TCR_Public/010724.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

              Tuesday, July 24, 2001, Vol. 5, No. 143

                            Headlines

360NETWORKS: Canadian Court Extends CCAA Protection To Dec. 31
ALLIS-CHALMERS: Special Stockholders' Meeting Set For August
AMF BOWLING: Paying Prepetition Common Carrier Claims
BRIDGE INFORMATION: Resolves Euro Broker Contract Damage Claims
BULL RUN: Lenders Agree To Amend And Extend Loan Term

CASUAL MALE: Wins Final Court Nod On $135 Million DIP Financing
COMDISCO INC.: Retains Skadden, Arps As Lead Bankruptcy Counsel
CRESCENT SERVICES: Berens Industries Completes Asset Acquisition
DYERSBURG INC: Judge Gives One Week to Liquidate or Convert Case
EDISON INTERNATIONAL: Posts $102 Million Loss In Q2 2001

EDISON INTERNATIONAL: Board Opts To Forego Q3 Dividend Payment
ETOYS: Seeks Approval to Expand Small-Scale Liquidation Sales
FOAMEX INTERNATIONAL: Deloitte & Touche Replaces PwC As Auditors
FRUIT OF THE LOOM: Opposes Nashville Carpet's Stay Relief Motion
HARNISCHFEGER: Moves To Disallow HEI Receivable After Setoff

HENLEY HEALTHCARE: Discloses it May Have to File for Bankruptcy
HOMEPLACE: Asks Court To Extend Exclusive Period To Sept. 14
I.C. ISAACS: Nasdaq Delists Shares, Now Trades On OTCBB
IMPERIAL SUGAR: Associate Fleet Wants Diamond To Decide On Lease
INTEGRATED HEALTH: Asks Court To Okay Agreements With Officers

KELLSTROM IND.: Securities Exchange Offer Extended to July 31
KRAUSE'S FURNITURE: Files Chapter 11 Petition in C.D. California
LAIDLAW INC.: Moves To Implement A Cross-Border Protocol
LEINER HEALTH: Lenders Grant Debt Forbearance Until August 31
LOEHMANNS HOLDINGS: Postpones Shareholders' Meeting To September

MARINER POST-ACUTE: Rejects Lease & Transfers Wyoming Facility
NEXTWAVE: Wireless Firms Want FCC To Probe Eligibility Question
OWENS CORNING: Seeks Approval Of Hartford Financial Settlement
PACIFIC GAS: Agrees To Provide Solano With Adequate Protection
PATHNET: Judge Converts 3 Bankruptcy Cases To Chapter 7

PAXSON COMMUNICATIONS: Completes $560 Million Refinancing
PHOENIX GOLD: Requests Nasdaq Hearing Regarding Delisting
PLAYDIUM: Plans To File Financial Results After Restructuring
PSINET INC.: Retains McGuireWoods As Special Bankruptcy Counsel
RELIANCE GROUP: Bank Committee Taps White & Case As Counsel

SAFETY-KLEEN: Signs Consent Decree On Divex Superfund Site
TELIGENT INC.: Three Phone Firms Show Interest In Assets
THINKPATH: Asks Nasdaq Panel to Review Delisting Determination
TRISM, INC.: Downsizing Operations To Reduce Costs
UNITEL VIDEO: Asset Sale Proceeds Not Enough To Pay Down Debts

USG CORP.: U.S. Trustee Appoints Unsecured Creditors' Committee
US OFFICE: Sells USRefresh Unit To All Seasons For $23.3 Million
VLASIC FOODS: Employs Towers Perrin As Consultants
W.R. GRACE: Bankruptcy Judge Delays Ruling On Claims Issue
WARNACO INC.: Retains BDO Seidman As Accountants

WEBLINK WIRELESS: Obtains $15 Million DIP Financing
WHEELING-PITTSBURGH: Has Until Jan. 12, 2002 To Decide On Leases
WILLIAMS COMM.: Moody's Cuts Senior Unsecured Rating to Caa1
WINSTAR COMM.: Rejecting 25 Office.com Executory Contracts
YES CLOTHING: NewBridge Capital Holds 88.2% Equity Stake

                            *********

360NETWORKS: Canadian Court Extends CCAA Protection To Dec. 31
--------------------------------------------------------------
360networks said that the Supreme Court of British Columbia has
extended to December 31, 2001 the order providing the company
protection under the Companies' Creditors Arrangement Act
(CCAA).

"We are pleased that our secured lenders and the Canadian court
have approved the extension of our order," said Greg Maffei,
president and chief executive officer of 360networks. "This
extension provides us time to restructure our business plan in
North America and sell key assets outside the United States and
Canada."

Maffei added: "The plan entails constructing and lighting an
optical mesh network in North America and continuing to provide
broadband services to our customers."

The court order includes a cash budget through 2001. At this
time, 360networks does not anticipate needing debtor-in-
possession financing.

                         About 360networks

360networks offers optical network services to
telecommunications and data-centric organizations in North
America. The company's fiber optic network includes terrestrial
segments and undersea cables in North America and South America.

On June 28, 2001, the company and several of its operating
subsidiaries filed for protection under the Companies' Creditors
Arrangement Act (CCAA) in the Supreme Court of British Columbia.
The company's principal U.S. subsidiary, 360networks (USA) inc.
and 22 of its affiliates concurrently filed for protection under
Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy
Court for the Southern District of New York. The company has
also instituted insolvency proceedings in Europe. For more
information about 360networks, visit http://www.360.net


ALLIS-CHALMERS: Special Stockholders' Meeting Set For August
------------------------------------------------------------
Allis-Chalmers Corporation advises its stockholders that, on May
9, 2001, OilQuip Rentals, Inc., an oil and gas equipment rental
company merged into a subsidiary of Allis-Chalmers Corporation.
In the merger, Allis-Chalmers acquired all of the capital stock
of OilQuip. The Company states it believes that the combination
of Allis-Chalmers and OilQuip will allow its business to grow
and generate positive cash flow.

In the merger, all of OilQuip's outstanding common stock was
converted into 400,000 shares of Allis-Chalmers common stock and
the right to receive 9,600,000 shares of Allis-Chalmers common
stock upon the filing of an amendment to its Amended and
Restated Certificate of Incorporation to authorize the issuance
of the shares. There is to be a special meeting, at which the
Company's shareholders will be asked to approve the Amendment.
Once the filing is made the shareholders of OilQuip, prior to
the merger, including Munawar H. Hidayatallah, the President and
Chief Executive Officer of Allis-Chalmers, will own 86.3% of
Allis-Chalmers outstanding common stock.

Accordingly, the Company is inviting shareholders to attend a
special meeting of its stockholders to be held at 10:00 a.m.,
local time, on August __, 2001, at the offices of Swidler Berlin
Shereff Friedman, LLP, 405 Lexington Avenue, 12th Floor, New
York, New York.

At the special meeting, the Company will ask its stockholders
to:

      * Approve and adopt its Amended and Restated Certificate of
        Incorporation;

      * Elect its board of directors to hold office until the
        next annual meeting of stockholders and until the
        election and qualification of their respective
        successors; and

      * Consider and transact such other business as may properly
        come before the special meeting or any adjournment or
        postponement thereof.

Certain of the Company's stockholders, who hold an aggregate of
1,392,351 shares of its common stock, or 70% of its outstanding
common stock, have entered into an agreement and proxy and
appointed Munawar H. Hidayatallah, as his or its irrevocable
proxy to vote all of his or its shares in favor of the approval
and adoption of the Amended and Restated Certificate of
Incorporation and the election of the nominees for director
named in the proxy statement to the Company's board of
directors. Accordingly, the approval and adoption of the Amended
and Restated Certificate of Incorporation and the election of
the nominees for director named in the proxy statement to its
board of directors by its stockholders is expected to occur
irrespective of whether, or the manner in which, stockholders
vote their shares of the Company's common stock.


AMF BOWLING: Paying Prepetition Common Carrier Claims
-----------------------------------------------------
In the ordinary course of their business, AMF Bowling Worldwide,
Inc. uses various common carriers including, but not limited to,
third-party agents and freight forwarders who expedite and
coordinate the Debtors' shipments, as well as certain warehouses
managed by the various operators and warehousers to arrange for
the shipment and storage of their NCPs, MODs and consumer
products.  These goods often need to be shipped from the
Debtors' factories to their customers who are located in the
United States and abroad.  As AMF Products derives substantial
revenue from the sale of NCPs and MODs and consumer products,
the successful shipment of such products to customers and the
safe storage of goods prior to transport is critical to the
Debtors' ability to fill the orders of their customers while
minimizing their risks of loss. The Debtors cannot afford to
have shipments of goods seized, halted, or discarded by the
Common Carriers or the Warehousers, nor can the Debtors halt
their operations in order to attempt to find new service
providers. Any cessation or interruption of the delivery of
goods to customers, Stephen E. Hare, Executive Vice President
and Chief Financial Officer for AMF Bowling Worldwide, Inc.,
warns, would likely result in a deterioration of the Debtors'
businesses and an erosion of the Debtors' value as a leading
distributor of bowling equipment and products.  This Motion is
specifically tailored to avoid such a harsh result.

By Motion, the Debtors sought and obtained Judge Tice's
permission to pay approximately:

       $235,000 to Common Carriers and
        $12,100 to Warehousers

and to discharge the liens, if any, the Common Carriers and
Warehousers have on the goods in their possession.

Dion W. Hayes, Esq., at McGuireWoods, LLP, advises that the
Debtors estimate these $240,000-some payments will allow goods
worth some $650,000 to be released. (AMF Bankruptcy News, Issue
No. 3; Bankruptcy Creditors' Service, Inc., 609/392-0900)


BRIDGE INFORMATION: Resolves Euro Broker Contract Damage Claims
---------------------------------------------------------------
Bridge Information Systems, Inc., Telerate, and one or more of
their respective subsidiaries have long been providing vendor
information and related services to Euro Brokers, Inc. and some
of its affiliates at various office locations in the United
States under various written service contracts.

Euro Brokers terminated all services provided by the Bridge
Parties under the contracts. Likewise, the Bridge Parties also
terminated all services provided to Euro Brokers. But some
Bridge Parties were not too happy about the termination of the
service contracts. The disgruntled Bridge Parties claimed they
are entitled to fees, damages, and costs as a result of the
contract terminations.

To avoid a long-drawn debate, Euro Brokers agrees to pay $25,000
in full settlement of all damages that the Bridge Parties claim
could claim under the Contracts. But this does not mean they
admit any fault, Euro Brokers stresses. Bridge and Telerate, on
behalf of the Bridge Parties, agree to take the money.

Judge McDonald approved the Stipulation in all respects. (Bridge
Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


BULL RUN: Lenders Agree To Amend And Extend Loan Term
-----------------------------------------------------
Bull Run Corporation (Nasdaq: BULL) and its lenders have agreed
to all of the principal terms of an amended and restated bank
credit facility, including an extension of the facility's
maturity date from December 17, 2001 to July 1, 2002. In order
to allow for adequate time to complete documentation, the
lenders have agreed to extend its waiver of all existing events
of default under Bull Run's bank credit facility to July 31,
2001.

Bull Run recently announced that its wholly owned subsidiary,
Host Communications, Inc. (Host), executed an 11-year agreement
with CBS Sports for certain marketing, licensing and media
rights.

Under the agreement, which takes effect in September 2002, HCI
was awarded, among other rights, the

      (a) exclusive right to administer the National Collegiate
Athletic Association (NCAA) Corporate Partner Program;

      (b) exclusive right to produce, distribute and sell NCAA
Championship game programs and publications;

      (c) rights to engage in merchandise licensing utilizing
registered marks of the NCAA and its championships; and

      (d) television rights for certain NCAA Championships that
will not be otherwise aired by CBS or ESPN, and other sports-
related television programming.

Host's contract with CBS will run concurrent with the network's
agreement with the NCAA, which begins with the fall academic
calendar in 2002 and extends through the spring championships
season in 2013. This CBS/Host agreement extends Host's
relationship with the NCAA, which began in 1975 and was
otherwise scheduled to end in 2002.


CASUAL MALE: Wins Final Court Nod On $135 Million DIP Financing
---------------------------------------------------------------
Casual Male Corp. and certain of its subsidiaries, each of which
filed voluntary petitions to reorganize their businesses under
Chapter 11 of the United States Bankruptcy Code on May 18, 2001,
have received final approval from the United States Bankruptcy
Court for the Southern District of New York of a $135 million
debtor-in-possession loan.

The Company announced that Judge Robert E. Gerber approved on a
final basis the $135 million post-petition revolving credit and
term loan facility provided by a lending group led by Fleet
Retail Finance, Inc. and Back Bay Capital Funding LLC. This
facility will provide loans to the Company to fund its ongoing
operations.

Casual Male Corp. and its subsidiaries operate businesses
engaged in the retail sale of apparel through its Casual Male
Big & Tall, Repp Big & Tall and B&T Factory Store businesses,
which offer fashion, casual, dress clothing and footwear to the
big and tall man and through its Work n' Gear subsidiary which
sells a wide selection of workwear, health-care apparel and
uniforms for industry and service businesses. The Company's
businesses offer their merchandise to customers through diverse
selling and marketing channels including retail stores, catalog,
direct selling work forces and e-commerce websites.


COMDISCO INC.: Retains Skadden, Arps As Lead Bankruptcy Counsel
---------------------------------------------------------------
Since 1985, Skadden, Arps, Slate, Meagher & Flom, has performed
episodic transactional work and provided legal advice to the
Debtors on certain corporate, financing, tax and other matters.
Prior to the Petition Date, Comdisco, Inc. sought the services
of Skadden, Arps for advice regarding restructuring matters in
general and preparation for the potential filing of bankruptcy
cases.  Since Skadden, Arps is already familiar with their
business, legal and financial affairs, the Debtors believe that
the firm's continued representation is critical to the success
of their restructuring efforts.  Skadden, Arps' retention will
also save the Debtors the expense of retaining a local counsel
since the firm maintains an office in the Northern District of
Illinois.

Specifically, Comdisco will look to Skadden to:

     (a) advise the Debtors with respect to their powers and
duties as debtors and debtors-in-possession in the continued
management and operation of their business and properties;

     (b) attend meetings and negotiate with representatives of
creditors and other parties-in-interest and advise and consult
on the conduct of the case, including all of the legal and
administrative requirements of operating in Chapter 11;

     (c) advise the Debtors in connection with any contemplated
sales of assets or business combinations, including the
negotiation of asset, stock purchase, merger or join venture
agreements, formulate and implement bidding procedures, evaluate
competing offers, draft appropriate corporate documents with
respect to the proposed sales and counsel the Debtors in
connection with the closing of such sales;

     (d) advise the Debtors in connection with post-petition
financing and cash collateral arrangements and negotiating and
drafting documents relating thereto, provide advice and counsel
with respect to pre-petition financing arrangements, and provide
advice to the Debtors in connection with the emergence financing
and capital structure, and negotiate and draft documents
relating thereto;

     (e) advise the Debtors on matters relating to the evaluation
of the assumption, rejection or assignment of unexpired leases
and executory contracts;

     (f) provide advice to the Debtors with respect to legal
issues arising in or relating to the Debtors' ordinary course of
business including attendance at senior management meetings,
meetings with the Debtors' financial and turnaround advisors and
meetings of the board of directors, and advice on employee,
workers' compensation, employee benefits, labor, tax,
environmental, banking, insurance, securities, corporate,
business operation, contracts, joint ventures, real property,
press/public affairs and regulatory matters, and advise the
Debtors with respect to continuing disclosure and reporting
obligations, if any, under securities laws;

     (g) take all necessary action to protect and preserve the
Debtors' estates, including the prosecution of actions on their
behalf, the defense of any actions commenced against those
estates, negotiations concerning all litigation in which the
Debtors may be involved and objections to claims filed against
the estates;

     (h) prepare on behalf of the Debtors all motions,
applications, answers, orders, reports and papers necessary to
the administration of the estates;

     (i) negotiate and prepare on the Debtors' behalf plan(s) of
reorganization, disclosure statement(s) and all related
agreements and/or documents and take any necessary action on
behalf of the Debtors to obtain confirmation of such plan(s);

     (j) attend meetings with third parties and participate in
negotiations with respect to the Debtors' Chapter 11 cases;

     (k) appear before this Court, any appellate courts, and the
U.S. Trustee, and protect the interests of the Debtors' estates
before such courts and the U.S. Trustee; and

     (l) perform all other necessary legal services and provide
all other necessary legal advice to the Debtors in connection
with these Chapter 11 cases.

John (Jack) Wm. Butler, Jr., Esq., co-leader of Skadden's
worldwide corporate restructuring practice, leads the Debtors'
legal team, assisted by:

        (i) Charles W. Mulaney is a corporate partner
concentrating in mergers and acquisitions, corporate financings,
restructurings, and general corporate governance matters
including advising the Board of Directors;

       (ii) George N. Panagakis is a corporate restructuring
partner and will be a principal case administration engagement
partner in these case;

      (iii) N. Lynn Hiestand is a corporate restructuring
partner, represents buyers and sellers, borrowers and lenders,
debtors and creditors, and financial advisors in a variety of
domestic and international transactions, and will be responsible
for issues involving Comdisco's international operations.

       (iv) Gary P. Cullen is a corporate partner who will be
primarily responsible for potential strategic divestiture
transactions involving the technology services business and the
leasing business.

        (v) L. Byron Vance, III, is a corporate partner who will
be primarily responsible for potential strategic divestiture
transactions involving the technology services business and the
leasing business (together with Mr. Cullen).

       (vi) Seth E. Jacobson works on various sophisticated
financing transactions, including large secured financings and
debt restructuring and will be primarily responsible for
financing matters in these cases.

      (vii) Andre LeDuc is a tax partner who will be responsible
for providing the Debtors with advice on tax matters.

     (viii) Christina M. Tchen is a litigation partner in the
Chicago office and will be primarily responsible for overseeing
litigation issues.

       (ix) Marian P. Wexler is a real estate partner resident in
the Chicago office who will be responsible for leasehold and
real property matters.

Mr. Butler assures Judge Barliant that Skadden is
"disinterested" within the meaning of 11 U.S.C. Sec. 101(14).
Skadden, Mr. Butler says, does not have any connection with the
Debtors or their affiliates, their creditors, the U.S. Trustee
or any person employed in the office of the U.S. Trustee.
Neither do they hold or represent any interest adverse to the
Debtors' estates, Mr. Butler adds.

Mr. Butler disclosed that Skadden has represented, represents
and in the future likely will represent certain creditors of the
Debtors and other parties-in-interest, but only in matters
unrelated to these cases:

     (A) Major Secured Creditors/DLR Lenders: affiliates of
Associated Commercial Corp.; the CIT Group; affiliates of
Deutsche Financial Services Corp.; affiliates of European
American Bank; Fifth Third Bank; affiliates of First Union
National Bank; Great West Life; Heller Financial; affiliates of
Fleet Business Credit Corp.; affiliate of Hitachi Credit;
affiliates of Northwest NA; Olympus America, Inc.; affiliates of
Safeco Credit Corp.; affiliates of TD Asset Finance Corp.;
affiliates of Transamerica Business Credit; affiliates of U.S.
Bancorp Leasing; affiliates of Wachovia Leasing Corp.; and Wells
Fargo Bank.

     (B) Trustees, Largest Holders and Underwriters of the Senior
and Medium Term Notes: Banc America Robertson Stephens,
affiliate of Banc One Capital Markets, Inc.; Bankers Trust
Company; Barclays Capital; Bear, Stearns and Co., Inc.; Brown
Brothers Harriman & Co.; Chase Manhattan Bank; Citibank, N.A.;
Credit Lyonnais Securities; Deutsche Bank Securities; Fuji Bank
and Trust Company; Merrill Lynch & Co.; affiliate of Mellon
Financial Markets, LLC; Morgan Stanley & Co., Inc.; Nationsbanc
Capital Markets, Inc.; Salomon Brothers, Inc. (affiliated with
firm client Citigroup, Inc.); State Street Bank and Trust
Company; affiliate of Suntrust Bank; UBS Securities; and Warburg
Dillon Read, LLC.

     (C) Lenders (who are parties to Credit Agreement dated
December 5, 2000, Amended and Restated Global Credit Agreement
dated December 16, 1996, Master Facility Agreement dated April
28, 2000, Loan and Servicing Agreement dated July 11, 1995 as
amended, Credit Agreement dated December 20, 2000, and Multi-
Option Facility Agreement dated June 4, 1991 as amended): Bank
Hapoalim, B.M.; Bank of America, N.A., formerly known as
NationsBank of Texas, N.A., as well as Nationsbank and other of
its affiliates; Bank of Tokyo-Mitsubishi; Barclays Capital;
Bayerische Hypo-und Vereinsbank; CIBC, Inc.; Citibank, N.A.;
affiliates of Citicorp Investment Bank (The Netherlands) NV;
Credit Agricole Indosuez; Credit Lyonnais; Deutsche Bank AG;
Dresdner Bank AG; First National Bank of Chicago; Fortis Bank;
Fuji Bank; Industrial Bank of Japan; Ing Bank; KBC Bank, N.V.,
affiliates of Mellon Bank, N.A.; National Westminster Bank, PLC;
Royal Bank of Scotland, PLC; Salomon Smith Barney, Inc.; UBS
Securities; Westpac Banking Corp.; and Westdeutsche LB.

     (D) Major Trade Creditors: Cisco Systems; EMC Corp.;
affiliate of GE Medical Systems and Hewlett Packard Co.

     (E) Major Customers: AT&T Solutions/Banc One; Flexitronics
International, Ltd. (Skadden, Arps represents certain insiders);
Ford Motor Company, Inc.; Genuity Solutions, Inc.; affiliate of
Lucent Technologies; Motorola, Inc.; affiliate of NEC
Electronics; Nortel Networks, Inc.; and Southwestern Bell
Telephone Co.

     (F) Largest Ventures Commitments: Corio Inc.

     (G) Major Litigants: Armstrong World Industries; E-Toys;
Furr's Supermarkets, Inc.; and LTV Steel Company.

     (H) Potential Purchasers: Skadden, Arps represents one or
more of the potential purchasers involved in negotiations with
the Debtors in unrelated matters and will make supplemental
disclosures and/or file a supplemental disclosure relating to
such matters prior to any hearing on any sale motion or related
relief.

     (I) Shareholders, Officers, Directors, Employees: Coutts and
Company, affiliated with Lombard & Ulster Facilities Ltd. where
John McNally, Vice-President of Finance and Administration of
Comdisco, Inc., is a director; Hilton Hotels, which is
affiliated with Promus Hotels, Inc. and Embassy Equity
Development Corp., where Norman P. Blake, Jr., chairman and
chief executive officer of Comdisco, Inc., served as chairman of
the board of directors; Owens Corning, Enron Corp. and The St.
Paul Companies, where Norman P. Blake is an outside member of
the board of directors; Thomas H. Patrick, a member of the Board
of Directors of Comdisco, Inc., and Putman Investments, the
record keeper and administrator of the 401K retirement program
for Comdisco, Inc.

     (J) Professionals: Goldman, Sachs & Co. and McKinsey &
Company.

     (I) Other Disclosures: Prior to their retention by the
Debtors, Skadden, Arps' attorneys represented Banc One in
connection with two of Comdisco's non-recourse financings within
the past year, involving loans made by Banc One to Comdisco
secured by equipment leases between Comdisco and Network Plus,
and Comdisco and Samsung.  Skadden, Arps also represents ICG
Communications, Inc., Safety Kleen Services and Service
Merchandise Company, Inc. in their restructuring efforts.  As
part of this representation, Skadden, Arps had previously
represented certain of these entities in contract rejection
claims against Comdisco, Inc.  However, Skadden, Arps is not
currently involved in any such claims.  Skadden, Arps has also
represented 5 U.S. investors in a series of transactions
involving Comdisco, Inc., the most recent was completed in 1995.
Finally, the spouse of David Kolin, one of the Skadden, Arps'
attorneys working on the Debtors' cases, works as an attorney
for XO Communications, formerly known as Nextlink
Communications, where she previously reviewed contracts with
Comdisco.

Skadden, Arps will provide professional services to the Debtors
under its bundled rate schedules:

     Partners                            $445 to $670 per hour
     Counsel and Special Counsel         $415 per hour
     Associates                          $250 to $415 per hour
     Legal assistants and support staff   $80 to $160 per hour

Under an Engagement Agreement, the Debtors paid an initial
retainer of $750,000 for professional services to be rendered
and expenses to be charged by Skadden, Arps.  As of July 15,
2001 the amount of the retainer was $487,103 after all pre-
petition fees, charges and disbursements incurred and posted
were deducted.  For the period of July 16, 2000 through July 15,
2001, the total amount of services billed by Skadden, Arps to
the Debtors in connection with contingency planning was $989,421
with an additional $66,766 in charges and disbursements.  During
the same period, the total amount of all services billed reached
$7,111,455 plus charges and disbursements in the amount of
$440,716 while Skadden, Arps received a total of $8,028,143 from
the Debtors. (Comdisco Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


CRESCENT SERVICES: Berens Industries Completes Asset Acquisition
----------------------------------------------------------------
Berens Industries, Inc. (OTC Bulletin Board: BEII) has closed
the acquisition of certain equipment, business operations and
customer accounts of Crescent Services Corporation, a Houston,
Texas based Internet connectivity provider. BEII will complete a
1:5 reverse stock split of its shares as part of a
recapitalization. Solis Communications, Inc. of Victoria, Texas
will purchase approximately $500,000 in new preferred stock in
BEII, which upon conversion would result in approximately 88%
ownership in BEII.

"Now that the bankruptcy of Crescent Services Corp. is behind
us, we expect to achieve revenues of approximately $2.5-3
million on an annualized basis, approach breakeven and possibly
generate a small profit," stated Jeff Olexa, new President
designee of BEII. "The acquisition by BEII provides us with a
virtually debt free business and a clean slate going forward
where we can build upon the infrastructure that was established
by Crescent over the past several years without the high
overhead and carrying costs." For the six months ending June 30,
2001, Crescent, as a Debtor in Possession, reported approximate
revenues of $890,000 with an estimated loss before interest,
estimated depreciation and taxes of approximately $103,000.
Fully diluted losses were approximately $330,000.

BEII will change its name to Crescent Communications, Inc. and
request a new stock symbol. Marc Ivan Berens will step down as
Chairman and CEO to be replaced by Robert Davis, who will become
Chairman of the Board of Directors and Jeffrey Olexa will become
President/Chief Operating Officer. It is anticipated that BEII's
software development subsidiary, Artmovement, Inc. will be spun
off to BEII shareholders in the near future.

Robert Davis, age 43, is a Victoria, Texas-based entrepreneur
and is currently Chairman and Chief Executive Officer of Solis
Communications, Inc., a Victoria, Texas based Co-location
hosting and connectivity systems company. Mr. Davis received a
BBA in Finance from Texas A&M University in 1980. Mr. Davis is
also involved in the energy industry having founded several
successful companies including, Upland Energy, Inc. in 1985, MPH
Production Co. in 1988, and Laguna Rig Service, Inc. in 1999.
Jeff Olexa, age 41, has 18 years of technical and consulting
experience in the Telecommunications and Internet industries.
Mr. Olexa has most recently served as Sr. VP of Sales for
Crescent Services Corporation. Mr. Olexa was previously employed
with National Business Group, a nation-wide integration company
where he served as Director of Sales over the Central Region. In
this capacity Mr. Olexa was responsible for assisting the
overall growth of the company to approximately $40 million in
sales and the Central region from a startup region to over $6
million in annual revenue. Mr. Olexa had full profit and loss
responsibility for the Central Region. Mr. Olexa has also been
employed at Codex Motorola, CXR Telecom in varying capacities.
Also, prior to his commercial experience, Mr. Olexa was in the
armed forces where he maintained an Air Force telecommunications
facility. This facility utilized wireless communications,
including line-of-site microwave communications, employing
tropospheric scatter technology, between Greece, Turkey and
Italy.

                 About Berens Industries, Inc.

Berens Industries is pioneering the development of streaming
application servers that are deployable as rent-based solutions
hosted and co-marketed by leaders in the Application Service
Provider (ASP) industry. Product lines provide bundled packages
of managed servers, global connectivity, scaleable bandwidth,
applications, and transactional systems. Ongoing research and
development is being conducted to deliver streaming application
servers that bind relational databases and transactional systems
with interactive streaming media.

       About Crescent Communications dba Crescent Broadband

Crescent is a broadband network service provider (NSP), focused
on the small business (one-100 employees), mid-tier business
(100-1000 employees), Multi-tenant Unit (MTU) and Multi-Dwelling
Units (MDU). Crescent provides fixed broadband wireless, xDSL,
ATM and traditional technologies using several network partners
such as Level (3), SBC Communications and IP Communications,
connecting enterprises to the Internet at speeds ranging from
128Kbps to 155 Mbps. The Company also provides application
hosting/delivery, managed VPN's (Virtual Private Networks) and
Managed Firewall services from its ATM core backbone network.


DYERSBURG INC: Judge Gives One Week to Liquidate or Convert Case
----------------------------------------------------------------
Judge Mary F. Walrath of the U.S. Bankruptcy Court in
Wilmington, Del. gave Dyersburg Inc. one week to decide whether
to pursue a chapter 11 liquidation reorganization plan or
convert to a chapter 7 plan, Dow Jones reported. Judge Walrath
issued the ultimatum after learning the company couldn't pay
administrative expenses, is in default of its debtor-in-
possession (DIP) financing agreement and is about to run out of
its financing. She also ordered the company to provide the court
with reports of the status of all unpaid administrative claims
and its cash position.

Dyersburg has until 5 p.m. on Thursday to submit a liquidation
plan to which both its lenders and the committee of unsecured
creditors consent. If a plan is not submitted, the U.S. Trustee
will convert the case to chapter 7. Until the Thursday deadline,
the banks will continue funding the holding company and collect
its receivables as compensation. Dyersburg is allowed to conduct
business as usual but has agreed not to sell any of its fixed
assets. The Charlotte, N.C.-based Dyersburg filed for chapter 11
bankruptcy protection on Sept. 25, listing assets of $314.9
million and liabilities of $234.8 million as of July 1. (ABI
World, July 20, 2001)


EDISON INTERNATIONAL: Posts $102 Million Loss In Q2 2001
--------------------------------------------------------
Edison International (NYSE: EIX) reported a loss of $102
million, or 31 cents per share, for the second quarter of 2001.
These results include an after-tax operating loss of $63
million, or 19 cents per share, reflecting unrecovered
generation-related costs at the company's regulated utility,
Southern California Edison (SCE), and a one-time adjustment at
Edison Enterprises (EE), the company's retail subsidiary.

In the second quarter of 2001, Edison Enterprises incurred a
one-time, after-tax adjustment against earnings of $117 million,
or 36 cents per share, reflecting the anticipated sales of
Edison Select and Edison Source. Edison Enterprises has entered
into an agreement to sell Edison Select to ADT Security
Services. This transaction is expected to close in August 2001.
Edison Source has signed a letter of intent to sell
substantially all of its assets to the current management of
Edison Source.

On an operating basis, excluding the one-time adjustment against
earnings at Edison Enterprises, earnings at Edison International
were $16 million, or five cents per share, for the second
quarter of 2001.

SCE's earnings in the second quarter decreased by $128 million.
The decrease was primarily attributable to $63 million of
unrecovered generation-related power costs from SCE-owned
generation and qualifying facilities (QF) contracts, an outage
at San Onofre Nuclear Generating Station (SONGS) Unit 3 and
lower kilowatt-hour sales.

The $19 million increase at Edison Mission Energy reflects
higher energy prices for EME's U.S. projects and increased
earnings from oil and gas activities, partially offset by lower
power pool prices in the United Kingdom and higher interest
expense.

Edison Capital's decrease of $16 million was due to lower
revenues from leveraged leases and affordable housing and the
impact of the termination of the Fiddler's Ferry/Ferrybridge
financing. The decrease was partially offset by a net gain on
asset sales.

Excluding the one-time adjustment reflecting the anticipated
sales of Edison Select and Edison Source, the increase of $3
million at Edison Enterprises and the parent company was
primarily the result of improved operating performance at Edison
Enterprises, partially offset by higher interest expense at the
parent company.

               Year-to-Date Earning Summary

Edison International recorded a loss of $719 million on a
reported basis, year-to-date. The loss for the six-month period
includes SCE's unrecovered generation-related power costs in the
first half of 2001 totaling $724 million, and Edison
Enterprises' one-time adjustment of $117 million reflecting the
anticipated sales of Edison Select and Edison Source. Excluding
the one-time adjustment at Edison Enterprises, Edison
International incurred a loss of $602 million for the six-month
period ended June 30, 2001, compared with earnings of $247
million for the same period last year.

Compared to the same period in the prior year, SCE's earnings in
the first half of 2001 decreased by $840 million, including a
loss of $724 million for unrecovered generation-related costs,
earnings from Edison Mission Energy increased by $40 million and
earnings from Edison Capital decreased by $41 million.
Explanations for variations in earnings are consistent with the
descriptions provided in the quarterly analysis above.

Excluding Edison Enterprises' one-time adjustment, the decrease
of $7 million for Edison Enterprises and the parent company was
primarily the result of higher interest expense at the parent
company and a gain on the sale of marketable securities in the
first quarter of 2000, partially offset by improved operating
performance at Edison Enterprises.

           Twelve Months Ended Earnings Summary

For the twelve months ended June 30, 2001, Edison International
recorded a loss of $2.9 billion on a reported basis. The net
loss for the twelve-month period included a write-off at SCE of
$2.5 billion of generation-related regulatory assets in the
fourth quarter of 2000, the operating losses for SCE's
unrecovered generation-related costs totaling $724 million in
the first half of 2001, and the one-time adjustment at Edison
Enterprises regarding the anticipated sales of Edison Select and
Edison Source for $117 million. Excluding these items and the
one-time adjustments in the prior period for a tax benefit at
SCE and the closing of five Edison Enterprises businesses in
1999, Edison International earned $454 million for the twelve
months ended June 30, 2001, compared with earnings of $606
million for the same period last year.

Excluding the one-time tax benefit in December 1999, SCE
incurred a loss of $2.9 billion for the twelve months ended June
30, 2001, compared with $556 million for the same period ended
June 30, 2000. The decrease of $3.4 billion primarily reflects a
write-off of $2.5 of generation-related regulatory assets in the
fourth quarter of 2000, unrecovered generation-related costs of
$724 million, higher interest expense and the outage at SONGS 3,
partially offset by lower operating and maintenance costs.

EME reported earnings of $165 million for the twelve-month
period, up $115 million from the same period last year. The
increase was primarily due to higher energy prices from U.S.
projects and phantom stock option plan adjustments. The increase
was partially offset by lower power pool prices in the United
Kingdom, certain tax benefits related to the sale of a portion
of EME's interest in Four Star Oil & Gas and higher interest
expense.

Edison Capital contributed $94 million for the twelve-month
period compared to $132 million from the same period last year.
The decrease was mainly the result of lower earnings from
leveraged leases and affordable housing, combined with the
impact of the termination of the Fiddler's Ferry/Ferrybridge
financing and higher net interest expense, partially offset by
the net gain on asset sales.

Excluding the one-time adjustments at Edison Enterprises for the
anticipated sales of Edison Select and Edison Source in 2001 and
the closing of five businesses in December 1999, Edison
Enterprises and the parent company recorded a $161 million loss
for the twelve months ended June 30, 2001, compared to a $131
million loss in the same period last year. Increased interest
expense at the parent company and a first quarter 2000 gain on
sale of marketable securities were partially offset by improved
operating performance at Edison Enterprises.

Based in Rosemead, Calif., Edison International is the parent
company of Southern California Edison, Edison Mission Energy,
Edison Capital, Edison O&M Services, and Edison Enterprises.


EDISON INTERNATIONAL: Board Opts To Forego Q3 Dividend Payment
--------------------------------------------------------------
The board of directors of Edison International (NYSE: EIX) voted
to eliminate payment of the third-quarter dividend on its common
stock that customarily would have been paid on Oct. 31, 2001,
because of financial conditions created by California's ongoing
energy crisis.

In addition, Edison International's electric utility subsidiary
Southern California Edison Company (SCE) announced that its
board of directors decided today to defer the quarterly
dividends on SCE's 4.08%, 4.24%, and 4.78% series of cumulative
preferred stock that would have been payable on August 31, 2001,
on SCE's 4.32% series of cumulative preferred stock, and its
6.05%, and 6.45% series of $100 cumulative preferred stock that
would have been payable on September 30, 2001, and on SCE's
7.23% series of $100 cumulative preferred stock that would have
been payable on October 31, 2001.

The SCE board also decided to continue the previous deferral of
quarterly dividends on its preferred stock payable on and after
February 28, 2001.


ETOYS: Seeks Approval to Expand Small-Scale Liquidation Sales
-------------------------------------------------------------
Defunct eToys Inc. disclosed it will try to sell its remaining
assets through small-scale public liquidation sales and will ask
a bankruptcy court for greater flexibility on the issue,
according to Dow Jones. etoys will also ask the court to bar
other parties from filing chapter 11 plans in its case for
another four months, giving it more time to put together a
liquidation plan. The former Los Angeles-based Internet company
said that after "exhaustive efforts" to sell its remaining
inventory, furniture, fixtures and equipment in traditional
large-scale transactions, it and its unsecured creditors'
committee believe small-scale public liquidation sales are more
likely to maximize the recovery for its creditors.

eToys has requested that the court modify a prior sale-
procedures order that authorizes the company to enter into sale
transactions involving $35,000 or less. The order requires the
company to provide notice of the sale and to obtain court
approval prior to consummation of the deal. Under the proposed
modified procedures, eToys would be allowed to enter into sale
transactions involving transfers of less than $10,000 without
having to provide notice or court approval of the sale. The
company would be able to enter into transactions involving
transfers of between $10,000 and $100,000 pursuant to the
previously approved procedures. (ABI World, July 20, 2001)


FOAMEX INTERNATIONAL: Deloitte & Touche Replaces PwC As Auditors
----------------------------------------------------------------
Foamex International Inc. (Nasdaq:FMXI), the leading
manufacturer of flexible polyurethane and advanced polymer foam
products, reports that the audit committee of its Board of
Directors recommended, and the Board of Directors approved, the
appointment of Deloitte & Touche LLP as independent auditors for
2001. Deloitte & Touche LLP replaces PricewaterhouseCoopers LLP,
who resigned on June 28, 2001.

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


FRUIT OF THE LOOM: Opposes Nashville Carpet's Stay Relief Motion
----------------------------------------------------------------
Fruit of the Loom objects to Nashville Carpet Center's request
for relief from the automatic stay. According to FTL, NCC does
not hold a validly perfected security interest in property of
the estates and also has failed to establish sufficient grounds
for relief.

Prior to the petition date, NCC furnished labor and materials to
Fruit of the Loom in connection with the installation of carpet
at the Bowling Green, Kentucky operational headquarters. The
property is owned by the county of Warren, Kentucky, as set
forth in the deed to the property. This building houses Fruit of
the Loom's worldwide operational headquarters, where its chief
financial officer and chief operating officer have their
offices. Fruit of the Loom employs approximately 500 people at
the property and there are no readily available alternate sites
for these offices.

Warren County, as owner/lessor, leases the property to Fruit of
the Loom as lessee/tenant, pursuant to a lease agreement dated
December 15, 1987. The agreement contains certain tax-exempt
financing arrangements. On December 1, 1982, Warren County
issued $7,650,000 principal amount of 1982 series A Industrial
Building Revenue Bonds to provide tax-exempt financing for the
construction of buildings and improvements at the property. In
1987, in order to redeem the 1982 series A notes, Warren County
issued $7,640,000 in principal amount of 1987 series A
Industrial Building Revenue Bonds. Accordingly, the parties
entered into the Warren Property Lease, pursuant to which Fruit
of the Loom currently holds a leasehold
interest in the property.

NCC asserts that it is owed an aggregate of $209,235.60, plus
accrued and accruing interest, fees and costs in respect of the
prepetition carpet project. NCC has asserted a mechanic's lien
under applicable Kentucky law on account of this claim against
the property-not Fruit of the Loom's leasehold interest therein.
NCC filed the motion seeking relief from the automatic stay to
"allow the parties to promptly and efficiently litigate [the
purported lien] in Kentucky."

Ms. Stickles asserts that the motion should be denied in its
entirety for two reasons. First, NCC has failed to comply with
applicable Kentucky law for perfecting its purported mechanic's
lien, and therefore, does not hold a valid security interest
against the property. Kentucky law makes clear that a mechanic's
lien is a creature of governing statutes, and strict compliance
with the perfection procedures is required. Laferty v. Wickes
Lumber Company, 708 S.W.2d 107, 108 (Ky. Ct. App. 1986). In
Wickes Lumber, the court held that a lien claim against a non-
contracting owner is not properly perfected by merely notifying
the non-contracting owner via a complaint. In this case, NCC
failed to give notice to the titleholder of the property-Warren
County.

Second, regardless of whether NCC holds a secured claim, NCC has
not met its burden for relief from the automatic stay. NCC does
not even allege that the Warren County property or Fruit of the
Loom's leasehold interest is declining in value or that NCC's
purported security therein is at risk of dissipation. In fact,
if NCC has a perfected secured claim against the property, it
would be oversecured by more than 3,000%.

The motion must be denied because NCC has failed to demonstrate
"cause" sufficient to entitle relief under section 362. The
automatic stay afforded to Fruit of the Loom by section 362(a)
is "one of the most fundamental protections provided by the
bankruptcy laws." Midatlantic National Bank v. New Jersey
Department of Environmental Protection, 474 U.S. 494, 503
(1986).

Fruit of the Loom argues that the potential harm to Fruit of the
Loom is great. The property is its operational headquarters and
the site of many critical systems and personnel. In addition,
NCC will have no greater chance of litigation success in
Kentucky, because its purported mechanic's lien suffers from
serious defects under that state's law. NCC has already
submitted itself to Delaware authority by filing proofs of claim
in these cases. Essentially, NCC is trying to obtain more
favorable treatment that similarly situated creditors. (Fruit of
the Loom Bankruptcy News, Issue No. 33; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


HARNISCHFEGER: Moves To Disallow HEI Receivable After Setoff
------------------------------------------------------------
After discovering that HEI (a non-debtor Barbados company that
is jointly owned by BWRC and HIHC, Inc., each a Debtor in the
Harnischfeger Industries, Inc. cases) did not file a claim
against Beloit, Beloit Corporation and BWRC, Inc., Debtors in
the Harnischfeger cases, seek the Court's authority to amend the
previous order so that HEI will not be allowed a net amount
after setoff of prepetition debts between HEI and Beloit is
effected.

As of the petition date, HEI owed Beloit $40,079,886.00 (the
Beloit Receivable) and Beloit owed HEI $41,025,464.00 (the HEI
Receivable).

Beloit and BWRC previously agreed and obtained the Court's
approval to set off these amounts. Because the HEI Receivable is
of a larger amount, there is a remainder of the HEI Receivable.

However, subsequent to the agreement and the entry of the Court
order, the Debtors discovered that the prior motion incorrectly
stated that HEI had filed Proof of Claim No. 1659 when in fact,
HEI did not file a proof of claim against Beloit.

The Debtors believe that the setoff requested in the prior
motion is still appropriate, but because HEI failed to file a
proof of claim, it is not appropriate for HEI to have the
remainder of the HEI Receivable allowed as a claim against
Beloit.

Accordingly, the Debtors request that the Court enter an Order
amending the Prior Order so that (i) the Setoff is allowed, even
though HEI did not file a proof of claim, and (ii) HEI's claim
remaining after the Setoff is not allowed. (Harnischfeger
Bankruptcy News, Issue No. 45; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


HENLEY HEALTHCARE: Discloses it May Have to File for Bankruptcy
---------------------------------------------------------------
Henley Healthcare, Inc. (OTCBB:HENL) has sold Enraf-Nonius, B.V.
(Enraf-Nonius), an indirect, wholly-owned subsidiary of the
Company which is located in Delft, The Netherlands. Enraf-Nonius
was acquired by the Company on May 29, 1998, through its wholly-
owned subsidiary, Henley Healthcare, B.V. (Henley-B.V.). The
sale, which was to a group of Dutch investors, was ordered by a
Dutch court due to the substantial indebtedness owed to several
creditors by Henley-B.V. Enraf-Nonius was sold for an
undisclosed amount.

As previously reported, the Company has defaulted on its
indebtedness owed to Comerica Bank Texas. Comerica Bank Texas
has now foreclosed on the Company's Belton facility and the
facility has been sold to a third party for approximately
$500,000. The sale proceeds were used to reduce the indebtedness
owed by the Company to Comerica Bank.

In addition to the remaining indebtedness owed to Comerica Bank,
the Company has a substantial amount of outstanding indebtedness
owed to Maxxim Medical and unpaid vendors. In the event the
Company is unable to quickly restructure its outstanding
indebtedness and secure additional financing, the Company will
not have the funds to satisfy its obligations and may be
required to seek protection under the federal bankruptcy laws.

                Auditor and Director Resignations

Arthur Andersen LLP resigned as the independent auditors for the
Company effective June 28, 2001.

The Company also announced that Tom Doodkorte and John van
Groningen resigned from the Company's board of directors
effective July 1, 2001. Mr. Len de Jong will remain as the sole
member of the Company's board of directors.


HOMEPLACE: Asks Court To Extend Exclusive Period To Sept. 14
------------------------------------------------------------
HomePlace Holdings Inc. is asking a court to extend its
exclusive periods to both file a reorganization plan and solicit
plan votes. A hearing is scheduled for Aug. 6 before Chief Judge
Peter J. Walsh of the U.S. Bankruptcy Court in Wilmington, Del.
Objections are due July 30. The home goods retailer had until
July 15 to file a plan and until Sept. 13 to get acceptances. If
its request is granted, the company would have until Sept. 14 to
file a plan and until Nov. 15 to get acceptances. (ABI World,
July 20, 2001)


I.C. ISAACS: Nasdaq Delists Shares, Now Trades On OTCBB
-------------------------------------------------------
I.C. Isaacs & Company, Inc. (OTC Bulletin Board: ISAC) said
that, due to failure to meet certain continued listing
requirements, the Company's securities were delisted from The
Nasdaq Stock Market effective at the open of business on July
20, 2001. Shares of the Company's common stock are now traded on
the OTC Bulletin Board under the ticker symbol ISAC.

Robert J. Arnot, President and Chief Executive Officer of
Isaacs, commented, "Although we regret the delisting, we do not
believe that our move to the OTC market will affect our
customers or employees. We intend to continue to build on the
success of our Girbaud brand going forward."

                   About the Company

I.C. Isaacs & Company, Inc. is a designer and marketer of
branded sportswear based in New York City and Baltimore. The
Company offers full lines of sportswear for men and women under
the Marithe and Francois Girbaud (R) brand in the United States,
Puerto Rico and Canada; for men and boys under the Beverly Hills
Polo Club(R) brand in the United States, Puerto Rico and Europe;
and for men under the Urban Expedition (R) brand in the United
States and Europe.


IMPERIAL SUGAR: Associate Fleet Wants Diamond To Decide On Lease
----------------------------------------------------------------
Associates Fleet Services, appearing through John R. Weaver,
Jr., of the Wilmington firm of Farr, Burke, Gambacorta & Wright,
asks Judge Robinson for an order compelling Diamond Crystal
Specialty Foods, Inc., to assume or reject an unexpired Fleet
Lease Agreement for vehicles by a date certain. In June 1987,
Debtor and United Fleet Leasing entered into a Lease Agreement
and Fleet Management Agreement for various vehicles. In that
connection, the Debtor and United Fleet entered into various
schedules for the vehicles. Associates subsequently purchased
United Fleet and all of its interest in the subject lease. The
Debtor leased the various vehicles for use in its business, and
upon information and belief, continues to use the vehicles to
generate income for its benefit and for the benefit of unsecured
creditors, and to the detriment of Associates, for which the
Debtor is obligated to make monthly payments.

As of the Petition Date, the monthly rental payments for May
2000 and for a portion of January 2001 was due but unpaid in the
amount of $17,730.30. After the Petition Date the Debtor failed
to make payments for April through June in the amount of
$41,886.20. Under the lease, Associates may levy a late charge
of the lesser of 1% of the monthly payment, or $75.00 for each
invoice due and unpaid. Also under the lease, Associates is
entitled to recover its attorney's fees expended or incurred to
enforce its rights.

Associates asks that Judge Robinson order the Debtor to assume
or reject the lease within 10 days of her order, or in the
alternative, for an order compelling the Debtor to perform its
lease obligations. While a debtor in possession ordinarily may
assume or reject an unexpired lease of personal property at any
time before confirmation of a plan, upon a request by a party to
such a lease the Court may order the debtor to accept or reject
the lease within a specified time period. A reasonable time is
left to the Court's discretion, but the debtor's failure to
perform its lease obligations may be sufficient cause to set a
date for assumption or rejection.

Associates expresses its worry that the vehicles may not be
adequately maintained or secured as a result of the bankruptcy
proceedings, putting its interest in the vehicles at substantial
risk. Further, the vehicles are mobile, could be taken or
damaged, and are subject to sudden and catastrophic depreciation
or loss in value due to engine failure or transmission failure.
If the Debtor assumes the lease, all payments and monies due
under the lease should be paid within 10 days of an order
authorizing assumption. If the Debtor rejects the lease,
Associates asks Judge Robinson to order the Debtor to perform by
returning the vehicles within 10 days of entry of an order
authorizing rejection, and in any case, pay the monthly rentals
due until the vehicles are returned.

Associates argues that granting it relief is "especially
critical" since the amount of unpaid postpetition rent is
already substantial and growing. Each month that passes without
the Debtor paying the monthly rental in full means an additional
credit extension by Associates. This situation is precisely what
Congress intended to prevent by offering the protection found
for lessors in the Bankruptcy Code. The Debtor must perform
until the vehicles are returned. Pending assumption or
rejection, Associates asks that the Debtor be ordered to pay as
and when due all rents since the filing of the Petition.
(Imperial Sugar Bankruptcy News, Issue No. 7; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


INTEGRATED HEALTH: Asks Court To Okay Agreements With Officers
--------------------------------------------------------------
Prior to the Filing Date, in an effort to promote the retention
of senior management personnel and encourage them to acquire and
hold IHS stock, Integrated Health Services, Inc. adopted an
Officer Loan Program under which certain officers holding the
title of vice president or higher were advanced loans for the
purchase or retention of IHS common stock. In exchange, each
employee executed a promissory note in the principal amount of
the loan plus a fixed interest rate. By their terms, as a
general matter, the Notes were forgiven over a five year term.
Significantly, the Notes and the prepetition employment
agreements with the officers provide for the forgiveness of the
Notes at any earlier time in the event that Robert N. Elkins
ceased to be the CEO and President of IHS.

Among other things, Robert N. Elkins' resignation triggered the
forgiveness or potential forgiveness of approximately $11.4
million in obligations under the Notes executed by 17
officer/obligors covered by the Employee Retention Motion, 16 of
whom are still employed with the Debtors as key members of the
management.

Generally, senior vice presidents received automatic Note
forgiveness by virtue of Robert Elkins' departure. Executive
vice presidents ("EVP") received the right to terminate their
employment for good reason based on Robert Elkins' departure,
and a termination for good reason in turn provides for Note
forgiveness. With these provisions, Robert Elkins' departure
actually encourages EVPs to leave the Debtors to achieve Note
forgiveness.

To the Debtors, it is critical that the officers remain with the
Debtors through the reorganization, and are properly motivated
and incentivized. Therefore, the Debtors seek to reverse the
incentive for the EVPs to leave the Debtors' employ.

Thus, the Debtors and its senior management are faced with the
financial impact of the unwind of the Officer Loan Program as
well as two other issues affecting its officers - (A) the
Retention Program and (B) Employment Contracts with Senior
Officers:

(A) The retention program was geared to the key employees below
     senior officer level, and Rotech's key employees. For all
     senior officers with Notes, the Retention Program merely
     provided for partial repayment of the Notes, which, by their
     terms, were being forgiven over a five year term as long as
     the officer remained employed by IHS. Thus, the Retention
     Program provided no cash to the senior officers with Notes,
     and did little to incentivize the officers. Before Dr.
     Elkins' resignation, the Debtors felt that the senior
     officers were motivated to stay with the Debtors since
     resignation by them would trigger repayment of the Notes.

     Now, with Robert Elkins' departure, the Notes are forgiven,
     and the senior officers are no longer bound by the Notes to
     stay with the Debtors. Accordingly, the Retention Program
     needs to be reformulated.

(B) Before confronting this issue, the Debtors resisted assuming
     the employment contracts with their senior executives
     despite repeated requests by its senior officers.

     The Debtors also resisted putting into place an official
     postpetition severance program for their officers. The prior
     relief requested by the Debtors to formalize a postpetition
     severance program, which was approved by the Court, only
     applied to employees below the senior officer rank.

     To the Debtors, as long as the Notes were outstanding, they
     served the function of ensuring that senior executives would
     remain with the Debtors. Now the workings have changed.

     After numerous meetings and discussions with their officers
     and the Creditors Committee, the Debtors have formulated a
     Program designed to deal with the issues, with consideration
     given to the motivation, retention and incentivization of
     the management team through the Debtors' reorganization.

Accordingly, the Debtors seek the Court's order, pursuant to
section 363(b)(1) of the Bankruptcy Code, authorizing the
Debtors to enter into agreements with certain of their current
and former senior officers. In light of the need to stabilize
the work force without delay, the Debtors are filing the Motion
while some negotiations relating to the Agreements are still
going on with the full expectation that the Agreements will be
signed before the hearing on the Motion.

                        The Program

(A) This covers 16 current and one former member of IHS' senior
     management team who are affected by the tax consequences
     arising from the forgiveness of the Notes. Additionally,
     these officers have accrued stay bonuses under the Retention
     Program. With respect to the 16 current employees, the
     Debtors have determined that it is necessary to modify their
     severance benefits, all on substantially similar terms to
     one another, in order to promote and maintain strong morale
     among these key personnel. With respect to a former officer
     (Leslie Glew), whose severance arguably already has become
     due, the Debtors seek approval of a separation agreement
     with her which, inter alia, addresses the treatment of her
     severance claim and withholding tax obligations.

     Specifically, the members in the Program are: Brad Bennett,
     Dan Booth, Terry Bydume, Ed Clark, Marshall Elkins, Eileen
     Erstad, Mark Fulchino, Leslie Glew, John Heller, Marc Levin,
     Ron Lord, Sean Nolan, Frank Phillips, Jim Santarsiero, Bob
     Stephenson, Ron Stierstorfer, John Walton.

(B) The Debtors have negotiated or are near the end of the
     negotiations regarding 16 Employment Agreements and one
     Separation Agreement (Ms. Glew's) to resolve the issues.

     In light of the progress in negotiation, this Motion does
     not cover Taylor Pickett, the former chief financial officer
     who resigned on June 11, 2001, or Sally Weisberg, a current
     officer who runs one of the Debtors' businesses.

(C) The Employment Agreements

     Although variations exist, all of the Employment Agreements
     provide for a term of two years, substantially uniform
     confidentiality, non-solicitation and non-competition
     obligations, and other uniform provisions, plus specific
     terms of salary and benefits with respect to each officer.

     In addition, the Employment Agreements include the following
     key provisions:

     (1) Severance

         The Debtors are obligated to pay severance and benefits
         to the Employees if the company terminates the Employees
         "without cause". Though the severance amounts vary by
         employee, for most officers, they generally equal 6
         months of base salary plus up to an additional 6 months
         in the event that the employee is unable to find a
         comparable position within such period of time after
         termination. EVPs have longer severance provisions.

      (2) Employee Loan Forgiveness and Withholding Liability

          Each Employment Agreement provides for the company to
          pay the withholding tax liabilities caused by Note
          forgiveness. The company also agrees to pay all or some
          of the taxes on the withholding taxes paid for the
          employees ("gross-up amount") depending on how much of
          the Notes proceeds were used by the employee to acquire
          or maintain holdings of the company's stock. The gross-
          up amount not payable by the company will be paid by
          the employee in cash or by a promissory note (which is
          attached as an exhibit to the Employment Agreement).

          The aggregate amount of the withholding taxes paid by
          the Debtors for the officers covered by this Motion
          will be approximately $6.2 million. Employees will be
          required to repay approximately $938,000 of such
          withholding taxes to IHS. In addition, the officers
          will be required to pay additional income taxes to the
          government above the withholding tax amount, on account
          of such Note forgiveness.

          The Debtors have determined to handle the issue in this
          way because after consultation with the their financial
          and legal advisors, the Debtors understand that the
          forgiveness of the Notes is likely to be deemed
          employee compensation for federal, state and local
          income tax purposes. In addition, if the Debtors were
          to pay withholding tax obligations on the forgiven Note
          obligations, such payments would also be subject to
          withholding taxes. While the Debtors believe that the
          payment of such taxes should be made by the officers,
          the Debtors are also liable for the withholding tax
          obligations. It would not be practical for the Debtors
          to deduct withholding taxes from future salary
          payments, since to do so would deprive the officers of
          salary income for years, in certain cases. Moreover,
          many of the officers believe that there was an
          understanding with IHS that they would never have to
          pay the Notes or the taxes associated with any
          forgiveness of same.

          The Separation Agreements for Ms. Glew address her tax
          obligations in essentially the same manner as provided
          in the Employment Agreements for current employees.
          Specifically, she will be paid the severance payment
          due under her employment agreement, her retention
          payment due under the Retention Program, the
          withholding taxes on the loan forgiveness of her Notes,
          plus the taxes on said amount. Ms. Glew will also
          provide consulting services to the Debtors on an as
          needed basis.

      (3) Retention Bonus

          The Employment Agreement identifies the payments that
          the Employee is eligible to receive pursuant to the
          Retention Program and provides that the final Retention
          Program payment will be paid on the effective date of a
          plan or plans of reorganization confirmed by the Court.
          The company may apply any or all of the Retention
          Program payments to reduce the employee's new
          promissory note, if applicable. The Debtors do not seek
          to change the aggregate amount of retention payments
          for the officers covered by the Motion, which had
          previously been approved by the Court. This amount is
          approximately $3 million. The relief requested by the
          Motion is to clarify to what extent such payments will
          be applied against the Notes, now forgiven, as compared
          to being paid to the officers.

      (4) Indemnification

          The Employment Agreements provide for indemnification
          of each employee to the fullest extent permitted by
          Delaware law. Some indemnification provisions differ.

          In particular, the Employment Agreements to be executed
          with Senior Vice President-Associate General Counsel
          Ronald Lord and Senior Vice President-Finance Daniel
          Booth, includes a specific provision providing for the
          Debtors agreement to indemnify Messrs. Booth and Lord,
          in connection with the action styled Don G. Angell et
          al. v. Elizabeth B. Kelly, C. Taylor Pickqtt, Daniel J.
          Booth and Ronald L. Lord, pending in the United States
          District Court for the Middle District of North
          Carolina (the "Angell Action"). The Angell Action is
          subject to a consensual stay order entered by this
          Court on June 12, 2001. (In addition, the Debtors will
          seek authority to indemnify the officers involved in
          the Angell Action.)

                           *   *   *

As part of the Motion, the Debtors will seek approval of John
Heller's employment contract.  Mr. Heller is the president of
IHS' long term care division, and is an important member of the
Debtors in the process of reorganization.

Finally, the Debtors will seek approval of severance protection
for certain senior officers (consistent with what has been
offered to other officers) who never received loans under the
Officer Loan Program.

The Debtors submit that they have discussed the salient terms of
the Agreements with the Creditors' Committee and copies of the
Agreements will be given to the Committee.

The Debtors represent that the entry into the Agreements
substantially under the terms described is essential to preserve
and maximize the value of the Debtors' estates.
Administratively, the Employment Agreements clarify and embody
into employee-specific agreements the Debtors' previously-
approved obligations under the Retention Program, supercede the
officers' prepetition employment contracts, deals with the
unwind of the Officer Loan Program, and provide tangible
severance benefits to its senior-level employees. Furthermore,
the Debtors believe that the relief requested will help maintain
a motivated and dedicated workforce. The Debtors also believe it
is important to promptly stabilize its work force by obtaining
the relief requested in the Motion. The Debtors tell the Court
that Mr. Pickett's recent resignation as CFO has caused them to
accelerate their negotiations of the Program.

Based on these reasons, the Debtors submit that entry into the
Agreements under the terms described will serve the best
interests of the Debtors' estates, their creditors and all
parties in interest. (Integrated Health Bankruptcy News, Issue
No. 18; Bankruptcy Creditors' Service, Inc., 609/392-0900)


KELLSTROM IND.: Securities Exchange Offer Extended to July 31
-------------------------------------------------------------
Kellstrom Industries, Inc. (NASDAQ:KELL) announced the extension
of its pending exchange offer for up to $54 million of its
outstanding series of 5-3/4% convertible subordinated notes due
October 15, 2002 (CUSIP Nos. 488035AC0 and U48787AA0) and/or up
to $86.25 million of its outstanding series of 5-1/2%
convertible subordinated notes due June 15, 2003 (CUSIP No.
488035AE6) (the "old notes"), in any combination totaling no
more than $96 million in aggregate.

As previously announced, the Company said it is engaged in
informal discussions with certain holders of old notes regarding
potential changes to the terms of the exchange offer. In order
to facilitate ongoing discussions, the expiration date for the
exchange offer has been extended from 5:00 p.m., New York City
time, on July 13, 2001, to 5:00 p.m., New York City time, on
July 31, 2001, unless earlier terminated or extended.

The complete terms of the amended exchange offer remain
unchanged and are contained in the Preliminary Prospectus and
Exchange Offer documents dated June 12, 2001, as supplemented by
a Prospectus Supplement date June 26, 2001.

As of 5:00 p.m., New York City time, on July 13, 2001, the
Company received tenders from holders of $10.6 million in
aggregate principal amount of the 5-3/4% convertible
subordinated notes, representing 19.6% of the outstanding
5-3/4% notes and $11.5 million in aggregate principal amount of
the 5-1/2% convertible subordinated notes, representing 13.3% of
the outstanding 5-1/2% notes.

Banc of America Securities LLC is the exclusive dealer manager
for the exchange offer. D.F. King & Co., Inc. is the information
agent and First Union National Bank is the depositary. Copies of
the Preliminary Prospectus and Exchange Offer, as supplemented,
can be obtained by calling D.F. King at (800) 928-0153.
Additional information concerning the terms and conditions of
the offer may be obtained by contacting Banc of America
Securities LLC at (888) 292-0070.

Kellstrom is a leading aviation inventory management company.
Its principal business is the purchasing, overhauling (through
subcontractors), reselling and leasing of aircraft parts,
aircraft engines and engine parts. Headquartered in Miramar, FL,
Kellstrom specializes in providing: engines and engine parts for
large turbo fan engines manufactured by CFM International,
General Electric, Pratt & Whitney and Rolls Royce; aircraft
parts and turbojet engines and engine parts for large transport
aircraft and helicopters; and aircraft components including
flight data recorders, electrical and mechanical equipment and
radar and navigation equipment.

Kellstrom has filed a Registration Statement on Form S-4 with
the SEC registering the new notes, the related guarantees and
the underlying shares to be offered in the exchange offer as
well as a Schedule TO. The Registration Statement and the
Preliminary Prospectus and Exchange Offer, as supplemented,
contained in the Registration Statement contain important
information about Kellstrom, the exchange offer and related
matters. Noteholders are urged to read the Registration
Statement and the Preliminary Prospectus and Exchange Offer, as
supplemented, Kellstrom's Schedule TO and any other relevant
documents Kellstrom filed with the SEC.

The Registration Statement has not yet become effective. The new
notes may not be sold and, although holders of the old notes may
tender their old notes, tenders may not be accepted prior to the
time the Registration Statement becomes effective. This press
release shall not constitute an offer to sell or an offer to buy
nor shall there be any sale of the new notes in any state in
which such offer, solicitation or sale would be unlawful.

Noteholders are able to obtain copies of the Registration
Statement on Form S-4 and the Preliminary Prospectus and
Exchange Offer, as supplemented, Kellstrom's Schedule TO and any
other relevant documents for free through the website maintained
by the SEC at http://www.sec.gov.


KRAUSE'S FURNITURE: Files Chapter 11 Petition in C.D. California
----------------------------------------------------------------
Krause's Furniture, Inc. (AMEX:KFI), a manufacturer and retailer
of custom-crafted furniture, and its subsidiaries (collectively,
the Company) filed voluntary petitions under Chapter 11 of the
Bankruptcy Code. The Company has also obtained a new debtor-in-
possession (DIP) financing commitment from its primary lender
and oral commitments from its key vendors to supply raw
materials.

With the new financing and commitments from key vendors to
resume shipments of raw materials, the Company will be able to
operate its factory and produce and ship existing as well as new
orders.

The Company has requested that the Bankruptcy Court authorize
the new financing and that it approve continuation of pay to
ongoing employees without interruption, and that it be allowed
to continue providing existing benefits for continuing
employees, including health and dental insurance.

The Company expects to continue operations at 57 of its existing
89 showrooms that produced operating profits in fiscal year 2000
and plans to close 32 showrooms, which will conduct going-out-
of-business sales for three to six weeks. The Company has
already closed 11 under-performing showrooms this year. As a
result of the new and previously announced closings, the Company
will completely exit from the Portland, Chicago, Dallas, and
Houston markets. It has previously announced closure of all of
its showrooms in Colorado Springs, Ft. Lauderdale, and Atlanta.
The showrooms that will be closed as well as other showrooms
that have been closed had significant operating losses in fiscal
2000.

The Company currently has 988 employees and plans to retain
approximately 880 following anticipated closings of showrooms
and distribution centers.

The Chapter 11 petitions were filed Friday afternoon in the U.S.
Bankruptcy Court for the Central District of California in Santa
Ana. The case number for the parent company case is SA01-16357
JB. The assigned judge is the Honorable James N. Barr.

In its court petition, the Company pointed to the current
economic environment as the primary cause of its need to file
under Chapter 11. The furniture industry is highly cyclical, and
more affected by economic trends than most industries, the
Company said in its filing.

The Company has received a proposal from a group that includes
current members of management, some current investors, as well
as new investors who would form a new company to purchase 57 of
the Company's showrooms, the Company's ongoing distribution
centers, the Company's factory in Brea, as well as its contract
division. The proposal includes provisions that the new company
would purchase the existing inventory and raw materials, and
would continue to employ all current employees at ongoing
showrooms, distribution centers, and the factory.

The debtor-in-possession financing obtained by the Company is
designed to support operation of the 57 showrooms through
September 30, 2001. If the sale of assets is not completed by
that date, the Company anticipates that all of its showrooms
would liquidate inventory and then cease operations.

Nonetheless, the Company's new financing has been arranged so
that the Company will be able to fulfill all customer orders
even if the showrooms cease operation.

The new financing, the proposed purchase of assets by the new
company and other arrangements outside the Company's ordinary
course of business are subject to the Bankruptcy Court's
approval. Under the procedures to be followed by the Company, it
will invite other bids for the Company's assets, with the assets
being sold to the highest and best bidder.

The Company anticipates that its common stock will most likely
be de-listed from the American Stock Exchange because of the
Chapter 11 filing and the Company's inability to meet AMEX's
listing requirements.

Krause's Furniture is being advised by attorney Richard Neiter
of Stutman, Treister & Glatt, Los Angeles, in bankruptcy
matters, and by Bruce Conklin, Jr. of the management consulting
firm Kibel Green Issa Inc., Santa Monica, CA.


LAIDLAW INC.: Moves To Implement A Cross-Border Protocol
--------------------------------------------------------
Laidlaw Inc. asks Judge Kaplan to approve, on an interim and
final basis, a cross-border insolvency protocol for Laidlaw Inc.
and its affiliates.  In order to better facilitate the plan in
light of the cross-border nature of the Debtors' businesses, the
Debtors argue that it is necessary to implement a procedural
protocol between the New York Bankruptcy Court and the Ontario
Superior court of Justice in Toronto, Canada, to address certain
administrative issues expected to arise in coordinating the
insolvency proceedings.  Together, the insolvency proceedings
involve the restructuring of six affiliated debtors and impact
the rights of numerous creditors and interested parties in the
United States, Canada and other jurisdictions.  Moreover,
Laidlaw Inc., a Canada corporation and the ultimate parent
corporation of the other Debtors, and Laidlaw Investment Ltd.,
an Ontario corporation, each a debtor in both the United States
and Canadian cases, may be required in certain instances to seek
relief jointly in this court and the Canadian court.  Under
these circumstances, if no administrative procedures are
implemented to coordinate the activities of the courts and other
parties in connection with the insolvency proceedings, there is
a risk that the Debtors' reorganization proceedings and the
rights and interests of creditors and parties in interest could
be adversely affected.

As a result, an administrative protocol is required to ensure
that:

        (a) the United States cases and the Canadian cases are
            coordinated to avoid inconsistent, conflicting or
            duplicative activities;

        (b) all parties are adequately informed of key issues in
            both insolvency proceedings;

        (c) the substantive rights of all parties are protected;
            and

        (d) the jurisdictional integrity of each court is
            preserved.

The protocol  s designed to achieve these various objectives by
implementing a framework of general principles to address the
basic administrative issues arising out of the cross-border
nature of the insolvency proceedings.  In particular, the
protocol is designed to achieve three goals:

       * First, the protocol is designed to harmonize and
coordinate activities in the insolvency proceedings before the
New York and Canadian courts, thus promoting the orderly and
efficient administration of these proceedings.  Such
coordination is essential and will, among other things, maximize
the efficiency of the insolvency proceedings, reduce costs
associated with them and avoid duplication of effort.

       * Second, the protocol is designed to (a) honor the
integrity and independence of the insolvency Courts and other
courts and tribunals of the United States and Canada, and (b)
promote international cooperation and respect for comity among
the Courts.

       * Finally, by providing for appropriate notice to all key
constituencies of matters arising in both insolvency
proceedings, an opportunity for all parties in interest to be
heard in both courts, and the express preservation of all
parties' substantive rights, the protocol is designed to
facilitate the fair, open and efficient administration of the
insolvency proceedings for the benefit of all of the Debtors'
creditors and parties in interest, wherever located.  To ensure
that the protocol will appropriately resolve the key
administrative issues in the insolvency proceeding, and protect
the rights and interests of all interested parties, the terms of
the protocol were developed jointly by counsel to the Debtors
and counsel to the Canadian debtors.

The principal terms of the protocol are:

        (a) Comity and Independence of the Courts.  The protocol
expressly preserves the independent jurisdiction and sovereignty
of this Court and the Canadian Court.

        (b) Cooperation.  The protocol provides that: (i) the
Debtors and the Committee will cooperate with each other in
coordinating the administration of the United States cases and
the Canadian cases, and subject to overriding principles of
comity and independence, the Courts will use their best efforts
to coordinate activities in the insolvency proceedings.

        (c) Retention and Compensation of Professionals.  The
protocol generally preserves the independent jurisdiction of
each court over the retention and compensation or professionals
in the respective insolvency proceedings.  Under the terms of
the protocol, this Court generally will have sole and exclusive
jurisdiction over the retention and compensation of any
professional retained by the Debtors or the Noteholders'
Committee. Likewise, the protocol provides that the Canadian
court generally will have sole and exclusive jurisdiction over
the retention and compensation of any professional retained by
the Canadian debtors or any committee for activities performed
in connection with the Canadian cases.

        (d) Notice.  Under the protocol, notice of any motion,
application or other pleading or paper filed in the insolvency
proceeding, and notice of any related hearings or other
proceedings mandated by applicable law will be given to: (i) all
creditors and other interested parties in accordance with the
practice of the jurisdiction where the papers are filed or the
proceedings are to occur, and (ii) to the extent not otherwise
entitled to receive notice, counsel to the committee, the United
States trustee, and such other parties as may be designed by
either court.

        (e) Joint Recognition of Stays of Proceedings under the
Bankruptcy Code and the Canadian Companies' Creditors
Arrangement Act Order.  To preserve the Debtors' estates for the
benefit of all stakeholders, the protocol provides that each
Court will extend and enforce the applicable stays of
proceedings established under the laws of the jurisdiction of
the other court.  In particular, the protocol provides that: (i)
this Court will extend and enforce the stay of proceedings and
actions against the Canadian debtors, their directors and their
assets under the CCAA Order sought by the Debtors to determine
that LINC and LIL are entitled to seek relief under the CCAA,
and grant certain other relief necessary to preserve the value
of their estate and business, in the United States to the same
extent that such stay of proceedings and actions is applicable
in Canada, and (ii) the Canadian court will extend and enforce
the stay of proceedings and actions against the Debtors and
their assets under the Bankruptcy Code in Canada to the same
extent that such stay of proceedings and actions is applicable
in the United States to prevent adverse actions against the
assets, rights and holdings of the Debtors in Canada.

        (f) Effectiveness and Modification.  The protocol
provides it (i) will become effective only upon approval by both
this Court and the Canadian court, and (ii) subsequently may be
modified upon approval by both this Court and the Canadian court
after appropriate notice to interested parties.

        (g) Preservation of Rights.  To preserve all parties'
substantive rights in the insolvency proceedings, the protocol
expressly provides that neither the terms of the protocol nor
any actions taken under the terms of the protocol will prejudice
or affect the powers, rights, claims and defenses of the Debtors
or other parties in interest under applicable law, including the
Bankruptcy Code and the CCAA.

Judge Kaplan grants the Debtors' Motion and approves the cross-
border protocol in all respects, adopting it on an interim
basis, but subject to certain objection procedures which permit
the significant creditors and parties interested in these
estates a period during which they may object to the Debtors'
request for final approval of these protocols.  If no objections
are timely filed, the protocol will be deemed approved in all
respects and adopted by Judge Kaplan on a final basis without
further action or notice.  However, Judge Kaplan refused to make
the protocol effective on either an interim or final basis
unless and until the protocol is approved by his order and an
order of the Canadian court.  If, after consideration of the
identical protocol, the Canadian court does not approve it, the
Debtor is permitted to seek additional relief in these cases to
harmonize the decisions of the two courts. (Laidlaw Bankruptcy
News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


LEINER HEALTH: Lenders Grant Debt Forbearance Until August 31
-------------------------------------------------------------
Leiner Health Products has entered into a forbearance agreement
with its existing bank lenders until August 31, 2001.

As previously announced, the company has been operating under a
series of waivers as a result of covenant breaches under its
bank credit agreement. The most recent waiver expired on June
27, 2001. The current agreement will automatically extend until
September 28, 2001 if agreement is reached on a financial
restructuring proposal by August 31, 2001.

Robert Kaminski, Chief Executive Officer, said, "This
forbearance agreement reinforces our bank lenders' ongoing
support for our restructuring efforts. We are encouraged by the
discussions we have been having with them and our subordinated
debtholders."

Kaminski continued, "We continue to see improvement in our
business, both from a revenue and a gross margin perspective,
due to our reengineering plan. We expect that these improvements
will be reflected in our first quarter results, which will be
released by August 14, 2001."

Under the terms of the forbearance agreement, Leiner's bank
lenders will not exercise remedies available to them during the
forbearance period. The forbearance agreement requires that the
company deliver to its bank lenders and their financial advisors

      (a) an updated business plan reflecting the results of
          first quarter of 2001 by July 23, 2001,

      (b) additional financial analyses prepared by the company's
          financial advisors by July 31, 2001 and

      (c) a restructuring proposal by August 15, 2001.

If agreement is reached on a restructuring proposal by August
31, 2001, the forbearance agreement will be automatically
extended until September 28, 2001. If agreement has not been
reached by August 31, the forbearance agreement will terminate
on that date. The forbearance agreement will also terminate if
the company fails to make any payments as required thereunder
or fails to remedy any other default within two business days of
notice of such default. In addition, failure to deliver the any
of the material noted in items (a)-(c) above will result in the
company incurring a $100,000 fee to the bank lenders.

The waivers provided for, and the forbearance agreement will
continue to require through the end of the forbearance period, a
one percent increase in the applicable margin and that the
proceeds of any antitrust litigation be used to prepay
outstanding bank debt. The forbearance agreement also requires
the payment of $600,000 in forbearance fees and $700,000 as a
prepayment of outstanding bank debt. Interest on the bank debt
for August and September has been placed in escrow.

Certain conditions to the waivers continue during the
forbearance period including the company's agreement that

      (a) interest and letter of credit fees will be paid monthly
instead of quarterly,

      (b) commitments to make further credit extensions are
suspended,

      (c) outstanding amounts under the bank credit agreement
cannot be continued as or converted into LIBOR or banker's
acceptance rate loans.

In addition, the forbearance agreement requires that the company
agree to restrictive covenants with respect to disbursements,
cashflows, asset sale proceeds, severance arrangements,
indebtedness and intercompany dispositions, among others and
engage in a search for a Chief Operating Officer.

Leiner said that it is continuing discussions with its bank
lenders regarding a financial restructuring. The company said
that the forbearance agreement offers Leiner the financial
flexibility to continue its operational restructuring while a
permanent financial restructuring solution is pursued.

Leiner Health Products Inc., headquartered in Carson,
California, is one of America's leading vitamin, mineral,
nutritional supplement and OTC pharmaceutical manufacturers. The
company markets products under several brand names, including
Natures Origin(TM), YourLife(R) and Pharmacist Formula(R). For
more information about Leiner Health Products, visit
http://www.leiner.com


LOEHMANNS HOLDINGS: Postpones Shareholders' Meeting To September
----------------------------------------------------------------
Notice is being sent to stockholders of Loehmann's Holdings,
Inc., a Delaware corporation, that the annual meeting of
stockholders called for July 23, 2001, has been postponed.

The postponement is due to an inadvertent failure by those
engaged by the Corporation to mail proxy soliciting materials to
stockholders, to do so on a timely basis.

The Corporation indicates it desires that every stockholder have
ample time to exercise the right to vote at the annual meeting
of stockholders, and since this appears not to be possible, the
Corporation has decided to postpone the annual meeting.

The Corporation presently plans to hold an annual meeting of the
stockholders of the Corporation in September 2001. A new record
date for stockholders entitled to notice of, and to vote at, the
annual meeting will be fixed by the Corporation. Subsequently,
stockholders will receive a new notice of annual meeting and
proxy statement as well as a copy of the Corporation's annual
report.


MARINER POST-ACUTE: Rejects Lease & Transfers Wyoming Facility
--------------------------------------------------------------
While in the process of finalizing negotiations and documenting
the terms of the transition of operations of the Canyon Hills
Nursing Center located at 1210 Canyon Hills Drive, Thermopolis,
Wyoming 82443, the Mariner Post-Acute Network, Inc. Debtors
including Living Centers-Rocky Mountain, Inc. ("LCRM"), sought
and obtained the Court's authority:

(1) for LCRM to carry out an orderly transition of operations of
     the Facility on terms and conditions that, with respect to
     matters requiring the approval of the Court, are not
     materially different from those set forth in the proposed
     Settlement Agreement as presented to the Court with the
     motion, including the Operations Transfer Agreement;

(2) for LCRM to reject its real property lease and settle
     outstanding disputes with Canyon Hills Manor, Inc. (the
     "Landlord"), while concurrently providing for the
     transition;

(3) for the assumption and assignment to the New Operator of the
     Facility of the Medicare provider agreement relating to the
     Facility.

The Debtors filed the motion in advance of the conclusion of the
negotiation and documentation process in order to seek the
authority prior to the desired June 1, 2001, closing of the
proposed transactions.

The Debtors have not mentioned this in the motion but presumably
LCRM was operating the Facility at a loss or simply put, the
burden of operating it outweighs any benefit that can be derived
and the Debtors have chosen the preferred course of
transferring the operations of the Facility as a going concern
with rejection of the lease rather than closure of the Facility.
The Debtors believe that sound business justification exists for
the contemplated transaction.

The Lease will expire pursuant to its terms on September 30,
2003. The Debtors have not yet sought Court approval to assume,
assume and assign, or reject the Lease pursuant to section 365
of the Bankruptcy Code, but by this Motion sought and obtained
authority to reject the Lease as part of the settlement with the
Landlord. The rejection will take place concurrently with the
effective date of the transactions.

                  The Settlement Agreement

The material provisions of the proposed Settlement Agreement
will generally provide for:

(a) a rejection of the lease, effective as of 11:59 p.m. on May
     31, 2001;

(b) Payment of all rent and real property taxes (including
     penalties and interest) due under the Lease from the
     Petition Date through May 31, 2001; provided, however, that
     such payments will thereafter be only $1.00 per month until
     August 31, 2001 if the transactions do not close by the
     contemplated June 1, 2001 closing date;

(c) If the transfer of operations at the Facility has not
     occurred by August 31, 2001, or a later date  mutually
     agreed upon, then LCRM may proceed to close the Facility in
     accordance with applicable law, and no administrative rent
     will be payable during this period so long as LCRM is
     diligently pursuing closure of the Facility; and

(d) The payment of $15,000 by LCRM in settlement of postpetition
     maintenance claims of the Landlord, combined with a waiver
     of all other claims against LCRM or any of the Debtors,
     whether such claims arose prepetition or postpetition.

                The Operations Transfer Agreement

The material provisions of this provide for:

(a) The transfer to the New Operator of the consumables,
      inventories, and supplies free and clear of liens and
      encumbrances;

(b) The orderly transfer of Patient Trust Fund accounts;

(c) The coordination of final cost reports;

(d) The employment by the New Operator of at least two-thirds of
      LCRM's employees at the Facility as of the Closing Date;

(e) The discharge by LCRM of earned vacation time, other earned
     paid time off, and all other similar employee benefits due
     to employees of the Facility as of the Closing Date;

(f) The reconciliation of future amounts received from the
     collection of accounts receivable;

(g) Prorations as of the Closing Date;

(h) The transfer of patient records and financial data; and

(i) The assumption and assignment of the Medicare Provider
     Agreement.

LCRM believes that the only entities asserting any interests in
the assets to be transferred are the DIP Lenders and the Pre-
Petition Lenders. LCRM anticipates that it will obtain the
consent of these Lenders, thereby satisfying Code section
383(f)(2) for the assets to be transferred free and clear of all
liens, encumbrances, claims, and interests.

              Assumption And Assignment Of
            The Medicare Provider Agreement

As part of the Operations Transfer Agreement, LCRM proposed to
assume and assign to the New Operator the Medicare Provider
Agreement between LCRM and HCFA relating to the Facility on
terms substantially similarly to those for the Arden Facility.
(Mariner Bankruptcy News, Issue No. 15; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


NEXTWAVE: Wireless Firms Want FCC To Probe Eligibility Question
---------------------------------------------------------------
Three mobile telephone companies, Verizon Wireless, VoiceStream
Wireless, a unit of Deutsche Telekom AG, and Alaska Native
Wireless, asked federal regulators to probe whether NextWave
Telecom Inc. still meets eligibility requirements to hold
wireless licenses it recently won back in a legal fight, Reuters
reported. An appeals court ruled last month that the Federal
Communications Commission (FCC) violated bankruptcy laws when it
tried to repossess the licenses from NextWave because of its
failure to make timely payments. The FCC had already resold
those licenses earlier this year for about $15.9 billion to
companies.

At stake are licenses covering such lucrative markets like New
York City, Denver and Seattle. Verizon, Alaska Native and
VoiceStream want to use them to offer new and expanded mobile
telephone services. A NextWave official said the request for a
probe was an attempt to squeeze out a new competitor and that
the charges had no merit. (ABI World, July 20, 2001)


OWENS CORNING: Seeks Approval Of Hartford Financial Settlement
--------------------------------------------------------------
Over the past 15 years, Owens Corning's liability insurers have
paid more than $2 billion toward the settlement and defense of
asbestos claims that have been asserted against Owens Corning.
Owens had exhausted the available "products" limits of its
policies that had been issued by solvent insurers without
asbestos-related exclusions.  For several years, Owens has been
seeking confirmation from its insurers that they will pay
asbestos claims that are not subject to the "products" limits of
their policies, often called "non-products" claims.  The "non-
products" claims include claims involving alleged injury during
the course of Owens installation of asbestos containing
materials.

Owens, many of its insurers, and corporate affiliates of
Hartford Financial Services Group, Inc., that sold insurance
policies to Owens are signatories to the agreement concerning
asbestos-related claims dated June 19, 1985, commonly known as
the Wellington Agreement.  Under the Wellington Agreement,
Hartford and its corporate affiliates previously exhausted $88
million in "products" limits under policies available to Owens
for payment of asbestos claims.

Norman L, Pernick, Esq., at Saul Ewing LLP in Wilmington,
explains that Owens and Hartford disagree about whether, and the
extent to which, the Hartford affiliates have further coverage
obligations to Owens Corning. Owens has taken the position that
Hartford continue to have coverage obligations with respect to
asbestos-related "non-products" claims notwithstanding the
exhaustion of the policies' "products" limits. Hartford
affiliates have taken the position that they have no further
coverage obligations to Owens with respect to asbestos-related
claims, regardless of whether they are characterized as
"products" or "non-products".

Under the Wellington agreement, Owens and Hartford agreed to
resolve their differences for the first time under specified
alternative dispute resolution procedures, which include
mediation, arbitral, and appeal mechanisms.  On June 8, 1999,
Owens initiated a Wellington ADR proceeding against one of the
Hartford affiliates seeking coverage for non-products" claims
under two distinct policy periods.  After the mediation phase
concluded, the first ADR proceeding continued into the arbitral
phase with the appointment of retired California Superior
Court Judge Thomas Kongsgaard as arbitrator on May 26, 2000.
After this appointment, the parties engaged in extensive
discovery and motion practice.

On August 28, 2000, Owens initiated a second Wellington ADR
proceeding against three Hartford affiliates seeking coverage
under policy periods different from those at issue in the first
ADR proceeding. The second ADR proceeding was assigned to
mediation before Harvard Law School Professor Robert H. Mnookin,
who, with the parties' consent, focused his efforts on the
resolution of all disputes between the Debtors and the Hartford
affiliates, including those at issue in the first ADR
proceeding, which continued to proceed under Judge Kongsgaard.

After a series of submissions and mediation sessions, Owens and
Hartford reached an agreement in principle to settle the first
and second ADR proceedings and their related disputes.  Owens
promptly advised counsel for the creditors' committee and the
asbestos claimants' committee of the key terms of the agreement
in principle.

By Motion, the Debtors ask Judge Fitzgerald to approve a
settlement between Owens Corning and Hartford Financial Services
Group, Inc.

                       The Settlement Agreement

The Settlement Agreement itself is filed under seal; however,
its principal terms are:

        (a) Within ten business days following Owens' written
notice to Hartford of the Court's approval of the Settlement
Agreement (but no earlier than August 1, 2001), Hartford will
pay a monetary amount into an escrow account;

        (b) Upon payment of the Settlement Amount into the escrow
account, Owens will dismiss the pending First and Second ADR
Proceedings;

        (c) The Settlement Amount will remain in the escrow
account, and will accrue interest and earnings, until the
following two contingencies are met in a timely manner: (i) the
substantial consummation of a plan of reorganization that has
been confirmed by the entry of a final order in these chapter 11
proceedings; and (ii) the issuance of an injunction under the
Bankruptcy Code that enjoins the filing of claims against
Hartford and the Hartford affiliates;

        (d) Upon satisfaction of these contingencies, the
Settlement Amount, with accrued interest and earnings, will be
released from the escrow account and be disbursed as provided
for in the plan of reorganization;

        (e) The parties agree mutually to release one another and
their related entities from all claims relating to the
Wellington Agreement, the Hartford policies at issue in the
First and the Second ADR Proceedings, and other policies issued
by the Hartford Affiliates.  The mutual release has certain
exceptions, including one respecting Fibreboard Corporation, and
one preserving non-asbestos products coverage under a policy
issued by one of the Hartford affiliates to Owens that is not
subject to the Wellington Agreement; and

        (f) In addition to the Code injunction, the Debtors will
use their reasonable best efforts to obtain other injunctive
protections for Hartford as part of the Debtors' plan of
reorganization.

The Debtors tell Judge Fitzgerald that the standards by which
courts evaluate a proposed compromise and settlement are well-
established.  In essence, the settlement standards balance the
probable success and potential costs of pursuing a claim or
defense against the benefits and costs of the proposed
settlement.  However, courts need not conduct an independent
investigation in formulating an opinion as to the reasonableness
of a settlement.  Rather, the Court is permitted to defer to the
judgment of the debtor, and the Court's responsibility is to
canvass the issues to see whether the proposed settlement "falls
below the lowest point in the range of reasonableness".
Accordingly, courts will approve a compromise and settlement if
it is fair and equitable and in the best interests of the
debtor's estate and creditors.

The Debtors believe that all factors weigh in favor of approval
of the Settlement Agreement for the following reasons:

        (a) The Settlement Agreement enables the Debtors to avoid
the expense, delay and risk associated with all litigation and
arbitration proceedings;

        (b) The settlement amount, and timing of payment, are
reasonable in light of the expenses, delays, and risks of
ongoing ADR proceedings, and will allow Owens to continue to
pursue, without distraction, other carriers for coverage of
asbestos "non-products" claims; and

        (c) The prompt resolution of this dispute, without the
continuation of costly ADR proceedings (and potential
litigation), is in the best interest of the Debtors' estates and
their creditors.

Under these circumstances, the Debtors believe that it is
prudent to settle their disputes with Hartford on the terms set
forth in the Settlement Agreement. (Owens Corning Bankruptcy
News, Issue No. 13; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


PACIFIC GAS: Agrees To Provide Solano With Adequate Protection
--------------------------------------------------------------
Solano Irrigation Department and Pacific Gas and Electric
Company are parties to a 1981 Power Purchase Contract. One semi-
annual $1,467,450 payment under that PPC is due in July 2001 and
another semi-annual $1,597,450 payment is due in January 2002.
These payments from PG&E secure Solano's repayment of certain
public revenue bonds used to finance the "Monticello Project."

To avoid litigating motions by Solano to compel assumption or
rejection of the PPC and whether proration of the July payment
is appropriate, the Debtor agrees to remit the July and January
payments to Solano unless the Debtor files a motion to reject or
a plan of reorganization proposing to reject the PPC on or
before November 1, 2001. The payments will constitute adequate
protection payments pursuant to 11 U.S.C. Sec. 363.

Peter S.Munoz, Esq., at Crosby, Heafey, Roach & May, P.C.,
represents Solano in the Debtor's chapter 11 proceedings.
(Pacific Gas Bankruptcy News, Issue No. 10; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


PATHNET: Judge Converts 3 Bankruptcy Cases To Chapter 7
-------------------------------------------------------
A federal judge agreed on Wednesday to convert three of six
bankruptcy cases involving Pathnet companies from chapter 11 to
chapter 7, according to the Albuquerque Journal. The Farmington,
N.M.-based Pathnet, which offered businesses in northwestern New
Mexico access to a 400-mile fiber-optic line, told customers
last month it would halt service on Aug. 1 after filing for
chapter 11 bankruptcy protection in April.

An order signed in Durango, Colo., allows chapter 7 conversion
for Pathnet Operating Inc., Pathnet Fiber Equipment LLC and
Pathnet Real Estate. It isn't clear whether the parent company's
share of the fiber-optic backbone is included in those assets.
(ABI World, July 20, 2001)


PAXSON COMMUNICATIONS: Completes $560 Million Refinancing
---------------------------------------------------------
Paxson Communications Corporation (AMEX - PAX) completed a $560
million financing consisting of a $360 million bank credit
facility and a $200 million offering of 10 3/4% Senior
Subordinated Notes, due 2008. Proceeds from the 10 3/4% Senior
Subordinated Notes offering and the initial funding under the
new bank credit facility were used to refinance all of the
company's indebtedness and obligations under its previously
existing credit facilities, the company's 11 5/8% Senior
Subordinated Notes, and the company's 12% redeemable preferred
stock, as well as pay premiums, fees and expenses in connection
with the refinancing.

Tom Severson, Senior Vice President and CFO said, "We are
pleased that we successfully refinanced our existing debt and
cash paying 12% redeemable preferred stock and we now have no
securities scheduled to mature until 2006. Our refinancing
allowed us to simplify our capital structure and reduce our cost
of this capital by nearly 200 basis points. The success of this
financing clearly reflects the strength of our core operations,
the significant value of our assets and the progress of our
strategic relationship with NBC."

The $360 million bank credit facility consists of a $25 million
revolving credit facility, maturing June 2006, a $50 million
delay draw Term A facility, maturing December 2005 and a $285
million Term B facility, maturing June 2006. The revolving
credit facility will be available for general corporate purposes
and the Term A facility will be available to fund capital
expenditures.

The 10 3/4% Senior Subordinated Notes are due in 2008 and
interest on the notes is payable on January 15 and July 15 of
each year, beginning on January 15, 2002.

The 10 3/4% Senior Subordinated Notes have not been registered
under the Securities Act of 1933, as amended, and were sold to
"Qualified Institutional Buyers" (as defined under Rule 144A
under the Securities Act) and outside of the United States in
accordance with Regulation S under the Securities Act.

                     About the Company

Paxson Communications Corporation owns and operates the nation's
largest broadcast television station group and PAX TV, the
newest broadcast television network that launched in August of
1998. PAX TV reaches 84% of U.S. prime-time television
households via nationwide broadcast television, cable and
satellite distribution systems. Paxson owns and operates 68
stations (including three stations operated under time brokerage
agreements), 51 of which operate under Joint Sales Agreements
(JSA) primarily with NBC stations in their market. In September
of 1999, Paxson entered into a strategic relationship with NBC
and through this relationship, PAX TV and NBC have shared the
premiere of the dramatic series "Mysterious Ways," special PAX
TV runs of original NBC TV movies and sports programs and the
hit prime-time quiz show, "Weakest Link." In addition, PAX TV
airs its own original programming including "Miracle Pets,"
"Twice In A Lifetime," "It's A Miracle," "Encounters with the
Unexplained," "Candid Camera" and "Doc," starring recording
artist Billy Ray Cyrus.


PHOENIX GOLD: Requests Nasdaq Hearing Regarding Delisting
---------------------------------------------------------
Phoenix Gold International, Inc. (Nasdaq: PGLD) received a
Nasdaq Staff Determination on July 13, 2001. The notice indicate
that the Company failed to comply with the market value of
public float requirement for continued listing set forth in
Marketplace Rule 4310(c)(7), and that its shares of common stock
are, therefore, subject to delisting from The Nasdaq SmallCap
Market.

The Company has requested a hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination. There
can be no assurance the Panel will grant the Company's request
for continued listing. If the Company is unable to continue its
listing on the Nasdaq SmallCap System, then the Company expects
that its shares will be listed on the OTC electronic bulletin
board. Delisting from the SmallCap Market may have an adverse
effect on the liquidity of the Company's common stock.

The Nasdaq Stock Market, Inc. had notified the Company on April
12, 2001 that they had until July 10, 2001 to regain compliance
with the minimum market value of public float requirement. If at
anytime before July 11, 2001, the Company met the market value
of public float requirement for a minimum of 10 consecutive
days, the Staff would determine if the Company complied with the
market value of public float requirement. On July 12, 2001,
Phoenix Gold reported that it had provided information to the
Nasdaq Stock Market, Inc. demonstrating it had complied with the
market value of public float requirement for 17 consecutive
trading days during the 90 calendar day grace period. In the
Staff's Determination, the Staff alleged that the Company did
not demonstrate its ability to sustain compliance. On February
16, 2001, in a similar matter, the Staff determined that the
Company complied with the market value of public float
requirement after it had met the rule for at least 10
consecutive trading days.

Phoenix Gold International, Inc. designs, manufactures, markets
and sells innovative, high quality, high performance
electronics, accessories and speakers for the audio market. The
Company sells its products under the brand names Phoenix Gold,
Carver Professional and AudioSource.


PLAYDIUM: Plans To File Financial Results After Restructuring
-------------------------------------------------------------
Playdium Entertainment Corporation (PEC) continues to anticipate
filing its December 31, 2000 annual results, March 31 and June
30, 2001 interim results upon completion of its restructuring
under the Companies' Creditor Arrangement Act.

PEC continues to operate normally at its four major locations in
Toronto, Mississauga, Edmonton and Burnaby, and at its 50 game
centres across Canada.

Playdium Entertainment Corporation is the leader in the
introduction of location-based entertainment centers in Canada
and is dedicated to developing and operating entertainment
centers worldwide. Playdium operates Playdium Mississauga,
Playdium Burnaby, Playdium Toronto and Playdium Edmonton. In
addition PEC has equipped and operates 50 game centers across
Canada.


PSINET INC.: Retains McGuireWoods As Special Bankruptcy Counsel
---------------------------------------------------------------
PSINet Inc. presents Judge Gerber with its Application for
authority to retain McGuireWoods LLP as special counsel under
Section 327(e) of the Bankruptcy Code, to handle real estate,
litigation and employment matters effective as of the Petition
Date.

McGuireWoods has represented the Debtors for the past 18 months
in general real estate, litigation and employment matters and
has also helped PSINet and PSIWeb in their efforts to recover
unpaid accounts receivable.

McGuireWoods will continue to represent the Debtors in their
lawsuits to collect the payments owed the Debtors on unpaid
accounts receivable for the services and equipment the Debtors
provided their customers.

The Debtors explain that McGuireWoods' assistance was sought
when a number of PSINet and PSIWeb commercial customers failed
to pay invoices and PSI's own collection efforts were
unsuccessful. Since last January, PSINet retained McGuireWoods
to handle all of its commercial collection efforts for amounts
in excess of $30,000. During this time, PSINet and PSIWeb, Inc.
have referred to McGuireWoods over 50 claims for legal action
against non-paying customers with aggregate value well over
$13,000,000.00, based on the damage calculations of PSINet
personnel.  The individual values of these claims range from
approximately $33,000 to over $2,000,000. Additional referrals
of significant claims are expected to continue due to the
ongoing financial turmoil in the internet and telecommunications
sectors.

Thus far, McGuireWoods has filed 27 lawsuits in the state and
federal courts of the Commonwealth of Virginia on behalf of
PSINet and/or PSIWeb to recover on the unpaid accounts
receivables of PSINet or PSIWeb. These suits are pending in
either the United States District Court for the Eastern District
of Virginia, Alexandria Division, or the Circuit Courts of
Virginia for Fairfax County and Loudoun County in the
Commonwealth of Virginia. Most of these suits must be filed in
Virginia due to the contractual agreement of the parties to
litigate all disputes exclusively in the state and federal
courts of Virginia. Future lawsuits will also be filed in these
courts; filings in other states may be needed. McGuireWoods has
secured judgments on behalf of PSINet and/or PSIWeb totaling
$3,000,000. To date, collections on these judgments or through
voluntary settlements total over $666,000.

McGuireWoods will accrue fees for services in accordance with
McGuireWoods' standard hourly rates. Currently the rates range
from $135 per hour for new associates to $475 per hour for
senior partners, and time devoted by legal assistants is charged
at billing rates currently ranging from $80 to $175 per hour,
subject to periodic adjustments to reflect economic and other
conditions. The principal attorneys and paralegals presently
designated to represent the Debtors and their current standard
hourly rates are as follows:

             Name                Position    Hourly Rate
             ----                --------    -----------
        Sean F. Murphy           Partner       $335.00
        John S. Jenkins, Jr.     Associate     $200.00
        Peter J. Haggerty        Associate     $200.00
        Matthew K. A. Heiman     Associate     $190.00
        Randall Holderfield      Paralegal     $115.00
        Rendal Himes Marino      Paralegal     $125.00
        Douglas B. Plocki        Law Clerk     $125.00

Stephen W. Robinson, a member of McGuireWoods, informs the Court
that the clients of McGuireWoods include the Debtors' security
holders, lessors or other parties to their financial
instruments, but McGuireWoods only renders service to these
parties in matters unrelated to the Debtors or the PSINet
chapter 11 cases. For example, McGuireWoods represents lessors
of equipment to the Debtors including Bombardier, American
Finance Group, Bank of America, Banc One Leasing, GE Capital
Corporation, GMAC, Lucent Technologies and Newcourt Financial
(or their affiliates or subsidiaries). Mr. Robinson assures that
McGuireWoods does not presently and will not in the future
represent any such creditors in connection with the Debtors or
these cases.

Mr. Robinson also reveals that McGuireWoods and the partners and
associates of McGuireWoods currently represent, and may in the
future represent the creditors or equity security holders (or
their respective affiliates or subsidiaries) of the Debtors in
matters unrelated to the Debtors or their bankruptcy cases.
Specifically, McGuireWoods has represented, currently represents
and/or may represent in the future Wachovia Bank, N.A., Bank of
America, NA., First Union National Bank, LaSalle National Bank,
Key Bank, NA., Chase Manhattan Bank, ABN AMRO Bank, N.Y., State
Street Bank and Trust Company, and the Bank of New York (or
their affiliates or subsidiaries). Mr. Robinson submits that
McGuireWoods has not, and will not, represent these banks, or
any of their affiliates or subsidiaries, in matters related to
the Debtors or these Chapter 11 cases.

In addition, McGuireWoods has represented, currently represents,
and/or may represent in the future certain of the 20 largest
unsecured creditors of the Debtors (e.g, Donaldson, Lufkin &
Jenrette, EMC Corporation, Verizon Communications, Inc. and AT&T
or their affiliates or subsidiaries) in matters unrelated to the
Debtors. McGuireWoods has not, and will not, represent such
creditors, or any of their affiliates or subsidiaries, in
matters related to the Debtors or these Chapter 11 cases, Mr.
Robinson avers.

As part of its practice, McGuireWoods appears in cases,
proceedings and transactions involving many different attorneys,
accountants and investment bankers, some of which may represent
claimants and parties in interest in the PSINet cases. Among the
firms that McGuireWoods has represented are Morgan Stanley,
Donaldson, Lufkin & Jenrette, Bear, Stearns, Morgan & Stanley
Co., Merrill Lynch, Pierce, Fenner & Smith, Price Waterhouse
Coopers LLP, Goldman Sachs & Co., or their affiliates or
subsidiaries. Mr. Robinson again assures that, to the best of
his knowledge, McGuireWoods does not presently, has not in the
past and will not in the future represent any such entity any
lawyer or accountant, in connection with the PSINet Chapter 11
cases. To the extent that McGuireWoods discovers any such
relationship, it will immediately disclose the same to the
Court, Mr. Robinson covenants on behalf of McGuireWoods.

Mr. Robinson directed that a general inquiry be made to all
attorneys employed by McGuireWoods in its large legal practice,
approximately 600 in number in more than 15 cities, to determine
whether such individuals own any securities or debt of Debtors.
Pursuant to such inquiry, Mr. Robinson discloses he owns or
controls 5,000 shares of PSINet stock. Two other attorneys in
the firm own approximately 1,400 shares of PSINet Inc. stock.
The number and value of all such shares is de minimis in the
context of these cases. Moreover, none of the individuals who
would be active in these cases owns sufficient stock or debt to
influence such holder of securities or debt in any discernible
way.

Mr. Robinson advises that, prior to June 1, 2001, McGuireWoods
had received from the PSINet or PSINet affiliates, payments
aggregating approximately $373,000 for McGuireWoods professional
services rendered for the Debtors and disbursements and charges
incurred in connection with those services. Mr. Robinson also
advises that McGuireWoods did receive a prepetition retainer
from the Debtors of $50,000 for its representation of PSINet and
PSIWeb in these ongoing collection cases. No agreement exists,
and no agreement will be made, to share any compensation
received by McGuireWoods for its services to the Debtors with
any other person or firm.

McGuireWoods has informed the Debtors that, except as described
in the Affidavit submitted by Stephen W. Robinson, a member of
McGuireWoods, the firm (i) does not hold or represent any
interest adverse to the Debtors or their estates with respect to
the matters for which McGuireWoods is to be retained, and (ii)
does not have any "connections," as contemplated within
Bankruptcy Rule 2014(a), with the Debtors, creditors and any
other party in interest, their respective attorneys and
accountants, the U.S. Trustee or any person employed in the
Office of the U.S. Trustee, with respect to the matters on which
McGuireWoods is to be retained.

Based on the reasons and information as described in the
application, the Debtors submit that the retention of
McGuireWoods with respect to real estate, litigation and
employment matters is necessary and in the best interests of the
Debtors and their estates, their creditors and all other parties
in interest. (PSINet Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


RELIANCE GROUP: Bank Committee Taps White & Case As Counsel
-----------------------------------------------------------
The Official Unsecured Bank Committee asks for permission to
retain White & Case as its counsel in Reliance Group Holdings,
Inc.'s chapter 11 cases, nunc pro tunc to the date the Committee
was formed.

At a meeting held on June 22, 2001, the Bank Committee elected
Mr. Thomas Dinneen at Chase Manhattan Bank to serve as Chairman
and voted to hire W&C as its lawyers.

Around July 14, 2000, Mr. Dinneen relates, the Bank Group
retained W&C to represent it in connection with the
investigation of the financial condition of the Debtors and
consideration of options available to the Bank Group.  W&C has
represented the Bank Group throughout these discussions
culminating in the Term Sheet agreed to shortly before the
filing.  As part of the representation of the Bank Group, W&C
became fully familiar with the legal structure of the Debtors,
their financial affairs and various legal issues which are
important in the context of these cases.

Specifically, the Bank Committee will look to White & Case:

       (a) to assist, advise and represent the Committee in its
consultations with the Debtors regarding the administration of
the case;

       (b) to assist, advise and represent the Committee in any
investigation of the acts, conduct, assets, liabilities and
financial condition of the Debtors and its affiliates (including
investigation of transactions entered into or completed before
the Petition Date), the operation of the Debtors' business and
any other matters relevant to the case or to the formulation of
a plan of reorganization;

       (c) to assist, advise and represent the Committee in its
participation in the negotiation, formulation and drafting of a
plan of reorganization;

       (d) to prepare on behalf of the Committee necessary
motions, applications, answers, orders, reports and papers in
connection with the administration of this case;

       (e) to review and respond on behalf of the Committee to
motions, applications, complaints and other documents served by
the Debtors or other parties in interest on the Committee in
this case; and

       (f) to assist, advise and represent the Committee in the
performance of all of its duties and powers under the Bankruptcy
Code and the Bankruptcy Rules and in the performance of such
other services as are in the interests of those represented by
the Committee.

Andrew DeNatale, Esq., states that W&C has no connection with
the Debtors, their creditors, any other parties in interest, or
their respective attorneys and accountants, or with the United
States Trustee or any person employed in the office of the
United States Trustee, except that (a) W&C represents the
Committee in these cases and has represented the Bank Group
through its representation of The Chase Manhattan Bank, N.A., as
Agent, under the Credit Agreement, in the restructuring efforts
which led up to filing of these Chapter 11 cases, (b) W&C
represented clients in actions brought against the Debtors or
their affiliates five or more years ago, (c) W&C represents
certain of the Debtors' creditors and other parties in interest
in matters unrelated to these proceedings, (d) W&C has
represented clients in actions brought by the Debtors or their
affiliates, (e) W&C has represented participants and the issuers
of letters of credit supporting transactions of the Debtors or
their affiliates or issued to the benefit of the Debtors or
their affiliates, (f) W&C has represented clients where
affiliates of the Debtors issued insurance policies which were
drawn upon as a result of the claims asserted, (g) W&C
represented a client in the purchase of securities and an option
from an affiliate of the Debtors, (h) W&C represented a client
who acted as placement agent on a commercial paper facility
which was used to fund an entity which purchased insurance
premium financings from an affiliate of the Debtors, (i) certain
members and attorneys of W&C prior to joining W&C provided
advice to Reliance Insurance Company in respect of a proposed
liability insurance program.

White & Case attorneys will bill at it's customary hourly rates
for services rendered on the Bank Committee's behalf:

            Andrew DeNatale      $600
            David Koschik        $595
            J. William Dantzler  $570
            David Joyce          $550
            Karen Burns          $410
            Richard Liskov       $400
            Richard Hayes        $370
            Heidi Lawson         $360
            Jack Rose            $360
            Scott Krokoff        $300

Other attorneys and legal assistants may from time to time
render services to the Debtors in connection with these cases at
their then current hourly rates.  W&C will expect to be
reimbursed for all photocopying charges, witness fees, travel
expenses, certain secretarial and other overtime expenses,
filing and recording fees, long distance telephone calls,
postage, express mail and messenger charges, computerized legal
research charges and other computer services, expenses for
"working meals" and telecopier charges.

Since August 19, 1998, W&C and certain of its partners,
associates and legal assistants have rendered services to the
Bank Group. Since July 14, 2000, services relating to this
restructuring have been rendered to the Bank Group. W&C has been
paid for all estimated accrued time and expenses on behalf of
the Bank Group through June 7, 2001. The final bill was an
estimate; if W&C has overcharged the Debtors it will return any
overage, and if W&C has underestimated the bill, it will apply
the arrearages against a previously delivered cash retainer from
the Debtors in the amount of $250,000.00. The remainder of the
Retainer will be applied against fees and expenses to be
submitted for this Court's approval. (Reliance Bankruptcy News,
Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900)


SAFETY-KLEEN: Signs Consent Decree On Divex Superfund Site
----------------------------------------------------------
Safety-Kleen Corporation asks Judge Peter Walsh, on behalf of
Safety- Kleen (Lone and Grassy Mountain), Inc., to permit Grassy
Mountain to enter into a consent decree with (i) the United
States of America on behalf of, among others, the United States
Environmental Protection Agency, (ii) the South Carolina
Department of Health and Environmental Control, and (iii)
certain other potentially liable parties, and authorize Grassy
Mountain to make payments under the terms of this Decree, in
connection with the Divex, Inc., Superfund site located in
Columbia, South Carolina.

The Divex Site is a former munitions disposal facility that
required environmental cleanup and remediation as a result of
various hazardous substances deposited at the facility. Cleanup
and waste removal activities at the Divex Site have included,
among others, the destruction of explosives and military
ordinance, waste segregation and consolidation, on-site chemical
treatment, and off-site disposal of substantial quantities of
hazardous or potentially hazardous materials. The cleanup has
been completed and future remedial work appears to be necessary.

Grassy Mountain is a potentially responsible party in connection
with being the generator, transporter or arranger of hazardous
material at the Divex Site. In connection with negotiations to
resolve issues at the Divex Site without litigation, the EPA
provided Grassy Mountain with several cost matrices spreadsheets
identifying each PRP's responsibility with respect to the Divex
Site. Grassy Mountain's alleged responsibility relates to
services Grassy mountain previously performed for a co-PRP,
Lawrence Livermore National Laboratories, as well as Grassy
Mountain's direct shipment of certain cylinders allegedly
disposed at the Divex Site.

After extensive negotiations, Grassy Mountain, the other
settling defendants, the United States, and SCDHEC have reached
an agreement as to the (a) aggregate settlement amount to be
paid by Grassy Mountain and the other settling defendants, and
(b) proportional allocated amounts to be paid by each PRP, which
obligations are joint and several under the Consent Decree.

The Debtors are under intense pressure from the other settling
defendants to confirm that Grassy Mountain will make all
required payments in connection with past response costs at the
Divex Site and be bound by the Consent Decree. Failure to do so
would jeopardize the settlement embodied in the Consent Decree -
which only resulted from protracted and difficult negotiations -
and send a potentially crippling message to the Debtors' other
customers, spreading uncertainty and doubt throughout the
hazardous waste industry about the Debtors' intentions to
fulfill their environmental obligations.

The Consent Decree provides:

      Payments. The settling defendants will pay to the EPA
Hazardous Substance Superfund the aggregate amount of $1,067,811
in reimbursement of past response costs, plus an additional sum
for interest on that amount calculated from the date of past
response costs through the date of payment. In addition, the
settling defendants will pay to the SCDHEC $7,189 in
reimbursement of SCDHEC past response costs. In the event that
any payment required to be paid is not received when due,
interest shall continue to accrue on the unpaid balance through
the date of payment.

Based on a Notice of Intent dated in January 2001, the Debtors
expect that Grassy Mountain's allocated liability will be
approximately $225,000, plus de minimus interest thereon.

      Penalties. If any amounts due to EPA or to the SCDHEC under
the Consent Decree are not paid by the required date, the
settling defendants will pay to EPA or to the SCDHEC, as
applicable, a stipulated penalty, in addition to certain
interest, of $500 per violation per day that such payment is
late.

      Joint and Several Liability. The obligations of the
settling defendants to pay amounts owed the EPA and SCDHEC under
the Consent Decree are joint and several. In he event of the
failure of any one or more settling defendants to make the
payments required under the Consent Decree, the remaining
settling defendants will be responsible for such payments.

      Covenants Not to Sue. Except as specifically provided
otherwise, the United States and SCDHEC covenant not to sue or
take administrative action against the settling defendants under
CERCLA or any contractual indemnification to recover past
response costs and SCDHEC past response costs, as applicable.
These covenants not to sue will only take effect upon receipt by
EPA and SCDHEC of all required payments under the Consent
Decree.

      Reservation of Rights. The United States and SCDHEC
reserve, and the Consent Decree is without prejudice to, all
rights against the settling defendants with respect to all other
matters, including (1) liability for failure of the settling
defendants to meet any requirements of the Consent Decree;; (2)
liability for damages for injury to, destruction of, or loss of
natural resources, and for the costs of any natural resources
damage assessments; (3) criminal liability; (4) liability for
injunctive relief or administrative order enforcement; and (5)
liability for costs incurred or to be incurred by the United
States or SCDHEC that are not within the parameters of the
Consent Decree.

             Probability of Success of Litigation

The Plaintiffs have asserted various claims for, among other
things, reimbursement to the EPA Hazardous Substance Superfund
and SCDHEC for response costs incurred, or in connection with
the release or threatened release of hazardous substances, at
the Divex Site. By entering into the Consent Decree, Grassy
Mountain does not concede the merits of these claims. Absent
entry into the Consent Decree, however, Grassy Mountain would be
forced to defend against these claims at a significant cost to
the estate. Although the Debtors believe that the automatic
bankruptcy stay is applicable, Grassy Mountain would be forced
to participate in the litigation against the other settling
defendants to prevent its interests from being prejudiced in
connection with the determination of relative liabilities. In
any event, Grassy Mountain would ultimately require discovery
and litigation to liquidate these various claims. Further, given
its inherent uncertainties, litigation could result in one or
more awards against Grassy Mountain significantly greater than
the settlement costs under the Consent Decree. Further,
litigation would require voluminous discovery and depositions of
numerous expert witnesses with respect to various site issues,
the possibility of a lengthy trial, and appeals to determine the
nature and extent of the liability of Grassy Mountain, if any.
This would involve substantial amounts of money and time, and
could result in an adverse judgment in an amount far in excess
of these settlement amounts.

Rather than litigation, Grassy Mountain and the other settling
defendants have agreed to resolve these claims under valuations
that the Debtors believe to be in the best interests of Grassy
Mountain's estate and its creditors. The businesses of Grassy
Mountain and the other Debtors are heavily regulated and neither
Grassy Mountain nor the other Debtors can afford an adversarial
relationship with their regulators. Consequently, the Debtors
remain steadfast in their desire to be environmentally compliant
and to meet their Superfund obligations.

Agreeing with the Debtors' arguments, and recognizing the
practical requirements of speed, Judge Walsh promptly enters an
Order granting the requested relief. (Safety-Kleen Bankruptcy
News, Issue No. 18; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


TELIGENT INC.: Three Phone Firms Show Interest In Assets
--------------------------------------------------------
Verizon, WorldCom and IDT Corp. may be interested in bidding for
all or part of New York-based Teligent Inc., a phone and data
concern that sought bankruptcy-court protection in May, The Wall
Street Journal reported. The newspaper said IDT had already
submitted a bid. The report also said people close to the
situation say Verizon is negotiating for some of Teligent's
assets, and it is not clear whether WorldCom has bid or has just
looked at the company's books. IDT acknowledges having made a
bid, but a company spokesman declined to discuss the details,
the newspaper said.

Sources said that there is a chance that a small group of
investors could try to buy the company and reinstate former
Chairman and Chief Executive Alex Mandl, but that outcome is
seen as unlikely although the investors and Mandl are
considering it. The newspaper's sources said investment bank
Friedman Billings Ramsey Group Inc. has also expressed an
interest in Teligent, but it was unclear what role the firm
would play in any bid. (ABI World, July 20, 2001)


THINKPATH: Asks Nasdaq Panel to Review Delisting Determination
--------------------------------------------------------------
Thinkpath, Inc. (Nasdaq:THTH), an IT and engineering services
firm, said that the Nasdaq stock market has notified the Company
that its common stock will be subject to delisting, pending the
outcome of a hearing as described below.

Thinkpath received a Nasdaq Staff Determination on July 20, 2001
indicating that the Company is not in compliance with the bid
price requirements for continued listing, as set forth in
Nasdaq's Marketplace Rule 4310(c)(8)(B).

As permitted by Nasdaq, Thinkpath will request a hearing before
a Nasdaq Listing Qualifications Panel to review the Staff
Determination. There can be no assurances that the Panel will
grant the Company's request for continued listing. The Company's
stock will continue to be listed on Nasdaq pending the outcome
of the hearing.

                      About Thinkpath Inc.

Thinkpath is a provider of IT & engineering services, offering a
blended suite of outsourcing, recruiting, training and
technology to enhance the resource performance of large and
high-growth corporations. Thinkpath clients include Microsoft,
General Motors, Goldman Sachs, and Cummins. Thinkpath has 500
employees in 18 offices across North America. Further
information about the company, its services and products can be
found at http://www.thinkpath.com


TRISM, INC.: Downsizing Operations To Reduce Costs
--------------------------------------------------
TRISM, Inc. (OTC Bulletin Board: TSMX.OB) reports their actions
to exit the segments of its business in general freight and
hazardous waste that have caused the Company to be unprofitable
over the last two years. Bill Culbertson, Chief Operating
Officer, will lead the downsizing effort.

In the future, Trism will concentrate on its core profitable
businesses in heavy haul, government munitions, commercial
explosives, and radioactive waste. As part of this effort, the
Company has reached agreements with Mercedes-Benz Credit Corp.
and its other equipment lenders to reschedule certain equipment
payments and to return excess tractors. Other related activities
to reduce operating costs will include the sale of excess
trailers, the closing of several terminal facilities and the
elimination of non-driver personnel.

TRISM, Inc. (http://www.trism.com), headquartered in Kennesaw,
GA., is the nation's leading transportation company specializing
in the transportation of heavy weight, over-dimensional,
environmental, and secured materials. The company operates a
pool of more than 1,300 tractors and over 4,000 trailers
throughout North America. The multiple specialized equipment in
these fleets is designed to meet customers' varied
transportation requirements.


UNITEL VIDEO: Asset Sale Proceeds Not Enough To Pay Down Debts
--------------------------------------------------------------
Unitel Video Inc. and the other Debtors under their bankruptcy
filing have sold substantially all of their businesses and the
total amount of secured and unsecured claims against the Company
and the other Debtors in the Cases substantially exceeds the
amount of their assets. The Company and the other Debtors filed
a liquidating plan of reorganization with the Court on July 11,
2001.


USG CORP.: U.S. Trustee Appoints Unsecured Creditors' Committee
---------------------------------------------------------------
The United States Trustee appoints these nine unsecured
claimants to serve on an Official Committee of Unsecured
Creditors in USG Corporation's chapter 11 cases:

            Unimast, Inc.
            4825 N. Scott #300
            Schiller Park, IL 60176
                 Attn: Steven K. Myers
                       Ph: 847-928-3400 Ext.404
                       Fax:847-928-1099

            Weirton Steel Corp.
            400 Three Springs Drive
            Weirton, WV 26062
                 Attn: Jeffrey H. Fischer
                       Ph: 304-797-2000
                       Fax: 304-797-2048

            Coastal Transport, Inc.
            P.O. Drawer 67
            Auburndale, FL 33823
                 Attn: J.W. Taylor, Assistant Gen. Counsel
                       Ph: 863-967-1101 Ext.7036
                       Fax:863-965-2918

            National City Bank of Indiana
            As Indenture Trustee
            101 West Washington St Suite 655 South
            Indianapolis, IN 46255
                 Attn: Catherine S. Krug
                       Ph: 317-267-7789
                       Fax: 317-267-7658

            Wells Fargo Bank Northwest, N.A.
            As Indenture Trustee
            608 2nd Ave South
            MAC N9303-120
            Minneapolis, MN 55402
                 Attn: Lisa A. Miller
                       Ph: 612-667-1916
                       Fax: 612-667-1928

            Third Avenue Value Fund
            767 Third Ave 5th Floor
            New York, NY 10017
                 Attn: David M. Barse
                       Ph: 212-888-5222
                       Fax: 212-888-6704

            Citibank
            599 Lexington Ave, 21st Floor
            New York, NY 10043
                 Attn: Randy Thornton
                       Ph: 212-559-7861
                       Fax: 212-493-9470

            Bank of America, N.A.
            231 S. LaSalle St.
            Chicago, IL 60697
                 Attn: Raju N. Patel
                       Ph: 312-828-7225
                       Fax: 312-987-0303

            The Chase Manhattan Bank/Morgan Guaranty Trust Co.
            380 Madison Ave.
            New York, NY 10017
                 Attn: Charles O. Freegood
                       Ph: 212-622-4854
                       Fax:212-622-4834

Frank J. Perch, III, Esq. (302-573-6491, Fax: 212-622-4834) is
the attorney for the United States Trustee assigned to monitor
USG's chapter 11 proceedings. (USG Bankruptcy News, Issue No. 4;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


US OFFICE: Sells USRefresh Unit To All Seasons For $23.3 Million
----------------------------------------------------------------
Bankrupt U.S. Office Products Co., an office supply company,
received court approval from the U.S. Bankruptcy Court in
Wilmington, Del., to sell its USRefresh vending unit to All
Seasons Services Inc. for $23.3 million, according to Dow Jones.
U.S. Office Products, which had $2.5 billion in sales last year,
filed for chapter 11 bankruptcy protection in March. U.S. Office
Products is the former owner of Mail Boxes Etc. U.S. Office
Products sold Mail Boxes last year to United Parcel Service Inc.
(UPS). (ABI World, July 20, 2001)


VLASIC FOODS: Employs Towers Perrin As Consultants
--------------------------------------------------
Vlasic Foods International, Inc. seeks the Court's authority to
employ and retain Towers, Perrin, Forster & Crosby, Inc., as
consultants.

Joseph Adler, Vice-President and controller of Vlasic Foods
International Inc., explains they need Towers' consulting
services with respect to financial reporting, program design,
regulatory compliance and administrative services related to the
ongoing operation of their human resource programs.

According to Mr. Adler, Towers previously rendered consulting
services to the Debtors and they need knowledgeable consultants
to render these essential professional services.

In order to avoid duplication of services with the other
professionals retained in these Chapter 11 cases, Mr. Adler
assures Judge Walrath that Towers will solely provide consulting
services only at their request and direction.  Mr. Adler adds
Towers will also work closely with them and their counsel.
Towers' services are, but not limited to:

       (a) financial and tax reporting for retirement plans;

       (b) financial and tax reporting for post-retirement
           welfare plans;

       (c) forecasting of benefit plan expenses and cash flows;

       (d) benefit calculation support;

       (e) maintenance of retirement systems;

       (f) pension and welfare plan administration assistance and
           advice; and

       (g) actuarial services.

Mr. Adler emphasizes that the services of Towers are critical to
their ability to maintain their human resource programs.
Without the continued advice and assistance of Towers, Mr. Adler
says, the company, their creditors, their estates and all
parties-in-interest would be prejudiced by the time and expenses
accompanying any change in consultants at this time.

Donald R. Fleischer, a principal of the firm Towers Perrin
Forster & Crosby, assures Judge Walrath they do not hold any
interest adverse to the Debtors, their estates, their creditors
or any other party-in- interest to these cases, or their
respective attorneys, or the United States Trustee or anyone
employed in the Office of the United States Trustee in matters
for which Towers is proposed to be retained.

Mr. Fleischer admits that Towers may represent or have
represented certain of the Debtors' creditors or other parties-
in-interest, but only in matters unrelated to these Chapter 11
cases.

Mr. Fleischer insists that Towers is a "disinterested person".
In case there will be additional information regarding the
Debtors or any other pertinent relationships that come to
Towers' attention, Mr. Fleischer promises to immediately file a
supplemental affidavit to the Court.

Subject to court approval, Towers will charge the Debtors its
normal hourly rates for its services:

            Senior consultants            $400 to $500
            Consultants                   $300 to $400
            Associates                    $150 to $300
            Interns                        $75 to $150

Towers hourly rates are revised from time to time, Mr. Fleischer
notes. Aside from the fees, Mr. Fleischer adds, Towers will also
charge the Debtors for reasonable expenses such as long distance
telephone charges, hand delivery and other delivery charges,
travel expenses, computerized research, transcription costs, and
photocopying charges. Since they do not have the capacity to
track certain expense charges, Mr. Fleischer says, Towers will
also charge the Debtors an administrative load, equal to 6.5% of
the total hourly charges, to cover such expenses.  The firm also
intends to seek compensation and reimbursement of expenses
before the Court.

According to Mr. Fleischer, the Debtors owe them $16,421 for
pre-petition consulting services.  No retainer has yet been
received for Towers services' in these chapter 11 cases, Mr.
Fleischer adds. Nevertheless, Mr. Fleischer reiterates, Towers
is more than capable of providing objective and professional
services to the Debtors. (Vlasic Foods Bankruptcy News, Issue
No. 8; Bankruptcy Creditors' Service, Inc., 609/392-0900)


W.R. GRACE: Bankruptcy Judge Delays Ruling On Claims Issue
----------------------------------------------------------
Bankruptcy Judge Joseph J. Farnan Jr. delayed ruling on a claims
issue that could affect disbursements to creditors in the W.R.
Grace & Co. case, Dow Jones reported. Due to his full schedule,
Judge Farnan said he wouldn't hear oral arguments related to the
issue but would instead rely on briefs that attorneys already
submitted to the court. A hearing on the issue has been
scheduled for Aug. 2.

Judge Farnan's decision delays a ruling that will affect Grace's
chapter 11 case. At issue is whether or not asbestos claimants'
committees are too biased to be involved. Grace said in a recent
court filing that a committee representing the unsecured
creditors in its chapter 11 case before filing any such suit
should evaluate the merits of the claims. Unlike the two
asbestos committees, Grace said this committee has no disabling
conflict of interest preventing it from independently evaluating
the merits. The Columbia, Md.-based W.R. Grace and 61 of its
affiliates filed for chapter 11 bankruptcy protection on April
2, listing assets of $2.5 billion and debts of $2.57 billion.
(ABI World, July 20, 2001)


WARNACO INC.: Retains BDO Seidman As Accountants
------------------------------------------------
The Warnaco Group, Inc. seeks to employ and retain BDO Seidman
as their bankruptcy consultants and accountants in these Chapter
11 cases, nunc pro tunc to the Petition Date.

BDO Seidman is an international accounting and consulting firm
which has over 500 offices located in 90 countries.

According to Warnaco Vice-President Stanley Silverstein, the
Company entered into a letter agreement with BDO Seidman last
June 13, 2001 outlining the terms and conditions upon which BDO
Seidman would be retained:

       (a) assistance in the preparation of the Statement of
Financial Affairs and Schedules for the Debtors;

       (b) assistance in the preparation of monthly operating
reports for the Debtors;

       (c) additional assistance in the financial and accounting
analysis required in connection with various bankruptcy matters
as agreed to with the Debtors, including but not limited to:

            (i) review and analysis of reclamation claims;
            (ii) preparation of preference analyses;
            (iii) claims analyses; and
            (iv) calculation of lease damage claims.

       (d) rendering such other assistance as the Debtors may
deem necessary.

Subject to the Court's approval, BDO Seidman will charge the
Debtors for its services on an hourly basis.  Their billing
rates are usually revised from time to time.  Currently their
rates range from:

       Partners         - $330 to $550 per hour
       Senior managers  - $215 to $480 per hour
       Managers         - $195 to $330 per hour
       Seniors          - $140 to $245 per hour
       Staff            - $ 85 to $185 per hour

Jerry D'Amato, a member of the firm BDO Seidman, says they will
also charge the Debtors for expenses at actual costs incurred,
including copying, travel, telephone, computer rental, etc.

Mr. Silverstein tells the Court that they have not yet given BDO
Seidman a retainer and the firm did not render services to the
Debtors during the past year prior to the Petition Date.

Mr. D'Amato advises the Debtors that BDO Seidman intends to
apply to the Court for allowance of compensation for
professional services rendered and reimbursement of charges,
costs and expenses incurred in these Chapter 11 cases.

Mr. D'Amato assures Judge Bohanon that BDO Seidman does not hold
any interest adverse to the Debtors in the matter upon which
they are to be engaged.  BDO Seidman is a "disinterested
person", Mr. D'Amato claims.  Mr. D'Amato promises to file a
supplemental affidavit if BDO Seidman discovers additional
information that requires disclosure. (Warnaco Bankruptcy News,
Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900)


WEBLINK WIRELESS: Obtains $15 Million DIP Financing
---------------------------------------------------
WebLink Wireless, Inc. (OTC Bulletin Board: WLNKA) has won
approval by the U.S. Bankruptcy Court of $15 million of debtor-
in-possession (DIP) financing. The financing will be provided by
the two principal lenders in the company's currently outstanding
bank credit facility. The DIP financing is secured by a
superpriority lien on substantially all of the company's assets,
matures on December 31, 2001, and is conditioned on compliance
with financial and other covenants.

"We are very pleased to get the DIP financing finalized," said
John Hauge, the company's Senior Vice President, Finance and
Chief Financial Officer. "We can now focus our full attention on
our operations and developing our plan for emergence from
Chapter 11."

In conjunction with the order approving the DIP financing, the
U.S. Bankruptcy Court also issued an agreed scheduling order
providing that the company will, as planned, take steps to
proactively seek a standalone transaction with new financing or
a merger or sale transaction upon which the company expects to
base a plan for emergence from Chapter 11. Borrowings under the
DIP financing are also conditional upon the company's compliance
with the scheduling order.

WebLink Wireless, Inc. is a leader in the wireless data
industry, providing wireless email, wireless instant messaging,
information on demand and traditional paging services throughout
the United States. The Company's nationwide 2-way network is the
largest of its kind reaching approximately 90 percent of the
U.S. population and, through a strategic partnership, extends
into Canada. The Dallas-based company, which serves
approximately 2 million customers, recorded total revenues of
$290 million for the year ended December 31, 2000. For more
information, visit the website at http://www.weblinkwireless.com


WHEELING-PITTSBURGH: Has Until Jan. 12, 2002 To Decide On Leases
----------------------------------------------------------------
Wheeling-Pittsburgh Steel Corp. sought and obtained a further
extension of their time within which to decide whether they
should assume, assume and assign, or reject unexpired leases of
non-residential real property.

Since the Petition Date, the Debtors have been dealing with a
multitude of complex supply, employee and contract issues that
typically arise in large and complicated chapter 11 cases.
Simultaneously, the Debtors have been stabilizing operations and
working towards the ultimate goal of constructing a plan of
reorganization by: (a) working diligently to determine whether
any third parties have an interest in acquiring all or a part of
the Debtors or their facilities, and (b) investigating
thoroughly various possible reconfigurations of the Debtors'
business that would support continued operation as a stand-alone
business.

The Debtors remind the Court that they have been working
diligently to continue to stabilize operations, reduce costs,
and construct a plan or plans of reorganization. In addition,
the Debtors have proposed a settlement with WHX Corporation, and
a sale of the assets of Pittsburgh-Canfield to WHX Corporation.

The sheer size and volume of these chapter 11 cases and the
complex nature of the reorganization issues involved justify a
further extension of the period provided under the Code to
assume or reject. In addition, the decision to assume or reject
the leased properties is central to any plan or plans of
reorganization, but the Debtors have not had the time necessary
to intelligently appraise their financial situation and the
potential value of their assets in terms of the formulation of a
plan of reorganization. The leased properties constitute a
number of business properties and the Debtors need additional
time to determine whether to assume or reject these leases.

The Debtors assure Judge Bodoh that, to the best of the Debtors'
knowledge, they have complied with all of their postpetition
obligations under the leases, and are paying their other
postpetition obligations as they become due, negotiating in good
faith with their creditors, keeping the Official Committees
fully apprised of their work and progress toward reorganization,
and are not seeking the extension to pressure creditors into
accepting an unsatisfactory plan.

Based on these arguments, Judge Bodoh held that the Debtors make
their case for a further extension of their time to decide
whether to assume or reject unexpired leases of non-residential
real property for an additional 180 days, to and including
January 12, 2002. (Wheeling-Pittsburgh Bankruptcy News, Issue
No. 8; Bankruptcy Creditors' Service, Inc., 609/392-0900)


WILLIAMS COMM.: Moody's Cuts Senior Unsecured Rating to Caa1
------------------------------------------------------------
Moody's Investors Service has lowered the senior unsecured
rating of Williams Communication Group, Inc. (WCG) to Caa1 from
B2.

The rating downgrade reflects Moody's concern regarding WCG's
recent operating results, which fall short of its expectations.
Moody's also believes that these results may yet be further
impacted by the general economic slowdown, by the broad-based
scaling back of spending plans within the telecom sector, in
particular.

Ratings downgraded are as follows:

Williams Communication Group, Inc.'s

      * Issuer rating to Caa1 from B2
      * Senior Implied rating to B3 from B1
      * Senior Secured Bank facility to B2 from Ba3
      * Senior Subordinated Shelf to (P) Caa2 from (P)B3
      * Senior Unsecured Shelf (P)Caa1 from (P)B2

Ratings Confirmed:

      * Preferred Shelf rated (P)"caa"
      * Preferred Stock rated "caa"

Williams Communications Group Note Trust's

      * Senior Secured notes rated Baa3

The outlook remains negative. Ratings could be lowered if WCG's
financial performance and liquidity position continues to face
increasing pressure. Approximately $6 billion of debt securities
are affected.

Although the company denotes that its operational performance
continues to demonstrate strong execution to plan, Moody's
considers that its revised guidance and decision to reduce the
size of its work-force is a signal that the company is affected
by the sector-wide difficulties experienced by the wireline
telecom service providers, Moody's said.

However, Moody's believes that WCG would probably scale back on
future capital investments if it faces any protracted softness
in its revenue ramp. With its network build-out substantially
complete, WCG's future capex is largely success based. While the
implementation of a flexible capital spending plan would permit
the conservation of cash, Moody's notes that the underlying
downsized business model would likely further delay the
attainment of positive free cash flow.

Williams Communications Group is headquartered in Tulsa,
Oklahoma.


WINSTAR COMM.: Rejecting 25 Office.com Executory Contracts
----------------------------------------------------------
As part of their attempt to reorganize and regain profitability,
Office.com seeks to reject 25 individual executory contracts
with:

     a) Commtouch Inc.
     b) Data Broadcasting Corporation
     c) Knight Ridder/Tribune News Service
     d) Market Guide Inc.
     e) TBWA/Agency Inc.
     f) LooksSmart Limited (Sub-Site Listing Agreement)
     g) LooksSmart Limited (Transaction Fee Agreement)
     h) Dun & Bradstreet Inc.
     i) Reuters NewsMedia Inc.
     j) The Gale Group Inc.
     k) Alta Vista Company
     l) AccuWeather Inc.
     m) Dow Jones & Company
     n) EoExchange Inc.
     o) Rowecom Inc.
     p) Comtex Scientific Corporation
     q) Information Inc.
     r) eCal Corporation
     s) Big Resources Inc. (covering Freewarefiles.com Site)
     t) Big Resources Inc. (covering the Big Resources Web sites)
     u) Big Resources Inc. (covering Freewebtemplates.com Site)
     v) MarketWatch.com Inc.
     w) Money.net Inc. (Internet Services Agreement)
     x) Money.net Inc. (Small Business Center Agreement)
     y) Primary Knowledge

Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor,
relates these contracts are no longer necessary or beneficial to
Office.com. To avoid accumulation of administrative costs, Ms.
Morgan contends, it would be in Office.com's interest to reject
these contracts.  According to Ms. Morgan, Office.com has
already sent a notice to all parties to each contract that their
services are no longer required.

By motion, Office.com also asks Judge Farnan to set the
rejection date as the earliest of (i) the date of the filing of
this motion and (ii) the date Office.com notified the
counterparties to the contracts to stop providing services to
Office.com.  (Winstar Bankruptcy News, Issue No. 8; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


YES CLOTHING: NewBridge Capital Holds 88.2% Equity Stake
--------------------------------------------------------
NewBridge Capital, Inc. of Newport Beach, California, discloses
that it beneficially owns 32,685,147 shares, or 88.2%, of the
outstanding common stock of Yes Clothing Company.

The principal business of NewBridge Capital is that of a
corporation which consists of managing its own investments, and
performing advisory services for other entities, including
management of advisory agreements, investments of these
entities, in addition to seeking new business opportunities for
them.

On June 30, 1999, NewBridge Capital, Inc. f/k/a Scientific NRG,
Inc. entered into an asset purchase agreement with NuVen
Capital, L.P., which resulted in NewBridge acquiring certain
assets of NuVen in exchange for 22,344,652 shares of NewBridge
common stock valued at $10,090,793. NuVen's assets included,
among other things, 3,514,693 shares of Yes Clothing Company,
Inc.'s common stock valued at approximately $.03 per share, for
a total investment at fair market value of $91,382.

On February 15, 2000, NewBridge acquired 1,277,005 shares of Yes
Clothing Company, Inc. Series A Convertible Preferred Stock from
an unrelated entity for $125,000.

On September 15, 2000, NewBridge converted 177,005 shares of
Series A Convertible Preferred Stock into 5,779,213 shares of
Yes Clothing Company, Inc.'s common stock.

On June 7,2001, NewBridge converted 1,000,000 shares of Series A
Convertible Preferred Stock into 32,650,000 shares of Yes
Clothing Company, Inc.'s common stock.

NewBridge acquired the shares of Yes Clothing Company, Inc. for
investment. Of the 12,786,492 shares of Yes Clothing Company,
Inc. common stock outstanding at June 30, 1999, NewBridge
beneficially owned 3,514,693 shares, or 27.5%, of the
outstanding common stock. On February 15, 2000, NewBridge owned
1,277,005 shares, or 100%, of outstanding Series A Preferred
Stock of Yes Clothing Company, Inc. Of the 18,565,705 shares of
Yes Clothing Company, Inc. common stock outstanding at September
15, 2000, NewBridge beneficially owned 9,293,906 shares, or
50.1%, of the outstanding common stock. Of the 37,644,158 shares
of Yes Clothing Company, Inc. common stock outstanding at June
30, 2001, NewBridge, beneficially owned 32,685,147 shares, or
88.2%, of the outstanding common stock of Yes Clothing Company,
Inc.

NewBridge had and/or has sole power to vote and dispose of the
shares described here. Other than the conversion of the
preferred shares on June 7, 2001 into common stock, there were
no other transactions in the common stock of Yes Clothing
Comany, Inc. by NewBridge in the past 60 days.

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provided by DLS Capital Partners in Dallas, Texas.

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

                           *********

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

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

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

This material is copyrighted and any commercial use, resale or
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