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

            Tuesday, July 17, 2001, Vol. 5, No. 138

                           Headlines

360NETWORKS: Hires Cahill Gordon As Special Securities Counsel
5B TECHNOLOGIES: Shares Subject To Nasdaq Delisting
ALLIED HOLDINGS: Falls Short Of NYSE's Listing Standard
ALLIED HOLDINGS: Hires Jay Alix as Turnaround Consultant
AMERICAN BIOGENETICS: Nasdaq Moves To Delist Shares

AMERICAN ECO: Toronto Stock Exchange Suspends Trading of Shares
AMF BOWLING: Obtains Nod To Maintain Existing Bank Accounts
ASHFORD.COM: Asks For Review Of Nasdaq Delisting Determination
ASHLAND REGIONAL: Selling Medical Center In NE Pennsylvania
BABCOCK & WILCOX: Hearing On Solvency Issue Set For October 22

BORDEN CHEMICALS: Wins Final Court Nod On $100 Million DIP Loan
CALPYTE BIOMEDICAL: Nasdaq Delists Shares
COMPOSITECH LTD.: Files Chapter 11 Petition in E.D. New York
COMPOSITECH LTD.: Chapter 11 Case Summary
CYPRESS COMMUNICATIONS: Appeals Nasdaq's Delisting Determination

DANKA BUSINESS: Sells Texas Facility to Sage Land For $7 Million
DATA RACE: Shares Knocked Off Nasdaq
ELCOTEL INC.: Posts $43.6 Million Net Loss For Fiscal Year 2001
ENVIROSOURCE INC.: Stockholders Adopt Merger Agreement
FORTRESS GROUP: Securities Subject To Nasdaq Delisting

FRUIT OF THE LOOM: Launches New Branding Campaign
FRIEDE GOLDMAN: AmClyde Unit Inks New Equipment Contracts
GENESIS HEALTH: Plan Confirmation Hearing Set For August 28
GLOBAL TELESYSTEMS: Bondholders Approve UK Scheme of Arrangement
HARNISCHFEGER: Rejecting Management Agreement With Beloit

INACOM CORP.: Exclusive Period To File Plan Extended To Oct. 1
LAIDLAW INC.: Has Authority to Pay Prepetition Trade Claims
LERNOUT & HAUSPIE: Dictaphone Panel Moves To Clarify DIP Order
LOEWEN: Classes & Treatment Of Claims Under the 3rd Amended Plan
LTV CORPORATION: Rejecting HQ Leases With ZML & National City

MARINER POST-ACUTE: Wants To Reject Ravinia I Office Sublease
MUSICMAKER.COM: Shares Face NASDAQ Delisting
PACIFIC GAS: Wants To Assume Nuclear Insurance Policies
PEOPLEPC: Appeals Nasdaq's Move To Delist Shares
PHOTOWORKS, INC.: Receives Nasdaq Delisting Notification

PILLOWTEX CORPORATION: Settles In Part GECC's $130,068 Claim
PLIANT SYSTEMS: Releases Second Quarter Financial Results
PSINET: Court Okays Employment Of Ordinary Course Professionals
ROWE COMPANIES: Posts Weak Second Quarter 2001 Results
SAFETY-KLEEN: Rejecting Baker, Xerox, DJJ And Other Leases

SERVICE MERCAHNDISE: Amends Lease On Store #168 In Miami, FL
SPORTS AUTHORITY: S&P Affirms B And CCC+ Ratings
STELLEX TECHNOLOGIES: Creditors To Own 95% Stake Of New Company
US AIRWAYS: Low-B Ratings Remain On Credit Watch
USG CORPORATION: Honoring Prepetition Warehouse Charges

VERADO HOLDINGS: Falls Short Of Nasdaq's Listing Requirement
WARNACO: US Trustee Appoints Unsecured Creditors' Committee
WASHINGTON GROUP: G.M. Stricklin Now Heads Infrastructure Unit
WEBVAN GROUP: Files Chapter 11 Petition in Wilmington
WINSTAR: Landlords Object To Extension Of Lease Decision Period

ZEROPLUS.COM: Reports Fourth Quarter And Year-End Losses

                           *********

360NETWORKS: Hires Cahill Gordon As Special Securities Counsel
--------------------------------------------------------------
360networks inc. and its debtor-affiliates sought and obtained
an order authorizing them to employ the firm of Cahill Gordon &
Reindel as special securities counsel.

Vanessa A. Wittman, the Debtors' Chief Financial Officer,
relates that even before the filing of these chapter 11 cases,
Cahill Gordon has served as outside securities counsel to the
Debtors. As special counsel, Ms. Wittman says, they expect
Cahill Gordon to continue extending services to the Debtors in
connection with federal and state securities law matters and
other matters that are not vital to the Debtors' reorganization.
According to Ms. Wittman, Cahill Gordon will work closely with
general bankruptcy counsel to avoid duplication of services.
Ms. Wittman clarifies that Cahill Gordon will not be rendering
services typically performed by a debtors' bankruptcy counsel.

Ms. Wittman explains they selected Cahill Gordon because its
attorneys have extensive experience and knowledge in the field
of securities law, and Cahill Gordon understands the Debtors'
complex array of assets, liabilities and businesses, its
contractual relationships, and its cost and profit structure.

Roger Andrus, Esq., a member of the firm of Cahill Gordon &
Reindel, assures Judge Gropper that the Firm does not represent
any interest adverse to the Debtors' estates with respect to the
matters on which they are to be retained.

According to Mr. Andrus, Cahill Gordon will charge the Debtors
with its minimum hourly rates that are in effect at the time
professional services are performed.  Cahill Gordon's minimum
hourly rates range from:

            Partners             $524 to $576
            Associates           $276 to $564
            Legal assistants     $116 to $204

Mr. Andrus adds that Cahill Gordon will also charge reimbursable
expenses incurred, including photocopying charges, long distance
telephone calls, facsimile transmissions, messengers, courier
mail, computer and data bank time and electronic research time,
word processing, secretarial and temporary employees, overtime
meals, overtime and late night transportation, travel, lodging,
food charges for business meetings, postage, printing,
transcripts, filing fees, document retrieval, etc.

Mr. Andrus discloses to the Court that:

       (a) Cahill Gordon, its members, counsel, senior counsel,
senior attorneys and associates:

            (i) may have appeared in the past, and may appear in
the future, in other cases unrelated to these cases where the
Debtors' creditors or other parties-in-interest may be involved;

            (ii) may represent, and have represented, certain of
the Debtors' creditors or other parties-in-interest in other
matters unrelated to these cases; and

            (iii) may have had other dealings with creditors or
other parties-in-interest of the Debtors that are unrelated to
these cases.

       (b) Prior to the filing of these cases, Cahill Gordon has
represented the Debtors with respect to general corporate and
securities law and other matters.  Debtors owe Cahill Gordon a
balance of $6,909.79 for Cahill Gordon's professional services
rendered to the Debtors.

       (c) all past appearances and other representation on
behalf of the Debtors' significant creditors or other parties-
in-interest, as identified in schedules received from WF&G, were
on behalf of those entities listed on the annex to this
affidavit and, except as disclosed on the annex, were with
respect to matters unrelated to these cases.  In addition,
certain of the Debtors' creditors or other parties-in-interest
may have participated in lender groups, which were represented
by Cahill Gordon.

       (d) Lawyers who are members of or are associated with
Cahill Gordon own an aggregate of 5,665 subordinate voting
shares of 360networks Inc.

Mr. Andrus believes none of these "connections" give rise to an
interest adverse to the Debtors or the estates with respect to
the matters on which Cahill Gordon is to be employed, nor is
likely to do so in the future. (360 Bankruptcy News, Issue No.
3; Bankruptcy Creditors' Service, Inc., 609/392-0900)


5B TECHNOLOGIES: Shares Subject To Nasdaq Delisting
---------------------------------------------------
On July 6, 2001, 5B Technologies Corporation received a
correspondence from the Nasdaq Stock Market in connection with a
determination by Nasdaq that the Company did not meet the net
tangible assets and proposed shareholders equity maintenance
criteria for continued listing as set forth in Marketplace Rule
4310(c)(2)(B) and the proposed amendment to Marketplace Rule
4310(c)(2)(B)(i), respectively. Although Nasdaq has determined
to delist the Company's securities on July 16, 2001, the Company
has requested a hearing before the Nasdaq Listing Qualifications
Panel to appeal the delisting determination, which will stay
such delisting pending the outcome of the hearing. The Company
has been notified that the hearing date has been scheduled for
August 23, 2001. The Company believes that upon consummation of
the proposed merger with Celexx Corporation, it will be in
compliance with all Nasdaq listing maintenance criteria.
However, there can be no assurance that the Company will be able
to convince the hearing panel that it will be able to maintain
compliance with such maintenance criteria in the future. There
can be no assurance that the Nasdaq hearing panel will render
a favorable decision.

               About 5B Technologies Corporation

5B Technologies Corporation is a comprehensive business
solutions provider, offering customers a wide range of
integrated services, including customized design and development
of Internet infrastructure and commerce solutions, information
technology consulting, local area network and web site security,
systems integration and staffing services.


ALLIED HOLDINGS: Falls Short Of NYSE's Listing Standard
-------------------------------------------------------
Allied Holdings, Inc. (NYSE: AHI) has been advised by the New
York Stock Exchange (NYSE) that the Company currently falls
below the continued listing standard requiring total
stockholders' equity of not less than $50 million and total
market capitalization of not less than $50 million.

Allied's stockholders' equity was $59.1 million at December 31,
2000. However, the loss posted in the first quarter of 2001
reduced stockholders' equity to $36.7 million, $13.3 million
below the Continued Listing Standard. This was the first time
the Company's total stockholders' equity fell below the
Continued Listing Standard since the Company became listed on
the NYSE.

As required by the NYSE, Allied has submitted a detailed plan to
the Listings and Compliance Committee of the NYSE demonstrating
how the Company plans to be in compliance with the Continued
Listing Standard on or before November 29, 2002, the deadline
set by the NYSE. Based on internal estimates, and execution of
planned corporate transactions, Allied believes it will satisfy
the Continued Listing Standard by the NYSE deadline.

The plan submitted to the NYSE contains a number of initiatives
already in process or to be implemented in order to improve
stockholders' equity. These include increasing net income by
eliminating non-contributory expenses, eliminating non-
performing assets, optimizing invested assets and raising rates
for services provided to each of its clients in its core vehicle
distribution operations. The Company will also focus on better
cash management and deleveraging its balance sheet.

After reviewing the plan, the Committee will either accept it
(following which Allied will be subject to quarterly monitoring
for compliance with the plan), or not (in which event the
Company will be subject to NYSE trading suspension and
delisting). Should the Company's shares cease being traded on
the NYSE, the Company believes that an alternative trading venue
will be available.

          Expected Results for Second Quarter 2001

The Company expects to report a net loss between $5.5 - 6.0
million for the second quarter of 2001. These results include an
after-tax gain of approximately $1.5 million on the disposition
of excess real estate and other assets in Canada, and additional
costs of approximately $1.0 million resulting from the debt
amendments entered into in the second quarter of 2001. In
addition, the Company repaid approximately $1.5 million of
long-term debt during the quarter.

These results are in line with previously provided expectations
issued by the Company of a net loss of $5 - 10 million in the
aggregate for the last three quarters of 2001 and reflective of
the challenges facing the automotive hauling industry today.
Other results will be reported in the second quarter earnings
release on July 24, 2001.

Hugh E. Sawyer, Allied Holdings' president and chief executive
officer said, "We have initiated an aggressive process to
revitalize our Company. Expectations for performance and
accountability have been increased. Any expense that does not
generate a profit or return on investment will be eliminated.
The Company is examining all assets to determine whether any are
surplus or non-income producing. The Company is also performing
a thorough diagnostic of its operations to identify appropriate
strategic alternatives to improve cash management, deleverage
its balance sheet and refinance its bank debt."

Mr. Sawyer added, "Our clients require quality service, improved
transit times and a value-added relationship. We are reviewing
our operations to ensure that we meet or exceed their
expectations for performance. Moreover, we intend to optimize
our broad distribution network, redesign our rate structure and
increase our pricing in order to invest in the people,
technology and equipment required to better serve our clients.
We intend to maintain our role as the industry's leading
supplier of transportation services."


ALLIED HOLDINGS: Hires Jay Alix as Turnaround Consultant
--------------------------------------------------------
Allied Holdings, Inc. has hired Jay Alix and Associates as its
turnaround consultant. JA&A, based in Southfield, Michigan, is a
nationally recognized consulting firm assisting with turnaround
situations. JA&A will assist Allied with the design and
execution of a turnaround plan. JA&A will also assist the
Company with its debt refinancing.

"I am delighted to have the opportunity to once again work with
the professionals at Jay Alix, and I am confident they will make
a significant contribution to our renewal efforts," said
President & CEO Hugh E. Sawyer.

                 About Allied Holdings

Allied Holdings, Inc. is the parent company of several
subsidiaries engaged in providing logistics, distribution and
transportation services to the automotive industry. The services
of Allied's subsidiaries span the entire finished vehicle
distribution continuum, and include logistics, car-hauling,
intramodal transport, inspection, accessorization, and dealer
prep. Allied, through its subsidiaries, is the largest company
in North America specializing in the delivery of new and used
vehicles.


AMERICAN BIOGENETICS: Nasdaq Moves To Delist Shares
---------------------------------------------------
American Biogenetic Sciences, Inc., (Nasdaq: MABA) (ABS), a
developer of innovative diagnostic technologies and novel
therapeutics for cardiovascular and neurological diseases, has
received a Nasdaq Staff Determination letter dated July 11, 2001
indicating that its Class A Common Stock fails to comply with
Nasdaq's minimum bid price requirements for continued listing on
the Nasdaq SmallCap Market as set forth in Marketplace Rule
4310(c)(4) and that the Class A Common Stock is, therefore,
subject to delisting from the Nasdaq Smallcap Market.

ABS has requested an oral hearing before the Nasdaq Listing
Qualifications Panel to review the Staff Determination and to
request continued listing. The hearing request will defer the
delisting of the Class A Common Stock pending the Panel's
decision. However, there can be no assurance that the Panel will
grant ABS' request for continued listing. If the Class A Common
Stock is delisted from the Nasdaq SmallCap Market, it would
continue to trade on the NASD OTC Bulletin Board.

American Biogenetic Sciences, Inc., based in Copiague, N.Y.,
researches and develops diagnostic tests for cardio-pulmonary
conditions and infectious diseases, as well as for new
treatments for neurological disorders including epilepsy,
migraine, mania, Parkinson's disease and Alzheimer's disease.


AMERICAN ECO: Toronto Stock Exchange Suspends Trading of Shares
---------------------------------------------------------------
American Eco Corporation (TSE: "ECX") announced that its common
shares of have been suspended from trading by The Toronto Stock
Exchange (TSE) for failure to meet the TSE's continued listing
requirements.


AMF BOWLING: Obtains Nod To Maintain Existing Bank Accounts
-----------------------------------------------------------
Operating guidelines established by the United States Trustee
require AMF Bowling Worldwide, 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. AMF can't run its multi-
billion dollar business from three bank accounts, Stephen E.
Hare, the Debtors' Chief Financial Officer, tells Judge Tice.
Closing and reopening hundreds 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 Tice 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 Tice ruled. (AMF Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


ASHFORD.COM: Asks For Review Of Nasdaq Delisting Determination
--------------------------------------------------------------
Ashford.com (Nasdaq: ASFD), the leading e-commerce destination
for corporate and personal gifts and rewards, intends to request
a hearing to appeal for continued listing on the Nasdaq National
Market.

Ashford received a letter on July 10, 2001 from Nasdaq stating
that, pursuant to Nasdaq Marketplace Rules 4450(a)(5) and
4310(c)(8)(B), the company's common stock will be delisted
unless it requests a hearing by July 17, 2001. Ashford no longer
complies with the $1.00 minimum bid price requirement for
continued listing on Nasdaq. The hearing is expected to be held
within 45 days of the date of request. Until that time,
Ashford's common stock will continue to trade on the Nasdaq
National Market.

At the hearing, the company intends to request an extension for
time to raise its share price. If the appeal is denied, the
company's common stock will be delisted from the Nasdaq National
Market. In such event, Ashford's common stock will trade on the
OTC Bulletin Board's electronic quotation system, or another
quotation system or exchange on which shares of the company may
qualify. Ashford's shareholders will still be able to obtain
current trading information, including the last trade bid and
ask quotations and share volume.

                      About Ashford.com

Ashford.com is the leading e-commerce destination for personal
and corporate gifts and rewards. The company's two e-commerce
sites, WWW.ASHFORD.COM and WWW.ASHFORDCORPORATEGIFTS.COM , offer
25,000 attractive gifts and rewards, including watches, jewelry,
fragrances, leather accessories, diamonds, sunglasses, and
writing instruments from more than 400 leading brands. Dedicated
to creating an exceptional luxury shopping experience,
Ashford.com provides overnight shipping on nearly all items,
gift packaging, and a 30-day money-back guarantee on all items
sold on the retail site. It also offers the Ashford.com
Protection Plus(SM) policy, which provides outstanding product
warranties, customer privacy, and site security. Ashford.com is
headquartered in Houston, Texas.


ASHLAND REGIONAL: Selling Medical Center In NE Pennsylvania
-----------------------------------------------------------
The Ashland Regional Medical Center Board of Directors announced
that the medical center, a 126 bed acute care and skilled
nursing facility, located in Ashland, Pennsylvania, is to be
auctioned through a Chapter 11 Bankruptcy Court proceeding.

ARMC is a six-story facility erected in 1967, situated on a
sprawling 20+-acre campus, one mile south of Ashland. The
medical center is located in a rural setting of northern
Schuylkill County (northeastern Pennsylvania), approximately 50
miles (1 hour via I-81) North of Harrisburg and 100 miles (2
hours via NE Turnpike) Northeast of Philadelphia. It serves a
tri-county region (population 70,000+). It operates with a staff
of 339 full and part time employees and has 7 internists and
family practice physicians, as well as 40+ specialists on its
staff. ARMC began as a State Hospital for Injured Persons of the
Anthracite Region in 1883, serving only miners who were hurt
working in the coal fields of the area. Later it was converted
into a general hospital and remained a state facility until
1992, when it went private, controlled by a community board of
directors.

The Board and medical center filed for protection under Chapter
11 of the Bankruptcy Code in late March of this year. Ashland's
Counsel is Mr. Eric Brossman, Esq. of the firm of Duane, Morris
& Heckscher, LLP. He noted that to participate in the auction,
bids must exceed by $500,000, the $4.25 million price entered by
Province HealthCare in its signed Asset Purchase Agreement. Bids
are due by 5 PM, EDT, on Wednesday, August 8. Interested parties
are asked to contact Brossman, who has detailed information
regarding ARMC. He may be reached by writing to Eric Brossman,
Esq., Duane, Morris & Heckscher, LLP, P.O. Box 1003, 305 North
Front Street, 5th Floor, Harrisburg, PA 17108- 1003 or calling
Brossman at 717/237-5559.

Interested bidders may also contact Counsel for the Official
Creditor's Committee, Mr. J. Gregg Miller, Esq. Of the firm of
Pepper, Hamilton LLP. at 215/981-4085.


BABCOCK & WILCOX: Hearing On Solvency Issue Set For October 22
--------------------------------------------------------------
A bankruptcy court is scheduled to consider on Oct. 22 whether
Barberton, Ohio-based Babcock & Wilcox Co. was solvent around
the time it canceled a $313 million note receivable from its
parent, Babcock & Wilcox Investment, and transferred certain
stock, reported Dow Jones. The issue, originally scheduled to be
heard on Aug. 29, will help determine whether the transactions
may ultimately be voided at the request of some of the company's
creditors. In developments affecting how the matter will
proceed, a bankruptcy court in late June agreed with the company
that Louisiana law should be used to determine the solvency
issue, reported Dow Jones.

The court also agreed with the asbestos claimants' committee
that the company should be moved from plaintiff to defendant in
the proceeding, and upheld the committee's contention that they
were acting on behalf of the company's bankruptcy estate,
committee counsel Peter Van N. Lockwood of Caplin & Drysdale
told Dow Jones Newswires.  The committee, which is seeking to
void the 1998 transactions, has alleged the book value of the
transfers could be $600 million, and the fair market value could
be $800 million to $1 billion, Lockwood said.  Voiding the
transfers could increase the assets available to the claimants
and other creditors in the company's chapter 11 case. (ABI
World, July 13, 2001)


BORDEN CHEMICALS: Wins Final Court Nod On $100 Million DIP Loan
---------------------------------------------------------------
Borden Chemicals and Plastics Operating Limited Partnership
(BCP) has received final approval from the U.S. Bankruptcy Court
for the District of Delaware of a debtor-in-possession credit
facility (DIP facility) from a group of lenders led by Fleet
Capital Corporation.

The approved DIP facility will provide up to $100 million in
credit, including approximately $20 million of new availability.
The DIP facility is used for materials and services from
vendors, ongoing operations, including salaries and certain
benefits for the employees who manage and operate BCP, and other
working capital needs.

"We are pleased to have received final approval of the DIP
credit facility," said Mark J. Schneider, president and chief
executive officer, BCP Management, Inc., the general partner of
BCP. "The approved DIP facility incorporates beneficial
modifications to the terms initially proposed. These
modifications negotiated with the lenders will provide
management with greater flexibility in running the business as
we pursue the restructuring process. Gaining this approval is
evidence of the productive working relationship we have built
with the lender group and the Creditors' Committee."

As previously announced, on April 3, 2001, BCP and its
subsidiary, BCP Finance Corporation, filed voluntary petitions
for protection under Chapter 11 in the U.S. Bankruptcy Court for
the District of Delaware. BCP Management, Inc., general partner
of BCP, and Borden Chemicals and Plastics Limited Partnership,
BCP's sole limited partner, were not included in the filings.
(Two other separate and distinct entities, Borden, Inc., and its
subsidiary, Borden Chemical, Inc., are not related to the
filings.) The court previously entered an interim order granting
the company's request of a $100-million DIP credit facility,
including up to approximately $20 million of new availability.

"We are grateful for the support we are receiving from our banks
and other creditors, suppliers, and the employees who manage and
operate BCP," said Schneider. "Their support has enabled BCP to
continue business as usual and at the same time to pursue
strategic initiatives to strengthen and restructure the
business. We think it is particularly significant that the bank
group led by Fleet Capital Corporation, our primary lenders
since March 2000, has continued to finance us. Although the PVC
market remains difficult, we have strengthened BCP's business in
many ways since the beginning of the year." These include:

      * Securing of assurances from many of the company's vendors
for the continued supply of goods and services necessary for its
daily operations;

      * Continuing to meet customer requirements, including not
missing or delaying any product shipments;

      * Continuation of normal operations in all three of the
company's facilities;

      * Thorough communication with all stakeholders, including
the employees who manage and operate the company;

      * Reduction of debt under the DIP facility;

      * Reduction of operating costs, especially as a result of
decreases in the price of natural gas;

      * Continuation of actions for cutting costs, streamlining
operations and improving revenues; and

      * Advancement of efforts in connection with various
strategic alternatives, including, but not limited to, a
possible sale of assets.

Separately, the company reported that it has filed a motion with
the Court for an order extending the period during which it has
the exclusive right to file and advance a plan of reorganization
by six months, through February 1, 2002.

BCP produces PVC resins at its facilities in Geismar, La., also
the site of its headquarters and has additional PVC operations
in Addis, La., and Illiopolis, Ill.


CALPYTE BIOMEDICAL: Nasdaq Delists Shares
-----------------------------------------
Calypte Biomedical Corporation (OTC Bulletin Board: CALY) has
received a determination on its delisting hearing before Nasdaq
Listing Qualifications Panel.

Nasdaq has informed Calypte that the company's common stock will
no longer be listed on the Nasdaq SmallCap Market effective
Friday July 13, 2001. The Company's common stock will now trade
on the Over The Counter Bulletin Board under the same stock
symbol.

In early March the company received notice from Nasdaq that it
had failed to comply with certain requirements for continued
listing on the Nasdaq SmallCap Market and would be potentially
delisted, to which the company had responded with a request for
a hearing before the Nasdaq Listing Qualifications Panel. This
delisting was a result of the company's inability to meet the
net tangible assets and the minimum bid price requirements for
continued listing on the SmallCap Market.

Calypte Biomedical President, CEO, and CFO Nancy E. Katz stated,
"We would obviously have preferred to continue our listing on
the Nasdaq SmallCap Market and we stayed the delisting process
for as long as we could while we worked to address Nasdaq's
concerns. We are considering an appeal of the panel decision.
However, even such an appeal will not stay the immediate effect
of the panel's determination to delist our stock. We continue to
operate our core business while we remain committed to our
previously announced plans to actively seek a solution to our
financing need. As we previously announced, we are actively
searching for strategic opportunities, including investment in
the Company, a merger or other comparable transaction, or a
financial restructuring, to continue to sustain our operations."

Ms. Katz continued, "As we also previously announced, our second
quarter revenues are on track to exceed any previous quarter. We
plan to issue our quarterly earnings release following the close
of market on Thursday, July 19, 2001. Our customary conference
call with our investors will follow shortly thereafter."

Calypte Biomedical Corporation (OTC Bulletin Board: CALY),
headquartered in Alameda, California, is a public healthcare
company dedicated to the development and commercialization of
urine-based diagnostic products and services for Human
Immunodeficiency Virus Type 1 (HIV-1), sexually transmitted
diseases and other infectious diseases. Calypte's tests include
the screening EIA and supplemental Western Blot tests, the only
two FDA-approved HIV-1 antibody tests that can be used on urine
samples. The company believes that accurate, non-invasive,
urine-based testing methods for HIV and other infectious
diseases may make important contributions to public health by
helping to foster an environment in which testing may be done
safely, economically, and painlessly. Calypte markets its
products in over 40 countries worldwide through international
distributors and strategic partners.


COMPOSITECH LTD.: Files Chapter 11 Petition in E.D. New York
------------------------------------------------------------
Compositech Ltd. (CTEK), a developer of high tech laminates for
the printed circuit board industry, filed a voluntary Chapter 11
petition in the United States Bankruptcy Court for the Eastern
District of New York. The Company is continuing as a debtor in
possession with its prior management, pursuant to Section 1107
of Title 11 of the United States Code. The Company intends to
file a plan as provided by Chapter 11 of the United States
Bankruptcy Code as soon as practicable.

The Company ceased its manufacturing operations at the end of
1999 and since then has been engaged in a program to license its
technology. The negotiations with a potential licensee announced
in January 2001 are still continuing as well as discussions with
other potential licensees. The Company believes that progress
has slowed due to the downturn in the technology sector.

The pressure of debts incurred during its manufacturing
operations brought the Company to take this action. The Company
is working on a plan which it intends to file in the near
future.


COMPOSITECH LTD.: Chapter 11 Case Summary
-----------------------------------------
Debtor: Compositech Ltd.
         710 Koehler Avenue
         Ronkonkoma, NY 11779

Chapter 11 Petition Date: July 11, 2001

Court: Eastern District of New York (Central Islip)

Bankruptcy Case No.: 01-85428

Judge: Melanie L Cyganowski

Debtor's Counsel: Berkman Henoch Peterson & Peddy
                   100 Garden City Plaza-3rd Fl
                   Garden City, NY 11530-1901
                   516-222-6200


CYPRESS COMMUNICATIONS: Appeals Nasdaq's Delisting Determination
----------------------------------------------------------------
Cypress Communications, Inc. (Nasdaq: CYCO) said that the Nasdaq
Stock Market has notified the company that as of July 16, 2001
its securities will be subject to delisting, pending the outcome
of an appeal before a Nasdaq Listing Qualifications Panel.

On July 6, 2001, the company received a Nasdaq Staff
Determination that the company's failure to comply with the
minimum closing bid price requirement, as set forth in
Marketplace Rule 4450(a)(5), subjects the company's securities
to delisting from the Nasdaq National Market as of 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. The company's stock will
continue to be traded on the Nasdaq National Market pending the
Qualification Panel's final decision. The hearing date will be
determined by Nasdaq, and is expected to be held within the next
30 to 45 days.

While there can be no assurance that the Panel will grant
Cypress Communications' request for continued listing, the
company is taking proactive steps to regain compliance with the
minimum bid price requirement. On June 25, 2001, the company
announced plans to solicit proxies from its shareholders to
approve a reverse split of the company's issued and
outstanding common stock. Subject to shareholder approval at a
special meeting scheduled for August 17, 2001, the board will
select a reverse split ratio that it believes will result in the
greatest marketability of the company's shares.

The company believes that the Nasdaq Listing Qualifications
Panel will view its reverse split proposal favorably. If
following the reverse stock split the per share price of the
company's common stock exceeds $1.00 for ten consecutive trading
days, the company believes that Nasdaq may withdraw the
delisting action.

                 About Cypress Communications

Cypress Communications provides comprehensive broadband
solutions to businesses located in commercial office buildings
in major metropolitan markets throughout the United States. The
Company offers a fully integrated, customized communications
package that typically includes high-speed, fiber- optic
Internet connectivity, e-mail services, Web hosting services,
remote access connectivity, local and long distance voice
services with advanced calling features, feature rich digital
telephone systems and digital satellite business television.
Cypress Communications also wholesales components of its in-
building fiber-optic network infrastructure to other licensed
communications providers.


DANKA BUSINESS: Sells Texas Facility to Sage Land For $7 Million
----------------------------------------------------------------
Danka Business Systems PLC (Nasdaq:DANKY) has completed the sale
of its Austin, Texas facility, to Sage Land Company, Inc. for
the price of $7 Million. Danka will use the net proceeds of sale
to reduce the debt under its Tax Retention Operating Lease
(TROL) credit facility. Danka formerly used the property for its
Omnifax business, which it sold in 1999. The Company had been
leasing the property to Xerox Corporation.

In addition, the Company announced that it has entered into a
contract to sell its property in Lenexa, Kansas for the price of
$2.7 Million. This sale is expected to close on Tuesday, July
17, 2001. The Company will also use these proceeds to reduce
outstanding borrowings on the Company's TROL Credit Facility.

Danka Chief Executive Office, Lang Lowrey, commented: "We are
pleased to announce the sale of these properties. The Company
has taken non-strategic assets and used the proceeds to further
reduce its outstanding debt. We are in the process of looking
for other such opportunities as we continue to reduce debt and
improve the Company's balance sheet."


DATA RACE: Shares Knocked Off Nasdaq
------------------------------------
DATA RACE, Inc. d/b/a IP AXESS (OTC Bulletin Board: RACE), said
that its common stock had been formally delisted by The Nasdaq
National Market effective July 09, 2001 as a result of the
Company's failure to pay overdue annual and additional listing
fees and its inability to meet the minimum bid price
requirements for continued listing. Shares of the Company's
common stock are now traded on the over the counter bulletin
board under the ticker symbol "RACE".

                       About IP AXESS

DATA RACE, Inc., is currently doing business as IP AXESS. At the
annual meeting held on November 9, 2000, the shareholders
approved the formal change of the corporate name to IP AXESS,
Inc. Based in Plano, Tex., with an office in San Antonio, IP
AXESS (WWW.IPAXESS.COM) provides integrated, IP-based, remote-
work solutions over multiple access media. The company's
VocalWare product line provides out-of-the-office employees with
simultaneous access to the company phones, fax, Internet, and e-
mail over a single connection, whether it's xDSL, cable modem,
LAN, frame relay, ATM or high-speed dial-up through VPN, local
ISP POP, or PSTN. VocalWare's primary target markets are
telecommuters, who can establish a virtual office presence with
just one phone call, and call centers that use VocalWare to
connect part-time workers to incoming calls and corporate
databases simultaneously over a single line.


ELCOTEL INC.: Posts $43.6 Million Net Loss For Fiscal Year 2001
---------------------------------------------------------------
Elcotel, Inc. (OTC Pink Sheets: EWTLQ), a leading provider to
the public communications market, reported a net loss of $43.6
million, or $3.17 per diluted share, for its fiscal 2001 year
ended March 31, 2001 on net sales and revenues of $28.3 million,
compared to a net loss of $11.2 million, or $.83 per diluted
share, on net sales and revenues of $47.3 million for the year
ended March 31, 2000.

For the fourth quarter of fiscal 2001, the Company reported a
net loss $37.4 million, or $2.71 per diluted share, on net sales
and revenues of $6.1 million, compared to a net loss of $7.8
million, or $.57 per diluted share, on net sales and revenues of
$8.4 million for the fourth quarter of fiscal 2000.

                        Impairment Losses

On January 22, 2001, Elcotel, Inc. and its subsidiaries filed in
the United States Bankruptcy Court in the Middle District of
Florida voluntary petitions for relief under chapter 11 title 11
of the United States Bankruptcy Code (collectively the "Chapter
11 Proceedings"). Because of continued operating losses, the
Chapter 11 Proceedings and other factors, the Company performed
an evaluation of the recoverability of the assets of its
payphone and Internet appliance business segments, and concluded
that a significant impairment of the long-lived assets of such
business segments had occurred since the estimated future cash
flows of the businesses are not expected to be sufficient to
recover the carrying value of the assets. Accordingly, the
Company's results of operations for the quarter and year ended
March 31, 2001 reflect impairment losses aggregating $33.2
million related to the write-down of certain property and
substantially all of the Company's other long-lived assets,
including goodwill, identified intangible assets, capitalized
software and other assets related to both its payphone and
Internet appliance business segments. Furthermore, the Company's
results of operations for the quarter and year ended March 31,
2001 reflect, in addition to the impairment losses described in
the preceding sentence, provisions related to a reduction in the
net realizable value of inventories of the Company's Internet
appliance business of approximately $2.2 million.

Michael J. Boyle, Elcotel's President and Chief Executive
Officer said, "The continued erosion in revenues of the
Company's payphone business as a result of the ongoing
deterioration of industry revenues caused primarily by the
growth in wireless communications, prolonged market trials of
the Company's Grapevine terminals domestically, adverse economic
conditions affecting the Internet and electronic advertising
industries, the shortfall in expected advertising revenues from
advertisements placed on Grapevine terminals, uncertainties as
to the market acceptance of the Company's Grapevine terminals,
and lack of adequate liquidity or funding sources, as a result
of the Chapter 11 filings, that are needed by the Company to
continue to enhance and market the products of its Internet
appliance business were factors considered in the evaluation."

                       Restructuring Plan

Mr. Boyle went on to say that "The Company plans to maximize the
operating results of its payphone business by maintaining or
increasing its market share domestically, increasing its
international export business and implementing further
restructuring and cost reduction initiatives, if necessary.
Also, the Company is attempting to successfully conclude market
trials of its Grapevine terminal and e-Prism products in the
next several months." However, he cautioned that there could be
no assurance that the Company can accomplish any of these
matters. He also said, "The reorganization of the Company under
Chapter 11 is dependent upon its ability to obtain adequate
sales and revenues to achieve profitable operations and cash
flow and to restructure its debt obligations through the Chapter
11 process. We believe, but cannot assure, that the Company has
the ability to achieve profitable operations and positive cash
flow from its payphone business, and that the market acceptance
of its Grapevine and e-Prism products is not critical to the
Company's reorganization. The Company is developing its Plan of
Reorganization based on the anticipated operations of its
payphone business." Mr. Boyle continued by stating, "If the
Company is unable to successfully conclude the ongoing market
trial of its Grapevine and e-Prism products in the next several
months, the Company plans to restructure its operations to
curtail investments in its Internet appliance business to
facilitate the attainment of profitable operations. However, in
such an event, the future growth prospects of the Company would
be materially adversely affected. In addition, if payphone
industry revenues and the Company's sales and revenues continue
to contract at rates experienced over the last two fiscal years,
the Company's ability to achieve profitable operations and
reorganize under Chapter 11 would be materially adversely
affected."

Elcotel, Inc., based in Sarasota, Florida, is a leader in
providing public access telecommunications networks and
management services for both domestic and international wireline
and wireless communication networks. Visit Elcotel's corporate
website at WWW.ELCOTEL.COM.


ENVIROSOURCE INC.: Stockholders Adopt Merger Agreement
------------------------------------------------------
Envirosource, Inc. (OTCBB:ENSO) stockholders had voted to
approve the Agreement and Plan of Merger between a company
formed by affiliates of GSC Partners and the Company.

The merger is part of a restructuring of the Company's
indebtedness and is conditioned on, among other things, the
satisfaction or waiver of all of the conditions to the Company's
exchange offer for its $270 million of 9 3/4% Senior Notes due
2003. The Company expects to cause the merger to become
effective as soon as the conditions to the merger and the
exchange offer have been satisfied.

The Company also announced it has extended the expiration date
of its exchange offer. The exchange offer, which commenced on
June 11, 2001 and was previously set to expire on July 12, 2001,
at 5:00 p.m., New York City time, expired on July 16, 2001 at
5:00 p.m., New York City time. Withdrawal rights have expired,
and persons who tender their Senior Notes in the exchange offer
may not withdraw such Senior Notes during the offer.

As of the close of business on July 12, 2001, approximately $225
million in outstanding principal amount of the Senior Notes, or
approximately 83% of the total outstanding principal amount, had
been tendered pursuant to the exchange offer. The exchange offer
is conditioned, among other things, upon the tender of at least
98% of the outstanding Senior Notes.

Requests for copies of the exchange offer materials should be
directed to MacKenzie Partners, Inc., the information agent for
the exchange offer, at (800) 322-2885.

The Company's principal operation is International Mill Service,
Inc., which provides slag processing, metal recovery, materials
handling, scrap management and a wide range of specialty
services, such as surface conditioning (scarfing) of steel
slabs, to the North American steel industry. In addition, the
Company's Envirosource Technologies, Inc. operations provide
waste treatment, stabilization and disposal services, primarily
to the steel industry.


FORTRESS GROUP: Securities Subject To Nasdaq Delisting
------------------------------------------------------
The Fortress Group, Inc., (Nasdaq: FRTG), a nationally
diversified homebuilder, received a Nasdaq Staff determination
notification dated July 6, 2001, indicating that the Company
fails to comply with the Market Value of Public Float
requirement for continued listing set forth in Marketplace
Rule 4450(a)(2), and that its securities, therefore, will be
delisted from the Nasdaq National Market on July 16, 2001,
unless the Company appeals the determination.

On July 12, 2001, the Company sent Nasdaq a notice of appeal and
requested a hearing before a Nasdaq Listing Qualifications Panel
to review the Staff determination. The Company's appeal
automatically stays the delisting of its securities pending the
Panel's review of the Staff determination, which should occur
within 45 days. There can be no assurance that the Panel will
grant the Company's request for continued listing. If the appeal
is not successful, the Company's securities will be delisted
from the Nasdaq National Market. In addition to the appeal
before the Nasdaq Listing Qualifications Panel, the Company will
apply for inclusion in the Nasdaq SmallCap Market.

The Fortress Group has made significant progress recently in its
previously announced plan to restructure both its operations and
its balance sheet, with the goal of maximizing profitability
while reducing the overall risk and debt profile of the Company.
The plan includes a program to focus the Company's resources
within certain core markets and to divest assets and operations
that are not consistent with that plan, or which do not meet
certain performance criteria.

In accordance with the announced plan, the Company has
restructured its operations into three core regions and sold its
operations in Milwaukee, Wis., (February 2001), in Jacksonville,
Fla., (May 2001), and just announced the completion of the sale
of its St. Louis, Mo., operations (July 2001). The Company also
purchased $45.8 million of its 13.75% Senior Notes due May
2003 for approximately $25 million in cash. These actions have
reduced the Company's debt by approximately $95.1 million (32%)
and total liabilities by $109.0 million (30%) as compared to
levels reported at March 31, 2001. Further, the Company has
reduced its leverage (the ratio of total liabilities to tangible
net worth) from a ratio of 7.5-to-1 to a ratio of 3.7-to-1 and
increased its EBITDA coverage by over 24%. The Company expects
the reduction in the number of operating divisions and the new,
more concentrated operating structure to offer additional
opportunities for overhead reduction and for potential expansion
in the core markets in which the Company will continue to focus
its resources.

                       About the Company

The Fortress Group is a nationally diversified homebuilder,
building single-family homes for first-time, move-up and luxury
homebuyers in many of the nation's major regional housing
markets. The Company's homes are marketed under the names of its
operating subsidiaries: The Genesee Company (Colorado and
Arizona), Sunstar Homes (North Carolina), Christopher Homes
(Nevada), Wilshire Homes (Texas), Don Galloway Homes (North
Carolina and South Carolina), Iacobucci Homes (Pennsylvania and
New Jersey), and Quail Homes (Oregon and Washington).

Fortress Mortgage, Inc., a wholly owned subsidiary of The
Fortress Group, Inc., provides permanent loan financing to
purchasers of The Fortress Group's homes through a variety of
conventional and government backed financing programs. These
mortgage programs are available through branch offices located
in the regional markets served by The Fortress Group's
homebuilding subsidiaries.


FRUIT OF THE LOOM: Launches New Branding Campaign
-------------------------------------------------
Fruit of the Loom, Ltd. (OTC Bulletin Board: FTLAQ), one of the
world's leading manufacturers and marketers of basic family
apparel, launched a new national branding campaign on July 16.
Aimed at hardworking, down-to-earth, family-oriented consumers,
the campaign presents Fruit of the Loom as America's brand of
choice for ladies', men's and children's apparel. The three TV
spots will air on national network, cable and syndicated
programming and present consumers in Fruit of the Loom apparel,
rehearsing in front of their mirrors for important life moments.
The campaign unveils a new theme line, "Good Days Start with
Fruit of the Loom," and seeks to convey the brand's inherent
honesty and dependability in combination with newer, more
contemporary styles.

Best known for the long running "Fruit Guys" campaign,
"Rehearsals" is a definite diversion from the past. The campaign
is the first created for Fruit of the Loom by The Richards
Group, which took over the advertising and public relations
duties last fall. The Richards Group and Fruit of the Loom
spent several months completing the agency's proprietary
branding process called Spherical(R) branding. The brand
strategy that arose is evident in the new campaign, which
underscores Fruit's role in people's everyday lives.

"Customers tell us they trust Fruit of the Loom. We've spent
more than 100 years building that legacy," said John Wigodsky,
executive vice president of retail and activewear for Fruit of
the Loom. "This campaign captures the essence of our brand --
that Fruit of the Loom is always there for you -- in a
contemporary way."

"Smile," one of three produced 30-second TV spots, features kids
in their Fruit of the Loom underwear, practicing their school
picture smiles in front of the mirror. The implication is, of
course, that Fruit of the Loom is with you on the big days (and
the not so big days) of your life. "I do" and "I'm pregnant,"
carry the same theme and highlight Fruit's array of men's and
women's apparel.

"For an agency charged with relaunching Fruit of the Loom, the
easy thing may have been to dust off the Fruit suits and roll
film," said Diane Fannon, principal for The Richards Group. "But
we found that consumers had a hard time associating the Fruit
Guys with all the new products introduced over the past few
years. We had to position Fruit of the Loom as more contemporary
than perhaps the Fruit Guys allow."

The Rehearsals campaign is scheduled to coincide with back to
school shopping and run through the first week of September.

Fruit of the Loom is a leading international, vertically
integrated basic apparel company, emphasizing branded products
for consumers of all ages. The Company is one of the world's
largest manufacturers and marketers of men's and boys'
underwear, women's and girls' underwear, printable T-shirts and
fleece for the Activewear industry, Casualwear and
Childrenswear. Fruit of the Loom employs approximately 25,000
people in more than 60 locations worldwide. The Company sells
its products principally under the FRUIT OF THE LOOM(R) and
BVD(R) brands. For more information about the Company and its
products, visit http://www.fruit.com

The Richards Group, located in Dallas, is the largest
independent branding agency in the nation. In addition to Fruit
of the Loom, agency clients include the standard-setting brands
of Bennigan's Irish American Grill & Tavern, Chick-fil-A, The
Home Depot, Motel 6, Nokia and Travelocity.com. The Richards
Group can be found at http://www.richards.com


FRIEDE GOLDMAN: AmClyde Unit Inks New Equipment Contracts
---------------------------------------------------------
FGH Engineered Products Group, the equipment segment of Friede
Goldman Halter, Inc. (OTCBB: FGHLQ), announced that its AmClyde
unit has signed new contracts in excess of $13.5 million with
customers in Freeport, Texas and Abu Dhabi, U.A.E.

"AmClyde is very pleased to receive these key orders from our
long-standing customer NPCC (National Petroleum Construction
Company) of Abu Dhabi in the United Arab Emirates and our new
customer Cabett Subsea Products, Inc. of Houston, Texas," said
Dick Juelich, AmClyde President.

AmClyde has a contract with NPCC to provide a significant
operating increase of the lifting capacity and reach for their
2000-ton model 76 marine crane, originally built in 1973. The
uprate design and manufacturing work will include new hoists, A-
frame assembly and main hook block for the crane, as well as
components to enable future additional capacity increases. The
uprate will be completed in April of 2002.

"AmClyde has a long-standing reputation as the pre-eminent
designer/builder of large specialty cranes, mooring systems and
related equipment. Our recent order for upgrading NPCC's crane
is a further testament to the versatility of our designs and our
ability to upgrade existing machinery," said Dick Juelich.

AmClyde-Norson Engineering, the Glasgow, Scotland segment of
AmClyde, received a contract to design and build umbilical
handling equipment at the new Cabett Subsea Products, Inc.
(Cabett Services and WW Products International) production
facility at Port Freeport, Texas. This equipment includes three
1,000-ton capacity carousels, loading towers, tensioners and
related machinery. The addition of AmClyde-Norson Engineering
further complements the existing product lines of AmClyde.

Anil Raj, Chief Operating Officer of Friede Goldman Halter,
Amclyde's parent company commented, "The announcement of these
contracts for AmClyde reaffirm s the confidence of our customers
in all of Friede Goldman Halter's companies. Engineered
Products, Rig and Vessel divisions have all received significant
new contracts since we filed a petition for reorganization.
These awards and the continued support of our customers will
assist us in emerging as a stronger and more capable company."

Friede Goldman Halter designs and manufactures equipment for the
maritime and offshore energy industries. Its operating units are
Friede Goldman Offshore (construction, upgrade and repair of
drilling units, mobile production units and offshore
construction equipment), Halter Marine (construction of ocean-
going vessels for commercial and governmental markets), FGH
Engineered Products Group (design and manufacture of cranes,
winches, mooring systems and marine deck equipment), and Friede
& Goldman Ltd. (naval architecture and marine engineering).


GENESIS HEALTH: Plan Confirmation Hearing Set For August 28
-----------------------------------------------------------
The Confirmation Hearing of Genesis Health Ventures, Inc. & The
Multicare Companies, Inc.'s Joint Chapter 11 Plan is set for
August 28, 2001 at 9:30 a.m., Eastern Time, before the Honorable
Judith H. Wizmur, United States Bankruptcy Court for the
District of New Jersey. The confirmation hearing may be
adjourned from time to time by the Debtors or the Bankruptcy
Court without further notice except for an announcement of the
adjourned date made at the confirmation hearing or any
subsequent adjourned confirmation hearing. (Genesis/Multicare
Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


GLOBAL TELESYSTEMS: Bondholders Approve UK Scheme of Arrangement
----------------------------------------------------------------
Global TeleSystems, Inc. (OTC: GTLS; NASDAQ EUROPE: GTSG;
Frankfurt: GTS) said that the holders of publicly-traded notes
issued by its Global TeleSystems (Europe) Ltd. subsidiary,
formerly known as Esprit Telecom Group plc, have approved Esprit
Telecom's Scheme of Arrangement under Part XIII of the UK
Companies Act of 1985 to restructure the
terms of their notes. One-hundred percent of bondholder votes
cast were in favour of the scheme. Final approval of the scheme
by the High Court of England and Wales is expected in the coming
weeks.

Pursuant to this restructuring, the basic terms of which were
announced on 28 March 2001, the company's obligation to repay
approximately $500 million of the debt represented by the notes
will be exchanged for the holders' receiving a 90% ownership
interest in a new company that will own Esprit Telecom as well
as the other GTS subsidiaries providing principally voice
services to businesses in Western Europe. GTS will own through a
subsidiary the remaining 10% of the equity in the new company,
and will hold warrants to acquire an additional 10% of the new
company.

The restructure of the Esprit Telecom bonds is consistent with
GTS's overall programme to recapitalise its balance sheet by
eliminating or reducing its publicly-held debt obligations and
preferred stock. Consistent with these plans, GTS also announced
that its Global TeleSystems Europe B.V. subsidiary has elected
not to make the cash interest payments due on 15 July 2001 on
its 10.375% Senior Notes due 2009 and its 10.375% Senior Notes
due 2006. The company is currently engaged in restructuring
negotiations with representatives of the holders of these notes.
The non-payment of cash interest on these bonds will not
constitute an event of default under the applicable indentures
unless interest is not paid by August 14, 2001, and Deutsche
Bank, Dresdner Bank and Bank of America, which are providing
financing to GTS' Global TeleSystems Europe Holdings B.V.
subsidiary, have agreed to waive until July 31, 2001 any
defaults under that subsidiary's credit facility caused by the
failure to make these July 15 interest payments.


HARNISCHFEGER: Rejecting Management Agreement With Beloit
---------------------------------------------------------
Beloit Corporation and Harnischfeger Industries, Inc. seek the
Court's authority, pursuant to section 365(a) of the Bankruptcy
Code, to reject the Management Agreement dated as of November 1,
1986 between them. The Debtors seek this to make the situation
clear notwithstanding certain language in the Plan.

The Management Agreement provided that HII would provide certain
management services to Beloit. In exchange, Beloit would pay HII
2% of Beloit's consolidated sales. Because substantially all of
Beloit's operating assets have been sold, Beloit no longer
generates sales and the management services are no longer
required.

Pursuant to the Plan, on the Effective Date, the assets of
Beloit will be placed into a Liquidating Trust to be
administered by a Plan Administrator. The Plan Administrator
appointed under the Plan is David J. Boland. Thus, the HII
estate and the Beloit estate will be completely severed and they
will no longer be affiliates.

The Debtors believe that the separation of HII and Beloit under
the Plan implies the rejection of the Management Agreement.

However, the words in the Plan say that the Management Agreement
is (i) deemed rejected by Beloit and (ii) deemed assumed by HII.
In light of that inconsistency, the Debtors have filed the
Motion to clarify that the Management Agreement is being
rejected by both Beloit and HII and both estates. The Debtors
make it clear that each of the Debtors seek to reject the
Management Agreement pursuant to section 365 of the Bankruptcy
Code as of the Effective Date of the Plan.

In the absence of this relief, the Debtors note, HII and Beloit
could be needlessly saddled with administrative liabilities
under section 365(d)(1O) of the Bankruptcy Code, which would
unnecessarily diminish the assets available for distribution to
creditors.

The Debtors also request that any claims relating to the
rejection of the Management Agreement must be filed with the
Debtors' claims agent within 30 days after the entry of the
order approving this Motion. Any rejection claims filed with
respect to the Management Agreement shall be subject to the
terms of the Committee Settlement Agreement. (Harnischfeger
Bankruptcy News, Issue No. 45; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


INACOM CORP.: Exclusive Period To File Plan Extended To Oct. 1
--------------------------------------------------------------
Inacom Corp. won court approval of a 120-day extension of its
exclusive period to file a plan of reorganization and solicit
plan acceptances. Inacom has until Oct. 1 to file a plan and
until Dec. 1 to obtain the necessary votes for plan
confirmation. It's the third time the company has received an
extension of its exclusive period. In its motion filed to Judge
Peter J. Walsh of the U.S. Bankruptcy Court in Wilmington, Del.,
the information technology products and management services
provider said it needs the additional time to complete its
liquidation, resolve ongoing litigation and formulate a
reorganization plan. (ABI World, July 13, 2001)


LAIDLAW INC.: Has Authority to Pay Prepetition Trade Claims
-----------------------------------------------------------
By Motion, Laidlaw Inc. sought and obtained permission from
Judge Kaplan to pay all Prepetition Trade Claims owed to their
vendors and suppliers. The Debtors successfully argued at the
First Day Hearing that payment of all Prepetition Trade Claims
will allow the Debtors to make a smooth transition into chapter
11 and simplify the process of obtaining approval of the Plan in
an expeditious manner, to the benefit of all of the Debtors'
estates and creditors.

Ivan R. Cairns, Laidlaw's Vice President and Secretary, stressed
to Judge Kaplan that the Company's core business operations are
sound. It is the significant amount of debt incurred that
Laidlaw incurred as a result of certain acquisitions in the
1990's and losses associated with the Debtors' investment with
Safety-Kleen that caused the problem. The proposed Plan of
Reorganization will deleverage the Company's balance sheet and
restore Laidlaw to financial health.

Because of the high caliber of their business operations, Mr.
Carins explains, the Debtors have made every effort to ensure
that the restructuring efforts taking place at the holding
company levels of the Laidlaw Companies, including these chapter
11 cases, would have minimal impact on the Laidlaw Companies'
core operations. Consistent with this policy, the Debtors have
avoided filing insolvency proceedings for the Laidlaw Operating
Companies, meaning the vast majority of the trade creditors of
the Laidlaw Companies will be unaffected by these chapter 11
cases.

Although the Debtors are not operating companies, they
nonetheless perform certain administrative functions that
require them to incur liabilities related to trade creditors,
such as delivery services, utilities, cleaning and maintenance
companies and ordinary course professionals. The Debtors believe
that the payment of the Prepetition Trade Claims will allow the
Debtors to have a seamless transition into chapter 11, and that
the benefits of paying such claims greatly exceed the costs.

Paul E. Harner, Esq., at Jones, Day, Reavis & Pogue advised
Judge Kaplan that the Debtors estimate the total amount of
Prepetition Trade Claims at less than $2,000,000 -- which pales
in comparison to the approximately $4.8 billion in total
liabilities faced by the Laidlaw Companies. "Paying these
relatively de minimis Prepetition Trade Claims will preserve the
business-as-usual atmosphere surrounding these chapter 11 cases
and ensure that the Debtors will continue to receive an
uninterrupted supply of the goods and services necessary to
perform their management and administrative functions for the
benefit of all of the Laidlaw Companies," Mr. Harner told Judge
Kaplan, adding that "payment of the Prepetition Trade Claims
will eliminate numerous small creditors of the Debtors, greatly
reduce the administrative burden of distinguishing between pre-
and post-petition claims and allow the Debtors' management to
focus on exiting chapter 11 as quickly as possible."

Mr. Cairns confirmed for Judge Kaplan that the Debtors have
sufficient cash reserves, to pay promptly all Prepetition Trade
Claims in the ordinary course of their businesses.

Jesse H. Austin, III, Esq., at Paul, Hastings, Janofsky & Walker
LLP in Atlanta, representing GE Capital, and lawyers from
Clifford Chance Roger & Wells LLP, representing the Bank Group,
and Debevoise & Plimpton, counsel to the Noteholders' Committee,
indicated their full support for this Motion.

Based on the record put before the Court, Judge Kaplan ruled
that the Debtors are authorized to pay, at their sole
discretion, up to $2,000,000 of Prepetition Trade Claims in
accordance with ordinary business terms. Nothing in the Debtors'
Motion or in the Court's Order, Judge Kaplan makes clear, shall
(a) impair the Debtors' ability to contest the validity or
amount of any Prepetition Trade Claim on any and all grounds,
(b) be deemed to accelerate the maturity or allowance of any
Prepetition Trade Claim or (c) require the Debtors to pay any
Prepetition Trade Claim. (Laidlaw Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


LERNOUT & HAUSPIE: Dictaphone Panel Moves To Clarify DIP Order
--------------------------------------------------------------
Represented by Christopher A. Ward, Neil B. Glassman, and Steven
M. Yoder of The Bayard Firm of Wilmington, and Bruce R. Zirinsky
and Gregory R. Petrick of the New York firm of Cadwalder
Wickersham & Taft, the Official Committee of Unsecured Creditors
of Dictaphone Corporation asks Judge Wizmur for an Order
clarifying and supplementing the Final Order previously entered
approving the Debtors' DIP financing, authorizing a novation of
certain the Bond Loan Agreement among the Debtors, and
permitting the Committee to exercise certain rights in lieu of
Dictaphone Corporation.

The Committee tells Judge Wizmur it seeks only to ensure that
Dictaphone Corporation will have effective recourse against
Lernout & Hauspie Speech Products NV and L&H Holdings USA Inc.
in the event that Dictaphone is required to pay all or any part
of the DIP facility under which all borrowings have been made by
L&H NV and none by Dictaphone. The concordat plan filed by L&H
in Belgium either provides for repayment of the DIP facility nor
recognizes the validity and existence of the first-priority
liens of the DIP lender, or the "junior contribution liens" in
favor of any Debtor other than L&H NV that repays obligations
under the DIP facility in excess of its borrowings.

With each passing day, Mr. Ward tells Judge Wizmur, the
likelihood grows that Dictaphone will be forced to repay up to
$60,000,000 used by L&H NV under the DIP facility, leaving
Dictaphone with a Junior Contribution Lien securing any such
amount. L&H NV will run out of cash to fund its operations in
late July 2001 (after fully drawing down the DIP facility) and
has no ability to repay its obligations absent the receipt of
proceeds resulting from the liquidation of its assets. Due to
poor market conditions and other circumstances, L&H NV's
financial condition is very much in jeopardy, thereby putting
Dictaphone at risk.

Notwithstanding this situation, L&H NV refuses to provide the
Dictaphone Committee with any comfort whatsoever regarding the
effectiveness and enforceability of the Junior Contribution Lien
arising under the DIP facility, particularly in Belgium where
the Concordat Plan does not provide for repayment of obligations
under the DIP facility and liens such as the Junior Contribution
Lien (i.e., liens created and automatically perfected by Order
of this Court) may not be recognized under Belgian law.

As a result, the Dictaphone Committee brings this Motion seeking
relief to ensure that it has the ability to enforce the Junior
Contribution Lien to the maximum extent possible. Specifically,
the Dictaphone Committee requests a further order of this Court
clarifying and supplementing the Final Order to provide that:

      (a) Any Junior Contribution Lien acquired by Dictaphone
shall be expressly subrogated to all of the rights and remedies
but not the burdens, of the DIP Lenders under the DIP Facility,
including, without limitation, the benefit of all
representations and warranties, covenants, reporting
requirements, interest payments, mandatory paydown provisions
with respect to proceeds obtained from asset sales, remedies,
and other rights available to the DIP Lenders on the terms and
conditions set forth in the DIP Facility;

      (b) Recoupment or setoff of any kin shall be expressly
prohibited with respect to any and all amounts due in connection
with a Junior contribution Lien; provided, however, that
Dictaphone reserves the right to credit bid any such amount in
accord with the Bankruptcy Code;

      (c) The Dictaphone Committee shall be given the right to
exercise all rights and remedies with respect to any Junior
Contribution Lien held by Dictaphone in accord with the terms
and conditions of the DIP Facility and the Final Order, given
L&H NV's actual conflict of interest in enforcing Dictaphone's
Junior Contribution Lien against itself;

      (d) L&H NV and Holdings shall expressly acknowledge and
represent that, both as a matter of United States law and
Belgian law, each of them will not contest the validity,
enforceability or any other aspect of any Junior Contribution
Lien acquired by Dictaphone, that any such Junior Contribution
Lien is a valid, enforceable and legally binding obligation
created under the DIP Facility and the Final Order, that any
such junior Contribution Lien is a first-priority security
interest and lien subject only to the liens of the DIP Lenders,
and that each of them shall expressly consent to, and waive any
and all defenses to, the exercise of any and all remedies and
other rights provided under the DIP Facility and the Final Order
by the Dictaphone Committee on behalf of Dictaphone in
connection with any such Junior Contribution Lien;

      (e) Any and all repayments of obligations under the DIP
Facility by L&H NV, whether voluntary or mandatory, first shall
be transferred from L&H NV to Dictaphone to satisfy any and all
outstanding indebtedness under the Bond Loan Agreement on a pro
rata basis, and second, Dictaphone and/or Holdings, as the case
may be, shall immediately pay an equivalent amount to the DIP
Lenders to satisfy outstanding obligations under the DIP
Facility;

      (f) Any borrowings by L&H NV under the Bond Loan Agreement
should be subject to availability of proceeds under the DIP
Facility, including, without limitation, borrowing base
availability calculations and other restrictions;

      (g) All of the foregoing provisions should be expressly
incorporated into the Bond Loan Agreement to ensure that the DIP
Facility and the Bond Loan Agreement truly mirror one another,
as was represented by Debtors' counsel to this Court;

      (h) All obligations arising in connection with a Junior
Contribution Lien and the Bond Loan Agreement should be deemed
to be valid, enforceable and allowed secured claims for purposes
of the Concordat Plan, and L&H NV shall expressly acknowledge
and agree to such treatment.

The Dictaphone Committee tells Judge Wizmur it seeks only to
level the playing field by providing that Dictaphone is
protected to the greatest extent possible - as any debtor-in-
possession lender would request if extending credit under the
Bankruptcy Code - in the event that Dictaphone is forced to
shoulder L&H NV's obligations under the DIP Facility. In this
connection, the Dictaphone estate should not be disadvantaged to
its detriment and left at the mercy of L&H NV simply because it
was forced to accede to the DIP Facility and Bond Loan Agreement
in negotiations that were not arms-length in nature. To
illustrate what it calls L&H NV's "chicanery", counsel to the
Debtors, while discussing these matters, adamantly refused to
incorporate into the Bond Loan Agreement customary corporate
existence and due authorization representations for L&H NV that
were requested by counsel for the Dictaphone Committee. This, of
course, leaves open the possibility that L&H NV could default on
the Bond Loan Agreement, then disavow its obligations under that
agreement and leave Dictaphone and Holdings with recourse for
such obligations against a potentially non- existent entity.

                       The Banks Object

Artesia Banking Corporation NV, KBC Bank NV, Dresdner Bank
Luxembourg SA, and Fortis Bank NV, represented by Klett Rooney
Lieber & Schorling, and Chadbourne & Parke LLP, object to the
Committee's Motion, telling Judge Wizmur that the Dictaphone
Committee goes too far. The Committee wants Dictaphone, as the
holder of a Junior Contribution Lien, to be granted rights which
the Banks view as different from those in the Final Order.
Specifically, the Banks describe the requested relief as (i)
giving Dictaphone subrogated rights to the rights of the DIP
lenders, and (ii) insulating the Junior Contribution Lien from
any rights of setoff or recoupment. However, the Banks say that
the Committee has not shown any legal or factual basis for this
expansion of rights.

In response to the Committee's concern that Dictaphone may not
exercise its rights under the Final Order, and the Committee's
request that it be authorized to exercise those rights, the
Banks say that there is no basis for that. In addition, the
Banks say that Dictaphone has not made any payment to the DIP
lenders and is therefore not the holder of a Junior Contribution
Lien, so that the Motion is presently premature.

However, the Banks agree that the Junior Contribution Liens
should be deemed to be valid, enforceable, and an allowed
secured claim for purposes of the concordat plan, and that L&H
NV should expressly acknowledge and agree to that treatment.
Moreover, the Banks agree that, to the extent necessary, the
Bond Loan Agreement and the Final Order should be supplemented
to reflect this treatment. However, the Banks object to the
request that the Committee be authorized to exercise
Dictaphone's rights under the Final Order, and that Dictaphone's
rights be altered from those the Banks perceive are in the Final
Order, saying these latter issues are "extreme remedies" which
are not justified in these cases.

       The L&H Creditors' Committee Doesn't Like It Either

The Official Committee of Unsecured Creditors of L&H NV and
Holdings, appearing through Akin Gump Strauss Hauer & Feld, and
Walsh Monzack & Monaco, PA, join the Banks in objecting to the
Committee's Motion, saying the Dictaphone Committee seeks
"extraordinary relief for which there is no precedent".

First, the Unsecured Committee says the relief is premature.
Although the Dictaphone Committee says that a default is
imminent under the DIP Facility, there is no present default.
Absent such a default, the Dictaphone estate is not harmed. The
Unsecured Committee tells Judge Wizmur the Dictaphone Committee
should be required to wait until an event of default occurs and
see if the DIP Lenders seek repayment from Dictaphone's assets.
Only then will the Court be able to determine whether the
Dictaphone estate is at risk.

Second, the Unsecured Committee argues that even if the relief
sought is not premature, the primary relief sought -- rights of
subrogation -- is not legally available to Dictaphone in this
case. Binding case law limits rights of subrogation to prevent a
codebtor who is ultimately liable for a debt from recovering
from another codebtor. Thus, the Unsecured Committee concludes
that an entity such as Dictaphone which is primarily liable for
a debt does not receive subrogation rights by paying the
obligation. It is merely satisfying its own contractual
obligation.

Third, the Dictaphone Committee, through its predecessor the
Informal Committee of Dictaphone Bondholders, could have, but
failed, to seek these additional subrogation rights. While the
Informal Committee objected to the DIP Facility when it was
presented to the Court, the Informal Committee withdrew that
objection because the Debtors agreed to the Junior Contribution
Liens. The Informal Committee knew at that time that the DIP
Lenders required that Dictaphone be a primary borrower, and that
joint and several liability was required. Having obtained its
bargain, the Dictaphone Committee cannot now demand a different
benefit.

Fourth, even if the Dictaphone estate was entitled to
subrogation, which it is not, those rights are available only to
Dictaphone itself -- not the Committee. There is no statutory or
case law allowing a committee to substitute its business
judgment for that of the Debtors.

Fifth, in the unlikely event that Dictaphone repays the DIP
Facility obligations, the estate is adequately protected by the
Junior Contribution Liens, and this claim will be satisfied by
L&H NV and Holdings assets as the Junior Contribution Lien is
afforded superpriority status. Thus, these claims must be paid
in full before any other creditors may receive distribution.
Although values of certain assets have admittedly deteriorated,
the Unsecured Committee says there is no dispute that L&H NV's
and Holdings' assets are well in excess of the DIP borrowing.
According, there is virtually no risk that if the Junior
Contribution Liens come into existence it will not be satisfied
in full.

Finally, despite the Dictaphone Committee's concerns regarding
treatment under the Belgian plan, the Debtors agreed to
recognize the validity and enforceability of the obligations
with respect to the Junior Contribution Lien and Bond Loan
Agreement. There is no dispute that these related claims have a
lien on the assets of the other debtors, so must be satisfied
prior to any distribution to other creditors. (L&H/Dictaphone
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


LOEWEN: Classes & Treatment Of Claims Under the 3rd Amended Plan
----------------------------------------------------------------
Description and Amount                   Treatment
----------------------                   ---------

         Class 1

(Unsecured Priority Claims):        Unimpaired;
Priority Claims against any         On the Effective Date,
Debtor that are entitled to         each holder of an Allowed
priority under section 507(a)(3),   Claim in Class 1 will
507(a)(4) or 507(a)(6) of the       receive cash equal to the
Bankruptcy Code.                    amount of such Claim.

Estimated Aggregate Amount:       Estimated Percentage Recovery:
$1.8 million                      100%

         Class 2

(Loewen Subsidiary Debtor         Impaired; on the Effective
Convenience Claims): Class 2      Date, each holder of an
against any Loewen Subsidiary     Allowed Claim in Class 2
Debtor that otherwise would       against any Loewen Subsidiary
be included in Class 11, but      Debtor will receive cash equal
with respect to each such         to the amount of such  Claim
Claim, the applicable Claim       against such Debtor (as
either (a) is equal to or         reduced, if applicable,
less than $10,000 or              pursuant to an election by the
(b) is reduced to $10,000         holder in accordance with
pursuant to an election by        Section II.B.1 of the Plan).
holder made on the Ballot
provided for voting on the
Plan by the Voting Deadline.
For purposes of treatment
under Class 2, multiple
Claims of a holder against
a particular Debtor arising
in a series of similar or related
transactions between such
Debtor and the original holder
of such Claims will be
treated as a single Claim
and no splitting of Claims
will be recognized for
purposes of distribution.

Estimated Aggregate Amount:       Estimated Percentage Recovery:
$9.6 million                      100%

         Class 3

(TLGI and LGII Convenience Claims): Impaired; on the Effective
Unsecured Claims against TLGI or    Date, each holder of an
LGII that otherwise would be        Allowed Claim in Class 3
included in Class 11, but with      against TLGI or LGII will
respect to each such Claim,       receive cash equal to the
applicable Claim either           amount of such Claim against
(a) is equal to or less than      such Debtor (as reduced, if
$1,000 or (b) is reduced to       applicable, pursuant to an
$1,000 pursuant to an election    election by the holder thereof
by such holder made on the Ballot   in accordance with Section
provided for voting on the Plan     II.B.2 of the Plan).
by the Voting Deadline.  For
purposes of treatment under
Class 3, multiple Claims of a
holder against a particular Debtor
arising in a series of similar or
related transactions between such
Debtor and the original holder of
such Claims will be treated as a
single Claim and no splitting of
Claims will be recognized for
purposes of distribution.

Estimated Aggregate Claims
Amount:                           Estimated Percentage Recovery:
$0.4 million                      100%

         Class 4

(Secured Claims Other than CTA    Unimpaired (except for Claims
Note Claims):                     as to which the applicable
Secured Claims against any Debtor Debtor elects Option C
and Collateralized Accommodation  treatment); on the Effective
Claims, in each case that are not Date, unless otherwise agreed
otherwise classified in Class 5,  by a Claim holder and each
6 or 7.                           applicable Debtor or
                                   Reorganized Debtor (including
                                   pursuant to the agreements
                                   listed on Exhibit III.B.2 to
                                   the Plan), each holder of an
                                   Allowed Claim in Class 4 will
                                   receive treatment on account
                                   of such Allowed Claim in the
                                   manner set forth in Option A,
                                   B or C below, at the election
                                   of the applicable Debtor or,
                                   in the case of Collateralized
                                   Accommodation Claims, Debtors.
                                   The applicable Debtor or
                                   Debtors will be deemed to have
                                   elected Option B, except with
                                   respect to any Allowed Claim
                                   as to which the applicable
                                   Debtor or Debtors elect Option
                                   A or Option C in a
                                   certification Filed prior to
                                   the conclusion of the
                                   Confirmation Hearing. To the
                                   extent that the applicable
                                   Debtor or Debtors elect Option
                                   C treatment for any Class 4
                                   Claims, such Claims will be
                                   deemed impaired and to have
                                   rejected the Plan.

                                   Option A:  Each holder of an
                                   Allowed Claim in Class 4 with
                                   respect to which the
                                   applicable Debtor or Debtors
                                   elect Option A will receive
                                   cash in the full amount of
                                   such Allowed Claim.  For
                                   purposes of Option A,
                                   Collateralized Accommodation
                                   Claims against multiple
                                   Debtors in respect of a
                                   particular transaction will be
                                   treated as a single Claim and
                                   no multiple recoveries will be
                                   permitted.

                                   Option B:  Each Allowed Claim
                                   in Class 4 with respect to
                                   which the applicable Debtor or
                                   Debtors elect or is deemed to
                                   have elected Option B will be
                                   Reinstated.

                                   Option C:  Impaired; each
                                   holder of an Allowed Claim in
                                   Class 4 with  respect to
                                   which the applicable Debtor
                                   or Debtors elect Option C will
                                   be entitled to receive, and
                                   the applicable Debtor or
                                   Debtors (or Reorganized
                                   Debtor or Reorganized
                                   Debtors) shall release and
                                   transfer to such holder, the
                                   collateral securing such
                                   Allowed Claim.

Estimated Aggregate Claims
Amount:                           Estimated Percentage Recovery:
$43.8 million                     100%

         Class 5

(Group I CTA Note Claims):        Impaired; on the Effective
All Group I CTA Note Claims.      Date, each holder of an
Group I CTA Note Claims include   Allowed Claim in Class 5 will
Claims under the BMO Revolving    receive in full satisfaction
Credit Facility, the MEIP Credit  of all of its Group I CTA Note
Facility, the Series D Notes,     Claims: (a) a Pro Rata share
the Series E Notes, the Series 1  of cash in an amount equal to
Notes, the Series 2 Notes or the  the sum of (i) $125,257,000
Series 5 Notes, including any     if the Exit Financing Term
and all guaranties thereof,       Loan Closing occurs,
but do not include any Claims     (ii) 50.103% of the Realized
that are treated under            Asset Disposition Proceeds
Section III.E or Section III.F    Amount and (iii) 50.103% of
of the Plan or otherwise would    the Excess Cash Distribution
constitute an Administrative      Amount; (b) a Pro Rata share
Claim.                            of New Five-Year Secured Notes
                                   in an original principal
                                   amount of $125,257,000, unless
                                   the Exit Financing Term Loan
                                   Closing occurs; (c) a Pro Rata
                                   share of New Two-Year
                                   Unsecured Notes in an original
                                   principal amount equal to
                                   50.103% of the Unrealized
                                   Asset Disposition Proceeds
                                   Amount (i.e., an amount equal
                                   to $165 million minus the
                                   Realized Asset Disposition
                                   Proceeds Amount); (d) a Pro
                                   Rata share of New Seven-Year
                                   Unsecured Notes in an original
                                   principal amount of
                                   $162,835,000; (e) a Pro Rata
                                   share of New Seven-Year
                                   Unsecured Notes in an original
                                   principal amount equal to
                                   50.103% of the New Seven-Year
                                   Unsecured Notes Additional
                                   Principal Amount, if the
                                   Excess Cash Distribution
                                   Amount is less than $35
                                   million; and (f) a Pro Rata
                                   share of 18,141,200 shares of
                                   New Common Stock.  The Allowed
                                   Group I CTA Note Claims are
                                   set forth on Exhibit III.C to
                                   the Plan.

Estimated Aggregate Claims
Amount:                           Estimated Percentage Recovery:
$914.8 million                      76.3%

         Class 6

(Group II CTA Note Claims):       Impaired; on the Effective
All Group II CTA Note Claims.     Date, each holder of an
Group II CTA Note Claims include  Allowed Claim in Class 6
Claims under the Series 3 Notes   will receive in full
or the Series 4 Notes, including  satisfaction of all of its
any and all guaranties thereof,   Group II CTA Claims under the
but do not include any Claims     Note Claims: (a) a Pro Rata
that are treated under            share of cash in an amount
Section III.E or Section III.F    equal to  the sum of
of the Plan or                    (i) $45,993,000 if the Exit
otherwise would constitute an     Financing Term Loan Closing
Administrative Claim.             occurs, (ii) 18.397% of the
                                   Realized Asset Disposition
                                   Proceeds Amount and (iii)
                                   18.397% of the Excess Cash
                                   Distribution Amount; (b) a Pro
                                   Rata share of New Five-Year
                                   Secured Notes in an original
                                   principal amount of
                                   $45,993,000, unless the Exit
                                   Financing Term Loan Closing
                                   occurs; (c) a Pro Rata share
                                   of New Two-Year Unsecured
                                   Notes in an original principal
                                   amount equal to 18.397% of the
                                   Unrealized Asset Disposition
                                   Proceeds Amount; (d) a Pro
                                   Rata share of New Seven-Year
                                   Unsecured Notes in an original
                                   Principal amount of
                                   $59,790,000; (e) a Pro Rata
                                   share of New Seven-Year
                                   Unsecured Notes in an original
                                   principal amount equal to
                                   18.397% of the New Seven-Year
                                   Unsecured Notes Additional
                                   Principal Amount, if the
                                   Excess Cash Distribution
                                   Amount is less than $35
                                   million; and (f) a Pro Rata
                                   share of 6,661,200 shares of
                                   New Common Stock. The Allowed
                                   Group II CTA Note Claims are
                                   set forth on Exhibit III.C to
                                   the Plan.

Estimated Aggregate Claims
Amount:                           Estimated Percentage Recovery:
$353.6 million                    72.4%

         Class 7

(Group III CTA Note Claims):      Impaired; on the All Group III
CTA Note Claims. Group III CTA    Effective Date, each holder of
Note Claims include Claims under  an Allowed Claim in Class 7
the Series 6 Notes, the Series 7  will receive in full  Notes or
the PATS Notes, including any and satisfaction of all of its all
guaranties thereof, but do not    Group III CTA Note Claims:
include any Claims that are       (a) a Pro Rata share of cash
treated under Section III.E or    in an amount equal to the sum
Section III.F of the Plan or      of (i) $78,750,000 if the Exit
otherwise would constitute        Financing Term Loan Closing
an Administrative Claim.          occurs, (ii) 31.500% of the
                                   Realized Asset Disposition
                                   Proceeds Amount and (iii)
                                   31.500% of the Excess Cash
                                   Distribution Amount; (b) a Pro
                                   Rata share of New Five-Year
                                   Secured Notes in an original
                                   principal amount of
                                   $78,750,000, unless the Exit
                                   Financing Term Loan Closing
                                   occurs; (c) a Pro Rata share
                                   of New Two-Year Unsecured
                                   Notes in an original principal
                                   amount equal to 31.500% of the
                                   Unrealized Asset Disposition
                                   Proceeds Amount; (d) a Pro
                                   Rata share of New Seven-Year
                                   Unsecured Notes in an
original
                                   principal amount of
                                   $102,375,000; (e) a Pro Rata
                                   share of New Seven-Year
                                   Unsecured Notes in an original
                                   principal amount equal to
                                   31.500% of the New Seven-Year
                                   Unsecured Notes Additional
                                   Principal Amount, if the
                                   Excess Cash Distribution
                                   Amount is less than $35
                                   million; and (f) a Pro Rata
                                   share of 11,405,300 shares of
                                   New Common Stock. The Allowed
                                   Group III CTA Note Claims are
                                   set forth on Exhibit III.C to
                                   the Plan.
Estimated Aggregate Claims
Amount:                           Estimated Percentage Recovery:
$770.1 million                    57.0%

         Class 8
                                   Impaired; on the Effective
(O'Keefe Note Claims):            Date, each holder of an
All Allowed Claim in Class 8      O'Keefe Note
Claims.                           will receive in satisfaction
                                   of all of its Class 8 Claims
                                   against all Debtors: (a) a
                                   Pro Rata share of 770,500
                                   shares of New Common Stock;
                                   (b) a Pro Rata share of New
                                   Warrants exercisable to
                                   purchase 233,800 shares of New
                                   Common Stock; and (c) a Pro
                                   Rata share of a 15.04%
                                   interest in the Liquidating
                                   Trust.

Estimated Aggregate Claims
Amount:                           Estimated Percentage Recovery:
$33.1 million                     41.3%

         Class 9

(MIPS Debenture Claims):          Impaired; on the Effective
Unsecured Claims against          Date in full satisfaction of
LGII and TLGI under or in respect all of its Class 9 Claims
of the MIPS Junior Subordinated   against LGII and TLGI, if
Debenture and the MIPS Junior     Class 19 accepts the Plan,
Subordinated Debenture Guarantee. LGCLP will receive New
                                   Warrants exercisable to
                                   purchase 479,200 shares of New
                                   Common Stock, which New
                                   Warrants will in turn be
                                   distributed by LGCLP to the
                                   holders of Allowed Interests
                                   and Allowed Claims in Class
                                   19.  If Class 19 does not
                                   accept the Plan, no property
                                   will be distributed to or
                                   retained by the holder of
                                   Allowed Claims in Class 9.

Estimated Aggregate Claims
Amount:                           Estimated Percentage Recovery:
$79.2 million                     1.1%

         Class 10

(Intercompany Claims):            Impaired in part; except as
Claims of any of the Loewen       provided below, all Claims in
Companies against any of the      Class 10 will be Reinstated.
Debtors that are not classified   Notwithstanding the
in Class 9.                       foregoing:  (a) on the
                                   Effective Date, each holder of
                                   an Allowed Claim in Class 10
                                   in respect of the MEIPs
                                   Debentures will receive its
                                   Pro Rata share of $10,000 in
                                   complete discharge of any such
                                   Claim; (b) no property will be
                                   distributed to or retained by
                                   any of the Loewen Companies on
                                   account of any Allowed Claim
                                   in Class 10 with respect to
                                   which, immediately prior to
                                   the Effective Date, the
                                   obligor is LGII and the holder
                                   is TLGI or a non-United
                                   States, wholly owned, direct
                                   or indirect subsidiary of TLGI
                                   (or an entity that is treated
                                   as a branch of any such
                                   subsidiary for U.S. federal
                                   income tax purposes); and (c)
                                   no property will be
                                   distributed to or retained by
                                   any of the Loewen Companies
                                   that is a member of the
                                   "affiliated group" (as that
                                   term is defined in section
                                   1504(a) of the Internal
                                   Revenue Code) of which LGII is
                                   the common parent with respect
                                   to any Allowed Claim in Class
                                   10 on which the obligor is
                                   also a member of such
                                   affiliated group; any such
                                   Claims referenced in clauses
                                   (b) and (c), after being
                                   offset by any amounts owed by
                                   the holder thereof to the
                                   particular Debtor obligor,
                                   will be discharged on the
                                   Effective Date. For purposes
                                   of clause (c) above, any of
                                   the Loewen Estimated Aggregate
                                   Claims Amount: $6.2 billion
                                   Companies, all of the partners
                                   of which are members of such
                                   affiliated group, will be
                                   deemed to be a member of such
                                   affiliated group.

                                   Notwithstanding this treatment
                                   of Class 10 Claims, each of
                                   the Loewen Companies holding
                                   an Allowed Claim in Class 10
                                   will be deemed to have
                                   accepted the Plan.

Estimated Aggregate Claims
Amount:                           Estimated Percentage Recovery:
$6.2 billion                      0-100%

         Class 11

(Unsecured Nonpriority Claims):   Impaired; on the Effective
Unsecured Claims against any      Date, each holder of an
Debtor (including the unsecured   Allowed Claim in Class 11 of
portion of any Claim that         any particular Debtor will
if fully secured would have been  receive, based upon the
classified in Class 4 and as      principal amount of such
to which the applicable Debtor    holder's Allowed Claim and the
shall have elected Option A or    Division in which such Debtor
Option C treatment under          is classified: (a) a Pro Rata
Section III.B.2 of the Plan       share of the number of shares
in respect to the BMO Letter of   of New Common Stock indicated
Credit Facility and the UBS       below for such Division;
Option Contract) that are not     and (b) a Pro Rata share of
Otherwise classified in Class     New Warrants exercisable to
1, 2, 3, 5, 6, 7, 8, 9, 10, 12    purchase the number of shares
or 13.                            of New Common Stock indicated
                                   below for such Division, if
Estimated Aggregate Class 11      any; and (c) a Pro Rata share
Claims: $211.2 million            of the percentage interest in
                                   the Liquidating Trust
Estimated Aggregate Claims        indicated below for such
by Division:                      Division, if any.

Division A Debtors: $ 30.1 mil    Division A Debtors:  133,200
                                   shares of New Common Stock;
Division B Debtors: $104.6 mil    New Warrants exercisable to
                                   purchase 447,300 shares of
Division C Debtors: $ 15.4 mil    New Common Stock; and 13.68%
                                   interest in the
Division D Debtors: $  2.4 mil    Liquidating Trust.

Division E Debtors: $  6.3 mil    Division B Debtors: 462,700
                                   shares of New Common Stock;
Division F Debtors: $ 18.5 mil    New Warrants exercisable to
                                   purchase 1,554,100 shares
Division G Debtors: $ 12.6 mil    of New Common Stock; and
                                   47.51% interest in the
Division H Debtors: $ 21.3 mil    Liquidating Trust.
                                   Division C
Debtors:  896,700
                                   shares of New Common Stock;
                                   no New Warrants exercisable to
                                   purchase shares of New
                                   Common Stock; and no interest
                                   in the Liquidating Trust.
                                   Division D Debtors:  110,700
                                   shares of New Common Stock;
                                   no New Warrants exercisable to
                                   purchase shares of New
                                   Common Stock; and no interest
                                   in the Liquidating Trust.
                                   Division E Debtors:  220,000
                                   shares of New Common Stock;
                                   no New Warrants exercisable to
                                   purchase shares of New Common
                                   Stock; and no interest in the
                                   Liquidating Trust.
                                   Division F Debtors:
                                   471,000 shares of New Common
                                   Stock; New Warrants
                                   exercisable to purchase
                                   146,300 shares of New Common
                                   Stock; and 8.41% interest in
                                   the Liquidating Trust.
                                   Division G Debtors:
                                   173,700 shares of New Common
                                   Stock; New Warrants
                                   exercisable to purchase 99,300
                                   shares of New Common and 5.71%
                                   interest in the Liquidating
                                   Trust.
                                   Division H Debtors:
                                   169,900 shares of New Common
                                   Stock; New Warrants
                                   exercisable to purchase
                                   167,900 shares of New Common
                                   Stock; and 9.65% interest in
                                   the Liquidating Trust.

                                   Estimated Percentage Recovery
                                   by Division:
                                   Division A Debtors:  10.3%
                                   Division B Debtors:  10.3%
                                   Division C Debtors: 100%
                                   Division D Debtors:  80%
                                   Division E Debtors:  60%
                                   Division F Debtors:  45.2%
                                   Division G Debtors:  25.2%
                                   Division H Debtors:  15.2%

        Class 12

(MIPS Securities                 Impaired; no property will be
Litigation Claims):              distributed to or retained
Unsecured Claims, including the  by the holders of Allowed
Securities  Litigation Claims,   Claims in Class 12.
against TLGI, LGII or LGCLP
arising:

(a) from rescission of
      a purchase or sale of the MIPS;
(b) for damages arising from the
      purchase or sale of the MIPS,
      including Claims for damages
      for fraud or misrepresentation
      or otherwise subject to
      section 510(b) of the Bankruptcy
      Code; or
(c) for reimbursement or contribution
      allowed under section 502 of
      the Bankruptcy Code on account
      of such Claims.

Estimated Aggregate Claims Amount:  Estimated Percentage
unknown                             Recovery: 0%

         Class 13

(Other Securities                Impaired; no property will be
Litigation Claims):              distributed to or retained
Unsecured Claims, including the  by the holders of Allowed
Securities Litigation Claims,    Claims in Class 13.
against any Debtor arising:

(a) from rescission of a purchase
      or sale of TLGI Old Preferred
      Stock, TLGI Old Common Stock
      or any other equity security
      of any Debtor (other than the
      MIPS);

(b) for damages arising from the
      purchase or sale of any such
      security, including Claims for
      damages for fraud or
      misrepresentation or otherwise
      subject to section 510(b) of
      the Bankruptcy Code; or

(c) for reimbursement or contribution
      allowed under section 502 of the
      Bankruptcy Code on account of
      such Claims.

Estimated Aggregate Claims          Estimated Percentage
Amount: unknown                     Recovery:  0%

         Class 14

(TLGI Old Preferred Stock):       Impaired; no property will be
Interests in TLGI on account      distributed to the holders
of the TLGI Old Preferred Stock.  of Allowed Interests in Class
                                   14.

                                   Estimated Percentage
                                   Recovery:  0%

         Class 15

(TLGI Old Common Stock):         Impaired; no property will be
                                  distributed to the holders
Interests in TLGI on account of  of Allowed Interests in
   TLGI Old Common Stock.         Class 15.

                                  Estimated Percentage Recovery:
                                  0%

Class 16 (LGII Old Stock):       Impaired; no property will be
Interests in LGII on account     distributed to or retained
of the LGII Old Stock.           by the holders of Allowed
                                  Interests in Class 16 and
                                  such Interests will be canceled
                                  on the Effective Date as part
                                  of the Reinvestment
                                  Transactions.

                                  Estimated Percentage Recovery:
                                  0%

         Class 17

(Third Party Owned Old Stock in  Impaired; no property will be
Non-Ownership Regulated Debtors): distributed to or retained
                                   by the holders of Allowed
Interests in any Non-Ownership    Interests in Class 17 and such
Regulated Debtor held by any      Interests will be canceled
person or entity other than a     on the Effective Date;
Loewen Company.  A "Non-Ownership provided however, that
Debtor" is any Debtor in which    with respect to any
a minority stock interest is      Non-Ownership Regulated
owned by a person or entity other Debtor that is determined
than a Loewen Company and which    by the Bankruptcy Court to be
minority interest is not required  solvent (as defined under
for state regulatory purposes.    the Bankruptcy Code) as of the
                                   Confirmation Date, a holder of
                                   an Allowed Interest in Class
                                   17 in such Debtor will
                                   receive, on the Effective
                                   Date, New Common Stock with an
                                   aggregate value, based on the
                                   reorganization value per share
                                   of $17.19, equal to the value
                                   of such holder's interest in
                                   such Debtor as determined by
                                   the Bankruptcy Court.

                                   Estimated Percentage Recovery:
                                   0%

         Class 18

(Loewen Company Owned Old Stock   Unimpaired; on the
in Non-Ownership Regulated        Effective Date, subject to the
Debtors): Interests in any        Subsidiary Restructuring
Non-Ownership Regulated Debtor    Transactions, Allowed
held by any Loewen Company.       Interests in Class 18 will be
                                   Reinstated.

                                   Estimated Percentage Recovery:
                                   100%

         Class 19

(LGCLP MIPS Partnership           Impaired; if Class 19 accepts
Interests): Interests in LGCLP    the Plan, on the Effective
on account of the MIPS and        Date, each holder of Allowed
any Claims of the holders of      Interests and Claims in
such Interests against TLGI       Class 19 will receive a Pro
under the MIPS Guarantee.         Rata share of New Warrants
                                   distributed to LGCLP as the
                                   holder of Class 9 Claims and
                                   exercisable to purchase
                                   479,200 shares of New Common
                                   Stock.  If Class 19 does not
                                   accept the Plan, no property
                                   will be distributed or
                                   retained by holders of Allowed
                                   Interests and Claims in Class
                                   19.

Estimated Aggregate Interests:    Estimated Percentage Recovery:
3,000,000 shares                  1.1%

         Class 20

(Other LGCLP Partnership          Impaired; no property will be
Interests): Interests in LGCLP    distributed to or retained
other than on account of the      by the holders of Allowed
MIPS.                             Interests in Class 20 and such
                                   interests will be canceled on
                                   the Effective Date.

                                   Estimated Percentage Recovery:
                                   0%

         Class 21

(Other Equity Interests):         Unimpaired; on the Effective
                                   Date, subject to the
Interests in any Debtor           Subsidiary Restructuring
other than Interests in           Transactions, Allowed
Class 14, 15, 16, 17, 18, 19 or   Interests in Class 21
20.                               will be Reinstated.

                                   Estimated Percentage Recovery:
                                   100%

Each amount designated in the table below as "Estimated
Percentage Recovery" for each Class and, in the case of Class
11, each Division is the quotient of the cash or the assumed
value of the New Five-Year Secured Notes, if issued, New Two-
Year Unsecured Notes, if issued, New Seven-Year Unsecured Notes,
New Common Stock or New Warrants to be distributed to all
holders of Allowed Claims or Allowed Interests in such Class or
Division, divided by the estimated aggregate amount of Allowed
Claims or Allowed Interests in such Class or Division. For
purposes of this calculation, it is assumed that: (a) the New
Five-Year Secured Notes, if issued, the New Two-Year Unsecured
Notes, if issued, and the New Seven-Year Unsecured Notes will
each have a value equal to the principal amount thereof; (b) the
New Common Stock to be distributed to holders of Claims under
the Plan will have an estimated aggregate value of approximately
$687.7 million, or $17.19 per share, as of the Effective Date,
based on the midpoint of the range for assumed reorganization
equity value of Reorganized LGII; and (c) the New Warrants to be
distributed to holders of Allowed Claims or Allowed Interests
under the Plan will have an estimated aggregate value of
approximately $5.8 million, or $1.85 per New Warrant, as of the
Effective Date.

For purposes of the table below, because of the nature of the
Liquidating Trust Assets, no value has been assigned to
interests in the Liquidating Trust. (Loewen Bankruptcy News,
Issue No. 42; Bankruptcy Creditors' Service, Inc., 609/392-0900)


LTV CORPORATION: Rejecting HQ Leases With ZML & National City
-------------------------------------------------------------
The LTV Corporation and LTV Steel Company, Inc., jointly ask
Judge Bodoh to authorize the rejection of:

      (i) an unexpired lease with Equity Office Holdings, as
agent  for ZML-Cleveland Public Square, LLC, for commercial real
property located on floors 12 through 16, and 38 through 41, in
the BP America Building at 200 Public Square, Cleveland, Ohio,
and

     (ii) certain unexpired equipment leases with National City
Leasing Corporation for office furniture used at the property.

The office lease began in September 1995. LTV uses the property
for certain administrative, managerial, and executive personnel
offices, and as its corporate headquarters. The monthly base
rent under this lease is $438,841.34. The lease also requires
that LTV pay its share of the operating expenses and taxes
related to the property. The lease expires under its own terms
on April 30, 2011.

LTV Steel as lessee, and National City as lessor, entered into a
series of prepetition equipment schedules for office furniture
to be used in connection with the real property lease under a
Master Equipment Lease Agreement dated September 22, 1995:

      (1) Furniture Schedule dated June 13, 1996, which expires
on June 20, 2003, and provides for quarterly rent of $45,455.95;

      (2) Furniture Schedule expiring December 20, 2003,
providing for quarterly rent of $110,241.74; and

      (3) Furniture Schedule dated may 20, 1997, which expires on
May 20, 2004, and provides for quarterly rent of $30,783.70.

LTV and LTV Steel have evaluated the leases and have concluded
that the leases are not necessary to their ongoing business
operations or restructuring efforts. LTV presently is subleasing
the 5th floor of the BP Building to a sublease with BP America,
Inc., dated October 11, 1999. In addition, LTV anticipates
entering into a sublease with BP for some or all of the 6th
floor of the BP Building, either simultaneously with or shortly
after the filing of this Motion. On or before the rejection
date, LTV will relocate all administrative, managerial and
executive personnel to the sixth floor subleased space and/or to
other property owned by the Debtors. The subleases provide LTV
with sufficient space to support its administrative, managerial
and executive functions at substantially reduced rent; therefore
it is not cost-effective for LTV to continue to perform under or
to assume the real property lease. LTV advises Judge Bodoh it
believes that the execution of the sublease of the 6th floor is
a transaction in the ordinary course of its business, and
accordingly, judicial approval of the sublease is not necessary.

The Debtors estimate that the resulting cost savings will exceed
$350,000 per month. Continuing to maintain the property under
these circumstances would unnecessarily deplete the assets of
LTV's estate to the detriment of its creditors. Moreover, ;prior
to the Petition Date, LTV made substantial efforts to market the
real property lease, but found no buyer or sublessee at that
time. Based on this experience and its knowledge of the
Cleveland, Ohio, real estate market, LTV does not believe that a
market exists for a sale or sublease of the real property lease
at the current contractual rent.

Because LTV no longer intends to occupy the property, it no
longer has a need for the furniture used on the premises. Under
these circumstances, LTV Steel's ongoing obligations under the
furniture schedules impose an undue burden on its estate and
would unnecessarily deplete its assets. Moreover, LTV Steel does
not believe that a market exists for a sale of the furniture
schedules. However, LTV seeks to reject only the furniture
schedules of the Master Lease. LTV Steel believes that it may
reject only the relevant schedules of the Master Lease. The
subject matter, situation of the parties, and circumstances
underlying the rental of the furniture all support severability
of the furniture schedules from the Master Lease. As noted
above, each furniture schedule covers the furniture that LTV
Steel leased to use on a specific floor or floors on the
property. LTV Steel will not need office furniture for those
floors after the rejection date.

Most importantly, the furniture schedules under the Master Lease
have different pricing schemes and termination dates. Such a
series of schedules are different agreements based on the
numerous segregated obligations of performance calling for
varied amounts of payment. Accordingly, LTV Steel may reject the
furniture schedules while retaining, pending a decision to
assume or reject, all rights under the Master Lease and any
remaining equipment schedules thereto.

In addition, to ensure that LTV has the ability to vacate the
property by the rejection date, LTV Steel requests that any
order granting this Motion require National City to remove the
furniture from the property at least three business days before
the rejection date. (LTV Bankruptcy News, Issue No. 11;
Bankruptcy Creditors' Service, Inc., 609/392-00900)


MARINER POST-ACUTE: Wants To Reject Ravinia I Office Sublease
-------------------------------------------------------------
Mariner Post-Acute Network, Inc. subleases from ABN Amro Bank,
N.V. non-residential property of approximately 2,531 rentable
square feet for its corporate office on the 12th Floor of
Ravinia I at a fixed monthly rent of $4,112.88.

MPAN candidly admits that while it anticipated needing the
subleased space when it entered into the sublease, it turned out
that it has never had need for such space, due in large part to
its filing for bankruptcy and its subsequent corporate
restructuring. The Debtor has notified ABN of its intention to
rejection of the Ravinia Sublease and that ABN had the right to
immediate possession of the subleased space.

In a motion, the Debtor seeks the Court's authorization for its
rejection of the sublease with ABN Amro. (Mariner Bankruptcy
News, Issue No. 15; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


MUSICMAKER.COM: Shares Face NASDAQ Delisting
--------------------------------------------
Musicmaker.com Inc. (Nasdaq: HITS) received a letter from the
Staff of The NASDAQ Stock Market, Inc. indicating the Staff's
belief that the Company now lacks tangible business operations
and informing the Company of its decision to delist the
Company's common stock from The NASDAQ Stock Market at the open
of business on July 17, 2001 pursuant to NASD Marketplace Rules
4300, 4300(a)(3) and 4350(e). The Company has requested a
hearing before a NASDAQ Listing Qualifications Panel to review
the Staff's determination, which it intends to vigorously
oppose. There can be no assurance that the Panel will grant the
Company's request for continued listing.


PACIFIC GAS: Wants To Assume Nuclear Insurance Policies
-------------------------------------------------------
Nuclear Electric Insurance Limited issued four property and
decontamination liability policies to insure Pacific Gas and
Electric Company against losses from nuclear and other accidents
at its Diablo Canyon Nuclear Power Plan and the Humboldt Bay
Plant:

      (1) Policy No. P00-027 provides $500,000,000 of property
damage insurance for Diablo Canyon in exchange for a $1,268,000
annual premium and a $6,340,000 retrospective premium adjustment
per year in the event of a claim;

      (2) Policy No. X00-042 provides $1,465,000,000 of
decontamination liability, decommissioning liability and excess
property insurance for Diablo Canyon in exchange for a $986,201
annual premium and a $4,931,005 retrospective premium adjustment
per year in the event of a claim;

      (3) Policy No. E00-042 provides a weekly $3,500,000
indemnity, subject to a $490,000,000 limit, for both Diablo and
Humboldt in exchange for an $818,277 annual premium and a
$4,091,385 retrospective premium adjustment per year in
the event of a claim; and

      (4) Policy No. P00-028 provides $110,000,000 of primary
property and decontamination liability insurance for Humboldt in
exchange for an $132,704 annual premium and a $663,520
retrospective premium adjustment per year in the event of a
claim.

Gregory M. Rueger, Senior Vice President--Generation and Chief
Nuclear Officer for PG&E, reminds Judge Montali that Diablo is a
fully operational facility which generates electricity from two
nuclear reactors and serves 2,000,000 PG&E customers. Humboldt
Bay was shut down in 1976 and is in SAESTOR status pending
decommissioning.

NEIL, Mr. Rueger relates, is a captive insurance company, owned
by the members it insures. NEIL has a $4.8 billion asset base.
Because NEIL is so financially sound, in 2000, NEIL returned
more to its members than it collected in premiums. The policies
are obviously important to PG&E, alternative insurance would be
difficult to obtain and no other insurer would offer a deal as
good as NEIL. Accordingly, the Debtor argues, the Policies
should be assumed. (Pacific Gas Bankruptcy News, Issue No. 10;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


PEOPLEPC: Appeals Nasdaq's Move To Delist Shares
------------------------------------------------
PeoplePC, the company that makes it easy and affordable to get
online, will request a hearing with regard to an action taken by
the Nasdaq staff to delist its stock. The request for a hearing
will suspend the action until the Nasdaq Listing Qualifications
Panel (Panel) reaches a final decision on the Company's appeal.

The Company previously announced it is not currently in
compliance with Nasdaq's minimum bid requirement (Nasdaq
Marketplace Rule 4450(b)(4)). PeoplePC received a Nasdaq Staff
Determination on July 10, 2001 indicating non-compliance, and
therefore its securities are subject to delisting from the
Nasdaq National Market.

There is no assurance that the Panel will decide in the
Company's favor on appeal. If the action is sustained, the
Company anticipates that its shares will be traded on the NASD
OTC Bulletin Board.

                       About PeoplePC

PeoplePC, founded in early 1999, provides a hassle-free and more
affordable way to get online so that everyone can have access to
and participate in the digital economy. PeoplePC offers its
unique end-to-end solution both to individual consumers and to
major corporations interested in wiring their workforces and
creating deeper relationships with customers through PeoplePC
online real estate. A PeoplePC membership comes complete with a
new, brand name computer system, Internet access, and high-
quality customer support and service. There's also a value-
packed, customizable online community that fosters long-term
connections with PeoplePC members and ongoing revenue
possibilities. PeoplePC offers its services on a global basis,
allowing people across the world to reap the rewards of the
digital age. For more information, visit HTTP://WWW.PEOPLEPC.COM


PHOTOWORKS, INC.: Receives Nasdaq Delisting Notification
--------------------------------------------------------
PhotoWorks (Nasdaq:FOTO), a leading online, direct mail, and
retail photo services company, received a Nasdaq Staff
Determination on July 9, 2001 indicating that the Company fails
to comply with the net tangible assets requirement for continued
listing under Marketplace Rule 4450(a)(3), and that its
securities are, therefore, subject to delisting from The Nasdaq
National Market.

The Company has requested a hearing before a Nasdaq Listing
Qualifications Panel to review the Staff's Determination.

"We remain confident in a bright future for PhotoWorks," said
Howard Lee, President and CEO of PhotoWorks. "As projected, we
believe we are on track to be profitable and cash positive in
our fourth quarter ending September 29, 2001. Our operating plan
for fiscal 2002 focuses our resources on providing high quality
products and services to our customers and allows us to generate
operating cash."

The Company's securities will continue to trade on The Nasdaq
National Market pending the Panel's decision. The Company
anticipates that the hearing will be scheduled, to the extent
practicable, within 45 days. If delisting occurs, the Company
believes that its stock is eligible to trade on the OTC Bulletin
Board.

                    About PhotoWorks(R)

PhotoWorks (formerly Seattle FilmWorks) is a leading online
photo services company dedicated to providing its customers with
innovative ways to enjoy and use their photos. The PhotoWorks
service provides both traditional and digital camera owners with
the easiest way to archive and organize photos online, share
them with friends and family, and order reprints, photo albums
and other gifts. PhotoWorks draws upon a unique dual heritage as
a top-rated photofinisher with over 23 years of experience along
with a tradition of innovation and leadership in digital and
online photo services. Based in Seattle, PhotoWorks, Inc.
(Nasdaq:FOTO) was founded in 1978. More information is available
at WWW.PHOTOWORKS.COM


PILLOWTEX CORPORATION: Settles In Part GECC's $130,068 Claim
------------------------------------------------------------
Several years ago, Opelika Industries Inc. bought a 1996
Westpoint Slasher, Model 861 Headway using funds provided by
General Electric Capital Corporation (GECC), pursuant to a
promissory noted dated December 1996 and the Master Security
Agreement dated November 1995.

GECC took a first priority and purchase money security interest
in the Slasher. As of the Petition Date, Opelika owes GECC
$130,068.08.

When Opelika sold the Slasher to Atkins Machinery free and clear
of all liens, claims and encumbrances last March. The Slasher
sale generated $90,000 in net proceeds. GECC's lien on the
Slasher attached to the proceeds.

Opelika and GECC agree that:

      (a) the proceeds shall be remitted to GECC in partial
satisfaction of the total indebtedness owed to GECC.

      (b) GECC shall be entitled to an unsecured, deficiency
claim in the amount of $40,068.08 on account of the obligations
owed to it under the sale documents. Any other claims of GECC
against any of the Pillowtex Corporation Debtors' chapter 11
estates or any of their respective affiliates, directors,
officers, employees, agents, successors and assigns, arising out
of or relating to the sale documents are hereby waived,
discharged and released.

Judge Robinson approves the parties' agreement in all respects.
(Pillowtex Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


PLIANT SYSTEMS: Releases Second Quarter Financial Results
---------------------------------------------------------
Pliant Systems, Inc. (OTC Bulletin Board: PLNS) reported results
for the second quarter ended June 30, 2001. Net revenues for the
quarter were $5.7 million, up from $3.9 million in the same
period last year. Product sales and contract revenues increased
in the current quarter due to sales of the Pliant 3000(TM)
Integrated Access Platform and end-of-life orders for older
products. Services revenues decreased by $0.95 million to $1.7
million in the current quarter due to the completion of all but
one project letter for the Lucent Anymedia Research &
Development contract. The company also received a $1.6 million
one-time payment in April from a legacy product customer for
completion of a licensing fee agreement.

The company reported a first quarter net loss of $6.5 million or
$(0.47) per share, compared to a net loss of $9.6 million or
$(0.71) per share for the same period in 2000. The reduced net
loss was due primarily to the one time license payment of $1.6
million and the restructuring and cost reduction activities,
primarily the reduction of the workforce by 140 employees on
April 30, 2001. The quarterly loss was also impacted by
financial and legal advisory fees and other costs and charges
associated with the Company's unsuccessful efforts to
restructure its debt as well as the filing of a voluntary
petition under Chapter 11 of Title 11 of the United States Code.

Net revenues for the six months ended June 30, 2001 increased to
$14.7 million compared with $10.5 million for the same period
last year. The current period results reflect the one-time
payment of a $1.6 million license fee from a legacy product
customer. Product revenues increased in the current period due
to sales of the Pliant 3000(TM) Integrated Access Platform and
end- of-life orders for older products.

The company reported a net loss of $14.6 million or $(1.06) per
share, compared to a net loss of $16.3 million or $(1.20) per
share for the same period in 2000. The net loss for 2001
reflects the reduced operating expenses associated with the
April 30th restructuring and cost reduction activities as well
as the advisory fees and other costs associated with the Chapter
11 filing on May 1st.

On May 1, 2001, Pliant Systems Inc. filed a voluntary petition
under Chapter 11 of the United States Bankruptcy Code. The
company 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. The company sought Chapter 11
protection in order to facilitate an orderly sale of its
business and assets to a third party. The company announced on
July 6, 2001 that it has agreed in principal to sell
substantially all of its assets to mPhase Technologies Inc. (OTC
Bulletin Board: XDSL), 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.
mPhase is a leading designer of broadcast digital television and
high-speed data solutions for the telecommunications industry.
The proposed transaction's purchase price is approximately $3.6
million.

                   About Pliant Systems

Pliant Systems Inc. designs, manufactures and markets integrated
multi-service access platforms for the telecommunications
industry. The company provides competitive local exchange
carriers and incumbent local exchange carriers 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 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: Court Okays Employment Of Ordinary Course Professionals
---------------------------------------------------------------
Due to the nature of their operations, PSINet, Inc. requires
legal and business advice on a host of matters, such as
intellectual property, litigation, corporate law, local
insolvency law, personal injury law and labor law. The Debtors
need to utilize the services of Ordinary Course Professionals
for these matters on an undisrupted basis. Given the number and
geographical dispersion of these professionals, requiring the
Debtors to seek individual authorization to employ each of the
OCB Professionals would place an undue administrative burden on
the Debtors, the Court and the U.S. Trustee, and would increase
substantially the expenses of the estate without corresponding
benefit.

Judge Gerber entertained the Debtors' needs and issued an
interim order authorizing the Debtors to retain the OCB
Professionals, effective as of the petition date, without the
submission of separate employment applications, affidavits and
the issuance of separate orders for each individual
professional, pursuant to Sections 105(a), 327 and 328 of the
Bankruptcy Code and subject to the Court's final approval.

The Debtors are thus authorized to pay to each OCB Professional,
on an interim basis and without an application to the Court by
each professional, 100% of fees and disbursements incurred,
subject to a cap of of $75,000 in the aggregate for each single
OCB Professional for postpetition compensation and reimbursement
of postpetition expenses relating to any consecutive three-month
period, and a cap of $125,000 in the aggregate for fees and
expenses during the pendency of the Debtors' chapter 11 cases,
unless each such OCB Professional is separately retained by
order of the Court upon notice and a hearing. Specifically, such
payments would be made following the submission of appropriate
invoices to and approval by the Debtors (and to counsel for the
Committee, once appointed). The Court's order provides that the
Debtors will not pay any OCB Professional who has failed to file
an affidavit of disinterestedness.

PSINet identifies a certain subset of the OCB Professionals who
will serve as Local Foreign Counsel in the ordinary course of
the Debtors' business to provide the Debtors with limited, time-
to-time advice on the local transaction and
insolvency/bankruptcy laws of foreign countries where they or
their non-Debtor subsidiaries are located or do business and to
explain the debtor/creditor laws of the United States to
PSINet's foreign creditors, who are frequently unfamiliar with
this aspect of United States law. The work will be limited, and
the professionals involved, while technically giving bankruptcy
advice, will be dosing so on a limited basis and will not be
acting as "bankruptcy advisors", as that phrase is understood in
the practice of bankruptcy law in the United States.

The Debtors recognize that some of the OCB Professionals may
hold very minor amounts of unsecured claims against the Debtors
in respect of prepetition services rendered. Nevertheless, none
of the OCB Professionals has an interest materially adverse to
the Debtors, their creditors or other parties in interest, and
thus each professional retained will meet, if applicable, the
special counsel requirement of Section 327(e) of the Bankruptcy
Code, PSINet believes.

The lists of OCBs submitted with the motion are as follows:

(A) Ordinary Course Professionals

      Name and Address                         Services Provided
      ----------------                         -----------------
      Enterprise Financial Consulting          Management-level
      12355 Sunrise Valley Drive, Suite 610    Accounting Staff
      Reston, VA 20191                         Augmentation
      Phone: 703-716-0500
      Principal Contact: Dean Schauer

      Valuation Research Corporation           Asset Valuation
      100 Nassau Park Blvd.
      Princeton, NJ 08540
      Phone: 609-243-7033
      Principal Contact: Neil Kelly

      Steinhart & Falconer                     Litigation
      333 Market Street, 32nd Floor
      San Francisco, CA 94105

      Kirkpatrick & Lockhart                   Employment
      1800 Massachusetts Avenue, N.W.,
      2nd Floor, Washington, DC 20036

      Gray & Becker                            Litigation
      900 West Avenue
      Austin, Texas 78701-2210

(B) Local Foreign Counsel

      Name and Address                       Services Provided
      ----------------                       -----------------
      Nishimura & Partners                   Trademark and
      Ark Mori Building, 29th Floor          Corporate
      12-32 Akasaka 1-Chome
      Minato-Ku, Tokyo 107-6029 Japan

      Square Sanders and Dempsey             Full Service
      14/F, 116 Nanking East Road
      Section 2, Taipei 104, Taiwan

      Lee & Ko                               Full Service
      18th Floor Marine Center Main Bldg.
      118, 2-Ka, Mandaemun-ro, Chung-Ku
      Seoul, 100-092, Korea

      William L. Fan & Co.                   Full Service
      Room 507
      77 Des Vooeux Road Central, Hong Kong

      Middletons Moore & Bevins              Full Service
      Level 6, 7 Macquarie Place
      Sydney NSW 2000 Australia

      Frasier Milner                         Full Service
      1 First Canadian Place
      100 King Street West
      Toronto, Ontario, Canada M5X 1B2

      Olser Hoskin & Harcourt LLP            Restructuring
      1 First Canadian Place
      Toronto, Ontario, Canada M5X 1B8

      White & Case                           Full Service
      Szalag Utca 19
      1011 Budapest, Magyarorzag

      CMS Derk Star Busmann Hanotiau         Full Service
      Hanotiau
      Prostbus 85250
      3508 AG Utrecht
      Netherlands

      Khan & Glucroft                        Full Service
      51 Rue Demont d'Urville
      75116 Paris, France

      Gianni Origoni & Partners              Full Service
      via delle Quattro Fontane 20
      00184 Roma

      Mason Curran                           Full Service
      6 Fitzwilliam Square
      Dublin 2, Ireland

      Baker McKenzie                         Full Service
      6, Rue Bellot
      1206 Geneve
      Switzerland

      Basham, Ringe y Correa, SC             Trademark
      Mexico

      Capin, Calderon, Ramirez y Guitterez   Corporate
      Azpe SC, Mexico

      Quijano, Cortina, Lopez y de la Torre  Bankruptcy
      Abogados
      Mexico

      Estudio Alegria                        Bankruptcy
      Argentina

      Hope, Duggan & Silva Abogados          Corporate/Trademark
      Argentina

      Hughes & Hughes Abogados               Corporate
      Uruguay

      Martinez, Odell & Calabria             Corporate
      Puerto Rico

      Cruzat, Ortuzar & McKenna              Trademark
      Chile

      Estudio Arturo Alessandri              Bankruptcy
      Chile

      Montt, Iraurrizaga & Cia S.A.          Corporate
      Chile

      Arias, Fabrega & Fabrega Abogados      Bankruptcy
      Panama

      Franco & Franco Abogados               Corporate
      Panama

      Morgan & Morgan                        Trademark
      Panama

      Neviani Advogados, Borges & Bieldeck   Corporate/Trademark
      Advogados
      Brazil

      H.B. Cavalcanti e Mazzilo Advogados    Bankruptcy
      Brazil

      Veirano & Advogados Associados         Bankrupty/Labor
      Brazil

Pursuant to the Interim Order, by which the Debtors are directed
to file a supplement with the Court if additional OCB
Professionals are to be used, the Debtors have submitted a
supplement, identifying three additional law firms whom the
Debtors propose to employ as OCB Professionals:

     Faegre & Benson LLP                 Attorney (General
     Litigation)

     Hayes & Magrini                     Attorney (General
     Litigation)

     McNeer, Highland, McMunn & Varner   Attorney (General
                                         Litigation)

(PSINet Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


ROWE COMPANIES: Posts Weak Second Quarter 2001 Results
------------------------------------------------------
The Rowe Companies (NYSE: ROW), a leading furniture manufacturer
and retailer, posts operating results for the second quarter
ended June 3, 2001.

Net shipments decreased 11.2%, to approximately $78 million,
compared with $88 million for the same period last year. Gross
profit margins declined to 31.6% for the quarter, down from
34.3% for the same period last year. Net earnings from
continuing operations amounted to as loss of $2.2 million, or
$0.17 per share, down from earnings of $1.4 million for the
comparable prior year period, or $0.11 per diluted share.

For the six months ended June 3, 2001 net shipments decreased
9.4%, to $158 million, compared to $175 million for the same
period last year. Gross margins declined to 32.3% from 34.6% for
the prior year period. Net earnings from continuing operations
amounted to a loss of $3.0 million, or $0.23 per share, compared
to earnings of $4.3 million, or $0.31 per diluted share, for
the comparable prior year period.

"The Company continues to be affected by weakened consumer
confidence and sluggish retail sales," said Gerald M. Birnbach,
Chairman of the Board and President. "We, like others, are
hopeful that the Federal Reserve's aggressive interest rate
reductions and the upcoming income tax rebate will have some
measurable positive impact on the economy in the second half of
the year. In the meantime we continue to prudently manage
operating costs while striving to increase market share. There
are some positives to report looking forward. Mitchell Gold
continues to benefit from their strong relationships with some
of the best specialty retailers across the country. In addition,
Rowe Furniture enjoyed a strong response to new products and
programs introduced at the April International Home Furnishings
Market in High Point, NC. That response should result in
increased display of their products in retail stores for the
late summer and fall selling seasons."

The Rowe Companies is comprised of Rowe Furniture, Inc., a major
manufacturer of quality upholstered furniture; The Mitchell Gold
Co., an upholstered furniture manufacturer serving some of the
nation's leading specialty retailers; Storehouse, Inc., a 43-
store retail furniture chain; and Home Elements, Inc., a 19-
store specialty retail furniture group.


SAFETY-KLEEN: Rejecting Baker, Xerox, DJJ And Other Leases
----------------------------------------------------------
Safety-Kleen Corp. and its subsidiary and affiliate Debtors ask
Judge Walsh to authorize the rejection of certain executory
contracts and unexpired leases to which one or more Debtors is a
party including executory contracts and/or unexpired leases
with:

            Baker Tanks;
            Xerox Corporation
            Copy Products Company - Leasing Division
            DJJ Transportation Services, Inc., and
            Air Products and Chemicals, Inc.

                  The Roll-Off Box Leases (Baker Tank)

Under equipment leases by and between certain of the Debtors and
Baker Tanks, the Debtors lease (i) a roll-off box, and (ii) a
metal-lid roll- off unit.  The roll-off boxes currently are not
bring used by the Debtors, and the Debtors do not anticipate a
need for the Roll-off boxes in their future operations.

By rejecting the roll-off box leases, the Debtors will avoid
incurring further unnecessary administrative expense obligations
with no corresponding benefit to the estate.  Rejection of the
roll-off box leases thus is in the best interests of the
Debtors, their estates, their creditors and all parties-in-
interest.  The Debtors thus request that the roll-off box leases
be rejected effective as of the date of hearing on the Motion.

                           Xerox Lease

Under an equipment lease in June 1998, between the Debtors as
successors to Laidlaw Environmental Services, and Xerox, the
Debtors lease a copy machine which formerly was used at their
Martinez California facility.  As a result of the closure of the
Martinez facility, the Debtors no longer have a use for the copy
machine or the services and supplies provided under the Xerox
lease.

By rejecting the Xerox lease, the Debtors will avoid incurring
further unnecessary administrative expense obligations with no
corresponding benefit to the estate.  Rejection of the Xerox
lease thus is in the best interest of the Debtors, their
estates, and their creditors and parties in interest.  The
Debtors thus ask that the Xerox lease be rejected effective as
of the date of hearing on the Motion.

                     Copy Products Agreement

Safety-Kleen Consulting, Inc., as successor to Viro Group, Inc.,
and Copy Products, are parties to an equipment lease from August
1999, under which, among other things, Consulting leases (1) one
Sharp copier, and (2) one Sharp laser facsimile.  Consulting no
longer has a use for the copy equipment because Consulting
anticipates consummating a sale of the business that uses the
copy equipment, as described in the Debtors' motion for approval
of the asset sale.

By rejecting the Copy Products lease, Consulting will avoid
incurring further unnecessary administrative expense obligations
with no corresponding benefit to its estate.  Rejection of the
Copy Products lease thus is in the best interests of Consulting,
the Debtors, their estates, their creditors, and all parties in
interest.  The Debtors thus request that the Copy Products lease
be rejected effective as of the date of hearing on the Motion.

                      Railroad Equipment Lease (DJJ)

Under a railroad equipment lease from December 1996, between SK
Services LC, as successor to ECDC Environmental, LC, and DJJ, SK
Services leases 120 1975 Thrall coal gondolas.  The gondolas
formerly were used by the Debtors in connection with a waste
management agreement with General Motors Corporation and its
affiliates, which has been previously rejected by the Debtors.
Accordingly, the Debtors have no further use for the gondolas.

By rejecting the gondolas lease, SK Services will avoid
incurring further unnecessary administrative expense obligations
with no corresponding benefit to its estate.  Rejection of the
gondolas lease thus is in the best interests of SK Services, the
Debtors, their estates, their creditors, and all parties in
interest.  The Debtors thus request that the gondolas lease be
rejected effective as of the date of hearing on the Motion.

                Air Products Supply Agreement

Under a Product Supply Agreement from July 1998, between SKC, as
successor to Laidlaw Environmental Services, inc., and Air
Products, SKC purchases from Air Products certain gaseous and
liquid form chemicals at the Debtors' Bridgeport, New Jersey,
facility.  SKC is in the process of closing the Bridgeport
facility and, accordingly, will no longer require the materials
provided by Air Products under the Supply Agreement.

By rejecting the Air Products agreement, SKC will avoid
incurring further unnecessary administrative expense obligations
with no corresponding benefit to its estate.  Rejection of the
Air Products agreement thus is in the best interests of SKC, the
Debtors, their estates, their creditors, and all parties in
interest.  The Debtors thus request that the Air Products
agreement be rejected effective as of the date of hearing on the
Motion. (Safety-Kleen Bankruptcy News, Issue No. 18; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


SERVICE MERCAHNDISE: Amends Lease On Store #168 In Miami, FL
------------------------------------------------------------
As a result of Service Merchandise Company, Inc.'s changed
merchandise mix under their 2000 Business Plan, the Debtors find
that they do not need all of the approximately 33,000 square
feet of space for Store Number 168; approximately 25,000 square
feet of space would suffice. The Debtors, working with their
real estate and financial advisors, have determined that it
would be hard to sublease the excessive space of only
approximately 8,000 square feet. Therefore, the Debtors liased
with the landlord. As part of its renovation of he shopping
center, the landlord proposed to relocate the Debtors to a
smaller space within the enclosed mall and within the vicinity
of the current premises. Accordingly, the Debtors sought and
obtained the Court's approval to enter into agreement with ERT
163rd Street Mall, LLC (the Landlord) to amend the lease and to
assume the Amendment.

With the relocation, the Debtors will pay annual rent of
$212,500 for a store of approximately 25,000 square feet instead
of $287,000 for a store of 33,000 square feet, thus making
savings of $74,500 annually. Pursuant to the Amendment, the
Debtors will approve a large-scale redevelopment by the landlord
of the shopping center in which the premises are located,
resulting in a shopping center that is likely to attract more
business, the Debtors note.

In addition, the landlord will build out the Relocated Premises
to the Debtors' specifications, at the Landlord's sole cost and
expense. The Debtors plan to prepare the Relocated Premises for
their new merchandise mix and improve the layout and the look of
the Relocated Premises. Pursuant to the Amendment, the Debtors
will commence paying the Landlord fixed rent in the amount of
$212,500 from the later of (i) the date the Debtors opens for
business at the Relocated Premises or (ii) 60 days after the
Delivery Date, whichever is earlier. Upon timely surrender by
the Debtors of the original premises and certain other
conditions, the Landlord will pay to the Debtors the sum of
$80,000.00. If the Debtors fail to vacate the original premises,
the Landlord has certain rights to proceed under Florida law to
evict the Debtors from the premises (with relief from the
automatic stay) and seek damages not to exceed $80,000.00.

Furthermore, in consideration for the Debtors seeking to approve
the Amendment, the Landlord has agreed to deliver non-
disturbance and attornment agreements (NDAs) to the Debtors with
respect to certain other properties leased from the Landlord.

In their motion, the Debtors note that there is no Cure Claim,
based on their books and records. Limited objection is raised by
New Plan Excel Realty Trust, the owner of the leasehold
identified as the Debtors' Store No. 168 located in The 163rd
Street Shopping Center is a shopping center, as that term is
used in 11 U.S.C. section 365(b)(3). New Plan points out that
according to its records, the cure amount is $3,695.13 plus
year-end adjustments accrued but not yet billed in the amount of
$13,028.61 or a total of $16,723.74.

In its order granting the motion, the Court authorizes the
Debtors to pay the Cure Claim in the amount of $3,210.25
(Service Merchandise Bankruptcy News, Issue No. 18; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


SPORTS AUTHORITY: S&P Affirms B And CCC+ Ratings
------------------------------------------------
Standard & Poor's revised its outlook on The Sports Authority
Inc. (TSA) to stable from negative.

At the same time, Standard & Poor's affirmed its single-B
corporate credit and senior secured bank loan ratings and its
triple-C-plus subordinated debt rating on the company.

The outlook revision reflects improved operating performance
over the past few quarters, resulting in credit protection
measures more in line with the rating.

The ratings on TSA continue to reflect high debt leverage, thin
cash flow protection measures, and intense competition in the
sporting goods retailing industry. These risks are somewhat
mitigated by the company's leading position in the sporting
goods industry.

Ft. Lauderdale, Fla.-based TSA is the largest full line sporting
goods retailer in the U.S., operating 198 superstores in 32
states. After three years of very weak operating performance,
TSA's focus on turning around its operations has resulted in a
reversal of negative sales trends and improved profit margins.
The company reported positive comparable-store sales of 1.8% and
an EBITDA increase of 73% to $67 million in fiscal 2000. Lease-
adjusted operating margin recovered to 11.4% in fiscal 2000 from
7.8% in fiscal 1999, reflecting improved merchandising and
better operating efficiency. Despite this recent positive
performance, TSA faces a difficult retail environment and
expects a mid-single-digit decline in comparable-store sales for
the first half of fiscal 2001. Standard & Poor's expects
profitability will remain relatively stable as TSA continues to
control expenses and manage inventory in line with sales trend.

Lease-adjusted EBITDA interest coverage improved to 1.9 times
(x) in fiscal 2000 as cash flow from operations increased. TSA
has repurchased most of its convertible subordinated notes due
September 2001, leaving only $13 million of notes outstanding.
However, the repurchases were completed with borrowings against
the $335 million revolving credit facility, and the company
remains highly leveraged, with total lease-adjusted debt to
EBITDA at about 5.3x. Capital spending is limited, as TSA does
not plan on any new store openings in 2001. The company is
currently focused on its existing store base and expects to
spend about $15 million to $18 million in 2001, primarily for
store remodeling. Liquidity is adequate, with more than $100
million of borrowing availability under the credit facility.

                    Outlook: Stable

Standard & Poor's believes TSA has stabilized its operations
through initiatives undertaken in recent years. Despite a
challenging retail environment, the company's continued focus on
cost control and merchandising should allow it to maintain a
credit profile appropriate for the rating.


STELLEX TECHNOLOGIES: Creditors To Own 95% Stake Of New Company
---------------------------------------------------------------
Stellex Technologies Inc. won court approval Thursday for a
disclosure statement that would turn 95 percent of the new
company over to its bank lending group, according to The Daily
Deal. Creditors will vote on the plan. The company hopes to
emerge from chapter 11 bankruptcy as a scaled-down maker of
aerospace parts. A group of 17 banks including First Union
Commercial Corp. and Lehman Commercial Paper Inc. would turn
their $132 million in existing secured claims into a 95 percent
ownership stake via newly issued common stock under the plan,
reported The Daily Deal. The bank group has agreed to provide
$35 million in exit financing if Stellex emerges from chapter
11. (ABI World, July 13, 2001)


US AIRWAYS: Low-B Ratings Remain On Credit Watch
------------------------------------------------
US Airways Group Inc. and UAL Corp. have asked the Department of
Justice to rule on the companies' proposed merger within 21
days. Standard & Poor's ratings for US Airways Group and
subsidiary US Airways Inc. remain on CreditWatch with developing
implications.  US Airways Group previously rejected UAL's
proposal to terminate their merger agreement, and the timing of
the request to the Department of Justice would lead to a
response before UAL is contractually permitted to end the merger
agreement unilaterally. The airlines had agreed earlier with the
Department of Justice that they would not seek to complete a
merger without 21-day advance notice.

UAL and US Airways Group previously had indicated that they
believed the chances of receiving approval for their merger were
not favorable, and that estimate still appears realistic. In
addition, the only merger agreement that has been fully
documented is the original May 2000 proposal, though there are
binding term sheets among the two airlines and others relating
to the revised merger proposal announced January 2001, which
includes participation by AMR Corp. Accordingly, the Department
of Justice might rule on the original merger proposal or request
more information on the revised proposal. If the revised merger
proposal is approved with further changes, then the current $60
per share ($4.3 billion) price for US Airways might not be
applicable.

Standard & Poor's will resolve the CreditWatch when the fate of
the merger proposal becomes clear.

Ratings Still On CreditWatch With Developing Implications

                                                   Ratings
      US Airways Group Inc.
         Corporate credit rating                        B

      US Airways Inc.
         Corporate credit rating                        B
         Senior secured debt                            B
         Bank loan rating                               B+
         Equipment trust certificates                   BB-


USG CORPORATION: Honoring Prepetition Warehouse Charges
-------------------------------------------------------
The USG Corporation Debtors use the services of various third-
party warehouses in addition to their own on-site storage
facilities. The Debtors estimate the Warehouses are owed less
than $250,000 in prepetition storage charges.

Without payment, the Warehouses may not release goods and
materials held by them. The goods and merchandise held by these
Warehouses may also be subject to possessory liens under state
law. Usually state laws grant an entity that has supplied
services of materials with respect to goods a possessory lien on
such goods to secure payment for charges and related expenses,
if that entity retains possession of the goods at issue. To
preserve their lien rights, the Warehouses may not release goods
held by them. The Debtors' operations would be disrupted when
the Debtors are trying to stabilize their businesses.

The Debtors seek authority to pay undisputed amounts owed by
Debtors on the account of outstanding Warehouse Charges and
discharge any liens that the Warehouses may have on the Debtors'
property. It is likely that the amounts owed to the Warehouses
are far less than the property value of any item securing
Warehouse Charges, so it is also likely the Warehouses are fully
secured creditors. As such, the Warehouses are entitled to
receive payment in full for prepetition claims pursuant to any
accepted plan of reorganization, as well as any postpetition
interest accruing up to the excess value of the secured
creditors' collateral. Payment of the Warehouse Charges
Will give the Warehouses what they will be entitled to under a
plan of reorganization, and will save the Debtors interest costs
That may accrue during these bankruptcy cases. (USG Bankruptcy
News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


VERADO HOLDINGS: Falls Short Of Nasdaq's Listing Requirement
------------------------------------------------------------
Verado Holdings, Inc. (Nasdaq: VRDO), a provider of outsourced
managed hosting, professional services and data center
solutions, has received a Nasdaq Staff Determination that it has
not maintained compliance with the minimum bid price requirement
for continued listing set forth in Marketplace Rule 4450(b)(4)
and that its common stock is, therefore, subject to delisting
from the Nasdaq National Market.

Verado will request a hearing before a Nasdaq Listing
Qualifications Panel to appeal the Staff Determination. After
receiving the request, Verado anticipates that Nasdaq will grant
Verado a hearing within approximately 45 days. Verado's stock
will continue to trade on Nasdaq until after the hearing when
the Panel makes a determination. The Company remains in a strong
financial position. Verado's Nasdaq listing status in no way
effects its customer base, its concierge level of customer
service or its ability to execute and grow the business.

                       About Verado

Verado Holdings, Inc., headquartered in Denver, Colorado, is a
provider of outsourced managed and professional services and
data center solutions for businesses. Verado's state-of-the-art
data centers host, monitor and maintain mission-critical Web
sites, e-commerce platforms and business applications. Verado
currently operates data centers in Denver, Dallas, Houston,
Portland, Santa Clara, Irvine, San Diego, and Salt Lake City.
The data centers comprise approximately 240,000 square feet of
space. For more information, visit Verado's Web site at
http://www.verado.com


WARNACO: US Trustee Appoints Unsecured Creditors' Committee
-----------------------------------------------------------
The United States Trustee appoints these nine unsecured
claimants to the Official Committee of Unsecured Creditors in
The Warnaco Group, Inc.'s Chapter 11 cases:

            Milliken & Company
            1045 Sixth Avenue
            New York, New York 10018
            Attn: Dennis M. Golden
            Tele: (212) 819-4200

            Charbert NFA Corp.
            299 Church Street
            Alton, Rhode Island 02894
            Tele: (617) 968-0219
            Attn: Maria L. Ancona

            Liberty Fabrics, Inc.
            13441 Liberty Lane
            Gordonsville, Virginia 22942
            Attn: Rich Hubbard

            Galey & Lord Industries, Inc.
            980 Avenue of the Americas
            New York, New York 10018
            Attn: William Christensen

            Elastic Corp. of America, Inc.
            P.O. Box 2189
            Hickory, North Carolina 28603
            Attn: Mitchell R. Setzer

            United Parcel Service (UPS)
            c/o Dun & Bradstreet RMS Bankruptcy Services
            9690 Deereco Road, Suite 200
            Timonium, Maryland 21093
            Attn: Steven D. Sass, Esq.
            Tele: (410) 453-6539

            Systech Solutions, Inc.
            550 N. Brand Blvd., #1200
            Glendale, California 91203
            Attn: Sundara Rajan

            Pension Benefit Guaranty Corporation
            Office of the General Counsel
            1200 K. Street, N.W., Suite 340
            Washington, D.C. 20006-4026
            Attn: John R. Paliga or Jason E. Wolf, Esqs.
            Tele: (202) 326-4202 Ext. 3965

            The Bank of New York Corporate Trust Administration
            101 Barclay Street, 21 W
            New York, New York 10286
            Attn: Romano I. Peluso

Assistant United States Trustee Mary Elizabeth Tom is the
attorney assigned to the Debtors' cases. (Warnaco Bankruptcy
News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


WASHINGTON GROUP: G.M. Stricklin Now Heads Infrastructure Unit
--------------------------------------------------------------
Washington Group International, Inc. said that G.M. "Pat"
Stricklin, a 34-year veteran of the engineering and construction
industry, has joined the company as President and Chief
Executive Officer of the Washington Infrastructure operating
unit.

He replaces Roger J. Ludlam, who is leaving the company.

Stricklin formerly served as President of the Design/Build
Division of Flatiron Structures Company and, prior to joining
Flatiron, worked for Washington Group from 1967 to 1994. His
last assignment for Washington Group was as Manager of
Construction of the $2.7 billion Denver International Airport.

"I am delighted to welcome Pat Stricklin back to our company,"
said Stephen G. Hanks, Washington Group President and Chief
Executive Officer. "He served our company well for 27 years and
he has a record of success that ranks him as one of the
engineering and construction industry's outstanding executives."

During construction of the Denver International Airport,
Stricklin led a 700-person program-management team and directed
the efforts of more than 100 design consulting firms, and 130
construction contractors.

While at Flatiron Structures, he served as President of the
design/build joint venture, and project manager, on the $780
million Eastern Toll Road in California's Orange County, and
served as Principal-in-Charge on the Foothill Transportation
Corridor-South, also in Orange County.

"This opportunity to return to my roots and lead one of the best
civil-construction organizations in the country was too good to
pass up," said Stricklin. "There is a massive worldwide demand
for infrastructure construction and Washington Group has the
people and the resolve to be a major player in this market."

As President of Flatiron's Design/Build Division, Stricklin was
responsible for all of the company's design/build and
construction-management projects in the United States.

Stricklin graduated from Texas Tech University with a degree in
civil engineering and completed Stanford University's
Construction Executive Program.

"On behalf of Washington Group's management team, I want to
thank Roger Ludlam for his service to the company," said Hanks.
"He led our Infrastructure unit through some of the most
difficult and challenging times in our company's history."

In a related matter, Hanks said Roy Wilkes, executive vice
president of the company's Mining Division, will now report to
Vince Kontny, Senior Executive Vice President & Chief Operating
Officer. Wilkes had previously reported to Ludlam.

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

                     Markets Served

Heavy civil, energy, environmental, government, industrial,
mining, nuclear services, operations and maintenance, petroleum
and chemicals, process, pulp and paper, telecommunications,
transportation, and water resources.


WEBVAN GROUP: Files Chapter 11 Petition in Wilmington
-----------------------------------------------------
Webvan Group, Inc. has filed for protection from its creditors
under Chapter 11 of the U.S. Bankruptcy Code. The filing was
made this afternoon in the U.S. Bankruptcy Court in the District
of Delaware. The case was assigned case numbers: Webvan Group
01-2404; Webvan Operations 01-2405; HomeGrocer.com 01-2406;
Webvan Bay Area Inc. 01-2407.

Webvan ceased all commercial operations on Monday, July 9. The
company plans an orderly sale of its business and assets. Webvan
is incorporated in the State of Delaware. The company's
corporate offices are located in Foster City, Calif.


WINSTAR: Landlords Object To Extension Of Lease Decision Period
---------------------------------------------------------------
Several landlords object to Winstar Communications, Inc.'s
motion for an extension of time to decide whether or not to
assume or to reject certain unexpired leases of non-residential
real property:


     (A) TST Woodland, LLC and TST Waterview Funding, LLC

The Debtors and TST entered into a lease with a design and
construction agreement on August 1999.  The lease calls for
Wireless to act expeditiously and in good faith with TST
engineers, architects, and others to complete:

        (1) all drawings and specifications; and

        (2) certain base building work and initial installations.

But Thomas G. Macauley, Esq., at Zuckerman Spaeder, in
Wilmington, Delaware, notes the Debtors failed to do comply with
these requirements.  Mr. Macauley adds that Wireless was also
unable to procure, maintain and comply with the terms and
conditions of all licenses and permits required for the lawful
conduct of the permitted uses in the premises.

Mr. Macauley relates that:

       (a) The TST lease relates to a 400,000 square foot
           $90,000,000 building constructed specifically for
           Wireless.

       (b) Wireless does not occupy the space under the lease;

       (c) Wireless is paying no rent whatsoever to TST at this
           time;

       (d) Wireless has already rejected a less expensive lease
           in a smaller building adjacent to a building it
           already occupies in the same development as this
           lease.

       (e) Wireless has no conceivable need for the premises
           covered by the lease.

       (f) The rent due under the lease will commence on October
           1, 2001, but at an above-market rate.

       (g) The commercial real estate market in Northern Virginia
           is rapidly deteriorating and each day of delay in
           TST's ability to re-lease the space and mitigate its
           damages causes irreparable harm to TST.

TST asks Judge Farnan to deny the Debtors' motion and enter an
order rejecting the lease effective immediately.  If not, Mr.
Macauley warns, TST will have a huge damage claim for breach and
an even larger administrative priority claim if rent is not paid
when due.  Mr. Macauley notes that TST will also be irreparably
prejudiced because it is unable to rent the premises to another
tenant while Wireless is still a party to the lease.

Mr. Macauley further argues that the lease must be rejected
since Wireless failed to satisfy construction obligations of the
Design and Construction Agreement, and violated other terms and
conditions of the lease.  Besides, Mr. Macauley notes, the lease
is not necessary to the ongoing operations of Wireless.
Wireless was scheduled to take possession of the building this
October 1, 2001.  But, Mr. Macauley says, the takeover can't
take place since Wireless failed to perform its construction
obligations.  Therefore, Mr. Macauley concluded, there is no
need to give Wireless further time to consider the assumption or
rejection of the TST lease.


     (B) Riggs & Company

Riggs & Company, a division of Riggs Bank N. A., is a trustee
for the Multi-Employer Property Trust that owns certain
commercial buildings. Riggs and Winstar Wireless has a Master
Telecommunications Agreement (MTA) dated December 2000 and
license agreements for each 17 different properties.  The
license agreements grant Wireless the right to install and
operate the Wireless' rooftop antennas on the licensed
properties to provide telecommunications services.  Riggs wants
to ensure that its tenants are provided with telecommunications
services.  But if the Court grants this motion, Riggs will not
be able to provide its tenants with telecommunications services.

David L. Finger, Esq., in Wilmington Delaware, argues that the
Debtors do not need an extension of time because the Debtors
have already decided whether they wish to accept or reject the
license agreements. In fact, Mr. Finger says, the Debtors have
already advised Riggs and other landlords of their intentions.
But it was not made clear if the Debtors' "decision" was to
reject or assume the license agreements with Riggs.  Mr. Finger
only notes that a shorter extension than the four months
requested would be much more appropriate.  Four months extension
is excessive and unduly burdensome on Riggs and other landlords,
Mr. Finger contends, because it would limit Riggs' ability to
find alternative service providers.  Mr. Finger relates that the
license agreements require that Riggs' reserve space for
Wireless to install its telecommunications equipment.  If the
Debtors' requested relief was for a shorter period, Mr. Finger
notes, the impact on Riggs' and its tenants would be minimized
while still enabling the Debtors to evaluate their options.

Mr. Finger adds that the Debtors' post-petition obligations
should also be met before any extension of time is granted.
According to Mr. Finger, the Debtors have not paid the license
fees for 1660 International Drive, McClean, Virginia 22102
pursuant to the license agreement for that property.  The
license fee due for that property is $1,620.


     (C) 1710 Broadway Inc.

Broadway, as licensor, and Winstar Wireless, as licensee, are
parties to a Site License Agreement dated September 1999 for the
right to use equipment space and pathways located in the
property known as 275 Seventh Avenue in New York, New York.

Contrary to the Debtors' claim, Julianne E. Hammond, Esq., at
Blank Rome Comisky & McCauley, in Wilmington, Delaware, says the
Debtors are not complying with all their post-petition
obligations to Broadway. Since Petition Date, Ms. Hammond notes,
the Debtors owe $12,129.77 in license fees to Broadway.  The
Debtors have made only partial payments of the post-petition
amounts due pursuant to the Agreement:

   Period               Amount Due     Amount Paid       Deficit
   ------               ----------     -----------       -------
   April 2001 (13 days)  $4,408.82             $0       $4,408.82
   May 2001              10,849.33          6,695        4,154.33
   June 2001             10,261.62          6,695        3,566.62
                        ----------        -------      ----------
        Total           $25,519.77        $13,390      $12,129.77

Because of this failure to fulfill their post-petition
obligations, Ms. Hammond argues, the Debtors are not entitled to
the relief requested.

Broadway asks Judge Farnan to deny the Debtors motion and
require the Debtors to immediately pay Broadway $12,129.77,
representing the unpaid post-petition lease obligations.


     (D) Semicon Business Park, Ltd.

Semicon Business Park, Ltd., is a Texas limited partnership, a
successor-in-interest to Brock Spavinaw Partership, Ltd., and a
party-in-interest in these cases.

According to William E. Taylor, Jr., Esq., at Elzufon Austin
Reardon Tarlov & Mondell, in Wilmington, Delaware, Semicon is
the owner of improved real property where Winstar Wireless has
leased space under a lease agreement dated May 1999 between
Brock Spavinaw Partnership, as landlord, and Wireless, as
tenant.  Mr. Taylor informs the Court that the lease covers
11,850 square feet of rentable space at the Semicon Business
Park located at 3012 Montopolis Drive, Building 3 in Austin,
Texas 78741.

Mr. Taylor disagrees with the Debtors that Semicon will not
suffer harm as a result of an extension of the deadline.  Mr.
Taylor discloses there are two parties interested in leasing the
space occupied by the Debtors despite the fact that the office
space rental market has been softening in Austin, Texas.  Now,
Semicon wants to secure the lease of this space on a long-term
basis.  But Semicon can't start negotiating with other
interested parties unless the Debtors come up with a definite
decision whether to assume or reject the lease.

Semicon asks Judge Farnan to deny the Debtors' motion because
they believe that the delay will impose an economic hardship on
them.


     (E) Plaza Towers

Plaza Towers is the lessor to certain nonresidential real
property located at 555 Capitol Mall, Suite 445 in Sacramento,
California. Under the lease, the Debtors are obligated to pay a
monthly rent of $3,500.  Since Petition Date, Plaza Towers has
received only one payment in the amount of $3,500.  R. Karl
Hill, Esq., at Seitz Van Ogtrop & Green, in Wilmington,
Delaware, says this is hardly consistent with the Debtors' claim
that they are complying with all of their post-petition
obligations.  As of the filing of this response, Mr. Hill
reveals, the Debtors owes Plaza Towers $5,600 in post-petition
rent obligations.

Plaza Towers ask Judge Farnan to compel the Debtors to honor
their obligations irrespective of any extension of time.  The
Court should also condition any extension of time on the
Debtors' agreement to pay the lease obligations as they come due
until such time as the Debtors assume or reject the lease, they
add.


     (F) SV Atlanta Peachtree Limited Partnership

SV Atlanta Peachtree Limited Partnership is a Texas limited
partnership, as assignee of TCB #4, LLC, a Delaware limited
liability company, as successor to 34 Peachtree Associates LP.

Stephen C. Greenberg, Esq., at Holt Ney Zatcoff & Wasserman, in
Atlanta, Georgia, relates SV Atlanta Peachtree and Winstar
Telecommunications are parties to a lease of nonresidential
property dated January 1997.  The Debtors lease and occupy an
office space, rooftop, and basement areas in an office building
known as One Park Tower at 34 Peachtree Street, N.W., Atlanta,
Georgia.

SV Atlanta Peachtree asks Judge Farnan to deny the Debtors'
motion because the Debtors failed to timely meet all its post-
petition obligations under the lease.  The Debtors owe SV
Atlanta Peachtree:

            Premises          Post-Petition Arrearages
            --------          ------------------------
            Suite 225                 $600.47
            Suite 400                4,553.65
            Suite 500                 (862.80)
            Suite 610/670             (682.85)
            Roof 3                     (70.89)
                                    ---------
               Total Delinquency    $3,537.58


     (G) Knickerbocker Properties, Inc. XXXIII

Knickerbocker Properties' predecessor-in-interest, Tishman
Speyer Market Street Limited Partnership, and the Debtors'
predecessor-in-interest, U.S. One and Communications
Corporation, entered into an office lease dated August 1996.
The premises subject to the lease agreement is located on the
2nd and 15th floors of the building at 525 Market Street in San
Francisco, California.

In October 2000, Knickerbocker and Winstar Wireless amended the
office lease by reducing the size of the premises and modifying
some terms and conditions.

According to David R. Zaro, Esq., at Allen Matkins Leck Gamble &
Mallory, in Los Angeles, California, the Debtors are presently
in default for failure to pay both pre-petition and post-
petition rent. Knickerbocker has made several demands for
payment, but the Debtors only responded in silence.  At present,
the Debtors owe Knickerbocker $21,210.21 for post-petition rent.
As of the hearing date on July 19, 2001, the Debtors will owe a
total of $29,932.71.

Unless the Debtors pay post-petition rent of $29,932.71, Mr.
Zaro argues, the Debtors should be prohibited from extending the
time within which to assume or reject the lease.  Such extension
should be conditioned upon Debtors' continued timely payment of
post-petition rent, Mr. Zaro adds.

Date        Description         Prior to Petition Date - 4/18/01
----        -----------         --------------------------------
10/16/00    Misc. #1128                             $  154.35
01/01/01    Base rent (remaining balance)            1,075.90
01/31/01    Misc. #1215                                692.15
02/01/01    Base rent                                8,399.25
02/01/01    Operating Expenses                          64.25
02/01/01    Taxes                                      225.45
02/26/01    Misc. #1128                                119.62
03/01/01    Base rent                                8,399.25
03/01/01    Operating Expenses                          64.25
03/01/01    Taxes                                      225.45
04/01/01    Base Rent (04/01/01 - 04/17/01)          4,759.58
04/01/01    Operating Expenses (04/01/01 - 04/17/01)    36.41
04/01/01    Taxes (04/01/01 - 04/17/01)                127.76
04/12/01    Misc. Inv. #1266                           692.15
                                                     ----------
                  Total                              $25,035.81

The Debtors were able to pay $5,272.92 last May 4, 2001.  This
partial payment was applied to the Debtors' pre-petition debt,
reducing it to $19,762.89.

Date        Description             April 18, 2001 up to Present
----        -----------             ----------------------------
04/18/01    Base Rent (04/18/01 - 04/30/01)          $3,639.68
04/18/01    Operating Expenses (04/18/01 - 04/30/01)     27.84
04/18/01    Taxes (04/18/01 - 04/30/01)                  97.70
05/01/01    Base Rent                                 8,399.25
05/01/01    Operating Expenses                           97.80
05/01/01    Taxes                                       225.45
06/01/01    Base Rent                                 8,399.25
06/01/01    Operating Expenses                           97.80
06/01/01    Taxes                                       225.45
07/01/01    Base Rent                                 8,399.25
07/01/01    Operating Expenses                           97.80
07/01/01    Taxes                                       225.45
                                                      ----------
                         Total                        $29,932.71

The Debtors actually owe Knickerbockers a total of $49,695.60 in
pre-and post-petition rent obligations.


     (H) JP Plaza Partnership

JP Plaza adds its voice to the rising clamor for the denial of
the Debtors' motion to extend the deadline to decide on lease
dispositions.

JP Plaza and Winstar entered into an Antenna Site Lease
Agreement dated February 2001 wherein Winstar was granted a
license to install and operate certain equipment at a building
owned by JP.

Like the other landlords, JP general partner William S.
Silverman also noted that the Debtors are not complying with its
post-petition obligations under the license agreement.  It has
not paid the license fee payment, which was due on June 1, 2001.

Under the agreement, the annual license fee of $3,600 shall be
paid in equal monthly installments of $300.


     (I) TRI Group

The TRI Group is composed of Centura Tower Ltd, Transcontinental
Realty Investors Inc., Transcontinental Westgrove Inc.,
Continental Jefferson Corporation, Continental Poydras Corp.,
Continental Common Inc., Continental Baronne Inc. IORI Valley
View Inc., Hartford Building Corporation, and IORI Akard Corp.

E. P. Keiffer, Esq., at Hance Scarborough Wright Ginsberg &
Brusilow, in Dallas, Texas, relates the members of the TRI Group
are owners of improved real property where the Debtors have
leased space for the placement of transmission towers.  The TRI
Group is actually agreeable to the extension of the deadline,
provided that the Debtors make their post-petition payments
current on or before the hearing date for the approval of this
motion.

       Building Owner                  Post-Petition Arrearage
       --------------                  -----------------------
       Centura Tower, Ltd.                              $    0
       Transcontinental Realty Investors Inc.            2,450
       Transcontinental Westgrove Inc.                     550
       Continental Jefferson Corporation                   550
       Continental Poydras Corporation                   1,020
       Continental Common Inc.                           1,200
       Continental Baronne Inc.                          1,100
       IORI Valley View Inc.                               450
       Hartford Building Corporation                       700
       IORI Akard Corporation                              450
                                                        ------
                         Total                          $8,470


     (J) Centerpointe Park Partnership 325 L.P.

Centerpointe Park Partnership are landlords to a nonresidential
property leased by the Debtors located at 325 Essjay Road in
Amherst, New York also known as the 325 Centerpointe Corporate
Park, as well as 6 other smaller properties, which the Debtors
lease as antennae substation locations.

According to John D. Mattey, Esq., at Ferry & Joseph, in
Wilmington, Delaware, the landlords will suffer great harm if
the assumption/rejection deadline will be extended because the
Debtors are not complying with all of their post-petition
obligations under the leases.  As of July 1, 2001, the amount
due and remaining unpaid for the post-petition period for all
seven properties is $13,394.40.  The month of April was pro-
rated as 40% post-petition and 60% pre-petition.

                                                Post-Petition
Address                      Lease No.       Amount Due 7/1/01
-------                      ---------       -----------------
325 Centerpointe Corp. Park   0810108            $8,500.00
350 Centerpointe Corp. Park   820200                960.50
Farber Lakes 150 Essjay Road  07701300              610.30
426 Centerpointe Corp. Park   08501200              538.50
400 Centerpointe Corp. Park   0840118               960.50
Cyclorama - 369 Franklin St.  0900105               604.00
Upwood Asso. - 465 Main St.   0980114             1,220.60
                                                  ----------
                         Total                    $13,394.40

Aside from post-petition debts, Mr. Mattey says, the Debtors
also have unpaid pre-petition obligations.

Mr. Mattey argues it would be detrimental to the landlords if
the Debtors will be allowed to continue occupying the premises
without paying its rent obligations.  If the Court grants the
Debtors additional time to decide on the lease dispositions, Mr.
Mattey emphasizes, assurance of protection and remedies must at
least be made to the Landlords.


                         *     *     *

Judge Farnan will convene a hearing on July 19, 2001, to
consider the merits of the Debtors' request and the various
Landlords' objections and to fix a deadline by which lease
disposition decisions must be made.  Winstar Bankruptcy News,
Issue No. 8; Bankruptcy Creditors' Service, Inc., 609/392-0900)


ZEROPLUS.COM: Reports Fourth Quarter And Year-End Losses
--------------------------------------------------------
ZeroPlus.com, Inc. announced results for the fiscal year and
fourth quarter ended March 31, 2001. For the quarter, the
company reported revenues of $652,000, which compared to
revenues of $105,000 in the same quarter last year. Revenues for
the year increased to $1,166,000 from $483,000. The loss for the
quarter was $3,764,000, or $0.36 per share, compared to a loss
of $2,286,000, or $0.22 per share, for the same quarter last
year.

At year-end, the company had current assets of $2.9 million,
composed primarily of cash, cash equivalents and short-term
investments. Other current assets included $66,000 of accounts
receivable, and $217,000 of insurance claim receivable and
prepaid expenses. Current liabilities at the end of the quarter
were $4.7 million.

On June 5, 2001, ZeroPlus.com announced a phased shutdown of
operations and the immediate termination of all services and the
majority of employees. This was done in an effort to conserve
cash while seeking to pursue and consider any possible
alternatives to recapitalize the Company, or to seek value for
the technology and/or relationships through an asset sale,
merger, or other business arrangement. ZeroPlus.com made the
decision to suspend operations after they determined that the
Company no longer had the resources to continue to support the
operating losses we have experienced.

                       About ZeroPlus.com

Prior to June 5, 2001, ZeroPlus.com, Inc. provided Internet
telephony services to consumers worldwide, including free PC-to-
PC services, and fee- based PC-to-phone, phone- to-PC and phone-
to-phone services. The revolutionary aspect of the ZeroPlus
consumer solution is it that customers chose a unique Internet
phone number that can be identical to their home phone number,
except that "0" is the first digit. Therefore, calls made to PCs
are dialed almost identically to calls made to traditional
telephone numbers. ZeroPlus consumer members also received free
instant messaging and text chat. The Company also developed an
e-commerce solution, ZPCommerce that enables companies to voice-
enable their websites. ZeroPlus.com routed calls from customers'
PCs to existing call centers entirely over the Internet, thereby
drastically reducing e-commerce companies' inbound 800-number
service costs.

                            *********

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

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

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

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


                           *********


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

Troubled Company Reporter is a daily newsletter co-published by
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Group, Inc., Washington, DC USA. Debra Brennan, Yvonne L.
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Copyright 2001.  All rights reserved.  ISSN: 1520-9474.

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