TCR_Public/010727.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

              Friday, July 27, 2001, Vol. 5, No. 146

                            Headlines

ACCRUE SOFTWARE: Asks Nasdaq Panel To Review Delisting Move
AMF BOWLING: Continuing All Workers' Compensation Programs
AMWEST INSURANCE: Case Summary & 14 Largest Unsecured Creditors
ARGOSY GAMING: S&P Rates Planned Credit Facility At BB
AUSTRIA FUND: Board Approves Plan Of Liquidation And Dissolution

BETHLEHEM STEEL: Keeps Fingers Crossed for New Financing In Q3
BOX USA: S&P Puts B Ratings On Watch With Negative Implications
BRIDGE INFORMATION: Employs Bianchi Carnice as Swiss Counsel
BRIDGE INFORMATION: Reuters Files Complaint Against SunGard
BROKAT AG: Fitch Lowers Senior Unsecured Rating To CCC From B

BROKAT AG: S&P Cuts Coroprate & Senior Debt Ratings to CC
CAROLINA PERMIER: Trustee Abandoning $1MM Benefit Plan Interest
CHURCH & DWIGHT: S&P Assigns BB Long-Term Ratings
CLEVELAND-CLIFFS: Publishes Second Quarter 2001 Results
COMDISCO INC.: Asks for More Time to File Schedules

COMMSCOPE: Ratings On Watch After Joint Venture Announcement
CONE MILLS: Discloses Second Quarter Results
CORECOMM: Falls Short Of Nasdaq's Minimum Bid Price Requirement
EISBERG FINANCE: Fitch Places BB Rating On Watch Negative
EXCALIBER HOLDING CORPORATION: 20 Largest Unsecured Creditors

FEDERAL-MOGUL: S&P Junks Ratings & Says Outlook Is Negative
HARNISCHFEGER: Resolves 19 Claims Against Beloit
GLOBALNETFINANCIAL.COM: Appeals Nasdaq's Delisting Determination
GORGES/QUIK-TO-FIX: Smithfield Foods Closes $34MM Asset Purchase
HEXCEL CORP.: S&P Affirms Low-B Ratings, Outlook Is Negative

IMPERIAL SUGAR: Florida Light Seeks Additional Assurance
INTEGRATED HEALTH: Settling Disputes With Southtrust
JORE CORPORATION: Montana Court Fixes Aug. 31 Claims Bar Date
KEYSTONE CONSOLIDATED: Plans To Defer Payments On Senior Notes
KITTY HAWK: Exclusive Period Extended To September 30

LAIDLAW INC.: Hiring Sitrick and Company as PR Consultants
LUCENT TECHNOLOGIES: S&P Places Ratings on Credit Watch Negative
MARINER POST-ACUTE: Moves to Reject Three Leases With Care Inns
MEDIA GENERAL: S&P Rates Corporate & Senior Debt At BB+
MICROLOG: Shares Knocked Off Nasdaq, Now Trades On OTCBB

ON SEMICONDUCTOR: Talking To Lenders About Debt Restructuring
OWENS CORNING: Employs PwC as Financial & Tax Advisor
PACIFIC GAS: Has Until October 5 to Assume and Reject Leases
PRYOR/ETRAIN: Case Summary & 20 Largest Unsecured Creditors
PSINET, INC.: Retains Staubach Company as Real Estate Brokers

STELLEX TECHNOLOGIES: Plan Confirmation Hearing Set For Aug. 21
UNITED SHIPPING: Receives Nasdaq's Delisting Notice
USG: Court Grants Motion For Postpetition Vendor Comfort Order
USG CORPORATION: Posts $13 Million Net Loss in Second Quarter
VIASOURCE COMMUNICATIONS: Shares Subject To Nasdaq Delisting

VIASYSTEMS INC.: S&P Puts Low-B Ratings On CreditWatch Negative
WESTERN DIGITAL: Reports Q4 & Fiscal Year-End Losses
W.R. GRACE: Engages Kinsella Communications as Noticing Advisor
W.R. GRACE: Releases Second Quarter Operating Results
WARNACO GROUP: Proposes De Minimis Asset Sale Procedures

WARWICK BAKER: Madison Ave. Creative Pioneer Closing Doors
WINSTAR COMM.: Court Approves Asset Sale To Sayers Group
XEROX CORPORATION: Board Decides To Defer Dividend Payments
XEROX CORPORATION: Posts Second Quarter Loss

BOOK REVIEW: Creating Value Through Corporate Restructuring:
              Case Studies in Bankruptcies, Buyouts, and Breakups

                            *********

ACCRUE SOFTWARE: Asks Nasdaq Panel To Review Delisting Move
-----------------------------------------------------------
Accrue Software, Inc. (Nasdaq:ACRU), a leading provider of
enterprise-level Internet analytic solutions, announced that on
July 19, 2001 it received a letter from the Nasdaq staff stating
that the Company has failed to comply with the $1.00 minimum bid
price required for continued listing of its common stock on the
Nasdaq National Market, as required by Nasdaq Marketplace Rule
4450(a), and as a result the common stock is subject to
delisting. The Company has requested a hearing before a Nasdaq
Listing Qualifications Panel to review the staff determination.
Although there can be no assurance that the Panel will grant the
Company's request for continued listing, the hearing request
will stay the delisting of the Company's stock pending the
Panel's decision.

"Our first priority is continuing to improve business
performance to gain investor confidence. While this is the focus
of management, we also intend to present a compelling case for
continued listing. Finally, we want to have the option to
execute a reverse split if appropriate and in the best
interest of the Accrue Shareholders." said Jeffrey Walker,
Accrue's new president and CEO.

The Company's Board of Directors will submit to a vote of the
stockholders at the Annual Meeting of Stockholders scheduled for
September 21, 2001 six separate proposals to effect one or more
reverse stock splits of the Company's common stock, ranging from
a one-for-three reverse stock split to a one-for-thirty reverse
stock split, as may be appropriate to maintain the listing of
the company's common stock on the Nasdaq National Market
following the Annual Meeting of Stockholders or, if necessary,
to qualify the common stock for listing on the Nasdaq SmallCap
Market.

As of July 12, 2001, there were 30,652,884 shares of common
stock outstanding. Approval of each reverse stock split proposal
will require the approval of holders of a majority of the total
shares of stock outstanding as of the record date for the annual
meeting.

                    About Accrue Software

Accrue Software is a leading provider of enterprise-level e-
business analysis solutions that help companies understand,
predict, and respond to online customer behavior. Accrue's
solutions enable highly targeted campaigns to improve the
profitability of customer interactions across multiple touch
points. Accrue has over 600 customers, including industry
leaders such as FedEx, Gateway, Dow Jones, Eastman Kodak
Company, MTV, Macy's, and Deutsche Telekom.

Accrue Software was founded in 1996 and has its headquarters in
Fremont, Calif., with regional sales offices throughout the U.S.
International headquarters are in Cologne, Germany and
Singapore. Accrue has strategic partnerships with leading e-
business vendors, including Art Technology Group, BEA,
BroadVision, DoubleClick, IBM, Oracle, Sun Microsystems and
Vignette. Accrue Software can be reached at 1-888/4ACCRUE or
510/580-4500 and at http://www.accrue.com.


AMF BOWLING: Continuing All Workers' Compensation Programs
----------------------------------------------------------
AMF Bowling Worldwide, Inc. has a number of programs and
policies in place that provide their employees with the workers'
compensation benefits required by applicable state laws in the
United States and foreign laws that govern the Debtors' foreign
operations. Maintenance of the Workers' Compensation Programs is
important to the continued operation of the Debtors.

In all states in which the Debtors operate in the United States,
Insurance Company of the State of Pennsylvania, an affiliate of
American International Group, Inc., is the Debtors' insurer
under certain deductible and retrospectively rated workers'
compensation insurance policies. In New York State and
Wisconsin, Illinois National Insurance Company, an affiliate of
AIG, is the Debtors' workers' compensation insurer. In
California, American Home Assurance Company provides the
Debtors' workers' compensation coverage.

Under the terms of the Domestic Workers' Compensation Policies,
Gallagher Bassett, the third party administrator, processes and
pays valid claims submitted by the Debtors' employees. Under the
terms of the Domestic Workers' Compensation Policies, AIG pays
valid claims submitted by the Debtors' employees up to statutory
requirements on Worker's Compensation and a maximum of
$1,000,000 per claim for employers' liability.

Under the Domestic Workers' Compensation Policies, the Debtors
are responsible to reimburse AIG for amounts paid to claimants
up to $250,000 per claim and up to $3,250,000 in annual
aggregate claims, and the Debtors' payment obligations extend
beyond expiration of the policy year until all claims incurred
during the policy year have been settled.

The Debtors have pre-paid the premiums through May 1, 2002, but
these premiums are auditable through six months after the
expiration of the Domestic Workers' Compensation Policies and
may be adjusted upward. To back their deductible obligations
under certain of the Workers' Compensation Programs, the Debtors
have posted $2,800,000 in a cash deposit account held by AIG as
collateral security. The Debtors may replace this cash deposit
with a $2,500,000 letter of credit as collateral security when
their debtor-in-possession credit facility is in place. The
workers' compensation policies provide that if the Debtors fail
to make a timely deductible payment, the carriers have the right
to draw upon the cash deposit account or the replacement letter
of credit for reimbursement and cancel the insurance coverage
they underwrite for the Debtors.

Further, in accordance with the laws of the states of Nevada,
North Dakota, Ohio, Washington, West Virginia and Wyoming, the
Debtors' workers' compensation benefits are administered through
the worker's compensation insurance funds of each such state. On
a periodic basis, each state assesses the Debtors an amount to
be paid to that state's Insurance Funds to satisfy its workers'
compensation requirements. Satisfaction of the Debtors' workers'
compensation obligations to any state's Insurance Funds is
mandatory for the Debtors' continued operation in that state.

Bowling Products also has employees abroad in countries that
require worker's compensation programs. In these countries, in
accordance with applicable legal requirements, the Debtors
maintain Workers' Compensation Programs and policies that are
substantially similar to the Domestic Workers' Compensation
Policies. In certain cases, the Foreign Workers' Compensation
Programs provide pure insurance, and, in others, the Debtors
have deductible obligations that regularly exceed total claim
amounts. Because the Debtors' foreign operations have
substantially fewer employees than their domestic operations,
the Debtors' premium and claim payment obligations in connection
with the Foreign Workers' Compensation Programs are
significantly less than their obligations under the Domestic
Workers' Compensation Policies.

The Debtors estimate that, as of the Petition Date,
approximately $640,000 in the aggregate will be due and owing to
the Debtors' workers' compensation carriers and the Insurance
Funds with respect to employee worker's compensation claims
which were asserted by the Debtors' employees and paid by the
carrier or an Insurance Fund prior to the Petition Date. In
addition, the Debtors anticipate that additional payments will
become due and owing under the Workers' Compensation Program
with respect to prepetition worker's compensation claims paid by
the carriers after the Petition Date.

By this Motion, the Debtors sought and obtained authority from
Judge Tice to honor those obligations and take all actions to
keep all existing Workers' Compensation Programs in place.
(AMF Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


AMWEST INSURANCE: Case Summary & 14 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Amwest Insurance Group, Inc.
         5230 Las Virgenes Road
         Calabasas, California 91302
         c/o Malhotra, Malhotra & Velasco
         900 Wilshire, Blvd., Ste 1112
         Los Angeles, CA 90017

Type of Business: A holding company, which, until recently,
                   engaged through its subsidiaries in
                   underwriting surety bonds nationwide

Chapter 11 Petition Date: July 24, 2001

Court: Central District Of California (San Fernando Valley
        Division)

Bankruptcy Case No.: 01-17081

Judge: The Honorable Geraldine Mund

Debtor's Counsel: Jose A. Velasco, Esq.
                   Malhotra, Malhotra & Velasco
                   900 Wilshire, Blvd., Ste 1112
                   Los Angeles, CA 90017
                   213-629-9222

Total Assets: $8,388,914

Total Debts: $18,041,915

List Of Debtor's 14 Largest Unsecured Creditors:

Entity                        Nature Of Claim     Claim Amount
------                        ---------------     ------------
Union Bank Of California, NA   Bank Loan          $12,873,259
445 S Figueroa St
4th Floor
Los Angeles, CA 90017
Contact: Allison W. Berry
(213)236-7751

Colorado Capital               Rent Due               Unknown
Calabasas, LLC

Amwest Surety Insurance Co.    Tax Refund             Unknown

Far West Surety Insurance Co.  Tax Refund             Unknown

L. Tim Wagner                  Estate Liquidation     Unknown

Western General Insurance Co.  Sublease Of Premises   Unknown

Colliers Ceely International   Real Estate Comm       Unknown
Inc.

Los Angeles County             Property Tax Bill      $15,377

Sioban K. Horton, CPA          Consulting Services     $9,250

Computer Sales, International  Computer Equipment      $5,909

American Express Corporate     Corp. Credit Card       $4,266
Services

American Stock Transfer        Stock Transfer Agent    $2,100
& Trust

RR Donnelly Receivables, Inc.  Financial Printer       $1,650

Sprint Conferencing Services   Telephone Service       $1,288


ARGOSY GAMING: S&P Rates Planned Credit Facility At BB
------------------------------------------------------
Standard & Poor's assigned its double-'B' rating to Argosy
Gaming Co.'s planned $675 million senior secured credit
facility. In addition, a single-'B'-plus rating was assigned to
Argosy's proposed $200 million senior subordinated notes due
2011. Proceeds from the bank facility and new notes will be used
to refinance existing debt, to help fund the recently approved
purchase of the Empress Joliet riverboat from Horseshoe Gaming
Holding Corp. (BB/Stable/--), and for general corporate
purposes. At the same time, Standard & Poor's affirmed its
existing ratings on the company (see list below). The outlook is
stable.

Ratings reflect Argosy Gaming's improved business profile as a
result of the Empress Joliet acquisition, continued solid
results from the company's other casino properties, and
expectations that the company's overall financial profile will
improve in the near term. These factors are partially offset by
the increased debt in the capital structure, the company's
somewhat aggressive growth strategy, and expected higher capital
spending levels. Although pro forma debt leverage will be near
the high end for the rating, Argosy was previously quite
underleveraged, which was viewed as a temporary situation.
However, the company has invested in strong, reasonably priced
assets, such as the Empress Joliet facility and the minority
interests in its Lawrenceburg, Ind., riverboat, and leverage is
expected to decline moderately over the next few years.

The $465 million cash acquisition of the Empress Joliet
riverboat facility gives Argosy entry into the growing Chicago
market with a stable performing asset. The property generated
more than $70 million in EBITDA during 2000, due to increased
gaming volumes and higher-than-normal slot and table games
hold percentages. This positive momentum has continued into 2001
with first quarter cash flow increasing about 12% over the
prior-year period.

Alton, Ill.-based Argosy's other riverboats in Alton; Riverside,
Mo.; Baton Rouge, La.; Sioux City, Iowa; and Lawrenceburg, Ind.,
have been solid performers. The Lawrenceburg facility is a
strong cash flow generator and is the best performing riverboat
in the country. During 2000, the property generated more than
$130 million in EBITDA, despite an increasingly competitive
market. The opening of Pinnacle Entertainment Inc. 's
(BB+/Negative/--) riverboat in late 2000 has thus far had a
minimal impact on operating results, as cash flow for the six
months ended June 30, 2001, decreased by less than 5%. Still,
the property is likely to be a formidable competitor for Argosy
and could cause some dilution in the intermediate term. However,
Argosy's entrenched competitive position should mitigate
downside risk.

The Alton and Riverside riverboats have performed very well over
the past few years due to reduced costs, enhanced marketing
efforts, positive regulatory decisions, and steady market
growth. The approximately 30% increase in EBITDA at these
properties during 2000 continued during the first six months of
2001, with EBITDA increasing more than 11% from the prior-year
period.

The Baton Rouge property performed very well during 2000
increasing cash flow to $16 million, from $6 million during
1999. This property has also benefited from positive regulatory
changes, as well as the elimination of the passenger tax. The
recently opened hotel and the commencement of dockside gaming in
Louisiana should enhance the property's longer-term competitive
position.

Pro forma for the Joliet purchase and based on current operating
trends, consolidated EBITDA is expected to exceed $270 million.
Pro forma EBITDA coverage of interest expense is expected to be
in the high 2 times (x) area, and total debt to EBITDA
approximately 4x. Pro forma flexibility is expected to be
adequate, with more than $40 million in cash on hand and about
$150 million available on the revolver. In addition, with
moderate maintenance capital expenditures, Argosy should
continue to generate significant free cash flow, which Standard
& Poor's expects will be used to fund the potential Joliet
expansion, pursue additional growth opportunities, and reduce
debt levels.

Argosy's credit facility, which is rated the same as the
company's corporate credit rating, will consist of a $400
million reducing revolving credit facility due 2006 and a $275
million term loan due 2008. The facilities will be secured by a
first-priority perfected interest in all material current and
future assets of the company. Because these facilities are
secured, lenders can expect to recover more than a typical
unsecured creditor in the event of a default or bankruptcy. In
addition, expected financial covenants would provide further
protection. However, based on Standard & Poor's simulated
default scenario, it is not clear that a distressed enterprise
value would be sufficient to cover the entire loan facility.

                      Outlook: Stable

The outlook reflects the expectation that Argosy will maintain
its market positions and improve and maintain its solid credit
measures. In addition, while Standard & Poor's anticipates the
company will continue to pursue growth opportunities, it would
expect any transaction to be financed in a manner consistent
with the rating.

                      Ratings Affirmed

      Argosy Gaming Co.
           Corporate credit rating        BB
           Senior secured bank facility   BB
           Subordinated debt              B+


AUSTRIA FUND: Board Approves Plan Of Liquidation And Dissolution
----------------------------------------------------------------
The Austria Fund, Inc. (NYSE: OST) announced that the Fund's
Board of Directors has unanimously approved the liquidation and
dissolution of the Fund, subject to stockholder approval. It is
anticipated that the Plan of Liquidation and Dissolution
approved by the Board will be submitted to stockholders at a
special meeting to be held for that purpose in October 2001. If
then approved by the Fund's stockholders, liquidation would
occur during the several ensuing months.

Dave H. Williams, Chairman and President of the Fund, commented
that: "As European economic integration proceeds, it will become
increasingly difficult for The Austria Fund to deliver
diversified, distinctively Austrian, equity exposure to its
stockholders. It is accordingly appropriate at this time, in the
judgment of the Fund's Board of Directors, to liquidate the
Fund".

The Fund is a closed-end, U.S.-registered management investment
company advised by Alliance Capital Management L.P. with assets
of approximately $47.7 million.


BETHLEHEM STEEL: Keeps Fingers Crossed for New Financing In Q3
--------------------------------------------------------------
Bethlehem Steel Corporation (NYSE: BS) reported that its loss
from operations of $96 million for the second quarter of 2001
improved $25 million from the first quarter of this year
primarily due to lower costs.

Bethlehem's net loss for the second quarter of 2001 was $120
million, or $1.00 per diluted common share excluding two unusual
non-cash charges. The unusual non-cash charges for the second
quarter of 2001 include fully reserving Bethlehem's $1,009
million deferred tax asset and $3 million equity investment in
Metal Site, an Internet marketplace for steel that ceased
operations in June. During the second quarter, it was determined
that the cumulative financial accounting losses had reached the
point that fully reserving the deferred tax asset was required
(see Note 5 to the accompanying Notes to June 30, 2001 Financial
Statements). Including these unusual charges, Bethlehem's second
quarter net loss was $1,132 million, or $8.80 per diluted common
share.

Bethlehem's net income for the second quarter of 2000 was $10
million, or a loss, after preferred dividends, of $.01 per
diluted common share excluding two unusual gains. The unusual
gains included in the second quarter of 2000 related to the
conversion of Metropolitan Life Insurance Company from a
mutual company owned by its policy owners to a publicly held
company and from the sale of Bethlehem's interest in Presque
Isle Corporation. Including these unusual gains, net income for
the second quarter of 2000 was $32 million or $.16 per diluted
common share.

Sales for the second quarter of 2001 declined about $180 million
from the second quarter of 2000 from about $1.1 billion to about
$0.9 billion. Shipments for the second quarter of 2001 declined
by about 100,000 tons from the second quarter of 2000 from 2.2
million tons to 2.1 million tons.

Excluding unusual items, Bethlehem's net loss for the first six
months of 2001 was $263 million ($2.18 per diluted common share)
compared with income of $12 million (a loss of $.06 per diluted
common share, after preferred dividends) for the first six
months of 2000. Including the unusual items Bethlehem's net loss
for the first six months of 2001 was $1,250 million ($9.79 per
diluted common share) compared with income of $35 million ($.11
per diluted common share) for the same period in 2000. Sales for
the first half of 2001 declined by about $0.4 billion from $2.2
billion to about $1.8 billion. Shipments in the first half of
2001 declined by about 500,000 tons from 4.6 million tons to 4.1
million tons.

                       Operating Results

For the second quarter of 2001, our loss from operations was $96
million, excluding the write-off of our equity investment in
MetalSite. This compares with income from operations for the
second quarter of 2000 of $25 million, excluding $27 million of
unusual gains for the items previously mentioned. Second quarter
2001 operating results decreased from a year ago mainly as a
result of significantly lower realized prices, lower shipments,
and a less favorable product mix. Prices, on a constant mix
basis, were down by about 9%. Shipments were lower by 100,000
tons and our product mix was less favorable due to a higher
percentage of hot-rolled and non-prime product shipments and a
lower percentage of cold-rolled, coated, plate, and rail
shipments.

For the first six months of 2001, our loss from operations was
$216 million excluding the unusual items in the second quarter
of 2001 previously mentioned. This compares to income from
operations of $44 million for the first six months of 2000. The
$260 million reduction in our results compared with the same
period last year was primarily due to lower realized prices,
lower shipments, a less favorable product mix, and higher costs.
Prices, on a constant mix basis, declined by about 8%, shipments
were lower by about 500,000 tons, and our product mix was less
favorable due to a higher percentage of hot-rolled and non-prime
shipments and a lower percentage of cold-rolled, coated, plate,
and rail shipments. Costs per ton were higher principally from
higher pension and energy costs, and the effects of lower
operating rates.

For the second quarter of 2001, our loss from operations of $96
million, excluding the write-off of our equity investment in
MetalSite, improved $25 million from the first quarter of 2001.
This improvement is primarily due to additional cost reductions
from higher operating rates, lower energy costs, and lower
spending.

                 Liquidity and Cash Flow

At June 30, 2001, our liquidity, comprising cash, cash
equivalents, and funds available under our bank credit
arrangements, totaled $118 million compared with $135 million at
March 31, 2001 and $315 million at December 31, 2000.

For the first six months of 2001, $28 million of cash was used
by operating activities compared with $229 million of cash
provided from operating activities for the first six months of
2000. This change of $257 million was primarily due to higher
operating losses partially offset by higher non-cash pension and
retiree healthcare expenses. Other major uses of cash during the
first half of 2001 included debt payments of $48 million,
capital expenditures of $37 million and preferred dividends of
$20 million. Major uses of cash for year 2001 are expected to
include capital expenditures of about $90 million, debt payments
of $55 million, and preferred dividend payments.

Major sources of cash during the first half of 2001 included
$120 million of borrowings under our inventory credit agreement
and the use of $28 million that was available in our social
insurance trust fund to pay retiree healthcare benefits. Major
sources of cash for year 2001 are expected to include
significant proceeds from assets sales, pension and retiree
healthcare expenses that will continue to be in excess of
required company pension funding and healthcare payments, and
further reductions in inventory.

As previously reported, lenders under our secured inventory
credit agreement and three other secured financing arrangements
have waived through January 30, 2002 compliance with the minimum
adjusted consolidated tangible net worth covenant contained in
those agreements. The debt associated with these arrangements
has been reclassified on our balance sheet from a long-term
liability to a current liability because the waivers expire
within one year. Also, as previously reported, lenders to our
Columbus Coatings Company and Chicago Cold Rolling joint
ventures have agreed, subject to certain conditions, to
standstill agreements to their rights against Bethlehem as a
guarantor of the loans to those joint ventures through January
30, 2002. Additionally, during the second quarter, we received
consent from the holders of our 10-3/8% Senior Notes to allow
us to increase the amounts we may borrow under our existing or
future credit agreements from $500 million to $740 million.

Our future liquidity will remain dependent upon sources of
financing, completion of asset sales, business conditions, and
operating performance. We expect liquidity in the near term to
be lower than at the end of June, and thereafter, to improve for
the remainder of the year. With respect to our efforts to
replace our existing credit facilities with new financing
arrangements, we have obtained a commitment from GE Capital to
provide $550 million of a proposed $750 million of Senior
Secured financing to Bethlehem. We have begun discussions with
certain other lenders to obtain additional commitments. This
financing is expected to be completed during the third quarter
of 2001 and will be an important part of enhancing our liquidity
and financial flexibility.

               Restructuring of Lackawanna Coke

Bethlehem's Board of Directors approved plans for the closing of
its coke making facilities in Lackawanna, New York. Notice of
the intended shutdown was issued to the United Steelworkers of
America. Approximately 340 employees work at this facility.
Operations are expected to cease by the end of the third quarter
of 2001. As a result, Bethlehem will record a $40
million charge in the third quarter of 2001 for incremental
employee benefits as most employees will be eligible for early
retirement and all employees receive certain benefits related to
the closure. There is no charge for plant and equipment because
the assets had been previously written off. Also, closure should
generate about $15 million of cash in the second half of 2001 as
working capital is liquidated.

                           Outlook

The U.S. economy has slowed considerably during the past three
quarters, but we believe that the economy and steel consumption
will begin to strengthen during the second half of the year.

We continue to be concerned about the high level of excess world
steel capacity and the threat it poses for future levels of
unfairly traded steel imports. In this regard, we are encouraged
by the decision of the Bush Administration to request the
International Trade Commission to initiate an investigation
under Section 201 of the Trade Act of 1974 concerning the
injury caused by steel imports to the U.S. steel industry. We
also welcome the announcement by the Administration to initiate
negotiations with trading partners to eliminate inefficient
excess capacity in the steel industry worldwide and to eliminate
underlying market-distorting subsidies.

Currently, steel market conditions remain weak reflecting slow
economic growth, continuing reductions in customer inventories,
and the typical slower summer months when many manufactures have
outages related to model year changeovers and vacation
shutdowns. Our order entry has seen some slight strengthening in
hot-rolled, coated for automotive, and selected areas of the
plate market while order entry in our other product areas
remains weak. Steel prices remain depressed but we believe
prices overall should begin a modest recovery later this year.

                          Dividends

No dividends were declared on Bethlehem's Common Stock or its
three issues of Cumulative Convertible Preferred Stock.


BOX USA: S&P Puts B Ratings On Watch With Negative Implications
---------------------------------------------------------------
Standard & Poor's placed its ratings on Box USA Holdings Inc. on
CreditWatch with negative implications. These are:

     * Corporate credit rating B
     * Senior secured debt B

The rating action was prompted by weak paper and packaging
industry fundamentals. Soft sales volumes and elevated energy
costs have weakened Box USA's performance, causing the company
to obtain bank covenant relief. In addition, contrary to
expectations of gradual debt reduction, debt levels have risen
slightly in order to fund capital expenditures and modest-size
acquisitions. Standard & Poor's believes that box demand could
remain in a slump for some time in conjunction with low domestic
economic growth and the strong U.S. dollar's depressing effect
on exports of both containerboard and goods shipped in boxes.

The ratings on Box USA Holdings Inc. reflect its below-average
business profile in the containerboard converting business,
little product diversity, and an aggressive financial risk
profile with high debt levels and weak credit protection
measures.

Standard & Poor's will review the ratings after meeting with
company executives to discuss their operating and financial
plans.


BRIDGE INFORMATION: Employs Bianchi Carnice as Swiss Counsel
------------------------------------------------------------
Bridge Information Systems, Inc. sought and obtained an order
authorizing them to retain and employ the Swiss firm of Bianchi,
Carnice, Christin & de Coulon, nunc pro tunc to May 15, 2001, as
special counsel.

The Debtors' subsidiaries, Bridge Information Systems AG and TSZ
Telerate Switzerland AG, are Swiss corporations. The Debtors
retained the Bianchi firm to act as legal advisers in connection
with the possible sales of assets of the subsidiaries. The
Debtors want Bianchi to advise them on legal matters that may
arise in connection with the asset sales, including, inter alia:

     (a) the legal implications to the subsidiaries of the United
         States bankruptcy proceedings and the asset sales;

     (b) the obligations of the subsidiaries with respect to
         Swiss bankruptcy law and liabilities of officers and
         directors of the subsidiaries;

     (c) the asset sales and any transfers of liabilities and/or
         employees of the subsidiaries to a prospective offeror,
         pursuant to standing order #5 of this court, if any; and

     (d) any other legal advice needed with respect to matters
         relating those previously stated.

The Debtors propose that the firm be compensated in Swiss francs
for their services.

Manuel Bianchi della Porta, a partner of the law firm, assures
Judge McDonald that the firm does not have any financial
connection with the Debtors, their estates, or any of its other
attorneys and accountants. Neither does the firm hold or
represent any interest adverse to the estates or the Debtors in
matters upon which the firm is to be engaged.

Mr. Bianchi relates that their firm performed an internal search
for relationships to the Debtors and their creditors. According
to Mr. Bianchi, the firm does not and will not represent any of
these persons or entities or their affiliated with respect to
these chapter 11 proceeding. Mr. Bianchi also assures Judge
McDonald that the firm's other representations do not conflict
with the interests of the Debtors, the estates, or the firm's
representations of the Debtors herein. If additional
relationships are discovered, Mr. Bianchi promises to file a
supplemental affidavit before the Court.

For Manuel Bianchi della Porta's services, the firm will charge
FRS 450 per hour. Mr. Bianchi said the firm also plans seek
reimbursement for all reasonable out-of-pocket expenses incurred
in connection with this representation. Mr. Bianchi says the
firm has incurred fees of FRS 4,576.50 (US$2,565.59 -- converted
on May 30, 2001) for acting as special counsel to the Debtors.
(Bridge Bankruptcy News, Issue No. 11; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


BRIDGE INFORMATION: Reuters Files Complaint Against SunGard
-----------------------------------------------------------
Reuters, the global information, news and technology group,
filed a complaint with the United States Bankruptcy Court for
the Eastern District of Missouri in St. Louis against SunGard
Data Systems, Inc. and SunGard Trading Systems.

The complaint alleges SunGard engaged in an unlawful campaign to
deliberately interfere with Reuters court approved agreement to
purchase certain assets of Bridge Information Systems, Inc. and
certain of its affiliates, including Bridge Trading Company, by
misusing confidential information and poaching employees.

Among other things, Reuters has asked for an order prohibiting
SunGard from further soliciting, inducing and/or encouraging
Bridge employees to terminate their employment, as well as money
damages.

                      About Reuters

Reuters (WWW.ABOUT.REUTERS.com) premier position as a global
information, news and technology group is founded on its
reputation for speed, accuracy, integrity and impartiality
combined with continuous technological innovation. Reuters
strength is based on its unique ability to offer customers
around the world a combination of content, technology and
connectivity. Reuters makes extensive use of internet
technologies for the widest distribution of information and
news. Around 73 million unique visitors per month access Reuters
content on some 1,400 Internet websites. Reuters is the world's
largest international text and television news agency with 2,500
journalists, photographers and camera operators in 190 bureaux,
serving 160 countries. In 2000 the Group had revenues of
(pound)3.59 billion and on 31 December 2000, the Group employed
18,082 staff in 204 cities in 100 countries. Reuters celebrates
its 150th anniversary this year.


BROKAT AG: Fitch Lowers Senior Unsecured Rating To CCC From B
-------------------------------------------------------------
Fitch, the international rating agency, downgraded the Senior
Unsecured rating of Brokat AG (formerly Brokat Infosystems AG)
and its EUR125 million Senior Unsecured notes due 2010 to 'CCC'
from 'B-' (B minus). At the same time, the agency affirmed the
Rating Watch Negative status.

Fitch took this rating action as a consequence of the
uncertainty created by the announcement that Brokat has
appointed Dresdner Kleinwort Wasserstein Inc as its financial
adviser to examine strategic options for a restructuring of the
notes. The company is proposing to enter into detailed
negotiations and discussions with the noteholders aimed at
achieving this restructuring. The agency believes that the
implications of this announcement are likely to be negative for
noteholders and will be seeking to discuss with the company's
management and its advisers the proposed direction of the
negotiations as soon as possible.

This action follows the agency's decision to downgrade the notes
from 'B' to 'B-' (B minus) on 8 June 2001, which reflected
Fitch's concerns over the effects of a worsening trading
environment on the company's performance during the previous
several months, and the consequent impact on Brokat's
liquidity position.


BROKAT AG: S&P Cuts Coroprate & Senior Debt Ratings to CC
---------------------------------------------------------
Following news of a debt restructuring, Standard & Poor's
lowered its long-term corporate credit and senior unsecured debt
ratings on Germany-based electronic brokerage and banking
software provider Brokat AG to double-'C' from single-'B'-minus.
The ratings remain on CreditWatch with negative implications,
where they were placed on June 14, 2001.

The rating action follows the announcement by Brokat that it is
seeking to restructure its senior unsecured debt obligation of
EUR125 million. Brokat has appointed the investment bank
Dresdner Kleinwort Wasserstein Inc. as its financial adviser to
examine strategic options to restructure the notes.

Standard & Poor's will continue to monitor the situation and
will take appropriate action as soon as detailed information on
the new capital structure becomes available.


CAROLINA PERMIER: Trustee Abandoning $1MM Benefit Plan Interest
---------------------------------------------------------------
Sara A. Conti, Chapter 7 Trustee overseeing the liquidation of
Carolina  Premier Medical Group, P.A., Bankr. Case No. 00-82322-
7D (Bankr. M.D. N.C.) seeks entry of an order pursuant to 11
U.S.C. Sec. 554 and Rule 6007 of the  Federal Rules of
Bankruptcy Procedure, to abandon a potential $1,000,000
reversionary interest in the overfunding of a defined benefit
plan.

The defined benefit plan, which has generated significant
overfunding, Ms. Conti explains, is sponsored by Kaiser
Permanente, and pursuant to a  contract between Kaiser and the
Debtor, Kaiser is entitled to possession of the reversionary
interest in the overfunding. In order to establish a claim
to the overfunding, the Debtor would have to be determined to be
a successor employer, which Ms. Conti thinks is unlikely. The
costs of the litigation necessary to determine the Debtor's
status with respect to the plan, Ms. Conti says, are likely to
be extremely high and to expend considerable funds from the
estate. Ms. Conti notes that if the Debtor were to succeed in an
argument that it is a successor employer and entitled to the
reversion, it would assume responsibility for termination of the
plan and for payment of excise taxes in the amount of 50% of the
amount of the overpayment.

Ms. Conti concludes that the reversionary interest is of
inconsequential value and burdensome to Carolina's estate
because the costs associated with the litigation of the Debtor's
right to the overfunding, the termination of the plan and the
payment of taxes would offset the value of the asset to the
estate.

Carolina filed a chapter 11 petition on September 8, 2000. The
case was subsequently converted to a liquidation proceeding
under Chapter 7 on March 7, 2001. Sara A. Conti serves as the
Chapter 7 Trustee. She can be reached at (919) 306-1713. The
Trustee's motion is set for a hearing before the U.S. Bankruptcy
Court in Durham, North Carolina, on August 9, 2001, at 9:30
a.m.


CHURCH & DWIGHT: S&P Assigns BB Long-Term Ratings
-------------------------------------------------
Standard & Poor's assigned Church & Dwight Co. Inc. its double-
'B' long-term corporate credit and bank loan ratings for the
firm's proposed $510 million credit facility. The bank loan
rating is based on preliminary terms and conditions and is
subject to review once full documentation is received.

The outlook is stable.

Approximately $410 million in total debt was outstanding on
March 31, 2001, on a pro forma basis inclusive of acquisitions
and investments completed in 2001.

The assignment of the corporate credit rating follows Standard &
Poor's analysis of Church & Dwight, and its proposed acquisition
of the consumer products business of Carter-Wallace Inc. for
about $740 million in partnership with the private equity group,
Kelso & Co. Church & Dwight will make a $112 million equity
investment in ArmKel LLC, a 50/50 joint venture between Church &
Dwight and Kelso. Under the proposed transaction, ArmKel will
acquire Carter-Wallace's consumer products business (brands
include Trojan and Nair) and will immediately spin off Carter-
Wallace's U.S. antiperspirant business (Arrid and Lady's Choice)
and pet care business (Lambert Kay) to Church & Dwight for about
$128 million. The transaction, which will be debt financed, is
expected to close in the third quarter of 2001.

While Church & Dwight will manage the day-to-day operations of
ArmKel, the debt at the joint venture will be nonrecourse to
Church & Dwight. In addition, Church & Dwight has an option to
acquire the remaining 50% of the joint venture in years four and
five after the closing date.

Church & Dwight's business position has been largely built on
the strength of the Arm & Hammer brand name. The company has
successfully broadened the consumer base for Arm & Hammer into
several household and personal care product lines, such as
detergents, toothpaste, cat litter, and deodorant.

In an effort to continue growing the business and reduce
reliance on the Arm & Hammer brand name, Church & Dwight has
recently pursued an acquisition strategy, including the May 2001
acquisition of USA Detergents Inc. (Xtra and Nice 'N Fluffy).
The proposed acquisition of certain Carter-Wallace brands, as
well as the investment in the ArmKel joint venture, will further
diversify the company's portfolio. Church & Dwight is expected
to realize cost savings from manufacturing efficiencies, shared
distribution channels, and the elimination of certain overhead
expenses. Offsetting these factors is the company's high debt
leverage upon completion of the transaction, its small size in
relation to competitors, and relatively low operating margins
for a consumer products company. In addition, there is a degree
of integration risk associated with the recent and proposed
acquisitions and ArmKel investment, given the size of USA
Detergents and Carter-Wallace's businesses in relation to Church
& Dwight. Furthermore, Church & Dwight does not have previous
experience with sizable acquisitions or investments.

Financially, the recent and proposed acquisitions will increase
the company's revenues by about 50% in 2001, on a pro forma
basis, providing critical mass to the business and the
opportunity for synergistic benefits. However, the company's pro
forma operating margin (before depreciation and amortization) is
expected to decline moderately to under 12%in 2001 from 13.2% in
2000, due to lower margins generated by the acquired businesses.

Standard & Poor's expects that fiscal 2001 credit protection
measures (adjusted for operating leases) will be in line with
the rating on a pro forma basis. EBITDA interest coverage should
be about 5.0 times (x), with leverage (debt to EBITDA) about
3.0x. The company may be challenged to maintain credit ratios
over the intermediate term, given intense competition within the
household and personal care industries, along with the
consolidating retail environment. The rating does not
incorporate flexibility for additional significant debt-financed
acquisitions or share repurchases.

The proposed bank facility, which consists of a $100 million
revolver due 2006, a $125 million term loan due 2006, and a $285
million term loan due 2007, is rated the same as the corporate
credit rating. The facility will be secured by substantially all
of Church & Dwight's assets, which provide a strong measure of
protection to lenders. However, based on Standard & Poor's
simulated default scenario, which severely stressed the
company's cash flows, it is not clear that the distressed
enterprise value would be sufficient to cover a fully drawn loan
facility.

Outlook: Stable

The outlook reflects Standard & Poor's expectation that Church &
Dwight's expanded portfolio of household and personal care
brands, combined with management's focus on deleveraging the
balance sheet, will result in credit protection measures
consistent with the rating over the intermediate term.


CLEVELAND-CLIFFS: Publishes Second Quarter 2001 Results
-------------------------------------------------------
Cleveland-Cliffs Inc (NYSE: CLF) reported a net loss of $15.1
million, or $1.50 per diluted share, for the second quarter of
2001, and a net loss of $24.7 million, or $2.45 per diluted
share, for the first half of 2001. In the second quarter of
2000, Cliffs recorded net income of $11.0 million, or $1.04 per
diluted share, and first half 2000 net income was $7.5 million,
or $.71 per diluted share.

Excluding special items, second quarter 2001 results were $22.7
million below 2000, and first half 2001 results were $28.8
million below 2000. The lower results in 2001 were primarily due
to production curtailments, lower pellet sales volume, higher
mine costs, a decrease in royalties and management fees, a
greater loss from Cliffs and Associates Limited (CAL) and
higher interest expense, partly offset by a modest increase in
the average price realization on pellet sales. Higher energy
costs contributed to the increase in mine costs. Second quarter
and first half 2001 results benefited from the sale of non-
strategic lands, and first half 2001 results included a $2.1
million pre-tax charge for restructuring activities.

John S. Brinzo, Cliffs' Chairman and Chief Executive Officer,
said, "Soft markets and excessive inventories caused most
domestic steel mills to operate at low levels in the first six
months of 2001. As a result, Cliffs' iron ore pellet sales in
the first half of 2001 were 2.8 million tons versus 4.1 million
tons in 2000." Second quarter sales were 2.3 million tons
compared to 3.4 million tons in 2000.

                         Operations

Iron ore pellet production at Cliffs-managed mines was 6.5
million tons in the second quarter of 2001 versus 10.8 million
tons in 2000. First-half production was 13.4 million tons
compared to 20.6 million tons in 2000. Cliffs' share of
production in the second quarter and first half of 2001 was
1.2 million tons below 2000.

There is a 7.2 million ton decrease in total production
principally due to the permanent closure of LTV Steel Mining
Company at the beginning of 2001 and production curtailments at
the Empire, Hibbing, Northshore and Tilden Mines. The following
table summarizes the production curtailments that have been
implemented:

                  Period of Curtailment

      Empire June 3 - July 15
      Hibbing January 28 - March 11
      June 17 - August 5
      Tilden May 13 - June 23
      Northshore Only operating 2 of 3 pelletizing lines

Further production curtailments are planned at Northshore in the
fourth quarter, and production schedules at all mines for the
remainder of 2001 are subject to change.

The CAL hot-briquetted iron (HBI) plant in Trinidad has made
progress during the ramp-up of operations that started in mid-
March. As of June 30, the plant had produced 59,000 tons of
commercial grade CircalTM briquettes, and shipments through June
30 totaled 42,000 tons. The first half loss from CAL was higher
than last year primarily due to Cliffs' increased ownership
of CAL. Cliffs increased its CAL ownership from 46.5 percent to
approximately 82 percent as a result of the Company and Lurgi
acquiring LTV Corporation's 46.5 percent share of CAL in
November 2000.

                     Special Items in 2000

Earnings for the second quarter and first half of 2000 included
$3.4 million of income attributable to two special items. Cliffs
recorded a $15.0 million ($9.8 million after-tax) recovery on a
business interruption insurance claim related to the loss of
pellet sales to Rouge Industries in 1999, that was partly offset
by a $9.1 million charge ($6.4 million after-tax) to recognize
the reduction in the market value of LTV Corporation shares then
owned by the Company.

                          Liquidity

At June 30, 2001, Cliffs had cash and cash equivalents of $56
million. In May 2001, the Company borrowed the remaining $35
million available under its $100 million unsecured revolving
credit facility to fund pellet inventories and other working
capital requirements. At the end of June, there were 5.3
million tons of pellets in inventory at a cost of $151 million,
a decrease of .4 million tons since March 31, 2001. Pellet
inventory at June 30, 2000 was 3.2 million tons, or $91 million.
Cash flow from inventory liquidation is expected to permit
repayment of all of borrowings under the revolving credit
facility by year-end.

                           Outlook

A sharp decline in steel demand caused North American
steelmakers to operate at less than 80 percent of capacity in
the first half of 2001. Conditions are expected to improve late
this year, and into 2002, due to a decrease in imports and
reduction of inventories, but the recovery will likely be
restrained by the worst downturn in manufacturing since the Gulf
War recession.

Brinzo said, "We continue to have considerable uncertainty
regarding the pellet requirements of certain customers, and our
sales forecast for the full year 2001 has been reduced to
approximately 10 million tons. This estimate assumes LTV
Corporation will continue to operate two blast furnaces in
Cleveland and two furnaces in Chicago." Separately, LTV
continues to meet its obligations as a 25 percent partner in the
Empire Mine, but has neither affirmed nor rejected its ownership
in Empire.

Given the weak sales forecast for the second half of 2001, the
high level of inventory at June 30 and the plan to significantly
reduce inventory by the end of the year, full year production
will be significantly below Cliffs' production capacity of 12.8
million tons. Production curtailments have been implemented in
Minnesota and Michigan in the first half and additional
curtailments are expected. With fixed costs representing
approximately one-third of total production costs, Cliffs'
financial results for the second half will continue to be
adversely impacted by costs associated with the curtailments. A
modest loss is expected in the second half.

Brinzo said, "We are managing our iron ore business with the
expectation that integrated steel and iron ore production
capacity will shrink and foreign competition will remain
intense. With most steel companies interested in exiting their
iron ore ownership positions, there is a unique opportunity for
Cliffs to be a bigger, more powerful force in a consolidating
industry. Cliffs should be and will be the leader in remaking
the iron ore business in the United States. We have been in the
business for 154 years and we're good at what we do.

"Having said that, we also recognize that we must make major
changes in how we operate and staff our mines if they are going
to be world class competitive. We must be relentless in pursuing
increased productivity and cost reduction. Cliffs' mines must
deliver pellets to North American steel producers at a cost that
encourages steelmakers to use their blast furnaces rather than
import foreign made semi-finished steel slabs.

"We know we can only achieve success if we reject the status quo
and think in new terms. We have put new programs in place in
recent months, and others are under development that will allow
us to achieve our objectives. Every employee throughout the
organization is expected to become part of the solution for a
better tomorrow. We will prevail in our mission to better serve
a "new" steel industry and restore Cliffs' shareholder value."

Cleveland-Cliffs is the largest supplier of iron ore products to
the North American steel industry and is developing a
significant ferrous metallics business. Subsidiaries of the
Company manage and hold equity interests in five iron ore mines
in Michigan, Minnesota and Eastern Canada. Cliffs has a major
iron ore reserve position in the United States and is a
substantial iron ore merchant.


COMDISCO INC.: Asks for More Time to File Schedules
---------------------------------------------------
Comdisco, Inc., and its debtor-affiliates anticipates they will
not be able to comply with the 15-day deadline under Rule 1007
of the Federal Rules of Bankruptcy Procedure within which to
file their schedules of assets and liabilities, statements of
financial affairs, schedules of current income and expenditures,
statements of executory contracts and unexpired leases, and
lists of equity holders.

By this motion, the Debtors ask Judge Barliant for an extension
of the deadline to September 28, 2001.

Felicia Gerber Perlman., Esq., at Skadden Arps Slate Meagher &
Flom, explains that the size and complexity of the Debtors'
business makes it impossible for them to quickly obtain the
necessary information to prepare and file their respective
schedules and statements. Ms. Perlman notes that the Debtors
have over 100,000 parties and parties-in-interest, and operate
their business from several locations. Ms. Perlman adds that
certain pre-petition invoices have not yet been received and/or
entered in the Debtors' financial statements.

Over the next 60 days, Ms. Perlman says, potential purchasers
will also be conducting extensive due diligence audits in order
to formulate bids for the Debtors' services and leasing
business.

The Debtors, therefore, will be focused on gathering information
for potential bidders. As a result, Ms. Perlman notes, resources
that would be used to compile the required statements and
schedules would not be available.(Comdisco Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900)


COMMSCOPE: Ratings On Watch After Joint Venture Announcement
------------------------------------------------------------
Standard & Poor's placed its ratings on CommScope Inc. on
CreditWatch with negative implications (see list below),
following CommScope's announcement of partnering with Furukawa
Electric Co. Ltd. of Japan to acquire the Fiber Optic Cable
business of Lucent Technologies Inc.

The CreditWatch listing reflects the potential for CommScope to
significantly increase debt levels from its current $200 million
level as it invests about $650 million into joint ventures with
Furukawa. The investment is to be financed with an undisclosed
mix of debt and equity. Under the terms of the transaction, two
joint ventures will be formed: one for the fiber-cable portion
and one for the fiber portion excluding some international
assets being sold to Corning Inc.

Commscope will own 51% of the fiber-cable joint venture, which
includes operations in Georgia, Germany, Brazil, and a joint
venture in Russia. Furukawa will own 51% of the fiber joint
venture including multimode optical fiber operations in
Massachusetts and a joint venture between Lucent and Sumitomo
Electric Lightwave Corporation. This transaction is part of a
$2.75 billion purchase by Furukawa and Corning of Lucent's
entire Optical Fiber Solutions Business.

CommScope, based in Hickory, N.C., is the leading manufacturer
of coaxial cables for the cable television industry. While this
transaction helps broaden the company's product offerings and
adds to their technology base, it is not clear that these
benefits will offset the potential weakening in capital
structure.

Standard and Poor's will evaluate the structure of this
transaction, including the mix of debt and equity to fund it and
access to cash flow of the joint ventures. CommScope's business
profile will also be reviewed in order to resolve the
CreditWatch listing.

Issuer Ratings Placed On CreditWatch Negative:

      Corporate credit rating                BBB-
      Senior unsecured credit facility       BBB-
      Convertible sub notes                  BB+


CONE MILLS: Discloses Second Quarter Results
--------------------------------------------
Cone Mills Corporation (NYSE: COE) reported net sales of $135.2
million for the second quarter of 2001. For comparison, sales
versus prior year from ongoing operations were down by 13%,
after excluding the sale of the company's Raytex finishing
operation, which was closed in first quarter 2001.

For the second quarter of 2001, the company reported a net loss
of $2.7 million excluding charges related to the company's
Reinvention Plan, in line with expectations. Including pre-tax
charges of $33.6 million related to the Reinvention Plan, the
company reported a $26.5 million loss or $1.08 per share. This
compares with net income of $.02 per share for second quarter
2000. The Reinvention Plan charges are for termination benefits,
inventory write-downs and impairment charges on noncurrent
assets. The $33.6 million of restructuring and related charges
recorded in the second quarter of 2001 for the implementation of
the company's Reinvention Plan includes approximately $4 million
of charges that will require the use of cash.

The decrease in sales from ongoing operations for second quarter
2001, as compared with second quarter 2000, was the result of a
12% decline in denim sales, a 35% decline in khaki sales related
in part to the streamlining of the company's product offering,
and a 21% decline in decorative fabrics sales, partially offset
by a 4% increase in Carlisle commission finishing sales.

Excluding restructuring and related charges, gross profit for
the second quarter was $12.9 million or 9.5% of sales, as
compared with $19.6 million or 12.1% of sales for the second
quarter 2000. The decline in gross margin was primarily due to
lower sales volume, pricing pressures and curtailed
manufacturing operating schedules. Selling and administrative
expenses declined from $12.8 million in second quarter 2000 to
$11.8 million in second quarter 2001.

John L. Bakane, president and chief executive officer,
commented, "The difficult environment at retail and the
resulting inventory adjustments throughout the softgoods
pipeline, coupled with the strong dollar and unfavorable U.S.
trade policies, have placed severe pressures on the U.S.
textile industry. Nonetheless, we believe that the painful
actions we are taking to streamline Cone and focus on businesses
that are defensible from imports, and in which we have
leadership positions, will return the company to profitability
in 2002."

Denim and khaki segment sales decreases, as compared with second
quarter 2000, were the result of lower volume along with
continued downward pressure on pricing. Operating earnings for
the denim segment declined to $3.4 million as results were
impacted by lower volume, capacity underutilization and margin
pressures. Khaki results improved from a $1.1 million loss in
the second quarter of 2000 to $0.6 million loss in the second
quarter of 2001. This improvement is a result of Cone's khaki
business strategy of focusing more sharply around core fabrics,
thereby reducing inventory requirements and improving quality.

Outside sales of the commission finishing segment, excluding
Raytex which was closed in first quarter 2001, increased 4% for
the second quarter of 2001, as compared with second quarter
2000. Segment operating earnings improved to $0.9 million in the
second quarter of 2001 as Carlisle continues to realize benefits
from market consolidation and its restructuring efforts.

Sales for the decorative fabrics segment declined to $15.8
million as weak furniture market conditions continue to impact
negatively both the converting and jacquard operations. The
segment had an operating loss of $1.3 million for the second
quarter of 2001, as compared with an operating loss of $0.3
million for the second quarter of 2000.

Excluding restructuring and related charges, EBITDA for the
second quarter of 2001 was $8.1 million and includes $1.6
million related to the company's 50% interest in the Parras Cone
joint venture operation. In addition, during the second quarter
of 2001 the company realized approximately $12.9 million in
proceeds from liquidation of inventories and sale of property
and equipment as part of its Reinvention Plan.

The company continues to operate with sufficient liquidity as
cash and availability under the company's revolving credit
facility averaged $11 million for the quarter and has
approximately $19 million as of the date of this press release.
The company is focusing on ongoing cash flow and expects
to realize additional proceeds from its Reinvention Plan in the
third quarter. In addition, there is borrowing capacity under
its receivables securitization to support increased sales. As
previously announced, the company has received an extension on
the maturity of its revolving credit facility and the payment
due under the senior note through November 7, 2001 and is
currently in discussion with lenders about putting in place a
longer term facility. The company is in compliance with all of
its financing agreements.

Founded in 1891, Cone Mills Corporation, headquartered in
Greensboro, NC, is the world's largest producer of denim fabrics
and the largest commission printer of home furnishings fabrics
in North America. Manufacturing facilities are located in North
Carolina and South Carolina, with a joint venture plant in
Coahuila Mexico.


CORECOMM: Falls Short Of Nasdaq's Minimum Bid Price Requirement
----------------------------------------------------------------
CoreComm Limited (NASDAQ: COMM) announced that on July 23, 2001,
it received a Nasdaq Staff Determination indicating that the
Company failed to comply with the minimum bid price requirement
for continued listing, and is subject to delisting from the
Nasdaq National Market. The Company intends to file a request
for a hearing before Nasdaq Listing Qualifications Panel to
review the Nasdaq Staff Determination. Pending such hearing, the
Company's common stock will continue to trade on the Nasdaq
National Market. There can be no assurance that the Company will
prevail at the hearing, and that its common stock will not be
delisted from the Nasdaq National Market.


EISBERG FINANCE: Fitch Places BB Rating On Watch Negative
---------------------------------------------------------
Fitch placed the class C notes of Eisberg Finance Ltd. on Rating
Watch Negative.

The class C notes are rated `BB.' Eisberg is a synthetic cash
flow CDO established by UBS AG, London Branch to provide credit
protection on a $2.5 billion portfolio of investment grade,
corporate debt obligations.

The following securities have been placed on Rating Watch
Negative:

     * $41,250,000 class C-1 floating-rate notes
     * $22,500,000 class C-2 9.664% notes

Fitch's rating action reflects the deterioration in credit
quality of several of the underlying assets as well as higher
than expected credit protection payments under the credit
default swap agreement with UBS. As a result there is a
diminished level of credit enhancement for the class C notes.


EXCALIBER HOLDING CORPORATION: 20 Largest Unsecured Creditors
---------------------------------------------------------------
Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Jackson Tube Service, Inc.    trade debt            $1,509,039
PO Box 1650
Piqua, OH 45356-4650
937-773-8550

Aspen Employment Services     trade debt            $178,743

Seymour Tubing                trade debt            $140,879

Isanti County Treasurer       trade debt            $101,826

Doherty Staffing Solutions    trade debt            $94,121

Thompson Tool & Die, Inc.     trade debt            $86,986

Distributions by Air, Inc.    trade debt            $82,261

Olympic Steel, Inc.           trade debt            $74,118

Eagle Global Logistics        trade debt            $73,026

Valmont/Applied Coating       trade debt            $58,413
Tech.

Gary Osterdyk                 trade debt            $51,446

H & F Manufacturing           trade debt            $51,446

Menasha Corporation           trade debt            $48,372

Honda of Sc Mfg., Inc.        trade debt            $46,456

Pine Manufacturing            trade debt            $46,061

Ryerson Tull Coil             trade debt            $40,298
Processing

Central McGowan, Inc.         trade debt            $37,546

Viking Materials, Inc.        trade debt            $35,947

Rud-Chain, Inc.               trade debt            $34,813

Morell Machining, Inc.        trade debt            $34,586


FEDERAL-MOGUL: S&P Junks Ratings & Says Outlook Is Negative
-----------------------------------------------------------
Standard and Poor's lowered its ratings on Federal-Mogul Corp.
and Federal-Mogul Financing Trust. At the same time, all ratings
were removed from CreditWatch, where they were placed on June
18, 2001. The outlook is negative.

The rating actions reflect Standard & Poor's belief that there
is a heightened risk that Federal-Mogul will default on its debt
obligations in the coming year due to profit pressures and
significant ongoing cash outlays related to asbestos litigation
and restructuring actions.

Federal-Mogul manufactures and distributes components for
automobiles, heavy-duty trucks, farm and construction equipment,
and industrial products. Operating results have deteriorated
significantly in the past year due to weakness in the automotive
aftermarket, declines in original equipment automotive and
heavy-duty truck production, and internal operating
inefficiencies. In the first-half 2001, the company reported a
loss before extraordinary items of $96 million (including a
restructuring charge of $32 million), which compares with
earnings of $64 million (including a restructuring charge of $69
million) in the comparable period of 2000. Debt to EBITDA, which
was slightly under 6 times (x) in 2000, is now close to 7x.
Given current industry conditions, no material improvement in
this measure is expected in the near to intermediate term,
despite ongoing restructuring initiatives.

Significant cash outlays, related to restructuring actions and
asbestos litigation, are exacerbating the negative impact of
earnings pressures. In 2000, Federal-Mogul spent $351 million on
asbestos payments and $72 million on restructuring costs. In the
first-half 2001, the company spent $171 million on asbestos
payments and $38 million on restructuring. Restructuring
expenditures are expected to increase in the near term and
asbestos payouts are expected to remain at or above current
levels. The company recently stated that it continues to receive
a high volume of new asbestos claim filings, and that the recent
bankruptcies of certain co-defendant companies in asbestos
litigation are contributing to increased financial demands
against Federal-Mogul. The company also stated that it is facing
increasing trial pressure from a variety of state jurisdictions.

Despite current cash flow pressures, the company does not face
an immediate liquidity squeeze. Federal-Mogul currently has
about $150 million in cash on the balance sheet, and about $500
million of availability under its bank lines. However, cash flow
pressures are likely to build during the coming months, given
the high level of asbestos claims activity the company is
reporting and the likelihood of continued challenging end-market
conditions in the near term. This would lead to increased
financial stress and potential covenant violations.

Outlook: Negative

The ratings are likely to be lowered if cash flow pressures
build as a result of increased asbestos payments or increased
operating pressures, Standard & Poor's said.

Ratings Lowered, Removed From CreditWatch:

Ratings
                                            To    From
         Federal-Mogul Corp.
           Corporate credit rating          CCC+  B
           Senior secured debt              CCC+  B
           Senior unsecured debt            CCC-  CCC+
           Preferred stock                  CC    CCC

         Federal-Mogul Financing Trust
           Preferred stock rating*          CC    CCC


HARNISCHFEGER: Resolves 19 Claims Against Beloit
------------------------------------------------
Harnischfeger Industries, Inc. continues to review claims filed
against them and rectify previous treatment if necessary. In
many instances, after discussion between the Debtors and the
respective claimants, the parties reach agreement which may
involve the amount of a claim, ascertaining the correct debtor
for the liability or reinstatement of claims previously
expunged.  Accordingly, the parties sought and obtained approval
for their respective agreement as set forth in various
stipulations:

     (1) Paceholder Associates, Inc. filed claim number 11074
against Harnischfeger Industries, Inc. in the amount of
$2,545,454.45.

In the Debtors' Forty-Seventh Omnibus Objection to Claims, HII
objected to the claim, seeking to reduce the amount and allow
the claim in the amount of $2,597,056.47.

Paceholder did not oppose the relief sought in the Forty-Seventh
Omnibus Objection and the relief was granted by Court order.

Due to an inadvertent error on the Debtors' claims register, the
Order did not include reference to Claim No. 11074. Accordingly,
Paceholder did not receive a ballot to vote its claim with
respect to the Third Amended Joint Plan of Reorganization as the
Plan relates to HII. Paceholder intended to vote Claim No. 11074
in favor of the HII Plan.

Paceholder and HII agree that Claim No. 11074 is allowed as a
general unsecured claim against HII in the amount of
$2,597,056.47 for all purposes including but not limited to
voting. This Stipulation and Order supersedes all other orders
relating to Claim No. 11074 and Paceholder has an allowed claim
in the amount of $2,597,056.47.

     (2) McCollister's Moving & Storage Corp. a/k/a United
Intermode, Inc. filed proof of claim (no. 3580) in the amount of
$391.67 against Beloit Iron Works, Inc., seeking unsecured
priority status for the claim. Beloit Corp. has scheduled a
general unsecured debt owed to United Intermode, Inc. in the
amount of $391.67 (Claim No. s10754). A dispute has arisen over
claim no. 3580.

The Debtors and McCollister's agree that Claim No. 3580 against
Beloit Iron works will be expunged as it relates to Beloit Iron
Works and will be treated as if the same had been filed against
Beloit Corp. The parties further agree that Claim No. 3580 will
be deemed to have been filed as a general unsecured claim in an
amount equal to the scheduled amount of $391.67.

     (3) Beloit scheduled a debt owed to Demarest & Almedia in
the amount of $103,314.96 (Claim No. s2974) and Demarest
acknowledges that Claim No. s2974 has been paid in full.

Beloit and Demarest seek the Court's approval of their agreement
as reflected in a stipulation which provides that Claim No.
s2974 is expunged.

     (4) Alan Harland (the Creditor) filed a proof of claim
against Joy Technologies, Inc. (the Debtor) in an unliquidated
amount. The claim has been asigned claim number 6191.

The Debtor and the Creditor agree that the Claim number 6191
will be allowed in the amount of $150,000 and assigned unseucred
non-priority status. This amount was to be used for voting and
distribution purposes and all other amounts the Creditor has or
could assert against the Debtor, or any other Debtors in these
proceedings, are barred.

The Creditor, on its own behalf and on behalf of each of its
heirs, assigns, agents or affiliates, release and discharges the
Debtors and their successors and assigns from obligations and
liabilities.

     (5) The Debtors have scheduled a debt owed to Southern Pine
Electric Power Association in the amount of $19,838.47 (Claim
No. s9582) and Southern Pine has filed a claim against the
Debtors in the amount of $18,895.38.

The Debtors seek to recover a preferential transfer from
Southern Pine, pursuant to 11 U.S.C. Sec. 547 (the Preference)
in the amount of $19,506.81. The parties desire to resolve any
and all disputes with respect to either the Claims or the
Preference.

Accordingly, the Debtors and Southern Pine seek the Court's
approval of their agreement as reflected in the stipulation
which provides that Claim No. 5273 and s9582 are disallowed and
expunged for all purposes. The stipulation further provides that
the Debtors withdraw the Preference.

     (6) The Debtors have scheduled a debt to Elam & Burke in the
amount of $52,976.10 (Claim No. s3415) which is comprised of two
invoices owed to Elam. The first invoice, #68493 in the amount
of $22,352.93 has been paid in full. The remaining invoice,
#70082 in the amount of $30,623.17 does not accurately reflect
the amount owed to Elam as of June 7, 1999.

The Debtors and Elam seek the Court's approval of their
agreement as reflected in the stipulation which provides that
Claim No. s3415 is reduced to the amount of $31,713.30.

     (7) Beloit scheduled a claim for B&J Metal Fab in the amount
of $14,500.00 (Claim No. s1068). B&J acknowledges that Claim No.
s1068 has been paid in full. The stipulation provides that Claim
No. s1068 is expunged.

     (8) Garan Lucow Miller & Seward PC (Garan) has filed Claim
No. 4385 as a prepetition general unsecured claim against HII in
the amount of $2,055.00.

The Debtors and Garan seek the Court's approval of their
agreement as set forth in a stipulation which provides that,
Claim No. 4385 will be expunged as it relates to HII and will be
treated as a claim against Harnischfeger Corporation (Harnco) in
the amount of $2,055.00.

     (9) AT&T Wireless Services, Inc. has filed Claim No. 770
against Beloit Corporation. Optical Alignment Systems and
Inspection Services, Inc. (OASIS) has reviewed Claim No. 770 and
has determined that, to the extent that Claim No. 770 is a valid
claim that may be asserted against any of the Debtors, the
correct Debtor is OASIS.

Accordingly, Beloit and AT&T seek the Court's approval of their
agreement as set forth in a stipulation which provides that,
Claim No. 770 will be expunged as it relates to Beloit and will
be treated as a claim against OASIS.

     (10) VWR has filed Claim No. 2279 as a prepetition general
unsecured claim against Beloit Iron Works in the amount of
$900.41. The Debtors have ascertained that, to the extent that
Claim No. 2279 is a valid claim that may be asserted against any
Debtor, the correct Debtor is Beloit Corporation.

Accordingly, the Debtors and VWR seek the Court's approval of
their agreement as set forth in a stipulation which provides
that, Claim No. 2279 will be expunged as it relates to Beloit
Iron Works, Inc. and will be treated as a claim against Beloit
Corporation.

     (11) Beloit has scheduled a debt to First Priority Health in
the amount of $11,640.69 (Claim No. s116775) relating to
invoices #11171742 in the amount of $4,552.35 and #11171743 in
the amount of $7,088.34.

Portions of these invoices are post-petition debts: $3,490.13 of
invoice #11171742 and $5,434.39 of invoice #11171743. First
Priority Health has receive payment for the post-petition
portion of these invoices.

The Stipulation provides that Claim No. s116775 is reduced to a
general unsecured claim against Beloit in the amount of
$2,716.17.

     (12) Bird & Bird filed Claim No. 6740 against Harnischfeger
Corporation.

As part of the Debtors' Thirteenth Omnibus Objection to Claims,
Harnco reduced Claim No. 6740 to the amount of $2615.35. Because
of an inadvertent error, the claim was reduced to an incorrect
amount against the incorrect Debtor.

The Debtors and Harnco agree that Claim No. 6740 against Harnco
will be expunged as it relates to Harnco and will be treated as
if the same had been filed against Harnischfeger Industries,
Inc. (HII).

Bird and HII agree that the Claim will be allowed as a general
unsecured claim against HII in the amount of $19,312.90. This
amount will be used for voting and distribution purposes.

     (13) Prep Tec Ltd. filed proof of claim (no. 2728) in the
amount of $81,780.42 against Beloit. The claim was previously
expunged by order of the Court pursuant to omnibus objection no.
35 due to Prep Tec's failure to respond.

After discussion, the parties agree that reinstatement of Claim
No. 2728 is proper.

     (14) P&H scheduled a general unsecured debt to Master
Graphics in the amount of $2,421.24 (Claim No. s6646). Claim No.
s6646 was scheduled as either contingent, unliquidated or
disputed (CUD).

The claims bar date was February 29, 2000. Master Graphics
failed to file a claim prior to the Bar Date and therefore claim
s6696 was expunged by operation of law.

After discussion, the Debtors and Master Graphics agree to
reinstate Claim No. s6646 as a general unsecured claim against
P&H in the amount of $2,421.24.

     (15) P&H scheduled a general unsecured debt to International
Paper in the amount of $19,879.13 (Claim No. s5310). Claim No.
s5310 was scheduled as either contingent, unliquidated or
disputed (CUD).

The claims bar date was February 29, 2000. International Paper
failed to file a claim prior to the Bar Date and therefore claim
s5310 was expunged by operation of law.

After discussion, the Debtors and International Paper agree to
reinstate Claim No. s5310 as a general unsecured claim against
P&H in the amount of $19,879.13.

     (16) P&H scheduled a general unsecured debt to Corporate
Express in the amount of $2,858.23 (Claim No.s2592). Claim No.
s2592 was scheduled as either contingent, unliquidated or
disputed (CUD).

The claims bar date was February 29, 2000. Corporate Express
failed to file a claim prior to the Bar Date and therefore claim
s5310 was expunged by operation of law.

After discussion, the Debtors and Corporate Express agree to
reinstate Claim No. s2592 as a general unsecured claim against
P&H in the amount of $2,858.23.

     (17) Claim No. s2231 was expunged by court order following
Mesa's failure to timely respond to the Debtors' Fourth Omnibus
Objection to Claims.

After discussion, the Debtors and the City of Mesa agree to
reinstatement of Claim No. s2231.

Accordingly, the parties request that Claim No. s2231 be
reinstated and allowed as a general unsecured claim against P&H
in the amount of $2,724.86.

     (18) Arnold Machinery Company filed Claim No. 2931 against
P&H. The Claim was expunged by court order following Arnold's
failure to respond to the Debtors' Forty-First Omnibus Objection
to Claims.

After discussion, the Debtors and Arnold agree that Claim No.
2931 will be reinstated and allowed as a general unsecured claim
against P&H in the amount of $1,712.25.

     (19) Claim No. 116374 was expunged by Court order after the
Minnesota Department of Revenue failed timely respond to the
Debtors' Fourth Omnibus Objection to Claims. After a discussion,
the Debtors and the Minnesota Department of Revenue agree that
reinstatement of Claim No. s116374 is proper. Accordingly, the
Debtors request that Claim No. s116374 be reinstated and allowed
as a general unsecured claim against P & H in the amount of
$165.00. (Harnischfeger Bankruptcy News, Issue No. 45;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


GLOBALNETFINANCIAL.COM: Appeals Nasdaq's Delisting Determination
----------------------------------------------------------------
GlobalNetFinancial.com, Inc. (Nasdaq: GLBN; LSE: GLFA) has
requested a hearing before a Nasdaq Listing Qualifications Panel
to review the Nasdaq Staff determination to delist the Company's
common shares.

The Company received a Nasdaq Staff determination on July 18,
2001 indicating that the Company fails to comply with the
minimum bid price requirement for continued listing on the
Nasdaq National Market as set forth in Marketplace Rule
4310(c)(8)(B) and that its common shares, are therefore,
subject to delisting from The Nasdaq National Market. While the
Company has requested a hearing before a Nasdaq Listing
Qualifications Panel to review the Staff determination and the
Company's common shares continue to be listed on the Nasdaq
Stock Market until the panel reaches a decision, there can be no
assurance that the Panel will grant the Company's request for
continued listing.


GORGES/QUIK-TO-FIX: Smithfield Foods Closes $34MM Asset Purchase
----------------------------------------------------------------
Smithfield Foods, Inc. (NYSE: SFD) closed the acquisition of
substantially all of the assets and business of Gorges/Quik-to-
Fix Foods, Inc. for approximately $34 million in cash. The
agreement was approved on July 13 by the United States
Bankruptcy Court in Delaware overseeing the Quik-to-Fix
bankruptcy proceeding.

"Quik-to-Fix provides an ideal vehicle for Smithfield Foods to
participate in the fully-cooked, ready-to-eat pork and beef
category," said C. Larry Pope, vice president and chief
financial officer. "We will invest aggressively to dramatically
expand this business. This acquisition gives us a head start in
catering to changing lifestyles and consumers who want to
reduce the effort involved in preparing a quality meal."

Quik-to-Fix is a leading producer, marketer and distributor of
value-added beef, pork and poultry products for the retail and
food service industry. With annual sales of $140 million, the
company's products are marketed primarily under the Quik-to-Fix
and Gorges brands. Customers include several major retail
chains, as well as numerous national foodservice distributors.

Smithfield Foods has delivered a 28 percent average annual
compounded rate of return to investors since 1975. In the last
15 years, the company's share price has outperformed the S&P 500
Index by more than 350 percent. With annual sales of $6 billion,
Smithfield Foods is the leading processor and marketer of fresh
pork and processed meats in the United States, as well as the
largest producer of hogs. For more information, please visit
http://www.smithfieldfoods.com


HEXCEL CORP.: S&P Affirms Low-B Ratings, Outlook Is Negative
------------------------------------------------------------
Standard & Poor's revised its outlook on Hexcel Corp. to
negative from stable. At the same time, Standard & Poor's
affirmed its existing ratings on the company.

The action follows weaker-than-expected results for the second
quarter ended June 30, 2001. A sharp reduction in demand for the
firm's woven glass fibers used in the global electronics market
more than offset increased sales in commercial aerospace and
industrial segments. As a result of lower operating profits and
continued high debt levels, credit protection measures are
subpar for the rating.

The ratings for Hexcel are based on its substantial positions in
competitive industries and generally favorable business
fundamentals, but also incorporate an expectation that the
company's financial profile, weakened from the late 1998 debt-
financed acquisition of Clark-Schwebel Inc., will strengthen
gradually. In the intermediate term, debt to EBITDA should
improve to 3.5 times (x)-4.0x, EBITDA interest coverage to
2.75x-3.0x, funds from operations to debt to the mid-teens
percent area, and debt to capital to the mid-60s percent area.
Ongoing actions to raise operating efficiency and a focus on
better working capital management should aid financial
performance.

Hexcel is an integrated global leader in manufacturing
lightweight, high-performance carbon fibers, structural fabrics,
and composite materials for the commercial aerospace, defense
and space, electronics, recreation, and general industrial
sectors. The markets served are cyclical, but most have growth
potential where the company's materials offer significant
performance and economic advantages over traditional materials.

                     Outlook: Negative

Despite leading market positions and cost-reduction efforts,
Hexcel will be challenged to restore its credit profile to where
it is consistent with the ratings. Failure to do so could lead
to a downgrade, Standard & Poor's said.

                     Ratings Affirmed:

      Hexcel Corp.
           Corporate credit rating      BB-
           Senior secured debt          BB-
           Subordinated debt            B


IMPERIAL SUGAR: Florida Light Seeks Additional Assurance
--------------------------------------------------------
Florida Light & Power Company, represented by Michael P. Morton
of Michael P. Morton PA of Wilmington, asks Judge Robinson to
reconsider her February order determining adequate assurance to
various utilities, including Florida Light, and to increase the
deposit required of the Debtor to $67,410, an amount equal to
approximately two months of service charges.

Mr. Morton tells Judge Robinson that Imperial Sugar Company's
February Motion and her Order "impermissibly alter" the
requirements of the Bankruptcy Code.  Instead of guaranteeing
adequate assurance to the utilities after the first 20 days of
the case, the Debtors' requested relief actually denied that
relief.  Through the creation of "stealth terms" and procedures
such as "determination hearing", the Debtors effectively
reversed the burden imposed by Code  366 and eviscerated its
requirements.

Mr. Morton argues that any modification of the requirements of
the Bankruptcy Code that the Debtors provide adequate assurance
to the utilities of the Debtors' future performance of payment
can only take place after notice and a hearing.  The ex parte
modification that occurred in February is characterized by Mr.
Morton as "simply contrary to provisions of the statute".
Simply telling the utility companies that they can ultimately
have their day in court does not cure the defect.

Like all creditors, utilities must wait to be paid for
prepetition obligations.  However, Mr. Morton suggests that in
this case the Debtors have singled out the utilities for harsher
treatment by seeking to deny them postpetition deposits.  This
is described as particularly unfair because it forces the
utilities, unlike other creditors, to extend credit postpetition
on an unsecured basis.  Utilities provide services to their
customers on a continuous basis and bill for services after they
are provided.  They cannot conduct their business COD and by
definition are exposed to greater risks than other postpetition
customers.  Deposits or other forms of security are thus
critical to utilities to protect their rate-paying base.

              Utilities May Not Be Enjoined

The February order prohibits Florida Light from requiring
postpetition deposits except in accordance with its terms.  This
reverses the normal sequence of events which are supposed to
occur under the Code.  In effect, the Debtors obtained
injunctive relief against Florida Light. However, no injunction
or stay is created is created by the Bankruptcy Code, citing the
Court of Appeals for the Third Circuit in the case of In re
Whitaker, 882 F.2d 791 (3rd Cir. 1989).  Thus the Code section
requiring adequate protection for utilities cannot form the
basis for the relief granted.

The Debtors obtained injunctive relief against Florida Light
without a proper showing in their Motion that they had met the
applicable legal and procedural requirements.  First, no
adversary proceeding was filed, but instead the relief was
granted by motion.  Therefore, the procedural protections were
not granted to the utilities, and the February Order should be
vacated, Mr. Morton says, on this ground alone.  Second, the
Debtors failed to show any immediate and irreparable injury
which would result before adverse parties could be heard.
Finally, the ex parte relief was imposed for a period of time
in excess of 10 days, in contravention of the rule governing
injunctions.

At the least, the Debtors' request was a "contested matter" and
as such, the Debtors were required to serve their moving papers
by mail to the attention of an officer, a managing or general
agent, or any other agent authorized by appointment or law.
"Even a cursory review" of the Debtors' certificate of service
shows that any service made to the addresses in the exhibit did
not meet the requirements of the rules on service of contested
matters.

Mr. Morton says that a deposit should be required in this case,
and that a mere entitlement to administrative status is an
insufficient substitute.  The Debtors' prepetition payment
history is "spotty".  On three of four accounts, the Debtors
fell so far behind they received termination notices, and only
then did they make the payments to avoid termination.  The
Bankruptcy Code places the burden on the Debtors to show that
the deposit demand is excessive or unreasonable.  The provision
of an administrative expense priority in this case is hardly
an offer of adequate assurance of payment.  Nor can the Debtors'
promise to pay future bills meet the requirements of the statute
in this case.  In determining the amount and sufficiency of the
deposit required, the Court should consider several factors.
Critical among these is the amount of time it takes the utility
to effect a termination if a customer misses the billing cycle -
usually about 60 days.

Florida Light asks that the Court requires the Debtors to post
deposits in amounts equal to two months of service on each
account.  Not only do the applicable tariffs and rules
specifically permit such deposits, but deposits in these amounts
are essential for Florida Light to protect itself against the
Debtors' postpetition default.  Florida Light also reports that
it has requested that the Debtors provide the requested deposit,
but no deposit has been received.  Nor - contrary to the terms
of the February Order - have the Debtors filed a motion with the
Court for a determination of adequate assurance of payment.
(Imperial Sugar Bankruptcy News, Issue No. 7; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


INTEGRATED HEALTH: Settling Disputes With Southtrust
----------------------------------------------------
As previously reported, the SouthTrust Motion was denied in part
and granted in part. In an Order and Opinion (the March 13 Order
and Opinion), the Court denied SouthTrust's request for Relief
from the Automatic Stay but concurred that the agreements at
issue are not financing arrangements and granted SouthTrust's
request for entitlement to the payment of rent on each of the
properties. Thus, under the Court's March 13 Order and Opinion,
Acquisition is obligated to pay all post-petition rent pursuant
to section 365(d)(3).

Integrated Health Services, Inc. then filed a Motion for
Reconsideration, Amendment and/or Clarification with respect to
the March Opinion and Order (the Reconsideration Motion). Upon
hearing on May 3, 2001, the Court granted the Reconsideration
Motion and vacated the March 13 Opinion and Order.

However, Counsel for SouthTrust and Counsel for the Debtors were
not able to agree on the form on the form of a proposed order.
The Debtors' version of the proposed order provides that the
March 13 Order is vacated only as to the characterization of the
intercompany leases (i.e. true leases vs. disguised financing
instruments). According to this version, the granting of rent
entitlement to South Trust would be vacated whereas the
SouthTrust's request for relief from the automatic stay would
remain denied. SouthTrust's version, on the other hand, provides
that the March 13 Order is denied in its entirety. At the end of
the hearing, counsel for SouthTrust and counsel convened in the
hall outside the courtroom and discussed whether Judge Walrath's
ruling vacated the March 13 Order in its entirety or only
applied to how the leases would be treated.

      The Court: ... I am granting the motion because, at least
on those two facts, I think I need to reevaluate my decision
based on those two facts and I think those facts were relevant
to my entire decision.

      Jim Robinson: So, should we prepare for a rehearing on all
the issues, though, that were raised?

      The Court: Yes.

      Jim Robinson: So, all the way through?

      The Court: Start all over again.

      Tim M. Lupinacci: We do need to coordinate and schedule a
hearing on that in addition to the valuation.

      The Court: Yes.

By Order dated May 18, 2001, the Court, inter alia, (1) granted
the Reconsideration Motion, (2) vacated the March 13 Opinion and
Order in its entirety, and (3) scheduled a final hearing on all
issues raised by the SouthTrust Motion for July 30, 2001 at 9:30
a.m.

In addition to the Reconsideration Motion, the Debtors also
filed a motion for an order determining the value of the
Collateral, pursuant to section 506(a) of the Bankruptcy Code
and Rule 3012 of the Bankruptcy Rules (the Valuation Motion).

On or about May 18, 2001, SouthTrust served the Debtors with a
request for the production of documents. The Debtors and
SouthTrust then agreed on a schedule for discovery and hearing
on the Valuation Motion and the SouthTrust Motion and
accordingly sought and obtained the Court's approval for it.
This schedule provides for:

     (1) Exchange of request for production of documents in
respect of the Valuation Motion and the SouthTrust Motion - on
or before June 11, 2001;

     (2) Exchange of all appraisals of the Collateral, lists of
witnesses and any other valuation evidence which the parties
intend to present at the trial on the Valuation Motion and/or
the SouthTrust Motion - on or before July 2, 2001;

     (3) Establishment of mutually agreeable schedule for the
depositions of witnesses promptly after July 2, 2001;

     (4) All deposition to take place on or before August 3, 2001
and at least 5 business days' notice to the other party;

     (5) Production and Availability for inspection of respective
responses to document requests - on or before July 11, 2001;

     (6) Exchange of exhibits to offer at trial no later than 3
days prior to the hearing on the Valuation Motion and the
SouthTrust Motions;

     (7) Final hearing on the Valuation Motion and the SouthTrust
Motion on August 10, 2001 at 9:30 a.m. absent further order of
the Court.

The Stipulation further provides that disputes relating to
discovery or issues of scheduling will be resolved, where
possible, by the parties meeting and conferring. If the parties
are unable to resolve a dispute, the Court will schedule a
conference to resolve the matter. By an Order Appointing
Mediator dated June 12, 2001, the Court orders that the dispute
between the Debtor and SouthTrust will be mediated in accordance
with the Local Rules on July 10, 2001 before Judge Erwin I.
Katz. Judge Katz subsequently issued an order regarding
Settlement Preparation for the settlement conference.

Currently, the Final hearing on the Valuation Motion and the
SouthTrust Motion will be conducted on August 10, 2001 at 9:30
a.m. absent further order of the Court. (Integrated Health
Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


JORE CORPORATION: Montana Court Fixes Aug. 31 Claims Bar Date
-------------------------------------------------------------
Jore Corporation announced that the U.S. Bankruptcy Court for
the District of Montana, in which Jore's Chapter 11 bankruptcy
case is pending, has set Aug. 31, 2001 as the "bar date", or
deadline for filing a proof of claim against the Jore bankruptcy
estate.

Copies of the Court's Order setting the Aug. 31 bar date will be
mailed to all known creditors this week. Copies of the Order are
also available from the clerk of the Bankruptcy Court in Butte,
Montana, or from Jore's bankruptcy counsel, Perkins Coie LLP, by
calling Attila Kovacs-Szabo at 206/264-6371. The Company also
announced that it will delay its annual shareholders meeting
that had earlier been rescheduled for Aug. 31, 2001. No new date
for the shareholders' meeting has been set.

On May 22, 2001, Jore filed for voluntary reorganization under
Chapter 11 of the U.S. Bankruptcy Code. On that date the Company
also announced it had restructured its board of directors and
management team.

                   About Jore Corporation

Jore Corporation designs and manufactures innovative power tool
accessories and hand tools for the do-it-yourself and
professional craftsman markets. The Company relies on advanced
technologies and advanced equipment engineering in its
manufacturing processes to drive cost reductions and higher
quality in its products. Its products save users time by
offering enhanced functionality, increased productivity and ease
of use. Jore sells its products under the licensed Stanley(R)
brand, as well as under various private labels of the industry's
largest retailers and power tool manufacturers, including Sears,
The Home Depot, Lowe's, Menard's, Canadian Tire, Tru*Serv, Black
& Decker, Makita and more.


KEYSTONE CONSOLIDATED: Plans To Defer Payments On Senior Notes
--------------------------------------------------------------
Keystone Consolidated Industries, Inc. (NYSE: KES), an
integrated wire and wire products producer, announced that it
will request a consent from holders of its 9 5/8% Senior Secured
Notes due 2007 to defer the exercise of such holders' right to
accelerate the payment of the notes pursuant the acceleration
provisions of the governing indenture.

Despite efforts to improve operating results through improved
operating efficiencies, medical cost sharing arrangements and
other initiatives, the prolonged downturn in the steel industry
continues to adversely affect Keystone's liquidity and capital
resources. Consequently, Keystone does not expect to pay the
interest on the notes due on August 1, 2001.

Under the governing indenture, a failure to make the scheduled
interest payment for thirty days will give rise to a right to
accelerate the unpaid portion of the notes. Keystone plans to
seek an agreement to defer the acceleration of the notes to
permit Keystone to explore possible restructuring alternatives
to improve its overall financial condition. Keystone has
received an agreement from its working capital lender to
forbear remedies available to it solely as a result of
Keystone's failure to make the required interest payment on the
notes.

Keystone Consolidated Industries, Inc. is headquartered in
Dallas, Texas. Keystone is a leading manufacturer and
distributor of fencing and wire products, carbon steel rod,
industrial wire, nails and construction products for the
agricultural, industrial, construction, original equipment
markets and the retail consumer. Keystone is traded on the New
York Stock Exchange under the symbol of KES.


KITTY HAWK: Exclusive Period Extended To September 30
-----------------------------------------------------
According to documents obtained by BankruptcyData.com, the U.S.
Bankruptcy Court approved Kitty Hawk, Inc.'s motion for an
extension of the exclusive period during which the Company can
file a plan of reorganization and solicit acceptances thereof
until September 30, 2001 and November 30, 2001, respectively.
(New Generation Research, July 25, 2001)


LAIDLAW INC.: Hiring Sitrick and Company as PR Consultants
----------------------------------------------------------
Laidlaw Inc. asks that Judge Kaplan approve their employment of
Sitrick And Company, Inc., as corporate communications
consultants in these chapter 11 cases, nunc pro tunc to the
Petition Date.  In particular, the Debtors anticipate that
Sitrick will:

        (a) develop and implement corporate communication
programs and related strategies and initiatives for
communications with the Laidlaw Companies' key constituencies,
including employees, unions, vendors, customers, regulators,
lenders and public debtholders, regarding the Laidlaw Companies'
operations and financial performance, and the Debtors' progress
through the chapter 11 process;

        (b) develop public relations initiatives for the Laidlaw
Companies to maintain public confidence and internal morale
during these chapter 11 cases;

        (c) prepare press releases and other public statements
for the Debtors, including statements relating to major chapter
11 events;

        (d) prepare other forms of communication to the Laidlaw
Companies' key constituencies and the media including materials
to be posted on the Laidlaw Companies' web sites; and

        (e) perform such other communications consulting services
as may be requested by the Debtors.

Under the terms of the engagement letter, and subject to the
Court's approval, Sitrick intends to charge for its professional
services on an hourly basis in accordance with its ordinary and
customary hourly rates in effect on the date the services are
rendered, and seek reimbursement of its actual and necessary
out-of-pocket expenses.  Sitrick customarily adjusts its hourly
rates annually on January 1.  The persons and their hourly rates
who will be providing services to these Debtors are:

                      Michael Sitrick             $550
                      Jeff Lloyd                  $400
                      Ann Julsen                  $395
                      Brenda Adrian               $285
                      Anita-Marie Hill            $265
                      Maya Pogoda                 $185
                      Matt Graham                 $175
                      Anne George                 $175
                      Joe Bunning                 $155
                      Nancy Peck                  $150
                      Sheri Sitrick               $150
                      Romelia Martinez            $150

The Debtors or Sitrick may terminate the engagement at any time
upon 30 days' written notice to the other.  Upon termination,
the Debtors remain obligated to pay any accrued fees and
expenses as of the effective date of the termination.  Moreover,
termination will not affect the Debtors' indemnification
obligations under the engagement letter with respect to
activities occurring prior to the termination date.

Prior to the Petition Date, in September 2000, the Debtors paid
to Sitrick a retainer of $75,000 and a refundable expense
advance of $10,000.  Additionally, in March 2001 the Debtors
paid Sitrick $90,000, causing the total retainer to be $175,000.
The retainer has been and will be applied on account of fees and
expenses incurred and to be incurred in providing services to
the Laidlaw Companies in contemplation of, and in connection
with, these chapter 11 cases and other restructuring activities.
Sitrick has applied the retainer for various amounts and dates
within the 90 days prior to the Petition Date, so that as of
that date $37,633.88 of the retainer remains unapplied.  In
addition, the Debtors have paid Sitrick $5,650.21 on January 8,
2001, $255.02 on January 30, 2001, and $1,198.29 on March 6,
2001. Accordingly, including the applied retainer, the Debtors
have paid Sitrick a total of $192,191.76 during the year
immediately preceding the Petition Date.

Michael S. Sitrick, Chairman and Chief Executive Officer of
Sitrick, avers that Sitrick is a disinterested person and
neither holds nor represents any interests adverse to the
Debtors or these chapter 11 estates.  Other than the prepetition
representation, and a statement that Sitrick may represent or
continue to represent parties with an interest in these estates,
although not in matters adverse to the Debtors or these estates,
no other disclosures are made. (Laidlaw Bankruptcy News, Issue
No. 3; Bankruptcy Creditors' Service, Inc., 609/392-0900)


LUCENT TECHNOLOGIES: S&P Places Ratings on Credit Watch Negative
----------------------------------------------------------------
Standard & Poor's placed its double-'B'-plus corporate credit
rating on Lucent Technologies Inc. and other ratings on the
company on CreditWatch with negative implications. The action
followed Lucent's announcement of its plan to take a $7 billion-
$9 billion restructuring charge in its fiscal fourth quarter,
ending Sept. 30, 2001, pending bank approval. Lucent intends
to reduce its head count by as many as 20,000 positions as it
realigns into two customer-focused divisions.

Concurrently, Lucent released its earnings for the June quarter,
announced an agreement to sell two sell its Optical Fiber
Solutions unit, and announced an agreement manufacturing
locations.

Standard & Poor's is concerned that a deteriorating business
environment has not enabled Lucent to achieve sequential revenue
growth, which has led to the current planned charge. Also, the
proceeds Lucent expects from the fiber transaction will be
materially less than had been previously anticipated,
especially since the proceeds will largely be offset by the cash
portion of the planned restructuring charge, until Lucent
realizes the benefits of this action. Based on a preliminary
assessment, a rating action may not be limited to one notch.

Murray Hill, N.J.-based Lucent anticipates that the
restructuring will allow it to achieve longer-term benefits as
it reduces its head count and terminates certain low-margin
operations in seeking to establish a stable, profitable core set
of businesses.

The planned charge is in addition to a $2.7 billion
restructuring charge taken in the March quarter, and a $1.2
billion voluntary staff-reduction program that was completed in
early July. About 19,000 employees and 5,500 contractors have
left the payroll under the two earlier programs. Management
expects those programs to reduce operating costs by more than $2
billion, with benefits largely in effect in the September
quarter and beyond. Standard & Poor's believes that the newly
planned charge, following closely on the prior actions,
indicates the extent of the pressures that Lucent faces in an
increasingly strained communications equipment market. Still,
the charge is expected to reduce operating expenses by an
additional $2 billion and yield an incremental $1 billion in
working capital as well as reduce its capital expenditures.

The company also announced that it had entered a definitive
agreement to sell its optical fiber cable business to Furukawa
Electric Co. Ltd. of Japan (BBB-pi) and Corning Inc. (A-
/Negative/A-1) for $2.75 billion, in a transaction expected to
close before the end of the calendar year. The company's
Oklahoma City, Okla., and Columbus, Ohio, manufacturing
facilities are being sold to Celestica Inc. for up to $650
million, with closing expected by the end of the current
quarter.

Lucent's revenues for the June quarter of $5.8 billion were
modestly below March revenues, although the company had earlier
expected sequential revenue gains. Lucent is rescinding revenue
guidance for the September quarter. Pro forma pretax losses were
$1.94 billion in the June quarter, compared to $2.06 billion in
the March period.

Lucent has made substantial progress toward reducing its working
capital by its targeted $3 billion as a result of the March
charge, as accounts receivable have declined by $3 billion from
the June 2000 level. Cash balances totaled $2.3 billion, and the
company had $2.3 billion outstanding in its revolving credit
agreement on June 30. The company has also paid a $750 million
debt issue as scheduled, received $435 million under a recently
closed $750 million receivables securitization program, received
$300 million proceeds from a real estate transaction, and will
eliminate its common stock dividend.

Standard & Poor's will meet with Lucent management in the near
future to review the company's operating performance and its
business prospects in light of the potential restructuring
charge.


MARINER POST-ACUTE: Moves to Reject Three Leases With Care Inns
---------------------------------------------------------------
Mariner Post-Acute Network, Inc. seeks to reject three of the
four leases between Debtor Living Centers of Texas, Inc. (LCT),
as lessor, and Care Inns, Ltd. (the landlord) relating to
Facilities which have not been very profitable historically and
have cost LCT increased operating losses during thr first six
months of fiscal year 2001.

The Facilities involved are:

(1) Care Inn of Gonzales, a 80 licensed bed skilled nursing
      facility located at Route 4, Box 145, Gonzales, Texas 78629

      - the current lease rate is $14,159.00;

      - EBITDA during the first six months of fiscal year was
        negative $88,000 and average occupancy rate was 74%;

(2) Care Inn of Plainview, a 68 licensed bed skilled nursing
      facility located at 224 Louis Street, Plainview, Texas
      79072;

      - the current monthly lease rate is $10,698.00;

      - EBITDA during the first six months of fiscal year was
        negative $188,000 and average occupancy rate was 60%;

(3) Care Inn of Waco, a 74 licensed bed skilled nursing facility
      located at 5900 Clover Lane, Waco, Texas 76710.

      - the current monthly lease rate is $11,642.00;

      - EBITDA during the first six months of fiscal year was
        negative $45,000 and average occupancy rate was 70%;

The Debtors believe that the increasing losses at the Facilities
are due in large part to:

(a) substantial increases in the cost of liability insurance for
      these facilities;

(b) the small size of the facilities and their low patient
      census;

(c) location of the Gonzales Facility in an area where there is
      a lack of potential new residents;

(d) location of the Plainview Facility near two other skilled
      nursing facilities with considerably better physical
      plants;

(e) regulatory issues of the Waco Facility.

For these reasons, LCT has made the business judgment that its
estate would not benefit from the assumption of the Leases. In
addition, in light of the relatively high rental rate under the
Leases, LCT has determined that there is no value in attempting
to assume and assign the Leases. Accordingly, LCT seeks to
reject the Leases. The Debtors believe that LCT's rejection of
the Leases will not in any way affect its right to later reject,
assume, or assume and assign the fourth lease in future.

In connection with the rejection of the Leases, LCT also asks
the Court to authorize its rejection of certain executory
contracts relating to LCT's use of the Facilities, as listed and
presented to the Court. (Mariner Bankruptcy News, Issue No. 15;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


MEDIA GENERAL: S&P Rates Corporate & Senior Debt At BB+
-------------------------------------------------------
Standard & Poor's assigned its preliminary double-'B'-plus
rating to Media General Inc.'s $600 million senior debt
securities shelf registration. In addition, a double-'B'-plus
long-term corporate credit rating was assigned to the company.
Proceeds from the sale of senior debt securities will be
used for general corporate purposes. The outlook is positive.

Richmond, Va.-headquartered Media General is a communications
company with newspaper publishing, television broadcasting, and
interactive media operations located primarily in the Southeast.
Newspaper publishing, which accounts for about 70% of revenues
and segment operating cash flow, includes 25 daily newspapers in
Virginia, North Carolina, Florida, Alabama, and South Carolina,
as well as a 20% interest in the Denver Post. Television
broadcasting consists of 26 network-affiliated stations that
reach more than 30% of the television households in the
Southeast and nearly 8% nationwide. Consolidated annual revenues
total more than $850 million.

Ratings reflect Media General's significant debt burden and
prospects for continued growth through acquisition. In addition,
the company is subject to the impact of general economic
conditions on advertising revenues and the variability of
newsprint prices. These factors are mitigated by Media
General's strong market positions, diversified mix of newspaper
and television operations, and healthy cash flow generation
after capital expenditures and dividends.

Recent results have been hurt by the impact of the weaker
economy on advertising revenues and by higher average newsprint
prices. However, aided by healthy operating cash flow margins in
the mid 20s percentage area and manageable capital expenditure
and dividend requirements, the company has historically
generated meaningful levels of discretionary cash flow. With
the sale of its cable operations in 1999, Media General had no
net debt at December 1999. Debt levels at June 2001 totaled
about $800 million and reflect two major acquisitions completed
in 2000. Debt to operating cash flow is in the high 3 times (x)
area and operating cash flow to interest is also in the high 3x
area. Standard & Poor's expects that the company will continue
to actively seek out acquisition opportunities in the Southeast
region. However, the timing and magnitude of such transactions
are uncertain.

In the interim, Media General is expected to use its
discretionary cash flow for debt reduction, rather than for
additional share repurchases, in order to build financial
flexibility for possible acquisitions. Further potential
flexibility is provided by investments and a diversified
portfolio of discrete assets.

                      Outlook: Positive

Ratings may be raised in the intermediate term if Media General
significantly strengthens its overall financial profile and is
able to maintain this position while pursuing its growth
strategy, Standard & Poor's said.


MICROLOG: Shares Knocked Off Nasdaq, Now Trades On OTCBB
--------------------------------------------------------
Microlog Corporation announced that, in a letter dated July 23,
2001, the Nasdaq Listing Qualifications Panel notified the
Company that its request for continued inclusion on The Nasdaq
SmallCap Market pursuant to an exception to the bid price and
net tangible asset/market capitalization/net income requirements
had been denied and that the panel had determined to delist the
Company's common stock from The Nasdaq SmallCap Market effective
July 24, 2001.

Nasdaq stated that the Company may appeal this decision in
writing within 15 days of the notification, but the Company has
determined that it will not file an appeal. The Company's common
stock is now quoted and traded on the OTC Bulletin Board.

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

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

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


ON SEMICONDUCTOR: Talking To Lenders About Debt Restructuring
-------------------------------------------------------------
ON Semiconductor Corp. (Nasdaq: ONNN) Wednesday announced
that total product revenues in the second quarter of 2001 were
$307.3 million, a decrease of 14 percent from the first quarter
of 2001 and a decrease of 38 percent compared to the second
quarter of 2000.

Excluding amortization of intangibles, restructuring and other
non-recurring charges, the company had a net loss of $61.9
million, or ($0.36) per diluted share, in the second quarter of
2001 compared to net income of $24.2 million, or ($0.13) per
diluted share, in the second quarter of 2000.

Including amortization of intangibles, restructuring and other
non-recurring charges, the company reported a net loss of $152.2
million, or ($0.88) per diluted share, in the second quarter of
2001 compared to a net loss of $12.7 million, or ($0.09) per
diluted share, in the second quarter of 2000.

The loss per share in the second quarter of 2001 includes a tax
reserve of $0.15 per share against the benefit of the net
operating loss incurred during the quarter.

Product revenues for the first six months of 2001 were $664.3
million, a decrease of 27 percent compared to the first six
months of 2000.

Excluding amortization of intangibles, restructuring charges,
cumulative effect of an accounting change and other non-
recurring charges, the company had a net loss of $74.6 million,
or ($0.43) per diluted share, in the first six months of 2001
compared to net income of $35.1 million, or ($0.17) per diluted
share, in the first six months of 2000.

Including amortization of intangibles, restructuring charges,
cumulative effect of an accounting change and other non-
recurring charges, the company had a net loss of $311.6 million,
or ($1.80) per diluted share, in the first six months of 2001
compared to a net loss of $4.8 million, or ($0.09) per diluted
share, in the first six months of 2000.

The company incurred restructuring and other charges of $95.8
million, or $84.7 million on an after-tax basis, in the second
quarter of 2001 associated with worldwide workforce reductions
and asset impairment charges as a result of accelerating cost
reduction efforts.

The three principal elements of the restructuring are the
acceleration of a five-year manufacturing restructure plan into
a two-year plan, right sizing selling, general and
administrative operations, and aggressively focusing on
liquidity. These restructuring efforts were initiated in June
2001 and are expected to generate $300 million of annualized
cost savings by the end of 2002.

Key elements of the manufacturing restructure are

     (1) phasing out operations in Guadalajara, Mexico moving to
         Seremban, Malaysia,

     (2) transferring the 4-inch wafer line in Aizu, Japan to the
         6-inch wafer line at the same facility, and

     (3) consolidating backend operations from ISMF in Seremban,
         Malaysia to Leshan, China.

These restructuring actions will cause the reduction of more
than 3,000 employees worldwide over the next year or so. The
first phase of these reductions was announced in June with a
substantial portion already completed.

In the second quarter of 2001, overall gross margin was
18 percent, down six percentage points from the first quarter of
2001 primarily due to declining prices partially offset by on-
going cost reductions. Operating expenses continued to be
managed closely.

Selling, general and administrative expenses were reduced by
36 percent from the same period last year and by 10 percent from
the first quarter 2001.

Earnings before interest, taxes, depreciation and amortization,
in the second quarter of 2001, excluding minority interests,
restructuring and other charges were $16.2 million, compared to
$114.3 million in the second quarter of 2000.

The company was not in compliance with certain financial
covenants under its senior credit facilities at June 29, 2001,
but is in discussions with its lenders regarding appropriate
amendments to those facilities.

The company believes an agreement will be reached with respect
to the terms of such amendments and that it has adequate
liquidity to meet its anticipated cash needs for the foreseeable
future.

"The actions we have taken will protect our core competencies,
maintain focus on R&D, enhance customer service, accelerate
decision making and align our cost structure to be more
competitive," said Steve Hanson, president and chief executive
officer. "We reiterate our outlook that third quarter revenues
are expected to be down from the second quarter.

"We anticipate that the third quarter will be the trough of our
cycle as customer inventory levels align more with end market
demand."

                    About ON Semiconductor

ON Semiconductor is a global supplier of high-performance
broadband and power management integrated circuits and standard
semiconductors used in numerous advanced devices ranging from
high-speed fiber optic networking equipment to the precise power
management functions found in today's advanced portable
electronics.

For more information visit ON Semiconductor's Web site at
http://www.onsemi.com


OWENS CORNING: Employs PwC as Financial & Tax Advisor
-----------------------------------------------------
Owens Corning and its subsidiary Debtors ask Judge Fitzgerald to
approve and authorize their employment of PricewaterhouseCoopers
LLP, as special financial and tax advisor for the Debtors nunc
pro tunc to January 1, 2001.  PwC's services are required in
connection with the Debtors' businesses and these chapter 11
estates.  The Debtors contemplate that PwC will render special
financial and tax advisory services in these jointly
administered cases as:

        (a) performing actuarial, financial reporting and
consulting services with respect to the Debtors' employee
benefit plans;

        (b) rendering tax services related to the IRS audit and
corporate tax matters;

        (c) government agency reporting, testing, filing and
approval seeking services with respect to the tax qualified
employee benefit plans; and

        (d) performing all other special financial and tax avisor
services that may be necessary or appropriate in connection with
the Debtors' businesses and these chapter 11 cases.

PwC has performed theses special financial and tax advisory
services for the Debtors for the prior 10 years. The Debtors
tell Judge Fitzgerald that the tax issues in these cases are
complex, and the costs involved in obtaining a professional
unfamiliar with the Debtors and their businesses is prohibitive.
Additionally, Arthur Andersen LLP, the Debtors' general
accountant, has historically never rendered tax services to the
Debtors of the type contemplated by this Application.

The Debtors assure Judge Fitzgerald that the Debtors' other
professionals, and PwC will continue to work together to ensure
that the services requested of and rendered by PwC do not
duplicate the accounting services being rendered by Arthur
Andersen LLP, Lazard Freres & Co. LLC, the investment banker
whose services focus on general financial and valuation issues
of the Debtors, or Ernst & Young LLP and Cap Gemini Ernst &
Young US LLC, whose services focus on a specific project to
review current processes related to inter-company transactions
between the various company business units and legal entities.

Prior to the Petition Date, PwC also provided asbestos-related
lobbyist services to the Debtors, and has continued to provide
lobbyist services to the Debtors after the Petition Date.
However, a lobbyist is not a professional as that term is used
in the Bankruptcy Code.  Therefore, the Debtors advise they
intend to continue to utilize the lobbyist services provided by
PwC and intend to pay PwC for the lobbyist services without
seeking judicial review and approval under the Bankruptcy Code.

The Debtors request that all professional fees and related costs
incurred by the Debtors on account of services rendered by PwC
in these jointly administered cases be paid as administrative
expenses of their estates in accordance with Judge Fitzgerald's
prior Agreed Amended Administrative Compensation Order.

Subject to the Court's approval, PwC will change the Debtors for
its financial and tax services on an hourly basis, billed in
tenths of hours, in accordance with its ordinary and customary
hourly rates in effect on the date that such services are
rendered.  The current hourly rates charged by PwC for
professionals and paraprofessionals employed in its offices are:

      Position                                     Range
      --------                                     -----
      Partners and principals                      $630-698
      Senior managers and managers                 $420-560
      Staff and senior associates                  $178-345
      Support/administrative staff                 $ 89- 98

The names, positions, and current hourly rates of the PwC
professionals presently expected to have primary responsibility
for providing services to the Debtors are:

        James P. Hickey        Partner          $698
        Kenneth J. Kies        Partner          $698
        Steen M. Rabinowitz    Partner          $698

PwC was previously retained by the Debtors as a professional
used in the ordinary course of business as of the Petition Date.
Under the Ordinary Course Professional Order, PwC has received
$231,224 since the Petition Date.  Under the ordinary course
order, payments made to ordinary course professionals are
subject to the approval of this Court if payments to such
professionals exceed certain amounts.  In PwC's case, the amount
is an average of $35,000 per month.  As the payments
demonstrate, PwC has exceeded the average of $35,000 per month
since January 1, 2001.  This is an additional reason the Debtors
seek to employ and retain PwC effective as of January 1, 2001.

At the Debtors' request, PwC commenced performing essential and
time-critical financial and tax services since the Petition
Date, under the Agreed Administrative Order, and exceeded the
administrative cap in the month of January, 2001.  The delay in
filing this application to retain PwC was the result of the
intense time demands related to the biy proceedings and other
adversary proceedings.  Because PwC has been providing services
to the Debtors since the Petition Date, and exceeded the
administrative cap in January 2001, the Debtors ask Judge
Fitzgerald to approve its retention effective of as January 1,
2001, in order for PwC to be compensated for the work the firm
has performed for the Debtors prior to the submission of this
application.

The Debtors submit that these circumstances are of a nature
warranting retroactive approval. Mr. James P. Hickey declares
that PwC is a disinterested party and neither holds nor
represents any interest adverse to the Debtors or these estates
in the matters for which employment approval is sought. However,
in the interests of full disclosure, Mr. Hickey advises that
PwC held a $265,194 general unsecured claim against the Debtors
relating to tax consulting services provided prior to the
Petition Date; however, PwC has agreed to waive this claim if it
is retained. During the 90-day period prior to the Petition
Date, PwC received $876,623 in payments from the Debtors. (Owens
Corning Bankruptcy News, Issue No. 13; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


PACIFIC GAS: Has Until October 5 to Assume and Reject Leases
------------------------------------------------------------
Judge Montali granted the Pacific Gas and Electric Company's
Motion as to all non-objectors, extending the deadline within
which PG&E must decide whether to assume, assume and assign, or
reject to October 5, 2001. Judge Montali believes a date certain
is better than an open-ended extension and by October it will be
clearer in what direction this chapter 11 case is going.

With respect to PG&E's lease with Regency Centers, L.P., in the
Strawflower Village Center in Half Moon Bay, California, Judge
Montali directed that the Debtor will not be allowed to permit
the shopping center store go dark during the Holiday Selling
Season. Either the Debtor will make its decision and file a
disposition motion about the Regency Lease by August 31, 2001,
or it will have to wait until December 31, 2001, to close the
store and file a motion to reject the lease. (Pacific Gas
Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


PRYOR/ETRAIN: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Lead Debtor: Pryor/Etrain Holdings, L.L.C.
              9757 Metcalf Avenue
              Shawnee Mission , KS 66212

Debtor affiliates filing separate chapter 11 petitions:

              Pryor Holdings, Inc.
              Pryor Resources, Inc.
              Pryor Training Services, Inc.
              Specialty Consultants, Inc.
              Specialty Consultants Kansas, Inc.
              ETrain, L.P.
              Pryor Financing

Chapter 11 Petition Date: July 25, 2001

Court: District of Delaware

Bankruptcy Case Nos.: 01-2500 through 01-2507

Debtors' Counsel: Laura Davis Jones, Esq.
                   Pachulski, Stang, Ziehl, et al
                   P.O. Box 8705
                   Wilmington, DE 19899-8705
                   (302) 652-4100

Consolidated List Of Debtors' 20 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
R.R. Donnelley, Inc.          Trade Debt            $3,727,197
PO Box 730216
Dallas, TX 75373-0216
Larry Durrant
77 Wacker Drive
Chicago, IL 60601
(312) 326-8609

Ernst & Young LLP             Trade Debt             $948,677
Steven Clifford
One Kansas City Place
1200 Main Street
Kansas City, MO 64105-2143
(816) 480-5388

Direct Media                  Trade Debt             $851,142
Rocl Sarli
200 Pemberwick Road
PO Box 4565
Greenwich, CT 06831
(203) 532-1000

Thayer Capital Partners       Trade Debt             $807,053
Chris Temple
1455 Pennsylvania Avenue
NW, Suite 350
Washington, DC 2004
(202) 312-5325

US Postmaster                 Trade Debt             $554,000
Michael Slavik
1905 Old Philadelphia Pike
Lancaster, PA 17602-9991

Donnelley Marketing           Trade Debt             $462,865
Kaler Bole
9393 W. 110th Street
Shawnee Mission, KS
(913) 327-1862

American Express              Trade Debt             $378,048
300 South Riverside Plaza
Chicago, IL 60606
Linda Bailey
12757 Benson
Overland Park, KS 66213
(913) 685-8115

Edith Roman Associates,       Trade Debt             $279,774
Inc.
Tito DiFlippo
One Blue Hill Plaza, 16th Fl.
PO Box 1556
Pearl River, NY 10965-8536
(800) 223-2194 x 150

Bryan Cave LLP                Trade Debt             $273,475

RTC Direct Mailing            Trade Debt             $227,640

West Telemarketing            Trade Debt             $220,127

Donnelley Logistics           Trade Debt             $205,558
Services

Nightingale-Conant            Trade Debt             $182,175
Corporation

Account Receivable            Trade Debt             $145,100
Options

Contact Telephony             Trade Debt             $110,429

Metcalf South Shopping        Trade Debt             $109,774
Center

Kelly Services                Trade Debt              $81,060

L&J Sharp Graphics            Trade Debt              $70,783

Smartforce                    Trade Debt              $65,000

FedEx Ground, Inc.            Trade Debt              $63,113


PSINET, INC.: Retains Staubach Company as Real Estate Brokers
-------------------------------------------------------------
PSINet, Inc. sought and obtained the Court's authority to employ
and retain The Staubach Company - Northeast, Inc. as their real
estate brokers and consultants to perform real estate services
with respect to:

(1) Disposition of the Debtors' Austin Property, Ashburn
Property and Ashburn Parcels; and

(2) Real Estate Lease Administration Services as to those real
property leases for which the Debtors request such services
from Staubach.

Currently, Staubach performs Lease Administration Services for
35 of the Debtors' real property leases, and will perform such
services for additional leases at the request of the Debtors.
Notwithstanding any prior ageement between Staubach and the
Debtors, Staubach will provide Lease Administration Services
only as to those real property leases for which the Debtors
request the provision of Lease Administration Services from
Staubach.

At the request of the Debtors, and upon the separate approval of
the Court, Staubach may provide further services for the benefit
of the Debtors and their estates.

The Debtors tell Judger Gerber that one of Staubach's Vice
Presidents has served as their real estate broker since 1991 and
Staubach is intimately familiar with their real estate holdings.
The Debtors also represent that, based on the affidavit of
Staubach's President, Gregory O'Brien, Staubach is a
"disinterested person" under section 101(4) of the Bankruptcy
Code, as such term is modified by Section 1107(b) of the
Bankruptcy Code. Staubach convenants to conduct an ongoing
review of its files to ensure that no conflicts or other
disqualifying circumstances exist or arise and to supplement is
disclosure to the Court if any new facts or circumstances are
discovered.

                      Commission and Fees

(A) Commission upon the Sale of Real Estate

Commission received by Staubach upon the sale of real estate
owned by the Debtors is subject to the following rebate
schedule:

      Net Commission/Transaction   Staubach Share   PSINet Share
      --------------------------   --------------   ------------
           $0-$49,999                   100%             0%
           $50,000 - $499,999            75%            25%
           $500,000 - $999,999           70%            30%
           $1,000,000+                   65%            35%

In connection with the sale of the Austin Property for a
purchase price of $7 million, Staubach will receive 3% of the
purchase price, or $210,000. According to the Commission
Rebate Schedule, PSINet will receive a $40,000 rebate, leaving
Staubach with $170,000 as its final payment for brokering and
consulting services.

If Staubach successfully brokers the sale of the Ashburn
Property, it will receive a commission equal to 2% of the
purchase price, less a rebate to be determined according to
the Commission Rebate Schedule. Staubach anticipates the
Ashburn Parcels most likely will be sold to the Purchaser of
the Ashburn Property as part of a single transaction. In that
event, Staubach would receive a single commission from the
Debtors, based on the aggregate purchase price, the 2%
commission rate, and the Commission Rebate Schedule. Of one or
more of the Ashburn Parcels were sold in one or more aggregate
transactions, Staubach would receive a separate commission
upon the completion of each such transaction, based on the
purchase price received for the Parcel(s) sold, the 2%
commission rate and the Commission Rebate Schedule.

(B) Fees for Lease Administration Services

     Annual Maintenance Fee - $2250 per calendar year
     Monthly Fee - $100 per lease per month

Prior to the petition date, Staubach received all of its fees
relating to pre-petition brokerage and Lease Administration
Services.

In March 2001, the Debtors agreed to forego payment of $83,170
due to them under the Commission Rebate Schedule, leaving the
amount on account with Staubach as a prepayment for future
Lease Administration Services provided to the Debtors. As part
of the application, any portion of the prepayment not used to
compensate Staubach for services performed before the Petition
Date will be applied to charges for Lease Administration
Services performed after the petition date. As of the date of
the application, $19,455.00 of the perpayment remained on
account with Staubach and Staubach will seek fees for Lease
Administration Services directly from the Debtors only when
such fees have exhausted the prepayment.

Compensation payable to Staubach by the Debtors in the chapter
11 cases will be subject to ultimate court approval in
accordance with sections 330 and 331 of the Bankruptcy Code,
the Bankruptcy Rules and the Local Rules of the Bankruptcy
Court for the Southern District of New York and the orders of
this Court.

Judge Gerber makes it clear that pursuant to the current
application, approval granted for the Debtors to pay a
commission to Staubach for disposition of real property
applies only to the Austin Property, the Ashburn Property and
the Ashburn Parcels. If the Debtors want authority to pay
Staubach a commission for dispostion of other property, they
have to file with the Court a separate application identifying
the amount of commission to the paid (if the purchase price of
the property has been determined), or the formula for
determining such amount (if the purchase price of the property
has not been determined). (PSINet Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


STELLEX TECHNOLOGIES: Plan Confirmation Hearing Set For Aug. 21
---------------------------------------------------------------
Stellex Technologies, Inc. announced the U.S. Bankruptcy Court
for the District of Delaware has approved its Disclosure
Statement relating to its Amended Consolidated Plan of
Reorganization.  The Plan of Reorganization has now been
distributed for a vote of Stellex's creditors.  Stellex's senior
lenders and the Committee of Unsecured Creditors support the
Plan of Reorganization.

On April 20, 2001, Stellex had announced it intended to propose
a "stand-alone" plan of reorganization under which Stellex would
be owned by its creditors.  The Plan, voting on which will be
complete August 14, would achieve that goal.  The Bankruptcy
Court has scheduled a hearing on confirmation, or approval, of
the Plan for August 21.  If the Plan is approved on that date,
Stellex anticipates it will emerge from Chapter 11 in early
September.

P. Roger Byer, Chief Financial Officer of Stellex, stated, "This
is another important step in continuing to advance Stellex
through the process that would allow the Company to reorganize
and exit from bankruptcy.  The Company and its major creditors
remain confident that this process can be completed by early
September."

Stellex is a leading provider of highly engineered subsystems
and components for the aerospace and defense industries and
operates through its subsidiary Stellex Aerostructures.  Stellex
Aerostructures is comprised of three subsidiaries, Stellex
Monitor, Stellex Precision and Stellex Aerospace. Stellex
Aerospace includes Bandy Machining, Paragon Precision,
SEAL Laboratories and General Inspection Laboratories and is
involved primarily in the precision machining of turbomachinery
components, aircraft hinges and other structural components for
the aerospace and space industries.  Monitor and Precision are
leaders in the manufacturing of large complex machined parts and
structural sub-assembly components for the aerospace industry.


UNITED SHIPPING: Receives Nasdaq's Delisting Notice
---------------------------------------------------
United Shipping & Technology, Inc. (US&T, Nasdaq:USHP) received
a Nasdaq Staff Determination on July 24, 2001, indicating that
the Company fails to comply with the marketplace capitalization
requirements for continued listing set forth in Marketplace Rule
4310(c)(2)(B)(ii), and that its securities are, therefore,
subject to delisting from the Nasdaq SmallCap Market. The
Company will have a hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination and the
Company believes that, with the conversion of its outstanding
convertible subscription agreements, it can establish compliance
with the required Nasdaq Marketplace Rules.


USG: Court Grants Motion For Postpetition Vendor Comfort Order
--------------------------------------------------------------
At USG Corporation's behest, Judge Farnan issued an order,
pursuant to 11 U.S.C. Secs. 105, 363 and 503, confirming that
administrative priority is accorded to all of the Debtors'
undisputed obligations to suppliers for the postpetition
delivery of goods and provision of services and authorizing the
Debtors to pay such expenses in the ordinary course of their
businesses.

The Debtors explain that numerous service providers and
suppliers provide good and services to the Debtors.  The Debtors
also claim they have outstanding prepetition purchase orders to
many suppliers for a wide variety of raw materials and supplies.
Those supplies and raw materials are needed to create finished
products for customers and keep up with current production
schedules.

The Debtors worry that, due to the chapter 11 cases, their
suppliers that they will be dealt with as prepetition general
unsecured creditors for costs of any invoiced shipments or
services provided postpetition. The suppliers may refuse further
services, raw materials and goods that are essential to the
Debtors' unless provided with postpetition purchase orders or
other payment assurance.

Substituting any form of purchase order would be troublesome and
inconvenient to the Debtors and therefore counter to the goal of
the Debtors' reorganization efforts. It could lead to delays in
receipt of essential goods and services and interfere with the
Debtors' ability to fulfill customer obligations.

The Debtors request an order confirming the Debtors' commitment
to the Suppliers arising from

     (i) shipments of goods delivered to and accepted by the
Debtors after the petition date and

     (ii) the provision of services to the Debtors after the
petition date at the Debtors' request will be entitled to
administrative expense priority status under section
503(b)(1)(A) of the Bankruptcy Code.

The Debtors go on to say the requested relief will help them
maintain an uninterrupted supply of high quality raw materials
and supplies and continue operations without interruption and
keep their customer commitments. The Debtors state all they
request for relief is consistent with provisions of the
Bankruptcy Code. They wish to provide adequate assurance of
payment to their Suppliers and keep materials coming in. In
order to assure their Suppliers of their intent, the Debtors
seek the authority, pursuant to section 363(b) of the Bankruptcy
Code to pay their undisputed obligations that result from the
postpetition delivery of accepted goods and the postpetition
provision of services to the Debtors in the ordinary course of
business. (USG Bankruptcy News, Issue No. 4; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


USG CORPORATION: Posts $13 Million Net Loss in Second Quarter
-------------------------------------------------------------
USG Corporation (NYSE: USG) reported second quarter 2001 net
sales of $806 million, a decrease of 19 percent vs. the second
quarter of 2000. The company also reported a net loss of $13
million, or $0.29 per share, primarily due to lower realized
prices for Sheetrock(R) brand gypsum wallboard and high energy
costs.

"We faced very difficult operating conditions this quarter,
including an oversupplied market for gypsum wallboard, where
prices fell to the lowest level in nearly a decade, and high
energy prices," said Chairman, President and CEO William C.
Foote. "Nonetheless, our businesses are market leaders and
operationally they are performing well despite the challenging
market conditions. They have remained focused on serving their
customers, resulting in a bigger share of the market and record
shipments in many product categories, while becoming more
efficient by reducing costs and capital expenditures."

Net sales for the first six months of 2001 were $1,632 million
versus net sales of $1,984 million for the same period in 2000.
The company reported a net loss of $2 million for the first six
months compared with net earnings of $199 million for the same
period last year. The loss per share for the first six months of
2001 was $0.04 compared to earnings per share of $4.19 for the
first six months of 2000.

As reported, USG and its principal domestic subsidiaries filed
voluntary petitions for reorganization under Chapter 11 of the
U.S. Bankruptcy Code in Delaware on June 25, 2001. This action
was taken to manage the growing asbestos litigation costs of
U.S. Gypsum and to resolve asbestos claims in a fair and
equitable manner. Foote stated, "It is early in the
reorganization process and so far it is proceeding smoothly.
Most importantly, it has not affected our ability to serve our
customers."

                     North American Gypsum

USG's North American gypsum business recorded net sales of $458
million in the quarter, a decrease of 26 percent compared to the
second quarter of 2000. For the current quarter, it had an
operating loss of $20 million. The results reflected a lower
average realized price for Sheetrock brand gypsum wallboard
and higher production costs in the U.S. and Canada.

U.S. Gypsum reported second quarter 2001 net sales of $420
million and an operating loss of $32 million. These results
compared unfavorably with net sales of $567 million and an
operating profit of $114 million in last year's second quarter.
Last year's second quarter operating profit included a charge
of $28 million for asbestos costs while there was no charge for
asbestos in the current quarter. Profitability declined
primarily due to a lower average realized price for the
company's Sheetrock brand gypsum wallboard and higher production
costs. The decline in price alone reduced operating profit by
approximately $180 million vs. the second quarter last year.

U.S. Gypsum's nationwide average realized price of wallboard was
$72.42 per thousand square feet during the second quarter, 50
percent lower than a year ago. Compared to the first quarter
this year, pricing fell $19.89, or 22 percent. Pricing declined
throughout the second quarter and averaged about $68 per
thousand square feet in June. Prices have declined for six
consecutive quarters amid excess supply conditions in the U.S.
wallboard market caused by a drop in industry demand and a
significant expansion of industry capacity. Due to a recent
improvement in market conditions caused by seasonally strong
demand and industry capacity closures, the company implemented a
15 percent price increase on its Sheetrock brand gypsum
wallboard products effective July 16.

U.S. Gypsum shipped 2.5 billion square feet during the second
quarter, a record for any quarter and an increase of 6 percent
compared to the second quarter of 2000. This enabled U.S.
Gypsum's wallboard plants to operate at 88 percent of capacity
during the second quarter. The company estimates that the
industry as a whole operated at 80 percent of capacity during
the quarter.

Production costs for wallboard remained higher than the second
quarter last year, but declined about $5 per thousand square
feet compared to the first quarter this year. Natural gas
prices, which were rising throughout 2000, peaked in January
this year, but remained above the levels of a year ago.

The gypsum division of Canada-based CGC Inc. reported second
quarter 2001 net sales of $49 million and operating profit of $5
million, decreases of 13 percent and 44 percent, respectively,
compared with the same quarter of 2000. The decline in sales and
profitability were primarily due to a lower Canadian dollar
exchange rate, lower selling prices for Sheetrock brand
gypsum wallboard and higher production costs caused by higher
energy prices.

                    Worldwide Ceilings

USG's worldwide ceilings business reported second quarter 2001
net sales of $170 million, down 3 percent vs. the second quarter
of 2000. Operating profit of $9 million was 50 percent lower
compared with the second quarter of last year. The lower profit
was principally due to higher costs in the U.S., primarily
energy and raw material prices, and a slowdown in demand
internationally.

USG's domestic ceilings business, USG Interiors, had an
operating profit of $10 million, vs. $17 million in the second
quarter of 2000. Operating profit for the ceilings division of
CGC Inc. was $1 million, unchanged vs. the second quarter of
last year. USG International reported an operating loss of $2
million compared to a breakeven performance during the second
quarter of last year.

                Building Products Distribution

L&W Supply, USG's building products distribution business,
reported second quarter 2001 net sales of $287 million and
operating profit of $22 million. Sales and operating profit
declined 22 percent and 21 percent, respectively,
compared to the same quarter in 2000.

L&W's results reflect lower wallboard prices compared to last
year, as well as a 2 percent decline in shipments. L&W added a
new facility in North Carolina during the quarter while closing
two locations in Texas and one in Louisiana. It now operates 190
locations in the U.S., distributing a variety of gypsum,
ceilings and related building materials.

                 Other Consolidated Information

Second quarter 2001 selling and administrative expenses
decreased $14 million, or 18 percent, year-over-year,
principally due to lower compensation and benefits costs.
However, selling and administrative expenses as a percent of net
sales increased to 8.1 percent from 7.9 percent a year ago,
primarily due to the 19 percent drop in sales.

Capital expenditures for the second quarter and first six months
of 2001 were $28 million and $57 million, respectively. These
levels were about 75 percent below the spending for the same
periods last year and reflect the completion of a strategic
investment program. Capital expenditures are expected to be
below $150 million in 2001, compared to expenditures of $380
million for all of 2000.

In the Chapter 11 reorganization of USG and its principal
domestic operating subsidiaries, filed on June 25, the
bankruptcy court has approved "first-day" orders that allowed,
among other things, payment of pre-petition and post-petition
employee wages, salaries and benefits. The court also approved
an initial $17.5 million of critical vendor payments,
representing one-half of a $35 million request, and $150 million
of interim debtor-in-possession (DIP) financing. The company has
received a commitment for up to $350 million in DIP financing
from JP Morgan Securities Limited and expects a final hearing on
the DIP agreement on July 31, 2001. In addition, creditor
committees were formed representing general unsecured creditors,
asbestos personal injury claimants and asbestos property damage
claimants. Expenses associated with USG's Chapter 11
reorganization totaled $10 million during the second quarter,
including $2 million due to accelerated amortization of debt
issuance costs.

As of June 30, 2001, the Corporation is required to follow
Statement of Position 90-7 ("SOP 90-7"), "Financial Reporting by
Entities in Reorganization under the Bankruptcy Code." Pursuant
to SOP 90-7, the Corporation's pre-petition liabilities that are
subject to compromise are reported separately on the
consolidated balance sheet.

USG Corporation is a Fortune 500 company with subsidiaries that
are market leaders in their key product groups: gypsum
wallboard, joint compound, cement board and related gypsum
products; ceiling tile and grid; and building products
distribution. For more information about USG Corporation,
visit the USG home page at http://www.usg.com


VIASOURCE COMMUNICATIONS: Shares Subject To Nasdaq Delisting
------------------------------------------------------------
Viasource Communications, Inc. (Nasdaq: VVVV), a leading,
nationwide enabler of broadband technologies to residential and
commercial customers, has received a notice from the Listing
Qualifications unit of the Nasdaq Stock Market that its common
stock is subject to delisting, pending the outcome of the
hearing described below.

The delisting determination was based on the failure of
Viasource's common stock to maintain a $1.00 minimum bid price
as required under Nasdaq Rule 4450(a)(5). Viasource intends to
request an oral hearing before the Nasdaq Listing Qualifications
Panel to appeal this decision and seek continued listing. When
Nasdaq receives the hearing request, the delisting of the common
stock will be automatically stayed pending the outcome of the
hearing. The common stock of Viasource will continue to trade on
the Nasdaq National Market under the symbol "VVVV," pending the
outcome of these proceedings.

While there can be no assurance that the Listing Qualifications
Panel will grant Viasource's request for continued listing,
Viasource is actively pursuing measures to regain compliance
with the minimum bid price requirement. Specifically, as
previously disclosed, Viasource is reviewing restructuring
alternatives and is actively engaged in debt and equity capital
raising efforts.

"This action from Nasdaq is not surprising, given market
conditions," said Craig A. Russey, Viasource's President and
CEO. "We are prepared to appeal the decision through the proper
channels at the Nasdaq Stock Market. I believe that we will
present a compelling case to the Listing Qualifications
Panel when our appeal is heard."

                         About Viasource

Viasource -- http://www.viasource.net-- is a leading
independent enabler of advanced broadband and other wired and
wireless communications technologies to residential and
commercial customers in the United States. The company provides
outsourced installation, fulfillment, maintenance and support
services to leading cable operators, direct broadcast satellite
operators and other broadband Internet access providers,
including DSL and fixed wireless companies. The Company also
provides network integration and installation services to a
variety of other companies. The Company's services are focused
on the "last mile," defined as the segment of communications
that connects the residence or commercial customer. The Company
is the only provider of these services with a nationwide
footprint, currently employing over 2,300 highly trained
technicians located in over 180 offices in 44 states.


VIASYSTEMS INC.: S&P Puts Low-B Ratings On CreditWatch Negative
---------------------------------------------------------------
Standard & Poor's placed its Viasystems Inc. single-'B'-plus
corporate credit and senior secured bank loan ratings and its
single-'B'-minus subordinated debt rating on CreditWatch with
negative implications. The CreditWatch placement is due to
lagging operating performance, exposure to the deteriorating
sales in the communications equipment end markets, and
the likelihood of significantly weaker credit measures in the
near term.

Viasystems posted an operating loss for its second quarter,
ended June 30, 2001, and will take a $105.5 million
restructuring charge to close or restructure certain North
American manufacturing plants. In addition, the company will
take a $49.3 million of inventory write-down. Demand is
expected to remain weak in Viasystems' core communications
equipment end markets that account for more than half of sales.
The company also increased debt levels with the placement of a
$100 million senior unsecured note with Hicks, Muse, Tate &
Furst affiliated investment funds. The note matures in 2007 and
accrues noncash, payment-in-kind interest at 14% payable at
maturity.

Increased debt levels and weak operating performance will result
in weaker credit measures in the near term. Standard & Poor's
will meet with management to assess plans to improve operating
performance and likely financial profile in the intermediate
term.


WESTERN DIGITAL: Reports Q4 & Fiscal Year-End Losses
----------------------------------------------------
Western Digital Corp. (NYSE: WDC) reported fourth quarter
revenues of $456.0 million and a net loss of $9.0 million, or
$.05 per share, before nonrecurring items. The results include
an operating profit of approximately $2.8 million and unit
shipments of 5.3 million by the Company's hard drive business.
Including nonrecurring charges of $52.2 million, the total net
loss for the fourth quarter was $61.2 million, or $.34 per
share.

The nonrecurring charges recorded in the fourth quarter result
from adjustments to the carrying values of equity investments in
and notes receivable from Komag Inc., and accrual of Komag
contingent guarantees, all of which originally arose when
Western Digital sold its disk media business to Komag in April
1999. The decision to take these charges was prompted by
Komag's previous announcement that it did not pay its senior
debt or the interest on its convertible bonds due June 30 and
July 15, 2001, respectively.

In the year-ago period, Western Digital reported revenues of
$473.9 million and a net loss before nonrecurring items of $26.3
million, or $.19 per share. Including nonrecurring benefits for
tax and other accrual adjustments of $30.5 million, the Company
reported net income of $4.2 million, or $.03 per share.

Matt Massengill, president and chief executive officer of
Western Digital, said: "The fourth quarter reflected continued
execution in our core hard drive business, culminating a 12-
month positive swing in operating profit of nearly $190 million,
with a near break-even operating performance for the fiscal
year. We demonstrated continued leadership in the high
performance 7200 RPM segment -- which accounted for 58 percent
of our quarterly revenue -- and we maintained our relentless
focus on low-cost leadership and expense management. We also
delivered on our commitment to reduce losses from our new-
venture activities, which declined to $11.5 million from $15.0
million in the March quarter. Faced with soft PC demand in the
fourth fiscal quarter, we adjusted our build plan downward to
avoid contributing to excess supply in the industry, affecting
our revenue and unit volumes.

"Based on our flexible manufacturing model, we are positioned to
weather the current PC environment and quickly respond to and
participate in the eventual recovery in PC growth," said
Massengill. "We remain excited about the prospects for
incremental growth in the new applications of personal storage
such as video game systems and personal video recorders. This
quarter, we will begin volume production deliveries of WD hard
drives to Microsoft for its new Xbox video game system."

For fiscal year 2001, the Company reported revenues of $1.95
billion and a net loss before nonrecurring items of $67.4
million, or $.40 per share. Including nonrecurring charges and
extraordinary gains from bond redemptions, the total net loss
for fiscal 2001 was $98.9 million, or $.59 per share. For fiscal
year 2000, the Company reported revenues of $1.96 billion and a
net loss before nonrecurring items of $241.8 million, or $1.97
per share. Including nonrecurring items and extraordinary gains,
the total net loss was $188.0 million, or $1.53 per share.

During the fourth quarter, the Company adopted the provisions of
SEC Staff Accounting Bulletin No. 101 ("SAB101"). As a result,
revenues for the quarter and year ended June 29, 2001 were
increased by $19.5 million and $13.1 million, respectively, and
the operating loss for the quarter and year ended June 29, 2001
were reduced by $2.5 million, or $.01 per share, and $1.1
million, or $.01 per share, respectively. The adjustments made
to implement SAB101 in the current quarter and restate prior
quarters accordingly, reflect the deferral of revenue for
quarter-end sales made to the Company's channel customers under
certain shipping terms.

                 About Western Digital

Western Digital, one of the storage industry's pioneers and
long-time leaders, provides products and services for people and
organizations that collect, manage and use digital information.
The Company's core business produces reliable, high-performance
hard drives that keep users' data close-at-hand and secure from
loss.

Applying its data storage core competencies to emerging markets,
Western Digital's new ventures meet the increasing demand for
innovative information management solutions arising from the
proliferation of the Internet and broadband services. Keen
Personal Media helps cable TV MSOs build their brand and revenue
by providing personal video recording technology and services.
Connex designs Network Attached Storage products that enable IT
managers to quickly expand network storage. SANavigator develops
and markets software that simplifies the central management of
Storage Area Networks. SageTree is a software company providing
enterprise manufacturing and supply chain analytic applications.

Western Digital was founded in 1970. The Company's storage
products are marketed to leading systems manufacturers and
selected resellers under the Western Digital brand name. Visit
the Investor section of the Company's Web site at
http://www.westerndigital.comto access a variety of financial
and investor information.


W.R. GRACE: Engages Kinsella Communications as Noticing Advisor
---------------------------------------------------------------
W.R. Grace & Co. needs to provide notice of the deadline by
which proofs of claim must be filed to a population of unknown
putative claimants.  The Debtors want that notice to be as broad
and far-reaching as possible.  Kinsella Communications, Inc.,
the Debtors understand, know how to get that job done based on
the Firm's experience in Johns Manville, Celotex, Dow Corning,
and Babcock & Wilcox.

Pursuant to 11 U.S.C. Sec. 327(a), the Debtors ask Judge Farnan
for permission to employ Kinsella for:

       (a) developing and implementing a comprehensive
notification plan of the Debtors' bar date with recommendations
for materials and media distribution;

       (b) creating all relevant and necessary notice materials,
including print and television advertisements;

       (c) implementing media buys and placement;

       (d) execution of an affidavit or other documentation and
testimony as required by the Court or as requested by the
Debtors describing the notification services provided;

       (e) providing a summary and analysis of the notification
activities and media placement as required by the Debtors; and

       (f) performing all other asbestos claimant notification
consultant services that may be necessary or appropriate in
connection with the Debtors' chapter 11 cases.

Kinsella will collect an 15% industry-standard commission on all
gross media buys approved by the Debtors.

Katherine M. Kinsella is confident that her Firm and its parent,
F.Y.I., Inc., are disinterested within the meaning of 11 U.S.C.
Sec. 101(14).  Out of an abundance of caution, Ms. Kinsella
discloses that Kinsella currently serves as noticing consultant
for Owens Corning and Armstrong World Industries, Inc. (W.R.
Grace Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


W.R. GRACE: Releases Second Quarter Operating Results
-----------------------------------------------------
W.R. Grace & Co. (NYSE: GRA) reported that 2001 second quarter
pre-tax income from core operations was about even with the
prior year at $58.1 million compared with $58.7 million in the
second quarter of 2000, a significant improvement over the first
quarter which was off 28% compared to prior year. Sales totaled
$450.3 million compared with $405.1 million in the prior year
quarter, an 11.2% increase. Excluding currency translation
impacts, the sales increase was 14.6%. The quarter was favorably
impacted by revenue and earnings from acquisitions and strong
demand for refining catalysts, with offsets from continued
higher raw material costs and natural gas prices and the
translation effects of a strong U.S. dollar. Productivity gains
from Six Sigma and other programs dampened the effect of these
higher cost factors. Second quarter net income was $23.0
million, or $0.35 per diluted share (EPS), compared with $34.6
million or $0.50 in the second quarter of 2000. The current
quarter included net income effects of $4.3 million for Chapter
11 expenses and $5.0 million for added net interest expense
compared to the prior year, a combined $0.14 impact on EPS.

"Growth in sales for the quarter came largely from accretive
acquisitions that were quickly integrated into our businesses,"
said Grace Chairman, President and Chief Executive Officer Paul
J. Norris. "We saw good operating results despite pressure on
margins from a soft U.S. economy and continued higher cost of
raw materials and natural gas. Contributions from the Company's
Six Sigma activities continue to grow and substantially offset
underlying inflation. Business trends improved versus the first
quarter, particularly in refining catalysts, and we believe that
the second half of 2001 will show further improvement."

Year-to-date, Grace reported sales of $846.0 million, a 7.1%
increase versus 2000. Excluding currency translation impacts,
sales were up 10.6%. Pretax income from core operations for the
six-month period was $86.5 million versus $98.5 million in 2000,
a 12.2% decrease. The year-to-date operating margin was 10.2%,
down 2.3 percentage points from the prior year, due primarily to
higher costs of natural gas and certain raw materials and the
negative effects of foreign currency translation. Net income and
diluted EPS were $37.6 million and $0.57 compared to $58.8
million and $0.85, respectively, for the first six months of
2000. Chapter 11 expenses of $7.2 million and added net interest
expense of $7.7 million negatively affected first half
comparisons with prior year by a combined $0.23 per share.

                     CORE OPERATIONS

                    Davison Chemicals

Refining Catalysts, Chemical Catalysts and Silica Products

Second quarter sales for the Davison Chemicals segment were
$232.7 million, up 19.1% from the prior year. Excluding currency
translation impacts, sales were up 22.5%. Operating income of
$36.9 million was consistent with the 2000 second quarter but
operating margin of 15.9% was 3.3 points lower. Operating income
and margins were negatively impacted by higher energy costs,
primarily in natural gas, higher raw material prices and
currency translation. Year-to-date, sales were $431.1 million,
up 11.3% from 2000 (excluding currency translation impacts,
sales were up 14.7%), with operating income of $61.2 million
versus $70.5 million for the year-ago period.

Sales of refining catalysts, which include fluid cracking
catalysts (FCC) and additives and hydroprocessing catalysts,
were up 20.4% (23.0% excluding currency translation impacts)
compared to the 2000 second quarter owing to favorable world
demand for petroleum products. Refining catalyst sales were
strongest in Europe and Asia Pacific where the benefits of
Grace's hydroprocessing catalyst joint venture, formed in March,
were most notable. Sales of chemical catalysts increased 3.6%
(6.2% excluding currency translation impacts) over the second
quarter of 2000 due to strong polyolefin sales in Europe and
Asia Pacific as well as increases in other chemical catalyst
sales. Sales of silica products were up 25.4% (30.9% before
currency translation), primarily from three acquisitions
completed in the past year which expanded the silicas product
line into colloidal and precipitated silicas, chromatography
columns and separations media.

                   Performance Chemicals

Construction Chemicals, Building Materials and Container
Products

Second quarter sales for the Performance Chemicals segment were
$217.6 million, up 3.8% from the prior year, despite a softening
of construction activity in the U.S. and certain other
countries. Excluding currency translation impacts, sales were up
7.2%. Operating income was $30.5 million, down 1.9% compared to
the prior year quarter. Operating margin was 14.0%, a 0.8
percentage point decrease from the 2000 second quarter.
Quarterly operating income and margins were negatively affected
by higher utilities and raw material costs. Year-to-date sales
were $414.9 million, up 3.1% from 2000 (6.7% before currency
translation), while operating income was $48.3 million versus
$50.2 million for the year-ago period.

Sales of specialty construction chemicals, which include
concrete admixtures, cement additives and masonry products, were
up 1.2% versus the year-ago quarter (4.4% excluding currency
translation impact), with volume increases in every region
offset largely by currency translation. Sales of specialty
building materials, which include waterproofing and fire
protection products, were up 3.5% for the quarter (5.1%
excluding currency translation impact), reflecting strong North
American waterproofing sales from volume increases in roofing
underlayments and other high performance products. European and
Asia Pacific sales were negatively impacted by weak currencies
and depressed construction activity in these regions. Sales of
container products, which include container sealants, closure
systems and coatings, were up 8.2% from the second quarter of
2000 (up 14.0% before the effect of currency translation). The
increase relates to the positive impact of the Hampshire
Polymers business acquired in July 2000 and higher sales of
specialty coatings products.

              FINANCIAL REPORTING UNDER CHAPTER 11

On April 2, 2001, Grace and 61 of its United States subsidiaries
and affiliates, including its primary U.S. operating subsidiary
W. R. Grace & Co. - Conn., filed voluntary petitions for
reorganization under Chapter 11 of the United States Bankruptcy
Code in the United States Bankruptcy Court for the District of
Delaware. The cases were consolidated and are being jointly
administered under case numbers 01-1139 through 01-1200.
Grace's non-U.S. subsidiaries and certain of its U.S.
subsidiaries were not a part of the Filing.

As a result of the Filing, Grace's balance sheet as of June 30,
2001 separately identifies the liabilities that are "subject to
compromise" under the Chapter 11 proceedings. In Grace's case,
liabilities "subject to compromise" represent pre-petition
amounts as determined under generally accepted accounting
principles based on facts and circumstances prior to the Filing.
Changes to the recorded amount of such liabilities will be based
on bankruptcy court orders and management's assessment of the
claim amounts that will ultimately be allowed by the bankruptcy
court. Changes to pre-petition liabilities during the second
quarter are for: 1) cash payments under approved court orders;
2) the accrual of interest on pre-petition debt; and 3) accruals
for employee-related programs.

Grace is a leading global supplier of catalysts and silica
products, specialty construction chemicals and building
materials, and container products. With annual sales of
approximately $1.6 billion, Grace has over 6,000 employees and
operations in nearly 40 countries. For more information, visit
Grace's Web site at http://www.grace.com.


WARNACO GROUP: Proposes De Minimis Asset Sale Procedures
--------------------------------------------------------
The sale of properties with proceeds of $250,000 or less should
no longer require Bankruptcy Court approval, The Warnaco Group,
Inc. suggests.

The cost of preparing motion papers and the inherent delay in
seeking Bankruptcy Court approval for minor assets exceeds the
benefit. The Debtors suggest implementation of De Minimis Asset
Sale procedures where:

(A) The Debtors shall give notice of each such proposed sale to:

      (i) the United States Trustee;

     (ii) Otterbourg, Steindler, Houston & Rosen P.C., Attn:
Scott L. Hazan, Esq., counsel for the Committee;

    (iii) Shearman & Sterling, Attn: James L. Garrity, Esq.,
counsel for the Debt Coordinators for the pre-petition banks;

     (iv) Weil Gotshal & Manges LLP, Attn: Brian Rosen, Esq.,
counsel to the Post-Petition Agents; and

      (v) the holder of any lien, claim, or encumbrance relating
to the property proposed to be sold.

Notices shall be serves by facsimile, so as to be received by
5:00 p.m. (Eastern Time) on the date of service. The notice
shall specify the:

     (i) assets to be sold,

    (ii) the identity of the seller,

   (iii) the identity of the proposed purchaser (including a
statement of any connection between the proposed purchaser and
the Debtors),

    (iv) the proposed purchase price,

     (v) a brief statement of the Debtors' marketing efforts with
respect to the assets proposed to be sold, and

    (vi) the Debtors' estimated basis in, and current estimated
fair market value of, the assets to be sold (including, to the
extent available, any appraisal prepared in conjunct ion with
such proposed sale).

(B) The notice parties shall have five business days after the
notice is sent to object to or request additional time to
evaluate the proposed transaction in writing to Sidley Austin
Brown & Wood, 875 Third Avenue, New York, New York 10022, Attn:
Kelley A. Cornish, Esq., the Debtors' counsel. If the counsel of
the Debtors receives no written objection or written request for
additional time prior to the expiration of such five-day period,
the Debtors shall be authorized to consummate the proposed sale
transaction and to take such actions as are necessary to close
the transaction and obtain the sale proceeds, and it shall be
deemed consented to by the post-petition lenders to the Debtors,
the pre-petition lenders to the Debtors and any party having
interest in property receiving notice of the motion. If a Notice
Party provides a written request to counsel to the Debtors for
additional time to evaluate the proposed transaction, only such
Notice Party shall have an additional 15 calendar days to object
to the proposed transaction.

(C) If a Notice Party objects to the proposed transaction
within five business days after the notice is sent (or, in the
case of a notice party that has timely requested additional time
to evaluate the proposed transaction, the additional 15-day
review period), the Debtors and such objecting Notice Party
shall use good faith efforts to consensually resolve the
objection. If the Debtors and the objecting Notice Party are
unable to reach a consensual resolution, the Debtors shall not
proceed with the posed transaction pursuant to these procedures,
but may seek Bankruptcy Court approval of the proposed
transaction upon notice and a hearing.

(D) Nothing in the foregoing procedures shall prevent the
Debtors, in their sole discretion, from seeking Bankruptcy Court
approval at any time of any proposed transaction upon notice and
a hearing.

By this motion, the Debtors seek approval of the sale of the
Sale Assets outside the ordinary course of business, pursuant to
the notice procedures set forth.

Shalom L. Kohn, Esq., at Sidley Austin Brown & Wood, in New
York, notes that obtaining court approval for each sale
transaction requires administrative expenses for drafting,
serving and filing pleadings, as well as time incurred by
attorneys for appearing at court hearings. Yet the proceeds of
some assets sales do not even warrant the administrative
expenses incurred, Mr. Kohn notes.

On the other hand, Mr. Kohn says, the proposed procedures will
minimize the administrative costs in these cases, speed up the
liquidation of miscellaneous non-core assets and preserve the
rights of interested parties to object.

But the procedures will not apply to sale of assets that involve
an "insider", Mr. Kohn emphasizes. (Warnaco Bankruptcy News,
Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900)


WARWICK BAKER: Madison Ave. Creative Pioneer Closing Doors
----------------------------------------------------------
Warwick Baker O'Neill, whose legacy includes some of
advertising's most famous campaigns, is closing its doors as the
result of the erosion of their clients' businesses.

Wilder Baker, chairman and CEO, announced to its employees and
clients that the bankruptcy of some of its major clients,
together with the acquisition of a number of others, was the
major cause of the firm's decision. Mr. Baker said, "WBO has a
long history of successful advertising campaigns going back to
the firm's founder, H.P. Warwick. Our tradition has been to
bring our clients the customer's view recognizing that every
person is really two people -- the person who is and the person
that he or she want to be."

The original firm, Warwick and Legler, was founded in 1939. From
its outset, Warwick established itself as a creative leader. The
firm's early relationship was with the original Sam Bronfman and
led Seagram's to some of the most effective advertising of its
time. As the firm added new consumer clients it became one of
the most important forces in the early days of radio advertising
with the creative use of stars like Jack Benny, George Burns and
Fred Allen.

Later Warwick created many award winning, business-building
campaigns including:

     * Timex with the John Cameron Swayze commercials, ("It Takes
a Licking and Keeps on Ticking"). This campaign built the Timex
business to 55% of the market over 15 years.

     * US Smokeless Tobacco's Skoal brand. This campaign at the
outset of Monday Night Football built a whole new consumer
category.

     * Seagram's Crown Royal. The campaign established Crown
Royal as a category leader and the original advertising style
can still be seen today in its current advertising.

     * Heineken USA. By reversing a sales decline, this campaign
was acknowledged by Forbes Magazine as the first sales
turnaround of a beer ever recorded.

     * Crafted With Pride in the USA for the American Home
Furnishings and Apparel Industries. Warwick Advertising's
campaign was recognized by the Harvard Business School as a
prime factor in this success story. CWP's success was
acknowledged as one of the two greatest turnarounds of an
industry ever (the other being Chrysler).

Warwick's last day of business will be on August 3, 2001. The
principals' future plans are uncertain.


WINSTAR COMM.: Court Approves Asset Sale To Sayers Group
--------------------------------------------------------
After the Debtors resolved all objections to their Motion
seeking approval of an Asset Purchase Agreement dated April 12,
2001, between Winstar Wireless and Sayers Group LLC, to
authorize the sale of substantially all of the assets used in or
related to Winstar's Wireless Professional Services division,
Judge Farnan authorizes the Winstar Communications, Inc. to
assume and assign the contracts effective on the closing date,
provided, however, that:

       (a) The Debtors are not authorized by this sale order to
assume or assign the contracts with:

              (1) Affiliated Computer Services, Inc.

              (2) Lucent Technologies Product Finance, or

              (3) Tierney, Watson & Healy

The Debtors' contracts with each of these parties shall be
unaffected by the Sale Motion and the Sale Notice, and any
reference to such contracts in any of the transaction documents
shall be removed or crossed out, and

       (b) Notwithstanding anything to the contrary in the Sale
Motion, the Assets Purchase Agreement or the Sale Notice, the
only agreements between the Debtors and Brown & Wood (now known
as Sidley Austin Brown & Wood) that the Debtors may assume and
assign are the agreements between the parties embodied in the
letter agreement dated November 1, 2000 (relating to the pending
migration of the Nortel infrastructure to a switched Cisco
environment) and the related Scope of Work, dated November 16,
2000 (relating to the Cisco installation in New York).  It
is provided further that the Sale Motion is withdrawn in respect
to the contract between Winstar Wireless and IMCI Technologies,
so that such contract shall be unaffected by the Sale Motion and
the Sale Notice, and the Debtors shall owe no cure payment in
respect thereof.

Judge Farnan emphasizes that the net proceeds resulting from the
sale of the Assets shall be remitted to the Post-Petition
Collateral Agent and applied to reduce the Debtors Post-Petition
Indebtedness.  But Judge Farnan clarifies, the Debtors will be
able to access and use such cash subject to the terms of the
interim order and the DIP Credit Agreement, provided that the
Debtors shall deposit into and maintain in a segregated bank
account the sum of $170,000 to be held in escrow for the sole
benefit of the Texas Tax Authorities as adequate protection
pending resolution of the dispute between the Debtors and the
Texas Tax Authorities regarding the Debtors' alleged liability
for unpaid personal property taxes.

Judge Farnan adds that the liens, if any, of the Texas Tax
Authorities will attach to these proceeds with the same
validity, force, effect and priority, which they otherwise hold
against the Assets.  Judge Farnan warns that the Debtors should
not make any distributions from this account without specific
prior notice to counsel for the Texas Tax Authorities.  After
their tax dispute is resolved, the Debtors shall pay the sale
proceeds to the Texas Tax Authorities to the extent sums are due
and owing to them.  If there are still funds that remain in the
account after the payment of the Texas Tax Authorities' claims,
Judge Farnan orders that the exceeds proceeds shall be applied
in the manner required by the Final Order. (Winstar Bankruptcy
News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


XEROX CORPORATION: Board Decides To Defer Dividend Payments
-----------------------------------------------------------
Xerox Corporation's Board of Directors decided to eliminate the
payment of dividends on its common stock. The decision was made
in line with the Company's turnaround objective to strengthen
its liquidity and to restore long-term value to shareholders and
bondholders. Previously, Xerox had paid a quarterly dividend of
5 cents per share.

"After serious deliberation, the Board of Directors chose to
eliminate the dividend -- a decision that contributes to the
progress Xerox is making in restoring its financial strength and
helps to provide the flexibility required to build on the
effective execution of its turnaround plan," said Paul A.
Allaire, Chairman and Chief Executive Officer. "As Xerox returns
to profitability, the Board will consider the reinstatement of
dividends."

This announcement will reduce Xerox's cash requirement by
approximately $140 million on an annualized basis. This savings
is in addition to the progress the Company has made in
generating cash and strengthening liquidity through cost
reductions, improved working capital management and the sale of
$2 billion in assets. Xerox stated that the elimination of the
dividend is not the result of any unanticipated second quarter
developments.

Xerox's Board of Directors also chose not to declare the
dividend on the Employee Stock Ownership Program (ESOP)
preferred stock, which is used to service the ESOP debt.
Instead, the Company will make an additional contribution to the
ESOP trust. Previously, Xerox had paid a quarterly dividend of
$1.5625 per share on the preferred stock.


XEROX CORPORATION: Posts Second Quarter Loss
--------------------------------------------
Xerox Corporation (NYSE:XRX) announced a second quarter
operations loss of 10 cents per share, which includes currency
losses of 2 cents. Including net restructuring charges, gains
from the early retirement of debt and a charge associated with
the disengagement from the small office/home office (SOHO)
business, the company reported a second quarter loss of 40 cents
per share.

Despite weaknesses in the economy that are impacting overall
sales, the effective execution of Xerox's turnaround is on track
and resulting in improved financial performance, said Paul A.
Allaire, chairman and chief executive officer.

Xerox is delivering progress in key areas of the business,
including cost reduction as well as improvement in inventory
turnover and gross margins, said Anne M. Mulcahy, president and
chief operating officer. We delivered strong operational cash
flow in the second quarter, and have clearly turned the corner
in improving liquidity and restoring Xerox's financial strength.

At the end of the second quarter, Xerox had $2.2 billion cash on
hand and net debt was down $700 million from the first quarter
of 2001. The company also reported continued progress in the
reduction of inventory by approximately $200 million, reduced
capital spending and improved receivables' performance.

Second quarter revenue was $4.1 billion, 13 percent lower than
the second quarter of last year. Pre-currency revenue declined
12 percent from the second quarter 2000. Year-over-year pre-
currency revenue declines of 4 percent in North America and 7
percent in Europe represent in part a weakened economic
environment that impacted equipment sales. A 33 percent revenue
decline in developing markets is driven by the company's
reconfiguration of its Latin American operations.

Over the past year, we've taken the necessary actions to
streamline our business and build on core growth opportunities
in the production printing and networked office markets with a
focus on color, services and solutions, said Mulcahy. While
year-over-year revenue slowed, we delivered sequential
pre-currency revenue gains in North America and Europe,
increased profitability in North America and continued progress
in our European operations - clear evidence of the overall
improvement in our core operations.

Mulcahy also said that Xerox is ahead of schedule in achieving
its $1 billion cost-reduction target with the implementation of
actions that account for more than 75 percent of the year-end
goal, including the reduction of 8,600 jobs worldwide since
Sept. 2000.

For the second quarter, gross margins were 36.4 percent, 38.1
percent excluding SOHO - a sequential improvement from the first
quarter of 2001 gross margins of 33.6 percent. Selling, general
and administrative expenses declined 7 percent from second
quarter 2000. Research and development spending remained flat at
6 percent of revenue reflecting the company's continued
commitment to innovation and new product development.

Xerox's second quarter earnings include unhedged currency losses
of 2 cents per share compared to a 5-cent gain in the first
quarter.

The company also reported a 28-cent charge related to the
disengagement from the SOHO business. Xerox announced in June
its intent to discontinue its line of personal inkjet and
xerographic products sold primarily through retail channels. The
company will continue to provide service, support and supplies
for its customers who own Xerox SOHO products. In the second
quarter of 2001, Xerox recorded a $84 million worldwide pre-tax
loss in its SOHO business. Worldwide revenues for SOHO were $108
million, representing 3 percent of total second-quarter
revenues.

Commenting on expectations for the balance of the year, Mulcahy
said that the adverse impact of a weakened economy is delaying
customers' purchasing decisions - a trend that is not expected
to turn in the third quarter. Our challenge for the second half
of 2001 is driving growth in weakened economic markets. We
continue to expect a return to profitability in the second half
of 2001, but the economic environment and normal third-quarter
seasonality will likely delay this to the fourth quarter, added
Mulcahy.

In related news, Xerox confirmed that it had further
strengthened liquidity through the sale of $513 million in
asset-backed securities. Including cash proceeds received this
week from the sale, Xerox's current net cash balance increases
to approximately $2.6 billion.


BOOK REVIEW: Creating Value Through Corporate Restructuring:
              Case Studies in Bankruptcies, Buyouts, and Breakups
----------------------------------------------------------------
Author:     Stuart C. Gilson
Publisher:  John Wiley & Sons
Hardcover:  528 Pages, First Edition, published July 20, 2001
List Price: $79.95 -- Discounted to $55.96 through Amazon.com at
http://amazon.com/exec/obidos/ASIN/0471405590/internetbankrupt

Since 1980, more than 2,000 public companies, representing over
$600 billion of assets, have filed for Chapter 11 bankruptcy
protection, while an equal number of companies are estimated to
have restructured their debt out of court. During the same period,
more than 1,500 companies with a combined stock market
capitalization of over $625 billion have split themselves apart
through equity spin-offs and carve-outs, or by issuing tracking
stocks. And by some estimates, as many as 10 million employees
have been laid off under corporate downsizing programs.

Each of these companies -- not to mention their many thousands of
investors, competitors, customers, and suppliers -- has been
directly impacted by corporate restructuring. The case studies in
this book are based on extensive interviews with executives,
investment bankers, commercial bankers, loan workout officers,
attorneys, consultants, investors, and other participants in these
restructurings -- providing readers with new insights about this
important process that have never before been seen by the general
public. The cases include some of the most controversial and
innovative restructurings of the past decade, including the
restructuring of Scott Paper Company under "Chainsaw" Al Dunlap,
the prepackaged Chapter 11 bankruptcy of Flagstar Companies, the
pioneering tracking stock offering of USX Corporation, and the
mega-merger of Chase bank and Chemical bank.

Gilson's book will be extremely useful for practitioners and
students alike.  In addition to the case studies, he provides
practical advice on how investors can profit from investing in the
securities of distressed companies, and illustrates how financial
models can be used to estimate the value of companies in
restructurings.

Stuart C. Gilson is a Professor at Harvard Business School and a
widely acknowledged expert on corporate restructuring. His
research on domestic and international restructuring has been
extensively published, and cited in numerous national news and
business periodicals. In 1996 he won the prestigious Graham and
Dodd Award for his article Investing in Distressed Situations: A
Market Survey. In 1999 and 2000 he was named one of the nation's
top ten bankruptcy academics by Turnarounds and Workouts magazine.

"A helpful reference guide for managers facing the complex
operational and financial issues raised in today's competitive
environment. Gilson's case studies provide a real world context
against which corporate leaders can plan their restructuring
strategies." -- Arthur B. Newman, Senior Managing Director, The
Blackstone Group

"Stuart Gilson's analytical case studies have demystified the
battle of enterprise valuations in financial distress and buyout
situations. It is a must-read for understanding the restructuring
and buyout areana. I highly recommend this book." -- Harvey R.
Miller, Senior Partner and Chair of the Business, Finance, and
Restructuring Department, Weil, Gotshal & Manges LLP

"The economically pivotal process has never before received such a
rigorous and well-rounded treatment. Gilson goes far beyond the
legal framework of bankruptcy resolution to show how industry-
specific factors, conflicting creditor claims, and negotiating
stratagems all determine a financially strained company's fate.
Readers of Creating Value through Corporate Restructuring will
gain wisdom that could otherwise be obtained only through many
years of direct experience in the field." -- Martin S. Fridson,
Chief High Yield Strategist, Merrill Lynch & Co.

"Creating Value through Corporate Restructuring ably describes the
importance and difficulty of designing, executing and marketing
restructuring strategies. The case study format offers the reader
an inside look at the real world of corporate restructuring. With
this book, Gilson provides a useful blueprint for tackling
restructuring challenges." -- Jay Alix, Founder & Principal, Jay
Alix & Associates

"Stuart Gilson has created a much needed book for practitioners
and professors alike. It should be required reading for MBA and
PhD students who need to understand corporate reorganization and
crisis management." --Sanford Sigoloff, Chairman, President, and
CEO, Sigoloff & Associates, Inc.

                            *********

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

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

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

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

                           *********

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

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

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

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.  Information
contained herein is obtained from sources believed to be
reliable, but is not guaranteed.

The TCR subscription rate is $575 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each.  For subscription information, contact Christopher
Beard at 301/951-6400.

                      *** End of Transmission ***