acquisition is anticipated to close in late July 2001,
after the distribution of the Trust Units. The transaction is
structured as an acquisition of Donald & Co. by the Company.
After the transaction, current stockholders of the Company will
own approximately 32% and the current Donald & Co. shareholders
will own approximately 67% of the combined company,
respectively. A fee of one percent of the Company's common stock
will be paid to a finder in connection with the closing of the
transaction. A majority of the Board of Directors will change to
reflect the change in control. Simultaneously with the execution
of the Definitive Agreement, the Company loaned Star Cross
$400,000 and granted Donald & Co. a license to use part of the
Company's premises for which an agreed upon monthly license fee
is due and payable commencing July 1, 2001.

Donald & Co. Securities Inc. is a registered broker dealer and
member of the National Association of Securities Dealers, Inc.
It is a full service firm offering a variety of services
including retail and institutional brokerage, underwritten
public offerings and other investment banking activities. The
firm is also engaged in proprietary trading. Donald & Co. and
its predecessors have been engaged in the securities business
since 1916. The firm's executive office is in New York City and
its principal office is in New Jersey. It has branch offices in
New York, Florida, Arizona and Iowa. It presently has
approximately 140 employees, including approximately 90
registered representatives. For the years ended September 1998,
1999 and 2000, Donald & Co. generated revenues of $18.9 million,
$23.0 million and $24.2 million, respectively. For the eight
months ended May 31, 2001, Donald & Co. generated revenues of
approximately $9.3 million. At May 31, 2001, Donald & Co. had a
net worth of approximately $1.1 million.

               Restructuring of Preferred Stock

Castle Creek Technology Partners LLC, the holder of all of
the outstanding shares of the Company's series A convertible
participating preferred stock has approved the Trust plan and
the acquisition of Donald & Co. Pursuant to the terms and
provisions of a restructuring agreement with the Company, Castle
Creek has exchanged 2,000 shares of its Preferred Stock,
together with all accrued and unpaid premiums relating thereto,
and its warrants to purchase up to 396,899 shares of the
Company's common stock, for 1,250,000 shares of the Company's
common stock, a promissory note in the principal amount of
$1,500,000 payable to the order of Castle Creek, $500,000 in
cash and amended and restated warrants to purchase up to 396,899
shares of the Company's common stock for $5.039 per share
(subject to customary anti-dilution adjustments for stock
splits, dividends and combinations). The Note will be assigned
to and assumed by the Trust pursuant to the terms of the Trust
Agreement and the Company will be released from its obligations
under the Note upon the acquisition of Donald & Co. The Note
must be prepaid out of the net, after-tax cash proceeds from the
sales of assets by the Trust as long as the Trust has cash
reserves of at least $500,000, or such lesser amount as provided
in the Note. Furthermore, at the closing of the acquisition of
Donald & Co. or another merger, acquisition or sale of the
Company that is consummated by September 30, 2001, Castle Creek
has committed to contribute its remaining 3,000 shares of
Preferred Stock to the Company.

         Information on Trust, Trustees and Trust Units:

The receipt of any Trust Units will be treated as a dividend,
and includable as ordinary income, to the extent of the lesser
of (i) THCG's current and accumulated earnings and profits, and
(ii) the fair market value of the Trust Units as of the Record
Date. To the extent that the fair market value of the Trust
Units as of the Record Date exceeds THCG's current and
accumulated earnings and profits, this excess will be treated
(i) as a non taxable return of capital to each THCG stockholder
to the extent of each THCG stockholder's adjusted basis in the
THCG stock held by such stockholder and (ii) as a capital gain
to the extent such excess exceeds the stockholder's adjusted
basis. THCG estimates that it will not have any current or
accumulated earnings and profits as of the end of its current
taxable year (in which it anticipates the distribution will
occur) and thus the entire fair market value of the Trust Units
will constitute either a return of capital or capital gain. The
Trustees will send to each stockholder as of the Record Date a
Form 1099 reporting the actual value. The Form 1099 will be
mailed on or before January 31, 2002.

Each Trust Unit will entitle its holder to receive a pro rata
portion of the proceeds collected from the liquidation of the
assets held by the Trust after the Trust pays its liabilities,
including its liabilities under the Castle Creek Note described
above. The distribution of proceeds will be made in as prompt
and orderly a manner as possible, but not less frequently than
once each year. The Trustees, acting singly, shall have complete
discretion and broad power and authority to determine the times
at which, the manner in which and the consideration for which
the Trust assets shall be sold or otherwise disposed of and to
deal with the Trust assets and administer the Trust. In no event
shall the Trustees at any time, on behalf of the Trust or
holders of the Trust Units, enter into or engage in any trade or
business and, with limited exceptions, no part of the Trust
assets shall be used or disposed of by the Trustees in
furtherance of any trade or business.

The Trustees may retain other persons (including themselves) to
act as employees, agents or advisors of the Trust or any of its
subsidiaries and to determine the compensation to be paid to
such persons. The Trustees are required to use reasonable
business judgment in the exercise of their rights and powers
under the Trust Agreement and shall not (a) directly or
indirectly, sell or otherwise transfer all or any part of the
Trust assets to, or contract with, any Trustee, employee, agent
or beneficiary of the Trust, any member of the family of any
Trustee, employee, agent or beneficiary of the Trust or any
affiliate of any of the foregoing (other than the Company or a
subsidiary of the Trust), or (b) sell a Trust asset in a
privately negotiated transaction or series of related
transactions for more than $1,000,000 or settle or compromise
any litigation or other contingent liability for more than
$250,000 unless in any such case such transaction has been
approved by a special committee of the Trust, which will be
entitled to receive any information it requests with respect to
the administration of the Trust or such transactions.

The Company will not transfer to the Trust, and the Trust will
not assume, any liabilities of the Company, except that the
Trust will (i) assume the obligations of the Company under the
Castle Creek Note described above, and the Company's transaction
costs and expenses in connection with the establishment of the
Trust and the related transactions, (ii) indemnify the directors
and officers of the Company to the fullest extent the Company is
obligated to do so under its charter and bylaws, (iii) indemnify
the Company against any material liability of the Company that
is not disclosed in the Company's financial statements, in any
report filed by the Company with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as
amended, or in any exhibit or schedule to the Definitive
Agreement of which liability the executive officers of the
Company have actual knowledge as of the Record Date, and (iv)
indemnify the Company against liabilities that result from any
action, suit or proceeding that (x) commenced against the
Company and was pending on the Record Date (defined below),
including actions, suits and proceedings involving the Company's
former factoring businesses, or (y) arises out of or relates to
the distribution of the Trust Units to the Company's
stockholders. The Trust will assume the defense, and cost of
defense, of any such action, suit or proceeding. The Trustees,
and any persons retained by them to act as employees, agents or
advisors of the Trust, and members of the special committee of
the Trust will also be indemnified by the Trust to the extent
of the assets of the Trust, unless such person has been
adjudicated to act with gross negligence, fraud or willful
misconduct knowingly or intentionally committed in bad faith.

Messrs. Mark and Raviv will receive no compensation from the
Trust, as trustees, but will be reimbursed for their reasonable
expenses of administering the Trust. They will be compensated
for managing the Trust's assets with a "carried interest" equal
to 20% of the proceeds received by THCG, LLC from the
liquidation of any asset in excess of the original cost of such
asset, after the payment of the liabilities of THCG, LLC, except
for assets covered by an investment management agreement with
Windy City, Inc., a privately held investment firm of which a
director of the Company is the President. In addition, Messrs.
Mark and Raviv will be appointed non member managers of THCG,
LLC for which they will receive compensation of $200,000 per
year in the aggregate for at least two years and substantially
the same benefits to which they are entitled under their present
employment agreements with the Company. The amount of this
compensation will be subtracted from any payment due to Messrs.
Mark and Raviv on account of their carried interest. If payments
owing on account of the carried interest are less than the
management compensation paid to Messrs. Mark and Raviv, they
will be obligated to repay any shortfall to THCG, LLC to the
extent of the proceeds they receive from any Trust Units they
hold.

The Trustees may resign at any time on 60 days' notice and are
subject to removal if the special committee of the Liquidating
Trust in good faith determines there is "cause" for doing so and
the holders of 50% of the Trust Units (other than the trustees,
members of their families and affiliates of the foregoing)
approve the removal. Cause is defined as conviction of a felony,
fraud adversely affecting the Liquidating Trust or THCG, LLC or
a willful and substantial failure to perform duties or breach of
obligation to the Liquidating Trust or THCG, LLC for 30 days
after notice from the special committee.

If a trustee is removed, he will also be removed as a manager of
THCG, LLC. The managers of THCG, LLC may resign upon 60 days
notice to the special committee. Upon the resignation or removal
of a manager, the carried interest will be reduced to 10% and
the special committee is entitled to appoint an additional
manager if it reasonably believes that an additional manager is
necessary to manage the business and affairs of THCG, LLC at the
time. Upon the death or disability of a manager, the special
committee may appoint an additional manager, and may reduce the
carried interest, but not to an amount lower than 10%, and shall
allocate the reduction to the new manager.


USG CORPORATION: Paying Prepetition Customer Obligations
--------------------------------------------------------
Prior to the Petition Date, and in the ordinary course of their
businesses, USG Corporation entered into various incentive
arrangements with their customers. These include:

            $30,000,000 of Incentive Obligations:

      (A) Promotional and Cooperative Advertising Allowances.
These allowances are based on the customer's promotion of the
Debtors' products. Customers that purchase the Debtors' products
use funds or credits provided by the Debtors to promote and
advertise the Debtors' product lines. Examples include
cooperative advertising, tear sheets and advertising placement
in local newspapers or trade publications.

      (B) Volume Incentive Credits. These credits are based
on the customer's purchases of the Debtors' products. To the
extent a customer exceeds certain volume targets, it earns a
designated credit. These programs typically are tiered with
increasing credits for increasing volume levels. Credits paid in
cash usually are paid quarterly or annually.

      (C) Corporate Discounts. Certain of the Debtors' customers
earn allowances based on their value as a trading partner.
Usually these are large, nationally based customers, although in
some instances these programs are individually and locally
based. Allowances vary in percentage or amount by product group
or individual customer and may be reserved on the invoices
presented to the customers or paid monthly, or the prices
charged to these customers may be reduced to reflect the
discount. Unlike the Volume Incentive Programs, there are no
volume tiers with respect to Corporate Discounts.

          $5,000,000 of Warranty Claims and Other Credits:

Certain of the Debtors' customers hold prepetition claims
against the Debtors for warranty claims, refunds, adjustments
(including adjustments to billing arising out of, among other
things, billing or shipping errors), product returns or
exchanges and other resolutions of disputed charges. These
Credits are an integral part of the Debtors' day-to-day
operations and are relied upon by the Debtors' customers. The
Debtors generally seek to resolve claims for Credits as
expeditiously as possible to maintain customer goodwill. Credits
are often issued against future purchases, which promotes
continued business relationships with the Debtors' customers.

The success and viability of the Debtors' businesses are
dependent upon the loyalty and confidence of their customers,
Paul E. Harner, Esq., at Jones, Day, Reavis & Pogue argues. The
continued loyalty of the Debtors' customers is essential to the
survival of the Debtors' businesses and the Debtors' ability to
reorganize. Any delay in honoring or paying various Customer
Obligations will likely irreparably impair the Debtors' customer
relations at a time when loyalty and support are critical. The
Customer Programs also encourage increased sales and
productivity by the Debtors' customers to the benefit of the
Debtors. The Debtors would be seriously disadvantaged if the
Customer Programs were not continued and the Customer
Obligations were not honored without interruption.

Moreover, many of the parties to whom Customer Obligations are
owed have setoff or recoupment rights, permitting them, with
Court approval, to offset or recoup the Debtors' obligations to
them against prepetition amounts they owe the Debtors. Because
Customer Obligations owing to customers who have setoff or
recoupment rights would be effectively paid or otherwise
satisfied from assets of the Debtors' estates if those customers
exercise their setoff or recoupment rights, the payment of such
Customer Obligations pursuant to this Motion would not deplete
the Debtors' assets generally available to other creditors.

In sum, to preserve the value of their businesses, the Debtors
should be permitted to continue honoring Customer Obligations,
as described herein, without interruption or modification.
Furthermore, to provide necessary assurances to the Debtors'
customers on a going-forward basis, the Debtors request
authority to continue honoring or paying all obligations to
customers that arise from and after the Petition Date in the
ordinary course of the Debtors' businesses.

Richard H. Fleming, USG's Executive Vice President and CFO
assures Judge Farnan that USG has sufficient cash reserves to
pay all amounts in respect of Customer Obligations in the
ordinary course of their businesses.

Finding merit in USG's request, Judge Farnan authorized the
Debtors, in their sole discretion, to satisfy Customer
Obligations in the ordinary course of the Debtors' businesses in
the same manner and on the same terms and conditions as such
obligations were satisfied prior to the Petition Date. Judge
Farnan makes it clear that nothing contained in his Order
constitutes the Debtors' assumption of any executory contract
and such a request must come before the Court in a separate
motion. (USG Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


VIDEO UPDATE: Wants to Implement "Pay to Stay" Retention Program
----------------------------------------------------------------
Video Update, Inc., et al. seeks an order authorizing
implementation of employee "Pay to Stay" Retention Program. A
hearing on the motion will be held on July 17, 2001 at 10:00 AM
before the Honorable Judith H. Wizmur in Camden, NJ.

Co-counsel to the debtors are Duane, Morris & Heckscher LLP,
Delaware and  Gadsby Hannah LLP, Boston Mass.

The debtors have developed a "Pay to Stay Program" which
provides the incentives necessary for corporate employees not
already covered by a court-approved incentive program to stay
with the debtors through the filing, confirmation and
implementation of their plan of reorganization.

The program includes both a percentage increase in salary as
well as a retention bonus component tied to both confirmation
and separation of employment from debtors. The program covers
thirty-five to forty employees. The total cost of the Pay to
Stay Program equals approximately $320,000.


VITTS NETWORKS: Court Okays Bidding Procedures And Breakup Fee
--------------------------------------------------------------
By order entered on June 27, 2001 by the Honorable John C.
Akard, District of Delaware, Vitts Networks, Inc., et al. is
granted bidding procedures in accordance with a sale of assets,
and a breakup fee in the amount of $18,000. Each Qualified Bid
must be in an amount of at least $630,000. If Qualified Bids are
received, the debtors will conduct an auction of the assets at
the offices of its counsel, Duane, Morris & Heckscher LLP on
July 18, 2001. The hearing to approve the debtors' sale of the
assets shall be held on July 18, 2001 at 3:00 PM.


VLASIC FOODS: Lincoln Graphics Resigns From Creditors' Committee
----------------------------------------------------------------
Joseph J. McMahon, Jr., Esq., from the Office of the United
States Trustee for Region III advises the Court that trade
creditor Lincoln Graphics tendered its resignation from the
Creditors' Committee in Vlasic Foods International, Inc.'s
chapter 11 cases. The U.S. Trustee is reviewing the Committee's
composition in the wake of the Lincoln Graphics resignation.
(Vlasic Foods Bankruptcy News, Issue No. 7; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


WARNACO GROUP: Retains Rosenman & Colin LLP As Special Counsel
--------------------------------------------------------------
By application, The Warnaco Group, Inc. asks Judge Bohanon for
authority to employ and retain Rosenman & Colin LLP as special
intellectual property counsel.

Warnaco Group Vice-President Stanley P. Silverstein explains
they chose the firm Rosenman & Colin LLP because one of its
partners, Karen Artz Ash, has been the Debtors' intellectual
property counsel for the past 18 years.

Rosenman will provide the legal and litigation support on
intellectual property matters including, but without limitation,
advising and representing the Debtors with respect to:

       (a) Searching and preparing opinions relating to the
availability of trademarks and copyrights, and taking steps to
register, preserve and maintain such properties;

       (b) Taking all necessary action to protect and preserve
Debtors' copyright and trademark registrations;

       (c) Administering settlement agreements between the
Debtors and third parties with respect to Debtors' intellectual
property;

       (d) Maintaining and directing the prosecution and
maintenance of Debtors' copyrights and trademark applications
and registrations;

       (e) Negotiating, drafting and administrating commercial
agreements with respect to Debtors' intellectual property
including, but not limited to, patent, trademark, copyright and
design license and sale agreements;

       (f) Negotiating, drafting and administrating endorsement
and sponsorship agreements granting intellectual property rights
to Debtor;

       (g) Negotiating, drafting and administrating export
customer agreements with respect to products incorporating
Debtors' intellectual property;

       (h) Negotiating, drafting and administrating Debtors'
retail store agreements with third parties concerning the
Debtors' intellectual property;

       (i) Negotiating, drafting and administrating Debtors'
product sourcing and manufacturing agreements with respect to
the use of Debtors' intellectual property in connection with
making branded products (including taking steps to ensure
conformity with Trademark License Agreements);

       (j) Negotiating, drafting and administrating Debtors'
retailer purchasing agreements, including product replenishment
and trademark use issues, also to ensure protection of Debtors'
intellectual property and conformity with Trademark License
Agreements;

       (k) Negotiating, drafting and administrating Debtors'
computer software agreements (including copyright and use
provisions);

       (l) Acting as a liaison between the Debtors' computer
software agreements (including copyright and use provisions);

       (m) Insuring compliance by licensors with the terms of the
Debtors' license agreements, including the timely rendering of
narrative reports, and royalty payments, and discharge of
enforcement obligations;

       (n) Investigating and authenticating counterfeit and
infringing products on behalf of the Debtors, including the
discharge of such enforcement obligations under Trademark
License Agreements;

       (o) Enforcing Debtors' intellectual property rights
including, but not limited to, administering watching and
investigative services relating to trademarks, copyrights and
patents;

       (p) Working with Debtors' licensors and authorized
distributors in joint enforcement of Debtors' intellectual
property rights throughout the world and coordinating foreign
counsel's activities;

       (q) Reviewing Debtors' and licensor's compliance with
applicable labeling laws;

       (r) Preparing, monitoring, updating and administering
Debtors' inter-company intellectual property and royalty
agreements;

       (s) Recording Debtors' foreign agreements and maintaining
foreign properties including patents, copyrights and trademarks,
and coordinating with third parties on such recordation;

       (t) Prosecuting intellectual property rights, and
litigating opposition, cancellation and related proceedings on
behalf of the Debtors' in the United States Patent and Trademark
Office and administering and directing corresponding proceedings
throughout the world;

       (u) Providing intellectual property expertise in
connection with pending litigation and arbitration claims;

       (v) Registering, maintaining and enforcing rights to
Debtors' domain name registrations;

       (w) Registering, maintaining, enforcing and protecting
Debtors' intellectual property rights in new top level domains;

       (x) Working with Debtors' outside auditors and other
counsel relating to interpretation and application of agreement
provisions relating to the use of intellectual property rights
including, but not limited to, trademark license agreements and
other matters relating to Debtors' owned and licensed
intellectual property;

       (y) Maintaining a database and docketing system for
intellectual property owned and licensed by Debtors and
providing docket reminders to Debtors; and

       (z) Providing other advice and services relating to the
Debtors' intellectual property as they may request from time to
time.

Subject to the Court's approval, Rosenman will charge the
Debtors for its legal services on an hourly basis.  Their
current rates range from:

       Partners           - $350 to $550
       Counsel            - $340 to $550
       Associates         - $180 to $400
       Special Counsel    - $305 to $450
       Para-professionals - $85 to $230

Rosenman will also seek reimbursement for all costs and expenses
incurred, including telephone and telecopier toll and other
charges, mail and express mail charges, special or hand delivery
charges, document processing, photocopying charges, travel
expenses, expenses for "working meals", computerized research,
and transcription costs, as well as non-ordinary overhead
expenses such as secretarial overtime.

Mr. Silverstein informs the Court that they already gave
Rosenman a total of $315,000 in retainers for representing them
in various pre-petition intellectual property matters.  Rosenman
began services on April 30, 2001, which was the day Ms. Ash
joined Rosenman.  Ms. Ash was named partner of the firm the next
day. Ms. Ash was previously connected with the firm, Amster
Rothstein & Ebenstein.

Of the $315,000, a portion is set aside to pay outstanding
balances, any remaining pre-petition fees and expenses that will
later be identified.  Mr. Silverstein estimates that the
remaining balance will be approximately $139,661.04 as of the
Petition Date.  This will now serve as Rosenman's retainer for
future services, disbursements and charges incurred relevant to
the Debtors' cases, Mr. Silverstein explains.

Rosenman intends to apply to the Court for allowance of
compensation for professional services rendered and
reimbursement of charges and costs and expenses incurred in
these chapter 11 cases.

Ms. Ash, who is chairperson of the Intellectual Property
Practice Group at Rosenman, assures the Court that Rosenman does
not represent any adverse interest against the Debtors.

Rosenman has represented, currently represents, and may in the
future represent, parties-in-interest of the Debtors' case.
But, Ms. Ash emphasizes, only in matters unrelated to the
Debtors' bankruptcy cases.

Due to the size of the Rosenman firm, Ms. Ash admits, it is
possible that other connections may exist among Rosenman and the
Debtors and/or their creditors.  If they will discover other
material connections later on, Ms. Ash promises to supplement
the disclosure in her affidavit.

                      *     *     *

On an interim basis, Judge Arthur Gonzales granted the Debtors'
application at the First Day Hearing.  Objections must be filed
on or before July 5, 2001.  This interim order shall remain in
effect until the entry of a final order. (Warnaco Bankruptcy
News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


WEINER'S STORES: Court Grants More Time To Consider Leases
----------------------------------------------------------
Weiner's Stores Inc., a clothing store chain operating under
chapter 11 bankruptcy protection, has been granted an extension
to decide whether to file a court motion to keep or reject its
leases, according to Dow Jones. The company, which filed for
bankruptcy in October, runs about 100 outlet stores in strip
malls in Texas, Louisiana, Mississippi and Alabama. Last month,
it announced plans to close its stores and liquidate its assets.
According to a recent court order, the U.S. Bankruptcy Court in
Wilmington, Del., has extended the time in which Weiner's Stores
may keep or reject its leases through Dec. 31 or the date a
reorganization plan takes effect, whichever is earlier. The
previous deadline was June 12. (ABI World, July 6, 2001)


WINSTAR: Seeks Court Nod For Stock Purchase Agreement With Datco
----------------------------------------------------------------
By motion, Winstar Communications, Inc. asks Judge Farnan to
approve the proposed Stock Purchase Agreement between Winstar
International and Datco Corporation in Argentina.

The Debtors want the Court to authorize the sale of:

      (a) 12,198 shares of the common stock of Winstar Argentina
          S. A.,

      (b) 11,999 shares of common stock of Comnet S. A.,

      (c) Rights of Winstar International as obligee under an
          inter-company loan recorded on the books of Winstar
          Argentina in the face amount of $23,198,491.92, free
          and clear of all liens, claims, encumbrances and
          interests.

A couple of years ago, the Debtors were in the process of
expanding their business operations in Latin America. To speed
it up, Winstar International acquired 95% of the outstanding
shares of an Argentine company named Macrocom, S.A., which was
later renamed Winstar Argentina S.A. The following year, Winstar
International acquired 100% of the outstanding shares of an
Argentine Internet Service Provider named Comnet S.A. Both
Winstar Argentina and Comnet provide a range of wireless and
other services, including dial-up Internet service, domain name
registration and web hosting.

At present, Winstar Argentina and Comnet are heavily relying on
capital contributions in the form of equity and inter-company
loans from Winstar International.

Edwin J. Harron, Esq., at Young Conaway Stargatt & Taylor, in
Wilmington, Delaware, notes, that the Debtors determined that
they couldn't continue to provide the funding when they are in
dire financial straits themselves. The Debtors have been seeking
a potential buyer for Winstar Argentina and Comnet, and found
Datco Corporation.

Datco offered to purchase the shares and the inter-company debt
for $600,000 plus assumption of outstanding accounts payable up
to $1,500,000.

The Debtors believe that the sale price:

      (i) Is fair and reasonable,

     (ii) Reflects an appropriate current valuation of Winstar
International's shares and inter-company debt under highly
distressed circumstances,

    (iii) Will avoid further deterioration of the value of
Winstar Argentina and Comnet,

     (iv) Will maximize value for the benefit of the Debtors'
estates, and

      (v) Will avoid the requirement that Winstar International
pay substantial liquidation costs in order to protect the
directors of those entities personal exposure.

Kathleen R. Flaherty, president and chief operating officer of
Winstar International, discloses the salient terms of the Stock
Purchase Agreement:

      Seller: Winstar International Inc.

      Purchaser: Datco S.A.

      Shares to be Sold: 12,198 shares in Winstar Argentina S.A.
and 11,999 shares in Comnet S.A.

      Purchase Price: $50,000

      Inter-company debt: All rights of Winstar International
arising from an intercompany loan, which is recorded on the
books of Winstar Argentina as long term liabilities in the
amount of $23,198,491.92.

      Purchase Price: $550,000

      Governing law: Argentina

Ms. Flaherty says Datco and Winstar initially agreed that
payments to the Debtors on account of the sale of the shares and
the inter-company debt would be made in 3 installments of
$200,000 each. The first payment will be made on the closing
date; the second will be made 6 months after; and the last will
be made 12 months after the closing date. The money will be sent
by wire transfer of immediately available funds to an account to
be designated in writing by Winstar International, Ms. Flaherty
adds, or by such other method of payment as may be agreed upon
between the parties.

Mr. Harron explains that the proceeds of the sale will be
remitted to the Post-Petition Collateral Agent and applied to
reduce post-petition debt. It will depend on the terms of the
final order and the post- petition credit agreement whether the
Debtors will be able to access such cash.

Ms. Flaherty assures Judge Farnan that the shares were marketed
by skilled in-house Winstar professionals who are experienced in
the purchase and sale of operating subsidiaries and familiar
with the business culture in Argentina.  (Winstar Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


YOUTHVILLE: Pays Debt After Bankruptcy Filing
---------------------------------------------
United Methodist Youthville, one of Kansas's major providers of
foster-care services, has paid off much of its debt and has
devised a plan to pay its remaining creditors, according to the
Associated Press. Youthville, which filed for chapter 11
bankruptcy protection June 22, paid about $1.2 million of its
$1.6 million debt last Friday, Jane Alleva, the agency's senior
vice president of community resources, said on Monday. The
payments brought Youthville up to date on money owed to agencies
throughout Kansas, and a plan is in place for paying
Youthville's other creditors-Larned State Hospital and a mental
health agency in the Kansas City area, Alleva said. (ABI World,
July 6, 2001)

                            *********

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

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Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
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For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.

                           *********

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

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

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

This material is copyrighted and any commercial use, resale or
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