TCR_Public/010814.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, August 14, 2001, Vol. 5, No. 158

                            Headlines

360NETWORKS INC.: Seeks To Employ Ordinary Course Professionals
360NETWORKS: Will Report Second Quarter Results by September 15
AARO BROADBAND: Needs To Raise Capital To Sustain Operations
AMERICAN AIRCARRIERS: Has Until Sept. 28 To Solicit Plan Votes
AMF BOWLING: Asks Court For More Time to Make Lease Decisions

BIG V: Court Ruling Upholds Wakefern Stockholders' Agreement
BRIDGE INFORMATION: Contractors Move To Enforce Mechanic's Liens
COMDISCO INC.: Proposes Procedures In Assigning Contracts
COMDISCO: Bidding Procedures For Availability Solutions Okayed
COVAD COMM.: Reon Broadband Offers Free Connections to Customers

EDWARDS THEATRES: Plan Confirmation Hearing Set For September 19
EDWARDS THEATRES: Summary of Second Amended Chapter 11 Plan
EERIE WORLD: Selling All Assets To Eerie World Acquisition
ERD WASTE: Moves To Dismiss Case
FINOVA GROUP: Court Okays Amended Berkshire/Leucadia Agreements

FINOVA GROUP: Court Confirms Reorganization Plan
FOCAL COMM.: Fitch Cuts And Puts Ratings On Watch Negative
FURRS SUPERMARKET: Fleming Opts Not to Acquire Four More Stores
ICG COMM.: Asks Court To Extend Exclusive Period To December 10
GRAHAM-FIELD: Seeks Court Approval for Bay Shore Property Sale

INTERACTIVE NETWORK: Perkins Capital Reports 16.9% Equity Stake
INTERVISUAL BOOKS: Nasdaq Delists Shares
ISTAR FINANCIAL: Fitch Rates Senior Unsecured Notes At BB+
LOEHMANN'S HOLDINGS: Stockholders' Meeting Set For September 21
LOEWEN GROUP: Wants Wachovia Bank to Return Collateral

LOEWEN GROUP: Reports Second Quarter 2001 Operating Results
LTV CORP.: Copperweld Promotes 3 Heads For Tubular Product Group
MARINER: Moves To Ratify NHP Lease Portfolio Settlement
MORRIS MATERIAL: Delaware Court Confirms Chapter 11 Plan
MOSLER INC.: BVI Offers Support to Former Customers & Employees

NETSOL INTERNATIONAL: Cary G. Burch Resigns From Board
OWENS CORNING: Court Approves Settlement Agreement With CARLY
POLAROID CORP.: Receives One-Month Extension of Bank Waivers
PSA INC: Court Approves First Amended Disclosure Statement
PSA INC: Court Stretches Lease Decision Period Through August 31

RELIANCE: Rehabilitator Moves To Remand Commonwealth Actions
RHYTHMS NETCONNECTIONS: Cuts Jobs & Halts Service For 31 Days
STELLEX TECHNOLOGIES: Wants More Time To Solicit Votes For Plan
TANDYCRAFTS INC: Names Jeff Pecora As New President For Pinnacle
TRISTAR CORPORATION: Files For Chapter 11 Protection

TRISTAR CORP.: Case Summary & 20 Largest Unsecured Creditors
VLASIC FOODS: Paying Prepetition Shipping-Related Claims
WHEELING-PITTSBURGH: Settles Disputes With Trustees For IRBs
WINSTAR COMM.: Court Approves Interim Compensation Procedures

                            *********

360NETWORKS INC.: Seeks To Employ Ordinary Course Professionals
---------------------------------------------------------------
360networks inc. desires to continue the employment of
professionals used in their ordinary course of business.  Such
services include legal services regarding specialized areas of
law, accounting, and other matters requiring professional
expertise.

Alan J. Lipkin, Esq., at Willkie Farr & Gallagher, in New York,
explains that it would be impractical and inefficient for the
Debtors to submit individual applications and proposed retention
orders for each Ordinary Course Professional.  Moreover, Mr.
Lipkin adds, continuing to employ Ordinary Course Professionals
would enable the Debtors to carry out their normal business
activities without the disruption from terminating their
relationships with the Ordinary Course Professionals and
locating, retaining, and familiarizing other competent
professionals.

Mr. Lipkin emphasizes that these Ordinary Course Professionals
will not be involved in the administration of these cases, but
will provide services concerning the Debtors' ongoing business
operations:

     (1) Cline, Williams, Wright, Johnson & Oldfather, L.L.P.
     (2) Davis Wright Tremaine LLP
     (3) Davis Graham & Stubbs LLP
     (4) Law Office of Herman Fitzgerald
     (5) Troutman Sanders Mays & Valentine
     (6) Smith Katzenstein & Furlow
     (7) SPM Law, LLP
     (8) Blumenfield & Cohen

The Debtors also seek the right to retain additional Ordinary
Course Professionals as the need arises.  In that event, Mr.
Lipkin says, the Debtors will file a notice with the Court
stating their intention to employ additional Ordinary Course
Professionals and will serve a copy of the notice to:

    (a) the Office of the United States Trustee;

    (b) counsel to the agents under the Debtors' pre-petition
        working facility;

    (c) counsel to the Official Committee of Unsecured Creditors;
        and

    (d) all other parties that have filed a notice of appearance
        in these cases.

If no objections are filed within 15 days of service, the
Debtors request that the retention of the additional Ordinary
Course Professional(s) be deemed approved by the Court without
the need for a hearing or further order.

Within 30 days of the entry of an order granting the application
or the engagement of an Ordinary Course Professional by the
Debtors, Mr. Lipkin relates, such professional would serve upon
the Office of the United States Trustee and the Debtors and file
with the Court:

    (a) an affidavit certifying that such professional does not
        represent or hold any interest adverse to the Debtors or
        their estates with respect to the matter on which such
        professional is to be employed; and

    (b) a completed retention questionnaire.

Mr. Lipkin tells Judge Gropper that each Ordinary Course
Professional would be paid 100% of the fees and disbursements
incurred, without prior application to the Court, up to the
lesser of:

    (a) $25,000 per month on a cumulative basis per Ordinary
        Course Professional, or

    (b) $300,000 per month, in the aggregate, for all Ordinary
        Course Professionals.

If an Ordinary Course Professional seeks more than $25,000 per
month on a cumulative basis, then that professional would be
required to file a fee application for the full amount of its
fees.

                 Creditors' Committee Objects

The Official Committee of Unsecured Creditors contends that the
motion should be denied because the Debtors propose to:

    (a) hire certain ordinary course professionals without
        adequately explaining the need therefor, and

    (b) pay such professionals up to $3,600,000 per year, in the
        aggregate, without any review by the Court, or any other
        entity, for reasonableness.

According to the Committee, the Debtors should not be permitted
to saddle their estates with these types of obligations without
making an adequate showing that such services are actually
needed.

Assuming that the Committee finds such professionals necessary,
Norman N. Kinel, Esq., at Sidley Austin Brown & Wood, argues,
the dollar amounts to be authorized should be significantly
reduced. The Committee believes that the monthly cost to employ
the Ordinary Course Professionals is too high given the Debtors'
financial projections in these cases.

Given the predictions that the Debtors have made regarding the
availability of a distribution to unsecured creditors in these
cases, the Committee asserts that it is inappropriate to approve
the motion based on the scant information provided. (360
Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


360NETWORKS: Will Report Second Quarter Results by September 15
---------------------------------------------------------------
360networks announced the company expects to file its second
quarter 2001 financial statements and the related management's
discussion and analysis by September 15, 2001.

The company has determined it will be unable to complete all the
work necessary to finalize the financial report for the six
months ended June 30, 2001 by the prescribed due date of August
29. The delay is a result of the additional requirements created
by 360networks seeking creditor protection and the decrease in
finance personnel due to its workforce reduction.

360networks intends to comply with the provisions of the
Alternate Information Guidelines contained in the Ontario
Securities Commission Policy 57-603, including issuing a default
status report every two weeks until the second quarter 2001
results are issued.

                    About 360networks

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

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


AARO BROADBAND: Needs To Raise Capital To Sustain Operations
------------------------------------------------------------
Aaro Broadband Wireless Communications Inc.'s main activities
have consisted of acquisitions of building access rights, hiring
management and other key personnel, raising of funds,
development of operating systems and purchase and deployment of
equipment and network. Since May 1, 2000, the Company has
initiated commercial service using its fixed wireless broadband
technology in three cities.

The Company's losses, as well as negative operating cash flow,
have been significant to date, and management expects both to
continue until the Company can generate a customer base through
the combined efforts of direct sales and distributorships that
will generate revenues to fund operating expenses. After the
Company initiates service in its market areas, management
expects to have positive operating margins by increasing the
number of customers, and selling additional capacity or services
without significantly increasing related capital expenditures or
operating costs. The Company's ability to generate positive cash
flow will depend on capital expenditures in new market areas,
competition in current market areas and any potential adverse
regulatory developments.

Part of the Company's strategy is to utilize a distributorship
network to expand the customer base and achieve greater market
penetration more rapidly. Management believes that by
implementing this strategy, the Company can capitalize on
distributors' familiarity with their market area, customer
affiliations, financial strength and their experienced personnel
and minimize the Company's requirements for incremental
expenditures.

The planned expansion of the Company's business will require
significant capital to fund capital expenditures, working
capital needs, debt service and the cash flow deficits generated
by operating losses and current cash balances will not be
sufficient to fund the current business plan. As a consequence,
the Company is currently seeking additional debt and/or equity
financing as well as distributorship arrangements to fund
liquidity needs. In the event that the Company is unable to
obtain additional funds or to obtain funds on acceptable terms
or in sufficient amounts, the Company will be required to delay
the development of its network or take other actions. This could
have a material adverse effect on the Company's business,
operating results and financial condition and ability to achieve
sufficient cash flow to service debt requirements and meet
operating expenditures.

In view of the matters described in the preceding paragraph,
recoverability of a major portion of the company's recorded
asset amounts is dependent upon continued operations of the
Company, which in turn is dependent upon the Company's ability
to meet its financing requirements on a continuing basis, to
obtain additional financing and to succeed in its future
operations. The company's financial statements do not include
any adjustments relating to the recoverability and
classification of recorded asset amounts or amounts and
classification of liabilities that might be necessary should the
Company be unable to continue in existence.


AMERICAN AIRCARRIERS: Has Until Sept. 28 To Solicit Plan Votes
--------------------------------------------------------------
By order of the U.S. Bankruptcy Court, District of Delaware,
entered on July 31, 2001, American Aircarriers Support, Inc., et
al. was granted an extension of its exclusive proposal period
from June 29, 2001 through July 30, 2001. The exclusive
solicitation period is extended from August 29, 2001 through
September 28, 2001.


AMF BOWLING: Asks Court For More Time to Make Lease Decisions
-------------------------------------------------------------
AMF Bowling Worldwide, Inc. seeks an order extending the
deadline by which they are required to decide whether to assume
or reject their unexpired leases of non-residential real
property.  The Debtors ask for an extension through and
including January 2, 2002.

As of the Petition date, the Debtors are parties to over 179
Unexpired Leases of Non-Residential Real Property.

Dion W. Hayes, Esq., at McGuireWoods LLP, in Richmond, Virginia,
explains that the decision to assume or reject the Debtors'
unexpired leases will play a crucial role in the reorganization
process and future business plan.

Thus, Mr. Hayes contends, the Debtors should not be forced to
make these decisions until they have had a reasonable
opportunity to stabilize their post-petition operations.
Otherwise, Mr. Hayes says, the Debtors might risk the
inadvertent rejection of a valuable lease or the premature
assumption of an undesirable one with attendant administrative
expense obligations.

Given the importance of the unexpired leases to the Debtors'
continued operations and the significance of the issues that the
Debtors must consider in deciding whether to assume or reject
the Unexpired Leases, Mr. Hayes argues that it would be
impossible for the Debtors to make a reasoned decision within
the initial 60-day period.

So, Mr. Hayes explains, the Debtors need more time to focus
their efforts on the negotiation of the business terms of the
consensual plan of reorganization with major creditors.  In
connection with these negotiations, Mr. Hayes tells the Court,
the Debtors will be carefully considering how each of the
unexpired leases will contribute to their overall business
enterprises and their ability to consummate any plan of
reorganization that may be proposed.

Mr. Hayes assures Judge Tice that the Debtors have the necessary
financial resources and intend to perform timely all of their
obligations under the remaining unexpired leases as to the
extent required by section 365(d)(3) of the Bankruptcy Code.

                         Objections

(A) Bailey

Charles L. Bailey and Kathryn Bailey object to the Debtor's
motion to extend the Assumption/Rejection Period.

Theodore I. Brenner, Esq., at Brenner, Evans & Yoffy, in
Richmond, Virginia, relates that Bailey and AMF Bowling, Inc.
are parties to lease agreement of a certain real property
situated in the Town of Bland, Gasconade County, Missouri (the
Bland Property).  According to Mr. Brenner, the Bland Property
is one of the leases specifically identified in the Debtors'
motion.

AMF Bowling, Inc., the lessee for the Bland Property, is not a
debtor in this action, Mr. Brenner argues.  For that reason, Mr.
Brenner contends, AMF Bowling, Inc. has no standing to pray for
the relief requested in the Debtors' pending motion.

(B) Herricks Fore Plan, Inc.

Herricks Fore Plan, Inc. is the landlord of AMF Bowling Centers,
Inc. for premises located at 69-10 34th Avenue, Woodside, New
York 11803, known as "CTR No. 210".

Herricks objects to the Debtors' motion because they believe the
120-day extension sought is "inappropriate and unwarranted".

Lara P. Emouna, Esq., at Gleich, Siegel & Farkas, in Great Neck,
New York, informs the Court that Herricks would consent to a
short period, like an extension of 60 to 90 days.

Ms. Emouna argues that such a long extension is contrary to the
mandate of the 1984 Code Amendments to Section 365(d)(4).
According to Ms. Emouna, the Court should not only consider the
size and complexity of the bankruptcy estate but would the
mandate of Section 365(d)(4).  Ms. Emouna appeals to Judge Tice
to also consider the hardship foisted upon landlords as a result
of the bankruptcy and their need to not be left indefinitely on
"tender hooks" as to their leases.

(C) Kimco Realty Corporation, MC Corp., and Kimsward

Kimco Realty Corporation, MC Corp., and Kimsward are landlords
to the Debtors with respect to certain non-residential property
located at San Antonio, Texas and Hamden, Connecticut.

The Landlords want the Court to deny the Debtors' motion or
shorten the period for extension.

Section 365(d)(4) of the Bankruptcy Code provides that a debtor
must move to assume or reject an unexpired lease of non-
residential property within 60 days after the order for relief
or the lease will be deemed rejected.  According to Neil E.
Herman, counsel for the landlords, this section clearly intends
to provide the commercial real property lessor with special
rights and bestows a certain degree of certainty and protection
by:

    (i) placing the burden squarely upon the debtors to
        demonstrate "cause" prior to any extension, no matter how
        short in duration, and

   (ii) fixing an early, certain date (60 days) for assumption or
        rejection.

But Mr. Herman contends that the Debtors' request for an
extraordinary length of time to make assumption/rejection
decisions is contrary to this bankruptcy provision.

Mr. Herman argues that, "there is no factual basis whatsoever
for granting the extraordinary relief sought".  Mr. Herman
reminds the Court that the Debtors failed to submit a sworn
affidavit of an officer, employee or agent of the Debtors.
Thus, Mr. Herman says, an open-ended extension cannot be
factually justified on the basis of unsworn averments of
counsel.

Like Herricks, the landlords are amenable to a 60 or 90-day
extension.

(D) Eflow Investment Trust II

M&W Bowling Corporation and Eflow Investment Trust II are
parties to a lease agreement dated November 1957.  Under the
agreement, Eflow agreed to construct a building to M&W's
specifications on a property owned by Eflow, which is located at
1523 West San Carlos, San Jose, California.  Eflow also agreed
to rent this building to M&W.

American Recreation Centers Inc. is the successor-in-interest to
M&W's rights and obligations under the Lease.  American
Recreation Centers Inc. is a California corporation and one of
the Debtors.  The Debtor currently operates an AMF Fiesta Lanes
bowling center in the building.

The current term of the lease is scheduled to expire on year
2013.

David R. Ruby, Esq., on behalf of Bernard M. Wolfe who is
trustee and attorney-in-fact for the Eflow Investment Trust II,
discloses that the Debtor is in default under numerous
provisions of the Lease:

   (1) The Debtor is in default in the payment of its percentage
       rent obligations.  The Debtor's rent is based on a base
       rate plus a percentage of gross income.

   (2) The Debtor is in default in its obligations to operate the
       250-seat restaurant business on the premises.  The
       restaurant currently is vacant (which exacerbates the
       Debtors' inability to generate income from the bowling
       center operations).

   (3) The Debtor is in default for failure to maintain the
       premises in good repair as evidenced by, among other
       things, dead shrubs and other landscaping problems,
       numerous potholes in the parking lot and the crumbling
       building facade.

   (4) The Debtor is in default for failure to provide financial
       statements prepared by a CPA indicating gross income --
       for the past three years.

In addition, Mr. Ruby claims, there are reports of drug and
prostitution activities behind the building.

"The lease currently does not generate any more income to the
Lessor (Eflow) on a dollar for dollar basis than it did when the
lease commenced in 1958, as the restaurant is closed and the
bowling alley and the premises are in utter disrepair," Mr. Ruby
tells the Court.  Mr. Ruby argues that the Debtor's apparent
disregard and contempt for both the condition of the premises
and the volume of the business that is generated therein
constitutes a breach by the Debtor.  According to Mr. Ruby, the
Debtor has an implied duty of good faith and fair dealing to
Eflow.  The Debtor's neglect, Mr. Ruby notes, has caused Eflow
to suffer damages from the lack of percentage rent paid under
the lease.

Mr. Ruby informs Judge Tice that the premises is now zoned as a
planned development or high-density residential area.  Thus, Mr.
Ruby notes, the Debtor's bowling center is no longer compatible
with the current use of the surrounding properties.

According to Mr. Ruby, all these problems were brought to the
attention of the Debtor by written correspondence in 1998, 1999
and 2000.  But the Debtor responded in silence.  Mr. Ruby says
the Lessor was preparing to initiate unlawful detainer
proceedings when the Debtor filed its bankruptcy case early this
month, preventing the Lessor to pursue its legal action.

Mr. Ruby reveals that the Lessor currently has a contract to
sell the premises to a third party.  However, the buyer is too
impatient to wait until January 2, 2002 for the Debtor to
determine whether it wants to assume or reject the lease.  For
this reason, Mr. Ruby explains, the Lessor will be prejudiced if
the sale falls through because of unnecessary delays in
accepting or rejecting the lease.

Mr. Ruby also notes that the Debtor is required to pay property
taxes for the premises.  Under California law, Mr. Ruby
explains, property values are assessed based on the purchase
price of the property, not the current market value.  So if the
Debtor insists to delay their decision on this lease, Mr. Ruby
warns, the property taxes will likely increase more than
tenfold, placing an extreme burden on the Debtor and the
bankruptcy estate.

The Lessor objects to the Debtor's motion on the grounds that
the Debtor is in violation of numerous, substantive violations
under the lease.  Mr. Ruby adds the Debtor has failed to
maintain the 44-year old premises and grounds that it is no
longer profitable for their business.  If the Debtor will
improve and repair the premises, Mr. Ruby says, it would cost
them over $250,000. Therefore, Mr. Ruby concludes, it is
unlikely for the Debtor to operate its bowling center
profitably.  At the same time, Mr. Ruby notes, no third party
would probably be interested in buying the lease.  Thus, Mr.
Ruby says, the Debtor will likely reject this lease due to:

    (i) the prohibitive costs for deferred maintenance and
        capital improvements,

   (ii) the requirement for occupancy and operation of the
        restaurant,

  (iii) anticipated costs of litigation with Lessor over the
        numerous breaches under the lease,

   (iv) increased property taxes upon sale of the premises to a
        third party, and

   (v) the property's incompatibility with current land use
       issues.

So, Mr. Ruby argues, there is simply no reason for the Debtor to
delay in rejecting the lease since it is not integral to their
future business plans or reorganization efforts.

For all these reasons, Bernard M. Wolfe prays that the Debtor's
motion be denied.  Mr. Wolf asks the Court to require the Debtor
to decide whether it will assume or reject the lease within the
original 60-day time frame. (AMF Bankruptcy News, Issue No. 4;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


BIG V: Court Ruling Upholds Wakefern Stockholders' Agreement
------------------------------------------------------------
On August 9, 2001, U.S. Bankruptcy Court, Judge Raymond T. Lyons
ruled in favor of Wakefern Food Corporation in a lawsuit filed
by Big V Supermarkets, seeking a declaratory judgment that would
allow it to leave the Wakefern cooperative without compensating
the cooperative for volume that would be lost because of its
withdrawal.

"We are delighted with the Court's ruling," stated Thomas P.
Infusino, Chairman of the Board, Wakefern Food Corporation.
"Judge Lyons's decision upheld our position that Big V's
withdrawal from the cooperative triggered a payment obligation
under the Wakefern members' Stockholders' Agreement. Big V
sought to leave the cooperative and avoid making the withdrawal
payment despite the benefits of membership in Wakefern that
enabled Big V to grow from a single store to a 32 store chain."
Wakefern estimates that Big V's withdrawal liability is in
excess of $280 million.

The Court's decision follows a two-week trial, in which Wakefern
presented conclusive evidence -- including key admissions from
Big V -- that the Wakefern Stockholders' Agreement is a long-
term supply agreement which bars members from leaving the
cooperative without making a withdrawal payment. Judge Lyons
agreed, holding that this was the clear intent of the parties.
He further held that the implied covenant of good faith and fair
dealing prevented Big V from leaving the cooperative without
making a withdrawal payment.

Judge Lyons also found that Big V's efforts to leave Wakefern
for a new supplier was one step in a series of transactions
leading to the sale of Big V. Under the Stockholders' Agreement,
Big V incurs withdrawal liability in the event of a sale in a
single transaction or a series of transactions.

"Wakefern is a cooperative that was organized nearly 50 years
ago to provide the benefits of large-scale purchasing power to
its independent members. The success of the cooperative depends
on continued high volume purchases from a committed membership
base," said Dean Janeway, Wakefern's President. "Judge Lyons's
ruling upholds our way of doing business, and we look forward to
the continued growth and success of our members under the
ShopRite(R) banner," he continued.

In November 2000, Big V Supermarkets filed for chapter 11
Bankruptcy protection. Big V operates 32 ShopRite(R) stores in
three states and is the largest member of the Wakefern
cooperative.

Wakefern Food Corporation is a retailer-owned cooperative and
the wholesale merchandising and distribution arm for ShopRite(R)
supermarkets. The 41 Wakefern members operate approximately 200
stores under the ShopRite(R) name and are located throughout New
Jersey, New York, Pennsylvania, Connecticut and Delaware.


BRIDGE INFORMATION: Contractors Move To Enforce Mechanic's Liens
----------------------------------------------------------------
Various contractors who performed pre-petition construction work
on Bridge Information Systems, Inc.'s Missouri Data Center and
Office Park Buildings commenced adversary proceedings to obtain
declarations from the Bankruptcy Court that their mechanic's
liens against the Debtors' Properties are valid and enforceable.

(A) Data Center Building

Bridge Data Company owns a property located at 587 James S.
McDonnell Boulevard in Hazelwood, Missouri popularly known as
the Data Center Building.

    (1) Siemens Building Technologies, Inc.

    Siemens provided labor, material and equipment to furnish and
    install an automated environmental energy management system
    on the Data Center Building.  Siemens work was furnished
    under contract with Burr Computer Environments, Inc. as
    original contractor.  The total reasonable value of Siemens
    lienable and unpaid work is $139,578.20 plus interest.

    (2) Jacobsmeyer-Mauldin Construction

    Jacobsmeyer provided structural concrete, labor, materials,
    equipment, supervision and other related work on the Data
    Center Building.  Jacobsmeyer's work was furnished under
    contract with Smith Commercial Contracting, Inc. as original
    contractor.  The total reasonable value of Jacobsmeyer's
    lienable and unpaid work is $181,835.31 plus interest.

    (3) Murphy Company

    Murphy Company provided HVAC and plumbing labor, materials,
    equipment, supervision, and other related work on the Data
    Center Building.  Murphy's work was furnished under contract
    with Burr Computer Environments, Inc., as original
    contractor. Murphy had separate contracts for HVAC work and
    for Plumbing work.  The total reasonable value of Murphy's
    lienable and unpaid work is, $590,862.82, plus interest.

    Murphy's proofs of claim reflect the total principal amount
    of all of Murphy's mechanic's liens plus interest accrued up
    to May 1, 2001, which is $664,049.77 - the sum of $608,030.38
    for the HVAC lien and $55,019.39 for the Plumbing lien.

    (4) Sachs Electric Company

    Sachs provided electrical labor, materials, equipment,
    supervision and other related work on the Data Center
    Building.  Sachs' work was furnished under contract with Burr
    Computer Environments, Inc., and Pillar, Inc., as original
    contractors.   Sachs' proof of claim against the Data Center
    Building is $2,198,668.60

(B) Office Parkway Buildings

    (1) McCarthy Building Companies, Inc.

    McCarthy provided valuable labor, materials, equipment,
    supervision and other related work on and to properties owned
    by Bridge Information Systems America, Inc., located at 700
    and 788 Office Parkway in Creve Coeur, Missouri.  McCarthy's
    work was furnished under contract with Bridge Information
    Systems, Inc.  The total reasonable value of McCarthy's
    lienable and unpaid work is $454,057.91, plus interest.

    McCarthy's proofs of claim reflects the total principal
    amount of all of McCarthy's mechanic's liens filed against
    the Debtor's Properties, plus interest accrued up to May 1,
    2001, which is $461,655.66 -- the sum of $458,417.67 Building
    700 lien and $3,237.99 Building 788 lien.

    (2) Sachs Electric Company

    Sachs provided valuable electrical labor, materials,
    equipment, supervision and other related work on:

            Property                       Debtor/Owner
            --------                       ------------
     717 Office Parkway               Bridge Information Systems,
     Creve Coeur, Missouri 63141                Inc.

     700 Office Parkway               Bridge Information Systems
     Creve Coeur, Missouri 63141             America, Inc.

     744 Office Parkway               Bridge Information Systems
     Creve Coeur, Missouri 63141             America, Inc.

     788 Office Parkway               Bridge Information Systems
     Creve Coeur, Missouri 63141             America, Inc.

     795 Office Parkway               Bridge Information Systems
     Creve Coeur, Missouri 63141             America, Inc.

   Sachs' work was furnished under contract with Bridge
   Information Systems, Inc.; Pillar, Inc.; Air Masters
   Corporation, Collins & Hermann, Inc.; and Hughes Supply, Inc.
   The total reasonable value of Sachs' lienable and unpaid work
   is $2,616,145.62, plus interest.

   Sachs' proofs of claim reflects the total principal amount of
   all of Sachs' mechanics liens filed against the Office
   Parkway Buildings, plus interest accrued up to May 1, 2001,
   which is $478,733.41 - the sum of $93,584.37 for Bridge
   Information Systems, Inc. lien and $385,149.04 for Bridge
   Information Systems America, Inc. lien.

                      *   *   *

In separate adversary complaints, these Contractors request the
Court to declare their mechanic's liens against Debtors'
Properties as valid and enforceable.

The Contractors assert they performed all of their work properly
and free from defects.  According to the Contractors, the
Debtors' properties and improvements were directly benefited
since their work became part of the Debtors' Properties.

The Contractors assure the Court that they already gave all
statutory notices required as a condition to the filing and
enforcing of its statement of mechanic's lien against Debtor's
Property.  This included the timely and proper service of an
Amended Notice of Claim of Mechanic's Lien served on the
registered agents of the Debtor.

The Contractors also claim they timely filed their Statements of
Mechanic's Lien against the Debtors' Properties in the Office of
the Clerk of the Circuit Court of St. Louis County, Missouri
within six months of the last date upon which they provided work
under that account for the project and at least 10 days after
they provided the required statutory notices.

The Contractors also filed a Notice and Amended Notice to
Continue Perfection of a Lien in this matter.  Then they assert
that their mechanic's liens against the Debtors' Properties are
properly perfected.

Under the so-called "first spade rule" applicable to Missouri
mechanic's liens, the Contractors' mechanic's lien relates back
to the first date upon which any visible project work was
commenced on the Property upon which the mechanic's lien
attaches.  According to the Contractors, the Project "start
date" took place prior to February 15, 2001 while the Mechanic's
Lien relates back to a date preceding February 15, 2001.

     Contractor             Lien             Project Start Date
     ----------             ----             ------------------
     Siemens       Automated Environmental        01/04/00
                   Energy Management System
     Jacobsmeyer   Structural Concrete Work       09/99
     Murphy                 HVAC                  09/99
                          Plumbing                09/99
     McCarthy            Building 700             04/99
                         Building 788             04/99

The Contractors filed their proofs of claim in this bankruptcy
proceeding for the Mechanic's Lien against the Debtors'
Properties last May 2001.  To date, the Contractors note, no
objections have been filed against their proofs of claim.  Thus,
pursuant to Federal Rule of Bankruptcy Procedure 3001(f), the
Contractors contend that the Court should presume their proofs
of claim as valid.  The Contractors further maintained that
pursuant to 11 U.S.C. section 506(b), they are entitled to
accruing interest on its prior perfected Mechanic's Lien claims.

Under Missouri law, the Contractors assert, the "first spade
rule" also applies with respect to the priority among certain
liens.  The "first spade rule" provides that, "the lien for work
and materials shall be preferred to all other encumbrances,
which may be attached to or upon such buildings, bridges or
other improvements, or the ground, or either of them, subsequent
to the commencement of such buildings or improvements".

With the exception of the property located at 717 Office
Parkway, Sachs contends that its mechanic's liens are prior to
any other recorded interest in the properties.

According to Sachs, the property located at 717 Office Parkway
have three deeds of trust that were recorded before there was
visible work on the property:

       Grantee                         Amount      Date Recorded
       -------                         ------      -------------
     The Travelers Insurance         $7,200,000       09/30/85
     The Travelers Insurance         $2,250,000       09/30/85
     United Services Life            $4,500,000       01/31/94
        Insurance Company

But Sachs is not aware of the current status of these three
deeds of trust.

The Contractors remind the Court of the Reuters Sale Order,
which provides that a segregated fund is being maintained in an
interest-bearing account for the payment of:

   (a) Siemens' mechanic's lien in the amount of $139,579.20

   (b) Jacobsmeyer's mechanic's lien in the amount of $207,600.16

   (c) Murphy's mechanic's lien in the amount of $730,454.75

   (d) McCarthy's mechanic's lien in the amount of $507,821.23

   (e) Sachs' mechanic's lien in the amount of $2,945,142.50

But the payment is only made upon a determination of the
validity, priority, force, effect, extent and/or value of the
Contractors' mechanic's liens.  This is why the Contractors want
the Court to declare their mechanic's liens as valid,
enforceable, and prior to all other encumbrances.

The Contractors also want the Court to order that these trust
funds be paid directly to them immediately upon the closing of
the Reuters Sale.

Siemens also requests that a judgement be entered against Burr
Computer Environments, Inc. in the principal sum of $139,578.20
plus interest at the statutory rate from May 1, 2001 and its
costs and fees incurred herein,

                             *   *   *

                       Some Defendants Respond

(A) Harris Trust and Savings Bank

     Harris Trust and Savings Bank, as administrative agent under
     the Second Amended and Restated Credit Agreement, claims an
     interest:

     (i) in the Office Parkway Building 788 by virtue of a Deed
         of Trust recorded in July 2000; and

    (ii) in the Data Center Building by virtue of a Deed of Trust
         executed by Bridge Data Company to Steven D. Korenblat,
         Trustee for Harris Trust and Savings Bank recorded July
         2000 in Book 1264, Page 186 in the office of the St.
         Louis County Recorder of Deeds.

    Norman W. Pressman, Esq., at Goldstein & Pressman, explains
    that Harris is still in the process of evaluating the
    claims of Jacobsmeyer, McCarthy, Murphy and Sachs.  Thus, Mr.
    Pressman says, Harris reserves its right to make any
    objection to the proofs of claim if it deems appropriate.

    Mr. Pressman also argues that the Reuters Sale has not
    occurred, therefore, Harris denies that Jacobsmeyer,
    McCarthy, Murphy and Sachs are entitled (at this time) to
    have any such amount segregated for its benefit.

    Harris requests the Court to deny the relief requested by
    Jacobsmeyer, McCarthy, Murphy and Sachs.

(B) State Farm Life Insurance Company

    State Farm Life Insurance Company asserts that its deed of
    trust on Office Parkway Building 700 has priority over and is
    superior to any interest, which McCarthy and Sachs may assert
    in the form of a mechanic's lien upon the property.

    State Farm prays that the adversary complaints filed by
    McCarthy and Sachs be dismissed.

    But if the Court declares that McCarthy and Sachs have valid
    and enforceable mechanic's liens which is deemed perfected
    against the property, State Farm requests the Court to also
    declare that the lien established in favor of State Farm
    pursuant to its deed of trust upon said property is superior
    to the mechanic's lien of McCarthy and Sachs.

(C) Travelers Insurance

    Travelers informs the Court that it no longer possesses,
    maintains or asserts an interest in or to 717 Office Parkway.
    As long as its proof of claim against the bankruptcy estate
    of Bridge Information Systems is not compromised, Travelers
    does not object to Sachs' request for relief in this
    adversary proceeding.

(Bridge Bankruptcy News, Issue No. 13; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


COMDISCO INC.: Proposes Procedures In Assigning Contracts
---------------------------------------------------------
Once the Successful Bidder(s) for Comdisco, Inc.'s Leasing
Business are determined, many executory contracts and unexpired
leases will have to be assumed and assigned.  The Debtors
propose to implement these procedures in connection with the
assumption and assignment of their contracts and leases:

   1) Within ten (10) business days after entry of an order
      approving the Bidding Procedures, the Debtors will file a
      notice (the "Cure Notice"), substantially in the form
      attached hereto as Exhibit E,  with the Court and serve
      such Notice on each non-debtor party to those executory
      contracts and unexpired leases that the Debtors' determine,
      in the exercise of their business judgment, are necessary
      to maximize value of any proposed transaction(s).

   2) The Cure Notice shall state the cure amounts that the
      Debtors believe are necessary to assume such contracts and
      leases pursuant to section 365 of the Bankruptcy Code (the
      "Cure Amount") and notify the non-debtor party that such
      party's contract or lease may be assumed and assigned to a
      purchaser of the Debtors' Leasing Assets to be identified
      at the conclusion of the Auction.  The Cure Notice shall
      set a deadline by which the non-debtor party shall file an
      objection to the Cure Amount and shall set a hearing (the
      "Cure Hearing") to determine any objections to the Cure
      Amount.  In this Motion, the Debtors request that the Court
      set the deadline to object to any Cure Amount at 10 days
      after service of such notice.

   3) Within two (2) business days after conclusion of the
      Auction, the Debtors shall file a notice (the "Assumption
      Notice"), substantially in the form attached hereto as
      Exhibit F, that identifies the Successful Bidder(s) and
      describes the basis for the Debtors' belief that there is
      adequate assurance of the Successful Bidder(s)' future
      performance under such Assigned Contracts.  The Assumption
      Notice shall set a deadline by which the non-debtor party
      to an Assigned Contract shall file any objections to the
      assumption and assignment (the "Assignment Objection
      Deadline").

At the Sale Hearing, the Debtors plan to request entry of an
order requesting approval of the assumption and assignment of
any Assigned Contracts to the Successful Purchaser(s). (Comdisco
Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


COMDISCO: Bidding Procedures For Availability Solutions Okayed
--------------------------------------------------------------
Comdisco, Inc. (NYSE: CDO) announced that the U.S. Bankruptcy
Court for the Northern District of Illinois approved consensual
bidding procedures proposed by the Company related to the
proposed sale of Comdisco's Availability Solutions (Technology
Services) business to Hewlett-Packard Company. The bidding
procedures were supported by the Company's Official Committee of
Unsecured Creditors and several prospective bidders that had
earlier filed objections to the bidding procedures.

Among other matters, the Court accepted Comdisco's proposed bid
deadline of September 30, 2001 and auction date of October 11,
2001 for competitive bidding to determine whether a higher or
otherwise better offer should be considered, and set October 23,
2001 as the sale hearing date to consider approval of the
Hewlett-Packard or alternative transaction. In the event that
the Court approves the proposed sale to Hewlett-Packard, the
transaction is scheduled to close on November 16, 2001,
approximately thirty days later than the original closing
deadline. As announced on July 16, 2001, Comdisco has reached a
definitive agreement to sell this business to Hewlett-Packard
Company for $610 million.

Norm Blake, Chairman and Chief Executive Officer, said: "We are
pleased that the bankruptcy court and our creditor
representatives are continuing to be supportive of our efforts
to move Comdisco through the reorganization process in an
efficient and effective manner. Just three weeks into our
reorganization cases, approval of the bidding procedures for the
sale of the Availability Solutions business is an important
milestone for the company, as well as our customers, employees
and business partners."

Simultaneously with entering into the agreement with Hewlett-
Packard on July 16, Comdisco, Inc. and 50 domestic U.S.
subsidiaries filed voluntary petitions for relief under chapter
11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for
the Northern District of Illinois. The filing will allow the
company to provide for an orderly sale of its services business,
while resolving short-term liquidity issues and enabling the
company to reorganize on a sound financial basis to support its
ongoing businesses.

The Bankruptcy Court also considered and granted all relief
requested by Comdisco at an omnibus hearing on nineteen other
separate matters. Among the matters receiving approval were:

   * Comdisco's employee retention, incentive and severance
     programs for all of its employees (the Company's programs
     for certain senior management employees and its emergence
     program will be considered at the August 23, 2001 omnibus
     hearing previously scheduled by the Bankruptcy Court);

   * Continuation of Comdisco's full-scale ordinary course
     business operations in its Leasing, Services and Ventures
     business units including authority to pay certain
     prepetition claims, sell and lease assets, and manage loan
     portfolios;

   * Continuation of Comdisco's worldwide cash management program
     and practices including the continuation of intercompany
     transactions with non-debtor affiliates and waiver of
     bankruptcy investment and deposit requirements;

   * Continuation of interim authority to borrow up to $200
     million on the Company's $600 million debtor-in-possession
     financing facility (with final approval for the entire
     facility scheduled for the August 23, 2001 omnibus hearing);

   * Continuation of the wind-down of the Company's former Prism
     business unit including the rejection of certain real
     property leases and authority to divest assets;

   * Establishment of adequate assurance arrangements and
     procedures for utilities providing services to Comdisco; and

   * Retention of Comdisco's financial and legal advisors for the
     Company's chapter 11 reorganization cases.

"The combined effect of receiving final approval for
continuation of Comdisco's worldwide cash management system and
practices together with continuation of our full-scale ordinary
course business practices in all of our business units completes
a very successful launch of our reorganization cases for our
Services, Leasing and Ventures businesses," said Mr. Blake.
"We are especially gratified that the extraordinary efforts of
our employees has been recognized through the approval of
competitive and appropriate retention, incentive and severance
programs."

Comdisco's operations located outside of the United States were
not included in the chapter 11 reorganization cases. All of
Comdisco's businesses, including those that filed for chapter
11, are conducting normal operations. Comdisco is continuing to
pursue other strategic alternatives to create value for its
stakeholders, including evaluating the possible sale of certain
of its leasing assets to several interested buyers. The company
intends to reorganize its remaining businesses, including
Comdisco Ventures, on a "fast-track" basis and has targeted
emergence from chapter 11 during early 2002.

                     About Comdisco

Comdisco -- http://www.comdisco.com-- provides technology
services worldwide to help its customers maximize technology
functionality, predictability and availability, while freeing
them from the complexity of managing their technology. The
Rosemont, (IL) company offers a complete suite of information
technology services including business continuity, managed web
hosting, storage and IT Control and Predictability
Solutions(SM). Comdisco offers leasing to key vertical
industries, including semiconductor manufacturing and electronic
assembly, healthcare, telecommunications, pharmaceutical,
biotechnology and manufacturing. Through its Ventures division,
Comdisco provides equipment leasing and other financing and
services to venture capital backed companies.


COVAD COMM.: Reon Broadband Offers Free Connections to Customers
----------------------------------------------------------------
REON(R) Broadband Corp. announced it will offer free
installation of its high-speed broadband services to existing
Covad customers* in the wake of Covad's announcement that it
will reorganize under Chapter 11 of the U.S. Bankruptcy code.
REON, New England's leading provider of in-building broadband
solutions to multi-tenant commercial properties, as well as high
speed private line communications services, will waive all
installation charges and provide special operations assistance
to customers.

REON has successfully converted customers from former DSL
providers, including HarvardNet, Vitts and Rythyms Net
Connections. REON can convert Covad customers from their
existing DSL service to REON's private line T1
network in a short period of time, and provide complete service
and support offerings to buildings already provisioned with
REON's network backbone.

REON currently has its broadband infrastructure in more than 100
commercial office buildings in 58 communities throughout New
England. Through REON's website, http://www.reonbroadband.com,
business owners can see if their building - or a building in
their immediate vicinity - is lit with REON's broadband services
which, include Internet access, Web hosting and e-mail, and
network security.

REON, through its innovative deployment of building-based
broadband and voice services, is reaching typically underserved
business districts with high-speed (T1) Internet connectivity
and related Internet offerings. By establishing connectivity to
these buildings, REON is also creating a community point-of
presence (PoP) which means that both the wired building and
those around it can easily be connected to the same high-speed
switch, creating economies of scale that enable businesses and
communities to advance technologically.

                REON's Broadband Services

REON Broadband provides property owners and tenants with a
single-point of contact in their building for high-speed
Internet access services, data back-up and off-site storage,
network security, and many other advanced communication services
that the company offers as part of its Building Local Exchange
Carrier (BLEC(R)) broadband program.

At no cost to the property owner, REON invests in rewiring
properties with a gigabit Ethernet wiring system capable of
delivering advanced communication services. In addition, by
leveraging strategic relationships with Riverstone Networks
(NASD: RSTN), Juniper Networks (NASD: JNPR), and NetScreen, REON
installs a secure, IP-enabled, broadband solution that includes
dedicated high-speed Internet access and many other Internet
related services.

REON has established relationships with over 75 commercial real
estate property owners and management firms representing more
than 450 properties throughout New England (Mass., N.H., Vt.,
R.I., Conn., and Maine).

Business owners in the communities REON serves can also benefit
from REON's services. REON Broadband has created "High Speed
Zones"(TM) in the communities it serves, whereby business
outside of the multi-tenanted buildings REON serves can receive
REON services.

             About REON Broadband Corporation

REON Broadband Corporation is a building-centric network service
provider headquartered in Marlboro, Mass. REON, "Real Estate On
Net", was formed by a group of real estate and
telecommunications professionals to deliver advanced
telecommunication and data services to multi-tenanted commercial
buildings throughout New England. REON, through its Building
Local Exchange Carrier (BLEC) program, offers tenants always-on
high-speed Internet access, network security, data storage and
additional services. For more information on the company and its
services please visit http://www.reonbroadband.com


EDWARDS THEATRES: Plan Confirmation Hearing Set For September 19
----------------------------------------------------------------
The hearing to consider confirmation of the second amended plan
of Edwards Theatres Circuit, Inc. and its affiliated debtors
will be held on September 19, 2001 at 10:00 AM before the
Honorable Lynne Riddle, U.S. Bankruptcy Court, Central District
of California, Santa Ana Division.


EDWARDS THEATRES: Summary of Second Amended Chapter 11 Plan
-----------------------------------------------------------
The principal provisions of the plan are summarized as follows:

      * Subject to the Investor Group Adjustment, an equity
infusion by the Investor Group (Anschutz and OCM) in an amount
equal to approximately $56 million;

      * Restructuring the Allowed Lender Group, (Bank of America
and lenders that are parties to the Credit Agreement) Secured
Claim;

      * Subject to the Investor Group Adjustment, restructuring
the remaining $9 million in bank debt held by the Investor Group
into the Investor Group Unsecured Subordinated Note;

      * Substantial consolidation of the debtors;

      * Merger of CAMCO into New Edwards;

      * Dissolution of the emerging debtors and vesting of all of
the merging debtors' assets and liabilities into New Edwards,
which shall be 51% owned by the Investor Group and 49% owned by
holders of Class 6 interests, subject to equity reduction, which
reduces the percentage of equity held by Class 6 interests.

      * Non-merging debtors will become wholly owned subsidiaries
of New Edwards.

      * Assumption of the Studio Contracts and the Core Theatre
Leases.

Depending whether the plan is a consensual plan or a cramdown
plan, holders of general unsecured claims will receive either
cash or a consensual plan note or a cramdown plan unsecured
note. The debtors estimate that general unsecured claims total
$52 million.


EERIE WORLD: Selling All Assets To Eerie World Acquisition
----------------------------------------------------------
Pursuant to the order of the US Bankruptcy Court, Southern
District of New York, dated July 30, 2001, a hearing will be
held on September 12, 2001 before the Honorable Cornelius
Blackshear, to consider the motion of Eerie World Entertainment,
LLC, debtor, for entry of an order approving the terms of a sale
of substantially all of the debtor's assets to Eerie World
Acquisition LLC and authorizing the debtor to sell substantially
all of its assets including 100% equity interest in Jekyll &
Hyde Club New York,  LLC,1409 Avenue of the Americas, New York,
NY and various trademarks associated with the restaurant for a
price of $1,750,000. The debtor will consider higher or better
offers for the assets with the initial higher or better offer to
be not less than $1,775,000 with bidding thereafter to be in
increments of not less than $25,000. Proceeds from the sale of
the assets shall be utilized to fund a plan of liquidation.


ERD WASTE: Moves To Dismiss Case
--------------------------------
A motion to dismiss the case was filed by Jack M. Zackin for the
debtor, ERD Waste Corp.  A hearing will be held by the Honorable
Kathryn C. Ferguson on September 5, 2001, Trenton, NJ to
determine whether there is cause for dismissal.


FINOVA GROUP: Court Okays Amended Berkshire/Leucadia Agreements
---------------------------------------------------------------
Upon consideration of The FINOVA Group, Inc.'s motion as well as
objections and responses, including the support of the Equity
Committee for approval of the Amendment, Judge Walsh issued an
order granting the motion in all respects and ordered that any
objections to the motion that were not withdrawn or settled are
overruled.

The Official Committee of Equity Security Holders of FINOVA,
through its counsel Anderson Kill & Olick, P.C. and Rosenthal,
Monhait, Gross & Goddess, P.A., told the Court that it generally
supports the Berkadia Plan.  The Equity Committee takes the
position that while certain provisions in the Plan are
objectionable and both material and significant in order of
magnitude, these are confirmation issues that, the Committee
hopes, will be resolved before the confirmation hearing.

With respect to objectionable issues in the Plan, the Equity
Committee believes that the provisions in the Plan for corporate
governance of the reorganized Debtors are inadequate and
objectionable insofar as they do not provide any role for the
participation of the Equity Committee's constituency in the
ongoing governance of the reorganized Debtors.

The Equity Committee also believes that the ultimate aggregate
value of the equity interests in the reorganized Debtors is
understated because, among other things, loan loss reserves are
overly conservative and also because the financial projections
do not attribute any enterprise value to the Debtors' business
over and above their tangible asset value.  Nevertheless, the
Equity Committee acknowledges that these understatements are
subject to interpretation and opinion.  The Equity Committee
also acknowledges that, under the terms of the Plan, the equity
constituency will benefit from any future enhancements in equity
value by virtue of receiving approximately half of the equity of
the reorganized Debtors, regardless of any current valuations.

The Equity Committee believes that a possible solution to both
of the issues of its concern could be an enhanced role, albeit
still a minority one, for the Equity Committee's constituency in
determining and influencing the future corporate governance of
the reorganized Debtors. In this regard, the Equity Committee is
in discussions with the Debtors and is optimistic of reaching an
agreement with them prior to the hearing on confirmation of the
Plan. (Finova Bankruptcy News, Issue No. 11; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


FINOVA GROUP: Court Confirms Reorganization Plan
------------------------------------------------
The FINOVA Group Inc. (NYSE: FNV) announced that the U.S.
Bankruptcy Court for the District of Delaware has confirmed its
Joint Plan of Reorganization. In connection with the Plan,
Berkadia LLC, an entity jointly owned by Berkshire Hathaway Inc.
and Leucadia National Corporation, has committed to lend $6
billion to FINOVA Capital Corporation. The proceeds of the loan,
together with cash on hand, will be used to make cash payments
to creditors in accordance with the Plan. In addition, through
the issuance of common shares, Berkadia will receive a 50%
ownership interest in FINOVA.

The Court confirmation is expected to result in consummation of
the Berkadia loan and other features of the Plan prior to the
August 31, 2001 expiration of the Berkadia commitment.

The FINOVA Group Inc., through its principal operating
subsidiary, FINOVA Capital Corporation, is a financial services
company. FINOVA is headquartered in Scottsdale, Arizona. For
more information, visit the company's website at
http://www.finova.com


FOCAL COMM.: Fitch Cuts And Puts Ratings On Watch Negative
----------------------------------------------------------
Fitch downgraded Focal Communications' senior secured rating to
'B' from 'B+' and senior unsecured rating to 'CCC+' from 'B' and
has assigned a Rating Watch Negative.

The Negative Rating Watch will be resolved when the company
closes the transactions surrounding its recently announced
recapitalization, meeting the necessary requirements to receive
the $100 million secured convertible note and $50 million
convertible preferred stock from existing private equity
investors. Focal is required to convert 50% of its debt into
equity and obtain waivers from its banks to increase the amount
of secured debt outstanding. The secured debt will replace the
amount available under its current bank facility and will be
senior to the unsecured bondholders but subordinate to the bank
creditors. Thus far, the company has received strong indications
from bondholders owning $280 million of notes that they would
agree to the conversion.

If the company does not close on these transactions, the ratings
will likely fall to a single-C level to reflect the high
probability of bankruptcy. The current ratings incorporate a
successful execution of the recently announced restructuring
plan.

The downgrade reflects the approximate one-year delay in the
improvement in its credit protection measures, pro forma its
restructuring announcement and the increased debt and SG&A
expenses associated with the launch of its new markets and data
services. The company will reach Fitch's 2001 EBITDA target in
the latter part of 2002. The successful execution of this
financing should fill Focal's funding gap, strengthening its
currently weak position within its rating category and allow
Fitch to affirm the ratings.

Upon the initial assignment of the rating, Fitch had expected
Focal's senior secured debt as a percentage of total debt to
remain less than 20%. The inability of the company to access the
public and private equity markets has caused Focal to increase
its reliance on secured debt. The increased secured debt coupled
with the current vastly lower asset recovery values in the
telecommunications sector warrants a two notch differential
between Focal's senior secured and unsecured ratings. Since the
initial rating was assigned, recovery values have fallen
dramatically.

Focal is the only competitive local exchange carrier (CLEC) that
solely targets large business customers, generating robust
revenue per salesperson and below average monthly churn. In
addition, Focal has successfully managed to decrease its
exposure to reciprocal compensation, increasing its corporate
and value-added reseller (VAR) customer base. As of June 30,
2001, 50% of its lines were sold to Internet Service Providers
(ISP) compared to approximately 70% in 2000. Fitch expects
Focal's telecom customer revenue to account for approximately
70% of its future revenue growth. The company states that it
only needs to acquire an approximate 1% market share to
breakeven in a market. This reality exhibits the inherent
advantage that the CLECs have since the local exchange market is
so large, and growing with the demand of data products.


FURRS SUPERMARKET: Fleming Opts Not to Acquire Four More Stores
---------------------------------------------------------------
Steve Mortensen, President and COO of Furrs Supermarkets,
announced that four additional Furrs Supermarkets locations will
be not be acquired as part of Furrs' purchase agreement with
Fleming Companies, Inc.

The following stores are scheduled to be closed on Aug. 17,
2001:

      So:Lo, 4001 East Main Street, Farmington, N.M.
      Furrs, 2513 North Main, Roswell, N.M.
      Furrs, 4340 West Illinois/Midland Dr., Midland, TX
      Furrs, 1590 George Dieter/Vista del Sol, El Paso, TX

Under the collective bargaining agreement, Furrs employees will
be offered the option of relocation to another store where
available -- based on seniority -- or a severance package.

"We were unable to find buyers for these additional store
locations," Mortensen said. "We understand and regret that these
necessary closures are difficult for our employees, and the
communities we serve.

"Our employees have shown tremendous professionalism during
these tough times," he added.

On June 29, the U.S. Bankruptcy Court approved the purchase by
Fleming of 66 Furrs Supermarkets locations in New Mexico and
West Texas. Under the agreement, Fleming could choose not to
acquire up to 27 stores from the final transaction. The purchase
price of $57 million included all real estate, equipment leases,
contracts and licenses. Furrs inventory was also purchased for
an additional $50 million.


ICG COMM.: Asks Court To Extend Exclusive Period To December 10
---------------------------------------------------------------
ICG Communications, Inc. asks Judge Walsh for a second extension
of the time within which they have the exclusive right to file a
plan and solicit acceptances of that plan.  It is impossible,
ICG says, for the Debtors or any other party-in-interest to
propose a confirmable plan at this early stage of the chapter 11
process.  Specifically, the Debtors ask that their exclusive
period during which to propose and file a plan of reorganization
be extended through and including December 10, 2001, and
that they be granted concomitant extension of their exclusive
solicitation period through February 8, 2002.

David S. Kurtz, Esq., at Skadden, Arps, Slate, Meagher & Flom,
argues that the exclusive periods are intended to afford chapter
11 debtors full and fair opportunities to rehabilitate their
businesses and to negotiate and propose a reorganization plan
without the deterioration and disruption of their business that
might be caused by the filing of competing plans of
reorganization by nondebtor parties.  Although ICG has made
significant progress toward rehabilitation since the Petition
Date, given the complexity of their cases, the Debtors seek a
further, four-month extension of their exclusive periods to
afford them additional time to formulate, negotiate, and file a
plan and solicit acceptances of that plan.

The Debtors point out that they are one of the largest
telecommunications companies in the United States, and were one
of the largest cases filed in 2000.  As of year-end 1999, the
Debtors had over 10,000 business customers and approximately 550
internet service providers.  Clearly the sheer size of the
Debtors' cases and concomitant difficulty in finalizing a going-
forward business plan and negotiating a reorganization plan
constitutes cause to further extend the exclusivity periods.  A
four-month extension is described as a "modest" request under
the circumstances.

The Debtors assure Judge Walsh they have begun negotiating a
plan with the Committees and are hopeful that a plan will be
completed within the requested additional time.  In that
context, the Debtors have recently completed a thorough analysis
of complex intercompany claims and issues, and have provided
this analysis to the Committees.  Reaching consensus on these
issues is described as key to any plan in these cases that can
be consensual.  The Committees' review of these issues is
ongoing.  In addition, the Debtors have largely completed their
long-term business plan and have shared that with the
Committees.

The Debtors tell Judge Walsh they are currently engaged in
attempting to secure exit financing to fund their long-term
business plan. Successful completion of these efforts, together
with a resolution of the intercompany claims noted above, will
enable the Debtors to proceed to draft, file and prosecute a
reorganization plan, and emerge from chapter 11.

Since the Petition Date, the Debtors have labored tirelessly to
work with and assure their vendors and customers, among others,
that the Debtors fully intend to meet their ongoing business
commitments during these cases.  Similarly, the Debtors have
gone to great lengths to cooperate with their various creditor
constituencies in efforts to maximize the value of the estates
for the benefit of creditors.  A further extension of these
exclusivity periods will facilitate these efforts by affording
the Debtors time needed to formulate and finalize a plan that
fairly and efficiently treats the claims of the estates'
creditors and provides for the greatest possible distributions
of value on account of those claims.  In contrast, termination
of the exclusivity periods and the uncertainty that would result
from the prospect of competing reorganization plans undoubtedly
would result in lesser values available for distribution to
creditors.

Finally, the requested extensions will not prejudice the
interests of any creditors; the Debtors have timely met, and
continue to timely meet, their postpetition obligations in these
cases.  This fact, alone, strongly militates in favor of the
Court's granting the requested extension. (ICG Communications
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


GRAHAM-FIELD: Seeks Court Approval for Bay Shore Property Sale
--------------------------------------------------------------
Graham-Field Health Products, Inc. seek approval of procedures
for the sale of real property located at 81 Spence Street in Bay
Shore, New York, scheduling an auction and a further hearing to
approve the sale.

Earlier this year the debtors relocated their corporate
headquarters at the Bay Shore Facility to their existing
facility in Atlanta, Georgia. The debtors employed Keen Realty,
LLC as their exclusive real estate broker for the sale.

As a result of Keen's efforts, the debtors received five written
offers to purchase the Bay Shore Facility. The Debtors
determined that the offer for $4.85 million by Duro Dyne Spence
LLC was the highest and best offer. The bid is subject to higher
and better bids, which must6 be received by the Bid Deadline of
4:00 PM, September 14, 2001.

Each initial competing bid must provide for aggregate gross
consideration having a value equal to the purchase price as set
forth in the Duro Dyne Purchase Agreement plus $145,500.
Successive competing bids shall be in increments of aggregate
gross consideration to the seller of no less than $25,000 in
each successive round of bidding.

The debtors seek court approval for a sale approval hearing on
September 21, 2001. The debtors also seek court approval of
payment of a break-up fee to Duro Dyne in the amount of $120,000
if a competing bid is approved or the purchase agreement is
terminated pursuant to certain conditions.

Counsel to the debtors are Janet Weiss, Gibson, Dunn & Crutcher
LLP, New York, NY and Pauline Morgan, Young Conaway Stargatt &
Taylor LLP, Wilmington, DE.


INTERACTIVE NETWORK: Perkins Capital Reports 16.9% Equity Stake
---------------------------------------------------------------
Investment adviser Perkins Capital Management has reported
beneficial ownership of an aggregate of 7,269,000 shares of the
common stock of Interactive Network, Inc., representing 16.9% of
the outstanding common stock of that Company. Perkins Capital
has sole voting power over 2,344,500 of the shares and sole
dispositive power over the aggregate 7,269,000 shares. (This
includes 2,648,000 common equivalents, 2,985,000 warrants
exercisable within 60 days and 800,000 shares convertible as 1
for 2 (or 1,600,000) of a Convertible Note).


INTERVISUAL BOOKS: Nasdaq Delists Shares
----------------------------------------
Intervisual Books, Inc. (IBI) (NASDAQ: IVBK) received
notification from Nasdaq that its common stock would be delisted
from the Nasdaq SmallCap Market effective with the opening of
business on Aug. 13, 2001. IBI expects that its common stock
will be immediately eligible to trade on the NASD-regulated OTC
Bulletin Board. IBI is evaluating its options and is considering
an appeal of this decision.


ISTAR FINANCIAL: Fitch Rates Senior Unsecured Notes At BB+
----------------------------------------------------------
Fitch assigns its 'BB+' rating to iStar Financial Inc.'s (SFI)
$350 million issuance of 8.75% senior unsecured notes maturing
in July. The Rating Outlook is Positive.

The ratings and Outlooks reflect the company's sound operating
performance over the last 18 months, continued prudence in
managing interest rate and refinance risks, the benefits
afforded SFI through TriNet's still largely unencumbered
portfolio of Credit Tenant Lease assets and extending lease
maturities (8.4 years vs. 5.6 years at Dec. 31, 1999). In
addition, Fitch believes management's willingness to pursue an
unsecured debt offering at SFI despite access to less expensive
sources of secured funding is consistent with its desire to
further improve the capital structure, and achieve investment
grade status.

These rating positives are weighed against challenges which
include an asset base that remains largely untested through an
adverse economic cycle, an appetite for relatively large
exposures, ability to further the capital structure toward a
better balance between secured and unsecured sources of capital,
significance of preferred stock in the capital structure (28% as
of June 30, 2001), ability to manage the pressures of public
ownership over a meaningful period, and willingness to maintain
acceptable levels of unencumbered asset and debt service
coverage at the subsidiary and consolidated level.

Should the company's operating performance suffer or progress on
the evolution of its capital structure stall, there could be
pressure to further distinguish between the company's preferred
stock rating, given its significance in the capital structure,
and SFI's senior unsecured securities.

Headquartered in New York City, SFI provides structured
financing to private and corporate owners of high quality real
estate nationwide. As of June 30, 2001 Loans and other lending
investments totaled $2.3 billion and real estate subject to
operating leases totaled $1.6 billion.


LOEHMANN'S HOLDINGS: Stockholders' Meeting Set For September 21
---------------------------------------------------------------
The Annual Meeting of the Stockholders of Loehmann's Holdings,
Inc., a Delaware corporation, will be held at the offices of the
Company at 09:00 a.m., September 21, 2001 to consider and
vote on the following matters:

      (1) The election of seven (7) directors to serve on the
Company's Board of Directors until the next annual meeting of
stockholders and until the election and qualification of their
respective successors;

      (2) The amendment of the Company's Amended and Restated
Certificate of Incorporation to authorize the issuance of
Preferred Stock.

      (3) The adoption of the Company's 2001 Stock Option Plan.

      (4) The ratification of the appointment of Ernst & Young
LLP as the Company's independent accountants for the fiscal year
ending February 2, 2002;

      (5) The transaction of such other business as may properly
come before the meeting or any adjournments thereof.

Only stockholders of record on the close of business on August
20, 2001 are entitled to notice of and to vote at the Annual
Meeting or any adjournments or postponements thereof.


LOEWEN GROUP: Wants Wachovia Bank to Return Collateral
------------------------------------------------------
Prior to the petition date, Wachovia Bank, N.A. issued on behalf
of Loewen Group Acquisition Corp. (LGAC) six letters of credit
in the aggregate maximum face amount of $4,750,000.

At the time that certain of the Letters of Credit were
originally issued, LGAC and Wachovia entered into a Collateral
Assignment of Deposit dated as of June 13, 1997 to secure LGAC's
obligations to Wachovia in respect of the Letters of Credit.
Pursuant to the Collateral Assignment, LGAC pledged to Wachovia,
as security for LGAC's reimbursement obligations to Wachovia in
respect of the Letters of Credit: (a) funds in the amount of
$450,000 to be deposited in a deposit account maintained at
Wachovia in the name of LGAC (the Collateral Account); (b) any
additional funds deposited in the Collateral Account; (c) all
interest, if any, earned on the funds deposited in the
Collateral Account. The Collateral Assignment also contemplated
the deposit of additional amounts in the Collateral Account and
the pledge by LGAC of such additional deposits, plus interest,
if any, earned thereon.

Following the initial deposit of $450,000, LGAC requested that
Wachovia issue additional Letters of Credit, and LGAC made
additional corresponding deposits into the Collateral Account.

After the petition date, the parties sought and obtained the
Court's approval of a Stipulation and Agreed Order, dated
December 28, 1999, which provides for the modification of the
automatic stay to permit Wachovia to utilize the Collateral to
satisfy LGAC's obligations under the Letters of Credit and to
retain the unapplied portions of the Collateral. The Stipulation
and Agreed Order also contains provisions for LGAC to seek the
return of that portion of the Collateral that is allocated to
the Undrawn Letters of Credit that have expired.

As of the date of the Stipulation and Agreed Order, Wachovia had
honored draws made by the beneficiaries under the four Letters
of Credit numbered LC870-087399, LC870-087542, LC870-093079 and
LC87O-093652. Wachovia had not honored draws on the two Letters
of Credit numbered LC870-088639 and LC870-091239.

The Debtors have been advised that each of the Letters of
Credit, including the Undrawn Letters of Credit, has expired
without any further draws, and Wachovia thus has no further
liability or obligations. Accordingly, the Debtors want the
return of the Collateral pursuant to the Stipulation and Agreed
Order, which states, in paragraph (f) as follows:

    "If LGAC believes that Wachovia has no further liability and
     obligations under a specific Undrawn Letter of Credit
     because such Letter of Credit has expired without having
     been drawn, then LGAC may make a written request to Wachovia
     for the return to LGAC of that portion of the Collateral
     that is allocated to such Letter of Credit ... If Wachovia
     agrees, in its sole and absolute discretion, that Wachovia
     has no further liability and obligations under that specific
     Undrawn Letter of Credit, then Wachovia is required to
     return to LGAC that portion of the Collateral that is
     allocated to such Letter of Credit not later than 10
     business days after delivery of LGAC's written request. If,
     within 10 business days after delivery of LGAC's written
     request, Wachovia has not returned the allocated portion of
     the Collateral as requested, then LGAC may file a motion
     requesting the entry of an order (an "Expiry Order")
     determining that: (i) such Letter of Credit has expired; and
     (ii) Wachovia has no further liability or obligation under
     the Undrawn Letter of Credit in question and directing
     Wachovia to return the allocated portion of the Collateral
     to LGAC. If an Expiry Order is entered, then within five
     business days after the date on which such Expiry Order
     becomes a final and nonappealable order, Wachovia shall
     return to LGAC the Collateral that is allocated to the
     Letter of Credit that is the subject of the Expiry Order. In
     no event shall LGAC or any other Debtor seek entry of an
     order directing Wachovia to return any greater portion of
     the Collateral than is allocated to the Undrawn Letter of
     Credit in question, less any Step Down Amounts already
     returned by Wachovia to LGAC."

In April 2001, the Debtors indicated to Wachovia that the
Undrawn Letters of Credit had expired and requested that
Wachovia return the Collateral then remaining in the Collateral
Account, in the amount of $2,145,187.83. Wachovia responded by
indicating that it would remit $465,187.83 of the Collateral
upon receipt of wiring instructions and return the remaining
balance of $1,680,000.00 upon the Debtors obtaining an order of
the Court stating that stating that Wachovia has no further
obligations with respect to the Letters of Credit. The
$465,187.83 portion of the Collateral has since been remitted to
the Debtors. Wachovia continues to hold the remaining balance of
$1,680,000.00 in the Collateral Account, together with any
interest or income earned on those funds (collectively, the
"Remaining Collateral").

On June 29, 2001, counsel to the Debtors sent a letter to
counsel to Wachovia requesting that Wachovia return to LGAC all
of the Collateral not previously returned and advising counsel
that, if Wachovia failed to return the Remaining Collateral
within 10 business days, LGAC intended to file a motion with the
Court with respect to the Remaining Collateral.

On July 10, 2001, counsel to Wachovia sent to counsel to the
Debtors a responsive letter declining to return any of the
Collateral held by it until the Debtors obtain an order of the
Court relieving Wachovia of liability under the Letters of
Credit.

Accordingly, LGAC moves the Court for the entry of an order: (i)
determining that certain letters of credit issued by Wachovia
Bank, N.A. have expired and that Wachovia has no further
liability or obligations under those letters of credit; (ii)
directing Wachovia to return to LGAC any remaining collateral
securing LGAC's reimbursement obligations in respect of the
letters of credit; and (iii) deeming proof of claim number 4323
filed by Wachovia on December 13, 1999 with respect to such
reimbursement obligations, withdrawn with prejudice. (Loewen
Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


LOEWEN GROUP: Reports Second Quarter 2001 Operating Results
-----------------------------------------------------------
The Loewen Group Inc. announced its results for the second
quarter ended June 30, 2001.

Second quarter revenues were $204.2 million, down $14.7 million
from the prior year, reflecting primarily the reduction of 280
locations due to the Company's ongoing disposition program.
Earnings from operations were $17.3 million in 2001, compared to
$23.5 million last year, before impairment provisions of $139.4
million and $92.0 million, respectively. The net loss for the
second quarter was $116.7 million, compared to net loss of $76.3
million in 2000. The Company's cash position increased during
the quarter by $24.7 million to $220.4 million at the end of the
second quarter.

Funerals performed on a same store basis in the second quarter
were up 0.8 percent over the prior year comparable period. This
showed substantial improvement from the first quarter 2001, in
which calls had declined 3.7 percent compared to the prior year.
For the six months ended June 30, 2001, funerals performed on a
same store basis declined 1.6 percent compared to the prior year
comparable period. On a same store basis, the total average
revenue per funeral service in the second quarter was 2.5
percent ahead of the prior year comparable period, and this
brought the year-to-date performance to be 1.0 percent ahead of
the prior year.

Cemetery volume in the second quarter, both at-need and pre-
need, continued below last year's levels, due to the impacts of
dispositions and the change in commission structure in the
second quarter of 2000. The Company's efforts to rebuild its
cemetery sales force have been slower than planned and have
also contributed to the sales declines versus prior years.

Paul A. Houston, President and CEO, commenting on the Company's
operations, stated:

"Performance in the funeral side of the business was encouraging
in the second quarter. Despite the continuing distraction of the
reorganization process, same store call volumes and average call
revenue both improved over the first quarter.

On the cemetery side of the business, I am disappointed at the
pace of the rebuilding process of our cemetery revenues and this
continues to be a key ongoing focus."

                      Disposition Program

The Company's program to divest non-strategic assets continues
to proceed at a satisfactory pace. During the quarter ended June
30, 2001, the Company sold 45 properties and received sales
proceeds of approximately $23 million. Since the inception of
the disposition program, transactions involving approximately
350 properties and approximately $136 million in sales proceeds
have been either completed, approved by the Bankruptcy Court or
have been signed and submitted for approval.

In addition, on August 1, 2001, the Company entered into a
contract to sell all of its interests in relation to 29
cemeteries in the state of Michigan. If this transaction is
consummated, consideration to the Company will include, among
other things, a payment of $23.4 million. Closing of the
Michigan cemetery transaction is subject to a number of
conditions, including U.S. Bankruptcy Court approval.

                  Reorganization Progress

As earlier reported, the U.S. Bankruptcy Court has scheduled,
for August 16, 2001, a hearing on the adequacy of the Disclosure
Statement related to the Company's Third Amended Plan of
Reorganization, as it may be amended prior to that date. At that
hearing, the Company will ask the Court to approve the
Disclosure Statement and permit the Company to submit the Plan
to a vote of creditors. A number of creditors have filed
objections to the Disclosure Statement and the Company's
proposed voting procedures. Some of those objections are
technical in nature; others appear to reflect disagreement
with the treatment of certain classes of claims under the Plan.
The Company also anticipates substantial creditor support for
the Plan and Disclosure Statement. The positions of the various
creditor groups, along with the Company's responses, will be
considered at the August 16th hearing. The Court has also
tentatively set a hearing for November 27-29, 2001, to consider
confirmation of the Plan, subject to the Plan's going to a vote
of the creditors promptly following the August 16th hearing and
receiving the required favorable vote.

The Company anticipates that, prior to the August 16th hearing,
it will be filing a further amendment to the Plan and Disclosure
Statement incorporating, among other things, updated financial
data, the results of further negotiations with key creditor
groups concerning the terms of the debt to be distributed to
secured creditors under the Plan and other matters, and further
claims resolution activities.

John S. Lacey, Chairman of the Board, commented:

"While the reorganization process is taking longer than we would
like, we continue to use the time productively to strengthen our
corporate structure, clean up our balance sheet and complete our
asset dispositions. Looking ahead, we are encouraged by the
Disclosure Statement hearing on August 16th, and the Court
setting aside November 27-29 for a potential confirmation
hearing.

While we anticipate that there will be those objecting to our
Plan on the 16th for the purposes of advancing their particular
agendas, we have, however, had comprehensive discussions with
the secured creditors, the Official Unsecured Creditors'
Committee and the Blackstone Group, regarding the structure and
conditions of the distribution to creditors included in the
planned amended Disclosure Statement. It is my understanding
that we will receive the necessary support from these groups, if
the Court allows us to take the Plan as presently filed to a
vote after August 16th."

                 Basis of Presentation

The Company's attached interim consolidated statements of
operations and deficit, balance sheets and statements of cash
flow have been prepared on a "going concern" basis in accordance
with Canadian generally accepted accounting principles. The
going concern basis of presentation assumes that the Company
will continue in operation for the foreseeable future and will
be able to realize its assets and discharge its liabilities and
commitments in the normal course of business. As a result of the
creditor protection proceedings and circumstances relating to
this event, including the Company's debt structure, recent
losses, cash flow and restrictions thereon, such realization of
assets and discharge of liabilities are subject to significant
uncertainty.

The interim consolidated financial statements do not reflect
adjustments that would be necessary if the going concern basis
was not appropriate. If the going concern basis was not
appropriate for these interim consolidated financial statements,
then significant adjustments would be necessary in the carrying
value of assets and liabilities, the reported revenues and
expenses, and the balance sheet classifications used.
Additionally, the amounts reported could materially change as
part of a plan of reorganization, since the reported amounts in
these interim consolidated financial statements do not give
effect to all adjustments to the carrying value of the
underlying assets or amounts of liabilities that may ultimately
result. The appropriateness of the going concern basis is
dependent upon, among other things, confirmation of a plan of
reorganization, future profitable operations, and the ability to
generate sufficient cash from operations and other financing
arrangements to meet obligations.

The U.S. Securities and Exchange Commission's Staff Accounting
Bulletin No. 101, "Revenue Recognition in Financial Statements"
("SAB 101"), was required to be implemented for U.S. generally
accepted accounting principles in the fourth quarter of 2000,
with effect from January 1, 2000. For U.S. generally accepted
accounting principles, the Company has implemented SAB 101, on a
prospective basis, for pre-need sales contracts consummated on
or after January 1, 2001, but has not yet recognized the
cumulative effect of the adoption of SAB 101 for pre-need sales
contracts consummated prior to January 1, 2001, as a result of
the Company's ongoing reorganization proceedings.

Based in Toronto, The Loewen Group Inc. currently owns or
operates approximately 950 funeral homes and 325 cemeteries
across the United States, Canada, and the United Kingdom. The
Company employs approximately 11,000 people and derives
approximately 90 percent of its revenue from its U.S.
operations.

                Discussion Of Operating Results

                Three Months Ended June 30, 2001

Funeral home revenues were $130.8 million, a decrease of 6.2
percent from $139.5 million in the second quarter of 2000. On a
same store basis, the number of funerals performed was up 0.8
percent compared with the second quarter of 2000. The Company
experienced same store average revenue per funeral service
during the quarter that was 2.5 percent higher than that of
2000. Overall funeral home operating margin in the second
quarter of 2001 was 25.6 percent compared with 27.7 percent in
the same quarter in 2000, reflecting, the Company believes, the
effects of lower revenues, partially due to dispositions in the
fourth quarter 2000 and first and second quarters of 2001, and
less than proportional location cost reductions. The Company
performed approximately 35,000 funeral services during the
second quarter of 2001, compared to 37,400 in the same period a
year earlier.

Second quarter cemetery revenues were down 14.8 percent to $47.0
million, compared with $55.1 million in the same quarter in
2000. This continues to reflect changes to the Company's
commission structure and pre-need sales, as well as the impacts
of dispositions in the fourth quarter 2000 and first and second
quarters of 2001. Cemetery operating margin was $8.3 million for
the quarter compared with $12.7 million for the same period last
year. Cash flow was $2.9 million for the quarter, compared to
$17.0 million for the same period last year.

General and administrative expenses were reduced by $1.1
million, or 6.2 percent, in the second quarter of 2001, from the
same period in 2000, as part of a continuing program to operate
more efficiently.

An asset impairment provision of $139.4 million was recorded
during the quarter, of which $131.2 million related to an
agreement reached to sell a group of 29 cemeteries in the state
of Michigan, which were not included in the previously-announced
program to dispose of locations that are considered non-
strategic assets. The remaining impairment provision of $8.2
million resulted from eight additional properties not included
in the locations previously identified for disposal, as well as
adjustments to estimated proceeds for existing properties held
for sale.

The Company incurred $10.3 million in reorganization costs
during the quarter arising from expenses related to the June 1,
1999 filings under Chapter 11 of the U.S. Bankruptcy Code and
under the Canadian Companies' Creditors Arrangement Act.

            Six Months Ended June 30, 2001

Funeral home revenues were $274.5 million, a decrease of 8.7
percent from $300.6 million in 2000. On a same store basis, the
number of funerals performed was down 1.6 percent compared with
2000. The Company experienced same store average revenue per
funeral service during 2001 that was 1.0 percent higher than
that of 2000. Overall funeral home operating margin in 2001 was
27.1 percent compared with 31.1 percent in 2000, reflecting, the
Company believes, the effects of lower revenues, partially due
to dispositions in the fourth quarter 2000 and first and second
quarters of 2001, and less than proportional location cost
reductions. The Company performed approximately 74,300 funeral
services during 2001, compared to 80,900 in the same period a
year earlier.

Cemetery revenues were down 25.4 percent to $94.3 million,
compared with $126.4 million in 2000. This continues to reflect
changes to the Company's commission structure and pre-need
sales, as well as the impacts of dispositions in the fourth
quarter 2000 and first and second quarters of 2001. Cemetery
operating margin was $17.7 million in 2001, compared with $32.3
million for the same period last year. Cash flow was $13.1
million in 2001, compared to $33.9 million for the same period
last year.

General and administrative expenses were reduced by $3.3
million, or 9.1 percent, in 2001, from the same period in 2000,
as part of a continuing program to operate more efficiently.

An asset impairment provision of $157.3 million was recorded
during 2001, of which approximately $143.0 million resulted from
two groups of properties that were not included in the
previously-announced program to dispose of locations that are
considered non-strategic assets. Of these, $131.2 million
related to an agreement to sell a group of 29 cemeteries in the
state of Michigan. The remaining impairment provision resulted
from several additional properties not included in the locations
previously identified for disposal, as well as adjustments to
estimated proceeds for existing properties held for sale.

The Company incurred $20.1 million in reorganization costs
arising from expenses related to the June 1, 1999 filings under
Chapter 11 of the U.S. Bankruptcy Code and under the Canadian
Companies' Creditors Arrangement Act.


LTV CORP.: Copperweld Promotes 3 Heads For Tubular Product Group
----------------------------------------------------------------
LTV Copperweld announced the promotion of three executives to
head the principal units of its Tubular Products Group. The
promotions highlight a revised organizational structure designed
to better enable the group's individual businesses to achieve
their specific growth and improvement initiatives.

The three units are the Mechanical Group, headed by David M.
Coppock; the U.S. Structural Group, David W. Seeger; and the
Canadian Tubular Group, David F. Thomas. All of the executives
hold the title of Vice President and General Manager and report
to David S. Mitch, Executive Vice President, Tubular Products
Group.

In their new positions, they will be responsible for both the
operations and marketing activities of their groups.

Mr. Coppock has 25 years of experience in the tube industry, the
last 12 with LTV Copperweld and a predecessor. Most recently he
held operational responsibility for the Mechanical Group as a
Senior Vice President. He holds a BA degree in economics from
Penn State University and an MA degree in psychology from West
Georgia University.

Mr. Seeger has 13 years of managerial experience in the tube
industry, the last eight with LTV Copperweld and a predecessor.
He holds a Bachelor's degree from Michigan State University and
an MBA from Loyola University. His most recent position was Vice
President Operations, Structural Tubing USA.

Mr. Thomas has been with LTV Copperweld and its predecessors
since 1980. Most recently he served as Vice President Operations
of the Canadian Structural Group. He holds a diploma in
industrial engineering and a Bachelor of Technology Degree from
Ryerson Polytechnic University.

LTV Copperweld is the largest producer of steel tubular products
in North America, with 19 manufacturing plants in the United
States and Canada. It is also the world's largest manufacturer
of bimetallic wire products at three plants in the U.S. and the
United Kingdom. A unit of LTV Corporation, LTV Copperweld is
headquartered in Pittsburgh and employs 3,600 people.


MARINER: Moves To Ratify NHP Lease Portfolio Settlement
-------------------------------------------------------
After over a year's negotiations, Mariner Post-Acute Network,
Inc. reached agreements with Nationwide Health Properties, Inc.
and NH Texas Properties Limited Partnership (collectively, NHP)
to restructure the NHP Lease Portfolio. Pursuant to the
Agreements, the Debtors will (a) reject Leases pertaining to 11
Facilities in Texas and transition operations of the Rejected
Facilities, (b) assume 2 Leases pertaining to real property in
Illinois and 2 Leases relating to real property in California,
as modified by the Master Addendum, (c) assume and assign the
Gilroy Sublease regarding real property in California, and (d)
settle certain related claims and matters.

Accordingly, Debtors Mariner Post-Acute Network, Inc. ("MPAN"),
Living Centers of Texas, Inc., GranCare, Inc., GCI Palm Court,
Inc. and Evergreen HealthCare Ltd, L.P. move the Court for an
order:

(1) approving the "Settlement Agreement Re NHP Lease Portfolio"
     by and among the Debtors, Nationwide Health Properties,
     Inc., and NH Texas Properties Limited Partnership (NHP),
     including

   (a) approving LCT's transition of operations at each of the
       Rejected Facilities, on terms and conditions that are not
       materially different from those set forth in the proposed
       form of "Operations Transfer Agreement" (the OTA) to be
       entered into by and among NHP Texas, its replacement
       operators, and LCT with respect to each of the Rejected
       Facilities;

       (Separate operations transfer agreements will be entered
       into with each of the eleven new operators of the Rejected
       Facilities. Therefore, LCT requests authority to enter
       into an operations transfer agreement as to each of the
       Rejected Facilities which will provide for a transition on
       terms substantially identical to those contained in the
       OTA. The terms of the OTA are substantially similar to
       those that have been previously approved by the Court in
       the MPAN.)

   (b) approving the Debtors' entry into the "Revised and
       Restated Master Addendum to Leases," by and among
       Nationwide, as lessor, and GranCare, GCI, and Evergreen,
       as tenants, under the facility leases being assumed,

   (c) approving MPAN's entry into the "Guaranty of Leases" in
       favor of Nationwide relating to the Assumed Leases,

(2) authorizing the assumption and assignment of the Medicare
     provider agreements between LCT and the Health Care
     Financing Administration ("HCFA") relating to the Rejected
     Facilities;

(3) authorizing the assumption and assignment of the Gilroy
     sublease agreement, and

(4) granting related relief.

In the exercise of their business judgment, the Debtors
determined that the comprehensive restructuring of the NHP Lease
Portfolio as requested provides them with the best course of
action with respect to each of the NHP Leases and the NHP Lease
Portfolio as a whole. Complicating the Debtors determination
were NHP's contentions that (1) the NHP Leases had been
terminated prepetition, (2) the single lease structure of the
Texas Lease prevented LCT from picking and choosing for purposes
of assumption and rejection among the Facilities subject to the
Texas Lease, and (3) the existence of cross-default provisions
in most of the NHP Leases limited the Debtors' ability to reject
certain of the NHP Leases while assuming others.

Among other things, the NHP Settlement enables the Debtors to
retain certain of the NHP Leases and divest themselves of
others.

The Facilities subject to Rejected Texas Leases are:

         Facility/Location                    Debtor
         -----------------                    ------
       Allenbrook Health Care       Living Centers of Texas, Inc.
       Center/Baytown, Texas

       Green Acres Convalescent     Living Centers of Texas, Inc.
       Center/Baytown, Texas

       Green Acres Convalescent     Living Centers of Texas, Inc.
       Center/Center, Texas

       Green Acres Convalescent     Living Centers of Texas, Inc.
       Center/Humble, Texas

       Green Acres Convalescent     Living Centers of Texas, Inc.
       Center/Huntsville, Texas

       Heritage House/              Living Centers of Texas, Inc.
       Eagle Lake, Texas

       Castle Manor/                Living Centers of Texas, Inc.
       Garland, Texas

       Beechnut Manor/              Living Centers of Texas, Inc.
       Houston, Texas

       Oak Manor/                   Living Centers of Texas, Inc.
       Nacogdoches, Texas

       Broadway Lodge/              Living Centers of Texas, Inc.
       San Antonio, Texas

       San Antonio Convalescent     Living Centers of Texas, Inc.
       Center/San Antonio, TX

The Texas Lease, between LCT and NHP, arose on September 27,
1990 and have a remaining term through September 30, 2004.

The following leases/sublease will be assumed:

(1) the California Driftwood Lease relating to real property
     commonly known as Driftwood Manor-Hayward, Driftwood Manor-
     San Jose (Almaden Health and Rehabilitation Center),
     Driftwood-Gilroy (the Gilroy Facility), and Driftwood Manor-
     Santa Cruz.

(2) the California Monterey Palms Lease relating to real
     property commonly known as the Monterey Palms Healthcare
     Center

(3) the Illinois LaSalle Lease relating to the real property
     commonly known as the LaSalle Healthcare Center

(4) the Illinois Litchfield Lease relating to the real property
     commonly known as the Litchfield Healthcare Center

The California Driftwood Lease, beteeen GranCare and NHP, has a
remaining term through June 1, 2006. GCI and GranCare, as
successor tenants and NHP, as successor lessor, were parties to
the California Monterey Palms Lease, dated April 20, 1994 and
has a remaining term through June 1, 2006.

The Illinois Leases, between Evergreen and NHP, commenced on May
1, 1989 and have a remaining term through June 1, 2006.

The Debtors draw Judge Walrath's attention to benefits that can
be derived from the proposed transaction including:

(a) Rejection of the eleven leases pertaining to 11 Facilities
     that are underperforming and are a continuing drain on the
     Debtors' resources;

(b) An orderly transition of operations or closure of each of
     the Rejected Facilities

     - the Debtors will continue operating the Rejected
       Facilities until they can be transitioned within a
       reasonable time period to a replacement operator, with the
       provision that,  after August 1, 2001, LCT's
       administrative monthly rental obligations for each of the
       Rejected Leases will be eliminated, and instead, NHP Texas
       will pay LCT a 5% monthly
       management fee for operation of each Rejected Facility,
       and will reimburse LCT for any Net Operating Losses while
       any Net Operating Profits will be turned over to NHP
       Texas;

(c) The assumption of the Assumed Leases despite cross-default
     provisions and claims of prepetition termination;

(d) A settlement of NHP's claims relating to the rejection of
     the Rejected Leases, including limiting NHP Texas' draw
     under a $1,365,000 letter of credit to $682,500;

(e) The settlement of claims arising from the assumption of the
     Assumed Leases;

(f) Upon the assumption and assignment of the Gilroy Sublease to
     NHP, the release of all of the Debtors' obligations related
     to it and the assurance of future performance because the
     sublessee will be the Master Lessor (NHP) that is in as good
     a position as the sublessor to perform the sublessor's
     obligations under the Gilroy Sublease;

(g) The general release, other than as set forth in Agreements,
     of all claims of NHP against the Debtors;

(h) The right of the Debtors, at any time prior to the
     confirmation or pursuant to a plan of reorganization and
     subject to the approval of the Court, to assign their
     interests in the Assumed Leases in compliance with section
     365 of the Code;

To realize these benefits, the Debtors must:

(a) Generally release all their claims against NHP, other than
     as set forth in the Agreements;

(b) satisfy certain claims that are otherwise due or are subject
     to reasonable compromise relating to the Rejected and
     Assumed Leases;

(c) pay (i) unpaid administrative rent from the Petition Date
     through July 31, 2001; and (ii) unpaid real property taxes
     incurred from the Petition Date to July 31, 2001;

(d) transfer the personal property affiliated with a Rejected
     Facility, free and clear of liens of and

(e) Have MPAN guarantee the obligations of the Debtors' under
     the assumed Leases;

(f) Let NHP retain the security deposits relating to such
     Rejected Leases and the right to draw $682,50O under the
     letter of credit posted by MPAN and LCT with NHP Texas to
     guarantee their performance under the Texas Lease;

(g) Assume and assign each of the Medicare Provider Agreements
     related to the Rejected Facilities to the Replacement
     Operator, at a cost in excess of offsets which will be
     $50,000 per Rejected Facility as to each Medicare Provider
     Agreement assumed and assigned.

                          The OTA

As mentioned above, the terms of the OTA are substantially
similar to those that have been previously approved by the
Court. Specifically, the OTA in this motion provides for:

-- the employment by the Replacement Operator of all or
    virtually all of LCT's employees at a Rejected Facility as of
    the Closing Date, thereby avoiding any WARN Act and severance
    claims which might otherwise be asserted if a Rejected
    Facility were to cease operations.

-- the payment by LCT of all of the wages due and all amounts
    owing for earned vacation pay as of the Closing Date;

-- the reconciliation of future amounts received from the
    collection of accounts receivable;

-- the transfer of patient records and financial data.

LCT will assume and assign the Medicare Provider Agreement and
provider number applicable to each of the Rejected Facilities
only after the relevant Replacement Operator obtains HCFA
approval of the change of ownership. Notwithstanding the
assumption and assignment of the Medicare Provider Agreements,
any claim of Medicare, the applicable fiscal intermediary, the
Department of Health and Human Services (HHS) or any other party
against the Debtors under the Medicare Provider Agreements
arising prior to the petition date will continue to be treated
as prepetition claims as if such Medicare Provider Agreements
had been rejected so that such claims will not be treated as
administrative claims, and will not be offset against the
Debtors' claims arising after the petition date. However, HCFA
will be allowed to offset such claims against any prepetition
underpayment claim of the Debtors against Medicare, even if the
claim and debt are not mutual. To the extent HCFA's claim is not
satisfied in full via offset, the United States will have an
administrative expense claim pursuant to 11 U.S.C. section
507(b) and such claim will be capped at $50,000 with respect to
each of the Rejected Facilities.

The Replacement Operator will have no successor liability for
any claim against, any Debtor or any of their affiliates under
the Medicare Provider Agreements arising prior to the effective
date of the assignment, but will succeed to the quality of care
history of the Rejected Facilities, except that the assignee
will not be liable to pay any civil monetary penalty accruing
prior to the Closing Date.

                   Revised and Restated
             Master Addendum to Assumed Leases

The Master Addendum will generally amend the rights and
responsibilities of the parties to the Assumed Leases, and
generally provides for the following:

* options to extend the terms of such Assumed Leases beyond the
   initial terms;

* a reduction in rent for the Illinois Litchfield Facility;

* rights governing the exercise of purchase options in respect
   of properties subject to the Assumed Leases;

* cross-default between the two California Leases but not to any
   other leases or obligations, and, likewise, cross-default
   between the two Illinois Leases but not to any other leases or
   obligations;

* an amendment of the California Driftwood Lease to, among other
   things, exclude all references to the Gilroy Facility;

* an amendment to provide for uniform financial reporting
   requirements in each of the Assumed Leases; and

* the entry of MPAN into the Guaranty in favor of Nationwide.

The Debtors submit that all defaults under the Assumed Leases
were minor in nature, caused primarily by the timing of payments
due in relation to the Petition Date. The Debtors intend to pay
all such arrearages, plus penalties and interest where
appropriate, pursuant to the terms and conditions of the
Settlement Agreement. Further, NHP has agreed that the Debtors
have established adequate assurance of future performance as to
Assumed Leases, as required by section 365(b)(1)(C). As
sublessor under the Gilroy Sublease, the Debtors have no cure
obligations associated with their proposed assumption of the
Gilroy Sublease.

              MPAN's Incurrence Of Unsecured Debt
                In Connection With The Guaranty

By entering into the Guaranty in order to provide Nationwide
with additional adequate assurance of the Debtors' future
performance under the Assumed Leases, MPAN will be incurring
unsecured debt pursuant to section 364 of the Bankruptcy Code.
Therefore, in addition to seeking authority for MPAN to enter
into the Guaranty, the Debtors seek authority for MPAN to incur
such debt in accordance with section 364(b) of the Bankruptcy
Code. The Debtors represent that the incurrence of such debt is
justified by the significant benefits that will flow to the
Debtors' estates and creditors from the restructuring of the NHP
Lease Portfolio. The Debtors also point out that under the
circumstances and because of the Debtors' performance history
under the Assumed Leases, there is very little risk associated
with MPAN's entry into the Guaranty.

As to each of the Rejected Facilities, the Agreements require
LCT to transfer, free and clear of all liens, encumbrances,
claims, and interests, (a) to NHP Texas tangible personal
property; and (b) to Replacement Operator consumables,
inventories, and supplies actually used in the operation of the
relevant Rejected Facility.

LCT believes that the only entities asserting any interests in
the assets to be sold are Chase and the "DIP Lenders" and
"PrePetition Lenders". The Debtors have obtained the consent of
the MPAN Bank Group to the transfer of assets and revised
proposed order form caters to this.

               Objection By NovaCare Holdings, Inc.

NovaCare objects to the assumption and assignment of the
Medicare Provider Agreements relating to the NHP Lease Portfolio
Facilities to the extent that this affects the right that it
claims on Prudent Buyer Monies which is the subject of Adversary
Proceeding No. 00-1577 (See prior entry [00167]) and to the
extent this affects its ability to collect the administrative
claim granted to it as adequate protection in relation to
Prudent Buyer Monies. (In the same objection, NCH objects to
another which provides for the transfer of the Hayward Facility
in California.)

As previously reported, NovaCare alleges that certain Prudent
Buyer Monies owed by HCFA are allegedly not property of the
Section 541 Debtor-Defendants' bankruptcy estates. In Adversary
Proceeding No. 00-1577, NovaCare is asking the Court to require
the Debtors to turn over such Monies to NCH.

The Rejected Facilities covered by the NHP Lease Portfolio and
the Hayward Facility are not Section 541 Facilities. NCH objects
to the transfer of the Rejected Facilities and the Hayward
Facility to the extent that any order authorizing such transfer
includes the Prudent Buyer Offset Provision, thus authorizing
HCFA to offset against monies owed to other facilities without
further order of the Bankruptcy Court. NCH is concerned that the
granting of such non-mutual offset rights will diminish or
eliminate monies owed to other facilities and hence diminish or
eliminate the Prudent Buyer Appeal Monies due to the Section 541
Facilities in which NCH has claimed an interest.

NCH also objects to the transfer of the Facilities to the extent
that any order authorizing such transfer grants to HCFA an
administrative claim which will jeopardize the ability of NCH to
collect in full the administrative claim previously granted to
it as adequate protection in the NCH Stipulation.

NCH relates that in previous proposed sale/transfer of
facilities by the Debtors, it originally objected to the
inclusion of Prudent Buyer Offset Provision but its objection
was resolved by the provision of adequate protection to it by
the Debtors by way of the NCH Stipulation.

The Stipulation, NovaCare relates, Provides the following
adequate protection to NCH to the extent that the Prudent Buyer
Offset Provision adversely affects the rights of NCH:

    "In the event that: (a) HHS is permitted to, and actually
    does, effect an offset of a claim of HHS against a Debtor
    which is not a Covered Debtor and/or a facility owned by a
    Debtor which is not a Covered Debtor (collectively, a "Non-
    Covered Debtor") against a Covered Prudent Buyer Claim; and
    (b) HHS would not have been permitted or entitled under
    applicable law to exercise such offset but for the inclusion
    of a Prudent Buyer Offset Provision in a stipulation or order
    of the Bankruptcy Court (any such offset being a "Non-Muttial
    Offset"), then (x) the respective rights, claims and
    interests of NAHC and the applicable Covered Debtor or
    Covered Debtors against one another with respect to the
    Covered Prudent Buyer Claim against which such Non-Mutual
    Offset was exercised shall be detennined as if the Covered
    Debtor against which such Non-Mutual Offset was exercised by
    HHS had received cash in the amount of such Non-Mutual
    Offset, and such cash had then been immediately placed and
    maintained in a segregated account; and (y) if and only if a
    final order is entered determining that NAHC is entitled to a
    payment of some amount out of the cash that would have then
    been placed and maintained in such a segregated account, NAHC
    shall immediately be paid such finally ordered amount from
    the Debtors' general operating funds and/or accounts (the
    obligation to immediately pay such finally ordered amount to
    NAHC being specifically enforceable, and the Debtors
    specifically agreeing not to argue to the Bankruptcy Court
    that this payment obligation should in any way or for any
    reason be delayed for any period of time whatsoever and
    specifically waiving the right to make any such argument,
    claim or defense); and, if NAHC is not paid such amount, NAHC
    shall have an administrative claim equal to the amount that
    should have been, but was not, paid to NAHC."

NCH notes that the Stipulation also provides it with the right
to request additional adequate protection if the Prudent Buyer
Offset Provision adversely affects the rights of NCH which are
not adequately protected by the terms of the NCH Stipulation.

NCH also notes that the Stipulation, however, does not bind HCFA
to first attempt to satisfy in full its claims either by
offsetting against non-Prudent Buyer Appeal monies due to the
Debtors or by offsetting against Prudent Buyer Appeal Monies
that are subject to the claims of NCH. NCH points out that it
has not claimed an interest in the non-Prudent Buyer Appeal
Monies and has only claimed an interest in and right to
approximately $8 million out of the $27 million of the Prudent
Buyer Appeal Monies due from HCFA to the Debtors.

NCH tells the Court that if did not object to the inclusion of
the Prudent Buyer Offset Provision in the prior sale/transfer
orders because it previously believed that it was adequately
protected by the NCH Stipulation. To date, NCH reminds the
Court, the Debtors have sold/transferred approximately 36
facilities with the Medicare Provider Agreements being assumed
and assigned without successor liability through the use of the
Prudent Buyer Offset Provision.

Recently, NCH objected to the transfer of the last four
facilities and its objection was resolved by the inclusion of a
"carve-out provision" in the applicable orders with respect to
the NHP Indiana Lease Portfolio - that is, providing that:

    "the offset rights granted to HCFA under the Order shall not
     apply to any funds from prudent buyer settlements as to
     which NCH has asserted a claim to a constructive trust in
     the Complaint which it has filed in Adversary Proceeding No.
     00-1577 (MFW) until and unless the Court enters a final
     order determining that such funds are not held in
     constructive trust for or that NCH is not otherwise entitled
     to such funds."

It appears to NCH that HCFA is getting more concerned about its
ability to recover all amounts that are allegedly due to it
through the exercise of such non-mutual offset right.
Originally, NCH notes, no administrative claims were granted to
HCFA in addition to the non-mutual offset rights. Then, in the
orders authorizing the sale/transfer of the last 13 facilities,
HCFA was granted administrative claims in excess of $1.4
million. In seven of the orders, HCFA's administrative claims
were capped at $50,000 each and in the other 6 orders, the
administrative claims were originally capped at $50,000 each and
then increased to $500,000, $100,000, $100,000, $125,000,
$190,000 and $63,000.

In the motion regarding the NHP Lease Portfolio, the proposed
cap on the administrative claim as to the facilities being
transferred is $50,000 per facility, thus, $600,000 for all
twelve facilities.

NCH tells Judge Walrath that it has not got enough information
to enable it to determine if the terms and provisions contained
in the NCH Stipulation continue to adequately protect its
interest in the Prudent Buyer Appeal Monies owed to Section 541
Facilities.

NCH requests that, in the event the Court authorizes the
granting of non-mutual offset rights and an administrative claim
to HCFA, then the following alternative forms of relief be
granted:

(a) a "carve-out provision";

(b) supplemental adequate protection over and above that
     provided in the NCH Stipulation in order to insure that the
     payment of the administrative claim previously granted to
     NCH before the payment of any additional administrative
     claims granted to HCFA.

                   Revised Proposed Order Form

With the consent of HCFA, the Debtors have revised the proposed
order form to provide for the proposed treatment of trust claims
in addition to the above-mentioned revision to provide for the
transfer of assets upon the consent of the MPAN Bank Group.
Among other things, the revised order form reads:

"Notwithstanding anything to the contrary in this Order, the
offset rights granted to HCFA under this Order will not apply to
any funds from prudent buyer settlements as to which Nova Care
Holdings, Inc. . . . has asserted a claim to a constructive
trust in the Complaint which it has filed in Adversary
Proceeding No. 00-1577 (MFW) until and unless the Court enters a
final order determining that such funds are not held in
constructive trust or that NCH is not otherwise entitled to such
funds." (Mariner Bankruptcy News, Issue No. 17; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


MORRIS MATERIAL: Delaware Court Confirms Chapter 11 Plan
--------------------------------------------------------
Morris Material Handling, Inc. announced that its Chapter 11
Reorganization Plan was confirmed by the United States
Bankruptcy Court, District State of Delaware.

The Reorganization Plan provides for conversion of virtually all
of the Company's bank, bondholder, and other pre-filing
obligations into equity of the reorganized Company. No
distribution to Morris's current shareholders is included in the
Reorganization Plan, and all existing Morris shares will be
canceled.

Consummation of the Reorganization Plan is conditioned upon the
finalization of documentation required by the Plan, and
finalization of a $30 million loan facility for which the
Company has received a commitment. This facility will be
utilized to fund cash costs of exiting Chapter 11 as well as the
Company's ongoing operations.

The virtually debt-free capital structure established by the
Reorganization Plan will allow the Company the flexibility to
respond to and take advantage of the changing dynamics of its
industry. The Reorganization Plan will allow Morris to emerge
from Chapter 11 as a leading North American supplier of through-
the-air material handling equipment and services to a broad base
of customers in manufacturing, paper and primary metal
industries through a network of company locations.


MOSLER INC.: BVI Offers Support to Former Customers & Employees
---------------------------------------------------------------
BVI Inc., a leading provider of full-service solutions to the
financial industry, announced that it has already begun efforts
to support former customers and employees of Mosler, Inc.

Many of Mosler's customers immediately turned to BVI Inc. after
the August 3rd announcement that the company was ceasing
operations.

According to Wayne Tilker, President and CEO of BVI Inc., "Due
to the sudden nature of Mosler's announcement, many customers
have found themselves with no bank equipment service or
technical support. BVI is already helping many of these
customers and will continue to be available to support these
customers through this difficult time."

Financial institutions are urged to contact BVI before an
emergency arises. "We have found that many customers have not
yet learned about the situation they are facing and that their
service provider has ceased operations," Tilker said. "As a
result, many will not find out until they have an immediate
service need, which may be too late."

Former employees are also welcome to contact BVI. "We will make
every effort to help these people and look for the opportunity
to involve them to our growing organization," Tilker added.

"We have the experience to provide bank equipment, technical
support, alarm installation and monitoring," Tilker concluded.
"In our 82 years of experience, we know the urgency of providing
service in a timely manner and being available to our customers
24 hours a day."

Bank Vault Inspection Company (BVIC) was established in 1919 to
inspect and service bank equipment and invented the first Rotary
Night Depository in 1926.

In 1999, the company changed its name to BVI Inc., and has
expanded its services to offer a wide-variety of banking and
financial solutions including architecture, design, construction
and project management, ATM and security equipment, service and
technical support.

Each year, more than 500 satisfied clients turn to BVI for
solutions, including projects from New England to Washington,
D.C. Located in Trevose, PA., BVI Inc. has regional offices in
Philadelphia, NYC and Baltimore.


NETSOL INTERNATIONAL: Cary G. Burch Resigns From Board
------------------------------------------------------
Cary G. Burch has advised Mr. George Swarts, court appointed
Receiver of NetSol International, that he was officially
resigning his position as a member of the Board of Directors,
and as advisor to NetSol. Mr. Burch's resignation letter to Mr.
Swarts was dated July 30, 2001.


OWENS CORNING: Court Approves Settlement Agreement With CARLY
-------------------------------------------------------------
Owens Corning sought and obtained an order from the Court
approving a settlement agreement between the Debtors and CARLY.

Prior to the Petition Date, the Debtors entered into four
equipment lease agreements with CARLY 1995 Leasing Trust for
production equipment:

    a) agreement dated December 15, 1995 between CARLY and the
       Debtors;

    b) agreement dated December 15, 1995 between CARLY and Owens-
       Corning Fiberglass (G.B.) Ltd.

    c) agreement dated December 15, 1995 between CARLY and Owens-
       Corning Fiberglass France S.A.

    d) agreement dated December 15, 1995 between CARLY and N.V.
       Owens-Corning Fiberglass S.A. (Belgium)

To protect its interest under the agreement, CARLY has
considered seeking a judicial determination that the agreement
is a true lease and a determination of the extent, validity and
priority of its liens and filing with the Court of a motion to
compel the Debtors' assumption or rejection of the agreement and
the exercise and pursuit of its other rights and remedies.  To
avoid cost, delay, and risk attendant to litigating whether the
agreement is a true lease of personal property or a sale under a
financing agreement and determination of the extent, validity
and priority of CARLY's liens, the parties have agreed to
settlement of their dispute, subject to approval by the Court.
On December 28, 2000, the Debtors and its subsidiaries exercised
its option to purchase all of the equipment subject to the
above-mentioned agreements.

The principal terms of the stipulation provides for:

  a) Debtors shall commence payments to CARLY consisting of 12
     equal monthly installments representing the aggregate sun of
     $8,796,241.18 plus unpaid monthly basic rent from October to
     December 2000 plus accrued unpaid supplemental rent
     payments, including interest on overdue accounts accrued
     plus interest on the amounts described.  The amount of each
     of the twelve installments will be $854,234.97.

  b) Neither CARLY nor any participant shall take any actions to
     exercise its rights with respect to the Owens Corning
     Equipment nor seek any judicial determination with respect
     to the Owens Corning Agreement

  c) The parties will mutually release each other from claims to
     the extent related to the Owens Corning Agreement or Owens
     Corning Equipment, provided that the claims of CARLY shall
     be preserved notwithstanding the payment of all protection
     payments and the foregoing release of other claims.

Norman L. Pernick, Esq., at Saul Ewing LLP in Wilmington,
Delaware believes that factors weigh in favor of the approval of
the Stipulation for the following reasons:

  a) probability of the Debtors' success in litigating the nature
     of the Owens Corning Agreement and determination of the
     extent, validity and priority of CARLY's liens is uncertain;

  b) certain of the issues in determination of whether the Owens
     Corning Agreement is a true lease of personal property or a
     sale under a financing agreement and determination of the
     extent, validity and priority of CARLY's liens are factually
     complex and would require significant litigation between
     parties to resolve with a substantial investment of time and
     effort, which would cause the Debtors to incur potentially
     substantial legal fees, costs and expenses;

  c) prompt resolution of the dispute of this dispute, without
     resorting to costly litigation, is in the best interest of
     the Debtors' estate and creditors.

Mr. Pernick believes that under the circumstances, it is prudent
to settle the circumstances on the terms set forth. (Owens
Corning Bankruptcy News, Issue No. 15; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


POLAROID CORP.: Receives One-Month Extension of Bank Waivers
------------------------------------------------------------
Polaroid Corporation (NYSE: PRD) announced it has received a
one-month extension of waivers on its bank loan covenants and a
$10 million increase in availability under its domestic credit
facility enhancing the company's near-term liquidity and
operational stability. Separately, Polaroid extended secured
creditor status to its bondholders in a move to help facilitate
the restructuring of its debt.

"This news allows us to continue on a business-as-usual basis as
we negotiate with bondholder representatives and bank lenders
and explore strategic options for the company's future," said
Gary T. DiCamillo, chairman and chief executive officer of
Polaroid.

Under terms of the bank agreements, Polaroid received an
extension to November 15 of its domestic and international loan-
covenant waivers, which were due to expire on October 12. The
company also received a $10 million increase in availability
under its domestic credit facility. These actions will
facilitate the implementation of a series of initiatives aimed
at strengthening Polaroid's financial performance, while it
restructures its debt.

"The $10 million increase in credit availability and waiver
extension are positive steps," noted William L. Flaherty,
executive vice president and chief financial officer. "These
actions support the company's continuing ability to conduct its
day to day business activities and meet its obligations to
suppliers, vendors and employees."

As a result of negotiations with an ad hoc committee of
bondholders and their legal and financial advisors, Polaroid
pledged two additional properties in Massachusetts as security
against both bank and bond debt. The ad hoc bonderholders'
committee, which negotiated with the company on this
arrangement, has retained the law firm of Akin, Gump, Strauss,
Hauer & Feld, L.L.P. and financial advisor Houlihan Lokey Howard
& Zukin.

"We have begun our dialogue with the company and believe that
the interests of Polaroid's bondholders are best served in a
stable negotiating environment," said a bondholder on the ad hoc
committee. "With this arrangement, Polaroid and its banks have
demonstrated sufficient effort to address bondholder concerns to
give us confidence that we can continue our due diligence and
negotiations toward an acceptable resolution."

A copy of the new waiver will be available in the Form 8-K to be
filed with the Securities and Exchange Commission.

Polaroid Corporation is the worldwide leader in instant imaging.
Polaroid supplies instant photographic cameras and films;
digital imaging hardware, software and media; secure
identification systems; and sunglasses to markets worldwide.
Visit the Polaroid web site at http://www.polaroid.com


PSA INC: Court Approves First Amended Disclosure Statement
----------------------------------------------------------
A hearing was held on July 27, 2001 to consider the request of
PSA, Inc and subsidiaries for entry of an order approving the
First Amended Proposed Disclosure statement with respect to the
joint reorganization plan submitted by the debtors and the
Official Committee of Unsecured Creditors. The court approved
the plan and Disclosure statement Summaries for distribution to
holders of Payphone Investor claims and holders of General
Unsecured Claims.

There are approximately 18,000 Payphone Investors, who
collectively invested approximately $400 million pursuant to
lease arrangements with PSA Inc.

Under the joint plan, Payphone Investors will collectively
receive all issued shares of stock in "Reorganized ETS". In
addition, Payphone Investors will collectively receive 85% of
the "Litigation Trust" under the joint plan. The Litigation
Trust will be the entity created for the purpose of
investigating and prosecuting certain types of litigation
claims. The Payphone Investors will share the Reorganized ETS
Stock and Litigation Trust proceeds on a pro rata basis based
upon the amount of each Payphone Investor's claim.

The cash flow projections accompanying the Disclosure statement
reflect that Reorganized ETS will run on a cash-positive basis,
and that it will accumulate approximately $3.2 million in 2002
and additional sums thereafter. It is estimated that Reorganized
ETS will have a reorganization value of approximately $24
million after implementation of the joint plan.

Counsel for the debtors are E. Penn Nicholson and Shannon Lowry
Nagle of Powell, Gloldstein, Fraxer & Murphy LLP and Brendan
Linehan Shannon of Young Conaway Stargatt & Taylor LLP. Kirk L.
Brett of Duval & Stachenfeld LLP Frederick B. Rosner of Walsh
Monzak & Monaco PA are Counsel for the Creditors' Committee.


PSA INC: Court Stretches Lease Decision Period Through August 31
----------------------------------------------------------------
By order entered by the Honorable John C. Akard, US Bankruptcy
Judge, District of Delaware, on July 27, 2001, the time within
which the debtors, PSA Inc. may assume or reject any unexpired
leases of nonresidential real property is extended to the later
of August 31, 2001 and the Effective Date of the joint plan.


RELIANCE: Rehabilitator Moves To Remand Commonwealth Actions
------------------------------------------------------------
The United States Bankruptcy Court for the Eastern District of
Pennsylvania should decline Reliance Group Holdings, Inc.'s
invitation to involve itself in a battle over who will have
control over Reliance's restructuring and rehabilitation. By
Motion, M. Diane Koken, Insurance Commissioner of the
Commonwealth of Pennsylvania and Rehabilitator of Reliance
Insurance Company, urges Judge Carey to:

     (1) remand the cases transferred from the Commonwealth Court
         of Pennsylvania back to that court where they belong;
         and

     (2) abstain from all further proceedings related to her
         cases brought before the Commonwealth Court.

Concurrently with filing the Remand Motion, the Rehabilitator
sought and obtained, ex parte, an order for expedited
consideration of her Remand Motion.  The Rehabilitator asserts
that this Remand Motion must be heard before the Debtors'
Transfer Motion.

Wait, the Debtors tell Judge Carey, for Judge Gonzalez to rule
on the Motion to Dismiss pending before the Bankruptcy Court in
Manhattan.

Leigh R. Schachter, Esq., at Debevoise & Plimpton, representing
the Debtors, and Andrew DeNatale, Esq., at White & Case,
representing the Official Creditors' Committee, point out that
the Remand Motion and the Dismissal Motion are strikingly
similar.  Both argue that the Commonwealth Court, rather than
any United States Bankruptcy Court, should determine whether the
$95 million and the insurance policies are the property of
Debtors' estate, and both raise the same underlying legal
issues, including whether the McCarran-Ferguson Act makes
abstention appropriate, whether reverse preemption of federal
bankruptcy law applies to this case, and whether the
Commonwealth Court actions were brought in furtherance of the
Rehabilitator's police or regulatory powers.  Principles of
judicial economy and fairness to the parties dictate that these
overlapping and complex issues should be litigated in only one
court, and the Southern District of New York, rather than the
Eastern District of Pennsylvania is the proper forum for
resolution of these issues, because:

     (1) the Rehabilitator raised the issues in this Court first;

     (2) the S.D.N.Y.'s determination may result in dismissal of
         the RGH entire chapter 11 case which would render the
         Remand Motion moot, and;

     (3) the S.D.N.Y. is the "home" court where RGH cases are
         pending and in which all other claims against RGH will
         be decided.

At a chambers conference convened in Philadelphia, Judge Carey
expressed his view that he does not want to set-up a situation
where the Eastern District of Pennsylvania and the Southern
District of New York are considering the same or overlapping
issues at the same time.

Ann B. Laupheimer, Esq., at Blank, Rome, Comisky & McCauley and
Lawrence Tabas, Esq., at Obermayer, Renmann, step Judge Carey
through the Rehabilitator's story of how matters got to his
courtroom:

       RIC's rehabilitation proceedings commenced on May 29, 2001
in Pennsylvania State Court.  The very same day, the Debtors and
their board members sought to implement, without the consent of
the Insurance Commissioner or the Rehabilitator, a settlement
which utilized $17.4 million of a limited pool of insurance
proceeds of the Lloyds Policies which provide coverage for the
Debtors, their officers and directors, and RIC and its officers
and directors. In addition, the benefits of that settlement
would flow to creditors of the Debtors, a constituency whose
entitlement to assets falls low in the priorities of potential
claimants upon the proceeds of the Lloyds Policies. As a result,
the Rehabilitator filed the Emergency Petition in the
Commonwealth Court on June 4, 2001 to preserve the proceeds of
the Lloyds Policies.

       Thereafter, on June 11, 2001, the Rehabilitator commenced
the Commonwealth Court Action for a determination that in excess
of $95 million is held by RGH in a constructive or resulting
trust for the benefit of RIC and should be returned to RIC.
This sum was upstreamed from RIC for nonexistent tax payments
and refunds that resulted from RIC's losses.

       The next day, on June 12, 2001, the Debtors commenced
their chapter 11 cases.  Two weeks later, on June 29, 2001, the
Debtor caused the Rehabilitator's Emergency Petition and the
Commonwealth Court Action to be removed from the Commonwealth
Court to the Pennsylvania Bankruptcy Court of the Eastern
District and moved to transfer venue of those proceedings to
this Court.  The date obtained by the Debtors for hearing on the
Venue Motions was August 1, 2001.  In response to these actions
by the Debtors, the Rehabilitator took two simultaneous actions.
The Rehabilitator (a) filed the Dismissal Motion with this Court
on July 11, 2001, which was scheduled for hearing on August 8,
2001, and (b) filed motions with the Pennsylvania Bankruptcy
Court of the Eastern District on July 12, 2001 to remand the
removed Emergency Petition and Commonwealth Court Action back to
the Commonwealth Court.

       In accordance with established law in the Eastern District
of Pennsylvania, the Rehabilitator made a motion for an
expedited hearing on the Remand Motions in order to have them
heard at the same hearing date as the Venue Motions (August 1,
2001).  The Pennsylvania Bankruptcy Court of the Eastern
District granted that motion.

That series of events, the Rehabilitator contends, makes the
Remand Motion the one that should be heard first -- and heard in
Pennsylvania.

The Rehabilitator charges the Debtors and the Committee with
flagrant forum shopping, artificial deadlines and delay tactics,
all in an effort to avoid the proper handling of RIC's
insolvency by a state court administering state law governing
the regulation of business of insurance, free from interference
by federal statutes, as required under the McCarran Ferguson
Act.

                           *   *   *

Not persuaded by the Rehabilitator's chicken-and-egg arguments,
Judge Carey advised the parties in a Conference Call that he
concludes the Motion to Dismiss should be heard by Judge
Gonzalez first.  If the Rehabilitator prevails in her argument
that the chapter 11 cases are a sham, there is nothing left for
the Eastern District of Pennsylvania to consider.  In the event
that the Debtors successfully defend against the Motion to
Dismiss, Judge Carey will entertain the Rehabilitator's Remand
Motion on November 7, 2001 at 10:00 a.m. (Reliance Bankruptcy
News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


RHYTHMS NETCONNECTIONS: Cuts Jobs & Halts Service For 31 Days
-------------------------------------------------------------
Rhythms NetConnections Inc. (OTC Bulletin Board: RTHMQ), a
provider of broadband communication services, said the Company
sent 31-day service termination notices to all of its customers.
During the next 31 days, Rhythms intends to assist its customers
in transitioning their existing digital subscriber line services
to alternative broadband providers.

The Company is also reducing its workforce by approximately 700
employees, or approximately 75 percent of its total workforce.
Approximately 85 percent of the affected employees are in
Colorado.

                    About Rhythms

Based in Englewood, Colo., Rhythms NetConnections Inc. (OTC
Bulletin Board: RTHMQ) provides DSL-based, broadband
communication services to businesses and consumers. On August 1,
2001, Rhythms and all of its wholly-owned U.S. subsidiaries
voluntarily filed for reorganization under Chapter 11 of the
U.S. Bankruptcy Code in the Southern District of New York. For
more information concerning Rhythms, call 1-800-RHYTHMS (1-800-
749-8467), or visit the Company's Web site at
http://www.rhythms.com

Rhythms, Rhythms NetConnections and (any product names for which
trademark applications have been filed) are trademarks of
Rhythms NetConnections Inc.


STELLEX TECHNOLOGIES: Wants More Time To Solicit Votes For Plan
---------------------------------------------------------------
Stellex Technologies, Inc. and its affiliated debtors request
the entry of an order further extending through and including
September 19, 2001 the time within which the debtors maintain
the exclusive right to solicit acceptances for any plan of
reorganization filed on or prior to June 11, 2001.

A hearing to consider confirmation of the plan has been set for
August 21, 2001. However, the current exclusive solicitation
deadline will expire prior to the voting deadline. Accordingly
the debtors request this extension.


TANDYCRAFTS INC: Names Jeff Pecora As New President For Pinnacle
----------------------------------------------------------------
Tandycrafts, Inc. (Pink Sheets: TACR), which filed for Chapter
11 protection on May 15, 2001, announced two key management
changes at its Pinnacle Art & Frame division.

The Fort Worth, Texas consumer products Company said Jeff Pecora
has been named President of the Pinnacle Art & Frame division.
Jeff, who was formerly Senior Vice President of Sales, has been
with Pinnacle 16 years and has been instrumental in providing
leadership to the sales and service group. Under his guidance,
Pinnacle has made significant gains with some of their largest
customers in the mass merchandise and specialty retail channels.

Tim Charon has been named Senior Vice President of Sales &
Marketing at Pinnacle. Tim has 17 years of industry experience,
the last 5 with Pinnacle. During this past year, Tim has had
primary responsibility for managing Pinnacle's largest account.
Under his guidance, this account has grown significantly.

"Through the transition of the past year both Jeff and Tim have
played important roles at Pinnacle," said Michael J Walsh,
Chairman and Chief Executive officer at Tandycrafts. "With these
changes, we intend to sharpen our focus on our profitable
businesses as we concentrate on the driving factors of our
business."

"Pinnacle is a terrific company that remains well positioned to
serve our customer base," Pinnacle's President Pecora said.
"Despite our current financial issues, our core competencies
cannot be duplicated. I plan to re-focus the management team,
our associates and suppliers to enable the company to build upon
its excellent track record."

"We have demonstrated over the years that we can compete with
anyone in the frame and mirror business," said Tim Charon Senior
Vice President of Sales. "We plan to become an even more
important supplier by adding fresh new looks to our product
line."

Tandycrafts, Inc. -- http://www.tandycrafts.com-- is a maker
and marketer of picture frames and wall decor.  Tandycrafts'
products are sold nationwide through wholesale distribution
channels, including mass merchandisers and specialty retailers.


TRISTAR CORPORATION: Files For Chapter 11 Protection
----------------------------------------------------
Tristar Corporation (TSAR) filed for and obtained bankruptcy
protection under chapter 11 petition.

Tristar has secured debtor-in-possession financing from its
current lender and has a significant backlog of customer orders
for the 2001 holiday season which it anticipates fulfilling.

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.


TRISTAR CORP.: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Tristar Corporation
         105 St. Mary's Street, Suite 1800
         San Antonio, TX 78205
         aka Tristar do Brasil
         aka Tristar d Mexico
         aka Fragrance Impressions, Ltd.
         aka TRISTAR USA, INC.

Type of Business: Tristar is principally engaged in developing,
                  manufacturing, marketing and distributing value
                  oriented designer alternative fragrances,
                  complementary products to those fragrances and
                  cosmetic pencils.

Chapter 11 Petition Date: August 8, 2001

Court: Western District of Texas (San Antonio)

Bankruptcy Case No.: 5-01-53706-lmc

Judge: Leif M. Clark

Debtor's Counsel: David S. Gragg, Esq.
                   Langley & Banack, Inc.
                   Trinity Plaza II
                   745 East Mulberry, Suite 900
                   San Antonio, TX 78212-3166
                   (210) 736-6600

Total Assets: $43,102,000

Total Debts: $36,391,000

List Of Debtor's 20 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Drabel                        Trade Debt-Supplies     $1,236,674
Francis Lebard
Le Pre De L'Isle
16 Rue De La Metainie
96540 Marines
France
011 33 1346 759

Trilite Internationsl, LLC    Trade Debt               $913,376
Hitesh Desai
PO Box 41362
Baniyas Complex, Suite 402
Nasser Square Deira
Dubai, UAE
011 91 142 234 478

Tom McCann                    Notes Payable/           $681,171
43 Bradley Road               Severance Agmt
Weston, CT 06883
(203) 226-4512

Wisthoff GMBH & Co.           Trade Debt               $662,475
Vera Heinsohn
4300 Essen 14 Postfach 142660
Fed Republic CY
Germany
011 49 201 5602

George Luby                   Note Payable             $612,669
1937 Innisbrook Ct.
Venice, FL 34293
(941) 493-7642

Ron L. Walsworth              Note Payable             $544,814
28 Old Tabby Road
Spring Island, SC 29910
(843)987-1655

Armstrong Packaging           Trade Debt               $480,743
Louis Armstrong
PO Box 203
706 Rand
Kaufman. TX 75142
(800) 366-0488

Fulbright & Jaworski, L.L.P   Legal Services           $417,015
Phil Rentfro/Susan Ferguson
300 Convent St.
Suite 2200
San Antonio, TX 78205
(210) 270-7172

Starion International Ltd.    Trade Debt               $400,792
Hunters Road
Welson Industrial Estate
Corby Northhampshire
NN17 1 JE England
Navin Ullal
Divis Health, Controller

Precision Valve               Trade Debt               $376,900
85 Fuller Road
Ajax Ontario L1S 2E1
Canada

Jack Friedman                 Note Payable             $374,353
901 North Ocean Blvd.
Palm Beach, FL 33480

Richard Howard                Severance Claim          $361,867
5 Woods Ends Road
Rumson, NJ 07760
(732) 747-3005

Emicos International Ltd.     Trade Debt               $357,572
PO Box 16758
Dubai UAE
011 971 4 3497

Acrotech Southwest Inc.       Trade Debt               $336,339
200 Holdsworth Dr.
PO Box 291487
Kerrville, TX 28029-1487
(830) 896-6464

EMSAR                         Trade Debt               $317,466
Rick Schofield
7871 Collections Center Dr.
Chicago, IL 60693
(203) 502-6800

Precious Products (India)     Trade Debt               $302,650
Ltd.
Hiten Patel
Piso No. 1 to 4
Gal No 986
Sanascoadi, Tal Shirur
Dist Pune
India
01191 982 301 7715 (cell)
01191 213 752 3

Meso PVT Ltd.                 Trade Debt               $296,920
Harish Malaviva
101 Centre Point
Jujbhai Lane
Lalbaug Mumbai 400 012
01191 224 166 295 (cell)
01191 224 148 2

Fort Worth Packaging          Trade Debt               $208,527

Joseph McKeon                 Notes Payable            $179,324

California Cedar Products     Trade Debt               $160,259


VLASIC FOODS: Paying Prepetition Shipping-Related Claims
--------------------------------------------------------
Vlasic Foods International, Inc. sought and obtained the Court's
authority to make payments to commercial common
carrier/shippers, independent operators or regional and pooled
distribution centers and public warehousemen.

David R. Hurst, Esq., at Skadden Arps slate Meagher & Flom, in
Wilmington, Delaware explains that these payments are necessary
for the continued delivery, distribution and sale of the
Debtors' products. Failure to make these payments could result
in irreparable damages to the Debtors' estates, Mr. Hurst says.

As of the Petition Date, Mr. Hurst says, the estimated aggregate
amount of outstanding pre-petition Distribution Charges is
approximately $200,000.

Aside from shippers, distributors and warehousemen, the Debtors
also employ several independent brokers who sell certain of the
Debtors' products to the Debtors' customers.  The Debtors
generally pay these brokers a commission after receipt of full
payment from the customer. Mr. Hurst and a number of Independent
Brokers stand to receive approximately a total of $1,600,000.
If these pre-petition brokers' fees are not paid, the Debtors
believe it would drastically curtail the brokers' selling
efforts on their behalf.

So, the Court also authorized the Debtors to make payments to
these independent brokers.

The Court also authorized and directed all applicable banks and
other financial institutions to receive, process, honor and pay
any and all checks evidencing amounts paid by the Debtors
whether presented prior or after the Petition Date.

Those shippers, distributors, warehousemen and independent
brokers who accept these payments are obliged to continue
providing services to the Debtors on the customary trade terms
before the Petition Date.  If any of them refuses to do so,
then:

     (i) any payments relating to this Order made after the
         Petition Date shall be deemed avoidable post-petition
         transfer under section 549 of the Bankruptcy Code and
         therefore, shall be recovered by the Debtors in cash
         upon written request, and

    (ii) upon recovery by the Debtors, the claim shall be
         reinstates as a pre-petition claim in the amount so
         recovered.

The Court emphasized that this order should be construed to
limit, or in any way affect, the Debtors' ability to contest any
claims asserted by the third parties on any ground that
applicable law permits nor shall be deemed as executory
contracts with the same third parties. (Vlasic Foods Bankruptcy
News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


WHEELING-PITTSBURGH: Settles Disputes With Trustees For IRBs
------------------------------------------------------------
Wheeling-Pittsburgh Steel Corp. maintains two facilities in
Virginia and Nevada that are financed with industrial revenue
bonds. By Motion, the Debtors ask Judge Bodoh to put his stamp
of approval on two Stipulations that will resolve disputes with
the Indenture Trustees for these industrial revenue bonds.

              The Nevada Industrial Revenue Bonds

The Director of the State of Nevada Department of Business and
Industry issued tax exempt industrial revenue bonds in the
amount of $3.5 million to SunTrust Bank, as successor-in-
interest to Crestar Bank, the Nevada Trustee for certain
bondholders under an Indenture dated in September 1999, and
loaned the proceeds from the sale of the Nevada bonds to FBW
Leasecorp, inc., under a Financing Agreement dated in September
1999, for the purpose of financing construction of an 18,500
square foot manufacturing facility in Churchill County, Nevada.
FBW leased the Nevada facility to WPSC under a Lease Agreement
dated August 1999, and under an Assignment of Rents and Leases
dated august 1999, assigned to the Nevada Trustee as security
for repayment of the Nevada bonds FBW's right to collect monthly
rent payments under the Nevada Lease, and granted the Nevada
Trustee mortgages and security interests in the Nevada facility
and the property on which it was constructed, all fixtures,
machinery, and other personal property used in connection with
the Nevada facility under a Deed of Trust and Security
Agreement.

Under the Nevada bond documents, Nevada rent is supposed to be
paid by WPSC through a monthly deposit into a revenue fund held
by the Nevada Trustee from which the Nevada Trustee is to make
required distributions to the Nevada bondholders semiannually on
each March 1 and September 1. Under the Nevada Indenture, a Debt
Service Reserve Fund was established and the Nevada Trustee is
permitted to draw on the Debt Service Reserve Fund as necessary
to satisfy the obligations of WPSC if the funds in the Revenue
Fund are insufficient. The Nevada Trustee is also presently
holding funds in a variety of other accounts.

Since the payment due for April 2001, WPSC has not paid any
installments of the Nevada rent due under the Nevada leases and
has indicated that it does not intend to make any further
payments during the pendency of this bankruptcy case.

            The Virginia Industrial Revenue Bonds

The Industrial Development Authority of Greensville County,
Virginia, issued tax exempt revenue bonds in the amount of $4.68
million to First Union National Bank as trustee for certain
bondholders under an Indenture dated in April 19999, and used
the proceeds from the sale of the Virginia bonds to finance
construction of an 78,250 square foot manufacturing facility in
Greensville County, Virginia.

The Authority leased the Virginia facility to WPSC under a Lease
Agreement dated as of August 17, 1998, and, under an Assignment
of Rents and Leases dated as of April 1, 1999, assigned to the
Virginia Trustee as security for repayment of the Virginia bonds
the Authority's right to collect monthly rent payments under the
Virginia lease, and further granted the Virginia Trustee
mortgages and security interests in the Virginia facility and
the property on which it was constructed, all fixtures,
machinery and other personal property used in connection with
the Virginia facility under the Amended and Restated Deed of
Trust and Security Agreement dated as of April 1, 19999.

The Virginia bond documents also provide that the Authority's
obligation to pay any amounts due under the Virginia bond
documents is limited to the revenues derived from WPSC under the
Virginia lease.

Under the Virginia bond documents, Virginia rent is supposed to
be paid by WPSC through a monthly deposit into a revenue fund
held by the Virginia Trustee from which the Virginia Trustee is
to make required distributions to the Virginia bondholders
semiannually on each April 1 and October 1. Under the Virginia
Indenture, a Debt Service Reserve Fund was established and the
Virginia Trustee s permitted to draw on the Debt Service Reserve
Fund as necessary to satisfy the obligations of WPSC if the
funds in the revenue fund are insufficient. The Virginia Trustee
is also presently holding funds in a variety of other accounts.

Since the payment due for May 2001, WPSC has not paid any
installments of Virginia rent due under the Virginia lease and
has indicated that it does not intend to make any further
payments during the pendency of its bankruptcy case.

                       The Disputes

Michael E. Wiles, Esq., and Richard F. Hahn, Esq., at Debevoise
& Plimpton, explain that WPSC and the Nevada Trustee and the
Virginia Trustee dispute whether:

      (a) WPSC and the Nevada Lease and the Virginia Lease
constitute secured financing or true leases;

      (b) whether the Trustees are entitled to the protections
afforded lessors under the Bankruptcy Code; and

      (c) if the transactions constitute secured financings,
whether the Trustees are entitled to adequate protection under
the Bankruptcy Code.

WPSC and the Trustees believe it is in their respective best
interests to defer litigation over these issues. Pending
resolution of these disputes, WPSC and the Trustees have
negotiated stipulations and orders granting the Trustee Banks
limited relief from the automatic stay. The terms and conditions
of the Virginia stipulation and the Nevada stipulation are
identical, other than the names of the parties.

                Terms of the Stipulations

Under the stipulations, the Trustees, the Authority, and FBW
will not seek relief from the automatic stay in respect of their
rights under the bond documents and lease or seek to compel WPSC
to pay rent or adequate protection through November 1, 2001. The
stipulations also provide that no party in interest will
initiate any action seeking an adjudication as to whether 9i)
the lease and other bond documents constitute a true lease or a
secured financing, (ii) the Trustees, the Authority or FBW is
entitled to protections offered a lessor under the Bankruptcy
Code or to relief from the automatic stay or to receive adequate
protection payments, or (iii) the nature, amount, priority and
status of the claims of the Trustees, the Authority, or FBW. The
stipulations do not limit WPSC, the Trustees, the Authority,
FBW, or the Virginia or Nevada bondholders' ability to file
pleadings or take other legal action with respect of their
rights under the bond documents as part of a plan of
reorganization and disclosure statement or motion for authority
to sell the facility or to assume the lease or to assign WPSC's
rights under the lease.

The stipulations further provide that the Trustees are granted
limited relief from the automatic stay to withdraw funds in any
of the trust accounts as necessary to pay (i) principal or/and
interest payments which thereafter become due on the bonds on
the dates when due, (ii) any fees and expenses of the Trustees
incurred under the Indenture (including attorney's fees), and
(iii) any other costs, fees and expenses which may become due
and owing under the Indenture.

WPSC will, in the interim, continue, as long as the lease
remains in effect, to comply with the provisions of the lease
with respect to maintenance and insurance of the facilities.
Finally, the stipulation confers exclusive jurisdiction on the
Bankruptcy Court to determine these disputes. (Wheeling-
Pittsburgh Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


WINSTAR COMM.: Court Approves Interim Compensation Procedures
-------------------------------------------------------------
Winstar Communications, Inc. sought and obtained a Court Order
to establish procedures for interim compensation and
reimbursements of expenses of professionals employed in these
chapter 11 estates.

The Court orders the implementation of procedures for the
monthly payment of compensation and reimbursement of the
professionals as specifically stated:

a) Not earlier than the 25th day of each calendar month, each
    professional seeking interim compensation shall file an
    application and serve a copy to:

     (i) the Debtors, c/o Winstar Communication, Inc., 685 Third
         Avenue, New York, New York 10017 (Attn: Laura Janke,
         Esq);
    (ii) Counsel to the Debtors, Young Conaway Stargatt & Taylor,
         LLP, Wilmington Trust Center, P.O. Box 391, Wilmington,
         Delaware 19899-0391 (Attn: Pauline K. Morgan, Esq), and
         Shearman & Sterling, 599 Lexington Avenue, New York, New
         York 10022 (Attn: Marian Luketic, Esq);
   (iii) Counsel to all statutory committees appointed in these
         cases;
    (iv) Counsel to the Debtors' pre-petition lenders, Wachtell
         Lipton Rosen & Katz, 51 west 52nd Street, New York, New
         York 10019 (Attn: Chaim fortgang, Esq);(v)Counsel to the
         Debtors' post-petition lenders, Weil Gotshal & Manges,
         767 Fifth Avenue, New York, New York 10153 (Attn: Steve
         Karotkin, Esq) and (vi)the Office of the United States
         Trustee, 601 Walnut Street, Curtis Center, Suite 950
         West, Philadelphia, Pennsylvania 19106, collectively the
         Notice Parties.

    Each Notice Party will have 20 days after service of a Fee
    Application to object. After the Objection Deadline, the
    Professional may file a certificate of no objection after the
    which the Debtors are authorized to pay the Professional an
    amount equal to the lesser of

        (i) 80% and 100% of the Maximum Interim Payment and

       (ii) 80% percent of the fees and 100% of the expenses not
            subject to an objection.

b) If any of the notice parties objects to a Professional's Fee
    Application, it must file with the Court and serve on the
    affected Professional and each of the Notice Parties a
    written objection, which must be filed in Court and received
    by the affected Professional and Notice Parties on/before the
    Objection Deadline. Thereafter the objecting party and the
    affected professional may attempt to resolve the Objection on
    a consensual basis. If the parties are unable to reach a
    resolution within the 20 days after the service of the
    Objection, the affected professional may either file a
    response to the Objection with the court together with a
    request or payment of the difference between the Maximum and
    the Actual Interim Payment made; or forego payment of the
    Incremental Amount until the next interim or final fee
    application hearing, at which time the Court will consider
    and dispose of the Objection if requested by the parties.

c) Beginning the period ending June 30,2001, at three-month
    intervals or at such other intervals convenient to the Court,
    each of the Professionals must file with the court and serve
    to the Notice Parties a request for court approval and
    allowance of the compensation and reimbursement of expenses
    sought. The Interim Fee Application Request must include a
    summary of the Fee Application and other information
    requested by the Court. Each Professional must file its
    Interim Fee Application Request on/before August 14, 2001 and
    the first Interim Fee Application Request should cover the
    Interim Fee Period from the commencement of this case through
    and including June 30, 2001. Any Professional that fails to
    file when due will be ineligible to receive further payments
    until such time that the Request is submitted by the
    Professional.

d) The Debtors shall request that the Court schedule a hearing
    on the Requests at least once every 6 months, or as
    appropriated by Court.

e) The pendency of an objection to payment of compensation or
    reimbursement of expenses will not disqualify a Professional
    from future payment of compensation or reimbursement of
    expenses under these compensation procedures.

f) Neither (i) the payment of or failure to pay, in whole or in
    part, monthly interim compensation nor (ii)the filing or of
    failure to file an Objection will bind any party in interest
    or the Court with respect to the allowance of interim or
    final applications for compensation and reimbursement of
    expenses of Professionals. All fees and expenses paid are
    subject to disgorgement until final allowance by the Court.

Counsel to the Debtors, Pauline K. Morgan Esq., at Young Conaway
Stargatt & Taylor, of Wilmington, Delaware relates that the
Interim Procedures will enable the United States Trustee and all
other parties to efficiently keep track and record all
Professionals' fees and expenses incurred in these cases.
(Winstar Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

                            *********

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

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

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

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


                           *********


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

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

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

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

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

                      *** End of Transmission ***