TCR_Public/010731.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Tuesday, July 31, 2001, Vol. 5, No. 148

                            Headlines

360NETWORKS: Trustee Appoints Unsecured Creditors' Committee
ACME METALS: AK Steel Now Owns Alpha Tube Unit
AMF BOWLING: Has Until August 3 To File Schedules and Statements
ALAMAC KNIT: Mallen Offers $6 Million for Partnership Interest
COMDISCO: Asks Court To Continue Using Existing Bank Accounts

COMMERCIAL FINANCIAL: Andersen Objects to Disclosure Statement
CRIIMI MAE: Annual Shareholders' Meeting Set For September 25
DENBURY RESOURCES: EnCap Co-Founder David Miller Joins Board
DENBURY RESOURCES: Will Release Q2 Financial Results on August 2
DOLPHIN TELECOM: Commences English Insolvency Proceedings

DOW CORNING: Reports Second Quarter Financial Results
EASYLINK: Shares Subject To Nasdaq Delisting
EDWARDS THEATRES: Selling Escondido Property For $2,350,000
FINOVA GROUP: Seeks To Extend Exclusive Period To November 2
FRUIT OF THE LOOM: Employs Innisfree As Tabulation Agent

FRUIT OF THE LOOM: Reports Improved Second Quarter Results
ICG COMM.: Asks Court To Stretch Exclusive Period To December 10
INTEGRATED HEALTH: Resolves Cardinal's Reclamation Claim
KOMAG, INC.: Appeals Nasdaq's Delisting Determination
L.L. KNICKERBOCKER: Proposes Asset Sale Procedures & Topping Fee

LACLEDE STEEL: Files Chapter 11 Petition For the Second Time
LACLEDE STEEL: Chapter 11 Case Summary
MARINER POST-ACUTE: Summary Of Mariner Health's Chapter 11 Plan
MICROCAP: Declares Final Liquidating Cash Distribution
NATIONAL HEALTH: Reports Progress on Debt Restructuring

NATIONAL HEALTH: Posts Second Quarter Operating Results
OUTPOST.COM: Requests Hearing To Review Delisting Determination
OWENS CORNING: Moves To Keep Non-Debtor Affiliate Setoff Rights
PACIFIC GAS: Modesto Irrigation District Seeks Relief From Stay
PILLOWTEX CORPORATION: Asks Court to Extend Exclusive Periods

PLAY BY PLAY: CEO Duran Also Takes Over As Board Chairman
PROVIDIAN FINANCIAL: Fitch Cuts Individual Rating To B/C From B
PSA INC: Reorganization Plan Estimates 25% to 55% Recovery
SSE TELECOM: Auction Set to Test TeleSystem's $3,205,000 Bid
SOFTLOCK.COM: Looking to Reorganize Around Intellectual Property

SUN HEALTHCARE: Asks Court To Okay Loan To Shared Healthcare
SUPERIOR TELECOM: S&P Lowers Preferred Stock Rating To C
TELEMUNDO HOLDINGS: S&P Rates $50 Mil Senior Notes at CCC+
TRISTAR CORPORATION: Intends To File For Bankruptcy Protection
UNIFORET INC.: Files Amended Plan of Arrangement Under CCAA

UNIFORET INC.: Posts First Quarter Financial Results
U.S. INDUSTRIES: Reaches Restructuring Agreement With Lenders
U.S. LEATHER: Asks Court To Establish Bidding Procedures
USG CORPORATION: Cornerstone Seeks Reclamation Of Goods
W.R. GRACE: Hires Reed Smith LLP As Zonolite Counsel

WARNACO GROUP: Selling New York Condominium For $675,000
WINSTAR COMM: Court Grants Presscom's Request To Modify Stay

                            *********

360NETWORKS: Trustee Appoints Unsecured Creditors' Committee
------------------------------------------------------------
Carolyn S. Schwarz, the United States Trustee Region II,
appoints these creditors of 360Networks (USA), Inc., et al., to
serve on an 11-member Official Committee of Unsecured Creditors:

     Pirelli Cables & Systems, LLC
     246 Stoneridge Drive, 4 Floor
     Columbia, South Carolina 29210-8000
     Attn: Glenn J. Heiar, Vice-President and CFO
     (803) 951-1012

     Kajima Construction Services, Inc.
     395 West Passaic Street
     Rochelle Park, New Jersey 07662
     Attn: Masato Kashiwakura, President/Chief Executive Officer
     (201) 518-2100

     MasTec North America, Inc.
     3155 NW 77 Avenue
     Miami, Florida 33122
     Attn: Jose Sariego, Vice-President
     (305) 406-1954

     Enron Broadband Services, Inc.
     1400 Smith Street
     Houston, Texas
     Attn: Raj Thapar
     (713) 853-6400

     Howard S. Wright Construction Co.
     455 North 3rd Street, Suite 375
     Phoenix, Arizona 85004
     Attn: Jim Constance
     (602) 258-5670

     Carrier Corporation
     Carrier Parkway
     P.O. Box 4808
     Syracuse, New York 13221
     Attn: Stephen G. Anderson, Manager, Treasury Services

     Wagner Equipment Co.
     18000 Smith Road
     Aurora, Colorado 80011
     Attn: K.C. Ware, Financial Manager
     (303) 793-3000

     Spartan Building Corporation
     P.O. Box 490
     Madisonville, Louisiana 70447
     Attn: Terrence M. Donahue

     Qwest Communications, Corp.
     13952 Denver West Parkway, Building 53
     Golden, Colorado 80401
     Attn: Walt Donovan, Vice-President
     (305) 445-7009

     Metromedia Fiber Network Services, Inc.
     360 Hamilton Avenue
     White Plains, New York 10601
     Attn: Hadley E. Feldman

     AT & T Corp.
     295 N. Maple Avenue
     Basking Ridge, New Jersey 07920
     Attn: A. Paula Bock
     (908) 221-4054

Greg M. Zipes, Esq., is the staff attorney for the U.S. Trustee
in charge of 360network's chapter 11 cases. (360 Bankruptcy
News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


ACME METALS: AK Steel Now Owns Alpha Tube Unit
----------------------------------------------
AK Steel (NYSE: AKS) has completed its purchase of Alpha Tube
Corporation, a leading manufacturer of welded steel tubing
located in Walbridge, Ohio. Following the acquisition, the
company has been renamed AK Tube LLC.

AK Steel purchased the assets of the tube company through an
auction conducted in federal bankruptcy court in Wilmington,
Delaware. It had been owned by Acme Metals Incorporated,
Riverdale, Illinois, which filed for Chapter 11 bankruptcy
protection on September 28, 1998. Alpha Tube has continued to
manufacture and market its products since the filing.

"AK Tube LLC is another strategic addition to AK Steel's value-
added product mix," said Richard M. Wardrop, Jr., chairman and
chief executive officer of AK Steel.

AK Tube LLC produces value-added large diameter, thin wall
mechanical tubing for automotive, construction, heating and
cooling, furniture and other markets. The company operates tube
mills, slitters and a variety of finishing equipment and
produces a wide range of specialty and coated steel tubing
products. The company employs about 250 in its facility near
Toledo.

With headquarters in Middletown, Ohio, AK Steel produces flat-
rolled carbon, stainless and electrical steel products for
automotive, appliance, construction and manufacturing markets,
as well as standard pipe and tubular steel products. The company
has about 11,500 employees in plants and offices in Middletown,
Coshocton, Mansfield, Walbridge, Warren and Zanesville, Ohio;
Ashland, Ky.; Rockport, Ind.; and Butler, Sharon and Wheatland,
Pa.


AMF BOWLING: Has Until August 3 To File Schedules and Statements
----------------------------------------------------------------
Under 11 U.S.C. Sec. 521 and Rule 1007 of the Federal Rules of
Bankruptcy Procedure, any chapter 11 debtor is required to file
with the court (i) a schedule of assets and liabilities, (ii) a
statement of financial affairs, (iii) a schedule of current
income and expenditures, (iv) a statement of executory contracts
and unexpired leases, and (v) a list of equity security holders,
within 15 days from the date of filing its Chapter 11 petition.

AMF Bowling Worldwide, Inc. does not believe this fifteen-day
period will be sufficient for completion of their Schedules and
Statements, given the size and complexity of their businesses.
The Debtors have identified more than 40,000 creditors and other
parties-in-interest that likely will be included in their
Schedules and Statements. With the Debtors' operations in so
many locations throughout North America, there are likely
invoices that have not yet been received or entered into the
Debtors' accounting systems.

At the Debtors' behest, Judge Tice granted a further extension,
establishing August 3, 2001, as the date by which the Debtors
must file their Schedules and Statements, without prejudice to
the Debtors' right to seek further extensions. (AMF Bankruptcy
News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


ALAMAC KNIT: Mallen Offers $6 Million for Partnership Interest
--------------------------------------------------------------
United Knitting Inc., UKIC, Inc. and Dyersburg Corporation, each
debtor-affiliates of Alamac Knit Fabrics, Inc. et al. seek a
court order authorizing the debtors United Knitting, Inc. and
UKIC, Inc. to enter into an agreement to sell their partnership
interests in debtor United Knitting Limited Partnership, I. A
hearing on the motion will be held on August 6, 2001 at 10:30 AM
before the Honorable Mary F. Walrath, Wilmington, DE.

The Buyer, Mallen Industries, Inc., agrees to purchase the
partnership interests for the sum of $6 million. The Buyer will
also assume all of the Target's trade liabilities without
further recourse to the debtors. The purchase price is subject
to adjustment to reflect changes in the Target's working
capital. In addition, the purchase price will be reduced by an
amount equal to the liabilities of the Target at closing other
than trade payables.

Co-counsel to the debtor is Debevoise & Plimpton, New York and
Pachulski, Stang, Ziehl, Young & Jones, PC.


COMDISCO: Asks Court To Continue Using Existing Bank Accounts
-------------------------------------------------------------
Comdisco, Inc. seeks a waiver from the US Trustees requirement
to:

      (a) close existing account and open new debtor-in-
          possession bank accounts;

      (b) establish one debtor-in-possession account for all
          estate monies required for the payment of taxes,
          including payroll taxes;

      (c) maintain a separate debtor-in-possession account for
          cash collateral; and

      (d) obtain checks for all debtor-in-possession accounts
          which bear the designation "Debtor-In-Possession", the
          bankruptcy case number, and the type of accounts.

Jack Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom,
explains that these requirements will cause enormous disruption
in the Debtors' business and impair their efforts to pursue
alternatives to maximize value of assets.  Mr. Butler claims
that strict enforcement of bank account closing requirements
does not serve the rehabilitative purpose of Chapter 11.
Besides, Mr. Butler notes, foreign banks also require Comdisco
to maintain an account for the affiliate to do business with the
bank. To close these accounts would adversely affect the
Debtors' foreign affiliates.

If the Court permits the Debtors to maintain its existing
accounts, Mr. Butler says, it will prevent the delays in
payments to administrative creditors. It will also ensure smooth
transition into Chapter 11 with minimal disruption, Mr. Butler
adds.

Aside from the waiver, the Debtors also ask Judge Barliant for
an order that the bank accounts be deemed debtor-in-possession
accounts and that their maintenance and continued use be
authorized. (Comdisco Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


COMMERCIAL FINANCIAL: Andersen Objects to Disclosure Statement
--------------------------------------------------------------
Arthur Andersen LLP objects to the Disclosure Statement filed by
Commercial Financial Services, Inc. He asserts that it does not
adequately disclose the intended effect of the modified
treatment of the ABS Claims on the Litigation.

Arthur Andersen states that the plan of Orderly Liquidation
provides for the deduction of bankruptcy claims filed by the ABS
Trustees. The plan also provides that "resoulution" of the ABS
Claims pursuant to the plan does not in any way resolve, involve
or relate to claims asserted in particular causes of action
brought by the holders of ABS Claims against Arthur Andersen and
others.

The Disclosure Statement recites that the proofs of claim filed
by the ABS Trustee will be deemed to be amended to withdraw the
bankruptcy claims of federal, state and common law fraud filed
by the ABS Trustee. The Disclosure Statement also states that
"resolution" of the ABS Claims pursuant to the plan does not in
any way resolve involve or relate to claims asserted in
particular causes of action described in general or in
particular in the plan brought by the holders of ABS Claims
against Arthur Andersen and others.

Arthur Andersen states that the plan provides for the creation
of a pool from which the ABS Claims will be paid. The holders of
the claims who are plaintiffs in the litigation are seeking to
recover the same damages in the litigation as those that are
"withdrawn" as claims from the bankruptcy case. Andersen asserts
that holders of the ABS claims are entitled only to satisfaction
of their claims, not to an enhanced recovery.

Arthur Andersen asserts that the Disclosure Statement does not
adequately describe the actual or intended effect of the
withdrawal or modification of the selected portion of the ABS
Claims from the bankruptcy case on the litigation. If it is the
intention of the plan to preclude a reduction of the damages
claimed by the plaintiffs in the litigation by the amount of
recovery in the bankruptcy case, the Disclosure Statement should
disclose this purpose.

The plan may be construed as attempting to shift that portion of
the ABS Claims consisting of state, federal or common law fraud
claims from the estate to the defendants in the litigation. If
so, the Disclosure Statement should disclose this purpose.

Arthur Andersen claims that the disclosure of the intended
effect of the plan on the litigation is essential to allow those
affected by the plan to decide how to vote on the plan.


CRIIMI MAE: Annual Shareholders' Meeting Set For September 25
-------------------------------------------------------------
The Annual Meeting of Stockholders of Criimi Mae Inc. will be
held at the Doubletree Hotel, 1750 Rockville Pike, Rockville,
Maryland 20852, on Tuesday, September 25, 2001, at 10:00 a.m.,
Eastern time, for the following purposes:

      (1) To approve an amendment to the Company's Amended and
          Restated Articles of Incorporation to effect a one-for-
          ten reverse stock split of the shares of the Company's
          common stock, par value $0.01 per share.

      (2) To approve the 2001 Stock Incentive Plan.

      (3) To elect three Class I directors to serve until the
          2004 annual meeting of stockholders and until their
          respective successors are elected and qualified.

      (4) To ratify the appointment of Arthur Andersen LLP as the
          Company's independent accountants for the fiscal year
          ending December 31, 2001.

      (5) To transact such other business as may properly come
          before the Annual Meeting or any adjournment or
          postponement thereof.

Only stockholders of record of the Company at the close of
business on August 9, 2001 are entitled to notice of and to vote
at the Annual Meeting.


DENBURY RESOURCES: EnCap Co-Founder David Miller Joins Board
------------------------------------------------------------
In accordance with the terms of the merger agreement between
Denbury and Matrix, Mr. David B. Miller joined Denbury's Board
of Directors, increasing Denbury's board to nine members. Mr.
Miller is a Managing Director and co-founder of EnCap
Investments L.L.C., which is now a wholly owned subsidiary of El
Paso Corporation (NYSE: EPG). As a result of the transaction,
EnCap becomes Denbury's second largest shareholder, holding 3.9
million shares of Denbury common stock, or 7.5% of Denbury's
post-closing 52.8 million shares outstanding. Prior to the
formation of EnCap in 1988, Mr. Miller held executive positions
with PMC Reserve Acquisition Company, MAZE Exploration Inc., and
Republic National Bank of Dallas. Mr. Miller, age 51, also
serves on the board of directors of 3TEC Energy Corporation and
two other EnCap portfolio companies.


DENBURY RESOURCES: Will Release Q2 Financial Results on August 2
----------------------------------------------------------------
Denbury Resources Inc. is scheduled to release its earnings for
the second quarter of 2001 on August 2, 2001. Although these
results are not yet available, the Company does not expect
results for the second quarter to vary significantly from its
current forecasts. The Company's forecast for average daily
production for the quarter is approximately 28,000 BOE/d. The
Company's forecast for lease operating expenses is approximately
$5.25 per BOE, excluding taxes, and the Company expects
production taxes for the second quarter to be down slightly from
the first quarter expense of $1.09 per BOE to approximately
$1.05 per BOE.

The Company's second quarter forecasted depletion, depreciation
and amortization expense is approximately $5.15 per BOE and
general and administrative expense is approximately $1.10 per
BOE. The Company expects that its oil production during the
second quarter was sold at an average discount to NYMEX oil
prices of approximately $4.50 to $5.00 per Bbl and its natural
gas production was sold at an average premium to NYMEX natural
gas prices of 2% to 4%. The Company expects that the effect of
generally lower prices for oil and natural gas in the second
quarter as compared to the first quarter of 2001 will have a
negative effect on quarter-to-quarter earnings and cash flow,
offset to some degree by increases in production quantities.


DOLPHIN TELECOM: Commences English Insolvency Proceedings
---------------------------------------------------------
The Board of Directors of Dolphin Telecom plc (NASDAQ:TIWI)
(TSE:TIW.) announces that it has presented a petition for
administration which will give it protection from creditors
under sections 9 and 10 of the English Insolvency Act 1986.

An administration order was made immediately by the court. The
Company intends to utilize the Administration process to
restructure its balance sheet and propose company voluntary
arrangements to creditors and shareholders. The Company
continues to be in active discussions with potential investors
with an objective of securing funding for the future development
of the business.

Mr. Simon Freakley and Mr. Alastair Beveridge of Kroll Buchler
Phillips have been appointed Administrators of the Company. The
Administrators will undertake a review of the Company's
financial situation and meet with creditors with an objective of
proposing a company voluntary arrangement.

Dolphin Corporation Limited, Dolphin Telecommunications Limited
and the three other United Kingdom operating companies have
filed for protection from creditors. The companies are seeking
the appointment of an administrator although this appointment
has not yet been made.

Dolphin will continue to operate its network and business
normally and there will be no impact on the service it provides
to its customers.

Some of the operating subsidiaries of Dolphin Telecom in other
European countries are reviewing their options, including
seeking court protection, or are in discussions with their main
creditors.

The Company remains positive about the opportunity which exists
to develop a European mobile service focused on the business
customer. The Company believes that with restructured
liabilities, it would be in a good position to seize the
opportunity.

               About Dolphin Telecom plc

Dolphin Telecom is in the process of building digital ESMR
networks in Europe. It began offering national commercial ESMR
services in the United Kingdom in the third quarter of 1999, and
launched pilot commercial ESMR services, on a regional basis, in
France in the fourth quarter of 2000.

                      About TIW

TIW is a global mobile communications operator with over 4.2
million subscribers worldwide. The Company's shares are listed
on the Toronto Stock Exchange ("TIW") and NASDAQ ("TIWI").


DOW CORNING: Reports Second Quarter Financial Results
-----------------------------------------------------
Dow Corning Corp. reported consolidated net income of $5.4
million for the second quarter of 2001, a decline of 82 percent
from the $29.6 million net income reported in Q2 of 2000. These
results included a one-time cumulative interest adjustment
related to Chapter 11 resulting in $58.3 million expense ($36.7
million after tax). Excluding this non-recurring amount, as well
as restructuring expenses and implant income in both years,
adjusted net income increased by 32 percent in the quarter.

First half 2001 net income was $33.1 million, down 48 percent
from $63.5 million in the first half of 2000. Without non-
recurring amounts, net income reported represents a 5 percent
increase.

Second quarter 2001 sales were $615.7 million, representing a 12
percent decline compared with sales of $700.6 million reported
in the same quarter last year. First-half 2001 sales were $1.26
billion, down 10 percent from $1.40 billion through two quarters
in 2000.

"Cost savings from the restructuring implemented in the last few
years helped moderate the impact of declining sales, preserving
operating margins despite lower volumes, as shown by our
increased adjusted net income," said Dow Corning's vice
president for planning and finance and chief financial
officer Gifford Brown. "To protect the company's financial
health through the economic slowdown, Dow Corning will seek
opportunities to accelerate sales revenue growth, improve our
asset turnover and reduce operating spending levels."

Dow Corning -- http://www.dowcorning.com--develops,
manufactures and markets diverse silicon-based products and
services, and currently offers more than 7,000 products to
customers around the world. Dow Corning is a global leader in
silicon-based materials with shares equally owned by The Dow
Chemical Company and Corning Inc. More than half of Dow
Corning's sales are outside the United States.


EASYLINK: Shares Subject To Nasdaq Delisting
--------------------------------------------
EasyLink Services Corporation (NASDAQ: EASY) announced that it
received a Nasdaq Staff Determination on July 24, 2001
indicating that the Company has failed to regain compliance with
the $1.00 minimum bid price requirement for continued listing
(Marketplace Rule 4450(a)(5)).

Its common stock is therefore potentially subject to delisting
from the Nasdaq National Market. The Company will request a
hearing before the Nasdaq Listing Qualifications Panel to review
the Staff Determination. EasyLink stock will continue to be
listed on the Nasdaq National Market unless the Panel does not
grant the Company's request for an extension of time to regain
compliance with the minimum bid price requirement. The hearing
is expected to occur within 45 days of its hearing request.

At the hearing, the Company intends to submit a plan that it
believes will demonstrate its ability to regain compliance with
the $1.00 minimum bid price requirement. The presentation will
include, among other factors, the significant progress that the
Company has made in implementing its business plan, debt
restructuring and financing initiatives and a proposed reverse
stock split. Subject to compliance with applicable regulatory
requirements, the Company has scheduled a special meeting of
stockholders for August 29, 2001 for the purpose of approving a
reverse stock split. There can be no assurance the Panel will
grant the Company's request for continued listing. A decision by
the Panel is typically provided within four weeks of the
hearing.

Tom Murawski, CEO of EasyLink commented: "We continue to make
significant progress in all key areas relating to the
restructuring of our business and the implementation of our
business plan. Based on the results of our efforts to date and
our plan to regain compliance, we are confident that we will be
able to demonstrate our ability to regain and maintain
compliance with the minimum bid requirement."

              About EasyLink Services Corporation

EasyLink Services Corporation (NASDAQ: EASY), based in Edison,
NJ, is a leading global provider of outsourced messaging
services to enterprises and service providers. The Company
offers a comprehensive portfolio of messaging services to
provide the essential communications infrastructure companies
need to do business in today's 24x365 environment. EasyLink's
solution set includes e-mail and groupware services including
managed Microsoft Exchange, Novell GroupWise and Internet e-mail
services; boundary services that offer virus protection, spam
control and content filtering for business e-mail systems;
message delivery services such as EDI, telex, desktop fax and
broadcast and production messaging services; and professional
services including managed services support, on-site
applications management, help desk and staff augmentation
services. For more information, please visit WWW.EASYLINK.COM.


EDWARDS THEATRES: Selling Escondido Property For $2,350,000
-----------------------------------------------------------
Edwards Theatres Circuit, Inc. seeks an order approving the sale
of five contiguous parcels of real property ("Escondido
Property) for a purchase price of $2,350,000. The proposed buyer
is the Escondido Charter High School District.

The debtors assert that the offer exceeds the market value of
the property, and although the debtors received an additional
bid for the property, the school district's bid listed fewer
contingencies. The debtors claim that the Escondido Property is
not necessary for the debtors' business or reorganization
because the theatre is obsolete and would not produce a profit
if the debtors attempted to renovate the theatre.

The proposed buyer is aware that the court may approve higher
bids, and the school district would be awarded Due Diligence
Costs not to exceed $50,000.

On August 13, 2001 at 11:15 AM, the US Bankruptcy Court for the
Central District of California, the Honorable Lynne Riddle
presiding, will hold a hearing on this Motion.


FINOVA GROUP: Seeks To Extend Exclusive Period To November 2
------------------------------------------------------------
As previously reported, The FINOVA Group, Inc. filed a plan of
reorganization. And they did so within the initial period of 120
days for them to have the exclusive right to file a plan, which
expired on July 5, 2001.

Now that the Court has approved the Debtors' third amended and
restated Disclosure Statement, the Debtors are in the process of
soliciting acceptance of the Plan from their creditors and
interest holders, and a hearing is scheduled for August 10, 2001
to consider confirmation of the Plan.

Since the Debtors have filed the Plan within the initial 120
days period, pursuant to Section 1121(b) of the Bankruptcy Code,
the Debtors have 180 days after the commencement of the chapter
11 case to solicit and obtain acceptances of its plan, during
which time competing plans may not be filed by any party in
interest. Such 180 day period is scheduled to expire on
September 3, 2001.

The Debtors believe that such schedule should allow them to
confirm the Plan before the expiration of the Exclusive Periods.
In an abundance of caution, the Debtors seek an extension of the
Exclusive Periods through and including November 2, 2001, and
January 2, 2002, respectively.

The Debtors militate in favor of granting the extension of the
Exclusive Periods requested. In particular, considering the pace
in which the Debtors have filed the Plan in their large and
complex cases, the request for the extension of the Exclusive
Periods is not a tactic to pressure creditors but is a means to
ensure stability in the unlikely event that further negotiations
are required. (Finova Bankruptcy News, Issue No. 10; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


FRUIT OF THE LOOM: Employs Innisfree As Tabulation Agent
--------------------------------------------------------
In connection with the distribution of a disclosure statement
and solicitation of votes on the reorganization plan, Fruit of
the Loom, Ltd. is in need of a well-qualified noticing,
balloting and tabulation agent and consultant. In chapter 11
cases, publicly issued securities present certain limitations in
the context of soliciting acceptances for a plan of
reorganization because such securities often are held in a
"street name" with a bank or brokerage firm, rather than the
name of the beneficial owner or discretionary manager.

Accordingly, Fruit of the Loom submits that retaining and
employing a noticing, balloting and tabulation agent with
specialized knowledge of the plan solicitation procedures is
necessary to ensure Fruit of the Loom satisfies the voting and
mailing requirements under the bankruptcy code in a cost-
effective and efficient manner.

Ms. Stickles tells Judge Walsh that Innisfree is qualified to
act as Fruit of the Loom's balloting, noticing and tabulation
agent and consultant and has broad experience in all types of
bankruptcy solicitations. In addition, Innisfree maintains a
state-of-the-art mailing facility and tabulation system, which
is integral to ensuring an orderly and proper bankruptcy
solicitation.

Jane Sullivan, the Practice Director of Innisfree's Bankruptcy
specialty practice, has the primary responsibility for ensuring
that Fruit of the Loom satisfies its solicitation requirements
in these cases. Ms. Sullivan has over 15 years of experience in
public securities solicitations and other transactions and has
specialized in bankruptcy solicitations since 1991. Ms. Sullivan
has worked on over 40 prepackaged and traditional bankruptcy
solicitations, including America West Airlines, Barney's,
Eagle-Picher Industries, Federated Department Stores, First
Republic Bank, I.C.H. Corporation, Corp., Resorts International
and Zale Corporation. Ms. Sullivan will also work closely with
the other members of Innisfree's staff, each of whom is
experienced in public solicitations and has worked with banks
and brokerage firms to conduct bankruptcy solicitations.

Innisfree will coordinate efforts with Donlin Recano in order to
make use of any information database that already exists and to
minimize the duplication of efforts and costs to the estates.

As balloting agent, in addition to managing the mailing of
voting and non-voting plan documents, Innisfree will respond to
inquiries from any creditor or security holder who may have
questions about the plan. It will also conduct the tabulation of
votes.

Additionally, Innisfree will:

      (A) provide advice to Fruit of the Loom and its counsel
regarding all aspects of the plan vote, including timing issues,
voting and tabulation procedures and documents needed for the
vote;

      (B) review the voting portions of the disclosure statement
and ballots, particularly as they may be related to beneficial
owners in street name;

      (C) work with Fruit of the Loom to request appropriate
information from the trustee(s) of the bonds, the equity
transfer agent, the Depository Trust Company and the claims
agent;

      (D) mail voting and non-voting documents to creditors and
registered record holders securities;

      (E) coordinate the distribution of voting documents to
street name holders of public securities by forwarding the
appropriate documents to the banks and brokerage firms holding
the securities (or their agent), who in turn will forward it to
beneficial owners for voting;

      (F) distribute copies of the master ballots to the
appropriate nominees so that firms may cast votes on behalf of
beneficial owners of securities;

      (G) prepare a certificate of service for filing with the
court;

      (H) respond to requests for voting documents from any party
who requests them, including brokerage firm and bank back-
offices, institutional holders and any other party who may have
an interest in the transaction;

      (I) respond to telephone inquiries from creditors and
security holders regarding the disclosure statement and the
voting procedures (Innisfree will restrict its answers to the
information contained in the plan documents and seek assistance
from Debtor or its counsel with questions beyond the scope of
voting documents);

      (J) make telephone calls to a defined group of creditors or
security holders to confirm that they have received the plan
documents;

      (K) assist with an effort to identify beneficial owners of
Fruit of the Loom publicly held bonds;

      (L) receive and examine all ballots and master ballots as
well as date and time stamp the originals of all such ballots
and master ballots upon receipt;

      (M) tabulate all ballots and master ballots received prior
to the voting deadline in accordance with established
procedures, and prepare a vote certification for filing with the
Court; and

      (N) undertake such other related activities as may be
mutually agreed upon by Innisfree and Fruit of the Loom.

Innisfree will charge Fruit of the Loom for services rendered
and seek reimbursement of costs incurred. For balloting
services, Innisfree will charge a project fee of $10,000, plus
$2,000 for each public debt or equity security entitled to vote
on the plan of reorganization and $1,500 for each public debt or
equity security not entitled to vote on the plan but entitled to
receive notice. The foregoing balloting fees are for Innisfree's
coordination with all brokerage firms, banks, institutions and
other interested parties, including the distribution of voting
materials.

For the mailing to creditors and record holders of securities,
Innisfree estimates its labor charges will be $1.75 per
solicitation package, which assumes the package will include the
disclosure statement, a ballot, a return envelope and one other
document, and that a window envelope will be used for the
mailing, and will therefore not require a matched mailing.

Innisfree will charge a minimum fee of $3,750 to respond to up
to 500 telephone calls from creditors and security holders
within a 30-day solicitation period. If more than 500 calls are
received within the solicitation period, Innisfree will charge
Fruit of the Loom $7.50 per call. In addition, Innisfree will
charge $7.50 per call for any calls made to creditors or
security holders.

If requested by Fruit of the Loom, Innisfree will provide
bondholder identification services and will charge $5,000 per
issue of bonds for such services. Innisfree will charge $100 per
hour for the tabulation of ballots and master ballots, plus set
up charges of $1,000 for each tabulation element (e.g. each
security or, in the case of other creditors, each class).
Innisfree will charge its customary hourly rates for any
time spent by senior executives reviewing and certifying the
tabulation and dealing with special issues that may develop.

Innisfree will charge Fruit of the Loom for consulting services
at its standard hourly rates. Consulting services include review
and development of materials, including the disclosure
statement, plan, ballots, and master ballots; participation in
telephone conferences, strategy meetings or the development of
strategy relative to the solicitation project; efforts related
to special balloting procedures, including issues that may
arise during the balloting or tabulation process; computer
programming or other project-related data processing services;
travel to cities outside of New York City for client meetings,
legal or other matters; efforts related to the preparation of
testimony and attendance at court hearings; and the preparation
of affidavits, certifications, fee applications, invoices and
reports.

The hourly rates for Innisfree professionals are:

      * Managing Director        $325
      * Practice Director        $250
      * Account Executive        $210
      * Staff Assistant          $150
      * Telephone Representative $100

Innisfree will charge $0.50-$0.65 per holder, plus postage, for
any notice mailings to creditors and registered record holders
of securities, which rate assumes that labels and/or electronic
data for these holders would be provided by the trustee,
transfer agent or the claims agent. Innisfree will charge a fee
of $4,000 to conduct the notice mailing to holders of the public
securities. Innisfree will seek reimbursement from Fruit of
the Loom for all out-of-pocket expenses, including travel costs,
postage, messenger and courier charges, expenses incurred to
obtain or convert depository participant, creditor, shareholder
and /or NOBO listings, and costs for supplies, in-house
photocopying and telephone tolls.

Fruit of the Loom understands that Innisfree intends to apply to
the Court for allowance of compensation and reimbursement of
expenses in accordance with the Code.

Jane Sullivan, practice director at Innisfree, files an
affidavit declaring that her firm fulfills the legal definition
of a disinterested party. (Fruit of the Loom Bankruptcy News,
Issue No. 34; Bankruptcy Creditors' Service, Inc., 609/392-0900)


FRUIT OF THE LOOM: Reports Improved Second Quarter Results
----------------------------------------------------------
Fruit of the Loom, Ltd. (OTC Bulletin Board: FTLAQ), one of the
world's leading manufacturers and marketers of basic family
apparel, reported operating results for its second quarter which
reflect continuing improvement. Operating results for the second
quarter significantly improved compared to the second quarter of
2000 as the Company continued to reduce operating costs and
focus its efforts on core profitable products.

Operating earnings before interest and other expenses, excluding
consolidation costs of $34.0 million, were $31.9 million in the
second quarter of 2001, a $43.3 million improvement from a loss
of $11.4 million in the second quarter of 2000. Operating
earnings before interest and other expenses, excluding
consolidation costs of $40.7 million, were $29.1 million
in the first six months of 2001, an $88.5 million improvement
from a loss of $59.4 million in the six-month period ended July
1, 2000.

The improvement in operating earnings in both the second quarter
and six-month periods reflects reductions in production costs
and lower selling, general and administrative expenses.
Excluding consolidation costs, selling, general and
administrative expenses decreased $20.8 million to $84.7 million
for the six-month period ended June 30, 2001 compared to the
corresponding period of 2000. These cost improvements more than
offset the impact of volume and price reductions. Consolidation
costs aggregated $40.7 million in the six-month period ended
June 30, 2001, of which $35.8 million were non-cash costs.
Consolidation costs primarily relate to the closure of
manufacturing facilities as a result of increased efficiencies,
reduced capacity requirements and the Company's continuing focus
on low-cost production.

For the six months ended June 30, 2001, the Company reported
sales of $661.9 million compared to $823.0 million for the
corresponding period in 2000. The lower sales volume was
principally due to lower Activewear sales, which were affected
by weakness in the overall Activewear market combined with
competitively lower pricing. For the six-month period ended June
30, 2001, dozens in the overall Activewear market declined 8%
when compared to the corresponding period of 2000. Higher sales
volume in the comparable period of 2000 also included sales of
discontinued non-core Retail and Activewear product lines, and
the Gitano jeanswear business. The Company continued its
leadership position in mass merchant sales of Men's and Boys'
underwear as the Company's market share increased by 1.0 share
points to 44.9% in the twelve months ended May 2001 over the
same period of the preceding year.

Net operating cash flows before reorganization items improved
$23.7 million to $7.1 million in the six-month period ended June
30, 2001. The Company continues to focus on reducing
inventories, achieving its lowest level in over eight years.
Inventory at June 30, 2001 was $492.0 million, a reduction
of $73.4 million from July 1, 2000.

As of July 25, 2001, the borrowing availability under the
Company's debtor-in-possession credit facility (DIP) was $260.9
million. During the first six months of the year, normally the
seasonal peak for the Company's working capital needs, there
were no borrowings under the revolver component of the DIP. In
addition, the Company's cash and cash equivalents decreased
by $10.4 million which was approximately equal to the overall
reduction in the Company's indebtedness during the period.
Management believes that the size of the DIP and cash and cash
equivalents exceeding $100 million provide the Company with
adequate financial flexibility and liquidity to pay its
suppliers and meet customer expectations.

Chief Executive Officer Dennis Bookshester commented, "As a
result of our recent manufacturing consolidation efforts, we
have aligned our production capacity and cost structure with our
long-term strategy. Our focus on quality, service and
profitability continues to position us for success. Our
customer service measures remain excellent. The Company
continues to be well positioned to emerge from bankruptcy."

Fruit of the Loom filed a voluntary petition under Chapter 11 of
the United States Bankruptcy Code on December 29, 1999 and is
currently working through its restructuring in bankruptcy
proceedings. On March 15, 2001 the Company filed a Joint Plan of
Reorganization with the United States Bankruptcy Court
for the District of Delaware. At this time it is not possible to
predict the outcome of the reorganization cases, in general, or
the effects of the reorganization cases on the business of the
Company or on the interests of creditors. There can be no
assurance that the Joint Plan of Reorganization will be approved
or that the Company will emerge from bankruptcy.

Fruit of the Loom is a leading, international vertically
integrated basic apparel company, emphasizing branded products
for consumers of all ages. The Company is one of the world's
largest manufacturers and marketers of men's and boys'
underwear, women's and girls' underwear, printable T-shirts and
fleece for the activewear industry, casualwear and
childrenswear. Fruit of the Loom employs approximately 23,000
people in more than 50 locations worldwide. The Company sells
its products principally under the FRUIT OF THE LOOM(R) and
BVD(R) brands. For more information about the Company and its
products, visit http://www.fruit.com


ICG COMM.: Asks Court To Stretch Exclusive Period To December 10
----------------------------------------------------------------
ICG Communications, Inc. et al. seeks an order further extending
the exclusive periods during which the debtors may file a
reorganization plan and solicit acceptances of such plan.

The debtors request a court order extending the plan proposal
period through and including December 10, 2001 and the
solicitation period through and including February 8, 2002.

The debtor states that the size and complexity of its cases
alone constitutes sufficient cause to further extend the
exclusive periods. The debtors are one of the largest
competitive telecommunications companies in the U.S., with
assets totaling over $2.7 billion and total debts of over $2.8
billion.

Thus far the debtors have obtain a settlement with Qwest
Communications Corporation, resolved disputes regarding the
debtors' corporate headquarters, rejected contracts and leases
and analyzed the debtors' capital leases and begun negotiations
with large lessors/sellers under the capital leases.

The debtor has completed their long-term business plan. The
debtors are also currently engaged in attempting to secure
sufficient exit financing to fund their plan. Successful
completion of these efforts coupled with a resolution
of the intercompany claims issues will, according to the
debtors, enable them to draft and file a reorganization plan.


INTEGRATED HEALTH: Resolves Cardinal's Reclamation Claim
--------------------------------------------------------
In the ordinary course of their businesses, Integrated Health
Services, Inc. purchased and received certain pharmaceutical
supplies from Cardinal Distribution for use in their healthcare
facilities.

On February 2, 2000, IHS filed a voluntary petition for chapter
11 relief. On or about February 4, 2000, Cardinal served
reclamation demands on the Debtors seeking the segregation and
return of certain pharmaceutical supplies by Cardinal to the
Debtors within the ten day period prior to the filing date,
pursuant to applicable state law and section 546(c) of the
Bankruptcy Code.

After analyzing the Reclamation Demands with the assistance of
their advisors and subsequent discussions with Cardinal, the
Debtors have agreed that Cardinal has a valid and timely
reclamation claim in the amount of $14,999.70.

Accordingly, the parties desire to enter into a Stipulation and
Order providing for the allowance and satisfaction of Cardinal's
reclamation claim. Thus, the parties agree that:

      (1) Pursuant to section 546(c)(2)(A) of the Bankruptcy
Code, the Reclamation Demands are denied. In lieu of
reclamation, Cardinal is granted an allowed administrative
expense claim in the amount of $14,999.70 pursuant to sections
503(b) and 546(c) of the Bankruptcy Code;

      (2) The allowed administrative expense claim will be paid
in 6 equal monthly installments of $2,499.95 with the first
installment to be made within 10 days of the Court's approval
of the Stipulation and Order and each subsequent installment
to be made on or before the 10th day of the next succeeding
month until Cardinal's allowed reclamation claim has been
satisfied in full.

      (3) In exchange, Cardinal agrees to supply products to the
Debtors in accordance with the current supply agreements and
terms between the Debtors and Cardinal; provided, however, that
the payment terms will be net 30 days from the date of invoice.

      (4) Except as specifically set forth, nothing contained in
the Stipulation and Order will be deemed a Waiver or release by
the Debtors or Cardinal of any other rights, claims or
defenses between the parties.

      (5) Nothing contained in the Stipulation and Order will be
construed or deemed to be an assumption of any executory
contract pursuant to section 365 of the Bankruptcy Code.
(Integrated Health Bankruptcy News, Issue No. 18; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


KOMAG, INC.: Appeals Nasdaq's Delisting Determination
-----------------------------------------------------
Komag, Incorporated (Nasdaq: KMAG), the largest independent
producer of media for disk drives, received a Nasdaq Staff
Determination on July 5, 2001 indicating that the company is not
in compliance with the minimum bid price requirement for
continued listing set forth in Marketplace Rule 4450(a)(5), and
as such the company's securities are subject to delisting from
the Nasdaq National Market. The company will request a hearing
before a Nasdaq Listing Qualifications Panel to review the Staff
Determination. There can be no assurance the Panel will grant
the Company's request for continued listing. Until the Panel
reaches its decision following the oral hearing, Komag's stock
will remain listed and will continue to be traded.

                       About Komag

Founded in 1983, Komag is the world's largest independent
supplier of thin-film disks, the primary high-capacity storage
medium for digital data. Komag leverages the combination of its
U.S. R&D centers with its world-class Malaysian manufacturing
operations to produce disks that meet the high-volume, stringent
quality, low cost and demanding technology needs of its
customers. By enabling rapidly improving storage density at
ever-lower cost per gigabyte, Komag creates extraordinary value
for consumers of computers, enterprise storage systems and
electronic appliances such as peer-to-peer servers, digital
video recorders and game boxes.

For more information about Komag, visit Komag's Internet home
page at http://www.komag.com


L.L. KNICKERBOCKER: Proposes Asset Sale Procedures & Topping Fee
----------------------------------------------------------------
The L.L. Knickerbocker Co., Inc. reported the filing with the
United States Bankruptcy Court of a motion for order approving
overbid procedures and topping fee in connection with a proposed
sale of substantially all of the company's assets. The United
States Bankruptcy Court has scheduled a hearing on the Motion
for July 31, 2001.

The subject of the Motion is to establish bidding procedures and
a topping fee for the sale of substantially all of
Knickerbocker's assets to a company to be formed by Brian Blosil
or his designee.  In consideration for the purchase of
Knickerbocker's assets, the purchaser will assume approximately
$4 million of Knickerbocker's debts and liabilities and will
issue to the pre-petition unsecured creditors of Knickerbocker
redeemable preferred units with an aggregate redemption value of
approximately $3 million.

The Motion asks the Bankruptcy Court to approve procedures
related to the sale of Knickerbocker's assets including the
following:

      (1) the purchase price of competing bids must be at least
          $6 million in cash plus a topping fee of 3%,

      (2) competing bidders must provide to Knickerbocker a
          deposit of $1 million,

      (3) Brian Blosil will have the opportunity to match any
          competing bid and

      (4) if Brian Blosil does not match any competing bid, the
          assets will be sold to the competing bidder and the 3%
          topping fee will be paid to Brian Blosil as
          compensation for his costs and expenses.

If the overbidding procedures are approved and no substantial
overbid for Knickerbocker's assets is received, it is unlikely
that the shareholders of Knickerbocker will receive any proceeds
from the sale of assets.

The L.L. Knickerbocker Co., Inc. is a multi-brand collectible
products, gift, toy and jewelry company that designs, develops,
produces and markets products over diverse distribution
channels. The Company's products are sold through independent
gift and collectible retailers, department stores, electronic
retailers, Internet, and international distributors. The Company
is a major supplier of collectible products and fashion jewelry
to the leading electronic retailer.


LACLEDE STEEL: Files Chapter 11 Petition For the Second Time
------------------------------------------------------------
Surging imports and the continued depressed steel market
triggered Laclede Steel Co. to file again for chapter 11
protection, Reuters reports. This after the company just emerged
from bankruptcy January this year.

The filing affects Laclede's 525 steelworkers at two plants in
Alton, Illinois and Fairless Hills, Pennsylvania. It does not
involve, however, Laclede Chain Manufacturing Co., which
continues to conduct business as usual, Reuters discloses.

The company has hired New York-based Gordian Group to find a
buyer for Laclede Chain.


LACLEDE STEEL: Chapter 11 Case Summary
--------------------------------------
Debtor: Laclede Steel Company
         440 North 4th Street
         3rd Floor
         Saint Louis, MO 63102

Chapter 11 Petition Date: July 27, 2001

Court: Eastern District of Missouri (St. Louis)

Bankruptcy Case No.: 01-48321

Judge: Barry S. Schermer

Debtor's Counsel: Lloyd A. Palans, Esq.
                   Bryan Cave
                   One Metropolitan Sq.
                   211 N. Broadway, Ste. 3600
                   St. Louis, MO 63102-2750
                   314-259-2000


MARINER POST-ACUTE: Summary Of Mariner Health's Chapter 11 Plan
---------------------------------------------------------------
PNC Bank, National Association, and First Union National Bank as
Agents for the Senior Bank Lenders to the Debtors in the jointly
administered cases of Mariner Health Group, Inc., present the
Court with the Senior Bank Lenders' Joint Plan of Reorganization
outlining a scheme to reorganize the MHG Debtors' former and
current operations and balance sheets. The MHG chapter 11 cases
are separately administered from the chapter 11 cases for
Mariner Post-Acute Network, Inc. and its subsidiaries.

The Banks, as Plan Proponents are represented by lawyers at
O'Melveny & Myers LLP and Blank Rome Comisky & McCauley LLP.

The Plan, provides that:

      (1) the Senior Bank Claims will be deemed allowed in the
aggregate amount of approximately $440 million, such that each
holder of a Senior Bank Claim will receive its Ratable
Proportion of

          (A) Excess Cash,

          (B) $50 million in New Senior Notes issued by
              Reorganized MHG or by one of its subsidiaries,

          (C) $48 million in New Subordinated Notes issues by
              Reorganized MHG or by one of its subsidiaries,

          (D) 80,000 shares of New Common Stock, representing 80%
              of the shares of New Common Stock of Reorganized
              MHG to be initially issued or reserved for issuance
              by Reorganized MHG, and

          (E) any distributions otherwise payable to holders of
              the Subordinated Note Claims to the extent such
              holders' subordination rights are not waived;

      (2) each holder of a Subordinated Note Claim (other than
MPAN) will receive its Ratable Proportion of the General
Unsecured Fund, and the Senior Bank Lenders will be deemed to
have waived their subordination rights as to such bolder, if,
but only if,

          (a) the class of Subordinated Note Claim holders has
              voted to accept the Plan and

          (b) such holder has not voted to reject the Plan;

      (3) each holder of an Allowed General Unsecured Claim will
receive in full satisfaction of such Claim, its Ratable
Proportion of the General Unsecured Fund, which will consist of
the lesser of

          (a) $7,500,000 minus the amount necessary to make a 50%
              distribution to holders of Allowed Convenience
              Claims or

          (b) the amount necessary to fund a 5% distribution to
              holders of Allowed General Unsecured Claims and
              Allowed Non-MPAN Subordinated Note Claims ;

      (4) each holder of a Convenience Claim will receive Cash
equal to 50% of the amount of such Allowed Convenience Claim;

      (5) each holder of a United States Claim will be treated
according to the terms of a Settlement Agreement as contemplated
in Section 9.1(c) of the Plan; and

      (6) no holder of an MPAN Claim, a Securities Litigation
Claim or a Punitive Damage Claim against any of the Debtors, or
any Equity Interest will receive or retain any property on
account of such Claims or Interests.

All distributions will be made as of the Effective Date or as
soon thereafter as is practicable.

The Plan is premised on a deemed consolidation of the MHG cases
for purposes of the Plan.

The MHG Debtors' operations are currently managed by MPAN
pursuant to the terms of a certain "Management Protocol"
established at the time the Debtors entered into the DIP
Facility. In exchange for providing management services to the
Debtors, MPAN receives compensation on a monthly basis equal to
5% of the gross revenues of the Debtors.

Pursuant to the DIP Facility, MPAN's management of the Debtors
may be terminated by the Plan Proponents at any time prior to
the Effective Date of the Plan and a replacement manager for the
Debtors may be selected by the Plan Proponents. MPAN also may be
replaced as the manager of the Debtors' operations after the
Effective Date of the Plan. If MPAN is terminated as the manager
of the operations of the Debtors, whether before or after the
Effective Date, it is expected that the Plan Proponents or
Reorganized MHG will hire new management to operate Reorganized
MHG and the Subsidiary Debtors, as reorganized. In that case, it
is anticipated that Reorganized MHG will be required to provide
the New Management up to 20% of the New Common Stock of
Reorganized MHG through outright grants, options and stock
option plans. In addition, if Reorganized MHG acquires any
assets from the New Management (or any entity controlled by the
New Management) that are used to operate Reorganized MHG, it is
expected that such assets will be purchased in exchange for New
Subordinated Notes.

The Plan Proponents may elect to install New Management for
Reorganized MHG prior to the Effective Date (subject to Section
5.3 of the Debtor-in-Possession Credit Agreement and Annex A of
the DIP Order). After the Effective Date, any New Management
would be chosen by the Board of Directors. The Plan Proponents
or Board of Directors for Reorganized MHG will establish
procedures and prepare for the New Management to assume
responsibility for the management and operations of the Debtors.

               Termination of the DIP Facility

The Plan provides that, on the Effective Date, all obligations
of Reorganized MHG under the DIP Facility will be paid or
otherwise satisfied in full in accordance with the terms of the
DIP Facility. Upon payment or satisfaction in full of all
obligations under the DIP Facility in accordance with the terms
thereof, all liens and security interests granted to secure such
obligations will be deemed cancelled and will be of no further
force and effect.

The Plan Proponents indicate that there are no outstanding
borrowings under the DIP Facility, other than a letter of credit
in the face amount of approximately $7.8 million. The letter of
credit supports the Debtors reimbursement obligations in respect
of certain surety bonds. All fees and expenses due and payable
have been paid in a timely manner as at the time of filing of
the Plan.

                    The Creditors' Committee

The Committee will continue in existence until the Effective
Date, at which time it will be dissolved and its members will be
released from all their duties, responsibilities and obligations
in connection with the Chapter 11 cases or the Plan and its
implementation. The retention or employment of the Creditors'
Committee's attorneys, accountants, and other agents will
terminate when the Committee's existence terminates. All Allowed
expenses of Committee members and the Allowed fees and expenses
of their professionals through the Effective Date will be paid
by Reorganized MHG in accordance with the Bankruptcy Court
Order. (Mariner Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


MICROCAP: Declares Final Liquidating Cash Distribution
------------------------------------------------------
The MicroCap Liquidating Trust (OTC BB: MCAPS) announced that
the final liquidating cash distribution was declared Friday
totaling $364,092, or $0.15 per unit of beneficial interest in
the Trust (Unit). This distribution includes proceeds received
from the sale of the First Colony Coffee and Tea Company (First
Colony), as discussed below, and the Trust's remaining cash
balance less a reserve for final operating expenses. Raymond S.
Troubh, Trustee, announced that the distribution will be paid on
August 23, 2001 to Unit holders of record on August 14, 2001.

As previously announced, the Trust completed the liquidation of
its portfolio investments with the sale of its investment in
First Colony for $100,000 on June 18, 2001. As a result of the
completion of the liquidation of the Trust's portfolio
investments, the Trust is terminating its operations effective
with the payment of this final liquidating distribution to Unit
holders.

As a result of the termination of the Trust, the Trust's Units
will be de-listed and trading discontinued from the OTC Bulletin
Board as of August 23, 2001, the date of termination.

The Trust was formed in February 1997 to continue the
liquidation of the MicroCap Fund, Inc. (the "Fund"), a closed-
end management investment company. Including the initial
liquidating distribution of $3.50 per share paid by the Fund in
August 1996, cumulative liquidating distributions paid to
beneficiaries total $16.9 million, or $6.95 per unit of
beneficial interest in the Trust.

Continental Stock and Transfer is the transfer agent for the
MicroCap Liquidating Trust.


NATIONAL HEALTH: Reports Progress on Debt Restructuring
-------------------------------------------------------
National Health Investors, Inc. (NYSE:NHI)(NYSE:NHIPR), one of
the nation's largest health care real estate investment trusts,
announced today its progress in reducing its short-term credit
facility and in restructuring and writing down $22.6 million of
certain loans and real estate in its portfolio.

Credit Facility Reduction - Since September 2000, NHI has paid
down its bank credit facility by approximately $91 million
leaving outstanding a $26 million payment due Dec. 31, and
approximately $10.6 million due July 1, 2002.

Morningside - The net carrying value for these four assisted
living facilities in Virginia and Maryland totaled approximately
$21,300,000 at June 30. As a result of an NHI filed lawsuit, a
final judgement against the individual guarantors has been
obtained. On July 27, the outstanding principal amount of
$21,300,000 on this loan was paid to NHI and is part of the $91
million principal reduction of the credit facility mentioned
previously. The accrued interest and all collection costs still
owed by Morningside have been reduced to a one-year promissory
note secured with a letter of credit, individual guarantees, and
a confession of judgement.

SouthTrust Loan Participation - NHI has a 50% interest in a
$52,500,000 loan originally made by SouthTrust Bank to
Integrated Health Services, Inc. (IHS). NHI's interest in the
note receivable balance at March 31, totaled $22,052,000 after a
write-down of $3,591,000 during 2000. IHS and its affiliates
have not paid principal and interest since March 2000 and filed
for chapter 11 bankruptcy protection in February 2000. Subject
to court approval, IHS agreed during the second quarter to deed
the properties to an NHI subsidiary and lease them for a 66-
month term with minimum rental payments equal to 6% of the loan
balance amount plus additional rent based upon cash flow of the
facility. IHS may terminate the lease with 90-day notice. It is
anticipated that this transaction will be closed during the
third quarter. Based on the events of the second quarter, NHI
wrote down this asset by an additional $3 million to $19,052,000
effective June 30.

Autumn Hills Convalescent Centers, Inc. - In 1997, NHI funded a
mortgage loan for Autumn Hills in the original principal amount
of $51,500,000. Collateral for the loan included first mortgages
on 14 health care facilities and certain corporate and personal
guarantees. NHI has received only partial interest payments
since April 2000 and none since May 15. This asset was written
down by $7,965,014 effective Dec. 31, 2000. The debtor filed for
bankruptcy on May 15, and has agreed with NHI, subject to court
approval, to either file a plan of reorganization by September
15, 2001 that meets the approval of NHI, or surrender the
property to NHI no later than Dec. 4. NHI does not expect to
receive payments during the bankruptcy. Based on the events of
the second quarter, NHI wrote down this asset by an additional
$10 million to $31,197,000 effective June 30.

Alterra Properties - In early 1998, NHI entered into a purchase
leaseback transaction with Alterra Healthcare Corporation. The
$41 million transaction resulted in Alterra leasing 11 assisted
living centers from NHI: four in Arizona, three in Florida,
three in Tennessee and one in South Carolina. In March, Alterra
defaulted on their rent payment. NHI immediately terminated the
leases and arranged for new lessees. The new lessees took
possession of five properties on April 1, three properties on
May 1, one property on June 1, and one property on July 1. The
last property is in litigation, but the court has ordered that
its monthly rental payments be made to NHI pending final court
ruling. NHI has filed suit for damages against Alterra. The
company's previous carrying value for this property was
$38,700,000. NHI has leased these properties to new lessees but,
to date, has not received its full lease payments from the new
lessees. Consequently, this investment was written down by
$4,900,000 to $33,800,000 effective June 30.

Other Write-Downs - Effective June 30, NHI additionally wrote
down asset values on its mortgage notes secured by nine long-
term care facilities owned by Lenox HealthCare ($3.1 million),
and three Washington state real estate properties ($1.5 million)
based on bankruptcy filings, non-payment and other second
quarter events.

Refinancing and Sales Initiatives - The Company has a number of
refinancing and/or asset sales projects underway and anticipates
closing one or more of these prior to year-end.

"NHI has made significant progress in prepaying its bank credit
facility and in working with its borrowers and lessees in
restructuring and improving its position as it relates to non-
performing loans and/or leases," said NHI President Andy Adams.
"The company's cash flow of approximately $4 million per month
will continue to be used to repay outstanding indebtedness.
NHI reiterates its intention to preserve its status as a real
estate investment trust." Adams added, "The significant asset
write downs effective June 30 reflect our desire to keep our
portfolio at current values."

National Health Investors, Inc. is a health care real estate
investment trust that makes first mortgage loans and leases
certain owned real estate. The common and preferred stocks of
the company trade on the New York Stock Exchange with the
symbols NHI and NHIPr respectively.

Additional information including the company's most recent press
releases and a summary of the most recent financial highlights
may be obtained on NHI's Web site http://www.nhinvestors.com


NATIONAL HEALTH: Posts Second Quarter Operating Results
-------------------------------------------------------
National Health Investors, Inc., (NYSE:NHI) (NYSE:NHIPR) one of
the nation's largest health care real estate investment trusts,
announced that a second quarter fixed asset and mortgage loan
write-down of $22.6 million resulted in negative funds from
operations for the quarter of $9,305,000 or 38 cents per share
diluted, compared to funds from operations of $19,127,000 or 68
cents per share diluted for the same quarter last year.

Net loss was $12,268,000 or 52 cents per share diluted for the
quarter ended June 30 compared to net income of $13,914,000 or
55 cents per share diluted for the same period in 2000. Revenues
for the second quarter were $33,438,000 compared to $37,999,000
for the same period last year.

For the six months ended June 30 funds from operations per share
diluted was 14 cents compared to $1.37 in 2000.Net loss for the
six months ended June 30 was $2,379,000 compared to net income
of $27,867,000 for the same period in 2000 and diluted per share
net loss was 14 cents compared to net income of $1.10 in 2000.
Revenues for the first six months were $66,811,000 compared to
$76,022,000 in the first six months of 2000.

The decline in FFO and net income in the second quarter is due
primarily to a charge for loan loss expense and asset write-
downs of $22.6 million or 93 cents per share, related to four
mortgage loans and two owned property groups with net carrying
amounts before the write-downs totaling $154,374,000. The
balance of the decline in the second quarter and six-month
period is due to certain of the company's loans and leases being
on non-accrual status. The decline is partially offset by
reduced borrowing costs.

As has been previously stated, it is the company's intent to
comply with REIT dividend requirements, thus the company
anticipates that a dividend at least equal to 90% of projected
2001 taxable income will be declared in the fourth quarter and
paid by January 31, 2002. It is currently believed that the
dividend will be paid in a combination of cash and shares of the
company.

"NHI has made significant progress in prepaying its bank credit
facility and in working with its borrowers and lessees in
restructuring and improving its position as it relates to non-
performing loans and/or leases," said NHI President Andy Adams.
"The company's cash flow of approximately $4 million per month
will continue to be used to repay outstanding indebtedness."
Adams added, "The significant asset write downs effective June
30 reflect our desire to keep our portfolio at current values."

The Board has additionally authorized, subject to bank credit
facility approval, the incremental repurchase of up to $10
million of the company's stock in open market transactions

National Health Investors, Inc. specializes in the financing of
health care real estate by first mortgage and by purchase and
leaseback transactions. The common and preferred stocks of the
company trade on the New York Stock Exchange with the symbols
NHI and NHIPr respectively. Additional information including the
Company's most recent press releases and a summary of the most
recent financial highlights may be obtained on NHI's Web site at
http://www.nhinvestors.com


OUTPOST.COM: Requests Hearing To Review Delisting Determination
----------------------------------------------------------------
Outpost.com (Nasdaq: COOL) Cyberian Outpost, Inc. a leading
global Internet retailer of high-end technology products,
announced that on July 23, 2001, it received a Nasdaq Staff
Determination indicating the Company's failure to comply with
Nasdaq's $1.00 minimum bid price requirement (Marketplace Rule
4450(a)(5)) for continued listing of its Common Stock on the
Nasdaq National Market, and that its securities are, therefore,
subject to delisting from The Nasdaq National Market.

The Company has requested a hearing before a Nasdaq Listing
Qualifications panel to review the Staff Determination and its
Common Stock will continue to trade on The Nasdaq National
Market pending the outcome of the hearing. A hearing date has
not been set. There can be no assurance the Panel will grant the
company's request for continued listing. If the Common Stock is
delisted, the Company would likely apply to have it traded on
the OTC Bulletin Board.

                     About Outpost.com

Outpost.com, established in 1995, is a leading Internet retailer
of consumer technology products. Outpost.com has been named the
top-rated consumer shopping experience on the Web by the on-line
shoppers' rating service Bizrate.com, receiving the "Circle of
Excellence Award" for Holiday 2000 and the 1999, 2000 and 2001
#1 PowerRanking for Computing by Forrester Research. Today,
Outpost.com has an existing customer base of over 1.4 million.
The company has partnered with leading consumer electronics
retailer Tweeter Home Entertainment Group expanding its clicks
and mortar presence. As a full service provider (FSP),
Outpost.com provides its partners with e- commerce solutions
encompassing site design, site maintenance, order management and
fulfillment.


OWENS CORNING: Moves To Keep Non-Debtor Affiliate Setoff Rights
---------------------------------------------------------------
Prior to the Petition Date, Owens Corning Canada Inc., Vytec
Corporation, Crown Manufacturing Inc., and OC Celfortec Inc.,
all of which are non-debtor affiliates of Owens Corning, in the
ordinary course of their respective businesses, sold goods
and/or services to the Debtors, including specifically Owens
Corning, for which Owens and from time to time certain other
Debtors became indebted to the affiliates.  Similarly, from time
to time prior to the Petition Date, the Debtors, including
Owens, in the ordinary course of their business, sold goods
and/or services to one or more of the affiliates and became
entitled to royalties, for which the affiliates became indebted
to the Debtors.

As of the Petition Date, the affiliates were owed by the
Debtors, and in turn owed Owens, amounts in Canadian dollars as
prepetition claims:

             Receivable Owed   Payable Owed     Net Receivables
             By Debtors        to Debtors       Owed by Debtors
             -------------     ------------     --------------
OCC        CND$23,734,999    CND$11,436,931    CND$12,298,068
Vytec      CND$22,685,865    CND$    72,705    CND$22,613,160
Celfortec  CND$ 4,035,968    CND$    48,440    CND$ 3,987,528
Crown      CND$   106,815    CND$  (222,640)   CND$   329,455
                                                ---------------
                                 Total          CND$39,228,211

As a result of the Debtors' prepetition indebtedness to the
affiliates, the affiliates are entitled to set off the amounts
owed by the Debtors against amounts the affiliates otherwise owe
to the Debtors, subject to the automatic stay of all creditor
action under the Bankruptcy Code. Rather than pursue their
rights to seek relief from the automatic stay to exercise rights
of setoff, the affiliates simply wish to confirm their intent to
preserve the status quo with respect to the prepetition claims,
without prejudice to their setoff rights, consistent with the
holding of the United States Supreme Court in Citizens Bank of
Maryland v. Strumpf, 5116 US 16 (1995).

Accordingly, the parties have entered into a stipulation and
order submitted as part of this Motion, and ask Judge Fitzgerald
to take action to preserve the affiliates' rights of setoff by
entering the order approving the stipulation, thereby confirming
the preservation of the status quo and the parties' respective
rights with respect to the prepetition claims and rights of
setoff.

Under the stipulation, the Debtors and the affiliates agree
that:

        (a) The Debtors acknowledge that the affiliates have
rights of setoff relating to the prepetition claims, and that
the affiliates shall not be deemed to have effected a setoff by
their refusal to pay amounts owed by them to the Debtors for
prepetition claims.  The parties simply intend to preserve the
status quo with respect to the prepetition claims and the
affiliates' rights of setoff as of the Petition Date;

        (b) Each of the affiliates shall reserve all of their
rights and remedies with respect to the setoff claims referred
to in the stipulation and order, and any defenses to such claims
also shall be reserved; and

        (c) The stipulation and order is not intended to affect
in any way the parties' postpetition dealings with each other.

The Debtors argue that entry of this order approving the
stipulation is in the best interest of the Debtors, their
estates and creditors as it will serve to preserve the status
quo with respect to the prepetition claims without altering the
respective rights of the parties. (Owens Corning Bankruptcy
News, Issue No. 13; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


PACIFIC GAS: Modesto Irrigation District Seeks Relief From Stay
---------------------------------------------------------------
An appeal captioned Modesto Irrigation District v. Pacific Gas
and Electric Company, et al., No. 99-17069, pends before the
United States Court of Appeals for the Ninth Circuit. Modesto
seeks modification of the automatic stay to the extent necessary
to permit prosecution of the appeal and any requests for, and
further prosecution of, rehearing or certiorari review. Modesto
does not ask for modification of the stay to permit prosecution
of a trial of the underlying action in the event of a remand.

Modesto's filed in initial lawsuit, Modesto Irrigation District
v. Pacific Gas and Electric and Dynergy Power Services, Inc.,
No. C-98-3009-MHP (Dist. N.D. Calif. 1998), seeking a monetary
judgment and injunctive relief under the Sherman Antitrust Act
for damages arising out of PG&E's refusal to interconnect
transmission lines with Modesto at substations in Pittsburg,
California. That suit was dismissed, an amended complaint was
filed to advance conspiracy allegations and challenge any claim
to immunity under the Noerr-Pennington doctrine (which immunized
efforts to prevent competition by involving governmental or
regulatory processes), and that amended complaint was dismissed.
Thereafter, Modesto appealed. Briefing and oral argument were
completed on March 15 and the Court of Appeals took the matter
under submission. The Ninth Circuit now advises that it will not
render a decision until the bankruptcy stay applicable to PG&E
is lifted.

Delay, Merle C. Meyers, Esq., at Goldberg, Stinnett, Meyers &
Davis, argues, will only serve to frustrate prompt resolution of
the matter and needlessly increase costs for all of the parties.
Lifting the stay will not unduly prejudice the Debtor because
the matter must be resolved sooner or later. (Pacific Gas
Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


PILLOWTEX CORPORATION: Asks Court to Extend Exclusive Periods
-------------------------------------------------------------
Pillowtex Corporation and its debtor-affiliates report that
they've made substantial progress in their reorganization
efforts.  The Debtors tell the Court that their management and
the Company's professionals spent a great deal of time in
developing a comprehensive 3-year strategic business plan that
will serve as the foundation for their reorganization efforts.

Between March and July, the Debtors tell Judge Robinson that
they continued to reduce costs and improve their operations in
the midst of the unrelenting slowdown in the United States
economy and increased competition from imports.

The Debtors have closed six plants and five warehouse
facilities. Around 1,600 employees were affected by this
reduction of workforce. They have also:

       (i) hired a new chief financial officer and undertaken a
           search for a new chief executive officer;

      (ii) disposed of certain unproductive or nonessential
           assets;

     (iii) negotiated an agreement with their two larges and most
           significant cotton suppliers, which enable the Debtors
           to reject certain contracts to purchase cotton that
           were substantially above market and take advantage of
           the currently slumping market price for cotton;

      (iv) entered into arrangements with several customers that
           will enable the Debtors to expand the product lines
           sold to those customers; and

       (v) continued implementation of certain initiatives to
           improve customer service (for which the Debtors
           recently received customer service awards from two of
           their largest customers).

Michael G. Wilson, Esq., at Morris, Nichols, Arsht & Tunnell,
reminds Judge Robinson that the Debtors management team has
been:

     (a) comprehensively reviewing the Debtors' businesses to
address the Debtors' operational and financial problems, and

     (b) developing a three-year strategic plan since prior to
the Petition Date.

According to Mr. Wilson, the comprehensive review of the
Debtors' operations and facilities is now nearing completion.

Mr. Wilson also relates that the Debtors have made substantial
progress toward completing their strategic planning process and
preparing their business plan.  The strategic planning process
includes, among other things:

     (a) analyses focused on potential outsourcing opportunities,

     (b) manufacturing capacity and cycle times,

     (c) working capital reductions,

     (d) business process re-engineering,

     (e) brand development,

     (f) expanded licensing opportunities, and

     (g) strategic alliances.

To assist them with the strategic planning process, the Debtors
retained:

     (1) Stern Stewart & Co. as strategic business consultants to
         identify, measure and evaluate possible strategic
         operating alternatives, and

     (2) Interbrand Corporation as corporate brand management
         consultants to evaluate the Debtors' brand portfolio and
         develop strategic alternatives to better position that
         portfolio within the marketplace.

According to Mr. Wilson, the work of Stern Stewart and
Interbrand will be completed in the next couple of weeks.  At
the same time, the Debtors are earnestly working to complete
their business plan as soon as reasonably possible, hopefully
before October 14, 2001.  Mr. Wilson explains that the Debtors
had previously agreed to deliver their business plan by October
14, 2001 as a condition to extend the DIP Facility beyond
November 12, 2001 when they were negotiating with
the Secured Lenders regarding the post-petition financing.

Mr. Wilson explains that the Debtors' business plan will serve
as the basis for negotiations with the Secured Lenders, the
Creditors' Committee and other constituencies regarding a plan
or plans of reorganization.  Once the Debtors have completed
their strategic planning process and prepared their business
plan, Mr. Wilson says, the Debtors intend to prepare a
preliminary outline of a plan or plans of reorganization
structured around the business plan to present to the secured
lenders and the Creditors' Committee for input and discussion.

The Debtors believe that this action plan will pave the way for
their expeditious emergence from bankruptcy pursuant to a
consensual plan or plans of reorganization.  However, Mr. Wilson
notes, it is possible that the Debtors will seek an additional
extension of the Exclusive Periods in order to complete the
process of negotiating and promulgating the plan or plans of
reorganization.  Mr. Wilson explains that one must consider the
time-consuming nature of the processes described.  On top of
that, the Debtors will seek extensive input from their various
creditor constituencies in the plan process.

Nonetheless, by this motion, the Debtors seek only a four-month
extension of the exclusive periods.  Mr. Wilson says it will
give their creditors and the Court a time frame against they can
measure the Debtors' progress in achieving the results of their
goals.

The Debtors request Judge Robinson to extend the exclusive
filing period through and including November 16, 2001, and the
solicitation period through and including January 15, 2002 or 60
days after the expiration of the exclusive filing period.

The hearing for this motion is scheduled on August 13, 2001.
The Court expects all objections and responses to be filed by
August 6, 2001.  By application of Del.Bankr.LR 9006-2, the
current deadline is automatically extended through the
conclusion of the August 13 hearing.

Mr. Wilson argues that:

       (i) The requested extension of the Exclusive Periods is
           justified by the size and complexity of the Debtors'
           Chapter 11 cases.  The Debtors and their non-debtor
           affiliates comprise a large, complex and
           geographically diverse organization, Mr. Wilson tells
           Judge Robinson. As of December 2000, the Pillowtex
           Companies had approximately $1,300,000,000 in assets
           and $1,300,000,000 in liabilities.  They conduct
           business throughout the United States and overseas,
           have tens of thousands of potential creditors and
           currently employ approximately 11,500 full-time and
           part-time employees.  It is simply unrealistic, Mr.
           Wilson says, to expect that any party would be in a
           position to formulate and build consensus around a
           reorganization plan any earlier than November 16,
           2001.  Meanwhile, Mr. Wilson assures the Court, the
           Debtors are:

              (a) taking measures to reduce costs and improve
                  their business operations, and

              (b) addressing the essential nuts and bolts of the
                  administration of these chapter 11 cases.

      (ii) The Debtors' progress in these cases warrants an
           extension of the Exclusive Periods.  The Debtors have
           accomplished much during the first nine months of
           these cases, Mr. Wilson notes.  In addition to working
           to complete the comprehensive review of their
           businesses and their strategic planning process, the
           Debtors have made substantial progress in addressing
           major, pressing issues facing their estates, including
           the needs to obtain additional liquidity, preserve
           vital vendor relationships, develop a key employee
           retention plan, fill certain key management positions,
           dispose of unproductive and nonessential assets and
           reduce costs and consolidate or eliminate certain of
           their manufacturing and warehouse operations.

     (iii) The requested Extension of the Exclusive Periods will
           not harm the Debtors' creditors or other parties in
           interest.  Mr. Wilson argues, "The relief requested
           herein will not result in a delay of the plan-of-
           reorganization process; rather, it will simply permit
           the process to move forward in an orderly fashion."

      (iv) Little time has elapsed in the Debtors' Chapter 11
           cases.  The debtors filed their voluntary petitions on
           November 14, 2000, approximately 9 months prior to the
           filing of this Motion, Mr. Wilson reminds the Court,
           and so the Debtors' request for a further extension of
           4 months is relatively modest.  The Debtors' request
           constitutes a fraction of the extensions granted by
           this and other courts in large reorganization cases.

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


PLAY BY PLAY: CEO Duran Also Takes Over As Board Chairman
---------------------------------------------------------
Play-By-Play Toys & Novelties, Inc. (OTCBB: PBYP) has noted that
Tomas Duran, in addition to his current position of Chief
Executive Officer, is joining the Board of Directors as
Chairman of the Board. Mr. Duran previously had been a director
of the Company and a member of its Audit Committee.

The Company's Board of Directors also appointed Ottis W. Byers
to the positions of President and Chief Operating Officer. Mr.
Byers had most recently been employed by the Company as its
National Sales Director.

Play-By-Play Toys & Novelties, Inc. designs, develops, markets
and distributes a broad line of quality stuffed toys, novelties
and consumer electronics based on its licenses for popular
children's entertainment characters, professional sports team
logos and corporate trademarks. The Company also designs,
develops and distributes electronic toys and non-licensed
stuffed toys, and markets and distributes a broad line of
non-licensed novelty items. Play-By-Play has license agreements
with major corporations engaged in the children's entertainment
character business.


PROVIDIAN FINANCIAL: Fitch Cuts Individual Rating To B/C From B
---------------------------------------------------------------
Fitch affirms Providian Financial Corp's (Providian) and
Providian National Bank's (PNB) long-term deposit rating of
`BBB+', senior debt rating of `BBB', trust preferred stock of
`BBB-' and short-term ratings of `F2'. The Individual rating for
Providian and PNB has been lowered to `B/C' from `B'. The long-
term Rating Outlook for both entities remains Stable.

Fitch's affirmation and stable rating outlook continues to
reflect the company's growing franchise in the U.S. credit card
market, where it is the fifth largest credit card issuer with
over $30 billion of managed loans and $17.7 million accounts,
solid core earnings and profitability performance and sound
risk-adjusted capitalization. Earnings and profitability remain
relatively strong, although the risk-adjusted revenue margin
(RARM), has come under pressure due to higher loss rates. For
the most recent quarter ended June 30, 2001, Providian's RARM
remained healthy at 13.79%, although down from previous periods.
The company's capitalization on both an absolute and risk-
adjusted basis, remains sound relative to the risk profile.
Providian's equity to managed assets remained healthy at 6.76%
at June 30, 2001.

Despite these positive factors, Fitch has lowered the Individual
rating of Providian and PNB to `B/C' from `B' reflecting the
company's more pronounced shift into the lower spectrum of the
consumer credit market which has contributed to higher net
charge-offs and downward momentum in the risk-adjusted margin
over the past few quarters. Furthermore, Fitch's analysis of
lagged charge-off and delinquencies rates suggests that these
trends will likely persist over the near term. Fitch's
Individual rating, measures a bank's business and financial
profile absent any external support, and assesses a bank's
exposure, appetite and management of risk which Fitch believes,
on balance, has increased. Providian has attempted to re-
emphasize the `platinum' segment of the market, while at the
same time lessen exposure to the `standard' segment where losses
are highest. Fitch believes these initiatives have yet to show
demonstrable results and therefore losses will remain at
elevated levels.

Providian Financial, based in San Francisco, CA, is a leading
financial services holding company whose principal banking
subsidiary is Providian National Bank. The company maintains a
growing presence in the U.S. credit card market with over $30
billion of managed receivables at June 30, 2001.


PSA INC: Reorganization Plan Estimates 25% to 55% Recovery
----------------------------------------------------------
PSA, Inc.; ETS Payphones, Inc.; ETS Vending, Inc.; Americom,
Inc.; City Public Phones, Inc.; ETS Payphones of California,
Inc.; ETS Management Services LLC; MSC National, Inc.; S and R
Telecommunications Consultants, Inc.; TSC Payphone Corp.; and
Phoenix Telecom of Puerto Rico, Inc., debtors filed Chapter 11
petitions on September 11 and 21, 2000.

The Disclosure Statement is jointly promulgated by the debtors
and the Creditors' Committee in compliance with the applicable
provisions of the Bankruptcy Code. Once confirmed, the Joint
Plan will allow debtors to emerge from bankruptcy as reorganized
ETS with holders of Payphone Investor Claims as its
shareholders.  Holders of general unsecured claims, such as
trade creditors, will receive distributions totaling
approximately 25% to 55% of their allowed claims.

As certain claims and causes of action are litigated or settled
by debtors and the Creditors' Committee including, but not
limited to, the repatriation of assets from and realization upon
claims against Charles E. Edwards and others, the net proceeds
will be paid into a Litigation Trust from which cash
distributions will be made periodically and on a pro rata basis
to Holders of General Unsecured Claims and Payphone Investor
Claims.

The estimated total of general unsecured claims is $13,681,791.
Payphone Investor claims are estimated at $375 million. The
estimated recovery for Payphone Investor Claimants is 6-16%.


SSE TELECOM: Auction Set to Test TeleSystem's $3,205,000 Bid
------------------------------------------------------------
                        BANKRUPTCY AUCTION

                         SSE TELECOM, INC.
                  BANKRUPTCY CASE NO. 01-42831

                LEADING MANUFACTURER OF SATELLITE
             TELECOMMUNICATION EQUIPMENT AND STAELLITE
               INTERNET TRANSPORTATION SOLUTIONS

      SALES DATE:                  August 22, 2001 at 2:00 p.m.

      Sales Location:              United States Bankruptcy Court
                                   1300 Clay Street, Ctrm. 220
                                   Oakland, California 94612

Property Being Sold:  Physical assets including inventories,
test equipment, jigs & fixtures; Intellectual Property Rights,
software, source codes, handbooks and manuals, customer lists,
marketing collateral material and intangible property rights in
connection with the following four product lines:

      Transceiver          DDT tri-band terminals
      Modems               iP3 satellite Internet gateway
      (Not including accounts receivable)

You may view SSET's website -- http://www.sset.com-- for
various specifications and full descriptions of the products
and product lines that are being sold.

Purchase Price:  The Debtor has accepted as the highest bid, the
bid of TeleSystems International Corporation in the amount of
$3,205,000 for all four product lines.  Any initial overbid
shall be in the minimum amount of $3,305,000 and thereafter
bidding shall be in increments of $10,000.  Any overbidding
party must be a qualified bidder.  A qualified bidder must have
available at the auction cash or cash equivalent of #100,000
(the minimum initial overbid amount) and must provide proof of
its financial ability to pay the remaining balance of the
purchase price in full.  For additional information, contact
Debtor's counsel, Aaron Paul at Tel. No. (510)763-1000 or
Official Unsecured Creditors' counsel, Carl L. Grumer at
(310)312-4149.

Terms of Auction Sale:  Any bid or ultimate over-bid shall be
subject to approval of any sale by the United States Bankruptcy
Court at the hearing.  The Debtor will accept cash or cash
equivalents with balance payable in full before any Property is
delivered to the purchaser.  Any purchaser will be responsible
for taking possession of Property purchased and removal of it
from the business premises of Debtor at purchaser's own cost and
expense.  The sale shall be on where-is as-is basis and without
warranties of condition, title, or fitness for a particular
purpose.  The Debtor reserves the right to withdraw from sale
any one or all of the product lines and/or to reject any and all
bids if Debtor determines that to do so would be in the best
interest of the bankruptcy estate and its creditors.


SOFTLOCK.COM: Looking to Reorganize Around Intellectual Property
----------------------------------------------------------------
SoftLock.com, Inc., also known as DigitalGoods, reported on its
current condition and business status and on its current plans
for the future.

As previously announced, the company ceased the active conduct
of its business on May 1, 2001. Since that time, SoftLock has
concentrated its efforts on assessing alternatives and
developing an action plan for the future of the company.
SoftLock's President and founder Jonathan Schull commented that
"our goal has been and continues to be, to devise a plan that
will address the needs of our creditors, our preferred
stockholders and our common stockholders, in light of their
relative legal rights but in a manner that can be accepted by
all interested parties."

The company's major remaining assets are cash and intellectual
property, including certain patent rights and software. The
company is actively seeking either a buyer for the intellectual
property or a licensee of that intellectual property. In this
regard, the company, directly and through its advisors
(including Bramson & Pressman, a law firm specializing in
licensing, selling and otherwise commercializing intellectual
property) has begun formulating alternative approaches for how
the intellectual property can best be used to generate the most
value for creditors and stockholders. Various potential buyers
have been contacted and the company believes that it can now
begin negotiations for an acceptable transfer of the
intellectual property. The company is hopeful that an agreement
can be reached within the next 90 days although any such
transaction will be subject to assurances that all necessary
approvals and waivers are obtained.

With respect to the creditors, the company has retained Looney &
Grossman LLP as outside counsel, specializing in business
reorganizations. The company has ceased paying its creditors
whose debts arose prior to the cessation of business operations
on May 1, 2001. It is SoftLock's intent to treat creditors
equally and to pay valid claims upon the sale or license of
the company's remaining assets. Existing cash reserves will be
used to finance the efforts needed to sell or license the
intellectual property and implement the company's liquidation
and dissolution strategy. The company confirmed that a complete
financial report will be made in connection with the filing of
its Quarterly Report on Form 10Q for the quarter ended June
30, 2001. This Report will be released in early to mid-August.

Of critical importance to the company also will be to maximize
whatever value exists in the company's assets for the benefit of
its preferred stockholders and common stockholders in addition
to its creditors. For this to be successful, SoftLock believes
that if the holders of the preferred stock will voluntarily
forego all or a significant portion of the stated liquidation
preferences, the common stockholders will have an opportunity to
share in the net proceeds available upon final liquidation and
dissolution and will be supportive of an efficient liquidation
process. If such accommodations cannot be achieved through
mutual consent, SoftLock believes that some other arrangement
will be required in order to successfully complete the sale or
licensing of the intellectual property on terms that would be
required by a potential buyer or licensee.

In addition, as part of the process of selling or licensing
intellectual property, SoftLock intends to restructure its
compensation arrangements with its sole remaining employee,
Jonathan Schull. The company believes that, as the founder,
inventor of the company's patents, sole director and sole
officer, Mr. Schull's efforts are essential for SoftLock to
achieve a successful sale or licensing of intellectual property.
It is expected that Mr. Schull's compensation will be reduced
and that he will be eligible to receive a bonus calculated as a
percentage of the net proceeds received by SoftLock from the
sale or licensing of the intellectual property. The details of
this arrangement will be consistent with industry standards and
subject to approval by the company's preferred stockholders.

In a related matter, the company announced that suit has been
filed against it by the landlord for the company's former
facility in Maynard, Massachusetts. The suit alleges damages for
breach of the lease including unpaid rent and also seeks to
enjoin certain actions. The company believes that this suit can
be resolved in a satisfactory manner as part of the overall plan
for liquidation and dissolution.

Finally, SoftLock has concluded that if a comprehensive plan
such as the one described above cannot be implemented within the
next 120 days then a formal Chapter 11 bankruptcy proceeding may
be the sole remaining course of action. While this offers a
certain and defined resolution of claims, it is the view of
SoftLock that all interested parties can most beneficially be
served other than through a federal bankruptcy proceeding.


SUN HEALTHCARE: Asks Court To Okay Loan To Shared Healthcare
------------------------------------------------------------
Shared Healthcare Systems, Inc., a privately owned, Delaware
corporation in the business of providing integrated solutions to
the senior care market place, is short of cash because its
development of a revolutionary integrated software package,
known as Unison Orcas, has been delayed due to longer-than-
expected time in completing coding for the software. The Debtors
own an approximate 70% equity interest and an approximate 61%
equity interest on a fully diluted basis. To preserve the
Debtors' existing equity interest in SHS and enable SHS to
implement its business plans, SHS and the Debtors have agreed,
subject to Court approval, that the Debtors will make a short-
term loan of up to $1.5 million to SHS through the provision of
a Line-of-Credit Facility.

The Orcas software is meant to bring together clinical,
financial and case management documentation and workflow into
one software package, for facilitating government regulation
compliance and general administration of long-term healthcare
providers. SHS anticipates that the introduction of its Orcas
software will a profitable venture. Coding for the software is
now scheduled to be completed by the fourth quarter of 2001.
Once the coding for the Orcas software is completed, the company
will deploy the software for retail sale.

The Debtors believe it is sound business judgement for Sun to
provide the Line-of-Credit Facility because:

      * The Debtors maintain a large equity stake (70% interest)
in SHS.

      * SHS has been unable to raise capital from any other
sources, including the owners of the remaining capital in SHS
who are employees lacking the resources to be able to provide
funding in meaningful amounts.

      * SHS is in the final stages of production of its Orcas
software,  which is targetted for deployment in the first
quarter of 2002.

      * The Debtors believe that the Line-of-Credit Facility,
together with other initiatives, should be sufficient to fund
operations through December 2001. one such initiative is the
sale of SHS' former office building (the Phillips Builging). In
anticipation of heightened growth of their business, SHS erected
a new office building in 1999. SHS anticipates realizing
approximately $600,000 for this building and expects to close on
the sale within the next few months. In the meantime, SHS
continues to pursue other initiatives in the hopes of raising
additional capital.

      * The Debtors are beneficiaries of a price protection
provision with SHS, whereby the Debtors enjoy the most favored
pricing for SHS products or services of any SHS customer for
comparable services.

      * the Line-of-Credit Facility is secured by a first
priority perfected security interest in all assets owned by SHS,
including all intellectual property.

The Debtors tell Judge Walrath they have obtained the consent of
their postpetition lenders under the Revolving Credit and
Guaranty Agreement for the Line-of-Credit Facility.

             Terms of the Line-of-Credit Facility

The Line-of-credit Facility provides for, among other things:

(1) A term of no later than August 2, 2001 but amounts advanced
     will be payable on demand of the Debtors;

(2) Purpose of the proceeds will be solely for provision of
     working capital for SHS and other general corporate
     purposes;

(3) First Priority security interest in all assets owned by SHS;

(4) Interest equal to 8.6% during the period from the closing
     date through August 2, 2002, 9.6% during the period from
     August 3, 2002 through August 2, 2003 and 10.6% from August
     3, 2003 through August 2, 2004 and addition 2% per year
     during the continuance of an event of default;

(5) Indemnification by SHS of the Debtors and their respective
     representatives with respect to the Line-of-Credit Facility,
     the loan documentation or any of the transactions
     contemplated.

Accordingly, the Debtors seek the Court's authority, pursuant to
section 363(b)(1) of the Bankruptcy Code, to make a short-term
loan of up to $1.5 million through the provision of a Line-of-
Credit Facility, under the terms as described in the motion.
(Sun Healthcare Bankruptcy News, Issue No. 22; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


SUPERIOR TELECOM: S&P Lowers Preferred Stock Rating To C
--------------------------------------------------------
Standard & Poor's placed its ratings on Superior Telecom Inc. on
CreditWatch with negative implications.  At the same time,
Standard & Poor's lowered its preferred stock rating on the
company to single-'C' from triple-'C'-plus.

The rating actions follow the company's announcement that it
intends to suspend payment of the quarterly cash dividend on its
outstanding 8 % trust convertible preferred securities and that
it plans to substantially de-leverage its balance sheet through
business divestitures. The preferred stock rating will be
lowered to a 'D' when the dividend is deferred on Sept. 15,
2001.

Superior Telecom's financial condition has deteriorated because
of weak underlying conditions in its key business segment,
particularly in its original equipment manufacturing (OEM) and
electrical wiring businesses. The prevailing economic malaise
has been instrumental in the deterioration of the OEM's
business, which is directly tied to various industrial markets
such as automotive, appliance/tools, and industrial equipment.
Also, despite relatively consistent demand from the commercial
building construction market, the company's electrical group,
which primarily consist of building wire, continues to be
plagued by excess supply that has affected building wire prices.
The company's EBITDA of $96 million for the six months ending
June 30, 2001, resulted in a very weak EBITDA to interest ration
of 1.6 times. This compares with EBITDA of $122 million for the
six months ending June 30, 2000, a 21% decline. As a result of
the poor performance, the company amended its minimum financial
leverage and operating earnings covenants under its bank credit
agreement.

Superior's debt leverage remains burdensome with almost $1.4
billion in debt (not including $136 million of convertible trust
preferred securities). In order to improve its capital structure
and address the pending $ 175 million principal payment due July
1, 2002, the company announced that it is exploring the
divesture of some business units, which could result in
significant proceeds applied towards debt reduction. However,
any improvement in the company's capital structure would be
tempered against the loss of cash flow from the business units
as well as the business diversity provided by such operations.
Although the timing of such asset sales is unknown, Standard &
Poor's will continue to monitor the progress of any divestiture
and will re-evaluate the company's credit and business profile
when asset sales occur.

    RATINGS PLACED ON CREDITWATCH WITH NEGATIVE IMPLICATIONS

      Superior Telecom Inc.                           Ratings
         Corporate credit rating                        B+
         Senior secured bank loan rating                B+
         Subordinated debt                              B-


    RATING LOWERED AND PLACED ON CREDITWATCH WITH NEGATIVE
    IMPLICATIONS
                                              Rating
      Superior Telecom Inc.                 To            From
         Preferred stock rating             C             CCC+


TELEMUNDO HOLDINGS: S&P Rates $50 Mil Senior Notes at CCC+
----------------------------------------------------------
Standard & Poor's assigned its triple-'C'-plus rating to
Telemundo Holdings Inc.'s proposed $50 million (gross proceeds)
senior discount notes due 2008. The notes will be sold under
Rule 144A with registration rights and will contain an identical
covenant package to the company's existing 11.5% senior discount
notes due 2008. Offering proceeds, together with bank borrowing,
will be used to finance the $65 million purchase of independent
Dallas full power UHF television station KXTX.

The existing ratings on Telemundo Holdings Inc. and its
operating company subsidiary Telemundo Group Inc. are affirmed.

The Telemundo Spanish-language TV network is currently
distributed in Dallas, the eighth-largest U.S. Hispanic market,
via a third-party owned affiliate station. That station's
affiliation agreement, which expires in 2002, will be terminated
upon the expected October 2001 close of the new station
purchase. The new station provides better coverage of the
market, greater operational control, and modest cash flow
benefits. However, key credit measures will weaken slightly and
there will likely be a reduction in audience levels in the near
term due to the channel position change.

The ratings continue to reflect Telemundo Holdings' ownership of
stations affiliated with the Telemundo Network, the second-
ranked U.S. Spanish-language television network, increasing
competition for Spanish-language advertising, and high financial
risk. These factors are tempered by Hispanic population and
income growth, rising Spanish-language advertising spending, and
the Telemundo network's improving audience shares.

Pro forma for the KXTX acquisition, Telemundo will own and
operate 10 full power UHF TV stations in nine large markets that
include the top eight Hispanic markets. All stations are
affiliated with the Telemundo Network, which provides most of
the stations' programming. The company also owns the leading VHF
station in Puerto Rico.

Telemundo continues to face stiff competition from the
financially much stronger Univision Television Network, which
has more than 75% of the Hispanic TV audience. Competition will
increase in 2002, when Univision expects to launch a second
Spanish-language television network.

Telemundo Holdings' margin is in the mid-30% area. Revenue and
cash flow growth has slowed from very high rates in 2000 due to
overall advertising softness. Pro forma coverage of cash
interest is in the low-2 times (x) area and total interest
coverage, including holding company discount notes, is thin at
approximately 1.3x. Total debt divided by EBITDA is almost 8x.
Advertising weakness and investment activity could restrain key
credit measures improvement during the next 12 months. Capital
spending is currently elevated at more than $20 million due to
digital television conversion. Discretionary cash flow has been
positive largely because of the non-cash interest component.
There are no debt maturities for the next two years and cash
interest payments on the discount notes do not begin until 2004.
The revolving credit facility provides modest liquidity subject
to financial covenants.

                         OUTLOOK: POSITIVE

Sustained favorable operating momentum of the stations and the
network that produces key credit measures improvement amid
increasing competition may lead to an upgrade in the
intermediate to longer term. Further debt financed acquisitions
or investment activity could delay a potential upgrade, Standard
& Poor's said.

                          RATING ASSIGNED

      Telemundo Holdings Inc.                          Rating
         $50 mil. (gross proceeds)
            sr. disc. nts due 2008                      CCC+

                          RATINGS AFFIRMED

      Telemundo Holdings Inc.
         Corporate credit rating                        B
         Senior unsecured debt                          CCC+

      Telemundo Group Inc.
         Corporate credit rating                        B
         Senior secured bank loan rating                B+


TRISTAR CORPORATION: Intends To File For Bankruptcy Protection
--------------------------------------------------------------
Tristar Corporation (TSAR) announced that the Company's
financial condition has continued to deteriorate due to the
effects of the slowing economy that began approximately a year
ago.

The Company is in discussion with its lender to secure interim
financing and has a significant backlog of customer orders for
the 2001 holiday season which it anticipates fulfilling.
Interimly, the Company plans to seek protection under the
federal bankruptcy laws as soon as practicable.

As a result of the Company's inability to file its Quarterly
Report on Form 10Q for the Fiscal Quarter ended May 26, 2001,
the NASDAQ Stock Market has delisted the Company's Common Stock.

Tristar Corporation is engaged in developing, manufacturing, and
marketing an extensive line of value-priced products comprised
of designer alternative fragrances, contemporary cosmetics, and
selected toiletry products. These products are distributed by
the Company in North and South America primarily to chain
stores, mass merchandisers, retail outlets, distributors, and
wholesalers.


UNIFORET INC.: Files Amended Plan of Arrangement Under CCAA
-----------------------------------------------------------
UNIFORET INC. and its subsidiaries, Uniforet Scierie-Pate Inc.
and Foresterie Port-Cartier Inc. (the COMPANY) announced that
they have filed in Court an amended plan of arrangement under
the "Companies' Creditors Arrangement Act" which sets out the
terms of the restructuring of their debts and obligations. The
Company's creditors have been convened to meetings to be held on
August 15, 2001 to vote on the amended plan of arrangement and
all the necessary information to that effect has been sent to
its creditors. On the other hand, further to proceedings
instituted by a few of the US Noteholders, the meeting of the US
Noteholders-creditors has been temporarily suspended by Court
order rendered on July 26, 2001 until settlement of the
composition of this class of creditors.

As already announced, the Company keeps on its current
operations. Suppliers who provide goods and services necessary
for the operations of the Company are paid in the normal course
of business.

Uniforet Inc. is an integrated forest products company which
manufactures softwood lumber and bleached chemi-thermomechanical
pulp. It carries on its business through its subsidiaries
located in Port-Cartier (pulp mill and sawmill) and in the
Peribonka area in Quebec (sawmill). Uniforet Inc.'s securities
are listed on The Toronto Stock Exchange under the trading
symbol UNF.A, for the Class A Subordinate Voting Shares, and
under the trading symbol UNF.DB, for the Convertible Debentures.


UNIFORET INC.: Posts First Quarter Financial Results
----------------------------------------------------
Uniforet Inc. announces that is has incurred a net loss of $2.1
million ($0.04 per share) during its first quarter ended March
31, 2001, taking into account a gain before income taxes of $3.9
million resulting from the conversion of preferred shares,
Series 1, compared with a net loss of $7.4 million ($0,14 per
share) for the corresponding quarter of 2000, including a net
loss of $3.8 million from continuing operations.

On April 17, 2001, the Company filed in Court for protection
under the "Companies' Creditors Arrangement Act" in order to
prepare and present a plan of arrangement which sets out the
terms of the restructuring of its debts to creditors. The plan
of arrangement was filed in Court on July 11, 2001. The
Company's creditors will express their opinion on the Company's
plan during their meeting which will be held next August 15.

The enclosed consolidated financial statements for the quarter
ended March 31, 2001 have been compiled on the same basis as for
the consolidated financial statements for the year ended
December 31, 2000, using the going concern concept. In addition,
these consolidated financial statements reflect no value
adjustments nor reclassifications of assets, liabilities or
operating results which could be required given recent
developments and following the implementation of a possible plan
of arrangement with creditors or any other plan aimed at
reorganizing the Company's operations.

On May 18, 2001, the Company announced that its wholly owned
subsidiary 3735061 Canada Inc. has been unable to meet its
obligations under the terms of the interim financing arrangement
as required by Jolina Capital Inc., and that it had received
from the latter a notice to exercise its hypothecary right to
take in payment property pledged to it by its subsidiary as
security, including outstanding 11.125% senior notes of the
Company in an aggregate principal amount of US$64.6 million. The
Company may no longer consolidate its own notes which it had
acquired at a discount in June 2000, as its wholly owned
subsidiary lost ownership of said notes. Consequently, an
estimated loss of $49.0 million will be included in the
Company's results for its second quarter of fiscal 2001.

Furthermore, during the quarter, mills operated in a low selling
price environment and in a context of decreasing demand for
commercial pulp, which has led to the interruption of the Port-
Cartier pulp mill's operations since last February 16 for an
undetermined period. Afterwards, the Company sought to dispose
of the Port-Cartier sawmill's woodchip production on open
markets.

As anticipated, the agreement on imports of Canadian lumber into
the American market was not renewed upon its termination on last
March 31, which created a context of great uncertainty on this
market. Decisions as to the determination of countervailing or
antidumping duties on imports of Canadian lumber into the
American market are expected to be reached during the summer.

                           SALES

Sales dropped by 10.1% to $44.0 million for the first quarter of
2001, compared with the same quarter last year. Lumber sales
decreased by 9.24% to $30.5 million, compared with the previous
period due a 16.3% drop in selling prices and a decrease of 6.5%
in shipments. Improved woodchip selling prices and increased
woodchip shipments at the Port-Cartier sawmill into open markets
resulting from the interruption of the pulp mill's operations
partially offset the impact of declining selling prices. Pulp
sales dropped by 12.2% to $13.5 million, compared with $15.4
million for the corresponding period due to a 15.6% reduction in
shipments, while selling prices showed a slight improvement of
4%.

                       OPERATING LOSS

The operating loss for the first quarter of 2001 was $1.7
million, compared with an operating income of $1.8 million for
the same quarter last year. The operating loss from the lumber
business amounted to $0.7 million, compared with an operating
income of $4,000 for the corresponding period, due to a
reduction in selling prices (16.3%) and in lumber shipments
(6.5%), partially offset by increased woodchip revenues. The
operating loss from the pulp business reached $1.0 million,
compared with an operating income of $1.8 million for the
corresponding period as a result of a 15.6% drop in shipments
and the interruption of the plant's operations since last
February 16.

                       CASH POSITION

For the first quarter of 2001, $9.8 million were used in
operations, compared with $4.0 million for the corresponding
period of 2000. Net long-term debt repayments amounted to $0.3
million, compared with an increase of $1.6 million of long-term
debt for the corresponding period of 2000. Additions to fixed
assets were limited to $0.6 million, compared with $1.7 million
for the corresponding period of 2000. $1.3 million were used in
discontinued paper operations, compared with $2.4 million
provided by operations in 2000.

As at March 31, 2001, bank overdraft amounted to $27.6 million
and authorized credit margins were used to capacity. As at March
31, the Company had a working capital deficiency of $7.5
million, for a ratio of 0.92:1, compared with a ratio of 0.98:1
as at December 31, 2000.

                   OVERVIEW OF OPERATIONS

Lumber production reached 88.6 million board-feet for the first
quarter of 2001, compared with 96.1 million board-feet for the
corresponding period one year ago. Pulp production attained only
23,135 metric tons, compared with 50,953 metric tons for the
corresponding period last year, as a result of the interruption
of the plant's operations since February 16.

                          OUTLOOK

The next few months will be decisive for the future of the
Company. On the one hand, creditors will have to make a decision
regarding the Company's plan of arrangement and, on the other
hand, we will monitor closely any developments regarding the
requests filed by the American Coalition of Lumber Producers,
whose findings will be decisive for the future of the
Canadian lumber industry. The lumber market has resumed its
seasonal operations at the beginning of the second quarter,
supported by a low interest rate environment. The conditions of
the global commercial pulp market have deteriorated, which
resulted in a drastic drop in prices and demand, forcing
producers to slow down production. In this context, resumption
of the Port-Cartier pulp mill's operations have been deferred to
September 4, 2001.

Uniforet Inc. is an integrated forest products company which
manufactures softwood lumber and bleached chemi-thermomechanical
pulp (BCTMP). The company carries on its business through its
subsidiaries located in Port-Cartier (pulp mill and sawmill) and
in the Peribonka area (sawmill). Uniforet's Class A subordinate
voting shares are listed on the Toronto Stock Exchange under the
stock symbol UNF.A, while convertible debentures are listed
under the stock symbol UNF.DB.


U.S. INDUSTRIES: Reaches Restructuring Agreement With Lenders
-------------------------------------------------------------
U.S. Industries, Inc. (NYSE: USI) reached an agreement with its
lenders on the terms of a comprehensive restructuring plan of
its bank debt and the bank debt of Rexair Inc., which is
guaranteed by U.S. Industries.

The anticipated closing date of the restructuring is August 15,
2001, subject to satisfaction of customary closing conditions,
including the execution of definitive documentation. The lenders
have also agreed to continue the current waivers under the U.S.
Industries and the Rexair credit facilities until the expected
closing date, at which time the waivers will be replaced by the
restructuring agreement.

The restructuring will extend the final maturity date of the
U.S. Industries credit facilities to November 30, 2002, which
will coincide with the final maturity of the Rexair credit
facility. Rexair will be reacquired upon the closing of the
restructuring. The restructuring provides for significant
scheduled reductions of the Company's senior debt during the
term. The Company expects to satisfy the reductions through its
cash flow, asset sales and/or a refinancing.

David H. Clarke, U.S. Industries Chairman and Chief Executive
Officer commented: "We have developed a solid debt restructuring
plan intended to de-leverage the balance sheet, maximize the
value of U.S. Industries' assets and put into place a repayment
schedule that will enable us to meet all of our financial
obligations to our creditors. I am pleased that we have gained
the support of our lenders in this process."

The Company said it has received expressions of interest and is
accepting bids from potential purchasers of its businesses
outside of its core Bath and Plumbing operations, and expects to
evaluate competing offers and determine a course of action that
would maximize value. As previously announced, the Company has
retained Deutsche Bank Alex. Brown and Credit Suisse First
Boston to assist in this process.

Separately, the Company announced that it expects to report
third quarter earnings per share from continuing operations in
the range of $.17 to $.19 per share. This excludes a non-cash
asset impairment charge of approximately $254 million, primarily
related to the write-off of goodwill for certain operating
units. USI continues to be affected by soft conditions in each
of its main businesses.

Earnings per share from continuing operations excluding the
impairment charge and non-recurring charges for the full year
are estimated to be $.50 to $.55 per share.

USI will hold a conference call following the release of its
third quarter results in mid-August.

U.S. Industries owns several major businesses selling branded,
consumer-oriented building products to leading home centers and
mass merchants. These brands include Jacuzzi, Ames True Temper,
Sundance Spas, and Zurn, among others.


U.S. LEATHER: Asks Court To Establish Bidding Procedures
--------------------------------------------------------
United States Leather, Inc. seeks a court order approving the
contract between the debtor and the Mandel Group, Inc. and
establishing bidding procedures and bidding protections in
connection with the sale of real estate which includes certain
properties in the city of Milwaukee, Wisconsin. The properties
are located at 1531 North Water Street, 1548 North Water Street,
1635 North Water Street and 404 East Lyon Street. (The "Water
Street Properties")

The purchase price offered by Mandel is $3.4 million. Each
competitive bid must be at a price greater than $3,650,000. The
debtor believes that the sale of the properties pursuant to the
Bidding Procedures will yield the highest and best bids because
they promote a competitive auction and an expeditious sale.

The hearing seeking entry of a final sale order pursuant tot he
contract is to be scheduled between 25 and 35 days after (i) the
date Mandel waives all of its Due Diligence Contingencies; or
(ii) August 29, 2001, whichever first occurs.

The debtor is represented by Bruce G. Arnold of Whyte
Hirschboeck Dudek SC of Milwaukee, Wisconsin.


USG CORPORATION: Cornerstone Seeks Reclamation Of Goods
-------------------------------------------------------
Cornerstone Industrial Minerals (U.S.A.) Inc., based in
Lakeview, Oregon, sold mined and processed perlite to USG
Corporation. Cornerstone provides copies of invoices numbered
300-52 through 300-62 and 88-011 and 88-012 as proof of what was
delivered. Cornerstone expected payment for the perlite after
delivery. Instead, it read in the newspaper that USG filed for
chapter 11 protection.

Cornerstone believes the Debtors received the Goods on or after
June 15, 2001. Cornerstone also believes the Debtors were
insolvent at the time they received the Goods and that the
Debtors had ceased to pay their debts in the ordinary course of
their business as they became due or the sum of the Debtors'
debts exceeded their property or assets.

Cornerstone served the notice as a written demand on the Debtors
in order for Cornerstone to reclaim the Goods pursuant to UCC
Section 2-702 and 11 U.S.C. Section 546(c).

Cornerstone believes the Debtors are still in possession of all
or a portion of the Goods. The Debtors have not returned the
Goods or delivered what is owed to Cornerstone under the Claim.

Cornerstone states that when a seller learns a buyer has
received goods on credit while insolvent, he may reclaim the
goods upon demand made within 10 days after the receipt of goods
according to UCC Section 2-702. The 10-day period is extended
where the buyer files a bankruptcy petition pursuant to 11
U.S.C. Section 546c. Cornerstone seeks reclamation of its Goods
pursuant to these rules.

Cornerstone asks that if the Court denies reclamation to
Cornerstone in whole or in part, then Cornerstone would like
allowance of the Claim with the type of priority specified in 11
U.S.C. Section 503(b) in an amount of not less than $93,649.11
and $2,229.75 with respect to U.S.C. Section 546(c)(2)(A).

If the Court denies reclamation to Cornerstone in whole or in
part, then Cornerstone seeks the above amounts each secured by a
lien on the Debtors' assets in accordance with 11 U.S.C. Section
546(c)(2)(B). (USG Bankruptcy News, Issue No. 4; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


W.R. GRACE: Hires Reed Smith LLP As Zonolite Counsel
----------------------------------------------------
W. R. Grace & Co. asks the Court for permission to employ Reed
Smith LLP as special counsel to defend and otherwise represent
them with respect to:

      (a) class actions and putative class actions brought on
behalf of owners or occupants of homes containing an attic
insulation product alleged to contain asbestos known as Zonolite
Attic Insulation;

      (b) individual cases brought by homeowners whose homes
contain Zonolite;

      (c) cases alleging property damage caused by asbestos-
containing products formerly manufactured and sold by the
Debtors including, without limitation, Monokote fireproofing,
Zonolite and acoustical plaster; and

      (d) personal injury actions brought individually or as
class actions relating to asbestos-containing products sold by
the Debtors.

Reed Smith will bill for its work at its customary hourly rates.
The primary Reed Smith members who will be handling work for
Grace and their current hourly rates are:

       James J. Restivo, Jr., Esq. $390
       Lawrence E. Flatley, Esq.    340
       Douglas E Cameron, Esq.      325
       James W. Bentz, Esq.         260

Mr. Restivo, in Reed Smith's Pittsburgh office, discloses that
the Debtors owe the firm $35,000 for prepetition work.
Additionally, from time to time, Mr. Restivo discloses, Reed
Smith has also represented Grace co-defendants, including
Pittsburgh Corning Corporation, Owens-Illinois, GAF Corporation,
AC&S Corporation and other peripheral defendants, under cost-
sharing agreements. Reed Smith serves as bankruptcy counsel to
Pittsburgh Corning in its own chapter 11 cases. (W.R. Grace
Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


WARNACO GROUP: Selling New York Condominium For $675,000
--------------------------------------------------------
The Warnaco Group, Inc. seeks an order:

      (i) approving and authorizing the sale of a condominium
apartment located at 80 Park Avenue, Apartment #15J, in New York
City, free and clear of all liens, claims and encumbrances, to
Steven Chernys for a gross sales price of $675,000; and

     (ii) approving and authorizing the payment by the Debtors,
out of the sale proceeds, of a real estate commission equal to
6% of the Purchase Price (or $40,500) to the Debtors' real
estate broker for the NYC Apartment, Douglas Elliman, at the
closing.

Although the sale of the NYC Apartment is not being consummated
pursuant to a plan of reorganization, the Debtors ask Judge
Bohanon to exempt it from any transfer tax, stamp tax or other
similar tax, pursuant to sections 105(a) and 1146(c) of the
Bankruptcy Code.

J. Ronald Trost, Esq., at Sidley Austin Brown & Wood, in New
York, relates that the NYC Apartment has been used to provide
overnight lodging, in lieu of a hotel room, for non-resident
employees of the Debtors in New York City on company business.

Prior to the Petition Date, Mr. Trost reveals, the Debtors have
already determined that it was no longer necessary to maintain
the NYC Apartment and so they listed it up for sale with a local
real estate broker. Mr. Trost notes that Douglas Elliman
marketed the NYC Apartment since late April to 60 interested
parties. A month later, the Debtors entered into a contract of
sale with Steven Chernys.  According to Mr. Trost, Chernys
deposited 10% of the purchase price, $67,500, with the Debtors'
local real estate counsel, Frankfurt Garbus Kurnit Klein & Selz,
P.C., which is acting as escrow agent for the transaction.
Chernys will be turned over the rest of the money to the Debtors
at the closing of the sale.

The Debtors believe that Mr. Chernys' office is the highest and
best price obtainable. Though other offers were lesser than the
purchase price, Mr. Trost explains, payment was subject to
financing. On the other hand, Mr. Chernys is willing to pay in
cash.

Mr. Trost notes the liens of the Post-Petition Lenders and the
Pre-Petition Lenders on the NYC Apartment will attach to the
proceeds of such sale, subject to the provisions of the DIP
Financing Agreement. (Warnaco Bankruptcy News, Issue No. 4;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


WINSTAR COMM: Court Grants Presscom's Request To Modify Stay
------------------------------------------------------------
Allan Wendelburg, Esq., in Hockessin, Delaware relates that
PressCom Inc. and the National Press Building Limited
Partnership entered into a Concession Agreement in March 1996.
Under the agreement, PressCom provided telecommunications
services such as local calling, long distance calling and
Internet access in the National Press Building located at 529
14th Street, N.W., Washington, D.C.

According to Mr. Wendelburg, the Resource/Press Building Realty
LLC is believed to succeed all the rights and obligations under
the agreement when it acquired the building. Under the
agreement, Mr. Wendelburg notes, the Resource/Press Building
Realty agreed that "it will not grant a right or license to any
person or entity, which would allow such person or entity to
offer or provide services included in the" shared system. At the
time of the Agreement, Mr. Wendelburg explains, some tenants in
the building are already subscribed to telecommunications
service providers other than PressCom. But this is fine, Mr.
Wendelburg says, because the Agreement accommodates these
preexisting systems.

The parties are already halfway through the 10-year agreement.
But in the early fall of last year, Mr. Wendelburg says,
PressCom personnel observed the Debtors delivering
telecommunications equipment to the building. PressCom believes
this is a violation of the agreement. When PressCom confronted
National Press Building Limited Partnership, Resource/Press
Building Realty, and the Debtors through letters, their
concern was downplayed. National Press Building Limited
Partnership, Resource/Press Building Realty, and the Debtors
claim the telecommunications services to be offered by the
Debtors do not violate the agreement.

But PressCom believes otherwise. On March 8, 2001, PressCom went
to court seeking a temporary restraining order, preliminary and
permanent injunctive relief and declaratory relief to protect
its rights under the Agreement. The Superior Court issued a TRO
a few days later. In their argument, PressCom pointed out that
providing telecommunications services in the building is their
only business while the Debtors provide telecommunications
services to thousands of other entities. The entry of the
Debtors in the building will destroy PressCom, Mr. Wendelburg
warns.

Because the Winstar Communications, Inc. Debtors filed these
chapter 11 cases and out of deference for the bankruptcy
process, PressCom filed a motion requesting the Bankruptcy Court
to lift the automatic stay for the limited purpose of:

      (i)  allowing the preliminary injunction hearing at the
           District of Columbia Superior Court Action entitled,
           PressCom Inc. versus National Press Building Limited
           Partnership, et al, to go forward against the Debtors
           on July 19, 2001; and

      (ii) allowing the temporary restraining order issued in the
           Civil Action to continue against Winstar until July
           19, 2001.

Judge Farnan granted PressCom's motion. In the event that
PressCom's motion for preliminary injunction is granted on July
19, 2001, Judge Farnan orders the Debtors to comply with that
relief, pending a trial on the merits of PressCom's Civil
Action. But it is provided however,Judge Farnan clarifies, that
PressCom shall be required to renew its motion in this Court for
a lifting of the automatic stay. This will require the Debtors
to appear and defend itself in any trial on the merits of the
Civil Action, Judge Farnan explains. It is also in order
for any decision or judgement issued in any trial on the merits
of the Civil Action to apply to Winstar, including, but not
limited to, if the court in the Civil Action should consolidate
the hearing on the preliminary injunction with a trial on the
merits and issue a permanent injunction. But if the trial on the
merits is set sooner than 90 days after the ruling by the court
in the Civil Action, Judge Farnan adds, PressCom's motion to
lift the automatic stay shall be deemed renewed as of the date
of the ruling in the Civil Action.

PressCom will be required to notify the Debtors of the ruling in
the Civil Action within 3 business days of that ruling. In turn,
the Debtors will promptly file its objection, with a hearing on
PressCom's renewed motion to lift the automatic stay to occur on
an expedited basis no later than 45 days after the court's
ruling in the Civil Action. (Winstar Bankruptcy News, Issue No.
8; Bankruptcy Creditors' Service, Inc., 609/392-0900)

                            *********

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For copies of court documents filed in the District of Delaware,
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of Delaware, contact Ken Troubh at Nationwide Research &
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                           *********

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

Troubled Company Reporter is a daily newsletter co-published by
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Copyright 2001.  All rights reserved.  ISSN: 1520-9474.

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