TCR_Public/010726.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Thursday, July 26, 2001, Vol. 5, No. 145

                            Headlines

ADMIRAL CBO: S&P Puts Ratings On Credit Watch Negative
AMF BOWLING: Taps McGuireWoods LLP as Local Bankruptcy Counsel
AMWEST INSURANCE: Files For Chapter 11 in C.D. California
BALDWIN PIANO: Joe Head and William Connell Resign from Board
CHIQUITA BRANDS: Posts Weak Second Quarter Results

BRIDGE INFORMATION: J.J. Kenny Presses Telerate To Pay Debts
CANNON EXPRESS: Involuntary Bankruptcy Proceeding Dismissed
COMDISCO INC.: Proposes Bidding Procedures to Test HP's Offer
CONSUMER PORTFOLIO: Reports Second Quarter Losses
CONTINENTAL RESOURCES: Puts Up Oil And Gas Assets As Collateral

DENBURY RESOURCES: Encap Investments Reports 7.5% Equity Stake
DIAMOND ENTERTAINMENT: Reports Fiscal Year 2001 Losses
ENVIROSOURCE INC.: Completes Restructuring Plan
FINOVA GROUP: Plan Confirmation Hearing Set For August 10
GEOGRAPHICS INC.: Accumulated Deficit Tops $20 Million

HARNISCHFEGER: Beloit Settles Patent Issue With Albany
IMPERIAL SUGAR: Beet Growers File Suit And Demand Protection
IMPERIAL SUGAR: Selects New Board of Directors
INTEGRATED HEALTH: Has Until October 1 To Remove Proceedings
KAISER ALUMINUM: Second Quarter Net Loss Amounts To $64 Million

LAIDLAW INC.: Retains Zolfo Cooper As Restructuring Officers
LTV CORPORATON: Notice Of Auction for VP Buildings Assets
LUCENT TECHNOLOGIES: Selling Optical Fiber Business for $2.75BB
LUCENT: Signs Strategic Manufacturing Pact with Celestica Inc.
MARINER: Moves To Transfer Springfield, IL Healthcare Center

NETSOL INT'L: Settles Dispute With Jonathan Iseson, et al
OWENS CORNING: Moves To Pay Waxahachie & Ellis County, TX Taxes
PACIFIC GAS: CalFed Seeks Stay Relief To Settle Slip & Fall Case
PACIFIC GAS: Asks for Public Hearing on CDWR Revenue Requirement
PRESIDENT CASINOS: Needs To Raise Funds To Pay Debts

PSINET INC.: U.S. Court Approves Proposed Cross-Border Protocol
RANCH *1 INC.: Kahala Provides Additional $280,000 Financing
RELIANCE GROUP: Fitch Withdraws DDD Financial Strength Ratings
SAFETY-KLEEN: Restructuring ICC Information Technology Leases
SINGING MACHINE: Reports Improved Revenues For Fiscal Year 2001

U.S.A. FLORAL: Agrees To Sell Florimex To European Firm
USG CORP.: Trustee Appoints Asbestos Property Damage Committee
W.R. GRACE: Proposes Omnibus Claim Settlement Protocol
WARNACO GROUP: Committee Hires Arthur Andersen As Accountants
WASHINGTON GROUP: Critical Vendor Payments Irk Raytheon

WINSTAR COMM.: Electronic Data Moves To Compel Contract Decision

                            *********

ADMIRAL CBO: S&P Puts Ratings On Credit Watch Negative
------------------------------------------------------
Standard & Poor's placed its ratings on the class B-1, B-2, and
C notes issued by Admiral CBO (Cayman) Ltd. and co-issued by
Admiral CBO (Delaware) Inc. on CreditWatch with negative
implications.

The CreditWatch placements reflect the significant deterioration
in the collateral pool credit quality and the increase of its
pool default rate. Since the closing of the transaction, $26.4
million of defaulted assets, or approximately 8.8% of the
closing collateral pool, have been sold at a weighted average
recovery rate of 21.3%. The transaction also experienced
additional par loss due to the sales of several credit risk
securities. According to the June 29, 2001 trustee report, a
total of $3.75 million, or approximately 1.4% of the total
collateral pool is in default. The current performing pool
including the principal cash has an aggregate par value of
$273.9 million, compared the to the effective date portfolio of
$301.2 million.

The obligors with ratings in the triple-'C' and double-'C' range
comprise more than 7.8% of the total collateral portfolio.
Furthermore, approximately 15.9% of the obligors in the
collateral pool are currently on CreditWatch with negative
implications.

The class A overcollateralization test (currently 126.98% versus
the required minimum of 127%) was failing as of June 29, 2001
and the class B overcollateralization test (currently 107.59%
versus the required minimum of 113%) has been failing since
March 1, 2001. The class C overcollateralization ratio,
currently 101.24%, is still marginally passing its minimum
requirement of 100%. On the August 2000 payment date,
approximately $2.67 million in principal has been paid to the
class A-1 noteholders because of the mandatory redemption
triggered by the class B overcollateralization test failure.
However, the improvement to the overcollateralization ratios
from the redemption has been offset by the subsequent increase
in defaulted assets.

In the coming weeks, Standard & Poor's will be performing cash
flow analysis, and will be reviewing the results from the cash
flow model runs and Standard & Poor's default model to evaluate
the effect of the credit deterioration on the current ratings
for the notes.

     Outstanding Ratings Placed On CreditWatch Negative

     Admiral CBO (Cayman) Ltd./Admiral CBO (Delaware) Inc.:

          Class           Rating
                        To           From
          B-1      BBB/Watch Neg     BBB
          B-2      BBB/Watch Neg     BBB
          C        BB-/Watch Neg     BB-


AMF BOWLING: Taps McGuireWoods LLP as Local Bankruptcy Counsel
--------------------------------------------------------------
AMF Bowling Worldwide, Inc. seeks to employ McGuireWoods LLP as
their local bankruptcy counsel in these chapter 11 cases, and
all related matters, nunc pro tunc to the Petition Date. The
Debtors will look to McGuireWoods to:

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

       (b) attend meetings and negotiate with representatives of
creditors and other parties in interest;

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

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

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

       (f) represent the Debtors in connection with obtaining
postpetition financing;

       (g) advise the Debtors in connection with any potential
sale of assets;

       (h) appear before this Court, any appellate courts, and
the United States Trustee and protect the interests of the
Debtors' estates before such courts and the United States
Trustee;

       (i) consult with the Debtors regarding tax, intellectual
property, labor and employment, real estate, corporate finance,
corporate and securities, and litigation matters; and

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

McGuireWoods Partner H. Slayton Dabney, Jr., Esq., leading the
engagement from the Firm's offices in Richmond, Virginia,
relates that, since 1997, the Debtors have employed McGuireWoods
to represent them in a variety of legal matters, including
corporate, securities, corporate finance, labor and employment,
intellectual property, real estate, litigation and other
matters.

In calendar year 2000, Mr. Dabney discloses, McGuireWoods
received $760,484 from the Debors in the aggregate for
professional services and approximately $97,400 for related
disbursements. In calendar year 2001 through June 27, 2001,
McGuireWoods received from the Debtors approximately $900,000 in
the aggregate for professional services and approximately
$145,000 for related disbursements. McGuireWoods received a
$220,000 retainer in contemplation of these chapter 11 cases.
Postpetition services will be billed at McGuireWoods' customary
hourly rates:

            Partners                  $250 to $425
            Associates                $165 to $240
            Legal Assistants          $80 and $150

Mr. Dabney discloses that the Firm and certain of its partners
and associates may have in the past represented, may currently
represent, and likely in the future will represent parties-in-
interest in these cases in connection with matters unrelated to
the Debtors and these cases. "Although not relevant in
concluding that McGuireWoods does not hold or represent an
interest adverse to the Debtors' estates and is 'disinterested,'
Mr. Dabney relates, in an abundance of caution, McGuireWoods
discloses that:

       (1) the Firm has represented, currently represents and/or
may represent in the future the following entities and/or their
affiliates, which are parties-in-interest in these cases in
connection with certain matters wholly unrelated to the Debtors
and these chapter 11 cases:

            (a) ABN AMRO Bank, N.V., which (based on information
and belief) holds .9% of the Debtors' prepetition senior credit
facility, and paid fees to McGuireWoods for work unrelated to
the Debtors constituting approximately .56% of McGuireWoods'
2000 revenue.

            (b) Bank of America, N.A., which (based on
information and belief) holds .2% of the Debtors' prepetition
senior credit facility, and paid fees to McGuireWoods for work
unrelated to the Debtors constituting approximately 5.39% of
McGuireWoods' 2000 revenue.

            (c) General Electric Capital Corporation, which
(based on information and belief) holds 1.8% of the Debtors'
prepetition senior credit facility, and paid fees to
McGuireWoods for work unrelated to the Debtors' constituting
approximately .08% of McGuireWoods' 2000 revenue.

            (d) Sysco Corporation, which is a top 30 unsecured
creditor with a claim of approximately $400,000, paid fees to
McGuireWoods constituting less than .01% of McGuireWoods' 2000
revenue.

            (e) The Bank of New York, which is an indenture
trustee, paid fees to McGuireWoods constituting approximately
.11% of McGuireWoods' 2000 revenue.

       (2) Prepetition, McGuireWoods performed certain legal
services for AMF Bowling, Inc., the publicly owned parent of AMF
Bowling Worldwide, Inc. These services included corporate,
securities, employee benefits, and other non-bankruptcy matters.
McGuireWoods' representation of AMF Bowling, Inc. has ceased,
and McGuireWoods will not perform any legal services for AMF
Bowling, Inc. during the pendency of these chapter 11 cases.
McGuireWoods understands that AMF Bowling, Inc. has obtained new
counsel which will represent AMF Bowling, Inc. during the
pendency of these chapter 11 cases.

       (3) Benjamin B. Iselin is a partner in McGuireWoods' New
York City office.  Until March, 2001, Mr. Iselin was Counsel
with the law firm of Shearman & Sterling in New York.
Prepetition, Shearman & Sterling represented Citibank, N.A., as
administrative agent in connection with the Debtors' prepetition
senior credit facility. Mr. Iselin was involved in that
representation of Citibank at Shearman & Sterling. Citibank has
consented to McGuireWoods' continuing to represent the Debtors
in the Debtors' chapter 11 cases.  McGuireWoods has established
an "ethical wall" between Mr. Iselin and the attorneys who will
be representing the Debtors during the pendency of these
bankruptcy cases, such that Mr. Iselin and those attorneys will
have no contact with each other regarding the Debtors during the
pendency of these bankruptcy cases. Before Mr. Iselin joined
McGuireWoods, the firm fully informed the Debtors regarding Mr.
Iselin's previous involvement in Shearman & Sterling's
prepetition representation of the Debtors' prepetition lenders,
and the Debtors have consented to the arrangement.  Shearman &
Sterling is now representing Citibank and certain of the
prepetition lenders in their capacity as debtor-in-possession
lenders in these bankruptcy cases. Citibank, the Debtors and
McGuireWoods are satisfied that the current arrangement is
satisfactory and in no way inhibits McGuireWoods' ability to
represent fully the Debtors' interests in these bankruptcy
cases.

       (4) McGuireWoods has an affiliate known as McGuireWoods
International, which is a separate legal entity. McGuireWoods
International provides legal services to clients in certain
foreign countries, including Belgium, Russia and Kazakhstan.
Prepetition, McGuireWoods International has performed certain
legal services for the Debtor and certain non-debtor affiliates.
McGuireWoods International may continue to provide these
services postpetition.

       (5) The Debtors have and will retain certain other
professionals during the pendency of these cases, including the
New York law firm of Willkie, Farr & Gallagher as co-counsel.
McGuireWoods has served as special counsel under Bankruptcy Code
Sec. 327(e) for Heilig-Meyers Company and affiliates in their
pending chapter 11 cases in the Eastern District of Virginia,
and Willkie Farr & Gallagher and the law firm of LeClair Ryan
are representing those debtors as bankruptcy counsel.  In
addition, the Debtors are seeking court authority to retain as
their accountants Arthur Andersen.  McGuireWoods has in the past
and may in the future represent Arthur Andersen in certain
matters unrelated to the Debtors and these chapter 11 cases; and

       (6) Certain of McGuireWoods' partners, associates and
employees may hold, directly or indirectly, certain
insignificant amounts of the publicly traded common stock issued
and outstanding in AMF Bowling, Inc., the parent of AMF Group
Holdings Inc., which is the parent of AMF Bowling Worldwide,
Inc. (AMF Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


AMWEST INSURANCE: Files For Chapter 11 in C.D. California
---------------------------------------------------------
Amwest Insurance Group Inc. (AMEX:AMW) (PCXE:AMW) has commenced
Chapter 11 bankruptcy proceedings in the United States
Bankruptcy Court for the Central District of California.
The company will be a debtor in possession, and in due course
will file with the Bankruptcy Court a plan for the
reorganization of its debts.

The bankruptcy filing arose as a result of the June 8, 2001,
takeover by the Director of Insurance of the State of Nebraska
of the company's principal operating subsidiary, Amwest Surety
Insurance Company.  Amwest Surety Insurance Company has been
placed in liquidation by the Nebraska Director of Insurance.


BALDWIN PIANO: Joe Head and William Connell Resign from Board
-------------------------------------------------------------
Baldwin Piano & Organ Company (OTC Bulletin Board: BPAO)
announced the resignation of Joe Head and William Connell from
the Company's board of directors. In a resignation letter, both
directors expressed their support for the measures undertaken by
Robert Jones, CEO and President of Baldwin, and their desire to
step down after many years of service. Connell has served on the
board since 1995 and Head has been a board member since 1983. No
replacement directors were appointed.

Kenneth Pavia, chairman of the board of directors, stated that
the reduction in the board would allow further flexibility in
addressing the challenges confronting the Company. "Baldwin
continues to address certain legacy issues as part of the
Company's overall restructuring efforts, and the board, as
presently configured, stands ready to actively counsel
management and aid during this transitional period. The
reduction in the board mirrors the temporary downsizing efforts
of the Company and will be adjusted as appropriate."

Baldwin Piano & Organ Company, the maker of America's best
selling pianos, has marketed keyboard musical products for over
140 years.


CHIQUITA BRANDS: Posts Weak Second Quarter Results
--------------------------------------------------
Chiquita Brands International, Inc. reported second quarter 2001
earnings before interest, taxes, depreciation and amortization
(EBITDA) of $47 million compared to $69 million for the second
quarter of 2000. Second quarter earnings before interest and
taxes were $24 million in 2001 and $44 million in 2000. The
Company reported an after-tax loss of $9 million ($.16 per
share) before $2 million ($.03 per share) of parent company debt
restructuring costs in the current quarter. In the second
quarter of 2000, earnings were $11 million ($.10 per share)
before an extraordinary gain of $2 million ($.03 per share) from
debt prepayments.

Fresh Produce earnings in the second quarter of 2001 continued
to be negatively affected by weak European currencies in
relation to the U.S. dollar. If the Euro remains relatively
stable, foreign exchange will have less of an impact in year-on-
year comparisons of second half operating results than in the
first half of 2001. In addition, Chiquita incurred higher
production and related logistics costs caused by weather-related
declines in short-term productivity. These effects were
partially offset by higher local currency banana pricing and
volume in core European markets.

Processed Foods operating results also declined during the
second quarter of 2001 primarily due to lower pricing for canned
vegetables. The lower pricing was consistent with the objective
of reducing inventory levels of canned vegetables.

Net sales for the second quarter of 2001, excluding the effects
of prior year divestitures, increased slightly from the 2000
second quarter.

Chiquita is a leading international marketer, producer and
distributor of quality fresh fruits and vegetables and processed
foods.


BRIDGE INFORMATION: J.J. Kenny Presses Telerate To Pay Debts
------------------------------------------------------------
J.J. Kenny Company, Inc. (a subsidiary of the McGraw-Hill
Companies, Inc.) asks Judge McDonald to enter an order:

     (a) directing Telerate, Inc. to make payment to Kenny of its
         unpaid administrative expense claims, and

     (b) granting Kenny relief from the automatic stay to allow
         it to set off its mutual obligations with Telerate.

The Bridge Information Systems, Inc. Debtors seek to reject a
certain license agreement dated December 1994 between Dow Jones
Telerate Inc., predecessor-in- interest to Telerate, and Kenny.
The current term of the license agreement expires on December
31, 2001, according to David A. Sosne, Esq., at Summers Compton
Wells & Hamburg, in St. Louis, Missouri.

Last month, Mr. Sosne says, the McGraw-Hill Entities filed
various proofs of claim against the Debtors, including a claim
by Kenny in the sum of $71,875 for pre-petition arrearages due
under the Kenny License Agreement.

Under the license agreement, Mr. Sosne explains, Kenny permits
Telerate to make certain information concerning taxable and tax-
exempt fixed income securities available to Telerate's
subscribers.  In turn, Telerate agrees to pay Kenny a minimum
annual payment per contract year.  At the same time, Kenny also
agrees to pay Telerate a certain percentage of the net
subscription charges, which exceed the minimum annual amount.
For the contract year 2001, Telerate has agreed to pay Kenny the
minimum annual amount of $225,000 in equal quarterly
installments of $56,250 due not more than 30 days following the
end of each calendar quarter.

Mr. Sosne reminds the Court that Kenny filed a proof of claim in
the amount of $71,875 for amounts due from Telerate as of the
Petition Date, representing arrearages under the license
agreement for the period from October 1, 2000 to February 15,
2001.  From Petition Date through the date of the hearing on the
motion, Mr. Sosne says, Telerate will owe to Kenny the
additional sum of $94,657:

               Period                         Amount
               ------                         ------
               02/16/01 to 02/28/01          $ 9,375
               03/01/01 to 03/31/01           18,750
               04/01/01 to 04/30/01           18,750
               05/01/01 to 05/31/01           18,750
               06/01/01 to 06/30/01           18,750
               07/01/01 to 07/17/01           10,282
                                             -------
                        Total                $94,657

According to the current payment terms of the license agreement,
Mr. Sosne notes, at least the sum of $28,125 is overdue and the
balance of $66,532 is due no later than July 30, 2001.

Mr. Sosne argues that the Debtors' post-petition accruals under
the Kenny License Agreement are "actual, necessary costs and
expenses of preserving the [Debtors' estates]".  This entitles
Kenny to administrative expense priority under section 503(b)
and 507(a)(1) of the Bankruptcy Code, Mr. Sosne insists.

Kenny appeals to Judge McDonald to compel the Debtors to make
immediate payment of those charges, especially given the
uncertainty of the Debtors' post-petition financing and the
future availability of funds to pay administrative expense
claims.

Mr. Sosne discloses that Kenny has a partial offset against the
amounts due from Telerate.  Such offset arises under a separate
contract between Kenny and Telerate's predecessor-in-interest,
Dow Jones Telerate Inc., dated as of December 22, 1994.  Under
this Blue List Agreement, Mr. Sosne explains, Kenny permits
Telerate to make certain information services, which Kenny
publishes and/or has the right to distribute, known as the Blue
List Services, available to Telerate's subscribers and to make
certain Telerate services available to certain Kenny subscribers
and to make certain Telerate services available to certain Kenny
subscribers via the Telerate network.  According to Mr. Sosne,
Kenny bills both Telerate and Kenny subscribers for the Blue
List Services and pays Telerate a monthly operations fee.

As of the Petition Date, Mr. Sosne relates, Kenny's records
indicate that it owes Telerate $3,500 under the Blue List
Agreement.  From Petition Date through the hearing date, Kenny's
records indicate that it will owe Telerate the additional $5,000
under the Blue List Agreement.

Mr. Sosne argues that Kenny should be authorized to set off the
amounts it owes to Telerate under the Blue List Agreement
against the mutual obligations Telerate owes to it under the
License Agreement.

Mr. Sosne notes that a setoff of its mutual obligations would
further the goals and objectives of section 553 of the
Bankruptcy Code by allowing Kenny to exercise its state law
remedy of setoff.  Mr. Sosne adds a setoff will also avoid the
unfairness and absurdity of compelling Kenny to pay Telerate the
de minimis sums it owes to Telerate when Telerate much larger
obligations to Kenny. (Bridge Bankruptcy News, Issue No. 11;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


CANNON EXPRESS: Involuntary Bankruptcy Proceeding Dismissed
-----------------------------------------------------------
Cannon Express Corp, a subsidiary of Cannon Express, Inc. (Amex:
AB), announced that at the Bankruptcy hearing on Monday, July
23, 2001, the petitioners who filed the chapter 7 bankruptcy
requested it be dismissed.

In Monday's hearing, Judge Robert Fussell granted the request of
the three men who filed the involuntary petition against Cannon
-- Farish Kincaid, Ed Bennett and Felix Pruss -- to postpone the
trial date. The case had been set for final resolution on July
30 and 31, but Judge Fussell gave the petitioners another month
so that Felix Pruss could recuperate from surgery before having
to testify. Judge Fussell further indicated that he would
consider holding the trial in Little Rock, where Mr. Pruss
lives, in order to further facilitate the hearing. Judge Fussell
remarked from the bench that it was important that the case be
decided as quickly as possible and he would make certain it was
decided "one way or the other".

Despite the extra month that Judge Fussell gave, Gary Barrett,
counsel for the three petitioners, still asked the court to
allow the petitioners to dismiss their case. Donnie Rutledge,
counsel for Cannon, opposed the petitioners' request to dismiss,
arguing instead that the case should be dismissed on the merits
after Cannon had an opportunity to refute their claims at trial.
Judge Fussell made it clear that by allowing the petitioners to
dismiss their own case, he was not dismissing Cannon's right to
seek damages from them. In fact, Judge Fussell set a hearing
date of August 28 to decide what attorney's fees and costs that
the petitioners would have to pay Cannon as a consequence of
their actions. Judge Fussell further stated that upon the
conclusion of the August 28 hearing, he would set another
hearing for resolution of Cannon's claim for damages, including
punitive damages, against the petitioners as a consequence of
their actions.

Mr. Barrett advised the Court that he had reviewed the potential
penalties very thoroughly with his clients before they filed the
suit and they were fully aware of what could happen if it was
discovered they had wrongfully filed the suit. He further stated
that his clients were aware that they were still subject to a
claim for attorney's fees, costs and damages even though the
Judge was dismissing their case. In an earlier interview Barrett
stated that he had reviewed the reports Cannon Express Inc.
filed with the Securities and Exchange Commission which showed
the Company had sufficient capital to pay an amount in excess of
his clients claim if Cannon Express Corp was found to owe the
$1,333,000.00 they claimed.

According to bankruptcy law, the petitioners, Kincaid, Pruss,
and Bennett may be held responsible for attorney's fees and
costs in the discretion of the court, and for actual damages,
including punitive damages, if the court finds that they filed
their petition in bad faith. Bankruptcy law sets forth no actual
maximum dollar limits of actual or punitive damages that a party
is subject to.


COMDISCO INC.: Proposes Bidding Procedures to Test HP's Offer
-------------------------------------------------------------
Norman P. Blake, Jr., Comdisco Inc.'s Chief Executive Officer,
outlines for the Bankruptcy Court the Company's pre-petition
efforts that culminated in inking a $610,000,000 Sale Agreement
with Hewlett-Packard:

       With assistance from McKinsey & Company, Inc.'s management
consultants and Goldman, Sachs & Co.'s investment banking
professionals, Mr. Blake relates, Comdisco began a strategic
review of each of their operations this past year.  As part of
this process, Comdisco considered a variety of strategic options
to maximize value through strategic business initiatives,
capital restructurings and asset dispositions involving all or
part of the Company.  As a result of this process, Comdisco
decided to explore opportunities to sell the Company as a whole.
That plan was abandoned because of the inherent complexity in
running multiple bidding processes for different parts of a
business as large as Comdisco's.  That issue was accentuated in
this case because the majority of the Debtors domestic assets
(including all of Ventures and Services contracts and most of
the Leasing contracts) resided within the corporate parent;
thus, the only practical manner in which an individual business
unit could be sold would be through a more cumbersome asset
transaction rather than a stock purchase.

       In seeking potential buyers for the whole Company, Goldman
recommended several parties based on those companies' strategic
fit and financial characteristics.  Of those parties, Comdisco
identified and invited three potential bidders who had both an
interest and the financial wherewithal to consummate a
transaction of this magnitude to conduct due diligence.
Comdisco set-up a data room at their Rosemont, Illinois,
corporate headquarters and prepared business presentations to
provide for an organized and efficient transmission of an
enormous amount of data related to their businesses.  Beginning
in April, 2001, each of the prospective bidders conducted
extensive due diligence at the Debtors' corporate headquarters.
The bidders amassed teams of 50-100 legal, financial and
business representatives and each bidder had exclusive access to
the data room for 3-5 days.  As part of the due diligence
access, each of the bidders also attended numerous management
presentations on virtually all aspects of the business.

       Following this initial round of diligence, each of the
bidders submitted proposals for parts of the Company and two
bidders expressing an interest in the Availability Solutions
Business.  As a result, following a continued assessment of the
Debtors' strategic alternatives, Comdisco determined to further
explore expressions of interest for the Availability Solutions
Business and the Leasing Business, separately.  Goldman
subsequently received indications of interest from, and had
discussions with, 17 additional parties regarding the
Availability Solutions Business.  Of those parties, three more
were invited to participate in the bidding process.

       In connection with this second round of bidding, the
Debtors expanded the data room at its corporate headquarters and
assembled an additional data room at its corporate offices in
Brentford, England, to provide information regarding the Debtors
overseas continuity business.  The five potential purchasers
thereafter conducted extensive due diligence at both of these
locations.

       Following several weeks of continuing diligence and
marketing efforts, Comdisco requested and received proposals
from each of the five bidders.  Goldman and Comdisco evaluated
the terms and benefits of each proposal, as well as the benefits
of other alternatives.

Comdisco, in its business judgment, concluded that the Hewlett-
Packard proposal offered the most advantageous terms and
greatest economic benefit to the Company.  By Motion, the
Debtors ask the Bankruptcy Court to approve a collection of
Bidding Procedures designed to subject the Hewlett-Packard offer
to a competitive bidding process:

       (A) Participation Requirements.

           Unless otherwise ordered by the Bankruptcy Court for
cause shown, or as otherwise determined by the Debtors, in order
to participate in the bidding process, each person (a "Potential
Bidder") must deliver (unless previously delivered) to the
Debtors:

         (1) an executed confidentiality agreement in form and
             substance satisfactory to the Debtors;

         (2) current audited financial statements of the
             Potential Bidder or equity holder(s) of a Potential
             Bidder that was formed for the purpose of acquiring
             the Availability Solutions Business who shall
             guarantee the obligations of the Potential Bidder or
             such other form of financial disclosure and
             credit-quality support or enhancement acceptable to
             the Sellers and Advisors; and

         (3) a preliminary (non-binding) proposal regarding the:

             (a) the purchase price range,

             (b) any assets expected to be excluded,

             (c) the structure and financing of the transaction,

             (d) any anticipated regulatory approvals required to
                 close the transaction and the anticipated time
                 frame and impediments for obtaining the same,

             (e) any conditions to closing that it may wish to
                 impose in addition to those set forth in the
                 Agreement, and

               (f) the nature and extent of additional due
                   diligence it may wish to conduct.

A "Qualified Bidder" is a Potential Bidder that delivers the
documents described above and that the Debtors determine is
reasonably likely (based on availability of financing,
experience and other considerations) to be able to consummate
the Sale if selected as the Successful Bidder within a time
frame acceptable to the Debtors.

       (B) Information and Due Diligence.

           After a Potential Bidder delivers all of the items
required, the Debtors shall determine, and shall notify the
Potential Bidder, whether the Potential Bidder is a Qualified
Bidder. After the Debtors notify the Potential Bidder that it is
a Qualified Bidder, the Debtors shall allow the Qualified Bidder
to conduct due diligence with respect to the Availability
Solutions Business as provided in the Bidding Procedures. The
Debtors shall designate an employee or representative to
coordinate all reasonable requests for additional information
and due diligence access for such Qualified Bidders.

       (C) Bid Deadline.

           The Debtors propose that the bid deadline be
approximately 20 days following entry of an order approving
these procedures. The Debtors may extend the Bid Deadline once
or successively, but are not obligated to do so.

       (D) Bid Requirements.

          A bid is a letter from a Qualified Bidder stating that:

         (1) the Qualified Bidder offers to purchase the
             Availability Solutions Business upon the terms and
             conditions set forth in a copy of the Agreement
             attached to such letter, marked to show those
             amendments and modifications to the Agreement,
             including price, terms, and assets to be acquired,
             that the Qualified Bidder proposes (a "Marked
             Agreement") and

         (2) the Qualified Bidder's offer is irrevocable until
             the earlier of 48 hours after closing of the Sale of
             the Availability Solutions Business or 30 days after
             the conclusion of the Sale Hearing.

A Qualified Bidder shall accompany its bid with:

         (1) a deposit in a form acceptable to the Debtors (the
             "Good Faith Deposit") in the amount of $25,000,000
             payable to the order of Goldman Sachs & Company, as
             agent for the Debtors; and

         (2) written evidence of a commitment for financing or
             other evidence of ability to consummate the
             transaction. Unless otherwise waived by the Debtors
             in writing, the Debtors will consider a bid only if
             the bid:

             (a) provides overall value for the Availability
                 Solutions Business to the Debtors of at least
                 $25,000,000 over the Purchase Price bid in the
                 Agreement;

             (b) is on terms that in the Debtors' business
                 judgment are not materially more burdensome or
                 conditional than the terms of the Agreement;

             (c) is not conditioned on obtaining financing or on
                 the outcome of unperformed due diligence by the
                 Qualified Bidder;

             (d) does not request or entitle the bidder to any
                 break-up fee, termination fee, expense
                 reimbursement or similar type of payment; and

             (e) is received by the Bid Deadline.

A bid received from a Qualified Bidder that meets the above
requirements is a "Qualified Bid." A Qualified Bid will be
valued based upon factors such as the net value provided by such
bid and the likelihood and timing of consummating such
transaction.

       (E) Participation in Auction.

           If at least one Qualified Bid has been received which
the Debtors determine is higher or otherwise better than the bid
of the Purchaser set forth in the Agreement, the Debtors shall
may conduct an auction (the "Auction"). The Debtors propose that
the Auction take place at least two days after the Bid Deadline
at the offices of Skadden, Arps, Slate, Meagher & Flom
(Illinois), 333 W. Wacker Drive, Chicago, Illinois, 60606, or
such later time or other place as the Debtors shall notify all
Qualified Bidders who have submitted Qualified Bids, but in no
event later than two days prior to the Sale Hearing. Only
Qualified Bidders will be eligible to participate at the
Auction. At least two business days prior to the Auction, each
Qualified Bidder who has submitted. a Qualified Bid must inform
the Debtors whether it intends to participate in the Auction.

       (F) Auction Procedures.

           Based upon the terms of the Qualified Bids received,
the number of Qualified Bidders participating in the Auction,
and such other information as the Seller determines is relevant,
the Seller, in its sole discretion, may conduct the Auction in
the manner it determines will achieve the maximum value for the
Availability Solutions Business. The Seller may adopt rules for
bidding at the Auction that, in its business judgment, will
better promote the goals of the bidding process and that are not
inconsistent with any of the provisions of the Bidding
Procedures, the Bankruptcy Code or any order of the Bankruptcy
Court entered in connection herewith.

       (G) Successful Bid.

           As soon as practicable after the conclusion of the
Auction, the Debtors, in consultation with their financial
advisors, shall:

         (1) review each Qualified Bid on the basis of financial
             and contractual terms and the factors relevant to
             the sale process, including those factors affecting
             the speed and certainty of consummating the Sale and

         (2) identify the highest or otherwise best offer for the
             Acquired Assets (the "Successful Bid") and the
             bidder making such bid (the "Successful Bidder").

The Debtors are convinced that these Bidding Procedures are the
most likely to maximize realizable value for the benefit of the
Debtors' estates, creditors and other interested parties and,
accordingly, request that they be approved by the Bankruptcy
Court. (Comdisco Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


CONSUMER PORTFOLIO: Reports Second Quarter Losses
-------------------------------------------------
Consumer Portfolio Services Inc. (Nasdaq:CPSS) announced net
earnings for its second quarter ended June 30, 2001.

Net earnings for the quarter ended June 30, 2001 were $241,000,
or $0.01 per diluted share, compared with a net loss of $3.2
million, or ($0.16) per diluted share, for the quarter ended
June 30, 2000. Diluted shares outstanding were 21.2 million and
20.3 million for the quarters ending June 30, 2001 and 2000,
respectively.

For the three months ended June 30, 2001 total revenues
increased approximately $2.8 million, or 20%, to $16.3 million
compared with $13.6 million for the three months ended June 30,
2000.

For the six months ended June 30, 2001 net earnings were
$427,000, or $0.02 per diluted share, compared with a net loss
of $14.3 million, or ($0.71) per diluted share, for the year
earlier period. Diluted shares outstanding were 21.3 million and
20.2 million for the six-month periods ending June 30, 2001 and
2000, respectively.

Revenues for the six months ended June 30, 2001 totaled $33.6
million, an increase of $19.7 million, or 142%, compared with
$13.9 million in the 2000 period.

Purchases of contracts from automobile dealers during the
quarter ended June 30, 2001 increased $42.1 million, or 30%, to
$181.1 million from $139 million for the second quarter of 2000.
During the three-month period ended June 30, 2001 the company
sold $180.9 million of contracts compared with $144 million for
the same period in the prior year, an increase of 26%.

The aggregate outstanding balance of contracts serviced by the
company at June 30, 2001 was $354.2 million, representing a
decrease of 39% from $583.7 million at June 30, 2000.

Balances of accounts past due more than 30 days represented 3.7%
of the servicing portfolio at June 30, 2001 compared with 4.9%
at June 30, 2000, a decrease of 24%.

The annualized net charge off rate for the three-month period
ended June 30, 2001 was 4.5% compared with 9.6% for the three-
month period ended June 30, 2000, a decrease of 53%. The
inventory of repossessed vehicles was 1.7% of the servicing
portfolio as of both June 30, 2001 and 2000, respectively.

"The process of re-establishing Consumer Portfolio Services as a
leader in our industry is a challenge and an opportunity. Our
continued progress and profitability are extremely gratifying,"
said Charles E. Bradley, president and chief executive officer
of Consumer Portfolio Services.

Consumer Portfolio Services purchases, sells and services retail
installment sales contracts originated predominantly by
franchised dealers for new and late model used cars. The company
finances automobile purchases through approximately 4,500
dealers under contract across the United States.


CONTINENTAL RESOURCES: Puts Up Oil And Gas Assets As Collateral
---------------------------------------------------------------
On July 9, 2001, Continental Resources, Inc. completed its
previously announced acquisition of the assets of Farrar Oil
Company and the assets of Har-Ken Oil Company, oil and gas
operating companies in Illinois and Kentucky, respectively. The
aggregate purchase price paid for these assets was $33,670,220.
The acquired assets include 512 operated and non-operated wells
with daily production of approximately 1,760 barrels of oil and
1.76 million cubic feet of gas and proved reserves estimated to
be 4.6 million barrels of oil and 7 billion cubic feet of gas as
of December 31, 2000. The transaction will be treated as a
purchase for accounting purposes. Continental Resources, Inc.
does not expect to recognize any goodwill associated with this
transaction.

The purchase was funded through the revolving credit agreement
with a consortium of banks with MidFirst Bank serving as agent.
The credit agreement provides to Continental Resources, Inc. and
its subsidiaries, Continental Gas, Inc. and Continental
Resources of Illinois, Inc. a term loan of $27 million and a
revolving credit loan of the lessor of (1) $33.0 million and (2)
the Borrowing Base less the principal amount outstanding under
the term loan. Initially, the Borrowing Base is $60.0 million.
The Borrowing Base is subject to semi-annual adjustments based
on engineering reports as of January 1 and July 1 of each year.
The loan and the term loan will bear interest at either the
prime rate, as published in the Wall Street Journal from time to
time, plus a margin ranging up to .5% or at the LIBOR rate, as
published in the Wall Street Journal from time to time, plus a
margin ranging up to 2.25%. The choice of interest rate is at
the option of Continental. The principal amount outstanding
under the loans must be reduced if the Borrowing Base declines
below specified levers, or Continental must pledge additional
collateral to secure the loans. In addition, beginning in
September 2001, Continental must make quarterly amortization
payments of the principal amount outstanding under the term loan
at the rate of $1.35 million per quarter. The loans are secured
by a lien on all of Continental's oil and gas properties and
related assets. The loan agreement contains certain covenants
which require Continental to maintain certain ratios, including
a current ratio, a ratio of debt to tangible net worth, and a
debt service coverage ratio. In addition, the covenants limit
Continental's ability to merger or consolidate, incur or
guarantee debt, pledge assets, declare and pay dividends, make
loans or advances, sell or discount receivables, change the
character of its business, engage in transactions with
affiliates, engage in certain hedging activities, make certain
investments, amend its certificate of incorporation or by-laws,
enter into lease agreements other than oil and gas leases,
repurchase more than $10.0 million principal amount of its
outstanding 10.25% Senior Subordinated Notes due 2008, and
engage in speculative trading activities involving risks in
excess of $1.0 million.


DENBURY RESOURCES: Encap Investments Reports 7.5% Equity Stake
--------------------------------------------------------------
Encap Investments L.L.C. is reporting a 7.5% holding in the
common stock of Denbury Resources Inc.

EnCap Investments L.L.C. is a Delaware limited liability company
and is the general partner of EnCap Energy Capital Fund III,
L.P., a Texas limited partnership ("EnCap III"), and EnCap
Energy Capital Fund III-B, L.P., a Texas limited partnership
("EnCap III-B"). EnCap Investments also serves as an investment
advisor to Energy Capital Investment Company PLC, a company
organized and existing under the laws of England ("Energy PLC")
under an Investment Advisory Agreement dated February 4, 1994,
and to BOCP Energy Partners, L.P., a Texas limited partnership
("BOCP"), under a Management Agreement dated August 21, 1997.
The principal business of EnCap Investments is engaging in oil
and gas related investments.

El Paso Merchant Energy is a Delaware corporation whose
principal business is a broad range of activities in the energy
marketplace, including asset ownership, trading and risk
management, and financial services. The controlling person of El
Paso Merchant Energy is El Paso Corporation.

El Paso Corporation is a Delaware corporation whose principal
business is serving as a holding company for its various
subsidiaries, which are engaged in energy and related
businesses.

EnCap III, EnCap III-B, Energy PLC, and BOCP were the beneficial
owners of common stock of Matrix Oil & Gas, Inc. Under an
Agreement and Plan of Merger and Reorganization dated June 4,
2001, between Denbury Resources, Denbury Offshore, Inc.
("Offshore"), a subsidiary of Denbury Resources, Matrix and the
shareholders of Matrix, Matrix was merged with and into Offshore
effective July 10, 2001. In the Merger, the shares of common
stock of Matrix held by EnCap III, EnCap III-B, Energy PLC, and
BOCP was exchanged for the shares of common stock reported here,
plus cash. All of the shares of common stock reported here as
being beneficially owned by the EnCap Investments L.L.C. were
acquired in the Merger in exchange for the common stock of
Matrix previously owned by EnCap III, EnCap III-B, Energy PLC,
and BOCP.

EnCap Investments, as the sole general partner of EnCap III, is
the beneficial owner of 1,674,507 shares of Denbury Resources'
common stock. EnCap Investments, as the sole general partner of
EnCap III-B, is the beneficial owner of 1,266,431 shares of
common stock. EnCap Investments, as an investment advisor to
Energy PLC, is the beneficial owner of 591,294 shares of common
stock. EnCap Investments, as an investment advisor to BOCP, is
the beneficial owner of 409,728 shares of common stock. EnCap
Investments is therefore the beneficial owner of an aggregate of
3,941,960 shares of common stock. Based on the 52,800,927 shares
of common stock outstanding as of July 10, 2001, EnCap
Investments may be deemed the beneficial owner of approximately
7.5% of the outstanding shares of Denbury common stock.

El Paso Merchant Energy and El Paso Corporation may be deemed to
be the beneficial owner of the shares of Denbury common stock
owned or deemed owned by EnCap Investments (by virtue of being
controlling persons of EnCap Investments). However, El Paso
Merchant Energy and El Paso Corporation disclaim beneficial
ownership of the shares of common stock owned or deemed owned by
EnCap Investments.

As the general partner of EnCap III, EnCap Investments shares
the power to vote or direct the vote and to dispose or direct
the disposition of 1,674,507 shares of common stock. As the
general partner of EnCap III-B, EnCap Investments shares the
power to vote or direct the vote and to dispose or direct the
disposition of 1,266,431 shares of common stock. By virtue of a
Management Agreement, EnCap Investments shares the power to vote
or direct the vote or dispose or direct the disposition of
409,728 shares of common stock owned by BOCP. By virtue of the
Investment Agreement, EnCap Investments shares the power to vote
or direct the vote and to dispose or direct the disposition of
591,294 shares of common stock with Energy PLC.


DIAMOND ENTERTAINMENT: Reports Fiscal Year 2001 Losses
------------------------------------------------------
Diamond Entertainment Corporation's net loss for the year ended
March 31, 2001 was approximately $915,000 as compared to a net
loss of approximately $3,937,000 for the same period last year.
The primary reason for the net loss was the Company's operating
loss of approximately $555,000.

The Company's operating loss for the year ended March 31, 2001
of approximately $555,000 compared favorably to an operating
loss of approximately $3,576,000 for last year. The decrease in
the Company's operating loss of approximately $3,021,000 was the
result primarily from increased gross profit of approximately
$904,000 and decreased operating expenses of approximately
$2,117,000.

The Company's sales for the years ended March 31, 2001 and 2000,
were $3,181,090 and $3,828,261 respectively. The Company's sales
decreased by approximately $647,000 from the prior year with
decreased video, toy product sales and custom duplication sales
of approximately $760,000, $216,000 and $618,000, respectively,
offset by increased DVD product sales of approximately $970,000.
The Company recorded minimal toy product and custom duplication
sales during the year ended March 31, 2001. The lower video
product sales for the year ended March 31, 2001, were primarily
the result of the Company shifting its video product sales to
DVD product sales and to the lower demand for video products
from major customers. The lower toy product sales when compared
to the prior year were primarily attributed to lower volume
purchases from the Company's major toy customer. Sales of the
Company's products are generally seasonal resulting in increased
sales starting in the third quarter of the fiscal year.

The Company expects the sales to increase in fiscal year ending
March 31, 2002 resulting from increased DVD product sales. The
Company's sales for the quarter ended March 31, 2001, were
approximately $788,000 as compared to the prior two quarters
which averaged approximately $899,000 a quarter. The decrease in
the last quarter was primarily attributable to seasonal slow
down.


ENVIROSOURCE INC.: Completes Restructuring Plan
-----------------------------------------------
Envirosource, Inc. (OTCBB:ENSO) announced the successful
completion of the exchange offer for its 9-3/4% Series A and
Series B Senior Notes due 2003.

The exchange offer expired at 12:00 noon Tuesday, and the
Company accepted all Senior Notes that had been properly
tendered.

Approximately 99.8% in outstanding principal amount of the
Senior Notes had been tendered, thereby satisfying the minimum
condition set forth in the Offering Memorandum, dated June 11,
2001, that at least 98% of the outstanding principal amount of
the Senior Notes be tendered prior to the expiration time.

All of the Company's Series B Senior Notes due 2003 were
tendered in the exchange offer. The Indenture governing the
Series A Senior Notes that remain outstanding has been
supplemented to eliminate substantially all of the restrictive
covenants and to modify certain of the event of default
provisions of the Indenture.

A Supplemental Indenture has been executed and delivered by the
Company and United States Trust Company, the trustee under the
Indenture, and is now operative.

The Company has deposited, with United States Trust Company of
America, the interest payment on the remaining outstanding
Series A Senior Notes with respect to the June 15, 2001 interest
payment. The trustee will make this interest payment on August
16, 2001 to all holders of Series A Senior Notes as of the close
of business August 8, 2001.

In connection with the Envirosource restructuring, the
stockholders of the Company adopted the Agreement and Plan of
Merger between Envirosource and ES Acquisition Corp., a wholly
owned subsidiary of GSC Recovery II, L.P., on July 12, 2001. The
merger became effective simultaneously with the closing of the
exchange offer.

As a result of the merger, the outstanding shares of common
stock of Envirosource have been converted into the right to
receive $0.20 per share in cash without interest thereon.
Persons who were stockholders of record of Envirosource's common
stock immediately prior to the merger will be receiving
materials to enable them to surrender their stock certificates
and receive the merger consideration.

John T. DiLacqua, the President and Chief Executive Officer of
the Company, said: "The successful completion of this
transaction is a major accomplishment for Envirosource. The
Company is now well positioned to continue to provide services
to the steel industry, which is very competitive. We also look
forward to working with GSC Partners, our new majority
stockholder."

Jefferies & Company, Inc. and Akin, Gump, Strauss, Hauer & Feld,
L.L.P. acted as Envirosource's financial and legal advisors for
the restructuring.


FINOVA GROUP: Plan Confirmation Hearing Set For August 10
---------------------------------------------------------
Pursuant to the Court's Order approving The FINOVA Group, Inc.'s
Third Amended and Restated Disclosure Statement with respect to
Joint Plan of Reorganization as containing adequate information,
the Confirmation Hearing will be held before Judge Walsh on
August 10, 2001 at 9:30 a.m., or as soon thereafter as counsel
may be heard. The Confirmation Hearing may be continued by the
Court from time to time without prior notice other than the
announcement of the adjourned hearing date at the Confirmation
Hearing or at an adjourned Confirmation Hearing.

The Court's order provides that in accordance with section 1125
of the Bankruptcy Code and Bankruptcy Rule 3017(b), the
Disclosure Statement may be amended and modified from time to
time as the Debtors determine to be appropriate, provided that
these do not materially change the Disclosure Statement or
materially and adversely affect any rights of a party in
interest.

The Court's Order also provides that:

(A) Deadline for Objections to Confirmation of Plan is set to be
     on August 3, 2001 at 4:00 p.m. (Eastern Daylight Time)

(B) Debtors' Reply to any objections to the Plan will be filed
     on or before August 8, 2001 at 4:00 p.m. (Eastern Daylight
     Time)

(C) Ballots, Voting and Tabulation Procedures and Confirmation
     Notice are approved as proposed

     - Ballots must be properly executed and delivered, in
       accordance with the procedures specified in the Disclosure
       Statement and Ballots, and will be submitted so as to be
       actually received by the Balloting Agent on or before
       August 1, 2001 at 5:00 p.m., Mountain Standard Time (the
       "Voting Deadline") at one of the following addresses:

                By U.S. Mail:
                The FINOVA Group Inc.
                c/o King & Associates, Inc.
                P.O. Box 2742
                Carefree, Arizona 85377-2742

                By Delivery or Courier:
                The FINOVA Group Inc.
                c/o King & Associates, Inc.
                7301 East Sundance Trail - Suite D 201
                Carefree, Arizona 85377-2742

     - only the votes of Eligible Voters will be considered in
       the tabulation process and the amount of a claim used to
       tabulate acceptance or rejection of the Plan will be the
       Scheduled Amount; provided, however, that

       (a) if a claim has been estimated and temporarily allowed
           pursuant to an order of the Court, then for tabulation
           purposes the amount of the claim will be the amount
           estimated or temporarily allowed; and

       (b) if a proof of claim is filed, as to which no objection
           has been filed and which has not been disallowed or
           expunged, then for tabulation purposes the amount of
           the claim will be as set forth in the proof of claim;

     - each Ballot sent to a particular creditor or interest
       holder will carry a notation of the Scheduled Amount of
       the underlying claim;

     - for the purposes of voting, the number of shares of equity
       securities used to tabulate acceptance or rejection of the
       Plan will be the number of shares held by the particular
       stockholder, as of the close of business on the Voting
       Record Date;

     - Voting Record Date is June 13, 2001 for determining the
       holders of claims against and equity interests in the
       Debtors who may vote to accept or reject the Proposed
       Plan, pursuant to Bankruptcy Rule 3018(a);

     - On or before June 25, 2001, the Debtors will distribute or
       cause to be distributed to Eligible Voters a Solicitation
       Package, which will include:

        * the Confirmation Notice;
        * a copy of the approved Disclosure Statement;
        * except with respect to voting governed by special
          procedures below, a personalized Ballot; and
        * a postage-paid return envelope.

(D) On or before June 25, 2001, the Debtors will distribute or
     cause to be distributed to Notice Parties a Notice Package,
     which will include the following:

      * the Confirmation Notice,
      * a copy of the Disclosure Statement; and
      * either (i) a notice identifying that the Debtors have
        identified the recipient party as being ineligible to
        vote, but providing instructions as to how to obtain a
        ballot if the recipient disagrees with that
        classification, or (ii) in certain circumstances as
        specified in the Motion, a Ballot;

(E) King & Associates (the "Balloting Agent") will act as
     impartial voting and solicitation agent with respect to the
     Proposed Plan;

(F) With respect to Ballots submitted by the Eligible Voters
     (which will include holders of the beneficial interests of
     claims otherwise defined as Eligible Voters), the following
     procedures will govern:

     - Any Ballot that is returned to the Balloting Agent
       indicating acceptance or rejection of the Plan, but which
       is unsigned or does not indicate an acceptance or
       rejection of the Plan, will not be counted or otherwise
       included in the tabulation of votes;

     - Any Eligible Voter that has delivered a valid Ballot to
       the Balloting Agent may withdraw its vote by delivering a
       written notice of withdrawal to the Balloting Agent. To be
       valid, the notice of withdrawal must (a) be signed by the
       party who signed the ballot to be revoked, and (b) be
       received by the Balloting Agent before the Voting
       Deadline. The Debtors may contest the validity of any
       withdrawals;

     - Any Eligible Voter that has delivered a valid Ballot to
       the Balloting Agent may change its vote by delivering to
       the Balloting Agent a properly executed, completed
       replacement Ballot so as to be received on or before the
       Voting Deadline. Whenever an Eligible Voter casts more
       than one Ballot voting the same claim, each of which is
       received by the Balloting Agent prior to the Voting
       Deadline, only the Ballot that bears the latest date will
       be counted;

     - If an Eligible Voter casts simultaneous duplicative
       Ballots voted inconsistently, those Ballots will count as
       one vote accepting the Plan;

     - Each Eligible Voter will be deemed to have voted the full
       amount of its claim or interest;

     - Each Eligible Voter shall vote the full amount of its
       claim or interest within a particular Voting Class either
       to accept or reject the Plan, and may not split the amount
       of its claim or interest so that a portion accepts the
       Plan and a portion rejects the Plan. This provision does
       not apply to Master Ballots completed by Nominees;

     - Any Ballot that partially rejects and partially accepts
       the Plan will not be counted. This provision does not
       apply to Master Ballots completed by Nominees;

     - Any Ballot or Master Ballot received by the Balloting
       Agent by telecopier, facsimile or other electronic
       communication will not be counted; and

     - The Debtors, in their discretion, may request that the
       Balloting Agent attempt to contact Eligible Voters to cure
       any defects in Ballots or Master Ballots;

(G) Special procedures will govern for voting by beneficial
     holders of

     (1) The FINOVA Group Inc. common stock in Class FNV Group-6
         (Interests),

     (2) FINOVA Capital Corporation Notes or Bonds in Class FNV
         Capital-3 (General Unsecured Claims), and

     (3) FINOVA Finance Trust TOPrS in Class FNV Trust-5 (TOPrS
         Interests):

      - The Debtors will provide the Nominees with sufficient
        copies of the Solicitation Packages to forward to the
        Beneficial Holders;

      - The Nominees will forward the Solicitation Package or
        copies thereof to the applicable Beneficial Holders
        within three business days of receipt by such Nominees of
        the Solicitation Package;

      - With respect to any Ballot not authenticated and signed
        in advance by a Nominees:

      (1) the Nominee will include with the Solicitation Package
          sent to each Beneficial Holder a postage-prepaid,
          return envelope provided by and addressed to the
          Nominee;

      (2) the Beneficial Holder will complete the Ballot and
          return the Ballot to the respective Nominee, in
          accordance with the instructions for the Ballot;

      (3) the Nominee will summarize the votes of the respective
          beneficial Holders on the Master Ballot, in accordance
          with the instructions for the Master Ballot; and

      (4) the Nominee will return the Master Ballots to the
          Balloting Agent so that it is actually received by the
          Balloting Agent before the Voting Deadline;

     - With respect to any Ballots that are authenticated and
       signed in advance by the Nominee:

      (1) the Nominee will include with the Solicitation Package
          sent to the Beneficial Holder a postage-prepaid, return
          envelope addressed to the Balloting Agent; and

      (2) the Beneficial Holder will sign and complete the Ballot
          and return such Ballot directly to the Balloting Agent,
          in accordance with the instructions for the Ballot, so
          that it is actually received by the Balloting Agent
          before the Voting Deadline;

(H) To the extent that the Indenture Trustees and Nominees incur
     out-of-pocket expenses in connection with distribution of
     the Solicitation Packages, the Debtors are authorized to
     reimburse them for their reasonable, actual and necessary
     out-of-pocket expenses incurred in this regard.

(Finova Bankruptcy News, Issue No. 10; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


GEOGRAPHICS INC.: Accumulated Deficit Tops $20 Million
------------------------------------------------------
Geographics Inc. incurred a net loss of $5,006,834 in fiscal
year 2001 and has a working capital deficiency of $4,992,359 and
an accumulated deficit of $20,099,268 at March 31, 2001. For
fiscal year 2001, the Company's independent auditor has included
an explanatory paragraph is its audit report, regarding the
Company's ability to continue as a going concern. Among the
factors cited by the auditor that raised substantial doubt as to
the Company's ability to continue as a going concern, are the
Company's net loss for fiscal year 2001, working capital
deficiency and accumulated deficit at March 31, 2001. In order
for the Company to continue as a going concern it must achieve
profitability or obtain adequate financing to fund its
obligations as they become due. Although the Company believes it
will achieve profitability, improve its financial condition, and
obtain any required financing, it may not be successful.

The Company had significant weaknesses in internal accounting
controls during fiscal year 2001, which could cause material
errors in accounting and financial reporting to occur and go
undetected. The Company's independent auditor has reported to
the Company's board of directors the existence of reportable
conditions. Reportable conditions are matters coming to the
independent auditors attention that, in their judgement, relate
to significant deficiencies in the design or operation of
internal control and could adversely affect the Company's
ability to record, process, summarize and report financial data
consistent with the assertions of management in the financial
statements. The Company believes that it has mitigated these
weaknesses in its accounting and financial reporting by the
thorough review performed by its management. The Company
indicates, however, that it cannot be certain that its efforts
to implement adequate internal controls will, in the future, be
successful.


HARNISCHFEGER: Beloit Settles Patent Issue With Albany
------------------------------------------------------
Beloit Corporation and Albany International Corporation are
parties to a License Agreement dates as of November 1, 1999
relating to U.S. Patent No. 4,483,745. Pursuant to the
Harnischfeger Industries, Inc. Debtors' Third Amended Joint Plan
of Reorganization, as Modified, the License Agreement will be
rejected.

Albany desires to exercise its rights under section 365(n)(1)(B)
of the Bankruptcy Code.

Beloit and Albany seek the Court's approval of their agreement
as reflected in the stipulation. Pursuant to the stipulation:

      (1) Albany has elected to retain its rights under the
License Agreement to the subject intellectual property, as such
rights existed immediately before June 7, 1999 for (i) the
duration of the License Agreement and (ii) any period for which
the License Agreement is extended by Albany of right under
applicable non-bankruptcy law;

     (2) Albany agrees that under section 365(n)(2)(B) of the
Bankruptcy Code it will pay to Metso Paper, Inc. all royalty
payments due under the License Agreement for the duration of the
License Agreement and for any period for which Albany extends
the License Agreement;

      (3) Pursuant to section 365(n)(2)(i) of the Bankruptcy
Code, Albany waives any right of setoff it may have with respect
to the License Agreement under the Bankruptcy Code or applicable
non-bankruptcy law;

      (4) Pursuant to section 365(n)(2)(C)(ii) of the Bankruptcy
Code, Albany waives any claim allowable under section 503(b) of
the Bankruptcy Code arising from the performance of the License
Agreement. (Harnischfeger Bankruptcy News, Issue No. 45;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


IMPERIAL SUGAR: Beet Growers File Suit And Demand Protection
------------------------------------------------------------
Jean Marie Hansen of the Bloomfield Hills, Michigan firm of Jean
Marie Hansen, Attorney, PC, representing a group of Midwest
regional beet growers, brings suit against Michigan Sugar
Company, Imperial Sugar Company, and other debtor subsidiaries.

Ms. Hansen tells Judge Robinson that each plaintiff grower
produces sugar beets in Michigan or Ohio for the Michigan Sugar
company.  Prior to the Petition Date, each grower contracted to
prepare land to plant, cultivate, harvest and sell, during the
2000 campaign, season or crop year, to the Michigan Sugar
Company all sugar beets grown by them on contracted acreages.
At least 1 to 3 years prior to filing bankruptcy, the Debtor
defendants unfairly and/or unlawfully planned, calculated,
and/or fraudulently induced this bankruptcy for their profit and
unfair advantage of the growers.

At least a year prior to the bankruptcy filing, and before
Michigan Sugar contracted for the growers' beets for 2000, the
Debtor defendants began their ongoing communications directly
with local growers association representatives, making various
promises, representations and fraudulent inducements, to and for
the benefit of all beet growers in the Midwest region, including
the Plaintiffs.  Unlike 2000 and earlier years, for the 2001
crop year, Michigan Sugar demanded that farmers contract with
the Michigan Cooperative.

The Debtors "claimed" to provide full legal protections for the
growers, to treat them fairly (2001, 2000 and earlier years), to
deal honestly with them, and to complete a fair buy-out and
lease of Michigan Sugar to the growers through their
cooperative.

Instead, Ms. Hansen says the Debtors embarked on a course of
conduct to undermine the growers' PACA, Payment-in-Kind, and
Commodities Credit Corporation, including refusals and failures
to set up and maintain trust security protections mandated by
law for 2000 and earlier years, and, for example, inducing the
growers to contract for 2001 with the Michigan Cooperative, not
directly with Michigan Sugar, thereby risking PACA protection.

The Debtors fraudulently induced, through their failures to
disclose, false representations, and bad-faith promises, action
and forbearance on the part of the growers, to their detriment
and damage, and converted their beets and monies and properties
derived therefrom.  The Debtors, together with the Cooperative,
have and continue to refuse to account for and remit all monies
and property due the growers for 2000 and earlier years, and for
2001, and to demand that the growers go further in debt by
producing beets for the Cooperative in 2001 without reasonable
assurances of beet processing and full payments, invest funds in
the cooperative, risk 2001 beet contract payments to assist the
Debtors in paying growers for 2000 contracts, and support repair
and maintenance of Michigan Sugar's assets.

The Debtors have, Ms. Hansen says, failed and refused to
complete any fair buy-out of Michigan Sugar to the Michigan Co-
op.  These Midwest regional beet growers, and those similarly
situated, must maintain together a special balance of sugar beet
production quantity, quality, price, return on investment,
profit and timing, else they risk substantial business losses,
would be forced out of business, and/or suffer the shut down or
partial shut down of the beet industry in the Midwest Region.
The growers have vested interests and substantial investments in
the beet industry.

The Debtors knew then, as they know now, that for these growers
to survive and be profitable in the Midwest region, they must
work together, and not be in a state of indecision, confusion,
turmoil and/or financial hardship.  The Debtors have, Ms. Hansen
says, caused prepetition and continuing postpetition, a
deliberate upset in the balance of the beet industry in the
Midwest region.  The Debtors have been, and continue to violate,
unfairly, the growers' beet contracts for 2000 and prior years
and 2001.  The Debtors, contrary to fair trade practices and
law, seek to illegally ration beet sugar, to these growers'
detriment.  The Debtors, contrary to fair trade practices and
law, shut down beet growing operations and processing facilities
in Tracy, California, Woodland, California, and Clewiston,
Florida.  The Debtors see to shut down the Midwest Regional beet
operations and processing plants, and while doing so, collect
and not properly account to the growers for all of the growers'
beets and property, including federal government program sugar
and monies.

The Debtors, prior to the Petition and continuing postpetition,
have been, according to Ms. Hansen, and continue to, engage in
unfair and/or illegal trade practices, commodities trading, and
movements of assets from, by and between debtor entities, in a
manner planned and/or calculated to unfair advantage of the
growers, supported by the growers' beets and/or derivative
monies and property.

There ought to be, but has not been, full disclosure and
accounting to the growers for trust benefits applicable tot heir
beet commodities, including inventories (including descriptions,
quantities, sources and locations), receivables, and proceeds
from trades or sales of these assets (dates, purchaser,
quantities, locations, bid/price), and all property and benefits
derived therefrom.

The grower plaintiffs seek Judge Robinson's' assistance in the
enforcement of their full rights with respect to:

        (a) PACA protected 2000 (and 2001) contracted sugar
beets, all inventories of food or other products derived from
these commodities, all receivables and proceeds from
trades/sales of the same, and all assets into which the
foregoing were transferred or acquired therewith;

        (b) Payment-in-Kind Program vouchers, warehouse receipts,
in-kind payments and sugar, and all assets into which the
foregoing were transferred or acquired therewith;

        (c) Commodity Credit Corporation loan proceeds, and all
property and assets into which the foregoing were transferred or
acquired therewith; and

        (d) The growers' beets, and all property and assets into
which the beets were transferred or acquired therewith, as a
result of the Debtors' fraud (silent fraud, false
representation, false promise), and/or violations of fiduciary
duties owed to the growers.

Proofs of claim have been or are being filed for each grower and
remain unpaid.  All growers, as sellers, producers, trust
beneficiaries and creditors, have also served upon the Debtors
their intent to preserve full trust benefits and protected
federal rights.  Ms. Hansen says that the Debtors have refused
to remedy any of the growers' concerns, have continue to violate
their rights, willfully, maliciously and in bad faith, and
continue to convert the growers' property and cause them other
damages.

        Perishable Agricultural Commodities Act Claims

Ms. Hansen says the Debtors admit that sugar beets are a highly
perishable commodity.  The growers and their produced sugar
beets are protected by PACA, which includes trust protections
for plaintiffs that have not been properly instituted and
maintained by the Debtors.  PACA requires imposition of a
statutory trust made up of perishable agricultural commodities
received in all transactions, all inventories of food or other
products derived from such perishable agricultural commodities,
and all receivables or proceeds from the sale of such
commodities and food or products derived therefrom, citing 7
C.F.R. 46.46(b).  Each grower remains a beneficiary of this
trust until they are paid in full.  The growers have not been
paid in full for 2000 and earlier years and for beets under
contract for 2001.

               Payment-in-Kind Program Claims

For the first time in beet crop history, immediately prior to
the bankruptcy filings, in conjunction with the United States
Department of Agriculture and CCC, a sugar PIK Diversion program
was utilized for 2000 best crops.  The Debtors heavily promoted
nd recruited growers for the PIK program.

The growers were issued 1099s by Michigan Sugar and required to
pay tax l liabilities on PIK protected receipts withheld from
the growers by the Debtors.  PIK certificates for government
surpluses (in this case refined sugar), at the Debtors' demands,
were issued to them, not the growers, contrary to established
PIK custom and practice.  The Debtors have not accounted for the
2000 PIK assets received by them, provided full disclosures as
to all monies received and property/benefits derived therefrom
and fairly and properly remitted to the grower/producers.

The growers were to receive 64% of the sale of PIK sugar for
destroying beet crops in 2000, and the Debtors are entitled to
only 36%, Ms. Hansen tells Judge Robinson.  The Debtors are
thought by the growers to have sold the sugar and netted what
the growers understand to be more than $.23 per ton.  From the
Michigan Midwest Region alone, there's an undisclosed estimated
11,000 PIK acres at 20 acres per contract, or 550 contracts.
The Debtors have doled out some funds; however, in excess of $2
million is thought to be owed.  There are no trust protections
properly set up and being maintained.

                     CCC Loan Claims

Federal loans through the United States Department of
Agriculture and Commodity Credit Corporation were obtained by
Michigan Sugar and/or Imperial, and were outstanding, pre-
and/or postpetition.  The CCC, through the United States
Department of Agriculture, is authorized to support the prices
of agricultural commodities through  loans, purchases, payments,
and other operations, and to remove and dispose of or aid in the
removal or disposition of surplus agricultural commodities.
Loans to processors of domestically grown sugar beets are made
at a rate equal to $0.229 per pound for refined beet sugar.
Processors are required to comply with all terms and conditions
of nonrecourse loans, including assurances that the sugar is
eligible and available to be pledged as collateral, and that the
processor will provide payments to producers that are
proportional to the value of the loan received by the processor
for sugar beets delivered by producers served by the processor.
Nonrecourse loans are available for which the eligible sugar
offered as loan collateral may be delivered or forfeited to CCC,
at loan maturity, in satisfaction of the loan indebtedness.

The growers say the Debtors are in violation of CCC protections
for them, and have unfairly and/or improperly handled CCC
nonrecourse loans and/or proceeds.  The Debtors have refused and
failed to remit to the grower/producers all monies and property
due them, as mandated by federal law, or to account to the
growers for all monies and other assets improperly derived by
the defendants with the growers' property, and for sugar sold at
lower than CCC forfeiture rates to the growers' detriment.  The
Debtors also failed to put in place and maintain full
protections for growers in 2001, 2000, and earlier years, to the
growers' detriment.

                            "Silent Fraud"

Ms. Hansen says the Debtors failed to disclose one or more
material facts to the growers.  She cites as examples, the facts
that:

        (1) Michigan Sugar and/or Imperial was and/or ha been
depleting, hiding, secreting, dissipating, and/or transferring
unfairly assets to other debtor entities.

        (2) Michigan Sugar and/or Imperial were insolvent.

        (3) Michigan Sugar and/or Imperial were planning to file
bankruptcy.

        (4) Michigan sugar and/or Imperial sought and were
conducting a course of conduct to ration the beet sugar market
to the unfair detriment of the growers.

        (5) Michigan Sugar and/or Imperial would not conclude a
timely and proper sale of Michigan Sugar to the Co-op.

        (6) Michigan Sugar and/or Imperial would not pay the
growers.

        (7) Michigan /sugar and/or imperial would receive the
growers' beets without properly accounting and paying for them.

        (8) Michigan Sugar and/or Imperial were, and would
continue, violating the growers' trust protections and their
fiduciary duties.

        (9) What Ms. Hansen describes without identifying as
"additional material facts that left a false impression with the
growers".

Ms. Hansen says the Debtor defendants' failure to disclose these
facts caused the plaintiffs to have a false impression, which
the Debtors, at the time they failed to disclose, expected and
intended that the plaintiffs rely upon the false impression.

              Fraud Based on False Representation

Ms. Hansen complains that the Debtor defendants also made
affirmative fraudulent representations to the growers:

        (1) Michigan Sugar and/or Imperial were solvent and would
continue in business.

        (2) Michigan Sugar and/or Imperial would treat the
growers fairly and comply with the law.

        (3) Michigan Sugar and/or Imperial were and would promote
the growers' beet sugar market.

        (4) Michigan Sugar and/or Imperial would conclude a
timely and proper slae of Michigan Sugar to the Co-op.

        (5) Michigan Sugar and/or Imperial would pay the growers.

        (6) Michigan Sugar and/or Imperial would receive the
growers' beets, accurately account for them, and properly pay.

        (7) Michigan Sugar and/or Imperial were, and would,
fulfill their contractual duties to the growers.

        (8) The growers had only unsecured creditors' rights.

        (9) The growers had to grow beets for 2001 to get any
payment on 2000 contracts.

        (10) Additional representations to growers that were
material.

             Fraud Based on Bad Faith Promise

Ms. Hansen further says that the Debtor made a series of "bad-
faith" promises that:

        (1) The defendants would maintain a viable, ongoing
business.

        (2) The value of Michigan Sugar and/or Imperial was
profitable.

        (3) Assets of Michigan Sugar and/or Imperial were being
fully disclosed and accounted for.

        (4) Michigan Sugar and/or Imperial would remain solvent.

        (5) Michigan Sugar and/or Imperial would treat the
growers fairly and comply with the law.

        (6) Michigan Sugar and/or Imperial were and would promote
the growers' beet sugar market.

        (7) Michigan Sugar and/or Imperial would conclude a
timely and proper sale of Michigan Sugar to the Co-op.

        (8) Michigan Sugar and/or Imperial would pay the growers.

        (9) The growers had to grow beets for 2001 to get any
payment on 2000 contracts.

        (10) Michigan Sugar and/or Imperial would receive the
growers' beets, accurately account for them, and properly pay.

        (11) Michigan Sugar and/or Imperial were, and would,
fulfill their contractual duties to the growers.

                     Fiduciary Duty Claims

Ms. Hensen asserts that the Debtor defendants have a fiduciary
duty to the growers imposed by federal ad/or state statute,
common law, contract and/or equity, and that the facts recited
above demonstrate a breach of that duty.

                     Relief Requested

Through Ms. Hensen, the growers ask that the Court declare and
enforce the growers' trust and security protections, including
recovery of beet commodities, inventories, receivables,
proceeds, and money and property derived from the same,
including interest; immediate distribution to the growers of all
of the monies to which they are entitled; and compensatory,
exemplary, punitive, statutory, special and other damages, fees,
costs and interest "as law, equity and good conscience require".
(Imperial Sugar Bankruptcy News, Issue No. 7; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


IMPERIAL SUGAR: Selects New Board of Directors
----------------------------------------------
Imperial Sugar Company (OTC BB:IPRL) announced that a new Board
of Directors has been selected, effective the date of its
emergence from chapter 11.

The newly selected directors are Gaylord O. Coan, James J.
Gaffney, Yves-Andre Istel, Robert J. McLaughlin, James A.
Schlindwein and John K. Sweeney, along with James C. Kempner,
President and Chief Executive Officer of the Company and a
director since 1988. A Chairman will be elected subsequently.

Imperial Sugar Company filed a petition for relief under chapter
11 of the U.S. Bankruptcy Code on January 16, 2001. Under its
Second Amended and Restated Joint Plan of Reorganization, the
Board of Directors of the reorganized Company shall consist of
seven members, six individuals selected by the Creditors
Committee and Mr. Kempner. A hearing to consider confirmation of
the Plan is scheduled for August 7, 2001.

Mr. Coan recently retired as Chairman and Chief Executive
Officer of Gold Kist Inc., the nation's second largest and only
farmer-owned chicken processing company. He is also Chairman of
the Board of Directors of AgraTech Seeds Inc., and a member of
the Board of Directors of Archer-Daniels-Midland Company,
SunTrust Banks of Georgia, Inc. and Cotton States Life Insurance
Company.

Mr. Gaffney is President and Chairman of the Board of Vermont
Investments, Ltd., a New Zealand-based conglomerate that
provides consulting services to GS Capital Partners 11, L.P.,
and other affiliated investment funds. Previously, Mr. Gaffney
was Chief Executive Officer at General Aquatics, Inc., successor
to KDI Corporation, and at International Tropic-Cal, Inc.
Mr. Istel has been Vice Chairman of Rothschild Inc. and Director
of Rothschild & Cie Banque since 1993. He was previously
Chairman of Wasserstein Perella & Co. International and Managing
Director of Wasserstein Perella & Co., Inc.

Mr. McLaughlin founded The Sutter Group in 1982, a management
consulting company that focuses on enhancing shareholder value.
Previously, Mr. McLaughlin was the President and Chief Executive
Officer of Fibreboard Corporation, a manufacturer of lumber,
plywood and paper products, which is traded on the New York
Stock Exchange (NYSE).

Mr. Schlindwein is a former Executive Vice President and
director of SYSCO, the largest food distribution company in the
country. Prior to joining SYSCO, Mr. Schlindwein spent sixteen
years at Sara Lee, the last eight of which he served as
President and Chief Executive Officer and finally as Chairman
and Chief Executive Officer.

Mr. Sweeney is a Managing Director at Lehman Brothers Inc.,
where he is involved in high yield, distressed and special
situation investments. He has been with Lehman Brothers and
predecessor firms since 1974.

"The management of Imperial Sugar looks forward to working with
our new directors. With their counsel and the Company's
strengthened financial capabilities, Imperial expects to be able
to profitably expand its leadership role in the sugar and
foodservice industries", stated James C. Kempner, Imperial's
President and CEO.

Imperial Sugar Company is the largest processor and marketer of
refined sugar in the United States and a major distributor to
the foodservice market. The Company markets its products
nationally under the Imperial(TM), Dixie Crystals(TM),
Spreckels(TM), Pioneer(TM), Holly(TM), Diamond Crystal(TM) and
Wholesome Sweeteners(TM) brands.  Additional information about
Imperial Sugar may be found on its web site at
http://www.imperialsugar.com.


INTEGRATED HEALTH: Has Until October 1 To Remove Proceedings
------------------------------------------------------------
Integrated Health Services, Inc. sought and obtained a further
extension, pursuant to Bankruptcy Rule 9006(b), of the period
within which they may file notices of removal in the bankruptcy
court, with respect to civil actions pending on the Petition
Date, through and including October 1, 2001.

The Debtors remind Judge Walrath that they may be party to pre-
petition actions currently pending in the courts of various
states and federal districts, but due to the size and complexity
of these cases, they have not had a full opportunity to
investigate their involvement in the Pre-Petition Actions. The
Debtors tell Judge Walrath that because their personnel and
management has been focused primarily on stabilizing the
business, administering the bankruptcy proceeding and developing
a business plan to take the Debtors through reorganization, they
and their professionals have not had sufficient time to fully
review all of the Pre-Petition Actions to determine if any
should be removed pursuant to Bankruptcy Rule 9027(a).

The Debtors submit that the extension sought will afford them an
opportunity to make a more fully informed decisions concerning
the removal of each Pre-Petition Action. Further, the Debtors
represent, the rights of the adversaries will not be prejudiced
by such an extension, as any party to a Pre-Petition Action that
is removed may seek to have it remanded to the state court
pursuant to 28 U.S.C. Section 1452(b). (Integrated Health
Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


KAISER ALUMINUM: Second Quarter Net Loss Amounts To $64 Million
---------------------------------------------------------------
Kaiser Aluminum Corporation (NYSE:KLU) reported a net loss of
$64.1 million, or $.80 per share, for the second quarter of
2001, compared to net income of $11.0 million, or $.14 per
share, for the second quarter of 2000.

Results also include a number of other special items and
adjustments. Excluding all such items from both periods, the
company reported a net loss of $19.7 million, or $.25 per share
for the second quarter of 2001, compared to net income of $6.4
million, or $.08 per share, for the year-ago quarter.

Results for the second quarter include a non-cash pre-tax charge
of $45.8 million related to an increase in the company's net
asbestos liability. The charge results from the company's
recurring assessment of existing reserves, primarily for 2003 to
2010 cash outflows, net of expected insurance recoveries, based
on recent spending and other trends experienced by Kaiser and
other companies. The company continues to believe that it has
insurance coverage available to recover a substantial portion of
its asbestos-related spending.

For the first six months of 2001, Kaiser's net income was $55.5
million, or $.70 per share, compared to net income of $22.7
million, or $.29 per share, for the first six months of 2000.
Both periods include previously cited special items and
adjustments.

Net sales in the second quarter and first six months of 2001
were $446.8 million and $927.1 million, compared to $552.8
million and $1,128.5 for the comparable periods of 2000.

Kaiser Chairman and Chief Executive Officer Raymond J.
Milchovich said, "Our operating results in the second quarter of
2001 were well below those of the year-ago quarter largely as a
result of continuing costs associated with the startup of the
Gramercy, La., alumina refinery; an almost 50% decline in
primary aluminum shipments due to smelter curtailments in the
Pacific Northwest; a 9% decline in realized prices for alumina;
and weak demand in a number of key fabricated products markets."

Separately, Kaiser has reached a settlement with its insurers
under which the company will receive additional cash payments
totaling $35 million in the second half of 2001 in respect of
its Gramercy-related business interruption, property damage and
related claims. (Insurance matters related to liability and
workers' compensation are handled separately.) Since the
settlement exceeds the company's previous insurance accrual,
Kaiser recognized a pre-tax benefit of $15.2 million in the
second quarter of 2001.

In another matter, Kaiser said its existing $300 million credit
agreement has been extended to Nov. 2, 2001 from its previous
expiration date of Aug. 15, 2001. The company sought the
extension in order to gain additional flexibility in advance of
the February 2002 maturity of its 9-7/8% senior notes. The
company anticipates further extension or renewal of the credit
agreement in conjunction with steps to address its capital
structure. Under the credit agreement, as of June 30, 2001, the
company had no borrowings and $191 million of availability.

Kaiser also noted that it is working with financial advisors to
review its options for addressing its near-term debt maturities
and its overall capital structure. While Kaiser continues to
consider potential asset transactions (beyond the recently
announced agreement to sell an interest in Queensland Alumina
Limited), the company intends to pursue only those transactions
that would create long-term value through strategic positioning
and/or the generation of acceptable levels of earnings and cash.
The company cannot predict if any such transactions will
materialize.

Milchovich said, "We clearly have a challenging near-term
environment, but we are encouraged by the progress we are making
to realize $50 million to $75 million of improvement in
Gramercy's annualized operating income from second-quarter
levels once that facility reaches full operation; to increase
the operating cash flow of the company -- through our
performance improvement initiative -- to an annualized run rate
of $235 million by early 2003; and to address our near-term debt
maturities."

Kaiser Aluminum Corporation is a leading producer of alumina,
primary aluminum and fabricated aluminum products. MAXXAM Inc.
(AMEX:MXM) directly and indirectly holds approximately 63
percent of Kaiser.


LAIDLAW INC.: Retains Zolfo Cooper As Restructuring Officers
------------------------------------------------------------
Laidlaw Inc. asks Judge Kaplan to approve the continued
employment of:

       * Stephen Cooper as Chief Restructuring Officer;

       * Thomas Zambelli as Restructuring Director; and

       * Rod Peckham as Assistant Restructuring Director

under prepetition agreements retaining them as temporary
restructuring employees.  In July 2000, LINC contacted Zolfo
Cooper LLC to provide restructuring services to the Laidlaw
Companies, which were experiencing financial difficulties due
to, among other things, their heavy debt load.  On July 11,
2000, LINC and Zolfo Cooper Management LLC entered into an
agreement employing Stephen Cooper as Chief Restructuring
Officer and retaining Zolfo Cooper to provide restructuring
advice to the Debtors.  Under this agreement, Mr. Cooper agreed
to (a) serve as LINC's principal representative in meetings with
employees, creditors, actual and potential stakeholders and
advisors involved in the restructuring of the Laidlaw Companies,
(b) direct and coordinate the efforts of LINC's professional
advisors, and (c) coordinate with LINC's other officers a
restructuring plan that advanced the operational objectives of
the Laidlaw companies.  Since the consummation of the July
Agreement, Mr. Cooper has been intensively involved in
restructuring the Debtors' businesses and finances and the
operations of the other Laidlaw Companies.  Mr. Cooper's efforts
in this capacity were assisted by other professionals from Zolfo
Cooper.

As the Laidlaw Companies' restructuring efforts continued, it
was determined that the Laidlaw Companies would be better served
by having certain employees of Zolfo Cooper focus exclusively on
the efforts to restructure the Laidlaw Companies.  Consequently,
Mr. Zambelli and Mr. Peckham have been dedicated to the Laidlaw
Companies' restructuring efforts since the fall of 2000.  On
June 27, 2001, LINC formalized this use of the officers as
temporary employees by entering into a series of letter
agreements with Zolfo Cooper that superseded and replaced the
July 11 Agreement. The employment agreements consist of a letter
agreement dated June 27, 2001, between LINC and Zolfo Cooper
Services, Inc., for the services of Stephen Cooper, a letter
agreement dated June 27, 2001, between Zolfo Cooper Management
Advisors Services, inc. for services provided by Mr. Zambelli
and Mr. Peckham outside Canada, and a letter agreement dated
June 27, 2001, between Zolfo Cooper Management Advisors, inc.,
for services provided by Mr. Zambelli and Mr. Peckham within
Canada.

Under the employment agreements, LINC has agreed to continue to
employ Stephen Cooper as Chief Restructuring Officer and to
employ Thomas Zambelli as Restructuring Director and Rod Peckham
as Assistant Restructuring Director.  Under the Cooper
Agreement, Mr. Cooper agreed to direct and supervise the
Debtors' restructuring efforts, including by serving as the
Debtors' principal representative in meetings and discussions
with the Laidlaw Companies' employees and the creditors, actual
and potential stakeholders and advisors interested in the
Debtors' restructuring, and by directing and coordinating the
efforts of the Debtors' professional advisors.  Mr. Zambelli and
Mr. Peckham have agreed to provide, among other things,
management and financial analysis services related to the
Debtors' restructuring.  Each of these agreements provides that
the officers are engaged on a month-to-month basis.  The
agreements may be terminated at any time by either party by
providing the other party at least 30 days' prior written
notice.  Under the agreements, these officers only report
directly to the Board of Directors of LINC.

The Debtors tell Judge Kaplan that these officers have provided
advice and assistance to the Debtors with respect to:

      (a) developing and implementing ongoing business and
          financial plans;

      (b) conducting restructuring negotiations with counsel for
          the Bank Group and the Noteholders' Committee; and

      (c) preparation of the Plan.

The Debtors claim that these officers' efforts were
"indispensable" in completing the plan by the Petition Date.
Replacing these officers at this point would be extremely
disruptive to the Debtors' restructuring efforts and these
chapter 11 cases.

The Cooper Agreement provides that, in consideration for ZCS's
provision of Mr. Cooper as Chief Restructuring Officer, ZCS will
receive:

      (a) $250,000 per month, payable on the first of each month;

      (b) reimbursement for reasonable out-of-pocket expenses;

      (c) in the event that the Debtors (i) obtain a consensual
          restructuring, compromise or extinguishment of their
          outstanding indebtedness, or (ii) a final judicial
          order approving a restructuring of the Debtors under
          chapter 11 of the Bankruptcy Code or the equivalent
          provisions of the CCAA, an $8,500,000 Success Fee.  If
          the Debtors fail to obtain a consensual or court-
          approved restructuring due to the break-up or
          liquidation of the Debtors, ZCS will be entitled to
          receive a $1,500,000 Liquidation Fee.

Under the Cooper Agreement, if Mr. Cooper's employment is
terminated and a liquidation, reorganization or restructuring
occurs within the 18 months following the effective date of
termination, ZCS will be entitled to a full success fee or
liquidation fee, as applicable.  The Debtors paid a retainer of
$250,000 to ZCS on June 27, 2001, to secure performance under
the Cooper Agreement, refundable upon the termination of the
Cooper Agreement and after ZCS's fees and expenses have been
paid in full.

The United States Agreement provides that, in consideration of
ZCMAS's provision of Mr. Zambelli as Restructuring Director and
Mr. Peckham as Assistant Restructuring Director, for services
performed outside of Canada, ZCMAS will be entitled to receive:

      (a) $45,000 per month for the services of Mr. Zambelli;

      (b) $30,000 per month for the services of Mr. Peckham; and

      (c) reimbursement of reasonable out-of-pocket expenses
          related to the provision of services by Mr. Zambelli
          and Mr. Peckham, other than those reimbursed under the
          Canadian Agreement.

Under the Canadian Agreement, ZCMA will receive, in
consideration for its provision of Mr Zambelli as Restructuring
Director and Mr. Peckham as Assistant Restructuring Director,
for services performed inside Canada:

        (a) $1,775 per day for Mr. Zambelli;

        (b) $1,450 per ay for Mr. Peckham; and

        (c) reimbursement of reasonable out-of-pocket expenses
            related to the provision of Mr. Zambelli's and Mr.
            Peckham's services within Canada.

A retainer of $100,000 was paid to ZCMA on June 27, 2001, to
secure performance under the Canadian Agreement, refundable upon
termination of the Canadian Agreement, and after ZCMA's fees and
expenses have been paid in full.

Under each of the employment agreements, the Debtors also agree
that if they hire any principal or employee of ZCS, ZCMAS, or
ZCMA within one year of the final invoice rendered under the
employment agreements, the Debtors will pay to ZCS, ZCMAS, or
ZCMA, as applicable, a fee equal to 150% of the aggregate first
year's annualized compensation of such individual, including any
guaranteed or target bonus.

The Debtors argue that retention of these officers under the
provisions of the Bankruptcy Code authorizing debtors to assume
executory contracts is proper, citing the Court to such cases as
In re Imperial Home Decor, regarding retention of a chief
executive officer, and In re Clothestime, Inc., regarding
retention of a vice president.  Further, the United States
Bankruptcy Court for the District of Delaware has recently
approved retention of corporation officers under the Bankruptcy
Code in the case of In re Bill's Dollar Stores, Inc., in which
the Debtor contacted an interim management firm, Osnos
Corporation, which could provide officers with significant
experience in turnaround situations.  The court authorized the
continuation of prepetition practice by which Osnos was paid for
two officers' services postpetition. (Laidlaw Bankruptcy News,
Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-0900)


LTV CORPORATON: Notice Of Auction for VP Buildings Assets
---------------------------------------------------------

                  UNITED STATES BANKRUPTCY COURT
                    NORTHERN DISTRICT OF OHIO
                         EASTERN DIVISION

-----------------------------------
In re:                             )     Chapter 11
LTV STEEL COMPANY, INC.,           )     Jointly Administered
A New Jersey corporation, et al.,  )     Case No. 00-43866
                           Debtors. )     Judge William T. Bodoh
-----------------------------------

       NOTICE OF (A) SALE OF THE ASSETS OF VP BUILDINGS, INC.
AND
        ITS DEBTOR AFFILIATES, (B) AUCTION AND (C) SALE HEARING
        -------------------------------------------------------

PLEASE TAKE NOTICE OF THE FOLLOWING:

      1.  VP Buildings, Inc.; VP-Graham, Inc.; Varco Pruden
International, Inc.; and United Panel, Inc. (collectively, the
"Sellers"), four of the above-captioned debtors and debtors in
possession (collectively, the "Debtors"), are soliciting offers
for the purchase of substantially all of their assets
(collectively, the "Assets").

      2.  The Sellers will conduct an auction of the Assets (the
"Auction") on August 21,2001 at 9:00 a.m. in the offices of
Davis, Polk and Wardwell, special corporate counsel for the
Debtors, located at 450 Lexington Avenue, New York, New York.
All interested parties are invited to submit a qualifying bid to
be eligible to attend the Auction and submit competing offers to
purchase the Assets.

      3.  Participation at the Auction is subject to certain
court-approved terms and conditions, including the submission of
written offers, along with bid deposits and other information,
by August 8, 2001.  Copies of the bidding procedures and the
terms and conditions of the Auction may be obtained from (i) The
Blackstone Group, L.P., investment bankers for the Debtors, 345
Park Avenue, New York, New York 10154, Attn:  John McNicholas,
and (ii) Davis, Polk and Wardell, special corporate counsel for
the Debtors, 450 Lexington Avenue, New York, New York 10017,
Attn:  Philip Mills, Esq.

A hearing to approve the sale of the Assets to the highest and
best bidder at the Auction (including the assumption and
assignment to the successful bidder at the auction of certain
executory contracts and unexpired leases of the Sellers
(collectively, the "Assumed Contract") will be held on August
29,2001 at 1:30 p.m. at the U.S. Courthouse and Federal
Building, 125 Market Street, Youngstown, Ohio 44501, before the
Honorable William T. Bodoh, United States Bankruptcy Judge (the
"Sale Hearing"). {n1}  Objections, if any, to the sale of the
Assets must be in writing and filed with the Clerk of the
Bankruptcy Court and be served upon: (a) The LTV Corporation,
200 Public Square, Cleveland, Ohio 44114-2308, Attn:  Glenn J.
Moran, Esq.; (b) Jones, Day, Reavis & Pogue, 901 Lakeside
Avenue, Cleveland, Ohio 44114, Attn:  David G. Heiman, Esq. And
Heather Lennox, Esq.; and (c) Davis, Polk and Wardwell, 450
Lexington Avenue, New York, New York 10017, Attn:  Karen E.
Wagner, Esq.; (d) Akin, Gump, Strauss, Hauer & Feld, LLP., 590
Madison Avenue, 20th Floor, New York, New York 10022, Attn:
Lisa G. Beckerman, Esq.; (e) Reed Smith LLP, 435 Sixth Avenue,
Pittsburgh, Pennsylvania 15219, Attn:  Paul M. Singer, Esq.; and
(f) Morgan, Lewis & Bockius LLP, 101 Park Avenue, New York, New
York 10178, Attn:  Richard S. Toder, Esq., so as to be received
no later than 4:30 p.m. on August 27,2001 (the "Objection
Date").  Only objections that are timely filed and received by
the Objection Date will be considered by the Court.

      5.  Assumed Contracts may be removed from the Auction --
and therefore would no longer be subject to assumption and
assignment -- at the discretion of the Sellers, either as a
result of their independent review or by agreement with a
prospective purchaser.  Following the conclusion of the Auction,
the Sellers will identify at the Sale Hearing all Assumed
Contracts to be assumed and assigned to the successful bidder,
if any.

Dated:  July 18, 2001               BY ORDER OF THE COURT

David G. Heiman (0038271)           Jeffery B. Ellman (0055558)
Richard M. Cieri (0032464)          JONES, DAY, REAVIS & POGUE
Heather Lennox (0059649)            1900 Huntington Center
Carl E. Black (0069479)             41 South High Street
JONES, DAY, REAVIS & POGUE          Columbus, Ohio 43215
North Point, 901 Lakeside Avenue    (614) 469-3939
Cleveland, Ohio 44114
(216) 586-3939

ATTORNEYS FOR THE DEBTORS AND DEBTORS IN POSSESSION
______________

      {n1} The Sellers intend to file, by August 2, 2001, a
motion seeking Bankruptcy Court approval of (i) the sale of the
Assets to the successful bidder free and clear of all liens,
claims and encumbrances; (ii) the Asset Purchase Agreement (as
may be immaterially modified at the Auction); (iii) the
assumption and assignment of the executory contracts and
unexpired leases to be assumed by the Sellers and assigned to
the successful bidder and the establishment of cure costs
relating thereto; and (iv) the rejection of certain executory
contracts and unexpired leases.


LUCENT TECHNOLOGIES: Selling Optical Fiber Business for $2.75BB
---------------------------------------------------------------
Lucent Technologies (NYSE: LU) has entered into an agreement to
sell its Optical Fiber Solutions (OFS) business for $2.75
billion to Furukawa Electric Co., Ltd. (Tokyo: 5801) and Corning
Incorporated (NYSE: GLW).

Lucent will receive $2.525 billion from Furukawa for the major
portion of the business. Corning will pay $225 million in cash
for Lucent's interests in two joint ventures in China -- Lucent
Technologies Shanghai Fiber Optic Co. Ltd. and Lucent
Technologies Beijing Fiber Optic Cable Co., Ltd. In addition,
Furukawa and CommScope (NYSE: CTV) have agreed to enter into one
or more joint ventures that will be formed to operate the OFS
businesses. Up to $250 million of Furukawa's payment to Lucent
may be in CommScope securities.

The sale to Furukawa, which is subject to regulatory approval
and other customary closing conditions, is targeted to close
toward the end of the third calendar quarter. Sale of Lucent's
interest in the China joint ventures is subject to various
approvals, including Chinese governmental approval.

"We're pleased to have received the best value for this business
under difficult market conditions," said Bill O'Shea, executive
vice president, Corporate Strategy and Business Development at
Lucent. "This sale supports Lucent's goal to focus on the core
communications networking needs of the world's largest service
providers, while better positioning the fiber business to serve
its diverse customer base and make the investments it requires
for future success."

O'Shea added, "Lucent and Furukawa have had a strong, profitable
partnership in the fiber cable arena for nine years now through
our Fitel joint venture. In addition, Corning's acquisition of
our interest in the two China joint ventures keeps them aligned
with a key player in the industry."

Lucent's Optical Fiber Solutions business employs more than
6,000 people, with its headquarters and largest manufacturing
facility located in Norcross, Ga., a suburb of Atlanta. It also
has wholly owned and joint-venture facilities in Carrollton,
Ga., Massachusetts, North Carolina, New Jersey, Connecticut,
Denmark, China, Japan, Russia, Germany and Brazil.

                  About Lucent Technologies

Lucent Technologies, headquartered in Murray Hill, N.J., USA,
designs and delivers the systems, software and services for
next-generation communications networks for service providers
and enterprises. Backed by the research and development of Bell
Labs, Lucent focuses on high-growth areas such as broadband and
mobile Internet infrastructure; communications software; Web-
based enterprise solutions that link private and public
networks; and professional network design and consulting
services. For more information on Lucent Technologies, visit its
Web site at http://www.lucent.com


LUCENT: Signs Strategic Manufacturing Pact with Celestica Inc.
--------------------------------------------------------------
Lucent Technologies (NYSE: LU) has formed a strategic
relationship with Toronto-based Celestica, Inc. (NYSE, TSE:
CLS), a world leader in electronics manufacturing services, and
that the two companies have entered into a manufacturing supply
agreement.

Lucent will transition its manufacturing operations at Oklahoma
City and Columbus, Ohio to Celestica over the next few months.
Celestica will pay Lucent between $550 and $650 million in cash
for Lucent's plant and property in Columbus, and equipment and
inventory at both facilities. The final purchase price will be
determined by the assets, primarily inventory, transferred at
the time of the close. Celestica will lease the Oklahoma
facility.

As part of this transaction, Lucent will enter into a five-year
supply agreement valued at up to $10 billion with Celestica to
be the primary manufacturer for Lucent's switching, access and
wireless networking systems products.

"By expanding our use of contract manufacturers, Lucent will
benefit from their expertise and investments while we focus our
resources on developing the advanced intelligent networking
systems large service providers will need in the future," said
Rock Pennella, vice president, Project Management. "Working with
Celestica ensures we will continue to build networks with the
high-quality products our customers have come to expect from
Lucent."

The transaction is expected to close no later than the end of
this quarter and is subject to customary regulatory approvals.
Lucent manufacturing employees at the two facilities will remain
with Lucent during a transition period. Going forward Lucent
will operate a systems integration center in Columbus and an
administrative support operation in Oklahoma City.

"This agreement with Celestica takes a long-standing
relationship to a new level," said Jose Mejia, chief supply
officer and vice president of Supply Chain Networks for Lucent.
"This supports our new supply chain management strategy designed
to optimize cash flow from operations and free up capital, and
is a key example of our determination to create a more focused,
more efficient Lucent Technologies."

                    About Celestica

Celestica is a world leader in electronics manufacturing
services (EMS) for industry leading original equipment
manufacturers (OEMs). With facilities in North America, Europe,
Asia and Latin America, Celestica provides a broad range of
services including design, prototyping, assembly, testing,
product assurance, supply chain management, worldwide
distribution and after-sales service. For further information on
Celestica, visit its website at http://www.celestica.com

The company's security filings can also be accessed at
http://www.sedar.com


MARINER: Moves To Transfer Springfield, IL Healthcare Center
------------------------------------------------------------
On the petition date, the Landlord (LaSalle National Bank) and
Debtor EH Acquisition Corp. were parties to a Lease Agreement
relating to the Springfield Healthcare Center nursing home
facility located at 2800 West Lawrence Avenue, Springfield,
Illinois 62704. The Medicare provider number for the facility is
14-5716. The Lease was rejected by operation of law pursuant to
section 365(d)(4) of the Bankruptcy Code.

To enable the parties to transfer operations at the Facility
orderly, the Mariner Post-Acute Network, Inc. Debtors seek the
Court's approval of:

      (1) the Settlement Agreement by and between LaSalle
National Bank (the Landlord) and EH, as current operator and
tenant;

      (2) the Operations Transfer Agreement by and among the
Landlord, the Replacement Operator, Sangamon Associates, LLC and
EH;

      (3) the rejection of certain executory contracts related to
the Facility;

      (4) the assumption and assignment to Sangamon of the
Medicare provider agreement between EH and the Health Care
Financing Administration (HCFA).

                   The Settlement Agreement

The Settlement Agreement generally provides for:

      (a) Limitation on the payment of administrative rent from
and after May 31, 2001;

      (b) A waiver of administrative rent and property tax claims
from October 1, 2002 to April 30, 2001 in return for a subsidy
to be paid to Sangamon to take over operation of the Facility;

      (c) A waiver of any and all other claims of the Landlord
against EH.

              The Operations Transfer Agreement

The material provisions of this provide for:

      (a) The transfer to the New Operator of supplies on hand at
the Facility, free and clear of liens and encumbrances;

      (b) The payment by EH of all administrative claims owed to
third parties and incurred in connection with the operation of
the Facility from the petition date to the date on which
Sangamon takes over operation of the Facility;

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

      (d) The coordination of final cost reports;

      (e) The employment by the New Operator of virtually all of
EH's employees at the Facility as of the Closing Date, thereby
avoiding any WARN Act and severance claims which might otherwise
be asserted if the Facility were to cease operations;

      (f) The assumption by Sangamon of claims of employees for
earned vacation time as a result of the payment of such amounts
to Sangamon by EH;

      (g) The payment of a $400,000 subsidy to Sangamon for
taking over operation of the Facility;

      (h) The assumption by Sangamon of certain group health care
obligations;

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

      (j) The assumption and discharge of all liabilities of EH
by Sangamon of certain employment benefits;

      (k) Prorations as of the petition date;

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

      (m) The assumption or rejection of certain executory
contracts;

      (n) The indemnification of Sangamon for recoupment claims
relating to the Medicaid provider agreement and number, for an
amount not to exceed $100,000 and only insofar as such claims
would otherwise be entitled to administrative priority.

               Assumption And Assignment Of
             The Medicare Provider Agreement

As part of the Operations Transfer Agreement, EH 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.

           Rejection of the Service Contracts

Because EH intends to cease doing business at the Facility, the
service contracts related to the Facility will be unnecessary
and burdensome to EH's estate upon the Closing Date. EH and the
Landlord have agreed that EH is not and will not be obligated to
assume or assign the Service Contracts, except as designated by
Sangamon. (Mariner Bankruptcy News, Issue No. 15; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


NETSOL INT'L: Settles Dispute With Jonathan Iseson, et al
---------------------------------------------------------
As previously reported in June the District Court, Clark County,
Nevada appointed George C. Swarts as Receiver for Netsol
International Inc., resulting from a pending motion for a
preliminary injunction in the case of NetSol International, Inc.
vs. Jonathan D. Iseson, et al. civil action (Case No. A435871).
On July 16, 2001, the District Court approved a settlement
agreement between all parties to the Case and the Receiver.
The Settlement Agreement provides for:

      (i) The appointment of Peter Sollenne, Chief Executive
          Officer, and Naeem Ghauri, President of the Company, to
          manage the Company subject to the continuing control
          and supervision of the Receiver;

     (ii) Execution of mutual releases and dismissal of all
          pending litigation with prejudice, by all parties to
          the Case;

    (iii) Settlement of certain employment compensation matters
          and expense reimbursement to former officers of the
          Company;

     (iv) One million dollars ($1,000,000) in interim financing
          to the Company, to be funded equally by each party to
          the Case, which may in the form of sales of restricted
          Company stock;

      (v) A share recall of all outstanding stock in the Company,
          and an issuance of new shares with new CUSIP numbers to
          current stockholders of the Company (the "Share
          Recall"); and

     (vi) As soon as reasonably practical following the
          completion of the Share Recall, the Receiver to call a
          special stockholder's meeting (the "Company Meeting")
          to determine, among other things, the continued
          management of the Company. Pending the conclusion of
          the Company Meeting, the Receiver shall remain in
          place.

The Settlement Agreement also contemplates an asset sale by the
Company to the Ghauri Brothers, the terms of which would be
contained in a separate letter of intent to be agreed upon
between the parties to the Case, and subject to a fairness
opinion, shareholder and court approval, along with compliance
with any and all other requirements of applicable state and
federal law.


OWENS CORNING: Moves To Pay Waxahachie & Ellis County, TX Taxes
---------------------------------------------------------------
Owens Corning asks Judge Fitzgerald for her authority to pay
prepetition, ad valorem taxes to the City of Waxahachie, and
taxing authorities in Ellis County, Texas, for the year 2000.
The City of Waxahachie, located in the County of Ellis, Texas,
has established commercial/industrial tax abatement programs in
order to encourage development in the City and to maintain
and/or enhance the commercial and industrial economic and
employment base of Waxahachie.

In September 2000, Owens Corning fka Owens Corning Fiberglas
Corporation, entered into a tax abatement agreement with the
City, the Ellis County, Texas Water Control and Improvement
District No. 1, and Ellis County. Under the terms of this
agreement, Owens agreed to make improvements to certain property
located in the City and, upon completion, to operate the subject
property as a manufacturing plant for insulation materials. In
return for the foregoing, the taxing authorities agreed, subject
to certain terms and conditions, to abate a portion of Owens' ad
valorem real and personal property taxes relating to the
improvements made to the property. Specifically, the agreement
provides that the tax abatements "shall be an amount equal to
60% for 2001; 50% for 2002; 40% for 2003; 30% for 2004; 20% for
2005; and 10% for 2006, of the taxes assessed upon the increased
value of the improvements to the property over the value in the
year 2000.

In order to receive the foregoing tax abatement, the Agreement
requires, among other thins, that Owens not become delinquent on
the ad valorem taxes it owes to the taxing authorities. In the
event of a delinquency, certain of the taxing authorities may
terminate the agreement, after complying with specified notice
procedures. Due to the timing of its bankruptcy filing, Owens is
in fact delinquent on certain prepetition ad valorem property
taxes owed to he taxing authorities. Because of this
delinquency, the taxing authorities have threatened to terminate
the agreement, absent payment of the past-due ad valorem
property taxes at issue.

Although the Debtors do not believe that the taxing authorities
can properly terminate the benefits of the agreement without
first obtaining relief from the automatic stay, the Debtors have
nonetheless determined that it is in the interest of the Debtors
and their creditors that they become current on their ad valorem
property tax obligations to the taxing authorities. The Debtors
accordingly seek, by this Motion, authority under the Court's
statutory equity power to pay the prepetition ad valorem
property taxes at issue, including interest as allowed under the
Bankruptcy Code, to the taxing authorities for he year 2000.

The amount of the taxes is $370,805.51, plus interest of,
through June 2001, approximately $29,664.49.

The Debtors argue that payment of these taxes should be
authorized under the Court's general equity powers to carry out
the intent and purposes of the Bankruptcy Code. Numerous courts
have used these equitable powers under the "necessity of
payment" doctrine to authorize payment of a debtor's prepetition
obligations where, as here, such payment is necessary to
effectuate the paramount purpose of chapter 11 reorganization,
which is to prevent the debtor from going into liquidation and
to preserve the debtor's potential for rehabilitation.

This doctrine has also been invoked if nonpayment of a
prepetition obligation would trigger a withholding of goods or
services essential to a debtor's business reorganization plan.

The payment of these taxes is necessary and essential to the
Debtors' reorganization efforts for multiple reasons. If the
taxes remain unpaid, Owens will become enmeshed in litigation
with the taxing authorities over whether the agreement can be
unilaterally terminated without court permission, and/or whether
court permission, by means of an order lifting the automatic
stay, should be granted. In addition, there is likely to be
litigation among the parties as to whether Owens can, by an
eventual assumption of the agreement, obtain the benefit of the
tax abatement, given the fact that the taxes pre-date the
effectiveness of the agreement and are, arguably, not due under
the agreement.

Separate and apart from these reasons, the Debtors advise that
payment of the taxes will avoid the likely assertion by the
taxing authorities that the amount due is secured by a lien on
property of the Debtors under Texas law. Even if the taxes are
not secured by a lien on property of the Debtors' estates, they
are most likely entitled to "priority" status under the
Bankruptcy Code. Thus, Owens' proposed payment of the taxes now
will, in all likelihood, affect only the timing of the payment
and not the amount to be received by the taxing authorities.
Other creditors and parties-in-interest therefore will not be
prejudiced if the relief sought in this Motion is granted. For
all of these reasons, the Debtors believe that granting the
relief requested is appropriate and provides the best means for
maximizing value for the Debtors, their estates, shareholders an
creditors. (Owens Corning Bankruptcy News, Issue No. 13;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


PACIFIC GAS: CalFed Seeks Stay Relief To Settle Slip & Fall Case
----------------------------------------------------------------
Cal Fed Bank, Cal Fed Corporation and First Madison Bank FSB
seek an order terminating the automatic stay as to Pacific Gas
and Electric Company to permit a good faith settlement in Payne
v. Cal Fed Bank, et al., pending before the Santa Clara Superior
Court (Case No. 780496), in which PG&E is a co-defendant, cross-
defendant and cross-complaintant, to proceed.

In the underlying lawsuit, David Payne, Sr., alleges that he was
walking on a public sidewalk in front of a Cal Fed Bank building
when he tripped and fell into a large hole surrounding an
underground PG&E electric box. Mr. Payne was injured and sued
Cal Fed, PG&E and the City of San Jose. Each of the defendants
cross- complained seeking indemnification from the other.
Mediation followed. Cal Fed agrees to pay Mr. Payne $13,500 and
the City of San Jose agreed to pay Mr. Payne $6,500 in exchange
for a full release. Cal Fed and the City require a finding by
the Superior Court that the settlement is in good faith in order
to preclude PG&E from seeking indemnity from Cal Fed or the
City. That necessitates entry of an order lifting the stay.

"PG&E will not be adversely affected by the settlement," Jeremy
W. Katz, Esq., at Gordon & Rees, LLP, tells Judge Montali, and
judicial econony will be served if the stay is lifted and the
Payne litigation is disposed of promptly. (Pacific Gas
Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


PACIFIC GAS: Asks for Public Hearing on CDWR Revenue Requirement
----------------------------------------------------------------
Pacific Gas and Electric Company sent a letter to the California
Department of Water Resources (CDWR) requesting a public hearing
on its revised revenue requirement it filed with the California
Public Utilities Commission (CPUC) Monday. The company also
issued the following statement on CDWR's revised revenue
requirement:

      "Given the significant lack of detail contained in the
Department of Water Resources' revenue requirement filings, it
is very difficult to determine the impact either version may
have on California utility customers. Furthermore, the changing
nature of CDWR's numbers, the use of numbers with the media that
do not appear to be supported by the filing itself, the
unsupported conclusion that CDWR's costs can be recovered
without diverting revenues needed to pay the utilities' costs,
and the failure to provide any revenue numbers beyond 18 months
in the future, all combine to create a disconcerting level of
uncertainty and confusion over what the filing really means.

      "Given the tremendous importance of this issue -- that is,
the determination of how much our customers will be required to
pay for electricity purchases by CDWR now and in the future --
this lack of information should be a cause of great concern for
all parties.

      "In an effort to dispel this confusion, and obtain the
information necessary to understand CDWR's filing, Pacific Gas
and Electric Company believes that a full, fair, and public
evidentiary hearing should be held on CDWR's revenue requirement
and the costs it is incurring for power purchases. The company
today sent a letter to the department requesting such a hearing
be held."

Among the missing data, discrepancies, and conflicting claims
such a hearing should dispel are the following:

Dramatic changes appear to have been made in the filing between
Sunday night, when it was presented to the media, and Monday
morning, when it was available on the CDWR website. These
changes include a $600 million increase in revenue recovery from
PG&E customers during 2002, at a time when rates should be
falling because of increased competition and lower gas prices
(Table A-2, PG&E Customer Revenue Requirement divided by PG&E
Retail Sales). The overnight changes also include a $1 billion
increase to Edison customers during 2002.

In briefing the media, CDWR representatives reported that in
addition to receiving the current utility energy charge
(approximately 6.5 cents/kwh for PG&E and 7.2 cents/kwh for SCE)
for its power purchases, the department would only need an
average 1.65 cents/kwh of the 3 cent surcharge imposed by the
CPUC in March. But according to the department's filing, the
average cost the department is seeking from California utility
customers is actually 10.8 cents/kwh over this year and next
(Table A-1, Customer Revenue Requirement divided by Retail Sales
(GWhs); CPUC Decisions 01-03-081 and 01-03-082, approved March
27, 2001).

Furthermore, given the lack of information provided in the
department's filing, it is impossible to verify the 1.65
cents/kwh number, or whether CDWR's rate increase will translate
to an increase in customer rates.

Under the CPUC's interim financing order, CDWR currently
receives approximately 9.5 cents/kwh for its power purchases on
behalf of PG&E customers. The new CDWR filing makes clear that
the department is seeking to charge PG&E customers a much higher
rate, especially in 2002. In that year alone, the department is
seeking to charge our customers an average rate of 13.7
cents/kwh. This represents more than a 44 percent increase in
CDWR charges -- or more than $930 million -- to PG&E customers
in 2002 (13.7 cents/kwh compared to 9.5 cents/kwh).

For SCE customers the increase appears to be even more dramatic:
CDWR currently receives approximately 10.2 cents/kwh from SCE
customers for its power purchases. In 2002, CDWR is seeking an
average of 15.3 cents/kwh, a 50 percent increase -- more than
$1.2 billion -- in charges to SCE customers.

While earlier financial projections by CDWR provided information
on expenditures and revenues into 2006 and beyond, this filing
only contains data for the next 18 months, ending in December
2002. Such an omission makes it impossible to analyze CDWR's
claims to the media that a rate decrease could be likely in
2003.

The CDWR filing does not include any financing costs (debt
service payments) related to the bonds prior to September 2002.
However, the filing notes that beginning on September 1, 2002,
the department will be required to make debt service deposits
amounting to 5 percent of the outstanding balance on the bonds
(page A-3). According to the filing, it appears that the
outstanding balance at that time will exceed $10.3 billion. It
is unclear if this means additional revenue from customers will
be required, totaling over $500 million in 2002.

The CDWR filing defers recovery of principal payments for the
Debt Service Account until March 1, 2003. Since the department
does not provide its customer revenue requirements past December
2002, it is unclear whether these payments will result in an
increase in charges to customers beginning in March 2003.

In the most recent version, CDWR estimates PG&E's Residual Net
Short to be 48,078 GWh from Jan. 17, 2001 through December 31,
2002. This appears about 10,000 GWh lower than CDWR's April
forecast, but no supporting information is included to explain
this discrepancy. On the other hand, Edison's Residual Net Short
is slightly higher now, compared to the department's April
forecast.


PRESIDENT CASINOS: Needs To Raise Funds To Pay Debts
----------------------------------------------------
The results of operations of President Casinos Inc., for the
three-month periods ended May 31, 2001 and 2000, include the
gaming results for the Company's operations in Biloxi,
Mississippi and St. Louis, Missouri and of much lesser
significance, the non-gaming operations in Biloxi (the
Broadwater Property) and St. Louis (Gateway Riverboat Cruises).
The three-month period ending May 31, 2000 also includes the
results of gaming operations in Davenport, Iowa and to a much
lesser significance the non-gaming operations in Davenport (the
Blackhawk Hotel) through the date of sale.  The assets of the
Davenport operations were sold on October 10, 2000.

The following table highlights the results of the Company's
operations.

                                       Three Months Ended May 31,
                                           2001        2000
                                          ------      ------
                                             (in millions)

      St. Louis Operations
        Operating revenues               $  20.1     $  16.4
        Operating income                     1.5         0.8

      Biloxi Operations
        Operating revenues               $  13.0     $  13.7
        Operating income                     0.9         1.7

      Davenport Operations
        Operating revenues               $    --     $  16.7
        Operating income                      --         2.1

      Corporate Leasing Operations
         Operating loss                   $  (0.1)    $  (1.0)

      Corporate Administrative
        and Development
        Operating loss                   $  (0.9)    $  (1.3)

The Company generated consolidated operating revenues of $33.1
million for the three-month period ended May 31, 2001 compared
to $46.8 million for the three-month period ended May 31, 2000.
The St. Louis operations experienced an increase in revenue of
$3.7 million and the Biloxi operations experienced a decrease in
revenue of $0.7 million.  Excluding the Davenport operations,
revenues increased $3.0 million, or 10.0%.

The Company incurred a net loss of $2.5 million for the three-
month period ended May 31, 2001, compared to a net loss of $3.2
million for the three-month period ended May 31, 2000.

President Casinos meets its working capital requirements from a
combination of internally generated sources including cash from
operations and the sale or charter of assets.

The Company believes that it has adequate sources of liquidity
to meet its normal operating requirements.  However, during
fiscal 2000, as a result of the Company's high degree of
leverage and the need for significant capital expenditures at
its St. Louis property, management determined that, pending a
restructuring of its indebtedness or otherwise dealing with its
lenders, it would not be in the best interest of the Company to
make the regularly scheduled interest payments on its Senior
Exchange Notes and Secured Notes. Accordingly, the Company was
unable to pay the regularly scheduled interest payments of $6.4
million that were each due and payable March 15, 2000 and
September 15, 2000.  Under the Indentures pursuant to which the
Senior Exchange Notes and Secured Notes were issued, an Event of
Default occurred on April 15, 2000, and is continuing.
Additionally the Company was unable to pay the $25.0 million
principal payment due September 15, 2000 on the Senior Exchange
Notes.  The holders of at least 25% of the Senior Exchange Notes
and Secured Notes were notified and instructed the Indenture
Trustee to accelerate the Senior Exchange Notes and Secured
Notes and declare the unpaid principal and interest to be due
and payable.

By suspending the interest payments on the Senior Exchange Notes
and Secured Notes until such time as either a restructuring plan
has been negotiated and implemented or the Company pursues a
voluntary liquidation of assets approved by its lenders, the
Company believes that its liquidity and capital resources will
be sufficient to maintain all of its normal operations at
current levels during the period and does not anticipate any
adverse impact on its operations, customers or employees.
However, costs incurred and to be incurred in connection with
any restructuring or voluntary liquidation plan have been and
will continue to be substantial and, in any event, there can be
no assurance that the Company will be able to restructure
successfully its indebtedness and that lenders will allow the
Company to liquidate assets voluntarily or that its liquidity
and capital resources will be sufficient to maintain its normal
operations during the period.

The Company requires approximately $5.5 million of cash to fund
daily operations.  As of February 28, 2001, the Company had $2.8
million of non-restricted cash in excess of the $5.5 million.
The Company is heavily dependant on cash generated from
operations to continue to operate as planned in its existing
jurisdictions and to make capital expenditures.  Management
believes that unless the debt holders take further action with
respect to the Company's defaults, its existing available cash
and cash equivalents and its anticipated cash generated from
operations will be sufficient to fund all of its ongoing
operating properties but not meet all its obligations for
borrowed money.  To the extent cash generated from operations is
less than anticipated, the Company may be required to curtail
certain planned expenditures or seek other sources of financing.
The Company may be limited in its ability to raise cash through
additional financing.


PSINET INC.: U.S. Court Approves Proposed Cross-Border Protocol
---------------------------------------------------------------
Judge Gerber approved a cross-border protocol presented by
PSINet Inc. and their counsel Wilmer, Cutler & Pickering,
subject to approval of the same by the Canadian Court. The
Debtors and their counsel advised that simultaneously with the
filing of the motion in the U.S. Court, similar relief was being
sought in the Canadian Court and was anticipated to be heard by
the Canadian Court in mid-July 2001.

The Debtors tell the Court they need the relief in light of
their business in the provision of Internet connectivity across
national borders and across continents and because their
businesses are fully integrated with those of the Canadian
Companies. In May, 1998, PSINet established their Canadian
presence and since then, the Canadian Companies have become one
of the largest internet providers in Canada, PSINet relates.
Presently, PSINet is the 100% owner of the common stock of the
Canadian Companies. Given the "interconnectedness" of the PSINet
Entities' network and operations, numerous operational
relationships exist between the United States Chapter 11 Debtors
and the Canadian Companies.

             Cross-Border Operational Relationships

Specifically, the operational relationships between the PSINet
U.S. Chapter 11 Debtors and the Canadian Companies include,
without limitation, the following:

      (a) A portion of the IRUs which comprise the Canadian
network fall below the Canadian border and run through United
States' territory. The cables that are located in the United
States are connected to a facility in Troy, New York which
controls traffic flow over the PSINet Entities' entire network.

      (b) A large portion of the Debtors' daily Internet
communications may at any one time be routed through the
Canadian fiber optic and other IRU cables. Internet
communications also at times pass through Canada.

      (c) PSINetworks Company, a Chapter 11 Debtor, and
PSINetworks Canada Limited, a Canadian Company, are both parties
to certain agreements, including IRUs and operation and
maintenance agreements, with cable ptoviders that support the
backbone of Canadian fiber optic network.

      (d) PSiNetworks Company is a party to a colocation
agreement providing the Canadian Companies with access and space
to certain facilities in Canada.

      (e) the capital structure of the Canadian Companies
consists primarily of funding by PSINet including, inter alia,
the following:

          -- As of March 31, 2001, more than two-thirds of the
approximate $300 million in total liabilities of PSINet
Limited was comprised of intercompany debt owing to PSINet
on account of loans and/or other financial accommodations
made by PSINet to PSINet Limited.

          -- As of March 31, 2001, PSINetworks Canada Limited's
$48 million in total liabilities was comprised almost entirely
of intercompany debt owing to PSINet.

          -- As of March 31, 2001, PSiNetworks Realty Canada
Limited's $75 million in total liabilities was comprised
primarily of intercompany debt owing to PSINet.

          -- PSINet has guaranteed at least $48 million in
equipment financings and other obligations for the benefit of
the Canadian Companies.

The Debtors believe that the Protocol is necessary and
appropriate for the administration of these Chapter 11 cases and
the CCAA Proceedings to avoid inconsistent decisions among the
Courts and to substantially reduce the risk of "forum shopping".

One of the most pertinent examples of the need for cross-border
relief relates to the proposed sale of substantially all of the
assets of the Canadian Companies to Telus Corporation, the
Debtors note. The sale also comprises the sale to Telus of
assets of PSINetworks Company, a US Debtor, and approval of the
Canadian Companies' sole shareholder, PSINet, to vote the shares
in favor of this transaction. On June 18, 2001, the Debtors
filed a motion with the U.S. Court seeking, inter alia, approval
of certain bidding procedures and approval of the sale of their
Canadian businesses to Telus. A motion for approval of the
bidding procedures in connection with the sale has been approved
by order of the Canadian Court and a motion requesting approval
of the sale will be filed with the Canadian Court. It is the
Debtors' hope to hold a joint hearing before the two Courts to
consider approval of the sale to Telus because it involves
issues of concern to both Courts. A protocol would facilitate
such a joint hearing.

Approval and implementation of the Protocol, the Debtors
represent, will allow the U.S. Court and the Canadian Court to
establish guidelines within which both Courts may address issues
that are of mutual concern. The Debtors note that the Protocol
will allow for (i) communication among the Courts that adheres
to basic principals of comity, (ii) a coordinated process among
the parties and the Courts, and (iii) a determination of which
Court or whether both Courts should determine certain Cross-
Border Matters.

                      The Protocol

In brief terms, the provisions of the Protocol are as follows:

(A) Cross-Border Matters

     The Protocol states that the following Cross-Border Matters
will be heard by both Courts jointly:

     * the Asset Sale Approval;

     * the Allocation of Proceeds as between the Chapter 11
Debtors and the CCAA Debtors;

     * all IRU Matters;

     * the Reorganization Plan, but only to the extent that
Debtors in both jurisdictions are parties to the Reorganization
Plan or are required to provide financial assistance to a Debtor
in another jurisdiction.

The Protocol states that the following guidelines will be
applied to determine which Court is appropriate to hear the
following Cross-Border Matters:

   (1) Contract Claims

     - where Debtors in both jurisdictions are primary obligors
under a third party contract, the Contract Claims will all be
determined, valued and resolved by the Court of the country in
which the substantive law governing the contract applies;

   (2) Issues re Third Party Equipment and Financing Leases

     - except to the extent that claims and issues relate to
Contract Claims, claims and issues relating to third party
equipment and financing leases of personal property and any
ancillary or related claims thereunder, including any guarantee,
indemnity or surety claims, and the sale or assignment thereof
(including the leased or financed assets) will all be
determined, valued and resolved by the Court having jurisdiction
over the Debtor having the primary obligation under such lease;

   (3) Real Estate Issues

     - claims and issues with third parties relating to real
estate property and any leases of real property, and the sale
thereof, will all be determined, valued and resolved by the
Court of the country where the real property is located;

   (4) Proceeds of Sale

     - the allocation of proceeds of sale solely as between and
among Chapter 11 Debtors and the distribution of proceeds of
sale of assets allocated to any one of the Chapter 11 Debtors
will be determined and resolved by the US Court; the allocation
of proceeds of sale solely as between CCAA Debtors and the
distribution of proceeds of sale of assets allocated to any one
of the CCAA Debtors will be determined and resolved by the
Canadian Court;

   (5) Inter-Company Claims

     - Inter-Company Claims of the Chapter 11 Debtors against
the CCAA Debtors, including their priority in the Canadian
Proceedings, will be determined, valued and resolved by the
Canadian Court;

     - the Inter-Company Claims of the CCAA Debtors against the
Chapter 11 Debtors, including their priority in the US Cases,
shall be determined, valued and resolved by the US Court;

provided that, in either event, any set-off and netting after
the determination, valuation and resolution of the Inter-Company
Claims shall be applied and recognized in both jurisdictions to
the extent allowed under the laws governing each of the
Insolvency Proceedings, including the determination of any
priority issues relating to any such claims;

   (6) Other Claims Or Issues

     - any other claims or causes of action against the Debtors
will be determined, valued and resolved by the Court in which
the claims are asserted, unless principles of comity or forum
non conveniens dictate otherwise;

   (7) Priority of Claim for Voting

     - for purposes of voting and distributions in respect of
any Reorganization Plan or other plan of reorganization, the
priority of any claim, whether or not determined and resolved in
accordance with this Protocol, will be determined by the Court
having jurisdiction over the Debtor in which a claim is being
compromised under the Reorganization Plan or other plan of
arrangement or reorganization; and

   (8) except only to the extent dealt with under the Protocol,
each Court will retain exclusive jurisdiction over the Debtors
under its jurisdiction and all creditors of those Debtors under
a Reorganization Plan or other plan of arrangement or
reorganization.

(B) Cooperation

     The Debtors, Committee and Estate Representatives will
cooperate with each other in connection with actions taken in
the respective Courts and will take actions to coordinate the
administration of the Insolvency Proceedings. Each Court, where
appropriate and feasible, will defer to the judgment of the
other Court. The Courts may also communicate (with or without
the presence of counsel) and, in certain circumstances, may hold
joint hearings.

(C) Retention and Compensation of Professionals

     The Canadian Representatives will be subject to the sole and
exclusive jurisdiction of the Canadian Court (except to the
extent they appear in the U.S. Court). Additionally, the
Monitor Parties will be entitled to the same protections and
immunities in the Chapter 11 case that they are entitled to in
the CCAA Proceeding. The Canadian Representatives and their
professionals will be subject to the procedures and standards
for retention and compensation applicable in Canada.

The Chapter 11 Representatives will be subject to the sole and
exclusive jurisdiction of the U.S. Court. The Chapter 11
Representatives and their professionals will be subject to the
procedures and standards for retention and compensation
applicable under the Bankruptcy Code.

(D) Comity and Independence of the Courts

     The Protocol will not affect the respective independent
jurisdiction of the Courts. The Courts will retain their sole
and exclusive jurisdiction over their respective Insolvency
Proceedings.

(E) Rights to Appear and Be Heard

     The Debtors, creditors and other interested parties have the
right and standing to be heard in either the U.S. Court or the
Canadian Court. (PSINet Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


RANCH *1 INC.: Kahala Provides Additional $280,000 Financing
------------------------------------------------------------
Kahala Corp., a Florida corporation formerly known as Sports
Group International Inc. (OTC BB:KAHA) has provided an
additional $280,000 in debtor in possession financing to Ranch
*1 Inc. as part of a loan and security agreement which provides
up to $2.5 million in debtor in possession financing from Kahala
Corp. to Ranch *1.

Ranch *1 filed for Chapter 11 bankruptcy protection on July 3,
2001 in the U.S. Bankruptcy Court for the Southern District of
New York. On Thursday, July 5, 2001, the bankruptcy judge
assigned to the case approved an interim order allowing Kahala
Corp., through a wholly owned subsidiary, to advance $220,000 to
Ranch * 1 under the Loan Agreement.

On Wednesday, July 18, 2001, the same bankruptcy judge approved
a second interim order allowing Kahala Corp., through a wholly
owned subsidiary, to advance an additional $280,000 to Ranch *1
pursuant to the Loan Agreement.

Ranch *1, through its wholly owned subsidiaries, owns and
operates and franchises Ranch *1 quick service restaurants that
specialize in the sale of grilled chicken sandwiches and other
grilled chicken products, Ranch *1 famous fries, and other food
and beverage items.

Currently, there are 51 Ranch *1 restaurants operating in 12
states, the District of Columbia, and Taiwan, of which 47 are
franchised to third parties and the remaining four, all located
in Manhattan, N.Y., are corporately owned by Ranch *1.

                     About Kahala Corp.

Kahala Corp. currently owns Surf City Squeeze, Frullati Cafe &
Bakery, Rollerz, and Tahi Mana. Both Surf City Squeeze and
Frullati Cafe & Bakery are franchisors of juice bars/smoothie
stores and healthy food cafes throughout the United States,
Canada, and the Middle East that offer the company's signature
line of smoothies, sandwiches, salads, soups and other healthy
snacks.

Rollerz is a franchisor and operator of retail stores serving
gourmet-rolled sandwiches and blended fruit drinks/smoothies,
and Tahi Mana is a franchisor and operator of scaled down health
food supplements store centered around a juice bar, primarily in
health clubs and other strategic retail locations.

There are currently approximately 220 outlets open nationwide of
the company's four concepts. To learn more about the company and
its four concepts, please visit its website at
http://www.kahalacorp.com


RELIANCE GROOUP: Fitch Withdraws DDD Financial Strength Ratings
---------------------------------------------------------------
Fitch has withdrawn the `DDD' insurer financial strength ratings
(IFS) for the insurance subsidiaries of Reliance Group Holdings,
Inc. (Reliance), led by Reliance Insurance Company. The ratings
are listed below.

Reliance Insurance Company was put into rehabilitation in May
2001 by Pennsylvania State insurance regulators.

Reliance recently entered into Chapter 11 bankruptcy proceedings
following the default on public debt obligations in November
2000.

      Entity/Issue/Type                    Action         Rating
      -----------------                    ------         ------
      Reliance Insurance Company
           --Insurer financial strength   Withdrawn        `DDD'

      Reliance National Insurance Company
           --Insurer financial strength   Withdrawn        `DDD'

      Reliance National Indemnity Company
           --Insurer financial strength   Withdrawn        `DDD'

      United Pacific Insurance Company
           --Insurer financial strength   Withdrawn        `DDD'

      Reliance Insurance Company of Illinois
           --Insurer financial strength   Withdrawn        `DDD'

      Reliance Insurance Company of California
           --Insurer financial strength   Withdrawn        `DDD'

      Reliance National Insurance Company of New York
           --Insurer financial strength   Withdrawn        `DDD'

      United Pacific Insurance Company of New York
           --Insurer financial strength   Withdrawn        `DDD'


SAFETY-KLEEN: Restructuring ICC Information Technology Leases
-------------------------------------------------------------
Safety-Kleen Corporation, together with Safety-Kleen Services,
Inc., ask Judge Walsh to permit them to enter into a Lease
Termination and Restructuring Agreement with respect to certain
information technology equipment with IBM Credit Corporation.
Specifically, SK will (a) terminate the lease of approximately
3,049 pieces of IT equipment from ICC, and (ii) restructure the
lease of approximately 3,062 pieces of IT equipment from ICC to
bring them in line with current market conditions.

Entry into this settlement agreement will permit SK to avoid the
tremendous time and expense necessary to remove old, nearly
obsolete IT equipment and replace it with new IT equipment, and
will make the current leasing structure with ICC more
economically viable.

Under a Term Lease Master Agreement between SKC and ICC, SK
leased machines, field installable upgrades, feature additions
and/or accessories marketed by International Business Machine
Corporation. The details of each lease transaction were
described in various Term Lease Supplements separately agreed
upon. Once fully executed, each Lease Supplement, which refer to
and incorporate the Master Lease, constituted the lease for the
IT equipment scheduled in it. At present, SK leases, in the
aggregate, 6,111 pieces of IT equipment from ICC, with a
corresponding monthly lease payment of approximately $544,864.

                    Tier One Equipment

SK leases 1,900 pieces of IT equipment under leases with
expiration dates ranging from December 1999 to February 2001.
Safety-Kleen's aggregate monthly rental costs for the lease of
Tier One equipment was approximately $105,521.

Under the settlement agreement with ICC, if and to the extent it
remains in force and effect, the lease of the Tier One equipment
will be formally terminated. Following each termination, SK will
be permitted to retain possession of the IT equipment. As
consideration, and in exchange, for the right to retain
possession of the Tier One equipment, and in full satisfaction,
settlement, discharge and release of ICC's claims against SK
arising out of, relating to, or in connection with the lease of
the Tier One equipment, SK will pay ICC the sum of $114,590.

                    Tier Two Equipment

SK leases 1,106 pieces of IT equipment under leases with
expiration dates ranging from March 2001 to December 2001.
Safety-Kleen's aggregate monthly rental costs for the lease of
Tier Two equipment was approximately $67,705.

Under the settlement agreement with ICC, if and to the extent it
remains in force and effect, the lease of the Tier Two equipment
will be formally terminated, effective on payment of a
termination fee. Following each termination, SK will be
permitted to retain possession of the IT equipment. As
consideration, and in exchange, for the right to retain
possession of the Tier Two equipment, and in full satisfaction,
settlement, discharge and release of ICC's claims against SK
arising out of, relating to, or in connection with the lease of
the Tier Two equipment, SK will pay ICC the termination fee.

                 Tier Three Equipment

SK leases 3,062 pieces of IT equipment under leases with
expiration dates ranging from January 2002 to April 2003.
Safety-Kleen's aggregate monthly rental costs for the lease of
Tier Three equipment was approximately $223,206.

Under the settlement agreement with ICC, and in accord with an
Amended Term Lease Supplement, beginning on the first day of the
first month after entry of an Order, SK's monthly rental
payments for the Tier Three equipment will be $185,261 through
January 1, 2001, and declining thereafter on a monthly basis to
$134 in April 2003.

Upon certain dates, and without the necessity of any further
action by SK or ICC, title to the respective Tier Three
equipment will pass to SK, free and clear.

                 The Mainframe Equipment

SK leased approximately 43 mainframe equipment items from ICC,
all of which have been returned to ICC. SK's aggregate monthly
rental cost for the lease of the mainframe equipment was
approximately $148,432.

Under the settlement agreement with ICC, if and to the extent it
remains in force and effect, the lease of the mainframe
equipment will be formally terminated. As consideration, and in
full satisfaction, settlement, discharge and release of ICC's
claims against SK arising out of, relating to, or in connection
with the lease of the mainframe equipment, SK will pay ICC the
termination fee.

                    Additional Terms

Nothing in this settlement will alter ICC's status as lessor or
SK's status as lessee with respect to the lease of Tier Three
equipment. SK will be permitted to assign some or all of the
Tier Three equipment to any entity which acquires some, all, or
substantially all, of the assets of Safety-Kleen, or to any
subsidiary or affiliate or successor in a merger or acquisition
of Safety-Kleen under the Bankruptcy Code, or in conjunction
with a plan of reorganization, whether joint or stand-alone.

Safety-Kleen retains the right to reject the leases of the Tier
Three equipment without incurring administrative expense for the
then- remaining unexpired term in the event of appointment of a
Chapter 11 Trustee, or conversion of this case to a Chapter 7
proceeding. In the event of rejection, ICC will have a thirty-
day period in which to file a proof of claim for any prepetition
damages arising from the rejection, and will have an
administrative expense claim for any rent payment due on the
Tier Three equipment but not paid through and including the
effective date of the rejection. ICC will withdraw its
present proofs of claim.

                     Judge Walsh's Order

Judge Walsh approved this settlement, ordering that ICC's
interest in the Tier Three equipment will be deemed to be fully
perfected without the requirement of filing any financing
statements under the U.C.C., and permitting the filing of his
Order to constitute due perfection. (Safety-Kleen Bankruptcy
News, Issue No. 18; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


SINGING MACHINE: Reports Improved Revenues For Fiscal Year 2001
---------------------------------------------------------------
Total revenues of the Singing Machine Company Inc. increased
80.3% in the fiscal year ended March 31, 2001. The increase in
revenue from $19,032,320 to $34,306,839 in 2001 can be
attributed to the addition of a major customer and increased
awareness of karaoke in the retail community. Another factor
resulting in increased revenue is the addition of a major retail
customer to the Company's customer base. The addition of this
customer alone added 20% to revenues for this fiscal year.
The gross profit for 2001 was 34.5% as compared to 27.9% in
fiscal year 2000. The increased gross margin is due to a
favorable decrease in the cost of products, both hardware and
music. These decreases can be attributed to an increased volume
of purchasing. Another factor of increased gross margin is the
increased percentage of music sales as compared to hardware
sales. Overall, the gross profit on music sales is higher than
that of hardware.

The increase in income from operations from $1,525,668 to
$5,027,593 is due primarily to increased sales. Net income after
taxes (tax benefit) for the fiscal year ended March 31, 2001 and
2000 was $4,164,701 and $737,985, respectively. The increase in
sales and stability of general expenses attributed to the
increased bottom line. The tax expense for fiscal 2001 is due to
alternative minimum tax. The Company has remaining net operating
loss carry forwards to cover US taxes that may have been due on
the profitability of the Company.


U.S.A. FLORAL: Agrees To Sell Florimex To European Firm
-------------------------------------------------------
U.S.A. Floral Products, Inc. has entered into an agreement for
the sale of its International Division (Florimex) with Deutsche
Beteiligungs AG (DBAG), a European private equity firm, and
certain DBAG affiliates. The agreement covers all of the
Company's operations in Europe, Africa, Asia and Latin America.
The Company and DBAG entered into a memorandum of understanding
with respect to the sale on April 2, 2001.

Also on April 2, 2001, U.S.A. Floral Products, Inc. and 16 of
its U.S. subsidiaries voluntarily filed for protection under
Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy
Court for the District of Delaware. These filings did not affect
the International Division (Florimex).

The proposed sale of the International Division (Florimex) is
subject to higher and better offers and to Bankruptcy Court
approval. According to Dwight Ferguson, President of the
International Division (Florimex), U.S.A. Floral anticipates
that it will make filings with the Bankruptcy Court addressing
bid procedures and related matters later this week. Following
Bankruptcy Court approval of the procedures, the Company intends
to conduct an auction sale of the International Division. The
sale of the International Division (Florimex) to DBAG or to
another bidder is expected to close in September.

According to Mr. Ferguson, "the operations of the International
Division continue to be self-sustaining and our lenders have
been both helpful and supportive throughout the period of
negotiations with DBAG. We now have in hand a signed sales
agreement and, subject to the outcome of the auction process to
be approved by the Bankruptcy Court, we should be able to
complete a sale of the Division by the end of the quarter. Once
that is accomplished, the International Division should be
positioned to move forward, toward its full potential."

Due diligence with respect to the sale of the International
Division (Florimex) is being coordinated by Freyberg Close
Brothers GmbH and Legg Mason Wood Walker, Inc. Interested
parties should contact Jeffery Perkins, Freyberg Close Brothers
GmbH, Ulmenstr. 37, 18th Floor, 60325 Frankfurt/Main Germany;
telephone 49-69-972004-18; facsimile 49-69-972004-15; e-mail to
jeffery.perkins@freybergclosebrothers.com. or Jeffrey Manning,
Legg Mason Wood Walker, Inc., 100 Light Street, 34th Floor,
Baltimore, Maryland 21202; telephone (410) 454-5395; facsimile
(410) 454-4508; e-mail to jrmanning@leggmason.com.

As previously announced, as of May 7, 2001, U.S.A. Floral
Products had completed the sale of its North American
operations, including the assets of its Miami and West Coast
Bouquet operations and of its Import operations, and the stock
of its Canadian subsidiary. These sales were conducted under the
supervision of the Bankruptcy Court.

The Company continues to anticipate that all proceeds from the
sale of its assets, including those generated from the sale of
the International Division (Florimex), will be distributed to
creditors and that no proceeds will be available for
distribution to its shareholders.


USG CORP.: Trustee Appoints Asbestos Property Damage Committee
--------------------------------------------------------------
The U.S. Trustee appoints these four claimants to serve on an
Official Committee of Asbestos Property Damage Claimants in the
USG Corporation's chapter 11 cases:

            Anderson Memorial Hospital
            c/o Daniel A. Speights, Esq.
            Speights & Runyun
            P.O. Box 685
            200 Jackson Ave. E.
            Hampton, SC  29924
                 Ph: 803-943-4444
                 Fax: 803-943-4599

            Catholic Archdiocese of New Orleans
            c/o Martin W. Dies, Esq.
            1009 Green Avenue
            Orange, TX 77630
                 Ph: 409-883-4394
                 Fax: 409-883-4814

            Westcoast Estates
            c/o Thomas J. Brandi, Esq.
            44 Montgomery St., Suite 1050
            San Francisco, CA 94104
                 Ph: 415-989-1800
                 Fax: 415-989-1801

            Newberry College
            c/o Mitchell M Zais, President
            2100 College St.
            Newberry, SC. 29108
                 Ph: 803-321-5102
                 Fax: 803-321-5627

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)


W.R. GRACE: Proposes Omnibus Claim Settlement Protocol
------------------------------------------------------
Bringing each any every compromise and settlement of a
prepetition claim before the Court for approval pursuant to Rule
9019 of the Federal Rules of Bankruptcy Procedures will cost a
fortune, W. R. Grace & Co. tells Judge Farnan. To reduce the
administrative costs, the Debtors request authority to settle:

      (A) claims with a value under $100,000 without notice to
anyone and without any further action by the Court;

      (B) claims between $100,000 and $1,000,000 by giving notice
to core parties in interest and allowing them 20 days to
interpose any objection, with the Court intervening only is an
objection is raised; and

      (C) claims with a value greater than $1,000,000 by
following all of the requirements under Rule 9019, including a
Court hearing.

These procedures, James W. Kapp, Esq., at Kirkland & Ellis,
notes, are virtually identical to those approved in In re United
Artists Theatre Company, Case No. 00-3541 (SLR) (Bankr. D. Del.
2000); In re Trans World Airlines, Inc., Case No. 01-0056 (PJW)
(Bankr. D. Del. 2001); and In re Harnischfeger Industries, Inc.,
Case No. 99-2171 (PJW) (Bankr. D. Del. 1999), and in other
districts, e.g., In re R.H. Macy & Co., Inc., Case No. 92 B
40477 (Bankr. S.D.N.Y. 1992), and In re The Circle K
Corporation, Case No. 90-5052-PHX-GBN (Bankr. D. Az. 1990).

The Asbestos Committees object, arguing that the product of
$100,000 multiplied by who knows how many claims is not de
minimis.

In responsive pleadings the Debtors' lawyers give the impression
that their standing in their offices, shaking their heads, and
asking, one more time, "Is any topic too small to litigate?"

Mr. Kapp stresses that these procedures are designed to
streamline the administration of these cases and reduce cost.
(W.R. Grace Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


WARNACO GROUP: Committee Hires Arthur Andersen As Accountants
-------------------------------------------------------------
The Official Committee of Unsecured Creditors in The Warnaco
Group, Inc.'s chapter 11 cases seeks the Court's approval to
retain Arthur Andersen as their financial, accounting
and tax advisors effective June 19, 2001.

Denis M. Golden, Committee chairman, explains they chose
Andersen because of the firm's extensive experience in and
knowledge of business reorganizations under Chapter 11 of the
bankruptcy Code.

The Committee believes that Andersen does not represent any
adverse interest against them.

Among the proposed services that Andersen will render to the
Committee include, but not limited to:

       (a) the review of all financial information prepared by
the Debtors or their accountants or other financial advisors as
requested by the Committee including, but not limited to, a
review o Debtors' financial statements as the date of the filing
of the petitions, showing in detail all assets and liabilities
and priority and secured creditors.

       (b) monitoring of the Debtors' activities regarding cash
expenditures, loan draw downs and projected cash and inventory
requirements.

       (c) attendance at meetings of the Committee, the Debtors,
creditors, their attorneys and financial advisors, and federal,
state and local tax authorities, if required.

       (d) such assistance as requested by the Committee in these
cases with respect to, among other things:

           (i) any plan of reorganization suggested or proposed
               with respect to the Debtors;

          (ii) determination of whether Debtors' financial
               condition is such that a plan of reorganization is
               likely or feasible;

         (iii) review of Debtors' periodic operating and cash
               flow statements;

          (iv) review of Debtors' books and records for related
               party transactions, potential preferences and
               fraudulent conveyances;

           (v) preparation of a going concern sale and
               liquidation, value analysis of the estates'
               assets;

          (vi) any investigation that may be undertaken with
               respect to the pre-petition acts, conduct,
               property, liabilities and financial condition of
               the Debtors, including the operation of their
               businesses;

         (vii) review of any business plans prepared by the
               Debtors;

        (viii) review and analysis of proposed transactions for
               which the Debtors seek Court approval; and

          (ix) such other services as the Committee or its
               counsel and Andersen may mutually deem necessary.

To ensure there is no unnecessary duplication of services
performed or charged to the Debtors' estates, Arthur Andersen
plans to work closely with the Committee and any professional(s)
the Committee may retain in these cases

Subject to the Court's approval, Arthur Andersen will calculate
its fees for professional services based on its customary hourly
billing rates.  Their current rates range from:

       Partners/Principals     - $400 to $600
       Directors/Managers      -  350 to  525
       Senior Consultants      -  250 to  375
       Consultants/Assistants  - $125 to $250

Andersen also intends to apply to the Court for allowance of
compensation and reimbursement of expenses.

James M. Lukenda, a partner in the independent public accounting
firm of Arthur Andersen LLP, maintains that Andersen is a
"disinterested party".  Mr. Lukenda notes that Andersen has not
had any prior business association with The Warnaco Group, Inc.
members of the Official Unsecured Creditors' Committee of
Warnaco, any other creditors, equity security holders of the
Debtors or any other parties-in-interest in these Chapter 11
cases of the Debtors, or their respective attorneys identified
at the present.  However, Mr. Lukenda admits Andersen may have
audit, tax, consulting, or other professional relationships with
such entities or persons or Andersen may, from time to time,
perform professional services for such entities or persons
unrelated to the Debtors or their business affairs.  But Mr.
Lukenda assures Judge Bohanon that Andersen does not represent
any adverse interest against the Committee. (Warnaco Bankruptcy
News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


WASHINGTON GROUP: Critical Vendor Payments Irk Raytheon
-------------------------------------------------------
Raytheon Company and Raytheon Engineers & Constructors
International, Inc. are stunned at how Washington Group, Inc.,
has abused its authority to pay prepetition claims of its so-
called critical vendors, suppliers and subcontractors. Raytheon
urges the U.S. Bankruptcy Court for the District of Nevada to
convene a hearing as quickly as possible to stem the tide of
payments to non-critical vendors and save the estates millions
of dollars going forward.

Michael J. Reilly, Esq., at Bingham Dana LLP, tells the
Bankruptcy Court that Raytheon just can't believe how
Washington's spent $110 million of the $170 million allowed
under the Critical Vendor Order:

      * payments to Domino's Pizza, True Brew Coffee Service,
        Jiffy Lube, and 21 car wash bills, among many other
        "egregious items";

      * payments to insiders and affiliates, including Washington
        Group, MK Ferguson of Oak Ridge Co., and MK Ferguson
        Group;

      * "one off" payments to Toshiba International for $1.7
        million, Greenscape Landscaping for $1.3 million,
        Prospect Steel Company for $1.1 million; and

      * payments to commodity suppliers like Superior Ready Mix
        Concrete for $120,640.

Some of the vendor payments are small, but in the aggregate,
"this is a very serious problem," Raytheon says. The payments to
insiders and affiliates leave Raytheon speechless. The "one off"
payments provide no clear benefit to the Estates and its
creditors -- especially its creditors. "It strains credibility
to suggest that the Debtors could not obtain concrete in the
post-petition period without paying prepetition claims,"
Raytheon continues.

Raytheon asks the Court to reconsider and vacate its Critical
Vendor Order and enter an order enjoining Washington from making
further payments under the Critical Vendor Order. There's $60
million left in the critical vendor pot and Raytheon doesn't
want to see that money wasted.

Raytheon recalls hearing Washington's lawyers at Skadden, Arps,
Slate, Meagher & Flom LLP explain at the first day hearing that
payments under the Critical Vendor Order would flow to ". . .
vendors, suppliers and subcontractors that we believe are
absolutely necessary to be paid pre-petition amounts today and
for the next few weeks." Mr. Hanks testified that, in requesting
the $170 million, the Debtors were only requesting money to pay
those vendors "that are critical to the ongoing viability in
value of the enterprise of the business" and that the payments
would be "absolutely" necessary to ensure that the Debtors could
secure new work.


WINSTAR COMM.: Electronic Data Moves To Compel Contract Decision
----------------------------------------------------------------
Electronic Data Systems Corporation and Winstar Communications,
Inc. are parties to an Agreement for Professional Services dated
June 1996. Under the agreement, EDS provides technical staff in
support of the Debtors' Business Support Systems Group.

Bruce E. Jameson, Esq., at Prickett Jones & Elliott, in
Wilmington, Delaware, explains the EDS staff provides computer
programming skills, database design, maintenance and
administration. According to Mr. Jameson, the Debtors are unable
to provide these services with its current employees. Mr.
Jameson notes that the systems supported by EDS include a wide
variety of internal systems essential to the Debtors' operation
and necessary for the generation of bills to clients.

Since Petition Date, EDS continued to provide uninterrupted
service to the Debtors. In April, EDS performed $139,403.54
worth in services (prorated to the period of time the Debtors
was in Chapter 11). Last May, EDS performed $264,280 worth in
services. But the Debtors have not paid for these services, Mr.
Jameson notes. Nevertheless, EDS still continues to provide
services to the Debtors.

By motion, EDS asks the Court to enter an order setting a prompt
deadline by which the Debtors must assume or reject the
agreement. At the same time, EDS also demands that the Debtors
must be compelled to pay them for its post-petition services.

Usually, Mr. Jameson explains, the Debtors have until the
confirmation of their plan of reorganization to assume or reject
an executory contract. But this case is different, Mr. Jameson
says. The relief sought by EDS is justified, Mr. Jameson argues,
because EDS is not getting paid for its continuous and
uninterrupted service. Besides, Mr. Jameson adds, the Debtors
does not need additional time to make the decision because the
Debtors already told EDS it wants to reject the agreement. Mr.
Jameson also informs the Court that EDS has an outstanding pre-
petition claim of $2,000,000 under the agreement.
Since the Debtors will not cure that amount on a manpower
services contract, Mr. Jameson notes, there is really no reason
to delay the entry of an order compelling the Debtors' decision.
(Winstar Bankruptcy News, Issue No. 8; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

                            *********

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

                           *********

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

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

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

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